N-Q 1 form.txt United States Securities and Exchange Commission Washington, eD.C. 20549 Form N-Q Quarterly Schedule of Portfolio Holdings of Registered Management Investment Companies 811-2677 (Investment Company Act File Number) Federated Municipal Securities Fund, Inc. --------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Federated Investors Funds 5800 Corporate Drive Pittsburgh, Pennsylvania 15237-7000 (412) 288-1900 (Registrant's Telephone Number) John W. McGonigle, Esquire Federated Investors Tower 1001 Liberty Avenue Pittsburgh, Pennsylvania 15222-3779 (Name and Address of Agent for Service) (Notices should be sent to the Agent for Service) Date of Fiscal Year End: 3/31/07 Date of Reporting Period: Quarter ended 6/30/06 --------------------- Item 1. Schedule of Investments FEDERATED MUNICIPAL SECURITIES FUND, INC. PORTFOLIO OF INVESTMENTS June 30, 2006 (unaudited) PRINCIPAL VALUE AMOUNT
MUNICIPAL BONDS--98.4% ALABAMA--1.4% $ 1,000,000 Alabama Agricultural & Mechanical University, Revenue Bonds (Series 1998), 5.00% (MBIA Insurance $ 1,032,780 Corp. INS)/(Original Issue Yield: 5.15%), 11/1/2016 1,400,000 Camden, AL IDB, Exempt Facilities Refunding Revenue Bonds (Series 2003A), 6.125% (Weyerhaeuser 1,510,782 Co.), 12/1/2024 3,000,000 Mobile County, AL IDA, IDRBs (Series 2000), 6.875% TOBs (Ipsco, Inc.), Mandatory Tender 5/1/2010 3,174,780 1,000,000 Tuscaloosa, AL, UT GO Warrants (Series 2000), 5.75% (Original Issue Yield: 5.90%), 1/1/2020 1,062,680 TOTAL 6,781,022 ARIZONA--0.8% 1,810,000 Show Low, AZ IDA, Hospital Revenue Bonds, 5.00% (Navapache Regional Medical Center)/(Radian 1,826,181 Asset Assurance INS), 12/1/2030 2,000,000 Show Low, AZ IDA, Hospital Revenue Bonds, 5.00% (Navapache Regional Medical Center)/(Radian 2,010,360 Asset Assurance INS), 12/1/2035 TOTAL 3,836,541 ARKANSAS--0.2% 1,000,000 Jefferson County, AR, Hospital Revenue Improvement and Refunding Bonds (Series 2001), 5.80% 1,046,070 (Jefferson Regional Medical Center)/(Original Issue Yield: 5.90%), 6/1/2021 CALIFORNIA--8.3% 1,825,000 California Educational Facilities Authority, Revenue Bonds (Series 2005), 5.00% (California 1,802,352 College of the Arts), 6/1/2030 1,000,000 1 California PCFA, Solid Waste Disposal Revenue Bonds (Series 2005A-2), 5.40% (Waste Management, 1,025,680 Inc.), 4/1/2025 3,000,000 1 California PCFA, Solid Waste Disposal Revenue Bonds (Series 2005C), 5.125% (Waste Management, 3,037,650 Inc.), 11/1/2023 1,760,000 California State Department of Veteran Affairs, Home Purpose Revenue Bonds (Series 1997C), 1,820,878 5.50%, 12/1/2019 5,000,000 1,2 California State, Economic Recovery Revenue Bonds Trust Program (Series 929) RITES, 6.30% 5,712,700 (California State Fiscal Recovery Fund), 7/1/2013 915,000 California State, UT GO Bonds, 5.75% (United States Treasury PRF 5/1/2010@101), 5/1/2030 985,217 1,585,000 California State, UT GO Bonds, 5.75% (United States Treasury PRF 5/1/2010@101), 5/1/2030 1,700,768 750,000 California State, UT GO Bonds, 5.75%, 5/1/2030 797,685 3,000,000 California State, Various Purpose UT GO Bonds, 5.125% (Original Issue Yield: 5.16%), 4/1/2023 3,101,520 2,000,000 California State, Various Purpose UT GO Bonds, 5.25% (Original Issue Yield: 5.32%), 11/1/2025 2,081,300 1,495,000 California Statewide Communities Development Authority, COP , 6.00% (Sutter Health)/(FSA INS), 1,592,878 8/15/2013 1,930,000 California Statewide Communities Development Authority, COP, 6.00% (Sutter Health)/(FSA INS), 2,068,709 8/15/2015 2,000,000 Chula Vista, CA, IDRBs (Series 1992D), 5.00% (San Diego Gas & Electric Co.), 12/1/2027 2,005,280 1,000,000 Golden State Tobacco Securitization Corp., CA, (Series A-4), 7.80%, 6/1/2042 1,190,370 3,000,000 Golden State Tobacco Securitization Corp., CA, Tobacco Settlement Asset-Backed Revenue Bonds 3,357,690 (Series 2003A-1), 6.75% (Original Issue Yield: 7.00%), 6/1/2039 1,350,000 Poway, CA Unified School District, Special Tax Bonds (Series 2005), 5.125% (Community Facilities 1,322,865 District No. 6 (4S Ranch))/(Original Issue Yield: 5.21%), 9/1/2035 1,250,000 Southern California Logistics Airport Authority, Tax Allocation Bonds, 5.00% (United States 1,334,262 Treasury PRF 6/1/2015@100), 12/1/2035 1,500,000 University of California, General Revenue Bonds, (Series A), 5.125% (AMBAC INS), 5/15/2020 1,564,365 2,500,000 University of California, Hospital Revenue Bonds (Series 2004A), 5.25% (UCLA Medical 2,593,225 Center)/(AMBAC INS), 5/15/2030 TOTAL 39,095,394 COLORADO--1.6% 760,000 Colorado Health Facilities Authority, Health Facilities Revenue Bonds (Series 2004A), 5.25% 769,690 (Evangelical Lutheran Good Samaritan Society)/(Original Issue Yield: 5.48%), 6/1/2034 430,000 Colorado Health Facilities Authority, Health Facilities Revenue Bonds (Series 2005), 5.25% 437,835 (Evangelical Lutheran Good Samaritan Society), 6/1/2023 5,000,000 Colorado Health Facilities Authority, Revenue Bonds (Series 2005), 5.25% (Covenant Retirement 5,029,700 Communities, Inc.), 12/1/2025 1,000,000 Westminster, CO, Sales & Use Tax Revenue Refunding Bonds, (Series A), 5.60%, 12/1/2016 1,040,500 TOTAL 7,277,725 CONNECTICUT--0.4% 600,000 Connecticut State HEFA, Revenue Bonds (Series 2005C), 5.125% (Eastern Connecticut Health 612,360 Network)/(Radian Asset Assurance INS), 7/1/2030 1,000,000 New Haven, CT, UT GO Bonds, (Series B), 5.75% (United States Treasury PRF 1,066,310 11/1/2009@101)/(Original Issue Yield: 5.83%), 11/1/2018 TOTAL 1,678,670 DELAWARE--0.7% 800,000 Delaware Health Facilities Authority, Refunding Revenue Bonds (Series 2004A), 5.50% (Beebe 830,200 Medical Center), 6/1/2024 2,500,000 Delaware State, UT GO (Series 2000A), 5.25% (United States Treasury PRF 4/1/2010@100)/(Original 2,617,500 Issue Yield: 5.40%), 4/1/2016 TOTAL 3,447,700 DISTRICT OF COLUMBIA--1.7% 5,000,000 District of Columbia, Ballpark Revenue Bonds (Series 2006B-1), 5.00% (FGIC INS), 2/1/2035 5,068,250 3,000,000 1,2 District of Columbia, RITES (PA-1343), 5.82822% (AMBAC INS), 6/1/2023 3,160,500 TOTAL 8,228,750 FLORIDA--3.1% 1,000,000 Broward County, FL Educational Facilities Authority, Educational Facilities Revenue Bonds 1,029,650 (Series 2004B), 5.50% (Nova Southeastern University), 4/1/2024 665,000 Florida State Board of Education Administration, UT GO Capital Outlay Bonds, 9.125% (Florida 879,649 State)/(Escrowed In Treasuries COL)/(Original Issue Yield: 9.173%), 6/1/2014 4,335,000 Florida State Board of Education Administration, UT GO Capital Outlay Bonds, 9.125% (Florida 5,333,437 State)/(Original Issue Yield: 9.173%), 6/1/2014 3,000,000 Florida State, UT GO Bonds, Broward County Expressway Authority, 10.00% (Escrowed In Treasuries 3,914,790 COL)/(Original Issue Yield: 10.105%), 7/1/2014 1,000,000 Miami-Dade County, FL Expressway Authority, Toll System Revenue Bonds, 6.00% (FGIC INS), 1,081,830 7/1/2013 2,255,000 St. Johns County, FL IDA, First Mortgage Revenue Bonds (Series 2004A), 5.85% (Presbyterian 2,369,622 Retirement Communities ), 8/1/2024 TOTAL 14,608,978 GEORGIA--1.7% 615,000 Atlanta, GA, Tax Allocation Bonds (Series 2005B), 5.60% (Eastside Tax Allocation 622,454 District)/(Original Issue Yield: 5.65%), 1/1/2030 1,850,000 Bibb County, GA Development Authority, Revenue Bonds, (Series 1991 IR-1), 4.85% (Temple-Inland, 1,865,706 Inc.), 12/1/2009 1,000,000 Chatham County, GA Hospital Authority, Hospital Improvement Revenue Bonds (Series 2004A), 5.75% 1,053,470 (Memorial Health University Medical Center), 1/1/2029 2,000,000 Floyd County, GA Development Authority, Environmental Revenue Bonds, 5.70% (Temple-Inland, 2,070,260 Inc.), 12/1/2015 2,000,000 Savannah, GA EDA, Revenue Bonds, 6.80% (Savannah College of Art and Design, Inc.)/(United States 2,198,920 Treasury PRF 10/1/2009@102), 10/1/2019 TOTAL 7,810,810 ILLINOIS--1.8% 1,000,000 Chicago, IL Public Building Commission, Revenue Bonds, (Series A), 7.00% (Escrowed In Treasuries 1,243,170 COL)/(Original Issue Yield: 7.125%), 1/1/2020 1,500,000 Illinois Finance Authority, Refunding Revenue Bonds, 5.25% (OSF Health Care Systems)/(Original 1,516,380 Issue Yield: 5.30%), 11/15/2023 3,750,000 Illinois Finance Authority, Revenue Bonds (Series 2006A), 5.00% (Illinois Institute of 3,739,162 Technology), 4/1/2031 1,000,000 Illinois Finance Authority, Solid Waste Disposal Revenue Bonds, 5.05% (Waste Management, Inc.), 976,510 8/1/2029 1,000,000 Lake County, IL Community School District No. 116, UT GO Bonds, 7.60% (Escrowed In Treasuries 1,221,560 COL), 2/1/2014 TOTAL 8,696,782 INDIANA--3.9% 1,000,000 Indiana Development Finance Authority, Environmental Improvement Revenue Bonds, 5.25% TOBs 1,055,640 (Marathon Oil Corp.) Mandatory Tender 12/2/2011 3,000,000 Indiana Health & Educational Facility Financing Authority, Revenue Bonds (Series 2005), 5.25% 2,943,000 (Baptist Homes of Indiana), 11/15/2035 2,000,000 Indiana Health Facility Financing Authority, Hospital Revenue Bonds (Series 2004A), 6.25% 2,114,580 (Community Foundation of Northwest Indiana), 3/1/2025 1,000,000 Indiana Health Facility Financing Authority, Hospital Revenue Refunding Bonds, 5.25% (Floyd 1,008,400 Memorial Hospital, IN)/(Original Issue Yield: 5.50%), 2/15/2022 2,200,000 Indiana Health Facility Financing Authority, Revenue Bonds (Series 2004A), 5.375% (Deaconess 2,303,202 Hospital)/(AMBAC INS), 3/1/2029 950,000 Indiana State HFA, SFM Revenue Bonds (Series A), 5.30% (GNMA COL Home Mortgage Program GTD), 967,356 7/1/2022 1,500,000 Indiana State Office Building Commission Capitol Complex, Revenue Bonds, (Series A), 7.40% (MBIA 1,815,705 Insurance Corp. INS)/(Original Issue Yield: 7.488%), 7/1/2015 2,500,000 Indianapolis, IN Airport Authority, Special Facilities Revenue Refunding Bonds (Series 2004A), 2,550,625 5.10% (FedEx Corp.), 1/15/2017 1,500,000 Indianapolis, IN Local Public Improvement Bond Bank, Refunding Revenue Bonds, (Series D), 6.75% 1,698,765 (United States Treasury COL)/(Original Issue Yield: 6.90%), 2/1/2014 2,000,000 St. Joseph County, IN Hospital Authority, Health Facilities Revenue Bonds (Series 2005), 5.375% 1,974,080 (Madison Center Obligated Group), 2/15/2034 TOTAL 18,431,353 IOWA--0.2% 1,000,000 Scott County, IA, Revenue Refunding Bonds (Series 2004), 5.625% (Ridgecrest Village), 11/15/2018 1,010,300 KANSAS--0.3% 1,150,000 University of Kansas Hospital Authority, Health Facilities Revenue Bonds, 5.50% (KU Health 1,199,323 System)/(Original Issue Yield: 5.62%), 9/1/2022 LOUISIANA--1.7% 5,000,000 De Soto Parish, LA Environmental Improvement Authority, Refunding Revenue Bonds (Series 2005A), 4,770,450 4.75% (International Paper Co.), 3/1/2019 3,000,000 St. James Parish, LA, Solid Waste Disposal Revenue Bonds, 7.70% (IMC Phosphates Co.)/(Original 3,002,910 Issue Yield: 7.75%), 10/1/2022 TOTAL 7,773,360 MASSACHUSETTS--5.1% 5,000,000 Commonwealth of Massachusetts, UT GO Bonds (Series 2000B), 6.00% (United States Treasury PRF 5,371,100 6/1/2010@100), 6/1/2016 1,830,000 Massachusetts Bay Transportation Authority General Transportation System, Special Assessment 1,952,244 Bonds, 5.75% (United States Treasury PRF 7/1/2010@100), 7/1/2016 170,000 Massachusetts Bay Transportation Authority General Transportation System, Special Assessment 180,645 Bonds, 5.75%, 7/1/2016 2,000,000 Massachusetts HEFA, Revenue Bonds (Series 2004A), 6.375% (Northern Berkshire Health System 2,084,100 )/(Original Issue Yield: 6.60%), 7/1/2034 790,000 Massachusetts HEFA, Revenue Bonds (Series 2002D), 6.35% (Milford-Whitinsville 823,504 Hospital)/(Original Issue Yield: 6.38%), 7/15/2032 1,000,000 Massachusetts HEFA, Revenue Bonds (Series 2002D), 6.50% (Milford-Whitinsville Hospital), 1,065,680 7/15/2023 4,550,000 Massachusetts HEFA, Revenue Bonds (Series 2005E), 5.00% (Emerson Hospital)/(Radian Asset 4,579,575 Assurance INS), 8/15/2025 2,000,000 Massachusetts State Development Finance Agency, Revenue Bonds, 5.00% (Seven Hills Foundation & 2,008,620 Affiliates)/(Radian Asset Assurance INS), 9/1/2035 1,250,000 Massachusetts State Development Finance Agency, Solid Waste Disposal Revenue Bonds, 5.45% (Waste 1,312,437 Management, Inc.), 6/1/2014 40,000 Massachusetts Water Pollution Abatement Trust Pool, Program Bonds (Series 6) Revenue Bonds 41,863 Unrefunded, 5.25% (Original Issue Yield: 5.50%), 8/1/2019 2,460,000 Massachusetts Water Pollution Abatement Trust Pool, Program (Series 6) Revenue Bonds PRF, 5.25% 2,602,090 (United States Treasury PRF 8/1/2010@101)/(Original Issue Yield: 5.50%), 8/1/2019 1,000,000 Springfield, MA, UT GO Refunding Bonds, 5.00% (FSA INS)/(Original Issue Yield: 5.12%), 1,034,840 11/15/2018 1,000,000 Sterling, MA, UT GO Bonds, 6.00% (FGIC INS), 2/15/2020 1,076,110 TOTAL 24,132,808 MICHIGAN--4.4% 2,090,000 Cornell Township MI, Economic Development Corp., Refunding Revenue Bonds, 5.875% (MeadWestvaco 2,288,863 Corp.)/(United States Treasury PRF 5/1/2012@100), 5/1/2018 2,515,000 Delta County, MI Economic Development Corp., Environmental Improvement Revenue Refunding Bonds 2,800,377 (Series A), 6.25% (MeadWestvaco Corp.)/(United States Treasury PRF 4/15/2012@100), 4/15/2027 1,000,000 Dexter, MI Community Schools, UT GO Bonds, 5.10% (FGIC INS), 5/1/2018 1,060,190 500,000 Gaylord, MI Hospital Finance Authority, Hospital Revenue Refunding Bonds (Series 2004), 6.20% 510,450 (Otsego Memorial Hospital Obligated Group)/(Original Issue Yield: 6.45%), 1/1/2025 150,000 Gaylord, MI Hospital Finance Authority, Hospital Revenue Refunding Bonds (Series 2004), 6.50% 153,516 (Otsego Memorial Hospital Obligated Group)/(Original Issue Yield: 6.70%), 1/1/2037 2,000,000 Kent Hospital Finance Authority, MI, Revenue Bonds (Series 2005A), 6.00% (Metropolitan Hospital 2,121,980 ), 7/1/2035 2,390,000 Michigan Municipal Bond Authority, Revenue Bonds (Series 2000), 5.875% (Clean Water Revolving 2,588,083 Fund)/(United States Treasury PRF 10/1/2010@101), 10/1/2015 2,595,000 Michigan Municipal Bond Authority, Revenue Bonds (Series 2000), 5.875% (Drinking Water Revolving 2,804,780 Fund)/(United States Treasury PRF 10/1/2010@101), 10/1/2015 1,500,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds (Series 2002A) , 6.00% 1,602,195 (Oakwood Obligated Group), 4/1/2022 1,000,000 Michigan State Hospital Finance Authority, Refunding Revenue Bonds (Series 2002A), 5.50% 1,041,100 (Crittenton Hospital, MI)/(Original Issue Yield: 5.67%), 3/1/2022 1,000,000 Michigan State Strategic Fund, Revenue Refunding PCRBs (Series C), 5.45% (Detroit Edison Co.), 1,029,240 9/1/2029 2,000,000 Michigan State, Environmental Protection Program UT GO Bonds, 5.25% (United States Treasury PRF 2,102,320 11/1/2010@100)/(Original Issue Yield: 5.34%), 11/1/2018 1,000,000 Northern Michigan University, Revenue Bonds, 5.125% (MBIA Insurance Corp. INS)/(Original Issue 1,026,020 Yield: 5.35%), 12/1/2020 TOTAL 21,129,114 MINNESOTA--0.2% 1,000,000 St. Paul, MN Housing & Redevelopment Authority, Revenue Bonds (Series 1997A), 5.70% (Health 1,023,130 East, Inc.)/(Original Issue Yield: 5.756%), 11/1/2015 MISSISSIPPI--0.4% 2,050,000 Mississippi Business Finance Corp., Refunding PCRBs, 5.90% (System Energy Resources, 2,060,025 Inc.)/(Original Issue Yield: 5.93%), 5/1/2022 MISSOURI--0.4% 655,000 1 Kansas City, MO IDA, MFH Revenue Bonds, 6.70% (Woodbridge Apartments Project), 8/1/2015 639,326 1,335,000 Missouri Development Finance Board, Infrastructure Facilities Revenue Bonds (Series 2005A), 1,304,989 5.00% (Branson, MO), 6/1/2035 TOTAL 1,944,315 NEVADA--0.4% 1,000,000 Henderson, NV, Health Facility Revenue Bonds (Series 2004A), 5.625% (Catholic Healthcare 1,044,830 West)/(Original Issue Yield: 5.72%), 7/1/2024 250,000 Henderson, NV, Local Improvement District No. T-16 LT Obligation Improvement Bonds, 5.10% (Falls 249,660 at Lake Las Vegas LID No. T-16)/(Original Issue Yield: 5.15%), 3/1/2022 600,000 Henderson, NV, Local Improvement District No. T-16 LT Obligation Improvement Bonds, 5.125% 596,748 (Falls at Lake Las Vegas LID No. T-16)/(Original Issue Yield: 5.20%), 3/1/2025 TOTAL 1,891,238 NEW HAMPSHIRE--0.4% 1,685,000 New Hampshire Higher Educational & Health Facilities Authority, Healthcare System Revenue Bonds 1,731,287 (Series 2004), 5.375% (Covenant Health Systems)/(Original Issue Yield: 5.50%), 7/1/2024 NEW JERSEY--3.8% 1,100,000 New Jersey EDA, Revenue Refunding Bonds (Series A), 5.75% (Winchester Gardens at Ward 1,149,720 Homestead)/(Original Issue Yield: 5.75%), 11/1/2024 5,000,000 New Jersey EDA, School Facilities Revenue Bonds (Series 2003F), 5.00% (New Jersey State)/(United 5,289,150 States Treasury PRF 6/15/2013@100)/(Original Issue Yield: 5.08%), 6/15/2026 650,000 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, (Series 2005A), 5.50% 663,878 (Children's Specialized Hospital), 7/1/2030 5,000,000 1,2 New Jersey State Transportation Trust Fund Authority, RITES (PA-1204), 6.80822% (FSA INS), 5,914,800 12/15/2013 2,800,000 New Jersey State Transportation Trust Fund Authority, Transportation System Revenue Bonds 3,058,020 (Series 2006A), 5.50%, 12/15/2022 1,500,000 Newark, NJ Housing Authority, Revenue Bonds (Series 2004), 5.25% (Port Authority-Port Newark 1,572,915 Marine Terminal)/(MBIA Insurance Corp. INS), 1/1/2022 TOTAL 17,648,483 NEW MEXICO--0.9% 4,000,000 New Mexico State Finance Authority Transportation Revenue, Senior Lien Transportation Revenue 4,217,880 Bonds (Series 2004A) , 5.25% (MBIA Insurance Corp. INS), 6/15/2024 NEW YORK--12.6% 700,000 Albany County, NY IDA, IDRBs (Series 2004A), 5.625% (Albany College of Pharmacy), 12/1/2034 722,694 2,000,000 Hempstead Town, NY IDA, Civic Facility Revenue Bonds, 5.00% (Adelphi University), 10/1/2035 2,004,260 2,000,000 Hempstead Town, NY IDA, Civic Facility Revenue Bonds, 5.25% (Hofstra University), 7/1/2018 2,072,240 5,000,000 1,2 Metropolitan Transportation Authority, NY, RITES (PA-1042R), 6.80822% (MBIA Insurance Corp. 5,727,300 INS), 1/1/2010 3,000,000 1 New York City, NY IDA, Liberty Revenue Bonds (Series A), 6.25% (7 World Trade Center LLC), 3,182,160 3/1/2015 4,000,000 New York City, NY IDA, Special Airport Facility Revenue Bonds (Series 2001A), 5.50% (Airis JFK I 4,078,160 LLC Project at JFK International)/(Original Issue Yield: 5.65%), 7/1/2028 300,000 New York City, NY IDA, Special Facilities Revenue Bonds, 5.50% (Terminal One Group Association), 312,156 1/1/2024 3,000,000 New York City, NY Municipal Water Finance Authority, Water & Sewer System Revenue Bonds (Fiscal 3,056,340 2005 Series C), 5.00%, 6/15/2030 3,000,000 New York City, NY Transitional Finance Authority, Revenue Bonds (Series 2000C), 5.50% (United 3,200,400 States Treasury PRF 5/1/2010@101)/(Original Issue Yield: 5.68%), 11/1/2020 2,000,000 1,2 New York City, NY, RITES (PA-1349), 6.24685% (MBIA Insurance Corp. INS), 8/1/2018 2,251,380 1,985,000 New York City, NY, UT GO Bonds (Fiscal 2003 Series J), 5.50%, 6/1/2023 2,095,783 2,500,000 New York State Dormitory Authority, Revenue Bonds (Series A), 5.50% (University of Rochester, 2,637,475 NY)/(Original Issue Yield: 5.60%), 7/1/2016 5,000,000 3 New York State Dormitory Authority, Revenue Bonds, 6.00% (State University of New York)/(MBIA 5,411,950 Insurance Corp. INS), 5/15/2016 1,510,000 New York State Environmental Facilities Corp., Clean Water & Drinking Revenue Bonds, 5.25% 1,560,026 (Escrowed In Treasuries COL), 6/15/2014 990,000 New York State Environmental Facilities Corp., Clean Water & Drinking Revenue Bonds, 5.25%, 1,022,423 6/15/2014 3,315,000 New York State Mortgage Agency, Mortgage Revenue Bonds (Twenty-Ninth Series), 5.40%, 10/1/2022 3,391,444 1,250,000 1,2 New York State Thruway Authority, Drivers (Series 1069), 7.128% (New York State Thruway 1,447,425 Authority-Highway & Bridge Trust Fund)/(AMBAC INS), 4/1/2013 4,000,000 New York State Thruway Authority, Local Highway & Bridge Service Contract Revenue Bonds (Series 4,142,360 A-2), 5.375% (New York State)/(United States Treasury PRF 4/1/2008@101), 4/1/2016 1,015,000 Suffolk County, NY Water Authority, Water System Revenue Bonds (Series 1994), 6.00% (Escrowed In 1,134,567 Treasuries COL), 6/1/2014 1,985,000 Suffolk County, NY Water Authority, Water System Revenue Bonds (Series 1994), 6.00% (MBIA 2,225,364 Insurance Corp. INS), 6/1/2014 2,000,000 TSASC, Inc. NY, Tobacco Settlement Asset-Backed Bonds (Series 2006-1), 5.00% (Original Issue 1,957,940 Yield: 5.125%), 6/1/2026 5,320,000 Triborough Bridge & Tunnel Authority, NY, General Purpose Revenue Bonds (Series 1999B), 5.75% 5,633,986 (Escrowed In Treasuries COL), 1/1/2015 TOTAL 59,267,833 NORTH CAROLINA--1.8% 2,000,000 Gaston County, NC Industrial Facilities and PCFA, Exempt Facilities Revenue Bonds, 5.75% 2,080,560 (National Gypsum Co.), 8/1/2035 3,000,000 North Carolina Eastern Municipal Power Agency, Power Supply System Revenue Refunding Bonds 3,052,230 (Series D), 5.125% (Original Issue Yield: 5.25%), 1/1/2023 1,725,000 North Carolina HFA, Home Ownership Revenue Bonds (Series 13-A), 5.25%, 1/1/2022 1,752,255 1,600,000 North Carolina Medical Care Commission, Health Care Housing Revenue Bonds (Series 2004A), 5.80% 1,672,048 (Arc of North Carolina Projects), 10/1/2034 TOTAL 8,557,093 OHIO--4.5% 1,700,000 Cleveland, OH Municipal School District, UT GO Bonds, 5.25% (FSA INS), 12/1/2024 1,782,926 400,000 Franklin County, OH Health Care Facilities, Improvement Revenue Bonds (Series 2005A), 5.125% 395,236 (Ohio Presbyterian Retirement Services)/(Original Issue Yield: 5.25%), 7/1/2035 3,000,000 Franklin County, OH Health Care Facilities, Revenue Refunding Bonds, 5.50% (Ohio Presbyterian 3,047,820 Retirement Services)/(Original Issue Yield: 5.64%), 7/1/2017 585,000 Ohio HFA, Residential Mortgage Revenue Bonds (Series 2002A-2), 5.50% (GNMA COL Home Mortgage 602,731 Program LOC), 9/1/2022 4,000,000 Ohio State Air Quality Development Authority, PCR Refunding Bonds (Series 2002A), 6.00% 4,123,680 (Cleveland Electric Illuminating Co.), 12/1/2013 4,135,000 Ohio State, Infrastructure Improvement UT GO Bonds (Series 1999A), 5.75% (United States Treasury 4,422,672 PRF 2/1/2010@101), 2/1/2017 5,500,000 Ohio State, Infrastructure Improvement UT GO Bonds (Series A), 5.50% (United States Treasury PRF 5,837,095 2/1/2010@101)/(Original Issue Yield: 5.65%), 2/1/2019 775,000 Toledo-Lucas County, OH Port Authority, Revenue Bonds (Series 2004C), 6.375% (Northwest Ohio 830,521 Bond Fund), 11/15/2032 TOTAL 21,042,681 OKLAHOMA--0.2% 1,000,000 Tulsa, OK Industrial Authority, Revenue Bonds, (Series A), 6.00% (University of Tulsa)/(MBIA 1,107,360 Insurance Corp. INS), 10/1/2016 OREGON--0.3% 1,500,000 Clackamas County, OR Hospital Facilities Authority, Revenue Refunding Bonds (Series 2001), 5.25% 1,546,215 (Legacy Health System)/(Original Issue Yield: 5.50%), 5/1/2021 OTHER--0.3% 1,500,000 1,2 GMAC Municipal Mortgage Trust, Pfd., (Series B-2), 5.50%, 10/31/2040 1,498,215 PENNSYLVANIA--5.0% 3,000,000 Allegheny County, PA HDA, Health System Revenue Bonds (Series 2000B), 9.25% (West Penn Allegheny 3,544,830 Health System)/(Original Issue Yield: 9.70%), 11/15/2030 1,280,000 Allegheny County, PA HDA, Refunding Revenue Bonds (Series 1998A), 5.125% (South Hills Health 1,222,707 System)/(Original Issue Yield: 5.40%), 5/1/2029 1,085,000 Allegheny County, PA IDA, Environmental Improvement Refunding Revenue Bonds (Series 2005) , 1,120,241 5.50% (United States Steel Corp.), 11/1/2016 4,000,000 1,2 Delaware Valley, PA Regional Finance Authority, RITES (PA-1029), 7.30822%, 7/1/2017 4,776,560 2,000,000 Pennsylvania HFA, SFM Revenue Bonds (Series 2002-73A), 5.45%, 10/1/2032 2,034,860 1,000,000 Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 2001A), 6.00% 1,076,820 (UPMC Health System)/(Original Issue Yield: 6.10%), 1/15/2022 5,000,000 Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 2001A), 6.25% 5,450,300 (UPMC Health System), 1/15/2016 1,000,000 Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 2004A), 5.25% 1,005,750 (Philadelphia University)/(Original Issue Yield: 5.32%), 6/1/2032 2,000,000 Pennsylvania State Higher Education Facilities Authority, Student Housing Revenue Bonds, 5.00% 2,054,840 (Indiana University of PA)/(XL Capital Assurance Inc. INS), 7/1/2039 1,000,000 Pittsburgh & Allegheny County PA Public Auditorium Hotel Room Authority, Public Auditorium Hotel 1,030,400 Room Revenue Bonds, 5.00% (AMBAC INS)/(Original Issue Yield: 5.15%), 2/1/2017 TOTAL 23,317,308 PUERTO RICO--1.0% 4,500,000 Puerto Rico Electric Power Authority, Revenue Bonds (Series II), 5.25% (XL Capital Assurance 4,758,930 Inc. INS)/(Original Issue Yield: 5.27%), 7/1/2022 RHODE ISLAND--0.6% 340,000 Rhode Island State Health and Educational Building Corp., Hospital Financing Revenue Bonds, 366,945 6.375% (Lifespan Obligated Group)/(Original Issue Yield: 6.58%), 8/15/2021 2,160,000 Rhode Island State Health and Educational Building Corp., Hospital Financing Revenue Bonds, 2,426,782 6.375% (Lifespan Obligated Group)/(United States Treasury PRF 8/15/2012@100)/(Original Issue Yield: 6.58%), 8/15/2021 TOTAL 2,793,727 SOUTH CAROLINA--2.2% 3,000,000 Kershaw County. SC Public Schools Foundation, Installment Purchase Revenue Bonds (Series 2006), 3,036,360 5.00% (Kershaw County, SC School District)/(CDC IXIS Financial Guaranty N.A. INS), 12/1/2030 1,395,000 Lexington County, SC Health Services District, Inc., Hospital Revenue Bonds (Series 2004), 6.00% 1,508,162 (Lexington Medical Center), 5/1/2019 2,850,000 South Carolina Jobs-EDA, EDRBs, (Series 2002A), 5.50% (Bon Secours Health System)/(Original 2,956,847 Issue Yield: 5.75%), 11/15/2023 2,795,000 South Carolina Jobs-EDA, Health System Revenue Bonds (Series A), 5.625% (Bon Secours Health 2,903,083 System)/(Original Issue Yield: 5.84%), 11/15/2030 TOTAL 10,404,452 SOUTH DAKOTA--1.0% 2,225,000 South Dakota Housing Development Authority, Home Ownership Mortgage Revenue Bonds (Series 2,319,585 2002C), 5.35%, 5/1/2022 2,420,000 South Dakota Housing Development Authority, Multiple Purpose Revenue Bonds (Series 2002A), 5.15% 2,492,552 (FSA INS), 11/1/2020 TOTAL 4,812,137 TENNESSEE--1.5% 1,000,000 Harpeth Valley Utilities District, TN, Revenue Bonds, 5.05% (MBIA Insurance Corp. INS)/(Original 1,024,760 Issue Yield: 5.08%), 9/1/2020 1,120,000 Shelby County, TN Health Education & Housing Facilities Board, Hospital Revenue Bonds, 6.50% 1,270,550 (Methodist Healthcare)/(United States Treasury PRF 9/1/2012@100)/(Original Issue Yield: 6.57%), 9/1/2021 1,880,000 Shelby County, TN Health Education & Housing Facilities Board, Hospital Revenue Bonds, 6.50% 2,132,710 (Methodist Healthcare)/(United States Treasury PRF 9/1/2012@100)/(Original Issue Yield: 6.57%), 9/1/2021 1,565,000 Sullivan County, TN Health Educational & Housing Facilities Board, Revenue Bonds, 6.25% 1,743,723 (Wellmont Health System)/(United States Treasury PRF 9/1/2012@101)/(Original Issue Yield: 6.45%), 9/1/2022 935,000 Sullivan County, TN Health Educational & Housing Facilities Board, Revenue Bonds, 6.25% 1,041,777 (Wellmont Health System)/(United States Treasury PRF 9/1/2012@101)/(Original Issue Yield: 6.45%), 9/1/2022 TOTAL 7,213,520 TEXAS--7.1% 3,000,000 Alliance Airport Authority Inc., TX, Special Facilities Refunding Revenue Bonds, 4.85% (FedEx 2,928,150 Corp.), 4/1/2021 4,600,000 Austin, TX Electric Utility System, Refunding Revenue Bonds, 5.25% (MBIA Insurance Corp. INS), 4,811,324 11/15/2022 3,965,000 Brazos River Authority, TX, Refunding PCRBs (Series 2001C), 5.75% TOBs (TXU Energy Co. LLC), 4,163,567 Mandatory Tender 11/1/2011 2,000,000 Comal County, TX HFDC, Revenue Bonds (Series 2002A), 6.125% (McKenna Memorial 2,105,140 Hospital)/(Original Issue Yield: 6.28%), 2/1/2022 3,000,000 Decatur, TX Hospital Authority, Hospital Revenue Bonds (Series 2004A), 7.00% (Wise Regional 3,227,250 Health System)/(Original Issue Yield: 7.125%), 9/1/2025 1,000,000 Gulf Coast, TX Waste Disposal Authority, Solid Waste Disposal Revenue Bonds (Series 2003A), 988,740 5.20% (Waste Management, Inc.), 5/1/2028 2,200,000 Harris County, TX HFDC, Hospital Revenue Bonds, (Series 1997A), 6.00% (Memorial Hospital 2,390,850 System)/(MBIA Insurance Corp. INS), 6/1/2011 4,000,000 Harris County, TX HFDC, Hospital Revenue Bonds, (Series 1997A), 6.00% (Memorial Hospital 4,392,400 System)/(MBIA Insurance Corp. LOC), 6/1/2012 600,000 Matagorda County, TX Navigation District No. 1, COL Refunding Revenue Bonds, 5.60% (Centerpoint 622,764 Energy Houston Electric), 3/1/2027 2,300,000 Port of Corpus Christi, TX IDC, Revenue Refunding Bonds (Series C), 5.40% (Valero Energy Corp.), 2,366,102 4/1/2018 2,165,000 Richardson, TX Hospital Authority, Refunding & Improvement Hospital Revenue Bonds, 5.875% 2,277,299 (Richardson Regional Medical Center)/(Original Issue Yield: 6.05%), 12/1/2024 1,000,000 Sabine River Authority, TX, PCR Refunding Bonds (Series 2001C), 5.20% (TXU Energy Co. LLC), 1,012,470 5/1/2028 1,000,000 Sam Rayburn, TX Municipal Power Agency, Refunding Revenue Bonds (Series 2002A), 6.00%, 10/1/2021 1,043,770 1,000,000 Texas Water Development Board, State Revolving Funds Revenue Bonds, (Series B), 5.00% (Original 1,014,580 Issue Yield: 5.28%), 7/15/2019 TOTAL 33,344,406 UTAH--3.8% 13,500,000 Salt Lake City, UT Hospital Authority, Hospital Revenue Refunding Bonds (Series A), 8.125% (IHC 15,891,660 Hospitals Inc., UT)/(Escrowed In Treasuries COL)/(Original Issue Yield: 8.17%), 5/15/2015 2,000,000 Utah County, UT IDA, Environmental Improvement Revenue Bonds, 5.05% TOBs (Marathon Oil Corp.), 2,088,780 Mandatory Tender 11/1/2011 TOTAL 17,980,440 VIRGINIA--3.3% 3,000,000 Chesapeake, VA IDA, PCRBs, 5.25% (Virginia Electric & Power Co.), 2/1/2008 3,009,480 5,000,000 Richmond, VA, UT GO Bonds, 5.50% (FSA INS)/(Original Issue Yield: 5.58%), 1/15/2018 5,323,400 3,000,000 Tobacco Settlement Financing Corp., VA, Revenue Bonds, 5.625% (Original Issue Yield: 5.78%), 3,087,780 6/1/2037 3,900,000 Virginia Peninsula Port Authority, Coal Terminal Revenue Refunding Bonds (Series 2003), 6.00% 4,127,721 (Brinks Co.), 4/1/2033 TOTAL 15,548,381 WASHINGTON--4.2% 4,500,000 Port of Seattle, WA, Subordinate Lien Revenue Bonds (Series 1999A), 5.25% (FGIC INS), 9/1/2021 4,681,575 1,000,000 Seattle, WA Water System, Revenue Bonds, 5.25%, 3/1/2013 1,026,700 1,235,000 Skagit County, WA Public Hospital District No. 1, Revenue Bonds (Series 2005), 5.50% (Skagit 1,246,683 Valley Hospital), 12/1/2030 5,595,000 Washington State Convention & Trade Center, Lease Revenue COP, 5.125% (MBIA Insurance Corp. 5,757,087 INS)/(Original Issue Yield: 5.30%), 7/1/2013 6,675,000 Washington State, UT GO Bonds, (Series A), 5.625% (Original Issue Yield: 5.66%), 7/1/2022 7,044,728 TOTAL 19,756,773 WISCONSIN--4.5% 1,000,000 Marinette County, WI, UT GO Refunding Bonds, 6.50% (FGIC INS), 9/1/2018 1,096,960 1,780,000 Wisconsin Housing & EDA, Housing Revenue Bonds (Series 2002C), 5.35% (MBIA Insurance Corp. INS), 1,833,133 11/1/2022 5,500,000 Wisconsin State HEFA, Refunding Revenue Bonds, 5.75% (Wheaton Franciscan HealthCare)/(Original 5,797,660 Issue Yield: 5.96%), 8/15/2025 300,000 Wisconsin State HEFA, Revenue Bonds (Series 2004), 5.50% (Blood Center of Wisconsin, 309,936 Inc.)/(Original Issue Yield: 5.583%), 6/1/2024 430,000 Wisconsin State HEFA, Revenue Bonds (Series 2004), 5.75% (Blood Center of Wisconsin, 452,179 Inc.)/(Original Issue Yield: 5.82%), 6/1/2034 2,000,000 Wisconsin State HEFA, Revenue Bonds (Series 2004), 5.75% (Fort Healthcare, Inc.)/(Original Issue 2,104,060 Yield: 5.84%), 5/1/2029 1,340,000 Wisconsin State HEFA, Revenue Bonds (Series 2004A), 6.75% (Beaver Dam Community Hospitals, 1,436,761 Inc.)/(Original Issue Yield: 6.95%), 8/15/2034 2,650,000 Wisconsin State HEFA, Revenue Bonds (Series 2005), 5.25% (Vernon Memorial Healthcare, 2,591,409 Inc.)/(Original Issue Yield: 5.28%), 3/1/2035 2,000,000 Wisconsin State HEFA, Revenue Bonds, 6.00% (SynergyHealth, Inc.)/(Original Issue Yield: 6.10%), 2,129,160 11/15/2023 1,630,000 Wisconsin State HEFA, Revenue Bonds, 6.00% (Agnesian Healthcare, Inc.)/(Original Issue Yield: 1,693,326 6.15%), 7/1/2030 1,250,000 Wisconsin State HEFA, Revenue Bonds, (Series 2006A), 5.125% (Marshfield Clinic, WI), 2/15/2026 1,255,113 500,000 Wisconsin State HEFA, Revenue Bonds, (Series 2006A), 5.375% (Marshfield Clinic, WI), 2/15/2034 511,625 TOTAL 21,211,322 WYOMING--0.7% 2,000,000 Sweetwater County, WY, Solid Waste Disposal Refunding Revenue Bonds (Series 2005), 5.60% (FMC 2,074,420 Corp.), 12/1/2035 1,000,000 University of Wyoming, University Facilities Improvement Revenue Bonds, 5.50% (MBIA Insurance 1,040,410 Corp. INS)/(Original Issue Yield: 5.70%), 6/1/2019 TOTAL 3,114,830 TOTAL MUNICIPAL BONDS (IDENTIFIED COST $445,865,059) 463,976,681 SHORT-TERM MUNICIPALS--0.3%4 GEORGIA--0.3% 1,300,000 Monroe County, GA Development Authority, (Series 1999B) Daily VRDNs (Oglethorpe Power Corp. 1,300,000 Scherer Project)/(AMBAC INS)/(J.P. Morgan Chase Bank, N.A. LIQ), 4.020%, 7/3/2006 (AT COST) TOTAL MUNICIPAL INVESTMENTS-98.7% 465,276,681 (IDENTIFIED COST $447,165,059)5 OTHER ASSETS AND LIABILITIES - NET -1.3% 5,929,475 TOTAL NET ASSETS -100% $ 471,206,156
Securities that are subject to the federal alternative minimum tax (AMT) represent 10.9% of the portfolio as calculated based upon total market value. 1 Denotes a restricted security that either (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933, or (b) is subject to a contractual restriction on public sales. At June 30, 2006, these restricted securities amounted to $38,373,696 which represented 8.1% of total net assets. 2 Denotes a restricted security that may be resold without restriction to "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933 and that the Fund has determined to be liquid under criteria established by the Fund's Board of Trustees. At June 30, 2006, these liquid restricted securities amounted to $30,488,880, which represented 6.5% of total net assets. 3 Pledged as collateral to ensure the Fund is able to satisfy the obligations of its outstanding short futures contracts. 4 Current rate and next reset date shown for Variable Rate Demand Notes. 5 At June 30, 2006, the cost of investments for federal tax purposes was $447,181,304. The net unrealized appreciation of investments for federal tax purposes excluding any unrealized appreciation/depreciation from futures contracts was $18,095,377. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $19,987,719 and net unrealized depreciation from investments for those securities having an excess of cost over value of $1,892,342. At June 30, 2006, the Fund had the following open futures contracts:
CONTRACTS NUMBER OF NOTIONAL VALUE EXPIRATION UNREALIZED APPRECIATION CONTRACTS DATE 6U.S. Treasury Note 10-Year Futures (150) $(15,728,906) September 2006 $39,221 6 Non-income producing.
Note: The categories of investments are shown as a percentage of total net assets at June 30, 2006. INVESTMENT VALUATION Municipal bonds are valued by an independent pricing service, taking into consideration yield, liquidity, risk, credit quality, coupon, maturity, type of issue, and any other factors or market data the pricing service deems relevant. The Fund generally values fixed income and short-term securities according to prices furnished by an independent pricing service, except that securities with remaining maturities of less than 60 days at the time of purchase may be valued at amortized cost, which approximates fair market value. Prices furnished by an independent pricing service for municipal bonds are intended to be indicative of the bid prices currently offered to institutional investors for the securities. Securities for which no quotations are readily available are valued at fair value as determined in accordance with procedures established by and under general supervision of the Board of Directors. RESTRICTED SECURITIES
Additional information on restricted securities, excluding securities purchased under Rule 144A that have been deemed liquid by the Directors, held at June 30, 2006 is as follows: SECURITY ACQUISITION ACQUISITION DATE COST California PCFA, Solid Waste Disposal Revenue Bonds (Series 2005A-2), 5.40% (Waste Management, Inc.), 3/30/2005 $1,000,000 4/1/2025 California PCFA, Solid Waste Disposal Revenue Bonds (Series 2005C), 5.125% (Waste Management, Inc.), 10/28/2005 $3,000,000 11/1/2023 Kansas City, MO IDA, MFH Revenue Bonds, 6.70% (Woodbridge Apartments Project), 8/1/2015 7/27/1999 $655,000 New York City, NY IDA, Liberty Revenue Bonds (Series A), 6.25% (7 World Trade Center LLC), 3/1/2015 3/15/05 $3,000,000
The following acronyms are used throughout this portfolio: AMBAC --American Municipal Bond Assurance Corporation COL --Collateralized COP --Certificate of Participation EDA --Economic Development Authority EDRBs --Economic Development Revenue Bonds FGIC --Financial Guaranty Insurance Company FSA --Financial Security Assurance GNMA --Government National Mortgage Association GO --General Obligation GTD --Guaranteed HDA --Hospital Development Authority HEFA --Health and Education Facilities Authority HFA --Housing Finance Authority HFDC --Health Facility Development Corporation IDA --Industrial Development Authority IDB --Industrial Development Bond IDC --Industrial Development Corporation IDRBs --Industrial Development Revenue Bonds INS --Insured LIQ --Liquidity Agreement LOC --Letter of Credit LT --Limited Tax MFH --Multifamily Housing PCFA --Pollution Control Finance Authority PCR --Pollution Control Revenue PCRBs --Pollution Control Revenue Bonds PRF --Prerefunded RITES --Residual Interest Tax-Exempt Securities SFM --Single Family Mortgage TOBs --Tender Option Bonds UT --Unlimited Tax VRDNs --Variable Rate Demand Notes Item 2. Controls and Procedures (a) The registrant's Principal Executive Officer and Principal Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-Q. (b) There were no changes in the registrant's internal control over financial reporting (as defined in rule 30a-3(d) under the Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 3. Exhibits 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 Federated Municipal Securities Fund, Inc. By /S/ Richard A. Novak Richard A. Novak, Principal Financial Officer (insert name and title) Date August 21, 2006 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /S/ J. Christopher Donahue J. Christopher Donahue, Principal Executive Officer Date August 21, 2006 By /S/ Richard A. Novak Richard A. Novak, Principal Financial Officer Date August 21, 2006