0001318148-12-001853.txt : 20121126 0001318148-12-001853.hdr.sgml : 20121126 20121126151713 ACCESSION NUMBER: 0001318148-12-001853 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20120930 FILED AS OF DATE: 20121126 DATE AS OF CHANGE: 20121126 EFFECTIVENESS DATE: 20121126 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FEDERATED MUNICIPAL SECURITIES FUND INC CENTRAL INDEX KEY: 0000201801 IRS NUMBER: 251304971 STATE OF INCORPORATION: MD FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-02677 FILM NUMBER: 121224254 BUSINESS ADDRESS: STREET 1: 4000 ERICSSON DRIVE CITY: WARRENDALE STATE: PA ZIP: 15086-7561 BUSINESS PHONE: 8003417400 MAIL ADDRESS: STREET 1: 4000 ERICSSON DRIVE CITY: WARRENDALE STATE: PA ZIP: 15086-7561 FORMER COMPANY: FORMER CONFORMED NAME: LIBERTY MUNICIPAL SECURITIES FUND INC DATE OF NAME CHANGE: 19930517 FORMER COMPANY: FORMER CONFORMED NAME: FEDERATED TAX FREE INCOME FUND INC DATE OF NAME CHANGE: 19920703 0000201801 S000009070 FEDERATED MUNICIPAL SECURITIES FUND INC C000024642 Class A Shares LMSFX C000024643 Class B Shares LMSBX C000024644 Class C Shares LMSCX C000051334 Class F Shares LMFFX N-CSRS 1 form.htm

United States

Securities and Exchange Commission

Washington, D.C. 20549

 

Form N-CSR

Certified Shareholder Report 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

4000 Ericsson Drive

Warrendale, PA 15086-7561

(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: 03/31/2013

 

 

Date of Reporting Period: Six months ended 09/30/2012

 

 

 

 

 

 

 

Item 1. Reports to Stockholders

 

Semi-Annual Shareholder Report
September 30, 2012
Share Class Ticker
A LMSFX
B LMSBX
C LMSCX
F LMFFX
 
Federated Municipal Securities Fund, Inc.
Fund Established 1976
Dear Valued Shareholder,
I am pleased to present the Semi-Annual Shareholder Report for your fund covering the period from April 1, 2012 through September 30, 2012. This report includes a complete listing of your fund's holdings, performance information and financial statements along with other important fund information.
In addition, our website, FederatedInvestors.com, offers easy access to Federated resources that include timely fund updates, economic and market insights from our investment strategists, and financial planning tools. We invite you to register to take full advantage of its capabilities.
Thank you for investing with Federated. I hope you find this information useful and look forward to keeping you informed.
Sincerely,
J. Christopher Donahue, President
Not FDIC Insured • May Lose Value • No Bank Guarantee
Portfolio of Investments Summary Table (unaudited)
At September 30, 2012, the Fund's sector composition1 was as follows:
Sector Composition Percentage of
Total Net Assets
Transportation 15.3%
General Obligation-State 15.0%
Hospital 12.2%
Public Power 9.5%
Special Tax 7.8%
Education 7.8%
Water & Sewer 7.6%
General Obligation-Local 7.2%
Industrial Development Bond/Pollution Control Revenue 4.1%
Pre-refunded 2.8%
Other2 10.6%
Other Assets and Liabilities—Net3 0.1%
TOTAL 100.0%
1 Sector classifications, and the assignment of holdings to such sectors, are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund's Adviser. For securities that have been enhanced by a third party, including bond insurers and banks, sector classifications are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund's Adviser. Pre-refunded securities are those whose debt service is paid from escrowed assets, usually U.S. government securities.
2 For purposes of this table, sector classifications constitute 89.3% of the Fund's total net assets. Remaining sectors have been aggregated under the designation “Other.”
3 Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.
Semi-Annual Shareholder Report
1
Portfolio of Investments
September 30, 2012 (unaudited)
Principal
Amount 		Value
MUNICIPAL BONDS—99.0%
Alabama—0.3%
$1,250,000 Selma, AL IDB, Gulf Opportunity Zone Bonds (Series 2010A), 5.80% (International Paper Co.), 5/1/2034 $1,417,000
Alaska—0.1%
595,000 Valdez, AK Marine Terminal, Marine Terminal Revenue Refunding Bonds (Series 2003B), 5.00% (BP PLC), 1/1/2014 626,916
Arizona—1.9%
1,545,000 Apache County, AZ IDA, PCRBs (Series 2012A), 4.50% (Tucson Electric Power Co.), 3/1/2030 1,617,492
1,000,000 Arizona Board of Regents, System Revenue Bonds (Series 2008C), 6.00% (Arizona State University)/(Original Issue Yield: 6.12%), 7/1/2028 1,189,530
2,000,000 Arizona Transportation Board, Transportation Excise Tax Revenue Bonds (Series 2009), 5.00% (Maricopa County, AZ Regional Area Road Fund), 7/1/2023 2,392,160
2,000,000 Phoenix, AZ Civic Improvement Corp.—Wastewater System, Senior Lien Wastewater System Revenue Bonds (Series 2008), 5.50%, 7/1/2024 2,445,940
2,000,000 Pima County, AZ IDA, Revenue Bonds (Series 2008B), 5.75% (Tucson Electric Power Co.), 9/1/2029 2,133,280
TOTAL 9,778,402
California—11.6%
500,000 ABAG Finance Authority for Non-Profit Corporations, CA, Revenue Bonds, 6.125% (Southern California Presbyterian Homes)/(Original Issue Yield: 6.25%), 11/15/2032 505,585
500,000 Anaheim, CA Public Financing Authority, Lease Revenue Bonds (Series 1997C), 6.00% (Anaheim Public Improvements Project)/(Assured Guaranty Municipal Corp. INS), 9/1/2016 577,075
3,000,000 Bay Area Toll Authority, CA, San Francisco Bay Area Subordinate Toll Bridge Revenue Bonds (Series 2010 S-2), 5.00%, 10/1/2042 3,331,830
1,000,000 Bay Area Toll Authority, CA, San Francisco Bay Area Toll Bridge Revenue Bonds (Series 2009F-1), 5.625%, 4/1/2044 1,156,070
425,000 California Health Facilities Financing Authority, Health Facility Revenue Bonds (Series 2004I), 4.95% TOBs (Catholic Healthcare West), Mandatory Tender 7/1/2014 453,717
1,000,000 California Health Facilities Financing Authority, Revenue Bonds (Series 1998), 5.40% (Northern California Presbyterian Homes, Inc.)/(Original Issue Yield: 5.417%), 7/1/2028 1,000,520
950,000 California State Public Works Board, Lease Revenue Bonds (Series 2007B), 4.75% (California Community Colleges)/(National Public Finance Guarantee Corporation INS), 3/1/2032 992,712
2,000,000 California State, Various Purpose GO Bonds, 6.00%, 11/1/2039 2,413,280
Semi-Annual Shareholder Report
2
Principal
Amount 		Value
MUNICIPAL BONDS—continued
California—continued
$4,000,000 California State, Various Purpose UT GO Bonds, 5.75% (Original Issue Yield: 5.85%), 4/1/2029 $4,763,120
1,000,000 California State, Various Purpose UT GO Bonds, 6.50%, 4/1/2033 1,248,420
1,000,000 El Centro, CA Financing Authority, INS Hospital Revenue Bonds (Series 2001), 5.25% (El Centro Regional Medical Center)/(California Mortgage Insurance GTD)/(Original Issue Yield: 5.32%), 3/1/2018 1,002,450
3,000,000 Golden State Tobacco Securitization Corp., CA, Enhanced Tobacco Settlement Asset-Backed Bonds (Series 2005A), 5.00% (California State)/(FGIC INS), 6/1/2035 3,069,090
1,800,000 Golden State Tobacco Securitization Corp., CA, Tobacco Settlement Asset-Backed Bonds (Series 2007A-1), 5.75%, 6/1/2047 1,532,484
1,000,000 Long Beach, CA Bond Financing Authority, Plaza Parking Facility Lease Revenue Bonds, 5.25% (Original Issue Yield: 5.54%), 11/1/2021 1,002,910
1,000,000 Long Beach, CA USDT, UT GO Bonds (Series 2008A), 5.75%, 8/1/2033 1,190,700
1,000,000 Los Angeles, CA Department of Water & Power, Power System Revenue Bonds (Series 2009A), 5.00% (Original Issue Yield: 5.10%), 7/1/2039 1,110,290
2,000,000 Los Angeles, CA USDT, UT GO Bonds (Series 2009D), 5.20%, 7/1/2029 2,333,260
1,000,000 Los Angeles, CA Wastewater System, Refunding Revenue Bonds (Series 2009A), 5.75%, 6/1/2034 1,198,740
1,000,000 Metropolitan Water District of Southern California, Water Revenue Refunding Bonds (Series 2009C), 5.00%, 7/1/2031 1,162,810
500,000 Perris, CA Public Financing Authority, Tax Allocation Revenue Bonds (Series 2001A), 5.75% (Original Issue Yield: 5.85%), 10/1/2031 505,730
1,950,000 Poway, CA USDT, Special Tax Bonds (Series 2005), 5.125% (Community Facilities District No. 6 (4S Ranch))/(Original Issue Yield: 5.21%), 9/1/2035 1,971,801
6,000,000 Regents of the University of California Medical Center, Pooled Revenue Bonds (Series 2008D), 5.00%, 5/15/2024 6,900,180
240,000 Regents of the University of California, Revenue Bonds (Series A), 5.125% (United States Treasury PRF 5/15/2013@100), 5/15/2020 247,296
3,000,000 Roseville, CA Natural Gas Financing Authority, Gas Revenue Bonds, 5.00% (Merrill Lynch & Co., Inc. GTD), 2/15/2025 3,302,880
1,500,000 Sacramento County, CA Airport System, Airport System Senior Revenue Bonds (Series 2009B), 5.50% (Assured Guaranty Corp. INS)/(Original Issue Yield: 5.60%), 7/1/2034 1,694,355
2,665,000 Sacramento, CA Municipal Utility District, Electric Revenue Refunding Bonds (Series 2012Y), 5.00%, 8/15/2028 3,219,080
349,000 San Bernardino County, CA Housing Authority, Subordinated Revenue Bonds, 7.25% (Glen Aire Park & Pacific Palms), 4/15/2042 174,298
200,000 San Francisco, CA City & County Airport Commission, Revenue Refunding Bonds (Issue 34D), 5.25% (Assured Guaranty Corp. INS), 5/1/2025 235,612
Semi-Annual Shareholder Report
3
Principal
Amount 		Value
MUNICIPAL BONDS—continued
California—continued
$1,000,000 Santa Barbara CCD, CA, UT GO Bonds (Series 2008A), 5.25%, 8/1/2028 $1,192,910
3,000,000 Southern California Public Power Authority (Southern Transmission System), Transmission Project Revenue Bonds (2009 Subordinate Refunding Series A), 5.00%, 7/1/2023 3,504,780
1,000,000 Torrance, CA Hospital Revenue Bonds, (Series 2001A), 5.50% (Torrance Memorial Medical Center)/(Original Issue Yield: 5.65%), 6/1/2031 1,001,420
1,000,000 Trustees of the California State University, Systemwide Revenue Bonds (Series 2009A), 6.00%, 11/1/2040 1,178,840
3,000,000 Trustees of the California State University, Systemwide Revenue Bonds (Series 2011A), 5.00%, 11/1/2037 3,428,070
1,000,000 University of California, General Revenue Bonds (Series 2009O), 5.75%, 5/15/2034 1,204,190
1,000,000 Vista, CA Community Development Commission, Tax Allocation Bonds (Series 2001), 5.80% (Vista Redevelopment Project Area)/(Original Issue Yield: 5.85%), 9/1/2030 1,001,320
TOTAL 60,807,825
Colorado—1.4%
2,500,000 Colorado Health Facilities Authority, Revenue Refunding Bonds (Series 2012A), 5.00% (Covenant Retirement Communities, Inc.), 12/1/2033 2,630,200
415,000 Colorado State Higher Education Capital Construction Lease Purchase Financing Program, COPs (Series 2008), 5.50% (United States Treasury PRF 11/1/2018@100)/(Original Issue Yield: 5.60%), 11/1/2027 521,597
1,250,000 University of Colorado Hospital Authority, Revenue Bonds (Series 2012A), 5.00%, 11/15/2036 1,371,787
2,500,000 University of Colorado, University Enterprise Revenue Bonds (Series 2011A), 5.25%, 6/1/2036 2,953,950
TOTAL 7,477,534
Connecticut—1.0%
4,000,000 Connecticut State, Refunding UT GO Bonds (Series 2010C), 5.00%, 12/1/2019 4,989,680
Delaware—0.5%
2,380,000 Delaware EDA, Gas Facilities Refunding Bonds, 5.40% (Delmarva Power and Light Co.), 2/1/2031 2,668,242
Florida—5.3%
1,500,000 Broward County, FL Airport System, Airport System Revenue Bonds (Series 2012Q-1), 5.00%, 10/1/2037 1,681,860
1,445,000 Broward County, FL Airport System, Airport System Revenue Refunding Bonds (Series 2009O), 5.375% (Original Issue Yield: 5.48%), 10/1/2029 1,667,371
Semi-Annual Shareholder Report
4
Principal
Amount 		Value
MUNICIPAL BONDS—continued
Florida—continued
$1,500,000 Florida Higher Educational Facilities Financing Authority, (Nova Southeastern University), Revenue Refunding Bonds (Series 2012A), 5.000%, 04/01/2027 $1,648,170
760,000 Florida State Board of Education Administration, UT GO Capital Outlay Bonds, 9.125% (Florida State)/(Original Issue Yield: 9.173%), 6/1/2014 798,251
2,175,000 Florida State Board of Education, UT GO Capital Outlay Bonds (Series 2008F), 5.00% (Florida State), 6/1/2025 2,649,193
2,000,000 Jacksonville, FL Sales Tax, Refunding Revenue Bonds (Series 2012A), 5.00%, 10/01/2029 2,332,320
2,250,000 Miami Beach, FL Health Facilities Authority, (Mt. Sinai Medical Center, FL), Hospital Revenue Refunding Bonds (Series 2012), 5.00%, 11/15/2029 2,467,238
5,000,000 Miami-Dade County, FL Aviation, Revenue Bonds (Series 2008B), 5.00% (Assured Guaranty Corp. INS), 10/1/2028 5,560,600
1,250,000 Miami-Dade County, FL Expressway Authority, Toll System Revenue Bonds (Series 2010), 5.00% (Original Issue Yield: 5.10%), 7/1/2040 1,366,587
5,000,000 Orlando & Orange County Expressway Authority, FL, Revenue Bonds (Series 2010A), 5.00%, 7/1/2035 5,602,800
2,000,000 St. Johns County, FL IDA, Revenue Bonds (Series 2010A), 5.875% (Presbyterian Retirement Communities )/(Original Issue Yield: 5.98%), 8/1/2040 2,207,680
TOTAL 27,982,070
Georgia—3.6%
5,000,000 Athens-Clarke County, GA Water & Sewerage, Revenue Bonds (Series 2008), 5.625% (Original Issue Yield: 5.78%), 1/1/2033 5,843,000
2,190,000 Atlanta, GA Airport General Revenue, Airport General Revenue Bonds (Series 2010A), 5.00%, 1/1/2035 2,429,937
2,000,000 Atlanta, GA Water & Wastewater, Revenue Bonds (Series 2009A), 6.00%, 11/1/2019 2,581,980
2,000,000 Burke County, GA Development Authority, PCRBs (Series 2008A), 5.50% (Oglethorpe Power Corp.), 1/1/2033 2,188,460
1,000,000 Georgia State, UT GO Bonds (Series 2009B), 5.00%, 1/1/2026 1,216,980
1,000,000 Municipal Electric Authority of Georgia, Project One Subordinated Bonds (Series 2008A), 5.25%, 1/1/2021 1,233,390
3,000,000 Municipal Electric Authority of Georgia, Project One Subordinated Bonds (Series 2008D), 5.50% (Original Issue Yield: 5.80%), 1/1/2026 3,443,340
TOTAL 18,937,087
Illinois—6.0%
1,875,000 Chicago, IL O'Hare International Airport, General Airport Third Lien Revenue Bonds (Series 2011C), 6.50%, 1/1/2041 2,328,506
2,000,000 Chicago, IL O'Hare International Airport, Passenger Facility Charge Revenue Refunding Bonds (Series 2012A), 5.00%, 1/1/2031 2,270,960
Semi-Annual Shareholder Report
5
Principal
Amount 		Value
MUNICIPAL BONDS—continued
Illinois—continued
$1,500,000 Chicago, IL Sales Tax, Revenue Bonds (Series 2011A), 5.25%, 1/1/2038 $1,735,530
3,000,000 Chicago, IL Water Revenue, Second Lien Water Refunding Revenue Bonds (Series 2008), 5.00% (Assured Guaranty Municipal Corp. INS), 11/1/2028 3,485,520
2,765,000 Chicago, IL, UT GO Bonds (Project Series 2011A), 5.25%, 1/1/2035 3,121,989
1,930,000 Illinois Finance Authority, Revenue Refunding Bonds (Series 2007), 5.00% (Loyola University of Chicago), 7/1/2022 2,158,473
215,000 Illinois Finance Authority, Revenue Refunding Bonds (Series 2007), 5.00% (Loyola University of Chicago)/(United States Treasury PRF 7/1/2017@100), 7/1/2022 257,413
4,000,000 Illinois State Toll Highway Authority, Toll Highway Senior Refunding Revenue Bonds (Series 2010 A-1), 5.25%, 1/1/2030 4,571,720
5,000,000 Illinois State, GO Refunding Bonds (Series February 2010), 5.00%, 1/1/2024 5,510,500
2,250,000 Illinois State, UT GO Bonds (Series 2006), 5.00%, 1/1/2027 2,408,108
450,000 Illinois State, UT GO Bonds, 5.25% (National Public Finance Guarantee Corporation INS)/(United States Treasury PRF 10/1/2012@100), 10/1/2018 450,189
1,500,000 Metropolitan Pier & Exposition Authority, IL, McCormick Place Expansion Project Bonds (Series 2010A), 5.50%, 6/15/2050 1,683,945
1,200,000 Railsplitter Tobacco Settlement Authority, IL, Tobacco Settlement Revenue Bonds (Series 2010), 6.00% (Original Issue Yield: 6.10%), 6/1/2028 1,413,864
TOTAL 31,396,717
Indiana—3.6%
2,200,000 Indiana Health Facility Financing Authority, Revenue Bonds (Series 2004A), 5.375% (Deaconess Hospital)/(AMBAC INS), 3/1/2029 2,252,162
1,005,000 Indiana Municipal Power Agency, Revenue Bonds (Series B), 5.25% (National Public Finance Guarantee Corporation INS), 1/1/2018 1,015,784
1,500,000 Indiana State Finance Authority, Environmental Revenue Refunding Bonds (Series 2010), 6.00% (United States Steel Corp.), 12/1/2026 1,567,305
1,665,000 Indiana State Finance Authority, Midwestern Disaster Relief Revenue Bonds (Series 2012A), 5.00% (Ohio Valley Electric Corp.)/(Original Issue Yield: 5.05%), 6/1/2039 1,738,926
1,500,000 Indiana State Office Building Commission Capitol Complex, Revenue Bonds (Series 1990A: Senate Avenue Parking Facility), 7.40% (National Public Finance Guarantee Corporation INS)/(Original Issue Yield: 7.488%), 7/1/2015 1,659,120
4,000,000 Indianapolis, IN Gas Utility Distribution System, Second Lien Revenue Refunding Bonds (Series 2008C), 5.25% (Assured Guaranty Corp. INS), 6/1/2019 4,853,520
1,000,000 Knox County, IN Economic Development, Revenue & Refunding Bonds (Series 2012A), 5.00% (Good Samaritan Hospital, IN), 4/1/2042 1,082,560
Semi-Annual Shareholder Report
6
Principal
Amount 		Value
MUNICIPAL BONDS—continued
Indiana—continued
$1,702,776 1,2 St. Joseph County, IN Hospital Authority, Health Facilities Revenue Bonds (Series 2005), 5.375% (Madison Center Obligated Group), 2/15/2034 $204,384
4,000,000 Whiting, IN Environmental Facilities, Revenue Bonds (Series 2009), 5.00% (BP PLC), 1/1/2016 4,495,160
TOTAL 18,868,921
Iowa—0.4%
2,330,000 Tobacco Settlement Authority, IA, Tobacco Settlement Asset-Backed Bonds (Series 2005C), 5.50% (Original Issue Yield: 5.78%), 6/1/2042 2,080,853
Kansas—0.2%
1,010,000 Kansas State Development Finance Authority, Health Facilities Revenue Bonds (Series 2007L), 5.125% (Stormont-Vail HealthCare, Inc.)/(National Public Finance Guarantee Corporation INS), 11/15/2032 1,089,871
Kentucky—1.1%
3,000,000 Kentucky Turnpike Authority, Economic Development Road Revenue Bonds (Series 2008A), 5.00%, 7/1/2023 3,558,960
2,000,000 Louisville & Jefferson County, KY Metropolitan Government, Revenue Bonds (Series 2012A), 5.00% (Catholic Health Initiatives), 12/1/2031 2,288,620
TOTAL 5,847,580
Louisiana—0.2%
1,180,000 St. Charles Parish, LA Gulf Opportunity Zone, Revenue Bonds (Series 2010), 4.00% TOBs (Valero Energy Corp.), Mandatory Tender 6/1/2022 1,281,515
Maryland—0.2%
1,060,000 Maryland State EDC, Port Facilities Refunding Revenue Bonds (Series 2010), 5.75% (CONSOL Energy, Inc.), 9/1/2025 1,152,612
Massachusetts—4.0%
4,000,000 Massachusetts Bay Transportation Authority General Transportation System, Assessment Bonds (Series 2008A), 5.25%, 7/1/2034 4,677,560
4,330,000 Massachusetts Department of Transportation, Metropolitan Highway System Revenue Bonds (Series 2010B), 5.00%, 1/1/2032 4,851,895
3,000,000 Massachusetts Development Finance Agency, Revenue Bonds (Series 2010B-2), 5.00% (Harvard University), 10/15/2020 3,843,270
500,000 Massachusetts Development Finance Agency, Revenue Bonds (Series 2012G), 5.00% (Berkshire Health System), 10/1/2031 559,570
1,000,000 Massachusetts School Building Authority, Senior Dedicated Sales Tax Bonds (Series 2011B), 5.25%, 10/15/2035 1,205,240
5,000,000 Massachusetts Water Resources Authority, General Revenue Refunding Bonds (Series 2010B), 5.00%, 8/1/2027 6,069,750
TOTAL 21,207,285
Semi-Annual Shareholder Report
7
Principal
Amount 		Value
MUNICIPAL BONDS—continued
Michigan—1.0%
$1,500,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds (Series 2002A), 6.00% (United States Treasury PRF 4/1/2013 @100), (Oakwood Obligated Group), 4/1/2022 $1,543,950
1,000,000 Michigan State Hospital Finance Authority, Refunding Revenue Bonds (Series 2002A), 5.50% (Crittenton Hospital Medical Center)/(Original Issue Yield: 5.67%), 3/1/2022 1,022,370
2,470,000 Michigan State Housing Development Authority, SFM Revenue Bonds (Series 2009A), 5.35%, 6/1/2022 2,758,990
TOTAL 5,325,310
Minnesota—0.2%
1,000,000 University of Minnesota, GO Bonds (Series 2011A), 5.25%, 12/1/2030 1,223,680
Mississippi—0.2%
940,000 Warren County, MS Gulf Opportunity Zone, Gulf Opportunity Zone Bonds (Series 2011A), 5.375% (International Paper Co.), 12/1/2035 1,027,815
Missouri—0.6%
1,335,000 Missouri Development Finance Board, Infrastructure Facilities Revenue Bonds (Series 2005A), 5.00% (Branson, MO), 6/1/2035 1,377,720
1,500,000 St. Louis County, MO IDA, Senior Living Facilities Revenue Bonds (Series 2012), 5.00% (Friendship Village Sunset Hills), 9/1/2042 1,579,095
TOTAL 2,956,815
Nebraska—0.8%
625,000 Nebraska Investment Finance Authority, Single Family Housing Revenue Bonds (Series 2010A), 5.70%, 9/1/2031 683,656
2,800,000 Nebraska Public Power District, General Revenue Bonds (Series 2012A), 5.00%, 1/1/2027 3,375,260
TOTAL 4,058,916
Nevada—0.9%
3,000,000 Clark County, NV School District, LT GO Building Bonds (Series 2008A), 5.00%, 6/15/2025 3,428,160
1,000,000 Henderson, NV, Health Facility Revenue Bonds (Series 2004A), 5.625% (Catholic Healthcare West)/(Original Issue Yield: 5.72%), 7/1/2024 1,056,320
TOTAL 4,484,480
New Hampshire—0.3%
1,685,000 New Hampshire Higher Educational & Health Facilities Authority, Healthcare System Revenue Bonds (Series 2004), 5.375% (Covenant Health Systems)/(Original Issue Yield: 5.50%), 7/1/2024 1,741,835
New Jersey—3.0%
3,000,000 New Jersey EDA, (NJ Dedicated Cigarette Excise Tax), Cigarette Tax Revenue Refunding Bonds (Series 2012), 5.000%, 06/15/2020 3,459,600
3,000,000 New Jersey EDA, Revenue Bonds, Series 2004, 5.75% (NJ Dedicated Cigarette Excise Tax)/(Original Issue Yield: 5.89%), 6/15/2029 3,279,480
Semi-Annual Shareholder Report
8
Principal
Amount 		Value
MUNICIPAL BONDS—continued
New Jersey—continued
$5,000,000 New Jersey State Transportation Trust Fund Authority, Transportation System Bonds (Series 2011A), 5.50% (New Jersey State), 6/15/2041 $5,855,800
2,000,000 New Jersey Turnpike Authority, Revenue Bonds (Series 2009H), 5.00% (Original Issue Yield: 5.069%), 1/1/2036 2,219,380
1,000,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds (Series 2012A), 5.00%, 1/1/2035 1,158,830
TOTAL 15,973,090
New Mexico—0.4%
2,000,000 Albuquerque Bernalillo County, NM Water Utility Authority, Joint Water & Sewer System Improvement Revenue Bonds (Series 2009A-1), 5.25% (Original Issue Yield: 5.34%), 7/1/2034 2,326,460
New York—9.7%
1,500,000 Brooklyn Arena Local Development Corporation, NY, Pilot Revenue Bonds (Series 2009), 6.375% (Original Issue Yield: 6.476%), 7/15/2043 1,754,460
2,000,000 Hempstead (town), NY IDA, Civic Facility Revenue Bonds, 5.25% (Hofstra University), 7/1/2018 2,061,000
2,500,000 Metropolitan Transportation Authority, NY, Transportation Revenue Bonds (Series 2012E), 5.00% (MTA Transportation Revenue), 11/15/2042 2,801,575
1,500,000 New York City Liberty Development Corp., Revenue Bonds (Series 2005), 5.25% (Goldman Sachs Group, Inc.), 10/1/2035 1,755,360
4,000,000 New York City, NY IDA, cpi Pilot Revenue Bonds (Series 2006), 2.228% (Yankee Stadium LLC)/(FGIC INS), 3/1/2021 3,778,680
3,000,000 New York City, NY Municipal Water Finance Authority, Water & Sewer System Revenue Bonds (Fiscal 2005 Series C), 5.00%, 6/15/2030 3,295,830
2,725,000 New York City, NY TFA, Future Tax Secured Subordinate Bonds (Series 2011C), 5.50%, 11/1/2035 3,342,839
3,570,000 New York City, NY, UT GO Bonds (Series 2009E), 5.00%, 8/1/2026 4,213,599
5,000,000 New York City, NY, UT GO Bonds (Series 2009I-1), 5.375% (Original Issue Yield: 5.55%), 4/1/2036 5,803,100
2,470,000 New York Liberty Development Corporation, Revenue Refunding Bonds (Series 2012 Class 2), 5.00% (7 World Trade Center LLC), 9/15/2043 2,718,161
2,000,000 New York State Dormitory Authority, Revenue Bonds (Series 2008A), 5.00% (New York State Personal Income Tax Revenue Bond Fund), 3/15/2028 2,327,760
2,780,000 New York State Thruway Authority, General Revenue Bonds (Series 2012I), 5.00% (New York State Thruway Authority—General Revenue ), 1/1/2028 3,290,575
2,500,000 New York State Thruway Authority, Revenue Bonds (Series 2007A), 5.25% (New York State Personal Income Tax Revenue Bond Fund), 3/15/2026 2,974,525
3,000,000 New York State, UT GO Bonds (Series 2011A), 5.00%, 2/15/2020 3,769,440
Semi-Annual Shareholder Report
9
Principal
Amount 		Value
MUNICIPAL BONDS—continued
New York—continued
$1,985,000 Suffolk County, NY Water Authority, Water System Revenue Bonds (Series 1994), 6.00% (National Public Finance Guarantee Corporation INS)/(Escrowed In Treasuries COL), 6/1/2014 $2,124,526
4,000,000 Triborough Bridge & Tunnel Authority, NY, General Revenue Bonds (Series 2008A), 5.00% (Original Issue Yield: 5.10%), 11/15/2037 4,650,400
TOTAL 50,661,830
North Carolina—5.0%
1,000,000 Charlotte, NC Water & Sewer System, Water & Sewer Revenue Bonds (Series 2009), 5.25%, 7/1/2030 1,196,080
500,000 Charlotte-Mecklenburg Hospital Authority, NC, Health Care Revenue & Refunding Bonds (Series 2007A), 5.00% (Carolinas HealthCare System)/(Original Issue Yield: 5.09%), 1/15/2031 552,045
500,000 Charlotte-Mecklenburg Hospital Authority, NC, Health Care Revenue Refunding Bonds (Series 2008A), 5.25% (Carolinas HealthCare System), 1/15/2024 569,400
1,660,000 Johnston Memorial Hospital Authority, NC, FHA INS Mortgage Revenue Bonds (Series 2008), 5.25% (Johnston Memorial Hospital)/(Assured Guaranty Municipal Corp. INS), 10/1/2036 1,827,959
2,000,000 North Carolina Capital Facilities Finance Agency, Educational Facilities Revenue Bonds (Series 2009), 5.00% (Wake Forest University), 1/1/2038 2,238,720
5,000,000 North Carolina Capital Facilities Finance Agency, Revenue Bonds (Series 2009B), 5.00% (Duke University), 10/1/2038 5,848,550
500,000 North Carolina Eastern Municipal Power Agency, Power System Refunding Revenue Bonds (Series 2003C), 5.375% (United States Treasury PRF 1/1/2013 @100), (Original Issue Yield: 5.57%), 1/1/2017 506,585
500,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds (Series 2009A), 5.50%, 1/1/2026 583,855
3,915,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds (Series 2009C), 5.00%, 1/1/2026 4,449,476
1,500,000 North Carolina Medical Care Commission, Health Care Facilities First Mortgage Revenue Bonds (Series 2006A), 5.00% (The Pines at Davidson), 1/1/2036 1,532,880
1,000,000 North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds (Series 1999), 6.25% (Stanly Memorial Hospital Project)/(Original Issue Yield: 6.40%), 10/1/2019 1,002,290
1,205,000 North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds (Series 2004A), 5.25% (Cleveland Community Healthcare)/(AMBAC INS), 7/1/2021 1,251,573
525,000 North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, 5.50% (Scotland Memorial Hospital)/(Radian Asset Assurance, Inc. INS)/(Original Issue Yield: 5.593%), 10/1/2019 526,092
500,000 North Carolina Medical Care Commission, Health Care Facilities Revenue Refunding Bonds (Series 2008D), 6.25% (University Health Systems of Eastern Carolina)/(Original Issue Yield: 6.75%), 12/1/2033 604,790
Semi-Annual Shareholder Report
10
Principal
Amount 		Value
MUNICIPAL BONDS—continued
North Carolina—continued
$500,000 North Carolina Medical Care Commission, Retirement Facilities First Mortgage Revenue Bonds (Series 2003A), 6.375% (Givens Estates)/(United States Treasury PRF 7/1/2013@101)/(Original Issue Yield: 6.50%), 7/1/2023 $528,375
250,000 North Carolina Medical Care Commission, Retirement Facilities First Mortgage Revenue Refunding Bonds (Series 2007), 5.125% (Forest at Duke), 9/1/2032 260,635
500,000 North Carolina State, Grant Anticipation Revenue Vehicle Bonds (Series 2007), 5.00% (National Public Finance Guarantee Corporation INS), 3/1/2019 581,775
500,000 Pitt County, NC, Refunding Bonds, 5.25% (Pitt County Memorial Hospital)/(Escrowed In Treasuries COL)/(Original Issue Yield: 5.85%), 12/1/2021 546,270
500,000 Raleigh & Durham, NC Airport Authority, Revenue Bonds (Series 2005A), 5.00% (AMBAC INS), 5/1/2030 539,930
500,000 University of North Carolina Wilmington, COPs (Series 2008), 5.00% (Assured Guaranty Corp. INS), 6/1/2022 581,325
525,000 University of North Carolina Wilmington, COPs, 5.25% (FGIC and National Public Finance Guarantee Corporation INS), 6/1/2022 566,254
TOTAL 26,294,859
Ohio—6.1%
5,000,000 American Municipal Power-Ohio, Inc., Revenue Bonds (Series 2008A), 5.25% (American Municipal Power, Prairie State Energy Campus Project), 2/15/2028 5,661,150
4,000,000 Buckeye Tobacco Settlement Financing Authority, OH, Tobacco Settlement Asset-Backed Bonds (Series 2007A-2), 5.875% (Original Issue Yield: 5.95%), 6/1/2030 3,302,480
2,000,000 Cleveland, OH Airport System, Revenue Bonds (Series 2012A), 5.00%, 1/1/2029 2,242,120
1,700,000 Cleveland, OH Municipal School District, UT GO Bonds, 5.25% (Assured Guaranty Municipal Corp. INS), 12/1/2024 1,818,541
4,000,000 Hamilton County, OH, Healthcare Facilities Revenue Bonds (Series 2012), 5.25% (Christ Hospital ), 6/1/2032 4,428,120
615,000 Ohio HFA, Residential Mortgage Revenue Bonds (Series 2008F), 5.25% (GNMA COL Home Mortgage Program GTD), 9/1/2028 643,930
5,000,000 Ohio State Turnpike Commission, Revenue Refunding Bonds (Series 2010A), 5.00%, 2/15/2031 5,739,500
50,000 Ohio State Water Development Authority, Revenue Bonds (Series I), 7.00% (Escrowed In Treasuries COL)/(Original Issue Yield: 7.45%), (AMBAC INS) 12/1/2014 53,651
3,000,000 Ohio State, Common Schools GO Bonds (Series 2012B), 5.00%, 3/15/2022 3,783,090
1,800,000 Ohio State, Hospital Revenue Refunding Bonds (Series 2008A), 5.25% (Cleveland Clinic)/(Original Issue Yield: 98.376%), 1/1/2033 1,990,962
Semi-Annual Shareholder Report
11
Principal
Amount 		Value
MUNICIPAL BONDS—continued
Ohio—continued
$2,000,000 Ohio State, Infrastructure Improvement GO Bonds (Series 2008A), 5.375% (Original Issue Yield: 5.50%), 9/1/2028 $2,375,920
TOTAL 32,039,464
Oklahoma—0.2%
870,000 Tulsa, OK Industrial Authority, Revenue Bonds, Series A, 6.00% (University of Tulsa)/(National Public Finance Guarantee Corporation INS), 10/1/2016 948,857
Pennsylvania—9.4%
3,890,000 Allegheny County, PA HDA, Hospital Revenue Bonds (Series 2008A), 5.00% (UPMC Health System), 6/15/2018 4,605,138
1,280,000 Allegheny County, PA HDA, Refunding Revenue Bonds (Series 1998A), 5.125% (Jefferson Regional Medical Center, PA)/(Original Issue Yield: 5.40%), 5/1/2029 1,280,217
1,085,000 Allegheny County, PA IDA, Environmental Improvement Refunding Revenue Bonds (Series 2005), 5.50% (United States Steel Corp.), 11/1/2016 1,138,718
2,570,000 Allegheny County, PA Port Authority, Special Revenue Transportation Refunding Bonds (Series 2011), 5.75%, 3/1/2029 3,077,832
4,935,000 Commonwealth of Pennsylvania, UT GO Bonds (Second Series 2010A), 5.00%, 5/1/2017 5,891,502
5,000,000 Delaware Valley, PA Regional Finance Authority, Revenue Bonds, 5.75%, 7/1/2017 5,843,250
3,000,000 Pennsylvania EDFA, Exempt Facilities Revenue Bonds (Series 2009), 7.00% (Allegheny Energy Supply Company LLC), 7/15/2039 3,592,560
4,000,000 Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (First Series of 2012), 5.00% (Temple University), 4/1/2042 4,505,840
1,500,000 Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 2009A), 5.25% (University of Pennsylvania Health System), 8/15/2022 1,776,315
3,125,000 Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 2010E), 5.00% (UPMC Health System)/(Original Issue Yield: 5.10%), 5/15/2031 3,465,094
1,000,000 Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 2012), 5.00% (LaSalle University), 5/1/2042 1,084,060
3,000,000 Pennsylvania State Turnpike Commission, Turnpike Subordinate Revenue Bonds (Series 2008 B-1), 5.50%, 6/1/2033 3,357,000
1,000,000 Pennsylvania State Turnpike Commission, Turnpike Subordinate Revenue Bonds (Series 2008A), 5.00% (Assured Guaranty Corp. INS), 6/1/2033 1,091,060
2,000,000 Pennsylvania State Turnpike Commission-Motor License Fund Enhanced, Motor License Fund-Enhanced Turnpike Subordinate Special Revenue Bonds (Series 2011A), 6.00%, 12/1/2036 2,467,940
3,185,000 Philadelphia, PA Hospitals & Higher Education Facilities Authority, Hospital Revenue Bonds (Series 2012B), 6.25% (Temple University Health System Obligated Group), 7/1/2023 3,536,146
Semi-Annual Shareholder Report
12
Principal
Amount 		Value
MUNICIPAL BONDS—continued
Pennsylvania—continued
$1,000,000 Philadelphia, PA Water & Wastewater System, Water and Wastewater Revenue Bonds (Series 2009A), 5.25% (Original Issue Yield: 5.29%), 1/1/2032 $1,129,900
1,000,000 University of Pittsburgh, University Capital Project Bonds (Series 2009B), 5.50%, 9/15/2024 1,248,330
TOTAL 49,090,902
Puerto Rico—2.0%
1,000,000 Commonwealth of Puerto Rico, Public Improvement GO Bonds (Series 2008A), 5.50%, 7/1/2018 1,101,800
1,000,000 Puerto Rico Commonwealth Aqueduct & Sewer Authority, Senior Lien Revenue Bonds (Series 2012A), 5.125% (Original Issue Yield: 5.36%), 7/1/2037 989,540
2,000,000 Puerto Rico Commonwealth Aqueduct & Sewer Authority, Senior Lien Revenue Bonds (Series 2012A), 5.25% (Original Issue Yield: 5.42%), 7/1/2042 1,990,880
1,000,000 Puerto Rico Electric Power Authority, Power Refunding Revenue Bonds (Series 2007VV), 5.25% (National Public Finance Guarantee Corporation INS), 7/1/2029 1,080,160
2,000,000 Puerto Rico Electric Power Authority, Power Revenue Bonds (Series 2012A), 5.00%, 7/1/2029 2,057,440
3,000,000 Puerto Rico Sales Tax Financing Corp., Sales Tax Revenue Bonds (First Subordinate Series 2010A), 5.50%, 8/1/2037 3,220,500
TOTAL 10,440,320
Rhode Island—0.6%
2,500,000 Rhode Island State Health and Educational Building Corp., Higher Education Facilities Revenue Bonds (Series 2007), 5.00% (Brown University), 9/1/2037 2,866,200
South Carolina—1.1%
2,000,000 Lexington County, SC Health Services District, Inc., Revenue Refunding Bonds, 5.00%, 11/1/2026 2,319,920
3,000,000 Piedmont Municipal Power Agency, SC, Electric Revenue Refunding Bonds (Series 2009A-3), 5.00%, 1/1/2018 3,522,300
TOTAL 5,842,220
Tennessee—1.0%
1,000,000 Metropolitan Government Nashville & Davidson County, TN Water & Sewer, Subordinate Lien Water & Sewer Revenue Refunding Bonds (Series 2012), 5.00%, 7/1/2021 1,239,480
2,725,000 Tennessee Energy Acquisition Corp., Gas Revenue Bonds (Series 2006A), 5.25% (Goldman Sachs & Co. GTD), 9/1/2023 3,029,355
1,000,000 Tennessee State, GO Bonds (Series 2009A), 5.00% (United States Treasury PRF 5/1/2017@100), 5/1/2027 1,199,000
TOTAL 5,467,835
Semi-Annual Shareholder Report
13
Principal
Amount 		Value
MUNICIPAL BONDS—continued
Texas—7.8%
$2,795,000 Bexar County, TX, HFDC, Revenue Bonds (Series 2010), 6.20% (Army Retirement Residence Foundation), 7/1/2045 $3,140,015
5,000,000 Dallas, TX Area Rapid Transit, Senior Lien Sales Tax Revenue Bonds, 5.25%, 12/1/2038 5,835,500
4,000,000 Dallas-Fort Worth, TX International Airport, Joint Revenue Refunding Bonds (Series 2012B), 5.00%, 11/1/2035 4,491,400
500,000 Harris County, TX Metropolitan Transit Authority, Sales & Use Tax Bonds (Series 2011A), 5.00%, 11/1/2031 593,035
2,000,000 Harris County, TX, Toll Road Senior Lien Revenue & Refunding Bonds (Series 2008B), 5.00% (Harris County, TX Toll Road Authority)/(Original Issue Yield: 5.08%), 8/15/2033 2,296,640
2,000,000 Houston, TX Airport System, Senior Lien Revenue & Refunding Bonds (Series 2009A), 5.50% (Original Issue Yield: 5.67%), 7/1/2034 2,267,040
1,000,000 Humble, TX ISD, UT GO Bonds, 5.00% (FGIC and National Public Finance Guarantee Corporation INS), 2/15/2024 1,056,140
2,500,000 North Texas Tollway Authority, System First Tier Revenue Refunding Bonds (Series 2011B), 5.00% (Original Issue Yield: 5.12%), 1/1/2038 2,755,500
110,000 Sam Rayburn, TX Municipal Power Agency, Power Supply System Revenue Refunding Bonds (Series 2012), 5.00%, 10/1/2021 131,105
1,000,000 Socorro, TX ISD, School Building UT GO Bonds (Series 2006A), 5.00% (PSFG), 8/15/2026 1,155,390
2,500,000 Tarrant County, TX Cultural Education Facilities Finance Corp., Revenue Bonds, Series 2006A, 6.00% (Northwest Senior Housing Corp. Edgemere Project), 11/15/2036 2,657,175
2,030,000 Texas Municipal Gas Acquisition & Supply Corp. I, Gas Supply Senior Lien Revenue Bonds (Series 2006A), 5.25%, 12/15/2026 2,265,500
1,525,000 Texas State Public Finance Authority, GO Bonds (Series 2007), 5.00% (Texas State), 10/1/2027 1,809,123
5,000,000 Texas State Transportation Commission, Mobility Fund Revenue Bonds (Series 2007), 4.75% (Texas State), 4/1/2027 5,760,050
4,000,000 Texas State, Water Financial Assistance UT GO Bonds (Series 2009A), 5.00%, 8/1/2029 4,772,320
TOTAL 40,985,933
Virginia—1.7%
3,900,000 Virginia Peninsula Port Authority, Coal Terminal Revenue Refunding Bonds (Series 2003), 6.00% (Brinks Co. (The)), 4/1/2033 3,976,869
4,000,000 Virginia Resources Authority, Subordinated Revenue Bonds (Series 2008), 5.00% (Virginia State Clean Water Revolving Fund), 10/1/2027 4,804,040
TOTAL 8,780,909
Washington—1.9%
2,000,000 Port of Seattle, WA, Revenue & Refunding Bonds (Series 2010B), 5.00%, 6/1/2040 2,251,880
Semi-Annual Shareholder Report
14
Principal
Amount 		Value
MUNICIPAL BONDS—continued
Washington—continued
$3,060,000 Tobacco Settlement Authority, WA, Tobacco Settlement Asset-Backed Revenue Bonds, 6.625% (Original Issue Yield: 6.875%), 6/1/2032 $3,164,897
2,115,000 Washington State Health Care Facilities Authority, (Kadlec Regional Medical Center), Revenue Bonds (Series 2012), 5.00%, 12/01/2042 2,168,044
2,000,000 Washington State Health Care Facilities Authority, Revenue Bonds (Series 2009A), 6.50% (Swedish Health Services)/(United States Treasury PRF 11/15/2014@100)/(Original Issue Yield: 6.73%), 11/15/2033 2,258,100
TOTAL 9,842,921
Wisconsin—3.5%
1,285,000 Wisconsin Housing & EDA, Housing Revenue Bonds (Series 2002C), 5.35% (National Public Finance Guarantee Corporation INS), 11/1/2022 1,295,383
6,000,000 Wisconsin State General Fund Appropriation, Revenue Bonds (Series 2009A), 6.00% (Wisconsin State)/(Original Issue Yield: 6.02%), 5/1/2033 7,450,020
3,000,000 Wisconsin State HEFA, 6.625% (ProHealth Care, Inc.)/(Original Issue Yield: 6.87%), 2/15/2039 3,514,950
1,595,000 Wisconsin State HEFA, Revenue Bonds (previously Synergy Health), 6.00% (Froedtert & Community Health)/(Original Issue Yield: 6.10%), 11/15/2023 1,671,863
4,000,000 Wisconsin State, UT GO Bonds (Series 2008C), 5.00%, 5/1/2028 4,668,640
TOTAL 18,600,856
Wyoming—0.2%
1,000,000 Laramie County, WY, Hospital Revenue Bonds (Series 2012), 5.00% (Cheyenne Regional Medical Center), 5/1/2032 1,120,690
TOTAL MUNICIPAL BONDS
(IDENTIFIED COST $474,123,833) 		519,712,307
SHORT-TERM MUNICIPALS—0.9%3
Illinois—0.3%
1,350,000 Illinois Finance Authority, (Series 2005B) Daily VRDNs (Resurrection Health Care Corp.), (JPMorgan Chase Bank, N.A. LOC), 0.20%, 10/1/2012 1,350,000
New York—0.1%
700,000 New York City, NY, (Fiscal 2006 Series E-2) Daily VRDNs (Bank of America N.A. LOC), 0.19%, 10/1/2012 700,000
Pennsylvania—0.1%
550,000 Beaver County, PA IDA, (Series 2006-B) Daily VRDNs (FirstEnergy Solutions Corp.)/(Citibank NA, New York LOC), 0.19%, 10/1/2012 550,000
Semi-Annual Shareholder Report
15
Principal
Amount 		Value
SHORT-TERM MUNICIPALS—continued3
Texas—0.4%
$2,150,000 Harris County, TX Education Facilities Finance Corp., (Series 2008E) Daily VRDNs (Young Men's Christian Association of the Greater Houston Area)/(JPMorgan Chase Bank, N.A. LOC), 0.20%, 10/1/2012 $2,150,000
TOTAL SHORT-TERM MUNICIPALS
(AT AMORTIZED COST) 		4,750,000
TOTAL MUNICIPAL INVESTMENTS—99.9%
(IDENTIFIED COST $478,873,833)4 		524,462,307
OTHER ASSETS AND LIABILITIES - NET—0.1%5 442,521
TOTAL NET ASSETS—100% $524,904,828
At September 30, 2012, the Fund holds no securities that are subject to the federal alternative minimum tax (AMT).
1 Non-income producing security.
2 Security in default.
3 Current rate and next reset date shown for Variable Rate Demand Notes.
4 The cost of investments for federal tax purposes amounts to $478,721,439.
5 Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.
Note: The categories of investments are shown as a percentage of total net assets at September 30, 2012.
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:
Level 1—quoted prices in active markets for identical securities, including investment companies with daily net asset values, if applicable.
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level 3—significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
As of September 30, 2012, all investments of the Fund utilized Level 2 inputs in valuing the Fund's assets carried at fair value.
Semi-Annual Shareholder Report
16
The following acronyms are used throughout this portfolio:
AMBAC —American Municipal Bond Assurance Corporation
CCD —Community College District
COL —Collateralized
COPs —Certificates of Participation
EDA —Economic Development Authority
EDC —Economic Development Corporation
EDFA —Economic Development Finance Authority
FGIC —Financial Guaranty Insurance Company
FHA —Federal Housing Administration
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
INS —Insured
ISD —Independent School District
LOC —Letter of Credit
LT —Limited Tax
PCRBs —Pollution Control Revenue Bonds
PRF —Pre-refunded
PSFG —Public School Fund Guarantee
SFM —Single Family Mortgage
TFA —Transitional Finance Authority
TOBs —Tender Option Bonds
USDT —Unified School District
UT —Unlimited Tax
VRDNs —Variable Rate Demand Notes
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder Report
17
Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period)
Six Months
Ended
(unaudited)
9/30/2012 		Year Ended March 31,
2012 2011 2010 2009 2008
Net Asset Value,
Beginning of Period 		$10.42 $9.56 $9.99 $9.41 $10.05 $10.65
Income From
Investment Operations:
Net investment income1 0.19 0.38 0.42 0.41 0.43 0.44
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts 0.36 0.86 (0.44) 0.59 (0.64) (0.59)
TOTAL FROM INVESTMENT OPERATIONS 0.55 1.24 (0.02) 1.00 (0.21) (0.15)
Less Distributions:
Distributions from net investment income (0.19) (0.38) (0.41) (0.42) (0.43) (0.45)
Net Asset Value, End of Period $10.78 $10.42 $9.56 $9.99 $9.41 $10.05
Total Return2 5.28% 13.21% (0.24)% 10.78% (2.14)% (1.48)%
Ratios to Average Net Assets:
Net expenses 0.87%3 0.87% 0.87% 0.87% 0.87%4 0.88%5
Net investment income 3.39%3 3.79% 4.16% 4.20% 4.40% 4.28%
Expense waiver/reimbursement6 0.07%3 0.09% 0.10% 0.09% 0.15% 0.13%
Supplemental Data:
Net assets, end of period (000 omitted) $461,776 $437,968 $438,344 $511,709 $396,603 $431,074
Portfolio turnover 11% 14% 21% 23% 52% 37%
1 Per share numbers have been calculated using the average shares method.
2 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.
3 Computed on an annualized basis.
4 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.87% for the year ended March 31, 2009, after taking into account this expense reduction.
5 Includes interest and trust expenses related to the Fund's participation in certain inverse floater structures of less than 0.01% for the year ended March 31, 2008.
6 This expense decrease is reflected in both the net expense and net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder Report
18
Financial Highlights–Class B Shares
(For a Share Outstanding Throughout Each Period)
Six Months
Ended
(unaudited)
9/30/2012 		Year Ended March 31,
2012 2011 2010 2009 2008
Net Asset Value, Beginning of Period $10.42 $9.56 $9.99 $9.41 $10.05 $10.65
Income From Investment Operations:
Net investment income1 0.14 0.30 0.33 0.33 0.34 0.35
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts 0.36 0.86 (0.43) 0.58 (0.64) (0.60)
TOTAL FROM INVESTMENT OPERATIONS 0.50 1.16 (0.10) 0.91 (0.30) (0.25)
Less Distributions:
Distributions from net investment income (0.14) (0.30) (0.33) (0.33) (0.34) (0.35)
Net Asset Value, End of Period $10.78 $10.42 $9.56 $9.99 $9.41 $10.05
Total Return2 4.85% 12.25% (1.12)% 9.81% (3.01)% (2.35)%
Ratios to Average Net Assets:
Net expenses 1.70%3 1.72% 1.73% 1.73% 1.76%4 1.76%5
Net investment income 2.57%3 2.95% 3.31% 3.35% 3.52% 3.39%
Expense waiver/reimbursement6 0.00%3,7 0.00%7 0.00%7 0.00%7 0.01% 0.00%7
Supplemental Data:
Net assets, end of period (000 omitted) $11,641 $11,174 $13,402 $19,606 $15,105 $18,246
Portfolio turnover 11% 14% 21% 23% 52% 37%
1 Per share numbers have been calculated using the average shares method.
2 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.
3 Computed on an annualized basis.
4 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 1.76% for the year ended March 31, 2009, after taking into account this expense reduction.
5 Includes interest and trust expenses related to the Fund's participation in certain inverse floater structures of less than 0.01% for the year ended March 31, 2008.
6 This expense decrease is reflected in both the net expense and net investment income ratios shown above.
7 Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder Report
19
Financial Highlights–Class C Shares
(For a Share Outstanding Throughout Each Period)
Six Months
Ended
(unaudited)
9/30/2012 		Year Ended March 31,
2012 2011 2010 2009 2008
Net Asset Value, Beginning of Period $10.42 $9.56 $9.99 $9.41 $10.05 $10.65
Income From Investment Operations:
Net investment income1 0.14 0.30 0.33 0.33 0.34 0.35
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts 0.36 0.86 (0.43) 0.58 (0.64) (0.59)
TOTAL FROM INVESTMENT OPERATIONS 0.50 1.16 (0.10) 0.91 (0.30) (0.24)
Less Distributions:
Distributions from net investment income (0.14) (0.30) (0.33) (0.33) (0.34) (0.36)
Net Asset Value, End of Period $10.78 $10.42 $9.56 $9.99 $9.41 $10.05
Total Return2 4.85% 12.25% (1.12)% 9.81% (3.00)% (2.34)%
Ratios to Average Net Assets:
Net expenses 1.70%3 1.72% 1.73% 1.73% 1.76%4 1.75%5
Net investment income 2.57%3 2.95% 3.31% 3.35% 3.54% 3.42%
Expense waiver/reimbursement6 0.00%3,7 0.00%7 0.00%7 0.00%7 0.01% 0.00%7
Supplemental Data:
Net assets, end of period (000 omitted) $27,427 $25,267 $24,635 $26,570 $20,376 $15,434
Portfolio turnover 11% 14% 21% 23% 52% 37%
1 Per share numbers have been calculated using the average shares method.
2 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.
3 Computed on an annualized basis.
4 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 1.76% for the year ended March 31, 2009, after taking into account this expense reduction.
5 Includes interest and trust expenses related to the Fund's participation in certain inverse floater structures of less than 0.01% for the year ended March 31, 2008.
6 This expense decrease is reflected in both the net expense and net investment income ratios shown above.
7 Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder Report
20
Financial Highlights–Class F Shares
(For a Share Outstanding Throughout Each Period)
Six Months
Ended
(unaudited)
9/30/2012 		Year Ended March 31, Period
Ended
3/31/20081
2012 2011 2010 2009
Net Asset Value, Beginning of Period $10.42 $9.56 $9.99 $9.41 $10.05 $10.56
Income From Investment Operations:
Net investment income2 0.19 0.38 0.42 0.41 0.43 0.37
Net realized and unrealized gain (loss) on investments, futures contracts and swap contracts 0.36 0.86 (0.44) 0.59 (0.64) (0.51)
TOTAL FROM INVESTMENT OPERATIONS 0.55 1.24 (0.02) 1.00 (0.21) (0.14)
Less Distributions:
Distributions from net investment income (0.19) (0.38) (0.41) (0.42) (0.43) (0.37)
Net Asset Value, End of Period $10.78 $10.42 $9.56 $9.99 $9.41 $10.05
Total Return3 5.28% 13.21% (0.24)% 10.78% (2.14)% (1.33)%
Ratios to Average Net Assets:
Net expenses 0.87%4 0.87% 0.87% 0.87% 0.87%5 0.87%4
Net investment income 3.39%4 3.79% 4.17% 4.20% 4.46% 4.42%4
Expense waiver/reimbursement6 0.07%4 0.09% 0.11% 0.11% 0.11% 0.13%4
Supplemental Data:
Net assets, end of period (000 omitted) $24,061 $19,575 $17,739 $18,298 $11,361 $4,292
Portfolio turnover 11% 14% 21% 23% 52% 37%7
1 Reflects operations for the period from May 31, 2007 (date of initial investment) to March 31, 2008.
2 Per share numbers have been calculated using the average shares method.
3 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.
4 Computed on an annualized basis.
5 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.87% for the year ended March 31, 2009, after taking into account this expense reduction.
6 This expense decrease is reflected in both the net expense and net investment income ratios shown above.
7 Portfolio turnover is calculated at the Fund level. Percentage indicated was calculated for the fiscal year ended March 31, 2008.
See Notes which are an integral part of the Financial Statements
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Statement of Assets and Liabilities
September 30, 2012 (unaudited)
Assets:
Total investment in securities, at value (identified cost $478,873,833) $524,462,307
Cash 20,800
Income receivable 6,882,212
Receivable for investments sold 1,195,000
Receivable for shares sold 802,860
TOTAL ASSETS 533,363,179
Liabilities:
Payable for investments purchased $7,101,726
Payable for shares redeemed 800,586
Income distribution payable 262,153
Payable for shareholder services fee (Note 5) 183,247
Payable for distribution services fee (Note 5) 23,821
Payable for Directors'/Trustees' fees 1,125
Accrued expenses 85,693
TOTAL LIABILITIES 8,458,351
Net assets for 48,714,266 shares outstanding $524,904,828
Net Assets Consist of:
Paid-in capital $499,595,394
Net unrealized appreciation of investments 45,588,474
Accumulated net realized loss on investments (19,847,579)
Distributions in excess of net investment income (431,461)
TOTAL NET ASSETS $524,904,828
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Statement of Assets and Liabilities–continued
Net Asset Value, Offering Price and Redemption Proceeds Per Share
Class A Shares:
Net asset value per share ($461,775,500 ÷ 42,855,516 shares outstanding), $0.01 par value, 375,000,000 shares authorized $10.78
Offering price per share (100/95.50 of $10.78) $11.29
Redemption proceeds per share $10.78
Class B Shares:
Net asset value per share ($11,641,367 ÷ 1,080,362 shares outstanding), $0.01 par value, 250,000,000 shares authorized $10.78
Offering price per share $10.78
Redemption proceeds per share (94.50/100 of $10.78) $10.19
Class C Shares:
Net asset value per share ($27,427,433 ÷ 2,545,413 shares outstanding), $0.01 par value, 375,000,000 shares authorized $10.78
Offering price per share $10.78
Redemption proceeds per share (99.00/100 of $10.78) $10.67
Class F Shares:
Net asset value per share ($24,060,528 ÷ 2,232,975 shares outstanding), $0.01 par value, 150,000,000 shares authorized $10.78
Offering price per share (100/99.00 of $10.78) $10.89
Redemption proceeds per share (99.00/100 of $10.78) $10.67
See Notes which are an integral part of the Financial Statements
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Statement of Operations
Six Months Ended September 30, 2012 (unaudited)
Investment Income:
Interest $10,910,815
Expenses:
Investment adviser fee (Note 5) $1,269,699
Administrative fee (Note 5) 199,575
Custodian fees 11,796
Transfer and dividend disbursing agent fees and expenses 149,324
Directors'/Trustees' fees 4,717
Auditing fees 12,259
Legal fees 4,115
Portfolio accounting fees 59,254
Distribution services fee (Note 5) 141,805
Shareholder services fee (Note 5) 622,144
Account administration fee (Note 2) 2,490
Share registration costs 32,190
Printing and postage 16,382
Insurance premiums 2,057
Taxes 18,970
Miscellaneous 6,298
TOTAL EXPENSES 2,553,075
Waiver and Reimbursement (Note 5):
Waiver of administrative fee $(4,094)
Reimbursement of shareholder services fee (155,949)
TOTAL WAIVER AND REIMBURSEMENT (160,043)
Net expenses 2,393,032
Net investment income 8,517,783
Realized and Unrealized Gain on Investments:
Net realized gain on investments 5,399,718
Net change in unrealized appreciation of investments 11,847,820
Net realized and unrealized gain on investments 17,247,538
Change in net assets resulting from operations $25,765,321
See Notes which are an integral part of the Financial Statements
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Statement of Changes in Net Assets
Six Months
Ended
(unaudited)
9/30/2012 		Year Ended
3/31/2012
Increase (Decrease) in Net Assets
Operations:
Net investment income $8,517,783 $18,341,592
Net realized gain on investments 5,399,718 923,967
Net change in unrealized appreciation/depreciation of investments 11,847,820 41,260,880
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS 25,765,321 60,526,439
Distributions to Shareholders:
Distributions from net investment income
Class A Shares (7,895,421) (16,697,429)
Class B Shares (150,137) (337,056)
Class C Shares (355,776) (725,968)
Class F Shares (386,186) (691,391)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS (8,787,520) (18,451,844)
Share Transactions:
Proceeds from sale of shares 47,430,835 32,447,007
Net asset value of shares issued to shareholders in payment of distributions declared 7,096,229 14,205,707
Cost of shares redeemed (40,584,648) (88,863,953)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 13,942,416 (42,211,239)
Change in net assets 30,920,217 (136,644)
Net Assets:
Beginning of period 493,984,611 494,121,255
End of period (including distributions in excess of net investment income of $(431,461) and $(161,724), respectively) $524,904,828 $493,984,611
See Notes which are an integral part of the Financial Statements
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Notes to Financial Statements
September 30, 2012 (unaudited)
1. Organization
Federated Municipal Securities Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified, open-end management investment company. The Fund offers four classes of shares: Class A Shares, Class B Shares, Class C Shares and Class F Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The investment objective of the Fund is to provide for its shareholders a high level of current income which is exempt from federal regular income tax. Interest income from the Fund's investments normally will not be subject to the federal AMT for individuals and corporations, but may be subject to state and local taxes.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with U.S. generally accepted accounting principles (GAAP).
Investment Valuation
In calculating its net asset value (NAV), the Fund generally values investments as follows:
■  Fixed-income securities acquired with remaining maturities greater than 60 days are fair valued using price evaluations provided by a pricing service approved by the Fund's Board of Directors (the “Directors”).
■  Fixed-income securities acquired with remaining maturities of 60 days or less are valued at their cost (adjusted for the accretion of any discount or amortization of any premium), which approximates market value.
■  Shares of other mutual funds are valued based upon their reported NAVs.
■  Derivative contracts listed on exchanges are valued at their reported settlement or closing price.
■  Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Directors.
■  For securities that are fair valued in accordance with procedures established by and under the general supervision of the Directors, certain factors may be considered such as: the purchase price of the security, information obtained by contacting the issuer, analysis of the issuer's financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded and public trading in similar securities of the issuer or comparable issuers.
If the Fund cannot obtain a price or price evaluation from a pricing service for an investment, the Fund may attempt to value the investment based upon the mean of bid and asked quotations or fair value the investment based on price evaluations, from one or more dealers. If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could purchase or sell an investment at the price used to calculate the Fund's NAV.
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Fair Valuation and Significant Events Procedures
The Directors have appointed a Valuation Committee comprised of officers of the Fund, Federated Investment Management Company (“Adviser”) and the Adviser's affiliated companies to determine fair value of securities and in overseeing the calculation of the NAV. The Directors have also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. The Valuation Committee employs various methods for reviewing third-party pricing service evaluations including periodic reviews of third-party pricing services' policies, procedures and valuation methods (including key inputs and assumptions), transactional back-testing, comparisons of evaluations of different pricing services and review of price challenges by the Adviser based on recent market activity. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Directors. The Directors periodically review and approve the fair valuations made by the Valuation Committee and any changes made to the procedures.
Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for other types of fixed-income securities and OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Directors.
Investment Income, Gains and Losses, Expenses and Distributions
Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified-cost basis. Interest income and expenses are accrued daily. Distributions to shareholders are recorded on the ex-dividend date. Distributions of net investment income are declared daily and paid monthly. Non-cash dividends included in dividend income, if any, are recorded at fair value. Investment income, realized and unrealized gains and losses and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that Class A Shares, Class B Shares, Class C Shares and Class F Shares may bear account administration fees, distribution services fees and shareholder services fees unique to those classes. For the six months ended September 30, 2012, account administration fees for the Fund were as follows:
Account
Administration
Fees Incurred
Class A Shares $2,490
Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
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Premium and Discount Amortization
All premiums and discounts on fixed-income securities are amortized/accreted using the effective interest rate method.
Federal Taxes
It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary. As of and during the six months ended September 30, 2012, the Fund did not have a liability for any uncertain tax positions. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of September 30, 2012, tax years 2009 through 2012 remain subject to examination by the Fund's major tax jurisdictions, which include the United States of America, the state of Maryland and the Commonwealth of Pennsylvania.
Other Taxes
As an open-end management investment company incorporated in the state of Maryland but domiciled in the Commonwealth of Pennsylvania, the Fund is subject to the Pennsylvania Franchise Tax. This franchise tax is assessed annually on the value of the Fund, as represented by average net assets for the tax year.
When-Issued and Delayed Delivery Transactions
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Other
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
3. Capital Stock
The following tables summarize capital stock activity:
Six Months Ended
9/30/2012 		Year Ended
3/31/2012
Class A Shares: Shares Amount Shares Amount
Shares sold 3,629,253 $38,487,196 2,296,357 $23,253,976
Shares issued to shareholders in payment of distributions declared 593,922 6,324,762 1,261,216 12,753,519
Shares redeemed (3,395,797) (36,008,542) (7,358,564) (73,817,657)
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS 827,378 $8,803,416 (3,800,991) $(37,810,162)
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Six Months Ended
9/30/2012 		Year Ended
3/31/2012
Class B Shares: Shares Amount Shares Amount
Shares sold 132,283 $1,408,619 209,433 $2,140,026
Shares issued to shareholders in payment of distributions declared 12,390 131,928 28,317 285,868
Shares redeemed (136,699) (1,446,734) (566,554) (5,649,883)
NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS 7,974 $93,813 (328,804) $(3,223,989)
Six Months Ended
9/30/2012 		Year Ended
3/31/2012
Class C Shares: Shares Amount Shares Amount
Shares sold 243,196 $2,583,560 327,525 $3,332,887
Shares issued to shareholders in payment of distributions declared 25,459 271,096 53,857 544,478
Shares redeemed (147,943) (1,573,043) (532,278) (5,360,142)
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS 120,712 $1,281,613 (150,896) $(1,482,777)
Six Months Ended
9/30/2012 		Year Ended
3/31/2012
Class F Shares: Shares Amount Shares Amount
Shares sold 466,517 $4,951,460 366,181 $3,720,118
Shares issued to shareholders in payment of distributions declared 34,589 368,443 61,385 621,842
Shares redeemed (146,453) (1,556,329) (403,858) (4,036,271)
NET CHANGE RESULTING FROM CLASS F SHARE TRANSACTIONS 354,653 $3,763,574 23,708 $305,689
NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS 1,310,717 $13,942,416 (4,256,983) $(42,211,239)
4. Federal Tax Information
At September 30, 2012, the cost of investments for federal tax purposes was $478,721,439. The net unrealized appreciation of investments for federal tax purposes was $45,740,868. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $48,042,255 and net unrealized depreciation from investments for those securities having an excess of cost over value of $2,301,387.
At March 31, 2012, the Fund had a capital loss carryforward of $25,279,530 which will reduce the Fund's taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code, thereby reducing the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal income tax. Pursuant to the Code, a net capital loss incurred in taxable years beginning on or before December 22, 2010, is characterized as short-term and may be carried forward
Semi-Annual Shareholder Report
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for a maximum of eight tax years (“Carryforward Limit”), whereas a net capital loss incurred in taxable years beginning after December 22, 2010, retains its character as either short-term or long-term, does not expire and is required to be utilized prior to the losses which have a Carryforward Limit.
The following schedule summarizes the Fund's capital loss carryforwards and expiration years:
Expiration Year Short-Term Long-Term Total
No expiration $831,035 — $831,035
2016 $1,218,209 NA $1,218,209
2017 $16,161,827 NA $16,161,827
2018 $7,068,459 NA $7,068,459
5. Investment Adviser Fee and Other Transactions with Affiliates
Investment Adviser Fee
The advisory agreement between the Fund and the Adviser provides for an annual fee equal to: (a) 0.30% of the Fund's average daily net assets; and (b) 4.50% of the gross income of the Fund, excluding capital gains or losses. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily choose to waive any portion of its fee.
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of certain Federated funds as specified below, plus certain out-of-pocket expenses:
Administrative Fee Average Aggregate Daily Net Assets
of the Federated Funds
0.150% on the first $5 billion
0.125% on the next $5 billion
0.100% on the next $10 billion
0.075% on assets in excess of $20 billion
Prior to September 1, 2012, the administrative fee received during any fiscal year was at least $150,000 per portfolio and $40,000 per each additional class of Shares. Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the six months ended September 30, 2012, FAS waived $4,094 of its fee. The net fee paid to FAS was 0.076% of average daily net assets of the Fund.
Distribution Services Fee
The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. (FSC), the principal distributor, from the daily net assets of the Fund's Class B Shares and Class C Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at the following percentages of average daily net assets annually, to compensate FSC:
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Share Class Name Percentage of Average Daily
Net Assets of Class
Class B Shares 0.75%
Class C Shares 0.75%
Subject to the terms described in the Expense Limitation note, FSC may voluntarily choose to waive any portion of its fee. For the six months ended September 30, 2012, distribution services fees for the Fund were as follows:
Distribution
Services Fees
Incurred
Class B Shares $42,097
Class C Shares 99,708
TOTAL $141,805
When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the six months ended September 30, 2012, FSC retained $22,182 of fees paid by the Fund.
Sales Charges
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the six months ended September 30, 2012, FSC retained $23,026 in sales charges from the sale of Class A Shares and $1,230 from the sale of Class F Shares. FSC also retained $987, $3,573, $518 and $6,942 of CDSC relating to redemptions of Class A Shares, Class B Shares, Class C Shares and Class F Shares, respectively.
Shareholder Services Fee
The Fund may pay fees (“Service Fees”) up to 0.25% of the average daily net assets of the Fund's Class A Shares, Class B Shares, Class C Shares and Class F Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for Service Fees. For the six months ended September 30, 2012, Service Fees for the Fund were as follows:
Service Fees
Incurred 		Service Fees
Reimbursed
Class A Shares $547,237 $(148,006)
Class B Shares 14,032 —
Class C Shares 33,236 —
Class F Shares 27,639 (7,943)
TOTAL $622,144 $(155,949)
For the six months ended September 30, 2012, FSSC received $38,266 of Service Fees paid by the Fund.
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Interfund Transactions
During the six months ended September 30, 2012, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $75,200,000 and $84,510,000, respectively.
Expense Limitation
Effective June 1, 2012, the Adviser and its affiliates (which may include FSC, FAS and FSSC) have voluntarily agreed to waive their fees and/or reimburse expenses so that the total annual fund operating expenses (as shown in the financial highlights) paid by the Fund's Class A Shares, Class B Shares, Class C Shares and Class F Shares (after the voluntary waivers and reimbursements) will not exceed 0.87%, 1.73%, 1.73% and 0.87% (the “Fee Limit”), respectively, up to but not including the later of (the “Termination Date”): (a) June 1, 2013; or (b) the date of the Fund's next effective Prospectus. While the Adviser and its affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Directors.
General
Certain Officers and Directors of the Fund are Officers and Directors or Trustees of the above companies.
6. Investment Transactions
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the six months ended September 30, 2012, were as follows:
Purchases $69,158,661
Sales $53,131,594
7. Line of Credit
The Fund participates in a $100,000,000 unsecured, uncommitted revolving line of credit (LOC) agreement with PNC Bank. The LOC was made available for extraordinary or emergency purposes, primarily for financing redemption payments. Borrowings are charged interest at a rate offered to the Fund by PNC Bank at the time of the borrowing. As of September 30, 2012, there were no outstanding loans. During the six months ended September 30, 2012, the Fund did not utilize the LOC.
8. Interfund Lending
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other funds advised by subsidiaries of Federated Investors, Inc., may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating affiliated funds. As of September 30, 2012, there were no outstanding loans. During the six months ended September 30, 2012, the program was not utilized.
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Shareholder Expense Example (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or shareholder services fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2012 to September 30, 2012.
ACTUAL EXPENSES
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Beginning
Account Value
4/1/2012 		Ending
Account Value
9/30/2012 		Expenses Paid
During Period1
Actual:
Class A Shares $1,000 $1,052.80 $4.48
Class B Shares $1,000 $1,048.50 $8.73
Class C Shares $1,000 $1,048.50 $8.73
Class F Shares $1,000 $1,052.80 $4.48
Hypothetical (assuming a 5% return
before expenses):
Class A Shares $1,000 $1,020.71 $4.41
Class B Shares $1,000 $1,016.55 $8.59
Class C Shares $1,000 $1,016.55 $8.59
Class F Shares $1,000 $1,020.71 $4.41
1 Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows:
Class A Shares 0.87%
Class B Shares 1.70%
Class C Shares 1.70%
Class F Shares 0.87%
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Evaluation and Approval of Advisory Contract–May 2012
Federated Municpal Securities Fund, Inc. (the “Fund”)
Following a review and recommendation of approval by the Fund's independent directors, the Fund's Board reviewed and approved at its May 2012 meetings the Fund's investment advisory contract for an additional one-year term. The Board's decision regarding the contract reflects the exercise of its business judgment on whether to continue the existing arrangements.
In this connection, the Federated Funds' Board had previously appointed a Senior Officer, whose duties include specified responsibilities relating to the process by which advisory fees are to be charged to a Federated fund. The Senior Officer has the authority to retain consultants, experts, or staff as may be reasonably necessary to assist in the performance of his duties, reports directly to the Board, and may be terminated only with the approval of a majority of the independent members of the Board. The Senior Officer prepared and furnished to the Board an independent, written evaluation that covered topics discussed below (the “Evaluation”). The Board considered that Evaluation, along with other information, in deciding to approve the advisory contract.
The Board is also familiar with and considered judicial decisions concerning allegedly excessive investment advisory fees, which have indicated that the following factors may be relevant to an Adviser's fiduciary duty with respect to its receipt of compensation from a fund: the nature and quality of the services provided by the Adviser to a fund and its shareholders, including the performance and expenses of the fund and of comparable funds; the Adviser's cost of providing the services, including the profitability to the Adviser of providing advisory services to a fund; the extent to which the Adviser may realize “economies of scale” as a fund grows larger and, if such economies exist, whether they have been shared with a fund and its shareholders; any “fall-out financial benefits” that accrue to the Adviser because of its relationship with a fund (including research services received from brokers that execute fund trades and any fees paid to affiliates of the Adviser for services rendered to a fund); comparative fee structures, including a comparison of fees paid to the Adviser with those paid by similar funds; and the extent to which the Board members are fully informed about all facts the Board deems relevant to its consideration of the Adviser's services and fees. Consistent with these judicial decisions, the Board also considered management fees (including any components thereof) charged to institutional and other clients of the Adviser for what might be viewed as like services. The Board was aware of these factors and was guided by them in its review of the Fund's advisory contract to the extent it considered them to be appropriate and relevant, as discussed further below.
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The Board considered and weighed these circumstances in light of its substantial accumulated experience in governing the Fund and working with Federated on matters relating to the Federated funds, and was assisted in its deliberations by independent legal counsel. Throughout the year, and in connection with its May meetings, the Board requested and received substantial and detailed information about the Fund and the Federated organization that was in addition to the extensive materials that comprise and accompany the Senior Officer's Evaluation. Federated provided much of this information at each regular meeting of the Board, and furnished additional substantial information in connection with the May meeting at which the Board's formal review of the advisory contract occurred. At this May meeting, senior management of the Adviser also met with the independent directors and their counsel to discuss the materials presented and any other matters thought relevant by the Adviser or the directors. Between regularly scheduled meetings, the Board also received information on particular matters as the need arose. Thus, the Board's consideration of the advisory contract included review of the Senior Officer's Evaluation, accompanying data and additional information covering such matters as: the Adviser's investment philosophy, revenue, profitability, personnel and processes; investment and operating strategies; the Fund's short- and long-term performance (in absolute terms, both on a gross basis and net of expenses, as well as in relationship to its particular investment program and certain competitor or “peer group” funds and/or other benchmarks, as appropriate), and comments on the reasons for performance; the Fund's investment objectives; the Fund's expenses (including the advisory fee itself and the overall expense structure of the Fund, both in absolute terms and relative to similar and/or competing funds, with due regard for contractual or voluntary expense limitations); the use and allocation of brokerage commissions derived from trading the Fund's portfolio securities (if any); and the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates. The Board also considered the preferences and expectations of Fund shareholders; the entrepreneurial risk assumed by the Adviser in sponsoring the funds; the continuing state of competition in the mutual fund industry and market practices; the range of comparable fees for similar funds in the mutual fund industry; the Fund's relationship to the Federated family of funds which include a comprehensive array of funds with different investment objectives, policies and strategies which are available for exchange without the incurrence of additional sales charges; compliance and audit reports concerning the Federated funds and the Federated companies that service them (including communications from regulatory agencies), as well as Federated's responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated funds and/or Federated are responding to them. The Board's evaluation process is evolutionary. The criteria considered and the emphasis placed on relevant criteria change in recognition of changing circumstances in the mutual fund marketplace.
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36
While mindful that courts have cautioned against giving such comparisons too much weight, the Board has found the use of comparisons of the Fund's fees and expenses to other mutual funds with comparable investment programs to be relevant, given the high degree of competition in the mutual fund business. The Board focused on comparisons with other similar mutual funds more heavily than non-mutual fund products or services because it is believed that they are more relevant. For example, other mutual funds are the products most like the Fund, they are readily available to Fund shareholders as alternative investment vehicles, and they are the type of investment vehicle in fact chosen and maintained by the Fund's investors. The range of their fees and expenses therefore appears to be a generally reliable indication of what consumers have found to be reasonable in the precise marketplace in which the Fund competes. In this regard, the Senior Officer has reviewed Federated's fees for providing advisory services to products outside the Federated family of funds (e.g., institutional and separate accounts). He concluded that mutual funds and institutional accounts are inherently different products. Those differences include, but are not limited to, different types of targeted investors; being subject to different laws and regulations; different legal structures; different average account sizes; different associated costs; different portfolio management techniques made necessary by different cash flows; and portfolio manager time spent in review of securities pricing. The Senior Officer did not consider these fee schedules to be determinative in judging the appropriateness of mutual fund advisory contracts.
The Fund's ability to deliver competitive performance when compared to its peer group was also deemed to be relevant by the Board as a useful indicator of how the Adviser is executing the Fund's investment program, which in turn assisted the Board in reaching a conclusion that the nature, extent, and quality of the Adviser's investment management services were such as to warrant continuation of the advisory contract.
The Senior Officer reviewed information compiled by Federated, using data supplied by independent fund ranking organizations, regarding the performance of, and fees charged by, other mutual funds, noting his view that comparisons to fund peer groups are relevant in judging the reasonableness of proposed fees.
For the periods covered by the Evaluation, the Fund's performance for the one-year period was above the median of the relevant peer group, and the Fund's performance fell below the median of the relevant peer group for the three-year and five-year periods. The Board discussed the Fund's performance with the Adviser and recognized the efforts being undertaken by the Adviser. The Board will continue to monitor these efforts and the performance of the Fund.
The Board also received financial information about Federated, including information regarding the compensation and benefits Federated derived from its relationships with the Federated funds. This information covered not only the fees under the advisory contracts, but also fees received by Federated's
Semi-Annual Shareholder Report
37
subsidiaries for providing other services to the Federated funds under separate contracts (e.g., for serving as the Federated funds' administrator). The information also detailed any indirect benefit Federated may derive from its receipt of research services from brokers who execute Federated fund trades. In addition, the Board considered the fact that, in order for a fund to be competitive in the marketplace, Federated and its affiliates frequently waived fees and/or reimbursed expenses and have disclosed to fund investors and/or indicated to the Board their intention to do so in the future, where appropriate. Moreover, the Board receives regular reporting as to the institution or elimination of these voluntary waivers.
Federated furnished information, requested by the Senior Officer, that reported revenues on a fund-by-fund basis and made estimates of the allocation of expenses on a fund-by-fund basis, using allocation methodologies specified by the Senior Officer. The Senior Officer noted that, although they may apply consistent allocation processes, the inherent difficulties in allocating costs (and the unavoidable arbitrary aspects of that exercise) and the lack of consensus on how to allocate those costs may render such allocation information unreliable. The allocation information was considered in the analysis by the Board but was determined to be of limited use.
The Board and the Senior Officer also reviewed information compiled by Federated comparing profitability information for Federated to other publicly held fund management companies. In this regard, the Senior Officer noted the limited availability of such information, but nonetheless concluded that Federated's profit margins did not appear to be excessive.
The Senior Officer's Evaluation also discussed the notion of possible realization of “economies of scale” as a fund grows larger. The Board considered in this regard that the Adviser has made significant and long-term investments in areas that support all of the Federated funds, such as personnel and processes for the portfolio management, shareholder services, compliance, internal audit, and risk management functions; and systems technology; and that the benefits of these efforts (as well as any economies, should they exist) were likely to be enjoyed by the fund complex as a whole. Finally, the Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which (as discussed in the Senior Officer's Evaluation) is compounded by the lack of any common industry practice or general pattern with respect to structuring fund advisory fees with “breakpoints” that serve to reduce the fee as the fund attains a certain size. The Senior Officer did not recommend institution of breakpoints in pricing Federated's fund advisory services at this time.
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38
It was noted in the materials for the Board meeting that for the period covered by the Evaluation, the Fund's investment advisory fee, after waivers and expense reimbursements, if any, was above the median of the relevant peer group. The Board reviewed the fees and other expenses of the Fund with the Adviser and was satisfied that the overall expense structure of the Fund remained competitive. The Board will continue to monitor advisory fees and other expenses borne by the Fund.
The Senior Officer noted that, considering the totality of the circumstances, and all of the factors referenced within his Evaluation, he had concluded that, subject to comments and recommendations made within his Evaluation, his observations and the information accompanying the Evaluation supported a finding by the Board that the management fees for each of the funds was reasonable and that Federated appeared to provide appropriate advisory and administrative services to the Fund for the fees paid. Under these circumstances, no changes were recommended to, and no objection was raised to, the continuation of the Fund's advisory contract.
In its decision to continue an existing investment advisory contract, the Board was mindful of the potential disruptions of the Fund's operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew an advisory contract. In particular, the Board recognized that many shareholders have invested in the Fund on the strength of the Adviser's industry standing and reputation and with the expectation that the Adviser will have a continuing role in providing advisory services to the Fund. Thus, the Board's approval of the advisory contract reflected the fact that it is the shareholders who have effectively selected the Adviser by virtue of having invested in the Fund. The Board concluded that, in light of the factors discussed above, including the nature, quality and scope of the services provided to the Fund by the Adviser and its affiliates, continuation of the advisory contract was appropriate.
The Board based its decision to approve the advisory contract on the totality of the circumstances and relevant factors and with a view to past and future long-term considerations. Not all of the factors and considerations identified above were necessarily relevant to the Fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were relevant, the Board's decision to approve the contract reflects its determination that Federated's performance and actions provided a satisfactory basis to support the decision to continue the existing arrangements.
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39
Voting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available from Federated's website at FederatedInvestors.com. To access this information from the home page, select “All” under “Asset Classes.” Select a fund name and share class, if applicable, to go to the Fund Overview page. On the Fund Overview page, select the “Documents” tab. At the bottom of that page, select “Proxy Voting Record Report (Form N-PX).” Form N-PX filings are also available at the SEC's website at www.sec.gov.
Quarterly Portfolio Schedule
The Fund files with the SEC a complete schedule of its portfolio holdings, as of the close of the first and third quarters of its fiscal year, on “Form N-Q.” These filings are available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. (Call 1-800-SEC-0330 for information on the operation of the Public Reference Room.) You may also access this information from the “Products” section of Federated's website at FederatedInvestors.com. From the home page, select “All” under “Asset Classes.” Select a fund name and share class, if applicable, to go to the Fund Overview page. On the Fund Overview page, select the “Documents” tab. At the bottom of that page, select “Form N-Q.”
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Mutual funds are not bank deposits or obligations, are not guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This Report is authorized for distribution to prospective investors only when preceded or accompanied by the Fund's Prospectus, which contains facts concerning its objective and policies, management fees, expenses and other information.
IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY 
In an effort to reduce costs and avoid duplicate mailings, the Fund(s) intend to deliver a single copy of certain documents to each household in which more than one shareholder of the Fund(s) resides (so-called “householding”), as permitted by applicable rules. The Fund's “householding” program covers its/their Prospectus and Statement of Additional Information, and supplements to each, as well as Semi-Annual and Annual Shareholder Reports and any Proxies or information statements. Shareholders must give their written consent to participate in the “householding” program. The Fund is also permitted to treat a shareholder as having given consent (“implied consent”) if (i) shareholders with the same last name, or believed to be members of the same family, reside at the same street address or receive mail at the same post office box, (ii) the Fund gives notice of its intent to “household” at least sixty (60) days before it begins “householding” and (iii) none of the shareholders in the household have notified the Fund(s) or their agent of the desire to “opt out” of “householding.” Shareholders who have granted written consent, or have been deemed to have granted implied consent, can revoke that consent and opt out of “householding” at any time: shareholders who purchased shares through an intermediary should contact their representative; other shareholders may call the Fund at 1-800-341-7400.
Semi-Annual Shareholder Report
41
Federated Municipal Securities Fund, Inc.
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
CUSIP 313913105
CUSIP 313913204
CUSIP 313913303
CUSIP 313913402
8110104 (11/12)
Federated is a registered trademark of Federated Investors, Inc.
2012 ©Federated Investors, Inc.

Item 2. Code of Ethics

 

Not Applicable

Item 3. Audit Committee Financial Expert

 

Not Applicable

Item 4. Principal Accountant Fees and Services

 

Not Applicable

 

Item 5. Audit Committee of Listed Registrants

 

Not Applicable

 

Item 6. Schedule of Investments

 

(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.

 

(b) Not Applicable; Fund had no divestments during the reporting period covered since the previous Form N-CSR filing.

 

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

 

Not Applicable

 

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

 

Not Applicable

 

Item 10. Submission of Matters to a Vote of Security Holders

 

Not Applicable

 

Item 11. Controls and Procedures

 

(a) The registrant’s President and Treasurer 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-CSR.

 

(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 second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12. Exhibits

 

(a)(1) Code of Ethics- Not Applicable to this Report.

 

(a)(2) Certifications of Principal Executive Officer and Principal Financial Officer.

 

(a)(3) Not Applicable.

 

(b) Certifications pursuant to 18 U.S.C. Section 1350.

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Date November 21, 2012

 

 

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 November 21, 2012

 

 

By /S/ Richard A. Novak

 

Richard A. Novak, Principal Financial Officer

 

Date November 21, 2012

 

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N-CSR Item 12(a)(2) - Exhibits: Certifications

 

 

I, J. Christopher Donahue, certify that:

 

  1. I have reviewed this report on Form N-CSR of Federated Municipal Securities Fund, Inc. ("registrant");

 

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

 

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

 

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

 

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

 

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

 

    1. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

    1. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  1. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

    1. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

    1. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

 

Date: November 21, 2012

/S/ J. Christopher Donahue

J. Christopher Donahue, President - Principal Executive Officer

 

 

N-CSR Item 12(a)(2) - Exhibits: Certifications

 

 

I, Richard A. Novak, certify that:

 

  1. I have reviewed this report on Form N-CSR of Federated Municipal Securities Fund, Inc. ("registrant");

 

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

 

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

 

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

 

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

 

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

 

    1. evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

    1. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  1. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

    1. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

    1. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

 

 

Date: November 21, 2012

/S/ Richard A. Novak

Richard A. Novak, Treasurer - Principal Financial Officer

 

 

 EX-99.906CERT 6 cert906.htm

N-CSR Item 12(b) - Exhibits: Certifications

 

SECTION 906 CERTIFICATION

 

Pursuant to 18 U.S.C.§ 1350, the undersigned officers of Federated Municipal Securities Fund, Inc. (the “Registrant”), hereby certify, to the best of our knowledge, that the Registrant’s Report on Form N-CSR for the period ended September 30, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities and Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

 

Dated: November 21, 2012

 

/s/ J. Christopher Donahue

J. Christopher Donahue

Title: President, Principal Executive Officer

 

 

 

Dated: November 21, 2012

 

/s/ Richard A. Novak

Richard A. Novak

Title: Treasurer, Principal Financial Officer

 

This certification is being furnished solely pursuant to 18 U.S.C.§ 1350 and is not being filed as part of the Report or as a separate disclosure document.