N-Q 1 e400990_nq-munienhanced.txt QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number 811-5739 Name of Fund: MuniEnhanced Fund, Inc. Fund Address: P.O. Box 9011 Princeton, NJ 08543-9011 Name and address of agent for service: Terry K. Glenn, President, MuniEnhanced Fund, Inc., 800 Scudders Mill Road, Plainsboro, NJ 08536. Mailing address: P.O. Box 9011, Princeton, NJ 08543-9011 Registrant's telephone number, including area code: (609) 282-2800 Date of fiscal year end: 01/31/04 Date of reporting period: 08/01/04 - 10/31/04 Item 1 - Schedule of Investments MuniEnhanced Fund, Inc. Schedule of Investments as of October 31, 2004 (in Thousands)
S&P Moody's Face State Ratings Ratings Amount Municipal Bonds Value ------------------------------------------------------------------------------------------------------------------------------------ Arkansas - 0.3% NR* Aaa $ 1,000 University of Arkansas, University Construction Revenue Bonds $ 1,024 (UAMS Campus), Series B, 5% due 11/01/2034 (f) ------------------------------------------------------------------------------------------------------------------------------------ California - 27.2% AAA Aaa 9,000 Alameda Corridor Transportation Authority, California, Capital 6,328 Appreciation Revenue Refunding Bonds, Subordinate Lien, Series A, 5.62%** due 10/01/2012(a) AAA Aaa 6,000 Alameda Corridor Transportation Authority, California, Revenue 4,174 Refunding Bonds, Subordinated Lien, Series A , 5.57%** due 10/01/2012(a) AAA Aaa 5,000 Anaheim, California, Public Financing Authority, Lease Revenue 6,078 Bonds (Public Improvements Project), Senior-Series A, 6% due 9/01/2024(d) California State Department of Water Resources, Power Supply Revenue Bonds, Series A: BBB+ A2 1,240 5.375% due 5/01/2022 1,339 AAA Aaa 1,800 5.375% due 5/01/2022(f) 1,965 California State, GO, Refunding: A A3 3,000 5.25% due 9/01/2026 3,156 AAA Aaa 6,000 5.25% due 2/01/2030(f) 6,329 A A3 5,000 5.125% due 6/01/2031 5,122 AAA NR* 2,200 California State, GO, Refunding, ROLS, Series II-R-272, 8.648% 2,388 due 2/01/2033(h)(j) A A3 8,490 California State, Various Purpose, GO, 5.50% due 11/01/2033 9,106 Golden State Tobacco Securitization Corporation of California, Tobacco Settlement Revenue Bonds, Series B: A- Baa1 3,805 5.60% due 6/01/2028 3998 AAA Aaa 2,200 5.50% due 6/01/2033(c) 2376 AAA Aaa 1,400 5.625% due 6/01/2033(c) 1530 AAA Aaa 5,000 5% due 6/01/2038(a) 5,094 AAA Aaa 6,800 5.625% due 6/01/2038(k) 7,405 AAA Aaa 10,000 5.50% due 6/01/2043(b) 10,802 AAA Aaa 2,835 5.50% due 6/01/2043(c) 3,056 ------------------------------------------------------------------------------------------------------------------------------------
Portfolio Abbreviations To simplify the listings of MuniEnhanced Fund, Inc.'s portfolio holdings in the Schedule of Investments, we have abbreviated the names of many of the securities according to the list below. AMT Alternative Minimum Tax (subject to) COP Certificates of Participation DRIVERS Derivative Inverse Tax-Exempt Receipts EDA Economic Development Authority GO General Obligation Bonds HDA Housing Development Authority HFA Housing Finance Agency IDA Industrial Development Authority IDR Industrial Development Revenue Bonds RIB Residual Interest Bonds RITR Residual Interest Trust Receipts ROLS Reset Option Longs S/F Single-Family MuniEnhanced Fund, Inc. Schedule of Investments as of October 31, 2004 (continued) (in Thousands)
S&P Moody's Face State Ratings Ratings Amount Municipal Bonds Value ------------------------------------------------------------------------------------------------------------------------------------ California (concluded) AAA Aaa $ 5,000 Norco, California, Redevelopment Agency, Tax Allocation Refunding $ 5,183 Bonds (Norco Redevelopment Project-Area Number 1), 5.125% due 3/01/2030(f) AAA Aaa 1,750 Poway, California, Redevelopment Agency, Tax Allocation Refunding 1,808 Bonds (Paguay Redevelopment Project), 5.125% due 6/15/2033(a) AAA Aaa 6,145 Stockton, California, Public Financing Authority, Lease Revenue 6,403 Bonds (Parking & Capital Projects), 5.125% due 9/01/2030(b) ------------------------------------------------------------------------------------------------------------------------------------ Colorado - 10.3% Boulder County, Colorado, Hospital Development Revenue Bonds (Longmont United Hospital Project)(j): AA Baa2 2,705 5.60% due 12/01/2015 2,945 AA Baa2 2,135 5.75% due 12/01/2020 2,354 Colorado HFA, Revenue Bonds, AMT: NR* Aa2 2,375 DRIVERS, Series 251, 11.514% due 4/01/2030(h) 2,530 NR* Aa2 235 (S/F Program), Senior Series A-1, 7.40% due 11/01/2027 244 NR* Aa2 1,085 Colorado HFA, Revenue Refunding Bonds (S/F Program), AMT, Senior 1,124 Series A-2, 7.50% due 4/01/2031 Colorado Health Facilities Authority Revenue Bonds, Series A: AA Aa2 1,200 (Catholic Health Initiatives), 5.50% due 3/01/2032 1,259 AA NR* 1,200 (Catholic Retirement Communities Inc.), 5.50% due 12/01/2027(j) 1,273 AA NR* 675 (Catholic Retirement Communities Inc.), 5.50% due 12/01/2033(j) 712 AAA Aaa 4,280 Colorado Water Resource Power Development Authority, Clean Water 4,982 Revenue Bonds, Series A, 6.25% due 9/01/2016 AAA Aaa 2,000 Denver, Colorado, City and County Airport Revenue Refunding Bonds, 2,232 AMT, Series A, 6% due 11/15/2018(a) AAA Aaa 5,450 El Paso County, Colorado, School District Number 49, Falcon, GO, 6,465 Series A, 6% due 12/01/2018(d) Northwest Parkway, Colorado, Public Highway Authority Revenue Bonds: AAA Aaa 9,450 Capital Appreciation Revenue Bonds, Senior Convertible, 7,308 Series C, 5.33%** due 6/15/2011(d) AAA Aaa 1,900 Series A, 5.50% due 6/15/2021(a) 2,123 ------------------------------------------------------------------------------------------------------------------------------------ Florida - 0.8% NR* Aaa 2,500 Escambia County, Florida, Health Facilities Authority, Health 2,562 Facility Revenue Bonds (Florida Health Care Facility Loan), 5.95% due 7/01/2020(a) ------------------------------------------------------------------------------------------------------------------------------------ Georgia - 9.8% AAA Aaa 18,655 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 19,786 Series B, 5.25% due 1/01/2033(d) AAA Aaa 3,500 Fulton County, Georgia, Water and Sewer Revenue Bonds, 5.25% 3,701 due 1/01/2035(b) AAA Aaa 7,725 Georgia Municipal Electric Authority, Power Revenue Refunding 10,379 Bonds, Series EE, 7% due 1/01/2025(a) ------------------------------------------------------------------------------------------------------------------------------------ Illinois - 20.8% NR* Aaa 5,125 Chicago, Illinois, Board of Education, GO, RIB, Series 467, 9.47% 6,277 due 12/01/2027(a)(h) AAA Aaa 3,750 Chicago, Illinois, Gas Supply Revenue Refunding Bonds (People's 3,911 Gas Light & Coke), Series A, 6.10% due 6/01/2025(a) Chicago, Illinois, O'Hare International Airport Revenue Bonds, 3rd Lien, AMT, Series B-2: AAA Aaa 5,670 5.75% due 1/01/2023(d) 6,220 AAA Aaa 2,500 6% due 1/01/2029(c) 2,769
MuniEnhanced Fund, Inc. Schedule of Investments as of October 31, 2004 (continued) (in Thousands)
S&P Moody's Face State Ratings Ratings Amount Municipal Bonds Value ------------------------------------------------------------------------------------------------------------------------------------ Illinois (concluded) AAA NR* $ 4,550 Chicago, Illinois, O'Hare International Airport Revenue Refunding $ 5,471 Bonds, DRIVERS, AMT, Series 250, 9.409% due 1/01/2021(f)(h) AAA Aaa 3,000 Cook County, Illinois, Capital Improvement, GO, Series C, 5.50% 3,279 due 11/15/2026(a) AAA Aaa 2,240 Cook County, Illinois, Community College District No. 508, Chicago, 2,549 COP, Refunding, 8.75% due 1/01/2007(b) AAA Aaa 3,000 Illinois Health Facilities Authority, Revenue Refunding Bonds 3,233 (Servantcor Project), Series A, 6.375% due 8/15/2006(d)(g) Illinois Sports Facilities Authority, State Tax Supported Revenue Bonds(a): AAA Aaa 21,120 5.399%** due 6/15/2010 16,560 AAA Aaa 4,500 5% due 6/15/2032 4,609 AAA Aaa 3,000 Metropolitan Pier and Exposition Authority, Illinois, Dedicated 3,420 State Tax Revenue Refunding Bonds (McCormick Place Expansion), Series B, 5.75% due 6/15/2023(f) AAA Aaa 10,115 Regional Transportation Authority, Illinois, Revenue Bonds, 13,452 Series A, 7.20% due 11/01/2020(a) ------------------------------------------------------------------------------------------------------------------------------------ Indiana - 5.1% AAA Aaa 2,500 Brownsburg, Indiana, School Building Corporation, First Mortgage 2,767 Revenue Bonds (Brownsburg Community School), 5.55% due 2/01/2024(f) AAA Aaa 4,080 Hammond, Indiana, Multi-School Building Corporation, First 4,523 Mortgage Revenue Refunding Bonds, 6.125% due 7/15/2019(f) Indiana Transportation Finance Authority, Highway Revenue Bonds, Series A(b): AAA Aaa 4,250 5.25% due 6/01/2028 4,520 AAA Aaa 3,750 5.25% due 6/01/2029 3,979 AAA Aaa 1,500 Indianapolis, Indiana, Local Public Improvement Bond Bank Revenue 1,585 Bonds (Waterworks Project), Series A, 5.25% due 7/01/2033(f) ------------------------------------------------------------------------------------------------------------------------------------ Kansas - 1.1% Sedgwick and Shawnee Counties, Kansas, S/F Revenue Bonds (Mortgage-Backed Securities Program), AMT(e): NR* Aaa 1,050 Series A-1, 6.875% due 12/01/2026 1,073 AAA Aaa 1,755 Series A-1, 6.875% due 12/01/2026(f) 1,793 NR* Aaa 765 Series A-2, 7.60% due 12/01/2031 798 ------------------------------------------------------------------------------------------------------------------------------------ Louisiana - 4.0% AAA Aaa 6,000 Louisiana Local Government, Environmental Facilities, Community 6,914 Development Authority Revenue Bonds (Capital Projects and Equipment Acquisition), Series A, 6.30% due 7/01/2030(a) AAA Aaa 5,150 New Orleans, Louisiana, Ernest N. Morial Exhibit Hall Authority, 5,451 Special Tax, Sub-Series A, 5.25% due 7/15/2028(a) AAA Aaa 1,400 Terrebonne Parish, Louisiana, Hospital Service District Number 1, 1,505 Hospital Revenue Bonds (Terrebonne General Medical Center Project), 5.50% due 4/01/2033(a) ------------------------------------------------------------------------------------------------------------------------------------ Massachusetts - 5.2% AAA NR* 4,985 Massachusetts State Port Authority, Special Facilities Revenue 5,436 Bonds, DRIVERS, AMT, Series 501, 8.895% due 7/01/2009(a)(h) Massachusetts State Special Obligation Dedicated Tax Revenue Bonds(b): AAA Aaa 1,800 5.25% due 1/01/2028 1,914 AAA Aaa 10,000 5.25% due 1/01/2029 10,589 ------------------------------------------------------------------------------------------------------------------------------------ Michigan - 5.4% AAA Aaa 6,200 Detroit, Michigan, Water Supply System Revenue Bonds, Series B, 6,537 5.25% due 7/01/2032(f) AAA Aaa 2,200 Michigan Higher Education Student Loan Authority, Student Loan 2,316 Revenue Refunding Bonds, AMT, Series XVII-G, 5.20% due 9/01/2020(a)
MuniEnhanced Fund, Inc. Schedule of Investments as of October 31, 2004 (continued) (in Thousands)
S&P Moody's Face State Ratings Ratings Amount Municipal Bonds Value ------------------------------------------------------------------------------------------------------------------------------------ Michigan (concluded) Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds (Detroit Edison Company Project)(c): AAA Aaa $ 1,150 5.45% due 9/01/2029 $ 1,238 AAA Aaa 1,300 AMT, Series A, 5.50% due 6/01/2030 1,374 AAA Aaa 2,500 AMT, Series C, 5.65% due 9/01/2029 2,643 AAA Aaa 4,300 AMT, Series C, 5.45% due 12/15/2032 4,495 ------------------------------------------------------------------------------------------------------------------------------------ Mississippi - 0.8% AAA Aaa 2,400 Walnut Grove, Mississippi, Correctional Authority, COP, 6% 2,813 due 11/01/2009(a)(g) ------------------------------------------------------------------------------------------------------------------------------------ Nebraska - 0.5% A+ NR* 1,700 Washington County, Nebraska, Wastewater Facilities Revenue Bonds 1,832 (Cargill Inc. Project), AMT, 5.90% due 11/01/2027 ------------------------------------------------------------------------------------------------------------------------------------ Nevada - 8.2% AA NR* 3,100 Carson City, Nevada, Hospital Revenue Bonds, (Carson-Tahoe 3,277 Hospital Project), Series A, 5.50% due 9/01/2033(j) Clark County, Nevada, Airport System Subordinate Lien Revenue Bonds(b): AAA Aaa 1,500 Series A-2, 5% due 7/01/2030 1,536 AAA Aaa 3,200 Series A-2, 5% due 7/01/2036 3,257 AAA Aaa 2,000 Series B, 5.25% due 7/01/2034 2,082 Director of the State of Nevada, Department of Business and Industry Revenue Bonds (Las Vegas Monorail Company Project), First Tier(a): AAA Aaa 750 5.625% due 1/01/2032 828 AAA Aaa 3,280 5.375% due 1/01/2040 3,400 AAA Aaa 10,450 Washoe County, Nevada, Gas and Water Facilities Revenue Refunding 10,742 Bonds (Sierra Pacific Power Company), 6.30% due 12/01/2014(a) AAA Aaa 3,000 Washoe County, Nevada, Water Facility Revenue Bonds (Sierra 3,106 Pacific Power Company), AMT, 6.65% due 6/01/2017(f) ------------------------------------------------------------------------------------------------------------------------------------ New Hampshire - 2.3% AAA Aaa 7,390 New Hampshire Health and Education Facilities Authority Revenue 8,058 Bonds (Dartmouth-Hitchcock Obligation Group, 5.50% due 8/01/2027(d) ------------------------------------------------------------------------------------------------------------------------------------ New Jersey - 10.6% New Jersey EDA, Cigarette Tax Revenue Bonds: BBB Baa2 3,250 5.50% due 6/15/2024 3,323 AAA Aa2 2,000 5.50% due 6/15/2024 2,143 BBB Baa2 700 5.50% due 6/15/2031 704 BBB Baa2 1,165 5.75% due 6/15/2034 1,196 New Jersey EDA, Motor Vehicle Surcharge Revenue Bonds, Series A(f): AAA Aaa 2,600 5% due 7/01/2029 2,695 AAA Aaa 7,250 5.25% due 7/01/2031 7,707 AAA Aaa 5,200 5.25% due 7/01/2033 5,524 New Jersey EDA, Revenue Bonds, ROLS(h): AAA NR* 5,000 Series II-R-309-1, 9.136% due 6/15/2024 5,712 AAA NR* 2,500 Series II-R-309-2, 9.136% due 6/15/2031 2,811 A-1+ VMIG-1 + 4,800 New Jersey State Turnpike Authority, Turnpike Revenue Bonds, VRDN, 4,800 Series C-3, 1.75% due 1/01/2024(d)(l) ------------------------------------------------------------------------------------------------------------------------------------
MuniEnhanced Fund, Inc. Schedule of Investments as of October 31, 2004 (continued) (in Thousands)
S&P Moody's Face State Ratings Ratings Amount Municipal Bonds Value ------------------------------------------------------------------------------------------------------------------------------------ New York - 9.8% New York City, New York, GO, DRIVERS (h): AAA NR* $ 1,500 Series 194, 9.461% due 2/01/2015(d) $ 1,685 AAA NR* 6,960 Series 356, 8.942% due 6/01/2011(c) 8,661 New York City, New York, GO, Refunding: AAA A2 3,890 Series A, 6.375% due 5/15/2010(b) 4,637 AAA A2 2,745 Series A, 6.375% due 5/15/2013(b) 3,223 AAA A2 1,620 Series A, 6.375% due 5/15/2014(b) 1,902 AAA A2 1,675 Series A, 6.375% due 5/15/2015(b) 1,966 AAA Aaa 2,000 Series L, 5.75% due 8/01/2013(c) 2,192 AAA Aaa 3,290 New York City, New York, GO, Series E, 5.75% due 5/15/2018(c) 3,748 AAA Aaa 5,400 Tobacco Settlement Financing Corporation of New York Revenue 5,813 Bonds, Series A-1, 5.25% due 6/01/2022(a) ------------------------------------------------------------------------------------------------------------------------------------ Ohio - 0.8% AAA Aaa 2,500 North Canton, Ohio, City School District GO, 6.70% 2,561 due 12/01/2004(a)(g) ------------------------------------------------------------------------------------------------------------------------------------ Pennsylvania - 5.9% AAA Aaa 600 Allegheny County, Pennsylvania, Sanitation Authority, Sewer 654 Revenue Bonds, 5.50% due 12/01/2030(f) AAA Aaa 5,500 Pennsylvania State Public School Building Authority, School Lease 5,639 Revenue Bonds (The School District of Philadelphia Project), 5% due 6/01/2033(d) AAA Aaa 6,500 Philadelphia, Pennsylvania, Authority for Industrial Development, 7,288 Lease Revenue Bonds, Series B, 5.50% due 10/01/2020(d) AAA Aaa 4,500 Philadelphia, Pennsylvania, School District, GO, Series B, 5.625% 4,993 due 8/01/2020(b) AAA Aaa 1,750 Washington County, Pennsylvania, Capital Funding Authority Revenue 1,833 Bonds (Capital Projects and Equipment Program), 6.15% due 12/01/2029(a) ------------------------------------------------------------------------------------------------------------------------------------ Rhode Island - 2.6% AAA Aaa 4,345 Providence, Rhode Island, Public Building Authority, General 5,118 Revenue Bonds, Series A, 6.25% due 12/15/2020(d) AAA Aaa 3,355 Rhode Island State Economic Development Corporation, Airport 3,947 Revenue Bonds, Series B, 6.50% due 7/01/2015(b) ------------------------------------------------------------------------------------------------------------------------------------ South Carolina - 0.8% AA Aa3 1,590 South Carolina Educational Facilities Authority for Private 1,713 Nonprofit Institutions Revenue Bonds (The Benedict College), 5.625% due 7/01/2031(j) NR* Aaa 890 South Carolina Housing Finance and Development Authority, Mortgage 905 Revenue Refunding Bonds, AMT, Series A-2, 5.875% due 7/01/2009(d) ------------------------------------------------------------------------------------------------------------------------------------ South Dakota - 2.3% AAA Aaa 7,000 South Dakota State Health and Educational Facilities Authority, 7,980 Revenue Refunding Bonds, Series A, 7.625% due 1/01/2008(f)(g) ------------------------------------------------------------------------------------------------------------------------------------ Tennessee - 0.7% AAA Aaa 2,280 Tennessee HDA, Revenue Refunding Bonds (Homeownership Program), 2,369 AMT, Series 1, 5.95% due 7/01/2012(f) ------------------------------------------------------------------------------------------------------------------------------------ Texas - 8.1% AAA Aaa 1,615 Bexar, Texas, Metropolitan Water District, Waterworks System 1,682 Revenue Refunding Bonds, 6.35% due 5/01/2025(f) Dallas-Fort Worth, Texas, International Airport Revenue Bonds, DRIVERS, AMT(h): AAA NR* 2,000 Series 202, 9.911% due 11/01/2028(b) 2,389 AAA NR* 7,250 Series 353, 8.895% due 5/01/2011(f) 8,039 AAA Aaa 900 Houston, Texas, Airport System, Revenue Refunding Bonds, Sub-Lien, 974 Series B, 5.50% due 7/01/2030(d)
MuniEnhanced Fund, Inc. Schedule of Investments as of October 31, 2004 (continued) (in Thousands)
S&P Moody's Face State Ratings Ratings Amount Municipal Bonds Value ------------------------------------------------------------------------------------------------------------------------------------ Texas (concluded) AAA Aaa $ 6,250 Texas State Turnpike Authority, Central Texas Turnpike System $ 6,747 Revenue Bonds, First Tier, Series A, 5.50% due 8/15/2039(a) AAA Aaa 5,200 Travis County, Texas, Health Facilities Development Corporation 6,788 Revenue Refunding Bonds, RITR, Series 4, 9.563% due 11/15/2024(a)(h) AAA Aaa 1,000 University of Houston, Texas, University Revenue Bonds, 5.50% 1,086 due 2/15/2030(f) ------------------------------------------------------------------------------------------------------------------------------------ Virginia - 4.0% AAA Aaa 10,000 Fairfax County, Virginia, EDA, Resource Recovery Revenue Refunding 11,347 Bonds, AMT, Series A, 6.10% due 2/01/2010(a) AAA Aaa 2,300 Halifax County, Virginia, IDA, Exempt Facility Revenue Refunding 2,495 Bonds (Old Dominion Electric Cooperative Project), AMT, 5.625% due 6/01/2028(a) ------------------------------------------------------------------------------------------------------------------------------------ Washington - 3.6% AAA Aaa 2,150 King County, Washington, Sewer Revenue Refunding Bonds, Series B, 2,329 5.50% due 1/01/2027(d) AAA Aaa 2,000 Snohomish County, Washington, Public Utility District Number 001, 2,174 Electric Revenue Refunding Bonds, 5.375% due 12/01/2024(d) AAA Aaa 7,000 Washington State, GO, Series A and AT-6, 6.25% due 2/01/2011(f) 8,052 ------------------------------------------------------------------------------------------------------------------------------------ Wisconsin - 0.8% AA- Aa3 2,500 Madison, Wisconsin IDR (Madison Gas & Electric Co.), Refunding, 2,682 AMT, Series A, 5.875% due 10/01/2034 ------------------------------------------------------------------------------------------------------------ Total Municipal Bonds (Cost - $490,794) - 151.8% 523,000 ============================================================================================================ Shares Held Short-Term Securities ------------------------------------------------------------------------------------------------------------------------------------ 8,701 Merrill Lynch Institutional Tax-Exempt Fund(i) 8,701 ------------------------------------------------------------------------------------------------------------ Total Short-Term Securities (Cost - $8,701) - 2.5% 8,701 ============================================================================================================ Total Investments (Cost - $499,495++) - 154.3% 531,701 Liabilities in Excess of Other Assets - 0.0% (167) Preferred Stock, at Redemption Value - (54.3%) (187,024) ---------- Net Assets Applicable to Common Stock - 100.0% $ 344,510 ==========
(a) AMBAC Insured. (b) FGIC Insured. (c) XL Capital Insured. (d) FSA Insured. (e) GNMA Collateralized. (f) MBIA Insured. (g) Prerefunded. (h) The interest rate is subject to change periodically and inversely based upon prevailing market rates. The interest rate shown is the rate in effect at October 31, 2004. (i) Investments in companies considered to be an affiliate of the Fund (such companies are defined as "Affiliated Companies" in Section 2(a)(3) of the Investment Company Act of 1940) were as follows: (in Thousands) -------------------------------------------------------------------------- Net Dividend Affiliate Activity Income -------------------------------------------------------------------------- Merrill Lynch Institutional Tax-Exempt Fund 1,800 $ 47 -------------------------------------------------------------------------- MuniEnhanced Fund, Inc. Schedule of Investments as of October 31, 2004 (continued) (j) Radian Insured. (k) CIFG Insured. (l) The interest rate is subject to change periodically based upon prevailing market rates. The interest rate shown is the rate in effect at October 31, 2004. * Not Rated. ** Represents a step bond; the interest rate shown reflects the effective yield at the time of purchase by the Fund. + Highest short-term rating by Moody's Investors Services, Inc. ++ The cost and unrealized appreciation/depreciation of investments as of October 31, 2004, as computed for federal income tax purposes, were as follows: (in Thousands) -------------------------------------------------------------------------- Aggregate cost $ 499,495 ========= Gross unrealized appreciation $ 32,948 Gross unrealized depreciation (742) --------- Net unrealized appreciation $ 32,206 ========= Forward interest rate swaps outstanding as of October 31, 2004 were:
(in Thousands) ----------------------------------------------------------------------------------- Notional Unrealized Amount Depreciation ----------------------------------------------------------------------------------- Receive a variable rate equal to 7-Day Bond Market Association Municipal Swap Index Rate and pay a fixed rate of 4.156% interest Broker, J.P. Morgan Chase Bank Expires December, 2024 $ 30,000 $ (642) Receive a variable rate equal to 7-Day Bond Market Association Municipal Swap Index Rate and pay a fixed rate of 3.599% interest Broker, J.P. Morgan Chase Bank Expires December, 2014 $ 20,000 (254)
MuniEnhanced Fund, Inc. Schedule of Investments as of October 31, 2004 (concluded) Forward interest rate swaps outstanding as of October 31, 2004 were (concluded):
(in Thousands) ----------------------------------------------------------------------------------- Notional Unrealized Amount Depreciation ----------------------------------------------------------------------------------- Receive a variable rate equal to 7-Day Bond Market Association Municipal Swap Index Rate and pay a fixed rate of 4.073% interest Broker, Morgan Stanley Capital Services, Inc. Expires March, 2025 $ 20,000 $ (35) Receive a variable rate equal to 7-Day Bond Market Association Municipal Swap Index Rate and pay a fixed rate of 3.523% interest Broker, J.P. Morgan Chase Bank Expires January, 2015 $ 15,000 (61) ----------------------------------------------------------------------------------- Total $ (992) ========
Item 2 - Controls and Procedures 2(a) - The registrant's certifying officers have reasonably designed such disclosure controls and procedures to ensure material information relating to the registrant is made known to us by others particularly during the period in which this report is being prepared. The registrant's certifying officers have determined that the registrant's disclosure controls and procedures are effective based on our evaluation of these controls and procedures as of a date within 90 days prior to the filing date of this report. 2(b) - There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the last fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 3 - Exhibits Certifications - Attached hereto 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. MuniEnhanced Fund, Inc. By: /s/ Terry K. Glenn ---------------------------- Terry K. Glenn, President MuniEnhanced Fund, Inc. Date: December 20, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Terry K. Glenn ---------------------------- Terry K. Glenn President MuniEnhanced Fund, Inc. Date: December 20, 2004 By: /s/ Donald C. Burke ---------------------------- Donald C. Burke Chief Financial Officer MuniEnhanced Fund, Inc. Date: December 20, 2004