# EDGAR Filing Document

**Accession Number:** 0000904112
**File Stem:** 0001104659-26-022156
**Filing Date:** 2026-3
**Character Count:** 422254
**Document Hash:** 84755300d9d327588d9a2ba3db6c5d09
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-26-022156.hdr.sgml**: 20260302

**ACCESSION NUMBER**: 0001104659-26-022156

**CONFORMED SUBMISSION TYPE**: N-CSR

**PUBLIC DOCUMENT COUNT**: 10

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260302

**DATE AS OF CHANGE**: 20260302

**EFFECTIVENESS DATE**: 20260302

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** MORGAN STANLEY EMERGING MARKETS DEBT FUND INC
- **CENTRAL INDEX KEY:** 0000904112

**ORGANIZATION NAME:**
- **EIN:** 133713706
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** N-CSR
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-07694
- **FILM NUMBER:** 26706703

**BUSINESS ADDRESS:**
- **STREET 1:** 1585 BROADWAY
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10036
- **BUSINESS PHONE:** 800-231-2608

**MAIL ADDRESS:**
- **STREET 1:** 1585 BROADWAY
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10036

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MORGAN STANLEY DEAN WITTER EMERGING MARKETS DEBT FUND INC
- **DATE OF NAME CHANGE:** 20000504

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** MORGAN STANLEY EMERGING MARKETS DEBT FUND INC
- **DATE OF NAME CHANGE:** 19930714

**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: <u>811-07694</u>

Morgan Stanley Emerging Markets Debt Fund, Inc.

(Exact Name of Registrant as Specified in Charter)

<u>1585 Broadway, New York, New York 10036</u>

(Address of Principal Executive Offices)

Deidre E. Walsh

<u>One Post Office Square, Boston, Massachusetts 02109</u>

(Name and Address of Agent for Services)

<u>(617) 482-8260</u>

(Registrant's Telephone Number)

<u>December 31,</u>

Date of Fiscal Year End

<u>December 31, 2025</u>

Date of Reporting Period

**Item 1. Reports to Stockholders**

(a) ![](j2622574_aa001.jpg)

Morgan Stanley Investment Management Inc.<br>Adviser

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

Annual Report

December 31, 2025

![](j2622574_aa002.jpg)

![](j2622574_aa003.jpg)

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

**Table of Contents** (unaudited)

---

| | |
|:---|:---|
| [Letter to Stockholders](#LettertoStockholders-4) | 3 |
| [Performance Summary](#PerformanceSummary-4) | 6 |
| [Portfolio of Investments](#PortfolioofInvestments-4) | 8 |
| [Statement of Assets and Liabilities](#StatementofAssetsandLiabilities-4) | 21 |
| [Statement of Operations](#StatementofOperations-4) | 22 |
| [Statements of Changes in Net Assets](#StatementsofChangesinNetAssets-4) | 23 |
| [Financial Highlights](#FinancialHighlights-4) | 24 |
| [Notes to Financial Statements](#NotestoFinancialStatements-4) | 25 |
| [Report of Independent Registered Public Accounting Firm](#ReportofIndependentRegisteredPublicAccountingFirm-4) | 38 |
| [Portfolio Management](#PortfolioManagement-4) | 39 |
| [Investment Policy](#InvestmentPolicy-4) | 40 |
| [Principal Risks](#PrincipalRisks-4) | 54 |
| [Additional Information Regarding the Fund](#AdditionalInformationRegardingtheFund-4) | 81 |
| [Dividend Reinvestment and Cash Purchase Plan](#DividendReinvestmentandCashPurchasePlan-4) | 82 |
| [Potential Conflicts of Interest](#PotentialConflictsofInterest-4) | 83 |
| [Recent Changes](#RecentChanges-4) | 96 |
| [Important Notices](#ImportantNotices-4) | 97 |
| [U.S. Customer Privacy Notice](#USCustomerPrivacyNotice-4) | 98 |
| [Directors and Officers Information](#DirectorsandOfficersInformation-4) | 101 |

---

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Letter to Stockholders (unaudited)

**Performance**

For the year ended December 31, 2025, the Morgan Stanley Emerging Markets Debt Fund, Inc. (the "Fund") had total returns of 15.09%, based on net asset value, and 5.83% based on market value per share (including reinvestment of distributions), compared to its benchmark, the J.P. Morgan Emerging Markets Bond Global Diversified Index (the "Index"), which returned 14.30%. On December 31, 2025, the closing price of the Fund's shares on the New York Stock Exchange was $7.39, representing a -6.10% premium/discount to the Fund's net asset value per share. Past performance is no guarantee of future results.

Please keep in mind that double-digit returns are highly unusual and cannot be sustained. Investors should also be aware that these returns were primarily achieved during favorable market conditions.

**Factors Affecting Performance**

• The 2025 annual period delivered strong positive returns for both the hard currency and local currency segments of the emerging markets (EM) debt market. EM currencies broadly strengthened versus a weakening U.S. dollar and improving country-level fundamentals. Spreads tightened for both sovereign and corporate credit, bringing spread levels to multi-year lows by year-end. Many emerging markets central banks continued their interest rate cutting cycles as inflation continued to decrease and the backdrop was supportive as the U.S. Federal Reserve also cut interest rates multiple times during the year.

• EM external sovereign and quasi-sovereign debt returned 14.30% in the 12-month period, as measured by the Index.

• For the Fund, overweight allocations to Venezuela, Ukraine and Egypt contributed to relative performance. However, overweights to Brazilian and Mexican corporate bonds detracted from relative performance, as did an underweight to Panama sovereign credit.

**Management Strategies**

• As of the close of the reporting period, we believe valuations remained attractive for many areas of the emerging markets debt universe, particularly on the local credit side. Average annual inflation was likely to continue to fall for many emerging markets countries relative to developed markets. As a result, select emerging markets central banks will likely be positioned to continue to cut interest rates, with further support from U.S. monetary easing and a weaker U.S. dollar. Geopolitical conflicts remained, as the Russia-Ukraine war continued and Israel and Hamas have each accused the other of breaching the ceasefire. Beyond the humanitarian tragedies of these conflicts, there have been global spillovers that continued to trickle through to the world economy. Credit spreads were tight and near multiyear lows as of the end of reporting period, but we believe the EM debt universe still offered select pockets of opportunity, particularly in off-benchmark names. While the landscape remained very differentiated, individual country-level fundamentals have continued to improve, lowering the sovereign risk premium. We believe that bottom-up country-level evaluation continues to be key to uncover value.

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Letter to Stockholders (unaudited) (cont'd)

Sincerely,

![](j2622574_ba004.jpg)

John H. Gernon<br>President and Principal Executive Officer January 2026

------

(This page has been left blank intentionally.)

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Performance Summary (unaudited)

**Performance of $10,000 Investment as of December 31, 2025<br>Over 10 Years**

![](j2622574_ba005.jpg)

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

**Average Annual Total Returns as of December 31, 2025<sup>(1)</sup> (unaudited)**

---

| | | | |
|:---|:---|:---|:---|
| | **One Year** | **Five Years** | **Ten Years** |
| NAV | 15.09% | 3.23% | 5.10% |
| Market price | 5.83% | 4.65% | 6.13% |
| J.P. Morgan EMBI Global Diversified Index<sup>(2)</sup> | 14.30% | 1.78% | 4.40% |
| Emerging Markets Debt Blended Index<sup>(3)</sup> | 14.30% | 1.78% | 4.22% |

---

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

---

| | |
|:---|:---|
| **Distributions** | **Distributions** |
| Total Distributions per share for the period | $0.73 |
| Distribution Rate at NAV<sup>(4)</sup> | 7.62% |
| Distribution Rate at Market Price<sup>(4)</sup> | 8.12% |
| % Premium/(Discount) to NAV<sup>(5)</sup> | (6.10)% |

---

*(1) All Fund returns are net of fees and expenses and include applicable fee waivers and/or expense limitations. Absent any applicable fee waivers and/or expense limitations, performance would have been lower and there can be no assurance that any such waivers or limitations will continue in the future.*

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

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

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

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments

***(Showing Percentage of Total Value of Investments)***

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **FIXED INCOME SECURITIES (95.6%)** | **FIXED INCOME SECURITIES (95.6%)** | **FIXED INCOME SECURITIES (95.6%)** |
| **Albania (0.6%)** | **Albania (0.6%)** | **Albania (0.6%)** |
| **Sovereign (0.6%)** | **Sovereign (0.6%)** | **Sovereign (0.6%)** |
| Albania Government <br>International Bond,<br>3.50%, 11/23/31 | 100 | $117 |
| 4.75%, 2/14/35 | 750 | 894 |
|  |  | 1011 |
| **Angola (3.5%)** | **Angola (3.5%)** | **Angola (3.5%)** |
| **Corporate Bonds (0.7%)** | **Corporate Bonds (0.7%)** | **Corporate Bonds (0.7%)** |
| Azule Energy Finance PLC,<br>8.13%, 1/23/30 (a) | $1133 | 1136 |
| **Sovereign (2.8%)** | **Sovereign (2.8%)** | **Sovereign (2.8%)** |
| Angolan Government <br>International Bond,<br>8.00%, 11/26/29 | 500 | 489 |
| 8.75%, 4/14/32 | 200 | 195 |
| 9.13%, 11/26/49 | 246 | 211 |
| 9.24%, 1/15/31 | 790 | 796 |
| 9.38%, 5/8/48 | 653 | 576 |
| 9.88%, 10/15/35 | 2106 | 2087 |
|  |  | 4354 |
|  |  | 5490 |
| **Argentina (3.8%)** | **Argentina (3.8%)** | **Argentina (3.8%)** |
| **Corporate Bonds (1.4%)** | **Corporate Bonds (1.4%)** | **Corporate Bonds (1.4%)** |
| Banco Macro SA,<br>8.00%, 6/23/29 (a) | 508 | 514 |
| Empresa Distribuidora de <br>Electricidad de Mendoza SA,<br>9.75%, 7/28/31 (a)(b) | 670 | 660 |
| Generacion Mediterranea <br>SA/Central Termica Roca SA,<br>11.00%, 11/1/31 (a)(c)(d) | 426 | 301 |
| IRSA Inversiones y <br>Representaciones SA,<br>8.00%, 3/31/35 (a) | 303 | 302 |
| Vista Energy Argentina SAU,<br>8.50%, 6/10/33 (a) | 263 | 271 |
| YPF SA,<br>8.25%, 1/17/34 (a) | 178 | 182 |
|  |  | 2230 |

---

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **Senior Loan Interests (1.1%)** | **Senior Loan Interests (1.1%)** | **Senior Loan Interests (1.1%)** |
| Provincia De Neuquen <br>1 Month SOFR + 7.30%,<br>11.14%, 5/28/27 (e) | $107 | $109 |
| Provincia De Neuquen<br>1 Month SOFR + 7.30%,<br>11.14%, 5/28/27 (e) | 137 | 138 |
| Telecom Argentina SA<br>3 Month SOFR + 5.00%,<br>9.38%, 2/23/29 (e) | 278 | 283 |
| VMOS SA,<br>3 Month SOFR + 5.50%,<br>9.70%, 7/8/30 (e) | 488 | 486 |
|  |  | 1016 |
| **Sovereign (1.8%)** | **Sovereign (1.8%)** | **Sovereign (1.8%)** |
| Argentine Republic Government <br>International Bond,<br>0.75%, 7/9/30 (b) | 640 | 546 |
| 1.00%, 7/9/29 | 160 | 143 |
| 3.50%, 7/9/41 (b) | 500 | 347 |
| 4.13%, 7/9/35 (b) | 500 | 373 |
| 5.00%, 1/9/38 (b) | 600 | 467 |
| Provincia de Cordoba,<br>9.75%, 7/2/32 (a) | 927 | 977 |
|  |  | 2853 |
|  |  | 6099 |
| **Armenia (0.1%)** | **Armenia (0.1%)** | **Armenia (0.1%)** |
| **Sovereign (0.1%)** | **Sovereign (0.1%)** | **Sovereign (0.1%)** |
| Republic of Armenia <br>International Bond,<br>6.75%, 3/12/35 | 200 | 208 |
| **Azerbaijan (0.2%)** | **Azerbaijan (0.2%)** | **Azerbaijan (0.2%)** |
| **Sovereign (0.2%)** | **Sovereign (0.2%)** | **Sovereign (0.2%)** |
| Republic of Azerbaijan <br>International Bond,<br>3.50%, 9/1/32 | 340 | 320 |
| **Bahamas (0.9%)** | **Bahamas (0.9%)** | **Bahamas (0.9%)** |
| **Senior Loan Interests (0.9%)** | **Senior Loan Interests (0.9%)** | **Senior Loan Interests (0.9%)** |
| Commonwealth of Bahamas,<br>2024 EUR Term Loan,<br>6 Month EURIBOR + 6.85%, <br>8.97%, 11/24/28 (e) | 1125 | 1362 |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments (cont'd)

***(Showing Percentage of Total Value of Investments)***

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **Benin (1.1%)** | **Benin (1.1%)** | **Benin (1.1%)** |
| **Sovereign (1.1%)** | **Sovereign (1.1%)** | **Sovereign (1.1%)** |
| Benin Government <br>International Bond,<br>4.88%, 1/19/32 | 150 | $169 |
| 4.95%, 1/22/35 | 300 | 329 |
| 6.88%, 1/19/52 | 500 | 535 |
| 7.96%, 2/13/38 | $500 | 519 |
| 8.38%, 1/23/41 | 200 | 210 |
|  |  | 1762 |
| **Brazil (5.4%)** | **Brazil (5.4%)** | **Brazil (5.4%)** |
| **Corporate Bonds (5.4%)** | **Corporate Bonds (5.4%)** | **Corporate Bonds (5.4%)** |
| Braskem Netherlands Finance BV,<br>4.50%, 1/31/30 | 1155 | 452 |
| 8.50%, 1/23/81 | 518 | 91 |
| Constellation Oil Services <br>Holding SA,<br>9.38%, 11/7/29 (a) | 844 | 879 |
| Eldorado International. <br>Finance GmbH,<br>8.50%, 12/1/32 (a) | 810 | 836 |
| FORESEA Holding SA,<br>7.50%, 6/15/30 | 946 | 934 |
| Gol Finance, Inc.,<br>14.38%, 6/6/30 (a) | 839 | 861 |
| Oceanica Lux,<br>13.00%, 10/2/29 (a) | 827 | 833 |
| OHI Group SA,<br>13.00%, 7/22/29 (a) | 1254 | 1274 |
| OI SA<br>7.50% Cash, 6.00% PIK,<br>13.50%, 6/30/27 (a)(f) | 497 | 221 |
| Raizen Fuels Finance SA,<br>6.25%, 7/8/32 (a) | 200 | 168 |
| 6.70%, 2/25/37 | 286 | 232 |
| Samarco Mineracao SA<br>0.00% Cash, 9.00% PIK,<br>9.00%, 6/30/31 (f) | 1562 | 1584 |
| Unigel Luxembourg SA<br>13.50% Cash,15.00% PIK,<br>28.50%, 12/31/27 (f) | 34 | 20 |
| Yinson Boronia Production BV,<br>8.95%, 7/31/42 (a) | 197 | 215 |
|  |  | 8600 |

---

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **Bulgaria (0.2%)** | **Bulgaria (0.2%)** | **Bulgaria (0.2%)** |
| **Sovereign (0.2%)** | **Sovereign (0.2%)** | **Sovereign (0.2%)** |
| Bulgaria Government <br>International Bond,<br>5.00%, 3/5/37 | $280 | $280 |
| **Cameroon (0.4%)** | **Cameroon (0.4%)** | **Cameroon (0.4%)** |
| **Corporate Bond (0.4%)** | **Corporate Bond (0.4%)** | **Corporate Bond (0.4%)** |
| Golar LNG Ltd.,<br>7.75%, 9/19/29 | 600 | 594 |
| **Chile (1.8%)** | **Chile (1.8%)** | **Chile (1.8%)** |
| **Sovereign (1.8%)** | **Sovereign (1.8%)** | **Sovereign (1.8%)** |
| Chile Government International Bond,<br>2.55%, 7/27/33 | 700 | 608 |
| 3.50%, 1/25/50 | 1100 | 808 |
| 4.95%, 1/5/36 | 1500 | 1516 |
|  |  | 2932 |
| **China (1.5%)** | **China (1.5%)** | **China (1.5%)** |
| **Corporate Bonds (1.5%)** | **Corporate Bonds (1.5%)** | **Corporate Bonds (1.5%)** |
| Alibaba Group Holding Ltd.,<br>0.00%, 9/15/32 | 110 | 114 |
| 0.50%, 6/1/31 | 183 | 285 |
| China Oil & Gas Group Ltd.,<br>4.70%, 6/30/26 | 901 | 889 |
| H World Group Ltd.,<br>3.00%, 5/1/26 | 140 | 179 |
| KWG Group Holdings Ltd.,<br>7.88%, 8/30/24 (c)(d) | 654 | 34 |
| Longfor Group Holdings Ltd.,<br>3.95%, 9/16/29 | 572 | 450 |
| 4.50%, 1/16/28 | 200 | 178 |
| Shimao Group Holdings Ltd.,<br>0.00%, 7/21/26 (a) | 156 | 5 |
| 2.00% Cash, 3.00% PIK,<br>5.00 %, <br>7/21/32 - 1/21/34 (a)(f) | 774 | 21 |
| 5.00% Cash, 6.00% PIK, <br>11.00%, 7/21/31 (a)(f) | 1057 | 37 |
| Sunac China Holdings Ltd.,<br>0.00%, 6/23/26 - 6/23/28 (a) | 1081 | 193 |
| Times China Holdings Ltd.,<br>0.00%, 3/30/27 (a) | 932 | 12 |
| 0.00% Cash, 4.00% PIK, 4.00%, <br>3/30/29 (a)(f) | 171 | 3 |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments (cont'd)

***(Showing Percentage of Total Value of Investments)***

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **China (cont'd)** | **China (cont'd)** | **China (cont'd)** |
| **Corporate Bonds (cont'd)** | **Corporate Bonds (cont'd)** | **Corporate Bonds (cont'd)** |
| 0.00% Cash, 4.20% PIK, 4.20%, <br>9/30/32 (a)(f) | 636 | 12 |
| 6.75%, 7/16/23 (c)(d) | 410 | 13 |
|  |  | 2425 |
| **Colombia (2.4%)** | **Colombia (2.4%)** | **Colombia (2.4%)** |
| **Corporate Bonds (1.5%)** | **Corporate Bonds (1.5%)** | **Corporate Bonds (1.5%)** |
| ABRA Global Finance<br>6.00% Cash, 8.00% PIK,<br>14.00%, 10/22/29 (a)(f) | 416 | 416 |
| Avianca Midco 2 PLC,<br>9.00%, 12/1/28 (a) | 936 | 945 |
| 9.63%, 2/14/30 (a) | 304 | 305 |
| Banco de Occidente SA,<br>10.88%, 8/13/34 | 650 | 738 |
|  |  | 2404 |
| **Sovereign (0.9%)** | **Sovereign (0.9%)** | **Sovereign (0.9%)** |
| Colombia Government <br>International Bond,<br>3.13%, 4/15/31 | 550 | 478 |
| 4.13%, 5/15/51 | 510 | 317 |
| 7.75%, 11/7/36 | 610 | 637 |
|  |  | 1432 |
|  |  | 3836 |
| **Congo (1.7%)** | **Congo (1.7%)** | **Congo (1.7%)** |
| **Sovereign (1.7%)** | **Sovereign (1.7%)** | **Sovereign (1.7%)** |
| Congolese International Bond,<br>9.88%, 11/7/32 | 3086 | 2775 |
| **Costa Rica (0.8%)** | **Costa Rica (0.8%)** | **Costa Rica (0.8%)** |
| **Sovereign (0.8%)** | **Sovereign (0.8%)** | **Sovereign (0.8%)** |
| Costa Rica Government <br>International Bond,<br>6.55%, 4/3/34 | 1100 | 1202 |
| **Dominican Republic (2.3%)** | **Dominican Republic (2.3%)** | **Dominican Republic (2.3%)** |
| **Sovereign (2.3%)** | **Sovereign (2.3%)** | **Sovereign (2.3%)** |
| Dominican Republic <br>International Bond,<br>4.50%, 1/30/30 | 1000 | 979 |
| 4.88%, 9/23/32 | 700 | 676 |
| 5.30%, 1/21/41 | 600 | 545 |
| 6.00%, 2/22/33 | 200 | 205 |

---

---

| | | | |
|:---|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** | **<br>Value<br>(000)** |
| 6.85%, 1/27/45 (a) | $800 | $| 835 |
| 7.45%, 4/30/44 (a) | 400 |  | 442 |
|  |  |  | 3682 |
| **Ecuador (2.8%)** | **Ecuador (2.8%)** | **Ecuador (2.8%)** | **Ecuador (2.8%)** |
| **Sovereign (2.8%)** | **Sovereign (2.8%)** | **Sovereign (2.8%)** | **Sovereign (2.8%)** |
| Ecuador Government <br>International Bond,<br>0.00%, 7/31/30 | 1851 |  | 1578 |
| 6.90%, 7/31/30 - 7/31/35 (b) | 3022 |  | 2928 |
|  |  |  | 4506 |
| **Egypt (4.3%)** | **Egypt (4.3%)** | **Egypt (4.3%)** | **Egypt (4.3%)** |
| **Sovereign (4.3%)** | **Sovereign (4.3%)** | **Sovereign (4.3%)** | **Sovereign (4.3%)** |
| Egypt Government <br>International Bond,<br>5.63%, 4/16/30 | 600 |  | 705 |
| 5.88%, 2/16/31 | $200 |  | 201 |
| 6.38%, 4/11/31 | 900 |  | 1088 |
| 7.30%, 9/30/33 | $300 |  | 309 |
| 7.90%, 2/21/48 | 1000 |  | 932 |
| 8.50%, 1/31/47 | 1200 |  | 1181 |
| 8.63%, 2/4/30 | 207 |  | 230 |
| 8.75%, 9/30/51 | 724 |  | 726 |
| 8.88%, 5/29/50 | 1097 |  | 1115 |
| 9.45%, 2/4/33 | 241 |  | 277 |
|  |  |  | 6764 |
| **El Salvador (0.8%)** | **El Salvador (0.8%)** | **El Salvador (0.8%)** | **El Salvador (0.8%)** |
| **Sovereign (0.8%)** | **Sovereign (0.8%)** | **Sovereign (0.8%)** | **Sovereign (0.8%)** |
| El Salvador Government <br>International Bond,<br>7.65%, 6/15/35 | 216 |  | 225 |
| 8.25%, 4/10/32 | 450 |  | 487 |
| 9.25%, 4/17/30 | 212 |  | 231 |
| 9.65%, 11/21/54 (a) | 229 |  | 263 |
|  |  |  | 1206 |
| **Ethiopia (2.0%)** | **Ethiopia (2.0%)** | **Ethiopia (2.0%)** | **Ethiopia (2.0%)** |
| **Sovereign (2.0%)** | **Sovereign (2.0%)** | **Sovereign (2.0%)** | **Sovereign (2.0%)** |
| Ethiopia International Bond,<br>6.63%, 12/11/24 (c)(d) | 2960 |  | 3185 |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments (cont'd)

***(Showing Percentage of Total Value of Investments)***

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **Gabon (0.1%)** | **Gabon (0.1%)** | **Gabon (0.1%)** |
| **Sovereign (0.1%)** | **Sovereign (0.1%)** | **Sovereign (0.1%)** |
| Gabon Government <br>International Bond,<br>6.63%, 2/6/31 | $300 | $234 |
| **Georgia (1.1%)** | **Georgia (1.1%)** | **Georgia (1.1%)** |
| **Corporate Bonds (1.1%)** | **Corporate Bonds (1.1%)** | **Corporate Bonds (1.1%)** |
| Bank of Georgia JSC,<br>9.50%, 7/16/29 (g) | 830 | 867 |
| TBC Bank JSC,<br>10.25%, 7/30/29 (g) | 830 | 886 |
|  |  | 1753 |
| **Ghana (0.5%)** | **Ghana (0.5%)** | **Ghana (0.5%)** |
| **Corporate Bonds (0.5%)** | **Corporate Bonds (0.5%)** | **Corporate Bonds (0.5%)** |
| Kosmos Energy Ltd.,<br>8.75%, 10/1/31 | 976 | 556 |
| Tullow Oil PLC,<br>10.25%, 5/15/26 | 378 | 276 |
|  |  | 832 |
| **Greece (0.2%)** | **Greece (0.2%)** | **Greece (0.2%)** |
| **Corporate Bond (0.2%)** | **Corporate Bond (0.2%)** | **Corporate Bond (0.2%)** |
| Alpha Bank SA,<br>7.50%, 6/10/30 (g) | 298 | 381 |
| **Guatemala (1.0%)** | **Guatemala (1.0%)** | **Guatemala (1.0%)** |
| **Sovereign (1.0%)** | **Sovereign (1.0%)** | **Sovereign (1.0%)** |
| Guatemala Government Bond,<br>3.70%, 10/7/33 | $400 | 359 |
| 5.38%, 4/24/32 | 700 | 709 |
| 6.55%, 2/6/37 | 500 | 537 |
|  |  | 1605 |
| **Guyana (0.1%)** | **Guyana (0.1%)** | **Guyana (0.1%)** |
| **Corporate Bond (0.1%)** | **Corporate Bond (0.1%)** | **Corporate Bond (0.1%)** |
| Secure International <br>Finance Co., Inc.,<br>10.00%, 6/3/29 (a) | 173 | 174 |
| **Honduras (0.2%)** | **Honduras (0.2%)** | **Honduras (0.2%)** |
| **Sovereign (0.2%)** | **Sovereign (0.2%)** | **Sovereign (0.2%)** |
| Honduras Government <br>International Bond,<br>8.63%, 11/27/34 | 350 | 394 |

---

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **Hungary (2.2%)** | **Hungary (2.2%)** | **Hungary (2.2%)** |
| **Corporate Bonds (0.3%)** | **Corporate Bonds (0.3%)** | **Corporate Bonds (0.3%)** |
| MBH Bank Nyrt,<br>6.88%, 11/8/35 | 100 | $125 |
| OTP Bank Nyrt,<br>7.30%, 7/30/35 | $305 | 321 |
|  |  | 446 |
| **Sovereign (1.9%)** | **Sovereign (1.9%)** | **Sovereign (1.9%)** |
| Hungary Government <br>International Bond,<br>5.25%, 6/16/29 | 600 | 613 |
| 5.50%, 6/16/34 - 3/26/36 | 1600 | 1607 |
| 6.25%, 9/22/32 | 800 | 855 |
|  |  | 3075 |
|  |  | 3521 |
| **India (0.6%)** | **India (0.6%)** | **India (0.6%)** |
| **Corporate Bonds (0.3%)** | **Corporate Bonds (0.3%)** | **Corporate Bonds (0.3%)** |
| Vedanta Resources Finance II PLC,<br>9.48%, 7/24/30 (a) | 200 | 205 |
| 10.25%, 6/3/28 (a) | 210 | 217 |
|  |  | 422 |
| **Sovereign (0.3%)** | **Sovereign (0.3%)** | **Sovereign (0.3%)** |
| Export-Import Bank of India,<br>3.88%, 2/1/28 | 500 | 497 |
|  |  | 919 |
| **Iraq (0.1%)** | **Iraq (0.1%)** | **Iraq (0.1%)** |
| **Sovereign (0.1%)** | **Sovereign (0.1%)** | **Sovereign (0.1%)** |
| Iraq International Bond,<br>5.80%, 1/15/28 | 128 | 128 |
| **Israel (0.7%)** | **Israel (0.7%)** | **Israel (0.7%)** |
| **Sovereign (0.7%)** | **Sovereign (0.7%)** | **Sovereign (0.7%)** |
| Israel Government <br>International Bond,<br>5.75%, 3/12/54 | 219 | 211 |
| State of Israel,<br>3.80%, 5/13/60 | 1272 | 862 |
|  |  | 1073 |
| **Ivory Coast (0.7%)** | **Ivory Coast (0.7%)** | **Ivory Coast (0.7%)** |
| **Sovereign (0.7%)** | **Sovereign (0.7%)** | **Sovereign (0.7%)** |
| Ivory Coast Government <br>International Bond,<br>8.25%, 1/30/37 | 1001 | 1090 |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments (cont'd)

***(Showing Percentage of Total Value of Investments)***

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **Jamaica (0.8%)** | **Jamaica (0.8%)** | **Jamaica (0.8%)** |
| **Corporate Bonds (0.7%)** | **Corporate Bonds (0.7%)** | **Corporate Bonds (0.7%)** |
| Digicel International <br>Finance Ltd./Difl U.S. LLC,<br>8.63%, 8/1/32 (a) | $390 | $405 |
| NCB Financial Group Ltd.,<br>11.00%, 7/31/30 (a) | 620 | 636 |
|  |  | 1041 |
| **Senior Loan Interests (0.1%)** | **Senior Loan Interests (0.1%)** | **Senior Loan Interests (0.1%)** |
| Digicel International Finance Ltd.,<br>2025 Term Loan B,<br>3 Month SOFR + 5.25%, <br>9.02%, 8/6/32 (e) | 200 | 200 |
|  |  | 1241 |
| **Jordan (0.6%)** | **Jordan (0.6%)** | **Jordan (0.6%)** |
| **Sovereign (0.6%)** | **Sovereign (0.6%)** | **Sovereign (0.6%)** |
| Jordan Government <br>International Bond,<br>5.85%, 7/7/30 | 1006 | 1016 |
| **Kazakhstan (0.6%)** | **Kazakhstan (0.6%)** | **Kazakhstan (0.6%)** |
| **Corporate Bonds (0.6%)** | **Corporate Bonds (0.6%)** | **Corporate Bonds (0.6%)** |
| ForteBank JSC,<br>7.75%, 2/4/30 (a) | 646 | 645 |
| 9.75%, 11/3/30 (g) | 310 | 299 |
|  |  | 944 |
| **Kenya (0.8%)** | **Kenya (0.8%)** | **Kenya (0.8%)** |
| **Sovereign (0.8%)** | **Sovereign (0.8%)** | **Sovereign (0.8%)** |
| Republic of Kenya Government <br>International Bond,<br>8.25%, 2/28/48 | 347 | 328 |
| 9.50%, 3/5/36 | 900 | 961 |
|  |  | 1289 |
| **Lebanon (1.5%)** | **Lebanon (1.5%)** | **Lebanon (1.5%)** |
| **Sovereign (1.5%)** | **Sovereign (1.5%)** | **Sovereign (1.5%)** |
| Lebanon Government <br>International Bond,<br>5.80%, 4/14/20 (c)(d) | 1073 | 251 |
| 6.00%, 1/27/23 (c)(d) | 665 | 155 |
| 6.10%, 10/4/22 (c)(d) | 1107 | 259 |
| 6.15%, 6/19/20 (c)(d) | 24 | 6 |
| 6.20%, 2/26/25 (c)(d) | 166 | 39 |
| 6.25%, 5/27/22 - 6/12/25 (c)(d) | 435 | 103 |
| 6.38%, 3/9/20 (c)(d) | 72 | 17 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** | **<br>Value<br>(000)** |
| 6.40%, 5/26/23 (c)(d) | $| 2809 | $| 658 |
| 6.60%, 11/27/26 (c)(d) |  | 18 |  | 4 |
| 6.65%, 4/22/24 - 11/3/28 (c)(d) |  | 544 |  | 127 |
| 6.85%, 3/23/27 - 5/25/29 (c)(d) |  | 2121 |  | 497 |
| 7.00%, 3/20/28 - 3/23/32 (c)(d) |  | 803 |  | 188 |
| 7.25%, 3/23/37 (c)(d) |  | 151 |  | 36 |
| 8.25%, 4/12/21 (c)(d) |  | 17 |  | 4 |
|  |  |  |  | 2344 |
| **Malaysia (0.6%)** | **Malaysia (0.6%)** | **Malaysia (0.6%)** | **Malaysia (0.6%)** | **Malaysia (0.6%)** |
| **Corporate Bonds (0.6%)** | **Corporate Bonds (0.6%)** | **Corporate Bonds (0.6%)** | **Corporate Bonds (0.6%)** | **Corporate Bonds (0.6%)** |
| Petronas Capital Ltd.,<br>2.48%, 1/28/32 |  | 600 |  | 539 |
| 4.55%, 4/21/50 |  | 520 |  | 459 |
|  |  |  |  | 998 |
| **Mexico (2.4%)** | **Mexico (2.4%)** | **Mexico (2.4%)** | **Mexico (2.4%)** | **Mexico (2.4%)** |
| **Corporate Bonds (1.4%)** | **Corporate Bonds (1.4%)** | **Corporate Bonds (1.4%)** | **Corporate Bonds (1.4%)** | **Corporate Bonds (1.4%)** |
| Banco Mercantil del Norte SA,<br>8.38%, 5/20/31 (a)(g) |  | 550 |  | 578 |
| Braskem Idesa SAPI,<br>6.99%, 2/20/32 (c)(d) |  | 309 |  | 180 |
| Fideicomiso Irrevocable de <br>Administracion y Fuente de <br>Pago Numero CIB/4323<br>11.00% Cash, 2.00% PIK, <br>13.00%, 9/12/30 (c)(d)(f) |  | 804 |  | 223 |
| Grupo Aeromexico SAB de CV,<br>8.63%, 11/15/31 (a) |  | 695 |  | 711 |
| Total Play Telecomunicaciones <br>SA de CV,<br>11.13%, 12/31/32 (a) |  | 479 |  | 461 |
|  |  |  |  | 2153 |
| **Sovereign (1.0%)** | **Sovereign (1.0%)** | **Sovereign (1.0%)** | **Sovereign (1.0%)** | **Sovereign (1.0%)** |
| Petroleos Mexicanos,<br>6.63%, 6/15/35 |  | 800 |  | 759 |
| 6.75%, 9/21/47 |  | 685 |  | 564 |
| 7.69%, 1/23/50 |  | 300 |  | 269 |
|  |  |  |  | 1592 |
|  |  |  |  | 3745 |
| **Mongolia (1.0%)** | **Mongolia (1.0%)** | **Mongolia (1.0%)** | **Mongolia (1.0%)** | **Mongolia (1.0%)** |
| **Corporate Bonds (0.6%)** | **Corporate Bonds (0.6%)** | **Corporate Bonds (0.6%)** | **Corporate Bonds (0.6%)** | **Corporate Bonds (0.6%)** |
| Golomt Bank,<br>11.00%, 5/20/27 |  | 263 |  | 272 |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments (cont'd)

***(Showing Percentage of Total Value of Investments)***

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **Mongolia (cont'd)** | **Mongolia (cont'd)** | **Mongolia (cont'd)** |
| **Corporate Bonds (cont'd)** | **Corporate Bonds (cont'd)** | **Corporate Bonds (cont'd)** |
| Mongolian Mining Corp.,<br>8.44%, 4/3/30 | $200 | 203 |
| State Bank JSC,<br>8.90%, 9/25/28 | 410 | 412 |
|  |  | 887 |
| **Sovereign (0.4%)** | **Sovereign (0.4%)** | **Sovereign (0.4%)** |
| Mongolia Government <br>International Bond,<br>6.63%, 2/25/30 | 400 | 411 |
| 7.88%, 6/5/29 | 280 | 299 |
|  |  | 710 |
|  |  | 1597 |
| **Montenegro (1.2%)** | **Montenegro (1.2%)** | **Montenegro (1.2%)** |
| **Sovereign (1.2%)** | **Sovereign (1.2%)** | **Sovereign (1.2%)** |
| Montenegro Government <br>International Bond,<br>4.88%, 4/1/32 | 1550 | 1844 |
| **Morocco (0.5%)** | **Morocco (0.5%)** | **Morocco (0.5%)** |
| **Sovereign (0.5%)** | **Sovereign (0.5%)** | **Sovereign (0.5%)** |
| Morocco Government <br>International Bond,<br>3.00%, 12/15/32 | $500 | 441 |
| 4.00%, 12/15/50 (a) | 400 | 293 |
|  |  | 734 |
| **Nicaragua (0.2%)** | **Nicaragua (0.2%)** | **Nicaragua (0.2%)** |
| **Corporate Bond (0.2%)** | **Corporate Bond (0.2%)** | **Corporate Bond (0.2%)** |
| Polaris Renewable Energy, Inc.,<br>9.50%, 12/3/29 | 375 | 390 |
| **Nigeria (1.8%)** | **Nigeria (1.8%)** | **Nigeria (1.8%)** |
| **Sovereign (1.8%)** | **Sovereign (1.8%)** | **Sovereign (1.8%)** |
| Nigeria Government <br>International Bond,<br>7.70%, 2/23/38 | 350 | 351 |
| 8.38%, 3/24/29 | 400 | 427 |
| 10.38%, 12/9/34 | 1716 | 2039 |
|  |  | 2817 |
| **Oman (2.2%)** | **Oman (2.2%)** | **Oman (2.2%)** |
| **Sovereign (2.2%)** | **Sovereign (2.2%)** | **Sovereign (2.2%)** |
| Oman Government <br>International Bond,<br>5.38%, 3/8/27 | 500 | 506 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** | **<br>Value<br>(000)** |
| 6.00%, 8/1/29 | $| 300 | $| 315 |
| 6.25%, 1/25/31 |  | 1000 |  | 1071 |
| 6.75%, 1/17/48 |  | 500 |  | 552 |
| 7.38%, 10/28/32 |  | 900 |  | 1035 |
|  |  |  |  | 3479 |
| **Pakistan (0.8%)** | **Pakistan (0.8%)** | **Pakistan (0.8%)** | **Pakistan (0.8%)** | **Pakistan (0.8%)** |
| **Corporate Bond (0.4%)** | **Corporate Bond (0.4%)** | **Corporate Bond (0.4%)** | **Corporate Bond (0.4%)** | **Corporate Bond (0.4%)** |
| Veon Midco BV,<br>3.38%, 11/25/27 |  | 635 |  | 604 |
| **Sovereign (0.4%)** | **Sovereign (0.4%)** | **Sovereign (0.4%)** | **Sovereign (0.4%)** | **Sovereign (0.4%)** |
| Pakistan Government <br>International Bond,<br>7.38%, 4/8/31 |  | 728 |  | 725 |
|  |  |  |  | 1329 |
| **Panama (2.4%)** | **Panama (2.4%)** | **Panama (2.4%)** | **Panama (2.4%)** | **Panama (2.4%)** |
| **Senior Loan Interests (0.4%)** | **Senior Loan Interests (0.4%)** | **Senior Loan Interests (0.4%)** | **Senior Loan Interests (0.4%)** | **Senior Loan Interests (0.4%)** |
| &nbsp;&nbsp;&nbsp;&nbsp; Coral-U.S. Co-Borrower LLC,<br>2025 Term Loan B7,<br>3 Month SOFR + 3.25%, <br>7.15%, 1/31/32 (e) |  | 578 |  | 569 |
| **Sovereign (2.0%)** | **Sovereign (2.0%)** | **Sovereign (2.0%)** | **Sovereign (2.0%)** | **Sovereign (2.0%)** |
| Banco Latinoamericano de <br>Comercio Exterior SA,<br>7.50%, 9/17/32 (a)(g) |  | 205 |  | 210 |
| Panama Government <br>International Bond,<br>3.16%, 1/23/30 |  | 1000 |  | 939 |
| 4.50%, 4/1/56 |  | 1150 |  | 866 |
| 6.40%, 2/14/35 |  | 1110 |  | 1173 |
|  |  |  |  | 3188 |
|  |  |  |  | 3757 |
| **Paraguay (0.5%)** | **Paraguay (0.5%)** | **Paraguay (0.5%)** | **Paraguay (0.5%)** | **Paraguay (0.5%)** |
| **Corporate Bond (0.1%)** | **Corporate Bond (0.1%)** | **Corporate Bond (0.1%)** | **Corporate Bond (0.1%)** | **Corporate Bond (0.1%)** |
| Frigorifico Concepcion SA,<br>7.70%, 7/21/28 |  | 229 |  | 109 |
| **Senior Loan Interests (0.4%)** | **Senior Loan Interests (0.4%)** | **Senior Loan Interests (0.4%)** | **Senior Loan Interests (0.4%)** | **Senior Loan Interests (0.4%)** |
| Term Loan B,<br>3 Month SOFR + 5.50%, <br>9.63%, 12/8/26 (e) |  | 674 |  | 686 |
|  |  |  |  | 795 |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments (cont'd)

***(Showing Percentage of Total Value of Investments)***

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **Peru (1.7%)** | **Peru (1.7%)** | **Peru (1.7%)** |
| **Corporate Bonds (1.1%)** | **Corporate Bonds (1.1%)** | **Corporate Bonds (1.1%)** |
| Auna SA,<br>10.00%, 12/18/29 (a) | $731 | $778 |
| Banco de Credito del Peru SA,<br>5.65%, 1/15/37 (a) | 415 | 418 |
| Petroleos del Peru SA,<br>5.63%, 6/19/47 | 800 | 509 |
|  |  | 1705 |
| **Sovereign (0.6%)** | **Sovereign (0.6%)** | **Sovereign (0.6%)** |
| Peruvian Government <br>International Bond,<br>3.00%, 1/15/34 | 200 | 175 |
| 3.30%, 3/11/41 | 500 | 387 |
| 5.88%, 8/8/54 | 400 | 397 |
|  |  | 959 |
|  |  | 2664 |
| **Philippines (1.6%)** | **Philippines (1.6%)** | **Philippines (1.6%)** |
| **Sovereign (1.6%)** | **Sovereign (1.6%)** | **Sovereign (1.6%)** |
| Philippine Government <br>International Bond,<br>4.75%, 3/5/35 | 1200 | 1205 |
| 5.00%, 7/17/33 | 800 | 823 |
| 5.50%, 1/17/48 | 500 | 502 |
|  |  | 2530 |
| **Romania (6.0%)** | **Romania (6.0%)** | **Romania (6.0%)** |
| **Sovereign (6.0%)** | **Sovereign (6.0%)** | **Sovereign (6.0%)** |
| Romanian Government <br>International Bond,<br>1.75%, 7/13/30 | 148 | 157 |
| 2.00%, 4/14/33 | 118 | 113 |
| 2.63%, 12/2/40 | 218 | 170 |
| 2.75%, 4/14/41 | 117 | 92 |
| 2.88%, 4/13/42 | 125 | 98 |
| 3.38%, 1/28/50 | 73 | 55 |
| 3.88%, 10/29/35 | 768 | 789 |
| 4.63%, 4/3/49 | 661 | 613 |
| 5.13%, 6/15/48 | $72 | 59 |
| 5.63%, 2/22/36 | 221 | 257 |
| 5.75%, 3/24/35 | $2074 | 2060 |
| 5.88%, 7/11/32 | 288 | 354 |
| 6.00%, 5/25/34 | $72 | 73 |
| 6.00%, 9/24/44 | 620 | 704 |

---

---

| | | | |
|:---|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** | **<br>Value<br>(000)** |
| 6.13%, 10/7/37 | 910 | $| 1078 |
| 6.25%, 9/10/34 | 148 |  | 183 |
| 6.50%, 10/7/45 | 650 |  | 763 |
| 6.75%, 7/11/39 | 728 |  | 891 |
| 7.50%, 2/10/37 | $800 |  | 887 |
| 7.63%, 1/17/53 | 144 |  | 159 |
|  |  |  | 9555 |
| **Saudi Arabia (0.8%)** | **Saudi Arabia (0.8%)** | **Saudi Arabia (0.8%)** | **Saudi Arabia (0.8%)** |
| **Corporate Bonds (0.8%)** | **Corporate Bonds (0.8%)** | **Corporate Bonds (0.8%)** | **Corporate Bonds (0.8%)** |
| Riyad Sukuk Ltd.,<br>6.21%, 7/14/35 | 390 |  | 400 |
| Saudi Awwal Bank,<br>5.95%, 9/4/35 | 400 |  | 405 |
| SNB Funding Ltd.,<br>6.00%, 6/24/35 | 390 |  | 402 |
|  |  |  | 1207 |
| **Serbia (0.4%)** | **Serbia (0.4%)** | **Serbia (0.4%)** | **Serbia (0.4%)** |
| **Sovereign (0.4%)** | **Sovereign (0.4%)** | **Sovereign (0.4%)** | **Sovereign (0.4%)** |
| Serbia International Bond,<br>2.05%, 9/23/36 | 432 |  | 397 |
| 2.13%, 12/1/30 | $300 |  | 263 |
|  |  |  | 660 |
| **Sri Lanka (0.9%)** | **Sri Lanka (0.9%)** | **Sri Lanka (0.9%)** | **Sri Lanka (0.9%)** |
| **Sovereign (0.9%)** | **Sovereign (0.9%)** | **Sovereign (0.9%)** | **Sovereign (0.9%)** |
| Sri Lanka Government <br>International Bond,<br>3.10%, 1/15/30 (a)(b) | 320 |  | 305 |
| 3.35%, 3/15/33 (a)(b) | 104 |  | 90 |
| 3.60%, 6/15/35 - 2/15/38 (a)(b) | 854 |  | 772 |
| 4.00%, 4/15/28 (a) | 307 |  | 294 |
|  |  |  | 1461 |
| **Suriname (3.3%)** | **Suriname (3.3%)** | **Suriname (3.3%)** | **Suriname (3.3%)** |
| **Senior Loan Interests (0.1%)** | **Senior Loan Interests (0.1%)** | **Senior Loan Interests (0.1%)** | **Senior Loan Interests (0.1%)** |
| Staatsolie Maatschappij Suriname NV, |  |  |  |
| 2025 Term Loan,<br>1 Month SOFR + 5.50%,<br>9.31%, 4/26/32 (e) | 149 |  | 149 |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments (cont'd)

***(Showing Percentage of Total Value of Investments)***

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **Sovereign (3.2%)** | **Sovereign (3.2%)** | **Sovereign (3.2%)** |
| Suriname Government <br>International Bond,<br>7.70%, 11/6/30 (a) | $576 | $595 |
| 8.50%, 11/6/35 (a) | 2412 | 2614 |
| 9.00%, 12/31/50 (a)(e) | 1517 | 1836 |
|  |  | 5045 |
|  |  | 5194 |
| **Tanzania, United Republic Of (4.0%)** | **Tanzania, United Republic Of (4.0%)** | **Tanzania, United Republic Of (4.0%)** |
| **Senior Loan Interests (4.0%)** | **Senior Loan Interests (4.0%)** | **Senior Loan Interests (4.0%)** |
| HTA Group Ltd., |  |  |
| 2024 Term Loan Tranche A, ,<br>3 Month SOFR + 4.31%,<br>7.92%, 9/13/28 (e) | 120 | 120 |
| 2024 Tranche C Term Loan, ,<br>3 Month SOFR + 4.31%,<br>7.92%, 9/13/28 (e) | 760 | 760 |
| Tanzania2024 Term Loan A2, ,<br>6 Month SOFR + 5.45%,<br>9.46%, 2/27/31 (e) | 5600 | 5551 |
|  |  | 6431 |
| **Togo (0.5%)** | **Togo (0.5%)** | **Togo (0.5%)** |
| **Corporate Bonds (0.5%)** | **Corporate Bonds (0.5%)** | **Corporate Bonds (0.5%)** |
| Ecobank Transnational, Inc.,<br>10.13%, 10/15/29 (a) | 787 | 841 |
| **Trinidad And Tobago (0.1%)** | **Trinidad And Tobago (0.1%)** | **Trinidad And Tobago (0.1%)** |
| **Sovereign (0.1%)** | **Sovereign (0.1%)** | **Sovereign (0.1%)** |
| Trinidad & Tobago Government <br>International Bond,<br>5.95%, 1/14/31 | 200 | 205 |
| **Turkey (1.0%)** | **Turkey (1.0%)** | **Turkey (1.0%)** |
| **Corporate Bonds (1.0%)** | **Corporate Bonds (1.0%)** | **Corporate Bonds (1.0%)** |
| Limak Iskenderun Uluslararasi <br>Liman Isletmeciligi AS,<br>9.50%, 7/10/36 | 280 | 285 |
| Limak Yenilenebilir Enerji AS,<br>9.63%, 8/12/30 (a) | 519 | 511 |
| WE Soda Investments Holding PLC,<br>9.50%, 10/6/28 | 250 | 253 |
| Zorlu Enerji Elektrik Uretim AS,<br>11.00%, 4/23/30 | 675 | 585 |
|  |  | 1634 |

---

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **Ukraine (5.2%)** | **Ukraine (5.2%)** | **Ukraine (5.2%)** |
| **Corporate Bond (0.4%)** | **Corporate Bond (0.4%)** | **Corporate Bond (0.4%)** |
| Kernel Holding SA,<br>6.75%, 10/27/27 | $613 | $578 |
| **Sovereign (4.8%)** | **Sovereign (4.8%)** | **Sovereign (4.8%)** |
| Ukraine Government <br>International Bond,<br>0.00%, 2/1/30 (b) | 42 | 25 |
| 3.00%, 2/1/34 - 2/1/36 (b) | 1031 | 549 |
| 4.00%, 2/1/32 (b) | 6502 | 4940 |
| 4.50%, 2/1/29 - 2/1/36 (b) | 3506 | 2190 |
|  |  | 7704 |
|  |  | 8282 |
| **United Arab Emirates (2.1%)** | **United Arab Emirates (2.1%)** | **United Arab Emirates (2.1%)** |
| **Corporate Bonds (0.6%)** | **Corporate Bonds (0.6%)** | **Corporate Bonds (0.6%)** |
| Ittihad International II Ltd.,<br>7.38%, 11/13/30 (a) | 200 | 202 |
| MDGH GMTN RSC Ltd.,<br>4.38%, 11/22/33 | 800 | 788 |
|  |  | 990 |
| **Sovereign (1.5%)** | **Sovereign (1.5%)** | **Sovereign (1.5%)** |
| Abu Dhabi Government <br>International Bond,<br>3.88%, 4/16/50 | 700 | 564 |
| 5.00%, 4/30/34 | 1000 | 1054 |
| Finance Department <br>Government of Sharjah,<br>3.63%, 3/10/33 | 300 | 268 |
| Sharjah Sukuk Program Ltd.,<br>3.89%, 4/4/30 | 400 | 387 |
|  |  | 2273 |
|  |  | 3263 |
| **Uruguay (1.3%)** | **Uruguay (1.3%)** | **Uruguay (1.3%)** |
| **Sovereign (1.3%)** | **Sovereign (1.3%)** | **Sovereign (1.3%)** |
| Uruguay Government <br>International Bond,<br>5.10%, 6/18/50 | 500 | 473 |
| 5.44%, 2/14/37 | 1600 | 1666 |
|  |  | 2139 |
| **Uzbekistan (1.3%)** | **Uzbekistan (1.3%)** | **Uzbekistan (1.3%)** |
| **Corporate Bonds (1.2%)** | **Corporate Bonds (1.2%)** | **Corporate Bonds (1.2%)** |
| Jscb Agrobank,<br>9.25%, 10/2/29 | 829 | 896 |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments (cont'd)

***(Showing Percentage of Total Value of Investments)***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** | **<br>Value<br>(000)** |
| **Uzbekistan (cont'd)** | **Uzbekistan (cont'd)** | **Uzbekistan (cont'd)** | **Uzbekistan (cont'd)** | **Uzbekistan (cont'd)** |
| **Corporate Bonds (cont'd)** | **Corporate Bonds (cont'd)** | **Corporate Bonds (cont'd)** | **Corporate Bonds (cont'd)** | **Corporate Bonds (cont'd)** |
| Uzbek Industrial & Construction <br>Bank ATB,<br>8.95%, 7/24/29 | $| 550 | $| 591 |
| 9.45%, 10/23/30 (g) |  | 400 |  | 403 |
|  |  |  |  | 1890 |
| **Senior Loan Interests (0.0%) ‡** | **Senior Loan Interests (0.0%) ‡** | **Senior Loan Interests (0.0%) ‡** | **Senior Loan Interests (0.0%) ‡** | **Senior Loan Interests (0.0%) ‡** |
| Navoi Mining & Metallurgical Co.,<br>2024 Term Loan,<br>3 Month SOFR + 4.76%, <br>8.63%, 4/23/27 (e) |  | 21 |  | 21 |
| **Sovereign (0.1%)** | **Sovereign (0.1%)** | **Sovereign (0.1%)** | **Sovereign (0.1%)** | **Sovereign (0.1%)** |
| National Bank of Uzbekistan,<br>8.50%, 7/5/29 |  | 200 |  | 215 |
|  |  |  |  | 2126 |
| **Venezuela (3.2%)** | **Venezuela (3.2%)** | **Venezuela (3.2%)** | **Venezuela (3.2%)** | **Venezuela (3.2%)** |
| **Sovereign (3.2%)** | **Sovereign (3.2%)** | **Sovereign (3.2%)** | **Sovereign (3.2%)** | **Sovereign (3.2%)** |
| Petroleos de Venezuela SA,<br>5.38%, 4/12/27 (c)(d) |  | 1519 |  | 356 |
| 6.00%, 10/28/22 - 11/15/26 (c)(d) |  | 3265 |  | 739 |
| 8.50%, 10/27/20 - 10/20/27 (c)(d) |  | 1230 |  | 1320 |
| 9.00%, 11/17/21 (c)(d) |  | 628 |  | 161 |
| 9.75%, 5/17/35 (c)(d) |  | 1303 |  | 339 |
| 12.75%, 2/17/22 (c)(d) |  | 588 |  | 167 |
| Venezuela Government <br>International Bond,<br>6.00%, 12/9/20 (c)(d) |  | 657 |  | 175 |
| 7.00%, 12/1/18 - 3/31/38 (c)(d) |  | 541 |  | 149 |
| 7.65%, 4/21/25 (c)(d) |  | 531 |  | 151 |
| 7.75%, 10/13/19 (c)(d) |  | 577 |  | 155 |
| 8.25%, 10/13/24 (c)(d) |  | 610 |  | 173 |
| 9.00%, 5/7/23 (c)(d) |  | 581 |  | 165 |
| 9.25%, 9/15/27 - 5/7/28 (c)(d) |  | 1155 |  | 384 |
| 9.38%, 1/13/34 (c)(d) |  | 75 |  | 25 |
| 11.75%, 10/21/26 (c)(d) |  | 337 |  | 111 |
| 11.95%, 8/5/31 (c)(d) |  | 392 |  | 129 |
| 12.75%, 8/23/22 (c)(d) |  | 833 |  | 264 |
| 13.63%, 8/15/18 (c)(d) |  | 252 |  | 84 |
|  |  |  |  | 5047 |

---

---

| | | |
|:---|:---|:---|
| | **Face<br>Amount<br>(000)** | **<br>Value<br>(000)** |
| **Zambia (0.1%)** | **Zambia (0.1%)** | **Zambia (0.1%)** |
| **Sovereign (0.1%)** | **Sovereign (0.1%)** | **Sovereign (0.1%)** |
| Zambia Government <br>International Bond,<br>5.75%, 6/30/33 (b) | $202 | $200 |
| **TOTAL FIXED INCOME SECURITIES** (Cost $145,797) |  | 152101 |
|  | **Shares** |  |
| **COMMON STOCK (0.0%) ‡** | **COMMON STOCK (0.0%) ‡** | **COMMON STOCK (0.0%) ‡** |
| **Hong Kong (0.0%) ‡** | **Hong Kong (0.0%) ‡** | **Hong Kong (0.0%) ‡** |
| Times China Holdings Ltd. (h) <br>(Cost $7) | 439408 | 6 |
|  | **No. of<br>Warrants** |  |
| **WARRANTS (0.0%) ‡** | **WARRANTS (0.0%) ‡** | **WARRANTS (0.0%) ‡** |
| **Venezuela (0.0%) ‡** | **Venezuela (0.0%) ‡** | **Venezuela (0.0%) ‡** |
| Venezuela Government <br>International Bond, Oil-Linked <br>Payment Obligation expires <br>4/15/20 (e)(g)(h) <br>(Cost $—) | 5450 | 9 |
|  | **Shares** |  |
| **SHORT-TERM INVESTMENTS (3.8%)** | **SHORT-TERM INVESTMENTS (3.8%)** | **SHORT-TERM INVESTMENTS (3.8%)** |
| **Investment Company (3.5%)** | **Investment Company (3.5%)** | **Investment Company (3.5%)** |
| Morgan Stanley Institutional Liquidity <br>Funds — Treasury Securities <br>Portfolio — Institutional Class, <br>3.61% (See Note E) <br>(Cost $5,612) | 5611932 | 5612 |
|  | **Face<br>Amount<br>(000)** |  |
| **United States (0.3%)** | **United States (0.3%)** | **United States (0.3%)** |
| **U.S. Treasury Security (0.3%)** | **U.S. Treasury Security (0.3%)** | **U.S. Treasury Security (0.3%)** |
| U.S. Treasury Bill,<br>3.84%, 3/3/26 (i) <br>(Cost $482) | $485 | 482 |
| **TOTAL SHORT-TERM INVESTMENTS** (Cost $6,094) |  | 6094 |
| **TOTAL INVESTMENTS (99.4%)** <br> (Cost $151,898) (j)(k)(l) |  | 158210 |
| **LIABILITIES IN EXCESS OF OTHER ASSETS (0.6%)** |  | 955 |
| **NET ASSETS (100.0%)** |  | $159165 |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments (cont'd)

Country assignments and aggregations are based generally on third party vendor classifications and information, and may be different from the assignments and aggregations under the policies set forth in the Fund's prospectus and/or statement of additional information relating to geographic classifications.

‡ Amount is less than 0.05%.

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

(b) Multi-step — Coupon rate changes in predetermined increments to maturity. Rate disclosed is as of December 31, 2025. Maturity date disclosed is the ultimate maturity date.

(c) Issuer in bankruptcy.

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

(e) Floating or variable rate securities: The rates disclosed are as of December 31, 2025. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description in the Portfolio of Investments. Certain variable rate securities may not be based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description in the Portfolio of Investments.

(f) Income may be paid in additional securities and/or cash at the discretion of the issuer.

(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 December 31, 2025.

(h) Non-income producing security.

(i) Rate shown is the yield to maturity at December 31, 2025.

(j) The approximate fair value and percentage of net assets, $6,000 and 0.0%, respectively, represent the securities that have been fair valued under the fair valuation policy for international investments as described in Note A-1 within the Notes to Financial Statements.

(k) Securities are available for collateral in connection with open foreign currency forward exchange contracts, futures contracts and swap agreements.

(l) At December 31, 2025, the aggregate cost for federal income tax purposes is approximately $156,458,000. The aggregate gross unrealized appreciation is approximately $13,548,000 and the aggregate gross unrealized depreciation is approximately $7,881,000, resulting in net unrealized appreciation of approximately $5,667,000.

EUR EURO

EURIBOR Euro Interbank Offered Rate.

GMTN Global Medium Term Note.

JSC Joint Stock Company.

PIK Payment-in-Kind.

SOFR Secured Overnight Financing Rate.

---

| | | | |
|:---|:---|:---|:---|
| **Borrower** | **Unfunded<br>Loan<br>Commitments<br>(000)** | **Value<br>(000)** | **Unrealized<br>Appreciation/<br>(Depreciation)<br>(000)** |
| Staatsolie <br>Maatschappij<br>Suriname NV | $2551 | $2551 | $0 |
| VMSO SA | 702 | 700 | (2) |
|  | $3253 | $3251 | $(2) |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments (cont'd)

**Foreign Currency Forward Exchange Contracts:**

The Fund had the following foreign currency forward exchange contracts open at December 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Counterparty** | **Contracts<br>to<br>Deliver<br>(000)** | **In<br>Exchange<br>For<br>(000)** | **Delivery<br>Date** | **Unrealized<br>Appreciation<br>(Depreciation)<br>(000)** |
| Citibank NA | 840 | $982 | 1/9/26 | $(6 |
| Goldman Sachs International | 3719 | $4347 | 1/9/26 | (25 |
| Goldman Sachs International | 269 | $314 | 1/9/26 | (2 |
| Goldman Sachs International | 595 | $696 | 1/9/26 | (4 |
| Goldman Sachs International | 1315 | $1537 | 1/9/26 | (9 |
| oldman Sachs International | 1402 | $1638 | 1/9/26 | (9 |
| Goldman Sachs International | 7 | $8 | 1/9/26 | (— |
| Goldman Sachs International | 1313 | $1535 | 1/9/26 | (9 |
| Goldman Sachs International | 1560 | $1823 | 1/9/26 | (10 |
| Goldman Sachs International | 883 | $1032 | 1/9/26 | (6 |
| Goldman Sachs International | 1500 | $1753 | 1/9/26 | (10 |
| Goldman Sachs International | $128 | 110 | 1/9/26 | 1 |
| Goldman Sachs International | $194 | 166 | 1/9/26 | 1 |
| Goldman Sachs International | $21 | 18 | 1/9/26 |  |
| Goldman Sachs International | $312 | 267 | 1/9/26 | 2 |
| UBS AG | $197 | 168 | 1/9/26 | (— |
|  |  |  |  | $(86 |

---

**Futures Contracts:**

The Fund had the following futures contracts open at December 31, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Number<br>of<br>Contracts** | **Expiration<br>Date** | **Notional<br>Amount<br>(000)** | **Value<br>(000)** | **Unrealized<br>Appreciation<br>(Depreciation)<br>(000)** |
| **Long:** | **Long:** | **Long:** | **Long:** | **Long:** | **Long:** |
| Ultra U.S. Treasury Bond (United States) | 113 | Mar-26 | $11300 | $13334 | $(231) |
| U.S. Treasury 2 yr. Note (United States) | 5 | Mar-26 | 1000 | 1044 | (1) |
| U.S. Treasury 10 yr. Ultra Note (United States) | 95 | Mar-26 | 9500 | 10926 | (61) |
| U.S. Treasury 5 yr. Note (United States) | 7 | Mar-26 | 700 | 765 | (3) |
| U.S. Treasury Long Bond (United States) | 86 | Mar-26 | 8600 | 9941 | (108) |
| **Short:** | **Short:** | **Short:** | **Short:** | **Short:** | **Short:** |
| Euro-Buxl 30 yr. Bond Index (Germany) | 3 | Mar-26 | (300) | (388) | 6 |
| German Euro-Bobl Index (Germany) | 25 | Mar-26 | (2500) | (3413) | 13 |
| German Euro-Bund Index (Germany) | 59 | Mar-26 | (5900) | (8845) | 65 |
| German Euro-Schatz Index (Germany) | 23 | Mar-26 | (2300) | (2886) | 3 |
| U.S. Treasury 10 yr. Note (United States) | 51 | Mar-26 | $(5100) | (5734) | 23 |
|  |  |  |  |  | $(294) |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments (cont'd)

**Credit Default Swap Agreements:**

The Fund had the following credit default swap agreements open at December 31, 2025:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Swap Counterparty and<br>Reference Obligation** | **Credit<br>Rating of<br>Reference<br>Obligation** | **Buy/Sell<br>Protection** | **Pay/Received<br>Fixed Rate** | **Payment<br>Frequency** | **Maturity<br>Date** | **Notional<br>Amount<br>(000)** | **Value<br>(000)** | **Upfront<br>Payment<br>Paid<br>(Received)<br>(000)** | **Unrealized<br>Appreciation<br>(Depreciation)<br>(000)** |
| Barclays Bank PLC<br>Benin Government <br>International Bonds | NR | Sell | 1.00% | Quarterly | 6/20/27 | $100 | $(1) | $(4) | $3 |
| Barclays Bank PLC<br>Benin Government <br>International Bonds | NR | Sell | 1.00 | Quarterly | 6/20/27 | 100 | (1) | (4) | 3 |
| Morgan Stanley & Co. LLC\*<br>Egypt Government <br>International Bonds | NR | Sell | 1.00 | Quarterly | 12/20/28 | 303 | (8) | (55) | 47 |
| Goldman Sachs <br>International Petroleos <br>Mexicanos | NR | Sell | 1.00 | Quarterly | 6/20/26 | 370 | (1) | (7) | 6 |
| Morgan Stanley & Co. LLC\*<br>Petrobras Global <br>Finance BV | NR | Buy | 1.00 | Quarterly | 12/20/30 | 2896 | 68 | 73 | (5) |
| Goldman Sachs <br>International Petroleos <br>Mexicanos | NR | Sell | 1.00 | Quarterly | 6/20/27 | 1030 | (14) | (21) | 7 |
| JPMorgan Chase <br>Bank NA Petroleos <br>Mexicanos | NR | Sell | 1.00 | Quarterly | 6/20/27 | 456 | (6) | (10) | 4 |
| Barclays Bank PLC <br>Petroleos Mexicanos | NR | Sell | 1.00 | Quarterly | 12/20/26 | 914 | (6) | (11) | 5 |
| Barclays Bank PLC <br>Petroleos Mexicanos | NR | Sell | 1.00 | Quarterly | 6/20/27 | 686 | (10) | (14) | 4 |
| Barclays Bank PLC <br>Petroleos Mexicanos | NR | Sell | 1.00 | Quarterly | 6/20/27 | 150 | (2) | (3) | 1 |
|  |  |  |  |  |  |  | $19 | $(56) | $75 |

---

@ Value is less than $500.

\* Cleared swap agreement, the broker is Morgan Stanley & Co. LLC.

NR Not rated.

EUR — Euro

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Portfolio of Investments (cont'd)

**Portfolio Composition**

---

| | | |
|:---|:---|:---|
| **<br>Classification** | **Percentage of<br>Total Investments** | **Percentage of<br>Total Investments** |
| Sovereign | 65.9 | % |
| Corporate Bonds | 23.6 |  |
| Senior Loan Interests | 6.6 |  |
| Other\* | 3.9 |  |
| Total Investments | 100.0 | %\*\* |

---

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

\*\* Does not include open futures contracts with a value of approximately $57,276,000 and net unrealized depreciation of approximately $294,000. Does not include open foreign currency forward exchange contracts with net unrealized depreciation of approximately $86,000. Also does not include open swap agreements with net unrealized appreciation of approximately $75,000.

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Financial Statements

---

| | |
|:---|:---|
| Statement of Assets and Liabilities | **December 31, 2025<br>(000)** |
| **Assets:** | **Assets:** |
| Investments in Securities of Unaffiliated Issuers, at Value (Cost $146,286) | $152598 |
| Investment in Security of Affiliated Issuer, at Value (Cost $5,612) | 5612 |
| Total Investments in Securities, at Value (Cost $151,898) | 158210 |
| Foreign Currency, at Value (Cost $7) | 95 |
| Interest Receivable | 2873 |
| Cash | 22 |
| Receivable for Variation Margin on Futures Contracts | 1287 |
| Receivable for Investments Sold | 931 |
| Unrealized Appreciation on Swap Agreements | 33 |
| Receivable from Affiliate | 20 |
| Unrealized Appreciation on Foreign Currency Forward Exchange Contracts | 4 |
| Due from Broker | 4 |
| Other Assets | 18 |
| **Total Assets** | 163497 |
| **Liabilities:** | **Liabilities:** |
| Dividends Declared | 3035 |
| Deferred Capital Gain Country Tax | 600 |
| Payable for Investments Purchased | 275 |
| Payable for Advisory Fees | 135 |
| Unrealized Depreciation on Foreign Currency Forward Exchange Contracts | 90 |
| Upfront Payment Received on Open Swap Agreements | 74 |
| Payable for Custodian Fees | 56 |
| Payable for Professional Fees | 15 |
| Payable for Administration Fees | 5 |
| Payable for Stockholder Servicing Agent Fees | 3 |
| Net Unrealized Depreciation on Unfunded Commitments | 2 |
| Payable for Variation Margin on Swap Agreements | 2 |
| Other Liabilities | 40 |
| **Total Liabilities** | 4332 |
| **Net Assets** | **Net Assets** |
| Applicable to 20,231,283 Issued and Outstanding $0.01 Par Value Shares (100,000,000 Shares Authorized) | $159165 |
| **Net Asset Value Per Share** | $7.87 |
| **Net Assets Consist of:** | **Net Assets Consist of:** |
| Common Stock | $202 |
| Paid-in-Capital | 231544 |
| Total Accumulated Loss | (72581) |
| **Net Assets** | $159165 |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Financial Statements (cont'd)

---

| | |
|:---|:---|
| Statement of Operations | **Year Ended<br>December 31, 2025<br>(000)** |
| **Investment Income:** | **Investment Income:** |
| Interest from Securities of Unaffiliated Issuers | $12965 |
| Dividends from Security of Affiliated Issuer (Note E) | 296 |
| Dividends from Securities of Unaffiliated Issuers | 49 |
| **Total Investment Income** | 13310 |
| **Expenses:** | **Expenses:** |
| Advisory Fees (Note B) | 1553 |
| Professional Fees | 257 |
| Administration Fees (Note C) | 124 |
| Custodian Fees (Note D) | 88 |
| Stockholder Reporting Expenses | 54 |
| Stockholder Servicing Agent Fees | 16 |
| Directors' Fees and Expenses | 6 |
| Other Expenses | 85 |
| **Total Expenses** | 2183 |
| Waiver of Administration Fees (Note C) | (62) |
| Rebate from Morgan Stanley Affiliate (Note E) | (14) |
| **Net Expenses** | 2107 |
| **Net Investment Income** | 11203 |
| **Realized Gain (Loss):** | **Realized Gain (Loss):** |
| Investments Sold (Net of $72 of Capital Gain Country Tax) | (3619) |
| Foreign Currency Forward Exchange Contracts | (1400) |
| Foreign Currency Transactions | 230 |
| Futures Contracts | 180 |
| Swap Agreements | (3) |
| **Net Realized Loss** | (4612) |
| **Change in Unrealized Appreciation (Depreciation):** | **Change in Unrealized Appreciation (Depreciation):** |
| Investments (Net of Increase in Deferred Capital Gain Country Tax of $151) | 13849 |
| Foreign Currency Forward Exchange Contracts | (342) |
| Foreign Currency Translation | 153 |
| Futures Contracts | 843 |
| Swap Agreements | 39 |
| Unfunded Commitments | (2) |
| **Net Change in Unrealized Appreciation (Depreciation)** | 14540 |
| **Net Realized Loss and Change in Unrealized Appreciation (Depreciation)** | 9928 |
| **Net Increase in Net Assets Resulting from Operations** | $21131 |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Financial Statements (cont'd)

---

| | | |
|:---|:---|:---|
| Statements of Changes in Net Assets | **Year Ended<br>December 31, 2025<br>(000)** | **Year Ended<br>December 31, 2024<br>(000)** |
| **Increase (Decrease) in Net Assets:** | **Increase (Decrease) in Net Assets:** | **Increase (Decrease) in Net Assets:** |
| **Operations:** | **Operations:** | **Operations:** |
| Net Investment Income | $11203 | $19198 |
| Net Realized Gain (Loss) | (4612) | 1928 |
| Net Change in Unrealized Appreciation (Depreciation) | 14540 | (4759) |
| **Net Increase in Net Assets Resulting from Operations** | 21131 | 16367 |
| Dividends and Distributions to Stockholders | (14490) | (18476) |
| Paid-In-Capital | (272) |  |
| **Capital Share Transactions:** | **Capital Share Transactions:** | **Capital Share Transactions:** |
| Subscribed (32,178 and 8,807 shares) | 241 | 68 |
| **Net Increase in Net Assets Resulting from Capital Share Transactions** | 241 | 68 |
| **Total Increase (Decrease)** | 6610 | (2041) |
| **Net Assets:** | **Net Assets:** | **Net Assets:** |
| Beginning of Period | 152555 | 154596 |
| **End of Period** | $159165 | $152555 |

---

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Financial Highlights

***Selected Per Share Data and Ratios***

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2025** | **2024** | **2023** | **2022** | **2021** |
| **Net Asset Value, Beginning of Period** | $7.55 | $7.66 | $7.56 | $9.89 | $10.57 |
| Net Investment Income<sup>(1)</sup> | 0.55 | 0.95 | 0.64 | 0.53 | 0.45 |
| Net Realized and Unrealized Gain (Loss) | 0.50 | (0.14) | 0.21 | (2.38) | (0.68) |
| Total from Investment Operations | 1.05 | 0.81 | 0.85 | (1.85) | (0.23) |
| Distributions from and/or in Excess of: | Distributions from and/or in Excess of: | Distributions from and/or in Excess of: | Distributions from and/or in Excess of: | Distributions from and/or in Excess of: | Distributions from and/or in Excess of: |
| Net Investment Income | (0.72) | (0.92) | (0.74) | (0.48) | (0.45) |
| Paid-in-Capital | (0.01) |  | (0.02) |  |  |
| Total Distributions | (0.73) | (0.92) | (0.76) | (0.48) | (0.45) |
| Anti-Dilutive Effect of Share Repurchase Program |  |  | 0.01 |  |  |
| **Net Asset Value, End of Period** | $7.87 | $7.55 | $7.66 | $7.56 | $9.89 |
| **Per Share Market Value, End of Period** | $7.39 | $7.70 | $6.95 | $6.54 | $9.01 |
| **TOTAL INVESTMENT RETURN:<sup>(2)</sup>** | **TOTAL INVESTMENT RETURN:<sup>(2)</sup>** | **TOTAL INVESTMENT RETURN:<sup>(2)</sup>** | **TOTAL INVESTMENT RETURN:<sup>(2)</sup>** | **TOTAL INVESTMENT RETURN:<sup>(2)</sup>** | **TOTAL INVESTMENT RETURN:<sup>(2)</sup>** |
| Market Value | 5.83% | 24.96% | 19.11% | (22.05)% | 2.21% |
| Net Asset Value | 15.09% | 11.31% | 13.42% | (17.91)% | (1.71)% |
| **RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:** | **RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:** | **RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:** | **RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:** | **RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:** | **RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:** |
| **Net Assets, End of Period (Thousands)** | $159165 | $152555 | $154596 | $154212 | $201588 |
| Ratio of Expenses Before Expenses Waived by Administrator | 1.42% | 1.37% | 1.38% | 1.25% | 1.23% |
| Ratio of Expenses After Expenses Waived by Administrator | 1.36%<sup>(3)</sup> | 1.32%<sup>(3)</sup> | 1.34%<sup>(3)</sup> | 1.21%<sup>(3)</sup> | 1.18%<sup>(3)</sup> |
| Ratio of Net Investment Income | 7.21%<sup>(3)</sup> | 12.24%<sup>(3)</sup> | 8.48%<sup>(3)</sup> | 6.49%<sup>(3)</sup> | 4.37%<sup>(3)</sup> |
| Ratio of Rebate from Morgan Stanley Affiliates | 0.01% | 0.01% | 0.01% | 0.01% | 0.00%<sup>(4)</sup> |
| Portfolio Turnover Rate | 121% | 137% | 116% | 77% | 26% |

---

(1) Per share amount is based on average shares outstanding.

(2) 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. Total returns are based upon the market value and net asset value on the last business day of each period.

(3) The Ratio of Expenses After Expenses Waived by Administrator and Ratio of 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."

(4) Amount is less than 0.005%.

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements

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's primary investment objective is to produce high current income and as a secondary objective, to seek capital appreciation. The Fund seeks to achieve its investment objectives by investing 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. Under normal circumstances, the Fund invests at least 80% of its managed assets in emerging markets debt. The Fund's investment process incorporates information about environmental, social and governance issues (also referred to as ESG) via an integrated approach within the investment team's fundamental investment analysis framework. Morgan Stanley Investment Management Inc. (the "Adviser") and Morgan Stanley Investment Management Limited (the "Sub-Adviser") may engage with management of certain issuers regarding corporate governance practices as well as what the Fund's Adviser and Sub-Adviser deem to be materially important environmental and/or social issues facing a company. To the extent that the Fund invests in derivative instruments that (the Adviser or Sub-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.

The Fund applies investment company accounting and reporting guidance Accounting Standards Codification ("ASC") Topic 946. In the preparation of these financial statements, management has

evaluated subsequent events occurring after the date of the Fund's Statement of Assets and Liabilities through the date that the financial statements were issued.

**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) Fixed income securities may be valued by an outside pricing service/vendor approved by the Fund's Board of Directors (the "Directors"). The pricing service/vendor may employ a pricing model that takes into account, among other things, bids, yield spreads and/or other market data and specific security characteristics. If the Adviser and/or the Sub-Adviser determines that the price provided by the outside pricing service/vendor does not reflect the security's fair value or the pricing service/vendor or exchange is unable to provide a price, prices from reputable brokers/dealers may also be utilized. In these circumstances, the value of the security will be the mean of bid and asked prices obtained from reputable brokers/dealers; (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), and if there were no sales on a given day and if there is no official exchange closing price for that day, the security is valued at the mean between the last reported bid and asked prices if such bid and asked prices are available on the relevant exchanges. If only bid prices are available then the latest bid price may be used. Listed equity securities not traded on the valuation date with no reported bid and asked prices available on the exchange are valued at the mean between

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements (cont'd)

the current bid and asked prices obtained from one or more reputable brokers/dealers. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (3) when market quotations are not readily available, as defined by Rule 2a-5 under the Act, including circumstances under which the Adviser or the Sub-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 approved by and under the general supervision of the Directors. Each business day, the Fund uses a third-party pricing service approved by the Directors to assist with the valuation of foreign equity securities. Events occurring after the close of trading on foreign exchanges may result in adjustments to the valuation of foreign securities to reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or other instruments that have a strong correlation to the fair-valued securities to more accurately reflect their fair value as of the close of regular trading on the NYSE; (4) futures are valued at the settlement price on the exchange on which they trade or, if a settlement price is unavailable, at the last sale price on the exchange; (5) over-the-counter ("OTC") swaps may be valued by an outside pricing service approved by the Directors or quotes from a broker/dealer. Swaps cleared on a clearinghouse or exchange may be valued using the closing price provided by the clearinghouse or exchange; (6) foreign exchange transactions ("spot contracts") and foreign exchange forward contracts ("forward contracts") are valued daily using an independent pricing vendor at the spot and forward rates, respectively, as of the close of the NYSE; and (7) investments in mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value ("NAV") as of the close of each business day.

&nbsp;&nbsp;&nbsp;&nbsp;In connection with Rule 2a-5 of the Act, the Directors have designated the Fund's Adviser as its valuation designee. The valuation designee has responsibility for 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, as valuation designee, 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.

**2. Fair Value Measurement:** Financial Accounting Standards Board ("FASB") ASC 820, "Fair Value Measurement" ("ASC 820"), defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. 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:

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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements (cont'd)

• 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.

&nbsp;&nbsp;&nbsp;&nbsp;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.

&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of the inputs used to value each Fund's investments as of December 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Investment Type** | **Level 1<br>Unadjusted<br>quoted<br>prices** | **Level 2<br>Other<br>significant<br>observable<br>inputs** | **Level 3<br>Significant<br>unobservable<br>inputs** | **Total** |
| **Assets:** | **Assets:** | **Assets:** | **Assets:** | **Assets:** |
| **Fixed Income Securities** | **Fixed Income Securities** | **Fixed Income Securities** | **Fixed Income Securities** | **Fixed Income Securities** |
| Corporate <br>Bonds | $— | $37368 | $— | $37368 |
| Senior Loan <br>Interests |  | 10434 |  | 10434 |
| Sovereign |  | 104299 |  | 104299 |
| **Total Fixed <br>Income <br>Securities** | **—** | **152101** | **—** | **152101** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Investment Type** | **Level 1<br>Unadjusted<br>quoted<br>prices** | **Level 2<br>Other<br>significant<br>observable<br>inputs** | **Level 3<br>Significant<br>unobservable<br>inputs** | **Total** |
| **Assets: (cont'd)** | **Assets: (cont'd)** | **Assets: (cont'd)** | **Assets: (cont'd)** | **Assets: (cont'd)** |
| **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** | **Common Stock** |
| Real Estate <br>Management <br>& <br>Development | $— | $6 | $— | $6 |
| **Warrants** |  | 9 |  | 9 |
| **Short-Term Investments** | **Short-Term Investments** | **Short-Term Investments** | **Short-Term Investments** | **Short-Term Investments** |
| U.S. Treasury <br>Security |  | 482 |  | 482 |
| Investment <br>Company | 5612 |  |  | 5612 |
| **Total Short-Term <br>Investments** | **5612** | **482** | **—** | **6094** |
| **Foreign <br>Currency <br>Forward <br>Exchange <br>Contracts** |  | 4 |  | 4 |
| **Futures <br>Contracts** | 110 |  |  | 110 |
| **Credit Default <br>Swap <br>Agreements** |  | 80 |  | 80 |
| **Total Assets** | **5722** | **152682** | **—** | **158404** |
| **Liabilities:** | **Liabilities:** | **Liabilities:** | **Liabilities:** | **Liabilities:** |
| **Foreign <br>Currency <br>Forward <br>Exchange <br>Contracts** |  | (90) |  | (90) |
| **Futures <br>Contracts** | (404) |  |  | (404) |
| **Credit Default <br>Swap <br>Agreement** |  | (5) |  | (5) |
| **Total Liabilities** | (404) | (95) |  | (499) |
| **Total** | $**5318** | $**152587** | $**—** | $**157905** |

---

&nbsp;&nbsp;&nbsp;&nbsp;Transfers between investment levels may occur as the markets fluctuate and/or the availability of data used in an investment's valuation changes.

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements (cont'd)

**3. 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.

&nbsp;&nbsp;&nbsp;&nbsp;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.

&nbsp;&nbsp;&nbsp;&nbsp;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. The change in unrealized currency gains (losses) on foreign currency translations for the period is reflected in the Statement of Operations.

&nbsp;&nbsp;&nbsp;&nbsp;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 securities 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.

**4. 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, risks arising from margin and payment requirements, risks arising from mispricing or valuation complexity and

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements (cont'd)

operational and legal risks. 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.

&nbsp;&nbsp;&nbsp;&nbsp;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 may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser and/or the Sub-Adviser seek to use derivatives to further the Fund's investment objectives, there is no assurance that the use of derivatives will achieve this result.

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

&nbsp;&nbsp;&nbsp;&nbsp;**Foreign Currency Forward Exchange Contracts:** In connection with its investments in foreign securities, the Fund also entered into contracts with banks and brokers/dealers to purchase or sell 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.

&nbsp;&nbsp;&nbsp;&nbsp;**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

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements (cont'd)

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) and are recorded as unrealized gains or losses by the Fund. Gains (losses) are realized upon the expiration or closing of the futures contract. 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.

&nbsp;&nbsp;&nbsp;&nbsp;**Swaps:** The Fund may enter into OTC swap contracts or cleared swap transactions. A 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 OTC 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. During the period swap agreements are open, payments are received from or made to the counterparty or clearing-house based on changes in the value of the contract or variation margin, respectively. 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 based on the type of market participant and U.S. Commodities Futures Trading Commission ("CFTC") approval of contracts for central clearing and exchange trading.

&nbsp;&nbsp;&nbsp;&nbsp;The Fund's use of swaps during the period included those based on the credit of an underlying security commonly referred to as "credit default swaps." The Fund may be either the buyer or seller in a credit default swap. 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 by the issuer of the 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 referenced debt obligation. The use of credit default swaps could result in losses to the Fund if the Adviser fails to correctly

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements (cont'd)

evaluate the creditworthiness of the issuer of the referenced debt obligation.

&nbsp;&nbsp;&nbsp;&nbsp;If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap agreement and take delivery of the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap agreement less the recovery value of the referenced obligation or underlying securities comprising the referenced index. If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap agreement and deliver the referenced obligation, other deliverable obligations or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap agreement less the recovery value of the referenced obligation or underlying securities comprising the referenced index. Recovery values are estimated by market makers considering either industry standard recovery rates or entity specific factors and considerations until a credit event occurs. If a credit event has occurred, the recovery value is determined by a facilitated auction whereby a minimum number of allowable broker bids, together with a specified valuation method, are used to calculate the settlement value. The Fund's maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the swap agreement.

&nbsp;&nbsp;&nbsp;&nbsp;When the Fund has an unrealized loss on an OTC swap agreement, the Fund has instructed the custodian to pledge

cash or liquid securities as collateral with a value approximately equal to the amount of the unrealized loss. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate. If applicable, cash collateral is included with "Due from (to) Broker" in the Statement of Assets and Liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;Upfront payments paid or received by the Fund will be reflected as an asset or liability, respectively, in the Statement of Assets and Liabilities. Changes in market value, if any, are reflected as a component of net change in unrealized appreciation (depreciation) on the Statement of Operations. For OTC swap once the interim payments are settled in cash, the net amount is recorded as realized gain (loss) on swap agreement in the the Statement Operations, in addition to any realized gains (loss) recorded upon the termination of swap agreements.

&nbsp;&nbsp;&nbsp;&nbsp;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.

&nbsp;&nbsp;&nbsp;&nbsp;The following tables set forth the fair value of the Fund's derivative contracts by primary risk exposure as of December 31, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **Asset Derivatives<br>Statement of Assets and<br>Liabilities Location** | **Primary Risk<br>Exposure** | **Value<br>(000)** |
| Foreign Currency<br>Forward Exchange<br>Contracts | Unrealized Appreciation<br>on Foreign Currency<br>Forward Exchange<br>Contracts | <br>Currency Risk | $4 |
| Futures Contracts | Variation Margin on<br>Futures Contracts | Interest<br>Rate Risk | 110<br> (a) |
| Swap Agreements | Variation Margin on<br>Swap Agreements | Credit Risk | 47<br> (a) |
| Swap Agreements | Unrealized Appreciation<br>on Swap Agreements | Credit Risk | 33 |
| Total |  |  | $194 |

---

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements (cont'd)

---

| | | | |
|:---|:---|:---|:---|
|  | **Liability Derivatives<br>Statement of Assets and<br>Liabilities Location** | **Primary Risk <br>Exposure** | **Value<br>(000)** |
| Foreign Currency<br>Forward Exchange <br>Contracts | Unrealized Depreciation<br>on Foreign Currency<br>Forward Exchange <br>Contracts | <br>Currency Risk | $(90) |
| Futures Contracts | Variation Margin on<br>Futures Contracts | Interest<br>Rate Risk | (404)(a) |
| Swap Agreements | Variation Margin on <br>Swap Agreements | Credit Risk | (5)(a) |
| Total |  |  | $(499) |

---

&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;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 year ended December 31, 2025 in accordance with ASC 815:

---

| | | |
|:---|:---|:---|
| **Realized Gain (Loss)** | **Realized Gain (Loss)** | **Realized Gain (Loss)** |
| **Primary Risk Exposure** | **Derivative<br>Type** | **Value<br>(000)** |
| Currency Risk | Foreign Currency<br>Forward Exchange<br>Contracts | $(1400) |
| Interest Rate Risk | Future Contracts | 180 |
| Credit Risk | Swap Agreements | (3) |
| Total |  | $(1223) |
| **Change in Unrealized Appreciation (Depreciation)** | **Change in Unrealized Appreciation (Depreciation)** | **Change in Unrealized Appreciation (Depreciation)** |
| **Primary Risk Exposure** | **Derivative<br>Type** | **Value<br>(000)** |
| Currency Risk | Foreign Currency<br>Forward Exchange <br>Contracts | $(342) |
| Interest Rate Risk | Future Contracts | 843 |
| Credit Risk | Swap Agreements | 39 |
| Total |  | $540 |

---

&nbsp;&nbsp;&nbsp;&nbsp;At December 31, 2025, the Fund's derivative assets and liabilities are as follows:

---

| | | |
|:---|:---|:---|
| **Gross Amounts of Assets and Liabilities Presented in the <br>Statement of Assets and Liabilities** | **Gross Amounts of Assets and Liabilities Presented in the <br>Statement of Assets and Liabilities** | **Gross Amounts of Assets and Liabilities Presented in the <br>Statement of Assets and Liabilities** |
| **Derivatives(a)** | **Assets(b)<br>(000)** | **Liabilities(b)<br>(000)** |
| Foreign Currency Forward <br>Exchange Contracts | $4 | $(90) |
| Swap Agreements | 33 |  |
| Total | $37 | $(90) |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a)Excludes exchange-traded derivatives.

&nbsp;&nbsp;&nbsp;&nbsp;(b)Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;The Fund typically enters into International Swaps and Derivatives Association, Inc. Master Agreements ("ISDA Master Agreements") or similar master agreements (collectively, "Master Agreements") with its contract counterparties for certain OTC derivatives in order to, among other things, reduce its credit risk to counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Fund typically may offset with the counterparty certain OTC derivative financial instruments' payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default, termination and/or potential deterioration in the credit quality of the counterparty. Various Master Agreements govern the terms of certain transactions with counterparties, including transactions such as swap, forward, repurchase and reverse repurchase agreements. These Master Agreements typically attempt to reduce the counterparty risk associated with such transactions by specifying credit protection mechanisms and providing standardization that improves legal certainty.

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements (cont'd)

Cross-termination provisions under Master Agreements typically provide that a default in connection with one transaction between the Fund and a counterparty gives the non-defaulting party the right to terminate any other transactions in place with the defaulting party to create one single net payment due to/due from the defaulting party and may be a feature in certain Master Agreements. In the event the Fund exercises its right to terminate a Master Agreement after a counterparty experiences a termination event as defined in the Master Agreement, the return of collateral with market value in excess of the Fund's net liability may be delayed or denied.

&nbsp;&nbsp;&nbsp;&nbsp;The following tables present derivative financial instruments that are subject to enforceable netting arrangements as of December 31, 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Gross Amounts Not Offset in the Statement of Assets and Liabilities** | **Gross Amounts Not Offset in the Statement of Assets and Liabilities** | **Gross Amounts Not Offset in the Statement of Assets and Liabilities** | **Gross Amounts Not Offset in the Statement of Assets and Liabilities** | **Gross Amounts Not Offset in the Statement of Assets and Liabilities** | **Gross Amounts Not Offset in the Statement of Assets and Liabilities** | **Gross Amounts Not Offset in the Statement of Assets and Liabilities** |
| **Counterparty** | **Gross Asset<br>Derivatives<br>Presented in <br>the Statement of<br>Assets and<br>Liabilities<br>(000)** | **Gross Asset<br>Derivatives<br>Presented in <br>the Statement of<br>Assets and<br>Liabilities<br>(000)** | **Financial<br>Instrument<br>(000)** | **Collateral<br>Received<br>(000)** | **Net<br>Amount<br>(not less<br>than $0)<br>(000)** | **Net<br>Amount<br>(not less<br>than $0)<br>(000)** |
| Barclays Bank PLC | $16 |  | $— | $— | $16 |  |
| Goldman Sachs International | 17 |  | (4) |  | 13 |  |
| JPMorgan Chase Bank NA | 4 |  |  |  | 4 |  |
| Total | $37 |  | $(4) | $— | $33 |  |
| **Gross Amounts Not Offset in the Statement of Assets and Liabilities** | **Gross Amounts Not Offset in the Statement of Assets and Liabilities** | **Gross Amounts Not Offset in the Statement of Assets and Liabilities** | **Gross Amounts Not Offset in the Statement of Assets and Liabilities** | **Gross Amounts Not Offset in the Statement of Assets and Liabilities** | **Gross Amounts Not Offset in the Statement of Assets and Liabilities** | **Gross Amounts Not Offset in the Statement of Assets and Liabilities** |
| **Counterparty** | **Gross Liability<br>Derivatives<br>Presented in <br>the Statement of<br>Assets and<br>Liabilities<br>(000)** | **Gross Liability<br>Derivatives<br>Presented in <br>the Statement of<br>Assets and<br>Liabilities<br>(000)** | **Financial<br>Instrument<br>(000)** | **Collateral<br>Pledged<br>(000)** | **Net<br>Amount<br>(not less<br>than $0)<br>(000)** | **Net<br>Amount<br>(not less<br>than $0)<br>(000)** |
| Citibank NA | $6 |  | $— | $— | $6 |  |
| Goldman Sachs International | 84 |  | (4) |  | 80 |  |
| UBS AG |  | @ |  |  |  | @ |
| Total | $90 |  | $(4) | $— | $86 |  |

---

@Value is less than $500.

&nbsp;&nbsp;&nbsp;&nbsp;For the year ended December 31, 2025, the average monthly amount outstanding for each derivative type is as follows:

**Foreign Currency Forward Exchange Contracts:**

---

| | |
|:---|:---|
| Average monthly principal amount | $19418000 |

---

**Futures Contracts:**

---

| | |
|:---|:---|
| Average monthly notional value | $95433000 |

---

**Swap Agreements:**

---

| | |
|:---|:---|
| Average monthly notional amount | $4699000 |

---

**5. 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.

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements (cont'd)

**6. Indemnifications:** The Fund enters into contracts that contain a variety of indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred.

**7. Dividends and Distributions to Stockholders:** Dividends 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.

**8. 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. Discounts are accreted and premiums are amortized over the life of the respective securities. 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.

**9. Segment Reporting:** The Fund operates as a single reportable segment, an investment company whose investment objective is included at the beginning of the Notes to the Financial Statements. The Fund's President acts as the Fund's Chief Operating Decision Maker (CODM), who is responsible for assessing the performance of the Fund's single segment and deciding how to allocate the segment's resources. To perform this function, the CODM reviews the information in the Fund's Financial Statements.

**B. Advisory/Sub-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.

The Adviser has entered into a Sub-Advisory Agreement with the Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley. The Sub-Adviser provides the Fund with advisory services subject to the overall supervision of the Adviser and the Fund's Officers and Directors. The Adviser pays the Sub-Adviser on a monthly basis a portion of the net advisory fees the Adviser receives from the Fund.

**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 daily 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 year ended December 31, 2025, approximately $62,000 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 Administrator pays State Street a portion of the fee the Administrator receives from the Fund.

**D. Custodian Fees:** State Street (the "Custodian") also serves as Custodian for the Fund in accordance with a Custodian Agreement. 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 year ended December 31, 2025, purchases and sales of investment securities for the Fund, other than long-term U.S. Government securities and short-term investments were approximately $173,419,000 and $178,851,000, respectively. There were no purchases and sales of long-term U.S. Government securities for the year ended December 31, 2025.

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements (cont'd)

The Fund invests in the Institutional Class of the Morgan Stanley Institutional Liquidity Funds — Treasury Securities Portfolio (the "Liquidity Fund"), an open-end management investment company managed by the Adviser. 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 Fund. For the year ended December 31, 2025, advisory fees paid were reduced by approximately $14,000 relating to the Fund's investment in the Liquidity Fund.

A summary of the Fund's transactions in shares of affiliated investments during the year ended December 31, 2025 is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Affiliated<br>Investment<br>Company** | **Value<br>December 31,<br>2024<br>(000)** | **Purchases<br>at Cost<br>(000)** | **Proceeds<br>from Sales<br>(000)** | **Dividend<br>Income<br>(000)** |
| Liquidity Fund | $2080 | $106692 | $103160 | $296 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Affiliated<br>Investment<br>Company (cont'd)** | **Realized<br>Gain (Loss)<br>(000)** | **Change in<br>Unrealized<br>Appreciation<br>(Depreciation)<br>(000)** | **Value<br>December 31,<br>2025<br>(000)** |
| Liquidity Fund | $— | $— | $5612 |

---

Each Director receives an annual retainer fee for serving as a Director of the Morgan Stanley Funds. The aggregate compensation paid to each Director is paid by the Morgan Stanley Funds, and is allocated on a pro rata basis among each of the operational funds of the Morgan Stanley Funds based on the relative net assets of each of the funds. The Fund also reimburses such Directors for travel and other out-of-pocket expenses incurred by them in connection with attending such meetings.

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.

The Fund's policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary. As of December 31, 2025, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure.

During this reporting period, the Fund adopted FASB Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires annual disclosure of the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes, and further disaggregated by individual jurisdiction in which income taxes paid is equal to or greater than 5% of total income taxes paid. The adoption of

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements (cont'd)

ASU 2023-09 did not result in any changes to the Fund's financial statement presentation or disclosure.

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. Tax positions taken or expected to be taken in the course of preparing the Fund's tax returns are evaluated to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the "more-likely-than-not" threshold would be recorded as a tax benefit or expense in the current year. Management has analyzed the Fund's tax positions taken, or to be taken, on U.S. federal income tax returns for all open tax years, and has concluded that no provision for income tax is required in the Fund's financial statements. The Fund's U.S. federal income tax returns are subject to examination by the Internal Revenue Service ("IRS") for a period of three years after they are filed. The Fund's tax positions for the tax years for which the applicable statutes of limitations have not expired are subject to examination by the state departments of revenue and by foreign tax authorities.

The tax character of distributions paid may differ from the character of distributions shown for GAAP purposes due to short-term capital gains being treated as ordinary income for tax purposes. The tax character of distributions paid during fiscal years 2025 and 2024 was as follows:

---

| | | | |
|:---|:---|:---|:---|
| **2025 Distributions <br>Paid From:** | **2025 Distributions <br>Paid From:** | **2024 Distributions <br>Paid From:** | **2024 Distributions <br>Paid From:** |
| **Ordinary<br>Income<br>(000)** | **Paid-in-<br>Capital<br>(000)** | **Ordinary<br>Income<br>(000)** | **Paid-in-<br>Capital<br>(000)** |
| $14490 | $272 | $18476 | $— |

---

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, due to a nondeductible expense, resulted in the following reclassifications among the components of net assets at December 31, 2025:

---

| | |
|:---|:---|
| **Total<br>Accumulated<br>Loss<br>(000)** | **Paid-in-<br>Capital<br>(000)** |
| $44 | $(44) |

---

At December 31, 2025, the Fund had no distributable earnings on a tax basis.

At December 31, 2025, the Fund had available for federal income tax purposes unused short-term and long-term capital losses of approximately $5,819,000 and $72,284,000, respectively, that do not have an expiration date.

To the extent that capital loss carryforwards are used to offset any future capital gains realized, no capital gains tax liability will be incurred by the Fund for gains realized and not distributed. To the extent that capital gains are offset, such gains will not be distributed to the stockholders.

Qualified late year losses are capital losses and specified ordinary losses, including currency losses, incurred after October 31 but within the taxable year that, if elected, are deemed to arise on the first day of the Fund's next taxable year. For the year ended

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Notes to Financial Statements (cont'd)

December 31, 2025, the Fund intends to defer to January 1, 2026 for U.S. federal income tax purposes the following losses:

---

| | |
|:---|:---|
| **Qualified<br>Late Year<br>Ordinary<br>Losses<br>(000)** | **Post-October<br>Capital<br>Losses<br>(000)** |
| $138 | $— |

---

**G. Other:** As permitted by the Fund's offering prospectus, 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 year ended December 31, 2025, the Fund did not repurchase any of its shares. Since the inception of the program, the Fund has repurchased 4,582,604 of its shares at an average discount of 14.49% 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.

At December 31, 2025, the Fund had record owners of 10% or greater. Investment activities of these shareholders could have a material impact on the Fund. The aggregate percentage of such owners was 14.1%.

**H. Results of Annual Meeting of Stockholders:** On June 25, 2025, 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** | **For** | **Against** | **Against** |
| Frank L. Bowman\* |  | 14,224,831 |  | 511,048 |
| Eddie A. Grier |  | 14,231,242 |  | 504,637 |
| Jakki L. Haussler |  | 14,224,734 |  | 511,145 |
| Manuel H. Johnson |  | 14,228,357 |  | 507,522 |
| Richard Gould III |  | 14,235,051 |  | 500,828 |

---

\*Retired on December 31, 2025

**I. Market and Geopolitical Risk:** The value of an investment in the Fund is based on the values of the Fund's investments, which change due to economic, geopolitical and other events that affect the U.S. and global markets generally, as well as those that affect or are perceived or expected to affect particular regions, countries, industries, companies, issuers, sectors, asset classes or governments. These types of events may be sudden and unexpected, and could adversely affect the value (or income generated by) and liquidity of the Fund's investments, which may in turn impact the Fund's ability to sell securities and/or its ability to meet redemptions. The risks associated with these developments may be magnified if certain social, political, economic and other conditions and events (such as war, natural disasters or events, epidemics and pandemics, terrorism, conflicts, social unrest, recessions, inflation, interest rate changes, supply chain disruptions and the threat or actual imposition of tariffs, trade barriers and other protectionist or retaliatory measures) adversely interrupt or otherwise affect the global economy and financial markets. It is difficult to predict when similar events affecting the U.S. or global financial markets or economies may occur, the effects that such events may have and the duration of those effects (which may last for extended periods). These types of events may negatively impact broad segments of businesses and populations and have a significant and rapid negative impact on the performance or value of the Fund's investments, and adversely affect and increase the volatility of the Fund's share price exacerbate preexisting risks to the Fund. The frequency and magnitude of resulting changes in the value of the Fund's investments cannot be predicted.

**Federal Tax Notice (unaudited)**

For federal income tax purposes, the following information is furnished with respect to the distributions paid by the Fund during its taxable year ended December 31, 2025.

The Fund designated approximately $951,000 of its distributions paid as qualified interest income.

The Fund designated approximately $9,418,000 of its distributions paid as business interest income.

In January, the Fund provides tax information to stockholders for the preceding calendar year.

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Report of Independent Registered Public Accounting Firm

**To the Stockholders and the Board of Directors of <br>Morgan Stanley Emerging Markets Debt Fund, Inc.**

**Opinion on the Financial Statements**

We have audited the accompanying statement of assets and liabilities of Morgan Stanley Emerging Markets Debt Fund, Inc. (the "Fund"), including the portfolio of investments, as of December 31, 2025, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund at December 31, 2025, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

**Basis for Opinion**

These financial statements are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of the Fund's internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2025, by correspondence with the custodian, brokers and others; when replies were not received from brokers and others, we performed other auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

![](j2622574_fa006.jpg)

We have served as the auditor of one or more Morgan Stanley investment companies since 2000.<br>Boston, Massachusetts<br>February 25, 2026

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

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 Sahil Tandon, a Managing Director of the Sub-Adviser, Akbar Causer, Kyle Lee and Federico Sequeda, Managing Directors of the Adviser. Mr. Tandon has been associated with the Sub-Adviser in an investment management capacity since August 2019. Prior to August 2019, Mr. Tandon was associated with the Adviser in an investment capacity from 2004. Mr. Tandon began managing the Fund in October 2015. Mr. Causer has been associated with the Adviser or its affiliates in an investment management capacity since April 2017. Mr. Lee has been associated with the Adviser or its affiliates in an investment management capacity since July 2007. Mr. Sequeda has been associated with the Adviser or its affiliates in an investment management capacity since September 2010.

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited)

The Fund's primary investment objective is to produce high current income and as a secondary objective, to seek capital appreciation. The Fund's investment objectives are fundamental policies that may not be changed without the approval of a majority of the Fund's outstanding voting securities. As used herein, a "majority of the Fund's outstanding voting securities" means the lesser of (i) 67% of the shares represented at a meeting at which more than 50% of the outstanding shares are represented, and (ii) more than 50% of the outstanding shares. There is no assurance that the Fund will achieve its investment objectives, and you can lose money investing in this Fund.

The Fund seeks to achieve its investment objectives by investing in debt securities of government and government related issuers located in emerging countries, entities organized to restructure outstanding debt of such issuers and debt securities of corporate issuers located in or organized under the laws of emerging countries. Under normal circumstances, the Fund invests at least 80% of its assets in emerging markets debt. To the extent that the Fund invests in derivative instruments the Adviser and/or the Sub-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.

An emerging country is any country that the International Bank for Reconstruction and Development (commonly known as The World Bank) or similar major financial institution has determined to have a low or middle economy or countries included in the Index.

The Adviser invests the Fund's assets in emerging country debt securities that provide a high level of current income, while at the same time holding the potential for capital appreciation if the perceived creditworthiness of the issuer improves due to improving economic, financial, political, social or other conditions in the country in which the issuer is located. Currently, investing in many emerging country securities is not feasible or may involve unacceptable political risks.

As opportunities to invest in debt securities in other countries develop, the Fund expects to expand and further diversify the emerging countries in which it invests. While the Fund generally is not restricted in the portion of its assets which may be invested in a single country or region, it is intended that, under normal conditions, the Fund's assets will be invested in issuers in at least three countries.

The Fund's investments in government and government-related and restructured debt securities will consist of (i) debt securities or obligations issued or guaranteed by governments, governmental agencies or instrumentalities and political subdivisions located in emerging countries (including participations in loans between governments and financial institutions), (ii) debt securities or obligations issued by government owned, controlled or sponsored entities located in emerging countries, and (iii) interests in issuers organized and operated for the purpose of restructuring the investment characteristics of instruments issued by any of the entities described above.

In addition, the Fund may invest in debt securities of corporate issuers located in or organized under the laws of emerging countries. The Fund's investments in debt securities of corporate issuers in emerging countries may include debt securities or obligations issued

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

(i) by banks located in emerging countries or by branches of emerging country banks located outside the country, (ii) by a company whose principal securities trading market is in an emerging country, (ii) by a company who alone or on a consolidated basis derives 50% or more of its annual revenue from goods produced, sales made or services performed in emerging countries or (iii) by a company that is organized under the laws of, or has a principal office in, an emerging country.

Emerging country debt securities held by the Fund take the form of bonds, notes, bills, debentures, convertible securities, warrants, bank debt obligations, short-term paper, loan participations, loan assignments and interests issued by entities organized and operated for the purpose of restructuring the investment characteristics of instruments issued by emerging country issuers. U.S. dollar- denominated emerging country debt securities held by the Fund generally are listed but not traded on a securities exchange, and non-U.S. dollar-denominated securities held by the Fund may or may not be listed or traded on a securities exchange. The Fund is not subject to restrictions on the maturities of the emerging country debt securities it holds those maturities may range from overnight to 30 years.

Pursuant to the Internal Revenue Code of 1986, as amended (the "Code"), the Fund is required to accrue a portion of any original issue discount with respect to such securities as income each year even though the Fund does not receive interest payments in cash during the year which reflect the discount so accrued. The Fund will also elect similar treatment for any market discount with respect to such securities. As a result, the Fund expects to make distributions of net investment income in amounts greater than the total amount of cash interest actually received. Such distributions will be made from the cash assets of the Fund, from borrowings or, if necessary, by liquidation of portfolio securities.

Although the Fund's portfolio is actively managed to take into account changes and anticipated changes occurring in emerging countries, the Fund invests with a long-term perspective, and is not intended to be a trading or arbitrage vehicle. However, market volatility during certain periods in the emerging country markets has made it necessary during such periods to engage in some short- term trading in order to preserve investment gains or limit losses. A high portfolio turnover rate may lead to higher transaction costs incurred by the Fund and may result in the realization of more short-term capital gains than if the Fund had lower portfolio turnover. Portfolio turnover rate is calculated by dividing the lesser of sales or purchases of portfolio securities by the average monthly value of the Fund's portfolio securities. For purposes of the calculation, portfolio securities exclude all debt securities having a maturity when purchased of one year or less.

A substantial portion of the Fund's assets may be invested in non-U.S. dollar-denominated securities. Non-U.S. dollar-denominated emerging country debt securities may be denominated in the local currency of an emerging country, as well as in hard currencies such as the British Pound Sterling, the Canadian Dollar, the Japanese Yen and the Swiss Franc. The Fund is not restricted in the portion of its assets which may be invested in securities denominated in a particular currency. The portion of the Fund's assets invested in securities denominated in currencies other than the U.S. dollar will vary depending on market conditions. Although the Fund is permitted to engage in a wide variety of investment practices designed to hedge against currency exchange rate risks with respect to its holdings of non-U.S. dollar-denominated debt securities, the Fund may be limited in its ability to hedge against these risks.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

**<u>Selection of Investments</u>**

In selecting particular emerging country debt securities for investment by the Fund, the Adviser applies a market risk analysis contemplating assessment of factors such as liquidity, volatility, tax implications, interest rate sensitivity, counterparty risks and technical market considerations. Emerging country debt securities in which the Fund may invest will be subject to high risk and will not be required to meet a minimum rating standard and may not be rated for creditworthiness by any internationally recognized credit rating organization. The Fund's investments generally are and are expected to continue to be rated in the lower and lowest rating categories of internationally recognized credit rating organizations or unrated securities of comparable quality. These types of debt obligations are predominantly speculative with respect to the capacity to pay interest and repay principal in accordance with their terms and generally involve a greater risk of default and of volatility in price than securities in higher rating categories.

Ratings of a non-U.S. debt instrument, to the extent that those ratings are undertaken, are related to evaluations of the country in which the issuer of the instrument is located. Ratings generally take into account the currency in which a non-U.S. debt instrument is denominated. Instruments issued by a foreign government in other than the local currency, for example, typically have a lower rating than local currency instruments due to the existence of an additional risk that the government will be unable to obtain the required foreign currency to service its foreign currency-denominated debt. In general, the ratings of debt securities or obligations issued by a non-U.S. public or private entity will not be higher than the rating of the currency or the foreign currency debt of the central government of the country in which the issuer is located, regardless of the intrinsic creditworthiness of the issuer.

**<u>Derivatives</u>**

The Fund may, but is not required to, use derivatives and other similar instruments for a variety of purposes, including hedging, risk management, portfolio management or to seek to earn income. Derivative instruments used by the Fund will be counted towards the Fund's exposure in the types of securities listed herein to the extent they have economic characteristics similar to such securities. A derivative is a financial instrument 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. Derivatives and other similar instruments that create synthetic exposure often are subject to risks similar to those of the underlying asset or instrument and may be subject to 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, risks arising from margin and payment requirements, risks arising from mispricing or valuation complexity and operational and legal risks. 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 may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

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.

The derivative instruments and techniques that the Fund may use include:

*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 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. Foreign currency forward exchange contracts may be used to seek to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. 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 and proxy 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.

Investments in foreign currency forward exchange contracts may substantially change the Fund's exposure to currency exchange rates and could result in losses to the Fund if currencies do not perform as the Adviser expects. The Adviser's success in these transactions will depend principally on its ability to predict accurately the future exchange rates between foreign currencies and the U.S. dollar. Foreign currency forward exchange contracts may be used for non-hedging purposes in seeking to meet the Fund's investment objectives, such as when the Adviser anticipates that particular non-U.S. currencies will appreciate or depreciate in value, even though securities denominated in those currencies are not then held in the Fund's investment portfolios. Investing in foreign currency forward exchange contracts for purposes of gaining from projected changes in exchange rates, as opposed to hedging currency risks applicable to the Fund's holdings, further increases the Fund's exposure to foreign securities losses. There is no assurance that the Adviser's use of currency derivatives will benefit the Fund or that they will be, or can be, used at appropriate times.

*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. While the value of a futures contract tends to increase or decrease in tandem with the value of the underlying instrument, differences between the futures market and the market for the underlying asset may result in an imperfect correlation. 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.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

*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, foreign currency or contract, such as a swap agreement or futures contract on the underlying instrument or foreign currency at an agreed-upon price during a period of time or on a specified date 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, swap, foreign currency, or futures contract on the underlying instrument, swap, foreign currency, at an agreed-upon price during a period of time or on a specified date typically in exchange for a premium received by the Fund. When options are purchased 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.

*Swaptions.* An option on a swap agreement, also called a "swaption," is an option that gives the buyer the right, but not the obligation, to enter into a swap on a future date in exchange for a premium. A receiver swaption gives the owner the right to receive the return of a specified asset, reference rate, or index. A payer swaption gives the owner the right to pay the return of a specified asset, reference rate, or index. Swaptions also include options that allow an existing swap to be terminated or extended by one of the counterparties.

*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 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.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

*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. Certain swaps have begun trading on exchanges or swap execution facilities. Exchange trading is expected to increase liquidity of swaps trading. 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 Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulatory developments require the clearing of certain standardized swap transactions. Swaps subject to mandatory central clearing must be traded on an exchange or swap execution facility unless no exchange or swap execution facility "makes the swap available to trade." The Fund may pay fees or incur costs each time it enters into, amends or terminates a swap agreement. 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 by a third-party on the 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. 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 of the issuer of the referenced debt obligation.

**<u>Foreign and Emerging Market Securities</u>**

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 that have historically been considered stable may become more volatile and subject to increased risk due to 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 (including geopolitical), 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. Certain foreign markets may

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

rely heavily on particular industries or foreign capital and are more vulnerable to diplomatic developments (including regional and global, military or other conflicts), the imposition of economic sanctions against a particular country or countries, companies, organizations, entities and/or individuals, changes in international trading patterns, trade barriers (including tariffs) 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 interventions or other 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 and decline in value in response to market developments or adverse investor perceptions, or become illiquid after purchase by the Fund, particularly during periods of market, economic, political and social 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 those investments will fluctuate with the U.S. dollar exchange rates.

**<u>Chinese Fixed-Income Investments</u>**

The Fund may invest in Chinese fixed-income securities traded in the China Interbank Bond Market ("CIBM") through the Bond Connect program ("Bond Connect"), which allows non-Chinese-domiciled investors (such as the Fund) to purchase certain fixed- income investments available in China's interbank bond market. Bond Connect utilizes the trading infrastructure of both Hong Kong and China. Bond Connect therefore is not available when there are trading holidays in Hong Kong. As a result, prices of securities purchased through Bond Connect may fluctuate at times when the Fund is unable to add to or exit its position. Securities offered via Bond Connect may lose their eligibility for trading through the program at any time, in which case they may be sold but could no longer be purchased through Bond Connect. Because Bond Connect is relatively new, its effects on the Chinese interbank bond are uncertain. In addition, the trading, settlement and information technology systems required for non-Chinese investors in Bond Connect are relatively new and continuing to evolve. In the event that the relevant systems do not function properly, trading via Bond Connect could be disrupted, adversely affecting the ability of the Fund to acquire or dispose of securities through Bond Connect in a timely manner, which in turn could adversely impact the Fund's performance.

Bond Connect is subject to regulation by both Hong Kong and China. There can be no assurance that further regulations will not affect the availability of securities in the program, the frequency of redemptions or other limitations. In China, Bond Connect securities are held on behalf of ultimate investors (such as the Fund) by the Hong Kong Monetary Authority Central Money Markets Unit via accounts maintained with China's two clearinghouses for fixed-income securities. While Chinese regulators have affirmed that the ultimate investors hold a beneficial interest in Bond Connect securities, the law surrounding such rights continues to develop, and the mechanisms that beneficial owners may use to enforce their rights are untested and therefore pose uncertain risks, with legal and regulatory risks potentially having retroactive effect. Further, courts in China have limited experience in applying the concept of

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

beneficial ownership, and the law surrounding beneficial ownership will continue to evolve as they do so. There is accordingly a risk that, as the law is tested and developed, the Fund's ability to enforce its ownership rights may be negatively impacted, which could expose the Fund to the risk of loss on such investments. The Fund may not be able to participate in corporate actions affecting Bond Connect securities due to time constraints or for other operational reasons, and payments of distributions could be delayed. Market volatility and potential lack of liquidity due to low trading volume of certain bonds may result in prices of those bonds fluctuating significantly; in addition, the bid-ask spreads of the prices of such securities may be large, and the Fund may therefore incur significant costs and suffer losses when selling such investments. More generally, bonds traded in CIBM may be difficult or impossible to sell, which could further impact the Fund's ability to acquire or dispose of such securities at their expected prices. Bond Connect trades are settled in Renminbi (RMB), the Chinese currency, and investors must have timely access to a reliable supply of RMB in Hong Kong, which cannot be guaranteed. Moreover, securities purchased through Bond Connect generally may not be sold, purchased or otherwise transferred other than through Bond Connect in accordance with applicable rules. Finally, uncertainties in the Chinese tax rules governing taxation of income and gains from investments via Bond Connect could result in unexpected tax liabilities for the Fund. The withholding tax treatment of dividends and capital gains payable to overseas investors currently is unsettled. Under the prevailing applicable Bond Connect regulations, the Fund participates in Bond Connect through an offshore custody agent, registration agent or other third parties (as the case may be), who would be responsible for making the relevant filings and account opening with the relevant authorities. The Fund is therefore subject to the risk of default or errors on the part of such agents.

**<u>Environmental, Social and Governance Issues</u>**

The Fund's investment process incorporates information about environmental, social and governance issues (also referred to as ESG) via an integrated approach within the investment team's fundamental investment analysis framework. The Fund's Adviser may engage with management of certain issuers regarding corporate governance practices as well as what the Fund's Adviser deems to be materially important environmental and/or social issues facing a company.

**<u>Loan Participations and Assignments</u>**

The Fund may invest in fixed and floating rate loans ("Loans") arranged through private negotiations between an issuer of sovereign debt obligations and one or more financial institutions ("Lenders"). The Fund's investments in Loans in most instances will be in the form of participations in Loans ("Participations") or assignments of all or a portion of Loans ("Assignments") from third parties. The Fund's investment in Participations typically will result in the Fund having a contractual relationship only with the Lender and not with the borrower. The Fund will have the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender selling the Participation and only upon receipt by the Lender of the payments from the borrower. In connection with purchasing Participations, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement relating to the Loan, nor any rights of set-off against the borrower, and the Fund may not directly benefit from any collateral supporting the Loan in which it has purchased the Participation. As a result, the Fund may be subject to the credit risk of both the borrower and the Lender that is selling the Participation. In the event of the insolvency of the Lender selling a Participation, the Fund may be treated as a general creditor of the Lender and may not benefit from any set-off between the Lender and the borrower. Certain Participations may be structured in a manner designed to avoid purchasers of Participations being subject to the credit risk of the Lender with respect to the Participation, but even under such a structure, in the event of the Lender's insolvency,

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

the Lender's servicing of the Participation may be delayed and the assignability of the Participation impaired. The Fund will acquire Participations only if the Lender interpositioned between the Fund and the borrower is determined by the Adviser to be creditworthy.

When the Fund purchases Assignments from Lenders, it will acquire direct rights against the borrower on the Loan. Because Assignments are arranged through private negotiations between potential assignees and potential assignors, however, the rights and obligations acquired by the Fund as the purchaser of an Assignment may differ from, and be more limited than, those held by the assigning Lender. The assignability of certain sovereign debt obligations is restricted by the governing documentation as to the nature of the assignee such that the only way in which the Fund may acquire an interest in a Loan is through a Participation and not an Assignment. The Fund may have difficulty disposing of Assignments and Participations because to do so it will have to assign such securities to a third party. Because there is no liquid market for such securities, the Fund anticipates that such securities could be sold only to a limited number of institutional investors. The lack of a liquid secondary market may have an adverse impact on the value of such securities and the Fund's ability to dispose of particular Assignments or Participations when necessary to meet the Fund's liquidity needs or in response to a specific economic event such as a deterioration in the creditworthiness of the borrower. The lack of a liquid secondary market for Assignments and Participations also may make it more difficult for the Fund to assign a value to these securities for purposes of valuing the Fund's portfolio and calculating its net asset value.

**<u>Temporary Investments</u>**

During periods in which the Adviser believes changes in economic, financial or political conditions make it advisable, the Fund may to do so, for temporary defensive purposes, reduce its holdings in emerging country debt securities and invest in certain other short-term (less than twelve months to maturity) and medium-term (not greater than five years to maturity) debt securities or hold cash. The short-term and medium-term debt securities in which the Fund may invest consist of (a) obligations of the U.S. government, its agencies or instrumentalities (b) bank deposits and bank obligations (including certificates of deposit, time deposits and bankers' acceptances) of U.S. or emerging country banks denominated in any currency (c) floating rate securities and other instruments denominated in any currency issued by international development agencies (d) finance company and corporate commercial paper and other short-term corporate debt obligations of U.S. corporations meeting the Fund's credit quality standards and (e) repurchase agreements with banks and broker-dealers with respect to such securities. During such periods, the Fund intends to invest only in short-term and medium-term debt securities that the Adviser believes to be of relatively low risk of loss of interest or principal (there is currently no rating system for debt securities in most emerging countries).

Repurchase agreements with respect to the securities described in the preceding paragraph are contracts under which a buyer of a security simultaneously commits to resell the security to the seller at an agreed upon price and date. Under a repurchase agreement, the seller generally is required to maintain the value of the securities subject to the repurchase agreement at not less than their repurchase price. The Adviser will monitor the value of such securities daily to determine that the value equals or exceeds the repurchase price including accrued interest. Repurchase agreements may involve risks in the event of default or insolvency of the seller, including possible delays or restrictions upon the Fund's ability to dispose of the underlying securities.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

**<u>Other Investments</u>**

<u>Private Placements.</u> The Fund may invest in emerging country debt securities that are sold in private placement transactions between their issuers and their purchasers and that are neither listed on an exchange nor traded over-the-counter. In many cases, privately placed securities will be subject to contractual or legal restrictions on transfer. As a result of the absence of a public trading market, privately placed securities may in turn be less liquid and more difficult to value than publicly traded securities. Although privately placed securities may be resold in privately negotiated transactions, the prices realized from the sales could, due to illiquidity, be less than those originally paid by the Fund or less than their fair value. In addition, issuers whose securities are not publicly traded may not be subject to the disclosure and other investor protection requirements that may be applicable if their securities were publicly traded. If any privately placed securities held by the Fund are required to be registered under the securities laws of one or more jurisdictions before being resold, the Fund may be required to bear the expenses of registration.

<u>Convertible Securities.</u> A convertible security is a bond, debenture, note, preferred stock or other security that may be converted into or exchanged for a prescribed amount of common stock or other security of the same or a different issuer or into cash within a particular period of time at a specified price or formula. To the extent that the Fund invests in convertible securities, and the convertible security's investment value is greater than its conversion value, its price will be likely to increase when interest rates fall and decrease when interest rates rise. If the conversion value exceeds the investment value, the price of the convertible security will tend to fluctuate directly with the price of the underlying security. A convertible security generally entitles the holder to receive interest paid or accrued on debt or the dividend paid on preferred stock until the convertible security matures or is redeemed, converted or exchanged. Convertible securities have several unique investment characteristics such as (1) higher yields than common stocks, but lower yields than comparable nonconvertible securities, (2) a lesser degree of fluctuation in value than the underlying stock since they have fixed income characteristics, and (3) the potential for capital appreciation if the market price of the underlying common stock increases.

The Fund has no current intention of converting any convertible securities it may own into equity securities or holding them as an equity investment upon conversion, although it may do so for temporary purposes. A convertible security might be subject to redemption at the option of the issuer at a price established in the convertible security's governing instrument. If a convertible security held by the Fund is called for redemption, the Fund may be required to permit the issuer to redeem the security, convert it into the underlying common stock or sell it to a third party.

<u>Warrants.</u> The Fund may invest in warrants, which are securities permitting, but not obligating, their holder to subscribe for other securities. The Fund may invest in warrants for equity securities that are acquired as units with debt instruments and warrants for debt securities. Warrants do not carry with them the right to dividends or voting rights with respect to the securities that they entitle their holder to purchase, and they do not represent any rights in the assets of the issuer. As a result, an investment in warrants may be considered more speculative than certain other types of investments. In addition, the value of a warrant does not necessarily change with the value of the underlying securities and a warrant ceases to have value if it is not exercised prior to its expiration date. The Fund does not intend to retain in its portfolio any common stock received upon the exercise of a warrant and will sell the common stock as promptly as practicable and in a manner that it believes will reduce its risk of a loss in connection with the sale.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

**<u>Borrowing and Other Forms of Leverage</u>**

The Fund is permitted to borrow money or issue debt securities in an amount up to 33 1/3% of its managed assets (50% of its net assets), issue preferred shares in an amount up to 50% of its managed assets (100% of its net assets) and enter into reverse repurchase agreements or other derivative instruments with leverage embedded in them to the maximum extent permitted by the SEC and/or SEC staff rules, guidance or positions. The Fund may seek to use financial leverage through borrowings from certain financial institutions or other means, and the Fund may at times not seek to use financial leverage. Borrowings create leverage, which is a speculative characteristic. Although the Fund is authorized to borrow, it will do so only when the Adviser believes that borrowing will benefit the Fund after taking into account considerations such as the costs of the borrowing and the likely investment returns on the securities purchased with borrowed monies. The extent to which the Fund will borrow will depend upon the availability of credit. No assurance can be given that the Fund will be able to borrow on terms acceptable to the Fund and the Adviser.

The Fund's custodian will either segregate the assets securing the Fund's borrowing for the benefit of the Fund's lenders or arrangements will be made with a suitable sub-custodian, which may include a lender. If the assets used to secure the borrowing decrease in value, the Fund may be required to pledge additional collateral to the lender in the form of cash or securities to avoid liquidation of those assets. The rights of any lenders to the Fund to receive payments of interest on and repayments of principal of borrowings will be senior to the rights of the Fund's shareholders, and the terms of the Fund's borrowings may contain provisions that limit certain activities of the Fund and could result in precluding the purchase of instruments that the Fund would otherwise purchase.

The Fund may enter into reverse repurchase agreements with any member bank of the Federal Reserve System and any broker/dealer or any foreign bank that has been determined by the Adviser to be creditworthy. Under a reverse repurchase agreement, the Fund would sell securities and agree to repurchase them at a mutually agreed date and price. Reverse repurchase agreements involve the risk that the market value of the securities purchased with the proceeds of the sale of securities received by the Fund may decline below the price of the securities the Fund is obligated to repurchase. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, the buyer or its trustee or receiver may receive an extension of time to determine whether to enforce the Fund's obligations to repurchase the securities, and the Fund's use of proceeds of the reverse repurchase agreement may effectively be restricted pending the decision. Reverse repurchase agreements will be treated as borrowings for purposes of calculating the Fund's borrowing limitation.

The Fund may, in addition to engaging in the transactions described above, borrow money from banks for temporary or emergency purposes (including, for example, clearance of transactions, share repurchases or payments of dividends to shareholders) in an amount not exceeding 5% of the value of the Fund's total assets (including the amount borrowed).

**<u>Hedging</u>**

The Fund is authorized to use various hedging and investment strategies described below to hedge various market risks (such as interest rates, currency exchange rates and broad or specific market movements), to manage the effective maturity or duration of debt

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

instruments held by the Fund, or to seek to increase the Fund's income or gain. Although these strategies regularly are used by some investment companies and other institutional investors, these strategies cannot at the present time be used to a significant extent by the Fund and may not become available for extensive use in the future. At present, for the currencies of most emerging countries, there is not a viable market in which the Fund may engage in these transactions. Techniques and instruments may change, however, over time as new instruments and strategies are developed or regulatory changes occur.

The Fund may purchase and sell financial futures contracts, it may purchase and sell (or write) certain exchange listed and over-the- counter options on emerging country debt instruments, financial futures contracts and fixed income indices and other financial instruments and it may enter into interest rate transactions and currency transactions (collectively, these transactions are referred to in this Prospectus as "Hedging"). The Fund's interest rate transactions may take the form of swaps, caps, floors and collars and the Fund's currency transactions may take the form of currency forward contracts, currency futures contracts, currency swaps and options on currency or currency futures contracts.

Hedging may be used to attempt to protect against possible changes in the market value of securities held in or to be purchased for the Fund's portfolio resulting from securities market or currency exchange rate fluctuations, to protect the Fund's unrealized gains in the value of its portfolio securities, to facilitate the sale of those securities for investment purposes, to manage the effective maturity or duration of the Fund's portfolio, or to establish a position in the derivatives markets as a temporary substitute for purchasing or selling particular securities. The ability of the Fund to utilize Hedging successfully will depend on the Adviser's ability to predict pertinent market movements, which cannot be assured. These skills are different from those needed to select portfolio securities. The Fund is not a "commodity pool" and Hedging transactions involving financial futures and options on financial futures will be purchased, sold or entered into only for bona fide hedging, risk management or other appropriate portfolio management purposes and not for speculative purposes. The use of Hedging in certain circumstances will require that the Fund segregate cash, liquid high grade debt obligations or other assets to the extent the Fund's obligations are not otherwise "covered" through ownership of the underlying security, financial instrument or currency.

The Fund may enter into cross currency hedges, which involve the sale of one currency against the positive exposure to a different currency. Cross currency hedges may be used for hedging purposes or to establish an active exposure to the exchange rate between any two currencies. Hedging the Fund's currency risks involves the risk of mismatching the Fund's obligations under a forward or futures contract with the value of securities denominated in a particular currency. For cross currency hedges, there is an additional risk to the extent that these transactions create exposure to currencies in which the Fund's securities are not denominated.

**<u>When-Issued and Delayed Delivery Securities</u>**

The Fund may purchase securities on a when-issued or delayed delivery basis. Securities purchased on a when-issued or delayed delivery basis are purchased for delivery beyond the normal settlement date at a stated price and yield. No income accrues to the purchaser of a security on a when-issued or delayed delivery basis prior to delivery. Such securities are recorded as an asset and are subject to changes in value based upon changes in the general level of interest rates. Purchasing a security on a when-issued or delayed delivery basis can involve a risk that the market price at the time of delivery may be lower than the agreed-upon purchase price, in

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

which case there could be an unrealized loss at the time of delivery. The Fund will only make commitments to purchase securities on a when-issued or delayed delivery basis with the intention of actually acquiring the securities but may sell them before the settlement date if it is deemed advisable.

**<u>Loans of Portfolio Securities</u>**

The Fund may attempt to increase its income through lending portfolio securities to third parties and receiving interest on such loans. In the event of the bankruptcy of the other party to a securities loan, the Fund could experience delays in recovering the securities it loaned. To the extent that, in the meantime, the value of the securities the Fund has loaned decreases, the Fund could experience a loss.

The Fund may lend securities from its portfolio if liquid assets in an amount at least equal to the current market value of the securities loaned (including accrued interest thereon) plus the interest payable to the Fund with respect to the loan is maintained by the Fund in a segregated account. Any securities that the Fund may receive as collateral will not become a part of its portfolio at the time of the loan and, in the event of a default by the borrower, the Fund will, if permitted by law, dispose of such collateral except for such part thereof that is a security in which the Fund is permitted to invest. During the time securities are on loan, the borrower will pay the Fund any accrued income on those securities, and the Fund may invest the cash collateral and earn additional income or receive an agreed-upon fee from a borrower that has delivered cash equivalent collateral. Cash collateral received by the Fund will be invested in securities in which the Fund is permitted to invest. The value of securities loaned will be marked to market daily. Portfolio securities purchased with cash collateral are subject to possible depreciation. Loans of securities by the Fund will be subject to termination at the Fund's or the borrower's option. The Fund may pay reasonable negotiated fees in connection with loaned securities. The Fund does not currently intend to make loans of portfolio securities with a value in excess of 25% of the value of its total assets.

**<u>Illiquid Investments</u>**

The Fund may invest without limitation in illiquid securities, for which there is a limited trading market and for which a low trading volume of a particular security may result in abrupt and erratic price movements. The Fund may be unable to dispose of its holdings in illiquid securities at then current market prices and may have to dispose of such securities over extended periods of time.

**<u>Investment Funds</u>**

The Fund may invest in investment funds which generally invest in securities in which the Fund is authorized to invest. Under the 1940 Act, the Fund may invest a maximum of 10% of its total assets in the securities of other investment companies. In addition, under the 1940 Act, not more than 5% of the Fund's total assets may be invested in the securities of any one investment company and the Fund may not purchase more than 3% of the voting stock of any such investment company at the time such shares are purchased. The SEC adopted certain regulatory changes and took other actions related to the ability of an investment company to invest in another investment company, including the rescission of exemptive relief issued by the SEC permitting such investments in excess of statutory limits. These regulatory changes may adversely impact the Fund's investment strategies and operations. To the extent the Fund invests in other investment funds, the Fund's shareholders will incur certain duplicative fees and expenses, including investment advisory fees. The Fund's investment in certain investment funds will result in special U.S. federal income tax consequences.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Investment Policy (unaudited) (cont'd)

**<u>Short Sales</u>**

The Fund may from time to time sell securities short without limitation, although presently the Fund does not intend to sell securities short. A short sale is a transaction in which the Fund would sell securities it does not own (but has borrowed) in anticipation of a decline in the market price of the securities. When the Fund makes a short sale, the proceeds it receives from the sale will be held on behalf of a broker until the Fund replaces the borrowed securities. To deliver the securities to the buyer, the Fund will need to arrange through a broker to borrow the securities and, in so doing, the Fund will become obligated to replace the securities borrowed at their market price at the time of replacement, whatever that price may be. The Fund may have to pay a premium to borrow the securities and must pay any dividends or interest payable on the securities until they are replaced.

The Fund's obligation to replace the securities borrowed in connection with a short sale will be secured by collateral deposited with the broker that consists of cash, U.S. Government Securities or other liquid, high grade debt obligations.

Short sales by the Fund involve certain risks and special considerations. Possible losses from short sales differ from losses that could be incurred from a purchase of a security, because losses from short sales may be unlimited, whereas losses from purchases can equal only the total amount invested.

**<u>Pricing of Securities</u>**

Certain of the Fund's securities may be valued using as an input evaluated prices provided by an approved outside pricing service. Prices obtained from these approved sources are monitored and reviewed by the Adviser's Valuation Committee and if not deemed to represent fair value, may be overridden and valued using procedures approved by the Board. The pricing service/vendor may utilize a matrix system or other model incorporating attributes such as security quality, maturity and coupon as the evaluation model parameters, and/or research evaluations by its staff, including review of broker-dealer market price quotations in determining what it believes is the fair valuation of the portfolio securities valued by such pricing service. Pricing services generally value securities assuming orderly transactions of an institutional round lot size, but the Fund may hold or transact in such securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots and the Adviser's valuation policies and procedures include provisions regarding odd lot trade valuation impact monitoring. In certain cases where a valuation is not available from any of the approved pricing services, then a quote from a broker or dealer may be used.

**<u>Determination of NAV</u>**

The Fund determines the NAV per share as of the close of the NYSE (normally 4:00 p.m. Eastern time) on each day that the NYSE is open for business. Shares generally will not be priced on days that the NYSE is closed. If the NYSE is closed due to inclement weather, technology problems or any other reason on a day it would normally be open for business, or the NYSE has an unscheduled early closing on a day it has opened for business, the Fund reserves the right to treat such day as a business day and calculate its NAV as of the normally scheduled close of regular trading on the NYSE for that day, so long as the Adviser believes there generally remains an adequate market to obtain reliable and accurate market quotations. The Fund may elect to price its shares on days when the NYSE is closed but the primary securities markets on which the Fund's securities trade remain open.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited)

**Non-Diversification.**

The Fund is non-diversified, which means that the Fund may invest a greater percentage of its assets in a smaller number of issuers than diversified funds. A fund that is classified as non-diversified may be more susceptible to an adverse event affecting a single issuer or portfolio investment than a diversified portfolio and a decline in the value of that issuer's securities or that portfolio investment may cause the Fund's overall value to decline to a greater degree than a diversified portfolio.

**Emerging Market Securities.**

The Fund invests in emerging market or developing countries, which are countries that major international financial institutions generally consider to be less economically mature than developed nations (such as the United States or most nations in Western Europe). Emerging market or developing countries may be more likely to experience political turmoil or rapid changes in economic conditions than more developed countries, and the financial condition of issuers in emerging market or developing countries may be more precarious than in other countries. Certain emerging market countries may be subject to less stringent requirements regarding accounting, auditing, financial reporting and record keeping and therefore, material information related to an investment may not be available or reliable. Such emerging market countries could also subject the Fund to greater risk associated with the custody of its securities than developed markets, which may adversely affect the Fund. In addition, the Fund's investments (including the companies in which the Fund may invest) in emerging market or developing countries may be subject to expropriation, nationalization and confiscation of assets and property. Furthermore, the Fund is limited in its ability to exercise its legal rights or enforce a counterparty's legal obligations in certain jurisdictions outside of the United States, in particular, in emerging markets countries. In addition, due to jurisdictional limitations, U.S. authorities (e.g., SEC and the U.S. Department of Justice) may be limited in their ability to enforce regulatory or legal obligations in emerging market countries. In addition, emerging market securities generally are less liquid and subject to increased potential for market manipulation and wider price and currency fluctuations than securities issued in more developed countries. These characteristics result in greater risk of price volatility in emerging market or developing countries, which may be heightened by currency fluctuations relative to the U.S. dollar.

**Foreign Securities.**

Investing in foreign securities (including depositary receipts) involves certain special and heightened risks, which are not typically associated with investments in the securities of U.S. issuers, that can increase the chances that the Fund will lose money. Foreign issuers generally are subject to different corporate governance, accounting, auditing and financial reporting standards than U.S. issuers. There may be less information available to the public about foreign issuers. Securities of foreign issuers can be less liquid, experience greater price movements, and may be subject to foreign withholding taxes and/or other taxes, which decreases the yield and/or return of these securities. The Fund may experience losses if the Fund's claim to recover foreign withholding taxes is not successful. In addition, the prices of foreign securities may be susceptible to influence by large traders due to the limited size of many foreign securities markets and there is the risk that news and events unique to a country or region that would not necessarily have an effect on the U.S. economy or similar issuers located in the United States will affect those markets and their issuers and political events in foreign countries may cause market and economic disruptions. Moreover, investments in certain foreign markets that have historically been considered stable may become more volatile and subject to increased risk due to developments and changing conditions in such markets. Also, the growing interconnectivity of global economies and financial markets has increased the probability that adverse developments and conditions in

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

one country or region will affect the stability of economies and financial markets in other countries or regions. In some foreign countries, there is also the risk of government expropriation, excessive or confiscatory taxation, political or social instability, the imposition of currency controls or diplomatic developments that could affect the Fund's investments. There also can be difficulty obtaining and enforcing judgments against issuers in foreign countries. Foreign stock exchanges, broker-dealers and listed issuers may be subject to less government regulation and oversight. Securities registration, custody, and settlement may be subject to delays and legal and administrative uncertainties. If the Fund cannot settle or is delayed in settling a purchase of securities, it may miss attractive investment opportunities and experience other adverse consequences. In some non-U.S. securities markets, custody arrangements for securities provide significantly less protection than custody arrangements in U.S. securities markets, and prevailing custody and trade settlement practices (e.g., the requirement to pay for securities prior to receipt) expose the Fund to credit and other risks it does not have in the United States. In addition, in certain markets the Fund may not receive timely payment for securities or other instruments it has delivered or receive delivery of securities paid for and may be subject to increased risk that the counterparty will fail to make payments or delivery when due or default completely. The cost of investing in foreign securities, including brokerage commissions and custodial expenses, can be higher than the cost of investing in domestic securities. Foreign market trading hours, clearance and settlement procedures, and holiday schedules may also limit the Fund's ability to buy and sell securities during certain periods.

The economies of certain foreign markets may not compare favorably with the economy of the United States with respect to such issues as growth of gross national product, reinvestment of capital, resources and balance of payments position. Certain foreign markets may rely heavily on particular industries or foreign capital and are more vulnerable to diplomatic developments (including regional and global, military or other conflicts), the imposition of economic sanctions against a particular country or countries, organizations, companies, entities and/or individuals, changes in international trading patterns, tariffs, trade barriers and other protectionist or retaliatory measures. International trade barriers or economic sanctions against foreign countries, organizations, companies, entities and/or individuals may adversely affect the Fund's foreign holdings or exposures. Investments in foreign markets may also be adversely affected by less stringent investor protections and disclosure standards, and governmental interventions or other actions such as the imposition of capital controls, nationalization of companies or industries, expropriation of assets or the imposition of punitive taxes. Governmental actions can have a significant effect on the economic conditions in foreign countries, which also may adversely affect the value and liquidity of the Fund's investments. Foreign investment in the securities markets of certain foreign countries is restricted or controlled to varying degrees. For example, 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. The value of holdings traded outside the United States or denominated in foreign currencies (and any hedging transactions in foreign currencies), including underlying securities represented by depositary receipts, will be affected by changes in currency exchange rates. Changes in currency exchange rates may happen separately from, and in response to, events that do not otherwise affect the value of the holding in the issuer's home country. These risks may be intensified for the Fund's investments in securities of issuers located in emerging market or developing countries. Moreover, if a deterioration occurs in a country's balance of payments, the country could impose temporary restrictions on foreign capital remittances. The Fund could also be adversely affected by delays in, or a refusal to grant, any required governmental approval for repatriation, as well as by the application to it of other restrictions on investment. Any of these actions could severely affect security

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

prices, which could result in losses to the Fund and increased transaction costs, impair the Fund's ability to purchase or sell foreign securities (or force the Fund to sell foreign securities) or transfer the Fund's assets back into the United States, or otherwise adversely affect the Fund's operations. Certain foreign investments may become less liquid and decline in value in response to market developments or adverse investor perceptions, or become illiquid after purchase by the Fund, particularly during periods of market, economic, political and social turmoil. Certain foreign investments may become illiquid when, for instance, there are few, if any, interested buyers and sellers or when dealers are unwilling to make a market for certain securities. When the Fund holds illiquid investments, its portfolio may be harder to value.

Economic sanctions or other similar measures may be, and have been, imposed against certain countries, organizations, companies, entities and/or individuals. The Fund's investments in foreign securities are subject to trade laws of and potential economic sanctions by the United States and other jurisdictions. These laws and related governmental actions, including counter-sanctions and other retaliatory measures, can, from time to time, prevent or prohibit the Fund from investing in certain foreign securities. In addition, economic sanctions could prohibit the Fund from transacting with particular countries, organizations, companies, entities and/or individuals by banning them from global payment systems that facilitate cross-border payments, restricting their ability to settle securities transactions, and freezing their assets. The imposition of sanctions and other similar measures also could, among other things, cause a decline in the value of securities issued by the sanctioned country or companies located in, or economically linked to, the sanctioned country, downgrades in the credit ratings of the sanctioned country or companies located in, or economically linked to, the sanctioned country, devaluation of the sanctioned country's currency, and increased market volatility and disruption in the sanctioned country and throughout the world. In addition, economic sanctions or other similar measures could, among other things, effectively restrict or eliminate the Fund's ability to purchase or sell securities, negatively impact the value or liquidity of the Fund's investments, significantly delay or prevent the settlement of the Fund's securities transactions, force the Fund to sell or otherwise dispose of investments at inopportune times or prices, increase the Fund's transaction costs, make the Fund's investments more difficult to value or impair the Fund's ability to meet its investment objective or invest in accordance with its investment strategies. These conditions may be in place for a substantial period of time and enacted with limited advance notice to the Fund.

Even if the Fund does not have significant investments in securities affected by sanctions, sanctions or the threat of sanctions may cause volatility in regional and global markets and may negatively impact the performance of various sectors and industries, as well as companies in other countries, including through global supply chain disruptions, increased inflationary pressures, and reduced economic activity, which could have a negative effect on the Fund's performance. In addition, trade disputes and changes in tariffs may affect investor and consumer confidence and adversely affect financial markets and the broader economy, perhaps suddenly and to a significant degree. The type and severity of sanctions and other similar measures, including counter sanctions and other retaliatory actions, that may be imposed could vary broadly in scope, and their impact is difficult to predict.

In addition, the Holding Foreign Companies Accountable Act (the "HFCAA") could cause securities of a foreign (non-U.S.) company, including American Depositary Receipts, to be delisted from U.S. stock exchanges if the company does not allow the U.S. government to oversee the auditing of its financial information. Although the requirements of the HFCAA apply to securities of all foreign (non-U.S.) issuers, the SEC has thus far limited its enforcement efforts to securities of Chinese companies. If securities are delisted, the

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

Fund's ability to transact in such securities will be impaired, and the liquidity and market price of the securities would likely decline. The Fund may also need to seek other markets in which to transact in such securities, which could increase the Fund's costs.

*Sovereign Debt Obligations.* The Fund may invest in debt obligations known as "sovereign debt," which are obligations of governmental issuers in emerging market or developing countries and industrialized countries. Certain emerging market or developing countries are among the largest debtors to commercial banks and foreign governments. The issuer or governmental authority that controls the repayment of sovereign debt may not be willing or able to repay the principal and/or pay interest when due in accordance with the terms of such obligations. Uncertainty surrounding the level and sustainability of sovereign debt of certain countries, has at times increased volatility in the financial markets. In addition, a number of Latin American countries are among the largest debtors of developing countries and have a long history of reliance on foreign debt. Additional factors that may influence the ability or willingness to service debt include, but are not limited to, a country's cash flow situation, the availability of sufficient foreign exchange on the date a payment is due, the relative size of its debt service burden to the economy as a whole and its government's policy towards the International Monetary Fund, the World Bank and other multilateral agencies. A country whose exports are concentrated in a few commodities or whose economy depends on certain strategic imports could be vulnerable to fluctuations in international prices of these commodities or imports. If a foreign sovereign obligor cannot generate sufficient earnings from foreign trade to service its external debt, it may need to depend on continuing loans and aid from foreign governments, commercial banks and multilateral organizations, and inflows of foreign investment. The commitment on the part of these foreign governments, multilateral organizations and others to make such disbursements may be conditioned on the government's implementation of economic reforms and/or economic performance and the timely service of its obligations. Failure to implement such reforms, achieve such levels of economic performance or repay principal or interest when due may result in the cancellation of such third-parties' commitments to lend funds, which may further impair the foreign sovereign obligor's ability or willingness to timely service its debts. In addition, there is no legal process for collecting on a sovereign debt that a government does not pay or bankruptcy proceeding by which all or part of the sovereign debt that a government entity has not repaid may be collected.

*Depositary Receipts.* A depositary receipt is generally issued by a bank or financial institution and represents the common stock or other equity securities of a foreign company. Depositary receipts involve many of the same risks as those associated with direct investment in foreign securities. In addition, the underlying issuers of certain depositary receipts, particularly unsponsored or unregistered depositary receipts, are under no obligation to distribute shareholder communications to the holders of such receipts, or to pass through to them any voting rights with respect to the deposited securities.

*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 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. Foreign currency forward exchange contracts may be used to seek to protect against uncertainty in the level of future foreign currency exchange rates or to gain or modify exposure to a particular currency. 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

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

and proxy 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.

Investments in foreign currency forward exchange contracts may substantially change the Fund's exposure to currency exchange rates and could result in losses to the Fund if currencies do not perform as the Adviser expects. The Adviser's success in these transactions will depend principally on its ability to predict accurately the future exchange rates between foreign currencies and the U.S. dollar. Foreign currency forward exchange contracts may be used for non-hedging purposes in seeking to meet the Fund's investment objective, such as when the Adviser anticipates that particular non-U.S. currencies will appreciate or depreciate in value, even though securities denominated in those currencies are not then held in the Fund's investment portfolio. Investing in foreign currency forward exchange contracts for purposes of gaining from projected changes in exchange rates, as opposed to hedging currency risks applicable to the Fund's holdings, further increases the Fund's exposure to foreign securities losses. There is no assurance that the Adviser's use of currency derivatives will benefit the Fund or that they will be, or can be, used at appropriate times.

**Fixed-Income Securities.**

Fixed-income securities are securities that pay a fixed or a variable rate of interest until a stated maturity date. Fixed-income securities include U.S. government securities, securities issued by federal or federally sponsored agencies and instrumentalities, corporate bonds and notes, asset-backed securities, mortgage-backed securities, securities rated below investment grade (commonly referred to as "junk bonds" or "high yield/high risk securities"), municipal bonds, loan participations and assignments, zero coupon bonds, convertible securities, Eurobonds, Brady Bonds, Yankee Bonds, repurchase agreements, commercial paper and cash equivalents.

Fixed-income securities are subject to the risk of the issuer's inability to meet principal and interest payments on its obligations (i.e., credit risk) and are subject to price volatility resulting from, among other things, interest rate sensitivity (i.e., interest rate risk), market perception of the creditworthiness of the issuer and general market liquidity (i.e., market risk). For example, a type of fixed-income security in which the Fund may invest are corporate debt obligations. In addition to interest rate, credit and other risks, corporate debt obligations are also subject to factors directly related to the issuer, such as the credit rating of the corporation, the corporation's performance and perceptions of the corporation in the marketplace, and by factors not directly related to the issuer, such as general market liquidity, economic conditions and inflation. The Fund may face a heightened level of interest rate risk in times of monetary policy change and/or uncertainty, such as when the Federal Reserve Board adjusts a quantitative easing program and/or changes rates. A changing interest rate environment increases certain risks, including the potential for periods of volatility, increased redemptions, shortened durations (i.e., prepayment risk) and extended durations (i.e., extension risk). Fixed income and other debt instruments, including mortgage- and other asset-backed securities, are subject to prepayment risk, which is the risk that the principal of such obligation is paid earlier than expected, such as in the case of refinancing. This risk is increased during periods of declining interest rates and prepayments may reduce the Fund's yield or income as a result of reinvesting the income or other proceeds in lower yielding securities or instruments. These investments are also subject to extension risk, which is the risk that the principal of such obligation is paid slower or later than expected. This may negatively affect Fund returns, as the value of the investment decreases when principal payments are made later than expected. This risk is elevated during periods of increasing interest rates. In addition, because principal payments are made later than expected, the investment's duration may extend (and result in increased interest rate risk) and

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

the Fund may be prevented from investing proceeds it would otherwise have received at the higher prevailing interest rates. Prepayments and extensions may result in a security or debt instrument offering less potential for gains during periods of declining interest rates or rising interest rates, respectively.

Securities with longer durations are likely to be more sensitive to changes in interest rates, generally making them more volatile than securities with shorter durations. Lower rated fixed-income securities have greater volatility because there is less certainty that principal and interest payments will be made as scheduled. The Fund may be subject to liquidity risk, which may result from the lack of an active market and the reduced number and capacity of traditional market participants to make a market in fixed-income securities. Fixed-income securities may be called (i.e., redeemed by the issuer) prior to final maturity. If a callable security is called, the Fund may have to reinvest the proceeds at a lower rate of interest.

**Credit and Interest Rate Risk.**

Fixed-income securities, such as bonds, generally are subject to two primary types of risk: credit risk and interest rate risk. Credit risk refers to the possibility that the issuer or guarantor of a security, or counterparty to a transaction, will be unable or unwilling or perceived to be unable or unwilling to make interest payments and/or repay the principal on its debt or otherwise honor its obligations, including the risk of default. The risk of defaults across issuers, guarantors and/or counterparties increases in adverse market and economic conditions, and the degree of credit risk depends on the financial condition of the issuer, guarantor or counterparty and terms of the obligation. Credit ratings may not be an accurate assessment of financial condition, volatility, liquidity or credit risk, as the ratings do not evaluate market risks or necessarily reflect the issuer's, guarantor's or counterparty's current financial condition or the volatility or liquidity of the security. Although credit quality may not accurately reflect the true credit risk of an instrument, a change in the credit rating of an instrument or an issuer, guarantor or counterparty, or the market's perception of the creditworthiness of an instrument or issuer, guarantor or counterparty, can have a rapid, adverse effect on the instrument's value and liquidity and make it more difficult for the Fund to sell at an advantageous price or time. In addition, under certain conditions, there may be an increasing amount of issuers that are unprofitable, have little cash on hand and/or are unable to pay the interest owed on their debt obligations and the number of such issuers may increase if demand for their goods and services falls, borrowing costs rise due to governmental action or inaction or other reasons. The Fund may also be subject to credit spread risk, which is the risk that economic and market conditions, or any actual or perceived credit deterioration, may lead to an increase in credit spreads (i.e., the difference in yield between two securities of similar maturity but different credit quality) and a decline in price of an issuer's securities.

Interest rate risk refers to fluctuations (such as a decline) in the value of a fixed-income security resulting from changes in the general level of interest rates. A wide variety of market and economic factors can cause interest rates to rise or fall, including central bank monetary policy, rising inflation, disinflation or deflation, and changes in general economic conditions. When the general level of interest rates goes up, the prices of most fixed-income securities go down. When the general level of interest rates goes down, the prices of most fixed-income securities go up but the yield or income from new issuances of fixed-income securities generally decreases. Duration measures the time-weighted expected cash flows of a fixed-income security. Securities with longer durations will generally be more sensitive to changes in interest rates than securities with shorter durations. Thus, the Fund's susceptibility to interest rate risk will increase to the extent it has a longer average portfolio duration. The proceeds from prepaid or maturing instruments may have to be

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

reinvested at a lower interest rate or on other less advantageous terms during a declining interest rate environment. In a rising interest rate environment, the duration of fixed-income securities may be extended, thus potentially reducing income and increasing interest rate risk. The Fund may face a heightened level of interest rate risk in times of monetary policy change and/or uncertainty, such as when the Federal Reserve Board adjusts a quantitative easing program and/or changes rates, which may occur at any time based on a range of factors and may be sudden, frequent and significant. For example, during periods when interest rates are low, the Fund's yield (and total return) also may be low or otherwise adversely affected or the Fund may be unable to maintain positive returns, minimize the volatility of the Fund's NAV or pay Fund expenses out of current income.

Monetary policies, and market interest rates, are subject to change at any time and potentially frequently based on a variety of market and economic conditions. It is difficult to accurately predict the pace at which the Federal Reserve Board will change interest rates, or the timing, frequency or magnitude of such changes. The impact on fixed income and other debt instruments and market conditions from interest rate changes, regardless of the cause, could be significant and could adversely affect the Fund and its investments.

Governmental authorities and regulators may enact significant fiscal and monetary policy changes, including providing direct capital infusions into companies, creating new monetary programs and changing interest rates considerably. These actions present heightened risks to debt instruments, and such risks could be even further heightened if these actions are unexpectedly or suddenly reversed or are ineffective in achieving their desired outcomes.

**Foreign Currency.**

Investments in foreign securities may be denominated in foreign currencies. The value of foreign currencies may fluctuate relative to the value of the U.S. dollar or other applicable foreign currency. Since the Fund may invest in such non-U.S. dollar-denominated securities, and therefore may convert the value of such securities into U.S. dollars, changes in currency exchange rates can increase or decrease the U.S. dollar value of the Fund's assets. Currency exchange rates may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates and the overall economic health of the issuer. Devaluation of a currency by a country's government or banking authority also will have a significant impact on the value of any investments denominated in that currency. The Adviser and/or Sub-Adviser may use derivatives to seek to reduce this risk. The Adviser and/or Sub-Adviser may in their discretion choose not to hedge against currency risk. In addition, certain market conditions may make it impossible or uneconomical to hedge against currency risk.

**Chinese Fixed-Income Investments.**

The Fund may invest in Chinese fixed-income securities traded in the China Interbank Bond Market ("CIBM") through the Bond Connect program ("Bond Connect"), which allows non-Chinese-domiciled investors (such as the Fund) to purchase certain fixed- income investments available in China's interbank bond market. Bond Connect utilizes the trading infrastructure of both Hong Kong and China. Bond Connect therefore is not available when there are trading holidays in Hong Kong. As a result, prices of securities purchased through Bond Connect may fluctuate at times when the Fund is unable to add to or exit its position. Securities offered via Bond Connect may lose their eligibility for trading through the program at any time, in which case they may be sold but could no longer be purchased through Bond Connect. Because Bond Connect is relatively new, its effects on the Chinese interbank bond are

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

uncertain. In addition, the trading, settlement and information technology systems required for non-Chinese investors in Bond Connect are relatively new and continuing to evolve. In the event that the relevant systems do not function properly, trading via Bond Connect could be disrupted, adversely affecting the ability of the Fund to acquire or dispose of securities through Bond Connect in a timely manner, which in turn could adversely impact the Fund's performance.

Bond Connect is subject to regulation by both Hong Kong and China. There can be no assurance that further regulations will not affect the availability of securities in the program, the frequency of redemptions or other limitations. In China, Bond Connect securities are held on behalf of ultimate investors (such as the Fund) by the Hong Kong Monetary Authority Central Money Markets Unit via accounts maintained with China's two clearinghouses for fixed-income securities. While Chinese regulators have affirmed that the ultimate investors hold a beneficial interest in Bond Connect securities, the law surrounding such rights continues to develop, and the mechanisms that beneficial owners may use to enforce their rights are untested and therefore pose uncertain risks, with legal and regulatory risks potentially having retroactive effect. Further, courts in China have limited experience in applying the concept of beneficial ownership, and the law surrounding beneficial ownership will continue to evolve as they do so. There is accordingly a risk that, as the law is tested and developed, the Fund's ability to enforce its ownership rights may be negatively impacted, which could expose the Fund to the risk of loss on such investments. The Fund may not be able to participate in corporate actions affecting Bond Connect securities due to time constraints or for other operational reasons, and payments of distributions could be delayed. Market volatility and potential lack of liquidity due to low trading volume of certain bonds may result in prices of those bonds fluctuating significantly; in addition, the bid-ask spreads of the prices of such securities may be large, and the Fund may therefore incur significant costs and suffer losses when selling such investments. More generally, bonds traded in CIBM may be difficult or impossible to sell, which could further impact the Fund's ability to acquire or dispose of such securities at their expected prices. Bond Connect trades are settled in Renminbi ("RMB"), the Chinese currency, and investors must have timely access to a reliable supply of RMB in Hong Kong, which cannot be guaranteed. Moreover, securities purchased through Bond Connect generally may not be sold, purchased or otherwise transferred other than through Bond Connect in accordance with applicable rules. Finally, uncertainties in the Chinese tax rules governing taxation of income and gains from investments via Bond Connect could result in unexpected tax liabilities for the Fund. The withholding tax treatment of dividends and capital gains payable to overseas investors currently is unsettled.

Under the prevailing applicable Bond Connect regulations, the Fund participates in Bond Connect through an offshore custody agent, registration agent or other third parties (as the case may be), who would be responsible for making the relevant filings and account opening with the relevant authorities. The Fund is therefore subject to the risk of default or errors on the part of such agents.

**Market and Geopolitical Risk**

The value of your investment in the Fund is based on the values of the Fund's investments, which change due to economic and other events that affect the U.S. and global markets generally, as well as those that affect or are perceived or expected to affect particular regions, countries, industries, companies, issuers, sectors, asset classes or governments.

Price movements, sometimes called volatility, may be greater or less depending on the types of securities the Fund owns and the markets in which the securities trade. Volatility and disruption in financial markets and economies may be sudden and unexpected,

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

expose the Fund to greater risk, including risks associated with reduced market liquidity and fair valuation, and adversely affect the Fund's operations. For example, the Adviser potentially will be prevented from executing investment decisions at an advantageous time or price as a result of any domestic or global market disruptions and reduced market liquidity may impact the Fund's ability to sell securities to meet redemptions (i.e., increase the risk that the Fund will not be able to pay redemption proceeds within the allowable time period). In addition, no active trading market may exist for certain investments held by the Fund, which may impair the ability of the Fund to sell or to realize the current valuation of such investments in the event of the need or decision to liquidate such assets.

The increasing interconnectivity between global economies and markets increases the likelihood that events or conditions in one region or market, or with respect to one company, may adversely impact other companies and other issuers, including those in a different country, region, sector, industry, or market. For example, adverse developments in the banking or financial services sector could impact companies operating in various sectors or industries and adversely impact the Fund's investments. Securities in the Fund's portfolio may underperform or otherwise be adversely affected due to inflation (or expectations for inflation), deflation (or expectations for deflation), interest rates (or changes in interest rates), global demand for particular products or resources, market or financial system instability or uncertainty, embargoes, the threat and/or actual imposition of tariffs, sanctions and other trade barriers, natural disasters and extreme weather events, health emergencies (such as epidemics and pandemics), terrorism, regulatory events and governmental or quasi-governmental actions. The occurrence of global events, such as terrorist attacks around the world, natural disasters, health emergencies, social and political (including geopolitical) discord and tensions or debt crises and downgrades, among others, may result in increased market volatility and may have long term effects on both the U.S. and global financial markets. Inflation rates may change frequently and significantly because of various factors, including unexpected shifts in the domestic or global economy and changes in monetary or economic policies (or expectations that these policies may change). Changes in inflation rates or expected inflation rates may adversely affect market and economic conditions, an issuer's financial condition, the Fund's investments and an investment in the Fund. The market price of debt securities generally falls as inflation increases because the purchasing power of the future income and repaid principal is expected to be worth less when received by the Fund. The risk of inflation is greater for debt instruments with longer maturities and especially those that pay a fixed rather than variable interest rate.

Other financial, economic and other global market and social developments or disruptions may result in similar adverse circumstances, and it is difficult to predict when similar events affecting the U.S. or global financial markets or economies may occur, the effects that such events may have and the duration of those effects (which may last for extended periods). In general, the securities or other instruments that the Adviser believes represent an attractive investment opportunity or in which the Fund seeks to invest may be unavailable entirely or in the specific quantities sought by the Fund. As a result, the Fund may need to obtain the desired exposure through a less advantageous investment, forgo the investment at the time or seek to replicate the desired exposure through a derivative transaction or investment in another investment vehicle. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund's portfolio. There is a risk that you may lose money by investing in the Fund.

Social, political, economic and other conditions and events, such as war, natural disasters, health emergencies (e.g., epidemics and pandemics), terrorism, conflicts, social unrest, recessions, inflation, interest rate changes, the imposition of tariffs, trade restrictions or similar actions by the U.S. or foreign governments (or retaliatory measures taken in response to such actions) and supply chain

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

disruptions could reduce consumer demand or economic output, result in market closures, travel restrictions or quarantines, and generally have a significant impact on economies, financial markets, issuers and the Adviser's investment advisory activities and services of other service providers, which in turn could adversely affect the Fund's investments and other operations. Government and other public debt, including municipal obligations, can be adversely affected by changes in local and global economic conditions, including those that result in increased debt levels. Although high levels of government and other public debt do not necessarily indicate or cause economic problems, high levels of debt may create certain systemic risks if sound debt management practices are not implemented. A high debt level may increase market pressures to meet an issuer's funding needs, which may increase borrowing costs and cause a government or public or municipal entity to issue additional debt, thereby increasing the risk of refinancing. A high debt level also raises concerns that the issuer may be unable or unwilling to repay the principal or interest on its debt, which may adversely impact instruments held by the Fund that rely on such payments.

Governmental and quasi-governmental responses to certain economic or other conditions may lead to increasing government and other public debt, particularly when such responses are unprecedented, which heighten these risks. Unsustainable debt levels can lead to declines in the value of currency, and can prevent a government from implementing effective counter-cyclical fiscal policy during economic downturns, can generate or contribute to an economic downturn or cause other adverse economic or market developments, such as increases in inflation or volatility. Increasing government and other public debt may adversely affect issuers, obligors, guarantors or instruments across a variety of asset classes.

Global events may negatively impact broad segments of businesses and populations, cause a significant negative impact on the price and performance of the Fund's investments, reduce market liquidity, adversely affect and increase the volatility of markets and the Fund's share price, exacerbate pre-existing political, social, financial and economic risks to the Fund and cause overall declines in the U.S. and global markets. The Fund's operations may be interrupted as a result, which may contribute to the negative impact on investment performance. In addition, governments, their regulatory agencies, or self-regulatory organizations may take actions (including monetary and/or fiscal actions intended to stimulate or stabilize the global economy) that affect the instruments in which the Fund invests, or the issuers of such instruments, in ways that could have a significant negative impact on the Fund's investment performance. Monetary and/or fiscal actions taken by U.S. or foreign governments may not be effective and could lead to increased market volatility. In addition, government actions (such as changes to interest rates) could have unintended economic and market consequences that adversely affect the Fund's investments. The frequency and magnitude of resulting changes in the value of the Fund's investments cannot be predicted.

**Derivatives.**

The Fund may, but is not required to, use derivatives and other similar instruments for a variety of purposes, including hedging, risk management, portfolio management or to seek to earn income. Derivative instruments used by the Fund will be counted towards the Fund's exposure in the types of securities listed herein to the extent they have economic characteristics similar to such securities. A derivative is a financial instrument 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. Derivatives and other similar instruments that create synthetic exposure often are subject to risks similar to those of the underlying asset or

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

instrument and may be subject to 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, risks arising from margin and payment requirements, risks arising from mispricing or valuation complexity and operational and legal risks. 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. Investments in currency derivatives may substantially change the Fund's exposure to currency exchange rates and could result in losses to the Fund if currencies do not perform as the Adviser expects. Foreign currency forward exchange contracts and currency futures and options contracts create exposure to currencies in which the Fund's securities are not denominated.

The derivative instruments and techniques that the Fund may use include:

*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. While the value of a futures contract tends to increase or decrease in tandem with the value of the underlying instrument, differences between the futures market and the market for the underlying asset may result in an imperfect correlation. 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.

*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, foreign currency, or contract, such as a swap agreement or futures contract, on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date 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, swap, foreign currency, or futures contract on the underlying instrument or foreign currency, at an agreed-upon price during a period of time or on a specified date 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

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

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.

*Index Options.* Call and put options on indices operate similarly to options on securities. Rather than the right to buy or sell a single security at a specified price, options on an index give the holder the right to receive, upon exercise of the option, an amount of cash determined by reference to the difference between the value of the underlying index and the strike price. The underlying index may be a broad-based index or a narrower market index. Unlike many options on securities, all settlements are in cash. The settlement amount, which the writer of an index option must pay to the holder of the option upon exercise, is generally equal to the difference between the strike price of the option and the value of the underlying index, multiplied by a specified multiplier. The multiplier determines the size of the investment position the option represents. Gain or loss to the Fund on index options transactions will depend, in part, on price movements of the underlying index generally or in a particular segment of the index rather than price movements of individual components of the index. As with other options, the Fund may close out its position in index options through closing purchase transactions and closing sale transactions provided that a liquid secondary market exists for such options.

*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. Certain swaps have begun trading on exchanges or swap execution facilities. Exchange trading is expected to increase liquidity of swaps trading. 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 Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulatory developments require the clearing of certain standardized swap transactions. Swaps subject to mandatory central clearing must be traded on an exchange or swap execution facility unless no exchange or swap execution facility "makes the swap available to trade." The Fund may pay fees or incur costs each time it enters into, amends or terminates a swap agreement.

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 by a third-party on the debt obligation. If no default occurs, the Fund would have paid to the counterparty a periodic stream of payments

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

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 a third-party on the debt obligation.

*Currency Derivatives.* Investments in currency derivatives may substantially change the Fund's exposure to currency exchange rates and could result in losses to the Fund if currencies do not perform as the Adviser expects. In addition, investments in currency derivatives, to the extent that they reduce the Fund's exposure to currency risks, may also reduce the Fund's ability to benefit from favorable changes in currency exchange rates. The Fund is not required to hedge any portfolio holding with the use of currency derivatives. Accordingly, Fund shareholders would bear the risk of currency fluctuations with respect to unhedged portfolio positions.

Foreign currency derivatives may involve, for example, the purchase of foreign currencies for U.S. dollars or the maintenance of short positions in foreign currencies. Foreign currency derivatives may involve the Fund agreeing to exchange an amount of a currency it does not currently own for another currency at a future date. The Fund would typically engage in such a transaction in anticipation of a decline in the value of the currency it sells relative to the currency that the Fund has contracted to receive in the exchange. The Adviser's success in these transactions will depend principally on its ability to predict accurately the future exchange rates between foreign currencies and the U.S. dollar.

Foreign currency forward exchange contracts and currency futures and options contracts may be used for non-hedging purposes in seeking to meet the Fund's investment objective, such as when the Adviser anticipates that particular non-U.S. currencies will appreciate or depreciate in value, even though securities denominated in those currencies are not then held in the Fund's investment portfolio. Investing in foreign currencies for purposes of gaining from projected changes in exchange rates, as opposed to hedging currency risks applicable to the Fund's holdings, further increases the Fund's exposure to foreign securities losses. There is no assurance that the Adviser's use of currency derivatives will benefit the Fund or that they will be, or can be, used at appropriate times.

*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 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.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

*Regulatory Matters.* Regulatory developments affecting the exchange-traded and OTC derivatives markets may impair a Fund's ability to manage or hedge its investment portfolio through the use of derivatives. Rule 18f-4 under the Investment Company Act of 1940 regulates the use of derivatives, short sales, reverse repurchase agreements and certain other transactions by registered investment companies. These requirements may limit the ability of a Fund to use derivatives and reverse repurchase agreements and similar financing transactions as part of its investment strategies. Rule 18f-4 requires the Fund to trade derivatives and other transactions that create future payment or delivery obligations subject to a value-at-risk ("VaR") leverage limit, certain derivatives risk management program and reporting requirements. Generally, these requirements apply unless a fund qualifies as a "limited derivatives user." Under Rule 18f-4, when the Fund trades reverse repurchase agreements or similar financing transactions, including certain tender option bonds, it needs to aggregate the amount of indebtedness associated with the reverse repurchase agreements or similar financing transactions with the aggregate amount of any other senior securities representing indebtedness when calculating the Fund's asset coverage ratio or treat all such transactions as derivatives transactions. Reverse repurchase agreements or similar financing transactions aggregated with other indebtedness do not need to be included in the calculation of whether the Fund is a limited derivatives user, but for funds subject to the VaR testing, reverse repurchase agreements and similar financing transactions must be included for purposes of such testing whether treated as derivatives transactions or not. The SEC also provided guidance in connection with Rule 18f-4 regarding use of securities lending collateral that may limit the Fund's securities lending activities. In addition, under Rule 18f-4, the Fund is permitted to invest in a security on a when-issued or forward-settling basis, or with a non-standard settlement cycle, and the transaction will be deemed not to involve a senior security under the 1940 Act, provided that (i) the Fund intends to physically settle the transaction and (ii) the transaction will settle within 35 days of its trade date (the "Delayed-Settlement Securities Provision"). The Fund may otherwise engage in such transactions that do not meet the conditions of the Delayed-Settlement Securities Provision so long as the Fund treats any such transaction as a "derivatives transaction" for purposes of compliance with Rule 18f-4. Furthermore, under Rule 18f-4, the Fund will be permitted to enter into an unfunded commitment agreement, and such unfunded commitment agreement will not be subject to the asset coverage requirements under the 1940 Act, if the Fund reasonably believes, at the time it enters into such agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all such agreements as they come due. These requirements may increase the cost of the Fund's investments and cost of doing business, which could adversely affect investors.

The Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules promulgated thereunder may limit the ability of the Fund to enter into one or more exchange-traded or OTC derivatives transactions.

The Fund's use of derivatives may also be limited by the requirements of the Internal Revenue Code of 1986, as amended, for qualification as a regulated investment company for U.S. federal income tax purposes.

In December 2023, the SEC adopted rule amendments providing that any covered clearing agency ("CCA") for U.S. Treasury securities require its direct participants (which generally would be a bank or broker-dealer) to submit for clearance and settlement all eligible secondary market transactions in U.S. Treasury securities to which the direct participant is a counterparty. The clearing mandate includes in its scope all repurchase or reverse repurchase agreements of such direct participants collateralized by U.S. Treasury securities (collectively, "Treasury repo transactions") of a type accepted for clearing by a registered CCA, including both bilateral

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

Treasury repo transactions and triparty Treasury repo transactions where a bank agent provides custody, collateral management and settlement services.

The Treasury repo transactions of registered funds with any direct participants of a CCA will be subject to the mandatory clearing requirement. Currently, the Fixed Income Clearing Corporation ("FICC") is the only CCA for U.S. Treasury securities.

On February 25, 2025, the SEC extended the compliance date applicable to Treasury repo transactions. Under the extended compliance date, market participants, absent an exemption, will be required to clear Treasury repo transactions under the rule as of June 30, 2027. The clearing mandate is expected to result in the Fund being required to clear all or substantially all of its Treasury repo transactions as of the compliance date, and the Fund may incur costs in connection with entering into new agreements (or amending existing agreements) with direct participants of a CCA and potentially other market participants and taking other actions to comply with the new requirements. In addition, upon the compliance date taking effect, the costs and benefits of entering into Treasury repo transactions to the Fund may be impacted as compared to Treasury repo transactions the Fund may enter prior to the compliance date. The Adviser will monitor developments in the Treasury repo transactions market as the implementation period progresses.

**Private Placements and Restricted Securities.**

The Fund's investments may include privately placed and restricted securities, which are generally subject to resale or transfer restrictions or prohibitions as a matter of contract and/or under applicable U.S. federal securities laws, including Rule 144A under the Securities Act of 1933, as amended. Privately placed and restricted securities may not be listed on an exchange and may have no active trading market. Because there may be relatively few potential or interested purchasers for privately placed or restricted securities, especially under adverse market or economic conditions or in the event of adverse changes in the financial condition of the issuer, the Fund may be unable to dispose of such securities promptly or may be able to sell privately placed securities only at disadvantageous times or prices.

There is no assurance that a liquid market will exist for privately placed and restricted securities and these securities could have the effect of increasing the level of Fund illiquidity. In addition, the market for certain investments deemed liquid at the time of purchase may become illiquid under adverse market or economic conditions. The illiquidity of the market, as well as the lack of publicly available information regarding these securities, including readily available market quotations, may also adversely affect the ability to arrive at a fair value for certain securities at certain times and could make it difficult for the Fund to sell certain securities. Additionally, the Fund may be unable to sell a privately placed or restricted security if the Adviser or its affiliates receive material non-public information about the security's issuer. If the Fund is forced to sell an illiquid security to fund redemptions or for other cash needs, it may be forced to sell the security at a loss or for less than its fair value. There is typically less information available about issuers of private placements and restricted securities and there is no assurance that the information obtained by the Adviser is reliable. In addition, private placements and restricted securities may involve a high degree of business and financial risk, which may result in substantial losses to the Fund.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

**Loan Participations and Assignments.**

Loan participations are interests in loans or other direct debt instruments relating to amounts owed by a corporate, governmental or other borrower to another party. These loans may represent amounts owed to lenders or lending syndicates, to suppliers of goods or services (trade claims or other receivables), or to other parties ("Lenders") and may be fixed-rate or floating rate. These loans also may be arranged through private negotiations between an issuer of sovereign debt obligations and Lenders.

The Fund's investments in loans may be in the form of a participation in loans ("Participations") and assignments of all or a portion of loans ("Assignments") from third parties. In the case of a Participation, the Fund will have the right to receive payments of principal, interest and any fees to which it is entitled only from the Lender selling the Participation and only upon receipt by the Lender of the payments from the borrower. In the event of an insolvency of the Lender selling a Participation, the Fund may be treated as a general creditor of the Lender and may not benefit from any set-off between the Lender and the borrower. Certain Participations may be structured in a manner designed to avoid purchasers of Participations being subject to the credit risk of the Lender with respect to the Participation. Even under such a structure, in the event of a Lender's insolvency, the Lender's servicing of the Participation may be delayed and the assignability of the Participation may be impaired. A Fund will acquire Participations only if the Lender interpositioned between a Fund and the borrower is determined by the Adviser to be creditworthy.

**Cybersecurity Risk.**

With the increased use of technologies such as the internet to conduct business, the Fund, the Adviser, authorized participants, service providers and the relevant listing exchange, as applicable, are susceptible to operational, information security and related "cyber" risks both directly and through the service providers. Similar types of cybersecurity risks are also present for issuers of securities in which the Fund invests, which could result in material adverse consequences for such issuers and may cause the Fund's investment in such issuers to lose value. In general, cyber incidents can result from deliberate attacks or unintentional events. Cyber incidents include, but are not limited to, gaining unauthorized access to digital systems (e.g., through "hacking" or malicious software coding) for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. Cyberattacks may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on websites (i.e., efforts to make network services unavailable to intended users). Recently, geopolitical tensions may have increased the scale and sophistication of deliberate attacks, particularly those from nation-states or from entities with nation-state backing.

Cybersecurity failures by, or breaches of, the systems of the Adviser, distributor and other service providers (including, but not limited to, index and benchmark providers, fund accountants, custodians, transfer agents and administrators), exchanges, market participants, market makers, authorized participants or the issuers of securities in which the Fund invests, as applicable, have the ability to cause disruptions and impact business operations, potentially resulting in: financial losses, interference with the Fund's ability to calculate its NAV, disclosure of confidential trading information, impediments to trading, submission of erroneous trades or erroneous creation or redemption orders, the inability of the Fund or its service providers to transact business, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs. In addition, cyberattacks may render records of Fund assets and transactions, shareholder ownership of Fund shares, and other data integral to the functioning of the Fund inaccessible, inaccurate or incomplete. Substantial costs may be incurred by the Fund in order

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

to resolve or prevent cyber incidents in the future. While the Fund has established business continuity plans in the event of, and risk management systems to prevent, such cyber incidents, there are inherent limitations in such plans and systems, including the possibility that certain risks have not been identified, that prevention and remediation efforts will not be successful or that cyberattacks will go undetected. Furthermore, the Fund cannot control the cybersecurity plans and systems put in place by service providers to the Fund, issuers in which the Fund invests, market makers or authorized participants, as applicable. The Fund and its shareholders could be negatively impacted as a result.

**Regulatory and Legal Risk.**

U.S. and non-U.S. governmental agencies and other regulators regularly implement additional (or amended) regulations and legislators pass new laws (or amend existing laws) that affect the investments held by the Fund, the strategies used by the Fund or the level of regulation or taxation applying to the Fund (such as regulations related to investments in derivatives and other transactions). These regulations and laws impact the investment strategies, performance, costs and operations of the Fund or taxation of shareholders.

**Loans of Portfolio Securities.**

The Fund may lend its portfolio securities to brokers, dealers, banks and other institutional investors. By lending its portfolio securities, the Fund attempts to increase its net investment income through the receipt of interest on the cash collateral with respect to the loan or fees received from the borrower in connection with the loan. Any gain or loss in the market price of the securities loaned that might occur during the term of the loan would be for the account of the Fund. The Fund employs an agent to implement the securities lending program and the agent receives a fee from the Fund for its services. The Fund will not lend more than 33 1/3% of the value of its total assets.

The Fund may lend its portfolio securities so long as the terms, structure and the aggregate amount of such loans are not inconsistent with the 1940 Act or the rules and regulations or interpretations of the SEC thereunder, which currently require that (i) the borrower pledge and maintain with the Fund collateral consisting of liquid, unencumbered assets having a value not less than 100% of the value of the securities loaned; (ii) the borrower adds to such collateral whenever the price of the securities loaned rises (i.e., the borrower "marks-to-market" on a daily basis); (iii) the loan be made subject to termination by the Fund at any time; and (iv) the Fund receives a reasonable return on the loan (which may include the Fund investing any cash collateral in interest bearing short-term investments), any distributions on the loaned securities and any increase in their market value. In addition, voting rights may pass with the loaned securities, but the Fund will retain the right to call any security in anticipation of a vote that the Adviser deems material to the security on loan.

Loans of securities involve a risk that the borrower may fail to return the securities or may fail to maintain the proper amount of collateral, which may result in a loss of money by the Fund. There may be risks of delay and costs involved in recovery of securities or even loss of rights in the collateral should the borrower of the securities fail financially. These delays and costs could be greater for foreign securities. However, loans will be made only to borrowers deemed by the Adviser to be creditworthy and when, in the judgment of the Adviser, the income that can be earned from such securities loans justifies the attendant risk. All relevant facts and circumstances, including the creditworthiness of the broker, dealer, bank or institution, will be considered in making decisions with

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

respect to the lending of securities, subject to review by the Fund's Board of Directors. The Fund also bears the risk that the reinvestment of collateral will result in a principal loss. Finally, there is the risk that the price of the securities will increase while they are on loan and the collateral will not be adequate to cover their value.

**When-Issued Securities, Delayed Delivery Securities and Forward Commitments.**

The Fund may purchase or sell securities that it is entitled to receive on a when-issued basis. The Fund may also purchase or sell securities on a delayed delivery basis or through a forward commitment (including on a TBA (to be announced) basis).

These transactions involve the purchase or sale of securities by the Fund at an established price with payment and delivery taking place in the future. The Fund enters into these transactions to obtain what is considered an advantageous price to the Fund at the time of entering into the transaction. For example, the Fund may invest in TBAs, which settle on a delayed delivery basis. In a TBA transaction, the seller agrees to deliver the MBS for an agreed upon price on an agreed upon future date, but makes no guarantee as to which or how many securities are to be delivered. Accordingly, the Fund's investments in TBAs are subject to risks such as failure of the counterparty to perform its obligation to deliver the security, the characteristics of a security delivered to the Fund may be less favorable than expected and the security the Fund buys will lose value prior to its delivery. Investments in TBAs may give rise to a form of leverage. Leverage may cause the Fund to be more volatile than if the Fund had not been leveraged and may increase the impact that gains (losses) have on the Fund. Further, TBAs may increase the Fund's portfolio turnover rate. FINRA rules include mandatory margin requirements that will require the Fund to post collateral in connection with its TBA transactions, which could increase the cost of TBA transactions to the Fund and impose added operational complexity.

The Fund's purchase of other securities on a when-issued, delayed delivery or through a forward commitment basis are subject to similar risks, including counterparty risk and that the value of securities in these transactions on the delivery date may be less than the price paid by the Fund to purchase the securities. In addition, there can be no assurance that a security purchased on a when-issued basis will be issued. When the Fund has sold a security on a when-issued, delayed delivery, or forward commitment basis, the Fund does not benefit if the value of the security appreciates above the sale price during the commitment period and the Fund is subject to failure of the counterparty to pay for the securities.

**Borrowing for Investment Purposes.**

Borrowing for investment purposes creates leverage which is a speculative characteristic. The Fund will borrow only when the Adviser believes that borrowing will benefit the Fund after taking into account considerations such as the costs of borrowing and the likely investment returns on securities purchased with borrowed funds. Borrowing by the Fund will create the opportunity for increased net income but, at the same time, will involve special risk considerations. Leverage that results from borrowing will magnify declines as well as increases in the Fund's NAV and net yield. The Fund that engages in borrowing expects that all of its borrowing will be made on a secured basis. The Fund will either segregate the assets securing the borrowing for the benefit of the lenders or arrangements will be made with a suitable sub-custodian. If assets used to secure the borrowing decrease in value, the Fund may be required to pledge additional collateral to the lender in the form of cash or securities to avoid liquidation of those assets.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

**Repurchase Agreements.**

Repurchase agreements are fixed-income securities in the form of agreements backed by collateral. These agreements typically involve the acquisition by a Fund of securities from the selling institution (such as a bank or a broker-dealer), coupled with the agreement that the selling institution will repurchase the underlying securities at a specified price and at a fixed time in the future (or on demand, if applicable). The underlying securities which serve as collateral for the repurchase agreements entered into by the Fund may include U.S. government securities, municipal securities, corporate debt obligations, convertible securities, and common and preferred stock and may be of below investment grade quality. These securities are marked-to-market daily in order to maintain full collateralization (typically purchase price plus accrued interest). The use of repurchase agreements involves certain risks. For example, if the selling institution defaults on its obligation to repurchase the underlying securities at a time when the value of the securities has declined, a Fund may incur a loss upon disposition of them. The risk of such loss may be greater when utilizing collateral other than U.S. government securities. In the event of an insolvency or bankruptcy by the selling institution, the Fund's right to control the collateral could be affected and result in certain costs and delays. Additionally, if the proceeds from the liquidation of such collateral after an insolvency were less than the repurchase price, the Fund could suffer a loss. Fund procedures are followed that are designed to minimize such risks.

**Reverse Repurchase Agreements.**

Under a reverse repurchase agreement, the Fund sells a security and promises to repurchase that security at an agreed-upon future date and price. The price paid to repurchase the security reflects interest accrued during the term of the agreement. Reverse repurchase agreements may be entered into for, among other things, obtaining leverage, facilitating short-term liquidity or when the Adviser expects that the interest income to be earned from the investment of the transaction proceeds will be greater than the related interest expense. Reverse repurchase agreements may be viewed as a speculative form of borrowing called leveraging. Furthermore, reverse repurchase agreements involve the risks that (i) the interest income earned in the investment of the proceeds will be less than the interest expense, (ii) the market value of the securities retained in lieu of sale by the Fund may decline below the price of the securities the Fund has sold but is obligated to repurchase, (iii) the market value of the securities sold will decline below the price at which the Fund is required to repurchase them and (iv) the securities will not be returned to the Fund.

In addition, the use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations. Leverage, including borrowing, may cause the Fund to be more volatile than if the Fund had not been leveraged. This is because leverage tends to exaggerate the effect of any increase or decrease in the value of the Fund's portfolio securities. All forms of borrowing (including reverse repurchase agreements) are limited in the aggregate and may not exceed 33 1/3% of the Fund's total assets, except as permitted by law or SEC requirements.

**Short Sales.**

A short sale is a transaction in which the Fund sells securities that it owns or has the right to acquire at no added cost (i.e., "against the box") or does not own (but has borrowed) in anticipation of a decline in the market price of the securities. To deliver the securities to the buyer, the Fund arranges through a broker to borrow the securities and, in so doing, the Fund becomes obligated to replace the

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

securities borrowed at their market price at the time of replacement. When selling short, the Fund intends to replace the securities at a lower price and therefore, profit from the difference between the cost to replace the securities and the proceeds received from the sale of the securities. When the Fund makes a short sale, the proceeds it receives from the sale will be held on behalf of a broker until the Fund replaces the borrowed securities. The Fund may have to pay a premium to borrow the securities and must pay any dividends or interest payable on the securities until they are replaced.

The Fund's obligation to replace the securities borrowed in connection with a short sale will be secured by collateral deposited with the broker that consists of cash or other liquid securities. Short sales by the Fund involve certain risks and special considerations. If the Adviser incorrectly predicts that the price of the borrowed security will decline, the Fund will have to replace the securities with securities with a greater value than the amount received from the sale. As a result, losses from short sales differ from losses that could be incurred from a purchase of a security, because losses from short sales may be unlimited, whereas losses from purchases can equal only the total amount invested.

**Sukuk.**

The Fund may invest in Sukuk, which are foreign or emerging market securities based on Islamic principles. Sukuk are securities with cash flows similar to conventional bonds, issued by an issuer, which is usually a special purpose vehicle ("SPV") incorporated by the sovereign or corporate entity seeking financing, to obtain an upfront payment in exchange for an income stream and a future promise to return capital. Sukuk are designed to comply with Islamic religious law, commonly known as Sharia and, accordingly, do not pay interest. Instead, Sukuk securities represent a contractual obligation of the issuer or issuing vehicle to make periodic distributions (such as income or other periodic payments) to the investor on pre-defined distribution dates and to return capital on a specified date, and such contractual payment obligation is linked to the issuer or issuing vehicle and not from interest on the investor's money for Sukuk. Sukuk may be linked to income streams relating to tangible assets, but even in respect of such Sukuk, the Fund will not have a direct interest in, or recourse to, the underlying asset or pool of assets.

In the event of a default or the insolvency of the issuer, the resolution process can be expected to take longer than for conventional bonds. Sukuk remain relatively new instruments, and evolving interpretations of Islamic law by courts, regulators and prominent scholars may affect liquidity, prices, free transferability and the ability and willingness of issuers of Sukuk to make payments in ways that cannot now be foreseen. In addition, issuers have, in the past, challenged the Islamic compliance of certificates. If any such or analogous events should occur, the Fund may be required to hold its Sukuk for longer than intended, even if their value or other condition is deteriorating. In such circumstances, the Fund may not be able to achieve expected returns on its investment in Sukuk or any returns at all.

Issuers of Sukuk may include SPVs established by corporations and financial institutions, foreign governments and agencies of foreign governments. Underlying assets may include, without limitation, real estate (developed and undeveloped), lease contracts, forward-sale commodity contracts and machinery and equipment. Although the Sukuk market has grown significantly in recent years, there may be times when the market is illiquid and where it is difficult for the Fund to make an investment in or dispose of Sukuk at the desired time or price. Sukuk involve many of the same risks that conventional bonds incur, such as credit risk and interest rate risk, as well as

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

the risks associated with foreign or emerging market securities. In addition to these risks, there are certain risks specific to Sukuk, such as those relating to their structures. Furthermore, the global Sukuk market is significantly smaller than conventional bond markets, which may impact liquidity and the ability for the Fund to sell Sukuk at a desired time or price.

The unique characteristics of Sukuk may lead to uncertainties regarding their tax treatment within the Fund. In order for the Fund to continue to qualify for tax treatment as a regulated investment company under the Code, it may be necessary or advisable for the Fund to sell one or more Sukuk (or another investment) sooner than otherwise anticipated. As a result, the Fund may incur gains (which would generally be taxable when distributed to shareholders) or investment losses, as well as costs associated with such transaction.

**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. The Fund and its service providers are also subject to the cybersecurity and data risks discussed with respect to their use of artificial intelligence (*"*AI*"*) tools, to the extent applicable, and the risk of AI tools and AI generated-content being used in criminal or negligent ways, including for cyberattacks. Cyber attacks against or security breakdowns of the Fund or its service providers may adversely impact the Fund and its shareholders, potentially resulting in, among other things, financial losses; the inability of Fund shareholders to transact business and the Fund to process transactions; inability to calculate the Fund's NAV; violations of applicable privacy and other laws; 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.

**Liquidity.**

The Fund may make investments that are illiquid or restricted or that may become illiquid or less liquid in response to, among other developments, overall economic conditions or adverse investor perceptions, and which may entail greater risk than investments in other types of securities. Illiquidity can be also caused by, among other things, a drop in overall market trading volume, an inability to find a willing buyer, or legal restrictions on the securities' resale. These investments may be more difficult to value or sell, particularly in times of market turmoil, and there may be little trading in the secondary market available for particular securities. If the Fund is forced to sell an illiquid or restricted security to fund redemptions or for other cash needs, it may be forced to sell the security at a loss or for less than its fair value and may be unable to sell the security at all.

**High Yield Securities ("Junk Bonds").**

Fixed-income securities that are not investment grade are commonly referred to as "junk bonds" or high yield, high risk securities.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

These securities generally offer a higher yield than higher rated securities (including those of a similar maturity), but they carry a greater degree of risk, including substantial credit and default risks. High yield securities are subject to greater risk of loss (including substantial or total loss) of income and principal than higher rated securities and are considered speculative by the major credit rating agencies because of increased credit risk relative to higher rated fixed income investments. High yield securities are also subject to other increased risks, including greater sensitivity to real or perceived economic changes, increased price volatility, valuation difficulties, lack of a regular trading market and greater potential illiquidity. High yield securities are particularly susceptible to default risk during periods of adverse market, industry or economic conditions or issuer-specific developments and a high yield security may lose significant value before a default occurs. In the event of a default, the Fund may incur additional expenses to seek recovery or to negotiate new terms with a defaulting issuer.

In addition, the Fund's investments in high yield securities are subject to the risk of subordination to other creditors. Accordingly, in the event of an issuer's bankruptcy, claims of other creditors may have priority over the claims of holders of these securities, leaving few or no assets available to repay high yield securities holders, such as the Fund. High yield securities may be issued by companies that are restructuring, are smaller and less creditworthy or are more highly leveraged or indebted than other companies or are financially distressed. This means that they typically have more difficulty making scheduled payments of principal and interest and a higher risk of non-payment. An issuer's ability to pay its debt obligations may also be reduced by financial stress, specific issuer developments or the unavailability of additional financing. Changes in the value of and income from high yield securities are typically influenced more by changes in the financial and business position of the issuing company than by changes in interest rates when compared to investment grade securities.

In addition, high yield securities are subject to increased call risk, also known as prepayment risk, which is the risk that an issuer may exercise its right to redeem a fixed income security earlier than expected (a call). Issuers may call outstanding securities prior to their maturity for a number of reasons (e.g., declining interest rates, changes in credit spreads and improvements in the issuer's credit quality). If an issuer calls a security in which the Fund has invested, the Fund may not recoup the full amount of its initial investment (including any premiums paid) or may not realize the full anticipated earnings from the investment and may be forced to reinvest in lower-yielding securities, securities with greater credit risks or securities with other, less favorable features.

In recent years, there has been a broad trend of weaker or less restrictive covenant protections in the high yield market. Among other things, under such weaker or less restrictive covenants, borrowers might be able to exercise more flexibility with respect to certain activities than borrowers who are subject to stronger or more protective covenants. For example, borrowers might be able to incur more debt, including secured debt, return more capital to shareholders, remove or reduce assets that are designated as collateral securing high yield securities, increase the claims against assets that are permitted against collateral securing high yield securities or otherwise manage their business in ways that could impact creditors negatively. In addition, certain privately held borrowers might be permitted to file or provide less frequent, less detailed or less timely financial reporting or other information, which could negatively impact the value of the high yield securities issued by such borrowers. Each of these factors might negatively impact the high yield securities held by the Fund.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

**ESG Investment Risk.**

To the extent that the Adviser and/or the Sub-Adviser consider environmental, social and/or governance ("ESG") issues as a component in their investment decision-making process, the Fund's performance may be impacted. Additionally, the Adviser's and/or the Sub-Adviser's consideration of ESG issues in its investment decision-making process may require subjective analysis and the ability of the Adviser and/or the Sub-Adviser to consider ESG issues may be difficult if data about a particular issuer (or obligor) is limited. The Adviser's and/or the Sub-Adviser's consideration of ESG issues may contribute to the Adviser's and/or the Sub-Adviser's decision to forgo opportunities to buy certain securities. ESG issues with respect to an issuer (or obligor) or the Adviser's and/or the Sub- Adviser's assessment of such may change over time.

**Investment Company Securities.**

Investment company securities are equity securities and include securities of other registered open-end, closed-end and unregistered investment companies, including foreign investment companies, hedge funds, exchange-traded funds ("ETFs") and money market funds. The Fund may, to the extent noted in the Fund's non-fundamental limitations, invest in investment company securities as may be permitted by (i) the 1940 Act; (ii) the rules and regulations promulgated by the SEC under the 1940 Act; or (iii) an exemption or other relief applicable to the Fund from provisions of the 1940 Act. The 1940 Act generally prohibits an investment company from acquiring more than 3% of the outstanding voting shares of an investment company and limits such investments to no more than 5% of the Fund's total assets in any one investment company and no more than 10% in any combination of investment companies. The 1940 Act also prohibits the Fund from acquiring in the aggregate more than 10% of the outstanding voting shares of any registered closed-end investment company. The Fund may invest in investment company securities of investment companies managed by the Adviser or its affiliates to the extent permitted under the 1940 Act or as otherwise authorized by the SEC. To the extent the Fund invests a portion of its assets in investment company securities, those assets will be subject to the risks of the purchased investment company's portfolio securities, and a shareholder in the Fund will bear not only their proportionate share of the expenses of the Fund, but also, indirectly the expenses of the purchased investment company.

**Corporate Debt Obligations.**

Corporate debt obligations are fixed-income securities issued by corporations. The investment return of corporate debt obligations reflects interest earnings and changes in the market value of the security. The market value of a corporate debt obligation may be expected to rise and fall inversely with interest rates generally. There also exists the risk that the issuers of the securities may not be able to meet their obligations on interest or principal payments at the time called for by an instrument. Debtholders, as creditors, have a prior legal claim over common and preferred stockholders of the corporation as to both income and assets for the principal and interest due to the bondholder.

**Equity Securities.**

Equity securities may include common and preferred stocks, convertible securities and equity-linked securities, rights and warrants to purchase common stocks, depositary receipts, shares of investment companies, limited partnership interests and other specialty securities having equity features. Many factors affect the value of equity securities, including earnings, earnings forecasts, corporate events and factors impacting the issuer's financial condition, sector, industry and the market generally, such as labor shortages or an

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

increase in production costs and competitive conditions within an industry. The value of the equity securities held by the Fund may fluctuate rapidly and unpredictably, and these fluctuations may be frequent and significant. In addition, the Fund cannot accurately predict the income it might receive from equity securities because issuers generally have discretion as to the payment of dividends or distributions, and the common stock of an issuer in the Fund's portfolio may decline in price if, for example, the issuer fails to make anticipated dividend payments because of a decline in the issuer's financial condition. The Fund may invest in equity securities that are publicly traded on securities exchanges or over-the-counter ("OTC") or in equity securities that are not publicly traded. Equity securities are subject to the risk that stock prices in general (or in particular, the prices of the types of securities in which the Fund invests) may decline over short or extended periods of time. Equity securities that are not publicly traded may be more difficult to value or sell and their value may fluctuate more dramatically than publicly traded equity securities. Convertible securities are subject to many of the risks associated with both fixed-income securities and equity securities.

The value of equity securities and related instruments decline in response to perceived or actual adverse changes in the economy, economic outlook or the financial markets; deterioration in investor sentiment; inflation, interest rate, currency, and commodity price fluctuations; adverse geopolitical, social or environmental developments; issuer- and sector-specific considerations; unexpected trading activity among retail investors; and other factors. Market conditions affect certain types of equity securities to a greater extent than other types of equity securities. In addition, holders of an issuer's common stock may be subject to greater risks than holders of its preferred stock and debt securities because common stockholders' claims are subordinated to those of holders of preferred stocks and debt securities upon the bankruptcy of an issuer. If the stock market declines, the value of the Fund's equity securities will also likely decline, which will result in a decrease in the value of your investment in the Fund. Although stock prices can rebound, there is no assurance that values of the Fund's equity securities will return to previous levels.

U.S. and foreign stock markets, and equity securities of individual issuers, have experienced periods of substantial price volatility in the past and it is possible that they will do so again in the future. During periods when equity securities experience heightened volatility, such as during periods of market, economic or financial uncertainty or distress, the Fund's investments in equity securities are subject to heightened risks. In addition, the price of equity securities of an issuer may be particularly sensitive to general movements in the stock market and a drop in the stock market may depress the price of most or all of the common stocks and other equity securities held by the Fund.

**Convertible Securities.**

A convertible security is a bond, debenture, note, preferred stock, right, warrant or other security that may be converted into or exchanged for a prescribed amount of common stock or other security of the same or a different issuer or into cash within a particular period of time at a specified price or formula. A convertible security generally entitles the holder to receive interest paid or accrued on debt securities or the dividend paid on preferred stock until the convertible security matures or is redeemed, converted or exchanged. Before conversion, convertible securities generally have characteristics similar to and are subject to many of the risks associated with both debt and equity securities. The value of convertible securities tends to decline as interest rates rise and, because of the conversion feature, tends to vary with fluctuations in the market value of the underlying securities. Convertible securities ordinarily provide a stream of income with generally higher yields than those of common stock of the same or similar issuers. Convertible securities

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

generally rank senior to common stock in a corporation's capital structure but are usually subordinated to other comparable nonconvertible fixed-income securities in such capital structure. Convertible securities generally do not participate directly in any dividend increases or decreases of the underlying securities although the market prices of convertible securities may be affected by any dividend changes or other changes in the underlying securities.

**Mortgage-Backed Securities.**

Mortgage-backed securities entail prepayment risk, which generally increases during a period of falling interest rates. Rising interest rates tend to discourage refinancings, with the result that the average life and volatility of mortgage-backed securities will increase and market price will decrease. Rates of prepayment, faster or slower than expected by the Adviser, could reduce the Fund's yield, increase the volatility of the Fund and/or cause a decline in NAV per share. Mortgage-backed securities are also subject to extension risk, which is the risk that rising interest rates could cause mortgages or other obligations underlying the securities to be prepaid more slowly than expected, thereby lengthening the duration of such securities, increasing their sensitivity to interest rate changes and causing their prices to decline. Certain mortgage-backed securities may be more volatile and less liquid than other traditional types of debt securities. In addition, mortgage-backed securities are subject to credit risk. An unexpectedly high rate of defaults on the mortgages held by a mortgage pool may adversely affect the value of a mortgage-backed security and could result in losses to the Fund. The risk of such defaults is generally higher in the case of mortgage pools that include subprime mortgages. Furthermore, mortgage-backed securities may be subject to risks associated with the assets underlying those securities, such as a decline in value. Investments in mortgage-backed securities may give rise to a form of leverage (indebtedness) and may cause the Fund's portfolio turnover rate to appear higher. Leverage may cause the Fund to be more volatile than if the Fund had not been leveraged. The risks associated with mortgage-backed securities typically become elevated during periods of distressed economic, market, health and labor conditions. In particular, increased levels of unemployment, delays and delinquencies in payments of mortgage and rent obligations, and uncertainty regarding the effects and extent of government intervention with respect to mortgage payments and other economic matters may adversely affect the Fund's investments in mortgage-backed securities. In addition, commercial mortgage-backed securities are also subject to risks associated with reduced demand for commercial and office space, tightening lending standards and increased interest and lending rates, and other developments adverse to the commercial real estate market.

*Collateralized Mortgage Obligations.* Collateralized mortgage obligations ("CMOs") are debt obligations collateralized by mortgage loans or mortgage pass-through securities (collectively "Mortgage Assets"). Payments of principal and interest on the Mortgage Assets and any reinvestment income are used to make payments on the CMOs. CMOs are issued in multiple classes. Each class has a fixed or floating rate and a stated maturity or final distribution date. The principal and interest on the Mortgage Assets may be allocated among the classes in a number of different ways. Certain classes will, as a result of the allocation, have more predictable cash flows than others. As a general matter, the more predictable the cash flow, the lower the yield relative to other Mortgage Assets. The less predictable the cash flow, the higher the yield and the greater the risk. The Fund may invest in any class of CMO, including classes that vary inversely with interest rates and may be more volatile and sensitive to prepayment rates.

The principal and interest on the Mortgage Assets comprising a CMO may be allocated among the several classes of a CMO in many ways. The general goal in allocating cash flows on Mortgage Assets to the various classes of a CMO is to create certain tranches on

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

which the expected cash flows have a higher degree of predictability than do the underlying Mortgage Assets. As a general matter, the more predictable the cash flow is on a particular CMO tranche, the lower the anticipated yield on that tranche at the time of issue will be relative to the prevailing market yields on the Mortgage Assets. As part of the process of creating more predictable cash flows on certain tranches of a CMO, one or more tranches generally must be created that absorb most of the changes in the cash flows on the underlying Mortgage Assets. The yields on these tranches are generally higher than prevailing market yields on other mortgage related securities with similar average lives. Principal prepayments on the underlying Mortgage Assets may cause the CMOs to be retired substantially earlier than their stated maturities or final distribution dates. Because of the uncertainty of the cash flows on these tranches, the market prices and yields of these tranches are more volatile and may increase or decrease in value substantially with changes in interest rates and/or the rates of prepayment relative to other tranches. Due to the possibility that prepayments (on home mortgages and other collateral) will alter the cash flow on CMOs, it is not possible to determine in advance the final maturity date or average life. Faster prepayment will shorten the average life and slower prepayments will lengthen it. In addition, if the collateral securing CMOs or any third party guarantees are insufficient to make payments, the Fund could sustain a loss.

*Commercial Mortgage-Backed Securities.* Commercial mortgage-backed securities (*"*CMBS*"*) are generally multi-class or pass-through securities backed by a mortgage loan or a pool of mortgage loans secured by commercial property, such as industrial and warehouse properties, office buildings, retail space and shopping malls, multifamily properties and cooperative apartments. The commercial mortgage loans that underlie CMBS are generally not amortizing or not fully amortizing. That is, at their maturity date, repayment of their remaining principal balance or "balloon" is due and is repaid through the attainment of an additional loan or sale of the property. An extension of a final payment on commercial mortgages will increase the average life of the CMBS, generally resulting in a lower yield for discount bonds and a higher yield for premium bonds.

CMBS are subject to credit risk and prepayment risk, among other risks. Although prepayment risk is present, it is of a lesser degree in the CMBS market than in the residential mortgage market; commercial real estate property loans often contain provisions that substantially reduce the likelihood that such securities will be prepaid (e.g., significant prepayment penalties on loans and, in some cases, prohibition on principal payments for several years following origination).

CMBS may be less liquid and exhibit greater price volatility than other types of mortgage- or asset-backed securities. CMBS issued by private issuers may offer higher yields than CMBS issued by government issuers, but also may be subject to greater volatility and credit or default risk than CMBS issued by government issuers. In addition, at times the commercial real estate market has experienced substantially lower valuations combined with higher interest rates, leading to difficulty in refinancing debt and, as a result, the CMBS market has experienced (and could in the future experience) greatly reduced liquidity and valuations. CMBS held by the Fund may be subordinated to one or more other classes of securities of the same series for purposes of, among other things, establishing payment priorities and offsetting losses and other shortfalls with respect to the related underlying mortgage loans. There can be no assurance that the subordination will be sufficient on any date to offset all losses or expenses incurred by the underlying trust.

The values of, and income generated by, CMBS may be adversely affected by, among other things, changing interest rates, tightening lending standards, and other developments impacting the commercial real estate market, such as population shifts and other

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Principal Risks (unaudited) (cont'd)

demographic changes, increasing vacancies (potentially for extended periods) and reduced demand for commercial and office space as well as maintenance or tenant improvement costs and costs to convert properties for other uses. These developments could result from, among other things, changing tastes and preferences (such as remote work arrangements) as well as cultural, technological, global or local economic and market developments. In addition, changing interest rate environments and associated changes in lending standards and higher refinancing rates may adversely affect the commercial real estate and CMBS markets. The occurrence of any of the foregoing or similar developments would likely increase default risk for the properties and loans underlying these investments as well as impact the value of, and income generated by, these investments. These developments could also result in reduced liquidity for CMBS.

**Dilution Risk.**

The voting power of current shareholders will be diluted to the extent that current shareholders do not purchase common stock in any future offerings of common stock or do not purchase sufficient common stock to maintain their percentage interest. If the Fund is unable to invest the proceeds of such offering as intended, the Fund's per common stock share distribution may decrease and the Fund may not participate in market advances to the same extent as if such proceeds were fully invested as planned. If the Fund sells common stock at a price below net asset value pursuant to the consent of shareholders, shareholders will experience a dilution of the aggregate net asset value per share because the sale price will be less than the Fund's then-current net asset value per share.

**Active Management Risk.**

In pursuing the Fund's investment objective, the Adviser has considerable leeway in deciding which investments to buy, hold or sell on a day-to-day basis, and which trading strategies to use. For example, the Adviser, in its discretion, may determine to use some permitted trading strategies while not using others. The success or failure of such decisions will affect the Fund's performance. There is no guarantee that the use of the Adviser's and/or Sub-Adviser's investment techniques, and the investments selected based on such techniques, will perform as expected or produce the desired results. In addition, it is expected that confidential or material non-public information regarding an investment or potential investment opportunity may become available to the Adviser. If such information becomes available, the Adviser may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity with respect to such investment or investment opportunity and the Adviser may be restricted in its ability to cause the Fund to buy or sell securities of an issuer for substantial periods of time when the Fund otherwise could realize profit or avoid loss. This may adversely affect the Fund's flexibility with respect to buying or selling securities and may impair the Fund's liquidity.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Additional Information Regarding the Fund (unaudited)

**Fundamental Investment Restrictions**

The following restrictions are fundamental policies of the Fund that may not be changed without the approval of a majority of the Fund's outstanding voting securities (as defined above). If a percentage restriction on investment or use of assets set forth below is adhered to at the time a transaction is effected, later changes will not be considered a violation of the restriction. Also, if the Fund receives from an issuer of securities held by the Fund subscription rights to purchase securities of that issuer, and if the Fund exercises such subscription rights at a time when the Fund's portfolio holdings of securities of that issuer would otherwise exceed the limits set forth below, it will not constitute a violation if, prior to receipt of securities upon exercise of such rights, and after announcement of such rights, the Fund has sold at least as many securities of the same class and value as it would receive on exercise of such rights.

As a matter of fundamental policy:

1. The Fund may not invest 25% or more of the total value of its assets in a particular industry provided, however, that the foregoing restriction shall not be deemed to prohibit the Fund from purchasing the securities of any issuer pursuant to the exercise of rights distributed to the Fund by the issuer.

2. The Fund may not make any investment for the purpose of exercising control or management.

3. The Fund may not buy or sell commodities or commodity contracts or real estate or interests in real estate, except that it may purchase and sell futures contracts on stock indices and foreign currencies, securities which are secured by real estate or commodities, and securities of companies which invest or deal in real estate or commodities.

4. The Fund may not make loans, except that the Fund may (i) buy and hold debt instruments in accordance with its investment objectives and policies, (ii) invest in Loans through Participations and Assignments, (iii) enter into repurchase agreements to the extent permitted under applicable law, and (iv) make loans of portfolio securities.

5. The Fund may not act as an underwriter except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under applicable securities laws.

6. The Fund may issue senior securities as defined in the 1940 Act and borrow money in an amount not in excess of 33 1/3% of the Fund's total assets (including the amount borrowed) and may borrow up to an additional 5% of its total assets (including the amount borrowed) for temporary or emergency purposes without regard to the amount of senior securities and borrowings outstanding.

7. The Fund may purchase securities on margin and engage in short sales of securities.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

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.<br>Computershare Trust Company, N.A.<br>P.O. Box 43078<br>Providence, RI 02940-3078<br>1 (800) 231-2608<br>Monday–Friday between 8:30 a.m. and 6:00 p.m. (EDT)

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited)

As a diversified global financial services firm, Morgan Stanley, the parent company of the Adviser, engages in a broad spectrum of activities, including financial advisory services, investment management activities, lending, commercial banking, sponsoring and managing private investment funds, engaging in broker-dealer transactions and principal securities, commodities and foreign exchange transactions, research publication and other activities. In the ordinary course of its business, Morgan Stanley is a full-service investment banking and financial services firm and therefore engages in activities where Morgan Stanley's interests or the interests of its clients may conflict with the interests of a Fund. Morgan Stanley advises clients and sponsors, manages or advises other investment funds and investment programs, accounts and businesses (collectively, together with any new or successor funds, programs, accounts or businesses sponsored, managed, or advised by the Adviser or one of its investment adviser affiliates, the "Affiliated Investment Accounts") with a wide variety of investment objectives, investment policies and/or investment strategies (generally referred to herein collectively as "investment objectives") that in some instances may overlap or conflict with a Fund's investment objectives and present conflicts of interest. In addition, Morgan Stanley, the Adviser and/or the Adviser's investment adviser affiliates may also from time to time create new or successor Affiliated Investment Accounts that may compete with a Fund and present similar conflicts of interest. The discussion below enumerates certain actual, apparent and potential conflicts of interest. There is no assurance that conflicts of interest will be resolved in favor of Fund shareholders and, in fact, they may not be. The conflicts herein do not purport to be a complete list or explanation of the conflicts associated with the financial or other interests the Adviser or its affiliates may have now or in the future. Conflicts of interest not described below may also exist. References to the Adviser in this section include a Fund's affiliated sub-adviser (if any) unless otherwise noted.

The discussions below with respect to actual, apparent and potential conflicts of interest may be applicable to or arise from the Affiliated Investment Accounts managed by the Adviser's investment adviser affiliates whether or not specifically identified.

**Material Non-Public and Other Information.** It is expected that confidential or material non-public information regarding an investment or potential investment opportunity may become available to the Adviser. If such information becomes available, the Adviser may be precluded (including by applicable law or internal policies or procedures) from pursuing an investment or disposition opportunity with respect to such investment or disposition opportunity or taking another action with respect to such investment, including for an extended period of time. The Adviser may also from time to time be subject to contractual "stand-still" obligations and/or confidentiality obligations that may restrict its ability to transact in certain investments on a Fund's behalf. In addition, the Adviser may be precluded from disclosing such information to an investment team, even in circumstances in which the information would be beneficial if disclosed. Therefore, the investment team may not be provided access to material non-public information in the possession of Morgan Stanley that might be relevant to an investment decision to be made on behalf of a Fund, and the investment team may initiate a transaction or sell an investment that, if such information had been known to it, may not have been undertaken. In addition, certain members of the investment team may be recused from certain investment-related discussions so that such members do not receive information that would limit their ability to perform functions of their employment with the Adviser or its affiliates unrelated to that of a Fund. Furthermore, access to information held by certain parts of Morgan Stanley may be subject to third party confidentiality obligations and to information barriers established by Morgan Stanley designed to manage potential conflicts of interest and regulatory restrictions, including, without limitation, joint transaction restrictions pursuant to the 1940 Act. Accordingly, the Adviser's ability to source investments from, or invest alongside, other business units within Morgan Stanley may be

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited) (cont'd)

limited and there can be no assurance that the Adviser will be able to source any investments from any one or more parts of the Morgan Stanley network.

The Adviser may restrict its investment decisions and activities on behalf of the Funds in various circumstances, including because of applicable regulatory requirements or information held by the Adviser, the Adviser's investment adviser affiliates or Morgan Stanley. The Adviser might not engage in transactions or other activities for, or enforce certain rights in favor of, a Fund due to Morgan Stanley's activities outside the Funds. Furthermore, Morgan Stanley could have an interest that is different from, and potentially adverse to, that of the Fund, which may result in Morgan Stanley taking actions different from or in conflict with those taken on behalf of the Fund or otherwise impede the Fund from participating in certain opportunities. In instances where trading of an investment is restricted, the Adviser may not be able to purchase or sell such investment on behalf of the Fund, including for an extended period of time, resulting in the Fund's inability to participate in certain desirable transactions. The inability to buy or sell an investment could have an adverse effect on the Fund's portfolio due to, among other things, changes in an investment's value during the period its trading is restricted.

Morgan Stanley has established certain information barriers and other policies designed to address the sharing of information between different businesses within Morgan Stanley. As a result of information barriers, the Adviser, in certain instances, will not have access, or will have limited access, to certain information and personnel in other areas of Morgan Stanley and, in such instances, will not manage the Funds with the benefit of the information held by such other areas. Morgan Stanley, due to its access to and knowledge of funds, markets and securities based on its various businesses, may make decisions based on information or take (or refrain from taking) actions with respect to interests in investments of the kind held (directly or indirectly) by the Funds in a manner that may be adverse to the Fund, and will not have any obligation or other duty to share information with the Adviser.

In other instances, Morgan Stanley personnel, including personnel of the Adviser, will have access to information and personnel of its affiliates. For example, the Adviser may, in certain instances, share information with its affiliates regarding due diligence of companies and other investment-related due diligence. The Adviser may face conflicts of interest in determining whether to engage in the sharing of information with its affiliates. Information sharing may limit or restrict the ability of the Adviser to engage in or otherwise effect transactions on behalf of the Funds (including purchasing or selling securities that the Adviser may otherwise have purchased or sold for a Fund in the absence of the sharing of information). Also, it may adversely affect the Fund's investments, ability to invest in, or divest from, a company or engage in transactions or otherwise disadvantage a Fund. In managing conflicts of interest that arise because of the foregoing, the Adviser generally will be subject to fiduciary requirements. The Adviser may also implement internal information barriers or ethical walls or other internal information sharing protocols, and the conflicts described herein with respect to information barriers and otherwise with respect to Morgan Stanley and the Adviser will also apply internally within the Adviser. As a result, a Fund may not be permitted to transact in (e.g., dispose of a security in whole or in part) during periods when it otherwise would have been desirable and able to do so, which could adversely affect a Fund. Other investors in the security that are not subject to such restrictions may be able to transact in the security during such periods. There may also be circumstances in which, as a result of information held by certain portfolio management teams in the Adviser, the Adviser limits an activity or transaction for a Fund, including if the Fund is managed by a portfolio management team other than the team holding such information.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited) (cont'd)

Morgan Stanley and its personnel will not be under any obligation or other duty to share certain information with the Adviser or personnel involved in decision-making for Affiliated Investment Accounts (including the Funds), as applicable, and the Adviser may make investment decisions for a Fund that differ from those the Adviser would have made if Morgan Stanley, or other parts, of the Adviser, had provided such information, and the Fund be disadvantaged as a result thereof. Additionally, different portfolio management teams within the Adviser may make decisions based on information or take (or refrain from taking) actions with respect to Affiliated Investment Accounts they advise in a manner different than or adverse to the Funds.

**Investments by Morgan Stanley and its Affiliated Investment Accounts.** In serving in multiple capacities to Affiliated Investment Accounts, Morgan Stanley, including the Adviser and its investment teams, may have obligations to other clients or investors in Affiliated Investment Accounts, the fulfillment of which may not be in the best interests of a Fund or its shareholders. An investment team may have obligations to Affiliated Investment Accounts managed by both the Adviser and one or more of the Adviser's investment adviser affiliates. A Fund's investment objectives may overlap with the investment objectives of certain Affiliated Investment Accounts. As a result, the members of an investment team may face conflicts in the allocation of investment opportunities among a Fund and other investment funds, programs, accounts and businesses advised by or affiliated with the Adviser or its investment adviser affiliates. Certain Affiliated Investment Accounts may provide for higher management or incentive fees or greater expense reimbursements or overhead allocations, all of which may contribute to this conflict of interest and create an incentive for the Adviser to favor such other accounts. In addition, from time to time, the Adviser and/or its investment adviser affiliates may advise or manage Affiliated Investment Accounts with substantially similar investment objectives, investment policies and/or investment strategies as those of a Fund. The investment results of a Fund may be higher or lower than, and there is no guarantee that the investment results of the Fund will be comparable to, those of any other of these Affiliated Investment Accounts. Further, a Fund and an Affiliated Investment Account with substantially similar investment objectives, investment policies and/or investment strategies may have different fees and expenses (which may be higher or lower than those of the Fund), governance, structures, and/or services provided by the Adviser and/or its investment adviser affiliates.

Morgan Stanley currently invests and plans to continue to invest on its own behalf and on behalf of its Affiliated Investment Accounts in a wide variety of investment opportunities globally. Morgan Stanley and its Affiliated Investment Accounts, to the extent consistent with applicable law and policies and procedures, will be permitted to invest in investment opportunities without making such opportunities available to a Fund. Subject to the foregoing, Morgan Stanley may offer investments that fall into the investment objectives of an Affiliated Investment Account to such account or make such investment on its own behalf, even though such investment also falls within a Fund's investment objectives. A Fund may invest in opportunities that Morgan Stanley and/or one or more Affiliated Investment Accounts has declined, and vice versa. All of the foregoing may reduce the number of investment opportunities available to a Fund and may create conflicts of interest in allocating investment opportunities. Investors should note that the conflicts inherent in making such allocation decisions may not always be resolved to a Fund's advantage. There can be no assurance that a Fund will have an opportunity to participate in certain opportunities that fall within their investment objectives.

The interests of Morgan Stanley in an investment or a company may present certain conflicts of interest with respect to an investment by a Fund in the same investment or a Fund's participation in a transaction with such company. The decision on behalf of a Fund as to

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited) (cont'd)

when to initiate a purchase or sale transaction may differ, and be done for different reasons, than the decisions the Adviser or its affiliates take on Affiliated Investment Accounts on the same securities. This could create conflicts of interest, and it is possible that one or more accounts managed by the Adviser will achieve investment results that are substantially more or less favorable than those results achieved by a Fund.

To seek to reduce potential conflicts of interest and to attempt to allocate such investment opportunities in a fair and equitable manner, the Adviser has implemented allocation policies and procedures. These policies and procedures are intended to give all clients of the Adviser, including the Fund, fair access to investment opportunities consistent with the requirements of organizational documents, investment strategies, applicable laws and regulations, and the fiduciary duties of the Adviser. Each client of the Adviser that is subject to the allocation policies and procedures, including each Fund, is assigned an investment team and portfolio manager(s) by the Adviser. The investment team and portfolio managers review investment opportunities and will decide with respect to the allocation of each opportunity considering various factors and in accordance with the allocation policies and procedures. The allocation policies and procedures are subject to change. Investors should note that the conflicts inherent in making such allocation decisions may not always be resolved to the advantage of a Fund.

It is possible that Morgan Stanley or an Affiliated Investment Account, including another Morgan Stanley Fund, will invest in or advise (in the case of Morgan Stanley) a company that is or becomes a competitor of a company of which a Fund holds an investment. Such investment could create a conflict between the Fund, on the one hand, and Morgan Stanley or the Affiliated Investment Account, on the other hand. In such a situation, Morgan Stanley may also have a conflict in the allocation of its own resources to the portfolio investment. Furthermore, certain Affiliated Investment Accounts will be focused primarily on investing in other funds which may have strategies that overlap and/or directly conflict and compete with a Fund.

In addition, certain investment professionals who are involved in a Fund's activities remain responsible for the investment activities of other Affiliated Investment Accounts managed by the Adviser and its affiliates, and they will devote time to the management of such investments and other newly created Affiliated Investment Accounts (whether in the form of funds, separate accounts or other vehicles), as well as their own investments. In addition, in connection with the management of investments for other Affiliated Investment Accounts, members of Morgan Stanley and its affiliates may serve on the boards of directors of or advise companies which may compete with a Fund's portfolio investments. Moreover, these Affiliated Investment Accounts managed by Morgan Stanley and its affiliates may pursue investment opportunities that may also be suitable for a Fund.

It should be noted that Morgan Stanley may, directly or indirectly, make large investments in certain of its Affiliated Investment Accounts. Nothing herein restricts or in any way limits the activities of Morgan Stanley, including its ability to buy or sell interests in, or provide financing to, equity and/or debt instruments, funds or portfolio companies, for its own accounts or for the accounts of Affiliated Investment Accounts or other investment funds or clients in accordance with applicable law.

Different clients of the Adviser and its affiliates, including a Fund, may invest in (1) different classes of securities of the same issuer (including, without limitation, different parts of an issuer's capital structure), depending on the respective clients' investment objectives

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited) (cont'd)

and policies and/or (2) the same class of securities of the same issuer while seeking different investment objectives or executing different investment strategies (such as long-term v. short-term investment horizons), and the Adviser may face conflicts with respect to the interests involved. As a result, the Adviser and its affiliates, at times, will seek to satisfy their respective fiduciary obligations to certain clients owning one / the same class of securities of a particular issuer by pursuing or enforcing rights on behalf of those clients with respect to such (class of) securities, and those activities may have an adverse effect on another client which owns a different class of securities of such issuer. For example, if one client holds debt securities of an issuer and another client holds equity securities of the same issuer, if the issuer experiences financial or operational challenges, the Adviser and its affiliates may seek a liquidation of the issuer on behalf of the client that holds the debt securities, whereas the client holding the equity securities may benefit from a reorganization of the issuer. Thus, in such situations, the actions taken by the Adviser or its affiliates on behalf of one client can negatively impact securities held by another client. Alternatively, for example, if a client owns a security while seeking short-term capital appreciation that Adviser may vote proxies or engage with the issuer (as applicable) in pursuit of that goal — which could negatively impact clients who hold the same security but are seeking long-term capital appreciation. These conflicts also exist as between the Adviser's clients, including a Fund, and the Affiliated Investment Accounts managed by the Adviser's investment adviser affiliates.

In addition, in certain circumstances, the Adviser restricts, limits or reduces the amount of the Fund's investment, or restricts the type of governance or voting rights it acquires or exercises, where the Fund (potentially together with Morgan Stanley) exceeds a certain ownership interest, or possesses certain degrees of voting or control or has other interests.

The Adviser and its affiliates may give advice and recommend securities to other clients which may differ from advice given to, or securities recommended or bought for, a Fund even though such other clients' investment objectives may be similar to those of the Fund and the Adviser may make decisions for a Fund that may be more beneficial to one type of shareholder than another.

The Adviser and its affiliates manage long and short portfolios. The simultaneous management of long and short portfolios creates conflicts of interest in portfolio management and trading in that opposite directional positions may be taken in client accounts, including client accounts managed by the same investment team, and creates risks such as: (i) the risk that short sale activity could adversely affect the market value of long positions in one or more portfolios (and vice versa) and (ii) the risks associated with the trading desk receiving opposing orders in the same security simultaneously. The Adviser and its affiliates have adopted policies and procedures that are reasonably designed to mitigate these conflicts. In certain circumstances, the Adviser invests on behalf of itself in securities and other instruments that would be appropriate for, held by, or may fall within the investment guidelines of its clients, including a Fund. At times, the Adviser may give advice or take action for its own accounts that differs from, conflicts with, or is adverse to advice given to, action taken for or the interests of any client.

From time to time, conflicts also arise due to the fact that certain securities or instruments may be held in some client accounts, including a Fund, but not in others, or that client accounts may have different amounts of holdings in certain securities or instruments. In addition, due to differences in the investment strategies or restrictions among client accounts, the Adviser may take action with respect to one account that differs from the action taken with respect to another account. In some cases, a client account may compensate the Adviser based on the performance of the securities held by that account or pay a higher overall fee rate. The

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited) (cont'd)

existence of such a performance based fee or higher fee rates may create additional conflicts of interest for the Adviser in the allocation of management time, resources and investment opportunities. The Adviser has adopted several policies and procedures designed to address these potential conflicts including a code of ethics and policies that govern the Adviser's trading practices, including, among other things, the aggregation and allocation of trades among clients, brokerage allocations, cross trades and best execution.

In addition, at times an investment team will give advice or take action with respect to the investments of one or more clients that is not given or taken with respect to other clients with similar investment programs, objectives, and strategies. Accordingly, clients with similar strategies will not always hold the same securities or instruments or achieve the same performance. The Adviser's investment teams also advise clients with conflicting programs, objectives or strategies. These conflicts also exist as between the Adviser's clients, including the Fund, and the Affiliated Investment Accounts managed by the Adviser's investment adviser affiliates.

From time to time, the Adviser or its affiliates may provide opportunities to Affiliated Investment Accounts (including potentially a Fund) or other clients to make investments in companies (such as in equity, debt or other securities issued by companies) or to engage in transactions involving companies (such as refinancing, restructuring or other transactions) in which certain Affiliated Investment Accounts (including potentially a Fund) or other clients have already invested. These investments can create conflicts of interest, including those associated with the assets of a Fund potentially providing value to, or otherwise supporting the investments of, other Affiliated Investment Accounts or other clients and potentially diluting or otherwise adversely affecting a Fund previously invested in the company.

Morgan Stanley and its affiliates maintain separate trading desks that operate independently of each other and do not share information with the Adviser. The Morgan Stanley and affiliate trading desks may compete against the Adviser trading desks when implementing buy and sell transactions, possibly causing certain Affiliated Investment Accounts (including potentially a Fund) to pay more or receive less for a security than other Affiliated Investment Accounts.

**Investments by Separate Investment Departments.** For the Adviser and certain of its investment adviser affiliates, the entities and individuals that provide investment-related services can differ by client, investment function, or business line (each, an "Investment Department" and collectively, the "Investment Departments"). Nonetheless, Investment Departments (with certain exceptions) can engage in discussions and share information and resources with another Investment Department (or a team within the other Investment Department) regarding investment-related matters. The sharing of information and resources between the Investment Departments is designed to further increase the knowledge and effectiveness of each Investment Department. However, an investment team's decisions as to the use of shared research and participation in discussions with another Investment Department could adversely impact a client. Certain investment teams within one Investment Department could make investment decisions and execute trades together with investment teams within other Investment Departments. Other investment teams make investment decisions and execute trades independently. This could cause the quality and price of execution, and the performance of investments and accounts, to vary. Internal policies and procedures set forth the guidelines under which securities and securities trades can be crossed, aggregated, and coordinated between accounts serviced by different Investment Departments. Internal policies and procedures take into consideration a variety of factors, including the primary market in which such security trades. If a security or securities trade is

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited) (cont'd)

ineligible for crossing, aggregation, or other coordinated trading, then each Investment Department will execute such trades independently of the other.

**Payments to Broker-Dealers and Other Financial Intermediaries.** The Adviser, Distributor and/or their affiliates may pay compensation, out of their own funds and not as an expense of the Fund, to certain Financial Intermediaries (which may include affiliates of the Adviser and the Distributor), including recordkeepers and administrators of various deferred compensation plans, in connection with the sale, distribution, marketing and retention of shares of the Fund and/or shareholder servicing. For example, the Adviser or the Distributor may pay additional compensation to a Financial Intermediary for, among other things, promoting the sale and distribution of Fund shares, providing access to various programs, mutual fund platforms or preferred or recommended mutual fund lists that may be offered by a Financial Intermediary, granting the Distributor access to a Financial Intermediary's financial advisors and consultants, providing assistance in the ongoing education and training of a Financial Intermediary's financial personnel, furnishing marketing support, maintaining share balances and/or for sub-accounting, recordkeeping, administrative, shareholder or transaction processing services. Such payments are in addition to any distribution fees, shareholder servicing fees and/or transfer agency fees that may be payable by the Fund. The additional payments may be based on various factors, including level of sales (based on gross or net sales or some specified minimum sales or some other similar criteria related to sales of the Fund and/or some or all other Morgan Stanley Funds), amount of assets invested by the Financial Intermediary's customers (which could include current or aged assets of the Fund and/or some or all other Morgan Stanley Funds), a Fund's advisory fee, some other agreed upon amount or other measures as determined from time to time by the Adviser and/or the Distributor. The amount of these payments may be different for different Financial Intermediaries.

In certain cases, payments to broker-dealers and other Financial Intermediaries may be shared by and among the Adviser, the Distributor and their affiliates. The prospect of receiving, or the receipt of, additional compensation, as described above, by Financial Intermediaries may provide such Financial Intermediaries and their financial advisors and other salespersons with an incentive to favor sales of shares of the Fund over other investment options with respect to which these Financial Intermediaries do not receive additional compensation (or receives lower levels of additional compensation). These payment arrangements, however, will not change the price that an investor pays for shares of the Fund or the amount that the Fund receives to invest on behalf of an investor. Investors may wish to take such payment arrangements into account when considering and evaluating any recommendations relating to Fund shares and should review carefully any disclosures provided by Financial Intermediaries as to their compensation.

The additional compensation received by a given Financial Intermediary from the Adviser and/or the Distributor may vary from the additional compensation received by the Financial Intermediary in respect of an Affiliated Investment Account managed by an affiliate of the Adviser or principally underwritten by an affiliate of the Distributor. In such circumstances, differences in the prospect of receiving, or the receipt of, additional compensation, as described above, by Financial Intermediaries may provide such Financial Intermediaries and their financial advisors and other salespersons with an incentive to favor sales of shares of one Affiliated Investment Account over other investment options with respect to which these Financial Intermediaries do not receive additional compensation (or receives lower levels of additional compensation).

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited) (cont'd)

**Morgan Stanley Trading and Principal Investing Activities.** Notwithstanding anything to the contrary herein, Morgan Stanley will generally conduct its sales and trading businesses, publish research and analysis, and render investment advice without regard for a Fund's holdings, although these activities could have an adverse impact on the value of one or more of the Fund's investments, or could cause Morgan Stanley to have an interest in one or more portfolio investments that is different from and potentially adverse to that of a Fund. Furthermore, from time to time, the Adviser or its affiliates may invest "seed" capital in a Fund, typically to enable the Fund to commence investment operations and/or achieve sufficient scale, as further described below. The Adviser and its affiliates may hedge such seed capital exposure by investing in derivatives or other instruments expected to produce offsetting exposure. Such hedging transactions, if any, would occur outside of a Fund and could adversely affect a Fund's investments.

Morgan Stanley's sales and trading, financing and principal investing businesses (whether or not specifically identified as such, and including Morgan Stanley's trading and principal investing businesses) will not be required to offer any investment opportunities to a Fund. These businesses may encompass, among other things, principal trading activities as well as principal investing.

Morgan Stanley's sales and trading, financing and principal investing businesses have acquired or invested in, and in the future may acquire or invest in, minority and/or majority control positions in equity or debt instruments of diverse public and/or private companies. Such activities may put Morgan Stanley in a position to exercise contractual, voting or creditor rights, or management or other control with respect to securities or loans of portfolio investments or other issuers, and in these instances Morgan Stanley may, in its discretion and subject to applicable law, act to protect its own interests or interests of clients, and not a Fund's interests.

Subject to the limitations of applicable law, a Fund may purchase from or sell assets to, or make investments in, companies in which Morgan Stanley has or may acquire an interest, including as an owner, creditor or counterparty.

**Morgan Stanley's Investment Banking and Other Commercial Activities.** Morgan Stanley advises clients on a variety of mergers, acquisitions, restructuring, bankruptcy and financing transactions. Morgan Stanley may act as an advisor to clients, including other investment funds that may compete with a Fund and with respect to investments that a Fund may hold. Morgan Stanley may give advice and take action with respect to any of its clients or proprietary accounts that may differ from the advice given, or may involve an action of a different timing or nature than the action taken, by a Fund. Morgan Stanley may give advice and provide recommendations to persons competing with a Fund and/or any of a Fund's investments that are contrary to the Fund's best interests and/or the best interests of any of its investments.

Morgan Stanley could be engaged in financial advising, whether on the buy-side or sell-side, or in financing or lending assignments that could result in Morgan Stanley determining in its discretion or being required to act exclusively on behalf of one or more third parties, which could limit a Fund's ability to transact with respect to one or more existing or potential investments. Morgan Stanley may have relationships with third-party funds, companies or investors who may have invested in or may look to invest in portfolio companies, and there could be conflicts between a Fund's best interests, on the one hand, and the interests of a Morgan Stanley client or counterparty, on the other hand.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited) (cont'd)

To the extent that Morgan Stanley advises companies in financial restructurings outside of, prior to or after filing for protection under Chapter 11 of the U.S. Bankruptcy Code or similar laws in other jurisdictions, the Adviser's flexibility in making investments in such restructurings on a Fund's behalf, or participating on steering committees and other committees in connection with existing investments, may be limited.

Morgan Stanley could provide investment banking services to competitors of portfolio companies, as well as to private equity and/or private credit funds; such activities may present Morgan Stanley with a conflict of interest vis-a-vis a Fund's investment and may also result in a conflict in respect of the allocation of investment banking resources to portfolio companies.

To the extent permitted by applicable law, Morgan Stanley may provide a broad range of financial services to companies in which a Fund invests, including strategic and financial advisory services, interim acquisition financing and other lending and underwriting or placement of securities, and Morgan Stanley generally will be paid fees (that may include warrants or other securities) for such services. Morgan Stanley will not share any of the foregoing interest, fees and other compensation received by it (including, for the avoidance of doubt, amounts received by the Adviser) with a Fund, and any advisory fees payable will not be reduced thereby.

Morgan Stanley may be engaged to act as a financial advisor to a company in connection with the sale of such company, or subsidiaries or divisions thereof, may represent potential buyers of businesses through its mergers and acquisition activities and may provide lending and other related financing services in connection with such transactions. Morgan Stanley's compensation for such activities is usually based upon realized consideration and is usually contingent, in substantial part, upon the closing of the transaction. Under these circumstances, a Fund may be precluded from participating in a transaction with or relating to the company being sold or participating in any financing activity related to merger or acquisition.

The involvement or presence of Morgan Stanley in the investment banking and other commercial activities described above (or the financial markets more broadly) may restrict or otherwise limit investment opportunities that may otherwise be available to the Fund. For example, issuers may hire and compensate Morgan Stanley to provide underwriting, financial advisory, placement agency, brokerage services or other services and, because of limitations imposed by applicable law and regulation, a Fund may be prohibited from buying or selling securities issued by those issuers or participating in related transactions or otherwise limited in its ability to engage in such investments.

In addition, in situations where the Adviser is required to aggregate its positions with those of other Morgan Stanley business units for position limit calculations, the Adviser may have to refrain from making investments due to the positions held by other Morgan Stanley business units or their clients. There may be other situations where the Adviser refrains from making an investment or refrains from taking certain actions related to the management of such investment due to, among other reasons, additional disclosure obligations, regulatory requirements, policies, and reputational risk, or the Adviser may limit purchases or sales of securities in respect of which Morgan Stanley is engaged in an underwriting or other distribution capacity.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited) (cont'd)

**Morgan Stanley's Marketing Activities.** Morgan Stanley is engaged in the business of underwriting, syndicating, brokering, administering, servicing, arranging and advising on the distribution of a wide variety of securities and other investments in which a Fund may invest. Subject to the restrictions of the 1940 Act, including Sections 10(f) and 17(e) thereof, a Fund may invest in transactions in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger or structuring agent and receives fees or other compensation from the sponsors of such products or securities. Any fees earned by Morgan Stanley in such capacity will not be shared with the Adviser or the Fund. Certain conflicts of interest, in addition to the receipt of fees or other compensation, would be inherent in these transactions. Moreover, the interests of one of Morgan Stanley's clients with respect to an issuer of securities in which a Fund has an investment may be adverse to the Adviser's or a Fund's best interests. In conducting the foregoing activities, Morgan Stanley will be acting for its other clients and will have no obligation to act in the Adviser's or the Fund's best interests. Due to the restrictions of the 1940 Act, a Fund may be restricted from participating in certain transactions in which Morgan Stanley acts as underwriter, placement agent, syndicator, broker, administrative agent, servicer, advisor, arranger or structuring agent, including transactions that would otherwise be beneficial to the Fund.

**Client Relationships.** Morgan Stanley has existing and potential relationships with a significant number of corporations, institutions and individuals. In providing services to its clients, Morgan Stanley may face conflicts of interest with respect to activities recommended to or performed for such clients, on the one hand, and a Fund, its shareholders or the entities in which the Fund invests, on the other hand. In addition, these client relationships may present conflicts of interest in determining whether to offer certain investment opportunities to a Fund. In acting as principal or in providing advisory and other services to its other clients, Morgan Stanley may engage in or recommend activities with respect to a particular matter that conflict with or are different from activities engaged in or recommended by the Adviser on a Fund's behalf.

**Principal Investments.** There may be situations in which a Fund's interests may conflict with the interests of one or more general accounts of Morgan Stanley and its affiliates or accounts managed by Morgan Stanley or its affiliates. This may occur because these accounts hold public and private debt and equity securities of many issuers which may be or become portfolio companies, or from whom portfolio companies may be acquired.

**Transactions with Portfolio Companies of Affiliated Investment Accounts.** The companies in which a Fund may invest may be counterparties to or participants in agreements, transactions or other arrangements with portfolio companies or other entities of portfolio investments of Affiliated Investment Accounts (for example, a company in which a Fund invests may retain a company in which an Affiliated Investment Account invests to provide services or may acquire an asset from such company or vice versa). Certain of these agreements, transactions and arrangements involve fees, servicing payments, rebates and/or other benefits to Morgan Stanley or its affiliates. For example, portfolio entities may, including at the encouragement of Morgan Stanley, enter into agreements regarding group procurement and/or vendor discounts. Morgan Stanley and its affiliates may also participate in these agreements and may realize better pricing or discounts as a result of the participation of portfolio entities. To the extent permitted by applicable law, certain of these agreements may provide for commissions or similar payments and/or discounts or rebates to be paid to a portfolio entity of an Affiliated Investment Account, and such payments or discounts or rebates may also be made directly to Morgan Stanley or its affiliates. Under these arrangements, a particular portfolio company or other entity may benefit to a greater degree than the other

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited) (cont'd)

participants, and the Morgan Stanley Funds, investment vehicles and accounts (which may or may not include a Fund) that own an interest in such entity will receive a greater relative benefit from the arrangements than the Morgan Stanley Funds, investment vehicles or accounts that do not own an interest therein. Fees and compensation received by portfolio companies of Affiliated Investment Accounts in relation to the foregoing will not be shared with the Fund or offset advisory fees payable.

**Investments in Portfolio Investments of Other Funds.** To the extent permitted by applicable law, when the Fund invests in certain companies or other entities, other funds affiliated with or advised by the Adviser may have made or may be making an investment in such companies or other entities. Other funds that have been or may be managed by the Adviser may invest in the companies or other entities in which a Fund has made an investment. Under such circumstances, a Fund and such other funds may have conflicts of interest (e.g., over the terms, exit strategies and related matters, including the exercise of remedies of their respective investments). If the interests held by a Fund or other fund are different from (or take priority over or are subordinate to) those held by the Fund or such other funds, the Adviser may be required to make a selection at the time of conflicts between the interests held by such other funds and the interests held by a Fund.

**Investments in Morgan Stanley Funds and Other Funds.** To the extent permitted by applicable law, a Fund may invest in a fund affiliated with the Adviser or its affiliates or a fund advised by the Adviser or its affiliates. In connection with any such investments, an investing Fund, to the extent permitted by the 1940 Act, will pay all advisory, administrative and/or Rule 12b-1 fees applicable to the investment. Investments by the Fund in a fund affiliated with the Adviser or its affiliates or a fund advised by the Adviser or its affiliates present potential conflicts of interest, including potential incentives to invest in smaller or newer funds to increase asset levels or to otherwise provide greater viability for funds. The Adviser voluntarily waives advisory fees (or unitary management fees, as applicable) of the Fund associated with investments by the Fund in a fund advised by the Adviser or its affiliates, which will reduce, but will not eliminate, these types of conflicts.

The Affiliated Investment Accounts (including the Funds) may, individually or in the aggregate, own a substantial percentage of a Fund. Further, the Adviser, its affiliates, or another entity (i.e., a seed investor) may invest in the Funds at or near the establishment of such Funds, which may facilitate the Funds achieving a specified size or scale. The Adviser and/or its affiliates may make payments to an investor that contributes seed capital to a Fund. Such payments may continue for a specified period of time and/or until a specified dollar amount is reached, and will be made from the assets of the Adviser and/or such affiliates (and not the applicable Fund). Seed investors may contribute all or a majority of the assets in the Fund. There is a risk that such seed investors may redeem their investments in the Fund, particularly after payments from the Adviser and/or its affiliates have ceased. Such redemptions could negatively impact the Fund's liquidity, expenses and market price of its shares, as applicable.

**Allocation of Expenses.** Expenses may be incurred that are attributable to a Fund and one or more other Affiliated Investment Accounts (including in connection with issuers in which a Fund and such other Affiliated Investment Accounts have overlapping investments). The allocation of such expenses among such entities raises potential conflicts of interest. The Adviser and its affiliates intend to allocate such common expenses among a Fund and any such other Affiliated Investment Accounts on a pro rata basis or in such other manner as the Adviser deems to be fair and equitable or in such other manner as may be required by applicable law.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited) (cont'd)

**Temporary Investments.** To more efficiently invest short-term cash balances held by a Fund, the Adviser may invest such balances on an overnight "sweep" basis in shares of one or more money market funds or other short-term vehicles. The investment adviser to these money market funds or other short-term vehicles may be the Adviser (or an investment adviser affiliate) to the extent permitted by applicable law, including Rule 12d1-1 under the 1940 Act. In such a case, the Adviser or investment adviser affiliate may receive asset-based fees in respect of a Fund's investment (which will reduce the net return realized by a Fund). For additional information regarding investments in other funds, see the section "Investments in Morgan Stanley Funds and Other Funds," above.

**Transactions with Affiliates.** The Adviser and any investment sub-adviser might purchase securities from underwriters or placement agents in which a Morgan Stanley affiliate is a member of a syndicate or selling group, as a result of which an affiliate might benefit from the purchase through receipt of a fee or otherwise. Neither the Adviser nor any investment sub-adviser will purchase securities on behalf of a Fund from an affiliate that is acting as a manager of a syndicate or selling group. Purchases by the Adviser on behalf of a Fund from an affiliate acting as a placement agent must meet the requirements of applicable law. Furthermore, Morgan Stanley may face conflicts of interest when a Fund uses service providers affiliated with Morgan Stanley because Morgan Stanley receives greater overall fees when they are used.

**Affiliated Indexes.** An investment adviser affiliate(s) of the Adviser develops, owns and operates indexes ("Indexes"), and may continue to do so in the future, based on investment and trading strategies and concepts developed by the Adviser and/or its investment adviser affiliates ("Adviser Strategies"). Some of the Funds seek to track the performance of the Indexes. The Adviser manages Accounts which track the same Indexes used by the Funds or which are based on the same, or substantially similar, Adviser Strategies that are used in the operation of the Indexes and the Funds. The operation of the Indexes, the Funds and the Accounts in this manner gives rise to potential conflicts of interest. For example, Accounts that track the same Indexes used by the Funds may engage in purchases and sales of securities prior to when the Index and the Funds engage in similar transactions because such Accounts may be managed and rebalanced on an ongoing basis, whereas the Funds' portfolios may only be rebalanced on a periodic or other basis subsequent to the rebalancing of the Index.

The Adviser has adopted policies and procedures that are designed to address potential conflicts that arise in connection with the operation of the Indexes, the Funds and the Accounts. The Adviser has established certain information barriers and other policies designed to address the sharing of information between different businesses within the Investment Adviser, including with respect to personnel responsible for constructing and maintaining the Indexes and those involved in decision-making for the Funds.

**Valuation of the Funds' Investments.** The Adviser performs certain valuation services related to securities and other assets held by the Funds and performs such services in accordance with its valuation policies. The Adviser will face a conflict with respect to valuation of the Funds' investments generally because of the effect of such valuations on the Adviser's fees and other compensation and performance of the Funds.

**Proxy Voting by the Adviser.** The Adviser has implemented processes designed to prevent conflicts of interest from influencing proxy voting decisions that it makes on behalf of advisory clients, including the Funds, and to help ensure that such decisions are

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Potential Conflicts of Interest (unaudited) (cont'd)

made in accordance with its fiduciary obligations to its clients. Notwithstanding such proxy voting processes, proxy voting decisions made by the Adviser in respect of securities held by the Funds may benefit the interests of Morgan Stanley and/or accounts other than the Funds. Further, the Adviser may make different proxy voting decisions in respect of the same security held by clients with different investment objectives or strategies. For a more detailed discussion of these policies and procedures, see the section of the Statement of Additional Information entitled "Morgan Stanley Investment Management Proxy Voting Policy and Procedures."

**Potential Conflict of Interest Related to Use of Sub-Adviser(s).** To the extent the Adviser to a Fund engages affiliated and/or unaffiliated sub-advisers, the Adviser generally expects to compensate the sub-adviser out of the advisory fee it receives from the Fund, which creates an incentive for the Adviser to select sub-adviser(s) with lower fee rates or to select affiliated sub-adviser(s). In addition, a sub-adviser may have interests and relationships that create actual or potential conflicts of interest related to their management of Fund assets allocated to or managed by the sub-adviser. These conflicts may be similar to or different from the conflicts described herein related to Morgan Stanley and its investment advisory affiliates. For additional information about potential conflicts of interest for each sub-adviser(s) can be found in the relevant sub-adviser's Form ADV. A copy of Part 1 and Part 2 of a sub-adviser's Form ADV is available on the SEC's website (www.adviserinfo.sec.gov).

**Electronic Communication Networks and Alternative Trading Systems.** The Adviser's affiliate(s) have ownership interests in and/or board seats on electronic communication networks ("ECNs") or other alternative trading systems ("ATSs"). In certain instances the Adviser's affiliate(s) could be deemed to control one or more of such ECNs or ATSs based on the level of such ownership interests and whether such affiliates are represented on the board of such ECNs or ATSs. Consistent with its fiduciary obligation to seek best execution, the Adviser may, from time to time, directly or indirectly, effect client trades through ECNs or other ATSs in which the Firm's affiliates have or could acquire an interest or board seat. These affiliates might receive an indirect economic benefit based upon their ownership in the ECNs or other ATSs. The Adviser will, directly or indirectly, execute through an ECN or other ATSs in which an affiliate has an interest only in situations where the Adviser or the broker dealer through whom it is accessing the ECN or ATS reasonably believes such transaction will be in the best interest of its clients and the requirements of applicable law have been satisfied.

**General Process for Potential Conflicts.** All of the transactions described above involve the potential for conflicts of interest between the Adviser, related persons of the Adviser and/or their clients. The Advisers Act, the 1940 Act and ERISA impose certain requirements designed to decrease the possibility of conflicts of interest between an investment adviser and its clients. In some cases, transactions may be permitted subject to fulfillment of certain conditions. Certain other transactions may be prohibited. In addition, the Adviser has instituted policies and procedures designed to prevent conflicts of interest from arising and, when they do arise, to ensure that it effects transactions for clients in a manner that is consistent with its fiduciary duty to its clients and in accordance with applicable law. The Adviser seeks to ensure that potential or actual conflicts of interest are appropriately resolved taking into consideration the overriding best interests of the client.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Recent Changes (unaudited)

*The following information in this annual report is a summary of certain changes since December 31, 2024. This information may not reflect all of the changes that have occurred since you purchased the Fund.*

Change to Principal Risk Factors

During the year ended December 31, 2025, except as noted above, there were: (i) no material changes in the Fund's investment objectives or policies that have not been approved by shareholders, (ii) no changes in the Fund's charter or by-laws that would delay or prevent a change of control of the Fund that have not been approved by shareholders, (iii) no material changes to the principal risk factors associated with investment in the Fund, and (iv) no change in the persons primarily responsible for the day-to-day management of the Fund's portfolio.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Important Notices (unaudited)

**Reporting to Shareholders**

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 and annual reports are filed electronically with the Securities and Exchange Commission ("SEC") on Form N-CSRS and Form N-CSR, respectively. Morgan Stanley makes these reports available on its public website, www.morganstanley.com/im/shareholderreports. Each Morgan Stanley non-money market fund also files a complete schedule of portfolio holdings with the SEC for the Fund's first and third fiscal quarters as an attachment to Form N-PORT and monthly holding for each money market fund on Form N-MFP. Morgan Stanley does not deliver the reports for the first and third fiscal quarters to stockholders, but makes the complete schedule of portfolio holdings for the Fund's first and third fiscal quarters available on its public website. The holdings for each money market fund are also posted to the Morgan Stanley public website. You may, however, obtain Form N-PORT filings (as well as the Form N-CSR, N-CSRS and N-MFP filings) by accessing the SEC's website, www.sec.gov. 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).

In addition to filing a complete schedule of portfolio holdings with the SEC each fiscal quarter, 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 and under other conditions as described in the Fund's policy on portfolio holdings disclosure. You may obtain copies of the Fund's monthly website postings by calling toll free 1(800) 231-2608.

**Proxy Voting Policies 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 https://www.morganstanley.com/im/en-us/institutional-investor/about-us/proxy-voting-and-procedures.html. This information is also available on the SEC's web site at www.sec.gov.

**Share Repurchase Program**

You can access information about the monthly share repurchase results through Morgan Stanley Investment Management's website: https://www.morganstanley.com/im/en-us/individual-investor/products/closed-end-funds-and-term-trusts/emerging-markets-debt/emerging-markets-debt-fund.html.

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

U.S. Customer Privacy Notice (unaudited) March 2025

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| **FACTS** | **WHAT DOES MSIM DO WITH YOUR PERSONAL INFORMATION?** |
| **Why?** | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| **What?** | The types of personal information we collect and share depend on the product or service you have with us. This information can include:<br>◼ Social Security number and income<br>◼ investment experience and risk tolerance<br>◼ checking account information and wire transfer instructions |
| **How?** | All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons MSIM chooses to share; and whether you can limit this sharing. |

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|:---|:---|:---|
| **Reasons we can share your personal information** | **Does MSIM share?** | **Can you limit this sharing?** |
| **For our everyday business purposes —** <br> such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
| **For our marketing purposes —** <br> to offer our products and services to you | Yes | No |
| **For joint marketing with other financial companies** | No | We don't share |
| **For our affiliates' everyday business purposes —** <br> information about your transactions and experiences | Yes | No\* |
| **For our affiliates' everyday business purposes —** <br> information about your creditworthiness | Yes | Yes\* |
| **For our affiliates to market to you** | Yes | Yes\* |
| **For nonaffiliates to market to you** | No | We don't share |

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

U.S. Customer Privacy Notice (unaudited) (cont'd) March 2025

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| **To limit our sharing** | Call toll-free (844) 312-6327 or email: msimprivacy@morganstanley.com. Please include your name, address, and first three digits (and only the first three digits) of your account number in the email. If we serve you through an investment professional, please contact them directly. Specific Internet addresses, mailing addresses, and telephone numbers are listed on your statements and other correspondence.<br>**PLEASE NOTE:** If you are a *new* customer, we can begin sharing your information 30 days from the date we sent this notice. When you are *no longer* our customer, we continue to share your information as described in this notice. However, you can contact us at any time to limit our sharing. |
| **Questions?** | Call toll-free (844) 312-6327 or email: msimprivacy@morganstanley.com |

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**Who we are**

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|:---|:---|
| **Who is providing this notice?** | Morgan Stanley Investment Management Inc. and its investment management affiliates ("MSIM") (*See* Affiliates definition below.) |

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**What we do**

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|:---|:---|
| **How does MSIM protect my personal information?** | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. We have policies governing the proper handling of customer information by personnel and requiring third parties that provide support to adhere to appropriate security standards with respect to such information. |
| **How does MSIM collect my personal information?** | We collect your personal information, for example, when you<br>◼ open an account or make deposits or withdrawals from your account<br>◼ buy securities from us or make a wire transfer<br>◼ give us your contact information<br>We also collect your personal information from others, such as credit bureaus, affiliates, or other companies. |
| **Why can't I limit all sharing?** | Federal law gives you the right to limit only<br>◼ sharing for affiliates' everyday business purposes — information about your creditworthiness<br>◼ affiliates from using your information to market to you<br>◼ sharing for nonaffiliates to market to you<br>State laws and individual companies may give you additional rights to limit sharing. (See below for more on your rights under state law.) |

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

U.S. Customer Privacy Notice (unaudited) (cont'd) March 2025

**What we do**

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|:---|:---|
| **What happens when I limit sharing for an account I hold jointly with someone else?** | Your choices will apply to everyone on your account. |

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**Definitions**

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|:---|:---|
| **Affiliates** | Companies related by common ownership or control. They can be financial and non-financial companies.<br>◼ *Our affiliates include registered investment advisers such as Eaton Vance Management and Calvert Research and Management, registered broker-dealers such as Morgan Stanley Distributors Inc. and Eaton Vance Distributors, Inc., and registered and unregistered funds sponsored by Morgan Stanley Investment Management such as the registered funds within Morgan Stanley Institutional Fund, Inc. (together, the "Investment Management Affiliates"); and companies with a Morgan Stanley name and financial companies such as Morgan Stanley Barney LLC and Morgan Stanley & Co. (the, "Morgan Stanley Affiliates").* |
| **Nonaffiliates** | Companies not related by common ownership or control. They can be financial and non-financial companies.<br>◼ *MSIM does not share with non-affiliates so they can market to you.* |
| **Joint marketing** | A formal agreement between non-affiliated financial companies that together market financial products or services to you.<br>◼ *MSIM doesn't jointly market* |

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**Other important information**

**\* Please Note: MSIM does not share your creditworthiness information or your transactions and experiences information with the Morgan Stanley Affiliates, nor does MSIM enable the Morgan Stanley Affiliates to market to you. Your opt outs will prevent MSIM from sharing your creditworthiness information with the Investment Management Affiliates and will prevent the Investment Management Affiliates from marketing their products to you.**

**Vermont:** Except as permitted by law, we will not share personal information we collect about Vermont residents with Nonaffiliates unless you provide us with your written consent to share such information.

**California:** Except as permitted by law, we will not share personal information we collect about California residents with Nonaffiliates 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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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Directors and Officers Information (unaudited)

Independent Directors

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|:---|:---|:---|:---|:---|:---|
| Name, Address and Birth<br>Year of Independent Director | Position(s)<br>Held with<br>Registrant | Length of<br>Time <br>Served\* | Principal Occupation(s) During Past 5 Years<br>and Other Relevant Professional Experience | Number of<br>Funds in <br>Fund<br>Complex<br>Overseen <br>by<br>Independent<br>Director\*\* | Other Directorships Held by <br>Independent Director During <br>Past 5 Years\*\*\* |
| Frances L. Cashman<br>c/o Morgan, Lewis & Bockius LLP<br>Counsel to the Independent Directors<br>One State Street<br>Hartford, CT 06103<br>Birth Year: 1961 | Director | Since February <br>2022 | Chief Executive Officer, Asset Management Portfolio, Delinian Ltd. (financial information) (2021-2024); Executive Vice President and various other roles, Legg Mason & Co. (asset management) (2010-2020); Managing Director, Stifel Nicolaus (2005-2010). | 80 | Board Director and Member of the Membership Committee, Mutual Fund Directors Forum (since May 2025); Trustee and Member of the Audit and Investment Committees, Baltimore Equitable Insurance (since May 2025); Board Director and Member of the Marketing Committee, Archdiocese of Baltimore School Board (since May 2025); Trustee, Chair of the Advancement Committee and Member of the Investment Committee, Cristo Rey Jesuit High School (since December 2024); Trustee and Investment Committee Member, Georgia Tech Foundation (Since June 2019); Formerly, Trustee and Chair of Marketing Committee, and Member of Finance Committee, Loyola Blakefield (2017-2023); Formerly, Trustee, MMI Gateway Foundation (2017-2023). |
| Kathleen A. Dennis<br>c/o Morgan, Lewis & Bockius LLP<br>Counsel to the Independent Directors<br>One State Street<br>Hartford, CT 06103<br>Birth Year: 1953 | Director | Since August <br>2006 | Chairperson of the Governance Committee (since January 2021), Chairperson of the Liquidity and Alternatives Sub-Committee of the Investment Committee (2006-2020) and Director or Trustee of various Morgan Stanley Funds (since August 2006); President, Cedarwood Associates (mutual fund and investment management consulting) (since July 2006); formerly, Senior Managing Director of Victory Capital Management (1993-2006); Senior Vice President, Chase Bank (1984-1993). | 79 | Board Member, University of Albany Foundation (2012-present); Board Member, Mutual Fund Directors Forum (2014-2024); Director of various non-profit organizations. |

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Directors and Officers Information (unaudited) (cont'd)

Independent Directors (cont'd):

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|:---|:---|:---|:---|:---|:---|
| Name, Address and Birth<br>Year of Independent Director | Position(s)<br>Held with<br>Registrant | Length of<br>Time <br>Served\* | Principal Occupation(s) During Past 5 Years<br>and Other Relevant Professional Experience | Number of<br>Funds in <br>Fund<br>Complex<br>Overseen <br>by<br>Independent<br>Director\*\* | Other Directorships Held by <br>Independent Director During <br>Past 5 Years\*\*\* |
| Nancy C. Everett<br>c/o Morgan, Lewis & Bockius LLP<br>Counsel to the Independent Directors<br>One State Street<br>Hartford, CT 06103<br>Birth Year: 1955 | Director | Since January <br>2015 | Chairperson of the Equity Investment Committee (since January 2021); Director or Trustee of various Morgan Stanley Funds (since January 2015); Formerly, Interim Vice President for Investment Management, Dominion Energy (2024-2025); Formerly, Chief Executive Officer of Virginia Commonwealth University Investment Company (2015-2024); Owner, OBIR, LLC (institutional investment management consulting) (since June 2014); formerly, Managing Director, BlackRock, Inc. (February 2011-December 2013) and Chief Executive Officer, General Motors Asset Management (a/k/a Promark Global Advisors, Inc.) (June 2005-May 2010). | 80 | Formerly, Member of Virginia Commonwealth University School of Business Foundation (2005-2016); Member of Virginia Commonwealth University Board of Visitors (2013-2015); Member of Committee on Directors for Emerging Markets Growth Fund, Inc. (2007-2010); Chairperson of Performance Equity Management, LLC (2006-2010); and Chairperson, GMAM Absolute Return Strategies Fund, LLC (2006-2010). |
| Richard G. Gould<br>c/o Morgan, Lewis and Bockius LLP<br>Counsel to the Independent Directors<br>One State Street<br>Hartford, CT 06103<br>Birth Year: 1959 | Director | Since June 2024 | Global Chief Executive Officer, CLSA Ltd. (2019-2021); Chief Executive Officer, Americas, CLSA Americas, LLC (2014-2021); Head of Global Sales, Bloomberg Tradebook, Bloomberg LP (2010-2014); Founding Member, Executive Vice President, Information Services Group (2006-2010); Managing Director, Morgan Stanley (1990-2006); Executive Director, International Portfolio Trading & Derivatives, Morgan Stanley (1988-1990); Vice President, International Portfolio Trading & Derivatives, Morgan Stanley (1986-1988); Equity Derivatives Trading, Lehman Brothers (1983-1986). | 80 | Global Management Committee Member, CLSA (2014-2020); Broking Executive Committee Member, CLSA (2014-2020). |

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**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Directors and Officers Information (unaudited) (cont'd)

Independent Directors (cont'd):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Name, Address and Birth<br>Year of Independent Director | Position(s)<br>Held with<br>Registrant | Length of<br>Time <br>Served\* | Principal Occupation(s) During Past 5 Years<br>and Other Relevant Professional Experience | Number of<br>Funds in <br>Fund<br>Complex<br>Overseen <br>by<br>Independent<br>Director\*\* | Other Directorships Held by <br>Independent Director During <br>Past 5 Years\*\*\* |
| Eddie A. Grier<br>c/o Morgan, Lewis & Bockius LLP<br>Counsel to the Independent Directors<br>One State Street<br>Hartford, CT 06103<br>Birth Year: 1955 | Director | Since February <br>2022 | Dean, Santa Clara University Leavey School of Business (2021-2025); Dean, Virginia Commonwealth University School of Business (2010-2021); President and various other roles, Walt Disney Company (entertainment and media) (1981-2010). | 80 | Formerly, Director, Witt/Kieffer, Inc. (executive search) (2016-2024); Director, NuStar GP, LLC (energy) (2021-2024); Director, Sonida Senior Living, Inc. (residential community operator) (2016-2021); Director, NVR, Inc. (homebuilding) (2013-2020); Director, Middleburg Trust Company (wealth management) (2014-2019); Director, Colonial Williamsburg Company (2012-2021); Regent, University of Massachusetts Global (since 2021); Director and Chair, ChildFund International (2012-2021); Trustee, Brandman University (2010-2021); Director, Richmond Forum (2012-2019). |
| Jakki L. Haussler<br>c/o Morgan, Lewis & Bockius LLP<br>Counsel to the Independent Directors<br>One State Street<br>Hartford, CT 06103<br>Birth Year: 1957 | Director | Since January <br>2015 | Chairperson of the Audit Committee (since January 2023) and Director or Trustee of various Morgan Stanley Funds (since January 2015); Chairman, Opus Capital Group (since 1996); formerly, Chief Executive Officer, Opus Capital Group (1996-2019); Director, Capvest Venture Fund, LP (May 2000-December 2011); Partner, Adena Ventures, LP (July 1999-December 2010); Director, The Victory Funds (February 2005-July 2008). | 80 | Director, Ingram Micro Holding Corporation and Member, Nominating and Corporate Governance Committee (since October 2024); Director, Vertiv Holdings Co. (VRT) (since August 2022); Director of Cincinnati Bell Inc. and Member, Audit Committee and Chairman, Governance and Nominating Committee (2008-2021); Director of Service Corporation International and Member of the Audit Committee and Chair of the Investment Committee; Formerly, Director, Barnes Group Inc. (2021-2025); Member of Chase College of Law Center for Law and Entrepreneurship Board of Advisors; Director of Best Transport (2005-2019); Director of Chase College of Law Board of Visitors; formerly, Member, University of Cincinnati Foundation Investment Committee. |

---

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Directors and Officers Information (unaudited) (cont'd)

Independent Directors (cont'd):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Name, Address and Birth<br>Year of Independent Director | Position(s)<br>Held with<br>Registrant | Length of<br>Time <br>Served\* | Principal Occupation(s) During Past 5 Years<br>and Other Relevant Professional Experience | Number of<br>Funds in <br>Fund<br>Complex<br>Overseen <br>by<br>Independent<br>Director\*\* | Other Directorships Held by <br>Independent Director During <br>Past 5 Years\*\*\* |
| Dr. Manuel H. Johnson<br>c/o Johnson Smick International, Inc.<br>220 I Street, NE<br>Suite 200<br>Washington, D.C. 20002<br>Birth Year: 1949 | Director | Since July 1991 | Senior Partner, Johnson Smick International, Inc. (consulting firm); Chairperson of the Fixed Income, Liquidity and Alternatives Investment Committee, Chairperson of the Investment Committee (2006-2020) and Director or Trustee of various Morgan Stanley Funds (since July 1991); Co-Chairman and a founder of the Group of Seven Council (G7C) (international economic commission); formerly, Chairperson of the Audit Committee (July 1991-September 2006); Vice Chairman of the Board of Governors of the Federal Reserve System and Assistant Secretary of the U.S. Treasury. | 79 | Director of NVR, Inc. (home construction). |
| Michael F. Klein<br>c/o Morgan, Lewis & Bockius LLP<br>Counsel to the Independent Directors<br>One State Street<br>Hartford, CT 06103<br>Birth Year: 1958 | Director | Since August <br>2006 | Chairperson of the Risk Committee (since January 2021); Managing Director, Aetos Alternatives Management, LP (since March 2000); Co-President, Aetos Alternatives Management, LP (since January 2004) and Co-Chief Executive Officer of Aetos Alternatives Management, LP (since August 2013); Chairperson of the Fixed Income Sub-Committee of the Investment Committee (2006-2020) and Director or Trustee of various Morgan Stanley Funds (since August 2006); formerly, Managing Director, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management and President, various Morgan Stanley Funds (June 1998-March 2000); Principal, Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment Management (August 1997-December 1999). | 79 | Director of certain investment funds managed or sponsored by Aetos Alternatives Management, LP; Formerly, Director of Sanitized AG and Sanitized Marketing AG (specialty chemicals) (2021-2025). |

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------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Directors and Officers Information (unaudited) (cont'd)

Independent Directors (cont'd):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Name, Address and Birth<br>Year of Independent Director | Position(s)<br>Held with<br>Registrant | Length of<br>Time <br>Served\* | Principal Occupation(s) During Past 5 Years<br>and Other Relevant Professional Experience | Number of<br>Funds in <br>Fund<br>Complex<br>Overseen <br>by<br>Independent<br>Director\*\* | Other Directorships Held by <br>Independent Director During <br>Past 5 Years\*\*\* |
| Patricia A. Maleski<br>c/o Morgan, Lewis & Bockius LLP<br>Counsel to the Independent Directors<br>One State Street<br>Hartford, CT 06103<br>Birth Year: 1960 | Director | Since January <br>2017 | Chairperson of the Compliance and Insurance Committee; Director or Trustee of various Morgan Stanley Funds (since January 2017); Managing Director, JPMorgan Asset Management (2004-2016); Oversight and Control Head of Fiduciary and Conflicts of Interest Program (2015-2016); Chief Control Officer — Global Asset Management (2013-2015); President, JPMorgan Funds (2010-2013); Chief Administrative Officer (2004-2013); various other positions including Treasurer and Board Liaison (since 2001). | 80 | Formerly, Trustee (January 2022 to March 2023), Treasurer (January 2023 to March 2023), and Finance Committee (January 2022 to March 2023), Nutley Family Service Bureau, Inc. |
| W. Allen Reed<br>c/o Morgan, Lewis & Bockius LLP<br>Counsel to the Independent Directors<br>One State Street<br>Hartford, CT 06103<br>Birth Year: 1947 | Chair of the Board and Director | Chair of the Board since August <br>2020 and Director since August <br>2006 | Chair of the Boards of various Morgan Stanley Funds (since August 2020); Director or Trustee of various Morgan Stanley Funds (since August 2006); formerly, Vice Chair of the Boards of various Morgan Stanley Funds (January 2020-August 2020); President and Chief Executive Officer of General Motors Asset Management; Chairman and Chief Executive Officer of the GM Trust Bank and Corporate Vice President of General Motors Corporation (August 1994-December 2005). | 79 | Formerly, Director of Legg Mason, Inc. (2006-2019); and Director of the Auburn University Foundation (2010-2015). |

---

\* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.

\*\* The Fund Complex includes (as of December 31, 2025) all open-end and closed-end funds (including all of their portfolios) advised by Morgan Stanley Investment Management Inc. (the "Adviser") and any funds that have an adviser that is an affiliated person of the Adviser (including, but not limited to, Morgan Stanley AIP GP LP).

\*\*\* This includes any directorships at public companies and registered investment companies held by the Directors at any time during the past five years.

------

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**December 31, 2025**

Directors and Officers Information (unaudited) (cont'd)

---

| | | | |
|:---|:---|:---|:---|
| Name, Address and Birth Year of Executive Officer | Position(s) <br>Held with<br>Registrant | Length of<br>Time Served\* | Principal Occupation(s) During Past 5 Years |
| Deidre A. Downes<br>1633 Broadway<br>New York, NY 10019<br>Birth Year: 1977 | Chief Compliance Officer  | Since November 2021 | Managing Director of the Adviser (since January 2024) and Chief Compliance Officer of various Morgan Stanley Funds (since November 2021). Formerly, Vice President and Corporate Counsel at PGIM and Prudential Financial (October 2016-December 2020). |
| John H. Gernon<br>1585 Broadway<br>New York, NY 10036<br>Birth Year: 1963 | President and Principal Executive Officer | Since September 2013 | President and Principal Executive Officer of the Equity and Fixed Income Funds and the Morgan Stanley AIP Funds (since September 2013) and the Liquidity Funds and various money market funds (since May 2014) in the Fund Complex; Managing Director of the Adviser. |
| Michael J. Key<br>1585 Broadway<br>New York, NY 10036<br>Birth Year: 1979 | Vice President | Since June 2017 | Vice President of the Equity and Fixed Income Funds, Liquidity Funds, various money market funds and the Morgan Stanley AIP Funds in the Fund Complex (since June 2017); Managing Director of the Adviser; Head of Product Development for Equity and Fixed Income Funds (since August 2013). |
| Deidre E. Walsh<br>1 Post Office Square<br>Boston, MA 02109<br>Birth Year: 1971 | Secretary and Chief Legal Officer | Since June 2025 | Managing Director (since 2021) of the Adviser and various entities affiliated with the Adviser; Vice President of various entities affiliated with the Adviser (since 2003); Secretary (since June 2025) and Chief Legal Officer (since June 2025) of various Morgan Stanley Funds. |
| Francis J. Smith<br>750 Seventh Avenue<br>New York, NY 10019<br>Birth Year: 1965 | Treasurer and Principal Financial Officer | Treasurer since July 2003 and Principal Financial Officer since September 2002 | Managing Director of the Adviser and various entities affiliated with the Adviser; Treasurer (since July 2003) and Principal Financial Officer of various Morgan Stanley Funds (since September 2002). |

---

The Fund does not make available copies of its statement of additional information because the Fund's shares are not continuously offered, which means that the statement of additional information of the Fund has not been updated after completion of the Fund's offerings and the information contained in the Fund's statement of additional information may have become outdated.

\* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves an indefinite term, until his or her successor is elected.

------

**Adviser and Administrator**

Morgan Stanley Investment Management Inc.<br>1585 Broadway<br>New York, New York 10036

**Sub-Adviser**

Morgan Stanley Investment Management Limited<br>25 Cabot Square, Canary Wharf<br>London, E14 4QA, England

**Custodian**

State Street Bank and Trust Company<br>One Congress Street<br>Boston, Massachusetts 02114

**Stockholder Servicing Agent**

Computershare Trust Company, N.A.<br>P.O. Box 505000<br>Louisville, Kentucky 40233

**Legal Counsel**

Dechert LLP<br>1095 Avenue of the Americas<br>New York, New York 10036

**Counsel to the Independent Directors**

Morgan, Lewis & Bockius LLP<br>One State Street<br>Hartford, Connecticut 06103

**Independent Registered Public Accounting Firm**

Ernst & Young LLP<br>200 Clarendon Street<br>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/shareholderreports. All investments involve risks, including the possible loss of principal.© 2025 Morgan Stanley

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| | |
|:---|:---|
| ![](j2622574_za007.jpg)  | CEMSDAAN EXP 02.28.27 |

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(b) Not applicable.

**Item 2. Code of Ethics**

The registrant (sometimes referred to as the "Fund") has adopted a code of ethics applicable to its Principal Executive Officer and Principal Financial Officer. The registrant undertakes to provide a copy of such code of ethics to any person upon request, without charge, by calling 1-800-262-1122. The registrant has amended the code of ethics as described in Form N-CSR during the period covered by the report. The new Fund policy is substantially similar to the superseded Fund policy but now has an expanded scope that applies to 1940 Act Fund families. The registrant has not granted any waiver, including an implicit waiver, from a provision of the code of ethics as described in Form N-CSR during the period covered by this report.

**Item 3. Audit Committee Financial Expert**

The registrant's Board of Directors has determined that Jakki L. Haussler, an "independent" Trustee, is an "audit committee financial expert" serving on its audit committee. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or the liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Directors in the absence of such designation or identification.

**Item 4. Principal Accountant Fees and Services**

**(a) –(d)**

The following table presents the aggregate fees billed to the registrant for the registrant's fiscal years ended December 31, 2024 and December 31, 2025 by the registrant's principal accountant, Ernst & Young LLP, for professional services rendered for the audit of the registrant's annual financial statements and fees billed for other services rendered by Ernst & Young LLP during those periods.

2025

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Registrant |  | Covered Entities(1) |  |
| Audit Fees | $78517 |  | $N/A |  |
| Non-Audit Fees |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Audit Related Fees | $— | (2) | $— | (2) |
| &nbsp;&nbsp;&nbsp;Tax Fees | $— | (3) | $— | (4) |
| &nbsp;&nbsp;&nbsp;All Other Fees | $— |  | $— | (5) |
| Total Non-Audit Fees | $— |  | $— |  |
| Total | $78517 |  | $— |  |

---

2024

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Registrant |  | Covered Entities(1) |  |
| Audit Fees | $78517 |  | $N/A |  |
| Non-Audit Fees |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Audit Related Fees | $— | (2) | $— | (2) |
| &nbsp;&nbsp;&nbsp;Tax Fees | $— | (3) | $— | (4) |
| &nbsp;&nbsp;&nbsp;All Other Fees | $— |  | $— | (5) |
| Total Non-Audit Fees | $— |  | $— |  |
| Total | $78517 |  | $— |  |

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N/A – Not applicable, as not required by Item 4.

(1) Covered Entities include the Adviser (excluding sub-advisors) and any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Registrant.

(2) Audit-Related Fees represent assurance and related services provided that are reasonably related to the performance of the audit of the financial statements of the Covered Entities' and funds advised by the Adviser or its affiliates, specifically data verification and agreed-upon procedures related to asset securitizations and agreed-upon procedures engagements.

(3) Tax Fees represent tax compliance, tax planning and tax advice services provided in connection with the preparation and review of the Registrant's tax returns.

(4) Tax Fees represent tax compliance, tax planning and tax advice services provided in connection with the review of Covered Entities' tax returns.

(5) The Fees included under "All Other Fees" are for services provided by Ernst & Young LLP related to surprise examinations for certain investment accounts to satisfy SEC Custody Rules and consulting services related to merger integration for sister entity to the Adviser.

(e)(1) The registrant's audit committee has adopted policies and procedures relating to the pre-approval of services provided by the registrant's principal accountant (the "Pre-Approval Policies"). The Pre-Approval Policies establish a framework intended to assist the audit committee in the proper discharge of its pre-approval responsibilities. As a general matter, the Pre-Approval Policies (i) specify certain types of audit, audit-related, tax, and other services determined to be pre-approved by the audit committee; and (ii) delineate specific procedures governing the mechanics of the pre-approval process, including the approval and monitoring of audit and non-audit service fees. Unless a service is specifically pre-approved under the Pre-Approval Policies, it must be separately pre-approved by the Audit Committee.

The Pre-Approval Policies and the types of audit and non-audit services pre-approved therein must be reviewed and ratified by the registrant's audit committee at least annually. The registrant's audit committee maintains full responsibility for the appointment, compensation, and oversight of the work of the registrant's principal accountant.

(e)(2) No services described in paragraphs (b)-(d) above were approved by the registrant's audit committee pursuant to the "de minimis exception" set forth in Rule 2-01 (c)(7)(i)(C) of Regulation S-X.

(f) Not applicable.

(g) See table above.

(h) The registrant's audit committee has considered whether the provision by the registrant's principal accountant of non-audit services to the registrant's investment adviser and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X is compatible with maintaining the principal accountant's independence.

(i) Not applicable.

(j) Not applicable

**Item 5. Audit Committee of Listed Registrants**

The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act whose members are:

Nancy C. Everett, Eddie A. Grier and Jakki L. Haussler.

**Item 6. Schedule of Investments**

(a) Please see schedule of investments contained in the Report to Stockholders
 included under Item 1 of this Form N-CSR.

(b) Not applicable.

**Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies**

Not applicable.

**Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies**

Not applicable.

**Item 9. Proxy Disclosures for Open-End Management Investment Companies**

Not applicable.

**Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies**

Not applicable.

**Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract**

Not applicable.

**Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies**

MSIM has adopted the "Equity Proxy Voting Policy and Procedures" (the "Equity Proxy Voting Policy") for voting clients' proxies. The Equity Proxy Voting Policy is reasonably designed to address and oversee the process by which proxies are voted in a manner free from material conflicts of interest and in the best interest of MSIM clients. MSIM has retained independent proxy services to provide assistance with proxy vote execution, reporting and record-keeping. The Equity Proxy Voting Policy, which applies globally, sets forth detailed guidelines as to how proxies will be voted on behalf of MSIM clients. The MSIM Proxy Review Committee (the "Proxy Review Committee") through the Global Stewardship Team is responsible for updating and implementing the Equity Proxy Voting Policy; the Proxy Review Committee consists of members from MSIM's global investment teams. The Proxy Review Committee meets as needed, but at least quarterly, to address ongoing proxy issues and conflicts of interest that arise in connection with proxy voting.

**Item 13. Portfolio Managers of Closed-End Management Investment Companies**

**Morgan Stanley Emerging Markets Debt Fund, Inc.**

**FUND MANAGEMENT**

PORTFOLIO MANAGEMENT. As of the date of this report, the Fund is managed by members of the Emerging Markets Debt team. The team consists of portfolio managers and analysts. Current members of the team jointly and primarily responsible for the day-to-day management of the Fund's portfolio are Sahil Tandon, Managing Director of Morgan Stanley Investment Management Limited ("MSIM Limited" or the "Sub-Adviser"), Akbar Causer, Kyle Lee, and Federico Sequeda Managing Directors of Morgan Stanley Investment Management, Inc. ("MSIM" or the "Adviser").

Mr. Tandon has been associated with the Sub-Adviser in an investment management capacity since August 2019. Prior to August 2019, Mr. Tandon was associated with the Adviser in an investment capacity from 2004. Mr. Tandon began managing the Fund in October 2015. Mr. Causer has been associated with the Adviser or its affiliates in an investment management capacity since April 2017. Mr. Lee has been associated with the Adviser or its affiliates in an investment management capacity since July 2007. Mr. Sequeda has been associated with the Adviser or its affiliates in an investment management capacity since September 2010. Messrs. Causer, Lee and Sequeda began managing the Fund in July 2022. Messrs. Tandon, Causer, Lee and Sequeda are co-portfolio managers. Certain other members of the team collaborate to manage the assets of the Fund but are not primarily responsible for the day-to-day management of the Fund.

The composition of the team may change from time to time.

**OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGERS**

As of December 31, 2025:

Mr. Tandon managed 22 other registered investment companies with a total of approximately $35.3 billion in assets; 3 pooled investment vehicles other than registered investment companies with approximately $1.3 billion in assets; and 2 other account with a total of approximately $1.6 billion in assets.

Mr. Causer managed 6 other registered investment companies with a total of approximately $8.7 billion in assets; 2 pooled investment vehicles other than registered investment companies with approximately $1.1 billion in assets; and 3 other accounts with a total of approximately $1.6 billion in assets.

Mr. Lee managed 17 other registered investment company with a total of approximately $29.1 billion in assets; 3 pooled investment vehicles other than registered investment companies with approximately $1.3 billion in assets; and 2 other accounts with a total of approximately $1.6 billion in assets.

Mr. Sequeda managed 22 other registered investment company with a total of approximately $35.1 billion in assets; 5 pooled investment vehicle other than registered investment companies with approximately $1.9 billion in assets; and 2 other accounts with a total of approximately $1.6 billion in assets.

Because the portfolio managers manage assets for other investment companies, pooled investment vehicles and/or other accounts (including institutional clients, pension plans and certain high net worth individuals), there may be an incentive to favor one client over another resulting in conflicts of interest. For instance, the Adviser may receive fees from certain accounts that are higher than the fee it receives from the Fund, or it may receive a performance-based fee on certain accounts. In those instances, the portfolio manager may have an incentive to favor the higher and/or performance-based fee accounts over the Fund. In addition, a conflict of interest could exist to the extent the Adviser has proprietary investments in certain accounts, where portfolio managers have personal investments in certain accounts or when certain accounts are investment options in the Adviser's employee benefits and/or deferred compensation plans. The portfolio managers may have an incentive to favor these accounts over others. If the Adviser manages accounts that engage in short sales of securities of the type in which the Fund invests, the Adviser could be seen as harming the performance of the Fund for the benefit of the accounts engaging in short sales if the short sales cause the market value of the securities to fall. The Adviser has adopted trade allocation and other policies and procedures that it believes are reasonably designed to address these and other conflicts of interest.

***Portfolio Manager Compensation Structure***

Morgan Stanley's compensation structure is based on a total reward system of base salary and incentive compensation, which is paid either in the form of cash bonus, or for employees meeting the specified deferred compensation eligibility threshold, partially as a cash bonus and partially as mandatory deferred compensation. Deferred compensation granted to Investment Management employees are generally granted as a mix of deferred cash awards under the Investment Management Alignment Plan (IMAP) and equity-based awards in the form of stock units. The portion of incentive compensation granted in the form of a deferred compensation award and the terms of such awards are determined annually by the Compensation, Management Development and Succession Committee of the Morgan Stanley Board of Directors*.*

*<u>Base salary compensation</u>*. Generally, portfolio managers receive base salary compensation based on the level of their position with the Adviser.

*<u>Incentive compensation</u>.* In addition to base compensation, portfolio managers may receive discretionary year-end compensation.

Incentive compensation may include:

● Cash Bonus.

● Deferred Compensation:

● A mandatory program that defers a portion of incentive compensation into restricted stock units or other awards based on Morgan Stanley common stock or other plans that are subject to vesting and other conditions.

● IMAP is a cash-based deferred compensation plan designed to increase the alignment of participants' interests with the interests of the Advisor's clients. For eligible employees, a portion of their deferred compensation is mandatorily deferred into IMAP on an annual basis. Awards granted under IMAP are notionally invested in referenced funds available pursuant to the plan, which are funds advised by MSIM and its affiliates that are investment advisers. Portfolio managers are required to notionally invest a minimum of 40% of their account balance in the designated funds that they manage and are included in the IMAP notional investment fund menu.

● Deferred compensation awards are typically subject to vesting over a multi-year period and are subject to cancellation through the payment date for competition, cause (i.e., any act or omission that constitutes a breach of obligation to the Company, including failure to comply with internal compliance, ethics or risk management standards, and failure or refusal to perform duties satisfactorily, including supervisory and management duties), disclosure of proprietary information, and solicitation of employees or clients. Awards are also subject to clawback through the payment date if an employee's act or omission (including with respect to direct supervisory responsibilities) causes a restatement of the Firm's consolidated financial results, constitutes a violation of the Firm's global risk management principles, policies and standards, or causes a loss of revenue associated with a position on which the employee was paid and the employee operated outside of internal control policies.

MSIM compensates employees based on principles of pay-for-performance, market competitiveness and risk management. Eligibility for, and the amount of any, discretionary compensation is subject to a multi-dimensional process. Specifically, consideration is given to one or more of the following factors, which can vary by portfolio management team and circumstances:

● Revenue and profitability of the business and/or each fund/account managed by the portfolio manager

● Revenue and profitability of the Firm

● Return on equity and risk factors of both the business units and Morgan Stanley

● Assets managed by the portfolio manager

● External market conditions

● New business development and business sustainability

● Contribution to client objectives

● Team, product and/or MSIM and its affiliates that are investment advisers performance

● The pre-tax investment performance of the funds/accounts managed by the portfolio manager (which may, in certain cases, be measured against the applicable benchmark(s) and/or peer group(s) over one, three and five-year periods)

● Individual contribution and performance

Further, the Firm's Global Incentive Compensation Discretion Policy requires compensation managers to consider only legitimate, business related factors when exercising discretion in determining variable incentive compensation, including adherence to Morgan Stanley's core values, conduct, disciplinary actions in the current performance year, risk management and risk outcomes.

SECURITIES OWNERSHIP OF PORTFOLIO MANAGERS

As of December 31, 2025, the portfolio managers did not own any shares of the Fund.

**Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers**

**REGISTRANT PURCHASE OF EQUITY SECURITIES**

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| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;Period | &nbsp;&nbsp;(a) Total <br> Number of <br> Shares (or <br> Units) <br> Purchased | &nbsp;&nbsp;(b) Average<br> Price Paid per <br> Share (or Unit) | &nbsp;&nbsp;(c) Total <br> Number of <br> Shares (or <br> Units)<br> Purchased as <br> Part of Publicly <br> Announced <br> Plans or <br> Programs | &nbsp;&nbsp;(d) Maximum <br> Number (or <br> Approximate<br> Dollar Value)<br> of Shares (or <br> Units) that May <br> Yet Be <br> Purchased<br> Under the Plans <br> or Programs |
| &nbsp;&nbsp;January 2025 | &nbsp;&nbsp;— |  | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;February 2025 | &nbsp;&nbsp;— |  | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;March 2025 | &nbsp;&nbsp;— |  | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;April 2025 | &nbsp;&nbsp;— |  | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;May 2025 | &nbsp;&nbsp;— |  | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;June 2025 | &nbsp;&nbsp;— |  | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;July 2025 | &nbsp;&nbsp;— |  | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;August 2025 | &nbsp;&nbsp;— |  | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;September 2025 | &nbsp;&nbsp;— |  | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;October 2025 | &nbsp;&nbsp;— |  | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;November 2025 | &nbsp;&nbsp;— |  | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;December 2025 | &nbsp;&nbsp;— |  | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp;Total | &nbsp;&nbsp;— | &nbsp;&nbsp;— | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |

---

**Item 15. Submission of Matters to a Vote of Security Holders**

There have been no material changes to the procedures by which shareholders may recommend nominee to the Fund's Board of Directors since the Fund last provided disclosure in response to this item.

**Item 16. Controls and Procedures**

(a) It is the conclusion of the registrant's
 principal executive officer and principal financial officer that the effectiveness of the
 registrant's current disclosure controls and procedures (such disclosure controls and
 procedures having been evaluated within 90 days of the date of this filing) provide reasonable
 assurance that the information required to be disclosed by the registrant has been recorded,
 processed, summarized and reported within the time period specified in the Commission's
 rules and forms and that the information required to be disclosed by the registrant
 has been accumulated and communicated to the registrant's principal executive officer
 and principal financial officer in order to allow timely decisions regarding required disclosure.

(b) There
 have been no changes in the registrant's internal controls over financial reporting
 during 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 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies**

(a) For the fiscal year ended December 31, 2025, the Fund earned income and incurred the following costs and expenses as a result of its securities lending activities:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | Cash |  |  |  |  | Total | Net Income |
|  |  | Collateral |  |  |  |  | Costs of | from Securities |
| Gross | Revenue | Management | Administrative | Indemnification | Rebates to | Other | Securities | Lending |
| Income<sup>1</sup> | Split<sup>2</sup> | Fees<sup>3</sup> | Fees<sup>4</sup> | Fees<sup>5</sup> | Borrowers | Fees | Lending Activities | Activities |
| N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |

---

1. Gross
 Income includes income from the reinvestment of cash collateral.

2. Revenue
 split represents the share of revenue generated by the securities lending program and paid
 to State Street.

3. Cash
 collateral management fees include fees deducted from a pooled cash collateral reinvestment
 vehicle that are not included in the revenue split.

4. These
 administrative fees are not included in the revenue split.

5. These
 indemnification fees are not included in the revenue split.

(b) Pursuant to an agreement between the Fund and State Street Bank and Trust Company ("State Street"), the Fund may lend its securities through State Street as securities lending agent to certain qualified borrowers. As securities lending agent of the Fund, State Street administers the Fund's securities lending program. These services include arranging the loans of securities with approved borrowers and their return to the Fund upon loan termination, negotiating the terms of such loans, selecting the securities to be loaned and monitoring dividend activity relating to loaned securities. State Street also marks to market daily the value of loaned securities and collateral and may require additional collateral as necessary from borrowers. State Street may also, in its capacity as securities lending agent, invest cash received as collateral in pre-approved investments in accordance with the Securities Lending Authorization Agreement. State Street maintains records of loans made and income derived therefrom and makes available such records that the Fund deems necessary to monitor the securities lending program.

**Item 18. Recovery of Erroneously Awarded Compensation**

Not applicable.

**Item 19. Exhibits**

---

| | |
|:---|:---|
| (a)(1) | Registrant's Code of Ethics – Not applicable (please see Item 2). |
| [(a)(2)(i)](tm262257d3_ex99-cert.htm#a_001) | [Principal Financial Officer's Section 302 certification.](tm262257d3_ex99-cert.htm#a_001) |
| [(a)(2)(ii)](tm262257d3_ex99-cert.htm#a_002) | [Principal Executive Officer's Section 302 certification.](tm262257d3_ex99-cert.htm#a_002) |
| [(b)](tm262257d3_ex99-906cert.htm) | [Combined Section 906 certification.](tm262257d3_ex99-906cert.htm) |

---

**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.

<u>Morgan Stanley Emerging Markets Debt Fund, Inc</u>

---

| | |
|:---|:---|
| By: | /s/ John H. Gernon |
|  | John H. Gernon |
|  | Principal Executive Officer |
| Date: | February 26, 2026 |

---

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

---

| | |
|:---|:---|
| By: | /s/ Francis J. Smith |
|  | Francis J. Smith |
|  | Principal Financial Officer |
| Date: | February 26, 2026 |
| By: | /s/ John H. Gernon |
|  | John H. Gernon |
|  | Principal Executive Officer |
| Date: | February 26, 2026 |

---

## Ex-99.Cert

**Exhibit 99.CERT**

**Morgan Stanley Emerging Markets Debt Fund, Inc**

**FORM N-CSR**

**Exhibit 19(a)(2)(i)**

**<u>CERTIFICATION</u>**

I, Francis J. Smith, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this report on Form N-CSR of Morgan Stanley
 Emerging Markets Debt Fund, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement
 of a material fact or omit to state a material fact necessary to make the statements made,
 in light of the circumstances under which such statements were made, not misleading with
 respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial
 information included in this report, fairly present in all material respects the financial
 condition, results of operations, changes in net assets, and cash flows (if the financial
 statements are required to include a statement of cash flows) of the registrant as of, and
 for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible
 for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under
 the Investment Company Act of 1940) and internal control over financial reporting (as defined
 in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and
 have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such
 disclosure controls and procedures to be designed under our supervision, to ensure that material
 information relating to the registrant, including its consolidated subsidiaries, is made
 known to us by others within those entities, particularly during the period in which this
 report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused
 such internal control over financial reporting to be designed under our supervision, to provide
 reasonable assurance regarding the reliability of financial reporting and the preparation
 of financial statements for external purposes in accordance with generally accepted accounting
 principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls
 and procedures and presented in this report our conclusions about the effectiveness of the
 disclosure controls and procedures, as of a date within 90 days prior to the filing date
 of this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal
 control over financial reporting that occurred during 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; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed
 to the registrant's auditors and the audit committee of the registrant's board of directors
 (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design
 or operation of internal control over financial reporting which are reasonably likely to
 adversely affect the registrant's ability to record, process, summarize, and report financial
 information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other
 employees who have a significant role in the registrant's internal control over financial
 reporting.

---

| | | |
|:---|:---|:---|
| Date: | February 26, 2026 | /s/ Francis J. Smith |
| | | Francis J. Smith |
| | | Principal Financial Officer |

---

**Morgan Stanley Emerging Markets Debt Fund, Inc**

**FORM N-CSR**

**Exhibit 19(a)(2)(ii)**

**<u>CERTIFICATION</u>**

I, John H. Gernon, certify that:

1. I have reviewed this report on Form N-CSR of Morgan Stanley Emerging
 Markets Debt Fund, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement
 of a material fact or omit to state a material fact necessary to make the statements made,
 in light of the circumstances under which such statements were made, not misleading with
 respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial
 information included in this report, fairly present in all material respects the financial
 condition, results of operations, changes in net assets, and cash flows (if the financial
 statements are required to include a statement of cash flows) of the registrant as of, and
 for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible
 for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under
 the Investment Company Act of 1940) and internal control over financial reporting (as defined
 in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and
 have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such
 disclosure controls and procedures to be designed under our supervision, to ensure that material
 information relating to the registrant, including its consolidated subsidiaries, is made
 known to us by others within those entities, particularly during the period in which this
 report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused
 such internal control over financial reporting to be designed under our supervision, to provide
 reasonable assurance regarding the reliability of financial reporting and the preparation
 of financial statements for external purposes in accordance with generally accepted accounting
 principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls
 and procedures and presented in this report our conclusions about the effectiveness of the
 disclosure controls and procedures, as of a date within 90 days prior to the filing date
 of this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal
 control over financial reporting that occurred during 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; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed
 to the registrant's auditors and the audit committee of the registrant's board of directors
 (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design
 or operation of internal control over financial reporting which are reasonably likely to
 adversely affect the registrant's ability to record, process, summarize, and report financial
 information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other
 employees who have a significant role in the registrant's internal control over financial
 reporting.

---

| | | |
|:---|:---|:---|
| Date: | February 26, 2026 | /s/ John H. Gernon |
| | | John H. Gernon |
| | | Principal Executive Officer |

---

## Exhibit 99.906

**Exhibit 99.906CERT**

**<u>Form N-CSR Item 19(b) Exhibit</u>**

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certify in their capacity as Principal Financial Officer and Principal Executive Officer, respectively, of Morgan Stanley Emerging Markets Debt Fund, Inc. (the "Fund"), that:

(a) The Annual Report of the Fund on Form N-CSR for the period ended
 December 31, 2025 (the "Report") fully complies with the requirements of
 Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended;
 and

(b) The information contained in the Report fairly presents, in all material
 respects, the financial condition and the results of operations of the **Fund** for such
 period.

**A signed original of this written statement required by section 906 has been provided to the Fund** **and will be retained by the Fund and furnished to the Securities and Exchange Commission or its staff upon request.**

Morgan Stanley Emerging Markets Debt Fund, Inc.

---

| |
|:---|
| Date: February 26, 2026 |
| /s/ Francis J. Smith |
| Francis J. Smith |
| Principal Financial Officer |
| Date: February 26, 2026 |
| /s/ John H. Gernon |
| John H. Gernon |
| Principal Executive Officer |

---