Note 1--Organization and Business:
The MainStay Funds (the "Trust") was organized on January 9, 1986 as a Massachusetts business trust. The
Trust is registered under the Investment Company Act of 1940, as amended, (the "1940 Act") as an open-end
management investment company and is comprised of twenty-two funds (collectively referred to as the "Funds").
These financial statements and notes relate only to MainStay International Bond Fund (the "Fund").
The Fund currently offers two classes of shares. Class A shares, whose distribution commenced on January 3,
1995, are offered at net asset value per share plus an initial sales charge. Class B shares are offered without an
initial sales charge, although a declining contingent deferred sales charge may be imposed on redemptions made
within six years of purchase. Class A shares and Class B shares bear the same voting (except for issues that
relate solely to one class), dividend, liquidation and other rights and conditions except that the Class B shares are
subject to higher distribution fee rates. Each class of shares bears distribution and/or service fee payments under
a distribution plan pursuant to Rule 12b-1 under the 1940 Act.
The Fund's investment objective is to seek to provide competitive overall return commensurate with an
acceptable level of risk by investing primarily in a portfolio consisting of non-U.S. (primarily government) debt
There are certain risks involved in investing in foreign securities that are in addition to the usual risks inherent in
domestic instruments. These risks include those resulting from future adverse political and economic
developments and possible imposition of currency exchange blockages or other foreign governmental laws or
Note 2--Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the Fund:
Valuation of Fund Shares. The net asset value per share of each class of shares is calculated on each day the
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