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: 811-07096
______________________________________________
Investment Grade Municipal
Income Fund Inc.
______________________________________________________________________________
(Exact name of registrant as specified in charter)
51 West 52nd Street,
New York, New York 10019-6114
______________________________________________________________________________
(Address of principal executive offices) (Zip code)
Mark F.
Kemper, Esq. UBS Global Asset Management 51 West 52nd Street New York, NY 10019-6114 |
(Name and address of agent for service) |
Copy to: |
Jack W.
Murphy, Esq. Dechert LLP 1775 I Street, N.W. Washington, DC 20006-2401 |
Registrants telephone number, including area code: 212-882 5000
Date of fiscal year end: September 30
Date of reporting period: December 31, 2006
Item 1. Schedule of Investments
Investment Grade Municipal Income Fund Inc.
Schedule of investmentsDecember 31, 2006 (unaudited)
Principal | ||||||||||||||
amount | Moodys | S&P | Maturity | Interest | ||||||||||
(000) ($) | rating | rating | dates | rates (%) | Value ($) | |||||||||
Long-term municipal bonds164.35% | ||||||||||||||
Alaska 1.99% | ||||||||||||||
1,000 | Alaska International Airports Revenues Refunding-Series A (MBIA Insured)1 | Aaa | AAA | 10/01/19 | 5.000 | 1,064,250 | ||||||||
1,000 | Alaska International Airports Revenues Refunding-Series A (MBIA Isured))1 | Aaa | AAA | 10/01/20 | 5.000 | 1,060,960 | ||||||||
1,000 | Alaska International Airports Revenues Refunding-Series A (MBIA Isured))1 | Aaa | AAA | 10/01/21 | 5.000 | 1,058,500 | ||||||||
3,183,710 | ||||||||||||||
Arizona 1.59% | ||||||||||||||
2,380 | Arizona State Transportation Board Highway Revenue-Series B | Aa1 | AAA | 07/01/18 | 5.250 | 2,551,217 | ||||||||
Arkansas 0.98% | ||||||||||||||
1,525 | Little Rock Capital Improvement Revenue Parks & Recreation Projects-Series A | NR | NR | 01/01/18 | 5.700 | 1,569,820 | ||||||||
California 37.11% | ||||||||||||||
5,000 | California
Educational Facilities Authority Revenue Refunding-Pepperdine University-Series A (FGIC Insured) |
Aaa | AAA | 09/01/33 | 5.000 | 5,222,850 | ||||||||
5,000 | California
Health Facilities Financing Authority Revenue-Kaiser Permanente- Series A |
NR | A+ | 04/01/39 | 5.250 | 5,309,350 | ||||||||
5,000 | California State Refunding | A1 | A+ | 05/01/27 | 5.000 | 5,267,900 | ||||||||
3,000 | California State Refunding-Series 2 | A1 | A+ | 09/01/27 | 5.000 | 3,173,940 | ||||||||
3,000 | California Statewide Communities Development Authority Apartment Development Revenue Refunding-Irvine Apartment Communities-Series A3 (Mandatory Put 05/17/10 @ 100) | NR | BBB+ | 05/15/25 | 5.100 | 2 | 3,089,160 | |||||||
1,750 | California
Statewide Communities Development Authority Revenue-Kaiser Permanente-Series H (Mandatory Put 05/01/08 @ 100) |
NR | A+ | 04/01/34 | 2.625 | 2 | 1,717,432 | |||||||
2,150 | Fontana
Redevelopment Agency Tax Allocation Refunding-Jurupa Hills Redevelopment Project A |
NR | A | 10/01/17 | 5.500 | 2,242,751 | ||||||||
2,905 | Inglewood Unified School District 1998 Election-Series C (FSA Insured) | Aaa | AAA | 10/01/28 | 5.000 | 3,066,518 | ||||||||
6,250 | Los Angeles Wastewater System Revenue Refunding-Series A (FSA Insured) | Aaa | AAA | 06/01/32 | 5.000 | 6,582,625 | ||||||||
5,000 | Los
Angeles Water & Power Revenue Power System-Series A, Subseries A2 (MBIA Insured) |
Aaa | AAA | 07/01/27 | 5.000 | 5,269,250 | ||||||||
10,000 | Sacramento County Sanitation District Financing Authority Revenue Refunding (AMBAC Insured) | Aaa | AAA | 12/01/27 | 5.000 | 10,413,700 | ||||||||
2,600 | San
Diego County Regional Airport Authority Airport Revenue Refunding (AMBAC Insured)1 |
Aaa | AAA | 07/01/16 | 5.250 | 2,834,494 | ||||||||
5,000 | University of California Revenues-Series A (AMBAC Insured)3 | Aaa | AAA | 05/15/28 | 5.000 | 5,264,400 | ||||||||
59,454,370 | ||||||||||||||
Investment Grade Municipal Income Fund Inc.
Schedule of investmentsDecember 31, 2006 (unaudited)
Principal | ||||||||||||||
amount | Moodys | S&P | Maturity | Interest | ||||||||||
(000) ($) | rating | rating | dates | rates (%) | Value ($) | |||||||||
Long-term municipal bonds(continued) | ||||||||||||||
Colorado 4.91% | ||||||||||||||
3,000 | Colorado
Health Facilities Authority Revenue Refunding-Adventist Health/Sunbelt-Series E |
A2 | A+ | 11/15/18 | 5.125 | 2 | 3,210,060 | |||||||
3,000 | Colorado
Health Facilities Authority Revenue Refunding-Adventist Health/Sunbelt-Series E |
A2 | A+ | 11/15/19 | 5.125 | 2 | 3,202,320 | |||||||
1,374 | University of Colorado Participation Interests | NR | A+ | 12/01/13 | 6.000 | 1,457,615 | ||||||||
7,869,995 | ||||||||||||||
Florida 6.10% | ||||||||||||||
3,350 | Florida State Board of Education Capital Outlay-Series E (FGIC Insured) | Aaa | AAA | 06/01/24 | 5.000 | 3,518,404 | ||||||||
1,175 | Gainesville Utilities System Revenue-Series A | Aa2 | AA | 10/01/20 | 5.250 | 1,277,789 | ||||||||
2,000 | Miami-Dade
County Aviation Revenue Refunding-Miami International Airport-Series B (XLCA Insured)1 |
Aaa | AAA | 10/01/13 | 5.000 | 2,121,500 | ||||||||
2,700 | Miami-Dade
County Aviation Revenue Refunding-Miami International Airport-Series B (XLCA Insured)1 |
Aaa | AAA | 10/01/18 | 5.000 | 2,858,733 | ||||||||
9,776,426 | ||||||||||||||
Illinois 4.87% | ||||||||||||||
1,200 | Illinois
Educational Facilities Authority Revenues Refunding-Augustana College-Series A |
Baa1 | NR | 10/01/22 | 5.625 | 1,273,944 | ||||||||
6,000 | Illinois Finance Authority Revenue-University of Chicago-Series A | Aa1 | AA | 07/01/34 | 5.000 | 6,286,560 | ||||||||
250 | Metropolitan Pier & Exposition Authority Dedicated State Tax Revenue | A1 | AAA | 06/15/27 | 6.500 | 250,525 | ||||||||
7,811,029 | ||||||||||||||
Indiana 4.26% | ||||||||||||||
4,000 | Indiana Health & Educational Facilities Financing Authority Hospital Revenue Refunding-Clarian Health Obligation Group-Series B | A2 | A+ | 02/15/21 | 5.000 | 4,178,600 | ||||||||
2,500 | Indianapolis Airport Authority Revenue Refunding-Special Facilities-FedEx Corp. Project (Federal Express Co. Insured)1 | Baa2 | BBB | 01/15/17 | 5.100 | 2,640,375 | ||||||||
6,818,975 | ||||||||||||||
Massachusetts 3.90% | ||||||||||||||
6,000 | Massachusetts
Health & Educational Facilities Authority Revenue-Harvard University-Series DD |
Aaa | AAA | 07/15/35 | 5.000 | 6,246,960 | ||||||||
Michigan 5.26% | ||||||||||||||
5,000 | Michigan
State Hospital Finance Authority Revenue Refunding-Trinity Health Credit Group-Series D |
Aa2 | AA | 08/15/25 | 5.000 | 5,257,200 | ||||||||
3,000 | Michigan
State Hospital Finance Authority Revenue-Trinity Health Credit Group-Series A |
Aa2 | AA | 12/01/26 | 5.000 | 3,173,040 | ||||||||
8,430,240 | ||||||||||||||
Investment Grade Municipal Income Fund Inc.
Schedule of investmentsDecember 31, 2006 (unaudited)
Principal | ||||||||||||||
amount | Moodys | S&P | Maturity | Interest | ||||||||||
(000) ($) | rating | rating | dates | rates (%) | Value ($) | |||||||||
Long-term municipal bonds(continued) | ||||||||||||||
Minnesota 0.98% | ||||||||||||||
1,500 | Shakopee Health Care Facilities Revenue-Saint Francis Regional Medical Center | NR | BBB | 09/01/17 | 5.000 | 1,569,915 | ||||||||
New Jersey 13.61% | ||||||||||||||
10,000 | New
Jersey State Educational Facilities Authority Revenue-Princeton University-Series D |
Aaa | AAA | 07/01/29 | 5.000 | 10,609,600 | ||||||||
10,000 | New Jersey Transportation Trust Fund Authority Transportation System-Series A | A1 | AA | 12/15/20 | 5.250 | 11,201,800 | ||||||||
21,811,400 | ||||||||||||||
New York 21.07% | ||||||||||||||
1,765 | Metropolitan
Transportation Authority New York Dedicated Tax Fund-Series A (FSA Insured) |
Aaa | AAA | 11/15/24 | 5.250 | 1,899,564 | ||||||||
7,390 | Metropolitan Transportation Authority Revenue Transportation-Series A | A2 | A | 11/15/25 | 5.000 | 7,875,966 | ||||||||
4,815 | New York City General Obligation-Series O | A1 | AA | 06/01/24 | 5.000 | 5,075,251 | ||||||||
2,000 | New York City Industrial Development Agency Special Facilities Revenue-Terminal One Group Association Project1 | A3 | BBB+ | 01/01/15 | 5.500 | 2,173,800 | ||||||||
2,750 | New York City Industrial Development Agency Special Facilities Revenue-Terminal One Group Association Project1 | A3 | BBB+ | 01/01/17 | 5.500 | 2 | 2,996,400 | |||||||
3,250 | New York City Industrial Development Agency Special Facilities Revenue-Terminal One Group Association Project1 | A3 | BBB+ | 01/01/18 | 5.500 | 2 | 3,528,557 | |||||||
3,140 | Triborough Bridge & Tunnel Authority Revenues Refunding-Series B | Aa2 | AA | 11/15/19 | 5.250 | 3,386,270 | ||||||||
6,400 | Triborough Bridge & Tunnel Authority Revenues-Subordinate Bonds | Aa3 | A+ | 11/15/30 | 5.250 | 6,825,088 | ||||||||
33,760,896 | ||||||||||||||
North Carolina 15.55% | ||||||||||||||
5,000 | North
Carolina Eastern Municipal Power Agency Power System Revenue Refunding-Series A |
Baa2 | BBB | 01/01/11 | 5.500 | 5,290,200 | ||||||||
2,000 | North
Carolina Eastern Municipal Power Agency Power System Revenue Refunding-Series A |
Baa2 | BBB | 01/01/12 | 5.500 | 2,140,480 | ||||||||
3,065 | North
Carolina Eastern Municipal Power Agency Power System Revenue-Series A (Escrowed to Maturity) |
Baa2 | AAA | 01/01/21 | 6.400 | 3,742,518 | ||||||||
5,000 | North
Carolina Medical Care Commission Health Care Facilities Revenue-Novant Health Obligation Group |
Aa3 | AA | 11/01/34 | 5.000 | 5,241,250 | ||||||||
8,745 | North Carolina State Public Improvement-Series A | Aa1 | AAA | 03/01/24 | 4.000 | 8,500,840 | ||||||||
24,915,288 | ||||||||||||||
Ohio 6.78% | ||||||||||||||
2,185 | Ohio State Higher Education-Series B | Aa1 | AA+ | 11/01/17 | 5.250 | 2,347,018 | ||||||||
8,000 | Ohio
State Water Development Authority Water Pollution Control Revenue-Water Quality |
Aaa | AAA | 06/01/24 | 5.000 | 8,514,400 | ||||||||
10,861,418 | ||||||||||||||
Investment Grade Municipal Income Fund Inc.
Schedule of investmentsDecember 31, 2006 (unaudited)
Principal | ||||||||||||||
amount | Moodys | S&P | Maturity | Interest | ||||||||||
(000) ($) | rating | rating | dates | rates (%) | Value ($) | |||||||||
Long-term municipal bonds(concluded) | ||||||||||||||
Pennsylvania 6.67% | ||||||||||||||
7,125 | Allegheny
County Sanitation Authority Sewer Revenue Refunding-Series A (MBIA Insured) |
Aaa | AAA | 12/01/24 | 5.000 | 7,599,881 | ||||||||
3,000 | Susquehanna Area Regional Airport Authority Airport System Revenue-Subseries D | Ba1 | NR | 01/01/18 | 5.375 | 3,079,470 | ||||||||
10,679,351 | ||||||||||||||
Puerto Rico 6.31% | ||||||||||||||
3,000 | Puerto Rico Housing Finance Authority-Capital Funding Program (HUD Insured) | Aa3 | AA | 12/01/18 | 5.000 | 3,179,940 | ||||||||
6,465 | University of Puerto Rico Revenues System-Series Q | Baa2 | BBB | 06/01/17 | 5.000 | 6,932,484 | ||||||||
10,112,424 | ||||||||||||||
Rhode Island 1.04% | ||||||||||||||
1,600 | Rhode Island Health & Educational Building Corp. Revenue Refunding-Hospital Financing-Lifespan Obligation-Series A | A3 | A | 05/15/11 | 5.000 | 1,664,912 | ||||||||
South Carolina 8.99% | ||||||||||||||
7,570 | Charleston
Educational Excellence Financing Corp. Revenue-Charleston County School District Project |
A1 | AA | 12/01/24 | 5.000 | 8,006,638 | ||||||||
5,000 | Greenville
County School District Installment Purchase Refunding-Building Equity Sooner-Series AGC |
Aa3 | AA | 12/01/24 | 5.000 | 5,309,200 | ||||||||
1,000 | Greenville Waterworks Revenue | Aa1 | AAA | 02/01/20 | 5.250 | 1,084,340 | ||||||||
14,400,178 | ||||||||||||||
South Dakota 0.67% | ||||||||||||||
1,049 | Standing Rock New Public Housing4 | NR | NR | 08/07/13 | 6.000 | 1,071,395 | ||||||||
Tennessee 1.59% | ||||||||||||||
2,500 | Memphis-Shelby
County Airport Authority Special Facilities Revenue Refunding-Federal Express Corp. |
Baa2 | BBB | 09/01/09 | 5.000 | 2,550,550 | ||||||||
Texas 10.12% | ||||||||||||||
4,000 | Coastal
Bend Health Facilities Development Corp.-Incarnate Word Health System-Series A (Escrowed to Maturity) (AMBAC Insured) |
Aaa | AAA | 01/01/17 | 6.300 | 4,455,480 | ||||||||
6,429 | Harris County Texas Lease5 | NR | NR | 05/01/20 | 6.750 | 6,794,627 | ||||||||
3,007 | Houston Community College System Participation Interests5 | NR | NR | 06/15/25 | 7.875 | 3,384,576 | ||||||||
1,485 | Lower
Colorado River Authority Transmission Contract Revenue-LCRA Transmission Services Corp. Project B (FSA Insured) |
Aaa | AAA | 05/15/20 | 5.250 | 1,582,089 | ||||||||
16,216,772 | ||||||||||||||
Total long-term municipal bonds (cost$256,806,523) | 263,327,241 | |||||||||||||
Investment Grade Municipal Income Fund Inc.
Schedule of investmentsDecember 31, 2006 (unaudited)
Principal | ||||||||||||||
amount | Moodys | S&P | Maturity | Interest | ||||||||||
(000) ($) | rating | rating | dates | rates (%) | Value ($) | |||||||||
Short-term municipal notes1 62.52% | ||||||||||||||
Illinois 0.18% | ||||||||||||||
300 | Chicago Midway Airport Revenue-Second Lien-Series A (MBIA Insured) | VMIG-1 | A1+ | 01/02/07 | 4.040 | 300,000 | ||||||||
Indiana 0.71% | ||||||||||||||
1,135 | Whiting Industrial Environmental Facilities Revenue-Amoco Oil Co. Project | VMIG-1 | A1+ | 01/02/07 | 4.020 | 1,135,000 | ||||||||
Texas 1.63% | ||||||||||||||
2,600 | West
Side Calhoun County Naval District Environmental Facilities Revenue-BP Chemicals, Inc. Project |
NR | A1+ | 01/02/07 | 4.020 | 2,600,000 | ||||||||
Total short-term municipal notes (cost$4,035,000) | 4,035,000 | |||||||||||||
Total investments (cost $260,841,523)7 8 166.87% | 267,362,241 | |||||||||||||
Other assets in excess of liabilities 1.78% | 2,862,431 | |||||||||||||
Liquidation value of auction preferred shares (68.65)% | (110,000,000) | |||||||||||||
Net assets applicable to common shareholders 100.00% | 160,224,672 | |||||||||||||
Acquisition | Market | |||||||||
cost as a | value as a | |||||||||
percentage | percentage | |||||||||
Illiquid and | Acquisition | Acquisition | of common | Market | of common | |||||
restricted security | date | cost ($) | net assets (%) | value ($) | net assets (%) | |||||
Standing Rock New | ||||||||||
Public Housing, | ||||||||||
6.000%, 08/07/13 | 08/08/02 | 1,048,742 | 0.65 | 1,071,395 | 0.67 | |||||
5 | The securities detailed in the table below are considered illiquid and restricted and represent 6.35% of net assets applicable to common shareholders as of December 31, 2006. |
Acquisition | Market | |||||||||||
cost as a | value as a | |||||||||||
percentage | percentage | |||||||||||
Illiquid and | Acquisition | Acquisition | of common | Market | of common | |||||||
restricted securities | date | cost ($) | net assets (%) | value ($) | net assets (%) | |||||||
Harris
County Texas Lease, 6.750%, 05/01/20 |
09/07/00 | 6,429,435 | 4.01 | 6,794,627 | 4.24 | |||||||
Houston
Community College System Participation Interests, 7.875%, 06/15/25 |
04/22/02 | 3,007,095 | 1.88 | 3,384,576 | 2.11 | |||||||
9,436,530 | 5.89 | 10,179,203 | 6.35 | |||||||||
Investment Grade Municipal Income Fund Inc.
Schedule of investmentsDecember 31, 2006 (unaudited)
AMBAC | American Municipal Bond Assurance Corporation | |
BP | British Petroleum | |
FGIC | Financial Guaranty Insurance Company | |
FSA | Financial Security Assurance | |
HUD | Housing and Urban Development | |
MBIA | Municipal Bond Investors Assurance | |
NR | Not Rated | |
XLCA | XL Capital Assurance | |
Futures contracts | ||||||||||
Number of | Expiration | Current | Unrealized | |||||||
contracts | Sale contracts | dates | Proceeds ($) | value ($) | appreciation ($) | |||||
130 | US Treasury Bond 20 Year Futures | March 2007 | 14,870,294 | 14,486,875 | 383,419 | |||||
100 | US Treasury Note 10 Year Futures | March 2007 | 10,919,156 | 10,746,875 | 172,281 | |||||
555,700 | ||||||||||
For more information regarding the Funds other significant accounting policies, please refer to the Funds annual report to shareholders dated September 30, 2006.
Item 2. Controls and Procedures.
(a) | The registrants principal executive officer and principal financial officer have concluded
that the registrants disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (Investment
Company Act)) are effective based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this document. |
|
(b) | The registrants principal executive officer and principal financial officer are aware of
no changes in the registrants internal control over financial reporting (as
defined in Rule 30a-3(d) under the Investment Company Act) that occurred during
the registrants last fiscal quarter that has materially affected, or is reasonably
likely to materially affect, the registrants internal control over financial
reporting. |
Item 3. Exhibits.
(a) | Certifications
of principal executive officer and principal financial officer of registrant pursuant
to Rule 30a-2(a) under the Investment Company Act is attached hereto as Exhibit
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.
Investment Grade Municipal Income Fund Inc.
By: | /s/ Kai R. Sotorp | |
Kai R. Sotorp | ||
President | ||
Date: | March 1, 2007 |
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/ Kai R. Sotorp | |
Kai R. Sotorp | ||
President | ||
Date: | March 1, 2007 | |
By: | /s/ Thomas Disbrow | |
Thomas Disbrow | ||
Vice President and Treasurer | ||
Date: | March 1, 2007 |