-----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, O4TNL79suQDOQVdYpq5Boa+y1K9tvTqS9Buu/Neh8ReO/ceHAexrSnJjLEO5OHW8 1BLBcFIUtOKUGNKhN3y9IQ== 0000950137-03-003625.txt : 20030630 0000950137-03-003625.hdr.sgml : 20030630 20030630161133 ACCESSION NUMBER: 0000950137-03-003625 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030430 FILED AS OF DATE: 20030630 EFFECTIVENESS DATE: 20030630 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VAN KAMPEN MUNICIPAL TRUST CENTRAL INDEX KEY: 0000877463 IRS NUMBER: 363779776 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-06362 FILM NUMBER: 03764560 BUSINESS ADDRESS: STREET 1: ONE PARKVIEW PLZ STREET 2: VAN KAMPEN INVESTMETNS INC CITY: OAKBROOK TERRACE STATE: IL ZIP: 60181 BUSINESS PHONE: 6306846774 MAIL ADDRESS: STREET 1: VAN KAMPEN INVESTMETNS INC STREET 2: ONE PARKVIEW PLAZA CITY: OAKBROOK TERRACE STATE: IL ZIP: 60181 FORMER COMPANY: FORMER CONFORMED NAME: VAN KAMPEN AMERICAN CAPITAL MUNICIPAL TRUST DATE OF NAME CHANGE: 19960102 FORMER COMPANY: FORMER CONFORMED NAME: VAN KAMPEN MERRITT MUNICIPAL TRUST DATE OF NAME CHANGE: 19920929 FORMER COMPANY: FORMER CONFORMED NAME: VAN KAMPEN MERRITT QUALITY MUNICIPAL TRUST DATE OF NAME CHANGE: 19600201 N-CSR 1 c77313nvcsr.txt SEMIANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-6362 Van Kampen Municipal Trust - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 1221 Avenue of the Americas NY NY 10020 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Ronald Robison 1221 Avenue of the Americas New York, NY 10020 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 212-762-4000 ----------------------------- Date of fiscal year end: 10/31/03 ----------- Date of reporting period: 04/30/03 ----------- Item 1. Report to Shareholders PERFORMANCE SUMMARY RETURN HIGHLIGHTS (as of April 30, 2003) - ------------------------------ NYSE Ticker Symbol - VKQ - ------------------------------
- ----------------------------------------------------------------------- Six-month total return(1) 8.67% - ----------------------------------------------------------------------- One-year total return(1) 16.04% - ----------------------------------------------------------------------- Five-year average annual total return(1) 6.28% - ----------------------------------------------------------------------- Ten-year average annual total return(1) 6.08% - ----------------------------------------------------------------------- Life-of-Trust average annual total return(1) 7.05% - ----------------------------------------------------------------------- Commencement date 09/27/91 - ----------------------------------------------------------------------- Distribution rate as a % of closing common share market price(2) 6.22% - ----------------------------------------------------------------------- Taxable-equivalent distribution rate as a % of closing common share market price(3) 10.13% - ----------------------------------------------------------------------- Preferred share (Series A) rate(4) 1.250% - ----------------------------------------------------------------------- Preferred share (Series B) rate(4) 1.060% - ----------------------------------------------------------------------- Preferred share (Series C) rate(4) 1.049% - ----------------------------------------------------------------------- Preferred share (Series D) rate(4) 1.200% - ----------------------------------------------------------------------- Net asset value $16.50 - ----------------------------------------------------------------------- Closing common share market price $15.05 - ----------------------------------------------------------------------- Six-month high common share market price (04/30/03) $15.05 - ----------------------------------------------------------------------- Six-month low common share market price (11/26/02) $13.84 - -----------------------------------------------------------------------
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE 1 (1) Total return assumes an investment at the common share market price at the beginning of the period indicated, reinvestment of all distributions for the period in accordance with the Trust's dividend reinvestment plan, and sale of all shares at the closing common share market price at the end of the period indicated. (2) Distribution rate represents the monthly annualized distributions of the Trust at the end of the period and not the earnings of the Trust. (3) The taxable-equivalent distribution rate is calculated assuming the maximum 38.6% combined federal and state tax bracket effective for calendar year 2003, which takes into consideration the deductibility of individual state taxes paid. (4) See "Notes to Financial Statements" footnote #5, for more information concerning Preferred Share reset periods. A portion of the interest income may be taxable for those investors subject to the federal alternative minimum tax (AMT). Past performance is no guarantee of future results. Investment return, common share market price and net asset value will fluctuate and Trust shares, when sold, may be worth more or less than their original cost. An investment in the Trust is subject to investment risks, and you could lose money on your investment in the Trust. As a result of recent market activity, current performance may vary from the figures shown. For more up-to-date information, please visit vankampen.com or speak with your financial advisor. 2 PORTFOLIO AT A GLANCE CREDIT QUALITY (as a percentage of long-term investments)
As of April 30, 2003 AAA/Aaa........................... 64.6% AA/Aa............................. 13.2% A/A............................... 8.2% BBB/Baa........................... 6.1% BB/Ba............................. 1.6% B/B............................... 0.1% Non-Rated......................... 6.2%
TOP FIVE SECTORS (as a percentage of long-term investments)
As of April 30, 2003 General Purpose................... 16.7% Public Education.................. 11.2% Health Care....................... 10.5% Transportation.................... 9.7% Higher Education.................. 7.9%
Based upon the credit quality ratings as issued by Standard & Poor's Credit Market Services/Moody's Investor Services, respectively. Subject to change daily. NET ASSET VALUE AND COMMON SHARE MARKET PRICE (based upon quarter-end values--April 1993 through April 2003) [LINE GRAPH]
NET ASSET VALUE COMMON SHARE MARKET PRICE --------------- ------------------------- 4/93 $16.6800 $16.5000 6/93 $16.8600 $16.2500 $17.2600 $16.6250 $17.2700 $16.5000 $15.5300 $14.8750 6/94 $15.3900 $15.1250 $15.1300 $14.3750 $14.4800 $13.0000 $15.7200 $14.8750 6/95 $15.5000 $14.3750 $15.7600 $14.0000 $16.5600 $14.1250 $15.9900 $14.1250 6/96 $15.8000 $14.0000 $16.0200 $14.5000 $16.2700 $13.8750 $15.9600 $14.1250 6/97 $16.3900 $15.0625 $16.7700 $15.6875 $17.0900 $16.1875 $17.0900 $15.8120 6/98 $17.0400 $16.1250 $17.5100 $17.0000 $16.8200 $16.9375 $16.5500 $16.3125 6/99 $15.7100 $15.1875 $15.0300 $13.9375 $14.3900 $12.7500 $14.6400 $12.8750 6/00 $14.5800 $13.3750 $14.8200 $12.8750 $15.4700 $13.0625 $15.6000 $13.7800 6/01 $15.4600 $13.6100 $15.8500 $13.7500 $15.4000 $13.4200 $15.2600 $13.5900 6/02 $15.8500 $14.7300 $16.7600 $15.2900 $16.3700 $14.4500 $16.3500 $14.6600 4/03 $16.5000 $15.0500
The solid line above represents the trust's net asset value (NAV), which indicates overall changes in value among the trust's underlying securities. The trust's common share market price is represented by the dashed line, which indicates the price the market is willing to pay for shares of the trust at a given time. Common share market price is influenced by a range of factors, including supply and demand and market conditions. 3 Q&A WITH YOUR PORTFOLIO MANAGERS WE RECENTLY SPOKE WITH THE MANAGEMENT TEAM OF THE VAN KAMPEN MUNICIPAL TRUST ABOUT THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED THE MARKETS AND INFLUENCED THE TRUST'S RETURN DURING THE SIX MONTHS ENDED APRIL 30, 2003. TOM BYRON, PORTFOLIO MANAGER, HAS MANAGED THE TRUST SINCE 2000 AND HAS WORKED IN THE INVESTMENT INDUSTRY SINCE 1981. THE FOLLOWING DISCUSSION REFLECTS HIS VIEWS ON THE TRUST'S PERFORMANCE. Q WHAT WAS THE MARKET ENVIRONMENT OF THE PAST SIX MONTHS, AND HOW DID THE TRUST PERFORM IN THAT ENVIRONMENT? A The environment over the past six months has been defined by two major themes. The first of these was the level of interest rates. The period began with interest rates at levels not seen in over three decades and, surprisingly for many, ended with rates slightly lower. The Federal Reserve Board (the Fed) helped keep rates low with a widely anticipated rate cut in November, driven by economic uncertainty and geopolitical risk. The low level of rates led to a boom in issuance by municipalities seeking to lock in low financing costs. As a result, issuance reached a record level of $354 billion in 2002 and continued to be exceptional in the first quarter of 2003. The other theme in the market during the period was the relative attractiveness of municipal bonds, which produced enough demand to absorb the record issuance. Investors wary of volatility in the equity market and in the geopolitical arena flocked to perceived safe haven investments. Their risk aversion counteracted growing expectations for economic recovery and rising interest rates and was a key factor in keeping interest rates at historically low levels. In their ongoing preference for low-risk assets, investors bid Treasury prices up to such high levels that municipal bonds became as attractively valued as they have ever been relative to Treasuries. Insurance companies also moved heavily into municipal bonds as their mainstay corporate bond holdings became less attractive. At the same time, issuers recognized investor concerns over economic weakness by insuring roughly 50 percent of all issuance. This credit enhancement feature made municipal bonds even more attractive to risk-averse investors. While lower financing costs were a boon to municipal issuers, the continuing weakness in the economy had a negative impact on municipal credit quality, particularly in the first quarter of 2003. Moody's upgrades barely exceeded the number of downgrades in the first quarter, with credit quality facing continued pressure from rising social service costs and weak national and regional economic conditions. As a result, municipalities 4 face enormous deficits in 2003, when their combined shortfall is expected to reach $90 billion. Performance along the yield curve was varied. The Fed's November rate cut fueled a rally in short-term bonds that helped pull yields lower at the front end of the curve. Despite that rally, the best performing segment of the curve was the long-intermediate portion, where performance was largely driven by buying activity among institutional investors drawn to the bonds' attractive total return potential. The trust's monthly dividend of $0.0780 per share translated to a distribution rate of 6.22 percent based on the trust's closing common share market price on April 30, 2003. Based on these figures, investors would have to earn a distribution rate of 10.13 percent on a taxable investment (for an investor in the 38.60 percent federal income tax bracket) to match the tax-exempt yield provided by the trust. For the six months ended April 30, 2003, the trust produced a total return of 8.67 percent based on common share market price. By comparison, the Lehman Brothers Municipal Bond Index posted a total return of 3.59 percent for the same period. Of course, past performance is no guarantee of future results. Investment return, common share market price and net asset value will fluctuate and trust shares, when sold, may be worth more or less than their original cost. As a result of recent market activity, current performance may vary from the figures shown. For more up-to-date information, please visit vankampen.com or speak with your financial advisor. The Lehman Brothers Municipal Bond Index is an unmanaged, broad-based statistical composite of municipal bonds. Index returns do not include any sales charges or fees that would be paid by an investor purchasing the securities the index represents. Such costs would lower performance. It is not possible to invest directly in an index. For additional information, please refer to the performance summary section. Q WHAT STRATEGIES DID YOU PURSUE IN MANAGING THE TRUST? A While interest rates fell somewhat during the period, they remained largely confined to a relatively tight trading range at historically low levels. As a result, there were fewer compelling opportunities for reinvesting the proceeds of sales from the portfolio than we've seen in some time. This kept the portfolio's turnover relatively low as we attempted to protect the trust's dividend by limiting the likelihood of having to reinvest in lower-yielding securities. Overall, our focus over the period was on positioning the portfolio to perform well in the event of rising interest rates, while also maintaining an attractive yield. One of our primary methods for doing this was to purchase premium bonds with maturities of between 15 and 20 years and a shorter call date. The yield of these bonds is competitive, yet their interest rate volatility is more closely related to the 10-year call feature. Our quantitative analysis showed that this segment of the yield curve offered the optimal combination of total return potential and downside protection. 5 Our approach also continued to emphasize active trading of highly liquid bonds to capture shifts in relative value between various sectors and state markets. For example, California was a major issuer of debt during the period, and issued so much that prices for the state's debt temporarily dropped due to the influx of supply. We took advantage of this issuance by purchasing several well-structured deals for the portfolio. We anticipate that these bonds will return to fair value, and when they do we may consider selling them. The portfolio also enjoyed the fruits of a long-running strategy during the period. Several years ago, we purchased some securities that were at the time deeply discounted, with coupons well below the market rate. They were so out of favor that we were able to purchase them at extremely attractive prices. As interest rates have fallen over the intervening years, however, the bonds have come closer and closer to being current coupons. Their falling yields gave the portfolio a substantial boost in terms of price performance, and once the bonds met their performance objectives we sold them into strong retail demand. We reinvested the proceeds into premium intermediate and other securities with better total return prospects. The troubled economy led us to trim some of the portfolio's holdings, and to avoid some sectors altogether. In the course of their credit monitoring, our analysts came to the conclusion that one particular health care holding was likely to experience credit--and thus price--performance difficulties. We sold the position in order to protect shareholders from any deterioration in the issuer's financial health. We also eliminated the trust's exposure to the troubled airline sector. One of the sectors we avoided during the period was tobacco bonds. These bonds were issued by states seeking to securitize their future income streams resulting from settlements from class action suits against the major tobacco companies. Recent litigation in Illinois resulted in a judge awarding billions more in a suit alleging that the companies misled smokers about the amount of nicotine in "light" cigarettes. In order to appeal, the law required the companies to put up such substantial amounts of money that some began talking about potential bankruptcy, and the tobacco bonds' credit ratings and price performance suffered accordingly. Our decision not to invest in these securities was a benefit to shareholders during the period. 6 BY THE NUMBERS YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited) THE FOLLOWING PAGES DETAIL YOUR TRUST'S PORTFOLIO OF INVESTMENTS AT THE END OF THE REPORTING PERIOD.
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE MUNICIPAL BONDS 148.2% ALABAMA 4.0% $ 1,790 Alabama St Univ Rev Gen Tuition & Fee Ser B (MBIA Insd)................................. 5.250% 03/01/28 $ 1,884,440 1,000 Birmingham Baptist Med Ctr AL Baptist Hlth Sys Ser A................................... 5.875 11/15/24 1,055,630 7,950 Jefferson Cnty, AL Swr Rev Cap Impt Wt Ser A (FGIC Insd) (a)............................. 5.000 02/01/41 8,036,496 8,000 Jefferson Cnty, AL Swr Rev Cap Impt Wt Ser B (FGIC Insd) (a)............................. 5.125 02/01/42 8,184,000 2,000 Jefferson Cnty, AL Wts Ser A (AMBAC Insd)... 5.000 04/01/09 2,235,320 2,435 Marshall Cnty, AL Hlthcare Ser C............ 6.000 01/01/32 2,561,523 ------------ 23,957,409 ------------ ALASKA 0.2% 1,000 Alaska St Intl Arpt Rev Ser B (AMBAC Insd)....................................... 5.750 10/01/17 1,136,610 ------------ ARIZONA 2.7% 1,425 Arizona Cap Fac Fin Corp Student Hsg Rev AZ St Univ Proj................................ 6.250 09/01/32 1,505,313 1,000 Arizona Hlth Fac Auth Hosp John C Lincoln Hlth Network................................ 6.375 12/01/37 1,036,540 1,750 Arizona Sch Fac Brd Ctf Part Ser A (MBIA Insd)....................................... 5.250 09/01/17 1,931,597 4,250 Arizona St Trans Brd Hwy Rev Sub Ser A Rfdg........................................ 4.750 07/01/11 4,478,097 2,500 Maricopa Cnty, AZ Indl Dev Auth Ed Rev AZ Charter Sch Proj 1 Ser A.................... 6.750 07/01/29 2,479,975 4,375 Salt River Proj AZ Agric Impt Salt River Proj Ser A Rfdg............................. 5.250 01/01/06 4,791,194 ------------ 16,222,716 ------------
See Notes to Financial Statements 7 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE ARKANSAS 0.3% $ 1,565 Fort Smith, AR Wtr & Swr Rev Ser C (FSA Insd)....................................... 5.000% 10/01/21 $ 1,650,918 ------------ CALIFORNIA 9.3% 4,000 Anaheim, CA Pub Fin Auth Lease Rev Cap Apprec Sub Pub Impts Proj C (FSA Insd)...... * 09/01/20 1,709,280 2,500 Anaheim, CA Un High Sch Dist Ser A (FSA Insd)....................................... 5.000 08/01/25 2,586,875 5,010 California Ed Fac Auth Rev Cap Apprec Loyola Marymount Univ (Prerefunded @ 10/01/09) (MBIA Insd)................................. * 10/01/21 1,966,375 350 California Hlth Fac Fin Auth Rev Casa De Las Ser A (MBIA Insd)........................... 5.250 08/01/17 379,260 1,250 California St Dept Wtr Res Pwr Ser A........ 6.000 05/01/15 1,442,612 4,000 California St Dept Wtr Res Pwr Ser A (AMBAC Insd)....................................... 5.375 05/01/18 4,422,800 1,000 California St Pub Wks Brd UCLA Replacement Hosp Ser A (FSA Insd)....................... 5.375 10/01/20 1,091,000 5,000 California St Univ Rev Systemwide Ser A (AMBAC Insd)................................ 5.000 11/01/23 5,228,950 2,650 California Statewide Cmnty Dev Auth Ctf Part (b)......................................... 7.250 11/01/29 2,760,717 5,000 Contra Costa, CA Home Mtg Fin Auth Home Mtg Rev (Escrowed to Maturity) (MBIA Insd)...... * 09/01/17 2,517,600 1,000 Davis, CA Pub Fac Fin Auth Mace Ranch Area Ser A....................................... 6.600 09/01/25 1,056,560 1,650 Del Mar, CA Race Track Auth Rev Rfdg........ 6.000 08/15/06 1,733,308 18,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap Apprec Rfdg (MBIA Insd)................. * 01/15/25 5,303,880 27,810 Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap Apprec Rfdg............................. * 01/15/33 4,829,206 6,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap Apprec Sr Lien Ser A (Escrowed to Maturity)................................... * 01/01/18 3,121,260 2,240 Huntington Park, CA Redev Agy Rev Tax Alloc Santa Fe Redev Rfdg......................... 6.200 10/01/27 2,343,533 2,000 Los Angeles, CA Uni Sch Dist Ser A (MBIA Insd)....................................... 5.375 07/01/18 2,235,780
See Notes to Financial Statements 8 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE CALIFORNIA (CONTINUED) $ 4,400 Los Angeles, CA Uni Sch Dist Ser A (MBIA Insd)....................................... 5.250% 07/01/19 $ 4,822,840 5,585 Sacramento, CA City Fin Auth Rev Comb Proj B (MBIA Insd)................................. * 11/01/14 3,394,842 1,375 San Bernadino, CA Jt Pwr Fin Auth Alloc Rev Central City Merged Proj A Rfdg (AMBAC Insd)....................................... 5.750 07/01/20 1,629,114 1,000 Stockton, CA Cmnty Fac Dist Spl Tax No 1-A Mello Roos-Weston Ranch Ser A (a)........... 5.800 09/01/14 1,061,610 ------------ 55,637,402 ------------ COLORADO 2.0% 1,000 Colorado Hlth Fac Auth Rev Catholic Hlth Initiatives Ser A........................... 5.500 03/01/32 1,029,890 1,125 Colorado Hlth Fac Auth Rev Hosp Portercare Adventist Hlth.............................. 6.500 11/15/31 1,226,779 2,200 La Plata Cnty, CO Sch Dist 9-R Durango (MBIA Insd)....................................... 5.250 11/01/21 2,358,972 6,365 Platte Riv Pwr Auth CO Pwr Rev Ser EE....... 5.375 06/01/16 7,095,320 ------------ 11,710,961 ------------ CONNECTICUT 5.5% 7,140 Connecticut St Hlth & Ed Fac Auth Rev Nursing Home Proj AHF/Hartford (Prerefunded @ 11/01/04)................................. 7.125 11/01/24 7,908,407 2,840 Connecticut St Spl Oblig Pkg Rev Bradley Intl Arpt Ser A (ACA Insd).................. 6.600 07/01/24 3,074,442 3,450 Connecticut St Spl Tax Oblig Ser B (Prerefunded @ 10/01/04) (FGIC Insd)........ 6.200 10/01/13 3,728,760 6,500 Mashantucket Western Pequot Tribe CT Spl Rev Ser B, 144A-Private Placement (c)........... 5.750 09/01/18 6,750,770 3,500 Mashantucket Western Pequot Tribe CT Spl Rev Ser B, 144A-Private Placement (c)........... 5.750 09/01/27 3,575,985 3,540 Mashantucket Western Pequot Tribe CT Spl Rev Ser A, 144A-Private Placement (c)........... 6.400 09/01/11 3,823,837 3,460 Mashantucket Western Pequot Tribe CT Spl Rev Ser A, 144A-Private Placement (Prerefunded @ 09/01/07) (c)............................... 6.400 09/01/11 4,038,650 ------------ 32,900,851 ------------ DELAWARE 0.3% 1,505 Delaware St Hsg Auth Rev Sr Home Mtg Ser B SubSer B2................................... 7.200 12/01/21 1,522,458 ------------
See Notes to Financial Statements 9 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE DISTRICT OF COLUMBIA 1.0% $ 1,000 District of Columbia Hosp Rev Medlantic Hlthcare Group A Rfdg (Escrowed to Maturity) (MBIA Insd) (a)............................. 5.875% 08/15/19 $ 1,124,150 5,000 Metropolitan Washington DC Arpt Auth Sys Ser A (FGIC Insd)............................... 5.125 10/01/26 5,070,650 ------------ 6,194,800 ------------ FLORIDA 9.6% 3,380 Brevard Cnty, FL Hlth Fac Hlth First Inc Proj (MBIA Insd)............................ 5.125 04/01/31 3,497,252 2,550 Broward Cnty, FL Wtr & Swr Util Rfdg (MBIA Insd)....................................... 5.000 10/01/20 2,715,087 3,750 Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC Insd)....................................... 5.950 07/01/20 4,110,525 1,000 Florida St Brd Ed Lottery Rev Ser A (FGIC Insd)....................................... 5.750 07/01/11 1,160,710 3,000 Florida St Dept Environmental Protection Preservation Rev Ser A (FGIC Insd).......... 5.750 07/01/10 3,505,320 1,895 Gulf Breeze, FL Rev Loc Govt (Variable Rate Coupon) (FGIC Insd)......................... 5.625 12/01/20 2,113,096 1,255 Gulf Breeze, FL Rev Venice Loc Govt (FGIC Insd) (d)................................... 5.050 12/01/20 1,370,334 2,310 Hillsborough Cnty, FL Indl Dev Auth Andl Dev Rev Hlth Fac Proj Univ Cmnty Hosp Ser A..... 5.500 08/15/14 2,357,725 1,000 Hillsborough Cnty, FL Indl Dev Auth Indl Dev Rev Univ Cmnty Hosp (MBIA Insd)............. 5.750 08/15/14 1,044,730 1,000 Hillsborough Cnty, FL Util Jr Lien Rfdg (AMBAC Insd)................................ 5.000 08/01/06 1,104,140 1,000 Jea, FL Elec Sys Rev Ser 3 Ser A............ 5.500 10/01/41 1,075,010 1,000 Lake Cnty, FL Sch Brd Ctf Part (AMBAC Insd)....................................... 5.375 07/01/15 1,126,290 615 Lakeland, FL Hosp Sys Rev Lakeland Regl Hlth Sys......................................... 5.500 11/15/32 625,566 1,515 Miami Beach, FL Stormwtr Rev (FGIC Insd).... 5.250 09/01/25 1,601,249 1,855 Miami Dade Cnty, FL Hlth Fac Miami Childrens Hosp Ser A Rfdg (AMBAC Insd)................ 5.000 08/15/20 1,957,118 2,000 Miami-Dade Cnty, FL Aviation Rev Miami Intl Arpt (FGIC Insd)............................ 5.375 10/01/25 2,079,180 2,700 Miami-Dade Cnty, FL Aviation Rev Miami Intl Arpt (FGIC Insd)............................ 5.375 10/01/32 2,784,834 1,000 Miami-Dade Cnty, FL Aviation Ser A (FSA Insd)....................................... 5.000 10/01/33 1,004,810
See Notes to Financial Statements 10 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE FLORIDA (CONTINUED) $ 5,000 Miami-Dade Cnty, FL Aviation Ser A (FSA Insd)....................................... 5.125% 10/01/35 $ 5,050,800 3,750 Orange Cnty, FL Sch Brd Ctf Part Ser A (AMBAC Insd)................................ 5.250 08/01/14 4,239,450 4,320 Orange Cnty, FL Tourist Dev Tax Rev (AMBAC Insd)....................................... 5.625 10/01/14 4,942,339 4,300 Orange Cnty, FL Tourist Dev Tax Rev (AMBAC Insd)....................................... 5.500 10/01/31 4,670,445 2,140 Reedy Creek, FL Impt Dist FL Ser A Rfdg (AMBAC Insd)................................ 5.500 06/01/12 2,440,863 1,060 Tallahassee, FL Lease Rev FL St Univ Proj Ser A (MBIA Insd)........................... 5.500 08/01/18 1,182,366 ------------ 57,759,239 ------------ GEORGIA 3.4% 2,645 Georgia St Ser D............................ 6.000 10/01/05 2,933,755 3,500 Georgia St Ser D............................ 6.000 10/01/06 3,999,730 2,400 Municipal Elec Auth GA Combustion Turbine Proj Ser A (MBIA Insd)...................... 5.250 11/01/14 2,685,144 8,030 Municipal Elec Auth GA Combustion Turbine Proj Ser A (MBIA Insd)...................... 5.250 11/01/18 8,754,065 2,000 Royston, GA Hosp Auth Hosp Ctf Rev Ty Cobb Hlthcare Sys Inc Rfdg....................... 6.500 07/01/27 1,948,940 ------------ 20,321,634 ------------ HAWAII 0.4% 1,465 Honolulu, HI City & Cnty Ser D (FGIC Insd)....................................... 4.700 02/01/08 1,583,123 1,375 Honolulu, HI City & Cnty Wastewtr Sys Rev Cap Apprec (FGIC Insd)...................... * 07/01/12 949,850 ------------ 2,532,973 ------------ ILLINOIS 14.3% 3,400 Carol Stream, IL First Mtg Rev Windsor Pk Mnr Proj.................................... 7.000 12/01/13 3,543,140 1,500 Champaign Cnty, IL Cmnty Unit Sch Dist No 116 Urbana Ser C (Prerefunded @ 01/01/10) (FGIC Insd)................................. * 01/01/16 844,515 1,300 Champaign Cnty, IL Cmnty Unit Sch Dist No 116 Urbana Ser C (Prerefunded @ 01/01/10) (FGIC Insd)................................. * 01/01/18 647,764 1,285 Chicago, IL Brd Ed (FGIC Insd).............. 6.000 12/01/12 1,516,120 1,400 Chicago, IL Brd Ed Ser A (MBIA Insd)........ 5.500 12/01/28 1,498,434
See Notes to Financial Statements 11 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE ILLINOIS (CONTINUED) $ 4,000 Chicago, IL Neighborhoods Alive 21 Pgm Ser A (FGIC Insd)................................. 5.750% 01/01/40 $ 4,455,840 5,000 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt Third Lien Ser A Rfdg (MBIA Insd)........... 5.375 01/01/32 5,138,750 1,015 Chicago, IL O'Hare Intl Arpt Rev Second Lien Passenger Fac Ser B (AMBAC Insd)............ 5.500 01/01/16 1,133,187 1,980 Chicago, IL Pk Dist Ser C (FGIC Insd)....... 5.500 01/01/19 2,168,516 2,565 Chicago, IL Proj Ser C Rfdg (FGIC Insd)..... 5.750 01/01/12 2,943,620 1,000 Cook Cnty, IL Cmnty Cons Sch Dist No 64 Park Ridge (FSA Insd)............................ 5.500 12/01/14 1,162,690 1,000 Cook Cnty, IL Ser A (FGIC Insd)............. 5.500 11/15/31 1,064,400 7,765 Du Page Cnty, IL Forest Preserve Dist....... * 11/01/17 3,952,929 5,000 Du Page Cnty, IL Trans Rev (FSA Insd)....... 5.750 01/01/15 5,703,450 4,000 Hodgkins, IL Tax Increment Ser A Rfdg....... 7.625 12/01/13 4,274,040 2,860 Illinois Dev Fin Auth Rev Adventist Hlth Ser A (MBIA Insd) (d)........................... 5.500 11/15/05 3,113,139 2,725 Illinois Dev Fin Auth Rev Cmnty Rehab Providers Fac Ser A......................... 7.375 07/01/25 2,918,965 2,705 Illinois Dev Fin Auth Rev Loc Govt Pgm Aurora East Sch (MBIA Insd)................. * 12/01/15 1,569,901 1,565 Illinois Edl Fac Auth Rev DePaul Univ (AMBAC Insd)....................................... 5.625 10/01/15 1,782,911 1,740 Illinois Edl Fac Auth Rev Lewis Univ........ 5.900 10/01/14 1,765,613 1,645 Illinois Hlth Fac Auth Rev Evangelical Hosp Ser C Rfdg (FSA Insd)....................... 6.750 04/15/12 1,681,437 2,500 Illinois St First Ser (MBIA Insd)........... 5.500 12/01/09 2,893,425 1,500 Illinois St First Ser (FGIC Insd)........... 5.375 11/01/14 1,679,310 3,000 Illinois St First Ser (FSA Insd)............ 5.250 12/01/21 3,215,760 3,440 Kendall Kane & Will Cntys, IL Cmnty Sch Dist No 308 Ser B (FGIC Insd).................... 5.250 10/01/19 3,728,238 870 Metropolitan Pier & Expo Auth IL Dedicated St Tax Rev Cap Apprec (Escrowed to Maturity) (FGIC Insd)................................. * 06/15/14 546,699 3,460 Metropolitan Pier & Expo Auth IL Dedicated St Tax Rev Cap Apprec (Unrefunded Balance) (FGIC Insd)................................. * 06/15/14 2,143,678 2,675 Metropolitan Pier & Expo Auth IL Dedicated St Tax Rev McCormick Pl Expansion Ser A (MBIA Insd)................................. 5.250 06/15/42 2,797,140 1,510 Roselle, IL Multi-Family Hsg Rev Waterbury Apts Ser A Rfdg (GNMA Collateralized)....... 7.000 01/01/25 1,583,356
See Notes to Financial Statements 12 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE ILLINOIS (CONTINUED) $ 3,230 Saint Clair Cnty, IL Cap Impt Rev McKendree College Proj Rfdg........................... 6.000% 02/01/24 $ 3,238,753 3,060 Will Cnty, IL Cmnty Sch Dist No 161 Summit Hill Cap Apprec (FGIC Insd)................. * 01/01/12 2,156,015 3,505 Will Cnty, IL Cmnty Sch Dist No 161 Summit Hill Cap Apprec (FGIC Insd)................. * 01/01/14 2,212,216 2,010 Will Cnty, IL Cmnty Sch Dist No 161 Summit Hill Cap Apprec (FGIC Insd)................. * 01/01/16 1,128,293 1,415 Will Cnty, IL Cmnty Sch Dist No 161 Summit Hill Cap Apprec (FGIC Insd)................. * 01/01/19 659,673 9,660 Will Cnty, IL Fst Presv Dist Ser B (FGIC Insd)....................................... * 12/01/16 5,200,654 ------------ 86,062,571 ------------ INDIANA 1.3% 1,000 Allen Cnty, IN Juvenile Justice Ctr First Mtg (AMBAC Insd)............................ 5.500 01/01/18 1,115,620 1,000 Clark Pleasant, IN Cmnty Sch First Mtg (AMBAC Insd)................................ 5.500 07/15/13 1,134,020 1,580 Indiana Trans Fin Auth Toll Rd Lease Rev Rfdg (AMBAC Insd)........................... 5.375 07/01/09 1,778,353 1,500 Petersburg, IN Pollutn Ctl Rev, IN Pwr & Lt (d)......................................... 5.950 12/01/29 1,373,220 2,500 Vigo Cnty, IN Sch Bldg Corp First Mtg Impt & Rfdg (FSA Insd)............................. 5.250 07/10/24 2,632,775 ------------ 8,033,988 ------------ KANSAS 1.1% 3,000 Sedgwick Cnty, KS Uni Sch Dist No 259 Wichita (MBIA Insd)......................... 6.000 09/01/09 3,542,610 1,395 Wichita, KS Pub Bldg Comm Rev Wichita St Univ Proj Ser L Rfdg (AMBAC Insd)........... 5.000 02/01/15 1,520,201 1,465 Wichita, KS Pub Bldg Comm Rev Wichita St Univ Proj Ser L Rfdg (AMBAC Insd)........... 5.000 02/01/16 1,585,130 ------------ 6,647,941 ------------ KENTUCKY 2.7% 2,000 Ashland, KY Solid Waste Rev Ashland Oil Inc Proj........................................ 7.200 10/01/20 2,012,520 4,000 Elsmere, KY Indl Dev Rev Courtaulds Pkg Inc Proj Rfdg (Prerefunded @ 04/01/05).......... 6.750 04/01/10 4,469,040 1,500 Kentucky St Ppty & Bldgs Comm Proj No 69 Ser A Rfdg (FSA Insd)........................... 5.500 08/01/11 1,725,285
See Notes to Financial Statements 13 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE KENTUCKY (CONTINUED) $ 3,500 Kentucky St Tpk Auth Econ Dev Revitalization Proj Rfdg (FSA Insd)........................ 5.500% 07/01/07 $ 3,965,850 1,000 Kentucky St Tpk Auth Econ Dev Revitalization Proj Rfdg (FSA Insd)........................ 5.625 07/01/14 1,129,240 2,350 Louisville & Jefferson, KY Swr Ser A (MBIA Insd)....................................... 5.500 05/15/15 2,669,882 ------------ 15,971,817 ------------ LOUISIANA 2.2% 1,675 Louisiana Loc Govt Envir Facs Pkg Facs Corp Garage Proj Ser A (AMBAC Insd).............. 5.200 10/01/19 1,789,386 3,000 Louisiana St Ser A (FGIC Insd).............. 5.500 11/15/07 3,429,120 8,380 Louisiana St Univ & Agriculture & Mechanical College Univ Rev Master Lease (b)........... 5.750 10/30/18 8,166,538 ------------ 13,385,044 ------------ MAINE 0.2% 1,000 Maine Vets Homes, ME Rev (Prerefunded @ 10/01/05)................................... 7.750 10/01/20 1,158,730 ------------ MARYLAND 1.6% 2,300 Baltimore, MD Cap Apprec Cons Pub Ser A Impt & Rfdg (FGIC Insd).......................... * 10/15/06 2,064,204 1,675 Baltimore, MD Cap Apprec Ser A (Prerefunded @ 10/15/05) (FGIC Insd)..................... * 10/15/07 1,434,838 1,845 Baltimore, MD Cap Apprec Ser A (Unrefunded Balance) (FGIC Insd)........................ * 10/15/07 1,545,686 1,700 Maryland St Trans Auth Arpt Baltimore/ Washington Intl Arpt B (AMBAC Insd)......... 5.125 03/01/24 1,742,534 2,365 Northeast, MD Waste Disp Auth Rfdg (AMBAC Insd)....................................... 5.500 04/01/16 2,601,145 ------------ 9,388,407 ------------ MASSACHUSETTS 3.1% 1,775 Massachusetts Muni Whsl Elec Co Nuclear Proj 5 (MBIA Insd)............................... 5.250 07/01/13 1,976,995 1,745 Massachusetts St Cons Ln Ser B (Prerefunded @ 05/01/09)................................. 5.250 05/01/13 1,998,548 5,000 Massachusetts St Cons Ln Ser E (FSA Insd)... 5.250 01/01/20 5,403,050 850 Massachusetts St Dev Fin Agy Rev Boston Architectural Ctr (ACA Insd)................ 6.100 09/01/18 915,603 1,000 Massachusetts St Dev Fin Agy Rev Boston Architectural Ctr (ACA Insd)................ 6.250 09/01/28 1,060,130
See Notes to Financial Statements 14 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE MASSACHUSETTS (CONTINUED) $ 1,500 Massachusetts St Fed Hwy Grant Antic Nt Ser A........................................... 5.750% 06/15/15 $ 1,721,175 3,700 Massachusetts St Hlth & Ed Fac Auth Rev (MBIA Insd)................................. 5.000 07/01/13 3,886,998 1,000 Massachusetts St Hlth & Ed Fac Auth Rev Partn Hlthcare Sys Ser C.................... 5.750 07/01/32 1,057,180 825 Massachusetts St Hlth & Ed Fac Auth Rev Winchester Hosp Ser D Rfdg (Connie Lee Insd)....................................... 5.750 07/01/14 872,800 ------------ 18,892,479 ------------ MICHIGAN 3.7% 3,675 Detroit, MI Loc Dev Fin Auth Tax Increment Sr Ser B (b)................................ 6.700 05/01/21 3,760,591 920 Detroit, MI Loc Dev Fin Auth Tax Increment SubSer C (b)................................ 6.850 05/01/21 943,488 2,930 Detroit, MI Wtr Supply Sys Rev Sr Lien Ser C Rfdg (MBIA Insd)............................ 5.250 07/01/18 3,214,122 1,180 Hillsdale, MI Hosp Fin Auth Hosp Rev Hillsdale Cmnty Hlth Ctr.................... 5.750 05/15/18 1,124,292 2,000 Michigan Muni Bd Auth Rev Clean Wtr Rev Fd.. 5.250 10/01/18 2,197,020 500 Michigan St Hosp Fin Auth Rev Hosp Genesys Regl Med Ser A Rfdg (Escrowed to Maturity)................................... 5.375 10/01/13 564,090 3,180 Michigan St Hsg Dev Rental Hsg Rev Ser A (MBIA Insd)................................. 5.300 10/01/37 3,247,034 1,500 Michigan St Strategic Fd Detroit Edison Co Proj C Rfdg (XLCA Insd)..................... 5.450 12/15/32 1,558,875 1,150 Michigan St Strategic Fd Detroit Edison Pollutn Ctl Ser B Rfdg...................... 5.650 09/01/29 1,174,644 1,750 Michigan St Strategic Fd Ltd Oblig Rev WMX Technologies Inc Proj....................... 6.000 12/01/13 1,778,297 2,500 Michigan St Trunk Line Ser A................ 5.500 11/01/15 2,818,925 ------------ 22,381,378 ------------ MISSISSIPPI 0.6% 2,500 Mississippi Bus Fin Corp MS Pollutn Ctl Rev Sys Energy Res Inc Proj..................... 5.875 04/01/22 2,468,950 975 Mississippi Home Corp Single Family Rev Mtg Ser F (GNMA Collateralized)................. 7.550 12/01/27 1,025,056 ------------ 3,494,006 ------------
See Notes to Financial Statements 15 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE MISSOURI 2.9% $ 1,400 Ellisville, MO Indl Dev Auth Rev Gambrill Gardens Proj Rfdg & Impt.................... 6.100% 06/01/20 $ 1,261,302 1,000 Ellisville, MO Indl Dev Auth Rev Gambrill Gardens Proj Rfdg & Impt.................... 6.200 06/01/29 869,330 1,250 Fulton 54 Trans Corp Hwt Rev MO (AMBAC Insd)....................................... 4.600 09/01/04 1,306,112 1,740 Good Shepherd Nursing Home Dist MO Nursing Home Fac Rev (Prerefunded @ 08/15/05)....... 7.625 08/15/15 1,997,990 1,000 Kearney, MO (AMBAC Insd).................... 5.500 03/01/16 1,116,020 1,415 Missouri St Hlth & Ed Fac Rev Univ MO Columbia Arena Proj......................... 5.000 11/01/18 1,508,263 3,085 Missouri St Hwy & Trans Commn Rd Rev Ser A.. 5.250 02/01/07 3,436,289 1,000 Missouri St Hwy & Trans Ser A............... 5.125 02/01/17 1,085,950 2,810 Perry Cnty, MO Nursing Home Rev Rfdg........ 5.900 03/01/28 2,339,297 2,505 St Louis, MO Arpt Rev Cap Impt Prog Ser A (MBIA Insd)................................. 5.375 07/01/20 2,719,979 ------------ 17,640,532 ------------ NEVADA 1.1% 2,500 Clark Cnty, NV Sch Dist Bldg Ser C (MBIA Insd)....................................... 5.000 06/15/12 2,781,575 2,500 Reno, NV Cap Impt Rev (FGIC Insd)........... 5.125 06/01/26 2,586,525 1,500 Reno, NV Sr Lien Retrac Reno Trans Proj (AMBAC Insd)................................ 5.125 06/01/37 1,536,390 ------------ 6,904,490 ------------ NEW HAMPSHIRE 1.3% 4,800 New Hampshire Higher Ed & Hlth Fac Auth Rev Daniel Webster College Issue................ 6.300 07/01/29 4,599,840 2,000 New Hampshire Higher Ed & Hlth Fac Auth Rev Riverwoods at Exeter Ser A.................. 6.500 03/01/23 2,002,660 1,000 New Hampshire Hlth & Ed Fac Auth Rev Derryfield Sch.............................. 6.750 07/01/20 1,024,220 ------------ 7,626,720 ------------
See Notes to Financial Statements 16 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE NEW JERSEY 9.0% $ 4,000 Camden Cnty, NJ Impt Auth Lease Rev Kaighn PT Marine Term Ser A (Asset Gty Insd) (e) (f)......................................... 8.000% 06/01/27 $ 876,000 1,000 Eastern Camden Cnty, NJ Regl Sch Dist Rfdg (FGIC Insd)................................. * 03/01/04 989,590 1,460 Eastern Camden Cnty, NJ Regl Sch Dist Rfdg (FGIC Insd)................................. * 03/01/05 1,419,938 1,465 Eastern Camden Cnty, NJ Regl Sch Dist Rfdg (FGIC Insd)................................. * 03/01/06 1,388,190 1,615 Eastern Camden Cnty, NJ Regl Sch Dist Rfdg (FGIC Insd)................................. * 03/01/07 1,475,157 1,555 Eastern Camden Cnty, NJ Regl Sch Dist Rfdg (FGIC Insd)................................. * 03/01/08 1,358,370 2,500 New Jersey Econ Dev Auth Sch Facs Constr Ser C (MBIA Insd)............................... 5.000 06/15/16 2,714,325 25,000 New Jersey Econ Dev Auth St Contract Econ Recovery (MBIA Insd) (a) (d)................ 5.900 03/15/21 29,796,250 2,825 New Jersey St Ed Fac Auth Higher Ed Cap Impt Ser A (AMBAC Insd).......................... 5.250 09/01/19 3,078,176 3,500 New Jersey St Tpk Auth Tpk Rev Ser C (FSA Insd)....................................... 6.500 01/01/16 4,323,795 3,500 New Jersey St Trans Corp Ctfs Fed Trans Admin Grant Ser A (AMBAC Insd).............. 5.500 09/15/13 4,047,715 1,000 New Jersey St Transn Corp Capital Grant Antic Nt Ser B (AMBAC Insd)................. 5.500 02/01/08 1,133,850 1,000 New Jersey St Transn Tr Fd Auth Trans Sys Ser A....................................... 5.750 06/15/18 1,187,680 ------------ 53,789,036 ------------ NEW YORK 13.3% 1,870 Long Island Pwr Auth, NY Elec Cap Apprec (FSA Insd).................................. * 06/01/18 969,090 3,000 Metropolitan Trans Auth NY Ser A Rfdg (FGIC Insd)....................................... 5.250 11/15/31 3,157,470 2,500 Nassau Cnty, NY Impt Ser F.................. 7.000 03/01/04 2,609,400 2,500 Nassau Cnty, NY Interim Fin Auth Sales Tax Secured Ser A............................... 5.750 11/15/13 2,820,175 1,000 Nassau Cnty, NY Ser A Rfdg (FGIC Insd)...... 6.000 07/01/10 1,177,360 5,000 New York City Adj SubSer A-1................ 5.750 08/01/12 5,119,150 3,500 New York City Hlth & Hosp Hlth Sys Ser A (AMBAC Insd)................................ 5.000 02/15/11 3,843,385 7,000 New York City Ser A (a)..................... 6.250 08/01/08 7,913,360 2,000 New York City Ser H (FGIC Insd)............. 6.000 08/01/12 2,354,600
See Notes to Financial Statements 17 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE NEW YORK (CONTINUED) $ 1,000 New York City Ser H......................... 5.750% 03/15/13 $ 1,092,790 760 New York City Trans Future Tax Secd Ser C... 4.750 05/01/23 765,176 2,000 New York City Transitional Future Tax Secd Ser C Rfdg (AMBAC Insd)..................... 5.250 08/01/22 2,136,560 1,545 New York St Dorm Auth Lease Teachers College (FSA Insd).................................. 5.250 08/15/15 1,701,230 6,800 New York St Dorm Auth Rev City Univ Sys Cons Ser A (a)................................... 5.625 07/01/16 7,880,656 3,000 New York St Dorm Auth Rev Sch Dist Fin Pgm Ser D (MBIA Insd)........................... 5.500 10/01/17 3,379,050 4,200 New York St Dorm Auth Rev Secd Hosp N General Hosp Rfdg........................... 5.750 02/15/19 4,648,602 1,250 New York St Dorm Auth Revs Cons City Univ Sys A (FSA Insd)............................ 5.750 07/01/13 1,467,200 2,070 New York St Med Care Fac Fin Agy Rev Mental Hlth Svcs Ser F Rfdg (MBIA Insd)............ 5.375 02/15/14 2,170,354 4,000 New York St Twy Auth Svc Cntrct Loc Hwy Brdg........................................ 5.250 04/01/16 4,363,320 3,000 Onondaga Cnty, NY Indl Dev Agy Swr Fac Rev Bristol-Meyers Squibb Co Proj............... 5.750 03/01/24 3,413,250 5,189 Plainedge, NY Union Free Sch Dist (b)....... 6.000 06/01/12 5,546,955 6,000 Triborough Brdg & Tunl Auth NY Gen Ser B Rfdg........................................ 5.000 11/15/21 6,280,320 2,000 Triborough Brdg & Tunl Auth NY Ser E Rfdg (MBIA Insd)................................. 5.000 11/15/32 2,052,640 3,000 Triborough Brdg & Tunl Auth Gen Purp Ser A.. 5.000 01/01/27 3,062,220 ------------ 79,924,313 ------------ NORTH CAROLINA 5.1% 2,000 Johnston Cnty, NC (FGIC Insd)............... 5.900 03/01/19 2,324,620 7,015 North Carolina Eastern Muni Pwr Agy Pwr Sys Rev Ser A Rfdg (MBIA Insd) (a).............. 5.500 01/01/05 7,484,795 2,200 North Carolina Eastern Muni Pwr Agy Pwr Sys Rev Ser C (ACA Insd)........................ 5.000 01/01/21 2,199,978 8,300 North Carolina Muni Pwr Agy No 1 Catawba Elec Rev Rfdg (MBIA Insd) (a)............... 6.000 01/01/12 9,802,217
See Notes to Financial Statements 18 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE NORTH CAROLINA (CONTINUED) $ 6,605 North Carolina Muni Pwr Agy Ser A (MBIA Insd)....................................... 5.250% 01/01/20 $ 7,099,450 1,315 University, NC Wilmington Rev (AMBAC Insd).. 5.250 01/01/19 1,432,995 ------------ 30,344,055 ------------ OHIO 6.4% 3,950 Cincinnati, OH City Sch Dist Sch Impt (FSA Insd)....................................... 5.250 06/01/18 4,341,445 2,800 Cleveland-Cuyahoga Cnty, OH Dev Port Auth Rev Cleveland Bond Fd Ser B (g)............. 5.375 05/15/18 2,650,648 1,000 Cuyahoga Cnty, OH Hosp Fac Rev Canton Inc Proj........................................ 7.500 01/01/30 1,109,430 2,170 Franklin Cnty, OH Convention Fac Auth Tax & Lease Rev Antic Bds Rfdg (AMBAC Insd)....... 5.250 12/01/13 2,446,219 2,350 Franklin Cnty, OH Convention Fac Auth Tax & Lease Rev Antic Bds Rfdg (AMBAC Insd)....... 5.250 12/01/17 2,586,833 1,200 Franklin Cnty, OH Convention Fac Auth Tax & Lease Rev Antic Bds Rfdg (AMBAC Insd)....... 5.250 12/01/18 1,312,920 4,800 Franklin Cnty, OH Hosp Rev Holy Cross Hlth Sys Ser B Rfdg (MBIA Insd) (a).............. 5.250 06/01/10 5,090,976 2,000 Lebanon, OH City Sch Dist (FSA Insd)........ 5.500 12/01/16 2,252,500 1,000 Lorain Cnty, OH Hosp Rev Catholic Hlthcare.................................... 5.375 10/01/30 1,018,450 2,000 Lorain, OH City Sch Dist Classroom Fac Impt (MBIA Insd)................................. 5.250 12/01/20 2,178,500 1,000 Mahoning Cnty, OH Hosp Fac Forum Hlth Oblig Group Ser A................................. 6.000 11/15/32 1,038,350 1,580 Montgomery Cnty, OH Hosp Rev Grandview Hosp & Med Cent Rfdg (Escrowed to Maturity)...... 5.375 12/01/05 1,731,380 2,270 Montgomery Cnty, OH Hosp Rev Kettering Med Cent Impt & Rfdg (MBIA Insd)................ 6.250 04/01/20 2,778,049 1,000 Ohio St Air Quality Dev Auth Rev JMG Funding Ltd Part Proj Rfdg (AMBAC Insd)............. 6.375 04/01/29 1,078,720 2,500 Ohio St Bldg Auth St Fac Adult Correction Ser A Rfdg (FSA Insd)....................... 5.500 10/01/12 2,848,125 1,000 Ohio St Higher Ed Cap Fac Ser II A.......... 5.250 12/01/05 1,094,710 2,950 Parma, OH Hosp Impt Rev Parma Cmnty Gen Hosp Assoc Rfdg.................................. 5.375 11/01/29 2,965,370 ------------ 38,522,625 ------------
See Notes to Financial Statements 19 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE OKLAHOMA 1.3% $ 995 Cleveland Cnty, OK Home Ln Auth Rfdg........ 8.000% 08/01/12 $ 999,279 1,240 Kay Cnty, OK Home Fin Auth Rev Single Family Mtg Ser A Rfdg (Escrowed to Maturity) (AMBAC Insd)....................................... 7.000 11/01/11 1,562,524 2,635 Oklahoma Hsg Fin Agy Single Family Rev Mtg Class B (GNMA Collateralized)............... 7.997 08/01/18 2,905,114 2,305 Oklahoma St Cap Impt Auth St (MBIA Insd).... 5.000 06/01/06 2,535,062 ------------ 8,001,979 ------------ OREGON 2.1% 4,000 Oregon Hlth Sciences Univ Insd Ser A (MBIA Insd)....................................... 5.250 07/01/22 4,276,560 1,500 Oregon St Dept Admin Ser C Rfdg (MBIA Insd)....................................... 5.250 11/01/17 1,642,365 1,250 Portland, OR Cmnty College Dist Ser B....... 5.250 06/01/12 1,405,388 1,500 Washington Multnomah & Yamhill Cntys, OR Sch Dist No 11 (MBIA Insd)...................... 5.000 06/01/13 1,645,815 3,195 Yamhill Cnty, OR Sch Dist No 029J Newberg (MBIA Insd)................................. 5.250 06/15/18 3,496,384 ------------ 12,466,512 ------------ PENNSYLVANIA 5.7% 2,500 Allegheny Cnty, PA San Auth Swr (MBIA Insd)....................................... 5.500 12/01/30 2,716,875 3,850 Greater Latrobe, PA Sch Auth (FGIC Insd).... 5.250 04/01/16 4,248,937 135 Lehigh Cnty, PA Gen Purp Auth Rev First Mtg Bible Fellowship Proj A Rfdg................ 4.800 12/15/03 135,244 210 Lehigh Cnty, PA Gen Purp Auth Rev First Mtg Bible Fellowship Proj A Rfdg................ 5.000 12/15/05 209,402 275 Lehigh Cnty, PA Gen Purp Auth Rev First Mtg Bible Fellowship Proj A Rfdg................ 5.100 12/15/06 273,262 295 Lehigh Cnty, PA Gen Purp Auth Rev First Mtg Bible Fellowship Proj A Rfdg................ 5.250 12/15/07 292,088 210 Lehigh Cnty, PA Gen Purp Auth Rev First Mtg Bible Fellowship Proj A Rfdg................ 5.300 12/15/08 206,932 320 Lehigh Cnty, PA Gen Purp Auth Rev First Mtg Bible Fellowship Proj A Rfdg................ 5.300 12/15/09 310,323 240 Lehigh Cnty, PA Gen Purp Auth Rev First Mtg Bible Fellowship Proj A Rfdg................ 5.400 12/15/10 230,650 1,650 Montgomery Cnty, PA Indl Dev Auth Retirement Cmnty Rev Adult Cmnty Total Svc Ser B....... 5.625 11/15/12 1,744,149
See Notes to Financial Statements 20 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE PENNSYLVANIA (CONTINUED) $ 2,700 Pennsylvania Econ Dev Fin Auth Res Recovery Rev Colver Proj Ser D....................... 7.150% 12/01/18 $ 2,800,278 1,000 Pennsylvania St Tpk Commn Rev Ser T Rfdg (FGIC Insd)................................. 5.500 12/01/11 1,155,770 1,000 Philadelphia, PA Auth Indl Dev Philadelphia Arpt Sys Proj Ser A (FGIC Insd)............. 5.125 07/01/19 1,042,960 2,600 Philadelphia, PA Auth Indl Ser B (FSA Insd)....................................... 5.500 10/01/16 2,921,776 3,200 Philadelphia, PA Gas Wks Rev 1998 Gen Ordinance 4th Ser (FSA Insd)................ 5.250 08/01/19 3,489,920 4,305 Philadelphia, PA Redev Auth Rev Neighborhood Transformation Ser A (FGIC Insd)............ 5.250 04/15/11 4,862,239 1,500 Philadelphia, PA Sch Dist Ser A (FSA Insd)....................................... 5.750 02/01/12 1,728,765 5,205 Pittsburgh, PA Ser A (AMBAC Insd) (a)....... 5.500 09/01/17 5,836,627 ------------ 34,206,197 ------------ RHODE ISLAND 1.3% 2,195 Providence, RI Redev Agy Ctf Part Ser A (Prerefunded @ 09/01/04).................... 8.000 09/01/24 2,401,659 2,420 Rhode Island St Cons Cap Dev Ln Ser A....... 5.000 08/01/12 2,475,176 2,495 Rhode Island St Hlth & Ed Higher Ed Johnson & Wales Rfdg (XLCA Insd).................... 5.375 04/01/18 2,759,545 ------------ 7,636,380 ------------ SOUTH CAROLINA 0.7% 2,000 Rock Hill, SC Util Sys Rev Comb Ser A Impt & Rfdg (FSA Insd)............................. 5.375 01/01/18 2,219,460 475 Rock Hill, SC Util Sys Rev Comb Ser C Rfdg (FSA Insd).................................. 5.125 01/01/13 520,885 1,500 South Carolina Jobs Econ SC Elec & Gas Co Proj A (AMBAC Insd)......................... 5.200 11/01/27 1,571,595 ------------ 4,311,940 ------------ SOUTH DAKOTA 1.0% 5,890 South Dakota Hsg Dev Auth Homeownership Mtg Ser F (a)................................... 5.800 05/01/28 6,097,210 ------------ TENNESSEE 2.7% 4,000 Johnson City, TN Hlth & Ed Fac Brd Hosp Rev First Mtg Mtn St Hlth Ser A Rfdg (MBIA Insd)....................................... 7.500 07/01/25 5,079,400 2,500 Memphis, TN (Prerefunded @ 10/01/06)........ 5.250 10/01/14 2,814,050 2,905 Memphis, TN Gen Impt (g).................... 5.000 05/01/20 3,073,258
See Notes to Financial Statements 21 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE TENNESSEE (CONTINUED) $ 1,000 Metropolitan Nashville Arpt Auth TN Impt Ser A Rfdg (FGIC Insd).......................... 6.600% 07/01/14 $ 1,218,610 2,100 Tennessee Hsg Dev Agy Home Ownership Pgm 2-A......................................... 5.700 07/01/31 2,199,351 1,720 Wilson Cnty, TN Sch Rfdg (FGIC Insd)........ 5.000 04/01/17 1,888,078 ------------ 16,272,747 ------------ TEXAS 9.5% 1,000 Brazos Cnty, TX Hlth Fac Dev Oblig Grp...... 5.375 01/01/32 991,970 1,250 Brazos River Auth TX Pollutn Ctl Rev Adj TX Elec Co Proj Ser C Rfdg..................... 5.750 05/01/36 1,230,563 1,350 Cameron Cnty, TX Ctfs Oblig (AMBAC Insd).... 5.750 02/15/14 1,543,523 2,500 Coastal Bend Hlth Fac Dev, TX Ser C (Inverse Fltg) (Escrowed to Maturity) (AMBAC Insd) (h)......................................... 8.138 11/15/13 3,472,700 2,420 Dallas Cnty, TX Cmnty College Dist Rev Fing Sys (AMBAC Insd)............................ 5.375 02/15/16 2,674,342 1,600 Dallas-Fort Worth, TX Intl Arpt Fac Impt Corp Rev Delta Airl Inc..................... 7.625 11/01/21 834,272 2,000 Fort Worth, TX Wtr & Swr Rev Impt Rfdg...... 5.500 02/15/05 2,145,100 1,745 Harris Cnty, TX Perm Impt & Rfdg............ 5.000 10/01/11 1,914,928 2,500 Houston, TX Arpt Sys Rev Sub Lien (FSA Insd)....................................... 5.000 07/01/32 2,533,800 3,345 Houston, TX Hotel Occupancy Tax Convtn & Entertnmnt Ser B (AMBAC Insd)............... 5.750 09/01/14 3,825,610 3,000 Houston, TX Indpt Sch Dist Maintenance Tax Nt (FSA Insd)............................... 5.000 07/15/20 3,138,480 6,790 Houston, TX Indpt Sch Dist Pub Fac Corp Lease Rev Cap Apprec West Side Ser B (AMBAC Insd)....................................... * 09/15/14 4,166,412 1,500 Houston, TX Pub Impt Rfdg (FSA Insd)........ 5.750 03/01/15 1,715,580 2,500 Houston, TX Wtr & Swr Sys Rev Jr Lien Ser B Rfdg (FGIC Insd)............................ 6.250 12/01/05 2,798,575 1,000 Mesquite, TX Hlth Fac Dev Christian Care Retirement Fac Ser A........................ 7.625 02/15/28 1,046,100 1,400 Metropolitan Hlth Fac Dev Corp TX Wilson N Jones Mem Hosp Proj......................... 7.250 01/01/31 1,265,936 1,000 North Central, TX Hlth Fac Dev Hosp Baylor Hlth Care Sys Proj A........................ 5.125 05/15/29 1,006,520 4,000 North Central, TX Hlth Fac Dev Hosp Childrens Med Ctr Dallas (AMBAC Insd)....... 5.250 08/15/32 4,126,480 4,258 Region One Ed Svc Cent Sub Tech Fac Proj.... 6.590 12/15/17 4,480,976
See Notes to Financial Statements 22 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE TEXAS (CONTINUED) $ 4,000 San Antonio, TX Elec & Gas Rev Sys Rfdg..... 5.375% 02/01/18 $ 4,376,280 1,303 Texas Gen Svc Comm Part Int................. 7.250 08/01/11 1,321,496 45 Texas Muni Pwr Agy Rev (Escrowed to Maturity) (MBIA Insd)....................... * 09/01/15 26,464 3,955 Texas Muni Pwr Agy Rev (Unrefunded Balance) (MBIA Insd)................................. * 09/01/15 2,289,708 4,000 Texas St Univ Sys Fin Rev Rfdg (FSA Insd)... 5.000 03/15/19 4,221,200 ------------ 57,147,015 ------------ UTAH 0.9% 3,545 Bountiful, UT Hosp Rev South Davis Cmnty Hosp Proj (Prerefunded @ 06/15/04) (b)...... 9.500 12/15/18 3,978,589 1,000 Utah St Ser B Rfdg (a)...................... 5.250 07/01/08 1,134,360 ------------ 5,112,949 ------------ VIRGINIA 2.5% 1,320 Fairfax Cnty, VA Ctf Part................... 5.300 04/15/23 1,378,106 1,500 Henrico Cnty, VA Indl Dev Auth Pub Fac Lease Rev Henrico Cnty Regl Jail Proj (Prerefunded @ 08/01/05)................................. 6.500 08/01/10 1,697,655 1,500 Henrico Cnty, VA Indl Dev Auth Pub Fac Lease Rev Henrico Cnty Regl Jail Proj (Prerefunded @ 08/01/05)................................. 7.125 08/01/21 1,718,370 1,630 Richmond, VA (FSA Insd)..................... 5.125 01/15/08 1,826,578 1,340 Richmond, VA (FSA Insd)..................... 5.500 01/15/10 1,536,256 2,155 Virginia Comwlth Trans Brd North VA Trans Dist Pg Ser A............................... 5.375 05/15/14 2,421,272 1,875 Virginia St Hsg Dev Auth Comwlth Mtg SubSer A-3......................................... 5.650 07/01/07 2,035,331 1,960 Virginia St Hsg Dev Auth Comwlth Mtg SubSer A-3......................................... 5.700 07/01/08 2,132,225 ------------ 14,745,793 ------------ WASHINGTON 7.3% 5,000 Bellevue, WA Convention Cent Auth Spl Oblig Rev Rfdg (MBIA Insd)........................ * 02/01/24 1,705,700 3,230 Clark Cnty, WA Pub Util Dist No. 001 Gen Sys Rev Rfdg (FSA Insd)......................... 5.500 01/01/07 3,611,560 3,000 Clark Cnty, WA Pub Util Dist No. 001 Gen Sys Rev Rfdg (FSA Insd)......................... 5.625 01/01/12 3,402,450 5,000 Cowlitz Cnty, WA Spl Swr Rev Csob Wastewtr Treatment Rfdg (FGIC Insd).................. 5.500 11/01/19 5,758,500
See Notes to Financial Statements 23 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
PAR AMOUNT MARKET (000) DESCRIPTION COUPON MATURITY VALUE WASHINGTON (CONTINUED) $ 5,000 Energy Northwest WA Elec Rev Proj No 3 Ser A Rfdg (XLCA Insd)............................ 5.500% 07/01/17 $ 5,583,650 3,000 Energy Northwest WA Elec Rev Proj No 3 Ser A Rfdg (FSA Insd)............................. 5.500 07/01/18 3,304,920 5,000 King Cnty, WA Ser B Rfdg (MBIA Insd)........ 5.250 01/01/34 5,223,100 1,000 Port Seattle, WA Rev Ser B (MBIA Insd)...... 5.625 02/01/24 1,053,390 1,345 Tacoma, WA Elec Sys Rev Ser A Rfdg (FSA Insd)....................................... 5.750 01/01/15 1,529,521 30 Washington St Pub Pwr Supply Ser B (Prerefunded @ 07/01/03) (MBIA Insd)........ 5.600 07/01/15 30,828 10,465 Washington St Pub Pwr Supply Ser B (Unrefunded Balance) (MBIA Insd) (a)........ 5.600 07/01/15 10,753,625 1,750 Washington St Pub Pwr Supply Sys Nuclear Proj No 1 Rev (MBIA Insd)................... 5.750 07/01/12 1,966,020 ------------ 43,923,264 ------------ WEST VIRGINIA 1.1% 6,550 Harrison Cnty, WV Cnty Cmnty Solid Waste Disp Rev Potomac Edison Co Ser A (MBIA Insd) (a)......................................... 6.875 04/15/22 6,641,045 ------------ WISCONSIN 2.2% 430 Wisconsin Hsg & Econ Dev Auth Home Ownership Rev Ser F................................... 5.250 07/01/29 438,445 5,000 Wisconsin St Hlth & Ed Fac Auth Mercy Hlth Sys Corp (AMBAC Insd) (a)................... 5.500 08/15/25 5,262,950 7,280 Wisconsin St Hlth & Ed Fac Auth Rev Children's Hosp (FGIC Insd) (a) (d)......... 5.000 08/15/10 7,453,628 ------------ 13,155,023 ------------ GUAM 0.9% 5,000 Guam Pwr Auth Rev Ser A (AMBAC Insd)........ 5.250 10/01/34 5,252,150 ------------ PUERTO RICO 0.4% 2,000 Puerto Rico Muni Fin Agy Ser A (FSA Insd)... 5.250 08/01/20 2,173,080 ------------ TOTAL LONG-TERM INVESTMENTS 148.2% (Cost $830,793,293).................................................... 888,859,387 SHORT-TERM INVESTMENT 0.0% (Cost $200,000)........................................................ 200,000 ------------
See Notes to Financial Statements 24 YOUR TRUST'S INVESTMENTS April 30, 2003 (Unaudited)
MARKET DESCRIPTION VALUE TOTAL INVESTMENTS $148.2% (Cost $830,993,293).................................................... $889,059,387 OTHER ASSETS IN EXCESS OF LIABILITIES 1.8%............................... 11,007,886 PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (50.0%).............. (300,072,175) ------------ NET ASSETS APPLICABLE TO COMMON SHARES 100.0%........................... $599,995,098 ============
* Zero coupon bond (a) Assets segregated as collateral for when-issued or delayed delivery purchase commitments and open futures transactions. (b) These securities are restricted and may be resold only in transactions exempt from registration which are normally those transactions with qualified institutional buyers. (c) 144A securities are those which are exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may only be resold in transactions exempt from registration which are normally those transactions with qualified institutional buyers. (d) Security converts to a fixed coupon rate at a predetermined date. (e) Non-income producing security. (f) Issuer has filed for protection in federal bankruptcy court. (g) Securities purchased on a when-issued or delayed delivery basis. (h) An Inverse Floating Rate security is one where the coupon is inversely indexed to a short-term floating interest rate multiplied by a specific factor. As the floating rate rises, the coupon is reduced. Conversely, as the floating rate declines, the coupon is increased. The price of these securities may be more volatile than the price of a comparable fixed rate security. These instruments are typically used by the Trust to enhance the yield of the portfolio. All of the Trust's portfolio holdings, including derivative instruments, are marked to market each day with the change in value reflected in the unrealized appreciation/depreciation. Upon disposition, a realized gain or loss is recognized accordingly. ACA--American Capital Access AMBAC--AMBAC Indemnity Corp. Asset Gty--Asset Guaranty Insurance Co. Connie Lee--Connie Lee Insurance Co. FGIC--Financial Guaranty Insurance Co. FSA--Financial Security Assurance Inc. GNMA--Government National Mortgage Association MBIA--Municipal Bond Investors Assurance Corp. XLCA--XL Capital Assurance Inc. See Notes to Financial Statements 25 FINANCIAL STATEMENTS Statement of Assets and Liabilities April 30, 2003 (Unaudited) ASSETS: Total Investments (Cost $830,993,293)....................... $889,059,387 Cash........................................................ 118,485 Receivables: Interest.................................................. 12,393,799 Investments Sold.......................................... 8,645,496 Other....................................................... 1,667 ------------ Total Assets............................................ 910,218,834 ------------ LIABILITIES: Payables: Investments Purchased..................................... 9,027,539 Investment Advisory Fee................................... 440,604 Variation Margin on Futures............................... 243,906 Affiliates................................................ 44,868 Administrative Fee........................................ 36,717 Trustees' Deferred Compensation and Retirement Plans........ 229,851 Accrued Expenses............................................ 128,076 ------------ Total Liabilities....................................... 10,151,561 Preferred Shares (including accrued distributions).......... 300,072,175 ------------ NET ASSETS APPLICABLE TO COMMON SHARES...................... $599,995,098 ============ NET ASSET VALUE PER COMMON SHARE ($599,995,098 divided by 36,365,393 shares outstanding)............................ $ 16.50 ============ NET ASSETS CONSIST OF: Common Shares ($.01 par value with an unlimited number of shares authorized, 36,365,393 shares issued and outstanding).............................................. $ 363,654 Paid in Surplus............................................. 538,413,497 Net Unrealized Appreciation................................. 57,862,659 Accumulated Undistributed Net Investment Income............. 3,985,102 Accumulated Net Realized Loss............................... (629,814) ------------ NET ASSETS APPLICABLE TO COMMON SHARES...................... $599,995,098 ============ PREFERRED SHARES ($.01 par value, authorized 100,000,000 shares, 12,000 issued with liquidation preference of $25,000 per share)........................................ $300,000,000 ============ NET ASSETS INCLUDING PREFERRED SHARES....................... $899,995,098 ============
See Notes to Financial Statements 26 Statement of Operations For the Six Months Ended April 30, 2003 (Unaudited) INVESTMENT INCOME: Interest.................................................... $22,291,019 ----------- EXPENSES: Investment Advisory Fee..................................... 2,646,253 Preferred Share Maintenance................................. 396,384 Administrative Fee.......................................... 220,521 Legal....................................................... 68,389 Trustees' Fees and Related Expenses......................... 47,819 Custody..................................................... 27,204 Other....................................................... 186,138 ----------- Total Expenses.......................................... 3,592,708 Less Credits Earned on Cash Balances.................... 457 ----------- Net Expenses............................................ 3,592,251 ----------- NET INVESTMENT INCOME....................................... $18,698,768 =========== REALIZED AND UNREALIZED GAIN/LOSS: Realized Gain/Loss: Investments............................................. $ 2,049,904 Futures................................................. (834,388) ----------- Net Realized Gain........................................... 1,215,516 ----------- Unrealized Appreciation/Depreciation: Beginning of the Period................................... 45,190,571 End of the Period: Investments............................................. 58,066,094 Futures................................................. (203,435) ----------- 57,862,659 ----------- Net Unrealized Appreciation During the Period............... 12,672,088 ----------- NET REALIZED AND UNREALIZED GAIN............................ $13,887,604 =========== DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $(1,737,473) =========== NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM OPERATIONS................................................ $30,848,899 ===========
See Notes to Financial Statements 27 Statements of Changes in Net Assets (Unaudited)
SIX MONTHS ENDED YEAR ENDED APRIL 30, 2003 OCTOBER 31, 2002 ------------------------------------ FROM INVESTMENT ACTIVITIES: Operations: Net Investment Income.............................. $ 18,698,768 $ 38,628,846 Net Realized Gain.................................. 1,215,516 6,482,908 Net Unrealized Appreciation/Depreciation During the Period........................................... 12,672,088 (5,984,542) Distributions to Preferred Shareholders: Net Investment Income............................ (1,737,473) (4,166,801) ------------ ------------ Change in Net Assets Applicable to Common Shares from Operations.................................. 30,848,899 34,960,411 Distributions to Common Shareholders: Net Investment Income............................ (17,018,069) (33,199,705) ------------ ------------ NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM INVESTMENT ACTIVITIES................ 13,830,830 1,760,706 NET ASSETS APPLICABLE TO COMMON SHARES: Beginning of the Period............................ 586,164,268 584,403,562 ------------ ------------ End of the Period (Including accumulated undistributed net investment income of $3,985,102 and $4,041,876, respectively).................... $599,995,098 $586,164,268 ============ ============
See Notes to Financial Statements 28 Financial Highlights (Unaudited) THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, APRIL 30, ---------------------------- 2003 2002 (a) 2001 2000 ----------------------------------------- NET ASSET VALUE, BEGINNING OF THE PERIOD........ $ 16.12 $ 16.07 $ 14.91 $ 14.60 ------- ------- ------- ------- Net Investment Income......................... .52 1.06 1.13 1.17 Net Realized and Unrealized Gain/Loss......... .38 .01 1.12 .42 Common Share Equivalent of Distributions Paid to Preferred Shareholders: Net Investment Income....................... (.05) (.11) (.27) (.34) Net Realized Gain........................... -0- -0- -0- -0- ------- ------- ------- ------- Total from Investment Operations................ .85 .96 1.98 1.25 Distributions Paid to Common Shareholders: Net Investment Income....................... (.47) (.91) (.82) (.94) Net Realized Gain........................... -0- -0- -0- -0- ------- ------- ------- ------- NET ASSET VALUE, END OF THE PERIOD.............. $ 16.50 $ 16.12 $ 16.07 $ 14.91 ======= ======= ======= ======= Common Share Market Price at End of the Period........................................ $ 15.05 $ 14.30 $ 13.79 $12.625 Total Return (b)................................ 8.67%* 10.49% 15.97% 2.80% Net Assets Applicable to Common Shares at End of the Period (In millions)...................... $ 600.0 $ 586.2 $ 584.4 $ 542.1 Ratio of Expenses to Average Net Assets Applicable to Common Shares (c)............... 1.23% 1.35% 1.55% 1.67% Ratio of Net Investment Income to Average Net Assets Applicable to Common Shares (c)........ 6.40% 6.70% 7.26% 8.07% Portfolio Turnover.............................. 13%* 38% 28% 39% SUPPLEMENTAL RATIOS: Ratio of Expenses to Average Net Assets Including Preferred Shares (c)................ .81% .89% 1.01% 1.07% Ratio of Net Investment Income to Average Net Assets Applicable to Common Shares (d)........ 5.80% 5.98% 5.51% 5.71% SENIOR SECURITIES: Total Preferred Shares Outstanding.............. 12,000 12,000 12,000 12,000 Asset Coverage Per Preferred Share (e).......... $75,006 $73,861 $73,700 $70,177 Involuntary Liquidating Preference Per Preferred Share......................................... $25,000 $25,000 $25,000 $25,000 Average Market Value Per Preferred Share........ $25,000 $25,000 $25,000 $25,000
* Non-Annualized (a) As required, effective November 1, 2001, the Trust has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on fixed income securities. The effect of this change for the year ended October 31, 2002 was to increase net investment income per share by $.01, decrease net realized and unrealized gains and losses per share by $.01 and increase the ratio of net investment income to average net assets applicable to common shares from 6.69% to 6.73%. Per share, ratios and supplemental data for periods prior to October 31, 2002 have not been restated to reflect this change in presentation. (b) Total return assumes an investment at the common share market price at the beginning of the period indicated, reinvestment of all distributions for the period in accordance with the Trust's dividend reinvestment plan, and sale of all shares at the closing common share market price at the end of the period indicated. (c) Ratios do not reflect the effect of dividend payments to preferred shareholders. (d) Ratios reflect the effect of dividend payments to preferred shareholders. (e) Calculated by subtracting the Trust's total liabilities (not including the preferred shares) from the Trust's total assets and dividing this by the number of preferred shares outstanding. See Notes to Financial Statements 29
TWO MONTHS ENDED YEAR ENDED AUGUST 31, - ------------ OCTOBER 31, --------------------------------------------------------------- 1999 1998 1998 1997 1996 1995 1994 1993 - -------------------------------------------------------------------------------------------- $ 17.39 $ 17.32 $ 16.60 $ 15.84 $ 15.73 $ 15.56 $ 17.04 $ 16.33 -------- -------- -------- -------- -------- -------- -------- -------- 1.20 .21 1.26 1.28 1.30 1.31 1.34 1.41 (2.30) .08 .72 .73 .10 .26 (1.42) .78 (.24) (.02) (.30) (.29) (.30) (.32) (.28) (.24) (.06) (.04) -0- -0- -0- -0- -0- (.03) -------- -------- -------- -------- -------- -------- -------- -------- (1.40) .23 1.68 1.72 1.10 1.25 (.36) 1.92 (.96) (.16) (.96) (.96) (.99) (1.08) (1.12) (1.10) (.43) -0- -0- -0- -0- -0- -0- (.11) -------- -------- -------- -------- -------- -------- -------- -------- $ 14.60 $ 17.39 $ 17.32 $ 16.60 $ 15.84 $ 15.73 $ 15.56 $ 17.04 ======== ======== ======== ======== ======== ======== ======== ======== $13.1875 $16.8125 $16.1875 $ 15.75 $ 14.50 $ 14.25 $ 15.00 $ 16.75 -14.47% 4.84%* 9.06% 15.87% 8.98% 2.39% -3.94% 11.90% $ 530.9 $ 630.6 $ 628.2 $ 601.9 $ 574.6 $ 570.7 $ 564.4 $ 617.9 1.60% 1.57% 1.57% 1.61% 1.61% 1.65% 1.64% 1.59% 7.43% 7.20% 7.42% 7.86% 8.08% 8.58% 8.23% 8.58% 80% 6%* 94% 54% 36% 49% 47% 48% 1.06% 1.07% 1.06% 1.07% 1.06% 1.07% 1.09% 1.06% 5.95% 6.48% 5.66% 6.04% 6.20% 6.48% 6.52% 7.08% 12,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 $ 69,241 $155,104 $154,696 $150,322 $145,764 $145,113 $144,074 $152,980 $ 25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
See Notes to Financial Statements 30 NOTES TO FINANCIAL STATEMENTS April 30, 2003 (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES Van Kampen Municipal Trust (the "Trust") is registered as a diversified, closed- end management investment company under the Investment Company Act of 1940, as amended. The Trust's investment objective is to seek to provide a high level of current income exempt from federal income tax, consistent with preservation of capital. The Trust will invest in a portfolio consisting substantially of municipal obligations rated investment grade at the time of investment, but may invest up to 20% of its assets in unrated securities which are believed to be of comparable quality to those rated investment grade. The Trust commenced investment operations on September 27, 1991. The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. A. SECURITY VALUATION Municipal bonds are valued by independent pricing services or dealers using the mean of the bid and asked prices or, in the absence of market quotations, at fair value based upon yield data relating to municipal bonds with similar characteristics and general market conditions. Securities which are not valued by independent pricing services or dealers are valued at fair value using procedures established in good faith by the Board of Trustees. Short-term securities with remaining maturities of 60 days or less are valued at amortized cost, which approximates market value. B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date basis. Realized gains and losses are determined on an identified cost basis. The Trust may purchase and sell securities on a "when-issued" or "delayed delivery" basis, with settlement to occur at a later date. The value of the security so purchased is subject to market fluctuations during this period. The Trust will maintain, in a segregated account with its custodian, assets having an aggregate value at least equal to the amount of the when-issued or delayed delivery purchase commitments until payment is made. At April 30, 2003, the Trust had $9,027,539 of when-issued and delayed delivery purchase commitments. 31 NOTES TO FINANCIAL STATEMENTS April 30, 2003 (Unaudited) C. INVESTMENT INCOME Interest income is recorded on an accrual basis. Bond premium is amortized and discount is accreted over the expected life of each applicable security. D. FEDERAL INCOME TAXES It is the Trust'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 income to its shareholders. Therefore, no provision for federal income taxes is required. The Trust intends to utilize provisions of the federal income tax laws which allow it to carry a realized capital loss forward for eight years following the year of the loss and offset such losses against any future realized capital gains. At October 31, 2002, the Trust had an accumulated capital loss carryforward for tax purposes of $1,636,866, which will expire on October 31, 2008. At April 30, 2003, the cost and related gross unrealized appreciation and depreciation are as follows: Cost of investments for tax purposes........................ $830,233,443 ============ Gross tax unrealized appreciation........................... $ 64,303,886 Gross tax unrealized depreciation........................... (5,477,942) ------------ Net tax unrealized appreciation on investments.............. $ 58,825,944 ============
E. DISTRIBUTION OF INCOME AND GAINS The Trust declares and pays monthly dividends from net investment income to common shareholders. Net realized gains, if any, are distributed annually on a pro rata basis to common and preferred shareholders. Distributions from net realized gains for book purposes may include short-term capital gains, which are included as ordinary income for tax purposes. The tax character of distributions paid for the year ended October 31, 2002, was as follows:
2002 Distributions paid from: Ordinary income........................................... $75,802
As of October 31, 2002, the components of distributable earnings on a tax basis were as follows: Undistributed ordinary income............................... $155,800
F. EXPENSE REDUCTION During the six months ended April 30, 2003, the Trust's custody fee was reduced by $457 as a result of credits earned on cash balances. 32 NOTES TO FINANCIAL STATEMENTS April 30, 2003 (Unaudited) 2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of the Trust's Investment Advisory Agreement, Van Kampen Investment Advisory Corp. (the "Adviser") will provide investment advice and facilities to the Trust for an annual fee payable monthly of .60% of the average daily net assets of the Trust. In addition, the Trust will pay a monthly administrative fee to Van Kampen Investments Inc. or its affiliates (collectively "Van Kampen"), the Trust's Administrator, at an annual rate of ..05% of the average daily net assets of the Trust. The administrative services provided by the Administrator include record keeping and reporting responsibilities with respect to the Trust's portfolio and preferred shares and providing certain services to shareholders. For the six months ended April 30, 2003, the Trust recognized expenses of approximately $25,100 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom (Illinois), counsel to the Trust, of which a trustee of the Trust is an affiliated person. Under separate Accounting Services and Legal Services agreements, the Adviser provides accounting and legal services to the Trust. The Adviser allocates the cost of such services to each trust. For the six months ended April 30, 2003, the Trust recognized expenses of approximately $40,800 representing Van Kampen's cost of providing accounting and legal services to the Trust, which are reported as part of "Other" and "Legal" expenses, respectively, in the Statement of Operations. Certain officers and trustees of the Trust are also officers and directors of Van Kampen. The Trust does not compensate its officers or trustees who are officers of Van Kampen. The Trust provides deferred compensation and retirement plans for its trustees who are not officers of Van Kampen. Under the deferred compensation plan, trustees may elect to defer all or a portion of their compensation to a later date. Benefits under the retirement plan are payable upon retirement for a ten-year period and are based upon each trustee's years of service to the Trust. The maximum annual benefit per trustee under the plan is $2,500. 3. INVESTMENT TRANSACTIONS During the period, the cost of purchases and proceeds from sales of investments, excluding short-term investments, were $130,277,501 and $115,889,483, respectively. 4. DERIVATIVE FINANCIAL INSTRUMENTS A derivative financial instrument in very general terms refers to a security whose value is "derived" from the value of an underlying asset, reference rate or index. 33 NOTES TO FINANCIAL STATEMENTS April 30, 2003 (Unaudited) In order to seek to manage the interest rate exposure of the Trust's portfolio in a changing interest rate environment, the Trust may purchase or sell financial futures contracts or engage in transactions involving interest rate swaps, caps, floors or collars. The trust expects to enter into these transactions primarily as a hedge against anticipated interest rate or fixed-income market changes, for duration management or for risk management purposes, but may also enter into these transactions to generate additional income. All of the Trust's portfolio holdings, including derivative instruments, are marked to market each day with the change in value reflected in the unrealized appreciation/depreciation. Upon disposition, a realized gain or loss is recognized accordingly, except when taking delivery of a security underlying a futures contract. In this instance, the recognition of gain or loss is postponed until the disposal of the security underlying the futures contract. Risks may arise as a result of the potential inability of the counterparties to meet the terms of their contracts. During the period, the Trust invested in futures contracts, a type of derivative. A futures contract is an agreement involving the delivery of a particular asset on a specified future date at an agreed upon price. The Trust generally invests in exchange traded futures contracts on U.S. Treasury Bonds and Notes and typically closes the contract prior to the delivery date. Futures contracts are valued at the settlement price established each day on the exchange on which they are traded. Upon entering into futures contracts, the Trust maintains an amount of cash or liquid securities with a value equal to a percentage of the contract amount with either a future commission merchant pursuant to rules and regulations promulgated under the 1940 Act, as amended, or with its custodian in an account in the broker's name. This amount is known as initial margin. During the period the futures contract is open, payments are received from or made to the broker based upon changes in the value of the contract (the variation margin). The risk of loss associated with a futures contract is in excess of the variation margin reflected on the Statement of Assets and Liabilities. Transactions in futures contracts for the six months ended April 30, 2003, were as follows:
CONTRACTS Outstanding at October 31, 2002............................. 1,063 Futures Opened.............................................. 1,056 Futures Closed.............................................. (1,624) ------ Outstanding at April 30, 2003............................... 495 ======
34 NOTES TO FINANCIAL STATEMENTS April 30, 2003 (Unaudited) The futures contracts outstanding as of April 30, 2003, and the descriptions and unrealized appreciation/depreciation are as follows:
UNREALIZED CONTRACTS DEPRECIATION Short Contracts: U.S. Treasury Notes 10-Year Futures June 2003 (Current Notional Value of $115,125 per contract)................ 95 $ (27,863) U.S. Treasury Notes 5-Year Futures June 2003 (Current Notional Value of $113,750 per contract)................ 400 (175,572) ---- --------- 495 $(203,435) ==== =========
5. PREFERRED SHARES The Trust has outstanding 12,000 Auction Preferred Shares ("APS") in four series of 3,000 shares each. Dividends are cumulative and the dividend rate is periodically reset through an auction process. The dividend periods for Series A and C are generally seven days. The dividend periods for Series B and D are 28 days. The average rate in effect on April 30, 2003 was 1.140%. During the six months ended April 30, 2003, the rates ranged from 0.710% to 1.750%. The Trust pays annual fees equivalent to .25% of the preferred share liquidation value for the remarketing efforts associated with the preferred auctions. These fees are included as a component of "Preferred Share Maintenance" expense in the Statement of Operations. The APS are redeemable at the option of the Trust in whole or in part at the liquidation value of $25,000 per share plus accumulated and unpaid dividends. The Trust is subject to certain asset coverage tests, and the APS are subject to mandatory redemption if the tests are not met. 35 DIVIDEND REINVESTMENT PLAN The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which Common Shareholders may elect to have dividends and capital gains distributions reinvested in Common Shares of the Trust. The Trust declares dividends out of net investment income, and will distribute annually net realized capital gains, if any. Common Shareholders may join or withdraw from the Plan at any time. If you decide to participate in the Plan, State Street Bank and Trust Company, as your Plan Agent, will automatically invest your dividends and capital gains distributions in Common Shares of the Trust for your account. HOW TO PARTICIPATE If you wish to participate and your shares are held in your own name, call 1-800-341-2929 for more information and a Plan brochure. If your shares are held in the name of a brokerage firm, bank, or other nominee, you should contact your nominee to see if it would participate in the Plan on your behalf. If you wish to participate in the Plan, but your brokerage firm, bank or nominee is unable to participate on your behalf, you should request that your shares be re-registered in your own name which will enable your participation in the Plan. HOW THE PLAN WORKS Participants in the Plan will receive the equivalent in Common Shares valued on the valuation date, generally at the lower of market price or net asset value, except as specified below. The valuation date will be the dividend or distribution payment date or, if that date is not a trading day on the national securities exchange or market system on which the Common Shares are listed for trading, the next preceding trading day. If the market price per Common Share on the valuation date equals or exceeds net asset value per Common Share on that date, the Trust will issue new Common Shares to participants valued at the higher of net asset value or 95% of the market price on the valuation date. In the foregoing situation, the Trust will not issue Common Shares under the Plan below net asset value. If net asset value per Common Share on the valuation date exceeds the market price per Common Share on that date, or if the Board of Trustees should declare a dividend or capital gains distribution payable to the Common Shareholders only in cash, participants in the Plan will be deemed to have elected to receive Common Shares from the Trust valued at the market price on that date. Accordingly, in this circumstance, the Plan Agent will, as agent for the participants, buy the Trust's Common Shares in the open market for the participants' accounts on or shortly after the payment date. If, before the Plan Agent has completed its purchases, the market price exceeds the net asset value per share of the Common Shares, the average per share purchase price paid by the Plan Agent may exceed the net asset value of the Trust's Common Shares, resulting in 36 the acquisition of fewer Common Shares than if the dividend or distribution had been paid in Common Shares issued by the Trust. All reinvestments are in full and fractional Common Shares and are carried to three decimal places. Experience under the Plan may indicate that changes are desirable. Accordingly, the Trust reserves the right to amend or terminate the Plan as applied to any dividend or distribution paid subsequent to written notice of the changes sent to all Common Shareholders of the Trust at least 90 days before the record date for the dividend or distribution. The Plan also may be amended or terminated by the Plan Agent by at least 90 days written notice to all Common Shareholders of the Trust. COSTS OF THE PLAN The Plan Agent's fees for the handling of the reinvestment of dividends and distributions will be paid by the Trust. However, each participant will pay a prorata share of brokerage commissions incurred with respect to the Plan Agent's open market purchases in connection with the reinvestment of dividends and distributions. No other charges will be made to participants for reinvesting dividends or capital gains distributions, except for certain brokerage commissions, as described above. TAX IMPLICATIONS You will receive tax information annually for your personal records and to help you prepare your federal income tax return. The automatic reinvestment of dividends and capital gains distributions does not relieve you of any income tax which may be payable on dividends or distributions. RIGHT TO WITHDRAW Plan participants may withdraw at any time by calling 1-800-341-2929 or by writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA 02266-8200. If you withdraw, you will receive, without charge, a share certificate issued in your name for all full Common Shares credited to your account under the Plan and a cash payment will be made for any fractional Common Share credited to your account under the Plan. You may again elect to participate in the Plan at any time by calling 1-800-341-2929 or writing to the Trust at: Van Kampen Funds Inc. Attn: Closed-End Funds 2800 Post Oak Blvd. Houston, TX 77056 37 BOARD OF TRUSTEES AND IMPORTANT ADDRESSES VAN KAMPEN MUNICIPAL TRUST BOARD OF TRUSTEES DAVID C. ARCH ROD DAMMEYER HOWARD J KERR THEODORE A. MYERS RICHARD F. POWERS, III* - Chairman HUGO F. SONNENSCHEIN WAYNE W. WHALEN* INVESTMENT ADVISER VAN KAMPEN INVESTMENT ADVISORY CORP. 1 Parkview Plaza P.O. Box 5555 Oakbrook Terrace, IL 60181-5555 CUSTODIAN AND TRANSFER AGENT STATE STREET BANK AND TRUST COMPANY c/o EquiServe P.O. Box 43011 Providence, Rhode Island 02940-3011 LEGAL COUNSEL SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS) 333 West Wacker Drive Chicago, Illinois 60606 INDEPENDENT AUDITORS DELOITTE & TOUCHE LLP 180 North Stetson Avenue Chicago, Illinois 60601 * "Interested persons" of the Trust, as defined in the Investment Company Act of 1940, as amended. 38 Van Kampen Privacy Notice The Van Kampen companies and investment products* respect your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain nonpublic personal information about you. This is information we collect from you on applications or other forms, and from the transactions you make with us, our affiliates, or third parties. We may also collect information you provide when using our web site, and text files (a.k.a. "cookies") may be placed on your computer to help us to recognize you and to facilitate transactions you initiate. We do not disclose any nonpublic personal information about you or any of our former customers to anyone, except as permitted by law. For instance, so that we may continue to offer you Van Kampen investment products and services that meet your investing needs, and to effect transactions that you request or authorize, we may disclose the information we collect to companies that perform services on our behalf, such as printers and mailers that assist us in the distribution of investor materials. These companies will use this information only for the services for which we hired them, and are not permitted to use or share this information for any other purpose. To protect your nonpublic personal information internally, we permit access to it only by authorized employees, and maintain physical, electronic and procedural safeguards to guard your nonpublic personal information. * Includes Van Kampen Investments Inc., Van Kampen Investment Advisory Corp., Van Kampen Asset Management Inc., Van Kampen Advisors Inc., Van Kampen Management Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc., Van Kampen Trust Company, Van Kampen System Inc. and Van Kampen Exchange Corp., as well as the many Van Kampen mutual funds and Van Kampen unit investment trusts. Van Kampen Funds Inc. 1 Parkview Plaza, P.O. Box 5555 Oakbrook Terrace, IL 60181-5555 www.vankampen.com [VAN KAMPEN INVESTMENTS LOGO] Copyright (C)2003 Van Kampen Funds Inc. All rights reserved. VKQ SAR 6/03 Member NASD/SIPC. 11179F03-AS-6/03 Item 2. Code of Ethics. Not applicable for semi-annual reports. Item 3. Audit Committee Financial Expert. Not applicable for semi-annual reports. Item 4. Principal Accountant Fees and Services. Not applicable for semi-annual reports. Item 5. Audit Committee of Listed Registrants. Not applicable for semi-annual reports. Item 6. [Reserved.] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Not applicable for semi-annual reports. Item 8. [Reserved.] Item 9. The Trust's principal executive officer and principal financial officer have concluded that the Trust's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust 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 Trust's internal controls or in other factors that could significantly affect the Trust's internal controls subsequent to the date of their evaluation. Item 10. Exhibits. (a) Code of Ethics - Not applicable for semi-annual reports. (b) Certifications of Principal Executive Officer and Principal Financial Officer attached hereto as part of EX-99.CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Van Kampen Municipal Trust ------------------------------------------------------------------- By: /s/ Ronald E. Robison ---------------------------------------------------------------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: June 23, 2003 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. By: /s/ Ronald E. Robison ---------------------------------------------------------------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: June 23, 2003 By: /s/ John L. Sullivan ---------------------------------------------------------------------------- Name: John Sullivan Title: Principal Financial Officer Date: June 23, 2003 EX-99.CERT 3 c77313exv99wcert.txt CERTIFICATION I, Ronald E. Robison, certify that: 1. I have reviewed this report on Form N-CSR of Van Kampen Municipal 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-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures 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) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; 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; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 23, 2003 /s/ Ronald E. Robison --------------------------- Principal Executive Officer 1 I, John Sullivan, certify that: 1. I have reviewed this report on Form N-CSR of Van Kampen Municipal 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-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures 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) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; 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; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 23, 2003 /s/ John L. Sullivan --------------------------- Principal Financial Officer 2 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Name of Issuer: Van Kampen Municipal Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended April 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: June 23, 2003 /s/ Ronald E. Robison ---------------------- Ronald E. Robison Principal Executive Officer A signed original of this written statement requires by Section 906 has been provided to Van Kampen Municipal Trust and will be retained by Van Kampen Municipal Trust and furnished to the Securities and Exchange Commission or its staff upon request. 3 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Name of Issuer: Van Kampen Municipal Trust In connection with the Report on Form N-CSR (the "Report") of the above-named issuer for the period ended April 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: June 23, 2003 /s/ John L. Sullivan --------------------- John Sullivan Principal Financial Officer A signed original of this written statement requires by Section 906 has been provided to Van Kampen Municipal Trust and will be retained by Van Kampen Municipal Trust and furnished to the Securities and Exchange Commission or its staff upon request. 4 -----END PRIVACY-ENHANCED MESSAGE-----