Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-4096
MFS MUNICIPAL SERIES TRUST
(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
(Address of principal executive offices) (Zip code)
Susan S. Newton
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
(Name and address of agents for service)
Registrant’s telephone number, including area code: (617) 954-5000
Date of fiscal year end: March 31
Date of reporting period: March 31, 2008
Table of Contents
ITEM 1. | REPORTS TO STOCKHOLDERS. |
Table of Contents
Table of Contents
Alabama, Arkansas, California, Florida, Georgia, Maryland and Massachusetts
CONTACT INFORMATION | BACK COVER |
SIPC Contact Information:
You may obtain information about the Securities Investor Protection Corporation (“SIPC”), including the SIPC Brochure, by contacting SIPC either by telephone (202-371-8300) or by accessing SIPC’s website address (www.sipc.org).
The report is prepared for the general information of shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.
NOT FDIC INSURED • MAY LOSE VALUE •
NO BANK OR CREDIT UNION GUARANTEE • NOT A DEPOSIT •
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF
Table of Contents
Dear Shareholders:
Many of our MFS® fund shareholders have been justifiably concerned, as have most investors around the world, about the state of the global economy. As we enter 2008 we see the market volatility that began in the third quarter of 2007 has intensified.
We here at MFS, and those before us who guided the firm with the same disciplined investment process, have weathered many major economic disruptions over our eight-plus decades of managing clients’ investments. We have managed money through the Great Depression, 14 recessions, as well as numerous market crises caused by wars, political upheavals, and terrorist attacks. MFS remains in business because our investors believe in the integrity of our long-term investment strategy and its proven results.
Worries over market volatility are valid, and investors cannot always expect to see the kind of returns stocks have delivered in the bull markets of past years. Yet we believe our strategy of ADR — allocating across the major asset classes, diversifying within each class, and regularly rebalancing your portfolio to maintain your desired allocation — can help you pursue the highest investment returns while minimizing the effects of market fluctuations.
MFS is a world leader in domestic and global investing. Our team approach is research driven, globally integrated, and balanced. We have 176 investment management professionals located in the Americas, Europe, and Asia who focus on the fundamentals of each security and then integrate our sophisticated quantitative approach.* This collaborative process allows us to find opportunities in any market environment.
I personally would like to thank you for your continued business. We want you to be confident that we are constantly managing our fund offerings with you in mind, while adding new products that can help you to choose what fits your unique financial goals.
Respectfully,
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management®
May 15, 2008
* as of 12/31/07
The opinions expressed in this letter are subject to change, may not be relied upon for investment advice, and no forecasts can be guaranteed.
1
Table of Contents
.
MFS® Alabama Municipal Bond Fund
Top five industries (i) | ||
Healthcare Revenue – Hospitals | 15.7% | |
Water & Sewer Utility Revenue | 14.4% | |
Universities – Colleges | 12.1% | |
Utilities – Municipal Owned | 10.8% | |
General Obligations – General Purpose | 8.8% | |
Credit quality of bonds (r) | ||
AAA | 59.5% | |
AA | 10.1% | |
A | 10.6% | |
BBB | 12.8% | |
B | 0.2% | |
Not Rated | 6.8% | |
Portfolio facts | ||
Average Duration (d)(i) | 7.4 | |
Average Life (i)(m) | 13.8 yrs. | |
Average Maturity (i)(m) | 16.6 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1 |
MFS® Arkansas Municipal Bond Fund
Top five industries (i) | ||
Universities – Colleges | 18.0% | |
Water & Sewer Utility Revenue | 12.0% | |
General Obligations – General Purpose | 11.4% | |
Healthcare Revenue – Hospitals | 8.8% | |
Utilities – Municipal Owned | 8.4% | |
Credit quality of bonds (r) | ||
AAA | 58.7% | |
AA | 13.1% | |
A | 8.8% | |
BBB | 9.7% | |
BB | 0.2% | |
B | 0.2% | |
Not Rated | 9.3% | |
Portfolio facts | ||
Average Duration (d)(i) | 7.5 | |
Average Life (i)(m) | 13.3 yrs. | |
Average Maturity (i)(m) | 15.1 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1 |
MFS® California Municipal Bond Fund
Portfolio structure (i)
Top five industries (i) | ||
General Obligations – Schools | 16.7% | |
Healthcare Revenue – Hospitals | 14.1% | |
General Obligations – General Purpose | 12.7% | |
State & Local Agencies | 12.5% | |
Water & Sewer Utility Revenue | 8.1% | |
Credit quality of bonds (r) | ||
AAA | 36.2% | |
AA | 10.5% | |
A | 22.9% | |
BBB | 18.3% | |
B | 0.6% | |
C | 0.1% | |
Not Rated | 11.4% | |
Portfolio facts | ||
Average Duration (d)(i) | 9.1 | |
Average Life (i)(m) | 16.5 yrs. | |
Average Maturity (i)(m) | 19.3 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA- | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1 |
(a) | The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies. |
(d) | Duration is a measure of how much a bond's price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value. |
(i) | For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable. |
(m) | The average maturity shown is calculated using the final stated maturity on the portfolio's holdings without taking into account any holdings which have been pre-refunded or pre-paid to an earlier date or which have a mandatory put date prior to the stated maturity. The average life shown takes into account these earlier dates. |
(r) | Each security is assigned a rating from Moody's Investors Service. If not rated by Moody's, the rating will be that assigned by Standard & Poor's. Likewise, if not assigned a rating by Standard & Poor's, it will be based on the rating assigned by Fitch, Inc. For those portfolios that hold a security which is not rated by any of the three agencies, the security is considered Not Rated. Holdings in U.S. Treasuries and government agency mortgage-backed securities, if any, are included in the "AAA"-rating category. Percentages are based on the total market value of investments as of 3/31/08. |
From time to time “Cash & Other Net Assets” may be negative due to the timing of cash receipts and/or equivalent exposure from any derivative holdings.
Percentages are based on net assets as of 3/31/08, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
2
Table of Contents
Portfolio Composition – continued
MFS® Florida Municipal Bond Fund
Top five industries (i) | ||
Water & Sewer Utility Revenue | 18.6% | |
Healthcare Revenue – Hospitals | 17.2% | |
Transportation – Special Tax | 9.2% | |
General Obligations – Schools | 7.9% | |
General Obligations – General Purpose | 7.2% | |
Credit quality of bonds (r) | ||
AAA | 48.4% | |
AA | 17.2% | |
A | 13.0% | |
BBB | 11.0% | |
BB | 0.8% | |
B | 0.3% | |
Not Rated | 9.3% | |
Portfolio facts | ||
Average Duration (d)(i) | 7.9 | |
Average Life (i)(m) | 14.2 yrs. | |
Average Maturity (i)(m) | 15.8 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA |
MFS® Georgia Municipal Bond Fund
Portfolio structure (i)
Top five industries (i) | ||
Water & Sewer Utility Revenue | 26.7% | |
Healthcare Revenue – Hospitals | 11.9% | |
Universities – Colleges | 11.7% | |
General Obligations – Schools | 7.3% | |
Utilities – Municipal Owned | 5.4% | |
Credit quality of bonds (r) | ||
AAA | 41.0% | |
AA | 26.0% | |
A | 20.2% | |
BBB | 7.4% | |
BB | 0.3% | |
B | 0.4% | |
Not Rated | 4.7% | |
Portfolio facts | ||
Average Duration (d)(i) | 8.3 | |
Average Life (i)(m) | 15.3 yrs. | |
Average Maturity (i)(m) | 17.4 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA |
MFS® Maryland Municipal Bond Fund
Portfolio structure (i)
Top five industries (i) | ||
Healthcare Revenue – Hospitals | 19.3% | |
Universities – Colleges | 16.1% | |
General Obligations – Improvement | 10.7% | |
Water & Sewer Utility Revenue | 7.5% | |
General Obligations – General Purpose | 6.8% | |
Credit quality of bonds (r) | ||
AAA | 35.7% | |
AA | 17.6% | |
A | 20.0% | |
BBB | 15.9% | |
BB | 0.8% | |
B | 0.2% | |
Not Rated | 9.8% | |
Portfolio facts | ||
Average Duration (d)(i) | 7.7 | |
Average Life (i)(m) | 15.2 yrs. | |
Average Maturity (i)(m) | 16.7 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA- | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1 |
(a) | The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies. |
(d) | Duration is a measure of how much a bond‘s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value. |
(i) | For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable. |
(m) | The average maturity shown is calculated using the final stated maturity on the portfolio‘s holdings without taking into account any holdings which have been pre-refunded or pre-paid to an earlier date or which have a mandatory put date prior to the stated maturity. The average life shown takes into account these earlier dates. |
(r) | Each security is assigned a rating from Moody‘s Investors Service. If not rated by Moody‘s, the rating will be that assigned by Standard & Poor‘s. Likewise, if not assigned a rating by Standard & Poor‘s, it will be based on the rating assigned by Fitch, Inc. For those portfolios that hold a security which is not rated by any of the three agencies, the security is considered Not Rated. Holdings in U.S. Treasuries and government agency mortgage-backed securities, if any, are included in the “AAA”-rating category. Percentages are based on the total market value of investments as of 3/31/08. |
From time to time “Cash & Other Net Assets” may be negative due to the timing of cash receipts and/or equivalent exposure from any derivative holdings.
Percentages are based on net assets as of 3/31/08, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
3
Table of Contents
Portfolio Composition – continued
MFS® Massachusetts Municipal Bond Fund
Top five industries (i) | ||
Universities – Colleges | 20.3% | |
General Obligations – General Purpose | 14.2% | |
Healthcare Revenue – Hospitals | 12.1% | |
General Obligations – Improvement | 7.4% | |
Water & Sewer Utility Revenue | 7.1% | |
Credit quality of bonds (r) | ||
AAA | 33.5% | |
AA | 21.6% | |
A | 12.6% | |
BBB | 16.5% | |
BB | 1.3% | |
B | 0.2% | |
Not Rated | 14.3% | |
Portfolio facts | ||
Average Duration (d)(i) | 6.9 | |
Average Life (i)(m) | 11.8 yrs. | |
Average Maturity (i)(m) | 15.5 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA- | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1+ |
(a) | The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies. |
(d) | Duration is a measure of how much a bond‘s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value. |
(i) | For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable. |
(m) | The average maturity shown is calculated using the final stated maturity on the portfolio‘s holdings without taking into account any holdings which have been pre-refunded or pre-paid to an earlier date or which have a mandatory put date prior to the stated maturity. The average life shown takes into account these earlier dates. |
(r) | Each security is assigned a rating from Moody‘s Investors Service. If not rated by Moody‘s, the rating will be that assigned by Standard & Poor‘s. Likewise, if not assigned a rating by Standard & Poor‘s, it will be based on the rating assigned by Fitch, Inc. For those portfolios that hold a security which is not rated by any of the three agencies, the security is considered Not Rated. Holdings in U.S. Treasuries and government agency mortgage-backed securities, if any, are included in the “AAA”-rating category. Percentages are based on the total market value of investments as of 3/31/08. |
Percentages are based on net assets as of 3/31/08, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
4
Table of Contents
Market Environment
The U.S. economy and financial markets experienced deterioration and heightened volatility over the reporting period. U.S. economic growth slowed significantly in the fourth quarter of 2007 and the domestic economy continued to be buffeted by headwinds as we entered 2008. These challenges included continued weakness in the housing market, subdued corporate investment, signs of a weaker job market, and a tighter credit environment as banks sought to repair balance sheets. While reasonably resilient, parts of the global economy and financial system experienced some spillover from the U.S. slowdown. Japanese growth slowed over the reporting period and European financial markets were adversely affected by U.S. mortgage and structured product losses.
In the face of this financial and economic turmoil, most global central banks were forced to inject liquidity and to reassess their tightening biases as government bond yields declined and credit spreads widened. Late in the reporting period, the U.S. Federal Reserve Board began an aggressive rate cutting campaign, while the U.S. federal government moved quickly to design a modest fiscal stimulus package. Though the Bank of England and the Bank of Canada also cut rates, the dilemma of rising energy and food prices heightened concerns among central bankers that inflationary expectations might become unhinged.
By the end of the reporting period, bond yields and credit spreads implied market expectations of further financial and economic weakening, as well as continued rate cuts by many global central banks. However, global equity markets recorded only a modest decline from third quarter highs.
Factors that affected performance
During the period, duration(d) positioning relative to the benchmark, the Lehman Brothers Municipal Bond Index, had a positive effect on relative performance for all funds except the California and Maryland funds, where the effect was negative, and the Arkansas fund, where the effect was neutral.
Yield curve(y) positioning was also positive for all funds, with the exception of the California Fund, where the effect was negative, and the Arkansas and Maryland funds, where the effect was neutral. In comparison to the benchmark, the negative impact on the California Fund was due to relative exposure to the longer end of the curve (represented by bonds with durations of 11- to 25- years).
Credit quality had a negative effect on all funds except the Florida Fund, where the relative impact was neutral over the reporting period.
Notable detractors came from the credit enhanced and general obligations sectors. These sectors held back relative returns for the Alabama, California, Florida, and Georgia funds. The credit enhanced sector did, however, bolster relative results for the Maryland fund. On the positive side, the health care sector boosted relative performance for the Alabama and Massachusetts funds. Additionally, the housing sector positively affected the Arkansas and Georgia funds.
Respectfully,
Michael Dawson
Portfolio Manager
(d) | Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value. |
(y) | A yield curve graphically depicts the yields of different maturity bonds of the same credit quality and type. A normal yield curve is upward-sloping, with short term-rates lower than long term rates. |
The views expressed in this report are those of the portfolio manager only through the end of the period of the report as stated on the cover and do not necessarily reflect the views of MFS or any other person in the MFS organization. These views are subject to change at any time based on market or other conditions, and MFS disclaims any responsibility to update such views. These views may not be relied upon as investment advice or an indication of trading intent on behalf of any MFS portfolio. References to specific securities are not recommendations of such securities, and may not be representative of any MFS portfolio's current or future investments.
5
Table of Contents
PERFORMANCE SUMMARY THROUGH 3/31/08
The following charts illustrate a representative class of each fund’s historical performance in comparison to its benchmark. Performance results include the deduction of the maximum applicable sales charge and reflect the percentage change in net asset value, including reinvestment of dividends and capital gains distributions. Each fund's results have been compared to the Lehman Brothers Municipal Bond Index, a market-value-weighted index representative of the tax-exempt bond market. However, while this index is considered the benchmark for the performance of municipal bond funds, it is comprised of municipal bonds issued nationwide, while each of the funds is limited to investing in the bonds of a particular state. The performance of other share classes will be greater than or less than that of the class depicted below. Benchmark comparisons are unmanaged; do not reflect sales charges, commissions or expenses; and cannot be invested in directly. (See Notes to Performance Summary). It is not possible to invest directly in an index.
Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value fluctuate so your shares, when sold, may be worth more or less than the original cost; current performance may be lower or higher than quoted. The performance shown does not reflect the deduction of taxes, if any, that a shareholder would pay on fund distributions or the redemption of fund shares.
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® Alabama Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 2/01/90 | 2.03% | 3.43% | 4.49% | ||||||||
B | 9/07/93 | 1.27% | 2.65% | 3.71% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –2.81% | 2.42% | 3.99% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –2.62% | 2.31% | 3.71% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems Inc. |
(x) | Assuming redemption at the end of the applicable period. |
6
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® Arkansas Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 2/03/92 | 2.07% | 3.38% | 4.48% | ||||||||
B | 9/07/93 | 1.30% | 2.58% | 3.68% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –2.78% | 2.37% | 3.98% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –2.59% | 2.24% | 3.68% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems Inc. |
(x) | Assuming redemption at the end of the applicable period. |
7
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® California Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 6/18/85 | –1.05% | 3.34% | 4.50% | ||||||||
B | 9/07/93 | –1.80% | 2.55% | 3.69% | ||||||||
C | 1/03/94 | –1.93% | 2.42% | 3.57% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –5.75% | 2.34% | 3.99% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –5.58% | 2.21% | 3.69% | |||||||||
C With CDSC (1% for 12 months) (x) | –2.87% | 2.42% | 3.57% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems Inc. |
(x) | Assuming redemption at the end of the applicable period. |
8
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® Florida Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 2/03/92 | –0.08% | 3.47% | 4.44% | ||||||||
B | 9/07/93 | –0.73% | 2.69% | 3.64% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –4.82% | 2.46% | 3.93% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –4.56% | 2.35% | 3.64% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems Inc. |
(x) | Assuming redemption at the end of the applicable period. |
9
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® Georgia Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 6/06/88 | 2.43% | 3.34% | 4.35% | ||||||||
B | 9/07/93 | 1.67% | 2.62% | 3.61% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –2.43% | 2.34% | 3.85% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –2.26% | 2.28% | 3.61% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems Inc. |
(x) | Assuming redemption at the end of the applicable period. |
10
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® Maryland Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 10/31/84 | 0.15% | 3.07% | 4.16% | ||||||||
B | 9/07/93 | –0.41% | 2.42% | 3.49% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –4.60% | 2.07% | 3.65% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –4.25% | 2.08% | 3.49% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems Inc. |
(x) | Assuming redemption at the end of the applicable period. |
11
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® Massachusetts Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 4/09/85 | 1.69% | 3.55% | 4.45% | ||||||||
B | 9/07/93 | 1.04% | 2.88% | 3.79% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –3.14% | 2.55% | 3.95% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –2.84% | 2.54% | 3.79% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems Inc. |
(x) | Assuming redemption at the end of the applicable period. |
Notes to Performance Summary
Performance results reflect any applicable expense subsidies and waivers in effect during the periods shown. Without such subsidies and waivers the fund’s performance results would be less favorable. Please see the prospectus and financial statements for complete details.
A portion of income may be subject to state, federal, and/or alternative minimum tax. Capital gains, if any, are subject to a capital gains tax.
From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
12
Table of Contents
Fund expenses borne by the shareholders during the period, October 1, 2007 through March 31, 2008
As a shareholder of the funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) on certain purchase or redemption payments, and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the funds and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period October 1, 2007 through March 31, 2008.
Actual expenses
The first line for each share class in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The second line for each share class in the following tables provides information about hypothetical account values and hypothetical expenses based on each fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line for each share class in the tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
MFS® ALABAMA MUNICIPAL BOND FUND
Class | Annualized Ratio | Beginning Account Value 10/01/07 | Ending Account Value | Expenses Paid During Period (p) 10/01/07-3/31/08 | ||||||
A | Actual | 1.05% | $1,000.00 | $1,007.53 | $5.27 | |||||
Hypothetical (h) | 1.05% | $1,000.00 | $1,019.75 | $5.30 | ||||||
B | Actual | 1.80% | $1,000.00 | $1,003.73 | $9.02 | |||||
Hypothetical (h) | 1.80% | $1,000.00 | $1,016.00 | $9.07 |
MFS® ARKANSAS MUNICIPAL BOND FUND
Class | Annualized Expense Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses 10/01/07-3/31/08 | ||||||
A | Actual | 0.78% | $1,000.00 | $1,008.33 | $3.92 | |||||
Hypothetical (h) | 0.78% | $1,000.00 | $1,021.10 | $3.94 | ||||||
B | Actual | 1.47% | $1,000.00 | $1,004.76 | $7.37 | |||||
Hypothetical (h) | 1.47% | $1,000.00 | $1,017.65 | $7.41 |
13
Table of Contents
Expense Tables – continued
MFS® CALIFORNIA MUNICIPAL BOND FUND
Class | Annualized Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses 10/01/07-3/31/08 | ||||||
A | Actual | 0.74% | $1,000.00 | $988.03 | $3.68 | |||||
Hypothetical (h) | 0.74% | $1,000.00 | $1,021.30 | $3.74 | ||||||
B | Actual | 1.47% | $1,000.00 | $984.40 | $7.29 | |||||
Hypothetical (h) | 1.47% | $1,000.00 | $1,017.65 | $7.41 | ||||||
C | Actual | 1.64% | $1,000.00 | $983.65 | $8.13 | |||||
Hypothetical (h) | 1.64% | $1,000.00 | $1,016.80 | $8.27 |
MFS® FLORIDA MUNICIPAL BOND FUND
Class | Annualized Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses 10/01/07-3/31/08 | ||||||
A | Actual | 0.86% | $1,000.00 | $996.05 | $4.29 | |||||
Hypothetical (h) | 0.86% | $1,000.00 | $1,020.70 | $4.34 | ||||||
B | Actual | 1.60% | $1,000.00 | $993.29 | $7.97 | |||||
Hypothetical (h) | 1.60% | $1,000.00 | $1,017.00 | $8.07 |
MFS® GEORGIA MUNICIPAL BOND FUND
Class | Annualized Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses 10/01/07-3/31/08 | ||||||
A | Actual | 1.12% | $1,000.00 | $1,013.42 | $5.64 | |||||
Hypothetical (h) | 1.12% | $1,000.00 | $1,019.40 | $5.65 | ||||||
B | Actual | 1.87% | $1,000.00 | $1,009.64 | $9.40 | |||||
Hypothetical (h) | 1.87% | $1,000.00 | $1,015.65 | $9.42 |
MFS® MARYLAND MUNICIPAL BOND FUND
Class | Annualized Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses 10/01/07-3/31/08 | ||||||
A | Actual | 1.01% | $1,000.00 | $998.42 | $5.05 | |||||
Hypothetical (h) | 1.01% | $1,000.00 | $1,019.95 | $5.10 | ||||||
B | Actual | 1.66% | $1,000.00 | $996.05 | $8.28 | |||||
Hypothetical (h) | 1.66% | $1,000.00 | $1,016.70 | $8.37 |
MFS® MASSACHUSETTS MUNICIPAL BOND FUND
Class | Annualized Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses 10/01/07-3/31/08 | ||||||
A | Actual | 1.08% | $1,000.00 | $1,008.12 | $5.42 | |||||
Hypothetical (h) | 1.08% | $1,000.00 | $1,019.60 | $5.45 | ||||||
B | Actual | 1.72% | $1,000.00 | $1,004.84 | $8.62 | |||||
Hypothetical (h) | 1.72% | $1,000.00 | $1,016.40 | $8.67 |
(h) | 5% class return per year before expenses. |
(p) | Expenses paid is equal to each class' annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
14
Table of Contents
3/31/08
MFS® ALABAMA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 98.3% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport and Port Revenue - 1.4% | ||||||
Alabama Port Authority Docks Facility, MBIA, 5.25%, 2026 (c) | $ | 1,000,000 | $ | 1,077,560 | ||
General Obligations - General Purpose - 8.7% | ||||||
Boaz, AL, School Warrants, “A”, XLCA, 5%, 2029 | $ | 650,000 | $ | 616,526 | ||
Fairfield, AL, Refunding Warrants, AMBAC, 5.25%, 2025 | 1,030,000 | 1,056,409 | ||||
Gadsden, AL, Warrants, “B”, AMBAC, 5.125%, 2028 | 1,000,000 | 1,010,960 | ||||
Hoover, AL, “B”, 6%, 2017 (c) | 500,000 | 535,880 | ||||
Houston County, AL, AMBAC, 6.25%, 2019 (c) | 750,000 | 812,078 | ||||
Mobile County, AL, 6%, 2014 (c) | 1,345,000 | 1,413,649 | ||||
Puerto Rico Commonwealth, “A”, 5.25%, 2030 (c) | 615,000 | 696,641 | ||||
Puerto Rico Commonwealth, “A”, 5.25%, 2030 | 385,000 | 372,222 | ||||
Tuscaloosa, AL, AMBAC, 4.375%, 2037 | 500,000 | 432,965 | ||||
$ | 6,947,330 | |||||
General Obligations - Improvement - 4.9% | ||||||
Birmingham, AL, “A”, 5.75%, 2017 | $ | 1,000,000 | $ | 1,060,900 | ||
Birmingham, AL, “A”, AMBAC, 4.5%, 2032 | 890,000 | 787,196 | ||||
Montgomery, AL, Warrants, MBIA, 5.1%, 2021 | 1,005,000 | 1,031,703 | ||||
Puerto Rico Municipal Finance Agency, FSA, 5.5%, 2017 (u) | 1,000,000 | 1,056,300 | ||||
$ | 3,936,099 | |||||
General Obligations - Schools - 8.2% | ||||||
Bessemer, AL, School Warrants, AMBAC, 5.5%, 2020 | $ | 2,015,000 | $ | 2,070,735 | ||
Jefferson County, AL, School Warrants, FSA, 5.5%, 2020 | 1,750,000 | 1,806,228 | ||||
Phenix City, AL, AMBAC, 5.65%, 2021 (c) | 1,500,000 | 1,640,205 | ||||
Tuscaloosa, AL, Warrants, 5.7%, 2018 (c) | 1,000,000 | 1,067,560 | ||||
$ | 6,584,728 | |||||
Healthcare Revenue - Hospitals - 15.5% | ||||||
Alabama Special Care Facilities Financing Authority (Ascension Health Senior Credit), “C-2”, 5%, 2036 | $ | 750,000 | $ | 720,203 | ||
Alabama Special Care Facilities Financing Authority (Daughters of Charity), ETM, AMBAC, 5%, 2025 (c) | 1,500,000 | 1,503,165 | ||||
Alexander City, AL, Special Care Facilities Financing Authority Medical Facilities Rev., “A” (Russell Hospital Corp.), 5.75%, 2036 | 500,000 | 467,435 | ||||
Birmingham Medical Center, East Alabama, Special Health Care Facilities, Eastern Health Systems, “B”, 5%, 2018 (c) | 500,000 | 545,885 | ||||
Birmingham, AL, Baptist Health Systems, “A” (Baptist Medical Center), 5.625%, 2015 | 300,000 | 306,387 | ||||
Birmingham, AL, Baptist Medical Center, Special Care Facilities Rev., “A” (Baptist Health Systems, Inc.), 5%, 2030 | 200,000 | 167,178 | ||||
East Alabama Health Care Authority, Health Care Facilities Rev., 5.25%, 2036 (a) | 1,000,000 | 995,990 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Health Care Authority for Baptist Health, AL, “D”, 5%, 2021 | $ | 400,000 | $ | 394,156 | ||
Houston County, AL, Health Care Authority, AMBAC, 6.125%, 2022 (c) | 1,000,000 | 1,069,680 | ||||
Huntsville, AL, Health Care Authority Rev., 5.625%, 2026 (c) | 1,050,000 | 1,153,740 | ||||
Huntsville, AL, Health Care Authority Rev., “A”, MBIA, 5%, 2023 | 1,000,000 | 1,013,480 | ||||
Lauderdale County & Florence, AL, Health Care Authority Rev., “A” (Coffee Health Group), MBIA, 5.75%, 2014 | 1,000,000 | 1,026,800 | ||||
Marshall County, AL, Health Care Authority Rev., “A”, 5.75%, 2032 | 1,065,000 | 1,074,553 | ||||
Montgomery, AL, Medical Clinic Board Health Care Facility Rev. (Jackson Hospital & Clinic), 5.25%, 2031 | 500,000 | 439,500 | ||||
Montgomery, AL, Special Care Facilities, Financing Authority Rev. (Baptist Health), “A-2”, MBIA, 0% to 2007, 5% to 2014 (c) | 1,135,000 | 1,248,103 | ||||
Valley, AL, Special Care Facilities Financing Authority, “A” (Lanier Memorial Hospital), 5.65%, 2022 | 225,000 | 213,638 | ||||
$ | 12,339,893 | |||||
Industrial Revenue - Metals - 0.6% | ||||||
Mobile County, AL, Industrial Development Authority Rev. (Ipsco, Inc.), 6.875%, 2030 (a) | $ | 500,000 | $ | 515,470 | ||
Industrial Revenue - Other - 0.5% | ||||||
Fairfield, AL, Environment Improvement Rev. (USX Corp.), 5.4%, 2016 | $ | 400,000 | $ | 414,992 | ||
Industrial Revenue - Paper - 3.6% | ||||||
Butler, AL, Industrial Development Board, Solid Waste Disposal Rev. (Georgia Pacific Corp.), 5.75%, 2028 | $ | 200,000 | $ | 159,996 | ||
Camden, AL, Industrial Development Board Exempt Facilities Rev., “B” (Weyerhaeuser Co.), 6.375%, 2024 | 500,000 | 483,780 | ||||
Mobile, AL, Industrial Development Board Improvement Rev., “A” (International Paper Co.), 6.35%, 2016 | 650,000 | 665,152 | ||||
Mobile, AL, Industrial Development Board Improvement Rev., “B” (International Paper Co.), 6.45%, 2019 | 350,000 | 356,248 | ||||
Phenix City, AL, Industrial Development Board Environmental Improvement Rev., “A” (MeadWestvaco Coated), 6.35%, 2035 | 750,000 | 720,023 | ||||
Selma, AL, Industrial Development Board, “A” (International Paper Co.), 6.7%, 2018 | 500,000 | 512,675 | ||||
$ | 2,897,874 |
15
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Miscellaneous Revenue - Other - 1.2% | ||||||
Birmingham, AL, Downtown Redevelopment Authority Rev. (Social Security Administrative Building), ETM, 12.5%, 2010 (c) | $ | 880,000 | $ | 969,426 | ||
Multi-Family Housing Revenue - 2.5% | ||||||
Alabama Housing Finance Authority, Multi-Family Residential Development Rev., FHA, 7.25%, 2023 | $ | 1,000,000 | $ | 1,000,140 | ||
Alabama Housing Finance Authority, Multi-Family Residential Development Rev., “K” (South Bay Apartments), FNMA, 5.875%, 2021 | 960,000 | 973,824 | ||||
Birmingham, AL, Multi-Family Housing Rev., “C” (Beaconview Apartments), 8%, 2030 (d) | 395,000 | 19,750 | ||||
$ | 1,993,714 | |||||
Sales & Excise Tax Revenue - 0.9% | ||||||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 0%, 2056 | $ | 5,960,000 | $ | 319,098 | ||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | 400,000 | 375,976 | ||||
$ | 695,074 | |||||
Single Family Housing - State - 0.7% | ||||||
Alabama Housing Finance Authority, Collateral Home Mortgage Bond Program II, “B”, 5.15%, 2019 | $ | 45,000 | $ | 44,447 | ||
Alabama Housing Finance Authority, Single Family Mortgage Rev., Collateral Home Mortgage Bond Program II, “A-2”, GNMA, 5.4%, 2022 | 465,000 | 467,846 | ||||
Alabama Housing Finance Authority, Single Family Mortgage Rev., Collateral Home Mortgage Bond Program II, “B”, 5.15%, 2019 | 45,000 | 44,428 | ||||
$ | 556,721 | |||||
State & Local Agencies - 8.7% | ||||||
Alabama Building Renovation Authority, AMBAC, 6%, 2014 | $ | 1,515,000 | $ | 1,609,172 | ||
Alabama Public School & College, Capital Improvement, “A”, 5%, 2019 | 500,000 | 513,215 | ||||
Alabama Public School & College, Capital Improvement, “C”, 5.75%, 2017 | 1,000,000 | 1,043,470 | ||||
Alabama Public School & College, Capital Improvement, “C”, 5.75%, 2018 | 1,035,000 | 1,078,832 | ||||
Montgomery County, AL, Public Building Authority Rev., MBIA, 5%, 2031 | 500,000 | 494,600 | ||||
Puerto Rico Public Finance Corp., “A”, AMBAC, 5.375%, 2013 (u) | 1,000,000 | 1,093,220 | ||||
Puerto Rico Public Finance Corp., ETM, AMBAC, 5.375%, 2016 (u) | 1,000,000 | 1,102,930 | ||||
$ | 6,935,439 | |||||
Tax - Other - 1.3% | ||||||
Virgin Islands Public Finance Authority, “A”, 5.5%, 2018 | $ | 1,000,000 | $ | 1,012,700 | ||
Tobacco - 0.5% | ||||||
Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 | $ | 430,000 | $ | 410,340 |
Issuer | Shares/Par | Value ($) | ||||
Transportation - Special Tax - 1.0% | ||||||
Puerto Rico Highway & Transportation Authority Rev., ASSD GTY, 5.25%, 2034 | $ | 775,000 | $ | 799,630 | ||
Universities - Colleges - 11.9% | ||||||
Alabama Board of Education Rev., Refunding & Improvement (Southern Union State Community College), MBIA, 5%, 2022 | $ | 1,000,000 | $ | 1,021,940 | ||
Alabama Private Colleges & Universities, Facilities Authority Rev. (Tuskegee University), ASSD GTY, 4.75%, 2026 | 700,000 | 678,251 | ||||
Auburn University, General Fee Rev., AMBAC, 5%, 2029 | 1,000,000 | 998,640 | ||||
Auburn University, General Fee Rev., FSA, 5%, 2038 | 1,000,000 | 990,700 | ||||
Mobile, AL, Spring Hill College, Educational Building Authority Rev., “A”, 5.25%, 2034 | 1,360,000 | 1,376,157 | ||||
University of Alabama, Birmingham Hospital Rev., “A”, N, 5%, 2041 | 1,000,000 | 979,280 | ||||
University of Alabama, General Rev., MBIA, 5%, 2034 | 1,000,000 | 967,290 | ||||
University of Alabama, General Rev., “A”, MBIA, 5%, 2029 | 1,000,000 | 979,420 | ||||
University of Alabama, University Rev., General Fee, FGIC, 5%, 2021 | 525,000 | 541,401 | ||||
University of South Alabama, University Rev., N, 5%, 2029 | 1,000,000 | 1,006,220 | ||||
$ | 9,539,299 | |||||
Utilities - Municipal Owned - 10.6% | ||||||
Alabama Municipal Electric Power Authority, “A”, MBIA, 5%, 2023 | $ | 1,000,000 | $ | 1,034,290 | ||
Guam Power Authority Rev., AMBAC, 5%, 2018 | 4,500,000 | 4,521,960 | ||||
Puerto Rico Electric Power Authority Rev., “II”, 5.25%, 2031 (c) | 875,000 | 968,336 | ||||
Puerto Rico Electric Power Authority, Power Rev., “V”, FSA, 5.25%, 2027 | 450,000 | 470,592 | ||||
Southeastern Alabama Gas District Systems Rev., “A”, AMBAC, 5.5%, 2020 (c) | 1,000,000 | 1,086,310 | ||||
Tuskegee, AL, Utilities Board, AMBAC, 5.5%, 2022 | 400,000 | 395,960 | ||||
$ | 8,477,448 | |||||
Utilities - Other - 1.3% | ||||||
Foley, AL, Utilities Board Utilities Rev., FSA, 5%, 2025 | $ | 1,000,000 | $ | 1,020,180 | ||
Water & Sewer Utility Revenue - 14.3% | ||||||
Alabama Drinking Water Finance Authority, Revolving Fund Loan, “A”, AMBAC, 6%, 2021 | $ | 725,000 | $ | 761,743 | ||
Alabama Drinking Water Finance Authority, Revolving Fund Loan, “C”, AMBAC, 5.75%, 2018 | 1,000,000 | 1,056,900 | ||||
Alabama Water Pollution Control Authority, Revolving Fund Loan, AMBAC, 5.75%, 2019 | 1,000,000 | 1,027,430 | ||||
Alabaster, AL, Sewer Rev., MBIA, 5%, 2029 | 750,000 | 749,033 | ||||
Birmingham, AL, Waterworks & Sewer Board Rev., “A”, FGIC, 5%, 2034 | 1,365,000 | 1,320,747 | ||||
Birmingham, AL, Waterworks & Sewer Board Rev., “A”, FSA, 4.5%, 2035 | 400,000 | 358,412 |
16
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Water & Sewer Utility Revenue - continued | ||||||
Jasper, AL, Waterworks & Sewer Board, “A”, AMBAC, 5.2%, 2020 (c) | $ | 750,000 | $ | 816,893 | ||
Limestone County, AL, Water Authority, FGIC, 5.5%, 2026 (c) | 2,650,000 | 2,750,250 | ||||
Ozark, AL, Utilities Board Water & Sewer Rev., AMBAC, 5%, 2031 (c) | 100,000 | 108,685 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | 400,000 | 399,464 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 2,000,000 | 2,045,860 | ||||
$ | 11,395,417 | |||||
Total Municipal Bonds (Identified Cost, $77,274,554) | $ | 78,519,334 |
Floating Rate Demand Notes - 0.3% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “B”, 1.17%, due 4/01/08, at Identified Cost | $ | 200,000 | $ | 200,000 | ||
Total Investments (Identified Cost, $77,474,554) (k) | $ | 78,719,334 | ||||
Other Assets, Less Liabilities - 1.4% | 1,151,314 | |||||
Net Assets - 100.0% | $ | 79,870,648 |
Derivative Contracts at 3/31/08
Swap Agreements at 3/31/08
Expiration | Notional | Counterparty | Cash Flows to Receive | Cash Flows to Pay | Value | |||||||
Interest Rate Swaps | ||||||||||||
8/13/23 | USD | 1,000,000 | Goldman Sachs International | 3.795% (fixed rate) | 7-Day BMA | $25,654 | ||||||
7/11/28 | USD | 1,250,000 | Citibank | 3.695% (fixed rate) | 7-Day BMA | 2,005 | ||||||
$27,659 |
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
17
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® ARKANSAS MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 94.7% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport and Port Revenue - 0.6% | ||||||
Little Rock, AR, Airport Rev., “A”, FSA, 5.25%, 2019 | $ | 800,000 | $ | 811,808 | ||
General Obligations - General Purpose - 11.2% | ||||||
Arkansas College Savings, “A”, ETM, 0%, 2017 (c) | $ | 1,840,000 | $ | 1,273,225 | ||
Commonwealth of Puerto Rico, “A”, 5.25%, 2027 | 1,145,000 | 1,120,486 | ||||
Commonwealth of Puerto Rico, ETM, 5.5%, 2019 (u) | 2,500,000 | 2,702,500 | ||||
Commonwealth of Puerto Rico, Public Improvement, MBIA, 5.75%, 2010 (c) | 6,000,000 | 6,424,140 | ||||
Puerto Rico Commonwealth Puerto Rico, “A”, 5.25%, 2016 (c) | 800,000 | 906,200 | ||||
Puerto Rico Commonwealth, Public Improvement, “A”, SCIFG, 5%, 2014 (c) | 605,000 | 665,809 | ||||
Puerto Rico Commonwealth, Public Improvement, “A”, SCIFG, 5%, 2034 | 395,000 | 363,566 | ||||
Puerto Rico Public Buildings Authority Rev. (State Office Building), “F”, XLCA, 5.25%, 2025 | 2,000,000 | 1,993,100 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 385,000 | 422,457 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2031 | 420,000 | 445,024 | ||||
$ | 16,316,507 | |||||
General Obligations - Improvement - 5.9% | ||||||
Guam Government, “A”, 5.25%, 2037 | $ | 255,000 | $ | 216,653 | ||
Puerto Rico Municipal Finance Agency, FSA, 5.5%, 2017 (u) | 1,470,000 | 1,552,761 | ||||
Puerto Rico Municipal Finance Agency, “A”, 5.5%, 2018 (u) | 6,500,000 | 6,865,950 | ||||
$ | 8,635,364 | |||||
General Obligations - Schools - 5.3% | ||||||
Arkansas, Capital Appreciation, College Savings, “B”, ETM, 0%, 2012 (c) | $ | 1,200,000 | $ | 1,049,784 | ||
Arkansas, Capital Appreciation, College Savings, “B”, ETM, 0%, 2013 (c) | 1,000,000 | 840,720 | ||||
Arkansas, Capital Appreciation, College Savings, “B”, ETM, 0%, 2014 (c) | 1,150,000 | 925,290 | ||||
Arkansas, Capital Appreciation, College Savings, “B”, ETM, 0%, 2015 (c) | 1,100,000 | 844,811 | ||||
Little Rock, AR, School District Construction, “C”, FSA, 5%, 2017 | 1,000,000 | 1,037,000 | ||||
Little Rock, AR, School District, “A”, FSA, 5.4%, 2010 (c) | 1,000,000 | 1,056,250 | ||||
Northwest Arkansas Community College District, Capital Improvement, AMBAC, 5%, 2028 | 1,380,000 | 1,385,658 | ||||
Pine Bluff, AR, School District Construction, MBIA, 4.75%, 2033 | 565,000 | 519,659 | ||||
$ | 7,659,172 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - 8.6% | ||||||
Arkansas Development Finance Authority Rev. (Washington Regional Medical Center), 7.25%, 2010 (c) | $ | 500,000 | $ | 542,715 | ||
Arkansas Development Finance Authority, Health Refunding Rev. (Sister of Mercy), “A”, MBIA, 5%, 2013 | 4,050,000 | 4,249,867 | ||||
Batesville, AR, Medical District Rev. (White River Medical Center), 5.5%, 2024 | 750,000 | 713,047 | ||||
Baxter County, AR, Hospital Rev. (Baxter Regional Hospital), 5%, 2026 | 1,000,000 | 895,560 | ||||
Baxter County, AR, Hospital Rev., Refunding & Improvement, “B”, 5.6%, 2009 (c) | 1,500,000 | 1,571,940 | ||||
Crittenden County, AR, Hospital Rev., Refunding & Improvement, 7.15%, 2010 (c) | 750,000 | 835,515 | ||||
Jefferson County, AR, Hospital Rev., Refunding & Improvement (Regional Medical Center), 5.8%, 2021 | 1,000,000 | 1,034,270 | ||||
Little Rock, AR, Health Facilities Hospital Board Rev. (Baptist Medical Center), 6.9%, 2009 | 400,000 | 422,644 | ||||
North Little Rock, AR, Health Facilities Board Rev. (Baptist Health Facilities), 5.7%, 2022 | 500,000 | 508,950 | ||||
Sebastian County, AR, Health Facilities Improvement Rev. (Sparks Regional Medical Center), “A”, 5.25%, 2021 | 1,000,000 | 931,840 | ||||
Washington County, AR, Hospital Rev. (Regional Medical Center), “A”, 5%, 2035 | 1,000,000 | 883,100 | ||||
$ | 12,589,448 | |||||
Industrial Revenue - Other - 0.2% | ||||||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | $ | 335,000 | $ | 327,858 | ||
Industrial Revenue - Paper - 0.6% | ||||||
Arkansas Development Finance Authority, Industrial Facilities Rev. (Potlatch Corp.), “A”, 7.75%, 2025 | $ | 250,000 | $ | 267,635 | ||
Pine Bluff, AR, Environmental Improvement (International Paper Co.), “A”, 5.55%, 2022 | 250,000 | 235,785 | ||||
Pine Bluff, AR, Environmental Refunding (International Paper Co.), “A”, 6.7%, 2020 | 300,000 | 312,210 | ||||
$ | 815,630 | |||||
Multi-Family Housing Revenue - 0.7% | ||||||
Fort Smith, AR, Residential Housing Facilities Board Rev. (Gorman Towers), “A”, GNMA, 5.45%, 2037 | $ | 1,000,000 | $ | 968,820 | ||
Sales & Excise Tax Revenue - 1.0% | ||||||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 0%, 2056 | $ | 9,770,000 | $ | 523,086 | ||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | 1,010,000 | 949,339 | ||||
$ | 1,472,425 |
18
Table of Contents
Portfolio of Investments - continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Single Family Housing - Local - 6.8% | ||||||
Harrison, AR, Residential Housing Facilities Board, Single Family Mortgage Rev., ETM, FGIC, 7.4%, 2011 (c) | $ | 4,000,000 | $ | 4,608,600 | ||
Lonoke County, AR, Residential Housing Facilities Rev., “A-2”, FNMA, 7.9%, 2011 | 40,842 | 41,081 | ||||
Pulaski County, AR, Public Facilities Board Rev., “A”, GNMA, 5.75%, 2034 | 1,810,000 | 1,810,579 | ||||
Pulaski County, AR, Public Facilities Board Rev., “C”, FNMA, 0%, 2014 | 2,750,000 | 2,102,045 | ||||
Sherwood, AR, Residential Housing Facilities Board, Single Family Rev., MBIA, 7.5%, 2010 (c) | 1,250,000 | 1,392,513 | ||||
$ | 9,954,818 | |||||
Single Family Housing - State - 7.1% | ||||||
Arkansas Development Finance Authority Rev., Mortgage Backed Securities Program, “B”, GNMA, 5%, 2029 | $ | 180,000 | $ | 177,835 | ||
Arkansas Development Finance Authority Rev., Mortgage Backed Securities Program, “B”, GNMA, 4.45%, 2034 | 645,000 | 642,304 | ||||
Arkansas Development Finance Authority Rev., Mortgage Backed Securities Program, “C”, GNMA, 5.35%, 2027 | 1,560,000 | 1,523,418 | ||||
Arkansas Development Finance Authority Rev., Mortgage Backed Securities Program, “C”, 5.625%, 2035 | 1,630,000 | 1,654,760 | ||||
Arkansas Development Finance Authority Rev., Mortgage Backed Securities Program, “D”, GNMA, 5.85%, 2024 | 540,000 | 541,053 | ||||
Arkansas Development Finance Authority Rev., Mortgage Backed Securities Program, “E”, GNMA, 5.4%, 2034 | 665,000 | 642,330 | ||||
Arkansas Development Finance Authority, Mortgage Backed Securities Program, “C”, 5.3%, 2023 | 255,000 | 255,495 | ||||
Arkansas Development Finance Authority, Mortgage Backed Securities Program, “I”, GNMA, 5.3%, 2033 | 290,000 | 276,973 | ||||
Arkansas Development Finance Authority, Mortgage Rev., “B”, GNMA, 4.85%, 2031 | 925,000 | 820,059 | ||||
Arkansas Development Finance Authority, Mortgage Rev., “B”, GNMA, 5.25%, 2035 | 2,150,000 | 2,156,901 | ||||
Arkansas Development Finance Authority, Single Family Mortgage Rev., “B”, GNMA, 5.125%, 2024 | 445,000 | 435,130 | ||||
Arkansas Housing Development Agency, Single Family Rev., Mortgage Program, 8.375%, 2011 (c) | 1,000,000 | 1,180,220 | ||||
$ | 10,306,478 | |||||
State & Local Agencies - 1.8% | ||||||
Arkansas Development Finance Authority Rev., Environmental State Agency Facilities, “A”, AMBAC, 5%, 2040 | $ | 2,500,000 | $ | 2,433,150 |
Issuer | Shares/Par | Value ($) | ||||
State & Local Agencies - continued | ||||||
Arkansas Development Finance Authority, Economic Development Rev. (Agritecsorbents LLC) “B”, 5%, 2018 | $ | 175,000 | $ | 177,856 | ||
$ | 2,611,006 | |||||
Tax - Other - 2.9% | ||||||
Little Rock, AR, Hotel & Restaurant Gross Receipts Tax Rev., 7.375%, 2015 | $ | 2,790,000 | $ | 3,240,222 | ||
Virgin Islands Public Finance Authority Rev., “A“, 5.5%, 2022 | 1,000,000 | 1,005,310 | ||||
$ | 4,245,532 | |||||
Tobacco - 1.3% | ||||||
Arkansas Development Finance Authority, Tobacco Settlement Rev. (Cancer Research Center Project), AMBAC, 0%, 2026 | $ | 2,000,000 | $ | 715,100 | ||
Arkansas Development Finance Authority, Tobacco Settlement Rev. (Cancer Research Center Project), AMBAC, 0%, 2027 | 1,940,000 | 648,658 | ||||
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 | 225,000 | 214,713 | ||||
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.5%, 2039 | 290,000 | 277,550 | ||||
$ | 1,856,021 | |||||
Transportation - Special Tax - 2.0% | ||||||
Puerto Rico Highway & Transportation Authority, “B“, MBIA, 5.875%, 2010 (c) | $ | 2,000,000 | $ | 2,170,320 | ||
Puerto Rico Highway & Transportation Authority, “G“, 5%, 2023 | 750,000 | 749,153 | ||||
$ | 2,919,473 | |||||
Universities - Colleges - 17.7% | ||||||
Arkansas State University, Housing Systems Rev., AMBAC, 5.15%, 2021 | $ | 1,240,000 | $ | 1,288,459 | ||
Arkansas Technical University, Housing Systems Rev., AMBAC, 5.2%, 2026 | 1,000,000 | 1,067,720 | ||||
Arkansas University Rev., Student Fee, AMBAC, 5%, 2032 | 2,495,000 | 2,437,041 | ||||
Conway, AR, Public Facilities Board, Capital Improvement Rev. (Hendrix College), “B“, 5%, 2035 | 1,000,000 | 943,040 | ||||
Siloam Springs, AR, Public Education Facilities, Capital Improvement Rev. (John Brown University), AMBAC, 5.35%, 2020 | 500,000 | 515,705 | ||||
University of Arkansas, University Construction Rev. (Monticello), AMBAC, 5%, 2025 | 1,525,000 | 1,544,383 | ||||
University of Arkansas, University Construction Rev. (UAMS Campus), “B“, MBIA, 5%, 2026 | 1,405,000 | 1,429,349 | ||||
University of Arkansas, University Construction Rev. (UAMS Campus), “B“, MBIA, 5%, 2027 | 2,180,000 | 2,210,389 | ||||
University of Arkansas, University Construction Rev. (UAMS Campus), “B“, MBIA, 5%, 2034 | 3,290,000 | 3,297,172 | ||||
University of Arkansas, University Facilities Rev. (Fayetteville Campus), FGIC, 5%, 2027 | 3,155,000 | 3,170,396 |
19
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Universities - Colleges - continued | ||||||
University of Arkansas, University Facilities Rev. (Fayetteville Campus), FGIC, 5%, 2032 | $ | 2,500,000 | $ | 2,475,350 | ||
University of Arkansas, University Facilities Rev. (Pine Bluff Campus), “A”, AMBAC, 5%, 2030 | 1,000,000 | 998,590 | ||||
University of Arkansas, University Facilities Rev. (UAMS Campus), FGIC, 5%, 2028 | 2,000,000 | 2,002,500 | ||||
University of Central Arkansas Rev., “A”, AMBAC, 5%, 2023 | 1,100,000 | 1,100,440 | ||||
University of Central Arkansas, Student Housing Rev., “C”, FGIC, 5%, 2009 (c) | 250,000 | 261,668 | ||||
University of Puerto Rico Rev., “Q”, 5%, 2036 | 1,145,000 | 1,050,251 | ||||
$ | 25,792,453 | |||||
Universities - Dormitories - 0.3% | ||||||
Pope County, AR, Residential Housing, Facilities Board Rev. (Arkansas Technical University Project), “A”, 6%, 2027 | $ | 500,000 | $ | 480,450 | ||
Utilities - Investor Owned - 0.5% | ||||||
Jefferson County, AR, Pollution Control Rev. (Entergy Arkansas, Inc., Project), 4.6%, 2017 | $ | 750,000 | $ | 736,987 | ||
Utilities - Municipal Owned - 8.3% | ||||||
Benton, AR, Utilities Rev., AMBAC, 5%, 2030 | $ | 470,000 | $ | 469,351 | ||
Benton, AR, Utilities Rev., AMBAC, 5%, 2036 | 2,000,000 | 1,920,820 | ||||
North Little Rock, AR, Electric Rev., “A”, MBIA, 6.5%, 2010 | 1,275,000 | 1,319,906 | ||||
North Little Rock, AR, Electric Rev., “A”, MBIA, 6.5%, 2015 | 6,000,000 | 6,856,860 | ||||
Puerto Rico Electric Power Authority Rev., “NN”, 5.125%, 2013 (c) | 1,000,000 | 1,105,430 | ||||
Puerto Rico Electric Power Authority, “TT”, 5%, 2027 | 470,000 | 456,948 | ||||
$ | 12,129,315 | |||||
Water & Sewer Utility Revenue - 11.9% | ||||||
Arkansas Development Finance Authority, Economic Development Rev., “I”, AMBAC, 5.65%, 2014 | $ | 70,000 | $ | 70,080 | ||
Fort Smith, AR, Water & Sewer Rev., AMBAC, 5.65%, 2009 (c) | 1,000,000 | 1,053,780 |
Issuer | Shares/Par | Value ($) | ||||
Water & Sewer Utility Revenue - continued | ||||||
Fort Smith, AR, Water & Sewer Rev., “C”, FSA, 5.25%, 2020 | $ | 1,315,000 | $ | 1,382,551 | ||
Fort Smith, AR, Water & Sewer Rev., Refunding & Construction, “A”, FSA, 5%, 2019 | 2,125,000 | 2,199,970 | ||||
Fort Smith, AR, Water & Sewer Rev., Refunding & Construction, “A”, FSA, 5%, 2021 (f) | 2,750,000 | 2,822,600 | ||||
Little Rock, AR, Sewer Rev., “A”, FSA, 4.375%, 2033 | 750,000 | 661,072 | ||||
Little Rock, AR, Sewer Rev., Refunding & Construction, 5%, 2022 | 1,750,000 | 1,778,280 | ||||
Paragould, AR, Water Sewer & Electric Rev., AMBAC, 5.6%, 2010 (c) | 765,000 | 830,400 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | 1,200,000 | 1,198,392 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 2,000,000 | 2,045,860 | ||||
Rogers, AR Sewer Rev., Improvement, AMBAC, 5%, 2037 | 1,000,000 | 958,700 | ||||
South Sebastian County, AR, Water Refunding Rev., MBIA, 5%, 2038 | 1,000,000 | 1,000,250 | ||||
Virgin Islands Water & Power Authority Rev., RADIAN, 5.3%, 2018 | 1,250,000 | 1,264,288 | ||||
$ | 17,266,223 | |||||
Total Municipal Bonds (Identified Cost, $135,272,036) | $ | 137,895,788 | ||||
Floating Rate Demand Notes - 2.0% | ||||||
East Baton Rouge, LA, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | $ | 100,000 | $ | 100,000 | ||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “A”, 1.17%, due 4/01/08 | 1,500,000 | 1,500,000 | ||||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “B”, 1.17%, due 4/01/08 | 1,300,000 | 1,300,000 | ||||
Total Floating Rate Demand Notes, at Identified Cost and Value | $ | 2,900,000 | ||||
Total Investments (Identified Cost, $138,172,036) (k) | $ | 140,795,788 | ||||
Other Assets, Less Liabilities - 3.3% | 4,869,463 | |||||
Net Assets - 100.0% | $ | 145,665,251 |
Derivative Contracts at 3/31/08
Futures contracts outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ | ||||
U.S. Treasury Note 30 yr (Short) | 9 | $1,069,172 | Jun-08 | $14,501 |
Swap Agreements at 3/31/08
Expiration | Notional | Counterparty | Cash Flows to Receive | Cash Flows to Pay | Value | |||||||
Interest Rate Swaps | ||||||||||||
8/13/23 | USD | 2,000,000 | Goldman Sachs International | 3.795% (fixed rate) | 7-Day BMA | $51,308 |
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
20
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® CALIFORNIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 102.9% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport & Port Revenue - 2.7% | ||||||
Long Beach, CA, Harbor Rev., “A”, FGIC, 5.25%, 2018 | $ | 3,500,000 | $ | 3,588,373 | ||
Palm Springs, CA, Palm Springs International Airport, 5.55%, 2028 | 530,000 | 479,772 | ||||
Port Oakland, CA, “A”, MBIA, 5%, 2026 | 3,000,000 | 2,798,010 | ||||
Port Oakland, CA, “K”, FGIC, 5.75%, 2020 | 4,000,000 | 4,049,680 | ||||
$ | 10,915,835 | |||||
General Obligations - General Purpose - 12.6% | ||||||
Commonwealth of Puerto Rico, XLCA, 5.5%, 2017 | $ | 3,000,000 | $ | 3,210,570 | ||
Commonwealth of Puerto Rico, Public Improvement, FGIC, 5.5%, 2016 | 6,600,000 | 7,007,880 | ||||
Los Angeles, CA, FGIC, 5.25%, 2014 (u) | 10,810,000 | 11,959,535 | ||||
State of California, 5.125%, 2025 | 2,000,000 | 2,014,380 | ||||
State of California, 5.5%, 2026 | 2,000,000 | 2,098,040 | ||||
State of California, 5.25%, 2029 | 2,000,000 | 2,027,920 | ||||
State of California, 5%, 2031 | 3,980,000 | 3,920,658 | ||||
State of California, 5%, 2032 | 3,000,000 | 2,946,120 | ||||
State of California, AMBAC, 7.2%, 2008 | 1,600,000 | 1,600,000 | ||||
State of California, AMBAC, 6.3%, 2010 | 3,000,000 | 3,262,110 | ||||
State of California, AMBAC, 7%, 2010 | 2,000,000 | 2,214,280 | ||||
State of California, FSA, 5%, 2037 (f) | 2,000,000 | 1,984,680 | ||||
State of California, Various Purposes, 4.75%, 2034 | 3,130,000 | 2,947,584 | ||||
State of California, Various Purposes, “91”, 5%, 2028 | 3,000,000 | 2,977,440 | ||||
$ | 50,171,197 | |||||
General Obligations - Improvement - 0.7% | ||||||
Citrus, CA, Community College District, Election of 2004, “B”, MBIA, 4.75%, 2031 | $ | 2,350,000 | $ | 2,235,743 | ||
Guam Government, “A”, 5.25%, 2037 | 815,000 | 692,440 | ||||
$ | 2,928,183 | |||||
General Obligations - Schools - 16.5% | ||||||
Antelope Valley, CA (Union High School), “A”, MBIA, 5%, 2027 | $ | 1,500,000 | $ | 1,526,550 | ||
Butte Glenn Community College District, “A”, MBIA, 5%, 2026 | 1,885,000 | 1,928,204 | ||||
Campbell, CA, Union High School District, FSA, 5%, 2021 | 1,280,000 | 1,321,958 | ||||
Capistrano, CA, Union High School District, “A”, FGIC, 5.875%, 2020 | 1,185,000 | 1,265,959 | ||||
Chaffey, CA, Union High School District, “C”, FSA, 5%, 2027 | 1,000,000 | 1,023,800 | ||||
Coast Community College District, CA, Capital Appreciation, Election of 2002, “C”, FSA, 0%, 2033 | 5,000,000 | 1,155,000 | ||||
Colton, CA, Joint Union School District, “A”, FGIC, 5.375%, 2026 | 1,200,000 | 1,243,140 | ||||
Colton, CA, Joint Union School District, Election of 2001, “C”, FGIC, 0%, 2032 | 1,000,000 | 235,600 |
Issuer | Shares/Par | Value ($) | ||||
General Obligations - Schools - continued | ||||||
Colton, CA, Joint Union School District, Election of 2001, “C”, FGIC, 0%, 2033 | $ | 3,000,000 | $ | 661,980 | ||
Coronado, CA, Union School District, “A”, 5.7%, 2020 | 1,285,000 | 1,359,157 | ||||
Desert, CA, Community College District, FSA, 0%, 2031 | 3,315,000 | 859,712 | ||||
Gilroy Cauni School District, Election of 2002, “N”, FGIC, 5%, 2027 | 1,190,000 | 1,199,353 | ||||
Glendale, CA, Community College District, Election 2002, “D”, MBIA, 5%, 2031 | 2,710,000 | 2,713,631 | ||||
Glendale, CA, Union School District, “B”, FSA, 5.5%, 2018 | 4,275,000 | 4,351,865 | ||||
Hillsborough, CA, School District, Capital Appreciation, Election of 2002, “B”, 0%, 2023 | 2,285,000 | 1,038,967 | ||||
Hillsborough, CA, School District, Capital Appreciation, Election of 2002, “B”, 0%, 2024 | 2,640,000 | 1,120,654 | ||||
Inglewood, CA, Union School District, “A”, FGIC, 6%, 2009 (c) | 1,695,000 | 1,808,701 | ||||
Little Lake, CA, City School District, “A”, FSA, 6.125%, 2010 (c) | 1,035,000 | 1,133,542 | ||||
Live Oak, CA, School District, Santa Cruz County, Election of 2004, “A”, MBIA, 5%, 2033 | 1,410,000 | 1,474,099 | ||||
Los Angeles, CA, Unified School District, Election 2002, “B”, AMBAC, 4.5%, 2031 | 3,325,000 | 3,079,515 | ||||
Los Angeles, CA, Union School District, FSA, 5.25%, 2013 (c)(u) | 10,000,000 | 11,140,400 | ||||
Moreland, CA, School District, Election of 2002, “B”, FGIC, 0%, 2028 | 1,440,000 | 453,082 | ||||
Natomas Union School District, Election of 2002, “B”, FGIC, 5%, 2028 | 1,430,000 | 1,436,163 | ||||
Oceanside, CA, Union School District, Election of 2000, “C”, MBIA, 5.25%, 2032 | 1,940,000 | 1,974,377 | ||||
Palm Springs, CA, Union School District, FSA, 4.5%, 2036 | 1,035,000 | 925,052 | ||||
Palos Verdes Peninsula, CA, Capital Appreciation, “N”, FSA, 0%, 2029 | 4,405,000 | 1,304,012 | ||||
Peralta, CA, Community College District, FSA, 5%, 2032 | 2,500,000 | 2,518,375 | ||||
Perris, CA, Union School District, “A”, FGIC, 0%, 2027 | 3,100,000 | 1,037,353 | ||||
San Gabriel, CA, Union School District, “A”, FSA, 5%, 2024 | 2,000,000 | 2,051,460 | ||||
San Lorenzo, CA, Unified School District, Alameda County, Election 2004, “B”, FGIC, 4.75%, 2037 | 4,115,000 | 3,957,313 | ||||
San Ysidro, CA, School District, AMBAC, 6.125%, 2021 | 960,000 | 1,084,877 | ||||
Santa Clara, CA, Union School District, FGIC, 5.5%, 2019 | 2,210,000 | 2,308,323 | ||||
Santa Clarita, CA, Community College District, Capital Appreciation, Election of 2006, MBIA, 0%, 2033 | 5,625,000 | 1,236,600 |
21
Table of Contents
Portfolio of Investments - continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
General Obligations - Schools - continued | ||||||
Sausalito Marin City, CA, School District, Capital Appreciation, Election of 2004, “B”, MBIA, 0%, 2039 | $ | 1,315,000 | $ | 203,233 | ||
Sausalito Marin City, CA, School District, Capital Appreciation, Election of 2004, “B”, MBIA, 0%, 2040 | 1,400,000 | 203,210 | ||||
Shasta, CA, Union High School District, Election 2001, MBIA, 0%, 2027 | 2,020,000 | 654,096 | ||||
Tehachapi, CA, Union School District, “A”, FGIC, 5.625%, 2009 (c) | 1,100,000 | 1,161,479 | ||||
Walnut Valley, CA, Union School District, Election of 2000, “E”, FSA, 0%, 2028 | 1,535,000 | 502,452 | ||||
Washington, CA, Union School District, Election of 1999, “A”, FGIC, 5.625%, 2021 | 1,000,000 | 1,054,380 | ||||
$ | 65,707,624 | |||||
Healthcare Revenue - Hospitals - 13.9% | ||||||
ABAG Finance Authority Rev. (San Diego Hospital), “C”, 5.375%, 2020 | $ | 2,000,000 | $ | 2,007,420 | ||
California Health Facilities Financing Authority Rev. (Sutter Health), “A”, 5%, 2042 | 3,000,000 | 2,812,740 | ||||
California Health Facilities Financing Authority Rev., Catholic Healthcare West, “G”, 5.25%, 2023 | 2,000,000 | 2,008,280 | ||||
California Health Facilities Financing Authority Rev., Cedars Sinai Medical Center, 5%, 2027 | 1,000,000 | 977,940 | ||||
California Health Facilities Financing Authority Rev., Health Facilities (Adventist Health Systems), “A”, 5%, 2033 | 1,750,000 | 1,610,753 | ||||
California Municipal Finance Authority, Certificates of Participation (Community Hospitals, Central California), 5.25%, 2037 | 2,000,000 | 1,678,300 | ||||
California Statewide Communities Development Authority Rev. (Henry Mayo Newhall Memorial Hospital), “A”, CHFC, 5%, 2018 | 2,000,000 | 2,021,460 | ||||
California Statewide Communities Development Authority Rev. (Kaiser Permanente), “A”, 5.5%, 2032 | 2,000,000 | 2,007,120 | ||||
California Statewide Communities Development Authority Rev. (Los Angeles Children's Hospital), 5.125%, 2019 | 4,000,000 | 3,903,880 | ||||
California Statewide Communities Development Authority Rev. (Sutter Health), “B”, AMBAC, 5%, 2038 | 3,000,000 | 2,908,410 | ||||
California Statewide Communities Development Authority Rev. (Valleycare Health Systems), “A”, 5.125%, 2031 | 2,000,000 | 1,655,500 | ||||
California Statewide Communities Development Authority Rev., “B”, 5.625%, 2042 | 4,000,000 | 4,034,320 | ||||
California Statewide Communities Development Authority Rev., ETM, CHFC, 0%, 2008 (c) | 6,345,000 | 6,299,570 | ||||
California Statewide Communities Development Authority Rev., Health Facilities (Memorial Health Services), “A”, 6%, 2023 | 1,500,000 | 1,585,230 | ||||
California Statewide Communties Development Authority Rev. (St. Joseph Health System), FGIC, 5.75%, 2047 | 4,000,000 | 4,024,200 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Central California Joint Powers Health Financing (Community Hospitals of Central California), 5.625%, 2011 (c) | $ | 1,000,000 | $ | 1,084,070 | ||
Kaweah Delta Health Care District Rev., 6%, 2012 (c) | 2,000,000 | 2,290,980 | ||||
Rancho Mirage, CA, Joint Powers (Eisenhower Medical Center), 5.625%, 2014 (c) | 3,000,000 | 3,425,070 | ||||
Rancho Mirage, CA, Joint Powers (Eisenhower Medical Center), “A”, 5%, 2047 | 3,000,000 | 2,677,200 | ||||
Sierra View, CA, Local Health Care District Rev., 5.25%, 2037 | 1,870,000 | 1,705,851 | ||||
Tahoe Forest California Hospital District, “A”, 5.85%, 2009 (c) | 795,000 | 846,588 | ||||
Tahoe Forest California Hospital District, “A”, 5.85%, 2022 | 205,000 | 205,098 | ||||
Turlock, CA, Health Facilities Rev. (Emanuel Medical Center), 5%, 2024 | 500,000 | 451,415 | ||||
Valley Health Systems, CA, Partners Refunding Project, 6.875%, 2023 (d) | 455,000 | 304,850 | ||||
Washington Township, CA, Health Care Rev., 5%, 2018 | 1,000,000 | 1,013,060 | ||||
West Contra Costa, CA, Healthcare District, AMBAC, 5.5%, 2029 | 2,000,000 | 1,840,360 | ||||
$ | 55,379,665 | |||||
Healthcare Revenue - Long Term Care - 0.8% | ||||||
California Health Facilities Financing Authority Rev. (Paradise Valley Estates), 5.125%, 2022 | $ | 1,000,000 | $ | 1,005,980 | ||
California Statewide Communities Development Authority Rev. (Senior Living Presbyterian Homes), 4.875%, 2036 | 1,000,000 | 814,330 | ||||
La Verne, CA, COP (Brethren Hillcrest Homes), “B”, 6.625%, 2025 | 1,000,000 | 1,025,060 | ||||
Millbrae, CA, Residential Facilities Rev. (Magnolia of Millbrae), “A”, 7.375%, 2027 | 425,000 | 428,723 | ||||
$ | 3,274,093 | |||||
Human Services - 0.6% | ||||||
California Statewide Communities Development Authority (Prides Industries), 7.125%, 2009 (c) | $ | 1,455,000 | $ | 1,571,429 | ||
California Statewide Communities Development Authority Rev. (Inland Regional Center), 5.375%, 2037 | 860,000 | 769,519 | ||||
$ | 2,340,948 | |||||
Industrial Revenue - Environmental Services - 1.3% | ||||||
California Pollution Control Financing Authority, Solid Waste Disposal Rev. (Browning Ferris, Inc.), “A”, 5.8%, 2016 | $ | 2,000,000 | $ | 1,864,300 | ||
California Pollution Control Financing Authority, Solid Waste Disposal Rev. (Waste Management, Inc.), “A”, 5.125%, 2031 (a) | 2,250,000 | 2,184,210 | ||||
California Pollution Control Financing Authority, Solid Waste Disposal Rev. (Waste Management, Inc.), “A-2”, 5.4%, 2025 | 1,250,000 | 1,095,788 | ||||
$ | 5,144,298 |
22
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Industrial Revenue - Other - 0.5% | ||||||
California Enterprise Development Authority Sewer Facilities Rev. (Anheuser-Busch), 5.3%, 2047 | $ | 1,000,000 | $ | 892,360 | ||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 960,000 | 939,533 | ||||
$ | 1,831,893 | |||||
Miscellaneous Revenue - Other - 1.1% | ||||||
California Infrastructure & Economic Development Bank Rev. (Walt Disney Family Musuem), 5.25%, 2033 | $ | 1,090,000 | $ | 1,079,471 | ||
San Diego County, CA, COP (Burnham Institute for Medical Research), 5%, 2034 | 1,000,000 | 824,820 | ||||
San Diego County, CA, COP (Burnham Institute), 6.25%, 2009 (c) | 2,300,000 | 2,443,313 | ||||
$ | 4,347,604 | |||||
Multi-Family Housing Revenue - 2.3% | ||||||
California Statewide Communities Development Authority Rev. (Irvine Apartments), 5.25%, 2025 (a) | $ | 6,000,000 | $ | 6,029,340 | ||
San Bernardino County, CA (Equity Residential/Redlands), “A”, 5.2%, 2029 (a) | 3,000,000 | 3,087,840 | ||||
$ | 9,117,180 | |||||
Parking - 0.3% | ||||||
San Francisco, CA, Union Square, MBIA, 6%, 2020 | $ | 1,000,000 | $ | 1,090,590 | ||
Single Family Housing - Local - 2.7% | ||||||
California Housing Finance Agency Rev., “A”, 4.95%, 2036 | $ | 3,400,000 | $ | 2,962,182 | ||
California Rural Home Mortgage Finance Authority Rev., GNMA, 7.3%, 2031 | 15,000 | 15,288 | ||||
California Rural Home Mortgage Finance Authority Rev., GNMA, 5.4%, 2036 | 2,485,000 | 2,494,567 | ||||
California Rural Home Mortgage Finance Authority Rev., “A”, GNMA, 5.75%, 2044 | 1,980,000 | 2,009,759 | ||||
California Rural Home Mortgage Finance Authority Rev., Mortgage Backed Securities Program, “B4”, GNMA, 6.35%, 2029 | 25,000 | 25,139 | ||||
Pomona, CA, Single Family Mortgage Rev., ETM, GNMA, 7.375%, 2010 (c) | 750,000 | 786,938 | ||||
Pomona, CA, Single Family Mortgage Rev., ETM, GNMA, 7.5%, 2023 (c) | 2,000,000 | 2,597,480 | ||||
$ | 10,891,353 | |||||
Single Family Housing - State - 1.6% | ||||||
California Housing Finance Agency Rev., Home Mortgage, FSA, 0%, 2019 | $ | 875,000 | $ | 414,033 | ||
California Housing Finance Agency Rev., Home Mortgage, MBIA, 0%, 2028 | 3,680,000 | 1,167,075 | ||||
California Housing Finance Agency Rev., Home Mortgage, “E”, FGIC, 5.05%, 2026 | 2,480,000 | 2,308,434 | ||||
California Housing Finance Agency Rev., Home Mortgage, “I”, 4.75%, 2031 | 3,000,000 | 2,608,890 | ||||
$ | 6,498,432 |
Issuer | Shares/Par | Value ($) | ||||
Solid Waste Revenue - 0.8% | ||||||
California Pollution Control Financing Authority, Solid Waste Disposal Rev. (West County Resource Recovery), “A”, 5.125%, 2014 | $ | 1,000,000 | $ | 1,005,180 | ||
South Bayside Waste Management Authority, California Solid Waste System Rev., AMBAC, 5.75%, 2020 | 2,100,000 | 2,185,911 | ||||
$ | 3,191,091 | |||||
State & Agency - Other - 1.1% | ||||||
Pasadena CA, COP, Old Pasadena Parking Facilities Project, 6.25%, 2018 | $ | 2,635,000 | $ | 2,960,686 | ||
Sacramento County, CA, COP, Capital Projects, AMBAC, 5.75%, 2018 | 1,500,000 | 1,580,955 | ||||
$ | 4,541,641 | |||||
State & Local Agencies - 12.3% | ||||||
Banning, CA, COP, Water Systems Improvement Project, ETM, AMBAC, 8%, 2019 (c) | $ | 835,000 | $ | 1,053,069 | ||
California Department of Water Resources, Power Supply Rev., “C”, 5.25%, 2028 | 2,500,000 | 2,535,225 | ||||
California Public Works Board Lease Rev., Department of Corrections State Prison, “A”, 7.4%, 2010 | 5,000,000 | 5,539,900 | ||||
California Public Works Board, Department of Justice, “D”, 5.25%, 2020 | 1,565,000 | 1,617,428 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A”, FSA, 0% to 2010, 4.55% to 2022 | 3,000,000 | 2,480,400 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, 5%, 2045 | 5,500,000 | 4,938,560 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, FGIC, 5%, 2035 | 2,000,000 | 1,944,840 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “B”, 5.5%, 2013 (c) | 7,000,000 | 7,693,630 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “B”, 5.625%, 2013 (c) | 5,000,000 | 5,524,800 | ||||
Los Angeles, CA, COP, Real Property Program, AMBAC, 5.3%, 2027 | 3,000,000 | 3,084,630 | ||||
Pomona, CA, Public Financing Authority Rev., “A”, AMBAC, 5%, 2042 | 3,735,000 | 3,503,169 | ||||
Pomona, CA, Public Financing Authority Rev., “P”, 6.25%, 2010 | 3,100,000 | 3,311,110 | ||||
Sacramento, CA, City Financing Authority Rev., Capital Improvement, 5.5%, 2010 (c) | 1,635,000 | 1,764,165 | ||||
San Francisco, CA, City & County, COP (San Bruno Jail No. 3), AMBAC, 5.25%, 2033 | 3,930,000 | 3,919,035 | ||||
$ | 48,909,961 | |||||
Tax - Other - 0.9% | ||||||
Virgin Islands Public Finance Authority Rev., “A”, 5.5%, 2022 | $ | 2,000,000 | $ | 2,010,620 | ||
Virgin Islands Public Finance Authority Rev., “E”, 5.875%, 2018 | 1,600,000 | 1,625,968 | ||||
$ | 3,636,588 |
23
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Tax Assessment - 4.9% | ||||||
Bay Area Governments Association, Tax Allocation, “A”, AMBAC, 5%, 2033 | $ | 3,700,000 | $ | 3,535,868 | ||
Fontana, CA, Redevelopment Agency Tax Allocation (Jurupa Hills Redevelopment Project), “A”, 5.5%, 2027 | 3,350,000 | 3,415,359 | ||||
Irvine, CA, School District Special Tax Rev., Community Facilities District No. 86-1, AMBAC, 5.8%, 2020 | 3,500,000 | 3,577,525 | ||||
La Mirada, CA, Redevelopment Agency, Special Tax Rev., Community Facilities District No. 89-1, 5.7%, 2020 | 1,500,000 | 1,454,685 | ||||
Orange County, CA, Community Facilities District, Special Tax (Rancho Santa Margarita), “A”, 5.55%, 2017 | 1,000,000 | 1,003,310 | ||||
Poway, CA, Community Facilities District, Special Tax (Parkway Business Center), 6.5%, 2010 | 715,000 | 734,755 | ||||
Poway, CA, Community Facilities District, Special Tax (Parkway Business Center), 6.75%, 2015 | 775,000 | 794,057 | ||||
Riverside County, CA, Redevelopment Agency, Tax Allocation, “A”, XLCA, 5%, 2037 | 2,000,000 | 1,925,400 | ||||
San Diego, CA, Redevelopment Agency, Tax Allocation (Centre City), “B”, AMBAC, 5.3%, 2020 | 1,250,000 | 1,293,938 | ||||
Santa Fe Springs, CA, Community Development Commission, Tax Allocation, MBIA, 0%, 2026 | 4,720,000 | 1,603,242 | ||||
$ | 19,338,139 | |||||
Tobacco - 3.9% | ||||||
California County, CA, Tobacco Securitization Agency, Capital Appreciation Asset Backed (Gold Country), 0%, 2033 | $ | 3,930,000 | $ | 695,924 | ||
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, “A”, 0%, 2050 | 2,000,000 | 99,640 | ||||
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, “B”, 0%, 2055 | 2,000,000 | 63,440 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 6.75%, 2013 (c) | 2,645,000 | 3,062,407 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 6.25%, 2013 (c) | 2,935,000 | 3,201,410 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 2047 | 8,000,000 | 7,064,400 | ||||
Inland Empire, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Asset Backed, “C-1”, 0%, 2036 | 5,000,000 | 674,750 | ||||
Silicon Valley Tobacco Securitization Authority, CA, Tobacco Settlement Rev. (Turbo-Santa Clara), “A”, 0%, 2036 | 5,000,000 | 657,450 | ||||
$ | 15,519,421 | |||||
Toll Roads - 0.7% | ||||||
Foothill/Eastern Corridor Agency, CA, Toll Road Rev., Capital Appreciation, “A”, 7.1%, 2010 (c) | $ | 2,500,000 | $ | 2,756,975 |
Issuer | Shares/Par | Value ($) | ||||
Universities - Colleges - 7.3% | ||||||
Cabrillo, CA, Community College District Capital Appreciation, “A”, MBIA, 0%, 2028 | $ | 1,000,000 | $ | 320,920 | ||
California Educational Facilities Authority Rev. (Dominican University), 5%, 2036 | 1,150,000 | 944,863 | ||||
California Educational Facilities Authority Rev. (Fresno Pacific University), “A”, 6.75%, 2019 | 2,000,000 | 2,093,800 | ||||
California Educational Facilities Authority Rev. (Lutheran University), “C”, 5%, 2029 | 2,500,000 | 2,256,725 | ||||
California Educational Facilities Authority Rev. (Pomona College), “B”, 5.875%, 2009 (c) | 2,000,000 | 2,116,020 | ||||
California Educational Facilities Authority Rev. (Santa Clara University), “A”, MBIA, 5%, 2027 | 1,340,000 | 1,355,249 | ||||
California Educational Facilities Authority Rev. (University Financing Project), 5%, 2017 | 685,000 | 665,909 | ||||
California Educational Facilities Authority Rev. (University Financing Project), 5%, 2026 | 1,315,000 | 1,183,697 | ||||
California Educational Facilities Authority Rev. (University of La Verne), “A”, 5%, 2029 | 1,500,000 | 1,309,500 | ||||
California Educational Facilities Authority Rev., “B”, 6.625%, 2010 (c) | 830,000 | 913,315 | ||||
California Educational Facilities Authority Rev., Unrefunded, “B”, 6.625%, 2020 | 170,000 | 187,065 | ||||
California Municipal Finance Authority Rev. (Biola University), 5.8%, 2028 | 2,000,000 | 1,981,080 | ||||
California Statewide Communities, Notre Dame de Namur University, 6.625%, 2033 | 1,000,000 | 1,025,130 | ||||
Chabot Las Positas, CA, Community College, Capital Appreciation, “C”, AMBAC, 0%, 2036 | 3,800,000 | 723,862 | ||||
Foothill-De Anza, CA, Community College District, “A”, AMBAC, 4.5%, 2031 | 5,000,000 | 4,464,400 | ||||
Foothill-De Anza, CA, Community College District, Election of 1999, “B”, FGIC, 0%, 2025 | 1,500,000 | 582,885 | ||||
Hastings College of the Law, CA, ASSD GTY, 4.75%, 2037 | 1,290,000 | 1,172,081 | ||||
Long Beach, CA, Industrial Development Rev. (CSU Foundation), “A”, 5.25%, 2023 | 1,450,000 | 1,463,152 | ||||
San Mateo County, CA (Community College District, 2005 Election), “A”, MBIA, 0%, 2026 | 3,000,000 | 1,092,990 | ||||
Santa Monica, CA (Community College District, 2002 Election), “C”, MBIA, 0%, 2027 | 2,000,000 | 653,500 | ||||
University of California, “J”, FSA, 4.5%, 2035 | 3,000,000 | 2,716,020 | ||||
$ | 29,222,163 | |||||
Universities - Dormitories - 0.5% | ||||||
California Statewide Communities Development Authority Rev. (Lancer Educational Student Housing Project), 5.625%, 2033 | $ | 2,000,000 | $ | 1,802,640 | ||
Universities - Secondary Schools - 1.0% | ||||||
California Statewide Communities Development Authority Rev. (Escondido Charter High School), 7.5%, 2011 (c) | $ | 1,000,000 | $ | 1,175,300 | ||
California Statewide Communities Development Authority Rev., Aspire Public Schools (Oakland Project), “A”, 7.25%, 2031 | 945,000 | 949,706 | ||||
Los Angeles, CA, COP, 5.7%, 2018 | 1,900,000 | 1,939,938 | ||||
$ | 4,064,944 |
24
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Utilities - Investor Owned - 1.5% | ||||||
California Pollution Control Financing Authority, Pollution Control Rev. (Pacific Gas & Electric Co.), MBIA, 5.35%, 2016 | $ | 3,500,000 | $ | 3,589,250 | ||
Chula Vista, CA, Industrial Development Rev. (San Diego Gas), “B”, 5%, 2027 | 2,500,000 | 2,295,800 | ||||
$ | 5,885,050 | |||||
Utilities - Municipal Owned - 1.5% | ||||||
Glendale, CA, Electric Works Rev., MBIA, 5.75%, 2010 (c) | $ | 1,420,000 | $ | 1,523,688 | ||
Glendale, CA, Electric Works Rev., MBIA, 5.75%, 2010 (c) | 1,160,000 | 1,244,703 | ||||
Northern California Power Agency Public Power Rev., 5.85%, 2010 | 880,000 | 935,378 | ||||
Virgin Islands Water & Power Authority Rev., 5.5%, 2017 | 800,000 | 814,104 | ||||
Virgin Islands Water & Power Authority Rev., 5.3%, 2018 | 250,000 | 245,718 | ||||
Virgin Islands Water & Power Authority Rev., “A”, 5.125%, 2013 | 1,000,000 | 1,007,610 | ||||
$ | 5,771,201 | |||||
Utilities - Other - 0.9% | ||||||
Southern California Public Power Authority (Natural Gas Project No. 1), “A”, 5%, 2033 | $ | 3,915,000 | $ | 3,539,512 | ||
Water & Sewer Utility Revenue - 8.0% | ||||||
California Department of Water Resources, Central Valley Project Rev., “X”, FGIC, 5%, 2029 | $ | 2,000,000 | $ | 2,011,420 | ||
California Department of Water Resources, Water Systems Rev., 7%, 2012 | 1,090,000 | 1,276,216 | ||||
California Department of Water Resources, Water Systems Rev., ETM, 7%, 2012 (c) | 405,000 | 478,050 | ||||
Culver City, CA, Wastewater Facilities Rev., “A”, FGIC, 5.6%, 2019 | 1,000,000 | 1,042,870 |
Issuer | Shares/Par | Value ($) | ||||
Water & Sewer Utility Revenue - continued | ||||||
El Monte, CA, Water Authority Rev., Water Systems Project, AMBAC, 6%, 2010 (c) | $ | 1,065,000 | $ | 1,179,179 | ||
Hollister, CA, Joint Powers Financing Authority Wastewater Rev. (Refining & Improvement Project), “1”, FSA, 5%, 2037 | 4,000,000 | 3,939,360 | ||||
Livermore Amador Valley Water Management Rev., “A”, AMBAC, 5%, 2031 | 4,875,000 | 4,861,350 | ||||
Lodi, CA, Wastewater Systems Revenue, FSA, 5%, 2032 | 1,000,000 | 993,010 | ||||
Placerville, CA, Public Financing Authority Rev. (Wastewater Systems Refining & Improvement Project), XCLA, 5%, 2034 | 2,000,000 | 1,893,400 | ||||
Southern California Metropolitan Water District Rev., 5.75%, 2018 (u) | 10,000,000 | 11,435,500 | ||||
West Sacramento, CA, Financing Authority Rev., Water Systems Improvement Project, FGIC, 5%, 2032 | 2,750,000 | 2,655,978 | ||||
$ | 31,766,333 | |||||
Total Municipal Bonds (Identified Cost, $408,745,804) | $ | 409,584,554 | ||||
Floating Rate Demand Notes - 0.4% | ||||||
East Baton Rouge, LA, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | $ | 900,000 | $ | 900,000 | ||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “A”, 1.17%, due 4/01/08 | 100,000 | 100,000 | ||||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “C”, 1.17%, due 4/01/08 | 700,000 | 700,000 | ||||
Total Floating Rate Demand Notes, at Identified Cost and Value | $ | 1,700,000 | ||||
Total Investments (Identified Cost, $410,445,804) (k) | $ | 411,284,554 | ||||
Other Assets, Less Liabilities - (3.3)% | (13,083,808) | |||||
Net Assets - 100.0% | $ | 398,200,746 |
Derivative Contracts at 3/31/08
Futures contracts outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ (Depreciation) | ||||
U.S. Treasury Bond 30 yr (Short) | 25 | $2,969,922 | Jun-08 | $40,280 |
At March 31, 2008, the fund had sufficient cash and /or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
25
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® FLORIDA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 97.7% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport & Port Revenue - 4.3% | ||||||
Greater Orlando Aviation Authority Rev., “A”, FGIC, 5.25%, 2018 | $ | 1,000,000 | $ | 1,005,330 | ||
Lee County, FL, Airport Rev., “A”, FSA, 5.875%, 2018 | 1,000,000 | 1,044,180 | ||||
Pensacola, FL, Airport Rev., “B”, MBIA, 5.625%, 2014 | 500,000 | 510,555 | ||||
$ | 2,560,065 | |||||
General Obligations - General Purpose - 7.1% | ||||||
Commonwealth of Puerto Rico, Public Improvement, MBIA, 5.75%, 2010 (c) | $ | 2,000,000 | $ | 2,141,380 | ||
Florida Department of Transportation, 5%, 2017 | 2,000,000 | 2,050,340 | ||||
$ | 4,191,720 | |||||
General Obligations - Schools - 7.7% | ||||||
Florida Board of Education, Capital Outlay, 9.125%, 2014 | $ | 2,600,000 | $ | 3,054,480 | ||
Florida Board of Education, Capital Outlay, ETM, 9.125%, 2014 (c) | 400,000 | 520,048 | ||||
Florida Board of Education, Public Education, “J”, 5%, 2032 | 1,000,000 | �� | 990,240 | |||
$ | 4,564,768 | |||||
Healthcare Revenue - Hospitals - 16.9% | ||||||
Citrus County, FL, Hospital Development Authority Rev. (Citrus Memorial Hospital), 6.25%, 2023 | $ | 450,000 | $ | 454,649 | ||
Denver, CO, Health & Hospital Authority Rev., “A”, 6%, 2011 (c) | 250,000 | 278,565 | ||||
Hillsborough County, FL, Industrial Development Authority Rev. (University Community Hospital), MBIA, 6.5%, 2019 | 1,000,000 | 1,198,030 | ||||
Indiana Health & Educational Facilities Authority, Hospital Rev. (Community Foundation of Northwest Indiana), “A”, 6.375%, 2011 (c) | 380,000 | 428,268 | ||||
Indiana Health & Educational Facilities Authority, Hospital Rev. (Community Foundation of Northwest Indiana), Unrefunded Balance, “A”, 6.375%, 2031 | 120,000 | 118,908 | ||||
Jacksonville, FL, Health Facilities Rev. (Ascencion Health), “A”, 5.25%, 2032 | 1,000,000 | 1,000,900 | ||||
Leesburg, FL, Hospital Rev. (Leesburg Regional Medical Center), 5.5%, 2032 | 750,000 | 699,615 | ||||
Marion County, FL, Hospital District Rev., 5.5%, 2009 (c) | 480,000 | 506,126 | ||||
Marion County, FL, Hospital District Rev., 5.5%, 2014 | 20,000 | 20,523 | ||||
Marshall County, AL, Health Care Authority Rev., “A”, 6.25%, 2022 | 500,000 | 529,955 | ||||
Martin County, FL, Health Facilities Authority Rev. (Martin Memorial Medical Center), “A”, 5.75%, 2012 (c) | 500,000 | 563,440 | ||||
Miami Beach, FL, Health Facilities Authority Rev. (Mount Sinai Medical Center), “A”, 6.7%, 2019 | 250,000 | 254,630 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
New Hampshire Health & Education Facilities Authority Rev. (Exeter Hospital), 6%, 2024 | $ | 500,000 | $ | 526,625 | ||
Orange County, FL, Health Facilities Authority Hospital Rev. (Orlando Regional Healthcare), 5.75%, 2012 (c) | 1,000,000 | 1,119,210 | ||||
Rhode Island Health & Educational Building Corp., Hospital Financing (Lifespan Obligated Group), 6.5%, 2012 (c) | 500,000 | 573,530 | ||||
South Dakota Health & Education Facilities Authority Rev. (Prairie Lakes Health Care System), 5.625%, 2032 | 500,000 | 489,370 | ||||
Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial Healthcare), 6.25%, 2020 | 300,000 | 304,287 | ||||
Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial Regional Medical Center), MBIA, 6.625%, 2013 | 885,000 | 887,593 | ||||
$ | 9,954,224 | |||||
Healthcare Revenue - Long Term Care - 0.8% | ||||||
New Jersey Economic Development Authority Rev. (Seashore Gardens), 5.375%, 2036 | $ | 300,000 | $ | 244,491 | ||
Orange County, FL, Health Facilities Authority Rev. (Orlando Lutheran Towers), 5.7%, 2026 | 250,000 | 224,598 | ||||
$ | 469,089 | |||||
Human Services - 0.6% | ||||||
Orange County, FL, Health Facilities Authority Rev. (GF/Orlando Healthcare Facilities), 8.875%, 2021 | $ | 300,000 | $ | 325,365 | ||
Industrial Revenue - Chemicals - 1.2% | ||||||
Brazos River, TX, Brazoria County Environmental Rev. (Dow Chemical, Co.), “A-7”, 6.625%, 2033 | $ | 500,000 | $ | 520,010 | ||
Red River Authority, TX, Pollution Control Rev. (Celanese Project) “B”, 6.7%, 2030 | 200,000 | 184,528 | ||||
$ | 704,538 | |||||
Industrial Revenue - Environmental Services - 0.5% | ||||||
Nevada Department of Business & Industry Rev. (Republic Services, Inc.), 5.625%, 2026 (a) | $ | 300,000 | $ | 293,286 | ||
Industrial Revenue - Other - 1.1% | ||||||
Park Creek Metropolitan District, CO, Rev. (Custodial Receipts), “CR-2”, 7.875%, 2032 (a)(n) | $ | 160,000 | $ | 169,352 | ||
Tooele County, UT, Hazardous Waste Treatment Rev. (Union Pacific Corp.), 5.7%, 2026 | 500,000 | 487,130 | ||||
$ | 656,482 | |||||
Industrial Revenue - Paper - 1.0% | ||||||
Delta County, MI, Economic Development Corp., Environmental Improvements Rev. (Mead Westvaco Escanaba), “A”, 6.25%, 2012 (c) | $ | 500,000 | $ | 562,505 |
26
Table of Contents
Portfolio of Investments - continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Miscellaneous Revenue - Entertainment & Tourism - 1.7% | ||||||
Palm Beach County, FL, Industrial Development Rev. (South Florida Fair Project), MBIA, 5.5%, 2020 | $ | 1,000,000 | $ | 1,027,990 | ||
Miscellaneous Revenue - Other - 0.5% | ||||||
Madison County, FL, Rev. (Twin Oaks Project), “A”, 6%, 2025 | $ | 130,000 | $ | 125,204 | ||
Summit County, OH, Port Authority Building Rev. (Seville Project), “A”, 5.1%, 2025 | 200,000 | 183,828 | ||||
$ | 309,032 | |||||
Multi-Family Housing Revenue - 3.5% | ||||||
Bay County, FL, Housing Finance Authority, Multi-Family Rev. (Andrews Place II Apartments), FSA, 5%, 2035 | $ | 500,000 | $ | 444,575 | ||
Florida Housing Finance Corp., Housing Rev. (Augustine Club Apartments), “D-1”, MBIA, 5.5%, 2010 (c) | 500,000 | 546,480 | ||||
Florida Housing Finance Corp., Housing Rev. (Crossing at University Apartments), “Q-1”, AMBAC, 5.1%, 2018 | 980,000 | 979,236 | ||||
Palm Beach County, FL, Housing Finance Authority Rev. (Westlake Apartments Project, Phase II), FSA, 4.3%, 2012 | 100,000 | 101,198 | ||||
$ | 2,071,489 | |||||
Sales & Excise Tax Revenue - 3.9% | ||||||
Miami-Dade County, FL, Special Obligations, Capital Appreciation, “A”, MBIA, 0%, 2032 | $ | 2,000,000 | $ | 492,960 | ||
Pasco County, FL, Sales Tax Rev. (Half Central), AMBAC, 5%, 2023 | 1,000,000 | 1,012,220 | ||||
Volusia County, FL, Tourist Development Tax Rev., FSA, 5%, 2034 | �� | 815,000 | 816,320 | |||
$ | 2,321,500 | |||||
Single Family Housing - Local - 0.8% | ||||||
Brevard County, FL, Housing Finance Authority Rev. “B”, GNMA, 6.5%, 2022 | $ | 24,000 | $ | 24,222 | ||
Lee County, FL, Housing Finance Authority Rev. (Multi-County Program), “A-1”, GNMA, 7.2%, 2033 | 25,000 | 25,846 | ||||
Manatee County, FL, Housing Finance Mortgage Rev. (Single Family, Subordinated), Series 3, GNMA, 5.3%, 2028 | 45,000 | 45,167 | ||||
Miami-Dade County, FL, Housing Finance Authority Rev. (Home Ownership Mortgage), “A-1”, GNMA, 5.2%, 2031 | 365,000 | 363,657 | ||||
$ | 458,892 | |||||
Single Family Housing - State - 1.4% | ||||||
Florida Housing Finance Corp. Rev. (Homeowner Mortgage), “1”, GNMA, 4.8%, 2031 | $ | 965,000 | $ | 848,660 | ||
Solid Waste Revenue - 0.3% | ||||||
Delaware County, PA, Industrial Development Authority, Resource Recovery Facilities Rev. (American Ref-Fuel Co.), “A”, 6.2%, 2019 | $ | 200,000 | $ | 200,368 |
Issuer | Shares/Par | Value ($) | ||||
State & Local Appropriation - 1.7% | ||||||
Florida Municipal Loan Council Rev., “C”, MBIA, 5.25%, 2022 | $ | 1,000,000 | $ | 1,023,720 | ||
Tax - Other - 0.2% | ||||||
Virgin Islands Public Finance Authority Rev., “A”, 5.25%, 2024 | $ | 130,000 | $ | 127,195 | ||
Tax Assessment - 4.2% | ||||||
Arborwood Community Development District, FL, Special Assessment (Master Infrastructure Projects), “B”, 5.1%, 2014 | $ | 195,000 | $ | 175,471 | ||
Ave Maria, FL, Stewardship Community, “A”, 5.125%, 2038 | 200,000 | 149,216 | ||||
Concord Station Community Development District, FL, Special Assessment, 5%, 2015 | 145,000 | 127,461 | ||||
Concorde Estates Community Development District, FL, Special Assessment, “B”, 5%, 2011 | 190,000 | 184,413 | ||||
Durbin Crossing Community Development District, FL, Special Assessment, “B-1”, 4.875%, 2010 | 225,000 | 213,482 | ||||
Greyhawk Landing Community Development District, FL, Special Assessment, “B”, 6.25%, 2009 | 50,000 | 49,833 | ||||
Killarney Community Development District, FL, Special Assessment, “B”, 5.125%, 2009 | 100,000 | 97,949 | ||||
Lakes by the Bay South Community Development District, FL, Rev., “B”, 5.3%, 2009 | 105,000 | 104,196 | ||||
Middle Village Community Development District, FL, Special Assessment, “A”, 5.8%, 2022 | 85,000 | 79,486 | ||||
Middle Village Community Development District, FL, Special Assessment, “B”, 5%, 2009 | 35,000 | 34,503 | ||||
New Port Tampa Bay Community Development District, FL, Special Assessment, “B”, 5.3%, 2012 | 200,000 | 141,912 | ||||
North Springs Improvement District, FL, Special Assessment (Parkland Golf Country Club), “B-2”, 5.125%, 2015 | 140,000 | 119,640 | ||||
Old Palm Community Development District, FL, Special Assessment (Palm Beach Gardens), “B”, 5.375%, 2014 | 105,000 | 93,553 | ||||
Panther Trace II, Community Development District, FL, Special Assessment, “B”, 5%, 2010 | 95,000 | 91,250 | ||||
Parkway Center, Community Development District, FL, Special Assessment, “B”, 5.625%, 2014 | 85,000 | 78,493 | ||||
Renaissance Community Development District, FL, Special Assessment, “B”, 6.25%, 2008 | 75,000 | 74,936 | ||||
Sterling Hill Community Development District, FL, Special Assessment, 5.5%, 2010 | 60,000 | 59,604 | ||||
Tuscany Reserve Community Development District, FL, Special Assessment, “B”, 5.25%, 2016 | 220,000 | 189,796 | ||||
Villa Portofino West Community Development District, FL, Special Assessment, “A”, 5.35%, 2036 | 185,000 | 144,159 | ||||
Watergrass Community Development District, FL, Special Assessment, “B”, 4.875%, 2010 | 135,000 | 128,575 | ||||
Wentworth Estates Community Development District, FL, Special Assessment, “B”, 5.125%, 2012 | 155,000 | 141,844 | ||||
$ | 2,479,772 |
27
Table of Contents
Portfolio of Investments - continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Tobacco - 3.2% | ||||||
Buckeye, OH, Tobacco Settlement Rev., Asset Backed, “A-2”, 5.875%, 2030 | $ | 500,000 | $ | 461,732 | ||
Buckeye, OH, Tobacco Settlement Rev., Asset Backed, “A-2”, 5.875%, 2047 | 1,050,000 | 923,874 | ||||
Louisiana Tobacco Settlement Authority Rev., “2001-B”, 5.875%, 2039 | 250,000 | 232,365 | ||||
South Carolina Tobacco Settlement Authority Rev., “B”, 6.375%, 2030 | 250,000 | 243,168 | ||||
$ | 1,861,139 | |||||
Transportation - Special Tax - 9.1% | ||||||
Commonwealth of Puerto Rico Highway & Transportation Authority, MBIA, 5.5%, 2020 | $ | 5,000,000 | $ | 5,349,550 | ||
Universities - Colleges - 1.1% | ||||||
Florida Board Regents, Housing Rev., MBIA, 5.3%, 2020 | $ | 610,000 | $ | 629,081 | ||
Universities - Dormitories - 3.8% | ||||||
Florida Board Regents, Housing Rev. (University of Central Florida), FGIC, 5.25%, 2020 | $ | 1,185,000 | $ | 1,207,302 | ||
Florida Finance Authority, Capital Loan Projects Rev., “F”, MBIA, 5.125%, 2021 | 1,000,000 | 1,032,120 | ||||
$ | 2,239,422 | |||||
Universities - Secondary Schools - 0.3% | ||||||
Deerfield, IL, Educational Facilities Authority Rev. (Chicagoland Jewish High School Project), 6%, 2041 | $ | 200,000 | $ | 185,186 | ||
Utilities - Investor Owned - 0.9% | ||||||
Hillsborough County, FL, Industrial Development Authority, Pollution Control Rev. (Tempa Electric Co.), “A”, 5.65%, 2018 | $ | 500,000 | $ | 502,645 |
Issuer | Shares/Par | Value ($) | ||||
Utilities - Municipal Owned - 1.7% | ||||||
Palm Coast, FL, Utility Systems Rev., MBIA, 5%, 2024 | $ | 250,000 | $ | 254,200 | ||
St. Lucie West, FL, Utility Rev., MBIA, 5.25%, 2034 | 720,000 | 725,321 | ||||
$ | 979,521 | |||||
Water & Sewer Utility Revenue - 18.2% | ||||||
Florida Community Services Corp., Utility Rev., AMBAC, 5.5%, 2018 | $ | 1,125,000 | $ | 1,184,411 | ||
Miami Beach, FL, Stormwater Rev., FGIC, 5.25%, 2020 | 1,000,000 | 1,026,610 | ||||
Miami-Dade County, FL, Stormwater Utility Rev., MBIA, 5%, 2028 | 2,000,000 | 1,994,980 | ||||
New York, NY, Municipal Water & Sewer Finance Authority Rev., AMBAC, 5%, 2039 | 1,000,000 | 1,001,120 | ||||
Pinellas County, FL, Sewer Rev., FSA, 5%, 2032 (f) | 1,500,000 | 1,501,425 | ||||
Polk County, FL, Utility Systems Rev., FGIC, 5%, 2023 | 1,000,000 | 1,014,380 | ||||
Polk County, FL, Utility Systems Rev., “A”, FGIC, 5%, 2030 | 1,000,000 | 954,530 | ||||
Seminole County, FL, Water & Sewer Rev., Unrefunded Balance, MBIA, 6%, 2019 | 940,000 | 1,070,030 | ||||
Tallahassee, FL, Consolidated Utility Systems Rev., 5%, 2037 | 1,000,000 | 989,340 | ||||
$ | 10,736,826 | |||||
Total Investments (Identified Cost, $57,080,852) (k) | $ | 57,634,030 | ||||
Other Assets, Less Liabilities - 2.3% | 1,367,418 | |||||
Net Assets - 100.0% | $ | 59,001,448 |
Derivative Contracts at 3/31/08
Futures contracts outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ (Depreciation) | ||||
U.S. Treasury Bond 30 yr (Short) | 3 | $356,391 | Jun-08 | $4,833 |
Swap Agreements at 3/31/08
Expiration | Notional Amount | Counterparty | Cash Flows to Receive | Cash Flows to Pay | Value | |||||||
Interest Rate Swaps | ||||||||||||
8/13/23 | USD | 1,000,000 | Goldman Sachs International | 3.795% (fixed rate) | 7-Day BMA | $25,654 |
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
28
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® GEORGIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 99.2% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport & Port Revenue - 5.0% | ||||||
Atlanta, GA, Airport Passenger Facilities Rev., “J”, FSA, 5%, 2029 | $ | 750,000 | $ | 748,020 | ||
Atlanta, GA, Airport Passenger Facilities Rev., “J”, FSA, 5%, 2034 | 750,000 | 737,145 | ||||
Atlanta, GA, Airport Rev., “B”, FSA, 5.25%, 2033 | 1,000,000 | 1,012,650 | ||||
Augusta, GA, Airport Rev., “B”, 5.35%, 2028 | 350,000 | 324,996 | ||||
$ | 2,822,811 | |||||
General Obligations - General Purpose - 2.8% | ||||||
Atlanta & Fulton County, GA, Park Improvement, “A”, MBIA, 5%, 2030 | $ | 500,000 | $ | 497,280 | ||
Macon Bibb County, GA, Urban Development Rev. (Bibb County Public Facilities Project), 5.5%, 2022 | 1,000,000 | 1,048,510 | ||||
$ | 1,545,790 | |||||
General Obligations - Improvement - 2.9% | ||||||
Guam Government, “A”, 5.25%, 2037 | $ | 100,000 | $ | 84,962 | ||
Paulding County, GA (Courthouse Government Complex), FGIC, 5%, 2032 | 500,000 | 500,320 | ||||
Puerto Rico Municipal Finance Agency, FSA, 6%, 2009 (c)(u) | 1,000,000 | 1,062,820 | ||||
$ | 1,648,102 | |||||
General Obligations - Schools - 7.2% | ||||||
Fayette County, GA, School District Rev., FSA, 0% to 2010, 4.9% to 2024 | $ | 575,000 | $ | 498,197 | ||
Forsyth County, GA, School District, 6%, 2010 (c) | 750,000 | 811,058 | ||||
Fulton County, GA, School District, 6.375%, 2010 | 1,535,000 | 1,593,821 | ||||
Wilkes County, GA, School District, 5%, 2024 | 1,115,000 | 1,145,707 | ||||
$ | 4,048,783 | |||||
Healthcare Revenue - Hospitals - 11.7% | ||||||
Carroll City-County, GA, Hospital Authority Rev. (Tanner Medical Center), ASSD GTY, 5%, 2038 | $ | 1,000,000 | $ | 969,600 | ||
Chatham County, GA, Hospital Authority Rev. (Memorial Health Medical Center), “A”, 6%, 2017 | 350,000 | 354,137 | ||||
Chatham County, GA, Hospital Authority Rev., Hospital Improvement (Memorial Health University), “A”, 5.375%, 2026 | 200,000 | 179,792 | ||||
Cobb County, GA, Hospital Authority Revolving, Refunding & Improvement Rev., Anticipation Certificates, AMBAC, 5.25%, 2023 | 750,000 | 786,128 | ||||
Coffee County, GA, Hospital Authority Rev. (Coffee Regional Medical Center, Inc.), 5%, 2026 | 350,000 | 314,255 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Gainesville & Hall Counties, GA, Hospital Authority Rev. (Northeast Georgia Health System, Inc.), 5.5%, 2011 (c) | $ | 500,000 | $ | 540,005 | ||
Houston County, GA, Hospital Authority Rev., Anticipation Certificates, 5.25%, 2042 | 500,000 | 469,780 | ||||
Royston, GA, Hospital Authority Rev. (Ty Cobb Healthcare System, Inc.), 6.125%, 2009 | 150,000 | 150,350 | ||||
Tift County, GA, Hospital Authority Rev., Anticipation Certificates, AMBAC, 5%, 2022 | 2,000,000 | 2,033,380 | ||||
Valdosta & Lowndes County, GA, Hospital Authority Rev. (Southern Georgia Medical Center Project), AMBAC, 5.25%, 2027 | 500,000 | 503,315 | ||||
Valdosta & Lowndes County, GA, Hospital Authority Rev. (Southern Georgia Medical Center Project), 5%, 2033 | 300,000 | 273,891 | ||||
$ | 6,574,633 | |||||
Healthcare Revenue - Long Term Care - 0.7% | ||||||
Fulton County, GA, Residential Care Facilities (Canterbury Court), “A”, 6.125%, 2034 | $ | 150,000 | $ | 135,386 | ||
Fulton County, GA, Residential Care Facilities, First Mortgage (Lenbrook Project), “A”, 5%, 2027 | 150,000 | 122,633 | ||||
Georgia Medical Center Hospital Authority Rev. (Spring Harbor Green Island Project), 5.25%, 2037 | 200,000 | 149,756 | ||||
$ | 407,775 | |||||
Industrial Revenue - Environmental Services - 0.9% | ||||||
Savannah, GA, Economic Development Authority, Solid Waste Disposal Rev. (Georgia Waste Management Project), “A”, 5.5%, 2016 | $ | 500,000 | $ | 487,040 | ||
Industrial Revenue - Other - 1.6% | ||||||
Cartersville, GA, Development Authority Waste & Water Facilities Rev. (Anheuser-Busch Project), 5.95%, 2032 | $ | 750,000 | $ | 758,865 | ||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 160,000 | 156,589 | ||||
$ | 915,454 | |||||
Industrial Revenue - Paper - 2.4% | ||||||
Effingham County, GA, Development Authority, Solid Waste Disposal Rev. (Fort James), 5.625%, 2018 | $ | 150,000 | $ | 132,768 | ||
Rockdale County, GA, Development Authority Project Rev. (Visy Paper Project), “A”, 6.125%, 2034 | 150,000 | 134,912 | ||||
Savannah, GA, Economic Development Pollution (Union Camp Corp.), 6.15%, 2017 | 1,000,000 | 1,054,610 | ||||
$ | 1,322,290 |
29
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Multi-Family Housing Revenue - 2.4% | ||||||
East Point Housing Authority, Multi-Family Rev. (Laurel Ridge at Washington Road Apartments LP), FNMA, 5%, 2032 (a) | $ | 500,000 | $ | 465,335 | ||
Hinesville, GA, Leased Housing Corp., “A“, FHA, 6.7%, 2017 | 900,000 | 901,719 | ||||
$ | 1,367,054 | |||||
Sales & Excise Tax Revenue - 0.5% | ||||||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | $ | 280,000 | $ | 263,183 | ||
Single Family Housing - State - 4.1% | ||||||
Georgia Housing & Finance Authority Rev., 5.5%, 2032 | $ | 1,000,000 | $ | 1,004,520 | ||
Georgia Housing & Finance Authority Rev., Single Family Mortgage, “A“, 5.6%, 2032 | 565,000 | 572,176 | ||||
Georgia Housing & Finance Authority Rev., Single Family Mortgage, “C-2“, 5.1%, 2022 | 750,000 | 740,805 | ||||
$ | 2,317,501 | |||||
State & Agency - Other - 2.8% | ||||||
County Commissioners of Georgia Assn., Leasing Program, Rockdale County, GA (Public Purpose Project), AMBAC, 5.625%, 2010 (c) | $ | 335,000 | $ | 362,862 | ||
County Commissioners of Georgia Assn., Leasing Program, Rockdale County, GA, (Public Purpose Project), AMBAC, 5.625%, 2020 | 165,000 | 172,707 | ||||
Fulton County, GA, Facilities Corp., Fulton County, GA (Public Purpose Project), AMBAC, 5.9%, 2019 | 1,000,000 | 1,058,630 | ||||
$ | 1,594,199 | |||||
State & Local Agencies - 4.0% | ||||||
Clayton County, GA, Development Authority Rev., “A“, 6.25%, 2009 (c) | $ | 500,000 | $ | 537,565 | ||
De Kalb County, GA, Public Safety & Judicial Facilities Authority Rev., 5%, 2029 | 400,000 | 405,628 | ||||
Fayette County, GA, Public Facilities Authority (Criminal Justice Center Project), 6.25%, 2010 (c) | 755,000 | 824,845 | ||||
Gilmer County, GA, Building Authority Rev., Courthouse Project, “A“, XLCA, 5%, 2029 | 500,000 | 487,315 | ||||
$ | 2,255,353 | |||||
Tax - Other - 1.8% | ||||||
Virgin Islands Public Finance Authority Rev., RADIAN, 5.5%, 2018 | $ | 1,000,000 | $ | 1,014,120 | ||
Tax Assessment - 0.5% | ||||||
Atlanta, GA, Tax Allocation (Eastside Project), “B“, 5.6%, 2030 | $ | 150,000 | $ | 131,543 | ||
Atlanta, GA, Tax Allocation (Princeton Lakes Project), 5.5%, 2031 | 150,000 | 133,760 | ||||
$ | 265,303 |
Issuer | Shares/Par | Value ($) | ||||
Tobacco - 0.6% | ||||||
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 | $ | 350,000 | $ | 333,998 | ||
Transportation - Special Tax - 3.2% | ||||||
Puerto Rico Highway & Transportation Authority Rev., ASSD GTY, 5.25%, 2034 | $ | 535,000 | $ | 552,002 | ||
Puerto Rico Highway & Transportation Authority Rev., FSA, 5.25%, 2036 | 555,000 | 568,181 | ||||
Puerto Rico Highway & Transportation Authority, “Y“, 5.5%, 2016 (c) | 610,000 | 701,866 | ||||
$ | 1,822,049 | |||||
Universities - Colleges - 11.5% | ||||||
Athens-Clarke County, GA, Unified Government Development Authority, Educational Facilities Rev., 0%, 2024 | $ | 250,000 | $ | 190,285 | ||
Athens-Clarke County, GA, Unified Government Development Authority, Educational Facilities Rev., 0%, 2031 | 250,000 | 180,540 | ||||
Atlanta, GA, Development Authority Educational Facilities Rev. (Science Park LLC), 5%, 2032 | 500,000 | 461,935 | ||||
Bleckley-Dodge County, GA, Student Housing Facilities Rev. (Middle Georgia College), 5.25%, 2038 | 500,000 | 453,130 | ||||
Fulton County, GA (Morehouse College), AMBAC, 6.25%, 2010 (c) | 980,000 | 1,089,358 | ||||
Fulton County, GA, Development Authority Rev. (Georgia Tech Foundation Funding), “A“, 5%, 2031 | 265,000 | 265,861 | ||||
Fulton County, GA, Development Authority Rev. (Georgia Tech Foundation), XLCA, 5%, 2032 | 500,000 | 486,970 | ||||
Fulton County, GA, Development Authority Rev. (Georgia Tech Foundation), “A“, 5.75%, 2017 | 1,000,000 | 1,076,410 | ||||
Fulton County, GA, Development Authority Rev. (Molecular Science Building), MBIA, 5%, 2034 | 1,000,000 | 989,890 | ||||
Fulton County, GA, Development Authority Rev. (Spelman College), 5%, 2032 | 1,000,000 | 975,280 | ||||
Savannah, GA, Economic Development Authority Rev. (College of Art & Design, Inc.), ETM, 6.2%, 2009 (c) | 280,000 | 290,310 | ||||
$ | 6,459,969 | |||||
Universities - Dormitories - 0.9% | ||||||
Georgia Private College & University Authority Rev. (Mercer Housing Corp.), “A“, 6%, 2021 | $ | 500,000 | $ | 506,400 | ||
Utilities - Municipal Owned - 5.3% | ||||||
Georgia Municipal Electric Authority Power Rev., “A“, MBIA, 6.5%, 2020 | $ | 1,250,000 | $ | 1,495,363 | ||
Monroe County, GA, Pollution Control Rev. (Oglethorpe Power Corp.), “A“, 6.8%, 2012 | 1,000,000 | 1,107,020 |
30
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Utilities - Municipal Owned - continued | ||||||
Summerville, GA, Public Utility Rev., Refunding & Improvement, 5.75%, 2012 (c) | $ | 350,000 | $ | 388,409 | ||
$ | 2,990,792 | |||||
Water & Sewer Utility Revenue - 26.4% | ||||||
Atlanta, GA, Water & Wastewater Rev., FSA, 5%, 2037 | $ | 870,000 | $ | 858,064 | ||
Atlanta, GA, Water & Wastewater Rev., “A”, MBIA, 5%, 2033 | 500,000 | 495,700 | ||||
Augusta, GA, Water & Sewer Rev., FSA, 5.25%, 2034 | 1,000,000 | 1,020,940 | ||||
Cherokee County, GA, Water & Sewer Authority Rev., FSA, 5%, 2035 | 1,000,000 | 1,001,530 | ||||
Clayton County, GA, Water Authority, Water & Sewer Rev., 6.25%, 2010 (c) | 1,000,000 | 1,089,420 | ||||
Columbia County, GA, Water & Sewer Rev., FGIC, 6.25%, 2010 (c) | 470,000 | 509,527 | ||||
Dahlonega, GA, Water & Wastewater Rev., “A”, ASSD GTY, 5.5%, 2037 | 1,000,000 | 1,008,620 | ||||
Fairburn, GA, Utility Rev., 5.75%, 2010 (c) | 500,000 | 546,055 | ||||
Forsyth County, GA, Water & Sewer Authority, 6.25%, 2010 (c) | 1,105,000 | 1,200,395 |
Issuer | Shares/Par | Value ($) | ||||
Water & Sewer Utility Revenue - continued | ||||||
Fulton County, GA, Water & Sewer Rev., FGIC, 6.375%, 2014 | $ | 100,000 | $ | 110,536 | ||
Fulton County, GA, Water & Sewer Rev., ETM, FGIC, 6.375%, 2014 (c) | 2,150,000 | 2,389,613 | ||||
Gainesville, GA, Water & Sewer Rev., FGIC, 5.625%, 2009 (c) | 1,000,000 | 1,067,380 | ||||
Jackson County, GA, Water & Sewer Authority, “A”, AMBAC, 5.75%, 2010 (c) | 1,000,000 | 1,100,120 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | 400,000 | 399,464 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 1,000,000 | 1,022,930 | ||||
Walton County, GA, Water & Sewer Authority Rev. (Walton-Hard Labor Creek Project), FSA, 5%, 2038 | $ | 1,000,000 | $ | 1,007,660 | ||
$ | 14,827,954 | |||||
Total Investments (Identified Cost, $54,749,235) (k) | $ | 55,790,553 | ||||
Other Assets, Less Liabilities - 0.8% | 466,508 | |||||
Net Assets - 100.0% | $ | 56,257,061 |
Derivative Contracts at 3/31/08
Swap Agreements at 3/31/08
Expiration | Notional Amount | Counterparty | Cash Flows to Receive | Cash Flows to Pay | Value | |||||||
Interest Rate Swaps | ||||||||||||
8/13/23 | USD | 1,000,000 | Goldman Sachs International | 3.795% (fixed rate) | 7-Day BMA | $25,654 |
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
31
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® MARYLAND MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 100.4% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport and Port Revenue - 0.9% | ||||||
Maryland Transportation Authority Rev. (Baltimore/Washington International Airport), “A”, AMBAC, 5%, 2027 | $ | 1,000,000 | $ | 1,003,510 | ||
General Obligations - General Purpose - 6.7% | ||||||
Baltimore, MD, “B”, 7.15%, 2009 | $ | 2,120,000 | $ | 2,276,689 | ||
Baltimore, MD, UT, Public Improvement, “A”, MBIA, 7%, 2009 | 1,000,000 | 1,070,870 | ||||
Commonwealth of Puerto Rico, Public Improvement, “A”, 5.25%, 2026 | 2,330,000 | 2,292,207 | ||||
Frederick County, MD, Public Facilities, 5.25%, 2009 (c) | 2,000,000 | 2,099,460 | ||||
$ | 7,739,226 | |||||
General Obligations - Improvement - 10.6% | ||||||
Howard County, MD, “B”, 0%, 2008 | $ | 1,000,000 | $ | 993,260 | ||
Prince George’s County, MD, Consolidated Public Improvement, “A”, 5%, 2013 (c) | 2,000,000 | 2,207,620 | ||||
Prince George’s County, MD, Unrefunded Balance, Public Improvement, FSA, 5.375%, 2009 (c) | 80,000 | 84,757 | ||||
Puerto Rico Municipal Finance Agency, FSA, 5.5%, 2009 (c)(u) | 2,000,000 | 2,112,600 | ||||
Washington Suburban Sanitation District, General Construction Rev., 5%, 2027 | 930,000 | 948,442 | ||||
Washington Suburban Sanitation District, General Construction Rev., 5%, 2028 | 980,000 | 996,444 | ||||
Washington Suburban Sanitation District, General Construction Rev., 5%, 2029 (f) | 1,025,000 | 1,039,719 | ||||
Worcester County, MD, Public Improvement, 5.625%, 2010 (c) | 1,620,000 | 1,737,515 | ||||
Worcester County, MD, Public Improvement, 5.625%, 2010 (c) | 2,030,000 | 2,177,256 | ||||
$ | 12,297,613 | |||||
Healthcare Revenue - Hospitals - 19.1% | ||||||
Maryland Health & Higher Educational Facilities Authority Rev. (Adventist Healthcare), “A”, 5.75%, 2025 | $ | 1,000,000 | $ | 1,000,870 | ||
Maryland Health & Higher Educational Facilities Authority Rev. (Anne Arundel Health Systems), “A”, FSA, 5%, 2023 | 1,000,000 | 1,024,700 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Calvert Health Systems), 5.5%, 2039 | 1,000,000 | 1,003,050 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Carroll County General Hospital), 6%, 2037 | 1,000,000 | 998,520 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Catholic Health), “A”, 6%, 2020 | 245,000 | 256,762 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Catholic Health), “A”, ETM, 6%, 2020 (c) | 755,000 | 815,717 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Maryland Health & Higher Educational Facilities Authority Rev. (Doctors Community Hospital), “A”, 5%, 2029 | $ | 750,000 | $ | 662,175 | ||
Maryland Health & Higher Educational Facilities Authority Rev. (Frederick Memorial Hospital), 5.125%, 2035 | 1,000,000 | 877,150 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Good Samaritan Hospital), ETM, 5.7%, 2009 (c) | 1,085,000 | 1,111,865 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins Hospital), 5%, 2021 | 750,000 | 759,667 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins Medical Institutions), “A”, 5%, 2037 | 750,000 | 719,978 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Lifebridge Health), “A”, 5.125%, 2034 | 1,000,000 | 1,104,550 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Medstar Health), 5.5%, 2033 | 800,000 | 754,104 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Mercy Medical Center), “A”, 5.5%, 2042 | 750,000 | 683,587 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (North Arundel Hospital), 6.5%, 2010 (c) | 500,000 | 550,525 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Peninsula Regional Medical Center), 5%, 2036 | 1,000,000 | 907,260 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Suburban Hospital), “A”, 5.5%, 2016 | 1,000,000 | 1,065,040 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Union Hospital of Cecil County Issue), 5.625%, 2032 | 1,000,000 | 1,006,830 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Union Hospital of Cecil County Issue), 5%, 2035 | 500,000 | 451,355 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (University of Maryland Medical System), “A”, 5%, 2041 | 500,000 | 455,240 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (University of Maryland Medical Systems), 6.625%, 2010 (c) | 1,000,000 | 1,087,870 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (University of Maryland Medical Systems), “B”, AMBAC, 5%, 2024 | 1,000,000 | 1,014,660 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Washington County Hospital), 5.75%, 2038 | 500,000 | 472,790 | ||||
Maryland Health & Higher Educational Facilities Rev. (Helix Health Issue), ETM, AMBAC, 5%, 2027 (c) | 1,000,000 | 1,060,230 |
32
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Maryland Industrial Development Authority, Economic Development Rev., RIBS, FSA, 6.864%, 2022 (p) | $ | 1,400,000 | $ | 1,798,188 | ||
Montgomery County, MD, Economic Development Rev. (Trinity Healthcare Group), 5.125%, 2022 | 500,000 | 504,195 | ||||
$ | 22,146,878 | |||||
Healthcare Revenue - Long Term Care - 1.4% | ||||||
Gaithersburg, MD, Economic Development Rev. (Asbury Maryland Obligations Group), “A”, 5.125%, 2036 | $ | 400,000 | $ | 343,824 | ||
Howard County, MD, Retirement (Ref-Vantage House Facilities), “B”, 5.25%, 2037 | 300,000 | 234,285 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Edenwald), “A”, 5.4%, 2037 | 350,000 | 309,211 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (King Farm Presbyterian Community), “A”, 5.3%, 2037 | 300,000 | 233,544 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Mercy Ridge), “A”, 6%, 2013 (c) | 150,000 | 170,972 | ||||
Westminster, MD, Economic Development Rev. (Carroll Lutheran Village), “A”, 6.25%, 2034 | 400,000 | 384,584 | ||||
$ | 1,676,420 | |||||
Human Services - 0.7% | ||||||
Maryland Economic Development Corp., Economic Development Rev. (Lutheran World Relief Refugee), 5.25%, 2019 | $ | 270,000 | $ | 270,383 | ||
Maryland Economic Development Corp., Economic Development Rev. (Lutheran World Relief Refugee), 5.25%, 2029 | 565,000 | 528,264 | ||||
$ | 798,647 | |||||
Industrial Revenue - Chemicals - 1.4% | ||||||
Baltimore, MD, Port Facilities Rev., Consolidated Coal Sales, “B”, 6.5%, 2011 | $ | 1,500,000 | $ | 1,566,195 | ||
Industrial Revenue - Environmental Services - 0.6% | ||||||
Northeast Maryland Waste Disposal Authority Resources Recovery Rev. (Baltimore Resco Retrofit Project), 5%, 2012 | $ | 690,000 | $ | 686,233 | ||
Industrial Revenue - Other - 0.3% | ||||||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | $ | 375,000 | $ | 367,005 | ||
Miscellaneous Revenue - Entertainment & Tourism - 0.9% | ||||||
Maryland Industrial Development Authority Economic Development Rev. (Baltimore Aquarium Project), 5.2%, 2026 | $ | 1,000,000 | $ | 1,019,100 | ||
Miscellaneous Revenue - Other - 1.5% | ||||||
Harford County, MD, Economic Development Rev. (Battelle Memorial Institute Project), 5.25%, 2034 | $ | 1,600,000 | $ | 1,611,440 |
Issuer | Shares/Par | Value ($) | ||||
Miscellaneous Revenue - Other - continued | ||||||
Maryland Economic Development Corp. Rev. (Chesapeake Bay Conference Center), “A”, 5%, 2031 | $ | 195,000 | $ | 152,260 | ||
$ | 1,763,700 | |||||
Multi-Family Housing Revenue - 4.9% | ||||||
Baltimore, MD, City Housing Corp. Rev., FHA, 7.75%, 2009 | $ | 225,000 | $ | 225,056 | ||
Maryland Community Development Administration (Waters Landing II Apartments), “A”, GNMA, 5.875%, 2033 | 1,500,000 | 1,519,500 | ||||
Maryland Community Development Administration, “A”, 5%, 2034 | 910,000 | 814,059 | ||||
Maryland Community Development Administration, “A”, 5.1%, 2044 | 970,000 | 863,028 | ||||
Maryland Community Development Administration, “A”, 5.05%, 2047 | 1,000,000 | 872,890 | ||||
Maryland Community Development Administration, “B”, 5%, 2039 | 500,000 | 442,760 | ||||
Maryland Community Development Administration, “D”, 5%, 2032 | 1,000,000 | 902,530 | ||||
$ | 5,639,823 | |||||
Parking - 1.3% | ||||||
Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins Medical Institutions), AMBAC, 5%, 2034 | $ | 1,500,000 | $ | 1,491,195 | ||
Sales & Excise Tax Revenue - 0.3% | ||||||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | $ | 335,000 | $ | 314,880 | ||
Single Family Housing - Local - 0.0% | ||||||
Prince George’s County, MD, Housing Single Family Collateral, “A”, 7.4%, 2032 | $ | 5,000 | $ | 5,026 | ||
Prince George’s County, MD, Housing Single Family Collateral, “A”, GNMA, 5.6%, 2034 | 30,000 | 30,026 | ||||
$ | 35,052 | |||||
Single Family Housing - State - 3.1% | ||||||
Maryland Community Development Administration Housing, “A”, 5.875%, 2016 | $ | 860,000 | $ | 862,159 | ||
Maryland Community Development Administration Residential, “B”, 4.75%, 2019 | 305,000 | 293,145 | ||||
Maryland Community Development Administration, “I”, 6%, 2041 | 920,000 | 944,095 | ||||
Montgomery County, MD, Housing Opportunities Commission (Single Family Mortgage Rev.), “B”, 4.55%, 2026 | 1,505,000 | 1,315,987 | ||||
Puerto Rico Housing Finance Authority, Home Mortgage Rev., Mortgage Backed Securities, “A”, 4.75%, 2023 | 175,000 | 162,050 | ||||
$ | 3,577,436 |
33
Table of Contents
Portfolio of Investments - continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
State & Agency - Other - 2.7% | ||||||
Howard County, MD, COP, 8%, 2019 | $ | 805,000 | $ | 1,091,435 | ||
Howard County, MD, COP, 8%, 2019 | 385,000 | 521,991 | ||||
Howard County, MD, COP, 8%, 2019 | 680,000 | 921,958 | ||||
Howard County, MD, COP, “B”, 8.15%, 2021 | 450,000 | 619,263 | ||||
$ | 3,154,647 | |||||
State & Local Agencies - 6.2% | ||||||
Prince George’s County, MD, Lease Development Authority Rev., MBIA, 0%, 2009 | $ | 1,500,000 | $ | 1,455,855 | ||
Puerto Rico Public Finance Corp., “A”, AMBAC, 5.375%, 2013 (u) | 1,000,000 | 1,093,220 | ||||
Puerto Rico Public Finance Corp., Commonwealth Appropriations, “E”, 5.7%, 2010 (c) | 1,235,000 | 1,305,358 | ||||
Puerto Rico Public Finance Corp., ETM, AMBAC, 5.375%, 2016 (u) | 3,040,000 | 3,352,907 | ||||
$ | 7,207,340 | |||||
Tax - Other - 1.7% | ||||||
Virgin Islands Public Finance Authority Rev., “A”, 5.5%, 2022 | $ | 1,000,000 | $ | 1,005,310 | ||
Virgin Islands Public Finance Authority Rev., “E”, 5.875%, 2018 | 1,000,000 | 1,016,230 | ||||
$ | 2,021,540 | |||||
Tax Assessment - 1.9% | ||||||
Anne Arundel County, MD, Special Obligations (Arundel Mills Project), 5.125%, 2029 | $ | 1,555,000 | $ | 1,591,138 | ||
Brunswick, MD, Special Obligation (Brunswick Crossing Special Taxing), 5.5%, 2036 | 250,000 | 204,857 | ||||
Prince George’s County, MD, Special Obligation (National Harbor Project), 5.2%, 2034 | 500,000 | 421,360 | ||||
$ | 2,217,355 | |||||
Tobacco - 0.7% | ||||||
Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 | $ | 220,000 | $ | 209,942 | ||
Guam Economic Development Authority Tobacco Settlement, “B”, 5.5%, 2041 | 400,000 | 432,004 | ||||
Virgin Islands Tobacco Settlement Financing Corp., 5%, 2021 | 215,000 | 212,276 | ||||
$ | 854,222 | |||||
Transportation - Special Tax - 1.5% | ||||||
Maryland Department of Transportation, Port Administration Facilities Project, AMBAC, 5.25%, 2020 | $ | 1,690,000 | $ | 1,774,821 | ||
Universities - Colleges - 15.8% | ||||||
Annapolis, MD, Economic Development Rev. (St. John’s College), 5.5%, 2008 (c) | $ | 570,000 | $ | 580,334 | ||
Annapolis, MD, Economic Development Rev. (St. John’s College), 5.5%, 2018 | 180,000 | 181,132 | ||||
Anne Arundel County, MD, Economic Development (Community College Project), 5.25%, 2028 | 1,600,000 | 1,617,264 | ||||
Frederick County, MD, Educational Facilities Rev. (Mount St. Mary’s College), 5%, 2030 | 1,000,000 | 888,850 |
Issuer | Shares/Par | Value ($) | ||||
Universities - Colleges - continued | ||||||
Frederick County, MD, Educational Facilities Rev. (Mount St. Mary’s College), “A”, 5.7%, 2010 (c) | $ | 850,000 | $ | 911,183 | ||
Maryland Health & Higher Education (College of Art), 5%, 2030 | 750,000 | 705,728 | ||||
Maryland Health & Higher Education (Loyola College), “A”, 5%, 2040 | 1,000,000 | 943,410 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Goucher College), 5.375%, 2025 | 500,000 | 506,435 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins University), 5.625%, 2027 | 1,400,000 | 1,423,534 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Johns Hopkins University), “A”, 5%, 2032 | 2,000,000 | 2,008,960 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Loyola College), “A”, 5.125%, 2045 | 1,600,000 | 1,522,176 | ||||
Montgomery County, MD, Rev. Authority (College Arts Center Project), “A”, 5%, 2027 | 1,950,000 | 1,975,428 | ||||
Morgan State University, MD, Academic, MBIA, 6.05%, 2015 | 1,500,000 | 1,678,875 | ||||
Morgan State University, MD, Academic, “A”, ETM, MBIA, 0%, 2008 (c) | 1,400,000 | 1,393,014 | ||||
Westminster, MD, Educational Facilities Rev. (McDaniel College, Inc.), 5.5%, 2012 (c) | 1,000,000 | 1,107,040 | ||||
Westminster, MD, Educational Facilities Rev. (McDaniel College, Inc.), 5%, 2031 | 1,000,000 | 915,200 | ||||
$ | 18,358,563 | |||||
Universities - Dormitories - 2.5% | ||||||
Maryland Economic Development Corp. (Morgan State University Project), “A”, 6%, 2034 | $ | 1,000,000 | $ | 927,850 | ||
Maryland Economic Development Corp., Collegiate Housing (Salisbury), “A”, 6%, 2019 | 1,000,000 | 1,015,400 | ||||
Maryland Economic Development Corp., Collegiate Housing Rev. (Towson University), “A”, 5.75%, 2029 | 1,000,000 | 971,330 | ||||
$ | 2,914,580 | |||||
Universities - Secondary Schools - 0.7% | ||||||
Maryland Health & Higher Educational Facilities Authority Rev. (Washington Christian Academy), 5.5%, 2038 | $ | 500,000 | $ | 410,450 | ||
Maryland Industrial Development Financing Authority, Economic Development Authority Rev. (Our Lady of Good Council), “A”, 6%, 2035 | 400,000 | 377,656 | ||||
$ | 788,106 | |||||
Utilities - Municipal Owned - 5.6% | ||||||
Guam Power Authority Rev., AMBAC, 5.25%, 2015 | $ | 3,360,000 | $ | 3,432,341 | ||
Puerto Rico Electric Power Authority Rev., “NN”, 5.125%, 2013 (c) | 1,500,000 | 1,658,145 | ||||
Puerto Rico Electric Power Authority Rev., RITES, FSA, 7.59%, 2008 (c)(n)(v) | 1,400,000 | 1,464,036 | ||||
$ | 6,554,522 |
34
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Water & Sewer Utility Revenue - 7.4% | ||||||
Baltimore, MD, Project Rev., Refunding Water Projects, “A”, FGIC, 5.125%, 2032 | $ | 1,000,000 | $ | 982,890 | ||
Baltimore, MD, Rev., LEVRRS, MBIA, 6.593%, 2020 (p) | 3,000,000 | 3,825,420 | ||||
Baltimore, MD, Wastewater Rev. Project, “A”, MBIA, 5.65%, 2020 | 2,000,000 | 2,275,140 | ||||
Puerto Rico Aqueduct & Sewer Authority Rev., ETM, 10.25%, 2009 (c) | 115,000 | 119,540 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | 400,000 | 399,464 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 1,000,000 | 1,022,930 | ||||
$ | 8,625,384 | |||||
Total Municipal Bonds (Identified Cost, $114,586,703) | $ | 116,593,993 |
Floating Rate Demand Notes - 0.2% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Sublette County, WY, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08, at Identified Cost | $ | 200,000 | $ | 200,000 | ||
Total Investments (Identified Cost, $114,786,703) (k) | $ | 116,793,993 | ||||
Other Assets, Less Liabilities - (0.6)% | (747,055) | |||||
Net Assets - 100.0% | $ | 116,046,938 |
Derivative Contracts at 3/31/08
Futures Contracts Outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ | ||||
U.S. Treasury Bond 30 yr (Short) | 7 | $831,578 | Jun-08 | $11,278 |
Swap Agreements at 3/31/08
Expiration | Notional Amount | Counterparty | Cash Flows to Receive | Cash Flows to Pay | Value | ||||||||
Interest Rate Swaps | |||||||||||||
7/09/23 | USD | 1,000,000 | Merrill Lynch Capital Services | 7-Day BMA | 3.581% (fixed rate) | $(3,936 | ) | ||||||
8/06/28 | USD | 3,000,000 | Merrill Lynch Capital Services | 7-Day BMA | 3.673% (fixed rate) | 7,450 | |||||||
$3,514 |
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
35
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® MASSACHUSETTS MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 98.5% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport & Port Revenue - 3.0% | ||||||
Massachusetts Port Authority Rev., “A”, MBIA, 5%, 2033 | $ | 3,000,000 | $ | 2,995,501 | ||
Massachusetts Port Authority Rev., “C”, 6%, 2010 (c) | 1,000,000 | 1,072,660 | ||||
Massachusetts Port Authority Rev., “C”, 6.125%, 2010 (c) | 1,460,000 | 1,569,179 | ||||
Massachusetts Port Authority Rev., ETM, 13%, 2013 (c) | 550,000 | 703,065 | ||||
$ | 6,340,405 | |||||
General Obligations - General Purpose - 14.0% | ||||||
Boston, MA, “A”, 5.75%, 2010 (c) | $ | 3,645,000 | $ | 3,872,740 | ||
Brookline, MA, 5.375%, 2019 | 1,800,000 | 1,869,606 | ||||
Commonwealth of Massachusetts, “B”, 5.25%, 2028 | 2,500,000 | 2,601,800 | ||||
Commonwealth of Massachusetts, “B”, ETM, FGIC, 7%, 2009 (c) | 765,000 | 789,465 | ||||
Greater Lawrence, MA, Sanitation District, MBIA, 5.625%, 2010 (c) | 1,640,000 | 1,774,070 | ||||
Lynn, MA, AMBAC, 5.125%, 2018 | 3,690,000 | 3,778,892 | ||||
Massachusetts Consolidated Loan, “A”, 6%, 2010 (c) | 3,000,000 | 3,218,370 | ||||
Massachusetts Consolidated Loan, “B”, 5.75%, 2010 (c) | 1,000,000 | 1,072,510 | ||||
Massachusetts Consolidated Loan, “C”, 5.75%, 2010 (c) | 1,500,000 | 1,618,320 | ||||
Middleborough, MA, FGIC, 5.6%, 2010 (c) | 75,000 | 80,099 | ||||
Puerto Rico Commonwealth, “A”, 5.25%, 2016 (c) | 620,000 | 702,305 | ||||
Puerto Rico Commonwealth, “A”, 5.25%, 2030 | 380,000 | 367,388 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 605,000 | 663,860 | ||||
Salisbury, MA, MBIA, 5.25%, 2012 (c) | 2,790,000 | 3,069,977 | ||||
Sutton, MA, MBIA, 5.5%, 2017 | 1,000,000 | 1,047,930 | ||||
Sutton, MA, MBIA, 5.5%, 2019 | 1,000,000 | 1,042,020 | ||||
Westford, MA, FGIC, 5.25%, 2010 (c) | 2,250,000 | 2,402,910 | ||||
$ | 29,972,262 | |||||
General Obligations - Improvement - 7.3% | ||||||
Guam Government, “A”, 5.25%, 2037 | $ | 395,000 | $ | 335,600 | ||
Massachusetts Bay Transportation Authority, Transit Improvements, 6.2%, 2016 (u) | 9,670,000 | 11,078,726 | ||||
Maynard, MA, MBIA, 5.5%, 2021 | 1,000,000 | 1,123,080 | ||||
Worcester, MA, “A”, FSA, 6%, 2010 (c) | 2,955,000 | 3,198,817 | ||||
$ | 15,736,223 | |||||
General Obligations - Schools - 1.9% | ||||||
Narragansett, MA, Regional School District, AMBAC, 6%, 2019 | $ | 1,720,000 | $ | 1,816,853 | ||
Tantasquama, MA, Regional School District, FSA, 5.375%, 2010 (c) | 2,000,000 | 2,162,660 | ||||
$ | 3,979,513 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - 12.0% | ||||||
Massachusetts Development Finance Agency Rev. (Massachusetts Biomedical Research), “C”, 6.375%, 2016 | $ | 50,000 | $ | 53,239 | ||
Massachusetts Health & Educational Facilities Authority Rev., 6.5%, 2012 (c) | 15,000 | 17,071 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Bay State Medical Center), “F”, 5.75%, 2033 | 2,000,000 | 2,012,500 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Berkshire Health Systems), “E”, 6.25%, 2031 | 1,350,000 | 1,340,145 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Caritas Christi), “B”, 6.5%, 2012 | 500,000 | 524,090 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Caritas Christi), “B”, 6.25%, 2022 | 20,000 | 20,427 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Catholic Health East Issue), 5.5%, 2012 (c) | 1,575,000 | 1,751,416 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Healthcare Systems), 6%, 2012 (c) | 210,000 | 235,295 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Healthcare Systems), 6.5%, 2017 | 60,000 | 64,488 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Healthcare Systems), 6%, 2031 | 790,000 | 816,339 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Jordan Hospital), “D”, 5.25%, 2018 | 1,330,000 | 1,319,413 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Lahey Clinic), “D”, 5.25%, 2037 | 1,310,000 | 1,283,027 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Milford-Whitinsville Hospital), “C”, 5.25%, 2018 | 1,500,000 | 1,481,130 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Milford-Whitinsville Hospital), “D”, 6.35%, 2012 (c) | 300,000 | 342,870 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Milton Hospital), “C”, 5.5%, 2016 | 800,000 | 801,808 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (New England Medical Center Hospital), “H”, FGIC, 5.375%, 2012 (c) | 1,000,000 | 1,093,730 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (New England Medical Center Hospital), “H”, FGIC, 5.375%, 2012 (c) | 815,000 | 891,390 |
36
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Massachusetts Health & Educational Facilities Authority Rev. (New England), “H”, FGIC, 5%, 2012 (c) | $ | 45,000 | $ | 48,568 | ||
Massachusetts Health & Educational Facilities Authority Rev. (New England), “H”, FGIC, 5%, 2025 | 1,090,000 | 1,002,745 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (North Adams Regional Hospital), “C”, 6.625%, 2018 | 475,000 | 475,760 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Partners Healthcare Systems), “C”, 5.75%, 2021 | 100,000 | 104,870 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Partners Healthcare Systems), “G”, 5%, 2032 | 2,000,000 | 1,961,280 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (South Shore Hospital), “F”, 5.625%, 2019 | 2,000,000 | 2,067,540 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (University of Massachusetts Memorial Hospital), “C”, 6.5%, 2021 | 1,000,000 | 1,026,250 | ||||
Massachusetts Industrial Finance Agency Rev., Capital Appreciation (Massachusetts Biomedical Research), “A”, 0%, 2010 | 5,300,000 | 4,940,554 | ||||
$ | 25,675,945 | |||||
Healthcare Revenue - Long Term Care - 0.7% | ||||||
Massachusetts Development Finance Agency Rev. (Adventcare), “A”, 6.75%, 2037 | $ | 500,000 | $ | 447,030 | ||
Massachusetts Development Finance Agency Rev. (Linden Ponds, Inc.), “A”, 5.75%, 2035 | 500,000 | 433,265 | ||||
Massachusetts Development Finance Agency Rev. (Loomis Communities, Inc.), “A”, 6.9%, 2032 | 530,000 | 535,830 | ||||
$ | 1,416,125 | |||||
Human Services - 0.5% | ||||||
Massachusetts Health & Educational Facilities Authority Rev. (Learning Center for Deaf Children), “C”, 6.1%, 2019 | $ | 1,000,000 | $ | 1,001,050 | ||
Industrial Revenue - Airlines - 1.4% | ||||||
Massachusetts Port Authority Rev. (U.S. Airways), MBIA, 5.875%, 2016 | $ | 1,900,000 | $ | 1,961,788 | ||
Massachusetts Port Authority Rev., Special Facilities (U.S. Airways), “A”, MBIA, 5.625%, 2011 | 1,140,000 | 1,152,335 | ||||
$ | 3,114,123 | |||||
Industrial Revenue - Environmental Services - 0.8% | ||||||
Massachusetts Development Finance Agency Rev. (Waste Management, Inc.), 5.5%, 2027 (a) | $ | 750,000 | $ | 742,350 |
Issuer | Shares/Par | Value ($) | ||||
Industrial Revenue - Environmental Services - continued | ||||||
Massachusetts Development Finance Agency Rev. (Waste Management, Inc.), “B”, 6.9%, 2029 (a) | $ | 1,000,000 | $ | 1,034,680 | ||
$ | 1,777,030 | |||||
Industrial Revenue - Other - 2.1% | ||||||
Massachusetts Development Finance Agency Rev., Resource Recovery (Fluor Corp.), 5.625%, 2019 | $ | 1,675,000 | $ | 1,718,918 | ||
Massachusetts Industrial Finance Agency Rev. (Welch Foods, Inc.), 5.6%, 2017 | 2,100,000 | 2,141,160 | ||||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 595,000 | 582,315 | ||||
$ | 4,442,393 | |||||
Miscellaneous Revenue - Other - 2.8% | ||||||
Martha's Vineyard, MA, Land Bank Rev., AMBAC, 5%, 2029 | $ | 785,000 | $ | 786,193 | ||
Massachusetts Development Finance Agency Rev. (WGBH Educational Foundation), “A”, AMBAC, 5.375%, 2012 (c) | 3,000,000 | 3,300,810 | ||||
Massachusetts Port Authority Facilities Rev. (Boston Fuel Project), ASSD GTY, 5%, 2024 | 2,000,000 | 1,967,100 | ||||
$ | 6,054,103 | |||||
Multi-Family Housing Revenue - 5.9% | ||||||
Massachusetts Development Finance Agency Rev. (Credit Housing-Chelsea Homes), “I-A”, LOC, 5%, 2024 | $ | 1,185,000 | $ | 1,120,749 | ||
Massachusetts Development Finance Agency Rev. (Morville House Apartments), “A”, LOC, 4.95%, 2023 | 2,500,000 | 2,354,800 | ||||
Massachusetts Housing Finance Agency Rev., “A”, 5%, 2028 | 1,000,000 | 909,350 | ||||
Massachusetts Housing Finance Agency Rev., “A”, 5.2%, 2037 | 1,500,000 | 1,367,355 | ||||
Massachusetts Housing Finance Agency Rev., “E”, 5%, 2028 | 1,000,000 | 918,240 | ||||
Massachusetts Housing Finance Agency Rev., “F”, 5.125%, 2034 | 720,000 | 655,034 | ||||
Massachusetts Housing Finance Agency Rev., “P”, 5%, 2023 | 1,240,000 | 1,170,461 | ||||
Massachusetts Housing Finance Agency Rev., “P”, 5.1%, 2033 | 1,565,000 | 1,424,009 | ||||
Massachusetts Housing Finance Agency Rev., “P”, 5.2%, 2045 | 1,445,000 | 1,296,945 | ||||
Massachusetts Housing Finance Agency Rev., Rental Mortgage, “A”, AMBAC, 5.7%, 2020 | 1,475,000 | 1,496,624 | ||||
$ | 12,713,567 | |||||
Parking - 0.6% | ||||||
Rail Connections, Inc., Massachusetts Rev. (Route 128 Parking Garage), “A”, 6%, 2009 (c) | $ | 450,000 | $ | 480,892 |
37
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Parking - continued | ||||||
Rail Connections, Inc., Massachusetts Rev. (Route 128 Parking Garage), “A“, 6%, 2009 (c) | $ | 500,000 | $ | 534,325 | ||
Rail Connections, Inc., Massachusetts Rev. (Route 128 Parking Garage), “A“, 6%, 2009 (c) | 250,000 | 267,162 | ||||
$ | 1,282,379 | |||||
Sales & Excise Tax Revenue - 2.2% | ||||||
Massachusetts Bay Transportation Authority, Sales Tax Rev., 0%, 2034 | $ | 6,000,000 | $ | 1,257,360 | ||
Massachusetts School Building Authority, Dedicated Sales Tax Rev., AMBAC, 4.75%, 2032 | 2,000,000 | 1,916,320 | ||||
Route 3 North Transit Improvement Associates Rev., MBIA, 5.625%, 2010 (c) | 1,500,000 | 1,606,680 | ||||
$ | 4,780,360 | |||||
Single Family Housing - State - 2.2% | ||||||
Massachusetts Housing Finance Agency, Single Family Housing Rev., “102“, 5%, 2029 | $ | 1,500,000 | $ | 1,357,050 | ||
Massachusetts Housing Finance Agency, Single Family Housing Rev., “122“, 4.85%, 2031 | 2,000,000 | 1,771,700 | ||||
Massachusetts Housing Finance Agency, Single Family Housing Rev., “128“, FSA, 4.875%, 2038 | 2,000,000 | 1,675,060 | ||||
$ | 4,803,810 | |||||
Solid Waste Revenue - 1.1% | ||||||
Massachusetts Development Finance Agency, Resource Recovery Rev. (Ogden Haverhill Associates), “A“, 6.7%, 2014 | $ | 505,000 | $ | 528,937 | ||
Massachusetts Industrial Finance Agency, Resource Recovery Rev. (Ogden Haverhill Associates), “A“, 5.6%, 2019 | 1,925,000 | 1,897,338 | ||||
$ | 2,426,275 | |||||
State & Agency - Other - 0.7% | ||||||
Massachusetts Development Finance Agency Rev. (Visual & Performing Arts Project), 6%, 2015 | $ | 1,235,000 | $ | 1,424,350 | ||
State & Local Appropriation - 2.6% | ||||||
Puerto Rico Public Finance Corp., ETM, AMBAC, 5.375%, 2016 (u) | $ | 5,000,000 | $ | 5,514,650 | ||
Student Loan Revenue - 0.8% | ||||||
Massachusetts Educational Financing Authority, Education Loan Rev., “E“, AMBAC, 5%, 2015 | $ | 90,000 | $ | 90,787 | ||
Massachusetts Educational Financing Authority, Education Loan Rev., “Issue E“, AMBAC, 5.3%, 2016 | 1,490,000 | 1,504,930 | ||||
Massachusetts Educational Financing Authority, Education Loan Rev., “Issue G“, “A“, MBIA, 6.05%, 2017 | 40,000 | 40,545 | ||||
$ | 1,636,262 |
Issuer | Shares/Par | Value ($) | ||||
Tax - Other - 2.2% | ||||||
Massachusetts Bay Transportation Authority, Unrefunded Balance, “A“, 5.75%, 2018 | $ | 320,000 | $ | 336,029 | ||
Virgin Islands Public Finance Authority Rev., “A“, 5.5%, 2022 | 2,950,000 | 2,965,665 | ||||
Virgin Islands Public Finance Authority Rev., “E“, 5.875%, 2018 | 1,420,000 | 1,443,047 | ||||
$ | 4,744,741 | |||||
Tax Assessment - 0.3% | ||||||
Massachusetts Bay Transportation Authority Rev., 5.25%, 2010 (c) | $ | 370,000 | $ | 393,813 | ||
Massachusetts Bay Transportation Authority Rev., 5.25%, 2030 | 245,000 | 248,602 | ||||
$ | 642,415 | |||||
Tobacco - 0.5% | ||||||
Children‘s Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 | $ | 645,000 | $ | 615,511 | ||
Children‘s Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.5%, 2039 | 400,000 | 382,828 | ||||
Children‘s Trust Fund, Tobacco Settlement Rev., Puerto Rico, “A“, 0%, 2050 | 2,000,000 | 99,640 | ||||
$ | 1,097,979 | |||||
Universities - Colleges - 19.9% | ||||||
Massachusetts College Building Authority Project Rev., “A“, XLCA, 5.25%, 2023 | $ | 1,000,000 | $ | 1,020,480 | ||
Massachusetts College Building Authority Project Rev., “A“, XLCA, 5%, 2043 | 2,110,000 | 2,009,543 | ||||
Massachusetts Develeopment Finance Agency Rev. (Wheelock College), “C“, 5.25%, 2037 | 1,500,000 | 1,402,110 | ||||
Massachusetts Development Finance Agency Rev. (Boston College), “P“, 5%, 2042 | 2,500,000 | 2,463,500 | ||||
Massachusetts Development Finance Agency Rev. (Curry College), “A“, ACA, 5%, 2036 | 2,000,000 | 1,676,280 | ||||
Massachusetts Development Finance Agency Rev. (Hampshire College), 5.7%, 2034 | 1,000,000 | 990,550 | ||||
Massachusetts Development Finance Agency Rev. (Massachusetts College of Pharmacy), “B“, 6.625%, 2010 (c) | 50,000 | 54,209 | ||||
Massachusetts Development Finance Agency Rev. (Massachusetts College of Pharmacy), “C“, 5.75%, 2013 (c) | 1,000,000 | 1,133,740 | ||||
Massachusetts Development Finance Agency Rev. (Mount Holyoke College), 5.125%, 2021 | 1,000,000 | 1,029,860 | ||||
Massachusetts Development Finance Agency Rev. (Olin College), “B“, XLCA, 5.25%, 2033 | 3,000,000 | 2,909,970 | ||||
Massachusetts Development Finance Agency Rev. (Smith College), 5%, 2035 | 1,000,000 | 992,570 | ||||
Massachusetts Development Finance Agency Rev. (Western New England College), 6.125%, 2012 (c) | 1,115,000 | 1,278,314 |
38
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Universities - Colleges - continued | ||||||
Massachusetts Development Finance Agency Rev. Higher Education (Smith College), 5.5%, 2010 (c) | $ | 1,210,000 | $ | 1,307,344 | ||
Massachusetts Health & Educational Facilities Authority Rev., 5%, 2035 | 3,000,000 | 3,027,120 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Simmons College), “D“, AMBAC, 6.05%, 2010 (c) | 1,745,000 | 1,920,582 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Umass Worcester) ,“B“, FGIC, 5.125%, 2019 | 1,005,000 | 1,028,688 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Umass Worcester), “B“, FGIC, 5.125%, 2011 (c) | 775,000 | 837,271 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (University of Massachusetts), “A“, FGIC, 5.625%, 2010 (c) | 2,170,000 | 2,363,325 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (University of Massachusetts), “A“, FGIC, 5.75%, 2010 (c) | 2,395,000 | 2,615,603 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (University of Massachusetts), “A“, FGIC, 5.85%, 2010 (c) | 1,200,000 | 1,313,424 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (University of Massachusetts), “C“, MBIA, 5.25%, 2012 (c) | 3,000,000 | 3,303,060 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Wellesley College), 5%, 2033 | 1,000,000 | 1,003,120 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Wheelock College), “B“, MBIA, 5.5%, 2011 (c) | 3,275,000 | 3,596,048 | ||||
Massachusetts Health & Higher Educational Facilities Authority Rev. (Williams College), “H“, 5%, 2028 | 1,000,000 | 1,012,340 | ||||
Massachusetts Industrial Finance Agency Rev. (Brandeis University), “C“, MBIA, 0%, 2009 | 1,000,000 | 960,710 | ||||
Massachusetts Industrial Finance Agency Rev. (Brandeis University), “C“, MBIA, 0%, 2010 | 1,000,000 | 930,240 | ||||
Massachusetts Industrial Finance Agency Rev. (Brandeis University), “C“, MBIA, 0%, 2011 | 500,000 | 447,500 | ||||
$ | 42,627,501 | |||||
Universities - Secondary Schools - 4.9% | ||||||
Massachusetts Development Finance Agency Rev. (Belmont Hill School), 4.375%, 2031 | $ | 2,260,000 | $ | 1,958,516 | ||
Massachusetts Development Finance Agency Rev. (Belmont Hill School), 4.5%, 2036 | 1,000,000 | 870,590 |
Issuer | Shares/Par | Value ($) | ||||
Universities - Secondary Schools - continued | ||||||
Massachusetts Development Finance Agency Rev. (Deerfield Academy), “A“, 5%, 2028 | $ | 1,000,000 | $ | 1,011,880 | ||
Massachusetts Development Finance Agency Rev. (Dexter School), 4.75%, 2032 | 1,130,000 | 1,047,420 | ||||
Massachusetts Development Finance Agency Rev. (Dexter School), 5%, 2037 | 1,000,000 | 952,870 | ||||
Massachusetts Development Finance Agency Rev. (Middlesex School), 5.125%, 2023 | 500,000 | 517,995 | ||||
Massachusetts Development Finance Agency Rev. (Xaverian Brothers High School), 5.55%, 2019 | 1,000,000 | 1,014,710 | ||||
Massachusetts Development Finance Agency Rev. (Xaverian Brothers High School), 5.65%, 2029 | 1,000,000 | 1,001,070 | ||||
Massachusetts Industrial Finance Agency Rev. (Concord Academy), 5.5%, 2027 | 2,000,000 | 2,041,900 | ||||
$ | 10,416,951 | |||||
Utilities - Municipal Owned - 1.0% | ||||||
Massachusetts Development Finance Agency Rev. (Devens Electric Systems), 5.625%, 2016 | $ | 725,000 | $ | 754,000 | ||
Puerto Rico Electric Power Authority, Power Rev., “V“, FSA, 5.25%, 2027 | 1,365,000 | 1,427,462 | ||||
$ | 2,181,462 | |||||
Water & Sewer Utility Revenue - 7.1% | ||||||
Massachusetts Water Pollution Abatement Trust Rev., Unrefunded Balance, “5“, 5.75%, 2017 | $ | 25,000 | $ | 26,031 | ||
Massachusetts Water Pollution Abatement Trust, “10“, 5%, 2014 (c) | 855,000 | 947,135 | ||||
Massachusetts Water Pollution Abatement Trust, “10“, 5%, 2029 | 160,000 | 161,718 | ||||
Massachusetts Water Pollution Abatement Trust, “10“, 5%, 2034 | 145,000 | 145,850 | ||||
Massachusetts Water Pollution Abatement Trust, “A“, 5%, 2012 (c) | 1,435,000 | 1,563,389 | ||||
Massachusetts Water Pollution Abatement Trust, “A“, 5%, 2032 | 75,000 | 75,371 | ||||
Massachusetts Water Resources Authority, 6.5%, 2019 (u) | 8,020,000 | 9,526,798 | ||||
Massachusetts Water Resources Authority, General, Rev., “A“, FGIC, 6%, 2010 (c) | 1,000,000 | 1,089,500 | ||||
Massachusetts Water Resources Authority, General, Rev., “J“, FSA, 5%, 2023 (f) | 500,000 | 511,280 | ||||
Springfield, MA, Water & Sewer Commission, General, Rev., “A“, AMBAC, 5%, 2011 (c) | 1,000,000 | 1,092,380 | ||||
$ | 15,139,452 | |||||
Total Municipal Bonds (Identified Cost, $202,535,986) | $ | 210,941,326 |
39
Table of Contents
Portfolio of Investments – continued
Floating Rate Demand Notes - 0.2% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Mt. Vernon Industrial Pollution Control Rev. (General Electric Co.), 1.17%, due 4/01/08 | $ | 400,000 | $ | 400,000 | ||
Sublette County, WY, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | 100,000 | 100,000 | ||||
Total Floating Rate Demand Notes, at Identified Cost and Value | $ | 500,000 | ||||
Total Investments (Identified Cost, $203,035,986) (k) | $ | 211,441,326 | ||||
Other Assets, Less Liabilities - 1.3% | 2,715,877 | |||||
Net Assets - 100.0% | $ | 214,157,203 |
Derivative Contracts at 3/31/08
Futures contracts outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ (Depreciation) | ||||
U.S. Treasury Note 30 yr (Short) | 13 | $1,544,359 | Jun-08 | $20,945 |
Swap Agreements at 3/31/08
Expiration | Notional | Counterparty | Cash Flows to Receive | Cash Flows to Pay | Value | |||||||
Interest Rate Swaps | ||||||||||||
8/13/23 | USD | 2,000,000 | Goldman Sachs International | 3.795% (fixed rate) | 7-Day BMA | $51,308 |
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
40
Table of Contents
Portfolio of Investments – continued
Portfolio Footnotes:
(a) | Mandatory tender date is earlier than stated maturity date. |
(c) | Refunded Bond |
(d) | Non-income producing security - in default. |
(f) | All or a portion of the security has been segregated as collateral for an open futures contract. |
(k) | As of March 31, 2008, the following funds held securities fair valued in accordance with the policies adopted by the Board of Trustees. All of these security values were provided by an independent pricing service using an evaluated bid. |
Fund | Market Value | % of Market Value | |||
Alabama Fund | $ | 78,519,334 | 99.75% | ||
Arkansas Fund | 137,895,788 | 97.94% | |||
California Fund | 409,584,554 | 99.59% | |||
Florida Fund | 57,634,030 | 100.00% | |||
Georgia Fund | 55,790,553 | 100.00% | |||
Maryland Fund | 116,593,993 | 99.83% | |||
Massachusetts Fund | 210,941,326 | 99.76% |
(n) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities was $169,352 and $1,464,036, representing 0.3% and 1.3% of net assets for the Florida Fund and Maryland Fund, respectively. |
(p) | Primary inverse floater. |
(u) | Underlying security deposited into special purpose trust (“the trust”) by investment banker upon creation of self-deposited inverse floaters. |
(v) | Externally deposited inverse floater. |
The following abbreviations are used in this report and are defined:
BMA | Bond Market Assn. | |||||
COP | Certificate of Participation | |||||
ETM | Escrowed to Maturity | |||||
LOC | Letter of Credit | |||||
Insurers | Inverse Floaters | |||||
ACA | ACA Financial Guaranty Corp. | LEVRRS | Leveraged Reverse Rate Security | |||
AMBAC | AMBAC Indemnity Corp. | RIBS | Residual Interest Bonds | |||
ASSD GTY | Assured Guaranty Insurance Co. | RITES | Residual Interest Tax-Exempt Security | |||
CHFC | California Health Facilities Construction Program | |||||
FGIC | Financial Guaranty Insurance Co. | |||||
FHA | Federal Housing Administration | |||||
FNMA | Federal National Mortgage Assn. | |||||
FSA | Financial Security Assurance Inc. | |||||
GNMA | Government National Mortgage Assn. | |||||
MBIA | MBIA Insurance Corp. | |||||
RADIAN | Radian Asset Assurance, Inc. | |||||
SCIFG | Secondary CDC IXIS Financial Guaranty | |||||
XLCA | XL Capital Insurance Co. |
See Notes to Financial Statements
41
Table of Contents
Financial Statements
STATEMENTS OF ASSETS AND LIABILITIES
At 3/31/08
These statements represent each fund’s balance sheet, which details the assets and liabilities comprising the total value of each fund.
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | ||||||||
Assets: | |||||||||||
Investments – | |||||||||||
Identified Cost | $77,474,554 | $138,172,036 | $410,445,804 | $57,080,852 | |||||||
Unrealized appreciation (depreciation) | 1,244,780 | 2,623,752 | 838,750 | 553,178 | |||||||
Total investments, at value | $78,719,334 | $140,795,788 | $411,284,554 | $57,634,030 | |||||||
Cash | 1,704,945 | 8,307,691 | 1,083,753 | 214,501 | |||||||
Receivable for investments sold | 79,677 | 104,266 | 868,194 | 189,516 | |||||||
Receivable for fund shares sold | 21,001 | 1,479,445 | 643,817 | 30,450 | |||||||
Interest receivable | 1,117,496 | 1,806,405 | 5,254,938 | 1,095,236 | |||||||
Swaps, at value | 27,659 | 51,308 | — | 25,654 | |||||||
Other assets | 1,389 | 2,127 | 4,796 | 1,225 | |||||||
Total assets | $81,671,501 | $152,547,030 | $419,140,052 | $59,190,612 | |||||||
Liabilities: | |||||||||||
Distributions payable | $113,215 | $230,385 | $679,015 | $117,422 | |||||||
Payable for daily variation margin on open futures contracts | — | 2,391 | 6,641 | 797 | |||||||
Payable for investments purchased | — | 1,223,355 | 3,901,421 | — | |||||||
Payable to the holder of the floating rate certificate from trust assets | 1,505,905 | 5,256,625 | 15,466,609 | — | |||||||
Payable for fund shares reacquired | 103,203 | 54,274 | 657,384 | 9,514 | |||||||
Payable to affiliates | |||||||||||
Management fee | 2,609 | 4,761 | 13,013 | 1,927 | |||||||
Shareholder servicing costs | 352 | 594 | 15,936 | 398 | |||||||
Distribution and service fees | 2,874 | 3,991 | 19,439 | 789 | |||||||
Administrative services fee | 231 | 317 | 650 | 203 | |||||||
Payable for independent trustees’ compensation | 9,302 | 9,009 | 18,568 | 8,899 | |||||||
Payable for interest expense and fees | 12,926 | 38,864 | 73,765 | — | |||||||
Accrued expenses and other liabilities | 50,236 | 57,213 | 86,865 | 49,215 | |||||||
Total liabilities | $1,800,853 | $6,881,779 | $20,939,306 | $189,164 | |||||||
Net assets | $79,870,648 | $145,665,251 | $398,200,746 | $59,001,448 | |||||||
Net assets consist of: | |||||||||||
Paid-in capital | $77,809,477 | $141,915,001 | $401,506,527 | $58,416,407 | |||||||
Unrealized appreciation (depreciation) on investments | 1,272,439 | 2,689,561 | 879,030 | 583,665 | |||||||
Accumulated net realized gain (loss) on investments | 766,097 | 1,089,424 | (4,414,735 | ) | 53,804 | ||||||
Accumulated undistributed (distributions in excess of) net investment income | 22,635 | (28,735 | ) | 229,924 | (52,428 | ) | |||||
Net assets | $79,870,648 | $145,665,251 | $398,200,746 | $59,001,448 |
42
Table of Contents
Statements of Assets and Liabilities – continued
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | |||||
Net assets | ||||||||
Class A | $71,315,476 | $138,938,145 | $339,099,372 | $51,504,407 | ||||
Class B | 8,555,172 | 6,727,106 | 31,239,044 | 7,497,041 | ||||
Class C | — | — | 27,862,330 | — | ||||
Total net assets | $79,870,648 | $145,665,251 | $398,200,746 | $59,001,448 | ||||
Shares of beneficial interest outstanding | ||||||||
Class A | 7,011,871 | 14,178,354 | 60,997,019 | 5,340,252 | ||||
Class B | 841,264 | 685,821 | 5,618,428 | 777,260 | ||||
Class C | — | — | 4,994,423 | — | ||||
Total shares of beneficial interest outstanding | 7,853,135 | 14,864,175 | 71,609,870 | 6,117,512 | ||||
Class A shares | ||||||||
Net asset value per share | ||||||||
(net assets/shares of beneficial interest outstanding) | $10.17 | $9.80 | $5.56 | $9.64 | ||||
Offering price per share (100/95.25 x net asset value per share) | $10.68 | $10.29 | $5.84 | $10.12 | ||||
Class B shares | ||||||||
Net asset value and offering price per share | ||||||||
(net assets/shares of beneficial interest outstanding) | $10.17 | $9.81 | $5.56 | $9.65 | ||||
Class C shares | ||||||||
Net asset value and offering price per share | ||||||||
(net assets/shares of beneficial interest outstanding) | $— | $— | $5.58 | $— |
On sales of $50,000 or more, the offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.
See Notes to Financial Statements
43
Table of Contents
Statements of Assets and Liabilities – continued
Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
Assets: | ||||||||
Investments – | ||||||||
Identified Cost | $54,749,235 | $114,786,703 | $203,035,986 | |||||
Unrealized appreciation (depreciation) | 1,041,318 | 2,007,290 | 8,405,340 | |||||
Total investments, at value | $55,790,553 | $116,793,993 | $211,441,326 | |||||
Cash | 1,108,482 | 772,382 | 11,252,491 | |||||
Receivable for investments sold | 59,516 | 30,000 | 119,032 | |||||
Receivable for fund shares sold | 128,034 | 13,859 | 217,950 | |||||
Interest receivable | 871,189 | 1,745,032 | 3,131,648 | |||||
Swaps, at value | 25,654 | 7,450 | 51,308 | |||||
Other assets | 1,089 | 1,862 | 2,743 | |||||
Total assets | $57,984,517 | $119,364,578 | $226,216,498 | |||||
Liabilities: | ||||||||
Distributions payable | $73,023 | $157,381 | $356,021 | |||||
Payable for daily variation margin on open futures contracts | — | 1,859 | 3,453 | |||||
Payable for investments purchased | 992,560 | — | — | |||||
Payable to the holder of the floating rate certificate from trust assets | 501,245 | 3,031,575 | 11,401,909 | |||||
Payable for fund shares reacquired | 98,171 | 18,106 | 133,358 | |||||
Swaps, at value | — | 3,936 | — | |||||
Payable to affiliates | ||||||||
Management fee | 1,835 | 3,793 | 6,998 | |||||
Shareholder servicing costs | 199 | 505 | 2,983 | |||||
Distribution and service fees | 2,083 | 5,286 | 9,887 | |||||
Administrative services fee | 200 | 279 | 408 | |||||
Payable for independent trustees’ compensation | 10,538 | 13,338 | 13,381 | |||||
Payable for interest expense and fees | 2,247 | 26,319 | 63,172 | |||||
Accrued expenses and other liabilities | 45,355 | 55,263 | 67,725 | |||||
Total liabilities | $1,727,456 | $3,317,640 | $12,059,295 | |||||
Net assets | $56,257,061 | $116,046,938 | $214,157,203 | |||||
Net assets consist of: | ||||||||
Paid-in capital | $54,009,200 | $113,767,979 | $206,621,912 | |||||
Unrealized appreciation (depreciation) on investments | 1,066,972 | 2,022,082 | 8,477,593 | |||||
Accumulated net realized gain (loss) on investments | 1,242,752 | 197,816 | (1,024,161 | ) | ||||
Accumulated undistributed (distributions in excess of) net investment income | (61,863 | ) | 59,061 | 81,859 | ||||
Net assets | $56,257,061 | $116,046,938 | $214,157,203 |
44
Table of Contents
Statements of Assets and Liabilities – continued
Georgia Fund | Maryland Fund | Massachusetts Fund | ||||
Net assets | ||||||
Class A | $49,476,699 | $103,893,864 | $189,804,420 | |||
Class B | 6,780,362 | 12,153,074 | 24,352,783 | |||
Total net assets | $56,257,061 | $116,046,938 | $214,157,203 | |||
Shares of beneficial interest outstanding | ||||||
Class A | 4,648,275 | 9,591,886 | 17,391,612 | |||
Class B | 634,710 | 1,122,550 | 2,227,792 | |||
Total shares of beneficial interest outstanding | 5,282,985 | 10,714,436 | 19,619,404 | |||
Class A shares | ||||||
Net asset value per share | ||||||
(net assets/shares of beneficial interest outstanding) | $10.64 | $10.83 | $10.91 | |||
Offering price per share (100/95.25 × net asset value per share) | $11.17 | $11.37 | $11.45 | |||
Class B shares | ||||||
Net asset value and offering price per share | ||||||
(net assets/shares of beneficial interest outstanding) | $10.68 | $10.83 | $10.93 |
On sales of $50,000 or more, the offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A and Class B shares.
See Notes to Financial Statements
45
Table of Contents
Financial Statements
Year ended 3/31/08
These statements describe how much each fund earned in investment income and accrued in expenses. They also describe any gains or losses generated by each fund’s operations.
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | |||||||||
Net investment income | ||||||||||||
Interest | $4,724,289 | $7,365,913 | $22,042,644 | $3,679,206 | ||||||||
Expenses | ||||||||||||
Management fee | $452,600 | $751,381 | $2,337,647 | $368,384 | ||||||||
Distribution and service fees | 275,713 | 192,739 | 982,125 | 68,434 | ||||||||
Shareholder servicing costs | 59,536 | 89,656 | 268,874 | 47,796 | ||||||||
Administrative services fee | 22,429 | 30,609 | 74,522 | 20,196 | ||||||||
Independent trustees’ compensation | 4,015 | 6,094 | 12,787 | 3,952 | ||||||||
Custodian fee | 18,877 | 26,367 | 68,649 | 19,373 | ||||||||
Shareholder communications | 9,395 | 10,631 | 40,656 | 8,750 | ||||||||
Auditing fees | 61,253 | 61,253 | 61,253 | 61,253 | ||||||||
Legal fees | 6,176 | 5,086 | 19,437 | 6,466 | ||||||||
Interest expense and fees | 218,695 | 277,166 | 807,521 | 198,516 | ||||||||
Miscellaneous | 40,391 | 47,314 | 97,042 | 39,910 | ||||||||
Total expenses | $1,169,080 | $1,498,296 | $4,770,513 | $843,030 | ||||||||
Fees paid indirectly | (1,486 | ) | (1,609 | ) | (3,163 | ) | (1,674 | ) | ||||
Reduction of expenses by investment adviser | (206,113 | ) | (342,084 | ) | (1,064,554 | ) | (167,764 | ) | ||||
Net expenses | $961,481 | $1,154,603 | $3,702,796 | $673,592 | ||||||||
Net investment income | $3,762,808 | $6,211,310 | $18,339,848 | $3,005,614 | ||||||||
Realized and unrealized gain (loss) on investments | ||||||||||||
Realized gain (loss) (identified cost basis) | ||||||||||||
Investment transactions | $(155,061 | ) | $2,684 | $(2,444,325 | ) | $158,250 | ||||||
Swap transactions | 341,681 | 574,428 | (458,153 | ) | (142,283 | ) | ||||||
Net realized gain (loss) on investments | $186,620 | $577,112 | $(2,902,478 | ) | $15,967 | |||||||
Change in unrealized appreciation (depreciation) | ||||||||||||
Investments | $(2,444,290 | ) | $(4,095,398 | ) | $(20,525,890 | ) | $(3,051,830 | ) | ||||
Futures contracts | — | 14,501 | 40,280 | 4,833 | ||||||||
Swap transactions | 28,679 | 33,693 | (59,332 | ) | (3,044 | ) | ||||||
Net unrealized gain (loss) on investments | $(2,415,611 | ) | $(4,047,204 | ) | $(20,544,942 | ) | $(3,050,041 | ) | ||||
Net realized and unrealized gain (loss) on investments | $(2,228,991 | ) | $(3,470,092 | ) | $(23,447,420 | ) | $(3,034,074 | ) | ||||
Change in net assets from operations | $1,533,817 | $2,741,218 | $(5,107,572 | ) | $(28,460 | ) |
See Notes to Financial Statement
46
Table of Contents
Statements of Operations – continued
Year ended 3/31/08 | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
Net investment income | |||||||||
Interest | $3,110,015 | $6,882,843 | $11,014,607 | ||||||
Expenses | |||||||||
Management fee | $314,576 | $693,060 | $1,191,036 | ||||||
Distribution and service fees | 199,885 | 533,465 | 937,958 | ||||||
Shareholder servicing costs | 41,204 | 94,995 | 142,388 | ||||||
Administrative services fee | 18,636 | 29,137 | 42,732 | ||||||
Independent trustees' compensation | 3,896 | 6,784 | 11,824 | ||||||
Custodian fee | 15,091 | 24,923 | 37,455 | ||||||
Shareholder communications | 8,016 | 16,869 | 19,422 | ||||||
Auditing fees | 61,115 | 61,253 | 61,253 | ||||||
Legal fees | 8,209 | 7,085 | 5,624 | ||||||
Interest expense and fees | 159,342 | 170,346 | 587,357 | ||||||
Miscellaneous | 31,730 | 42,997 | 54,427 | ||||||
Total expenses | $861,700 | $1,680,914 | $3,091,476 | ||||||
Fees paid indirectly | (1,546 | ) | (1,517 | ) | (2,579 | ) | |||
Reduction of expenses by investment adviser | (143,258 | ) | (315,620 | ) | (542,394 | ) | |||
Net expenses | $716,896 | $1,363,777 | $2,546,503 | ||||||
Net investment income | $2,393,119 | $5,519,066 | $8,468,104 | ||||||
Realized and unrealized gain (loss) on investments | |||||||||
Realized gain (loss) (identified cost basis) | |||||||||
Investment transactions | $986,889 | $(309,219 | ) | $(20,671 | ) | ||||
Swap transactions | 316,899 | 48,930 | 389,781 | ||||||
Net realized gain (loss) on investments | $1,303,788 | $(260,289 | ) | $369,110 | |||||
Change in unrealized appreciation (depreciation) | |||||||||
Investments | $(2,390,217 | ) | $(5,044,990 | ) | $(5,403,252 | ) | |||
Futures contracts | — | 11,278 | 20,945 | ||||||
Swap transactions | 7,907 | (24,746 | ) | 27,844 | |||||
Net unrealized gain (loss) on investments | $(2,382,310 | ) | $(5,058,458 | ) | $(5,354,463 | ) | |||
Net realized and unrealized gain (loss) on investments | $(1,078,522 | ) | $(5,318,747 | ) | $(4,985,353 | ) | |||
Change in net assets from operations | $1,314,597 | $200,319 | $3,482,751 |
See Notes to Financial Statements
47
Table of Contents
Financial Statements
STATEMENTS OF CHANGES IN NET ASSETS
Year ended 3/31/08
These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | |||||||||
Change in net assets | ||||||||||||
From operations | ||||||||||||
Net investment income | $3,762,808 | $6,211,310 | $18,339,848 | $3,005,614 | ||||||||
Net realized gain (loss) on investments | 186,620 | 577,112 | (2,902,478 | ) | 15,967 | |||||||
Net unrealized gain (loss) on investments | (2,415,611 | ) | (4,047,204 | ) | (20,544,942 | ) | (3,050,041 | ) | ||||
Change in net assets from operations | $1,533,817 | $2,741,218 | $(5,107,572 | ) | $(28,460 | ) | ||||||
Distributions declared to shareholders | ||||||||||||
From net investment income | ||||||||||||
Class A | $(3,273,616 | ) | $(6,021,909 | ) | $(16,121,843 | ) | $(2,591,006 | ) | ||||
Class B | (348,527 | ) | (290,388 | ) | (1,452,869 | ) | (334,886 | ) | ||||
Class C | — | — | (1,056,821 | ) | — | |||||||
From net realized gain on investments | ||||||||||||
Class A | (167,292 | ) | (240,997 | ) | — | — | ||||||
Class B | (20,782 | ) | (13,273 | ) | — | — | ||||||
Total distributions declared to shareholders | $(3,810,217 | ) | $(6,566,567 | ) | $(18,631,533 | ) | $(2,925,892 | ) | ||||
Change in net assets from fund share transactions | $(1,834,102 | ) | $13,021,156 | $(22,540,529 | ) | $(12,540,514 | ) | |||||
Total change in net assets | $(4,110,502 | ) | $9,195,807 | $(46,279,634 | ) | $(15,494,866 | ) | |||||
Net assets | ||||||||||||
At beginning of period | 83,981,150 | 136,469,444 | 444,480,380 | 74,496,314 | ||||||||
At end of period | $79,870,648 | $145,665,251 | $398,200,746 | $59,001,448 | ||||||||
Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period | $22,635 | $(28,735 | ) | $229,924 | $(52,428 | ) |
See Notes to Financial Statements
48
Table of Contents
Statements of Changes in Net Assets – continued
Year ended 3/31/08 | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
Change in net assets | |||||||||
From operations | |||||||||
Net investment income | $2,393,119 | $5,519,066 | $8,468,104 | ||||||
Net realized gain (loss) on investments | 1,303,788 | (260,289 | ) | 369,110 | |||||
Net unrealized gain (loss) on investments | (2,382,310 | ) | (5,058,458 | ) | (5,354,463 | ) | |||
Change in net assets from operations | $1,314,597 | $200,319 | $3,482,751 | ||||||
Distributions declared to shareholders | |||||||||
From net investment income | |||||||||
Class A | $(2,066,945 | ) | $(4,710,452 | ) | $(8,055,746 | ) | |||
Class B | (259,309 | ) | (506,249 | ) | (1,001,038 | ) | |||
From net realized gain on investments | |||||||||
Class A | — | (188,563 | ) | (884,860 | ) | ||||
Class B | — | (23,166 | ) | (124,524 | ) | ||||
Total distributions declared to shareholders | $(2,326,254 | ) | $(5,428,430 | ) | $(10,066,168 | ) | |||
Change in net assets from fund share transactions | $(1,920,966 | ) | $(12,838,056 | ) | $276,909 | ||||
Total change in net assets | $(2,932,623 | ) | $(18,066,167 | ) | $(6,306,508 | ) | |||
Net assets | |||||||||
At beginning of period | 59,189,684 | 134,113,105 | 220,463,711 | ||||||
At end of period | $56,257,061 | $116,046,938 | $214,157,203 | ||||||
Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period | $(61,863 | ) | $59,061 | $81,859 |
See Notes to Financial Statements
49
Table of Contents
Statements of Changes in Net Assets – continued
Year ended 3/31/07 | Alabama Fund | Arkansas Fund | California Fund | Florida Fund | ||||||||
Change in net assets | ||||||||||||
From operations | ||||||||||||
Net investment income | $3,923,017 | $6,571,355 | $17,827,607 | $3,562,982 | ||||||||
Net realized gain (loss) on investments | 464,697 | 236,299 | 1,417,274 | 267,920 | ||||||||
Net unrealized gain (loss) on investments | (542,586 | ) | (332,332 | ) | 718,490 | (61,611 | ) | |||||
Change in net assets from operations | $3,845,128 | $6,475,322 | $19,963,371 | $3,769,291 | ||||||||
Distributions declared to shareholders | ||||||||||||
From net investment income | ||||||||||||
Class A | $(3,156,475 | ) | $(5,558,406 | ) | $(14,096,653 | ) | $(3,011,198 | ) | ||||
Class B | (428,985 | ) | (376,114 | ) | (1,967,039 | ) | (462,859 | ) | ||||
Class C | — | — | (1,065,059 | ) | — | |||||||
From net realized gain on investments | ||||||||||||
Class A | (333,902 | ) | — | — | — | |||||||
Class B | (52,906 | ) | — | — | — | |||||||
Total distributions declared to shareholders | $(3,972,268 | ) | $(5,934,520 | ) | $(17,128,751 | ) | $(3,474,057 | ) | ||||
Change in net assets from fund share transactions | $(3,538,592 | ) | $3,213,195 | $61,771,471 | $(11,171,039 | ) | ||||||
Total change in net assets | $(3,665,732 | ) | $3,753,997 | $64,606,091 | $(10,875,805 | ) | ||||||
Net assets | ||||||||||||
At beginning of period | 87,646,882 | 132,715,447 | 379,874,289 | 85,372,119 | ||||||||
At end of period | $83,981,150 | $136,469,444 | $444,480,380 | $74,496,314 | ||||||||
Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period | $120,734 | $223,904 | $(17,244 | ) | $(64,250 | ) | ||||||
Year ended 3/31/07 | Georgia Fund | Maryland Fund | Massachusetts Fund | |||||||||
Change in net assets | ||||||||||||
From operations | ||||||||||||
Net investment income | $2,578,754 | $5,915,528 | $10,222,432 | |||||||||
Net realized gain (loss) on investments | 12,347 | 692,161 | 1,281,942 | |||||||||
Net unrealized gain (loss) on investments | 2,537 | (318,157 | ) | (1,035,792 | ) | |||||||
Change in net assets from operations | $2,593,638 | $6,289,532 | $10,468,582 | |||||||||
Distributions declared to shareholders | ||||||||||||
From net investment income | ||||||||||||
Class A | $(2,152,288 | ) | $(4,893,616 | ) | $(8,163,055 | ) | ||||||
Class B | (308,790 | ) | (695,797 | ) | (1,225,506 | ) | ||||||
From net realized gain on investments | ||||||||||||
Class A | — | (325,482 | ) | (437,284 | ) | |||||||
Class B | — | (51,909 | ) | (76,182 | ) | |||||||
Total distributions declared to shareholders | $(2,461,078 | ) | $(5,966,804 | ) | $(9,902,027 | ) | ||||||
Change in net assets from fund share transactions | $(2,439,289 | ) | $(2,526,883 | ) | $(14,018,473 | ) | ||||||
Total change in net assets | $(2,306,729 | ) | $(2,204,155 | ) | $(13,451,918 | ) | ||||||
Net assets | ||||||||||||
At beginning of period | 61,496,413 | 136,317,260 | 233,915,629 | |||||||||
At end of period | $59,189,684 | $134,113,105 | $220,463,711 | |||||||||
Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period | $(117,455 | ) | $(80,183 | ) | $(169,143 | ) |
See Notes to Financial Statements
50
Table of Contents
Financial Statements
MFS® ALABAMA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $10.45 | $10.47 | $10.62 | $10.88 | $10.82 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.48 | $0.49 | (z) | $0.46 | $0.48 | $0.48 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.28 | ) | (0.01 | )(z) | (0.15 | ) | (0.22 | ) | 0.06 | ||||||
Total from investment operations | $0.20 | $0.48 | $0.31 | $0.26 | $0.54 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.46 | ) | $(0.45 | ) | $(0.46 | ) | $(0.48 | ) | $(0.48 | ) | |||||
From net realized gain on investments | (0.02 | ) | (0.05 | ) | — | (0.04 | ) | — | |||||||
Total distributions declared to shareholders | $(0.48 | ) | $(0.50 | ) | $(0.46 | ) | $(0.52 | ) | $(0.48 | ) | |||||
Net asset value, end of period | $10.17 | $10.45 | $10.47 | $10.62 | $10.88 | ||||||||||
Total return (%) (r)(s)(t) | 2.03 | 4.66 | 2.97 | 2.40 | 5.11 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.34 | 1.40 | 1.33 | 1.21 | 1.17 | ||||||||||
Expenses after expense reductions (f) | 1.09 | 1.15 | 1.08 | 0.96 | 0.96 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.82 | 0.86 | 0.87 | 0.84 | 0.88 | ||||||||||
Net investment income | 4.67 | 4.70 | (z) | 4.37 | 4.46 | 4.38 | |||||||||
Portfolio turnover | 17 | 9 | 9 | 17 | 10 | ||||||||||
Net assets at end of period (000 Omitted) | $71,315 | $73,560 | $74,204 | $77,499 | $80,704 |
See Notes to Financial Statements
51
Table of Contents
Financial Highlights – continued
MFS® ALABAMA MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $10.45 | $10.47 | $10.62 | $10.88 | $10.82 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.40 | $0.41 | (z) | $0.38 | $0.40 | $0.39 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.27 | ) | (0.01 | )(z) | (0.15 | ) | (0.23 | ) | 0.07 | ||||||
Total from investment operations | $0.13 | $0.40 | $0.23 | $0.17 | $0.46 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.39 | ) | $(0.37 | ) | $(0.38 | ) | $(0.39 | ) | $(0.40 | ) | |||||
From net realized gain on investments | (0.02 | ) | (0.05 | ) | — | (0.04 | ) | — | |||||||
Total distributions declared to shareholders | $(0.41 | ) | $(0.42 | ) | $(0.38 | ) | $(0.43 | ) | $(0.40 | ) | |||||
Net asset value, end of period | $10.17 | $10.45 | $10.47 | $10.62 | $10.88 | ||||||||||
Total return (%) (r)(s)(t) | 1.27 | 3.88 | 2.20 | 1.63 | 4.32 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 2.09 | 2.15 | 2.08 | 1.96 | 1.91 | ||||||||||
Expenses after expense reductions (f) | 1.84 | 1.90 | 1.83 | 1.71 | 1.71 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.57 | 1.61 | 1.62 | 1.59 | 1.63 | ||||||||||
Net investment income | 3.92 | 3.93 | (z) | 3.61 | 3.71 | 3.63 | |||||||||
Portfolio turnover | 17 | 9 | 9 | 17 | 10 | ||||||||||
Net assets at end of period (000 Omitted) | $8,555 | $10,421 | $13,443 | $15,118 | $17,339 |
(d) | Per share data is based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.02 per share to net investment income, a decrease of $0.02 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.21% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
52
Table of Contents
Financial Highlights – continued
MFS® ARKANSAS MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $10.08 | $10.04 | $10.17 | $10.41 | $10.40 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.46 | $ 0.50 | (z) | $0.45 | $0.45 | $0.45 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.25 | ) | (0.01 | )(z) | (0.13 | ) | (0.23 | ) | 0.01 | ||||||
Total from investment operations | $0.21 | $0.49 | $0.32 | $0.22 | $0.46 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.47 | ) | $(0.45 | ) | $(0.45 | ) | $(0.46 | ) | $(0.45 | ) | |||||
From net realized gain on investments | (0.02 | ) | — | — | — | — | |||||||||
Total distributions declared to shareholders | $(0.49 | ) | $(0.45 | ) | $(0.45 | ) | $(0.46 | ) | $(0.45 | ) | |||||
Net asset value, end of period | $9.80 | $10.08 | $10.04 | $10.17 | $10.41 | ||||||||||
Total return (%) (r)(s)(t) | 2.07 | 5.02 | 3.17 | 2.14 | 4.53 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.06 | 1.14 | 1.10 | 1.00 | 0.99 | ||||||||||
Expenses after expense reductions (f) | 0.81 | 0.89 | 0.85 | 0.75 | 0.79 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.60 | 0.66 | 0.67 | 0.65 | 0.72 | ||||||||||
Net investment income | 4.60 | 4.98 | (z) | 4.45 | 4.47 | 4.31 | |||||||||
Portfolio turnover | 9 | 10 | 10 | 13 | 19 | ||||||||||
Net assets at end of period (000 Omitted) | $138,938 | $127,477 | $122,067 | $127,075 | $139,333 |
See Notes to Financial Statements
53
Table of Contents
Financial Highlights – continued
MFS® ARKANSAS MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $10.09 | $10.05 | $10.18 | $10.42 | $10.41 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.38 | $0.43 | (z) | $0.38 | $0.38 | $0.37 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.25 | ) | (0.01 | )(z) | (0.14 | ) | (0.24 | ) | 0.01 | ||||||
Total from investment operations | $0.13 | $0.42 | $0.24 | $0.14 | $0.38 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.39 | ) | $(0.38 | ) | $(0.37 | ) | $(0.38 | ) | $(0.37 | ) | |||||
From net realized gain on investments | (0.02 | ) | — | — | — | — | |||||||||
Total distributions declared to shareholders | $(0.41 | ) | $(0.38 | ) | $(0.37 | ) | $(0.38 | ) | $(0.37 | ) | |||||
Net asset value, end of period | $9.81 | $10.09 | $10.05 | $10.18 | $10.42 | ||||||||||
Total return (%) (r)(s)(t) | 1.30 | 4.21 | 2.39 | 1.37 | 3.68 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.81 | 1.91 | 1.87 | 1.76 | 1.80 | ||||||||||
Expenses after expense reductions (f) | 1.56 | 1.66 | 1.62 | 1.51 | 1.60 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.36 | 1.43 | 1.44 | 1.41 | 1.53 | ||||||||||
Net investment income | 3.86 | 4.21 | (z) | 3.68 | 3.71 | 3.50 | |||||||||
Portfolio turnover | 9 | 10 | 10 | 13 | 19 | ||||||||||
Net assets at end of period (000 Omitted) | $6,727 | $8,992 | $10,648 | $11,259 | $12,554 |
Any | redemption fees charged by the fund during the 2005 fiscal year resulted in a per share impact of less than $0.01. |
(d) | Per share data is based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.03 per share to net investment income, a decrease of $0.03 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.30% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
54
Table of Contents
Financial Highlights – continued
MFS® CALIFORNIA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $5.88 | $5.84 | $5.88 | $5.98 | $5.96 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.26 | $ 0.27 | (z) | $0.28 | $0.29 | $0.28 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.32 | ) | 0.03 | (z) | (0.03 | ) | (0.11 | ) | 0.02 | ||||||
Total from investment operations | $(0.06 | ) | $0.30 | $0.25 | $0.18 | $0.30 | |||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.26 | ) | $(0.26 | ) | $(0.28 | ) | $(0.28 | ) | $(0.28 | ) | |||||
From net realized gain on investments | — | — | (0.01 | ) | — | — | |||||||||
Total distributions declared to shareholders | $(0.26 | ) | $(0.26 | ) | $(0.29 | ) | $(0.28 | ) | $(0.28 | ) | |||||
Net asset value, end of period | $5.56 | $5.88 | $5.84 | $5.88 | $5.98 | ||||||||||
Total return (%) (r)(s)(t) | (1.05 | ) | 5.30 | 4.22 | 3.14 | 5.22 | |||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 0.99 | 1.11 | 1.09 | 0.97 | 0.96 | ||||||||||
Expenses after expense reductions (f) | 0.74 | 0.86 | 0.84 | 0.72 | 0.76 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.55 | 0.60 | 0.63 | 0.61 | 0.67 | ||||||||||
Net investment income | 4.46 | 4.66 | (z) | 4.69 | 4.91 | 4.71 | |||||||||
Portfolio turnover | 30 | 16 | 9 | 12 | 8 | ||||||||||
Net assets at end of period (000 Omitted) | $339,099 | $366,861 | $291,656 | $295,332 | $314,108 | ||||||||||
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $5.88 | $5.84 | $5.88 | $5.98 | $5.96 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.21 | $0.23 | (z) | $0.23 | $0.25 | $0.23 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.31 | ) | 0.03 | (z) | (0.03 | ) | (0.11 | ) | 0.03 | ||||||
Total from investment operations | $(0.10 | ) | $0.26 | $0.20 | $0.14 | $0.26 | |||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.22 | ) | $(0.22 | ) | $(0.23 | ) | $(0.24 | ) | $(0.24 | ) | |||||
From net realized gain on investments | — | — | (0.01 | ) | — | — | |||||||||
Total distributions declared to shareholders | $(0.22 | ) | $(0.22 | ) | $(0.24 | ) | $(0.24 | ) | $(0.24 | ) | |||||
Net asset value, end of period | $5.56 | $5.88 | $5.84 | $5.88 | $5.98 | ||||||||||
Total return (%) (r)(s)(t) | (1.80 | ) | 4.51 | 3.44 | 2.38 | 4.38 | |||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.75 | 1.88 | 1.85 | 1.70 | 1.76 | ||||||||||
Expenses after expense reductions (f) | 1.50 | 1.62 | 1.60 | 1.45 | 1.56 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.31 | 1.37 | 1.39 | 1.34 | 1.47 | ||||||||||
Net investment income | 3.70 | 3.91 | (z) | 3.94 | 4.17 | 3.91 | |||||||||
Portfolio turnover | 30 | 16 | 9 | 12 | 8 | ||||||||||
Net assets at end of period (000 Omitted) | $31,239 | $47,127 | $58,338 | $69,142 | $85,106 |
See Notes to Financial Statements
55
Table of Contents
Financial Highlights – continued
MFS® CALIFORNIA MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class C | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $5.90 | $5.86 | $5.90 | $6.00 | $5.98 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.20 | $0.22 | (z) | $0.23 | $0.24 | $0.23 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.31 | ) | 0.03 | (z) | (0.04 | ) | (0.11 | ) | 0.02 | ||||||
Total from investment operations | $(0.11 | ) | $0.25 | $0.19 | $0.13 | $0.25 | |||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.21 | ) | $(0.21 | ) | $(0.22 | ) | $(0.23 | ) | $(0.23 | ) | |||||
From net realized gain on investments | — | — | (0.01 | ) | — | — | |||||||||
Total distributions declared to shareholders | $(0.21 | ) | $(0.21 | ) | $(0.23 | ) | $(0.23 | ) | $(0.23 | ) | |||||
Net asset value, end of period | $5.58 | $5.90 | $5.86 | $5.90 | $6.00 | ||||||||||
Total return (%) (r)(s)(t) | (1.93 | ) | 4.36 | 3.29 | 2.22 | 4.27 | |||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.89 | 2.01 | 1.99 | 1.87 | 1.86 | ||||||||||
Expenses after expense reductions (f) | 1.64 | 1.76 | 1.74 | 1.62 | 1.65 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.45 | 1.50 | 1.53 | 1.51 | 1.56 | ||||||||||
Net investment income | 3.55 | 3.77 | (z) | 3.79 | 4.01 | 3.81 | |||||||||
Portfolio turnover | 30 | 16 | 9 | 12 | 8 | ||||||||||
Net assets at end of period (000 Omitted) | $27,862 | $30,492 | $29,880 | $33,162 | $36,363 |
Any redemption fees charged by the fund during the 2005 fiscal year resulted in a per share impact of less than $0.01.
(d) | Per share data is based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities in the current year that resulted in an increase of less than $0.01 per share to net investment income, a decrease of less than $0.01 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.06% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
56
Table of Contents
Financial Highlights – continued
MFS® FLORIDA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $10.09 | $10.05 | $10.09 | $10.24 | $10.19 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.46 | $0.46 | (z) | $0.45 | $0.47 | $0.47 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.47 | ) | 0.02 | (z) | (0.04 | ) | (0.15 | ) | 0.05 | ||||||
Total from investment operations | $(0.01 | ) | $0.48 | $0.41 | $0.32 | $0.52 | |||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.44 | ) | $(0.44 | ) | $(0.45 | ) | $(0.47 | ) | $(0.47 | ) | |||||
Net asset value, end of period | $9.64 | $10.09 | $10.05 | $10.09 | $10.24 | ||||||||||
Total return (%) (r)(s)(t) | (0.08 | ) | 4.92 | 4.14 | 3.25 | 5.20 | |||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.16 | 1.19 | 1.11 | 0.94 | 0.98 | ||||||||||
Expenses after expense reductions (f) | 0.91 | 0.94 | 0.86 | 0.69 | 0.77 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.61 | 0.64 | 0.64 | 0.57 | 0.64 | ||||||||||
Net investment income | 4.60 | 4.53 | (z) | 4.46 | 4.68 | 4.58 | |||||||||
Portfolio turnover | 7 | 9 | 17 | 18 | 31 | ||||||||||
Net assets at end of period (000 Omitted) | $51,504 | $63,590 | $70,402 | $69,082 | $79,155 |
See Notes to Financial Statements
57
Table of Contents
Financial Highlights – continued
MFS® FLORIDA MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $10.09 | $10.05 | $10.09 | $10.24 | $10.19 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.38 | $0.38 | (z) | $0.38 | $0.40 | $0.39 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.45 | ) | 0.03 | (z) | (0.04 | ) | (0.16 | ) | 0.05 | ||||||
Total from investment operations | $(0.07 | ) | $0.41 | $0.34 | $0.24 | $0.44 | |||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.37 | ) | $(0.37 | ) | $(0.38 | ) | $(0.39 | ) | $(0.39 | ) | |||||
Net asset value, end of period | $9.65 | $10.09 | $10.05 | $10.09 | $10.24 | ||||||||||
Total return (%) (r)(s)(t) | (0.73 | ) | 4.12 | 3.35 | 2.45 | 4.36 | |||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.92 | 1.96 | 1.87 | 1.71 | 1.77 | ||||||||||
Expenses after expense reductions (f) | 1.67 | 1.71 | 1.62 | 1.46 | 1.57 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.37 | 1.40 | 1.40 | 1.34 | 1.44 | ||||||||||
Net investment income | 3.85 | 3.77 | (z) | 3.70 | 3.92 | 3.78 | |||||||||
Portfolio turnover | 7 | 9 | 17 | 18 | 31 | ||||||||||
Net assets at end of period (000 Omitted) | $7,497 | $10,906 | $14,970 | $18,382 | $22,312 |
(d) | Per share data are based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.01 per share to net investment income, a decrease of $0.01 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.06% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
58
Table of Contents
Financial Highlights – continued
MFS® GEORGIA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $10.83 | $10.80 | $10.99 | $11.22 | $11.17 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.46 | $0.47 | (z) | $0.46 | $0.48 | $0.49 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.20 | ) | 0.01 | (z) | (0.18 | ) | (0.23 | ) | 0.05 | ||||||
Total from investment operations | $0.26 | $0.48 | $0.28 | $0.25 | $0.54 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.45 | ) | $(0.45 | ) | $(0.47 | ) | $(0.48 | ) | $(0.49 | ) | |||||
Net asset value, end of period | $10.64 | $10.83 | $10.80 | $10.99 | $11.22 | ||||||||||
Total return (%) (r)(s)(t) | 2.43 | 4.55 | 2.53 | 2.27 | 4.93 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.41 | 1.47 | 1.39 | 1.24 | 1.20 | ||||||||||
Expenses after expense reductions (f) | 1.16 | 1.22 | 1.14 | 0.99 | 0.99 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.88 | 0.93 | 0.93 | 0.88 | 0.91 | ||||||||||
Net investment income | 4.29 | 4.37 | (z) | 4.22 | 4.35 | 4.35 | |||||||||
Portfolio turnover | 26 | 6 | 5 | 18 | 12 | ||||||||||
Net assets at end of period (000 Omitted) | $49,477 | $51,015 | $51,681 | $53,190 | $55,659 |
See Notes to Financial Statements
59
Table of Contents
Financial Highlights – continued
MFS® GEORGIA BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $10.87 | $10.84 | $11.00 | $11.23 | $11.18 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.38 | $0.40 | (z) | $0.41 | $0.40 | $0.40 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.20 | ) | 0.00 | (w)(z) | (0.18 | ) | (0.24 | ) | 0.06 | ||||||
Total from investment operations | $0.18 | $0.40 | $0.23 | $0.16 | $0.46 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.37 | ) | $(0.37 | ) | $(0.39 | ) | $(0.39 | ) | $(0.41 | ) | |||||
Net asset value, end of period | $10.68 | $10.87 | $10.84 | $11.00 | $11.23 | ||||||||||
Total return (%) (r)(s)(t) | 1.67 | 3.77 | 2.05 | 1.51 | 4.15 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 2.16 | 2.22 | 2.14 | 1.99 | 1.94 | ||||||||||
Expenses after expense reductions (f) | 1.91 | 1.97 | 1.89 | 1.74 | 1.74 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.63 | 1.68 | 1.68 | 1.63 | 1.66 | ||||||||||
Net investment income | 3.54 | 3.63 | (z) | 3.72 | 3.60 | 3.60 | |||||||||
Portfolio turnover | 26 | 6 | 5 | 18 | 12 | ||||||||||
Net assets at end of period (000 Omitted) | $6,780 | $8,175 | $9,816 | $13,280 | $16,759 |
Any redemption fees charged by the fund during the 2005 fiscal year resulted in a per share impact of less than $0.01.
(d) | Per share data are based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(w) | Per share amount as less than $0.01. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.01 per share to net investment income, a decrease of $0.01 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.12% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
60
Table of Contents
Financial Highlights – continued
MFS® MARYLAND MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund’s financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.30 | $11.27 | $11.49 | $11.74 | $11.69 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.50 | $ 0.50 | (z) | $0.50 | $0.52 | $0.51 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.48 | ) | 0.04 | (z) | (0.15 | ) | (0.25 | ) | 0.06 | ||||||
Total from investment operations | $0.02 | $0.54 | $0.35 | $0.27 | $0.57 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.47 | ) | $(0.48 | ) | $(0.50 | ) | $(0.51 | ) | $(0.52 | ) | |||||
From net realized gain on investments | (0.02 | ) | (0.03 | ) | (0.07 | ) | (0.01 | ) | — | ||||||
Total distributions declared to shareholders | $(0.49 | ) | $(0.51 | ) | $(0.57 | ) | $(0.52 | ) | $(0.52 | ) | |||||
Net asset value, end of period | $10.83 | $11.30 | $11.27 | $11.49 | $11.74 | ||||||||||
Total return (%) (r)(s)(t) | 0.15 | 4.88 | 3.06 | 2.36 | 4.96 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.26 | 1.29 | 1.19 | 1.14 | 1.17 | ||||||||||
Expenses after expense reductions (f) | 1.01 | 1.04 | 0.94 | 0.89 | 0.96 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.88 | 0.91 | 0.94 | 0.89 | 0.96 | ||||||||||
Net investment income | 4.46 | 4.48 | (z) | 4.38 | 4.48 | 4.35 | |||||||||
Portfolio turnover | 7 | 16 | 9 | 12 | 21 | ||||||||||
Net assets at end of period (000 Omitted) | $103,894 | $117,598 | $115,307 | $124,261 | $138,201 |
See Notes to Financial Statements
61
Table of Contents
Financial Highlights – continued
MFS® MARYLAND MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.29 | $11.26 | $11.49 | $11.74 | $11.68 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.42 | $0.43 | (z) | $0.43 | $0.44 | $0.43 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.46 | ) | 0.03 | (z) | (0.17 | ) | (0.25 | ) | 0.07 | ||||||
Total from investment operations | $(0.04 | ) | $0.46 | $0.26 | $0.19 | $0.50 | |||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.40 | ) | $(0.40 | ) | $(0.42 | ) | $(0.44 | ) | $(0.44 | ) | |||||
From net realized gain on investments | (0.02 | ) | (0.03 | ) | (0.07 | ) | (0.00 | )(w) | — | ||||||
Total distributions declared to shareholders | $(0.42 | ) | $(0.43 | ) | $(0.49 | ) | $(0.44 | ) | $(0.44 | ) | |||||
Net asset value, end of period | $10.83 | $11.29 | $11.26 | $11.49 | $11.74 | ||||||||||
Total return (%) (r)(s)(t) | (0.41 | ) | 4.21 | 2.30 | 1.69 | 4.37 | |||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.91 | 1.95 | 1.84 | 1.79 | 1.81 | ||||||||||
Expenses after expense reductions (f) | 1.66 | 1.70 | 1.59 | 1.54 | 1.61 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.53 | 1.56 | 1.59 | 1.54 | 1.61 | ||||||||||
Net investment income | 3.81 | 3.83 | (z) | 3.72 | 3.83 | 3.70 | |||||||||
Portfolio turnover | 7 | 16 | 9 | 12 | 21 | ||||||||||
Net assets at end of period (000 Omitted) | $12,153 | $16,515 | $21,011 | $25,716 | $31,697 |
(d) | Per share data is based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(w) | Per share amount was less than $0.01. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.01 per share to net investment income, a decrease of $0.01 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.12% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
62
Table of Contents
Financial Highlights – continued
MFS® MASSACHUSETTS MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.25 | $11.22 | $11.31 | $11.52 | $11.49 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.44 | $ 0.51 | (z) | $0.48 | $0.51 | $0.51 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.26 | ) | 0.02 | (z) | (0.05 | ) | (0.22 | ) | 0.03 | ||||||
Total from investment operations | $0.18 | $0.53 | $0.43 | $0.29 | $0.54 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.47 | ) | $(0.47 | ) | $(0.48 | ) | $(0.50 | ) | $(0.51 | ) | |||||
From net realized gain on investments | (0.05 | ) | (0.03 | ) | (0.04 | ) | — | — | |||||||
Total distributions declared to shareholders | $(0.52 | ) | $(0.50 | ) | $(0.52 | ) | $(0.50 | ) | $(0.51 | ) | |||||
Net asset value, end of period | $10.91 | $11.25 | $11.22 | $11.31 | $11.52 | ||||||||||
Total return (%) (r)(s)(t) | 1.69 | 4.80 | 3.83 | 2.63 | 4.82 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.35 | 1.39 | 1.34 | 1.19 | 1.23 | ||||||||||
Expenses after expense reductions (f) | 1.10 | 1.14 | 1.09 | 0.94 | 1.02 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.82 | 0.87 | 0.90 | 0.84 | 0.95 | ||||||||||
Net investment income | 4.00 | 4.57 | (z) | 4.23 | 4.48 | 4.39 | |||||||||
Portfolio turnover | 20 | 5 | 10 | 11 | 14 | ||||||||||
Net assets at end of period (000 Omitted) | $189,804 | $189,049 | $196,992 | $210,103 | $224,923 |
See Notes to Financial Statements
63
Table of Contents
Financial Highlights – continued
MFS® MASSACHUSETTS MUNICIPAL BOND FUND - continued
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.27 | $11.24 | $11.33 | $11.54 | $11.51 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.37 | $0.44 | (z) | $0.41 | $0.43 | $0.43 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.26 | ) | 0.02 | (z) | (0.05 | ) | (0.21 | ) | 0.04 | ||||||
Total from investment operations | $0.11 | $0.46 | $0.36 | $0.22 | $0.47 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.40 | ) | $(0.40 | ) | $(0.41 | ) | $(0.43 | ) | $(0.44 | ) | |||||
From net realized gain on investments | (0.05 | ) | (0.03 | ) | (0.04 | ) | — | — | |||||||
Total distributions declared to shareholders | $(0.45 | ) | $(0.43 | ) | $(0.45 | ) | $(0.43 | ) | $(0.44 | ) | |||||
Net asset value, end of period | $10.93 | $11.27 | $11.24 | $11.33 | $11.54 | ||||||||||
Total return (%) (r)(s)(t) | 1.04 | 4.12 | 3.16 | 1.97 | 4.14 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 2.00 | 2.04 | 1.99 | 1.84 | 1.87 | ||||||||||
Expenses after expense reductions (f) | 1.75 | 1.79 | 1.74 | 1.59 | 1.67 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.48 | 1.52 | 1.55 | 1.49 | 1.60 | ||||||||||
Net investment income | 3.35 | 3.92 | (z) | 3.58 | 3.83 | 3.74 | |||||||||
Portfolio turnover | 20 | 5 | 10 | 11 | 14 | ||||||||||
Net assets at end of period (000 Omitted) | $24,353 | $31,415 | $36,924 | $40,766 | $46,253 |
Any redemption fees charged by the fund during the 2005 fiscal year resulted in a per share impact of less than $0.01.
(d) | Per share data is based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.02 per share to net investment income, a decrease of $0.02 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.20% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
64
Table of Contents
(1) | Business and Organization |
MFS Alabama Municipal Bond Fund (Alabama Fund), MFS Arkansas Municipal Bond Fund (Arkansas Fund), MFS California Municipal Bond Fund (California Fund), MFS Florida Municipal Bond Fund (Florida Fund), MFS Georgia Municipal Bond Fund (Georgia Fund), MFS Maryland Municipal Bond Fund (Maryland Fund), and MFS Massachusetts Municipal Bond Fund (Massachusetts Fund) are each a series of MFS Municipal Series Trust which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.
(2) | Significant Accounting Policies |
General – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Because each fund invests primarily in the securities of a single state and its political subdivisions, each fund is vulnerable to the effects of changes in the legal and economic environment of the particular state. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the discontinuance of the taxation supporting the projects or assets or the inability to collect revenues for the project or from the assets. If the Internal Revenue Service determines an issuer of a municipal security has not complied with applicable tax requirements, the security could decline in value, interest from the security could become taxable and the funds may be required to issue Forms 1099-DIV.
Investment Valuations – Debt instruments and floating rate loans (other than short-term instruments), including restricted debt instruments, are generally valued at an evaluated or composite bid as reported by an independent pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price as reported by an independent pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as reported by an independent pricing service on the market on which such futures contracts are primarily traded. Swaps are generally valued at an evaluated bid as reported by an independent pricing service. Securities and other assets generally valued on the basis of information from an independent pricing service may also be valued at a broker-dealer bid quotation. Values obtained from pricing services can utilize both dealer-supplied valuations and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data.
The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under the fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from independent pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the fund’s net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. The adviser may rely on independent pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of investments used to determine the fund’s net asset value may differ from quoted or published prices for the same investments.
In September 2006, FASB Statement No. 157, Fair Value Measurements (the “Statement”) was issued, and is effective for fiscal years beginning after November 15, 2007 and for all interim periods within those fiscal years. This Statement provides a single definition of fair value, a hierarchy for measuring fair value and expanded disclosures about fair value measurements. Management is evaluating the application of the Statement to each fund, and believes the impact will be limited to expanded disclosures resulting from the adoption of this Statement in each fund’s financial statements.
65
Table of Contents
Notes to Financial Statements – continued
Derivative Risk – Each fund may invest in derivatives for hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. When the funds use derivatives as an investment to gain market exposure, or for hedging purposes, gains and losses from derivative instruments may be substantially greater than the derivative’s original cost. Cash that has been segregated on behalf of certain derivative contracts will be reported separately on the Statements of Assets and Liabilities as restricted cash. Derivative instruments include futures contracts and swap agreements.
Futures Contracts – Each fund may enter into futures contracts for the delayed delivery of securities or currency, or contracts based on financial indices at a fixed price on a future date. In entering such contracts, the fund is required to deposit with the broker either in cash or securities an amount equal to a certain percentage of the contract amount. Subsequent payments are made or received by the fund each day, depending on the daily fluctuations in the value of the contract, and are recorded for financial statement purposes as unrealized gains or losses by the fund. Upon entering into such contracts, the fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the fund may not achieve the anticipated benefits of the futures contracts and may realize a loss.
Swap Agreements – Each fund may enter into swap agreements. A swap is an exchange of cash payments between the fund and another party. Net cash payments are exchanged at specified intervals and are recorded as a realized gain or loss in the Statements of Operations. The value of the swap is adjusted daily and the change in value, including accruals of periodic amounts of interest to be paid or received, is recorded as unrealized appreciation or depreciation in the Statements of Operations. Amounts paid or received at the inception of the swap are reflected as premiums paid or received on the Statements of Assets and Liabilities and are amortized using the effective interest method over the term of the agreement. A liquidation payment received or made upon early termination is recorded as a realized gain or loss in the Statements of Operations. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the fund’s custodian in connection with these agreements. Risk of loss may exceed amounts recognized on the Statements of Assets and Liabilities. These risks include the possible lack of a liquid market, failure of the counterparty to perform under the terms of the agreements, and unfavorable market and interest rate movements of the underlying instrument. All swap agreements entered into by the funds with the same counterparty are generally governed by a single master agreement, which provides for the netting of all amounts owed by the parties under the agreement upon the occurrence of an event of default, thereby reducing the credit risk to which such party is exposed.
Each fund may hold interest rate swap agreements which involve the periodic exchange of cash flows, such as the exchange of fixed rate interest payments for floating rate interest payments based on a notional principal amount. The interest rates may be based on a specific financial index or the exchange of two distinct floating rate payments. The fund may enter into an interest rate swap in order to manage its exposure to interest rate fluctuations.
Inverse Floaters – The funds may invest in municipal inverse floating rate securities which are structured by the issuer (known as primary market inverse floating rate securities) or by an investment banker utilizing municipal bonds which have already been issued (known as secondary market inverse floating rate securities) to have variable rates of interest which typically move in the opposite direction of short term interest rates. A secondary market inverse floating rate security is created when an investment banker transfers a fixed rate municipal bond to a special purpose trust, and causes the trust to (a) issue floating rate certificates to third parties, in an amount equal to a fraction of the par amount of the deposited bonds (these certificates usually pay tax-exempt interest at short-term interest rates that typically reset weekly; and the certificate holders typically, on seven days notice, have the option to tender their certificates to the investment banker or another party for redemption at par plus accrued interest), and (b) issue inverse floating rate certificates (sometimes referred to as “inverse floaters”). If the holder of the inverse floater transfers the municipal bonds to an investment banker for the purpose of depositing the municipal bonds into the special purpose trust, the inverse floating rate certificates that are issued by the trust are referred to as “self-deposited inverse floaters.” If the bonds held by the trust are purchased by the investment banker for deposit into the trust from someone other than the purchasers of the inverse floaters, the inverse floating rate certificates that are issued by the trust are referred to as “externally deposited inverse floaters.” Such self-deposited inverse floaters held by the funds are accounted for as secured borrowings, with the municipal bonds reflected in the investments of the funds and amounts owed to the holder of the floating rate certificate under the provisions of the trust, which amounts are paid solely from the assets of the trust, reflected as liabilities of the funds in the Statements of Assets and Liabilities under the caption, “Payable to the holder of the floating rate certificate from trust assets”. Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets in connection with self-deposited inverse floater transactions. Interest expense and fees are recorded as incurred. For the year ended March 31, 2008, each fund’s payable to the holder of the
66
Table of Contents
Notes to Financial Statements – continued
floating rate certificate from trust assets, the weighted average interest rate on the floating rate certificates issued by the trust, and the interest expense and fees in connection with self-deposited inverse floaters were as follows:
Payable to the holder of the floating rate certificate from trust assets | Weighted average interest rate on floating rate certificates issued by the trust | Interest expense and fees in connection with self-deposited inverse floater transactions | ||||
Fund | ||||||
Alabama Fund | $1,505,905 | 2.61% | $218,695 | |||
Arkansas Fund | 5,256,625 | 2.58% | 277,166 | |||
California Fund | 15,466,609 | 2.67% | 807,521 | |||
Florida Fund | — | — | 198,516 | |||
Georgia Fund | 501,245 | 2.56% | 159,342 | |||
Maryland Fund | 3,031,575 | 2.61% | 170,346 | |||
Massachusetts Fund | 11,401,909 | 2.74% | 587,357 |
Primary and externally deposited inverse floaters held by the funds are not accounted for as secured borrowings.
In March 2008, FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities (the “Standard”) was issued, and is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. This Standard provides enhanced disclosures about the funds’ use of and accounting for derivative instruments and the effect of derivative instruments on the funds’ results of operations and financial position. Management is evaluating the application of the Standard to the funds’, and has not at this time determined the impact, if any, resulting from the adoption of this Standard on the funds’ financial statements.
Indemnifications – Under each fund’s organizational documents, its officers and trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to each fund. Additionally, in the normal course of business, each fund enters into agreements with service providers that may contain indemnification clauses. Each fund's maximum exposure under these agreements is unknown as this would involve future claims that may be made against each fund that have not yet occurred.
Investment Transactions and Income – Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. All premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles.
Each fund may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statements of Operations in realized gain/loss if the security has been disposed of by the fund or in unrealized gain/loss if the security is still held by the fund. Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statements of Operations.
Legal fees and other related expenses incurred to preserve and protect the value of a security owned are added to the cost of the security; other legal fees are expensed. Capital infusions made directly to the security issuer, which are generally non-recurring, incurred to protect or enhance the value of high-yield debt securities, are reported as additions to the cost basis of the security. Costs that are incurred to negotiate the terms or conditions of capital infusions or that are expected to result in a plan of reorganization are reported as realized losses. Ongoing costs incurred to protect or enhance an investment, or costs incurred to pursue other claims or legal actions, are expensed.
Fees Paid Indirectly – Each fund’s custody fee may be reduced according to an arrangement that measures the value of cash deposited with the custodian by each fund. This amount, for the year ended March 31, 2008, is shown as a reduction of total expenses on the Statements of Operations.
Tax Matters and Distributions – Each fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable and tax-exempt income, including realized capital gains. As a result, no provision for federal income tax is required. Each fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“the Interpretation”) on the first day of the fund’s fiscal year. The Interpretation prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There was no impact resulting from the adoption of this Interpretation on the fund’s financial statements. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. It is the fund's policy to record interest and penalty charges on underpaid taxes associated with its tax positions as interest expense and miscellaneous expense, respectively. No such charges were recorded in the current financial statements.
67
Table of Contents
Notes to Financial Statements – continued
Distributions to shareholders are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These adjustments have no impact on net assets or net asset value per share. Temporary differences which arise from recognizing certain items of income, expense, gain or loss in different periods for financial statement and tax purposes will reverse at some time in the future. Distributions in excess of net investment income or net realized gains are temporary overdistributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes.
Book/tax differences primarily relate to amortization and accretion of debt securities, secured borrowings, and treating a portion of the proceeds from redemptions as a distribution for tax purposes.
The tax character of distributions declared to shareholders is as follows:
Year Ended 3/31/08 | Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | |||||||
Ordinary income (including any short-term capital gains) | $109,920 | $182,966 | $— | $— | $— | $21,004 | $455,311 | |||||||
Tax-exempt income | 3,622,143 | 6,308,655 | 18,631,533 | 2,925,892 | 2,326,254 | 5,207,845 | 9,056,784 | |||||||
Long-term capital gain | 78,154 | 74,946 | — | — | — | 199,581 | 554,073 | |||||||
Total distributions | $3,810,217 | $6,566,567 | $18,631,533 | $2,925,892 | $2,326,254 | $5,428,430 | $10,066,168 | |||||||
Year Ended 3/31/07 | Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | |||||||
Ordinary income (including any short-term capital gains) | $57,485 | $— | $— | $— | $— | $186,693 | $513,466 | |||||||
Tax-exempt income | 3,585,460 | 5,934,520 | 17,128,751 | 3,474,057 | 2,461,078 | 5,582,159 | 9,388,561 | |||||||
Long-term capital gain | 329,323 | — | — | — | — | 197,952 | — | |||||||
Total distributions | $3,972,268 | $5,934,520 | $17,128,751 | $3,474,057 | $2,461,078 | $5,966,804 | $9,902,027 |
The federal tax cost and the tax basis components of distributable earnings were as follows:
As of 3/31/08 | Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||||||||||
Cost of investments | $75,945,951 | $132,509,996 | $396,564,505 | $57,201,556 | $54,132,657 | $111,379,964 | $193,231,720 | ||||||||||||||
Gross appreciation | 2,678,176 | 5,678,742 | 12,313,550 | 1,590,877 | 2,021,912 | 5,171,895 | 10,028,100 | ||||||||||||||
Gross depreciation | (1,410,698 | ) | (2,649,575 | ) | (13,060,110 | ) | (1,158,403 | ) | (865,261 | ) | (2,789,441 | ) | (3,220,403 | ) | |||||||
Net unrealized appreciation (depreciation) | $1,267,478 | $3,029,167 | $(746,560 | ) | $432,474 | $1,156,651 | $2,382,454 | $6,807,697 | |||||||||||||
Undistributed ordinary income | 200,248 | 80,347 | — | — | 200,993 | 19,726 | — | ||||||||||||||
Undistributed tax-exempt income | 514,829 | 536,637 | 1,775,959 | 178,430 | 138,287 | 481,870 | 859,416 | ||||||||||||||
Undistributed long-term capital gain | 285,506 | 286,798 | — | 90,456 | 926,426 | — | 594,427 | ||||||||||||||
Capital loss carryforwards | — | — | (2,758,676 | ) | — | — | — | — | |||||||||||||
Post-October capital loss deferral | — | — | — | — | — | (221,816 | ) | — | |||||||||||||
Other temporary differences | (206,890 | ) | (182,699 | ) | (1,576,504 | ) | (116,319 | ) | (174,496 | ) | (383,275 | ) | (726,249 | ) |
As of March 31, 2008, certain funds had capital loss carryforwards available to offset future realized gains. Such losses expire as follows:
Expiration Date | California Fund | |
3/31/14 | $104,559 | |
3/31/16 | 2,654,117 | |
Total | $2,758,676 |
Multiple Classes of Shares of Beneficial Interest – Each fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of each fund based on daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. Differences in per share dividend rates are generally due to differences in separate class expenses. Class B shares will convert to Class A shares approximately eight years after purchase.
68
Table of Contents
Notes to Financial Statements – continued
(3) | Transactions with Affiliates |
Investment Adviser – Each fund has an investment advisory agreement with Massachusetts Financial Services Company (MFS) to provide overall investment management and related administrative services and facilities to each fund. The management fee is computed daily and paid monthly at an annual rate of 0.55% of each fund’s average daily net assets.
As part of a settlement agreement with the New York Attorney General concerning market timing and related matters, MFS has agreed to reduce the management fee to 0.30% of each fund’s average daily net assets for the period March 1, 2004 through February 28, 2009. For the year ended March 31, 2008, this waiver amounted to the following for each fund and is reflected as a reduction of total expenses in the Statements of Operations.
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
$205,727 | $341,447 | $1,062,565 | $167,447 | $142,989 | $315,027 | $541,379 |
The management fee incurred for the year ended March 31, 2008 was equivalent to an annual effective rate of 0.30% of each fund’s average daily net assets.
Distributor – MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received the following amounts for the year ended March 31, 2008, as its portion of the initial sales charge on sales of Class A shares of the funds.
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
$17,126 | $61,023 | $51,779 | $6,781 | $5,916 | $20,523 | $46,498 |
The Board of Trustees has adopted a distribution plan for certain class shares pursuant to Rule 12b-1 of the Investment Company Act of 1940.
Each fund’s distribution plan provides that the fund will pay MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.
Distribution Plan Fee Table:
CLASS A | ||||||||||
Distribution Fee Rate | Service Fee Rate | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
Alabama Fund | 0.10% | 0.25% | 0.35% | 0.25% | $182,398 | |||||
Arkansas Fund | 0.10% | 0.25% | 0.35% | 0.10% | 129,188 | |||||
California Fund | 0.10% | 0.25% | 0.35% | 0.10% | 357,068 | |||||
Florida Fund | 0.10% | 0.25% | 0.35% | — | — | |||||
Georgia Fund | 0.10% | 0.25% | 0.35% | 0.25% | 124,024 | |||||
Maryland Fund | 0.10% | 0.25% | 0.35% | 0.35% | 391,268 | |||||
Massachusetts Fund | 0.10% | 0.25% | 0.35% | 0.35% | 660,990 | |||||
CLASS B | ||||||||||
Distribution Fee Rate | Service Fee Rate | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
Alabama Fund | 0.75% | 0.25% | 1.00% | 1.00% | $93,315 | |||||
Arkansas Fund | 0.75% | 0.25% | 1.00% | 0.86% | 63,551 | |||||
California Fund | 0.75% | 0.25% | 1.00% | 0.86% | 332,195 | |||||
Florida Fund | 0.75% | 0.25% | 1.00% | 0.76% | 68,434 | |||||
Georgia Fund | 0.75% | 0.25% | 1.00% | 1.00% | 75,861 | |||||
Maryland Fund | 0.75% | 0.25% | 1.00% | 1.00% | 142,197 | |||||
Massachusetts Fund | 0.75% | 0.25% | 1.00% | 1.00% | 276,968 | |||||
CLASS C | ||||||||||
Distribution Fee Rate | Service Fee Rate | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
California Fund | 0.75% | 0.25% | 1.00% | 1.00% | $292,862 |
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||||
Total Distribution and Service Fees | $275,713 | $192,739 | $982,125 | $68,434 | $199,885 | $533,465 | $937,958 |
(d) | In accordance with the distribution plan for certain classes, each fund pays distribution and/or service fees up to these annual percentage rates of each class’ average daily net assets. |
69
Table of Contents
Notes to Financial Statements – continued
(e) | The annual effective rates represent actual fees incurred under the distribution plan for the year ended March 31, 2008 based on each class’ average daily net assets. Payment of the Alabama Fund’s, Arkansas Fund’s, California Fund’s, Florida Fund’s, and Georgia Fund’s 0.10% annual Class A distribution fee is not yet in effect and will be implemented on such date as each fund’s Board of Trustees may determine. Payment of Florida Fund’s 0.25% annual Class A service fee is not yet in effect and will be implemented on such date as the fund’s Board of Trustees may determine. 0.10% of the Class A service fee is currently being paid by the Arkansas Fund and California Fund. Payment of the remaining 0.15% of the Arkansas Fund and California Fund Class A service fee is not yet in effect and will be implemented on such date as each fund’s Board of Trustees may determine. For one year from the date of sale of Florida Fund’s Class B shares, assets attributable to such Class B shares are subject to the 0.25% annual Class B service fee. On assets attributable to all other Florida Fund’s Class B shares, the service fee is not currently in effect, but may be implemented on such date as the fund’s Board of Trustees may determine. For one year from the date of sale of Arkansas Fund’s and California Fund’s Class B shares, assets attributable to such Class B shares are subject to the 0.25% annual Class B service fee. On assets attributable to all other Arkansas Fund and California Fund Class B shares, 0.10% of the Class B service fee is currently in effect and the remaining portion of the Class B service fee is not in effect but may be implemented on such date as each fund’s Board of Trustees may determine. |
Certain Class A and Class C shares are subject to a contingent deferred sales charge in the event of a shareholder redemption within 12 months of purchase. Class B shares are subject to a contingent deferred sales charge in the event of a shareholder redemption within six years of purchase. All contingent deferred sales charges are paid to MFD and during the year ended March 31, 2008, were as follows:
CDSC imposed | Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | |||||||
Class A | $2 | $— | $12,788 | $306 | $— | $2 | $— | |||||||
Class B | 16,721 | 25,138 | 55,835 | 15,365 | 9,073 | 15,939 | 40,480 | |||||||
Class C | N/A | N/A | 2,776 | N/A | N/A | N/A | N/A |
Shareholder Servicing Agent – MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the funds for its services as shareholder servicing agent calculated as a percentage of the average daily net assets of each fund as determined periodically under the supervision of the fund’s Board of Trustees. For the year ended March 31, 2008, each fund paid MFSC the following fee, which equated to the following annual percentage of each fund's average daily net assets.
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||||
Expenses Paid | $30,855 | $52,820 | $165,399 | $26,424 | $21,996 | $52,665 | $87,976 | |||||||
Percentage of average daily net assets | 0.0376% | 0.0387% | 0.0390% | 0.0395% | 0.0385% | 0.0419% | 0.0407% |
MFSC also receives payment from the funds for out-of-pocket expenses, sub-accounting and other shareholder servicing costs which may be paid to affiliated and unaffiliated service providers. For the year ended March 31, 2008, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to the following:
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
$28,681 | $36,836 | $103,475 | $21,372 | $19,208 | $42,330 | $54,412 |
Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the funds. Under an administrative services agreement, the funds partially reimburse MFS the costs incurred to provide these services. Each fund is charged a fixed amount plus a fee based on average daily net assets. Each fund’s annual fixed amount is $17,500. The administrative services fee incurred for the year ended March 31, 2008 was equivalent to the following annual effective rates of each fund's average daily net assets.
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
0.0273% | 0.0225% | 0.0176% | 0.0302% | 0.0327% | 0.0232% | 0.0198% |
Trustees’ and Officers’ Compensation – Each fund pays compensation to independent trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. The funds do not pay compensation directly to trustees or officers of each fund who are also officers of the investment adviser, all of whom receive remuneration for their services to the funds from MFS. Certain officers and trustees of the funds are officers or directors of MFS, MFD, and MFSC.
Each fund has an unfunded defined benefit plan for certain retired independent trustees which resulted in the following pension expense for the funds. These amounts are included in independent trustees’ compensation for the year ended March 31, 2008.
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
$784 | $760 | $1,739 | $758 | $775 | $1,511 | $1,535 |
The liability for deferred retirement benefits payable to certain retired independent trustees amounted to the following for each fund at March 31, 2008, and is included in payable for independent trustees’ compensation.
70
Table of Contents
Notes to Financial Statements – continued
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
$9,201 | $8,811 | $18,271 | $8,798 | $10,437 | $13,188 | $13,134 |
Other – These funds and certain other MFS funds (the funds) have entered into a services agreement (the Agreement) which provides for payment of fees by the funds to Tarantino LLC in return for the provision of services of an Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an officer of the funds and the sole member of Tarantino LLC. The funds can terminate the Agreement with Tarantino LLC at any time under the terms of the Agreement. For the year ended March 31, 2008, the fee paid to Tarantino LLC amounted to the following:
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
$537 | $885 | $2,742 | $433 | $373 | $815 | $1,404 |
MFS has agreed to reimburse the funds for a portion of the payments made by each fund to Tarantino LLC in the following amounts, which are shown as a reduction of total expenses in the Statement of Operations. Additionally, MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO.
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||
$386 | $637 | $1,989 | $317 | $269 | $593 | $1,015 |
(4) | Portfolio Securities |
Purchases and sales of investments, other than U.S. government securities, purchased option transactions, and short-term obligations, were as follows:
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||||
Purchases | $14,660,934 | $14,306,526 | $129,151,298 | $4,967,557 | $15,405,660 | $9,462,078 | $43,984,299 | |||||||
Sales | $22,454,065 | $12,991,334 | $134,516,581 | $23,267,732 | $20,570,259 | $24,199,870 | $59,025,434 |
(5) | Shares of Beneficial Interest |
Each fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest. Transactions in each fund’s shares were as follows:
Alabama Fund | Arkansas Fund | |||||||||||||||||||||||||
Year ended 3/31/08 | Year ended 3/31/07 | Year ended 3/31/08 | Year ended 3/31/07 | |||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Shares sold | ||||||||||||||||||||||||||
Class A | 720,517 | $7,442,142 | 669,802 | $7,025,464 | 2,540,613 | $25,101,778 | 1,572,202 | $15,852,374 | ||||||||||||||||||
Class B | 29,692 | 305,818 | 29,502 | 309,032 | 19,742 | 196,164 | 44,510 | 445,846 | ||||||||||||||||||
750,209 | $7,747,960 | 699,304 | $7,334,496 | 2,560,355 | $25,297,942 | 1,616,712 | $16,298,220 | |||||||||||||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||||||||||||||||
Class A | 199,746 | $2,061,403 | 195,465 | $2,049,643 | 357,912 | $3,558,911 | 309,341 | $3,114,374 | ||||||||||||||||||
Class B | 22,941 | 236,789 | 27,098 | 284,136 | 18,115 | 180,427 | 22,326 | 224,998 | ||||||||||||||||||
222,687 | $2,298,192 | 222,563 | $2,333,779 | 376,027 | $3,739,338 | 331,667 | $3,339,372 | |||||||||||||||||||
Shares reacquired | ||||||||||||||||||||||||||
Class A | (944,652 | ) | $(9,737,337 | ) | (917,325 | ) | $(9,608,003 | ) | (1,366,949 | ) | $(13,585,450 | ) | (1,396,838 | ) | $(14,049,706 | ) | ||||||||||
Class B | (208,336 | ) | (2,142,917 | ) | (344,019 | ) | (3,598,864 | ) | (243,187 | ) | (2,430,674 | ) | (235,505 | ) | (2,374,691 | ) | ||||||||||
(1,152,988 | ) | $(11,880,254 | ) | (1,261,344 | ) | $(13,206,867 | ) | (1,610,136 | ) | $(16,016,124 | ) | (1,632,343 | ) | $(16,424,397 | ) | |||||||||||
Net change | ||||||||||||||||||||||||||
Class A | (24,389 | ) | $(233,792 | ) | (52,058 | ) | $(532,896 | ) | 1,531,576 | $15,075,239 | 484,705 | $4,917,042 | ||||||||||||||
Class B | (155,703 | ) | (1,600,310 | ) | (287,419 | ) | (3,005,696 | ) | (205,330 | ) | (2,054,083 | ) | (168,669 | ) | (1,703,847 | ) | ||||||||||
(180,092 | ) | $(1,834,102 | ) | (339,477 | ) | $(3,538,592 | ) | 1,326,246 | $13,021,156 | 316,036 | $3,213,195 |
71
Table of Contents
Notes to Financial Statements – continued
California Fund | ||||||||||||
Year ended 3/31/08 | Year ended 3/31/07 | |||||||||||
Shares | Amount | Shares | Amount | |||||||||
Shares sold | ||||||||||||
Class A | 8,427,658 | $48,506,794 | 19,060,380 | $112,028,736 | ||||||||
Class B | 251,222 | 1,436,627 | 439,370 | 2,576,697 | ||||||||
Class C | 938,006 | 5,406,580 | 682,033 | 4,026,468 | ||||||||
9,616,886 | $55,350,001 | 20,181,783 | $118,631,901 | |||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||
Class A | 1,563,939 | $8,988,442 | 1,284,059 | $7,531,550 | ||||||||
Class B | 156,996 | 902,995 | 204,868 | 1,201,571 | ||||||||
Class C | 104,801 | 604,267 | 106,824 | 628,361 | ||||||||
1,825,736 | $10,495,704 | 1,595,751 | $9,361,482 | |||||||||
Shares reacquired | ||||||||||||
Class A | (11,372,836 | ) | $(65,227,714 | ) | (7,938,517 | ) | $(46,583,688 | ) | ||||
Class B | (2,801,462 | ) | (16,132,561 | ) | (2,623,694 | ) | (15,379,345 | ) | ||||
Class C | (1,215,145 | ) | (7,025,959 | ) | (724,167 | ) | (4,258,879 | ) | ||||
(15,389,443 | ) | $(88,386,234 | ) | (11,286,378 | ) | $(66,221,912 | ) | |||||
Net change | ||||||||||||
Class A | (1,381,239 | ) | $(7,732,478 | ) | 12,405,922 | $72,976,598 | ||||||
Class B | (2,393,244 | ) | (13,792,939 | ) | (1,979,456 | ) | (11,601,077 | ) | ||||
Class C | (172,338 | ) | (1,015,112 | ) | 64,690 | 395,950 | ||||||
(3,946,821 | ) | $(22,540,529 | ) | 10,491,156 | $61,771,471 |
Florida Fund | Georgia Fund | |||||||||||||||||||||||||
Year ended 3/31/08 | Year ended 3/31/07 | Year ended 3/31/08 | Year ended 3/31/07 | |||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Shares sold | ||||||||||||||||||||||||||
Class A | 384,575 | $3,804,683 | 628,039 | $6,315,187 | 329,946 | $3,530,335 | 432,423 | $4,704,786 | ||||||||||||||||||
Class B | 34,879 | 343,904 | 51,412 | 517,499 | 20,684 | 222,024 | 25,557 | 278,353 | ||||||||||||||||||
419,454 | $4,148,587 | 679,451 | $6,832,686 | 350,630 | $3,752,359 | 457,980 | $4,983,139 | |||||||||||||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||||||||||||||||
Class A | 129,770 | $1,285,028 | 150,268 | $1,515,757 | 121,134 | $1,297,447 | 131,267 | $1,424,086 | ||||||||||||||||||
Class B | 15,409 | 152,671 | 21,190 | 213,659 | 14,650 | 157,497 | 16,436 | 178,906 | ||||||||||||||||||
145,179 | $1,437,699 | 171,458 | $1,729,416 | 135,784 | $1,454,944 | 147,703 | $1,602,992 | |||||||||||||||||||
Shares reacquired | ||||||||||||||||||||||||||
Class A | (1,478,169 | ) | $(14,612,305 | ) | (1,476,778 | ) | $(14,895,683 | ) | (513,295 | ) | $(5,486,709 | ) | (636,783 | ) | $(6,903,492 | ) | ||||||||||
Class B | (354,133 | ) | (3,514,495 | ) | (480,511 | ) | (4,837,458 | ) | (152,709 | ) | (1,641,560 | ) | (195,213 | ) | (2,121,928 | ) | ||||||||||
(1,832,302 | ) | $(18,126,800 | ) | (1,957,289 | ) | $(19,733,141 | ) | (666,004 | ) | $(7,128,269 | ) | (831,996 | ) | $(9,025,420 | ) | |||||||||||
Net change | ||||||||||||||||||||||||||
Class A | (963,824 | ) | $(9,522,594 | ) | (698,471 | ) | $(7,064,739 | ) | (62,215 | ) | $(658,927 | ) | (73,093 | ) | $(774,620 | ) | ||||||||||
Class B | (303,845 | ) | (3,017,920 | ) | (407,909 | ) | (4,106,300 | ) | (117,375 | ) | (1,262,039 | ) | (153,220 | ) | (1,664,669 | ) | ||||||||||
(1,267,669 | ) | $(12,540,514 | ) | (1,106,380 | ) | $(11,171,039 | ) | (179,590 | ) | $(1,920,966 | ) | (226,313 | ) | $(2,439,289 | ) |
72
Table of Contents
Notes to Financial Statements – continued
Maryland Fund | Massachusetts Fund | |||||||||||||||||||||||||
Year ended 3/31/08 | Year ended 3/31/07 | Year ended 3/31/08 | Year ended 3/31/07 | |||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||
Shares sold | ||||||||||||||||||||||||||
Class A | 735,024 | $8,138,965 | 999,185 | $11,309,806 | 2,277,879 | $25,272,437 | 1,205,445 | $13,563,508 | ||||||||||||||||||
Class B | 25,216 | 279,696 | 89,512 | 1,009,393 | 74,745 | 829,213 | 113,872 | 1,284,027 | ||||||||||||||||||
760,240 | $8,418,661 | 1,088,697 | $12,319,199 | 2,352,624 | $26,101,650 | 1,319,317 | $14,847,535 | |||||||||||||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||||||||||||||||
Class A | 274,144 | $3,039,655 | 280,526 | $3,171,970 | 429,774 | $4,768,020 | 394,127 | $4,439,231 | ||||||||||||||||||
Class B | 25,978 | 288,053 | 37,398 | 422,520 | 61,212 | 680,590 | 69,026 | 778,775 | ||||||||||||||||||
300,122 | $3,327,708 | 317,924 | $3,594,490 | 490,986 | $5,448,610 | 463,153 | $5,218,006 | |||||||||||||||||||
Shares reacquired | ||||||||||||||||||||||||||
Class A | (1,826,013 | ) | $(20,251,193 | ) | (1,101,793 | ) | $(12,451,798 | ) | (2,121,192 | ) | $(23,539,832 | ) | (2,349,203 | ) | $(26,419,103 | ) | ||||||||||
Class B | (391,057 | ) | (4,333,232 | ) | (529,716 | ) | (5,988,774 | ) | (696,230 | ) | (7,733,519 | ) | (680,034 | ) | (7,664,911 | ) | ||||||||||
(2,217,070 | ) | $(24,584,425 | ) | (1,631,509 | ) | $(18,440,572 | ) | (2,817,422 | ) | $(31,273,351 | ) | (3,029,237 | ) | $(34,084,014 | ) | |||||||||||
Net change | ||||||||||||||||||||||||||
Class A | (816,845 | ) | $(9,072,573 | ) | 177,918 | $2,029,978 | 586,461 | $6,500,625 | (749,631 | ) | $(8,416,364 | ) | ||||||||||||||
Class B | (339,863 | ) | (3,765,483 | ) | (402,806 | ) | (4,556,861 | ) | (560,273 | ) | (6,223,716 | ) | (497,136 | ) | (5,602,109 | ) | ||||||||||
(1,156,708 | ) | $(12,838,056 | ) | (224,888 | ) | $(2,526,883 | ) | 26,188 | $276,909 | (1,246,767 | ) | $(14,018,473 | ) |
(6) | Line of Credit |
Each fund and other funds managed by MFS participate in a $1 billion unsecured committed line of credit provided by a syndication of banks under a credit agreement. In addition, these funds and other funds managed by MFS have established uncommitted borrowing arrangements with certain banks. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the Federal Reserve funds rate plus 0.30%. In addition, a commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds at the end of each calendar quarter. For the year ended March 31, 2008, each fund's commitment fee and interest expense were as follows, and are included in miscellaneous expense on the Statements of Operations.
Alabama Fund | Arkansas Fund | California Fund | Florida Fund | Georgia Fund | Maryland Fund | Massachusetts Fund | ||||||||
Commitment Fee | $270 | $480 | $1,722 | $215 | $156 | $445 | $707 | |||||||
Interest Expense | — | — | — | — | — | — | — |
73
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and the Shareholders of MFS Municipal Series Trust:
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of MFS Alabama Municipal Bond Fund, MFS Arkansas Municipal Bond Fund, MFS California Municipal Bond Fund, MFS Florida Municipal Bond Fund, MFS Georgia Municipal Bond Fund, MFS Maryland Municipal Bond Fund and MFS Massachusetts Municipal Bond Fund, certain of the portfolios constituting MFS Municipal Series Trust (the “Trust”) as of March 31, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2008, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the aforementioned portfolios of MFS Municipal Series Trust as of March 31, 2008, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 15, 2008
74
Table of Contents
TRUSTEES AND OFFICERS — IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust, as of May 1, 2008, are listed below, together with their principal occupations during the past five years. (Their titles may have varied during that period.) The address of each Trustee and officer is 500 Boylston Street, Boston, Massachusetts 02116.
Name, Date of Birth | Position(s) Held | Trustee/Officer Since (h) | Principal Occupations During the Past Five Years & | |||
INTERESTED TRUSTEES | ||||||
Robert J. Manning (k) (born 10/20/63) | Trustee | February 2004 | Massachusetts Financial Services Company, Chief Executive Officer, President, Chief Investment Officer and Director | |||
Robert C. Pozen (k) (born 8/08/46) | Trustee | February 2004 | Massachusetts Financial Services Company, Chairman (since February 2004); Harvard Business School (education), Senior Lecturer (since 2008); Secretary of Economic Affairs, The Commonwealth of Massachusetts (January 2002 to December 2002); Fidelity Investments, Vice Chairman (June 2000 to December 2001); Fidelity Management & Research Company (investment adviser), President (March 1997 to July 2001); Bell Canada Enterprises (telecommunications), Director; Medtronic, Inc. (medical technology), Director; Telesat (satellite communications), Director (until 2007) | |||
INDEPENDENT TRUSTEES | ||||||
J. Atwood Ives (born 5/01/36) | Trustee and Chair of Trustees | February 1992 | Private investor; KeySpan Corporation (energy related services), Director until 2004; Woodstock Corporation (investment advisory firm), Director until 2003 | |||
Robert E. Butler (n) (born 11/29/41) | Trustee | January 2006 | Consultant – regulatory and compliance matters (since July 2002); PricewaterhouseCoopers LLP (professional services firm), Partner (until 2002) | |||
Lawrence H. Cohn, M.D. (born 3/11/37) | Trustee | August 1993 | Brigham and Women’s Hospital, Chief of Cardiac Surgery (2005); Harvard Medical School, Professor of Cardiac Surgery; Physician Director of Medical Device Technology for Partners HealthCare | |||
David H. Gunning (born 5/30/42) | Trustee | January 2004 | Retired; Cleveland-Cliffs Inc. (mining products and service provider), Vice Chairman/Director (until May 2007); Portman Limited (mining), Director (since 2005); Encinitos Ventures (private investment company), Principal (1997 to April 2001); Lincoln Electric Holdings, Inc. (welding equipment manufacturer), Director | |||
William R. Gutow (born 9/27/41) | Trustee | December 1993 | Private investor and real estate consultant (since 1998); Capital Entertainment Management Company (video franchise), Vice Chairman (since 1998); Texas Donuts (donut franchise), Vice Chairman (since 2007); Atlantic Coast Tan (tanning salons), Vice Chairman (until 2007) | |||
Michael Hegarty (born 12/21/44) | Trustee | December 2004 | Retired; AXA Financial (financial services and insurance), Vice Chairman and Chief Operating Officer (until May 2001); The Equitable Life Assurance Society (insurance), President and Chief Operating Officer (until May 2001) | |||
Lawrence T. Perera (born 6/23/35) | Trustee | July 1981 | Hemenway & Barnes (attorneys), Partner | |||
J. Dale Sherratt (born 9/23/38) | Trustee | August 1993 | Insight Resources, Inc. (acquisition planning specialists), President; Wellfleet Investments (investor in health care companies), Managing General Partner (since 1993); Cambridge Nutraceuticals (professional nutritional products), Chief Executive Officer (until May 2001) | |||
Laurie J. Thomsen (born 8/05/57) | Trustee | March 2005 | New Profit, Inc. (venture philanthropy), Partner (since 2006); Private investor; Prism Venture Partners (venture capital), Co-founder and General Partner (until June 2004); The Travelers Companies (commercial property liability insurance), Director | |||
Robert W. Uek (born 5/18/41) | Trustee | January 2006 | Retired (since 1999); PricewaterhouseCoopers LLP (professional services firm), Partner (until 1999); Consultant to investment company industry (since 2000); TT International Funds (mutual fund complex), Trustee (2000 until 2005); Hillview Investment Trust II Funds (mutual fund complex), Trustee (2000 until 2005) |
75
Table of Contents
Trustees and Officers – continued
Name, Date of Birth | Position(s) Held | Trustee/Officer Since (h) | Principal Occupations During the Past Five Years & | |||
OFFICERS | ||||||
Robert J. Manning (k) (born 10/20/63) | President | March 2008 | Massachusetts Financial Services Company, Chief Executive Officer, President, Chief Investment Officer and Director | |||
Maria F. Dwyer (k) (born 12/01/58) | Treasurer | March 2008 | Massachusetts Financial Services Company, Executive Vice President and Chief Regulatory Officer (since March 2004) Chief Compliance Officer (since December 2006); Fidelity Management & Research Company, Vice President (prior to March 2004); Fidelity Group of Funds, President and Treasurer (prior to March 2004); MFS Group of Funds, President (November 2005 – March 2008) | |||
Christopher R. Bohane (k) (born 1/18/74) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since April 2003); Kirkpatrick & Lockhart LLP (law firm), Associate (prior to April 2003) | |||
Ethan D. Corey (k) (born 11/21/63) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since April 2006); Special Counsel (prior to April 2006); Dechert LLP (law firm), Counsel (prior to December 2004) | |||
David L. DiLorenzo (k) (born 8/10/68) | Assistant Treasurer | July 2005 | Massachusetts Financial Services Company, Vice President (since June 2005); JP Morgan Investor Services, Vice President (prior to June 2005) | |||
Timothy M. Fagan (k) (born 7/10/68) | Assistant Secretary and Assistant Clerk | September 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since September 2005); John Hancock Advisers, LLC, Vice President and Chief Compliance Officer (September 2004 to August 2005), Senior Attorney (prior to September 2004); John Hancock Group of Funds, Vice President and Chief Compliance Officer (September 2004 to December 2004) | |||
Mark D. Fischer (k) (born 10/27/70) | Assistant Treasurer | July 2005 | Massachusetts Financial Services Company, Vice President (since May 2005); JP Morgan Investment Management Company, Vice President (prior to May 2005) | |||
Brian E. Langenfeld (k) (born 3/07/73) | Assistant Secretary and Assistant Clerk | June 2006 | Massachusetts Financial Services Company, Assistant Vice President and Counsel (since May 2006); John Hancock Advisers, LLC, Assistant Vice President and Counsel (May 2005 to April 2006); John Hancock Advisers, LLC, Attorney and Assistant Secretary (prior to May 2005) | |||
Ellen Moynihan (k) (born 11/13/57) | Assistant Treasurer | April 1997 | Massachusetts Financial Services Company, Senior Vice President | |||
Susan S. Newton (k) (born 3/07/50) | Assistant Secretary and Assistant Clerk | May 2005 | Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since April 2005); John Hancock Advisers, LLC, Senior Vice President, Secretary and Chief Legal Officer (prior to April 2005); John Hancock Group of Funds, Senior Vice President, Secretary and Chief Legal Officer (prior to April 2005) | |||
Susan A. Pereira (k) (born 11/05/70) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since June 2004); Bingham McCutchen LLP (law firm), Associate (prior to June 2004) | |||
Mark N. Polebaum (k) (born 5/01/52) | Secretary and Clerk | January 2006 | Massachusetts Financial Services Company, Executive Vice President, General Counsel and Secretary (since January 2006); Wilmer Cutler Pickering Hale and Dorr LLP (law firm), Partner (prior to January 2006) | |||
Frank L. Tarantino (born 3/07/44) | Independent Chief Compliance Officer | June 2004 | Tarantino LLC (provider of compliance services), Principal (since June 2004); CRA Business Strategies Group (consulting services), Executive Vice President (April 2003 to June 2004); David L. Babson & Co. (investment adviser), Managing Director, Chief Administrative Officer and Director (prior to March 2003) | |||
Richard S. Weitzel (k) | Assistant Secretary and Assistant Clerk | October 2007 | Massachusetts Financial Services Company, Vice President and Assistant General Counsel (since 2007); Vice President and Senior Counsel (since May 2004); Massachusetts Department of Business and Technology, General Counsel (February 2003 to April 2004); Massachusetts Office of the Attorney General, Assistant Attorney General (April 2001 to February 2003); Ropes and Gray, Associate (prior to April 2001) | |||
James O. Yost (k) (born 6/12/60) | Assistant Treasurer | September 1990 | Massachusetts Financial Services Company, Senior Vice President |
(h) | Date first appointed to serve as Trustee/officer of an MFS fund. Each Trustee has served continuously since appointment unless indicated otherwise. |
(j) | Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”). |
(k) | “Interested person” of the Trust within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act), which is the principal federal law governing investment companies like the fund, as a result of position with MFS. The address of MFS is 500 Boylston Street, Boston, Massachusetts 02116. |
(n) | In 2004 and 2005, Mr. Butler provided consulting services to the independent compliance consultant retained by MFS pursuant to its settlement with the SEC concerning market timing and related matters. The terms of that settlement required that compensation and expenses related to the independent compliance consultant be borne exclusively by MFS and, therefore, MFS paid Mr. Butler for the services he rendered to the independent compliance consultant. In 2004 and 2005, MFS paid Mr. Butler a total of $351,119.29. |
76
Table of Contents
Trustees and Officers – continued
The Trust held a shareholders’ meeting in 2005 to elect Trustees, and will hold a shareholders’ meeting at least once every five years thereafter, to elect Trustees.
Each Trustee (except Mr. Butler and Mr. Uek) has been elected by shareholders and each Trustee and officer holds office until his or her successor is chosen and qualified or until his or her earlier death, resignation, retirement or removal. Messrs. Butler, Gutow, Sherratt and Uek and Ms. Thomsen are members of the Trust’s Audit Committee.
Each of the Trust’s Trustees and officers holds comparable positions with certain other funds of which MFS or a subsidiary is the investment adviser or distributor, and, in the case of the officers, with certain affiliates of MFS. As of January 1, 2008, the Trustees served as board members of 100 funds within the MFS Family of Funds.
The Statement of Additional Information contains further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.
Investment Adviser Massachusetts Financial Services Company 500 Boylston Street, Boston, MA 02116-3741 Distributor MFS Fund Distributors, Inc. 500 Boylston Street, Boston, MA 02116-3741 Portfolio Manager Michael Dawson | Custodian JPMorgan Chase Bank One Chase Manhattan Plaza, New York, NY 10081
Independent Registered Public Accounting Firm Deloitte & Touche LLP 200 Berkeley Street, Boston, MA 02116 |
77
Table of Contents
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
A discussion regarding the Board’s most recent review and renewal of each Fund’s investment advisory agreement is available by clicking on the fund’s name under “Select a fund” on the MFS Web site (mfs.com).
PROXY VOTING POLICIES AND INFORMATION
A general description of the MFS funds’ proxy voting policies and procedures is available without charge, upon request, by calling 1-800-225-2606, by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.
Information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
The fund will file a complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q may be reviewed and copied at the:
Public Reference Room
Securities and Exchange Commission
100 F Street, NE, Room 1580
Washington, D.C. 20549
Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. The fund’s Form N-Q is available on the EDGAR database on the Commission’s Internet Web site at http://www.sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section at the above address.
A shareholder can also obtain the quarterly portfolio holdings report at mfs.com.
FEDERAL TAX INFORMATION (unaudited)
The funds will notify shareholders of amounts for use in preparing 2008 income tax forms in January 2009. The following information is provided pursuant to provisions of the Internal Revenue Code.
The funds below designate the following amounts as capital gain dividends paid during the fiscal year.
Capital Gains | ||
Alabama Fund | $116,645 | |
Arkansas Fund | 87,527 | |
Florida Fund | 28,690 | |
Georgia Fund | 29,625 | |
Maryland Fund | 200,156 | |
Massachusetts Fund | 603,198 |
Of the dividends paid from net investment income during the fiscal year, the following percentages were designated as exempt interest dividends for federal income tax purposes. If each fund had earned income on private activity bonds, a portion of the dividends paid may be considered a tax preference item for purposes of computing a shareholder’s alternative minimum tax.
Exempt Interest Dividends | ||
Alabama Fund | 100.00% | |
Arkansas Fund | 99.94% | |
California Fund | 100.00% | |
Florida Fund | 100.00% | |
Georgia Fund | 100.00% | |
Maryland Fund | 99.83% | |
Massachusetts Fund | 100.00% |
78
Table of Contents
Privacy is a concern for every investor today. At MFS Investment Management® and the MFS funds, we take this concern very seriously. We want you to understand our policies about the investment products and services that we offer, and how we protect the nonpublic personal information of investors who have a direct relationship with us and our wholly owned subsidiaries.
Throughout our business relationship, you provide us with personal information. We maintain information and records about you, your investments, and the services you use. Examples of the nonpublic personal information we maintain include
Ÿ | data from investment applications and other forms |
Ÿ | share balances and transactional history with us, our affiliates, or others |
Ÿ | facts from a consumer reporting agency |
We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law. We may share nonpublic personal information with third parties or certain of our affiliates in connection with servicing your account or processing your transactions. We may share information with companies or financial institutions that perform marketing services on our behalf or with other financial institutions with which we have joint marketing arrangements, subject to any legal requirements.
Authorization to access your nonpublic personal information is limited to appropriate personnel who provide products, services, or information to you. We maintain physical, electronic, and procedural safeguards to help protect the personal information we collect about you.
If you have any questions about the MFS privacy policy, please call 1-800-225-2606 any business day between 8 a.m. and 8 p.m. Eastern time.
Note: If you own MFS products or receive MFS services in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.
79
Table of Contents
Table of Contents
Table of Contents
Mississippi, New York, North Carolina, Pennsylvania,
South Carolina, Tennessee, Virginia, and West Virginia
CONTACT INFORMATION | BACK COVER |
SIPC Contact Information:
You may obtain information about the Securities Investor Protection Corporation (“SIPC”), including the SIPC Brochure, by contacting SIPC either by telephone (202-371-8300) or by accessing SIPC’s website address (www.sipc.org).
The report is prepared for the general information of shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.
NOT FDIC INSURED • MAY LOSE VALUE •
NO BANK OR CREDIT UNION GUARANTEE • NOT A DEPOSIT •
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF
Table of Contents
Dear Shareholders:
Many of our MFS® fund shareholders have been justifiably concerned, as have most investors around the world, about the state of the global economy. As we enter 2008 we see the market volatility that began in the third quarter of 2007 has intensified.
We here at MFS, and those before us who guided the firm with the same disciplined investment process, have weathered many major economic disruptions over our eight-plus decades of managing clients’ investments. We have managed money through the Great Depression, 14 recessions, as well as numerous market crises caused by wars, political upheavals, and terrorist attacks. MFS remains in business because our investors believe in the integrity of our long-term investment strategy and its proven results.
Worries over market volatility are valid, and investors cannot always expect to see the kind of returns stocks have delivered in the bull markets of past years. Yet we believe our strategy of ADR — allocating across the major asset classes, diversifying within each class, and regularly rebalancing your portfolio to maintain your desired allocation — can help you pursue the highest investment returns while minimizing the effects of market fluctuations.
MFS is a world leader in domestic and global investing. Our team approach is research driven, globally integrated, and balanced. We have 176 investment management professionals located in the Americas, Europe, and Asia who focus on the fundamentals of each security and then integrate our sophisticated quantitative approach.* This collaborative process allows us to find opportunities in any market environment.
I personally would like to thank you for your continued business. We want you to be confident that we are constantly managing our fund offerings with you in mind, while adding new products that can help you to choose what fits your unique financial goals.
Respectfully,
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management®
May 15, 2008
* as of 12/31/07
The opinions expressed in this letter are subject to change, may not be relied upon for investment advice, and no forecasts can be guaranteed.
1
Table of Contents
.
MFS® Mississippi Municipal Bond Fund
Portfolio structure (i)
Top five industries (i) | ||
State & Local Agencies | 18.4% | |
General Obligations – General Purpose | 14.8% | |
Water & Sewer Utility Revenue | 13.5% | |
Healthcare Revenue – Hospitals | 12.7% | |
Universities – Colleges | 11.0% |
Credit quality of bonds (r) | ||
AAA | 60.8% | |
AA | 1.1% | |
A | 15.1% | |
BBB | 18.3% | |
B | 0.1% | |
Not Rated | 4.6% |
Portfolio facts | ||
Average Duration (d)(i) | 7.3 | |
Average Life (i)(m) | 12.6 yrs. | |
Average Maturity (i)(m) | 15.8 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1 |
MFS® New York Municipal Bond Fund
Portfolio structure (i)
Top five industries (i) | ||
Water & Sewer Utility Revenue | 16.6% | |
State & Local Agencies | 13.3% | |
Toll Roads | 12.4% | |
Transportation – Special Tax | 9.5% | |
Healthcare Revenue – Hospitals | 6.7% |
Credit quality of bonds (r) | ||
AAA | 32.6% | |
AA | 24.9% | |
A | 16.7% | |
BBB | 14.0% | |
BB | 0.9% | |
B | 0.9% | |
CCC (o) | 0.0% | |
Not Rated | 10.0% |
Portfolio facts | ||
Average Duration (d)(i) | 8.0 | |
Average Life (i)(m) | 14.9 yrs. | |
Average Maturity (i)(m) | 16.8 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA- | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1 |
MFS® North Carolina Municipal Bond Fund
Portfolio structure (i)
Top five industries (i) | ||
Universities – Colleges | 17.9% | |
Healthcare Revenue – Hospitals | 16.0% | |
Utilities – Municipal Owned | 15.8% | |
Water & Sewer Utility Revenue | 10.7% | |
State & Agency – Other | 6.2% |
Credit quality of bonds (r) | ||
AAA | 45.2% | |
AA | 33.8% | |
A | 4.6% | |
BBB | 9.1% | |
Not Rated | 7.3% |
Portfolio facts | ||
Average Duration (d)(i) | 7.8 | |
Average Life (i)(m) | 13.8 yrs. | |
Average Maturity (i)(m) | 16.3 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1 |
(a) | The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies. |
(d) | Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value. |
(i) | For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable. |
(m) | The average maturity shown is calculated using the final stated maturity on the portfolio’s holdings without taking into account any holdings which have been pre-refunded or pre-paid to an earlier date or which have a mandatory put date prior to the stated maturity. The average life shown takes into account these earlier dates. |
(o) | Less than 0.1%. |
(r) | Each security is assigned a rating from Moody’s Investors Service. If not rated by Moody’s, the rating will be that assigned by Standard & Poor’s. Likewise, if not assigned a rating by Standard & Poor’s, it will be based on the rating assigned by Fitch, Inc. For those portfolios that hold a security which is not rated by any of the three agencies, the security is considered Not Rated. Holdings in U.S. Treasuries and government agency mortgage-backed securities, if any, are included in the “AAA”-rating category. Percentages are based on the total market value of investments as of 3/31/08. |
From time to time “Cash & Other Net Assets” may be negative due to timing of cash receipts and/or equivalent exposure from any derivative holdings.
Percentages are based on net assets as of 3/31/08, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
2
Table of Contents
Portfolio Composition – continued
MFS® Pennsylvania Municipal Bond Fund
Portfolio structure (i)
Top five industries (i) | ||
General Obligations – Schools | 19.3% | |
Healthcare Revenue – Hospitals | 15.3% | |
Universities – Colleges | 12.6% | |
Water & Sewer Utility Revenue | 10.8% | |
General Obligations – General Purpose | 9.1% | |
Credit quality of bonds (r) | ||
AAA | 45.3% | |
AA | 12.6% | |
A | 17.0% | |
BBB | 19.8% | |
BB | 0.9% | |
B | 0.6% | |
Not Rated | 3.8% | |
Portfolio facts | ||
Average Duration (d)(i) | 8.1 | |
Average Life (i)(m) | 14.3 yrs. | |
Average Maturity (i)(m) | 17.1 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA- | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1+ |
MFS® South Carolina Municipal Bond Fund
Portfolio structure (i)
Top five industries (i) | ||
Healthcare Revenue – Hospitals | 18.2% | |
Water & Sewer Utility Revenue | 13.8% | |
Universities – Colleges | 13.1% | |
General Obligations – General Purpose | 11.2% | |
General Obligations – Schools | 10.1% | |
Credit quality of bonds (r) | ||
AAA | 57.3% | |
AA | 9.6% | |
A | 14.8% | |
BBB | 4.9% | |
B | 0.8% | |
Not Rated | 12.6% | |
Portfolio facts | ||
Average Duration (d)(i) | 7.9 | |
Average Life (i)(m) | 16.2 yrs. | |
Average Maturity (i)(m) | 18.0 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1 |
MFS® Tennessee Municipal Bond Fund
Portfolio structure (i)
Top five industries (i) | ||
Healthcare Revenue – Hospitals | 17.9% | |
Water & Sewer Utility Revenue | 15.1% | |
Single Family Housing – State | 11.1% | |
General Obligations – Schools | 8.6% | |
Utilities – Municipal Owned | 7.4% | |
Credit quality of bonds (r) | ||
AAA | 50.0% | |
AA | 27.7% | |
A | 10.9% | |
BBB | 8.7% | |
BB | 0.3% | |
B | 0.2% | |
Not Rated | 2.2% | |
Portfolio facts | ||
Average Duration (d)(i) | 7.7 | |
Average Life (i)(m) | 13.2 yrs. | |
Average Maturity (i)(m) | 17.2 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1 |
(a) | The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies. |
(d) | Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value. |
(i) | For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable. |
(m) | The average maturity shown is calculated using the final stated maturity on the portfolio’s holdings without taking into account any holdings which have been pre-refunded or pre-paid to an earlier date or which have a mandatory put date prior to the stated maturity. The average life shown takes into account these earlier dates. |
(r) | Each security is assigned a rating from Moody’s Investors Service. If not rated by Moody’s, the rating will be that assigned by Standard & Poor’s. Likewise, if not assigned a rating by Standard & Poor’s, it will be based on the rating assigned by Fitch, Inc. For those portfolios that hold a security which is not rated by any of the three agencies, the security is considered Not Rated. Holdings in U.S. Treasuries and government agency mortgage-backed securities, if any, are included in the “AAA”-rating category. Percentages are based on the total market value of investments as of 3/31/08. |
From time to time “Cash & Other Net Assets” may be negative due to timing of cash receipts and/or equivalent exposure from any derivative holdings.
Percentages are based on net assets as of 3/31/08, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
3
Table of Contents
Portfolio Composition – continued
MFS® Virginia Municipal Bond Fund
Portfolio structure (i)
Top five industries (i) | ||
State & Local Agencies | 21.6% | |
Water & Sewer Utility Revenue | 16.3% | |
General Obligations – Improvement | 10.8% | |
Healthcare Revenue – Hospitals | 10.4% | |
Utilities – Municipal Owned | 8.6% | |
Credit quality of bonds (r) | ||
AAA | 50.0% | |
AA | 22.3% | |
A | 7.8% | |
BBB | 7.2% | |
BB | 1.1% | |
B | 1.8% | |
Not Rated | 9.8% | |
Portfolio facts | ||
Average Duration (d)(i) | 7.8 | |
Average Life (i)(m) | 14.4 yrs. | |
Average Maturity (i)(m) | 17.5 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1 |
MFS® West Virginia Municipal Bond Fund
Portfolio structure (i)
Top five industries (i) | ||
State & Local Agencies | 23.5% | |
Universities – Colleges | 17.2% | |
General Obligations – General Purpose | 14.9% | |
Water & Sewer Utility Revenue | 12.0% | |
Healthcare Revenue – Hospitals | 7.4% | |
Credit quality of bonds (r) | ||
AAA | 57.3% | |
AA | 3.8% | |
A | 25.0% | |
BBB | 9.5% | |
B | 0.7% | |
Not Rated | 3.7% | |
Portfolio facts | ||
Average Duration (d)(i) | 7.7 | |
Average Life (i)(m) | 14.6 yrs. | |
Average Maturity (i)(m) | 15.9 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1 |
(a) | The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies. |
(d) | Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value. |
(i) | For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable. |
(m) | The average maturity shown is calculated using the final stated maturity on the portfolio’s holdings without taking into account any holdings which have been pre-refunded or pre-paid to an earlier date or which have a mandatory put date prior to the stated maturity. The average life shown takes into account these earlier dates. |
(r) | Each security is assigned a rating from Moody’s Investors Service. If not rated by Moody’s, the rating will be that assigned by Standard & Poor’s. Likewise, if not assigned a rating by Standard & Poor’s, it will be based on the rating assigned by Fitch, Inc. For those portfolios that hold a security which is not rated by any of the three agencies, the security is considered Not Rated. Holdings in U.S. Treasuries and government agency mortgage-backed securities, if any, are included in the “AAA”-rating category. Percentages are based on the total market value of investments as of 3/31/08. |
From time to time “Cash & Other Net Assets” may be negative due to timing of cash receipts and/or equivalent exposure from any derivative holdings.
Percentages are based on net assets as of 3/31/08, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
4
Table of Contents
Market environment
The U.S. economy and financial markets experienced deterioration and heightened volatility over the reporting period. U.S. economic growth slowed significantly in the fourth quarter of 2007 and the domestic economy continued to be buffeted by headwinds as we entered 2008. These challenges included continued weakness in the housing market, subdued corporate investment, signs of a weaker job market, and a tighter credit environment as banks sought to repair balance sheets. While reasonably resilient, parts of the global economy and financial system experienced some spillover from the U.S. slowdown. Japanese growth slowed over the reporting period and European financial markets were adversely affected by U.S. mortgage and structured product losses.
In the face of this financial and economic turmoil, most global central banks were forced to inject liquidity and to reassess their tightening biases as government bond yields declined and credit spreads widened. Late in the reporting period, the U.S. Federal Reserve Board began an aggressive rate cutting campaign, while the U.S. federal government moved quickly to design a modest fiscal stimulus package. Though the Bank of England and the Bank of Canada also cut rates, the dilemma of rising energy and food prices heightened concerns among central bankers that inflationary expectations might become unhinged.
By the end of the reporting period, bond yields and credit spreads implied market expectations of further financial and economic weakening, as well as continued rate cuts by many global central banks. However, global equity markets recorded only a modest decline from third quarter highs.
Factors that affected performance
During the period, duration(d) positioning relative to the benchmark, the Lehman Brothers Municipal Bond Index, had a neutral effect on relative performance for all funds except the Pennsylvania and South Carolina funds, where the effect was negative, and the Tennessee and Virginia funds, where the effect was positive.
Yield curve(y) positioning had a positive impact on relative performance for all funds, with the exception of the Tennessee and Virginia funds, where the effect was neutral. Where there was a positive impact it was mainly due to the fund’s underweighted exposure to the long end of the curve (represented by bonds with durations of 11- to 25- years or bonds with durations of over 25 years) relative to the benchmark.
Credit quality had a negative effect on all funds except the North Carolina and West Virginia funds, where the effect was neutral, and the South Carolina fund, where the impact was positive.
Notable detractors came from the credit enhanced and education sectors. The credit enhanced sector held back relative returns for the North Carolina, Pennsylvania, South Carolina, and West Virginia funds. This sector did, however, bolster relative results for the Mississippi and Virginia funds. The education sector hurt relative results in the New York, Pennsylvania, and Virginia funds. Also on the positive side, the housing sector had a positive impact on the relative performance of the Mississippi and Virginia funds. This sector did, however, hold back the relative returns of the South Carolina fund.
Respectfully,
Michael Dawson
Portfolio Manager
(d) | Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value. |
(y) | A yield curve graphically depicts the yields of different maturity bonds of the same credit quality and type. A normal yield curve is upward-sloping, with short term-rates lower than long term rates. |
The views expressed in this report are those of the portfolio manager only through the end of the period of the report as stated on the cover and do not necessarily reflect the views of MFS or any other person in the MFS organization. These views are subject to change at any time based on market or other conditions, and MFS disclaims any responsibility to update such views. These views may not be relied upon as investment advice or an indication of trading intent on behalf of any MFS portfolio. References to specific securities are not recommendations of such securities, and may not be representative of any MFS portfolio’s current or future investments.
5
Table of Contents
PERFORMANCE SUMMARY THROUGH 3/31/08
The following charts illustrate a representative class of each fund’s historical performance in comparison to its benchmark. Performance results include the deduction of the maximum applicable sales charge and reflect the percentage change in net asset value, including reinvestment of dividends and capital gains distributions. Each fund’s results have been compared to the Lehman Brothers Municipal Bond Index, a market-value-weighted index representative of the tax-exempt bond market. However, while this index is considered the benchmark for the performance of municipal bond funds, it is comprised of municipal bonds issued nationwide, while each of the funds is limited to investing in the bonds of a particular state. The performance of other share classes will be greater than or less than that of the class depicted below. Benchmark comparisons are unmanaged; do not reflect sales charges, commissions or expenses; and cannot be invested in directly. (See Notes to Performance Summary). It is not possible to invest directly in an index.
Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value fluctuate so your shares, when sold, may be worth more or less than the original cost; current performance may be lower or higher than quoted. The performance shown does not reflect the deduction of taxes, if any, that a shareholder would pay on fund distributions or the redemption of fund shares.
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® Mississippi Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 8/06/92 | 2.21% | 3.70% | 4.61% | ||||||||
B | 9/07/93 | 1.43% | 2.88% | 3.79% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –2.64% | 2.70% | 4.10% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –2.48% | 2.54% | 3.79% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems, Inc. |
(x) | Assuming redemption at the end of the applicable period. |
6
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® New York Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 6/06/88 | 1.84% | 3.50% | 4.51% | ||||||||
B | 9/07/93 | 1.15% | 2.75% | 3.71% | ||||||||
C | 12/11/00 | 1.16% | 2.75% | 3.72% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –3.00% | 2.50% | 4.00% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –2.73% | 2.41% | 3.71% | |||||||||
C With CDSC (1% for 12 months) (x) | 0.19% | 2.75% | 3.72% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems, Inc. |
(x) | Assuming redemption at the end of the applicable period. |
7
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® North Carolina Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 10/31/84 | 0.83% | 3.20% | 4.16% | ||||||||
B | 9/07/93 | 0.17% | 2.52% | 3.47% | ||||||||
C | 1/03/94 | 0.17% | 2.54% | 3.48% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –3.96% | 2.21% | 3.65% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –3.69% | 2.18% | 3.47% | |||||||||
C With CDSC (1% for 12 months) (x) | –0.79% | 2.54% | 3.48% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems, Inc. |
(x) | Assuming redemption at the end of the applicable period. |
8
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® Pennsylvania Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 2/01/93 | 0.87% | 3.63% | 4.79% | ||||||||
B | 9/07/93 | 0.11% | 2.86% | 3.97% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –3.92% | 2.62% | 4.28% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –3.76% | 2.51% | 3.97% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems, Inc. |
(x) | Assuming redemption at the end of the applicable period. |
9
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® South Carolina Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 10/31/84 | 0.62% | 3.28% | 4.14% | ||||||||
B | 9/07/93 | –0.12% | 2.62% | 3.46% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –4.16% | 2.28% | 3.63% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –3.98% | 2.27% | 3.46% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems, Inc. |
(x) | Assuming redemption at the end of the applicable period. |
10
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® Tennessee Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 8/12/88 | 1.38% | 3.25% | 4.14% | ||||||||
B | 9/07/93 | 0.72% | 2.58% | 3.46% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –3.44% | 2.25% | 3.63% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –3.16% | 2.24% | 3.46% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems, Inc. |
(x) | Assuming redemption at the end of the applicable period. |
11
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® Virginia Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 10/31/84 | 1.34% | 3.57% | 4.26% | ||||||||
B | 9/07/93 | 0.68% | 2.90% | 3.58% | ||||||||
C | 1/03/94 | 0.59% | 2.88% | 3.57% |
Comparative benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –3.47% | 2.56% | 3.75% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –3.19% | 2.55% | 3.58% | |||||||||
C With CDSC (1% for 12 months) (x) | –0.38% | 2.88% | 3.57% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems, Inc. |
(x) | Assuming redemption at the end of the applicable period. |
12
Table of Contents
Performance Summary – continued
Growth of a hypothetical $10,000 investment
(For the 10-year period ended 3/31/08)
MFS® West Virginia Municipal Bond Fund
Average annual total returns through 3/31/08
Without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 10/31/84 | 0.35% | 3.04% | 4.04% | ||||||||
B | 9/07/93 | –0.21% | 2.39% | 3.37% |
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
With sales charge
A With Initial Sales Charge (4.75%) | –4.41% | 2.04% | 3.54% | |||||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | –4.06% | 2.05% | 3.37% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems, Inc. |
(x) | Assuming redemption at the end of the applicable period. |
Notes to Performance Summary
Performance results reflect any applicable expense subsidies and waivers in effect during the periods shown. Without such subsidies and waivers the fund’s performance results would be less favorable. Please see the prospectus and financial statements for complete details.
A portion of income may be subject to state, federal, and/or alternative minimum tax. Capital gains, if any, are subject to a capital gains tax.
From time to time the funds may receive proceeds from litigation settlements, without which performance would be lower.
For the MFS New York Municipal Bond Fund only:
Performance for class C shares includes the performance of the fund’s class B shares for periods prior to their offering. This blended class performance has been adjusted to take into account differences in sales loads, if any, applicable to these share classes, but has not been adjusted to take into account differences in class specific operating expenses (such as Rule 12b-1 fees). Compared to performance these share classes would have experienced had they been offered for the entire period, the use of blended performance generally results in higher performance for share classes with higher operating expenses than the share class to which it is blended, and lower performance for share classes with lower operating expenses than the share class to which it is blended.
13
Table of Contents
Fund expenses borne by the shareholders during the period, October 1, 2007 through March 31, 2008
As a shareholder of the funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) on certain purchase or redemption payments, and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the funds and to compare these costs with the ongoing costs of investing in other mutual funds.
These examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period October 1, 2007 through March 31, 2008.
Actual expenses
The first line for each share class in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The second line for each share class in the following tables provides information about hypothetical account values and hypothetical expenses based on each fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line for each share class in the tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
MFS® MISSISSIPPI MUNICIPAL BOND FUND
Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses Paid During Period (p) 10/01/07-3/31/08 | ||||||
A | Actual | 0.76% | $1,000.00 | $1,012.09 | $3.82 | |||||
Hypothetical (h) | 0.76% | $1,000.00 | $1,021.20 | $3.84 | ||||||
B | Actual | 1.52% | $1,000.00 | $1,007.16 | $7.63 | |||||
Hypothetical (h) | 1.52% | $1,000.00 | $1,017.40 | $7.67 |
MFS® NEW YORK MUNICIPAL BOND FUND
Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses Paid During Period (p) 10/01/07-3/31/08 | ||||||
A | Actual | 0.98% | $1,000.00 | $1,005.56 | $4.91 | |||||
Hypothetical (h) | 0.98% | $1,000.00 | $1,020.10 | $4.95 | ||||||
B | Actual | 1.72% | $1,000.00 | $1,001.72 | $8.61 | |||||
Hypothetical (h) | 1.72% | $1,000.00 | $1,016.40 | $8.67 | ||||||
C | Actual | 1.73% | $1,000.00 | $1,001.75 | $8.66 | |||||
Hypothetical (h) | 1.73% | $1,000.00 | $1,016.35 | $8.72 |
(h) | 5% class return per year before expenses. |
(p) | Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
14
Table of Contents
Expense Tables – continued
MFS® NORTH CAROLINA MUNICIPAL BOND FUND
Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses Paid During Period (p) 10/01/07-3/31/08 | ||||||
A | Actual | 1.07% | $1,000.00 | $999.60 | $5.35 | |||||
Hypothetical (h) | 1.07% | $1,000.00 | $1,019.65 | $5.40 | ||||||
B | Actual | 1.72% | $1,000.00 | $996.28 | $8.58 | |||||
Hypothetical (h) | 1.72% | $1,000.00 | $1,016.40 | $8.67 | ||||||
C | Actual | 1.72% | $1,000.00 | $996.30 | $8.58 | |||||
Hypothetical (h) | 1.72% | $1,000.00 | $1,016.40 | $8.67 |
MFS® PENNSYLVANIA MUNICIPAL BOND FUND
Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses Paid During Period (p) 10/01/07-3/31/08 | ||||||
A | Actual | 0.76% | $1,000.00 | $1,000.47 | $3.80 | |||||
Hypothetical (h) | 0.76% | $1,000.00 | $1,021.20 | $3.84 | ||||||
B | Actual | 1.50% | $1,000.00 | $996.77 | $7.49 | |||||
Hypothetical (h) | 1.50% | $1,000.00 | $1,017.50 | $7.57 |
MFS® SOUTH CAROLINA MUNICIPAL BOND FUND
Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses Paid During Period (p) 10/01/07-3/31/08 | ||||||
A | Actual | 1.06% | $1,000.00 | $998.12 | $5.30 | |||||
Hypothetical (h) | 1.06% | $1,000.00 | $1,019.70 | $5.35 | ||||||
B | Actual | 1.71% | $1,000.00 | $994.83 | $8.53 | |||||
Hypothetical (h) | 1.71% | $1,000.00 | $1,016.45 | $8.62 |
MFS® TENNESSEE MUNICIPAL BOND FUND
Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses Paid During Period (p) 10/01/07-3/31/08 | ||||||
A | Actual | 0.89% | $1,000.00 | $1,002.21 | $4.45 | |||||
Hypothetical (h) | 0.89% | $1,000.00 | $1,020.55 | $4.50 | ||||||
B | Actual | 1.54% | $1,000.00 | $998.92 | $7.70 | |||||
Hypothetical (h) | 1.54% | $1,000.00 | $1,017.30 | $7.77 |
(h) | 5% class return per year before expenses. |
(p) | Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
15
Table of Contents
Expense Tables – continued
MFS® VIRGINIA MUNICIPAL BOND FUND
Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses Paid During Period (p) 10/01/07-3/31/08 | ||||||
A | Actual | 1.02% | $1,000.00 | $1,004.35 | $5.11 | |||||
Hypothetical (h) | 1.02% | $1,000.00 | $1,019.90 | $5.15 | ||||||
B | Actual | 1.67% | $1,000.00 | $1,000.16 | $8.35 | |||||
Hypothetical (h) | 1.67% | $1,000.00 | $1,016.65 | $8.42 | ||||||
C | Actual | 1.67% | $1,000.00 | $1,000.17 | $8.35 | |||||
Hypothetical (h) | 1.67% | $1,000.00 | $1,016.65 | $8.42 |
MFS® WEST VIRGINIA MUNICIPAL BOND FUND
Share Class | Annualized Expense Ratio | Beginning Account Value 10/01/07 | Ending Account Value 3/31/08 | Expenses Paid During Period (p) 10/01/07-3/31/08 | ||||||
A | Actual | 1.07% | $1,000.00 | $995.30 | $5.34 | |||||
Hypothetical (h) | 1.07% | $1,000.00 | $1,019.65 | $5.40 | ||||||
B | Actual | 1.72% | $1,000.00 | $992.04 | $8.57 | |||||
Hypothetical (h) | 1.72% | $1,000.00 | $1,016.40 | $8.67 |
(h) | 5% class return per year before expenses. |
(p) | Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
16
Table of Contents
3/31/08
MFS® MISSISSIPPI MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 98.7% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport and Port Revenue - 1.6% | ||||||
Jackson, MS, Municipal Airport Authority, Airport Rev., “A”, AMBAC, 5%, 2031 | $ | 1,510,000 | $ | 1,463,320 | ||
General Obligations - General Purpose - 14.7% | ||||||
Commonwealth of Puerto Rico, “A”, 5.25%, 2027 | $ | 455,000 | $ | 445,258 | ||
Commonwealth of Puerto Rico, Public Improvement, FGIC, 5.5%, 2016 | 6,220,000 | 6,604,396 | ||||
Hinds County, MS, MBIA, 6.25%, 2010 | 1,660,000 | 1,777,030 | ||||
Hinds County, MS, MBIA, 6.25%, 2011 | 1,285,000 | 1,408,823 | ||||
Mississippi Development Bank Special Obligations (Jackson, Mississippi) FSA, 5.25%, 2020 | 620,000 | 681,113 | ||||
Mississippi Development Bank Special Obligations, Harrison County Mississippi Highway Construction, “N”, FGIC, 5%, 2026 | 1,000,000 | 989,490 | ||||
Puerto Rico Commonwealth Puerto Rico, “A”, 5.25%, 2016 (c) | 345,000 | 390,799 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 335,000 | 367,592 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2031 | 370,000 | 392,045 | ||||
$ | 13,056,546 | |||||
General Obligations - Improvement - 3.4% | ||||||
Guam Government, “A”, 5.25%, 2037 | $ | 155,000 | $ | 131,691 | ||
Mississippi Capital Improvement, “I”, 6%, 2009 (c) | 1,000,000 | 1,061,320 | ||||
Mississippi Development Bank Special Obligation (MS Project), 5%, 2027 | 250,000 | 219,315 | ||||
Puerto Rico Municipal Finance Agency, FSA, 5.5%, 2009 (c)(u) | 1,500,000 | 1,584,450 | ||||
$ | 2,996,776 | |||||
General Obligations - Schools - 5.7% | ||||||
Biloxi, MS, Public School District, MBIA, 5%, 2021 | $ | 1,000,000 | $ | 1,016,100 | ||
Jackson, MS, Public School District, “B”, AMBAC, 5.75%, 2010 (c) | 1,000,000 | 1,083,930 | ||||
Jackson, MS, Public School District, “B”, AMBAC, 0%, 2022 | 2,000,000 | 928,240 | ||||
Jackson, MS, Public School District, “B”, AMBAC, 0%, 2023 | 1,000,000 | 433,240 | ||||
Madison County, MS, School District, “A”, MBIA, 5.875%, 2009 (c) | 1,500,000 | 1,580,880 | ||||
$ | 5,042,390 | |||||
Healthcare Revenue - Hospitals - 12.5% | ||||||
Corinth & Alcorn County, MS, Hospital Rev. (Magnolia Regional Health Center), 5.5%, 2021 | $ | 400,000 | $ | 389,236 | ||
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), MBIA, 6.125%, 2015 | 2,250,000 | 2,255,895 | ||||
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), MBIA, 6.2%, 2018 | $ | 1,000,000 | $ | 1,002,680 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), 5.75%, 2031 | 500,000 | 500,535 | ||||
Hinds County, MS, Rev. (Methodist Hospital & Rehabilitation), AMBAC, 5.6%, 2012 | 1,440,000 | 1,492,200 | ||||
Medical Center, Educational Building Corp. Rev. (University of Mississippi Medical Center), “B”, AMBAC, 5.5%, 2023 | 1,000,000 | 1,073,280 | ||||
Mississippi Development Bank Special Obligation (Covington Hospital Nursing Home), “A”, AMBAC, 5%, 2031 | 500,000 | 499,960 | ||||
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist Memorial Healthcare), “B-1”, 5%, 2024 | 1,000,000 | 982,380 | ||||
Mississippi Hospital Equipment & Facilities Authority Rev. (Delta Regional Medical Center), MBIA, 5%, 2035 | 1,000,000 | 948,590 | ||||
Mississippi Hospital Equipment & Facilities Authority Rev. (Forrest County General Hospital) FSA, 5.625%, 2011 (c) | 1,000,000 | 1,087,510 | ||||
Mississippi Hospital Equipment & Facilities Authority Rev. Refunding & Improvement, Hospital South Central, 5.25%, 2031 | 500,000 | 434,725 | ||||
Mississippi Hospital Equipment & Facilities Authority Rev., Refunding & Improvement, Southwest Regional Medical Center, 5.5%, 2019 | 250,000 | 250,378 | ||||
Mississippi Hospital Equipment & Facilities Authority, Refunding & Improvement, Southwest Regional Medical Center, 5.75%, 2023 | 250,000 | 250,000 | ||||
$ | 11,167,369 | |||||
Industrial Revenue - Environmental Services - 0.3% | ||||||
Mississippi Business Finance Corp. (Solid Waste Management, Inc.), 4.4%, 2027 (a) | $ | 250,000 | $ | 246,173 | ||
Industrial Revenue - Other - 0.7% | ||||||
Mississippi Business Finance Corp. (Northrop Grumman Ship Systems), 4.55%, 2028 | $ | 500,000 | $ | 434,510 | ||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 210,000 | 205,523 | ||||
$ | 640,033 | |||||
Industrial Revenue - Paper - 2.2% | ||||||
Jones County, MS, Solid Waste Disposal Rev. (International Paper Co.) “A”, 5.8%, 2021 | $ | 500,000 | $ | 510,600 | ||
Lowndes County, MS, Solid Waste Disposal & Pollution Control Rev. (Weyerhaeuser Co.), 6.8%, 2022 | 750,000 | 780,278 | ||||
Warren County, MS, Environmental Improvement Rev. (International Paper Co.), ”A”, 4.4%, 2015 | 750,000 | 696,848 | ||||
$ | 1,987,726 |
17
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Miscellaneous Revenue - Entertainment & Tourism - 1.1% | ||||||
Mississippi Development Bank, Special Obligation (Diamond Lakes Utilities), 6.25%, 2017 | $ | 950,000 | $ | 956,736 | ||
Multi-Family Housing Revenue - 0.1% | ||||||
Mississippi Home Corp., Rev. (Kirkwood Apartments), 6.8%, 2037 | $ | 150,000 | $ | 140,895 | ||
Sales & Excise Tax Revenue - 0.8% | ||||||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | $ | 720,000 | $ | 676,757 | ||
Single Family Housing - State - 4.6% | ||||||
Mississippi Home Corp. Rev., Single Family Rev., “A”, GNMA, 6.3%, 2031 | $ | 170,000 | $ | 171,214 | ||
Mississippi Home Corp. Rev., Single Family Rev., “A-2”, GNMA, 6.5%, 2032 | 225,000 | 232,259 | ||||
Mississippi Home Corp. Rev., Single Family Rev., “A-2”, GNMA, 5.3%, 2023 | 545,000 | 547,294 | ||||
Mississippi Home Corp. Rev., Single Family Rev., “A-2”, GNMA, 6.95%, 2031 | 210,000 | 214,958 | ||||
Mississippi Home Corp. Rev., Single Family Rev., “B”, GNMA, 5.3%, 2035 | 610,000 | 612,568 | ||||
Mississippi Home Corp. Rev., Single Family Rev., “B-2”, GNMA, 6.375%, 2032 | 360,000 | 366,937 | ||||
Mississippi Home Corp. Rev., Single Family Rev., “B-2”, GNMA, 6.45%, 2033 | 375,000 | 386,996 | ||||
Mississippi Home Corp. Rev., Single Family Rev., “C”, GNMA, 4.95%, 2025 | 720,000 | 669,024 | ||||
Mississippi Home Corp. Rev., Single Family Rev., “C-1”, GNMA, 4.7%, 2038 | 995,000 | 900,037 | ||||
$ | 4,101,287 | |||||
State & Local Agencies - 18.2% | ||||||
Lamar County, MS, (Jail Project), MBIA, 5.1%, 2021 | $ | 430,000 | $ | 445,936 | ||
Mississippi Development Bank Special Obligation (Capital Project & Equipment Prepayment), FSA, 5%, 2028 | 1,320,000 | 1,325,716 | ||||
Mississippi Development Bank Special Obligation (Mississippi Highway Construction), 4.75%, 2035 | 1,000,000 | 976,250 | ||||
Mississippi Development Bank Special Obligations (City of Jackson, MS), AMBAC, 4.375%, 2031 | 1,400,000 | 1,308,566 | ||||
Mississippi Development Bank Special Obligations (Correctional Facilities), “A”, AMBAC, 5.125%, 2025 | 1,000,000 | 1,015,720 | ||||
Mississippi Development Bank Special Obligations (DeSoto County Regional Utility Authority), 5.25%, 2031 | 905,000 | 890,601 | ||||
Mississippi Development Bank Special Obligations (Hinds County Public Improvements), FSA, 5.25%, 2015 (c) | 1,110,000 | 1,255,033 | ||||
Mississippi Development Bank Special Obligations (Mississippi, Ltd. Tax Hospital Rev.), 5.1%, 2020 | 1,000,000 | 1,030,510 |
Issuer | Shares/Par | Value ($) | ||||
State & Local Agencies - continued | ||||||
Mississippi Development Bank Special Obligations (Natchez Mississippi Convention Center) AMBAC, 6%, 2013 (c) | $ | 750,000 | $ | 867,180 | ||
Mississippi Development Bank Special Obligations (Public Improvement Board), 5%, 2023 | 750,000 | 720,803 | ||||
Mississippi Development Bank Special Obligations (Southaven, MS, Recreation Facilities), 5.875%, 2009 (c) | 375,000 | 383,719 | ||||
Mississippi Development Bank Special Obligations (Southaven, MS, Recreation Facilities), 6.2%, 2009 (c) | 400,000 | 408,068 | ||||
Mississippi Development Bank Special Obligations (Tunica County Building Project), AMBAC, 5%, 2026 | 1,695,000 | 1,750,359 | ||||
Mississippi Development Bank Special Obligations (Tupelo Fairgrounds), “A”, AMBAC, 5%, 2017 | 785,000 | 810,308 | ||||
Puerto Rico Public Finance Corp., “A”, AMBAC, 5.375%, 2013 (u) | 1,000,000 | 1,093,220 | ||||
Walnut Grove, MS, Correctional Authority, AMBAC, 6%, 2009 (c) | 1,750,000 | 1,891,208 | ||||
$ | 16,173,197 | |||||
Tax - Other - 0.1% | ||||||
Virgin Islands Public Finance Authority Rev., “A”, 5.25%, 2024 | $ | 135,000 | $ | 132,087 | ||
Tobacco - 0.7% | ||||||
Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 | $ | 225,000 | $ | 214,713 | ||
Guam Economic Development Authority Tobacco Settlement, “B”, 5.5%, 2011 (c) | 350,000 | 378,004 | ||||
$ | 592,717 | |||||
Transportation - Special Tax - 2.5% | ||||||
Mississippi Development Bank Special Obligations, Madison County (Highway Construction), FGIC, 5%, 2027 | $ | 1,000,000 | $ | 983,200 | ||
Mississippi Development Bank Special Obligations, Madison County (Road & Bridge) AMBAC, 5.1%, 2013 (c) | 1,175,000 | 1,295,673 | ||||
$ | 2,278,873 | |||||
Universities - Colleges - 10.9% | ||||||
Jackson State University, Educational Building Corp. Rev., (Campus Facilities), 5%, 2034 (a) | $ | 500,000 | $ | 506,865 | ||
Jackson State University, Educational Building Corp. Rev., (Campus Facilities), “A”, FGIC, 5%, 2014 (c) | 3,100,000 | 3,389,974 | ||||
Jackson State University, Educational Building Corp. Rev., (Student Recreation Center), AMBAC, 5.125%, 2012 (c) | 750,000 | 817,043 | ||||
Mississippi State University Educational Building Corp. Rev., AMBAC, 5.5%, 2016 | 1,000,000 | 1,066,150 | ||||
Mississippi State University Educational Building Corp. Rev., AMBAC, 5%, 2021 | 250,000 | 255,203 |
18
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Universities - Colleges - continued | ||||||
Mississippi Valley State University, Educational Building Corp., MBIA, 5.5%, 2010 (c) | $ | 890,000 | $ | 930,620 | ||
University of Mississippi, Educational Building Corp. (Performing Arts Center), AMBAC, 5.25%, 2009 (c) | 1,000,000 | 1,042,620 | ||||
University of Southern Mississippi, Educational Building Corp. Rev. (Athletics Facilities Improvement Project), FSA, 5%, 2034 (f) | 750,000 | 744,578 | ||||
University of Southern Mississippi, Educational Building Corp. Rev., “B”, FSA, 5%, 2032 | 1,000,000 | 1,001,900 | ||||
$ | 9,754,953 | |||||
Utilities - Municipal Owned - 5.2% | ||||||
Guam Power Authority Rev., “A”, AMBAC, 5.25%, 2013 | $ | 1,000,000 | $ | 1,026,350 | ||
Mississippi Development Bank Special Obligations (Municipal Energy Agency Power Supply Project), “A”, XLCA, 5%, 2026 | 1,000,000 | 917,900 | ||||
Mississippi Development Bank Special Obligations (Okolona Electric System), 5.2%, 2011 (c) | 1,010,000 | 1,092,800 | ||||
Puerto Rico Electric Power Authority Rev., “II”, 5.25%, 2012 (c) | 875,000 | 968,336 | ||||
Puerto Rico Electric Power Authority, Power Rev., “V”, FSA, 5.25%, 2027 | 570,000 | 596,083 | ||||
$ | 4,601,469 | |||||
Water & Sewer Utility Revenue - 13.4% | ||||||
Jackson, MS, Water & Sewer Systems Rev., FGIC, 5.25%, 2009 (c) | $ | 420,000 | $ | 439,013 | ||
Mississippi Development Bank Special Obligations (Combined Water Sewer & Solid Waste Management) FSA, 5.25%, 2021 | 1,270,000 | 1,359,649 | ||||
Mississippi Development Bank Special Obligations (Combined Water Sewer & Solid Waste Management) FSA, 5.05%, 2027 | 1,610,000 | 1,673,724 |
Issuer | Shares/Par | Value ($) | ||||
Water & Sewer Utility Revenue - continued | ||||||
Mississippi Development Bank Special Obligations (Gulfport Water & Sewer Project) FSA, 5.625%, 2012 (c) | $ | 500,000 | $ | 565,235 | ||
Mississippi Development Bank Special Obligations (Gulfport Water & Sewer Project), “A”, FGIC, 5.25%, 2012 (c) | 2,000,000 | 2,183,000 | ||||
Mississippi Development Bank Special Obligations (Jackson Water & Sewer System Project) FSA, 5%, 2029 | 2,000,000 | 2,011,900 | ||||
Mississippi Development Bank Special Obligations (Jackson Water & Sewer System Project), FGIC, 5%, 2032 | 250,000 | 239,125 | ||||
Mississippi Development Bank Special Obligations, Grenada, MS, Water & Sewer Systems Project, “N”, FSA, 5%, 2030 | 1,000,000 | 1,006,110 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | 400,000 | 399,464 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 2,000,000 | 2,045,860 | ||||
$ | 11,923,080 | |||||
Total Municipal Bonds (Identified Cost, $86,523,174) | $ | 87,932,384 | ||||
Floating Rate Demand Notes - 1.0% | ||||||
Jackson County, MS, Pollution Control Rev. (Chevron USA, Inc.), 1.35%, due 4/01/08 | $ | 200,000 | $ | 200,000 | ||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “B”, 1.17%, due 4/01/08 | 100,000 | 100,000 | ||||
Sublette County, WY, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | 600,000 | 600,000 | ||||
Total Floating Rate Demand Notes, at Identified Cost and Value | $ | 900,000 | ||||
Total Investments (Identified Cost, $87,423,174) (k) | $ | 88,832,384 | ||||
Other Assets, Less Liabilities - 0.3% | 229,058 | |||||
Net Assets - 100.0% | $ | 89,061,442 |
Derivative Contracts at 3/31/08
Futures contracts outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ (Depreciation) | ||||
U.S. Treasury Bond 30 yr (Short) | 5 | $593,984 | Jun-08 | $8,056 |
Swap Agreements at 3/31/08
Expiration | Notional | Counterparty | Cash Flows to Receive | Cash Flows to Pay | Value | |||||||
Interest Rate Swaps | ||||||||||||
8/13/23 | USD | 1,000,000 | Goldman Sachs International | 3.795% (fixed rate) | 7-Day BMA | $25,654 |
At March 31, 2008, the fund had sufficient cash and/or securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
19
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® NEW YORK MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 100.9% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport & Port Revenue - 2.5% | ||||||
New York, NY, City Industrial Development Agency, Special Facilities Rev. (Terminal One Group), 5.5%, 2024 | $ | 1,000,000 | $ | 1,003,660 | ||
Port Authority NY & NJ (132nd Series), 5%, 2033 | 2,000,000 | 1,977,220 | ||||
Port Authority NY & NJ, Special Obligation Rev. (JFK International), MBIA, 6.25%, 2015 | 1,000,000 | 1,152,130 | ||||
$ | 4,133,010 | |||||
General Obligations - General Purpose - 5.8% | ||||||
Commonwealth of Puerto Rico, XLCA, 5.5%, 2017 | $ | 2,700,000 | $ | 2,889,513 | ||
New York, NY, “A”, 6%, 2010 (c) | 990,000 | 1,075,952 | ||||
New York, NY, “C-1”, 5.25%, 2025 | 1,000,000 | 1,021,080 | ||||
New York, NY, “D”, 5%, 2028 | 2,000,000 | 1,989,740 | ||||
New York, NY, “D-1”, 5.125%, 2028 | 1,000,000 | 1,006,370 | ||||
New York, NY, “J”, FGIC, 5.5%, 2026 | 5,000 | 5,012 | ||||
New York, NY, “B”, 5.375%, 2010 (c) | 210,000 | 226,838 | ||||
New York, NY, “B”, 5.375%, 2017 | 1,040,000 | 1,083,742 | ||||
New York, NY, Unrefunded, “A”, 6%, 2019 | 10,000 | 10,533 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 340,000 | 373,079 | ||||
$ | 9,681,859 | |||||
General Obligations - Improvement - 0.2% | ||||||
Erie County, NY, Public Improvement, “A”, FGIC, 5%, 2019 | $ | 140,000 | $ | 143,331 | ||
Guam Government, “A”, 5.25%, 2037 | 290,000 | 246,390 | ||||
$ | 389,721 | |||||
General Obligations - Schools - 4.7% | ||||||
Genesee Valley, NY, Central School District (Angelica Belmont), FGIC, 5.25%, 2028 | $ | 1,720,000 | $ | 1,722,563 | ||
North Babylon, NY, Union Free School District, “A”, FGIC, 5.5%, 2018 | 2,415,000 | 2,537,537 | ||||
Port Byron, NY, Central School District, ETM, AMBAC, 7.4%, 2012 (c) | 500,000 | 591,815 | ||||
Port Byron, NY, Central School District, ETM, AMBAC, 7.4%, 2013 (c) | 500,000 | 608,120 | ||||
Port Byron, NY, Central School District, ETM, AMBAC, 7.4%, 2014 (c) | 500,000 | 621,670 | ||||
Port Byron, NY, Central School District, ETM, AMBAC, 7.4%, 2015 (c) | 500,000 | 633,325 | ||||
Washingtonville, NY, Central School Central District, FGIC, 7.35%, 2008 | 550,000 | 555,929 | ||||
Washingtonville, NY, Central School Central District, FGIC, 7.35%, 2009 | 550,000 | 582,659 | ||||
$ | 7,853,618 | |||||
Healthcare Revenue - Hospitals - 6.6% | ||||||
Albany, NY, Industrial Development Agency, Civic Facilities Rev. (St. Peters), “D”, 5.75%, 2027 | $ | 1,000,000 | $ | 1,002,120 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Chautauqua County, NY, Industrial Development Agency, Civic Facilities Rev. (Women’s Christian Assn.), “A”, 6.35%, 2017 | $ | 135,000 | $ | 134,413 | ||
Chautauqua County, NY, Industrial Development Agency, Civic Facilities Rev. (Women’s Christian Assn.), “A”, 6.4%, 2029 | 475,000 | 451,540 | ||||
Fulton County, NY, Industrial Development Agency, Civic Facilities Rev. (Nathan Littauer Hospital), “A”, 5.75%, 2009 | 325,000 | 326,177 | ||||
Genesee County, NY, Industrial Development Agency, Civic Facilities Rev. (United Medical Center Project), 5%, 2032 | 500,000 | 401,690 | ||||
Madison County, NY, Industrial Development Agency, Civic Facilities Rev. (Oneida), 5.25%, 2027 | 675,000 | 621,857 | ||||
Monroe County, NY, Industrial Development Agency, Civic Facilities Rev. (Highland Hospital of Rochester), 5%, 2025 | 1,000,000 | 945,590 | ||||
New York Dormitory Authority Rev. (North Shore Long Island Jewish Group), 5.5%, 2013 (c) | 250,000 | 276,868 | ||||
New York Dormitory Authority Rev. (NYU Hospital Center), “B”, 5.625%, 2037 | 750,000 | 693,923 | ||||
New York Dormitory Authority Rev. (White Plains Hospital), FHA, 5.375%, 2043 | 1,500,000 | 1,513,170 | ||||
New York Dormitory Authority Rev., Non State Supported Debt (Kaleida Health), FHA, 4.6%, 2027 | 1,000,000 | 905,000 | ||||
New York Dormitory Authority Rev., Non State Supported Debt (Mt. Sinai NYU Health), 5.5%, 2026 | 250,000 | 250,733 | ||||
New York Dormitory Authority Rev., Non State Supported Debt (Mt. Sinai NYU Health), “C”, 5.5%, 2026 | 500,000 | 501,465 | ||||
New York, NY, Health & Hospital Corp. Rev., “A”, 5.25%, 2017 | 760,000 | 774,341 | ||||
New York, NY, Industrial Development Agency, Civic Facilities Rev. (Staten Island University Hospital), “B”, 6.375%, 2031 | 490,000 | 466,877 | ||||
Saratoga County, NY, Industrial Development Agency Civic Facilities Rev., 5.25%, 2032 | 500,000 | 459,825 | ||||
Suffolk County, NY, Industrial Development Agency, Civic Facilities Rev. (Huntington Hospital), “C”, 5.875%, 2032 | 1,000,000 | 982,720 | ||||
Yonkers, NY, Industrial Development Agency, Civic Facilities Rev. (St. John’s Riverside Hospital), “A”, 7.125%, 2031 | 300,000 | 300,876 | ||||
$ | 11,009,185 |
20
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Long Term Care - 1.1% | ||||||
East Rochester, NY, Housing Authority Rev. (Woodland Village Project), 5.5%, 2033 | $ | 400,000 | $ | 342,680 | ||
Nassau County, NY, Industrial Development Agency Continuing Care, 6.7%, 2043 | 300,000 | 292,974 | ||||
Suffolk County, NY, Industrial Development Agency, Civic Facilities Rev. (Gurwin Jewish Phase II), 6.7%, 2039 | 385,000 | 384,473 | ||||
Ulster County, NY, Industrial Development Agency (Woodland Pond), “A”, 6%, 2037 | 500,000 | 445,895 | ||||
Westchester County, NY, Industrial Development Agency, Civic Facilities Rev., Continuing Care Retirement (Kendal On Hudson), “A”, 6.5%, 2013 (c) | �� | 300,000 | 346,239 | |||
$ | 1,812,261 | |||||
Human Services - 0.9% | ||||||
Nassau County, NY, Industrial Development Agency, Civic Facility Rev. (Special Needs Facility), “B-1”, 6.5%, 2017 | $ | 205,000 | $ | 205,912 | ||
New York Dormitory Authority Rev. (Jewish Board of Families & Children), AMBAC, 5%, 2023 | 695,000 | 712,660 | ||||
New York, NY, Industrial Development Agency (PSCH, Inc.), 6.375%, 2033 | 500,000 | 502,670 | ||||
$ | 1,421,242 | |||||
Industrial Revenue - Airlines - 0.3% | ||||||
New York, NY, City Industrial Development Agencies Rev. (American Airlines, Inc.), 7.125%, 2011 | $ | 100,000 | $ | 98,863 | ||
New York, NY, City Industrial Development Agencies Rev. (American Airlines, Inc.), 5.4%, 2020 | 100,000 | 79,393 | ||||
New York, NY, City Industrial Development Agencies Rev. (American Airlines, Inc.), 7.625%, 2025 | 350,000 | 353,553 | ||||
$ | 531,809 | |||||
Industrial Revenue - Other - 1.8% | ||||||
Liberty, NY, Development Corp. Rev. (Goldman Sachs Headquarters), 5.25%, 2035 | $ | 1,000,000 | $ | 1,008,730 | ||
New York, NY, City Industrial Development Agency Rev., Liberty Bonds (IAC/InterActiveCorp), 5%, 2035 | 500,000 | 431,925 | ||||
Onondaga County, NY, Industrial Development Agency, Sewer Facilities Rev. (Bristol-Meyers Squibb Co.), 5.75%, 2024 | 1,000,000 | 1,074,740 | ||||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 430,000 | 420,832 | ||||
$ | 2,936,227 | |||||
Industrial Revenue - Paper - 0.7% | ||||||
Essex County, NY, Industrial Development Agency, Pollution Control Rev. (International Paper Corp.), 6.15%, 2021 | $ | 470,000 | $ | 470,625 |
Issuer | Shares/Par | Value ($) | ||||
Industrial Revenue - Paper - continued | ||||||
Essex County, NY, Industrial Development Agency, Pollution Control Rev. (International Paper Corp.), 6.45%, 2023 | $ | 700,000 | $ | 708,687 | ||
$ | 1,179,312 | |||||
Miscellaneous Revenue - Entertainment & Tourism - 0.3% | ||||||
New York Liberty Development Corp. Rev. (National Sports Museum), “A”, 6.125%, 2019 | $ | 500,000 | $ | 496,320 | ||
Miscellaneous Revenue - Other - 0.6% | ||||||
New York, NY, Industrial Development Agency, Civic Facilities Rev. (United Jewish Appeal), “A”, 5%, 2027 | $ | 1,000,000 | $ | 1,009,530 | ||
Multi-Family Housing Revenue - 2.5% | ||||||
New York Housing Finance Agency Rev., “A”, 5.1%, 2041 | $ | 825,000 | $ | 740,330 | ||
New York, NY, City Housing Development Corp., 5.5%, 2034 | 2,000,000 | 1,940,160 | ||||
New York, NY, City Housing Development Corp., “C”, 5%, 2026 | 500,000 | 463,375 | ||||
New York, NY, City Housing Development Corp., “E”, 4.65%, 2025 | 1,000,000 | 971,880 | ||||
$ | 4,115,745 | |||||
Sales & Excise Tax Revenue - 1.2% | ||||||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 0%, 2056 | $ | 11,315,000 | $ | 605,805 | ||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | 1,000,000 | 939,940 | ||||
Schenectady, NY, Metroplex Development Authority Rev., “A”, MBIA, 5.375%, 2021 | 475,000 | 502,911 | ||||
$ | 2,048,656 | |||||
Single Family Housing - State - 2.6% | ||||||
New York Mortgage Agency Rev., 4.6%, 2015 | $ | 2,000,000 | $ | 2,005,180 | ||
New York Mortgage Agency Rev., 5.1%, 2024 | 2,000,000 | 1,956,360 | ||||
New York Mortgage Agency Rev., “130”, 4.75%, 2030 | 500,000 | 441,415 | ||||
$ | 4,402,955 | |||||
Solid Waste Revenue - 0.5% | ||||||
Niagara County, NY, Industrial Development Agency, Solid Waste Disposal Rev. (American Ref-fuel), “C”, 5.625%, 2024 (a) | $ | 850,000 | $ | 851,343 | ||
State & Agency - Other - 3.8% | ||||||
New York Dormitory Authority (City University), AMBAC, 5.75%, 2018 | $ | 800,000 | $ | 913,368 | ||
New York Dormitory Authority (Pace University), MBIA, 6%, 2010 (c) | 1,700,000 | 1,857,233 | ||||
New York Dormitory Authority (State University), 5.375%, 2010 (c) | 1,500,000 | 1,609,335 | ||||
New York Dormitory Authority (Upstate Community Colleges), “A”, FSA, 6%, 2010 (c) | 1,010,000 | 1,103,415 | ||||
New York Municipal Bond Bank Agency, Special Program Rev., “A”, AMBAC, 5.25%, 2015 | 715,000 | 755,076 | ||||
$ | 6,238,427 |
21
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
State & Local Agencies - 13.1% | ||||||
New York Dormitory Authority (City University), “A”, 5.625%, 2016 | $ | 2,450,000 | $ | 2,714,184 | ||
New York Dormitory Authority (Judicial Institute at Pace), AMBAC, 5.5%, 2010 (c) | 2,500,000 | 2,704,000 | ||||
New York Dormitory Authority (School Program), 6.25%, 2020 | 1,690,000 | 1,833,312 | ||||
New York Dormitory Authority (State University), 5.875%, 2017 | 1,130,000 | 1,283,251 | ||||
New York Dormitory Authority Rev., Mental Health Services, Facilities Improvement, “B”, MBIA, 5.25%, 2011 (c) | 785,000 | 855,587 | ||||
New York Dormitory Authority Rev., Mental Health Services, “A”, MBIA, 5.75%, 2010 (c) | 5,000 | 5,324 | ||||
New York Dormitory Authority Rev., Mental Health Services, “B”, MBIA, 5.25%, 2011 (c) | 385,000 | 419,619 | ||||
New York Dormitory Authority Rev., Mental Health Services, “D”, FSA, 5.25%, 2010 (c) | 35,000 | 37,456 | ||||
New York Dormitory Authority Rev., Mental Health Services, “B”, FSA, 5.25%, 2010 (c) | 35,000 | 37,456 | ||||
New York Dormitory Authority Rev., Mental Health Services, “D”, MBIA, 5.25%, 2011 (c) | 105,000 | 114,442 | ||||
New York Dormitory Authority Rev., Mental Health Services, “D”, FSA, 5.25%, 2030 | 25,000 | 25,219 | ||||
New York Dormitory Authority Rev., Mental Health Services, “D”, FSA, 5.25%, 2010 (c) | 10,000 | 10,088 | ||||
New York Dormitory Authority Rev., Mental Health Services, Unrefunded, “B”, MBIA, 5.25%, 2031 | 725,000 | 729,394 | ||||
New York Municipal Bond Bank Agency, Special School Purpose Rev., 5.25%, 2022 | 1,000,000 | 1,033,670 | ||||
New York Urban Development Corp. (Correctional Facilities), AMBAC, 0%, 2009 | 5,000,000 | 4,910,200 | ||||
New York Urban Development Corp. (State Facilities), AMBAC, 5.6%, 2015 | 2,750,000 | 3,040,730 | ||||
Tobacco Settlement Financing Corp., NY, “A-1”, 5.5%, 2018 | 2,000,000 | 2,084,240 | ||||
$ | 21,838,172 | |||||
Tax - Other - 4.3% | ||||||
Hudson Yards Infrastructure Corp., “A”, FSA, 5%, 2047 | $ | 2,500,000 | $ | 2,487,100 | ||
New York, NY, Transitional Finance Authority Rev., 4.75%, 2027 | 3,650,000 | 3,608,609 | ||||
New York, NY, Transitional Finance Authority Rev., “A”, 5%, 2026 | 1,000,000 | 1,012,520 | ||||
$ | 7,108,229 | |||||
Tobacco - 1.0% | ||||||
Guam Economic Development Authority Tobacco Settlement, “B”, 5.5%, 2011 (c) | $ | 400,000 | $ | 432,004 | ||
New York County Tobacco Trust II, 5.625%, 2035 | 800,000 | 779,896 | ||||
Westchester, NY, Tobacco Asset Securitization Corp., 5.125%, 2045 | 500,000 | 434,520 | ||||
$ | 1,646,420 | |||||
Toll Roads - 12.2% | ||||||
Niagara Falls, NY, Bridge Commission Toll Rev., FGIC, 5.25%, 2015 | $ | 7,000,000 | $ | 7,575,750 |
Issuer | Shares/Par | Value ($) | ||||
Toll Roads - continued | ||||||
Triborough Bridge & Tunnel Authority Rev., NY, ETM, 6%, 2012 (c) | $ | 1,000,000 | $ | 1,077,540 | ||
Triborough Bridge & Tunnel Authority Rev., NY, ETM, 5.5%, 2017 (c)(u) | 10,000,000 | 11,235,600 | ||||
Triborough Bridge & Tunnel Authority Rev., NY, Unrefunded, “A”, MBIA, 5%, 2032 | 310,000 | 311,237 | ||||
$ | 20,200,127 | |||||
Transportation - Special Tax - 9.4% | ||||||
Metropolitan Transportation Authority Rev., NY, FGIC, 5.875%, 2010 (c) | $ | 2,000,000 | $ | 2,141,040 | ||
Metropolitan Transportation Authority Rev., NY, FGIC, 5%, 2025 | 2,500,000 | 2,527,425 | ||||
Metropolitan Transportation Authority Rev., NY, “A”, 5%, 2026 | 1,500,000 | 1,506,165 | ||||
Metropolitan Transportation Authority Rev., NY, “A”, 5%, 2037 | 1,500,000 | 1,463,685 | ||||
Metropolitan Transportation Authority Rev., NY, “B”, FSA, 4.5%, 2032 (f) | 1,900,000 | 1,742,680 | ||||
Metropolitan Transportation Authority Rev., NY, Dedicated Tax Fund Rev., 5.5%, 2015 (c) | 750,000 | 857,063 | ||||
Metropolitan Transportation Authority Rev., NY, ETM, 7.375%, 2008 (c) | 385,000 | 390,336 | ||||
Metropolitan Transportation Authority Rev., NY, ETM, AMBAC, 5.75%, 2013 (c) | 825,000 | 886,050 | ||||
New York Thruway Authority, General Rev., Highway & Bridges, “A”, FSA, 5.8%, 2010 (c) | 20,000 | 21,593 | ||||
New York Thruway Authority, General Rev., Highway & Bridges, “B-1”, FGIC, 5.4%, 2010 (c) | 2,000,000 | 2,141,740 | ||||
Puerto Rico Highway & Transportation Authority Rev., “Y”, 5%, 2016 (c) | 1,700,000 | 1,895,347 | ||||
$ | 15,573,124 | |||||
Universities - Colleges - 4.3% | ||||||
Albany, NY, Industrial Development Agency Rev. (Albany Law School), 5%, 2031 | $ | 1,000,000 | $ | 891,480 | ||
Amherst, NY, Industrial Development Agency Rev. (Daemen College), “A”, 6%, 2011 (c) | 1,000,000 | 1,131,150 | ||||
Cattaraugus County, NY, Industrial Development Agency Rev. (Jamestown Community College), “A”, 6.4%, 2010 (c) | 500,000 | 554,190 | ||||
New York Dormitory Authority Rev. (Fordham University), AMBAC, 7.2%, 2015 | 5,000 | 5,017 | ||||
New York Dormitory Authority Rev. (St. John’s University), “A”, MBIA, 5%, 2017 | 300,000 | 314,466 | ||||
New York Dormitory Authority Rev. (Yeshiva University), AMBAC, 5.125%, 2034 | 1,000,000 | 1,013,510 | ||||
Onondaga County, NY, Industrial Development Agency Rev. (Le Moyne College), 5.625%, 2021 | 750,000 | 777,098 | ||||
Schenectady, NY, Industrial Development Agency, Civic Facilities Rev. (Union College), “A”, AMBAC, 5%, 2032 | 2,000,000 | 2,002,580 | ||||
Seneca County, NY, Industrial Development Agency, Civic Facilities Rev. (New York Chiropractic), 5%, 2027 | 500,000 | 458,025 |
22
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Universities - Colleges - continued | ||||||
Utica, NY, Industrial Development Agency, Civic Facilities Rev. (Utica College), “A”, 5.3%, 2008 | $ | 35,000 | $ | 35,224 | ||
$ | 7,182,740 | |||||
Universities - Dormitories - 0.6% | ||||||
New York Dormitory Authority Rev. (New York University), “A”, FGIC, 5%, 2029 | $ | 1,000,000 | $ | 989,600 | ||
Utilities - Municipal Owned - 3.5% | ||||||
Guam Power Authority Rev., AMBAC, 5.25%, 2014 | $ | 1,000,000 | $ | 1,023,670 | ||
Long Island Power Authority, Electrical Systems Rev., “C”, 5.5%, 2013 (c) | 400,000 | 450,872 | ||||
New York Power Authority Rev., 5.25%, 2040 | 3,000,000 | 3,016,560 | ||||
New York Power Authority Rev., “A”, 5%, 2012 (c) | 1,000,000 | 1,095,080 | ||||
Virgin Islands Water & Power Authority Rev., 5.5%, 2017 | 200,000 | 203,526 | ||||
$ | 5,789,708 | |||||
Water & Sewer Utility Revenue - 16.4% | ||||||
Erie County, NY, Municipal Water & Sewer Finance Authority Rev., ETM, AMBAC, 6.75%, 2014 (c) | $ | 1,000,000 | $ | 1,130,470 | ||
New York Environmental Facilities Corp., Clean Water & Drinking Rev., 5%, 2024 | 1,005,000 | 1,033,281 | ||||
New York Environmental Facilities Corp., Clean Water & Drinking Rev., 5%, 2025 | 1,500,000 | 1,537,125 | ||||
New York Environmental Facilities Corp., Clean Water & Drinking Rev., 5%, 2029 | 2,000,000 | 2,027,520 | ||||
New York Environmental Facilities Corp., Clean Water & Drinking Rev., 5%, 2031 | 1,330,000 | 1,344,457 | ||||
New York Environmental Facilities Corp., Pollution Control Rev., 5.75%, 2010 | 175,000 | 188,069 | ||||
New York Environmental Facilities Corp., Pollution Control Rev., 6.875%, 2010 | 110,000 | 110,345 | ||||
New York Environmental Facilities Corp., Pollution Control Rev., 7.25%, 2010 | 45,000 | 45,154 | ||||
New York Environmental Facilities Corp., Pollution Control Rev., ETM, 5.75%, 2010 (c) | 945,000 | 1,016,839 | ||||
New York Environmental Facilities Corp., Pollution Control Rev., ETM, 5.75%, 2010 (c) | 1,115,000 | 1,199,762 | ||||
New York Environmental Facilities Corp., Water Facilities Rev., 6%, 2031 | 1,005,000 | 1,041,150 |
Issuer | Shares/Par | Value ($) | ||||
Water & Sewer Utility Revenue - continued | ||||||
New York Environmental Facilities Corp., Water Facilities Rev. (Spring Valley Water Co.), “B”, AMBAC, 6.15%, 2024 | $ | 1,500,000 | $ | 1,504,020 | ||
New York, NY, Municipal Water & Sewer Finance Authority Rev., FGIC, 5.25%, 2011 (c) | 2,000,000 | 2,168,060 | ||||
New York, NY, Municipal Water & Sewer Finance Authority Rev., 4.75%, 2036 | 3,000,000 | 2,847,960 | ||||
New York, NY, Municipal Water & Sewer Finance Authority Rev., 5%, 2038 | 2,000,000 | 1,984,440 | ||||
New York, NY, Municipal Water & Sewer Finance Authority Rev., 5%, 2038 | 2,000,000 | 1,984,440 | ||||
New York, NY, Municipal Water & Sewer Finance Authority Rev., FGIC, 4.5%, 2039 | 970,000 | 869,314 | ||||
New York, NY, Municipal Water & Sewer Finance Authority Rev., AMBAC, 5%, 2039 | 2,000,000 | 2,002,240 | ||||
New York, NY, Municipal Water & Sewer Finance Authority Rev., “A”, 5%, 2027 | 1,500,000 | 1,512,174 | ||||
New York, NY, Municipal Water & Sewer Finance Authority Rev., “A”, ETM, 6%, 2010 (c) | 620,000 | 669,749 | ||||
Suffolk County, NY, Water Authority Rev., MBIA, 5.1%, 2012 | 660,000 | 714,351 | ||||
Suffolk County, NY, Water Authority Rev., ETM, MBIA, 5.1%, 2012 (c) | 235,000 | 256,662 | ||||
$ | 27,187,582 | |||||
Total Municipal Bonds (Identified Cost, $161,920,679) | $ | 167,626,922 | ||||
Floating Rate Demand Notes - 2.2% | ||||||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “B”, 1.17%, due 4/01/08 | $ | 900,000 | $ | 900,000 | ||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “C”, 1.17%, due 4/01/08 | 700,000 | 700,000 | ||||
New York, NY, “A-4”, 1.18%, due 4/01/08 | 100,000 | 100,000 | ||||
Sublette County, WY, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | 1,900,000 | 1,900,000 | ||||
Total Floating Rate Demand Notes, at Identified Cost and Value | $ | 3,600,000 | ||||
Total Investments (Identified Cost, $165,520,679) (k) | $ | 171,226,922 | ||||
Other Assets, Less Liabilities - (3.1)% | (5,193,572) | |||||
Net Assets - 100.0% | $ | 166,033,350 |
Derivative Contracts at 3/31/08
Futures contracts outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ (Depreciation) | ||||
U.S. Treasury Bond 30 yr (Short) | 10 | $1,187,969 | Jun-08 | $16,112 |
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
23
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® NORTH CAROLINA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 101.3% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport & Port Revenue - 5.0% | ||||||
Charlotte, NC, Airport Rev. (Charlotte/Douglas International Airport), AMBAC, 5%, 2023 | $ | 1,430,000 | $ | 1,456,390 | ||
Charlotte, NC, Airport Rev., “A”, MBIA, 5%, 2029 | 2,000,000 | 1,981,760 | ||||
Charlotte, NC, Airport Rev., “A”, MBIA, 5%, 2034 | 4,485,000 | 4,375,790 | ||||
Charlotte, NC, Airport Rev., “B”, MBIA, 5.875%, 2019 | 1,000,000 | 1,025,110 | ||||
Charlotte, NC, Airport Rev., “B”, MBIA, 5.875%, 2020 | 3,775,000 | 3,865,638 | ||||
Raleigh Durham, NC, Airport Authority Rev., “A”, FGIC, 5.25%, 2018 | 2,700,000 | 2,823,039 | ||||
$ | 15,527,727 | |||||
General Obligations - General Purpose - 2.1% | ||||||
Charlotte, NC, 5.5%, 2010 (c) | $ | 3,100,000 | $ | 3,371,033 | ||
Puerto Rico Commonwealth, “A”, 5.25%, 2016 (c) | 1,235,000 | 1,398,946 | ||||
Puerto Rico Commonwealth, “A”, 5.25%, 2030 | 765,000 | 739,610 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 905,000 | 993,047 | ||||
$ | 6,502,636 | |||||
General Obligations - Improvement - 1.5% | ||||||
New Hanover County, NC, Public Improvement, 5.8%, 2010 (c) | $ | 4,200,000 | $ | 4,648,350 | ||
General Obligations - Schools - 4.1% | ||||||
Brunswick County, NC, FGIC, 5%, 2020 | $ | 2,800,000 | $ | 2,918,188 | ||
Cumberland County, NC, 5.8%, 2010 (c) | 4,400,000 | 4,771,316 | ||||
Johnston County, NC, FGIC, 5.6%, 2010 (c) | 2,000,000 | 2,163,320 | ||||
New Hanover County, NC, Public Improvement, 5%, 2021 | 1,435,000 | 1,484,981 | ||||
New Hanover County, NC, School Improvement, 5%, 2019 | 1,255,000 | 1,327,865 | ||||
$ | 12,665,670 | |||||
Healthcare Revenue - Hospitals - 15.7% | ||||||
Albemarle, NC, Hospital Authority Health Care Facilities Rev., 5.25%, 2038 | $ | 2,000,000 | $ | 1,709,780 | ||
Catawba County, NC, Hospital Rev. (Catawba Memorial Hospital), AMBAC, 5%, 2017 | 1,200,000 | 1,222,596 | ||||
Charlotte-Mecklenburg, NC, Hospital Authority Health Care System Rev. (Carolina Health Care System), “A”, 5%, 2011 (c) | 805,000 | 864,015 | ||||
Charlotte-Mecklenburg, NC, Hospital Authority Health Care System Rev. (Carolina Health Care System), “A”, 5%, 2031 | 1,000,000 | 934,190 | ||||
Charlotte-Mecklenburg, NC, Hospital Authority Health Care System Rev. (Carolina Health Care System), “A”, 5%, 2031 | 2,695,000 | 2,517,642 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Cumberland County, NC, Hospital Facilities Rev. (Cumberland Hospital), ETM, MBIA, 0%, 2009 (c) | $ | 1,800,000 | $ | 1,737,468 | ||
New Hanover County, NC, Hospital Rev. (New Hanover Regional Medical Center), MBIA, 5%, 2019 | 6,225,000 | 6,345,827 | ||||
North Carolina Medical Care Commission (Cleveland County Healthcare), “A”, AMBAC, 5%, 2035 | 1,305,000 | 1,283,911 | ||||
North Carolina Medical Care Commission (Morehead Memorial Hospital), FSA, 5%, 2026 | 2,000,000 | 2,027,280 | ||||
North Carolina Medical Care Commission (Northeast Medical Center), 5.25%, 2014 (c) | 2,000,000 | 2,252,780 | ||||
North Carolina Medical Care Commission, Health Care Facilities Rev. (Wakemed), AMBAC, 5%, 2021 | 3,500,000 | 3,563,350 | ||||
North Carolina Medical Care Commission, Hospital Rev. (Betsy Johnson Health Care System), FSA, 5.125%, 2032 | 1,500,000 | 1,507,470 | ||||
North Carolina Medical Care Commission, Hospital Rev. (Mission-St. Joseph Health Systems), 5.5%, 2011 (c) | 2,825,000 | 3,122,783 | ||||
North Carolina Medical Care Commission, Hospital Rev. (Southeastern Regional Medical Center), 5.375%, 2032 | 3,330,000 | 3,214,083 | ||||
North Carolina Medical Care Commission, Hospital Rev. (Wilson Memorial Hospital), AMBAC, 0%, 2013 | 1,000,000 | 810,610 | ||||
North Carolina Medical Care Commission, Hospital Rev. (Wilson Memorial Hospital), AMBAC, 0%, 2015 | 1,140,000 | 828,290 | ||||
North Carolina Medical Care Commission, Hospital Rev., Unrefunded (St. Joseph’s), MBIA, 5.1%, 2018 | 525,000 | 533,358 | ||||
Northern Hospital District, Surry County, NC, Health Care Facilities Rev., RADIAN, 5.5%, 2019 | 1,125,000 | 1,156,973 | ||||
Northern Hospital District, Surry County, NC, Health Care Facilities Rev., 6.25%, 2038 | 1,000,000 | 981,300 | ||||
Onslow County, NC, Hospital Authority (Onslow Memorial Hospital Project), MBIA, 5%, 2026 | 1,315,000 | 1,322,233 | ||||
Pitt County, NC, Rev., Pitt County Memorial Hospital, ETM, 5.25%, 2021 (c) | 10,135,000 | 10,705,601 | ||||
$ | 48,641,540 | |||||
Healthcare Revenue - Long Term Care - 1.2% | ||||||
North Carolina Medical Care Commission, Health Care Facilities Rev. (Arbor Acres Community), 6.375%, 2012 (c) | $ | 1,000,000 | $ | 1,136,910 | ||
North Carolina Medical Care Commission, Health Care Facilities Rev. (Deerfield), “A”, 5%, 2023 | 1,000,000 | 950,100 |
24
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Long Term Care - continued | ||||||
North Carolina Medical Care Commission, Health Care Facilities Rev. (Givens Estates), 6.5%, 2013 (c) | $ | 800,000 | $ | 937,912 | ||
North Carolina Medical Care Commission, Retirement Facilities Rev., (Brookwood), 5.25%, 2032 | 750,000 | 596,543 | ||||
$ | 3,621,465 | |||||
Human Services - 0.7% | ||||||
Cumberland County, NC, Finance Corp., Installment Payment Rev. (Detention Center & Mental Health), AMBAC, 5.625%, 2019 | $ | 2,125,000 | $ | 2,193,531 | ||
Industrial Revenue - Other - 0.3% | ||||||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | $ | 860,000 | $ | 841,665 | ||
Industrial Revenue - Paper - 0.6% | ||||||
Columbus County, NC, Industrial Facilities & Pollution Control Financing Authority Rev. (International Paper Co.), “A”, 5.8%, 2016 | $ | 2,000,000 | $ | 2,011,740 | ||
Multi-Family Housing Revenue - 2.8% | ||||||
Charlotte, NC, Housing Authority Rev., GNMA, 4.8%, 2048 | $ | 2,000,000 | $ | 1,678,360 | ||
Charlotte, NC, Housing Authority Rev., Mortgage Rocky Branch II, GNMA, 4.65%, 2035 | 2,000,000 | 1,687,060 | ||||
Elizabeth City, NC, Multifamily Housing Rev. (Walker Landing), “A”, GNMA, 5.125%, 2049 | 1,500,000 | 1,334,700 | ||||
Mecklenburg County, NC (Little Rock Apartments), FNMA, 5.15%, 2022 | 1,000,000 | 987,320 | ||||
North Carolina Housing Finance Agency, “H”, FHA, 6.05%, 2028 | 2,015,000 | 2,017,358 | ||||
North Carolina Medical Care Commission, Health Care Facilities Rev., “A”, (ARC Projects), 5.8%, 2034 | 1,000,000 | 913,250 | ||||
$ | 8,618,048 | |||||
Single Family Housing - State - 5.7% | ||||||
North Carolina Housing Finance Agency Rev., “15-A”, FSA, 4.95%, 2032 | $ | 405,000 | $ | 364,508 | ||
North Carolina Housing Finance Agency Rev., “19-A”, 5.1%, 2030 | 2,340,000 | 2,171,309 | ||||
North Carolina Housing Finance Agency Rev., “23-A”, 4.8%, 2037 | 2,040,000 | 1,762,968 | ||||
North Carolina Housing Finance Agency Rev., “24-A”, 4.75%, 2026 | 1,965,000 | 1,776,969 | ||||
North Carolina Housing Finance Agency Rev., “25-A”, 5.75%, 2037 | 2,000,000 | 2,040,620 | ||||
North Carolina Housing Finance Agency Rev., “31-A”, 5.25%, 2038 | 2,000,000 | 1,865,320 | ||||
North Carolina Housing Finance Agency Rev., “5-A”, 5.55%, 2019 | 2,015,000 | 2,022,355 | ||||
North Carolina Housing Finance Agency Rev., “7-A”, 6.15%, 2020 | 480,000 | 483,806 |
Issuer | Shares/Par | Value ($) | ||||
Single Family Housing - State - continued | ||||||
North Carolina Housing Finance Agency Rev., “A”, 5.25%, 2020 | $ | 1,145,000 | $ | 1,147,828 | ||
North Carolina Housing Finance Agency Rev., “A”, 5.375%, 2023 | 210,000 | 208,232 | ||||
North Carolina Housing Finance Agency Rev., “PP”, FHA, 6.15%, 2017 | 785,000 | 789,153 | ||||
North Carolina Housing Finance Agency Rev., “RR”, 5.85%, 2028 | 1,445,000 | 1,448,714 | ||||
North Carolina Housing Finance Agency Rev., “29-A”, 4.85%, 2038 | 2,000,000 | 1,726,340 | ||||
$ | 17,808,122 | |||||
State & Agency - Other - 6.0% | ||||||
Brunswick County, NC, Certificates of Participation, FSA, 5.5%, 2010 (c) | $ | 1,000,000 | $ | 1,077,900 | ||
Cabarrus County, NC, Installment Financing Contract, 5%, 2021 | 5,500,000 | 5,698,880 | ||||
Carteret County, NC, AMBAC, 5.625%, 2020 | 1,010,000 | 1,056,935 | ||||
Charlotte, NC, Certificates of Participation (Convention Facilities), AMBAC, 0%, 2008 | 3,000,000 | 2,958,450 | ||||
Charlotte, NC, Certificates of Participation (Public Safety Facilities), “D”, 5.5%, 2010 (c) | 3,000,000 | 3,230,370 | ||||
Charlotte, NC, Certificates of Participation (Transit Projects), “E”, 5%, 2035 | 1,990,000 | 1,952,170 | ||||
Harnett County, NC, Certificates of Participation, FSA, 5.5%, 2010 (c) | 1,225,000 | 1,338,117 | ||||
Harnett County, NC, Certificates of Participation, FSA, 5.25%, 2015 | 1,020,000 | 1,113,065 | ||||
Rockingham, NC, Certificates of Participation, AMBAC, 5.125%, 2024 | 350,000 | 361,424 | ||||
$ | 18,787,311 | |||||
State & Local Agencies - 4.1% | ||||||
Cabarrus County, NC, Development Corp., AMBAC, 5.3%, 2009 (c) | $ | 1,250,000 | $ | 1,309,588 | ||
Forsyth County, NC, Certificates of Participation (Public Facilities & Equipment), 5.25%, 2013 (c) | 1,230,000 | 1,365,620 | ||||
Iredell County, NC, Public Facilities (School Projects), AMBAC, 5.5%, 2010 (c) | 1,000,000 | 1,077,900 | ||||
Mooresville, NC, Certificates of Participation, 5%, 2032 | 2,000,000 | 1,936,900 | ||||
Puerto Rico Public Finance Corp., ETM, AMBAC, 5.375%, 2016 (u) | 3,000,000 | 3,308,790 | ||||
Rutherford County, NC, Certificates of Participation (Rutherford County School), AMBAC, 5%, 2023 | 840,000 | 860,244 | ||||
Winston Salem, NC, Certificates of Participation, “C”, 5%, 2011 (c) | 2,575,000 | 2,769,413 | ||||
$ | 12,628,455 | |||||
Tax - Other - 0.9% | ||||||
Virgin Islands Public Finance Authority Rev., RADIAN, 5.5%, 2018 | $ | 1,000,000 | $ | 1,014,120 | ||
Virgin Islands Public Finance Authority Rev., “A”, 5.5%, 2022 | 1,650,000 | 1,658,762 | ||||
$ | 2,672,882 |
25
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Tobacco - 0.6% | ||||||
Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 | $ | 1,730,000 | $ | 1,650,904 | ||
Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, “A”, 0%, 2050 | 2,000,000 | 99,640 | ||||
$ | 1,750,544 | |||||
Transportation - Special Tax - 5.7% | ||||||
Puerto Rico Highway & Transportation Authority Rev., FSA, 6%, 2018 (u) | $ | 10,850,000 | $ | 12,374,208 | ||
Puerto Rico Highway & Transportation Authority Rev., FSA, 5.25%, 2036 | 5,210,000 | 5,333,738 | ||||
$ | 17,707,946 | |||||
Universities - Colleges - 17.5% | ||||||
Appalachian State University, NC, Rev., FSA, 5.6%, 2010 (c) | $ | 2,285,000 | $ | 2,476,597 | ||
Appalachian State University, NC, Rev., “C”, MBIA, 5%, 2030 | 1,000,000 | 1,001,740 | ||||
East Carolina University, NC, Rev., “A”, AMBAC, 5.25%, 2011 (c) | 1,375,000 | 1,499,053 | ||||
North Carolina Capital Facilities, Finance Agency Rev. (Meredith College), 6%, 2031 | 1,500,000 | 1,477,545 | ||||
North Carolina Capital Facilities, Finance Agency Rev. (Duke University), “A”, 5.25%, 2012 (c) | 2,000,000 | 2,202,040 | ||||
North Carolina Capital Facilities, Finance Agency Rev. (Duke University), “A”, 5%, 2039 | 3,500,000 | 3,478,020 | ||||
North Carolina Capital Facilities, Finance Agency Rev. (Duke University), “B”, 4.25%, 2042 | 2,020,000 | 1,682,519 | ||||
North Carolina Capital Facilities, Finance Agency Rev. (Duke University), “B”, 4.75%, 2042 | 3,000,000 | 2,780,400 | ||||
North Carolina Capital Facilities, Finance Agency Rev. (High Point University), 5.125%, 2018 | 510,000 | 527,442 | ||||
North Carolina Capital Facilities, Finance Agency Rev. (High Point University), 5.125%, 2021 | 300,000 | 306,879 | ||||
North Carolina Capital Facilities, Finance Agency Rev. (Johnson & Wales University), “A”, XLCA, 5.25%, 2022 | 1,870,000 | 1,849,916 | ||||
North Carolina Capital Facilities, Finance Agency Rev. (Johnson & Wales University), “A”, XLCA, 5%, 2033 | 3,285,000 | 2,789,852 | ||||
North Carolina Capital Facilities, Finance Prerefunded (Duke University) “A”, 5.125%, 2011 (c) | 4,050,000 | 4,389,471 | ||||
North Carolina Capital Facilities, Finance Unrefunded (Duke University) “A”, 5.125%, 2041 | 950,000 | 952,252 | ||||
Puerto Rico Industrial Tourist Authority (University Plaza), “A”, MBIA, 5%, 2020 | 2,180,000 | 2,196,394 | ||||
University of North Carolina, Chapel Hill, 5%, 2028 | 2,000,000 | 2,018,500 | ||||
University of North Carolina, Chapel Hill, 5%, 2036 | 3,000,000 | 3,006,630 |
Issuer | Shares/Par | Value ($) | ||||
Universities - Colleges - continued | ||||||
University of North Carolina, Charlotte Rev., “B”, FSA, 5%, 2036 | $ | 1,750,000 | $ | 1,747,375 | ||
University of North Carolina, Greensboro Rev., “A”, FSA, 5%, 2020 (f) | 2,835,000 | 2,939,753 | ||||
University of North Carolina, Systems Pool Rev., “B”, MBIA, 5%, 2033 | 2,930,000 | 2,892,555 | ||||
University of North Carolina, Systems Pool Rev., “C”, AMBAC, 5%, 2029 | 2,000,000 | 2,011,300 | ||||
University of North Carolina, University Rev., “A”, 4.75%, 2034 | 5,000,000 | 4,809,550 | ||||
University of North Carolina, Wilmington Rev., “A”, AMBAC, 5%, 2019 | 1,375,000 | 1,428,378 | ||||
University of North Carolina, Wilmington, Certificates of Participation (Student Housing Project), FGIC, 5%, 2028 | 1,825,000 | 1,781,839 | ||||
University of Puerto Rico Rev., “Q”, 5%, 2036 | 2,370,000 | 2,173,883 | ||||
$ | 54,419,883 | |||||
Utilities - Investor Owned - 0.8% | ||||||
Wake County, NC, Industrial Facilities & Pollution Control Rev. (Carolina Power & Light Co.), 5.375%, 2017 | $ | 2,500,000 | $ | 2,598,850 | ||
Utilities - Municipal Owned - 15.5% | ||||||
North Carolina Eastern Municipal Power Agency, AMBAC, 6%, 2018 | $ | 14,245,000 | $ | 15,725,198 | ||
North Carolina Eastern Municipal Power Agency, “A”, MBIA, 7.5%, 2010 | 3,005,000 | 3,230,285 | ||||
North Carolina Eastern Municipal Power Agency, “A”, ETM, 7.5%, 2010 (c) | 2,595,000 | 2,782,774 | ||||
North Carolina Eastern Municipal Power Agency, “A”, ETM, 5%, 2017 (c) | 3,120,000 | 3,387,134 | ||||
North Carolina Municipal Power Agency, Catawba Electric Rev., MBIA, 6%, 2011 | 5,000,000 | 5,390,700 | ||||
North Carolina Municipal Power Agency, Catawba Electric Rev., 6.375%, 2013 | 1,000,000 | 1,060,220 | ||||
North Carolina Municipal Power Agency, Catawba Electric Rev., MBIA, 5.25%, 2019 (u) | 10,000,000 | 10,429,300 | ||||
North Carolina Municipal Power Agency, Catawba Electric Rev., MBIA, 5.25%, 2020 (u) | 6,000,000 | 6,254,940 | ||||
$ | 48,260,551 | |||||
Water & Sewer Utility Revenue - 10.5% | ||||||
Asheville, NC, Water & Sewer Systems Rev., MBIA, 5%, 2032 | $ | 1,000,000 | $ | 992,970 | ||
Broad River, NC, Water Authority Rev., MBIA, 5.75%, 2010 (c) | 1,490,000 | 1,613,879 | ||||
Cary, NC, Combined Enterprise Systems Rev., 5%, 2011 (c) | 1,000,000 | 1,085,090 | ||||
Charlotte, NC, Storm Water Fee Rev., 6%, 2010 (c) | 3,180,000 | 3,461,080 | ||||
Charlotte, NC, Storm Water Fee Rev., 5%, 2034 | 3,675,000 | 3,682,460 | ||||
Charlotte, NC, Water & Sewer Systems Rev., 5.75%, 2010 (c) | 3,075,000 | 3,330,656 |
26
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Water & Sewer Utility Revenue - continued | ||||||
Charlotte, NC, Water & Sewer Systems Rev., 5.5%, 2017 | $ | 1,650,000 | $ | 1,759,577 | ||
Charlotte, NC, Water & Sewer Systems Rev., “A”, 4.625%, 2036 | 1,470,000 | 1,351,577 | ||||
Durham County, NC, Enterprise Systems Rev., MBIA, 5%, 2023 | 1,675,000 | 1,720,074 | ||||
Greensboro, NC, Enterprise Systems Rev., “A”, 5.125%, 2011 (c) | 1,490,000 | 1,621,895 | ||||
Greensboro, NC, Enterprise Systems Rev., “A”, 5.125%, 2011 (c) | 1,750,000 | 1,904,910 | ||||
Greenville, NC, Combined Enterprise Systems Rev., FSA, 5%, 2016 | 1,005,000 | 1,063,973 | ||||
Greenville, NC, Combined Enterprise Systems Rev., FSA, 5.25%, 2019 | 1,170,000 | 1,232,888 | ||||
Harnett County, NC, Water & Sewer Systems Rev., AMBAC, 5%, 2028 | 700,000 | 705,859 | ||||
Kannapolis, NC, Water & Sewer Rev., “B”, FSA, 5.25%, 2021 | 1,000,000 | 1,044,500 | ||||
Raleigh, NC, Combined Enterprise System Rev., 5%, 2031 | 4,000,000 | 4,023,200 | ||||
Raleigh, NC, Combined Enterprise Systems Rev., 5%, 2014 (c) | 385,000 | 424,004 | ||||
Winston Salem, NC, Water & Sewer Systems Rev., 5%, 2033 | 1,600,000 | 1,608,496 | ||||
$ | 32,627,088 | |||||
Total Municipal Bonds (Identified Cost, $308,974,992) | $ | 314,534,004 |
Issuer | Shares/Par | Value ($) | ||||
Floating Rate Demand Notes - 0.6% | ||||||
East Baton Rouge, LA, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | $ | 100,000 | $ | 100,000 | ||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | 300,000 | 300,000 | ||||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “A”, 1.17%, due 4/01/08 | 300,000 | 300,000 | ||||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “B”, 1.17%, due 4/01/08 | 100,000 | 100,000 | ||||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “C”, 1.17%, due 4/01/08 | 500,000 | 500,000 | ||||
Sublette County, WY, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | 400,000 | 400,000 | ||||
Total Floating Rate Demand Notes, at Identified Cost and Value | $ | 1,700,000 | ||||
Total Investments (Identified Cost, $310,674,992) (k) | $ | 316,234,004 | ||||
Other Assets, Less Liabilities - (1.9)% | (5,867,187) | |||||
Net Assets - 100.0% | $ | 310,366,817 |
Derivative Contracts at 3/31/08
Futures contracts outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ (Depreciation) | ||||
U.S. Treasury Bond 30 yr (Short) | 19 | $2,257,141 | Jun-08 | $30,613 |
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
27
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® PENNSYLVANIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 99.4% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport & Port Revenue - 1.9% | ||||||
Allegheny County, PA, Airport Rev. (Pittsburgh International Airport), MBIA, 5.75%, 2014 | $ | 1,000,000 | $ | 1,055,841 | ||
Allegheny County, PA, Airport Rev. (Pittsburgh International Airport), FGIC, 6.125%, 2017 | 500,000 | 515,690 | ||||
Susquehanna Area Regional Airport, AMBAC, 5.375%, 2023 | 500,000 | 503,595 | ||||
$ | 2,075,126 | |||||
General Obligations - General Purpose - 9.0% | ||||||
Allegheny County, PA, Unrefunded Balance, “C53”, FGIC, 5.3%, 2018 | $ | 285,000 | $ | 296,961 | ||
Allegheny County, PA, Unrefunded Balance, “C53”, FGIC, 5.4%, 2019 | 290,000 | 302,235 | ||||
Commonwealth of Puerto Rico, FGIC, 5.5%, 2015 (u) | 1,860,000 | 2,119,098 | ||||
Commonwealth of Puerto Rico, XLCA, 5.5%, 2017 | 2,000,000 | 2,140,380 | ||||
Commonwealth of Puerto Rico, “A”, FGIC, 5.5%, 2015 | 280,000 | 294,826 | ||||
Erie County, PA, Convention Center, FGIC, 5%, 2025 | 500,000 | 496,595 | ||||
Erie County, PA, Convention Center, FGIC, 5%, 2026 | 500,000 | 491,865 | ||||
Luzerne County, PA, MBIA, 5.25%, 2012 (c) | 500,000 | 550,640 | ||||
North Huntingdon Township, PA, AMBAC, 5.25%, 2019 | 500,000 | 519,905 | ||||
Pennsylvania Finance Authority Rev. (Penn Hills), “A”, FGIC, 5.45%, 2010 (c) | 85,000 | 91,482 | ||||
Pennsylvania Finance Authority Rev. (Penn Hills), “A”, FGIC, 5.45%, 2019 | 415,000 | 430,023 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 450,000 | 493,781 | ||||
State of Pennsylvania, 6%, 2010 (c) | 1,000,000 | 1,072,200 | ||||
State of Pennsylvania, 6.25%, 2010 | 300,000 | 324,873 | ||||
$ | 9,624,864 | |||||
General Obligations - Improvement - 0.5% | ||||||
Pittsburgh, PA, FGIC, 5.75%, 2009 (c) | $ | 500,000 | $ | 525,375 | ||
General Obligations - Schools - 19.0% | ||||||
Allegheny Valley, PA, School District, “A”, MBIA, 5%, 2028 | $ | 1,000,000 | $ | 1,005,530 | ||
Ambridge, PA, Area School District, MBIA, 5%, 2014 (c) | 750,000 | 831,368 | ||||
Butler, PA, School District, FGIC, 5.375%, 2018 | 500,000 | 504,090 | ||||
Chambersburg, PA, School District, FSA, 5%, 2011 (c) | 500,000 | 537,395 | ||||
Conneaut, PA, School District, “B”, FSA, 0%, 2031 | 1,150,000 | 307,556 | ||||
Conneaut, PA, School District, “B”, FSA, 0%, 2033 | 760,000 | 180,796 | ||||
Exeter Township, PA, School District, FGIC, 5%, 2025 | 1,000,000 | 1,010,180 |
Issuer | Shares/Par | Value ($) | ||||
General Obligations - Schools - continued | ||||||
Garnet Valley, PA, School District, FGIC, 5.5%, 2015 | $ | 750,000 | $ | 807,495 | ||
Gateway, PA, Allegheny School District, FGIC, 5.2%, 2023 | 1,000,000 | 1,032,950 | ||||
Gateway, PA, Allegheny School District, FGIC, 5%, 2032 | 1,890,000 | 1,871,516 | ||||
North Allegheny, PA, School District, FGIC, 5.05%, 2022 | 590,000 | 599,812 | ||||
North Schuylkill, PA, School District, FGIC, 5%, 2028 | 650,000 | 645,827 | ||||
Palmyra, PA, School District, FGIC, 5.375%, 2016 | 820,000 | 875,038 | ||||
Pennridge, PA, School District, MBIA, 5%, 2013 (c) | 50,000 | 54,519 | ||||
Pennridge, PA, School District, Unrefunded, MBIA, 5%, 2013 (c) | 450,000 | 490,667 | ||||
Pennsylvania Public School Building (Garnet Valley School District), AMBAC, 5.5%, 2011 (c) | 1,005,000 | 1,083,923 | ||||
Perkiomen Valley, PA, School District, FSA, 5%, 2011 (c) | 280,000 | 299,124 | ||||
Perkiomen Valley, PA, School District, FSA, 5%, 2019 | 220,000 | 226,409 | ||||
Perkiomen Valley, PA, School District, “A”, FSA, 5.25%, 2014 (c) | 1,000,000 | 1,111,860 | ||||
Philadelphia, PA, School District, MBIA, 6%, 2010 (c) | 500,000 | 533,995 | ||||
Philadelphia, PA, School District, FSA, 5.75%, 2011 (c) | 500,000 | 543,365 | ||||
Scranton, PA, School District, “A”, FSA, 5%, 2027 | 1,340,000 | 1,361,681 | ||||
Scranton, PA, School District, “A”, FSA, 5%, 2038 | 1,000,000 | 996,830 | ||||
South Park, PA, School District, FGIC, 5%, 2019 | 750,000 | 765,840 | ||||
State Public School Building Authority, PA School (Colonial Intermediate Unit 20), FGIC, 5%, 2030 | 500,000 | 492,085 | ||||
State Public School Building Authority, PA School (Delaware County Community College), FSAFSA, 5%, 2032 | 1,000,000 | 1,002,340 | ||||
State Public School Building Authority, PA School (Tuscarora School District), FSA, 5%, 2013 (c) | 1,000,000 | 1,090,190 | ||||
$ | 20,262,381 | |||||
Healthcare Revenue - Hospitals - 15.1% | ||||||
Allegheny County, PA, Hospital Development Authority Rev. (Jefferson Regional Medical Center), “A”, 4.75%, 2025 | $ | 850,000 | $ | 742,339 | ||
Allegheny County, PA, Hospital Development Authority Rev. (South Hills Health Systems), “B”, 6.75%, 2010 (c) | 555,000 | 603,751 | ||||
Allegheny County, PA, Hospital Development Authority Rev. (UPMC Health Systems), 5%, 2018 | 500,000 | 516,795 |
28
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Allegheny County, PA, Hospital Development Authority Rev. (UPMC Health Systems), MBIA, 5%, 2018 | $ | 500,000 | $ | 508,070 | ||
Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), 9.25%, 2010 (c) | 150,000 | 177,576 | ||||
Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), “A”, 5%, 2028 | 500,000 | 400,950 | ||||
Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), “B”, 9.25%, 2010 (c) | 50,000 | 59,192 | ||||
Blair County, PA, Hospital Authority Rev. (Altoona), AMBAC, 5.5%, 2008 | 470,000 | 473,384 | ||||
Delaware County, PA, Authority Hospital Rev. (Crozer Keystone Obligations Group), “A”, 5%, 2031 | 500,000 | 395,220 | ||||
Erie County, PA, Hospital Authority Rev. (Hamot Health Foundation), AMBAC, 5.25%, 2017 | 675,000 | 716,918 | ||||
Lancaster County, PA, Hospital Authority Rev., 5.5%, 2013 (c) | 500,000 | 556,030 | ||||
Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan Hospital), 5%, 2018 | 200,000 | 192,026 | ||||
Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan Hospital), 6%, 2035 | 350,000 | 339,423 | ||||
Lehigh County, PA, General Purpose Authority (Good Shepherd Group), “A”, 5.625%, 2034 | 350,000 | 352,947 | ||||
Lehigh County, PA, General Purpose Authority (Lehigh Valley Hospital), MBIA, 7%, 2016 | 250,000 | 289,668 | ||||
Lehigh County, PA, General Purpose Authority (Lehigh Valley Hospital), 5.25%, 2032 | 600,000 | 587,064 | ||||
Lehigh County, PA, General Purpose Authority (St. Luke’s Bethlehem Hospital), 5.375%, 2013 (c) | 600,000 | 659,514 | ||||
Lehigh County, PA, Hospital Rev. (Lehigh Valley Hospital), FSA, 5.25%, 2019 | 500,000 | 524,295 | ||||
Lycoming County, PA, Authority Hospital Rev. (Williamsport Hospital Obligation Group), CONNIE LEE, 5.375%, 2010 | 575,000 | 576,127 | ||||
Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center), 6%, 2014 (c) | 750,000 | 856,815 | ||||
Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center), 5%, 2027 | 250,000 | 225,190 | ||||
Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center), 5.125%, 2037 | 250,000 | 217,120 | ||||
Mount Lebanon, PA, Hospital Authority Rev. (St. Clair Memorial Hospital), 5.625%, 2032 | 400,000 | 403,336 | ||||
Pennsylvania Higher Educational Facilities Authority Rev. (UPMC Health), 6.25%, 2018 | 100,000 | 105,728 | ||||
Pennsylvania Higher Educational Facilities Authority Rev. (UPMC Health), ETM, 6%, 2031 (c) | 650,000 | 676,085 | ||||
Philadelphia, PA, Health & Educational Facilities Rev. (Jeane Health), ETM, 6.6%, 2010 | 90,000 | 94,335 | ||||
Philadelphia, PA, Hospitals & Higher Education Facilities Authority (Children’s Hospital), MBIA, 4.5%, 2037 | 1,000,000 | 892,630 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Philadelphia, PA, Hospitals & Higher Education Facilities Authority (Temple University Health System), 5.5%, 2026 | $ | 1,000,000 | $ | 941,740 | ||
Sayre, PA, Health Care Facilities Authority Rev. (Guthrie Health), “A”, 5.875%, 2011 (c) | 385,000 | 429,383 | ||||
Sayre, PA, Health Care Facilities Authority Rev. (Guthrie Health), “A”, 5.875%, 2031 | 115,000 | 117,072 | ||||
Sayre, PA, Health Care Facilities Authority Rev. (Latrobe Hospital), AMBAC, 5.25%, 2012 (c) | 585,000 | 640,973 | ||||
South Central, PA, General Authority Rev.,, 5.625%, 2011 (c) | 490,000 | 538,603 | ||||
South Central, PA, General Authority Rev., Wellspan Health, ETM, 5.625%, 2026 (c) | 110,000 | 119,563 | ||||
St. Mary’s Hospital Authority, PA, Health Systems Rev. (Catholic Health East), “B”, 5.375%, 2014 (c) | 750,000 | 846,075 | ||||
West Shore, PA, Hospital Authority Rev. (Holy Spirit Hospital), 6.25%, 2032 | 350,000 | 350,536 | ||||
$ | 16,126,473 | |||||
Healthcare Revenue - Long Term Care - 1.8% | ||||||
Bucks County, PA, Industrial Development Authority Rev. (Lutheran Community Telford Center), 5.75%, 2037 | $ | 300,000 | $ | 258,072 | ||
Bucks County, PA, Industrial Development Authority, Retirement Community Rev. (Ann’s Choice, Inc.), 6.125%, 2025 | 250,000 | 236,590 | ||||
Chartiers Valley, PA, Industrial & Commercial Development Authority (Asbury Health Center Project), 5.75%, 2022 | 250,000 | 237,628 | ||||
Cumberland County, PA, Municipal Authority, Retirement Community Rev. (Wesley), “A”, 7.25%, 2035 | 110,000 | 130,726 | ||||
Cumberland County, PA, Municipal Authority, Retirement Community Rev. (Wesley), “A”, 7.25%, 2035 | 40,000 | 47,537 | ||||
Lancaster County, PA, Hospital Authority Rev. (Brethren), 6.5%, 2040 | 250,000 | 246,318 | ||||
Lancaster County, PA, Hospital Authority Rev. (Willow Valley Retirement Project), 5.875%, 2031 | 500,000 | 505,275 | ||||
Montgomery County, PA, Industrial Development Authority Rev. (Whitemarsh Continuing Care), 6.25%, 2035 | 250,000 | 229,668 | ||||
$ | 1,891,814 | |||||
Human Services - 0.1% | ||||||
Montgomery County, PA, Industrial Development Authority (Wordsworth Academy), 8%, 2024 | $ | 150,000 | $ | 150,153 | ||
Industrial Revenue - Environmental Services - 1.0% | ||||||
New Morgan, PA, Industrial Development Authority, Solid Waste Disposal Rev. (New Morgan Landfill Co., Inc./Browning Ferris, Inc.), 6.5%, 2019 | $ | 530,000 | $ | 506,007 |
29
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Industrial Revenue - Environmental Services - continued | ||||||
Westmoreland County, PA, Industrial Development Corp. (Waste Management), LOC, 5.1%, 2018 (a) | $ | 500,000 | $ | 504,150 | ||
$ | 1,010,157 | |||||
Industrial Revenue - Other - 1.6% | ||||||
Bucks County, PA, Industrial Development Authority Rev. (USX Corp.), 5.4%, 2017 (a) | $ | 300,000 | $ | 311,244 | ||
Pennsylvania Economic Development Financing Authority Rev. (Amtrak), 6.125%, 2021 | 150,000 | 152,828 | ||||
Pennsylvania Economic Development Financing Authority, Solid Waste Disposal Rev. (Procter & Gamble), 5.375%, 2031 | 1,000,000 | 1,001,910 | ||||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 270,000 | 264,244 | ||||
$ | 1,730,226 | |||||
Industrial Revenue - Paper - 0.6% | ||||||
Erie County, PA, Industrial Development Authority, Pollution Control (International Paper Co.), “A”, 5.3%, 2012 | $ | 650,000 | $ | 665,477 | ||
Parking - 1.5% | ||||||
Philadelphia, PA, Public Parking Authority Rev., FSA, 5.625%, 2015 | $ | 1,000,000 | $ | 1,043,440 | ||
Pittsburgh, PA, Public Parking Authority Rev., AMBAC, 6%, 2010 (c) | 500,000 | 538,875 | ||||
$ | 1,582,315 | |||||
Sales & Excise Tax Revenue - 0.5% | ||||||
Pittsburgh & Allegheny County, PA, Sales Tax Rev. (Public Auditorium Hotel Room), AMBAC, 5.25%, 2017 | $ | 500,000 | $ | 515,610 | ||
Single Family Housing - Local - 1.1% | ||||||
Allegheny County, PA, Residential Financing Authority, Single Family Mortgage Rev., “RR”, 4.75%, 2025 | $ | 375,000 | $ | 341,081 | ||
Allegheny County, PA, Residential Financing Authority, Single Family Mortgage Rev., “VV”, GNMA, 4.95%, 2037 | 900,000 | 791,244 | ||||
$ | 1,132,325 | |||||
Single Family Housing - State - 5.7% | ||||||
Pennsylvania Housing Finance Agency Rev., “96 A”, 4.7%, 2037 | $ | 750,000 | $ | 634,080 | ||
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., 5.1%, 2020 | 1,405,000 | 1,379,808 | ||||
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., 5.25%, 2021 | 750,000 | 740,963 | ||||
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., 5.25%, 2033 | 360,000 | 361,296 | ||||
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., 5%, 2034 | 495,000 | 494,564 | ||||
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “93-A”, 5.75%, 2037 | 680,000 | 692,022 |
Issuer | Shares/Par | Value ($) | ||||
Single Family Housing - State - continued | ||||||
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “94-A”, 5.1%, 2031 | $ | 500,000 | $ | 460,950 | ||
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “95-A”, 4.875%, 2031 | 1,000,000 | 870,990 | ||||
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., “A”, 4.875%, 2026 | 500,000 | 457,615 | ||||
$ | 6,092,288 | |||||
Solid Waste Revenue - 0.3% | ||||||
Delaware County, PA, Industrial Development Authority, Resource Recovery Facilities Rev. (American Ref-Fuel Co.), “A”, 6.2%, 2019 | $ | 300,000 | $ | 300,552 | ||
State & Local Agencies - 3.6% | ||||||
Delaware Valley, PA, Regional Finance Authority, RITES, AMBAC, 8.22%, 2018 (p) | $ | 500,000 | $ | 600,040 | ||
Northumberland County, PA (Country Careers & Arts Center), 6.65%, 2020 | 225,000 | 227,768 | ||||
Philadelphia, PA, Industrial Development Authority, FSA, 5.125%, 2011 (c) | 1,000,000 | 1,089,450 | ||||
Philadelphia, PA, Industrial Development Authority, FSA, 5.25%, 2011 (c) | 750,000 | 820,193 | ||||
Puerto Rico Public Finance Corp., “A”, AMBAC, 5.375%, 2013 (u) | 1,000,000 | 1,093,220 | ||||
$ | 3,830,671 | |||||
Student Loan Revenue - 1.4% | ||||||
Pennsylvania Higher Education, Capital Acquistion Rev., MBIA, 5%, 2026 | $ | 1,500,000 | $ | 1,508,715 | ||
Tax - Other - 0.6% | ||||||
Pittsburgh & Allegheny County, PA, Sales Tax Rev. (Public Auditorium Hotel Room), AMBAC, 5.25%, 2013 | $ | 500,000 | $ | 520,390 | ||
Virgin Islands Public Finance Authority Rev., “A”, 5.25%, 2024 | 135,000 | 132,087 | ||||
$ | 652,477 | |||||
Tax Assessment - 0.2% | ||||||
Washington County, PA, Redevelopment Authority (Victory Centre Project), “A”, 5.45%, 2035 | $ | 250,000 | $ | 215,693 | ||
Tobacco - 0.4% | ||||||
Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 | $ | 305,000 | $ | 291,055 | ||
Virgin Islands Tobacco Settlement Financing Corp., 5%, 2021 | 130,000 | 128,353 | ||||
$ | 419,408 | |||||
Toll Roads - 0.3% | ||||||
Pennsylvania Turnpike Commission, 5.5%, 2015 | $ | 250,000 | $ | 268,000 | ||
Transportation - Special Tax - 6.8% | ||||||
Allegheny County, PA, Port Authority Special Rev., MBIA, 6.25%, 2009 (c) | $ | 500,000 | $ | 525,160 | ||
Commonwealth of Puerto Rico Highway & Transportation Authority, MBIA, 5.5%, 2020 | 3,000,000 | 3,209,730 |
30
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Transportation - Special Tax - continued | ||||||
Pennsylvania Turnpike Commission, MBIA, 5%, 2024 | $ | 1,775,000 | $ | 1,803,737 | ||
Puerto Rico Highway & Transportation Authority, “Y”, 5.5%, 2016 (c) | 1,020,000 | 1,173,612 | ||||
Southeastern Pennsylvania Transportation Authority, Special Rev., FGIC, 5.25%, 2013 | 500,000 | 515,395 | ||||
$ | 7,227,634 | |||||
Universities - Colleges - 12.4% | ||||||
Allegheny County, PA, (Chatham College), 5.95%, 2032 | $ | 335,000 | $ | 337,995 | ||
Allegheny County, PA, Higher Education Building Authority Rev. (Duquesne University), “A”, XLCA, 5%, 2024 | 1,000,000 | 1,002,550 | ||||
Cumberland County, PA, Municipal Authority (Dickinson College), AMBAC, 5.55%, 2010 (c) | 535,000 | 577,987 | ||||
Cumberland County, PA, Municipal Authority College Rev. (Dickinson College), 5%, 2026 | 1,000,000 | 976,320 | ||||
Delaware County, PA, Authority College Rev. (Neumann College), 6.125%, 2034 | 750,000 | 746,588 | ||||
Erie, PA, Higher Educational Building Authority Rev. (Mercyhurst College), “B”, 5%, 2023 | 500,000 | 481,630 | ||||
Harrisburg, PA, University of Science, “A”, 5.4%, 2016 | 300,000 | 293,643 | ||||
Lycoming County, PA, (College of Technology), AMBAC, 5.25%, 2032 | 750,000 | 757,913 | ||||
Pennsylvania Higher Educational Facilities (Allegheny College), 4.75%, 2031 | 500,000 | 441,670 | ||||
Pennsylvania Higher Educational Facilities (Philadelphia University), 5.5%, 2020 | 500,000 | 517,905 | ||||
Pennsylvania Higher Educational Facilities Authority Rev. (Drexel University), 5.2%, 2032 | 500,000 | 490,555 | ||||
Pennsylvania Higher Educational Facilities Authority Rev. (Drexel University), MBIA, 5%, 2037 | 1,530,000 | 1,513,736 | ||||
Pennsylvania Higher Educational Facilities Authority Rev. (Marywood University), MBIA, 5.5%, 2010 (c) | 300,000 | 320,181 | ||||
Pennsylvania Higher Educational Facilities Authority Rev. (Widener University), 5.375%, 2029 | 300,000 | 289,473 | ||||
Pennsylvania Higher Educational Facilities Authority Rev. (Widener University), 5%, 2031 | 300,000 | 267,603 | ||||
Pennsylvania Public School Building Authority (Delaware County College), MBIA, 5.75%, 2010 (c) | 500,000 | 541,330 | ||||
Pennsylvania State University, “A”, 5%, 2029 | 1,000,000 | 1,007,590 | ||||
State Public School Building Authority, PA, Jefferson County (Dubois Technical School), FGIC, 5%, 2026 | 1,000,000 | 1,000,470 | ||||
Union County, PA, Higher Educational Facilities Financing Authority, University Rev. (Bucknell University), 5.25%, 2021 | 1,000,000 | 1,049,160 | ||||
Wilkes-Barre, PA, Finance Authority Rev. (Wilkes University), 5%, 2037 | 750,000 | 641,670 | ||||
$ | 13,255,969 |
Issuer | Shares/Par | Value ($) | ||||
Universities - Secondary Schools - 0.6% | ||||||
Pennsylvania Economic Development Financing Authority (Germantown Friends School Project), 5.35%, 2031 | $ | 600,000 | $ | 606,024 | ||
Utilities - Cogeneration - 0.3% | ||||||
Carbon County, PA, Industrial Development Authority Rev. (Panther Creek Partners), 6.65%, 2010 | $ | 100,000 | $ | 101,214 | ||
Pennsylvania Economic Development Financing Authority Rev., Resources Recovery Rev. (Colver), “G”, 5.125%, 2015 | 100,000 | 96,283 | ||||
Pennsylvania Economic Development Financing Authority Rev., Resources Recovery Rev. (Northampton Generating), 6.4%, 2009 | 100,000 | 100,209 | ||||
$ | 297,706 | |||||
Utilities - Municipal Owned - 2.5% | ||||||
Philadelphia, PA, Gas Works Rev., FSA, 5.5%, 2009 (c) | $ | 1,000,000 | $ | 1,052,150 | ||
Philadelphia, PA, Gas Works Rev., FSA, 5.5%, 2011 (c) | 500,000 | 546,755 | ||||
Philadelphia, PA, Gas Works Rev. (1998 General Ordinance), FSA, 5.25%, 2013 (c) | 1,000,000 | 1,110,500 | ||||
$ | 2,709,405 | |||||
Water & Sewer Utility Revenue - 10.6% | ||||||
Allegheny County, PA, Sewer Rev., MBIA, 5.75%, 2010 (c) | $ | 750,000 | $ | 821,003 | ||
Bucks County, PA, (Suburban Water Co.), FGIC, 5.55%, 2032 | 1,000,000 | 1,014,710 | ||||
Delaware County, PA, Water Quality Control Authority, Sewer Rev., FGIC, 5%, 2011 (c) | 750,000 | 807,113 | ||||
Fairview Township, PA, Sewer Rev., FGIC, 5.05%, 2018 | 750,000 | 774,218 | ||||
Johnstown, PA, Redevelopment Authority, Sewer Rev., “A”, FSA, 5%, 2014 (c) | 1,500,000 | 1,657,995 | ||||
Lancaster County, PA, Water & Sewer Authority Rev., MBIA, 5%, 2028 | 440,000 | 442,262 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 1,000,000 | 1,022,930 | ||||
Unity Township, PA, Municipal Authority Sewer Rev., FSA, 5%, 2034 (f) | 1,660,000 | 1,669,230 | ||||
University Area Joint Authority, Sewer Rev., MBIA, 5%, 2023 | 1,500,000 | 1,509,210 | ||||
Virgin Islands Water & Power Authority Rev., RADIAN, 5.3%, 2018 | 500,000 | 505,715 | ||||
Westmoreland County, PA, Municipal Authority Services Rev., FSA, 5.25%, 2015 (c) | 1,000,000 | 1,118,240 | ||||
$ | 11,342,626 | |||||
Total Municipal Bonds (Identified Cost, $104,805,724) | $ | 106,019,464 | ||||
Floating Rate Demand Notes - 0.9% | ||||||
East Baton Rouge, LA, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | $ | 200,000 | $ | 200,000 | ||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | 200,000 | 200,000 |
31
Table of Contents
Portfolio of Investments – continued
Floating Rate Demand Notes - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Mt. Vernon Industrial Pollution Control Rev. (General Electric Co.), 1.17%, due 4/01/08 | $ | 500,000 | $ | 500,000 | ||
Sublette County, WY, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | 100,000 | 100,000 | ||||
Total Floating Rate Demand Notes, at Identified Cost and Value | $ | 1,000,000 | ||||
Total Investments (Identified Cost, $105,805,724) (k) | $ | 107,019,464 | ||||
Other Assets, Less Liabilities - (0.3)% | (304,676) | |||||
Net Assets - 100.0% | $ | 106,714,788 |
Derivative Contracts at 3/31/08
Futures contracts outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ (Depreciation) | ||||
U.S. Treasury Bond 30 yr (Short) | 6 | $712,781 | Jun-08 | $9,667 |
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
32
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® SOUTH CAROLINA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 100.0% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport & Port Revenue - 2.1% | ||||||
Horry County, SC, “A”, FSA, 5.7%, 2027 | $ | 635,000 | $ | 645,788 | ||
Richland Lexington, SC, Airport Rev. (Columbia Airport), FSA, 5.125%, 2025 | 1,500,000 | 1,492,379 | ||||
Richland Lexington, SC, Airport Rev. (Columbia Airport), “A”, FSA, 5%, 2026 | 1,000,000 | 1,004,329 | ||||
$ | 3,142,496 | |||||
General Obligations - General Purpose - 11.0% | ||||||
Commonwealth of Puerto Rico, ETM, 5.5%, 2018 (c)(u) | $ | 4,000,000 | $ | 4,324,000 | ||
Commonwealth of Puerto Rico, ETM, 5.5%, 2019 (c)(u) | 3,500,000 | 3,783,500 | ||||
Commonwealth of Puerto Rico, Public Improvement, MBIA, 5.75%, 2010 (c) | 4,000,000 | 4,282,759 | ||||
Hilton Head Island, SC, Rev., MBIA, 5.125%, 2022 | 1,000,000 | 1,035,729 | ||||
Horry County, SC, Hospital Fee Special Obligation, 6%, 2015 | 915,000 | 968,508 | ||||
Puerto Rico Commonwealth, “A”, 5.25%, 2016 (c) | 615,000 | 696,641 | ||||
Puerto Rico Commonwealth, “A”, 5.25%, 2030 | 385,000 | 372,222 | ||||
Richland Lexington Riverbanks, SC, Parks District, FGIC, 5.8%, 2018 | 1,000,000 | 1,035,790 | ||||
$ | 16,499,149 | |||||
General Obligations - Improvement - 1.4% | ||||||
Guam Government, “A”, 5.25%, 2037 | $ | 280,000 | $ | 237,894 | ||
Puerto Rico Municipal Finance Agency, FSA, 6%, 2009 (c)(u) | 1,700,000 | 1,806,794 | ||||
$ | 2,044,688 | |||||
General Obligations - Schools - 10.0% | ||||||
Anderson County, SC, School District, “B”, 5.5%, 2010 (c) | $ | 1,465,000 | $ | 1,566,437 | ||
Beaufort County, SC, School District, “A”, FSA, 4.25%, 2032 | 1,000,000 | 897,020 | ||||
Chesterfield County, SC, School District, FSA, 5%, 2023 | 3,000,000 | 3,072,570 | ||||
Darlington County, SC, School District, FSA, 5%, 2027 | 2,770,000 | 2,820,082 | ||||
Orangeburg County, SC, Consolidated School District, FSA, 5.25%, 2020 | 1,065,000 | 1,117,835 | ||||
Orangeburg County, SC, Consolidated School District, FSA, 5.375%, 2022 | 2,050,000 | 2,161,397 | ||||
Richland County, SC, School District, 5.1%, 2021 | 1,750,000 | 1,802,343 | ||||
York County, SC, School District, 5%, 2030 | 1,570,000 | 1,572,324 | ||||
$ | 15,010,008 | |||||
Healthcare Revenue - Hospitals - 17.8% | ||||||
Charleston County, SC, Hospital Facilities Rev. (Medical Society Health), ETM, MBIA, 5%, 2022 (c) | $ | 2,450,000 | $ | 2,484,276 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Florence County, SC, Hospital Rev. (McLeod Regional Medical Center), “A”, FSA, 5%, 2031 | $ | 2,000,000 | $ | 1,945,920 | ||
Florence County, SC, Hospital Rev. (McLeod Regional Medical Center), “A”, FSA, 5.25%, 2034 | 2,000,000 | 1,999,920 | ||||
Greenville, SC, Hospital Systems, Hospital Facilities Rev., 6%, 2020 | 3,400,000 | 3,785,288 | ||||
Greenwood County, SC, Hospital Facilities Rev. (Self Memorial Hospital), 5.5%, 2021 | 1,000,000 | 1,022,920 | ||||
Lexington County, SC, Health Services District, Inc., Hospital Rev., 5.5%, 2014 (c) | 250,000 | 280,643 | ||||
Lexington County, SC, Health Services District, Inc., Hospital Rev., 5.5%, 2014 (c) | 250,000 | 280,643 | ||||
Lexington County, SC, Health Services District, Inc., Hospital Rev., 5%, 2032 | 1,500,000 | 1,369,245 | ||||
Lexington County, SC, Health Services District, Inc., Hospital Rev., Refunding & Improvement, 5.5%, 2013 (c) | 1,000,000 | 1,122,580 | ||||
South Carolina Jobs & Economic Development Authority (Bon Secours - St. Francis Medical Center, Inc.), 5.625%, 2012 (c) | 260,000 | 289,923 | ||||
South Carolina Jobs & Economic Development Authority (Bon Secours - St. Francis Medical Center, Inc.), 5.625%, 2030 | 990,000 | 983,040 | ||||
South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Georgetown Memorial Hospital), AMBAC, 6%, 2014 | 1,000,000 | 1,049,660 | ||||
South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Georgetown Memorial Hospital), RADIAN, 5.25%, 2021 | 1,500,000 | 1,508,520 | ||||
South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Georgetown Memorial Hospital), AMBAC, 5%, 2023 | 1,000,000 | 1,008,200 | ||||
South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Palmetto Health Alliance), 6.25%, 2031 | 750,000 | 755,648 | ||||
South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Tuomey Health), CIFG, 5%, 2030 | 1,000,000 | 970,980 | ||||
Spartanburg County, SC, Health Service Rev., AMBAC, 5.3%, 2020 | 2,500,000 | 2,503,125 | ||||
Spartanburg County, SC, Health Service Rev., AMBAC, 5.3%, 2025 | 1,000,000 | 1,001,250 | ||||
Spartanburg County, SC, Health Service Rev., FSA, 5.25%, 2032 | 2,250,000 | 2,282,580 | ||||
$ | 26,644,361 | |||||
Healthcare Revenue - Long Term Care - 1.8% | ||||||
Greenville County, SC, Hospital Rev. (Chestnut Hill), “A”, 8%, 2015 | $ | 1,220,000 | $ | 1,173,201 | ||
South Carolina Jobs & Economic Development Authority Rev. (Woodlands at Furman), “A”, 6%, 2042 | 500,000 | 440,965 |
33
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Long Term Care - continued | ||||||
South Carolina Jobs & Economic Development Authority Rev., First Mortgage (Lutheran Homes of South Carolina), 5.625%, 2042 | $ | 400,000 | $ | 326,316 | ||
South Carolina Jobs & Economic Development Authority, Health & Facilities Rev., First Mortgage (Wesley Commons), 5.125%, 2026 | 400,000 | 336,000 | ||||
South Carolina Jobs & Economic Development Authority, Residential Care Facilities Rev. (Episcopal Home), “A”, 6.375%, 2032 | 400,000 | 378,588 | ||||
$ | 2,655,070 | |||||
Industrial Revenue - Chemicals - 0.6% | ||||||
York County, SC, Industrial Rev. (Hoechst Celanese), 5.7%, 2024 | $ | 1,000,000 | $ | 879,630 | ||
Industrial Revenue - Other - 1.0% | ||||||
Calhoun County, SC, Solid Waste Disposal Facilities Rev. (Carolina Eastman Co.), ETM, 6.75%, 2017 (c) | $ | 1,000,000 | $ | 1,202,510 | ||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 385,000 | 376,792 | ||||
$ | 1,579,302 | |||||
Industrial Revenue - Paper - 0.7% | ||||||
Richland County, SC, Environmental Improvement Rev. (International Paper), “A”, 6.1%, 2023 | $ | 1,000,000 | $ | 989,360 | ||
Miscellaneous Revenue - Entertainment & Tourism - 1.5% | ||||||
Myrtle Beach, SC, Hospitality Fee Rev., “A”, FGIC, 5%, 2036 | $ | 510,000 | $ | 472,974 | ||
South Carolina Jobs & Economic Development Authority Rev. (Myrtle Beach Convention), “B”, MBIA, 5.125%, 2018 | 570,000 | 587,117 | ||||
South Carolina Jobs & Economic Development Authority Rev. (Myrtle Beach Convention), “B”, MBIA, 5.125%, 2019 | 595,000 | 614,052 | ||||
South Carolina Jobs & Economic Development Authority Rev. (Myrtle Beach Convention), “B”, MBIA, 5.125%, 2020 | 630,000 | 648,736 | ||||
$ | 2,322,879 | |||||
Multi-Family Housing Revenue - 1.3% | ||||||
North Charleston SC, Housing Authority Rev. (Horizon Village), “A”, FHA, 5%, 2038 | $ | 1,000,000 | $ | 883,660 | ||
North Charleston SC, Housing Authority Rev. (Horizon Village), “A”, FHA, 5.1%, 2041 | 1,210,000 | 1,087,536 | ||||
$ | 1,971,196 | |||||
Sales & Excise Tax Revenue - 0.5% | ||||||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | $ | 735,000 | $ | 690,856 | ||
Single Family Housing - State - 4.5% | ||||||
South Carolina Housing, Finance & Development Authority Mortgage Rev., “A-2”, FSA, 5.5%, 2034 | $ | 785,000 | $ | 789,066 |
Issuer | Shares/Par | Value ($) | ||||
Single Family Housing - State - continued | ||||||
South Carolina Housing, Finance & Development Authority Mortgage Rev., “A-2”, FSA, 5.2%, 2035 | $ | 970,000 | $ | 886,464 | ||
South Carolina Housing, Finance & Development Authority Rev., 5.55%, 2038 | 1,000,000 | 954,860 | ||||
South Carolina Housing, Finance & Development Authority Rev., “A-2”, FSA, 6%, 2020 | 370,000 | 371,791 | ||||
South Carolina Housing, Finance & Development Authority Rev., “A-2”, FSA, 5.35%, 2024 | 1,635,000 | 1,622,770 | ||||
South Carolina Housing, Finance & Development Authority Rev., “A-2”, AMBAC, 5.15%, 2037 | 995,000 | 904,564 | ||||
South Carolina Housing, Finance & Development Authority Rev., “C-2”, FSA, 4.6%, 2032 | 1,500,000 | 1,269,420 | ||||
$ | 6,798,935 | |||||
Solid Waste Revenue - 0.6% | ||||||
Three Rivers, SC, Solid Waste Authority Rev., 5%, 2028 | $ | 1,000,000 | $ | 931,200 | ||
State & Agency - Other - 0.0% | ||||||
South Carolina Water Resources Authority Rev. (Local Government Program), “A”, 7.25%, 2020 | $ | 5,000 | $ | 5,017 | ||
State & Local Agencies - 5.0% | ||||||
North Charleston, SC, Municipal Golf Course Mortgage Rev., 5.5%, 2009 (c) | $ | 1,000,000 | $ | 1,047,130 | ||
Puerto Rico Public Finance Corp., AMBAC, 5.375%, 2019 (u) | 2,600,000 | 2,831,088 | ||||
Puerto Rico Public Finance Corp., “A”, AMBAC, 5.375%, 2013 (c)(u) | 2,750,000 | 3,006,355 | ||||
Spartanburg, SC, Public Facilities Corp. (Renaissance Park), AMBAC, 5.125%, 2025 | 685,000 | 698,488 | ||||
$ | 7,583,061 | |||||
Tax - Other - 0.1% | ||||||
Virgin Islands Public Finance Authority Rev., “A”, 5.25%, 2024 | $ | 180,000 | $ | 176,116 | ||
Tax Assessment - 0.3% | ||||||
Lancaster County, SC, Assessment Rev. (Sun City Carolina Lakes), 5.45%, 2037 | $ | 500,000 | $ | 401,005 | ||
Tobacco - 0.7% | ||||||
South Carolina Tobacco Settlement Authority Rev., “B”, 6.375%, 2028 | $ | 1,000,000 | $ | 990,270 | ||
Transportation - Special Tax - 3.5% | ||||||
South Carolina Transportation Infrastructure Rev., “A”, MBIA, 5.375%, 2009 (c) | $ | 1,000,000 | $ | 1,059,460 | ||
South Carolina Transportation Infrastructure Rev., “A”, AMBAC, 5%, 2023 | 500,000 | 509,455 | ||||
South Carolina Transportation Infrastructure Rev., “A”, AMBAC, 5%, 2027 | 2,000,000 | 2,010,480 |
34
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Transportation - Special Tax - continued | ||||||
South Carolina Transportation Infrastructure Rev., “A”, AMBAC, 5%, 2033 | $ | 1,645,000 | $ | 1,635,607 | ||
$ | 5,215,002 | |||||
Universities - Colleges - 12.8% | ||||||
Clemson University, University Rev., AMBAC, 6.25%, 2009 (c) | $ | 1,250,000 | $ | 1,318,850 | ||
College of Charleston, SC, Academic & Administrative Facilities Rev., “B”, XLCA, 5%, 2024 | 800,000 | 789,600 | ||||
College of Charleston, SC, Academic & Administrative Facilities Rev., “B”, XLCA, 5.125%, 2034 | 1,510,000 | 1,422,224 | ||||
College of Charleston, SC, Higher Education Facility Rev., “A”, FGIC, 5.25%, 2028 | 2,435,000 | 2,474,398 | ||||
Educational Facilities Authority Private Non-Profit Institutions of Higher Learning (Wofford College), “A’”, 5%, 2036 | 1,000,000 | 945,340 | ||||
South Carolina Educational Facilities Authority (Furman University), AMBAC, 5.375%, 2020 | 1,245,000 | 1,285,550 | ||||
South Carolina Educational Facilities Authority (Furman University), AMBAC, 5.5%, 2030 | 2,000,000 | 2,055,540 | ||||
South Carolina Educational Facilities Authority (Furman University), 5%, 2038 | 2,000,000 | 1,942,120 | ||||
South Carolina Jobs & Economic Development Authority, Student Housing Rev. (Francis Marion University), “A”, MBIA, 5%, 2034 | 1,595,000 | 1,583,341 | ||||
University of South Carolina, University Rev., “A”, FGIC, 5.625%, 2010 (c) | 1,555,000 | 1,665,389 | ||||
University of South Carolina, University Rev., “A”, AMBAC, 5%, 2034 | 3,665,000 | 3,664,853 | ||||
$ | 19,147,205 | |||||
Utilities - Investor Owned - 1.3% | ||||||
Orangeburg County, SC, Solid Waste Disposal Facilities Rev., Electric & Gas, AMBAC, 5.7%, 2024 | $ | 2,000,000 | $ | 1,987,180 | ||
Utilities - Municipal Owned - 7.9% | ||||||
Camden, SC, Public Utilities Rev., MBIA, 5.5%, 2017 | $ | 75,000 | $ | 75,859 | ||
Easley, SC, Utility Rev., FSA, 5%, 2012 (c) | 1,000,000 | 1,093,640 | ||||
Easley, SC, Utility Rev., Refunding & Improvement, FSA, 5%, 2015 (c) | 2,000,000 | 2,176,140 | ||||
Greenwood, SC, Combined Public Utility, Refunding & Improvement Systems, MBIA, 5%, 2021 | 175,000 | 180,555 | ||||
Piedmont, SC, Municipal Power Agency, FGIC, 6.25%, 2021 | 2,700,000 | 3,004,209 | ||||
Puerto Rico Electric Power Authority, FSA, RITES, 7.59%, 2008 (c)(n)(v) | 1,000,000 | 1,045,740 | ||||
Puerto Rico Electric Power Authority, “TT”, 5%, 2027 | 530,000 | 515,282 | ||||
South Carolina Public Service Authority, “A”, MBIA, 5.5%, 2010 (c) | 200,000 | 213,010 |
Issuer | Shares/Par | Value ($) | ||||
Utilities - Municipal Owned - continued | ||||||
South Carolina Public Service Authority, “A”, AMBAC, 5%, 2034 | $ | 2,000,000 | $ | 2,020,720 | ||
South Carolina Public Service Authority, “B”, FSA, 5.125%, 2037 | 1,500,000 | 1,512,840 | ||||
$ | 11,837,995 | |||||
Water & Sewer Utility Revenue - 13.6% | ||||||
Anderson County, SC, Joint Municipal Water, FSA, 5%, 2032 | $ | 1,000,000 | $ | 1,006,820 | ||
Anderson County, SC, Water & Sewer Systems Rev., FGIC, 5.125%, 2032 | 2,000,000 | 2,014,000 | ||||
Beaufort-Jasper, SC, Waterworks & Sewer Systems Rev., FSA, 4.5%, 2031 | 1,000,000 | 930,970 | ||||
Charleston, SC, Waterworks & Sewer Rev., Capital Improvement, “B”, 5%, 2013 (c) | 1,000,000 | 1,090,560 | ||||
Columbia, SC, Waterworks & Sewer Systems Rev., 6%, 2010 (c) | 2,000,000 | 2,132,000 | ||||
Columbia, SC, Waterworks & Sewer Systems Rev., FSA, 5%, 2029 | 1,020,000 | 1,029,323 | ||||
Greenville, SC, Stormwater Systems, FSA, 5%, 2022 | 595,000 | 613,219 | ||||
Greenwood, SC, Sewer Systems Rev., N, 5%, 2030 | 1,000,000 | 1,006,490 | ||||
Lugoff-Elgin, SC, Water Authority Waterworks Systems Rev., MBIA, 5.125%, 2032 | 920,000 | 914,241 | ||||
Myrtle Beach, SC, Water & Sewer Authority Rev., FSA, 4.5%, 2028 | 2,000,000 | 1,906,260 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 2,000,000 | 2,045,860 | ||||
Rock Hill, SC, Utility Systems Rev., Refunding & Improvement, “A”, FSA, 5.375%, 2023 | 500,000 | 525,440 | ||||
Spartanburg, SC, Water & Sewer Authority Rev., “B”, MBIA, 5.25%, 2030 | 1,250,000 | 1,270,875 | ||||
Spartanburg, SC, Waterworks Rev., “A”, FSA, 4.375%, 2028 (f) | 2,000,000 | 1,877,080 | ||||
Sumter, SC, Waterworks & Sewer Systems Rev., XLCA, 5%, 2025 | 540,000 | 541,604 | ||||
York County, SC, Water & Sewer Rev., Refunding & Capital Improvement, MBIA, 5%, 2027 | 1,490,000 | 1,506,733 | ||||
$ | 20,411,475 | |||||
Total Municipal Bonds (Identified Cost, $147,601,160) | $ | 149,913,456 | ||||
Floating Rate Demand Notes - 1.2% | ||||||
East Baton Rouge, LA, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | $ | 1,500,000 | $ | 1,500,000 | ||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “B”, 1.17%, due 4/01/08 | 200,000 | 200,000 | ||||
Sublette County, WY, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | 100,000 | 100,000 | ||||
Total Floating Rate Demand Notes, at Identified Cost and Value | $ | 1,800,000 | ||||
Total Investments (Identified Cost, $149,401,160) (k) | $ | 151,713,456 | ||||
Other Assets, Less Liabilities - (1.2)% | (1,795,260) | |||||
Net Assets - 100.0% | $ | 149,918,196 |
35
Table of Contents
Portfolio of Investments – continued
Derivative Contracts at 3/31/08
Futures contracts outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ (Depreciation) | ||||
U.S. Treasury Bond 30 yr (Short) | 9 | 1,069,172 | Jun-08 | $13,609 |
Swap Agreements at 3/31/08
Expiration | Notional | Counterparty | Cash Flows to Receive | Cash Flows to Pay | Value | ||||||||
Interest Rate Swaps | |||||||||||||
7/09/23 | USD | 1,000,000 | Merrill Lynch Capital Services | 7-Day BMA | 3.581% (fixed rate) | $(3,936 | ) | ||||||
8/06/28 | USD | 3,000,000 | Merrill Lynch Capital Services | 7-Day BMA | 3.673% (fixed rate) | 7,451 | |||||||
$3,515 |
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
36
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® TENNESSEE MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 94.5% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport and Port Revenue - 1.4% | ||||||
Memphis-Shelby County, TN, Airport Authority Facilities Rev., FSA, 5.125%, 2021 | $ | 1,500,000 | $ | 1,501,335 | ||
General Obligations - General Purpose - 6.0% | ||||||
Chattanooga, TN, Public Improvement, 5%, 2009 (c) | $ | 1,570,000 | $ | 1,632,078 | ||
Commonwealth of Puerto Rico, Unrefunded Public Improvement, FSA, 5%, 2024 | 770,000 | 773,373 | ||||
Metropolitan Government of Nashville & Davidson County, TN, 5%, 2028 | 2,000,000 | 2,026,040 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 480,000 | 526,699 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2031 | 525,000 | 556,280 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “L”, 5.5%, 2021 | 1,000,000 | 1,110,260 | ||||
$ | 6,624,730 | |||||
General Obligations - Improvement - 0.2% | ||||||
Guam Government, “A”, 5.25%, 2037 | $ | 215,000 | $ | 182,668 | ||
General Obligations - Schools - 8.4% | ||||||
Gibson County, TN, School District, MBIA, 5.75%, 2009 (c) | $ | 455,000 | $ | 473,095 | ||
Gibson County, TN, School District, MBIA, 5.75%, 2016 | 190,000 | 194,855 | ||||
Giles County, TN, School Improvement, FGIC, 5.75%, 2010 (c) | 1,980,000 | 2,103,710 | ||||
Rutherford County, TN, School & Public Improvement, 5%, 2022 | 1,510,000 | 1,549,668 | ||||
Rutherford County, TN, School District, 5.875%, 2010 (c) | 2,000,000 | 2,141,040 | ||||
Rutherford County, TN, School District, 5.875%, 2010 (c) | 1,100,000 | 1,177,572 | ||||
Williamson County, TN, Rural School, 6.125%, 2010 (c) | 1,575,000 | 1,687,282 | ||||
$ | 9,327,222 | |||||
Healthcare Revenue - Hospitals - 17.6% | ||||||
Johnson City, TN, Health & Education Financing Authority Rev. (Johnson City Medical Center Hospital), ETM, MBIA, 5%, 2018 (c) | $ | 1,500,000 | $ | 1,546,005 | ||
Johnson City, TN, Health, Educational Facilities Board & Hospital Rev. (Mountain States Health), “A”, 5.5%, 2036 | 600,000 | 547,980 | ||||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Baptist Health Systems), 6.5%, 2031 | 300,000 | 303,573 | ||||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Catholic Healthcare Partners), 5.25%, 2030 | 1,000,000 | 969,210 | ||||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Covenant Health), ASSD GTY, 7%, 2046 | 2,000,000 | 2,000,000 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Covenant Health), “A”, 0%, 2036 | $ | 4,000,000 | $ | 671,560 | ||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (East Tennessee Children’s Hospital), 5.75%, 2033 | 450,000 | 428,684 | ||||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Fort Sanders), MBIA, 5.75%, 2014 | 3,250,000 | 3,556,540 | ||||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (University Health Systems, Inc.), 5.25%, 2036 | 1,000,000 | 886,570 | ||||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev., “A”, FSA, 5%, 2013 (c) | 545,000 | 591,837 | ||||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev., “A”, FSA, 5%, 2022 | 455,000 | 467,917 | ||||
Metropolitan Government Nashville, TN, Davidson Town, 5.25%, 2008 (c) | 540,000 | 556,875 | ||||
Metropolitan Government Nashville, TN, Davidson Town Hospital, Unrefunded, 5.25%, 2008 (c) | 460,000 | 474,375 | ||||
Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Methodist Healthcare), 6.5%, 2012 (c) | 375,000 | 429,840 | ||||
Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Methodist Healthcare), 6.5%, 2012 (c) | 625,000 | 716,400 | ||||
Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Methodist Healthcare), 5%, 2031 | 500,000 | 491,195 | ||||
Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Methodist Healthcare), 5%, 2036 | 1,250,000 | 1,216,713 | ||||
Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (St. Judes Children’s Research), 5.5%, 2009 (c) | 1,750,000 | 1,848,245 | ||||
Springfield, TN, Health & Higher Educational Facilities Hospital Rev. (Northcrest Medical Center), 5.25%, 2013 | 1,000,000 | 1,002,310 | ||||
Sumner County, TN, Health, Educational & Housing Facilities Board Rev. (Sumner Regional Health), “A”, 5.5%, 2046 | 1,000,000 | 885,870 | ||||
$ | 19,591,699 | |||||
Healthcare Revenue - Long Term Care - 0.6% | ||||||
Blount County, TN, Health & Educational Facilities Board Rev. (Asbury, Inc.), “A”, 5.125%, 2023 | $ | 500,000 | $ | 443,535 | ||
Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Germantown Village), “A”, 7.25%, 2034 | 250,000 | 235,690 | ||||
$ | 679,225 |
37
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Industrial Revenue - Other - 0.3% | ||||||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | $ | 320,000 | $ | 313,178 | ||
Miscellaneous Revenue - Entertainment & Tourism - 3.6% | ||||||
Memphis-Shelby County, TN (Memphis Sports Arena), AMBAC, 5.125%, 2012 (c) | $ | 2,000,000 | $ | 2,185,840 | ||
Memphis-Shelby County, TN (Memphis Sports Arena), AMBAC, 5.35%, 2012 (c) | 1,665,000 | 1,835,646 | ||||
$ | 4,021,486 | |||||
Miscellaneous Revenue - Other - 0.8% | ||||||
Hardeman County, TN, Correctional Facilities Rev., 7.75%, 2017 | $ | 890,000 | $ | 903,475 | ||
Multi-Family Housing Revenue - 3.9% | ||||||
Chattanooga, TN, Health, Educational & Housing Facilities (Rainbow Creek), GNMA, 6.125%, 2019 | $ | 395,000 | $ | 404,492 | ||
Knoxville, TN, Community Development Corp., 5%, 2024 | 1,000,000 | 1,024,150 | ||||
Memphis, TN, Health, Educational & Housing Facilities Board Rev. (Hickory Point Apartments), MBIA, 5.85%, 2020 | 1,000,000 | 930,000 | ||||
Memphis, TN, Health, Educational & Housing Facilities Board Rev. (Prescott Place Apartments Project), FNMA, 5.125%, 2038 (a) | 1,000,000 | 943,120 | ||||
Metropolitan Government of Nashville & Davidson County, TN, Health, Educational & Housing Facilities Board Rev. (Berkshire Place), GNMA, 6%, 2023 | 500,000 | 508,640 | ||||
Metropolitan Government of Nashville & Davidson County, TN, Health, Educational & Housing Facilities Board Rev. (Herman Street), FHA, 7.25%, 2032 | 485,000 | 486,266 | ||||
$ | 4,296,668 | |||||
Sales & Excise Tax Revenue - 0.8% | ||||||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 0%, 2056 | $ | 7,755,000 | $ | 415,203 | ||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | 525,000 | 493,469 | ||||
$ | 908,672 | |||||
Single Family Housing - State - 11.0% | ||||||
Tennessee Housing Development Agency Rev., Homeownership Program, 5.45%, 2014 | $ | 2,535,000 | $ | 2,587,677 | ||
Tennessee Housing Development Agency Rev., Homeownership Program, 4.45%, 2017 | 645,000 | 624,579 | ||||
Tennessee Housing Development Agency Rev., Homeownership Program, 4.45%, 2017 | 660,000 | 638,299 | ||||
Tennessee Housing Development Agency Rev., Homeownership Program, 4.55%, 2018 | 575,000 | 549,539 | ||||
Tennessee Housing Development Agency Rev., Homeownership Program, 4.55%, 2018 | 690,000 | 658,439 |
Issuer | Shares/Par | Value ($) | ||||
Single Family Housing - State - continued | ||||||
Tennessee Housing Development Agency Rev., Homeownership Program, 6%, 2020 | $ | 775,000 | $ | 778,743 | ||
Tennessee Housing Development Agency Rev., Homeownership Program, 5%, 2026 | 1,970,000 | 1,821,895 | ||||
Tennessee Housing Development Agency Rev., Homeownership Program, 5.05%, 2027 | 720,000 | 672,142 | ||||
Tennessee Housing Development Agency Rev., Homeownership Program, 4.85%, 2032 | 985,000 | 869,854 | ||||
Tennessee Housing Development Agency Rev., Homeownership Program, FSA, 5.4%, 2032 | 670,000 | 652,279 | ||||
Tennessee Housing Development Agency Rev., Homeownership Program, 5.25%, 2034 | 1,030,000 | 1,033,245 | ||||
Tennessee Housing Development Agency Rev., Mortgage Finance, 5.2%, 2023 | 1,285,000 | 1,296,976 | ||||
$ | 12,183,667 | |||||
State & Local Agencies - 6.7% | ||||||
Chattanooga, TN, Industrial Development Board, AMBAC, 5.75%, 2018 | $ | 1,000,000 | $ | 1,050,610 | ||
Metropolitan Government of Nashville & Davidson County, TN, “A”, FSA, 5.25%, 2022 | 1,000,000 | 1,093,390 | ||||
Tennessee School Board Authority, “C”, FSA, 5%, 2032 | 2,000,000 | 2,018,820 | ||||
Tennessee School Bond Authority (Higher Education Facilities), FSA, 5.25%, 2012 (c) | 3,000,000 | 3,282,510 | ||||
$ | 7,445,330 | |||||
Tax - Other - 0.7% | ||||||
Virgin Islands Public Finance Authority Rev., “E”, 5.875%, 2018 | $ | 730,000 | $ | 741,848 | ||
Tobacco - 0.9% | ||||||
Guam Economic Development Authority Tobacco Settlement, “B”, 5.5%, 2011 (c) | $ | 350,000 | $ | 378,004 | ||
Tobacco Settlement Financing Corp., 5%, 2031 | 750,000 | 666,173 | ||||
$ | 1,044,177 | |||||
Transportation - Special Tax - 2.6% | ||||||
Puerto Rico Highway & Transportation Authority Rev., ASSD GTY, 5.25%, 2034 | $ | 1,005,000 | $ | 1,036,939 | ||
Puerto Rico Highway & Transportation Authority Rev., FSA, 5.25%, 2036 | 1,815,000 | 1,858,106 | ||||
$ | 2,895,045 | |||||
Universities - Colleges - 5.9% | ||||||
Metropolitan Government of Nashville & Davidson County, TN, Health, Educational & Housing Facilities Board Rev. (McKendree Village, Inc.), 5.125%, 2020 | $ | 1,000,000 | $ | 1,001,880 | ||
Metropolitan Government of Nashville & Davidson County, TN, Health, Educational & Housing Facilities Board Rev. (Meharry Medical College), AMBAC, 5%, 2024 | 3,750,000 | 3,778,800 | ||||
University of Puerto Rico Rev., “Q”, 5%, 2036 | 1,985,000 | 1,820,741 | ||||
$ | 6,601,421 |
38
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Utilities - Municipal Owned - 7.4% | ||||||
Elizabethton, TN, Electric System Rev., MBIA, 4.5%, 2027 | $ | 1,000,000 | $ | 939,900 | ||
Lawrenceberg, TN, Electrical Rev., MBIA, 5.5%, 2009 (c) | 1,255,000 | 1,309,003 | ||||
Metropolitan Government of Nashville & Davidson County, TN, Electrical Rev., MBIA, 0%, 2012 | 3,305,000 | 2,859,283 | ||||
Metropolitan Government of Nashville & Davidson County, TN, Electrical Rev., 5.125%, 2021 | 1,500,000 | 1,547,145 | ||||
Metropolitan Government of Nashville & Davidson County, TN, Electrical Rev., “A”, AMBAC, 5%, 2029 | 1,500,000 | 1,512,495 | ||||
$ | 8,167,826 | |||||
Utilities - Other - 0.8% | ||||||
Tennessee Energy Acquisition, “A”, 5.25%, 2026 | $ | 1,000,000 | $ | 923,750 | ||
Water & Sewer Utility Revenue - 14.9% | ||||||
Hallsdale-Powell Utility District, TN, Water & Sewer Rev., “A”, FGIC, 5%, 2024 | $ | 1,500,000 | $ | 1,519,155 | ||
Hallsdale-Powell Utility District, TN, Water & Sewer Rev., “A”, FGIC, 5%, 2027 | 3,000,000 | 3,015,780 | ||||
Hallsdale-Powell Utility District, TN, Water & Sewer Rev., “N”, FGIC, 5%, 2036 | 130,000 | 126,001 | ||||
Harpeth Valley Utility District, TN, Davidson & Williamson Counties Rev., FGIC, 5.25%, 2037 | 1,000,000 | 996,980 | ||||
Hendersonville, TN, Utility District Waterworks & Sewer Rev., FSA, 5%, 2031 | 1,000,000 | 1,003,790 | ||||
Knoxville, TN, Waste Water System Rev., FSA, 4.5%, 2032 | 1,000,000 | 934,750 | ||||
Knoxville, TN, Waste Water System Rev., “A”, MBIA, 5%, 2037 | 1,000,000 | 996,960 |
Issuer | Shares/Par | Value ($) | ||||
Water & Sewer Utility Revenue - continued | ||||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | $ | 400,000 | $ | 399,464 | ||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 1,000,000 | 1,022,930 | ||||
Rutherford County, TN, Water Rev., MBIA, 5%, 2027 | 770,000 | 778,393 | ||||
West Wilson Utility District, TN, Waterworks Rev., MBIA, 5.25%, 2014 (c) | 2,000,000 | 2,238,200 | ||||
White House Utility District, TN, “Y”, FSA, 5%, 2011 (c) | 380,000 | 405,031 | ||||
White House Utility District, TN, Unrefunded, FSA, 5%, 2021 | 420,000 | 429,362 | ||||
White House Utility District, TN, Water & Sewer Rev. (Robertson & Sumner Counties Waterworks), FSA, 6%, 2010 (c) | 1,000,000 | 1,063,930 | ||||
White House Utility District, TN, Water & Sewer Rev. (Robertson & Sumner Counties Waterworks), FSA, 5%, 2012 (c) | 1,500,000 | 1,617,030 | ||||
$ | 16,547,756 | |||||
Total Municipal Bonds (Identified Cost, $104,045,566) | $ | 104,901,178 | ||||
Floating Rate Demand Notes - 0.1% | ||||||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “B”, 1.17%, due 4/01/08, at Identified Cost | $ | 100,000 | $ | 100,000 | ||
Total Investments (Identified Cost, $104,145,566) (k) | $ | 105,001,178 | ||||
Other Assets, Less Liabilities - 5.4% | 6,010,355 | |||||
Net Assets - 100.0% | $ | 111,011,533 |
39
Derivative Contracts at 3/31/08
Swap Agreements at 3/31/08
Expiration | Notional | Counterparty | Cash Flows to Receive | Cash Flows to Pay | Value | |||||||
Interest Rate Swaps | ||||||||||||
8/13/23 | USD | 2,000,000 | Goldman Sachs International | 3.795% (fixed rate) | 7-Day BMA | $51,308 | ||||||
7/11/28 | USD | 2,000,000 | Citibank | 3.695% (fixed rate) | 7-Day BMA | 3,209 | ||||||
$54,517 |
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® VIRGINIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 101.8% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport & Port Revenue - 5.1% | ||||||
Metropolitan Washington, DC, Airport Authority Rev., “A”, FGIC, 5.125%, 2024 | $ | 1,000,000 | $ | 975,539 | ||
Metropolitan Washington, DC, Airport Authority Rev., “A”, FGIC, 5%, 2025 | 705,000 | 671,801 | ||||
Metropolitan Washington, DC, Airport Authority Rev., “A”, FSA, 5%, 2032 | 1,455,000 | 1,368,921 | ||||
Metropolitan Washington, DC, Airport Authority Rev., “A”, MBIA, 5%, 2035 | 3,000,000 | 2,779,409 | ||||
Norfolk, VA, Airport Authority Rev., “A”, FGIC, 5.375%, 2017 | 1,755,000 | 1,842,345 | ||||
Norfolk, VA, Airport Authority Rev., “A”, FGIC, 5%, 2022 | 3,000,000 | 3,044,609 | ||||
Virginia Port Authority Facilities Rev., FGIC, 5%, 2036 | 3,000,000 | 2,864,460 | ||||
Virginia Resources Authority, Airport Rev., “B”, 5.125%, 2027 | 720,000 | 707,386 | ||||
$ | 14,254,470 | |||||
General Obligations - General Purpose - 3.1% | ||||||
Newport News, VA, Economic Development, “A”, 5%, 2031 | $ | 1,595,000 | $ | 1,598,956 | ||
Puerto Rico Commonwealth, “A”, 5.25%, 2016 (c) | 1,235,000 | 1,398,946 | ||||
Puerto Rico Commonwealth, “A”, 5.25%, 2030 | 765,000 | 739,610 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 840,000 | 921,724 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2031 | 920,000 | 974,814 | ||||
Stafford County, VA, Industrial Development Authority Rev., “B”, MBIA, 5%, 2034 | 3,060,000 | 3,055,349 | ||||
$ | 8,689,399 | |||||
General Obligations - Improvement - 10.7% | ||||||
Arlington County, VA, 4.5%, 2028 | $ | 255,000 | $ | 237,405 | ||
Chesterfield County, VA, 6%, 2010 (c) | 1,900,000 | 2,024,127 | ||||
Chesterfield County, VA, 5%, 2011 (c) | 2,015,000 | 2,149,562 | ||||
Guam Government, “A”, 5.25%, 2037 | 540,000 | 458,795 | ||||
Hampton, VA, Public Improvement, 6%, 2010 (c) | 3,280,000 | 3,559,423 | ||||
Hampton, VA, Public Improvement, 6%, 2010 (c) | 3,480,000 | 3,776,461 | ||||
Lynchburg, VA, Public Improvement, 5.6%, 2010 (c) | 1,765,000 | 1,906,200 | ||||
Puerto Rico Municipal Finance Agency, FSA, 5.5%, 2009 (c)(u) | 1,230,000 | 1,299,249 | ||||
Puerto Rico Municipal Finance Agency, FSA, 6%, 2009 (c)(u) | 2,210,000 | 2,348,832 | ||||
Richmond, VA, “A”, FSA, 5.125%, 2010 (c) | 5,000,000 | 5,298,700 | ||||
Richmond, VA, “B”, 0%, 2009 | 5,175,000 | 5,092,200 | ||||
Suffolk, VA, Public Improvement, 5.5%, 2010 (c) | 1,880,000 | 2,016,883 | ||||
$ | 30,167,837 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - 10.2% | ||||||
Albemarle County, VA, Industrial Development Authority, Hospital Rev. (Martha Jefferson Hospital), 5.25%, 2035 | $ | 3,000,000 | $ | 2,927,520 | ||
Arlington County, VA, Industrial Development Authority Rev. (Virginia Hospital Center Arlington Health Systems), 5.25%, 2011 (c) | 2,600,000 | 2,841,098 | ||||
Charlotte County, VA, Industrial Development Authority Rev. (Halifax Hospital), 5%, 2037 | 1,000,000 | 889,910 | ||||
Fauquier County, VA, Indistrial Development Authority, Hospital Rev., 5.25%, 2037 | 2,000,000 | 1,786,140 | ||||
Fredericksburg, VA, Industrial Development Rev. (Medicorp Health Systems), “B”, 5.125%, 2033 | 750,000 | 710,850 | ||||
Henrico County, VA, Economic Development Authority Rev., 5.6%, 2012 (c) | 85,000 | 94,886 | ||||
Henrico County, VA, Economic Development Authority Rev., 5.6%, 2030 | 1,915,000 | 1,928,003 | ||||
Henrico County, VA, Industrial Development Authority Rev. (Bon Secours Health Systems, Inc.), MBIA, 6.25%, 2020 | 1,500,000 | 1,761,345 | ||||
Loudoun County, VA, Industrial Development Authority, Hospital Rev. (Loudoun Hospital Center), “A”, 6.1%, 2012 (c) | 1,000,000 | 1,133,830 | ||||
Lynchburg, VA, Industrial Development Authority, Healthcare Facilities Rev., Unrefunded Balance (Central Health), 5.2%, 2018 | 145,000 | 146,853 | ||||
Medical College of Virginia, Hospital Authority Rev., MBIA, 5.125%, 2018 | 3,000,000 | 3,069,180 | ||||
Peninsula Ports Authority, VA, Health System Rev. (Riverside Health System), 5%, 2018 | 3,580,000 | 3,629,189 | ||||
Peninsula Ports Authority, VA, Hospital Facility Rev. (Whittaker Memorial), FHA, 8.7%, 2023 | 1,975,000 | 2,141,236 | ||||
Prince William County, VA, Industrial Development Authority, Hospital Rev. (Potomac Hospital Corp.), 5.2%, 2026 | 1,000,000 | 990,620 | ||||
Roanoke, VA, Industrial Development Authority, Hospital Rev. (Roanoke Memorial Hospital), “B”, ETM, MBIA, 6.125%, 2017 (c) | 3,000,000 | 3,501,510 | ||||
Virginia Small Business Financing Authority Hospital Rev., (Wellmont Health Project), “A”, 5.25%, 2037 | 1,500,000 | 1,300,980 | ||||
$ | 28,853,150 | |||||
Healthcare Revenue - Long Term Care - 1.3% | ||||||
Henrico County, VA, Economic Development Authority, Residential Care Facilities (United Methodist Homes), “A”, 6.7%, 2027 | $ | 550,000 | $ | 554,087 | ||
Henrico County, VA, Economic Development Authority, Residential Care Facilities (United Methodist Homes), “A”, 6.7%, 2012 (c) | 200,000 | 201,486 | ||||
James City County, VA, Economic Development (Virginia United Methodist Homes, Inc.), “A”, 5.5%, 2037 | 1,000,000 | 837,960 | ||||
Lexington, Va, Industrial Development Authority Residential Care Facilities (Kendal at Lexington), “A”, 5.5%, 2037 | 1,000,000 | 844,390 |
40
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Long Term Care - continued | ||||||
Norfolk, VA, Redevelopment & Housing Authority Rev. (Fort Norfolk Retirement Community), “A”, 6.125%, 2035 | $ | 750,000 | $ | 683,625 | ||
Suffolk, VA, Industrial Development Authority, Retirement Facilities Rev. (Lake Prince Center, Inc.), 5.3%, 2031 | 750,000 | 647,295 | ||||
$ | 3,768,843 | |||||
Industrial Revenue - Environmental Services - 1.1% | ||||||
Charles City County, VA, Industrial Development Authority, Solid Waste Disposal Facility Rev. (Waste Management, Inc.), 6.25%, 2027 (a) | $ | 1,500,000 | $ | 1,555,605 | ||
Henrico County, VA, Industrial Development Authority Rev. (Browning Ferris, Inc.), 5.45%, 2014 | 1,750,000 | 1,649,288 | ||||
$ | 3,204,893 | |||||
Industrial Revenue - Other - 1.3% | ||||||
Loudoun County, VA, Industrial Development Authority Rev. (Dulles Airport Marriott Hotel), 7.125%, 2015 | $ | 2,000,000 | $ | 2,009,780 | ||
Peninsula Ports Authority, VA, Coal Terminal Rev. (Dominion Terminal Associates), 6%, 2033 | 1,000,000 | 1,012,020 | ||||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | 750,000 | 734,010 | ||||
$ | 3,755,810 | |||||
Industrial Revenue - Paper - 1.0% | ||||||
Bedford County, VA, Industrial Development Authority Rev. (Nekooska Packaging Corp.), 5.6%, 2025 | $ | 1,000,000 | $ | 810,540 | ||
Hopewell, VA, Industrial Development Authority, Environmental Improvement Rev. (Smurfit-Stone Container), 5.25%, 2015 | 740,000 | 690,442 | ||||
West Point, VA, Industrial Development Authority, Solid Waste Disposal Rev. (Chesapeake Corp.), “A”, 6.375%, 2019 | 1,750,000 | 1,460,340 | ||||
$ | 2,961,322 | |||||
Miscellaneous Revenue - Other - 1.1% | ||||||
Stafford County, VA, Economic Development Authority Lease Rev., ASSD GTY, 5%, 2033 | $ | 3,000,000 | $ | 2,983,050 | ||
Multi-Family Housing Revenue - 4.6% | ||||||
Alexandria, VA, Redevelopment & Housing Finance Authority Rev. (Jefferson Village Apartments), “B”, 9%, 2018 | $ | 3,480,000 | $ | 3,489,466 | ||
Arlington County, VA, Industrial Development Authority Rev. (Colonial Village), FNMA, 5.15%, 2031 | 3,000,000 | 3,004,320 | ||||
Virginia Housing Development Authority Rev., “B”, 5.95%, 2016 | 1,345,000 | 1,346,587 | ||||
Virginia Housing Development Authority Rev., “G”, 5.625%, 2020 | 2,000,000 | 2,017,460 | ||||
Virginia Housing Development Authority Rev., “I”, 5.15%, 2017 | $ | 3,000,000 | $ | 3,022,170 | ||
$ | 12,880,003 |
Issuer | Shares/Par | Value ($) | ||||
Parking - 0.6% | ||||||
Norfolk, VA, Parking Systems Rev., MBIA, 5%, 2020 | $ | 1,630,000 | $ | 1,659,096 | ||
Sales & Excise Tax Revenue - 0.7% | ||||||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | $ | 2,135,000 | $ | 2,006,772 | ||
Single Family Housing - State - 3.4% | ||||||
Virginia Housing Development Authority Commonwealth, “A”, 5%, 2031 | $ | 2,000,000 | $ | 1,811,720 | ||
Virginia Housing Development Authority Commonwealth, “C”, 4.4%, 2022 | 1,270,000 | 1,143,432 | ||||
Virginia Housing Development Authority Commonwealth, “C”, 4.66%, 2027 | 1,285,000 | 1,128,127 | ||||
Virginia Housing Development Authority Commonwealth, “C”, 4.625%, 2027 | 2,630,000 | 2,312,191 | ||||
Virginia Housing Development Authority Commonwealth, “C”, 4.75%, 2032 | 1,795,000 | 1,557,163 | ||||
Virginia Housing Development Authority Commonwealth, “B”, 4.75%, 2032 | 2,000,000 | 1,740,380 | ||||
$ | 9,693,013 | |||||
State & Agency - Other - 1.8% | ||||||
Fairfax County, VA, COP, 6.1%, 2017 | $ | 3,090,000 | $ | 3,459,626 | ||
Virginia Biotechnology Research Park Lease Rev. (Consolidated Laboratories), 5%, 2021 | 1,500,000 | 1,548,300 | ||||
$ | 5,007,926 | |||||
State & Local Agencies - 21.2% | ||||||
Blue Ridge, VA, Regional Jail Authority, MBIA, 5.2%, 2021 | $ | 1,830,000 | $ | 1,869,894 | ||
Caroline County, VA, Industrial Development Authority Lease Rev., AMBAC, 5.125%, 2034 | 1,000,000 | 1,008,640 | ||||
Chesapeake, VA, Industrial Development Authority (Chesapeake Court House), MBIA, 6.25%, 2011 | 3,985,000 | 4,046,648 | ||||
Chesapeake, VA, Industrial Development Authority (Chesapeake Court House), MBIA, 5.25%, 2017 | 2,000,000 | 2,027,760 | ||||
Chesterfield County, VA, Industrial Development Authority, Public Facilities Lease Rev., 7.5%, 2008 | 470,000 | 470,197 | ||||
Dinwiddie County, VA, Industrial Development Authority Lease Rev., “B”, MBIA, 5%, 2030 | 2,500,000 | 2,503,625 | ||||
Fairfax County, VA, Economic Development Authority Rev. (U.S. Route 28), MBIA, 5%, 2029 | 1,000,000 | 1,008,240 | ||||
Fairfax County, VA, Economic Development Authority, Fairfax Public Improvement Project, 5%, 2030 | 1,000,000 | 1,004,490 | ||||
Fairfax County, VA, Economic Development Authority, Parking Rev. (Vienna II Metrorail), 6%, 2009 (c) | 1,650,000 | 1,773,915 | ||||
Fairfax County, VA, Economic Development Authority, Parking Rev. (Vienna II Metrorail), 6%, 2009 (c) | 1,750,000 | 1,881,425 | ||||
Front Royal & Warren County, VA, Industrial Development Authority Lease Rev., School & Capital Improvement, “B”, FSA, 5%, 2035 | 2,875,000 | 2,870,774 |
41
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
State & Local Agencies - continued | ||||||
King George County, VA, Industrial Development Authority Lease Rev., FSA, 5%, 2036 | $ | 2,000,000 | $ | 2,003,960 | ||
Middlesex County, VA, Industrial Development Authority Rev., AMBAC, 5.125%, 2012 (c) | 1,000,000 | 1,103,400 | ||||
Middlesex County, VA, Industrial Development Authority Rev., AMBAC, 5.25%, 2012 (c) | 2,000,000 | 2,216,920 | ||||
Montgomery County, VA, Industrial Development, “B”, AMBAC, 6%, 2011 (c) | 1,000,000 | 1,102,830 | ||||
Montgomery County, VA, Industrial Development, “C”, AMBAC, 6%, 2017 | 1,120,000 | 1,235,170 | ||||
New River Valley, VA, Regional Jail Authority, MBIA, 5.125%, 2019 | 3,405,000 | 3,476,130 | ||||
Orange County, VA, Industrial Development Authority (Orange County Project), AMBAC, 5%, 2012 (c) | 1,000,000 | 1,088,660 | ||||
Powhatan County, VA, Economic Development Authority Lease Rev. (Virginia Capital Projects), AMBAC, 5.25%, 2033 | 1,000,000 | 1,019,740 | ||||
Prince William County, VA, Lease Partnerships, 5%, 2021 | 1,500,000 | 1,549,920 | ||||
Puerto Rico Public Finance Corp., “A”, AMBAC, 5.375%, 2013 (c)(u) | 4,000,000 | 4,372,880 | ||||
Puerto Rico Public Finance Corp., ETM, AMBAC, 5.375%, 2016 (c)(u) | 1,000,000 | 1,102,930 | ||||
Richmond, VA, Public Facilities, COP (Megahertz Project), “A”, AMBAC, 5%, 2022 | 1,600,000 | 1,631,808 | ||||
Southwest Virginia Regional Jail Authority Rev., MBIA, 5%, 2035 | 1,720,000 | 1,561,966 | ||||
Virginia College Building Authority (21st Century College Program), 6%, 2009 (c) | 2,000,000 | 2,089,200 | ||||
Virginia College Building Authority, Educational facilities Rev., 4.5%, 2032 | 1,550,000 | 1,409,756 | ||||
Virginia Resources Authority, Infrastructure Rev., “A”, 5%, 2017 | 1,360,000 | 1,407,886 | ||||
Virginia Resources Authority Rev., 5%, 2021 (u) | 2,780,000 | 2,896,482 | ||||
Virginia Resources Authority Rev., 5%, 2023 (u) | 3,040,000 | 3,139,864 | ||||
Virginia Resources Authority Rev., 5%, 2033 (u) | 5,020,000 | 5,039,176 | ||||
$ | 59,914,286 | |||||
Tax - Other - 1.7% | ||||||
Greater Richmond Convention Center Authority, Hotel Tax Rev. (Convention Center Expansion), 6.125%, 2010 (c) | $ | 3,500,000 | $ | 3,823,505 | ||
Virgin Islands, Public Finance Authority Rev., “A”, 5.625%, 2025 | 1,000,000 | 1,003,330 | ||||
$ | 4,826,835 | |||||
Tobacco - 1.8% | ||||||
Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, “B”, 0%, 2055 | $ | 2,000,000 | $ | 63,440 | ||
Virgin Islands Tobacco Settlement Financing Corp., 5%, 2021 | 510,000 | 503,538 | ||||
Virginia Tobacco Settlement Financing Corp., 5.625%, 2015 (c) | 1,000,000 | 1,125,430 | ||||
Virginia Tobacco Settlement Financing Corp., “B-1”, 5%, 2047 | 4,350,000 | 3,437,501 | ||||
$ | 5,129,909 |
Issuer | Shares/Par | Value ($) | ||||
Toll Roads - 0.4% | ||||||
Pocahontas Parkway Assn., VA, Toll Road Rev., “B”, 0%, 2008 (c) | $ | 1,500,000 | $ | 1,154,730 | ||
Transportation - Special Tax - 1.4% | ||||||
Puerto Rico Highway & Transportation Authority Rev., ASSD GTY, 5.25%, 2034 | $ | 2,685,000 | $ | 2,770,329 | ||
Puerto Rico Highway & Transportation Authority Rev., “J”, MBIA, 5%, 2029 | 1,210,000 | 1,168,437 | ||||
$ | 3,938,766 | |||||
Universities - Colleges - 3.4% | ||||||
Amherst, VA, Industrial Development Authority Rev. (Educational Facilities Sweet Briar), 5%, 2026 | $ | 1,770,000 | $ | 1,640,294 | ||
Danville, VA, Industrial Development Authority, Educational Facilities Rev. (Averett University), 6%, 2022 | 500,000 | 496,255 | ||||
University of Virginia (University Rev.), “B”, 5%, 2027 | 2,690,000 | 2,740,007 | ||||
Virginia College Building Authority, Educational Facilities Rev., 5%, 2026 | 2,000,000 | 1,834,760 | ||||
Virginia College Building Authority, Educational Facilities Rev. (Hampton University), 6%, 2010 (c) | 1,000,000 | 1,081,480 | ||||
Virginia College Building Authority, Educational Facilitiess Rev. (Roanoke College), 4.5%, 2037 | 2,300,000 | 1,922,087 | ||||
$ | 9,714,883 | |||||
Utilities - Investor Owned - 1.4% | ||||||
Halifax County, VA, Industrial Development Authority (Old Dominion Electric Cooperative), AMBAC, 5.625%, 2028 | $ | 3,000,000 | $ | 3,096,540 | ||
Mecklenburg County, VA, Industrial Development Authority Rev. (UAE Mecklenburg LP), 6.5%, 2017 | 700,000 | 748,538 | ||||
$ | 3,845,078 | |||||
Utilities - Municipal Owned - 8.5% | ||||||
Bristol, VA, Utility Systems Rev., ETM, FSA, 5.75%, 2016 (c) | $ | 240,000 | $ | 279,650 | ||
Guam Power Authority Rev., AMBAC, 5.25%, 2015 | 2,020,000 | 2,063,491 | ||||
Puerto Rico Electric Power Authority Rev., FSA, 5.625%, 2010 (c)(u) | 2,540,000 | 2,748,331 | ||||
Puerto Rico Electric Power Authority Rev., FSA, 5.75%, 2010 (c)(u) | 5,000,000 | 5,423,700 | ||||
Puerto Rico Electric Power Authority Rev., FSA, 5.3%, 2010 (c)(u) | 2,500,000 | 2,687,375 | ||||
Richmond, VA, Public Utilities Rev., FSA, 5%, 2012 (c) | 5,000,000 | 5,393,950 | ||||
Richmond, VA, Public Utilities Rev., FSA, 4.5%, 2033 | 4,550,000 | 4,290,150 | ||||
Richmond, VA, Public Utilities Rev., FSA, 5%, 2035 | 1,000,000 | 1,005,070 | ||||
$ | 23,891,717 |
42
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Water & Sewer Utility Revenue - 16.0% | ||||||
Fairfax County, VA, Water Authority Rev., 5%, 2014 (c) | $ | 1,000,000 | $ | 1,102,630 | ||
Fairfax County, VA, Water Authority Rev., 5%, 2014 (c) | 1,000,000 | 1,102,630 | ||||
Fairfax County, VA, Water Authority Rev., 5%, 2032 | 2,000,000 | 2,012,220 | ||||
Fairfax County, VA, Water Authority Rev., Unrefunded, 5%, 2027 | 3,210,000 | 3,263,382 | ||||
Hampton Roads, VA, Sanitation District Wastewater Rev., 5%, 2033 | 2,000,000 | 2,007,800 | ||||
Loudoun County, VA, Water & Sewer Rev., 4.375%, 2037 | 3,600,000 | 3,140,892 | ||||
Prince William County, VA, Water & Sewer Rev., FGIC, 5.5%, 2009 (c) | 2,000,000 | 2,105,560 | ||||
Puerto Rico Aqueduct & Sewer Authority Rev., ETM, 10.25%, 2009 (c) | 90,000 | 93,553 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | 400,000 | 399,464 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 3,000,000 | 3,068,790 | ||||
Spotsylvania County, VA, Water & Sewer Rev., FSA, 5%, 2022 | 1,450,000 | 1,483,060 | ||||
Spotsylvania County, VA, Water & Sewer Rev., FSA, 4.5%, 2032 | 1,500,000 | 1,411,425 | ||||
Spotsylvania County, VA, Water & Sewer Rev., FSA, 4.75%, 2035 (f) | 1,500,000 | 1,453,185 | ||||
Upper Occoquan, VA, Sewage Authority Regional Sewage Rev., 4.75%, 2031 | 1,370,000 | 1,312,241 | ||||
Upper Occoquan, VA, Sewage Authority Regional Sewage Rev., 5%, 2041 | 2,000,000 | 1,996,620 | ||||
Virginia Beach, VA, Storm Water Utilities Rev., 6%, 2020 | 1,000,000 | 1,071,290 | ||||
Virginia Resources Authority Sewer Systems Rev. (Hopewell Regional Wastewater), 5.75%, 2021 | 1,335,000 | 1,396,517 | ||||
Virginia Resources Authority, Clean Water Rev., 5.4%, 2010 (c) | 1,135,000 | 1,220,681 | ||||
Virginia Resources Authority, Clean Water Rev., 6%, 2010 (c) | 2,750,000 | 2,997,390 | ||||
Virginia Resources Authority, Clean Water Rev., 4.75%, 2027 | 3,000,000 | 2,973,630 | ||||
Virginia Resources Authority, Clean Water Rev., 5%, 2037 | 2,750,000 | 2,760,285 |
Issuer | Shares/Par | Value ($) | ||||
Water & Sewer Utility Revenue - continued | ||||||
Virginia Resources Authority, Infrastructure Rev., FSA, 5.5%, 2010 (c) | $ | 350,000 | $ | 376,373 | ||
Virginia Resources Authority, Infrastructure Rev., FSA, 5.5%, 2010 (c) | 630,000 | 677,471 | ||||
Virginia Resources Authority, Infrastructure Rev., MBIA, 5.5%, 2011 (c) | 660,000 | 724,403 | ||||
Virginia Resources Authority, Infrastructure Rev., MBIA, 5.5%, 2011 (c) | 710,000 | 779,282 | ||||
Virginia Resources Authority, Infrastructure Rev., MBIA, 5.5%, 2011 (c) | 700,000 | 768,306 | ||||
Virginia Resources Authority, Infrastructure Rev., MBIA, 5.5%, 2011 (c) | 750,000 | 823,185 | ||||
Virginia Resources Authority, Infrastructure Rev., MBIA, 5.5%, 2019 | 230,000 | 243,917 | ||||
Virginia Resources Authority, Infrastructure Rev., FSA, 5.5%, 2019 | 90,000 | 94,319 | ||||
Virginia Resources Authority, Infrastructure Rev., MBIA, 5.5%, 2020 | 240,000 | 253,733 | ||||
Virginia Resources Authority, Water & Sewer Systems Rev. (Tuckahoe Creek Project), 5%, 2035 | 2,015,000 | 2,018,284 | ||||
$ | 45,132,518 | |||||
Total Municipal Bonds (Identified Cost, $284,561,168) | $ | 287,434,306 | ||||
Floating Rate Demand Notes - 1.2% | ||||||
East Baton Rouge, LA, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | $ | 1,200,000 | $ | 1,200,000 | ||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “A”, 1.17%, due 4/01/08 | 1,450,000 | 1,450,000 | ||||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “C”, 1.17%, due 4/01/08 | 300,000 | 300,000 | ||||
Sublette County, WY, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | 400,000 | 400,000 | ||||
Total Floating Rate Demand Notes, at Identified Cost and Value | $ | 3,350,000 | ||||
Total Investments (Identified Cost, $287,911,168) (k) | $ | 290,784,306 | ||||
Other Assets, Less Liabilities - (3.0)% | (8,605,511) | |||||
Net Assets - 100.0% | $ | 282,178,795 |
Derivative Contracts at 3/31/08
Futures contracts outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ (Depreciation) | ||||
U.S. Treasury Bond 30 yr (Short) | 17 | 2,019,547 | Jun-08 | $27,390 |
Swap Agreements at 3/31/08
Expiration | Notional | Counterparty | Cash Flows to Receive | Cash Flows to Pay | Value | |||||||
Interest Rate Swaps | ||||||||||||
8/13/23 | USD | 3,000,000 | Goldman Sachs International | 3.795% (fixed rate) | 7-Day BMA | $76,962 |
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
43
Table of Contents
PORTFOLIO OF INVESTMENTS
3/31/08
MFS® WEST VIRGINIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 96.6% | ||||||
Issuer | Shares/Par | Value ($) | ||||
General Obligations - General Purpose - 14.6% | ||||||
Charleston, WV, Public Improvements, 7.2%, 2009 | $ | 1,140,000 | $ | 1,219,853 | ||
Commonwealth of Puerto Rico, Public Improvement, MBIA, 5.75%, 2010 (c) | 6,000,000 | 6,424,140 | ||||
Commonwealth of Puerto Rico, Public Improvement, 5.25%, 2023 | 1,500,000 | 1,506,015 | ||||
Puerto Rico Commonwealth, Public Improvement, “A”, SCIFG, 5%, 2014 (c) | 1,220,000 | 1,342,622 | ||||
Puerto Rico Commonwealth, Public Improvement, “A”, SCIFG, 5%, 2034 | 780,000 | 717,928 | ||||
Puerto Rico Public Buildings Authority Rev. (State Office Building), “F”, XLCA, 5.25%, 2025 | 2,000,000 | 1,993,100 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2023 | 660,000 | 724,211 | ||||
Puerto Rico Public Buildings Authority Rev., Guaranteed, “M”, 6.25%, 2031 | 725,000 | 768,196 | ||||
West Virginia Highway Improvements, FGIC, 5.625%, 2010 (c) | 2,000,000 | 2,158,820 | ||||
West Virginia Sewer Improvements, FGIC, 5.5%, 2017 | 2,565,000 | 2,642,335 | ||||
$ | 19,497,220 | |||||
General Obligations - Improvement - 2.7% | ||||||
Brooke County, WV, Board of Education, FGIC, 5%, 2016 | $ | 1,390,000 | $ | 1,440,026 | ||
Guam Government, “A”, 5.25%, 2037 | 250,000 | 212,405 | ||||
Puerto Rico Municipal Finance Agency, FSA, 5.5%, 2009 (c)(u) | 1,800,000 | 1,901,340 | ||||
$ | 3,553,771 | |||||
General Obligations - Schools - 5.3% | ||||||
Jefferson County, WV, Board of Education, ETM, FGIC, 6.85%, 2009 (c) | $ | 1,680,000 | $ | 1,776,802 | ||
Monongalia County, WV, Board of Education, MBIA, 5%, 2027 | 2,350,000 | 2,366,615 | ||||
Monongalia County, WV, Board of Education, MBIA, 5%, 2033 | 3,000,000 | 2,961,870 | ||||
$ | 7,105,287 | |||||
Healthcare Revenue - Hospitals - 7.3% | ||||||
Ohio County, WV, County Commission Health System Rev. (Ohio Valley Medical Center), 5.75%, 2013 | $ | 750,000 | $ | 724,890 | ||
Randolph County, WV, Community Health Systems Rev. (Davis Health Systems, Inc.), FSA, 5.2%, 2021 (f) | 1,000,000 | 1,049,230 | ||||
Weirton, WV, Municipal Hospital Building, Commission Rev. (Weirton Hospital Medical Center), 6.375%, 2031 | 600,000 | 597,396 | ||||
West Virginia Hospital Finance Authority, Hospital Rev. (General Division Medical Office Building), 7.25%, 2014 | 1,365,000 | 1,367,935 |
Issuer | Shares/Par | Value ($) | ||||
Healthcare Revenue - Hospitals - continued | ||||||
West Virginia Hospital Finance Authority, Hospital Rev. (West Virginia University Hospital), AMBAC, 5%, 2018 | $ | 1,000,000 | $ | 1,005,820 | ||
West Virginia Hospital Finance Authority, Hospital Rev., “A”, AMBAC, 5%, 2022 | 2,500,000 | 2,565,550 | ||||
West Virginia Hospital Finance Authority, Hospital Rev., ETM, 6.5%, 2023 (c) | 2,000,000 | 2,401,740 | ||||
$ | 9,712,561 | |||||
Healthcare Revenue - Long Term Care - 0.2% | ||||||
West Virginia Economic Development (Edgewood Summit), 5.5%, 2029 | $ | 300,000 | $ | 259,824 | ||
Industrial Revenue - Other - 0.3% | ||||||
Virgin Islands Public Finance Authority, Refinery Facilities Rev. (Hovensa Coker Project), 5.875%, 2022 | $ | 350,000 | $ | 342,538 | ||
Parking - 1.0% | ||||||
West Virginia Economic Development Authority, Auto Lease Rev. (Capitol Parking Garage), AMBAC, 5.8%, 2020 | $ | 1,260,000 | $ | 1,312,114 | ||
Sales & Excise Tax Revenue - 0.7% | ||||||
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., 5.25%, 2057 | $ | 1,015,000 | $ | 954,039 | ||
Single Family Housing - Local - 1.1% | ||||||
Charlestown, WV, Residential Mortgage Rev., 6.2%, 2011 | $ | 35,000 | $ | 35,030 | ||
Kanawha County, WV, 0%, 2014 (c) | 1,920,000 | 1,396,358 | ||||
$ | 1,431,388 | |||||
Single Family Housing - State - 4.2% | ||||||
West Virginia Housing Development Fund Rev., 5.25%, 2018 | $ | 885,000 | $ | 893,381 | ||
West Virginia Housing Development Fund Rev., 5.3%, 2023 | 635,000 | 635,864 | ||||
West Virginia Housing Development Fund Rev., “A”, 4.625%, 2032 | 1,000,000 | 850,500 | ||||
West Virginia Housing Development Fund Rev., “B”, 5.15%, 2032 | 3,410,000 | 3,159,365 | ||||
$ | 5,539,110 | |||||
State & Local Agencies - 23.2% | ||||||
Huntington, WV, Municipal Development Authority, Rev., MBIA, 5.1%, 2018 | $ | 1,740,000 | $ | 1,769,476 | ||
West Virginia Building Commission Lease Rev. (WV Regional Jail), “A”, AMBAC, 5.375%, 2018 | 9,040,000 | 9,963,888 | ||||
West Virginia Building Commission, “B”, AMBAC, 5.375%, 2018 | 2,500,000 | 2,755,500 | ||||
West Virginia Building Commission, Lease Rev., ETM, MBIA, 0%, 2008 (c) | 3,050,000 | 3,034,781 |
44
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
State & Local Agencies - continued | ||||||
West Virginia Building Commission, Lease Rev., ETM, MBIA, 0%, 2009 (c) | $ | 1,000,000 | $ | 971,580 | ||
West Virginia Economic Development Authority (Correctional Juvenile & Public), MBIA, 5.5%, 2013 | 1,000,000 | 1,097,250 | ||||
West Virginia Economic Development Authority (Correctional Juvenile & Public), MBIA, 5%, 2026 | 2,100,000 | 2,112,180 | ||||
West Virginia Economic Development Authority (State Office Building), 5%, 2020 | 1,000,000 | 1,024,220 | ||||
West Virginia Economic Development Authority (State Office Building), “B”, MBIA, 5.25%, 2030 | 1,355,000 | 1,374,322 | ||||
West Virginia Economic Development Authority, Auto Lease Rev., 5.2%, 2033 | 1,000,000 | 988,900 | ||||
West Virginia Economic Development Authority, Department of Environmental Protection, 5.5%, 2022 | 2,000,000 | 2,110,380 | ||||
West Virginia Economic Development Authority, Lease Rev. (State Office Building), “B”, MBIA, 5.25%, 2025 | 645,000 | 661,647 | ||||
West Virginia Hospital Finance Authority, Hospital Rev. (Veterans Nursing Home), 5.5%, 2034 | 1,000,000 | 903,110 | ||||
West Virginia School Building Authority, Rev., “A”, FGIC, 5%, 2020 | 2,000,000 | 2,074,820 | ||||
$ | 30,842,054 | |||||
Tax - Other - 0.4% | ||||||
Virgin Islands, Public Finance Authority Rev., “A”, 5.625%, 2025 | $ | 500,000 | $ | 501,665 | ||
Tax Assessment - 0.5% | ||||||
Morgantown, WV, Tax Increment Rev., Parking Garage Project, “A”, 5%, 2033 | $ | 500,000 | $ | 407,120 | ||
Ohio County, WV, Commission Tax Increment Rev. (Fort Henry Centre), “A”, 5.85%, 2034 | 300,000 | 277,719 | ||||
$ | 684,839 | |||||
Tobacco - 0.5% | ||||||
Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 | $ | 640,000 | $ | 610,739 | ||
Toll Roads - 0.4% | ||||||
Commonwealth of Puerto Rico, Public Improvement, ETM, FGIC, 0%, 2008 (c) | $ | 610,000 | $ | 606,956 | ||
Transportation - Special Tax - 1.3% | ||||||
Puerto Rico Highway & Transportation Authority Rev., “J”, MBIA, 5%, 2029 | $ | 1,820,000 | $ | 1,757,483 | ||
Universities - Colleges - 16.9% | ||||||
Fairmont State College, West Virginia, College Rev., “A”, FGIC, 5%, 2032 | $ | 3,210,000 | $ | 3,178,670 | ||
Fairmont State College, West Virginia, College Rev., “A”, FGIC, 5.375%, 2027 | 1,500,000 | 1,549,560 |
Issuer | Shares/Par | Value ($) | ||||
Universities - Colleges - continued | ||||||
Fairmont State College, West Virginia, College Rev., “B”, FGIC, 5%, 2032 | $ | 2,250,000 | $ | 2,212,650 | ||
Puerto Rico Industrial Tourist Education (University Plaza), MBIA, 5%, 2021 | 1,270,000 | 1,277,125 | ||||
Shepherd University Board of Governors, West Virginia Rev. (Residence Facilities Projects), MBIA, 5%, 2035 | 1,675,000 | 1,647,982 | ||||
West Liberty State College, Capital Improvement, 6%, 2028 | 500,000 | 510,160 | ||||
West Virginia Department of Higher Education (Marshall University), FGIC, 5.25%, 2019 | 1,680,000 | 1,734,785 | ||||
West Virginia Department of Higher Education (Student Union James C. Wilson College), 5.125%, 2022 | 1,500,000 | 1,552,215 | ||||
West Virginia Department of Higher Education, “B”, FGIC, 5%, 2029 | 3,000,000 | 2,946,420 | ||||
West Virginia University, University Systems Rev. (Marshall University), FGIC, 6%, 2010 (c) | 2,705,000 | 2,928,190 | ||||
West Virginia University, University Systems Rev. (West Virginia University), MBIA, 5.5%, 2020 | 1,700,000 | 1,916,835 | ||||
West Virginia, West Virginia University Improvement Rev., “C”, FGIC, 5%, 2028 | 1,000,000 | 988,630 | ||||
$ | 22,443,222 | |||||
Utilities - Investor Owned - 4.2% | ||||||
Mason County, WV, Pollution Control Rev. (Appalachian Power Co.), 5.5%, 2022 | $ | 750,000 | $ | 747,038 | ||
Pleasants County, WV, Pollution Control Rev. (Allegheny Community), “F”, 5.25%, 2037 | 300,000 | 280,005 | ||||
West Virginia Economic Development Authority Solid Waste Disposal Facilities Rev., AMBAC, 4.9%, 2037 | 5,000,000 | 4,627,000 | ||||
$ | 5,654,043 | |||||
Water & Sewer Utility Revenue - 11.8% | ||||||
Berkeley County, WV, Public Service Sewer District, “A”, 5%, 2047 | $ | 1,000,000 | $ | 863,280 | ||
Berkeley County, WV, Public Service Sewer District, Sewer Capacity Impact Fee, 5%, 2022 | 300,000 | 283,866 | ||||
Fairmont, WV, Waterworks Rev., AMBAC, 5.25%, 2022 | 200,000 | 214,762 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, ASSD GTY, 5%, 2028 | 400,000 | 399,464 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 2,005,000 | 2,050,975 | ||||
West Virginia Water Development Authority Loan Program, “B”, AMBAC, 5.125%, 2024 | 2,140,000 | 2,202,830 | ||||
West Virginia Water Development Authority Rev., AMBAC, 6.25%, 2020 | 1,000,000 | 1,043,750 | ||||
West Virginia Water Development Authority Rev., AMBAC, 5.25%, 2023 | 1,000,000 | 1,045,150 |
45
Table of Contents
Portfolio of Investments – continued
Municipal Bonds - continued | ||||||
Issuer | Shares/Par | Value ($) | ||||
Water & Sewer Utility Revenue - continued | ||||||
West Virginia Water Development Authority Rev., AMBAC, 5%, 2026 | $ | 2,850,000 | $ | 2,873,712 | ||
West Virginia Water Development Authority, “A”, FGIC, 5%, 2033 | 1,450,000 | 1,385,490 | ||||
West Virginia Water Development Authority, Infrastructure Rev., FSA, 5.5%, 2010 (c) | 390,000 | 420,381 | ||||
West Virginia Water Development Authority, Infrastructure Rev., FSA, 5.5%, 2010 (c) | 895,000 | 964,721 | ||||
West Virginia Water Development Authority, Infrastructure Rev., “A”, AMBAC, 5%, 2033 | 1,950,000 | 1,911,449 | ||||
West Virginia Water Development Authority, Rev., ETM, 7.1%, 2009 (c) | 55,000 | 57,554 | ||||
$ | 15,717,384 | |||||
Total Municipal Bonds (Identified Cost, $127,944,690) | $ | 128,526,237 |
Issuer | Shares/Par | Value ($) | ||||
Floating Rate Demand Notes - 0.5% | ||||||
East Baton Rouge, LA, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | $ | 300,000 | $ | 300,000 | ||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | 400,000 | 400,000 | ||||
Total Floating Rate Demand Notes, at Identified Cost and Value | $ | 700,000 | ||||
Total Investments (Identified Cost, $128,644,690) (k) | $ | 129,226,237 | ||||
Other Assets, Less Liabilities - 2.9% | 3,818,063 | |||||
Net Assets - 100.0% | $ | 133,044,300 |
Derivative Contracts at 3/31/08
Futures contracts outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ (Depreciation) | ||||
U.S. Treasury Bond 30 yr (Short) | 8 | $950,375 | Jun-08 | $12,889 |
Swap Agreements at 3/31/08
Expiration | Notional Amount | Counterparty | Cash Flows to Receive | Cash Flows to Pay | Value | |||||||
Interest Rate Swaps | ||||||||||||
8/06/28 | USD | 2,000,000 | Merrill Lynch Capital Services | 7-Day BMA | 3.673% (fixed rate) | $4,967 | ||||||
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Portfolio Footnotes and Notes to Financial Statements
46
Table of Contents
Portfolio of Investments – continued
Portfolio Footnotes:
(a) | Mandatory tender date is earlier than stated maturity date. |
(c) | Refunded bond. |
(f) | All or a portion of the security has been segregated as collateral for an open futures contract. |
(k) | Each fund held securities fair valued in accordance with the policies adopted by the Board of Trustees. All of these security values were provided by an independent pricing service using an evaluated bid. As of March 31, 2008 the following funds held securities that were fair valued. |
Fund | Market Value | % of Market Value | |||
Mississippi Fund | $ | 87,932,384 | 98.99% | ||
New York Fund | 167,626,922 | 97.90% | |||
North Carolina Fund | 314,534,004 | 99.46% | |||
Pennsylvania Fund | 105,994,161 | 99.07% | |||
South Carolina Fund | 149,913,456 | 98.81% | |||
Tennessee Fund | 104,901,178 | 99.90% | |||
Virginia Fund | 287,434,306 | 98.85% | |||
West Virginia Fund | 128,526,237 | 99.46% |
(n) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities was $1,045,740, representing 0.7% of net assets for the South Carolina Fund. |
(p) | Primary inverse floater. |
(u) | Underlying security deposited into special purpose trust (“the trust”) by investment banker upon creation of self-deposited inverse floaters. |
(v) | Externally deposited inverse floater. |
The following abbreviations are used in this report and are defined:
BMA | Bond Market Assn. | |||||
COP | Certificate of Participation | |||||
ETM | Escrowed to Maturity | |||||
LOC | Letter of Credit | |||||
Insurers | Inverse Floaters | |||||
AMBAC | AMBAC Indemnity Corp. | RITES | Residual Interest Tax-Exempt Security | |||
ASSD GTY | Assured Guaranty Insurance Co. | |||||
CIFG | CDC IXIS Financial Guaranty | |||||
CONNIE LEE | Connie Lee Insurance Co. | |||||
FGIC | Financial Guaranty Insurance Co. | |||||
FHA | Federal Housing Administration | |||||
FNMA | Federal National Mortgage Assn. | |||||
FSA | Financial Security Assurance Inc. | |||||
GNMA | Government National Mortgage Assn. | |||||
MBIA | MBIA Insurance Corp. | |||||
SCIFG | Secondary CDC IXIS Financial Guaranty | |||||
RADIAN | Radian Asset Assurance, Inc. | |||||
XLCA | XL Capital Insurance Co. |
See Notes to Financial Statements
47
Table of Contents
Financial Statements
STATEMENTS OF ASSETS AND LIABILITIES
At 3/31/08
These statements represent each fund’s balance sheet, which details the assets and liabilities comprising the total value of each fund.
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | ||||||||
Assets | |||||||||||
Investments – | |||||||||||
Identified cost | $87,423,174 | $165,520,679 | $310,674,992 | $105,805,724 | |||||||
Unrealized appreciation (depreciation) | 1,409,210 | 5,706,243 | 5,559,012 | 1,213,740 | |||||||
Total investments, at value | $88,832,384 | $171,226,922 | $316,234,004 | $107,019,464 | |||||||
Cash | 265,701 | 908,232 | 6,230,308 | 40,465 | |||||||
Receivable for investments sold | 414,541 | — | 737,846 | 95,235 | |||||||
Receivable for fund shares sold | 49,012 | 1,503,185 | 487,504 | 401,415 | |||||||
Interest receivable | 1,132,942 | 2,549,273 | 5,005,895 | 1,613,187 | |||||||
Receivable from investment adviser | — | — | — | 26,481 | |||||||
Swaps, at value | 25,654 | — | — | — | |||||||
Other assets | 1,426 | 2,258 | 3,770 | 1,713 | |||||||
Total assets | $90,721,660 | $176,189,870 | $328,699,327 | $109,197,960 | |||||||
Liabilities | |||||||||||
Distributions payable | $136,390 | $229,718 | $359,657 | $129,046 | |||||||
Payable for daily variation margin on open futures contracts | 1,328 | 2,656 | 5,047 | 1,594 | |||||||
Payable for investments purchased | — | 4,468,550 | 2,451,255 | 735,075 | |||||||
Payable to the holder of the floating rate certificate from trust assets | 1,255,405 | 5,030,650 | 14,946,545 | 1,447,235 | |||||||
Payable for fund shares reacquired | 193,904 | 291,623 | 317,753 | 67,956 | |||||||
Payable to affiliates | |||||||||||
Management fee | 2,917 | 5,425 | 10,138 | 3,484 | |||||||
Shareholder servicing costs | 268 | 2,206 | 9,676 | 838 | |||||||
Distribution and service fees | 1,032 | 7,787 | 15,544 | 11,448 | |||||||
Administrative services fee | 243 | 344 | 535 | 266 | |||||||
Payable for independent trustees’ compensation | 8,187 | 10,558 | 13,527 | 8,099 | |||||||
Payable for interest expense and fees | 9,025 | 37,908 | 122,517 | 16,410 | |||||||
Accrued expenses and other liabilities | 51,519 | 69,095 | 80,316 | 61,721 | |||||||
Total liabilities | $1,660,218 | $10,156,520 | $18,332,510 | $2,483,172 | |||||||
Net assets | $89,061,442 | $166,033,350 | $310,366,817 | $106,714,788 | |||||||
Net assets consist of | |||||||||||
Paid-in capital | $87,651,091 | $160,097,913 | $302,418,570 | $105,828,110 | |||||||
Unrealized appreciation (depreciation) on investments | 1,442,920 | 5,722,355 | 5,589,625 | 1,223,407 | |||||||
Accumulated net realized gain (loss) on investments | (14,930 | ) | 330,334 | 2,121,697 | (347,582 | ) | |||||
Accumulated undistributed (distributions in excess of) net investment income | (17,639 | ) | (117,252 | ) | 236,925 | 10,853 | |||||
Net assets | $89,061,442 | $166,033,350 | $310,366,817 | $106,714,788 |
48
Table of Contents
Statements of Assets and Liabilities – continued
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | |||||
Net Assets | ||||||||
Class A | $80,892,648 | $126,125,895 | $257,883,631 | $77,866,425 | ||||
Class B | 8,168,794 | 20,052,594 | 21,537,361 | 28,848,363 | ||||
Class C | — | 19,854,861 | 30,945,825 | — | ||||
Total net assets | $89,061,442 | $166,033,350 | $310,366,817 | $106,714,788 | ||||
Shares of beneficial interest outstanding | ||||||||
Class A | 8,446,317 | 11,655,231 | 22,548,072 | 7,861,785 | ||||
Class B | 851,838 | 1,858,980 | 1,885,611 | 2,904,997 | ||||
Class C | — | 1,837,311 | 2,707,460 | — | ||||
Total shares of beneficial interest outstanding | 9,298,155 | 15,351,522 | 27,141,143 | 10,766,782 | ||||
Class A shares | ||||||||
Net asset value per share (net assets/shares of beneficial interest outstanding) | $9.58 | $10.82 | $11.44 | $9.90 | ||||
Offering price per share (100 / 95.25 × net asset value per share) | $10.06 | $11.36 | $12.01 | $10.39 | ||||
Class B shares | ||||||||
Net asset value and offering price per share (net assets/shares of beneficial interest outstanding) | $9.59 | $10.79 | $11.42 | $9.93 | ||||
Class C shares | ||||||||
Net asset value and offering price per share (net assets/shares of beneficial interest outstanding) | $— | $10.81 | $11.43 | $— |
On sales of $50,000 or more, the offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.
See Notes to Financial Statements
49
Table of Contents
Statements of Assets and Liabilities – continued
At 3/31/08 | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||
Assets | ||||||||||
Investments – | ||||||||||
Identified cost | $149,401,160 | $104,145,566 | $287,911,168 | $128,644,690 | ||||||
Unrealized appreciation (depreciation) | 2,312,296 | 855,612 | 2,873,138 | 581,547 | ||||||
Total investments, at value | $151,713,456 | $105,001,178 | $290,784,306 | $129,226,237 | ||||||
Cash | 3,310,328 | 3,492,997 | 52,480 | 2,547,630 | ||||||
Receivable for investments sold | — | 1,969,355 | 972,982 | 301,656 | ||||||
Receivable for fund shares sold | 170,162 | 195,822 | 1,299,938 | 492 | ||||||
Interest receivable | 2,535,137 | 1,543,543 | 4,469,995 | 2,152,894 | ||||||
Swaps, at value | 7,451 | 54,517 | 76,962 | 4,967 | ||||||
Other assets | 2,197 | 1,713 | 3,503 | 2,092 | ||||||
Total assets | $157,738,731 | $112,259,125 | $297,660,166 | $134,235,968 | ||||||
Liabilities | ||||||||||
Distributions payable | $182,650 | $180,419 | $382,090 | $156,414 | ||||||
Payable for daily variation margin on open futures contracts | 2,391 | — | 4,516 | 2,125 | ||||||
Payable for investments purchased | — | 992,778 | — | — | ||||||
Payable to the holder of the floating rate certificate from trust assets | 7,300,555 | — | 14,695,014 | 903,582 | ||||||
Payable for fund shares reacquired | 151,787 | 4,045 | 137,008 | 45,791 | ||||||
Swaps, at value | 3,936 | — | — | — | ||||||
Payable to affiliates | ||||||||||
Management fee | 4,899 | 3,620 | 9,190 | 4,342 | ||||||
Shareholder servicing costs | 953 | 540 | 10,110 | 670 | ||||||
Distribution and service fees | 6,814 | 4,938 | 12,494 | 5,644 | ||||||
Administrative services fee | 323 | 272 | 496 | 301 | ||||||
Payable for independent trustees’ compensation | 13,292 | 10,511 | 13,546 | 13,288 | ||||||
Payable for interest expense and fees | 95,717 | — | 143,512 | 4,051 | ||||||
Accrued expenses and other liabilities | 57,218 | 50,469 | 73,395 | 55,460 | ||||||
Total liabilities | $7,820,535 | $1,247,592 | $15,481,371 | $1,191,668 | ||||||
Net assets | $149,918,196 | $111,011,533 | $282,178,795 | $133,044,300 | ||||||
Net assets consist of | ||||||||||
Paid-in capital | $146,782,423 | $109,068,444 | $278,043,309 | $130,789,676 | ||||||
Unrealized appreciation (depreciation) on investments | 2,329,420 | 910,129 | 2,977,490 | 599,403 | ||||||
Accumulated net realized gain (loss) on investments | 770,964 | 618,538 | 1,518,322 | 1,700,255 | ||||||
Accumulated undistributed (distributions in excess of) net investment income | 35,389 | 414,422 | (360,326 | ) | (45,034 | ) | ||||
Net assets | $149,918,196 | $111,011,533 | $282,178,795 | $133,044,300 |
50
Table of Contents
Statements of Assets and Liabilities – continued
South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||
Net Assets | ||||||||
Class A | $134,422,387 | $101,028,339 | $257,132,643 | $124,948,209 | ||||
Class B | 15,495,809 | 9,983,194 | 9,940,684 | 8,096,091 | ||||
Class C | — | — | 15,105,468 | — | ||||
Total net assets | $149,918,196 | $111,011,533 | $282,178,795 | $133,044,300 | ||||
Shares of beneficial interest outstanding | ||||||||
Class A | 11,344,609 | 9,856,361 | 23,237,338 | 11,345,117 | ||||
Class B | 1,308,496 | 974,662 | 898,996 | 735,452 | ||||
Class C | — | �� | — | 1,365,388 | — | |||
Total shares of beneficial interest outstanding | 12,653,105 | 10,831,023 | 25,501,722 | 12,080,569 | ||||
Class A shares | ||||||||
Net asset value per share (net assets/shares of beneficial interest outstanding) | $11.85 | $10.25 | $11.07 | $11.01 | ||||
Offering price per share (100/95.25 × net asset value per share) | $12.44 | $10.76 | $11.62 | $11.56 | ||||
Class B shares | ||||||||
Net asset value and offering price per share (net assets/shares of beneficial interest outstanding) | $11.84 | $10.24 | $11.06 | $11.01 | ||||
Class C shares | ||||||||
Net asset value and offering price per share (net assets/shares of beneficial interest outstanding) | $— | $— | $11.06 | $— |
On sales of $50,000 or more, the offering price of Class A shares is reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, and Class C shares.
See Notes to Financial Statements
51
Table of Contents
Financial Statements
Year ended 3/31/08
These statements describe how much each fund earned in investment income and accrued in expenses. They also describe any gains or losses generated by each fund’s operations.
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | |||||||||
Net investment income | ||||||||||||
Interest | $4,516,260 | $8,250,345 | $17,582,318 | $5,488,077 | ||||||||
Expenses | ||||||||||||
Management fee | $470,490 | $881,489 | $1,745,028 | $591,332 | ||||||||
Distribution and service fees | 65,955 | 696,575 | 1,468,011 | 344,986 | ||||||||
Shareholder servicing costs | 62,131 | 115,652 | 215,521 | 82,662 | ||||||||
Administrative services fee | 22,878 | 34,157 | 58,022 | 26,229 | ||||||||
Independent trustees’ compensation | 3,868 | 6,166 | 12,302 | 5,833 | ||||||||
Custodian fee | 19,697 | 37,430 | 48,152 | 28,948 | ||||||||
Shareholder communications | 11,877 | 23,310 | 43,321 | 21,215 | ||||||||
Auditing fees | 61,253 | 61,253 | 61,253 | 61,253 | ||||||||
Legal fees | 7,778 | 10,126 | 8,936 | 8,311 | ||||||||
Interest expense and fees | 185,690 | 372,280 | 817,140 | 211,410 | ||||||||
Miscellaneous | 34,076 | 54,978 | 68,640 | 44,858 | ||||||||
Total expenses | $945,693 | $2,293,416 | $4,546,326 | $1,427,037 | ||||||||
Fees paid indirectly | (1,604 | ) | (2,204 | ) | (2,171 | ) | (1,577 | ) | ||||
Reduction of expenses by investment adviser | (214,259 | ) | (401,426 | ) | (794,681 | ) | (333,559 | ) | ||||
Net expenses | $729,830 | $1,889,786 | $3,749,474 | $1,091,901 | ||||||||
Net investment income | $3,786,430 | $6,360,559 | $13,832,844 | $4,396,176 | ||||||||
Realized and unrealized gain (loss) on investments | ||||||||||||
Realized gain (loss) (identified cost basis) | ||||||||||||
Investment transactions | $(90,395 | ) | $(45,691 | ) | $(253,609 | ) | $(347,983 | ) | ||||
Swap transactions | 160,152 | 845,695 | 865,370 | (115,639 | ) | |||||||
Net realized gain (loss) on investments | $69,757 | $800,004 | $611,761 | $(463,622 | ) | |||||||
Change in unrealized appreciation (depreciation) | ||||||||||||
Investments | $(2,144,233 | ) | $(4,588,119 | ) | $(12,147,893 | ) | $(3,196,818 | ) | ||||
Futures contracts | 8,056 | 16,112 | 30,613 | 9,667 | ||||||||
Swap transactions | 10,418 | (24,992 | ) | (64,508 | ) | (47,694 | ) | |||||
Net unrealized gain (loss) on investments | $(2,125,759 | ) | $(4,596,999 | ) | $(12,181,788 | ) | $(3,234,845 | ) | ||||
Net realized and unrealized gain (loss) on investments | $(2,056,002 | ) | $(3,796,995 | ) | $(11,570,027 | ) | $(3,698,467 | ) | ||||
Change in net assets from operations | $1,730,428 | $2,563,564 | $2,262,817 | $697,709 |
See Notes to Financial Statements
52
Table of Contents
Statements of Operations – continued
Year ended 3/31/08 | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||
Net investment income | ||||||||||||
Interest | $8,206,183 | $5,966,240 | $16,379,231 | $7,374,179 | ||||||||
Expenses | ||||||||||||
Management fee | $834,272 | $599,782 | $1,572,629 | $748,962 | ||||||||
Distribution and service fees | 648,441 | 453,414 | 1,156,038 | 536,324 | ||||||||
Shareholder servicing costs | 98,501 | 70,901 | 192,376 | 87,357 | ||||||||
Administrative services fee | 32,940 | 26,464 | 53,245 | 30,586 | ||||||||
Independent trustees’ compensation | 6,821 | 5,883 | 12,032 | 6,757 | ||||||||
Custodian fee | 28,713 | 22,021 | 44,660 | 25,004 | ||||||||
Shareholder communications | 17,965 | 8,159 | 39,831 | 12,255 | ||||||||
Auditing fees | 61,253 | 64,953 | 61,253 | 61,253 | ||||||||
Legal fees | 8,162 | 7,164 | 8,406 | 4,599 | ||||||||
Interest expense and fees | 326,856 | — | 578,710 | 337,494 | ||||||||
Miscellaneous | 45,432 | 40,504 | 69,657 | 44,723 | ||||||||
Total expenses | $2,109,356 | $1,299,245 | $3,788,837 | $1,895,314 | ||||||||
Fees paid indirectly | (1,625 | ) | (1,452 | ) | (2,649 | ) | (1,506 | ) | ||||
Reduction of expenses by investment adviser | (379,925 | ) | (273,154 | ) | (716,172 | ) | (341,063 | ) | ||||
Net expenses | $1,727,806 | $1,024,639 | $3,070,016 | $1,552,745 | ||||||||
Net investment income | $6,478,377 | $4,941,601 | $13,309,215 | $5,821,434 | ||||||||
Realized and unrealized gain (loss) on investments | ||||||||||||
Realized gain (loss) (identified cost basis) | ||||||||||||
Investment transactions | $94,835 | $(105,523 | ) | $(507,774 | ) | $(105,382 | ) | |||||
Swap transactions | 156,044 | 516,283 | 509,686 | (39,148 | ) | |||||||
Net realized gain (loss) on investments | $250,879 | $410,760 | $1,912 | $(144,530 | ) | |||||||
Change in unrealized appreciation (depreciation) | ||||||||||||
Investments | $(5,917,388 | ) | $(4,060,970 | ) | $(9,946,495 | ) | $(5,187,368 | ) | ||||
Futures contracts | 13,609 | — | 27,390 | 12,889 | ||||||||
Swap transactions | (19,024 | ) | 54,517 | 84,238 | (20,759 | ) | ||||||
Net unrealized gain (loss) on investments | $(5,922,803 | ) | $(4,006,453 | ) | $(9,834,867 | ) | $(5,195,238 | ) | ||||
Net realized and unrealized gain (loss) on investments | $(5,671,924 | ) | $(3,595,693 | ) | $(9,832,955 | ) | $(5,339,768 | ) | ||||
Change in net assets from operations | $806,453 | $1,345,908 | $3,476,260 | $481,666 |
See Notes to Financial Statements
53
Table of Contents
Financial Statements
STATEMENTS OF CHANGES IN NET ASSETS
These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.
Year ended 3/31/08 | Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | ||||||||
Change in net assets | ||||||||||||
From operations | ||||||||||||
Net investment income | $3,786,430 | $6,360,559 | $13,832,844 | $4,396,176 | ||||||||
Net realized gain (loss) on investments | 69,757 | 800,004 | 611,761 | (463,622 | ) | |||||||
Net unrealized gain (loss) on investments | (2,125,759 | ) | (4,596,999 | ) | (12,181,788 | ) | (3,234,845 | ) | ||||
Change in net assets from operations | $1,730,428 | $2,563,564 | $2,262,817 | $697,709 | ||||||||
Distributions declared to shareholders | ||||||||||||
From net investment income | ||||||||||||
Class A | $(3,419,568 | ) | $(5,237,179 | ) | $(10,767,677 | ) | $(3,196,032 | ) | ||||
Class B | (316,378 | ) | (809,779 | ) | (818,296 | ) | (1,079,665 | ) | ||||
Class C | — | (603,784 | ) | (1,081,750 | ) | — | ||||||
From net realized gain on investments | ||||||||||||
Class A | — | (571,156 | ) | (810,574 | ) | (19,950 | ) | |||||
Class B | — | (102,339 | ) | (71,914 | ) | (7,921 | ) | |||||
Class C | — | (80,011 | ) | (95,301 | ) | — | ||||||
Total distributions declared to shareholders | $(3,735,946 | ) | $(7,404,248 | ) | $(13,645,512 | ) | $(4,303,568 | ) | ||||
Change in net assets from fund share transactions | $6,188,450 | $10,475,057 | $(6,030,520 | ) | $2,658,614 | |||||||
Total change in net assets | $4,182,932 | $5,634,373 | $(17,413,215 | ) | $(947,245 | ) | ||||||
Net assets | ||||||||||||
At beginning of period | 84,878,510 | 160,398,977 | 327,780,032 | 107,662,033 | ||||||||
At end of period | $89,061,442 | $166,033,350 | $310,366,817 | $106,714,788 | ||||||||
Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period | $(17,639 | ) | $(117,252 | ) | $236,925 | $10,853 |
See Notes to Financial Statements
54
Table of Contents
Statements of Changes in Net Assets – continued
Year ended 3/31/08 | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||
Change in net assets | ||||||||||||
From operations | ||||||||||||
Net investment income | $6,478,377 | $4,941,601 | $13,309,215 | $5,821,434 | ||||||||
Net realized gain (loss) on investments | 250,879 | 410,760 | 1,912 | (144,530 | ) | |||||||
Net unrealized gain (loss) on investments | (5,922,803 | ) | (4,006,453 | ) | (9,834,867 | ) | (5,195,238 | ) | ||||
Change in net assets from operations | $806,453 | $1,345,908 | $3,476,260 | $481,666 | ||||||||
Distributions declared to shareholders | ||||||||||||
From net investment income | ||||||||||||
Class A | $(5,671,411 | ) | $(4,136,804 | ) | $(11,139,204 | ) | $(5,249,476 | ) | ||||
Class B | (649,595 | ) | (393,512 | ) | (391,875 | ) | (319,990 | ) | ||||
Class C | — | — | (467,129 | ) | — | |||||||
From net realized gain on investments | ||||||||||||
Class A | — | (298,704 | ) | (704,401 | ) | (154,048 | ) | |||||
Class B | — | (31,748 | ) | (28,072 | ) | (11,065 | ) | |||||
Class C | — | — | (34,732 | ) | — | |||||||
Total distributions declared to shareholders | $(6,321,006 | ) | $(4,860,768 | ) | $(12,765,413 | ) | $(5,734,579 | ) | ||||
Change in net assets from fund share transactions | $(1,012,407 | ) | $2,300,640 | $(2,522,224 | ) | $(1,763,894 | ) | |||||
Total change in net assets | $(6,526,960 | ) | $(1,214,220 | ) | $(11,811,377 | ) | $(7,016,807 | ) | ||||
Net assets | ||||||||||||
At beginning of period | 156,445,156 | 112,225,753 | 293,990,172 | 140,061,107 | ||||||||
At end of period | $149,918,196 | $111,011,533 | $282,178,795 | $133,044,300 | ||||||||
Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period | $35,389 | $414,422 | $(360,326 | ) | $(45,034 | ) |
See Notes to Financial Statements
55
Table of Contents
Statements of Changes in Net Assets – continued
Year ended 3/31/07 | Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | ||||||||
Change in net assets | ||||||||||||
From operations | ||||||||||||
Net investment income | $3,820,253 | $7,253,116 | $13,919,838 | $4,545,980 | ||||||||
Net realized gain (loss) on investments | 128,218 | 464,281 | 1,266,148 | 260,716 | ||||||||
Net unrealized gain (loss) on investments | 271,563 | 24,302 | (739,267 | ) | 368,306 | |||||||
Change in net assets from operations | $4,220,034 | $7,741,699 | $14,446,719 | $5,175,002 | ||||||||
Distributions declared to shareholders | ||||||||||||
From net investment income | ||||||||||||
Class A | $(3,270,278 | ) | $(5,127,904 | ) | $(11,182,764 | ) | $(2,996,195 | ) | ||||
Class B | (361,313 | ) | (990,363 | ) | (1,057,404 | ) | (1,242,788 | ) | ||||
Class C | — | (567,073 | ) | (1,144,699 | ) | — | ||||||
From net realized gain on investments | ||||||||||||
Class A | — | (556,342 | ) | (660,858 | ) | — | ||||||
Class B | — | (125,175 | ) | (73,300 | ) | — | ||||||
Class C | — | (72,128 | ) | (80,834 | ) | — | ||||||
Total distributions declared to shareholders | $(3,631,591 | ) | $(7,438,985 | ) | $(14,199,859 | ) | $(4,238,983 | ) | ||||
Change in net assets from fund share transactions | $(1,771,453 | ) | $(5,489,028 | ) | $(7,423,527 | ) | $(4,345,538 | ) | ||||
Total change in net assets | $(1,183,010 | ) | $(5,186,314 | ) | $(7,176,667 | ) | $(3,409,519 | ) | ||||
Net assets | ||||||||||||
At beginning of period | 86,061,520 | 165,585,291 | 334,956,699 | 111,071,552 | ||||||||
At end of period | $84,878,510 | $160,398,977 | $327,780,032 | $107,662,033 | ||||||||
Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period | $19,660 | $(222,753 | ) | $(432,641 | ) | $(72,919 | ) |
See Notes to Financial Statements
56
Table of Contents
Statements of Changes in Net Assets – continued
Year ended 3/31/07 | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||
Change in net assets | ||||||||||||
From operations | ||||||||||||
Net investment income | $6,789,990 | $4,944,816 | $13,333,399 | $6,264,424 | ||||||||
Net realized gain (loss) on investments | 253,412 | 425,988 | 746,232 | 1,224,740 | ||||||||
Net unrealized gain (loss) on investments | (192,003 | ) | (553,965 | ) | (901,147 | ) | (1,092,333 | ) | ||||
Change in net assets from operations | $6,851,399 | $4,816,839 | $13,178,484 | $6,396,831 | ||||||||
Distributions declared to shareholders | ||||||||||||
From net investment income | ||||||||||||
Class A | $(5,495,872 | ) | $(4,052,871 | ) | $(11,631,198 | ) | $(5,366,646 | ) | ||||
Class B | (821,365 | ) | (523,277 | ) | (529,064 | ) | (388,328 | ) | ||||
Class C | — | — | (468,928 | ) | — | |||||||
From net realized gain on investments | ||||||||||||
Class A | — | (44,099 | ) | (69,200 | ) | (817,240 | ) | |||||
Class B | — | (6,370 | ) | (3,504 | ) | (68,586 | ) | |||||
Class C | — | — | (3,300 | ) | — | |||||||
Total distributions declared to shareholders | $(6,317,237 | ) | $(4,626,617 | ) | $(12,705,194 | ) | $(6,640,800 | ) | ||||
Change in net assets from fund share transactions | $(1,470,342 | ) | $(4,007,457 | ) | $(13,995,838 | ) | $(6,498,685 | ) | ||||
Total change in net assets | $(936,180 | ) | $(3,817,235 | ) | $(13,522,548 | ) | $(6,742,654 | ) | ||||
Net assets | ||||||||||||
At beginning of period | 157,381,336 | 116,042,988 | 307,512,720 | 146,803,761 | ||||||||
At end of period | $156,445,156 | $112,225,753 | $293,990,172 | $140,061,107 | ||||||||
Accumulated undistributed (distributions in excess of) net investment income included in net assets at end of period | $121,116 | $6,717 | $(606,173 | ) | $27,519 |
See Notes to Financial Statements
57
Table of Contents
Financial Statements
MFS® MISSISSIPPI MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $9.80 | $9.73 | $9.82 | $10.02 | $10.02 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.44 | $0.45 | (z) | $0.44 | $0.46 | $0.46 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.23 | ) | 0.05 | (z) | (0.09 | ) | (0.19 | ) | 0.01 | ||||||
Total from investment operations | $0.21 | $0.50 | $0.35 | $0.27 | $0.47 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.43 | ) | $(0.43 | ) | $(0.44 | ) | $(0.47 | ) | $(0.47 | ) | |||||
Net asset value, end of period | $9.58 | $9.80 | $9.73 | $9.82 | $10.02 | ||||||||||
Total return (%) (r)(s)(t) | 2.21 | 5.20 | 3.59 | 2.76 | 4.77 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.03 | 1.11 | 1.07 | 0.93 | 0.82 | ||||||||||
Expenses after expense reductions (f) | 0.78 | 0.86 | 0.82 | 0.68 | 0.62 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.56 | 0.62 | 0.64 | 0.58 | 0.62 | ||||||||||
Net investment income | 4.51 | 4.59 | (z) | 4.48 | 4.70 | 4.61 | |||||||||
Portfolio turnover | 13 | 12 | 9 | 19 | 12 | ||||||||||
Net assets at end of period (000 Omitted) | $80,893 | $75,470 | $75,597 | $79,574 | $82,507 |
See Notes to Financial Statements
58
Table of Contents
Financial Highlights – continued
MFS® MISSISSIPPI MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $9.81 | $9.74 | $9.84 | $10.03 | $10.04 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.36 | $0.38 | (z) | $0.37 | $0.39 | $0.38 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.22 | ) | 0.04 | (z) | (0.10 | ) | (0.19 | ) | (0.01 | )(g) | |||||
Total from investment operations | $0.14 | $0.42 | $0.27 | $0.20 | $0.37 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.36 | ) | $(0.35 | ) | $(0.37 | ) | $(0.39 | ) | $(0.38 | ) | |||||
Net asset value, end of period | $9.59 | $9.81 | $9.74 | $9.84 | $10.03 | ||||||||||
Total return (%) (r)(s)(t) | 1.43 | 4.41 | 2.71 | 2.08 | 3.80 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.80 | 1.87 | 1.83 | 1.70 | 1.64 | ||||||||||
Expenses after expense reductions (f) | 1.55 | 1.62 | 1.58 | 1.45 | 1.44 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.33 | 1.38 | 1.40 | 1.35 | 1.44 | ||||||||||
Net investment income | 3.75 | 3.83 | (z) | 3.72 | 3.93 | 3.79 | |||||||||
Portfolio turnover | 13 | 12 | 9 | 19 | 12 | ||||||||||
Net assets at end of period (000 Omitted) | $8,169 | $9,408 | $10,465 | $11,544 | $13,177 |
Any redemption fees charged by the fund during the 2005 fiscal year resulted in a per share impact of less than $0.01.
(d) | Per share data is based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(g) | The per share amount varies from the net realized and unrealized gain/loss for the period because of the timing of sales of fund shares and the per share amount of realized and unrealized gains and losses at such time. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.01 per share to net investment income, a decrease of $0.01 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.07% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
59
Table of Contents
Financial Highlights – continued
MFS® NEW YORK MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.15 | $11.13 | $11.30 | $11.53 | $11.49 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.46 | $ 0.52 | (z) | $0.49 | $0.51 | $0.51 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.26 | ) | 0.03 | (z) | (0.12 | ) | (0.24 | ) | 0.04 | ||||||
Total from investment operations | $0.20 | $0.55 | $0.37 | $0.27 | $0.55 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.48 | ) | $(0.48 | ) | $(0.49 | ) | $(0.50 | ) | $(0.51 | ) | |||||
From net realized gain on investments | (0.05 | ) | (0.05 | ) | (0.05 | ) | — | — | |||||||
Total distributions declared to shareholders | $(0.53 | ) | $(0.53 | ) | $(0.54 | ) | $(0.50 | ) | $(0.51 | ) | |||||
Net asset value, end of period | $10.82 | $11.15 | $11.13 | $11.30 | $11.53 | ||||||||||
Total return (%) (r)(s)(t) | 1.84 | 5.07 | 3.30 | 2.45 | 4.90 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.25 | 1.32 | 1.28 | 1.14 | 1.13 | ||||||||||
Expenses after expense reductions (f) | 1.00 | 1.06 | 1.03 | 0.89 | 0.93 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.77 | 0.82 | 0.85 | 0.79 | 0.86 | ||||||||||
Net investment income | 4.16 | 4.66 | (z) | 4.36 | 4.47 | 4.39 | |||||||||
Portfolio turnover | 22 | 8 | 12 | 20 | 13 | ||||||||||
Net assets at end of period (000 Omitted) | $126,126 | $118,924 | $118,476 | $125,861 | $131,642 | ||||||||||
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.11 | $11.09 | $11.27 | $11.49 | $11.45 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.38 | $ 0.43 | (z) | $0.41 | $0.42 | $0.42 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.25 | ) | 0.04 | (z) | (0.14 | ) | (0.22 | ) | 0.04 | ||||||
Total from investment operations | $0.13 | $0.47 | $0.27 | $0.20 | $0.46 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.40 | ) | $(0.40 | ) | $(0.40 | ) | $(0.42 | ) | $(0.42 | ) | |||||
From net realized gain on investments | (0.05 | ) | (0.05 | ) | (0.05 | ) | — | — | |||||||
Total distributions declared to shareholders | $(0.45 | ) | $(0.45 | ) | $(0.45 | ) | $(0.42 | ) | $(0.42 | ) | |||||
Net asset value, end of period | $10.79 | $11.11 | $11.09 | $11.27 | $11.49 | ||||||||||
Total return (%) (r)(s)(t) | 1.15 | 4.29 | 2.43 | 1.77 | 4.12 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 2.00 | 2.07 | 2.03 | 1.89 | 1.87 | ||||||||||
Expenses after expense reductions (f) | 1.75 | 1.82 | 1.78 | 1.64 | 1.67 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.52 | 1.57 | 1.60 | 1.54 | 1.60 | ||||||||||
Net investment income | 3.43 | 3.91 | (z) | 3.61 | 3.70 | 3.62 | |||||||||
Portfolio turnover | 22 | 8 | 12 | 20 | 13 | ||||||||||
Net assets at end of period (000 Omitted) | $20,053 | $25,654 | $30,046 | $35,328 | $41,509 |
See Notes to Financial Statements
60
Table of Contents
Financial Highlights – continued
MFS® NEW YORK MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class C | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.13 | $11.11 | $11.29 | $11.51 | $11.47 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.37 | $0.43 | (z) | $0.41 | $0.42 | $0.42 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.24 | ) | 0.04 | (z) | (0.14 | ) | (0.22 | ) | 0.04 | ||||||
Total from investment operations | $0.13 | $0.47 | $0.27 | $0.20 | $0.46 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.40 | ) | $(0.40 | ) | $(0.40 | ) | $(0.42 | ) | $(0.42 | ) | |||||
From net realized gain on investments | (0.05 | ) | (0.05 | ) | (0.05 | ) | — | — | |||||||
Total distributions declared to shareholders | $(0.45 | ) | $(0.45 | ) | $(0.45 | ) | $(0.42 | ) | $(0.42 | ) | |||||
Net asset value, end of period | $10.81 | $11.13 | $11.11 | $11.29 | $11.51 | ||||||||||
Total return (%) (r)(s)(t) | 1.16 | 4.29 | 2.43 | 1.78 | 4.12 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 2.00 | 2.07 | 2.03 | 1.89 | 1.87 | ||||||||||
Expenses after expense reductions (f) | 1.75 | 1.82 | 1.78 | 1.64 | 1.67 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.52 | 1.57 | 1.60 | 1.54 | 1.60 | ||||||||||
Net investment income | 3.40 | 3.92 | (z) | 3.61 | 3.72 | 3.63 | |||||||||
Portfolio turnover | 22 | 8 | 12 | 20 | 13 | ||||||||||
Net assets at end of period (000 Omitted) | $19,855 | $15,822 | $17,064 | $19,730 | $21,907 |
Any redemption fees charged by the fund during the 2005 fiscal year resulted in a per share impact of less than $0.01.
(d) | Per share data is based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.02 per share to net investment income, a decrease of $0.02 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.22% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
61
Table of Contents
Financial Highlights – continued
MFS® NORTH CAROLINA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.86 | $11.85 | $11.99 | $12.30 | $12.24 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.52 | $ 0.51 | (z) | $0.51 | $0.53 | $0.53 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.42 | ) | 0.03 | (z) | (0.09 | ) | (0.27 | ) | 0.07 | ||||||
Total from investment operations | $0.10 | $0.54 | $0.42 | $0.26 | $0.60 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.48 | ) | $(0.50 | ) | $(0.51 | ) | $(0.53 | ) | $(0.53 | ) | |||||
From net realized gain on investments | (0.04 | ) | (0.03 | ) | (0.05 | ) | (0.04 | ) | (0.01 | ) | |||||
Total distributions declared to shareholders | $(0.52 | ) | $(0.53 | ) | $(0.56 | ) | $(0.57 | ) | $(0.54 | ) | |||||
Net asset value, end of period | $11.44 | $11.86 | $11.85 | $11.99 | $12.30 | ||||||||||
Total return (%) (r)(s)(t) | 0.83 | 4.60 | 3.49 | 2.15 | 5.01 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.32 | 1.36 | 1.32 | 1.10 | 1.12 | ||||||||||
Expenses after expense reductions (f) | 1.07 | 1.11 | 1.08 | 0.85 | 0.92 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.81 | 0.86 | 0.89 | 0.85 | 0.92 | ||||||||||
Net investment income | 4.48 | 4.34 | (z) | 4.24 | 4.38 | 4.30 | |||||||||
Portfolio turnover | 17 | 12 | 8 | 9 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $257,884 | $268,108 | $270,124 | $279,875 | $305,185 | ||||||||||
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.84 | $11.83 | $11.98 | $12.29 | $12.23 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.45 | $ 0.44 | (z) | $0.43 | $0.45 | $0.45 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.43 | ) | 0.02 | (z) | (0.10 | ) | (0.27 | ) | 0.07 | ||||||
Total from investment operations | $0.02 | $0.46 | $0.33 | $0.18 | $0.52 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.40 | ) | $(0.42 | ) | $(0.43 | ) | $(0.45 | ) | $(0.45 | ) | |||||
From net realized gain on investments | (0.04 | ) | (0.03 | ) | (0.05 | ) | (0.04 | ) | (0.01 | ) | |||||
Total distributions declared to shareholders | $(0.44 | ) | $(0.45 | ) | $(0.48 | ) | $(0.49 | ) | $(0.46 | ) | |||||
Net asset value, end of period | $11.42 | $11.84 | $11.83 | $11.98 | $12.29 | ||||||||||
Total return (%) (r)(s)(t) | 0.17 | 3.93 | 2.73 | 1.49 | 4.33 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.97 | 2.01 | 1.98 | 1.75 | 1.76 | ||||||||||
Expenses after expense reductions (f) | 1.72 | 1.76 | 1.73 | 1.50 | 1.56 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.47 | 1.51 | 1.54 | 1.50 | 1.56 | ||||||||||
Net investment income | 3.83 | 3.70 | (z) | 3.59 | 3.72 | 3.64 | |||||||||
Portfolio turnover | 17 | 12 | 8 | 9 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $21,537 | $26,520 | $32,610 | $40,251 | $50,363 |
See Notes to Financial Statements
62
Table of Contents
Financial Highlights – continued
MFS® NORTH CAROLINA MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class C | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.85 | $11.84 | $11.98 | $12.29 | $12.23 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.45 | $0.44 | (z) | $0.43 | $0.45 | $0.45 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.43 | ) | 0.02 | (z) | (0.09 | ) | (0.27 | ) | 0.07 | ||||||
Total from investment operations | $0.02 | $0.46 | $0.34 | $0.18 | $0.52 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.40 | ) | $(0.42 | ) | $(0.43 | ) | $(0.45 | ) | $(0.45 | ) | |||||
From net realized gain on investments | (0.04 | ) | (0.03 | ) | (0.05 | ) | (0.04 | ) | (0.01 | ) | |||||
Total distributions declared to shareholders | $(0.44 | ) | $(0.45 | ) | $(0.48 | ) | $(0.49 | ) | $(0.46 | ) | |||||
Net asset value, end of period | $11.43 | $11.85 | $11.84 | $11.98 | $12.29 | ||||||||||
Total return (%) (r)(s)(t) | 0.17 | 3.93 | 2.82 | 1.49 | 4.33 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.97 | 2.01 | 1.98 | 1.76 | 1.77 | ||||||||||
Expenses after expense reductions (f) | 1.72 | 1.76 | 1.73 | 1.51 | 1.57 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.47 | 1.51 | 1.54 | 1.51 | 1.57 | ||||||||||
Net investment income | 3.83 | 3.69 | (z) | 3.61 | 3.76 | 3.67 | |||||||||
Portfolio turnover | 17 | 12 | 8 | 9 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $30,946 | $33,152 | $32,223 | $32,897 | $35,256 |
Any redemption fees charged by the fund during the 2005 fiscal year resulted in a per share impact of less than $0.01.
(d) | Per share data are based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.02 per share to net investment income, a decrease of $0.02 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.16% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
63
Table of Contents
Financial Highlights – continued
MFS® PENNSYLVANIA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $10.24 | $10.15 | $10.17 | $10.31 | $10.21 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.44 | $0.45 | (z) | $0.43 | $0.44 | $0.42 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.36 | ) | 0.06 | (z) | (0.02 | ) | (0.14 | ) | 0.10 | ||||||
Total from investment operations | $0.08 | $0.51 | $0.41 | $0.30 | $0.52 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.42 | ) | $(0.42 | ) | $(0.43 | ) | $(0.44 | ) | $(0.42 | ) | |||||
From net realized gain on investments | (0.00 | )(w) | — | — | — | — | |||||||||
Net asset value, end of period | $9.90 | $10.24 | $10.15 | $10.17 | $10.31 | ||||||||||
Total return (%) (r)(s)(t) | 0.87 | 5.17 | 4.08 | 2.97 | 5.12 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.11 | 1.18 | 1.13 | 1.03 | 1.05 | ||||||||||
Expenses after expense reductions (f) | 0.80 | 0.82 | 0.77 | 0.69 | 0.75 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.60 | 0.60 | 0.60 | 0.60 | 0.64 | ||||||||||
Net investment income | 4.32 | 4.45 | (z) | 4.24 | 4.33 | 4.12 | |||||||||
Portfolio turnover | 17 | 9 | 9 | 20 | 24 | ||||||||||
Net assets at end of period (000 Omitted) | $77,866 | $73,813 | $74,429 | $67,942 | $75,083 |
See Notes to Financial Statements
64
Table of Contents
Financial Highlights – continued
MFS® PENNSYLVANIA MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $10.27 | $10.18 | $10.20 | $10.34 | $10.24 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.36 | $0.38 | (z) | $0.36 | $0.36 | $0.34 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.35 | ) | 0.06 | (z) | (0.03 | ) | (0.14 | ) | 0.10 | ||||||
Total from investment operations | $0.01 | $0.44 | $0.33 | $0.22 | $0.44 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.35 | ) | $(0.35 | ) | $(0.35 | ) | $(0.36 | ) | $(0.34 | ) | |||||
From net realized gain on investments | (0.00 | )(w) | — | — | — | — | |||||||||
Net asset value, end of period | $9.93 | $10.27 | $10.18 | $10.20 | $10.34 | ||||||||||
Total return (%) (r)(s)(t) | 0.11 | 4.37 | 3.30 | 2.19 | 4.38 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.86 | 1.94 | 1.89 | 1.80 | 1.85 | ||||||||||
Expenses after expense reductions (f) | 1.56 | 1.58 | 1.53 | 1.46 | 1.55 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.36 | 1.36 | 1.36 | 1.37 | 1.44 | ||||||||||
Net investment income | 3.56 | 3.69 | (z) | 3.49 | 3.56 | 3.32 | |||||||||
Portfolio turnover | 17 | 9 | 9 | 20 | 24 | ||||||||||
Net assets at end of period (000 Omitted) | $28,848 | $33,849 | $38,642 | $41,455 | $48,480 |
Any redemption fees charged by the fund during the 2005 fiscal year resulted in a per share impact of less than $0.01.
(d) | Per share data are based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(w) | Per share amount was less than $0.01. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.02 per share to net investment income, a decrease of $0.02 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.15% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
65
Table of Contents
Financial Highlights – continued
MFS® SOUTH CAROLINA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $12.29 | $12.25 | $12.36 | $12.61 | $12.53 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.53 | $ 0.55 | (z) | $0.54 | $0.56 | $0.55 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.45 | ) | 0.00 | (w)(z) | (0.11 | ) | (0.25 | ) | 0.10 | ||||||
Total from investment operations | $0.08 | $0.55 | $0.43 | $0.31 | $0.65 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.52 | ) | $(0.51 | ) | $(0.54 | ) | $(0.56 | ) | $(0.57 | ) | |||||
Net asset value, end of period | $11.85 | $12.29 | $12.25 | $12.36 | $12.61 | ||||||||||
Total return (%) (r)(s)(t) | 0.62 | 4.57 | 3.48 | 2.52 | 5.30 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.31 | 1.37 | 1.34 | 1.23 | 1.21 | ||||||||||
Expenses after expense reductions (f) | 1.06 | 1.12 | 1.09 | 0.98 | 1.01 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.85 | 0.89 | 0.92 | 0.89 | 0.94 | ||||||||||
Net investment income | 4.36 | 4.45 | (z) | 4.35 | 4.50 | 4.39 | |||||||||
Portfolio turnover | 13 | 10 | 13 | 15 | 16 | ||||||||||
Net assets at end of period (000 Omitted) | $134,422 | $135,766 | $131,167 | $130,342 | $137,911 |
See Notes to Financial Statements
66
Table of Contents
Financial Highlights – continued
MFS® SOUTH CAROLINA MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $12.29 | $12.24 | $12.36 | $12.60 | $12.52 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.45 | $0.47 | (z) | $0.46 | $0.48 | $0.47 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.46 | ) | 0.01 | (z) | (0.12 | ) | (0.24 | ) | 0.10 | ||||||
Total from investment operations | $(0.01 | ) | $0.48 | $0.34 | $0.24 | $0.57 | |||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.44 | ) | $(0.43 | ) | $(0.46 | ) | $(0.48 | ) | $(0.49 | ) | |||||
Net asset value, end of period | $11.84 | $12.29 | $12.24 | $12.36 | $12.60 | ||||||||||
Total return (%) (r)(s)(t) | (0.12 | ) | 3.98 | 2.73 | 1.94 | 4.62 | |||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.96 | 2.02 | 1.99 | 1.88 | 1.86 | ||||||||||
Expenses after expense reductions (f) | 1.71 | 1.77 | 1.74 | 1.63 | 1.66 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.50 | 1.54 | 1.57 | 1.54 | 1.59 | ||||||||||
Net investment income | 3.71 | 3.80 | (z) | 3.70 | 3.85 | 3.74 | |||||||||
Portfolio turnover | 13 | 10 | 13 | 15 | 16 | ||||||||||
Net assets at end of period (000 Omitted) | $15,496 | $20,679 | $26,214 | $31,032 | $36,817 |
Any redemption fee charged by the fund during the 2005 fiscal year resulted in a per share impact of less than $0.01
(d) | Per share data are based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(w) | Per share amount was less than $0.01. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.04 per share to net investment income, a decrease of $0.04 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.29% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
67
Table of Contents
Financial Highlights – continued
MFS® TENNESSEE MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $10.58 | $10.56 | $10.71 | $10.96 | $10.90 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.48 | $0.47 | (z) | $0.45 | $0.45 | $0.45 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.34 | ) | (0.01 | )(z) | (0.12 | ) | (0.18 | ) | 0.06 | ||||||
Total from investment operations | $0.14 | $0.46 | $0.33 | $0.27 | $0.51 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.44 | ) | $(0.44 | ) | $(0.44 | ) | $(0.44 | ) | $(0.45 | ) | |||||
From net realized gain on investments | (0.03 | ) | (0.00 | )(w) | (0.04 | ) | (0.08 | ) | — | ||||||
Total distributions declared to shareholders | $(0.47 | ) | $(0.44 | ) | $(0.48 | ) | $(0.52 | ) | $(0.45 | ) | |||||
Net asset value, end of period | $10.25 | $10.58 | $10.56 | $10.71 | $10.96 | ||||||||||
Total return (%) (r)(s)(t) | 1.38 | 4.43 | 3.13 | 2.53 | 4.80 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.13 | 1.17 | 1.19 | 1.16 | 1.14 | ||||||||||
Expenses after expense reductions (f) | 0.88 | 0.92 | 0.94 | 0.91 | 0.94 | ||||||||||
Net investment income | 4.61 | 4.44 | (z) | 4.17 | 4.16 | 4.08 | |||||||||
Portfolio turnover | 26 | 15 | 5 | 11 | 19 | ||||||||||
Net assets at end of period (000 Omitted) | $101,028 | $99,302 | $98,825 | $104,837 | $118,990 |
See Notes to Financial Statements
68
Table of Contents
Financial Highlights – continued
MFS® TENNESSEE MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $10.57 | $10.56 | $10.70 | $10.95 | $10.89 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.41 | $0.40 | (z) | $0.38 | $0.38 | $0.38 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.34 | ) | (0.02 | )(z) | (0.11 | ) | (0.18 | ) | 0.06 | ||||||
Total from investment operations | $0.07 | $0.38 | $0.27 | $0.20 | $0.44 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.37 | ) | $(0.37 | ) | $(0.37 | ) | $(0.37 | ) | $(0.38 | ) | |||||
From net realized gain on investments | (0.03 | ) | (0.00 | )(w) | (0.04 | ) | (0.08 | ) | — | ||||||
Total distributions declared to shareholders | $(0.40 | ) | $(0.37 | ) | $(0.41 | ) | $(0.45 | ) | $(0.38 | ) | |||||
Net asset value, end of period | $10.24 | $10.57 | $10.56 | $10.70 | $10.95 | ||||||||||
Total return (%) (r)(s)(t) | 0.72 | 3.66 | 2.56 | 1.87 | 4.12 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.78 | 1.82 | 1.84 | 1.81 | 1.79 | ||||||||||
Expenses after expense reductions (f) | 1.53 | 1.57 | 1.59 | 1.56 | 1.59 | ||||||||||
Net investment income | 3.93 | 3.78 | (z) | 3.52 | 3.51 | 3.43 | |||||||||
Portfolio turnover | 26 | 15 | 5 | 11 | 19 | ||||||||||
Net assets at end of period (000 Omitted) | $9,983 | $12,924 | $17,217 | $20,689 | $24,306 |
(d) | Per share data are based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(w) | Per share amount was less than $0.01. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.03 per share to net investment income, a decrease of $0.03 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.27% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
69
Table of Contents
Financial Highlights – continued
MFS® VIRGINIA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.43 | $11.41 | $11.52 | $11.73 | $11.61 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (loss) (d) | $0.53 | $(0.51 | )(z) | $0.51 | $0.53 | $0.53 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.38 | ) | (0.00 | )(w)(z) | (0.12 | ) | (0.21 | ) | 0.12 | ||||||
Total from investment operations | $0.15 | $(0.51 | ) | $0.39 | $0.32 | $0.65 | |||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.48 | ) | $(0.49 | ) | $(0.50 | ) | $(0.53 | ) | $(0.53 | ) | |||||
From net realized gain on investments | (0.03 | ) | (0.00 | )(w) | — | — | — | ||||||||
Total distributions declared to shareholders | $(0.51 | ) | $(0.49 | ) | $(0.50 | ) | $(0.53 | ) | $(0.53 | ) | |||||
Net asset value, end of period | $11.07 | $11.43 | $11.41 | $11.52 | $11.73 | ||||||||||
Total return (%) (r)(s)(t) | 1.34 | 4.57 | 3.45 | 2.83 | 5.70 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.27 | 1.32 | 1.30 | 1.10 | 1.13 | ||||||||||
Expenses after expense reductions (f) | 1.02 | 1.07 | 1.05 | 0.85 | 0.93 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.82 | 0.87 | 0.90 | 0.85 | 0.93 | ||||||||||
Net investment income | 4.72 | 4.51 | (z) | 4.38 | 4.63 | 4.53 | |||||||||
Portfolio turnover | 27 | 8 | 13 | 11 | 11 | ||||||||||
Net assets at end of period (000 Omitted) | $257,133 | $269,068 | $277,633 | $285,185 | $301,218 | ||||||||||
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.42 | $11.40 | $11.51 | $11.72 | $11.60 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.46 | $ 0.44 | (z) | $0.43 | $0.46 | $0.45 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.38 | ) | (0.00 | )(w)(z) | (0.11 | ) | (0.21 | ) | 0.12 | ||||||
Total from investment operations | $0.08 | $0.44 | $0.32 | $0.25 | $0.57 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.41 | ) | $(0.42 | ) | $(0.43 | ) | $(0.46 | ) | $(0.45 | ) | |||||
From net realized gain on investments | (0.03 | ) | (0.00 | )(w) | — | — | — | ||||||||
Total distributions declared to shareholders | $(0.44 | ) | $(0.42 | ) | $(0.43 | ) | $(0.46 | ) | $(0.45 | ) | |||||
Net asset value, end of period | $11.06 | $11.42 | $11.40 | $11.51 | $11.72 | ||||||||||
Total return (%) (r)(s)(t) | 0.68 | 3.89 | 2.78 | 2.16 | 5.02 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.92 | 1.97 | 1.95 | 1.75 | 1.77 | ||||||||||
Expenses after expense reductions (f) | 1.67 | 1.72 | 1.70 | 1.50 | 1.57 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.47 | 1.52 | 1.55 | 1.50 | 1.57 | ||||||||||
Net investment income | 4.07 | 3.87 | (z) | 3.73 | 3.98 | 3.88 | |||||||||
Portfolio turnover | 27 | 8 | 13 | 11 | 11 | ||||||||||
Net assets at end of period (000 Omitted) | $9,941 | $12,545 | $16,885 | $19,637 | $23,564 |
See Notes to Financial Statements
70
Table of Contents
Financial Highlights – continued
MFS® VIRGINIA MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class C | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.43 | $11.41 | $11.52 | $11.72 | $11.61 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.46 | $0.44 | (z) | $0.43 | $0.46 | $0.45 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.39 | ) | (0.00 | )(w)(z) | (0.11 | ) | (0.20 | ) | 0.11 | ||||||
Total from investment operations | $0.07 | $0.44 | $0.32 | $0.26 | $0.56 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.41 | ) | $(0.42 | ) | $(0.43 | ) | $(0.46 | ) | $(0.45 | ) | |||||
From net realized gain on investments | (0.03 | ) | (0.00 | )(w) | — | — | — | ||||||||
Total distributions declared to shareholders | $(0.44 | ) | $(0.42 | ) | $(0.43 | ) | $(0.46 | ) | $(0.45 | ) | |||||
Net asset value, end of period | $11.06 | $11.43 | $11.41 | $11.52 | $11.72 | ||||||||||
Total return (%) (r)(s)(t) | 0.59 | 3.89 | 2.78 | 2.25 | 4.93 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.93 | 1.97 | 1.95 | 1.75 | 1.77 | ||||||||||
Expenses after expense reductions (f) | 1.67 | 1.72 | 1.70 | 1.50 | 1.57 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.47 | 1.52 | 1.55 | 1.50 | 1.57 | ||||||||||
Net investment income | 4.06 | 3.86 | (z) | 3.72 | 3.98 | 3.88 | |||||||||
Portfolio turnover | 27 | 8 | 13 | 11 | 11 | ||||||||||
Net assets at end of period (000 Omitted) | $15,105 | $12,377 | $12,995 | $12,208 | $13,338 |
Any redemption fee charged by the fund during the 2005 fiscal year resulted in a per share impact of less than $0.01
(d) | Per share data are based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(w) | Per share amount was less than $0.01. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.04 per share to net investment income, a decrease of $0.04 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.29% to the net investment income ratio for each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
71
Table of Contents
Financial Highlights – continued
MFS® WEST VIRGINIA MUNICIPAL BOND FUND
The financial highlights table is intended to help you understand the fund financial performance for the past 5 years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Years ended 3/31 | |||||||||||||||
Class A | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.45 | $11.47 | $11.58 | $11.82 | $11.77 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.49 | $ 0.51 | (z) | $0.48 | $0.51 | $0.51 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.45 | ) | 0.01 | (z) | (0.11 | ) | (0.25 | ) | 0.05 | ||||||
Total from investment operations | $0.04 | $0.52 | $0.37 | $0.26 | $0.56 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.47 | ) | $(0.47 | ) | $(0.48 | ) | $(0.50 | ) | $(0.51 | ) | |||||
From net realized gain on investments | (0.01 | ) | (0.07 | ) | — | — | — | ||||||||
Total distributions declared to shareholders | $(0.48 | ) | $(0.54 | ) | $(0.48 | ) | $(0.50 | ) | $(0.51 | ) | |||||
Net asset value, end of period | $11.01 | $11.45 | $11.47 | $11.58 | $11.82 | ||||||||||
Total return (%) (r)(s)(t) | 0.35 | 4.59 | 3.21 | 2.28 | 4.84 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.35 | 1.40 | 1.34 | 1.25 | 1.21 | ||||||||||
Expenses after expense reductions (f) | 1.10 | 1.15 | 1.09 | 1.00 | 1.01 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.85 | 0.89 | 0.92 | 0.89 | 0.93 | ||||||||||
Net investment income | 4.33 | 4.41 | (z) | 4.16 | 4.35 | 4.33 | |||||||||
Portfolio turnover | 14 | 13 | 7 | 14 | 17 | ||||||||||
Net assets at end of period (000 Omitted) | $124,948 | $129,974 | $134,416 | $134,459 | $140,599 |
See Notes to Financial Statements
72
Table of Contents
Financial Highlights – continued
MFS® WEST VIRGINIA MUNICIPAL BOND FUND – continued
Years ended 3/31 | |||||||||||||||
Class B | 2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||
Net asset value, beginning of period | $11.44 | $11.46 | $11.58 | $11.82 | $11.76 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.42 | $0.43 | (z) | $0.41 | $0.43 | $0.43 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.44 | ) | 0.01 | (z) | (0.13 | ) | (0.24 | ) | 0.06 | ||||||
Total from investment operations | $(0.02 | ) | $0.44 | $0.28 | $0.19 | $0.49 | |||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.40 | ) | $(0.39 | ) | $(0.40 | ) | $(0.43 | ) | $(0.43 | ) | |||||
From net realized gain on investments | (0.01 | ) | (0.07 | ) | — | — | — | ||||||||
Total distributions declared to shareholders | $(0.41 | ) | $(0.46 | ) | $(0.40 | ) | $(0.43 | ) | $(0.43 | ) | |||||
Net asset value, end of period | $11.01 | $11.44 | $11.46 | $11.58 | $11.82 | ||||||||||
Total return (%) (r)(s)(t) | (0.21 | ) | 3.92 | 2.45 | 1.62 | 4.25 | |||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 2.00 | 2.06 | 1.99 | 1.90 | 1.86 | ||||||||||
Expenses after expense reductions (f) | 1.75 | 1.80 | 1.74 | 1.65 | 1.66 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.50 | 1.55 | 1.57 | 1.54 | 1.58 | ||||||||||
Net investment income | 3.69 | 3.76 | (z) | 3.51 | 3.71 | 3.68 | |||||||||
Portfolio turnover | 14 | 13 | 7 | 14 | 17 | ||||||||||
Net assets at end of period (000 Omitted) | $8,096 | $10,087 | $12,388 | $14,334 | $17,744 |
Any redemption fees charged by the fund during the 2005 fiscal year resulted in a per share impact of less than $0.01.
(d) | Per share data are based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities that resulted in an increase of $0.03 per share to net investment income, a decrease of $0.03 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.25% to the net investment income ratio of each class for the year ended March 31, 2007. The change in estimate had no impact on net assets, net asset value per share or total return of each class. |
See Notes to Financial Statements
73
Table of Contents
(1) | Business and Organization |
MFS Mississippi Municipal Bond Fund (Mississippi Fund), MFS New York Municipal Bond Fund (New York Fund), MFS North Carolina Municipal Bond Fund (North Carolina Fund), MFS Pennsylvania Municipal Bond Fund (Pennsylvania Fund), MFS South Carolina Municipal Bond Fund (South Carolina Fund), MFS Tennessee Municipal Bond Fund (Tennessee Fund), MFS Virginia Municipal Bond Fund (Virginia Fund), and MFS West Virginia Municipal Bond Fund (West Virginia Fund) are each a series of MFS Municipal Series Trust, which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.
(2) | Significant Accounting Policies |
General – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Because each fund invests primarily in the securities of a single state and its political subdivisions, each fund is vulnerable to the effects of changes in the legal and economic environment of the particular state. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the discontinuance of the taxation supporting the projects or assets or the inability to collect revenues for the project or from the assets. If the Internal Revenue Service determines an issuer of a municipal security has not complied with applicable tax requirements, the security could decline in value, interest from the security could become taxable and each fund may be required to issue Forms 1099-DIV.
Investment Valuations – Debt instruments and floating rate loans (other than short-term instruments), including restricted debt instruments, are generally valued at an evaluated or composite bid as reported by an independent pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price as reported by an independent pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as reported by an independent pricing service on the market on which such futures contracts are primarily traded. Swaps are generally valued at an evaluated bid as reported by an independent pricing service. Securities and other assets generally valued on the basis of information from an independent pricing service may also be valued at a broker-dealer bid quotation. Values obtained from pricing services can utilize both dealer-supplied valuations and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data.
The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of each fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under each fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from independent pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of each fund’s net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. The adviser may rely on independent pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating each fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of investments used to determine each fund’s net asset value may differ from quoted or published prices for the same investments.
In September 2006, FASB Statement No. 157, Fair Value Measurements (the “Statement”) was issued, and is effective for fiscal years beginning after November 15, 2007 and for all interim periods within those fiscal years. This Statement provides a single definition of fair value, a hierarchy for measuring fair value and expanded disclosures about fair value measurements. Management is evaluating the application of the Statement to each fund, and believes the impact will be limited to expanded disclosures resulting from the adoption of this Statement in each fund’s financial statements.
74
Table of Contents
Notes to Financial Statements – continued
Derivative Risk – Each fund may invest in derivatives for hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. When each fund uses derivatives as an investment to gain market exposure, or for hedging purposes, gains and losses from derivative instruments may be substantially greater than the derivative’s original cost. Cash that has been segregated on behalf of certain derivative contracts will be reported separately on the Statement of Assets and Liabilities as restricted cash. Derivative instruments include futures contracts and swap agreements.
Futures Contracts – Each fund may enter into futures contracts for the delayed delivery of securities or currency, or contracts based on financial indices at a fixed price on a future date. In entering such contracts, each fund is required to deposit with the broker either in cash or securities an amount equal to a certain percentage of the contract amount. Subsequent payments are made or received by each fund each day, depending on the daily fluctuations in the value of the contract, and are recorded for financial statement purposes as unrealized gains or losses by each fund. Upon entering into such contracts, each fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, each fund may not achieve the anticipated benefits of the futures contracts and may realize a loss.
Swap Agreements – Each fund may enter into swap agreements. A swap is an exchange of cash payments between each fund and another party. Net cash payments are exchanged at specified intervals and are recorded as a realized gain or loss in the Statement of Operations. The value of the swap is adjusted daily and the change in value, including accruals of periodic amounts of interest to be paid or received, is recorded as unrealized appreciation or depreciation in the Statement of Operations. Amounts paid or received at the inception of the swap are reflected as premiums paid or received on the Statement of Assets and Liabilities and are amortized using the effective interest method over the term of the agreement. A liquidation payment received or made upon early termination is recorded as a realized gain or loss in the Statement of Operations. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with each fund’s custodian in connection with these agreements. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. These risks include the possible lack of a liquid market, failure of the counterparty to perform under the terms of the agreements, and unfavorable market and interest rate movements of the underlying instrument. All swap agreements entered into by each fund with the same counterparty are generally governed by a single master agreement, which provides for the netting of all amounts owed by the parties under the agreement upon the occurrence of an event of default, thereby reducing the credit risk to which such party is exposed. Certain funds hold interest rate swap agreements which involve the periodic exchange of cash flows, such as the exchange of fixed rate interest payments for floating rate interest payments based on a notional principal amount. The interest rates may be based on a specific financial index or the exchange of two distinct floating rate payments. Each fund may enter into an interest rate swap in order to manage its exposure to interest rate fluctuations.
Inverse Floaters – The funds may invest in municipal inverse floating rate securities which are structured by the issuer (known as primary market inverse floating rate securities) or by an investment banker utilizing municipal bonds which have already been issued (known as secondary market inverse floating rate securities) to have variable rates of interest which typically move in the opposite direction of short term interest rates. A secondary market inverse floating rate security is created when an investment banker transfers a fixed rate municipal bond to a special purpose trust, and causes the trust to (a) issue floating rate certificates to third parties, in an amount equal to a fraction of the par amount of the deposited bonds (these certificates usually pay tax-exempt interest at short-term interest rates that typically reset weekly; and the certificate holders typically, on seven days notice, have the option to tender their certificates to the investment banker or another party for redemption at par plus accrued interest), and (b) issue inverse floating rate certificates (sometimes referred to as “inverse floaters”). If the holder of the inverse floater transfers the municipal bonds to an investment banker for the purpose of depositing the municipal bonds into the special purpose trust, the inverse floating rate certificates that are issued by the trust are referred to as “self-deposited inverse floaters.” If the bonds held by the trust are purchased by the investment banker for deposit into the trust from someone other than the purchasers of the inverse floaters, the inverse floating rate certificates that are issued by the trust are referred to as “externally deposited inverse floaters.” Such self-deposited inverse floaters held by the funds are accounted for as secured borrowings, with the municipal bonds reflected in the investments of the funds and amounts owed to the holder of the floating rate certificate under the provisions of the trust, which amounts are paid solely from the assets of the trust, reflected as liabilities of the funds in the Statement of Assets and Liabilities under the caption, “Payable to the holder of the floating rate certificate from trust assets”. At March 31, 2008, each fund’s payable to the holder of the floating rate certificate from trust assets, the weighted average interest rate on the floating rate certificates issued by the
75
Table of Contents
Notes to Financial Statements – continued
trust, and the interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets in connection with self-deposited inverse floater transactions were as follows:
Payable to the holder trust assets | Weighted average interest rate on floating rate certificates issued by the trust | Interest expense and fees in connection with self-deposited inverse floaters | ||||
Fund | ||||||
Mississippi Fund | $1,255,405 | 2.59% | $185,690 | |||
New York Fund | 5,030,650 | 2.42% | 372,280 | |||
North Carolina Fund | 14,946,545 | 3.32% | 817,140 | |||
Pennsylvania Fund | 1,447,235 | 3.63% | 211,410 | |||
South Carolina Fund | 7,300,555 | 2.62% | 326,856 | |||
Virginia Fund | 14,695,014 | 2.95% | 578,710 | |||
West Virginia Fund | 903,582 | 2.57% | 337,494 |
Primary and externally deposited inverse floaters held by each fund are not accounted for as secured borrowings.
In March 2008, FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities (the “Standard”) was issued, and is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. This Standard provides enhanced disclosures about the funds’ use of and accounting for derivative instruments and the effect of derivative instruments on the funds’ results of operations and financial position. Management is evaluating the application of the Standard to the funds, and has not at this time determined the impact, if any, resulting from the adoption of this Standard on the funds’ financial statements.
Indemnifications – Under each fund’s organizational documents, its officers and trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to each fund. Additionally, in the normal course of business, each fund enters into agreements with service providers that may contain indemnification clauses. Each fund’s maximum exposure under these agreements is unknown as this would involve future claims that may be made against each fund that have not yet occurred.
Investment Transactions and Income – Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. All premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles.
Each fund may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statement of Operations in realized gain/loss if the security has been disposed of by each fund or in unrealized gain/loss if the security is still held by each fund. Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statement of Operations.
Legal fees and other related expenses incurred to preserve and protect the value of a security owned are added to the cost of the security; other legal fees are expensed. Capital infusions made directly to the security issuer, which are generally non-recurring, incurred to protect or enhance the value of high-yield debt securities, are reported as additions to the cost basis of the security. Costs that are incurred to negotiate the terms or conditions of capital infusions or that are expected to result in a plan of reorganization are reported as realized losses. Ongoing costs incurred to protect or enhance an investment, or costs incurred to pursue other claims or legal actions, are expensed.
Fees Paid Indirectly – Each fund’s custody fee may be reduced according to an arrangement that measures the value of cash deposited with the custodian by each fund. This amount, for the year ended March 31, 2008, is shown as a reduction of total expenses on the Statement of Operations.
Tax Matters and Distributions – Each fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable and tax-exempt income, including realized capital gains. As a result, no provision for federal income tax is required. Each fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“the Interpretation”) on the first day of each fund’s fiscal year. The Interpretation prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There was no impact resulting from the adoption of this Interpretation on each fund’s financial statements. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. It is each fund’s policy to record interest and penalty charges on underpaid taxes associated with its tax positions as interest expense and miscellaneous expense, respectively. No such charges were recorded in the current financial statements.
76
Table of Contents
Notes to Financial Statements – continued
Distributions to shareholders are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These adjustments have no impact on net assets or net asset value per share. Temporary differences which arise from recognizing certain items of income, expense, gain or loss in different periods for financial statement and tax purposes will reverse at some time in the future. Distributions in excess of net investment income or net realized gains are temporary overdistributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes.
Book/tax differences primarily relate to amortization and accretion of debt securities and secured borrowings.
The tax character of distributions declared to shareholders is as follows:
Year ended 3/31/08 | Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||
Ordinary income (including any short-term capital gains) | $— | $428,910 | $125,085 | $384 | $ — | $424,230 | $299,592 | $70,146 | ||||||||
Tax-exempt income | 3,735,946 | 6,650,742 | 12,667,723 | 4,275,697 | 6,321,006 | 4,350,633 | 11,998,208 | 5,569,466 | ||||||||
Long-term capital gain | — | 324,596 | 852,704 | 27,487 | — | 85,905 | 467,613 | 94,967 | ||||||||
Total distributions | $3,735,946 | $7,404,248 | $13,645,512 | $4,303,568 | $6,321,006 | $4,860,768 | $12,765,413 | $5,734,579 | ||||||||
Year ended 3/31/07 | Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||
Ordinary income (including any short-term capital gains) | $— | $104,521 | $346,482 | $— | $— | $— | $— | $— | ||||||||
Tax-exempt income | 3,631,591 | 6,685,340 | 13,384,867 | 4,238,983 | 6,317,237 | 4,576,148 | 12,629,190 | 5,754,974 | ||||||||
Long-term capital gain | 649,124 | 468,510 | 50,469 | 76,004 | 885,826 | |||||||||||
Total distributions | $3,631,591 | $7,438,985 | $14,199,859 | $4,238,983 | $6,317,237 | $4,626,617 | $12,705,194 | $6,640,800 |
The federal tax cost and the tax basis components of distributable earnings were as follows:
As of 3/31/08 | Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||||||||||
Cost of investments | $86,066,544 | $161,561,553 | $296,002,331 | $104,217,312 | $141,643,139 | $103,952,772 | $272,334,657 | $128,551,767 | ||||||||||||||||
Gross appreciation | $2,972,364 | $6,897,755 | $11,480,481 | $3,396,343 | $5,614,242 | $3,743,103 | $9,689,755 | $2,655,369 | ||||||||||||||||
Gross depreciation | (1,461,929 | ) | (2,263,036 | ) | (6,195,353 | ) | (2,041,426 | ) | (2,844,480 | ) | (2,694,697 | ) | (5,935,120 | ) | (2,884,481 | ) | ||||||||
Net unrealized appreciation (depreciation) | $1,510,435 | $4,634,719 | $5,285,128 | $1,354,917 | $2,769,762 | $1,048,406 | $3,754,635 | $(229,112 | ) | |||||||||||||||
Undistributed ordinary income | — | 381,535 | 149,941 | — | — | 338,203 | 581,396 | 20,384 | ||||||||||||||||
Undistributed tax-exempt income | 319,552 | 472,747 | 1,292,981 | 381,509 | 580,268 | 815,575 | 624,007 | 431,670 | ||||||||||||||||
Undistributed long-term capital gain | — | 450,132 | 1,146,971 | — | 106,201 | 138,081 | 61,164 | 1,228,290 | ||||||||||||||||
Capital loss carryforwards | (141,925 | ) | — | — | (17,684 | ) | — | — | — | — | ||||||||||||||
Post-October capital loss deferral | (2,850 | ) | — | — | (407,535 | ) | — | (50,540 | ) | — | — | |||||||||||||
Other temporary differences | (274,861 | ) | (3,696 | ) | 73,226 | (424,529 | ) | (320,458 | ) | (346,636 | ) | (885,716 | ) | 803,392 |
As of March 31, 2008, certain funds had capital loss carryforwards available to offset future realized gains. Such losses expire as follows:
Expiration Date | Mississippi Fund | Pennsylvania Fund | ||||
3/31/13 | $(112,248 | ) | $— | |||
3/31/14 | (29,677 | ) | — | |||
3/31/16 | — | (17,684 | ) | |||
Total | $(141,925 | ) | $(17,684 | ) |
Multiple Classes of Shares of Beneficial Interest – Each fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of each fund based on the value of settled shares outstanding of each class, without distinction between share classes. Dividends are declared separately for each class. Differences in per share dividend rates are generally due to differences in separate class expenses. Class B shares will convert to Class A shares approximately eight years after purchase.
77
Table of Contents
Notes to Financial Statements – continued
(3) | Transactions with Affiliates |
Investment Adviser – Each fund has an investment advisory agreement with Massachusetts Financial Services Company (MFS) to provide overall investment management and related administrative services and facilities to each fund. The management fee is computed daily and paid monthly at an annual rate of 0.55% of each fund’s average daily net assets. As part of a settlement agreement with the New York Attorney General concerning market timing and related matters, MFS has agreed to reduce the management fee to 0.30% of each fund’s average daily net assets for the period March 1, 2004 through February 28, 2009. For the year ended March 31, 2008, this waiver amounted to the following for each fund and is reflected as a reduction of total expenses in the Statement of Operations.
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
$213,859 | $400,676 | $793,193 | $268,787 | $379,214 | $272,643 | $714,830 | $340,425 |
The management fee incurred for the year ended March 31, 2008 was equivalent to an annual effective rate of 0.30% of each fund’s average daily net assets.
For the Pennsylvania Fund, the investment adviser has agreed in writing to pay a portion of the funds operating expenses exclusive of management, distribution and service, and certain other fees and expenses, such that operating expenses do not exceed 0.20% annually of the fund’s average daily net assets. This written agreement will continue through July 31, 2008, unless changed or rescinded by the Board of Trustees. For the year ended March 31, 2008 this reduction amounted to $64,269 and is reflected as a reduction of total expenses in the Statement of Operations.
Distributor – MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received the following for the year ended March 31, 2008, as its portion of the initial sales charge on sales of Class A shares of each fund.
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
$36,428 | $33,356 | $40,546 | $35,474 | $33,121 | $22,362 | $36,861 | $27,046 |
The Board of Trustees has adopted a distribution plan for certain class shares pursuant to Rule 12b-1 of the Investment Company Act of 1940.
Each fund’s distribution plan provides that each fund will pay MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.
Distribution Plan Fee Table:
CLASS A | ||||||||||
Distribution Fee Rate | Service Fee Rate | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
Mississippi Fund | 0.10% | 0.25% | 0.35% | — | $— | |||||
New York Fund | 0.10% | 0.25% | 0.35% | 0.25% | 302,043 | |||||
North Carolina Fund | 0.10% | 0.25% | 0.35% | 0.35% | 917,945 | |||||
Pennsylvania Fund | 0.10% | 0.25% | 0.35% | 0.10% | 76,111 | |||||
South Carolina Fund | 0.10% | 0.25% | 0.35% | 0.35% | 467,606 | |||||
Tennessee Fund | 0.10% | 0.25% | 0.35% | 0.35% | 343,084 | |||||
Virginia Fund | 0.10% | 0.25% | 0.35% | 0.35% | 917,148 | |||||
West Virginia Fund | 0.10% | 0.25% | 0.35% | 0.35% | 444,431 | |||||
CLASS B | ||||||||||
Distribution Fee Rate | Service Fee Rate | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
Mississippi Fund | 0.75% | 0.25% | 1.00% | 0.77% | $65,955 | |||||
New York Fund | 0.75% | 0.25% | 1.00% | 1.00% | 225,872 | |||||
North Carolina Fund | 0.75% | 0.25% | 1.00% | 1.00% | 236,869 | |||||
Pennsylvania Fund | 0.75% | 0.25% | 1.00% | 0.86% | 268,875 | |||||
South Carolina Fund | 0.75% | 0.25% | 1.00% | 1.00% | 180,835 | |||||
Tennessee Fund | 0.75% | 0.25% | 1.00% | 1.00% | 110,330 | |||||
Virginia Fund | 0.75% | 0.25% | 1.00% | 1.00% | 108,855 | |||||
West Virginia Fund | 0.75% | 0.25% | 1.00% | 1.00% | 91,893 |
78
Table of Contents
Notes to Financial Statements – continued
CLASS C | ||||||||||
Distribution Fee Rate | Service Fee Rate | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
New York Fund | 0.75% | 0.25% | 1.00% | 1.00% | $168,660 | |||||
North Carolina Fund | 0.75% | 0.25% | 1.00% | 1.00% | 313,197 | |||||
Virginia Fund | 0.75% | 0.25% | 1.00% | 1.00% | 130,035 |
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||||
Total Distribution and Service Fees | $65,955 | $696,575 | $1,468,011 | $344,986 | $648,441 | $453,414 | $1,156,038 | $536,324 |
(d) | In accordance with the distribution plan for certain classes, each fund pays distribution and/or service fees up to these annual percentage rates of each class’ average daily net assets. |
(e) | The annual effective rates represent actual fees incurred under the distribution plan for the year ended March 31, 2008 based on each class’ average daily net assets. Payment of the Mississippi Fund’s 0.25% annual Class A service fee and 0.10% annual Class A distribution fee is not yet in effect and will be implemented on such date as the fund’s Board of Trustees may determine. For one year from the date of sale of Class B shares of the Mississippi Fund, assets attributable to such Class B shares are subject to the 0.25% annual Class B service fee. On assets attributable to all other Class B shares of the Mississippi Fund, the service fee is not currently in effect, but may be implemented on such date as the fund’s Board of Trustees may determine. Payment of the New York Fund’s 0.10% annual Class A distribution fee is not yet in effect and will be implemented on such date as the fund’s Board of Trustees may determine. Payment of the Pennsylvania Fund’s 0.10% annual Class A distribution fee is not yet in effect and will be implemented on such date as the fund’s Board of Trustees may determine. 0.10% of the Class A service fee is currently being paid by the Pennsylvania Fund. Payment of the remaining 0.15% of the Pennsylvania Fund’s Class A service fee is not yet in effect and will be implemented on such date as the fund’s Board of Trustees may determine. For one year from the date of sale of Class B shares of the Pennsylvania Fund, assets attributable to such Class B shares are subject to the 0.25% annual Class B service fee. On assets attributable to all other Class B shares of the Pennsylvania Fund, 0.10% of the Class B service fee is currently in effect and the remaining portion of the Class B service fee is not in effect but may be implemented on such date as the fund’s Board of Trustees may determine. |
Certain Class A and Class C shares are subject to a contingent deferred sales charge in the event of a shareholder redemption within 12 months of purchase. Class B shares are subject to a contingent deferred sales charge in the event of a shareholder redemption within six years of purchase. All contingent deferred sales charges are paid to MFD and during the year ended March 31, 2008, were as follows:
CDSC imposed | Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | ||||||||
Class A | $— | $— | $9,677 | $500 | $15 | $— | $— | $— | ||||||||
Class B | 10,257 | 37,093 | 27,324 | 30,964 | 30,867 | 10,847 | 8,918 | 11,627 | ||||||||
Class C | N/A | 1,312 | 3,942 | N/A | N/A | N/A | 1,040 | N/A |
Shareholder Servicing Agent – MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from each fund for its services as shareholder servicing agent calculated as a percentage of the average daily net assets of each fund as determined periodically under the supervision of each fund’s Board of Trustees. For the year ended March 31, 2008, each fund paid MFSC the following fee, which equated to the following annual percentage of each fund’s average daily net assets and shareholder services.
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||||
Expenses paid | $32,527 | $64,396 | $125,254 | $45,228 | $59,189 | $42,177 | $112,922 | $52,544 | ||||||||
Percentage of average daily net assets | 0.0381% | 0.0403% | 0.0396% | 0.0422% | 0.0391% | 0.0388% | 0.0396% | 0.0387% |
MFSC also receives payment from each fund for out-of-pocket expenses, sub-accounting and other shareholder servicing costs which may be paid to affiliated and unaffiliated service providers. For the year ended March 31, 2008, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to the following. Each fund may also pay shareholder servicing costs directly to non-related parties.
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
$29,604 | $51,256 | $90,267 | $37,434 | $39,312 | $28,724 | $79,454 | $34,813 |
Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to each fund. Under an administrative services agreement, each fund partially reimburses MFS the costs incurred to provide these services. Each fund is charged a fixed amount plus a fee based on average daily net assets. Each fund’s annual fixed amount is $17,500.
79
Table of Contents
Notes to Financial Statements – continued
The administrative services fee incurred for the year ended March 31, 2008 was equivalent to the following annual effective rates of each fund’s average daily net assets:
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||||
Percentage of average daily net assets | 0.0268% | 0.0214% | 0.0183% | 0.0244% | 0.0218% | 0.0243% | 0.0187% | 0.0225% |
Trustees’ and Officers’ Compensation – Each fund pays compensation to independent trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. The funds do not pay compensation directly to trustees or officers of each fund who are also officers of the investment adviser, all of whom receive remuneration for their services to each fund from MFS. Certain officers and trustees of the fund are officers or directors of MFS, MFD, and MFSC.
Each fund has an unfunded, defined benefit plan for certain retired independent trustees which resulted in the following pension expense for the funds. These amounts are included in independent trustees’ compensation for the year ended March 31, 2008.
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
$688 | $781 | $1,542 | $699 | $1,515 | $735 | $1,536 | $1,511 |
The liability for deferred retirement benefits payable to certain retired independent trustees amounted to the following for each fund at March 31, 2008, and is included in payable for independent trustees’ compensation.
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
$8,089 | $10,462 | $13,230 | $8,000 | $13,193 | $10,412 | $13,251 | $13,188 |
Other – These funds and certain other MFS funds (the funds) have entered into a services agreement (the Agreement) which provides for payment of fees by the funds to Tarantino LLC in return for the provision of services of an Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an officer of the funds and the sole member of Tarantino LLC. The funds can terminate the Agreement with Tarantino LLC at any time under the terms of the Agreement. For the year ended March 31, 2008, the fee paid by the funds to Tarantino LLC amounted to the following:
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
$557 | $1,040 | $2,055 | $699 | $985 | $708 | $1,844 | $885 |
MFS has agreed to reimburse each fund for a portion of the payments made by the fund to Tarantino LLC in the following amounts, which are shown as a reduction of total expenses in the Statement of Operations. Additionally, MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO.
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||
$400 | $750 | $1,488 | $503 | $711 | $511 | $1,342 | $638 |
(4) | Portfolio Securities |
Purchases and sales of investments, other than U.S. government securities, purchased option transactions, and short-term obligations were as follows:
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||||
Purchases | $13,053,890 | $42,047,323 | $56,392,008 | $18,863,809 | $19,637,310 | $28,594,741 | $78,052,165 | $19,305,621 | ||||||||
Sales | $10,996,317 | $36,140,556 | $69,457,674 | $18,547,406 | $24,088,365 | $27,273,111 | $82,847,796 | $31,546,938 |
80
Table of Contents
Notes to Financial Statements – continued
(5) | Shares of Beneficial Interest |
Each fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest. Transactions in each fund’s shares were as follows:
Mississippi Municipal Bond Fund | ||||||||||||
Year ended 3/31/08 | Year ended 3/31/07 | |||||||||||
Shares | Amount | Shares | Amount | |||||||||
Shares sold | ||||||||||||
Class A | 1,428,055 | $13,861,790 | 663,986 | $6,491,928 | ||||||||
Class B | 50,077 | 485,249 | 46,864 | 458,803 | ||||||||
1,478,132 | $14,347,039 | 710,850 | $6,950,731 | |||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||
Class A | 207,805 | $2,009,167 | 193,423 | $1,891,276 | ||||||||
Class B | 16,964 | 164,330 | 19,122 | 187,141 | ||||||||
224,769 | $2,173,497 | 212,545 | $2,078,417 | |||||||||
Shares reacquired | ||||||||||||
Class A | (894,424 | ) | $(8,640,172 | ) | (925,165 | ) | $(9,025,658 | ) | ||||
Class B | (174,463 | ) | (1,691,914 | ) | (181,260 | ) | (1,774,943 | ) | ||||
(1,068,887 | ) | $(10,332,086 | ) | (1,106,425 | ) | $(10,800,601 | ) | |||||
Net change | ||||||||||||
Class A | 741,436 | $7,230,785 | (67,756 | ) | $(642,454 | ) | ||||||
Class B | (107,422 | ) | (1,042,335 | ) | (115,274 | ) | (1,128,999 | ) | ||||
634,014 | $6,188,450 | (183,030 | ) | $(1,771,453 | ) |
New York Municipal Bond Fund | ||||||||||||
Year ended 3/31/08 | Year ended 3/31/07 | |||||||||||
Shares | Amount | Shares | Amount | |||||||||
Shares sold | ||||||||||||
Class A | 1,938,189 | $21,279,035 | 1,133,622 | $12,597,179 | ||||||||
Class B | 74,565 | 819,051 | 86,951 | 964,688 | ||||||||
Class C | 549,644 | 6,060,788 | 126,256 | 1,407,588 | ||||||||
2,562,398 | $28,158,874 | 1,346,829 | $14,969,455 | |||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||
Class A | 307,996 | $3,391,111 | 307,695 | $3,437,943 | ||||||||
Class B | 55,486 | 609,255 | 64,570 | 718,927 | ||||||||
Class C | 39,785 | 437,289 | 35,669 | 397,818 | ||||||||
403,267 | $4,437,655 | 407,934 | $4,554,688 | |||||||||
Shares reacquired | ||||||||||||
Class A | (1,258,346 | ) | $(13,855,672 | ) | (1,418,323 | ) | $(15,814,182 | ) | ||||
Class B | (579,561 | ) | (6,360,968 | ) | (551,167 | ) | (6,130,622 | ) | ||||
Class C | (173,379 | ) | (1,904,832 | ) | (275,976 | ) | (3,068,367 | ) | ||||
(2,011,286 | ) | $(22,121,472 | ) | (2,245,466 | ) | $(25,013,171 | ) | |||||
Net change | ||||||||||||
Class A | 987,839 | $10,814,474 | 22,994 | $220,940 | ||||||||
Class B | (449,510 | ) | (4,932,662 | ) | (399,646 | ) | (4,447,007 | ) | ||||
Class C | 416,050 | 4,593,245 | (114,051 | ) | (1,262,961 | ) | ||||||
954,379 | $10,475,057 | (490,703 | ) | $(5,489,028 | ) |
81
Table of Contents
Notes to Financial Statements – continued
North Carolina Municipal Bond Fund | ||||||||||||
Year ended 3/31/08 | Year ended 3/31/07 | |||||||||||
Shares | Amount | Shares | Amount | |||||||||
Shares sold | ||||||||||||
Class A | 1,721,939 | $19,991,964 | 1,898,273 | $22,539,331 | ||||||||
Class B | 110,894 | 1,291,414 | 73,925 | 876,814 | ||||||||
Class C | 447,711 | 5,228,711 | 388,647 | 4,606,363 | ||||||||
2,280,544 | $26,512,089 | 2,360,845 | $28,022,508 | |||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||
Class A | 663,271 | $7,754,321 | 656,787 | $7,802,661 | ||||||||
Class B | 42,489 | 496,167 | 53,048 | 629,177 | ||||||||
Class C | 72,882 | 851,681 | 76,393 | 906,938 | ||||||||
778,642 | $9,102,169 | 786,228 | $9,338,776 | |||||||||
Shares reacquired | ||||||||||||
Class A | (2,446,335 | ) | $(28,572,804 | ) | (2,742,695 | ) | $(32,545,431 | ) | ||||
Class B | (507,261 | ) | (5,929,036 | ) | (643,462 | ) | (7,631,237 | ) | ||||
Class C | (610,694 | ) | (7,142,938 | ) | (388,669 | ) | (4,608,143 | ) | ||||
(3,564,290 | ) | $(41,644,778 | ) | (3,774,826 | ) | $(44,784,811 | ) | |||||
Net change | ||||||||||||
Class A | (61,125 | ) | $(826,519 | ) | (187,635 | ) | $(2,203,439 | ) | ||||
Class B | (353,878 | ) | (4,141,455 | ) | (516,489 | ) | (6,125,246 | ) | ||||
Class C | (90,101 | ) | (1,062,546 | ) | 76,371 | 905,158 | ||||||
(505,104 | ) | $(6,030,520 | ) | (627,753 | ) | $(7,423,527 | ) | |||||
Pennsylvania Municipal Bond Fund | ||||||||||||
Year ended 3/31/08 | Year ended 3/31/07 | |||||||||||
Shares | Amount | Shares | Amount | |||||||||
Shares sold | ||||||||||||
Class A | 1,624,697 | $16,384,665 | 1,220,775 | $12,466,087 | ||||||||
Class B | 129,987 | 1,316,228 | 123,402 | 1,261,103 | ||||||||
1,754,684 | $17,700,893 | 1,344,177 | $13,727,190 | |||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||
Class A | 202,392 | $2,041,995 | 181,751 | $1,854,890 | ||||||||
Class B | 69,367 | 701,914 | 76,588 | 783,496 | ||||||||
271,759 | $2,743,909 | 258,339 | $2,638,386 | |||||||||
Shares reacquired | ||||||||||||
Class A | (1,172,694 | ) | $(11,822,576 | ) | (1,329,719 | ) | $(13,551,451 | ) | ||||
Class B | (590,904 | ) | (5,963,612 | ) | (700,221 | ) | (7,159,663 | ) | ||||
(1,763,598 | ) | $(17,786,188 | ) | (2,029,940 | ) | $(20,711,114 | ) | |||||
Net change | ||||||||||||
Class A | 654,395 | $6,604,084 | 72,807 | $769,526 | ||||||||
Class B | (391,550 | ) | (3,945,470 | ) | (500,231 | ) | (5,115,064 | ) | ||||
262,845 | $2,658,614 | (427,424 | ) | $(4,345,538 | ) |
82
Table of Contents
Notes to Financial Statements – continued
South Carolina Municipal Bond Fund | ||||||||||||
Year ended 3/31/08 | Year ended 3/31/07 | |||||||||||
Shares | Amount | Shares | Amount | |||||||||
Shares sold | ||||||||||||
Class A | 1,312,186 | $15,766,440 | 1,237,791 | $15,208,672 | ||||||||
Class B | 36,660 | 442,057 | 61,731 | 755,885 | ||||||||
1,348,846 | $16,208,497 | 1,299,522 | $15,964,557 | |||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||
Class A | 308,088 | $3,728,124 | 307,423 | $3,777,261 | ||||||||
Class B | 36,730 | 444,432 | 44,911 | 551,237 | ||||||||
344,818 | $4,172,556 | 352,334 | $4,328,498 | |||||||||
Shares reacquired | ||||||||||||
Class A | (1,318,977 | ) | $(15,981,425 | ) | (1,208,409 | ) | $(14,841,104 | ) | ||||
Class B | (447,922 | ) | (5,412,035 | ) | (564,676 | ) | (6,922,293 | ) | ||||
(1,766,899 | ) | $(21,393,460 | ) | (1,773,085 | ) | $(21,763,397 | ) | |||||
Net change | ||||||||||||
Class A | 301,297 | $3,513,139 | 336,805 | $4,144,829 | ||||||||
Class B | (374,532 | ) | (4,525,546 | ) | (458,034 | ) | (5,615,171 | ) | ||||
(73,235 | ) | $(1,012,407 | ) | (121,229 | ) | $(1,470,342 | ) | |||||
Tennessee Municipal Bond Fund | ||||||||||||
Year ended 3/31/08 | Year ended 3/31/07 | |||||||||||
Shares | Amount | Shares | Amount | |||||||||
Shares sold | ||||||||||||
Class A | 1,314,620 | $13,696,524 | 1,107,252 | $11,714,106 | ||||||||
Class B | 45,319 | 469,407 | 21,584 | 228,692 | ||||||||
1,359,939 | $14,165,931 | 1,128,836 | $11,942,798 | |||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||
Class A | 220,085 | $2,299,836 | 204,944 | $2,169,008 | ||||||||
Class B | 24,854 | 259,625 | 29,765 | 314,601 | ||||||||
244,939 | $2,559,461 | 234,709 | $2,483,609 | |||||||||
Shares reacquired | ||||||||||||
Class A | (1,062,121 | ) | $(11,100,219 | ) | (1,284,714 | ) | $(13,567,118 | ) | ||||
Class B | (317,669 | ) | (3,324,533 | ) | (460,389 | ) | (4,866,746 | ) | ||||
(1,379,790 | ) | $(14,424,752 | ) | (1,745,103 | ) | $(18,433,864 | ) | |||||
Net change | ||||||||||||
Class A | 472,584 | $4,896,141 | 27,482 | $315,996 | ||||||||
Class B | (247,496 | ) | (2,595,501 | ) | (409,040 | ) | (4,323,453 | ) | ||||
225,088 | $2,300,640 | (381,558 | ) | $(4,007,457 | ) |
83
Table of Contents
Notes to Financial Statements – continued
Virginia Municipal Bond Fund | ||||||||||||
Year ended 3/31/08 | Year ended 3/31/07 | |||||||||||
Shares | Amount | Shares | Amount | |||||||||
Shares sold | ||||||||||||
Class A | 1,688,156 | $19,000,975 | 1,287,431 | $14,716,384 | ||||||||
Class B | 69,039 | 778,407 | 49,323 | 563,135 | ||||||||
Class C | 386,974 | 4,362,861 | 132,391 | 1,510,841 | ||||||||
2,144,169 | $24,142,243 | 1,469,145 | $16,790,360 | |||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||
Class A | 637,562 | $7,188,256 | 603,956 | $6,905,165 | ||||||||
Class B | 22,710 | 256,018 | 27,108 | 309,555 | ||||||||
Class C | 28,221 | 318,006 | 27,058 | 309,239 | ||||||||
688,493 | $7,762,280 | 658,122 | $7,523,959 | |||||||||
Shares reacquired | ||||||||||||
Class A | (2,627,933 | ) | $(29,642,471 | ) | (2,681,174 | ) | $(30,616,172 | ) | ||||
Class B | (291,100 | ) | (3,282,430 | ) | (458,840 | ) | (5,235,603 | ) | ||||
Class C | (132,842 | ) | (1,501,846 | ) | (215,473 | ) | (2,458,382 | ) | ||||
(3,051,875 | ) | $(34,426,747 | ) | (3,355,487 | ) | $(38,310,157 | ) | |||||
Net change | ||||||||||||
Class A | (302,215 | ) | $(3,453,240 | ) | (789,787 | ) | $(8,994,623 | ) | ||||
Class B | (199,351 | ) | (2,248,005 | ) | (382,409 | ) | (4,362,913 | ) | ||||
Class C | 282,353 | 3,179,021 | (56,024 | ) | (638,302 | ) | ||||||
(219,213 | ) | $(2,522,224 | ) | (1,228,220 | ) | $(13,995,838 | ) | |||||
West Virginia Municipal Bond Fund | ||||||||||||
Year ended 3/31/08 | Year ended 3/31/07 | |||||||||||
Shares | Amount | Shares | Amount | |||||||||
Shares sold | ||||||||||||
Class A | 673,711 | $7,556,954 | 652,133 | $7,488,745 | ||||||||
Class B | 39,137 | 441,404 | 35,587 | 409,605 | ||||||||
712,848 | $7,998,358 | 687,720 | $7,898,350 | |||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||
Class A | 319,968 | $3,605,557 | 372,205 | $4,278,867 | ||||||||
Class B | 17,364 | 195,621 | 24,063 | 276,549 | ||||||||
337,332 | $3,801,178 | 396,268 | $4,555,416 | |||||||||
Shares reacquired | ||||||||||||
Class A | (1,000,725 | ) | $(11,286,514 | ) | (1,390,871 | ) | $(15,981,170 | ) | ||||
Class B | (202,518 | ) | (2,276,916 | ) | (258,739 | ) | (2,971,281 | ) | ||||
(1,203,243 | ) | $(13,563,430 | ) | (1,649,610 | ) | $(18,952,451 | ) | |||||
Net change | ||||||||||||
Class A | (7,046 | ) | $(124,003 | ) | (366,533 | ) | $(4,213,558 | ) | ||||
Class B | (146,017 | ) | (1,639,891 | ) | (199,089 | ) | (2,285,127 | ) | ||||
(153,063 | ) | $(1,763,894 | ) | (565,622 | ) | $(6,498,685 | ) |
84
Table of Contents
Notes to Financial Statements – continued
(6) | Line of Credit |
Each fund and other funds managed by MFS participate in a $1 billion unsecured committed line of credit provided by a syndication of banks under a credit agreement. In addition, these funds and other funds managed by MFS have established uncommitted borrowing arrangements with certain banks. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the Federal Reserve funds rate plus 0.30%. In addition, a commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds at the end of each calendar quarter. For the year ended March 31, 2008, each fund’s commitment fee and interest expense on the line of credit were as follows, and are included in miscellaneous expense on the Statement of Operations.
Mississippi Fund | New York Fund | North Carolina Fund | Pennsylvania Fund | South Carolina Fund | Tennessee Fund | Virginia Fund | West Virginia Fund | |||||||||
Commitment Fee | $291 | $522 | $1,106 | $362 | $532 | $363 | $962 | $448 | ||||||||
Interest Expense | — | — | — | — | — | — | — | — |
85
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and the Shareholders of MFS Municipal Series Trust:
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of MFS Mississippi Municipal Bond Fund, MFS New York Municipal Bond Fund, MFS North Carolina Municipal Bond Fund, MFS Pennsylvania Municipal Bond Fund, MFS South Carolina Municipal Bond Fund, MFS Tennessee Municipal Bond Fund, MFS Virginia Municipal Bond Fund and MFS West Virginia Municipal Bond Fund, certain of the portfolios constituting MFS Municipal Series Trust (the “Trust”) as of March 31, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2008, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the aforementioned portfolios of MFS Municipal Series Trust as of March 31, 2008, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 15, 2008
86
Table of Contents
TRUSTEES AND OFFICERS — IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust, as of May 1, 2008, are listed below, together with their principal occupations during the past five years. (Their titles may have varied during that period.) The address of each Trustee and officer is 500 Boylston Street, Boston, Massachusetts 02116.
Name, Date of Birth | Position(s) Held | Trustee/Officer Since(h) | Principal Occupations During the Past Five Years & | |||
INTERESTED TRUSTEES | ||||||
Robert J. Manning(k) (born 10/20/63) | Trustee | February 2004 | Massachusetts Financial Services Company, Chief Executive Officer, President, Chief Investment Officer and Director | |||
Robert C. Pozen(k) (born 8/08/46) | Trustee | February 2004 | Massachusetts Financial Services Company, Chairman (since February 2004); Harvard Business School (education), Senior Lecturer (since 2008); Secretary of Economic Affairs, The Commonwealth of Massachusetts (January 2002 to December 2002); Fidelity Investments, Vice Chairman (June 2000 to December 2001); Fidelity Management & Research Company (investment adviser), President (March 1997 to July 2001); Bell Canada Enterprises (telecommunications), Director; Medtronic, Inc. (medical technology), Director; Telesat (satellite communications), Director (until 2007) | |||
INDEPENDENT TRUSTEES | ||||||
J. Atwood Ives (born 5/01/36) | Trustee and Chair of Trustees | February 1992 | Private investor; KeySpan Corporation (energy related services), Director until 2004; Woodstock Corporation (investment advisory firm), Director until 2003 | |||
Robert E. Butler(n) (born 11/29/41) | Trustee | January 2006 | Consultant – regulatory and compliance matters (since July 2002); PricewaterhouseCoopers LLP (professional services firm), Partner (until 2002) | |||
Lawrence H. Cohn, M.D. (born 3/11/37) | Trustee | August 1993 | Brigham and Women’s Hospital, Chief of Cardiac Surgery (2005); Harvard Medical School, Professor of Cardiac Surgery; Physician Director of Medical Device Technology for Partners HealthCare | |||
David H. Gunning (born 5/30/42) | Trustee | January 2004 | Retired; Cleveland-Cliffs Inc. (mining products and service provider), Vice Chairman/Director (until May 2007); Portman Limited (mining), Director (since 2005); Encinitos Ventures (private investment company), Principal (1997 to April 2001); Lincoln Electric Holdings, Inc. (welding equipment manufacturer), Director | |||
William R. Gutow (born 9/27/41) | Trustee | December 1993 | Private investor and real estate consultant (since 1998); Capital Entertainment Management Company (video franchise), Vice Chairman (since 1998); Texas Donuts (donut franchise), Vice Chairman (since 2007); Atlantic Coast Tan (tanning salons), Vice Chairman (until 2007) | |||
Michael Hegarty (born 12/21/44) | Trustee | December 2004 | Retired; AXA Financial (financial services and insurance), Vice Chairman and Chief Operating Officer (until May 2001); The Equitable Life Assurance Society (insurance), President and Chief Operating Officer (until May 2001) | |||
Lawrence T. Perera (born 6/23/35) | Trustee | July 1981 | Hemenway & Barnes (attorneys), Partner | |||
J. Dale Sherratt (born 9/23/38) | Trustee | August 1993 | Insight Resources, Inc. (acquisition planning specialists), President; Wellfleet Investments (investor in health care companies), Managing General Partner (since 1993); Cambridge Nutraceuticals (professional nutritional products), Chief Executive Officer (until May 2001) | |||
Laurie J. Thomsen (born 8/05/57) | Trustee | March 2005 | New Profit, Inc. (venture philanthropy), Partner (since 2006); Private investor; Prism Venture Partners (venture capital), Co-founder and General Partner (until June 2004); The Travelers Companies (commercial property liability insurance), Director | |||
Robert W. Uek (born 5/18/41) | Trustee | January 2006 | Retired (since 1999); PricewaterhouseCoopers LLP (professional services firm), Partner (until 1999); Consultant to investment company industry (since 2000); TT International Funds (mutual fund complex), Trustee (2000 until 2005); Hillview Investment Trust II Funds (mutual fund complex), Trustee (2000 until 2005) | |||
OFFICERS | ||||||
Robert J. Manning(k) (born 10/20/63) | President | March 2008 | Massachusetts Financial Services Company, Chief Executive Officer, President, Chief Investment Officer and Director | |||
Maria F. Dwyer(k) (born 12/01/58) | Treasurer | March 2008 | Massachusetts Financial Services Company, Executive Vice President and Chief Regulatory Officer (since March 2004) Chief Compliance Officer (since December 2006); Fidelity Management & Research Company, Vice President (prior to March 2004); Fidelity Group of Funds, President and Treasurer (prior to March 2004); MFS Group of Funds, President (November 2005 – March 2008) | |||
Christopher R. Bohane(k) (born 1/18/74) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since April 2003); Kirkpatrick & Lockhart LLP (law firm), Associate (prior to April 2003) |
87
Table of Contents
Trustees and Officers – continued
Name, Date of Birth | Position(s) Held | Trustee/Officer Since(h) | Principal Occupations During the Past Five Years & | |||
Ethan D. Corey(k) (born 11/21/63) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since April 2006); Special Counsel (prior to April 2006); Dechert LLP (law firm), Counsel (prior to December 2004) | |||
David L. DiLorenzo(k) (born 8/10/68) | Assistant Treasurer | July 2005 | Massachusetts Financial Services Company, Vice President (since June 2005); JP Morgan Investor Services, Vice President (prior to June 2005) | |||
Timothy M. Fagan(k) (born 7/10/68) | Assistant Secretary and Assistant Clerk | September 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since September 2005); John Hancock Advisers, LLC, Vice President and Chief Compliance Officer (September 2004 to August 2005), Senior Attorney (prior to September 2004); John Hancock Group of Funds, Vice President and Chief Compliance Officer (September 2004 to December 2004) | |||
Mark D. Fischer(k) (born 10/27/70) | Assistant Treasurer | July 2005 | Massachusetts Financial Services Company, Vice President (since May 2005); JP Morgan Investment Management Company, Vice President (prior to May 2005) | |||
Brian E. Langenfeld(k) (born 3/07/73) | Assistant Secretary and Assistant Clerk | June 2006 | Massachusetts Financial Services Company, Assistant Vice President and Counsel (since May 2006); John Hancock Advisers, LLC, Assistant Vice President and Counsel (May 2005 to April 2006); John Hancock Advisers, LLC, Attorney and Assistant Secretary (prior to May 2005) | |||
Ellen Moynihan(k) (born 11/13/57) | Assistant Treasurer | April 1997 | Massachusetts Financial Services Company, Senior Vice President | |||
Susan S. Newton(k) (born 3/07/50) | Assistant Secretary and Assistant Clerk | May 2005 | Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since April 2005); John Hancock Advisers, LLC, Senior Vice President, Secretary and Chief Legal Officer (prior to April 2005); John Hancock Group of Funds, Senior Vice President, Secretary and Chief Legal Officer (prior to April 2005) | |||
Susan A. Pereira(k) (born 11/05/70) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since June 2004); Bingham McCutchen LLP (law firm), Associate (prior to June 2004) | |||
Mark N. Polebaum(k) (born 5/01/52) | Secretary and Clerk | January 2006 | Massachusetts Financial Services Company, Executive Vice President, General Counsel and Secretary (since January 2006); Wilmer Cutler Pickering Hale and Dorr LLP (law firm), Partner (prior to January 2006) | |||
Frank L. Tarantino (born 3/07/44) | Independent Chief Compliance Officer | June 2004 | Tarantino LLC (provider of compliance services), Principal (since June 2004); CRA Business Strategies Group (consulting services), Executive Vice President (April 2003 to June 2004); David L. Babson & Co. (investment adviser), Managing Director, Chief Administrative Officer and Director (prior to March 2003) | |||
Richard S. Weitzel(k) | Assistant Secretary and Assistant Clerk | October 2007 | Massachusetts Financial Services Company, Vice President and Assistant General Counsel (since 2007); Vice President and Senior Counsel (since May 2004); Massachusetts Department of Business and Technology, General Counsel (February 2003 to April 2004); Massachusetts Office of the Attorney General, Assistant Attorney General (April 2001 to February 2003); Ropes and Gray, Associate (prior to April 2001) | |||
James O. Yost(k) (born 6/12/60) | Assistant Treasurer | September 1990 | Massachusetts Financial Services Company, Senior Vice President |
(h) | Date first appointed to serve as Trustee/officer of an MFS fund. Each Trustee has served continuously since appointment unless indicated otherwise. |
(j) | Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”). |
(k) | “Interested person” of the Trust within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act), which is the principal federal law governing investment companies like the fund, as a result of position with MFS. The address of MFS is 500 Boylston Street, Boston, Massachusetts 02116. |
(n) | In 2004 and 2005, Mr. Butler provided consulting services to the independent compliance consultant retained by MFS pursuant to its settlement with the SEC concerning market timing and related matters. The terms of that settlement required that compensation and expenses related to the independent compliance consultant be borne exclusively by MFS and, therefore, MFS paid Mr. Butler for the services he rendered to the independent compliance consultant. In 2004 and 2005, MFS paid Mr. Butler a total of $351,119.29. |
88
Table of Contents
Trustees and Officers – continued
The Trust held a shareholders’ meeting in 2005 to elect Trustees, and will hold a shareholders’ meeting at least once every five years thereafter, to elect Trustees.
Each Trustee (except Mr. Butler and Mr. Uek) has been elected by shareholders and each Trustee and officer holds office until his or her successor is chosen and qualified or until his or her earlier death, resignation, retirement or removal. Messrs. Butler, Gutow, Sherratt and Uek and Ms. Thomsen are members of the Trust’s Audit Committee.
Each of the Trust’s Trustees and officers holds comparable positions with certain other funds of which MFS or a subsidiary is the investment adviser or distributor, and, in the case of the officers, with certain affiliates of MFS. As of January 1, 2008, the Trustees served as board members of 100 funds within the MFS Family of Funds.
The Statement of Additional Information contains further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.
Investment Adviser Massachusetts Financial Services Company 500 Boylston Street, Boston, MA 02116-3741 Distributor MFS Fund Distributors, Inc. 500 Boylston Street, Boston, MA 02116-3741 Portfolio Manager Michael Dawson | Custodian JPMorgan Chase Bank One Chase Manhattan Plaza, New York, NY 10081
Independent Registered Public Deloitte & Touche LLP 200 Berkeley Street, Boston, MA 02116 |
89
Table of Contents
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
A discussion regarding the Board’s most recent review and renewal of each Fund’s investment advisory agreement is available by clicking on the fund’s name under “Select a fund” on the MFS Web site (mfs.com).
PROXY VOTING POLICIES AND INFORMATION
A general description of the MFS funds’ proxy voting policies and procedures is available without charge, upon request, by calling 1-800-225-2606, by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.
Information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
The fund will file a complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q may be reviewed and copied at the:
Public Reference Room
Securities and Exchange Commission
100 F Street, NE, Room 1580
Washington, D.C. 20549
Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. The fund’s Form N-Q is available on the EDGAR database on the Commission’s Internet Web site at http://www.sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section at the above address.
A shareholder can also obtain the quarterly portfolio holdings report at mfs.com.
FEDERAL TAX INFORMATION (unaudited)
The funds will notify shareholders of amounts for use in preparing 2008 income tax forms in January 2009. The following information is provided pursuant to provisions of the Internal Revenue Code.
The funds below designate the following amounts as capital gain dividends paid during the fiscal year.
Capital Gains | ||
New York Fund | $353,390 | |
North Carolina Fund | 916,043 | |
Pennsylvania Fund | 27,487 | |
South Carolina Fund | 31,950 | |
Tennessee Fund | 85,905 | |
Viginia Fund | 504,436 | |
West Virginia Fund | 121,170 |
Of the dividends paid from net investment income during the fiscal year, the following percentages were designated as exempt interest dividends for federal income tax purposes. If each fund had earned income on private activity bonds, a portion of the dividends paid may be considered a tax preference item for purposes of computing a shareholder’s alternative minimum tax.
Exempt Interest Dividends | ||
Mississippi Fund | 100.00% | |
New York Fund | 100.00% | |
North Carolina Fund | 100.00% | |
Pennsylvania Fund | 100.00% | |
South Carolina Fund | 100.00% | |
Tennessee Fund | 96.03% | |
Viginia Fund | 100.00% | |
West Virginia Fund | 100.00% |
90
Table of Contents
Privacy is a concern for every investor today. At MFS Investment Management® and the MFS funds, we take this concern very seriously. We want you to understand our policies about the investment products and services that we offer, and how we protect the nonpublic personal information of investors who have a direct relationship with us and our wholly owned subsidiaries.
Throughout our business relationship, you provide us with personal information. We maintain information and records about you, your investments, and the services you use. Examples of the nonpublic personal information we maintain include
Ÿ | data from investment applications and other forms |
Ÿ | share balances and transactional history with us, our affiliates, or others |
Ÿ | facts from a consumer reporting agency |
We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law. We may share nonpublic personal information with third parties or certain of our affiliates in connection with servicing your account or processing your transactions. We may share information with companies or financial institutions that perform marketing services on our behalf or with other financial institutions with which we have joint marketing arrangements, subject to any legal requirements.
Authorization to access your nonpublic personal information is limited to appropriate personnel who provide products, services, or information to you. We maintain physical, electronic, and procedural safeguards to help protect the personal information we collect about you.
If you have any questions about the MFS privacy policy, please call 1-800-225-2606 any business day between 8 a.m. and 8 p.m. Eastern time.
Note: If you own MFS products or receive MFS services in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.
91
Table of Contents
Table of Contents
Table of Contents
MFS® Municipal Income Fund
SIPC Contact Information:
You may obtain information about the Securities Investor Protection Corporation (“SIPC”), including the SIPC Brochure, by contacting SIPC either by telephone (202-371-8300) or by accessing SIPC’s website address (www.sipc.org).
The report is prepared for the general information of shareholders. It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.
NOT FDIC INSURED Ÿ MAY LOSE VALUE Ÿ NO BANK OR CREDIT UNION GUARANTEE Ÿ NOT A DEPOSIT Ÿ NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF
3/31/08
LMB-ANN
Table of Contents
Dear Shareholders:
Many of our MFS® fund shareholders have been justifiably concerned, as have most investors around the world, about the state of the global economy. As we enter 2008 we see the market volatility that began in the third quarter of 2007 has intensified.
We here at MFS, and those before us who guided the firm with the same disciplined investment process, have weathered many major economic disruptions over our eight-plus decades of managing clients’ investments. We have managed money through the Great Depression, 14 recessions, as well as numerous market crises caused by wars, political upheavals, and terrorist attacks. MFS remains in business because our investors believe in the integrity of our long-term investment strategy and its proven results.
Worries over market volatility are valid, and investors cannot always expect to see the kind of returns stocks have delivered in the bull markets of past years. Yet we believe our strategy of ADR — allocating across the major asset classes, diversifying within each class, and regularly rebalancing your portfolio to maintain your desired allocation — can help you pursue the highest investment returns while minimizing the effects of market fluctuations.
MFS is a world leader in domestic and global investing. Our team approach is research driven, globally integrated, and balanced. We have 176 investment management professionals located in the Americas, Europe, and Asia who focus on the fundamentals of each security and then integrate our sophisticated quantitative approach.* This collaborative process allows us to find opportunities in any market environment.
I personally would like to thank you for your continued business. We want you to be confident that we are constantly managing our fund offerings with you in mind, while adding new products that can help you to choose what fits your unique financial goals.
Respectfully,
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management®
May 15, 2008
* as of 12/31/07
The opinions expressed in this letter are subject to change, may not be relied upon for investment advice, and no forecasts can be guaranteed.
1
Table of Contents
Portfolio structure (i)
Top five industries (i) | ||
Healthcare Revenue – Hospitals | 17.1% | |
General Obligations – Schools | 11.9% | |
Utilities – Municipal Owned | 10.0% | |
General Obligations – General Purpose | 8.8% | |
State & Local Agencies | 8.4% |
Credit quality of bonds (r) | ||
AAA | 45.3% | |
AA | 14.9% | |
A | 17.0% | |
BBB | 16.7% | |
BB | 1.2% | |
B | 0.5% | |
CC (o) | 0.0% | |
CCC | 0.4% | |
Not Rated | 4.0% | |
Portfolio facts | ||
Average Duration (d)(i) | 8.1 | |
Average Life (i)(m) | 15.2 yrs. | |
Average Maturity (i)(m) | 17.0 yrs. | |
Average Credit Quality of Rated Securities (long-term) (a) | AA- | |
Average Credit Quality of Rated Securities (short-term) (a) | A-1 |
(a) | The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies. |
(d) | Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value. |
(i) | For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable. |
(m) | The average maturity shown is calculated using the final stated maturity on the portfolio’s holdings without taking into account any holdings which have been pre-refunded or pre-paid to an earlier date or which have a mandatory put date prior to the stated maturity. The average life shown takes into account these earlier dates. |
(o) | Less than 0.1%. |
(r) | Each security is assigned a rating from Moody’s Investors Service. If not rated by Moody’s, the rating will be that assigned by Standard & Poor’s. Likewise, if not assigned a rating by Standard & Poor’s, it will be based on the rating assigned by Fitch, Inc. For those portfolios that hold a security which is not rated by any of the three agencies, the security is considered Not Rated. Holdings in U.S. Treasuries and government agency mortgage-backed securities, if any, are included in the “AAA”-rating category. Percentages are based on the total market value of investments as of 3/31/08. |
From time to time “Cash & Other Net Assets” may be negative due to timing of cash receipts and/or equivalent exposure from any derivative holdings.
Percentages are based on net assets as of 3/31/08, unless otherwise noted.
The portfolio is actively managed and current holdings may be different.
2
Table of Contents
Summary of Results
For the twelve months ended March 31, 2008, Class A shares of the MFS Municipal Income Fund provided a total return of 0.81%, at net asset value. This compares with a return of 1.90% for the fund’s benchmark, the Lehman Brothers Municipal Bond Index.
Market Environment
The U.S. economy and financial markets experienced deterioration and heightened volatility over the reporting period. U.S. economic growth slowed significantly in the fourth quarter of 2007 and the domestic economy continued to be buffeted by headwinds as we entered 2008. These challenges included continued weakness in the housing market, subdued corporate investment, signs of a weaker job market, and a tighter credit environment as banks sought to repair balance sheets. While reasonably resilient, parts of the global economy and financial system experienced some spillover from the U.S. slowdown. Japanese growth slowed over the reporting period and European financial markets were adversely affected by U.S. mortgage and structured product losses.
In the face of this financial and economic turmoil, most global central banks were forced to inject liquidity and to reassess their tightening biases as government bond yields declined and credit spreads widened. Late in the reporting period, the U.S. Federal Reserve Board began an aggressive rate cutting campaign, while the U.S. federal government moved quickly to design a modest fiscal stimulus package. Though the Bank of England and the Bank of Canada also cut rates, the dilemma of rising energy and food prices heightened concerns among central bankers that inflationary expectations might become unhinged.
By the end of the reporting period, bond yields and credit spreads implied market expectations of further financial and economic weakening, as well as continued rate cuts by many global central banks. However, global equity markets recorded only a modest decline from third quarter highs.
Detractors from Performance
Over the reporting period, security selection in healthcare-related bonds, general obligations municipal securities, and utilities bonds held back the fund’s relative performance. An overweighted relative exposure to “BBB” rated(s) securities also had a negative impact on results as these securities underperformed the Lehman Brothers Municipal Bond Index.
Contributors to Performance
Yield curve(y) positioning bolstered the fund’s relative performance. Specifically, the fund’s relative results benefited from an overweighted position in the short end of the curve (represented by bonds with durations(d)
3
Table of Contents
Management Review – continued
of 0- to 4- years). Underweighting the intermediate to longer end of the curve (represented by bonds with durations between 8- to 14- years) also helped relative returns.
Respectfully,
Geoffrey Schechter
Portfolio Manager
(d) | Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value. |
(s) | Bonds rated “BBB”, “Baa”, or higher are considered investment grade; bonds rated “BB”, “Ba”, or below are considered non-investment grade. The primary source for bond quality ratings is Moody’s Investors Service. If not available, ratings by Standard & Poor’s are used, else ratings by Fitch, Inc. For securities which are not rated by any of the three agencies, the security is considered Not Rated. |
(y) | A yield curve graphically depicts the yields of different maturity bonds of the same credit quality and type. A normal yield curve is upward-sloping, with short term-rates lower than long term rates. |
The views expressed in this report are those of the portfolio manager only through the end of the period of the report as stated on the cover and do not necessarily reflect the views of MFS or any other person in the MFS organization. These views are subject to change at any time based on market or other conditions, and MFS disclaims any responsibility to update such views. These views may not be relied upon as investment advice or an indication of trading intent on behalf of any MFS portfolio. References to specific securities are not recommendations of such securities, and may not be representative of any MFS portfolio’s current or future investments.
4
Table of Contents
PERFORMANCE SUMMARY THROUGH 3/31/08
The following chart illustrates a representative class of the fund’s historical performance in comparison to its benchmark. Performance results include the deduction of the maximum applicable sales charge and reflect the percentage change in net asset value, including reinvestment of dividends and capital gains distributions. The performance of other share classes will be greater than or less than that of the class depicted below. Benchmark comparisons are unmanaged; do not reflect sales charges, commissions or expenses; and cannot be invested in directly. (See Notes to Performance Summary).
Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value fluctuate so your shares, when sold, may be worth more or less than the original cost; current performance may be lower or higher than quoted. The performance shown does not reflect the deduction of taxes, if any, that a shareholder would pay on fund distributions or the redemption of fund shares.
Growth of a hypothetical $10,000 investment
5
Table of Contents
Performance Summary – continued
Total returns through 3/31/2008
Average annual without sales charge
Share class | Class inception date | 1-yr | 5-yr | 10-yr | ||||||||
A | 9/07/93 | 0.81% | 4.07% | 4.38% | ||||||||
B | 12/29/86 | (0.06)% | 3.29% | 3.60% | ||||||||
C | 1/03/94 | (0.05)% | 3.32% | 3.61% | ||||||||
A1 | 6/25/07 | 0.79% | 3.42% | 4.47% | ||||||||
B1 | 6/25/07 | 0.12% | 2.63% | 3.65% |
Average Annual
Comparative Benchmark
Lehman Brothers Municipal Bond Index (f) | 1.90% | 3.93% | 4.99% |
Average annual with sales charge
A With Initial Sales Charge (4.75%) | (3.98)% | 3.06% | 3.88% | |||||||
B With CDSC (Declining over six years from 4% to 0%) (x) | (3.89)% | 2.95% | 3.60% | |||||||
C With CDSC (1% for 12 months) (x) | (1.01)% | 3.32% | 3.61% | |||||||
A1 With Initial Sales Charge (4.75%) | (3.99)% | 2.42% | 3.96% | |||||||
B1 With CDSC (Declining over six years from 4% to 0%) (x) | (3.71)% | 2.30% | 3.65% |
CDSC – Contingent Deferred Sales Charge.
(f) | Source: FactSet Research Systems Inc. |
(x) | Assuming redemption at the end of the applicable period. |
Benchmark Definitions
Lehman Brothers Municipal Bond Index - a market capitalization-weighted index that measures the performance of the tax-exempt bond market. It is not possible to invest directly in an index.
Notes to Performance Summary
Performance for class A1 shares includes the performance of the MFS Municipal Bond Fund class A shares for the period prior to the merger of the MFS Municipal Bond Fund into the MFS Municipal Income Fund. Performance for class B1 shares includes the performance of the MFS Municipal Bond Fund class B shares for the period prior to the merger of the MFS Municipal Bond Fund into the MFS Municipal Income Fund. The merger occurred at the close of business on June 22, 2007.
6
Table of Contents
Performance Summary – continued
This blended class performance has been adjusted to take into account differences in sales loads, if any, applicable to these share classes, but has not been adjusted to take into account differences in class specific operating expenses (such as Rule 12b-1 fees). Compared to performance these share classes would have experienced had they been offered for the entire period, the use of blended performance generally results in higher performance for share classes with higher operating expenses than the share class to which it is blended, and lower performance for share classes with lower operating expenses than the share class to which it is blended.
Performance results reflect any applicable expense subsidies and waivers in effect during the periods shown. Without such subsidies and waivers the fund’s performance results would be less favorable. Please see the prospectus and financial statements for complete details.
A portion of income may be subject to state, federal, and/or alternative minimum tax. Capital gains, if any, are subject to a capital gains tax.
From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower.
7
Table of Contents
Fund expenses borne by the shareholders during the period, October 1, 2007 through March 31, 2008
As a shareholder of the fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on certain purchase or redemption payments, and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period October 1, 2007 through March 31, 2008.
Actual Expenses
The first line for each share class in the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line for each share class in the following table provides information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
8
Table of Contents
Expense Table – continued
Share Class | Annualized Ratio | Beginning Account Value 10/01/07 | Ending Account Value | Expenses Paid During Period (p) 10/01/07-3/31/08 | ||||||
A | Actual | 0.80% | $1,000.00 | $997.39 | $3.99 | |||||
Hypothetical (h) | 0.80% | $1,000.00 | $1,021.00 | $4.04 | ||||||
B | Actual | 1.56% | $1,000.00 | $993.66 | $7.78 | |||||
Hypothetical (h) | 1.56% | $1,000.00 | $1,017.20 | $7.87 | ||||||
C | Actual | 1.56% | $1,000.00 | $992.56 | $7.77 | |||||
Hypothetical (h) | 1.56% | $1,000.00 | $1,017.20 | $7.87 | ||||||
A1 | Actual | 0.53% | $1,000.00 | $998.66 | $2.65 | |||||
Hypothetical (h) | 0.53% | $1,000.00 | $1,022.35 | $2.68 | ||||||
B1 | Actual | 1.29% | $1,000.00 | $994.84 | $6.43 | |||||
Hypothetical (h) | 1.29% | $1,000.00 | $1,018.55 | $6.51 |
(h) | 5% class return per year before expenses. |
(p) | Expenses paid is equal to each class’ annualized expense ratio, as shown above, multiplied by the average account value over the period, multiplied by the number of days in the period, divided by the number of days in the year. Expenses paid do not include any applicable sales charges (loads). If these transaction costs had been included, your costs would have been higher. |
9
Table of Contents
3/31/08
The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.
Municipal Bonds - 102.0% | ||||||
Issuer | Shares/Par | Value ($) | ||||
Airport & Port Revenue - 2.3% | ||||||
Branson, MO, Regional Airport Transportation Development District Airport Rev., “B”, 6%, 2025 | $ | 205,000 | $ | 184,792 | ||
Branson, MO, Regional Airport Transportation Development District Airport Rev., “B”, 6%, 2037 | 100,000 | 87,611 | ||||
Branson, MO, Regional Airport Transportation Development District Airport Rev., “B”, 6%, 2037 | 1,075,000 | 925,188 | ||||
Chicago, IL, O’Hare International Airport Rev., XLCA, 6%, 2029 | 6,000,000 | 6,063,120 | ||||
Chicago, IL, O’Hare International Airport Rev. (Second Lien Passenger Facility), “D”, AMBAC, 5.5%, 2019 | 2,195,000 | 2,280,144 | ||||
Chicago, IL, O’Hare International Airport Rev. (Third Lien Passenger Facility), “B”, FSA, 5.75%, 2022 (u) | 8,000,000 | 8,128,080 | ||||
Chicago, IL, O’Hare International Airport Rev. (Third Lien Passenger Facility), “B”, FSA, 5.75%, 2022 | 1,125,000 | 1,143,011 | ||||
Indianapolis, IN, Local Public Improvement (Airport Authority Project), “I”, MBIA, 5%, 2034 | 900,000 | 811,764 | ||||
Louisville & Jefferson County, KY, Regional Airport Authority, “A”, MBIA, 6.5%, 2017 | 3,000,000 | 3,056,760 | ||||
Massachusetts Port Authority Rev., ETM, 13%, 2013 (c) | 2,465,000 | 3,151,010 | ||||
Niagara, NY, Frontier Transportation Authority Rev. (Buffalo-Niagara International Airport), MBIA, 5.875%, 2013 | 1,485,000 | 1,526,001 | ||||
Oklahoma City, OK, Airport Trust, “B”, FSA, 5.75%, 2017 | 1,080,000 | 1,119,409 | ||||
$ | 28,476,890 | |||||
General Obligations - General Purpose - 8.6% | ||||||
Chicago, IL, FGIC, 6.125%, 2010 (c) | $ | 3,785,000 | $ | 4,132,236 | ||
Chicago, IL, AMBAC, 5.5%, 2018 (u) | 11,800,000 | 13,195,114 | ||||
Commonwealth of Massachusetts, 5.375%, 2011 (c)(u) | 5,740,000 | 6,292,647 | ||||
Commonwealth of Massachusetts, “B”, ETM, FGIC, 7%, 2009 (c) | 4,680,000 | 4,829,666 | ||||
Commonwealth of Puerto Rico, FGIC, 5.5%, 2015 (u) | 5,580,000 | 6,357,294 | ||||
Commonwealth of Puerto Rico, XLCA, 5.5%, 2017 | 2,300,000 | 2,461,437 | ||||
Commonwealth of Puerto Rico, “A”, 5.25%, 2027 | 590,000 | 577,368 | ||||
Commonwealth of Puerto Rico, “A”, FGIC, 5.5%, 2015 | 275,000 | 289,561 | ||||
Commonwealth of Puerto Rico, “A”, ETM, FGIC, 5.5%, 2015 (c) | 5,000 | 5,697 | ||||
Country Club Hills, IL, “N”, MBIA, 5%, 2031 | 3,170,000 | 3,122,228 | ||||
Cranston, RI, FGIC, 6.375%, 2009 (c) | 200,000 | 215,516 | ||||
Cranston, RI, FGIC, 6.375%, 2009 (c) | 830,000 | 894,391 | ||||
Delaware County, OH, 6.25%, 2010 (c) | 1,000,000 | 1,108,840 |
10
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
General Obligations - General Purpose - continued | ||||||
Kane Kendall County, IL, Capital Appreciation, “E”, FGIC, 0%, 2023 | $ | 1,360,000 | $ | 575,797 | ||
Kane Kendall County, IL, Capital Appreciation, “E”, FGIC, 0%, 2025 | 1,335,000 | 480,159 | ||||
Mobile County, AL, 6%, 2009 (c) | 800,000 | 840,832 | ||||
New York, NY, “J”, MBIA, 5%, 2017 | 2,000,000 | 2,046,860 | ||||
New York, NY, Urban Development Corp., 5.5%, 2016 | 13,365,000 | 13,452,808 | ||||
Pittsfield, MA, MBIA, 5.5%, 2017 | 100,000 | 108,095 | ||||
Schaumburg, IL, “B”, FGIC, 5.25%, 2034 | 2,000,000 | 2,021,120 | ||||
State of California, 5.5%, 2009 (c) | 11,650,000 | 12,364,029 | ||||
State of California, 5%, 2031 | 8,715,000 | 8,585,059 | ||||
State of California, FSA, 5%, 2037 (f) | 5,000,000 | 4,961,700 | ||||
State of Illinois, MBIA, 5.5%, 2025 | 500,000 | 510,775 | ||||
State of Washington, 6.75%, 2010 | 3,880,000 | 4,187,878 | ||||
State of Washington, 6%, 2012 | 4,360,000 | 4,880,584 | ||||
State of Wisconsin, “C”, 6%, 2010 (c) | 1,200,000 | 1,289,808 | ||||
Texas Transportation Commission Mobility Fund, 5%, 2037 | 7,095,000 | 6,988,149 | ||||
$ | 106,775,648 | |||||
General Obligations - Improvement - 2.8% | ||||||
Birmingham, AL, “A”, 5.75%, 2017 | $ | 1,000,000 | $ | 1,060,900 | ||
District of Columbia, MBIA, 6.5%, 2010 | 3,095,000 | 3,348,295 | ||||
District of Columbia, ETM, MBIA, 6.5%, 2010 (c) | 2,905,000 | 3,158,113 | ||||
Massachusetts Bay Transportation Authority, General Transportation Systems, “A”, XLCA, 7%, 2021 | 10,185,000 | 12,411,848 | ||||
Massachusetts Bay Transportation Authority, General Transportation Systems, “C”, XLCA, 6.1%, 2013 | 10,200,000 | 11,317,206 | ||||
Worcester, MA, FSA, 6%, 2010 (c) | 3,475,000 | 3,761,722 | ||||
$ | 35,058,084 | |||||
General Obligations - Schools - 11.8% | ||||||
Adams 12 Five Star Schools, CO, “B”, FGIC, 0%, 2025 | $ | 2,190,000 | $ | 811,045 | ||
Chicago, IL, Board of Education, MBIA, 6.25%, 2015 | 20,295,000 | 22,933,553 | ||||
Chicago, IL, Board of Education, FGIC, 5.25%, 2019 | 10,000,000 | 10,730,500 | ||||
Clark County, NV, School District, “A”, MBIA, 7%, 2010 | 4,000,000 | 4,381,520 | ||||
DeSoto, TX, Independent School District, School Building, PSF, 0%, 2031 | 1,725,000 | 449,397 | ||||
DeSoto, TX, Independent School District, School Building, PSF, 0%, 2034 | 1,300,000 | 281,333 | ||||
DeSoto, TX, Independent School District, School Building, PSF, 0%, 2036 | 1,630,000 | 313,221 | ||||
Ferris, TX, Independent School District, PSF, 5.5%, 2034 | 3,000,000 | 3,093,570 | ||||
Florida Board of Education, Capital Outlay, 9.125%, 2014 | 1,735,000 | 2,038,278 |
11
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
General Obligations - Schools - continued | ||||||
Florida Board of Education, Capital Outlay, ETM, 9.125%, 2014 (c) | $ | 265,000 | $ | 344,532 | ||
Fresno, CA, Unified School District, MBIA, 6.55%, 2020 | 1,225,000 | 1,421,245 | ||||
Gilroy, CA, Unified School District, FGIC, 5%, 2027 | 1,000,000 | 1,012,990 | ||||
Grand Blanc, MI, Community Schools (School Building & Site), FSA, 5%, 2028 | 1,000,000 | 1,013,550 | ||||
Irving, TX, Independent School District, Capital Appreciation, PSF, 0%, 2026 | 2,505,000 | 922,516 | ||||
Joshua, TX, Independent School District, PSF, 4.75%, 2033 | 11,585,000 | 10,963,581 | ||||
Kane, Cook & DuPage Counties, IL, FSA, 6.375%, 2011 (c) | 1,245,000 | 1,370,396 | ||||
Kane, Cook & DuPage Counties, IL, FSA, 6.5%, 2011 (c) | 1,345,000 | 1,484,893 | ||||
Keller, TX, Independent School District, PSF, 6%, 2017 | 225,000 | 238,606 | ||||
Knox County, KY, XLCA, 5.625%, 2014 (c) | 1,150,000 | 1,311,610 | ||||
Knox County, KY, Independent School District, XLCA, 5.5%, 2014 (c) | 640,000 | 725,184 | ||||
Lancaster, TX, Independent School District, Capital Appreciation, FSA, 0%, 2014 (c) | 2,250,000 | 884,835 | ||||
Lancaster, TX, Independent School District, Capital Appreciation, FSA, 0%, 2014 (c) | 2,000,000 | 739,580 | ||||
Lancaster, TX, Independent School District, Capital Appreciation, FSA, 5%, 2034 | 12,000,000 | 11,930,280 | ||||
Lane County, OR, School District, 6.25%, 2010 (c) | 1,150,000 | 1,247,118 | ||||
Lane County, OR, School District, 6.25%, 2010 (c) | 1,000,000 | 1,084,450 | ||||
Leander, TX, Independent School District, PSF, 0%, 2018 | 7,385,000 | 3,988,934 | ||||
Leander, TX, Independent School District, Capital Appreciation, Refunding, School Building, “N”, PSF, 0%, 2029 | 4,000,000 | 1,211,240 | ||||
Manchester, NH, School Facilities Rev., MBIA, 5.5%, 2027 | 1,000,000 | 1,079,140 | ||||
Manchester, NH, School Facilities Rev., MBIA, 5.5%, 2028 | 1,000,000 | 1,074,900 | ||||
Manistee, MI, Area Public Schools, FGIC, 5.75%, 2009 (c) | 700,000 | 727,230 | ||||
Phenix City, AL, AMBAC, 5.65%, 2010 (c) | 1,500,000 | 1,640,205 | ||||
Philadelphia, PA, School District, MBIA, 6%, 2010 (c) | 750,000 | 800,993 | ||||
Prosper, TX, Independent School District, Capital Appreciation, School Building, “N”, PSF, 0%, 2031 | 2,275,000 | 592,683 | ||||
Rancho Santiago, CA, Community College District, Election of 2002, MBIA, 5%, 2013 (c) | 2,200,000 | 2,430,934 | ||||
Rockwall, TX, Independent School District, Unrefunded, Capital Appreciation, “N”, PSF, 0%, 2014 | 90,000 | 65,955 | ||||
Roma, TX, Independent School District, PSF, 5.875%, 2010 (c) | 1,705,000 | 1,844,981 | ||||
San Lorenzo, CA, Unified School District, Alameda County, Election 2004, “B”, FGIC, 4.75%, 2037 | 4,535,000 | 4,361,219 | ||||
San Marcos, TX, Independent School District, PSF, 5.625%, 2014 (c) | 2,000,000 | 2,280,660 | ||||
San Marcos, TX, Independent School District, PSF, 5.625%, 2014 (c) | 2,000,000 | 2,280,660 |
12
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
General Obligations - Schools - continued | ||||||
San Rafael, CA, Elementary School District, Election of 1999, MBIA, 5%, 2028 | $ | 2,500,000 | $ | 2,526,950 | ||
Santa Clarita Community College District, CA, Election 2006, MBIA, 0%, 2030 | 1,610,000 | 428,485 | ||||
Schertz-Cibolo-Universal City, TX, Independent School District, PSF, 5%, 2036 | 15,000,000 | 14,777,250 | ||||
Scranton, PA, School District, “B”, FSA, 5%, 2038 | 8,370,000 | 8,343,467 | ||||
Sunnyvale, TX, Independent School District, PSF, 5.25%, 2028 | 1,900,000 | 1,949,989 | ||||
Sunnyvale, TX, Independent School District, PSF, 5.25%, 2031 | 2,000,000 | 2,041,320 | ||||
Wattsburg, PA, Public School Building Authority Rev., Capital Appreciation, MBIA, 0%, 2029 | 2,150,000 | 658,868 | ||||
Williamson County, TN, Rural School, 6.125%, 2010 (c) | 1,665,000 | 1,783,698 | ||||
Williamson County, TN, Rural School, 6.125%, 2010 (c) | 1,765,000 | 1,890,827 | ||||
Wylie, TX, Independent School District, PSF, 5.25%, 2029 | 5,035,000 | 5,138,922 | ||||
$ | 145,647,293 | |||||
Healthcare Revenue - Hospitals - 16.9% | ||||||
Akron Bath Copley, OH, Hospital Rev. (Children’s Hospital), FSA, 5.25%, 2025 | $ | 1,000,000 | $ | 1,030,300 | ||
Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), 9.25%, 2010 (c) | 650,000 | 769,496 | ||||
Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), “A”, 5%, 2028 | 255,000 | 204,485 | ||||
Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), “A”, 5.375%, 2040 | 3,995,000 | 3,182,577 | ||||
Allegheny County, PA, Hospital Development Authority Rev. (West Penn Allegheny Health), “B”, 9.25%, 2010 (c) | 350,000 | 414,344 | ||||
Baxter County, AR, Hospital Rev., 5.375%, 2014 | 2,000,000 | 2,013,240 | ||||
Baxter County, AR, Hospital Rev., 5.6%, 2021 | 1,750,000 | 1,750,368 | ||||
California Statewide Communities Development Authority Rev. (Childrens Hospital), 5%, 2047 | 1,595,000 | 1,250,943 | ||||
California Statewide Communities Development Authority Rev. (Valleycare Health Systems), “A”, 5%, 2022 | 195,000 | 173,187 | ||||
California Statewide Communities Development Authority Rev. (Valleycare Health Systems), “A”, 5.125%, 2031 | 100,000 | 82,775 | ||||
California Statewide Communties Development Authority Rev. (St. Joseph Health System), FGIC, 5.75%, 2047 | 3,260,000 | 3,279,723 | ||||
Cass County, MO, Hospital Rev., 5.625%, 2038 | 890,000 | 811,573 | ||||
Chemung County, NY, Civic Facilities Rev. (St. Joseph’s Hospital-Elmira), “A”, 6%, 2013 | 435,000 | 436,601 | ||||
Colorado Health Facilities Authority Rev. (Portercare Adventist Health Systems), 6.625%, 2011 (c) | 1,750,000 | 1,997,730 |
13
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Healthcare Revenue - Hospitals - continued | ||||||
Colorado Health Facilities Authority Rev. (Poudre Valley Health Care, Inc.), “B”, FSA, 10.755%, 2036 | $ | 4,950,000 | $ | 4,950,000 | ||
Cuyahoga County, OH, Hospital Facilities Rev. (Canton, Inc.), 7.5%, 2030 | 900,000 | 934,182 | ||||
Denver, CO, Health & Hospital Authority Rev., “A”, 6%, 2011 (c) | 500,000 | 557,130 | ||||
District of Columbia, Hospital Rev. (Medlantic Healthcare), ETM, MBIA, 5.25%, 2019 (c) | 6,750,000 | 6,892,695 | ||||
Florence County, SC, Hospital Rev. (McLeod Regional Medical Center), “A”, FSA, 5.25%, 2034 | 5,000,000 | 4,999,800 | ||||
Fulton County, NY, Industrial Development Agency, Civic Facilities Rev. (Nathan Littauer Hospital), “A”, 5.75%, 2009 | 110,000 | 110,398 | ||||
Glendale, AZ, Industrial Development Authority (John C. Lincoln Health), 5%, 2042 | 650,000 | 558,922 | ||||
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), 5.75%, 2031 | 2,100,000 | 2,102,247 | ||||
Harris County, TX, Health Facilities Development Corp. Hospital Rev. (Memorial Herman Healthcare), 6.375%, 2011 (c) | 2,000,000 | 2,239,560 | ||||
Harris County, TX, Health Facilities Development Corp., “A” (Texas Children’s Hospital), ETM, 5.375%, 2015 (c) | 4,300,000 | 4,513,882 | ||||
Henrico County, VA, Industrial Development Authority Rev. (Bon Secours), RIBS, FSA, 6.445%, 2027 (p) | 5,000,000 | 6,406,100 | ||||
Huntsville, AL, Health Care Authority Rev., 5.625%, 2011 (c) | 2,595,000 | 2,851,386 | ||||
Illinois Development Finance Authority Rev. “A” (Provena Health), MBIA, 5.25%, 2012 | 1,600,000 | 1,619,504 | ||||
Illinois Health Facilities Authority Rev. (Advocate Health Care Network), 6.375%, 2010 (c) | 1,800,000 | 1,981,800 | ||||
Illinois Health Facilities Authority Rev. (Condell Medical Center), 6.35%, 2015 | 7,500,000 | 7,716,450 | ||||
Illinois Health Facilities Authority Rev. (Decatur Memorial Hospital), 5.75%, 2024 | 3,000,000 | 3,075,180 | ||||
Illinois Health Facilities Authority Rev. (Passavant Memorial Area Hospital Associates), 6%, 2010 (c) | 1,500,000 | 1,645,275 | ||||
Illinois Health Facilities Authority Rev. (Riverside Health Systems), 5.75%, 2012 (c) | 2,625,000 | 2,929,159 | ||||
Indiana Health & Educational Facilities Authority, Hospital Rev. (Community Foundation of Northwest Indiana), 5.5%, 2037 | 6,215,000 | 5,351,426 | ||||
Indiana Health & Educational Facilities Authority, Hospital Rev. (Community Foundation of Northwest Indiana), “A”, 6.375%, 2011 (c) | 185,000 | 208,499 | ||||
Indiana Health & Educational Facilities Authority, Hospital Rev. (Community Foundation of Northwest Indiana), “A”, 6.375%, 2011 (c) | 380,000 | 428,268 |
14
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Healthcare Revenue - Hospitals - continued | ||||||
Indiana Health & Educational Facilities Authority, Hospital Rev. (Community Foundation of Northwest Indiana), “A”, 6.375%, 2021 | $ | 1,515,000 | $ | 1,539,664 | ||
Indiana Health & Educational Facilities Authority, Hospital Rev. (Community Foundation of Northwest Indiana), Unrefunded Balance, “A”, 6.375%, 2031 | 120,000 | 118,908 | ||||
Indiana Health & Educational Facilities Authority, Hospital Rev. (Deaconess Hospital), “A”, AMBAC, 5.375%, 2034 | 2,640,000 | 2,681,897 | ||||
Indiana Health & Educational Facilities Authority, Hospital Rev. (Riverview Hospital), 5.25%, 2014 | 400,000 | 407,464 | ||||
Indiana Health & Educational Facilities Authority, Hospital Rev. (Riverview Hospital), 6.125%, 2031 | 250,000 | 253,950 | ||||
Iowa Finance Authority, Health Care Facilities Rev. (Genesis Medical Center), 6.125%, 2016 | 2,195,000 | 2,283,480 | ||||
Kentucky Economic Development Finance Authority (Norton Healthcare), “A”, 6.5%, 2010 (c) | 2,355,000 | 2,608,398 | ||||
Kentucky Economic Development Finance Authority (Norton Healthcare), “A”, 6.625%, 2010 (c) | 195,000 | 216,569 | ||||
Kentucky Economic Development Finance Authority, Unrefunded (Norton Healthcare), “A”, 6.5%, 2010 | 3,645,000 | 3,764,119 | ||||
Kentucky Economic Development Finance Authority, Unrefunded (Norton Healthcare), “A”, 6.625%, 2028 | 55,000 | 56,104 | ||||
Knox County, TN, Health Educational Hospital Facility (Baptist Health Systems, East Tennessee), 6.375%, 2022 | 1,000,000 | 1,027,390 | ||||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Covenant Health), “A”, 0%, 2035 | 3,205,000 | 574,240 | ||||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Covenant Health), “A”, 0%, 2037 | 1,375,000 | 216,288 | ||||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (Covenant Health), “A”, 0%, 2036 | 2,010,000 | 337,459 | ||||
Knox County, TN, Health, Educational, Hospital & Housing Facilities Board Rev. (University Health Systems, Inc.), 5.25%, 2036 | 1,300,000 | 1,152,541 | ||||
Lauderdale County & Florence, AL (Coffee Health Group), “A”, MBIA, 5.25%, 2019 | 1,100,000 | 1,109,691 | ||||
Louisiana Public Facilities Authority Hospital Rev. (Lake Charles Memorial Hospital), 6.375%, 2034 | 2,620,000 | 2,420,173 | ||||
Lufkin, TX, Health Facilities Development Corp. Rev. (Memorial Health System), 5.5%, 2032 | 295,000 | 269,084 | ||||
Lufkin, TX, Health Facilities Development Corp. Rev. (Memorial Health System), 5.5%, 2037 | 310,000 | 278,690 | ||||
Macomb County, MI, Hospital Finance Authority Rev. (Mount Clemens General Hospital), 5.75%, 2025 | 1,000,000 | 926,860 |
15
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Healthcare Revenue - Hospitals - continued | ||||||
Marion County, FL, Hospital District (Munroe Regional Medical Center), 5.625%, 2019 | $ | 480,000 | $ | 490,790 | ||
Marshall County, AL, Health Care Authority Rev., “A”, 6.25%, 2022 | 500,000 | 529,955 | ||||
Marshall County, AL, Health Care, “A”, 5.75%, 2015 | 1,000,000 | 1,056,690 | ||||
Martin County, FL, Health Facilities Authority Rev. (Martin Memorial Medical Center), “A”, 5.75%, 2012 (c) | 850,000 | 957,848 | ||||
Martin County, FL, Health Facilities Authority Rev. (Martin Memorial Medical Center), “B”, 5.875%, 2012 (c) | 2,200,000 | 2,490,906 | ||||
Maryland Health & Higher Educational Facilites Authority Rev. (Washington County Hospital), 6%, 2043 | 615,000 | 597,386 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Lifebridge Health), ASSD GTY, 5%, 2034 | 1,750,000 | 1,727,198 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Medstar Health), 5.5%, 2033 | 1,420,000 | 1,338,535 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Mercy Medical Center), “A”, 5.5%, 2042 | 1,950,000 | 1,777,328 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (University of Maryland Medical System), 6.75%, 2010 (c) | 2,000,000 | 2,212,980 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Washington County Hospital), 5.75%, 2038 | 395,000 | 373,504 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Caritas Christi), “A”, 5.7%, 2015 | 3,550,000 | 3,601,582 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Caritas Christi), “B”, 6.5%, 2012 | 400,000 | 419,272 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Partners Healthcare Systems), “C”, 5.75%, 2021 | 1,900,000 | 1,992,530 | ||||
Mecosta County, MI, General Hospital Rev., 6%, 2018 | 300,000 | 297,066 | ||||
Miami Beach, FL, Health Facilities Authority Rev. (Mount Sinai Medical Center), “A”, 6.7%, 2019 | 750,000 | 763,890 | ||||
Michigan Hospital Finance Authority Rev. (Memorial Healthcare Center), 5.75%, 2015 | 800,000 | 815,792 | ||||
Michigan Hospital Finance Authority Rev. (Sisters of Mercy Health System), ETM, MBIA, 5.375%, 2014 (c) | 515,000 | 548,032 | ||||
Michigan Hospital Finance Authority Rev., “A” (Crittenton), 5.625%, 2027 | 1,000,000 | 1,019,900 | ||||
Monroe County, MI, Hospital Finance Authority, Hospital Rev. (Mercy Memorial Hospital Corp.), 5.5%, 2035 | 2,995,000 | 2,502,382 | ||||
Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center), 6%, 2014 (c) | 750,000 | 856,815 | ||||
Montgomery, AL, Medical Clinic Board Health Care Facility Rev. (Jackson Hospital & Clinic), 5.25%, 2031 | 585,000 | 514,215 |
16
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Healthcare Revenue - Hospitals - continued | ||||||
Mount Lebanon, PA, Hospital Authority Rev. (St. Clair Memorial Hospital), 5.625%, 2032 | $ | 1,710,000 | $ | 1,724,261 | ||
Nassau County, NY, Industrial Development Agency, Civic Facilities Rev. (North Shore Health System), 5.875%, 2011 | 230,000 | 236,001 | ||||
New Hampshire Health & Education Facilities Authority Rev. (Covenant Health System), 6.5%, 2012 (c) | 445,000 | 504,746 | ||||
New Hampshire Health & Education Facilities Authority Rev. (Covenant Health System), 6.5%, 2017 | 320,000 | 343,936 | ||||
New Hampshire Health & Education Facilities Authority Rev. (Exeter Hospital), 6%, 2016 | 1,000,000 | 1,069,610 | ||||
New Hampshire Health & Education Facilities Authority Rev. (Exeter Hospital), 6%, 2024 | 500,000 | 526,625 | ||||
New Jersey Health Care Facilities, Financing Authority Rev. (Palisades Medical Center), 6.5%, 2021 | 500,000 | 511,050 | ||||
New Jersey Health Care Facilities, Financing Authority Rev. (St. Barnabas Health) Capital Appreciation, “B”, 0%, 2036 | 4,695,000 | 670,446 | ||||
New Jersey Health Care Facilities, Financing Authority Rev. (St. Barnabas Health) Capital Appreciation, “B”, 0%, 2038 | 18,145,000 | 2,245,081 | ||||
New Jersey Health Care Facilities, Financing Authority Rev. (St. Peter’s University Hospital), 5.75%, 2037 | 2,830,000 | 2,702,735 | ||||
North Texas Health Facilities Development Corp. Rev. (United Regional Health Care System, Inc.), 6%, 2013 (c) | 5,000,000 | 5,719,750 | ||||
Ohio County, WV, County Commission Health System Rev. (Ohio Valley Medical Center), 5.75%, 2013 | 900,000 | 869,868 | ||||
Oklahoma Development Finance Authority Rev. (Comanche County Hospital), “B”, 6%, 2014 | 600,000 | 636,396 | ||||
Oklahoma Development Finance Authority Rev. (Comanche County Hospital), “B”, 6.6%, 2031 | 255,000 | 261,242 | ||||
Orange County, FL, Health Facilities Authority Hospital Rev. (Adventist Health Systems), 5.625%, 2012 (c) | 1,490,000 | 1,671,065 | ||||
Orange County, FL, Health Facilities Authority Hospital Rev. (Orlando Regional Healthcare), 5.75%, 2012 (c) | 2,230,000 | 2,495,838 | ||||
Peninsula Ports Authority, VA, Hospital Facility Rev. (Whittaker Memorial), FHA, 8.7%, 2023 | 1,500,000 | 1,626,255 | ||||
Philadelphia, PA, Hospitals & Higher Education Facilities Authority Rev. (Temple University Hospital), “A”, 5.5%, 2030 | 2,710,000 | 2,473,282 | ||||
Rhode Island Health & Educational Building Corp., Hospital Financing (Lifespan Obligated Group), 6.375%, 2012 (c) | 1,730,000 | 1,975,591 | ||||
Rhode Island Health & Educational Building Corp., Hospital Financing (Lifespan Obligated Group), 6.5%, 2012 (c) | 1,500,000 | 1,720,590 | ||||
Rhode Island Health & Educational Building Corp., Hospital Financing (Lifespan Obligated Group), 6.375%, 2021 | 270,000 | 288,306 |
17
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Healthcare Revenue - Hospitals - continued | ||||||
Richland County, OH, Hospital Facilities Rev. (Medcentral Health), “B”, 6.375%, 2010 (c) | $ | 665,000 | $ | 735,729 | ||
Richland County, OH, Hospital Facilities Rev. (Medcentral Health), “B”, 6.375%, 2022 | 335,000 | 351,358 | ||||
Royston, GA, Hospital Authority Rev. (Ty Cobb Healthcare Systems, Inc.), 6.7%, 2016 | 770,000 | 781,966 | ||||
Royston, GA, Hospital Authority Rev. (Ty Cobb Healthcare Systems, Inc.), 6.5%, 2027 | 290,000 | 282,367 | ||||
Shelby County, TN, Educational & Hospital Facilities Board Hospital Rev., Refunded Balance (Methodist Healthcare), 6.375%, 2012 (c) | 1,255,000 | 1,432,081 | ||||
Shelby County, TN, Educational & Housing Facilities Board Hospital Rev. (Methodist Healthcare), 6%, 2012 (c) | 300,000 | 337,710 | ||||
Shelby County, TN, Educational & Housing Facilities Board Hospital Rev. (Methodist Healthcare), 6%, 2012 (c) | 500,000 | 562,850 | ||||
Shelby County, TN, Educational & Housing Facilities Board Hospital Rev. (Methodist Healthcare), 6.375%, 2012 (c) | 745,000 | 850,120 | ||||
Skagit County, WA, Public Hospital District No. 001, 5.75%, 2032 | 445,000 | 413,997 | ||||
South Carolina Jobs & Economic Development Authority (Bon Secours - St. Francis Medical Center, Inc.), 5.625%, 2012 (c) | 430,000 | 479,489 | ||||
South Carolina Jobs & Economic Development Authority (Bon Secours - St. Francis Medical Center, Inc.), 5.625%, 2030 | 1,625,000 | 1,613,576 | ||||
South Carolina Jobs & Economic Development Authority, Hospital Facilities Rev. (Palmetto Health Alliance), 6.25%, 2031 | 500,000 | 503,765 | ||||
Southwestern, IL, Development Authority Rev. (Anderson Hospital), 5.125%, 2036 | 645,000 | 546,857 | ||||
Steubenville, OH, Hospital Rev. (Trinity Hospital), 6.375%, 2010 (c) | 1,500,000 | 1,644,675 | ||||
Suffolk County, NY, Industrial Development Agency, Civic Facilities Rev. (Huntington Hospital), “C”, 5.875%, 2032 | 1,000,000 | 982,720 | ||||
Sullivan County, TN, Health Educational & Housing Facilities Board Hospital Rev. (Wellmont Health Systems Project), “C”, 5.25%, 2036 | 960,000 | 844,589 | ||||
Sumner County, TN, Health, Educational & Housing Facilities Board Rev. (Sumner Regional Health), “A”, 5.5%, 2046 | 2,000,000 | 1,771,740 | ||||
Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial Healthcare), 6.25%, 2020 | 3,000,000 | 3,042,870 | ||||
Tom Green County, TX, Health Facilities Rev. (Shannon Health System), 6.75%, 2021 | 400,000 | 413,776 | ||||
Tyler, TX, Health Facilities Development Corp. (East Texas Medical Center), “A”, 5.25%, 2032 | 1,715,000 | 1,472,259 | ||||
Tyler, TX, Health Facilities Development Corp. (East Texas Medical Center), “A”, 5.375%, 2037 | 1,410,000 | 1,206,593 | ||||
Upper Illinois River Valley Development, Health Facilities Rev. (Morris Hospital), 6.625%, 2031 | 500,000 | 512,115 |
18
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Healthcare Revenue - Hospitals - continued | ||||||
Vigo County, IN, Hospital Authority Rev. (Union Hospital), 5.8%, 2047 | $ | 2,715,000 | $ | 2,347,443 | ||
Wapello County, IA, Hospital Authority Rev. (Ottumwa Regional Health Center), 6.375%, 2012 (c) | 750,000 | 857,723 | ||||
Washington Health Care Facilities Authority Rev. (Mason Medical), “A”, 6.25%, 2042 | 3,955,000 | 3,599,090 | ||||
Weirton, WV, Municipal Hospital Building, Commission Rev. (Weirton Hospital Medical Center), 6.375%, 2031 | 500,000 | 497,830 | ||||
West Plains, MO, Industrial Development Authority Rev. (Ozarks Medical Center), 6.75%, 2024 | 195,000 | 195,119 | ||||
West Shore, PA, Hospital Authority Rev. (Holy Spirit Hospital), 6.2%, 2026 | 1,250,000 | 1,258,963 | ||||
West Shore, PA, Hospital Authority Rev. (Holy Spirit Hospital), 6.25%, 2032 | 1,000,000 | 1,001,530 | ||||
Wichita, KS, Hospital Authority Rev. (Via Christi Health System), 6.25%, 2019 | 3,095,000 | 3,317,221 | ||||
Wichita, KS, Hospital Authority Rev. (Via Christi Health System), 6.25%, 2020 | 2,465,000 | 2,635,159 | ||||
Wisconsin Health & Educational Facilities Authority Rev. (Agnesian Healthcare, Inc.), 6%, 2017 | 845,000 | 878,403 | ||||
Wisconsin Health & Educational Facilities Authority Rev. (Agnesian Healthcare, Inc.), 6%, 2021 | 650,000 | 667,232 | ||||
Wisconsin Health & Educational Facilities Authority Rev. (Aurora Health Care, Inc.), 6.875%, 2030 | 2,750,000 | 2,817,210 | ||||
Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Healthcare), 5.25%, 2031 | 3,165,000 | 2,692,149 | ||||
Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.75%, 2012 (c) | 3,000,000 | 3,332,670 | ||||
Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 6.25%, 2012 (c) | 1,000,000 | 1,129,040 | ||||
Wisconsin Health & Educational Facilities Authority Rev. (Wheaton Franciscan Services), 5.25%, 2034 | 1,360,000 | 1,144,726 | ||||
Yonkers, NY, Industrial Development Agency, Civic Facilities Rev. (St. John’s Riverside Hospital), 6.8%, 2016 | 355,000 | 361,738 | ||||
$ | 208,385,892 | |||||
Healthcare Revenue - Long Term Care - 0.5% | ||||||
Bell County, TX, Health Facilities Development Rev. (Advanced Living Technology), 8.125%, 2016 (d) | $ | 505,000 | $ | 343,400 | ||
Bell County, TX, Health Facilities Development Rev. (Advanced Living Technology), 8.5%, 2026 (d) | 1,130,000 | 768,400 | ||||
Colorado Health Facilities Authority Rev. (Evangelical), 6.9%, 2010 (c) | 305,000 | 346,572 |
19
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Healthcare Revenue - Long Term Care - continued | ||||||
Colorado Health Facilities Authority Rev. (Evangelical), 6.9%, 2025 | $ | 195,000 | $ | 208,182 | ||
Cumberland County, PA, Municipal Authority, Retirement Community Rev. (Wesley), “A”, 7.25%, 2035 | 270,000 | 320,873 | ||||
Cumberland County, PA, Municipal Authority, Retirement Community Rev. (Wesley), “A”, 7.25%, 2035 | 105,000 | 124,784 | ||||
Eden Prairie, MN, Multi-Family Housing Rev. (Coll-Rolling Hills), “A”, GNMA, 6%, 2021 | 200,000 | 206,934 | ||||
Indiana Health Facilities Financing Authority Rev. (Hoosier Care, Inc.), 7.125%, 2034 | 785,000 | 747,909 | ||||
Iowa Finance Authority, Health Care Facilities Rev. (Care Initiatives), 9.25%, 2011 (c) | 465,000 | 561,776 | ||||
Iowa Finance Authority, Health Care Facilities Rev. (Care Initiatives), “A”, 5.5%, 2025 | 1,205,000 | 1,079,849 | ||||
Millbrae, CA, Residential Facilities Rev. (Magnolia of Millbrae), “A”, 7.375%, 2027 | 860,000 | 867,534 | ||||
Shelby County, TN, Health, Educational & Housing Facilities Board Rev. (Germantown Village), “A”, 7.25%, 2034 | 385,000 | 362,963 | ||||
$ | 5,939,176 | |||||
Human Services - 0.1% | ||||||
Louisiana Local Government, Environmental Facilities & Community Development Authority Rev. (Westside Rehab Center Project), “B”, 6.5%, 2013 | $ | 360,000 | $ | 364,360 | ||
Nassau County, NY, Industrial Development Civic (Special Needs Facilities), 6.1%, 2012 | 150,000 | 150,594 | ||||
Orange County, FL, Health Facilities Authority Rev. (GF/Orlando Healthcare Facilities), 9%, 2031 | 1,000,000 | 1,085,100 | ||||
$ | 1,600,054 | |||||
Industrial Revenue - Airlines - 0.3% | ||||||
Denver, CO, City & County Airport Rev. (United Airlines), 5.25%, 2032 | $ | 720,000 | $ | 544,781 | ||
Denver, CO, City & County Airport Rev. (United Airlines), 5.75%, 2032 | 615,000 | 499,817 | ||||
Los Angeles, CA, Regional Airport Lease Rev. (AMR Corp.), “C”, 7%, 2012 | 300,000 | 303,279 | ||||
New York, NY, City Industrial Development Agencies Rev. (American Airlines, Inc.), 7.625%, 2025 | 970,000 | 979,846 | ||||
Tulsa, OK, Municipal Airport Trust Rev. (American Airlines, Inc.), “B”, 5.65%, 2035 (a) | 1,000,000 | 991,440 | ||||
$ | 3,319,163 |
20
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Industrial Revenue - Chemicals - 0.6% | ||||||
Brazos River, TX, Harbor Navigation District (Dow Chemical Co.), 5.7%, 2033 (a) | $ | 4,500,000 | $ | 4,680,045 | ||
Brazos River, TX, Harbor Navigation District (Dow Chemical Co.), “B-2”, 4.95%, 2033 | 885,000 | 778,676 | ||||
Louisiana, Environmental Facilities & Community Development Authority Rev. (Westlake Chemical), 6.75%, 2032 | 900,000 | 855,549 | ||||
Red River Authority, TX, Pollution Control Rev. (Celanese Project) “B”, 6.7%, 2030 | 1,000,000 | 922,640 | ||||
$ | 7,236,910 | |||||
Industrial Revenue - Environmental Services - 0.8% | ||||||
California Pollution Control Financing Authority, Solid Waste Disposal Rev. (Waste Management, Inc.), “A-2”, 5.4%, 2025 | $ | 1,750,000 | $ | 1,534,103 | ||
Carbon County, UT, Solid Waste Disposal Rev. (Laidlaw Environmental), “A”, 7.45%, 2017 | 2,500,000 | 2,509,325 | ||||
Charles City County, VA, Industrial Development Authority, Solid Waste Disposal Facility Rev. (Waste Management, Inc.), 6.25%, 2027 (a) | 500,000 | 518,535 | ||||
Colorado Housing & Finance Authority, Solid Waste Rev. (Waste Management, Inc.), 5.7%, 2018 | 1,960,000 | 1,902,160 | ||||
Gloucester County, NJ, Solid Waste Resource Recovery Rev. (Waste Management, Inc.), 6.85%, 2029 (a) | 150,000 | 155,084 | ||||
Gulf Coast Waste Disposal Authority (Waste Management, Inc.), 5.2%, 2028 | 300,000 | 246,129 | ||||
Director of the State of Nevada Department of Business & Industry Rev. (Republic Services, Inc.), 5.625%, 2026 (a) | 1,950,000 | 1,906,359 | ||||
New Hampshire Business Finance Authority, Solid Waste Disposal Rev. (Waste Management, Inc.), 5.2%, 2027 | 665,000 | 550,946 | ||||
$ | 9,322,641 | |||||
Industrial Revenue - Metals - 0.0% | ||||||
Burns Harbor, IN, Solid Waste Disposal Facilities Rev. (Bethlehem Steel), 8%, 2024 (d) | $ | 3,000,000 | $ | 300 | ||
Industrial Revenue - Other - 2.1% | ||||||
Bucks County, PA, Industrial Development Authority Rev. (USX Corp.), 5.4%, 2017 (a) | $ | 500,000 | $ | 518,740 | ||
Gulf Coast, TX, Industrial Development Authority Rev. (Microgy Holdings LLC Project), 7%, 2036 | 320,000 | 290,458 | ||||
Gulf Coast, TX, Industrial Development Authority Rev. (Valero Energy Corp.), 5.6%, 2031 | 500,000 | 462,395 | ||||
Hardeman County, TN, Correctional Facilities Corp. (Corrections Corp. of America), 7.375%, 2017 | 500,000 | 505,225 |
21
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Industrial Revenue - Other - continued | ||||||
Liberty, NY, Development Corp. Rev. (Goldman Sachs Headquarters), 5.25%, 2035 | $ | 4,360,000 | $ | 4,398,063 | ||
Massachusetts Development Finance Agency Rev., Resource Recovery (Fluor Corp.), 5.625%, 2019 | 11,545,000 | 11,847,710 | ||||
Massachusetts Industrial Finance Agency Rev. (Welch Foods, Inc.), 5.6%, 2017 | 1,300,000 | 1,325,480 | ||||
Park Creek Metropolitan District, CO, Rev. (Custodial Receipts), “CR-2”, 7.875%, 2032 (a)(n) | 400,000 | 423,380 | ||||
Pennsylvania Economic Development Financing Authority Rev. (Amtrak), 6.125%, 2021 | 550,000 | 560,368 | ||||
Port Corpus Christi, TX, Nueces County General Rev. (Union Pacific Corp.), 5.35%, 2010 | 670,000 | 670,925 | ||||
Tooele County, UT, Hazardous Waste Treatment Rev. (Union Pacific Corp.), 5.7%, 2026 | 4,620,000 | 4,501,081 | ||||
$ | 25,503,825 | |||||
Industrial Revenue - Paper - 1.1% | ||||||
Butler, AL, Industrial Development Board, Solid Waste Disposal Rev. (Georgia Pacific Corp.), 5.75%, 2028 | $ | 260,000 | $ | 207,995 | ||
Delta County, MI, Economic Development Corp., Environmental Improvement Rev. (Mead Westvaco Escanaba), “A”, 6.25%, 2012 (c) | 2,400,000 | 2,700,024 | ||||
Georgetown County, SC, Environmental Improvement (International Paper Co.), 5.7%, 2014 | 1,400,000 | 1,456,826 | ||||
Jay, ME, Solid Waste Disposal Rev., “A” (International Paper Co.), 5.125%, 2018 | 1,500,000 | 1,412,595 | ||||
Mobile, AL, Industrial Development Board Improvement Rev., “B” (International Paper Co.), 6.45%, 2019 | 2,000,000 | 2,035,700 | ||||
Navajo County, AZ, Industrial Development Authority Rev. (Stone Container Corp.), 7.4%, 2026 | 1,500,000 | 1,501,560 | ||||
Navajo County, AZ, Industrial Development Authority Rev. (Stone Container Corp.), 7.2%, 2027 | 500,000 | 498,385 | ||||
Onondaga County, NY, Industrial Development Authority Rev., Solid Waste Disposal Rev. (Solvay Paperboard LLC), 6.8%, 2014 | 800,000 | 812,128 | ||||
Rockdale County, GA, Development Authority Project Rev. (Visy Paper Project), “A”, 6.125%, 2034 | 2,055,000 | 1,848,288 | ||||
Sabine River Authority Rev., Louisiana Water Facilities (International Paper Co.), 6.2%, 2025 | 1,250,000 | 1,256,588 | ||||
West Point, VA, Industrial Development Authority, Solid Waste Disposal Rev. (Chesapeake Corp.), “A”, 6.375%, 2019 | 550,000 | 458,964 | ||||
$ | 14,189,053 |
22
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Miscellaneous Revenue - Entertainment & Tourism - 0.0% | ||||||
New York Liberty Development Corp. Rev. (National Sports Museum), “A”, 6.125%, 2019 | $ | 265,000 | $ | 263,050 | ||
Seneca Nation Indians, NY, Capital Improvements Authority, Special Obligation, 5%, 2023 (n) | 185,000 | 162,154 | ||||
$ | 425,204 | |||||
Miscellaneous Revenue - Other - 0.1% | ||||||
Austin, TX, Convention Center (Convention Enterprises, Inc.), “A”, 6.6%, 2011 (c) | $ | 300,000 | $ | 330,315 | ||
Austin, TX, Convention Center (Convention Enterprises, Inc.), “A”, 6.7%, 2011 (c) | 400,000 | 441,468 | ||||
Austin, TX, Convention Center (Convention Enterprises, Inc.), “B”, 5.75%, 2034 | 520,000 | 446,170 | ||||
Toledo Lucas County, OH, Port Authority Development Rev. (Northwest Ohio Bond Fund), “C”, 5.125%, 2025 | 60,000 | 53,409 | ||||
$ | 1,271,362 | |||||
Multi-Family Housing Revenue - 1.3% | ||||||
Bay County, FL, Housing Finance Authority, Multi-Family Rev. (Andrews Place II Apartments), FSA, 5%, 2035 | $ | 545,000 | $ | 484,587 | ||
Bay County, FL, Housing Finance Authority, Multi-Family Rev. (Andrews Place II Apartments), FSA, 5.1%, 2046 | 1,270,000 | 1,119,302 | ||||
California Statewide Communities Development Authority Rev. (Irvine Apartments), 5.25%, 2025 (a) | 4,500,000 | 4,522,005 | ||||
Charter Mac Equity Issuer Trust, FRN, FHLMC, 6.625%, 2009 (a)(n) | 2,000,000 | 2,072,680 | ||||
GMAC Municipal Mortgage Trust, “B-1”, 5.6%, 2039 (a)(n) | 1,000,000 | 964,480 | ||||
GMAC Municipal Mortgage Trust, “C-1”, 5.7%, 2040 (a)(n) | 500,000 | 467,000 | ||||
Indianapolis, IN, Multi-Family Rev. (Cambridge Station Apartments II), FNMA, 5.25%, 2039 (a) | 1,465,000 | 1,324,463 | ||||
Michigan Housing Development Authority, GNMA, 5.2%, 2038 | 1,200,000 | 1,095,252 | ||||
MuniMae TE Bond Subsidiary LLC, “A-2”, 4.9%, 2049 (n) | 2,000,000 | 1,993,400 | ||||
North Charleston, SC, Housing Authority Rev. (Horizon Village), “A”, FHA, 5.15%, 2048 | 305,000 | 269,681 | ||||
Seattle, WA, Housing Authority Rev., Capped Fund Program (High Rise Rehab), “I”, FSA, 5%, 2025 | 2,085,000 | 1,941,052 | ||||
$ | 16,253,902 | |||||
Parking - 0.1% | ||||||
Rail Connections, Inc., MA, Rev., “B”, 0%, 2009 (c) | $ | 375,000 | $ | 255,026 | ||
Rail Connections, Inc., MA, Rev., “B”, 0%, 2009 (c) | 550,000 | 349,982 | ||||
Rail Connections, Inc., MA, Rev., “B”, 0%, 2009 (c) | 1,185,000 | 705,075 | ||||
Rail Connections, Inc., MA, Rev., “B”, 0%, 2009 (c) | 300,000 | 167,178 | ||||
$ | 1,477,261 |
23
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Sales & Excise Tax Revenue - 2.7% | ||||||
Austin, TX, Town Community Events Center Venue, FGIC, 6%, 2009 (c) | $ | 1,015,000 | $ | 1,078,742 | ||
Central, WA, Puget Sound Regional Transportation Authority, “A”, 5%, 2036 | 10,000,000 | 9,939,400 | ||||
Illinois Sales Tax Rev., “P”, 6.5%, 2022 | 5,000,000 | 6,032,900 | ||||
Massachusetts Bay Transportation Authority Sales Tax Rev., 5%, 2031 | 5,250,000 | 5,285,595 | ||||
Massachusetts Bay Transportation Authority Sales Tax Rev., “A-2”, 0%, 2028 | 6,930,000 | 2,109,631 | ||||
Metropolitan Atlanta, GA, Rapid Transit Authority Rev., 6.25%, 2018 | 4,580,000 | 5,264,298 | ||||
Metropolitan Pier & Expo, IL, McCormick Place Expansion, MBIA, 5.25%, 2042 | 3,340,000 | 3,356,299 | ||||
$ | 33,066,865 | |||||
Single Family Housing - Local - 3.8% | ||||||
Adams County, CO, Single Family Mortgage Rev., ETM, 8.875%, 2011 (c) | $ | 2,510,000 | $ | 3,013,280 | ||
Brevard County, FL, Housing Finance Authority Rev. “B”, GNMA, 6.5%, 2022 | 126,000 | 127,166 | ||||
Calcasieu Parish, LA, Public Trust Authority, Single Family Mortgage Rev., “A”, GNMA, 6.05%, 2032 | 2,030,000 | 2,076,528 | ||||
California Rural Home Mortgage Finance Authority Rev., GNMA, 6.55%, 2030 | 355,000 | 360,598 | ||||
California Rural Home Mortgage Finance Authority Rev., GNMA, 7.3%, 2031 | 30,000 | 30,575 | ||||
Chicago, IL, Single Family Mortgage Rev., “A”, GNMA, 5.5%, 2043 | 2,495,000 | 2,518,777 | ||||
Chicago, IL, Single Family Mortgage Rev., “B”, GNMA, 6%, 2033 | 465,000 | 475,816 | ||||
Chicago, IL, Single Family Mortgage Rev., “C”, GNMA, 7.05%, 2030 | 35,000 | 35,466 | ||||
Chicago, IL, Single Family Mortgage Rev., “C”, GNMA, 7%, 2032 | 75,000 | 76,529 | ||||
Chicago, IL, Single Family Mortgage Rev., “C”, GNMA, 5.5%, 2038 | 1,500,000 | 1,476,000 | ||||
Chicago, IL, Single Family Mortgage Rev., “C”, GNMA, 5.75%, 2042 | 3,720,000 | 3,784,505 | ||||
Cook County, IL, Single Family Mortgage Rev., “A”, 0%, 2015 | 285,000 | 74,949 | ||||
Denver, CO, Single Family Mortgage Rev., GNMA, 7.3%, 2031 | 80,000 | 80,124 | ||||
Escambia County, FL, Single Family Housing Rev., GNMA, 6.95%, 2024 | 165,000 | 168,661 | ||||
Jefferson Parish, LA, Single Family Mortgage Rev., “B-1”, GNMA, 6.625%, 2023 | 530,000 | 550,628 | ||||
Jefferson Parish, LA, Single Family Mortgage Rev., “B-1”, GNMA, 6.75%, 2030 | 675,000 | 687,953 |
24
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Single Family Housing - Local - continued | ||||||
Jefferson Parish, LA, Single Family Mortgage Rev., “D-1”, GNMA, 7.5%, 2026 | $ | 95,000 | $ | 96,283 | ||
Lubbock, TX, Housing Finance Corp. Rev., GNMA, 6.1%, 2030 | 1,075,000 | 1,108,314 | ||||
Manatee County, FL, Housing Finance Mortgage Rev., Single Family, Sub-Series 2, GNMA, 6.5%, 2023 | 80,000 | 82,735 | ||||
Manatee County, FL, Housing Finance Mortgage Rev., Single Family, Sub-Series 3, GNMA, 5.3%, 2028 | 565,000 | 567,102 | ||||
Manatee County, FL, Housing Finance Mortgage Rev., Single Family, Sub-Series 3, GNMA, 5.4%, 2029 | 190,000 | 191,556 | ||||
Maricopa County, AZ, Single Family Mortgage Rev., “B”, GNMA, 6.2%, 2034 | 55,000 | 55,267 | ||||
Nortex Housing Financing Corp., TX, Single Family Mortgage Rev., “A”, GNMA, 5.5%, 2038 | 3,345,000 | 3,378,015 | ||||
Oklahoma County, OK, Home Finance Authority, Single Family Mortgage Rev., “A”, GNMA, 5.4%, 2038 | 2,430,000 | 2,438,845 | ||||
Permian Basin Housing Finance Corp., TX, Single Family Mortgage Backed Securities (Mortgage Backed Project) “A”, GNMA, 5.65%, 2038 | 1,815,000 | 1,876,656 | ||||
Pima County, AZ, Industrial Development Authority Rev., “B-1”, GNMA, 7.05%, 2030 | 300,000 | 306,294 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A”, GNMA, 6.45%, 2029 | 620,000 | 620,242 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A”, GNMA, 5.9%, 2035 | 895,000 | 933,181 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A”, GNMA, 6.25%, 2035 | 395,000 | 408,762 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A”, GNMA, 5.8%, 2036 | 2,650,000 | 2,700,933 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A”, GNMA, 5.45%, 2038 | 4,465,000 | 4,526,394 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-1”, GNMA, 6.875%, 2026 | 50,000 | 50,123 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-1”, GNMA, 5.75%, 2037 | 840,000 | 839,328 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-3”, GNMA, 6%, 2035 | 1,110,000 | 1,136,707 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-3”, GNMA, 5.5%, 2037 | 1,480,000 | 1,501,120 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-4”, GNMA, 5.85%, 2037 | 340,000 | 341,911 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-5”, GNMA, 5.8%, 2027 | 1,005,000 | 1,021,773 |
25
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Single Family Housing - Local - continued | ||||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-5”, GNMA, 5.7%, 2036 | $ | 2,250,000 | $ | 2,262,083 | ||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “A-5”, GNMA, 5.9%, 2037 | 610,000 | 616,185 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “B-2”, GNMA, 6.45%, 2033 | 930,000 | 961,648 | ||||
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev., “B-4”, GNMA, 5.55%, 2038 | 1,985,000 | 1,958,917 | ||||
St. Tammany Parish, LA, Single Family Mortgage Rev. (Home Ownership Program), “A”, GNMA, 5.25%, 2039 | 1,188,025 | 1,125,083 | ||||
$ | 46,643,012 | |||||
Single Family Housing - State - 2.3% | ||||||
California Housing Finance Agency Rev., Home Mortgage, FSA, 0%, 2019 | $ | 3,610,000 | $ | 1,708,180 | ||
California Housing Finance Agency Rev., Home Mortgage, MBIA, 0%, 2028 | 2,445,000 | 775,407 | ||||
Colorado Housing & Finance Authority Rev., 6.05%, 2016 | 160,000 | 162,344 | ||||
Colorado Housing & Finance Authority Rev., 7.45%, 2016 | 120,000 | 121,450 | ||||
Colorado Housing & Finance Authority Rev., 6.875%, 2028 | 25,000 | 25,267 | ||||
Colorado Housing & Finance Authority Rev., 6.8%, 2030 | 215,000 | 217,739 | ||||
Colorado Housing & Finance Authority Rev. (Single Family Program), “C-2”, 8.4%, 2021 | 95,000 | 98,978 | ||||
Colorado Housing & Finance Authority Rev. (Single Family Project), “B-2”, 7.25%, 2031 | 230,000 | 239,784 | ||||
Colorado Housing & Finance Authority Rev., “A-1”, 7.4%, 2027 | 10,000 | 10,018 | ||||
Colorado Housing & Finance Authority Rev., “A-2”, 7.15%, 2014 | 3,000 | 3,034 | ||||
Colorado Housing & Finance Authority Rev., “A-2”, AMBAC, 6.6%, 2028 | 905,000 | 901,652 | ||||
Colorado Housing & Finance Authority Rev., “B-2”, 6.1%, 2023 | 85,000 | 89,088 | ||||
Colorado Housing & Finance Authority Rev., “B-3”, 6.55%, 2025 | 39,000 | 39,892 | ||||
Colorado Housing & Finance Authority Rev., “B-3”, 6.55%, 2033 | 80,000 | 80,763 | ||||
Colorado Housing & Finance Authority Rev., “C-2”, 5.9%, 2023 | 565,000 | 578,283 | ||||
Colorado Housing & Finance Authority Rev., “C-2”, FHA, 6.6%, 2032 | 530,000 | 550,357 | ||||
Colorado Housing & Finance Authority Rev., “C-3”, 6.75%, 2021 | 160,000 | 165,710 | ||||
Colorado Housing & Finance Authority Rev., “C-3”, FHA, 6.375%, 2033 | 60,000 | 61,954 | ||||
Delaware Housing Authority Rev. (Single Family), “C”, 6.25%, 2037 | 1,895,000 | 1,959,601 | ||||
Louisiana Housing Finance Agency, Single Family Mortgage Rev., GNMA, 6.4%, 2032 | 125,000 | 126,303 | ||||
Louisiana Housing Finance Agency, Single Family Mortgage Rev., GNMA, 6.375%, 2033 | 530,000 | 535,703 |
26
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Single Family Housing - State - continued | ||||||
Louisiana Housing Finance Agency, Single Family Mortgage Rev., “B-2”, GNMA, 7.55%, 2031 | $ | 160,000 | $ | 166,358 | ||
Mississippi Home Corp. Rev., Single Family Rev., “A”, GNMA, 6.1%, 2034 | 1,915,000 | 1,975,974 | ||||
Missouri Housing Development Commission, Single Family Mortgage Rev. (Home Loan Program), GNMA, 7.45%, 2031 | 90,000 | 92,335 | ||||
Missouri Housing Development Commission, Single Family Mortgage Rev. (Home Loan Program), GNMA, 6.35%, 2032 | 140,000 | 142,708 | ||||
Missouri Housing Development Commission, Single Family Mortgage Rev. (Home Loan Program), GNMA, 6.85%, 2032 | 330,000 | 341,154 | ||||
Missouri Housing Development Commission, Single Family Mortgage Rev. (Home Loan Program), GNMA, 6.75%, 2034 | 310,000 | 316,547 | ||||
Missouri Housing Development Commission, Single Family Mortgage Rev. (Home Loan Program), “B”, GNMA, 6.7%, 2030 | 680,000 | 699,380 | ||||
New Hampshire Housing Finance Authority Rev., 6.85%, 2030 | 455,000 | 471,403 | ||||
New Hampshire Housing Finance Authority Rev., “B”, 5.875%, 2030 | 340,000 | 345,403 | ||||
New Hampshire Housing Finance Authority Rev., “B”, 6.3%, 2031 | 245,000 | 247,239 | ||||
New Hampshire Housing Finance Authority Rev., “B”, 6.5%, 2035 | 660,000 | 682,321 | ||||
New Mexico Mortgage Finance Authority Rev., GNMA, 7.1%, 2030 | 220,000 | 226,347 | ||||
New Mexico Mortgage Finance Authority Rev., GNMA, 6.8%, 2031 | 485,000 | 486,795 | ||||
New Mexico Mortgage Finance Authority Rev., GNMA, 6.25%, 2032 | 1,070,000 | 1,081,042 | ||||
New Mexico Mortgage Finance Authority Rev., “B-2”, GNMA, 6.35%, 2033 | 570,000 | 583,412 | ||||
New Mexico Mortgage Finance Authority Rev., “I”, GNMA, 5.75%, 2038 | 1,990,000 | 2,041,521 | ||||
New Mexico Mortgage Finance Authority Rev., “N”, GNMA, 5.95%, 2037 | 1,755,000 | 1,795,277 | ||||
Ohio Housing Finance Agency Mortgage Rev., Residential Mortgage Backed, “C”, GNMA, 5.9%, 2035 | 1,380,000 | 1,392,047 | ||||
Oklahoma Housing Finance Agency Rev., 6.8%, 2016 | 70,000 | 70,892 | ||||
Oklahoma Housing Finance Agency Rev., 6.65%, 2029 | 220,000 | 226,820 | ||||
Oregon Health & Community Services (Single Family Mortgage), “B”, 6.25%, 2031 | 2,365,000 | 2,443,731 | ||||
Texas Affordable Housing Corp. (Single Family Mortgage), “B”, GNMA, 5.25%, 2039 | 520,000 | 480,251 | ||||
Texas Housing & Community Affairs, Residential Mortgage Rev., GNMA, 7.1%, 2021 | 3,810,000 | 3,934,435 | ||||
Washington Housing Finance Commission Rev., Single Family Housing, GNMA, 5%, 2023 | 370,000 | 369,859 | ||||
$ | 29,064,758 |
27
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Solid Waste Revenue - 0.5% | ||||||
Delaware County, PA, Industrial Development Authority, Resource Recovery Facilities Rev. (American Ref-Fuel Co.), “A”, 6.2%, 2019 | $ | 1,750,000 | $ | 1,753,220 | ||
Hudson County, NJ, Solid Waste System Rev., 5.9%, 2015 | 780,000 | 780,172 | ||||
Massachusetts Development Finance Agency, Resource Recovery Rev. (Ogden Haverhill Associates), “A”, 6.7%, 2014 | 2,615,000 | 2,738,951 | ||||
Massachusetts Industrial Finance Agency, Resource Recovery Rev. (Ogden Haverhill Associates), “A”, 5.6%, 2019 | 1,000,000 | 985,630 | ||||
$ | 6,257,973 | |||||
State & Agency - Other - 0.2% | ||||||
Commonwealth of Puerto Rico (Mepsi Campus), “A”, 6.25%, 2024 | $ | 600,000 | $ | 580,836 | ||
Commonwealth of Puerto Rico (Mepsi Campus), “A”, 6.5%, 2037 | 1,200,000 | 1,134,084 | ||||
Massachusetts Development Finance Agency (Visual & Performing Arts), 6%, 2021 | 1,000,000 | 1,163,890 | ||||
$ | 2,878,810 | |||||
State & Local Agencies - 8.3% | ||||||
Alabama Building Renovation Authority, AMBAC, 6%, 2015 | $ | 1,610,000 | $ | 1,706,616 | ||
Alabama Building Renovation Authority, AMBAC, 6%, 2016 | 1,705,000 | 1,802,901 | ||||
Alabama Building Renovation Authority, AMBAC, 6%, 2018 | 760,000 | 800,272 | ||||
Alabama Public School & College, Capital Improvement, “D”, 6%, 2015 | 2,850,000 | 3,005,268 | ||||
Allen County, IN, Jail Building Corp., First Mortgage, 5.75%, 2011 (c) | 2,750,000 | 3,023,460 | ||||
Chicago, IL, Public Building Commission Rev., FGIC, 5.25%, 2016 | 3,000,000 | 3,233,340 | ||||
Delaware Valley, PA, Regional Finance Authority, RITES, AMBAC, 8.22%, 2018 (p) | 16,250,000 | 19,501,300 | ||||
Fayette County, GA (Criminal Justice Center), 6.25%, 2010 (c) | 1,000,000 | 1,092,510 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A”, FSA, 0% to 2010, 4.55% to 2022 | 3,415,000 | 2,823,522 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, AMBAC, 0% to 2010, 4.6% to 2023 | 995,000 | 804,139 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “A”, 5%, 2045 | 2,475,000 | 2,222,352 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Enhanced, “B”, 5.5%, 2013 (c) | 5,000,000 | 5,495,450 | ||||
New York Dormitory Authority Rev. (City University), 5.75%, 2013 | 5,000,000 | 5,424,150 | ||||
Palm Springs, CA, Finance Lease Rev. (Convention Center), “A”, MBIA, 5.5%, 2035 | 7,000,000 | 7,221,690 | ||||
Pennsylvania Convention Center Authority Rev., ETM, FGIC, 6.7%, 2016 (c) | 26,195,000 | 29,812,006 | ||||
San Bernardino, CA, Joint Powers Financing Authority Lease Rev. (California Department of Transportation), 5.5%, 2014 | 10,000,000 | 10,033,000 |
28
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
State & Local Agencies - continued | ||||||
Virginia College Building Authority, VA, Public Higher Education Financing, “A”, 5.75%, 2009 (c) | $ | 2,295,000 | $ | 2,413,124 | ||
West Valley City, Utah Municipal Building Lease Rev., “A”, AMBAC, 5.5%, 2012 (c) | 2,000,000 | 2,219,440 | ||||
$ | 102,634,540 | |||||
Student Loan Revenue - 0.6% | ||||||
Access to Loans for Learning, California Student Loan Rev., 7.95%, 2030 | $ | 650,000 | $ | 657,300 | ||
Arizona Student Loan Acquisition Authority Rev., 5.8%, 2016 | 3,175,000 | 3,296,253 | ||||
Arizona Student Loan Acquisition Authority Rev., 5.85%, 2017 | 3,500,000 | 3,630,865 | ||||
Massachusetts Educational Financing Authority, Refunding Issue G, “A”, MBIA, 6.1%, 2018 | 425,000 | 430,087 | ||||
$ | 8,014,505 | |||||
Tax - Other - 1.1% | ||||||
Black Hawk, CO, Device Tax Rev., 5%, 2010 | $ | 20,000 | $ | 20,192 | ||
Black Hawk, CO, Device Tax Rev., 5%, 2013 | 15,000 | 14,919 | ||||
Black Hawk, CO, Device Tax Rev., 5%, 2015 | 45,000 | 43,825 | ||||
Illinois Dedicated Tax Rev. (Civic Center), AMBAC, 6.25%, 2011 | 3,640,000 | 3,879,330 | ||||
New Jersey Economic Development Authority Rev. (Cigarette Tax), 5.5%, 2024 | 1,160,000 | 1,117,486 | ||||
New Jersey Economic Development Authority Rev. (Cigarette Tax), 5.75%, 2029 | 2,090,000 | 2,012,837 | ||||
New Jersey Economic Development Authority Rev. (Cigarette Tax), 5.5%, 2031 | 930,000 | 858,874 | ||||
New Jersey Economic Development Authority Rev. (Cigarette Tax), 5.75%, 2034 | 1,395,000 | 1,322,669 | ||||
New York, NY, Transitional Finance Authority Rev., Future Tax Secured, “A”, 6%, 2009 (c) | 2,000,000 | 2,124,480 | ||||
Virgin Islands Public Finance Authority Rev., “A”, 5.5%, 2022 | 2,000,000 | 2,010,620 | ||||
$ | 13,405,232 | |||||
Tax Assessment - 1.2% | ||||||
Fishhawk Community Development District, FL, 5.125%, 2009 | $ | 140,000 | $ | 139,002 | ||
Grand Bay at Doral Community Development, FL, “B”, 6%, 2017 | 2,800,000 | 2,576,952 | ||||
Greyhawk Landing Community Development District, FL, Special Assessment, “B”, 6.25%, 2009 | 50,000 | 49,833 | ||||
Heritage Harbour North Community Development District, FL, Capital Improvement Rev., 6.375%, 2038 | 925,000 | 827,431 | ||||
Homestead 50 Community Development District, FL, “A”, 6%, 2037 | 1,820,000 | 1,541,795 | ||||
Homestead 50 Community Development District, FL, “B”, 5.9%, 2013 | 815,000 | 770,868 |
29
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Tax Assessment - continued | ||||||
Katy, TX, Development Authority Rev., “B”, 5.8%, 2011 | $ | 660,000 | $ | 660,304 | ||
Katy, TX, Development Authority Rev., “B”, 6%, 2018 | 1,200,000 | 1,161,816 | ||||
Killarney Community Development District, FL, Special Assessment, “B”, 5.125%, 2009 | 115,000 | 112,641 | ||||
Lakes by the Bay South Community Development District, FL, Rev., “B”, 5.3%, 2009 | 150,000 | 148,851 | ||||
Lancaster County, SC, Assessment Rev. (Sun City Carolina Lakes), 5.45%, 2037 | 50,000 | 40,101 | ||||
Magnolia Park Community Development District, FL, Special Assessment Rev., “A”, 6.15%, 2039 | 1,420,000 | 1,234,236 | ||||
Main Street Community Development District, FL, “A”, 6.8%, 2038 | 585,000 | 578,308 | ||||
Main Street Community Development District, FL, “B”, 6.9%, 2017 | 1,210,000 | 1,201,082 | ||||
Noblesville, IN, Redevelopment Authority Lease Rental, 5.25%, 2025 | 2,000,000 | 2,001,180 | ||||
Panther Trace II, Community Development District, FL, Special Assessment, “B”, 5%, 2010 | 315,000 | 302,567 | ||||
Parkway Center, Community Development District, FL, Special Assessment, “B”, 5.625%, 2014 | 800,000 | 738,760 | ||||
Preserve at Wilderness Lake, FL, Community Development District, Capital Improvement, “B”, 5%, 2009 | 25,000 | 24,722 | ||||
Renaissance Community Development District, FL, Special Assessment, “B”, 6.25%, 2008 | 90,000 | 89,924 | ||||
Tolomato Community Development District, FL, Special Assessment Rev., 6.65%, 2040 | 660,000 | 617,859 | ||||
Tuscany Reserve Community Development District, FL, Special Assessment, “B”, 5.25%, 2016 | 155,000 | 133,720 | ||||
Washington County, PA, Redevelopment Authority (Victory Centre Project), “A”, 5.45%, 2035 | 120,000 | 103,532 | ||||
$ | 15,055,484 | |||||
Tobacco - 2.6% | ||||||
Badger, WI, Tobacco Asset Securitization Corp., 6.125%, 2027 | $ | 2,830,000 | $ | 2,835,943 | ||
Buckeye, OH, Tobacco Settlement Rev., Asset Backed, “A-2”, 5.875%, 2030 | 3,100,000 | 2,862,757 | ||||
Buckeye, OH, Tobacco Settlement Rev., Asset Backed, “A-2”, 5.875%, 2047 | 1,500,000 | 1,319,820 | ||||
Buckeye, OH, Tobacco Settlement Rev., Asset Backed, “A-2”, 6.5%, 2047 | 3,625,000 | 3,500,590 | ||||
California County, CA, Tobacco Securitization Agency, Capital Appreciation Asset Backed (Gold Country), 0%, 2033 | 7,180,000 | 1,271,434 | ||||
Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, “A”, 0%, 2050 | 14,000,000 | 697,480 |
30
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Tobacco - continued | ||||||
Children’s Trust Fund, Tobacco Settlement Rev., Puerto Rico, “B”, 0%, 2055 | $ | 2,000,000 | $ | 63,440 | ||
District of Columbia, Tobacco Settlement, 6.25%, 2024 | 1,260,000 | 1,265,103 | ||||
District of Columbia, Tobacco Settlement, Capital Appreciation, “A”, 0%, 2046 | 9,730,000 | 601,703 | ||||
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 6.25%, 2013 (c) | 2,800,000 | 3,054,156 | ||||
Guam Economic Development Authority, 5%, 2011 (c) | 35,000 | 37,282 | ||||
Inland Empire, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., Asset Backed, “C-1”, 0%, 2036 | 1,580,000 | 213,221 | ||||
Iowa Tobacco Settlement Authority, Tobacco Settlement Rev., Asset Backed, “B”, 5.6%, 2034 | 3,070,000 | 2,759,807 | ||||
Louisiana Tobacco Settlement Authority Rev., 5.5%, 2030 | 1,650,000 | 1,564,134 | ||||
Michigan Tobacco Settlement Finance Authority Rev., Asset Backed, “A”, 6%, 2048 | 2,940,000 | 2,688,424 | ||||
New Jersey Tobacco Settlement Financing Corp., 5.75%, 2012 (c) | 2,680,000 | 2,898,822 | ||||
Rhode Island Tobacco Settlement Financing Corp., “A”, 0%, 2052 | 7,360,000 | 273,056 | ||||
Silicon Valley Tobacco Securitization Authority, CA, Tobacco Settlement Rev. (Turbo-Santa Clara), “A”, 0%, 2036 | 4,405,000 | 579,213 | ||||
Silicon Valley Tobacco Securitization Authority, CA, Tobacco Settlement Rev. (Turbo-Santa Clara), “A”, 0%, 2041 | 3,600,000 | 326,592 | ||||
South Carolina Tobacco Settlement Authority Rev., “B”, 6.375%, 2028 | 2,000,000 | 1,980,540 | ||||
Virginia Tobacco Settlement Financing Corp., “B-1”, 5%, 2047 | 715,000 | 565,014 | ||||
Washington Tobacco Settlement Authority, 6.5%, 2026 | 220,000 | 226,389 | ||||
$ | 31,584,920 | |||||
Toll Roads - 1.3% | ||||||
E-470 Public Highway Authority Rev., Capital Appreciation “B”, MBIA, 0%, 2010 (c) | $ | 5,000,000 | $ | 3,059,850 | ||
New Jersey Turnpike Authority Rev., MBIA, 5.375%, 2010 (c)(u) | 10,000,000 | 10,533,000 | ||||
New Jersey Turnpike Authority Rev., “C”, MBIA, 6.5%, 2016 | 235,000 | 269,620 | ||||
New Jersey Turnpike Authority Rev., “C”, ETM, MBIA, 6.5%, 2016 (c) | 80,000 | 92,158 | ||||
Northwest Parkway Public Highway Authority Rev., CO, “C”, FSA, 0%, 2016 | 1,000,000 | 907,410 | ||||
San Joaquin Hills, CA, Transportation Corridor Agency, Toll Road Rev., ETM, 0%, 2009 (c) | 1,000,000 | 985,290 | ||||
$ | 15,847,328 | |||||
Transportation - Special Tax - 3.7% | ||||||
Allegheny County, PA, Port Authority Special Rev., MBIA, 6.25%, 2009 (c) | $ | 1,000,000 | $ | 1,050,320 |
31
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Transportation - Special Tax - continued | ||||||
Indiana Finance Authority Highway Rev., “A”, FGIC, 4.5%, 2024 | $ | 5,000,000 | $ | 4,907,750 | ||
Jacksonville, FL, Transportation Authority, ETM, 9.2%, 2015 (c) | 2,000,000 | 2,487,940 | ||||
Metropolitan, NY, Transportation Authority Rev., AMBAC, 5%, 2030 | 5,000,000 | 5,022,400 | ||||
Metropolitan, NY, Transportation Authority Rev., “A”, FSA, 5%, 2030 | 2,750,000 | 2,752,090 | ||||
Metropolitan, NY, Transportation Authority Rev., ETM, 5.75%, 2013 (c) | 5,600,000 | 6,014,400 | ||||
New Jersey Transportation Trust Fund Authority Rev., FSA, 5.5%, 2011 (u) | 15,000,000 | 16,502,100 | ||||
Pennsylvania Turnpike Commission Oil, “A”, AMBAC, 5.25%, 2018 | 180,000 | 183,625 | ||||
Pennsylvania Turnpike Commission Oil, “A”, ETM, AMBAC, 5.25%, 2018 (c) | 1,150,000 | 1,184,431 | ||||
Puerto Rico Highway & Transportation Authority Rev., ASSD GTY, 5.25%, 2034 | 4,570,000 | 4,715,235 | ||||
Utah Transis Authority Sales Tax Rev., “A”, MBIA, 0%, 2028 | 2,225,000 | 716,361 | ||||
�� | $ | 45,536,652 | ||||
Universities - Colleges - 6.9% | ||||||
Amherst, NY, Industrial Development Agency Rev. (Daemen College), “A”, 6%, 2011 (c) | $ | 1,000,000 | $ | 1,131,150 | ||
Anderson, IN, Economic Development Rev. (Anderson University Project), 5%, 2028 | 580,000 | 517,128 | ||||
Anderson, IN, Economic Development Rev. (Anderson University Project), 5%, 2032 | 400,000 | 347,616 | ||||
California Municipal Finance Authority Rev. (Biola University), 5.8%, 2028 | 800,000 | 792,432 | ||||
California St. University Rev.,”A”, AMBAC, 5%, 2026 | 6,795,000 | 6,871,444 | ||||
California Statewide Communities Development Authority Rev. (California Baptist University), “A”, 5.5%, 2038 | 280,000 | 257,191 | ||||
Chabot-Las Positas Community College District, CA, “C”, AMBAC, 0%, 2035 | 8,750,000 | 1,767,238 | ||||
College of Charleston, SC, Academic & Administrative Facilities Rev., “B”, XLCA, 5.125%, 2034 | 2,400,000 | 2,260,488 | ||||
Foothill-DE Anza Community College District, CA, Capital Appreciation, “B”, AMBAC, 0%, 2032 | 4,610,000 | 1,088,098 | ||||
Foothill-DE Anza Community College District, CA, Capital Appreciation, “B”, AMBAC, 0%, 2033 | 3,925,000 | 869,937 | ||||
Foothill-DE Anza Community College District, CA, Capital Appreciation, “B”, AMBAC, 0%, 2034 | 5,130,000 | 1,071,452 | ||||
Harrisburg, PA, University of Science, “A”, 5.4%, 2016 | 150,000 | 146,822 | ||||
Houston, TX, Community College Systems, MBIA, 7.875%, 2025 | 1,650,000 | 1,898,919 |
32
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Universities - Colleges - continued | ||||||
Los Angeles, CA, Community College, “B”, FSA, 5%, 2027 | $ | 5,000,000 | $ | 5,112,200 | ||
Lubbock, TX, Educational Facilities Authority Rev. (Lubbock Christian University), 5.125%, 2027 | 1,930,000 | 1,742,095 | ||||
Lubbock, TX, Educational Facilities Authority Rev. (Lubbock Christian University), 5.25%, 2037 | 865,000 | 756,244 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Loyola College), “A”, 5.125%, 2045 | 1,355,000 | 1,289,093 | ||||
Massachusetts Development Finance Agency Rev. (Boston University), XLCA, 6%, 2059 | 6,225,000 | 6,298,580 | ||||
Massachusetts Development Finance Agency Rev. (Massachusetts College of Pharmacy), “B”, 6.625%, 2010 (c) | 450,000 | 487,881 | ||||
Massachusetts Development Finance Agency Rev. (Olin College), “B”, XLCA, 5.25%, 2033 | 2,000,000 | 1,939,980 | ||||
Massachusetts Development Finance Agency Rev. (Smith College), 5%, 2035 | 2,245,000 | 2,228,320 | ||||
Massachusetts Health & Educational Facilities Authority Rev. (Harvard University), 6.25%, 2020 (u) | 16,820,000 | 20,237,151 | ||||
Northern Illinois University Rev., Auxiliary Facilities Systems, AMBAC, 5.875%, 2018 | 1,370,000 | 1,401,126 | ||||
Ohio State University, 6%, 2009 (c) | 500,000 | 536,655 | ||||
Rhode Island, Health & Educational Building Corp. (Rhode Island School of Design), “D”, XLCA, 5.5%, 2035 | 9,140,000 | 9,401,038 | ||||
San Mateo County, CA (Community College District, 2005 Election), “A”, MBIA, 0%, 2026 | 5,100,000 | 1,858,083 | ||||
Savannah, GA, Economic Development Authority Rev. (College of Art & Design, Inc.), 6.5%, 2009 (c) | 500,000 | 540,885 | ||||
St. Joseph County, IN, Educational Facilities Rev. (University of Notre Dame), 6.5%, 2026 | 1,000,000 | 1,216,270 | ||||
University of Akron, OH, General Receipts, FGIC, 6%, 2010 (c) | 1,000,000 | 1,068,200 | ||||
University of California, “A”, MBIA, 4.5%, 2037 | 8,545,000 | 7,681,015 | ||||
Upland, IN, Economic Development Rev. (Taylor University), 6%, 2018 | 435,000 | 472,536 | ||||
Upland, IN, Economic Development Rev. (Taylor University), 6.25%, 2023 | 520,000 | 555,916 | ||||
Virginia College Building Authority, Educational Facilities Rev., 5%, 2026 | 2,000,000 | 1,834,760 | ||||
$ | 85,677,943 | |||||
Universities - Dormitories - 0.2% | ||||||
California Statewide Communities Development Authority Rev. (California Baptist University), “A”, 5.4%, 2027 | $ | 245,000 | $ | 229,526 | ||
California Statewide Communities Development Authority Rev. (Lancer Educational Student Housing Project), 5.625%, 2033 | 1,025,000 | 923,853 |
33
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Universities - Dormitories - continued | ||||||
Georgia Private College & University Authority Rev. (Mercer Housing Corp.), “A”, 6%, 2021 | $ | 1,000,000 | $ | 1,012,800 | ||
$ | 2,166,179 | |||||
Universities - Secondary Schools - 0.7% | ||||||
California Statewide Communities Development Authority Rev. (Escondido Charter High School), 7.5%, 2011 (c) | $ | 500,000 | $ | 587,650 | ||
District of Columbia Rev. (Gonzaga College High School), FSA, 5.25%, 2032 | 3,500,000 | 3,561,180 | ||||
Maine Finance Authority, Educational Rev. (Waynflete School), 6.4%, 2019 | 1,000,000 | 1,033,700 | ||||
Maine Finance Authority, Educational Rev. (Waynflete School), 6.5%, 2024 | 1,500,000 | 1,548,540 | ||||
Maine Finance Authority, Educational Rev. (Waynflete School), 6.5%, 2029 | 1,000,000 | 1,027,930 | ||||
Maryland Health & Higher Educational Facilities Authority Rev. (Washington Christian Academy), 5.5%, 2038 | 100,000 | 82,090 | ||||
Michigan Municipal Bond Authority Rev. (YMCA Service Learning Academy), 7.625%, 2021 | 400,000 | 412,860 | ||||
New Hampshire Health & Education (Derryfield School), 6.5%, 2010 | 140,000 | 142,653 | ||||
Pima County, AZ, Industrial Development Authority Education Rev. (Arizona Charter Schools), “C”, 6.75%, 2031 | 490,000 | 496,458 | ||||
$ | 8,893,061 | |||||
Utilities - Investor Owned - 1.9% | ||||||
Apache County, AZ, Industrial Development Authority, Pollution Control Rev. (Tucson Electric Power Co.), 5.875%, 2033 | $ | 1,000,000 | $ | 916,430 | ||
Brazos River Authority, TX, Pollution Control Rev. (TXU Electric Co. LLC), “C”, 5.75%, 2036 (a) | 1,265,000 | 1,196,930 | ||||
California Pollution Control Financing Authority, Pollution Control Rev. (Pacific Gas & Electric Co.), MBIA, 5.35%, 2016 | 1,600,000 | 1,640,800 | ||||
Farmington, NM, Pollution Control Rev. (New Mexico Public Service), 6.375%, 2022 | 1,000,000 | 1,004,040 | ||||
Farmington, NM, Pollution Control Rev. (Public Service New Mexico), “A”, 6.3%, 2016 | 565,000 | 568,062 | ||||
Farmington, NM, Pollution Control Rev. (Public Service New Mexico), “A”, 5.8%, 2022 | 500,000 | 492,940 | ||||
Farmington, NM, Pollution Control Rev. (Public Service New Mexico), “C”, 5.8%, 2022 | 4,880,000 | 4,811,094 | ||||
Matagorda County, TX, Pollution Control Rev. (Reliant Energy), 5.95%, 2030 | 750,000 | 711,188 |
34
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Utilities - Investor Owned - continued | ||||||
Mecklenburg County, VA, Industrial Development Authority Rev. (UAE Mecklenburg LP), 6.5%, 2017 | $ | 700,000 | $ | 748,538 | ||
New Hampshire Industrial Development Authority, Pollution Control Rev. (Connecticut Light & Power), 5.9%, 2016 | 4,000,000 | 4,023,640 | ||||
New Hampshire Industrial Development Authority, Pollution Control Rev. (Connecticut Light & Power), 5.9%, 2018 | 1,000,000 | 1,014,150 | ||||
Red River, TX, Authority Pollution Control (AEP Texas Central Co.), MBIA, 4.45%, 2020 | 2,410,000 | 2,354,546 | ||||
Sabine River Authority, TX, Pollution Control Rev. (TXU Electric Co. LLC), 5.75%, 2030 (a) | 1,500,000 | 1,419,285 | ||||
Sabine River Authority, TX, Pollution Control Rev. (TXU Electric Co.) “A”, 5.5%, 2022 (a) | 500,000 | 472,220 | ||||
West Feliciana Parish, LA, Pollution Control Rev. (Entergy Gulf States), 6.6%, 2028 | 1,665,000 | 1,661,171 | ||||
$ | 23,035,034 | |||||
Utilities - Municipal Owned - 9.8% | ||||||
Austin, TX, Utility Systems Rev., AMBAC, 6.75%, 2011 | $ | 1,500,000 | $ | 1,699,065 | ||
Austin, TX, Utility Systems Rev., AMBAC, 6.75%, 2012 | 2,500,000 | 2,886,100 | ||||
Georgia Municipal Electric Authority Power Rev., AMBAC, 6.5%, 2014 (c) | 145,000 | 170,701 | ||||
Georgia Municipal Electric Authority Power Rev., MBIA, 6.375%, 2016 | 2,000,000 | 2,378,020 | ||||
Georgia Municipal Electric Authority Power Rev., AMBAC, 6.5%, 2017 | 8,000,000 | 9,359,040 | ||||
Georgia Municipal Electric Authority Power Rev., AMBAC, 6.5%, 2017 (c) | 365,000 | 429,744 | ||||
Georgia Municipal Electric Authority Power Rev., MBIA, 6.5%, 2020 | 7,350,000 | 8,793,173 | ||||
Hawaii Department of Budget & Finance Rev. (Electric Co. & Subsidiary), “B”, XLCA, 5%, 2022 | 4,000,000 | 4,008,760 | ||||
Intermountain Power Agency, UT, “A”, ETM, 6.15%, 2014 (c) | 27,825,000 | 28,112,154 | ||||
Mercer County, ND, Pollution Control Rev. (Antelope Valley Station), AMBAC, 7.2%, 2013 | 4,000,000 | 4,498,880 | ||||
North Carolina Eastern Municipal Power Agency, “A”, MBIA, 6.5%, 2018 | 9,250,000 | 10,687,728 | ||||
North Carolina Municipal Power Agency, Catawba Electric Rev., 6.375%, 2013 | 2,250,000 | 2,385,495 | ||||
North Carolina Municipal Power Agency, Catawba Electric Rev., MBIA, 5.25%, 2019 (u) | 10,000,000 | 10,429,300 | ||||
Northern California Transmission Agency, MBIA, 7%, 2013 | 4,000,000 | 4,557,560 | ||||
Piedmont, SC, Municipal Power Agency, FGIC, 6.25%, 2021 | 4,150,000 | 4,617,581 |
35
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Utilities - Municipal Owned - continued | ||||||
Puerto Rico Electric Power Authority Rev., FSA, 5.25%, 2008 (c)(u) | $ | 5,000,000 | $ | 5,118,250 | ||
Puerto Rico Electric Power Authority Rev., FSA, 5.25%, 2008 (c)(u) | 6,000,000 | 6,141,900 | ||||
South Carolina Public Service Authority, “B”, FSA, 5.125%, 2037 | 8,500,000 | 8,572,760 | ||||
Washington Public Power Supply System Rev. (Nuclear Project #3), 7.125%, 2016 | 5,145,000 | 6,399,351 | ||||
$ | 121,245,562 | |||||
Utilities - Other - 0.6% | ||||||
Main Street Natural Gas, Inc., GA, “A”, 5.5%, 2028 | $ | 1,740,000 | $ | 1,545,938 | ||
Salt Verde Financial Corp., AZ, Senior Gas Rev., 5%, 2032 | 3,315,000 | 2,855,972 | ||||
Salt Verde Financial Corp., AZ, Senior Gas Rev., 5%, 2037 | 3,575,000 | 3,017,550 | ||||
$ | 7,419,460 | |||||
Water & Sewer Utility Revenue - 4.2% | ||||||
Forsyth County, GA, Water & Sewer Authority Rev., 6.25%, 2010 (c) | $ | 1,170,000 | $ | 1,271,006 | ||
Forsyth County, GA, Water & Sewer Authority Rev., 6.25%, 2010 (c) | 1,000,000 | 1,086,330 | ||||
Forsyth County, GA, Water & Sewer Authority Rev., 6.25%, 2010 (c) | 1,055,000 | 1,146,078 | ||||
Hampton Roads, VA, Sanitation District Wastewater Rev., 5%, 2033 | 4,535,000 | 4,552,687 | ||||
Los Angeles County, CA, Sanitation Districts Financing Authority Rev., AMBAC, 4.5%, 2038 | 7,840,000 | 6,882,266 | ||||
Magnolia, TX, Water & Sewer System Rev., 5.15%, 2031 | 140,000 | 128,148 | ||||
Massachusetts Water Resources Authority (Charlestown Navy Yard), FSA, 5.25%, 2029 | 4,215,000 | 4,431,482 | ||||
Massachusetts Water Resources Authority, “A”, FSA, 4.375%, 2032 | 6,315,000 | 5,737,620 | ||||
Massachusetts Water Resources Authority, ETM, 6.5%, 2019 | 5,965,000 | 7,085,704 | ||||
Mississippi Development Bank Special Obligations, Grenada, MS, Water & Sewer Systems Project, “N”, FSA, 5%, 2030 | 490,000 | 492,994 | ||||
New York Environmental Facilities, 5%, 2016 | 430,000 | 435,586 | ||||
New York Environmental Facilities, ETM, 5%, 2016 (c) | 570,000 | 578,989 | ||||
New York, NY, Municipal Water & Sewer Finance Authority Rev., AMBAC, 5%, 2039 | 2,000,000 | 2,002,240 | ||||
New York, NY, Municipal Water & Sewer Finance Authority Rev., “A”, 5%, 2035 | 4,480,000 | 4,453,299 | ||||
Pittsburgh, PA, Water & Sewer Authority Rev., “C”, FSA, 5.25%, 2022 | 2,000,000 | 2,002,500 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, 6%, 2044 | 1,290,000 | 1,319,580 | ||||
Puerto Rico Commonwealth, Aqueduct & Sewer Authority Rev., “A”, 6%, 2038 | 3,580,000 | 3,676,087 | ||||
Spartanburg, SC, Water & Sewer Authority Rev., “B”, MBIA, 5.25%, 2030 | 1,175,000 | 1,194,623 | ||||
West Virginia Water Development Authority Loan Program, “B”, AMBAC, 4.75%, 2035 | 500,000 | 470,000 |
36
Table of Contents
Portfolio of Investments – continued
Issuer | Shares/Par | Value ($) | ||||
Municipal Bonds - continued | ||||||
Water & Sewer Utility Revenue - continued | ||||||
West Wilson Utility District, TN, Waterworks Rev., MBIA, 5.25%, 2014 (c) | $ | 2,210,000 | $ | 2,473,211 | ||
$ | 51,420,430 | |||||
Total Municipal Bonds (Identified Cost, $1,236,553,860) | $ | 1,260,730,406 | ||||
Floating Rate Demand Notes - 0.1% | ||||||
East Baton Rouge, LA, Pollution Control Rev. (Exxon Mobil Corp.), 1.03%, due 4/01/08 | $ | 500,000 | $ | 500,000 | ||
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), “C”, 1.17%, due 4/01/08 | 600,000 | 600,000 | ||||
Total Floating Rate Demand Notes, at Identified Cost and Value | $ | 1,100,000 | ||||
Total Investments (Identified Cost, $1,237,653,860) (k) | $ | 1,261,830,406 | ||||
Other Assets, Less Liabilities - (2.1)% | (26,126,478) | |||||
Net Assets - 100.0% | $ | 1,235,703,928 |
(a) | Mandatory tender date is earlier than stated maturity date. |
(c) | Refunded bond. |
(d) | Non-income producing security - in default. |
(f) | All or a portion of the security has been segregated as collateral for an open futures contract. |
(k) | As of March 31, 2008, the fund held securities fair valued in accordance with the policies adopted by the Board of Trustees, aggregating $1,260,730,406 and 99.91% of market value. All of these security values were provided by an independent pricing service using an evaluated bid. |
(n) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities was $6,083,094, representing 0.5% of net assets. |
(p) | Primary inverse floater. |
(u) | Underlying security deposited into special purpose trust (“the trust”) by investment banker upon creation of self-deposited inverse floaters. |
The following abbreviations are used in this report and are defined:
ETM | Escrowed to Maturity |
FRN | Floating Rate Note. Interest rate resets periodically and may not be the rate reported at period end. |
Insurers
AMBAC | AMBAC Indemnity Corp. |
ASSD GTY | Assured Guaranty Insurance Co. |
FGIC | Financial Guaranty Insurance Co. |
FHA | Federal Housing Administration |
FHLMC | Federal Home Loan Mortgage Corp. |
FNMA | Federal National Mortgage Assn. |
FSA | Financial Security Assurance Inc. |
GNMA | Government National Mortgage Assn. |
MBIA | MBIA Insurance Corp. |
PSF | Permanent School Fund |
XLCA | XL Capital Insurance Co. |
37
Table of Contents
Portfolio of Investments – continued
Inverse | Floaters |
RIBS | Residual Interest Bonds |
RITES | Residual Interest Tax-Exempt Security |
Futures contracts outstanding at 3/31/08
Description | Contracts | Value | Expiration Date | Unrealized Appreciation/ (Depreciation) | ||||
U.S. Treasury Bond 30 yr (Short) | 77 | $9,147,359 | Jun-08 | $124,061 | ||||
At March 31, 2008, the fund had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.
See Notes to Financial Statements
38
Table of Contents
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
At 3/31/08
This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.
Assets | ||||
Investments, at value (identified cost, $1,237,653,860) | $1,261,830,406 | |||
Cash | 7,059,715 | |||
Receivable for investments sold | 7,614,795 | |||
Receivable for fund shares sold | 3,575,303 | |||
Interest receivable | 18,864,272 | |||
Other assets | 15,803 | |||
Total assets | $1,298,960,294 | |||
Liabilities | ||||
Distributions payable | $1,910,298 | |||
Payable for daily variation margin on open futures contracts | 20,453 | |||
Payable for investments purchased | 12,366,242 | |||
Payable to the holder of the floating rate certificate from trust assets | 47,178,249 | |||
Payable for fund shares reacquired | 833,527 | |||
Payable to affiliates | ||||
Management fee | 40,327 | |||
Shareholder servicing costs | 94,591 | |||
Distribution and service fees | 17,627 | |||
Administrative services fee | 1,752 | |||
Payable for independent trustees’ compensation | 78,291 | |||
Payable for interest expense and fees | 568,912 | |||
Accrued expenses and other liabilities | 146,097 | |||
Total liabilities | $63,256,366 | |||
Net assets | $1,235,703,928 | |||
Net assets consist of: | ||||
Paid-in capital | $1,201,416,357 | |||
Unrealized appreciation (depreciation) on investments | 24,300,607 | |||
Accumulated net realized gain (loss) on investments | 9,698,850 | |||
Undistributed net investment income | 288,114 | |||
Net assets | $1,235,703,928 | |||
Shares of beneficial interest outstanding | 150,442,888 |
39
Table of Contents
Statement of Assets and Liabilities – continued
Class A shares | ||||
Net assets | $279,614,006 | |||
Shares outstanding | 34,055,078 | |||
Net asset value per share | $8.21 | |||
Offering price per share (100/95.25 × net asset value per share) | $8.62 | |||
Class B shares | ||||
Net assets | $22,372,118 | |||
Shares outstanding | 2,720,844 | |||
Net asset value and offering price per share | $8.22 | |||
Class C shares | ||||
Net assets | $42,758,934 | |||
Shares outstanding | 5,186,760 | |||
Net asset value and offering price per share | $8.24 | |||
Class A1 shares | ||||
Net assets | $864,341,254 | |||
Shares outstanding | 105,241,966 | |||
Net asset value per share | $8.21 | |||
Offering price per share (100/95.25 × net asset value per share) | $8.62 | |||
Class B1 shares | ||||
Net assets | $26,617,616 | |||
Shares outstanding | 3,238,240 | |||
Net asset value and offering price per share | $8.22 |
On sales of $50,000 or more, the offering price of Class A and Class A1 shares are reduced. A contingent deferred sales charge may be imposed on redemptions of Class A, Class B, Class C, Class A1, and Class B1 shares.
See Notes to Financial Statements
40
Table of Contents
Financial Statements
Year ended 3/31/08
This statement describes how much your fund earned in investment income and accrued in expenses. It also describes any gains and/or losses generated by fund operations.
Net investment income | ||||||
Interest income | $60,637,665 | |||||
Expenses | ||||||
Management fee | $5,767,536 | |||||
Distribution and service fees | 1,425,636 | |||||
Shareholder servicing costs | 736,317 | |||||
Administrative services fee | 162,093 | |||||
Independent trustees’ compensation | 27,500 | |||||
Custodian fee | 154,567 | |||||
Shareholder communications | 138,230 | |||||
Auditing fees | 74,073 | |||||
Legal fees | 26,116 | |||||
Interest expense and fees | 986,285 | |||||
Miscellaneous | 215,358 | |||||
Total expenses | $9,713,711 | |||||
Fees paid indirectly | (6,041 | ) | ||||
Reduction of expenses by investment adviser | (2,626,373 | ) | ||||
Net expenses | $7,081,297 | |||||
Net investment income | $53,556,368 | |||||
Realized and unrealized gain (loss) on investments | ||||||
Realized gain (loss) (identified cost basis) | ||||||
Investment transactions | $4,757,064 | |||||
Swap transactions | 427,481 | |||||
Net realized gain (loss) on investments | $5,184,545 | |||||
Change in unrealized appreciation (depreciation) | ||||||
Investments | $(39,043,376 | ) | ||||
Futures contracts | 124,061 | |||||
Swap transactions | (36,410 | ) | ||||
Net unrealized gain (loss) on investments | $(38,955,725 | ) | ||||
Net realized and unrealized gain (loss) on investments | $(33,771,180 | ) | ||||
Change in net assets from operations | $19,785,188 |
See Notes to Financial Statements
41
Table of Contents
Financial Statements
STATEMENTS OF CHANGES IN NET ASSETS
These statements describe the increases and/or decreases in net assets resulting from operations, any distributions, and any shareholder transactions.
Years ended 3/31 | ||||||
2008 | 2007 | |||||
Change in net assets | ||||||
From operations | ||||||
Net investment income | $53,556,368 | $14,697,717 | ||||
Net realized gain (loss) on investments | 5,184,545 | 793,269 | ||||
Net unrealized gain (loss) on investments | (38,955,725 | ) | (532,639 | ) | ||
Change in net assets from operations | $19,785,188 | $14,958,347 | ||||
Distributions declared to shareholders | ||||||
From net investment income | ||||||
Class A | $(12,232,669 | ) | $(11,328,364 | ) | ||
Class B | (946,157 | ) | (1,227,213 | ) | ||
Class C | (1,451,193 | ) | (1,360,395 | ) | ||
Class A1 | (35,551,163 | ) | — | |||
Class B1 | (1,003,290 | ) | — | |||
From net realized gain on investments | ||||||
Class A | (275,822 | ) | — | |||
Class B | (23,678 | ) | — | |||
Class C | (39,170 | ) | — | |||
Class A1 | (979,811 | ) | — | |||
Class B1 | (32,472 | ) | — | |||
Total distributions declared to shareholders | $(52,535,425 | ) | $(13,915,972 | ) | ||
Change in net assets from fund share transactions | $958,239,656 | $(2,410,081 | ) | |||
Total change in net assets | $925,489,419 | $(1,367,706 | ) | |||
Net assets | ||||||
At beginning of period | 310,214,509 | 311,582,215 | ||||
At end of period (including undistributed net investment income of $288,114 and $285,308, respectively) | $1,235,703,928 | $310,214,509 |
See Notes to Financial Statements
42
Table of Contents
Financial Statements
The financial highlights table is intended to help you understand the fund’s financial performance for the past 5 years (or life of a particular share class, if shorter). Certain information reflects financial results for a single fund share. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
Class A | Years ended 3/31 | ||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||
Net asset value, beginning of period | $8.55 | $8.53 | $8.58 | $8.70 | $8.54 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.42 | $ 0.42 | (z) | $0.41 | $0.42 | $0.41 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.35 | ) | 0.00 | (w)(z) | (0.06 | ) | (0.13 | ) | 0.17 | ||||||
Total from investment operations | $0.07 | $0.42 | $0.35 | $0.29 | $0.58 | ||||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.40 | ) | $(0.40 | ) | $(0.40 | ) | $(0.41 | ) | $(0.42 | ) | |||||
From net realized gain on investments | (0.01 | ) | — | — | — | — | |||||||||
Total distributions declared to shareholders | $(0.41 | ) | $(0.40 | ) | $(0.40 | ) | $(0.41 | ) | $(0.42 | ) | |||||
Net asset value, end of period | $8.21 | $8.55 | $8.53 | $8.58 | $8.70 | ||||||||||
Total return (%) (r)(s)(t) | 0.81 | 5.00 | 4.18 | 3.49 | 6.94 | ||||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.05 | 1.19 | 1.17 | 1.04 | 1.04 | ||||||||||
Expenses after expense reductions (f) | 0.80 | 0.94 | 0.92 | 0.79 | 0.88 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.70 | 0.79 | 0.81 | 0.79 | 0.88 | ||||||||||
Net investment income | 4.99 | 4.91 | (z) | 4.71 | 4.90 | 4.80 | |||||||||
Portfolio turnover | 32 | 10 | 9 | 8 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $279,614 | $248,226 | $240,212 | $241,850 | $264,797 |
See Notes to Financial Statements
43
Table of Contents
Financial Highlights – continued
Class B | Years ended 3/31 | ||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||
Net asset value, beginning of period | $8.57 | $8.54 | $8.59 | $8.72 | $8.55 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.36 | $0.36 | (z) | $0.34 | $0.36 | $0.35 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.36 | ) | 0.00 | (w)(z) | (0.05 | ) | (0.14 | ) | 0.18 | ||||||
Total from investment operations | $0.00 | (w) | $0.36 | $0.29 | $0.22 | $0.53 | |||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.34 | ) | $(0.33 | ) | $(0.34 | ) | $(0.35 | ) | $(0.36 | ) | |||||
From net realized gain on investments | (0.01 | ) | — | — | — | — | |||||||||
Total distributions declared to shareholders | $(0.35 | ) | $(0.33 | ) | $(0.34 | ) | $(0.35 | ) | $(0.36 | ) | |||||
Net asset value, end of period | $8.22 | $8.57 | $8.54 | $8.59 | $8.72 | ||||||||||
Total return (%) (r)(s)(t) | (0.06 | ) | 4.34 | 3.40 | 2.60 | 6.27 | |||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.80 | 1.95 | 1.92 | 1.79 | 1.79 | ||||||||||
Expenses after expense reductions (f) | 1.55 | 1.70 | 1.67 | 1.54 | 1.63 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.45 | 1.55 | 1.56 | 1.54 | 1.63 | ||||||||||
Net investment income | 4.24 | 4.16 | (z) | 3.96 | 4.15 | 4.05 | |||||||||
Portfolio turnover | 32 | 10 | 9 | 8 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $22,372 | $26,919 | $36,752 | $43,930 | $52,594 |
See Notes to Financial Statements
44
Table of Contents
Financial Highlights – continued
Class C | Years ended 3/31 | ||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||
Net asset value, beginning of period | $8.59 | $8.56 | $8.61 | $8.73 | $8.56 | ||||||||||
Income (loss) from investment operations | |||||||||||||||
Net investment income (d) | $0.35 | $0.36 | (z) | $0.35 | $0.36 | $0.35 | |||||||||
Net realized and unrealized gain (loss) on investments | (0.35 | ) | 0.01 | (z) | (0.06 | ) | (0.13 | ) | 0.18 | ||||||
Total from investment operations | $0.00 | (w) | $0.37 | $0.29 | $0.23 | $0.53 | |||||||||
Less distributions declared to shareholders | |||||||||||||||
From net investment income | $(0.34 | ) | $(0.34 | ) | $(0.34 | ) | $(0.35 | ) | $(0.36 | ) | |||||
From net realized gain on investments | (0.01 | ) | — | — | — | — | |||||||||
Total distributions declared to shareholders | $(0.35 | ) | $(0.34 | ) | $(0.34 | ) | $(0.35 | ) | $(0.36 | ) | |||||
Net asset value, end of period | $8.24 | $8.59 | $8.56 | $8.61 | $8.73 | ||||||||||
Total return (%) (r)(s)(t) | (0.05 | ) | 4.34 | 3.41 | 2.72 | 6.27 | |||||||||
Ratios (%) (to average net assets) and Supplemental data: | |||||||||||||||
Expenses before expense reductions (f) | 1.80 | 1.94 | 1.92 | 1.79 | 1.79 | ||||||||||
Expenses after expense reductions (f) | 1.55 | 1.69 | 1.67 | 1.54 | 1.63 | ||||||||||
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.45 | 1.54 | 1.56 | 1.54 | 1.63 | ||||||||||
Net investment income | 4.23 | 4.16 | (z) | 4.09 | 4.15 | 4.05 | |||||||||
Portfolio turnover | 32 | 10 | 9 | 8 | 9 | ||||||||||
Net assets at end of period (000 Omitted) | $42,759 | $35,070 | $34,618 | $33,911 | $37,508 |
See Notes to Financial Statements
45
Table of Contents
Financial Highlights – continued
Class A1 | Year ended 3/31 | ||
2008 (i) | |||
Net asset value, beginning of period | $8.39 | ||
Income (loss) from investment operations | |||
Net investment income (d) | $0.34 | ||
Net realized and unrealized gain (loss) | (0.18 | )(g) | |
Total from investment operations | $0.16 | ||
Less distributions declared to shareholders | |||
From net investment income | $(0.33 | ) | |
From net realized gain on investments | (0.01 | ) | |
Total distributions declared to shareholders | $(0.34 | ) | |
Net asset value, end of period | $8.21 | ||
Total return (%) (r)(s)(t) | 1.84 | (n) | |
Ratios (%) (to average net assets) and Supplemental data: | |||
Expenses before expense reductions (f) | 0.79 | (a) | |
Expenses after expense reductions (f) | 0.54 | (a) | |
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 0.44 | (a) | |
Net investment income | 5.26 | (a) | |
Portfolio turnover | 32 | ||
Net assets at end of period (000 Omitted) | $864,341 |
See Notes to Financial Statements
46
Table of Contents
Financial Highlights – continued
Class B1 | Year ended 3/31 | ||
2008 (i) | |||
Net asset value, beginning of period | $8.40 | ||
Income (loss) from investment operations | |||
Net investment income (d) | $0.29 | ||
Net realized and unrealized gain (loss) | (0.18 | )(g) | |
Total from investment operations | $0.11 | ||
Less distributions declared to shareholders | |||
From net investment income | $(0.28 | ) | |
From net realized gain on investments | (0.01 | ) | |
Total distributions declared to shareholders | $(0.29 | ) | |
Net asset value, end of period | $8.22 | ||
Total return (%) (r)(s)(t) | 1.24 | (n) | |
Ratios (%) (to average net assets) and Supplemental data: | |||
Expenses before expense reductions (f) | 1.55 | (a) | |
Expenses after expense reductions (f) | 1.30 | (a) | |
Expenses after expense reductions and excluding interest expense and fees (f)(l) | 1.21 | (a) | |
Net investment income | 4.50 | (a) | |
Portfolio turnover | 32 | ||
Net assets at end of period (000 Omitted) | $26,618 |
Any redemption fees charged by the fund during the 2005 fiscal year resulted in a per share impact of less than $0.01.
(a) | Annualized |
(d) | Per share data are based on average shares outstanding. |
(f) | Ratios do not reflect reductions from fees paid indirectly, if applicable. |
(g) | The per share amount is not in accordance with the net realized and unrealized gain/loss for the period because of the timing of sales of fund shares and the per share amount of realized and unrealized gains and losses at such time. |
(i) | For the period from the class’ inception, June 25, 2007 (Classes A1 and B1) through the stated period end. |
(l) | Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets. |
(n) | Not annualized. |
(r) | Certain expenses have been reduced without which performance would have been lower. |
(s) | From time to time the fund may receive proceeds from litigation settlements, without which performance would be lower. |
(t) | Total returns do not include any applicable sales charges. |
(w) | Per share amount was less than $0.01. |
(z) | The fund applied a change in estimate for amortization of premium on certain debt securities in the year ended March 31, 2007 that resulted in an increase of $0.03 per share to net investment income, a decrease of $0.03 per share to net realized and unrealized gain (loss) on investments, and an increase of 0.30% to the net investment income ratio for Class A, Class B, and Class C. The change in estimate had no impact on net assets, net asset value per share or total return of the class. |
See Notes to Financial Statements
47
Table of Contents
(1) | Business and Organization |
MFS Municipal Income Fund (the fund) is a series of MFS Municipal Series Trust which is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company.
(2) | Significant Accounting Policies |
General – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Municipal securities backed by current or anticipated revenues from a specific project or specific assets can be negatively affected by the discontinuance of the taxation supporting the projects or assets or the inability to collect revenues for the project or from the assets. If the Internal Revenue Service determines an issuer of a municipal security has not complied with applicable tax requirements, the security could decline in value, interest from the security could become taxable and the fund may be required to issue Forms 1099-DIV.
Investment Valuations – Debt instruments and floating rate loans (other than short-term instruments), including restricted debt instruments, are generally valued at an evaluated or composite bid as reported by an independent pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price as reported by an independent pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as reported by an independent pricing service on the market on which such futures contracts are primarily traded. Swaps are generally valued at an evaluated bid as reported by an independent pricing service. Securities and other assets generally valued on the basis of information from an independent pricing service may also be valued at a broker-dealer bid quotation. Values obtained from pricing services can utilize both dealer-supplied valuations and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data.
The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the fund’s investments (including any
48
Table of Contents
Notes to Financial Statements – continued
fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under the fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from independent pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the fund’s net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. The adviser may rely on independent pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of investments used to determine the fund’s net asset value may differ from quoted or published prices for the same investments.
In September 2006, FASB Statement No. 157, Fair Value Measurements (the “Statement”) was issued, and is effective for fiscal years beginning after November 15, 2007 and for all interim periods within those fiscal years. This Statement provides a single definition of fair value, a hierarchy for measuring fair value and expanded disclosures about fair value measurements. Management is evaluating the application of the Statement to the fund, and believes the impact will be limited to expanded disclosures resulting from the adoption of this Statement in the fund’s financial statements.
Derivative Risk – The fund may invest in derivatives for hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. When the fund uses derivatives as an investment to gain market exposure, or for hedging purposes, gains and losses from derivative instruments may be substantially greater than the derivative’s original cost. Cash that has been segregated on behalf of certain derivative contracts will be reported separately on the Statement of Assets and Liabilities as restricted cash. Derivative instruments include futures contracts and swap agreements.
49
Table of Contents
Notes to Financial Statements – continued
Futures Contracts – The fund may enter into futures contracts for the delayed delivery of securities or currency, or contracts based on financial indices at a fixed price on a future date. In entering such contracts, the fund is required to deposit with the broker either in cash or securities an amount equal to a certain percentage of the contract amount. Subsequent payments are made or received by the fund each day, depending on the daily fluctuations in the value of the contract, and are recorded for financial statement purposes as unrealized gains or losses by the fund. Upon entering into such contracts, the fund bears the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the fund may not achieve the anticipated benefits of the futures contracts and may realize a loss.
Swap Agreements – The fund may enter into swap agreements. A swap is an exchange of cash payments between the fund and another party. Net cash payments are exchanged at specified intervals and are recorded as a realized gain or loss in the Statement of Operations. The value of the swap is adjusted daily and the change in value, including accruals of periodic amounts of interest to be paid or received, is recorded as unrealized appreciation or depreciation in the Statement of Operations. Amounts paid or received at the inception of the swap are reflected as premiums paid or received on the Statement of Assets and Liabilities and are amortized using the effective interest method over the term of the agreement. A liquidation payment received or made upon early termination is recorded as a realized gain or loss in the Statement of Operations. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the fund’s custodian in connection with these agreements. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. These risks include the possible lack of a liquid market, failure of the counterparty to perform under the terms of the agreements, and unfavorable market and interest rate movements of the underlying instrument. All swap agreements entered into by the fund with the same counterparty are generally governed by a single master agreement, which provides for the netting of all amounts owed by the parties under the agreement upon the occurrence of an event of default, thereby reducing the credit risk to which such party is exposed.
The fund held interest rate swap agreements during the period which involve the periodic exchange of cash flows, such as the exchange of fixed rate interest payments for floating rate interest payments based on a notional principal amount. The interest rates may be based on a specific financial index or the exchange of two distinct floating rate payments. The fund may enter into an interest rate swap in order to manage its exposure to interest rate fluctuations.
Inverse Floaters – The fund invests in municipal inverse floating rate securities which are structured by the issuer (known as primary market inverse
50
Table of Contents
Notes to Financial Statements – continued
floating rate securities) or by an investment banker utilizing municipal bonds which have already been issued (known as secondary market inverse floating rate securities) to have variable rates of interest which typically move in the opposite direction of short term interest rates. A secondary market inverse floating rate security is created when an investment banker transfers a fixed rate municipal bond to a special purpose trust, and causes the trust to (a) issue floating rate certificates to third parties, in an amount equal to a fraction of the par amount of the deposited bonds (these certificates usually pay tax-exempt interest at short-term interest rates that typically reset weekly; and the certificate holders typically, on seven days notice, have the option to tender their certificates to the investment banker or another party for redemption at par plus accrued interest), and (b) issue inverse floating rate certificates (sometimes referred to as “inverse floaters”). If the holder of the inverse floater transfers the municipal bonds to an investment banker for the purpose of depositing the municipal bonds into the special purpose trust, the inverse floating rate certificates that are issued by the trust are referred to as “self-deposited inverse floaters.” If the bonds held by the trust are purchased by the investment banker for deposit into the trust from someone other than the purchasers of the inverse floaters, the inverse floating rate certificates that are issued by the trust are referred to as “externally deposited inverse floaters.” Such self-deposited inverse floaters held by the fund are accounted for as secured borrowings, with the municipal bonds reflected in the investments of the fund and amounts owed to the holder of the floating rate certificate under the provisions of the trust, which amounts are paid solely from the assets of the trust, reflected as liabilities of the fund in the Statement of Assets and Liabilities under the caption, “Payable to the holder of the floating rate certificate from trust assets”. At March 31, 2008, the fund’s payable to the holder of the floating rate certificate from trust assets was $47,178,249. The weighted average interest rate on the floating rate certificates issued by the trust was 3.21%. Interest expense and fees relate to payments made to the holder of the floating rate certificate from trust assets in connection with self-deposited inverse floater transactions. Interest expense and fees are recorded as incurred. For the year ended March 31, 2008, interest expense and fees in connection with self-deposited inverse floaters was $986,285. Primary and externally deposited inverse floaters held by the fund are not accounted for as secured borrowings.
In March 2008, FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities (the “Standard”) was issued, and is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. This Standard provides enhanced disclosures about the fund’s use of and accounting for derivative instruments and the effect of derivative instruments on the fund’s results of operations and financial position. Management is evaluating the application of the Standard
51
Table of Contents
Notes to Financial Statements – continued
to the fund, and has not at this time determined the impact, if any, resulting from the adoption of this Standard on the fund’s financial statements.
Indemnifications – Under the fund’s organizational documents, its officers and trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the fund. Additionally, in the normal course of business, the fund enters into agreements with service providers that may contain indemnification clauses. The fund’s maximum exposure under these agreements is unknown as this would involve future claims that may be made against the fund that have not yet occurred.
Investment Transactions and Income – Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. All premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles.
The fund may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statement of Operations in realized gain/loss if the security has been disposed of by the fund or in unrealized gain/loss if the security is still held by the fund. Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statement of Operations.
Legal fees and other related expenses incurred to preserve and protect the value of a security owned are added to the cost of the security; other legal fees are expensed. Capital infusions made directly to the security issuer, which are generally non-recurring, incurred to protect or enhance the value of high-yield debt securities, are reported as additions to the cost basis of the security. Costs that are incurred to negotiate the terms or conditions of capital infusions or that are expected to result in a plan of reorganization are reported as realized losses. Ongoing costs incurred to protect or enhance an investment, or costs incurred to pursue other claims or legal actions, are expensed.
Fees Paid Indirectly – The fund’s custody fee may be reduced according to an arrangement that measures the value of cash deposited with the custodian by the fund. This amount, for the year ended March 31, 2008, is shown as a reduction of total expenses on the Statement of Operations.
Tax Matters and Distributions – The fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable and tax-exempt income, including realized capital gains. As a result, no provision for federal income tax is required. The fund adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“the Interpretation”) on the first day of the fund’s fiscal year. The Interpretation prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There was no impact resulting
52
Table of Contents
Notes to Financial Statements – continued
from the adoption of this Interpretation on the fund’s financial statements. Each of the fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service. It is the fund’s policy to record interest and penalty charges on underpaid taxes associated with its tax positions as interest expense and miscellaneous expense, respectively. No such charges were recorded in the current financial statements.
Distributions to shareholders are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These adjustments have no impact on net assets or net asset value per share. Temporary differences which arise from recognizing certain items of income, expense, gain or loss in different periods for financial statement and tax purposes will reverse at some time in the future. Distributions in excess of net investment income or net realized gains are temporary overdistributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes.
Book/tax differences primarily relate to amortization and accretion of debt securities and secured borrowings.
The tax character of distributions declared to shareholders is as follows:
3/31/08 | 3/31/07 | |||
Ordinary income (including any short-term capital gains) | $— | $24,400 | ||
Tax-exempt income | 51,184,472 | 13,891,571 | ||
Long-term capital gain | 1,350,953 | — | ||
$52,535,425 | $13,915,971 |
The federal tax cost and the tax basis components of distributable earnings were as follows:
3/31/08 | |||
Cost of investments | $1,187,463,283 | ||
Gross appreciation | $59,592,446 | ||
Gross depreciation | (32,403,572 | ) | |
Net unrealized appreciation (depreciation) | $27,188,874 | ||
Undistributed ordinary income | $321,955 | ||
Undistributed tax-exempt income | 5,169,163 | ||
Undistributed long-term capital gain | 4,275,745 | ||
Other temporary differences | (2,668,166 | ) |
53
Table of Contents
Notes to Financial Statements – continued
Multiple Classes of Shares of Beneficial Interest – The fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the fund based on the value of settled shares outstanding of each class, without distinction between share classes. Dividends are declared separately for each class. Differences in per share dividend rates are generally due to differences in separate class expenses. Class B and Class B1 shares will convert to Class A and Class A1 shares, respectively approximately eight years after purchase.
(3) | Transactions with Affiliates |
Investment Adviser – The fund has an investment advisory agreement with Massachusetts Financial Services Company (MFS) to provide overall investment management and related administrative services and facilities to the fund. The management fee is computed daily and paid monthly at an annual rate of 0.55% of the fund’s average daily net assets.
As part of a settlement agreement with the New York Attorney General concerning market timing and related matters, MFS has agreed to reduce the management fee to 0.30% of the fund’s average daily net assets for the period March 1, 2004 through February 28, 2009. For the year ended March 31, 2008, this waiver amounted to $2,621,603 and is reflected as a reduction of total expenses in the Statement of Operations. The management fee incurred for the year ended March 31, 2008 was equivalent to an annual effective rate of 0.30% of the fund’s average daily net assets.
The investment adviser has agreed in writing to pay a portion of the fund’s operating expenses, exclusive of certain other fees and expenses, such that total annual fund operating expenses do not exceed the following rates annually of the fund’s average daily net assets with respect to each class:
Class A | Class B | Class C | Class AI | Class B1 | ||||
0.74% | 1.49% | 1.49% | 0.49% | 1.25% |
This written agreement will continue through July 31, 2008 unless changed or rescinded by the fund’s Board of Trustees. For the year ended March 31, 2008, the fund’s actual operating expenses did not exceed the limit and therefore, the investment advisor did not pay any portion of the fund’s expenses.
Distributor – MFS Fund Distributors, Inc. (MFD), a wholly-owned subsidiary of MFS, as distributor, received $99,518 and $26,752 for the year ended March 31, 2008, as its portion of the initial sales charge on sales of Class A and Class A1 shares, respectively of the fund.
54
Table of Contents
Notes to Financial Statements – continued
The Board of Trustees has adopted a distribution plan for certain class shares pursuant to Rule 12b-1 of the Investment Company Act of 1940.
The fund’s distribution plan provides that the fund will pay MFD for services provided by MFD and financial intermediaries in connection with the distribution and servicing of certain share classes. One component of the plan is a distribution fee paid to MFD and another component of the plan is a service fee paid to MFD. MFD may subsequently pay all, or a portion, of the distribution and/or service fees to financial intermediaries.
Distribution Plan Fee Table:
Distribution Fee Rate | Service Fee Rate | Total Distribution Plan (d) | Annual Effective Rate (e) | Distribution and Service Fee | ||||||
Class A | 0.10% | 0.25% | 0.35% | 0.25% | $644,977 | |||||
Class B | 0.75% | 0.25% | 1.00% | 1.00% | 237,057 | |||||
Class C | 0.75% | 0.25% | 1.00% | 1.00% | 364,057 | |||||
Class B1 | 0.75% | 0.25% | 1.00% | 0.76% | 179,545 | |||||
Total Distribution and Service Fees | $1,425,636 |
(d) | In accordance with the distribution plan for certain classes, the fund pays distribution and/or service fees up to these annual percentage rates of each class’ average daily net assets. |
(e) | The annual effective rates represent actual fees incurred under the distribution plan for the year ended March 31, 2008 based on each class’ average daily net assets. Payment of the 0.10% annual Class A distribution fee is not yet in effect and will be implemented on such date as the fund’s Board of Trustees may determine. For one year from the date of sale of Class B1 shares, assets attributable to such Class B1 shares are subject to the 0.25% annual Class B1 service fee. On assets attributable to all other Class B1 shares, the service fee is not currently in effect, but may be implemented on such date as the fund’s Board of Trustees may determine. |
Certain Class A, Class A1, and Class C shares are subject to a contingent deferred sales charge in the event of a shareholder redemption within 12 months of purchase. Class B and Class B1 shares are subject to a contingent deferred sales charge in the event of a shareholder redemption within six years of purchase. All contingent deferred sales charges are paid to MFD and during the year ended March 31, 2008, were as follows:
Amount | ||
Class A | $6,770 | |
Class B | $31,865 | |
Class C | $4,854 | |
Class A1 | $123 | |
Class B1 | $29,961 |
Shareholder Servicing Agent – MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS, receives a fee from the fund for its services as shareholder servicing agent calculated as a percentage of the average daily net assets of the fund as determined periodically under the supervision of the fund’s Board of Trustees. For the year ended March 31, 2008, the fee was $435,635, which equated to 0.0416% annually of the fund’s average daily net
55
Table of Contents
Notes to Financial Statements – continued
assets. MFSC also receives payment from the fund for out-of-pocket expenses, sub-accounting and other shareholder servicing costs which may be paid to affiliated and unaffiliated service providers. For the year ended March 31, 2008, these out-of-pocket expenses, sub-accounting and other shareholder servicing costs amounted to $300,682.
Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative services agreement, the fund partially reimburses MFS the costs incurred to provide these services. The fund is charged a fixed amount plus a fee based on average daily net assets. The fund’s annual fixed amount is $17,500.
The administrative services fee incurred for the year ended March 31, 2008 was equivalent to an annual effective rate of 0.0155% of the fund’s average daily net assets.
Trustees’ and Officers’ Compensation – The fund pays compensation to independent trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. The fund does not pay compensation directly to trustees or officers of the fund who are also officers of the investment adviser, all of whom receive remuneration for their services to the fund from MFS. Certain officers and trustees of the fund are officers or directors of MFS, MFD, and MFSC.
The fund has an unfunded, defined benefit plan for certain retired independent trustees which resulted in a pension expense of $7,659. This amount is included in independent trustees’ compensation for the year ended March 31, 2008. The liability for deferred retirement benefits payable to certain retired independent trustees amounted to $77,702 at March 31, 2008, and is included in payable for independent trustees’ compensation.
Other – This fund and certain other MFS funds (the funds) have entered into a services agreement (the Agreement) which provides for payment of fees by the funds to Tarantino LLC in return for the provision of services of an Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an officer of the funds and the sole member of Tarantino LLC. The funds can terminate the Agreement with Tarantino LLC at any time under the terms of the Agreement. For the year ended March 31, 2008, the fee paid by the fund to Tarantino LLC was $7,009 and is included in miscellaneous expense on the Statement of Operations. MFS has agreed to reimburse the fund for a portion of the payments made by the fund to Tarantino LLC in the amount of $4,770, which is shown as a reduction of total expenses in the Statement of Operations. Additionally, MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO.
56
Table of Contents
Notes to Financial Statements – continued
(4) | Portfolio Securities |
Purchases and sales of investments, other than U.S. government securities, purchased option transactions, and short-term obligations, aggregated $327,834,580 and $394,200,262, respectively.
(5) | Shares of Beneficial Interest |
The fund’s Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest. Transactions in fund shares were as follows:
Year ended 3/31/08 (i) | Year ended 3/31/07 | |||||||||||
Shares | Amount | Shares | Amount | |||||||||
Shares sold | ||||||||||||
Class A | 12,188,966 | $102,379,470 | 4,077,868 | $34,806,575 | ||||||||
Class B | 676,593 | 5,683,358 | 277,826 | 2,379,647 | ||||||||
Class C | 1,967,955 | 16,577,633 | 673,589 | 5,779,551 | ||||||||
Class A1 | 1,362,877 | 11,483,711 | — | — | ||||||||
Class B1 | 32,015 | 267,404 | — | — | ||||||||
16,228,406 | $136,391,576 | 5,029,283 | $42,965,773 | |||||||||
Shares issued in connection with acquisition of MFS Municipal Bond Fund | ||||||||||||
Class A1 | 113,972,241 | $956,544,151 | — | $ — | ||||||||
Class B1 | 3,971,203 | 33,357,434 | — | — | ||||||||
117,943,444 | $989,901,585 | — | $ — | |||||||||
Shares issued to shareholders in reinvestment of distributions | ||||||||||||
Class A | 831,082 | $6,992,514 | 732,144 | $6,262,765 | ||||||||
Class B | 63,839 | 538,422 | 74,877 | 641,277 | ||||||||
Class C | 113,902 | 962,766 | 103,647 | 890,072 | ||||||||
Class A1 | 2,453,772 | 20,578,947 | — | — | ||||||||
Class B1 | 65,102 | 546,737 | — | — | ||||||||
3,527,697 | $29,619,386 | 910,668 | $7,794,114 | |||||||||
Shares reacquired | ||||||||||||
Class A | (7,981,503 | ) | $(67,115,365 | ) | (3,968,355 | ) | $(33,877,957 | ) | ||||
Class B | (1,161,506 | ) | (9,804,901 | ) | (1,515,106 | ) | (12,956,565 | ) | ||||
Class C | (977,878 | ) | (8,264,793 | ) | (738,293 | ) | (6,335,446 | ) | ||||
Class A1 | (12,546,924 | ) | (105,513,431 | ) | — | — | ||||||
Class B1 | (830,080 | ) | (6,974,401 | ) | — | — | ||||||
(23,497,891 | ) | $(197,672,891 | ) | (6,221,754 | ) | $(53,169,968 | ) | |||||
Net change | ||||||||||||
Class A | 5,038,545 | $42,256,619 | 841,657 | $7,191,383 | ||||||||
Class B | (421,074 | ) | (3,583,121 | ) | (1,162,403 | ) | (9,935,641 | ) | ||||
Class C | 1,103,979 | 9,275,606 | 38,943 | 334,177 | ||||||||
Class A1 | 105,241,966 | 883,093,378 | — | — | ||||||||
Class B1 | 3,238,240 | 27,197,174 | — | — | ||||||||
114,201,656 | $958,239,656 | (281,803 | ) | $(2,410,081 | ) |
(i) | For the period from the class’ inception, June 25, 2007 (Classes A1 and B1), through the stated period end. |
57
Table of Contents
Notes to Financial Statements – continued
(6) | Line of Credit |
The fund and other funds managed by MFS participate in a $1 billion unsecured committed line of credit provided by a syndication of banks under a credit agreement. In addition, the fund and other funds managed by MFS have established uncommitted borrowing arrangements with certain banks. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the Federal Reserve funds rate plus 0.30%. In addition, a commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds at the end of each calendar quarter. For the year ended March 31, 2008, the fund’s commitment fee and interest expense on the line of credit were $4,184 and $0, respectively, and are included in miscellaneous expense and interest expense and fees, respectively, on the Statement of Operations.
(7) | Acquisitions |
At close of business on June 22, 2007, the fund acquired all of the assets and liabilities of MFS Municipal Bond Fund. In connection with the acquisition, the fund also issued new share Classes A1 and B1 to the acquired fund shareholders, that differ from existing share Classes A and B in respect to class level expenses. The acquisition was accomplished by a tax-free exchange of 117,943,444 shares of the fund (valued at $989,901,585) for all of the assets and liabilities of MFS Municipal Bond Fund. MFS Municipal Bond Fund then converted all of its outstanding shares for the shares of the fund and distributed those shares to its shareholders. MFS Municipal Bond Fund’s net assets on that date were $989,901,585, including $45,804,567 of unrealized appreciation, $114,563 of accumulated net investment loss, and $380,444 of accumulated net realized loss on investments. These assets were combined with those of the fund. The aggregate net assets of the fund after the acquisition were $1,291,597,453.
58
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of MFS Municipal Series Trust and the Shareholders of MFS Municipal Income Fund:
We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of MFS Municipal Income Fund (one of the portfolios constituting the MFS Municipal Series Trust) (the “Trust”) as of March 31, 2008, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of March 31, 2008, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of MFS Municipal Income Fund as of March 31, 2008, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
May 15, 2008
59
Table of Contents
TRUSTEES AND OFFICERS — IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust, as of May 1, 2008, are listed below, together with their principal occupations during the past five years. (Their titles may have varied during that period.) The address of each Trustee and officer is 500 Boylston Street, Boston, Massachusetts 02116.
Name, Date of Birth | Position(s) Held | Trustee/Officer Since(h) | Principal Occupations During | |||
INTERESTED TRUSTEES | ||||||
Robert J. Manning(k) (born 10/20/63) | Trustee | February 2004 | Massachusetts Financial Services Company, Chief Executive Officer, President, Chief Investment Officer and Director | |||
Robert C. Pozen(k) (born 8/08/46) | Trustee | February 2004 | Massachusetts Financial Services Company, Chairman (since February 2004); Harvard Business School (education), Senior Lecturer (since 2008); Secretary of Economic Affairs, The Commonwealth of Massachusetts (January 2002 to December 2002); Fidelity Investments, Vice Chairman (June 2000 to December 2001); Fidelity Management & Research Company (investment adviser), President (March 1997 to July 2001); Bell Canada Enterprises (telecommunications), Director; Medtronic, Inc. (medical technology), Director; Telesat (satellite communications), Director (until 2007) | |||
INDEPENDENT TRUSTEES | ||||||
J. Atwood Ives (born 5/01/36) | Trustee and Chair of Trustees | February 1992 | Private investor; KeySpan Corporation (energy related services), Director until 2004; Woodstock Corporation (investment advisory firm), Director until 2003 | |||
Robert E. Butler(n) (born 11/29/41) | Trustee | January 2006 | Consultant – regulatory and compliance matters (since July 2002); PricewaterhouseCoopers LLP (professional services firm), Partner (until 2002) |
60
Table of Contents
Trustees and Officers – continued
Name, Date of Birth | Position(s) Held | Trustee/Officer Since(h) | Principal Occupations During | |||
Lawrence H. Cohn, M.D. (born 3/11/37) | Trustee | August 1993 | Brigham and Women’s Hospital, Chief of Cardiac Surgery (2005); Harvard Medical School, Professor of Cardiac Surgery; Physician Director of Medical Device Technology for Partners HealthCare | |||
David H. Gunning (born 5/30/42) | Trustee | January 2004 | Retired; Cleveland-Cliffs Inc. (mining products and service provider), Vice Chairman/Director (until May 2007); Portman Limited (mining), Director (since 2005); Encinitos Ventures (private investment company), Principal (1997 to April 2001); Lincoln Electric Holdings, Inc. (welding equipment manufacturer), Director | |||
William R. Gutow (born 9/27/41) | Trustee | December 1993 | Private investor and real estate consultant (since 1998); Capital Entertainment Management Company (video franchise), Vice Chairman (since 1998); Texas Donuts (donut franchise), Vice Chairman (since 2007); Atlantic Coast Tan (tanning salons), Vice Chairman (until 2007) | |||
Michael Hegarty (born 12/21/44) | Trustee | December 2004 | Retired; AXA Financial (financial services and insurance), Vice Chairman and Chief Operating Officer (until May 2001); The Equitable Life Assurance Society (insurance), President and Chief Operating Officer (until May 2001) | |||
Lawrence T. Perera (born 6/23/35) | Trustee | July 1981 | Hemenway & Barnes (attorneys), Partner | |||
J. Dale Sherratt (born 9/23/38) | Trustee | August 1993 | Insight Resources, Inc. (acquisition planning specialists), President; Wellfleet Investments (investor in health care companies), Managing General Partner (since 1993); Cambridge Nutraceuticals (professional nutritional products), Chief Executive Officer (until May 2001) |
61
Table of Contents
Trustees and Officers – continued
Name, Date of Birth | Position(s) Held | Trustee/Officer Since(h) | Principal Occupations During | |||
Laurie J. Thomsen (born 8/05/57) | Trustee | March 2005 | New Profit, Inc. (venture philanthropy), Partner (since 2006); Private investor; Prism Venture Partners (venture capital), Co-founder and General Partner (until June 2004); The Travelers Companies (commercial property liability insurance), Director | |||
Robert W. Uek (born 5/18/41) | Trustee | January 2006 | Retired (since 1999); PricewaterhouseCoopers LLP (professional services firm), Partner (until 1999); Consultant to investment company industry (since 2000); TT International Funds (mutual fund complex), Trustee (2000 until 2005); Hillview Investment Trust II Funds (mutual fund complex), Trustee (2000 until 2005) | |||
OFFICERS | ||||||
Robert J. Manning(k) (born 10/20/63) | President | March 2008 | Massachusetts Financial Services Company, Chief Executive Officer, President, Chief Investment Officer and Director | |||
Maria F. Dwyer(k) (born 12/01/58) | Treasurer | March 2008 | Massachusetts Financial Services Company, Executive Vice President and Chief Regulatory Officer (since March 2004) Chief Compliance Officer (since December 2006); Fidelity Management & Research Company, Vice President (prior to March 2004); Fidelity Group of Funds, President and Treasurer (prior to March 2004); MFS Group of Funds, President (November 2005 – March 2008) | |||
Christopher R. Bohane(k) (born 1/18/74) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since April 2003); Kirkpatrick & Lockhart LLP (law firm), Associate (prior to April 2003) | |||
Ethan D. Corey(k) (born 11/21/63) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since April 2006); Special Counsel (prior to April 2006); Dechert LLP (law firm), Counsel (prior to December 2004) |
62
Table of Contents
Trustees and Officers – continued
Name, Date of Birth | Position(s) Held | Trustee/Officer Since(h) | Principal Occupations During | |||
David L. DiLorenzo(k) (born 8/10/68) | Assistant Treasurer | July 2005 | Massachusetts Financial Services Company, Vice President (since June 2005); JP Morgan Investor Services, Vice President (prior to June 2005) | |||
Timothy M. Fagan(k) (born 7/10/68) | Assistant Secretary and Assistant Clerk | September 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since September 2005); John Hancock Advisers, LLC, Vice President and Chief Compliance Officer (September 2004 to August 2005), Senior Attorney (prior to September 2004); John Hancock Group of Funds, Vice President and Chief Compliance Officer (September 2004 to December 2004) | |||
Mark D. Fischer(k) (born 10/27/70) | Assistant Treasurer | July 2005 | Massachusetts Financial Services Company, Vice President (since May 2005); JP Morgan Investment Management Company, Vice President (prior to May 2005) | |||
Brian E. Langenfeld(k) (born 3/07/73) | Assistant Secretary and Assistant Clerk | June 2006 | Massachusetts Financial Services Company, Assistant Vice President and Counsel (since May 2006); John Hancock Advisers, LLC, Assistant Vice President and Counsel (May 2005 to April 2006); John Hancock Advisers, LLC, Attorney and Assistant Secretary (prior to May 2005) | |||
Ellen Moynihan(k) (born 11/13/57) | Assistant Treasurer | April 1997 | Massachusetts Financial Services Company, Senior Vice President | |||
Susan S. Newton(k) (born 3/07/50) | Assistant Secretary and Assistant Clerk | May 2005 | Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since April 2005); John Hancock Advisers, LLC, Senior Vice President, Secretary and Chief Legal Officer (prior to April 2005); John Hancock Group of Funds, Senior Vice President, Secretary and Chief Legal Officer (prior to April 2005) |
63
Table of Contents
Trustees and Officers – continued
Name, Date of Birth | Position(s) Held | Trustee/Officer Since(h) | Principal Occupations During | |||
Susan A. Pereira(k) (born 11/05/70) | Assistant Secretary and Assistant Clerk | July 2005 | Massachusetts Financial Services Company, Vice President and Senior Counsel (since June 2004); Bingham McCutchen LLP (law firm), Associate (prior to June 2004) | |||
Mark N. Polebaum(k) (born 5/01/52) | Secretary and Clerk | January 2006 | Massachusetts Financial Services Company, Executive Vice President, General Counsel and Secretary (since January 2006); Wilmer Cutler Pickering Hale and Dorr LLP (law firm), Partner (prior to January 2006) | |||
Frank L. Tarantino (born 3/07/44) | Independent Chief Compliance Officer | June 2004 | Tarantino LLC (provider of compliance services), Principal (since June 2004); CRA Business Strategies Group (consulting services), Executive Vice President (April 2003 to June 2004); David L. Babson & Co. (investment adviser), Managing Director, Chief Administrative Officer and Director (prior to March 2003) | |||
Richard S. Weiztel(k) (born 7/16/70) | Assistant Secretary and Assistant Clerk | October 2007 | Massachusetts Financial Services Company, Vice President and Assistant General Counsel (since 2007); Vice President and Senior Counsel (since May 2004); Massachusetts Department of Business and Technology, General Counsel (February 2003 to April 2004); Massachusetts Office of the Attorney General, Assistant Attorney General (April 2001 to February 2003); Ropes and Gray, Associate (prior to April 2001) | |||
James O. Yost(k) (born 6/12/60) | Assistant Treasurer | September 1990 | Massachusetts Financial Services Company, Senior Vice President |
(h) | Date first appointed to serve as Trustee/officer of an MFS fund. Each Trustee has served continuously since appointment unless indicated otherwise. |
(j) | Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”). |
(k) | “Interested person” of the Trust within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act), which is the principal federal law governing investment companies like the fund, as a result of position with MFS. The address of MFS is 500 Boylston Street, Boston, Massachusetts 02116. |
64
Table of Contents
Trustees and Officers – continued
(n) | In 2004 and 2005, Mr. Butler provided consulting services to the independent compliance consultant retained by MFS pursuant to its settlement with the SEC concerning market timing and related matters. The terms of that settlement required that compensation and expenses related to the independent compliance consultant be borne exclusively by MFS and, therefore, MFS paid Mr. Butler for the services he rendered to the independent compliance consultant. In 2004 and 2005, MFS paid Mr. Butler a total of $351,119.29. |
The Trust held a shareholders’ meeting in 2005 to elect Trustees, and will hold a shareholders’ meeting at least once every five years thereafter, to elect Trustees.
Each Trustee (except Mr. Butler and Mr. Uek) has been elected by shareholders and each Trustee and officer holds office until his or her successor is chosen and qualified or until his or her earlier death, resignation, retirement or removal. Messrs. Butler, Gutow, Sherratt and Uek and Ms. Thomsen are members of the Trust’s Audit Committee.
Each of the Trust’s Trustees and officers holds comparable positions with certain other funds of which MFS or a subsidiary is the investment adviser or distributor, and, in the case of the officers, with certain affiliates of MFS. As of January 1, 2008, the Trustees served as board members of 100 funds within the MFS Family of Funds.
The Statement of Additional Information contains further information about the Trustees and is available without charge upon request by calling 1-800-225-2606.
Investment Adviser | Custodian | |
Massachusetts Financial Services Company 500 Boylston Street, Boston, MA 02116-3741 | JPMorgan Chase Bank One Chase Manhattan Plaza, New York, NY 10081 | |
Distributor | Independent Registered Public Accounting Firm | |
MFS Fund Distributors, Inc. 500 Boylston Street, Boston, MA 02116-3741 | Deloitte & Touche LLP 200 Berkeley Street, Boston, MA 02116 | |
Portfolio Manager | ||
Geoffrey Schechter |
65
Table of Contents
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT
A discussion regarding the Board’s most recent review and renewal of the Fund’s investment advisory agreement is available by clicking on the Fund’s name under “Select a fund” on the MFS Web site (mfs.com).
PROXY VOTING POLICIES AND INFORMATION
A general description of the MFS funds’ proxy voting policies and procedures is available without charge, upon request, by calling 1-800-225-2606, by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.
Information regarding how the fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available without charge by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s Web site at http://www.sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
The fund will file a complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q may be reviewed and copied at the:
Public Reference Room
Securities and Exchange Commission
100 F Street, NE, Room 1580
Washington, D.C. 20549
Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. The fund’s Form N-Q is available on the EDGAR database on the Commission’s Internet Web site at http://www.sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov or by writing the Public Reference Section at the above address.
A shareholder can also obtain the quarterly portfolio holdings report at mfs.com.
FEDERAL TAX INFORMATION (unaudited)
The fund will notify shareholders of amounts for use in preparing 2008 income tax forms in January 2009. The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund designates $1,350,953 as capital gain dividends paid during the fiscal year.
Of the dividends paid from net investment income during the fiscal year, 100% is designated as exempt interest dividends for federal income tax purposes. If the fund has earned income on private activity bonds, a portion of the dividends paid may be considered a tax preference item for purposes of computing a shareholder’s alternative minimum tax.
66
Table of Contents
Privacy is a concern for every investor today. At MFS Investment Management® and the MFS funds, we take this concern very seriously. We want you to understand our policies about the investment products and services that we offer, and how we protect the nonpublic personal information of investors who have a direct relationship with us and our wholly owned subsidiaries.
Throughout our business relationship, you provide us with personal information. We maintain information and records about you, your investments, and the services you use. Examples of the nonpublic personal information we maintain include
Ÿ | data from investment applications and other forms |
Ÿ | share balances and transactional history with us, our affiliates, or others |
Ÿ | facts from a consumer reporting agency |
We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law. We may share nonpublic personal information with third parties or certain of our affiliates in connection with servicing your account or processing your transactions. We may share information with companies or financial institutions that perform marketing services on our behalf or with other financial institutions with which we have joint marketing arrangements, subject to any legal requirements.
Authorization to access your nonpublic personal information is limited to appropriate personnel who provide products, services, or information to you. We maintain physical, electronic, and procedural safeguards to help protect the personal information we collect about you.
If you have any questions about the MFS privacy policy, please call 1-800-225-2606 any business day between 8 a.m. and 8 p.m. Eastern time.
Note: If you own MFS products or receive MFS services in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.
67
Table of Contents
Table of Contents
ITEM 2. | CODE OF ETHICS. |
The Registrant has adopted a Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act and as defined in Form N-CSR that applies to the Registrant’s principal executive officer and principal financial and accounting officer. The Registrant has not amended any provision in its Code of Ethics (the “Code”) that relates to an element of the Code’s definitions enumerated in paragraph (b) of Item 2 of this Form N-CSR.
A copy of the Code of Ethics is filed as an exhibit to this Form N-CSR.
ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Messrs. Robert E. Butler and Robert W. Uek and Ms. Laurie J. Thomsen, members of the Audit Committee, have been determined by the Board of Trustees in their reasonable business judgment to meet the definition of “audit committee financial expert” as such term is defined in Form N-CSR. In addition, Messrs. Butler and Uek and Ms. Thomsen are “independent” members of the Audit Committee (as such term has been defined by the Securities and Exchange Commission in regulations implementing Section 407 of the Sarbanes-Oxley Act of 2002). The Securities and Exchange Commission has stated that the designation of a person as an audit committee financial expert pursuant to this Item 3 on the Form N-CSR does not impose on such a person any duties, obligations or liability that are greater than the duties, obligations or liability imposed on such person as a member of the Audit Committee and the Board of Trustees in the absence of such designation or identification.
ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Items 4(a) through 4(d) and 4(g):
The Board of Trustees has appointed Deloitte & Touche LLP (“Deloitte”) to serve as independent accountants to each series of the Registrant (collectively, the “Funds”). The tables below set forth the audit fees billed to the Funds as well as fees for non-audit services provided to the Funds and/or to the Funds’ investment adviser, Massachusetts Financial Services Company (“MFS”) and to various entities either controlling, controlled by, or under common control with MFS that provide ongoing services to the Funds (“MFS Related Entities”).
Table of Contents
For the fiscal years ended March 31, 2008 and 2007, audit fees billed to the Funds by Deloitte were as follows:
Audit Fees | ||||
2008 | 2007 | |||
Fees billed by Deloitte: | ||||
MFS Alabama Municipal Bond Fund | 37,446 | 36,794 | ||
MFS Arkansas Municipal Bond Fund | 37,446 | 36,794 | ||
MFS California Municipal Bond Fund | 37,446 | 36,794 | ||
MFS Florida Municipal Bond Fund | 37,446 | 36,794 | ||
MFS Georgia Municipal Bond Fund | 37,446 | 36,794 | ||
MFS Maryland Municipal Bond Fund | 37,446 | 36,794 | ||
MFS Massachusetts Municipal Bond Fund | 37,446 | 36,794 | ||
MFS Mississippi Municipal Bond Fund | 37,446 | 36,794 | ||
MFS Municipal Income Fund | 42,461 | 40,191 | ||
MFS New York Municipal Bond Fund | 37,446 | 36,794 | ||
MFS North Carolina Municipal Bond Fund | 37,446 | 36,794 | ||
MFS Pennsylvania Municipal Bond Fund | 37,446 | 36,794 | ||
MFS South Carolina Municipal Bond Fund | 37,446 | 36,794 | ||
MFS Tennessee Municipal Bond Fund | 37,446 | 36,794 | ||
MFS Virginia Municipal Bond Fund | 37,446 | 36,794 | ||
MFS West Virginia Municipal Bond Fund | 37,446 | 36,794 | ||
Total | 604,151 | 592,101 |
For the fiscal years ended March 31, 2008 and 2007, fees billed by Deloitte for audit-related, tax and other services provided to the Funds and for audit-related, tax and other services provided to MFS and MFS Related Entities were as follows:
Audit-Related Fees1 | Tax Fees2 | All Other Fees3 | ||||||||||
2008 | 2007 | 2008 | 2007 | 2008 | 2007 | |||||||
Fees billed by Deloitte: | ||||||||||||
To MFS Alabama Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS Arkansas Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS California Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS Florida Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS Georgia Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS Maryland Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS Massachusetts Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 |
Table of Contents
To MFS Mississippi Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS Municipal Income Fund | 2,500 | 0 | 5,028 | 5,479 | 1,305 | 379 | ||||||
To MFS New York Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS North Carolina Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS Pennsylvania Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS South Carolina Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS Tennessee Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS Virginia Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
To MFS West Virginia Municipal Bond Fund | 0 | 0 | 4,974 | 5,427 | 1,305 | 379 | ||||||
Total fees billed by Deloitte To above Funds: | 2,500 | 0 | 79,638 | 86,884 | 20,880 | 6,064 | ||||||
To MFS and MFS Related Entities of MFS Alabama Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS Arkansas Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS California Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS Florida Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS Georgia Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS Maryland Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS Massachusetts Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS Mississippi Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS Municipal Income Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS New York Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 |
Table of Contents
To MFS and MFS Related Entities of MFS North Carolina Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS Pennsylvania Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS South Carolina Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS Tennessee Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS Virginia Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 | ||||||
To MFS and MFS Related Entities of MFS West Virginia Municipal Bond Fund* | 1,461,440 | 695,825 | 0 | 0 | 244,799 | 444,075 |
Aggregate fees for non-audit services: | ||||
2008 | 2007 | |||
To MFS Alabama Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS Arkansas Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS California Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS Florida Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS Georgia Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS Maryland Municipal Bond Fund, | 1,823,200 | 1,293,284 |
Table of Contents
To MFS Massachusetts Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS Mississippi Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS Municipal Income Fund, | 1,825,754 | 1,293,336 | ||
To MFS New York Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS North Carolina Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS Pennsylvania Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS South Carolina Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS Tennessee Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS Virginia Municipal Bond Fund, | 1,823,200 | 1,293,284 | ||
To MFS West Virginia Municipal Bond Fund, | 1,823,200 | 1,293,284 |
* | This amount reflects the fees billed to MFS and MFS Related Entities for non-audit services relating directly to the operations and financial reporting of the Funds (portions of which services also related to the operations and financial reporting of other funds within the MFS Funds complex). |
# | This amount reflects the aggregate fees billed by Deloitte or E&Y, as the case may be, for non-audit services rendered to the Funds and for non-audit services rendered to MFS and the MFS Related Entities. |
1 | The fees included under “Audit-Related Fees” are fees related to assurance and related services that are reasonably related to the performance of the audit or review of financial statements, but not reported under “Audit Fees,” including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters and internal control reviews. |
Table of Contents
2 | The fees included under “Tax Fees” are fees associated with tax compliance, tax advice and tax planning, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews and tax distribution and analysis. |
3 | The fees included under “All Other Fees” are fees for products and services provided by Deloitte other than those reported under “Audit Fees,” “Audit-Related Fees” and “Tax Fees,” including fees for services related to sales tax refunds, consultation on internal cost allocations, consultation on allocation of monies pursuant to an administrative proceeding regarding disclosure of brokerage allocation practices in connection with fund sales, analysis of certain portfolio holdings versus investment styles, review of internal controls and review of Rule 38a-1 compliance program. |
Item 4(e)(1):
Set forth below are the policies and procedures established by the Audit Committee of the Board of Trustees relating to the pre-approval of audit and non-audit related services:
To the extent required by applicable law, pre-approval by the Audit Committee of the Board is needed for all audit and permissible non-audit services rendered to the Funds and all permissible non-audit services rendered to MFS or MFS Related Entities if the services relate directly to the operations and financial reporting of the Registrant. Pre-approval is currently on an engagement-by-engagement basis. In the event pre-approval of such services is necessary between regular meetings of the Audit Committee and it is not practical to wait to seek pre-approval at the next regular meeting of the Audit Committee, pre-approval of such services may be referred to the Chair of the Audit Committee for approval; provided that the Chair may not pre-approve any individual engagement for such services exceeding $50,000 or multiple engagements for such services in the aggregate exceeding $100,000 in each period between regular meetings of the Audit Committee. Any engagement pre-approved by the Chair between regular meetings of the Audit Committee shall be presented for ratification by the entire Audit Committee at its next regularly scheduled meeting.
Item 4(e)(2):
None, or 0%, of the services relating to the Audit-Related Fees, Tax Fees and All Other Fees paid by the Fund and MFS and MFS Related Entities relating directly to the operations and financial reporting of the Registrant disclosed above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee approval after the start of the engagement with respect to services other than audit, review or attest services, if certain conditions are satisfied).
Item 4(f): Not applicable.
Item 4(h): The Registrant’s Audit Committee has considered whether the provision by a Registrant’s independent registered public accounting firm of non-audit services to MFS and MFS Related Entities that were not pre-approved by the Committee (because such services did not relate directly to the operations and financial reporting of the Registrant) was compatible with maintaining the independence of the independent registered public accounting firm as the Registrant’s principal auditors.
Table of Contents
ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable to the Registrant.
ITEM 6. | SCHEDULE OF INVESTMENTS |
A schedule of investments of the Registrant is included as part of the report to shareholders of such series under Item 1 of this Form N-CSR.
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable to the Registrant.
ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable to the Registrant.
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable to the Registrant.
ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
There were no material changes to the procedures by which shareholders may send recommendations to the Board for nominees to the Registrant’s Board since the Registrant last provided disclosure as to such procedures in response to the requirements of Item 407 (c)(2)(iv) of Regulation S-K or this Item.
ITEM 11. | CONTROLS AND PROCEDURES. |
(a) | Based upon their evaluation of the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as conducted within 90 days of the filing date of this report on Form N-CSR, the registrant’s principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. |
Table of Contents
(b) | There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by the report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
ITEM 12. | EXHIBITS. |
(a) | File the exhibits listed below as part of this form. Letter or number the exhibits in the sequence indicated. |
(1) | Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Code of Ethics attached hereto. |
(2) | A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2): Attached hereto. |
(b) | If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for the purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference: Attached hereto. |
Table of Contents
Notice
A copy of the Amended and Restated Declaration of Trust, as amended, of the Registrant is on file with the Secretary of State of The Commonwealth of Massachusetts and notice is hereby given that this instrument is executed on behalf of the Registrant by an officer of the Registrant as an officer and not individually and the obligations of or arising out of this instrument are not binding upon any of the Trustees or shareholders individually, but are binding only upon the assets and property of the respective constituent series of the Registrant.
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) MFS MUNICIPAL SERIES TRUST | ||
By (Signature and Title)* | ROBERT J. MANNING | |
Robert J. Manning, President | ||
Date: May 15, 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 (Signature and Title)* | ROBERT J. MANNING | |
Robert J. Manning, President (Principal Executive Officer) | ||
Date: May 15, 2008 |
By (Signature and Title)* | MARIA F. DWYER | |
Maria F. Dwyer, Treasurer (Principal Financial Officer and Accounting Officer) | ||
Date: May 15, 2008 |
* | Print name and title of each signing officer under his or her signature. |