Eaton Vance Michigan Municipal Income Trust

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

811-09141

Investment Company Act File Number

Eaton Vance Michigan Municipal Income Trust

(Exact Name of Registrant as Specified in Charter)

Two International Place, Boston, Massachusetts 02110

(Address of Principal Executive Offices)

Maureen A. Gemma

Two International Place, Boston, Massachusetts 02110

(Name and Address of Agent for Services)

(617) 482-8260

(Registrant’s Telephone Number, Including Area Code)

November 30

Date of Fiscal Year End

February 29, 2012

Date of Reporting Period

 

 

 

Item 1. Schedule of Investments

Eaton Vance

Michigan Municipal Income Trust

February 29, 2012

PORTFOLIO OF INVESTMENTS (Unaudited)

Tax-Exempt Investments — 152.5%

 

N(000.000.000 N(000.000.000
Security    Principal
Amount
(000’s omitted)		      Value  

Bond Bank — 2.3%

      

Michigan Municipal Bond Authority, (Clean Water Revenue), 5.00%, 10/1/29(1)

    $ 600       $ 689,448   
     

 

 

  
      $ 689,448   
     

 

 

  

Education — 9.7%

      

Grand Valley State University, 5.625%, 12/1/29

    $ 525       $ 589,712   

Grand Valley State University, 5.75%, 12/1/34

      525         591,817   

Michigan Higher Education Facilities Authority, (Hillsdale College), 5.00%, 3/1/35

      200         202,796   

Michigan State University, 5.00%, 2/15/40

      1,000         1,095,060   

Michigan State University, 5.00%, 2/15/44

      460         500,406   
     

 

 

  
      $     2,979,791   
     

 

 

  

Electric Utilities — 1.9%

      

Lansing Board of Water and Light, 5.50%, 7/1/41

    $ 500       $ 580,135   
     

 

 

  
      $ 580,135   
     

 

 

  

Escrowed/Prerefunded — 9.8%

      

East Grand Rapids Public Schools, Prerefunded to 5/1/12, 5.00%, 5/1/25

    $ 500       $ 504,195   

Macomb County Hospital Finance Authority, (Mount Clemens General Hospital), Prerefunded to 11/15/13, 5.875%, 11/15/34

      560         613,446   

Michigan Higher Education Facilities Authority, (Creative Studies), Prerefunded to 6/1/12, 5.90%, 12/1/27

          1,250         1,268,200   

Puerto Rico Electric Power Authority, Prerefunded to 7/1/12, 5.25%, 7/1/31

      600         616,434   
     

 

 

  
      $ 3,002,275   
     

 

 

  

General Obligations — 23.6%

      

Ann Arbor School District, 4.50%, 5/1/24

    $ 350       $ 377,486   

Charter County of Wayne, 6.75%, 11/1/39

      490         553,421   

Comstock Park Public Schools, 5.00%, 5/1/28

      230         258,490   

Comstock Park Public Schools, 5.125%, 5/1/31

      275         306,702   

Comstock Park Public Schools, 5.25%, 5/1/33

      220         244,587   

Jenison Public Schools, 5.00%, 5/1/28

      500         554,040   

Jenison Public Schools, 5.00%, 5/1/30

      500         549,530   

Kent County, 5.00%, 1/1/25

      1,500         1,703,535   

Kent County, (AMT), 5.00%, 1/1/28

      1,000         1,123,230   

Michigan, 5.00%, 11/1/20

      1,000         1,225,510   

Michigan, 5.50%, 11/1/25

      270         319,140   
     

 

 

  
      $ 7,215,671   
     

 

 

  

Hospital — 25.4%

      

Gaylord Hospital Finance Authority, (Otsego Memorial Hospital Association), 6.20%, 1/1/25

    $ 185       $ 185,076   

Gaylord Hospital Finance Authority, (Otsego Memorial Hospital Association), 6.50%, 1/1/37

      125         123,620   

Kent Hospital Finance Authority, (Spectrum Health), 5.50% to 1/15/15 (Put Date), 1/15/47

      275         310,434   

Mecosta County, (Michigan General Hospital), 6.00%, 5/15/18

      410         410,533   

Michigan Hospital Finance Authority, (Henry Ford Health System), 5.00%, 11/15/38

      675         688,135   

Michigan Hospital Finance Authority, (Henry Ford Health System), 5.25%, 11/15/46

      1,000         1,034,580   

Michigan Hospital Finance Authority, (McLaren Healthcare), 5.00%, 8/1/35

      1,080         1,104,646   

 

1

 

 

N(000.000.000 N(000.000.000
Security    Principal
Amount
(000’s omitted)		      Value  

Michigan Hospital Finance Authority, (Memorial Healthcare Center), 5.875%, 11/15/21

    $ 750       $ 751,072   

Michigan Hospital Finance Authority, (MidMichigan Obligated Group), 6.125%, 6/1/39

      500         556,155   

Michigan Hospital Finance Authority, (Trinity Health Corp.), 5.00%, 12/1/27

      1,000         1,131,970   

Monroe County Hospital Finance Authority, (Mercy Memorial Hospital Corp.), 5.375%, 6/1/26

      425         433,895   

Saginaw Hospital Finance Authority, (Covenant Medical Center, Inc.), 5.00%, 7/1/30

      1,000         1,027,730   
     

 

 

  
   $     7,757,846   
     

 

 

  

Housing — 1.8%

      

Michigan Housing Development Authority, 4.60%, 12/1/26

    $ 500       $ 536,185   
     

 

 

  
   $ 536,185   
     

 

 

  

Industrial Development Revenue — 4.8%

      

Detroit Local Development Finance Authority, (Chrysler Corp.), 5.375%, 5/1/21

    $ 750       $ 656,520   

Dickinson County Economic Development Corp., (International Paper Co.), 5.75%, 6/1/16

      800         807,904   
     

 

 

  
   $ 1,464,424   
     

 

 

  

Insured-Education — 5.5%

      

Ferris State University, (AGC), 5.125%, 10/1/33

    $ 570       $ 619,733   

Ferris State University, (AGC), 5.25%, 10/1/38

      500         540,530   

Wayne State University, (AGM), 5.00%, 11/15/35

      500         537,215   
     

 

 

  
   $ 1,697,478   
     

 

 

  

Insured-Electric Utilities — 5.7%

      

Michigan Strategic Fund, (Detroit Edison Co.), (XLCA), 5.25%, 12/15/32

    $ 400       $ 403,764   

Puerto Rico Electric Power Authority, (FGIC), (NPFG), 5.25%, 7/1/30

      220         257,371   

Puerto Rico Electric Power Authority, (FGIC), (NPFG), 5.25%, 7/1/32

      250         293,008   

Puerto Rico Electric Power Authority, (FGIC), (NPFG), 5.25%, 7/1/34

      250         284,840   

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/29

      435         508,180   
     

 

 

  
   $ 1,747,163   
     

 

 

  

Insured-General Obligations — 18.3%

      

Battle Creek School District, (AGM), 5.00%, 5/1/37

    $     1,105       $ 1,167,477   

Byron Center Public Schools, (AGM), 3.75%, 5/1/26

      650         668,993   

Byron Center Public Schools, (AGM), 4.00%, 5/1/28

      290         302,418   

Detroit School District, (AGM), 5.25%, 5/1/32

      300         334,491   

Detroit School District, (FGIC), 4.75%, 5/1/28

      650         650,344   

Hartland Consolidated Schools, (AGM), 5.25%, 5/1/29

      1,000         1,137,500   

Van Dyke Public Schools, (AGM), 5.00%, 5/1/38

      1,250         1,329,300   
     

 

 

  
   $ 5,590,523   
     

 

 

  

Insured-Hospital — 2.8%

      

Royal Oak Hospital Finance Authority, (William Beaumont Hospital), (NPFG), 5.25%, 11/15/35

    $ 860       $ 860,447   
     

 

 

  
   $ 860,447   
     

 

 

  

Insured-Lease Revenue/Certificates of Participation — 7.1%

      

Michigan Building Authority, (AGM), (FGIC), 0.00%, 10/15/29

    $ 1,000       $ 429,740   

Michigan Building Authority, (FGIC), (NPFG), 0.00%, 10/15/30

      4,300         1,739,866   
     

 

 

  
   $ 2,169,606   
     

 

 

  

Insured-Special Tax Revenue — 1.6%

      

Puerto Rico Sales Tax Financing Corp., (AMBAC), 0.00%, 8/1/54

    $ 2,545       $ 210,802   

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

      1,685         268,724   
     

 

 

  
   $ 479,526   
     

 

 

  

 

2

 

 

N(000.000.000 N(000.000.000
Security    Principal
Amount
(000’s omitted)		      Value  

Insured-Student Loan — 3.3%

  

Michigan Higher Education Student Loan Authority, (AMBAC), (AMT), 5.00%, 3/1/31

    $     1,000       $ 1,019,980   
     

 

 

  
   $ 1,019,980   
     

 

 

  

Insured-Transportation — 3.4%

      

Wayne County Airport Authority, (AGC), (AMT), 5.375%, 12/1/32

    $ 1,000       $ 1,050,120   
     

 

 

  
   $ 1,050,120   
     

 

 

  

Insured-Water and Sewer — 10.9%

      

Detroit, Sewage Disposal System, (AGC), (FGIC), 5.00%, 7/1/36

    $ 560       $ 574,778   

Detroit, Water Supply System, (FGIC), (NPFG), 5.00%, 7/1/30

      1,650         1,650,677   

Grand Rapids, Water Supply System, (AGC), 5.10%, 1/1/39

      1,000         1,096,200   
     

 

 

  
   $ 3,321,655   
     

 

 

  

Special Tax Revenue — 4.9%

      

Guam, Limited Obligation Bonds, 5.625%, 12/1/29

    $ 115       $ 123,033   

Guam, Limited Obligation Bonds, 5.75%, 12/1/34

      125         133,145   

Michigan Trunk Line Fund, 5.00%, 11/15/36

      1,000         1,128,250   

Virgin Islands Public Finance Authority, 6.75%, 10/1/37

      110         126,543   
     

 

 

  
   $ 1,510,971   
     

 

 

  

Water and Sewer — 9.7%

      

Ann Arbor, Sewage Disposal System, 4.75%, 7/1/32

    $ 320       $ 343,206   

Detroit, Water Supply System, 5.25%, 7/1/41

      750         784,020   

Grand Rapids, Sanitary Sewer System, 5.00%, 1/1/28

      790         978,391   

Michigan Municipal Bond Authority, (Clean Water Revenue), 5.00%, 10/1/30

      500         579,515   

Port Huron, Water Supply System, 5.25%, 10/1/31

      250         270,843   
     

 

 

  
   $ 2,955,975   
     

 

 

  

Total Tax-Exempt Investments — 152.5%
(identified cost $43,788,594)

       $ 46,629,219   
     

 

 

  

Auction Preferred Shares Plus Cumulative Unpaid Dividends — (57.2)%

  

    $     (17,500,820 ) 
     

 

 

  

Other Assets, Less Liabilities — 4.7%

  

    $ 1,455,245   
     

 

 

  

Net Assets Applicable to Common Shares — 100.0%

  

    $ 30,583,644   
     

 

 

  

The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.

 

AGC

   -   Assured Guaranty Corp.

AGM

   -   Assured Guaranty Municipal Corp.

AMBAC

   -   AMBAC Financial Group, Inc.

AMT

   -   Interest earned from these securities may be considered a tax preference item for purposes of the Federal Alternative Minimum Tax.

FGIC

   -   Financial Guaranty Insurance Company

NPFG

   -   National Public Finance Guaranty Corp.

XLCA

   -   XL Capital Assurance, Inc.

The Trust invests primarily in debt securities issued by Michigan municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at February 29, 2012, 38.5% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution ranged from 0.9% to 12.7% of total investments.

 

(1) Security (or a portion thereof) has been pledged to cover margin requirements on open financial futures contracts.

 

3

 

 

A summary of open financial instruments at February 29, 2012 is as follows:

Futures Contracts

 

Expiration
Month/Year		   

Contracts

    Position    Aggregate Cost     Value     Net  Unrealized
Depreciation		  
6/12    7 U.S. 30-Year Treasury Bond    Short    $     (985,730 )    $     (991,594 )    $     (5,864 ) 

At February 29, 2012, the Trust had sufficient cash and/or securities to cover commitments under these contracts.

The Trust is subject to interest rate risk in the normal course of pursuing its investment objective. Because the Trust holds fixed-rate bonds, the value of these bonds may decrease if interest rates rise. The Trust purchases and sells U.S. Treasury futures contracts to hedge against changes in interest rates.

At February 29, 2012, the aggregate fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in a liability position and whose primary underlying risk exposure is interest rate risk was $5,864.

The cost and unrealized appreciation (depreciation) of investments of the Trust at February 29, 2012, as determined on a federal income tax basis, were as follows:

 

Aggregate cost

    $     43,761,623   
  

 

 

  

Gross unrealized appreciation

    $ 3,072,843   

Gross unrealized depreciation

      (205,247 ) 
  

 

 

  

Net unrealized appreciation

    $ 2,867,596   
  

 

 

  

Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

 

•  

Level 1 — quoted prices in active markets for identical investments

 

•  

Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

 

•  

Level 3 — significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments)

In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

At February 29, 2012, the hierarchy of inputs used in valuing the Trust’s investments and open derivative instruments, which are carried at value, were as follows:

 

Asset Description    Level 1     Level 2      Level 3      Total  

Tax-Exempt Investments

    $ —      $ 46,629,219       $ —       $ 46,629,219   

Total Investments

    $ —      $     46,629,219       $ —       $     46,629,219   
Liability Description                               

Futures Contracts

    $ (5,864 )    $ —       $ —       $ (5,864 ) 

Total

    $     (5,864 )    $ —       $ —       $ (5,864 ) 

The Trust held no investments or other financial instruments as of November 30, 2011 whose fair value was determined using Level 3 inputs. At February 29, 2012, the value of investments transferred between Level 1 and Level 2, if any, during the fiscal year to date then ended was not significant.

For information on the Trust’s policy regarding the valuation of investments and other significant accounting policies, please refer to the Trust’s most recent financial statements included in its semiannual or annual report to shareholders.

 

4

 

 

Item 2. Controls and Procedures

(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

(b) There have been no changes in the registrant’s internal controls over financial reporting during the fiscal quarter for which the report is being filed that have materially affected, or are reasonably likely to materially affect the registrant’s internal control over financial reporting.

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.

 

Eaton Vance Michigan Municipal Income Trust
By:   /s/ Cynthia J. Clemson
  Cynthia J. Clemson
  President
Date:   April 24, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:   /s/ Cynthia J. Clemson
  Cynthia J. Clemson
  President
Date:   April 24, 2012
By:   /s/ Barbara E. Campbell
  Barbara E. Campbell
  Treasurer
Date:   April 24, 2012