N-Q 1 form.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.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 (Address of Principal Executive Offices) (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: 3/31/08 Date of Reporting Period: Quarter ended 6/30/07 ITEM 1. SCHEDULE OF INVESTMENTS FEDERATED MUNICIPAL SECURITIES FUND, INC. PORTFOLIO OF INVESTMENTS June 30, 2007 (unaudited) PRINCIPAL VALUE AMOUNT
MUNICIPAL BONDS--99.1% ALABAMA--1.0% $ 1,000,000 Alabama Agricultural & Mechanical University, Revenue Bonds (Series 1998), 5.00% (MBIA $ 1,029,650 Insurance 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 1,516,844 Co.), 12/1/2024 1,190,000 1,2 Huntsville, AL Health Care Authority, Residual Interest Tax-Exempt Securities (PA-1466), 5.75% 1,118,600 (Huntsville Hospital ), 6/1/2032 1,000,000 Tuscaloosa, AL, UT GO Warrants (Series 2000), 5.75% (Original Issue Yield: 5.90%), 1/1/2020 1,052,340 TOTAL 4,717,434 ARIZONA--0.8% 1,810,000 Show Low, AZ IDA, Hospital Revenue Bonds , 5.00% (Navapache Regional Medical Center)/(Radian 1,846,073 Asset Assurance INS), 12/1/2030 2,000,000 Show Low, AZ IDA, Hospital Revenue Bonds , 5.00% (Navapache Regional Medical Center)/(Radian 2,035,680 Asset Assurance INS), 12/1/2035 TOTAL 3,881,753 ARKANSAS--0.2% 1,000,000 Jefferson County, AR, Hospital Revenue Improvement and Refunding Bonds (Series 2001), 5.80% 1,043,740 (Jefferson Regional Medical Center, AR)/(Original Issue Yield: 5.90%), 6/1/2021 CALIFORNIA--8.2% 1,825,000 California Educational Facilities Authority, Revenue Bonds (Series 2005), 5.00% (California 1,832,026 College of the Arts), 6/1/2030 3,000,000 1,2 California State, Residual Interest Tax-Exempt Securities (PA-1475), 5.01063% (Original Issue 2,688,420 Yield: 6.50%), 8/1/2030 3,000,000 1,2 California State, Residual Interest Trust Receipts (Series 2007-FC6), 7.507%, 8/1/2025 3,311,640 1,000,000 California State, UT GO Bonds, 5.00%, 2/1/2023 1,032,240 65,000 California State, UT GO Bonds, 5.75% (United States Treasury PRF 5/1/2010@101), 5/1/2030 68,925 515,000 California State, UT GO Bonds, 5.75% (United States Treasury PRF 5/1/2010@101), 5/1/2030 545,524 170,000 California State, UT GO Bonds, 5.75%, 5/1/2030 179,887 3,000,000 California State, Various Purpose UT GO Bonds, 5.125% (Original Issue Yield: 5.16%), 4/1/2023 3,131,070 2,000,000 California State, Various Purpose UT GO Bonds, 5.25% (Original Issue Yield: 5.32%), 11/1/2025 2,096,400 1,495,000 California Statewide Communities Development Authority, COP, 6.00% (Sutter Health)/(FSA INS), 1,570,004 8/15/2013 1,930,000 California Statewide Communities Development Authority, COP, 6.00% (Sutter Health)/(FSA INS), 2,035,745 8/15/2015 1,500,000 California Statewide Communities Development Authority, Revenue Bonds (Series 2007A), 5.00% 1,516,050 (Kaiser Permanente), 4/1/2031 1,000,000 Golden State Tobacco Securitization Corp., CA, (Series A-4), 7.80% (United States Treasury PRF 1,194,850 6/1/2013@100), 6/1/2042 3,000,000 Golden State Tobacco Securitization Corp., CA, Tobacco Settlement Asset-Backed Revenue Bonds 3,434,490 (Series 2003A-1), 6.75% (United States Treasury PRF 6/1/2013@100)/(Original Issue Yield: 7.00%), 6/1/2039 1,500,000 Manhattan Beach, CA, COP (Series 2004), 5.00% (AMBAC INS), 1/1/2036 1,528,335 1,350,000 Poway, CA Unified School District, Special Tax Bonds (Series 2005), 5.125% (Community Facilities 1,348,906 District No. 6 (4S Ranch))/(Original Issue Yield: 5.21%), 9/1/2035 1,000,000 Riverside, CA, 2003 COP (Riverside Public Financing Authority), 5.00% (AMBAC INS), 9/1/2028 1,022,840 2,400,000 Roseville, CA Natural Gas Financing Authority, Gas Revenue Bonds (Series 2007), 5.00%, 2/15/2028 2,513,784 3,000,000 Roseville, CA Natural Gas Financing Authority, Gas Revenue Bonds, 5.00%, 2/15/2025 3,125,220 1,000,000 Tustin, CA Unified School District, Community Facilities District #97-1, Sr. Lien Special Tax 1,018,160 Bonds (Series 2002 A), 5.00% (FSA INS)/(Original Issue Yield: 5.06%), 9/1/2038 1,500,000 University of California, General Revenue Bonds, Series A, 5.125% (AMBAC INS), 5/15/2020 1,572,330 2,500,000 University of California, Hospital Revenue Bonds (Series 2004A), 5.25% (UCLA Medical 2,602,300 Center)/(AMBAC INS), 5/15/2030 TOTAL 39,369,146 COLORADO--3.5% 5,000,000 Arkansas River Power Authority, CO, 5.25% (XL Capital Assurance Inc. INS), 10/1/2032 5,273,200 760,000 Colorado Health Facilities Authority, Health Facilities Revenue Bonds (Series 2004A), 5.25% 773,194 (Evangelical Lutheran Good Samaritan Society)/(Original Issue Yield: 5.48%), 6/1/2034 710,000 Colorado Health Facilities Authority, Health Facilities Revenue Bonds (Series 2005), 5.25% 729,305 (Evangelical Lutheran Good Samaritan Society), 6/1/2023 5,000,000 Colorado Health Facilities Authority, Revenue Bonds (Series 2005), 5.25% (Covenant Retirement 5,098,650 Communities, Inc.), 12/1/2025 500,000 Douglas County, CO School District, Improvement UT GO Bonds (Series 2005B), 5.00% (FSA INS), 516,005 12/15/2030 4,000,000 Fort Collins, CO, PCR Refunding Bonds (Series 2007), 4.70% (Anheuser-Busch Cos., Inc.), 9/1/2040 3,801,400 505,000 Westminster, CO, Sales & Use Tax Revenue Refunding Bonds, (Series A), 5.60%, 12/1/2016 518,595 TOTAL 16,710,349 CONNECTICUT--0.3% 600,000 Connecticut State HEFA, Revenue Bonds (Series 2005C), 5.125% (Eastern Connecticut Health 618,462 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 1,051,660 11/1/2009@101)/(Original Issue Yield: 5.83%), 11/1/2018 TOTAL 1,670,122 DISTRICT OF COLUMBIA--1.4% 5,000,000 District of Columbia, Ballpark Revenue Bonds (Series 2006B-1), 5.00% (FGIC INS), 2/1/2035 5,136,800 1,310,000 District of Columbia, Revenue Bonds (Series 2000A), 6.00% (World Wildlife Fund, Inc.)/ 1,396,473 (AMBAC INS), 7/1/2016 TOTAL 6,533,273 FLORIDA--5.0% 1,750,000 1,2 Alachua County, FL Health Facilities Authority, Residual Interest Tax-Exempt Securities (PA- 1,697,500 1472), 5.30% (Shands Teaching Hospital and Clinics, Inc.), 12/1/2037 1,000,000 Broward County, FL Educational Facilities Authority, Educational Facilities Revenue Bonds 1,038,150 (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 858,675 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 5,096,226 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 3,773,550 COL)/(Original Issue Yield: 10.105%), 7/1/2014 500,000 Jupiter, FL, UT GO Bonds, 5.50%, 7/1/2021 557,605 1,015,000 Leon County, FL, COP, 5.00% (AMBAC INS), 7/1/2019 1,059,498 1,000,000 Miami-Dade County, FL Expressway Authority, Toll System Revenue Bonds, 6.00% (FGIC INS), 1,065,720 7/1/2013 1,060,000 Orange County, FL, Health Facilities Authority, Revenue Bonds (Series 1996A), 6.25% (Orlando 1,189,521 Regional Healthcare System)/(United States Treasury COL), 10/1/2013 3,500,000 1,2 South Broward Hospital District, FL, UBS Custodial Residual & Variable Securities (Series 07- 3,259,760 1003), 6.264%, 11/1/2014 500,000 South Miami, FL Health Facilities Authority, Revenue Bonds, 5.25% (Baptist Health System of 529,720 South Florida)/(United States Treasury PRF 2/1/2013@100)/(Original Issue Yield: 5.52%), 11/15/2033 2,255,000 St. Johns County, FL IDA, First Mortgage Revenue Bonds (Series 2004A), 5.85% (Presbyterian 2,395,915 Retirement Communities ), 8/1/2024 1,765,000 St. Johns County, FL IDA, Health Care Revenue Refunding Bonds (Series 2007), 5.00% (Vicar's 1,758,346 Landing), 2/15/2027 TOTAL 24,280,186 GEORGIA--1.1% 1,850,000 Bibb County, GA Development Authority, Revenue Bonds, (Series 1991 IR-1), 4.85% (Temple-Inland, 1,855,402 Inc.), 12/1/2009 1,000,000 Chatham County, GA Hospital Authority, Hospital Improvement Revenue Bonds (Series 2004A), 5.75% 1,053,690 (Memorial Health University Medical Center), 1/1/2029 2,000,000 Savannah, GA EDA, Revenue Bonds, 6.80% (Savannah College of Art and Design, Inc.)/ 2,155,960 (United States Treasury PRF 10/1/2009@102), 10/1/2019 TOTAL 5,065,052 ILLINOIS--3.9% 1,000,000 Chicago, IL Public Building Commission, Revenue Bonds, (Series A), 7.00% (Escrowed In Treasuries 1,237,540 COL)/(Original Issue Yield: 7.125%), 1/1/2020 1,500,000 Illinois Finance Authority, Refunding Revenue Bonds, 5.25% (OSF Health Care Systems)/ 1,534,650 (Original Issue Yield: 5.30%), 11/15/2023 3,750,000 Illinois Finance Authority, Revenue Bonds (Series 2006A), 5.00% (Illinois Institute of 3,760,275 Technology), 4/1/2031 1,000,000 Illinois Finance Authority, Revenue Bonds (Series 2006A), 5.00% (Illinois Institute of 993,880 Technology), 4/1/2036 1,660,000 Illinois Finance Authority, Revenue Bonds (Series 2007), 5.00% (Newman Foundation at the 1,681,381 University of Illinois)/(Radian Asset Assurance INS), 2/1/2032 2,750,000 Illinois Finance Authority, Revenue Bonds (Series 2007A), 5.00% (Bradley University)/(XL Capital 2,813,333 Assurance Inc. INS), 8/1/2034 2,145,000 Illinois Finance Authority, Revenue Refunding Bonds (Series 2007), 5.00% (Loyola University), 2,220,139 7/1/2022 2,300,000 Illinois Health Facilities Authority, Revenue Bonds (Series 2006), 5.25% (Tabor Hills Supportive 2,308,303 Living LLC), 11/15/2026 1,000,000 Illinois Health Facilities Authority, Revenue Bonds (Series 2006), 5.25% (Tabor Hills Supportive 998,450 Living LLC), 11/15/2036 1,000,000 Illinois Sports Facility Authority, State Tax Supported Revenue Bonds, 5.00% (AMBAC INS)/ 1,021,150 (Original Issue Yield: 5.18%), 6/15/2032 TOTAL 18,569,101 INDIANA--2.8% 1,000,000 Indiana Development Finance Authority, Environmental Improvement Revenue Bonds, 5.25% TOBs 1,044,530 (Marathon Oil Corp.) 12/2/2011 3,000,000 Indiana Health & Educational Facility Financing Authority, Revenue Bonds (Series 2005), 5.25% 3,058,860 (Baptist Homes of Indiana), 11/15/2035 2,000,000 Indiana Health Facility Financing Authority, Hospital Revenue Bonds (Series 2004A), 6.25% 2,132,300 (Community Foundation of Northwest Indiana), 3/1/2025 1,000,000 Indiana Health Facility Financing Authority, Hospital Revenue Refunding Bonds, 5.25% (Floyd 1,009,450 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 2,321,418 Hospital)/(AMBAC INS), 3/1/2029 1,500,000 Indiana State Office Building Commission Capitol Complex, Revenue Bonds (Series 1990A: Senate 1,790,340 Avenue Parking Facility), 7.40% (MBIA Insurance Corp. INS)/(Original Issue Yield: 7.488%), 7/1/2015 2,000,000 St. Joseph County, IN Hospital Authority, Health Facilities Revenue Bonds (Series 2005), 5.375% 2,029,860 (Madison Center Obligated Group), 2/15/2034 TOTAL 13,386,758 IOWA--0.4% 1,000,000 Iowa Finance Authority, Health Facilities Development Revenue Refunding Bonds (Series 2006A), 1,026,410 5.50% (Care Initiatives), 7/1/2025 1,000,000 Scott County, IA, Revenue Refunding Bonds (Series 2004), 5.625% (Ridgecrest Village), 11/15/2018 1,017,120 TOTAL 2,043,530 KANSAS--0.5% 1,315,000 Butler County, KS Union School District No. 490, Improvement UT GO Bonds (Series 2005B), 5.00% 1,360,367 (FSA INS), 9/1/2029 1,150,000 University of Kansas Hospital Authority, Health Facilities Revenue Bonds, 5.50% (KU Health 1,229,810 System)/(United States Treasury PRF 9/1/2012@100)/(Original Issue Yield: 5.62%), 9/1/2022 TOTAL 2,590,177 KENTUCKY--0.2% 1,000,000 Murray, KY, Hospital Facilities Refunding Revenue Bonds (Series 2007), 5.125% (Murray-Calloway 1,005,830 County Public Hospital Corp.)/(Original Issue Yield: 4.65%), 8/1/2037 LOUISIANA--0.4% 505,000 Louisiana Public Facilities Authority, FHA Insured Mortgage Revenue Bonds, 5.25% (Baton Rouge 525,695 General Medical Center)/(MBIA Insurance Corp. INS), 7/1/2033 1,500,000 St. John the Baptist Parish, LA, Revenue Bonds (Series 2007A), 5.125% (Marathon Oil Corp.), 1,510,260 6/1/2037 TOTAL 2,035,955 MAINE--0.1% 645,000 Maine State Turnpike Authority, Revenue Bonds, 5.00% (FSA INS), 7/1/2027 665,756 MARYLAND--0.2% 250,000 Maryland State Health & Higher Educational Facilities Authority, Revenue Bonds (Series 2007A), 248,490 5.25% (King Farm Presbyterian Retirement Community), 1/1/2027 650,000 Maryland State Health & Higher Educational Facilities Authority, Revenue Bonds (Series 2007A), 640,458 5.30% (King Farm Presbyterian Retirement Community)/(Original Issue Yield: 5.35%), 1/1/2037 TOTAL 888,948 MASSACHUSETTS--5.5% 5,000,000 Commonwealth of Massachusetts, UT GO Bonds (Series 2000B), 6.00% (United States Treasury PRF 5,287,150 6/1/2010@100), 6/1/2016 170,000 Massachusetts Bay Transportation Authority General Transportation System, Special Assessment 178,223 Bonds, 5.75%, 7/1/2016 2,000,000 Massachusetts HEFA, Revenue Bonds (Series 2004A), 6.375% (Northern Berkshire Health System 2,109,160 )/(Original Issue Yield: 6.60%), 7/1/2034 790,000 Massachusetts HEFA, Revenue Bonds (Series 2002D), 6.35% (Milford Regional Medical 875,154 Center)/(United States Treasury PRF 7/15/2012@101)/(Original Issue Yield: 6.38%), 7/15/2032 1,000,000 Massachusetts HEFA, Revenue Bonds (Series 2002D), 6.50% (Milford Regional Medical 1,114,560 Center)/(United States Treasury PRF 7/15/2012@101), 7/15/2023 4,550,000 Massachusetts HEFA, Revenue Bonds (Series 2005E), 5.00% (Emerson Hospital)/(Radian Asset 4,641,091 Assurance INS), 8/15/2025 5,000,000 Massachusetts School Building Authority, Revenue Bonds (Series 2007A), 4.75% (AMBAC INS), 5,023,700 8/15/2032 2,000,000 Massachusetts State Development Finance Agency, Revenue Bonds, 5.00% (Seven Hills Foundation & 2,032,060 Affiliates)/(Radian Asset Assurance INS), 9/1/2035 40,000 Massachusetts Water Pollution Abatement Trust Pool, Program Bonds (Series 6) Revenue Bonds 41,592 Unrefunded, 5.25% (Original Issue Yield: 5.50%), 8/1/2019 430,000 Massachusetts Water Pollution Abatement Trust Pool, Program Revenue Bonds (Series 10), 5.00% 456,028 (United States Treasury PRF 8/1/2014@100), 8/1/2034 70,000 Massachusetts Water Pollution Abatement Trust Pool, Program Revenue Bonds (Series 10), 5.00%, 71,802 8/1/2034 2,460,000 Massachusetts Water Pollution Abatement Trust Pool, Program Series 6 Revenue Bonds Prerefunded, 2,577,514 5.25% (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%), 1,025,550 11/15/2018 1,000,000 Sterling, MA, UT GO Bonds, 6.00% (FGIC INS), 2/15/2020 1,061,210 TOTAL 26,494,794 MICHIGAN--3.1% 2,090,000 Cornell Township MI, Economic Development Corp., Refunding Revenue Bonds, 5.875% (MeadWestvaco 2,260,732 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 2,754,881 (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 1,070,460 2,000,000 Kent Hospital Finance Authority, MI, Revenue Bonds (Series 2005A), 6.00% (Metropolitan Hospital 2,160,040 ), 7/1/2035 1,500,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds (Series 2002A) , 6.00% 1,606,575 (Oakwood Obligated Group), 4/1/2022 1,000,000 Michigan State Hospital Finance Authority, Refunding Revenue Bonds (Series 2002A), 5.50% 1,048,480 (Crittenton Hospital, MI)/(Original Issue Yield: 5.67%), 3/1/2022 2,900,000 Michigan State Strategic Fund, Revenue Refunding PCR Bonds (Series C), 5.45% (Detroit Edison 2,984,216 Co.), 9/1/2029 280,000 Northern Michigan University, Revenue Bonds, 5.125% (MBIA Insurance Corp. INS)/(Original Issue 285,712 Yield: 5.35%), 12/1/2020 680,000 Otsego, MI Public School District, School Building & Site UT GO Bonds, 5.00% (United States 718,631 Treasury PRF 5/1/2014@100), 5/1/2034 TOTAL 14,889,727 MINNESOTA--0.2% 1,000,000 St. Paul, MN Housing & Redevelopment Authority, Revenue Bonds (Series 1997A), 5.70% (Health 1,021,170 East, Inc.)/(Original Issue Yield: 5.756%), 11/1/2015 MISSISSIPPI--1.4% 5,000,000 Mississippi Business Finance Corp., Gulf Opportunity Zone IDRBs (Series 2006), 4.55% (Northrop 4,765,450 Grumman Corp.), 12/1/2028 2,050,000 Mississippi Business Finance Corp., Refunding PCR Bonds, 5.90% (System Energy Resources, 2,069,721 Inc.)/(Original Issue Yield: 5.93%), 5/1/2022 TOTAL 6,835,171 MISSOURI--0.7% 2,000,000 Missouri Development Finance Board, Cultural Facilities Revenue Bonds (Series 2007B), 5.00% 2,069,540 (Kauffman Center for the Performing Arts), 6/1/2037 1,335,000 Missouri Development Finance Board, Infrastructure Facilities Revenue Bonds (Series 2005A), 1,347,122 5.00% (Branson, MO), 6/1/2035 TOTAL 3,416,662 MONTANA--0.8% 3,700,000 Montana Facility Finance Authority, Hospital Revenue Bonds (Series 2007), 5.00% (Benefits 3,761,605 Healthcare System)/(Assured Guaranty Corp. INS), 1/1/2037 NEBRASKA--1.0% 4,710,000 Omaha, NE Convention Hotel Corp., Convention Center Refunding Revenue Bonds, 5.00% (AMBAC INS), 4,891,571 2/1/2026 NEVADA--1.0% 3,000,000 Clark County, NV, Passenger Facility Charge Revenue Bonds (Series 2007A-2), 5.00% (Las Vegas- 3,109,980 McCarran International Airport)/(AMBAC INS), 7/1/2026 1,000,000 Henderson, NV, Health Facility Revenue Bonds (Series 2004A), 5.625% (Catholic Healthcare 1,047,380 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 251,520 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% 603,210 (Falls at Lake Las Vegas LID No. T-16)/(Original Issue Yield: 5.20%), 3/1/2025 TOTAL 5,012,090 NEW HAMPSHIRE--0.4% 1,685,000 New Hampshire Higher Educational & Health Facilities Authority, Healthcare System Revenue Bonds 1,737,521 (Series 2004), 5.375% (Covenant Health Systems)/(Original Issue Yield: 5.50%), 7/1/2024 NEW JERSEY--1.6% 1,100,000 New Jersey EDA, Revenue Refunding Bonds (Series A), 5.75% (Winchester Gardens at Ward 1,159,741 Homestead)/(Original Issue Yield: 5.75%), 11/1/2024 1,500,000 Newark, NJ Housing Authority, Revenue Bonds (Series 2004), 5.25% (Port Authority-Port Newark 1,603,815 Marine Terminal)/(United States Treasury PRF), 1/1/2022 5,000,000 Tobacco Settlement Financing Corp., NJ, Tobacco Settlement Asset-Backed Bonds (Series 2007-1), 4,825,500 5.00%, 6/1/2029 TOTAL 7,589,056 NEW YORK--8.4% 2,000,000 Hempstead (town), NY IDA, Civic Facility Revenue Bonds, 5.00% (Adelphi University), 10/1/2035 2,046,020 2,000,000 Hempstead (town), NY IDA, Civic Facility Revenue Bonds, 5.25% (Hofstra University), 7/1/2018 2,087,780 4,000,000 New York City, NY IDA, CPI PILOT Revenue Bonds (Series 2006), 3.394% (Yankee Stadium LLC)/(FGIC 3,931,080 INS), 3/1/2021 3,000,000 1 New York City, NY IDA, Liberty Revenue Bonds (Series A), 6.25% (7 World Trade Center LLC), 3,153,180 3/1/2015 3,000,000 New York City, NY Municipal Water Finance Authority, Water & Sewer System Revenue Bonds (Fiscal 3,093,300 2005 Series C), 5.00%, 6/15/2030 1,775,000 New York City, NY, UT GO Bonds (Fiscal 2003 Series J), 5.50% (United States Treasury PRF 1,918,952 6/1/2013@100), 6/1/2023 210,000 New York City, NY, UT GO Bonds (Fiscal 2003 Series J), 5.50%, 6/1/2023 223,045 3,000,000 1,2 New York State Dormitory Authority, Municipal Securities Trust Certificates (Series 7041), 2,970,270 6.426% (New York Hospital Medical Center of Queens)/(FHA INS), 8/15/2037 2,500,000 New York State Dormitory Authority, Revenue Bonds (Series A), 5.50% (University of Rochester, 2,604,000 NY)/(Original Issue Yield: 5.60%), 7/1/2016 5,000,000 New York State Dormitory Authority, Revenue Bonds , 6.00% (State University of New York)/(MBIA 5,333,350 Insurance Corp. INS), 5/15/2016 990,000 New York State Environmental Facilities Corp., Clean Water & Drinking Revenue Bonds, 5.25%, 1,013,047 6/15/2014 4,000,000 New York State Thruway Authority, Local Highway & Bridge Service Contract Revenue Bonds (Series 4,089,640 A-2), 5.375% (New York State)/(United States Treasury PRF 4/1/2008@101), 4/1/2016 2,500,000 New York State Thruway Authority, Second General Highway & Bridge Trust Fund Revenue Bonds 2,603,700 (Series 2007B), 5.00% (New York State Thruway Authority - Dedicated Highway & Bridge Trust Fund), 4/1/2027 1,015,000 Suffolk County, NY Water Authority, Water System Revenue Bonds (Series 1994), 6.00% (Escrowed In 1,125,330 Treasuries COL), 6/1/2014 1,985,000 Suffolk County, NY Water Authority, Water System Revenue Bonds (Series 1994), 6.00% (MBIA 2,193,504 Insurance Corp. INS), 6/1/2014 2,000,000 TSASC, Inc. NY, Tobacco Settlement Asset-Backed Bonds (Series 2006-1), 5.00% (Original Issue 2,017,980 Yield: 5.125%), 6/1/2026 TOTAL 40,404,178 NORTH CAROLINA--1.0% 3,000,000 North Carolina Eastern Municipal Power Agency, Power Supply System Revenue Refunding Bonds 3,077,310 (Series D), 5.125% (Original Issue Yield: 5.25%), 1/1/2023 1,600,000 North Carolina Medical Care Commission, Health Care Housing Revenue Bonds (Series 2004A), 5.80% 1,674,560 (Arc of North Carolina Projects), 10/1/2034 TOTAL 4,751,870 OHIO--3.1% 1,700,000 Cleveland, OH Municipal School District, UT GO Bonds, 5.25% (FSA INS), 12/1/2024 1,803,054 3,000,000 Franklin County, OH Health Care Facilities, Revenue Refunding Bonds, 5.50% (Ohio Presbyterian 3,044,550 Retirement Services)/(Original Issue Yield: 5.64%), 7/1/2017 4,000,000 Ohio State Air Quality Development Authority, PCR Refunding Bonds (Series 2002A), 6.00% 4,066,040 (Cleveland Electric Illuminating Co.), 12/1/2013 1,345,000 Ohio State Building Authority, Revenue Bonds (Series 2002A), 5.00% (Adult Correctional Building 1,385,014 Fund Projects), 4/1/2022 4,135,000 Ohio State, Infrastructure Improvement UT GO Bonds (Series 1999A), 5.75% (United States Treasury 4,358,166 PRF 2/1/2010@101), 2/1/2017 TOTAL 14,656,824 OKLAHOMA--0.2% 1,000,000 Tulsa, OK Industrial Authority, Revenue Bonds, (Series A), 6.00% (University of Tulsa)/(MBIA 1,103,580 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% 1,549,650 (Legacy Health System)/(Original Issue Yield: 5.50%), 5/1/2021 PENNSYLVANIA--6.8% 3,000,000 Allegheny County, PA HDA, Health System Revenue Bonds (Series 2000B), 9.25% (West Penn Allegheny 3,540,030 Health System)/(Original Issue Yield: 9.70%), 11/15/2030 1,280,000 Allegheny County, PA HDA, Refunding Revenue Bonds (Series 1998A), 5.125% (Jefferson Regional 1,260,890 Medical Center, PA)/(Original Issue Yield: 5.40%), 5/1/2029 1,085,000 Allegheny County, PA IDA, Environmental Improvement Refunding Revenue Bonds (Series 2005) , 1,142,299 5.50% (United States Steel Corp.), 11/1/2016 2,000,000 Allegheny County, PA, Refunding UT GO Notes (C-59B), 4.139% (FSA INS), 11/1/2026 2,000,000 3,500,000 Cumberland County, PA Municipal Authority, Revenue Bonds (Series 2007A), 5.00% (Diakon Lutheran 3,447,710 Social Ministries), 1/1/2036 2,000,000 1,2 Delaware Valley, PA Regional Finance Authority, Residual Tax-Exempt Securities (PA-1512), 4.70%, 2,000,000 6/1/2027 8,000,000 3 Delaware Valley, PA Regional Finance Authority, Revenue Bonds, 5.75%, 7/1/2017 8,876,800 1,000,000 Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 2001A), 6.00% 1,067,310 (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% 5,391,050 (UPMC Health System), 1/15/2016 1,000,000 Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 2004A), 5.25% 1,018,530 (Philadelphia University)/(Original Issue Yield: 5.32%), 6/1/2032 2,000,000 Pennsylvania State Higher Education Facilities Authority, Student Housing Revenue Bonds, 5.125% 2,080,300 (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 1,029,450 Room Revenue Bonds, 5.00% (AMBAC INS)/(Original Issue Yield: 5.15%), 2/1/2017 TOTAL 32,854,369 PUERTO RICO--1.0% 4,500,000 Puerto Rico Electric Power Authority, Revenue Bonds (Series II), 5.25% (XL Capital Assurance 4,806,675 Inc. INS)/(Original Issue Yield: 5.27%), 7/1/2022 RHODE ISLAND--1.1% 2,500,000 Rhode Island State Health and Educational Building Corp., Higher Education Facilities Revenue 2,590,650 Bonds (Series 2007), 5.00% (Brown University), 9/1/2037 340,000 Rhode Island State Health and Educational Building Corp., Hospital Financing Revenue Bonds, 367,751 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, 2,391,358 6.375% (Lifespan Obligated Group)/(United States Treasury PRF 8/15/2012@100)/ (Original Issue Yield: 6.58%), 8/15/2021 TOTAL 5,349,759 SOUTH CAROLINA--4.1% 3,000,000 Kershaw County, SC Public Schools Foundation, Installment Purchase Revenue Bonds (Series 2006), 3,079,260 5.00% (Kershaw County, SC School District)/(CDC IXIS Financial Guaranty NA INS), 12/1/2030 1,395,000 Lexington County, SC Health Services District, Inc., Hospital Revenue Bonds (Series 2004), 6.00% 1,513,491 (Lexington Medical Center), 5/1/2019 2,850,000 South Carolina Jobs-EDA, EDRBs, (Series 2002A), 5.50% (Bon Secours Health System)/ 2,936,611 (Original 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 2,898,974 System)/(Original Issue Yield: 5.84%), 11/15/2030 2,000,000 1,2 South Carolina Jobs-EDA, Residual Interest Tax-Exempt Securities (PA-1471), 6.08% (Palmetto 2,000,000 Health Alliance), 8/1/2039 1,890,000 South Carolina Jobs-EDA, Senior Lien Revenue Bonds (Series 2007A), 4.70% (Burroughs & Chapin 1,826,175 Multi-County Business Park)/(Radian Asset Assurance INS), 4/1/2035 5,470,000 South Carolina Jobs-EDA, Student Housing Refunding Revenue Bonds (Series 2005A), 5.00% (Coastal 5,589,519 Housing Foundation LLC)/(CDC IXIS Financial Guaranty NA INS), 4/1/2035 TOTAL 19,844,030 SOUTH DAKOTA--1.0% 2,225,000 South Dakota Housing Development Authority, Home Ownership Mortgage Revenue Bonds (Series 2,343,414 2002C), 5.35%, 5/1/2022 2,420,000 South Dakota Housing Development Authority, Multiple Purpose Revenue Bonds (Series 2002A), 5.15% 2,484,759 (FSA INS), 11/1/2020 TOTAL 4,828,173 TENNESSEE--1.5% 1,000,000 Harpeth Valley Utilities District, TN, Revenue Bonds, 5.05% (MBIA Insurance Corp. INS)/ 1,014,530 (Original Issue Yield: 5.08%), 9/1/2020 1,880,000 Shelby County, TN Health Education & Housing Facilities Board, Hospital Revenue Bonds, 6.50% 2,097,497 (Methodist Healthcare)/(United States Treasury PRF 9/1/2012@100)/(Original Issue Yield: 6.57%), 9/1/2021 1,120,000 Shelby County, TN Health Education & Housing Facilities Board, Hospital Revenue Bonds, 6.50% 1,249,573 (Methodist Healthcare)/(United States Treasury PRF 9/1/2012@100)/(Original Issue Yield: 6.57%), 9/1/2021 935,000 Sullivan County, TN Health Educational & Housing Facilities Board, Revenue Bonds, 6.25% 1,028,921 (Wellmont Health System)/(United States Treasury PRF 9/1/2012@101)/(Original Issue Yield: 6.45%), 9/1/2022 1,565,000 Sullivan County, TN Health Educational & Housing Facilities Board, Revenue Bonds, 6.25% 1,722,204 (Wellmont Health System)/(United States Treasury PRF 9/1/2012@101)/(Original Issue Yield: 6.45%), 9/1/2022 TOTAL 7,112,725 TEXAS--8.4% 4,600,000 Austin, TX Electric Utility System, Refunding Revenue Bonds, 5.25% (United States Treasury PRF 4,893,388 5/15/2013@100), 11/15/2022 1,000,000 Bexar County, Health Facilities Development Corp., Refunding Revenue Bonds (Series 2007), 5.00% 986,310 (Army Retirement Residence Foundation), 7/1/2027 1,160,000 Bexar County, Health Facilities Development Corp., Refunding Revenue Bonds (Series 2007), 5.00% 1,133,552 (Army Retirement Residence Foundation), 7/1/2037 2,000,000 Comal County, TX HFDC, Revenue Bonds (Series 2002A), 6.125% (McKenna Memorial 2,118,420 Hospital)/(Original Issue Yield: 6.28%), 2/1/2022 1,000,000 Comal, TX ISD, Refunding UT GO Bonds (Series 2005A) , 5.00% (PSFG GTD), 2/1/2025 1,022,440 3,000,000 Dallas, TX, Revenue Refunding Bonds (Series 2007), 4.50% (Dallas, TX Waterworks & Sewer 2,832,120 System)/(AMBAC INS)/(Original Issue Yield: 4.56%), 10/1/2036 3,000,000 Decatur, TX Hospital Authority, Hospital Revenue Bonds (Series 2004A), 7.00% (Wise Regional 3,254,190 Health System)/(Original Issue Yield: 7.125%), 9/1/2025 1,000,000 Granbury, TX ISD, Refunding UT GO Bonds, 5.00% (PSFG GTD), 8/1/2027 1,028,770 2,200,000 Harris County, TX HFDC, Hospital Revenue Bonds, (Series 1997A), 6.00% (Memorial Hospital 2,357,344 System)/(MBIA Insurance Corp. INS), 6/1/2011 4,000,000 Harris County, TX HFDC, Hospital Revenue Bonds, (Series 1997A), 6.00% (Memorial Hospital 4,342,920 System)/(MBIA Insurance Corp. INS), 6/1/2012 2,000,000 1,2 Harris County, TX, Toll Road Senior Lien Revenue Bond Drivers (Series 1864), 4.8391% (AMBAC 1,996,000 INS), 2/15/2015 1,000,000 La Feria, TX ISD, School Building UT GO Bonds, 5.00% (PSFG GTD), 2/15/2037 1,021,560 600,000 Matagorda County, TX Navigation District No. 1, COL Refunding Revenue Bonds, 5.60% (Centerpoint 630,930 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.), 2,368,287 4/1/2018 2,165,000 Richardson, TX Hospital Authority, Refunding & Improvement Hospital Revenue Bonds, 5.875% 2,298,364 (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), 981,220 5/1/2028 1,000,000 Sam Rayburn, TX Municipal Power Agency, Refunding Revenue Bonds (Series 2002A), 6.00%, 10/1/2021 1,048,450 5,000,000 Texas State Transportation Commission, Mobility Fund Revenue Bonds (Series 2007), 4.75% (Texas 5,019,050 State), 4/1/2027 1,000,000 Texas Water Development Board, State Revolving Funds Revenue Bonds, (Series B), 5.00% (Original 1,010,480 Issue Yield: 5.28%), 7/15/2019 TOTAL 40,343,795 UTAH--3.6% 13,500,000 Salt Lake City, UT Hospital Authority, Hospital Revenue Refunding Bonds (Series A), 8.125% (IHC 15,397,695 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.), 2,072,340 Mandatory Tender 11/1/2011 TOTAL 17,470,035 VERMONT--0.7% 2,295,000 Vermont Educational and Health Buildings Financing Agency, Refunding Revenue Bonds, 5.50% 2,355,221 (Norwich University)/(United States Treasury PRF 7/1/2008@101)/(Original Issue Yield: 5.62%), 7/1/2018 1,165,000 Vermont Educational and Health Buildings Financing Agency, Revenue Bonds (Series 2003A), 5.375% 1,184,479 (Vermont Law School)/(Original Issue Yield: 5.60%), 1/1/2023 TOTAL 3,539,700 VIRGINIA--3.8% 3,000,000 Chesapeake, VA IDA, PCR Bonds, 5.25% (Virginia Electric & Power Co.), 2/1/2008 3,001,440 5,000,000 Richmond, VA, UT GO Bonds, 5.50% (FSA INS)/(Original Issue Yield: 5.58%), 1/15/2018 5,275,350 3,000,000 Tobacco Settlement Financing Corp., VA, Revenue Bonds, 5.625% (United States Treasury PRF 3,302,430 6/1/2015@100)/(Original Issue Yield: 5.78%), 6/1/2037 2,500,000 Tobacco Settlement Financing Corp., VA, Tobacco Settlement Asset-Backed Bonds (Series 2007B-1), 2,387,875 5.00% (Original Issue Yield: 5.12%), 6/1/2047 3,900,000 Virginia Peninsula Port Authority, Coal Terminal Revenue Refunding Bonds (Series 2003), 6.00% 4,134,000 (Brinks Co. (The)), 4/1/2033 TOTAL 18,101,095 WASHINGTON--3.6% 1,000,000 Seattle, WA Water System, Revenue Bonds (Series 1999), 5.25%, 3/1/2013 1,022,290 1,365,000 Seattle, WA, Refunding & Improvement LT GO Bonds (Series 2002), 5.00% (Original Issue Yield: 1,411,342 5.14%), 7/1/2020 1,235,000 Skagit County, WA Public Hospital District No. 1, Revenue Bonds (Series 2005), 5.50% (Skagit 1,270,988 Valley Hospital), 12/1/2030 1,000,000 Vancouver, WA, LT GO Bonds (Series 2003), 5.00% (AMBAC INS), 12/1/2029 1,027,580 5,595,000 Washington State Convention & Trade Center, Lease Revenue COP, 5.125% (MBIA Insurance Corp. 5,724,916 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 6,990,861 TOTAL 17,447,977 WISCONSIN--4.6% 1,000,000 Marinette County, WI, UT GO Refunding Bonds, 6.50% (FGIC INS), 9/1/2018 1,074,030 1,655,000 Wisconsin Housing & EDA, Housing Revenue Bonds (Series 2002C), 5.35% (MBIA Insurance Corp. INS), 1,691,493 11/1/2022 1,090,000 Wisconsin State Clean Water, Revenue Bonds (Series 1), 5.00% (Original Issue Yield: 5.14%), 1,115,648 6/1/2020 5,500,000 Wisconsin State HEFA, Refunding Revenue Bonds , 5.75% (Wheaton Franciscan HealthCare)/(United 5,921,630 States Treasury PRF 2/15/2012@101)/(Original Issue Yield: 5.96%), 8/15/2025 300,000 Wisconsin State HEFA, Revenue Bonds (Series 2004), 5.50% (Blood Center of Wisconsin, 310,803 Inc.)/(Original Issue Yield: 5.583%), 6/1/2024 430,000 Wisconsin State HEFA, Revenue Bonds (Series 2004), 5.75% (Blood Center of Wisconsin, 455,099 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 2,132,300 Yield: 5.84%), 5/1/2029 1,340,000 Wisconsin State HEFA, Revenue Bonds (Series 2004A), 6.75% (Beaver Dam Community Hospitals, 1,448,299 Inc.)/(Original Issue Yield: 6.95%), 8/15/2034 2,650,000 Wisconsin State HEFA, Revenue Bonds (Series 2005), 5.25% (Vernon Memorial Healthcare, 2,664,760 Inc.)/(Original Issue Yield: 5.28%), 3/1/2035 1,940,000 Wisconsin State HEFA, Revenue Bonds, 6.00% (SynergyHealth, Inc.)/(Original Issue Yield: 6.10%), 2,065,770 11/15/2023 1,630,000 Wisconsin State HEFA, Revenue Bonds, 6.00% (Agnesian Healthcare, Inc.)/(Original Issue Yield: 1,707,751 6.15%), 7/1/2030 1,250,000 Wisconsin State HEFA, Revenue Bonds, (Series 2006A), 5.125% (Marshfield Clinic, WI), 2/15/2026 1,263,388 TOTAL 21,850,971 WYOMING--0.2% 1,000,000 University of Wyoming, University Facilities Improvement Revenue Bonds, 5.50% (MBIA Insurance 1,028,010 Corp. INS)/(Original Issue Yield: 5.70%), 6/1/2019 TOTAL INVESTMENTS - 99.1% 477,149,893 (IDENTIFIED COST $464,267,309)3 OTHER ASSETS LIABILITIES - NET - 0.9% 4,518,194 TOTAL NET ASSETS - 100% $ 481,668,087 At June 30, 2007, the Fund holds no securities that are subject to the federal alternative minimum tax (AMT). 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, 2007, these restricted securities amounted to $24,195,370, which represented 5.0% 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 Directors ("the Directors"). At June 30, 2007, these liquid restricted securities amounted to $21,042,190, which represented 4.4% of total net assets. 3 Underlying securities in inverse floater structure. 4 At June 30, 2007, the cost of investments for federal tax purposes was $464,250,426. The net unrealized appreciation of investments for federal tax purposes was $12,899,467. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $16,476,463 and net unrealized depreciation from investments for those securities having an excess of cost over value of $3,576,996.
At June 30,2007 the Fund had the following open swap contracts:
DESCRIPTION EXPIRATION NOTIONAL PRINCIPAL AMOUNT UNREALIZED DEPRECIATION Interest Rate Swap (Long on Fixed Rate) Notional Face $20,000,000, 4.210% 9/17/2007 $20,000,000 $(182,400)
Additional information on restricted securities, excluding securities purchased under Rule 144A that have been deemed liquid by the Directors, held at June 30, 2007, is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST New York City, NY IDA, Liberty Revenue Bonds (Series A), 6.25% (7 World Trade Center LLC), 3/1/2015 3/15/2005 $3,000,000
Note: The categories of investments are shown as a percentage of total net assets at June 30, 2007. INVESTMENT VALUATION Market values of the Fund's portfolio securities are determined as follows: {circle}for fixed-income securities, according to prices as furnished by an independent pricing service, except that fixed-income securities with remaining maturities of less than 60 days at the time of purchase are valued at amortized cost; {circle}for investments in other open-end regulated investment companies, based on net asset value; {circle}futures contracts and options are generally valued at market values established by the exchanges on which they are traded at the close of trading on such exchanges. Options traded in the over-the-counter market are generally valued according to the mean between the last bid and the last asked price for the option as provided by an investment dealer or other financial institution that deals in the option. The Directors may determine in good faith that another method of valuing such investments is necessary to appraise their fair market value; {circle}prices for total return swaps are based upon a valuation model incorporating underlying reference indexes, interest rates, yield curves and other market data or factors. Prices for credit default swaps are furnished by an independent pricing service and are based upon a valuation model incorporating default probabilities, recovery rates and other market data or factors. Prices for interest rate swaps are furnished by an independent pricing service and are based upon a valuation model incorporating swap spreads, swap curve computations and other market data or factors; and {circle}for all other securities at fair value as determined in accordance with procedures established by and under the general supervision of the Directors. Prices for fixed-income securities furnished by a pricing service may be based on a valuation matrix which incorporates both dealer-supplied valuations and electronic data processing techniques. Such prices are generally intended to be indicative of the bid prices currently offered to institutional investors for the securities, except that prices for corporate fixed-income and asset-backed securities traded in the United States are generally intended to be indicative of the mean between such bid prices and asked prices. The Directors have approved the use of such pricing services. A number of pricing services are available, and the Fund may use various pricing services or discontinue the use of any pricing service. Prices provided by independent pricing services may be determined without relying exclusively on quoted prices and may consider institutional trading in similar groups of securities, yield, quality, stability, risk, coupon rate, maturity, type of issue, trading characteristics, and other market data or factors. From time to time, when prices cannot be obtained from an independent pricing service, securities may be valued based on quotes from broker-dealers or other financial institutions that trade the securities. The following acronyms are used throughout this portfolio: AMBAC --American Municipal Bond Assurance Corporation COL --Collateralized COP --Certificates of Participation EDA --Economic Development Authority EDRBs --Economic Development Revenue Bonds FGIC --Financial Guaranty Insurance Company FHA --Federal Housing Administration FSA --Financial Security Assurance GO --General Obligation GTD --Guaranteed HDA --Hospital Development Authority HEFA --Health and Education Facilities 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 ISD --Independent School District LT --Limited Tax PCR --Pollution Control Revenue PRF --Prerefunded PSFG --Permanent School Fund Guarantee TOBs --Tender Option Bonds UT --Unlimited Tax 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, PRINCIPAL FINANCIAL OFFICER (INSERT NAME AND TITLE) RICHARD A. NOVAK, PRINCIPAL FINANCIAL OFFICER DATE AUGUST 21, 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 /S/ J. CHRISTOPHER DONAHUE, PRINCIPAL EXECUTIVE OFFICER J. CHRISTOPHER DONAHUE, PRINCIPAL EXECUTIVE OFFICER DATE AUGUST 21, 2007 BY /S/ RICHARD A. NOVAK, PRINCIPAL FINANCIAL OFFICER RICHARD A. NOVAK, PRINCIPAL FINANCIAL OFFICER DATE AUGUST 21, 2007 -1-