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
Item 1. Schedule of Investments |
Investment Grade Municipal Income Fund Inc.
Schedule of investments December 31, 2007 (unaudited)
Moodys | S&P | Face | ||||||||||||||
rating | rating | amount ($) | Value ($) | |||||||||||||
Long-term municipal bonds169.88% | ||||||||||||||||
Alaska 2.02% | ||||||||||||||||
Alaska International Airports Revenue Refunding Series A (MBIA Insured)1 |
||||||||||||||||
5.000%, due 10/01/19 |
Aaa | AAA | 1,000,000 | 1,039,440 | ||||||||||||
5.000%, due 10/01/20 |
Aaa | AAA | 1,000,000 | 1,033,570 | ||||||||||||
5.000%, due 10/01/21 |
Aaa | AAA | 1,000,000 | 1,027,750 | ||||||||||||
3,100,760 | ||||||||||||||||
Arizona 1.66% | ||||||||||||||||
Arizona State Transportation Board Highway Revenue-Series B |
||||||||||||||||
5.250%, due 07/01/18 |
Aa1 | AAA | 2,380,000 | 2,541,816 | ||||||||||||
Arkansas 0.95% | ||||||||||||||||
Little Rock Capital Improvement Revenue Parks & Recreation Projects-Series A |
||||||||||||||||
5.700%, due 01/01/18 |
NR | NR | 1,435,000 | 1,454,990 | ||||||||||||
California 35.85% | ||||||||||||||||
California
Educational Facilities Authority Revenue Refunding-Pepperdine University- |
||||||||||||||||
5.000%, due 09/01/33 |
Aaa | AAA | 5,000,000 | 5,080,750 | ||||||||||||
California
Health Facilities Financing Authority Revenue-Kaiser |
||||||||||||||||
5.250%, due 04/01/39 |
NR | A+ | 5,000,000 | 5,002,900 | ||||||||||||
California State Refunding |
||||||||||||||||
5.000%, due 05/01/27 |
A1 | A+ | 5,000,000 | 5,085,600 | ||||||||||||
California State Refunding-Series 2, |
||||||||||||||||
5.000%, due 09/01/27 |
A1 | A+ | 3,000,000 | 3,056,190 | ||||||||||||
California
Statewide Communities Development Authority Apartment |
||||||||||||||||
5.100%, due 05/15/252 |
NR | NR | 3,000,000 | 3,045,450 | ||||||||||||
California Statewide Communities Development Authority Revenue-Kaiser Permanente-Series H (Mandatory Put 05/01/08 @ 100) |
||||||||||||||||
2.625%, due 04/01/342 |
NR | A+ | 1,750,000 | 1,743,402 | ||||||||||||
Los Angeles Wastewater System Revenue Refunding-Series A (FSA Insured) |
||||||||||||||||
5.000%, due 06/01/32 |
Aaa | AAA | 6,250,000 | 6,419,250 | ||||||||||||
Los
Angeles Water & Power Revenue Power System-Series A, Subseries A-2 |
||||||||||||||||
5.000%, due 07/01/27 |
Aaa | AAA | 5,000,000 | 5,138,500 | ||||||||||||
Sacramento
County Sanitation District Financing Authority Revenue Refunding |
||||||||||||||||
5.000%, due 12/01/27 |
Aaa | AAA | 10,000,000 | 10,306,200 | ||||||||||||
San
Diego County Regional Airport Authority Airport Revenue Refunding |
||||||||||||||||
5.250%, due 07/01/161 |
Aaa | AAA | 2,600,000 | 2,800,200 | ||||||||||||
San
Francisco City & County Public Utilities Commission Water Revenue-Series A |
||||||||||||||||
5.000%, due 11/01/25 |
Aaa | AAA | 2,000,000 | 2,079,160 | ||||||||||||
University of California Revenue-Series A (AMBAC Insured) |
||||||||||||||||
5.000%, due 05/15/283 |
Aaa | AAA | 5,000,000 | 5,141,950 | ||||||||||||
54,899,552 | ||||||||||||||||
Investment Grade Municipal Income Fund Inc.
Schedule of investments December 31, 2007 (unaudited)
Moodys | S&P | Face | ||||||||||||||
rating | rating | amount ($) | Value ($) | |||||||||||||
Long-term municipal bonds(continued) | ||||||||||||||||
Colorado 4.90% | ||||||||||||||||
Colorado Health Facilities Authority Revenue Refunding-Adventist Health/Sunbelt-Series E2 |
||||||||||||||||
5.125%, due 11/15/18 |
A2 | A+ | 3,000,000 | 3,131,280 | ||||||||||||
5.125%, due 11/15/19 |
A2 | A+ | 3,000,000 | 3,109,080 | ||||||||||||
University of Colorado Participation Interests |
||||||||||||||||
6.000%, due 12/01/13 |
NR | A+ | 1,209,677 | 1,266,968 | ||||||||||||
7,507,328 | ||||||||||||||||
Florida 4.10% | ||||||||||||||||
Florida State Board of Education Capital Outlay-Series E (FGIC Insured) |
||||||||||||||||
5.000%, due 06/01/24 |
Aaa | AAA | 3,350,000 | 3,483,464 | ||||||||||||
Miami-Dade
County Aviation Revenue Refunding-Miami International |
||||||||||||||||
5.000%, due 10/01/181 |
Aaa | AAA | 2,700,000 | 2,792,691 | ||||||||||||
6,276,155 | ||||||||||||||||
Illinois 14.53% | ||||||||||||||||
Chicago
OHare International Airport Revenue-General-Third Lien-Series D |
||||||||||||||||
5.000%, due 01/01/261 |
Aaa | AAA | 11,270,000 | 11,322,631 | ||||||||||||
Illinois
Educational Facilities Authority Revenue Refunding-Augustana |
||||||||||||||||
5.625%, due 10/01/22 |
Baa1 | NR | 1,200,000 | 1,229,736 | ||||||||||||
Illinois Finance Authority Revenue-University of Chicago-Series A |
||||||||||||||||
5.000%, due 07/01/34 |
Aa1 | AA | 6,000,000 | 6,167,460 | ||||||||||||
Illinois Municipal Electric Agency Power Supply-Series A (FGIC Insured) |
||||||||||||||||
5.250%, due 02/01/17 |
Aaa | AAA | 3,000,000 | 3,287,460 | ||||||||||||
Metropolitan Pier & Exposition Authority Dedicated State Tax Revenue |
||||||||||||||||
6.500%, due 06/15/27 |
A1 | AAA | 250,000 | 250,440 | ||||||||||||
22,257,727 | ||||||||||||||||
Indiana 5.26% | ||||||||||||||||
Indiana Health & Educational Facilities Financing Authority Hospital Revenue Refunding-Clarian Health Obligation Group-Series B |
||||||||||||||||
5.000%, due 02/15/21 |
A2 | A+ | 4,000,000 | 4,020,720 | ||||||||||||
Indianapolis Airport Authority Revenue Refunding-Special Facilities-FedEx Corp. Project |
||||||||||||||||
5.100%, due 01/15/171 |
Baa2 | BBB | 4,000,000 | 4,038,560 | ||||||||||||
8,059,280 | ||||||||||||||||
Kentucky 1.43% | ||||||||||||||||
Kenton
County Airport Board Airport Revenue-Cincinnati/Northern |
||||||||||||||||
5.500%, due 03/01/181 |
Aaa | AAA | 2,080,000 | 2,189,491 | ||||||||||||
Massachusetts 4.67% | ||||||||||||||||
Massachusetts
Health & Educational Facilities Authority Revenue-Harvard University- |
||||||||||||||||
5.000%, due 07/15/35 |
Aaa | AAA | 6,000,000 | 6,117,480 | ||||||||||||
Massachusetts Port Authority Revenue-US Airways Project (MBIA Insured) |
||||||||||||||||
6.000%, due 09/01/211 |
Aaa | AAA | 1,000,000 | 1,035,000 | ||||||||||||
7,152,480 | ||||||||||||||||
Investment Grade Municipal Income Fund Inc.
Schedule of investments December 31, 2007 (unaudited)
Moodys | S&P | Face | ||||||||||||||
rating | rating | amount ($) | Value ($) | |||||||||||||
Long-term municipal bonds(continued) | ||||||||||||||||
Michigan 5.31% | ||||||||||||||||
Michigan State Hospital Finance Authority Revenue Refunding-Trinity Health Credit Group-Series D |
||||||||||||||||
5.000%, due 08/15/25 |
Aa2 | AA- | 5,000,000 | 5,085,300 | ||||||||||||
Michigan
State Hospital Finance Authority Revenue-Trinity Health Credit |
||||||||||||||||
5.000%, due 12/01/26 |
Aa2 | AA- | 3,000,000 | 3,047,340 | ||||||||||||
8,132,640 | ||||||||||||||||
Minnesota 0.99% | ||||||||||||||||
Shakopee Health Care Facilities Revenue-Saint Francis Regional Medical Center |
||||||||||||||||
5.000%, due 09/01/17 |
NR | BBB | 1,500,000 | 1,515,990 | ||||||||||||
New Jersey 6.06% | ||||||||||||||||
New Jersey Transportation Trust Fund Authority Transportation System-Series A |
||||||||||||||||
5.250%, due 12/15/20 |
A1 | AA- | 5,000,000 | 5,568,050 | ||||||||||||
Tobacco Settlement Financing Corp.-Series 1-A |
||||||||||||||||
4.500%, due 06/01/23 |
Baa3 | BBB | 4,045,000 | 3,710,843 | ||||||||||||
9,278,893 | ||||||||||||||||
New York 15.54% | ||||||||||||||||
Metropolitan
Transportation Authority New York Dedicated Tax Fund-Series A |
||||||||||||||||
5.250%, due 11/15/24 |
Aaa | AAA | 1,765,000 | 1,883,432 | ||||||||||||
New York City General Obligation-Series O |
||||||||||||||||
5.000%, due 06/01/24 |
A1 | AA- | 3,315,000 | 3,418,428 | ||||||||||||
New York City Industrial Development Agency Special Facilities Revenue-Terminal One Group Association Project |
||||||||||||||||
5.500%, due 01/01/151 |
A3 | BBB+ | 2,000,000 | 2,118,960 | ||||||||||||
New York City Industrial Development Agency Special Facilities Revenue-Terminal One Group Association Project (Mandatory Put 01/01/16 @ 100) |
||||||||||||||||
5.500%, due 01/01/171,2 |
A3 | BBB+ | 2,750,000 | 2,906,558 | ||||||||||||
5.500%, due 01/01/18 |
A3 | BBB+ | 3,250,000 | 3,415,067 | ||||||||||||
Triborough Bridge & Tunnel Authority Revenue Refunding-Series B |
||||||||||||||||
5.250%, due 11/15/19 |
Aa2 | AA- | 3,140,000 | 3,365,169 | ||||||||||||
Triborough Bridge & Tunnel Authority Revenue-Subordinate Bonds |
||||||||||||||||
5.250%, due 11/15/30 |
Aa3 | A+ | 6,400,000 | 6,685,248 | ||||||||||||
23,792,862 | ||||||||||||||||
North Carolina 11.23% | ||||||||||||||||
North Carolina Eastern Municipal Power Agency Power System Revenue-Series A (Escrowed to Maturity) |
||||||||||||||||
6.400%, due 01/01/21 |
Baa2 | AAA | 3,065,000 | 3,707,516 | ||||||||||||
North Carolina Medical Care Commission Health Care Facilities Revenue-Novant Health Obligation Group |
||||||||||||||||
5.000%, due 11/01/34 |
Aa3 | AA- | 5,000,000 | 4,985,000 | ||||||||||||
North Carolina State Public Improvement-Series A |
||||||||||||||||
4.000%, due 03/01/24 |
Aa1 | AAA | 8,745,000 | 8,500,752 | ||||||||||||
17,193,268 | ||||||||||||||||
Investment Grade Municipal Income Fund Inc.
Schedule of investments December 31, 2007 (unaudited)
Moodys | S&P | Face | ||||||||||||||
rating | rating | amount ($) | Value ($) | |||||||||||||
Long-term municipal bonds(continued) | ||||||||||||||||
Ohio 12.48% | ||||||||||||||||
Buckeye
Tobacco Settlement Financing Authority Asset-Backed Senior |
||||||||||||||||
5.125%, due 06/01/24 |
Baa3 | BBB | 10,000,000 | 9,452,800 | ||||||||||||
Ohio State Higher Education-Series B |
||||||||||||||||
5.250%, due 11/01/17 |
Aa1 | AA+ | 1,185,000 | 1,274,242 | ||||||||||||
Ohio State Water Development Authority Water Pollution Control Revenue-Water Quality |
||||||||||||||||
5.000%, due 06/01/24 |
Aaa | AAA | 8,000,000 | 8,393,120 | ||||||||||||
19,120,162 | ||||||||||||||||
Pennsylvania 1.92% | ||||||||||||||||
Susquehanna Area Regional Airport Authority Airport System Revenue-Subseries D |
||||||||||||||||
5.375%, due 01/01/18 |
Ba1 | NR | 3,000,000 | 2,940,750 | ||||||||||||
Puerto Rico 8.46% | ||||||||||||||||
Puerto
Rico Commonwealth Highway & Transportation Authority Revenue |
||||||||||||||||
5.500%, due 07/01/22 |
Baa3 | BBB+ | 3,000,000 | 3,166,110 | ||||||||||||
Puerto Rico Housing Finance Authority-Capital Funding Program (HUD Insured) |
||||||||||||||||
5.000%, due 12/01/18 |
Aa3 | AA | 3,000,000 | 3,150,270 | ||||||||||||
University of Puerto Rico-Revenue System-Series Q |
||||||||||||||||
5.000%, due 06/01/17 |
Baa2 | BBB | 6,465,000 | 6,637,163 | ||||||||||||
12,953,543 | ||||||||||||||||
South Carolina 9.19% | ||||||||||||||||
Charleston Educational Excellence Financing Corp. Revenue-Charleston County School District Project |
||||||||||||||||
5.000%, due 12/01/24 |
A1 | AA- | 7,570,000 | 7,805,881 | ||||||||||||
Greenville County School District Installment Purchase Refunding-Building Equity Sooner-Series AGC |
||||||||||||||||
5.000%, due 12/01/24 |
Aa3 | AA- | 5,000,000 | 5,185,500 | ||||||||||||
Greenville Waterworks Revenue |
||||||||||||||||
5.250%, due 02/01/20 |
Aa1 | AAA | 1,000,000 | 1,077,920 | ||||||||||||
14,069,301 | ||||||||||||||||
South Dakota 0.58% | ||||||||||||||||
Standing Rock New Public Housing |
||||||||||||||||
6.000%, due 08/07/134 |
NR | NR | 898,729 | 894,038 | ||||||||||||
Tennessee 0.68% | ||||||||||||||||
Memphis-Shelby
County Airport Authority Airport Revenue-Series D |
||||||||||||||||
6.000%, due 03/01/241 |
Aaa | AAA | 1,000,000 | 1,045,550 | ||||||||||||
Texas 17.09% | ||||||||||||||||
Coastal
Bend Health Facilities Development Corp.-Incarnate Word Health |
||||||||||||||||
6.300%, due 01/01/17 |
Aaa | AAA | 3,700,000 | 4,134,343 | ||||||||||||
Harris County Texas Lease |
||||||||||||||||
6.750%, due 05/01/205 |
NR | NR | 6,121,422 | 6,545,575 | ||||||||||||
Houston Community College System Participation Interests |
||||||||||||||||
7.875%, due 06/15/255 |
NR | NR | 3,007,095 | 3,309,519 | ||||||||||||
Lamar Consolidated Independent School District Schoolhouse (PSF-GTD) |
||||||||||||||||
5.000%, due 02/15/31 |
Aaa | AAA | 3,235,000 | 3,364,594 | ||||||||||||
Investment Grade Municipal Income Fund Inc.
Schedule of investments December 31, 2007 (unaudited)
Moodys | S&P | Face | ||||||||||||||
rating | rating | amount ($) | Value ($) | |||||||||||||
Long-term municipal bonds(continued) | ||||||||||||||||
Texas(concluded) | ||||||||||||||||
Lower Colorado River Authority Transmission Contract Revenue-LCRA Transmission Services Corp. Project B (FSA Insured) |
||||||||||||||||
5.250%, due 05/15/20 |
Aaa | AAA | 1,485,000 | 1,577,070 | ||||||||||||
San
Leanna Educational Facilities Corp. Higher Educational Revenue |
||||||||||||||||
5.000%, due 06/01/18 |
Baa2 | BBB+ | 2,000,000 | 2,028,420 | ||||||||||||
Tarrant
County Cultural Education Facilities Finance Corp. Revenue |
||||||||||||||||
5.000%, due 02/15/19 |
Aa3 | AA- | 5,000,000 | 5,207,900 | ||||||||||||
26,167,421 | ||||||||||||||||
Washington 3.02% | ||||||||||||||||
Chelan
County Public Utility District No. 001 Consolidated Revenue |
||||||||||||||||
6.050%, due 07/01/321 |
Aaa | AAA | 4,225,000 | 4,628,023 | ||||||||||||
Wyoming 1.96% | ||||||||||||||||
Wyoming Student Loan Corp. Student Loan Revenue-RAMS-Senior Series A |
||||||||||||||||
6.050%, due 06/01/351,2 |
NR | AAA | 3,000,000 | 3,000,000 | ||||||||||||
Total long-term municipal bonds (cost $260,260,909) | 260,172,020 | |||||||||||||||
Total investments (cost $260,260,909)6,7 169.88% | 260,172,020 | |||||||||||||||
Other assets in excess of liabilities 1.94% | 2,979,856 | |||||||||||||||
Liquidation value of auction preferred shares (71.82)% | (110,000,000 | ) | ||||||||||||||
Net assets applicable to common shareholders 100.00% | 153,151,876 | |||||||||||||||
1 | Security subject to Alternative Minimum Tax. | |
2 | Floating rate security. The interest rate shown is the current rate as of December 31, 2007. | |
3 | Partial amount delivered to broker as collateral for futures transactions. | |
4 | Security exempt from registration under Rule 144A of the Securities Act of 1933. This security, which represents 0.58% of net assets applicable to common shareholders as of December 31, 2007, is considered illiquid and restricted (See table below for more information). |
Acquisition | |||||||||||
cost as a | Value as a | ||||||||||
percentage | percentage | ||||||||||
Illiquid and | Acquisition | Acquisition | of common | Value at | of common | ||||||
restricted security | date | cost ($) | net assets (%) | 12/31/07 ($) | net assets (%) | ||||||
Standing Rock New Public Housing, 6.000%, 08/07/13 | 08/08/02 | 898,729 | 0.59 | 894,038 | 0.58 | ||||||
5 | The securities detailed in the table below are considered illiquid and restricted and represent 6.43% of net assets applicable to common shareholders as of December 31, 2007. | |
Acquisition | |||||||||||
cost as a | Value as a | ||||||||||
percentage | percentage | ||||||||||
Illiquid and | Acquisition | Acquisition | of common | Value at | of common | ||||||
restricted securities | dates | cost ($) | net assets (%) | 12/31/07 ($) | net assets (%) | ||||||
Harris County Texas Lease, | |||||||||||
6.750%, 05/01/20 | 09/07/00 | 6,121,422 | 4.00 | 6,545,575 | 4.27 | ||||||
Houston Community
College System Participation
Interests, 7.875%, 06/15/25 |
04/22/02 | 3,007,095 | 1.96 | 3,309,519 | 2.16 | ||||||
9,128,517 | 5.96 | 9,855,094 | 6.43 | ||||||||
6 | Cost of investments shown approximates cost for federal income tax purposes. Gross unrealized appreciation of investments and gross unrealized depreciation of investments at December 31, 2007 were $3,134,122 and $3,223,011 respectively, resulting in net unrealized depreciation of investments of $88,889. | |
7 | The Fund calculates its net asset value based on the current market value, where available, for its portfolio securities. The Fund normally obtains market values for its securities from independent pricing sources and broker-dealers. Independent pricing sources may use last reported sale prices, current market quotations or valuations from computerized matrix systems that derive values based on comparable securities. A matrix system incorporates parameters such as security quality, maturity and coupon, and/or research and evaluations by its staff, including review of broker-dealer market price quotations, if available, in determining the valuation of the portfolio securities. If a market value is not available from an independent pricing source for a particular security, that security is valued at fair value as determined in good faith by or under the direction of the Funds Board of Directors (the Board). Various factors may be reviewed in order to make a good faith determination of a securitys fair value. These factors may include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; and changes in overall market conditions. If events occur that materially affect the value of securities (particularly non-US securities) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange, the securities are fair valued. The amortized cost method of valuation, which approximates market value, generally is used to value short-term debt instruments with sixty days or less remaining to maturity, unless the Board or its delegate determines that this does not represent fair value. Securities traded in the over-the-counter (OTC) market are valued at the last bid price available on the valuation date prior to valuation. | |
AMBAC | American Municipal Bond Assurance Corporation | |
FGIC | Financial Guaranty Insurance Company | |
FSA | Financial Security Assurance | |
GTD | Guaranteed | |
HUD | Housing and Urban Development | |
MBIA | Municipal Bond Investors Assurance | |
NR | Not Rated | |
PSF | Permanent School Fund | |
RAMS | Reset Auction Mode Securities | |
XLCA | XL Capital Assurance |
Futures contracts | ||||||||||||||
Unrealized | ||||||||||||||
Number of | Expiration | Current | appreciation/ | |||||||||||
contracts | Sale contracts | dates | Proceeds ($) | value ($) | (depreciation) ($) | |||||||||
145 | US Treasury Bond 30 Year Futures | March 2008 | 17,050,095 | 16,874,375 | 175,720 | |||||||||
15 | US Treasury Note 10 Year Futures | March 2008 | 1,699,196 | 1,701,562 | (2,366 | ) | ||||||||
18,749,291 | 18,575,937 | 173,354 | ||||||||||||
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: |
February
29, 2008 |
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: |
February
29, 2008 |
|
By: |
/s/ Thomas
Disbrow |
|
Thomas Disbrow |
||
Vice President
and Treasurer |
||
Date: |
February
29, 2008 |