N-Q 1 a_matxexinc.htm PUTNAM MASSACHUSETTS TAX EXEMPT INCOME FUND a_mastxexinc.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT 
INVESTMENT COMPANY
 
Investment Company Act file number: (811-04518)   
 
Exact name of registrant as specified in charter:  Putnam Massachusetts Tax Exempt Income Fund
     
Address of principal executive offices: One Post Office Square, Boston, Massachusetts 02109 
 
Name and address of agent for service:  Beth S. Mazor, Vice President 
  One Post Office Square 
  Boston, Massachusetts 02109 
 
Copy to:    John W. Gerstmayr, Esq. 
  Ropes & Gray LLP 
  800 Boylston Street 
  Boston, Massachusetts 02199-3600 
 
Registrant’s telephone number, including area code:  (617) 292-1000 
 
Date of fiscal year end: May 31, 2011     
 
Date of reporting period: February 28, 2011     

 

Item 1. Schedule of Investments:


Putnam Massachusetts Tax Exempt Income Fund
The fund's portfolio
2/28/11 (Unaudited)

Key to holding's abbreviations
AGM -- Assured Guaranty Municipal Corporation
AGO -- Assured Guaranty, Ltd.
AMBAC -- AMBAC Indemnity Corporation
Cmnwlth. of PR Gtd. -- Commonwealth of Puerto Rico Guaranteed
FGIC -- Financial Guaranty Insurance Company
FRB -- Floating Rate Bonds
G.O. Bonds -- General Obligation Bonds
GNMA Coll. -- Government National Mortgage Association Collateralized
IFB -- Inverse Floating Rate Bonds
NATL -- National Public Finance Guarantee Corp.
SGI -- Syncora Guarantee, Inc.
VRDN -- Variable Rate Demand Notes

MUNICIPAL BONDS AND NOTES (98.3%)(a)       
  Rating(RAT)  Principal amount  Value 
 
Guam (1.2%)       
Territory of GU, Econ. Dev. & Comm. Auth. Rev. Bonds       
(Tobacco Settlement), 5 1/4s, 6/1/32  BBB+/F  $1,935,000  $1,682,347 
Territory of GU, Pwr. Auth. Rev. Bonds, Ser. A,       
5 1/2s, 10/1/40  BBB  500,000  464,255 
Territory of GU, Rev. Bonds, Ser. A, 5 3/8s, 12/1/24  BBB-  1,000,000  980,410 
Territory of GU, Wtr. Wks. Auth. Rev. Bonds, 5 5/8s,       
7/1/40  Ba2  600,000  543,126 
      3,670,138 
 
Massachusetts (86.6%)       
Boston, Indl. Dev. Fin. Auth. Rev. Bonds (Springhouse,       
Inc.), 6s, 7/1/28  BB-/P  2,150,000  1,817,739 
Boston, Indl. Dev. Fin. Auth. Swr. Fac. Rev. Bonds       
(Harbor Elec. Energy Co.), 7 3/8s, 5/15/15  Aa3  3,225,000  3,235,256 
Boston, Wtr. & Swr. Comm. Rev. Bonds, Ser. A, 5 3/4s,       
11/1/13  Aa1  4,015,000  4,222,174 
Framingham, Hsg. Auth. Rev. Bonds (Beaver Terrace),       
Ser. A, GNMA Coll., 6.35s, 2/20/32  AA+  2,100,000  2,195,046 
Lowell, G.O. Bonds, Ser. A, SGI, 5s, 9/15/22  Aa2  1,750,000  1,868,283 
MA Bay Trans. Auth. Sales Tax Rev. Bonds       
Ser. C, 5 1/2s, 7/1/16  AAA  2,975,000  3,490,449 
Ser. A, 5s, 7/1/31  AAA  3,390,000  3,586,078 
MA Dev. Fin. Agcy. Sr. Living Fac. Rev. Bonds       
(Groves-Lincoln), Ser. A, 7 7/8s, 6/1/44  BB-/P  1,650,000  1,635,282 
MA Edl. Fin. Auth. Rev. Bonds, Ser. B, 5.7s, 1/1/31  AA  2,395,000  2,320,204 
MA State G.O. Bonds       
Ser. C, AMBAC, 5s, 8/1/37  Aa1  2,000,000  2,007,520 
(Construction Loan), Ser. A, 5s, 8/1/27  Aa1  2,000,000  2,113,960 
MA State Rev. Bonds (Single Fam.), Ser. 134, 5.45s,       
12/1/28  Aa2  600,000  600,948 
MA State College Bldg. Auth. Rev. Bonds       
Ser. B, SGI, 5 1/2s, 5/1/28  Aa2  4,000,000  4,472,160 
Ser. A, AGO, 5s, 5/1/28  AA+  2,270,000  2,355,579 
MA State Dept. Trans. Rev. Bonds (Metro Hwy. Syst.),       
Ser. B       
5s, 1/1/37  A  2,250,000  2,113,335 
5s, 1/1/32  A3  1,840,000  1,786,566 
MA State Dev. Fin. Agcy. Rev. Bonds       
(Sabis Intl.), Ser. A, 8s, 4/15/39  BBB  575,000  617,050 
(Lasell College), 6 3/4s, 7/1/31  BB+/P  30,000  29,893 
(Linden Ponds, Inc. Fac.), Ser. A, 5 3/4s, 11/15/42  BB/P  1,900,000  1,262,721 
(WGBH Edl. Foundation), Ser. A, AMBAC, 5 3/4s, 1/1/42  A  5,000,000  4,804,850 
(Linden Ponds, Inc.), Ser. A, 5 3/4s, 11/15/35  BB/P  600,000  414,048 
(Boston Biomedical Research), 5 3/4s, 2/1/29  BBB-  1,750,000  1,499,855 
(Hampshire College), 5.7s, 10/1/34  Baa2  1,315,000  1,268,699 
(Hampshire College), 5 5/8s, 10/1/24  Baa2  1,000,000  1,013,670 
(New England Conservatory of Music), 5 1/4s, 7/1/38  Baa1  3,000,000  2,637,390 
(Simmons College), Ser. H, SGI, 5 1/4s, 10/1/33  Baa1  1,000,000  890,880 
(Wheelock College), Ser. C, 5 1/4s, 10/1/29  BBB  1,100,000  1,025,772 
(Carleton-Willard Village), 5 1/4s, 12/1/25  A-  700,000  668,801 
(Suffolk U.), 5 1/8s, 7/1/40  Baa2  1,500,000  1,265,475 
(Middlesex School), 5 1/8s, 9/1/23  A1  1,000,000  1,019,790 
(Emerson College), Ser. A, 5s, 1/1/40  A-  3,400,000  2,990,878 
(Boston College), Ser. P, 5s, 7/1/38  Aa3  2,000,000  1,967,640 
(MA College Pharmacy Allied), Ser. E, AGO, 5s, 7/1/31  AA+  2,000,000  1,989,760 
(Boston U.), Ser. V-1, 5s, 10/1/29  A2  2,000,000  1,997,520 
(Boston College), Ser. Q-1, 5s, 7/1/29  Aa3  1,050,000  1,084,587 
(Mount Holyoke College), 5s, 7/1/28  Aa3  3,000,000  3,117,240 
(Holy Cross College), Ser. B, 5s, 9/1/25  Aa3  1,500,000  1,579,425 
(First Mtge. - Orchard Cove), 5s, 10/1/19  BB+/P  550,000  490,039 
(First Mtge. - Orchard Cove), 5s, 10/1/18  BB+/P  515,000  469,608 
(WGBH Edl. Foundation), Ser. B, AGO, zero %, 1/1/29  AAA  2,000,000  799,480 
(WGBH Edl. Foundation), Ser. B, AGO, zero %, 1/1/28  AAA  2,000,000  851,400 
MA State Dev. Fin. Agcy. Solid Waste Disp. FRB       
(Dominion Energy Brayton), 5s, 2/1/36  A-  1,000,000  901,290 
MA State Dev. Fin. Agcy. Solid Waste Disp. Mandatory       
Put Bonds (5/1/19) (Dominion Energy Brayton), Ser. 1,       
5 3/4s, 12/1/42  A-  950,000  984,951 
MA State Hlth. & Edl. Fac. Auth. IFB, NATL, 5.24s,       
7/1/18  Baa1  9,000,000  9,011,160 
MA State Hlth. & Edl. Fac. Auth. Rev. Bonds       
(Quincy Med. Ctr.), Ser. A, 6 1/2s, 1/15/38  B+/P  1,000,000  830,430 

 


(UMass Memorial), Ser. C, 6 1/2s, 7/1/21  Baa1  3,125,000  3,137,719 
(Berkshire Hlth. Syst.), Ser. E, 6 1/4s, 10/1/31  BBB+  1,300,000  1,302,366 
(Harvard U.), Ser. N, 6 1/4s, 4/1/20  Aaa  5,000,000  6,427,450 
(Hlth. Care Syst.-Covenant Hlth.), 6s, 7/1/31  A/F  2,370,000  2,380,736 
(Partners Hlth. Care Syst.), Ser. C, 6s, 7/1/15  Aa2  75,000  76,700 
(Suffolk U.), Ser. A, 5 3/4s, 7/1/39  Baa2  3,000,000  2,890,230 
(Baystate Med. Ctr.), Ser. I, 5 3/4s, 7/1/36  A+  2,000,000  2,048,980 
(Partners Hlth. Care Syst.), Ser. C, 5 3/4s, 7/1/32  Aa2  150,000  150,899 
(Baystate Med. Ctr.), Ser. F, 5.7s, 7/1/27  A+  1,000,000  1,011,370 
(Springfield College), 5 5/8s, 10/15/40  Baa1  2,000,000  1,849,840 
(Harvard U.), Ser. A, 5 1/2s, 11/15/36  Aaa  2,185,000  2,325,714 
(Tufts U.), Ser. M, 5 1/2s, 2/15/27  Aa2  2,000,000  2,267,480 
(Cape Cod Hlth. Care), Ser. B, 5.45s, 11/15/23  BBB+  2,600,000  2,500,706 
(Milton Hosp.), Ser. D, 5 3/8s, 7/1/35  BB-  2,065,000  1,477,466 
(Jordan Hosp.), Ser. D, 5 3/8s, 10/1/28  BB-  3,000,000  2,448,390 
(Care Group), Ser. B-1, NATL, 5 3/8s, 2/1/27  A3  1,030,000  984,855 
(Care Group), Ser. B-2, NATL, 5 3/8s, 2/1/27  A3  1,000,000  956,170 
(Boston College), Ser. K, 5 3/8s, 6/1/14  Aa3  3,000,000  3,239,670 
(Lesley U.), Ser. A, AGO, 5 1/4s, 7/1/39  AA+  1,000,000  991,180 
(Winchester Hosp.), 5 1/4s, 7/1/38  BBB+  2,225,000  1,958,734 
(Lahey Clinic Med. Ctr.), Ser. D, 5 1/4s, 8/15/28  A+  3,000,000  2,793,690 
(Dana-Farber Cancer Inst.), Ser. K, 5 1/4s, 12/1/27  A1  2,500,000  2,566,975 
(MA Inst. of Tech.), Ser. I-1, 5.2s, 1/1/28  Aaa  10,000,000  11,392,793 
(Care Group), Ser. E-1, 5 1/8s, 7/1/38  A3  1,000,000  861,550 
(Fisher College), Ser. A, 5 1/8s, 4/1/37  BBB-  755,000  597,658 
(Lowell Gen. Hosp.), Ser. C, 5 1/8s, 7/1/35  Baa1  725,000  616,431 
(Wheaton Coll.), Ser. F, 5s, 1/1/41  A2  3,000,000  2,700,210 
(Partners Hlth. Care Syst.), Ser. J-1, 5s, 7/1/39  Aa2  1,500,000  1,372,785 
(Southcoast Hlth. Oblig.), Ser. D, 5s, 7/1/39  A2  1,500,000  1,312,920 
(Harvard U.), Ser. B, 5s, 10/1/38  Aaa  500,000  508,950 
(MA Inst. of Tech.), Ser. A, 5s, 7/1/38  Aaa  2,250,000  2,286,428 
(Berklee College of Music), Ser. A, 5s, 10/1/37  A+  1,750,000  1,661,205 
(Milford Regl. Med.), Ser. E, 5s, 7/15/37  Baa3  850,000  662,660 
(Sterling & Francine Clark), Ser. A, 5s, 7/1/36  Aa2  1,000,000  1,002,250 
(Harvard U.), 5s, 7/15/35  Aaa  2,750,000  2,796,173 
(Milford Regl. Med.), Ser. E, 5s, 7/15/32  Baa3  1,175,000  939,518 
(Care Group), Ser. E-1, 5s, 7/1/28  A3  1,730,000  1,586,618 
(Northeastern U.), Ser. R, 5s, 10/1/26  A2  1,165,000  1,184,048 
(Worcester City Campus Corp.), Ser. E, FGIC, NATL, 5s,       
10/1/26  A+  2,000,000  1,982,840 
(Milford Regl. Med.), Ser. E, 5s, 7/15/22  Baa3  1,800,000  1,650,294 
(Fisher College), Ser. A, 5s, 4/1/22  BBB-  1,110,000  1,040,703 
MA State Hlth. & Edl. Fac. Auth. VRDN       
(Museum of Fine Arts), Ser. A2, 0.21s, 12/1/37  VMIG1  2,500,000  2,500,000 
(Harvard U.), Ser. R, 0.15s, 11/1/49  VMIG1  6,470,000  6,470,000 
MA State Hsg. Fin. Agcy. FRB (Single Fam. Hsg.), Ser.       
126, 4.7s, 6/1/38  Aa2  1,880,000  1,614,412 
MA State Hsg. Fin. Agcy. Rev. Bonds       
Ser. C, 5.35s, 12/1/42  Aa3  1,500,000  1,402,425 
(Single Fam.), Ser. 139, 5 1/8s, 12/1/28  Aa2  1,000,000  986,740 
Ser. D, 5.05s, 6/1/40  Aa3  1,750,000  1,700,388 
(Single Fam.), Ser. 153, 4 3/4s, 12/1/27  Aa2  1,000,000  915,770 
MA State Indl. Fin. Agcy. Rev. Bonds       
(1st Mtge. Stone Institute & Newton Home), 7.9s, 1/1/24  B-/P  1,500,000  1,388,475 
(American Hingham, Wtr. Treatment), 6 3/4s, 12/1/25  BBB+/P  4,520,000  4,469,557 
(1st Mtge. Berkshire Retirement), Ser. A, 6 5/8s,       
7/1/16  BBB  3,340,000  3,351,423 
MA State Port Auth. Rev. Bonds       
Ser. A, 5s, 7/1/34  Aa3  3,500,000  3,515,295 
Ser. A, NATL, 5s, 7/1/33  Aa3  2,400,000  2,401,920 
Ser. C, AGM, 5s, 7/1/27  AA+  5,000,000  5,002,350 
Ser. A, AMBAC, 5s, 7/1/26  Aa3  3,000,000  3,080,760 
MA State Port Auth. Special Fac. Rev. Bonds (BOSFUEL),       
FGIC, NATL, 5s, 7/1/27  A3  2,500,000  2,364,625 
MA State School Bldg. Auth. Dedicated Sales Tax Rev.       
Bonds, Ser. A, AGM       
5s, 8/15/26  Aa1  6,000,000  6,227,400 
5s, 8/15/23  Aa1  5,000,000  5,270,650 
MA State Wtr. Poll. Abatement Trust Rev. Bonds       
Ser. 5, 5 3/8s, 8/1/27  Aaa  4,490,000  4,501,405 
Ser. 14, 5s, 8/1/32  Aaa  4,000,000  4,181,360 
Ser. 13, 5s, 8/1/26  Aaa  1,000,000  1,067,680 
MA State Wtr. Resource Auth. Rev. Bonds       
Ser. A, 6 1/2s, 7/15/19 (Escrowed to maturity)  Aa1  5,500,000  6,590,100 
Ser. A, NATL, 5s, 8/1/29  Aa1  4,000,000  4,090,360 
Ser. A, NATL, 5s, 8/1/29  Aa1  3,225,000  3,330,135 
Ser. A, NATL, 5s, 8/1/27  Aa1  1,500,000  1,562,505 
Ser. B, AMBAC, 5s, 8/1/26  Aa1  2,000,000  2,104,820 
Milford, G.O. Bonds, AGM, 5 1/8s, 12/15/24  Aa2  2,475,000  2,660,130 
Norwell, G.O. Bonds, AMBAC, 5s, 2/15/25  AAA  1,000,000  1,030,440 
      253,029,360 
 
Puerto Rico (10.0%)       
Children's Trust Fund Tobacco Settlement Rev. Bonds       
5 1/2s, 5/15/39  BBB  1,800,000  1,432,620 
5 3/8s, 5/15/33  BBB  2,025,000  1,739,941 
Cmnwlth. of PR, G.O. Bonds, Ser. A, 5 1/4s, 7/1/26  A3  1,620,000  1,560,433 
Cmnwlth. of PR, Aqueduct & Swr. Auth. Rev. Bonds,       
Ser. A       
6s, 7/1/44  Baa1  4,250,000  3,950,545 
6s, 7/1/38  Baa1  1,250,000  1,173,475 
Cmnwlth. of PR, Elec. Pwr. Auth. Rev. Bonds       
Ser. XX, 5 1/4s, 7/1/40  A3  3,000,000  2,620,020 
Ser. CCC, 5s, 7/1/28  A3  2,000,000  1,866,600 
Ser. TT, 5s, 7/1/27  A3  1,350,000  1,273,644 
Cmnwlth. of PR, Hwy. & Trans. Auth. Rev. Bonds       
Ser. AA-2, 5.3s, 7/1/35  A2  525,000  470,017 
Ser. L, AMBAC, 5 1/4s, 7/1/38  A3  3,250,000  2,830,263 

 


Ser. K, 5s, 7/1/30  A3  1,500,000  1,363,125 
Ser. I, FGIC, 5s, 7/1/25  A3  3,000,000  2,898,540 
Cmnwlth. of PR, Pub. Bldg. Auth. Mandatory Put Bonds       
(7/1/17) (Govt. Fac.), Ser. M-2, 5 3/4s, 7/1/34  A3  1,500,000  1,572,690 
Cmnwlth. of PR, Pub. Bldg. Auth. Rev. Bonds (Govt.       
Fac.), Ser. I, Cmnwlth. of PR Gtd., 5 1/4s, 7/1/29  A3  685,000  669,964 
Cmnwlth. of PR, Sales Tax Fin. Corp. Rev. Bonds       
Ser. A, 6s, 8/1/42  A1  2,250,000  2,254,275 
Ser. C, 5 1/4s, 8/1/41  A1  1,750,000  1,574,125 
      29,250,277 
  
Virgin Islands (0.5%)       
VI Pub. Fin. Auth. Rev. Bonds, Ser. A       
6s, 10/1/39  Baa3  600,000  604,764 
5s, 10/1/25  Baa2  850,000  837,862 
      1,442,626 
 
 
TOTAL INVESTMENTS       
Total investments (cost $287,198,771) (b)      $287,392,401 

 


Notes to the fund's portfolio

Unless noted otherwise, the notes to the fund's portfolio are for the close of the fund's reporting period, which ran from June 1, 2010 through February 28, 2011 (the reporting period).

(a) Percentages indicated are based on net assets of $292,243,064.

(RAT) The Moody's, Standard & Poor's or Fitch ratings indicated are believed to be the most recent ratings available at the close of the reporting period for the securities listed. Ratings are generally ascribed to securities at the time of issuance. While the agencies may from time to time revise such ratings, they undertake no obligation to do so, and the ratings do not necessarily represent what the agencies would ascribe to these securities at the close of the reporting period. Securities rated by Putnam are indicated by "/P." Securities rated by Fitch are indicated by "/F." The rating of an insured security represents what is believed to be the most recent rating of the insurer's claims-paying ability available at the close of the reporting period and does not reflect any subsequent changes. Security ratings are defined in the Statement of Additional Information.

(b) The aggregate identified cost on a tax basis is $287,198,771, resulting in gross unrealized appreciation and depreciation of $7,973,406 and $7,779,776, respectively, or net unrealized appreciation of $193,630.

The rates shown on FRB, Mandatory Put Bonds and VRDN are the current interest rates at the close of the reporting period.

The dates shown parenthetically on Mandatory Put Bonds represent the next mandatory put dates.

The dates shown on debt obligations are the original maturity dates.

IFB are securities that pay interest rates that vary inversely to changes in the market interest rates. As interest rates rise, inverse floaters produce less current income. The interest rates shown are the current interest rates at the close of the reporting period.

The fund had the following sector (concentrations) greater than 10% at the close of the reporting period (as a percentage of net assets):

Education  28.7% 
Health care  19.2 
Utilities  15.9 

 

Security valuation: Tax-exempt bonds and notes are generally valued on the basis of valuations provided by an independent pricing service approved by the Trustees. Such services use information with respect to transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities in determining value. These securities will generally be categorized as Level 2.

Certain investments, including certain restricted and illiquid securities and derivatives are also valued at fair value following procedures approved by the Trustees. Such valuations and procedures are reviewed periodically by the Trustees. These valuations consider such factors as significant market or specific security events such as interest rate or credit quality changes, various relationships with other securities, discount rates, U.S. Treasury, U.S. swap and credit yields, index levels, convexity exposures and recovery rates. These securities are classified as Level 2 or as Level 3 depending on the priority of the significant inputs. The fair value of securities is generally determined as the amount that the fund could reasonably expect to realize from an orderly disposition of such securities over a reasonable period of time. By its nature, a fair value price is a good faith estimate of the value of a security in a current sale and does not reflect an actual market price, which may be different by a material amount.


Accounting Standards Codification ASC 820 Fair Value Measurements and Disclosures (ASC 820) establishes a three-level hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of the fund’s investments. The three levels are defined as follows:

Level 1 – Valuations based on quoted prices for identical securities in active markets.

Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 – Valuations based on inputs that are unobservable and significant to the fair value measurement.

The following is a summary of the inputs used to value the fund’s net assets as of the close of the reporting period:

    Valuation inputs   
Investments in securities:  Level 1  Level 2  Level 3 
Municipal bonds and notes  $--  $287,392,401  $-- 
Totals by level  $--  $287,392,401  $-- 

 

For additional information regarding the fund please see the fund's most recent annual or semiannual shareholder report filed on the Securities and Exchange Commission's Web site, www.sec.gov, or visit Putnam's Individual Investor Web site at www.putnaminvestments.com

 


Item 2. Controls and Procedures:

(a) The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the effectiveness of the design and operation of the registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the design and operation of such procedures are generally effective to provide reasonable assurance that information required to be disclosed by the registrant in this report is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

(b) Changes in internal control over financial reporting: Not applicable

Item 3. Exhibits:

Separate certifications for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

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.

Putnam Massachusetts Tax Exempt Income Fund

By (Signature and Title):

/s/ Janet C. Smith
Janet C. Smith
Principal Accounting Officer
Date: April 28, 2011

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):

/s/ Jonathan S. Horwitz
Jonathan S. Horwitz
Principal Executive Officer
Date: April 28, 2011

By (Signature and Title):

/s/ Steven D. Krichmar
Steven D. Krichmar
Principal Financial Officer
Date: April 28, 2011