Edgar Filing: MORGAN STANLEY EMERGING MARKETS DEBT 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			811-07694

Morgan Stanley Emerging Markets Debt Fund, Inc.
(Exact name of registrant as specified in charter)

522 Fifth Avenue, New York, New York					10036
(Address of principal executive offices)					(Zip code)

John H. Gernon 522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)

Registrant’s telephone number, including area code:				212-296-0289

Date of fiscal year end:	December 31,

Date of reporting period:		June 30, 2015

Item 1 - Report to Shareholders

Morgan Stanley Emerging Markets Debt Fund, Inc.

Directors

Frank L. Bowman

Michael Bozic

Kathleen A. Dennis

Nancy C. Everett

Jakki L. Haussler

James F. Higgins

Dr. Manuel H. Johnson

Joseph J. Kearns

Michael F. Klein

Michael E. Nugent

W. Allen Reed

Fergus Reid

Officers

Michael E. Nugent

Chairperson of the Board

John H. Gernon

President and Principal
Executive Officer

Stefanie V. Chang Yu

Chief Compliance Officer

Joseph C. Benedetti

Vice President

Francis J. Smith

Treasurer and Principal
Financial Officer

Mary E. Mullin

Secretary

Adviser and Administrator

Morgan Stanley Investment Management Inc.

522 Fifth Avenue

New York, New York 10036

Custodian

State Street Bank and Trust Company

One Lincoln Street

Boston, Massachusetts 02111

Stockholder Servicing Agent

Computershare Trust Company, N.A.

211 Quality Circle, Suite 210

College Station, Texas 77845

Legal Counsel

Dechert LLP

1095 Avenue of the Americas

New York, New York 10036

Counsel to the Independent Directors

Kramer Levin Naftalis & Frankel LLP

1177 Avenue of the Americas

New York, New York 10036

Independent Registered Public Accounting Firm

Ernst & Young LLP

200 Clarendon Street

Boston, Massachusetts 02116

For additional Fund information, including the Fund's net asset value per share and information regarding the investments comprising the Fund's portfolio, please call toll free 1 (800) 231-2608 or visit our website at www.morganstanley.com/im. All investments involve risks, including the possible loss of principal.

INVESTMENT MANAGEMENT

Morgan Stanley
Investment Management Inc.
Adviser

Morgan Stanley Emerging Markets Debt Fund, Inc.
NYSE: MSD

Semi-Annual Report

June 30, 2015

CEMSDSAN
1262991 Exp 8.31.16

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Table of Contents

Letter to Stockholders					3
Investment Advisory Agreement Approval					6
Portfolio of Investments					8
Statement of Assets and Liabilities					13
Statement of Operations					14
Statements of Changes in Net Assets					15
Financial Highlights					16
Notes to Financial Statements					17
Portfolio Management					29
Investment Policy					30
Dividend Reinvestment and Cash Purchase Plan					34
U.S. Privacy Policy					35

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Letter to Stockholders (unaudited)

Performance

For the six months ended June 30, 2015, the Morgan Stanley Emerging Markets Debt Fund, Inc. (the "Fund") had total returns of 2.57%, based on net asset value, and 2.14% based on market value per share (including reinvestment of distributions), compared to its benchmark, the J.P. Morgan Emerging Markets Bond Global Index (the "Index")*, which returned 1.76%. On June 30, 2015, the closing price of the Fund's shares on the New York Stock Exchange was $9.01, representing a 15.7% discount to the Fund's net asset value per share. Past performance is no guarantee of future results.

Factors Affecting Performance

• European politics, central bank policies, volatile energy prices, and idiosyncratic issues, such as the Brazilian corruption probe, dominated headlines in the first half of 2015. Emerging markets (EM) external debt (as measured by the Index) returned 1.76% in the first half of 2015 as credit spreads tightened 12 basis points, and yields on 10-year US Treasury bonds rose 18 basis points.ⁱ The ongoing negotiations between Greece and European lenders added volatility to financial markets as investors priced in the possibility that Greece could exit the eurozone and/or restructure its debt. Despite stabilization in energy prices, the overall lower level of prices accelerated global dis-inflation trends in the first quarter and provided flexibility for central banks and governments to respond to weaker economic growth with interest rate cuts and subsidy reforms. While lowering inflation expectations, energy prices also pressured the fiscal outlook for oil-producing companies and countries, leading to downgrades in the credit ratings of Russia, Venezuela, Ghana, and Nigeria.

• Higher-yielding, lower-rated countries, such as Russia, Jamaica, Belarus, and Ecuador, outperformed the broader market as oil prices began to recover and stabilize, and tensions eased in Ukraine. The conflict in Ukraine reached a lull after the Minsk II ceasefire agreement was signed in February. The drop in hostilities in Ukraine reduced the probability of additional sanctions being placed on Russia, easing investor concern and contributing to a strong rebound in Russian assets. Additionally, despite Russia having its foreign credit rating downgraded to junk status, the country's bonds benefited from positive technicals, as local banks seeking to tap into favorable repo-financing provided by the Russian central bank drove demand for dollar-denominated euro bonds.

• Higher-quality and longer-maturity bonds from countries such as Colombia, Malaysia, Mexico, and Turkey underperformed the broader market in part because their lower spread levels provided an insufficient cushion to offset the negative impact of higher U.S. Treasury yields. Ukrainian debt was the worst-performing segment in the external debt universe as the probability for a steeper-than-originally expected restructuring of the country's sovereign and quasi-sovereign debt increased.

• Contributing to relative performance during the first half of the year were the Fund's overweight positions in the Philippines, Venezuela, Dominican Republic, Kazakhstan, and Indonesia. Also contributing to relative performance was avoidance of Ukrainian debt and security selection within Mexico and South Africa.

• Detracting from relative performance during the first half of the year was security selection in Brazil and underweight positions in Argentina, Ecuador, and Lebanon. The use of U.S. Treasury bond futures was a slight detractor from performance in the period.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Letter to Stockholders (unaudited) (cont'd)

Management Strategies

• We believe macro and policy divergences will remain the main drivers of asset price performance for 2015 as financial markets differentiate between perceived winners and losers. U.S. and U.K. policy makers should continue their withdrawal of monetary stimulus, in sync with a cyclical recovery in economic activity as long as global deflationary pressures don't re-emerge. While U.S. monetary tightening expectations could trigger another bout of volatility in EM assets, we believe faster developed market (primarily in the U.S. and the U.K.) growth should bode well for EM growth in the medium term. In addition, ongoing quantitative easing (QE) by the European Central Bank (ECB) and continued dovish stances by the Bank of Japan and China's central bank may support EM economies and could partially offset the effects of a less-accommodative U.S. monetary policy.

• The primary risks that we continue to monitor are the path of Chinese economic growth and policy, a faltering in the rebound of commodity prices, the potential for rising interest rates in the U.S., and ongoing geopolitical events in Europe and the Middle East. Renewed program negotiations between Greece and European lenders or an exit from the eurozone by Greece remain risks. However, so far we have seen limited contagion from Greek capital controls and the country's non-payment of International Monetary Fund loans that occurred in June 2015. Oil prices have recovered from the lows recorded earlier in the year and appear to be range-bound, which could reduce the fiscal and inflationary benefits to commodity-importing nations experienced earlier in the year. However, a slowing China may continue to weigh on commodity prices and commodity-exporting economies. Such a scenario may provide opportunities to benefit from the diverging economic trajectories. Divergence in G3 (U.S., U.K., and Japan) monetary policy path remains supportive of a long U.S. dollar bias once U.S. economic indicators recover.

• We distinguish between three broad groups of EM countries. The first group includes those dependent largely on the direction of U.S. Federal Reserve (Fed) policy, such as Mexico, Colombia, Chile and EM Asia. An earlier-than-expected Fed rate hike and large foreign ownership levels of their domestic debt markets make these markets especially vulnerable to sharp adjustments. We expect the first Fed rate hike in the latter part of 2015 but note that the risk for a "Taper Tantrum II" has been reduced by more dovish Fed communications. A second group is tightly-linked to the ECB and QE, and includes most of Central Europe. A final group of EM countries trade mostly on their own idiosyncratic drivers, including Brazil, Russia, China, Venezuela, Turkey, and Ukraine. In the latter group, we note that Brazil offers the highest real interest rates in EM local markets, while in the midst of a corruption scandal and fiscal adjustment process. We believe these groupings allow for active management opportunities, providing us the chance to pick potential winners and losers more effectively. We remain selective within domestic debt, even after the broad-based weakness in EM currencies versus the U.S. dollar, as the macroeconomic adjustment towards higher real rates and lower current account deficits has not reached its full conclusion. We remain favorable toward external debt, as spreads remain fairly wide and may adequately compensate investors for the risks highlighted.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Letter to Stockholders (unaudited) (cont'd)

Sincerely,

John H. Gernon
President and Principal Executive Officer July 2015

*The J.P. Morgan Emerging Markets Bond Global ("EMBG") Index tracks total returns for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady Bonds, loans, Eurobonds and local market instruments for emerging market countries. It is not possible to invest directly in an index.

ⁱ Data from Morgan Stanley Investment Management, Bloomberg L.P., J.P. Morgan

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Investment Advisory Agreement Approval (unaudited)

Nature, Extent and Quality of Services

The Board reviewed and considered the nature and extent of the investment advisory services provided by the Adviser (as defined herein) under the advisory agreement, including portfolio management, investment research and equity and fixed income securities trading. The Board also reviewed and considered the nature and extent of the non-advisory, administrative services provided by the Fund's Adviser under the administration agreement, including accounting, operations, clerical, bookkeeping, compliance, business management and planning, legal services and the provision of supplies, office space and utilities at the Adviser's expense. The Board also considered the Adviser's investment in personnel and infrastructure that benefits the Fund. (The advisory and administration agreements together are referred to as the "Management Agreement.") The Board also considered that the Adviser serves a variety of other investment advisory clients and has experience overseeing service providers. The Board also compared the nature of the services provided by the Adviser with similar services provided by non-affiliated advisers as reported to the Board by Lipper, Inc. ("Lipper").

The Board reviewed and considered the qualifications of the portfolio managers, the senior administrative managers and other key personnel of the Adviser who provide the administrative and advisory services to the Fund. The Board determined that the Adviser's portfolio managers and key personnel are well qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board concluded that the nature and extent of the advisory and administrative services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund and supported its decision to approve the Management Agreement.

Performance, Fees and Expenses of the Fund

The Board reviewed the performance, fees and expenses of the Fund compared to its peers, as determined by Lipper, and to appropriate benchmarks where applicable. The Board discussed with the Adviser the performance goals and the actual results achieved in managing the Fund. When considering a fund's performance, the Board and the Adviser place emphasis on trends and longer-term returns (focusing on one-year, three-year and five-year performance, as of December 31, 2014, or since inception, as applicable). When a fund underperforms its benchmark and/or its peer group average, the Board and the Adviser discuss the causes of such underperformance and, where necessary, they discuss specific changes to investment strategy or investment personnel. The Board noted that the Fund's performance was better than its peer group average for the one-, three- and five-year periods . The Board also noted that the Fund underperformed its benchmark index for the one-, three- and five-year periods. The Board discussed with the Adviser the level of the advisory and administration fees (together, the "management fee") for this Fund relative to comparable funds and/or other accounts advised by the Adviser and/or compared to its peers as determined by Lipper. In addition to the management fee, the Board also reviewed the Fund's total expense ratio. The Board noted that the while the Fund's contractual management fee and total expense ratio were lower than its peer group average, the actual management fee was equal to its peer group average. After discussion, the Board concluded that the Fund's (i) performance was competitive with its peer group average; and (ii) management fee and total expense ratio were competitive with its peer group averages.

Economies of Scale

The Board considered the size and growth prospects of the Fund and how that relates to the Fund's total expense ratio and particularly the Fund's management fee rate, which does not include breakpoints. In conjunction with its review of the Adviser's profitability, the Board discussed with the Adviser how a change in assets can affect the efficiency or effectiveness of managing the Fund and whether the management fee level is appropriate relative to current and projected asset levels and/or whether the management fee structure reflects economies of scale as asset levels change. The Board considered that, with respect to closed-end funds, the assets are not likely

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Investment Advisory Agreement Approval (unaudited) (cont'd)

to grow with new sales or grow significantly as a result of capital appreciation. The Board concluded that economies of scale for the Fund were not a factor that needed to be considered at the present time.

Profitability of the Adviser and Affiliates

The Board considered information concerning the costs incurred and profits realized by the Adviser and its affiliates during the last year from their relationship with the Fund and during the last two years from their relationship with the Morgan Stanley Fund Complex and reviewed with the Adviser the cost allocation methodology used to determine the profitability of the Adviser and affiliates. The Board has determined that its review of the analysis of the Adviser's expenses and profitability supports its decision to approve the Management Agreement.

Other Benefits of the Relationship

The Board considered other direct and indirect benefits to the Adviser and/or its affiliates derived from their relationship with the Fund and other funds advised by the Adviser. These benefits may include, among other things, fees for trading, distribution and/or shareholder servicing and for transaction processing and reporting platforms used by securities lending agents, and research received by the Adviser generated from commission dollars spent on funds' portfolio trading . The Board reviewed with the Adviser these arrangements and the reasonableness of the Adviser's costs relative to the services performed. The Board has determined that its review of the other benefits received by the Adviser or its affiliates supports its decision to approve the Management Agreement.

Resources of the Adviser and Historical Relationship Between the Fund and the Adviser

The Board considered whether the Adviser is financially sound and has the resources necessary to perform its obligations under the Management Agreement. The Board also reviewed and considered the historical relationship between the Fund and the Adviser, including the organizational structure of the Adviser, the policies and procedures formulated and adopted by the Adviser for managing the Fund's operations and the Board's confidence in the competence and integrity of the senior managers and key personnel of the Adviser. The Board concluded that the Adviser has the financial resources necessary to fulfill its obligations under the Management Agreement and that it is beneficial for the Fund to continue its relationship with the Adviser.

Other Factors and Current Trends

The Board considered the controls and procedures adopted and implemented by the Adviser and monitored by the Fund's Chief Compliance Officer and concluded that the conduct of business by the Adviser indicates a good faith effort on its part to adhere to high ethical standards in the conduct of the Fund's business.

General Conclusion

After considering and weighing all of the above factors, with various written materials and verbal information presented by the Adviser, the Board concluded that it would be in the best interest of the Fund and its shareholders to approve renewal of the Management Agreement for another year. In reaching this conclusion the Board did not give particular weight to any single piece of information or factor referenced above. The Board considered these factors and information over the course of the year and in numerous meetings, some of which were in executive session with only the independent Board members and their counsel present. It is possible that individual Board members may have weighed these factors, and the information presented, differently in reaching their individual decisions to approve the Management Agreement.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Portfolio of Investments (unaudited)

(Showing Percentage of Total Value of Investments)

	Face Amount (000)		Value (000)
FIXED INCOME SECURITIES (89.5%)
Argentina (0.4%)
Sovereign (0.4%)
Republic of Argentina, 2.50%, 12/31/38 (a)(b)(c)	$	2,150	$	1,161
Brazil (6.4%)
Corporate Bonds (3.6%)
Banco Safra SA, 6.75%, 1/27/21		690		758
6.75%, 1/27/21 (d)		1,360		1,495
CIMPOR Financial Operations BV, 5.75%, 7/17/24 (d)		1,318		1,074
Embraer Netherlands Finance BV, 5.05%, 6/15/25		1,275		1,275
Minerva Luxembourg SA, 8.75%, 4/3/19 (d)(e)(f)(g)		1,290		1,297
Odebrecht Offshore Drilling Finance Ltd., 6.63%, 10/1/23 (d)		626		438
6.75%, 10/1/23 (d)(e)		3,869		2,786
				9,123
Sovereign (2.8%)
Brazil Minas SPE via State of Minas Gerais, 5.33%, 2/15/28		1,900		1,805
5.33%, 2/15/28 (d)		2,750		2,612
Brazilian Government International Bond, 5.00%, 1/27/45 (e)		2,988		2,600
				7,017
				16,140
Chile (3.9%)
Corporate Bonds (1.0%)
Colbun SA, 4.50%, 7/10/24 (d)		1,372		1,374
Empresa Electrica Angamos SA, 4.88%, 5/25/29 (d)(e)		1,290		1,273
				2,647
Sovereign (2.9%)
Corp. Nacional del Cobre de Chile, 4.88%, 11/4/44 (d)(e)		1,910		1,834
Empresa Nacional del Petroleo, 4.75%, 12/6/21		2,605		2,705

	Face Amount (000)		Value (000)
5.25%, 8/10/20	$	2,600	$	2,761
				7,300
				9,947
China (3.3%)
Sovereign (3.3%)
Sinopec Group Overseas Development 2013 Ltd., 4.38%, 10/17/23		7,240		7,606
Three Gorges Finance I Cayman Islands Ltd., 3.70%, 6/10/25 (d)		780		788
				8,394
Colombia (2.1%)
Corporate Bond (0.2%)
Ecopetrol SA, 5.88%, 5/28/45		576		511
Sovereign (1.9%)
Colombia Government International Bond, 4.38%, 7/12/21 (e)		1,460		1,531
5.00%, 6/15/45		2,400		2,232
11.75%, 2/25/20		815		1,112
				4,875
				5,386
Croatia (1.4%)
Sovereign (1.4%)
Croatia Government International Bond, 5.50%, 4/4/23		1,670		1,726
6.00%, 1/26/24 (d)		1,690		1,795
				3,521
Dominican Republic (2.0%)
Sovereign (2.0%)
Dominican Republic International Bond, 6.85%, 1/27/45 (d)		4,182		4,286
7.45%, 4/30/44 (d)		666		731
				5,017
Ecuador (0.7%)
Sovereign (0.7%)
Ecuador Government International Bond, 10.50%, 3/24/20		1,720		1,733

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

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Portfolio of Investments (unaudited) (cont'd)

(Showing Percentage of Total Value of Investments)

	Face Amount (000)		Value (000)
El Salvador (0.4%)
Sovereign (0.4%)
El Salvador Government International Bond, 6.38%, 1/18/27 (d)	$	1,020	$	992
Ethiopia (0.7%)
Sovereign (0.7%)
Federal Democratic Republic of Ethiopia, 6.63%, 12/11/24 (d)		1,720		1,705
Gabon (0.5%)
Sovereign (0.5%)
Gabonese Republic, 6.95%, 6/16/25 (d)(e)		1,200		1,194
Honduras (0.5%)
Sovereign (0.5%)
Republic of Honduras, 8.75%, 12/16/20		1,030		1,172
Hungary (3.4%)
Sovereign (3.4%)
Hungary Government International Bond, 4.00%, 3/25/19		152		157
5.38%, 3/25/24		2,468		2,681
5.75%, 11/22/23		4,080		4,539
6.38%, 3/29/21		1,050		1,197
				8,574
Indonesia (8.5%)
Sovereign (8.5%)
Indonesia Government International Bond, 5.13%, 1/15/45 (d)		1,530		1,463
5.88%, 1/15/24 (d)		1,200		1,329
7.75%, 1/17/38		2,429		3,103
Majapahit Holding BV, 7.75%, 1/20/20		3,950		4,577
Pertamina Persero PT, 4.30%, 5/20/23		4,750		4,560
4.88%, 5/3/22		1,050		1,062
6.45%, 5/30/44 (d)		1,720		1,703
Perusahaan Listrik Negara PT, 5.50%, 11/22/21		3,470		3,687
				21,484

	Face Amount (000)		Value (000)
Iraq (0.3%)
Sovereign (0.3%)
Republic of Iraq, 5.80%, 1/15/28	$	1,100	$	895
Ivory Coast (1.4%)
Sovereign (1.4%)
Ivory Coast Government International Bond, 5.38%, 7/23/24 (d)		830		787
5.75%, 12/31/32		2,920		2,767
				3,554
Jamaica (0.3%)
Sovereign (0.3%)
Jamaica Government International Bond, 7.63%, 7/9/25		780		878
Kazakhstan (4.0%)
Sovereign (4.0%)
Development Bank of Kazakhstan JSC, 4.13%, 12/10/22 (d)		1,528		1,367
KazAgro National Management Holding JSC, 4.63%, 5/24/23 (d)		2,690		2,381
Kazakhstan Government International Bond, 3.88%, 10/14/24 (d)(e)		2,310		2,183
KazMunayGas National Co., JSC, 6.00%, 11/7/44 (d)		1,950		1,679
9.13%, 7/2/18		2,180		2,472
				10,082
Kenya (1.1%)
Sovereign (1.1%)
Kenya Government International Bond, 6.88%, 6/24/24 (d)		2,770		2,824
Lithuania (1.0%)
Sovereign (1.0%)
Lithuania Government International Bond, 6.63%, 2/1/22		1,600		1,910
7.38%, 2/11/20		500		597
				2,507

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

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Portfolio of Investments (unaudited) (cont'd)

(Showing Percentage of Total Value of Investments)

	Face Amount (000)		Value (000)
Mexico (12.5%)
Corporate Bonds (4.0%)
Alfa SAB de CV, 6.88%, 3/25/44	$	2,000	$	2,054
Cemex Finance LLC, 9.38%, 10/12/22		2,000		2,238
Elementia SAB de CV, 5.50%, 1/15/25 (d)(e)		740		753
Fermaca Enterprises S de RL de CV, 6.38%, 3/30/38 (d)		2,396		2,444
Nemak SA de CV, 5.50%, 2/28/23 (d)		1,090		1,123
5.50%, 2/28/23		1,500		1,545
				10,157
Sovereign (8.5%)
Mexico Government International Bond, 3.63%, 3/15/22		2,500		2,536
4.60%, 1/23/46		2,080		1,932
6.05%, 1/11/40		898		1,024
Petroleos Mexicanos, 5.50%, 1/21/21		1,330		1,446
5.63%, 1/23/46 (d)		2,000		1,875
6.38%, 1/23/45		2,520		2,599
6.50%, 6/2/41		2,600		2,717
6.63%, 6/15/35 - 6/15/38		2,780		2,960
8.00%, 5/3/19		1,750		2,054
8.63%, 12/1/23		1,990		2,465
				21,608
				31,765
Mozambique (0.4%)
Sovereign (0.4%)
EMATUM Via Mozambique EMATUM Finance 2020 BV, 6.31%, 9/11/20		1,000		934
Panama (2.0%)
Sovereign (2.0%)
Panama Government International Bond, 4.00%, 9/22/24		1,434		1,448
5.20%, 1/30/20		1,560		1,723

	Face Amount (000)		Value (000)
7.13%, 1/29/26 (e)	$	1,140	$	1,445
8.88%, 9/30/27		263		374
				4,990
Paraguay (0.9%)
Sovereign (0.9%)
Republic of Paraguay, 4.63%, 1/25/23 (d)(e)		880		893
6.10%, 8/11/44 (d)		1,420		1,449
				2,342
Peru (2.7%)
Corporate Bonds (1.3%)
Banco de Credito del Peru, 6.13%, 4/24/27 (d)(e)(f)		2,080		2,228
Union Andina de Cementos SAA, 5.88%, 10/30/21 (d)(e)		960		973
				3,201
Sovereign (1.4%)
Corp. Financiera de Desarrollo SA, 5.25%, 7/15/29 (d)(f)		1,178		1,190
Fondo MIVIVIENDA SA, 3.50%, 1/31/23 (d)		491		468
Peruvian Government International Bond, 6.55%, 3/14/37 (e)		1,550		1,937
				3,595
				6,796
Philippines (4.3%)
Sovereign (4.3%)
Philippine Government International Bond, 3.95%, 1/20/40		6,734		6,818
8.38%, 6/17/19		392		486
9.50%, 2/2/30		2,200		3,570
				10,874
Poland (2.0%)
Sovereign (2.0%)
Poland Government International Bond, 3.00%, 3/17/23		3,950		3,888
4.00%, 1/22/24		570		599
5.00%, 3/23/22		470		522
				5,009

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

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Portfolio of Investments (unaudited) (cont'd)

(Showing Percentage of Total Value of Investments)

	Face Amount (000)		Value (000)
Russia (7.3%)
Sovereign (7.3%)
Russian Foreign Bond - Eurobond, 4.50%, 4/4/22	$	15,800	$	15,543
5.63%, 4/4/42		3,200		3,020
				18,563
Serbia (0.8%)
Sovereign (0.8%)
Republic of Serbia, 4.88%, 2/25/20		1,100		1,113
7.25%, 9/28/21		935		1,051
				2,164
South Africa (2.6%)
Corporate Bond (0.4%)
MTN Mauritius Investments Ltd., 4.76%, 11/11/24 (d)		1,045		1,042
Sovereign (2.2%)
Eskom Holdings SOC Ltd., 5.75%, 1/26/21 (d)		3,556		3,502
7.13%, 2/11/25 (d)(e)		1,940		1,967
				5,469
				6,511
Sri Lanka (0.5%)
Sovereign (0.5%)
Sri Lanka Government International Bond, 5.88%, 7/25/22 (d)		490		484
6.25%, 10/4/20		100		103
6.25%, 10/4/20 (d)		650		668
				1,255
Tunisia (0.5%)
Sovereign (0.5%)
Banque Centrale de Tunisie SA, 5.75%, 1/30/25 (d)		1,210		1,186
Turkey (5.5%)
Sovereign (5.5%)
Export Credit Bank of Turkey, 5.88%, 4/24/19 (d)		2,850		3,018

	Face Amount (000)		Value (000)
Turkey Government International Bond, 3.25%, 3/23/23 (e)	$	3,600	$	3,361
4.88%, 4/16/43		1,800		1,645
5.63%, 3/30/21		4,350		4,710
6.88%, 3/17/36		1,000		1,164
				13,898
Venezuela (5.2%)
Sovereign (5.2%)
Petroleos de Venezuela SA, 6.00%, 11/15/26		23,320		8,337
8.50%, 11/2/17		1,530		1,056
9.00%, 11/17/21		3,000		1,237
Venezuela Government International Bond, 6.00%, 12/9/20		1,340		502
9.00%, 5/7/23		5,120		2,010
				13,142
TOTAL FIXED INCOME SECURITIES (Cost $231,718)				226,589
	No. of Warrants
WARRANTS (0.1%)
Nigeria (0.1%)
Central Bank of Nigeria, expires 11/15/20 (f)(h)		2,250		312
Venezuela (0.0%)
Venezuela Government International Bond, Oil-Linked Payment Obligation, expires 4/15/20 (f)(h)		5,450		56
TOTAL WARRANTS (Cost $—)				368
	Shares
SHORT-TERM INVESTMENTS (10.4%)
Securities held as Collateral on Loaned Securities (7.9%)
Investment Company (6.7%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note E)		16,838,938		16,839

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

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Portfolio of Investments (unaudited) (cont'd)

(Showing Percentage of Total Value of Investments)

	Face Amount (000)		Value (000)
Repurchase Agreements (1.2%)
Barclays Capital, Inc., (0.10%, dated 6/30/15, due 7/1/15; proceeds $1,538; fully collateralized by a U.S. Government obligation; 2.75% due 5/31/17; valued at $1,568)	$	1,538	$	1,538
Merrill Lynch & Co., Inc., (0.14%, dated 6/30/15, due 7/1/15; proceeds $1,537; fully collateralized by a U.S. Government obligation; Zero Coupon due 7/2/15; valued at $1,568)		1,537		1,537
				3,075
TOTAL SECURITIES HELD AS COLLATERAL ON LOANED SECURITIES (Cost $19,914)				19,914
	Shares
Investment Company (2.5%)
Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (See Note E) (Cost $6,306)		6,306,162		6,306
TOTAL SHORT-TERM INVESTMENTS (Cost $26,220)				26,220
TOTAL INVESTMENTS (100.0%) (Cost $257,938) Including $22,901 of Securities Loaned (i)				253,177
LIABILITIES IN EXCESS OF OTHER ASSETS				(19,347	)
NET ASSETS			$	233,830

(a) Issuer in bankruptcy.

(b) Non-income producing security; bond in default.

(c) Multi-step — Coupon rate changes in predetermined increments to maturity. Rate disclosed is as of June 30, 2015. Maturity date disclosed is the ultimate maturity date.

(d) 144A security — Certain conditions for public sale may exist. Unless otherwise noted, these securities are deemed to be liquid.

(e) All or a portion of this security was on loan at June 30, 2015.

(f) Variable/Floating Rate Security — Interest rate changes on these instruments are based on changes in a designated base rate. The rates shown are those in effect on June 30, 2015.

(g) Perpetual — One or more securities do not have a predetermined maturity date. Rates for these securities are fixed for a period of time, after which they revert to a floating rate. Interest rates in effect are as of June 30, 2015.

(h) Security has been deemed illiquid at June 30, 2015.

(i) Securities are available for collateral in connection with an open futures contract.

Futures Contract:

The Fund had the following futures contract open at June 30, 2015:

	Number of Contracts		Value (000)			Expiration Date	Unrealized Appreciation (000)
Short:
U.S. Treasury 10 yr. Note		112	$	(14,131	)	Sep-15	$	49

Portfolio Composition*

Classification	Percentage of Total Investments
Sovereign		85.7	%
Corporate Bonds		11.4
Other**		2.9
Total Investments		100.0	%***

* Percentages indicated are based upon total investments (excluding Securities held as Collateral on Loaned Securities) as of June 30, 2015.

** Industries and/or investment types representing less than 5% of total investments.

*** Does not include an open short futures contract with an underlying face amount of approximately $14,131,000 with unrealized appreciation of approximately $49,000.

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

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Financial Statements

Statement of Assets and Liabilities	June 30, 2015 (unaudited) (000)
Assets:
Investments in Securities of Unaffiliated Issuers, at Value(1) (Cost $234,793)	$	230,032
Investment in Security of Affiliated Issuer, at Value (Cost $23,145)		23,145
Total Investments in Securities, at Value (Cost $257,938)		253,177
Cash		853
Interest Receivable		3,505
Receivable for Lehman Brothers Closed Reverse Repurchase Transactions		174
Receivable for Variation Margin on Futures Contracts		170
Receivable from Affiliate		1
Other Assets		36
Total Assets		257,916
Liabilities:
Collateral on Securities Loaned, at Value		20,767
Dividends Declared		3,061
Payable for Advisory Fees		196
Deferred Capital Gain Country Tax		16
Payable for Administration Fees		7
Payable for Professional Fees		7
Payable for Custodian Fees		6
Payable for Stockholder Servicing Agent Fees		2
Other Liabilities		24
Total Liabilities		24,086
Net Assets
Applicable to 21,867,068 Issued and Outstanding $0.01 Par Value Shares (100,000,000 Shares Authorized)	$	233,830
Net Asset Value Per Share	$	10.69
Net Assets Consist of:
Common Stock	$	219
Paid-in-Capital		247,714
Accumulated Undistributed Net Investment Income		762
Accumulated Net Realized Loss		(10,128	)
Unrealized Appreciation (Depreciation) on:
Investments (Net of $16 of Deferred Capital Gain Country Tax)		(4,773	)
Futures Contracts		49
Foreign Currency Translations		(13	)
Net Assets	$	233,830
(1) Including:
Securities on Loan, at Value:	$	22,901

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

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Financial Statements (cont'd)

Statement of Operations	Six Months Ended June 30, 2015 (unaudited) (000)
Investment Income:
Interest from Securities of Unaffiliated Issuers	$	7,536
Dividends from Securities of Unaffiliated Issuers		50
Income from Securities Loaned — Net		45
Dividends from Security of Affiliated Issuer (Note E)		3
Total Investment Income		7,634
Expenses:
Advisory Fees (Note B)		1,203
Administration Fees (Note C)		96
Professional Fees		68
Stockholder Reporting Expenses		27
Custodian Fees (Note D)		14
Stockholder Servicing Agent Fees		4
Directors' Fees and Expenses		4
Other Expenses		26
Total Expenses		1,442
Waiver of Administration Fees (Note C)		(55	)
Rebate from Morgan Stanley Affiliate (Note E)		(2	)
Net Expenses		1,385
Net Investment Income		6,249
Realized Gain (Loss):
Investments Sold		1,377
Foreign Currency Forward Exchange Contracts		(3	)
Foreign Currency Transactions		(5	)
Futures Contracts		(184	)
Net Realized Gain		1,185
Change in Unrealized Appreciation (Depreciation):
Investments (Net of Increase in Deferred Capital Gain Country Tax of $16)		(3,474	)
Foreign Currency Translations		2
Futures Contracts		45
Net Change in Unrealized Appreciation (Depreciation)		(3,427	)
Net Realized Gain and Change in Unrealized Appreciation (Depreciation)		(2,242	)
Net Increase in Net Assets Resulting from Operations	$	4,007

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

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Financial Statements (cont'd)

Statements of Changes in Net Assets	Six Months Ended June 30, 2015 (unaudited) (000)			Year Ended December 31, 2014 (000)
Increase (Decrease) in Net Assets:
Operations:
Net Investment Income	$	6,249		$	12,257
Net Realized Gain (Loss)		1,185			(3,036	)
Net Change in Unrealized Appreciation (Depreciation)		(3,427	)		(2,098	)
Net Increase in Net Assets Resulting from Operations		4,007			7,123
Distributions from and/or in Excess of:
Net Investment Income		(6,158	)		(13,030	)
Capital Share Transactions:
Repurchase of Shares (747,875 and 562,313 shares)		(6,991	)		(5,471	)
Net Decrease in Net Assets Resulting from Capital Share Transactions		(6,991	)		(5,471	)
Total Decrease		(9,142	)		(11,378	)
Net Assets:
Beginning of Period		242,972			254,350
End of Period (Including Accumulated Undistributed Net Investment Income of $762 and $671)	$	233,830		$	242,972

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

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Financial Highlights

Selected Per Share Data and Ratios

	Six Months Ended June 30, 2015			Year Ended December 31,
	(unaudited)			2014			2013			2012			2011			2010
Net Asset Value, Beginning of Period	$	10.74		$	10.97		$	13.08		$	11.54		$	11.38		$	11.19
Net Investment Income†		0.28			0.53			0.56			0.58			0.61			0.74
Net Realized and Unrealized Gain (Loss)		(0.10	)		(0.23	)		(1.73	)		1.59			0.21			0.42
Total from Investment Operations		0.18			0.30			(1.17	)		2.17			0.82			1.16
Distributions from and/or in excess of:
Net Investment Income		(0.28	)		(0.57	)		(0.60	)		(0.60	)		(0.62	)		(0.66	)
Net Realized Gain		—			—			(0.37	)		(0.03	)		(0.04	)		(0.31	)
Total Distributions		(0.28	)		(0.57	)		(0.97	)		(0.63	)		(0.66	)		(0.97	)
Anti-Dilutive Effect of Share Repurchase Program		0.05			0.04			0.03			—			—			—
Net Asset Value, End of Period	$	10.69		$	10.74		$	10.97		$	13.08		$	11.54		$	11.38
Per Share Market Value, End of Period	$	9.01		$	9.09		$	9.54		$	11.95		$	10.41		$	10.48
TOTAL INVESTMENT RETURN:
Market Value		2.14	%#		1.02	%		(12.27	)%		21.04	%		5.73	%		13.58	%
Net Asset Value(1)		2.57	%#		3.80	%		(7.84	)%		19.51	%		7.93	%		11.00	%
RATIOS, SUPPLEMENTAL DATA:
Net Assets, End of Period (Thousands)	$	233,830		$	242,972		$	254,350		$	309,645		$	273,259		$	269,397
Ratio of Expenses to Average Net Assets(2)		1.15	%+*		1.14	%+		1.16	%+		1.13	%+		1.14	%+		1.19	%+
Ratio of Expenses to Average Net Assets Excluding Non Operating Expenses		N/A			N/A			1.14	%+		N/A			1.14	%+		1.13	%+
Ratio of Net Investment Income to Average Net Assets(2)		5.18	%+*		4.73	%+		4.66	%+		4.65	%+		5.28	%+		6.35	%+
Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets		0.00	%§*		0.00	%§		0.00	%§		0.01	%		0.00	%§		0.00	%§
Portfolio Turnover Rate		23	%#		80	%		85	%		46	%		46	%		105	%
(2) Supplemental Information on the Ratios to Average Net Assets:
Ratios Before Expenses Waived by Administrator:
Ratio of Expenses to Average Net Assets		1.20	%*		1.19	%		1.21	%		1.18	%		1.19	%		1.23	%+
Ratio of Net Investment Income to Average Net Assets		5.13	%*		4.68	%		4.61	%		4.60	%		5.23	%		6.31	%+

(1) Total investment return based on net asset value per share reflects the effects of changes in net asset value on the performance of the Fund during each period, and assumes dividends and distributions, if any, were reinvested. This percentage is not an indication of the performance of a stockholder's investment in the Fund based on market value due to differences between the market price of the stock and the net asset value per share of the Fund.

† Per share amount is based on average shares outstanding.

+ The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as "Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets."

§ Amount is less than 0.005%.

# Not annualized.

* Annualized.

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

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Notes to Financial Statements (unaudited)

Morgan Stanley Emerging Markets Debt Fund, Inc. (the "Fund") was incorporated in Maryland on May 6, 1993, and is registered as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the "Act"). The Fund applies investment company accounting and reporting guidance. The Fund's primary investment objective is to produce high current income and as a secondary objective, to seek capital appreciation, through investments primarily in debt securities of government and government-related issuers located in emerging countries, of entities organized to restructure outstanding debt of such issuers and debt securities of corporate issuers in or organized under the laws of emerging countries. To the extent that the Fund invests in derivative instruments that Morgan Stanley Investment Management Inc. (the "Adviser") believes have economic characteristics similar to debt securities of government and government-related issuers located in emerging market countries and of entities organized to restructure outstanding debt of such issuers, such investments will be counted for purposes of meeting the Fund's investment objective. To the extent the Fund makes such investments, the Fund will be subject to the risks of such derivative instruments as described herein.

A. Significant Accounting Policies: The following significant accounting policies are in conformity with U.S. generally accepted accounting principles ("GAAP"). Such policies are consistently followed by the Fund in the preparation of its financial statements. GAAP may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates.

1. Security Valuation: (1) Bonds and other fixed income securities may be valued according to the broadest and most representative market. In addition, bonds and other fixed income securities may be valued on the basis of prices provided by a pricing service. The prices provided by a pricing service take into account broker-dealer market price

quotations for institutional size trading in similar groups of securities, security quality, maturity, coupon and other security characteristics as well as any developments related to the specific securities; (2) an equity portfolio security listed or traded on an exchange is valued at its latest reported sales price (or at the exchange official closing price if such exchange reports an official closing price), if there were no sales on a given day, the security is valued at the mean between the last reported bid and asked prices; (3) futures are valued at the latest price published by the commodities exchange on which they trade; (4) when market quotations are not readily available, including circumstances under which the Adviser determines that the closing price, last sale price or the mean between the last reported bid and asked prices are not reflective of a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Board of Directors (the "Directors"). Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business of the New York Stock Exchange ("NYSE"). If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Directors or by the Adviser using a pricing service and/or procedures approved by the Directors; (5) quotations of foreign portfolio securities, other assets and liabilities and forward contracts stated in foreign currency are translated into U.S. dollar equivalents at the prevailing market rates prior to the close of the NYSE; (6) investments in mutual funds, including the Morgan

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Notes to Financial Statements (unaudited) (cont'd)

Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day; and (7) short-term debt securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, unless the Adviser determines such valuation does not reflect the securities' market value, in which case these securities will be valued at their fair market value determined by the Adviser.

The Directors have responsibility for determining in good faith the fair value of the investments, and the Directors may appoint others, such as the Fund's Adviser or a valuation committee, to assist the Directors in determining fair value and to make the actual calculations pursuant to the fair valuation methodologies previously approved by the Directors. Under procedures approved by the Directors, the Fund's Adviser has formed a Valuation Committee whose members are approved by the Directors. The Valuation Committee provides administration and oversight of the Fund's valuation policies and procedures, which are reviewed at least annually by the Directors. These procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

The Fund has procedures to determine the fair value of securities and other financial instruments for which market prices are not readily available. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such securities and considers a number of factors, including valuation methodologies and significant unobservable valuation inputs, when arriving at fair value. The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An

income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The Valuation Committee employs various methods for calibrating these valuation approaches including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

2. Fair Value Measurement: Financial Accounting Standards Board ("FASB") Accounting Standards Codification^TM ("ASC") 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the value that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in valuing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in valuing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund's investments. The inputs are summarized in the three broad levels listed below.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Notes to Financial Statements (unaudited) (cont'd)

• Level 1 – unadjusted quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs including the Fund's own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer's financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used to value the Fund's investments as of June 30, 2015.

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets:
Fixed Income Securities
Corporate Bonds	$	—	$	26,681	$	—	$	26,681
Sovereign		—		199,908		—		199,908
Total Fixed Income Securities		—		226,589		—		226,589
Warrants		—		368		—		368

Investment Type	Level 1 Unadjusted quoted prices (000)		Level 2 Other significant observable inputs (000)		Level 3 Significant unobservable inputs (000)		Total (000)
Assets: (cont'd)
Short-Term Investments
Investment Company	$	23,145	$	—	$	—	$	23,145
Repurchase Agreements		—		3,075		—		3,075
Total Short-Term Investments		23,145		3,075		—		26,220
Futures Contract		49		—		—		49
Total Assets	$	23,194	$	230,032	$	—	$	253,226

Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes. The Fund recognizes transfers between the levels as of the end of the period. As of June 30, 2015, the Fund did not have any investments transfer between investment levels.

3. Repurchase Agreements: The Fund may enter into repurchase agreements under which the Fund lends cash and takes possession of securities with an agreement that the counterparty will repurchase such securities. In connection with transactions in repurchase agreements, a bank as custodian for the Fund takes possession of the underlying securities which are held as collateral, with a market value at least equal to the amount of the repurchase transaction, including principal and accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest as earned. If such a decrease occurs, additional collateral will be requested and, when received, will be added to the account to maintain full collateralization. In

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Notes to Financial Statements (unaudited) (cont'd)

the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation. In the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral proceeds may be subject to cost and delays. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into repurchase agreements.

4. Reverse Repurchase Agreements: The Fund may enter into reverse repurchase agreements with institutions that the Adviser has determined are creditworthy. Under a reverse repurchase agreement, the Fund sells securities and agrees to repurchase them at a mutually agreed upon date and price. Reverse repurchase agreements involve the risk that the market value of the securities purchased with the proceeds from the sale of securities received by the Fund may decline below the price of the securities the Fund is obligated to repurchase. Reverse repurchase agreements also involve credit risk with the counterparty to the extent that the value of securities subject to repurchase exceed the Fund's liability under the reverse repurchase agreement. Securities subject to repurchase under reverse repurchase agreements, if any, are designated as such in the Portfolio of Investments.

At June 30, 2015, the Fund did not have any outstanding reverse repurchase agreements.

5. Foreign Currency Translation and Foreign Investments: The books and records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars as follows:

— investments, other assets and liabilities at the prevailing rate of exchange on the valuation date;

— investment transactions and investment income at the prevailing rates of exchange on the dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of securities sold during the period. Accordingly, realized and unrealized foreign currency gains (losses) on investments in securities are included in the reported net realized and unrealized gains (losses) on investment transactions and balances. However, pursuant to U.S. Federal income tax regulations, gains and losses from certain foreign currency transactions and the foreign currency portion of gains and losses realized on sales and maturities of foreign denominated debt securities are treated as ordinary income for U.S. Federal income tax purposes.

Net realized gains (losses) on foreign currency transactions represent net foreign exchange gains (losses) from foreign currency forward exchange contracts, disposition of foreign currencies, currency gains (losses) realized between the trade and settlement dates on securities transactions, and the difference between the amount of investment income 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 (losses) from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Notes to Financial Statements (unaudited) (cont'd)

A significant portion of the Fund's net assets consist of securities of issuers located in emerging markets, which are denominated in foreign currencies. Such securities may be concentrated in a limited number of countries and regions and may vary throughout the year. Changes in currency exchange rates will affect the value of and investment income from foreign currency denominated securities. Emerging market securities are often subject to greater price volatility, limited capitalization and liquidity, and higher rates of inflation than securities of companies based in the U.S. In addition, emerging market issuers may be subject to substantial governmental involvement in the economy and greater social, economic and political uncertainty.

6. Derivatives: The Fund may, but is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated

with other portfolio investments. All of the Fund's holdings, including derivative instruments, are marked-to-market each day with the change in value reflected in unrealized appreciation (depreciation). Upon disposition, a realized gain or loss is recognized.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable Securities and Exchange Commission rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund used during the period and their associated risks:

Futures: A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Notes to Financial Statements (unaudited) (cont'd)

unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return, and the potential loss from futures contracts can exceed the Fund's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

Foreign Currency Forward Exchange Contracts: In connection with its investments in foreign securities, the Fund also entered into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk to the extent that currency contracts create exposure to currencies in which

the Fund's securities are not denominated. Unanticipated changes in currency prices may result in poorer overall performance for the Fund than if it had not entered into such contracts. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract. A currency contract is marked-to-market daily and the change in market value is recorded by the Fund as unrealized gain or loss. The Fund records realized gains (losses) when the currency contract is closed equal to the difference between the value of the currency contract at the time it was opened and the value at the time it was closed.

As of June 30, 2015, the Fund did not have any open foreign currency forward exchange contracts.

FASB ASC 815, "Derivatives and Hedging" ("ASC 815"), is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Fund uses derivative instruments, how these derivative instruments are accounted for and their effects on the Fund's financial position and results of operations.

The following table sets forth the fair value of the Fund's derivative contracts by primary risk exposure as of June 30, 2015.

Asset Derivatives
Statement of Assets and
Liabilities Location

Primary Risk
Exposure

Value
(000)

Futures Contract

Variation Margin on
Futures Contract

Interest Rate Risk

(a)

(a)This amount represents the cumulative appreciation (depreciation) as reported in the Portfolio of Investments. The Statement of Assets and Liabilities only reflects the current day's net variation margin.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Notes to Financial Statements (unaudited) (cont'd)

The following tables set forth by primary risk exposure the Fund's realized gains (losses) and change in unrealized appreciation (depreciation) by type of derivative contract for the six months ended June 30, 2015 in accordance with ASC 815.

Realized Gain (Loss)
Primary Risk Exposure	Derivative Type	Value (000)
Currency Risk	Foreign Currency Forward Exchange Contracts	$	(3	)
Interest Rate Risk	Futures Contracts		(184	)
Total		$	(187	)
Change in Unrealized Appreciation (Depreciation)
Primary Risk Exposure	Derivative Type	Value (000)
Interest Rate Risk	Futures Contracts	$	45

For the six months ended June 30, 2015, the approximate average monthly amount outstanding for each derivative type is as follows:

Futures Contracts:

Average monthly original value

32,032,000

7. Securities Lending: The Fund lends securities to qualified financial institutions, such as broker-dealers, to earn additional income. Any increase or decrease in the fair value of the securities loaned that might occur and any interest earned or dividends declared on those securities during the term of the loan would remain in the Fund. The Fund would receive cash or securities as collateral in an amount equal to or exceeding 100% of the current fair value of the loaned securities. The collateral is marked-to-market daily by State Street Bank and Trust Company ("State Street"), the securities lending agent, to ensure that a minimum of 100% collateral coverage is maintained.

Based on pre-established guidelines, the securities lending agent invests any cash collateral that is received in an affiliated money market portfolio and repurchase agreements. Securities lending income is generated from the earnings on the invested collateral and borrowing fees, less any rebates owed to the borrowers and compensation to the lending agent, and is recorded as "Income from Securities Loaned — Net" in the Fund's Statement of Operations. Risks in securities lending transactions are that a borrower may not provide additional collateral when required or return the securities when due, and that the value of the short-term investments will be less than the amount of cash collateral plus any rebate that is required to be returned to the borrower. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.

The following table presents financial instruments that are subject to enforceable netting arrangements as of June 30, 2015.

Gross Amounts Not Offset in the Statement of Assets and Liabilities
Gross Asset Amounts Presented in Statement of Assets and Liabilities (000)			Financial Instrument (000)		Collateral Received (000)			Net Amount (not less than $0) (000)
$	22,901	(b)	$	—	$	(22,901	)(c)(d)	$	0

(b)Represents market value of loaned securities at period end.

(c)The Fund received cash collateral of approximately $20,767,000, of which approximately $19,914,000 was subsequently invested in Repurchase Agreements and Morgan Stanley Institutional Liquidity Funds as reported in the Portfolio of Investments. As of June 30, 2015, there was uninvested cash of approximately $853,000, which is not reflected in the Portfolio of Investments. In addition, the Fund received non-cash collateral of approximately $2,556,000 in the form of U.S. Government obligations, which the Fund cannot sell or

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Notes to Financial Statements (unaudited) (cont'd)

repledge, and accordingly are not reflected in the Portfolio of Investments.

(d)The actual collateral received is greater than the amount shown here due to overcollateralization.

8. Structured Investments: The Fund invested a portion of its assets in structured investments. A structured investment is a derivative security designed to offer a return linked to a particular underlying security, currency, commodity or market. Structured investments may come in various forms including notes (such as exchange-traded notes), warrants and options to purchase securities. The Fund will typically use structured investments to gain exposure to a permitted underlying security, currency, commodity or market when direct access to a market is limited or inefficient from a tax or cost standpoint. There can be no assurance that structured investments will trade at the same price or have the same value as the underlying security, currency, commodity or market. Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Fund is relying on the creditworthiness of such issuer or counterparty and has no rights with respect to the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Fund's illiquidity to the extent that the Fund, at a particular time, may be unable to find qualified buyers for these securities.

9. Indemnifications: 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 contracts and expects the risk of loss to be remote.

10. Dividends and Distributions to Stockholders: Dividend income and distributions to stockholders are recorded on the ex-dividend date. Dividends from net investment income, if any, are declared and paid quarterly. Net realized capital gains, if any, are distributed at least annually.

11. Other: Security transactions are accounted for on the date the securities are purchased or sold. Realized gains (losses) on the sale of investment securities are determined on the specific identified cost basis. Interest income is recognized on the accrual basis except where collection is in doubt and is recorded net of foreign withholding tax. Dividend income and distributions are recorded on the ex-dividend date (except certain dividends which may be recorded as soon as the Fund is informed of such dividends) net of applicable withholding taxes.

B. Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund with advisory services under the terms of an Investment Advisory Agreement, calculated weekly and payable monthly, at an annual rate of 1.00% of the Fund's average weekly net assets.

C. Administration Fees: The Adviser also serves as Administrator to the Fund and provides administrative services pursuant to an Administration Agreement for an annual fee, accrued daily and paid monthly, of 0.08% of the Fund's average weekly net assets. The Adviser has agreed to limit the administration fee through a waiver so that it will be no greater than the previous administration fee of 0.02435% of the Fund's average weekly net assets plus $24,000 per annum. This waiver may be terminated at any time. For the six months ended June 30, 2015, approximately $55,000 of administration fees were waived pursuant to this arrangement.

Under a Sub-Administration Agreement between the Administrator and State Street, State Street provides certain administrative services to the Fund. For such services, the

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Notes to Financial Statements (unaudited) (cont'd)

Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

D. Custodian Fees: State Street (the "Custodian") and its affiliates serve as Custodian for the Fund. The Custodian holds cash, securities, and other assets of the Fund as required by the Act. Custody fees are payable monthly based on assets held in custody, investment purchases and sales activity and account maintenance fees, plus reimbursement for certain out-of-pocket expenses.

E. Security Transactions and Transactions with Affiliates: For the six months ended June 30, 2015, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments, were approximately $54,457,000 and $64,536,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the six months ended June 30, 2015.

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio (the "Liquidity Funds"), an open-end management investment company managed by the Adviser, both directly and as a portion of the securities held as collateral on loaned securities. Advisory fees paid by the Fund are reduced by an amount equal to its pro-rata share of the advisory and administration fees paid by the Fund due to its investment in the Liquidity Funds. For the six months ended June 30, 2015, advisory fees paid were reduced by approximately $2,000 relating to the Fund's investment in the Liquidity Funds.

A summary of the Fund's transactions in shares of the Liquidity Funds during the six months ended June 30, 2015 is as follows:

Value December 31, 2014 (000)				Purchases at Cost (000)				Sales (000)				Dividend Income (000)				Value June 30, 2015 (000)
$	20,858			$	56,989			$	54,702			$	3			$	23,145

The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan"), which allows each independent Director to defer payment of all, or a portion, of the fees he or she receives for serving on the Board of Directors. Each eligible Director generally may elect to have the deferred amounts credited with a return equal to the total return on one or more of the Morgan Stanley funds that are offered as investment options under the Compensation Plan. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the NAV of the Fund.

F. Federal Income Taxes: It is the Fund's intention to continue to qualify as a regulated investment company and distribute all of its taxable income. Accordingly, no provision for Federal income taxes is required in the financial statements.

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 based on net investment income, net realized gains and net unrealized appreciation as such income and/or gains are earned. Taxes may also be based on transactions in foreign currency and are accrued based on the value of investments denominated in such currency.

FASB ASC 740-10, Income Taxes — Overall, sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. Management has concluded there are no significant uncertain tax positions that would require recognition in the financial statements. If applicable, the Fund recognizes interest accrued related to unrecognized tax benefits in "Interest Expense" and penalties in "Other Expenses" in the Statement of Operations. The Fund files tax returns with the U.S. Internal Revenue Service, New York and various states. Each of the tax

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Notes to Financial Statements (unaudited) (cont'd)

years in the four-year period ended December 31, 2014 remains subject to examination by taxing authorities.

The tax character of distributions paid may differ from the character of distributions shown in the Statements of Changes in Net Assets due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2014 and 2013 was as follows:

2014 Distributions Paid From:				2013 Distributions Paid From:
Ordinary Income (000)		Long-term Capital Gain (000)		Ordinary Income (000)		Long-term Capital Gain (000)
$	13,030	$	—	$	14,059	$	8,630

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from GAAP. These book/tax differences are either considered temporary or permanent in nature.

Temporary differences are attributable to differing book and tax treatments for the timing of the recognition of gains (losses) on certain investment transactions and the timing of the deductibility of certain expenses.

Permanent differences, primarily due to differing treatments of gains (losses) related to foreign currency transactions, paydown adjustments, defaulted bonds and basis adjustments for securities sold, resulted in the following reclassifications among the components of net assets at December 31, 2014:

Accumulated Undistributed Net Investment Income (000)				Accumulated Net Realized Loss (000)				Paid-in- Capital (000)
$	687			$	(687	)		$	—

At December 31, 2014, the components of distributable earnings for the Fund on a tax basis were as follows:

Undistributed Ordinary Income (000)				Undistributed Long-Term Capital Gain (000)
$	703			$	—

At June 30, 2015, the aggregate cost for Federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is approximately $7,922,000 and the aggregate gross unrealized depreciation is approximately $12,683,000 resulting in net unrealized depreciation of approximately $4,761,000.

At December 31, 2014, the Fund had available for Federal income tax purposes unused short term and long term capital losses of approximately $4,624,000 and $4,548,000, respectively, that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized during the carryover period as provided by U.S. Federal income tax regulations, no capital gains tax liability will be incurred by the Portfolio for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the stockholders.

G. Other: On October 8, 2007, the Fund commenced a share repurchase program for purposes of enhancing stockholder value and reducing the discount at which the Fund's shares trade from their NAV. During the six months ended June 30, 2015, the Fund repurchased 747,875 of its shares at an average discount of 14.33% from NAV. Since the inception of the program, the Fund has repurchased 2,905,834 of its shares at an average discount of 14.54% from NAV. The Directors regularly monitor the Fund's share repurchase program as part of their review and consideration of the Fund's premium/discount history. The Fund expects to continue to repurchase its outstanding shares at such time and in such amounts as it believes will further the accomplishment of the foregoing objectives, subject to review by the Directors.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Notes to Financial Statements (unaudited) (cont'd)

H. Results of Annual Meeting of Stockholders: On June 16, 2015, an annual meeting of the Fund's stockholders was held for the purpose of voting on the following matter, the results of which were as follows:

Election of Directors by all stockholders:

	For		Against
Michael Bozic		18,073,336		1,035,093
Nancy C. Everett		18,098,829		1,009,600
Michael F. Klein		18,108,893		999,536
W. Allen Reed		18,152,990		955,439

For More Information About Portfolio Holdings

The Fund provides a complete schedule of portfolio holdings in its semi-annual and annual reports within 60 days of the end of the Fund's second and fourth fiscal quarters. The semi-annual reports and the annual reports are filed electronically with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley also delivers the semi-annual and annual reports to Fund stockholders and makes these reports available on its public website, www.morganstanley.com/im. Each Morgan Stanley fund also files a complete schedule of portfolio holdings with the SEC for the Fund's first and third fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to stockholders, nor are the reports posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS filings) by accessing the SEC's website, www.sec.gov. You may also review and copy them at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling the SEC toll free at 1(800) SEC-0330. You can also request copies of these materials, upon payment of a duplicating fee, by electronic request at the SEC's e-mail address (publicinfo@sec.gov) or by writing the public reference section of the SEC, Washington, DC 20549-0102.

In addition to filing a complete schedule of portfolio holdings with the SEC each fiscal quarter, the Fund makes portfolio holdings information available by providing the information on its public website, www.morganstanley.com/im. The Fund provides a complete schedule of portfolio holdings on the public website on a monthly basis at least 15 calendar days after month-end. You may obtain copies of the Fund's monthly website postings, by calling toll free 1(800) 231-2608.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Notes to Financial Statements (unaudited) (cont'd)

Proxy Voting Policy and Procedures and Proxy Voting Record

A copy of (1) the Fund's policies and procedures with respect to the voting of proxies relating to the Fund's portfolio securities; and (2) how the Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30, is available without charge, upon request, by calling toll free 1(800) 231-2608 or by visiting our website at www.morganstanley.com/im. This information is also available on the SEC's web site at www.sec.gov.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Portfolio Management (unaudited)

The Fund is managed by members of the Emerging Markets Debt team. The team consists of portfolio managers, analysts and traders. The members of the team jointly and primarily responsible for the day-to-day management of the Fund are Eric J. Baurmeister, a Managing Director of the Adviser, Jens Nystedt, a Managing Director of the Adviser and Warren Mar, an Executive Director of the Adviser. Mr. Baurmeister has been associated with the Adviser in an investment management capacity since 1997. Mr. Baurmeister began managing the Fund in July 2002. Mr. Nystedt has been associated with the Adviser in an investment management capacity since November 2014. Prior to November 2014, Mr. Nystedt was a Senior Global Strategist at Moore Capital Management from November 2008 to November 2014. Mr. Mar has been associated with the Adviser in an investment management capacity since August 2012. Prior to August 2012, Mr. Mar was the global head of Emerging Markets Corporate Research & Strategy at J.P. Morgan Chase from April 2004 to August 2012.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Investment Policy (unaudited)

Derivatives

The Fund may, but it is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of an underlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, also affect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may have additional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by the counterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising from margin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated with other portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques and risk analyses different from those associated with other portfolio investments.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss. Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable SEC rules and regulations, or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives to further the Fund's investment objective, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund may use and their associated risks:

Foreign Currency Forward Exchange Contracts. In connection with its investments in foreign securities, the Fund also may enter into contracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forward exchange contract ("currency contract") is a negotiated agreement between the contracting parties to exchange a specified amount of currency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that are the subject of the contract. Currency contracts may be used to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. The Fund may also invest in non-deliverable foreign currency forward exchange contracts ("NDFs"). NDFs are similar to other foreign currency forward exchange contracts, but do not require or permit physical delivery of currency upon settlement. Instead, settlement is made in cash based on the difference between the contracted exchange rate and the spot foreign exchange rate at settlement. In addition, the Fund may use cross currency hedging or proxy hedging with respect to currencies in which the Fund has or expects to have portfolio or currency exposure. Cross currency hedges involve the sale of one currency against the positive exposure to a different currency and may be used for hedging purposes or to establish an active exposure to the exchange rate between any two currencies. To the extent hedged by the use of currency contracts, the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There is additional risk that such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in the

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Investment Policy (unaudited) (cont'd)

direction opposite to the position taken and that currency contracts create exposure to currencies in which the Fund's securities are not denominated. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to the contract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract.

Futures. A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset, reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease in tandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settled through either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment and even a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to the derivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return, and the potential loss from futures contracts can exceed the Fund's initial investment in such contracts. No assurance can be given that a liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Fund of margin deposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

Loan Participation Notes. The Fund may invest in loan participation notes ("LPNs"), which are interests in loans or other direct debt instruments relating to amounts owed by a corporate, governmental or other borrower to another party. LPNs are notes issued through a special purpose vehicle for the purpose of funding or acquiring a loan to final obligor. LPNs are subject to the same risks as other debt obligations, which may include credit risk, interest rate risk, liquidity risk and market risk. LPNs have limited recourse to the issuer, to the extent of the amount received by the issuer from the ultimate borrower in paying the principal and interest amounts as defined under the loan agreement. The Fund may be exposed to the credit risk of both the lender and the borrower, and may not benefit from any collateral supporting the underlying loan.

Options. If the Fund buys an option, it buys a legal contract giving it the right to buy or sell a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed-upon price typically in exchange for a premium paid by the Fund. If the Fund sells an option, it sells to another person the right to buy from or sell to the Fund a specific amount of the underlying instrument or futures contract on the underlying instrument at an agreed-upon price typically in exchange for a premium received by the Fund. When options are purchased over-the-counter ("OTC"), the Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its obligations under the option contract. Options may also be illiquid and the Fund may have difficulty closing out its position. A decision as to whether, when and how to use options involves the exercise of skill and judgment and even a well-conceived option transaction may be unsuccessful because of market behavior or unexpected events. The prices of options can be highly volatile and the use of options can lower total returns.

Structured Investments. The Fund also may invest a portion of its assets in structured investments. A structured investment is a derivative security designed to offer a return linked to a particular underlying security, currency, commodity or market. Structured investments may come in various forms including notes (such as exchange-traded notes), warrants and options to purchase securities. The Fund will typically use structured investments to gain exposure to a permitted underlying security, currency, commodity or market when direct access to a market is limited or inefficient from a tax or cost standpoint. There can be no assurance that structured

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Investment Policy (unaudited) (cont'd)

investments will trade at the same price or have the same value as the underlying security, currency, commodity or market. Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structured investments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Fund is relying on the creditworthiness of such issuer or counterparty and has no rights with respect to the underlying investment. Certain structured investments may be thinly traded or have a limited trading market and may have the effect of increasing the Fund's illiquidity to the extent that the Fund, at a particular point in time, may be unable to find qualified buyers for these securities.

Swaps. The Fund may enter into OTC swap contracts or cleared swap transactions. An OTC swap contract is an agreement between two parties pursuant to which the parties exchange payments at specified dates on the basis of a specified notional amount, with the payments calculated by reference to specified securities, indices, reference rates, currencies or other instruments. Typically swap agreements provide that when the period payment dates for both parties are the same, the payments are made on a net basis (i.e., the two payment streams are netted out, with only the net amount paid by one party to the other). The Fund's obligations or rights under a swap contract entered into on a net basis will generally be equal only to the net amount to be paid or received under the agreement, based on the relative values of the positions held by each party. Cleared swap transactions may help reduce counterparty credit risk. In a cleared swap, the Fund's ultimate counterparty is a clearinghouse rather than a swap dealer, bank or other financial institution. OTC swap agreements are not entered into or traded on exchanges and often there is no central clearing or guaranty function for swaps. These OTC swaps are often subject to credit risk or the risk of default or non- performance by the counterparty. Both OTC and cleared swaps could result in losses if interest rates, foreign currency exchange rates or other factors are not correctly anticipated by the Fund or if the reference index, security or investments do not perform as expected. The Fund's use of swaps may include those based on the credit of an underlying security, commonly referred to as "credit default swaps." Where the Fund is the buyer of a credit default swap contract, it would typically be entitled to receive the par (or other agreed-upon) value of a referenced debt obligation from the counterparty to the contract only in the event of a default or similar event of the issuer of the referenced debt obligation. If no default occurs, the Fund would have paid to the counterparty a periodic stream of payments over the term of the contract and received no benefit from the contract. When the Fund is the seller of a credit default swap contract, it typically receives the stream of payments but is obligated to pay an amount equal to the par (or other agreed-upon) value of a referenced debt obligation upon the default or similar event by the issuer of the debt obligation. The Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulatory developments require the clearing and exchange-trading of certain standardized swap transactions. Mandatory exchange-trading and clearing is occurring on a phased-in basis.

Special Risks Related to Cyber Security

The Fund and its service providers are susceptible to cyber security risks that include, among other things, theft, unauthorized monitoring, release, misuse, loss, destruction or corruption of confidential and highly restricted data; denial of service attacks; unauthorized access to relevant systems; compromises to networks or devices that the Fund and its service providers use to service the Fund's operations; or operational disruption or failures in the physical infrastructure or operating systems that support the Fund and its service providers. Cyber attacks against or security breakdowns of the Fund or its service providers may adversely impact the Fund and its stockholders, potentially resulting in, among other things, financial losses; the inability of Fund stockholders to transact business and the Fund to process transactions; inability to calculate the Fund's NAV; violations of applicable privacy and other laws;

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Investment Policy (unaudited) (cont'd)

regulatory fines, penalties, reputational damage, reimbursement or other compensation costs; and/or additional compliance costs. The Fund may incur additional costs for cyber security risk management and remediation purposes. In addition, cyber security risks may also impact issuers of securities in which the Fund invests, which may cause the Fund's investment in such issuers to lose value. There can be no assurance that the Fund or its service providers will not suffer losses relating to cyber attacks or other information security breaches in the future.

Foreign and Emerging Market Securities

Investing in the securities of foreign issuers, particularly those located in emerging market or developing countries, entails the risk that news and events unique to a country or region will affect those markets and their issuers. The value of the Fund's shares may vary widely in response to political and economic factors affecting companies in foreign countries. These same events will not necessarily have an effect on the U.S. economy or similar issuers located in the United States. In addition, investments in certain foreign markets, which have historically been considered stable, may become more volatile and subject to increased risk due to ongoing developments and changing conditions in such markets. Moreover, the growing interconnectivity of global economies and financial markets has increased the probability that adverse developments and conditions in one country or region will affect the stability of economies and financial markets in other countries or regions.

Investments in foreign markets entail special risks such as currency, political, economic and market risks. There also may be greater market volatility, less reliable financial information, higher transaction and custody costs, decreased market liquidity and less government and exchange regulation associated with investments in foreign markets. In addition, investments in certain foreign markets, which have historically been considered stable, may become more volatile and subject to increased risk due to ongoing developments and changing conditions in such markets. Moreover, the growing interconnectivity of global economies and financial markets has increased the probability that adverse developments and conditions in one country or region will affect the stability of economies and financial markets in other countries or regions. Certain foreign markets may rely heavily on particular industries or foreign capital and are more vulnerable to diplomatic developments, the imposition of economic sanctions against a particular country or countries, organizations, entities and/or individuals, changes in international trading patterns, trade barriers, and other protectionist or retaliatory measures. Economic sanctions could, among other things, effectively restrict or eliminate the Fund's ability to purchase or sell securities or groups of securities for a substantial period of time, and may make the Fund's investments in such securities harder to value. Investments in foreign markets may also be adversely affected by governmental actions such as the imposition of capital controls, nationalization of companies or industries, expropriation of assets or the imposition of punitive taxes. The governments of certain countries may prohibit or impose substantial restrictions on foreign investing in their capital markets or in certain sectors or industries. In addition, a foreign government may limit or cause delay in the convertibility or repatriation of its currency which would adversely affect the U.S. dollar value and/or liquidity of investments denominated in that currency. Certain foreign investments may become less liquid in response to market developments or adverse investor perceptions, or become illiquid after purchase by the Fund, particularly during periods of market turmoil. When the Fund holds illiquid investments, its portfolio may be harder to value. The risks of investing in emerging market countries are greater than risks associated with investments in foreign developed countries. In addition, the Fund's investments in foreign issuers may be denominated in foreign currencies and therefore, to the extent unhedged, the value of the investment will fluctuate with the U.S. dollar exchange rates.

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

Dividend Reinvestment and Cash Purchase Plan (unaudited)

Pursuant to the Dividend Reinvestment Plan (the Plan), each stockholder will be deemed to have elected, unless Computershare Trust Company, N.A. (the Plan Agent) is otherwise instructed by the stockholder in writing, to have all distributions automatically reinvested in Fund shares. Participants in the Plan have the option of making additional voluntary cash payments to the Plan Agent, quarterly, in any amount from $100 to $3000, for investment in Fund shares.

Dividend and capital gain distributions (Distribution) will be reinvested on the reinvestment date in full and fractional shares. If the market price per share equals or exceeds net asset value per share on the reinvestment date, the Fund will issue shares to participants at net asset value or, if net asset value is less than 95% of the market price on the reinvestment date, shares will be issued at 95% of the market price. If net asset value exceeds the market price on the reinvestment date, participants will receive shares valued at market price. The Fund may purchase shares of its Common Stock in the open market in connection with dividend reinvestment requirements at the discretion of the Board of Directors. Should the Fund declare a Distribution payable only in cash, the Plan Agent will purchase Fund shares for participants in the open market as agent for the participants.

The Plan Agent's fees for the reinvestment of a Distribution will be paid by the Fund. However, each participant's account will be charged a pro rata share of brokerage commissions incurred on any open market purchases effected on such participant's behalf. Although stockholders in the Plan may receive no cash distributions, participation in the Plan will not relieve participants of any income tax which may be payable on such dividends or distributions.

In the case of stockholders, such as banks, brokers or nominees, that hold shares for others who are the beneficial owners, the Plan Agent will administer the Plan on the basis of the number of shares certified from time to time by the stockholder as representing the total amount registered in the stockholder's name and held for the account of beneficial owners who are participating in the Plan.

Stockholders who do not wish to have Distributions automatically reinvested should notify the Plan Agent in writing. There is no penalty for non-participation or withdrawal from the Plan, and stockholders who have previously withdrawn from the Plan may rejoin at any time. Requests for additional information or any correspondence concerning the Plan should be directed to the Plan Agent at:

Morgan Stanley Emerging Markets Debt Fund, Inc.
Computershare Trust Company, N.A.
P.O. Box 30170
College Station, Texas 77842
1(800) 231-2608

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

U.S. Privacy Policy (unaudited)

An Important Notice Concerning Our U.S. Privacy Policy

This privacy notice describes the U.S. privacy policy of Morgan Stanley Distribution, Inc., and the Morgan Stanley family of mutual funds ("us", "our", "we").

We are required by federal law to provide you with notice of our U.S. privacy policy ("Policy"). This Policy applies to both our current and former clients unless we state otherwise and is intended for individual clients who purchase products or receive services from us for personal, family or household purposes. This Policy is not applicable to partnerships, corporations, trusts or other non-individual clients or account holders, nor is this Policy applicable to individuals who are either beneficiaries of a trust for which we serve as trustee or participants in an employee benefit plan administered or advised by us. This Policy is, however, applicable to individuals who select us to be a custodian of securities or assets in individual retirement accounts, 401(k) accounts, or accounts subject to the Uniform Gifts to Minors Act.

This notice sets out our business practices to protect your privacy; how we collect and share personal information about you; and how you can limit our sharing or certain uses by others of this information. We may amend this Policy at any time, and will inform you of any changes to our Policy as required by law.

We Respect Your Privacy

We appreciate that you have provided us with your personal financial information and understand your concerns about your information. We strive to safeguard the information our clients entrust to us. Protecting the confidentiality and security of client information is an important part of how we conduct our business.

This notice describes what personal information we collect about you, how we collect it, when we may share it with others, and how certain others may use it. It discusses the steps you may take to limit our sharing of certain information about you with our affiliated companies, including, but not limited to our affiliated banking businesses, brokerage firms and credit service affiliates. It also discloses how you may limit our affiliates' use of shared information for marketing purposes.

Throughout this Policy, we refer to the nonpublic information that personally identifies you as "personal information." We also use the term "affiliated company" in this notice. An affiliated company is a company in our family of companies and includes companies with the Morgan Stanley name. These affiliated companies are financial institutions such as broker-dealers, banks, investment advisers and credit card issuers. We refer to any company that is not an affiliated company as a nonaffiliated third party. For purposes of Section 5 of this notice, and your ability to limit certain uses of personal information by our affiliates, this notice applies to the use of personal information by our affiliated companies.

1. What Personal Information Do We Collect From You?

We may collect the following types of information about you: (i) information provided by you, including information from applications and other forms we receive from you, (ii) information about your transactions with us or our affiliates, (iii) information

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

U.S. Privacy Policy (unaudited) (cont'd)

about your transactions with nonaffiliated third parties, (iv) information from consumer reporting agencies, (v) information obtained from our websites, and (vi) information obtained from other sources. For example:

• We collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment objectives through applications and other forms you submit to us.

• We may obtain information about account balances, your use of account(s) and the types of products and services you prefer to receive from us through your dealings and transactions with us and other sources.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and to comply with various regulatory requirements.

2. When Do We Disclose Personal Information We Collect About You?

We may disclose personal information we collect about you in each of the categories listed above to affiliated and nonaffiliated third parties.

a. Information We Disclose to Affiliated Companies. We may disclose personal information that we collect about you to our affiliated companies to manage your account(s) effectively, to service and process your transactions, and to let you know about products and services offered by us and affiliated companies, to manage our business, and as otherwise required or permitted by law. Offers for products and services from affiliated companies are developed under conditions designed to safeguard your personal information.

b. Information We Disclose to Third Parties. We may disclose personal information that we collect about you to nonaffiliated third parties to provide marketing services on our behalf or to other financial institutions with whom we have joint marketing agreements. We may also disclose all of the information we collect to other nonaffiliated third parties for our everyday business purposes, such as to process transactions, maintain account(s), respond to court orders and legal investigations, report to credit bureaus, offer our own products and services, protect against fraud, for institutional risk control, to perform services on our behalf, and as otherwise required or permitted by law.

When we share personal information about you with a nonaffiliated third party, they are required to limit their use of personal information about you to the particular purpose for which it was shared and they are not allowed to share personal information about you with others except to fulfill that limited purpose or as may be permitted or required by law.

3. How Do We Protect the Security and Confidentiality of Personal Information We Collect About You?

We maintain physical, electronic and procedural security measures that comply with applicable law and regulations to help safeguard the personal information we collect about you. We have internal policies governing the proper handling of client information by

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

U.S. Privacy Policy (unaudited) (cont'd)

employees. Third parties that provide support or marketing services on our behalf may also receive personal information about you, and we require them to adhere to appropriate security standards with respect to such information.

4. How Can You Limit Our Sharing Certain Personal Information About You With Our Affiliated Companies for Eligibility Determination?

By following the opt-out procedures in Section 6 below, you may limit the extent to which we share with our affiliated companies, personal information that was collected to determine your eligibility for products and services such as your credit reports and other information that you have provided to us or that we may obtain from third parties ("eligibility information"). Eligibility information does not include your identification information or personal information pertaining to our transactions or experiences with you. Please note that, even if you direct us not to share eligibility information with our affiliated companies, we may still share your personal information, including eligibility information, with our affiliated companies under circumstances that are permitted under applicable law, such as to process transactions or to service your account.

5. How Can You Limit the Use of Certain Personal Information About You by Our Affiliated Companies for Marketing?

By following the opt-out instructions in Section 6 below, you may limit our affiliated companies from marketing their products or services to you based on personal information we disclose to them. This information may include, for example, your income and account history with us. Please note that, even if you choose to limit our affiliated companies from using personal information about you that we may share with them for marketing their products and services to you, our affiliated companies may use your personal information that they obtain from us to market to you in circumstances permitted by law, such as if the affiliated party has its own relationship with you.

6. How Can You Send Us an Opt-Out Instruction?

If you wish to limit our sharing of eligibility information about you with our affiliated companies, or our affiliated companies' use of personal information for marketing purposes, as described in this notice, you may do so by:

• Calling us at (800) 231-2608
Monday–Friday between 8:30a.m. and 6p.m. (EST)

• Writing to us at the following address:

Computershare Trust Company, N.A.
c/o Privacy Coordinator
P.O. Box 30170
College Station, Texas 77842

If you choose to write to us, your request should include: your name, address, telephone number and account number(s) to which the opt-out applies and whether you are opting out with respect to sharing of eligibility information (Section 4 above), or information used for marketing (Section 5 above), or both. Written opt-out requests should not be sent with any other correspondence. In order to

Morgan Stanley Emerging Markets Debt Fund, Inc.

June 30, 2015

U.S. Privacy Policy (unaudited) (cont'd)

process your request, we require that the request be provided by you directly and not through a third party. Once you have informed us about your privacy preferences, your opt-out preference will remain in effect with respect to this Policy (as it may be amended) until you notify us otherwise. If you are a joint account owner, we will accept instructions from any one of you and apply those instructions to the entire account.

Please understand that if you limit our sharing or our affiliated companies' use of personal information, you and any joint account holder(s) may not receive information about our affiliated companies' products and services, including products or services that could help you manage your financial resources and achieve your investment objectives.

If you have more than one account or relationship with us, please specify the accounts to which you would like us to apply your privacy choices. If you have accounts or relationships with our affiliates, you may receive multiple privacy policies from them, and will need to separately notify those companies of your privacy choices for those accounts or relationships.

7. What if an Affiliated Company Becomes a Nonaffiliated Third Party?

If, at any time in the future, an affiliated company becomes a nonaffiliated third party, further disclosures of personal information made to the former affiliated company will be limited to those described in Section 2(b) above relating to nonaffiliated third parties. If you elected under Section 6 to limit disclosures we make to affiliated companies, or use of personal information by affiliated companies, your election will not apply to use by any former affiliated company of your personal information in their possession once it becomes a nonaffiliated third party.

SPECIAL NOTICE TO RESIDENTS OF VERMONT

The following section supplements our Policy with respect to our individual clients who have a Vermont address and supersedes anything to the contrary in the above Policy with respect to those clients only.

The State of Vermont requires financial institutions to obtain your consent prior to sharing personal information that they collect about you with nonaffiliated third parties, or eligibility information with affiliated companies, other than in certain limited circumstances. Except as permitted by law, we will not share personal information we collect about you with nonaffiliated third parties or eligibility information with affiliated companies, unless you provide us with your written consent to share such information.

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIA

The following section supplements our Policy with respect to our individual clients who have a California address and supersedes anything to the contrary in the above Policy with respect to those clients only.

In response to a California law, if your account has a California home address, your personal information will not be disclosed to nonaffiliated third parties except as permitted by applicable California law, and we will limit sharing such personal information with our affiliates to comply with California privacy laws that apply to us.

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Item 2. Code of Ethics.

Not applicable for semiannual reports.

Item 3. Audit Committee Financial Expert.

Not applicable for semiannual reports.

Item 4. Principal Accountant Fees and Services

Not applicable for semiannual reports.

Item 5. Audit Committee of Listed Registrants.

Not applicable for semiannual reports.

Item 6.

(a) Refer to Item 1.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable for semiannual reports.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Applicable only to annual reports filed by closed-end funds.

Item 9. Closed-End Fund Repurchases

REGISTRANT PURCHASE OF EQUITY SECURITIES

Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit)	(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
JAN 2015	74,760	—	N/A	N/A
FEB 2015	222,846	—	N/A	N/A
MARCH 2015	197,311	—	N/A	N/A
APRIL 2015	23,020	—	N/A	N/A
MAY 2015	124,996	—	N/A	N/A
JUNE 2015	104,942	—	N/A	N/A
Total	747,875	—	N/A	N/A

Item 10. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 11. Controls and Procedures

(a) The Trust’s/Fund’s principal executive officer and principal financial officer have concluded that the Trust’s/Fund’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust/Fund in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

(b) There were no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits

(a) Code of Ethics — Not applicable for semiannual reports.

(b) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto as part of EX-99.CERT.

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.

Morgan Stanley Emerging Markets Debt Fund, Inc.

/s/ John H. Gernon
John H. Gernon
Principal Executive Officer
August 19, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ John H. Gernon
John H. Gernon
Principal Executive Officer
August 19, 2015

/s/ Francis Smith
Francis Smith
Principal Financial Officer
August 19, 2015