-----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, P5CerxYHEqabSsH3uNO3B79HlgxqRIBvc32Gdm7fn79CU2mYFcuxzHPFCAmBM6HE fGiYwVcuHgRa929SOaGwqQ== 0000950123-10-089922.txt : 20100929 0000950123-10-089922.hdr.sgml : 20100929 20100929113228 ACCESSION NUMBER: 0000950123-10-089922 CONFORMED SUBMISSION TYPE: N-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20100731 FILED AS OF DATE: 20100929 DATE AS OF CHANGE: 20100929 EFFECTIVENESS DATE: 20100929 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Invesco Insured Municipal Securities CENTRAL INDEX KEY: 0000913345 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-Q SEC ACT: 1940 Act SEC FILE NUMBER: 811-07109 FILM NUMBER: 101095443 BUSINESS ADDRESS: STREET 1: 522 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 800-869-6397 MAIL ADDRESS: STREET 1: 522 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10036 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY INSURED MUNICIPAL SECURITIES DATE OF NAME CHANGE: 20011220 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY INSURED MUNICIPAL SECURITIES DATE OF NAME CHANGE: 20011220 FORMER COMPANY: FORMER CONFORMED NAME: MORGAN STANLEY DEAN WITTER INSURED MUNICIPAL SECURITIES DATE OF NAME CHANGE: 19981221 N-Q 1 h76463invq.htm N-Q nvq
     
 
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT
INVESTMENT COMPANY
Investment Company Act file number 811-07109
Invesco Insured Municipal Securities
 
(Exact name of registrant as specified in charter)
1555 Peachtree Street, N.E., Atlanta, Georgia 30309
 
(Address of principal executive offices) (Zip code)
Philip A. Taylor 1555 Peachtree Street, N.E., Atlanta, Georgia 30309
 
(Name and address of agent for service)
Registrant’s telephone number, including area code: (713) 626-1919
Date of fiscal year end: 10/31
Date of reporting period: 07/31/10
 
 


 


 

Invesco Insured Municipal Securities Fund
Quarterly Schedule of Portfolio Holdings July 31, 2010
(INVESCO LOGO)
invesco.com/us           MS-CE-IMS-QTR-1 07/10            Invesco Advisers, Inc.

 


 

Schedule of Investments
July 31, 2010 (unaudited)
                                         
                            Principal        
    Interest     Maturity             Amount        
    Rate     Date             (000)     Value  
 
Municipal Obligations (101.6%)
                                       
Alaska (1.4%)
                                       
Alaska Industrial Development & Export Authority, Lake Dorothy Hydorelectric Project (AMT) (AMBAC Insd) (a)
    5.25 %     12/01/26             $ 1,350     $ 1,302,547  
 
                                     
Arizona (2.4%)
                                       
Glendale Industrial Development Authority, Midwestern University, Ser 2010
    5.00       05/15/35               100       99,711  
Glendale Industrial Development Authority, Midwestern University, Ser 2010
    5.125       05/15/40               100       100,489  
Phoenix Civic Improvement Corp., Sr Lien Airport Ser 2002 B (AMT) (NATL-RE & FGIC Insd) (a)
    5.75       07/01/18               1,500       1,561,230  
State of Arizona, Ser 2008 A (COP) (AGM Insd) (a)
    5.00       09/01/26               210       218,938  
State of Arizona, Ser 2008 A (COP) (AGM Insd) (a)
    5.00       09/01/27               300       308,277  
 
                                     
 
                                    2,288,645  
 
                                     
California (19.5%)
                                       
Alameda County Joint Powers Authority, Ser 2008 (AGM Insd) (a)
    5.00       12/01/24               465       489,603  
Beverly Hills Unified School District, Election of 2008 Ser 2009 (b)
    0.00       08/01/26               375       172,009  
Beverly Hills Unified School District, Election of 2008 Ser 2009 (b)
    0.00       08/01/31               725       242,650  
California Health Facilities Financing Authority, Scripps Memorial Hospital Ser 2010 A
    5.00       11/15/36               500       502,920  
City & County of San Francisco, City Buildings Ser 2007 A (COP) (NATL-RE & FGIC Insd) (a)
    4.50       09/01/37               1,000       935,350  
City of Irvine, Limited Obligation Ser 85-7 A (AGM Insd) (a)
    0.30       09/02/32               500       500,000  
Clovis Unified School District, Election of 2004 Ser A (NATL-RE & FGIC Insd) (a)(b)
    0.00       08/01/29               190       63,283  
El Segundo Unified School District, Election of 2008 Ser 2009 A (b)
    0.00       08/01/31               970       275,713  
Fontana Unified School District, Ser 2008 B (AGM Insd) (a)(b)
    0.00       08/01/29               1,605       523,824  
Golden State Tobacco Securitization Corp., Enhanced Asset Backed Ser 2005 A (FGIC Insd) (a)
    5.00       06/01/38               2,000       1,866,260  
Huntington Beach Union High School District, Ser 2004 (AGM Insd) (a)
    5.00       08/01/26               2,000       2,089,860  
Los Angeles Department of Water & Power, Ser 2004 C (NATL-RE Insd) (a)
    5.00       07/01/25               1,000       1,058,410  
Roseville Joint Union High School District, Election of 2004 Ser 2007 C (AGM Insd) (a)(b)
    0.00       08/01/26               1,425       581,329  
Sacramento Regional County Sanitation District, Ser 2006 (NATL-RE & FGIC Insd) (a)
    5.00       12/01/28               1,000       1,042,020  
San Jose Evergreen Community College District, Election Ser 2008 B (AGM Insd) (a)(b)
    0.00       09/01/30               1,600       477,456  
San Juan Unified School District, Election of 2002
    5.00       08/01/30               1,525       1,595,882  
Southern California Public Power Authority, Magnolia Power Project Ser A 2003 1 (AMBAC Insd) (a)
    5.00       07/01/21               3,500       3,758,825  
Twin Rivers Unified School District, Ser 2009 (BANs) (b)
    0.00       04/01/14               450       407,898  
University of California, Ser 2007 J (AGM Insd) (a)
    4.50       05/15/31               2,000       2,013,560  
 
                                     
 
                                    18,596,852  
 
                                     
Colorado (4.3%)
                                       
Arkansas River Power Authority, Power Ser 2006 (XLCA Insd) (a)
    5.25       10/01/40               1,200       1,106,388  
City & County of Denver, Airport Refg Ser 2000 A (AMT) (AMBAC Insd) (a)
    6.00       11/15/18               3,000       3,038,760  
 
                                     
 
                                    4,145,148  
 
                                     
Connecticut (0.5%)
                                       
Connecticut State Health & Educational Facility Authority, Quinnipiac University Issue Ser 2007 K-2 (NATL-RE Insd) (a)
    5.00       07/01/25               475       500,850  
 
                                     
See accompanying notes which are an integral part of this schedule.
         
1   Invesco Insured Municipal Securities    

 


 

Schedule of Investments
July 31, 2010 (unaudited)
                                         
                            Principal        
    Interest     Maturity             Amount        
    Rate     Date             (000)     Value  
 
District of Columbia (1.6%)
                                       
District of Columbia Water & Sewer Authority, Refg Sub-Lien Ser 2008 A (AGC Insd) (a)
    5.00 %     10/01/28             $ 425     $ 454,958  
Metropolitan Washington Airports Authority, Ser 2004 C-1 (AMT) (AGM Insd) (a)
    5.00       10/01/20               1,000       1,055,890  
 
                                     
 
                                    1,510,848  
 
                                     
Florida (10.5%)
                                       
Broward County Educational Facilities Authority, Nova Southeastern University Ser 2006 (AGC Insd) (a)
    5.00       04/01/31               2,000       2,002,800  
Broward County School Board, Ser 2001 A (COP) (AGM Insd) (a)
    5.00       07/01/26               4,000       4,034,040  
Citizens Property Insurance Corp., High Risk Ser A-1
    5.00       06/01/14               700       744,128  
City of Jacksonville, Ser 2003 C (AMT) (NATL-RE Insd) (a)
    5.25       10/01/20               1,700       1,750,932  
City of Port St Lucie, Utility System Refg Ser 2009 (AGC Insd) (a)
    5.00       09/01/29               500       513,700  
County of Miami-Dade, Water & Sewer (AGM Insd) (a)
    5.00       10/01/39               500       515,865  
Mid-Bay Bridge Authority, Refg Ser 2008 A (AGC Insd) (a)
    5.00       10/01/27               485       495,738  
 
                                     
 
                                    10,057,203  
 
                                     
Hawaii (5.4%)
                                       
City & County of Honolulu, Ser 2003 A (NATL-RE Insd) (a)(c)
    5.25       03/01/26               2,000       2,119,940  
Hawaii State Department of Budget & Finance, Hawaiian Electric Co. Inc. Refg Ser 2003 B (AMT) (XLCA Insd) (a)
    5.00       12/01/22               3,000       3,012,420  
 
                                     
 
                                    5,132,360  
 
                                     
Idaho (0.9%)
                                       
Idaho Housing & Finance Association, Federal Highway Trust Ser 2008 A (RANs) (AGC Insd) (a)
    5.25       07/15/25               790       871,441  
 
                                     
Illinois (10.2%)
                                       
Chicago Transit Authority, Federal Transit Administration Section 5309 Ser 2008 (AGC Insd) (a)
    5.25       06/01/26               525       551,964  
City of Chicago, O’Hare Int’l Airport Passenger Fee Ser 2001 A (AMT) (AMBAC Insd) (a)
    5.375       01/01/32               2,000       2,000,040  
Du Page County Community Unit School District No. 200 Wheaton, Warrenville Ser 2003 C (AGM Insd) (a)
    5.25       10/01/22               485       538,801  
Illinois Finance Authority, Northwestern Memorial Hospital Ser 2009 B
    5.375       08/15/24               505       548,455  
Illinois Finance Authority, Swedish Covenant Hospital Ser 2010 A
    5.75       08/15/29               400       404,672  
Metropolitan Pier & Exposition Authority, McCormick Place Ser 2002 A (NATL-RE Insd) (a)
    5.25       06/15/42               2,500       2,519,050  
State of Illinois, First Ser 2002 (NATL-RE Insd) (a)
    5.375       07/01/21               3,000       3,178,290  
 
                                     
 
                                    9,741,272  
 
                                     
Iowa (1.4%)
                                       
State of Iowa, IJOBS Program Ser 2009 A (c)(d)
    5.00       06/01/25               700       774,137  
State of Iowa, IJOBS Program Ser 2009 A (c)(d)
    5.00       06/01/26               525       575,605  
 
                                     
 
                                    1,349,742  
 
                                     
Kansas (0.5%)
                                       
Wyandotte County-Kansas City Unified Government, Utility System Improvement, Ser 2009 A (BHAC Insd) (a)
    5.25       09/01/34               410       438,007  
 
                                     
Kentucky (1.4%)
                                       
Louisville & Jefferson County Visitors and Convention Commission, Ser 2004 B (AGM Insd) (a)(e)(f)
    0.27       12/01/22               1,345       1,345,000  
 
                                     
Louisiana (0.5%)
                                       
Louisiana Offshore Terminal Authority, Revenue Bonds, Deepwater Port Ser 2007 B-2
    4.30       10/01/37               500       509,270  
 
                                     
See accompanying notes which are an integral part of this schedule.
         
2   Invesco Insured Municipal Securities    

 


 

Schedule of Investments
July 31, 2010 (unaudited)
                                         
                            Principal        
    Interest     Maturity             Amount        
    Rate     Date             (000)     Value  
 
Massachusetts (3.0%)
                                       
Massachusetts Development Finance Agency, Ser 2001 A (NATL-RE Insd) (a)
    5.625 %     01/01/16             $ 2,750     $ 2,840,062  
 
                                     
Michigan (3.2%)
                                       
City of Detroit, Water Supply Sr Lien Ser 2001 A (NATL-RE & FGIC Insd) (a)
    5.00       07/01/30               2,000       1,989,940  
Wayne State University, Refg Ser 2008 (AGM Insd) (a)
    5.00       11/15/29               560       591,461  
Western Michigan University, Ser 2008 (AGM Insd) (a)
    5.00       11/15/23               450       486,508  
 
                                     
 
                                    3,067,909  
 
                                     
New Jersey (1.9%)
                                       
New Jersey Economic Development Authority, School Facilities Construction Ser N-1 (AMBAC Insd) (a)
    5.50       09/01/24               465       534,927  
New Jersey Economic Development Authority, Student Housing Project Ser 2010 A
    5.875       06/01/42               210       213,192  
New Jersey State Turnpike Authority, Ser 2003 A (NATL-RE & FGIC Insd) (a)
    5.00       01/01/27               1,000       1,031,720  
 
                                     
 
                                    1,779,839  
 
                                     
New York (9.6%)
                                       
City of New York, Ser 2001 A-6 (AGM Insd) (a)(e)(f)
    0.30       11/01/26               2,100       2,100,000  
New York City Health & Hospital Corp., 2003 Ser B (AMBAC Insd) (a)
    5.25       02/15/21               3,000       3,235,860  
New York City Municipal Water Finance Authority, Ser 2005 C (NATL-RE Insd) (a)
    5.00       06/15/27               1,000       1,061,590  
New York State Dormitory Authority, Hospital — FHA Insured Mtge 2004 Ser A (AGM Insd) (a)
    5.25       08/15/19               1,100       1,187,615  
New York State Dormitory Authority, New York University (AMBAC Insd) (a)
    5.50       05/15/29               365       407,720  
New York State Dormitory Authority, New York University Ser 1 (CR) (BHAC & AMBAC Insd) (a)
    5.50       07/01/31               1,040       1,208,168  
 
                                     
 
                                    9,200,953  
 
                                     
Ohio (2.0%)
                                       
City of Cleveland, Public Power System Ser 2008 B-1 (NATL-RE Insd) (a)(b)
    0.00       11/15/26               1,275       556,499  
County of Erie, Firelands Regional Medical Center Ser 2002
    5.625       08/15/32               1,000       978,350  
Ohio State Water Development Authority, Pollution Control Facilities Ser 2009 A
    5.875       06/01/33               135       149,256  
State of Ohio Higher Educational Facility Commission, Summa Health Systems Ser 2010
    5.75       11/15/35               225       225,646  
 
                                     
 
                                    1,909,751  
 
                                     
Oregon (1.3%)
                                       
Oregon State Department of Administrative Services, Ser 2005 B (COP) (NATL-RE & FGIC Insd) (a)
    5.00       11/01/22               1,120       1,207,326  
 
                                     
Pennsylvania (2.7%)
                                       
Pennsylvania Economic Development Financing Authority, Ser A
    3.70       11/01/21               450       454,284  
Pennsylvania Turnpike Commission, Ser 2004 A (AMBAC Insd) (a)
    5.00       12/01/34               1,000       1,009,820  
Philadelphia School District, Ser 2008 E (BHAC Insd) (a)
    5.125       09/01/23               1,000       1,106,650  
 
                                     
 
                                    2,570,754  
 
                                     
Puerto Rico (1.0%)
                                       
Puerto Rico Sales Tax Financing Corp., Ser 2009 A
    5.00       08/01/11               455       476,749  
Puerto Rico Sales Tax Financing Corp., Ser 2010 C
    5.25       08/01/41               500       502,510  
 
                                     
 
                                    979,259  
 
                                     
South Carolina (1.2%)
                                       
South Carolina State Public Service Authority, Santee Cooper Ser 2003 A (AMBAC Insd) (a)
    5.00       01/01/21               1,000       1,097,640  
 
                                     
Texas (8.6%)
                                       
Capital Area Cultural Education Facilities Finance Corp., Roman Catholic Diocese Ser 2005 B
    6.125       04/01/45               200       202,086  
See accompanying notes which are an integral part of this schedule.
         
3   Invesco Insured Municipal Securities    

 


 

Schedule of Investments
July 31, 2010 (unaudited)
                                         
                            Principal        
    Interest     Maturity             Amount        
    Rate     Date             (000)     Value  
 
City of Houston, Combined Utility First Lien Refg 2004 Ser A (NATL-RE & FGIC Insd) (a)
    5.25 %     05/15/23             $ 1,730     $ 1,895,820  
City of Houston, Ser 2001 B (CR) (AGM & AMBAC Insd) (a)(b)
    0.00       09/01/27               1,400       568,946  
City of San Antonio, Water & Refg Ser 2002 (AGM Insd) (a)
    5.00       05/15/28               2,000       2,080,960  
City of San Antonio, Water & Refg Ser 2002 A (AGM Insd) (a)
    5.00       05/15/32               950       972,050  
Dallas Area Rapid Transit, Senior Lien (AMBAC Insd) (a)
    5.00       12/01/26               665       677,921  
Friendswood Independent School District, Schoolhouse Ser 2008 (PSF-GTD)
    5.00       02/15/27               310       338,973  
Houston Community College System, Senior Lien Student Fee Ser 2008 (AGM Insd) (a)
    5.00       04/15/25               460       500,084  
North Texas Tollway Authority, Refg First Tier 2008 D (AGC Insd) (a)(b)
    0.00       01/01/29               2,725       1,012,119  
 
                                     
 
                                    8,248,959  
 
                                     
Washington (6.1%)
                                       
Cowlitz County Public Utility District No. 1, Production Ser 2006 (NATL-RE Insd) (a)
    5.00       09/01/31               1,000       1,017,530  
Port of Seattle, Passenger Facility Ser 1998 A (NATL-RE Insd) (a)
    5.00       12/01/23               2,010       2,014,301  
State of Washington, Various Purpose Ser 2010 A (c)
    5.00       08/01/29               1,225       1,339,611  
State of Washington, Various Purpose Ser 2010 A (c)
    5.00       08/01/30               1,290       1,400,437  
 
                                     
 
                                    5,771,879  
 
                                     
West Virginia (0.5%)
                                       
West Virginia Economic Development Authority, Solid Waste Disposable Facility Ser 2010 A
    5.375       12/01/38               450       451,913  
 
                                     
Total Investments (Cost $94,096,760)
    101.6 %             96,915,429  
Other Assets Less Liabilities
    2.1               1,986,858  
 
                                       
Floating Rate Note and Dealer Trusts Obligations Related to Securities Held
                       
 
                                       
Notes with interest rates ranging from 0.28% to 0.29% at 07/31/10 and contractual maturities of collateral ranging from 06/01/25 to 08/01/30 (g)
    (3.7 )             (3,500,000 )
 
                                   
Net Assets
    100.0 %           $ 95,402,287  
 
                                   
Investment Abbreviations:

AGC   Assured Guaranty Corporation.
 
AGM   Assured Guaranty Municipal Corporation.
 
AMBAC   AMBAC Assurance Corporation.
 
AMT   Alternative Minimum Tax.
 
BANs   Bond Anticipation Notes.
 
BHAC   Berkshire Hathaway Assurance Corporation.
 
COP   Certificates of Participation.
 
CR   Custodial Receipts.
 
FGIC   Financial Guaranty Insurance Company.
 
FHA   Federal Housing Administration.
 
NATL-RE   National Public Finance Guarantee Corporation.
 
PSF   Texas Permanent School Fund Guarantee Program.
 
RANs   Revenue Anticipation Notes.
 
XLCA   XL Capital Assurance Inc.
 
Notes to Schedule of Investments:
 
(a)   Principal and/or interest payments are secured by the bond insurance company listed.
 
(b)   Capital appreciation bond.
 
(c)   Underlying security related to Special Purpose Trust entered into by the Fund. See Note 1D.
 
(d)   Security is subject to a shortfall agreement which may require the Trust to pay amounts to a counterparty in the event of a significant decline in the market value of the security underlying the inverse floater. In case of a shortfall, the maximum potential amount of payments the Trust could ultimately be required to make under the agreement is $825,000. However, such shortfall payment would be reduced by the proceeds from the sale of the security underlying the inverse floater.
 
(e)   Demand security payable upon demand by the Fund at specified time intervals no greater than thirteen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on June 30, 2010.
 
(f)   Security is considered a cash equivalent.
 
(g)   Floating rate note obligations related to securities held. The interest rates shown reflect the rates in effect at July 31, 2010. At July 31, 2010, the Fund’s investments with a value of $6,209,730 are held by the Dealer Trusts and serve as collateral for the $3,500,000 in floating rate note and dealer trust obligations outstanding at that date.
See accompanying notes which are an integral part of this schedule.
         
4   Invesco Insured Municipal Securities    

 


 

Notes to Quarterly Schedule of Portfolio Holdings
July 31, 2010
(Unaudited)
NOTE 1 — Significant Accounting Policies
A.   Security Valuations – Securities, including restricted securities, are valued according to the following policy.
         Securities are fair valued using an evaluated quote provided by an independent pricing service approved by the Board of Trustees. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices and may reflect appropriate factors such as institution-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Securities with a demand feature exercisable within one to seven days are valued at par. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and principal payments.
         Securities for which market quotations either are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on transferability or disposition; trading in similar securities by the same issuer or comparable companies; relevant political, economic or issuer specific news; and other relevant factors under the circumstances.
         Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.   Securities Transactions and Investment Income – Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
         The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain/loss for investments no longer held and as unrealized gain/loss for investments still held.
C.   Country Determination – For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.   Floating Rate Obligations Related to Securities Held – The Fund enters into transactions in which it transfers to Special Purpose Trusts established by a Broker Dealer (“Dealer Trusts”) fixed rate bonds in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate investments. The Dealer Trusts fund the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Fund to retain residual interest in the bonds. The Fund may enter into shortfall agreements with the Dealer Trusts which commit the Fund to pay the Dealer Trusts, in certain circumstances, the difference between the liquidation value of the fixed rate bonds held by the Dealer Trusts and the liquidation value of the floating rate notes held by third parties, as well as any shortfalls in interest cash flows. The residual interests held by the Fund (inverse floating rate investments) include the right of the Fund (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Fund, thereby collapsing the Dealer Trusts. The Fund accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Fund’s investment assets, and the related floating rate notes reflected as Fund liabilities under the caption “Floating rate note and dealer trust obligations” on the Statement of Assets and Liabilities. The Fund records the interest income from the fixed rate bonds under the caption “Interest” and records the expenses
Invesco Insured Municipal Securities

 


 

    related to floating rate obligations and any administrative expenses of the Dealer Trusts under the caption “Interest and residual trust expenses” on the Statement of Operations. The floating rate notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date.
NOTE 2 — Additional Valuation Information
Generally Accepted Accounting Principles (“GAAP”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:
  Level 1 –   Prices are determined using quoted prices in an active market for identical assets.
 
  Level 2 –   Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
 
  Level 3 –   Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.
     The following is a summary of the tiered valuation input levels, as of July 31, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
                                 
    Level 1*   Level 2*   Level 3   Total
 
Municipal Obligations
  $     $ 96,915,429     $     $ 96,915,429  
 
 
*   Transfers occurred between Level 1 and Level 2 due to foreign fair value adjustments.
 
**   Unrealized appreciation (depreciation).
NOTE 3 — Investment Securities
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
         
Aggregate unrealized appreciation of investment securities
  $ 3,419,245  
 
Aggregate unrealized (depreciation) of investment securities
    (606,834 )
 
Net unrealized appreciation of investment securities
  $ 2,812,411  
 
Cost of investments for tax purposes is $94,103,018.
       
Invesco Insured Municipal Securities

 


 

Item 2. Controls and Procedures.
  (a)   As of September 16, 2010, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), to assess the effectiveness of the Registrant’s disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (“Act”), as amended. Based on that evaluation, the Registrant’s officers, including the PEO and PFO, concluded that, as of , September 16, 2010, the Registrant’s disclosure controls and procedures were reasonably designed so as to ensure: (1) that information required to be disclosed by the Registrant on Form N-Q is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure.
 
  (b)   There have been no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 3. Exhibits.
    Certifications of PEO and PFO as required by Rule 30a-2(a) under the Investment Company Act of 1940.

 


 

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: Invesco Insured Municipal Securities
       
By:   /s/ Philip A. Taylor    
  Philip A. Taylor   
  Principal Executive Officer   
Date: September 29, 2010
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
       
By:   /s/ Philip A. Taylor    
  Philip A. Taylor   
  Principal Executive Officer   
Date: September 29, 2010
       
By:   /s/ Philip A. Taylor    
  Sheri Morris   
  Principal Financial Officer   
Date: September 29, 2010


 

EXHIBIT INDEX
Certifications of Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”) as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended.

 

EX-99.CERT 2 h76463iexv99wcert.htm EX-99.CERT exv99wcert
I, Philip A. Taylor, Principal Executive Officer, certify that:
1. I have reviewed this report on Form N-Q of Invesco Insured Municipal Securities;
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 schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidating subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in this registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of trustees (or persons performing equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
         
     
Date: September 29, 2010  /s/ Philip A. Taylor    
  Philip A. Taylor, Principal Executive Officer   
     
 

 


 

I, Sheri Morris, Principal Financial Officer, certify that:
1. I have reviewed this report on Form N-Q of Invesco Insured Municipal Securities;
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 schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidating subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in this registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of trustees (or persons performing equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
         
     
Date: September 29, 2010  /s/ Sheri Morris    
  Sheri Morris, Principal Financial Officer   
     
 

 

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