-----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, FZp4Q2aN6Gt9MsQEV6L/7xJJPNtpGjciVBSM2bhNn1JV4EhdFkj9vMf647DSQoS0 6Qh+SIw9O+oUG75NSE/AUA== 0000950123-04-001260.txt : 20040205 0000950123-04-001260.hdr.sgml : 20040205 20040205123310 ACCESSION NUMBER: 0000950123-04-001260 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031130 FILED AS OF DATE: 20040205 EFFECTIVENESS DATE: 20040205 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN STANLEY MUNICIPAL PREMIUM INCOME TRUST CENTRAL INDEX KEY: 0000842891 IRS NUMBER: 133498050 STATE OF INCORPORATION: NY FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-05688 FILM NUMBER: 04569259 BUSINESS ADDRESS: STREET 1: C/O MORGAN STANLEY TRUST STREET 2: HARBOSIDE FINANCIAL CENTER, PLAZA TWO CITY: JERSEY CITY STATE: NJ ZIP: 07311 BUSINESS PHONE: (212) 869-6397 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY DEAN WITTER MUNICIPAL PREMIUM INCOME TRUST DATE OF NAME CHANGE: 19981221 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 N-CSRS 1 y92839nvcsrs.txt N-CSRS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSRS CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-05689 Morgan Stanley Municipal Premium Income Trust (Exact name of registrant as specified in charter) 1221 Avenue of the Americas, New York, New York 10020 (Address of principal executive offices) (Zip code) Ronald E. Robison 1221 Avenue of the Americas, New York, New York 10020 (Name and address of agent for service) Registrant's telephone number, including area code: 212-762-4000 Date of fiscal year end: May 31, 2004 Date of reporting period: November 30, 2003 Item 1 - Report to Shareholders Welcome, Shareholder: In this report, you'll learn about how your investment in Morgan Stanley Municipal Premium Income Trust performed during the semiannual period. We will provide an overview of the market conditions, and discuss some of the factors that affected performance during the reporting period. In addition, this report includes the Fund's financial statements and a list of Fund investments. Market forecasts provided in this report may not necessarily come to pass. There is no assurance that the Fund will achieve its investment objective. The Fund is subject to market risk, which is the possibility that the market values of securities owned by the Fund will decline and, therefore, the value of the Fund shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund. FUND REPORT For the six-month period ended November 30, 2003 MARKET OVERVIEW Over the past six months, the U.S. economy showed increasing strength, culminating in 8.2 percent GDP growth in the third quarter of 2003. Some of the most closely watched indicators, such as employment growth, improved but remained below potential. The Federal Reserve Board continued its stimulative monetary policy by keeping the federal funds target rate at a record low of 1.0 percent. The municipal market began the period with yields near 40-year lows. By mid-June, yields began to climb from their lows as investors shifted their attention to the improving equity market. At the same time, municipal market participation by institutional taxable investors subsided as taxable yields rose faster than tax-exempt yields. Ongoing budgetary and fiscal difficulties at the state and local levels contributed to ratings downgrades for many municipal issues. Municipal issuance remained strong through July, but slowed over the last few months of the period as yields rose. Overall, these forces combined to push municipal-bond yields higher than where they began the period. PERFORMANCE ANALYSIS The net asset value (NAV) of Morgan Stanley Premium Municipal Income Trust (PIA) decreased from $10.56 to $10.32 per share for the six months ended November 30, 2003. Based on this change plus reinvestment of tax-free dividends totaling $0.30 per share the Fund's total NAV return was 0.80 percent. PIA's value on the New York Stock Exchange (NYSE) decreased from $9.41 to $9.34 per share during this period. Based on this change plus reinvestment of tax- free dividends, the Fund's total market return was 2.48 percent. On November 30, 2003, PIA's NYSE market price was at a 9.50 percent discount to its NAV. Monthly dividends for the fourth quarter of 2003 were declared in September. Beginning with the October payment, the monthly payment increased from $0.0475 to $0.0525 per share. The new dividend reflects the level of the Fund's undistributed net investment income and projected earnings power. The Fund's level of undistributed net investment income was $0.155 per share on November 30, 2003, versus $0.160 per share on May 31, 2003.* From a strategic point of view, with interest rates at or near multi-decade lows, we have become increasingly cautious. As a result, the portfolio's duration (a measure of interest rate sensitivity) was shorter than its benchmark index. The portfolio's duration, adjusted for leverage, was 11.5 years. Its average maturity of 18 years has been maintained, however, because of the income advantage of the steepness of the municipal yield curve. We have continued to emphasize revenue bonds in sectors tied to reliable income streams from such essential services as municipal electric, transportation and water and sewer utilities. As of November 30, 2003, the Fund's net assets of $301 million including preferred shares were diversified across 73 credits in 13 long-term sectors. * Income earned by certain securities in the portfolio may be subject to the federal alternative minimum tax (AMT). 2 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 two years. Incremental income to common shareholders depends on two factors. The first factor is the amount of ARPS outstanding, while the second is 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 the six-month period, ARPS leverage contributed approximately $0.08 per share to common share earnings. The Fund has five ARPS series totaling $100 million and representing 33 percent of net assets. The five series are currently in two-year auction modes with maturities ranging from January 2004 to September 2005. Yields ranged from 1.229 to 2.55 percent. The Fund's procedure for reinvesting all dividends and distributions in 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.
LARGEST SECTORS Transportation 28.5% General Obligation 22.4% Electric 20.9% Water & Sewer 19.6% IDR/PCR* 13.6%
CREDIT ANALYSIS Aaa/AAA 69.2% Aa/AA 19.6% A/A 3.7% Baa/BBB 5.5% NR 2.0%
* Industrial Development/Pollution Control Revenue Subject to change daily. Largest Sectors are as a percentage of net assets, and Credit Analysis is a percentage of total long-term investments. Morgan Stanley is a full-service firm engaged in securities trading and brokerage activities, investment banking, research and analysis, financing and financial advisory services. 3 DISTRIBUTION BY MATURITY (% of Long Term Portfolio) As of November 30, 2003 WEIGHTED AVERAGE MATURITY: 18 YEARS 1-5 6 5-10 14 10-20 38 20-30 40 30+ years 2
Portfolio structure is subject to change. Geographic Summary of Investments Based on Market Value as a Percent of Total Investments Alabama................ 1.3% Arizona................ 7.2 California............. 4.9 Colorado............... 3.1 Connecticut............ 0.7 Florida................ 3.4 Georgia................ 5.9 Hawaii................. 1.2 Illinois............... 4.5 Indiana................ 2.0 Kansas................. 3.5 Kentucky............... 1.2 Louisiana.............. 0.7 Maryland............... 0.3 Massachusetts.......... 5.7 Michigan............... 2.6 Minnesota.............. 1.9 Missouri............... 1.7 Nevada................. 1.1 New Jersey............. 2.9 New York............... 11.5% Ohio................... 4.1 Pennsylvania........... 4.8 Puerto Rico............ 0.9 South Carolina......... 4.6 Tennessee.............. 2.3 Texas.................. 12.6 Utah................... 1.9 Virginia............... 1.5 ----- Total.................. 100.0% =====
4 CALL AND COST (BOOK) YIELD STRUCTURE (Based on Long-Term Portfolio) As of November 30, 2003 PERCENT OF BONDS CALLABLE -- WEIGHTED AVERAGE CALL PROTECTION: 6 YEARS 2004 11 2005 9 2006 9 2007 2 2008 12 2009 2 2010 9 2011 13 2012 9 2013+ 24
COST (BOOK) YIELD (A) -- WEIGHTED AVERAGE BOOK YIELD: 5.5% 2004 6.90 2005 6.10 2006 5.50 2007 6.20 2008 5.40 2009 5.60 2010 5.70 2011 4.80 2012 5.10 2013+ 4.70
(a) Cost or "book" yield is the annual income earned on a portfolio investment based on its original purchase price before the Fund's operating expenses. For example, the Fund is earning a book yield of 6.9% on 11% of the long-term portfolio that is callable in 2004. Portfolio structure is subject to change. 5 Morgan Stanley Municipal Premium Income Trust PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2003 (UNAUDITED)
PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE - ----------------------------------------------------------------------------------------------------------- Tax-Exempt Municipal Bonds (145.5%) General Obligation (22.4%) Los Angeles Unified School District, California, $ 2,000 2003 Ser A (FSA)....................................... 5.25 % 07/01/20 $ 2,165,140 5,000 1997 Ser B (FGIC)...................................... 5.00 07/01/23 5,131,000 5,000 San Diego Unified School District, California, 1998 Ser E (FSA).................................................. 5.00 07/01/28 5,120,350 2,000 Connecticut, 2001 Ser D.................................. 5.00 11/15/20 2,105,940 3,000 Chicago Board of Education, Illinois, Ser 2001 C (FSA)... 5.00 12/01/26 3,042,480 2,000 Du Page County Community Unit School District No 200, Illinois, Ser 2003 B................................... 5.25 11/01/21 2,151,280 Massachusetts, 3,500 1995 Ser A (Ambac)..................................... 5.00 07/01/12 3,893,435 6,000 Refg Ser D (Ambac)..................................... 5.50 10/01/19 6,899,220 3,000 Barberton City School District, Ohio, Ser 1998 (FGIC).... 5.125 11/01/22 3,165,150 Pennsylvania, 1,000 RITES PA - 1112 A (MBIA)............................... 8.649++ 01/01/18 1,139,310 1,000 RITES PA - 1112 B (MBIA)............................... 8.649++ 01/01/19 1,125,250 3,500 Shelby County, Tennessee, Refg 1995 Ser A................ 5.625 04/01/11 3,725,295 5,000 La Joya Independent School District, Texas, Ser 2000 (PSF).................................................. 5.50 02/15/25 5,350,250 ------------- - -------- 45,014,100 42,000 ------------- - -------- Educational Facilities Revenue (10.9%) 4,000 University of Northern Colorado, Refg Ser 2001 (Ambac)... 5.00 06/01/31 4,061,240 5,500 Oakland University, Michigan, Ser 1995 (MBIA)............ 5.75 05/15/26 5,877,960 New York State Dormitory Authority, 4,000 State University Refg Ser 1993 A....................... 5.50 05/15/08 4,518,480 890 State University Refg Ser 1999 B....................... 7.50 05/15/11 1,086,254 1,250 Ohio State University, General Receipts Ser 1999 A....... 5.75 12/01/24 1,388,100 5,000 Swarthmore Boro Authority, Pennsylvania, Swarthmore College Ser 2001....................................... 5.00 09/15/31 5,091,750 ------------- - -------- 22,023,784 20,640 ------------- - -------- Electric Revenue (20.9%) 8,000 Salt River Project Agricultural Improvement & Power District, Arizona, Ser 2002 B.......................... 5.00 01/01/26 8,184,480 1,550 Los Angeles Department of Water & Power, California 2001 Ser A.................................................. 5.00 07/01/24 1,575,994 750 Sacramento Municipal Utility District, California, Refg 1994 Ser I (MBIA)...................................... 6.00 01/01/24 768,053 5,000 Orlando Utilities Commission, Florida, Water & Electric Ser 2001............................................... 5.00 10/01/22 5,190,600 7,000 South Carolina Public Service Authority, 1995 Refg Ser A (Ambac)................................................ 6.25 01/01/22 7,722,260 3,000 Memphis, Tennessee, 2003 Ser A (MBIA) (WI)............... 5.00 12/01/15 3,275,190 8,500 San Antonio, Texas, Electric & Gas Refg Ser 1994 C....... 8.18++ 02/01/06 9,627,014
6 See Notes to Financial Statements Morgan Stanley Municipal Premium Income Trust PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2003 (UNAUDITED) continued
PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE - ----------------------------------------------------------------------------------------------------------- $ 5,000 Intermountain Power Agency, Utah, Refg 1997 Ser B (MBIA)................................................. 5.75 % 07/01/19 $ 5,603,850 ------------- - -------- 41,947,441 38,800 ------------- - -------- Hospital Revenue (8.9%) 3,500 Birmingham-Carraway Special Care Facilities Financing Authority, Alabama, Carraway Methodist Health Ser 1995 A (Connie Lee)......................................... 5.875 08/15/15 3,797,710 2,000 Louisiana Public Facilities Authority, Oshsner Clinic Ser 2002 B................................................. 5.50 05/15/32 2,016,840 1,000 Maryland Health & Higher Educational Facilities Authority, Johns Hopkins Hospital Ser 2003............. 5.00 11/15/28 1,012,980 5,000 Lehigh County General Purpose Authority, Pennsylvania, St Luke's of Bethlehem Hospital Ser 2003.................. 5.375 08/15/33 4,897,850 6,000 South Carolina Jobs - Economic Development Authority, Bon Secours Health Ser 2002 A.......................... 5.625 11/15/30 6,096,900 ------------- - -------- 17,822,280 17,500 ------------- - -------- Industrial Development/Pollution Control Revenue (13.6%) 7,485 Pima County Industrial Development Authority, Arizona, Tucson Electric Power Co Refg Ser 1988 A (FSA)......... 7.25 07/15/10 7,894,055 10,000 Burlington, Kansas, Kansas Gas & Electric Co Ser 1991 (MBIA)................................................. 7.00 06/01/31 10,452,000 8,000 New York City Industrial Development Agency, New York, Brooklyn Navy Yard Cogeneration Partners LP Ser 1997 (AMT).................................................. 5.65 10/01/28 7,313,280 1,500 Brazos River Authority, Texas, TXU Electric Co Refg Ser 1999 A (AMT).................................. 7.70 04/01/33 1,687,080 ------------- - -------- 27,346,415 26,985 ------------- - -------- Mortgage Revenue -- Multi-Family (4.1%) Massachusetts Housing Finance Agency, 1,790 Rental 1994 Ser A (AMT) (Ambac)........................ 6.60 07/01/14 1,841,785 4,340 Rental 1994 Ser A (AMT) (Ambac)........................ 6.65 07/01/19 4,463,733 1,940 Minnesota Housing Finance Agency, Rental 1995 Ser D (MBIA)................................................. 6.00 02/01/22 2,000,004 ------------- - -------- 8,305,522 8,070 ------------- - -------- Mortgage Revenue -- Single Family (0.7%) 540 Colorado Housing & Finance Authority Ser 1997 A-2 (AMT).................................................. 7.25 05/01/27 557,253 80 Kansas City Leavenworth & Lenexa, Kansas, GNMA-Backed Ser 1998 C (AMT)........................................... 8.00 11/01/20 80,156 30 Olathe, Kansas, GNMA Collateralized Ser 1989 A (AMT) (MBIA)................................................. 8.00 11/01/20 30,025 655 Missouri Housing Development Commission, Homeownership 1996 Ser D (AMT)....................................... 7.10 09/01/27 662,919 ------------- - -------- 1,330,353 1,305 ------------- - --------
7 See Notes to Financial Statements Morgan Stanley Municipal Premium Income Trust PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2003 (UNAUDITED) continued
PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE - ----------------------------------------------------------------------------------------------------------- Public Facilities Revenue (1.8%) Saint Paul Independent School District #625, Minnesota, $ 1,700 Ser 1995 C COPs........................................ 5.45 % 02/01/11 $ 1,779,169 1,800 Ser 1995 C COPs........................................ 5.50 02/01/12 1,884,132 ------------- - -------- 3,663,301 3,500 ------------- - -------- Recreational Facilities Revenue (0.5%) 825 Metropolitan Pier & Exposition Authority, Illinois, - -------- McCormick Place Refg Ser 1998 A (FGIC)................. 5.50 06/15/18 943,272 ------------- Transportation Facilities Revenue (28.5%) 5,000 Arizona Transportation Board, Highway Ser 2001........... 5.25 07/01/19 5,423,600 4,000 Colorado Department of Transportation, Ser 2000 (Ambac)................................................ 6.00 06/15/14 4,753,720 Miami-Dade County, Florida, 2,050 Miami Int'l Airport Refg Ser 2003 B (AMT) (MBIA)....... 5.25 10/01/17 2,205,677 2,500 Miami Int'l Airport Ser 2000 B (FGIC).................. 5.75 10/01/24 2,733,750 1,940 Atlanta, Georgia, Airport Ser 1994 B (AMT) (Ambac)....... 6.00 01/01/21 1,986,269 2,500 Georgia State Road & Toll Authority, DRIVERS Ser 373..... 8.63++ 10/01/11 2,727,550 Chicago, Illinois, 5,000 Chicago-O'Hare Int'l Airport Ser 1996 A (Ambac)........ 5.625 01/01/12 5,470,750 1,805 Midway Airport 1994 Ser A (AMT) (MBIA)................. 6.25 01/01/24 1,848,807 350 New Jersey Transportation Trust Authority, 1998 Ser A (FSA).................................................. 4.50 06/15/19 354,018 5,000 New Jersey Turnpike Authority, Ser 2003 A (Ambac)........ 5.00 01/01/30 5,128,150 3,000 Metropolitan Transportation Authority, New York, State Service Contract Refg Ser 2002 B (MBIA)................ 5.50 07/01/20 3,309,450 3,000 Triborough Bridge & Tunnel Authority, New York, Refg Ser 2002 B................................................. 5.25 11/15/19 3,255,390 2,000 Pennsylvania Turnpike Commission, Ser R 2001 (Ambac)..... 5.00 12/01/30 2,054,700 2,800 Puerto Rico Highway & Transportation Authority, Ser 1998 A...................................................... 4.75 07/01/38 2,696,372 8,000 Austin, Texas, Airport Prior Lien Ser 1995 A (AMT) (MBIA)................................................. 6.125 11/15/25 8,778,800 3,000 Pocahontas Parkway Association, Virginia, Route 895 Connector Ser 1998 A................................... 5.50 08/15/28 2,315,790 2,000 Richmond Metropolitan Authority, Virginia, Expressway & Refg Ser 1998 (FGIC)................................... 5.25 07/15/17 2,259,500 ------------- - -------- 57,302,293 53,945 ------------- - -------- Water & Sewer Revenue (19.6%) 3,000 Atlanta, Georgia, Water & Wastewater Ser 1999 A (FGIC)... 5.50 11/01/22 3,397,920 4,000 Augusta, Georgia, Water & Sewerage Ser 2000 (FSA)........ 5.25 10/01/22 4,257,560 5,000 Rockdale County Water & Sewage Authority, Georgia, Ser 1999 A (MBIA).......................................... 5.50 07/01/25 5,395,400 Indianapolis Local Public Improvement Bond Bank, Indiana, 1,000 Waterworks Ser 2002 A (MBIA)........................... 5.50 01/01/18 1,105,440 1,000 Waterworks Ser 2002 A (MBIA)........................... 5.50 01/01/19 1,100,860
8 See Notes to Financial Statements Morgan Stanley Municipal Premium Income Trust PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2003 (UNAUDITED) continued
PRINCIPAL AMOUNT IN COUPON MATURITY THOUSANDS RATE DATE VALUE - ----------------------------------------------------------------------------------------------------------- $ 3,215 Louisville & Jefferson County Metropolitan Sewer District, Kentucky, Ser 2001 A (MBIA).................. 5.375% 05/15/22 $ 3,460,948 1,755 Detroit, Michigan, Water Supply Sr Lien 2000 A (FGIC).... 5.25 07/01/33 1,822,199 3,000 Las Vegas Water District, Nevada, Impr & Refg Ser 2003 A (FGIC)................................................. 5.25 06/01/22 3,184,530 2,960 Passaic Valley Sewage Commissioners, New Jersey, Ser F (FGIC)................................................. 5.00 12/01/19 3,153,110 New York City Municipal Water Finance Authority, New York, 2,000 2003 Ser D............................................. 5.25 06/15/15 2,207,620 2,000 2004 Ser A............................................. 5.00 06/15/35 2,026,780 3,000 Cleveland, Ohio, Waterworks Impr & Refg 1998 Ser I (FSA).................................................. 5.00 01/01/23 3,073,410 5,000 Austin, Texas, Water & Wastewater Refg Ser 2001 A (FSA).................................................. 5.125 05/15/27 5,129,850 ------------- - -------- 39,315,627 36,930 ------------- - -------- Other Revenue (5.3%) 2,000 New York City Transitional Finance Authority, New York, Refg 2003 Ser.......................................... 5.50 11/01/26 2,274,240 8,000 New York Local Government Assistance Corporation, Refg Ser 1997 B (MBIA)................................. 5.00 04/01/21 8,374,080 ------------- - -------- 10,648,320 10,000 ------------- - -------- Refunded (8.3%) 3,000 Hawaii, 1999 Ser CT (FSA)................................ 5.875 09/01/09+ 3,545,370 1,340 Missouri Health & Educational Facilities Authority, Missouri, Baptist Medical Center Refg Ser 1989 (ETM)... 7.625 07/01/18 1,374,559 4,000 Montgomery County, Ohio, Franciscan Medical Center - Dayton Ser 1997............................... 5.50 07/01/10+ 4,563,840 4,000 Lower Colorado River Authority, Texas, Jr Lien Seventh Ser (FSA) (ETM)........................................ 4.75 01/01/28 4,065,600 3,000 San Antonio, Texas, Electric & Gas Refg Ser 1994 C (ETM).................................................. 4.70 02/01/06 3,202,020 ------------- - -------- 16,751,389 15,340 ------------- - -------- 275,840 Total Tax-Exempt Municipal Bonds (Cost $275,295,976).......................... 292,414,097 ------------- - -------- Short-Term Tax-Exempt Municipal Obligations (3.4%) 3,795 Indiana Health Facility Financing Authority, Clarian Health Ser 2000 B (Demand 12/01/03).................... 1.06* 03/01/30 3,795,000 3,100 Missouri Health & Educational Facilities Authority, Washington University Ser 1996 D (Demand 12/01/03)..... 1.10* 09/01/30 3,100,000 ------------- - -------- 6,895 Total Short-Term Tax-Exempt Municipal Obligations (Cost $6,895,000)........... 6,895,000 ------------- - --------
9 See Notes to Financial Statements Morgan Stanley Municipal Premium Income Trust PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2003 (UNAUDITED) continued
PRINCIPAL AMOUNT IN THOUSANDS VALUE - ---------------------------------------------------------------------------------------------------------- $282,735 Total Investments (Cost $282,190,976) (a).......................... 148.9% 299,309,097 ======== Other Assets in Excess of Liabilities.............................. 0.9 1,759,172 Preferred Shares of Beneficial Interest............................ (49.8) (100,148,650) ----- ------------- Net Assets Applicable to Common Shareholders....................... 100.0% $ 200,919,619 ===== =============
- --------------------------------------------------- Note: The categories of investments are shown as a percentage of net assets applicable to common shareholders. AMT Alternative Minimum Tax. COPs Certificates of Participation. DRIVERS Derivative Inverse Tax-Exempt Receipts. ETM Escrowed to maturity. PSF Texas Permanent School Fund Guarantee Program. RITES Residual Interest Tax-Exempt Securities. WI Security purchased on a when-issued basis. * Current coupon of variable rate demand obligation. + Prerefunded to call date shown. ++ Current coupon rate for inverse floating rate municipal obligation. This rate resets periodically as the auction rate on the related security changes. Positions in inverse floating rate municipal obligation have a total value of $14,619,124 which represents 7.3% of net assets applicable to common shareholders. (a) The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $18,671,380 and the aggregate gross unrealized depreciation is $1,553,259, resulting in net unrealized appreciation of $17,118,121. 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.
10 See Notes to Financial Statements Morgan Stanley Municipal Premium Income Trust FINANCIAL STATEMENTS Statement of Assets and Liabilities November 30, 2003 (unaudited) Assets: Investments in securities, at value (cost $282,190,976)....................................... $299,309,097 Cash........................................................ 53,024 Receivable for: Interest................................................ 4,676,489 Investments sold........................................ 51,000 Prepaid expenses and other assets........................... 603,186 ------------ Total Assets............................................ 304,692,796 ------------ Liabilities: Payable for: Investments purchased................................... 3,294,173 Investment advisory fee................................. 98,742 Administration fee...................................... 61,714 Shares of beneficial interest repurchased............... 59,773 Accrued expenses............................................ 110,125 ------------ Total Liabilities....................................... 3,624,527 ------------ Preferred shares of beneficial interest, (at liquidation value) (1,000,000 shares authorized of non-participating $.01 par value, 1,000 shares outstanding)................. 100,148,650 ------------ Net Assets Applicable to Common Shareholders............ $200,919,619 ============ Composition of Net Assets Applicable to Common Shareholders: Common shares of beneficial interest (unlimited shares authorized of $.01 par value, 19,472,949 shares outstanding).............................................. $183,814,173 Net unrealized appreciation................................. 17,118,121 Accumulated undistributed net investment income............. 3,022,504 Accumulated net realized loss............................... (3,035,179) ------------ Net Assets Applicable to Common Shareholders............ $200,919,619 ============ Net Asset Value Per Common Share ($200,919,619 divided by 19,472,949 common shares outstanding)................................................ $10.32 ============
11 See Notes to Financial Statements Morgan Stanley Municipal Premium Income Trust FINANCIAL STATEMENTS continued Statement of Operations For the six months ended November 30, 2003 (unaudited) Net Investment Income: Interest Income............................................. $ 7,886,258 ----------- Expenses Investment advisory fee..................................... 605,113 Administration fee.......................................... 378,195 Auction commission fees..................................... 248,656 Transfer agent fees and expenses............................ 41,374 Professional fees........................................... 34,572 Shareholder reports and notices............................. 22,208 Auction agent fees.......................................... 12,160 Registration fees........................................... 10,954 Custodian fees.............................................. 10,233 Trustees' fees and expenses................................. 8,956 Other....................................................... 20,218 ----------- Total Expenses.......................................... 1,392,639 Less: expense offset........................................ (10,209) ----------- Net Expenses............................................ 1,382,430 ----------- Net Investment Income................................... 6,503,828 ----------- Net Realized and Unrealized Gain (Loss): Net realized gain........................................... 19,923 Net change in unrealized appreciation....................... (5,108,783) ----------- Net Loss................................................ (5,088,860) ----------- Net Increase................................................ $ 1,414,968 ===========
12 See Notes to Financial Statements Morgan Stanley Municipal Premium Income Trust FINANCIAL STATEMENTS continued Statement of Changes in Net Assets
FOR THE SIX FOR THE YEAR MONTHS ENDED ENDED NOVEMBER 30, 2003 MAY 31, 2003 ----------------- ------------ (unaudited) Increase (Decrease) in Net Assets: Operations: Net investment income....................................... $ 6,503,828 $ 13,880,252 Net realized gain (loss).................................... 19,923 (2,228,308) Net change in unrealized appreciation....................... (5,108,783) 12,487,663 Dividends to preferred shareholders from net investment income.................................................... (850,916) (1,761,524) ------------ ------------ Net Increase............................................ 564,052 22,378,083 ------------ ------------ Dividends and Distributions to Common Shareholders from: Net investment income....................................... (5,810,873) (11,403,798) Net realized gain........................................... -- (1,422,242) ------------ ------------ Total Dividends and Distributions....................... (5,810,873) (12,826,040) ------------ ------------ Decrease from transactions in common shares of beneficial interest.................................................. (3,803,694) (6,260,517) ------------ ------------ Net Increase (Decrease)................................. (9,050,515) 3,291,526 Net Assets Applicable to Common Shareholders: Beginning of period......................................... 209,970,134 206,678,608 ------------ ------------ End of Period (Including accumulated undistributed net investment income of $3,022,504 and $3,180,465, respectively)................. $200,919,619 $209,970,134 ============ ============
13 See Notes to Financial Statements Morgan Stanley Municipal Premium Income Trust NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2003 (UNAUDITED) 1. Organization and Accounting Policies Morgan Stanley 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 following is a summary of significant accounting policies: A. Valuation of Investments -- (1) portfolio securities are valued by an outside independent pricing service approved by the Trustees. The pricing service uses both a computerized grid 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 mean between the last reported bid and asked price. 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. The Trustees believe that timely and reliable market quotations are generally not readily available for purposes of valuing tax-exempt securities and that the valuations supplied by the pricing service are more likely to approximate the fair value of such securities; (2) futures are valued at the latest sale price on the commodities exchange on which they trade unless it is determined that such price does not reflect their market value, in which case they will be valued at their fair value as determined in good faith under procedures established by and under the supervision of the Trustees; and (3) 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 Policy -- It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable and nontaxable income to its shareholders. Accordingly, no federal income tax provision is required. 14 Morgan Stanley Municipal Premium Income Trust NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2003 (UNAUDITED) continued D. Dividends and Distributions to Shareholders -- Dividends and distributions to shareholders are recorded on the ex-dividend date. E. Futures Contracts -- A futures contract is an agreement between two parties to buy and sell financial instruments or contracts based on financial indices at a set price on a future date. Upon entering into such a contract, the Fund is required to pledge to the broker cash, U.S. Government securities or other liquid portfolio securities equal to the minimum initial margin requirements of the applicable futures exchange. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in the value of the contract. Such receipts or payments known as variation margin are recorded by the Fund as unrealized gains and losses. Upon closing of the contract, the Fund realizes a gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. F. Use of Estimates -- 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. 2. Investment Advisory/Administration Agreements Pursuant to an Investment Advisory Agreement with Morgan Stanley Investment Advisors Inc. (the "Investment Advisor"), the Fund pays an advisory fee, calculated weekly and payable monthly, by applying the annual rate of 0.40% to the Fund's weekly net assets, including preferred shares. Pursuant to an Administration Agreement with Morgan Stanley Services Company Inc. (the "Administrator"), an affiliate of the Investment Advisor, 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 including preferred shares. 3. 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, 2003 aggregated $41,689,370 and $42,135,973, respectively. Morgan Stanley Trust, an affiliate of the Investment Advisor and Administrator, is the Fund's transfer agent. At November 30, 2003, the Fund had transfer agent fees and expenses payable of approximately $14,000. The Fund has an unfunded noncontributory defined benefit pension plan covering certain independent Trustees of the Fund who will have served as independent Trustees for at least five years at the time 15 Morgan Stanley Municipal Premium Income Trust NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2003 (UNAUDITED) continued of retirement. Benefits under this plan are based on factors which include years of service and compensation. Aggregate pension costs for the six months ended November 30, 2003 included in Trustees' fees and expenses in the Statement of Operations amounted to $3,711. At November 30, 2003, the Fund had an accrued pension liability of $59,921 which is included in accrued expenses in the Statement of Assets and Liabilities. On December 2, 2003, the Trustees voted to close the plan to new participants, eliminate the future benefits growth due to increases to compensation after July 31, 2003 and effective April 1, 2004, establish an unfunded deferred compensation plan which allows each independent trustee to defer payment of all, or a portion of the fees he receives for serving on the Board of Trustees throughout the year. 4. 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, 2002....................................... 20,579,649 $205,796 $193,673,032 Treasury shares purchased and retired (weighted average discount 10.29%)*......................................... (692,900) (6,929) (6,253,588) Reclassification due to permanent book/tax differences...... -- -- (444) ---------- -------- ------------ Balance, May 31, 2003....................................... 19,886,749 198,867 187,419,000 Treasury shares purchased and retired (weighted average discount 9.68%)*.......................................... (413,800) (4,138) (3,799,556) ---------- -------- ------------ Balance, November 30, 2003.................................. 19,472,949 $194,729 $183,619,444 ========== ======== ============
- --------------------- * The Trustees have voted to retire the shares purchased. 5. 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 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 16 Morgan Stanley Municipal Premium Income Trust NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2003 (UNAUDITED) continued dividends, whether or not declared, thereon to the date of redemption. Dividends, which are cumulative, are reset through auction procedures.
NEXT AMOUNT RESET RANGE OF SERIES SHARES* IN THOUSANDS* RATE* DATE DIVIDEND RATES** - ------ ------- ------------- ----- -------- ---------------- A 200 20,000 1.60% 09/07/05 0.59 %- 1.60 % B 200 20,000 1.39 01/05/05 1.39 C 200 20,000 1.229 07/06/05 0.738- 1.229 D 200 20,000 2.55 01/07/04 2.55 E 200 20,000 2.15 07/07/04 2.15
- --------------------- * As of November 30, 2003. ** For the six months ended November 30, 2003. 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. 6. Dividends to Common Shareholders The Fund declared the following dividends from net investment income:
DECLARATION AMOUNT RECORD PAYABLE DATE PER SHARE DATE DATE - ------------------ --------- ---------------- ----------------- September 23, 2003 $0.0525 December 5, 2003 December 19, 2003 December 30, 2003 $0.0525 January 9, 2004 January 23, 2004 December 30, 2003 $0.0525 February 6, 2004 February 20, 2004 December 30, 2003 $0.0525 March 5, 2004 March 19, 2004
7. Expense Offset The expense offset represents a reduction of the custodian fees for earnings on cash balances maintained by the Fund. 8. Risks Relating to Certain Financial Instruments The Fund may invest a portion of its assets in inverse floating rate municipal obligations. The prices of these securities are subject to greater market fluctuations during periods of changing prevailing interest rates than are comparable fixed rate obligations. 17 Morgan Stanley Municipal Premium Income Trust NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2003 (UNAUDITED) continued To hedge against adverse interest rate changes, the Fund may invest in financial futures contracts or municipal bond index futures contracts ("futures contracts"). These futures contracts involve elements of market risk in excess of the amount reflected in the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the value of the underlying securities. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts. 9. Federal Income Tax Status The amount of dividends and distributions from net investment 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 tax purposes are reported as distributions of paid-in-capital. As of May 31, 2003, the Fund had temporary book/tax differences primarily attributable to post-October losses (capital losses incurred after October 31 within the taxable year which are deemed to arise on the first business day of the Fund's taxable year) and book amortization of discount on debt securities. 18 Morgan Stanley 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, 2003 2003 2002 2001 2000 1999 ----------------- --------- --------- --------- --------- --------- (unaudited) Selected Per Share Data: Net asset value, beginning of period.......................... $10.56 $10.04 $ 9.88 $ 9.08 $10.03 $10.41 ------ ------ ------ ------ ------ ------ Income from investment operations: Net investment income*....... 0.33 0.68 0.70 0.69 0.68 0.70 Net realized and unrealized gain (loss).................. (0.25) 0.53 0.13 0.80 (0.96) (0.18) Common share equivalent of dividends paid to preferred shareholders*................ (0.04) (0.09) (0.12) (0.19) (0.16) (0.14) ------ ------ ------ ------ ------ ------ Total income (loss) from investment operations........... 0.04 1.12 0.71 1.30 (0.44) 0.38 ------ ------ ------ ------ ------ ------ Less dividends and distributions from: Net investment income........ (0.30) (0.56) (0.54) (0.54) (0.53) (0.54) Net realized gain............ -- (0.07) (0.04) -- (0.07) (0.26) ------ ------ ------ ------ ------ ------ Total dividends and distributions................... (0.30) (0.63) (0.58) (0.54) (0.60) (0.80) ------ ------ ------ ------ ------ ------ Anti-dilutive effect of acquiring treasury shares*................ 0.02 0.03 0.03 0.04 0.09 0.04 ------ ------ ------ ------ ------ ------ Net asset value, end of period... $10.32 $10.56 $10.04 $ 9.88 $ 9.08 $10.03 ====== ====== ====== ====== ====== ====== Market value, end of period...... $ 9.34 $ 9.41 $ 9.02 $ 8.88 $ 7.75 $ 8.75 ====== ====== ====== ====== ====== ====== Total Return+.................... 2.48%(1) 11.90% 8.30% 21.92% (4.55)% (1.21)% Ratios to Average Net Assets of Common Shareholders: Total expenses (before expense offset)......................... 1.38%(2)(3) 1.33%(3) 1.24%(3) 1.26%(3) 1.28%(3) 1.19%(3) Net investment income before preferred stock dividends....... 6.44%(2) 6.76% 6.95% 7.12% 7.30% 6.73% Preferred stock dividends........ 0.84%(2) 0.86% 1.23% 1.91% 1.74% 1.39% Net investment income available to common shareholders.......... 5.60%(2) 5.90% 5.72% 5.21% 5.56% 5.34% Supplemental Data: Net assets applicable to common shareholders, end of period, in thousands....................... $200,920 $209,970 $206,679 $210,356 $200,256 $236,496 Asset coverage on preferred shares at end of period......... 300% 310% 306% 310% 300% 336% Portfolio turnover rate.......... 14%(1) 18% 11% 12% 11% 17%
- --------------------- * The per share amounts were computed using an average number of common 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%.
19 See Notes to Financial Statements TRUSTEES Michael Bozic Charles A. Fiumefreddo Edwin J. Garn Wayne E. Hedien James F. Higgins Dr. Manuel H. Johnson Joseph J. Kearns Michael E. Nugent Philip J. Purcell Fergus Reid OFFICERS Charles A. Fiumefreddo Chairman of the Board Mitchell M. Merin President Ronald E. Robison Executive Vice President and Principal Executive Officer Barry Fink Vice President and General Counsel Joseph J. McAlinden Vice President Stefanie V. Chang Vice President Francis J. Smith Treasurer and Chief Financial Officer Thomas F. Caloia Vice President Mary E. Mullin Secretary TRANSFER AGENT Morgan Stanley Trust Harborside Financial Center, Plaza Two Jersey City, New Jersey 07311 INDEPENDENT AUDITORS Deloitte & Touche LLP Two World Financial Center New York, New York 10281 INVESTMENT ADVISOR Morgan Stanley Investment Advisors Inc. 1221 Avenue of the Americas New York, New York 10020 The financial statements included herein have been taken from the records of the Fund without examination by the independent auditors and accordingly they do not express an opinion thereon. Investments and services offered through Morgan Stanley DW Inc., member SIPC. (c) 2003 Morgan Stanley [MORGAN STANLEY LOGO] MORGAN STANLEY FUNDS Morgan Stanley Municipal Premium Income Trust Semiannual Report November 30, 2003 [MORGAN STANLEY LOGO] 38563RPT-00-13316-AO4-0P-1/04 Item 2. Code of Ethics. Not applicable for semiannual reports. Item 3. Audit Committee Financial Expert. Not applicable for semiannual reports. Item 4. Principal Accountant Fees and Services Not applicable for semiannual reports. Item 5. Audit Committee of Listed Registrants. Not applicable for semiannual reports. Item 6. [Reserved.] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable for semiannual reports. Item 8. [Reserved.] Item 9 - Controls and Procedures (a) The Fund's principal executive officer and principal financial officer have concluded that the Fund's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report. There were no significant changes or corrective actions with regard to significant deficiencies or material weaknesses in the Fund's internal controls or in other factors that could significantly affect the Fund's internal controls subsequent to the date of their evaluation. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 10 Exhibits (a) Code of Ethics - Not applicable for semiannual reports. (b) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto as part of EX-99.CERT. 2 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. Morgan Stanley Municipal Premium Income Trust /s/ Ronald E. Robison Ronald E. Robison Principal Executive Officer January 22, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ Ronald E. Robison Ronald E. Robison Principal Executive Officer January 22, 2004 /s/ Francis Smith Francis Smith Principal Financial Officer January 22, 2004 3 EX-99.CERT 3 y92839exv99wcert.txt CERTIFICATION EXHIBIT 10 B1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER CERTIFICATIONS I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-CSR of Morgan Stanley Municipal Premium Income Trust; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; [b) Omitted.] c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): 4 a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: January 22, 2004 /s/ Ronald E. Robison Ronald E. Robison Principal Executive Officer 5 EXHIBIT 10 B2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER CERTIFICATIONS I, Francis Smith, certify that: 6. I have reviewed this report on Form N-CSR of Morgan Stanley Municipal Premium Income Trust; 7. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 8. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 9. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: b) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; [b) Omitted.] e) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and f) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 10. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): c) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and 6 d) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: January 22, 2004 /s/ Francis Smith Francis Smith Principal Financial Officer 7 EX-99.906CERT 4 y92839exv99w906cert.txt CERTIFICATION SECTION 906 CERTIFICATION Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Morgan Stanley Municipal Premium Income Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended November 30, 2003 that is accompanied by this certification, the undersigned hereby certifies that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: January 22, 2004 /s/ Ronald E. Robison --------------------------- Ronald E. Robison Principal Executive Officer A signed original of this written statement required by Section 906 has been provided to Morgan Stanley Municipal Premium Income Trust and will be retained by Morgan Stanley Municipal Premium Income Trust and furnished to the Securities and Exchange Commission or its staff upon request. 8 SECTION 906 CERTIFICATION Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Morgan Stanley Municipal Premium Income Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended November 30, 2003 that is accompanied by this certification, the undersigned hereby certifies that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: January 22, 2004 /s/ Francis Smith ---------------------- Francis Smith Principal Financial Officer A signed original of this written statement required by Section 906 has been provided to Morgan Stanley Municipal Premium Income Trust and will be retained by Morgan Stanley Municipal Premium Income Trust and furnished to the Securities and Exchange Commission or its staff upon request. 9 -----END PRIVACY-ENHANCED MESSAGE-----