UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-4841
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MFS MUNICIPAL INCOME TRUST
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(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
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(Address of principal executive offices) (Zip code)
Susan S. Newton
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
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(Name and address of agents for service)
Registrant's telephone number, including area code: (617) 954-5000
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Date of fiscal year end: October 31
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Date of reporting period: April 30, 2007
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This Form N-CSR is being filed for the purpose of amending and restating the
Form N-CSR filed on July 6, 2007 (Accession No. 0000950156-07-000443) to
correct an error reported in the Registrant's semi-annual shareholder report
for the period ended April 30, 2007 (the "April Report"). In the April Report
under the section entitled "Ratios (To Average Net Assets Applicable to Common
Shares) and Supplemental Data" in the "Financial Highlights", the Registrant
incorrectly reported the Net Investment Income ratio for the six-month period
ended April 30, 2007 as 5.21% because the Registrant included both preferred
and common shares in its calculation. The corrected Net Investment Income Ratio
for the period is 7.47%.
ITEM 1. REPORTS TO STOCKHOLDERS.
MFS(R) MUNICIPAL INCOME TRUST
M F S(R)
INVESTMENT MANAGEMENT
[graphic omitted]
SEMIANNUAL REPORT
4/30/07
MFM-SEM
MFS(R) MUNICIPAL INCOME TRUST
(As Restated)
LETTER FROM THE CEO 1
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PORTFOLIO COMPOSITION 2
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PORTFOLIO MANAGERS' PROFILES 3
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PERFORMANCE SUMMARY 4
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DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN 6
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PORTFOLIO OF INVESTMENTS 7
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STATEMENT OF ASSETS AND LIABILITIES 32
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STATEMENT OF OPERATIONS 34
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STATEMENTS OF CHANGES IN NET ASSETS 35
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FINANCIAL HIGHLIGHTS 36
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NOTES TO FINANCIAL STATEMENTS 38
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 48
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BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT 49
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PROXY VOTING POLICIES AND INFORMATION 49
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QUARTERLY PORTFOLIO DISCLOSURE 49
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CONTACT INFORMATION BACK COVER
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TRUST OBJECTIVE: The Trust seeks to provide high income exempt from Federal
income taxes.
New York Stock Exchange Symbol: MFM
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NOT FDIC INSURED o MAY LOSE VALUE o
NO BANK OR CREDIT UNION GUARANTEE o NOT A DEPOSIT o
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR
NCUA/NCUSIF
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LETTER FROM THE CEO
[Photo of Robert J. Manning]
Dear Shareholders,
The past year has been a great example of why investors should keep their eyes
on the long term.
In 2006 the Dow Jones Industrial Average returned 19%. As of mid-May 2007, it
had returned another 8% and continued to reach new highs. But the Dow's upward
rise has not been without hiccups. After hitting new records in February, the
Dow lost 5.8% between February 20 and March 5, as stocks were sold off around
the globe. As we have said before, markets are volatile, and investors should
make sure they have an investment plan that can carry them through the peaks
and troughs.
If you are focused on a long-term investment strategy, the short-term ups and
downs of the markets should not necessarily dictate portfolio action on your
part. Both the bond and stock markets are cyclical. In our view, investors who
remain committed to a long-term plan are more likely to achieve their financial
goals. We believe you should not let the headlines guide you in your investment
decisions and should be cautious about overreacting to short-term volatility.
In any market environment, we believe individual investors are best served by
following a three-pronged investment strategy of allocating their holdings
across the major asset classes, diversifying within each class, and regularly
rebalancing their portfolios to maintain their desired allocations. Of course,
these strategies cannot guarantee a profit or protect against a loss. Investing
and planning for the long term require diligence and patience, two traits that
in our experience are essential to capitalizing on the many opportunities the
financial markets can offer -- through both up and down economic cycles.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management(R)
June 15, 2007
The opinions expressed in this letter are subject to change, may not be relied
upon for investment advice, and no forecasts can be guaranteed.
PORTFOLIO COMPOSITION
PORTFOLIO STRUCTURE (i)
Bonds 101.0%
Cash & Other Net Assets (1.0)%
TOP FIVE INDUSTRIES (i)
Healthcare Revenue - Hospitals 29.6%
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Healthcare Revenue - Long Term Care 8.2%
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Industrial Revenue - Airlines 5.9%
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Utilities - Investor Owned 5.8%
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Tobacco 5.8%
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CREDIT QUALITY OF BONDS (r)
AAA 16.0%
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AA 3.6%
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A 10.3%
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BBB 28.3%
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BB 7.5%
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B 8.4%
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CCC 3.2%
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CC (o) 0.0%
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Not Rated 22.7%
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PORTFOLIO FACTS
Average Duration (d)(i) 6.7
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Average Life (i)(m) 15.9 yrs
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Average Maturity (i)(m) 18.5 yrs
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Average Credit Quality of Rated
Securities (long-term) (a) BBB+
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Average Credit Quality of Rated
Securities (short-term) (a) A-1
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(a) The average credit quality of rated securities is based upon a market
weighted average of portfolio holdings that are rated by public rating
agencies.
(d) Duration is a measure of how much a bond's price is likely to fluctuate
with general changes in interest rates, e.g., if rates rise 1.00%, a bond
with a 5-year duration is likely to lose about 5.00% of its value.
(i) For purposes of this presentation, the bond component includes both accrued
interest amounts and the equivalent exposure from any derivative holdings,
if applicable.
(m) The average maturity shown is calculated using the final stated maturity on
the portfolio's holdings without taking into account any holdings which
have been pre- refunded or pre-paid to an earlier date or which have a
mandatory put date prior to the stated maturity. The average life shown
takes into account these earlier dates.
(o) Less than 0.1%
(r) Each security is assigned a rating from Moody's Investors Service. If not
rated by Moody's, the rating will be that assigned by Standard & Poor's.
Likewise, if not assigned a rating by Standard & Poor's, it will be based
on the rating assigned by Fitch, Inc. For those portfolios that hold a
security which is not rated by any of the three agencies, the security is
considered Not Rated. Holdings in U.S. Treasuries and government agency
mortgage-backed securities, if any, are included in the "AAA"-rating
category. Percentages are based on the total market value of investments as
of 04/30/07.
From time to time "Cash & Other Assets" may be negative due to timing of cash
receipts and/or equivalent exposure from any derivative holdings.
Percentages are based on net assets, including preferred shares, as of
04/30/07, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
PORTFOLIO MANAGERS' PROFILES
Geoffrey L. Schechter, CFA, CPA, is a Senior Vice President of MFS Investment
Management (R) (MFS(R)) and a Municipal Fixed Income Portfolio Manager. He
also manages several other government bond portfolios for MFS. He joined MFS
as a portfolio manager, and was named Senior Vice President in 2002. He has
been a portfolio manager of the trust since July 2004. Geoffrey is a graduate
of the University of Texas and has an M.B.A. degree from Boston University. He
holds the Chartered Financial Analyst (CFA) and Certified Public Accountant
(CPA) designations.
Gary A. Lasman, CFA, is Vice President of MFS Investment Management (R)
(MFS(R)) and is a Municipal Fixed Income Portfolio Manager. He has been a
portfolio manager of the trust since April 2006. Gary is a graduate of the
University of California and has an M.B.A. from the University of Chicago. He
is a member of the Boston Security Analysts Society, Inc. and National
Federation of Municipal Analysts.
PERFORMANCE SUMMARY THROUGH 4/30/07
All results are historical. Investment return and principal value will
fluctuate, and shares, when sold, may be worth more or less than their
original cost. More recent returns may be more or less than those shown. Past
performance is no guarantee of future results.
PRICE SUMMARY
Six months ended 4/30/07
Date Price
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Net Asset Value 4/30/07 $7.99
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10/31/06 $8.06
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New York Stock Exchange Price 4/30/07 $8.40
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12/12/06(high) (t) $8.66
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11/1/06(low) (t) $8.22
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10/31/06 $8.20
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TOTAL RETURNS VS BENCHMARKS
Six months ended
4/30/07
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New York Stock Exchange Price (r) 5.44%
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Net Asset Value (r) 2.04%
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Lehman Brothers Municipal Bond Index (f) 1.59%
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(f) Source: FactSet Research Systems Inc.
(r) Includes reinvestment of dividends and capital gain distributions.
(t) For the period November 1, 2006 through April 30, 2007.
INDEX DEFINITION
Lehman Brothers Municipal Bond Index - a market-value-weighted index
representative of the tax-exempt bond market.
It is not possible to invest directly in an index.
NOTES TO PERFORMANCE SUMMARY
The trust's shares may trade at a discount to net asset value. Shareholders do
not have the right to cause the trust to repurchase their shares at net asset
value. The trust's shares also may trade at a premium to their net asset
value.
When trust shares trade at a premium, buyers pay more than the asset value
underlying trust shares, and shares purchased at a premium would receive less
than the amount paid for them in the event of the trust's liquidation. As a
result, the total returns that are calculated based on the net asset value and
New York Stock Exchange prices can be different.
The trust's monthly distributions may include a return of capital to
shareholders. Distributions that are treated for federal income tax purposes
as a return of capital will reduce each shareholder's basis in his or her
shares and, to the extent the return of capital exceeds such basis, will be
treated as gain to the shareholder from a sale of shares. Returns of
shareholder capital have the effect of reducing the trust's assets and may
increase the trust's expense ratio.
From time to time the trust may receive proceeds from litigation settlements,
without which performance would be lower.
In accordance with Section 23(c) of the Investment Company Act of 1940, the
trust hereby gives notice that it may from time to time repurchase shares of
the trust in the open market at the option of the Board of Trustees and on
such terms as the Trustees shall determine.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The trust offers a Dividend Reinvestment and Cash Purchase Plan that allows
you to reinvest either all of the distributions paid by the trust or only the
long-term capital gains. Purchases are made at the market price unless that
price exceeds the net asset value (the shares are trading at a premium). If
the shares are trading at a premium, purchases will be made at a discounted
price of either the net asset value or 95% of the market price, whichever is
greater. Twice each year you can also buy shares. Investments may be made in
any amount over $100 in January and July on the 15th of the month or
shortly thereafter.
If your shares are in the name of a brokerage firm, bank, or other nominee,
you can ask the firm or nominee to participate in the plan on your behalf. If
the nominee does not offer the plan, you may wish to request that your shares
be re-registered in your own name so that you can participate. There is no
service charge to reinvest distributions, nor are there brokerage charges for
shares issued directly by the trust. However, when shares are bought on the
New York Stock Exchange or otherwise on the open market, each participant pays
a pro rata share of the transaction expenses, including commissions. The
automatic reinvestment of distributions does not relieve you of any income tax
that may be payable (or required to be withheld) on the distributions.
To enroll in or withdraw from the plan, or if you have any questions, call
1-800-637-2304 any business day from 9 a.m. to 5 p.m. Eastern time. Please
have available the name of the trust and your account and Social Security
numbers. For certain types of registrations, such as corporate accounts,
instructions must be submitted in writing. Please call for additional details.
When you withdraw from the plan, you can receive the value of the reinvested
shares in one of two ways: a check for the value of the full and fractional
shares, or a certificate for the full shares and a check for the fractional
shares.
Effective May 1, 2007, Computershare Trust Company, N.A. (the Transfer Agent
for the trust) became the agent for the plan.
PORTFOLIO OF INVESTMENTS
4/30/07 (unaudited)
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by
broad-based asset classes.
Municipal Bonds - 142.6%
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ISSUER SHARES/PAR VALUE ($)
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Airport & Port Revenue - 4.9%
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Chicago Ohare Intl Arpt Rev, XLCA, 5.75%, 2022 (u) $ 3,000,000 $ 3,273,030
New York, NY, City Industrial Development Agency, Special
Facilities Rev. (Terminal One Group), 5.5%, 2024 275,000 295,345
Oklahoma City, OK, Airport Trust Rev., FSA, 5.75%, 2016 3,125,000 3,289,500
Port Authority, NY, Special Obligations Rev. (JFK
International), MBIA, 5.75%, 2022 7,000,000 7,208,320
Seattle, WA, Airport Trust Rev., FGIC, 5.625%, 2018 1,500,000 1,593,255
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$ 15,659,450
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General Obligations - General Purpose - 2.1%
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Kane Kendall County, IL, Capital Appreciation, "E", FGIC, 0%, 2023 $ 1,945,000 $ 875,678
Kane Kendall County, IL, Capital Appreciation, "E", FGIC, 0%, 2025 1,915,000 772,010
Lake County, IL, Land Acquisition & Development, 5.75%, 2010 (c) 1,000,000 1,069,445
New York, NY, "M", 5%, 2035 3,800,000 3,974,035
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$ 6,691,168
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General Obligations - Schools - 0.9%
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Aledo, TX, Independent School District, School Building, "A", PSF,
5.125%, 2033 $ 955,000 $ 1,007,873
De Soto, TX, Independent School District, School Building, PSF, 0%, 2031 555,000 165,035
De Soto, TX, Independent School District, School Building, PSF, 0%, 2034 415,000 104,713
De Soto, TX, Independent School District, School Building, PSF, 0%, 2036 555,000 125,680
Leander, TX, Independent School District, Capital Appreciation,
Refunding, School Building, FGIC, 0%, 2026 1,285,000 491,268
Leander, TX, Independent School District, Capital Appreciation,
Refunding, School Building, FGIC, 0%, 2031 1,295,000 369,101
Royse City, TX, Independent School District, School Building, PSF,
0%, 2027 955,000 354,104
Royse City, TX, Independent School District, School Building, PSF,
0%, 2029 965,000 320,563
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$ 2,938,337
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Healthcare Revenue - Hospitals - 41.8%
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Alexander City, AL, Special Care Facilities Financing
Authority Medical Facilities Rev. (Russell Hospital Corp.),
"A", 5.75%, 2036 $ 600,000 $ 628,662
Allegheny County, PA, Hospital Development Authority Rev.
(South Hills Health Systems), "B", 6.75%, 2010 (c) 500,000 542,115
Allegheny County, PA, Hospital Development Authority Rev.
(West Penn Allegheny Health), 9.25%, 2030 2,000,000 2,354,600
Allegheny County, PA, Hospital Development Authority Rev.
(West Penn Allegheny Health), "B", 9.25%, 2022 1,000,000 1,177,300
Arkansas Development Finance Authority Rev. (Washington
Regional Medical Center), 7.25%, 2010 (c) 500,000 545,605
Athens County, OH, Hospital Facilities Rev. (O'Bleness
Memorial Hospital), "A", 7.125%, 2033 1,500,000 1,623,345
Baldwin County, AL, Eastern Shore Health Care Authority Rev.
(Thomas Hospital), 5.75%, 2008 (c) 700,000 726,187
Brookhaven, NY, Civic Facilities Rev. (Memorial Hospital
Medical Center, Inc.), ETM, 7.75%, 2010 (c) 575,000 617,079
California Health Facilities Financing Authority Rev.
(Sutter Health), "A", 5%, 2042 550,000 568,535
California Health Facilities Financing Authority Rev.
(Sutter Health), "A", 5.25%, 2046 3,400,000 3,595,840
California Valley Health Systems, COP, 6.875%, 2023 700,000 705,593
Carroll County, IA, Hospital Rev. (St. Anthony Regional
Hospital), "A", 5%, 2031 500,000 505,920
Chautauqua County, NY, Industrial Development Agency, Civic
Facilities Rev. (Women's Christian Assn.), "A", 6.35%, 2017 215,000 220,229
Chautauqua County, NY, Industrial Development Agency, Civic
Facilities Rev. (Women's Christian Assn.), "A", 6.4%, 2029 960,000 976,426
Chemung County, NY, Civic Facilities Rev. (St. Joseph's
Hospital-Elmira), "A", 6%, 2013 425,000 427,342
Chemung County, NY, Civic Facilities Rev. (St. Joseph's
Hospital-Elmira), "B", 6.35%, 2013 105,000 108,065
Chester County, PA, Health & Educational Facilities Rev.
(Chester County Hospital), 6.75%, 2021 1,625,000 1,761,565
Citrus County, FL, Hospital Development Authority Rev.
(Citrus Memorial Hospital), 6.25%, 2023 925,000 998,260
Coffee County, GA, Hospital Authority Rev. (Coffee Regional
Medical Center, Inc.), 5%, 2026 40,000 40,603
Colorado Health Facilities Authority Rev. (Parkview Medical
Center), 6.6%, 2025 1,000,000 1,086,170
Colorado Health Facilities Authority Rev. (Parkview Medical
Center, Inc.), 6.5%, 2020 1,230,000 1,336,235
Colorado Health Facilities Authority Rev. (Portercare
Adventist Health Systems), 6.625%, 2011 (c) 675,000 762,109
Crittenden County, AR, Hospital Rev., 7%, 2020 1,030,000 1,044,317
Cuyahoga County, OH, Hospital Facilities Rev. (Canton,
Inc.), 7.5%, 2030 1,330,000 1,465,234
Delaware Health Facilities Authority Rev. (Nanticoke
Memorial Hospital), 5.625%, 2032 1,250,000 1,323,725
Denver, CO, Health & Hospital Authority Rev., 5.25%, 2013 635,000 644,436
Denver, CO, Health & Hospital Authority Rev., "A", 5.375%, 2018 1,500,000 1,526,070
Denver, CO, Health & Hospital Authority Rev., "A", 6%, 2023 250,000 265,348
Denver, CO, Health & Hospital Authority Rev., "A", 5.375%, 2028 860,000 868,703
Garden City, MI, Hospital Finance Authority Rev. (Garden
City Hospital), "A", 4.875%, 2027 1,275,000 1,254,753
Gaylord, MI, Hospital Finance Authority Rev. (Otsego
Memorial Hospital), 6.2%, 2025 250,000 260,920
Gaylord, MI, Hospital Finance Authority Rev. (Otsego
Memorial Hospital), 6.5%, 2031 295,000 312,098
Grand Forks, ND, Health Care Authority Rev. (Altru Health
Systems Obligated Group), 7.125%, 2024 755,000 824,702
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), 5.75%, 2031 1,000,000 1,031,950
Highlands County, FL, Health Facilities Authority Rev.
(Adventist Health Systems), "C", 5.25%, 2036 1,180,000 1,239,566
Highlands County, FL, Health Facilities Authority Rev.
(Adventist/Sunbelt Hospital), 6%, 2011 (c) 900,000 993,672
Houston County, AL, Health Care Authority Rev., AMBAC, 6.25%, 2009 (c) 2,000,000 2,136,280
Huntsville, AL, Health Care Authority Rev., 5.625%, 2011 (c) 875,000 945,026
Illinois Development Finance Authority, Hospital Authority
Rev. (Adventist/Sunbelt Hospital), 5.65%, 2009 (c) 1,750,000 1,845,988
Illinois Finance Authority Rev. (Kewanee Hospital), 5.1%, 2031 410,000 416,531
Illinois Health Facilities Authority Rev. (Centegra Heath
Systems), 5.25%, 2018 1,000,000 1,021,390
Indiana Health Facilities Financing Authority, Hospital Rev.
(Clarian Health), "A", 5%, 2039 375,000 383,265
Indiana Health Facilities Financing Authority, Hospital Rev.
(Community Hospital), "A", AMBAC, 5%, 2035 1,780,000 1,859,869
Indiana Health Facilities Financing Authority, Hospital Rev.
(Munster Medical Research Foundation, Inc.), "A", 6.375%, 2031 3,990,000 4,246,278
Indiana Health Facilities Financing Authority, Hospital Rev.
(Riverview Hospital), 6.125%, 2031 1,000,000 1,074,750
Johnson City, TN, Health & Educational Facilities, Hospital
Rev. (Mountain States Health), "A", 5.5%, 2036 355,000 379,190
Joplin, MO, Industrial Development Authority Health
Facilities Rev. (Freeman Health Systems), 5.5%, 2029 440,000 464,842
Joplin, MO, Industrial Development Authority Health
Facilities Rev. (Freeman Health Systems), 5.75%, 2035 475,000 515,399
Kentucky Economic Development Finance Authority (Norton
Healthcare), "A", 6.5%, 2010 (c) 1,965,000 2,160,380
Kentucky Economic Development Finance Authority, Unrefunded
(Norton Healthcare), "A", 6.5%, 2020 3,035,000 3,274,856
Knox County, TN, Health, Educational, Hospital & Housing
Facilities Board Rev. (Baptist Health Systems), 6.5%, 2031 1,725,000 1,800,935
Lauderdale County & Florence, AL, Health Care Authority Rev.
(Coffee Health Group), MBIA, 5.625%, 2021 3,000,000 3,198,030
Lufkin, TX, Health Facilities Rev. (Memorial Health System
of East Texas), 5.7%, 2008 (c) 995,000 1,029,417
Macomb County, MI, Hospital Finance Authority Rev. (Mount
Clemens General Hospital), 5.75%, 2025 1,000,000 1,043,940
Macomb County, MI, Hospital Finance Authority Rev. (Mount
Clemens General Hospital), 5.875%, 2034 935,000 976,701
Madison County, ID, Hospital Rev., COP, 5.25%, 2037 310,000 317,716
Maryland Health & Higher Educational Facilities Authority
Rev. (Medstar Health), 5.5%, 2033 380,000 400,934
Maryland Health & Higher Educational Facilities Authority
Rev. (North Arundel Hospital), 6.5%, 2010 (c) 1,500,000 1,638,885
Massachusetts Health & Educational Facilities Authority Rev.
(Berkshire Health Systems), "E", 6.25%, 2031 1,900,000 2,059,106
Massachusetts Health & Educational Facilities Authority Rev.
(Caritas Christi), "A", 5.7%, 2015 500,000 516,545
Massachusetts Health & Educational Facilities Authority Rev.
(Caritas Christi), "B", 6.5%, 2012 600,000 654,708
Massachusetts Health & Educational Facilities Authority Rev.
(Jordan Hospital), "D", 5.25%, 2018 1,400,000 1,419,110
Massachusetts Health & Educational Facilities Authority Rev.
(Northern Berkshire Health), "B", 6.375%, 2034 640,000 671,040
Massachusetts Health & Educational Facilities Authority Rev.
(Saints Memorial Medical Center), "A", 6%, 2023 465,000 467,785
Miami Beach, FL, Health Facilities Authority Rev. (Mount
Sinai Medical Center), 6.75%, 2029 810,000 918,329
Miami Beach, FL, Health Facilities Authority Rev. (Mount
Sinai Medical Center), "A", 6.7%, 2019 995,000 1,091,207
Mississippi Business Finance Corp., Health Facilities Rev.
(Rush Medical Foundation, Inc.), 5.625%, 2008 (c) 845,000 879,172
Monongalia County, WV, Building Commission Hospital Rev.
(Monongalia General Hospital), "A", 5%, 2030 425,000 432,956
Monroe County, MI, Hospital Finance Authority, Hospital Rev.
(Mercy Memorial Hospital Corp.), 5.5%, 2035 1,020,000 1,068,685
Monroe County, NY, Industrial Development Agency, Civic
Facilities Rev. (Highland Hospital of Rochester), 5%, 2025 65,000 66,763
Montgomery, AL, Special Care Facilities, Financing Authority
Rev. (Baptist Health), "A-2", MBIA, 0% to 2007, 5% to 2014(c) 1,725,000 1,790,033
Montgomery, AL, Special Care Facilities, Financing Authority
Rev. (Baptist Health), "C", 5.25%, 2014 (c) 760,000 830,551
Mount Lebanon, PA, Hospital Authority Rev. (St. Clair
Memorial Hospital), 5.625%, 2032 435,000 456,876
Nassau County, NY, Industrial Development Agency, Civic
Facilities Rev. (North Shore Health System), 5.625%, 2010 510,000 519,445
Nassau County, NY, Industrial Development Agency, Civic
Facilities Rev. (North Shore Health System), 5.875%, 2011 415,000 429,957
Neosho County, KS, Hospital Authority Rev., "A", 5.05%, 2026 325,000 326,898
Neosho County, KS, Hospital Authority Rev., "A", 5.15%, 2031 230,000 231,210
New Hampshire Health & Educational Facilities Authority Rev.
(Catholic Medical Center), "A", 6.125%, 2012 (c) 880,000 984,456
New Hampshire Health & Educational Facilities Authority Rev.
(Catholic Medical Center), "A", 6.125%, 2032 120,000 130,068
New Hampshire Health & Educational Facilities Authority Rev.
(Covenant Health), 6.5%, 2017 820,000 905,419
New Jersey Health Care Facilities, Financing Authority Rev.
(Children's Specialized Hospital), "A", 5.5%, 2030 245,000 257,191
New Jersey Health Care Facilities, Financing Authority Rev.
(St. Peter's University Hospital), "A", 6.875%, 2030 3,000,000 3,228,570
New Mexico State Hospital Equipment Loan Council, Hospital
Rev. (Rehoboth McKinley Christian Hospital), "A", 5.25%, 2026 440,000 434,654
New York Dormitory Authority Rev., Non State Supported Debt
(Mt. Sinai NYU Health), 5.5%, 2026 635,000 648,703
New York Dormitory Authority Rev., Non State Supported Debt
(Mt. Sinai NYU Health), "C", 5.5%, 2026 500,000 508,455
New York Dormitory Authority Rev., Non State Supported Debt
(NYU Hospitals Center), "A", 5%, 2026 1,750,000 1,810,480
New York, NY, Health & Hospital Corp. Rev., "A", 5.25%, 2017 700,000 722,498
New York, NY, Industrial Development Agency, Civic
Facilities Rev. (Staten Island University Hospital), "A", 6.375%, 2031 495,000 515,206
Norman, OK, Regional Hospital Authority Rev., 5.375%, 2036 1,395,000 1,446,908
North Texas Health Facilities Development Corp. Rev. (United
Regional Health Care System, Inc.), 6%, 2023 1,000,000 1,078,880
Ohio County, WV, County Commission Health System Rev. (Ohio
Valley Medical Center), 5.75%, 2013 850,000 839,324
Oklahoma Development Finance Authority Rev. (Comanche County
Hospital), "B", 6.6%, 2031 1,665,000 1,820,661
Quincy, IL, Quincy Hospital Rev. (Blessing Hospital), 5%, 2029 315,000 320,676
Rhode Island Health & Education Building Corp. Rev.,
Hospital Financing (Lifespan Obligated Group), 6.5%, 2012 (c) 505,000 571,483
Rhode Island Health & Educational Building Corp., Hospital
Financing (Lifespan Obligated Group), 6.375%, 2012 (c) 1,560,000 1,756,108
Rhode Island Health & Educational Building Corp., Hospital
Financing (Lifespan Obligated Group), 6.375%, 2021 245,000 270,482
Royston, GA, Hospital Authority Rev. (Ty Cobb Healthcare
Systems, Inc.), 6.375%, 2014 955,000 985,016
Salida, CO, Hospital District Rev., 5.25%, 2036 1,155,000 1,176,310
Salt Lake City, UT, Hospital Authority Rev., AMBAC, INFLOS,
ETM (Intermountain Health Care), 10.448%, 2020 (c)(p) 600,000 602,964
Shelby County, TN, Educational & Hospital Facilities Board
Hospital Rev., Refunded Balance (Methodist Healthcare),
6.375%, 2012 (c) 625,000 705,131
Shelby County, TN, Educational & Housing Facilities Board
Hospital Rev. (Methodist Healthcare), 6.25%, 2012 (c) 185,000 207,611
Shelby County, TN, Educational & Housing Facilities Board
Hospital Rev. (Methodist Healthcare), 6.25%, 2012 (c) 315,000 353,499
Shelby County, TN, Educational & Housing Facilities Board
Hospital Rev. (Methodist Healthcare), 6.375%, 2012 (c) 375,000 423,079
South Carolina Jobs & Economic Development Authority Rev.
(Bon Secours Health Systems, Inc.), "A", 5.625%, 2030 710,000 749,086
South Carolina Jobs & Economic Development Authority,
Hospital Facilities Rev. (Palmetto Health Alliance), 6.25%, 2031 835,000 907,562
South Dakota Health & Education Facilities Authority Rev.
(Prairie Lakes Health Care System), 5.625%, 2032 670,000 697,772
Southwestern Illinois Development Authority Rev. (Anderson
Hospital), 5.5%, 2020 60,000 62,077
Southwestern Illinois Development Authority Rev. (Anderson
Hospital), 5.625%, 2029 870,000 894,230
Springfield, TN, Health & Educational Facilities Rev.
(Northcrest Medical Center), 5.25%, 2018 1,400,000 1,407,336
Steubenville, OH, Hospital Authority Rev. (Trinity Health
Center), 6.5%, 2030 1,300,000 1,405,196
Stillwater, OK, Medical Center Authority, 5.625%, 2023 1,000,000 1,066,670
Tallahassee, FL, Health Facilities Rev. (Tallahassee
Memorial Healthcare), 6.25%, 2020 3,085,000 3,249,986
Texas Metro Health Facilities Development Corp., Metro
Health Facilities Development Rev. (Wilson N. Jones Memorial
Hospital), 7.2%, 2021 700,000 727,629
Texas Metro Health Facilities Development Corp., Metro
Health Facilities Development Rev. (Wilson N. Jones Memorial
Hospital), 7.25%, 2031 1,000,000 1,038,770
Tom Green County, TX, Health Facilities Rev. (Shannon Health
System), 6.75%, 2021 1,250,000 1,353,238
University of Colorado, Hospital Authority Rev., "A", 5.25%, 2039 245,000 255,738
Upper Illinois River Valley Development, Health Facilities
Rev. (Morris Hospital), 6.625%, 2031 600,000 652,158
Valley, AL, Special Care Facilities, Financing Authority
Rev. (Lanier Memorial Hospital), 5.6%, 2016 600,000 611,724
Wapello County, IA, Hospital Authority Rev. (Ottumwa
Regional Health Center), 6.375%, 2012 (c) 1,500,000 1,691,160
Washington County, AR, Hospital Rev. (Regional Medical
Center), "A", 5%, 2035 250,000 254,968
Weirton, WV, Municipal Hospital Building, Commission Rev.
(Weirton Hospital Medical Center), 6.375%, 2031 1,115,000 1,171,408
Weslaco, TX, Health Facilities Rev. (Knapp Medical Center),
6.25%, 2032 1,000,000 1,063,680
West Plains, MO, Industrial Development Authority Rev.
(Ozarks Medical Center), 6.75%, 2024 170,000 175,525
West Shore, PA, Hospital Authority Rev. (Holy Spirit
Hospital), 6.2%, 2026 1,250,000 1,329,725
Wichita, KS, Hospital Authority Rev. (Via Christi Health
System), 6.25%, 2020 1,500,000 1,647,255
Wisconsin Health & Educational Facilities Authority Rev.
(Aurora Health Care, Inc.), MBIA, 5.25%, 2017 5,000,000 5,116,600
Wisconsin Health & Educational Facilities Authority Rev.
(Aurora Health Care, Inc.), 6.875%, 2030 1,000,000 1,140,080
Wisconsin Health & Educational Facilities Authority Rev.
(Marshfield Clinic), "A", 5.375%, 2034 490,000 511,031
Yonkers, NY, Industrial Development Agency, Civic Facilities
Rev. (St. John's Riverside Hospital), 6.8%, 2016 665,000 708,770
Yonkers, NY, Industrial Development Agency, Civic Facilities
Rev. (St. John's Riverside Hospital), "A", 7.125%, 2031 490,000 525,290
Yonkers, NY, Industrial Development Agency, Civic Facilities
Rev. (St. Joseph's Hospital), "C", 6.2%, 2020 750,000 753,420
-------------
$ 134,196,173
----------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Term Care - 11.5%
----------------------------------------------------------------------------------------------------------------
Abilene, TX, Health Facilities Development Co., Retirement
Facilities Rev. (Sears Methodist Retirement), "A", 7%, 2033 $ 345,000 $ 374,235
Arizona Health Facilities Authority Rev. (The Terraces
Project), 7.75%, 2033 750,000 848,910
Bell County, TX, Health Facilities Development Rev.
(Advanced Living Technology), 8.125%, 2016 1,085,000 1,058,320
Bell County, TX, Health Facilities Development Rev.
(Advanced Living Technology), 8.5%, 2026 2,405,000 2,310,940
Bucks County, PA, Industrial Development Authority Rev.
(Ann's Choice, Inc.), 6.125%, 2025 430,000 456,174
Cambria County, PA, Industrial Development Authority Rev.
(Beverly Enterprises, Inc.) ETM, 10%, 2012 (c) 360,000 418,572
Chartiers Valley, PA, Industrial & Commercial Development
Authority (Asbury Health Center Project), 5.75%, 2022 150,000 155,676
Chester County, PA, Industrial Development Authority Rev.
(RHA Nursing Home), 8.5%, 2032 580,000 604,319
Colorado Health Facilities Authority Rev. (Christian Living
Communities Project), "A", 5.75%, 2037 395,000 412,917
Colorado Health Facilities Authority Rev. (Covenant
Retirement Communities, Inc.), "B", 6.125%, 2033 1,000,000 1,075,400
Colorado Health Facilities Authority Rev. (Evangelical), 6.9%, 2010 (c) 1,830,000 2,057,249
Colorado Health Facilities Authority Rev. (Evangelical), 6.9%, 2025 1,170,000 1,298,174
Cumberland County, PA, Municipal Authority Rev. (Wesley), "A",
7.25%, 2013 (c) 720,000 847,202
Cumberland County, PA, Municipal Authority Rev. (Wesley), "A",
7.25%, 2013 (c) 280,000 329,468
Franklin County, OH, Healthcare Facilities Rev. (Ohio
Presbyterian), 7.125%, 2011 (c) 1,000,000 1,137,000
Fulton County, GA, Residential Care Facilities (Canterbury
Court), "A", 6.125%, 2034 330,000 347,615
Greenville County, SC, Hospital Rev. (Chestnut Hill), "A",
8%, 2015 1,985,000 1,968,822
Hawaii Department of Budget & Finance, Special Purpose Rev.
(Kahala Nui Senior Living Community), 8%, 2033 500,000 586,560
Huntsville-Redstone Village, AL, Special Care Facilities
Financing Authority (Redstone Village Project), 5.5%, 2028 525,000 525,205
Huntsville-Redstone Village, AL, Special Care Facilities
Financing Authority (Redstone Village Project), 5.5%, 2043 540,000 533,601
Illinois Finance Authority Rev. (Bond Anticipation Notes
Tallgrass), 13%, 2012 210,000 209,912
Illinois Finance Authority Rev. (Clare at Water Tower), "A", 6%, 2025 490,000 514,284
Illinois Finance Authority Rev. (Landing at Plymouth Place),
"A", 6%, 2037 490,000 514,931
Illinois Finance Authority Rev. (Montgomery Place), "A", 5.75%, 2038 520,000 538,585
Iowa Finance Authority Senior Housing Authority Rev.
(Bethany Life Communities), "A", 5.55%, 2041 230,000 229,577
Iowa Finance Authority, Health Care Facilities Rev. (Care
Initiatives Project), 9.25%, 2011 (c) 1,155,000 1,405,612
Iowa Finance Authority, Health Care Facilities Rev. (Care
Initiatives Project), "A", 5.5%, 2025 800,000 840,880
Iowa Finance Authority, Health Care Facilities Rev. (Care
Initiatives Project), "B", 5.75%, 2018 895,000 923,837
Lenexa, KS, Health Care Facilities Rev. (Lakeview Village,
Inc.), "B", 6.25%, 2026 500,000 511,250
Lenexa, KS, Health Care Facilities Rev. (Lakeview Village,
Inc.), "C", 6.875%, 2032 500,000 538,465
Maine Health & Higher Educational Facilities Rev. (Piper
Shores), 7.5%, 2009 (c) 770,000 811,950
Millbrae, CA, Residential Facilities Rev. (Magnolia of
Millbrae), "A", 7.375%, 2027 1,830,000 1,892,165
Montana Facility Finance Authority Rev. (Senior Living St.
Johns Lutheran), "A", 6.125%, 2036 470,000 491,996
Montgomery County, PA, Higher Education & Health Authority
Rev. (AHF/Montgomery), 6.875%, 2036 1,195,000 1,262,972
Montgomery County, PA, Industrial Development Authority Rev.
(Whitemarsh Continuing Care), 6.125%, 2028 250,000 265,413
Montgomery County, PA, Industrial Development Authority Rev.
(Whitemarsh Continuing Care), 6.25%, 2035 510,000 540,789
New Jersey Economic Development Authority Rev. (Courthouse
Convalescent Center), "A", 8.7%, 2014 650,000 654,245
New Jersey Economic Development Authority Rev. (Lions Gate),
"A", 5.875%, 2037 310,000 322,025
New Jersey Economic Development Authority Rev. (Seabrook
Village, Inc.), 5.25%, 2036 505,000 513,630
New Jersey Health Care Facilities Financing Authority Rev.
(Cherry Hill), 8%, 2027 1,000,000 1,021,820
Norfolk, VA, Redevelopment & Housing Authority Rev. (Fort
Norfolk Retirement Community), "A", 6%, 2025 125,000 130,964
Norfolk, VA, Redevelopment & Housing Authority Rev. (Fort
Norfolk Retirement Community), "A", 6.125%, 2035 90,000 94,300
North Carolina Medical Care Commission, Health Care
Facilities Rev. (Presbyterian Homes), 5.4%, 2027 485,000 503,357
North Carolina Medical Care Commission, Health Care
Facilities Rev. (Presbyterian Homes), 5.5%, 2031 295,000 307,240
Shelby County, TN, Health, Educational & Housing Facilities
Board Rev. (Germantown Village), 7.25%, 2034 820,000 840,254
Sterling, IL (Hoosier Care), 7.125%, 2034 700,000 721,469
Suffolk County, NY, Industrial Development Agency (Medford
Hamlet Assisted Living), 6.375%, 2039 500,000 519,710
Travis County, TX, Health Facilities Development Corp.,
Retirement Facilities Rev. (Querencia Barton Creek), 5.5%, 2025 460,000 478,225
Travis County, TX, Health Facilities Development Corp.,
Retirement Facilities Rev. (Querencia Barton Creek), 5.65%, 2035 695,000 724,809
Washington State Housing Finance Commission Non-profit Rev.
(Skyline at First Hill), "A", 5.625%, 2027 215,000 221,317
Washington State Housing Finance Commission Non-profit Rev.
(Skyline at First Hill), "A", 5.625%, 2038 1,120,000 1,144,360
-------------
$ 37,036,702
----------------------------------------------------------------------------------------------------------------
Human Services - 3.3%
----------------------------------------------------------------------------------------------------------------
Alaska Industrial Development & Export Authority Community
Provider Rev. (Boys & Girls Home of Alaska, Inc.), 5.875%, 2027 $ 210,000 $ 215,716
Alaska Industrial Development & Export Authority Community
Provider Rev. (Boys & Girls Home of Alaska, Inc.), 6%, 2036 325,000 335,754
Colorado Educational & Cultural Facilities Authority
(Cerebral Palsy Project), "A", 6.25%, 2036 500,000 527,255
Iowa Finance Authority, Community Provider (Boys & Girls
Home), 6.25%, 2008 (c) 500,000 519,505
Lehigh County, PA, General Purpose Authority (Kidspeace
Corp.), 6%, 2023 3,000,000 2,946,270
Louisiana Local Government, Environmental Facilities &
Community Development Authority Rev. (CDF Healthcare), "A", 7%, 2036 500,000 511,935
Louisiana Local Government, Environmental Facilities &
Community Development Authority Rev. (CDF Healthcare), "C", 7%, 2036 375,000 376,283
Louisiana Local Government, Environmental Facilities &
Community Development Authority Rev. (Westside Rehab Center
Project), "A", 6.85%, 2036 1,100,000 1,228,722
Louisiana Local Government, Environmental Facilities &
Community Development Authority Rev. (Westside Rehab Center
Project), "B", 6.5%, 2013 115,000 119,040
New York, NY, Industrial Development Agency, Civic Facility
Rev. (A Very Special Place), "A", 5.75%, 2029 1,000,000 972,050
New York, NY, Industrial Development Agency, Civic Facility
Rev. (Special Needs Facilities), 6.5%, 2017 1,030,000 1,074,239
Orange County, FL, Health Facilities Authority Rev. (GF/
Orlando Healthcare Facilities), 8.75%, 2011 440,000 462,744
Orange County, FL, Health Facilities Authority Rev. (GF/
Orlando Healthcare Facilities), 9%, 2031 1,000,000 1,096,210
Osceola County, FL, Industrial Development Authority Rev.
(Community Provider), 7.75%, 2017 292,000 292,785
-------------
$ 10,678,508
----------------------------------------------------------------------------------------------------------------
Industrial Revenue - Airlines - 8.4%
----------------------------------------------------------------------------------------------------------------
Alliance Airport Authority, TX (American Airlines, Inc.), 5.25%, 2029 $ 1,145,000 $ 1,109,654
Alliance Airport Authority, TX (American Airlines, Inc.), 5.75%, 2029 2,410,000 2,447,933
Dallas Fort Worth, TX, International Airport Facility
Improvement Corp. (American Airlines, Inc.), 7.25%, 2030 2,530,000 2,560,790
Houston, TX, Airport Systems Rev., Special Facilities
(Continental, Inc.), "E", 6.75%, 2029 1,810,000 1,951,886
Los Angeles, CA, Regional Airport Lease Rev. (AMR Corp.), "C", 7.5%, 2024 850,000 972,018
New Jersey Economic Development Authority, Special
Facilities Rev. (Continental Airlines, Inc.), 6.25%, 2029 580,000 601,240
New Jersey Economic Development Authority, Special
Facilities Rev. (Continental Airlines, Inc.), 7.2%, 2030 1,595,000 1,737,418
New York, NY, City Industrial Development Agencies Rev.
(American Airlines, Inc.), 7.75%, 2031 1,065,000 1,288,959
New York, NY, City Industrial Development Agencies Rev.
(Jetblue Airways Corp.), 5%, 2020 225,000 223,369
New York, NY, City Industrial Development Agencies Rev.
(Jetblue Airways Corp.), 5.125%, 2030 115,000 114,171
New York, NY, Industrial Development Agencies Rev. (American
Airlines, Inc.), 7.125%, 2011 1,355,000 1,442,790
New York, NY, Industrial Development Agencies Rev. (American
Airlines, Inc.), 7.625%, 2025 7,725,000 9,329,869
New York, NY, Industrial Development Agencies Rev.
(Continental Airlines, Inc.), 7.25%, 2008 110,000 112,459
New York, NY, Industrial Development Agencies Rev.
(Continental Airlines, Inc.), 8%, 2012 300,000 325,443
Tulsa, OK, Municipal Airport Trust Rev. (American Airlines,
Inc.), "B", 5.65%, 2035 (a) 40,000 40,679
Tulsa, OK, Municipal Airport Trust Rev. (AMR Corp.), "B", 6%, 2035 (a) 2,500,000 2,550,275
-------------
$ 26,808,953
----------------------------------------------------------------------------------------------------------------
Industrial Revenue - Chemicals - 1.0%
----------------------------------------------------------------------------------------------------------------
Red River Authority, TX, Pollution Control Rev. (Celanese
Project) "B", 6.7%, 2030 $ 1,920,000 $ 2,090,650
Sweetwater County, WY, Solid Waste Disposal Rev. (FMC
Corp.), 5.6%, 2035 985,000 1,043,056
-------------
$ 3,133,706
----------------------------------------------------------------------------------------------------------------
Industrial Revenue - Environmental Services - 2.0%
----------------------------------------------------------------------------------------------------------------
California Pollution Control Financing Authority, Solid
Waste Disposal Rev. (Browning Ferris, Inc.), "A", 5.8%, 2016 $ 1,000,000 $ 1,021,490
California Statewide Community Development Authority, Solid
Waste Facilities Rev. (Republic Services, Inc.), "A", 4.95%, 2012 1,000,000 1,030,400
Gloucester County, NJ, Solid Waste Resource Recovery Rev.
(Waste Management, Inc.), 6.85%, 2029 (a) 850,000 902,318
Henrico County, VA, Industrial Development Authority Rev.
(Browning Ferris, Inc.), 5.45%, 2014 1,750,000 1,791,650
Nevada Department of Business & Industry Rev. (Republic
Services, Inc.), 5.625%, 2026 (a) 750,000 810,698
New Morgan, PA, Industrial Development Authority, Solid
Waste Disposal Rev. (New Morgan Landfill Co., Inc./Browning
Ferris, Inc.), 6.5%, 2019 1,000,000 1,007,460
-------------
$ 6,564,016
----------------------------------------------------------------------------------------------------------------
Industrial Revenue - Metals - 0.2%
----------------------------------------------------------------------------------------------------------------
Mobile County, AL, Industrial Development Authority Rev.
(Ipsco, Inc.), 6.875%, 2030 (a) $ 650,000 $ 682,936
----------------------------------------------------------------------------------------------------------------
Industrial Revenue - Other - 5.1%
----------------------------------------------------------------------------------------------------------------
Gulf Coast, TX, Industrial Development Authority (Valero
Energy Corp.), 5.6%, 2031 $ 1,750,000 $ 1,805,388
Gulf Coast, TX, Industrial Development Authority Rev.
(Microgy Holdings LLC Project), 7%, 2036 620,000 666,500
Gulf Coast, TX, Waste Disposal Rev. (Valero Energy Corp.), 6.65%, 2032 1,000,000 1,086,170
Hardeman County, TN, Correctional Facilities Rev., 7.75%, 2017 2,100,000 2,148,804
Madison County, FL, Rev. (Twin Oaks Project), "A", 6%, 2025 550,000 572,193
New Jersey Economic Development Authority (Gloucester Marine), "C",
6.5%, 2015 700,000 744,569
New York, NY, City Industrial Development Agency Rev.,
Liberty Bonds (IAC/InterActiveCorp), 5%, 2035 620,000 639,480
Park Creek Metropolitan District, CO, Rev. (Custodial
Receipts), "CR-1", 7.875%, 2032 (a)(n) 1,270,000 1,407,643
Park Creek Metropolitan District, CO, Rev. (Custodial
Receipts), "CR-2", 7.875%, 2032 (a)(n) 580,000 642,860
Pennsylvania Economic Development Financing Authority,
Finance Authority Facilities Rev. (Amtrak), "A", 6.25%, 2031 2,000,000 2,147,960
Philadelphia, PA, Industrial Development Authority Rev.
(Host Marriott LP), 7.75%, 2017 3,255,000 3,258,157
Port Corpus Christi, TX, Industrial Development Authority
Rev. (Citgo Petroleum Corp.), 8.25%, 2031 700,000 720,146
Tooele County, UT, Hazardous Waste Treatment Rev. (Union
Pacific Corp.), 5.7%, 2026 385,000 399,010
-------------
$ 16,238,880
----------------------------------------------------------------------------------------------------------------
Industrial Revenue - Paper - 4.8%
----------------------------------------------------------------------------------------------------------------
Bedford County, VA, Industrial Development Authority Rev.
(Nekoosa Packaging), "A", 6.55%, 2025 $ 1,000,000 $ 1,043,830
Butler, AL, Industrial Development Board, Solid Waste
Disposal Rev. (Georgia Pacific Corp.), 5.75%, 2028 155,000 160,313
Delta County, MI, Economic Development Corp., Environmental
Improvements Rev. (Mead Westvaco Escanaba), "A", 6.25%, 2012 (c) 1,000,000 1,110,530
Delta County, MI, Economic Development Corp., Environmental
Improvements Rev. (Mead Westvaco Escanaba), "B", 6.45%, 2012 (c) 500,000 556,165
Effingham County, GA, Development Authority, Solid Waste
Disposal Rev. (Fort James), 5.625%, 2018 850,000 857,140
Hodge, LA, Utilities Rev. (Stone Container Corp.), 7.45%, 2024 3,335,000 4,165,382
Lowndes County, MS, Solid Waste Disposal & Pollution Control
Rev. (Weyerhaeuser Co.), 6.8%, 2022 2,000,000 2,432,000
Navajo County, AZ, Industrial Development Authority Rev.
(Stone Container Corp.), 7.2%, 2027 880,000 898,806
Onondaga County, NY, Industrial Development Authority Rev.,
Solid Waste Disposal Rev. (Solvay Paperboard LLC), 6.8%, 2014 900,000 937,647
West Point, VA, Industrial Development Authority, Solid
Waste Disposal Rev. (Chesapeake Corp.), 6.25%, 2019 1,870,000 1,876,489
West Point, VA, Industrial Development Authority, Solid
Waste Disposal Rev. (Chesapeake Corp.), "A", 6.375%, 2019 700,000 702,415
York County, SC, Pollution Control Rev. (Bowater, Inc.),
"A", 7.4%, 2010 730,000 731,694
-------------
$ 15,472,411
----------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Entertainment & Tourism - 0.9%
----------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority Rev.,
East Valley Tourist (Cabazon Casino), "A", 9.25%, 2020 (n) $ 1,155,000 $ 1,264,910
Mississippi Development Bank, Special Obligation (Diamond
Lakes Utilities), 6.25%, 2017 1,000,000 1,024,010
New York Liberty Development Corp. Rev. (National Sports
Museum), 6.125%, 2019 420,000 440,269
Seneca Nation Indians, NY, Capital Improvements Authority
Special Obligation, 5%, 2023 (n) 275,000 278,240
-------------
$ 3,007,429
----------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Other - 2.7%
----------------------------------------------------------------------------------------------------------------
Austin, TX, Convention Center (Convention Enterprises,
Inc.), "A", 6.6%, 2011 (c) $ 400,000 $ 438,348
Austin, TX, Convention Center (Convention Enterprises,
Inc.), "A", 6.7%, 2011 (c) 600,000 659,556
Austin, TX, Convention Enterprises, Inc., Rev., "B", 5.75%, 2034 775,000 821,384
Cleveland Cuyahoga County, OH, Port Authority Rev.
(Cleveland City), "B", 4.5%, 2030 1,155,000 1,129,047
Cleveland-Cuyahoga County, OH, Port Authority Rev.
(Fairmount), "B", 5.125%, 2025 190,000 196,160
Cleveland-Cuyahoga County, OH, Port Authority Rev. (Myers
University), "E", 5.6%, 2025 135,000 142,106
Cleveland-Cuyahoga County, OH, Port Authority Rev.
(Perrysburg Project), 4.8%, 2035 225,000 219,868
Dayton Montgomery County, OH, Port Authority Rev. (Parking
Garage), 6.125%, 2024 1,130,000 1,232,525
Gallery Certificate Trust, PA, Parking Rev., 4.5%, 2013 (n) 695,000 693,909
Maryland Economic Development Corp. (Chesapeake Bay
Conference Center), "A", 5%, 2031 405,000 408,580
San Antonio, TX, Convention Center, Hotel Financial Corp.,
Contract Rev. (Empowerment Zone), "A", AMBAC, 5%, 2034 695,000 720,013
Southwestern Illinois Development Authority Rev., Solid
Waste Disposal Rev., 5.9%, 2014 280,000 282,509
Summit County, OH, Port Authority Building Rev. (Seville
Project), "A", 5.1%, 2025 195,000 200,035
Summit County, OH, Port Authority Building Rev. (Twinsburg
Township), "D", 5.125%, 2025 160,000 164,619
Summit County, OH, Port Authority Building Rev. (Workforce
Policy Board), "F", 4.875%, 2025 915,000 925,989
Toledo Lucas County, OH, Port Authority Development Rev.
(Northwest Ohio Bond Fund), "B", 4.8%, 2035 265,000 258,955
Toledo Lucas County, OH, Port Authority Development Rev.
(Northwest Ohio Bond Fund), "C", 5.125%, 2025 90,000 91,022
-------------
$ 8,584,625
----------------------------------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 4.5%
----------------------------------------------------------------------------------------------------------------
Bay County, FL, Housing Finance Authority, Multi-Family Rev.
(Andrews Place II Apartments), FSA, 5%, 2035 $ 210,000 $ 215,179
Bay County, FL, Housing Finance Authority, Multi-Family Rev.
(Andrews Place II Apartments), FSA, 5.1%, 2046 390,000 399,325
Bexar County TX, Multi-Family Housing Rev. (American
Opportunity Housing), "A", MBIA, 5.7%, 2021 1,250,000 1,311,413
Charter Mac Equity Issuer Trust, 7.1%, 2009 (n) 1,000,000 1,055,570
Charter Mac Equity Issuer Trust, 6%, 2019 (n) 2,000,000 2,211,120
District of Columbia, Housing Finance Authority (Azeeze
Bates Apartments), 4.8%, 2036 (a) 455,000 456,597
GMAC Municipal Mortgage Trust, "B-1", 5.6%, 2039 (a)(n) 1,000,000 1,056,200
GMAC Municipal Mortgage Trust, "C-1", 5.7%, 2040 (a)(n) 500,000 508,980
Indianapolis, IN, Multi-Family Rev. (Cambridge Station
Apartments II), FNMA, 5.25%, 2039 (a) 465,000 480,322
Metropolitan Government of Nashville & Davidson County, TN,
Health, Educational & Housing Facilities Board Rev.
(Berkshire Place), GNMA, 6%, 2023 500,000 524,380
Munimae, TE, Bond Subsidiary LLC, 5.4%, 2049 (n) 1,000,000 1,019,500
Munimae, TE, Bond Subsidiary LLC, FRN, 6.875%, 2009 (a)(n) 2,000,000 2,101,960
North Charleston, SC, Housing Authority Rev. (Horizon
Village), "A", FHA, 5.15%, 2048 445,000 449,984
San Bernardino County, CA (Equity Residential/Redlands),
"A", 5.2%, 2029 (a) 2,000,000 2,045,700
Seattle, WA, Housing Authority Rev., Capped Fund Program
(High Rise Rehab), "I", FSA, 5%, 2025 670,000 684,412
-------------
$ 14,520,642
----------------------------------------------------------------------------------------------------------------
Sales & Excise Tax Revenue - 0.3%
----------------------------------------------------------------------------------------------------------------
Desloge, MO, Tax Increment Rev. (U.S. Highway 67 Street
Redevelopment), 5.2%, 2020 $ 445,000 $ 452,578
Massachusetts Bay Transportation Authority Sales Tax Rev.
(Capital Appreciation), "A-2", 0%, 2030 1,130,000 376,674
-------------
$ 829,252
----------------------------------------------------------------------------------------------------------------
Single Family Housing - Local - 2.5%
----------------------------------------------------------------------------------------------------------------
Cook County, IL, Single Family Mortgage Rev., "A", 0%, 2015 $ 40,000 $ 9,946
Corpus Christi, TX, Housing Finance Authority Rev., "B", MBIA, 0%, 2011 1,890,000 748,610
Dallas, TX, Housing Finance Corp., Single Family Mortgage Rev., MBIA,
0%, 2016 2,315,000 879,700
Jefferson Parish, LA, Single Family Mortgage Rev., GNMA, 6.3%, 2032 595,000 614,100
Jefferson Parish, LA, Single Family Mortgage Rev., "B-1", GNMA,
6.625%, 2023 230,000 242,597
Jefferson Parish, LA, Single Family Mortgage Rev., "B-1", GNMA,
6.75%, 2030 355,000 357,954
Jefferson Parish, LA, Single Family Mortgage Rev., "D", GNMA, 5%, 2038 570,000 602,387
Nortex, TX, Housing Finance Corp., Single Family Mortgage Rev., "B",
5.5%, 2038 140,000 142,734
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., "A", GNMA,
6.45%, 2029 355,000 355,415
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., "A", GNMA,
5.9%, 2035 335,000 361,673
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., "A", GNMA,
6.25%, 2035 155,000 165,357
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., "A", GNMA,
5.55%, 2037 950,000 1,034,997
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., "A", GNMA,
5.65%, 2037 750,000 814,928
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., "A-1", GNMA,
5.75%, 2037 275,000 300,790
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., "A-2", GNMA,
5.6%, 2029 710,000 750,293
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., "A-2", GNMA,
5.75%, 2037 545,000 589,189
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., "A-5", GNMA,
5.9%, 2037 200,000 219,594
-------------
$ 8,190,264
----------------------------------------------------------------------------------------------------------------
Single Family Housing - State - 2.4%
----------------------------------------------------------------------------------------------------------------
Colorado Housing & Finance Authority Rev., "A-2", 7.15%, 2014 $ 3,000 $ 3,039
Colorado Housing & Finance Authority Rev., "A-2", AMBAC, 6.6%, 2028 305,000 319,982
Colorado Housing & Finance Authority Rev., "C-2", 5.9%, 2023 170,000 175,068
Colorado Housing & Finance Authority Rev., "C-2", FHA, 6.6%, 2032 170,000 181,257
Colorado Housing & Finance Authority Rev., "C-3", FHA, 6.375%, 2033 75,000 77,506
Colorado Housing & Finance Authority Rev., "D-2", 6.9%, 2029 345,000 350,810
Georgia Housing & Finance Authority Rev., 5.65%, 2021 2,490,000 2,580,238
Louisiana Housing Finance Agency, Single Family Mortgage
Rev., GNMA, 6.4%, 2032 105,000 106,672
Minnesota Housing Finance Agency Rev., Residential Housing
Finance, "B", 4.8%, 2023 155,000 156,228
Missouri Housing Development Commission, Single Family
Mortgage Rev. (Home Loan Program), GNMA, 6.35%, 2032 270,000 272,446
Missouri Housing Development Commission, Single Family
Mortgage Rev. (Home Loan Program), GNMA, 6.85%, 2032 145,000 147,504
Nebraska Investment Finance Authority Single Family Mortgage
Rev., 0%, 2015 4,450,000 2,086,872
Nebraska Investment Finance Authority, "C", GNMA, 6.25%, 2021 290,000 294,968
New Hampshire Housing Finance Authority Rev., "B", 5.875%, 2030 85,000 88,092
Texas Affordable Housing Corp., Single Family Mortgage Rev.,
"B", GNMA, 5.25%, 2039 745,000 790,415
-------------
$ 7,631,097
----------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 1.7%
----------------------------------------------------------------------------------------------------------------
Delaware County, PA, Industrial Development Authority Rev.,
Resource Recovery Facilities, (American Ref-fuel), "A", 6.5%, 2008 $ 1,600,000 $ 1,626,464
Massachusetts Development Finance Agency, Resource Recovery
Rev. (Ogden Haverhill Associates), "A", 6.7%, 2014 725,000 783,326
Massachusetts Industrial Finance Agency, Resource Recovery
Rev. (Ogden Haverhill Associates), "A", 5.6%, 2019 2,850,000 2,956,904
-------------
$ 5,366,694
----------------------------------------------------------------------------------------------------------------
State & Local Agencies - 2.6%
----------------------------------------------------------------------------------------------------------------
Chicago, IL Pub Bldg Comm Rev, FGIC, 5.25%, 2016 (u) $ 2,600,000 $ 2,878,226
Chicago, IL Pub Bldg Comm Rev, FGIC, 5.25%, 2017 (u) 2,100,000 2,337,951
College Park, GA, Industrial Development Authority Rev.
(Civic Center), AMBAC, 5.75%, 2010 (c) 1,000,000 1,082,920
Golden State, CA, Tobacco Securitization Corp., Tobacco
Settlement Rev., Enhanced, "B", 5.375%, 2011 (c) 2,000,000 2,101,300
-------------
$ 8,400,397
----------------------------------------------------------------------------------------------------------------
Student Loan Revenue - 0.2%
----------------------------------------------------------------------------------------------------------------
Access to Loans for Learning, California Student Loan Rev., 7.95%, 2030 $ 650,000 $ 684,977
----------------------------------------------------------------------------------------------------------------
Tax - Other - 1.9%
----------------------------------------------------------------------------------------------------------------
Black Hawk, CO, Device Tax Rev., 5.625%, 2008 (c) $ 250,000 $ 259,660
Black Hawk, CO, Device Tax Rev., 5%, 2010 80,000 81,756
Black Hawk, CO, Device Tax Rev., 5%, 2013 55,000 56,855
Black Hawk, CO, Device Tax Rev., 5%, 2015 170,000 176,054
Black Hawk, CO, Device Tax Rev., 5%, 2021 130,000 132,397
Dade County, FL, Special Obligations Rev., Capital
Appreciation Bond, "B", AMBAC, 0%, 2008 (c) 15,080,000 3,207,667
New Jersey Economic Development Authority Rev. Cigarette Tax, 5.5%, 2024 340,000 354,783
New Jersey Economic Development Authority Rev. Cigarette Tax, 5.75%, 2029 615,000 667,589
New Jersey Economic Development Authority Rev. Cigarette Tax, 5.5%, 2031 270,000 288,139
New Jersey Economic Development Authority Rev. Cigarette Tax, 5.75%, 2034 410,000 442,452
Virgin Islands Public Finance Authority Rev., "E", 5.875%, 2018 500,000 518,705
-------------
$ 6,186,057
----------------------------------------------------------------------------------------------------------------
Tax Assessment - 6.0%
----------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Redevelopment Authority Rev.
(Pittsburgh Mills), 5.1%, 2014 $ 235,000 $ 239,740
Amelia Walk Community Development District, FL, Special
Assessment, "B", 5.2%, 2014 685,000 687,274
Arborwood Community Development District, FL, Capital
Improvement Rev., 5.25%, 2016 500,000 503,745
Arborwood Community Development District, FL, Capital
Improvement Rev. (Master Infrastructure Projects), "A", 5.35%, 2036 620,000 623,844
Arborwood Community Development District, FL, Special
Assessment (Master Infrastructure Projects), "B", 5.1%, 2014 250,000 249,520
Atlanta, GA, Tax Allocation (Eastside Project), "B", 5.6%, 2030 815,000 850,232
Atlanta, GA, Tax Allocation (Princeton Lakes Project), 5.5%, 2031 555,000 565,451
Belmont Community Development District, FL, Capital
Improvement Rev., "B", 5.125%, 2014 985,000 987,709
Chicago IL, Ryan Garfield Tax Increment Allocation, 10.125%, 2007 225,000 225,761
Concord Station Community Development District, FL, Special
Assessment, 5%, 2015 265,000 263,474
Concorde Estates Community Development District, FL, Special
Assessment, "B", 5%, 2011 535,000 534,615
Du Page County, IL, Special Service Area No. 31 Special Tax
(Monarch Landing Project), 5.625%, 2036 305,000 319,686
East Homestead Community Development District, FL, Special
Assessment, "B", 5%, 2011 190,000 189,884
Enclave at Black Point Marina Community Development
District, FL, "A", 5.4%, 2037 105,000 104,978
Enclave at Black Point Marina Community Development
District, FL, "B", 5.2%, 2014 215,000 216,090
Fishhawk Community Development District, FL, 5.125%, 2009 375,000 374,895
Katy, TX, Development Authority Rev., "B", 5.8%, 2011 745,000 763,528
Katy, TX, Development Authority Rev., "B", 6%, 2018 925,000 952,195
Killarney Community Development District, FL, Special
Assessment, "B", 5.125%, 2009 250,000 249,863
Lakes by the Bay South Community Development District, FL,
Rev., "B", 5.3%, 2009 685,000 685,123
Lancaster County, SC, Assessment Rev. (Sun City Carolina
Lakes), 5.45%, 2037 110,000 112,445
Markham, IL, Tax Increment Rev., 9%, 2012 855,000 856,257
Middle Village Community Development District, FL, Special
Assessment, "B", 5%, 2009 195,000 194,633
Naturewalk Community Development District, FL, Capital
Improvement Rev., "B", 5.3%, 2016 660,000 655,083
New Port Tampa Bay Community Development District, FL,
Special Assessment, "B", 5.3%, 2012 440,000 443,511
North Springs Improvement District, FL, Special Assessment
(Parkland Golf Country Club), "B-1", 5.125%, 2015 350,000 350,833
North Springs Improvement District, FL, Special Assessment
(Parkland Golf Country Club), "B-2", 5.125%, 2015 165,000 165,393
Old Palm Community Development District, FL, Special
Assessment (Palm Beach Gardens), "A", 5.9%, 2035 245,000 255,866
Old Palm Community Development District, FL, Special
Assessment (Palm Beach Gardens), "B", 5.375%, 2014 295,000 298,325
Overland Park, KS, Special Assessment (Tallgrass Creek), 4.85%, 2016 170,000 171,472
Overland Park, KS, Special Assessment (Tallgrass Creek), 5.125%, 2028 350,000 354,638
Panther Trace II, Community Development District, FL,
Special Assessment, 5.125%, 2013 355,000 356,743
Panther Trace II, Community Development District, FL,
Special Assessment, "B", 5%, 2010 720,000 716,357
Parkway Center, Community Development District, FL, Special
Assessment, "B", 5.625%, 2014 1,260,000 1,285,616
Paseo, FL, Community Development District, "B", 4.875%, 2010 480,000 476,904
Preserve at Wilderness Lake, FL, Community Development
District, Capital Improvement, "B", 5%, 2009 45,000 44,933
Prince George's County, MD, Special Obligation (National
Harbor Project), 5.2%, 2034 245,000 251,424
Reunion East Community Development District, FL, Special
Assessment, 5.9%, 2007 45,000 45,028
Riverwood Estates Community Development District, FL,
Special Assessment, "B", 5%, 2013 445,000 443,888
Sterling Hill Community Development District, FL, Special
Assessment, 5.5%, 2010 345,000 347,446
Tuscany Reserve Community Development District, FL, Special
Assessment, "B", 5.25%, 2016 500,000 505,905
Villasol Community Development District, FL, Special
Assessment Rev., "B", 5.375%, 2008 160,000 160,301
Watergrass Community Development District, FL, Special
Assessment, "B", 4.875%, 2010 865,000 858,841
Wentworth Estates Community Development District, FL,
Special Assessment, "B", 5.125%, 2012 400,000 399,664
-------------
$ 19,339,113
----------------------------------------------------------------------------------------------------------------
Tobacco - 8.1%
----------------------------------------------------------------------------------------------------------------
Badger, WI, Tobacco Asset Securitization Corp., 6.125%, 2027 $ 3,885,000 $ 4,152,793
California County, CA, Tobacco Securitization Agency,
Capital Appreciation Asset Backed (Gold Country), 0%, 2033 2,620,000 593,823
California County, CA, Tobacco Securitization Corp., Tobacco
Settlement, L.A. County, "A", 0% to 2010, 5.65% to 2041 485,000 422,857
California Statewide Financing Authority, Tobacco
Settlement, 5.625%, 2029 1,730,000 1,807,729
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, "A", 0%, 2050 4,000,000 275,800
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, "B", 0%, 2055 4,000,000 147,760
District of Columbia, Tobacco Settlement, 6.25%, 2024 1,080,000 1,149,260
District of Columbia, Tobacco Settlement, Capital
Appreciation, "A", 0%, 2046 5,840,000 558,070
Golden State Tobacco Securitization Corp., California
Tobacco Settlement Rev., Asset Backed, "A-1", 5%, 2033 1,770,000 1,762,601
Golden State, CA, Tobacco Securitization Corp., Tobacco
Settlement, "A", 5%, 2021 (c) 590,000 591,316
Golden State, CA, Tobacco Securitization Corp., Tobacco
Settlement, "A-1", 5.125%, 2047 1,700,000 1,701,122
Golden State, CA, Tobacco Securitization Corp., Tobacco
Settlement, "A-4", 7.8%, 2013 (c) 1,000,000 1,218,860
Iowa Tobacco Settlement Authority, Tobacco Settlement Rev.,
Asset Backed, "B", 5.3%, 2011 (c) 2,000,000 2,118,700
Iowa Tobacco Settlement Authority, Tobacco Settlement Rev.,
Asset Backed, "B", 0% to 2007, 5.6% to 2034 1,635,000 1,674,959
Louisiana Tobacco Settlement Authority Rev., 5.5%, 2030 1,435,000 1,511,686
New Jersey Tobacco Settlement Financing Corp., 5.75%, 2012 (c) 825,000 880,778
New Jersey Tobacco Settlement Financing Corp., 7%, 2013 (c) 15,000 17,636
New Jersey Tobacco Settlement Financing Corp., "1-A", 5%, 2041 1,000,000 982,630
Northern Tobacco Securitization Corp., AK, Asset Backed, "A", 5%, 2046 860,000 840,108
Rockland Tobacco Asset Securitization Corp., NY, Tobacco
Asset Backed, "C", 0%, 2060 11,045,000 215,157
Silicon Valley Tobacco Securitization Authority, CA, Tobacco
Settlement Rev. (Turbo-Santa Clara), "A", 0%, 2036 2,115,000 432,581
Silicon Valley Tobacco Securitization Authority, CA, Tobacco
Settlement Rev. (Turbo-Santa Clara), "A", 0%, 2041 1,560,000 237,058
South Carolina Tobacco Settlement Authority Rev., "B", 6%, 2022 1,260,000 1,331,719
South Carolina Tobacco Settlement Authority Rev., "B", 6.375%, 2028 1,075,000 1,150,874
Virginia Tobacco Settlement Financing Corp., 5.625%, 2015 (c) 50,000 53,563
Virginia Tobacco Settlement Financing Corp., "B-1", 5%, 2047 70,000 68,950
Washington Tobacco Settlement Authority, 6.5%, 2026 155,000 169,830
-------------
$ 26,068,220
----------------------------------------------------------------------------------------------------------------
Toll Roads - 1.5%
----------------------------------------------------------------------------------------------------------------
E-470 Public Highway Authority, Colorado Rev., Capital
Appreciation, "B", MBIA, 0%, 2027 $ 4,115,000 $ 1,520,863
Niagra Falls NY Brdg Comn, FGIC, 5.25%, 2015 (u) 3,000,000 3,222,990
-------------
$ 4,743,853
----------------------------------------------------------------------------------------------------------------
Transportation - Special Tax - 2.7%
----------------------------------------------------------------------------------------------------------------
Missouri Highways & Transportation Commission, State Road
Rev., "A", 5.625%, 2011 (c) $ 4,500,000 $ 4,804,875
Telluride, CO, Real Estate Transfer Assessment Rev. (Gondola
Transit Co.), ETM, 11.5%, 2012 (c) 2,900,000 3,798,159
-------------
$ 8,603,034
----------------------------------------------------------------------------------------------------------------
Universities - Colleges - 3.0%
----------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority Rev. (L.A.
College of Chiropractic), 5.6%, 2017 $ 750,000 $ 755,715
Foothill-DE Anza Community College District, CA, Capital
Appreciation, "B", AMBAC, 0%, 2034 785,000 221,998
Harrisburg, PA, University of Science, "A", 5.4%, 2016 235,000 241,864
Harrisburg, PA, University of Science, "B", 6%, 2036 555,000 575,607
Houston, TX, Community College Systems, MBIA, 7.875%, 2025 2,500,000 2,950,425
Illinois Educational Facilities Authority Rev. (Augustana
College), "A", 5.625%, 2022 400,000 424,140
Illinois Finance Authority Rev. (Illinois Institute of
Technology), "A", 5%, 2036 480,000 487,570
Louisiana State University (Health Sciences Center Project),
MBIA, 6.375%, 2031 2,500,000 2,697,750
New York Dormitory Authority Rev. (Vassar College), 4.25%, 2039 195,000 185,158
Private Colleges & Universities Authority, GA, Rev. (Mercer
University Project), "A", 5.375%, 2029 240,000 246,173
Savannah, GA, Economic Development Authority Rev. (College
of Art & Design, Inc.), 6.5%, 2009 (c) 625,000 674,013
University of Arkansas, University Construction Rev. (UAMS
Campus), "B", MBIA, 5%, 2034 300,000 315,294
-------------
$ 9,775,707
----------------------------------------------------------------------------------------------------------------
Universities - Secondary Schools - 1.7%
----------------------------------------------------------------------------------------------------------------
California Statewide Communities, Development Authority Rev.
(Escondido Charter High School), 7.5%, 2011 (c) $ 555,000 $ 632,273
California Statewide Communities, Development Authority Rev.
(Escondido Charter High School), 7.5%, 2011 (c) 1,000,000 1,167,620
Deerfield, IL, Educational Facilities Authority Rev.
(Chicagoland Jewish High School Project), 6%, 2041 815,000 837,144
Lee County, FL, Industrial Development Authority Rev. (Lee
Charter Foundation), "A", 5.25%, 2027 430,000 433,272
Lee County, FL, Industrial Development Authority Rev. (Lee
Charter Foundation), "A", 5.375%, 2037 425,000 429,373
Maryland Health & Higher Educational Facilities Authority
Rev. (Washington Christian Academy), 5.5%, 2038 140,000 143,548
Maryland Industrial Development Financing Authority,
Economic Development Authority Rev. (Our Lady of Good
Council), "A", 6%, 2035 150,000 160,533
Michigan Municipal Bond Authority Rev. (YMCA Service
Learning Academy), 7.625%, 2021 1,000,000 1,078,760
Pima County, AZ, Industrial Development Authority Education
Rev. (Arizona Charter Schools), "C", 6.75%, 2031 500,000 530,250
-------------
$ 5,412,773
----------------------------------------------------------------------------------------------------------------
Utilities - Cogeneration - 1.3%
----------------------------------------------------------------------------------------------------------------
Alaska Industrial Development Export Authority, Power Rev.,
Upper Lynn Canal Regional Power, 5.8%, 2018 $ 830,000 $ 832,150
Carbon County, PA, Industrial Development Authority Rev.
(Panther Creek Partners), 6.65%, 2010 1,710,000 1,763,352
Pennsylvania Economic Development Financing Authority Rev.,
Resources Recovery Rev. (Colver), "G", 5.125%, 2015 350,000 355,604
Pennsylvania Economic Development Financing Authority Rev.,
Resources Recovery Rev. (Northampton Generating), 6.4%, 2009 250,000 252,693
Pennsylvania Economic Development Financing Authority Rev.,
Resources Recovery Rev. (Northampton Generating), "A", 6.5%, 2013 1,000,000 1,010,750
-------------
$ 4,214,549
----------------------------------------------------------------------------------------------------------------
Utilities - Investor Owned - 8.2%
----------------------------------------------------------------------------------------------------------------
Brazos River Authority, TX, Authority Texas Rev. (Reliant
Energy, Inc.), "A", 5.375%, 2019 $ 500,000 $ 512,775
Brazos River Authority, TX, Authority Texas Rev. (Reliant
Energy, Inc.), "B", AMBAC, 5.125%, 2020 2,000,000 2,072,980
Brazos River Authority, TX, Pollution Control Rev. (TXU
Electric Company), "C", 5.75%, 2036 (a) 1,240,000 1,274,422
Calcasieu Parish, LA, Industrial Development Board,
Pollution Control Rev. (Entergy Gulf States, Inc.), 5.45%, 2010 1,250,000 1,250,513
Connecticut Development Authority, Pollution Control Rev.
(Connecticut Light & Power Co.), 5.85%, 2028 2,000,000 2,087,460
Connecticut Development Authority, Pollution Control Rev.
(Connecticut Light & Power Co.), 5.95%, 2028 2,270,000 2,367,542
Farmington, NM, Pollution Control Rev. (New Mexico Public
Service), "A", 6.3%, 2016 2,195,000 2,234,993
Farmington, NM, Pollution Control Rev. (New Mexico Public
Service), "C", 5.8%, 2022 2,105,000 2,127,313
Forsyth, MT, Pollution Control Rev. (Portland General), "B", 5.2%, 2033 (a) 230,000 235,412
Matagorda County, TX (Centerpoint Energy), 5.6%, 2027 1,500,000 1,588,755
Matagorda County, TX, Pollution Control Rev. (Reliant
Energy), 5.95%, 2030 1,655,000 1,707,430
Mecklenburg County, VA, Industrial Development Authority
Rev. (UAE Mecklenburg LP), 6.5%, 2017 800,000 874,528
New Hampshire Business Finance Authority, Pollution Control
Rev. (Public Service of New Hampshire), 6%, 2021 1,000,000 1,039,030
Ohio Air Quality Development Authority, Pollution Control
Rev. (Cleveland Electric), "B", 6%, 2020 3,000,000 3,074,490
Pima County, AZ, Industrial Development Authority Rev.
(Tucson Electric Power Co.), "A", 6.1%, 2025 650,000 653,471
Port Morrow, OR, Pollution Control Rev. (Portland General), 5.2%, 2033 (a) 550,000 562,320
West Feliciana Parish, LA, Pollution Control Rev. (Gulf
States Utilities Co.), 5.8%, 2015 1,500,000 1,501,725
West Feliciana Parish, LA, Pollution Control Rev. (Gulf
States Utilities Co.), 5.8%, 2016 1,000,000 1,006,790
-------------
$ 26,171,949
----------------------------------------------------------------------------------------------------------------
Utilities - Municipal Owned - 2.4%
----------------------------------------------------------------------------------------------------------------
North Carolina Eastern Municipal Power Agency, Power Systems Rev., "B",
5.55%, 2014 $ 2,150,000 $ 2,248,857
North Carolina Municipal Power Agency (Catawba Electric Rev.), "B",
6.5%, 2020 2,000,000 2,150,260
Seattle, WA, Municipal Light & Power Rev., 5.625%, 2017 3,000,000 3,171,150
Southern California Public Power Authority (Transmission
Project Rev.), RIBS, 7.721%, 2012 (p) 100,000 100,200
-------------
$ 7,670,467
----------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Revenue - 2.0%
----------------------------------------------------------------------------------------------------------------
Magnolia, TX, Water & Sewer System Rev., 5.15%, 2031 $ 205,000 $ 210,250
Mississippi Development Bank Special Obligations, Grenada,
MS, Water & Sewer Systems Project, "N", FSA, 5%, 2030 710,000 748,503
New York, NY, Municipal Water & Sewer Finance Authority
Rev., 5.5%, 2010 (c) 5,000,000 5,322,250
-------------
$ 6,281,003
----------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $429,484,812) $ 457,783,342
----------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.2%
----------------------------------------------------------------------------------------------------------------
Harris County, TX, Health Facilities Development Rev.
(University of Texas Medical Center), 4%, due 5/01/07 $ 300,000 $ 300,000
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil
Corp.), 3.98%, due 5/01/07 200,000 200,000
Pinellas County, FL, Health Facilities Authority Rev.
(Pooled Hospital Loan Program), 4%, due 5/01/07 100,000 100,000
----------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 600,000
----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $430,084,812) (k) $ 458,383,342
----------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.8% 2,606,150
----------------------------------------------------------------------------------------------------------------
PREFERRED SHARES (ISSUED BY THE TRUST) - (43.6)% (140,073,912)
----------------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHARES - 100.0% $ 320,915,580
----------------------------------------------------------------------------------------------------------------
SWAP AGREEMENTS AT 4/30/07
Interest Rate Swaps
UNREALIZED
NOTIONAL CASH FLOWS CASH FLOWS APPRECIATION
EXPIRATION AMOUNT COUNTERPARTY TO RECEIVE TO PAY (DEPRECIATION)
---------------------------------------------------------------------------------------------------------------
8/29/19 USD 35,000,000 Merill Lynch 7-day BMA 4.012% (fixed rate) $(813,349)
At April 30, 2007, the trust had sufficient cash and/or securities to cover any commitments under these
derivative contracts.
(a) Mandatory put date is earlier than stated maturity date.
(c) Refunded bond.
(k) As of April 30, 2007, the trust held securities fair valued in accordance with the policies adopted by the
Board of Trustees, aggregating $457,783,342 and 99.87% of market value. All of these security values were
provided by an independent pricing service using an evaluated bid.
(n) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be
sold in the ordinary course of business in transactions exempt from registration, normally to qualified
institutional buyers. At period end, the aggregate value of these securities was $12,240,892, representing
3.8% of net assets applicable to common shares.
(p) Primary inverse floater.
(u) Underlying security deposited into special purpose trust ("the trust") by investment banker upon creation
of self-deposited inverse floaters.
The following abbreviations are used in this report and are defined:
BMA Bond Market Assn.
COP Certificate of Participation
ETM Escrowed to Maturity
FRN Floating Rate Note. Interest rate resets periodically and may not be the rate reported at period end.
Insurers
---------------------------------------------------------------------------------------------------------------
AMBAC AMBAC Indemnity Corp.
FGIC Financial Guaranty Insurance Co.
FHA Federal Housing Administration
FNMA Federal National Mortgage Assn.
FSA Financial Security Assurance Inc.
GNMA Government National Mortgage Assn.
MBIA MBIA Insurance Corp.
PSF Permanent School Fund
XLCA XL Capital Insurance Co.
Inverse Floaters
---------------------------------------------------------------------------------------------------------------
INFLOS Inverse Floating Security
RIBS Residual Interest Bonds
SEE NOTES TO FINANCIAL STATEMENTS
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
At 4/30/07 (unaudited)
This statement represents your trust's balance sheet, which details the assets and liabilities
comprising the total value of the trust.
ASSETS
-----------------------------------------------------------------------------------------------------
Investments, at value (identified cost, $430,084,812) $458,383,342
Cash 102,280
Receivable for investments sold 8,388,075
Interest receivable 8,147,523
Other assets 28,964
-----------------------------------------------------------------------------------------------------
Total assets $475,050,184
-----------------------------------------------------------------------------------------------------
LIABILITIES
-----------------------------------------------------------------------------------------------------
Distributions payable on common shares $149,524
Payable for investments purchased 7,299,344
Payable to the holder of the floating rate certificate from
trust assets 5,369,322
Unrealized depreciation on interest rate swap agreements 813,349
Payable to affiliates
Management fee 38,709
Transfer agent and dividend disbursing costs 34,811
Administrative services fee 979
Payable for independent trustees' compensation 118,467
Payable for interest expense and fees 52,738
Accrued expenses and other liabilities 183,449
-----------------------------------------------------------------------------------------------------
Total liabilities $14,060,692
-----------------------------------------------------------------------------------------------------
PREFERRED SHARES
-----------------------------------------------------------------------------------------------------
Series T and Series TH auction preferred shares (5,600
shares issued and oustanding at $25,000 per share) at
liquidation value plus cumulative unpaid dividends $140,073,912
-----------------------------------------------------------------------------------------------------
Net assets applicable to common shares $320,915,580
-----------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities (unaudited) - continued
NET ASSETS CONSIST OF
-----------------------------------------------------------------------------------------------------
Paid-in capital - common shares $315,051,707
Unrealized appreciation (depreciation) on investments 27,485,181
Accumulated net realized gain (loss) on investments (26,356,994)
Undistributed net investment income 4,735,686
-----------------------------------------------------------------------------------------------------
Net assets applicable to common shares $320,915,580
-----------------------------------------------------------------------------------------------------
Preferred shares, at value (5,600 shares issued and
outstanding at $25,000 per share) 140,000,000
-----------------------------------------------------------------------------------------------------
Net assets including preferred shares $460,915,580
-----------------------------------------------------------------------------------------------------
Common shares of beneficial interest outstanding (40,237,768
shares issued less 55,500 treasury shares) 40,182,268
-----------------------------------------------------------------------------------------------------
Net asset value per common share (net assets of
$320,915,580/40,182,268 shares of beneficial interest outstanding) $7.99
-----------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Statements
STATEMENT OF OPERATIONS
Six months ended 4/30/07 (unaudited)
This statement describes how much your trust earned in investment income and accrued in expenses.
It also describes any gains and/or losses generated by trust operations.
NET INVESTMENT INCOME
-----------------------------------------------------------------------------------------------------
Interest income $14,274,061
-----------------------------------------------------------------------------------------------------
Expenses
Management fee $1,765,888
Transfer agent and dividend disbursing costs 43,434
Administrative services fee 44,423
Independent trustees' compensation 24,116
Stock exchange fee 18,176
Preferred shares remarketing agent fee 173,732
Custodian fee 60,561
Shareholder communications 26,072
Auditing fees 34,252
Legal fees 6,381
Interest expense and fees 120,377
Miscellaneous 44,436
-----------------------------------------------------------------------------------------------------
Total expenses $2,361,848
-----------------------------------------------------------------------------------------------------
Fees paid indirectly (11,981)
Reduction of expenses by investment adviser (808)
-----------------------------------------------------------------------------------------------------
Net expenses $2,349,059
-----------------------------------------------------------------------------------------------------
Net investment income $11,925,002
-----------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
-----------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis)
Investment transactions $913,001
Swap transactions (1,163,000)
-----------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $(249,999)
-----------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments $(3,824,051)
Swap transactions 1,021,297
-----------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $(2,802,754)
-----------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $(3,052,753)
-----------------------------------------------------------------------------------------------------
Distributions declared from preferred shares $(2,485,192)
-----------------------------------------------------------------------------------------------------
Change in net assets from operations $6,387,057
-----------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Statements
STATEMENTS OF CHANGES IN NET ASSETS
These statements describe the increases and/or decreases in net assets resulting from operations,
any distributions, and any shareholder transactions.
SIX MONTHS ENDED YEAR ENDED
4/30/07 10/31/06
(UNAUDITED)
CHANGE IN NET ASSETS
FROM OPERATIONS
-------------------------------------------------------------------------------------------------------
Net investment income $11,925,002 $23,219,256
Net realized gain (loss) on investments (249,999) 2,614,344
Net unrealized gain (loss) on investments (2,802,754) 3,992,547
Distributions declared from preferred shares (2,485,192) (4,638,004)
-------------------------------------------------------------------------------------------------------
Change in net assets from operations $6,387,057 $25,188,143
-------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
-------------------------------------------------------------------------------------------------------
From net investment income $(9,392,326) $(19,714,328)
-------------------------------------------------------------------------------------------------------
Net asset value of shares issued to common shareholders in
reinvestment of distributions $822,150 $1,428,897
-------------------------------------------------------------------------------------------------------
Total change in net assets $(2,183,119) $6,902,712
-------------------------------------------------------------------------------------------------------
NET ASSETS
-------------------------------------------------------------------------------------------------------
At beginning of period 323,098,699 316,195,987
At end of period (including undistributed net investment
income of $4,735,686 and $4,688,202, respectively) $320,915,580 $323,098,699
-------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Statements
FINANCIAL HIGHLIGHTS
(As Restated)
The financial highlights table is intended to help you understand the trust's financial performance for the semiannual
period and the past 5 fiscal years. Certain information reflects financial results for a single trust share. The total
returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the trust
share class (assuming reinvestment of all distributions) held for the entire period.
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------------------------------
4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
Net asset value,
beginning of period $8.06 $7.92 $7.86 $7.69 $7.61 $7.93
-------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS
-------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.30(z) $0.58 $0.59 $0.60 $0.61 $0.64
Net realized and unrealized
gain (loss) on investments (0.08)(z) 0.17 0.10 0.16 0.04 (0.38)
Distributions declared to
shareholders on preferred shares (0.06) (0.12) (0.08) (0.04) (0.04) (0.05)
-------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.16 $0.63 $0.61 $0.72 $0.61 $0.21
-------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
-------------------------------------------------------------------------------------------------------------------------------
From net investment income,
common shares $(0.23) $(0.49) $(0.55) $(0.55) $(0.53) $(0.53)
-------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.99 $8.06 $7.92 $7.86 $7.69 $7.61
-------------------------------------------------------------------------------------------------------------------------------
Common share market value,
end of period $8.40 $8.20 $8.27 $7.83 $7.49 $7.15
-------------------------------------------------------------------------------------------------------------------------------
Total return at market
value (%) (p) 5.44(n) 5.41 13.18 12.22 12.51 (2.23)
-------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET
ASSETS APPLICABLE TO COMMON
SHARES) AND SUPPLEMENTAL DATA:
-------------------------------------------------------------------------------------------------------------------------------
Expenses before expense
reductions (f)(p) 1.48(a) 1.45 1.44 1.46 1.51 1.56
Expenses after expense
reductions (f)(p) 1.48(a) 1.45 1.44 1.46 N/A N/A
Expenses after expense
reductions
and excluding interest expense
and fees (f)(l)(p) 1.40(a) N/A N/A N/A N/A N/A
Net investment income (p) 7.47(a)(r)(z) 7.30 7.45 7.70 7.98 8.26
Portfolio turnover 7 17 14 9 11 16
Net assets at end of
period (000 omitted) $320,916 $323,099 $316,196 $312,825 $305,383 $302,010
-------------------------------------------------------------------------------------------------------------------------------
Financial Highlights - continued
SIX MONTHS YEARS ENDED 10/31
ENDED ----------------------------------------------------------------------
4/30/07 2006 2005 2004 2003 2002
(UNAUDITED)
SUPPLEMENTAL RATIOS (%):
-------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets including preferred
shares excluding interest
expense and fees (f)(p) 0.98(a) 1.00 0.99 1.00 1.03 1.07
Preferred shares dividends 1.56(a) 1.46 0.95 0.49 0.48 0.68
Net investment income available
to common shares 5.91(a) 5.84 6.49 7.22 7.50 7.58
SENIOR SECURITIES:
-------------------------------------------------------------------------------------------------------------------------------
Total preferred shares
outstanding 5,600 5,600 5,600 5,600 5,600 5,600
Asset coverage per preferred
share (k) $82,306 $82,696 $81,464 $80,862 $79,533 $79,090
Involuntary liquidation
preference per preferred share $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Approximate market value per
preferred share $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
(a) Annualized.
(d) Per share data are based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly.
(k) Calculated by subtracting the trust's total liabilities (not including preferred shares) from the trust's total assets
and dividing this number by the number of preferred shares outstanding.
(l) Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets.
(n) Not annualized.
(p) Ratio excludes dividend payment on auction preferred shares.
(r) The unaudited net investment income ratio was previously reported incorrectly as 5.21% because it was calculated on both
preferred and common shares. The correct net investment income ratio, applicable to common shares, is 7.47%.
(z) The fund applied a change in estimate for amortization of premium and accretion of discount on certain debt securities
in the current year that resulted in an increase of $0.03 per share to net investment income, a decrease of $0.03 per
share to net realized and unrealized gain (loss) on investments, and an increase of 0.29% to the net investment income
ratio for the year ended April 30, 2007. The change in estimate had no impact on net assets, net asset value per share
or total return.
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(1) BUSINESS AND ORGANIZATION
MFS Municipal Income Trust (the trust) is a trust that is organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as a closed-end diversified management
investment company.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL - The preparation of financial statements in conformity with U.S.
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The trust
can invest up to 100% of its portfolio in high-yield securities rated below
investment grade. Investments in high-yield securities involve greater degrees
of credit and market risk than investments in higher-rated securities and tend
to be more sensitive to economic conditions. Municipal securities backed by
current or anticipated revenues from a specific project or specific assets can
be negatively affected by the discontinuance of the taxation supporting the
projects or assets or the inability to collect revenues for the project or from
the assets. If the Internal Revenue Service determines an issuer of a municipal
security has not complied with applicable tax requirements, the security could
decline in value, interest from the security could become taxable and the trust
may be required to issue Forms 1099-DIV.
INVESTMENT VALUATIONS - Debt instruments (other than short-term instruments),
including restricted debt instruments, are generally valued at an evaluated or
composite bid as reported by an independent pricing service. Short-term
instruments with a maturity at issuance of 60 days or less may be valued at
amortized cost, which approximates market value. Swaps are generally valued at
an evaluated bid as reported by an independent pricing service. Securities and
other assets generally valued on the basis of information from an independent
pricing service may also be valued at a broker-dealer bid quotation. Values
obtained from pricing services can utilize both dealer-supplied valuations and
electronic data processing techniques, which take into account factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics, and other market
data.
The Board of Trustees has delegated primary responsibility for determining or
causing to be determined the value of the trust's investments (including any
fair valuation) to the adviser pursuant to valuation policies and procedures
approved by the Board. If the adviser determines that reliable market
quotations are not readily available, investments are valued at fair value as
determined in good faith by the adviser in accordance with such procedures
under the oversight of the Board of Trustees. Under the trust's valuation
policies and procedures, market quotations are not considered to be readily
available for many types of debt instruments and certain types of derivatives.
These investments are generally valued at fair value based on information from
independent pricing services. In addition, investments may be valued at fair
value if the adviser determines that an investment's value has been materially
affected by events occurring after the close of the exchange or market on which
the investment is principally traded (such as foreign exchange or market) and
prior to the determination of the trust's net asset value, or after the halting
of trading of a specific security where trading does not resume prior to the
close of the exchange or market on which the security is principally traded.
Events that occur on a frequent basis after foreign markets close (such as
developments in foreign markets and significant movements in the U.S. markets)
and prior to the determination of the trust's net asset value may be deemed to
have a material affect on the value of securities traded in foreign markets.
Accordingly, the trust's foreign securities may often be valued at fair value.
The adviser may rely on independent pricing services or other information (such
as the correlation with price movements of similar securities in the same or
other markets; the type, cost and investment characteristics of the security;
the business and financial condition of the issuer; and trading and other
market data) to assist in determining whether to fair value and at what value
to fair value an investment. The value of an investment for purposes of
calculating the trust's net asset value can differ depending on the source and
method used to determine value. When fair valuation is used, the value of
investments used to determine the trust's net asset value may differ from
quoted or published prices for the same investments.
In September 2006, FASB Statement No. 157, Fair Value Measurements (the
"Statement") was issued, and is effective for fiscal years beginning after
November 15, 2007 and for all interim periods within those fiscal years. This
Statement provides a single definition of fair value, a hierarchy for measuring
fair value and expanded disclosures about fair value measurements. Management
is evaluating the application of the Statement to the trust, and believes the
impact will be limited to expanded disclosures resulting from the adoption of
this Statement in the trust's financial statements.
In February 2007, the FASB issued Statement of Financial Accounting Standards
No. 159 (FAS 159) "The Fair Value Option for Financial Assets and Financial
Liabilities - including an amendment of FASB Statement No. 115." FAS 159
permits entities to elect to measure certain financial assets and liabilities
at fair value. Unrealized gains and losses on items for which the fair value
option has been elected will be reported in earnings at each subsequent
reporting date. FAS 159 is effective for fiscal years beginning after November
15, 2007. Management is evaluating the application of the Statement to the
trust and its impact on the trust's financial statements, if any, has not been
determined.
DERIVATIVE RISK - The trust may invest in derivatives for hedging or non-
hedging purposes. While hedging can reduce or eliminate losses, it can also
reduce or eliminate gains. When the trust uses derivatives as an investment to
gain market exposure, or for hedging purposes, gains and losses from derivative
instruments may be substantially greater than the derivative's original cost.
Derivative instruments include swap agreements and inverse floaters.
SWAP AGREEMENTS - The trust may enter into swap agreements. A swap is an
exchange of cash payments between the trust and another party. Net cash
payments are exchanged at specified intervals and are recorded as a realized
gain or loss in the Statement of Operations. The value of the swap is adjusted
daily and the change in value, including accruals of periodic amounts of
interest to be paid or received, is recorded as unrealized appreciation or
depreciation in the Statement of Operations. A liquidation payment received or
made upon early termination is recorded as a realized gain or loss in the
Statement of Operations. Collateral, in the form of cash or securities, may be
required to be held in segregated accounts with the trust's custodian in
connection with these agreements. Risk of loss may exceed amounts recognized on
the Statement of Assets and Liabilities. These risks include the possible lack
of a liquid market, failure of the counterparty to perform under the terms of
the agreements, and unfavorable market movement of the underlying instrument.
All swap agreements entered into by the trust with the same counterparty are
generally governed by a single master agreement, which provides for the netting
of all amounts owed by the parties under the agreement upon the occurrence of
an event of default, thereby reducing the credit risk to which such party is
exposed. The trust holds interest rate swap agreements which involve the
periodic exchange of cash flows, such as the exchange of fixed rate interest
payments for floating rate interest payments based on a notional principal
amount. The interest rates may be based on a specific financial index or the
exchange of two distinct floating rate payments. The trust may enter into an
interest rate swap in order to manage its exposure to interest rate
fluctuations.
INVERSE FLOATERS - The trust invests in municipal inverse floating rate
securities which are structured by the issuer (known as primary market inverse
floating rate securities) or by an investment banker utilizing municipal bonds
which have already been issued (known as secondary market inverse floating rate
securities) to have variable rates of interest which typically move in the
opposite direction of short term interest rates. A secondary market inverse
floating rate security is created when an investment banker transfers a fixed
rate municipal bond to a special purpose trust, and causes the trust to (a)
issue floating rate certificates to third parties, in an amount equal to a
fraction of the par amount of the deposited bonds (these certificates usually
pay tax-exempt interest at short-term interest rates that typically reset
weekly; and the certificate holders typically, on seven days notice, have the
option to tender their certificates to the investment banker or another party
for redemption at par plus accrued interest), and (b) issue inverse floating
rate certificates (sometimes referred to as "inverse floaters"). If the holder
of the inverse floater transfers the municipal bonds to an investment banker
for the purpose of depositing the municipal bonds into the special purpose
trust, the inverse floating rate certificates that are issued by the trust are
referred to as "self-deposited inverse floaters." If the bonds held by the
trust are purchased by the investment banker for deposit into the trust from
someone other than the purchasers of the inverse floaters, the inverse floating
rate certificates that are issued by the trust are referred to as "externally
deposited inverse floaters." Such self-deposited inverse floaters held by the
fund are accounted for as secured borrowings, with the municipal bonds
reflected in the investments of the fund and amounts owed to the holder of the
floating rate certificate under the provisions of the trust, which amounts are
paid solely from the assets of the trust, reflected as liabilities of the fund
in the Statement of Assets and Liabilities under the caption, "Payable to the
holder of the floating rate certificate from trust assets". At April 30, 2007,
the trust's payable to the holder of the floating rate certificate from trust
assets was $5,369,322. The weighted average interest rate on the floating rate
certificates issued by the trust was 3.93%. Interest expense and fees relate to
payments made to the holder of the floating rate certificate from trust assets
in connection with self-deposited inverse floater transactions. Interest
expense and fees are recorded as incurred. For the six months ended April 30,
2007, interest expense and fees in connection with self-deposited inverse
floaters was $119,456. Primary and externally deposited inverse floaters held
by the trust are not accounted for as secured borrowings.
INDEMNIFICATIONS - Under the trust's organizational documents, its officers and
trustees may be indemnified against certain liabilities and expenses arising
out of the performance of their duties to the trust. Additionally, in the
normal course of business, the trust enters into agreements with service
providers that may contain indemnification clauses. The trust's maximum
exposure under these agreements is unknown as this would involve future claims
that may be made against the trust that have not yet occurred.
INVESTMENT TRANSACTIONS AND INCOME - Investment transactions are recorded on
the trade date. Interest income is recorded on the accrual basis. All premium
and discount is amortized or accreted for financial statement purposes in
accordance with U.S. generally accepted accounting principles. All premium and
original issue discount is amortized or accreted for tax reporting purposes as
required by federal income tax regulations. The trust may receive proceeds from
litigation settlements. Any proceeds received from litigation involving
portfolio holdings are reflected in the Statement of Operations in realized
gain/loss if the security has been disposed of by the fund or in unrealized
gain/loss if the security is still held by the trust. Any other proceeds from
litigation not related to portfolio holdings are reflected as other income in
the Statement of Operations. Legal fees and other related expenses incurred to
preserve and protect the value of a security owned are added to the cost of the
security; other legal fees are expensed. Capital infusions made directly to the
security issuer, which are generally non-recurring, incurred to protect or
enhance the value of high-yield debt securities, are reported as additions to
the cost basis of the security. Costs that are incurred to negotiate the terms
or conditions of capital infusions or that are expected to result in a plan of
reorganization are reported as realized losses. Ongoing costs incurred to
protect or enhance an investment, or costs incurred to pursue other claims or
legal actions, are expensed.
As a result of the change in estimate for the amortization of premium and
accretion of discount on certain debt securities, interest income has been
increased by $1,361,696, with a corresponding reduction to net unrealized
appreciation (depreciation).
FEES PAID INDIRECTLY - The trust's custody fee is reduced according to an
arrangement that measures the value of cash deposited with the custodian by the
trust. This amount, for the six months ended April 30, 2007, is shown as a
reduction of total expenses on the Statement of Operations.
TAX MATTERS AND DISTRIBUTIONS - The trust intends to qualify as a regulated
investment company, as defined under Subchapter M of the Internal Revenue Code,
and to distribute all of its taxable and tax-exempt income, including realized
capital gains. Accordingly, no provision for federal income tax is required in
the financial statements.
Distributions to shareholders are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations, which may differ from U.S. generally accepted accounting
principles. Certain capital accounts in the financial statements are
periodically adjusted for permanent differences in order to reflect their tax
character. These adjustments have no impact on net assets or net asset value
per share. Temporary differences which arise from recognizing certain items of
income, expense, gain or loss in different periods for financial statement and
tax purposes will reverse at some time in the future. Distributions in excess
of net investment income or net realized gains are temporary overdistributions
for financial statement purposes resulting from differences in the recognition
or classification of income or distributions for financial statement and tax
purposes.
Book/tax differences primarily relate to amortization and accretion of
debt securities.
The tax character of distributions made during the current period will be
determined at fiscal year end.
The tax character of distributions declared to shareholders is as follows:
10/31/06
Ordinary income (including any short-term
capital gains) $181,879
Tax-exempt income 24,170,453
----------------------------------------------------------
Total distributions $24,352,332
The federal tax cost and the tax basis components of distributable earnings
were as follows:
AS OF 4/30/07
Cost of investments $422,996,996
----------------------------------------------------------
Gross appreciation 31,041,999
Gross depreciation (1,005,653)
----------------------------------------------------------
Net unrealized appreciation (depreciation) $30,036,346
AS OF 10/31/06
Undistributed ordinary income $113,468
Undistributed tax-exempt income 4,844,106
Capital loss carryforwards (27,111,418)
Other temporary differences (2,104,018)
Net unrealized appreciation (depreciation) 33,127,004
The aggregate cost above includes prior fiscal year end tax adjustments.
As of October 31, 2006, the trust had capital loss carryforwards available to
offset future realized gains. Such losses expire as follows:
10/31/09 $(1,744,548)
10/31/10 (2,883,947)
10/31/11 (10,944,821)
10/31/12 (1,858,513)
10/31/13 (9,679,589)
----------------------------------------------------------
$(27,111,418)
In June 2006, FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes (the "Interpretation") was issued, and is effective for fiscal years
beginning after December 15, 2006 and is to be applied to all open tax years as
of the effective date. On December 22, 2006, the SEC delayed the implementation
of the Interpretation for regulated investment companies for an additional six
months. This Interpretation prescribes a minimum threshold for financial
statement recognition of the benefit of a tax position taken or expected to be
taken in a tax return, and requires certain expanded disclosures. Management
has evaluated the application of the Interpretation to the trust, and has
determined that there is no impact resulting from the adoption of this
Interpretation on the trust's financial statements.
(3) TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER - The trust has an investment advisory agreement with
Massachusetts Financial Services Company (MFS) to provide overall investment
management and related administrative services and facilities to the trust. The
management fee is computed daily and paid monthly at an annual rate of 0.40% of
the trust's average weekly net assets (including the value of the auction
preferred shares) and 6.32% of gross income. Gross income is calculated based
on tax rules that generally include the amortization of premium and exclude the
accretion of market discount, which may differ from investment income reported
in the Statement of Operations. The management fee, from net assets and gross
income, incurred for the six months ended April 30, 2007 was equivalent to an
annual effective rate of 0.77% of the trust's average daily net assets,
including preferred shares.
TRANSFER AGENT - Prior to December 18, 2006, MFS Service Center, Inc. (MFSC), a
wholly-owned subsidiary of MFS, received a fee from the trust for its services
as registrar and dividend-disbursing agent. Pursuant to a written agreement,
the trust paid MFSC an account maintenance fee of no more than $9.00 and a
dividend services fee of $0.75 per reinvestment. Effective December 18, 2006,
the trust has engaged Computershare Trust Company, N.A. ("Computershare") as
the sole transfer agent for the trust. MFSC will continue to monitor and
supervise the activities of Computershare for an agreed upon fee approved by
the Board of Trustees. For the six months ended April 30, 2007, these fees paid
to MFSC amounted to $17,828. MFSC also receives payment from the trust for
out-of-pocket expenses paid by MFSC on behalf of the trust. For the six months
ended April 30, 2007, these costs amounted to $23,333.
ADMINISTRATOR - MFS provides certain financial, legal, shareholder
communications, compliance, and other administrative services to the trust.
Under an administrative services agreement, the trust partially reimburses MFS
the costs incurred to provide these services. The trust is charged a fixed
amount plus a fee based on calendar year average net assets. The trust's annual
fixed amount is $17,500. The administrative services fee incurred for the six
months ended April 30, 2007 was equivalent to an annual effective rate of
0.0194% of the trust's average daily net assets.
TRUSTEES' AND OFFICERS' COMPENSATION - The trust pays compensation to
independent trustees in the form of a retainer, attendance fees, and additional
compensation to Board and Committee chairpersons. The trust does not pay
compensation directly to trustees or to officers of the trust who are also
officers of the investment adviser, all of whom receive remuneration for their
services to the trust from MFS. Certain officers and trustees of the trust are
officers or directors of MFS and MFSC. The trust has an unfunded, defined
benefit plan for certain retired independent trustees which resulted in a
pension expense of $3,467. This amount is included in independent trustees'
compensation for the six months ended April 30, 2007. The liability for
deferred retirement benefits payable to certain retired independent trustees
amounted to $111,367 at April 30, 2007, and is included in payable for
independent trustees' compensation.
OTHER - This trust and certain other MFS funds (the funds) have entered into a
services agreement (the Agreement) which provides for payment of fees by the
funds to Tarantino LLC in return for the provision of services of an
Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an
officer of the funds and the sole member of Tarantino LLC. The funds can
terminate the Agreement with Tarantino LLC at any time under the terms of the
Agreement. For the six months ended April 30, 2007, the fee paid to Tarantino
LLC was $1,248. MFS has agreed to reimburse the trust for a portion of the
payments made by the funds to Tarantino LLC in the amount of $808, which is
shown as a reduction of total expenses in the Statement of Operations.
Additionally, MFS has agreed to bear all expenses associated with office space,
other administrative support, and supplies provided to the ICCO.
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations, aggregated
$33,647,120 and $34,955,330 respectively.
(5) SHARES OF BENEFICIAL INTEREST
The trust's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest. The Trustees have
authorized the repurchase by the trust of up to 10% annually of its own shares
of beneficial interest. During the six months ended April 30, 2007, the trust
did not repurchase any shares. Transactions in trust shares were as follows:
SIX MONTHS ENDED YEAR ENDED
4/30/07 10/31/06
SHARES AMOUNT SHARES AMOUNT
Shares issued to
shareholders in reinvestment
of distributions 101,564 $822,150 179,319 $1,428,897
(6) LINE OF CREDIT
The trust and other funds managed by MFS participate in a $1 billion unsecured
committed line of credit provided by a syndication of banks under a credit
agreement. In addition, the trust and other funds managed by MFS have
established uncommitted borrowing arrangements with certain banks. Borrowings
may be made for temporary financing needs. Interest is charged to each fund,
based on its borrowings, generally at a rate equal to the Federal Reserve funds
rate plus 0.30% for the committed line of credit and 0.35% for the uncommitted
line of credit. In addition, a commitment fee, based on the average daily,
unused portion of the committed line of credit, is allocated among the
participating funds at the end of each calendar quarter. For the six months
ended April 30, 2007, the trust's commitment fee and interest expense on the
line of credit were $847 and $921, respectively, and are included in
miscellaneous expense and interest expense and fees, respectively, on the
Statement of Operations.
(7) AUCTION PREFERRED SHARES
The trust issued 2,800 shares of Auction Preferred Shares ("APS"), series T and
2,800 of Auction Preferred Shares, series TH. Dividends are cumulative at a
rate that is reset every seven days for both series through an auction process.
During the six months ended April 30, 2007, the dividend rates ranged from
2.89% to 4.35%. The trust pays an annual fee equivalent to 0.25% of the
preferred share liquidation value for remarketing efforts associated with the
preferred auction. The APS are redeemable at the option of the trust in whole
or in part at the redemption price equal to $25,000 per share, plus accumulated
and unpaid dividends. The APS are also subject to mandatory redemption if
certain requirements relating to their asset maintenance coverage are not
satisfied. The trust is required to maintain certain asset coverage with
respect to the APS as defined in the trust's By-Laws and the Investment Company
Act of 1940.
In accordance with the provisions of EITF D-98, "Classification and
measurements of Redeemable Securities", the trust has reclassified its Auction
Preferred Shares outside of permanent equity in the Net Assets section of the
Statement of Assets and Liabilities. In addition, distributions to APS
shareholders are classified as a component of the "Change in net assets from
operations" on the Statement of Operations and Statement of Changes in Net
Assets and as a component of the "Total from investment operations" in the
Financial Highlights.
(8) LOSS CONTINGENCY
The issuers of certain bonds held in the fund's portfolio have made public that
the Internal Revenue Service (IRS), in connection with an audit of their bonds,
has made either a Preliminary Adverse Determination or a Proposed Adverse
Determination that interest paid on the bonds is not excludable from gross
income for federal tax purposes. While the final resolution is uncertain at
this time, the bond issuers may enter into closing agreements with the IRS in
satisfaction of all taxes owed. However, if a bond issuer does not settle with
the IRS and the IRS issues a final determination of taxability, the fund may be
required to amend Form 1099-DIVs issued to shareholders or may enter into a
closing agreement with the IRS and pay an agreed upon amount in lieu of
reissuing 1099s. Depending on the final disposition of the various audits, an
estimate of the cumulative tax liability, including interest, could range from
$0 to $393,129, or a maximum share impact of less than $0.01 per share.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees and Shareholders of MFS Municipal Income Trust:
We have reviewed the accompanying statement of assets and liabilities of MFS
Municipal Income Trust (the "Trust"), including the portfolio of investments,
as of April 30, 2007, and the related statement of operations, changes in net
assets, and financial highlights for the six-month period ended April 30,
2007. These interim financial statements and financial highlights are the
responsibility of the Trust's management.
We conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board (United States),
the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying interim financial statements and financial
highlights referred to above for them to be in conformity with accounting
principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the statement of changes
in net assets for the year ended October 31, 2006, and financial highlights
for each of the five years in the period ended October 31, 2006, and in our
report dated December 21, 2006, we expressed an unqualified opinion on such
statement of changes in net assets and financial highlights.
DELOITTE & TOUCHE LLP
October 8, 2007
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
A discussion regarding the Board's most recent review and renewal of the
trust's investment advisory agreement is available by clicking on the trust's
name under "Select a fund" on the MFS Web site (mfs.com).
PROXY VOTING POLICIES AND INFORMATION
A general description of the MFS funds' proxy voting policies and procedures is
available without charge, upon request, by calling 1-800-225-2606, by visiting
the Proxy Voting section of mfs.com or by visiting the SEC's Web site at
http://www.sec.gov.
Information regarding how the trust voted proxies relating to portfolio
securities during the most recent twelve-month period ended June 30 is
available without charge by visiting the Proxy Voting section of mfs.com or by
visiting the SEC's Web site at http://www.sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
The trust will file a complete schedule of portfolio holdings with the
Securities and Exchange Commission (the Commission) for the first and third
quarters of each fiscal year on Form N-Q. The trust's Form N-Q may be reviewed
and copied at the:
Public Reference Room
Securities and Exchange Commission
100 F Street, NE, Room 1580
Washington, D.C. 20549
Information on the operation of the Public Reference Room may be obtained by
calling the Commission at 1-202-551-5850. The trust's Form N-Q is
available on the EDGAR database on the Commission's Internet Web site at
http://www.sec.gov, and copies of this information may be obtained, upon
payment of a duplicating fee, by electronic request at the following e-mail
address: publicinfo@sec.gov or by writing the Public Reference Section at the
above address.
A shareholder can also obtain the quarterly portfolio holdings report at
mfs.com.
CONTACT INFORMATION AND NUMBER OF SHAREHOLDERS
INVESTOR INFORMATION
Transfer Agent, Registrar and Dividend Disbursing Agent
Call 1-800-637-2304 any business day from 9 a.m. to 5 p.m. Eastern time
Write to: Computershare Trust Company, N.A.
P.O. Box 43078
Providence, RI 02940-3078
Effective December 18, 2006, Computershare Trust Company, N.A. became the
Transfer Agent and Registrar and Computershare Shareholder Services, Inc.
became the Dividend Disbursing Agent, succeeding MFS Service Center, Inc.
NUMBER OF SHAREHOLDERS
As of April 30, 2007, our records indicate that there are
2,840 registered shareholders and approximately 12,917 shareholders owning
trust shares in "street" name, such as through brokers, banks, and other
financial intermediaries.
If you are a "street" name shareholder and wish to directly receive our
reports, which contain important information about the trust, please write or
call:
Computershare Trust Company, N.A.
P.O. Box 43078
Providence, RI 02940-3078
1-800-637-2304
M F S(R)
INVESTMENT MANAGEMENT
500 Boylston Street, Boston, MA 02116
ITEM 2. CODE OF ETHICS.
The Registrant has not amended any provision in its Code of Ethics (the "Code")
that relates to any element of the Code's definition enumerated in paragraph (b)
of Item 2 of this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semi-annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semi-annual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable for semi-annual reports.
ITEM 6. SCHEDULE OF INVESTMENTS.
A schedule of investments for each series of the Registrant is included as part
of the report to shareholders of such series under Item 1 of this Form N-CSR.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable for semi-annual reports.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
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MFS MUNICIPAL INCOME TRUST
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(D) MAXIMUM NUMBER
(C) TOTAL NUMBER OF (OR APPROXIMATE
SHARES PURCHASED AS DOLLAR VALUE) OF
(B) AVERAGE PART OF PUBLICLY SHARES THAT MAY YET
(A) TOTAL NUMBER OF PRICE PAID ANNOUNCED PLANS OR BE PURCHASED UNDER
PERIOD SHARES PURCHASED PER SHARE PROGRAMS THE PLANS OR PROGRAMS
-------------------------------------------------------------------------------------------------------------
11/1/06 - 11/30/06 0 N/A N/A 3,994,370
-------------------------------------------------------------------------------------------------------------
12/1/06 - 12/31/06 0 N/A N/A 3,994,370
-------------------------------------------------------------------------------------------------------------
1/1/07 - 1/31/07 0 N/A N/A 3,994,370
-------------------------------------------------------------------------------------------------------------
2/1/07 - 2/28/07 0 N/A N/A 3,994,370
-------------------------------------------------------------------------------------------------------------
3/1/07 - 3/31/07 0 N/A N/A 4,016,342
-------------------------------------------------------------------------------------------------------------
4/1/07 - 4/30/07 0 N/A N/A 4,016,342
-------------------------------------------------------------------------------------------------------------
TOTAL 0 N/A N/A
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Note: The Board of Trustees approves procedures to repurchase Fund shares
annually. The notification to shareholders of the program is included in the
semi-annual and annual reports sent to shareholders. These annual programs begin
on March 1st of each year. The programs conform to the conditions of Rule 10b-18
of the Securities Exchange Act of 1934 and limit the aggregate number of Fund
shares that may be repurchased in each annual period (March 1 through the
following February 28) to 10% of the Registrant's outstanding shares as of the
first day of the plan year (March 1). The aggregate number of Fund shares
available for repurchase for the March 1, 2007 plan year is 4,016,342.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no material changes to the procedures by which shareholders may send
recommendations to the Board for nominees to the Registrant's Board since the
Registrant last provided disclosure as to such procedures in response to the
requirements of Item 407(c)(2)(iv) of Regulation S-K (as required by Item
22(b)(15) of Schedule 14A), or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the effectiveness of the registrant's
disclosure controls and procedures (as defined in Rule 30a-3(c) under the
Investment Company Act of 1940 (the "Act")) as conducted within 90 days of
the filing date of this report on Form N-CSR, the registrant's principal
financial officer and principal executive officer have concluded that those
disclosure controls and procedures provide reasonable assurance that the
material information required to be disclosed by the registrant on this
report is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and
forms.
(b) There were no changes in the registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during
the second fiscal quarter of the period covered by the report that have
materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant
intends to satisfy the Item 2 requirements through filing of an
exhibit.
(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule
30a-2 under the Act (17 CFR 270.30a-2): Attached hereto.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17
CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title
18 of the United States Code (18 U.S.C. 1350) as an exhibit. A
certification furnished pursuant to this paragraph will not be deemed
"filed" for the purposes of Section 18 of the Exchange Act (15 U.S.C. 78r),
or otherwise subject to the liability of that section. Such certification
will not be deemed to be incorporated by reference into any filing under
the Securities Act of 1933 or the Exchange Act, except to the extent that
the registrant specifically incorporates it by reference: Attached hereto.
NOTICE
A copy of the Amended and Restated Declaration of Trust of the Registrant is on
file with the Secretary of State of The Commonwealth of Massachusetts and notice
is hereby given that this instrument is executed on behalf of the Registrant by
an officer of the Registrant as an officer and not individually and the
obligations of or arising out of this instrument are not binding upon any of the
Trustees or shareholders individually, but are binding only upon the assets and
property of the respective constituent series of the Registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) MFS MUNICIPAL INCOME TRUST
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By (Signature and Title)* MARIA F. DWYER
-----------------------------------------------------
Maria F. Dwyer, President
Date: October 10, 2007
---------------
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 (Signature and Title)* MARIA F. DWYER
-----------------------------------------------------
Maria F. Dwyer, President
(Principal Executive Officer)
Date: October 10, 2007
---------------
By (Signature and Title)* TRACY ATKINSON
-----------------------------------------------------
Tracy Atkinson, Treasurer
(Principal Financial Officer and
Accounting Officer)
Date: October 10, 2007
---------------
* Print name and title of each signing officer under his or her signature.