-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TXu8Kksgm59a1a/cOkdjVMCQTndn9CUr0GdWF+riDJUkZ5Bt+hYD0CtxYHx+5qpv CraJvmaK+wEaQi3BXviTEw== 0000950123-00-000649.txt : 20000203 0000950123-00-000649.hdr.sgml : 20000203 ACCESSION NUMBER: 0000950123-00-000649 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991130 FILED AS OF DATE: 20000201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST CENTRAL INDEX KEY: 0000842891 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133498050 STATE OF INCORPORATION: NY FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05688 FILM NUMBER: 518666 BUSINESS ADDRESS: STREET 1: TWO WORLD TRADE CENTER CITY: NEW YORK STATE: NY ZIP: 10048 BUSINESS PHONE: 2123922550 FORMER COMPANY: FORMER CONFORMED NAME: MUNICIPAL PREMIUM INCOME TRUST/MA DATE OF NAME CHANGE: 19930721 FORMER COMPANY: FORMER CONFORMED NAME: ALLSTATE MUNICIPAL PREIMIUM INCOME TRUST/MA DATE OF NAME CHANGE: 19930721 FORMER COMPANY: FORMER CONFORMED NAME: MUNICIPAL PREMIUM INCOME TRUST/ DATE OF NAME CHANGE: 19930721 N-30D 1 SEMI-ANNUAL REPORT 1 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST Two World Trade Center LETTER TO THE SHAREHOLDERS November 30, 1999 New York, New York 10048 DEAR SHAREHOLDER: The U.S. economy, led by consumer demand, has continued to experience robust growth this year. As a result, the fixed-income markets anticipated that the Federal Reserve Board would blunt the risk of inflation by taking back the liquidity it provided during last year's international economic crises. Between June and November 1999, the Fed changed monetary policy and, in three separate moves, raised the federal-funds rate a total of 75 basis points, to 5.50 percent. By the end of November, long-term interest rates had risen to levels last seen more than two years ago. MUNICIPAL MARKET CONDITIONS Long-term insured municipal index yields began 1999 near a record low of 5.00 percent. By the end of November, this index yield had increased 100 basis points, to 6.00 percent. Since the prices of bonds move inversely to changes in interest rates, higher yields have led to significantly lower bond prices. The increase in the index yield translated into a 13 percent price decline for a generic insured municipal bond with a 30-year maturity. The municipal market outperformed U.S. Treasury bonds early in the year but later gave ground. The ratio of long-term municipal yields to 30-year Treasury yields declined from 99 percent at the end of 1998 to 91 percent in May 1999 then reversed itself by rising to 95 percent by the end of November. A declining ratio means municipals have outperformed Treasuries, while a rising ratio indicates underperformance by municipals. Over the past five years the ratio has ranged from a high of 99 percent to a low of 82 percent. Higher interest rates slowed municipal underwriting in 1999. New-issue volume declined 20 percent in the first 11 months. Refunding activity, the most interest-rate-sensitive component of supply, dropped 50 percent. 2 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST LETTER TO THE SHAREHOLDERS November 30, 1999, continued 30-YEAR BOND YIELDS 1994-1999
INSURED MUNICIPAL YIELDS INSURED AS A PERCENTAGE OF MUNICIPAL YIELDS U.S. TREASURY YIELDS U.S. TREASURY YIELDS ---------------- -------------------- ----------------------- 1994 5.40 6.34 85.17 5.40 6.24 86.54 5.80 6.66 87.09 6.40 7.09 90.27 6.35 7.32 86.75 6.25 7.43 84.12 6.50 7.61 85.41 6.25 7.39 84.57 6.30 7.45 84.56 6.55 7.81 83.87 6.75 7.96 84.80 7.00 8.00 87.50 6.75 7.88 85.66 1995 6.40 7.70 83.12 6.15 7.44 82.66 6.15 7.43 82.77 6.20 7.34 84.47 5.80 6.66 87.09 6.10 6.62 92.15 6.10 6.86 88.92 6.00 6.66 90.09 5.95 6.48 91.82 5.75 6.33 90.84 5.50 6.14 89.58 5.35 5.94 90.07 1996 5.40 6.03 89.55 5.60 6.46 86.69 5.85 6.66 87.84 5.95 6.89 86.36 6.05 6.99 86.55 5.90 6.89 85.63 5.85 6.97 83.93 5.90 7.11 82.98 5.70 6.93 82.25 5.65 6.64 85.09 5.50 6.35 86.61 5.60 6.63 84.46 1997 5.70 6.79 83.95 5.65 6.80 83.09 5.90 7.10 83.10 5.75 6.94 82.85 5.65 6.91 81.77 5.60 6.78 82.60 5.30 6.30 84.13 5.50 6.61 83.21 5.40 6.40 84.38 5.35 6.15 86.99 5.30 6.05 87.60 5.15 5.92 86.99 1998 5.15 5.80 88.79 5.20 5.92 87.84 5.25 5.93 88.53 5.35 5.95 89.92 5.20 5.80 89.66 5.20 5.65 92.04 5.18 5.71 90.72 5.03 5.27 95.45 4.95 5.00 99.00 5.05 5.16 97.87 5.00 5.06 98.81 5.05 5.10 99.02 1999 5.00 5.09 98.23 5.10 5.58 91.40 5.15 5.63 91.47 5.20 5.66 91.87 5.30 5.83 90.91 5.47 5.96 91.78 5.55 6.10 90.98 5.75 6.06 94.88 5.85 6.05 96.69 6.03 6.16 97.90 6.00 6.29 95.39
PERFORMANCE In this rising interest rate environment, the net asset value (NAV) of Morgan Stanley Dean Witter Municipal Premium Income Trust (PIA) declined from $10.03 to $9.29 per share during the six-month period ended November 30, 1999. Based on this change plus reinvestment of tax-free dividends totaling $0.26 per share, the Fund's total NAV return was -4.29 percent. PIA's value on the New York Stock Exchange (NYSE) fell from $8.75 to $7.5625 per share during the same period. Based on this change plus reinvestment of dividends, PIA's total market return was -10.78 percent. On November 30, 1999, PIA's NYSE market price traded at an 18.60 percent discount to its NAV. Monthly dividends for the fourth quarter of 1999 were declared in September. Beginning with the October payment, the dividend per share was increased from $0.0425 to $0.045 per share. The new dividend rate reflects the Fund's estimated earnings over the next 6-12 months and its $0.117 per share cushion of undistributed net investment income on November 30, 1999. 2 3 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST LETTER TO THE SHAREHOLDERS November 30, 1999, continued PORTFOLIO STRUCTURE The Fund's investments were diversified among 13 long-term sectors and 79 credits. At the end of November, the portfolio's average maturity was 19 years. Average duration, a measure of sensitivity to interest-rate changes, was 7.6 years. The refunded bond category comprised 5 percent of net assets. Refunded issues have been refinanced and will be redeemed on the dates shown in the portfolio. The accompanying charts provide current information on the portfolio's credit quality, sector distribution and geographic diversification. Optional call provisions by year and their respective cost (book) yields are also charted. THE IMPACT OF LEVERAGING As discussed in previous reports, the total income available for distribution to common shareholders includes incremental income provided by the Fund's outstanding Auction Rate Preferred Shares (ARPS). ARPS dividends reflect prevailing short-term interest rates on maturities normally ranging from one week to one year. Incremental income to common shareholders depends on two factors. The first factor is the amount of ARPS outstanding, the second the spread between the portfolio's cost yield and ARPS expenses (ARPS auction rate and expenses). The greater the spread and the amount of ARPS outstanding, the greater the amount of incremental income available for distribution to common shareholders. The level of net investment income available for distribution to common shareholders varies with the level of short-term interest rates. ARPS leverage also increases the price volatility of common shares and has the effect of extending portfolio duration. During this 6-month period, ARPS leverage contributed approximately $0.01 per share to common share earnings. Weekly ARPS yields ranged between 3.00 and 3.95 percent. In comparison, the yield on one-year municipal notes increased from 3.20 percent in early June to 3.87 percent at the end of November 1999. The Fund's five ARPS series totaling $100 million represented 32 percent of net assets. LOOKING AHEAD The Federal Reserve Board raised interest rates twice in the summer and again in November 1999. These moves confirmed its previously disclosed bias of becoming less accommodative in the face of continued strong domestic economic growth. It is anticipated that the central bank may raise short-term interest rates further and influence the level of long-term rates. However, we believe municipal bonds continue to offer tax conscious investors good long-term value relative to Treasuries. 3 4 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST LETTER TO THE SHAREHOLDERS November 30, 1999, continued The Fund's procedure for reinvestment of all dividends and distributions on common shares is through purchases in the open market. This method helps support the market value of the Fund's shares. In addition, we would like to remind you that the Trustees have approved a procedure whereby the Fund may, when appropriate, purchase shares in the open market or in privately negotiated transactions at a price not above market value or net asset value, whichever is lower at the time of purchase. The Fund may also utilize procedures to reduce or eliminate the amount of outstanding ARPS, including their purchase in the open market or in privately negotiated transactions. During the six-month period ended November 30, 1999, the Fund purchased and retired 710,600 shares of common stock at a weighted average market discount of 14.16 percent. We appreciate your ongoing support of Morgan Stanley Dean Witter Municipal Premium Income Trust and look forward to continuing to serve your investment needs. Very truly yours, /s/ CHARLES A. FIUMEFREDDO /s/ MITCHELL M. MERIN CHARLES A. FIUMEFREDDO MITCHELL M. MERIN Chairman of the Board President
4 5 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST LETTER TO THE SHAREHOLDERS November 30, 1999, continued LARGEST SECTORS AS OF NOVEMBER 30, 1999 (% OF NET ASSETS) [LARGEST SECTORS BAR CHART]
HOSPITAL 15.00 ELECTRIC 15.00 TRANSPORTATION 13.00 IDR/PCR* 13.00 GENERAL OBLIGATION 9.00 WATER & SEWER 8.00 MORTGAGE 7.00 REFUNDED 5.00 EDUCATION 4.00
* Industrial Development/Pollution Control Revenue Portfolio structure is subject to change. CREDIT RATINGS AS OF NOVEMBER 30, 1999 (% OF TOTAL LONG-TERM PORTFOLIO) [CREDIT RATINGS PIE CHART]
Aaa OR AAA Aa OR AA A OR A Baa OR BBB NR 65.00 21.00 3.00 9.00 2.00
AS MEASURED BY MOODY'S INVESTORS SERVICE, INC. OR STANDARD & POOR'S CORP. PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE. GEOGRAPHIC SUMMARY OF INVESTMENTS BASED ON MARKET VALUE AS A PERCENT OF NET ASSETS NOVEMBER 30, 1999 ALABAMA.................. 3.3% ARIZONA.................. 3.6 CALIFORNIA............... 7.1 COLORADO................. 2.0 GEORGIA.................. 4.5 HAWAII................... 1.0 ILLINOIS................. 6.7 KANSAS................... 4.7 LOUISIANA................ 0.8 MASSACHUSETTS............ 7.2 MICHIGAN................. 3.7% MINNESOTA................ 1.9 MISSISSIPPI.............. 0.1 MISSOURI................. 4.0 NEW JERSEY............... 2.7 NEW MEXICO............... 1.2 NEW YORK................. 8.2 NORTH CAROLINA........... 1.0 OHIO..................... 4.2 PENNSYLVANIA............. 1.0 PUERTO RICO.............. 0.8% RHODE ISLAND............. 0.1 SOUTH CAROLINA........... 3.5 TENNESSEE................ 1.5 TEXAS.................... 14.1 UTAH..................... 2.2 VIRGINIA................. 2.6 WASHINGTON............... 3.3 WISCONSIN................ 1.4 ------ TOTAL.................... 98.4% ======
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE. 5 6 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST LETTER TO THE SHAREHOLDERS November 30, 1999, continued CALL AND COST (BOOK) YIELD STRUCTURE NOVEMBER 30, 1999 [PERCENT CALLABLE BAR GRAPH]
Weighted Average Call Protection: 6 Years YEARS BOND CALLABLE PERCENT CALLABLE* ----------------- 2000 11.00 2001 4.00 2002 10.00 2003 0.00 2004 10.00 2005 11.00 2006 12.00 2007 4.00 2008 25.00 2009 6.00 2010+ 7.00
[COST (BOOK) YIELD GRAPH]
Weighted Average Book Yield: 6.01% COST (BOOK) YIELD ** -------------------- 2000 7.48 2001 7.10 2002 6.20 2003 0.00 2004 6.47 2005 6.04 2006 5.37 2007 6.05 2008 5.36 2009 5.46 2010+ 5.89
* % Based on Long-Term Portfolio. ** Cost or "book" yield is the annual income earned on a portfolio investment based on its original purchase price before Fund operating expenses. For example, the fund earned a book yield of 7.5% on 11% of the long-term portfolio that are callable in 2000. Portfolio structure is subject to change. 6 7 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST PORTFOLIO OF INVESTMENTS November 30, 1999 (unaudited)
PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE - ----------------------------------------------------------------------------------------------------------- TAX-EXEMPT MUNICIPAL BONDS (94.7%) General Obligation (9.4%) $ 2,000 California, Dtd 10/01/98 Refg (MBIA)........................ 4.50% 10/01/28 $ 1,588,460 5,000 Los Angeles Unified School District, California, 1997 Ser B (FGIC)..................................................... 5.00 07/01/23 4,413,200 3,000 Hawaii, 1999 Ser CT (FSA)................................... 5.875 09/01/17 3,006,000 3,500 Massachusetts, 1995 Ser A (AMBAC)........................... 5.00 07/01/12 3,413,690 2,000 Berkley School District, Michigan, Refg Ser 1999 (FGIC)..... 4.75 01/01/19 1,714,000 2,000 Michigan Municipal Bond Authority, School Ser 1998.......... 5.25 12/01/13 1,953,520 3,000 Barberton City School District, Ohio, Ser 1998 (FGIC)....... 5.125 11/01/22 2,696,880 1,300 Puerto Rico, Public Improvement Ser 1998 (MBIA)............. 4.875 07/01/23 1,129,908 3,500 Shelby County, Tennessee, Refg 1995 Ser A................... 5.625 04/01/11 3,571,575 6,000 Washington, Ser 1993 A...................................... 5.75 10/01/17 5,966,400 - -------- ----------- 31,300 29,453,633 - -------- ----------- Educational Facilities Revenue (3.9%) 5,500 Oakland University, Michigan, Ser 1995 (MBIA)............... 5.75 05/15/26 5,325,704 New York State Dormitory Authority, 4,000 State University Refg Ser 1993 A........................... 5.50 05/15/08 4,062,040 1,350 State University Refg Ser 1990 B........................... 7.50 05/15/11 1,546,898 1,250 Ohio State University, General Receipts, Ser 1999 A (WI).... 5.75 12/01/24 1,220,863 - -------- ----------- 12,100 12,155,505 - -------- ----------- Electric Revenue (14.7%) 3,000 Los Angeles Department of Water & Power, California, Issue of 1992.................................................... 6.375 02/01/20 3,112,350 5,000 Sacramento Municipal Utility District, California, Refg 1994 Ser I (MBIA)............................................... 6.00 01/01/24 5,030,000 2,950 Kansas City, Kansas, Utility Refg & Impr Ser 1994 (FGIC).... 6.375 09/01/23 3,017,408 7,750 South Carolina Public Service Authority, 1995 Refg Ser A (AMBAC).................................................... 6.25 01/01/22 7,823,780 4,000 Lower Colorado River Authority, Texas, Jr Lien Seventh Ser (FSA)...................................................... 4.75 01/01/28 3,350,880 17,000 San Antonio, Texas, Electric & Gas Refg Ser 1994 C.......... 4.70 02/01/06 16,837,649 Intermountain Power Agency, Utah, 2,000 Refg 1999 Ser A (MBIA)..................................... 5.25 07/01/15 1,903,780 5,000 Refg 1997 Ser B (MBIA)**................................... 5.75 07/01/19 4,890,600 - -------- ----------- 46,700 45,966,447 - -------- ----------- Hospital Revenue (15.4%) 5,000 Birmingham-Carraway Special Care Facilities Financing Authority, Alabama, Carraway Methodist Health Ser 1995 A (Connie Lee)**............................................. 5.875 08/15/15 4,981,750 3,500 Colbert County - Northwest Health Care Authority, Alabama, Hellen Keller Hospital Refg Ser 1990....................... 8.75 06/01/09 3,642,135 2,000 Montgomery Special Care Facilities Financing Authority, Alabama, Baptist Health Ser 1998 B (MBIA).................. 5.00 11/15/29 1,679,720 3,000 Hall County & Gainesville Hospital Authority, Georgia, Northeast Georgia Healthcare Ser 1995 (MBIA)............... 6.00 10/01/20 2,989,110 9,500 Boston, Massachusetts, Boston City Hospital - FHA Mtg Refg Ser B...................................................... 5.75 02/15/13 9,506,079
SEE NOTES TO FINANCIAL STATEMENTS 7 8 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST PORTFOLIO OF INVESTMENTS November 30, 1999 (unaudited) continued
PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE - ----------------------------------------------------------------------------------------------------------- $ 5,000 New Jersey Health Care Authority, St Barnabas Medical Center Ser 1998 B (MBIA).......................................... 4.75% 07/01/28 $ 4,144,400 4,000 North Carolina Medical Care Commission, Duke University Health Ser 1998 A.......................................... 4.75 06/01/28 3,225,480 4,000 Montgomery County, Ohio, Franciscan Medical Center - Dayton Ser 1997................................................... 5.50 07/01/18 3,489,960 2,985 Lehigh County General Purpose Authority, Pennsylvania, St Lukes Hospital Ser 1992 (AMBAC)............................ 6.25 07/01/22 3,011,955 2,750 Jefferson County Health Facilities Development Corporation, Texas, Baptist Health Ser 1989.................................... 8.30 10/01/14 2,786,960 5,000 Washington Health Care Facilities Authority, Swedish Health Ser 1998 (AMBAC)........................................... 5.125 11/15/22 4,351,800 5,000 Wisconsin Health & Educational Facilities Authority, Wausau Hospital Refg Ser 1998 A (AMBAC)........................... 5.125 08/15/20 4,393,300 - -------- ----------- 51,735 48,202,649 - -------- ----------- Industrial Development/Pollution Control Revenue (12.6%) 10,360 Pima County Industrial Development Authority, Arizona, Tucson Electric Power Co Refg Ser 1988 A (FSA)............................. 7.25 07/15/10 11,124,568 10,000 Burlington, Kansas, Kansas Gas & Electric Co Ser 1991 (MBIA)**................................................... 7.00 06/01/31 10,513,300 8,000 New York City Industrial Development Agency, New York, Brooklyn Navy Yard Cogeneration Partners LP Ser 1997 (AMT)...................................................... 5.65 10/01/28 7,233,520 10,000 Alliance Airport Authority, Texas, AMR Corp Ser 1990 (AMT)...................................................... 7.50 12/01/29 10,405,400 - -------- ----------- 38,360 39,276,788 - -------- ----------- Mortgage Revenue - Multi-Family (2.9%) 1,250 Lake Charles Non-Profit Housing Development Corporation, Louisiana, Ser 1990 A (FSA)........................................... 7.875 02/15/25 1,251,263 Massachusetts Housing Finance Agency, 1,790 Rental 1994 Ser A (AMT) (AMBAC)............................ 6.60 07/01/14 1,860,419 3,460 Rental 1994 Ser A (AMT) (AMBAC)............................ 6.65 07/01/19 3,576,843 2,420 Minnesota Housing Finance Agency, Rental 1995 Ser D (MBIA)..................................................... 6.00 02/01/22 2,396,357 - -------- ----------- 8,920 9,084,882 - -------- ----------- Mortgage Revenue - Single Family (4.4%) Colorado Housing & Finance Authority, 150 Ser 1990 B-2............................................... 8.00 02/01/18 152,855 2,500 Ser 1997 A-2 (AMT)......................................... 7.25 05/01/27 2,684,824 135 Idaho Housing Agency, 1988 Ser D-2 (AMT).................... 8.25 01/01/20 137,977 685 Kansas City Leavenworth & Lenexa, Kansas, GNMA-Backed Ser 1998 C (AMT)............................................... 8.00 11/01/20 704,824 Olathe, Kansas, 75 GNMA Collateralized Ser 1990 B............................. 7.50 09/01/10 77,474 230 GNMA Collateralized Ser 1989 A (AMT) (MBIA)................ 8.00 11/01/20 234,798 1,170 New Orleans Home Mortgage Authority, Louisiana, GNMA Collateralized 1989 Ser B-1 (AMT)......................................... 8.25 12/01/21 1,188,919 420 Mississippi Housing Finance Corporation, GNMA-Backed Ser 1989 (AMT) (FGIC).......................................... 8.25 10/15/18 428,954 2,535 Missouri Housing Development Commission, Homeownership 1996 Ser D (AMT)................................................ 7.10 09/01/27 2,647,478
SEE NOTES TO FINANCIAL STATEMENTS 8 9 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST PORTFOLIO OF INVESTMENTS November 30, 1999 (unaudited) continued
PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE - ----------------------------------------------------------------------------------------------------------- $ 45 Muskogee County Home Finance Authority, Oklahoma, 1990 Ser A (FGIC)..................................................... 7.60% 12/01/10 $ 46,066 200 Rhode Island Housing & Mortgage Finance Corporation, Homeownership 1988 Ser 1-D (AMT)......................................... 7.875 10/01/22 204,190 South Carolina Housing Finance & Development Authority, 1,955 Homeownership 1998 Ser C-1 (AMT)........................... 8.125 07/01/21 1,988,900 1,220 Homeownership 1991 Ser A (AMT)............................. 7.40 07/01/23 1,251,000 Utah Housing Finance Agency, 60 Ser 1991 B-1............................................... 7.50 07/01/16 61,682 45 Ser 1989 B (AMT)........................................... 8.25 07/01/21 45,320 2,000 Virginia Housing Development Authority, 1992 Ser A.......... 7.10 01/01/25 2,043,380 - -------- ----------- 13,425 13,898,641 - -------- ----------- Nursing & Health Related Facilities Revenue (0.6%) New York State Medical Care Facilities Finance Agency, 825 Mental Health Ser 1987..................................... 8.875 08/15/07 828,003 565 Mental Health Ser 1990 A (Secondary MBIA).................. 7.75 02/15/20 580,069 405 Mental Health Ser 1991 A................................... 7.50 02/15/21 425,756 - -------- ----------- 1,795 1,833,828 - -------- ----------- Public Facilities Revenue (1.8%) 2,000 Metropolitan Pier & Exposition Authority, Illinois, McCormick Place Refg Ser 1998 A (FGIC)..................................... 5.50 06/15/18 1,941,160 Saint Paul Independent School District #625, Minnesota, 1,700 Ser 1995 C COPs............................................ 5.45 02/01/11 1,714,008 1,800 Ser 1995 C COPs............................................ 5.50 02/01/12 1,815,948 - -------- ----------- 5,500 5,471,116 - -------- ----------- Transportation Facilities Revenue (12.9%) 3,000 Alameda Corridor Transportation Authority, California, Sr Lien Ser 1999 A (MBIA)..................................... 5.25 10/01/21 2,765,550 3,500 Atlanta, Georgia, Airport Ser 1994 B (AMT) (AMBAC).......... 6.00 01/01/21 3,470,845 Chicago, Illinois, 5,000 Chicago-O'Hare International Airport Ser 1996 A (AMBAC).... 5.625 01/01/12 5,053,100 7,000 Midway Airport 1994 Ser A (AMT) (MBIA)..................... 6.25 01/01/24 7,027,580 5,000 New Jersey Transportation Trust Authority, 1998 Ser A (FSA)...................................................... 4.50 06/15/19 4,148,650 2,500 New York State Thruway Authority, Local Highway & Bridge Ser 1998 A (MBIA).............................................. 5.00 04/01/18 2,242,000 1,700 Puerto Rico Highway & Transportation Authority, Ser 1998 A.......................................................... 4.75 07/01/38 1,346,179 8,000 Austin, Texas, Airport Prior Lien Ser 1995 A (AMT) (MBIA)... 6.125 11/15/25 7,973,920 5,000 Pocahontas Parkway Association, Virginia, Route 895 Connector Ser 1998 A....................................... 5.50 08/15/28 4,278,300 2,000 Richmond Metropolitan Authority, Virginia, Expressway & Refg Ser 1998 (FGIC)............................................ 5.25 07/15/17 1,894,220 - -------- ----------- 42,700 40,200,344 - -------- -----------
SEE NOTES TO FINANCIAL STATEMENTS 9 10 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST PORTFOLIO OF INVESTMENTS November 30, 1999 (unaudited) continued
PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE - ----------------------------------------------------------------------------------------------------------- Water & Sewer Revenue (7.6%) $ 2,500 Coachella, California, Ser 1992 COPs (FSA).................. 6.10% 03/01/22 $ 2,519,225 3,000 Eastern Municipal Water District, California, Water & Sewer Refg Ser 1998 A COPs (FGIC)................................ 4.75 07/01/23 2,526,510 3,000 Atlanta, Georgia, Water & Wastewater Ser 1999 A (FGIC)...... 5.50 11/01/06 2,886,510 5,000 Rockdale County Water & Sewage Authority, Georgia, Ser 1999 A (MBIA)................................................... 5.50 07/01/25 4,699,700 5,000 Massachusetts Water Resources Authority, 1998 Ser A (FSA)... 4.75 08/01/27 4,101,150 3,000 Detroit, Michigan, Water Supply 1997 Ser A (MBIA)........... 5.00 07/01/21 2,649,330 5,000 Cleveland, Ohio, Waterworks Impr & Refg 1998 Ser I (FSA).... 5.00 01/01/23 4,401,950 - -------- ----------- 26,500 23,784,375 - -------- ----------- Other Revenue (3.2%) 10,000 New York Local Government Assistance Corporation, Refg Ser 1997 B (MBIA).............................................. 5.00 04/01/21 8,815,600 1,450 Cuyahoga County, Ohio, The Medical Center Co Ser 1998 (AMBAC).................................................... 5.125 02/15/28 1,265,212 - -------- ----------- 11,450 10,080,812 - -------- ----------- Refunded (5.3%) 5,000 Regional Transportation Authority, Illinois, Ser 1994 A (AMBAC).................................................... 6.25 06/01/04+ 5,407,200 1,800 Southwestern Illinois Development Authority, Anderson Hospital Ser 1992 A........................................ 7.00 08/15/02+ 1,937,610 1,340 Missouri Health & Educational Facilities Authority, Missouri Baptist Medical Center Refg Ser 1989 (ETM)................. 7.625 07/01/18 1,370,820 3,600 Rio Rancho, New Mexico, Water & Wastewater Ser 1995 A (FSA)...................................................... 6.00 05/15/06+ 3,833,280 1,000 Shelby County, Tennessee, Refg 1995 Ser A................... 5.625 04/01/05+ 1,049,010 3,000 San Antonio, Texas, Electric & Gas Refg Ser 1994 C (ETM).... 4.70 02/01/06 2,941,680 - -------- ----------- 15,740 16,539,600 - -------- ----------- 306,225 TOTAL TAX-EXEMPT MUNICIPAL BONDS (Identified Cost $299,758,957)................. 295,948,620 - -------- ----------- SHORT-TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS (3.7%) 8,500 Missouri Health & Education Facilities Authority, Cox Health Ser 1997 (Demand 12/01/99)................................. 3.75* 06/01/15 8,500,000 3,200 Harris County Health Facilities Development Corporation, Texas, St Luke's Episcopal Hospital Ser 1997 A (Demand 12/01/99)............ 3.70* 02/15/27 3,200,000 - -------- ----------- 11,700 TOTAL SHORT-TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS (Identified Cost $11,700,000)................................................................... 11,700,000 - -------- ----------- $317,925 TOTAL INVESTMENTS (Identified Cost $311,458,957) (a).......... 98.4% 307,648,620 ======== CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES................. 1.6 4,879,989 ----- ------------ NET ASSETS.................................................... 100.0% $312,528,609 ----- ============ -----
SEE NOTES TO FINANCIAL STATEMENTS 10 11 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST PORTFOLIO OF INVESTMENTS November 30, 1999 (unaudited) continued - --------------------- AMT Alternative Minimum Tax. COPs Certificates of Participation. ETM Escrowed to maturity. WI Security purchased on a "when-issued" basis. + Prerefunded to call date shown. * Current coupon of variable rate demand obligation. ** This security is segregated in connection with the purchase of "when-issued" securities. (a) The aggregate cost for federal income tax purposes approximates identified cost. The aggregate gross unrealized appreciation is $6,549,277 and the aggregate gross unrealized depreciation is $10,359,614, resulting in net unrealized depreciation of $3,810,337. Bond Insurance: - ------------------------------------------------------------------------ AMBAC AMBAC Assurance Corporation. Connie Lee Connie Lee Insurance Company -- a wholly owned subsidiary of AMBAC Assurance Corporation. FGIC Financial Guaranty Insurance Company. FSA Financial Security Assurance Inc. MBIA Municipal Bond Investors Assurance Corporation.
SEE NOTES TO FINANCIAL STATEMENTS 11 12 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES November 30, 1999 (unaudited) ASSETS: Investments in securities, at value (identified cost $311,458,957)............................. $307,648,620 Cash........................................................ 30,426 Receivable for: Interest................................................ 5,792,298 Investments sold........................................ 663,218 Prepaid expenses and other assets........................... 237,632 ----------- TOTAL ASSETS............................................ 314,372,194 ----------- LIABILITIES: Payable for: Investments purchased................................... 1,230,450 Dividends to preferred shareholders..................... 208,830 Shares of beneficial interest repurchased............... 123,499 Investment advisory fee................................. 110,280 Administration fee...................................... 68,925 Accrued expenses and other payables......................... 101,601 ----------- TOTAL LIABILITIES....................................... 1,843,585 ----------- NET ASSETS.............................................. $312,528,609 =========== COMPOSITION OF NET ASSETS: Preferred shares of beneficial interest (1,000,000 shares authorized of non-participating $.01 par value, 1,000 shares outstanding)........................................ $100,000,000 ----------- Common shares of beneficial interest (unlimited shares authorized of $.01 par value, 22,874,424 shares outstanding)............................................... 213,280,614 Net unrealized depreciation................................. (3,810,337) Accumulated undistributed net investment income............. 2,673,137 Accumulated undistributed net realized gain................. 385,195 ----------- NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS............ 212,528,609 ----------- TOTAL NET ASSETS........................................ $312,528,609 =========== NET ASSET VALUE PER COMMON SHARE ($212,528,609 divided by 22,874,424 common shares outstanding)............................................... $9.29 ============
SEE NOTES TO FINANCIAL STATEMENTS 12 13 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST FINANCIAL STATEMENTS, continued STATEMENT OF OPERATIONS For the six months ended November 30, 1999 (unaudited) NET INVESTMENT INCOME: INTEREST INCOME............................................. $ 9,334,133 ------------ EXPENSES Investment advisory fee..................................... 647,291 Administration fee.......................................... 404,557 Auction commission fees..................................... 163,172 Transfer agent fees and expenses............................ 43,280 Professional fees........................................... 31,668 Shareholder reports and notices............................. 22,474 Auction agent fees.......................................... 17,129 Registration fees........................................... 9,692 Custodian fees.............................................. 8,853 Trustees' fees and expenses................................. 7,749 Other....................................................... 14,776 ------------ TOTAL EXPENSES.......................................... 1,370,641 Less: expense offset........................................ (8,787) ------------ NET EXPENSES............................................ 1,361,854 ------------ NET INVESTMENT INCOME................................... 7,972,279 ------------ NET REALIZED AND UNREALIZED LOSS: Net realized loss........................................... (1,238,630) Net change in unrealized appreciation....................... (17,098,278) ------------ NET LOSS................................................ (18,336,908) ------------ NET DECREASE................................................ $(10,364,629) ============
SEE NOTES TO FINANCIAL STATEMENTS 13 14 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS FOR THE SIX FOR THE YEAR MONTHS ENDED ENDED NOVEMBER 30, 1999 MAY 31, 1999 - --------------------------------------------------------------------------------------- (unaudited) INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income................................ $ 7,972,279 $ 16,784,754 Net realized gain (loss)............................. (1,238,630) 2,192,129 Net change in unrealized appreciation................ (17,098,278) (6,180,178) ------------ ------------ NET INCREASE (DECREASE).......................... (10,364,629) 12,796,705 ------------ ------------ Dividends to preferred shareholders from net investment income................................... (1,757,528) (3,464,520) ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM: Net investment income................................ (6,054,519) (13,010,308) Net realized gain.................................... -- (6,255,848) ------------ ------------ TOTAL............................................ (6,054,519) (19,266,156) ------------ ------------ Decrease from transactions in common shares of beneficial interest................................. (5,790,481) (7,962,618) ------------ ------------ NET DECREASE..................................... (23,967,157) (17,896,589) NET ASSETS: Beginning of period.................................. 336,495,766 354,392,355 ------------ ------------ END OF PERIOD (Including undistributed net investment income of $2,673,137 and $2,512,905, respectively)......... $312,528,609 $336,495,766 ============ ============
SEE NOTES TO FINANCIAL STATEMENTS 14 15 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST NOTES TO FINANCIAL STATEMENTS November 30, 1999 (unaudited) 1. ORGANIZATION AND ACCOUNTING POLICIES Morgan Stanley Dean Witter Municipal Premium Income Trust (the "Fund") is registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end management investment company. The Fund's investment objective is to provide a high level of current income exempt from federal income tax. The Fund was organized as a Massachusetts business trust on November 16, 1988 and commenced operations on February 1, 1989. The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of significant accounting policies: A. VALUATION OF INVESTMENTS -- Portfolio securities are valued by an outside independent pricing service approved by the Trustees. The pricing service has informed the Fund that in valuing the portfolio securities, it uses both a computerized matrix of tax-exempt securities and evaluations by its staff, in each case based on information concerning market transactions and quotations from dealers which reflect the bid side of the market each day. The portfolio securities are thus valued by reference to a combination of transactions and quotations for the same or other securities believed to be comparable in quality, coupon, maturity, type of issue, call provisions, trading characteristics and other features deemed to be relevant. Short-term debt securities having a maturity date of more than sixty days at time of purchase are valued on a mark-to-market basis until sixty days prior to maturity and thereafter at amortized cost based on their value on the 61st day. Short-term debt securities having a maturity date of sixty days or less at the time of purchase are valued at amortized cost. B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on security transactions are determined by the identified cost method. Discounts are accreted and premiums are amortized over the life of the respective securities. Interest income is accrued daily. C. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable and nontaxable income to its shareholders. Accordingly, no federal income tax provision is required. D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and distributions to its shareholders on the ex-dividend date. The amount of dividends and distributions from net investment 15 16 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST NOTES TO FINANCIAL STATEMENTS November 30, 1999 (unaudited) continued income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification. Dividends and distributions which exceed net investment income and net realized capital gains for financial reporting purposes but not for tax purposes are reported as dividends in excess of net investment income or distributions in excess of net realized capital gains. To the extent they exceed net investment income and net realized capital gains for tax purposes, they are reported as distributions of paid-in-capital. 2. INVESTMENT ADVISORY AGREEMENT Pursuant to an Investment Advisory Agreement with Morgan Stanley Dean Witter Advisors Inc. (the "Investment Advisor"), an affiliate of Morgan Stanley Dean Witter Services Company Inc. (the "Administrator"), the Fund pays the Investment Advisor an advisory fee, calculated weekly and payable monthly, by applying the annual rate of 0.40% to the Fund's weekly net assets. Under the terms of the Agreement, in addition to managing the Fund's investments, the Investment Advisor pays the salaries of all personnel, including officers of the Fund, who are employees of the Investment Advisor. 3. ADMINISTRATION AGREEMENT Pursuant to an Administration Agreement with the Administrator, the Fund pays an administration fee, calculated weekly and payable monthly, by applying the annual rate of 0.25% to the Fund's weekly net assets. Under the terms of the Administration Agreement, the Administrator maintains certain of the Fund's books and records and furnishes, at its own expense, office space, facilities, equipment, clerical, bookkeeping and certain legal services and pays the salaries of all personnel, including officers of the Fund who are employees of the Administrator. The Administrator also bears the cost of telephone services, heat, light, power and other utilities provided to the Fund. 16 17 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST NOTES TO FINANCIAL STATEMENTS November 30, 1999 (unaudited) continued 4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES The cost of purchases and proceeds from sales of portfolio securities, excluding short-term investments, for the six months ended November 30, 1999 aggregated $22,763,030 and $34,261,251, respectively. Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Advisor and Administrator, is the Fund's transfer agent. The Fund has an unfunded noncontributory defined benefit pension plan covering all independent Trustees of the Fund who will have served as independent Trustees for at least five years at the time of retirement. Benefits under this plan are based on years of service and compensation during the last five years of service. Aggregate pension costs for the six months ended November 30, 1999 included in Trustees' fees and expenses in the Statement of Operations amounted to $2,987. At November 30, 1999, the Fund had an accrued pension liability of $52,109 which is included in accrued expenses in the Statement of Assets and Liabilities. 5. COMMON SHARES OF BENEFICIAL INTEREST Transactions in shares of beneficial interest were as follows:
CAPITAL PAID IN PAR VALUE EXCESS OF SHARES OF SHARES PAR VALUE ---------- --------- ------------ Balance, May 31, 1998....................................... 24,433,224 $244,332 $226,789,381 Treasury shares purchased and retired (weighted average discount 9.68%)*........................................... (848,200) (8,482) (7,954,136) ---------- -------- ------------ Balance, May 31, 1999....................................... 23,585,024 235,850 218,835,245 Treasury shares purchased and retired (weighted average discount 14.16%)*.......................................... (710,600) (7,106) (5,783,375) ---------- -------- ------------ Balance, November 30, 1999.................................. 22,874,424 $228,744 $213,051,870 ========== ======== ============
- --------------------- * The Trustees have voted to retire the shares purchased. 6. PREFERRED SHARES OF BENEFICIAL INTEREST The Fund is authorized to issue up to 1,000,000 non-participating preferred shares of beneficial interest having a par value of $.01 per share, in one or more series, with rights as determined by the Trustees, without the approval of the common shareholders. The Fund has issued Series A through E Auction 17 18 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST NOTES TO FINANCIAL STATEMENTS November 30, 1999 (unaudited) continued Rate Preferred Shares ("Preferred Shares") which have a liquidation value of $100,000 per share plus the redemption premium, if any, plus accumulated but unpaid dividends, whether or not declared, thereon to the date of distribution. The Fund may redeem such shares, in whole or in part, at the original purchase price of $100,000 per share plus accumulated but unpaid dividends, whether or not declared, thereon to the date of redemption. Dividends, which are cumulative, are reset through auction procedures.
AMOUNT IN NEXT RANGE OF SERIES SHARES* THOUSANDS* RATE* RESET DATE DIVIDEND RATES** - ------ ------- ---------- ----- ---------- ---------------- A 200 $20,000 3.75% 12/07/99 3.10% - 3.95% B 200 20,000 3.65 12/07/99 3.00 - 3.80 C 200 20,000 3.85 08/29/00 3.49 - 3.85 D 200 20,000 3.35 01/11/00 3.35 E 200 20,000 3.65 07/03/00 3.55 - 3.65
- --------------------- * As of November 30, 1999. ** For the six months ended November 30, 1999.
Subsequent to November 30, 1999 and up through January 7, 2000, the Fund paid dividends to each of the Series A through E at rates ranging from 3.65% to 5.50% in the aggregate amount of $306,108. The Fund is subject to certain restrictions relating to the preferred shares. Failure to comply with these restrictions could preclude the Fund from declaring any distributions to common shareholders or purchasing common shares and/or could trigger the mandatory redemption of preferred shares at liquidation value. The preferred shares, which are entitled to one vote per share, generally vote with the common shares but vote separately as a class to elect two Trustees and on any matters affecting the rights of the preferred shares. 7. DIVIDENDS TO COMMON SHAREHOLDERS The Fund declared the following dividends from net investment income:
DECLARATION AMOUNT RECORD PAYABLE DATE PER SHARE DATE DATE - ------------------ --------- ------------------ ------------------ September 29, 1999 $0.045 December 3, 1999 December 17, 1999 December 28, 1999 $0.045 January 7, 2000 January 21, 2000 December 28, 1999 $0.045 February 4, 2000 February 18, 2000 December 28, 1999 $0.045 March 3, 2000 March 17, 2000
18 19 MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST FINANCIAL HIGHLIGHTS Selected ratios and per share data for a common share of beneficial interest outstanding throughout each period:
FOR THE SIX FOR THE YEAR ENDED MAY 31* MONTHS ENDED ---------------------------------------------------- NOVEMBER 30, 1999 1999 1998 1997 1996 1995 - --------------------------------------------------------------------------------------------------------------------------------- (unaudited) SELECTED PER SHARE DATA: Net asset value, beginning of period............... $10.03 $10.41 $10.08 $10.02 $10.36 $10.24 ------ ------ ------ ------ ------ ------ Income from investment operations: Net investment income............................. 0.35 0.70 0.75 0.78 0.79 0.84 Net realized and unrealized gain (loss)........... (0.79) (0.18) 0.33 0.19 (0.22) 0.26 ------ ------ ------ ------ ------ ------ Total income (loss) from investment operations..... (0.44) 0.52 1.08 0.97 0.57 1.10 ------ ------ ------ ------ ------ ------ Less dividends and distributions from: Net investment income............................. (0.26) (0.54) (0.60) (0.60) (0.65) (0.72) Common share equivalent of dividends paid to preferred shareholders.......................... (0.08) (0.14) (0.15) (0.14) (0.15) (0.16) Net realized gain................................. -- (0.26) -- (0.20) (0.12) (0.10) ------ ------ ------ ------ ------ ------ Total dividends and distributions.................. (0.34) (0.94) (0.75) (0.94) (0.92) (0.98) ------ ------ ------ ------ ------ ------ Anti-dilutive effect of acquiring treasury shares............................................ 0.04 0.04 -- 0.03 0.01 -- ------ ------ ------ ------ ------ ------ Net asset value, end of period..................... $ 9.29 $10.03 $10.41 $10.08 $10.02 $10.36 ====== ====== ====== ====== ====== ====== Market value, end of period........................ $7.563 $ 8.75 $9.625 $9.375 $ 9.00 $9.688 ====== ====== ====== ====== ====== ====== TOTAL RETURN+...................................... (10.78)%(1) (1.21)% 9.08% 13.52% 0.67% 8.15% RATIOS TO AVERAGE NET ASSETS OF COMMON SHAREHOLDERS: Expenses........................................... 1.23%(2)(3) 1.19%(3) 1.18%(3) 1.14%(3) 1.16%(3) 1.21% Net investment income before preferred stock dividends......................................... 7.15%(2) 6.73% 7.31% 7.70% 7.68% 8.37% Preferred stock dividends.......................... 1.58%(2) 1.39% 1.46% 1.41% 1.44% 1.55% Net investment income available to common shareholders...................................... 5.57%(2) 5.34% 5.85% 6.29% 6.24% 6.82% SUPPLEMENTAL DATA: Net assets, end of period, in thousands............ $312,529 $336,496 $354,392 $349,294 $355,587 $368,225 Asset coverage on preferred shares at end of period............................................ 312% 336% 354% 349% 355% 368% Portfolio turnover rate............................ 7%(1) 17% 21% 5% 14% 16%
- --------------------- * The per share amounts were computed using an average number of shares outstanding during the period. + Total return is based upon the current market value on the last day of each period reported. Dividends and distributions are assumed to be reinvested at the prices obtained under the Fund's dividend reinvestment plan. Total return does not reflect brokerage commissions. (1) Not annualized. (2) Annualized. (3) Does not reflect the effect of expense offset of 0.01%. SEE NOTES TO FINANCIAL STATEMENTS 19 20 TRUSTEES - ---------------------------------- Michael Bozic Charles A. Fiumefreddo Edwin J. Garn Wayne E. Hedien Dr. Manuel H. Johnson Michael E. Nugent Philip J. Purcell John L. Schroeder OFFICERS - ---------------------------------- Charles A. Fiumefreddo Chairman and Chief Executive Officer Mitchell M. Merin President Barry Fink Vice President, Secretary and General Counsel James F. Willison Vice President Thomas F. Caloia Treasurer TRANSFER AGENT - ---------------------------------- Morgan Stanley Dean Witter Trust FSB Harborside Financial Center -- Plaza Two Jersey City, New Jersey 07311 INDEPENDENT ACCOUNTANTS - ---------------------------------- PricewaterhouseCoopers LLP 1177 Avenue of the Americas New York, New York 10036 INVESTMENT ADVISOR - ---------------------------------- Morgan Stanley Dean Witter Advisors Inc. Two World Trade Center New York, New York 10048 The financial statements included herein have been taken from the records of the Fund without examination by the independent accountants and accordingly they do not express an opinion thereon. MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST Semiannual Report November 30, 1999 -----END PRIVACY-ENHANCED MESSAGE-----