N-CSR 1 d897353dncsr.htm MFS MUNICIPAL SERIES TRUST N-CSR MFS MUNICIPAL SERIES TRUST N-CSR
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-04096

MFS MUNICIPAL SERIES TRUST

(Exact name of registrant as specified in charter)

111 Huntington Avenue, Boston, Massachusetts 02199

(Address of principal executive offices) (Zip code)

Susan S. Newton

Massachusetts Financial Services Company

111 Huntington Avenue,

Boston, Massachusetts 02199

(Name and address of agents for service)

Registrant’s telephone number, including area code: (617) 954-5000

Date of fiscal year end: March 31

Date of reporting period: March 31, 2015

Table of Contents
ITEM 1. REPORTS TO STOCKHOLDERS.

Table of Contents

ANNUAL REPORT

March 31, 2015

 

LOGO

 

MFS® MUNICIPAL SERIES TRUST

For the states of:

Alabama, Arkansas, California, Georgia, Maryland, and Massachusetts

 

LOGO

 

MSTA-ANN

Table of Contents

MFS® MUNICIPAL SERIES TRUST

For the states of: Alabama, Arkansas, California, Georgia, Maryland, and Massachusetts

 

CONTENTS

 

Letter from the Chairman   1   
Portfolio composition   2   
Management review   8   
Performance summary   10   
Expense tables   16   
Portfolio of investments   18   
Statements of assets and liabilities   45   
Statements of operations   49   
Statements of changes in net assets   51   
Financial highlights   53   
Notes to financial statements   61   
Report of independent registered public accounting firm   71   
Trustees and officers   72   
Proxy voting policies and information   75   
Quarterly portfolio disclosure   75   
Further information   75   
Federal tax information   75   
MFS® privacy notice   76   
Contact information    back cover   

 

 

The report is prepared for the general information of shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.

 

NOT FDIC INSURED Ÿ MAY LOSE VALUE Ÿ NO BANK GUARANTEE

Table of Contents

LETTER FROM THE CHAIRMAN

 

LOGO

Dear Shareholders:

The global economy was in flux early in 2015. Despite a steadily improving labor market, harsh winter weather held back U.S. economic activity. A stronger U.S. dollar has also curtailed export demand and weakened the profits of U.S.-based multinationals.

In the wake of the launch of the European Central Bank’s quantitative easing program and the euro’s sharp decline, the eurozone economy is showing signs of recovery.

In Asia, China and Japan continue to struggle. Chinese manufacturing activity has weakened, and the People’s Bank of China is attempting to ward off further economic slowing through targeted action. Japan’s economy is at risk of sliding back after making initial progress towards its growth and inflation goals.

As always, active risk management is integral to how we at MFS® manage your investments. We use a collaborative process, sharing insights across asset classes, regions and economic sectors. Our global investment team uses a diversified, multidisciplinary, long-term approach.

Applying proven principles, such as asset allocation and diversification, can best serve investors over the long term. We are confident that this approach can help you as you work with your financial advisors to reach your goals in the years ahead.

Respectfully,

 

LOGO

Robert J. Manning

Chairman

MFS Investment Management

May 13, 2015

 

 

The opinions expressed in this letter are subject to change and may not be relied upon for investment advice. No forecasts can be guaranteed.

 

1

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PORTFOLIO COMPOSITION

 

MFS Alabama Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
Healthcare Revenue – Hospitals   20.0%   
State & Local Agencies   15.7%   
General Obligations – Schools   13.3%   
General Obligations – General Purpose   11.5%   
Water & Sewer Utility Revenue   9.4%   

 

Composition including fixed income credit quality (a)(i)    
AAA   6.7%   
AA   37.8%   
A   38.5%   
BBB   9.4%   
BB   2.6%   
Not Rated   5.4%   
Cash & Other   (0.4)%   

 

 

 

Portfolio facts (i)
Average Duration (d)   5.8   
Average Effective Maturity (m)   16.3 yrs.   
Jurisdiction (i)
Alabama   82.1%   
New York   2.4%   
Guam   2.3%   
California   2.1%   
Wisconsin   1.8%   
Massachusetts   1.6%   
U.S. Virgin Islands   1.6%   
Florida   0.9%   
New Hampshire   0.8%   
Colorado   0.7%   
Texas   0.7%   
Tennessee   0.6%   
Virginia   0.6%   
Illinois   0.6%   
Kentucky   0.5%   
Indiana   0.3%   
South Dakota   0.3%   
Michigan   0.3%   
Puerto Rico   0.2%   
 

 

(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.

From time to time Cash & Other may be negative due to timing of cash receipts and/or equivalent exposure from any derivative holdings.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

2

Table of Contents

Portfolio Composition – continued

 

MFS Arkansas Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
Universities – Colleges   20.5%   
Water & Sewer Utility Revenue   15.6%   
General Obligations – Schools   11.2%   
Healthcare Revenue – Hospitals   10.9%   
Sales & Excise Tax Revenue   10.3%   

 

Composition including fixed income credit quality (a)(i)    
AAA   4.4%   
AA   50.7%   
A   31.1%   
BBB   8.9%   
BB   0.7%   
B   0.7%   
CCC   0.4%   
Not Rated   1.8%   
Cash & Other   1.3%   

 

 

 

Portfolio facts (i)
Average Duration (d)   6.2   
Average Effective Maturity (m)   15.1 yrs.   
Jurisdiction (i)
Arkansas   79.1%   
Guam   3.9%   
New York   2.6%   
California   2.2%   
Massachusetts   1.4%   
Kentucky   1.2%   
Michigan   1.2%   
U.S. Virgin Islands   1.2%   
Wisconsin   1.1%   
Puerto Rico   1.0%   
Indiana   0.8%   
New Hampshire   0.6%   
Texas   0.5%   
Colorado   0.5%   
New Jersey   0.4%   
Illinois   0.4%   
Tennessee   0.3%   
Florida   0.3%   
 

 

(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

3

Table of Contents

Portfolio Composition – continued

 

MFS California Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
Healthcare Revenue – Hospitals   12.5%   
Tax Assessment   11.5%   
General Obligations – Schools   10.3%   
Universities – Colleges   10.3%   
State & Local Agencies   7.4%   

 

Composition including fixed income credit quality (a)(i)    
AAA   2.8%   
AA   23.6%   
A   47.2%   
BBB   13.4%   
BB   4.6%   
B   1.7%   
Not Rated   4.6%   
Cash & Other   2.1%   

 

 

 

Portfolio facts (i)
Average Duration (d)   6.8   
Average Effective Maturity (m)   17.4 yrs.   
Jurisdiction (i)
California   93.7%   
Guam   1.3%   
Illinois   1.1%   
Ohio   0.7%   
Pennsylvania   0.7%   
New Jersey   0.4%   
 

 

(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

4

Table of Contents

Portfolio Composition – continued

 

MFS Georgia Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
Universities – Colleges   18.4%   
Healthcare Revenue – Hospitals   17.3%   
Water & Sewer Utility Revenue   14.9%   
General Obligations – General Purpose   9.7%   
General Obligations – Schools   9.5%   

 

Composition including fixed income credit quality (a)(i)    
AAA   8.9%   
AA   38.1%   
A   37.7%   
BBB   10.4%   
BB   1.4%   
B   0.7%   
Not Rated   1.6%   
Cash & Other   1.2%   

 

 

 

Portfolio facts (i)
Average Duration (d)   6.2   
Average Effective Maturity (m)   15.7 yrs.   
Jurisdiction (i)
Georgia   80.3%   
Guam   2.6%   
California   2.0%   
Florida   1.4%   
U.S. Virgin Islands   1.4%   
New Jersey   1.4%   
New York   1.3%   
Tennessee   0.9%   
Illinois   0.9%   
Wisconsin   0.8%   
Texas   0.7%   
Puerto Rico   0.7%   
North Carolina   0.7%   
Kentucky   0.7%   
Michigan   0.7%   
New Hampshire   0.6%   
Virginia   0.6%   
Colorado   0.5%   
Indiana   0.3%   
Louisiana   0.2%   
South Dakota   0.1%   
 

 

(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

5

Table of Contents

Portfolio Composition – continued

 

MFS Maryland Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
Healthcare Revenue – Hospitals   23.7%   
General Obligations – General Purpose   16.1%   
Water & Sewer Utility Revenue   11.2%   
Universities – Colleges   6.9%   
Tax Assessment   4.3%   

 

Composition including fixed income credit quality (a)(i)    
AAA   18.2%   
AA   26.9%   
A   26.8%   
BBB   16.1%   
BB   2.4%   
B   1.2%   
CCC (o)   0.0%   
Not Rated   6.6%   
Cash & Other   1.8%   

 

 

 

Portfolio facts (i)
Average Duration (d)   6.2   
Average Effective Maturity (m)   14.6 yrs.   
Jurisdiction (i)
Maryland   77.3%   
Guam   2.4%   
Puerto Rico   2.1%   
Kentucky   2.0%   
U.S. Virgin Islands   1.7%   
District of Columbia   1.6%   
New Jersey   1.6%   
Tennessee   1.4%   
New York   1.4%   
California   1.2%   
Indiana   1.0%   
Illinois   0.8%   
Florida   0.8%   
Texas   0.6%   
New Hampshire   0.6%   
Colorado   0.6%   
Washington   0.5%   
Michigan   0.5%   
Mississippi   0.1%   
 
(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.
(o) Less than 0.1%.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

6

Table of Contents

Portfolio Composition – continued

 

MFS Massachusetts Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
Universities – Colleges   23.0%   
Healthcare Revenue – Hospitals   13.1%   
Miscellaneous Revenue – Other   9.7%   
General Obligations – General Purpose   8.5%   
Sales & Excise Tax Revenue   5.8%   

 

Composition including fixed income credit quality (a)(i)    
AAA   9.4%   
AA   40.7%   
A   26.6%   
BBB   13.7%   
BB   1.7%   
B   1.3%   
CCC (o)   0.0%   
Not Rated   4.1%   
Cash & Other   2.5%   

 

 

 

Portfolio facts (i)
Average Duration (d)   6.5   
Average Effective Maturity (m)   16.5 yrs.   
Jurisdiction (i)
Massachusetts   82.5%   
California   1.9%   
Illinois   1.7%   
New York   1.6%   
Guam   1.4%   
Kentucky   1.2%   
Florida   1.0%   
Tennessee   0.9%   
U.S. Virgin Islands   0.9%   
Wisconsin   0.8%   
Puerto Rico   0.6%   
New Jersey   0.5%   
Pennsylvania   0.5%   
Colorado   0.5%   
Texas   0.4%   
New Hampshire   0.4%   
Louisiana   0.3%   
Washington   0.3%   
South Dakota   0.1%   
 
(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.
(o) Less than 0.1%.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

7

Table of Contents

MANAGEMENT REVIEW

Summary of Results

For the twelve months ended March 31, 2015, Class A shares of each fund, at net asset value, outperformed the Barclays Municipal Bond Index. These included the municipal bond funds of Alabama, Arkansas, California, Georgia, Maryland, and Massachusetts. The performance for the individual funds and the benchmark are set forth in the Performance Summary.

Market Environment

A generally risk-friendly environment persisted from early in the period until mid-2014. While geopolitical tensions flared in the Middle East and Russia/Ukraine, any market setbacks were short-lived as improving economic growth in the US, coupled with prospects for easier monetary policy in regions with slowing growth, such as Japan, Europe and China, supported risk assets. For example, the European Central Bank (“ECB”) cut policy interest rates into negative territory and expectations were high for additional rate cuts and the announcement for non-conventional easing measures. Similarly, toward the middle of the period the Bank of Japan surprised markets with fresh stimulus measures given lackluster growth trends. The related decline in developed market government bond yields and credit spreads were also supportive for equity markets.

A dominant trend in the second half of the period was the ongoing rise in US equities alongside a decline in US bond yields. The uptrend in US corporate margins and profits continued throughout the second half of 2014, but a rising dollar and a sharp decline in commodity prices, particularly crude oil prices, negatively impacted credit markets, particularly US high yield and emerging market debt. The higher weightings of oil and gas credits in these asset classes resulted in widening spreads and increased volatility. Toward the end of the period, declining inflation and inflation expectations caused a mini-wave of global easing highlighted by the ECB’s decision to commence a potentially open-ended phase of quantitative easing (“QE”), supporting risk assets as well as government bond prices, while the US dollar continues to benefit from the perception that Federal Reserve (“Fed”) tightening was likely to occur later in 2015.

Municipal bonds generally produced solid results for the year ended March 31, 2015. Most forecasters had expected that US Treasury yields would rise during the period as the Fed wound down QE and prepared to tighten monetary policy, and that this would prove to be a headwind for municipal bond performance. Instead, longer Treasury yields fell sharply, while shorter maturities rose slightly. Many factors contributed to this surprising turn of events. Despite a weak reading at the end of the period, the US labor market made solid progress through most of the period, adding an average of 260,000 new jobs per month. Strong job gains failed to translate into markedly higher wages or inflationary pressures that could push the Fed to adopt a more aggressive stance on hiking rates. Slowing growth outside the US and disinflationary developments around the world – including a precipitous drop in oil prices – caused the market to push out its timetable for the first Fed Funds rate hike, as did disappointingly weak US economic activity during the first quarter of 2015. Moreover, softness in the US economy toward the end of the period led to increased dovishness from the Fed, as evidenced by downgraded forecasts for the Fed Funds rate, GDP growth, and inflation. Finally, favorable technical conditions kept downward pressure on Treasury yields. Lower Treasury yields not only allayed investors’ fears of higher interest rates, but also helped drive municipal bond returns.

Continued optimism about the health of the US economy, combined with a comparative dearth of new high-profile, headline-grabbing stories about troubled issuers kept investors relatively constructive on asset class fundamentals. Puerto Rico remained a source of worry, however. As the period ended, the risk that funding needs might not be met remained a threat, even with the Commonwealth’s efforts to bolster tax revenues. Detroit’s bankruptcy proceedings came to a close during the period with both pensioners and bondholders impaired, reinforcing concerns about the priority assigned to general obligation debt. In addition, a court ruling overturned legislation aimed at reforming Illinois’ underfunded public employee pension system, highlighting the challenges ahead as municipalities continue to grapple with the issue of unfunded pension liabilities. Nowhere did these challenges appear more acute than in Chicago, where burgeoning budget deficits attracted increased market and rating agency attention. This demonstrates the market is differentiating between those issuers who have taken steps toward fiscal sustainability and those with ongoing budget and pension challenges. While we expect to see continued headlines for select municipalities, on balance, municipal credit fundamentals improved over the period as state and local tax receipts benefited from a fifth year of economic expansion.

The period was marked by steady and moderate inflows to municipal bond funds as generally good performance attracted investors. New issuance surged in the first quarter of 2015. This large increase in supply, along with lower Treasury rates, caused high-quality municipals to underperform comparable maturity Treasuries as the period ended. Stable spreads in municipal credit enabled higher-yielding bonds to outperform higher-quality debt. The Treasury rally allowed longer-maturity bonds to solidly outperform shorter maturities. At the end of the period, municipal bonds appeared fairly valued to relatively inexpensive versus Treasuries, but yields remained quite low versus historical levels.

Factors Affecting Performance

The funds’ longer duration (d) stance relative to the Barclays Municipal Bond Index positively impacted relative performance as yields fell during the reporting period.

 

8

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Management Review – continued

 

The Barclays Municipal Bond Index is a broad-based index comprised of municipal bonds issued within the 50 states and the District of Columbia as well as U.S. territories and possessions such as Guam, Puerto Rico, and the Virgin Islands.

Among jurisdictions, overweight positions in municipal bonds of Guam were a source of positive performance across all funds. Security selection in municipal bonds of New York also benefited relative performance across all funds.

Across sectors, the general obligation, health, credit enhanced and education sectors were notable contributors to relative performance for all funds. Positive security selection in both “AA” and “BBB” rated (r) securities also benefited relative performance across all funds.

Respectfully,

Michael Dawson

Portfolio Manager

 

(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.
(r) Bonds rated “BBB”, “Baa”, or higher are considered investment grade; bonds rated “BB”, “Ba”, or below are considered non-investment grade. The sources for bond quality ratings are Moody’s Investors Service, Standard & Poor’s and Fitch, Inc. and are applied using the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). For securities which are not rated by any of the three agencies, the security is considered Not Rated.

The views expressed in this report are those of the portfolio manager only through the end of the period of the report as stated on the cover and do not necessarily reflect the views of MFS or any other person in the MFS organization. These views are subject to change at any time based on market or other conditions, and MFS disclaims any responsibility to update such views. These views may not be relied upon as investment advice or an indication of trading intent on behalf of any MFS portfolio. References to specific securities are not recommendations of such securities, and may not be representative of any MFS portfolio’s current or future investments.

 

9

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PERFORMANCE SUMMARY THROUGH 3/31/15

The following charts illustrate a representative class of each fund’s historical performance in comparison to its benchmark(s). Performance results include the deduction of the maximum applicable sales charge and reflect the percentage change in net asset value, including reinvestment of dividends and capital gains distributions. Each fund's results have been compared to the Barclays Municipal Bond Index, a market capitalization-weighted index that measures the performance of the tax-exempt bond market. However, while this index is considered the benchmark for the performance of municipal bond funds, it is comprised of municipal bonds issued within the 50 states and the District of Columbia as well as U.S. territories and possessions such as Guam, Puerto Rico, and the Virgin Islands, while each of the funds invests a large percentage of its assets in municipal issuers of the state that is in the fund’s name. The performance of other share classes will be greater than or less than that of the class depicted below. Benchmarks are unmanaged and may not be invested in directly. Benchmark returns do not reflect sales charges, commissions or expenses. (See Notes to Performance Summary.)

Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value fluctuate so your shares, when sold, may be worth more or less than the original cost; current performance may be lower or higher than quoted. The performance shown does not reflect the deduction of taxes, if any, that a shareholder would pay on fund distributions or the redemption of fund shares.

MFS Alabama Municipal Bond Fund

Growth of a Hypothetical $10,000 Investment

LOGO

Total Returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 2/01/90 7.37% 4.32% 4.25%  
  B 9/07/93 6.57% 3.56% 3.47%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With Initial Sales Charge (4.25%)

 2.81% 3.42% 3.79%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 2.57% 3.21% 3.47%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

 

10

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Performance Summary – continued

 

MFS Arkansas Municipal Bond Fund

Growth of a Hypothetical $10,000 Investment

LOGO

Total Returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 2/03/92 7.21% 3.82% 4.09%  
  B 9/07/93 6.40% 3.01% 3.29%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With Initial Sales Charge (4.25%)

 2.65% 2.93% 3.64%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 2.40% 2.66% 3.29%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

 

11

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Performance Summary – continued

 

MFS California Municipal Bond Fund

Growth of a Hypothetical $10,000 Investment

LOGO

Total Returns through 3/31/15

Average annual without sales charge

 

  Share Class Class inception date 1-yr 5-yr 10-yr  
  A 6/18/85 9.38% 5.93% 4.78%  
  B 9/07/93 8.55% 5.08% 3.98%  
  C 1/03/94 8.37% 4.96% 3.83%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With Initial Sales Charge (4.25%)

 4.73% 5.01% 4.32%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 4.55% 4.75% 3.98%  
 

C

With CDSC (1% for 12 months) (v)

 7.37% 4.96% 3.83%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

 

12

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Performance Summary – continued

 

MFS Georgia Municipal Bond Fund

Growth of a Hypothetical $10,000 Investment

LOGO

Total Returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 6/06/88 7.53% 4.45% 4.23%  
  B 9/07/93 6.70% 3.65% 3.47%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With Initial Sales Charge (4.25%)

 2.96% 3.54% 3.78%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 2.70% 3.30% 3.47%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

 

13

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Performance Summary – continued

 

MFS Maryland Municipal Bond Fund

Growth of a Hypothetical $10,000 Investment

LOGO

Total Returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 10/31/84 6.99% 4.22% 3.96%  
  B 9/07/93 6.19% 3.43% 3.21%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With Initial Sales Charge (4.25%)

 2.44% 3.32% 3.50%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 2.19% 3.07% 3.21%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

 

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Performance Summary – continued

 

MFS Massachusetts Municipal Bond Fund

Growth of a Hypothetical $10,000 Investment

LOGO

Total Returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 4/09/85 8.02% 4.47% 4.43%  
  B 9/07/93 7.18% 3.68% 3.69%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With Initial Sales Charge (4.25%)

 3.43% 3.57% 3.98%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 3.18% 3.33% 3.69%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

Benchmark Definition

Barclays Municipal Bond Index – a market capitalization-weighted index that measures the performance of the tax-exempt bond market.

It is not possible to invest directly in an index.

Notes to Performance Summary

Average annual total return represents the average annual change in value for each share class for the periods presented.

Performance results reflect any applicable expense subsidies and waivers in effect during the periods shown. Without such subsidies and waivers each fund’s performance results would be less favorable. Please see the prospectus and financial statements for complete details.

Performance results do not include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles and may differ from amounts reported in the financial highlights.

A portion of income may be subject to state, federal, and/or alternative minimum tax. Capital gains, if any, are subject to a capital gains tax.

From time to time the funds may receive proceeds from litigation settlements, without which performance would be lower.

 

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EXPENSE TABLES

Fund expenses borne by the shareholders during the period, October 1, 2014 through March 31, 2015

As a shareholder of the funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) on certain purchase or redemption payments, and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the funds and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period October 1, 2014 through March 31, 2015.

Actual Expenses

The first line for each share class in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid 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 line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each share class in the following tables provides information about hypothetical account values and hypothetical expenses based on each fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each fund and 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.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line for each share class in the tables 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 transactional costs were included, your costs would have been higher.

MFS ALABAMA MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.93%        $1,000.00        $1,027.17        $4.70   
  Hypothetical (h)     0.93%        $1,000.00        $1,020.29        $4.68   
B   Actual     1.68%        $1,000.00        $1,023.30        $8.47   
  Hypothetical (h)     1.68%        $1,000.00        $1,016.55        $8.45   

MFS ARKANSAS MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.74%        $1,000.00        $1,027.45        $3.74   
  Hypothetical (h)     0.74%        $1,000.00        $1,021.24        $3.73   
B   Actual     1.50%        $1,000.00        $1,023.57        $7.57   
  Hypothetical (h)     1.50%        $1,000.00        $1,017.45        $7.54   

 

  (h) 5% class return per year before expenses.
  (p) “Expenses Paid During Period” are equal to each class’s annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher.

 

16

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Expense Tables – continued

 

MFS CALIFORNIA MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.72%        $1,000.00        $1,035.24        $3.65   
  Hypothetical (h)     0.72%        $1,000.00        $1,021.34        $3.63   
B   Actual     1.48%        $1,000.00        $1,031.35        $7.50   
  Hypothetical (h)     1.48%        $1,000.00        $1,017.55        $7.44   
C   Actual     1.62%        $1,000.00        $1,030.49        $8.20   
  Hypothetical (h)     1.62%        $1,000.00        $1,016.85        $8.15   

MFS GEORGIA MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.95%        $1,000.00        $1,027.74        $4.80   
  Hypothetical (h)     0.95%        $1,000.00        $1,020.19        $4.78   
B   Actual     1.70%        $1,000.00        $1,023.80        $8.58   
  Hypothetical (h)     1.70%        $1,000.00        $1,016.45        $8.55   

MFS MARYLAND MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.95%        $1,000.00        $1,027.64        $4.80   
  Hypothetical (h)     0.95%        $1,000.00        $1,020.19        $4.78   
B   Actual     1.70%        $1,000.00        $1,023.81        $8.58   
  Hypothetical (h)     1.70%        $1,000.00        $1,016.45        $8.55   

MFS MASSACHUSETTS MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.84%        $1,000.00        $1,028.51        $4.25   
  Hypothetical (h)     0.84%        $1,000.00        $1,020.74        $4.23   
B   Actual     1.60%        $1,000.00        $1,024.55        $8.08   
  Hypothetical (h)     1.60%        $1,000.00        $1,016.95        $8.05   

 

  (h) 5% class return per year before expenses.
  (p) “Expenses Paid During Period” are equal to each class’s annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher.

Notes to Expense Table

For the MFS Massachusetts Municipal Bond Fund, each class with a Rule 12b-1 service fee is subject to a rebate of a portion of such fee. Such rebates are included in the expense ratios above. For Class A shares, this rebate reduced the expense ratio above by 0.02%. See Note 3 in the Notes to Financial Statements for additional information.

 

17

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS ALABAMA MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 99.2%             
    
Issuer    Shares/Par     Value ($)  
    
Airport Revenue - 2.4%                 
Birmingham, AL, Airport Authority Rev., AGM, 5.25%, 7/01/30    $ 1,000,000      $ 1,145,880   
Dallas and Fort Worth, TX, International Airport Rev., “B”, 5%, 11/01/44      70,000        78,223   
Dallas and Fort Worth, TX, International Airport Rev., “C”, 5%, 11/01/45      45,000        50,084   
             $ 1,274,187   
General Obligations - General Purpose - 11.4%           
Auburn, AL, “H”, 5.625%, 12/01/33    $ 1,000,000      $ 1,165,030   
Enterprise, AL, 5%, 2/01/29      250,000        270,182   
Florence, AL, “B”, 4%, 8/01/15      230,000        232,762   
Guam Government, “A”, 6.75%, 11/15/29      260,000        298,150   
Guam Government, “A”, 7%, 11/15/39      60,000        70,852   
Huntsville, AL, School Warrants, “C”, 5%, 11/01/30      1,000,000        1,183,550   
Jasper, AL, Warrants, 5%, 3/01/32      500,000        566,420   
Madison, AL, Refunding Warrants, 5.15%, 2/01/39      1,000,000        1,119,500   
Montgomery County, AL, Warrants, SYNCORA, 5%, 3/01/28      500,000        536,085   
State of California, 6%, 11/01/39      550,000        667,111   
             $ 6,109,642   
General Obligations - Schools - 13.2%           
Huntsville, AL, School Warrants, “B”, 5%, 9/01/29    $ 500,000      $ 567,245   
Huntsville, AL, School Warrants, “C”, 5%, 11/01/22      500,000        611,405   
Huntsville, AL, School Warrants, “C”, 5%, 11/01/29      200,000        237,556   
Jefferson County, AL, School Warrants, AGM, 5.5%, 2/15/20      1,750,000        1,755,705   
Lee County, AL, School Warrants, ASSD GTY, 4.75%, 2/01/29      880,000        955,126   
Madison County, AL, Board of Education, ASSD GTY, 5.125%, 9/01/34      1,000,000        1,110,150   
Moorpark, CA, Unified School District (Election of 2008), Capital Appreciation, “B”, AGM, 0%, 8/01/36      570,000        230,953   
Shelby County, AL, Board of Education Capital Outlay School Warrants (Ten Mill County Tax), 5%, 2/01/31      500,000        558,520   
Sumter County, AL, School Warrants, 5.2%, 2/01/39      1,000,000        1,068,590   
             $ 7,095,250   
Healthcare Revenue - Hospitals - 19.7%           
Alabama Special Care Facilities Financing Authority (Daughters of Charity), ETM, AMBAC, 5%, 11/01/25    $ 1,500,000      $ 1,506,060   
              
Issuer    Shares/Par     Value ($)  
Healthcare Revenue - Hospitals - continued           
    
Alabama Special Care Facilities Financing Authority Rev. (Ascension Health), BHAC, 5%, 11/15/39    $ 750,000      $ 795,705   
Alexander City, AL, Special Care Facilities Financing Authority Medical Facilities Rev., “A” (Russell Hospital Corp.), 5.75%, 12/01/36      250,000        254,200   
Birmingham, AL, Special Care Facilities Financing Authority Health Care Rev. (Children’s Hospital), ASSD GTY, 6%, 6/01/39      750,000        876,870   
Cullman County, AL, Health Care Authority (Cullman Regional Medical Center), “A”, 7%, 2/01/36      300,000        328,434   
East Alabama Health Care Authority, Health Care Facilities Rev., 5.25%, 9/01/36 (Put Date 9/01/18)      1,000,000        1,099,350   
Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 8/15/36      435,000        501,385   
Health Care Authority for Baptist Health, AL, “D”, 5%, 11/15/21      875,000        894,749   
Huntsville, AL, Health Care Authority Rev., “A”, 5%, 6/01/30      1,000,000        1,101,570   
Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 8/15/44      255,000        317,567   
Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 10/01/36      265,000        275,703   
Mobile, AL, Special Care Facilities Financing Authority Rev. (Infirmary Health System, Inc.), “A”, 5.25%, 2/01/30      500,000        560,520   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 10/01/27      370,000        420,572   
South Dakota Health & Educational Facilities Authority Rev. (Sanford Obligated Group), “B”, 5%, 11/01/34      85,000        96,339   
South Dakota Health & Educational Facilities Authority Rev. (Sanford Obligated Group), “B”, 5%, 11/01/44      55,000        61,857   
University of Alabama at Birmingham, AL, Hospital Rev., “A”, 5.25%, 9/01/25      500,000        558,905   
Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2/15/39      505,000        608,666   
Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Healthcare), 5.25%, 8/15/31      340,000        353,087   
             $ 10,611,539   
Healthcare Revenue - Long Term Care - 1.6%   
Pell City, AL, Special Care Facilities, Financing Authority Rev. (Noland Health Services, Inc.), 5%, 12/01/39    $ 750,000      $ 833,295   
 

 

18

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Industrial Revenue - Paper - 1.2%                 
Selma, AL, Industrial Development Board Rev., Gulf Opportunity Zone (International Paper Co.), “A”, 6.25%, 11/01/33    $ 250,000      $ 296,185   
Selma, AL, Industrial Development Board Rev., Gulf Opportunity Zone (International Paper Co.), “A”, 5.375%, 12/01/35      300,000        339,072   
             $ 635,257   
Miscellaneous Revenue - Other - 1.9%                 
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/40    $ 65,000      $ 70,047   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/44      95,000        101,959   
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “1”, 5%, 11/15/44      260,000        273,640   
New York Liberty Development Corp., Liberty Rev. (7 World Trade Center Project), 5%, 9/15/40      495,000        567,765   
             $ 1,013,411   
Port Revenue - 1.1%                 
Alabama Port Authority Docks Facility, 6%, 10/01/40    $ 500,000      $ 586,950   
Sales & Excise Tax Revenue - 3.0%                 
Baldwin County, AL, Board of Education, School Warrants, 5%, 6/01/32    $ 500,000      $ 584,270   
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6%, 1/15/41      325,000        373,025   
Massachusetts Bay Transportation Authority, Sales Tax Rev., “A”, 5%, 7/01/31      515,000        652,021   
             $ 1,609,316   
Single Family Housing - State - 0.7%                 
Alabama Housing Finance Authority, Single Family Mortgage Rev., “B”, GNMA, 5.375%, 10/01/33    $ 375,000      $ 394,534   
State & Local Agencies - 15.5%                 
Alabama Incentives Financing Authority Special Obligation, “A”, 5%, 9/01/29    $ 1,000,000      $ 1,135,960   
Alabama Public School & College Authority Rev., “A”, 5%, 2/01/26      500,000        607,640   
Alabama Public School & College Authority Rev., “A”, 5%, 5/01/29 (Prerefunded 5/01/19)      1,000,000        1,148,830   
Alabama Public School & College Authority Rev., “B”, 5%, 6/01/25      800,000        962,120   
Alabama Public School & College Authority Rev., “B”, 5%, 1/01/25      1,000,000        1,237,880   
Alabama Public School & College Authority Rev., “B”, 5%, 1/01/27      500,000        608,170   
Anniston, AL, Public Building Authority Rev. (Judicial Center Project), AGM, 5%, 3/01/32      500,000        552,975   
              
Issuer    Shares/Par     Value ($)  
    
State & Local Agencies - continued                 
Bessemer, AL, Public Educational Building Authority Rev. (DHR Building Project), “A”, ASSD GTY, 5%, 7/01/30    $ 385,000      $ 426,665   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, 5%, 6/01/30      35,000        40,063   
Los Angeles, CA, Municipal Improvement Corp. Lease Rev. (Real Property), “E”, 6%, 9/01/39      145,000        170,292   
Massachusetts College Building Authority Rev., “C”, 3%, 5/01/42      225,000        201,361   
Montgomery County, AL, Public Building Authority Rev., Warrants (Facilities Project), 5%, 3/01/27      1,050,000        1,254,172   
             $ 8,346,128   
Tax - Other - 1.8%                 
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24    $ 95,000      $ 106,010   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      30,000        33,280   
Virgin Islands Public Finance Authority Rev.,
“A -1”, 5%, 10/01/29		      65,000        70,264   
Virgin Islands Public Finance Authority Rev., “B”, 5%, 10/01/25      65,000        71,759   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, 5%, 10/01/29      400,000        439,008   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, 6%, 10/01/39      235,000        259,988   
             $ 980,309   
Toll Roads - 0.6%                 
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 6%, 1/01/37    $ 110,000      $ 128,004   
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 5.5%, 1/01/42      180,000        197,667   
             $ 325,671   
Universities - Colleges - 9.1%                 
Alabama State University Board of Education Rev. (Chattahoochee Valley Community College), ASSD GTY, 5%, 6/01/34    $ 1,300,000      $ 1,450,228   
Alabama State University Rev., General Tuition & Fee, ASSD GTY, 5.75%, 9/01/39      1,000,000        1,112,500   
Jacksonville State University, Tuition & Fee Rev., ASSD GTY, 5.125%, 12/01/38      1,000,000        1,111,830   
University of South Alabama, University Rev., AMBAC, 5%, 12/01/29      1,000,000        1,064,370   
University of South Alabama, University Rev., BHAC, 5%, 8/01/38      150,000        165,685   
             $ 4,904,613   
Universities - Secondary Schools - 0.5%           
La Vernia, TX, Higher Education Finance Corp. Rev. (Lifeschool of Dallas), “A”, 7.5%, 8/15/41    $ 190,000      $ 238,895   
 

 

19

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Utilities - Investor Owned - 0.1%                 
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.5%, 8/01/29 (Put Date 8/01/16)    $ 70,000      $ 73,853   
Utilities - Municipal Owned - 5.5%                 
Chatom, AL, Industrial Development Board Gulf Opportunity Zone (PowerSouth Energy), “A”, ASSD GTY, 5%, 8/01/37    $ 1,000,000      $ 1,129,200   
Foley, AL, Utilities Board Utilities Rev., AGM, 5%, 11/01/25 (Prerefunded 11/01/15)      1,000,000        1,027,950   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/24      265,000        316,802   
Guam Power Authority Rev., “A”, 5.5%, 10/01/40      230,000        258,830   
Long Island, NY, Power Authority, Electric Systems Rev., “A”, 6%, 5/01/33      130,000        152,166   
Puerto Rico Electric Power Authority Rev., “DDD”, AGM, 3.625%, 7/01/23      10,000        9,336   
Puerto Rico Electric Power Authority Rev., “DDD”, AGM, 3.65%, 7/01/24      50,000        46,380   
Puerto Rico Electric Power Authority Rev., “SS”, ASSD GTY, 4.375%, 7/01/30      5,000        4,579   
Puerto Rico Electric Power Authority Rev., “UU”, ASSD GTY, 4.25%, 7/01/27      30,000        28,086   
             $ 2,973,329   
Utilities - Other - 0.6%                 
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/19    $ 295,000      $ 335,197   
Water & Sewer Utility Revenue - 9.3%           
Bessemer, AL, Governmental Utilities Services Corp. Water Supply Rev., ASSD GTY, 5%, 6/01/39    $ 1,000,000      $ 1,073,440   
Birmingham, AL, Waterworks Board Water Rev., “A”, 5%, 1/01/30      500,000        578,475   
Birmingham, AL, Waterworks Board Water Rev., “A”, ASSD GTY, 5.125%, 1/01/34      750,000        837,705   
              
Issuer    Shares/Par     Value ($)  
    
Water & Sewer Utility Revenue - continued   
Cullman, AL, Utilities Board Water Rev., “A”, AGM, 5%, 9/01/35    $ 1,000,000      $ 1,138,350   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/29      45,000        50,976   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/35      45,000        50,405   
Jefferson County, AL, Sewer Rev. Warrants, Subordinate Lien, “D”, 5%, 10/01/21      300,000        338,595   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “C-7”, NATL, 5%, 7/01/32      15,000        16,614   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/35      10,000        11,101   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/37      20,000        22,169   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-6”, NATL, 5%, 7/01/36      20,000        21,954   
New York, NY, Municipal Water Finance Authority, Water & Sewer Systems Rev., “AA”, 5%, 6/15/44      270,000        309,633   
Scottsboro, AL, Waterworks Sewer & Gas Board Rev., 5%, 8/01/32      500,000        564,315   
             $ 5,013,732   
Total Municipal Bonds
(Identified Cost, $48,989,774)		            $ 53,355,108   
Money Market Funds - 0.8%                 
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      421,150      $ 421,150   
Total Investments
(Identified Cost, $49,410,924)		            $ 53,776,258   
Other Assets, Less Liabilities - (0.0)%        (10,850)   
Net Assets - 100.0%            $ 53,765,408   

See Portfolio Footnotes and Notes to Financial Statements

 

 

20

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS ARKANSAS MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 97.4%             
    
Issuer    Shares/Par     Value ($)  
    
Airport Revenue - 0.5%                 
Dallas and Fort Worth, TX, International Airport Rev., “B”, 5%, 11/01/44    $ 235,000      $ 262,605   
Dallas and Fort Worth, TX, International Airport Rev., “C”, 5%, 11/01/45      160,000        178,075   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, 5%, 12/01/44      95,000        105,609   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, BAM, 5%, 12/01/39      105,000        120,134   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/39      80,000        88,726   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/44      125,000        138,314   
             $ 893,463   
General Obligations - General Purpose - 5.7%   
Arkansas College Savings, Capital Appreciation, “A”, ETM, 0%, 6/01/17    $ 1,840,000      $ 1,809,217   
Arkansas Federal Highway Grant Anticipation & Tax Rev., 5%, 4/01/20      1,000,000        1,173,800   
Arkansas Federal Highway Grant Anticipation & Tax Rev., 5%, 4/01/21      2,000,000        2,403,780   
Arkansas Four-Lane Highway Construction & Improvement, 4%, 6/15/20      2,000,000        2,256,820   
Guam Government, “A”, 6.75%, 11/15/29      515,000        590,566   
Guam Government, “A”, 5.25%, 11/15/37      255,000        260,554   
Guam Government, “A”, 7%, 11/15/39      65,000        76,757   
State of California, 6%, 11/01/39      1,160,000        1,406,999   
             $ 9,978,493   
General Obligations - Schools - 11.1%   
Arkansas College Savings, Capital Appreciation, “B”, ETM, 0%, 6/01/15    $ 1,100,000      $ 1,099,527   
Arkansas Higher Education, 4%, 6/01/29      2,000,000        2,189,400   
Bentonville, AR, School District No. 6, “A”, 5%, 6/01/24      3,185,000        3,464,038   
Crittenden County, AR, Community College District, 4.6%, 2/01/35      285,000        286,616   
Crittenden County, AR, Community College District, 4.7%, 2/01/40      625,000        628,788   
Crittenden County, AR, Community College District, 4%, 2/01/42      1,450,000        1,526,212   
Northwest Arkansas Community College District, Capital Improvement, AMBAC, 5%, 5/15/28      1,380,000        1,388,128   
Pulaski County, AR, North Little Rock School District, “B”, 5%, 2/01/22      1,635,000        1,910,465   
Pulaski County, AR, North Little Rock School District, “B”, 5%, 2/01/23      1,730,000        2,021,470   
              
Issuer    Shares/Par     Value ($)  
    
General Obligations - Schools - continued   
Pulaski, AR, Special School District Construction, 5%, 2/01/35    $ 2,000,000      $ 2,007,200   
San Diego, CA, Unified School District (Election of 2008), Capital Appreciation, “C”, 0%, 7/01/35      2,100,000        977,907   
Springdale, AR, School District No. 050, “A”, 4.625%, 6/01/37      2,000,000        2,126,980   
             $ 19,626,731   
Healthcare Revenue - Hospitals - 10.8%   
Arkansas Development Finance Authority Hospital Rev. (Washington Regional Medical Center), “A”, 5%, 2/01/33    $ 1,645,000      $ 1,848,717   
Conway, AR, Hospital Rev. (Conway Regional Medical Center), 4.45%, 8/01/32      540,000        565,358   
Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 8/15/36      420,000        484,096   
Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 8/15/44 (Prerefunded 8/15/19)      510,000        635,134   
Independence County, AR, Public Health Education & Housing Facilities Board Rev. (White River Health Systems), 5.75%, 6/01/28      1,000,000        1,120,500   
Indiana Finance Authority Rev. (Sisters of St. Francis Health Services), 5.375%, 11/01/32      1,085,000        1,216,252   
Jefferson County, AR, Hospital Rev., Refunding (Regional Medical Center), AGM, 5%, 6/01/26      2,150,000        2,422,663   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 5.75%, 6/01/25      510,000        580,069   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 6/01/40      545,000        630,543   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 3/01/45      395,000        458,844   
Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 10/01/36      470,000        488,983   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 10/01/27      355,000        403,521   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6.125%, 10/01/39      490,000        552,470   
Pulaski County, AR, Hospital Rev. (Arkansas Children’s Hospital Foundation), AGM, 4%, 3/01/20      1,000,000        1,092,960   
 

 

21

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued   
Pulaski County, AR, Public Facilities Board Health Facilities Rev. (Carti Project), 5.5%, 7/01/43    $ 750,000      $ 838,958   
Pulaski, AR, Hospital Rev. (Arkansas Children’s Hospital), ASSD GTY, 5.5%, 3/01/34      750,000        852,308   
Pulaski, AR, Hospital Rev. (Arkansas Children’s Hospital), ASSD GTY, 5.5%, 3/01/39      1,375,000        1,558,659   
Royal Oak, MI, Hospital Finance Authority Rev. (William Beaumont Hospital), 5%, 9/01/39      1,245,000        1,389,980   
Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2/15/39 (Prerefunded 2/15/19)      990,000        1,193,227   
Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Healthcare), 5.25%, 8/15/31      675,000        700,981   
             $ 19,034,223   
Industrial Revenue - Paper - 0.1%   
Valparaiso, IN, Exempt Facilities Rev. (Pratt Paper LLC Project), 7%, 1/01/44    $ 100,000      $ 123,288   
Miscellaneous Revenue - Entertainment & Tourism - 1.7%   
Fayetteville, AR, Hotel, Motel and Restaurant Rev., BAM, 5%, 11/01/34    $ 2,525,000      $ 2,972,758   
Miscellaneous Revenue - Other - 1.0%   
New York Liberty Development Corp., Liberty Rev. (7 World Trade Center Project), 5%, 9/15/40    $ 1,615,000      $ 1,852,405   
Sales & Excise Tax Revenue - 10.1%           
Bentonville, AR, Sales & Use Tax, AMBAC, 4.375%, 11/01/25    $ 705,000      $ 762,239   
Bentonville, AR, Sales & Use Tax, 4%, 11/01/26      1,310,000        1,410,110   
Cabot , AR, Sales & Use Tax , 5%, 6/01/26      700,000        826,973   
Cabot ,AR, Sales & Use Tax, 5%, 6/01/27      1,300,000        1,522,898   
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6%, 1/15/41      760,000        872,305   
Conway, AR, Sales & Use Tax Rev., Capital Improvement, 4.5%, 5/01/35      1,150,000        1,264,310   
Conway, AR, Sales & Use Tax Rev., Capital Improvement, 4.5%, 5/01/30      850,000        942,183   
Crawford County, AR, Sales & Use Tax, AGM, 4%, 9/01/20      250,000        280,775   
Crawford County, AR, Sales & Use Tax, AGM, 4%, 9/01/21      560,000        633,002   
Fort Smith, AR, Sales & Use Tax, 5%, 5/01/23      380,000        460,492   
Fort Smith, AR, Sales & Use Tax, 5%, 5/01/24      2,040,000        2,405,894   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/17      210,000        229,937   
Massachusetts Bay Transportation Authority, Sales Tax Rev., “A-1”, 5.25%, 7/01/29      1,000,000        1,295,800   
              
Issuer    Shares/Par     Value ($)  
    
Sales & Excise Tax Revenue - continued   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 8/01/57    $ 415,000      $ 290,562   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., Capital Appreciation, 0%, 8/01/56      4,705,000        290,769   
Rogers, AR, Sales & Use Tax Rev., 5%, 11/01/23      1,000,000        1,173,710   
Springdale, AR, Sales & Use Tax Rev., 5%, 11/01/28      1,000,000        1,150,690   
Stuttgart, AR, Sales & Use Tax Rev., AGM, 5%, 6/01/32      1,840,000        2,061,941   
             $ 17,874,590   
Single Family Housing - State - 0.5%   
Arkansas Development Finance Authority Home Ownership Rev., Mortgage Backed Securities Program, “A”, GNMA, 4.85%, 7/01/27    $ 40,000      $ 40,987   
Arkansas Development Finance Authority Rev., Mortgage Backed Securities Program, “C”, GNMA, 5.625%, 1/01/35      95,000        96,682   
Arkansas Development Finance Authority, Mortgage Rev., “B”, GNMA, 4.85%, 7/01/31      570,000        571,459   
Arkansas Development Finance Authority, Single Family Mortgage Rev., “B”, GNMA, 5.7%, 7/01/28      175,000        175,114   
             $ 884,242   
State & Local Agencies - 2.0%                 
Arkansas Development Finance Authority Rev. (Donaghey Plaza Project), 5%, 6/01/34    $ 2,605,000      $ 2,947,610   
Arkansas Development Finance Authority Rev., Correctional Facilities, “A”, 5.125%, 5/15/34      500,000        558,875   
             $ 3,506,485   
Tax - Other - 5.3%                 
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24    $ 490,000      $ 546,786   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      65,000        72,106   
Little Rock, AR, Hotel & Restaurant Gross Receipts Tax Rev., 7.375%, 8/01/15      545,000        557,895   
Little Rock, AR, Hotel & Restaurant Gross Receipts Tax Rev., 5%, 7/01/34      3,000,000        3,426,690   
Little Rock, AR, Library Construction & Improvement Rev., 4%, 3/01/23      810,000        853,521   
Little Rock, AR, Library Construction & Improvement Rev., 4%, 3/01/24      1,685,000        1,766,065   
Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 10/01/29      135,000        145,932   
Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 10/01/39      150,000        161,037   
Virgin Islands Public Finance Authority Rev., “B”, 5%, 10/01/25      135,000        149,039   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, 5%, 10/01/29      940,000        1,031,669   
 

 

22

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
Tax - Other - continued                 
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, 6%, 10/01/39    $ 505,000      $ 558,697   
             $ 9,269,437   
Tobacco - 2.7%                 
Arkansas Development Finance Authority, Tobacco Settlement Rev. (Cancer Research Center Project), Capital Appreciation, AMBAC, 0%, 7/01/26    $ 2,440,000      $ 1,734,864   
Arkansas Development Finance Authority, Tobacco Settlement Rev. (Cancer Research Center Project), Capital Appreciation, AMBAC, 0%, 7/01/27      2,470,000        1,664,138   
Arkansas Development Finance Authority, Tobacco Settlement Rev. (Cancer Research Center Project), Capital Appreciation, AMBAC, 0%, 7/01/28      500,000        322,795   
Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.5%, 5/15/39      290,000        291,781   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.5%, 6/01/23      480,000        481,152   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 5%, 6/01/41      305,000        233,926   
             $ 4,728,656   
Toll Roads - 0.3%                 
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 7%, 12/31/38    $ 230,000      $ 287,003   
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 6.75%, 6/30/43      180,000        220,262   
             $ 507,265   
Transportation - Special Tax - 0.3%                 
Metropolitan Transportation Authority Rev., NY, “A”, 5%, 11/15/37    $ 490,000      $ 531,621   
Universities - Colleges - 20.2%                 
Arkansas State University, Auxiliary Enterprises Rev., 4.65%, 4/01/35    $ 1,000,000      $ 1,002,480   
Arkansas State University, Housing System Rev. (Jonesboro Campus), 4.5%, 3/01/31      2,500,000        2,729,300   
Arkansas State University, Housing System Rev. (Jonesboro Campus), “C”, AMBAC, 5%, 3/01/32      2,595,000        2,810,385   
Arkansas State University, Student Fee (Jonesboro Campus), “C”, AGM, 4.5%, 3/01/27      545,000        606,209   
Massachusetts Development Finance Agency Higher Education Rev. (Emerson College), “A”, 5%, 1/01/23      1,070,000        1,138,833   
New York Dormitory Authority Rev., 5.25%, 7/01/48      1,605,000        1,786,269   
              
Issuer    Shares/Par     Value ($)  
Universities - Colleges - continued   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.125%, 4/01/32    $ 85,000      $ 74,912   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.375%, 4/01/42      140,000        120,553   
Puerto Rico Industrial, Tourist, Medical, & Environmental Central Facilities (University of Sacred Heart), 4.375%, 10/01/31      60,000        49,219   
Puerto Rico Industrial, Tourist, Medical, & Environmental Central Facilities (University of Sacred Heart), 5%, 10/01/42      30,000        24,698   
Pulaski, AR, Student Tuition & Fee Rev. (Technical College), AGM, 4%, 4/01/24      1,000,000        1,083,390   
Pulaski, AR, Student Tuition & Fee Rev. (Technical College), 5%, 4/01/41      1,000,000        1,130,980   
University Arkansas Auxiliary Enterprises Rev., 5%, 12/01/29      605,000        700,759   
University Arkansas Auxiliary Enterprises Rev., “A”, 5%, 5/01/29      200,000        229,612   
University of Arkansas Facilities Rev. (UAMS Campus), 5%, 11/01/25      2,000,000        2,437,820   
University of Arkansas Facilities Rev. (UAMS Campus) , 5%, 11/01/22      505,000        614,792   
University of Arkansas Facilities Rev. (UAMS Campus) , 5%, 11/01/23      520,000        640,078   
University of Arkansas Facilities Rev. (UAMS Campus) , 5%, 10/01/25      780,000        949,658   
University of Arkansas Rev. (Fayetteville Campus), “A”, 5%, 11/01/21      1,310,000        1,573,913   
University of Arkansas Rev. (Fayetteville Campus), “A”, 5%, 11/01/26      1,000,000        1,158,860   
University of Arkansas Rev. (Fort Smith Campus), 5%, 12/01/28      860,000        971,869   
University of Arkansas Rev. (Student Fee-Phillps), 5.1%, 12/01/34      750,000        807,593   
University of Arkansas Rev. (Student Fee-Fort Smith Campus), 4%, 12/01/23      250,000        278,548   
University of Arkansas Rev. (Student Fee-Fort Smith Campus), 4%, 12/01/24      250,000        276,393   
University of Arkansas Rev. (Student Fee-Fort Smith Campus), 4%, 12/01/25      500,000        547,950   
University of Arkansas Rev. (Student Fee-Fort Smith Campus), 4%, 12/01/26      305,000        334,414   
University of Arkansas Rev., “A”, 5%, 11/01/33      1,000,000        1,115,030   
University of Arkansas, Administration Building Rev. , “A”, 5%, 11/01/38      1,000,000        1,115,030   
University of Arkansas, University Facilities Rev. (Pine Bluff Campus), “A”, AMBAC, 5%, 12/01/30      1,000,000        1,031,780   
University of Arkansas, University Rev. (Fayetteville Campus), “A”, 5%, 11/01/32      1,000,000        1,168,360   
 

 

23

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Universities - Colleges - continued   
University of Arkansas, University Rev. (Monticello Campus), 4%, 12/01/35    $ 600,000      $ 618,690   
University of Arkansas, University Rev. (UAMS Campus), 4.5%, 7/01/17      725,000        785,878   
University of Arkansas, University Rev. (UAMS Campus), 4.5%, 7/01/19      320,000        361,069   
University of Arkansas, University Rev., Var Fac-Fayetteville Campus, AMBAC, 5%, 11/01/36      2,500,000        2,677,550   
University of Central Arkansas Rev., “C”, ASSD GTY, 4.25%, 9/01/40      1,950,000        2,062,574   
University of Puerto Rico Rev., “Q”, 5%, 6/01/36      1,145,000        636,345   
             $ 35,651,793   
Universities - Dormitories - 0.3%                 
Arkansas Technical University, Housing Systems Rev., AMBAC, 5.2%, 12/01/26    $ 500,000      $ 515,840   
Utilities - Investor Owned - 1.0%                 
Independence County, AR, Pollution Control Rev. (Entergy Arkansas, Inc. Project), 2.375%, 1/01/21    $ 750,000      $ 772,875   
Independence County, AR, Pollution Control Rev. (Entergy Mississippi, Inc. Project), AMBAC, 4.9%, 7/01/22      1,000,000        1,007,760   
             $ 1,780,635   
Utilities - Municipal Owned - 8.2%                 
Benton, AR, Public Utility Rev., AMBAC, 5%, 9/01/31    $ 1,500,000      $ 1,602,945   
Benton, AR, Public Utility Rev., AGM, 5%, 9/01/32      1,130,000        1,280,053   
Benton, AR, Public Utility Rev., AMBAC, 5%, 9/01/36      1,500,000        1,602,660   
Benton, AR, Public Utility Rev., AGM, 5%, 9/01/36      1,165,000        1,312,279   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/30      2,805,000        3,240,364   
Guam Power Authority Rev., “A”, 5.5%, 10/01/30      450,000        510,557   
Guam Power Authority Rev., “A”, 5.5%, 10/01/40      790,000        889,027   
Long Island, NY, Power Authority, Electric Systems Rev., “A”, 6%, 5/01/33      245,000        286,775   
North Little Rock, AR, Electric Rev., “A”, ETM, NATL, 6.5%, 7/01/15      1,360,000        1,381,366   
North Little Rock, AR, Electric Rev., “B”, AGM, 5%, 7/01/21      1,040,000        1,168,274   
North Little Rock, AR, Electric Rev., “B”, AGM, 5%, 7/01/22      1,090,000        1,224,441   
             $ 14,498,741   
Utilities - Other - 0.3%                 
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/21    $ 300,000      $ 347,661   
              
Issuer    Shares/Par     Value ($)  
    
Utilities - Other - continued                 
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/22    $ 155,000      $ 180,609   
             $ 528,270   
Water & Sewer Utility Revenue - 15.3%   
Arkansas Community Public Water Systems Authority Rev., 5%, 10/01/32    $ 1,020,000      $ 1,156,833   
Arkansas Development Finance Authority, Capital Improvement Rev., Revolving Fund Loan, “C”, 5%, 6/01/22      1,500,000        1,807,853   
Arkansas Development Finance Authority, Capital Improvement Rev., Revolving Fund Loan, “C”, 5%, 6/01/23      795,000        949,850   
Arkansas Development Finance Authority, Capital Improvement Rev., Revolving Fund Loan, “C”, 5%, 6/01/24      1,000,000        1,186,990   
Arkansas Development Finance Authority, Capital Improvement Rev., Revolving Fund Loan, “C”, 5%, 6/01/25      1,500,000        1,771,275   
Central Arkansas Water Rev., 5%, 10/01/22      1,215,000        1,483,539   
Central Arkansas Water Rev., 5%, 10/01/23      1,275,000        1,577,405   
Fort Smith, AR, Water & Sewer Rev., AGM, 4.5%, 10/01/21      1,545,000        1,795,182   
Fort Smith, AR, Water & Sewer Rev., AGM, 4.5%, 10/01/22      455,000        522,891   
Fort Smith, AR, Water & Sewer Rev., AGM, 5%, 10/01/32      2,000,000        2,229,300   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/29      140,000        158,593   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/35      140,000        156,817   
Hot Springs, AR, Wastewater Rev., 4%, 12/01/19      510,000        563,198   
Hot Springs, AR, Wastewater Rev., 5%, 12/01/20      500,000        583,855   
Hot Springs, AR, Wastewater Rev., 5%, 12/01/21      650,000        765,895   
Hot Springs, AR, Wastewater Rev., ASSD GTY, 4.625%, 12/01/37      1,260,000        1,363,333   
Little Rock, AR, Sewer Rev., 5.5%, 10/01/30      750,000        849,248   
Little Rock, AR, Sewer Rev., 5.75%, 10/01/38      1,000,000        1,142,270   
Little Rock, AR, Sewer Rev., “A”, AGM, 4.375%, 6/01/33      750,000        810,113   
Little Rock, AR, Sewer Rev., “C”, AGM, 5%, 10/01/37      3,000,000        3,317,130   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “C-7”, NATL, 5%, 7/01/32      50,000        55,380   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/35      30,000        33,303   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/37      75,000        83,132   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-6”, NATL, 5%, 7/01/36      65,000        71,351   
 

 

24

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Water & Sewer Utility Revenue - continued   
Rogers, AR, Sewer Rev., AMBAC, 5%, 2/01/37    $ 1,000,000      $ 1,063,790   
Wasco, CA, Semitropic Improvement District (Semitropic Water Storage District), “A”, 5%, 12/01/38      1,325,000        1,509,202   
             $ 27,007,728   
Total Municipal Bonds
(Identified Cost, $161,968,659)		            $ 171,766,664   
Money Market Funds - 2.2%             
Issuer    Shares/Par     Value ($)  
    
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      3,861,499      $ 3,861,499   
Total Investments
(Identified Cost, $165,830,158)		            $ 175,628,163   
Other Assets, Less Liabilities - 0.4%        714,312   
Net Assets - 100.0%            $ 176,342,475   

See Portfolio Footnotes and Notes to Financial Statements

 

 

25

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS CALIFORNIA MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 96.7%  
    
Issuer    Shares/Par     Value ($)  
    
Airport Revenue - 5.6%                 
Chicago, IL, O’Hare International Airport Rev., Third Lien, “A”, 5.625%, 1/01/35    $ 780,000      $ 901,789   
Los Angeles, CA, Department of Airports Rev. (Los Angeles International), “A”, 5%, 5/15/29      3,000,000        3,490,740   
Orange County, CA, Airport Rev., “A”, 5%, 7/01/31      1,310,000        1,482,177   
San Diego County, CA, Regional Airport Authority Rev., “A”, 5%, 7/01/21      1,500,000        1,742,280   
San Francisco, CA, City & County Airports Commission, International Airport Rev., “A”, 5%, 5/01/31      850,000        953,700   
San Francisco, CA, City & County Airports Commission, International Airport Rev., “D”, 5%, 5/01/25      2,000,000        2,369,780   
San Jose, CA, Airport Rev., “A”, BHAC, 5.5%, 3/01/23      2,345,000        2,535,461   
San Jose, CA, Airport Rev., “A-2”, 5.25%, 3/01/34      2,560,000        2,873,037   
             $ 16,348,964   
General Obligations - General Purpose - 7.1%   
Guam Government, “A”, 6.75%, 11/15/29    $ 85,000      $ 97,472   
Guam Government, “A”, 5.25%, 11/15/37      815,000        832,751   
Guam Government, “A”, 7%, 11/15/39      95,000        112,183   
State of California, 5%, 11/01/21      2,485,000        3,006,552   
State of California, 5%, 8/01/34      2,200,000        2,470,798   
State of California, 5.25%, 4/01/35      2,545,000        2,968,768   
State of California, 6%, 11/01/39      3,000,000        3,638,790   
State of California, 5.5%, 3/01/40      3,670,000        4,317,498   
State of California, 5.25%, 11/01/40      2,775,000        3,270,032   
             $ 20,714,844   
General Obligations - Schools - 10.3%   
Beaumont, CA, Unified School District (Election of 2008), Capital Appreciation, “C”, AGM, 0%, 8/01/40    $ 5,315,000      $ 1,846,006   
Beaumont, CA, Unified School District (Election of 2008), Capital Appreciation, “C”, AGM, 0%, 8/01/44      4,600,000        1,333,816   
Beverly Hills, CA, Unified School District (Election of 2008), Capital Appreciation, 0%, 8/01/29      4,335,000        2,821,001   
Chabot-Las Positas, CA, Community College (Election of 2004), “B”, AMBAC, 5%, 8/01/30 (Prerefunded 8/01/16)      1,090,000        1,152,381   
Colton, CA, Joint Union School District (Election of 2001), Capital Appreciation, “C”, FGIC, 0%, 2/01/32      1,000,000        412,900   
Colton, CA, Joint Union School District (Election of 2001), Capital Appreciation, “C”, FGIC, 0%, 2/01/33      3,000,000        1,173,060   
   
Issuer    Shares/Par     Value ($)  
    
General Obligations - Schools - continued   
Folsom Cordova, CA, Unified School District (Election of 2012), “A”, 5%, 10/01/38    $ 2,465,000      $ 2,812,614   
Garvey, CA, School District (Election of 2004), Capital Appreciation, AGM, 0%, 8/01/31      2,120,000        1,096,061   
Lake Tahoe, CA, Unified School District (Election of 2008), Capital Appreciation, AGM, 0%, 8/01/45      870,000        471,671   
Los Angeles, CA, Unified School District, “B”, 5%, 7/01/22      1,000,000        1,226,120   
Mendocino Lake, CA, Community College District Rev. (Election of 2006), Capital Appreciation, “B”, AGM, 0%, 8/01/32      1,570,000        783,556   
Moorpark, CA, Unified School District (Election of 2008), Capital Appreciation, “A”, ASSD GTY, 0%, 8/01/33      500,000        230,030   
Moreland, CA, School District (Election of 2002), Capital Appreciation, “B”, FGIC, 0%, 8/01/28      1,440,000        896,026   
Napa Valley, CA, Unified School District (Election of 2006), Capital Appreciation, “A”, 0%, 8/01/29      3,385,000        2,052,799   
San Bernardino, CA, City Unified School District, “A”, 5%, 8/01/23      600,000        733,488   
San Diego, CA, Unified School District (Election of 2008), Capital Appreciation, “G”, 0%, 7/01/34      1,235,000        518,305   
San Joaquin, CA, Delta Community College District (Election of 2004), Capital Appreciation, “B”, AGM, 0%, 8/01/18      2,350,000        2,228,411   
San Jose, CA, Evergreen Community College District (Election of 2010), “A”, 5%, 8/01/41      1,235,000        1,413,062   
San Mateo County, CA, Community College District (Election of 2001), Capital Appreciation, “A”, NATL, 0%, 9/01/21      4,300,000        3,812,638   
Santa Monica, CA, Community College District (Election of 2002), Capital Appreciation, “C”, NATL, 0%, 8/01/27      2,000,000        1,099,520   
Victor, CA, Elementary School District (Election of 2001), Capital Appreciation, “B”, 0%, 8/01/28      2,755,000        1,696,419   
             $ 29,809,884   
Healthcare Revenue - Hospitals - 12.4%   
California Health Facilities Financing Authority Rev. (Balance Providence), 6.5%, 10/01/38    $ 1,720,000      $ 2,048,486   
California Health Facilities Financing Authority Rev. (Catholic Healthcare West), “A”, 6%, 7/01/29      1,500,000        1,768,740   
California Health Facilities Financing Authority Rev. (Children’s Hospital of Orange County), 6.25%, 11/01/29      2,000,000        2,400,560   
 

 

26

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued  
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued   
California Health Facilities Financing Authority Rev. (Marshall Medical Center), 5%, 11/01/33    $ 750,000      $ 854,663   
California Health Facilities Financing Authority Rev. (Providence Health & Services), “B”, 5.5%, 10/01/39      1,000,000        1,164,430   
California Health Facilities Financing Authority Rev. (Providence Health & Services), “C”, 6.5%, 10/01/33      1,500,000        1,786,470   
California Health Facilities Financing Authority Rev. (Providence Health & Services), “C”, 6.5%, 10/01/38 (Prerefunded 10/01/18)      30,000        35,729   
California Statewide Communities Development Authority Rev. (Community Hospital of the Monterey Peninsula), 6%, 6/01/33      1,250,000        1,532,175   
California Statewide Communities Development Authority Rev. (Enloe Medical Center), CALHF, 6.25%, 8/15/33      2,000,000        2,304,740   
California Statewide Communities Development Authority Rev. (Enloe Medical Center), “A”, CALHF, 5.5%, 8/15/23      1,000,000        1,145,890   
California Statewide Communities Development Authority Rev. (John Muir Health), 5.125%, 7/01/39      1,000,000        1,116,730   
California Statewide Communities Development Authority Rev. (Loma Linda University Medical Center), “A”, 5.5%, 12/01/54      1,650,000        1,842,506   
California Statewide Communities Development Authority Rev. (Santa Ynez Valley Cottage Hospital), 5.25%, 11/01/30      1,740,000        2,004,532   
California Statewide Communities Development Authority Rev. (Sutter Health), “A”, 5%, 8/15/32      390,000        446,503   
California Statewide Communities Development Authority Rev. (Trinity Health Corp.), 5%, 12/01/41      2,550,000        2,874,054   
Madera County, CA, COP (Children’s Hospital Central California), 5.375%, 3/15/36      3,000,000        3,392,160   
Palomar Pomerado Health Care District, CA, COP, 6.75%, 11/01/39      1,805,000        1,999,760   
San Buenaventura, CA, Rev. (Community Memorial Health System), 7.5%, 12/01/41      1,000,000        1,231,260   
Santa Clara County, CA, Financing Authority Rev. (El Camino Hospital), AMBAC, 5.125%, 2/01/41      2,550,000        2,694,764   
Washington Township, CA, Health Care District Rev., “A”, 6.25%, 7/01/39      1,000,000        1,159,460   
West Contra Costa, CA, Healthcare District, AMBAC, 5.5%, 7/01/29      2,000,000        2,004,900   
             $ 35,808,512   
   
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Long Term Care - 3.9%   
ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Episcopal Senior Communities), 6.125%, 7/01/41    $ 850,000      $ 981,963   
ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Eskaton Properties, Inc.), 5%, 11/15/35      1,270,000        1,352,258   
California Health Facilities Financing Authority Rev. (Northern California Presbyterian Homes and Services, Inc.), 5%, 7/01/34      700,000        800,121   
California Health Facilities Financing Authority Rev. (Northern California Presbyterian Homes and Services, Inc.), 5%, 7/01/39      1,000,000        1,139,300   
California Statewide Communities Development Authority Rev. (899 Charleston Project), “A”, 5.25%, 11/01/44      1,405,000        1,439,493   
California Statewide Communities Development Authority Rev. (American Baptist Homes of the West), 6.25%, 10/01/39      1,500,000        1,705,140   
California Statewide Communities Development Authority Rev. (Episcopal Communities & Services for Seniors Obligated Group), 5%, 5/15/47      1,785,000        1,933,708   
California Statewide Communities Development Authority Rev. (The Terraces at San Joaquin Gardens), “A”, 6%, 10/01/42      750,000        813,000   
Eden Township, CA, Healthcare District, COP, 6.125%, 6/01/34      1,090,000        1,182,781   
             $ 11,347,764   
Miscellaneous Revenue - Entertainment & Tourism - 0.2%   
Agua Caliente Band of Cahuilla Indians, CA, Rev., 6%, 7/01/18 (n)    $ 620,000      $ 616,869   
Miscellaneous Revenue - Other - 2.7%   
ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Jackson Lab), 5.75%, 7/01/37 (Prerefunded 7/01/15)    $ 4,115,000      $ 4,254,499   
California Infrastructure & Economic Development Bank Rev. (Walt Disney Family Museum), 5.25%, 2/01/33      1,340,000        1,469,015   
California Statewide Communities Development Authority Rev. (Buck Institute for Research on Aging), AGM, 5%, 11/15/44      1,865,000        2,126,156   
             $ 7,849,670   
Sales & Excise Tax Revenue - 1.1%   
Los Angeles County, CA, Metropolitan Transportation Authority Sales Tax Rev., “A”, 5%, 7/01/20    $ 2,750,000      $ 3,284,793   
Single Family Housing - State - 3.2%   
California Housing Finance Agency Rev. (Home Mortgage), “E”, 4.75%, 2/01/30    $ 1,760,000      $ 1,782,405   
California Housing Finance Agency Rev. (Home Mortgage), “G”, 4.95%, 8/01/23      2,000,000        2,068,320   
 

 

27

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued  
Issuer    Shares/Par     Value ($)  
    
Single Family Housing - State - continued   
California Housing Finance Agency Rev. (Home Mortgage), “I”, 4.7%, 8/01/26    $ 1,500,000      $ 1,510,395   
California Housing Finance Agency Rev. (Home Mortgage), “L”, 5.45%, 8/01/33      3,240,000        3,384,796   
California Housing Finance Agency Rev. (Home Mortgage), “L”, FNMA, 5.5%, 8/01/38      455,000        463,286   
             $ 9,209,202   
State & Agency - Other - 0.4%                 
Pasadena, CA, COP, (Old Pasadena Parking Facilities Project), 6.25%, 1/01/18    $ 970,000      $ 1,051,189   
State & Local Agencies - 7.3%                 
Banning, CA, COP, Water Systems Improvement Project, ETM, AMBAC, 8%, 1/01/19    $ 385,000      $ 430,834   
California Public Works Board Lease Rev. (Judicial Council Projects), “A”, 5%, 3/01/28      2,120,000        2,467,341   
California Public Works Board Lease Rev., Department of Education (Riverside Campus), 6%, 4/01/26      2,000,000        2,373,700   
California Public Works Board Lease Rev., Department of General Services, 6.25%, 4/01/34      1,500,000        1,791,255   
California Public Works Board Lease Rev., Department of Justice, “D”, 5.25%, 11/01/20      1,565,000        1,571,166   
Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.925%, 6/01/37      2,320,000        1,964,019   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., FGIC, 5%, 6/01/35      1,745,000        1,757,808   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A”, 5%, 6/01/34      2,000,000        2,304,620   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A”, AGM, 4.55%, 6/01/22      3,000,000        3,284,340   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, FGIC, 5%, 6/01/35      2,100,000        2,116,737   
San Diego, CA, Public Facilities Financing Authority Lease Rev. (Master Refunding Project), “A”, 5.25%, 3/01/40      1,000,000        1,122,940   
             $ 21,184,760   
Tax - Other - 0.2%                 
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24    $ 445,000      $ 496,571   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      145,000        160,853   
             $ 657,424   
   
Issuer    Shares/Par     Value ($)  
    
Tax Assessment - 11.4%                 
Concord, CA, Redevelopment Successor Agency Tax Allocation Refunding (Contra Costa County), BAM, 5%, 3/01/22    $ 520,000      $ 619,206   
Fontana, CA, Redevelopment Agency Tax Allocation (Jurupa Hills Redevelopment Project), “A”, 5.5%, 10/01/27      3,350,000        3,400,217   
Glendale, CA, Redevelopment Agency, Tax Allocation Rev. (Central Glendale Redevelopment Project), 5.5%, 12/01/24      1,750,000        1,845,988   
Huntington Beach, CA, Community Facilities District Special Tax (Grand Coast Resort), 5.125%, 9/01/31      1,000,000        1,141,550   
Irvine, CA, Limited Obligation Improvement (Reassessment District #12-1), 5%, 9/02/23      340,000        401,509   
Jurupa, CA, Community Facilities Services District, Special Tax (Eastvale Area District #31), “A”, 5%, 9/01/37      1,000,000        1,112,390   
Lake Elsinore, CA, Public Financing Authority Rev., 5%, 9/01/35      1,000,000        1,103,610   
Lee Lake, CA, Public Financing Authority Senior Lien Rev., “A”, 5.125%, 9/01/35      1,000,000        1,113,700   
Los Angeles County, CA, Redevelopment Refunding Authority Tax Allocation Rev. “D”, 5%, 9/01/22      340,000        404,811   
Los Angeles County, CA, Redevelopment Refunding Authority Tax Allocation Rev. “D”, 5%, 9/01/23      340,000        406,045   
Los Angeles County, CA, Redevelopment Refunding Authority Tax Allocation Rev. (Hollywood/North Hollywood Project), “A”, 5%, 7/01/21      2,300,000        2,738,472   
North Natomas, CA, Community Facilities District Special Tax, “4-E”, 5.25%, 9/01/33      840,000        950,922   
Pittsburg, CA, Redevelopment Successor Agency, Tax Allocation (Los Medanos Community Development Project), AGM, 5%, 8/01/28      650,000        758,043   
Pittsburg, CA, Redevelopment Successor Agency, Tax Allocation (Los Medanos Community Development Project), AGM, 5%, 8/01/29      1,350,000        1,567,134   
Rancho Cucamonga, CA, Community Facilities District Special Tax, 5.25%, 9/01/33      1,000,000        1,153,370   
Rancho Cucamonga, CA, Redevelopment Agency Tax Allocation (Successor Agency to The), AGM, 5%, 9/01/32      2,625,000        3,048,176   
Riverside County, CA, Redevelopment Agency, Tax Allocation, “A”, AGM, 5%, 10/01/34      1,385,000        1,586,614   
San Diego, CA, Redevelopment Agency, Tax Allocation (Centre City), “A”, AMBAC, 5.25%, 9/01/25      2,360,000        2,423,342   
San Diego, CA, Redevelopment Agency, Tax Allocation (Centre City), “B”, AMBAC, 5.3%, 9/01/20      1,250,000        1,252,125   
 

 

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Portfolio of Investments – continued

 

Municipal Bonds - continued  
Issuer    Shares/Par     Value ($)  
    
Tax Assessment - continued                 
San Francisco, CA, City & County Redevelopment Financing Authority, Tax Allocation (Mission Bay North Redevelopment), “C”, 6.375%, 8/01/32    $ 1,000,000      $ 1,158,130   
San Francisco, CA, City & County Redevelopment Financing Authority, Tax Allocation (Mission Bay North Redevelopment), “C”, 6.5%, 8/01/39      1,000,000        1,165,020   
San Francisco, CA, City & County Redevelopment Successor Agency, Tax Allocation (Mission Bay South Public Improvements), “A”, 5%, 8/01/43      750,000        834,458   
Santa Cruz County, CA, Redevelopment Agency Tax Allocation Rev., 5%, 9/01/22      1,360,000        1,619,243   
Santa Cruz County, CA, Redevelopment Agency Tax Allocation Rev., 5%, 9/01/23      1,000,000        1,194,250   
             $ 32,998,325   
Tobacco - 2.4%                 
Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 6%, 6/01/42    $ 1,080,000      $ 902,837   
Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 6.5%, 6/01/47      1,195,000        1,060,503   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 6/01/47      1,915,000        1,612,334   
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28      1,800,000        2,144,196   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 5%, 6/01/41      1,505,000        1,154,290   
             $ 6,874,160   
Toll Roads - 0.7%   
Riverside County, CA, Transportation Commission, Toll Rev., “A”, 5.75%, 6/01/44    $ 1,680,000      $ 1,951,572   
Universities - Colleges - 10.1%                 
California Educational Facilities Authority Rev., 5%, 2/01/17    $ 545,000      $ 570,452   
California Educational Facilities Authority Rev., 5%, 2/01/26 (Prerefunded 2/01/17)      325,000        351,484   
California Educational Facilities Authority Rev. (Claremont Graduate University), “A”, 6%, 3/01/33      1,500,000        1,692,780   
California Educational Facilities Authority Rev. (Dominican University of California), 5%, 12/01/25      800,000        846,720   
California Educational Facilities Authority Rev. (Dominican University of California), 5%, 12/01/36      1,150,000        1,205,879   
California Educational Facilities Authority Rev. (Pitzer College), 6%, 4/01/40      3,000,000        3,598,320   
California Educational Facilities Authority Rev. (University of San Francisco), 6.125%, 10/01/30      1,760,000        2,181,978   
   
Issuer    Shares/Par     Value ($)  
    
Universities - Colleges - continued   
California Educational Facilities Authority Rev. (University of The Pacific), 5.25%, 11/01/29    $ 1,265,000      $ 1,459,772   
California Educational Facilities Authority Rev., ETM, 5%, 2/01/17      140,000        150,686   
California Municipal Finance Authority Rev. (Azusa Pacific University Project), “B”, 5%, 4/01/35      1,655,000        1,800,276   
California Municipal Finance Authority Rev. (Biola University), 5.8%, 10/01/28      2,000,000        2,211,160   
California Municipal Finance Authority Rev. (University of La Verne), “A”, 6.125%, 6/01/30      1,500,000        1,768,935   
California Municipal Finance Authority Rev. (University of La Verne), “A”, 6.25%, 6/01/40      1,500,000        1,755,330   
California Public Works Board Lease Rev. (The Regents of the University of California), 5%, 4/01/34      1,500,000        1,733,100   
California Public Works Board Lease Rev. (The Regents of the University of California), 5%, 12/01/28      2,125,000        2,606,185   
California State University Rev., “A”, 5%, 11/01/24      2,130,000        2,537,703   
California Statewide Communities Development Authority Rev. (Lancer Plaza Project), 5.875%, 11/01/43      1,270,000        1,369,238   
Oakland, CA, Joint Powers Financing Authority Rev., “A-1”, ASSD GTY, 5.25%, 1/01/17      1,375,000        1,484,368   
             $ 29,324,366   
Universities - Dormitories - 1.5%   
California Statewide Communities Development Authority Rev. (Lancer Educational Student Housing Project), 5.625%, 6/01/33    $ 2,000,000      $ 2,067,600   
California Statewide Communities Development Authority Rev. (Student Housing, SUCI East Campus), 6%, 5/15/40      2,000,000        2,209,700   
             $ 4,277,300   
Universities - Secondary Schools - 1.6%   
California Municipal Finance Authority Rev. (Partnerships to Uplift Communities Project), “A”, 5%, 8/01/32    $ 825,000      $ 867,306   
California School Finance Authority, School Facility Rev. (Kipp LA Projects), “A”, 5%, 7/01/34      530,000        565,118   
California School Finance Authority, School Facility Rev. (Kipp LA Projects), “A”, 5.125%, 7/01/44      470,000        497,833   
California Statewide Communities Development Authority, School Facility Rev. (Alliance for College-Ready Public Schools), “A”, 6.375%, 7/01/47      1,270,000        1,379,919   
 

 

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Portfolio of Investments – continued

 

Municipal Bonds - continued  
Issuer    Shares/Par     Value ($)  
    
Universities - Secondary Schools - continued   
California Statewide Communities Development Authority, School Facility Rev. (Aspire Public Schools), 6.125%, 7/01/46    $ 1,300,000      $ 1,398,501   
             $ 4,708,677   
Utilities - Cogeneration - 0.4%   
California Pollution Control Financing Authority, Water Furnishing Rev. (Poseidon Resources Desalination Project), 5%, 11/21/45    $ 675,000      $ 733,448   
California Pollution Control Financing Authority, Water Furnishing Rev. (San Diego County Water Desalination Project Pipeline), 5%, 11/21/45      350,000        363,633   
             $ 1,097,081   
Utilities - Investor Owned - 0.7%   
California Pollution Control Financing Authority, Water Facilities Rev. (American Water Capital Corp. Project), 5.25%, 8/01/40    $ 2,000,000      $ 2,155,720   
Utilities - Municipal Owned - 4.8%           
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/39    $ 230,000      $ 266,954   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/44      260,000        300,383   
Imperial, CA, Irrigation District Electric Rev., “B”, 5%, 11/01/25      1,015,000        1,180,212   
Imperial, CA, Irrigation District Electric Rev., “B”, 5%, 11/01/26      1,245,000        1,447,649   
Los Angeles, CA, Department of Water & Power Rev. (Power System), “B”, 5%, 7/01/43      2,890,000        3,272,029   
Sacramento, CA, Municipal Utility District Rev., “X”, 5%, 8/15/25      2,130,000        2,549,802   
Tuolumne Wind Project Authority Rev. (Tuolomne Co.), “A”, 5.625%, 1/01/29      2,000,000        2,312,360   
Vernon, CA, Electric System Rev., “A”, 5.5%, 8/01/41      2,130,000        2,446,369   
             $ 13,775,758   
Utilities - Other - 2.4%   
California M-S-R Energy Authority Gas Rev., “A”, 7%, 11/01/34    $ 1,750,000      $ 2,476,023   
Long Beach, CA, Bond Finance Authority Natural Gas Purchase Rev., “A”, 5.25%, 11/15/22      2,210,000        2,579,424   
Southern California Public Power Authority (Natural Gas Project No. 1), “A”, 5%, 11/01/33      1,655,000        1,956,988   
             $ 7,012,435   
   
Issuer    Shares/Par     Value ($)  
    
Water & Sewer Utility Revenue - 6.3%   
California Department of Water Resources Rev. (Central Valley Project Water System), “AM”, 5%, 12/01/24    $ 3,500,000      $ 4,327,995   
California Semitropic Water Storage Improvement Rev., “A”, N, 5%, 12/01/27      460,000        550,671   
California Semitropic Water Storage Improvement Rev., “A”, N, 5%, 12/01/28      2,540,000        3,012,364   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.625%, 7/01/40      525,000        585,779   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/29      410,000        464,452   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/35      410,000        459,249   
Madera, CA, Financing Authority, Irrigation Rev., 6.5%, 1/01/40      2,560,000        2,997,043   
Oxnard, CA, Financing Authority, Wastewater Rev., AGM, 5%, 6/01/30      1,660,000        1,894,276   
Oxnard, CA, Financing Authority, Wastewater Rev., AGM, 5%, 6/01/31      415,000        471,801   
San Diego, CA, Public Facilities Financing Authority Sewer Rev., “A”, 5%, 5/15/28      350,000        402,539   
San Francisco, CA, Public Utilities Commission Water Rev., “A”, 5%, 11/01/28      1,000,000        1,208,520   
Soquel Creek, CA, Water District, COP, 5%, 3/01/43      1,715,000        1,915,363   
             $ 18,290,052   
Total Municipal Bonds
(Identified Cost, $253,580,202)		            $ 280,349,321   
Money Market Funds - 5.0%                 
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      14,490,081      $ 14,490,081   
Total Investments
(Identified Cost, $268,070,283)		            $ 294,839,402   
Other Assets, Less Liabilities - (1.7)%        (4,916,008)   
Net Assets - 100.0%            $ 289,923,394   

See Portfolio Footnotes and Notes to Financial Statements

 

 

30

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS GEORGIA MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 97.6%             
    
Issuer    Shares/Par     Value ($)  
    
Airport Revenue - 2.4%   
Atlanta, GA, Airport Rev., “B”, 5%, 1/01/33    $ 1,000,000      $ 1,148,720   
Dallas and Fort Worth, TX, International Airport Rev., “B”, 5%, 11/01/44      75,000        83,810   
Dallas and Fort Worth, TX, International Airport Rev., “C”, 5%, 11/01/45      55,000        61,213   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, 5%, 12/01/44      30,000        33,350   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, BAM, 5%, 12/01/39      35,000        40,045   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/39      25,000        27,720   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/44      40,000        44,260   
             $ 1,439,118   
General Obligations - General Purpose - 9.6%   
Atlanta & Fulton County, GA, Recreation Authority Park Improvement, “A”, 5%, 12/01/32    $ 500,000      $ 584,270   
DeKalb County, GA, General Obligation, 4%, 1/01/17      1,000,000        1,059,270   
Guam Government, “A”, 6.75%, 11/15/29      185,000        212,145   
Guam Government, “A”, 5.25%, 11/15/37      100,000        102,178   
Guam Government, “A”, 7%, 11/15/39      25,000        29,522   
Gwinnett County, GA, Development Authority Rev. (Civic & Cultural Center), 4%, 9/01/21      510,000        573,164   
Hall County and Gainesville, GA, Hospital Authority Rev. (Northeast Georgia Health System, Inc.), “B”, 5%, 2/15/33      500,000        557,235   
Lagrange-Troup County, GA, Hospital Authority Rev., 5.5%, 7/01/38      500,000        555,205   
State of California, 6%, 11/01/39      420,000        509,431   
State of Georgia, “E”, 5%, 7/01/16      1,000,000        1,058,850   
Villa Rica, GA, Publice Facilities Authority Rev. (Water and Sewerage Project), 5%, 3/01/39      500,000        577,060   
             $ 5,818,330   
General Obligations - Schools - 9.5%   
Cherokee County, GA, School System, 5%, 2/01/33    $ 500,000      $ 592,075   
Cherokee County, GA, School System, “A”, 5%, 8/01/21      1,000,000        1,201,380   
Forsyth County, GA, School District, 5%, 2/01/18      610,000        682,377   
Gwinnett County, GA, School District, 5%, 2/01/21      1,000,000        1,199,440   
Gwinnett County, GA, School District, 5%, 2/01/29      1,000,000        1,227,480   
              
Issuer    Shares/Par     Value ($)  
    
General Obligations - Schools - continued   
Jefferson, GA, School District, “A”, 5.25%, 2/01/29    $ 500,000      $ 589,765   
Moorpark, CA, Unified School District (Election of 2008), Capital Appreciation, “B”, AGM, 0%, 8/01/36      660,000        267,419   
             $ 5,759,936   
Healthcare Revenue - Hospitals - 17.0%   
Brunswick, GA, Hospital Authority Rev. (Glynn-Brunswick Memorial Hospital), 5.625%, 8/01/34    $ 750,000      $ 835,688   
Clarke County, GA, Hospital Authority Rev. (Athens Regional Medical Center Project), 5%, 1/01/32      1,000,000        1,139,030   
Cobb County, GA, Kennestone Hospital Authority Rev. (Wellstar Health System, Inc.), “B”, AMBAC, 6.25%, 4/01/34      500,000        591,680   
Dalton, GA, Development Authority Rev. (Hamilton Health Care System), 5%, 8/15/28      500,000        564,975   
DeKalb County, GA, Hospital Authority Rev. (DeKalb Medical Center, Inc.), 6.125%, 9/01/40      500,000        553,145   
DeKalb County, GA, Private Hospital Authority Rev. Anticipation Certificates (Children’s Healthcare), 5.25%, 11/15/39      750,000        870,758   
Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 8/15/36      350,000        403,414   
Fulton County, GA, Development Authority Rev. (Piedmont Healthcare), “A”, 5.25%, 6/15/37      700,000        777,546   
Georgia Medical Center Hospital Authority Rev. (Columbus Regional Healthcare System, Inc.), ASSD GTY, 6.5%, 8/01/38      300,000        343,626   
Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 8/15/44 (Prerefunded 8/15/19)      200,000        249,072   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.25%, 7/01/31      45,000        52,911   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.375%, 7/01/41      65,000        76,161   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 6/01/40      200,000        231,392   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 3/01/45      135,000        156,820   
Miami-Dade County, FL, Health Facilities Authority Hospital Rev. (Variety Children’s Hospital), “A”, 6%, 8/01/30      45,000        53,087   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 10/01/27      130,000        147,768   
 

 

31

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6.125%, 10/01/39    $ 180,000      $ 202,948   
North Carolina Medical Care Commission, Hospital Rev. (The North Carolina Baptist Hospitals, Inc.), 5.25%, 6/01/29      355,000        403,507   
Richmond County, GA, Development Authority Rev., Capital Appreciation, ETM, 0%, 12/01/21      225,000        201,465   
Richmond County, GA, Hospital Authority Rev. Anticipation Certificates (University Health Services, Inc. Project), 5.5%, 1/01/36      750,000        841,470   
South Dakota Health & Educational Facilities Authority Rev. (Sanford Obligated Group), “B”, 5%, 11/01/44      60,000        67,480   
Thomasville, GA, Hospital Authority Rev. Anticipation Certificates (John D. Archbold Memorial Hospital), 5.125%, 11/01/30      500,000        566,595   
Thomasville, GA, Hospital Authority Rev. Anticipation Certificates (John D. Archbold Memorial Hospital), 5.375%, 11/01/40      500,000        567,770   
Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2/15/39      385,000        464,033   
             $ 10,362,341   
Healthcare Revenue - Long Term Care - 1.4%   
Georgia Medical Center Hospital Authority Rev. (Spring Harbor Green Island Project), 5.25%, 7/01/37    $ 200,000      $ 202,670   
Hall County and Gainesville, GA, Development Authority Retirement Community Rev. (ACTS Retirement), 6.625%, 11/15/39      200,000        230,460   
Savannah, GA, Economic Development Authority Rev., Capital Appreciation, “C”, ETM, 0%, 12/01/21      500,000        447,700   
             $ 880,830   
Industrial Revenue - Environmental Services - 0.9%   
Savannah, GA, Economic Development Authority, Solid Waste Disposal Rev. (Georgia Waste Management Project), “A”, 5.5%, 7/01/16    $ 500,000      $ 529,940   
Industrial Revenue - Paper - 1.1%   
Rockdale County, GA, Development Authority Project Rev. (Visy Paper Project), “A”, 6.125%, 1/01/34    $ 150,000      $ 153,881   
Savannah, GA, Economic Development Pollution (Union Camp Corp.), 6.15%, 3/01/17      500,000        533,645   
             $ 687,526   
Miscellaneous Revenue - Other - 1.9%   
Florida Citizens Property Insurance Corp., “A-1”, 5%, 6/01/20    $ 285,000      $ 331,749   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/40      75,000        80,823   
              
Issuer    Shares/Par     Value ($)  
    
Miscellaneous Revenue - Other - continued   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/44    $ 110,000      $ 118,058   
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “1”, 5%, 11/15/44      300,000        315,738   
New York, NY, Industrial Development Agency, Airport Facilities Rev. (Transportation Infrastructure Properties LLC), 5%, 7/01/28      310,000        342,352   
             $ 1,188,720   
Sales & Excise Tax Revenue - 1.7%   
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6.5%, 1/15/30    $ 265,000      $ 314,452   
Guam Government Business Privilege Tax Rev., “A”, 5.25%, 1/01/36      170,000        190,341   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/16      65,000        69,315   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/17      70,000        76,646   
Metropolitan Atlanta, GA, Rapid Transit Authority Rev., “B”, AGM, 5%, 7/01/37      250,000        269,863   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 8/01/57      140,000        98,021   
             $ 1,018,638   
Single Family Housing - Local - 0.9%                 
Atlanta, GA, Urban Residential Financing Authority, Multifamily Housing Rev. (Ginnie Mae Collateralized - Amal Heights), GNMA, 4.9%, 5/20/40    $ 500,000      $ 534,325   
Single Family Housing - State - 0.6%                 
California Housing Finance Agency Rev. (Home Mortgage), “I”, 4.7%, 8/01/26    $ 300,000      $ 302,079   
Georgia Housing & Finance Authority Rev., Single Family Mortgage, “B-2”, 4.5%, 12/01/24      90,000        91,232   
             $ 393,311   
State & Agency - Other - 2.8%                 
Carroll City-County, GA, Hospital Authority Rev. (Tanner Medical Center), 5%, 7/01/40    $ 500,000      $ 559,035   
Floyd County, GA, Hospital Authority Rev. Anticipation Certificates (Floyd Medical Center Project), “B”, 5%, 7/01/32      1,000,000        1,130,790   
             $ 1,689,825   
State & Local Agencies - 2.1%                 
Georgia Municipal Association, Inc. (Riverdale Public Purpose Project), ASSD GTY, 5.5%, 5/01/38    $ 1,000,000      $ 1,139,380   
Los Angeles, CA, Municipal Improvement Corp. Lease Rev. (Real Property), “E”, 6%, 9/01/39      115,000        135,059   
             $ 1,274,439   
 

 

32

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Tax - Other - 1.5%                 
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24    $ 75,000      $ 83,692   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      25,000        27,733   
Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 10/01/29      50,000        54,049   
Virgin Islands Public Finance Authority Rev., “B”, 5%, 10/01/25      50,000        55,200   
Virgin Islands Public Finance Authority Rev., “B”, AGM, 5%, 10/01/25      140,000        159,477   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, AGM, 5%, 10/01/25      135,000        155,084   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, 5%, 10/01/29      190,000        208,529   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, 6%, 10/01/39      180,000        199,139   
             $ 942,903   
Tax Assessment - 0.5%                 
Atlanta, GA, Tax Allocation (Eastside Project), “B”, 5.6%, 1/01/30    $ 150,000      $ 151,673   
Atlanta, GA, Tax Allocation (Princeton Lakes Project), 5.5%, 1/01/31      125,000        126,095   
             $ 277,768   
Tobacco - 1.3%                 
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28    $ 235,000      $ 279,937   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.75%, 6/01/34      90,000        68,785   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 5%, 6/01/41      335,000        256,935   
New Jersey Tobacco Settlement Financing Corp., Capital Appreciation, “1-B”, 0%, 6/01/41      840,000        204,994   
             $ 810,651   
Toll Roads - 0.9%                 
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 7%, 12/31/38    $ 80,000      $ 99,827   
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 6.75%, 6/30/43      60,000        73,421   
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 6%, 1/01/37      120,000        139,640   
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 5.5%, 1/01/42      190,000        208,649   
             $ 521,537   
Transportation - Special Tax - 0.3%                 
Commonwealth of Puerto Rico Highway & Transportation Authority Rev., “CC”, AGM, 5.5%, 7/01/28    $ 185,000      $ 199,269   
              
Issuer    Shares/Par     Value ($)  
    
Universities - Colleges - 18.2%                 
Athens, GA, Housing Authority Rev. (University of Georgia East Campus Funding), 5.25%, 6/15/35    $ 500,000      $ 567,125   
Athens-Clarke County, GA, Unified Government Development Authority, Educational Facilities Rev., Convertible Capital Appreciation, 5%, 6/15/24      250,000        274,280   
Athens-Clarke County, GA, Unified Government Development Authority, Educational Facilities Rev., Convertible Capital Appreciation, 5%, 6/15/31      250,000        274,410   
Atkinson-Coffee County, GA, Joint Development Authority Rev. (SGC Real Estate Foundation LLC), ASSD GTY, 5.25%, 6/01/34      500,000        542,920   
Atlanta, GA, Development Authority Educational Facilities Rev. (Science Park LLC), 5%, 7/01/32      500,000        538,455   
Atlanta, GA, Development Authority Educational Facilities Rev. (Science Park LLC), 5%, 7/01/39      500,000        537,760   
Bleckley-Dodge County, GA, Student Housing Facilities Rev. (Middle Georgia College), 5.25%, 7/01/38      500,000        550,795   
Cobb County, GA, Development Authority, Dining Hall Lease Rev. (KSU Dining Hall), ASSD GTY, 5.75%, 7/15/39      1,000,000        1,129,680   
Cobb County, GA, Development Authority, Sports & Recreation Facilities Lease Rev. (Kennesaw State University Foundation), AGM, 5%, 7/15/35      750,000        849,008   
Dahlonega, GA, Downtown Development Authority Rev. (North Georgia PHD LLC), ASSD GTY, 5.25%, 7/01/34      500,000        563,165   
Dekalb Newton & Gwinnett Counties, GA, Joint Development Authority Rev. (GGC Foundation LLC), 6%, 7/01/34      500,000        581,195   
Fulton County, GA, Development Authority Rev. (Georgia Tech Foundation Funding), SYNCORA, 5%, 6/01/32      500,000        537,830   
Fulton County, GA, Development Authority Rev. (Spelman College), 5%, 6/01/28      500,000        586,530   
Georgia Higher Education Facilities Authority Rev. (Real Estate Foundation), 6%, 6/15/34      300,000        339,678   
Marietta, GA, Development Facilities Authority Rev. (Life University), 7%, 6/15/30      100,000        106,730   
Marietta, GA, Development Facilities Authority Rev. (Life University), 7%, 6/15/39      100,000        106,138   
New Jersey Educational Facilities Authority Rev. (University of Medicine & Dentistry), “B”, ETM, 6%, 12/01/17      275,000        304,664   
Pinellas County, FL, Educational Facilities Authority Rev. (Barry University), 6%, 10/01/41      65,000        74,172   
Private Colleges & Universities, GA, Authority Rev. (Agnes Scott College), 5%, 6/01/24      500,000        575,310   
Private Colleges & Universities, GA, Authority Rev. (Mercer University), “C”, 5.25%, 10/01/27      350,000        396,946   
 

 

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Universities - Colleges - continued           
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.125%, 4/01/32    $ 25,000      $ 22,033   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.375%, 4/01/42      45,000        38,749   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (International American University of Puerto Rico Project), 5%, 10/01/31      55,000        55,314   
Richmond County, GA, Development Authority Rev. (Georgia Regents University Academic Research Center Project), AGM, 5%, 12/15/32      325,000        376,990   
Savannah, GA, Economic Development Authority Rev. (AASU Student Union LLC), ASSD GTY, 5.125%, 6/15/39      500,000        551,565   
Savannah, GA, Economic Development Authority Rev. (SSU Community Development I LLC Project), ASSD GTY, 5.5%, 6/15/35      500,000        575,815   
             $ 11,057,257   
Universities - Secondary Schools - 0.1%   
North Texas Education Finance Corp., Education Rev. (Uplift Education), “A”, 5.125%, 12/01/42    $ 75,000      $ 82,413   
Utilities - Investor Owned - 0.3%                 
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.5%, 8/01/29 (Put Date 8/01/16)    $ 160,000      $ 168,806   
Utilities - Municipal Owned - 4.7%           
Georgia Municipal Electric Authority Power Rev., “A”, NATL, 6.5%, 1/01/20    $ 855,000      $ 961,302   
Georgia Municipal Gas Authority Rev. (Gas Portfolio III Project), “S”, 5%, 10/01/25      500,000        586,215   
Georgia Municipal Gas Authority Rev. (Gas Portfolio III Project), “S”, 5%, 10/01/26      500,000        581,385   
Guam Power Authority Rev., “A”, 5.5%, 10/01/30      160,000        181,531   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/39      50,000        58,034   
Guam Power Authority Rev., “A”, 5.5%, 10/01/40      260,000        292,591   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/44      60,000        69,319   
Long Island, NY, Power Authority, Electric Systems Rev., “A”, 6%, 5/01/33      100,000        117,051   
             $ 2,847,428   
              
Issuer    Shares/Par     Value ($)  
    
Utilities - Other - 3.2%                 
Georgia Main Street Natural Gas, Inc., Gas Project Rev., “A”, 5%, 3/15/22    $ 910,000      $ 1,060,723   
Georgia Main Street Natural Gas, Inc., Gas Project Rev., “B”, 5%, 3/15/19      250,000        277,500   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/19      225,000        255,659   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/20      250,000        286,943   
Texas Gas Acquisition & Supply Corp III., Gas Supply Rev., 5%, 12/15/31      40,000        44,219   
             $ 1,925,044   
Water & Sewer Utility Revenue - 14.7%           
Athens-Clarke County, GA, Unified Government Water & Sewer Rev., 5.625%, 1/01/33    $ 500,000      $ 578,490   
Cherokee County, GA, Water & Sewer Authority Rev., 5%, 8/01/21      385,000        460,995   
Cherokee County, GA, Water & Sewer Authority Rev., 5%, 8/01/28      800,000        935,232   
DeKalb County, GA, Water & Sewer Rev., “A”, 5.25%, 10/01/31      1,000,000        1,168,470   
DeKalb County, GA, Water & Sewer Rev., “B”, 5.25%, 10/01/25      1,000,000        1,264,200   
Forsyth County, GA, Water & Sewer Authority Rev., 5%, 1/01/26      500,000        602,005   
Forsyth County, GA, Water & Sewer Authority Rev., 5%, 4/01/41      500,000        591,535   
Fulton County, GA, Water & Sewer Rev., 5%, 1/01/23      500,000        590,610   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.625%, 7/01/40      60,000        66,946   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/29      45,000        50,976   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/35      45,000        50,405   
Henry County, GA, Water & Sewer Authority Rev., BHAC, 5.25%, 2/01/27      1,000,000        1,270,150   
Henry County, GA, Water & Sewer Authority Rev., 5.25%, 2/01/28      1,000,000        1,269,470   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “C-7”, NATL, 5%, 7/01/32      15,000        16,614   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/35      10,000        11,101   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/37      20,000        22,169   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-6”, NATL, 5%, 7/01/36      20,000        21,954   
             $ 8,971,322   
Total Municipal Bonds
(Identified Cost, $54,572,817)		            $ 59,381,677   
 

 

34

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Portfolio of Investments – continued

 

Money Market Funds - 1.5%             
    
Issuer    Shares/Par     Value ($)  
    
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      899,451      $ 899,451   
Total Investments
(Identified Cost, $55,472,268)		            $ 60,281,128   
Other Assets, Less Liabilities - 0.9%        569,368   
Net Assets - 100.0%            $ 60,850,496   

See Portfolio Footnotes and Notes to Financial Statements

 

 

35

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS MARYLAND MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 96.9%  
    
Issuer    Shares/Par     Value ($)  
    
Airport Revenue - 1.0%   
Metropolitan Washington, DC, Airport Authority Rev., “A”, 5%, 10/01/39    $ 750,000      $ 859,478   
General Obligations - General Purpose - 16.0%   
Baltimore County, MD, Metropolitan District, “C”, 4%, 9/01/17    $ 2,000,000      $ 2,159,680   
Baltimore County, MD, Public Improvement, 5%, 2/01/21      1,000,000        1,199,440   
Baltimore County, MD, Public Improvement, 5%, 2/01/28      2,000,000        2,352,840   
Baltimore, MD, Consolidated Public Improvement, “B”, 5%, 10/15/22      1,000,000        1,220,960   
Guam Government, “A”, 6.75%, 11/15/29      70,000        80,271   
Guam Government, “A”, 7%, 11/15/39      80,000        94,470   
Prince George’s County, MD, Consolidated Public Improvement, “A”, 5%, 9/15/30      1,500,000        1,781,235   
State of California, 6%, 11/01/39      720,000        873,310   
State of Maryland, 5%, 8/01/20      3,500,000        3,849,230   
Washington Suburban Sanitary District, MD, Consolidated Public Improvement, 5%, 6/01/21      500,000        603,335   
      $ 14,214,771   
Healthcare Revenue - Hospitals - 23.4%   
Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 8/15/36    $ 590,000      $ 680,040   
Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 8/15/44 (Prerefunded 8/15/19)      345,000        429,649   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 6/01/40      370,000        428,075   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 3/01/45      575,000        667,937   
Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 10/01/36      640,000        665,850   
Maryland Health & Higher Educational Facilities Authority Rev. (Anne Arundel Health System), 5%, 7/01/39      1,000,000        1,110,930   
Maryland Health & Higher Educational Facilities Authority Rev. (Anne Arundel Health System), 5%, 7/01/40      1,000,000        1,087,110   
Maryland Health & Higher Educational Facilities Authority Rev. (Anne Arundel Health System), “A”, 6.75%, 7/01/39 (Prerefunded 7/01/19)      1,000,000        1,226,470   
Maryland Health & Higher Educational Facilities Authority Rev. (Carroll Hospital), “A”, 5%, 7/01/37      1,000,000        1,091,920   
Maryland Health & Higher Educational Facilities Authority Rev. (Doctors Community Hospital), “A”, 5%, 7/01/29      750,000        764,483   
   
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued   
Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins Health System), “A”, 5%, 5/15/26    $ 250,000      $ 287,720   
Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins Health System), “C”, 5%, 5/15/38      330,000        376,230   
Maryland Health & Higher Educational Facilities Authority Rev. (Medlantic/Helix Parent, Inc.), “A”, AGM, 5.25%, 8/15/38      1,000,000        1,215,870   
Maryland Health & Higher Educational Facilities Authority Rev. (Medstar Health), “A”, 5%, 8/15/41      505,000        564,984   
Maryland Health & Higher Educational Facilities Authority Rev. (Mercy Medical Center), “A”, 5.5%, 7/01/42      750,000        793,658   
Maryland Health & Higher Educational Facilities Authority Rev. (Peninsula Regional Medical Center), 5%, 7/01/34      500,000        567,260   
Maryland Health & Higher Educational Facilities Authority Rev. (Peninsula Regional Medical Center), 5%, 7/01/36 (Prerefunded 7/01/16)      1,000,000        1,057,810   
Maryland Health & Higher Educational Facilities Authority Rev. (Suburban Hospital), “A”, 5.5%, 7/01/16      1,000,000        1,004,420   
Maryland Health & Higher Educational Facilities Authority Rev. (Union Hospital of Cecil County Issue), 5%, 7/01/35 (Prerefunded 7/01/15)      500,000        505,995   
Maryland Health & Higher Educational Facilities Authority Rev. (University of Maryland Medical System), AMBAC, 5%, 7/01/31      645,000        706,972   
Maryland Health & Higher Educational Facilities Authority Rev. (University of Maryland Medical System), “A”, 5%, 7/01/41      500,000        513,210   
Maryland Health & Higher Educational Facilities Authority Rev. (Washington County Hospital), 5.75%, 1/01/38      500,000        541,100   
Maryland Health & Higher Educational Facilities Authority Rev. (Western Maryland Health System), 5.25%, 7/01/34      1,000,000        1,134,680   
Maryland Industrial Development Authority, Economic Development Rev., RIBS, FRN, AGM, 11.266%, 8/26/22 (p)      950,000        1,151,742   
Montgomery County, MD, Rev. (Trinity Health Corp.), 5%, 12/01/40      1,000,000        1,128,370   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 10/01/27      480,000        545,606   
Richmond, IN, Hospital Authority Rev. (Reid Hospital), “A”, 6.5%, 1/01/29 (Prerefunded 1/01/19)      415,000        493,053   
      $ 20,741,144   
 

 

36

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Portfolio of Investments – continued

 

Municipal Bonds - continued  
    
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Long Term Care - 2.4%   
Gaithersburg, MD, Economic Development Rev. (Asbury Maryland Obligated Group), “A”, 5.125%, 1/01/36    $ 400,000      $ 409,620   
Maryland Health & Higher Educational Facilities Authority Rev. (Charlestown Community), 6.25%, 1/01/41      750,000        851,100   
Maryland Health & Higher Educational Facilities Authority Rev. (King Farm Presbyterian Community), “A”, 5.3%, 1/01/37      300,000        307,890   
Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7%, 11/01/30      55,000        64,715   
Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7.125%, 11/01/40      85,000        99,169   
Westminster, MD, Refunding Rev. (Carroll Lutheran Village, Inc.), 5.125%, 7/01/40      400,000        420,496   
      $ 2,152,990   
Healthcare Revenue - Other - 0.8%   
Maryland Economic Development Corp., Economic Development Rev. (Lutheran World Relief Refugee), 5.25%, 4/01/19    $ 115,000      $ 122,948   
Maryland Economic Development Corp., Economic Development Rev. (Lutheran World Relief Refugee), 5.25%, 4/01/29      565,000        587,826   
      $ 710,774   
Industrial Revenue - Other - 0.6%   
Maryland Economic Development Corp., Pollution Control Rev. (CNX Marine Terminals, Inc.), 5.75%, 9/01/25    $ 500,000      $ 557,850   
Industrial Revenue - Paper - 0.1%   
Valparaiso, IN, Exempt Facilities Rev. (Pratt Paper LLC Project), 7%, 1/01/44    $ 100,000      $ 123,288   
Miscellaneous Revenue - Other - 1.4%   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/40    $ 105,000      $ 113,152   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/44      160,000        171,720   
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “1”, 5%, 11/15/44      455,000        478,869   
New York, NY, Industrial Development Agency, Airport Facilities Rev. (Transportation Infrastructure Properties LLC), 5%, 7/01/28      450,000        496,962   
      $ 1,260,703   
Multi-Family Housing Revenue - 1.9%   
Howard County, MD, Housing Commission Rev. (Columbia Commons Apartments), “A”, 5%, 6/01/44    $ 500,000      $ 549,300   
   
Issuer    Shares/Par     Value ($)  
    
Multi-Family Housing Revenue - continued   
Maryland Community Development Administration, Department of Housing & Community Development, “A”, 5.875%, 7/01/16    $ 70,000      $ 70,232   
Montgomery County, MD, Housing Opportunities Commission, Multifamily Rev., 5.125%, 7/01/37      1,000,000        1,082,250   
             $ 1,701,782   
Parking - 1.6%                 
Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins Medical Institutions), AMBAC, 5%, 7/01/34    $ 1,385,000      $ 1,386,759   
Port Revenue - 0.7%                 
Maryland Economic Development Corp. Rev. (Port America Chesapeake Terminal Project), “B”, 5.75%, 6/01/35    $ 550,000      $ 595,826   
Sales & Excise Tax Revenue - 1.3%                 
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6%, 1/15/41    $ 435,000      $ 499,280   
Guam Government Business Privilege Tax Rev., “A”, 5.25%, 1/01/36      260,000        291,109   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/16      80,000        85,310   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/17      90,000        98,545   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 8/01/28 (Prerefunded 8/01/19)      5,000        5,902   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “C”, 5.25%, 8/01/40      265,000        191,463   
             $ 1,171,609   
Single Family Housing - State - 2.9%   
Maryland Community Development Administration, Department of Housing & Community Development, 5%, 9/01/34    $ 1,500,000      $ 1,559,565   
Maryland Community Development Administration, Department of Housing & Community Development, “I”, 6%, 3/01/41      10,000        10,030   
Montgomery County, MD, Housing Opportunities Commission (Single Family Mortgage Rev.), “B”, 4.55%, 7/01/26      1,000,000        1,009,100   
             $ 2,578,695   
State & Agency - Other - 3.4%   
Howard County, MD, COP, “A”, 8%, 8/15/19    $ 805,000      $ 1,028,975   
Howard County, MD, COP, “B”, 8%, 8/15/19      385,000        492,119   
Howard County, MD, COP, “B”, 8.15%, 2/15/21      450,000        616,919   
Howard County, MD, COP, “C”, 8%, 8/15/19      680,000        869,196   
             $ 3,007,209   
State & Local Agencies - 2.7%   
FYI Properties Lease Rev. (Washington State Project), 5.5%, 6/01/34    $ 370,000      $ 424,083   
Los Angeles, CA, Municipal Improvement Corp. Lease Rev. (Real Property), “E”, 6%, 9/01/39      180,000        211,397   
 

 

37

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued  
    
Issuer    Shares/Par     Value ($)  
    
State & Local Agencies - continued   
Maryland Department of Transportation, Port Administration Facilities Project, AMBAC, 5.25%, 6/15/20    $ 1,690,000      $ 1,783,744   
             $ 2,419,224   
Tax - Other - 2.0%   
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24    $ 325,000      $ 362,664   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      45,000        49,920   
Virgin Islands Public Finance Authority Rev., “B”, AGM, 5%, 10/01/25      210,000        239,215   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, AGM, 5%, 10/01/25      210,000        241,242   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, 5%, 10/01/29      520,000        570,710   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, 6%, 10/01/39      285,000        315,304   
             $ 1,779,055   
Tax Assessment - 4.3%                 
Anne Arundel County, MD, Special Obligation (National Business Park-North Project), 6.1%, 7/01/40    $ 350,000      $ 374,325   
Anne Arundel County, MD, Special Obligation (VLG South Waugh Chapel Project), 6.25%, 7/01/40      300,000        320,868   
Baltimore, MD, Special Obligation (East Baltimore Research Park Project), “A”, 7%, 9/01/38      400,000        434,344   
Brunswick, MD, Special Obligation (Brunswick Crossing Special Taxing), 5.5%, 7/01/36      240,000        242,702   
Frederick County, MD, Special Obligation (Urbana Community Development Authority), “A”, 5%, 7/01/40      1,500,000        1,668,105   
Howard County, MD, Special Obligation (Annapolis Junction Town Center Project), 6.1%, 2/15/44      230,000        248,448   
Prince George’s County, MD, Special Obligation (National Harbor Project), 5.2%, 7/01/34      500,000        501,220   
             $ 3,790,012   
Tobacco - 1.4%                 
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28    $ 215,000      $ 256,112   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.75%, 6/01/34      165,000        126,106   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 5%, 6/01/41      930,000        713,282   
Virgin Islands Tobacco Settlement Financing Corp., 5%, 5/15/21      125,000        125,018   
             $ 1,220,518   
Transportation - Special Tax - 4.1%           
Commonwealth of Puerto Rico Highway & Transportation Authority Rev., AGM, 5.25%, 7/01/33    $ 1,365,000      $ 1,427,135   
   
Issuer    Shares/Par     Value ($)  
    
Transportation - Special Tax - continued   
Maryland Department of Transportation, Consolidated Transportation Refunding Rev., 5%, 5/01/17    $ 1,500,000      $ 1,637,430   
Washington, DC, Metropolitan Area Transit Authority Gross Rev., “A”, 5.125%, 7/01/32      485,000        556,363   
             $ 3,620,928   
Universities - Colleges - 6.8%                 
Annapolis, MD, Economic Development Rev. (St. John’s College), 5.5%, 10/01/18    $ 90,000      $ 90,398   
Maryland Health & Higher Educational Facilities Authority Rev. (Goucher College), “A”, 5%, 7/01/34      500,000        562,620   
Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins University), “A”, 5%, 7/01/37      1,500,000        1,722,540   
Maryland Health & Higher Educational Facilities Authority Rev. (Maryland Institute College of Art), 5%, 6/01/30      750,000        783,930   
Maryland Health & Higher Educational Facilities Authority Rev. (Notre Dame College), 5%, 10/01/35      1,000,000        1,071,360   
Morgan State University, Academic & Auxiliary Facilities Fees Rev., NATL, 6.05%, 7/01/15      335,000        339,070   
Morgan State University, Academic & Auxiliary Facilities Fees Rev., 5%, 7/01/30      150,000        170,667   
Morgan State University, Academic & Auxiliary Facilities Fees Rev., 5%, 7/01/32      440,000        497,548   
New Jersey Educational Facilities Authority Rev. (University of Medicine & Dentistry), “B”, ETM, 6%, 12/01/17      480,000        531,778   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.125%, 4/01/32      30,000        26,440   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.375%, 4/01/42      135,000        116,247   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (International American University of Puerto Rico Project), 5%, 10/01/31      85,000        85,485   
             $ 5,998,083   
Universities - Dormitories - 3.6%   
Maryland Economic Development Corp., Senior Student Housing Rev. (University of Maryland, Baltimore Project), 5%, 7/01/31    $ 500,000      $ 550,965   
Maryland Economic Development Corp., Student Housing Rev. (Salisbury University Project), 5%, 6/01/27      500,000        549,815   
Maryland Economic Development Corp., Student Housing Rev. (Salisbury University Project), 5%, 6/01/30      300,000        326,901   
 

 

38

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Portfolio of Investments – continued

 

Municipal Bonds - continued  
    
Issuer    Shares/Par     Value ($)  
    
Universities - Dormitories - continued   
Maryland Health & Higher Educational Facilities Authority Rev. (Loyola University Maryland), 5%, 10/01/32    $ 500,000      $ 585,740   
University System of Maryland, Auxiliary Facility & Tuition Rev., “D”, 5%, 10/01/22      1,000,000        1,226,520   
             $ 3,239,941   
Universities - Secondary Schools - 0.8%   
La Vernia, TX, Higher Education Finance Corp. Rev. (Lifeschool of Dallas), “A”, 7.5%, 8/15/41 (Prerefunded 8/15/19)    $ 265,000      $ 333,195   
Maryland Industrial Development Financing Authority, Economic Development Authority Rev. (Our Lady of Good Council), “A”, 6%, 5/01/35 (Prerefunded 5/01/15)      400,000        401,900   
             $ 735,095   
Utilities - Investor Owned - 0.3%   
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.5%, 8/01/29 (Put Date 8/01/16)    $ 275,000      $ 290,136   
Utilities - Municipal Owned - 0.9%   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/24    $ 460,000      $ 549,921   
Long Island, NY, Power Authority, Electric Systems Rev., “A”, 6%, 5/01/33      185,000        216,544   
             $ 766,465   
Utilities - Other - 1.5%   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/19    $ 400,000      $ 454,504   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/21      195,000        225,980   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/22      100,000        116,522   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/23      140,000        164,640   
Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2/01/21      235,000        266,015   
Texas Gas Acquisition & Supply Corp III., Gas Supply Rev., 5%, 12/15/31      55,000        60,801   
             $ 1,288,462   
Water & Sewer Utility Revenue - 11.0%   
Baltimore, MD, Subordinate Refunding Rev. (Mayor and City Council of Baltimore Water Projects), “C”, 5%, 7/01/27    $ 1,015,000      $ 1,214,610   
   
Issuer    Shares/Par     Value ($)  
    
Water & Sewer Utility Revenue - continued   
Baltimore, MD, Refunding Rev. (Mayor and City Council of Baltimore Water Projects), “B”, 5%, 7/01/42    $ 1,320,000      $ 1,510,859   
Baltimore, MD, Rev., LEVRRS, FRN, NATL, 10.893%, 7/01/20 (p)      2,750,000        3,355,165   
Baltimore, MD, Wastewater Rev. Project, “A”, NATL, 5.65%, 7/01/20      1,600,000        1,776,048   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/29      205,000        232,226   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/35      205,000        229,625   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “C-7”, NATL, 5%, 7/01/32      25,000        27,690   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/35      15,000        16,651   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/37      35,000        38,795   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-6”, NATL, 5%, 7/01/36      30,000        32,931   
Mississippi Development Bank Special Obligation (City of Jackson Water and Sewer System Rev. Bond Project), AGM, 6.875%, 12/01/40      50,000        65,569   
Montgomery County, MD, Water Quality Protection Charge Rev., “A”, 5%, 4/01/32      1,125,000        1,300,914   
             $ 9,801,083   

Total Municipal Bonds

(Identified Cost, $79,842,832)

  

  

   $ 86,011,880   
Money Market Funds - 2.0%   
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      1,796,143      $ 1,796,143   

Total Investments

(Identified Cost, $81,638,975)

  

  

   $ 87,808,023   
Other Assets, Less Liabilities - 1.1%        954,354   
Net Assets - 100.0%      $ 88,762,377   

See Portfolio Footnotes and Notes to Financial Statements

 

 

39

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS MASSACHUSETTS MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 96.3%  
    
Issuer    Shares/Par     Value ($)  
    
General Obligations - General Purpose - 8.4%   
Boston, MA, “B”, 4%, 4/01/21    $ 1,870,000      $ 2,139,374   
Commonwealth of Massachusetts, “B”, 5.25%, 8/01/23      1,000,000        1,256,170   
Commonwealth of Massachusetts, “B”, 5.25%, 8/01/28      2,225,000        2,874,277   
Commonwealth of Massachusetts, “C”, NATL, 5.5%, 12/01/19      4,000,000        4,761,520   
Commonwealth of Massachusetts, “C”, AMBAC, 5%, 8/01/32      4,815,000        5,270,932   
Guam Government, “A”, 6.75%, 11/15/29      685,000        785,510   
Guam Government, “A”, 5.25%, 11/15/37      395,000        403,603   
Guam Government, “A”, 7%, 11/15/39      75,000        88,565   
State of California, 6%, 11/01/39      1,555,000        1,886,106   
             $ 19,466,057   
General Obligations - Schools - 1.0%   
San Diego, CA, Unified School District (Election of 2008), Capital Appreciation, “C”, 0%, 7/01/35    $ 2,740,000      $ 1,275,936   
San Marcos, CA, Unified School District (Election of 2010), Capital Appreciation, “C”, 0%, 8/01/38      3,375,000        1,103,895   
             $ 2,379,831   
Healthcare Revenue - Hospitals - 12.9%   
Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 8/15/36    $ 1,315,000      $ 1,515,682   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.25%, 7/01/31      235,000        276,315   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.375%, 7/01/41      345,000        404,237   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 6/01/40      745,000        861,935   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 3/01/45      520,000        604,048   
Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 10/01/36      1,180,000        1,227,660   
Massachusetts Development Finance Agency Rev. (Baystate Medical Center), “N”, 5%, 7/01/44      2,000,000        2,246,980   
Massachusetts Development Finance Agency Rev. (Children’s Hospital), “P”, 5%, 10/01/32      1,000,000        1,173,290   
Massachusetts Development Finance Agency Rev. (Milford Regional Medical Center), “F”, 5.75%, 7/15/43      1,000,000        1,126,120   
   
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued   
Massachusetts Development Finance Agency Rev. (Partners Healthcare System), 5%, 7/01/32 (Prerefunded 7/01/17)    $ 1,050,000      $ 1,151,850   
Massachusetts Development Finance Agency Rev. (Partners Healthcare System), 5%, 7/01/32      950,000        1,029,230   
Massachusetts Development Finance Agency Rev. (Tufts Medical Center), “I”, 7.25%, 1/01/32      1,000,000        1,219,910   
Massachusetts Health & Educational Facilities Authority Rev. (Bay State Medical Center), “I”, 5.75%, 7/01/36      500,000        574,035   
Massachusetts Health & Educational Facilities Authority Rev. (Caregroup, Inc.), 5.125%, 7/01/38      2,000,000        2,152,440   
Massachusetts Health & Educational Facilities Authority Rev. (Children’s Hospital), “M”, 5.25%, 12/01/39      1,500,000        1,712,955   
Massachusetts Health & Educational Facilities Authority Rev. (Children’s Hospital), “M”, 5.5%, 12/01/39      1,000,000        1,154,490   
Massachusetts Health & Educational Facilities Authority Rev. (Jordan Hospital), “D”, 5.25%, 10/01/18      955,000        956,595   
Massachusetts Health & Educational Facilities Authority Rev. (Lahey Clinic), “D”, 5.25%, 8/15/37      1,550,000        1,656,051   
Massachusetts Health & Educational Facilities Authority Rev. (Partners Healthcare System), “J-1”, 5%, 7/01/39      2,000,000        2,256,760   
Massachusetts Health & Educational Facilities Authority Rev. (Partners Healthcare System), “J1”, 5%, 7/01/34      1,375,000        1,561,161   
Massachusetts Health & Educational Facilities Authority Rev. (South Shore), 5.625%, 7/01/19      280,000        281,162   
Massachusetts Health & Educational Facilities Authority Rev. (Southcoast Health Obligation), “D”, 5%, 7/01/29      1,000,000        1,103,570   
Miami-Dade County, FL, Health Facilities Authority Hospital Rev. (Variety Children’s Hospital), “A”, 6%, 8/01/30      430,000        507,280   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6.125%, 10/01/39      655,000        738,506   
New Hampshire Business Finance Authority Rev. (Huggins Hospital), 6.875%, 10/01/39      35,000        37,893   
South Dakota Health & Educational Facilities Authority Rev. (Sanford Obligated Group), “B”, 5%, 11/01/44      235,000        264,297   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 7/01/29      165,000        192,157   
 

 

40

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued  
    
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 7/01/39    $ 395,000      $ 460,669   
Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2/15/39      1,355,000        1,633,154   
             $ 30,080,432   
Healthcare Revenue - Long Term Care - 1.4%   
Massachusetts Development Finance Agency Rev. (Adventcare), “A”, 6.75%, 10/15/37    $ 500,000      $ 522,240   
Massachusetts Development Finance Agency Rev. (Carleton-Willard Village), 5.625%, 12/01/30      525,000        599,057   
Massachusetts Development Finance Agency Rev. (Linden Ponds, Inc.), “A-1”, 6.25%, 11/15/39      352,582        339,286   
Massachusetts Development Finance Agency Rev. (Linden Ponds, Inc.), “A-2”, 5.5%, 11/15/46      18,820        16,172   
Massachusetts Development Finance Agency Rev. (Linden Ponds, Inc.), Capital Appreciation, “B”, 0%, 11/15/56      93,608        579   
Massachusetts Development Finance Agency Rev. (Loomis Communities), “A”, 6%, 1/01/33      500,000        567,465   
Massachusetts Development Finance Agency Rev. (North Hill Communities), “A”, 6.5%, 11/15/43      1,000,000        1,074,950   
Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.25%, 9/15/29      20,000        23,528   
Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.625%, 9/15/39      130,000        154,302   
             $ 3,297,579   
Healthcare Revenue - Other - 0.9%           
Massachusetts Health & Educational Facilities Authority Rev. (Dana Faber Cancer Institute), “K”, 5%, 12/01/37    $ 2,000,000      $ 2,199,140   
Human Services - 0.5%                 
Massachusetts Development Finance Agency Rev. (Evergreen Center, Inc.), 5.5%, 1/01/35    $ 1,200,000      $ 1,201,008   
Industrial Revenue - Environmental Services - 0.7%   
Massachusetts Development Finance Agency, Resource Recovery Rev. (Covanta Energy Project), “C”, 5.25%, 11/01/42    $ 1,535,000      $ 1,590,751   
Miscellaneous Revenue - Other - 9.6%   
Martha’s Vineyard, MA, Land Bank Rev., BAM, 5%, 5/01/31    $ 400,000      $ 465,108   
Martha’s Vineyard, MA, Land Bank Rev., BAM, 5%, 5/01/32      700,000        810,152   
Martha’s Vineyard, MA, Land Bank Rev., BAM, 5%, 5/01/33      500,000        577,780   
   
Issuer    Shares/Par     Value ($)  
    
Miscellaneous Revenue - Other - continued   
Massachusetts Development Finance Agency Rev., 5.5%, 9/01/20    $ 1,205,000      $ 1,384,171   
Massachusetts Development Finance Agency Rev. (The Broad Institute, Inc.), “A”, 5.25%, 4/01/37      2,000,000        2,312,220   
Massachusetts Health & Educational Facilities Authority Rev., 5.5%, 6/01/34      1,500,000        1,678,230   
Massachusetts Health & Educational Facilities Authority Rev. (The Sterling & Francine Clark Art Institute), “B”, 5%, 7/01/30      3,500,000        4,029,235   
Massachusetts Health & Educational Facilities Authority Rev. (The Sterling & Francine Clark Art Institute), “B”, 5%, 7/01/40      1,700,000        1,936,555   
Massachusetts Port Authority Facilities Rev. (Boston Fuel Project), FGIC, 5%, 7/01/24      2,000,000        2,144,020   
Massachusetts Port Authority Facilities Rev. (Conrac Project), “A”, 5.125%, 7/01/41      3,000,000        3,330,030   
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “1”, 5%, 11/15/44      1,190,000        1,252,427   
New York Liberty Development Corp., Liberty Rev. (7 World Trade Center Project), 5%, 9/15/40      2,185,000        2,506,195   
             $ 22,426,123   
Multi-Family Housing Revenue - 5.2%   
Massachusetts Development Finance Agency Rev. (Credit Housing-Chelsea Homes), “I-A”, LOC, 5%, 12/15/24    $ 1,185,000      $ 1,189,278   
Massachusetts Development Finance Agency Rev. (Morville House Apartments), “A”, LOC, 4.95%, 12/15/23      2,500,000        2,503,625   
Massachusetts Housing Finance Agency Rev., “A”, FHA, 5.25%, 12/01/35      1,000,000        1,086,440   
Massachusetts Housing Finance Agency Rev., “A”, 5.25%, 12/01/48      1,000,000        1,001,300   
Massachusetts Housing Finance Agency Rev., “C”, 5.35%, 12/01/49      1,680,000        1,775,609   
Massachusetts Housing Finance Agency, “B”, 5.25%, 12/01/30      1,700,000        1,794,146   
Massachusetts Housing Finance Agency, Multi-Family Housing, “A”, FHA, 4.75%, 12/01/30      1,425,000        1,544,344   
Massachusetts Housing Finance Agency, Multi-Family Housing, “A”, FHA, 4.875%, 12/01/32      1,190,000        1,286,164   
             $ 12,180,906   
Parking - 1.5%                 
Boston, MA, Metropolitan Transit Parking Corp., Systemwide Parking Rev., 5.25%, 7/01/36    $ 3,000,000      $ 3,490,740   
Sales & Excise Tax Revenue - 5.8%           
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6%, 1/15/41    $ 985,000      $ 1,130,553   
    
 

 

41

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Portfolio of Investments – continued

 

Municipal Bonds - continued  
    
Issuer    Shares/Par     Value ($)  
    
Sales & Excise Tax Revenue - continued   
Massachusetts Bay Transportation Authority, Sales Tax Rev., “A”, 5%, 7/01/24    $ 1,590,000      $ 1,987,150   
Massachusetts Bay Transportation Authority, Sales Tax Rev., “A-1”, 5.25%, 7/01/29      1,850,000        2,397,230   
Massachusetts Bay Transportation Authority, Sales Tax Rev., “A-1”, 5.25%, 7/01/31      2,000,000        2,602,460   
Massachusetts Bay Transportation Authority, Sales Tax Rev., Capital Appreciation, 0%, 7/01/34      4,000,000        1,672,920   
Massachusetts School Building Authority, Dedicated Sales Tax Rev., AMBAC, 4.75%, 8/15/32      2,000,000        2,152,140   
Massachusetts School Building Authority, Dedicated Sales Tax Rev., “A”, AMBAC, 4.5%, 8/15/35      950,000        1,011,009   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 8/01/28 (Prerefunded 8/01/19)      10,000        11,804   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “C”, 5.25%, 8/01/40      680,000        491,300   
             $ 13,456,566   
Single Family Housing - State - 1.6%   
Massachusetts Housing Finance Agency, Single Family Housing Rev., “157”, 4.35%, 12/01/27    $ 435,000      $ 456,663   
Massachusetts Housing Finance Agency, Single Family Housing Rev., “177”, 4%, 6/01/39      3,000,000        3,224,610   
             $ 3,681,273   
State & Agency - Other - 0.5%   
Massachusetts Development Finance Agency Rev. (Visual & Performing Arts Project), 6%, 8/01/15    $ 1,235,000      $ 1,258,527   
State & Local Agencies - 4.9%   
Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.925%, 6/01/37    $ 1,370,000      $ 1,159,787   
Massachusetts College Building Authority Project Rev., Capital Appreciation, “A”, SYNCORA, 0%, 5/01/22      8,310,000        7,163,802   
Massachusetts College Building Authority Rev., “A”, 5%, 5/01/31      275,000        319,352   
Massachusetts State College, Building Authority Project Rev., “A”, 5%, 5/01/32      760,000        880,186   
Massachusetts State College, Building Authority Project Rev., “A”, 5.5%, 5/01/49      1,680,000        1,909,908   
             $ 11,433,035   
Student Loan Revenue - 4.8%   
Massachusetts Educational Financing Authority, “J”, 5.625%, 7/01/29    $ 1,730,000      $ 1,926,459   
Massachusetts Educational Financing Authority, Education Loan Rev., “H”, ASSD GTY, 6.35%, 1/01/30      1,295,000        1,366,717   
    
   
Issuer    Shares/Par     Value ($)  
    
Student Loan Revenue - continued   
Massachusetts Educational Financing Authority, Education Loan Rev., “I”, 6%, 1/01/28    $ 890,000      $ 947,797   
Massachusetts Educational Financing Authority, Education Loan Rev., “I-A”, 5.5%, 1/01/22      3,000,000        3,425,160   
Massachusetts Educational Financing Authority, Education Loan Rev., “I-A”, 5.15%, 1/01/26      1,235,000        1,276,224   
Massachusetts Educational Financing Authority, Education Loan Rev., “I-A”, 5.2%, 1/01/27      590,000        610,396   
Massachusetts Educational Financing Authority, Education Loan Rev., “Issue E”, AMBAC, 5.3%, 1/01/16      45,000        45,178   
Massachusetts Educational Financing Authority, Education Loan Rev., “K”, 4.5%, 7/01/24      1,420,000        1,496,013   
             $ 11,093,944   
Tax - Other - 1.8%   
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24    $ 260,000      $ 290,131   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      85,000        94,293   
Massachusetts Special Obligation Dedicated Tax Rev., NATL, 5.5%, 1/01/23      1,585,000        1,944,367   
Virgin Islands Public Finance Authority Rev. (Diageo), “A”, 6.625%, 10/01/29      600,000        683,874   
Virgin Islands Public Finance Authority Rev., “B”, AGM, 5%, 10/01/25      545,000        620,820   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, AGM, 5%, 10/01/25      540,000        620,336   
             $ 4,253,821   
Tobacco - 1.5%   
Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.5%, 5/15/39    $ 400,000      $ 402,456   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 6/01/47      250,000        210,488   
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28      1,335,000        1,590,279   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.75%, 6/01/34      330,000        252,212   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 5%, 6/01/41      1,230,000        943,373   
             $ 3,398,808   
Toll Roads - 1.3%                 
Massachusetts Department of Transportation, Metropolitan Highway System Rev., “B”, 5%, 1/01/32    $ 2,600,000      $ 2,921,568   
Transportation - Special Tax - 0.1%                 
Massachusetts Bay Transportation Authority, Sales Tax Rev., ETM, “C”, 5.5%, 7/01/16    $ 200,000      $ 212,964   
 

 

42

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Portfolio of Investments – continued

 

Municipal Bonds - continued  
    
Issuer    Shares/Par     Value ($)  
    
Universities - Colleges - 22.6%   
Illinois Finance Authority Rev. (Roosevelt University Project), 6.25%, 4/01/29    $ 2,005,000      $ 2,269,279   
Massachusetts Development Finance Agency Higher Education Rev. (Emerson College), “A”, 5%, 1/01/23      1,750,000        1,862,578   
Massachusetts Development Finance Agency Rev. (Boston College), “R-1”, 5%, 7/01/24      3,950,000        4,647,610   
Massachusetts Development Finance Agency Rev. (Boston University), “V-1”, 5%, 10/01/29      2,165,000        2,476,782   
Massachusetts Development Finance Agency Rev. (New England Conservatory of Music), 5.25%, 7/01/38      2,000,000        2,269,040   
Massachusetts Development Finance Agency Rev. (Simmons College), SYNCORA, 5.25%, 10/01/26      2,250,000        2,645,235   
Massachusetts Development Finance Agency Rev. (Suffolk University), 5.125%, 7/01/40      1,000,000        1,065,410   
Massachusetts Development Finance Agency Rev. (Wheelock College), “C”, 5.25%, 10/01/37      1,500,000        1,611,075   
Massachusetts Health & Educational Facilities Authority Rev. (Berklee College of Music), “A”, 5%, 10/01/27      905,000        984,559   
Massachusetts Health & Educational Facilities Authority Rev. (Berklee College of Music), “A”, 5%, 10/01/37      2,000,000        2,179,380   
Massachusetts Health & Educational Facilities Authority Rev. (Boston College), 5.5%, 6/01/27      1,735,000        2,260,028   
Massachusetts Health & Educational Facilities Authority Rev. (Harvard University), 5.5%, 11/15/36      1,500,000        1,734,675   
Massachusetts Health & Educational Facilities Authority Rev. (Lesley University), “A”, ASSD GTY, 5.25%, 7/01/39      1,000,000        1,128,500   
Massachusetts Health & Educational Facilities Authority Rev. (Massachusetts Institute of Technology) “M”, 5.25%, 7/01/21      4,000,000        4,893,080   
Massachusetts Health & Educational Facilities Authority Rev. (Massachusetts Institute of Technology), “A”, 5%, 7/01/38      750,000        822,923   
Massachusetts Health & Educational Facilities Authority Rev. (Massachusetts Institute of Technology), “I-1”, 5.2%, 1/01/28      1,000,000        1,307,230   
Massachusetts Health & Educational Facilities Authority Rev. (Northeastern University), “A”, 5%, 10/01/35      1,500,000        1,708,110   
Massachusetts Health & Educational Facilities Authority Rev. (Simmons College), 8%, 10/01/29 (Prerefunded 10/01/15)      205,000        212,977   
Massachusetts Health & Educational Facilities Authority Rev. (Simmons College), 8%, 10/01/29      295,000        306,381   
Massachusetts Health & Educational Facilities Authority Rev. (Stonehill College), MSQLF, 4.875%, 7/01/27      250,000        282,738   
   
Issuer    Shares/Par     Value ($)  
    
Universities - Colleges - continued   
Massachusetts Health & Educational Facilities Authority Rev. (Stonehill College), 5%, 7/01/28    $ 640,000      $ 725,805   
Massachusetts Health & Educational Facilities Authority Rev. (Stonehill College), 5%, 7/01/29      300,000        339,363   
Massachusetts Health & Educational Facilities Authority Rev. (Suffolk University), “A”, 6.25%, 7/01/30      2,000,000        2,343,720   
Massachusetts State College, Building Authority Project Rev., “A”, 5%, 5/01/29      2,000,000        2,338,260   
Pinellas County, FL, Educational Facilities Authority Rev. (Barry University), 6%, 10/01/41      295,000        336,625   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.125%, 4/01/32      110,000        96,945   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.375%, 4/01/42      370,000        318,603   
Puerto Rico Industrial, Tourist, Medical, & Environmental Central Facilities (University of Sacred Heart), 4.375%, 10/01/31      75,000        61,524   
Puerto Rico Industrial, Tourist, Medical, & Environmental Central Facilities (University of Sacred Heart), 5%, 10/01/42      35,000        28,814   
University of Massachusetts Building Authority Project Rev., “1”, 5%, 11/01/39      3,000,000        3,421,650   
University of Massachusetts Building Authority Project Rev., “1”, 5%, 11/01/19      3,000,000        3,488,820   
University of Massachusetts Building Authority Project Rev., “1”, 5%, 11/01/27      1,000,000        1,235,200   
University of Massachusetts Building Authority Project Rev., “2”, 5%, 11/01/28      1,000,000        1,220,770   
             $ 52,623,689   
Universities - Secondary Schools - 3.7%   
La Vernia, TX, Higher Education Finance Corp. Rev. (Lifeschool of Dallas), “A”, 7.5%, 8/15/41    $ 665,000      $ 836,131   
Massachusetts Development Finance Agency Rev. (Belmont Hill School), 4.375%, 9/01/31 (Prerefunded 9/01/17)      1,080,000        1,173,204   
Massachusetts Development Finance Agency Rev. (Belmont Hill School), 4.5%, 9/01/36 (Prerefunded 9/01/17)      1,000,000        1,089,280   
Massachusetts Development Finance Agency Rev. (Dexter School), 4.75%, 5/01/32      1,130,000        1,156,284   
Massachusetts Development Finance Agency Rev. (Dexter School), 5%, 5/01/37      2,000,000        2,056,060   
Massachusetts Development Finance Agency Rev. (Foxborough Regional Charter School), “A”, 6.375%, 7/01/30      935,000        1,035,887   
Massachusetts Development Finance Agency Rev. (Milton Academy), “A”, 5%, 9/01/28      1,000,000        1,167,600   
             $ 8,514,446   
 

 

43

Table of Contents

Portfolio of Investments – continued

 

 

Municipal Bonds - continued  
    
Issuer    Shares/Par     Value ($)  
    
Utilities - Investor Owned - 0.5%   
Massachusetts Development Finance Agency, Solid Waste Disposal Rev. (Dominion Energy Brayton), 5.75%, 12/01/42
(Prerefunded 5/01/19)		    $ 1,000,000      $ 1,182,100   
Utilities - Municipal Owned - 0.5%                 
Guam Power Authority Rev., “A”, 5.5%, 10/01/30    $ 590,000      $ 669,396   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/39      200,000        232,134   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/44      235,000        271,500   
             $ 1,173,030   
Utilities - Other - 1.0%   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/19    $ 805,000      $ 914,689   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/21      405,000        469,342   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/22      210,000        244,696   
Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2/01/21      480,000        543,350   
Texas Gas Acquisition & Supply Corp III., Gas Supply Rev., 5%, 12/15/31      160,000        176,875   
             $ 2,348,952   
   
Issuer    Shares/Par     Value ($)  
    
Water & Sewer Utility Revenue - 3.6%   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.625%, 7/01/40    $ 305,000      $ 340,310   
Massachusetts Water Pollution Abatement Trust, 5.25%, 8/01/27      1,280,000        1,665,024   
Massachusetts Water Pollution Abatement Trust, 5.25%, 8/01/33      2,000,000        2,637,640   
Massachusetts Water Pollution Abatement Trust (MWRA Program), “A”, 5%, 8/01/32      75,000        75,287   
Massachusetts Water Resouces Authority, General Rev., “B”, 5.25%, 8/01/30      620,000        809,193   
Massachusetts Water Resources Authority, “B”, AGM, 5.25%, 8/01/29      595,000        775,148   
Massachusetts Water Resources Authority, General Rev., “B”, AGM, 5.25%, 8/01/31      1,625,000        2,121,438   
             $ 8,424,040   

Total Municipal Bonds

(Identified Cost, $199,725,728)

  

  

   $ 224,289,330   
Money Market Funds - 2.8%                 
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      6,414,242      $ 6,414,242   

Total Investments

(Identified Cost, $206,139,970)

  

  

   $ 230,703,572   
Other Assets, Less Liabilities - 0.9%        2,167,018   
Net Assets - 100.0%      $ 232,870,590   
 

Portfolio Footnotes:

 

(n) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities for the MFS California Municipal Bond Fund was $616,869, representing 0.2% of net assets.
(p) Primary inverse floater.
(v) Underlying affiliated fund that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

The following abbreviations are used in this report and are defined:

 

COP   Certificate of Participation    
ETM   Escrowed to Maturity    
FRN   Floating Rate Note. Interest rate resets periodically and the current rate may not be the rate reported at period end.
LOC   Letter of Credit    
Insurers   Inverse Floaters
AGM   Assured Guaranty Municipal   LEVRRS   Leveraged Reverse Rate Security
AMBAC   AMBAC Indemnity Corp.   RIBS   Residual Interest Bonds
ASSD GTY   Assured Guaranty Insurance Co.    
BAM   Build America Mutual    
BHAC   Berkshire Hathaway Assurance Corp.    
CALHF   California Health Facility Construction Loan Insurance Program    
FGIC   Financial Guaranty Insurance Co.    
FHA   Federal Housing Administration    
FNMA   Federal National Mortgage Assn.    
GNMA   Government National Mortgage Assn.    
MSQLF   Michigan Student Qualified Loan Fund    
NATL   National Public Finance Guarantee Corp.    
SYNCORA   Syncora Guarantee Inc.    

See Notes to Financial Statements

 

44

Table of Contents

Financial Statements

STATEMENTS OF ASSETS AND LIABILITIES

At 3/31/15

These statements represent each fund’s balance sheet, which details the assets and liabilities comprising the total value of each fund.

 

  Alabama
Fund		   Arkansas
Fund		   California
Fund		  
Assets                  
Investments

Non-affiliated issuers, at identified cost

   $48,989,774      $161,968,659      $253,580,202   

Underlying affiliated funds, at cost and net asset value

   421,150      3,861,499      14,490,081   
Total investments, at identified cost   $49,410,924      $165,830,158      $268,070,283   

Unrealized appreciation (depreciation)

   4,365,334      9,798,005      26,769,119   
Total investments, at value   $53,776,258      $175,628,163      $294,839,402   

Receivables for

Investments sold

   95,567      1,366,700      —   

Fund shares sold

   510      188,530      329,014   

Interest

   625,053      2,295,376      3,436,086   

Receivable from investment adviser

   5,026      —      —   

Other assets

   470      1,093      1,602   

Total assets

   $54,502,884      $179,479,862      $298,606,104   
Liabilities                  
Payables for

Distributions

   $29,450      $41,853      $151,832   

Investments purchased

   577,770      2,174,801      8,071,261   

Fund shares reacquired

   45,459      771,720      255,942   

Payable to affiliates

Investment adviser

   —      3,513      5,742   

Shareholder servicing costs

   19,526      68,328      110,698   

Distribution and service fees

   682      3,039      3,912   

Payable for independent Trustees’ compensation

   3,249      3,110      9,273   

Accrued expenses and other liabilities

   61,340      71,023      74,050   

Total liabilities

   $737,476      $3,137,387      $8,682,710   

Net assets

   $53,765,408      $176,342,475      $289,923,394   
Net assets consist of                  
Paid-in capital   $50,975,299      $172,035,901      $274,487,510   

Unrealized appreciation (depreciation) on investments

   4,365,334      9,798,005      26,769,119   

Accumulated net realized gain (loss) on investments

   (1,698,146 )    (5,539,208 )    (11,393,534 ) 

Undistributed net investment income

   122,921      47,777      60,299   

Net assets

   $53,765,408      $176,342,475      $289,923,394   

 

45

Table of Contents

Statements of Assets and Liabilities – continued

 

  Alabama
Fund		   Arkansas
Fund		   California
Fund		  

Net assets

Class A

   $53,139,681      $169,353,894      $255,481,623   

Class B

   625,727      6,988,581      3,535,271   

Class C

   —      —      30,906,500   

Total net assets

   $53,765,408      $176,342,475      $289,923,394   

Shares of beneficial interest outstanding

Class A

   5,070,993      16,868,588      42,258,939   

Class B

   59,699      695,451      584,621   

Class C

   —      —      5,094,682   

Total shares of beneficial interest outstanding

   5,130,692      17,564,039      47,938,242   

Class A shares

Net asset value per share

(net assets / shares of beneficial interest outstanding)

   $10.48      $10.04      $6.05   

Offering price per share (100 / 95.75 × net asset value per share)

   $10.95      $10.49      $6.32   

Class B shares

Net asset value and offering price per share

(net assets / shares of beneficial interest outstanding)

   $10.48      $10.05      $6.05   

Class C shares

Net asset value and offering price per share

(net assets / shares of beneficial interest outstanding)

   $—      $—      $6.07   

On sales of $100,000 or more, the maximum offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.

See Notes to Financial Statements

 

46

Table of Contents

Statements of Assets and Liabilities – continued

 

At 3/31/15 Georgia
Fund		   Maryland
Fund		   Massachusetts
Fund		  
Assets                  
Investments

Non-affiliated issuers, at identified cost

   $54,572,817      $79,842,832      $199,725,728   

Underlying affiliated funds, at cost and net asset value

   899,451      1,796,143      6,414,242   
Total investments, at identified cost   $55,472,268      $81,638,975      $206,139,970   

Unrealized appreciation (depreciation)

   4,808,860      6,169,048      24,563,602   
Total investments, at value   $60,281,128      $87,808,023      $230,703,572   

Receivables for

Investments sold

   500,000      25,000      91,425   

Fund shares sold

   97,047      41,543      17,073   

Interest

   723,756      1,104,013      2,855,305   

Receivable from investment adviser

   4,318      1,238      —   

Receivable from distributor

   —      —      6,909   

Other assets

   492      625      1,296   

Total assets

   $61,606,741      $88,980,442      $233,675,580   
Liabilities                  
Payables for

Distributions

   $22,446      $56,517      $111,981   

Investments purchased

   587,595      —      —   

Fund shares reacquired

   58,151      60,726      529,721   

Payable to affiliates

Investment adviser

   —      —      4,611   

Shareholder servicing costs

   19,615      28,688      80,050   

Distribution and service fees

   699      898      —   

Payable for independent Trustees’ compensation

   3,675      6,077      6,045   

Accrued expenses and other liabilities

   64,064      65,159      72,582   

Total liabilities

   $756,245      $218,065      $804,990   

Net assets

   $60,850,496      $88,762,377      $232,870,590   
Net assets consist of                  

Paid-in capital

   $57,839,807      $85,407,822      $215,723,202   

Unrealized appreciation (depreciation) on investments

   4,808,860      6,169,048      24,563,602   

Accumulated net realized gain (loss) on investments

   (1,846,747 )    (3,006,068 )    (7,454,048 ) 

Undistributed net investment income

   48,576      191,575      37,834   

Net assets

   $60,850,496      $88,762,377      $232,870,590   

 

47

Table of Contents

Statements of Assets and Liabilities – continued

 

  Georgia
Fund		   Maryland
Fund		   Massachusetts
Fund		  

Net assets

Class A

   $59,289,211      $86,454,724      $229,133,965   

Class B

   1,561,285      2,307,653      3,736,625   

Total net assets

   $60,850,496      $88,762,377      $232,870,590   

Shares of beneficial interest outstanding

Class A

   5,379,180      7,769,675      20,106,691   

Class B

   141,129      207,483      327,305   

Total shares of beneficial interest outstanding

   5,520,309      7,977,158      20,433,996   

Class A shares

Net asset value per share

(net assets / shares of beneficial interest outstanding)

   $11.02      $11.13      $11.40   

Offering price per share (100 / 95.75 × net asset value per share)

   $11.51      $11.62      $11.91   

Class B shares

Net asset value and offering price per share

(net assets / shares of beneficial interest outstanding)

   $11.06      $11.12      $11.42   

On sales of $100,000 or more, the maximum offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A and Class B shares.

See Notes to Financial Statements

 

48

Table of Contents

Financial Statements

STATEMENTS OF OPERATIONS

Year ended 3/31/15

These statements describe how much each fund earned in investment income and accrued in expenses. They also describe any gains or losses generated by each fund’s operations.

 

  Alabama
Fund		   Arkansas
Fund		   California
Fund		  
Net investment income                  
Interest   $2,466,118      $7,201,998      $12,554,786   

Dividends from underlying affiliated funds

   615      2,394      5,036   

Total investment income

   $2,466,733      $7,204,392      $12,559,822   
Expenses

Management fee

   $240,144      $811,700      $1,246,379   

Distribution and service fees

   138,126      503,941      944,561   

Shareholder servicing costs

   43,923      151,477      232,347   

Administrative services fee

   17,992      36,541      50,820   

Independent Trustees’ compensation

   2,794      4,820      9,855   

Custodian fee

   18,389      36,640      44,326   

Shareholder communications

   7,282      11,792      14,543   

Audit and tax fees

   50,881      50,945      50,980   

Legal fees

   10,521      7,690      13,615   

Registration fees

   36,995      30,638      39,635   

Miscellaneous

   17,652      24,391      25,822   

Total expenses

   $584,699      $1,670,575      $2,672,883   

Fees paid indirectly

   (1 )    (3 )    (6 ) 

Reduction of expenses by investment adviser and distributor

   (83,934 )    (280,583 )    (387,969 ) 

Net expenses

   $500,764      $1,389,989      $2,284,908   

Net investment income

   $1,965,969      $5,814,403      $10,274,914   
Realized and unrealized gain (loss) on investments                  

Realized gain (loss) on investments (identified cost basis)

   $14,707      $(632,981 )    $265,277   

Change in unrealized appreciation (depreciation) on investments

   $1,815,171      $7,366,730      $13,411,356   

Net realized and unrealized gain (loss) on investments

   $1,829,878      $6,733,749      $13,676,633   

Change in net assets from operations

   $3,795,847      $12,548,152      $23,951,547   

See Notes to Financial Statements

 

49

Table of Contents

Statements of Operations – continued

 

Year ended 3/31/15 Georgia
Fund		   Maryland
Fund		   Massachusetts
Fund		  
Net investment income                  
Interest   $2,617,220      $4,040,896      $10,515,443   

Dividends from underlying affiliated funds

   1,242      1,342      3,169   

Total investment income

   $2,618,462      $4,042,238      $10,518,612   
Expenses

Management fee

   $272,596      $412,864      $1,072,046   

Distribution and service fees

   163,607      246,296      624,122   

Shareholder servicing costs

   45,929      76,389      159,651   

Administrative services fee

   19,053      23,592      45,021   

Independent Trustees’ compensation

   2,825      3,372      9,658   

Custodian fee

   23,148      25,185      40,955   

Shareholder communications

   7,564      9,159      13,243   

Audit and tax fees

   50,887      50,901      50,968   

Legal fees

   5,724      11,743      7,072   

Registration fees

   27,322      28,056      29,096   

Miscellaneous

   20,589      20,881      24,980   

Total expenses

   $639,244      $908,438      $2,076,812   

Fees paid indirectly

   (1 )    (3 )    (4 ) 

Reduction of expenses by investment adviser and distributor

   (52,550 )    (22,321 )    (55,910 ) 

Net expenses

   $586,693      $886,114      $2,020,898   

Net investment income

   $2,031,769      $3,156,124      $8,497,714   
Realized and unrealized gain (loss) on investments                  

Realized gain (loss) on investments (identified cost basis)

   $(65,881 )    $36,378      $352,543   

Change in unrealized appreciation (depreciation) on investments

   $2,414,998      $3,006,373      $9,461,124   

Net realized and unrealized gain (loss) on investments

   $2,349,117      $3,042,751      $9,813,667   

Change in net assets from operations

   $4,380,886      $6,198,875      $18,311,381   

See Notes to Financial Statements

 

50

Table of Contents

Financial Statements

STATEMENTS OF CHANGES IN NET ASSETS

These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.

 

Year ended 3/31/15 Alabama
Fund		   Arkansas
Fund		   California
Fund		  
Change in net assets
From operations                  
Net investment income   $1,965,969      $5,814,403      $10,274,914   

Net realized gain (loss) on investments

   14,707      (632,981 )    265,277   

Net unrealized gain (loss) on investments

   1,815,171      7,366,730      13,411,356   

Change in net assets from operations

   $3,795,847      $12,548,152      $23,951,547   
Distributions declared to shareholders                  

From net investment income

   $(1,878,994 )    $(5,567,787 )    $(9,990,733 ) 

Change in net assets from fund share transactions

   $(2,060,613 )    $(10,461,451 )    $10,864,383   

Total change in net assets

   $(143,760 )    $(3,481,086 )    $24,825,197   
Net assets                  
At beginning of period   53,909,168      179,823,561      265,098,197   

At end of period

   $53,765,408      $176,342,475      $289,923,394   

Undistributed net investment income included in net assets at end of period

   $122,921      $47,777      $60,299   
Year ended 3/31/15 Georgia
Fund		   Maryland
Fund		  

Massachusetts

Fund

  
Change in net assets
From operations                  
Net investment income   $2,031,769      $3,156,124      $8,497,714   

Net realized gain (loss) on investments

   (65,881 )    36,378      352,543   

Net unrealized gain (loss) on investments

   2,414,998      3,006,373      9,461,124   

Change in net assets from operations

   $4,380,886      $6,198,875      $18,311,381   
Distributions declared to shareholders                  

From net investment income

   $(1,926,156 )    $(3,089,520 )    $(8,132,556 ) 

Change in net assets from fund share transactions

   $(2,375,037 )    $(6,961,836 )    $(13,380,714 ) 

Total change in net assets

   $79,693      $(3,852,481 )    $(3,201,889 ) 
Net assets                  
At beginning of period   60,770,803      92,614,858      236,072,479   

At end of period

   $60,850,496      $88,762,377      $232,870,590   

Undistributed net investment income included in net assets at end of period

   $48,576      $191,575      $37,834   

See Notes to Financial Statements

 

51

Table of Contents

Statements of Changes in Net Assets – continued

 

Year ended 3/31/14 Alabama
Fund		   Arkansas
Fund		   California
Fund		  
Change in net assets
From operations                  
Net investment income   $2,336,906      $7,105,182      $11,528,380   

Net realized gain (loss) on investments

   (1,291,394 )    (6,145,404 )    (6,580,403 ) 

Net unrealized gain (loss) on investments

   (2,765,716 )    (7,949,456 )    (10,945,135 ) 

Change in net assets from operations

   $(1,720,204 )    $(6,989,678 )    $(5,997,158 ) 
Distributions declared to shareholders                  

From net investment income

   $(2,269,574 )    $(6,926,655 )    $(11,173,911 ) 

Change in net assets from fund share transactions

   $(13,666,080 )    $(48,205,717 )    $(46,394,411 ) 

Total change in net assets

   $(17,655,858 )    $(62,122,050 )    $(63,565,480 ) 
Net assets                  
At beginning of period   71,565,026      241,945,611      328,663,677   

At end of period

   $53,909,168      $179,823,561      $265,098,197   

Undistributed net investment income included in net assets at end of period

   $26,705      $49,693      $64,824   
Year ended 3/31/14 Georgia
Fund		   Maryland
Fund		  

Massachusetts

Fund

  
Change in net assets
From operations                  
Net investment income   $2,509,312      $3,914,903      $9,833,553   

Net realized gain (loss) on investments

   (1,621,074 )    (2,982,507 )    (9,192,820 ) 

Net unrealized gain (loss) on investments

   (3,092,440 )    (4,526,336 )    (10,687,743 ) 

Change in net assets from operations

   $(2,204,202 )    $(3,593,940 )    $(10,047,010 ) 
Distributions declared to shareholders                  

From net investment income

   $(2,410,842 )    $(3,744,433 )    $(9,474,128 ) 

Change in net assets from fund share transactions

   $(17,331,927 )    $(14,282,334 )    $(46,396,367 ) 

Total change in net assets

   $(21,946,971 )    $(21,620,707 )    $(65,917,505 ) 
Net assets                  
At beginning of period   82,717,774      114,235,565      301,989,984   

At end of period

   $60,770,803      $92,614,858      $236,072,479   

Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period

   $(8,823 )    $179,892      $46,628   

See Notes to Financial Statements

 

52

Table of Contents

Financial Statements

FINANCIAL HIGHLIGHTS

MFS ALABAMA MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.11         $10.70         $10.50         $9.72         $10.25   
Income (loss) from investment operations                                             
Net investment income (d)      $0.38         $0.40         $0.40         $0.41         $0.42   

Net realized and unrealized gain (loss) on investments

      0.36         (0.60 )       0.19         0.77         (0.54 ) 

Total from investment operations

      $0.74         $(0.20 )       $0.59         $1.18         $(0.12 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.37 )       $(0.39 )       $(0.39 )       $(0.40 )       $(0.41 ) 

From net realized gain on investments

      —         —         —         —         (0.00 )(w) 

Total distributions declared to shareholders

      $(0.37 )       $(0.39 )       $(0.39 )       $(0.40 )       $(0.41 ) 

Net asset value, end of period (x)

      $10.48         $10.11         $10.70         $10.50         $9.72   

Total return (%) (r)(s)(t)(x)

      7.37         (1.83 )       5.63         12.30         (1.21 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.09         1.05         0.96         0.99         0.97   

Expenses after expense reductions (f)

      0.93         0.93         0.93         0.93         0.93   

Net investment income

      3.69         3.94         3.74         4.01         4.12   

Portfolio turnover

      22         15         10         21         20   

Net assets at end of period (000 omitted)

      $53,140         $53,245         $70,432         $69,887         $70,582   

See Notes to Financial Statements

 

53

Table of Contents

Financial Highlights – continued

 

MFS ALABAMA MUNICIPAL BOND FUND – continued

 

     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.11         $10.70         $10.50         $9.72         $10.24   
Income (loss) from investment operations                                             
Net investment income (d)      $0.30         $0.32         $0.32         $0.33         $0.34   

Net realized and unrealized gain (loss) on investments

      0.36         (0.60 )       0.19         0.77         (0.52 ) 

Total from investment operations

      $0.66         $(0.28 )       $0.51         $1.10         $(0.18 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.29 )       $(0.31 )       $(0.31 )       $(0.32 )       $(0.34 ) 

From net realized gain on investments

      —         —         —         —         (0.00 )(w) 

Total distributions declared to shareholders

      $(0.29 )       $(0.31 )       $(0.31 )       $(0.32 )       $(0.34 ) 

Net asset value, end of period (x)

      $10.48         $10.11         $10.70         $10.50         $9.72   

Total return (%) (r)(s)(t)(x)

      6.57         (2.56 )       4.85         11.47         (1.84 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.84         1.80         1.71         1.74         1.72   

Expenses after expense reductions (f)

      1.68         1.68         1.68         1.68         1.68   

Net investment income

      2.92         3.18         2.99         3.28         3.37   

Portfolio turnover

      22         15         10         21         20   

Net assets at end of period (000 omitted)

      $626         $664         $1,133         $1,826         $3,179   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount was less than $0.01.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

54

Table of Contents

Financial Highlights – continued

 

MFS ARKANSAS MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $9.66         $10.23         $10.17         $9.49         $9.95   
Income (loss) from investment operations                                             
Net investment income (d)      $0.32         $0.34         $0.37         $0.38         $0.41   

Net realized and unrealized gain (loss) on investments

      0.37         (0.58 )       0.05         0.68         (0.47 ) 

Total from investment operations

      $0.69         $(0.24 )       $0.42         $1.06         $(0.06 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.31 )       $(0.33 )       $(0.36 )       $(0.38 )       $(0.40 ) 

From net realized gain on investments

      —         —         —         —         (0.00 )(w) 

Total distributions declared to shareholders

      $(0.31 )       $(0.33 )       $(0.36 )       $(0.38 )       $(0.40 ) 

Net asset value, end of period (x)

      $10.04         $9.66         $10.23         $10.17         $9.49   

Total return (%) (r)(s)(t)(x)

      7.21         (2.32 )       4.10         11.34         (0.62 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      0.90         0.89         0.86         0.87         0.87   

Expenses after expense reductions (f)

      0.74         0.74         0.71         0.72         0.72   

Net investment income

      3.25         3.48         3.59         3.86         4.20   

Portfolio turnover

      20         19         16         12         20   

Net assets at end of period (000 omitted)

      $169,354         $172,590         $232,510         $213,736         $178,685   
     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $9.67         $10.24         $10.18         $9.50         $9.96   
Income (loss) from investment operations                                             
Net investment income (d)      $0.25         $0.26         $0.29         $0.31         $0.33   

Net realized and unrealized gain (loss) on investments

      0.36         (0.58 )       0.04         0.67         (0.47 ) 

Total from investment operations

      $0.61         $(0.32 )       $0.33         $0.98         $(0.14 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.23 )       $(0.25 )       $(0.27 )       $(0.30 )       $(0.32 ) 

From net realized gain on investments

      —         —         —         —         (0.00 )(w) 

Total distributions declared to shareholders

      $(0.23 )       $(0.25 )       $(0.27 )       $(0.30 )       $(0.32 ) 

Net asset value, end of period (x)

      $10.05         $9.67         $10.24         $10.18         $9.50   

Total return (%) (r)(s)(t)(x)

      6.40         (3.06 )       3.29         10.47         (1.43 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.65         1.64         1.61         1.62         1.62   

Expenses after expense reductions (f)

      1.50         1.51         1.50         1.49         1.53   

Net investment income

      2.49         2.71         2.80         3.08         3.37   

Portfolio turnover

      20         19         16         12         20   

Net assets at end of period (000 omitted)

      $6,989         $7,234         $9,435         $8,749         $7,816   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount was less than $0.01.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

55

Table of Contents

Financial Highlights – continued

 

MFS CALIFORNIA MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $5.74         $6.05         $5.84         $5.23         $5.56   
Income (loss) from investment operations                                             
Net investment income (d)      $0.23         $0.24         $0.23         $0.24         $0.26   

Net realized and unrealized gain (loss) on investments

      0.30         (0.32 )       0.21         0.61         (0.34 ) 

Total from investment operations

      $0.53         $(0.08 )       $0.44         $0.85         $(0.08 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.22 )       $(0.23 )       $(0.23 )       $(0.24 )       $(0.25 ) 

Net asset value, end of period (x)

      $6.05         $5.74         $6.05         $5.84         $5.23   

Total return (%) (r)(s)(t)(x)

      9.38         (1.20 )       7.59         16.48         (1.53 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      0.87         0.87         0.85         0.86         0.85   

Expenses after expense reductions (f)

      0.72         0.72         0.70         0.71         0.70   

Net investment income

      3.82         4.17         3.90         4.26         4.79   

Portfolio turnover

      24         26         20         35         24   

Net assets at end of period (000 omitted)

      $255,482         $232,451         $288,367         $277,271         $263,306   
     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $5.74         $6.05         $5.84         $5.23         $5.57   
Income (loss) from investment operations                                             
Net investment income (d)      $0.18         $0.19         $0.19         $0.20         $0.22   

Net realized and unrealized gain (loss) on investments

      0.31         (0.31 )       0.20         0.60         (0.35 ) 

Total from investment operations

      $0.49         $(0.12 )       $0.39         $0.80         $(0.13 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.18 )       $(0.19 )       $(0.18 )       $(0.19 )       $(0.21 ) 

Net asset value, end of period (x)

      $6.05         $5.74         $6.05         $5.84         $5.23   

Total return (%) (r)(s)(t)(x)

      8.55         (1.96 )       6.75         15.60         (2.46 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.62         1.62         1.60         1.61         1.60   

Expenses after expense reductions (f)

      1.48         1.49         1.48         1.47         1.47   

Net investment income

      3.07         3.40         3.12         3.51         4.01   

Portfolio turnover

      24         26         20         35         24   

Net assets at end of period (000 omitted)

      $3,535         $3,976         $5,176         $5,640         $6,769   

See Notes to Financial Statements

 

56

Table of Contents

Financial Highlights – continued

 

MFS CALIFORNIA MUNICIPAL BOND FUND – continued

 

     Years ended 3/31  
Class C    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $5.76         $6.07         $5.86         $5.25         $5.58   
Income (loss) from investment operations                                             
Net investment income (d)      $0.17         $0.19         $0.18         $0.19         $0.21   

Net realized and unrealized gain (loss) on investments

      0.31         (0.32 )       0.20         0.61         (0.34 ) 

Total from investment operations

      $0.48         $(0.13 )       $0.38         $0.80         $(0.13 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.17 )       $(0.18 )       $(0.17 )       $(0.19 )       $(0.20 ) 

Net asset value, end of period (x)

      $6.07         $5.76         $6.07         $5.86         $5.25   

Total return (%) (r)(s)(t)(x)

      8.37         (2.08 )       6.60         15.38         (2.41 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.62         1.62         1.60         1.61         1.60   

Expenses after expense reductions (f)

      1.62         1.62         1.60         1.61         1.60   

Net investment income

      2.91         3.26         2.99         3.34         3.87   

Portfolio turnover

      24         26         20         35         24   

Net assets at end of period (000 omitted)

      $30,907         $28,672         $35,120         $33,626         $30,393   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

57

Table of Contents

Financial Highlights – continued

 

MFS GEORGIA MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.58         $11.18         $10.96         $10.08         $10.59   
Income (loss) from investment operations                                             
Net investment income (d)      $0.37         $0.38         $0.38         $0.41         $0.44   

Net realized and unrealized gain (loss) on investments

      0.42         (0.62 )       0.21         0.88         (0.52 ) 

Total from investment operations

      $0.79         $(0.24 )       $0.59         $1.29         $(0.08 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.35 )       $(0.36 )       $(0.37 )       $(0.41 )       $(0.43 ) 

Net asset value, end of period (x)

      $11.02         $10.58         $11.18         $10.96         $10.08   

Total return (%) (r)(s)(t)(x)

      7.53         (2.09 )       5.38         12.98         (0.84 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.04         1.01         0.96         1.02         1.02   

Expenses after expense reductions (f)

      0.95         0.95         0.95         0.95         0.98   

Net investment income

      3.37         3.54         3.41         3.89         4.16   

Portfolio turnover

      16         15         14         19         22   

Net assets at end of period (000 omitted)

      $59,289         $59,068         $80,336         $69,093         $57,878   
     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.62         $11.22         $11.00         $10.12         $10.63   
Income (loss) from investment operations                                             
Net investment income (d)      $0.29         $0.29         $0.30         $0.33         $0.36   

Net realized and unrealized gain (loss) on investments

      0.42         (0.61 )       0.20         0.88         (0.52 ) 

Total from investment operations

      $0.71         $(0.32 )       $0.50         $1.21         $(0.16 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.27 )       $(0.28 )       $(0.28 )       $(0.33 )       $(0.35 ) 

Net asset value, end of period (x)

      $11.06         $10.62         $11.22         $11.00         $10.12   

Total return (%) (r)(s)(t)(x)

      6.70         (2.81 )       4.57         12.09         (1.58 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.78         1.76         1.70         1.78         1.77   

Expenses after expense reductions (f)

      1.70         1.70         1.70         1.70         1.72   

Net investment income

      2.61         2.76         2.64         3.14         3.39   

Portfolio turnover

      16         15         14         19         22   

Net assets at end of period (000 omitted)

      $1,561         $1,702         $2,382         $1,952         $2,385   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

58

Table of Contents

Financial Highlights – continued

 

MFS MARYLAND MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.76         $11.47         $11.34         $10.45         $10.93   
Income (loss) from investment operations                                             
Net investment income (d)      $0.38         $0.42         $0.46         $0.46         $0.46   

Net realized and unrealized gain (loss) on investments

      0.36         (0.73 )       0.09         0.88         (0.49 ) 

Total from investment operations

      $0.74         $(0.31 )       $0.55         $1.34         $(0.03 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.37 )       $(0.40 )       $(0.42 )       $(0.45 )       $(0.45 ) 

From net realized gain on investments

      —         —         —         —         (0.00 )(w) 

Total distributions declared to shareholders

      $(0.37 )       $(0.40 )       $(0.42 )       $(0.45 )       $(0.45 ) 

Net asset value, end of period (x)

      $11.13         $10.76         $11.47         $11.34         $10.45   

Total return (%) (r)(s)(t)(x)

      6.99         (2.66 )       4.86         13.01         (0.35 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      0.97         0.96         0.92         0.94         0.94   

Expenses after expense reductions (f)

      0.95         0.95         0.92         0.94         0.94   

Net investment income

      3.46         3.85         4.00         4.16         4.20   

Portfolio turnover

      18         21         23         13         14   

Net assets at end of period (000 omitted)

      $86,455         $90,417         $110,729         $107,738         $100,324   
     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.75         $11.47         $11.33         $10.45         $10.93   
Income (loss) from investment operations                                             
Net investment income (d)      $0.30         $0.34         $0.37         $0.38         $0.38   

Net realized and unrealized gain (loss) on investments

      0.36         (0.74 )       0.10         0.86         (0.49 ) 

Total from investment operations

      $0.66         $(0.40 )       $0.47         $1.24         $(0.11 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.29 )       $(0.32 )       $(0.33 )       $(0.36 )       $(0.37 ) 

From net realized gain on investments

      —         —         —         —         (0.00 )(w) 

Total distributions declared to shareholders

      $(0.29 )       $(0.32 )       $(0.33 )       $(0.36 )       $(0.37 ) 

Net asset value, end of period (x)

      $11.12         $10.75         $11.47         $11.33         $10.45   

Total return (%) (r)(s)(t)(x)

      6.19         (3.47 )       4.17         12.07         (1.09 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.72         1.71         1.67         1.70         1.69   

Expenses after expense reductions (f)

      1.70         1.70         1.67         1.69         1.69   

Net investment income

      2.70         3.10         3.25         3.42         3.44   

Portfolio turnover

      18         21         23         13         14   

Net assets at end of period (000 omitted)

      $2,308         $2,198         $3,507         $3,406         $3,772   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount was less than $0.01.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

59

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Financial Highlights – continued

 

MFS MASSACHUSETTS MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.92         $11.66         $11.44         $10.42         $11.07   
Income (loss) from investment operations                                             
Net investment income (d)      $0.40         $0.42         $0.43         $0.45         $0.47   

Net realized and unrealized gain (loss) on investments

      0.47         (0.76 )       0.19         1.01         (0.63 ) 

Total from investment operations

      $0.87         $(0.34 )       $0.62         $1.46         $(0.16 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.39 )       $(0.40 )       $(0.40 )       $(0.44 )       $(0.45 ) 

From net realized gain on investments

      —         —         —         —         (0.04 ) 

Total distributions declared to shareholders

      $(0.39 )       $(0.40 )       $(0.40 )       $(0.44 )       $(0.49 ) 

Net asset value, end of period (x)

      $11.40         $10.92         $11.66         $11.44         $10.42   

Total return (%) (r)(s)(t)(x)

      8.02         (2.85 )       5.48         14.21         (1.57 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      0.86         0.87         0.85         0.85         0.86   

Expenses after expense reductions (f)

      0.84         0.85         0.85         0.85         0.86   

Net investment income

      3.58         3.80         3.64         4.04         4.25   

Portfolio turnover

      13         23         15         26         25   

Net assets at end of period (000 omitted)

      $229,134         $232,263         $296,895         $289,090         $266,600   
     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.94         $11.68         $11.46         $10.44         $11.09   
Income (loss) from investment operations                                             
Net investment income (d)      $0.32         $0.33         $0.34         $0.36         $0.39   

Net realized and unrealized gain (loss) on investments

      0.46         (0.75 )       0.20         1.02         (0.63 ) 

Total from investment operations

      $0.78         $(0.42 )       $0.54         $1.38         $(0.24 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.30 )       $(0.32 )       $(0.32 )       $(0.36 )       $(0.37 ) 

From net realized gain on investments

      —         —         —         —         (0.04 ) 

Total distributions declared to shareholders

      $(0.30 )       $(0.32 )       $(0.32 )       $(0.36 )       $(0.41 ) 

Net asset value, end of period (x)

      $11.42         $10.94         $11.68         $11.46         $10.44   

Total return (%) (r)(s)(t)(x)

      7.18         (3.59 )       4.69         13.33         (2.30 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.61         1.62         1.60         1.60         1.60   

Expenses after expense reductions (f)

      1.60         1.62         1.60         1.60         1.60   

Net investment income

      2.81         3.02         2.88         3.29         3.50   

Portfolio turnover

      13         23         15         26         25   

Net assets at end of period (000 omitted)

      $3,737         $3,810         $5,095         $5,443         $7,333   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

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NOTES TO FINANCIAL STATEMENTS

 

(1)   Business and Organization

MFS Alabama Municipal Bond Fund (Alabama fund), MFS Arkansas Municipal Bond Fund (Arkansas Fund), MFS California Municipal Bond Fund (California Fund), MFS Georgia Municipal Bond Fund (Georgia Fund), MFS Maryland Municipal Bond Fund (Maryland Fund), and MFS Massachusetts Municipal Bond Fund (Massachusetts Fund) are each a diversified series of MFS Municipal Series Trust which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The funds are each investment companies and accordingly follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investment Companies.

 

(2)   Significant Accounting Policies

General – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. In the preparation of these financial statements, management has evaluated subsequent events occurring after the date of each fund’s Statement of Assets and Liabilities through the date that the financial statements were issued. Each fund invests primarily in municipal instruments. The value of municipal instruments can be affected by changes in their actual or perceived credit quality. The credit quality of municipal instruments can be affected by, among other things, the financial condition of the issuer or guarantor, the issuer’s future borrowing plans and sources of revenue, the economic feasibility of the revenue bond project or general borrowing purpose, political or economic developments in the region or state where the instrument is issued and the liquidity of the security. Municipal instruments generally trade in the over-the-counter market. Municipal instruments backed by current and anticipated revenues from a specific project or specific assets can be negatively affected by the discontinuance of the taxation supporting the projects or assets or the inability to collect revenues for the project or from the assets. If the Internal Revenue Service determines an issuer of a municipal instrument has not complied with the applicable tax requirements, interest from the security could become taxable, the security could decline in value, and distributions made by the funds could be taxable to shareholders.

In June 2014, FASB issued Accounting Standards Update 2014-11, Transfers and Servicing (Topic 860) – Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (“ASU 2014-11”). ASU 2014-11 changes the accounting for repurchase-to-maturity transactions (i.e., repurchase agreements that settle at the same time as the maturity of the transferred financial asset) and enhances the required disclosures for repurchase agreements and other similar transactions. Although still evaluating the potential impacts of ASU 2014-11 to each fund, management expects that the impact of each fund’s adoption will be limited to additional financial statement disclosures which would first be effective for interim reporting periods beginning after March 15, 2015.

Balance Sheet Offsetting – Each fund’s accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the International Swaps and Derivatives Association (ISDA) Master Agreement does not result in an offset of reported amounts of financial assets and financial liabilities in the Statements of Assets and Liabilities across transactions between each fund and the applicable counterparty. Each fund’s right to setoff may be restricted or prohibited by the bankruptcy or insolvency laws of the particular jurisdiction to which a specific master netting agreement counterparty is subject. Balance sheet offsetting disclosures, to the extent applicable to each fund, have been included in each fund’s Significant Accounting Policies note under the captions for each of the fund’s in-scope financial instruments and transactions.

Investment Valuations – Debt instruments and floating rate loans, including restricted debt instruments, are generally valued at an evaluated or composite bid as provided by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Open-end investment companies are generally valued at net asset value per share. Securities and other assets generally valued on the basis of information from a third-party pricing service may also be valued at a broker/dealer bid quotation. Values obtained from third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data.

The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of each fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under each fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of each fund’s net asset value, or after the halting of

 

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trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. The adviser generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating each fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine each fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that each fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which each fund determines its net asset value per share.

Various inputs are used in determining the value of each fund’s assets or liabilities. These inputs are categorized into three broad levels. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Each fund’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes unobservable inputs, which may include the adviser’s own assumptions in determining the fair value of investments. The following is a summary of the levels used as of March 31, 2015 in valuing each fund’s assets or liabilities:

 

     Level 1      Level 2      Level 3      Total  

Alabama Fund

                            
Investments at Value                            
Municipal Bonds      $—         $53,355,108         $—         $53,355,108   
Mutual Funds      421,150         —         —         421,150   
Total Investments      $421,150         $53,355,108         $—         $53,776,258   

Arkansas Fund

                            
Investments at Value                            
Municipal Bonds      $—         $171,766,664         $—         $171,766,664   
Mutual Funds      3,861,499         —         —         3,861,499   
Total Investments      $3,861,499         $171,766,664         $—         $175,628,163   

California Fund

                            
Investments at Value                            
Municipal Bonds      $—         $280,349,321         $—         $280,349,321   
Mutual Funds      14,490,081         —         —         14,490,081   
Total Investments      $14,490,081         $280,349,321         $—         $294,839,402   

Georgia Fund

                            
Investments at Value                            
Municipal Bonds      $—         $59,381,677         $—         $59,381,677   
Mutual Funds      899,451         —         —         899,451   
Total Investments      $899,451         $59,381,677         $—         $60,281,128   

Maryland Fund

                            
Investments at Value                            
Municipal Bonds      $—         $86,011,880         $—         $86,011,880   
Mutual Funds      1,796,143         —         —         1,796,143   
Total Investments      $1,796,143         $86,011,880         $—         $87,808,023   

Massachusetts Fund

                            
Investments at Value                            
Municipal Bonds      $—         $224,289,330         $—         $224,289,330   
Mutual Funds      6,414,242         —         —         6,414,242   
Total Investments      $6,414,242         $224,289,330         $—         $230,703,572   

For further information regarding security characteristics, see the Portfolio of Investments.

Indemnifications – Under each fund’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to each fund. Additionally, in the normal course of business,

 

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each fund enters into agreements with service providers that may contain indemnification clauses. Each fund’s maximum exposure under these agreements is unknown as this would involve future claims that may be made against each fund that have not yet occurred.

Investment Transactions and Income – Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. All premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles. Interest payments received in additional securities are recorded on the ex-interest date in an amount equal to the value of the security on such date.

Each fund may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statements of Operations in realized gain/loss if the security has been disposed of by the fund or in unrealized gain/loss if the security is still held by the fund. Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statements of Operations.

Fees Paid Indirectly – Each fund’s custody fee may be reduced according to an arrangement that measures the value of cash deposited with the custodian by each fund. For each fund, this amount, for the year ended March 31, 2015, is shown as a reduction of total expenses in the Statements of Operations.

Tax Matters and Distributions – Each fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable and tax-exempt income, including realized capital gains. As a result, no provision for federal income tax is required. Each fund’s federal tax returns, when filed, will remain subject to examination by the Internal Revenue Service for a three year period. Management has analyzed each fund’s tax positions taken on federal and state tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

Distributions to shareholders are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These adjustments have no impact on net assets or net asset value per share. Temporary differences which arise from recognizing certain items of income, expense, gain or loss in different periods for financial statement and tax purposes will reverse at some time in the future. Distributions in excess of net investment income or net realized gains are temporary overdistributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes.

Book/tax differences primarily relate to amortization and accretion of debt securities, as applicable to each fund.

The tax character of distributions declared to shareholders for the last two fiscal years is as follows:

 

Year ended 3/31/15   

Alabama

Fund

     

Arkansas

Fund

     

California

Fund

     

Georgia

Fund

     

Maryland

Fund

     

Massachusetts

Fund

  
Ordinary income (including any short-term capital gains)      $—         $27,225         $2,462         $265         $—         $3,840   
Tax-exempt income      1,878,994         5,540,562         9,988,271         1,925,891         3,089,520         8,128,716   
Total distributions      $1,878,994         $5,567,787         $9,990,733         $1,926,156         $3,089,520         $8,132,556   
Year ended 3/31/14   

Alabama

Fund

     

Arkansas

Fund

     

California

Fund

     

Georgia

Fund

     

Maryland

Fund

     

Massachusetts

Fund

  
Ordinary income (including any short-term capital gains)      $—         $29,107         $—         $—         $—         $—   
Tax-exempt income      2,269,574         6,897,548         11,173,911         2,410,842         3,744,433         9,474,128   
Total distributions      $2,269,574         $6,926,655         $11,173,911         $2,410,842         $3,744,433         $9,474,128   

The federal tax cost and the tax basis components of distributable earnings were as follows:

 

As of 3/31/15   

Alabama

Fund

     

Arkansas

Fund

     

California

Fund

     

Georgia

Fund

     

Maryland

Fund

    

Massachusetts

Fund

  
Cost of investments      $49,209,843         $164,760,306         $266,997,852         $55,240,282         $81,173,943        $204,889,782   
Gross appreciation      4,586,357         11,816,622         28,170,219         5,142,726         6,696,364        25,971,393   
Gross depreciation      (19,942 )       (948,765 )       (328,669 )       (101,880 )       (62,284 )      (157,603 ) 
Net unrealized appreciation (depreciation)      $4,566,415         $10,867,857         $27,841,550         $5,040,846         $6,634,080        $25,813,790   
Undistributed ordinary income      82,966         —         403         —         —        —   
Undistributed tax-exempt income      205,708         497,423         896,257         218,862         461,419        709,165   
Capital loss carryforwards      (1,899,227 )       (6,609,060 )       (12,465,965 )       (2,078,733 )       (3,471,100 )      (8,704,236 ) 
Other temporary differences      (165,753 )       (449,646 )       (836,361 )       (170,286 )       (269,844 )      (671,331 ) 

Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized for fund fiscal years beginning after March 31, 2011 may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses (“post-enactment losses”). Previously, net capital losses were carried forward for eight years and treated as short-term losses (“pre-enactment losses”). As a transition rule, the Act requires that all post-enactment net capital losses be used before pre-enactment net capital losses.

 

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As of March 31, 2015, each fund had capital loss carryforwards available to offset future realized gains as follows:

 

Pre-enactment losses which expire as follows:    Alabama
Fund		      Arkansas
Fund		      California
Fund		      Georgia
Fund		      Maryland
Fund		     Massachusetts
Fund		  
3/31/16      $—         $—         $(40,368 )       $—         $—        $—   
3/31/17      —         —         (1,063,041 )       —         —        —   
3/31/18      —         —         —         (153,718 )       —        —   
3/31/19      (674,377 )       (197,659 )       (2,804,636 )       (266,409 )       (579,646 )      (488,562 ) 
Total      $(674,377 )       $(197,659 )       $(3,908,045 )       $(420,127 )       $(579,646 )      $(488,562 ) 
Post-enactment losses which are
characterized as follows:		                                         
Short-Term      $(353,973 )       $(2,079,856 )       $(3,706,078 )       $(967,476 )       $(1,451,759 )      $(4,463,922 ) 
Long-Term      (870,877 )       (4,331,545 )       (4,851,842 )       (691,130 )       (1,439,695 )      (3,751,752 ) 
Total      $(1,224,850 )       $(6,411,401 )       $(8,557,920 )       $(1,658,606 )       $(2,891,454 )      $(8,215,674 ) 

Multiple Classes of Shares of Beneficial Interest – Each fund offers multiple classes of shares, which differ in their respective distribution and service fees. Each fund’s income and common expenses are allocated to shareholders based on the value of settled shares outstanding of each class. Each fund’s realized and unrealized gain (loss) are allocated to shareholders based on the daily net assets of each class. Dividends are declared separately for each class. Differences in per share dividend rates are generally due to differences in separate class expenses. Class B shares will convert to Class A shares approximately eight years after purchase. Each fund’s distributions declared to shareholders as reported in the Statements of Changes in Net Assets are presented by class as follows:

Distributions declared to shareholders:

From net investment income

 

   

Alabama Fund

  

Arkansas Fund

  

California Fund

   

Year ended
3/31/15

  

Year ended
3/31/14

  

Year ended
3/31/15

  

Year ended
3/31/14

  

Year ended
3/31/15

  

Year ended
3/31/14

Class A   $1,861,548   $2,243,951   $5,401,176   $6,716,641   $9,042,099   $10,058,978
Class B   17,446   25,623   166,611   210,014   110,890   149,985
Class C   —   —   —   —   837,744   964,948
Total   $1,878,994   $2,269,574   $5,567,787   $6,926,655   $9,990,733   $11,173,911
   

Georgia Fund

  

Maryland Fund

  

Massachusetts Fund

   

Year ended
3/31/15

  

Year ended
3/31/14

  

Year ended
3/31/15

  

Year ended
3/31/14

  

Year ended
3/31/15

  

Year ended
3/31/14

Class A   $1,886,597   $2,358,659   $3,030,117   $3,662,344   $8,031,591   $9,348,296
Class B   39,559   52,183   59,403   82,089   100,965   125,832
Total   $1,926,156   $2,410,842   $3,089,520   $3,744,433   $8,132,556   $9,474,128

 

(3)   Transactions with Affiliates

Investment Adviser – Each fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to each fund. The management fee is computed daily and paid monthly at an annual rate of 0.45% of each fund’s average daily net assets.

MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the funds’ Board of Trustees. For the year ended March 31, 2015, these management fee reductions amounted to the following, which are included in the reduction of total expenses in the Statements of Operations:

 

Alabama

Fund

  

Arkansas

Fund

    

California

Fund

  

Georgia

Fund

  

Maryland

Fund

  

Massachusetts

Fund

$2,959     $9,991      $15,418   $3,363   $5,083   $13,215

The management fee incurred for the year ended March 31, 2015 was equivalent to an annual effective rate of 0.44% of each fund’s average daily net assets.

The investment adviser has agreed in writing to pay a portion of the following funds’ total annual operating expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, and investment-related expenses, such that total fund operating expenses do not exceed the following rates annually of these funds’ average daily net assets:

 

     Alabama
Fund		      Georgia
Fund		      Maryland
Fund		  
Class A      0.93%         0.95%         0.95%   
Class B      1.68%         1.70%         1.70%   

 

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Notes to Financial Statements – continued

 

For the Alabama Fund and the Maryland Fund, these written agreements will continue until modified by the funds’ Board of Trustees, but such agreements will continue at least until July 31, 2015. For the Georgia Fund, this written agreement will continue until at least July 31, 2015, after which MFS, under certain conditions, may increase such expense limitation to 1.00% of the fund’s average daily net assets annually for Class A shares and 1.75% of the fund’s average daily net assets annually for Class B shares without a vote of the fund’s Board of Trustees. Any increase above 1.00% and 1.75% of the fund’s average daily net assets annually for Class A and Class B shares, respectively, would require a vote of the fund’s Board of Trustees. For the year ended March 31, 2015, these reductions amounted to $80,431 for the Alabama Fund, $47,890 for the Georgia Fund, and $14,310 for the Maryland Fund and are included in the reduction of total expenses in the Statements of Operations.

Distributor – MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received the following for the year ended March 31, 2015, as its portion of the initial sales charge on sales of Class A shares of each fund:

 

Alabama

Fund

  

Arkansas

Fund

    

California

Fund

    

Georgia

Fund

    

Maryland

Fund

    

Massachusetts

Fund

  
  $11,865     $42,632        $48,593        $18,135        $10,613        $26,490   

The Board of Trustees has adopted a distribution plan for certain share classes pursuant to Rule 12b-1 of the Investment Company Act of 1940.

Each fund’s distribution plan provides that each fund will pay MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.

Distribution Plan Fee Table:

 

     CLASS A  
    

Distribution

Fee Rate (d)

     

Service

Fee Rate (d)

     

Total

Distribution

Plan (d)

     

Annual

Effective

Rate (e)

     

Distribution

and Service

Fee

  
Alabama Fund      —         0.25%         0.25%         0.25%         $131,841   
Arkansas Fund      —         0.25%         0.25%         0.10%         433,277   
California Fund      —         0.25%         0.25%         0.10%         608,385   
Georgia Fund      —         0.25%         0.25%         0.25%         147,387   
Maryland Fund      —         0.25%         0.25%         0.25%         223,725   
Massachusetts Fund      —         0.25%         0.25%         0.23%         586,064   
     CLASS B  
    

Distribution

Fee Rate (d)

     

Service

Fee Rate (d)

     

Total

Distribution

Plan (d)

     

Annual

Effective

Rate (e)

     

Distribution

and Service

Fee

  
Alabama Fund      0.75%         0.25%         1.00%         1.00%         $6,285   
Arkansas Fund      0.75%         0.25%         1.00%         0.86%         70,664   
California Fund      0.75%         0.25%         1.00%         0.86%         37,392   
Georgia Fund      0.75%         0.25%         1.00%         1.00%         16,220   
Maryland Fund      0.75%         0.25%         1.00%         1.00%         22,571   
Massachusetts Fund      0.75%         0.25%         1.00%         1.00%         38,058   
     CLASS C  
    

Distribution

Fee Rate (d)

     

Service

Fee Rate (d)

     

Total

Distribution

Plan (d)

     

Annual

Effective

Rate (e)

     

Distribution

and Service

Fee

  
California Fund      0.75%         0.25%         1.00%         1.00%         $298,784   

 

       

Alabama

Fund

       

Arkansas

Fund

       

California

Fund

       

Georgia

Fund

       

Maryland

Fund

       

Massachusetts

Fund

  
Total Distribution and Service Fees        $138,126           $503,941           $944,561           $163,607           $246,296           $624,122   

 

(d) In accordance with the distribution plan for certain classes, each fund pays distribution and/or service fees equal to these annual percentage rates of each class’s average daily net assets. The distribution and service fee rates disclosed by class represent the current rates in effect at the end of the reporting period. Any rate changes, if applicable, are detailed below.
(e) The annual effective rates represent actual fees incurred under the distribution plan for the year ended March 31, 2015 based on each class’s average daily net assets. MFD has voluntarily agreed to rebate a portion of each class’s 0.25% service fee attributable to accounts for which MFD retains the 0.25% service fee except for accounts attributable to MFS or its affiliates’ seed money. For the year ended March 31, 2015, these rebates amounted to the following and are included in the reduction of total expenses in the Statements of Operations:

 

       

Alabama

Fund

       

Arkansas

Fund

       

California

Fund

       

Georgia

Fund

       

Maryland

Fund

       

Massachusetts

Fund

  
Class A        $480           $221           $2,038           $1,225           $2,811           $42,410   
Class B        —           —           —           —           7           2   
Class C        N/A           N/A           1           N/A           N/A           N/A   

 

65

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Notes to Financial Statements – continued

 

 

  Arkansas Fund: MFD has agreed in writing to reduce the Class A service fee rate to 0.10%. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until July 31, 2015. This reduction amounted to $259,967 and is included in the reduction of total expenses in the Statements of Operations. The service fee rate attributable to Class B shares within the first year of purchase is 0.25%. The service fee rate attributable to all other Class B shares has been reduced by MFD to 0.10% under a written agreement that will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until July 31, 2015. This reduction amounted to $10,188 and is included in the reduction of total expenses in the Statements of Operations.

 

  California Fund: MFD has agreed in writing to reduce the Class A service fee rate to 0.10%. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until July 31, 2015. This reduction amounted to $365,033 and is included in the reduction of total expenses in the Statements of Operations. The service fee rate attributable to Class B shares within the first year of purchase is 0.25%. The service fee rate attributable to all other Class B shares has been reduced by MFD to 0.10% under a written agreement that will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until July 31, 2015. This reduction amounted to $5,158 and is included in the reduction of total expenses in the Statements of Operations.

Certain Class A shares are subject to a contingent deferred sales charge (CDSC) in the event of a shareholder redemption within 18 months of purchase for shares purchased on or after August 1, 2012, and within 24 months of purchase for shares purchased prior to August 1, 2012. Class C shares are subject to a CDSC in the event of a shareholder redemption within 12 months of purchase. Class B shares are subject to a CDSC in the event of a shareholder redemption within six years of purchase. All contingent deferred sales charges are paid to MFD and during the year ended March 31, 2015, were as follows:

 

CDSC imposed     

Alabama

Fund

       

Arkansas

Fund

       

California

Fund

       

Georgia

Fund

       

Maryland

Fund

       

Massachusetts

Fund

  
Class A        $114           $7,299           $3,786           $—           $2,156           $—   
Class B        3,986           11,271           2,645           3,028           442           7,318   
Class C        N/A           N/A           2,769           N/A           N/A           N/A   

Shareholder Servicing Agent – MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from each fund for its services as shareholder servicing agent calculated as a percentage of the average daily net assets of each fund as determined periodically under the supervision of the funds’ Board of Trustees. For the year ended March 31, 2015, each fund paid the following fee, which equated to the following annual percentage of each fund’s average daily net assets:

 

       

Alabama

Fund

       

Arkansas

Fund

       

California

Fund

       

Georgia

Fund

       

Maryland

Fund

       

Massachusetts

Fund

  
Expenses paid        $4,346           $10,841           $26,657           $5,298           $15,490           $27,631   
Percentage of average daily net assets        0.0081%           0.0060%           0.0096%           0.0087%           0.0169%           0.0116%   

MFSC also receives payment from each fund for out-of-pocket expenses, sub-accounting and other shareholder servicing costs which may be paid to affiliated and unaffiliated service providers. For the year ended March 31, 2015, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to the following:

 

Alabama

Fund

  

Arkansas

Fund

    

California

Fund

    

Georgia

Fund

    

Maryland

Fund

    

Massachusetts

Fund

  
  $39,577     $140,636        $205,690        $40,631        $60,899        $132,020   

Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to each fund. Under an administrative services agreement, each fund reimburses MFS the costs incurred to provide these services. Each fund is charged an annual fixed amount of $17,500 plus a fee based on average daily net assets. The administrative services fee incurred for the year ended March 31, 2015 was equivalent to an annual effective rate of each fund’s average daily net assets as follows:

 

       

Alabama

Fund

       

Arkansas

Fund

       

California

Fund

       

Georgia

Fund

       

Maryland

Fund

       

Massachusetts

Fund

  
Percentage of average daily net assets        0.0337%           0.0203%           0.0183%           0.0314%           0.0257%           0.0189%   

Trustees’ and Officers’ Compensation – Each fund pays compensation to independent Trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. Each fund does not pay compensation directly to Trustees or officers of each fund who are also officers of the investment adviser, all of whom receive remuneration for their services to each fund from MFS. Certain officers and Trustees of each fund are officers or directors of MFS, MFD, and MFSC.

Prior to December 31, 2001, each fund had an unfunded defined benefit plan (“DB plan”) for independent Trustees. As of December 31, 2001, the Board took action to terminate the DB plan with respect to then-current and any future independent Trustees, such that the DB plan covers only certain of those former independent Trustees who retired on or before December 31, 2001. The DB plan resulted in a pension expense for each fund. These amounts are included in “Independent Trustees’ compensation” in the Statements of Operations for the year ended March 31, 2015 and were as follows:

 

Alabama

Fund

  

Arkansas

Fund

    

California

Fund

    

Georgia

Fund

    

Maryland

Fund

    

Massachusetts

Fund

  
  $110     $120        $704        $118        $589        $604   

 

66

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The liability for deferred retirement benefits payable to certain independent Trustees under the DB plan amounted to the following at March 31, 2015, and is included in “Payable for independent Trustees’ compensation” in the Statements of Assets and Liabilities:

 

Alabama
Fund		  

Arkansas

Fund

    

California

Fund

    

Georgia

Fund

    

Maryland

Fund

    

Massachusetts

Fund

  
  $3,248     $3,092        $9,263        $3,672        $6,071        $6,035   

Other – Effective November 1, 2014, these funds and certain other funds managed by MFS (the funds) have entered into a service agreement (the ISO Agreement) which provides for payment of fees solely by the funds to Tarantino LLC in return for the provision of services of an Independent Senior Officer (ISO) for the funds. Frank L. Tarantino serves as the ISO and is an officer of the funds and the sole member of Tarantino LLC. The funds can terminate the ISO Agreement with Tarantino LLC at any time under the terms of the ISO Agreement. Prior to November 1, 2014, the funds had entered into services agreements (the Compliance Officer Agreements) which provided for payment of fees by the funds to Tarantino LLC and Griffin Compliance LLC in return for the provision of services of an Independent Chief Compliance Officer (ICCO) and Assistant ICCO, respectively, for the funds. Prior to November 1, 2014, Frank L. Tarantino served as the ICCO. Effective October 31, 2014, Mr. Tarantino resigned as ICCO and the Compliance Officer Agreement between the funds and Tarantino LLC was terminated. Prior to June 1, 2014, Robyn L. Griffin served as the Assistant ICCO and was an officer of the funds. Ms. Griffin is the sole member of Griffin Compliance LLC. Effective May 31, 2014, Ms. Griffin resigned as Assistant ICCO and the Compliance Officer Agreement between the funds and Griffin Compliance LLC was terminated. For the year ended March 31, 2015, the aggregate fees paid by each fund under these agreements amounted to the following and are included in “Miscellaneous” expense in the Statements of Operations:

 

Alabama

Fund

  

Arkansas

Fund

    

California

Fund

    

Georgia

Fund

    

Maryland

Fund

    

Massachusetts

Fund

  
  $226     $762        $1,156        $256        $390        $1,004   

MFS had agreed to reimburse the funds for a portion of the payments made by each fund for the services under the Compliance Officer Agreements in the following amounts, which are included in the reduction of total expenses in the Statements of Operations. Additionally, MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO, Assistant ICCO, and ISO:

 

Alabama

Fund

  

Arkansas

Fund

    

California

Fund

    

Georgia

Fund

    

Maryland

Fund

    

Massachusetts

Fund

  
$64     $216        $321        $72        $110        $283   

Each fund invests in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks current income consistent with preservation of capital and liquidity. Income earned on this investment is included in “Dividends from underlying affiliated funds” in the Statements of Operations. This money market fund does not pay a management fee to MFS.

 

(4)   Portfolio Securities

For the year ended March 31, 2015, purchases and sales of investments, other than short-term obligations, were as follows:

 

       

Alabama

Fund

       

Arkansas

Fund

       

California

Fund

       

Georgia

Fund

       

Maryland

Fund

       

Massachusetts

Fund

  
Purchases        $11,670,953           $35,979,465           $70,323,756           $9,297,809           $16,401,480           $30,443,318   
Sales        $11,823,690           $48,112,438           $64,894,806           $11,518,513           $22,582,359           $48,559,717   

 

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(5)   Shares of Beneficial Interest

Each fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest. Transactions in fund shares were as follows:

 

    Alabama Fund        Arkansas Fund  
    Year ended
3/31/15		     Year ended
3/31/14		        Year ended
3/31/15		     Year ended
3/31/14		  
    Shares     Amount     Shares     Amount        Shares     Amount     Shares     Amount  
Shares sold                   

Class A

     357,063        $3,712,095        406,832        $4,137,456           1,469,010        $14,590,422        1,756,225        $17,150,233   

Class B

     16,311        168,856        10,711        106,916           31,040        310,284        26,877        265,198   
    373,374        $3,880,951        417,543        $4,244,372           1,500,050        $14,900,706        1,783,102        $17,415,431   
Shares issued to shareholders in reinvestment of distributions                   

Class A

     144,558        $1,502,996        177,515        $1,799,710           484,333        $4,817,006        578,476        $5,602,644   

Class B

     1,466        15,241        2,082        21,121           15,960        158,875        19,410        188,190   
    146,024        $1,518,237        179,597        $1,820,831           500,293        $4,975,881        597,886        $5,790,834   
Shares reacquired                   

Class A

     (698,299 )      $(7,213,892 )      (1,899,072 )      $(19,194,109 )         (2,953,013 )      $(29,347,475 )      (7,184,155 )      $(69,277,020 ) 

Class B

     (23,751 )      (245,909 )      (52,987 )      (537,174 )         (99,747 )      (990,563 )      (219,106 )      (2,134,962 ) 
    (722,050 )      $(7,459,801 )      (1,952,059 )      $(19,731,283 )         (3,052,760 )      $(30,338,038 )      (7,403,261 )      $(71,411,982 ) 
Net change                   

Class A

     (196,678 )      $(1,998,801 )      (1,314,725 )      $(13,256,943 )         (999,670 )      $(9,940,047 )      (4,849,454 )      $(46,524,143 ) 

Class B

     (5,974 )      (61,812 )      (40,194 )      (409,137 )         (52,747 )      (521,404 )      (172,819 )      (1,681,574 ) 
    (202,652 )      $(2,060,613 )      (1,354,919 )      $(13,666,080 )         (1,052,417 )      $(10,461,451 )      (5,022,273 )      $(48,205,717 ) 
    California Fund        Georgia Fund  
    Year ended
3/31/15		     Year ended
3/31/14		        Year ended
3/31/15		     Year ended
3/31/14		  
    Shares     Amount     Shares     Amount        Shares     Amount     Shares     Amount  
Shares sold                   

Class A

     5,105,791        $30,497,083        2,708,037        $15,577,719           634,085        $6,944,934        883,129        $9,348,709   

Class B

     63,516        382,496        66,010        387,436           5,661        62,104        8,554        95,515   

Class C

     549,989        3,286,739        368,842        2,137,362           —        —        —        —   
    5,719,296        $34,166,318        3,142,889        $18,102,517           639,746        $7,007,038        891,683        $9,444,224   
Shares issued to shareholders in reinvestment of distributions                   

Class A

     1,209,477        $7,215,263        1,342,032        $7,662,047           146,017        $1,593,700        185,187        $1,957,601   

Class B

     16,024        95,588        20,156        115,004           3,417        37,414        4,540        48,205   

Class C

     108,697        650,720        126,401        723,848           —        —        —        —   
    1,334,198        $7,961,571        1,488,589        $8,500,899           149,434        $1,631,114        189,727        $2,005,806   
Shares reacquired                   

Class A

     (4,528,244 )      $(26,932,420 )      (11,246,845 )      $(64,145,495 )         (984,189 )      $(10,704,941 )      (2,670,552 )      $(28,095,086 ) 

Class B

     (186,997 )      (1,113,828 )      (249,575 )      (1,409,548 )         (28,269 )      (308,248 )      (65,058 )      (686,871 ) 

Class C

     (538,905 )      (3,217,258 )      (1,306,048 )      (7,442,784 )         —        —        —        —   
    (5,254,146 )      $(31,263,506 )      (12,802,468 )      $(72,997,827 )         (1,012,458 )      $(11,013,189 )      (2,735,610 )      $(28,781,957 ) 
Net change                   

Class A

     1,787,024        $10,779,926        (7,196,776 )      $(40,905,729 )         (204,087 )      $(2,166,307 )      (1,602,236 )      $(16,788,776 ) 

Class B

     (107,457 )      (635,744 )      (163,409 )      (907,108 )         (19,191 )      (208,730 )      (51,964 )      (543,151 ) 

Class C

     119,781        720,201        (810,805 )      (4,581,574 )         —        —        —        —   
    1,799,348        $10,864,383        (8,170,990 )      $(46,394,411 )         (223,278 )      $(2,375,037 )      (1,654,200 )      $(17,331,927 ) 

 

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    Maryland Fund        Massachusetts Fund  
    Year ended
3/31/15		     Year ended
3/31/14		        Year ended
3/31/15		     Year ended
3/31/14		  
    Shares     Amount     Shares     Amount        Shares     Amount     Shares     Amount  
Shares sold                   

Class A

     343,021        $3,776,614        1,570,535        $17,068,788           1,447,584        $16,328,005        1,328,413        $14,689,083   

Class B

     31,368        344,628        11,350        124,986           25,385        284,925        33,915        377,816   
    374,389        $4,121,242        1,581,885        $17,193,774           1,472,969        $16,612,930        1,362,328        $15,066,899   
Shares issued to shareholders in reinvestment of distributions                   

Class A

     213,216        $2,352,449        260,081        $2,814,440           580,115        $6,550,829        679,590        $7,440,290   

Class B

     4,965        54,779        6,837        74,083           7,486        84,676        9,248        101,486   
    218,181        $2,407,228        266,918        $2,888,523           587,601        $6,635,505        688,838        $7,541,776   
Shares reacquired                   

Class A

     (1,190,503 )      $(13,125,040 )      (3,077,051 )      $(33,078,417 )         (3,194,221 )      $(36,022,912 )      (6,201,123 )      $(67,582,889 ) 

Class B

     (33,272 )      (365,266 )      (119,521 )      (1,286,214 )         (53,911 )      (606,237 )      (131,068 )      (1,422,153 ) 
    (1,223,775 )      $(13,490,306 )      (3,196,572 )      $(34,364,631 )         (3,248,132 )      $(36,629,149 )      (6,332,191 )      $(69,005,042 ) 
Net change                   

Class A

     (634,266 )      $(6,995,977 )      (1,246,435 )      $(13,195,189 )         (1,166,522 )      $(13,144,078 )      (4,193,120 )      $(45,453,516 ) 

Class B

     3,061        34,141        (101,334 )      (1,087,145 )         (21,040 )      (236,636 )      (87,905 )      (942,851 ) 
    (631,205 )      $(6,961,836 )      (1,347,769 )      $(14,282,334 )         (1,187,562 )      $(13,380,714 )      (4,281,025 )      $(46,396,367 ) 

(6) Line of Credit

Each fund and certain other funds managed by MFS participate in a $1.25 billion unsecured committed line of credit, subject to a $1 billion sublimit, provided by a syndication of banks under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the higher of the Federal Reserve funds rate or one month LIBOR plus an agreed upon spread. A commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds at the end of each calendar quarter. In addition, each fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at a rate equal to the Federal Reserve funds rate plus an agreed upon spread. For the year ended March 31, 2015, each fund’s commitment fee and interest expense were as follows and are included in “Miscellaneous” expense in the Statements of Operations:

 

    

Alabama

Fund

     

Arkansas

Fund

     

California

Fund

     

Georgia

Fund

     

Maryland

Fund

     

Massachusetts

Fund

  
Commitment Fee      $186         $628         $947         $204         $320         $826   
Interest Expense      —         —         —         —         —         —   

 

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Notes to Financial Statements – continued

 

 

(7)   Transactions in Underlying Affiliated Funds - Affiliated Issuers

An affiliated issuer of a fund may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, each fund assumes the MFS Institutional Money Market Portfolio to be an affiliated issuer. Each fund’s transactions in the MFS Institutional Money Market Portfolio for the year ended March 31, 2015, are as follows:

 

     Underlying Affiliated Fund - MFS Institutional Money Market Portfolio  
     Beginning
Shares/Par
Amount		      Acquisitions
Shares/Par
Amount		      Dispositions
Shares/Par
Amount		      Ending
Shares/Par
Amount		  
Alabama Fund      977,768         14,714,528         (15,271,146)         421,150   
Arkansas Fund      376,083         48,356,834         (44,871,418)         3,861,499   
California Fund      1,557,972         81,795,357         (68,863,248)         14,490,081   
Georgia Fund      983,637         16,809,432         (16,893,618)         899,451   
Maryland Fund      1,522,303         22,389,027         (22,115,187)         1,796,143   
Massachusetts Fund      2,528,691         55,500,651         (51,615,100)         6,414,242   
     Realized
Gain
(Loss)		      Capital Gain
Distributions		      Dividend
Income		      Ending
Value		  
Alabama Fund      $—         $—         $615         $421,150   
Arkansas Fund      —         —         2,394         3,861,499   
California Fund      —         —         5,036         14,490,081   
Georgia Fund      —         —         1,242         899,451   
Maryland Fund      —         —         1,342         1,796,143   
Massachusetts Fund      —         —         3,169         6,414,242   

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees of MFS Municipal Series Trust and the Shareholders of MFS Alabama Municipal Bond Fund, MFS Arkansas Municipal Bond Fund, MFS California Municipal Bond Fund, MFS Georgia Municipal Bond Fund, MFS Maryland Municipal Bond Fund and MFS Massachusetts Municipal Bond Fund:

We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of MFS Alabama Municipal Bond Fund, MFS Arkansas Municipal Bond Fund, MFS California Municipal Bond Fund, MFS Georgia Municipal Bond Fund, MFS Maryland Municipal Bond Fund and MFS Massachusetts Municipal Bond Fund (each a series of MFS Municipal Series Trust) (the “Funds”) as of March 31, 2015, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2015, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds as of March 31, 2015, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Boston, Massachusetts

May 13, 2015

 

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TRUSTEES AND OFFICERS — IDENTIFICATION AND BACKGROUND

The Trustees and Officers of the Trust, as of May 1, 2015, are listed below, together with their principal occupations during the past five years. (Their titles may have varied during that period.) The address of each Trustee and Officer is 111 Huntington Avenue, Boston, Massachusetts 02199-7618.

 

Name, Age

  

Position(s) Held

with Fund

   

Trustee/Officer

Since (h)

   

Principal Occupations

During

the Past Five Years

   

Other Directorships (j)

INTERESTED TRUSTEES

Robert J. Manning (k)

(age 51)

   Trustee    February 2004    Massachusetts Financial Services Company, Chairman, Co-Chief Executive Officer and Director; Chief Investment Officer (until 2010)    N/A

Robin A. Stelmach (k)

(age 53)

   Trustee and President    January 2014    Massachusetts Financial Services Company, Executive Vice President and Chief Operating Officer    N/A
INDEPENDENT TRUSTEES

David H. Gunning

(age 72)

   Trustee and Chair of Trustees    January 2004    Private investor    Lincoln Electric Holdings, Inc. (welding equipment manufacturer), Director; Development Alternatives, Inc. (consulting), Director/Non-Executive Chairman

Steven E. Buller

(age 63)

   Trustee    February 2014    Chairman, Financial Accounting Standards Advisory Council; Standing Advisory Group, Public Company Accounting Oversight Board, Member (until 2014); BlackRock, Inc. (investment management), Managing Director (until 2014), BlackRock Finco UK (investment management), Director (until 2014)    N/A

Robert E. Butler

(age 73)

   Trustee    January 2006    Consultant – investment company industry regulatory and compliance matters    N/A

Maureen R. Goldfarb

(age 60)

   Trustee    January 2009    Private investor    N/A

William R. Gutow

(age 73)

   Trustee    December 1993    Private investor and real estate consultant; Capitol Entertainment Management Company (video franchise), Vice Chairman    Texas Donuts (donut franchise), Vice Chairman (until 2010)

Michael Hegarty

(age 70)

   Trustee    December 2004    Private investor    Rouse Properties Inc. (real estate), Director; Capmark Financial Group Inc. (real estate), Director

John P. Kavanaugh

(age 60)

   Trustee    January 2009    Private investor    N/A

Maryanne L. Roepke

(age 59)

   Trustee    May 2014    American Century Investments (investment management), Senior Vice President and Chief Compliance Officer (until 2014)    N/A

Laurie J. Thomsen

(age 57)

   Trustee    March 2005    Private investor; New Profit, Inc. (venture philanthropy), Executive Partner (until 2010)    The Travelers Companies (insurance), Director

Robert W. Uek

(age 73)

   Trustee    January 2006    Consultant to investment company industry    N/A
OFFICERS

Christopher R. Bohane (k)

(age 41)

   Assistant Secretary and Assistant Clerk    July 2005    Massachusetts Financial Services Company, Vice President and Assistant General Counsel    N/A

Kino Clark (k)

(age 46)

   Assistant Treasurer    January 2012    Massachusetts Financial Services Company, Vice President    N/A

 

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Trustees and Officers – continued

 

Name, Age

  

Position(s) Held

with Fund

   

Trustee/Officer

Since (h)

   

Principal Occupations

During

the Past Five Years

   

Other Directorships (j)

Thomas H. Connors (k)

(age 55)

   Assistant Secretary and Assistant Clerk    September 2012    Massachusetts Financial Services Company, Vice President and Senior Counsel; Deutsche Investment Management Americas Inc. (financial service provider), Director and Senior Counsel (until 2012)    N/A

Ethan D. Corey (k)

(age 51)

   Assistant Secretary and Assistant Clerk    July 2005    Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel    N/A

David L. DiLorenzo (k)

(age 46)

   Treasurer    July 2005    Massachusetts Financial Services Company, Senior Vice President    N/A

Timothy M. Fagan (k)

(age 46)

   Chief Compliance Officer    November 2014    Massachusetts Financial Services Company, Chief Compliance Officer; Vice President and Senior Counsel (until 2012)    N/A

Brian E. Langenfeld (k)

(age 42)

   Assistant Secretary and Assistant Clerk    June 2006    Massachusetts Financial Services Company, Vice President and Senior Counsel    N/A

Susan S. Newton (k)

(age 65)

   Assistant Secretary and Assistant Clerk    May 2005    Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel    N/A

Kenneth Paek (k)

(age 40)

   Assistant Treasurer    February 2015    Massachusetts Financial Services Company, Vice President; Cohen & Steers, Vice President/Head of Fund Administration (until 2014)    N/A

Susan A. Pereira (k)

(age 44)

   Assistant Secretary and Assistant Clerk    July 2005    Massachusetts Financial Services Company, Vice President and Senior Counsel    N/A

Kasey L. Phillips (k)

(age 44)

   Assistant Treasurer    September 2012    Massachusetts Financial Services Company, Vice President; Wells Fargo Funds Management, LLC, Senior Vice President, Fund Treasurer (until 2012)    N/A

Mark N. Polebaum (k)

(age 62)

   Secretary and Clerk    January 2006    Massachusetts Financial Services Company, Executive Vice President, General Counsel and Secretary    N/A

Matthew A. Stowe (k)

(age 40)

   Assistant Secretary and Assistant Clerk    October 2014    Massachusetts Financial Services Company, Vice President and Assistant General Counsel    N/A

Frank L. Tarantino

(age 71)

   Independent Senior Officer    June 2004    Tarantino LLC (provider of compliance services), Principal    N/A

Richard S. Weitzel (k)

(age 44)

   Assistant Secretary and Assistant Clerk    October 2007    Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel    N/A

James O. Yost (k)

(age 54)

   Deputy Treasurer    September 1990    Massachusetts Financial Services Company, Senior Vice President    N/A

 

(h) Date first appointed to serve as Trustee/officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. For the period from December 15, 2004 until February 22, 2005, Mr. Manning served as Advisory Trustee. Prior to January 2012, Messrs. DiLorenzo and Yost served as Assistant Treasurers of the Funds. Ms. Stelmach was appointed as President of the Funds as of October 1, 2014.
(j) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).
(k) “Interested person” of the Trust within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act), which is the principal federal law governing investment companies like the fund, as a result of a position with MFS. The address of MFS is 111 Huntington Avenue, Boston, Massachusetts 02199-7618.

Each Trustee (except Ms. Stelmach, Mr. Buller and Ms. Roepke) has been elected by shareholders and each Trustee and officer holds office until his or her successor is chosen and qualified or until his or her earlier death, resignation, retirement or removal. The Trust does not hold annual meetings for the purpose of electing Trustees, and Trustees are not elected for fixed terms. Messrs. Butler, Kavanaugh, Uek and Mses. Thomsen and Roepke are members of the Trust’s Audit Committee.

 

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Trustees and Officers – continued

 

Each of the Fund’s Trustees and officers holds comparable positions with certain other funds of which MFS or a subsidiary is the investment adviser or distributor, and, in the case of the officers, with certain affiliates of MFS. As of May 1, 2015, the Trustees served as board members of 132 funds within the MFS Family of Funds.

The Statement of Additional Information for a Fund includes further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.

 

 

Investment Adviser

Massachusetts Financial Services Company

111 Huntington Avenue

Boston, MA 02199-7618

Distributor

MFS Fund Distributors, Inc.

111 Huntington Avenue

Boston, MA 02199-7618

Portfolio Manager

Michael Dawson

  

Custodian

JPMorgan Chase Bank, NA

4 Metrotech Center

New York, NY 11245

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

200 Berkeley Street

Boston, MA 02116

 

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PROXY VOTING POLICIES AND INFORMATION

MFS votes proxies on behalf of the funds pursuant to proxy voting policies and procedures that are available without charge, upon request, by calling 1-800-225-2606, by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.

Information regarding how each fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.

QUARTERLY PORTFOLIO DISCLOSURE

Each fund will file a complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. A shareholder can obtain the quarterly portfolio holdings report at mfs.com. Each fund’s Form N-Q is also available on the EDGAR database on the Commission’s Internet Website at http://www.sec.gov, and may be reviewed and copied at the:

Public Reference Room

Securities and Exchange Commission

100 F Street, NE, Room 1580

Washington, D.C. 20549

Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. Copies of each fund’s Form N-Q also may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section at the above address.

FURTHER INFORMATION

From time to time, MFS may post important information about each fund or the MFS funds on the MFS web site (mfs.com). This information is available by visiting the “Market Commentary” and “Announcements” sub sections in the “Market Outlooks” section of mfs.com or by clicking on the fund’s name under “Mutual Funds” in the “Products” section of mfs.com.

FEDERAL TAX INFORMATION (unaudited)

The funds will notify shareholders of amounts for use in preparing 2015 income tax forms in January 2016. The following information is provided pursuant to provisions of the Internal Revenue Code.

Of the dividends paid from net investment income during the fiscal year, the following percentages were designated as exempt interest dividends for federal income tax purposes. If each fund has earned income on private activity bonds, a portion of the dividends paid may be considered a tax preference item for purposes of computing a shareholder’s alternative minimum tax.

 

    

Exempt Interest

Dividends

  
Alabama Fund      100.00%   
Arkansas Fund      99.51%   
California Fund      99.98%   
Georgia Fund      99.99%   
Maryland Fund      100.00%   
Massachusetts Fund      99.95%   

 

75

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rev. 3/11

 

FACTS

 

WHAT DOES MFS DO WITH YOUR
PERSONAL INFORMATION?

 

 LOGO

 

Why? Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

 

What?

The types of personal information we collect and share depend on the product or service you have with us. This information can include:

 

•  Social Security number and account balances

•  Account transactions and transaction history

•  Checking account information and wire transfer instructions

 

When you are no longer our customer, we continue to share your information as described in this notice.

 

How? All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons MFS chooses to share; and whether you can limit this sharing.

 

Reasons we can share your
personal information		 Does MFS share? Can you limit this
sharing?

For our everyday business purposes –

such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus

 Yes No

For our marketing purposes –

to offer our products and services to you

 No We don’t share
For joint marketing with other financial companies No We don’t share

For our affiliates’ everyday business purposes –

information about your transactions and experiences

 No We don’t share

For our affiliates’ everyday business purposes –

information about your creditworthiness

 No We don’t share
For nonaffiliates to market to you No We don’t share

 

Questions? Call 800-225-2606 or go to mfs.com.

 

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Page 2

 

Who we are
Who is providing this notice? MFS Funds, MFS Investment Management, MFS Institutional Advisors, Inc., MFS Fund Distributors, Inc., MFS Heritage Trust Company, and MFS Service Center, Inc.

 

What we do
How does MFS protect my personal information? To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include procedural, electronic, and physical safeguards for the protection of the personal information we collect about you.
How does MFS
collect my personal information?

We collect your personal information, for example, when you

 

•  open an account or provide account information

•  direct us to buy securities or direct us to sell your securities

•  make a wire transfer

 

We also collect your personal information from others, such as credit bureaus, affiliates and other companies.

Why can’t I limit all sharing?

Federal law gives you the right to limit only

 

•  sharing for affiliates’ everyday business purposes – information about your creditworthiness

•  affiliates from using your information to market to you

•  sharing for nonaffiliates to market to you

 

State laws and individual companies may give you additional rights to limit sharing.

 

Definitions
Affiliates

Companies related by common ownership or control. They can be financial and nonfinancial companies.

 

• MFS does not share personal information with affiliates, except for everyday business purposes as described on page one of this notice.

Nonaffiliates

Companies not related by common ownership or control. They can be financial and nonfinancial companies.

 

• MFS does not share with nonaffiliates so they can market to you.

Joint Marketing

A formal agreement between nonaffiliated financial companies that together market financial products or services to you.

 

• MFS doesn’t jointly market.

 

 

Other important information
If you own an MFS product or receive an MFS service in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

 

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LOGO

 

Save paper with eDelivery.

 

 

LOGO  

MFS® will send you prospectuses,

reports, and proxies directly via e-mail so you will get information faster with less mailbox clutter.

To sign up:

1. Go to mfs.com.

2. Log in via MFS® Access.

3. Select eDelivery.

If you own your MFS fund shares through a financial institution or a retirement plan, MFS® TALK, MFS® Access, or eDelivery may not be available to you.

 

 

CONTACT US

WEB SITE

mfs.com

MFS TALK

1-800-637-8255

24 hours a day

ACCOUNT SERVICE AND LITERATURE

Shareholders

1-800-225-2606

Financial advisors

1-800-343-2829

Retirement plan services

1-800-637-1255

MAILING ADDRESS

MFS Service Center, Inc.

P.O. Box 55824

Boston, MA 02205-5824

OVERNIGHT MAIL

MFS Service Center, Inc.

c/o Boston Financial Data Services

30 Dan Road

Canton, MA 02021-2809

 

Table of Contents

ANNUAL REPORT

March 31, 2015

 

LOGO

 

MFS® MUNICIPAL SERIES TRUST

For the states of:

Mississippi, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia

 

LOGO

 

MSTB-ANN

Table of Contents

MFS® MUNICIPAL SERIES TRUST

For the states of: Mississippi, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia

 

CONTENTS

 

Letter from the Chairman   1   
Portfolio composition   2   
Management review   10   
Performance summary   12   
Expense tables   20   
Portfolio of investments   23   
Statements of assets and liabilities   60   
Statements of operations   64   
Statements of changes in net assets   66   
Financial highlights   68   
Notes to financial statements   81   
Report of independent registered public accounting firm   93   
Trustees and officers   94   
Proxy voting policies and information   97   
Quarterly portfolio disclosure   97   
Further information   97   
Federal tax information   97   
MFS® privacy notice   98   
Contact information    back cover   

 

 

The report is prepared for the general information of shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.

 

NOT FDIC INSURED Ÿ MAY LOSE VALUE Ÿ NO BANK GUARANTEE

Table of Contents

LETTER FROM THE CHAIRMAN

 

LOGO

Dear Shareholders:

The global economy was in flux early in 2015. Despite a steadily improving labor market, harsh winter weather held back U.S. economic activity. A stronger U.S. dollar has also curtailed export demand and weakened the profits of U.S.-based multinationals.

In the wake of the launch of the European Central Bank’s quantitative easing program and the euro’s sharp decline, the eurozone economy is showing signs of recovery.

In Asia, China and Japan continue to struggle. Chinese manufacturing activity has weakened, and the People’s Bank of China is attempting to ward off further economic slowing through targeted action. Japan’s economy is at risk of sliding back after making initial progress towards its growth and inflation goals.

As always, active risk management is integral to how we at MFS® manage your investments. We use a collaborative process, sharing insights across asset classes, regions and economic sectors. Our global investment team uses a diversified, multidisciplinary, long-term approach.

Applying proven principles, such as asset allocation and diversification, can best serve investors over the long term. We are confident that this approach can help you as you work with your financial advisors to reach your goals in the years ahead.

Respectfully,

 

LOGO

Robert J. Manning

Chairman

MFS Investment Management

May 13, 2015

 

 

The opinions expressed in this letter are subject to change and may not be relied upon for investment advice. No forecasts can be guaranteed.

 

1

Table of Contents

PORTFOLIO COMPOSITION

 

MFS Mississippi Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
State & Local Agencies   21.8%   
Healthcare Revenue – Hospitals   18.4%   
Universities – Colleges   16.3%   
General Obligations – General Purpose   6.9%   
General Obligations – Schools   6.0%   
Composition including fixed income credit quality (a)(i)    
AAA   4.5%   
AA   40.6%   
A   36.0%   
BBB   13.0%   
BB   2.5%   
B   0.3%   
Not Rated   3.2%   
Cash & Other   (0.1)%   

 

 

 

Portfolio facts (i)   
Average Duration (d)   6.1   
Average Effective Maturity (m)   15.3 yrs.   
Jurisdiction (i)   
Mississippi   79.3%   
Massachusetts   2.5%   
Guam   2.0%   
New York   1.9%   
California   1.8%   
U.S. Virgin Islands   1.8%   
Puerto Rico   1.7%   
Michigan   1.4%   
Wisconsin   1.4%   
Illinois   1.0%   
New Hampshire   1.0%   
Kentucky   0.9%   
Tennessee   0.9%   
Virginia   0.7%   
Colorado   0.6%   
Texas   0.5%   
Washington   0.3%   
Florida   0.3%   
New Jersey   0.1%   
 
(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.

From time to time Cash & Other may be negative due to timing of cash receipts and/or equivalent exposure from any derivative holdings.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

2

Table of Contents

Portfolio Composition – continued

 

MFS New York Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
Universities – Colleges   19.3%   
State & Local Agencies   11.7%   
Healthcare Revenue – Hospitals   10.7%   
Tax – Other   7.8%   
Miscellaneous Revenue – Other   7.0%   
Composition including fixed income credit quality (a)(i)    
AAA   4.0%   
AA   33.8%   
A   26.5%   
BBB   18.1%   
BB   4.9%   
B   2.5%   
CCC (o)   0.0%   
Not Rated   5.5%   
Cash & Other   4.7%   

 

 

Portfolio facts (i)
Average Duration (d)   6.2   
Average Effective Maturity (m)   17.8 yrs.   
Jurisdiction (i)
New York   81.7%   
Illinois   1.7%   
New Jersey   1.5%   
Colorado   1.4%   
Guam   1.3%   
Texas   1.1%   
U.S. Virgin Islands   1.1%   
Florida   0.9%   
Michigan   0.9%   
California   0.9%   
Pennsylvania   0.6%   
Wisconsin   0.6%   
Ohio   0.3%   
Washington   0.3%   
Puerto Rico   0.3%   
Indiana   0.3%   
Louisiana   0.3%   
Mississippi   0.1%   
New Hampshire (o)   0.0%   
 
(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.
(o) Less than 0.1%.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

3

Table of Contents

Portfolio Composition – continued

 

MFS North Carolina Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
Healthcare Revenue – Hospitals   20.8%   
Universities – Colleges   16.1%   
State & Local Agencies   14.3%   
Water & Sewer Utility Revenue   10.7%   
Utilities – Municipal Owned   6.5%   
Composition including fixed income credit quality (a)(i)    
AAA   8.2%   
AA   43.8%   
A   25.9%   
BBB   15.7%   
BB   0.5%   
B   1.0%   
CCC (o)   0.0%   
Not Rated   4.3%   
Cash & Other   0.6%   

 

 

Portfolio facts (i)
Average Duration (d)   6.1   
Average Effective Maturity (m)   16.3 yrs.   
Jurisdiction (i)
North Carolina   76.7%   
Puerto Rico   3.5%   
New York   2.4%   
Illinois   2.1%   
California   1.7%   
Michigan   1.6%   
Guam   1.4%   

U.S. Virgin Islands

   1.3%   
Tennessee   1.1%   
New Jersey   0.9%   
Wisconsin   0.9%   
Florida   0.8%   
New Hampshire   0.7%   
Virginia   0.6%   
Texas   0.6%   
Colorado   0.6%   
Kentucky   0.6%   
Pennsylvania   0.6%   
Ohio   0.4%   
Indiana   0.3%   
Washington   0.3%   
Louisiana   0.3%   
 
(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.
(o) Less than 0.1%.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

4

Table of Contents

Portfolio Composition – continued

 

MFS Pennsylvania Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
Healthcare Revenue – Hospitals   18.9%   
Universities – Colleges   15.5%   
General Obligations – General Purpose   12.5%   
General Obligations – Schools   11.9%   
Water & Sewer Utility Revenue   6.2%   
Composition including fixed income credit quality (a)(i)    
AAA   2.7%   
AA   25.4%   
A   38.3%   
BBB   19.8%   
BB   3.4%   
B   2.0%   
CCC   1.6%   
Not Rated   4.8%   
Cash & Other   2.0%   

 

 

Portfolio facts (i)
Average Duration (d)   6.6   
Average Effective Maturity (m)   16.6 yrs.   
Jurisdiction (i)
Pennsylvania   81.4%   
Illinois   2.7%   
Puerto Rico   2.0%   
Michigan   1.5%   
Guam   1.5%   
California   1.5%   
Florida   1.0%   
Colorado   0.9%   
Tennessee   0.9%   
Texas   0.9%   
New Jersey   0.9%   
Kentucky   0.7%   
New York   0.5%   
Wisconsin   0.5%   
Indiana   0.3%   
Louisiana   0.3%   
Georgia   0.3%   
U.S. Virgin Islands   0.2%   
New Hampshire (o)   0.0%   
 
(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.
(o) Less than 0.1%.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

5

Table of Contents

Portfolio Composition – continued

 

MFS South Carolina Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
Healthcare Revenue – Hospitals   17.2%   
Water & Sewer Utility Revenue   16.3%   
General Obligations – Schools   9.4%   
State & Local Agencies   8.7%   
Utilities – Municipal Owned   8.2%   
Composition including fixed income credit quality (a)(i)    
AAA   3.3%   
AA   43.7%   
A   36.7%   
BBB   9.1%   
BB   0.6%   
B   1.9%   
CC   0.2%   
Not Rated   1.3%   
Cash & Other   3.2%   

 

 

Portfolio facts (i)
Average Duration (d)   6.2   
Average Effective Maturity (m)   15.2 yrs.   
Jurisdiction (i)
South Carolina   78.4%   
U.S. Virgin Islands   2.6%   
California   1.9%   
Michigan   1.6%   
Guam   1.5%   
Illinois   1.3%   
Kentucky   1.3%   
Tennessee   1.0%   
Florida   0.7%   
Puerto Rico   0.7%   
Wisconsin   0.7%   
New York   0.6%   
Colorado   0.6%   
Virginia   0.6%   
New Hampshire   0.6%   
New Jersey   0.5%   
Nebraska   0.5%   
Indiana   0.5%   
Texas   0.4%   
Georgia   0.3%   
Washington   0.2%   
Louisiana   0.2%   
South Dakota   0.1%   
Ohio (o)   0.0%   
 
(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.
(o) Less than 0.1%.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

6

Table of Contents

Portfolio Composition – continued

 

MFS Tennessee Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
General Obligations – General Purpose   18.1%   
Healthcare Revenue – Hospitals   14.2%   
Water & Sewer Utility Revenue   11.0%   
Utilities – Municipal Owned   10.1%   
Universities – Colleges   7.8%   
Composition including fixed income credit quality (a)(i)    
AAA   4.8%   
AA   52.2%   
A   23.3%   
BBB   10.7%   
BB   0.2%   
B   1.1%   
Not Rated   3.0%   
Cash & Other   4.7%   

 

 

 

Portfolio facts (i)
Average Duration (d)   6.1   
Average Effective Maturity (m)   15.8 yrs.   
Jurisdiction (i)   
Tennessee   80.6%   
Kentucky   1.9%   
New York   1.8%   
Guam   1.7%   
U.S. Virgin Islands   1.3%   
Florida   1.2%   
California   1.0%   
Puerto Rico   1.0%   
Wisconsin   0.9%   
New Jersey   0.8%   
Illinois   0.7%   
New Hampshire   0.6%   
Virginia   0.6%   
Colorado   0.6%   
Georgia   0.3%   
Michigan   0.1%   
Texas   0.1%   
Mississippi   0.1%   
 
(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

7

Table of Contents

Portfolio Composition – continued

 

MFS Virginia Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
Water & Sewer Utility Revenue   19.5%   
Healthcare Revenue – Hospitals   17.3%   
General Obligations – General Purpose   13.7%   
State & Local Agencies   11.3%   
Universities – Colleges   7.8%   
Composition including fixed income credit quality (a)(i)    
AAA   19.2%   
AA   44.2%   
A   18.4%   
BBB   10.2%   
BB   2.6%   
B   2.5%   
CCC (o)   0.0%   
Not Rated   4.3%   
Cash & Other   (1.4)%   

 

 

Portfolio facts (i)
Average Duration (d)   6.6   
Average Effective Maturity (m)   15.6 yrs.   
Jurisdiction (i)
Virginia   83.8%   
District of Columbia   3.7%   
Guam   2.0%   
Illinois   1.5%   
U.S. Virgin Islands   1.4%   
Tennessee   1.3%   
Wisconsin   1.3%   
Michigan   0.9%   
Ohio   0.9%   
Kentucky   0.6%   
Pennsylvania   0.6%   
Colorado   0.5%   
California   0.5%   
Puerto Rico   0.5%   
Louisiana   0.3%   
Washington   0.3%   
New Jersey   0.3%   
New Hampshire   0.3%   
Massachusetts   0.2%   
New York   0.2%   
Texas   0.2%   
Indiana   0.1%   
 
(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.
(o) Less than 0.1%.

From time to time Cash & Other may be negative due to timing of cash receipts and/or equivalent exposure from any derivative holdings.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

8

Table of Contents

Portfolio Composition – continued

 

MFS West Virginia Municipal Bond Fund

Portfolio structure (i)

 

LOGO

 

Top five industries (i)
Universities – Colleges   19.7%   
Healthcare Revenue – Hospitals   16.1%   
Water & Sewer Utility Revenue   11.0%   
Miscellaneous Revenue – Other   9.9%   
State & Local Agencies   9.7%   
Composition including fixed income credit quality (a)(i)    
AAA   4.5%   
AA   29.9%   
A   45.7%   
BBB   7.6%   
BB   0.8%   
B   0.3%   
Not Rated   11.3%   
Cash & Other   (0.1)%   

 

 

Portfolio facts (i)
Average Duration (d)   6.2   
Average Effective Maturity (m)   14.9 yrs.   
Jurisdiction (i)
West Virginia   78.8%   
Guam   3.6%   
U.S. Virgin Islands   2.4%   
New York   2.2%   
Michigan   1.9%   
Puerto Rico   1.8%   
Massachusetts   1.6%   
Kentucky   1.6%   
Illinois   1.5%   
Florida   1.3%   
Tennessee   1.1%   
California   0.7%   
Texas   0.6%   
Washington   0.5%   
Indiana   0.3%   
New Jersey   0.1%   
Mississippi   0.1%   
 
(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.
(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.

From time to time Cash & Other may be negative due to timing of cash receipts and/or equivalent exposure from any derivative holdings.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

9

Table of Contents

MANAGEMENT REVIEW

Summary of Results

For the twelve months ended March 31, 2015, Class A shares of each fund, at net asset value, outperformed the Barclays Municipal Bond Index. These included the municipal bond funds of Mississippi, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, and West Virginia. The performance for the individual funds and the benchmark are set forth in the Performance Summary.

Market Environment

A generally risk-friendly environment persisted from early in the period until mid-2014. While geopolitical tensions flared in the Middle East and Russia/Ukraine, any market setbacks were short-lived as improving economic growth in the US, coupled with prospects for easier monetary policy in regions with slowing growth, such as Japan, Europe and China, supported risk assets. For example, the European Central Bank (“ECB”) cut policy interest rates into negative territory and expectations were high for additional rate cuts and the announcement for non-conventional easing measures. Similarly, toward the middle of the period the Bank of Japan surprised markets with fresh stimulus measures given lackluster growth trends. The related decline in developed market government bond yields and credit spreads were also supportive for equity markets.

A dominant trend in the second half of the period was the ongoing rise in US equities alongside a decline in US bond yields. The uptrend in US corporate margins and profits continued throughout the second half of 2014, but a rising dollar and a sharp decline in commodity prices, particularly crude oil prices, negatively impacted credit markets, particularly US high yield and emerging market debt. The higher weightings of oil and gas credits in these asset classes resulted in widening spreads and increased volatility. Toward the end of the period, declining inflation and inflation expectations caused a mini-wave of global easing highlighted by the ECB’s decision to commence a potentially open-ended phase of quantitative easing (“QE”), supporting risk assets as well as government bond prices, while the US dollar continues to benefit from the perception that Federal Reserve (“Fed”) tightening was likely to occur later in 2015.

Municipal bonds generally produced solid results for the year ended March 31, 2015. Most forecasters had expected that US Treasury yields would rise during the period as the Fed wound down QE and prepared to tighten monetary policy, and that this would prove to be a headwind for municipal bond performance. Instead, longer Treasury yields fell sharply, while shorter maturities rose slightly. Many factors contributed to this surprising turn of events. Despite a weak reading at the end of the period, the US labor market made solid progress through most of the period, adding an average of 260,000 new jobs per month. Strong job gains failed to translate into markedly higher wages or inflationary pressures that could push the Fed to adopt a more aggressive stance on hiking rates. Slowing growth outside the US and disinflationary developments around the world – including a precipitous drop in oil prices – caused the market to push out its timetable for the first Fed Funds rate hike, as did disappointingly weak US economic activity during the first quarter of 2015. Moreover, softness in the US economy toward the end of the period led to increased dovishness from the Fed, as evidenced by downgraded forecasts for the Fed Funds rate, GDP growth, and inflation. Finally, favorable technical conditions kept downward pressure on Treasury yields. Lower Treasury yields not only allayed investors’ fears of higher interest rates, but also helped drive municipal bond returns.

Continued optimism about the health of the US economy, combined with a comparative dearth of new high-profile, headline-grabbing stories about troubled issuers kept investors relatively constructive on asset class fundamentals. Puerto Rico remained a source of worry, however. As the period ended, the risk that funding needs might not be met remained a threat, even with the Commonwealth’s efforts to bolster tax revenues. Detroit’s bankruptcy proceedings came to a close during the period with both pensioners and bondholders impaired, reinforcing concerns about the priority assigned to general obligation debt. In addition, a court ruling overturned legislation aimed at reforming Illinois’ underfunded public employee pension system, highlighting the challenges ahead as municipalities continue to grapple with the issue of unfunded pension liabilities. Nowhere did these challenges appear more acute than in Chicago, where burgeoning budget deficits attracted increased market and rating agency attention. This demonstrates the market is differentiating between those issuers who have taken steps toward fiscal sustainability and those with ongoing budget and pension challenges. While we expect to see continued headlines for select municipalities, on balance, municipal credit fundamentals improved over the period as state and local tax receipts benefited from a fifth year of economic expansion.

The period was marked by steady and moderate inflows to municipal bond funds as generally good performance attracted investors. New issuance surged in the first quarter of 2015. This large increase in supply, along with lower Treasury rates, caused high-quality municipals to underperform comparable maturity Treasuries as the period ended. Stable spreads in municipal credit enabled higher-yielding bonds to outperform higher-quality debt. The Treasury rally allowed longer-maturity bonds to solidly outperform shorter maturities. At the end of the period, municipal bonds appeared fairly valued to relatively inexpensive versus Treasuries, but yields remained quite low versus historical levels.

Factors Affecting Performance

Relative to the Barclays Municipal Bond Index, the funds’ longer duration (d) stance positively impacted performance as yields fell during the reporting period.

 

10

Table of Contents

Management Review – continued

 

The Barclays Municipal Bond Index is a broad-based index comprised of municipal bonds issued within the 50 states and the District of Columbia as well as U.S. territories and possessions such as Guam, Puerto Rico, and the Virgin Islands.

Among jurisdictions, security selection in municipal bonds of New York were a source of positive performance across all funds. An overweight allocation to municipal bonds of Guam also benefited relative performance across all funds.

Across sectors, the health and general obligation sectors were notable contributors to relative performance for all funds. The education sector was another positive factor for relative performance in all funds, with the exception of the Virginia fund, where it had a negative impact on relative results. An overweight allocation and positive security selection in “BBB” rated (r) securities also benefited relative performance across all funds.

Respectfully,

Michael Dawson

Portfolio Manager

 

(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.
(r) Bonds rated “BBB”, “Baa”, or higher are considered investment grade; bonds rated “BB”, “Ba”, or below are considered non-investment grade. The sources for bond quality ratings are Moody’s Investors Service, Standard & Poor’s and Fitch, Inc. and are applied using the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). For securities which are not rated by any of the three agencies, the security is considered Not Rated.

The views expressed in this report are those of the portfolio manager only through the end of the period of the report as stated on the cover and do not necessarily reflect the views of MFS or any other person in the MFS organization. These views are subject to change at any time based on market or other conditions, and MFS disclaims any responsibility to update such views. These views may not be relied upon as investment advice or an indication of trading intent on behalf of any MFS portfolio. References to specific securities are not recommendations of such securities, and may not be representative of any MFS portfolio’s current or future investments.

 

11

Table of Contents

PERFORMANCE SUMMARY THROUGH 3/31/15

The following charts illustrate a representative class of each fund’s historical performance in comparison to its benchmark(s). Performance results include the deduction of the maximum applicable sales charge and reflect the percentage change in net asset value, including reinvestment of dividends and capital gains distributions. Each fund’s results have been compared to the Barclays Municipal Bond Index, a market capitalization-weighted index that measures the performance of the tax-exempt bond market. However, while this index is considered the benchmark for the performance of municipal bond funds, it is comprised of municipal bonds issued within the 50 states and the District of Columbia as well as U.S. territories and possessions such as Guam, Puerto Rico, and the Virgin Islands, while each of the funds invests a large percentage of its assets in municipal issuers of the state that is in the fund’s name. The performance of other share classes will be greater than or less than that of the class depicted below. Benchmarks are unmanaged and may not be invested in directly. Benchmark returns do not reflect sales charges, commissions or expenses. (See Notes to Performance Summary.)

Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value fluctuate so your shares, when sold, may be worth more or less than the original cost; current performance may be lower or higher than quoted. The performance shown does not reflect the deduction of taxes, if any, that a shareholder would pay on fund distributions or the redemption of fund shares.

MFS Mississippi Municipal Bond Fund

Growth of a hypothetical $10,000 investment

 

LOGO

Total returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 8/06/92 7.18% 4.41% 4.44%  
  B 9/07/93 6.47% 3.69% 3.68%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With initial Sales Charge (4.25%)

 2.63% 3.50% 3.99%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 2.47% 3.34% 3.68%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

 

12

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Performance Summary – continued

 

MFS New York Municipal Bond Fund

Growth of a hypothetical $10,000 investment

 

LOGO

Total returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 6/06/88 8.48% 4.45% 4.31%  
  B 9/07/93 7.69% 3.69% 3.54%  
  C 12/11/00 7.68% 3.66% 3.53%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With initial Sales Charge (4.25%)

 3.87% 3.55% 3.86%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 3.69% 3.34% 3.54%  
 

C

With CDSC (1% for 12 months) (v)

 6.68% 3.66% 3.53%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

 

13

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Performance Summary – continued

 

MFS North Carolina Municipal Bond Fund

Growth of a hypothetical $10,000 investment

 

LOGO

Total returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 10/31/84 7.13% 4.34% 4.22%  
  B 9/07/93 6.34% 3.57% 3.48%  
  C 1/03/94 6.33% 3.56% 3.48%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With initial Sales Charge (4.25%)

 2.58% 3.44% 3.77%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 2.34% 3.22% 3.48%  
 

C

With CDSC (1% for 12 months) (v)

 5.33% 3.56% 3.48%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

 

14

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Performance Summary – continued

 

MFS Pennsylvania Municipal Bond Fund

Growth of a hypothetical $10,000 investment

 

LOGO

Total returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 2/01/93 8.10% 4.68% 4.39%  
  B 9/07/93 7.26% 3.89% 3.59%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With initial Sales Charge (4.25%)

 3.50% 3.78% 3.94%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 3.26% 3.55% 3.59%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

 

15

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Performance Summary – continued

 

MFS South Carolina Municipal Bond Fund

Growth of a hypothetical $10,000 investment

 

LOGO

Total returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 10/31/84 7.48% 4.02% 3.92%  
  B 9/07/93 6.69% 3.23% 3.18%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With initial Sales Charge (4.25%)

 2.91% 3.12% 3.47%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 2.69% 2.88% 3.18%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

 

16

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Performance Summary – continued

 

MFS Tennessee Municipal Bond Fund

Growth of a hypothetical $10,000 investment

 

LOGO

Total returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 8/12/88 7.01% 4.13% 4.06%  
  B 9/07/93 6.21% 3.36% 3.33%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With initial Sales Charge (4.25%)

 2.46% 3.23% 3.61%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 2.21% 3.00% 3.33%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

 

17

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Performance Summary – continued

 

MFS Virginia Municipal Bond Fund

Growth of a hypothetical $10,000 investment

 

LOGO

Total returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 10/31/84 6.97% 4.09% 4.12%  
  B 9/07/93 6.18% 3.32% 3.40%  
  C 1/03/94 6.17% 3.31% 3.38%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With initial Sales Charge (4.25%)

 2.42% 3.19% 3.67%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 2.18% 2.97% 3.40%  
 

C

With CDSC (1% for 12 months) (v)

 5.17% 3.31% 3.38%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

 

18

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Performance Summary – continued

 

MFS West Virginia Municipal Bond Fund

Growth of a hypothetical $10,000 investment

 

LOGO

Total returns through 3/31/15

Average annual without sales charge

 

   Share Class Class inception date 1-yr 5-yr 10-yr   
  A 10/31/84 7.18% 4.21% 3.82%  
  B 9/07/93 6.29% 3.44% 3.08%  
Comparative benchmark
   Barclays Municipal Bond Index (f) 6.62% 5.11% 4.85%   
Average annual with sales charge
 

A

With initial Sales Charge (4.25%)

 2.62% 3.31% 3.37%  
 

B

With CDSC (Declining over six years from 4% to 0%) (v)

 2.29% 3.08% 3.28%  

CDSC – Contingent Deferred Sales Charge.

 

(f) Source: FactSet Research Systems Inc.
(v) Assuming redemption at the end of the applicable period.

Benchmark Definition

Barclays Municipal Bond Index – a market capitalization-weighted index that measures the performance of the tax-exempt bond market.

It is not possible to invest directly in an index.

Notes to Performance Summary

Average annual total return represents the average annual change in value for each share class for the periods presented.

Performance results reflect any applicable expense subsidies and waivers in effect during the periods shown. Without such subsidies and waivers each fund’s performance results would be less favorable. Please see the prospectus and financial statements for complete details.

Performance results do not include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles and may differ from amounts reported in the financial highlights.

A portion of income may be subject to state, federal, and/or alternative minimum tax. Capital gains, if any, are subject to a capital gains tax.

From time to time the funds may receive proceeds from litigation settlements, without which performance would be lower.

 

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EXPENSE TABLES

Fund expenses borne by the shareholders during the period, October 1, 2014 through March 31, 2015

As a shareholder of the funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) on certain purchase or redemption payments, and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the funds and to compare these costs with the ongoing costs of investing in other mutual funds.

These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period October 1, 2014 through March 31, 2015.

Actual Expenses

The first line for each share class in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid 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 line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each share class in the following tables provides information about hypothetical account values and hypothetical expenses based on each fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each fund and 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.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line for each share class in the tables 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 transactional costs were included, your costs would have been higher.

MFS MISSISSIPPI MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.81%        $1,000.00        $1,030.82        $4.10   
  Hypothetical (h)     0.81%        $1,000.00        $1,020.89        $4.08   
B   Actual     1.47%        $1,000.00        $1,027.39        $7.43   
  Hypothetical (h)     1.47%        $1,000.00        $1,017.60        $7.39   

MFS NEW YORK MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.87%        $1,000.00        $1,033.11        $4.41   
  Hypothetical (h)     0.87%        $1,000.00        $1,020.59        $4.38   
B   Actual     1.63%        $1,000.00        $1,028.43        $8.24   
  Hypothetical (h)     1.63%        $1,000.00        $1,016.80        $8.20   
C   Actual     1.63%        $1,000.00        $1,028.37        $8.24   
  Hypothetical (h)     1.63%        $1,000.00        $1,016.80        $8.20   

 

  (h) 5% class return per year before expenses.
  (p) “Expenses Paid During Period” are equal to each class’s annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher.

 

20

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Expense Tables – continued

 

MFS NORTH CAROLINA MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.85%        $1,000.00        $1,026.76        $4.30   
  Hypothetical (h)     0.85%        $1,000.00        $1,020.69        $4.28   
B   Actual     1.60%        $1,000.00        $1,022.98        $8.07   
  Hypothetical (h)     1.60%        $1,000.00        $1,016.95        $8.05   
C   Actual     1.60%        $1,000.00        $1,022.95        $8.07   
  Hypothetical (h)     1.60%        $1,000.00        $1,016.95        $8.05   

MFS PENNSYLVANIA MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.80%        $1,000.00        $1,028.45        $4.05   
  Hypothetical (h)     0.80%        $1,000.00        $1,020.94        $4.03   
B   Actual     1.55%        $1,000.00        $1,025.51        $7.83   
  Hypothetical (h)     1.55%        $1,000.00        $1,017.20        $7.80   

MFS SOUTH CAROLINA MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.89%        $1,000.00        $1,027.20        $4.50   
  Hypothetical (h)     0.89%        $1,000.00        $1,020.49        $4.48   
B   Actual     1.64%        $1,000.00        $1,023.39        $8.27   
  Hypothetical (h)     1.64%        $1,000.00        $1,016.75        $8.25   

MFS TENNESSEE MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.94%        $1,000.00        $1,025.38        $4.75   
  Hypothetical (h)     0.94%        $1,000.00        $1,020.24        $4.73   
B   Actual     1.69%        $1,000.00        $1,021.58        $8.52   
  Hypothetical (h)     1.69%        $1,000.00        $1,016.50        $8.50   

 

  (h) 5% class return per year before expenses.
  (p) “Expenses Paid During Period” are equal to each class’s annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher.

 

21

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Expense Tables – continued

 

MFS VIRGINIA MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.88%        $1,000.00        $1,026.55        $4.45   
  Hypothetical (h)     0.88%        $1,000.00        $1,020.54        $4.43   
B   Actual     1.63%        $1,000.00        $1,023.65        $8.22   
  Hypothetical (h)     1.63%        $1,000.00        $1,016.80        $8.20   
C   Actual     1.63%        $1,000.00        $1,022.73        $8.22   
  Hypothetical (h)     1.63%        $1,000.00        $1,016.80        $8.20   

Notes to Expense Table

For the MFS Virginia Municipal Bond Fund, expense ratios include 0.01% of investment related expenses from inverse floaters that are outside of the expense limitation arrangement (See Notes 2 and 3 of the Notes to Financial Statements).

MFS WEST VIRGINIA MUNICIPAL BOND FUND

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.90%        $1,000.00        $1,027.01        $4.55   
  Hypothetical (h)     0.90%        $1,000.00        $1,020.44        $4.53   
B   Actual     1.65%        $1,000.00        $1,022.31        $8.32   
  Hypothetical (h)     1.65%        $1,000.00        $1,016.70        $8.30   

 

  (h) 5% class return per year before expenses.
  (p) “Expenses Paid During Period” are equal to each class’s annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher.

 

22

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS MISSISSIPPI MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

 

Municipal Bonds - 98.9%             
    
Issuer    Shares/Par     Value ($)  
    
Airport Revenue - 1.9%                 
Dallas and Fort Worth, TX, International Airport Rev., “B”, 5%, 11/01/44    $ 115,000      $ 128,505   
Dallas and Fort Worth, TX, International Airport Rev., “C”, 5%, 11/01/45      75,000        83,473   
Jackson, MS, Municipal Airport Authority, Airport Rev., “A”, AMBAC, 5%, 10/01/31      1,000,000        1,020,120   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, 5%, 12/01/44      45,000        50,025   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, BAM, 5%, 12/01/39      230,000        263,150   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/39      35,000        38,818   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/44      60,000        66,391   
             $ 1,650,482   
General Obligations - General Purpose - 6.8%           
Canton, MS, Mississippi Development Bank Special Obligation, “A”, AGM, 5.75%, 10/01/31    $ 625,000      $ 730,644   
Guam Government, “A”, 6.75%, 11/15/29      35,000        40,136   
Guam Government, “A”, 5.25%, 11/15/37      155,000        158,376   
Guam Government, “A”, 7%, 11/15/39      40,000        47,235   
Gulfport, MI, AGM, 5%, 11/01/22      250,000        299,088   
Gulfport, MI, AGM, 5%, 11/01/24      500,000        607,980   
Jackson County, MS, Development Bank Special Obligations, AGM, 5.25%, 3/01/20      620,000        730,075   
Jackson County, MS, Development Bank Special Obligations, ASSD GTY, 5.625%, 7/01/39      1,000,000        1,146,750   
Mississippi Development Bank Special Obligation (Greenville, MS Project), 5%, 4/01/27      185,000        190,794   
State of California, 6%, 11/01/39      700,000        849,051   
State of Mississippi, Capital Improvement Projects, “A”, 5%, 10/01/30      1,000,000        1,162,800   
             $ 5,962,929   
General Obligations - Schools - 5.9%                 
Lamar County, MS, School District, 5%, 9/01/31    $ 1,095,000      $ 1,241,128   
Mississippi Development Bank Special Obligation (Jackson Public School District Limited Tax Refunding Note Project) “B”, 5%, 10/01/23      1,000,000        1,161,900   
Mississippi Development Bank Special Obligation (Jackson Public School District), AGM, 5.375%, 4/01/28      1,000,000        1,111,480   
Mississippi Development Bank, Special Obligation (Gulfport School District), BAM, 5%, 4/01/31      500,000        573,265   
              
Issuer    Shares/Par     Value ($)  
    
General Obligations - Schools - continued   
Mississippi Development Bank, Special Obligation (Gulfport School District), BAM, 5%, 4/01/32    $ 500,000      $ 571,160   
San Diego, CA, Unified School District (Election of 2008), Capital Appreciation, “C”, 0%, 7/01/35      1,020,000        474,983   
             $ 5,133,916   
Healthcare Revenue - Hospitals - 18.2%   
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), NATL, 6.125%, 7/01/15    $ 505,000      $ 507,197   
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), NATL, 6.2%, 7/01/18      1,000,000        1,003,500   
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), 5.75%, 7/01/31      500,000        501,610   
Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 8/15/44 (Prerefunded 8/15/19)      325,000        404,742   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 6/01/40      380,000        439,645   
Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 10/01/36      320,000        332,925   
Miami-Dade County, FL, Health Facilities Authority Hospital Rev. (Variety Children’s Hospital), “A”, 6%, 8/01/30      80,000        94,378   
Mississippi Development Bank Special Obligation (Magnolia Regional Health Center Project), “A”, 6.75%, 10/01/36      500,000        586,135   
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist Memorial Healthcare), “A”, 5%, 9/01/22      1,000,000        1,152,410   
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist Memorial Healthcare), “B-1”, 5%, 9/01/24      2,000,000        2,001,340   
Mississippi Hospital Equipment & Facilities Authority Rev. (Clay County Medical Corp.), 5%, 10/01/39      2,105,000        2,355,495   
Mississippi Hospital Equipment & Facilities Authority Rev. (Delta Regional Medical Center), FHA, 5%, 2/01/35      1,000,000        1,048,170   
Mississippi Hospital Equipment & Facilities Authority Rev. (Forrest County General Hospital), 5.25%, 1/01/29      1,000,000        1,105,400   
Mississippi Hospital Equipment & Facilities Authority Rev. (North Mississippi Health Services), “1”, 5%, 10/01/17      750,000        824,175   
Mississippi Hospital Equipment & Facilities Authority Rev., Refunding & Improvement, Hospital South Central, 5.25%, 12/01/31      500,000        515,660   
 

 

23

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued   
Mississippi Hospital Equipment & Facilities Authority Rev., Refunding & Improvement, Southwest Regional Medical Center, 5.5%, 4/01/19    $ 250,000      $ 250,195   
Mississippi Hospital Equipment & Facilities Authority Rev., Refunding & Improvement, Southwest Regional Medical Center, 5.75%, 4/01/23      250,000        250,065   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 10/01/27      215,000        244,386   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6.125%, 10/01/39      550,000        620,120   
St. Petersburg, FL, Health Facilities Authority Rev., 6.5%, 11/15/39      135,000        160,115   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 7/01/29      75,000        87,344   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 7/01/39      185,000        215,756   
Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2/15/39 (Prerefunded 2/15/19)      640,000        771,379   
Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Healthcare), 5.25%, 8/15/31      430,000        446,551   
             $ 15,918,693   
Industrial Revenue - Paper - 1.1%                 
Lowndes County, MS, Solid Waste Disposal & Pollution Control Rev. (Weyerhaeuser Co.), 6.8%, 4/01/22    $ 750,000      $ 949,868   
Miscellaneous Revenue - Other - 0.7%                 
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “1”, 5%, 11/15/44    $ 620,000      $ 652,525   
Multi-Family Housing Revenue - 1.3%                 
Mississippi Home Corp. Rev. (Kirkwood Apartments Project), 6.8%, 11/01/37 (d)(q)    $ 150,000      $ 106,067   
Mississippi Home Corp., Multifamily Rev. (Providence Place of Senatobia LLC), GNMA, 5.35%, 8/20/48      1,000,000        1,060,580   
             $ 1,166,647   
Sales & Excise Tax Revenue - 2.2%   
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6%, 1/15/41    $ 450,000      $ 516,497   
Guam Government Business Privilege Tax Rev., “A”, 5.25%, 1/01/36      295,000        330,297   
Massachusetts Bay Transportation Authority, Sales Tax Rev., “A-1”, 5.25%, 7/01/29      750,000        971,850   
              
Issuer    Shares/Par     Value ($)  
    
Sales & Excise Tax Revenue - continued   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 8/01/57    $ 200,000      $ 140,030   
             $ 1,958,674   
Single Family Housing - State - 3.1%                 
Mississippi Home Corp. Rev., Single Family Rev., “A-2 “, GNMA, 5.3%, 6/01/34    $ 90,000      $ 95,378   
Mississippi Home Corp. Rev., Single Family Rev., “A-2 “, GNMA, 5.625%, 6/01/39      115,000        122,069   
Mississippi Home Corp., Homeownership Mortgage Rev., “A”, 4.55%, 12/01/31      1,390,000        1,475,249   
Mississippi Housing Finance Corp., Single Family Mortgage Rev., Capital Appreciation, ETM, 0%, 6/01/15      1,000,000        999,530   
             $ 2,692,226   
State & Agency - Other - 1.2%                 
Mississippi Development Bank Special Obligations, Harrison County Mississippi Highway Construction, “N”, FGIC, 5%, 1/01/26 (Prerefunded 1/01/16)    $ 1,000,000      $ 1,035,800   
State & Local Agencies - 21.5%                 
Los Angeles, CA, Municipal Improvement Corp. Lease Rev. (Real Property), “E”, 6%, 9/01/39    $ 190,000      $ 223,142   
Mississippi Development Bank Special Obligation (Laurel, MS, Highway Refunding Project), “B”, 4%, 1/01/22      735,000        835,328   
Mississippi Development Bank Special Obligation (Capital Project & Equipment), AGM, 5%, 7/01/28 (Prerefunded 7/01/17)      680,000        745,314   
Mississippi Development Bank Special Obligation (Capital Projects), AGM, 5%, 7/01/28      640,000        691,699   
Mississippi Development Bank Special Obligation (City of Jackson, MS), AMBAC, 4.375%, 3/01/31 (Prerefunded 3/01/16)      1,400,000        1,452,668   
Mississippi Development Bank Special Obligation (Department of Corrections), “C”, 5.25%, 8/01/27      1,000,000        1,158,160   
Mississippi Development Bank Special Obligation (Department of Rehabilitation Services Capital Improvement Project), AGM, 5%, 7/01/23      345,000        399,151   
Mississippi Development Bank Special Obligation (Department of Rehabilitation Services Capital Improvement Project), AGM, 5%, 7/01/24      360,000        416,275   
Mississippi Development Bank Special Obligation (Department of Rehabilitation Services Capital Improvement Project), AGM, 5%, 7/01/25      380,000        435,947   
Mississippi Development Bank Special Obligation (Desoto County Mississippi Highway Construction Project), 5%, 1/01/29      500,000        579,535   
Mississippi Development Bank Special Obligation (Desoto County Mississippi Highway Construction Project), 5%, 1/01/30      500,000        578,020   
 

 

24

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
State & Local Agencies - continued   
Mississippi Development Bank Special Obligation (DeSoto County Regional Utility Authority), 5.25%, 7/01/31    $ 905,000      $ 960,495   
Mississippi Development Bank Special Obligation (Forrest County Public Improvement Project), 5%, 2/01/29      1,000,000        1,094,880   
Mississippi Development Bank Special Obligation (Harrison County Coliseum), “A”, 5.25%, 1/01/34      1,000,000        1,279,110   
Mississippi Development Bank Special Obligation (Harrison County), “D”, ASSD GTY, 4.75%, 10/01/28      1,120,000        1,265,174   
Mississippi Development Bank Special Obligation (Jackson County), ASSD GTY, 5%, 7/01/22      500,000        581,805   
Mississippi Development Bank Special Obligation (Jackson County), ASSD GTY, 5.375%, 7/01/36      500,000        573,945   
Mississippi Development Bank Special Obligation (Mississippi Highway Construction), AMBAC, 4.75%, 1/01/35      500,000        542,340   
Mississippi Development Bank Special Obligation (Montfort Jones Memorial Hospital Project), 5.75%, 5/01/36      500,000        571,445   
Mississippi Development Bank Special Obligation (Southaven Water & Sewer System), ASSD GTY, 5%, 3/01/29      750,000        859,973   
Mississippi Development Bank Special Obligation (Tunica County Building Project), AMBAC, 5%, 7/01/26 (Prerefunded 7/01/16)      1,695,000        1,793,649   
Mississippi Development Bank Special Obligation (Washington County Regional Correctional Facility), ASSD GTY, 4.75%, 7/01/31      1,200,000        1,307,808   
Mississippi Development Bank Special Obligation, Madison County (Highway Construction), FGIC, 5%, 1/01/27 (Prerefunded 7/01/16)      500,000        529,100   
             $ 18,874,963   
Tax - Other - 1.9%                 
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24    $ 125,000      $ 139,486   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      40,000        44,373   
Virgin Islands Public Finance Authority Rev. (Diageo Project), “A”, 6.75%, 10/01/37      110,000        125,948   
Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 10/01/29      790,000        853,974   
Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 10/01/39      95,000        101,990   
Virgin Islands Public Finance Authority Rev., “B”, 5%, 10/01/25      85,000        93,839   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, 6%, 10/01/39      295,000        326,367   
             $ 1,685,977   
              
Issuer    Shares/Par     Value ($)  
    
Tobacco - 0.7%                 
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28    $ 420,000      $ 500,312   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.75%, 6/01/34      155,000        118,463   
             $ 618,775   
Toll Roads - 0.9%                 
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 7%, 12/31/38    $ 110,000      $ 137,262   
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 6.75%, 6/30/43      85,000        104,013   
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 6%, 1/01/37      195,000        226,916   
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 5.5%, 1/01/42      310,000        340,427   
             $ 808,618   
Transportation - Special Tax - 1.4%                 
Commonwealth of Puerto Rico Highway & Transportation Authority Rev., AGM, 5.25%, 7/01/33    $ 1,135,000      $ 1,186,665   
Universities - Colleges - 16.2%   
Alcorn State University, MS, Educational Building Corp. Rev. (Student Housing Project), “A”, 5.125%, 9/01/34    $ 1,000,000      $ 1,135,680   
Alcorn State University, MS, Educational Building Corp. Rev. (Student Housing Project), “A”, 5.25%, 9/01/39      920,000        1,047,162   
Jackson State University, Educational Building Corp. Rev., “A-1”, 5%, 3/01/34      1,500,000        1,691,715   
Massachusetts Health & Educational Facilities Authority Rev. (Massachusetts Institute of Technology), “I-1”, 5.2%, 1/01/28      920,000        1,202,652   
Medical Center, Educational Building Corp. Rev. (University of Mississippi Medical Center), “B”, AMBAC, 5.5%, 12/01/23      1,000,000        1,184,190   
Mississippi State University Educational Building Corp. Rev. (Campus Improvement Project), 5%, 11/01/27      400,000        484,528   
Mississippi State University Educational Building Corp. Rev. (Campus Improvement Project), 5%, 11/01/28      350,000        420,805   
Mississippi State University, Educational Building Corp. Rev. (New Facilities and Refinancing Project), “A”, 5%, 8/01/43      1,000,000        1,147,680   
Mississippi Valley State University, Educational Building Corp. Rev., AMBAC, 4.5%, 3/01/37      1,000,000        1,021,900   
New York Dormitory Authority Rev. (New York University), “1”, AMBAC, 5.5%, 7/01/40      590,000        791,585   
 

 

25

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Universities - Colleges - continued   
University of Mississippi, Educational Building Corp. Rev. (Residential College Project), “A”, 5%, 10/01/33    $ 1,500,000      $ 1,662,240   
University of Mississippi, Educational Building Corp. Rev. (Residential College Project), “C”, 4.75%, 11/01/34      715,000        795,588   
University of Southern Mississippi, COP (Package Facilities Project), ASSD GTY, 5.125%, 9/15/39      490,000        551,407   
University of Southern Mississippi, Educational Building Corp. Rev., “B”, AGM, 5%, 3/01/32      1,000,000        1,035,860   
             $ 14,172,992   
Universities - Dormitories - 4.6%                 
Mississippi Business Finance Corp., Rev. (Statesman Housing LLC Project), “A”, 4.75%, 6/01/39    $ 1,000,000      $ 1,068,730   
Mississippi State University, Educational Building Corp. Rev., 5%, 8/01/36      1,585,000        1,793,887   
Mississippi State University, Educational Building Corp. Rev., 5.25%, 8/01/38      1,000,000        1,158,380   
             $ 4,020,997   
Utilities - Investor Owned - 0.8%                 
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.625%, 7/01/20    $ 370,000      $ 437,736   
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.5%, 8/01/29 (Put Date 8/01/16)      265,000        279,586   
             $ 717,322   
Utilities - Municipal Owned - 3.1%                 
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/33    $ 315,000      $ 367,876   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/39      75,000        87,050   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/44      85,000        98,202   
Long Island, NY, Power Authority, Electric Systems Rev., “A”, 6%, 5/01/33      155,000        181,429   
Mississippi Development Bank Special Obligation (Columbus Electric Systems Project), ASSD GTY, 4.7%, 7/01/27      155,000        171,714   
Mississippi Development Bank Special Obligation (Columbus Electric Systems Project), ASSD GTY, 4.75%, 7/01/28      100,000        112,299   
Mississippi Development Bank Special Obligation (Columbus Electric Systems Project), ASSD GTY, 4.85%, 7/01/29      485,000        545,252   
Mississippi Development Bank Special Obligation (Municipal Energy Agency Power Supply Project), “A”, SYNCORA, 5%, 3/01/26      1,000,000        1,020,000   
Puerto Rico Electric Power Authority Rev., “DDD”, AGM, 3.625%, 7/01/23      15,000        14,005   
Puerto Rico Electric Power Authority Rev., “DDD”, AGM, 3.65%, 7/01/24      80,000        74,208   
              
Issuer    Shares/Par     Value ($)  
    
Utilities - Municipal Owned - continued   
Puerto Rico Electric Power Authority Rev., “SS”, ASSD GTY, 4.375%, 7/01/30    $ 10,000      $ 9,158   
Puerto Rico Electric Power Authority Rev., “UU”, ASSD GTY, 4.25%, 7/01/27      60,000        56,173   
             $ 2,737,366   
Utilities - Other - 0.9%                 
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/19    $ 375,000      $ 426,098   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/21      185,000        214,391   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/22      95,000        110,696   
             $ 751,185   
Water & Sewer Utility Revenue - 4.5%           
Grenada, MS, Development Bank Special Obligations (Water & Sewer Systems Project), “N”, AGM, 5%, 9/01/30 (Prerefunded 9/15/15)    $ 1,000,000      $ 1,020,040   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.625%, 7/01/40      285,000        317,994   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/29      30,000        33,984   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/35      30,000        33,604   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “C-7”, NATL, 5%, 7/01/32      25,000        27,690   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/35      15,000        16,651   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/37      35,000        38,795   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-6”, NATL, 5%, 7/01/36      30,000        32,931   
Mississippi Development Bank Special Obligation (City of Jackson Water and Sewer System Rev. Bond Project), AGM, 6.875%, 12/01/40      750,000        983,535   
Mississippi Development Bank Special Obligations (Jackson Water & Sewer System Project), “A”, AGM, 5%, 9/01/23      1,220,000        1,422,825   
      $ 3,928,049   

Total Municipal Bonds

(Identified Cost, $79,678,302)

  

  

   $ 86,624,669   
Money Market Funds - 0.5%                 
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      392,651      $ 392,651   

Total Investments

(Identified Cost, $80,070,953)

  

  

   $ 87,017,320   
Other Assets, Less Liabilities - 0.6%        565,088   
Net Assets - 100.0%      $ 87,582,408   

See Portfolio Footnotes and Notes to Financial Statements

 

 

26

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS NEW YORK MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 94.1%             
    
Issuer    Shares/Par     Value ($)  
    
Airport Revenue - 3.2%                 
Chicago, IL, O’Hare International Airport Rev., Third Lien, “A”, 5.625%, 1/01/35    $ 555,000      $ 641,652   
Dallas and Fort Worth, TX, International Airport Rev., “B”, 5%, 11/01/44      245,000        273,780   
Dallas and Fort Worth, TX, International Airport Rev., “C”, 5%, 11/01/45      170,000        189,205   
New York, NY, City Industrial Development Agency, Special Facilities Rev. (Terminal One Group), 5.5%, 1/01/24      1,000,000        1,035,450   
Niagara, NY, Frontier Transportation Authority Rev. (Buffalo-Niagara International Airport), “A”, 5%, 4/01/28      650,000        737,198   
Niagara, NY, Frontier Transportation Authority Rev. (Buffalo-Niagara International Airport), “A”, 5%, 4/01/29      500,000        560,345   
Port Authority of NY & NJ, Special Obligation Rev. (JFK International Air Terminal LLC), NATL, 6.25%, 12/01/15      1,000,000        1,023,940   
Port Authority of NY & NJ, Special Obligation Rev. (JFK International Air Terminal LLC), 6%, 12/01/42      1,160,000        1,365,842   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, 5%, 12/01/44      90,000        100,050   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, BAM, 5%, 12/01/39      15,000        17,162   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/39      80,000        88,726   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/44      130,000        143,846   
             $ 6,177,196   
General Obligations - General Purpose - 5.6%   
Guam Government, “A”, 5.25%, 11/15/37    $ 290,000      $ 296,316   
Guam Government, “A”, 7%, 11/15/39      105,000        123,991   
Nassau County, NY, General Improvement, “B”, 5%, 4/01/23      1,820,000        2,157,519   
New York, NY, “B”, 5%, 8/01/18      3,000,000        3,380,070   
New York, NY, “E”, 5%, 8/01/21      2,500,000        2,975,550   
New York, NY, “E-1”, 6.25%, 10/15/28      1,000,000        1,180,160   
New York, NY, “J”, FGIC, 5.5%, 2/15/26      5,000        5,022   
Onondaga County, NY, General Obligation, 5%, 5/01/29      750,000        876,045   
             $ 10,994,673   
General Obligations - Schools - 0.3%           
Port Byron, NY, Central School District, ETM, AMBAC, 7.4%, 6/15/15    $ 500,000      $ 507,420   
              
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - 10.6%   
Chautauqua County, NY, Capital Resource Corp. Rev. (Women’s Christian Assn.), “A”, 8%, 11/15/30    $ 550,000      $ 575,531   
Dutchess County, NY, Local Development Corp. Rev. (Health Quest Systems), “A”, 5%, 7/01/44      1,000,000        1,106,770   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.25%, 7/01/31      215,000        252,799   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.375%, 7/01/41      245,000        287,067   
Madison County, NY, Industrial Development Agency, Civic Facilities Rev. (Oneida), 5.25%, 2/01/27      1,425,000        1,461,352   
Miami-Dade County, FL, Health Facilities Authority Hospital Rev. (Variety Children’s Hospital), “A”, 6%, 8/01/30      165,000        194,654   
Monroe County, NY, Industrial Development Agency, Civic Facilities Rev. (Highland Hospital of Rochester), 5%, 8/01/25      995,000        1,008,363   
Nassau County, NY, Local Economic Assistance Corp. Rev. (Catholic Health Services of Long Island Obligated Group Project), 5%, 7/01/32      1,000,000        1,131,960   
New Hampshire Business Finance Authority Rev. (Huggins Hospital), 6.875%, 10/01/39      35,000        37,893   
New York Dormitory Authority Rev., Non-State Supported Debt (Bronx-Lebanon Hospital Center), LOC, 6.25%, 2/15/35      1,495,000        1,724,527   
New York Dormitory Authority Rev., Non-State Supported Debt (Hospital Special Surgery), FHA, 6.25%, 8/15/34      1,995,000        2,390,469   
New York Dormitory Authority Rev., Non-State Supported Debt (Mount Sinai Hospital), “A”, 5%, 7/01/26      2,000,000        2,277,220   
New York Dormitory Authority Rev., Non-State Supported Debt (NYU Hospitals Center), “A”, 5.5%, 7/01/25      750,000        865,020   
New York Dormitory Authority Rev., Non-State Supported Debt (Orange Regional Medical Center), 6.25%, 12/01/37      750,000        824,693   
New York, NY, Health & Hospital Corp. Rev., “A”, 5.5%, 2/15/23      1,000,000        1,121,990   
Royal Oak, MI, Hospital Finance Authority Rev. (William Beaumont Hospital), 5%, 9/01/39      1,290,000        1,440,221   
Suffolk County, NY, Economic Development Corp. Rev. (Catholic Health Services of Long Island), 5%, 7/01/28      1,000,000        1,104,760   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 7/01/29      165,000        192,157   
 

 

27

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 7/01/39    $ 395,000      $ 460,669   
Westchester County, NY, Health Care Corp. Rev., “B”, 6%, 11/01/30      1,000,000        1,167,780   
Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Healthcare), 5.25%, 8/15/31      945,000        981,373   
             $ 20,607,268   
Healthcare Revenue - Long Term Care - 1.7%   
Suffolk County, NY, Economic Development Corp. Rev. (Peconic Landing at Southold, Inc.), 6%, 12/01/40    $ 1,000,000      $ 1,111,150   
Tompkins County, NY, Development Corp. Continuing Care Retirement Community Rev. (Kendal at Ithica, Inc. Project), “A”, 5%, 7/01/44      1,000,000        1,088,730   
Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7%, 11/01/30      120,000        141,196   
Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7.125%, 11/01/40      180,000        210,004   
Ulster County, NY, Industrial Development Agency (Woodland Pond), “A”, 6%, 9/15/37      500,000        496,325   
Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.25%, 9/15/29      20,000        23,528   
Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.625%, 9/15/39      130,000        154,302   
             $ 3,225,235   
Human Services - 0.4%                 
New York Dormitory Authority Rev., Non-State Supported Debt (NYSARC, Inc.), “A”, 6%, 7/01/32    $ 705,000      $ 829,080   
Industrial Revenue - Airlines - 0.3%           
New York, NY, City Industrial Development Agency Special Facility Rev. (American Airlines, Inc. - JFK International Airport Project), 7.625%, 8/01/25    $ 350,000      $ 380,937   
New York, NY, City Industrial Development Agency Special Facility Rev. (American Airlines, Inc. - JFK International Airport Project), 7.75%, 8/01/31      100,000        109,036   
             $ 489,973   
Industrial Revenue - Environmental Services - 0.6%   
Niagara County, NY, Industrial Development Agency, Solid Waste Disposal Rev. (Covanta Energy Project), “A”, 5.25%, 11/01/42    $ 1,160,000      $ 1,206,400   
              
Issuer    Shares/Par     Value ($)  
    
Industrial Revenue - Other - 0.8%                 
New York, NY, City Industrial Development Agency Rev., Liberty Bonds (IAC/InterActiveCorp), 5%, 9/01/35    $ 250,000      $ 253,600   
Onondaga County, NY, Industrial Development Agency, Sewer Facilities Rev. (Bristol-Meyers Squibb Co.), 5.75%, 3/01/24      1,000,000        1,264,240   
             $ 1,517,840   
Industrial Revenue - Paper - 0.9%           
Build NYC Resource Corp. Solid Waste Disposal Rev. (Pratt Paper, Inc. Project), 4.5%, 1/01/25    $ 1,200,000      $ 1,301,448   
Essex County, NY, Industrial Development Agency, Pollution Control Rev. (International Paper Corp.), 6.15%, 4/01/21      470,000        470,978   
             $ 1,772,426   
Miscellaneous Revenue - Entertainment & Tourism - 1.1%   
Brooklyn, NY, Arena Local Development Corp. (Barclays Center Project), 6.25%, 7/15/40    $ 1,750,000      $ 2,064,300   
Miscellaneous Revenue - Other - 6.9%                 
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/40    $ 205,000      $ 220,916   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/44      315,000        338,074   
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “1”, 5%, 11/15/44      1,380,000        1,452,395   
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “2”, 5.375%, 11/15/40      1,500,000        1,658,025   
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “3”, 7.25%, 11/15/44      500,000        606,130   
New York Liberty Development Corp., Liberty Rev. (7 World Trade Center Project), 5%, 9/15/40      1,665,000        1,909,755   
New York Liberty Development Corp., Liberty Rev. (One Bryant Park LLC), 6.375%, 7/15/49      2,500,000        2,867,625   
New York Liberty Development Corp., Liberty Rev. (World Trade Center Project), 5%, 11/15/44      1,000,000        1,114,950   
New York, NY, Industrial Development Agency, Airport Facilities Rev. (Transportation Infrastructure Properties LLC), 5%, 7/01/28      3,000,000        3,313,080   
             $ 13,480,950   
Multi-Family Housing Revenue - 3.5%   
East Rochester, NY, Housing Authority Rev. (Woodland Village Project), 5.5%, 8/01/33    $ 400,000      $ 406,884   
New York Housing Finance Agency Rev. (Affordable Housing), “D”, 5%, 11/01/40      1,520,000        1,596,562   
New York Housing Finance Agency Rev., “A”, 5.1%, 8/15/41      740,000        742,916   
 

 

28

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Multi-Family Housing Revenue - continued   
New York Housing Finance Agency Rev., “A”, 5.25%, 11/01/41    $ 1,000,000      $ 1,057,820   
New York, NY, City Housing Development Corp., 5.5%, 11/01/34      15,000        15,040   
New York, NY, City Housing Development Corp. (8 Spruce Street), “F”, 4.5%, 2/15/48      1,500,000        1,531,980   
New York, NY, City Housing Development Corp., “C”, 5%, 11/01/26      500,000        504,830   
New York, NY, City Housing Development Corp., Multifamily Housing Rev., 4.8%, 11/01/35      1,000,000        1,060,560   
             $ 6,916,592   
Sales & Excise Tax Revenue - 1.0%                 
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6%, 1/15/34    $ 1,000,000      $ 1,149,880   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/16      180,000        191,948   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/17      200,000        218,988   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 8/01/28 (Prerefunded 8/01/19)      10,000        11,804   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “C”, 5.25%, 8/01/40      540,000        390,150   
             $ 1,962,770   
State & Agency - Other - 0.7%                 
New York Dormitory Authority Rev. (State University) , “B”, FGIC, 5.25%, 5/15/19    $ 550,000      $ 597,460   
New York Dormitory Authority Rev., City University System, AMBAC, 5.75%, 7/01/18      650,000        706,180   
             $ 1,303,640   
State & Local Agencies - 11.5%                 
Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.925%, 6/01/37    $ 1,405,000      $ 1,189,417   
New York City Educational Construction Fund Rev., “A”, 5.75%, 4/01/33      1,860,000        2,222,626   
New York Dormitory Authority Rev. (School Program), 6.25%, 7/01/20      1,225,000        1,231,174   
New York Dormitory Authority Rev., City University System, “A”, 5.625%, 7/01/16      1,735,000        1,802,943   
New York Dormitory Authority Rev., Non-State Supported Debt, “A”, 5%, 10/01/20      2,000,000        2,359,820   
New York Dormitory Authority Rev., State Personal Income Tax, “A”, 5%, 12/15/25      2,000,000        2,442,560   
New York Dormitory Authority Rev., State Personal Income Tax, “D”, 5%, 3/15/23      1,300,000        1,586,572   
New York Dormitory Authority Rev., State Personal Income Tax, “D”, 5%, 2/15/40      830,000        954,035   
New York Dormitory Authority Rev., State University Educational Facilities, “A”, 5.875%, 5/15/17      1,130,000        1,216,366   
              
Issuer    Shares/Par     Value ($)  
    
State & Local Agencies - continued                 
New York Urban Development Corp. Rev., “D”, 5.625%, 1/01/28    $ 2,000,000      $ 2,321,140   
New York Urban Development Corp. Rev., State Personal Income Tax, “C”, 5%, 12/15/18      3,000,000        3,419,880   
New York Urban Development Corp., State Personal Income Tax Rev., “C”, 5%, 3/15/28      1,000,000        1,187,260   
United Nations Development Corp., “A”, 5%, 7/01/26      500,000        565,595   
             $ 22,499,388   
Tax - Other - 7.7%                 
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24    $ 270,000      $ 301,290   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      90,000        99,840   
Hudson Yards, NY, Infrastructure Corp. Rev., “A”, 5.75%, 2/15/47      3,000,000        3,496,020   
New York, NY, City Transitional Finance Authority Building Aid Rev., “S-2A”, 5%, 7/15/40      2,000,000        2,249,560   
New York, NY, City Transitional Finance Authority Building Aid Rev., “S-3”, 5.25%, 1/15/39      2,000,000        2,250,580   
New York, NY, City Transitional Finance Authority Building Aid Rev., “S-5”, 5%, 1/15/32      1,000,000        1,118,120   
New York, NY, City Transitional Finance Authority Rev., “D”, 5%, 2/01/27      3,000,000        3,491,280   
Virgin Islands Public Finance Authority Rev. (Diageo), “A”, 6.625%, 10/01/29      605,000        689,573   
Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 10/01/39      1,250,000        1,341,975   
             $ 15,038,238   
Tobacco - 3.6%                 
Buckeye, OH, Tobacco Settlement Financing Authority, “A-3”, 6.25%, 6/01/37    $ 765,000      $ 671,639   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 6/01/47      775,000        652,511   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-2”, 5.3%, 6/01/37      1,235,000        1,020,653   
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28      355,000        422,883   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.5%, 6/01/23      460,000        461,104   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.75%, 6/01/34      645,000        492,961   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 5%, 6/01/41      1,025,000        786,144   
New York County Tobacco Trust II, 5.625%, 6/01/35      795,000        796,224   
Suffolk, NY, Tobacco Asset Securitization Corp., Tobacco Settlement, “B”, 5%, 6/01/32      750,000        823,223   
TSASC, Inc., NY, “1”, 5.125%, 6/01/42      415,000        355,306   
 

 

29

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Tobacco - continued                 
Westchester, NY, Tobacco Asset Securitization Corp., 5.125%, 6/01/45    $ 500,000      $ 468,320   
             $ 6,950,968   
Toll Roads - 2.0%                 
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 7%, 12/31/38    $ 205,000      $ 255,807   
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 6.75%, 6/30/43      170,000        208,026   
Triborough Bridge & Tunnel Authority Rev., NY, “A”, 5%, 1/01/28      1,000,000        1,178,150   
Triborough Bridge & Tunnel Authority Rev., NY, “A-2”, 5%, 11/15/29      2,000,000        2,266,220   
             $ 3,908,203   
Transportation - Special Tax - 1.2%                 
Metropolitan Transportation Authority Rev., NY, “C”, 6.5%, 11/15/28    $ 2,000,000      $ 2,385,640   
Universities - Colleges - 19.1%                 
Albany, NY, Capital Resource Corp. Rev. (Albany College of Pharmacy Project), “A”, 5%, 12/01/33    $ 125,000      $ 141,685   
Albany, NY, Capital Resource Corp. Rev. (The College Saint Rose), “A”, 5.625%, 7/01/31      1,000,000        1,120,090   
Dobbs Ferry, NY, Local Development Corp. (Mercy College Project), 5%, 7/01/39      1,000,000        1,126,870   
Hempstead, NY, Industrial Development Agency Civic Rev. (Adelphi University), 5%, 10/01/30      1,515,000        1,551,405   
Hempstead, NY, Local Development Corp. Rev. (Adelphi University), “B”, 5.25%, 2/01/39      500,000        559,155   
Hempstead, NY, Local Development Corp. Rev. (Hofstra University Project), 5%, 7/01/28      1,000,000        1,125,000   
Illinois Finance Authority Rev. (Roosevelt University Project), 6.25%, 4/01/29      1,945,000        2,201,370   
Madison County, NY, Industrial Development Agency Civic Facilities Rev. (Colgate University), “A”, AMBAC, 5%, 7/01/35      1,585,000        1,602,974   
Miami-Dade County, FL, Educational Facilities Authority Rev. (University of Miami), “B”, 5.25%, 4/01/29      1,325,000        1,617,825   
Monroe County, NY, Industrial Development Corp. Rev., “A”, 5%, 7/01/23      500,000        583,395   
Monroe County, NY, Industrial Development Corp. Rev., “A”, 5%, 7/01/24      1,000,000        1,158,840   
New Jersey Educational Facilities Authority Rev. (University of Medicine & Dentistry), “B”, ETM, 6%, 12/01/17      985,000        1,091,252   
New York Dormitory Authority Rev., 5.25%, 7/01/48      1,955,000        2,175,798   
              
Issuer    Shares/Par     Value ($)  
    
Universities - Colleges - continued                 
New York Dormitory Authority Rev. (New York University), “1”, AMBAC, 5.5%, 7/01/40    $ 1,285,000      $ 1,724,046   
New York Dormitory Authority Rev., Non-State Supported Debt (Barnard College), “A”, 5%, 7/01/27      500,000        608,865   
New York Dormitory Authority Rev., Non-State Supported Debt (Barnard College), “A”, 5%, 7/01/28      400,000        481,684   
New York Dormitory Authority Rev., Non-State Supported Debt (Brooklyn Law School), 5.75%, 7/01/33      600,000        679,566   
New York Dormitory Authority Rev., Non-State Supported Debt (Cornell University), “A”, 5%, 7/01/31      2,000,000        2,111,360   
New York Dormitory Authority Rev., Non-State Supported Debt (Manhattan Marymount), 5.125%, 7/01/39      2,000,000        2,247,740   
New York Dormitory Authority Rev., Non-State Supported Debt (Pace University), “A”, 5%, 5/01/38      500,000        543,945   
New York Dormitory Authority Rev., Non-State Supported Debt (Pratt Institute), “A”, 5%, 7/01/44      1,500,000        1,701,780   
New York Dormitory Authority Rev., Non-State Supported Debt (St. John’s University), “A”, 5%, 7/01/27      1,535,000        1,830,273   
New York Dormitory Authority Rev., Non-State Supported Debt (St. Josephs College), 5.25%, 7/01/35      2,000,000        2,154,480   
Onondaga, NY, Civic Development Corp. Rev. (Le Moyne College Project), 5.375%, 7/01/40      2,000,000        2,171,320   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.125%, 4/01/32      80,000        70,506   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.375%, 4/01/42      135,000        116,247   
Seneca County, NY, Industrial Development Agency, Civic Facilities Rev. (New York Chiropractic), 5%, 10/01/27      500,000        536,920   
St. Lawrence County, NY, Industrial Development Agency Rev. (Clarkson University), 5%, 7/01/31      2,225,000        2,394,056   
Troy, NY, Industrial Development Authority, Civic Facility Rev. (Rensselaer Polytechnic Institute), “E”, 5%, 9/01/31      1,000,000        1,104,860   
Yonkers, NY, Industrial Development Agency, Civic Facilities Rev. (Sarah Lawrence College Project), “A”, 6%, 6/01/41      595,000        680,216   
             $ 37,213,523   
 

 

30

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Universities - Dormitories - 2.5%                 
Buffalo & Erie County, NY, Industrial Land Development Corp. Rev. (Buffalo State College), “A”, 5.375%, 10/01/41    $ 2,000,000      $ 2,246,800   
Build NYC Resource Corp. Rev. (Q Student Residences, LLC Project), “A”, 5%, 6/01/38      1,000,000        1,148,840   
Build NYC Resource Corp. Rev. (Q Student Residences, LLC Project), “A”, 5%, 6/01/43      1,300,000        1,484,574   
             $ 4,880,214   
Universities - Secondary Schools - 1.6%   
Build NYC Resource Corp. Rev. (International Leadership Charter School Project), 6%, 7/01/43 (n)    $ 750,000      $ 741,863   
Build NYC Resource Corp. Rev. (South Bronx Charter School for International Cultures and the Arts), “A”, 5%, 4/15/43      1,000,000        1,017,860   
Build NYC Resource Corp. Rev. (The Packer Collegiate Institute Project), 5%, 6/01/40      675,000        764,046   
La Vernia, TX, Higher Education Finance Corp. Rev. (Lifeschool of Dallas), “A”, 7.5%, 8/15/41 (Prerefunded 8/15/19)      535,000        672,677   
             $ 3,196,446   
Utilities - Municipal Owned - 3.2%                 
Guam Power Authority Rev., “A”, 5.5%, 10/01/30    $ 515,000      $ 584,304   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/39      155,000        179,904   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/44      180,000        207,958   
Long Island, NY, Power Authority, Electric Systems Rev., “A”, 5%, 5/01/21      1,500,000        1,739,190   
Long Island, NY, Power Authority, Electric Systems Rev., “A”, 6.25%, 4/01/33      1,000,000        1,169,430   
Long Island, NY, Power Authority, Electric Systems Rev., “A”, 6%, 5/01/33      2,000,000        2,341,020   
             $ 6,221,806   
              
Issuer    Shares/Par     Value ($)  
    
Utilities - Other - 0.8%                 
Public Authority for Colorado Energy Natural Gas Purchase Rev., 6.5%, 11/15/38    $ 1,085,000      $ 1,490,823   
Texas Gas Acquisition & Supply Corp III., Gas Supply Rev., 5%, 12/15/31      115,000        127,129   
             $ 1,617,952   
Water & Sewer Utility Revenue - 3.3%                 
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.625%, 7/01/40    $ 315,000      $ 351,468   
Mississippi Development Bank Special Obligation (City of Jackson Water and Sewer System Rev. Bond Project), AGM, 6.875%, 12/01/40      100,000        131,138   
New York Environmental Facilities Corp., Clean Water & Drinking Rev., “B”, 5%, 6/15/33      2,140,000        2,384,281   
New York, NY, Municipal Water & Sewer Finance Authority Rev., 4.75%, 6/15/30      1,245,000        1,345,783   
New York, NY, Municipal Water Finance Authority, Water & Sewer Systems Rev., “DD”, 5%, 6/15/34      2,000,000        2,310,980   
             $ 6,523,650   
Total Municipal Bonds (Identified Cost, $167,403,638)            $ 183,491,791   
Money Market Funds - 5.8%                 
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      11,356,169      $ 11,356,169   
Total Investments (Identified Cost, $178,759,807)            $ 194,847,960   
Other Assets, Less Liabilities - 0.1%        269,547   
Net Assets - 100.0%            $ 195,117,507   

See Portfolio Footnotes and Notes to Financial Statements

 

 

31

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS NORTH CAROLINA MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 98.0%             
    
Issuer    Shares/Par     Value ($)  
    
Airport Revenue - 4.3%                 
Charlotte, NC, Airport Rev. (Charlotte/Douglas International Airport), AMBAC, 5%, 7/01/23    $ 1,430,000      $ 1,559,537   
Charlotte, NC, Airport Rev., “A”,
4.75%, 7/01/28		      1,250,000        1,370,438   
Charlotte, NC, Airport Rev., “A”, 5%, 7/01/36      3,000,000        3,357,630   
Charlotte, NC, Douglas International Airport Rev, “A”, 5%, 7/01/32      1,245,000        1,450,238   
Chicago, IL, O’Hare International Airport Rev., Third Lien, “A”, 5.625%, 1/01/35      1,055,000        1,219,728   
Dallas and Fort Worth, TX, International Airport Rev., “B”, 5%, 11/01/44      440,000        491,687   
Dallas and Fort Worth, TX, International Airport Rev., “C”, 5%, 11/01/45      305,000        339,456   
Raleigh Durham, NC, Airport Authority Rev., “A”, 5%, 5/01/36      3,440,000        3,911,452   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, 5%, 12/01/44      175,000        194,542   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, BAM, 5%, 12/01/39      195,000        223,105   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/39      150,000        166,362   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/44      240,000        265,562   
             $ 14,549,737   
General Obligations - General Purpose - 2.5%           
Guam Government, “A”, 6.75%, 11/15/29    $ 240,000      $ 275,215   
Guam Government, “A”, 7%, 11/15/39      265,000        312,931   
Mecklenburg County, NC, “A”, 5%, 8/01/18      5,100,000        5,779,320   
New Hanover County, NC, Public Improvement, “A”, 5%, 8/01/30      2,000,000        2,318,780   
             $ 8,686,246   
General Obligations - Schools - 3.0%           
Johnston County, NC, “B”, 5%, 2/01/18    $ 1,425,000      $ 1,593,221   
Moorpark, CA, Unified School District (Election of 2008), Capital Appreciation, “B”, AGM,
0%, 8/01/36		      3,705,000        1,501,192   
Wake County, NC, “C”, 5%, 3/01/24      5,570,000        6,994,026   
             $ 10,088,439   
Healthcare Revenue - Hospitals - 20.5%           
Albemarle, NC, Hospital Authority Health Care Facilities Rev., 5.25%, 10/01/38 (Prerefunded 10/01/17)    $ 2,000,000      $ 2,214,840   
Charlotte-Mecklenburg, NC, Hospital Authority Health Care System Rev. (Carolinas Health Care System), “A”, 5%, 1/15/31      1,000,000        1,060,610   
              
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued           
Charlotte-Mecklenburg, NC, Hospital Authority Health Care System Rev. (Carolinas Health Care System), “A”, 5.25%, 1/15/34    $ 4,000,000      $ 4,471,560   
Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 8/15/44      1,140,000        1,419,710   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital),
6.25%, 7/01/31		      360,000        423,292   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital),
6.375%, 7/01/41		      525,000        615,143   
Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.),
5.25%, 10/01/36		      1,820,000        1,893,510   
Miami-Dade County, FL, Health Facilities Authority Hospital Rev. (Variety Children’s Hospital), “A”, 6%, 8/01/30      310,000        365,713   
Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 11/15/39      1,450,000        1,648,346   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”,
6%, 10/01/27		      790,000        897,977   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”,
6.125%, 10/01/39		      1,110,000        1,251,514   
New Hampshire Business Finance Authority Rev. (Huggins Hospital), 6.875%, 10/01/39      55,000        59,547   
North Carolina Hospital Authority Mortgage Rev. (Johnston Memorial), AGM,
5.25%, 10/01/36		      1,960,000        2,154,079   
North Carolina Medical Care Commission, Health Care Facilities Rev. (Appalachian Regional Healthcare System), “A”,
6.375%, 7/01/26		      2,000,000        2,386,400   
North Carolina Medical Care Commission, Health Care Facilities Rev. (Appalachian Regional Healthcare System), “A”,
6.5%, 7/01/31		      1,000,000        1,183,050   
North Carolina Medical Care Commission, Health Care Facilities Rev. (Cleveland County HealthCare System), 5.75%, 1/01/35 (Prerefunded 1/01/21)      800,000        989,104   
North Carolina Medical Care Commission, Health Care Facilities Rev. (Duke University Health System), “A”, 5%, 6/01/35      1,620,000        1,823,472   
North Carolina Medical Care Commission, Health Care Facilities Rev. (Duke University Health System), “A”, 5%, 6/01/42      3,500,000        3,946,215   
North Carolina Medical Care Commission, Health Care Facilities Rev. (Duke University Health System), “A”, 5%, 6/01/42      2,420,000        2,749,991   
 

 

32

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued           
North Carolina Medical Care Commission, Health Care Facilities Rev. (Novant Health Obligation Group), “A”, 5.25%, 11/01/40    $ 3,000,000      $ 3,398,940   
North Carolina Medical Care Commission, Health Care Facilities Rev. (Rex Healthcare), “A”, 5%, 7/01/30      5,250,000        5,897,325   
North Carolina Medical Care Commission, Health Care Facilities Rev. (Vidant Health),
5%, 6/01/33		      3,000,000        3,415,080   
North Carolina Medical Care Commission, Health Care Facilities Rev. (WakeMed), “A”,
5%, 10/01/31		      4,355,000        4,889,446   
North Carolina Medical Care Commission, Health Care Facilities Rev., “A”, 5%, 10/01/38      1,825,000        2,020,695   
North Carolina Medical Care Commission, Health System Rev. (Mission Health Combined Group), 5%, 10/01/36      2,000,000        2,303,480   
North Carolina Medical Care Commission, Health System Rev. (Mission Health System, Inc.), 5%, 10/01/25      1,600,000        1,745,616   
North Carolina Medical Care Commission, Hospital Rev. (The North Carolina Baptist Hospitals, Inc.), 5.25%, 6/01/29      2,215,000        2,517,658   
North Carolina Medical Care Commission, Hospital Rev. (The North Carolina Baptist Hospitals, Inc.), 5%, 6/01/34      2,000,000        2,215,280   
North Carolina Medical Care Commission, Hospital Rev. (Wilson Memorial Hospital), Capital Appreciation, AMBAC, 0%, 11/01/15      1,140,000        1,137,549   
Northern Hospital District, Surry County, NC, Health Care Facilities Rev., 6.25%, 10/01/38      1,000,000        1,090,180   
Onslow County, NC, Hospital Authority (Onslow Memorial Hospital Project), NATL,
5%, 10/01/26		      1,155,000        1,216,157   
Royal Oak, MI, Hospital Finance Authority Rev. (William Beaumont Hospital), “V”,
8.25%, 9/01/39 (Prerefunded 9/01/18)		      2,040,000        2,534,986   
St. Petersburg, FL, Health Facilities Authority Rev., 6.5%, 11/15/39      470,000        557,439   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services),
6.75%, 7/01/29		      270,000        314,439   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services),
7%, 7/01/39		      635,000        740,569   
Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2/15/39 (Prerefunded 2/15/19)      2,195,000        2,645,590   
             $ 70,194,502   
Healthcare Revenue - Long Term Care - 1.7%           
North Carolina Medical Care Commission, Retirement Facilities First Mortgage Rev. (United Church Homes and Services), “A”, 5%, 9/01/37    $ 1,500,000      $ 1,514,520   
              
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Long Term Care - continued   
North Carolina Medical Care Commission, Retirement Facilities Rev. (Galloway Ridge Project), “A”, 5.875%, 1/01/31    $ 480,000      $ 520,550   
North Carolina Medical Care Commission, Retirement Facilities Rev. (Galloway Ridge Project), “A”, 6%, 1/01/39      1,520,000        1,642,710   
North Carolina Medical Care Commission, Retirement Facilities Rev. (The United Methodist Retirement Homes), “A”, 5%, 10/01/33      1,590,000        1,644,728   
Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.25%, 9/15/29      35,000        41,174   
Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.625%, 9/15/39      220,000        261,127   
             $ 5,624,809   
Industrial Revenue - Paper - 0.3%           
Columbus County, NC, Industrial Facilities & Pollution Control, Financing Authority Rev. (International Paper Co.), 5.7%, 5/01/34    $ 1,000,000      $ 1,148,600   
Miscellaneous Revenue - Other - 2.3%           
Durham County, NC, Industrial Facilities & Pollution Control Financing Authority Rev. (Research Triangle Institute), 5%, 2/01/25    $ 1,000,000      $ 1,235,050   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/40      420,000        452,609   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/44      640,000        686,880   
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “1”, 5%, 11/15/44      1,700,000        1,789,182   
New York Liberty Development Corp., Liberty Rev. (7 World Trade Center Project), 5%, 9/15/40      3,145,000        3,607,315   
Summit County, OH, Port Authority Building Rev. (Flats East Development Recovery Zone Facility Bonds), 6.875%, 5/15/40      100,000        114,396   
             $ 7,885,432   
Multi-Family Housing Revenue - 0.5%           
Mecklenburg County, NC (Little Rock Apartments), FNMA, 5.15%, 1/01/22    $ 775,000      $ 807,349   
North Carolina Medical Care Commission, Health Care Facilities Rev., “A” (ARC Projects), 5.8%, 10/01/34      1,000,000        1,012,550   
             $ 1,819,899   
Port Revenue - 0.3%                 
North Carolina Ports Authority Facilities Rev., “A”, 5.25%, 2/01/40    $ 1,000,000      $ 1,133,190   
 

 

33

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Sales & Excise Tax Revenue - 1.2%           
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6.5%, 1/15/30    $ 1,675,000      $ 1,987,572   
Guam Government Business Privilege Tax Rev., “A”, 5.25%, 1/01/36      1,140,000        1,276,401   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 8/01/28 (Prerefunded 8/01/19)      15,000        17,706   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “C”, 5.25%, 8/01/40      970,000        700,825   
             $ 3,982,504   
Single Family Housing - State - 1.6%           
North Carolina Housing Finance Agency Rev., “23-A”, 4.8%, 1/01/37    $ 1,340,000      $ 1,342,734   
North Carolina Housing Finance Agency Rev., “24-A”, 4.75%, 7/01/26      1,410,000        1,424,594   
North Carolina Housing Finance Agency Rev., “25-A”, 5.75%, 1/01/37      20,000        20,052   
North Carolina Housing Finance Agency Rev., “29-A”, 4.85%, 7/01/38      1,285,000        1,308,657   
North Carolina Housing Finance Agency Rev., “31-A”, 5.25%, 7/01/38      1,390,000        1,438,330   
             $ 5,534,367   
State & Agency - Other - 2.5%           
Charlotte, NC, COP (Transit Projects),
5%, 6/01/33		    $ 3,000,000      $ 3,304,470   
Charlotte, NC, COP (Transit Projects), “E”,
5%, 6/01/35		      1,990,000        2,004,428   
Charlotte, NC, COP, “E”, 5%, 6/01/26      760,000        849,118   
Charlotte, NC, COP, “E”, 5%, 6/01/34      2,000,000        2,232,800   
             $ 8,390,816   
State & Local Agencies - 14.1%           
Asheville, NC, Limited Obligation, 5%, 4/01/28    $ 400,000      $ 464,064   
Charlotte, NC, COP (NASCAR Hall of Fame), “C”, 5%, 6/01/39      5,130,000        5,727,132   
Chatham County, NC, Limited Obligation Bond, 5%, 11/01/28      2,345,000        2,795,475   
Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.925%, 6/01/37      2,260,000        1,913,226   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, ASSD GTY, 5%, 6/01/45      1,355,000        1,364,553   
Harnett County, NC, 5%, 6/01/28      45,000        45,167   
Harnett County, NC, COP, ASSD GTY,
5%, 6/01/29		      400,000        445,504   
Iredell County, NC, Public Facilities (School Projects), AGM, 5.125%, 6/01/27      3,230,000        3,599,770   
Mecklenburg County, NC, COP, “A”,
5%, 2/01/28		      350,000        388,161   
Mooresville, NC, COP, 5%, 9/01/32      3,120,000        3,381,269   
Nash County, NC, Limited Obligation, ASSD GTY, 5%, 10/01/30      2,000,000        2,302,860   
North Carolina Capital Improvement Obligation, “A”, 5%, 5/01/26 (Prerefunded 5/01/19)      1,450,000        1,668,921   
              
Issuer    Shares/Par     Value ($)  
    
State & Local Agencies - continued   
North Carolina Capital Improvement Obligation, “C”, 5%, 5/01/25    $ 2,710,000      $ 3,212,190   
North Carolina Limited Obligation, “C” ,
5%, 5/01/26		      3,000,000        3,670,650   
Orange County, NC, Public Facilities Co., Limited Obligation, 5%, 10/01/24      750,000        902,205   
Pitt County, NC, Limited Obligation, “A”,
5%, 4/01/35		      2,000,000        2,175,720   
Salisbury, NC, COP, ASSD GTY,
5.625%, 3/01/26		      1,000,000        1,126,110   
Wake County, NC, Annual Appropriation Ltd., Obligation Bonds, “2009”, 5%, 6/01/32      3,000,000        3,399,240   
Wake County, NC, Annual Appropriation Ltd., Obligation Bonds, “2010”, 5%, 1/01/33      6,000,000        6,873,120   
Wilmington, NC, COP, “A”, 5%, 6/01/38      2,650,000        2,915,504   
             $ 48,370,841   
Tax - Other - 1.5%                 
Guam Government Ltd. Obligation Rev., “A”,
5.375%, 12/01/24		    $ 420,000      $ 468,674   
Guam Government Ltd. Obligation Rev., “A”,
5.625%, 12/01/29		      145,000        160,853   
Virgin Islands Public Finance Authority Rev. (Diageo), “A”, 6.625%, 10/01/29      1,005,000        1,145,489   
Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 10/01/29      305,000        329,699   
Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 10/01/39      350,000        375,753   
Virgin Islands Public Finance Authority Rev., “B”, 5%, 10/01/25      305,000        336,717   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, 5%, 10/01/29      2,090,000        2,293,817   
             $ 5,111,002   
Tobacco - 1.4%                 
Buckeye, OH, Tobacco Settlement Financing Authority, “A-3”, 6.25%, 6/01/37    $ 1,295,000      $ 1,136,958   
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28      1,975,000        2,352,660   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.5%, 6/01/23      940,000        942,256   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.75%, 6/01/34      540,000        412,711   
             $ 4,844,585   
Toll Roads - 0.9%                 
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility),
7%, 12/31/38		    $ 435,000      $ 542,810   
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility),
6.75%, 6/30/43		      350,000        428,288   
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 6%, 1/01/37      725,000        843,661   
 

 

34

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Toll Roads - continued                 
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 5.5%, 1/01/42    $ 1,160,000      $ 1,273,854   
             $ 3,088,613   
Transportation - Special Tax - 4.2%           
Commonwealth of Puerto Rico Highway & Transportation Authority Rev., “CC”, AGM,
5.5%, 7/01/28		    $ 1,715,000      $ 1,847,278   
Commonwealth of Puerto Rico Highway & Transportation Authority Rev., ETM, AGM,
6%, 7/01/18		      5,810,000        6,457,408   
North Carolina Turnpike Authority, Monroe Connector System State Appropriation Rev.,
5%, 7/01/28		      2,300,000        2,668,460   
North Carolina Turnpike Authority, Monroe Connector System State Appropriation Rev.,
5%, 7/01/36		      3,000,000        3,417,240   
             $ 14,390,386   
Universities - Colleges - 15.8%           
Appalachian State University, NC, Rev.,
4%, 10/01/19		    $ 1,080,000      $ 1,207,796   
Appalachian State University, NC, Rev., NATL, 5%, 7/15/30 (Prerefunded 7/15/15)      370,000        375,158   
Appalachian State University, NC, Rev., NATL,
5%, 7/15/30		      630,000        638,782   
Florida State University Board of Governors, System Improvement Rev., 6.25%, 7/01/30      1,000,000        1,161,890   
Illinois Finance Authority Rev. (Roosevelt University Project), 6.25%, 4/01/29      2,000,000        2,263,620   
New Jersey Educational Facilities Authority Rev. (University of Medicine & Dentistry), “B”, ETM, 6%, 12/01/17      1,545,000        1,711,659   
North Carolina Capital Facilities Finance Agency, Educational Facilities Rev. (High Point University), 5.25%, 3/01/33      1,000,000        1,092,210   
North Carolina Capital Facilities Finance Agency, Educational Facilities Rev. (Wake Forest University), 5%, 1/01/28      980,000        1,109,585   
North Carolina Capital Facilities Finance Agency, Educational Facilities Rev. (Wake Forest University), 5%, 1/01/29      865,000        977,346   
North Carolina Capital Facilities Finance Agency, Educational Facilities Rev. (Wake Forest University), 5%, 1/01/31      2,000,000        2,248,040   
North Carolina Capital Facilities Finance Agency, Educational Facilities Rev. (Wake Forest University), 5%, 1/01/38      1,000,000        1,118,600   
North Carolina Capital Facilities, Finance Agency Rev. (Davidson College), 5%, 3/01/45      1,500,000        1,688,085   
North Carolina Capital Facilities, Finance Agency Rev. (Duke University), “A”,
5%, 10/01/38		      2,500,000        2,821,100   
North Carolina Capital Facilities, Finance Agency Rev. (Meredith College), 6%, 6/01/31      3,240,000        3,495,766   
              
Issuer    Shares/Par     Value ($)  
    
Universities - Colleges - continued           
Pinellas County, FL, Educational Facilities Authority Rev. (Barry University), 6%, 10/01/41    $ 450,000      $ 513,495   
Puerto Rico Industrial Tourist Authority (University Plaza), “A”, NATL, 5%, 7/01/20      2,180,000        2,184,578   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project),
5.125%, 4/01/32		      170,000        149,824   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project),
5.375%, 4/01/42		      275,000        236,800   
Puerto Rico Industrial, Tourist, Medical, & Environmental Central Facilities (University of Sacred Heart), 4.375%, 10/01/31      115,000        94,337   
Puerto Rico Industrial, Tourist, Medical, & Environmental Central Facilities (University of Sacred Heart), 5%, 10/01/42      55,000        45,280   
University of North Carolina, Chapel Hill,
5%, 12/01/31		      3,250,000        3,602,105   
University of North Carolina, Chapel Hill, “A”, ASSD GTY, 5%, 4/01/34      200,000        223,958   
University of North Carolina, Charlotte, Rev.,
5%, 4/01/43		      1,715,000        1,954,757   
University of North Carolina, Greensboro, Rev., 5%, 4/01/26      3,000,000        3,478,500   
University of North Carolina, Greensboro, Rev., 5%, 4/01/39      2,000,000        2,299,840   
University of North Carolina, Raleigh, Rev., “A”, 5%, 10/01/29      5,000,000        5,947,650   
University of North Carolina, Systems Pool Rev. (General Trust Indenture), “C”,
5.5%, 10/01/34		      1,890,000        2,150,404   
University of North Carolina, Systems Pool Rev., “B”, 5.125%, 10/01/34      2,000,000        2,252,760   
University of North Carolina, Systems Pool Rev., “B-1”, 5.25%, 4/01/24      1,615,000        1,885,125   
University of North Carolina, Systems Pool Rev., “B-1”, 5.25%, 4/01/25      1,705,000        1,990,178   
University of North Carolina, Wilmington, COP (Student Housing Project), FGIC, 5%, 6/01/28      1,825,000        1,905,884   
Winston-Salem State University, NC, General Rev., 5%, 4/01/33      1,000,000        1,104,830   
             $ 53,929,942   
Universities - Dormitories - 0.5%                 
Winston-Salem State University, NC, Student Housing Project Rev., 5%, 6/01/29    $ 1,550,000      $ 1,719,353   
Utilities - Cogeneration - 0.1%                 
California Pollution Control Financing Authority, Water Furnishing Rev. (San Diego County Water Desalination Project Pipeline),
5%, 11/21/45		    $ 450,000      $ 467,528   
 

 

35

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Utilities - Municipal Owned - 6.4%           
Guam Power Authority Rev., “A”, AGM,
5%, 10/01/20		    $ 1,000,000      $ 1,171,710   
Guam Power Authority Rev., “A”, AGM,
5%, 10/01/21		      1,000,000        1,185,860   
Long Island, NY, Power Authority, Electric Systems Rev., “A”, 6%, 5/01/33      520,000        608,665   
North Carolina Eastern Municipal Power Agency, AMBAC, 6%, 1/01/18      14,245,000        16,142,861   
North Carolina Municipal Power Agency, Catawba Electric Rev., “A”, 5%, 1/01/30      2,500,000        2,793,600   
             $ 21,902,696   
Utilities - Other - 1.8%                 
California M-S-R Energy Authority Gas Rev., “A”, 6.5%, 11/01/39    $ 1,695,000      $ 2,337,642   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/19      1,055,000        1,198,754   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/26      1,290,000        1,534,403   
Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2/01/21      805,000        911,244   
Texas Gas Acquisition & Supply Corp III., Gas Supply Rev., 5%, 12/15/31      255,000        281,895   
             $ 6,263,938   
Water & Sewer Utility Revenue - 10.6%           
Asheville, NC, Water & Sewer Systems Rev., NATL, 5%, 8/01/32    $ 1,000,000      $ 1,081,620   
Cape Fear Public Utility Authority, Water & Sewer System Rev., 5%, 6/01/40      1,250,000        1,456,638   
Cape Fear Public Utility Authority, Water & Sewer System Rev., 5%, 8/01/35      3,000,000        3,330,180   
Cape Fear Public Utility Authority, Water & Sewer System Rev., 5%, 8/01/36      4,410,000        5,035,294   
Charlotte, NC, Storm Water Fee Rev.,
5%, 12/01/39		      3,000,000        3,572,250   
Durham County, NC, Enterprise Systems Rev.,
5%, 6/01/29		      1,590,000        1,839,423   
Fayetteville, NC, Public Works Commission Rev., “B”, 5%, 3/01/35      1,750,000        1,965,688   
Greenville, NC, Utilities Commission, Combined Enterprise System Rev., “A”, AGM,
5%, 11/01/33		      2,400,000        2,660,160   
High Point, NC, Combined Enterprise System Rev., AGM, 5%, 11/01/33      2,000,000        2,250,860   
              
Issuer    Shares/Par     Value ($)  
    
Water & Sewer Utility Revenue - continued   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “C-7”, NATL, 5%, 7/01/32    $ 95,000      $ 105,222   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/35      60,000        66,605   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/37      140,000        155,180   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-6”, NATL, 5%, 7/01/36      115,000        126,237   
New York, NY, Municipal Water Finance Authority, Water & Sewer Systems Rev., “AA”, 5%, 6/15/44      1,745,000        2,001,149   
Oak Island, NC, Enterprise System Rev., ASSD GTY, 5.625%, 6/01/30      500,000        585,790   
Oak Island, NC, Enterprise System Rev., ASSD GTY, 6%, 6/01/34      1,000,000        1,168,760   
Oak Island, NC, Enterprise System Rev., ASSD GTY, 5.75%, 6/01/36      800,000        939,240   
Raleigh, NC, Combined Enterprise Systems Rev., “A”, 5%, 3/01/29      3,145,000        3,736,291   
Winston-Salem, NC, Water & Sewer Systems Rev., 5%, 6/01/34      2,000,000        2,279,160   
Winston-Salem, NC, Water & Sewer Systems Rev., “A”, 5%, 6/01/31      750,000        898,650   
Winston-Salem, NC, Water & Sewer Systems Rev., “A”, 5%, 6/01/32      750,000        895,943   
             $ 36,150,340   
Total Municipal Bonds
(Identified Cost, $308,122,253)		       $ 335,277,765   
Money Market Funds - 2.2%                 
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      7,496,659      $ 7,496,659   
Total Investments
(Identified Cost, $315,618,912)		       $ 342,774,424   
Other Assets, Less Liabilities - (0.2)%        (694,451)   
Net Assets - 100.0%            $ 342,079,973   

See Portfolio Footnotes and Notes to Financial Statements

 

 

36

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS PENNSYLVANIA MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 96.6%             
    
Issuer    Shares/Par     Value ($)  
    
Airport Revenue - 2.5%                 
Chicago, IL, O’Hare International Airport Rev., Third Lien, “A”, 5.625%, 1/01/35    $ 335,000      $ 387,297   
Philadelphia, PA, Airport Rev., “A”, AGM, 5%, 6/15/40      2,000,000        2,220,620   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, 5%, 12/01/44      55,000        61,142   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, BAM, 5%, 12/01/39      65,000        74,368   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/39      45,000        49,909   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/44      80,000        88,521   
             $ 2,881,857   
General Obligations - General Purpose - 12.3%           
Abington Township, PA, 5%, 7/15/16    $ 1,000,000      $ 1,060,090   
Abington Township, PA, 5%, 7/15/18      625,000        706,094   
Allegheny County, PA, “C-73”, 5%, 12/01/18      1,500,000        1,702,665   
Cambria County, PA, BAM, 5%, 8/01/20      1,000,000        1,152,930   
Chester County, PA, 5%, 11/15/32      1,000,000        1,177,050   
Commonwealth of Pennsylvania, 5%, 4/15/15      1,515,000        1,517,894   
Commonwealth of Pennsylvania, 5%, 4/15/19      1,000,000        1,143,660   
Commonwealth of Pennsylvania, 5%, 6/01/20      1,500,000        1,750,830   
Commonwealth of Puerto Rico, “A”, ETM, FGIC, 5.5%, 7/01/15      1,860,000        1,884,719   
Guam Government, “A”, 6.75%, 11/15/29      75,000        86,005   
Guam Government, “A”, 7%, 11/15/39      90,000        106,278   
Luzerne County, PA, AGM, 6.75%, 11/01/23      475,000        574,066   
Penn Hills, PA, Capital Appreciation, “D”, 0%, 12/01/32      595,000        320,098   
Philadelphia, PA, Redevelopment Authority Rev., BAM, 5%, 4/15/24      1,000,000        1,151,170   
             $ 14,333,549   
General Obligations - Schools - 11.8%           
Carlisle, PA, School District, 5%, 9/01/26    $ 1,000,000      $ 1,151,010   
Conneaut, PA, School District, Capital Appreciation, “B”, AGM, 0%, 11/01/31      1,150,000        671,577   
Conneaut, PA, School District, Capital Appreciation, “B”, AGM, 0%, 11/01/33      760,000        409,906   
Daniel Boone, PA, School District Rev., 5%, 8/15/32 (Prerefunded 8/15/18)      160,000        181,056   
Daniel Boone, PA, School District Rev., 5%, 8/15/32 (Prerefunded 8/15/18)      110,000        124,476   
Daniel Boone, PA, School District Rev., 5%, 8/15/32      230,000        254,283   
Deer Lakes, PA, School District, ASSD GTY, 5.375%, 4/01/34      1,275,000        1,452,952   
              
Issuer    Shares/Par     Value ($)  
    
General Obligations - Schools - continued           
Northampton County, PA, Area School District, “A”, 5%, 10/01/33    $ 1,000,000      $ 1,150,090   
Northampton County, PA, Area School District, “A”, 5%, 10/01/34      1,210,000        1,388,076   
Pittsburgh, PA, School District, “B”, 5%, 9/01/21      1,000,000        1,181,110   
Reading, PA, School District, “A”, 5%, 4/01/18      1,000,000        1,084,050   
Reading, PA, School District, “A”, 5%, 4/01/20      665,000        742,027   
Scranton, PA, School District, “A”, AGM, 5%, 7/15/27      1,340,000        1,433,438   
West Chester, PA, Area School District, “A”, 5%, 5/15/22      640,000        782,643   
West Chester, PA, Area School District, “A”, 5%, 5/15/24      500,000        627,360   
Whitehall-Coplay, PA, School District, “A”, AGM, 5.375%, 11/15/34      1,000,000        1,097,110   
             $ 13,731,164   
Healthcare Revenue - Hospitals - 18.7%           
Allegheny County, PA, Hospital Development Authority Rev. (University of Pittsburgh Medical Center), 5%, 9/01/18    $ 500,000      $ 563,465   
Allegheny County, PA, Hospital Development Authority Rev. (University of Pittsburgh Medical Center), “A”, 5.375%, 8/15/29      1,000,000        1,137,840   
Berks County, PA, Municipal Authority Rev. (Reading Hospital & Medical Center), “A”, 5%, 11/01/40      1,500,000        1,665,855   
Butler County, PA, Hospital Authority Rev. (Butler Health System), 7.25%, 7/01/39 (Prerefunded 7/01/19)      500,000        623,310   
Centre County, PA, Hospital Authority Rev. (Mount Nittany Medical Center), 6.25%, 11/15/41      500,000        592,960   
Chester County, PA, Health & Educational Facilities Authority Rev. (Chester County Junior High School), “A”, 5%, 5/15/40      1,000,000        1,112,350   
Dauphin County, PA, General Authority Health System Rev. (Pinnacle Health System), “A”, 5.75%, 6/01/20      750,000        878,100   
DeKalb County, GA, Hospital Authority Rev. (DeKalb Medical Center, Inc.), 6.125%, 9/01/40      305,000        337,418   
Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 8/15/36      705,000        812,590   
Geisinger Authority, PA, Health System Rev., “A”, 5.125%, 6/01/34      1,000,000        1,116,240   
Illinois Finance Authority Rev. (Provena Health), “A”, 6%, 5/01/28      500,000        583,300   
 

 

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued           
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.25%, 7/01/31    $ 165,000      $ 194,009   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.375%, 7/01/41      150,000        175,755   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 5.75%, 6/01/25      335,000        381,026   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 6/01/40      390,000        451,214   
Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan Hospital), 5%, 11/15/18      165,000        165,109   
Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan Hospital), 6%, 11/15/35      450,000        450,275   
Lehigh County, PA, General Purpose Authority Hospital Rev. (Lehigh Valley Hospital), NATL, 7%, 7/01/16      85,000        88,600   
Lycoming County, PA, Health Authority Rev. (Susquehanna Health System), “A”, 5.75%, 7/01/39      750,000        823,200   
Miami-Dade County, FL, Health Facilities Authority Hospital Rev. (Variety Children’s Hospital), “A”, 6%, 8/01/30      105,000        123,871   
Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center), 5%, 1/01/27      250,000        260,890   
Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center), 5.125%, 1/01/37      250,000        259,805   
New Hampshire Business Finance Authority Rev. (Huggins Hospital), 6.875%, 10/01/39      20,000        21,653   
Northampton County, PA, General Purpose Authority Hospital Rev. (St. Luke’s Hospital), “A”, 5.5%, 8/15/40      500,000        557,125   
Pennsylvania Higher Educational Facilities Authority Rev. (University of Pittsburg Medical Center), “E”, 5%, 5/15/19      730,000        831,638   
Philadelphia, PA, Hospitals & Higher Education Facilities Authority Rev. (The Children’s Hospital of Philadelphia), “C”, 5%, 7/01/25      1,000,000        1,154,110   
Pocono Mountains, PA, Industrial Park Authority Rev. (St. Luke’s Hospital - Monroe Project), “A”, 5%, 8/15/40      500,000        567,490   
Royal Oak, MI, Hospital Finance Authority Rev. (William Beaumont Hospital), 5%, 9/01/39      810,000        904,325   
Southcentral, PA, General Authority Rev. (WellSpan Health Obligated Group), 6%, 6/01/25 (Prerefunded 6/01/18)      430,000        497,063   
Southcentral, PA, General Authority Rev. (WellSpan Health Obligated Group), 6%, 6/01/25      320,000        356,106   
              
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued           
Southcentral, PA, General Authority Rev. (WellSpan Health Obligated Group), “A”, 5%, 6/01/44    $ 1,000,000      $ 1,128,420   
St. Mary Hospital Authority, PA, Health System Rev. (Catholic Health East), “A”, 5%, 11/15/33      500,000        566,570   
St. Petersburg, FL, Health Facilities Authority Rev., 6.5%, 11/15/39      155,000        183,836   
West Shore, PA, Hospital Authority Rev. (Holy Spirit Hospital), “B”, 5.625%, 1/01/32      500,000        598,880   
Westmoreland County, PA, Industrial Development Authority Rev. (Excela Health Project), 5.125%, 7/01/30      1,000,000        1,100,420   
Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Healthcare), 5.25%, 8/15/31      485,000        503,668   
             $ 21,768,486   
Healthcare Revenue - Long Term Care - 3.2%           
Bucks County, PA, Industrial Development Authority Rev. (Lutheran Community Telford Center), 5.75%, 1/01/37    $ 300,000      $ 304,326   
Chartiers Valley, PA, Industrial & Commercial Development Authority (Asbury Health Center Project), 5.75%, 12/01/22      250,000        258,113   
Cumberland County, PA, Municipal Authority Rev. (Asbury Atlantic, Inc.), 6%, 1/01/40      500,000        537,685   
Cumberland County, PA, Municipal Authority Rev. (Asbury Atlantic, Inc.), 5.25%, 1/01/41      500,000        520,845   
Cumberland County, PA, Municipal Authority Rev. (Diakon Lutheran Social Ministries), 6.375%, 1/01/39      500,000        558,085   
Lancaster County, PA, Hospital Authority Health System Rev. (Masonic Villages Project), 5%, 11/01/35      500,000        566,425   
Montgomery County, PA, Industrial Development Authority Retirement Community Rev. (Lanier Village Estates, Inc.), “A-1”, 6.25%, 11/15/29      250,000        286,790   
Montgomery County, PA, Industrial Development Authority Rev. (Whitemarsh Continuing Care Retirement Community Project), 5.375%, 1/01/50      400,000        404,124   
Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7%, 11/01/30      65,000        76,481   
Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7.125%, 11/01/40      105,000        122,502   
Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.25%, 9/15/29      10,000        11,764   
Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.625%, 9/15/39      70,000        83,086   
             $ 3,730,226   
 

 

38

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Human Services - 0.1%                 
Montgomery County, PA, Industrial Development Authority (Wordsworth Academy), 8%, 9/01/24    $ 110,000      $ 110,705   
Industrial Revenue - Other - 1.1%                 
Pennsylvania Economic Development Financing Authority, Solid Waste Disposal Rev. (Procter & Gamble), 5.375%, 3/01/31    $ 1,000,000      $ 1,248,220   
Miscellaneous Revenue - Other - 1.6%                 
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/40    $ 145,000      $ 156,258   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/44      225,000        241,481   
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “1”, 5%, 11/15/44      580,000        610,427   
Pennsylvania Economic Development Financing Authority, (The Pennsylvania Rapid Bridge Replacement Project), 5%, 12/31/34      750,000        829,553   
             $ 1,837,719   
Sales & Excise Tax Revenue - 1.0%           
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6.5%, 1/15/30    $ 580,000      $ 688,234   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/16      120,000        127,966   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/17      135,000        147,817   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “C”, 5.25%, 8/01/40      380,000        274,550   
             $ 1,238,567   
Single Family Housing - Local - 0.4%           
Allegheny County, PA, Residential Financing Authority, Single Family Mortgage Rev., “VV”, GNMA, 4.95%, 11/01/37    $ 520,000      $ 530,390   
Single Family Housing - State - 0.9%           
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “97-A”, 4.5%, 10/01/22    $ 1,000,000      $ 1,026,210   
Solid Waste Revenue - 0.6%           
Delaware County, PA, Industrial Development Authority, Resource Recovery Facilities Rev. (American Ref-Fuel Co.), “A”, 6.2%, 7/01/19    $ 205,000      $ 205,209   
Pennsylvania Economic Development Financing Authority, Sewer Sludge Disposal Rev. (Philadelphia Biosolids Facility), 6.25%, 1/01/32      500,000        552,975   
             $ 758,184   
              
Issuer    Shares/Par     Value ($)  
    
State & Local Agencies - 3.7%           
Commonwealth Financing Authority Rev., “A-2”, 5%, 6/01/36    $ 1,500,000      $ 1,666,560   
Delaware Valley, PA, Regional Finance Authority, AMBAC, 5.5%, 8/01/18      815,000        913,982   
Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.925%, 6/01/37      730,000        617,989   
Pennsylvania Industrial Development Authority, Economic Development Authority Rev., 5.5%, 7/01/23 (Prerefunded 7/01/18)      60,000        68,695   
Pennsylvania Industrial Development Authority, Economic Development Authority Rev., 5.5%, 7/01/23      440,000        497,504   
Philadelphia, PA, Municipal Authority Rev., 6.5%, 4/01/34      500,000        577,385   
             $ 4,342,115   
Tax - Other - 1.0%           
Allentown, PA, Neighborhood Improvement Zone Development Authority Tax Rev., “A”, 5%, 5/01/35    $ 750,000      $ 817,560   
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24      140,000        156,225   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      45,000        49,920   
Virgin Islands Public Finance Authority Rev. (Diageo Project), “A”, 6.75%, 10/01/37      125,000        143,123   
             $ 1,166,828   
Tax Assessment - 0.2%           
Washington County, PA, Redevelopment Authority (Victory Centre Project), “A”, 5.45%, 7/01/35    $ 225,000      $ 229,451   
Tobacco - 2.0%           
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 6/01/47    $ 430,000      $ 362,039   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-2”, 5.3%, 6/01/37      665,000        549,583   
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28      755,000        899,371   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.5%, 6/01/23      310,000        310,744   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.75%, 6/01/34      165,000        126,106   
Virgin Islands Tobacco Settlement Financing Corp., 5%, 5/15/21      80,000        80,011   
             $ 2,327,854   
Toll Roads - 1.4%           
Delaware River Port Authority Rev., 5%, 1/01/29    $ 1,145,000      $ 1,326,723   
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 7%, 12/31/38      140,000        174,698   
 

 

39

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Toll Roads - continued           
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 6.75%, 6/30/43    $ 110,000      $ 134,605   
             $ 1,636,026   
Transportation - Special Tax - 1.0%           
Pennsylvania Turnpike Commission (Motor License Fund), “B”, 5%, 12/01/30    $ 1,000,000      $ 1,124,490   
Universities - Colleges - 15.3%           
Allegheny County, PA, Higher Education Building Authority Rev. (Duquesne University), 5%, 3/01/33    $ 1,250,000      $ 1,357,150   
Allegheny County, PA, Higher Education Building Authority Rev. (Duquesne University), “A”, 5%, 3/01/32      500,000        574,115   
Allegheny County, PA, Higher Education Building Authority Rev. (Duquesne University), “A”, SYNCORA, 5%, 3/01/24      1,000,000        1,043,340   
Allegheny County, PA, Higher Education Building Authority Rev. (Robert Morris University), “A”, 6%, 10/15/38      250,000        275,398   
Allegheny County, PA, Higher Education Building Authority Rev. (Robert Morris University), “A”, 5.75%, 10/15/40      500,000        548,015   
Crawford County, PA, Industrial Development Authority, College Rev., “A”, 6%, 11/01/31      250,000        285,010   
Cumberland County, PA, Municipal Authority College Rev. (Dickinson College), 5%, 11/01/26      1,000,000        1,090,340   
Cumberland County, PA, Municipal Authority College Rev. (Dickinson College), “HH1”, 5%, 11/01/39      300,000        326,178   
Delaware County, PA, Authority University Rev. (Neumann University), 5.25%, 10/01/31      565,000        607,059   
Delaware County, PA, Authority University Rev. (Neumann University), 6.125%, 10/01/34      750,000        846,008   
Delaware County, PA, Authority University Rev. (Villanova University), 5.25%, 12/01/31      350,000        399,018   
Erie, PA, Higher Education Building Authority Rev. (Gannon University), “A”, 5.5%, 5/01/40      1,000,000        1,090,420   
Illinois Finance Authority Rev. (Roosevelt University Project), 6.25%, 4/01/29      1,050,000        1,188,401   
Lancaster, PA, Higher Education Authority College Rev. (Franklin & Marshall College), 5%, 4/15/37      500,000        548,085   
New Jersey Educational Facilities Authority Rev. (University of Medicine & Dentistry), “B”, ETM, 6%, 12/01/17      505,000        559,474   
Northampton County, PA, General Purpose Authority Rev. (Lafayette College), 5%, 11/01/34      250,000        277,560   
Northampton County, PA, General Purpose Authority Rev. (Lehigh University), 5.5%, 11/15/33      500,000        570,695   
              
Issuer    Shares/Par     Value ($)  
    
Universities - Colleges - continued                 
Pennsylvania Higher Educational Facilities Authority Rev. (Drexel University), NATL, 5%, 5/01/37    $ 630,000      $ 683,815   
Pennsylvania Higher Educational Facilities Authority Rev. (La Salle University), “A”, 5.25%, 5/01/27      500,000        526,565   
Pennsylvania Higher Educational Facilities Authority Rev. (La Salle University), “A”, 5%, 5/01/37      500,000        517,230   
Pennsylvania Higher Educational Facilities Authority Rev. (Philadelphia University), 5.5%, 6/01/20      500,000        520,460   
Pennsylvania Higher Educational Facilities Authority Rev. (Saint Francis University Project), “JJ2”, 6.25%, 11/01/41      500,000        562,990   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.375%, 4/01/42      95,000        81,804   
Snyder County, PA, Higher Education Authority Rev. (Susquehanna University), 5%, 1/01/38      1,000,000        1,097,400   
Washington County, PA, Industrial Development Authority College Rev. (Washington Jefferson College), 5.25%, 11/01/30      1,000,000        1,140,760   
Wilkes-Barre, PA, Finance Authority Rev. (The University of Scranton), 5%, 11/01/35      1,000,000        1,095,620   
             $ 17,812,910   
Universities - Dormitories - 3.2%           
Clarion County, PA, Industrial Development Authority Student Housing Rev. (Clarion University Foundation, Inc.), “A”, 5%, 7/01/45    $ 1,000,000      $ 1,061,520   
East Hempfield, PA, Industrial Development Authority Rev. (Millersville University Student Services), 5%, 7/01/46      1,000,000        1,063,890   
Pennsylvania Higher Educational Facilities Authority Rev. (Edinboro University Foundation), 6%, 7/01/43      1,000,000        1,097,270   
Pennsylvania Higher Educational Facilities Authority Rev. (Shippensburg University Student Services), 6.25%, 10/01/43      500,000        561,405   
             $ 3,784,085   
Universities - Secondary Schools - 2.7%           
La Vernia, TX, Higher Education Finance Corp. Rev. (Lifeschool of Dallas), “A”, 7.5%, 8/15/41    $ 345,000      $ 433,782   
Philadelphia, PA, Authority for Industrial Development Rev. (Discovery Charter School Project), 6.25%, 4/01/37      500,000        541,440   
Philadelphia, PA, Authority for Industrial Development Rev. (Global Leadership Academy Charter School), 6.375%, 11/15/40      500,000        539,520   
 

 

40

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Universities - Secondary Schools - continued           
Philadelphia, PA, Authority for Industrial Development Rev. (MaST Charter School), 6%, 8/01/35    $ 665,000      $ 731,952   
Philadelphia, PA, Authority for Industrial Development Rev. (Philadelphia Performing Arts Charter School Project), 6.75%, 6/15/43      400,000        410,864   
Philadelphia, PA, Authority for Industrial Development Rev. (Tacony Academy Charter School Project), “A-1”, 7%, 6/15/43      400,000        446,988   
             $ 3,104,546   
Utilities - Investor Owned - 2.4%           
Clarion County, PA, Industrial Development Authority, Water Facility Rev. (Pennsylvania American Water Co.), 5.5%, 12/01/39    $ 1,000,000      $ 1,106,230   
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.625%, 7/01/20      415,000        490,974   
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.5%, 8/01/29
(Put Date 8/01/16)		      110,000        116,054   
Pennsylvania Economic Development Financing Authority, Water Facilities Rev. (Aqua Pennsylvania, Inc.), “A”, 5%, 10/01/39      1,000,000        1,128,840   
             $ 2,842,098   
Utilities - Municipal Owned - 1.5%           
Guam Power Authority Rev., “A”, 5.5%, 10/01/30    $ 315,000      $ 357,390   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/39      95,000        110,264   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/44      105,000        121,309   
Philadelphia, PA, Gas Works Rev., 5.25%, 8/01/40      1,000,000        1,130,630   
             $ 1,719,593   
Utilities - Other - 1.9%           
California M-S-R Energy Authority Gas Rev., “A”, 6.5%, 11/01/39    $ 545,000      $ 751,631   
Public Authority for Colorado Energy Natural Gas Purchase Rev., 6.5%, 11/15/38      280,000        384,728   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/19      420,000        477,229   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/22      235,000        273,827   
              
Issuer    Shares/Par     Value ($)  
    
Utilities - Other - continued           
Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2/01/21    $ 255,000      $ 288,655   
Texas Gas Acquisition & Supply Corp III., Gas Supply Rev., 5%, 12/15/31      75,000        82,910   
             $ 2,258,980   
Water & Sewer Utility Revenue - 6.1%           
Allegheny County, PA, Sanitation Authority Sewer Rev., AGM, 5%, 6/01/40    $ 1,000,000      $ 1,140,410   
Bucks County, PA, Water & Sewer Authority, Water System Rev., 5%, 12/01/33      1,000,000        1,127,080   
Clairton, PA, Municipal Authority Sewer Rev., “B”, 5%, 12/01/42      500,000        540,595   
Erie, PA, Water Authority Rev., AGM, 5%, 12/01/49      750,000        844,208   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.25%, 7/01/20      45,000        51,793   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.25%, 7/01/21      120,000        139,852   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.625%, 7/01/40      260,000        290,100   
Harrisburg, PA, Water Authority Rev., 5.25%, 7/15/31      1,000,000        1,003,810   
Philadelphia, PA, Water & Wastewater Rev., “A”, 5.25%, 1/01/32      1,000,000        1,113,760   
St. Mary’s, PA, Water Authority Rev., 5.15%, 2/01/30      750,000        829,845   
             $ 7,081,453   
Total Municipal Bonds
(Identified Cost, $103,286,395)		            $ 112,625,706   
Money Market Funds - 1.5%                 
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      1,736,542      $ 1,736,542   
Total Investments
(Identified Cost, $105,022,937)		            $ 114,362,248   
Other Assets, Less Liabilities - 1.9%        2,227,544   
Net Assets - 100.0%            $ 116,589,792   

See Portfolio Footnotes and Notes to Financial Statements

 

 

41

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS SOUTH CAROLINA MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 95.5%             
    
Issuer    Shares/Par     Value ($)  
    
Airport Revenue - 3.2%                 
Charleston County, SC, Airport District Rev., “A”, 5.25%, 7/01/21    $ 2,000,000      $ 2,370,416   
Dallas and Fort Worth, TX, International Airport Rev., “B”, 5%, 11/01/44      220,000        245,843   
Dallas and Fort Worth, TX, International Airport Rev., “C”, 5%, 11/01/45      155,000        172,510   
Horry County, SC, Airport Rev. (Myrtle Beach International Airport), “A”, 5%, 7/01/40      2,250,000        2,498,445   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, 5%, 12/01/44      90,000        100,050   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, BAM, 5%, 12/01/39      10,000        11,441   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/39      75,000        83,181   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/44      120,000        132,781   
      $ 5,614,667   
General Obligations - General Purpose - 8.0%   
Aiken County, SC, County Administration Building Project, 5%, 3/01/25    $ 910,000      $ 1,080,043   
Charleston County, SC, General Obligation, Transportation Sales Tax, 5%, 11/01/20      2,000,000        2,388,300   
Clinton, SC, Laurens County School District, ASSD GTY, 6.125%, 3/01/33      1,000,000        1,171,890   
Guam Government, “A”, 5.25%, 11/15/37      280,000        286,098   
Guam Government, “A”, 7%, 11/15/39      50,000        59,044   
Richland County, SC, General Obligation, “B”, 5%, 3/01/23      1,000,000        1,237,920   
South Carolina, State Highway, “A”, 5%, 6/01/18      3,000,000        3,383,790   
York County, SC, 5%, 11/01/20      2,675,000        3,192,479   
York County, SC, 5%, 11/01/21      1,000,000        1,213,580   
      $ 14,013,144   
General Obligations - Schools - 9.4%   
Anderson County, SC, School District, “A”, 5%, 3/01/21    $ 1,065,000      $ 1,276,104   
Anderson County, SC, School District, “A”, 5%, 3/01/26      1,240,000        1,566,157   
Chesterfield County, SC, School District, 5%, 3/01/25      3,000,000        3,535,200   
Lexington County, SC, School District No. 1, “A”, 5%, 3/01/23      1,030,000        1,262,708   
Oconee County, GA, General Obligation, “A”, 5%, 3/01/19      465,000        534,531   
Oconee County, GA, General Obligation, “A”, 5%, 3/01/22      805,000        978,944   
              
Issuer    Shares/Par     Value ($)  
    
General Obligations - Schools - continued   
Orangeburg County, SC, Consolidated School District, 4%, 4/01/19    $ 1,315,000      $ 1,457,848   
Richland County, SC, School District No. 1, “A”, 5%, 3/01/25      2,000,000        2,388,660   
Richland County, SC, School District No. 1, “A”, 5%, 3/01/29      3,000,000        3,494,220   
      $ 16,494,372   
Healthcare Revenue - Hospitals - 16.9%   
DeKalb County, GA, Hospital Authority Rev. (DeKalb Medical Center, Inc.), 6.125%, 9/01/40    $ 400,000      $ 442,516   
Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 8/15/36      925,000        1,066,164   
Florence County, SC, Hospital Rev. (McLeod Regional Medical Center), “A”, 5%, 11/01/37      3,000,000        3,366,900   
Greenville, SC, Hospital Systems, Hospital Facilities Rev., 6%, 5/01/20      3,400,000        3,886,370   
Greenwood County, SC, Hospital Rev. (Self Regional Healthcare), 5.375%, 10/01/39      1,000,000        1,119,390   
Greenwood County, SC, Hospital Rev. (Self Regional Healthcare), “B”, 5%, 10/01/31      1,950,000        2,181,543   
Illinois Finance Authority Rev. (Provena Health), “A”, 6%, 5/01/28      550,000        641,630   
Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 8/15/44      480,000        597,773   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.25%, 7/01/31      155,000        182,251   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.375%, 7/01/41      180,000        210,906   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 6/01/40      605,000        699,961   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 3/01/45      865,000        1,004,810   
Lexington County, SC, Health Services District, Inc., Hospital Rev., 5%, 11/01/32      1,500,000        1,619,805   
Lexington County, SC, Health Services District, Inc., Hospital Rev., Refunding & Improvement, 5%, 11/01/26      500,000        578,060   
Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 10/01/36      465,000        483,781   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 10/01/27      400,000        454,672   
 

 

42

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6.125%, 10/01/39    $ 445,000      $ 501,733   
Richmond, IN, Hospital Authority Rev. (Reid Hospital), “A”, 6.5%, 1/01/29 (Prerefunded 1/01/19)      585,000        695,027   
Royal Oak, MI, Hospital Finance Authority Rev. (William Beaumont Hospital), “V”, 8.25%, 9/01/39 (Prerefunded 9/01/18)      915,000        1,137,016   
South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Anmed Health), “B”, ASSD GTY, 5.5%, 2/01/38      1,500,000        1,694,175   
South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Tuomey Health), CIFG, 5%, 11/01/30      375,000        344,115   
South Carolina Jobs & Economic Development Authority, Hospital Rev. (Conway Hospital, Inc.), 5%, 7/01/37      1,250,000        1,364,063   
South Carolina Jobs & Economic Development Authority, Hospital Rev. (Palmetto Health), 5.75%, 8/01/39      275,000        302,332   
South Carolina Jobs & Economic Development Authority, Hospital Rev. (Palmetto Health), “A”, 5.25%, 8/01/30      1,000,000        1,151,240   
South Dakota Health & Educational Facilities Authority Rev. (Sanford Obligated Group), “B”, 5%, 11/01/44      175,000        196,817   
Spartanburg County, SC, Regional Health Services District, “A”, 5%, 4/15/37      2,000,000        2,204,060   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 7/01/29      105,000        122,282   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 7/01/39      255,000        297,394   
Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2/15/39 (Prerefunded 2/15/19)      945,000        1,138,990   
      $ 29,685,776   
Healthcare Revenue - Long Term Care - 1.0%   
South Carolina Jobs & Economic Development Authority Rev. (Woodlands at Furman), “A”, 6%, 11/15/47    $ 224,867      $ 222,623   
South Carolina Jobs & Economic Development Authority Rev. (Woodlands at Furman), Capital Appreciation, “B”, 0%, 11/15/47      152,775        15,012   
South Carolina Jobs & Economic Development Authority, Health & Facilities Rev., First Mortgage (Wesley Commons), 5.125%, 10/01/26      400,000        403,156   
South Carolina Jobs & Economic Development Authority, Health Facilities Rev. (Lutheran Homes of South Carolina, Inc.), 5%, 5/01/43      750,000        773,663   
              
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Long Term Care - continued   
South Carolina Jobs & Economic Development Authority, Health Facilities Rev. (Lutheran Homes of South Carolina, Inc.), 5.125%, 5/01/48    $ 250,000      $ 258,018   
      $ 1,672,472   
Industrial Revenue - Chemicals - 0.6%   
York County, SC, Industrial Rev. (Hoechst Celanese), 5.7%, 1/01/24    $ 1,000,000      $ 1,002,670   
Industrial Revenue - Other - 0.6%   
Calhoun County, SC, Solid Waste Disposal Facilities Rev. (Carolina Eastman Co.), ETM, 6.75%, 5/01/17    $ 1,000,000      $ 1,119,210   
Industrial Revenue - Paper - 0.7%   
Richland County, SC, Environmental Improvement Rev. (International Paper), “A”, 3.875%, 4/01/23    $ 1,000,000      $ 1,079,550   
Valparaiso, IN, Exempt Facilities Rev. (Pratt Paper LLC Project), 7%, 1/01/44      100,000        123,288   
      $ 1,202,838   
Miscellaneous Revenue - Other - 0.0%                 
Summit County, OH, Port Authority Building Rev. (Flats East Development Recovery Zone Facility Bonds), 6.875%, 5/15/40    $ 45,000      $ 51,478   
Multi-Family Housing Revenue - 0.6%                 
North Charleston, SC, Housing Authority Rev. (Horizon Village), “A”, GNMA, 5%, 2/20/38    $ 1,000,000      $ 1,021,170   
Port Revenue - 0.2%                 
South Carolina Ports Authority, Ports Rev., 5.25%, 7/01/40    $ 250,000      $ 282,598   
Sales & Excise Tax Revenue - 0.8%                 
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6%, 1/15/41    $ 725,000      $ 832,133   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/17      200,000        218,988   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 8/01/57      395,000        276,559   
      $ 1,327,680   
Single Family Housing - State - 1.7%                 
California Housing Finance Agency Rev. (Home Mortgage), “I”, 4.7%, 8/01/26    $ 830,000      $ 835,752   
South Carolina Housing, Finance & Development Authority Rev., 5.55%, 7/01/38      200,000        206,532   
South Carolina Housing, Finance & Development Authority Rev., “A-2”, AMBAC, 5.15%, 7/01/37      815,000        821,862   
South Carolina Housing, Finance & Development Authority Rev., “C-2”, AGM, 4.6%, 7/01/32      1,160,000        1,170,742   
      $ 3,034,888   
 

 

43

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Solid Waste Revenue - 0.6%                 
Three Rivers, SC, Solid Waste Authority Rev., 5%, 10/01/28 (Prerefunded 10/01/17)    $ 1,000,000      $ 1,104,920   
State & Local Agencies - 8.6%                 
Berkeley County, SC, General Obligation, “A”, 5%, 3/01/24    $ 1,000,000      $ 1,242,500   
Berkeley County, SC, School District Special Obligation, 5%, 12/01/20      800,000        928,136   
Berkeley County, SC, School District Special Obligation, 5%, 12/01/21      1,000,000        1,171,520   
Charleston County, SC, Special Source Rev., “C”, 5%, 12/01/21      1,000,000        1,196,970   
Charleston, SC, Educational Excellence Finance Corp. Rev. (Charleston County School District Project), 5%, 12/01/31      3,720,000        3,998,182   
Charleston, SC, Educational Excellence Finance Corp. Rev. (Charleston County School District Project), “B”, 5%, 12/01/30      2,000,000        2,361,740   
Greenville County, SC, School District Installment Purchase Rev., AGM, 5%, 12/01/28      680,000        723,085   
Lexington County, SC, One School Facilities Corp. Installment Purchase Rev. (School District No.1 SC Project), 5%, 12/01/30      725,000        831,930   
Los Angeles, CA, Municipal Improvement Corp. Lease Rev. (Real Property), “E”, 6%, 9/01/39      290,000        340,585   
Scago, SC, Educational Facilities Installment Purchase Rev. (School District of Pickens County Project), 5%, 12/01/28      2,000,000        2,345,140   
      $ 15,139,788   
Tax - Other - 4.2%                 
Greenville County, SC, Hospitality Tax Rev., AGM, 5%, 4/01/22    $ 1,025,000      $ 1,187,083   
Greenville County, SC, Tourism Public Facilities Corp., Hospitality Tax, 4.75%, 4/01/29      750,000        848,820   
Greenville County, SC, Tourism Public Facilities Corp., Hospitality Tax, 4.75%, 4/01/30      500,000        568,175   
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24      180,000        200,860   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      60,000        66,560   
Virgin Islands Public Finance Authority Rev. (Diageo Project), “A”, 6.75%, 10/01/37      160,000        183,197   
Virgin Islands Public Finance Authority Rev., “A”, 5%, 10/01/24      585,000        686,369   
Virgin Islands Public Finance Authority Rev., “A”, 5%, 10/01/29      585,000        659,939   
Virgin Islands Public Finance Authority Rev., “A”, 5%, 10/01/32      2,100,000        2,316,405   
Virgin Islands Public Finance Authority Rev., “A”, 5%, 10/01/34      580,000        643,365   
      $ 7,360,773   
              
Issuer    Shares/Par     Value ($)  
    
Tax Assessment - 0.2%                 
Lancaster County, SC, Assessment Rev. (Sun City Carolina Lakes), 5.45%, 12/01/37    $ 385,000      $ 388,265   
Tobacco - 1.7%                 
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 6/01/47    $ 525,000      $ 442,024   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-2”, 5.3%, 6/01/37      840,000        694,210   
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28      850,000        1,012,537   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.75%, 6/01/34      235,000        179,606   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 5%, 6/01/41      920,000        705,612   
      $ 3,033,989   
Toll Roads - 0.6%                 
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 6%, 1/01/37    $ 335,000      $ 389,829   
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 5.5%, 1/01/42      535,000        587,510   
             $ 977,339   
Transportation - Special Tax - 2.3%                 
Commonwealth of Puerto Rico Highway & Transportation Authority Rev., “AA-1”, AGM, 4.95%, 7/01/26    $ 735,000      $ 757,087   
South Carolina Transportation Infrastructure Rev., “A”, 5%, 10/01/23      2,825,000        3,329,263   
      $ 4,086,350   
Universities - Colleges - 4.3%                 
College of Charleston, SC, Academic & Administrative Facilities Rev., “B”, 5%, 4/01/22    $ 1,205,000      $ 1,439,638   
Pinellas County, FL, Educational Facilities Authority Rev. (Barry University), 6%, 10/01/41      200,000        228,220   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.125%, 4/01/32      75,000        66,099   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.375%, 4/01/42      125,000        107,636   
Puerto Rico Industrial, Tourist, Medical, & Environmental Central Facilities (University of Sacred Heart), 4.375%, 10/01/31      55,000        45,118   
 

 

44

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Universities - Colleges - continued                 
Puerto Rico Industrial, Tourist, Medical, & Environmental Central Facilities (University of Sacred Heart), 5%, 10/01/42    $ 30,000      $ 24,698   
South Carolina Educational Facilities Authority (Wofford College), 5.25%, 4/01/32      1,000,000        1,065,650   
University of South Carolina, Athletic Facilities Rev., “A”, 5%, 5/01/35      1,000,000        1,133,960   
University of South Carolina, Athletic Facilities Rev., “A”, 5.5%, 5/01/38      1,000,000        1,108,480   
University of South Carolina, Athletic Facilities Rev., “A”, 5%, 5/01/40      2,000,000        2,267,920   
      $ 7,487,419   
Universities - Dormitories - 2.3%                 
University of South Carolina, Higher Education Rev., “A”, 5%, 6/01/35    $ 2,555,000      $ 2,901,177   
University of South Carolina, Higher Education Rev., “A”, 5%, 6/01/39      1,000,000        1,099,540   
             $ 4,000,717   
Universities - Secondary Schools - 0.1%   
North Texas Education Finance Corp., Education Rev. (Uplift Education), “A”, 5.125%, 12/01/42    $ 220,000      $ 241,745   
Utilities - Investor Owned - 0.6%                 
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.625%, 7/01/20    $ 800,000      $ 946,456   
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.5%, 8/01/29 (Put Date 8/01/16)      150,000        158,256   
      $ 1,104,712   
Utilities - Municipal Owned - 8.1%                 
Easley, SC, Utility Rev., AGM, 5.25%, 12/01/31    $ 2,500,000      $ 2,802,825   
Easley, SC, Utility Rev., ASSD GTY, 5%, 12/01/34      2,325,000        2,654,290   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/24      860,000        1,028,113   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/39      145,000        168,297   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/44      170,000        196,404   
Piedmont, SC, Municipal Power Agency, NATL, 6.25%, 1/01/21      2,700,000        3,346,353   
Piedmont, SC, Municipal Power Agency, “C”, AGM, 5%, 1/01/30      1,000,000        1,117,390   
South Carolina Public Service Authority Rev., “A”, 5.5%, 1/01/38      2,500,000        2,838,775   
      $ 14,152,447   
Utilities - Other - 2.1%                 
California M-S-R Energy Authority Gas Rev., “A”, 6.5%, 11/01/39    $ 685,000      $ 944,711   
Nebraska Central Plains Energy Project, Gas Project Rev., “3”, 5%, 9/01/42      790,000        867,878   
Public Authority for Colorado Energy Natural Gas Purchase Rev., 6.25%, 11/15/28      130,000        166,993   
              
Issuer    Shares/Par     Value ($)  
    
Utilities - Other - continued                 
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/21    $ 270,000      $ 312,895   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/22      290,000        337,914   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/26      570,000        677,992   
Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2/01/21      330,000        373,553   
      $ 3,681,936   
Water & Sewer Utility Revenue - 16.1%   
Charleston, SC, Waterworks & Sewer Rev., Capital Improvement, 5%, 1/01/35    $ 1,000,000      $ 1,138,540   
Columbia, SC, Waterworks & Sewer Systems Rev., “A”, 5%, 2/01/25      580,000        672,875   
Columbia, SC, Waterworks & Sewer Systems Rev., “A”, 5%, 2/01/36      3,000,000        3,412,020   
Columbia, SC, Waterworks and Sewer System Rev., 5%, 2/01/20      120,000        140,382   
Columbia, SC, Waterworks and Sewer System Rev., 5%, 2/01/21      400,000        476,320   
Dorchester County, SC, Waterworks & Sewer Systems Rev., ASSD GTY, 5%, 10/01/29      1,000,000        1,121,850   
Greenville, SC, Renewable Water Resource Sewer Systems Rev., “A”, 5%, 1/01/24      1,000,000        1,149,950   
Greenwood, SC, Sewer Systems Rev., AGM, 5%, 10/01/30      1,000,000        1,108,880   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.625%, 7/01/40      315,000        351,468   
Kershaw County, SC, Waterworks System Rev. (Lugoff Water District), “B”, 5%, 7/01/30      500,000        598,030   
Kershaw County, SC, Waterworks System Rev. (Lugoff Water District), “B”, 5%, 7/01/35      500,000        588,065   
Laurens County, SC, Water & Sewer Commission, Waterworks District (Rabon Creek), “A”, 5%, 3/01/32      1,405,000        1,498,938   
Lexington, SC, Waterworks & Sewer Systems Rev., ASSD GTY, 5%, 1/15/39      2,000,000        2,287,400   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “C-7”, NATL, 5%, 7/01/32      50,000        55,380   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/35      30,000        33,303   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/37      70,000        77,590   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-6”, NATL, 5%, 7/01/36      60,000        65,863   
New York, NY, Municipal Water Finance Authority, Water & Sewer Systems Rev., “AA”, 5%, 6/15/44      885,000        1,014,909   
North Charleston, SC, Sewer District, 5%, 7/01/39      3,425,000        3,955,122   
 

 

45

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Water & Sewer Utility Revenue - continued           
Spartanburg, SC, Sanitary Sewer District Convertible Rev., “B”, 5%, 3/01/34    $ 2,000,000      $ 2,307,460   
Spartanburg, SC, Sanitary Sewer District Convertible Rev., “B”, 5%, 3/01/33      1,000,000        1,137,720   
Spartanburg, SC, Waterworks Rev., ASSD GTY, 5%, 6/01/39      2,000,000        2,260,140   
Spartanburg, SC, Waterworks Rev., “A”, AGM, 5%, 6/01/17      2,040,000        2,231,434   
Sumter, SC, Waterworks & Sewer Systems Rev., SYNCORA, 5%, 12/01/25      540,000        594,135   
      $ 28,277,774   
Total Municipal Bonds
(Identified Cost, $155,449,235)		       $ 167,561,137   
Money Market Funds - 4.9%             
Issuer    Shares/Par     Value ($)  
    
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      8,648,818      $ 8,648,818   
Total Investments
(Identified Cost, $164,098,053)		       $ 176,209,955   
Other Assets, Less Liabilities - (0.4)%        (687,315)   
Net Assets - 100.0%      $ 175,522,640   

See Portfolio Footnotes and Notes to Financial Statements

 

 

46

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS TENNESSEE MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 94.0%             
    
Issuer    Shares/Par     Value ($)  
Airport Revenue - 2.2%                 
Memphis-Shelby County, TN, Airport Authority Facilities Rev., “A”, ASSD GTY, 5%, 7/01/39    $ 1,000,000      $ 1,125,804   
Memphis-Shelby County, TN, Airport Authority Facilities Rev., “D”, 5%, 7/01/25      1,000,000        1,147,230   
             $ 2,273,034   
General Obligations - General Purpose - 17.8%   
Chattanooga, TN, “B”, 4%, 10/01/23    $ 1,325,000      $ 1,505,889   
Guam Government, “A”, 5.25%, 11/15/37      215,000        219,683   
Johnson City, TN, 5%, 6/01/31      1,000,000        1,124,060   
Memphis, TN, “A”, 5%, 11/01/22      1,500,000        1,836,195   
Memphis, TN, “B”, 5%, 4/01/34      1,025,000        1,190,907   
Metropolitan Government of Nashville & Davidson County, TN, 5%, 7/01/21      2,000,000        2,367,100   
Metropolitan Government of Nashville & Davidson County, TN, 5%, 1/01/28 (Prerefunded 1/01/18)      2,000,000        2,221,640   
Pigeon Forge, TN, Industrial Development Board, Public Facilities, 5%, 6/01/34      1,000,000        1,125,580   
Shelby County, TN, “A”, 4.75%, 3/01/18      200,000        222,386   
Shelby County, TN, “A”, 5%, 3/01/28      2,000,000        2,350,000   
State of Tennessee, “A”, 5%, 10/01/29      1,500,000        1,751,115   
Sumner County, TN, 5%, 6/01/21      1,300,000        1,561,027   
Williamson County, TN, School District, “A”, 4%, 3/01/19      1,015,000        1,126,173   
             $ 18,601,755   
General Obligations - Schools - 0.9%                 
Williamson County, TN, School District, 5%, 4/01/26    $ 740,000      $ 949,191   
Healthcare Revenue - Hospitals - 14.0%   
Chattanooga, TN, Health Educational & Housing Facility Board Rev. (Catholic Health Initiatives), “A”, 5%, 10/01/44    $ 1,000,000      $ 1,099,970   
Chattanooga, TN, Health Educational & Housing Facility Board Rev. (Catholic Health Initiatives), “A”, 5.25%, 1/01/45      500,000        566,170   
Chattanooga, TN, Health Educational & Housing Facility Board Rev. (Catholic Health Initiatives), “D”, 6.25%, 10/01/33      1,000,000        1,157,290   
DeKalb County, GA, Hospital Authority Rev. (DeKalb Medical Center, Inc.), 6.125%, 9/01/40      295,000        326,356   
Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 8/15/36      680,000        783,775   
Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 8/15/44 (Prerefunded 8/15/19)      405,000        504,371   
Jackson, TN, Hospital Rev. (Jackson-Madison Project), 5.625%, 4/01/38      1,000,000        1,103,200   
              
Issuer    Shares/Par     Value ($)  
Healthcare Revenue - Hospitals - continued   
Johnson City, TN, Health & Education Financing Authority Rev. (Johnson City Medical Center Hospital), ETM, NATL, 5%, 7/01/18    $ 165,000      $ 165,652   
Johnson City, TN, Health & Educational Facilities Board, Hospital Rev. (Mountain States Health Alliance), “A”, 5.5%, 7/01/31      400,000        421,784   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 6/01/40      790,000        913,998   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 3/01/45      265,000        307,832   
Knox County, TN, Health, Educational & Housing Facility Board Hospital Rev. (Covenant Health), “A”, 5%, 1/01/24      1,000,000        1,180,510   
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Covenant Health), Capital Appreciation, “A”, AGM, 0%, 1/01/41      900,000        252,504   
Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 10/01/36      675,000        702,263   
Miami-Dade County, FL, Health Facilities Authority Hospital Rev. (Variety Children’s Hospital), “A”, 6%, 8/01/30      85,000        100,276   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 10/01/27      510,000        579,707   
Rutherford County, TN, Health & Educational Facilities Board Rev. (Ascension Health Senior Credit Group), “C”, 5%, 11/15/40      1,500,000        1,670,325   
Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Methodist Healthcare), “B”, AGM, 5.25%, 9/01/27      1,500,000        1,653,135   
St. Petersburg, FL, Health Facilities Authority Rev., 6.5%, 11/15/39      170,000        201,627   
Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2/15/39 (Prerefunded 2/15/19)      785,000        946,145   
             $ 14,636,890   
Healthcare Revenue - Long Term Care - 3.0%   
Blount County, TN, Health & Educational Facilities Board Rev. (Asbury, Inc.), “A”, 5.125%, 4/01/23    $ 395,000      $ 403,651   
Johnson City, TN, Health & Educational Facilities Board Rev. (Appalachian Christian Village Project), “A”, 5%, 2/15/43      1,000,000        1,036,810   
Nashville & Davidson County, TN, Metropolitan Government Health & Educational Facilities Board Rev. (The Blakeford at Green Hills), 5%, 7/01/37      1,000,000        1,072,090   
 

 

47

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
Healthcare Revenue - Long Term Care - continued   
Shelby County, TN, Health, Educational & Housing Board Residential Care Facility Mortgage Rev. (Village at Germantown), 5.25%, 12/01/49    $ 550,000      $ 571,307   
             $ 3,083,858   
Miscellaneous Revenue - Entertainment & Tourism - 2.8%   
Memphis-Shelby County, TN, Sports Authority, Inc. Rev., “B”, 5.375%, 11/01/29    $ 2,500,000      $ 2,898,200   
Miscellaneous Revenue - Other - 5.8%   
ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Jackson Lab), 5.75%, 7/01/37 (Prerefunded 7/01/15)    $ 1,000,000      $ 1,033,900   
Hardeman County, TN, Correctional Facilities Rev., 7.75%, 8/01/17      340,000        339,997   
Metropolitan Government of Nashville & Davidson County, TN, Sports Authority Rev., Public Improvement, “A”, 5%, 8/01/21      535,000        634,863   
Metropolitan Government of Nashville & Davidson County, TN, Sports Authority Rev., Public Improvement, “A”, 5%, 8/01/23      1,205,000        1,462,810   
Metropolitan Nashville Airport Authority, Special Facilities Rev. (Aero Nashville LLC Project), 5.2%, 7/01/26      880,000        957,422   
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “1”, 5%, 11/15/44      515,000        542,017   
New York Liberty Development Corp., Liberty Rev. (7 World Trade Center Project), 5%, 9/15/40      980,000        1,124,060   
             $ 6,095,069   
Multi-Family Housing Revenue - 1.0%   
Knoxville, TN, Community Development Corp., 5%, 7/01/24    $ 1,000,000      $ 1,003,450   
Sales & Excise Tax Revenue - 1.3%   
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6.5%, 1/15/30    $ 480,000      $ 569,573   
Guam Government Business Privilege Tax Rev., “A”, 5.25%, 1/01/36      300,000        335,895   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/17      120,000        131,393   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 8/01/57      250,000        175,038   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., Capital Appreciation, 0%, 8/01/56      2,820,000        174,276   
             $ 1,386,175   
Single Family Housing - State - 2.9%   
Tennessee Housing Development Agency Rev., Homeownership Program, 5%, 7/01/26    $ 900,000      $ 910,962   
Tennessee Housing Development Agency Rev., Homeownership Program, 5%, 7/01/29      715,000        750,557   
              
Issuer    Shares/Par     Value ($)  
Single Family Housing - State - continued   
Tennessee Housing Development Agency Rev., Homeownership Program, “2”, 4.55%, 7/01/24    $ 1,235,000      $ 1,311,842   
             $ 2,973,361   
State & Agency - Other - 1.0%   
Hardeman County, TN, Industrial Development Board Rev., “B”, ASSD GTY, 5%, 6/01/40    $ 1,000,000      $ 1,063,690   
State & Local Agencies - 7.2%   
Chattanooga, TN, Industrial Development Board, Lease Rental Rev. (Southside Redevelopment Corp.), 5%, 10/01/20    $ 700,000      $ 810,138   
Chattanooga, TN, Industrial Development Board, Lease Rental Rev. (Southside Redevelopment Corp.), 5%, 10/01/24      1,000,000        1,155,650   
Tennessee School Board Authority, Higher Education Facilities Rev., 5.125%, 5/01/33 (Prerefunded 5/01/18)      360,000        405,680   
Tennessee School Board Authority, Higher Education Facilities Rev., 5.125%, 5/01/33      1,640,000        1,837,817   
Tennessee School Bond Authority, “A”, 5%, 11/01/43      1,000,000        1,138,360   
Tennessee School Bond Authority, “C”, AGM, 5%, 5/01/32      2,000,000        2,161,940   
             $ 7,509,585   
Tax - Other - 0.8%                 
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24    $ 150,000      $ 167,384   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      50,000        55,467   
Virgin Islands Public Finance Authority Rev., “B”, AGM, 5%, 10/01/25      250,000        284,780   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, AGM, 5%, 10/01/25      245,000        281,449   
             $ 789,080   
Tobacco - 1.7%                 
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28    $ 200,000      $ 238,244   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.5%, 6/01/23      260,000        260,624   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.75%, 6/01/34      190,000        145,213   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 5%, 6/01/41      550,000        421,834   
Virgin Islands Tobacco Settlement Financing Corp., 5%, 5/15/31      750,000        750,015   
             $ 1,815,930   
Toll Roads - 0.6%                 
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 6%, 1/01/37    $ 200,000      $ 232,734   
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 5.5%, 1/01/42      320,000        351,408   
             $ 584,142   
 

 

48

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
Transportation - Special Tax - 0.6%   
Commonwealth of Puerto Rico Highway & Transportation Authority Rev., “CC”, AGM, 5.5%, 7/01/28    $ 600,000      $ 646,278   
Universities - Colleges - 7.7%   
Claiborne County, TN, Industrial Development Board Rev. (Lincoln Memorial University Project), 6.625%, 10/01/39    $ 500,000      $ 549,250   
Claiborne County, TN, Industrial Development Board Rev. (Lincoln Memorial University Project), 6.125%, 10/01/40      250,000        273,160   
Franklin County, TN, Health & Educational Facilities Board Rev. (University of the South), 4%, 9/01/23      1,000,000        1,105,470   
Franklin County, TN, Health & Educational Facilities Board Rev. (University of the South), 5%, 9/01/28      500,000        575,965   
Franklin County, TN, Health & Educational Facilities Board Rev. (University of the South), 5%, 9/01/30      375,000        428,010   
Nashville & Davidson County, TN, Metropolitan Government Health & Educational Facilities Board, 5%, 10/01/34      2,500,000        2,877,900   
Pinellas County, FL, Educational Facilities Authority Rev. (Barry University), 6%, 10/01/41      120,000        136,932   
Shelby County, TN, Health Educational & Housing Facilities Rev. (Rhodes College) , 5%, 8/01/40      750,000        870,818   
Shelby County, TN, Health Educational & Housing Facilities Rev. (Rhodes College), 5.5%, 8/01/40      1,000,000        1,192,700   
             $ 8,010,205   
Universities - Secondary Schools - 0.1%   
North Texas Education Finance Corp., Education Rev. (Uplift Education), “A”, 5.125%, 12/01/42    $ 130,000      $ 142,849   
Utilities - Municipal Owned - 10.0%   
Chattanooga, TN, Electric Rev., “A”, 5%, 9/01/33    $ 2,000,000      $ 2,211,040   
Citizens Gas Utility District, TN, Gas Rev., 5%, 5/01/35      1,000,000        1,086,320   
Clarksville, TN, Electric System Rev., “A”, 5%, 9/01/34      1,250,000        1,425,025   
Guam Power Authority Rev., “A”, 5.5%, 10/01/30      300,000        340,371   
Guam Power Authority Rev., “A”, 5.5%, 10/01/40      470,000        528,915   
Johnson City, TN, Electric Rev., AGM, 5%, 5/01/29      1,000,000        1,104,760   
Long Island, NY, Power Authority, Electric Systems Rev., “A”, 6%, 5/01/33      195,000        228,249   
Memphis, TN, Electric Systems Rev., 5%, 12/01/34      1,000,000        1,174,960   
              
Issuer    Shares/Par     Value ($)  
Utilities - Municipal Owned - continued   
Metropolitan Government of Nashville & Davidson County, TN, Electric System Rev., “A”, 5%, 5/15/39    $ 2,000,000      $ 2,334,460   
             $ 10,434,100   
Utilities - Other - 1.8%                 
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/21    $ 225,000      $ 260,746   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/22      115,000        134,000   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/23      85,000        99,960   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/26      1,200,000        1,427,352   
             $ 1,922,058   
Water & Sewer Utility Revenue - 10.8%   
Clarksville, TN, Water, Sewer & Gas Rev., 5%, 2/01/29    $ 1,000,000      $ 1,152,220   
Harpeth Valley, TN, Utilities District, Davidson & Williamson Counties Rev., FGIC, 5.25%, 9/01/37      1,000,000        1,086,920   
Knoxville, TN, Waste Water System Rev., “B”, 5%, 4/01/21      1,150,000        1,374,871   
Memphis, TN, Sanitary Sewerage System Rev., 5%, 10/01/21      865,000        1,018,875   
Metropolitan Government of Nashville & Davidson County, TN, Water & Sewer Rev., 5%, 7/01/32      2,000,000        2,323,640   
Metropolitan Government of Nashville & Davidson County, TN, Water & Sewer Rev., “A”, AGM, 5.25%, 1/01/22      1,365,000        1,666,911   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “C-7”, NATL, 5%, 7/01/32      30,000        33,228   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/35      20,000        22,202   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/37      45,000        49,879   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-6”, NATL, 5%, 7/01/36      35,000        38,420   
Mississippi Development Bank Special Obligation (City of Jackson Water and Sewer System Rev. Bond Project), AGM, 6.875%, 12/01/40      65,000        85,240   
South Blount County, TN, Utility District Waterworks Rev., AGM, 5%, 12/01/33      2,140,000        2,446,191   
             $ 11,298,597   
Total Municipal Bonds
(Identified Cost, $90,713,024)		       $ 98,117,497   
 

 

49

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Portfolio of Investments – continued

 

Money Market Funds - 3.2%             
    
Issuer    Shares/Par     Value ($)  
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      3,310,314      $ 3,310,314   
Total Investments
(Identified Cost, $94,023,338)		       $ 101,427,811   
Other Assets, Less Liabilities - 2.8%              2,947,385   
Net Assets - 100.0%            $ 104,375,196   

See Portfolio Footnotes and Notes to Financial Statements

 

 

50

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS VIRGINIA MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 100.0%             
    
Issuer    Shares/Par     Value ($)  
Airport Revenue - 3.5%                 
Chicago, IL, O’Hare International Airport Rev., Third Lien, “A”, 5.625%, 1/01/35    $ 855,000      $ 988,500   
Metropolitan Washington, DC, Airport Authority Rev., 5.375%, 10/01/28      1,500,000        1,674,472   
Metropolitan Washington, DC, Airport Authority Rev., “A”, NATL, 5%, 10/01/35      3,000,000        3,058,230   
Norfolk, VA, Airport Authority Rev., AGM, 5%, 7/01/23      2,000,000        2,272,740   
Norfolk, VA, Airport Authority Rev., AGM, 5%, 7/01/24      1,000,000        1,156,320   
Virginia Resources Authority, Airport Rev., “B”, 5.125%, 8/01/27      720,000        722,621   
             $ 9,872,883   
General Obligations - General Purpose - 13.5%           
Arlington County, VA, General Obligation, “A”, 5%, 8/01/22    $ 1,950,000      $ 2,394,015   
Chesapeake, VA, “B”, 5%, 6/01/23      1,930,000        2,282,746   
Guam Government, “A”, 6.75%, 11/15/29      925,000        1,060,725   
Guam Government, “A”, 5.25%, 11/15/37      540,000        551,761   
Guam Government, “A”, 7%, 11/15/39      110,000        129,896   
Isle Wight County, VA, “A”, 4%, 4/01/20      1,045,000        1,179,000   
Loudoun County , VA, General Obligation Public Improvement, “A”, 5%, 12/01/22      3,000,000        3,706,470   
Loudoun County , VA, General Obligation Public Improvement, “B”, 5%, 11/01/18      5,500,000        6,272,970   
Lynchburg, VA, Public Improvement, 5%, 12/01/23      1,000,000        1,180,140   
Lynchburg, VA, Public Improvement, 5%, 6/01/26      1,000,000        1,224,140   
Portsmouth, VA, General Obligation Public Improvement, “A”, 5%, 2/01/22      1,255,000        1,520,244   
Portsmouth, VA, General Obligation Public Improvement, “A”, 5%, 2/01/32      500,000        582,220   
Richmond, VA, General Obligation Public Improvement, “A”, 5%, 3/01/19      1,250,000        1,434,838   
Richmond, VA, Public Improvement, “A”, 5%, 3/01/24      1,785,000        2,178,914   
Richmond, VA, Public Improvement, “A”, 5%, 3/01/28      220,000        261,540   
Richmond, VA, Public Improvement, “B”, 5%, 7/15/20      1,685,000        1,993,406   
Stafford County, VA, General Obligation Public Improvement, 5%, 7/01/22      555,000        673,731   
Suffolk, VA, General Obligation, 5%, 12/01/21      3,330,000        4,046,450   
Suffolk, VA, General Obligation, 5%, 12/01/22      2,480,000        3,060,022   
Virginia Beach, VA, Public Improvement, “B”, 5%, 4/01/22      2,000,000        2,445,340   
             $ 38,178,568   
Healthcare Revenue - Hospitals - 17.1%           
Charlotte County, VA, Industrial Development Authority Rev. (Halifax Hospital), 5%, 9/01/37    $ 1,000,000      $ 1,057,050   
              
Issuer    Shares/Par     Value ($)  
Healthcare Revenue - Hospitals - continued           
Fairfax County, VA, Industrial Development Authority Rev. (Inova Health System Project), “A”, 5.5%, 5/15/35    $ 1,500,000      $ 1,710,540   
Fairfax County, VA, Industrial Development Authority Rev. (Inova Health System Project), “A”, 5%, 5/15/44      2,000,000        2,287,900   
Fairfax County, VA, Industrial Development Authority Rev. (Inova Health System Project), “C”, 5%, 5/15/25      500,000        570,850   
Fauquier County, VA, Industrial Development Authority Hospital Authority Rev. (Fauquier Hospital Obligation Group), “B”, 5.25%, 10/01/37      2,000,000        2,224,840   
Fredericksburg, VA, Economic Development Authority, Hospital Facilities Rev. (Mary Washington Healthcare Obligated Group), 5%, 6/15/31      750,000        829,755   
Fredericksburg, VA, Economic Development Authority, Hospital Facilities Rev. (Mary Washington Healthcare Obligated Group), 5%, 6/15/33      1,000,000        1,101,410   
Fredericksburg, VA, Economic Development Authority, Hospital Facilities Rev. (Medicorp Health System), 5.25%, 6/15/19      1,125,000        1,251,439   
Henrico County, VA, Economic Development Authority Rev. (Bon Secours Health Systems, Inc.), “B-2”, AGM, 5.25%, 11/01/42      1,705,000        1,932,686   
Henrico County, VA, Industrial Development Authority Rev. (Bon Secours Health Systems, Inc.), NATL, 6.25%, 8/15/20      1,500,000        1,683,345   
Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 8/15/44      970,000        1,207,999   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.25%, 7/01/31      375,000        440,929   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.375%, 7/01/41      395,000        462,822   
Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 10/01/36      1,635,000        1,701,038   
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 10/01/27      635,000        721,792   
Norfolk, VA, Economic Development Authority Health Care Facilities Rev. (Sentara Healthcare), “B”, 5%, 11/01/36      2,875,000        3,281,180   
Roanoke, VA, Economic Development Authority, Hospital Rev. (Carilion Medical Center), 5%, 7/01/33      2,385,000        2,671,582   
 

 

51

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
Healthcare Revenue - Hospitals - continued           
Roanoke, VA, Industrial Development Authority, Hospital Rev. (Carilion Health Systems), “B”, 5%, 7/01/38 (Prerefunded 7/01/20)    $ 45,000      $ 53,197   
Roanoke, VA, Industrial Development Authority, Hospital Rev. (Carilion Health Systems), “B”, N, 5%, 7/01/38      2,955,000        3,288,531   
Roanoke, VA, Industrial Development Authority, Hospital Rev. (Roanoke Memorial Hospital), “B”, ETM, NATL, 6.125%, 7/01/17      2,315,000        2,465,035   
Royal Oak, MI, Hospital Finance Authority Rev. (William Beaumont Hospital), “V”, 8.25%, 9/01/39 (Prerefunded 9/01/18)      1,805,000        2,242,965   
Virginia Small Business Financing Authority, Healthcare Facility Rev. (Sentra Healthcare), 5%, 11/01/40      4,000,000        4,519,360   
Virginia Small Business Financing Authority, Hospital Rev. (Wellmont Health Project), ‘‘A’’, 5.25%, 9/01/37      2,000,000        2,099,320   
Washington County, VA, Industrial Development Authority, Hospital Facilities Rev. (Mountain States Health Alliance), “C”, 7.5%, 7/01/29      1,400,000        1,644,608   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 7/01/29      220,000        256,210   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 7/01/39      530,000        618,113   
Winchester, VA, Economic Development Authority, Hospital Rev. (Valley Health System Obligated Group), “A”, 5%, 1/01/44      2,000,000        2,248,380   
Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2/15/39 (Prerefunded 2/15/19)      1,880,000        2,265,926   
Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Healthcare), 5.25%, 8/15/31      1,280,000        1,329,267   
             $ 48,168,069   
Healthcare Revenue - Long Term Care - 1.9%           
Albemarle County, VA, Economic Development Authority, Residential Care Facilities Rev. (Westminster-Canterbury Blue Ridge), “A”, 5%, 1/01/42    $ 1,000,000      $ 1,046,330   
Chesterfield County, VA, Health Center Commission Residential Care Facility, 6.25%, 12/01/38      750,000        624,878   
Henrico County, VA, Economic Development Authority Rev., Residential Care Facility (Virginia United Methodist Homes, Inc.), 5%, 6/01/24      395,000        429,898   
Henrico County, VA, Economic Development Authority Rev., Residential Care Facility (Virginia United Methodist Homes, Inc.), 5%, 6/01/25      385,000        416,489   
              
Issuer    Shares/Par     Value ($)  
Healthcare Revenue - Long Term Care - continued           
James City County, VA, Economic Development Authority, Residential Care Facilities Rev. (Virginia United Methodist Homes of Williamsburg), “A”, 2%, 10/01/48 (a)    $ 200,800      $ 8,737   
Lexington, VA, Industrial Development Authority Residential Care Facilities (Kendal at Lexington), “A”, 5.5%, 1/01/37      1,000,000        1,022,660   
Norfolk, VA, Redevelopment & Housing Authority Rev. (Fort Norfolk Retirement Community), 5.375%, 1/01/46      500,000        517,115   
Suffolk, VA, Industrial Development Authority, Retirement Facilities Rev. (Lake Prince Center, Inc.), 5.3%, 9/01/31      750,000        756,780   
Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7%, 11/01/30      175,000        205,910   
Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7.125%, 11/01/40      265,000        309,173   
             $ 5,337,970   
Industrial Revenue - Paper - 0.1%                 
Valparaiso, IN, Exempt Facilities Rev. (Pratt Paper LLC Project), 6.75%, 1/01/34    $ 100,000      $ 122,547   
Valparaiso, IN, Exempt Facilities Rev. (Pratt Paper LLC Project), 7%, 1/01/44      130,000        160,274   
West Point, VA, Industrial Development Authority, Solid Waste Disposal Rev. (Chesapeake Corp.), “A”, 6.375%, 3/01/19 (a)(d)      1,683,272        17   
             $ 282,838   
Miscellaneous Revenue - Other - 0.0%           
Summit County, OH, Port Authority Building Rev. (Flats East Development Recovery Zone Facility Bonds), 6.875%, 5/15/40    $ 80,000      $ 91,517   
Multi-Family Housing Revenue - 5.9%           
Arlington County, VA, Industrial Development Authority Rev. (Colonial Village), FNMA, 5.15%, 11/01/31 (Put Date 11/01/19)    $ 2,705,000      $ 2,759,262   
Virginia Housing Development Authority Rev., “C”, 5.625%, 11/01/38      1,355,000        1,389,241   
Virginia Housing Development Authority Rev., “D”, 4.6%, 7/01/33      1,000,000        1,005,810   
Virginia Housing Development Authority Rev., Rental Housing, “B”, 5.5%, 6/01/30      1,450,000        1,555,053   
Virginia Housing Development Authority Rev., Rental Housing, “B”, 5%, 6/01/45      3,050,000        3,219,702   
Virginia Housing Development Authority Rev., Rental Housing, “E”, 4.8%, 10/01/39      3,000,000        3,134,130   
Virginia Housing Development Authority Rev., Rental Housing, “F”, 4.8%, 4/01/37      1,330,000        1,410,505   
Virginia Housing Development Authority Rev., Rental Housing, “F”, 5%, 4/01/45      2,125,000        2,243,065   
             $ 16,716,768   
 

 

52

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
Port Revenue - 1.6%                 
Virginia Port Authority Facilities Rev, “A”, 5%, 7/01/31    $ 3,000,000      $ 3,448,770   
Virginia Port Authority Facilities Rev., FGIC, 5%, 7/01/36      1,000,000        1,002,490   
             $ 4,451,260   
Sales & Excise Tax Revenue - 0.8%                 
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6%, 1/15/41    $ 1,320,000      $ 1,515,056   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 8/01/28 (Prerefunded 8/01/19)      40,000        47,216   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “C”, 5.25%, 8/01/40      825,000        596,063   
             $ 2,158,335   
Single Family Housing - State - 2.6%                 
California Housing Finance Agency Rev. (Home Mortgage), “I”, 4.7%, 8/01/26    $ 1,370,000      $ 1,379,494   
Virginia Housing Development Authority Commonwealth, “B”, 4.75%, 7/01/32      2,000,000        2,027,280   
Virginia Housing Development Authority Rev., Rental Housing, “F”, 5.1%, 1/01/41      3,770,000        4,030,658   
             $ 7,437,432   
State & Local Agencies - 11.2%                 
Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.925%, 6/01/37    $ 1,915,000      $ 1,621,162   
Fairfax County, VA, Economic Development Authority Facilities Rev. (County Facilities Projects), “A”, 5%, 10/01/33      500,000        590,285   
Fairfax County, VA, Economic Development Authority Facilities Rev. (County Facilities Projects), “A”, 5%, 10/01/34      1,000,000        1,176,920   
Manassas Park, VA, Economic Development Authority Lease Rev., “A”, 6%, 7/15/35      1,000,000        1,144,610   
Montgomery County, VA, Industrial Development Authority (Public Facilities Project), 5%, 2/01/29      500,000        546,855   
Powhatan County, VA, 5%, 1/15/32      2,500,000        2,823,150   
Stafford County, VA, Economic Development Authority Lease Rev., 5%, 4/01/33 (Prerefunded 4/01/18)      2,400,000        2,678,880   
Stafford County, VA, Economic Development Authority Lease Rev., 5%, 4/01/33      600,000        657,078   
Virginia College Building Authority, Educational Facilities Rev., 5%, 2/01/23      2,140,000        2,618,739   
Virginia College Building Authority, Educational Facilities Rev. (21st Century College & Equipment), “A”, 5%, 2/01/29      1,500,000        1,698,525   
Virginia College Building Authority, Educational Facilities Rev. (Public Higher Education Financing), “A”, 5%, 9/01/34      2,500,000        2,938,875   
Virginia College Building Authority, Educational Facilities Rev. (Public Higher Education Financing), “A”, 5%, 9/01/27      3,000,000        3,536,760   
              
Issuer    Shares/Par     Value ($)  
State & Local Agencies - continued                 
Virginia College Building Authority, Educational Facilities Rev. (Public Higher Education Financing), “B”, 5%, 9/01/20    $ 3,000,000      $ 3,543,630   
Virginia Public Building Authority, Public Facilities Rev., “B”, 5.25%, 8/01/28      1,000,000        1,122,590   
Virginia Public Building Authority, Public Facilities Rev., “B”, 5%, 8/01/29      950,000        1,089,299   
Virginia Public Building Authority, Public Facilities Rev., “B-3”, 4%, 8/01/21      1,000,000        1,138,240   
Virginia Public School Authority (1997 Resolution), “A”, 5%, 8/01/19      1,175,000        1,360,885   
Virginia Public School Authority (1997 Resolution), “A”, 5%, 8/01/30      1,000,000        1,166,580   
Virginia Resource Authority Infrastructure Rev. (Virginia Pooled Financing Program), “A”, 5%, 8/01/29 (Prerefunded 8/01/19)      100,000        116,119   
             $ 31,569,182   
Tax - Other - 1.5%                 
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24    $ 365,000      $ 407,300   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      120,000        133,120   
Virgin Islands Public Finance Authority Rev. (Diageo), “A”, 6.625%, 10/01/29      830,000        946,026   
Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 10/01/29      250,000        270,245   
Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 10/01/39      285,000        305,970   
Virgin Islands Public Finance Authority Rev., “B”, 5%, 10/01/25      250,000        275,998   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, 5%, 10/01/29      1,645,000        1,805,420   
             $ 4,144,079   
Tax Assessment - 0.3%                 
Embrey Mill Community Development Authority, VA, Special Assessment Rev., 7.25%, 3/01/43    $ 750,000      $ 787,635   
Tobacco - 2.7%                 
Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 5.75%, 6/01/34    $ 275,000      $ 222,632   
Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 6%, 6/01/42      1,110,000        927,916   
Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 6.5%, 6/01/47      1,230,000        1,091,564   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 6/01/47      100,000        84,195   
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28      1,575,000        1,876,172   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.5%, 6/01/23      740,000        741,776   
Virgin Islands Tobacco Settlement Financing Corp., 5%, 5/15/21      295,000        295,041   
 

 

53

Table of Contents

Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
Tobacco - continued                 
Virginia Tobacco Settlement Financing Corp., 5.625%, 6/01/15    $ 1,000,000      $ 1,009,080   
Virginia Tobacco Settlement Financing Corp., “B-1”, 5%, 6/01/47      2,000,000        1,443,820   
             $ 7,692,196   
Toll Roads - 2.3%                 
Metropolitan Washington, DC, Airports Authority Rev. Senior Lien (Dulles Toll Road), 5%, 10/01/53    $ 2,000,000      $ 2,138,460   
Virginia Small Business Financing Authority Rev. (95 Express Lanes LLC), 5%, 7/01/34      2,500,000        2,689,325   
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 6%, 1/01/37      565,000        657,474   
Virginia Small Business Financing Authority Rev. (Elizabeth River Crossings Opco LLC Project), 5.5%, 1/01/42      905,000        993,826   
             $ 6,479,085   
Transportation - Special Tax - 2.9%                 
Commonwealth of Virginia, Transportation Board Grant Anticipation Rev., “A”, 5%, 9/15/27    $ 2,000,000      $ 2,340,300   
Commonwealth of Virginia, Transportation Board Rev., “A”, 4%, 9/15/26      1,000,000        1,096,000   
Virginia Port Authority, Port Fund Rev., 5%, 7/01/32      1,200,000        1,381,128   
Washington, DC, Metropolitan Area Transit Authority Gross Rev., “A”, 5.25%, 7/01/29      1,485,000        1,697,622   
Washington, DC, Metropolitan Area Transit Authority Gross Rev., “A”, 5.125%, 7/01/32      1,365,000        1,565,846   
             $ 8,080,896   
Universities - Colleges - 7.7%                 
Amherst, VA, Industrial Development Authority Rev. (Educational Facilities Sweet Briar), 5%, 9/01/26    $ 1,770,000      $ 1,753,238   
Massachusetts Development Finance Agency Rev. (Suffolk University), 5%, 7/01/30      615,000        660,387   
Prince William County, VA, Industrial Development Authority Rev. (George Mason University Foundation Prince William Life Sciences Lab), 5.5%, 9/01/34      1,000,000        1,171,380   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.375%, 4/01/42      230,000        198,051   
University of Virginia (University Rev.), 5%, 9/01/25      3,760,000        4,451,765   
University of Virginia, General Rev. Pledge Refunding, “A”, 5%, 6/01/43      685,000        794,305   
Virginia College Building Authority, Educational Facilities Rev. (Marymount University Project), “A”, 5%, 7/01/35      1,000,000        1,070,320   
              
Issuer    Shares/Par     Value ($)  
Universities - Colleges - continued                 
Virginia College Building Authority, Educational Facilities Rev. (Regent University), 5%, 6/01/26    $ 2,000,000      $ 2,043,360   
Virginia College Building Authority, Educational Facilities Rev. (Richmond University), “A”, 5%, 3/01/21      2,115,000        2,518,394   
Virginia College Building Authority, Educational Facilities Rev. (Roanoke College), 4.5%, 4/01/37      2,180,000        2,295,584   
Virginia College Building Authority, Educational Facilities Rev. (Washington & Lee University), NATL, 5.25%, 1/01/31      1,000,000        1,269,110   
Virginia Small Business Financing Authority Rev. (Hampton University), 5.25%, 10/01/29      2,500,000        2,941,625   
Virginia Small Business Financing Authority, Educational Facilities Rev. (Roanoke College), 5.5%, 4/01/33      500,000        573,640   
             $ 21,741,159   
Universities - Secondary Schools - 0.7%           
Alexandria, VA, Industrial Development Authority, Educational Facilities Rev. (Episcopal High School), “A”, 5%, 1/01/40    $ 1,900,000      $ 2,091,729   
Utilities - Municipal Owned - 3.2%                 
Bristol, VA, Utility Systems Rev., ETM, AGM, 5.75%, 7/15/16    $ 240,000      $ 256,798   
Guam Power Authority Rev., “A”, 5.5%, 10/01/30      785,000        890,637   
Guam Power Authority Rev., “A”, 5.5%, 10/01/40      1,250,000        1,406,688   
Long Island, NY, Power Authority, Electric Systems Rev., “A”, 6%, 5/01/33      470,000        550,140   
Puerto Rico Electric Power Authority Rev., “DDD”, AGM, 3.625%, 7/01/23      60,000        56,018   
Puerto Rico Electric Power Authority Rev., “DDD”, AGM, 3.65%, 7/01/24      260,000        241,176   
Puerto Rico Electric Power Authority Rev., “KK”, NATL, 5.5%, 7/01/16      20,000        20,655   
Puerto Rico Electric Power Authority Rev., “LL”, NATL, 5.5%, 7/01/17      15,000        15,479   
Puerto Rico Electric Power Authority Rev., “MM”, NATL, 5%, 7/01/20      5,000        5,115   
Puerto Rico Electric Power Authority Rev., “PP”, NATL, 5%, 7/01/24      10,000        9,999   
Puerto Rico Electric Power Authority Rev., “SS”, ASSD GTY, 4.375%, 7/01/30      30,000        27,473   
Puerto Rico Electric Power Authority Rev., “UU”, NATL, 4.5%, 7/01/18      20,000        20,149   
Puerto Rico Electric Power Authority Rev., “UU”, ASSD GTY, 4.25%, 7/01/27      185,000        173,199   
Richmond, VA, Public Utility Rev., “A”, 5%, 1/15/27      2,555,000        3,039,888   
Richmond, VA, Public Utility Rev., “A”, 5%, 1/15/38      2,000,000        2,311,980   
             $ 9,025,394   
 

 

54

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
Utilities - Other - 1.3%                 
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/19    $ 945,000      $ 1,073,766   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/21      555,000        643,173   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/22      290,000        337,914   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/24      215,000        253,457   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/26      1,140,000        1,355,984   
             $ 3,664,294   
Water & Sewer Utility Revenue - 19.2%           
Fairfax County, VA, Water Authority Rev., 5%, 4/01/28    $ 1,000,000      $ 1,180,560   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.25%, 7/01/20      60,000        69,058   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.25%, 7/01/21      175,000        203,950   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.625%, 7/01/40      620,000        691,777   
Hampton Roads, VA, Sanitation District Wastewater Rev., 5%, 4/01/33      1,255,000        1,384,466   
Hampton Roads, VA, Sanitation District Wastewater Rev., 5%, 4/01/33 (Prerefunded 4/01/18)      745,000        835,331   
Hampton Roads, VA, Sanitation District Wastewater Rev., 5%, 4/01/38      3,750,000        4,136,850   
James City, VA, Water & Sewer Rev., 5%, 1/15/40      1,290,000        1,411,170   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “C-7”, NATL, 5%, 7/01/32      80,000        88,608   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/35      50,000        55,505   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/37      110,000        121,927   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-6”, NATL, 5%, 7/01/36      100,000        109,771   
Norfolk, VA, Water Rev., 5%, 11/01/28      1,000,000        1,162,040   
Norfolk, VA, Water Rev., 4.75%, 11/01/38      4,000,000        4,419,600   
Upper Occoquan, VA, Sewage Authority Regional Sewage Rev., 5%, 7/01/41      2,000,000        2,194,460   
Virginia Beach, VA, Water & Sewer System Rev., 5%, 10/01/22      1,310,000        1,609,322   
Virginia Resource Authority Infrastructure Rev. (Virginia Pooled Financing Program), “A”, 5%, 11/01/25      3,850,000        4,707,395   
Virginia Resources Authority, Clean Water Rev., 4.75%, 10/01/27 (Prerefunded 10/01/17)      3,000,000        3,293,880   
Virginia Resources Authority, Clean Water Rev., 5%, 10/01/31      1,000,000        1,151,160   
Virginia Resources Authority, Infrastructure Rev., 5.25%, 11/01/33      2,180,000        2,452,064   
              
Issuer    Shares/Par     Value ($)  
Water & Sewer Utility Revenue - continued           
Virginia Resources Authority, Infrastructure Rev., 5%, 11/01/38    $ 2,035,000      $ 2,277,369   
Virginia Resources Authority, Infrastructure Rev. (Virginia Pooled Funding Program), “B”, 5%, 11/01/40      1,400,000        1,608,824   
Virginia Resources Authority, Infrastructure Rev., Pooled Financing Program, 5%, 11/01/38 (Prerefunded 11/01/18)      565,000        644,484   
Virginia Resources Authority, Infrastructure Rev., Pooled Financing Program, 5%, 11/01/25 (Prerefunded 11/01/21)      40,000        48,483   
Virginia Resources Authority, Infrastructure Rev., Pooled Financing Program, 5.25%, 11/01/33 (Prerefunded 11/01/18)      715,000        821,864   
Virginia Resources Authority, Infrastructure Rev., Pooled Financing Program, 5.25%, 11/01/33 (Prerefunded 11/01/18)      105,000        120,573   
Virginia Resources Authority, Infrastructure Rev., Pooled Financing Program, “B”, 5%, 11/01/25 (u)      1,245,000        1,495,357   
Virginia Resources Authority, Infrastructure Rev., Pooled Financing Program, “B”, 5%, 11/01/27 (u)      5,755,000        6,860,996   
Virginia Resources Authority, Infrastructure Rev., Pooled Financing Program, “B”, 5%, 11/01/28 (u)      3,000,000        3,552,089   
Virginia Resources Authority, Infrastructure Rev., Unrefunded Balance, 5%, 11/01/25      1,555,000        1,846,298   
Virginia Resources Authority, Water & Sewer Systems Rev. (Turkahoe Creek Project), Capital Appreciation, 0%, 11/01/33      2,245,000        1,151,820   
Virginia Resources Authority, Water & Sewer Systems Rev. (Turkahoe Creek Project), Capital Appreciation, 0%, 11/01/34      2,250,000        1,099,845   
Virginia Resources Authority, Water & Sewer Systems Rev. (Turkahoe Creek Project), Capital Appreciation, 0%, 11/01/35      1,950,000        910,397   
Virginia Resources Authority, Water & Sewer Systems Rev. (Turkahoe Creek Project), Capital Appreciation, 0%, 11/01/36      1,250,000        557,563   
             $ 54,274,856   
Total Municipal Bonds
(Identified Cost, $263,474,101)		            $ 282,246,145   
Money Market Funds - 1.0%                 
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      2,885,858      $ 2,885,858   
Total Investments
(Identified Cost, $266,359,959)		            $ 285,132,003   
Other Assets, Less Liabilities - (1.0)%        (2,897,922)   
Net Assets - 100.0%            $ 282,234,081   

See Portfolio Footnotes and Notes to Financial Statements

 

 

55

Table of Contents

PORTFOLIO OF INVESTMENTS

3/31/15

MFS WEST VIRGINIA MUNICIPAL BOND FUND

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Municipal Bonds - 98.7%             
    
Issuer    Shares/Par     Value ($)  
    
Airport Revenue - 0.5%           
Dallas and Fort Worth, TX, International Airport Rev., “B”, 5%, 11/01/44    $ 155,000      $ 173,203   
Dallas and Fort Worth, TX, International Airport Rev., “C”, 5%, 11/01/45      110,000        122,427   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, 5%, 12/01/44      60,000        66,700   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, BAM, 5%, 12/01/39      70,000        80,089   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/39      55,000        60,999   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/44      85,000        94,053   
             $ 597,471   
General Obligations - General Purpose - 3.9%           
Guam Government, “A”, 6.75%, 11/15/29    $ 35,000      $ 40,136   
Guam Government, “A”, 5.25%, 11/15/37      250,000        255,445   
Guam Government, “A”, 7%, 11/15/39      45,000        53,139   
State of West Virginia, 4%, 6/01/22      2,000,000        2,229,120   
State of West Virginia, 4%, 6/01/23      2,000,000        2,215,700   
             $ 4,793,540   
General Obligations - Schools - 8.3%           
Hancock County, WV, Board of Education, 5%, 5/01/19    $ 1,130,000      $ 1,295,263   
Hancock County, WV, Board of Education, 4.5%, 5/01/32      1,405,000        1,522,177   
Monongalia County, WV, Board of Education, 5%, 5/01/29      1,000,000        1,157,830   
Monongalia County, WV, Board of Education, 5%, 5/01/31      2,000,000        2,296,120   
Putnam County, WV, Board of Education, 4%, 5/01/20      2,500,000        2,817,000   
Putnam County, WV, Board of Education, 4%, 5/01/25      1,000,000        1,086,630   
             $ 10,175,020   
Healthcare Revenue - Hospitals - 15.9%           
Escambia County, FL, Health Facilities Authority (Baptist Hospital, Inc.), “A”, 6%, 8/15/36    $ 725,000      $ 835,642   
Illinois Finance Authority Rev. (Provena Health), “A”, 6%, 5/01/28      450,000        524,970   
Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 8/15/44 (Prerefunded 8/15/19)      420,000        523,051   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 5.75%, 6/01/25      340,000        386,713   
              
Issuer    Shares/Par     Value ($)  
    
Healthcare Revenue - Hospitals - continued           
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 6/01/40    $ 410,000      $ 474,354   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.5%, 3/01/45      290,000        336,873   
Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 10/01/36      725,000        754,283   
Massachusetts Health & Educational Facilities Authority Rev. (Caregroup, Inc.), 5.125%, 7/01/38      675,000        726,449   
Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 11/15/39      855,000        971,955   
Monongalia County, WV, Building Commission Hospital Rev. (Monongalia General Hospital), 6.5%, 7/01/41      1,100,000        1,318,559   
Princeton, WV, Hospital Rev. (Princeton Community Hospital), “A”, 5%, 5/01/27      750,000        839,318   
West Virginia Hospital Finance Authority, Hospital Rev. (Camden Clark Memorial Hospital), ASSD GTY, 5.875%, 2/15/34      1,000,000        1,136,860   
West Virginia Hospital Finance Authority, Hospital Rev. (Charleston Area Medical Center), “A”, 5%, 9/01/28      1,000,000        1,147,080   
West Virginia Hospital Finance Authority, Hospital Rev. (Charleston Area Medical Center), “A”, ETM, 6.5%, 9/01/23      2,000,000        2,461,620   
West Virginia Hospital Finance Authority, Hospital Rev. (Thomas Health System), 6.5%, 10/01/38      500,000        525,445   
West Virginia Hospital Finance Authority, Hospital Rev. (United Hospital Center, Inc.), “A”, AMBAC, 5%, 6/01/22      2,500,000        2,611,675   
West Virginia Hospital Finance Authority, Hospital Rev. (Valley Health System Obligation Group), 5%, 1/01/44      1,000,000        1,117,760   
West Virginia Hospital Finance Authority, Hospital Rev. (West Virginia United Health System), “A”, 5.5%, 6/01/44      1,460,000        1,685,964   
West Virginia Hospital Finance Authority, Hospital Rev. (West Virginia United Health System), “E”, 5.625%, 6/01/35      1,000,000        1,123,740   
             $ 19,502,311   
Miscellaneous Revenue - Other - 9.8%                 
Florida Citizens Property Insurance Corp., “A-1”, 5%, 6/01/20    $ 605,000      $ 704,238   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/40      140,000        150,870   
 

 

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Miscellaneous Revenue - Other - continued   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/44    $ 215,000      $ 230,749   
New York Liberty Development Corp., Liberty Rev. (7 World Trade Center Project), 5%, 9/15/40      1,085,000        1,244,495   
West Virginia Building Commission, Lease Rev. (WV Regional Jail), “A”, AMBAC, 5.375%, 7/01/18      6,595,000        7,232,802   
West Virginia, Higher Education Policy Commission Rev. (Community & Technology-Capital Improvement), “A”, 5%, 7/01/39      2,200,000        2,481,468   
             $ 12,044,622   
Sales & Excise Tax Revenue - 2.4%                 
Guam Government Business Privilege Tax Rev., “A”, 5.25%, 1/01/36    $ 335,000      $ 375,083   
Guam Government Business Privilege Tax Rev., “A”, 5.125%, 1/01/42      790,000        874,546   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/16      110,000        117,302   
Guam Government Business Privilege Tax Rev., “C”, 5%, 11/15/17      125,000        136,868   
Massachusetts Bay Transportation Authority, Sales Tax Rev., “A”, 5%, 7/01/31      1,000,000        1,266,060   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 8/01/57      280,000        196,042   
             $ 2,965,901   
Single Family Housing - Local - 1.1%                 
West Virginia Housing Development Fund, “C”, 4.7%, 11/01/35    $ 635,000      $ 689,312   
West Virginia Housing Development Fund, “C”, 4.9%, 11/01/43      585,000        631,034   
             $ 1,320,346   
Single Family Housing - State - 1.3%                 
West Virginia Housing Development Fund Rev., “A”, 1.7%, 11/01/18    $ 1,310,000      $ 1,317,035   
West Virginia Housing Development Fund Rev., “A”, 2.95%, 11/01/21      300,000        316,209   
             $ 1,633,244   
State & Local Agencies - 9.6%                 
FYI Properties Lease Rev. (Washington State Project), 5.5%, 6/01/34    $ 545,000      $ 624,663   
West Virginia Building Commission, Lease Rev., “B”, AMBAC, 5.375%, 7/01/18      1,545,000        1,694,417   
West Virginia Economic Development Authority, Auto Lease Rev., 5.2%, 5/01/33      1,000,000        1,003,820   
West Virginia Economic Development Authority, Lease Rev. (Correctional Juvenile Public Safety Facilities), 5%, 6/01/22      1,000,000        1,175,230   
West Virginia Economic Development Authority, Lease Rev. (Correctional Juvenile Public Safety Facilities), “A”, 5%, 6/01/29      2,000,000        2,295,040   
              
Issuer    Shares/Par     Value ($)  
    
State & Local Agencies - continued                 
West Virginia Economic Development Authority, Lease Rev. (State Office Building), “B”, NATL, 5.25%, 1/01/25    $ 645,000      $ 647,696   
West Virginia Economic Development Authority, Lease Rev. (State Office Building), “B”, NATL, 5.25%, 1/01/30      1,355,000        1,360,352   
West Virginia Hospital Finance Authority, Hospital Rev. (Veterans Nursing Home), 5.5%, 3/01/34      795,000        795,875   
West Virginia School Building Authority Rev., “A”, FGIC, 5%, 7/01/20      2,000,000        2,189,420   
             $ 11,786,513   
Tax - Other - 8.3%                 
Guam Government Ltd. Obligation Rev., “A”, 5.375%, 12/01/24    $ 160,000      $ 178,542   
Guam Government Ltd. Obligation Rev., “A”, 5.625%, 12/01/29      55,000        61,013   
Virgin Islands Public Finance Authority Rev. (Diageo), “A”, 6.625%, 10/01/29      360,000        410,324   
Virgin Islands Public Finance Authority Rev., “A”, 5%, 10/01/24      415,000        486,911   
Virgin Islands Public Finance Authority Rev., “A”, 5%, 10/01/29      415,000        468,162   
Virgin Islands Public Finance Authority Rev., “A”, 5%, 10/01/34      420,000        465,885   
Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 10/01/29      110,000        118,908   
Virgin Islands Public Finance Authority Rev., “A-1”, 5%, 10/01/39      120,000        128,830   
Virgin Islands Public Finance Authority Rev., “B”, AGM, 5%, 10/01/25      280,000        318,954   
Virgin Islands Public Finance Authority Rev., “B”, 5%, 10/01/25      110,000        121,439   
Virgin Islands Public Finance Authority Rev., Matching Fund Loan Note, “A”, AGM, 5%, 10/01/25      275,000        315,912   
West Virginia Economic Development Authority, Lottery Rev., “A”, 5%, 6/15/40      2,475,000        2,823,876   
West Virginia Housing Development Fund, “A”, 3.8%, 11/01/24      1,200,000        1,275,216   
West Virginia School Building Authority, Excess Lottery Rev., 5%, 7/01/26      1,000,000        1,112,830   
West Virginia School Building Authority, Excess Lottery Rev., 5%, 7/01/28      750,000        832,095   
West Virginia School Building Authority, Excess Lottery Rev., “B”, 5%, 7/01/30      1,000,000        1,157,700   
             $ 10,276,597   
Tax Assessment - 0.6%                 
Morgantown, WV, Tax Increment Rev., Parking Garage Project, “A”, 5%, 6/01/33    $ 455,000      $ 455,441   
Ohio County, WV, Commission Tax Increment Rev. (Fort Henry Centre), “A”, 5.85%, 6/01/34      300,000        309,879   
             $ 765,320   
 

 

57

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Tobacco - 0.7%                 
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28    $ 620,000      $ 738,556   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.75%, 6/01/34      190,000        145,213   
             $ 883,769   
Toll Roads - 0.3%                 
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 7%, 12/31/38    $ 155,000      $ 193,415   
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 6.75%, 6/30/43      120,000        146,842   
             $ 340,257   
Transportation - Special Tax - 0.5%                 
Commonwealth of Puerto Rico Highway & Transportation Authority Rev., “AA-1”, AGM, 4.95%, 7/01/26    $ 560,000      $ 576,828   
Universities - Colleges - 19.4%   
Concord University, WV, Board of Governors Rev., AGM, 5%, 6/01/21    $ 380,000      $ 438,512   
Concord University, WV, Board of Governors Rev., AGM, 5%, 6/01/22      400,000        464,784   
Concord University, WV, Board of Governors Rev., AGM, 5%, 6/01/23      420,000        483,021   
Concord University, WV, Board of Governors Rev., AGM, 5%, 6/01/24      440,000        501,477   
Concord University, WV, Board of Governors Rev., AGM, 5%, 6/01/19      355,000        399,659   
Fairmont State University, WV, Board of Governors Rev., “A”, 5%, 6/01/24      765,000        920,846   
Fairmont State University, WV, Board of Governors Rev., “A”, 5%, 6/01/25      805,000        973,148   
Fairmont State University, WV, Board of Governors Rev., “A”, 5%, 6/01/26      840,000        1,003,733   
Fairmont State University, WV, Board of Governors Rev., “A”, 5%, 6/01/32      4,035,000        4,478,890   
Marshall University, WV, University Rev., 5%, 5/01/30      2,000,000        2,277,220   
Marshall University, WV, University Rev., 5%, 5/01/41      1,000,000        1,117,510   
New York Dormitory Authority Rev. (New York University), “1”, AMBAC, 5.5%, 7/01/40      555,000        744,627   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Educational Facilities Rev. (University Plaza), “A”, NATL, 5%, 7/01/21      1,270,000        1,272,184   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (International American University of Puerto Rico Project), 5%, 10/01/31      110,000        110,628   
              
Issuer    Shares/Par     Value ($)  
    
Universities - Colleges - continued   
Shepherd University Board of Governors, WV Rev. (Residence Facilities Projects), NATL, 5%, 6/01/35    $ 1,675,000      $ 1,686,792   
West Virginia University Rev. (West Virginia University Project), “A”, 5%, 10/01/35      1,000,000        1,144,990   
West Virginia University, University Systems Rev., “A”, NATL, 5.5%, 4/01/20      1,700,000        2,030,021   
West Virginia University, University Systems Rev., “A”, NATL, 5.25%, 4/01/28      3,035,000        3,762,763   
             $ 23,810,805   
Utilities - Investor Owned - 2.2%                 
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.625%, 7/01/20    $ 470,000      $ 556,043   
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.5%, 8/01/29 (Put Date 8/01/16)      340,000        358,714   
Pleasants County, WV, Pollution Control Rev. (Allegheny Community), “F”, 5.25%, 10/15/37      300,000        317,964   
West Virginia Economic Development Authority, Solid Waste Disposal Facilities Rev. (Appalachian Power Company- Amos Project), “A”, FRN, 1.9%, 3/01/40 (Put Date 4/01/19)      1,500,000        1,491,120   
             $ 2,723,841   
Utilities - Municipal Owned - 1.3%                 
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/33    $ 435,000      $ 508,019   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/24      605,000        723,265   
Guam Power Authority Rev., “A”, 5.5%, 10/01/30      325,000        368,735   
             $ 1,600,019   
Utilities - Other - 1.8%                 
California M-S-R Energy Authority Gas Rev., “A”, 6.5%, 11/01/39    $ 615,000      $ 848,171   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/19      480,000        545,405   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/21      245,000        283,923   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/22      125,000        145,653   
Tennessee Energy Acquisition Corp., Gas Rev., “C”, 5%, 2/01/21      290,000        328,274   
Texas Gas Acquisition & Supply Corp III., Gas Supply Rev., 5%, 12/15/31      70,000        77,383   
             $ 2,228,809   
Water & Sewer Utility Revenue - 10.8%   
Berkeley County, WV, Public Service Sewer District, “A”, 5%, 3/01/47    $ 1,000,000      $ 1,057,640   
Berkeley County, WV, Public Service Sewer District, “C”, BAM, 4.5%, 10/01/32      1,500,000        1,661,775   
Fairmont, WV, Waterworks Rev., AMBAC, 5.25%, 7/01/22      200,000        228,070   
 

 

58

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Portfolio of Investments – continued

 

Municipal Bonds - continued             
    
Issuer    Shares/Par     Value ($)  
    
Water & Sewer Utility Revenue - continued   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.625%, 7/01/40    $ 515,000      $ 574,622   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/29      20,000        22,656   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/35      20,000        22,402   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “C-7”, NATL, 5%, 7/01/32      35,000        38,766   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/35      20,000        22,202   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/37      50,000        55,422   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-6”, NATL, 5%, 7/01/36      40,000        43,908   
Mississippi Development Bank Special Obligation (City of Jackson Water and Sewer System Rev. Bond Project), AGM, 6.875%, 12/01/40      75,000        98,354   
New York, NY, Municipal Water Finance Authority, Water & Sewer Systems Rev., “AA”, 5%, 6/15/44      625,000        716,744   
              
Issuer    Shares/Par     Value ($)  
    
Water & Sewer Utility Revenue - continued   
West Virginia Water Development Authority Rev. (Loan Program IV), “A”, AGM, 5%, 11/01/44    $ 2,000,000      $ 2,050,140   
West Virginia Water Development Authority Rev. (Loan Program IV), “B”, AMBAC, 5.125%, 11/01/24      2,140,000        2,200,134   
Wheeling, WV, Combined Waterworks and Sewerage System Rev., 5%, 6/01/38      3,000,000        3,399,090   
Wheeling, WV, Combined Waterworks and Sewerage System Rev., 5%, 6/01/43      1,000,000        1,129,950   
             $ 13,321,875   

Total Municipal Bonds

(Identified Cost, $113,166,561)

  

  

   $ 121,347,088   
Money Market Funds - 3.0%                 
MFS Institutional Money Market Portfolio, 0.1%, at Cost and Net Asset Value (v)      3,623,362      $ 3,623,362   

Total Investments

(Identified Cost, $116,789,923)

  

  

   $ 124,970,450   
Other Assets, Less Liabilities - (1.7)%        (2,082,063)   
Net Assets - 100.0%      $ 122,888,387   
 

Portfolio Footnotes:

 

(a) Non-income producing security.
(d) In default.
(n) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities for the MFS New York Municipal Bond Fund was $741,863, representing 0.4% of net assets.
(q) Interest received was less than stated coupon rate.
(u) Underlying security deposited into special purpose trust (“the trust”) by investment banker upon creation of self-deposited inverse floaters.
(v) Underlying affiliated fund that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

The following abbreviations are used in this report and are defined:

 

COP   Certificate of Participation
ETM   Escrowed to Maturity
FRN   Floating Rate Note. Interest rate resets periodically and the current rate may not be the rate reported at period end.
LOC   Letter of Credit
Insurers     
AGM   Assured Guaranty Municipal    
AMBAC   AMBAC Indemnity Corp.    
ASSD GTY   Assured Guaranty Insurance Co.    
BAM   Build America Mutual    
CIFG   CDC IXIS Financial Guaranty    
FGIC   Financial Guaranty Insurance Co.    
FHA   Federal Housing Administration    
FNMA   Federal National Mortgage Assn.    
GNMA   Government National Mortgage Assn.    
NATL   National Public Finance Guarantee Corp.    
SYNCORA   Syncora Guarantee Inc.    

See Notes to Financial Statements

 

59

Table of Contents

Financial Statements

STATEMENTS OF ASSETS AND LIABILITIES

At 3/31/15

These statements represent each fund’s balance sheet, which details the assets and liabilities comprising the total value of each fund.

 

  Mississippi
Fund		   New York
Fund		   North Carolina
Fund		   Pennsylvania
Fund		  
Assets                        
Investments

Non-affiliated issuers, at identified cost

   $79,678,302      $167,403,638      $308,122,253      $103,286,395   

Underlying affiliated funds, at cost and net asset value

   392,651      11,356,169      7,496,659      1,736,542   
Total investments, at identified cost   $80,070,953      $178,759,807      $315,618,912      $105,022,937   

Unrealized appreciation (depreciation)

   6,946,367      16,088,153      27,155,512      9,339,311   
Total investments, at value   $87,017,320      $194,847,960      $342,774,424      $114,362,248   

Receivables for

Investments sold

   626,655      1,630,000      —      920,000   

Fund shares sold

   5,228      207,671      288,200      24,595   

Interest

   1,069,041      2,526,153      4,687,120      1,676,945   

Receivable from distributor

   30      —      —      —   

Other assets

   637      1,146      1,826      797   

Total assets

   $88,718,911      $199,212,930      $347,751,570      $116,984,585   
Liabilities                        
Payables for

Distributions

   $31,975      $76,055      $132,292      $41,101   

Investments purchased

   907,052      3,679,067      4,906,980      —   

Fund shares reacquired

   98,591      201,833      400,837      233,353   

Payable to affiliates

Investment adviser

   1,768      3,874      6,752      2,337   

Shareholder servicing costs

   28,694      54,244      129,127      41,379   

Distribution and service fees

   —      3,198      5,630      2,471   

Payable for independent Trustees’ compensation

   2,796      3,667      6,088      2,774   

Accrued expenses and other liabilities

   65,627      73,485      83,891      71,378   

Total liabilities

   $1,136,503      $4,095,423      $5,671,597      $394,793   

Net assets

   $87,582,408      $195,117,507      $342,079,973      $116,589,792   
Net assets consist of                        
Paid-in capital   $82,769,409      $184,726,761      $324,544,874      $112,127,400   

Unrealized appreciation (depreciation) on investments

   6,946,367      16,088,153      27,155,512      9,339,311   

Accumulated net realized gain (loss) on investments

   (2,180,630 )    (5,768,218 )    (9,819,115 )    (4,959,553 ) 

Undistributed net investment income

   47,262      70,811      198,702      82,634   

Net assets

   $87,582,408      $195,117,507      $342,079,973      $116,589,792   

 

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Statements of Assets and Liabilities – continued

 

  Mississippi
Fund		   New York
Fund		   North Carolina
Fund		   Pennsylvania
Fund		  

Net assets

Class A

   $85,927,360      $164,566,257      $281,268,401      $110,377,961   

Class B

   1,655,048      5,459,344      4,737,917      6,211,831   

Class C

   —      25,091,906      56,073,655      —   

Total net assets

   $87,582,408      $195,117,507      $342,079,973      $116,589,792   

Shares of beneficial interest outstanding

Class A

   8,584,884      14,633,740      23,445,110      10,567,832   

Class B

   165,160      486,743      395,406      593,263   

Class C

   —      2,233,988      4,676,843      —   

Total shares of beneficial interest outstanding

   8,750,044      17,354,471      28,517,359      11,161,095   

Class A shares

Net asset value per share

(net assets / shares of beneficial interest outstanding)

   $10.01      $11.25      $12.00      $10.44   

Offering price per share (100 / 95.75 × net asset value per share)

   $10.45      $11.75      $12.53      $10.90   

Class B shares

Net asset value and offering price per share

(net assets / shares of beneficial interest outstanding)

   $10.02      $11.22      $11.98      $10.47   

Class C shares

Net asset value and offering price per share

(net assets / shares of beneficial interest outstanding)

   $—      $11.23      $11.99      $—   

On sales of $100,000 or more, the maximum offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.

See Notes to Financial Statements

 

61

Table of Contents

Statements of Assets and Liabilities – continued

 

At 3/31/15 South Carolina
Fund		   Tennessee
Fund		  

Virginia

Fund

   West Virginia
Fund		  
Assets                        
Investments

Non-affiliated issuers, at identified cost

   $155,449,235      $90,713,024      $263,474,101      $113,166,561   

Underlying affiliated funds, at cost and net asset value

   8,648,818      3,310,314      2,885,858      3,623,362   
Total investments, at identified cost   $164,098,053      $94,023,338      $266,359,959      $116,789,923   

Unrealized appreciation (depreciation)

   12,111,902      7,404,473      18,772,044      8,180,527   
Total investments, at value   $176,209,955      $101,427,811      $285,132,003      $124,970,450   

Receivables for

Investments sold

   149,085      2,675,239      —      776,235   

Fund shares sold

   409,691      59,858      148,973      104,538   

Interest

   2,270,651      1,403,159      3,856,803      1,700,062   

Receivable from investment adviser

   —      —      —      2,210   

Other assets

   1,068      765      1,623      821   

Total assets

   $179,040,450      $105,566,832      $289,139,402      $127,554,316   
Liabilities                        
Payables for

Distributions

   $37,583      $30,251      $108,473      $21,416   

Investments purchased

   3,148,888      874,215      1,063,340      4,406,023   

Interest expense and fees

   —      —      15,064      —   

Fund shares reacquired

   189,493      173,026      512,426      115,012   

Payable to the holders of the floating rate certificates from trust assets

   —      —      5,004,831      —   

Payable to affiliates

Investment adviser

   3,494      2,098      5,577      —   

Shareholder servicing costs

   58,039      41,743      104,702      49,232   

Distribution and service fees

   1,965      1,309      4,358      1,399   

Payable for independent Trustees’ compensation

   6,092      3,653      6,088      6,079   

Accrued expenses and other liabilities

   72,256      65,341      80,462      66,768   

Total liabilities

   $3,517,810      $1,191,636      $6,905,321      $4,665,929   

Net assets

   $175,522,640      $104,375,196      $282,234,081      $122,888,387   
Net assets consist of                        
Paid-in capital   $170,682,075      $99,824,894      $271,433,729      $119,236,493   

Unrealized appreciation (depreciation) on investments

   12,111,902      7,404,473      18,772,044      8,180,527   

Accumulated net realized gain (loss) on investments

   (7,287,522 )    (3,334,321 )    (7,893,631 )    (4,516,169 ) 

Accumulated undistributed (distributions in excess of) net investment income

   16,185      480,150      (78,061 )    (12,464 ) 

Net assets

   $175,522,640      $104,375,196      $282,234,081      $122,888,387   

 

62

Table of Contents

Statements of Assets and Liabilities – continued

 

  South Carolina
Fund		   Tennessee
Fund		  

Virginia

Fund

   West Virginia
Fund		  

Net assets

Class A

   $170,887,412      $102,473,202      $255,204,790      $121,679,638   

Class B

   4,635,228      1,901,994      1,920,953      1,208,749   

Class C

   —      —      25,108,338      —   

Total net assets

   $175,522,640      $104,375,196      $282,234,081      $122,888,387   

Shares of beneficial interest outstanding

Class A

   13,905,235      9,607,187      22,304,248      10,714,217   

Class B

   377,372      178,469      167,985      106,475   

Class C

   —      —      2,194,916      —   

Total shares of beneficial interest outstanding

   14,282,607      9,785,656      24,667,149      10,820,692   

Class A shares

Net asset value per share

(net assets / shares of beneficial interest outstanding)

   $12.29      $10.67      $11.44      $11.36   

Offering price per share (100 / 95.75 × net asset value per share)

   $12.84      $11.14      $11.95      $11.86   

Class B shares

Net asset value and offering price per share

(net assets / shares of beneficial interest outstanding)

   $12.28      $10.66      $11.44      $11.35   

Class C shares

Net asset value and offering price per share

(net assets / shares of beneficial interest outstanding)

   $—      $—      $11.44      $—   

On sales of $100,000 or more, the maximum offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.

See Notes to Financial Statements

 

63

Table of Contents

Financial Statements

STATEMENTS OF OPERATIONS

Year ended 3/31/15

These statements describe how much each fund earned in investment income and accrued in expenses. They also describe any gains or losses generated by each fund’s operations.

 

  Mississippi
Fund		   New York
Fund		   North Carolina
Fund		   Pennsylvania
Fund		  
Net investment income                        
Interest   $3,831,558      $8,376,134      $14,902,302      $4,958,095   

Dividends from underlying affiliated funds

   926      2,836      3,299      2,020   

Total investment income

   $3,832,484      $8,378,970      $14,905,601      $4,960,115   
Expenses

Management fee

   $394,920      $860,616      $1,540,213      $529,617   

Distribution and service fees

   233,029      705,710      1,313,362      343,799   

Shareholder servicing costs

   63,181      127,743      276,216      100,964   

Administrative services fee

   23,023      38,198      60,253      27,386   

Independent Trustees’ compensation

   2,926      4,830      9,962      4,681   

Custodian fee

   24,509      37,899      51,209      32,348   

Shareholder communications

   8,287      12,750      19,575      12,336   

Audit and tax fees

   50,898      50,943      51,024      50,914   

Legal fees

   9,901      12,911      10,196      12,230   

Miscellaneous

   49,290      64,434      69,571      53,255   

Total expenses

   $859,964      $1,916,034      $3,401,581      $1,167,530   

Fees paid indirectly

   (1 )    (4 )    (7 )    (5 ) 

Reduction of expenses by investment adviser and distributor

   (141,933 )    (16,860 )    (28,696 )    (182,847 ) 

Net expenses

   $718,030      $1,899,170      $3,372,878      $984,678   

Net investment income

   $3,114,454      $6,479,800      $11,532,723      $3,975,437   
Realized and unrealized gain (loss) on investments                        

Realized gain (loss) on investments (identified cost basis)

   $(127,761 )    $583,370      $302,393      $(198,091 ) 

Change in unrealized appreciation (depreciation) on investments

   $3,122,975      $8,219,620      $11,297,297      $5,382,978   

Net realized and unrealized gain (loss) on investments

   $2,995,214      $8,802,990      $11,599,690      $5,184,887   

Change in net assets from operations

   $6,109,668      $15,282,790      $23,132,413      $9,160,324   

See Notes to Financial Statements

 

64

Table of Contents

Statements of Operations – continued

 

Year ended 3/31/15 South Carolina
Fund		   Tennessee
Fund		  

Virginia

Fund

   West Virginia
Fund		  
Net investment income                        
Interest   $6,676,270      $4,328,348      $12,557,428      $5,172,888   

Dividends from underlying affiliated funds

   2,892      1,423      2,759      1,501   

Total investment income

   $6,679,162      $4,329,771      $12,560,187      $5,174,389   
Expenses

Management fee

   $779,359      $479,984      $1,297,660      $549,335   

Distribution and service fees

   469,335      281,262      924,723      314,466   

Shareholder servicing costs

   136,872      88,514      235,196      101,143   

Administrative services fee

   35,534      25,770      52,348      28,053   

Independent Trustees’ compensation

   5,265      4,617      9,799      5,115   

Custodian fee

   33,761      24,403      49,003      26,098   

Shareholder communications

   12,457      8,494      17,661      9,081   

Audit and tax fees

   50,939      50,907      50,994      50,916   

Legal fees

   15,132      10,173      9,719      10,349   

Interest expense and fees

   —      —      33,635      —   

Miscellaneous

   52,397      46,978      71,039      48,554   

Total expenses

   $1,591,051      $1,021,102      $2,751,777      $1,143,110   

Fees paid indirectly

   (2 )    (1 )    (4 )    (9 ) 

Reduction of expenses by investment adviser and distributor

   (13,538 )    (7,226 )    (20,183 )    (36,626 ) 

Net expenses

   $1,577,511      $1,013,875      $2,731,590      $1,106,475   

Net investment income

   $5,101,651      $3,315,896      $9,828,597      $4,067,914   
Realized and unrealized gain (loss) on investments                        

Realized gain (loss) on investments (identified cost basis)

   $(478,656 )    $(407,811 )    $(1,221,577 )    $(803,467 ) 

Change in unrealized appreciation (depreciation) on investments

   $7,845,970      $4,316,728      $10,628,975      $5,138,843   

Net realized and unrealized gain (loss) on investments

   $7,367,314      $3,908,917      $9,407,398      $4,335,376   

Change in net assets from operations

   $12,468,965      $7,224,813      $19,235,995      $8,403,290   

See Notes to Financial Statements

 

65

Table of Contents

Financial Statements

STATEMENTS OF CHANGES IN NET ASSETS

These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.

 

Year ended 3/31/15 Mississippi
Fund		   New York
Fund		   North Carolina
Fund		   Pennsylvania
Fund		  
Change in net assets
From operations                        
Net investment income   $3,114,454      $6,479,800      $11,532,723      $3,975,437   

Net realized gain (loss) on investments

   (127,761 )    583,370      302,393      (198,091 ) 

Net unrealized gain (loss) on investments

   3,122,975      8,219,620      11,297,297      5,382,978   

Change in net assets from operations

   $6,109,668      $15,282,790      $23,132,413      $9,160,324   
Distributions declared to shareholders                        

From net investment income

   $(3,054,047 )    $(6,491,818 )    $(10,957,227 )    $(3,943,495 ) 

Change in net assets from fund share transactions

   $(2,936,635 )    $1,450,895      $(10,207,779 )    $(6,012,688 ) 

Total change in net assets

   $118,986      $10,241,867      $1,967,407      $(795,859 ) 
Net assets                        
At beginning of period   87,463,422      184,875,640      340,112,566      117,385,651   

At end of period

   $87,582,408      $195,117,507      $342,079,973      $116,589,792   

Undistributed net investment income included in net assets at end of period

   $47,262      $70,811      $198,702      $82,634   
Year ended 3/31/15 South Carolina
Fund		  

Tennessee

Fund

  

Virginia

Fund

   West Virginia
Fund		  
Change in net assets
From operations                        
Net investment income   $5,101,651      $3,315,896      $9,828,597      $4,067,914   

Net realized gain (loss) on investments

   (478,656 )    (407,811 )    (1,221,577 )    (803,467 ) 

Net unrealized gain (loss) on investments

   7,845,970      4,316,728      10,628,975      5,138,843   

Change in net assets from operations

   $12,468,965      $7,224,813      $19,235,995      $8,403,290   
Distributions declared to shareholders                        

From net investment income

   $(5,137,897 )    $(3,143,087 )    $(9,256,777 )    $(3,757,344 ) 

Change in net assets from fund share transactions

   $(3,361,574 )    $(5,701,779 )    $(12,814,881 )    $(2,768,596 ) 

Total change in net assets

   $3,969,494      $(1,620,053 )    $(2,835,663 )    $1,877,350   
Net assets                        
At beginning of period   171,553,146      105,995,249      285,069,744      121,011,037   

At end of period

   $175,522,640      $104,375,196      $282,234,081      $122,888,387   

Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period

   $16,185      $480,150      $(78,061 )    $(12,464 ) 

See Notes to Financial Statements

 

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Table of Contents

Statements of Changes in Net Assets – continued

 

Year ended 3/31/14 Mississippi
Fund		   New York
Fund		   North Carolina
Fund		   Pennsylvania
Fund		  
Change in net assets
From operations                        
Net investment income   $3,779,311      $7,655,588      $13,696,441      $5,226,137   

Net realized gain (loss) on investments

   (2,662,160 )    (5,626,805 )    (12,910,869 )    (4,162,626 ) 

Net unrealized gain (loss) on investments

   (3,823,947 )    (10,331,823 )    (17,431,068 )    (6,292,541 ) 

Change in net assets from operations

   $(2,706,796 )    $(8,303,040 )    $(16,645,496 )    $(5,229,030 ) 
Distributions declared to shareholders                        
From net investment income   $(3,710,214 )    $(7,261,983 )    $(12,997,029 )    $(4,898,095 ) 

From net realized gain on investments

   (340,343 )    —      (1,792,728 )    —   

Total distributions declared to shareholders

   $(4,050,557 )    $(7,261,983 )    $(14,789,757 )    $(4,898,095 ) 

Change in net assets from fund share transactions

   $(22,813,757 )    $(31,377,132 )    $(107,397,080 )    $(36,084,012 ) 

Total change in net assets

   $(29,571,110 )    $(46,942,155 )    $(138,832,333 )    $(46,211,137 ) 
Net assets                        
At beginning of period   117,034,532      231,817,795      478,944,899      163,596,788   

At end of period

   $87,463,422      $184,875,640      $340,112,566      $117,385,651   

Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period

   $48,362      $(13,603 )    $104,572      $10,540   
Year ended 3/31/14 South Carolina
Fund		   Tennessee
Fund		  

Virginia

Fund

   West Virginia
Fund		  
Change in net assets
From operations                        
Net investment income   $6,854,278      $3,978,879      $11,314,333      $4,891,072   

Net realized gain (loss) on investments

   (6,334,965 )    (3,421,421 )    (9,042,377 )    (4,033,249 ) 

Net unrealized gain (loss) on investments

   (9,172,515 )    (5,530,730 )    (11,730,364 )    (5,420,014 ) 

Change in net assets from operations

   $(8,653,202 )    $(4,973,272 )    $(9,458,408 )    $(4,562,191 ) 
Distributions declared to shareholders                        

From net investment income

   $(6,574,481 )    $(3,839,305 )    $(11,082,069 )    $(4,610,142 ) 

Change in net assets from fund share transactions

   $(41,009,798 )    $(21,830,116 )    $(69,086,950 )    $(24,739,401 ) 

Total change in net assets

   $(56,237,481 )    $(30,642,693 )    $(89,627,427 )    $(33,911,734 ) 
Net assets                        
At beginning of period   227,790,627      136,637,942      374,697,171      154,922,771   

At end of period

   $171,553,146      $105,995,249      $285,069,744      $121,011,037   

Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period

   $19,270      $482,630      $(73,117 )    $(10,681 ) 

See Notes to Financial Statements

 

67

Table of Contents

Financial Statements

FINANCIAL HIGHLIGHTS

MFS MISSISSIPPI MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $9.67         $10.27         $10.11         $9.37         $9.82   
Income (loss) from investment operations                                             
Net investment income (d)      $0.35         $0.38         $0.39         $0.39         $0.41   

Net realized and unrealized gain (loss) on investments

      0.34         (0.57 )       0.16         0.74         (0.44 ) 

Total from investment operations

      $0.69         $(0.19 )       $0.55         $1.13         $(0.03 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.35 )       $(0.37 )       $(0.38 )       $(0.39 )       $(0.40 ) 

From net realized gain on investments

      —         (0.04 )       (0.01 )       —         (0.02 ) 

Total distributions declared to shareholders

      $(0.35 )       $(0.41 )       $(0.39 )       $(0.39 )       $(0.42 ) 

Net asset value, end of period (x)

      $10.01         $9.67         $10.27         $10.11         $9.37   

Total return (%) (r)(s)(t)(x)

      7.18         (1.82 )       5.43         12.23         (0.36 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      0.96         0.95         0.90         0.92         0.92   

Expenses after expense reductions (f)

      0.80         0.80         0.75         0.77         0.77   

Net investment income

      3.56         3.87         3.80         4.01         4.20   

Portfolio turnover

      16         19         12         14         15   

Net assets at end of period (000 omitted)

      $85,927         $85,405         $114,430         $114,748         $104,478   
     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $9.68         $10.28         $10.12         $9.38         $9.83   
Income (loss) from investment operations                                             
Net investment income (d)      $0.29         $0.31         $0.32         $0.33         $0.34   

Net realized and unrealized gain (loss) on investments

      0.33         (0.57 )       0.15         0.73         (0.44 ) 

Total from investment operations

      $0.62         $(0.26 )       $0.47         $1.06         $(0.10 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.28 )       $(0.30 )       $(0.30 )       $(0.32 )       $(0.33 ) 

From net realized gain on investments

      —         (0.04 )       (0.01 )       —         (0.02 ) 

Total distributions declared to shareholders

      $(0.28 )       $(0.34 )       $(0.31 )       $(0.32 )       $(0.35 ) 

Net asset value, end of period (x)

      $10.02         $9.68         $10.28         $10.12         $9.38   

Total return (%) (r)(s)(t)(x)

      6.47         (2.50 )       4.67         11.47         (1.05 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.71         1.70         1.65         1.67         1.67   

Expenses after expense reductions (f)

      1.47         1.49         1.47         1.44         1.46   

Net investment income

      2.90         3.17         3.06         3.35         3.49   

Portfolio turnover

      16         19         12         14         15   

Net assets at end of period (000 omitted)

      $1,655         $2,059         $2,604         $2,078         $2,647   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

68

Table of Contents

Financial Highlights – continued

 

MFS NEW YORK MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.74         $11.50         $11.22         $10.34         $10.93   
Income (loss) from investment operations                                             
Net investment income (d)      $0.39         $0.43         $0.43         $0.43         $0.47   

Net realized and unrealized gain (loss) on investments

      0.51         (0.79 )       0.26         0.87         (0.60 ) 

Total from investment operations

      $0.90         $(0.36 )       $0.69         $1.30         $(0.13 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.39 )       $(0.40 )       $(0.41 )       $(0.42 )       $(0.46 ) 

Net asset value, end of period (x)

      $11.25         $10.74         $11.50         $11.22         $10.34   

Total return (%) (r)(s)(t)(x)

      8.48         (3.04 )       6.19         12.80         (1.31 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      0.88         0.88         0.86         0.88         0.87   

Expenses after expense reductions (f)

      0.87         0.88         0.86         0.88         0.87   

Net investment income

      3.51         3.94         3.73         3.99         4.30   

Portfolio turnover

      25         25         18         28         27   

Net assets at end of period (000 omitted)

      $164,566         $155,149         $188,291         $183,191         $171,142   
     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.71         $11.47         $11.19         $10.31         $10.90   
Income (loss) from investment operations                                             
Net investment income (d)      $0.31         $0.34         $0.34         $0.35         $0.39   

Net realized and unrealized gain (loss) on investments

      0.51         (0.78 )       0.26         0.87         (0.60 ) 

Total from investment operations

      $0.82         $(0.44 )       $0.60         $1.22         $(0.21 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.31 )       $(0.32 )       $(0.32 )       $(0.34 )       $(0.38 ) 

Net asset value, end of period (x)

      $11.22         $10.71         $11.47         $11.19         $10.31   

Total return (%) (r)(s)(t)(x)

      7.69         (3.77 )       5.41         12.00         (2.04 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.63         1.64         1.61         1.63         1.62   

Expenses after expense reductions (f)

      1.63         1.63         1.61         1.63         1.62   

Net investment income

      2.76         3.20         2.98         3.26         3.56   

Portfolio turnover

      25         25         18         28         27   

Net assets at end of period (000 omitted)

      $5,459         $5,501         $7,019         $6,298         $8,178   

See Notes to Financial Statements

 

69

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Financial Highlights – continued

 

MFS NEW YORK MUNICIPAL BOND FUND – continued

 

     Years ended 3/31  
Class C    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.72         $11.48         $11.21         $10.33         $10.92   
Income (loss) from investment operations                                             
Net investment income (d)      $0.31         $0.35         $0.34         $0.35         $0.38   

Net realized and unrealized gain (loss) on investments

      0.51         (0.79 )       0.25         0.87         (0.59 ) 

Total from investment operations

      $0.82         $(0.44 )       $0.59         $1.22         $(0.21 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.31 )       $(0.32 )       $(0.32 )       $(0.34 )       $(0.38 ) 

Net asset value, end of period (x)

      $11.23         $10.72         $11.48         $11.21         $10.33   

Total return (%) (r)(s)(t)(x)

      7.68         (3.77 )       5.31         11.97         (2.04 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.63         1.64         1.61         1.63         1.62   

Expenses after expense reductions (f)

      1.63         1.63         1.61         1.63         1.62   

Net investment income

      2.76         3.20         2.98         3.24         3.55   

Portfolio turnover

      25         25         18         28         27   

Net assets at end of period (000 omitted)

      $25,092         $24,225         $36,508         $32,962         $28,780   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

70

Table of Contents

Financial Highlights – continued

 

MFS NORTH CAROLINA MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $11.58         $12.38         $12.17         $11.18         $11.71   
Income (loss) from investment operations                                             
Net investment income (d)      $0.42         $0.43         $0.42         $0.45         $0.49   

Net realized and unrealized gain (loss) on investments

      0.40         (0.76 )       0.26         0.97         (0.55 ) 

Total from investment operations

      $0.82         $(0.33 )       $0.68         $1.42         $(0.06 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.40 )       $(0.41 )       $(0.40 )       $(0.43 )       $(0.47 ) 

From net realized gain on investments

      —         (0.06 )       (0.07 )       —         (0.00 )(w) 

Total distributions declared to shareholders

      $(0.40 )       $(0.47 )       $(0.47 )       $(0.43 )       $(0.47 ) 

Net asset value, end of period (x)

      $12.00         $11.58         $12.38         $12.17         $11.18   

Total return (%) (r)(s)(t)(x)

      7.13         (2.66 )       5.59         12.92         (0.55 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      0.86         0.87         0.84         0.85         0.85   

Expenses after expense reductions (f)

      0.85         0.86         0.84         0.85         0.85   

Net investment income

      3.50         3.64         3.35         3.82         4.22   

Portfolio turnover

      16         17         18         24         20   

Net assets at end of period (000 omitted)

      $281,268         $278,717         $384,213         $357,793         $320,834   
Supplemental Ratios (%):                                             

Ratios of expenses to average net assets after expense reductions and excluding interest expense and fees (f)(l)

      N/A         N/A         0.84         0.83         0.84   
     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $11.56         $12.37         $12.16         $11.17         $11.69   
Income (loss) from investment operations                                             
Net investment income (d)      $0.33         $0.34         $0.33         $0.36         $0.40   

Net realized and unrealized gain (loss) on investments

      0.40         (0.77 )       0.26         0.98         (0.53 ) 

Total from investment operations

      $0.73         $(0.43 )       $0.59         $1.34         $(0.13 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.31 )       $(0.32 )       $(0.31 )       $(0.35 )       $(0.39 ) 

From net realized gain on investments

      —         (0.06 )       (0.07 )       —         (0.00 )(w) 

Total distributions declared to shareholders

      $(0.31 )       $(0.38 )       $(0.38 )       $(0.35 )       $(0.39 ) 

Net asset value, end of period (x)

      $11.98         $11.56         $12.37         $12.16         $11.17   

Total return (%) (r)(s)(t)(x)

      6.34         (3.47 )       4.81         12.09         (1.20 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.61         1.62         1.59         1.60         1.60   

Expenses after expense reductions (f)

      1.61         1.62         1.59         1.60         1.60   

Net investment income

      2.76         2.89         2.61         3.08         3.46   

Portfolio turnover

      16         17         18         24         20   

Net assets at end of period (000 omitted)

      $4,738         $5,082         $7,618         $7,793         $8,296   
Supplemental Ratios (%):                                             

Ratios of expenses to average net assets after expense reductions and excluding interest expense and fees (f)(l)

      N/A         N/A         1.59         1.58         1.59   

See Notes to Financial Statements

 

71

Table of Contents

Financial Highlights – continued

 

MFS NORTH CAROLINA MUNICIPAL BOND FUND – continued

 

     Years ended 3/31  
Class C    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $11.57         $12.37         $12.17         $11.17         $11.70   
Income (loss) from investment operations                                             
Net investment income (d)      $0.33         $0.34         $0.32         $0.36         $0.40   

Net realized and unrealized gain (loss) on investments

      0.40         (0.76 )       0.26         0.98         (0.54 ) 

Total from investment operations

      $0.73         $(0.42 )       $0.58         $1.34         $(0.14 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.31 )       $(0.32 )       $(0.31 )       $(0.34 )       $(0.39 ) 

From net realized gain on investments

      —         (0.06 )       (0.07 )       —         (0.00 )(w) 

Total distributions declared to shareholders

      $(0.31 )       $(0.38 )       $(0.38 )       $(0.34 )       $(0.39 ) 

Net asset value, end of period (x)

      $11.99         $11.57         $12.37         $12.17         $11.17   

Total return (%) (r)(s)(t)(x)

      6.33         (3.39 )       4.72         12.18         (1.29 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.61         1.62         1.59         1.60         1.60   

Expenses after expense reductions (f)

      1.60         1.62         1.59         1.60         1.60   

Net investment income

      2.75         2.89         2.60         3.06         3.46   

Portfolio turnover

      16         17         18         24         20   

Net assets at end of period (000 omitted)

      $56,074         $56,314         $87,114         $75,895         $64,530   
Supplemental Ratios (%):                                             

Ratios of expenses to average net assets after expense reductions and excluding interest expense and fees (f)(l)

      N/A         N/A         1.59         1.58         1.59   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(l) Interest expense and fees relate to payments made to the holders of the floating rate certificates from trust assets.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount was less than $0.01.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

72

Table of Contents

Financial Highlights – continued

 

MFS PENNSYLVANIA MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $9.99         $10.63         $10.36         $9.53         $10.04   
Income (loss) from investment operations                                             
Net investment income (d)      $0.35         $0.39         $0.40         $0.42         $0.43   

Net realized and unrealized gain (loss) on investments

      0.45         (0.66 )       0.25         0.82         (0.52 ) 

Total from investment operations

      $0.80         $(0.27 )       $0.65         $1.24         $(0.09 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.35 )       $(0.37 )       $(0.38 )       $(0.41 )       $(0.42 ) 

Net asset value, end of period (x)

      $10.44         $9.99         $10.63         $10.36         $9.53   

Total return (%) (r)(s)(t)(x)

      8.10         (2.52 )       6.35         13.27         (0.97 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      0.95         0.93         0.89         0.93         0.93   

Expenses after expense reductions (f)

      0.79         0.78         0.74         0.78         0.78   

Net investment income

      3.42         3.90         3.77         4.20         4.34   

Portfolio turnover

      23         21         15         21         21   

Net assets at end of period (000 omitted)

      $110,378         $110,449         $152,804         $133,328         $118,709   
Supplemental Ratios (%):                                             

Ratios of expenses to average net assets after expense reductions and excluding interest expense and fees (f)(l)

      N/A         N/A         0.74         0.78         0.78   

See Notes to Financial Statements

 

73

Table of Contents

Financial Highlights – continued

 

MFS PENNSYLVANIA MUNICIPAL BOND FUND – continued

 

     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.02         $10.65         $10.39         $9.55         $10.06   
Income (loss) from investment operations                                             
Net investment income (d)      $0.27         $0.31         $0.32         $0.35         $0.36   

Net realized and unrealized gain (loss) on investments

      0.45         (0.65 )       0.24         0.83         (0.53 ) 

Total from investment operations

      $0.72         $(0.34 )       $0.56         $1.18         $(0.17 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.27 )       $(0.29 )       $(0.30 )       $(0.34 )       $(0.34 ) 

Net asset value, end of period (x)

      $10.47         $10.02         $10.65         $10.39         $9.55   

Total return (%) (r)(s)(t)(x)

      7.26         (3.16 )       5.42         12.49         (1.74 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.70         1.68         1.64         1.68         1.68   

Expenses after expense reductions (f)

      1.55         1.55         1.51         1.55         1.56   

Net investment income

      2.65         3.12         2.99         3.44         3.55   

Portfolio turnover

      23         21         15         21         21   

Net assets at end of period (000 omitted)

      $6,212         $6,936         $10,793         $10,524         $12,750   
Supplemental Ratios (%):                                             

Ratios of expenses to average net assets after expense reductions and excluding interest expense and fees (f)(l)

      N/A         N/A         1.51         1.54         1.56   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(l) Interest expense and fees relate to payments made to the holders of the floating rate certificates from trust assets.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

74

Table of Contents

Financial Highlights – continued

 

MFS SOUTH CAROLINA MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $11.78         $12.61         $12.38         $11.48         $12.04   
Income (loss) from investment operations                                             
Net investment income (d)      $0.36         $0.43         $0.43         $0.47         $0.50   

Net realized and unrealized gain (loss) on investments

      0.51         (0.85 )       0.22         0.89         (0.56 ) 

Total from investment operations

      $0.87         $(0.42 )       $0.65         $1.36         $(0.06 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.36 )       $(0.41 )       $(0.42 )       $(0.46 )       $(0.50 ) 

Net asset value, end of period (x)

      $12.29         $11.78         $12.61         $12.38         $11.48   

Total return (%) (r)(s)(t)(x)

      7.48         (3.31 )       5.24         12.02         (0.59 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      0.90         0.89         0.86         0.88         0.88   

Expenses after expense reductions (f)

      0.89         0.89         0.86         0.88         0.88   

Net investment income

      2.97         3.59         3.42         3.94         4.20   

Portfolio turnover

      22         24         15         19         26   

Net assets at end of period (000 omitted)

      $170,887         $166,428         $220,370         $194,840         $166,413   
     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $11.77         $12.61         $12.37         $11.47         $12.04   
Income (loss) from investment operations                                             
Net investment income (d)      $0.27         $0.34         $0.34         $0.38         $0.41   

Net realized and unrealized gain (loss) on investments

      0.51         (0.86 )       0.22         0.89         (0.57 ) 

Total from investment operations

      $0.78         $(0.52 )       $0.56         $1.27         $(0.16 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.27 )       $(0.32 )       $(0.32 )       $(0.37 )       $(0.41 ) 

Net asset value, end of period (x)

      $12.28         $11.77         $12.61         $12.37         $11.47   

Total return (%) (r)(s)(t)(x)

      6.69         (4.11 )       4.55         11.20         (1.41 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.65         1.64         1.61         1.63         1.63   

Expenses after expense reductions (f)

      1.64         1.64         1.61         1.63         1.63   

Net investment income

      2.22         2.84         2.67         3.20         3.45   

Portfolio turnover

      22         24         15         19         26   

Net assets at end of period (000 omitted)

      $4,635         $5,125         $7,421         $6,698         $6,928   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

75

Table of Contents

Financial Highlights – continued

 

MFS TENNESSEE MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.27         $10.96         $10.76         $9.97         $10.40   
Income (loss) from investment operations                                             
Net investment income (d)      $0.33         $0.35         $0.39         $0.43         $0.43   

Net realized and unrealized gain (loss) on investments

      0.38         (0.70 )       0.18         0.78         (0.44 ) 

Total from investment operations

      $0.71         $(0.35 )       $0.57         $1.21         $(0.01 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.31 )       $(0.34 )       $(0.37 )       $(0.42 )       $(0.42 ) 

Net asset value, end of period (x)

      $10.67         $10.27         $10.96         $10.76         $9.97   

Total return (%) (r)(s)(t)(x)

      7.01         (3.15 )       5.33         12.31         (0.14 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      0.94         0.94         0.89         0.91         0.91   

Expenses after expense reductions (f)

      0.94         0.94         0.89         0.91         0.91   

Net investment income

      3.12         3.42         3.51         4.08         4.13   

Portfolio turnover

      18         26         20         14         18   

Net assets at end of period (000 omitted)

      $102,473         $104,102         $133,911         $117,095         $107,334   
     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.26         $10.95         $10.75         $9.97         $10.39   
Income (loss) from investment operations                                             
Net investment income (d)      $0.25         $0.28         $0.30         $0.35         $0.35   

Net realized and unrealized gain (loss) on investments

      0.38         (0.71 )       0.19         0.77         (0.43 ) 

Total from investment operations

      $0.63         $(0.43 )       $0.49         $1.12         $(0.08 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.23 )       $(0.26 )       $(0.29 )       $(0.34 )       $(0.34 ) 

Net asset value, end of period (x)

      $10.66         $10.26         $10.95         $10.75         $9.97   

Total return (%) (r)(s)(t)(x)

      6.21         (3.88 )       4.55         11.37         (0.78 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.69         1.69         1.64         1.66         1.66   

Expenses after expense reductions (f)

      1.69         1.69         1.64         1.66         1.65   

Net investment income

      2.37         2.68         2.76         3.34         3.38   

Portfolio turnover

      18         26         20         14         18   

Net assets at end of period (000 omitted)

      $1,902         $1,893         $2,727         $2,535         $3,116   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

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MFS VIRGINIA MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $11.05         $11.69         $11.52         $10.67         $11.24   
Income (loss) from investment operations                                             
Net investment income (d)      $0.39         $0.40         $0.42         $0.45         $0.47   

Net realized and unrealized gain (loss) on investments

      0.37         (0.64 )       0.15         0.83         (0.57 ) 

Total from investment operations

      $0.76         $(0.24 )       $0.57         $1.28         $(0.10 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.37 )       $(0.40 )       $(0.40 )       $(0.43 )       $(0.46 ) 

From net realized gain on investments

      —         —         —         —         (0.01 ) 

Total distributions declared to shareholders

      $(0.37 )       $(0.40 )       $(0.40 )       $(0.43 )       $(0.47 ) 

Net asset value, end of period (x)

      $11.44         $11.05         $11.69         $11.52         $10.67   

Total return (%) (r)(s)(t)(x)

      6.97         (2.02 )       4.99         12.21         (1.03 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      0.88         0.89         0.86         0.86         0.86   

Expenses after expense reductions (f)

      0.88         0.88         0.86         0.86         0.86   

Net investment income

      3.48         3.65         3.57         3.99         4.23   

Portfolio turnover

      20         24         11         24         21   

Net assets at end of period (000 omitted)

      $255,205         $257,695         $335,395         $317,117         $292,027   
Supplemental Ratios (%):                                             

Ratios of expenses to average net assets after expense reductions and excluding interest expense and fees (f)(l)

      0.86         0.87         0.85         0.85         0.85   

See Notes to Financial Statements

 

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MFS VIRGINIA MUNICIPAL BOND FUND – continued

 

     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $11.05         $11.68         $11.51         $10.66         $11.24   
Income (loss) from investment operations                                             
Net investment income (d)      $0.31         $0.32         $0.33         $0.36         $0.39   

Net realized and unrealized gain (loss) on investments

      0.37         (0.64 )       0.15         0.84         (0.58 ) 

Total from investment operations

      $0.68         $(0.32 )       $0.48         $1.20         $(0.19 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.29 )       $(0.31 )       $(0.31 )       $(0.35 )       $(0.38 ) 

From net realized gain on investments

      —         —         —         —         (0.01 ) 

Total distributions declared to shareholders

      $(0.29 )       $(0.31 )       $(0.31 )       $(0.35 )       $(0.39 ) 

Net asset value, end of period (x)

      $11.44         $11.05         $11.68         $11.51         $10.66   

Total return (%) (r)(s)(t)(x)

      6.18         (2.67 )       4.21         11.38         (1.85 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.63         1.64         1.61         1.61         1.61   

Expenses after expense reductions (f)

      1.63         1.64         1.61         1.61         1.61   

Net investment income

      2.73         2.90         2.83         3.25         3.47   

Portfolio turnover

      20         24         11         24         21   

Net assets at end of period (000 omitted)

      $1,921         $2,212         $3,425         $3,781         $4,159   
Supplemental Ratios (%):                                             

Ratios of expenses to average net assets after expense reductions and excluding interest expense and fees (f)(l)

      1.62         1.63         1.60         1.60         1.60   

See Notes to Financial Statements

 

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MFS VIRGINIA MUNICIPAL BOND FUND – continued

 

     Years ended 3/31  
Class C    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $11.05         $11.68         $11.51         $10.67         $11.24   
Income (loss) from investment operations                                             
Net investment income (d)      $0.31         $0.32         $0.33         $0.36         $0.39   

Net realized and unrealized gain (loss) on investments

      0.37         (0.64 )       0.15         0.83         (0.58 ) 

Total from investment operations

      $0.68         $(0.32 )       $0.48         $1.19         $(0.19 ) 
Less distributions declared to shareholders                                             
From net investment income      $(0.29 )       $(0.31 )       $(0.31 )       $(0.35 )       $(0.37 ) 

From net realized gain on investments

      —         —         —         —         (0.01 ) 

Total distributions declared to shareholders

      $(0.29 )       $(0.31 )       $(0.31 )       $(0.35 )       $(0.38 ) 

Net asset value, end of period (x)

      $11.44         $11.05         $11.68         $11.51         $10.67   

Total return (%) (r)(s)(t)(x)

      6.17         (2.67 )       4.21         11.27         (1.77 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.63         1.64         1.61         1.61         1.61   

Expenses after expense reductions (f)

      1.63         1.64         1.61         1.61         1.61   

Net investment income

      2.73         2.90         2.81         3.24         3.47   

Portfolio turnover

      20         24         11         24         21   

Net assets at end of period (000 omitted)

      $25,108         $25,163         $35,878         $32,519         $30,726   
Supplemental Ratios (%):                                             

Ratios of expenses to average net assets after expense reductions and excluding interest expense and fees (f)(l)

      1.62         1.63         1.60         1.60         1.60   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(l) Interest expense and fees relate to payments made to the holders of the floating rate certificates from trust assets.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(w) Per share amount was less than $0.01.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

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MFS WEST VIRGINIA MUNICIPAL BOND FUND

The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

     Years ended 3/31  
Class A    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.93         $11.60         $11.49         $10.61         $10.98   
Income (loss) from investment operations                                             
Net investment income (d)      $0.38         $0.39         $0.40         $0.43         $0.44   

Net realized and unrealized gain (loss) on investments

      0.40         (0.69 )       0.09         0.86         (0.39 ) 

Total from investment operations

      $0.78         $(0.30 )       $0.49         $1.29         $0.05   
Less distributions declared to shareholders                                             

From net investment income

      $(0.35 )       $(0.37 )       $(0.38 )       $(0.41 )       $(0.42 ) 

Net asset value, end of period (x)

      $11.36         $10.93         $11.60         $11.49         $10.61   

Total return (%) (r)(s)(t)(x)

      7.18         (2.54 )       4.32         12.32         0.41   
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      0.93         0.93         0.88         0.88         0.89   

Expenses after expense reductions (f)

      0.90         0.90         0.88         0.88         0.89   

Net investment income

      3.34         3.58         3.44         3.81         3.98   

Portfolio turnover

      22         17         14         14         17   

Net assets at end of period (000 omitted)

      $121,680         $119,721         $153,032         $143,789         $128,450   
     Years ended 3/31  
Class B    2015      2014      2013      2012      2011  

Net asset value, beginning of period

      $10.93         $11.59         $11.49         $10.61         $10.97   
Income (loss) from investment operations                                             
Net investment income (d)      $0.29         $0.31         $0.31         $0.34         $0.36   

Net realized and unrealized gain (loss) on investments

      0.39         (0.68 )       0.09         0.86         (0.38 ) 

Total from investment operations

      $0.68         $(0.37 )       $0.40         $1.20         $(0.02 ) 
Less distributions declared to shareholders                                             

From net investment income

      $(0.26 )       $(0.29 )       $(0.30 )       $(0.32 )       $(0.34 ) 

Net asset value, end of period (x)

      $11.35         $10.93         $11.59         $11.49         $10.61   

Total return (%) (r)(s)(t)(x)

      6.29         (3.18 )       3.46         11.48         (0.24 ) 
Ratios (%) (to average net assets) and Supplemental data:                                             
Expenses before expense reductions (f)      1.68         1.68         1.63         1.63         1.64   

Expenses after expense reductions (f)

      1.65         1.65         1.63         1.63         1.64   

Net investment income

      2.59         2.83         2.69         3.08         3.23   

Portfolio turnover

      22         17         14         14         17   

Net assets at end of period (000 omitted)

      $1,209         $1,291         $1,890         $2,220         $2,925   
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

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NOTES TO FINANCIAL STATEMENTS

 

(1)   Business and Organization

MFS Mississippi Municipal Bond Fund (Mississippi Fund), MFS New York Municipal Bond Fund (New York Fund), MFS North Carolina Municipal Bond Fund (North Carolina Fund), MFS Pennsylvania Municipal Bond Fund (Pennsylvania Fund), MFS South Carolina Municipal Bond Fund (South Carolina Fund), MFS Tennessee Municipal Bond Fund (Tennessee Fund), MFS Virginia Municipal Bond Fund (Virginia Fund), and MFS West Virginia Municipal Bond Fund (West Virginia Fund) are each a diversified series of MFS Municipal Series Trust, (with the exception of Mississippi Fund and West Virginia Fund which are non-diversified), which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The funds are each investment companies and accordingly follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investment Companies.

 

(2)   Significant Accounting Policies

General – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. In the preparation of these financial statements, management has evaluated subsequent events occurring after the date of each fund’s Statement of Assets and Liabilities through the date that the financial statements were issued. Each fund invests primarily in municipal instruments. The value of municipal instruments can be affected by changes in their actual or perceived credit quality. The credit quality of municipal instruments can be affected by, among other things, the financial condition of the issuer or guarantor, the issuer’s future borrowing plans and sources of revenue, the economic feasibility of the revenue bond project or general borrowing purpose, political or economic developments in the region or state where the instrument is issued and the liquidity of the security. Municipal instruments generally trade in the over-the-counter market. Municipal instruments backed by current and anticipated revenues from a specific project or specific assets can be negatively affected by the discontinuance of the taxation supporting the projects or assets or the inability to collect revenues for the project or from the assets. If the Internal Revenue Service determines an issuer of a municipal instrument has not complied with the applicable tax requirements, interest from the security could become taxable, the security could decline in value, and distributions made by the funds could be taxable to shareholders.

In June 2014, FASB issued Accounting Standards Update 2014-11, Transfers and Servicing (Topic 860) – Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (“ASU 2014-11”). ASU 2014-11 changes the accounting for repurchase-to-maturity transactions (i.e., repurchase agreements that settle at the same time as the maturity of the transferred financial asset) and enhances the required disclosures for repurchase agreements and other similar transactions. Although still evaluating the potential impacts of ASU 2014-11 to each fund, management expects that the impact of each fund’s adoption will be limited to additional financial statement disclosures which would first be effective for interim reporting periods beginning after March 15, 2015.

Balance Sheet Offsetting – Each fund’s accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the International Swaps and Derivatives Association (ISDA) Master Agreement does not result in an offset of reported amounts of financial assets and financial liabilities in the Statements of Assets and Liabilities across transactions between each fund and the applicable counterparty. Each fund’s right to setoff may be restricted or prohibited by the bankruptcy or insolvency laws of the particular jurisdiction to which a specific master netting agreement counterparty is subject. Balance sheet offsetting disclosures, to the extent applicable to each fund, have been included in each fund’s Significant Accounting Policies note under the captions for each of the fund’s in-scope financial instruments and transactions.

Investment Valuations – Debt instruments and floating rate loans, including restricted debt instruments, are generally valued at an evaluated or composite bid as provided by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Open-end investment companies are generally valued at net asset value per share. Securities and other assets generally valued on the basis of information from a third-party pricing service may also be valued at a broker/dealer bid quotation. Values obtained from third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data.

The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of each fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under each fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally

 

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traded (such as foreign exchange or market) and prior to the determination of each fund’s net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. The adviser generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating each fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine each fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that each fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which each fund determines its net asset value per share.

Various inputs are used in determining the value of each fund’s assets or liabilities. These inputs are categorized into three broad levels. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Each fund’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes unobservable inputs, which may include the adviser’s own assumptions in determining the fair value of investments. The following is a summary of the levels used as of March 31, 2015 in valuing each fund’s assets or liabilities:

 

     Level 1      Level 2      Level 3      Total  

Mississippi Fund

                            
Investments at Value                            
Municipal Bonds      $—         $86,624,669         $—         $86,624,669   
Mutual Funds      392,651         —         —         392,651   
Total Investments      $392,651         $86,624,669         $—         $87,017,320   

New York Fund

                            
Investments at Value                            
Municipal Bonds      $—         $183,491,791         $—         $183,491,791   
Mutual Funds      11,356,169         —         —         11,356,169   
Total Investments      $11,356,169         $183,491,791         $—         $194,847,960   

North Carolina Fund

                            
Investments at Value                            
Municipal Bonds      $—         $335,277,765         $—         $335,277,765   
Mutual Funds      7,496,659         —         —         7,496,659   
Total Investments      $7,496,659         $335,277,765         $—         $342,774,424   

Pennsylvania Fund

                            
Investments at Value                            
Municipal Bonds      $—         $112,625,706         $—         $112,625,706   
Mutual Funds      1,736,542         —         —         1,736,542   
Total Investments      $1,736,542         $112,625,706         $—         $114,362,248   

South Carolina Fund

                            
Investments at Value                            
Municipal Bonds      $—         $167,561,137         $—         $167,561,137   
Mutual Funds      8,648,818         —         —         8,648,818   
Total Investments      $8,648,818         $167,561,137         $—         $176,209,955   

Tennessee Fund

                            
Investments at Value                            
Municipal Bonds      $—         $98,117,497         $—         $98,117,497   
Mutual Funds      3,310,314         —         —         3,310,314   
Total Investments      $3,310,314         $98,117,497         $—         $101,427,811   

 

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     Level 1      Level 2      Level 3      Total  

Virginia Fund

                            
Investments at Value                            
Municipal Bonds      $—         $282,246,145         $—         $282,246,145   
Mutual Funds      2,885,858         —         —         2,885,858   
Total Investments      $2,885,858         $282,246,145         $—         $285,132,003   

West Virginia Fund

                            
Investments at Value                            
Municipal Bonds      $—         $121,347,088         $—         $121,347,088   
Mutual Funds      3,623,362         —         —         3,623,362   
Total Investments      $3,623,362         $121,347,088         $—         $124,970,450   

For further information regarding security characteristics, see the Portfolios of Investments.

Inverse Floaters – The Virginia Fund invests in municipal inverse floating rate securities which are structured by the issuer (known as primary market inverse floating rate securities) or by an investment banker utilizing municipal bonds which have already been issued (known as secondary market inverse floating rate securities) to have variable rates of interest which typically move in the opposite direction of short term interest rates. A secondary market inverse floating rate security is created when an investment banker transfers a fixed rate municipal bond to a special purpose trust, and causes the trust to (a) issue floating rate certificates to third parties, in an amount equal to a fraction of the par amount of the deposited bonds (these certificates usually pay tax-exempt interest at short-term interest rates that typically reset weekly; and the certificate holders typically, on seven days notice, have the option to tender their certificates to the investment banker or another party for redemption at par plus accrued interest), and (b) issue inverse floating rate certificates (sometimes referred to as “inverse floaters”). If the holders of the inverse floaters transfer the municipal bonds to an investment banker for the purpose of depositing the municipal bonds into the special purpose trust, the inverse floating rate certificates that are issued by the trust are referred to as “self-deposited inverse floaters.” If the bonds held by the trust are purchased by the investment banker for deposit into the trust from someone other than the purchasers of the inverse floaters, the inverse floating rate certificates that are issued by the trust are referred to as “externally deposited inverse floaters.” Such self-deposited inverse floaters held by the Virginia Fund are accounted for as secured borrowings, with the municipal bonds reflected in the investments of the Virginia Fund and amounts owed to the holders of the floating rate certificates under the provisions of the trust, which amounts are paid solely from the assets of the trust, reflected as liabilities of the Virginia Fund in the Statements of Assets and Liabilities under the caption, “Payable to the holders of the floating rate certificates from trust assets”. The carrying value of the Virginia Fund’s payable to the holders of the floating rate certificates from trust assets as reported in the Virginia Fund’s Statements of Assets and Liabilities approximates its fair value. The value of the payable to the holders of the floating rate certificates from trust assets as of the reporting date is considered level 2 under the fair value hierarchy disclosure. At March 31, 2015, the Virginia Fund’s payable to the holders of the floating rate certificates from trust assets was $5,004,831 and the interest rate on the floating rate certificates issued by the trust was 0.03%. For the year ended March 31, 2015, the Virginia Fund’s average payable to the holders of the floating rate certificates from trust assets was $5,003,068 at a weighted average interest rate of 0.06%. Interest expense and fees relate to interest payments made to the holders of certain floating rate certificates and associated fees, both of which are made from trust assets. Interest expense and fees are recorded as incurred. For the year ended March 31, 2015, the Virginia Fund’s interest expense and fees in connection with self-deposited inverse floaters were $33,635.

Indemnifications – Under each fund’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to each fund. Additionally, in the normal course of business, each fund enters into agreements with service providers that may contain indemnification clauses. Each fund’s maximum exposure under these agreements is unknown as this would involve future claims that may be made against each fund that have not yet occurred.

Investment Transactions and Income – Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. All premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles. Interest payments received in additional securities are recorded on the ex-interest date in an amount equal to the value of the security on such date. Debt obligations may be placed on non-accrual status or set to accrue at a rate of interest less than the contractual coupon when the collection of all or a portion of interest has become doubtful. Interest income for those debt obligations may be further reduced by the write-off of the related interest receivables when deemed uncollectible.

Each fund may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statements of Operations in realized gain/loss if the security has been disposed of by the fund or in unrealized gain/loss if the security is still held by the fund. Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statements of Operations.

 

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Legal fees and other related expenses incurred to preserve and protect the value of a security owned are added to the cost of the security; other legal fees are expensed. Capital infusions made directly to the security issuer, which are generally non-recurring, incurred to protect or enhance the value of high-yield debt securities, are reported as additions to the cost basis of the security. Costs that are incurred to negotiate the terms or conditions of capital infusions or that are expected to result in a plan of reorganization are reported as realized losses. Ongoing costs incurred to protect or enhance an investment, or costs incurred to pursue other claims or legal actions, are expensed.

Fees Paid Indirectly – Each fund’s custody fee may be reduced according to an arrangement that measures the value of cash deposited with the custodian by each fund. For each fund, this amount, for the year ended March 31, 2015, is shown as a reduction of total expenses in the Statements of Operations.

Tax Matters and Distributions – Each fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable and tax-exempt income, including realized capital gains. As a result, no provision for federal income tax is required. Each fund’s federal tax returns, when filed, will remain subject to examination by the Internal Revenue Service for a three year period. Management has analyzed each fund’s tax positions taken on federal and state tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

Distributions to shareholders are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These adjustments have no impact on net assets or net asset value per share. Temporary differences which arise from recognizing certain items of income, expense, gain or loss in different periods for financial statement and tax purposes will reverse at some time in the future. Distributions in excess of net investment income or net realized gains are temporary overdistributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes.

Book/tax differences primarily relate to amortization and accretion of debt securities and secured borrowings, as applicable to each fund.

The tax character of distributions declared to shareholders for the last two fiscal years is as follows:

 

Year ended 3/31/15   Mississippi
Fund		     New York
Fund		    

North

Carolina

Fund

     Pennsylvania
Fund		     South
Carolina
Fund		     Tennessee
Fund		    

Virginia

Fund

     West
Virginia
Fund		  
Ordinary income (including any short-term capital gains)     $—        $—        $—        $—        $46,957        $11,636        $127,881        $—   
Tax-exempt income     3,054,047        6,491,818        10,957,227        3,943,495        5,090,940        3,131,451        9,128,896        3,757,344   
Total distributions     $3,054,047        $6,491,818        $10,957,227        $3,943,495        $5,137,897        $3,143,087        $9,256,777        $3,757,344   
Year ended 3/31/14   Mississippi
Fund		     New York
Fund		    

North

Carolina

Fund

     Pennsylvania
Fund		     South
Carolina
Fund		     Tennessee
Fund		    

Virginia

Fund

     West
Virginia
Fund		  
Ordinary income (including any short-term capital gains)     $206,918        $—        $40,014        $—        $101,054        $—        $—        $—   
Tax-exempt income     3,710,354        7,261,983        12,997,029        4,898,095        6,473,427        3,839,305        11,082,069        4,610,142   
Long-term capital gain     133,285        —        1,752,714        —        —        —        —        —   
Total distributions     $4,050,557        $7,261,983        $14,789,757        $4,898,095        $6,574,481        $3,839,305        $11,082,069        $4,610,142   

The federal tax cost and the tax basis components of distributable earnings were as follows:

 

As of 3/31/15    Mississippi
Fund		     

New York

Fund

     

North

Carolina

Fund

      Pennsylvania
Fund		  
Cost of investments      $79,678,952         $177,868,131         $313,425,874         $104,652,869   
Gross appreciation      7,447,124         17,127,175         29,583,697         9,778,408   
Gross depreciation      (108,756 )       (147,346 )       (235,147 )       (69,029 ) 
Net unrealized appreciation (depreciation)      $7,338,368         $16,979,829         $29,348,550         $9,709,379   
Undistributed ordinary income      —         37,622         5,035         63,188   
Undistributed tax-exempt income      315,682         600,858         1,131,891         341,205   
Capital loss carryforwards      (2,572,631 )       (6,659,894 )       (12,012,153 )       (5,329,621 ) 
Other temporary differences      (268,420 )       (567,669 )       (938,224 )       (321,759 ) 

 

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As of 3/31/15   

South

Carolina

Fund

      Tennessee
Fund		     

Virginia

Fund

     

West

Virginia

Fund

  
Cost of investments      $163,129,472         $93,586,418         $259,528,478         $116,286,942   
Gross appreciation      13,285,641         8,067,560         22,640,833         8,818,140   
Gross depreciation      (205,158 )       (226,167 )       (2,042,139 )       (134,632 ) 
Net unrealized appreciation (depreciation)      $13,080,483         $7,841,393         $20,598,694         $8,683,508   
Undistributed ordinary income      6,569         1,815         187,172         —   
Undistributed tax-exempt income      427,043         744,418         499,789         311,371   
Capital loss carryforwards      (8,256,103 )       (3,771,241 )       (9,720,281 )       (5,019,150 ) 
Other temporary differences      (417,427 )       (266,083 )       (765,022 )       (323,835 ) 

Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized for fund fiscal years beginning after March 31, 2011 may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses (“post-enactment losses”). Previously, net capital losses were carried forward for eight years and treated as short-term losses (“pre-enactment losses”). As a transition rule, the Act requires that all post-enactment net capital losses be used before pre-enactment net capital losses.

As of March 31, 2015, each fund had capital loss carryforwards available to offset future realized gains as follows:

 

Pre-enactment losses which expire as follows:     New York
Fund		     Pennsylvania
Fund		     South
Carolina
Fund		     Tennessee
Fund		     Virginia
Fund		     West
Virginia
Fund		  
3/31/17         $—        $(310,955 )      $—        $—        $—        $—   
3/31/18         —        (139,728 )      (620,248 )      —        —        (314,556 ) 
3/31/19                     (1,676,455 )      (847,239 )      (825,001 )      (57,345 )      (203,621 )      —   
Total         $(1,676,455 )      $(1,297,922 )      $(1,445,249 )      $(57,345 )      $(203,621 )      $(314,556 ) 
Post-enactment losses which are
characterized as follows:		   Mississippi
Fund		     New York
Fund		     North
Carolina
Fund		     Pennsylvania
Fund		     South
Carolina
Fund		     Tennessee
Fund		     Virginia
Fund		     West
Virginia
Fund		  
Short-Term     $(583,457 )      $(3,461,445 )      $(7,907,980 )      $(2,523,802 )      $(3,349,099 )      $(1,991,278 )      $(3,223,580 )      $(1,437,387 ) 
Long-Term     (1,989,174 )      (1,521,994 )      (4,104,173 )      (1,507,897 )      (3,461,755 )      (1,722,618 )      (6,293,080 )      (3,267,207 ) 
Total     $(2,572,631 )      $(4,983,439 )      $(12,012,153 )      $(4,031,699 )      $(6,810,854 )      $(3,713,896 )      $(9,516,660 )      $(4,704,594 ) 

Multiple Classes of Shares of Beneficial Interest – Each fund offers multiple classes of shares, which differ in their respective distribution and service fees. Each fund’s income and common expenses are allocated to shareholders based on the value of settled shares outstanding of each class. Each fund’s realized and unrealized gain (loss) are allocated to shareholders based on the daily net assets of each class. Dividends are declared separately for each class. Differences in per share dividend rates are generally due to differences in separate class expenses. Class B shares will convert to Class A shares approximately eight years after purchase. Each fund’s distributions declared to shareholders as reported in the Statements of Changes in Net Assets are presented by class as follows:

Distributions declared to shareholders:

From net investment income

 

     Mississippi Fund      New York Fund      North Carolina Fund      Pennsylvania Fund  
     Year ended
3/31/15		      Year ended
3/31/14		      Year ended
3/31/15		      Year ended
3/31/14		      Year ended
3/31/15		      Year ended
3/31/14		      Year ended
3/31/15		      Year ended
3/31/14		  
Class A      $3,002,563         $3,638,991         $5,652,492         $6,214,089         $9,379,601         $10,949,024         $3,769,713         $4,652,323   
Class B      51,484         71,223         154,597         180,165         125,884         165,716         173,782         245,772   
Class C      —         —         684,729         867,729         1,451,742         1,882,289         —         —   
Total      $3,054,047         $3,710,214         $6,491,818         $7,261,983         $10,957,227         $12,997,029         $3,943,495         $4,898,095   
     South Carolina Fund      Tennessee Fund      Virginia Fund      West Virginia Fund  
     Year ended
3/31/15		      Year ended
3/31/14		      Year ended
3/31/15		      Year ended
3/31/14		      Year ended
3/31/15		      Year ended
3/31/14		      Year ended
3/31/15		      Year ended
3/31/14		  
Class A      $5,029,139         $6,412,125         $3,100,058         $3,780,694         $8,569,408         $10,164,248         $3,728,386         $4,569,555   
Class B      108,758         162,356         43,029         58,611         52,749         77,252         28,958         40,587   
Class C      —         —         —         —         634,620         840,569         —         —   
Total      $5,137,897         $6,574,481         $3,143,087         $3,839,305         $9,256,777         $11,082,069         $3,757,344         $4,610,142   

 

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From net realized gain on investments

 

   

Mississippi Fund

  

North Carolina Fund

            
   

Year ended
3/31/15

  

Year ended
3/31/14

  

Year ended
3/31/15

  

Year ended
3/31/14

            
Class A   $—   $332,347   $—   $1,450,638      
Class B   —   7,996   —   28,191      
Class C   —   —   —   313,899      
Total   —   $340,343   $—   $1,792,728      

 

(3)   Transactions with Affiliates

Investment Adviser – Each fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to each fund. The management fee is computed daily and paid monthly at an annual rate of 0.45% of each fund’s average daily net assets.

MFS has agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the funds’ Board of Trustees. For the year ended March 31, 2015, these management fee reductions amounted to the following, which are included in the reduction of total expenses in the Statements of Operations:

 

Mississippi

Fund

   New York
Fund		   North Carolina
Fund		   Pennsylvania
Fund		   South Carolina
Fund		   Tennessee
Fund		   Virginia
Fund		   West Virginia
Fund
$4,867   $10,624   $18,992   $6,523   $9,612   $5,907   $15,992   $6,776

The management fee incurred for the year ended March 31, 2015 was equivalent to an annual effective rate of 0.44% of each fund’s average daily net assets.

The investment adviser has agreed in writing to pay a portion of the following funds’ total annual operating expenses, excluding interest, taxes, extraordinary expenses, brokerage and transaction costs, and investment-related expenses (including interest expense and fees associated with investments in inverse floating rate instruments), such that total fund operating expenses do not exceed the following rates annually of these funds’ average daily net assets:

 

     New York
Fund		      North
Carolina
Fund		      South
Carolina
Fund		      Tennessee
Fund		      Virginia
Fund		      West
Virginia
Fund		  
Class A      0.90%         0.93%         0.91%         0.94%         0.89%         0.90%   
Class B      1.65%         1.68%         1.66%         1.69%         1.64%         1.65%   
Class C      1.65%         1.68%         N/A         N/A         1.64%         N/A   

These written agreements will continue until modified by the funds’ Board of Trustees, but such agreements will continue at least until July 31, 2015. For the year ended March 31, 2015, this reduction amounted to $27,589 for the West Virginia Fund, and is included in the reduction of total expenses in the Statements of Operations. For the year ended March 31, 2015, the actual operating expenses for the New York Fund, North Carolina Fund, South Carolina Fund, Tennessee Fund, and Virginia Fund did not exceed the limits described above and therefore, the investment adviser did not pay any portion of these funds’ expenses under these agreements.

Distributor – MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received the following amounts for the year ended March 31, 2015, as its portion of the initial sales charge on sales of Class A shares of each fund:

 

Mississippi
Fund		   New York
Fund		   North Carolina
Fund		   Pennsylvania
Fund		   South Carolina
Fund		   Tennessee
Fund		   Virginia
Fund		   West
Virginia
Fund
$17,150   $22,823   $46,728   $24,287   $47,332   $18,540   $32,097   $31,043

The Board of Trustees has adopted a distribution plan for certain share classes pursuant to Rule 12b-1 of the Investment Company Act of 1940.

Each fund’s distribution plan provides that each fund will pay MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.

 

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Distribution Plan Fee Table:

 

     CLASS A  
    

Distribution

Fee Rate (d)

     

Service

Fee Rate (d)

     

Total
Distribution

Plan (d)

     

Annual

Effective

Rate (e)

     

Distribution

and Service

Fee

  
Mississippi Fund      —         0.25%         0.25%         0.10%         $214,855   
New York Fund      —         0.25%         0.25%         0.25%         402,253   
North Carolina Fund      —         0.25%         0.25%         0.25%         703,105   
Pennsylvania Fund      —         0.25%         0.25%         0.10%         277,709   
South Carolina Fund      —         0.25%         0.25%         0.25%         420,855   
Tennessee Fund      —         0.25%         0.25%         0.25%         261,787   
Virginia Fund      —         0.25%         0.25%         0.25%         652,983   
West Virginia Fund      —         0.25%         0.25%         0.25%         302,091   
     CLASS B  
    

Distribution

Fee Rate (d)

     

Service

Fee Rate (d)

     

Total
Distribution

Plan (d)

     

Annual

Effective

Rate (e)

     

Distribution

and Service

Fee

  
Mississippi Fund      0.75%         0.25%         1.00%         0.76%         $18,174   
New York Fund      0.75%         0.25%         1.00%         1.00%         55,789   
North Carolina Fund      0.75%         0.25%         1.00%         1.00%         48,624   
Pennsylvania Fund      0.75%         0.25%         1.00%         0.86%         66,090   
South Carolina Fund      0.75%         0.25%         1.00%         1.00%         48,480   
Tennessee Fund      0.75%         0.25%         1.00%         1.00%         19,475   
Virginia Fund      0.75%         0.25%         1.00%         1.00%         20,864   
West Virginia Fund      0.75%         0.25%         1.00%         1.00%         12,375   
     CLASS C  
    

Distribution

Fee Rate (d)

     

Service

Fee Rate (d)

     

Total
Distribution

Plan (d)

     

Annual

Effective

Rate (e)

     

Distribution

and Service

Fee

  
New York Fund      0.75%         0.25%         1.00%         1.00%         $247,668   
North Carolina Fund      0.75%         0.25%         1.00%         1.00%         561,633   
Virginia Fund      0.75%         0.25%         1.00%         1.00%         250,876   

 

      Mississippi
Fund		      New York
Fund		      North
Carolina
Fund		      Pennsylvania
Fund		      South
Carolina
Fund		      Tennessee
Fund		      Virginia
Fund		      West
Virginia
Fund		  
Total Distribution and Service Fees      $233,029         $705,710         $1,313,362         $343,799         $469,335         $281,262         $924,723         $314,466   

 

(d) In accordance with the distribution plan for certain classes, each fund pays distribution and/or service fees equal to these annual percentage rates of each class’s average daily net assets. The distribution and service fee rates disclosed by class represent the current rates in effect at the end of the reporting period. Any rate changes, if applicable, are detailed below.
(e) The annual effective rates represent actual fees incurred under the distribution plan for the year ended March 31, 2015 based on each class’s average daily net assets. MFD has voluntarily agreed to rebate a portion of each class’s 0.25% service fee attributable to accounts for which MFD retains the 0.25% service fee except for accounts attributable to MFS or its affiliates’ seed money. For the year ended March 31, 2015, these rebates amounted to the following, and are included in the reduction of total expenses in the Statements of Operations:

 

        Mississippi
Fund		        New York
Fund		        North
Carolina
Fund		        Pennsylvania
Fund		        South
Carolina
Fund		        Tennessee
Fund		        Virginia
Fund		        West
Virginia
Fund		  
Class A        $3,703           $6,011           $9,299           $192           $3,715           $1,191           $3,819           $2,117   
Class B        —           —           —           —           6           —           —           —   
Class C        N/A           —           —           N/A           N/A           N/A           29           N/A   

 

  Mississippi Fund: MFD has agreed in writing to reduce the Class A service fee rate to 0.10%. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until July 31, 2015. This reduction amounted to $128,914 and is included in the reduction of total expenses in the Statements of Operations. The service fee rate attributable to Class B shares within the first year of purchase is 0.25%. The service fee rate attributable to all other Class B shares has been reduced by MFD to 0.00% under a written agreement that will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until July 31, 2015. This reduction amounted to $4,345 and is included in the reduction of total expenses in the Statements of Operations.

 

  Pennsylvania Fund: MFD has agreed in writing to reduce the Class A service fee rate to 0.10%. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue until at least July 31, 2015. This reduction amounted to $166,626 and is included in the reduction of total expenses in the Statements of Operations. The service fee rate attributable to Class B shares within the first year of purchase is 0.25%. The service fee rate attributable to all other Class B shares has been reduced by MFD to 0.10% under a written agreement that will continue until modified by the fund’s Board of Trustees, but will continue at least until July 31, 2015. This reduction amounted to $9,366 and is included in the reduction of total expenses in the Statements of Operations.

 

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Certain Class A shares are subject to a contingent deferred sales charge (CDSC) in the event of a shareholder redemption within 18 months of purchase for shares purchased on or after August 1, 2012, and within 24 months of purchase for shares purchased prior to August 1, 2012. Class C shares are subject to a CDSC in the event of a shareholder redemption within 12 months of purchase. Class B shares are subject to a CDSC in the event of a shareholder redemption within six years of purchase. All contingent deferred sales charges are paid to MFD and during the year ended March 31, 2015, were as follows:

 

CDSC imposed      Mississippi
Fund		        New York
Fund		        North
Carolina
Fund		        Pennsylvania
Fund		        South
Carolina
Fund		        Tennessee
Fund		        Virginia
Fund		        West
Virginia
Fund		  
Class A        $—           $299           $470           $2,798           $218           $6           $—           $1,407   
Class B        4,774           7,019           3,301           9,523           7,379           1,025           2,202           1,958   
Class C        N/A           2,597           809           N/A           N/A           N/A           1,439           N/A   

Shareholder Servicing Agent – MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from each fund for its services as shareholder servicing agent calculated as a percentage of the average daily net assets of each fund as determined periodically under the supervision of the funds’ Board of Trustees. For the year ended March 31, 2015, each fund paid the following fee, which equated to the following annual percentage of each fund’s average daily net assets:

 

      Mississippi
Fund		      New York
Fund		      North
Carolina
Fund		      Pennsylvania
Fund		      South
Carolina
Fund		      Tennessee
Fund		      Virginia
Fund		      West
Virginia
Fund		  
Expenses paid      $6,995         $23,164         $30,512         $18,809         $14,502         $8,070         $31,103         $10,413   
Percent of average daily net assets      0.0080%         0.0121%         0.0089%         0.0160%         0.0084%         0.0076%         0.0108%         0.0085%   

MFSC also receives payment from each fund for out-of-pocket expenses, sub-accounting and other shareholder servicing costs which may be paid to affiliated and unaffiliated service providers. For the year ended March 31, 2015, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to the following:

 

Mississippi
Fund		  

New York

Fund

  

North

Carolina

Fund

  

Pennsylvania

Fund

  

South

Carolina

Fund

  

Tennessee

Fund

  

Virginia

Fund

  

West

Virginia

Fund

$56,186   $104,579   $245,704   $82,155   $122,370   $80,444   $204,093   $90,730

Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to each fund. Under an administrative services agreement, each fund reimburses MFS the costs incurred to provide these services. Each fund is charged an annual fixed amount of $17,500 plus a fee based on average daily net assets. The administrative services fee incurred for the year ended March 31, 2015 was equivalent to an annual effective rate of each fund’s average daily net assets as follows:.

 

     

Mississippi

Fund

     

New York

Fund

     

North

Carolina

Fund

     

Pennsylvania

Fund

     

South

Carolina

Fund

     

Tennessee

Fund

      Virginia
Fund		     

West

Virginia

Fund

  
Percentage of average daily net assets      0.0262%         0.0200%         0.0176%         0.0233%         0.0205%         0.0242%         0.0182%         0.0230%   

Trustees’ and Officers’ Compensation – Each fund pays compensation to Independent Trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. Each fund does not pay compensation directly to Trustees or officers of each fund who are also officers of the investment adviser, all of whom receive remuneration for their services to each fund from MFS. Certain officers and Trustees of each fund are officers or directors of MFS, MFD, and MFSC.

Prior to December 31, 2001, each fund had an unfunded defined benefit plan (“DB plan”) for Independent Trustees. As of December 31, 2001, the Board took action to terminate the DB plan with respect to then-current and any future Independent Trustees, such that the DB plan covers only certain of those former Independent Trustees who retired on or before December 31, 2001. The DB plan resulted in a pension expense for each fund. These amounts are included in “Independent Trustees’ compensation” in the Statements of Operations for the year ended March 31, 2015 and were as follows:

 

Mississippi

Fund

  

New York

Fund

  

North

Carolina

Fund

  

Pennsylvania

Fund

  

South

Carolina

Fund

  

Tennessee

Fund

  

Virginia

Fund

  

West

Virginia

Fund

$155   $120   $611   $159   $593   $121   $611   $589

The liability for deferred retirement benefits payable to certain Independent Trustees under the DB plan amounted to the following at March 31, 2015, and is included in “Payable for Independent Trustees’ compensation” in the Statements of Assets and Liabilities:

 

Mississippi
Fund		   New York
Fund		  

North

Carolina

Fund

  

Pennsylvania

Fund

  

South

Carolina

Fund

  

Tennessee

Fund

  

Virginia

Fund

  

West

Virginia

Fund

$2,791   $3,665   $6,058   $2,766   $6,080   $3,643   $6,078   $6,077

Other – Effective November 1, 2014, these funds and certain other funds managed by MFS (the funds) have entered into a service agreement (the ISO Agreement) which provides for payment of fees solely by the funds to Tarantino LLC in return for the provision

 

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of services of an Independent Senior Officer (ISO) for the funds. Frank L. Tarantino serves as the ISO and is an officer of the funds and the sole member of Tarantino LLC. The funds can terminate the ISO Agreement with Tarantino LLC at any time under the terms of the ISO Agreement. Prior to November 1, 2014, the funds had entered into services agreements (the Compliance Officer Agreements) which provided for payment of fees by the funds to Tarantino LLC and Griffin Compliance LLC in return for the provision of services of an Independent Chief Compliance Officer (ICCO) and Assistant ICCO, respectively, for the funds. Prior to November 1, 2014, Frank L. Tarantino served as the ICCO. Effective October 31, 2014, Mr. Tarantino resigned as ICCO and the Compliance Officer Agreement between the funds and Tarantino LLC was terminated. Prior to June 1, 2014, Robyn L. Griffin served as the Assistant ICCO and was an officer of the funds. Ms. Griffin is the sole member of Griffin Compliance LLC. Effective May 31, 2014, Ms. Griffin resigned as Assistant ICCO and the Compliance Officer Agreement between the funds and Griffin Compliance LLC was terminated. For the year ended March 31, 2015, the aggregate fees paid by each fund under these agreements amounted to the following and are included in “Miscellaneous” expense in the Statements of Operations:

 

Mississippi
Fund		   New York
Fund		  

North

Carolina
Fund

   Pennsylvania
Fund		  

South

Carolina
Fund

   Tennessee
Fund		   Virginia
Fund		   West
Virginia
Fund
$372   $802   $1,441   $497   $729   $454   $1,220   $514

MFS had agreed to reimburse the funds for a portion of the payments made by each fund for the services under the Compliance Officer Agreements in the following amounts, which are included in the reduction of total expenses in the Statements of Operations. Additionally, MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO, Assistant ICCO, and ISO:

 

Mississippi
Fund		   New York
Fund		  

North

Carolina
Fund

   Pennsylvania
Fund		  

South

Carolina
Fund

   Tennessee
Fund		   Virginia
Fund		  

West

Virginia
Fund

$104   $225   $405   $140   $205   $128   $343   $144

Each fund invests in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks current income consistent with preservation of capital and liquidity. Income earned on this investment is included in “Dividends from underlying affiliated funds” in the Statements of Operations. This money market fund does not pay a management fee to MFS.

 

(4)   Portfolio Securities

For the year ended March 31, 2015, purchases and sales of investments, other than short-term obligations, were as follows:

 

      Mississippi
Fund		      New York
Fund		      North
Carolina
Fund		      Pennsylvania
Fund		      South
Carolina
Fund		      Tennessee
Fund		      Virginia
Fund		      West
Virginia
Fund		  
Purchases      $13,682,753         $45,886,196         $52,827,791         $26,621,946         $36,545,376         $18,598,477         $57,892,176         $28,435,347   
Sales      $15,379,192         $50,069,486         $62,469,636         $31,089,028         $40,558,085         $26,273,332         $68,187,406         $25,791,253   

 

(5)   Shares of Beneficial Interest

Each fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest. Transactions in fund shares were as follows:

 

    Mississippi Fund        New York Fund  
    Year ended
3/31/15		      Year ended
3/31/14		        Year ended
3/31/15		      Year ended
3/31/14		  
    Shares      Amount      Shares      Amount        Shares      Amount      Shares      Amount  
Shares sold                         

Class A

     525,714         $5,207,060         575,806         $5,658,252           916,124         $10,156,077         886,597         $9,575,536   

Class B

     10,896         107,799         8,716         84,582           26,353         289,253         47,536         516,424   

Class C

     —         —         —         —           273,083         3,021,582         195,403         2,118,296   
    536,610         $5,314,859         584,522         $5,742,834           1,215,560         $13,466,912         1,129,536         $12,210,256   
Shares issued to shareholders in
reinvestment of distributions		                         

Class A

     261,437         $2,591,092         343,903         $3,338,405           433,642         $4,819,979         471,435         $5,070,665   

Class B

     4,358         43,208         6,898         66,945           10,435         115,653         12,361         132,696   

Class C

     —         —         —         —           51,323         569,691         64,519         693,866   
    265,795         $2,634,300         350,801         $3,405,350           495,400         $5,505,323         548,315         $5,897,227   

 

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    Mississippi Fund – continued     New York Fund – continued  
    Year ended
3/31/15		     Year ended
3/31/14		     Year ended
3/31/15		     Year ended
3/31/14		  
    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount  
Shares reacquired                

Class A

     (1,036,538 )      $(10,265,541 )      (3,225,089 )      $(31,421,792 )      (1,167,388 )      $(12,947,890 )      (3,284,151 )      $(35,123,279 ) 

Class B

     (62,811 )      (620,253 )      (56,128 )      (540,149 )      (63,815 )      (705,878 )      (158,271 )      (1,697,378 ) 

Class C

     —        —        —        —        (349,619 )      (3,867,572 )      (1,180,041 )      (12,663,958 ) 
    (1,099,349 )      $(10,885,794 )      (3,281,217 )      $(31,961,941 )      (1,580,822 )      $(17,521,340 )      (4,622,463 )      $(49,484,615 ) 
Net change                

Class A

     (249,387 )      $(2,467,389 )      (2,305,380 )      $(22,425,135 )      182,378        $2,028,166        (1,926,119 )      $(20,477,078 ) 

Class B

     (47,557 )      (469,246 )      (40,514 )      (388,622 )      (27,027 )      (300,972 )      (98,374 )      (1,048,258 ) 

Class C

     —        —        —        —        (25,213 )      (276,299 )      (920,119 )      (9,851,796 ) 
    (296,944 )      $(2,936,635 )      (2,345,894 )      $(22,813,757 )      130,138        $1,450,895        (2,944,612 )      $(31,377,132 ) 
    North Carolina Fund     Pennsylvania Fund  
    Year ended
3/31/15		     Year ended
3/31/14		     Year ended
3/31/15		     Year ended
3/31/14		  
    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount  
Shares sold                

Class A

     2,507,177        $29,795,681        4,263,997        $49,668,448        891,353        $9,165,636        1,112,266        $11,349,810   

Class B

     20,575        245,270        9,396        109,323        8,888        92,225        47,744        477,545   

Class C

     517,870        6,159,618        339,546        4,050,516        —        —        —        —   
    3,045,622        $36,200,569        4,612,939        $53,828,287        900,241        $9,257,861        1,160,010        $11,827,355   
Shares issued to shareholders in reinvestment of distributions                

Class A

     660,252        $7,857,355        868,752        $10,078,524        314,957        $3,253,750        380,223        $3,800,493   

Class B

     9,839        116,891        15,432        178,660        15,673        162,296        22,144        222,035   

Class C

     102,808        1,222,358        152,744        1,769,562        —        —        —        —   
    772,899        $9,196,604        1,036,928        $12,026,746        330,630        $3,416,046        402,367        $4,022,528   
Shares reacquired                

Class A

     (3,798,057 )      $(45,099,821 )      (12,087,936 )      $(140,094,622 )      (1,691,552 )      $(17,407,723 )      (4,819,535 )      $(48,046,071 ) 

Class B

     (74,514 )      (881,247 )      (201,334 )      (2,333,806 )      (123,730 )      (1,278,872 )      (390,625 )      (3,887,824 ) 

Class C

     (811,218 )      (9,623,884 )      (2,664,955 )      (30,823,685 )      —        —        —        —   
    (4,683,789 )      $(55,604,952 )      (14,954,225 )      $(173,252,113 )      (1,815,282 )      $(18,686,595 )      (5,210,160 )      $(51,933,895 ) 
Net change                

Class A

     (630,628 )      $(7,446,785 )      (6,955,187 )      $(80,347,650 )      (485,242 )      $(4,988,337 )      (3,327,046 )      $(32,895,768 ) 

Class B

     (44,100 )      (519,086 )      (176,506 )      (2,045,823 )      (99,169 )      (1,024,351 )      (320,737 )      (3,188,244 ) 

Class C

     (190,540 )      (2,241,908 )      (2,172,665 )      (25,003,607 )      —        —        —        —   
    (865,268 )      $(10,207,779 )      (9,304,358 )      $(107,397,080 )      (584,411 )      $(6,012,688 )      (3,647,783 )      $(36,084,012 ) 
    South Carolina Fund     Tennessee Fund  
    Year ended
3/31/15		     Year ended
3/31/14		     Year ended
3/31/15		     Year ended
3/31/14		  
    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount  
Shares sold                

Class A

     1,530,675        $18,617,267        1,134,961        $13,565,974        884,042        $9,335,433        1,004,199        $10,475,503   

Class B

     214        2,601        19,670        239,208        22,150        235,111        12,313        131,482   
    1,530,889        $18,619,868        1,154,631        $13,805,182        906,192        $9,570,544        1,016,512        $10,606,985   
Shares issued to shareholders in
reinvestment of distributions		                

Class A

     369,839        $4,496,605        466,084        $5,517,503        255,709        $2,706,451        306,456        $3,160,087   

Class B

     8,697        105,628        13,030        154,200        3,614        38,226        4,624        47,634   
    378,536        $4,602,233        479,114        $5,671,703        259,323        $2,744,677        311,080        $3,207,721   

 

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    South Carolina Fund – continued     Tennessee Fund – continued  
    Year ended
3/31/15		     Year ended
3/31/14		     Year ended
3/31/15		     Year ended
3/31/14		  
    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount  

Shares reacquired

                

Class A

     (2,126,138 )      $(25,774,746 )      (4,941,166 )      $(58,277,211 )      (1,670,747 )      $(17,679,656 )      (3,390,425 )      $(34,817,044 ) 

Class B

     (66,951 )      (808,929 )      (185,895 )      (2,209,472 )      (31,792 )      (337,344 )      (81,470 )      (827,778 ) 
    (2,193,089 )      $(26,583,675 )      (5,127,061 )      $(60,486,683 )      (1,702,539 )      $(18,017,000 )      (3,471,895 )      $(35,644,822 ) 
Net change                

Class A

     (225,624 )      $(2,660,874 )      (3,340,121 )      $(39,193,734 )      (530,996 )      $(5,637,772 )      (2,079,770 )      $(21,181,454 ) 

Class B

     (58,040 )      (700,700 )      (153,195 )      (1,816,064 )      (6,028 )      (64,007 )      (64,533 )      (648,662 ) 
    (283,664 )      $(3,361,574 )      (3,493,316 )      $(41,009,798 )      (537,024 )      $(5,701,779 )      (2,144,303 )      $(21,830,116 ) 
    Virginia Fund     West Virginia Fund  
    Year ended
3/31/15		     Year ended
3/31/14		     Year ended
3/31/15		     Year ended
3/31/14		  
    Shares     Amount     Shares     Amount     Shares     Amount     Shares     Amount  
Shares sold                

Class A

     1,604,829        $18,186,586        4,042,736        $44,558,000        723,027        $8,136,413        371,723        $4,105,536   

Class B

     15,028        170,612        4,151        45,221        2,256        25,811        4,462        52,185   

Class C

     244,201        2,760,979        159,258        1,785,055        —        —        —        —   
    1,864,058        $21,118,177        4,206,145        $46,388,276        725,283        $8,162,224        376,185        $4,157,721   
Shares issued to shareholders in
reinvestment of distributions		                

Class A

     628,199        $7,137,437        744,828        $8,228,957        306,334        $3,449,550        377,576        $4,130,912   

Class B

     3,998        45,381        5,459        60,312        2,215        24,925        2,985        32,631   

Class C

     49,123        558,038        63,773        704,012        —        —        —        —   
    681,320        $7,740,856        814,060        $8,993,281        308,549        $3,474,475        380,561        $4,163,543   
Shares reacquired                

Class A

     (3,242,524 )      $(36,854,824 )      (10,176,045 )      $(112,159,693 )      (1,266,943 )      $(14,224,932 )      (2,990,501 )      $(32,492,522 ) 

Class B

     (51,329 )      (583,689 )      (102,606 )      (1,128,884 )      (16,098 )      (180,363 )      (52,396 )      (568,143 ) 

Class C

     (375,439 )      (4,235,401 )      (1,017,050 )      (11,179,930 )      —        —        —        —   
    (3,669,292 )      $(41,673,914 )      (11,295,701 )      $(124,468,507 )      (1,283,041 )      $(14,405,295 )      (3,042,897 )      $(33,060,665 ) 
Net change                

Class A

     (1,009,496 )      $(11,530,801 )      (5,388,481 )      $(59,372,736 )      (237,582 )      $(2,638,969 )      (2,241,202 )      $(24,256,074 ) 

Class B

     (32,303 )      (367,696 )      (92,996 )      (1,023,351 )      (11,627 )      (129,627 )      (44,949 )      (483,327 ) 

Class C

     (82,115 )      (916,384 )      (794,019 )      (8,690,863 )      —        —        —        —   
    (1,123,914 )      $(12,814,881 )      (6,275,496 )      $(69,086,950 )      (249,209 )      $(2,768,596 )      (2,286,151 )      $(24,739,401 ) 

 

(6)   Line of Credit

Each fund and certain other funds managed by MFS participate in a $1.25 billion unsecured committed line of credit, subject to a $1 billion sublimit, provided by a syndication of banks under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the higher of the Federal Reserve funds rate or one month LIBOR plus an agreed upon spread. A commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds at the end of each calendar quarter. In addition, each fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at a rate equal to the Federal Reserve funds rate plus an agreed upon spread. For the year ended March 31, 2015, each fund’s commitment fee and interest expense were as follows and are included in “Miscellaneous” expense in the Statements of Operations:

 

     Mississippi
Fund		      New York
Fund		      North
Carolina
Fund		      Pennsylvania
Fund		      South
Carolina
Fund		      Tennessee
Fund		      Virginia
Fund		      West
Virginia
Fund		  
Commitment Fee      $305         $660         $1,183         $410         $598         $376         $1,000         $417   
Interest Expense      —         —         —         —         —         —         —         —   

 

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(7)   Transactions in Underlying Affiliated Funds - Affiliated Issuers

An affiliated issuer of a fund may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, each fund assumes the MFS Institutional Money Market Portfolio to be an affiliated issuer. Each fund’s transactions in the MFS Institutional Money Market Portfolio for the year ended March 31, 2015, are as follows:

 

     Underlying Affiliated Fund - MFS Institutional Money Market Portfolio  
     Beginning
Shares/Par
Amount		      Acquisitions
Shares/Par
Amount		      Dispositions
Shares/Par
Amount		      Ending
Shares/Par
Amount		  
Mississippi Fund      1,231,523         18,244,184         (19,083,056)         392,651   
New York Fund      2,613,642         56,567,987         (47,825,460)         11,356,169   
North Carolina Fund      435,865         69,695,755         (62,634,961)         7,496,659   
Pennsylvania Fund      3,151,391         32,634,891         (34,049,740)         1,736,542   
South Carolina Fund      2,792,200         48,253,124         (42,396,506)         8,648,818   
Tennessee Fund      1,662,126         29,320,335         (27,672,147)         3,310,314   
Virginia Fund      3,097,091         60,315,877         (60,527,110)         2,885,858   
West Virginia Fund      99         30,415,547         (26,792,284)         3,623,362   
     Realized
Gain
(Loss)		      Capital Gain
Distributions		      Dividend
Income		      Ending
Value		  
Mississippi Fund      $—         $—         $926         $392,651   
New York Fund      —         —         2,836         11,356,169   
North Carolina Fund      —         —         3,299         7,496,659   
Pennsylvania Fund      —         —         2,020         1,736,542   
South Carolina Fund      —         —         2,892         8,648,818   
Tennessee Fund      —         —         1,423         3,310,314   
Virginia Fund      —         —         2,759         2,885,858   
West Virginia Fund      —         —         1,501         3,623,362   

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees of MFS Municipal Series Trust and the Shareholders of MFS Mississippi Municipal Bond Fund, MFS New York Municipal Bond Fund, MFS North Carolina Municipal Bond Fund, MFS Pennsylvania Municipal Bond Fund, MFS South Carolina Municipal Bond Fund, MFS Tennessee Municipal Bond Fund, MFS Virginia Municipal Bond Fund and MFS West Virginia Municipal Bond Fund:

We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of MFS Mississippi Municipal Bond Fund, MFS New York Municipal Bond Fund, MFS North Carolina Municipal Bond Fund, MFS Pennsylvania Municipal Bond Fund, MFS South Carolina Municipal Bond Fund, MFS Tennessee Municipal Bond Fund, MFS Virginia Municipal Bond Fund and MFS West Virginia Municipal Bond Fund (each a series of MFS Municipal Series Trust) (the “Funds”) as of March 31, 2015, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2015, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds as of March 31, 2015, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Boston, Massachusetts

May 13, 2015

 

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TRUSTEES AND OFFICERS — IDENTIFICATION AND BACKGROUND

The Trustees and Officers of the Trust, as of May 1, 2015, are listed below, together with their principal occupations during the past five years. (Their titles may have varied during that period.) The address of each Trustee and Officer is 111 Huntington Avenue, Boston, Massachusetts 02199-7618.

 

Name, Age

  

Position(s) Held

with Fund

   

Trustee/Officer

Since (h)

   

Principal Occupations

During

the Past Five Years

   

Other Directorships (j)

INTERESTED TRUSTEES

Robert J. Manning (k)

(age 51)

   Trustee    February 2004    Massachusetts Financial Services Company, Chairman, Co-Chief Executive Officer and Director; Chief Investment Officer (until 2010)    N/A

Robin A. Stelmach (k)

(age 53)

   Trustee and President    January 2014    Massachusetts Financial Services Company, Executive Vice President and Chief Operating Officer    N/A
INDEPENDENT TRUSTEES

David H. Gunning

(age 72)

   Trustee and Chair of Trustees    January 2004    Private investor    Lincoln Electric Holdings, Inc. (welding equipment manufacturer), Director; Development Alternatives, Inc. (consulting), Director/Non-Executive Chairman

Steven E. Buller

(age 63)

   Trustee    February 2014    Chairman, Financial Accounting Standards Advisory Council; Standing Advisory Group, Public Company Accounting Oversight Board, Member (until 2014); BlackRock, Inc. (investment management), Managing Director (until 2014), BlackRock Finco UK (investment management), Director (until 2014)    N/A

Robert E. Butler

(age 73)

   Trustee    January 2006    Consultant – investment company industry regulatory and compliance matters    N/A

Maureen R. Goldfarb

(age 60)

   Trustee    January 2009    Private investor    N/A

William R. Gutow

(age 73)

   Trustee    December 1993    Private investor and real estate consultant; Capitol Entertainment Management Company (video franchise), Vice Chairman    Texas Donuts (donut franchise), Vice Chairman (until 2010)

Michael Hegarty

(age 70)

   Trustee    December 2004    Private investor    Rouse Properties Inc. (real estate), Director; Capmark Financial Group Inc. (real estate), Director

John P. Kavanaugh

(age 60)

   Trustee    January 2009    Private investor    N/A

Maryanne L. Roepke

(age 59)

   Trustee    May 2014    American Century Investments (investment management), Senior Vice President and Chief Compliance Officer (until 2014)    N/A

Laurie J. Thomsen

(age 57)

   Trustee    March 2005    Private investor; New Profit, Inc. (venture philanthropy), Executive Partner (until 2010)    The Travelers Companies (insurance), Director

Robert W. Uek

(age 73)

   Trustee    January 2006    Consultant to investment company industry    N/A
OFFICERS

Christopher R. Bohane (k)

(age 41)

   Assistant Secretary and Assistant Clerk    July 2005    Massachusetts Financial Services Company, Vice President and Assistant General Counsel    N/A

Kino Clark (k)

(age 46)

   Assistant Treasurer    January 2012    Massachusetts Financial Services Company, Vice President    N/A

 

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Trustees and Officers – continued

 

Name, Age

  

Position(s) Held

with Fund

   

Trustee/Officer

Since (h)

   

Principal Occupations

During

the Past Five Years

   

Other Directorships (j)

Thomas H. Connors (k)

(age 55)

   Assistant Secretary and Assistant Clerk    September 2012    Massachusetts Financial Services Company, Vice President and Senior Counsel; Deutsche Investment Management Americas Inc. (financial service provider), Director and Senior Counsel (until 2012)    N/A

Ethan D. Corey (k)

(age 51)

   Assistant Secretary and Assistant Clerk    July 2005    Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel    N/A

David L. DiLorenzo (k)

(age 46)

   Treasurer    July 2005    Massachusetts Financial Services Company, Senior Vice President    N/A

Timothy M. Fagan (k)

(age 46)

   Chief Compliance Officer    November 2014    Massachusetts Financial Services Company, Chief Compliance Officer; Vice President and Senior Counsel (until 2012)    N/A

Brian E. Langenfeld (k)

(age 42)

   Assistant Secretary and Assistant Clerk    June 2006    Massachusetts Financial Services Company, Vice President and Senior Counsel    N/A

Susan S. Newton (k)

(age 65)

   Assistant Secretary and Assistant Clerk    May 2005    Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel    N/A

Kenneth Paek (k)

(age 40)

   Assistant Treasurer    February 2015    Massachusetts Financial Services Company, Vice President; Cohen & Steers, Vice President/Head of Fund Administration (until 2014)    N/A

Susan A. Pereira (k)

(age 44)

   Assistant Secretary and Assistant Clerk    July 2005    Massachusetts Financial Services Company, Vice President and Senior Counsel    N/A

Kasey L. Phillips (k)

(age 44)

   Assistant Treasurer    September 2012    Massachusetts Financial Services Company, Vice President; Wells Fargo Funds Management, LLC, Senior Vice President, Fund Treasurer (until 2012)    N/A

Mark N. Polebaum (k)

(age 62)

   Secretary and Clerk    January 2006    Massachusetts Financial Services Company, Executive Vice President, General Counsel and Secretary    N/A

Matthew A. Stowe (k)

(age 40)

   Assistant Secretary and Assistant Clerk    October 2014    Massachusetts Financial Services Company, Vice President and Assistant General Counsel    N/A

Frank L. Tarantino

(age 71)

   Independent Senior Officer    June 2004    Tarantino LLC (provider of compliance services), Principal    N/A

Richard S. Weitzel (k)

(age 44)

   Assistant Secretary and Assistant Clerk    October 2007    Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel    N/A

James O. Yost (k)

(age 54)

   Deputy Treasurer    September 1990    Massachusetts Financial Services Company, Senior Vice President    N/A

 

(h) Date first appointed to serve as Trustee/officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. For the period from December 15, 2004 until February 22, 2005, Mr. Manning served as Advisory Trustee. Prior to January 2012, Messrs. DiLorenzo and Yost served as Assistant Treasurers of the Funds. Ms. Stelmach was appointed as President of the Funds as of October 1, 2014.
(j) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).
(k) “Interested person” of the Trust within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act), which is the principal federal law governing investment companies like the fund, as a result of a position with MFS. The address of MFS is 111 Huntington Avenue, Boston, Massachusetts 02199-7618.

Each Trustee (except Ms. Stelmach, Mr. Buller and Ms. Roepke) has been elected by shareholders and each Trustee and officer holds office until his or her successor is chosen and qualified or until his or her earlier death, resignation, retirement or removal. The Trust does not hold annual meetings for the purpose of electing Trustees, and Trustees are not elected for fixed terms. Messrs. Butler, Kavanaugh, Uek and Mses. Thomsen and Roepke are members of the Trust’s Audit Committee.

 

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Trustees and Officers – continued

 

Each of the Fund’s Trustees and officers holds comparable positions with certain other funds of which MFS or a subsidiary is the investment adviser or distributor, and, in the case of the officers, with certain affiliates of MFS. As of May 1, 2015, the Trustees served as board members of 132 funds within the MFS Family of Funds.

The Statement of Additional Information for a Fund includes further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.

 

 

Investment Adviser

Massachusetts Financial Services Company

111 Huntington Avenue

Boston, MA 02199-7618

Distributor

MFS Fund Distributors, Inc.

111 Huntington Avenue

Boston, MA 02199-7618

Portfolio Manager

Michael Dawson

  

Custodian

JPMorgan Chase Bank, NA

4 Metrotech Center

New York, NY 11245

 

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

200 Berkeley Street

Boston, MA 02116

 

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PROXY VOTING POLICIES AND INFORMATION

MFS votes proxies on behalf of the funds pursuant to proxy voting policies and procedures that are available without charge, upon request, by calling 1-800-225-2606, by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.

Information regarding how each fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.

QUARTERLY PORTFOLIO DISCLOSURE

Each fund will file a complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. A shareholder can obtain the quarterly portfolio holdings report at mfs.com. Each fund’s Form N-Q is also available on the EDGAR database on the Commission’s Internet Web site at http://www.sec.gov, and may be reviewed and copied at the:

Public Reference Room

Securities and Exchange Commission

100 F Street, NE, Room 1580

Washington, D.C. 20549

Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. Copies of each fund’s Form N-Q also may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section at the above address.

FURTHER INFORMATION

From time to time, MFS may post important information about each fund or the MFS funds on the MFS web site (mfs.com). This information is available by visiting the “Market Commentary” and “Announcements” sub sections in the “Market Outlooks” section of mfs.com or by clicking on the fund’s name under “Mutual Funds” in the “Products” section of mfs.com.

FEDERAL TAX INFORMATION (unaudited)

The funds will notify shareholders of amounts for use in preparing 2015 income tax forms in January 2016. The following information is provided pursuant to provisions of the Internal Revenue Code.

Of the dividends paid from net investment income during the fiscal year, the following percentages were designated as exempt interest dividends for federal income tax purposes. If each fund has earned income on private activity bonds, a portion of the dividends paid may be considered a tax preference item for purposes of computing a shareholder’s alternative minimum tax.

 

     Exempt Interest
Dividends		  
Mississippi Fund      100.00%   
New York Fund      100.00%   
North Carolina Fund      100.00%   
Pennsylvania Fund      100.00%   
South Carolina Fund      99.09%   
Tennessee Fund      99.63%   
Virginia Fund      98.62%   
West Virginia Fund      100.00%   

 

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rev. 3/11

 

FACTS

 

WHAT DOES MFS DO WITH YOUR
PERSONAL INFORMATION?

 

 LOGO

 

Why? Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

 

What?

The types of personal information we collect and share depend on the product or service you have with us. This information can include:

 

•  Social Security number and account balances

•  Account transactions and transaction history

•  Checking account information and wire transfer instructions

 

When you are no longer our customer, we continue to share your information as described in this notice.

 

How? All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons MFS chooses to share; and whether you can limit this sharing.

 

Reasons we can share your
personal information		 Does MFS share? Can you limit this
sharing?

For our everyday business purposes –

such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus

 Yes No

For our marketing purposes –

to offer our products and services to you

 No We don’t share
For joint marketing with other financial companies No We don’t share

For our affiliates’ everyday business purposes –

information about your transactions and experiences

 No We don’t share

For our affiliates’ everyday business purposes –

information about your creditworthiness

 No We don’t share
For nonaffiliates to market to you No We don’t share

 

Questions? Call 800-225-2606 or go to mfs.com.

 

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Page 2

 

Who we are
Who is providing this notice? MFS Funds, MFS Investment Management, MFS Institutional Advisors, Inc., MFS Fund Distributors, Inc., MFS Heritage Trust Company, and MFS Service Center, Inc.

 

What we do
How does MFS protect my personal information? To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include procedural, electronic, and physical safeguards for the protection of the personal information we collect about you.
How does MFS
collect my personal information?

We collect your personal information, for example, when you

 

•  open an account or provide account information

•  direct us to buy securities or direct us to sell your securities

•  make a wire transfer

 

We also collect your personal information from others, such as credit bureaus, affiliates and other companies.

Why can’t I limit all sharing?

Federal law gives you the right to limit only

 

•  sharing for affiliates’ everyday business purposes – information about your creditworthiness

•  affiliates from using your information to market to you

•  sharing for nonaffiliates to market to you

 

State laws and individual companies may give you additional rights to limit sharing.

 

Definitions
Affiliates

Companies related by common ownership or control. They can be financial and nonfinancial companies.

 

• MFS does not share personal information with affiliates, except for everyday business purposes as described on page one of this notice.

Nonaffiliates

Companies not related by common ownership or control. They can be financial and nonfinancial companies.

 

• MFS does not share with nonaffiliates so they can market to you.

Joint Marketing

A formal agreement between nonaffiliated financial companies that together market financial products or services to you.

 

• MFS doesn’t jointly market.

 

 

Other important information
If you own an MFS product or receive an MFS service in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

 

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LOGO

 

Save paper with eDelivery.

 

 

LOGO  

MFS® will send you prospectuses,

reports, and proxies directly via e-mail so you will get information faster with less mailbox clutter.

To sign up:

1. Go to mfs.com.

2. Log in via MFS® Access.

3. Select eDelivery.

If you own your MFS fund shares through a financial institution or a retirement plan, MFS® TALK, MFS® Access, or eDelivery may not be available to you.

 

 

CONTACT US

WEB SITE

mfs.com

MFS TALK

1-800-637-8255

24 hours a day

ACCOUNT SERVICE AND LITERATURE

Shareholders

1-800-225-2606

Financial advisors

1-800-343-2829

Retirement plan services

1-800-637-1255

MAILING ADDRESS

MFS Service Center, Inc.

P.O. Box 55824

Boston, MA 02205-5824

OVERNIGHT MAIL

MFS Service Center, Inc.

c/o Boston Financial Data Services

30 Dan Road

Canton, MA 02021-2809

 

Table of Contents

ANNUAL REPORT

March 31, 2015

 

LOGO

 

MFS® MUNICIPAL INCOME FUND

 

LOGO

 

LMB-ANN

 

Table of Contents

MFS® MUNICIPAL INCOME FUND

 

CONTENTS

 

Letter from the Chairman     1   
Portfolio composition     2   
Management review     4   
Performance summary     7   
Expense table     10   
Portfolio of investments     12   
Statement of assets and liabilities     52   
Statement of operations     53   
Statements of changes in net assets     54   
Financial highlights     55   
Notes to financial statements     61   
Report of independent registered public accounting firm     74   
Trustees and officers     75   
Proxy voting policies and information     80   
Quarterly portfolio disclosure     80   
Further information     80   
Federal tax information     80   
MFS® privacy notice     81   
Contact information    back cover   

 

 

The report is prepared for the general information of shareholders.

It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.

 

NOT FDIC INSURED Ÿ MAY LOSE VALUE Ÿ NO BANK GUARANTEE

Table of Contents

LOGO

 

LETTER FROM THE CHAIRMAN

 

Dear Shareholders:

The global economy was in flux early in 2015. Despite a steadily improving labor market, harsh winter weather held back U.S. economic activity. A stronger U.S. dollar

has also curtailed export demand and weakened the profits of U.S.-based multinationals.

In the wake of the launch of the European Central Bank’s quantitative easing program and the euro’s sharp decline, the eurozone economy is showing signs of recovery.

In Asia, China and Japan continue to struggle. Chinese manufacturing activity has weakened, and the People’s Bank of China is attempting to ward off further economic slowing through targeted action. Japan’s economy is at risk of sliding back after making initial progress towards its growth and inflation goals.

As always, active risk management is integral to how we at MFS® manage your investments. We use a collaborative process, sharing insights across asset classes, regions and economic sectors. Our global investment team uses a diversified, multidisciplinary, long-term approach.

Applying proven principles, such as asset allocation and diversification, can best serve investors over the long term. We are confident that this approach can help you as you work with your financial advisors to reach your goals in the years ahead.

Respectfully,

 

LOGO

Robert J. Manning

Chairman

MFS Investment Management

May 13, 2015

The opinions expressed in this letter are subject to change and may not be relied upon for investment advice. No forecasts can be guaranteed.

 

1

Table of Contents

PORTFOLIO COMPOSITION

 

Portfolio structure (i)

 

LOGO

 

Top ten industries (i)  
Healthcare Revenue – Hospitals     14.7%   
General Obligations – General Purpose     9.8%   
Universities – Colleges     7.7%   
Water & Sewer Utility Revenue     7.0%   
Utilities – Municipal Owned     4.9%   
State & Local Agencies     4.8%   
Healthcare Revenue – Long Term Care     4.5%   
Tobacco     3.5%   
Airport Revenue     3.5%   
Miscellaneous Revenue – Other     3.3%   
Composition including fixed income credit quality (a)(i)    
AAA     6.7%   
AA     28.9%   
A     34.3%   
BBB     17.4%   
BB     3.0%   
B     3.4%   
CCC     0.2%   
C     0.1%   
Not Rated     4.7%   
Cash & Other     1.3%   
Portfolio facts (i)  
Average Duration (d)     6.7   
Average Effective Maturity (m)     16.0 yrs.   
 
(a) For all securities other than those specifically described below, ratings are assigned to underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating agencies and applying the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated BBB or higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities, including fixed income futures contracts, which have not been rated by any rating agency. The fund may not hold all of these instruments. The fund is not rated by these agencies.
(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value due to the interest rate move.
(i) For purposes of this presentation, the components include the value of securities, and reflect the impact of the equivalent exposure of derivative positions, if any. These amounts may be negative from time to time. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than value. The bond component will include any accrued interest amounts.

 

2

Table of Contents

Portfolio Composition – continued

 

(m) In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.

Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

Cash & Other can include cash, other assets less liabilities, offsets to derivative positions, and short-term securities.

Percentages are based on net assets as of 3/31/15.

The portfolio is actively managed and current holdings may be different.

 

3

Table of Contents

MANAGEMENT REVIEW

Summary of Results

For the twelve months ended March 31, 2015, Class A shares of the MFS Municipal Income Fund (“fund”) provided a total return of 8.02%, at net asset value. This compares with a return of 6.62% for the fund’s benchmark, the Barclays Municipal Bond Index.

Market Environment

A generally risk-friendly environment persisted from early in the period until mid-2014. While geopolitical tensions flared in the Middle East and Russia/Ukraine, any market setbacks were short-lived as improving economic growth in the US, coupled with prospects for easier monetary policy in regions with slowing growth, such as Japan, Europe and China, supported risk assets. For example, the European Central Bank (“ECB”) cut policy interest rates into negative territory and expectations were high for additional rate cuts and the announcement for non-conventional easing measures. Similarly, toward the middle of the period the Bank of Japan surprised markets with fresh stimulus measures given lackluster growth trends. The related decline in developed market government bond yields and credit spreads were also supportive for equity markets.

A dominant trend in the second half of the period was the ongoing rise in US equities alongside a decline in US bond yields. The uptrend in US corporate margins and profits continued throughout the second half of 2014, but a rising dollar and a sharp decline in commodity prices, particularly crude oil prices, negatively impacted credit markets, particularly US high yield and emerging market debt. The higher weightings of oil and gas credits in these asset classes resulted in widening spreads and increased volatility. Toward the end of the period, declining inflation and inflation expectations caused a mini-wave of global easing highlighted by the ECB’s decision to commence a potentially open-ended phase of quantitative easing (“QE”), supporting risk assets as well as government bond prices, while the US dollar continues to benefit from the perception that Federal Reserve (“Fed”) tightening was likely to occur later in 2015.

Municipal bonds generally produced solid results for the year ended March 31, 2015. Most forecasters had expected that US Treasury yields would rise during the period as the Fed wound down QE and prepared to tighten monetary policy, and that this would prove to be a headwind for municipal bond performance. Instead, longer Treasury yields fell sharply, while shorter maturities rose slightly. Many factors contributed to this surprising turn of events. Despite a weak reading at the end of the period, the US labor market made solid progress through most of the period, adding an average of 260,000 new jobs per month. Strong job gains failed to translate into markedly higher wages or inflationary pressures that could push the Fed to adopt a more aggressive stance on hiking rates. Slowing growth outside the US and disinflationary developments around the world – including a precipitous drop in oil prices–caused the market to push out its timetable for the first Fed Funds rate hike, as did disappointingly weak US economic activity during the first quarter of 2015. Moreover, softness in the US economy toward the end of the period led to increased dovishness from the Fed, as evidenced by downgraded forecasts for the Fed Funds rate, GDP growth, and inflation.

 

4

Table of Contents

Management Review – continued

 

Finally, favorable technical conditions kept downward pressure on Treasury yields. Lower Treasury yields not only allayed investors’ fears of higher interest rates, but also helped drive municipal bond returns.

Continued optimism about the health of the US economy, combined with a comparative dearth of new high-profile, headline-grabbing stories about troubled issuers kept investors relatively constructive on asset class fundamentals. Puerto Rico remained a source of worry, however. As the period ended, the risk that funding needs might not be met remained a threat, even with the Commonwealth’s efforts to bolster tax revenues. Detroit’s bankruptcy proceedings came to a close during the period with both pensioners and bondholders impaired, reinforcing concerns about the priority assigned to general obligation debt. In addition, a court ruling overturned legislation aimed at reforming Illinois’ underfunded public employee pension system, highlighting the challenges ahead as municipalities continue to grapple with the issue of unfunded pension liabilities. Nowhere did these challenges appear more acute than in Chicago, where burgeoning budget deficits attracted increased market and rating agency attention. This demonstrates the market is differentiating between those issuers who have taken steps toward fiscal sustainability and those with ongoing budget and pension challenges. While we expect to see continued headlines for select municipalities, on balance, municipal credit fundamentals improved over the period as state and local tax receipts benefited from a fifth year of economic expansion.

The period was marked by steady and moderate inflows to municipal bond funds as generally good performance attracted investors. New issuance surged in the first quarter of 2015. This large increase in supply, along with lower Treasury rates, caused high-quality municipals to underperform comparable maturity Treasuries as the period ended. Stable spreads in municipal credit enabled higher-yielding bonds to outperform higher-quality debt. The Treasury rally allowed longer-maturity bonds to solidly outperform shorter maturities. At the end of the period, municipal bonds appeared fairly valued to relatively inexpensive versus Treasuries, but yields remained quite low versus historical levels.

Factors affecting performance

A key factor that contributed to performance relative to the Barclays Municipal Bond Index was the fund’s longer duration (d) stance. Additionally, strong bond selection in health and education sectors, as well as fund’s positive selection within “A” and “BBB” rated securities (r) also supported relative performance.

Respectfully,

 

Geoffrey Schechter

Portfolio Manager

 

(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.
(r)

Bonds rated “BBB”, “Baa”, or higher are considered investment grade; bonds rated “BB”, “Ba”, or below are considered non-investment grade. The sources for bond quality ratings are Moody’s Investors Service, Standard & Poor’s and Fitch, Inc. and are applied using the following hierarchy: If all three agencies provide a rating, the middle rating (after dropping the

 

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Management Review – continued

 

  highest and lowest ratings) is assigned; if two of the three agencies rate a security, the lower of the two is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). For securities which are not rated by any of the three agencies, the security is considered Not Rated.

The views expressed in this report are those of the portfolio manager only through the end of the period of the report as stated on the cover and do not necessarily reflect the views of MFS or any other person in the MFS organization. These views are subject to change at any time based on market or other conditions, and MFS disclaims any responsibility to update such views. These views may not be relied upon as investment advice or an indication of trading intent on behalf of any MFS portfolio. References to specific securities are not recommendations of such securities, and may not be representative of any MFS portfolio’s current or future investments.

 

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PERFORMANCE SUMMARY THROUGH 3/31/15

The following chart illustrates a representative class of the fund’s historical performance in comparison to its benchmark(s). Performance results include the deduction of the maximum applicable sales charge and reflect the percentage change in net asset value, including reinvestment of dividends and capital gains distributions. The performance of other share classes will be greater than or less than that of the class depicted below. Benchmarks are unmanaged and may not be invested in directly. Benchmark returns do not reflect sales charges, commissions or expenses. (See Notes to Performance Summary.)

Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value fluctuate so your shares, when sold, may be worth more or less than the original cost; current performance may be lower or higher than quoted. The performance shown does not reflect the deduction of taxes, if any, that a shareholder would pay on fund distributions or the redemption of fund shares.

Growth of a Hypothetical $10,000 Investment

 

LOGO

 

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Performance Summary – continued

 

Total Returns through 3/31/15

Average annual without sales charge

 

     Share Class    Class Inception Date    1-yr    5-yr    10-yr    Life (t)     
    A    9/07/93    8.02%    5.43%    4.89%    N/A    
    B    12/29/86    7.21%    4.61%    4.11%    N/A    
    C    1/03/94    7.19%    4.62%    4.10%    N/A    
    I    8/01/11    8.30%    N/A    N/A    6.16%    
    A1    6/25/07    8.16%    5.66%    N/A    5.49%    
    B1    6/25/07    7.46%    4.87%    N/A    4.69%    
Comparative benchmark                        
     Barclays Municipal Bond Index (f)    6.62%    5.11%    4.85%    N/A     
Average annual with sales charge                        
    A

With initial Sales Charge (4.25%)

    3.43%    4.51%    4.44%    N/A    
    B

With CDSC (Declining over six years from 4% to 0%) (v)

    3.21%    4.27%    4.11%    N/A    
    C

With CDSC (1% for 12 months) (v)

    6.19%    4.62%    4.10%    N/A    
    A1

With initial Sales Charge (4.25%)

    3.56%    4.75%    N/A    4.90%    
    B1

With CDSC (Declining over six years from 4% to 0%) (v)

    3.46%    4.53%    N/A    4.69%    

CDSC – Contingent Deferred Sales Charge.

Class I shares do not have a sales charge.

(f) Source: FactSet Research Systems Inc.
(t) For the period from the class inception date through the stated period end (for those share classes with less than 10 years of performance history). No comparative benchmark performance information is provided for “life” periods. (See Notes to Performance Summary.)
(v) Assuming redemption at the end of the applicable period.

Benchmark Definition

Barclays Municipal Bond Index – a market capitalization-weighted index that measures the performance of the tax-exempt bond market.

It is not possible to invest directly in an index.

Notes to Performance Summary

Average annual total return represents the average annual change in value for each share class for the periods presented. Life returns are presented where the share class has less than 10 years of performance history and represent the average annual total return from the class inception date to the stated period end date. As the fund’s share

 

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classes may have different inception dates, the life returns may represent different time periods and may not be comparable. As a result, no comparative benchmark performance information is provided for life periods.

Performance results reflect any applicable expense subsidies and waivers in effect during the periods shown. Without such subsidies and waivers the fund’s performance results would be less favorable. Please see the prospectus and financial statements for complete details.

Performance results do not include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles and may differ from amounts reported in the financial highlights.

A portion of income may be subject to state, federal, and/or alternative minimum tax. Capital gains, if any, are subject to a capital gains tax.

From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.

 

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EXPENSE TABLE

Fund expenses borne by the shareholders during the period, October 1, 2014 through March 31, 2015

As a shareholder of the fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on certain purchase or redemption payments, and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you 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.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period October 1, 2014 through March 31, 2015.

Actual Expenses

The first line for each share class in the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid 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 line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each share class in the following table 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. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and 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.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line for each share class in 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 transactional costs were included, your costs would have been higher.

 

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Expense Table – continued

 

 

Share
Class		        Annualized
Expense
Ratio		     Beginning
Account Value
10/01/14		     Ending
Account Value
3/31/15		     Expenses
Paid During
Period (p)
10/01/14-3/31/15		  
A   Actual     0.74%        $1,000.00        $1,027.64        $3.74   
  Hypothetical (h)     0.74%        $1,000.00        $1,021.24        $3.73   
B   Actual     1.49%        $1,000.00        $1,023.79        $7.52   
  Hypothetical (h)     1.49%        $1,000.00        $1,017.50        $7.49   
C   Actual     1.49%        $1,000.00        $1,023.71        $7.52   
  Hypothetical (h)     1.49%        $1,000.00        $1,017.50        $7.49   
I   Actual     0.49%        $1,000.00        $1,028.93        $2.48   
  Hypothetical (h)     0.49%        $1,000.00        $1,022.49        $2.47   
A1   Actual     0.49%        $1,000.00        $1,028.91        $2.48   
  Hypothetical (h)     0.49%        $1,000.00        $1,022.49        $2.47   
B1   Actual     1.26%        $1,000.00        $1,025.00        $6.36   
  Hypothetical (h)     1.26%        $1,000.00        $1,018.65        $6.34   

 

(h) 5% class return per year before expenses.
(p) “Expenses Paid During Period” are equal to each class’s annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher.

Notes to Expense Table

Expense ratios include 0.01% of investment related expenses from inverse floaters that are outside of the expense limitation arrangement (See Notes 2 and 3 of the Notes to Financial Statements).

 

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PORTFOLIO OF INVESTMENTS

3/31/15

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by jurisdiction.

 

Municipal Bonds - 97.5%                 
Issuer    Shares/Par     Value ($)  
    
Alabama - 0.7%                 
Cullman County, AL, Health Care Authority (Cullman Regional Medical Center), “A”, 6.75%, 2/01/29    $ 3,550,000      $ 3,883,820   
Cullman, AL, Utilities Board Water Rev., “A”, AGM, 5%, 9/01/35      2,675,000        3,045,086   
Jefferson County, AL, Sewer Rev. Warrants, Capital Appreciation, Senior Lien, “B”, 0%, 10/01/25      95,000        60,338   
Jefferson County, AL, Sewer Rev. Warrants, Capital Appreciation, Senior Lien, “B”, AGM, 0%, 10/01/26      1,175,000        710,711   
Jefferson County, AL, Sewer Rev. Warrants, Capital Appreciation, Senior Lien, “B”, AGM, 0%, 10/01/29      1,655,000        814,723   
Jefferson County, AL, Sewer Rev. Warrants, Capital Appreciation, Senior Lien, “B”, AGM, 0%, 10/01/34      2,370,000        810,493   
Jefferson County, AL, Sewer Rev. Warrants, Capital Appreciation, Senior Lien, “B”, AGM, 0%, 10/01/35      4,495,000        1,440,198   
Jefferson County, AL, Sewer Rev. Warrants, Subordinate Lien, “D”, 5%, 10/01/15      85,000        86,748   
Jefferson County, AL, Sewer Rev. Warrants, Subordinate Lien, “D”, 5%, 10/01/16      185,000        195,647   
Jefferson County, AL, Sewer Rev. Warrants, Subordinate Lien, “D”, 5%, 10/01/17      250,000        271,328   
Jefferson County, AL, Sewer Rev. Warrants, Subordinate Lien, “D”, 5%, 10/01/18      265,000        293,546   
Jefferson County, AL, Sewer Rev. Warrants, Subordinate Lien, “D”, 5%, 10/01/21      295,000        332,952   
Jefferson County, AL, Sewer Rev. Warrants, Subordinate Lien, “D”, 5%, 10/01/23      435,000        492,733   
Selma, AL, Industrial Development Board Rev., Gulf Opportunity Zone (International Paper Co.), “A”, 5.8%, 5/01/34      3,565,000        4,110,730   
    

 

 

  
             $ 16,549,053   
Arizona - 1.0%                 
Maricopa County, AZ, Pollution Control Rev. (El Paso Electric), “B”, 7.25%, 4/01/40    $ 1,710,000      $ 2,006,155   
Navajo County, AZ, Pollution Control Corp. Rev. (Arizona Public Service Co.), “A”, 0.45%, 6/01/34 (Put Date 11/17/15)      1,900,000        1,899,867   
Phoenix, AZ, Industrial Development Authority Education Rev. (Basis Schools, Inc. Projects), “A”, 5%, 7/01/35      470,000        482,488   
Phoenix, AZ, Industrial Development Authority Education Rev. (Basis Schools, Inc. Projects), “A”, 5%, 7/01/45      570,000        574,965   
Salt River, AZ, Project Agricultural Improvement & Power District Electric, “A”, 5%, 12/01/28      13,500,000        15,958,620   

 

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Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Arizona - continued                 
Yavapai County, AZ, Industrial Development Authority Rev. (Waste Management, Inc.), “A-2”, 1.6%, 3/01/28 (Put Date 3/01/18)    $ 1,595,000      $ 1,593,373   
    

 

 

  
             $ 22,515,468   
Arkansas - 1.0%                 
Arkansas Development Finance Authority Hospital Rev. (Washington Regional Medical Center), “A”, 5%, 2/01/35    $ 435,000      $ 485,799   
Arkansas Development Finance Authority Hospital Rev. (Washington Regional Medical Center), “C”, 5%, 2/01/33      640,000        719,258   
Arkansas Development Finance Authority Hospital Rev. (Washington Regional Medical Center), “C”, 5%, 2/01/35      530,000        591,893   
Arkansas Development Finance Authority, Tobacco Settlement Rev. (Cancer Research Center Project), Capital Appreciation, AMBAC, 0%, 7/01/46      4,995,000        1,208,091   
Arkansas Federal Highway Grant Anticipation & Tax Rev., 5%, 4/01/20      3,970,000        4,659,986   
Little Rock, AR, Hotel & Restaurant Gross Receipts Tax Rev., 5%, 7/01/30      1,055,000        1,221,521   
Little Rock, AR, Hotel & Restaurant Gross Receipts Tax Rev., 5%, 7/01/34      1,590,000        1,816,146   
Pulaski County, AR, Public Facilities Board Healthcare Rev. (Baptist Health), 5%, 12/01/39      9,250,000        10,517,435   
Pulaski County, AR, Public Facilities Board Healthcare Rev. (Baptist Health), 5%, 12/01/42      1,520,000        1,721,552   
    

 

 

  
             $ 22,941,681   
California - 13.7%                 
Alameda Corridor Transportation Authority, California Rev., “A”, AGM, 5%, 10/01/28    $ 985,000      $ 1,155,425   
California Department of Water Resources, Center Valley Project Rev., “AF” 5%, 12/01/28 (u)      9,625,000        10,957,100   
California Department of Water Resources, Center Valley Project Rev., “AF”, 5%, 12/01/28 (Prerefunded 12/01/18) (u)      14,200,000        16,264,254   
California Department of Water Resources, Power Supply Rev., “N”, 5%, 5/01/20      13,080,000        15,464,876   
California Educational Facilities Authority Rev. (Chapman University), 5%, 4/01/31      1,550,000        1,746,261   
California Educational Facilities Authority Rev. (University of San Francisco), 6.125%, 10/01/36      925,000        1,141,099   
California Educational Facilities Authority Rev. (University of Southern California), “A”, 5.25%, 10/01/38      4,610,000        5,209,531   
California Health Facilities Financing Authority Rev. (St. Joseph Health System), “A”, 5.75%, 7/01/39      2,580,000        3,012,356   

 

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
California - continued                 
California Health Facilities Financing Authority Rev. (Sutter Health), “D”, 5.25%, 8/15/31    $ 5,000,000      $ 5,817,950   
California Housing Finance Agency Rev. (Home Mortgage), “G”, 4.95%, 8/01/23      6,180,000        6,391,109   
California Housing Finance Agency Rev. (Home Mortgage), “G”, 5.5%, 8/01/42      685,000        706,543   
California Housing Finance Agency Rev. (Home Mortgage), “L”, 5.45%, 8/01/33      6,600,000        6,894,954   
California Housing Finance Agency Rev. (Home Mortgage), “L”, FNMA, 5.5%, 8/01/38      1,270,000        1,293,127   
California M-S-R Energy Authority Gas Rev., “A”, 7%, 11/01/34      595,000        841,848   
California M-S-R Energy Authority Gas Rev., “A”, 6.5%, 11/01/39      1,810,000        2,496,243   
California Municipal Finance Authority Rev. (Biola University), 5.8%, 10/01/28      1,785,000        1,973,460   
California Municipal Finance Authority Rev. (University of La Verne), “A”, 6.25%, 6/01/40      850,000        994,687   
California Municipal Finance Authority, Solid Waste Rev. (Republic Services, Inc. Project), FRN, 0.3%, 9/01/21 (Put Date 7/01/15)      4,935,000        4,935,000   
California Pollution Control Financing Authority, Solid Waste Disposal Rev. (Republic Services, Inc.), “B”, 5.25%, 6/01/23 (Put Date 12/01/17)      950,000        1,032,090   
California Pollution Control Financing Authority, Solid Waste Disposal Rev. (Waste Management, Inc.), “C”, 5.125%, 11/01/23      1,665,000        1,726,788   
California Public Works Board Lease Rev. (Various Capital Projects), “G-1”, 5.75%, 10/01/30      2,950,000        3,507,049   
California Public Works Board Lease Rev. (Various Capital Projects), “I”, 5%, 11/01/17      585,000        647,361   
California Public Works Board Lease Rev. (Various Capital Projects), “I”, 5%, 11/01/18      615,000        699,495   
California Public Works Board Lease Rev. (Various Capital Projects), “I”, 5%, 11/01/38      9,180,000        10,463,180   
California Public Works Board Lease Rev., Department of Corrections and Rehabilitation (Various Correctional Facilities), “A”, 5%, 9/01/33      9,250,000        10,757,658   
California State University Rev., “A”, 5%, 11/01/24      11,175,000        13,841,579   
California Statewide Communities Development Authority Environmental Facilities Rev. (Microgy Holdings Project), 9%, 12/01/38 (a)(d)      126,224        1   
California Statewide Communities Development Authority Rev. (American Baptist Homes of the West), 6.25%, 10/01/39      1,050,000        1,193,598   
California Statewide Communities Development Authority Rev. (California Baptist University), “A”, 5.4%, 11/01/27      245,000        256,554   
California Statewide Communities Development Authority Rev. (Enloe Medical Center), CALHF, 5.75%, 8/15/38      2,640,000        2,961,209   

 

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
California - continued                 
California Statewide Communities Development Authority Rev. (Lancer Educational Student Housing Project), 5.625%, 6/01/33    $ 1,460,000      $ 1,509,348   
California Statewide Communities Development Authority Rev. (Lancer Educational Student Housing Project), 7.5%, 6/01/42      925,000        1,032,633   
California Statewide Communities Development Authority Rev. (Lancer Plaza Project), 5.625%, 11/01/33      190,000        204,792   
California Statewide Communities Development Authority Rev. (Lancer Plaza Project), 5.125%, 11/01/23      155,000        168,674   
California Statewide Communities Development Authority Rev. (Loma Linda University Medical Center), “A”, 5.25%, 12/01/44      1,350,000        1,497,825   
California Statewide Communities Development Authority Rev. (Loma Linda University Medical Center), “A”, 5.5%, 12/01/54      3,605,000        4,025,595   
California Statewide Communities Development Authority Rev. (Los Angeles Jewish Home for The Aging - Fountainview at Gonda), “B”, CALHF, 3%, 8/01/21      2,020,000        2,072,480   
California Statewide Communities Development Authority Rev. (Los Angeles Jewish Home for The Aging - Fountainview at Gonda), “C”, CALHF, 2.5%, 8/01/20      1,355,000        1,384,011   
California Statewide Communities Development Authority Rev. (Los Angeles Jewish Home for The Aging - Fountainview at Gonda), “D”, 4.75%, 8/01/20      575,000        578,375   
California Statewide Communities Development Authority Rev. (Student Housing, SUCI East Campus), 6%, 5/15/40      1,655,000        1,828,527   
California Statewide Communities Development Authority, School Facility Rev. (Aspire Public Schools), 6.125%, 7/01/46      5,025,000        5,405,744   
Chula Vista, CA, Industrial Development Rev. (San Diego Gas & Electric Co.), “E”, 5.875%, 1/01/34      1,840,000        2,174,641   
Escondido, CA, Union High School District (Election of 2008), Capital Appreciation, “A”, ASSD GTY, 0%, 8/01/30      4,495,000        2,523,808   
Escondido, CA, Union High School District (Election of 2008), Capital Appreciation, “A”, ASSD GTY, 0%, 8/01/31      4,015,000        2,162,680   
Escondido, CA, Union High School District (Election of 2008), Capital Appreciation, “A”, ASSD GTY, 0%, 8/01/33      2,785,000        1,371,807   
Glendale, CA, Redevelopment Agency, Tax Allocation Rev. (Central Glendale Redevelopment Project), 5.5%, 12/01/24      2,250,000        2,373,413   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A”, AGM, 4.55%, 6/01/22      3,415,000        3,738,674   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A”, 5%, 6/01/34      3,000,000        3,456,930   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, FGIC, 5%, 6/01/35      1,000,000        1,007,970   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A-1”, AMBAC, 4.6%, 6/01/23      995,000        1,082,699   

 

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
California - continued                 
Hartnell, CA, Community College District (Election of 2002), Capital Appreciation, “D”, 0%, 8/01/39    $ 9,645,000      $ 2,037,796   
Inland Valley, CA, Development Successor Agency Tax Allocation, “A”, 5%, 9/01/44      2,620,000        2,931,492   
La Verne, CA, COP (Brethren Hillcrest Homes), 5%, 5/15/36      640,000        689,075   
Los Angeles County, CA, Regional Financing Authority Rev. (Montecedro Inc. Project), “A”, CALHF, 5%, 11/15/44      820,000        909,159   
Los Angeles County, CA, Regional Financing Authority Rev. (Montecedro Inc. Project), “A”, CALHF, 5%, 11/15/34      480,000        539,050   
Los Angeles County, CA, Regional Financing Authority Rev. (Montecedro Inc. Project), “B-2”, CALHF, 3%, 11/15/20      430,000        436,076   
Los Angeles County, CA, Regional Financing Authority Rev. (Montecedro Inc. Project), “B-3”, CALHF, 2.5%, 11/15/20      1,080,000        1,091,275   
Los Angeles, CA, Department of Airports Rev. (Los Angeles International), “A”, 5%, 5/15/29      2,990,000        3,479,104   
Los Angeles, CA, Municipal Improvement Corp. Lease Rev. (Real Property), “E”, 6%, 9/01/39      2,580,000        3,030,029   
Los Angeles, CA, Unified School District, “D”, 5%, 1/01/34      825,000        934,527   
Madera, CA, Financing Authority, Irrigation Rev., 6.5%, 1/01/40      3,595,000        4,208,738   
Merced, CA, Union High School District, Capital Appreciation, “A”, ASSD GTY, 0%, 8/01/30      580,000        316,477   
Mt. San Antonio, CA, Community College District, Convertible Capital Appreciation, 0%, 8/01/28      1,860,000        1,603,990   
Oceanside, CA, Unified School District, Capital Appreciation, ASSD GTY, 0%, 8/01/24      2,900,000        2,186,426   
Oceanside, CA, Unified School District, Capital Appreciation, ASSD GTY, 0%, 8/01/27      1,930,000        1,277,564   
Oceanside, CA, Unified School District, Capital Appreciation, ASSD GTY, 0%, 8/01/29      3,915,000        2,357,574   
Oceanside, CA, Unified School District, Capital Appreciation, ASSD GTY, 0%, 8/01/30      4,335,000        2,497,047   
Oxnard, CA, Financing Authority, Wastewater Rev., AGM, 5%, 6/01/30      1,640,000        1,871,453   
Palomar Pomerado Health Care District, CA, COP, 6.75%, 11/01/39      2,210,000        2,448,459   
Port of Oakland, CA, Rev., “P”, 5%, 5/01/33      11,790,000        13,148,915   
Riverside County, CA, Transportation Commission Sales Tax Rev. (Limited Tax), “A”, 5.25%, 6/01/39      4,655,000        5,471,115   
Sacramento, CA, Municipal Utility District, “X”, 5%, 8/15/28      3,270,000        3,894,080   
San Diego County, CA, Regional Airport Authority Rev., “A”, 5%, 7/01/40      9,315,000        10,483,101   
San Diego County, CA, Regional Airport Authority Rev., “B”, 5%, 7/01/24      500,000        595,935   
San Diego County, CA, Regional Airport Authority Rev., “B”, 5%, 7/01/25      1,500,000        1,775,505   

 

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
California - continued                 
San Francisco, CA, Bay Area Toll Authority, Bridge Rev., “B”, 1.5%, 4/01/47 (Put Date 4/02/18)    $ 4,320,000      $ 4,372,618   
San Francisco, CA, Bay Area Toll Authority, Bridge Rev., “C”, 1.875%, 4/01/47 (Put Date 4/01/19)      3,485,000        3,558,185   
San Francisco, CA, City & County Airports Commission, International Airport Rev., “A”, 5%, 5/01/28      6,000,000        6,844,080   
San Francisco, CA, City & County Redevelopment Successor Agency, Tax Allocation (Mission Bay South Public Improvements), “A”, 5%, 8/01/43      340,000        378,287   
San Jose, CA, Airport Rev., “A-2”, 5.25%, 3/01/34      7,570,000        8,495,660   
San Jose, CA, Airport Rev., “C”, 5%, 3/01/30      1,115,000        1,287,368   
San Mateo County, CA, Community College District (Election of 2005), Capital Appreciation, “A”, NATL, 0%, 9/01/26      5,100,000        3,736,566   
State of California, 5%, 4/01/24      4,365,000        5,260,698   
State of California, 5.25%, 10/01/28      2,965,000        3,504,037   
State of California, 6.5%, 4/01/33      4,000,000        4,851,760   
State of California, 6%, 11/01/39      3,000,000        3,638,790   
State of California, General Obligation, “A”, FRN, 0.7%, 5/01/33 (Put Date 5/01/15)      9,670,000        9,672,998   
Upland, CA, COP (San Antonio Community Hospital), 6.375%, 1/01/32      2,075,000        2,450,637   
Upland, CA, COP (San Antonio Community Hospital), 6.5%, 1/01/41      915,000        1,081,338   
West Contra Costa, CA, Unified School District (Election of 2005), Capital Appreciation, “C”, ASSD GTY, 0%, 8/01/29      3,440,000        2,025,403   
Whittier, CA, Union High School District, Capital Appreciation, 0%, 8/01/34      2,005,000        705,961   
    

 

 

  
             $ 306,061,359   
Colorado - 3.6%                 
Colorado Educational & Cultural Facilities Authority Rev. (Academy of Charter Schools Project), 5.625%, 5/01/40    $ 1,815,000      $ 2,018,661   
Colorado Educational & Cultural Facilities Authority Rev. (Liberty Common Project), 5%, 1/15/29      195,000        217,425   
Colorado Educational & Cultural Facilities Authority Rev. (Liberty Common Project), 5%, 1/15/39      740,000        808,672   
Colorado Educational & Cultural Facilities Authority Rev. (Liberty Common Project), 5%, 1/15/44      605,000        659,256   
Colorado Educational & Cultural Facilities Authority Rev. (Montessori Charter School Project), 5%, 7/15/37      545,000        588,066   
Colorado Educational & Cultural Facilities Authority Rev. (Peak to Peak Charter School Project), 5%, 8/15/30      490,000        546,203   
Colorado Educational & Cultural Facilities Authority Rev. (Peak to Peak Charter School Project), 5%, 8/15/34      495,000        550,524   

 

17

Table of Contents

Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Colorado - continued                 
Colorado Educational & Cultural Facilities Authority Rev. (Pinnacle Charter School Building Corp.), 5%, 6/01/29    $ 700,000      $ 782,425   
Colorado Educational & Cultural Facilities Authority Rev. (The Classical Academy Project), 5%, 12/01/31      1,725,000        1,953,735   
Colorado Educational & Cultural Facilities Authority Rev. (The Classical Academy Project), 4%, 12/01/39      1,675,000        1,676,524   
Colorado Educational & Cultural Facilities Authority Rev. (The Classical Academy Project), “A”, 5%, 12/01/38      1,020,000        1,129,517   
Colorado Educational & Cultural Facilities Authority Rev. (Twin Peaks Charter Academy Project), 5%, 11/15/31      1,855,000        2,100,027   
Colorado Educational & Cultural Facilities Authority Rev. (Twin Peaks Charter Academy), 7%, 11/15/38      4,330,000        5,200,460   
Colorado Health Facilities Authority Rev. (Covenant Retirement Communities, Inc. Project), “A”, 5%, 12/01/35      1,985,000        2,158,032   
Colorado Health Facilities Authority Rev. (Evangelical Lutheran Good Samaritan Society), 5.625%, 6/01/43      1,195,000        1,370,307   
Colorado Health Facilities Authority Rev. (SCL Health System), “A”, 5%, 1/01/44      4,620,000        5,216,211   
Colorado Housing & Finance Authority, Solid Waste Rev. (Waste Management, Inc.), 5.7%, 7/01/18      4,840,000        5,543,784   
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6.5%, 1/15/30      6,150,000        7,297,652   
Colorado Regional Transportation District, Private Activity Rev. (Denver Transportation Partners), 6%, 1/15/34      5,000,000        5,749,400   
Colorado State University Board of Governors, System Enterprise Rev., “B”, 5%, 3/01/25      3,000,000        3,707,640   
Denver, CO, City & County Airport Rev. (United Airlines), 5.25%, 10/01/32      3,975,000        4,182,495   
Denver, CO, City & County Airport Rev. (United Airlines), 5.75%, 10/01/32      615,000        657,128   
Denver, CO, City & County Airport Systems Rev., “A”, 5%, 11/15/28      1,930,000        2,182,251   
Denver, CO, City & County School District No. 1, 5%, 12/01/24      10,000,000        11,904,600   
Denver, CO, Health & Hospital Authority Rev., “A”, 5%, 12/01/39      845,000        923,154   
Denver, CO, Health & Hospital Authority Rev., “A”, 5.25%, 12/01/45      1,210,000        1,347,916   
Denver, CO, Single Family Mortgage Rev., GNMA, 7.3%, 11/01/31      10,000        10,099   
Northwest Parkway, CO, Public Highway Authority Rev., “C”, ETM, AGM, 5.35%, 6/15/16      1,000,000        1,059,970   
Public Authority for Colorado Energy Natural Gas Purchase Rev., 6.5%, 11/15/38      3,725,000        5,118,262   
University of Colorado, Enterprise Rev., 5%, 6/01/29      4,220,000        4,847,894   
    

 

 

  
             $ 81,508,290   

 

18

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Connecticut - 1.1%                 
Connecticut Housing Finance Authority Rev., (Housing Mortgage Finance Program), “B-2”, 4%, 11/15/32    $ 2,880,000      $ 3,109,075   
Connecticut Housing Finance Authority Rev., (Housing Mortgage Finance Program), “D-1”, 4%, 11/15/44      3,675,000        3,975,652   
Mohegan Tribal Finance Authority Economic Development Bonds, 7%, 2/01/45      2,320,000        2,337,446   
State of Connecticut, Special Tax Obligation Rev., “A”, 5%, 12/01/28      4,595,000        5,376,655   
State of Connecticut, Special Tax Obligation Rev., “A”, 5%, 12/01/29      4,595,000        5,374,450   
State of Connecticut, Special Tax Obligation Rev., “A”, 5%, 12/01/30      4,615,000        5,389,351   
    

 

 

  
             $ 25,562,629   
Delaware - 0.2%                 
Delaware Housing Authority Rev. (Single Family), “C”, 6.25%, 7/01/37    $ 125,000      $ 127,809   
University of Delaware Rev., “C”, 0.7%, 11/01/37 (Put Date 5/01/16)      5,000,000        5,025,250   
    

 

 

  
             $ 5,153,059   
District of Columbia - 0.9%                 
District of Columbia Rev. (Kipp, D.C. Charter School), “A”, 6%, 7/01/43    $ 1,450,000      $ 1,699,777   
District of Columbia Rev. (Kipp, D.C. Charter School), “A”, 6%, 7/01/33      560,000        661,735   
District of Columbia Student Dormitory Rev. (Provident Group - Howard Properties LLC), 5%, 10/01/30      3,235,000        3,406,423   
District of Columbia Student Dormitory Rev. (Provident Group - Howard Properties LLC), 5%, 10/01/35      4,080,000        4,237,570   
District of Columbia University Rev. (Georgetown University), 0% to 4/01/18, 5% to 4/01/40      11,570,000        10,713,589   
District of Columbia, Tobacco Settlement, 6.25%, 5/15/24      405,000        405,057   
    

 

 

  
             $ 21,124,151   
Florida - 5.4%                 
Arborwood Community Development District, FL, Capital Improvement Rev., “A-1”, 0%, 5/01/36    $ 20,000      $ 21,475   
Bay County, FL, Housing Finance Authority, Multi-Family Rev. (Andrews Place II Apartments), AGM, 5%, 10/01/35      1,035,000        1,035,849   
Bellalago, FL, Educational Facilities Benefit District (Osceola County) Capital Improvement Refunding Rev., 4.375%, 5/01/30      1,045,000        1,091,994   
Bellalago, FL, Educational Facilities Benefit District (Osceola County) Capital Improvement Refunding Rev., 4.5%, 5/01/33      485,000        507,063   

 

19

Table of Contents

Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Florida - continued                 
Bellalago, FL, Educational Facilities Benefit District (Osceola County) Capital Improvement Refunding Rev., 4.6%, 5/01/34    $ 1,405,000      $ 1,481,783   
Capital Region Community Development District, FL, Capital Improvement Rev., “A”, 7%, 5/01/39      860,000        875,970   
Capital Trust Agency Rev. (Aero Miami FX LLC), “A”, 5.35%, 7/01/29      3,670,000        4,069,883   
Citizens Property Insurance Corp., “A-1”, 5.25%, 6/01/17      750,000        821,025   
Collier County, FL, Educational Facilities Authority Rev. (Ave Maria University, Inc. Project), “A”, 6.125%, 6/01/43      4,300,000        4,807,099   
Concord Station Community Development District, FL, Special Assessment, 5%, 5/01/15      25,000        25,034   
Florida Board of Education, Capital Outlay, “E”, 5%, 6/01/23      250,000        290,370   
Florida Board of Education, Lottery Rev., “A”, 5%, 7/01/20      7,855,000        9,237,951   
Florida Citizens Property Insurance Corp., “A-1”, 5%, 6/01/19      505,000        576,195   
Florida Development Finance Corp. Educational Facilities Rev. (Renaissance Charter School), “A”, 6%, 9/15/30      2,425,000        2,557,211   
Florida Development Finance Corp. Educational Facilities Rev. (Renaissance Charter School), “A”, 6%, 9/15/40      5,130,000        5,367,211   
Florida Housing Finance Corp, Homeowner Mortgage Rev. (Special Program), “A”, FHLMC, 3.5%, 7/01/46      1,895,000        2,029,280   
Florida Housing Finance Corp, Homeowner Mortgage Rev. (Special Program), “B”, 3%, 7/01/45      3,705,000        3,874,985   
Florida Housing Finance Corp. Rev. (Homeowner Mortgage), “1”, GNMA, 4.8%, 7/01/31      345,000        346,642   
Florida Municipal Power Agency Rev., All Requirements, “A”, 6.25%, 10/01/31      400,000        473,900   
Florida Power Agency Rev., “A”, 5%, 10/01/31      1,000,000        1,106,730   
Florida State University Board of Governors, System Improvement Rev., 6.25%, 7/01/30      2,685,000        3,119,675   
Heritage Harbour North Community Development District, FL, Capital Improvement Rev., 6.375%, 5/01/38      775,000        822,461   
Hillsborough County, FL, Industrial Development Authority Rev. (University Community Hospital), “A”, 5.625%, 8/15/29 (Prerefunded 8/15/18)      300,000        346,113   
Hillsborough County, FL, Industrial Development Authority Rev. (University Community Hospital), ETM, NATL, 6.5%, 8/15/19      1,000,000        1,130,820   
Hillsborough County, FL, Industrial Development Authority, Pollution Control Rev. (Tampa Electric Co.), “A”, 5.65%, 5/15/18      500,000        563,805   
Homestead 50, FL, Community Development District, Special Assessment, “A”, 6%, 5/01/37      1,550,000        1,135,267   
Lakeland, FL, Hospital Rev. (Lakeland Regional Health Systems), 5%, 11/15/33      2,225,000        2,511,091   
Lakeland, FL, Hospital Rev. (Lakeland Regional Health Systems), 5%, 11/15/34      1,935,000        2,160,253   

 

20

Table of Contents

Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Florida - continued                 
Lakeland, FL, Hospital Rev. (Lakeland Regional Health Systems), 5%, 11/15/35    $ 2,735,000      $ 3,048,677   
Lakeland, FL, Hospital Rev. (Lakeland Regional Health Systems), 5%, 11/15/40      10,050,000        11,107,763   
Lakewood Ranch Stewardship District, FL, Special Assessment Rev. (Lakewood Centre North Project), 4.25%, 5/01/25      425,000        420,181   
Lakewood Ranch Stewardship District, FL, Special Assessment Rev. (Lakewood Centre North Project), 4.875%, 5/01/35      135,000        132,469   
Lakewood Ranch Stewardship District, FL, Special Assessment Rev. (Lakewood Centre North Project), 4.875%, 5/01/45      205,000        198,854   
Main Street Community Development District, FL, “A”, 6.8%, 5/01/38      500,000        507,040   
Marshall Creek Community Development District, FL, Capital Improvement and Special Assessment, “A”, 3.5%, 5/01/20      1,000,000        999,060   
Miami-Dade County, FL, Aviation Rev., “B”, AGM, 5%, 10/01/35      5,885,000        6,614,681   
Miami-Dade County, FL, Educational Facilities Authority Rev. (University of Miami), “A”, 5.75%, 4/01/28      1,875,000        1,961,981   
Miami-Dade County, FL, Health Facilities Authority, Hospital Rev. (Miami Children’s Hospital), “A”, 6.125%, 8/01/42      2,240,000        2,630,768   
Miami-Dade County, FL, School Board, COP, “B”, ASSD GTY, 5%, 5/01/33      500,000        547,255   
Miami-Dade County, FL, Special Obligation, Capital Appreciation, “A”, NATL, 0%, 10/01/32      2,000,000        818,220   
Miami-Dade County, FL, Water & Sewer Rev., AGM, 5%, 10/01/39      1,000,000        1,143,740   
Mid-Bay Bridge Authority, FL, Springing Lien Rev., “A”, 7.25%, 10/01/40      6,920,000        8,507,379   
Middle Village Community Development District, FL, Special Assessment, “A”, 5.8%, 5/01/22      55,000        48,091   
Midtown Miami, FL, Community Development District Special Assessment (Infrastructure Project), “B”, 5%, 5/01/29      280,000        300,286   
Midtown Miami, FL, Community Development District Special Assessment (Infrastructure Project), “B”, 5%, 5/01/37      135,000        143,379   
Midtown Miami, FL, Community Development District Special Assessment (Parking Garage Project), “A”, 5%, 5/01/37      235,000        249,586   
Orange County, FL, Health Facilities Authority, Hospital Rev. (Orlando Regional Healthcare), “C”, 5.25%, 10/01/35      1,000,000        1,090,210   
Palm Beach County, FL, Health Facilities Rev. (Sinai Residences of Boca Raton Project), 7.5%, 6/01/49      430,000        492,501   
Palm Beach County, FL, Solid Waste Authority Rev. Improvement, BHAC, 5%, 10/01/27      295,000        339,403   
Parkway Center Community Development District, FL, Special Assessment, “B”, 7%, 5/01/23      425,000        430,657   
Pinellas County, FL, Sewer Rev., AGM, 5%, 10/01/32      330,000        331,228   
Pompano Beach, FL (John Knox Village Project), 5%, 9/01/39      610,000        672,043   

 

21

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Florida - continued                 
Pompano Beach, FL (John Knox Village Project), 5%, 9/01/44    $ 2,595,000      $ 2,852,424   
Seminole County, FL, Water & Sewer Rev., Unrefunded Balance, NATL, 6%, 10/01/19      205,000        209,651   
Seminole Tribe, FL, Special Obligation Rev., “A”, 5.75%, 10/01/22 (n)      2,850,000        3,078,171   
Seminole Tribe, FL, Special Obligation Rev., “A”, 5.5%, 10/01/24 (n)      4,275,000        4,591,478   
South Broward, FL, Hospital District Rev., 5%, 5/01/36      500,000        536,090   
South Lake County, FL, Hospital District Rev. (South Lake Hospital), “A”, 6%, 4/01/29      1,025,000        1,146,657   
St. John’s County, FL, Industrial Development Authority Rev. (Bayview Project), “A”, 5.2%, 10/01/27      150,000        140,391   
St. John’s County, FL, Industrial Development Authority Rev. (Presbyterian Retirement), “A”, 6%, 8/01/45      6,795,000        7,717,149   
Sterling Hill Community Development District, FL, Capital Improvement Rev., “B”, 5.5%, 11/01/10 (d)      55,000        33,000   
Sumter County, FL, Industrial Development Authority Hospital Rev. (Central Florida Health Alliance Projects), “A”, 5%, 7/01/26      245,000        277,516   
Sumter County, FL, Industrial Development Authority Hospital Rev. (Central Florida Health Alliance Projects), “A”, 5%, 7/01/29      225,000        250,596   
Sumter County, FL, Industrial Development Authority Hospital Rev. (Central Florida Health Alliance Projects), “A”, 5.125%, 7/01/34      485,000        538,913   
Sumter County, FL, Industrial Development Authority Hospital Rev. (Central Florida Health Alliance Projects), “A”, 5.25%, 7/01/44      1,455,000        1,610,714   
Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial Healthcare, Inc.), 6.25%, 12/01/20      3,200,000        3,214,080   
Tuscany Reserve Community Development District, FL, Special Assessment, “B”, 5.25%, 5/01/16      235,000        238,826   
Watergrass Community Development District, FL, Special Assessment, “B”, 6.96%, 11/01/17      20,000        19,146   
    

 

 

  
             $ 121,577,389   
Georgia - 3.5%                 
Americus and Sumter County, GA, Hospital Authority Rev. (Magnolia Manor Obligated Group), “A”, 6.25%, 5/15/33    $ 965,000      $ 1,069,085   
Americus and Sumter County, GA, Hospital Authority Rev. (Magnolia Manor Obligated Group), “A”, 6.375%, 5/15/43      965,000        1,065,148   
Atlanta, GA, Airport Rev., “B”, 5%, 1/01/25      1,415,000        1,651,588   
Atlanta, GA, Airport Rev., “B”, 5%, 1/01/26      800,000        930,504   
Atlanta, GA, Water & Wastewater Rev., “A”, 6%, 11/01/22      2,770,000        3,349,650   
Brunswick, GA, Hospital Authority Rev. (Glynn-Brunswick Memorial Hospital), 5.625%, 8/01/34      1,320,000        1,470,810   
Clayton County, GA, Development Authority Special Facilities Rev. (Delta Airlines, Inc.), “A”, 8.75%, 6/01/29      1,295,000        1,628,346   

 

22

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Georgia - continued                 
Clayton County, GA, Development Authority Special Facilities Rev. (Delta Airlines, Inc.), “B”, 9%, 6/01/35    $ 955,000      $ 965,113   
DeKalb County, GA, Hospital Authority Rev. (DeKalb Medical Center, Inc.), 6.125%, 9/01/40      4,850,000        5,365,507   
DeKalb County, GA, Water & Sewer Rev., “A”, 5.25%, 10/01/28      5,285,000        6,257,176   
DeKalb County, GA, Water & Sewer Rev., “A”, 5.25%, 10/01/29      1,415,000        1,657,673   
DeKalb County, GA, Water & Sewer Rev., “A”, 5.25%, 10/01/30      4,345,000        5,089,038   
DeKalb County, GA, Water & Sewer Rev., “A”, 5.25%, 10/01/31      235,000        274,590   
DeKalb County, GA, Water & Sewer Rev., “A”, 5.25%, 10/01/41      3,910,000        4,535,014   
Fulton County, GA, Water & Sewer Rev., 5%, 1/01/26      3,680,000        4,270,235   
Fulton County, GA, Water & Sewer Rev., 5%, 1/01/27      2,285,000        2,638,055   
Georgia Housing & Finance Authority Rev., Single Family Mortgage, “A”, 3%, 6/01/43      1,260,000        1,304,768   
Georgia Housing & Finance Authority Rev., Single Family Mortgage, “A-1”, 4%, 6/01/44      2,555,000        2,766,247   
Georgia Housing & Finance Authority Rev., Single Family Mortgage, “B-2”, 4.5%, 12/01/24      1,195,000        1,211,360   
Georgia Main Street Natural Gas, Inc., Gas Project Rev., “A”, 5%, 3/15/22      4,545,000        5,297,788   
Georgia Main Street Natural Gas, Inc., Gas Project Rev., “A”, 5.5%, 9/15/26      845,000        1,027,436   
Georgia Main Street Natural Gas, Inc., Gas Project Rev., “A”, 5.5%, 9/15/28      1,740,000        2,092,176   
Georgia Municipal Electric Authority Power Rev., NATL, 6.375%, 1/01/16      1,010,000        1,052,471   
Georgia Municipal Electric Authority Power Rev., AMBAC, 6.5%, 1/01/17      2,070,000        2,190,495   
Georgia Municipal Electric Authority Power Rev., NATL, 6.5%, 1/01/20      2,645,000        2,973,853   
Georgia Municipal Electric Authority Power Rev., “GG”, 5%, 1/01/26      3,065,000        3,632,546   
Georgia Municipal Electric Authority Power Rev., ETM, AMBAC, 6.5%, 1/01/17      80,000        83,302   
Hall County and Gainesville, GA, Hospital Authority Rev. (Northeast Georgia Health System, Inc.), “A”, 5.5%, 8/15/54      4,215,000        4,928,726   
Marietta, GA, Development Facilities Authority Rev. (Life University), 7%, 6/15/30      540,000        576,342   
Marietta, GA, Development Facilities Authority Rev. (Life University), 7%, 6/15/39      645,000        684,590   
Metropolitan Atlanta, GA, Rapid Transit Authority Rev., 6.25%, 7/01/18      2,580,000        2,822,959   
Monroe County, GA, Development Authority Pollution Control Rev. (Georgia Power Company Plant Scherer Project), 2%, 7/01/25 (Put Date 6/13/19)      1,735,000        1,787,276   

 

23

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Georgia - continued                 
Rockdale County, GA, Development Authority Project Rev. (Visy Paper Project), “A”, 6.125%, 1/01/34    $ 2,055,000      $ 2,108,163   
    

 

 

  
             $ 78,758,030   
Guam - 0.1%                 
Guam Government, “A”, 7%, 11/15/39    $ 910,000      $ 1,074,592   
Guam International Airport Authority Rev., “C”, 5%, 10/01/16      360,000        380,275   
Guam International Airport Authority Rev., “C”, 5%, 10/01/17      600,000        653,040   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.25%, 7/01/20      130,000        149,625   
Guam Waterworks Authority Rev. (Water and Wastewater System), 5.25%, 7/01/21      370,000        431,209   
    

 

 

  
             $ 2,688,741   
Hawaii - 1.5%                 
Hawaii Housing & Community Development Corp., HI, Rental Housing System Rev., “A”, 4.65%, 1/01/29    $ 7,795,000      $ 7,854,320   
Hawaii Housing & Community Development Corp., HI, Rental Housing System Rev., “A”, 4.75%, 1/01/33      9,390,000        9,464,087   
Hawaii Department of Budget & Finance, Special Purpose Rev. (15 Craigside Project), “A”, 8.75%, 11/15/29      375,000        472,946   
Hawaii Department of Budget & Finance, Special Purpose Rev. (15 Craigside Project), “A”, 9%, 11/15/44      1,100,000        1,377,420   
Hawaii Department of Budget & Finance, Special Purpose Rev. (Hawaiian Electric Co. & Subsidiary), 6.5%, 7/01/39      3,655,000        4,236,839   
State of Hawaii, “DZ”, 5%, 12/01/31      2,230,000        2,606,357   
State of Hawaii, Highway Rev., “A”, 5%, 1/01/30      3,695,000        4,233,251   
State of Hawaii, Highway Rev., “A”, 5%, 1/01/31      1,380,000        1,575,518   
State of Hawaii, Highway Rev., “A”, 5%, 1/01/32      920,000        1,047,908   
    

 

 

  
             $ 32,868,646   
Idaho - 0.0%                 
Idaho Health Facilities Authority Rev. (The Terraces of Boise Project), “B3”, 5.25%, 10/01/20    $ 450,000      $ 453,222   
Illinois - 6.0%                 
Chicago, IL, “A”, AGM, 5%, 1/01/34    $ 2,000,000      $ 2,011,900   
Chicago, IL, Greater Chicago Metropolitan Water Reclamation District, “C”, 5%, 12/01/29      9,145,000        10,537,052   
Chicago, IL, O’Hare International Airport Rev., Customer Facility Charge, AGM, 5.25%, 1/01/32      945,000        1,086,788   
Chicago, IL, O’Hare International Airport Rev., Customer Facility Charge, AGM, 5.25%, 1/01/33      470,000        539,819   

 

24

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Illinois - continued                 
Chicago, IL, O’Hare International Airport Rev., Customer Facility Charge, AGM, 5.5%, 1/01/43    $ 1,890,000      $ 2,172,196   
Chicago, IL, O’Hare International Airport Rev., Third Lien, “A”, 5.625%, 1/01/35      7,125,000        8,237,498   
Chicago, IL, Single Family Mortgage Rev., “C”, GNMA, 5.5%, 6/01/38      175,000        176,416   
Chicago, IL, Single Family Mortgage Rev., “C”, GNMA, 5.75%, 12/01/42      110,000        115,410   
Chicago, IL, Transit Authority Sales Tax Receipts Rev., 5.25%, 12/01/29      1,755,000        1,989,644   
Chicago, IL, Transit Authority Sales Tax Receipts Rev., 5.25%, 12/01/31      655,000        739,200   
Chicago, IL, Transit Authority Sales Tax Receipts Rev., 5.25%, 12/01/40      4,685,000        5,239,376   
Illinois Finance Authority Rev. (Christian Homes), 5.5%, 5/15/23 (Prerefunded 5/15/15)      1,230,000        1,237,958   
Illinois Finance Authority Rev. (Christian Homes), 5.5%, 5/15/23      2,125,000        2,128,698   
Illinois Finance Authority Rev. (Franciscan Communities, Inc.), “A”, 4.75%, 5/15/33      2,145,000        2,189,831   
Illinois Finance Authority Rev. (Franciscan Communities, Inc.), “A”, 5.5%, 5/15/37      3,285,000        3,409,239   
Illinois Finance Authority Rev. (Franciscan Communities, Inc.), “A”, 5.125%, 5/15/43      1,500,000        1,539,495   
Illinois Finance Authority Rev. (KishHealth Systems Obligated Group), 5.75%, 10/01/28      2,990,000        3,382,348   
Illinois Finance Authority Rev. (O.S.F. Healthcare Systems) “A”, 7%, 11/15/29      2,975,000        3,549,383   
Illinois Finance Authority Rev. (O.S.F. Healthcare Systems) “A”, 7.125%, 11/15/37      2,445,000        2,918,034   
Illinois Finance Authority Rev. (Presence Health Obligated Group), 6.125%, 5/15/25 (Prerefunded 5/15/19)      205,000        244,987   
Illinois Finance Authority Rev. (Presence Health Obligated Group), Unrefunded, 6.125%, 5/15/25      6,695,000        7,612,818   
Illinois Finance Authority Rev. (Provena Health), “A”, 7.75%, 8/15/34      3,685,000        4,578,207   
Illinois Finance Authority Rev. (Rehabilitation Institute of Chicago), “A”, 6%, 7/01/43      6,315,000        7,623,468   
Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 6.875%, 8/15/38 (Prerefunded 8/15/19)      1,500,000        1,860,075   
Illinois Finance Authority Rev. (Silver Cross Hospital & Medical Centers), 7%, 8/15/44 (Prerefunded 8/15/19)      2,455,000        3,057,359   
Illinois Finance Authority Rev. (Smith Village), “A”, 6.125%, 11/15/25      1,095,000        1,110,352   

 

25

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Illinois - continued                 
Illinois Finance Authority Rev. (Smith Village), “A”, 6.25%, 11/15/35    $ 1,945,000      $ 1,960,891   
Illinois Finance Authority Rev., (Silver Cross Hospital and Medical Centers), “C”, 5%, 8/15/35      4,135,000        4,549,451   
Illinois Finance Authority Student Housing Rev. (Illinois State University), 6.75%, 4/01/31      2,730,000        3,168,001   
Illinois Finance Authority Student Housing Rev. (Northern Illinois University Project), 6.625%, 10/01/31      4,210,000        4,905,113   
Illinois Railsplitter Tobacco Settlement Authority, 5.5%, 6/01/23      4,455,000        5,257,301   
Illinois Railsplitter Tobacco Settlement Authority, 6.25%, 6/01/24      2,610,000        2,788,341   
Illinois Railsplitter Tobacco Settlement Authority, 6%, 6/01/28      8,750,000        10,423,175   
Illinois Sales Tax Rev., “P”, ETM, 6.5%, 6/15/22      4,575,000        5,369,769   
Illinois Toll Highway Authority Rev., “A”, 5%, 12/01/22      5,000,000        6,049,900   
Illinois Toll Highway Authority Rev., “B”, 5.5%, 1/01/33      5,645,000        6,223,613   
Romeoville, IL, Rev. (Lewis University Project), “A”, 5%, 10/01/42      1,690,000        1,850,043   
State of Illinois, “B”, 5.25%, 6/15/34      1,275,000        1,433,534   
    

 

 

  
             $ 133,266,683   
Indiana - 1.8%                 
Indiana Finance Authority Rev. (BHI Senior Living), “A”, 6%, 11/15/41    $ 2,840,000      $ 3,243,962   
Indiana Finance Authority Rev. (I-69 Section 5 Project), 5.25%, 9/01/34      1,710,000        1,908,993   
Indiana Finance Authority Rev. (I-69 Section 5 Project), 5.25%, 9/01/40      2,445,000        2,705,001   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/35      2,190,000        2,368,047   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “A”, 5%, 7/01/44      1,595,000        1,711,834   
Indiana Finance Authority Rev. (Ohio River Bridges East End Crossing Project), “B”, 5%, 1/01/19      1,515,000        1,617,929   
Indiana Finance Authority Rev. (State Revolving Fund Program), “A”, 5%, 2/01/29      4,000,000        4,632,600   
Indiana Finance Authority, Hospital Rev. (Deaconess Hospital, Inc.), “A”, 6.75%, 3/01/39      3,000,000        3,510,720   
Indiana Health & Educational Facilities Finance Authority, Hospital Rev. (Clarian Health), “B”, 5%, 2/15/33      2,490,000        2,578,246   
Indianapolis, IN, Multi-Family Rev. (Cambridge Station Apartments II), FNMA, 5.25%, 1/01/39 (Put Date 1/01/27)      1,375,000        1,389,520   
Knox County, IN, Economic Development Rev. (Good Samaritan Hospital), “A”, 5%, 4/01/42      1,170,000        1,243,020   
Noblesville, IN, Redevelopment Authority Lease Rental, 5.25%, 8/01/25      2,000,000        2,127,400   

 

26

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Indiana - continued                 
Richmond, IN, Hospital Authority Rev. (Reid Hospital & Health Center Services), “A”, 6.625%, 1/01/39    $ 4,715,000      $ 5,623,250   
St. Joseph County, IN, Educational Facilities Rev. (University of Notre Dame), 6.5%, 3/01/26      1,000,000        1,402,070   
University of Southern Indiana Rev. (Student Fee), “J”, ASSD GTY, 5.75%, 10/01/28      1,875,000        2,205,750   
Valparaiso, IN, Exempt Facilities Rev. (Pratt Paper LLC Project), 6.75%, 1/01/34      330,000        404,405   
Valparaiso, IN, Exempt Facilities Rev. (Pratt Paper LLC Project), 7%, 1/01/44      755,000        930,824   
    

 

 

  
             $ 39,603,571   
Iowa - 1.0%                 
Iowa Finance Authority Health Facilities Rev. (UnityPoint Health), “C”, 5%, 2/15/30    $ 1,200,000      $ 1,389,744   
Iowa Finance Authority Health Facilities Rev. (UnityPoint Health), “C”, 5%, 2/15/31      2,230,000        2,573,197   
Iowa Finance Authority Health Facilities Rev. (UnityPoint Health), “C”, 5%, 2/15/32      1,085,000        1,246,524   
Iowa Finance Authority Midwestern Disaster Area Rev. (Iowa Fertilizer Co.), 5%, 12/01/19      1,435,000        1,555,999   
Iowa Finance Authority Midwestern Disaster Area Rev. (Iowa Fertilizer Co.), 5.5%, 12/01/22      1,065,000        1,137,377   
Iowa Finance Authority Rev. (Iowa Health System Obligated Group), “A”, 5.25%, 2/15/44      3,000,000        3,400,320   
Iowa Finance Authority, Health Care Facilities Rev. (Care Initiatives), “A”, 5.5%, 7/01/25      1,205,000        1,240,873   
Iowa Student Loan Liquidity Corp., “A-2”, 5.5%, 12/01/25      1,660,000        1,796,933   
Iowa Student Loan Liquidity Corp., “A-2”, 5.6%, 12/01/26      1,665,000        1,802,812   
Iowa Student Loan Liquidity Corp., “A-2”, 5.7%, 12/01/27      140,000        150,980   
Iowa Student Loan Liquidity Corp., “A-2”, 5.75%, 12/01/28      2,820,000        3,040,073   
Iowa Tobacco Settlement Authority, Tobacco Settlement Rev., Asset Backed, “B”, 5.6%, 6/01/34      3,070,000        2,937,683   
    

 

 

  
             $ 22,272,515   
Kansas - 0.1%                 
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-1”, GNMA, 5.75%, 12/01/37    $ 95,000      $ 96,701   
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-3”, GNMA, 5.5%, 12/01/37      435,000        453,540   
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-4”, GNMA, 5.85%, 6/01/37      110,000        114,180   
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-5”, GNMA, 5.9%, 12/01/37      105,000        111,300   

 

27

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Kansas - continued                 
Sedgwick & Shawnee Counties, KS, Single Family Mortgage Rev., “A”, GNMA, 5.45%, 6/01/38    $ 740,000      $ 763,421   
Wyandotte County/Kansas City, KS, Unified Government Special Obligation Rev., Capital Appreciation, “B”, 0%, 6/01/21      1,540,000        1,111,418   
    

 

 

  
             $ 2,650,560   
Kentucky - 1.3%                 
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Baptist Healthcare System), “A”, 5.375%, 8/15/24    $ 2,305,000      $ 2,554,862   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Baptist Healthcare System), “A”, 5.625%, 8/15/27      770,000        863,239   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6%, 6/01/30      640,000        734,534   
Kentucky Economic Development Finance Authority, Hospital Facilities Rev. (Owensboro Medical Health System), “A”, 6.375%, 6/01/40      5,500,000        6,363,280   
Kentucky Public Transportation Infrastructure Authority Rev. (Downtown Crossing Project), Subordinate Toll Rev., “A”, 5%, 7/01/17      5,535,000        6,023,685   
Kentucky Turnpike Authority, Economic Development Road Rev. (Revitalization Projects), “A”, 5%, 7/01/32      2,000,000        2,317,240   
Louisville & Jefferson County, KY, Metro Government College Rev. (Bellarmine University, Inc. Project), 6.125%, 5/01/39      3,000,000        3,294,720   
Louisville & Jefferson County, KY, Metropolitan Government Healthcare Systems Rev. (Norton Healthcare, Inc.), 5.25%, 10/01/36      4,655,000        4,843,015   
Owen County, KY, Waterworks System Rev. (American Water Co. Project), “B”, 5.625%, 9/01/39      1,670,000        1,847,838   
    

 

 

  
             $ 28,842,413   
Louisiana - 2.5%                 
Jefferson Parish, LA, Hospital Rev., Hospital Service District No. 1 (West Jefferson Medical Center), “B”, AGM, 5.25%, 1/01/28    $ 1,980,000      $ 2,267,179   
Jefferson Parish, LA, Hospital Service District No. 2 (East Jefferson General Hospital), 6.25%, 7/01/31      3,355,000        3,944,843   
Louisiana Environmental Facilities & Community Development Authority Rev. (St. James Place of Baton Rouge Project), “A”, 6%, 11/15/35      580,000        583,573   
Louisiana Environmental Facilities & Community Development Authority Rev. (St. James Place of Baton Rouge Project), “A”, 6.25%, 11/15/45      2,240,000        2,251,894   
Louisiana Environmental Facilities & Community Development Authority Rev. (Westlake Chemical), 6.75%, 11/01/32      1,600,000        1,787,808   

 

28

Table of Contents

Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Louisiana - continued                 
Louisiana Environmental Facilities & Community Development Authority Rev. (Westlake Chemical), “A”, 6.5%, 8/01/29    $ 1,400,000      $ 1,673,294   
Louisiana Environmental Facilities & Community Development Authority Rev. (Westlake Chemical), “A-2”, 6.5%, 11/01/35      6,000,000        7,192,080   
Louisiana Public Facilities Authority Hospital Rev. (Lake Charles Memorial Hospital), 6.375%, 12/01/34      2,745,000        2,988,701   
Louisiana Public Facilities Authority Rev. (Entergy Gulf States Louisiana LLC), “A”, 5%, 9/01/28      10,000,000        10,185,500   
Louisiana Stadium & Exposition District Rev., “A”, 5%, 7/01/20      665,000        775,310   
Louisiana Stadium & Exposition District Rev., “A”, 5%, 7/01/21      830,000        980,421   
Louisiana Stadium & Exposition District Rev., “A”, 5%, 7/01/22      500,000        597,780   
Louisiana Stadium & Exposition District Rev., “A”, 5%, 7/01/23      1,325,000        1,603,502   
Louisiana Stadium & Exposition District Rev., “A”, 5%, 7/01/24      1,270,000        1,518,399   
Louisiana Stadium & Exposition District Rev., “A”, 5%, 7/01/25      1,000,000        1,186,950   
Louisiana Stadium & Exposition District Rev., “A”, 5%, 7/01/26      2,000,000        2,356,740   
New Orleans LA, Aviation Board General Airport Rev. (North Terminal Project), “B”, 5%, 1/01/40      3,105,000        3,451,518   
New Orleans LA, Aviation Board General Airport Rev. (North Terminal Project), “B”, 5%, 1/01/45      1,330,000        1,474,970   
New Orleans, LA, Aviation Board Gulf Opportunity Zone CFC Rev. (Consolidated Rental Car), “A”, 6.25%, 1/01/30      1,810,000        2,060,486   
St. Charles Parish, LA, Gulf Zone Opportunity Zone Rev. (Valero Energy Corp.), 4%, 12/01/40 (Put Date 6/01/22)      2,000,000        2,181,680   
State of Louisiana, “C”, 5%, 7/15/26      4,380,000        5,210,667   
    

 

 

  
             $ 56,273,295   
Maine - 0.3%                 
Maine Housing Authority Mortgage, “C-1”, 3.5%, 11/15/44    $ 5,790,000      $ 6,159,460   
Maryland - 1.0%                 
Baltimore, MD, Special Obligation (East Baltimore Research Park Project), “A”, 7%, 9/01/38    $ 1,285,000      $ 1,395,330   
Maryland Community Development Administration, Department of Housing & Community Development, “C”, 4%, 9/01/44      5,375,000        5,844,668   
Maryland Economic Development Corp. Rev. (Port America Chesapeake Terminal Project), “B”, 5.375%, 6/01/25      795,000        874,317   
Maryland Health & Higher Educational Facilities Authority Rev. (Anne Arundel Health System), “A”, 6.75%, 7/01/39
(Prerefunded 7/01/19)		      1,510,000        1,851,970   
Maryland Health & Higher Educational Facilities Authority Rev. (Charlestown Community), 6.25%, 1/01/41      2,225,000        2,524,930   
State of Maryland, “B”, 4%, 8/01/27      2,570,000        2,860,487   
State of Maryland, “C”, 5%, 11/01/19      6,890,000        8,046,142   
    

 

 

  
             $ 23,397,844   

 

29

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Massachusetts - 5.7%                 
Commonwealth of Massachusetts Transportation Fund Rev. (Accelerated Bridge Program), “A”, 5%, 6/01/23    $ 2,645,000      $ 3,287,021   
Commonwealth of Massachusetts, “A”, AMBAC, 5.5%, 8/01/30      5,000,000        6,636,450   
Massachusetts Bay Transportation Authority Rev., “A”, 5.25%, 7/01/34      2,000,000        2,243,440   
Massachusetts Bay Transportation Authority, “A”, 7%, 3/01/21      3,245,000        3,962,567   
Massachusetts Bay Transportation Authority, “A”, ETM, 7%, 3/01/21      2,870,000        3,119,288   
Massachusetts Bay Transportation Authority, Sales Tax Rev., “A”, 5%, 7/01/24      9,445,000        11,804,172   
Massachusetts Bay Transportation Authority, Sales Tax Rev., Capital Appreciation, “A-2”, 0%, 7/01/28      6,930,000        3,899,927   
Massachusetts College Building Authority Rev., “A”, 5%, 5/01/31      2,395,000        2,781,266   
Massachusetts College Building Authority Rev., “C”, 3%, 5/01/42      835,000        747,275   
Massachusetts Development Finance Agency (Visual & Performing Arts), 6%, 8/01/21      1,000,000        1,177,630   
Massachusetts Development Finance Agency Rev. (Milford Regional Medical Center), “F”, 5.75%, 7/15/43      460,000        518,015   
Massachusetts Development Finance Agency Rev. (North Hill Communities), “A”, 6.25%, 11/15/33      275,000        294,052   
Massachusetts Development Finance Agency Rev. (North Hill Communities), “A”, 6.5%, 11/15/43      435,000        467,603   
Massachusetts Development Finance Agency Rev. (Partners Healthcare), “L”, 5%, 7/01/31      2,780,000        3,184,935   
Massachusetts Development Finance Agency Rev. (Partners Healthcare), “L”, 5%, 7/01/36      1,670,000        1,891,526   
Massachusetts Development Finance Agency Rev. (Simmons College), “H”, SYNCORA, 5.25%, 10/01/33      420,000        501,014   
Massachusetts Development Finance Agency, Resource Recovery Rev. (Covanta Energy Project), “A”, 4.875%, 11/01/27      2,380,000        2,453,566   
Massachusetts Development Finance Agency, Resource Recovery Rev. (Covanta Energy Project), “C”, 5.25%, 11/01/42      1,150,000        1,191,768   
Massachusetts Development Finance Agency, Solid Waste Disposal Rev. (Dominion Energy Brayton), 5.75%, 12/01/42
(Prerefunded 5/01/19)		      670,000        792,007   
Massachusetts Educational Financing Authority, Education Loan Rev., “H”, ASSD GTY, 6.35%, 1/01/30      1,880,000        1,984,114   
Massachusetts Educational Financing Authority, Education Loan Rev., “I-A”, 5.5%, 1/01/22      225,000        256,887   
Massachusetts Educational Financing Authority, Education Loan Rev., “J”, 5%, 7/01/21      1,255,000        1,421,902   
Massachusetts Educational Financing Authority, Education Loan Rev., “J”, 4.7%, 7/01/26      2,255,000        2,410,730   

 

30

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Massachusetts - continued                 
Massachusetts Educational Financing Authority, Education Loan Rev., “J”, 4.9%, 7/01/28    $ 2,340,000      $ 2,494,089   
Massachusetts Educational Financing Authority, Education Loan Rev., “K”, 5.25%, 7/01/29      4,400,000        4,844,576   
Massachusetts Health & Educational Facilities Authority Rev. (Harvard University), 5.5%, 11/15/36 (u)      25,000,000        28,947,250   
Massachusetts Health & Educational Facilities Authority Rev. (Simmons College), 8%, 10/01/29 (Prerefunded 10/01/15)      835,000        867,490   
Massachusetts Health & Educational Facilities Authority Rev. (Simmons College), 8%, 10/01/29      1,195,000        1,241,103   
Massachusetts Health & Educational Facilities Authority Rev. (Suffolk University), “A”, 6.25%, 7/01/30      4,055,000        4,751,892   
Massachusetts Housing Finance Agency, Single Family Housing Rev., “177”, 4%, 6/01/39      1,600,000        1,719,792   
Massachusetts Port Authority Facilities Rev. (Conrac Project), “A”, 5.125%, 7/01/41      465,000        516,155   
Massachusetts Port Authority Rev., “A”, 5%, 7/01/37      470,000        526,917   
Massachusetts School Building Authority, Sales Tax Rev., “A”, 5%, 8/15/26      12,500,000        15,036,000   
Massachusetts Water Resources Authority, “B”, AGM, 5.25%, 8/01/29      4,215,000        5,491,176   
Massachusetts Water Resources Authority, ETM, 6.5%, 7/15/19      4,340,000        4,811,715   
    

 

 

  
             $ 128,275,310   
Michigan - 2.7%                 
Detroit, MI, Distributable State Aid, 5.25%, 11/01/35    $ 5,000,000      $ 5,421,650   
Detroit, MI, Sewage Disposal System Rev., Senior Lien, “A”, 5.25%, 7/01/39      5,920,000        6,412,366   
Detroit, MI, Water & Sewerage Department, Senior Lien Sewage Disposal System Rev., “A”, 5%, 7/01/19      1,730,000        1,922,480   
Detroit, MI, Water & Sewerage Department, Senior Lien Sewage Disposal System Rev., “A”, 5%, 7/01/20      1,725,000        1,943,592   
Detroit, MI, Water & Sewerage Department, Senior Lien Sewage Disposal System Rev., “A”, AGM, 5%, 7/01/16      1,560,000        1,643,928   
Detroit, MI, Water Supply System Rev., Senior Lien, “A”, AGM, 5%, 7/01/23      930,000        962,029   
Detroit, MI, Water Supply System Rev., Senior Lien, “A”, AGM, 5%, 7/01/25      130,000        133,840   
Detroit, MI, Water Supply System Rev., Senior Lien, “A”, 5%, 7/01/36      295,000        313,331   
Detroit, MI, Water Supply System Rev., Senior Lien, “C”, 5%, 7/01/41      410,000        434,079   
Grand Valley, MI, State University Rev., 5.5%, 12/01/27      985,000        1,067,346   
Grand Valley, MI, State University Rev., 5.625%, 12/01/29      480,000        521,122   

 

31

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Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Michigan - continued                 
Michigan Finance Authority State Aid Rev. (School District of the City of Detroit), 2.85%, 8/20/15    $ 1,965,000      $ 1,972,840   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “C-1”, 5%, 7/01/44      450,000        478,926   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “C-7”, NATL, 5%, 7/01/32      580,000        642,408   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/35      240,000        266,422   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-1”, AGM, 5%, 7/01/37      570,000        631,805   
Michigan Finance Authority Rev. (Detroit Water and Sewerage Department), “D-6”, NATL, 5%, 7/01/36      485,000        532,389   
Michigan Finance Authority Rev. (School District of the City of Detroit), 5.5%, 6/01/21      2,045,000        2,349,910   
Michigan Finance Authority Rev. (Trinity Health Corp.), 5%, 12/01/35      3,195,000        3,609,264   
Michigan Hospital Finance Authority Rev. (Henry Ford Health System), 5.75%, 11/15/39      7,165,000        8,145,100   
Michigan Housing Development Authority, GNMA, 5.2%, 8/20/38      1,200,000        1,219,008   
Michigan Strategic Fund (Waste Management, Inc.), 1.5%, 8/01/27 (Put Date 8/01/17)      5,495,000        5,481,372   
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.625%, 7/01/20      985,000        1,165,324   
Michigan Strategic Fund Ltd. Obligation Rev. (Detroit Edison Co.), 5.5%, 8/01/29 (Put Date 8/01/16)      1,970,000        2,078,429   
Regents of the University of Michigan General Rev., “C”, 5%, 4/01/17      5,220,000        5,684,162   
Royal Oak, MI, Hospital Finance Authority Rev. (William Beaumont Hospital), “V”, 8.25%, 9/01/39 (Prerefunded 9/01/18)      2,325,000        2,889,138   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, 5%, 12/01/44      1,000,000        1,111,670   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “B”, BAM, 5%, 12/01/39      610,000        697,919   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/39      470,000        521,268   
Wayne County, MI, Airport Authority Rev. (Detroit Metropolitan Wayne County Airport), “C”, 5%, 12/01/44      1,020,000        1,128,640   
    

 

 

  
             $ 61,381,757   
Minnesota - 0.4%                 
St. Louis Park, MN, Health Care Facilities Rev. (Nicollet Health Services), 5.75%, 7/01/39    $ 6,445,000      $ 7,433,341   
University of Minnesota, “A”, 5%, 12/01/25      710,000        845,553   
    

 

 

  
             $ 8,278,894   

 

32

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Mississippi - 0.9%                 
Alcorn State University, MS, Educational Building Corp. Rev. (Student Housing Project), “A”, 5.125%, 9/01/34    $ 2,500,000      $ 2,839,200   
Alcorn State University, MS, Educational Building Corp. Rev. (Student Housing Project), “A”, 5.25%, 9/01/39      1,625,000        1,849,608   
Lowndes County, MS, Solid Waste Disposal & Pollution Control Rev. (Weyerhaeuser Co.), 6.8%, 4/01/22      110,000        139,314   
Mississippi Development Bank Special Obligation (City of Jackson Water and Sewer System Rev. Bond Project), AGM, 6.875%, 12/01/40      495,000        649,133   
Mississippi Development Bank Special Obligation (Harrison County Coliseum), “A”, 5.25%, 1/01/34      2,455,000        3,140,215   
Mississippi Development Bank Special Obligation (Marshall County Industrial Development Authority Mississippi Highway Construction Project), 5%, 1/01/28      1,450,000        1,653,508   
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist Memorial Healthcare), “A”, 5%, 9/01/22      1,445,000        1,665,232   
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist Memorial Healthcare), “A”, 5%, 9/01/23      3,765,000        4,357,686   
Mississippi State University, Educational Building Corp. Rev., 5.25%, 8/01/38      1,250,000        1,447,975   
University of Southern Mississippi Educational Building Corp. Rev. (Campus Facilities Project), 5.25%, 9/01/32      1,665,000        1,865,166   
University of Southern Mississippi Educational Building Corp. Rev. (Campus Facilities Project), 5.375%, 9/01/36      610,000        688,702   
    

 

 

  
             $ 20,295,739   
Missouri - 0.6%                 
Grundy County, MO, Industrial Development Authority, Health Facilities Rev. (Wright Memorial Hospital), 6.75%, 9/01/34    $ 1,410,000      $ 1,543,400   
Missouri Health & Educational Facilities Authority Rev. (A.T. Still University Health Services), 5%, 10/01/39      730,000        830,025   
Missouri Health & Educational Facilities Authority Rev. (Lutheran Senior Service Projects), “A”, 5%, 2/01/35      4,145,000        4,498,859   
Missouri Health & Educational Facilities Authority Rev. (Lutheran Senior Service Projects), “A”, 5%, 2/01/44      1,035,000        1,116,920   
Missouri Health & Educational Facilities Authority Rev. (SSM Health Care), “A”, 5%, 6/01/31      2,615,000        3,008,714   
Missouri Housing Development Commission, Single Family Mortgage Rev. (Special Home Ownership Loan Program), “B”, GNMA, 4%, 11/01/40      1,760,000        1,915,549   
    

 

 

  
             $ 12,913,467   

 

33

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Montana - 0.1%                 
Montana Board of Housing Single Family Program (Federally Insured or Guaranteed Mortgage Loans), “A-2”, 3%, 12/01/43    $ 2,430,000      $ 2,511,794   
Nebraska - 1.0%                 
Douglas County, NE, Educational Facilities Rev. (Creighton University), “A”, 5.875%, 7/01/40    $ 6,355,000      $ 7,492,990   
Nebraska Investment Finance Authority Rev., Single Family Housing, “E”, 3%, 3/01/43      1,380,000        1,422,739   
Nebraska Investment Finance Authority, Housing Rev., “A”, 3%, 3/01/44      1,790,000        1,857,053   
Nebraska Investment Finance Authority, Housing Rev., “A”, 4%, 9/01/44      3,320,000        3,607,877   
Nebraska Public Power District Rev., “C”, NATL, 5%, 1/01/18 (Prerefunded 1/01/16)      800,000        828,640   
Nebraska Public Power District Rev., Unrefunded, “C”, NATL, 5%, 1/01/18      7,535,000        7,805,280   
    

 

 

  
             $ 23,014,579   
New Hampshire - 0.3%                 
New Hampshire Business Finance Authority Rev. (Elliot Hospital Obligated Group), “A”, 6%, 10/01/27    $ 4,610,000      $ 5,240,095   
New Hampshire Business Finance Authority Rev. (Huggins Hospital), 6.875%, 10/01/39      480,000        519,682   
New Hampshire Business Finance Authority, Solid Waste Disposal Rev. (Casella Waste Systems, Inc. Project), 4%, 4/01/29 (Put Date 10/01/19)      185,000        187,205   
    

 

 

  
             $ 5,946,982   
New Jersey - 3.5%                 
New Jersey Casino Reinvestment Development Authority, Luxury Tax Rev., AGM, 5%, 11/01/29    $ 555,000      $ 624,192   
New Jersey Casino Reinvestment Development Authority, Luxury Tax Rev., AGM, 5%, 11/01/30      850,000        950,088   
New Jersey Casino Reinvestment Development Authority, Luxury Tax Rev., AGM, 5%, 11/01/31      555,000        618,442   
New Jersey Casino Reinvestment Development Authority, Luxury Tax Rev., AGM, 5%, 11/01/32      555,000        616,061   
New Jersey Economic Development Authority Rev. (The Goethals Bridge Replacement Project), 5.5%, 1/01/27      470,000        549,562   
New Jersey Economic Development Authority Rev. (The Goethals Bridge Replacement Project), 5%, 1/01/28      470,000        527,993   
New Jersey Economic Development Authority Rev. (The Goethals Bridge Replacement Project), AGM, 5%, 1/01/31      1,415,000        1,587,319   
New Jersey Economic Development Authority Rev. (The Goethals Bridge Replacement Project), AGM, 5.125%, 1/01/39      870,000        964,230   

 

34

Table of Contents

Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
New Jersey - continued                 
New Jersey Economic Development Authority Rev. (The Goethals Bridge Replacement Project), AGM, 5.125%, 7/01/42    $ 435,000      $ 479,922   
New Jersey Economic Development Authority, Special Facilities Rev. (Continental Airlines, Inc.), 4.875%, 9/15/19      1,365,000        1,437,755   
New Jersey Economic Development Authority, Special Facilities Rev. (Continental Airlines, Inc.), 5.25%, 9/15/29      3,405,000        3,727,590   
New Jersey Economic Development Authority, Special Facilities Rev. (Continental Airlines, Inc.), “A”, 5.625%, 11/15/30      400,000        453,128   
New Jersey Economic Development Authority, Special Facilities Rev. (Continental Airlines, Inc.), “B”, 5.625%, 11/15/30      370,000        421,241   
New Jersey Economic Development Authority, Water Facilities Rev. (New Jersey American Water Co.), “A”, 5.7%, 10/01/39      5,000,000        5,767,450   
New Jersey Educational Facilities Authority Rev. (University of Medicine & Dentistry), “B”, 7.5%, 12/01/32 (Prerefunded 6/01/19)      4,195,000        5,257,761   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.5%, 6/01/23      28,440,000        28,508,256   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 4.75%, 6/01/34      7,960,000        6,083,669   
New Jersey Tobacco Settlement Financing Corp., “1-A”, 5%, 6/01/41      5,000,000        3,834,850   
New Jersey Tobacco Settlement Financing Corp., Capital Appreciation, “1-B”, 0%, 6/01/41      27,535,000        6,719,641   
New Jersey Tobacco Settlement Financing Corp., Capital Appreciation, “1-C”, 0%, 6/01/41      365,000        85,812   
New Jersey Transportation Trust Fund Authority Rev., “D”, 5.25%, 12/15/23      7,500,000        8,668,650   
    

 

 

  
             $ 77,883,612   
New Mexico - 1.1%                 
Farmington, NM, Pollution Control Rev. (Public Service New Mexico), “D”, 5.9%, 6/01/40    $ 9,975,000      $ 11,167,013   
New Mexico Mortgage Finance Authority Rev., GNMA, 5.95%, 7/01/37      205,000        208,397   
New Mexico Mortgage Finance Authority Rev., “I”, GNMA, 5.75%, 7/01/38      415,000        435,912   
New Mexico Municipal Energy Acquisition Authority, Gas Supply Rev., “A”, 5%, 11/01/39 (Put Date 8/01/19)      11,435,000        13,030,297   
    

 

 

  
             $ 24,841,619   
New York - 5.2%                 
Brooklyn, NY, Arena Local Development Corp. (Barclays Center Project), 6%, 7/15/30    $ 2,015,000      $ 2,360,149   
Build NYC Resource Corp. Solid Waste Disposal Rev. (Pratt Paper, Inc. Project), 5%, 1/01/35      1,455,000        1,571,429   

 

35

Table of Contents

Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
New York - continued                 
Hempstead, NY, Local Development Corp. Rev. (Hofstra University Project), 5%, 7/01/25    $ 1,450,000      $ 1,664,397   
Hempstead, NY, Local Development Corp. Rev. (Hofstra University Project), 5%, 7/01/26      1,080,000        1,230,952   
Hempstead, NY, Local Development Corp. Rev. (Hofstra University Project), 5%, 7/01/28      275,000        309,375   
Hudson Yards, NY, Infrastructure Corp. Rev., “A”, 5.75%, 2/15/47      3,950,000        4,603,093   
Liberty, NY, Development Corp. Rev. (Goldman Sachs Headquarters), 5.25%, 10/01/35      6,010,000        7,262,544   
New York Dormitory Authority Rev., Non-State Supported Debt (Bronx-Lebanon Hospital Center), LOC, 6.5%, 8/15/30      1,475,000        1,721,089   
New York Dormitory Authority Rev., Non-State Supported Debt (Bronx-Lebanon Hospital Center), LOC, 6.25%, 2/15/35      1,395,000        1,609,174   
New York Dormitory Authority Rev., State Personal Income Tax, “A”, 5%, 12/15/25      5,000,000        6,106,400   
New York Environmental Facilities Corp., Municipal Water Finance Authority Project, 5%, 6/15/25      2,300,000        2,723,660   
New York Environmental Facilities, “C”, 5%, 5/15/41      2,745,000        3,098,995   
New York Environmental Facilities, ETM, 5%, 6/15/16      570,000        588,696   
New York Housing Finance Agency Affordable Housing Rev., “D”, 0.8%, 11/01/16      1,470,000        1,474,043   
New York Housing Finance Agency Affordable Housing Rev., “D”, 0.8%, 11/01/16      1,460,000        1,464,818   
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “1”, 5%, 11/15/44      4,275,000        4,499,267   
New York Liberty Development Corp., Liberty Rev. (3 World Trade Center Project), “2”, 5.375%, 11/15/40      3,190,000        3,526,067   
New York Liberty Development Corp., Liberty Rev. (World Trade Center Project), 5%, 11/15/31      2,300,000        2,609,787   
New York Thruway Authority General Rev., Junior Indebtedness Obligation, “A”, 5%, 5/01/19      3,325,000        3,802,703   
New York Tobacco Settlement Financing Corp., Asset-Backed Rev., “B”, 5%, 6/01/21      5,740,000        6,052,887   
New York, NY, “B”, 5%, 8/01/20      10,730,000        12,567,620   
New York, NY, “J-4”, FRN, 0.57%, 8/01/25      1,715,000        1,713,388   
New York, NY, “J-9”, FRN, 0.42%, 8/01/27      5,645,000        5,645,113   
New York, NY, City Housing Development Corp. (8 Spruce Street), “F”, 4.5%, 2/15/48      574,420        586,667   
New York, NY, City Industrial Development Agency Special Facility Rev. (American Airlines, Inc. - JFK International Airport Project), 7.625%, 8/01/25      3,375,000        3,673,316   
New York, NY, City Industrial Development Agency Special Facility Rev. (American Airlines, Inc. - JFK International Airport Project), 7.75%, 8/01/31      1,190,000        1,297,528   

 

36

Table of Contents

Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
New York - continued                 
New York, NY, City Industrial Development Agency Special Facility Rev. (American Airlines, Inc. - JFK International Airport Project), “B”, 8.5%, 8/01/28    $ 1,875,000      $ 1,925,850   
New York, NY, Housing Development Corp., Multi-Family Housing Rev., “E-1-A”, 0.75%, 11/01/16      2,795,000        2,795,559   
New York, NY, Housing Development Corp., Multi-Family Housing Rev., “E-1-B”, 1.2%, 11/01/17      2,915,000        2,917,594   
New York, NY, Municipal Water Finance Authority, Water & Sewer Systems Rev., “CC”, 5%, 6/15/18      3,945,000        4,263,835   
New York, NY, Municipal Water Finance Authority, Water & Sewer Systems Rev., “CC”, 5%, 6/15/19      2,795,000        3,109,242   
New York, NY, Municipal Water Finance Authority, Water & Sewer Systems Rev., “CC”, 5%, 6/15/47      1,085,000        1,240,546   
Niagara County, NY, Industrial Development Agency, Solid Waste Disposal Rev. (Covanta Energy Project), “A”, 5.25%, 11/01/42      1,170,000        1,216,800   
Onondaga, NY, Civic Development Corp. Rev. (St. Joseph’s Hospital Health Center), 5%, 7/01/25      110,000        118,803   
Onondaga, NY, Civic Development Corp. Rev. (St. Joseph’s Hospital Health Center), 5.125%, 7/01/31      110,000        118,392   
Port Authority of NY & NJ, (170th Series), 5%, 12/01/16      1,815,000        1,947,205   
Port Authority of NY & NJ, (170th Series), 5%, 12/01/17      1,795,000        1,982,757   
Port Authority of NY & NJ, (170th Series), 5%, 12/01/18      1,025,000        1,156,405   
Port Authority of NY & NJ, (170th Series), 5%, 12/01/19      1,765,000        2,027,456   
Port Authority of NY & NJ, Special Obligation Rev. (JFK International Air Terminal LLC), 6%, 12/01/36      2,315,000        2,732,487   
Seneca Nation of Indians, NY, Capital Improvements Authority, Special Obligation, 5%, 12/01/23 (n)      3,995,000        4,171,499   
    

 

 

  
             $ 115,487,587   
North Carolina - 0.5%                 
North Carolina Eastern Municipal Power Agency, “A”, NATL, 6.5%, 1/01/18    $ 9,250,000      $ 10,615,485   
North Carolina Medical Care Commission, Retirement Facilities First Mortgage Rev. (United Church Homes and Services), “A”, 5%, 9/01/37      100,000        100,968   
    

 

 

  
             $ 10,716,453   
North Dakota - 0.1%                 
North Dakota Housing Finance Agency Rev. (Home Mortgage Finance Program), “A”, 4%, 7/01/34    $ 1,530,000      $ 1,652,660   
Ohio - 1.7%                 
American Municipal Power, Inc. Rev. (AMP Fremont Energy Center Project), “B”, 5%, 2/15/24    $ 1,500,000      $ 1,765,575   

 

37

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Ohio - continued                 
Buckeye, OH, Tobacco Settlement Financing Authority, “A-2”, 6.5%, 6/01/47    $ 5,000,000      $ 4,437,250   
Cleveland-Cuyahoga County, OH, Port Authority Development Rev. (Euclid Avenue Development Corp. Project), 5%, 8/01/44      1,225,000        1,324,335   
Cleveland-Cuyahoga County, OH, Port Authority Rev., 7%, 5/15/40      1,100,000        1,279,828   
Montgomery County, OH, Health Care & Multifamily Housing Rev. (St. Leonard), 6.375%, 4/01/30      1,915,000        2,099,280   
Montgomery County, OH, Health Care & Multifamily Housing Rev. (St. Leonard), 6.625%, 4/01/40      2,770,000        3,069,132   
Muskingum County, OH, Hospital Facilities Rev. (Genesis Health System Obligated Group), 5%, 2/15/33      645,000        676,166   
Muskingum County, OH, Hospital Facilities Rev. (Genesis Health System Obligated Group), 5%, 2/15/44      480,000        497,347   
Muskingum County, OH, Hospital Facilities Rev. (Genesis Health System Obligated Group), 5%, 2/15/48      645,000        667,646   
Scioto County, OH, Hospital Facilities Rev. (Southern Ohio Medical Center), 5.625%, 2/15/31      1,095,000        1,210,731   
Scioto County, OH, Hospital Facilities Rev. (Southern Ohio Medical Center), 5.75%, 2/15/38      4,195,000        4,629,392   
Southeastern Ohio Port Authority, Hospital Facilities Improvement Rev. (Memorial Health System Obligated Group Project), 5.5%, 12/01/29      130,000        141,046   
Southeastern Ohio Port Authority, Hospital Facilities Improvement Rev. (Memorial Health System Obligated Group Project), 5%, 12/01/35      720,000        737,705   
Southeastern Ohio Port Authority, Hospital Facilities Improvement Rev. (Memorial Health System Obligated Group Project), 5%, 12/01/43      925,000        940,549   
Southeastern Ohio Port Authority, Hospital Facilities Improvement Rev. (Memorial Health System Obligated Group Project), 5.5%, 12/01/43      1,130,000        1,195,009   
Summit County, OH, Port Authority Building Rev. (Flats East Development Recovery Zone Facility Bonds), 6.875%, 5/15/40      415,000        474,743   
Summit County, OH, Port Authority Building Rev. (Seville Project), “A”, 5.1%, 5/15/25      150,000        150,158   
The Ohio State University, Special Purpose Rev., “A”, 5%, 6/01/38 (u)      3,355,000        3,821,781   
The Ohio State University, Special Purpose Rev., “A”, 5%, 6/01/43 (u)      8,150,000        9,252,369   
    

 

 

  
             $ 38,370,042   
Oklahoma - 0.7%                 
Oklahoma County, OK, Home Finance Authority, Single Family Mortgage Rev., “A”, GNMA, 5.4%, 10/01/38    $ 460,000      $ 460,000   

 

38

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Oklahoma - continued                 
Oklahoma Industries Authority Rev. (Oklahoma Medical Research Foundation Project), 5.5%, 7/01/29    $ 4,400,000      $ 4,893,108   
Tulsa OK, Airport Improvement Trust Rev., “A”, BAM, 5%, 6/01/45      755,000        817,242   
Tulsa, OK, Industrial Authority Rev. (University of Tulsa), 6%, 10/01/27      4,670,000        5,405,478   
Tulsa, OK, Municipal Airport Trust Rev. (American Airlines, Inc.), “B”, 5.5%, 6/01/35      1,910,000        2,070,574   
Tulsa, OK, Municipal Airport Trust Rev. (American Airlines, Inc.), “B”, 5.5%, 12/01/35      1,440,000        1,576,541   
    

 

 

  
             $ 15,222,943   
Oregon - 0.1%                 
Forest Grove, OR, Student Housing Rev. (Oak Tree Foundation, Inc.), 5.5%, 3/01/37    $ 2,445,000      $ 2,537,568   
Pennsylvania - 4.4%                 
Allegheny County, PA, Higher Education Building Authority Rev. (Robert Morris University), “A”, 5.9%, 10/15/28    $ 1,195,000      $ 1,315,576   
Clarion County, PA, Industrial Development Authority, Student Housing Rev. (Clarion University Foundation, Inc.), 5%, 7/01/34      490,000        527,152   
Commonwealth of Pennsylvania, State Public School Building Authority Lease Rev. (School District of Philadelphia Project), 5%, 4/01/28      1,870,000        2,074,971   
Cumberland County, PA, Municipal Authority Rev. (Asbury Atlantic, Inc.), 6%, 1/01/30      715,000        777,219   
Cumberland County, PA, Municipal Authority Rev. (Asbury Atlantic, Inc.), 6%, 1/01/40      1,910,000        2,053,957   
Cumberland County, PA, Municipal Authority Rev. (Diakon Lutheran Social Ministries), 6.125%, 1/01/29      830,000        923,168   
Cumberland County, PA, Municipal Authority Rev. (Diakon Lutheran Social Ministries), 6.375%, 1/01/39      5,045,000        5,631,078   
Dallas, PA, Area Municipal Authority Rev. (Misericordia University Project), 5%, 5/01/29      1,005,000        1,115,620   
Delaware County, PA, Authority College Rev. (Neumann University), 6%, 10/01/25      490,000        558,046   
Delaware County, PA, Industrial Development Authority, Resource Recovery Facilities Rev. (American Ref-Fuel Co.), “A”, 6.2%, 7/01/19      1,310,000        1,311,336   
Delaware Valley, PA, Regional Finance Authority, 5.75%, 7/01/17      3,255,000        3,583,495   
Delaware Valley, PA, Regional Finance Authority, AMBAC, 5.5%, 8/01/18      9,640,000        10,810,778   
Delaware Valley, PA, Regional Finance Authority, “C”, FRN, 0.925%, 6/01/37      7,000,000        5,925,920   

 

39

Table of Contents

Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Pennsylvania - continued                 
East Hempfield, PA, Industrial Development Authority Rev. (Millersville University Student Services), 5%, 7/01/39    $ 485,000      $ 518,678   
East Hempfield, PA, Industrial Development Authority Rev. (Millersville University Student Services), 5%, 7/01/46      265,000        281,931   
Lancaster County, PA, Hospital Authority Health System Rev. (Masonic Villages Project), 5%, 11/01/27      670,000        791,371   
Lancaster County, PA, Hospital Authority Health System Rev. (Masonic Villages Project), 5%, 11/01/35      250,000        283,213   
Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan Hospital), 5.9%, 11/15/28      1,700,000        1,701,394   
Lehigh County, PA, Water and Sewer Authority Rev. (Allentown Concession), “A”, 5%, 12/01/43      9,610,000        10,925,417   
Lehigh County, PA, Water and Sewer Authority Rev. (Allentown Concession), Capital Appreciation, “B”, 0%, 12/01/36      12,095,000        4,710,519   
Lehigh County, PA, Water and Sewer Authority Rev. (Allentown Concession), Capital Appreciation, “B”, 0%, 12/01/37      9,795,000        3,652,262   
Luzerne County, PA, AGM, 6.75%, 11/01/23      1,140,000        1,377,758   
Montgomery County, PA, Higher Education & Health Authority Rev. (AHF/Montgomery), 6.875%, 4/01/36      720,000        748,944   
Montgomery County, PA, Industrial Development Authority Rev. (Whitemarsh Continuing Care Retirement Community Project), 5.375%, 1/01/50      1,015,000        1,025,465   
Pennsylvania Convention Center Authority Rev., ETM, FGIC, 6.7%, 9/01/16      7,860,000        8,272,178   
Pennsylvania Economic Development Financing Authority Unemployment Compensation Rev., “B”, 5%, 1/01/23      3,230,000        3,343,631   
Pennsylvania Economic Development Financing Authority Unemployment Compensation Rev., “B”, 5%, 7/01/23      1,940,000        1,963,086   
Pennsylvania Economic Development Financing Authority, (The Pennsylvania Rapid Bridge Replacement Project), 5%, 12/31/34      8,635,000        9,550,914   
Pennsylvania Economic Development Financing Authority, Sewer Sludge Disposal Rev. (Philadelphia Biosolids Facility), 6.25%, 1/01/32      3,110,000        3,439,505   
Pennsylvania Higher Educational Facilities Authority Rev. (Edinboro University Foundation), 5.8%, 7/01/30      510,000        555,064   
Philadelphia, PA, Authority for Industrial Development Rev. (MaST Charter School), 6%, 8/01/35      415,000        456,782   
Philadelphia, PA, Authority for Industrial Development Rev. (Philadelphia Performing Arts Charter School Project), 6.5%, 6/15/33      2,425,000        2,483,685   
Philadelphia, PA, Authority for Industrial Development Rev. (Philadelphia Performing Arts Charter School Project), 6.75%, 6/15/43      1,175,000        1,206,913   

 

40

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Pennsylvania - continued                 
Philadelphia, PA, Authority for Industrial Development Rev. (Tacony Academy Charter School Project), “A-1”, 6.75%, 6/15/33    $ 150,000      $ 166,041   
Philadelphia, PA, Authority for Industrial Development Rev. (Tacony Academy Charter School Project), “A-1”, 7%, 6/15/43      355,000        396,702   
Philadelphia, PA, Municipal Authority Rev., 6.5%, 4/01/34      1,020,000        1,177,865   
Philadelphia, PA, Redevelopment Authority Rev., BAM, 5%, 4/15/24      1,900,000        2,187,223   
Reading, PA, School District, “A”, 5%, 4/01/20      1,000,000        1,115,830   
Washington County, PA, Redevelopment Authority (Victory Centre Project), “A”, 5.45%, 7/01/35      265,000        270,242   
    

 

 

  
             $ 99,210,929   
Puerto Rico - 0.7%                 
Commonwealth of Puerto Rico Highway & Transportation Authority Rev., AGM, 5.5%, 7/01/29    $ 70,000      $ 75,461   
Commonwealth of Puerto Rico, “A”, ETM, FGIC, 5.5%, 7/01/15      5,585,000        5,659,225   
Commonwealth of Puerto Rico, Public Improvement, “A”, NATL, 5.5%, 7/01/16      295,000        301,699   
Puerto Rico Electric Power Authority Rev., NATL, 5%, 7/01/19      640,000        654,694   
Puerto Rico Electric Power Authority Rev., “DDD”, AGM, 3.625%, 7/01/23      445,000        415,470   
Puerto Rico Electric Power Authority Rev., “DDD”, AGM, 3.65%, 7/01/24      1,915,000        1,776,354   
Puerto Rico Electric Power Authority Rev., “KK”, NATL, 5.5%, 7/01/16      150,000        154,916   
Puerto Rico Electric Power Authority Rev., “LL”, NATL, 5.5%, 7/01/17      120,000        123,830   
Puerto Rico Electric Power Authority Rev., “MM”, NATL, 5%, 7/01/20      50,000        51,154   
Puerto Rico Electric Power Authority Rev., “PP”, NATL, 5%, 7/01/24      60,000        59,995   
Puerto Rico Electric Power Authority Rev., “SS”, ASSD GTY, 4.375%, 7/01/30      230,000        210,627   
Puerto Rico Electric Power Authority Rev., “UU”, NATL, 4.5%, 7/01/18      135,000        136,007   
Puerto Rico Electric Power Authority Rev., “UU”, AGM, 5%, 7/01/22      225,000        227,079   
Puerto Rico Electric Power Authority Rev., “UU”, ASSD GTY, 4.25%, 7/01/27      1,385,000        1,296,651   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5%, 4/01/17      465,000        468,074   

 

41

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Puerto Rico - continued                 
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5%, 4/01/18    $ 305,000      $ 305,756   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 4%, 4/01/20      150,000        141,785   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5%, 4/01/21      520,000        509,200   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5%, 4/01/22      600,000        579,048   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5%, 4/01/27      1,010,000        922,857   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.125%, 4/01/32      390,000        343,715   
Puerto Rico Industrial, Tourist, Educational, Medical, & Environmental Control Facilities Financing Authority, Higher Education Rev. (Ana G. Mendez University System Project), 5.375%, 4/01/42      545,000        469,294   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “A”, 5.5%, 8/01/28 (Prerefunded 8/01/19)      45,000        53,118   
    

 

 

  
             $ 14,936,009   
Rhode Island - 1.1%                 
Providence, RI, “A”, 5%, 1/15/25    $ 1,345,000      $ 1,544,329   
Rhode Island Health & Educational Building Corp. Rev., Hospital Financing (Lifespan Obligated Group), “A”, ASSD GTY, 7%, 5/15/39      7,645,000        9,146,707   
Rhode Island Student Loan Authority, Student Loan Rev., “A”, 3%, 12/01/21      4,890,000        4,880,269   
Rhode Island Student Loan Authority, Student Loan Rev., “A”, 3.25%, 12/01/22      1,500,000        1,513,710   
Rhode Island Student Loan Authority, Student Loan Rev., “A”, 3.375%, 12/01/23      2,500,000        2,514,250   

 

42

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Rhode Island - continued                 
Rhode Island Student Loan Authority, Student Loan Rev., “A”, 3.625%, 12/01/25    $ 4,115,000      $ 4,137,921   
    

 

 

  
             $ 23,737,186   
South Carolina - 1.3%                 
Chesterfield County, SC, School District, 5%, 3/01/25    $ 2,250,000      $ 2,651,400   
Lancaster County, SC, Assessment Rev. (Sun City Carolina Lakes), 5.45%, 12/01/37      40,000        40,339   
Piedmont, SC, Municipal Power Agency, NATL, 6.25%, 1/01/21      4,150,000        5,143,469   
Richland County, SC, Environmental Improvement Rev. (International Paper), “A”, 3.875%, 4/01/23      5,750,000        6,207,413   
South Carolina Public Service Authority Rev., “A”, 5.125%, 12/01/43      2,745,000        3,116,069   
South Carolina Public Service Authority Rev., “B”, 5.125%, 12/01/43      6,550,000        7,435,429   
South Carolina Public Service Authority Rev., “C”, 5%, 12/01/36      2,920,000        3,323,310   
    

 

 

  
             $ 27,917,429   
South Dakota - 0.2%                 
South Dakota Educational Enhancement Funding Corp., Tobacco Settlement Rev., “B”, 5%, 6/01/24    $ 1,000,000      $ 1,159,440   
South Dakota Educational Enhancement Funding Corp., Tobacco Settlement Rev., “B”, 5%, 6/01/25      1,000,000        1,152,230   
South Dakota Educational Enhancement Funding Corp., Tobacco Settlement Rev., “B”, 5%, 6/01/26      1,400,000        1,602,160   
South Dakota Health & Educational Facilities Authority Rev. (Avera Health), “A”, 5%, 7/01/42      1,205,000        1,342,093   
    

 

 

  
             $ 5,255,923   
Tennessee - 2.1%                 
Chattanooga, TN, Health Educational & Housing Facility Board Rev. (Catholic Health Initiatives), “A”, 5%, 10/01/44    $ 1,420,000      $ 1,561,957   
Chattanooga, TN, Health Educational & Housing Facility Board Rev. (Catholic Health Initiatives), “A”, 5.25%, 1/01/45      10,310,000        11,674,425   
Claiborne County, TN, Industrial Development Board Rev. (Lincoln Memorial University Project), 6.125%, 10/01/40      3,000,000        3,277,920   
Hardeman County, TN, Correctional Facilities Corp. (Corrections Corp. of America), 7.375%, 8/01/17      275,000        275,688   
Metropolitan Government of Nashville & Davidson County, TN, Electric Rev., “A”, 5%, 5/15/29      4,765,000        5,538,502   
Metropolitan Government of Nashville & Davidson County, TN, Electric Rev., “A”, 5%, 5/15/30      2,500,000        2,902,125   
Metropolitan Government of Nashville & Davidson County, TN, Health & Educational Facilities Board Rev. (Meharry Medical College), AMBAC, 6%, 12/01/16      1,905,000        1,978,838   

 

43

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Tennessee - continued                 
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/17    $ 1,575,000      $ 1,725,444   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/19      1,500,000        1,704,390   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/22      1,665,000        1,940,091   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/23      2,385,000        2,804,760   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/24      2,215,000        2,611,197   
Tennessee Energy Acquisition Corp., Gas Rev., “A”, 5.25%, 9/01/26      2,805,000        3,336,435   
Tennessee Housing Development Agency, Residential Financing Program Rev., “2-C”, 4%, 1/01/45      2,645,000        2,880,405   
Tennessee School Board Authority, Higher Education Facilities Rev., 5.125%, 5/01/33 (Prerefunded 5/01/18)      270,000        304,260   
Tennessee School Board Authority, Higher Education Facilities Rev., 5.125%, 5/01/33 (Prerefunded 5/01/18)      1,230,000        1,378,363   
    

 

 

  
             $ 45,894,800   
Texas - 7.5%                 
Austin, TX, Convention Center (Convention Enterprises, Inc.), “A”, SYNCORA, 5.25%, 1/01/17    $ 995,000      $ 1,055,178   
Austin, TX, Convention Center (Convention Enterprises, Inc.), “A”, SYNCORA, 5.25%, 1/01/19      1,375,000        1,445,950   
Austin, TX, Convention Center (Convention Enterprises, Inc.), “A”, SYNCORA, 5.25%, 1/01/20      1,120,000        1,177,915   
Austin, TX, Convention Center (Convention Enterprises, Inc.), “A”, SYNCORA, 5.25%, 1/01/24      2,230,000        2,306,132   
Austin, TX, Water & Wastewater System Rev., 5%, 11/15/27      3,000,000        3,571,650   
Bell County, TX, Health Facility Development Corp. (Advanced Living Technologies, Inc.), 8%, 12/15/36 (d)(q)      1,595,000        16   
Brazos River, TX, Brazoria County Environmental Rev. (Dow Chemical, Co.), “A-3”, 5.125%, 5/15/33      2,100,000        2,251,221   
Brazos River, TX, Harbor Navigation District (Dow Chemical Co.), “A”, 5.95%, 5/15/33      7,310,000        8,188,589   
Clifton, TX, Higher Education Finance Corp. Rev. (Idea Public Schools), 5%, 8/15/42      4,325,000        4,673,984   
Clifton, TX, Higher Education Finance Corp. Rev. (Uplift Education), “A”, 6.125%, 12/01/40      2,355,000        2,741,102   
Clifton, TX, Higher Education Finance Corp. Rev. (Uplift Education), “A”, 6.25%, 12/01/45      1,425,000        1,663,816   
Dallas and Fort Worth, TX, International Airport Rev., “B”, 5%, 11/01/44      2,730,000        3,050,693   
Dallas and Fort Worth, TX, International Airport Rev., “C”, 5%, 11/01/45      1,875,000        2,086,819   
Dallas, TX, Independent School District, PSF, 5%, 8/15/23      6,000,000        7,310,340   
Dallas, TX, Waterworks & Sewer System Rev., 5%, 10/01/39      10,000,000        11,543,800   
Decatur Hospital Authority Rev. (Wise Regional Health System), “A”, 5.25%, 9/01/44      415,000        445,913   

 

44

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Texas - continued                 
El Paso, TX, Water & Sewer Rev., 5%, 3/01/28    $ 455,000      $ 528,401   
Fort Worth, TX, Independent School District, Unlimited Tax School Building, PSF, 5%, 2/15/39      3,685,000        4,283,297   
Gregg County, TX, Health Facilities Development Corp. Hospital Rev., (Good Shepherd Obligated Group), “A”, FRN, 4.02%, 10/01/29 (Put Date 3/01/17)      1,400,000        1,422,666   
Gulf Coast Waste Disposal Authority (Waste Management, Inc.), 5.2%, 5/01/28      300,000        313,134   
Gulf Coast, TX, Industrial Development Authority Rev. (Microgy Holdings Project), 7%, 12/01/36 (a)(d)      116,013        1   
Harris County, TX, Cultural Education Facilities Finance Corp. Medical Facilities Rev. (Baylor College of Medicine), “D”, 5.625%, 11/15/32      8,235,000        9,158,885   
Harris County, TX, Cultural Education Facilities Financial Corp., Thermal Utilities Rev. (Teco Project), “A”, 5.25%, 11/15/35      1,560,000        1,776,731   
Harris County, TX, Health Facilities Development Corp., Hospital Rev. (Memorial Hermann Healthcare Systems), “B”, 7%, 12/01/27 (Prerefunded 12/01/18)      1,795,000        2,176,922   
Harris County, TX, Health Facilities Development Corp., Hospital Rev. (Memorial Hermann Healthcare Systems), “B”, 7.25%, 12/01/35 (Prerefunded 12/01/18)      2,050,000        2,504,567   
Harris County-Houston, TX, Sports Authority Rev., “C”, 5%, 11/15/31      225,000        253,931   
Harris County-Houston, TX, Sports Authority Rev., “C”, 5%, 11/15/32      225,000        252,754   
Harris County-Houston, TX, Sports Authority Rev., “C”, 5%, 11/15/33      545,000        610,329   
Harris County-Houston, TX, Sports Authority Rev., Capital Appreciation, “A”, AGM, 0%, 11/15/41      900,000        273,186   
Harris County-Houston, TX, Sports Authority Rev., Capital Appreciation, “A”, AGM, 0%, 11/15/46      2,250,000        525,420   
Houston, TX, Airport System Rev., “B”, 5%, 7/01/26      1,855,000        2,144,417   
Houston, TX, Airport System Rev., Special Facilities Rev. (United Airlines, Inc. Terminal E Project), 4.75%, 7/01/24      1,080,000        1,183,691   
Houston, TX, Airport System Rev., Special Facilities Rev. (United Airlines, Inc. Terminal E Project), 5%, 7/01/29      2,135,000        2,303,729   
Houston, TX, Airport System Rev., Special Facilities Rev. (United Airlines, Inc. Terminal E Project), 4.5%, 7/01/20      535,000        577,035   
Houston, TX, Airport System Rev., Special Facilities Rev. (United Airlines, Inc. Terminal Improvement Projects), “B-1”, 5%, 7/15/30      725,000        771,139   
Houston, TX, Airport System Rev., Special Facilities Rev. (United Airlines, Inc. Terminal Improvement Projects), “B-2”, 5%, 7/15/20      1,715,000        1,843,282   
Houston, TX, Airport System Rev., Subordinate Lien, “A”, 5%, 7/01/31      2,310,000        2,578,607   

 

45

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Texas - continued                 
Houston, TX, Industrial Development Corp. (United Parcel Service, Inc.), 6%, 3/01/23    $ 165,000      $ 166,769   
La Vernia, TX, Higher Education Finance Corp. Rev. (KIPP, Inc.), “A”, 6.25%, 8/15/39 (Prerefunded 8/15/19)      1,470,000        1,673,389   
La Vernia, TX, Higher Education Finance Corp. Rev. (Lifeschool of Dallas), “A”, 7.5%, 8/15/41 (Prerefunded 8/15/19)      4,230,000        5,318,548   
Lufkin, TX, Health Facilities Development Corp. Rev. (Memorial Health System), 5.5%, 2/15/37 (Prerefunded 2/15/17)      310,000        338,328   
Matagorda County, TX, Pollution Control Rev. (Central Power & Light Co.), “A”, 6.3%, 11/01/29      2,520,000        2,902,536   
New Hope, TX, Cultural Education Facilities Finance Corp. Student Housing Rev. (Texas A&M University Project), “A”, AGM, 5%, 4/01/46      1,585,000        1,743,976   
New Hope, TX, Cultural Education Facilities Finance Corp., Student Housing Rev. (CHF - Collegiate Housing Stephenville III, L.L.C. - Tarleton State University Project), 5%, 4/01/30      355,000        392,971   
New Hope, TX, Cultural Education Facilities Finance Corp., Student Housing Rev. (CHF - Collegiate Housing Stephenville III, L.L.C. - Tarleton State University Project), 5%, 4/01/35      355,000        386,467   
New Hope, TX, Cultural Education Facilities Finance Corp., Student Housing Rev. (CHF - Collegiate Housing Stephenville III, L.L.C. - Tarleton State University Project), 5%, 4/01/47      895,000        964,345   
Nortex, TX, Housing Finance Corp., Single Family Mortgage Rev., “A”, GNMA, 5.5%, 7/01/38      950,000        968,411   
North Texas Tollway Authority Rev. (Special Projects System), “D”, 5%, 9/01/29      15,000,000        17,660,550   
North Texas Tollway Authority Rev., “C”, 1.95%, 1/01/38
(Put Date 1/01/19)		      8,000,000        8,114,880   
Permian Basin Housing Finance Corp., TX, Single Family Mortgage Backed Securities (Mortgage Backed Project) “A”, GNMA, 5.65%, 1/01/38      930,000        950,637   
Red River Authority, TX, Pollution Control Rev. (Celanese Project) “B”, 6.7%, 11/01/30      1,200,000        1,204,188   
Red River, TX, Health Facilities Development Corp., Retirement Facilities Rev. (MRC The Crossings Project), “B-2”, 5%, 11/15/19      80,000        80,198   
San Juan, TX, Higher Education Finance Authority Education Rev. (Idea Public Schools), “A”, 6.7%, 8/15/40      2,795,000        3,318,196   
Schertz-Cibolo-Universal City, TX, Independent School District, PSF, 5%, 2/01/36      10,000,000        10,373,400   
Tarrant County, TX, Cultural Education Facilities Finance Corp. Retirement Facility (Air Force Village Foundation, Inc.), 6.125%, 11/15/29      395,000        435,863   

 

46

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Texas - continued                 
Tarrant County, TX, Cultural Education Facilities Finance Corp. Retirement Facility (Air Force Village Foundation, Inc.), 6.375%, 11/15/44    $ 3,100,000      $ 3,433,932   
Tarrant County, TX, Cultural Education Facilities Finance Corp. Retirement Facility (Stayton at Museum Way), 8.25%, 11/15/44      4,500,000        4,459,950   
Tarrant County, TX, Cultural Education Facilities Finance Corp. Rev. (Trinity Terrace Project), “A-1”, 5%, 10/01/44      785,000        843,969   
Tarrant County, TX, Cultural Education Facilities Finance Corp. Rev. (Trinity Terrace Project), “A-1”, 5%, 10/01/49      375,000        402,881   
Texas Affordable Housing Corp. (Single Family Mortgage), “B”, GNMA, 5.25%, 9/01/39      235,000        242,045   
Texas City, TX, Industrial Development Corp. Rev. (NRG Energy, Inc. Project), 4.125%, 12/01/45      2,590,000        2,570,264   
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 7%, 12/31/38      1,495,000        1,865,521   
Texas Private Activity Surface Transportation Corp. Senior Lien Rev. (NTE Mobility Partners Segments 3 LLC Segments 3A & 3B Facility), 6.75%, 6/30/43      1,195,000        1,462,298   
Texas Transportation Commission, Central Texas Turnpike System Rev., Capital Appreciation, “B”, 0%, 8/15/36      4,615,000        1,861,737   
Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7%, 11/01/30      735,000        864,823   
Travis County, TX, Health Facilities Development Corp. Rev. (Westminster Manor Health), 7.125%, 11/01/40      2,575,000        3,004,227   
    

 

 

  
             $ 167,000,541   
U.S. Virgin Islands - 0.1%                 
Virgin Islands Public Finance Authority Rev. (Diageo Project), “A”, 6.75%, 10/01/37    $ 2,200,000      $ 2,518,956   
Utah - 0.1%                 
Intermountain Power Agency, UT, Power Supply Rev., “A”, 5%, 7/01/22    $ 1,250,000      $ 1,397,375   
Vermont - 0.2%                 
Burlington, VT, Airport Rev., “A”, AGM, 5%, 7/01/24    $ 135,000      $ 158,138   
Burlington, VT, Airport Rev., “A”, AGM, 5%, 7/01/30      230,000        256,857   
Vermont Economic Development Authority, Solid Waste Disposal Rev. (Casella Waste Systems, Inc.), 4.75%, 4/01/36
(Put Date 4/02/18)		      1,805,000        1,843,410   
Vermont Housing Finance Agency, Multi-Purpose Rev., “C”, 4%, 11/01/43      1,325,000        1,427,966   
    

 

 

  
             $ 3,686,371   

 

47

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Virginia - 0.7%                 
Commonwealth of Virginia, Transportation Board Rev., Capital Projects, 5%, 5/15/20    $ 4,870,000      $ 5,729,896   
Embrey Mill Community Development Authority, VA, Special Assessment Rev., 7.25%, 3/01/43      2,135,000        2,242,134   
Henrico County, VA, Industrial Development Authority Rev. (Bon Secours Health Systems, Inc.), RIBS, FRN, AGM, 11.257%, 8/23/27 (p)      4,350,000        5,527,371   
Manassas Park, VA, Economic Development Authority Lease Rev., “A”, 6%, 7/15/35      845,000        967,195   
Virginia Small Business Financing Authority Rev. (Hampton University), 5.25%, 10/01/29      625,000        735,406   
West Point, VA, Industrial Development Authority, Solid Waste Disposal Rev. (Chesapeake Corp.), “A”, 6.375%, 3/01/19 (a)(d)      529,028        5   
    

 

 

  
             $ 15,202,007   
Washington - 6.8%                 
FYI Properties Lease Rev. (Washington State Project), 5.5%, 6/01/34    $ 2,255,000      $ 2,584,613   
Seattle, WA, Port Rev., “B”, 5%, 8/01/24      3,000,000        3,503,400   
Skagit County, WA, Public Hospital District No. 001 Rev. (Skagit Valley Hospital), 5.625%, 12/01/25      1,000,000        1,092,850   
Snohomish County, WA, Public Hospital District No. 3, 5%, 12/01/31      5,655,000        6,085,572   
State of Washington, “A”, 5%, 7/01/33      5,000,000        5,643,050   
Tacoma, WA, Housing Authority Multi-Family Rev. (Redwood), GNMA, 5%, 5/20/25      280,000        280,221   
Tacoma, WA, Housing Authority Multi-Family Rev. (Redwood/Juniper, Pine Tree Harbor, & Conifer South), GNMA, 5.05%, 11/20/37      280,000        280,073   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 6.75%, 7/01/29      1,450,000        1,688,656   
Washington Health Care Facilities Authority Rev. (Central Washington Health Services), 7%, 7/01/39      3,690,000        4,303,463   
Washington Health Care Facilities Authority Rev. (Highline Medical Center), FHA, 6.25%, 8/01/36 (Prerefunded 8/01/18)      5,285,000        6,170,766   
Washington Health Care Facilities Authority Rev. (Providence Health & Services), “A”, 5%, 10/01/27      14,095,000        16,251,676   
Washington Health Care Facilities Authority Rev. (Virginia Mason Medical Center), “A”, 6.25%, 8/15/42      3,955,000        4,303,000   
Washington Higher Education Facilities Authority Rev. (Whitworth University), 5.875%, 10/01/34      2,165,000        2,383,059   
Washington Housing Finance Community Nonprofit Housing Rev. (Rockwood Retirement Communities), 5.125%, 1/01/20      3,905,000        3,907,187   
Washington Motor Vehicle Fuel Tax, “B”, NATL, 5%, 7/01/32 (Prerefunded 7/01/17) (u)      25,010,000        27,447,725   

 

48

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Washington - continued                 
Washington Motor Vehicle Fuel Tax, “E”, 5%, 2/01/37    $ 16,315,000      $ 18,884,776   
Washington Motor Vehicle Fuel Tax, “E”, 5%, 2/01/38      17,130,000        19,799,368   
Washington Motor Vehicle Fuel Tax, “E”, 5%, 2/01/39      17,985,000        20,742,280   
Washington Public Power Supply System Rev. (Nuclear Project #3), 7.125%, 7/01/16      5,145,000        5,579,341   
    

 

 

  
             $ 150,931,076   
West Virginia - 0.3%                 
Monongalia County, WV, Board of Education, 5%, 5/01/29    $ 1,445,000      $ 1,673,064   
West Virginia Economic Development Authority, Solid Waste Disposal Facilities Rev. (Appalachian Power Company- Amos Project), “A”, FRN, 1.9%, 3/01/40 (Put Date 4/01/19)      2,000,000        1,988,160   
West Virginia Hospital Finance Authority, Hospital Rev. (Thomas Health System), 6.5%, 10/01/38      2,110,000        2,217,378   
West Virginia Housing Development Fund, “A”, 1.2%, 11/01/17      1,345,000        1,348,793   
    

 

 

  
             $ 7,227,395   
Wisconsin - 0.7%                 
Wisconsin Health & Educational Facilities Authority Rev. (Aurora Health Care, Inc.), “A”, 5%, 7/15/26    $ 2,215,000      $ 2,530,128   
Wisconsin Health & Educational Facilities Authority Rev. (Aurora Health Care, Inc.), “A”, 5%, 7/15/28      665,000        747,573   
Wisconsin Health & Educational Facilities Authority Rev. (Aurora Healthcare, Inc.), “B-1”, 1.25%, 8/15/25 (Put Date 8/15/17)      2,075,000        2,089,442   
Wisconsin Health & Educational Facilities Authority Rev. (ProHealth Care, Inc. Obligated Group), 6.625%, 2/15/39 (Prerefunded 2/15/19)      1,220,000        1,470,442   
Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.25%, 9/15/29      430,000        505,856   
Wisconsin Health & Educational Facilities Authority Rev. (St. John’s Community, Inc.), “A”, 7.625%, 9/15/39      1,390,000        1,649,847   
Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Healthcare), 5.25%, 8/15/18      1,500,000        1,589,265   
Wisconsin Public Finance Authority Healthcare Facility (Church Home of Hartford, Inc. Project), “A”, 4%, 9/01/20      155,000        161,536   
Wisconsin Public Finance Authority Healthcare Facility (Church Home of Hartford, Inc. Project), “A”, 5%, 9/01/25      100,000        107,039   
Wisconsin Public Finance Authority Healthcare Facility (Church Home of Hartford, Inc. Project), “A”, 5%, 9/01/30      165,000        168,851   
Wisconsin Public Finance Authority Healthcare Facility (Church Home of Hartford, Inc. Project), “A”, 5%, 9/01/38      220,000        221,140   
Wisconsin Public Finance Authority Senior Living Rev. (Rose Villa Project), “A”, 5.125%, 11/15/29      490,000        506,616   
Wisconsin Public Finance Authority Senior Living Rev. (Rose Villa Project), “A”, 5.5%, 11/15/34      455,000        476,785   

 

49

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Portfolio of Investments – continued

 

Issuer    Shares/Par     Value ($)  
    
Municipal Bonds - continued                 
Wisconsin - continued                 
Wisconsin Public Finance Authority Senior Living Rev. (Rose Villa Project), “A”, 5.75%, 11/15/44    $ 375,000      $ 396,398   
Wisconsin Public Finance Authority Senior Living Rev. (Rose Villa Project), “A”, 6%, 11/15/49      295,000        316,140   
Wisconsin Public Finance Authority Senior Living Rev. (Rose Villa Project), “B-3”, 3.75%, 11/15/19      475,000        479,831   
Wisconsin Public Finance Authority, Airport Facilities Rev. (Transportation Infrastructure Properties LLC), “B”, 5%, 7/01/22      1,365,000        1,508,844   
Wisconsin Public Finance Authority, Airport Facilities Rev. (Transportation Infrastructure Properties LLC), “B”, 5%, 7/01/42      1,600,000        1,694,160   
    

 

 

  
             $ 16,619,893   
Total Municipal Bonds (Identified Cost, $2,008,508,488)      $ 2,181,094,955   
Floating Rate Demand Notes - 0.1%                 
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “B”, 0.01%, due 4/01/15    $ 580,000      $ 580,000   
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “C”, 0.01%, due 4/01/15      910,000        910,000   
Total Floating Rate Demand Notes, at Cost and Value      $ 1,490,000   
Money Market Funds - 3.9%                 
MFS Institutional Money Market Portfolio, 0.1%,
at Cost and Net Asset Value (v)		      87,268,558      $ 87,268,558   
Total Investments (Identified Cost, $2,097,267,046)      $ 2,269,853,513   
Other Assets, Less Liabilities - (1.5)%              (32,573,704 ) 
Net Assets - 100.0%            $ 2,237,279,809   

 

(a) Non-income producing security.
(d) In default.
(n) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities was $11,841,148 representing 0.5% of net assets.
(p) Primary inverse floater.
(q) Interest received was less than stated coupon rate.
(u) Underlying security deposited into special purpose trust (“the trust”) by investment banker upon creation of self-deposited inverse floaters.
(v) Underlying affiliated fund that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

 

50

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Portfolio of Investments – continued

 

The following abbreviations are used in this report and are defined:

 

COP   Certificate of Participation
ETM   Escrowed to Maturity
FRN   Floating Rate Note. Interest rate resets periodically and the current rate may not be the rate reported at period end.
LOC   Letter of Credit

 

Insurers          Inverse Floaters
AGM    Assured Guaranty Municipal    RIBS    Residual Interest Bonds
AMBAC    AMBAC Indemnity Corp.      
ASSD GTY    Assured Guaranty Insurance Co.      
BAM    Build America Mutual      
BHAC    Berkshire Hathaway Assurance Corp.      
CALHF    California Health Facility Construction Loan Insurance Program      
FGIC    Financial Guaranty Insurance Co.      
FHA    Federal Housing Administration      
FHLMC    Federal Home Loan Mortgage Corp.      
FNMA    Federal National Mortgage Assn.      
GNMA    Government National Mortgage Assn.      
NATL    National Public Finance Guarantee Corp.      
PSF    Permanent School Fund      
SYNCORA    Syncora Guarantee Inc.      

See Notes to Financial Statements

 

51

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Financial Statements

 

STATEMENT OF ASSETS AND LIABILITIES

At 3/31/15

This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.

 

Assets         

Investments

   

Non-affiliated issuers, at value (identified cost, $2,009,998,488)

      $2,182,584,955   

Underlying affiliated funds, at cost and value

      87,268,558   

Total investments, at value (identified cost, $2,097,267,046)

      $2,269,853,513   

Cash

      2,777   

Receivables for

   

Investments sold

      3,201,140   

Fund shares sold

      3,498,602   

Interest

      27,789,028   

Receivable from investment adviser

      72,986   

Other assets

      9,883   

Total assets

      $2,304,427,929   
Liabilities         

Payables for

   

Distributions

      $799,344   

Investments purchased

      19,636,446   

Interest expense and fees

      79,300   

Fund shares reacquired

      2,817,688   

Payable to the holders of the floating rate certificates from trust assets

      42,886,252   

Payable to affiliates

   

Shareholder servicing costs

      704,057   

Distribution and service fees

      17,824   

Payable for independent Trustees’ compensation

      21,692   

Accrued expenses and other liabilities

      185,517   

Total liabilities

      $67,148,120   

Net assets

      $2,237,279,809   
Net assets consist of         

Paid-in capital

      $2,090,918,772   

Unrealized appreciation (depreciation) on investments

      172,586,467   

Accumulated net realized gain (loss) on investments

      (29,015,258 ) 

Undistributed net investment income

      2,789,828   

Net assets

      $2,237,279,809   

Shares of beneficial interest outstanding

      252,833,090   

 

     Net assets      Shares
outstanding		      Net asset value
per share (a)		  

Class A

      $781,629,661         88,337,460         $8.85   

Class B

      28,031,996         3,163,562         8.86   

Class C

      166,884,813         18,795,691         8.88   

Class I

      682,370,751         77,207,657         8.84   

Class A1

      577,992,091         65,286,910         8.85   

Class B1

      370,497         41,810         8.86   

 

(a) Maximum offering price per share was equal to the net asset value per share for all share classes, except for Class A and Class A1, for which the maximum offering price per share was $9.24 [100 / 95.75 x $8.85] and $9.24 [100 / 95.75 x $8.85], respectively . On sales of $100,000 or more, the maximum offering prices of Class A and Class A1 shares are reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, Class C, Class A1, and Class B1 shares.

See Notes to Financial Statements

 

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Financial Statements

 

STATEMENT OF OPERATIONS

Year ended 3/31/15

This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.

 

Net investment income   

Income

   

Interest

      $95,539,928   

Dividends from underlying affiliated funds

      57,998   

Total investment income

      $95,597,926   

Expenses

   

Management fee

      $8,595,369   

Distribution and service fees

      3,804,641   

Shareholder servicing costs

      1,885,341   

Administrative services fee

      325,254   

Independent Trustees’ compensation

      39,245   

Custodian fee

      210,313   

Shareholder communications

      134,566   

Audit and tax fees

      57,790   

Legal fees

      22,184   

Interest expense and fees

      288,529   

Miscellaneous

      268,452   

Total expenses

      $15,631,684   

Fees paid indirectly

      (50 ) 

Reduction of expenses by investment adviser and distributor

      (1,214,170 ) 

Net expenses

      $14,417,464   

Net investment income

      $81,180,462   
Realized and unrealized gain (loss) on investments   

Realized gain (loss) (identified cost basis)

   

Investments

      $3,357,222   

Futures contracts

      454,504   

Net realized gain (loss) on investments

      $3,811,726   

Change in unrealized appreciation (depreciation) on investments

      $80,069,145   

Net realized and unrealized gain (loss) on investments

      $83,880,871   

Change in net assets from operations

      $165,061,333   

See Notes to Financial Statements

 

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Financial Statements

 

STATEMENTS OF CHANGES IN NET ASSETS

These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.

 

     Years ended 3/31  
     2015      2014  
Change in net assets              
From operations                  

Net investment income

      $81,180,462         $81,155,042   

Net realized gain (loss) on investments

      3,811,726         (37,959,177 ) 

Net unrealized gain (loss) on investments

      80,069,145         (91,426,776 ) 

Change in net assets from operations

      $165,061,333         $(48,230,911 ) 
Distributions declared to shareholders                  

From net investment income

      $(75,843,616 )       $(77,388,318 ) 

Change in net assets from fund share transactions

      $89,538,603         $(156,666,308 ) 

Total change in net assets

      $178,756,320         $(282,285,537 ) 
Net assets                  

At beginning of period

      2,058,523,489         2,340,809,026   

At end of period (including undistributed net investment income of $2,789,828 and $1,877,184, respectively)

      $2,237,279,809         $2,058,523,489   

See Notes to Financial Statements

 

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Financial Statements

 

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the fund’s financial performance for the past 5 years (or life of a particular share class, if shorter). Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.

 

Class A    Years ended 3/31  
     2015     2014     2013     2012     2011  

Net asset value, beginning of period

      $8.48        $8.94        $8.68        $7.91        $8.32   
Income (loss) from investment operations   

Net investment income (d)

      $0.32        $0.33        $0.35        $0.39        $0.41   

Net realized and unrealized gain (loss)
on investments

      0.35        (0.47 )      0.24        0.76        (0.42 ) 

Total from investment operations

      $0.67        $(0.14 )      $0.59        $1.15        $(0.01 ) 
Less distributions declared to shareholders   

From net investment income

      $(0.30 )      $(0.32 )      $(0.33 )      $(0.38 )      $(0.40 ) 

Net asset value, end of period (x)

      $8.85        $8.48        $8.94        $8.68        $7.91   

Total return (%) (r)(s)(t)(x)

      8.02        (1.52 )      6.88        14.83        (0.24 ) 
Ratios (%) (to average net assets)
and Supplemental data:		    

Expenses before expense reductions (f)

      0.80        0.80        0.79        0.81        0.81   

Expenses after expense reductions (f)

      0.74        0.75        0.76        0.77        0.78   

Net investment income

      3.71        3.92        3.90        4.69        4.95   

Portfolio turnover

      17        32        23        25        23   

Net assets at end of period (000 omitted)

      $781,630        $736,374        $1,027,992        $829,860        $764,621   
Supplemental Ratios (%):                                         

Ratio of expenses to average net assets after
expense reductions and excluding
interest expense and fees (f)(l)

      0.73        0.73        0.74        0.74        0.74   

See Notes to Financial Statements

 

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Financial Highlights – continued

 

Class B    Years ended 3/31  
     2015     2014     2013     2012     2011  

Net asset value, beginning of period

      $8.49        $8.95        $8.70        $7.92        $8.34   
Income (loss) from investment operations   

Net investment income (d)

      $0.26        $0.27        $0.28        $0.33        $0.35   

Net realized and unrealized gain (loss)
on investments

      0.35        (0.48 )      0.23        0.77        (0.43 ) 

Total from investment operations

      $0.61        $(0.21 )      $0.51        $1.10        $(0.08 ) 
Less distributions declared to shareholders   

From net investment income

      $(0.24 )      $(0.25 )      $(0.26 )      $(0.32 )      $(0.34 ) 

Net asset value, end of period (x)

      $8.86        $8.49        $8.95        $8.70        $7.92   

Total return (%) (r)(s)(t)(x)

      7.21        (2.26 )      5.95        14.09        (1.10 ) 
Ratios (%) (to average net assets)
and Supplemental data:		    

Expenses before expense reductions (f)

      1.55        1.55        1.54        1.56        1.56   

Expenses after expense reductions (f)

      1.49        1.51        1.51        1.52        1.53   

Net investment income

      2.95        3.16        3.15        3.91        4.21   

Portfolio turnover

      17        32        23        25        23   

Net assets at end of period (000 omitted)

      $28,032        $28,220        $37,759        $31,883        $22,842   
Supplemental Ratios (%):                                         

Ratio of expenses to average net assets after
expense reductions and excluding
interest expense and fees (f)(l)

      1.48        1.49        1.48        1.49        1.49   

See Notes to Financial Statements

 

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Class C    Years ended 3/31  
     2015     2014     2013     2012     2011  

Net asset value, beginning of period

      $8.51        $8.97        $8.71        $7.94        $8.35   
Income (loss) from investment operations   

Net investment income (d)

      $0.26        $0.27        $0.28        $0.33        $0.35   

Net realized and unrealized gain (loss)
on investments

      0.35        (0.48 )      0.24        0.76        (0.42 ) 

Total from investment operations

      $0.61        $(0.21 )      $0.52        $1.09        $(0.07 ) 
Less distributions declared to shareholders   

From net investment income

      $(0.24 )      $(0.25 )      $(0.26 )      $(0.32 )      $(0.34 ) 

Net asset value, end of period (x)

      $8.88        $8.51        $8.97        $8.71        $7.94   

Total return (%) (r)(s)(t)(x)

      7.19        (2.26 )      6.06        13.92        (0.97 ) 
Ratios (%) (to average net assets)
and Supplemental data:		    

Expenses before expense reductions (f)

      1.55        1.55        1.54        1.56        1.56   

Expenses after expense reductions (f)

      1.49        1.51        1.51        1.52        1.52   

Net investment income

      2.94        3.15        3.14        3.92        4.19   

Portfolio turnover

      17        32        23        25        23   

Net assets at end of period (000 omitted)

      $166,885        $162,443        $234,735        $187,078        $149,727   
Supplemental Ratios (%):                                         

Ratio of expenses to average net assets after
expense reductions and excluding
interest expense and fees (f)(l)

      1.48        1.49        1.48        1.49        1.49   

See Notes to Financial Statements

 

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Class I    Years ended 3/31  
     2015     2014     2013     2012 (i)  

Net asset value, beginning of period

      $8.47        $8.93        $8.67        $8.22   
Income (loss) from investment operations   

Net investment income (d)

      $0.35        $0.35        $0.37        $0.27   

Net realized and unrealized gain (loss)
on investments

      0.34        (0.47 )      0.24        0.44 (g) 

Total from investment operations

      $0.69        $(0.12 )      $0.61        $0.71   
Less distributions declared to shareholders   

From net investment income

      $(0.32 )      $(0.34 )      $(0.35 )      $(0.26 ) 

Net asset value, end of period (x)

      $8.84        $8.47        $8.93        $8.67   

Total return (%) (r)(s)(x)

      8.30        (1.29 )      7.15        8.75 (n) 
Ratios (%) (to average net assets)
and Supplemental data:		    

Expenses before expense reductions (f)

      0.55        0.55        0.55        0.55 (a) 

Expenses after expense reductions (f)

      0.49        0.50        0.51        0.52 (a) 

Net investment income

      3.95        4.13        4.13        4.70 (a) 

Portfolio turnover

      17        32        23        25   

Net assets at end of period (000 omitted)

      $682,371        $546,220        $334,033        $186,734   
Supplemental Ratios (%):                                 

Ratio of expenses to average net assets after
expense reductions and excluding
interest expense and fees (f)(l)

      0.48        0.48        0.49        0.49 (a) 

See Notes to Financial Statements

 

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Financial Highlights – continued

 

Class A1    Years ended 3/31  
     2015     2014     2013     2012     2011  

Net asset value, beginning of period

      $8.49        $8.95        $8.69        $7.92        $8.33   
Income (loss) from investment operations   

Net investment income (d)

      $0.35        $0.35        $0.37        $0.41        $0.43   

Net realized and unrealized gain (loss)
on investments

      0.33        (0.47 )      0.24        0.76        (0.42 ) 

Total from investment operations

      $0.68        $(0.12 )      $0.61        $1.17        $0.01   
Less distributions declared to shareholders   

From net investment income

      $(0.32 )      $(0.34 )      $(0.35 )      $(0.40 )      $(0.42 ) 

Net asset value, end of period (x)

      $8.85        $8.49        $8.95        $8.69        $7.92   

Total return (%) (r)(s)(t)(x)

      8.16        (1.27 )      7.14        15.11        0.01   
Ratios (%) (to average net assets)
and Supplemental data:		    

Expenses before expense reductions (f)

      0.55        0.55        0.55        0.56        0.56   

Expenses after expense reductions (f)

      0.50        0.51        0.51        0.52        0.53   

Net investment income

      3.96        4.17        4.18        4.96        5.22   

Portfolio turnover

      17        32        23        25        23   

Net assets at end of period (000 omitted)

      $577,992        $584,287        $703,916        $714,380        $689,074   
Supplemental Ratios (%):                                         

Ratio of expenses to average net assets after
expense reductions and excluding
interest expense and fees (f)(l)

      0.48        0.49        0.49        0.49        0.49   

See Notes to Financial Statements

 

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Financial Highlights – continued

 

Class B1    Years ended 3/31  
     2015     2014     2013     2012     2011  

Net asset value, beginning of period

      $8.49        $8.95        $8.69        $7.92        $8.34   
Income (loss) from investment operations   

Net investment income (d)

      $0.28        $0.29        $0.31        $0.35        $0.37   

Net realized and unrealized gain (loss)
on investments

      0.35        (0.48 )      0.24        0.76        (0.43 ) 

Total from investment operations

      $0.63        $(0.19 )      $0.55        $1.11        $(0.06 ) 
Less distributions declared to shareholders   

From net investment income

      $(0.26 )      $(0.27 )      $(0.29 )      $(0.34 )      $(0.36 ) 

Net asset value, end of period (x)

      $8.86        $8.49        $8.95        $8.69        $7.92   

Total return (%) (r)(s)(t)(x)

      7.46        (2.02 )      6.34        14.24        (0.86 ) 
Ratios (%) (to average net assets)
and Supplemental data:		    

Expenses before expense reductions (f)

      1.55        1.55        1.54        1.56        1.56   

Expenses after expense reductions (f)

      1.26        1.27        1.27        1.28        1.29   

Net investment income

      3.19        3.39        3.47        4.23        4.46   

Portfolio turnover

      17        32        23        25        23   

Net assets at end of period (000 omitted)

      $370        $980        $2,374        $4,304        $6,230   
Supplemental Ratios (%):                                         

Ratio of expenses to average net assets after
expense reductions and excluding
interest expense and fees (f)(l)

      1.25        1.25        1.25        1.26        1.26   

 

(a) Annualized.
(d) Per share data is based on average shares outstanding.
(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.
(g) The per share amount varies from the net realized and unrealized gain/loss for the period because of the timing of sales of fund shares and the per share amount of realized and unrealized gains and losses at such time.
(i) For the period from the class inception, August 1, 2011, through the stated period end.
(l) Interest expense and fees relate to payments made to the holders of the floating rate certificates from trust assets.
(n) Not annualized.
(r) Certain expenses have been reduced without which performance would have been lower.
(s) From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
(t) Total returns do not include any applicable sales charges.
(x) The net asset values per share and total returns have been calculated on net assets which include adjustments made in accordance with U.S. generally accepted accounting principles required at period end for financial reporting purposes.

See Notes to Financial Statements

 

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NOTES TO FINANCIAL STATEMENTS

(1) Business and Organization

MFS Municipal Income Fund (the fund) is a diversified series of MFS Municipal Series Trust which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.

The fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investment Companies.

(2) Significant Accounting Policies

General – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. In the preparation of these financial statements, management has evaluated subsequent events occurring after the date of the fund’s Statement of Assets and Liabilities through the date that the financial statements were issued. The fund invests primarily in municipal instruments. The value of municipal instruments can be affected by changes in their actual or perceived credit quality. The credit quality of municipal instruments can be affected by, among other things, the financial condition of the issuer or guarantor, the issuer’s future borrowing plans and sources of revenue, the economic feasibility of the revenue bond project or general borrowing purpose, political or economic developments in the region where the instrument is issued and the liquidity of the security. Municipal instruments generally trade in the over-the-counter market. Municipal instruments backed by current and anticipated revenues from a specific project or specific assets can be negatively affected by the discontinuance of the taxation supporting the projects or assets or the inability to collect revenues for the project or from the assets. If the Internal Revenue Service determines an issuer of a municipal instrument has not complied with the applicable tax requirements, interest from the security could become taxable, the security could decline in value, and distributions made by the fund could be taxable to shareholders.

In June 2014, FASB issued Accounting Standards Update 2014-11, Transfers and Servicing (Topic 860) – Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (“ASU 2014-11”). ASU 2014-11 changes the accounting for repurchase-to-maturity transactions (i.e., repurchase agreements that settle at the same time as the maturity of the transferred financial asset) and enhances the required disclosures for repurchase agreements and other similar transactions. Although still evaluating the potential impacts of ASU 2014-11 to the fund, management expects that the impact of the fund’s adoption will be limited to additional financial statement disclosures which would first be effective for interim reporting periods beginning after March 15, 2015.

 

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Balance Sheet Offsetting – The fund’s accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination of the agreement, the International Swaps and Derivatives Association (ISDA) Master Agreement does not result in an offset of reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities across transactions between the fund and the applicable counterparty. The fund’s right to setoff may be restricted or prohibited by the bankruptcy or insolvency laws of the particular jurisdiction to which a specific master netting agreement counterparty is subject. Balance sheet offsetting disclosures, to the extent applicable to the fund, have been included in the fund’s Significant Accounting Policies note under the captions for each of the fund’s in-scope financial instruments and transactions.

Investment Valuations – Debt instruments and floating rate loans, including restricted debt instruments, are generally valued at an evaluated or composite bid as provided by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price as provided by a third-party pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as provided by a third-party pricing service on the market on which such futures contracts are primarily traded. Open-end investment companies are generally valued at net asset value per share. Securities and other assets generally valued on the basis of information from a third-party pricing service may also be valued at a broker/dealer bid quotation. Values obtained from third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data.

The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under the fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the fund’s net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. The adviser generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair

 

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value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which the fund determines its net asset value per share.

Various inputs are used in determining the value of the fund’s assets or liabilities. These inputs are categorized into three broad levels. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fund’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes unobservable inputs, which may include the adviser’s own assumptions in determining the fair value of investments. The following is a summary of the levels used as of March 31, 2015 in valuing the fund’s assets or liabilities:

 

Investments at Value    Level 1      Level 2      Level 3      Total  
Municipal Bonds      $—         $2,181,094,955         $—         $2,181,094,955   
Short Term Securities      —         1,490,000         —         1,490,000   
Mutual Funds      87,268,558         —         —         87,268,558   
Total Investments      $87,268,558         $2,182,584,955         $—         $2,269,853,513   

For further information regarding security characteristics, see the Portfolio of Investments.

Derivatives – The fund uses derivatives for different purposes, primarily to increase or decrease exposure to a particular market or segment of the market, or security, to increase or decrease interest rate exposure, or as alternatives to direct investments. Derivatives are used for hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. When the fund uses derivatives as an investment to increase market exposure, or for hedging purposes, gains and losses from derivative instruments may be substantially greater than the derivative’s original cost.

The derivative instruments used by the fund were futures contracts. At March 31, 2015, the fund did not have any outstanding derivative instruments.

The following table presents, by major type of derivative contract, the realized gain (loss) on derivatives held by the fund for the year ended March 31, 2015 as reported in the Statement of Operations:

 

Risk    Futures Contracts  
Interest Rate      $454,504   

There is no change in unrealized appreciation (depreciation) on derivative transactions at period end.

 

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Derivative counterparty credit risk is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain, but not all, uncleared derivatives, the fund attempts to reduce its exposure to counterparty credit risk whenever possible by entering into an ISDA Master Agreement on a bilateral basis. The ISDA Master Agreement gives each party to the agreement the right to terminate all transactions traded under such agreement if there is a certain deterioration in the credit quality of the other party. Upon an event of default or a termination of the ISDA Master Agreement, the non-defaulting party has the right to close out all transactions traded under such agreement and to net amounts owed under each transaction to one net amount payable by one party to the other. This right to close out and net payments across all transactions traded under the ISDA Master Agreement could result in a reduction of the fund’s credit risk to such counterparty equal to any amounts payable by the fund under the applicable transactions, if any.

Collateral and margin requirements differ by type of derivative. Margin requirements are set by the clearing broker and the clearing house for cleared derivatives (i.e., futures contracts, cleared swaps, and exchange-traded options) while collateral terms are contract specific for uncleared derivatives (i.e., forward foreign currency exchange contracts, uncleared swap agreements, and uncleared options). For derivatives traded under an ISDA Master Agreement, which contains a collateral support annex, the collateral requirements are netted across all transactions traded under such agreement and one amount is posted from one party to the other to collateralize such obligations. Cash that has been segregated to cover the fund’s collateral or margin obligations under derivative contracts, if any, will be reported separately in the Statement of Assets and Liabilities as “Restricted cash” or “Deposits with brokers.” Securities pledged as collateral or margin for the same purpose, if any, are noted in the Portfolio of Investments.

Futures Contracts – The fund entered into futures contracts which may be used to hedge against or obtain broad market exposure, interest rate exposure, or to manage duration. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.

Upon entering into a futures contract, the fund is required to deposit with the broker, either in cash or securities, an initial margin in an amount equal to a certain percentage of the notional amount of the contract. Subsequent payments (variation margin) are made or received by the fund each day, depending on the daily fluctuations in the value of the contract, and are recorded for financial statement purposes as unrealized gain or loss by the fund until the contract is closed or expires at which point the gain or loss on futures contracts is realized.

The fund bears the risk of interest rates or securities prices moving unexpectedly, in which case, the fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. While futures contracts may present less counterparty risk to the fund since the contracts are exchange traded and the exchange’s clearinghouse guarantees payments to the broker, there is still counterparty credit risk due to the insolvency of the broker. The fund’s maximum risk of loss due to counterparty credit risk is equal to the margin posted by the fund to the broker plus any gains or minus any losses on the outstanding futures contracts.

 

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Inverse Floaters – The fund invests in municipal inverse floating rate securities which are structured by the issuer (known as primary market inverse floating rate securities) or by an investment banker utilizing municipal bonds which have already been issued (known as secondary market inverse floating rate securities) to have variable rates of interest which typically move in the opposite direction of short term interest rates. A secondary market inverse floating rate security is created when an investment banker transfers a fixed rate municipal bond to a special purpose trust, and causes the trust to (a) issue floating rate certificates to third parties, in an amount equal to a fraction of the par amount of the deposited bonds (these certificates usually pay tax-exempt interest at short-term interest rates that typically reset weekly; and the certificate holders typically, on seven days notice, have the option to tender their certificates to the investment banker or another party for redemption at par plus accrued interest), and (b) issue inverse floating rate certificates (sometimes referred to as “inverse floaters”). If the holders of the inverse floaters transfer the municipal bonds to an investment banker for the purpose of depositing the municipal bonds into the special purpose trust, the inverse floating rate certificates that are issued by the trust are referred to as “self-deposited inverse floaters.” If the bonds held by the trust are purchased by the investment banker for deposit into the trust from someone other than the purchasers of the inverse floaters, the inverse floating rate certificates that are issued by the trust are referred to as “externally deposited inverse floaters.” Such self-deposited inverse floaters held by the fund are accounted for as secured borrowings, with the municipal bonds reflected in the investments of the fund and amounts owed to the holders of the floating rate certificates under the provisions of the trust, which amounts are paid solely from the assets of the trust, reflected as liabilities of the fund in the Statement of Assets and Liabilities under the caption, “Payable to the holders of the floating rate certificates from trust assets”. The carrying value of the fund’s payable to the holders of the floating rate certificates from trust assets as reported in the fund’s Statement of Assets and Liabilities approximates its fair value. The value of the payable to the holders of the floating rate certificates from trust assets as of the reporting date is considered level 2 under the fair value hierarchy disclosure. At March 31, 2015, the fund’s payable to the holders of the floating rate certificates from trust assets was $42,886,252 and the interest rate on the floating rate certificates issued by the trust was 0.03%. For the year ended March 31, 2015, the average payable to the holders of the floating rate certificates from trust assets was $42,814,630 at a weighted average interest rate of 0.06%. Interest expense and fees relate to interest payments made to the holders of certain floating rate certificates and associated fees, both of which are made from trust assets. Interest expense and fees are recorded as incurred. For the year ended March 31, 2015, interest expense and fees related to self-deposited inverse floaters amounted to $288,529 and is included in “Interest expense and fees” in the Statement of Operations. Primary and externally deposited inverse floaters held by the fund are not accounted for as secured borrowings.

Indemnifications – Under the fund’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the fund. Additionally, in the normal course of business, the fund enters into agreements with service providers that may contain

 

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indemnification clauses. The fund’s maximum exposure under these agreements is unknown as this would involve future claims that may be made against the fund that have not yet occurred.

Investment Transactions and Income – Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. All premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles. Interest payments received in additional securities are recorded on the ex-interest date in an amount equal to the value of the security on such date. Debt obligations may be placed on non-accrual status or set to accrue at a rate of interest less than the contractual coupon when the collection of all or a portion of interest has become doubtful. Interest income for those debt obligations may be further reduced by the write-off of the related interest receivables when deemed uncollectible.

The fund may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statement of Operations in realized gain/loss if the security has been disposed of by the fund or in unrealized gain/loss if the security is still held by the fund. Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statement of Operations.

Legal fees and other related expenses incurred to preserve and protect the value of a security owned are added to the cost of the security; other legal fees are expensed. Capital infusions made directly to the security issuer, which are generally non-recurring, incurred to protect or enhance the value of high-yield debt securities, are reported as additions to the cost basis of the security. Costs that are incurred to negotiate the terms or conditions of capital infusions or that are expected to result in a plan of reorganization are reported as realized losses. Ongoing costs incurred to protect or enhance an investment, or costs incurred to pursue other claims or legal actions, are expensed.

Fees Paid Indirectly – The fund’s custody fee may be reduced according to an arrangement that measures the value of cash deposited with the custodian by the fund. This amount, for the year ended March 31, 2015, is shown as a reduction of total expenses in the Statement of Operations.

Tax Matters and Distributions – The fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable and tax-exempt income, including realized capital gains. As a result, no provision for federal income tax is required. The fund’s federal tax returns, when filed, will remain subject to examination by the Internal Revenue Service for a three year period. Management has analyzed the fund’s tax positions taken on federal and state tax returns for all open tax years and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

Distributions to shareholders are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These adjustments have no impact on net assets or net

 

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asset value per share. Temporary differences which arise from recognizing certain items of income, expense, gain or loss in different periods for financial statement and tax purposes will reverse at some time in the future. Distributions in excess of net investment income or net realized gains are temporary overdistributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes.

Book/tax differences primarily relate to amortization and accretion of debt securities.

The tax character of distributions declared to shareholders for the last two fiscal years is as follows:

 

     3/31/15      3/31/14  
Ordinary income (including any
short-term capital gains)		      $236,020         $217,925   
Tax-exempt income      75,607,596         77,170,393   
Total distributions      $75,843,616         $77,388,318   

The federal tax cost and the tax basis components of distributable earnings were as follows:

 

As of 3/31/15       
Cost of investments      $2,042,212,585   
Gross appreciation      188,264,104   
Gross depreciation      (3,509,428 ) 
Net unrealized appreciation (depreciation)      $184,754,676   
Undistributed tax-exempt income      9,494,321   
Capital loss carryforwards      (41,183,467 ) 
Other temporary differences      (6,704,493 ) 

Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized for fund fiscal years beginning after March 31, 2011 may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses (“post-enactment losses”). Previously, net capital losses were carried forward for eight years and treated as short-term losses (“pre-enactment losses”). As a transition rule, the Act requires that all post-enactment net capital losses be used before pre-enactment net capital losses.

As of March 31, 2015, the fund had capital loss carryforwards available to offset future realized gains as follows:

 

Pre-enactment losses which
expire as follows:		       
3/31/18      $(937,881 ) 
3/31/19      (7,352,883 ) 
Total      $(8,290,764 ) 
Post-enactment losses which
are characterized as follows:		       
Short-Term      $(24,876,969 ) 
Long-Term      (8,015,734 ) 
Total      $(32,892,703 ) 

 

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Multiple Classes of Shares of Beneficial Interest – The fund offers multiple classes of shares, which differ in their respective distribution and service fees. The fund’s income and common expenses are allocated to shareholders based on the value of settled shares outstanding of each class. The fund’s realized and unrealized gain (loss) are allocated to shareholders based on the daily net assets of each class. Dividends are declared separately for each class. Differences in per share dividend rates are generally due to differences in separate class expenses. Class B and Class B1 shares will convert to Class A and Class A1 shares, respectively, approximately eight years after purchase. The fund’s distributions declared to shareholders as reported in the Statements of Changes in Net Assets are presented by class as follows:

 

     From net investment
income		  
     Year
ended
3/31/15		      Year
ended
3/31/14		  
Class A      $26,009,877         $31,460,760   
Class B      765,627         940,625   
Class C      4,407,687         5,612,258   
Class I      22,937,868         14,420,196   
Class A1      21,704,094         24,906,692   
Class B1      18,463         47,787   
Total      $75,843,616         $77,388,318   

(3) Transactions with Affiliates

Investment Adviser – The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. The management fee is computed daily and paid monthly at an annual rate of 0.40% of the fund’s average daily net assets.

The investment adviser has agreed in writing to reduce its management fee to 0.37% of the fund’s average daily net assets in excess of $1.3 billion up to $2.0 billion and 0.35% of average daily net assets in excess of $2.0 billion. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until July 31, 2015. For the year ended March 31, 2015, this management fee reduction amounted to $284,419, which is included in the reduction of total expenses in the Statement of Operations. MFS has also agreed in writing to reduce its management fee by a specified amount if certain MFS mutual fund assets exceed thresholds agreed to by MFS and the fund’s Board of Trustees. For the year ended March 31, 2015, this management fee reduction amounted to $119,558, which is included in the reduction of total expenses in the Statement of Operations. The management fee incurred for the year ended March 31, 2015 was equivalent to an annual effective rate of 0.38% of the fund’s average daily net assets.

The investment adviser has agreed in writing to pay a portion of the fund’s operating expenses, excluding management fees, distribution and service fees, interest, taxes, extraordinary expenses, brokerage and transaction costs and investment-related expenses (including interest expenses and fees associated with investments in inverse floating rate instruments), such that fund operating expenses do not exceed 0.10% annually of the fund’s average daily net assets. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue at

 

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least until July 31, 2015. For the year ended March 31, 2015, this reduction amounted to $784,028, which is included in the reduction of total expenses in the Statement of Operations.

Distributor – MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received $366,043 and $17,148 for the year ended March 31, 2015, as its portion of the initial sales charge on sales of Class A and Class A1 shares of the fund, respectively.

The Board of Trustees has adopted a distribution plan for certain share classes pursuant to Rule 12b-1 of the Investment Company Act of 1940.

The fund’s distribution plan provides that the fund will pay MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.

Distribution Plan Fee Table:

 

    

Distribution

Fee Rate (d)

     

Service

Fee Rate (d)

     

Total

Distribution

Plan (d)

     

Annual

Effective

Rate (e)

     

Distribution

and Service

Fee

  
Class A      —         0.25%         0.25%         0.25%         $1,879,912   
Class B      0.75%         0.25%         1.00%         1.00%         283,048   
Class C      0.75%         0.25%         1.00%         1.00%         1,635,427   
Class B1      0.75%         0.25%         1.00%         0.77%         6,254   
Total Distribution and Service Fees         $3,804,641   

 

(d) In accordance with the distribution plan for certain classes, the fund pays distribution and/or service fees equal to these annual percentage rates of each class’s average daily net assets. The distribution and service fee rates disclosed by class represent the current rates in effect at the end of the reporting period. Any rate changes, if applicable, are detailed below.
(e) The annual effective rates represent actual fees incurred under the distribution plan for the year ended March 31, 2015 based on each class’s average daily net assets. The service fee rate attributable to Class B1 shares within the first year of purchase is 0.25%. The service fee rate attributable to all other Class B1 shares has been reduced by MFD to 0.00% under a written agreement that will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until July 31, 2015. For the year ended March 31, 2015 this reduction amounted to $1,454 and is included in the reduction of total expenses in the Statement of Operations. MFD has voluntarily agreed to rebate a portion of each class’s 0.25% service fee attributable to accounts for which MFD retains the 0.25% service fee except for accounts attributable to MFS or its affiliates’ seed money. For the year ended March 31, 2015, this rebate amounted to $22,182, $1, and $31 for Class A, Class B, and Class C, respectively, and is included in the reduction of total expenses in the Statement of Operations.

Certain Class A and A1 shares are subject to a contingent deferred sales charge (CDSC) in the event of a shareholder redemption within 18 months of purchase for shares purchased on or after August 1, 2012, and within 24 months of purchase for shares purchased prior to August 1, 2012. Class C shares are subject to a CDSC in the event of a shareholder redemption within 12 months of purchase. Class B and Class B1

 

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shares are subject to a CDSC in the event of a shareholder redemption within six years of purchase. All contingent deferred sales charges are paid to MFD and during the year ended March 31, 2015, were as follows:

 

     Amount  
Class A      $9,813   
Class B      42,055   
Class C      10,991   
Class A1      —   
Class B1      661   

Shareholder Servicing Agent – MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent calculated as a percentage of the average daily net assets of the fund as determined periodically under the supervision of the fund’s Board of Trustees. For the year ended March 31, 2015, the fee was $248,694, which equated to 0.0116% annually of the fund’s average daily net assets. MFSC also receives payment from the fund for out-of-pocket expenses, sub-accounting and other shareholder servicing costs which may be paid to affiliated and unaffiliated service providers. For the year ended March 31, 2015, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to $1,636,647.

Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund reimburses MFS the costs incurred to provide these services. The fund is charged an annual fixed amount of $17,500 plus a fee based on average daily net assets. The administrative services fee incurred for the year ended March 31, 2015 was equivalent to an annual effective rate of 0.0151% of the fund’s average daily net assets.

Trustees’ and Officers’ Compensation – The fund pays compensation to independent Trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. The fund does not pay compensation directly to Trustees or officers of the fund who are also officers of the investment adviser, all of whom receive remuneration for their services to the fund from MFS. Certain officers and Trustees of the fund are officers or directors of MFS, MFD, and MFSC.

Prior to December 31, 2001, the fund had an unfunded defined benefit plan (“DB plan”) for independent Trustees. As of December 31, 2001, the Board took action to terminate the DB plan with respect to then-current and any future independent Trustees, such that the DB plan covers only certain of those former independent Trustees who retired on or before December 31, 2001. The DB plan resulted in a pension expense of $3,486 and is included in “Independent Trustees’ compensation” in the Statement of Operations for the year ended March 31, 2015. The liability for deferred retirement benefits payable to certain independent Trustees under the DB plan amounted to $21,666 at March 31, 2015, and is included in “Payable for independent Trustees’ compensation” in the Statement of Assets and Liabilities.

Other – Effective November 1, 2014, this fund and certain other funds managed by MFS (the funds) have entered into a service agreement (the ISO Agreement) which

 

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Notes to Financial Statements – continued

 

provides for payment of fees solely by the funds to Tarantino LLC in return for the provision of services of an Independent Senior Officer (ISO) for the funds. Frank L. Tarantino serves as the ISO and is an officer of the funds and the sole member of Tarantino LLC. The funds can terminate the ISO Agreement with Tarantino LLC at any time under the terms of the ISO Agreement. Prior to November 1, 2014, the funds had entered into services agreements (the Compliance Officer Agreements) which provided for payment of fees by the funds to Tarantino LLC and Griffin Compliance LLC in return for the provision of services of an Independent Chief Compliance Officer (ICCO) and Assistant ICCO, respectively, for the funds. Prior to November 1, 2014, Frank L. Tarantino served as the ICCO. Effective October 31, 2014, Mr. Tarantino resigned as ICCO and the Compliance Officer Agreement between the funds and Tarantino LLC was terminated. Prior to June 1, 2014, Robyn L. Griffin served as the Assistant ICCO and was an officer of the funds. Ms. Griffin is the sole member of Griffin Compliance LLC. Effective May 31, 2014, Ms. Griffin resigned as Assistant ICCO and the Compliance Officer Agreement between the funds and Griffin Compliance LLC was terminated. For the year ended March 31, 2015, the aggregate fees paid by the fund under these agreements were $8,946 and are included in “Miscellaneous” expense in the Statement of Operations. MFS had agreed to reimburse the fund for a portion of the payments made by the fund for the services under the Compliance Officer Agreements in the amount of $2,497, which is included in the reduction of total expenses in the Statement of Operations. Additionally, MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO, Assistant ICCO, and ISO.

The fund invests in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks current income consistent with preservation of capital and liquidity. Income earned on this investment is included in “Dividends from underlying affiliated funds” in the Statement of Operations. This money market fund does not pay a management fee to MFS.

(4) Portfolio Securities

For the year ended March 31, 2015, purchases and sales of investments, other than short-term obligations, aggregated $478,448,209 and $357,209,991, respectively.

(5) Shares of Beneficial Interest

The fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest. Transactions in fund shares were as follows:

 

     Year ended
3/31/15		      Year ended
3/31/14		  
     Shares      Amount      Shares      Amount  
Shares sold            

Class A

      15,837,710         $138,752,687         16,698,114         $142,378,298   

Class B

      237,241         2,082,056         285,299         2,417,714   

Class C

      2,551,278         22,423,106         2,570,610         22,049,319   

Class I

      20,712,389         180,707,432         48,561,475         408,726,226   

Class A1

      553,055         4,842,592         522,908         4,464,650   

Class B1

      2,023         17,714         2,760         23,426   
     39,893,696         $348,825,587         68,641,166         $580,059,633   

 

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Notes to Financial Statements – continued

 

     Year ended
3/31/15		     Year ended
3/31/14		  
     Shares     Amount     Shares     Amount  
Shares issued to shareholders in
reinvestment of distributions		         

Class A

      2,720,057        $23,851,304        3,305,143        $27,934,427   

Class B

      76,521        671,674        95,723        809,735   

Class C

      424,331        3,733,240        532,886        4,517,825   

Class I

      2,312,424        20,265,429        1,290,841        10,873,874   

Class A1

      1,963,569        17,220,966        2,265,384        19,141,145   

Class B1

      1,467        12,841        4,248        36,066   
     7,498,369        $65,755,454        7,494,225        $63,313,072   
Shares reacquired         

Class A

      (17,045,156 )      $(148,706,171 )      (48,149,446 )      $(405,605,754 ) 

Class B

      (472,755 )      (4,138,153 )      (1,275,436 )      (10,763,014 ) 

Class C

      (3,266,864 )      (28,578,647 )      (10,178,906 )      (86,043,859 ) 

Class I

      (10,293,227 )      (89,765,156 )      (22,776,518 )      (189,795,718 ) 

Class A1

      (6,083,099 )      (53,181,630 )      (12,617,892 )      (106,482,583 ) 

Class B1

      (77,013 )      (672,681 )      (156,794 )      (1,348,085 ) 
     (37,238,114 )      $(325,042,438 )      (95,154,992 )      $(800,039,013 ) 
Net change         

Class A

      1,512,611        $13,897,820        (28,146,189 )      $(235,293,029 ) 

Class B

      (158,993 )      (1,384,423 )      (894,414 )      (7,535,565 ) 

Class C

      (291,255 )      (2,422,301 )      (7,075,410 )      (59,476,715 ) 

Class I

      12,731,586        111,207,705        27,075,798        229,804,382   

Class A1

      (3,566,475 )      (31,118,072 )      (9,829,600 )      (82,876,788 ) 

Class B1

      (73,523 )      (642,126 )      (149,786 )      (1,288,593 ) 
     10,153,951        $89,538,603        (19,019,601 )      $(156,666,308 ) 

(6) Line of Credit

The fund and certain other funds managed by MFS participate in a $1.25 billion unsecured committed line of credit, subject to a $1 billion sublimit, provided by a syndication of banks under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the higher of the Federal Reserve funds rate or one month LIBOR plus an agreed upon spread. A commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds at the end of each calendar quarter. In addition, the fund and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at a rate equal to the Federal Reserve funds rate plus an agreed upon spread. For the year ended March 31, 2015, the fund’s commitment fee and interest expense were $7,428 and $0, respectively, and are included in “Miscellaneous” expense in the Statement of Operations.

 

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Notes to Financial Statements – continued

 

(7) Transactions in Underlying Affiliated Funds-Affiliated Issuers

An affiliated issuer may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, the fund assumes the following to be an affiliated issuer:

 

Underlying Affiliated Fund   

Beginning

Shares/Par

Amount

     

Acquisitions

Shares/Par

Amount

     

Dispositions

Shares/Par

Amount

    

Ending

Shares/Par

Amount

  
MFS Institutional Money
Market Portfolio		      131,256,843         395,275,133         (439,263,418 )      87,268,558   
Underlying Affiliated Fund   

Realized

Gain (Loss)

     

Capital Gain

Distributions

     

Dividend

Income

    

Ending

Value

  
MFS Institutional Money
Market Portfolio		      $—         $—         $57,998        $87,268,558   

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees of MFS Municipal Series Trust and the Shareholders of MFS Municipal Income Fund:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of MFS Municipal Income Fund (one of the series of MFS Municipal Series Trust) (the “Fund”) as of March 31, 2015, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2015, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of MFS Municipal Income Fund as of March 31, 2015, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Boston, Massachusetts

May 13, 2015

 

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TRUSTEES AND OFFICERS — IDENTIFICATION AND BACKGROUND

The Trustees and Officers of the Trust, as of May 1, 2015, are listed below, together with their principal occupations during the past five years. (Their titles may have varied during that period.) The address of each Trustee and Officer is 111 Huntington Avenue, Boston, Massachusetts 02199-7618.

 

Name, Age

  

Position(s) Held

with Fund

   Trustee/Officer
Since (h)		  

Principal
Occupations During

the Past Five Years

  

Other

Directorships (j)

INTERESTED TRUSTEES

Robert J. Manning (k)

(age 51)

   Trustee   February 2004   Massachusetts Financial Services Company, Chairman, Co-Chief Executive Officer and Director; Chief Investment Officer (until 2010)   N/A

Robin A. Stelmach (k)

(age 53)

   Trustee and President   January 2014   Massachusetts Financial Services Company, Executive Vice President and Chief Operating Officer   N/A
INDEPENDENT TRUSTEES      

David H. Gunning

(age 72)

   Trustee and Chair of Trustees   January 2004   Private investor   Lincoln Electric Holdings, Inc. (welding equipment manufacturer), Director; Development Alternatives, Inc. (consulting), Director/Non-Executive Chairman

Steven E. Buller

(age 63)

   Trustee   February 2014   Chairman, Financial Accounting Standards Advisory Council; Standing Advisory Group, Public Company Accounting Oversight Board, Member (until 2014); BlackRock, Inc. (investment management), Managing Director (until 2014), BlackRock Finco UK (investment management), Director (until 2014)   N/A

 

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Trustees and Officers – continued

 

Name, Age

  

Position(s) Held

with Fund

   Trustee/Officer
Since (h)		  

Principal
Occupations During

the Past Five Years

  

Other

Directorships (j)

Robert E. Butler

(age 73)

   Trustee   January 2006   Consultant – investment company industry regulatory and compliance matters   N/A

Maureen R. Goldfarb

(age 60)

   Trustee   January 2009   Private investor   N/A

William R. Gutow

(age 73)

   Trustee   December 1993   Private investor and real estate consultant; Capitol Entertainment Management Company (video franchise), Vice Chairman   Texas Donuts (donut franchise), Vice Chairman (until 2010)

Michael Hegarty

(age 70)

   Trustee   December 2004   Private investor   Rouse Properties Inc. (real estate), Director; Capmark Financial Group Inc. (real estate), Director

John P. Kavanaugh

(age 60)

   Trustee   January 2009   Private investor   N/A

Maryanne L. Roepke

(age 59)

   Trustee   May 2014   American Century Investments (investment management), Senior Vice President and Chief Compliance Officer (until 2014)   N/A

Laurie J. Thomsen

(age 57)

   Trustee   March 2005   Private investor; New Profit, Inc. (venture philanthropy), Executive Partner (until 2010)   The Travelers Companies (insurance), Director

Robert W. Uek

(age 73)

   Trustee   January 2006   Consultant to investment company industry   N/A
OFFICERS        

Christopher R. Bohane (k)

(age 41)

   Assistant Secretary and Assistant Clerk   July 2005   Massachusetts Financial Services Company, Vice President and Assistant General Counsel   N/A

Kino Clark (k)

(age 46)

  

Assistant

Treasurer

   January 2012  

Massachusetts Financial

Services Company,

Vice President

   N/A

 

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Trustees and Officers – continued

 

Name, Age

  

Position(s) Held

with Fund

   Trustee/Officer
Since (h)		  

Principal
Occupations During

the Past Five Years

  

Other

Directorships (j)

Thomas H. Connors (k)

(age 55)

   Assistant Secretary and Assistant Clerk   September 2012   Massachusetts Financial Services Company, Vice President and Senior Counsel; Deutsche Investment Management Americas Inc. (financial service provider), Director and Senior Counsel (until 2012)   N/A

Ethan D. Corey (k)

(age 51)

   Assistant Secretary and Assistant Clerk   July 2005  

Massachusetts Financial Services Company,

Senior Vice President and Associate General Counsel

   N/A

David L. DiLorenzo (k)

(age 46)

   Treasurer   July 2005   Massachusetts Financial Services Company, Senior Vice President   N/A

Timothy M. Fagan (k)

(age 46)

   Chief Compliance Officer   November 2014   Massachusetts Financial Services Company, Chief Compliance Officer; Vice President and Senior Counsel (until 2012)   N/A

Brian E. Langenfeld (k)

(age 42)

   Assistant Secretary and Assistant Clerk   June 2006   Massachusetts Financial Services Company, Vice President and Senior Counsel   N/A

Susan S. Newton (k)

(age 65)

   Assistant Secretary and Assistant Clerk   May 2005   Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel   N/A

Kenneth Paek (k)

(age 40)

   Assistant Treasurer   February 2015   Massachusetts Financial Services Company, Vice President; Cohen & Steers, Vice President/Head of Fund Administration (until 2014)   N/A

 

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Trustees and Officers – continued

 

Name, Age

  

Position(s) Held

with Fund

   Trustee/Officer
Since (h)		  

Principal
Occupations During

the Past Five Years

  

Other

Directorships (j)

Susan A. Pereira (k)

(age 44)

   Assistant Secretary and Assistant Clerk   July 2005   Massachusetts Financial Services Company, Vice President and Senior Counsel   N/A

Kasey L. Phillips (k)

(age 44)

   Assistant Treasurer   September 2012   Massachusetts Financial Services Company, Vice President; Wells Fargo Funds Management, LLC, Senior Vice President, Fund Treasurer (until 2012)   N/A

Mark N. Polebaum (k)

(age 62)

   Secretary and Clerk   January 2006   Massachusetts Financial Services Company, Executive Vice President, General Counsel and Secretary   N/A

Matthew A. Stowe (k)

(age 40)

   Assistant Secretary and Assistant Clerk   October 2014   Massachusetts Financial Services Company, Vice President and Assistant General Counsel   N/A

Frank L. Tarantino

(age 71)

  

Independent

Senior Officer

   June 2004   Tarantino LLC (provider of compliance services), Principal   N/A

Richard S. Weitzel (k)

(age 44)

   Assistant Secretary and Assistant Clerk   October 2007   Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel   N/A

James O. Yost (k)

(age 54)

  

Deputy

Treasurer

   September 1990   Massachusetts Financial Services Company, Senior Vice President   N/A

 

(h) Date first appointed to serve as Trustee/officer of an MFS Fund. Each Trustee has served continuously since appointment unless indicated otherwise. For the period from December 15, 2004 until February 22, 2005, Mr. Manning served as Advisory Trustee. Prior to January 2012, Messrs. DiLorenzo and Yost served as Assistant Treasurers of the Funds. Ms. Stelmach was appointed as President of the Funds as of October 1, 2014.
(j) Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).
(k) “Interested person” of the Trust within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act), which is the principal federal law governing investment companies like the fund, as a result of a position with MFS. The address of MFS is 111 Huntington Avenue, Boston, Massachusetts 02199-7618.

 

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Trustees and Officers – continued

 

Each Trustee (except Ms. Stelmach, Mr. Buller and Ms. Roepke) has been elected by shareholders and each Trustee and officer holds office until his or her successor is chosen and qualified or until his or her earlier death, resignation, retirement or removal. The Trust does not hold annual meetings for the purpose of electing Trustees, and Trustees are not elected for fixed terms. Messrs. Butler, Kavanaugh, Uek and Mses. Thomsen and Roepke are members of the Trust’s Audit Committee.

Each of the Fund’s Trustees and officers holds comparable positions with certain other funds of which MFS or a subsidiary is the investment adviser or distributor, and, in the case of the officers, with certain affiliates of MFS. As of May 1, 2015, the Trustees served as board members of 132 funds within the MFS Family of Funds.

The Statement of Additional Information for a Fund includes further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.

 

 

Investment Adviser   Custodian
Massachusetts Financial Services Company
111 Huntington Avenue
Boston, MA 02199-7618		  

JPMorgan Chase Bank, NA

4 Metrotech Center

New York, NY 11245

Distributor   Independent Registered Public Accounting Firm
MFS Fund Distributors, Inc.
111 Huntington Avenue
Boston, MA 02199-7618		  

Deloitte & Touche LLP

200 Berkeley Street

Boston, MA 02116

Portfolio Manager  
Richard Gable  

 

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PROXY VOTING POLICIES AND INFORMATION

MFS votes proxies on behalf of the fund pursuant to proxy voting policies and procedures that are available without charge, upon request, by calling 1-800-225-2606, by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.

Information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.

QUARTERLY PORTFOLIO DISCLOSURE

The fund will file a complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. A shareholder can obtain the quarterly portfolio holdings report at mfs.com. The fund’s Form N-Q is also available on the EDGAR database on the Commission’s Internet Web site at http://www.sec.gov, and may be reviewed and copied at the:

Public Reference Room

Securities and Exchange Commission

100 F Street, NE, Room 1580

Washington, D.C. 20549

Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. Copies of the fund’s Form N-Q also may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section at the above address.

FURTHER INFORMATION

From time to time, MFS may post important information about the fund or the MFS funds on the MFS web site (mfs.com). This information is available by visiting the “Market Commentary” and “Announcements” sub sections in the “Market Outlooks” section of mfs.com or by clicking on the fund’s name under “Mutual Funds” in the “Products” section of mfs.com.

FEDERAL TAX INFORMATION (unaudited)

The fund will notify shareholders of amounts for use in preparing 2015 income tax forms in January 2016. The following information is provided pursuant to provisions of the Internal Revenue Code.

Of the dividends paid from net investment income during the fiscal year, 99.69% is designated as exempt interest dividends for federal income tax purposes. If the fund has earned income on private activity bonds, a portion of the dividends paid may be considered a tax preference item for purposes of computing a shareholder’s alternative minimum tax.

 

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rev. 3/11

 

 

FACTS

 

   WHAT DOES MFS DO WITH YOUR PERSONAL INFORMATION?   LOGO

 

Why?   Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

 

What?  

The types of personal information we collect and share depend on the product or service you have with us. This information can include:

 

• Social Security number and account balances

• Account transactions and transaction history

• Checking account information and wire transfer instructions

 

When you are no longer our customer, we continue to share your information as described in this notice.

 

How?   All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons MFS chooses to share; and whether you can limit this sharing.

 

Reasons we can share your
personal information		   Does MFS
share?		   Can you limit
this sharing?

For our everyday business purposes –

such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus

   Yes   No

For our marketing purposes –

to offer our products and services to you

   No   We don’t share
For joint marketing with other financial companies   No   We don’t share

For our affiliates’ everyday business purposes –

information about your transactions and experiences

   No   We don’t share

For our affiliates’ everyday business purposes –

information about your creditworthiness

   No   We don’t share
For nonaffiliates to market to you   No   We don’t share

 

Questions?   Call 800-225-2606 or go to mfs.com.

 

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Page 2  

 

 

Who we are
Who is providing this notice?   MFS Funds, MFS Investment Management, MFS Institutional Advisors, Inc., MFS Fund Distributors, Inc., MFS Heritage Trust Company, and MFS Service Center, Inc.

 

What we do
How does MFS protect my personal information?   To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include procedural, electronic, and physical safeguards for the protection of the personal information we collect about you.
How does MFS collect my personal information?  

We collect your personal information, for example, when you

 

• open an account or provide account information

• direct us to buy securities or direct us to sell your securities

• make a wire transfer

 

We also collect your personal information from others, such as credit bureaus, affiliates and other companies.

Why can’t I limit all sharing?  

Federal law gives you the right to limit only

 

• sharing for affiliates’ everyday business purposes – information about your creditworthiness

• affiliates from using your information to market to you

• sharing for nonaffiliates to market to you

 

State laws and individual companies may give you additional rights to limit sharing.

 

Definitions
Affiliates  

Companies related by common ownership or control. They can be financial and nonfinancial companies.

 

• MFS does not share personal information with affiliates, except for everyday business purposes as described on page one of this notice.

Nonaffiliates  

Companies not related by common ownership or control. They can be financial and nonfinancial companies.

 

• MFS does not share with nonaffiliates so they can market to you.

Joint Marketing  

A formal agreement between nonaffiliated financial companies that together market financial products or services to you.

 

• MFS doesn’t jointly market.

 

 

Other important information
If you own an MFS product or receive an MFS service in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

 

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LOGO

 

Save paper with eDelivery.

 

LOGO

MFS® will send you prospectuses,

reports, and proxies directly via e-mail so you will get information faster with less mailbox clutter.

To sign up:

1. Go to mfs.com.

2. Log in via MFS® Access.

3. Select eDelivery.

If you own your MFS fund shares through a financial institution or a retirement plan, MFS® TALK, MFS® Access, or eDelivery may not be available to you.

 

CONTACT

WEB SITE

mfs.com

MFS TALK

1-800-637-8255

24 hours a day

ACCOUNT SERVICE AND LITERATURE

Shareholders

1-800-225-2606

Financial advisors

1-800-343-2829

Retirement plan services

1-800-637-1255

MAILING ADDRESS

MFS Service Center, Inc.

P.O. Box 55824

Boston, MA 02205-5824

OVERNIGHT MAIL

MFS Service Center, Inc.

c/o Boston Financial Data Services

30 Dan Road

Canton, MA 02021-2809

 

Table of Contents
ITEM 2. CODE OF ETHICS.

The Registrant has adopted a Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act and as defined in Form N-CSR that applies to the Registrant’s principal executive officer and principal financial and accounting officer. During the period covered by this report, the Registrant has not amended any provision in its Code of Ethics (the “Code”) that relates to an element of the Code’s definitions enumerated in paragraph (b) of Item 2 of this Form N-CSR. During the period covered by this report, the Registrant did not grant a waiver, including an implicit waiver, from any provision of the Code.

A copy of the Code of Ethics is filed as an exhibit to this Form N-CSR.

 

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Messrs. Robert E. Butler, John P. Kavanaugh and Robert W. Uek and Mses. Maryanne L. Roepke and Laurie J. Thomsen, members of the Audit Committee, have been determined by the Board of Trustees in their reasonable business judgment to meet the definition of “audit committee financial expert” as such term is defined in Form N-CSR. In addition, Messrs. Butler, Kavanaugh and Uek and Mses. Roepke and Thomsen are “independent” members of the Audit Committee (as such term has been defined by the Securities and Exchange Commission in regulations implementing Section 407 of the Sarbanes-Oxley Act of 2002). The Securities and Exchange Commission has stated that the designation of a person as an audit committee financial expert pursuant to this Item 3 on the Form N-CSR does not impose on such a person any duties, obligations or liability that are greater than the duties, obligations or liability imposed on such person as a member of the Audit Committee and the Board of Trustees in the absence of such designation or identification.

 

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The Board of Trustees has appointed Deloitte & Touche LLP (“Deloitte”) to serve as independent accountants to each series of the Registrant (each a “Fund” and collectively the “Funds”). The tables below set forth the audit fees billed to each Fund as well as fees for non-audit services provided to each Fund and/or to the Fund’s investment adviser, Massachusetts Financial Services Company (“MFS”), and to various entities either controlling, controlled by, or under common control with MFS that provide ongoing services to the Fund (“MFS Related Entities”).

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For the fiscal years ended March 31, 2015 and 2014, audit fees billed to each Fund by Deloitte were as follows:

 

     Audit Fees  
     2015      2014  

Fees billed by Deloitte:

      

MFS Alabama Municipal Bond Fund

      44,077         43,354   

MFS Arkansas Municipal Bond Fund

      44,077         43,354   

MFS California Municipal Bond Fund

      44,077         43,354   

MFS Georgia Municipal Bond Fund

      44,077         43,354   

MFS Maryland Municipal Bond Fund

      44,077         43,354   

MFS Massachusetts Municipal Bond Fund

      44,077         43,354   

MFS Mississippi Municipal Bond Fund

      44,077         43,354   

MFS Municipal Income Fund

      50,241         49,415   

MFS New York Municipal Bond Fund

      44,077         43,354   

MFS North Carolina Municipal Bond Fund

      44,077         43,354   

MFS Pennsylvania Municipal Bond Fund

      44,077         43,354   

MFS South Carolina Municipal Bond Fund

      44,077         43,354   

MFS Tennessee Municipal Bond Fund

      44,077         43,354   

MFS Virginia Municipal Bond Fund

      44,077         43,354   

MFS West Virginia Municipal Bond Fund

      44,077         43,354   
  

 

 

     

 

 

  

Total

      667,319         656,371   

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For the fiscal years ended March 31, 2015 and 2014, fees billed by Deloitte for audit-related, tax and other services provided to each Fund and for audit-related, tax and other services provided to MFS and MFS Related Entities were as follows:

 

     Audit-Related  Fees1      Tax Fees2      All Other Fees3  
     2015      2014      2015      2014      2015      2014  

Fees billed by Deloitte:

                  

To MFS Alabama Municipal Bond Fund

      0         0         5,779         5,682         1,012         1,008   

To MFS Arkansas Municipal Bond Fund

      0         0         5,779         5,682         1,040         1,029   

To MFS California Municipal Bond Fund

      0         0         5,779         5,682         1,061         1,039   

To MFS Georgia Municipal Bond Fund

      0         0         5,779         5,682         1,014         1,010   

To MFS Maryland Municipal Bond Fund

      0         0         5,779         5,682         1,021         1,014   

To MFS Massachusetts Municipal Bond Fund

      0         0         5,779         5,682         1,053         1,036   

To MFS Mississippi Municipal Bond Fund

      0         0         5,779         5,682         1,020         1,014   

To MFS Municipal Income Fund

      0         0         5,840         5,742         1,465         1,282   

To MFS New York Municipal Bond Fund

      0         0         5,779         5,682         1,042         1,028   

To MFS North Carolina Municipal Bond Fund

      0         0         5,779         5,682         1,076         1,056   

To MFS Pennsylvania Municipal Bond Fund

      0         0         5,779         5,682         1,026         1,019   

To MFS South Carolina Municipal Bond Fund

      0         0         5,779         5,682         1,039         1,027   

To MFS Tennessee Municipal Bond Fund

      0         0         5,779         5,682         1,024         1,016   

To MFS Virginia Municipal Bond Fund

      0         0         5,779         5,682         1,064         1,045   

To MFS West Virginia Municipal Bond Fund

      0         0         5,779         5,682         1,027         1,019   

Total fees billed by Deloitte to above Funds:

      0         0         86,746         85,290         15,984         15,642   

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     Audit-Related Fees1      Tax Fees2      All Other Fees3  
     2015      2014      2015      2014      2015      2014  

Fees billed by Deloitte:

                  

To MFS and MFS Related Entities of MFS Alabama Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS Arkansas Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS California Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS Georgia Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS Maryland Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS Massachusetts Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS Mississippi Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS Municipal Income Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS New York Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS North Carolina Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS Pennsylvania Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS South Carolina Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS Tennessee Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS Virginia Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

To MFS and MFS Related Entities of MFS West Virginia Municipal Bond Fund*

      1,294,130         1,934,406         0         0         0         0   

 

    

Aggregate fees for non-audit

services

  
     2015      2014  

Fees billed by Deloitte:

      

To MFS Alabama Municipal Bond Fund, MFS and MFS Related Entities#

      1,300,921         1,944,554   

To MFS Arkansas Municipal Bond Fund, MFS and MFS Related Entities#

      1,300,949         1,944,575   

To MFS California Municipal Bond Fund, MFS and MFS Related Entities#

      1,300,970         1,944,585   

To MFS Georgia Municipal Bond Fund, MFS and MFS Related Entities#

      1,300,923         1,944,556   

To MFS Maryland Municipal Bond Fund, MFS and MFS Related Entities#

      1,300,930         1,944,560   

To MFS Massachusetts Municipal Bond Fund, MFS and MFS Related Entities#

     1,300,962         1,944,582   

To MFS Mississippi Municipal Bond Fund, MFS and MFS Related Entities#

     1,300,929         1,944,560   

To MFS Municipal Income Fund, MFS and MFS Related Entities#

     1,301,435         1,944,888   

To MFS New York Municipal Bond Fund, MFS and MFS Related Entities#

      1,300,951         1,944,574   

To MFS North Carolina Municipal Bond Fund, MFS and MFS Related Entities#

     1,300,985         1,944,602   

To MFS Pennsylvania Municipal Bond Fund, MFS and MFS Related Entities#

     1,300,935         1,944,565   

To MFS South Carolina Municipal Bond Fund, MFS and MFS Related Entities#

     1,300,948         1,944,573   

To MFS Tennessee Municipal Bond Fund, MFS and MFS Related Entities#

     1,300,933         1,944,562   

To MFS Virginia Municipal Bond Fund, MFS and MFS Related Entities#

     1,300,973         1,944,591   

To MFS West Virginia Municipal Bond Fund, MFS and MFS Related Entities#

     1,300,936         1,944,565   

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* 

This amount reflects the fees billed to MFS and MFS Related Entities for non-audit services relating directly to the operations and financial reporting of the Funds (portions of which services also related to the operations and financial reporting of other funds within the MFS Funds complex).

# This amount reflects the aggregate fees billed by Deloitte, as the case may be, for non-audit services rendered to the Funds and for non-audit services rendered to MFS and the MFS Related Entities.
1

The fees included under “Audit-Related Fees” are fees related to assurance and related services that are reasonably related to the performance of the audit or review of financial statements, but not reported under ‘‘Audit Fees,’’ including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters and internal control reviews.

2 

The fees included under “Tax Fees” are fees associated with tax compliance, tax advice and tax planning, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews and tax distribution and analysis.

3 

The fees included under “All Other Fees” are fees for products and services provided by Deloitte other than those reported under “Audit Fees,” “Audit-Related Fees” and “Tax Fees,” including fees for services related to review of internal controls and review of Rule 38a-1 compliance program.

Item 4(e)(1):

Set forth below are the policies and procedures established by the Audit Committee of the Board of Trustees relating to the pre-approval of audit and non-audit related services:

To the extent required by applicable law, pre-approval by the Audit Committee of the Board is needed for all audit and permissible non-audit services rendered to the Funds and all permissible non-audit services rendered to MFS or MFS Related Entities if the services relate directly to the operations and financial reporting of the Registrant. Pre-approval is currently on an engagement-by-engagement basis. In the event pre-approval of such services is necessary between regular meetings of the Audit Committee and it is not practical to wait to seek pre-approval at the next regular meeting of the Audit Committee, pre-approval of such services may be referred to the Chair of the Audit Committee for approval; provided that the Chair may not pre-approve any individual engagement for such services exceeding $50,000 or multiple engagements for such services in the aggregate exceeding $100,000 in each period between regular meetings of the Audit Committee. Any engagement pre-approved by the Chair between regular meetings of the Audit Committee shall be presented for ratification by the entire Audit Committee at its next regularly scheduled meeting.

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Item 4(e)(2):

None, or 0%, of the services relating to the Audit-Related Fees, Tax Fees and All Other Fees paid by the Fund and MFS and MFS Related Entities relating directly to the operations and financial reporting of the Registrant disclosed above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee approval after the start of the engagement with respect to services other than audit, review or attest services, if certain conditions are satisfied).

Item 4(f): Not applicable.

Item 4(h): The Registrant’s Audit Committee has considered whether the provision by a Registrant’s independent registered public accounting firm of non-audit services to MFS and MFS Related Entities that were not pre-approved by the Committee (because such services did not relate directly to the operations and financial reporting of the Registrant) was compatible with maintaining the independence of the independent registered public accounting firm as the Registrant’s principal auditors.

 

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable to the Registrant.

 

ITEM 6. INVESTMENTS

A schedule of investments of the Registrant is included as part of the report to shareholders of such series under Item 1 of this Form N-CSR.

 

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the Registrant.

 

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the Registrant.

 

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable to the Registrant.

 

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no material changes to the procedures by which shareholders may send recommendations to the Board for nominees to the Registrant’s Board since the Registrant last provided disclosure as to such procedures in response to the requirements of Item 407 (c)(2)(iv) of Regulation S-K or this Item.

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ITEM 11. CONTROLS AND PROCEDURES.

 

(a) Based upon their evaluation of the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as conducted within 90 days of the filing date of this report on Form N-CSR, the registrant’s principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

 

(b) There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by the report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

ITEM 12. EXHIBITS.

 

(a) File the exhibits listed below as part of this form. Letter or number the exhibits in the sequence indicated.

 

  (1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Code of Ethics attached hereto.

 

  (2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2): Attached hereto.

 

(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for the purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference: Attached hereto.

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Notice

A copy of the Amended and Restated Declaration of Trust, as amended, of the Registrant is on file with the Secretary of State of The Commonwealth of Massachusetts and notice is hereby given that this instrument is executed on behalf of the Registrant by an officer of the Registrant as an officer and not individually and the obligations of or arising out of this instrument are not binding upon any of the Trustees or shareholders individually, but are binding only upon the assets and property of the respective constituent series of the Registrant.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) MFS MUNICIPAL SERIES TRUST

 

By (Signature and Title)*    ROBIN A. STELMACH
  Robin A. Stelmach, President

Date: May 13, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)*    ROBIN A. STELMACH
  Robin A. Stelmach, President (Principal Executive Officer)

Date: May 13, 2015

 

By (Signature and Title)*    DAVID L. DILORENZO
  David L. DiLorenzo, Treasurer (Principal Financial Officer and Accounting Officer)

Date: May 13, 2015

 

* Print name and title of each signing officer under his or her signature.