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
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MFS MUNICIPAL SERIES TRUST
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(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
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(Address of principal executive offices) (Zip code)
Susan S. Newton
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
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(Name and address of agents for service)
Registrant's telephone number, including area code: (617) 954-5000
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Date of fiscal year end: March 31
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Date of reporting period: March 31, 2006
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ITEM 1. REPORTS TO STOCKHOLDERS.
MFS(R) MUNICIPAL SERIES TRUST 3/31/06
FOR THE STATES OF: ALABAMA,
ARKANSAS, CALIFORNIA, FLORIDA,
GEORGIA, MARYLAND, MASSACHUSETTS
ANNUAL REPORT
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LETTER FROM THE CEO 1
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PORTFOLIO COMPOSITION 2
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MANAGEMENT REVIEW 5
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PERFORMANCE SUMMARY 6
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FUND EXPENSE TABLES 13
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PORTFOLIO OF INVESTMENTS 16
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FINANCIAL STATEMENTS 52
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NOTES TO FINANCIAL STATEMENTS 70
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REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 78
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TRUSTEES AND OFFICERS 79
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BOARD REVIEW OF INVESTMENT
ADVISORY AGREEMENT 81
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PROXY VOTING POLICIES AND INFORMATION 81
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QUARTERLY PORTFOLIO DISCLOSURE 81
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FEDERAL TAX INFORMATION 81
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CONTACT INFORMATION BACK COVER
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THIS REPORT HAS BEEN PREPARED FOR THE GENERAL
INFORMATION OF SHAREHOLDERS. IT IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS ONLY WHEN PRECEDED OR
ACCOMPANIED BY A CURRENT PROSPECTUS.
M F S(SM)
INVESTMENT MANAGEMENT(R)
LETTER FROM THE CEO
[Photo of Robert J. Manning]
Dear Shareholders,
It has been said that change is the only constant in life. As investors have
seen, that theme is still accurate today as we recently have experienced
shifting economic cycles because of natural disasters and political
instability around the globe.
Markets worldwide have fluctuated in the past year as devastating hurricanes
had a dramatic effect on the international economy, particularly on oil
prices. We witnessed political unrest in the Middle East, highlighted by
instability in Iraq, and in Africa, the usually stable Nigeria also
experienced violence. As a result, energy prices have bounced up and down,
with crude oil prices at one point topping a record $70 per barrel.
Such cycles are not uncommon and in fact have almost become the norm in our
everyday lives. What does all of this mean to you as an investor? In times like
these, it helps to know that you're working with a seasoned investment
professional who has experience to guide you through difficult times. At
MFS(R), we believe our investment management team has the knowledge and
confidence to navigate through difficult cycles and at the same time see
through adversity to find investment opportunities for our clients and
shareholders.
Our investment management process, honed over 80 years, combines a unique
concept of teamwork with our unwavering focus on the long term. We firmly
believe that the best way to realize long-term financial goals - be it a
college education, a comfortable retirement, or a secure family legacy - is to
follow a three-pronged approach that focuses on longer time horizons. Allocate
holdings across the major asset classes - including stocks, bonds, and cash.
Diversify within each class to take advantage of different market segments and
investing styles. Rebalance assets regularly to maintain a desired asset
allocation. Of course, these strategies cannot guarantee a profit or protect
against a loss. This long-term approach requires diligence and patience, two
traits that in our experience are essential to capitalizing on the many
opportunities the financial markets can offer - through both up and down
economic cycles.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management(R)
May 15, 2006
The opinions expressed in this letter are those of MFS, and no forecasts can
be guaranteed.
PORTFOLIO COMPOSITION
MFS(R) Alabama Municipal Bond Fund
PORTFOLIO STRUCTURE (i)
Bonds 98.6%
Cash & Other Net Assets 1.4%
TOP FIVE BOND INDUSTRIES (i)
Water/Sewer 17.1%
---------------------------------------------------
Health/Hospitals14.6%
---------------------------------------------------
General Obligations/General Purpose 14.3%
---------------------------------------------------
Municipal-Owned Utilities 10.1%
---------------------------------------------------
Universities/Colleges 8.2%
---------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 70.0%
---------------------------------------------------
AA 13.3%
---------------------------------------------------
A 5.7%
---------------------------------------------------
BBB 7.9%
---------------------------------------------------
B 0.2%
---------------------------------------------------
Not Rated 2.9%
---------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 5.6
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Average Life (m) 14.4 yrs.
---------------------------------------------------
Average Maturity (m) 16.6 yrs.
---------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA+
---------------------------------------------------
Average Short Term Credit Quality A-1
---------------------------------------------------
MFS(R) Arkansas Municipal Bond Fund
PORTFOLIO STRUCTURE (i)
Bonds 98.8%
Cash & Other Net Assets 1.2%
TOP FIVE BOND INDUSTRIES (i)
Universities/Colleges 16.8%
---------------------------------------------------
Water/Sewer 11.4%
---------------------------------------------------
Health/Hospitals 10.5%
---------------------------------------------------
Single Family Housing/State 9.2%
---------------------------------------------------
General Obligations/General Purpose 8.2%
---------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 68.4%
---------------------------------------------------
AA 10.4%
---------------------------------------------------
A 11.6%
---------------------------------------------------
BBB 8.3%
---------------------------------------------------
BB 0.9%
---------------------------------------------------
Not Rated 0.4%
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PORTFOLIO FACTS
Average Duration (d) 6.5
---------------------------------------------------
Average Life (m) 15.6 yrs.
---------------------------------------------------
Average Maturity (m) 16.6 yrs.
---------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA
---------------------------------------------------
Average Short Term Credit Quality A-1
---------------------------------------------------
MFS(R) California Municipal Bond Fund
PORTFOLIO STRUCTURE (i)
Bonds 98.7%
Cash & Other Net Assets 1.3%
TOP FIVE BOND INDUSTRIES (i)
General Obligations/Schools 15.6%
---------------------------------------------------
State Agency 13.7%
---------------------------------------------------
Health/Hospitals 11.1%
---------------------------------------------------
General Obligations/General Purpose 7.9%
---------------------------------------------------
Tax/Assessment 7.4%
---------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 53.1%
---------------------------------------------------
AA 3.2%
---------------------------------------------------
A 18.4%
---------------------------------------------------
BBB 16.8%
---------------------------------------------------
BB 0.6%
---------------------------------------------------
B 0.2%
---------------------------------------------------
CCC 0.6%
---------------------------------------------------
Not Rated 7.1%
---------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 6.6
---------------------------------------------------
Average Life (m) 14.9 yrs.
---------------------------------------------------
Average Maturity (m) 17.5 yrs.
---------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA-
---------------------------------------------------
Average Short Term Credit Quality A-1
---------------------------------------------------
MFS(R) Florida Municipal Bond Fund
PORTFOLIO STRUCTURE (i)
Bonds 98.5%
Cash & Other Net Assets 1.5%
TOP FIVE BOND INDUSTRIES (i)
Health/Hospitals 17.3%
---------------------------------------------------
Water/Sewer 15.6%
---------------------------------------------------
General Obligations/Schools 9.5%
---------------------------------------------------
General Obligations/General Purpose 7.0%
---------------------------------------------------
Airport 5.2%
---------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 60.2%
---------------------------------------------------
AA 10.9%
---------------------------------------------------
A 8.7%
---------------------------------------------------
BBB 10.5%
---------------------------------------------------
BB 0.7%
---------------------------------------------------
B 0.3%
---------------------------------------------------
Not Rated 8.7%
---------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 6.9
---------------------------------------------------
Average Life (m) 17.3 yrs.
---------------------------------------------------
Average Maturity (m) 18.6 yrs.
---------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA
---------------------------------------------------
Average Short Term Credit Quality A-1
---------------------------------------------------
MFS(R) Georgia Municipal Bond Fund
PORTFOLIO STRUCTURE (i)
Bonds 99.6%
Cash & Other Net Assets 0.4%
TOP FIVE BOND INDUSTRIES (i)
Water/Sewer 25.8%
---------------------------------------------------
Universities/Colleges 10.0%
---------------------------------------------------
Health/Hospitals 9.3%
---------------------------------------------------
General Obligations/Schools 7.7%
---------------------------------------------------
Municipal-Owned Utilities 5.9%
---------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 44.9%
---------------------------------------------------
AA 31.4%
---------------------------------------------------
A 9.3%
---------------------------------------------------
BBB 9.9%
---------------------------------------------------
B 0.8%
---------------------------------------------------
Not Rated 3.7%
---------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 6.5
---------------------------------------------------
Average Life (m) 15.2 yrs.
---------------------------------------------------
Average Maturity (m) 16.8 yrs.
---------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA
---------------------------------------------------
Average Short Term Credit Quality A-1
---------------------------------------------------
MFS(R) Maryland Municipal Bond Fund
PORTFOLIO STRUCTURE (i)
Bonds 97.7%
Cash & Other Net Assets 2.3%
TOP FIVE BOND INDUSTRIES (i)
Health/Hospitals 20.2%
---------------------------------------------------
Universities/Colleges 14.3%
---------------------------------------------------
General Obligations/Improvement 14.2%
---------------------------------------------------
Water/Sewer 5.5%
---------------------------------------------------
State Agency 4.5%
---------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 46.7%
---------------------------------------------------
AA 15.2%
---------------------------------------------------
A 18.9%
---------------------------------------------------
BBB 12.2%
---------------------------------------------------
BB 0.3%
---------------------------------------------------
B 0.3%
---------------------------------------------------
Not Rated 6.4%
---------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 6.1
---------------------------------------------------
Average Life (m) 14.7 yrs.
---------------------------------------------------
Average Maturity (m) 16.2 yrs.
---------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA
---------------------------------------------------
Average Short Term Credit Quality A-1
---------------------------------------------------
MFS(R) Massachusetts Municipal Bond Fund
PORTFOLIO STRUCTURE (i)
Bonds 99.1%
Cash & Other Net Assets 0.9%
TOP FIVE BOND INDUSTRIES (i)
Universities/Colleges 20.2%
---------------------------------------------------
General Obligations/General Purpose 13.6%
---------------------------------------------------
Health/Hospitals 11.1%
---------------------------------------------------
Water/Sewer 6.4%
---------------------------------------------------
General Obligations/Improvement 5.4%
---------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 49.1%
---------------------------------------------------
AA 26.6%
---------------------------------------------------
A 7.8%
---------------------------------------------------
BBB 13.2%
---------------------------------------------------
BB 1.0%
---------------------------------------------------
Not Rated 2.3%
---------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 6.4
---------------------------------------------------
Average Life (m) 15.3 yrs.
---------------------------------------------------
Average Maturity (m) 17.9 yrs.
---------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA
---------------------------------------------------
Average Short Term Credit Quality 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 graphical presentation, the bond component includes
both accrued interest amounts and the equivalent expo sure 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 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 b y 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 th ose portfolios that hold a
security which is not rated by any of the three agencies, the security is
considered Not Rated. Holding s in U.S. Treasuries and government agency
mortgage-backed securities, if any, are included in the "AAA"-rating
category. Percentages ar e based on the total market value of investments as
of 3/31/06.
Percentages are based on net assets as of 3/31/06, unless otherwise noted.
The portfolios are actively managed, and current holdings may be different.
MANAGEMENT REVIEW
FACTORS THAT AFFECTED PERFORMANCE
During the period, our duration(d) positioning relative to our benchmark, the
Lehman Brothers Municipal Bond Index (Lehman Index), had a neutral effect on
relative performance for all funds, except the Alabama fund, for which the
effect was positive.
Yield curve(y) positioning in all of the funds was a strong contributor to
relative performance, excluding the Alabama fund, where the effect was negative.
Compared to the benchmark, all of the funds, excluding the Alabama and Georgia
funds, were more heavily weighted in bonds on the long end of the yield curve
(represented by bonds with durations of 11- to 25-years). This helped relative
results during the period because long-term municipal bonds increased in price
as their yields flattened. The Georgia fund was underweighted in bonds on the
short end of the curve (represented by bonds with durations of 0- to 4-years).
This positioning helped relative returns as bonds on the short-end of the curve
suffered price declines as their yields increased. For the Alabama fund,
positioning along the middle part of the yield curve (represented by bonds with
durations of 8- to 11-years) hurt relative performance.
Credit quality had a neutral effect on relative results for all funds,
excluding the California, Florida, and Maryland funds, for which the effect
was positive. These three funds benefited from holding lower-quality "BBB"-
rated(s) securities and below-investment-grade debt. During the period,
spreads in these credit sectors narrowed due to strong demands for higher-
yielding securities, causing prices on these securities to appreciate. (The
Lehman Index is composed primarily of higher-grade securities with no bonds
rated lower than "BBB").
Overall, sector allocation had a positive effect on relative performance for
all funds, excluding the Arkansas, Alabama, Georgia and Massachusetts funds,
where the effect was neutral. Notable positive contributions to sector
allocation came from our overweighted position in the housing sector in the
Arkansas fund. In the Florida and California funds, the health care sector
boosted relative results. On the negative side, security selection in the
credit enhanced sector was an area of weakness in many of the funds.
Underweighting the strong-performing tobacco sector also hurt relative results
for all funds, except the California fund, where our relative positioning in
the sector helped.
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.
(s) Bonds rated by S&P as "BBB" or higher are considered investment grade;
bonds rated "BB" or lower are considered non-investment grade.
(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
and 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.
PERFORMANCE SUMMARY THROUGH 3/31/06
The following information illustrates the historical performance of each
fund's original share class in comparison to various market indicators.
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 average relevant state municipal debt fund tracked
by Lipper Inc., an independent firm that reports mutual fund performance. For
those states where Lipper does not track state specific fund performance, we
have provided the average "other state" municipal debt fund returns. Each
fund's results have also 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. FOR MOST RECENT MONTH-END
PERFORMANCE, PLEASE VISIT MFS.COM. 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 3/31/06)
Lehman
MFS Alabama Brothers
Municipal Bond Municipal Bond
Fund-Class A Index
3/96 $ 9,525 $10,000
3/97 10,081 10,547
3/98 11,062 11,677
3/99 11,618 12,400
3/00 11,523 12,390
3/01 12,790 13,744
3/02 13,181 14,261
3/03 14,508 15,671
3/04 15,248 16,590
3/05 15,614 17,032
3/06 16,078 17,682
MFS(R) ALABAMA MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date 1-yr 5-yr 10-yr
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A 2/01/90 2.97% 4.68% 5.37%
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B 9/07/93 2.20% 3.90% 4.58%
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AVERAGE ANNUAL
Comparative Benchmarks
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Average Alabama municipal debt fund (l) 2.71% 4.46% 4.77%
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Lehman Brothers Municipal Bond Index (f) 3.81% 5.17% 5.86%
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AVERAGE ANNUAL WITH SALES CHARGE
Share class
- ------------------------------------------------------------------------------
A -1.92% 3.67% 4.86%
With Initial Sales Charge (4.75%)
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B -1.74% 3.56% 4.58%
With CDSC (Declining over six years from 4% to 0%)
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CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
Lehman
MFS Arkansas Brothers
Municipal Bond Municipal Bond
Fund-Class A Index
3/96 $ 9,525 $10,000
3/97 9,989 10,547
3/98 10,994 11,677
3/99 11,499 12,400
3/00 11,472 12,390
3/01 12,671 13,744
3/02 13,185 14,261
3/03 14,439 15,671
3/04 15,092 16,590
3/05 15,414 17,032
3/06 15,903 17,682
MFS(R) ARKANSAS MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date 1-yr 5-yr 10-yr
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A 2/03/92 3.17% 4.65% 5.26%
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B 9/07/93 2.39% 3.83% 4.45%
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AVERAGE ANNUAL
Comparative Benchmarks
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Average "other state" municipal debt fund (l) 3.82% 4.88% 5.40%
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Lehman Brothers Municipal Bond Index (f) 3.81% 5.17% 5.86%
- ------------------------------------------------------------------------------
AVERAGE ANNUAL WITH SALES CHARGE
Share class
- ------------------------------------------------------------------------------
A -1.73% 3.64% 4.75%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -1.56% 3.49% 4.45%
With CDSC (Declining over six years from 4% to 0%)
- ------------------------------------------------------------------------------
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
Lehman
MFS California Brothers
Municipal Bond Municipal Bond
Fund-Class A Index
3/96 $ 9,525 $10,000
3/97 9,959 10,547
3/98 11,105 11,677
3/99 11,836 12,400
3/00 11,669 12,390
3/01 12,928 13,744
3/02 13,329 14,261
3/03 14,634 15,671
3/04 15,397 16,590
3/05 15,881 17,032
3/06 16,551 17,682
MFS(R) CALIFORNIA MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date 1-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 6/18/85 4.22% 5.07% 5.68%
- ------------------------------------------------------------------------------
B 9/07/93 3.44% 4.26% 4.85%
- ------------------------------------------------------------------------------
C 1/03/94 3.29% 4.12% 4.72%
- ------------------------------------------------------------------------------
AVERAGE ANNUAL
Comparative Benchmarks
- ------------------------------------------------------------------------------
Average California municipal debt fund (l) 4.47% 4.85% 5.50%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index (f) 3.81% 5.17% 5.86%
- ------------------------------------------------------------------------------
AVERAGE ANNUAL WITH SALES CHARGE
Share class
- ------------------------------------------------------------------------------
A -0.73% 4.05% 5.17%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -0.53% 3.92% 4.85%
With CDSC (Declining over six years from 4% to 0%)
- ------------------------------------------------------------------------------
C 2.30% 4.12% 4.72%
With CDSC (1% for 12 months) (x)
- ------------------------------------------------------------------------------
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
(x) Assuming redemption within one year from the end of the prior month of
purchase.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
Lehman
MFS Florida Brothers
Municipal Bond Municipal Bond
Fund-Class A Index
3/96 $ 9,525 $10,000
3/97 9,851 10,547
3/98 10,853 11,677
3/99 11,423 12,400
3/00 11,265 12,390
3/01 12,473 13,744
3/02 12,912 14,261
3/03 14,126 15,671
3/04 14,860 16,590
3/05 15,342 17,032
3/06 15,977 17,682
MFS(R) FLORIDA MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date 1-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 2/03/92 4.14% 5.08% 5.31%
- ------------------------------------------------------------------------------
B 9/07/93 3.35% 4.25% 4.47%
- ------------------------------------------------------------------------------
AVERAGE ANNUAL
Comparative Benchmarks
- ------------------------------------------------------------------------------
Average Florida municipal debt fund (l) 3.11% 4.28% 5.07%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index (f) 3.81% 5.17% 5.86%
- ------------------------------------------------------------------------------
AVERAGE ANNUAL WITH SALES CHARGE
Share class
- ------------------------------------------------------------------------------
A -0.81% 4.06% 4.80%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -0.64% 3.91% 4.47%
With CDSC (Declining over six years from 4% to 0%)
- ------------------------------------------------------------------------------
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
Lehman
MFS Georgia Brothers
Municipal Bond Municipal Bond
Fund-Class A Index
3/96 $ 9,525 $10,000
3/97 9,951 10,547
3/98 11,047 11,677
3/99 11,589 12,400
3/00 11,436 12,390
3/01 12,671 13,744
3/02 13,055 14,261
3/03 14,357 15,671
3/04 15,065 16,590
3/05 15,407 17,032
3/06 15,797 17,682
MFS(R) GEORGIA MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date 1-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 6/06/88 2.53% 4.51% 5.19%
- ------------------------------------------------------------------------------
B 9/07/93 2.05% 3.78% 4.44%
- ------------------------------------------------------------------------------
AVERAGE ANNUAL
Comparative Benchmarks
- ------------------------------------------------------------------------------
Average Georgia municipal debt fund (l) 2.92% 4.19% 4.97%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index (f) 3.81% 5.17% 5.86%
- ------------------------------------------------------------------------------
AVERAGE ANNUAL WITH SALES CHARGE
Share class
- ------------------------------------------------------------------------------
A -2.34% 3.50% 4.68%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -1.89% 3.44% 4.44%
With CDSC (Declining over six years from 4% to 0%)
- ------------------------------------------------------------------------------
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
Lehman
MFS Maryland Brothers
Municipal Bond Municipal Bond
Fund-Class A Index
3/96 $ 9,525 $10,000
3/97 9,882 10,547
3/98 10,926 11,677
3/99 11,466 12,400
3/00 11,320 12,390
3/01 12,482 13,744
3/02 12,930 14,261
3/03 14,121 15,671
3/04 14,822 16,590
3/05 15,171 17,032
3/06 15,634 17,682
MFS(R) MARYLAND MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date 1-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 10/31/84 3.06% 4.61% 5.08%
- ------------------------------------------------------------------------------
B 9/07/93 2.30% 3.93% 4.40%
- ------------------------------------------------------------------------------
AVERAGE ANNUAL
Comparative Benchmarks
- ------------------------------------------------------------------------------
Average Maryland municipal debt fund (l) 2.96% 4.17% 4.79%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index (f) 3.81% 5.17% 5.86%
- ------------------------------------------------------------------------------
AVERAGE ANNUAL WITH SALES CHARGE
Share class
- ------------------------------------------------------------------------------
A -1.84% 3.59% 4.57%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -1.62% 3.59% 4.40%
With CDSC (Declining over six years from 4% to 0%)
- ------------------------------------------------------------------------------
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
Lehman
MFS Massachusetts Brothers
Municipal Bond Municipal Bond
Fund-Class A Index
3/96 $ 9,525 $10,000
3/97 9,944 10,547
3/98 10,934 11,677
3/99 11,494 12,400
3/00 11,313 12,390
3/01 12,494 13,744
3/02 12,860 14,261
3/03 14,200 15,671
3/04 14,885 16,590
3/05 15,278 17,032
3/06 15,863 17,682
MFS(R) MASSACHUSETTS MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date 1-yr 5-yr 10-yr
- ------------------------------------------------------------------------------
A 4/09/85 3.83% 4.89% 5.23%
- ------------------------------------------------------------------------------
B 9/07/93 3.16% 4.23% 4.55%
- ------------------------------------------------------------------------------
AVERAGE ANNUAL
Comparative Benchmarks
- ------------------------------------------------------------------------------
Average Massachusetts municipal debt fund (l) 3.09% 4.41% 5.00%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index (f) 3.81% 5.17% 5.86%
- ------------------------------------------------------------------------------
AVERAGE ANNUAL WITH SALES CHARGE
Share class
A -1.10% 3.88% 4.72%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -0.81% 3.89% 4.55%
With CDSC (Declining over six years from 4% to 0%)
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
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.
FUND EXPENSE TABLES
FUND EXPENSES BORNE BY THE SHAREHOLDERS DURING THE PERIOD,
OCTOBER 1, 2005, THROUGH MARCH 31, 2006.
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 redemption fees on certain exchanges and redemptions, 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 funds 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, 2005 through March 31, 2006.
ACTUAL EXPENSES
The first line for each share class in the tables below 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 tables below 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) or redemption fees. 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(R) ALABAMA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------
Actual 0.87% $1,000.00 $1,008.60 $4.36
A --------------------------------------------------------------------
Hypothetical (h) 0.87% $1,000.00 $1,020.59 $4.38
- -------------------------------------------------------------------------------
Actual 1.62% $1,000.00 $1,004.90 $8.10
B --------------------------------------------------------------------
Hypothetical (h) 1.62% $1,000.00 $1,016.85 $8.15
- -------------------------------------------------------------------------------
MFS(R) ARKANSAS MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------
Actual 0.66% $1,000.00 $1,008.40 $3.30
A --------------------------------------------------------------------
Hypothetical (h) 0.66% $1,000.00 $1,021.64 $3.33
- -------------------------------------------------------------------------------
Actual 1.42% $1,000.00 $1,004.50 $7.10
B --------------------------------------------------------------------
Hypothetical (h) 1.42% $1,000.00 $1,017.85 $7.14
- -------------------------------------------------------------------------------
MFS(R) CALIFORNIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------
Actual 0.63% $1,000.00 $1,009.40 $3.16
A --------------------------------------------------------------------
Hypothetical (h) 0.63% $1,000.00 $1,021.79 $3.18
- -------------------------------------------------------------------------------
Actual 1.38% $1,000.00 $1,005.60 $6.90
B --------------------------------------------------------------------
Hypothetical (h) 1.38% $1,000.00 $1,018.05 $6.94
- -------------------------------------------------------------------------------
Actual 1.53% $1,000.00 $1,004.90 $7.65
C --------------------------------------------------------------------
Hypotheti cal (h) 1.53% $1,000.00 $1,017.30 $7.70
- -------------------------------------------------------------------------------
MFS(R) FLORIDA MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------
Actual 0.62% $1,000.00 $1,012.50 $3.11
A --------------------------------------------------------------------
Hypothetical (h) 0.62% $1,000.00 $1,021.84 $3.13
- -------------------------------------------------------------------------------
Actual 1.39% $1,000.00 $1,008.60 $6.96
B -------------------------------------------------------------------
Hypothetical (h) 1.39% $1,000.00 $1,018.00 $6.99
- -------------------------------------------------------------------------------
MFS(R) GEORGIA MUNICIPAL BOND FUND
- ------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------
Actual 0.94% $1,000.00 $1,003.70 $4.70
A -------------------------------------------------------------------
Hypothetical (h) 0.94% $1,000.00 $1,020.24 $4.73
- -------------------------------------------------------------------------------
Actual 1.69% $1,000.00 $1,002.80 $8.44
B -------------------------------------------------------------------
Hypothetical (h) 1.69% $1,000.00 $1,016.50 $8.50
- -------------------------------------------------------------------------------
MFS(R) MARYLAND MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------
Actual 0.93% $1,000.00 $1,008.60 $4.66
A -------------------------------------------------------------------
Hypothetical (h) 0.93% $1,000.00 $1,020.29 $4.68
- -------------------------------------------------------------------------------
Actual 1.58% $1,000.00 $1,004.40 $7.90
B -------------------------------------------------------------------
Hypothetical (h) 1.58% $1,000.00 $1,017.05 $7.95
- -------------------------------------------------------------------------------
MFS(R) MASSACHUSETTS MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------
Actual 0.90% $1,000.00 $1,009.70 $4.51
A -------------------------------------------------------------------
Hypothetical (h) 0.90% $1,000.00 $1,020.44 $4.53
- -------------------------------------------------------------------------------
Actual 1.55% $1,000.00 $1,006.50 $7.75
B -------------------------------------------------------------------
Hypothetical (h) 1.55% $1,000.00 $1,017.20 $7.80
- -------------------------------------------------------------------------------
(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) ALABAMA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 97.5%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 2.4% Alabama Docks Department Facilities Rev., MBIA, 5.5%, 2022 $ 1,000,000 $ 1,057,970
Alabama Port Authority Docks Facility MBIA, 5.25%, 2026 1,000,000 1,040,060
------------
$ 2,098,030
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 14.1% Athens, AL, Warrants, XLCA, 5%, 2031 $ 860,000 $ 881,414
Boaz, AL, School Warrants, "A", XLCA, 5%, 2025 1,000,000 1,034,730
Boaz, AL, School Warrants, "A", XLCA, 5%, 2029 650,000 670,768
Fairfield, AL, Refunding Warrants, AMBAC, 5.25%, 2025 1,030,000 1,091,543
Gadsden, AL, Warrants, "B", AMBAC, 5.125%, 2028 1,500,000 1,581,420
Hoover, AL, "B", 6%, 2010 (c) 500,000 544,690
Houston County, AL, AMBAC, 6.25%, 2009 (c) 750,000 827,190
Jefferson County, AL, School Warrants, FSA, 5.5%, 2020 1,750,000 1,846,810
Mobile County, AL, 6%, 2009 (c) 1,345,000 1,440,791
Morgan County, AL, Warrants, AMBAC, 5%, 2028 1,380,000 1,427,734
Russell County, AL, Warrants, "A", AMBAC, 5%, 2008 (c) 1,000,000 1,039,960
------------
$ 12,387,050
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 5.5% Birmingham, AL, "A", 5.75%, 2017 $ 1,000,000 $ 1,079,260
Birmingham, AL, "B", 5.75%, 2009 (c) 1,820,000 1,950,203
Birmingham, AL, "B", 5.75%, 2019 180,000 191,713
Montgomery, AL, Warrants, MBIA, 5.1%, 2021 1,005,000 1,058,305
Puerto Rico Municipal Finance Agency, RITES, FSA, 7.101%, 2017 (z)(v) 500,000 567,820
------------
$ 4,847,301
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 5.5% Bessemer, AL, School Warrants, AMBAC, 5.5%, 2020 $ 2,015,000 $ 2,160,120
Phenix City, AL, AMBAC, 5.65%, 2021 1,500,000 1,625,025
Tuscaloosa, AL, Warrants, 5.7%, 2018 1,000,000 1,069,210
------------
$ 4,854,355
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Alabama Special Care Facilities Financing Authority (Daughters of
Hospitals - 14.4% Charity), AMBAC, ETM, 5%, 2025 (c) $ 1,500,000 $ 1,515,615
Birmingham Medical Center, East Alabama, Special Health Care
Facilities, Eastern Health Systems, "B", 5%, 2018 500,000 495,900
Birmingham, AL, Baptist Health Systems, "A", (Baptist Medical
Center), 5.625%, 2015 300,000 316,119
Birmingham, AL, Baptist Medical Center, Special Care Facilities Rev.
(Baptist Health Systems, Inc.), "A", 5%, 2030 200,000 195,286
Health Care Authority For Baptist Health, "D", 5%, 2021 400,000 408,244
Houston County, AL, Health Care Authority, AMBAC, 6.125%, 2022 1,000,000 1,082,020
Huntsville, AL, Health Care Authority Rev., 5.625%, 2026 950,000 988,200
Huntsville, AL, Health Care Authority Rev., "A", MBIA, 5%, 2023 1,000,000 1,025,490
Lauderdale County & Florence, AL, Health Care Authority Rev. (Eliza
Coffee Memorial Hospital), MBIA, 5.75%, 2008 (c) 1,000,000 1,046,450
Lauderdale County & Florence, AL, Health Care Authority Rev., "A",
(Coffee Health Group), MBIA, 5.75%, 2014 1,000,000 1,064,850
Marshall County, AL, Health Care Authority Rev., "A", 5.75%, 2032 1,000,000 1,040,060
Montgomery, AL, Medical Clinic Board Rev. (Jackson Hospital &
Clinic), AMBAC, 5.875%, 2016 1,000,000 1,022,390
Montgomery, AL, Special Care Facilities, Financing Authority Rev.
(Baptist Health), "A-2", MBIA, 0% to 2007, 5% to 2014 (c) 1,135,000 1,107,544
Montgomery, AL, Special Care Facilities, Financing Authority Rev.
(Baptist Health), "C", 5.25%, 2014 (c) 1,000,000 1,087,980
Valley, AL, Special Care Facilities Financing Authority, "A"
(Lanier Memorial Hospital), 5.65%, 2022 225,000 219,926
------------
$ 12,616,074
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Mobile County, AL, Industrial Development Authority
Metals - 0.6% Rev. (Ipsco, Inc.), 6.875%, 2030 $ 500,000 $ 530,990
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Other - 0.5% Fairfield, AL, Environment Improvement Rev. (USX Corp.), 5.4%, 2016 $ 400,000 $ 424,068
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Butler, AL, Industrial Development Board, Solid Waste Disposal Rev.
Paper - 3.6% (Georgia Pacific Corp.), 5.75%, 2028 $ 200,000 $ 196,272
Camden, AL, Industrial Development Board Exempt Rev., "B"
(Weyerhaeuser), 6.375%, 2024 500,000 542,255
Mobile, AL, Industrial Development Board Improvement Rev., "A"
(International Paper Co.), 6.35%, 2016 650,000 689,585
Mobile, AL, Industrial Development Board Improvement Rev., "B"
(International Paper Co.), 6.45%, 2019 350,000 371,028
Phenix City, AL, Environmental Improvement Rev., "A" (MeadWestvaco),
6.35%, 2035 750,000 810,068
Selma, AL, Industrial Development Board, "A" (International
Paper Co.), 6.7%, 2018 500,000 536,945
------------
$ 3,146,153
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Birmingham, AL, Downtown Redevelopment Authority Rev.
Other - 2.8% (Social Security Administrative Building), ETM, 12.5%, 2010 (c) $ 1,410,000 $ 1,639,802
East Central Alabama Industrial Development Authority Rev.,
Unrefunded Balance, AMBAC, 5.4%, 2015 790,000 820,060
------------
$ 2,459,862
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Alabama Housing Finance Authority, Multi-Family Residential
Revenue - 2.5% Development Rev., "K", (South Bay Apartments), FNMA, 5.875%, 2021 $ 960,000 $ 1,001,213
Alabama Housing Finance Authority, Multi-Family Residential
Development Rev., FHA, 7.25%, 2023 1,095,000 1,106,059
Birmingham, AL, Multi-Family Housing Rev., "C" (Beaconview
Apartments), 8%, 2030 (d) 395,000 39,500
Puerto Rico Housing Finance Corp., Multi-Family Mortgage
Rev., "A-1", FHA, LOC, 7.5%, 2015 70,000 70,155
------------
$ 2,216,927
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Alabama Housing Finance Authority, Collateral Home Mortgage Bond
State - 1.4% Program II, "B", 5.15%, 2019 $ 65,000 $ 65,714
Alabama Housing Finance Authority, Single Family Mortgage Rev.,
Collateral Home Mortgage Bond Program I, "B-1", 5.7%, 2015 420,000 428,534
Alabama Housing Finance Authority, Single Family Mortgage Rev.,
Collateral Home Mortgage Bond Program II, "A-2", GNMA, 5.4%, 2022 660,000 673,853
Alabama Housing Finance Authority, Single Family Mortgage Rev.,
Collateral Home Mortgage Bond Program II, "B", 5.15%, 2019 70,000 70,769
------------
$ 1,238,870
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies -
7.4% Alabama Building Renovation Authority, AMBAC, 6%, 2014 $ 1,515,000 $ 1,646,608
Alabama Public School & College, Capital Improvement, "A", 5%, 2019 500,000 517,930
Alabama Public School & College, Capital Improvement, "C", 5.75%, 2017 1,000,000 1,074,340
Alabama Public School & College, Capital Improvement, "C", 5.75%, 2018 1,035,000 1,111,942
Jefferson County, AL, Board of Education, "A", FSA, 5.8%, 2007 (c) 865,000 898,104
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2013 (z)(v) 500,000 591,270
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2016 (z)(v) 500,000 606,740
------------
$ 6,446,934
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.2% Virgin Islands Public Finance Authority, "A", 5.5%, 2018 $ 1,000,000 $ 1,037,990
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.5% Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico,
5.375%, 2033 $ 455,000 $ 466,425
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Alabama Board of Education Rev., Refunding & Improvement (Southern
8.1% Union State Community College), MBIA, 5%, 2022 $ 1,000,000 $ 1,036,370
Alabama Private Colleges & Universities, Facilities Authority Rev.
(Tuskegee University), ASST GTY, 4.75%, 2026 1,000,000 1,004,670
Auburn University, AL, General Fee Rev., AMBAC, 5%, 2034 1,000,000 1,027,570
Auburn University, General Fee Rev., AMBAC, 5%, 2029 1,000,000 1,035,140
Mobile, AL, Spring Hill College, Educational Building Authority
Rev., "A", 5.25%, 2034 1,360,000 1,425,824
University of Alabama, General Rev., "A", MBIA, 5%, 2029 1,000,000 1,036,820
University of Alabama, University Rev., General Fee, FGIC, 5%, 2021 525,000 547,685
------------
$ 7,114,079
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 10.1% Alabama Municipal Electric Power Authority, "A", MBIA, 5%, 2023 $ 1,000,000 $ 1,041,020
Guam Power Authority Rev., RITES, AMBAC, 6.565%, 2013 (z)(v) 500,000 559,090
Guam Power Authority Rev., RITES, AMBAC, 6.065%, 2018 (z)(v) 4,500,000 4,828,950
Puerto Rico Electric Power Authority Rev., "II", 5.25%, 2031 875,000 909,615
Southeastern Alabama Gas District Systems Rev., "A", AMBAC, 5.5%, 2020 1,000,000 1,073,410
Tuskegee, AL, Utilities Board, AMBAC, 5.5%, 2022 400,000 412,328
------------
$ 8,824,413
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Alabama Drinking Water Finance Authority, Revolving Fund Loan, "A",
Revenue - 16.9% AMBAC, 6%, 2021 $ 725,000 $ 784,573
Alabama Drinking Water Finance Authority, Revolving Fund Loan, "C",
AMBAC, 5.75%, 2018 1,000,000 1,077,140
Alabama Water Pollution Control Authority, Revolving Fund Loan, "B",
AMBAC, 5.5%, 2016 1,000,000 1,006,750
Alabama Water Pollution Control Authority, Revolving Fund Loan, "B",
AMBAC, 5.5%, 2020 1,380,000 1,389,315
Alabama Water Pollution Control Authority, Revolving Fund Loan,
AMBAC, 5.75%, 2019 1,000,000 1,061,260
Alabaster, AL, Sewer Rev., AMBAC, 5%, 2029 750,000 775,942
Bessemer, AL, Water Rev., Warrants, "A", AMBAC, 5.75%, 2026 1,000,000 1,024,720
Birmingham, AL, Waterworks & Sewer Board Rev., "A", FGIC, 5%, 2034 1,365,000 1,415,136
Jasper, AL, Waterworks & Sewer Board, "A", AMBAC, 5.2%, 2020 750,000 789,435
Jefferson County, AL, Sewer Rev., Warrants, "D", FGIC, 5.7%, 2007 (c) 1,000,000 1,026,520
Limestone County, AL, Water Authority, FGIC, 5.5%, 2009 (c) 2,650,000 2,775,398
Madison, AL, Water & Wastewater Board, MBIA, 5.5%, 2019 1,000,000 1,031,820
Orange Beach, AL, Water, Sewer, & Fire Protection Authority Rev.,
MBIA, 5%, 2030 500,000 519,630
Ozark, AL, Utilities Board Water & Sewer Rev., AMBAC, 5%, 2031 100,000 103,936
------------
$ 14,781,575
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $81,250,077) $ 85,491,096
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.5%
- ---------------------------------------------------------------------------------------------------------------------------------
Burke County, GA, Development Authority Pollution Control Rev.
(Oglethorpe Power Corp.), "A", 3.22%, due 4/05/06 $ 100,000 $ 100,000
Jefferson County, AL, Sewer Rev., Warrants, "B-4", 3.22%, due 4/06/06 300,000 300,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 400,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $81,650,077) $ 85,891,096
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 2.0% 1,755,786
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $ 87,646,882
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $2,000,000 Fixed - 3 Year Floating - 7 day $27,467
BMA Swap Index (2.795%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
7/13/16 USD 1,000,000 Fixed - 10 Year Floating - 7 Day 21,024
BMA Swap Index (3.742%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/22/18 USD 1,000,000 Fixed - 12 Year Floating - 7 Day 19,031
BMA Swap Index (3.861%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
8/02/21 USD 1,000,000 Fixed - 15 Year Floating - 7 Day 15,981
BMA Swap Index (4.011%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
9/07/26 USD 1,000,000 Floating - 3 Month Fixed - 20 Year (26,909)
LIBOR Swap Index LIBOR Swap Index (5.268%)
- ------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 750,000 Floating - 3 Month Fixed - 20 Year (11,622)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- ------------------------------------------------------------------------------------------------------------------------------
$44,972
=======
At March 31, 2006, the fund had sufficient cash and/or securities to cover any commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) ARKANSAS MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 97.6%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport and Port
Revenue - 0.6% Little Rock, AR, Airport Rev., "A", FSA, 5.25%, 2019 $ 800,000 $ 831,872
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 8.2% Arkansas College Savings, "A", 0%, 2017 $ 1,840,000 $ 1,122,455
Commonwealth of Puerto Rico, Infrastructure, RITES, ETM,
7.099%, 2019 (z)(c)(v) 1,250,000 1,441,850
Commonwealth of Puerto Rico, Public Improvement, "A", CIFG, 5%, 2034 1,000,000 1,031,260
Commonwealth of Puerto Rico, RITES, MBIA, 7.599%, 2020 (z)(v) 3,000,000 3,463,440
Puerto Rico Public Buildings Authority Rev. (State Office Building),
"F", XLCA, 5.25%, 2025 2,000,000 2,224,520
Sebastian County, AR, Community Refunding & Improvement, AMBAC,
5.6%, 2007 (c) 1,500,000 1,544,100
------------
$ 10,827,625
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 3.4% Puerto Rico Municipal Finance Agency, RITES, FSA, 7.101%, 2017 (z)(v) $ 735,000 $ 834,695
Puerto Rico Municipal Finance Agency, RITES, FSA, 7.101%, 2018 (z)(v) 3,250,000 3,690,830
------------
$ 4,525,525
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 5.1% Arkansas, Capital Appreciation, College Savings, "B", 0%, 2012 $ 1,200,000 $ 928,548
Arkansas, Capital Appreciation, College Savings, "B", 0%, 2013 1,000,000 737,550
Arkansas, Capital Appreciation, College Savings, "B", 0%, 2014 1,150,000 807,679
Arkansas, Capital Appreciation, College Savings, "B", 0%, 2015 1,100,000 739,805
Little Rock, AR, School District Construction, "C", FSA, 5%, 2017 1,000,000 1,038,070
Little Rock, AR, School District, "A", FSA, 5.4%, 2017 1,000,000 1,054,180
Northwest Arkansas Community College District, Capital Improvement,
AMBAC, 5%, 2028 1,380,000 1,437,325
------------
$ 6,743,157
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Arkansas Development Finance Authority Rev. (Washington Regional
Hospitals - 10.3% Medical Center), 7.25%, 2010 (c) $ 500,000 $ 561,360
Arkansas Development Finance Authority, Health Refunding (Sister of
Mercy), "A", MBIA, 5%, 2013 4,340,000 4,500,406
Batesville, AR, Medical District Rev. (White River Medical Center),
5.5%, 2024 750,000 772,598
Baxter County, AR, Hospital Rev., Refunding & Improvement,
"B", 5.6%, 2021 1,500,000 1,548,150
Crittenden County, AR, Hospital Rev., Refunding &
Improvement, 7.15%, 2025 750,000 749,625
Jefferson County, AR, Hospital Rev., Refunding & Improvement
(Regional Medical Center), 5.8%, 2021 1,000,000 1,064,360
Little Rock, AR, Health Facilities Hospital Board Rev. (Baptist
Medical Center), 6.9%, 2009 400,000 434,912
North Little Rock, AR, Baptist Health Facilities, 5.7%, 2022 500,000 518,815
Pulaski County, AR, Hospital Rev. (Arkansas Childrens Hospital),
"B", 5.25%, 2015 500,000 522,555
Pulaski County, AR, Hospital Rev. (Arkansas Childrens Hospital),
"B", 5.25%, 2016 1,000,000 1,039,980
Sebastian County, AR, Health Facilities Improvement (Sparks
Regional Medical Center), "A", 5.25%, 2021 1,000,000 1,027,910
Washington County, AR, Hospital Rev., Regional Medical Center,
"A", 5%, 2035 1,000,000 986,400
------------
$ 13,727,071
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Arkansas Development Finance Authority Rev. (Evangelical Lutheran
Term Care - 1.0% Project), "B", AMBAC, 5.375%, 2019 $ 1,315,000 $ 1,389,166
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Virgin Islands Public Finance Authority, Refinery Facilities Rev.
Other - 0.3% (Hovensa Refinery), 5.875%, 2022 $ 335,000 $ 353,264
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Arkansas State Development Finance Authority, Industrial Facilities
Paper - 1.2% Rev. (Potlatch Corp.), "A", 7.75%, 2025 $ 250,000 $ 281,885
Camden, AR, Environmental Improvement Rev. (International
Paper Co.), "A", 5%, 2018 750,000 741,015
Pine Bluff, AR, Environmental Improvement (International
Paper Co.), "A", 5.55%, 2022 250,000 253,260
Pine Bluff, AR, Environmental Refunding (International
Paper Co.), "A", 6.7%, 2020 300,000 324,567
------------
$ 1,600,727
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Fort Smith, AR, Residential Housing (Gorman Towers), "A",
Revenue - 0.8% GNMA, 5.45%, 2037 $ 1,000,000 $ 1,023,150
- ---------------------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax
Revenue - 0.7% Stuttgart, AR, Sales and Use Tax Rev., AMBAC, 4.2%, 2031 $ 970,000 $ 943,441
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Harrison, AR, Residential Housing Facilities Board, Single Family
Local - 7.5% Mortgage Rev., FGIC, ETM, 7.4%, 2011 (c) $ 4,000,000 $ 4,661,360
Lonoke County, AR, Residential Housing Facilities, FNMA, 7.9%, 2011 92,864 94,754
Pulaski County, AR, Public Facilities Board Rev., "C", FNMA,
0%, 2014 2,750,000 1,857,020
Pulaski County, AR, Public Facilities Board, "A", GNMA, 5.75%, 2034 1,865,000 1,906,664
Sherwood, AR, Residential Housing Facilities Board, Single Family
Rev., MBIA, 7.5%, 2010 (c) 1,250,000 1,441,000
------------
$ 9,960,798
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 9.1% Arkansas Development Finance Authority Rev., "1", 0%, 2011 $ 290,000 $ 192,055
Arkansas Development Finance Authority Single Family Mortgage,
"B", GNMA, 4.85%, 2031 1,000,000 989,160
Arkansas Development Finance Authority, Mortgage Backed Securities
Program, "B", GNMA, 5%, 2029 225,000 228,377
Arkansas Development Finance Authority, Mortgage Backed Securities
Program, "C", GNMA, 5.35%, 2027 1,560,000 1,578,283
Arkansas Development Finance Authority, Mortgage Backed Securities
Program, "E", GNMA, 5.4%, 2034 810,000 827,982
Arkansas Development Finance Authority, Single Family Mortgage
Rev., "B", GNMA, 5.125%, 2024 445,000 451,817
Arkansas Development Finance Authority, Single Family Mortgage
Rev., "B", GNMA, 5.25%, 2035 3,055,000 3,115,520
Arkansas Finance Authority, Mortgage Backed Securities Program,
"B", GNMA, 4.45%, 2034 1,265,000 1,266,632
Arkansas Finance Authority, Single Family, Mortgage Backed Securities
Program, 5.3%, 2023 520,000 526,864
Arkansas Finance Authority, Single Family, Mortgage Backed Securities
Program, "D", GNMA, 5.85%, 2024 1,055,000 1,069,454
Arkansas Finance Authority, Single Family, Mortgage Backed Securities
Program, "I", GNMA, 5.3%, 2033 460,000 464,062
Arkansas Housing Development Agency, Single Family Mortgage Program,
ETM, 8.375%, 2011 (c) 1,000,000 1,216,980
Puerto Rico Housing Finance Authority Mortgage Backed
Securities, "A", 4.375%, 2017 165,000 161,962
------------
$ 12,089,148
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies - Arkansas Development Finance Authority, Economic Development
2.5% Rev., "B", 5%, 2018 $ 175,000 $ 179,963
Arkansas Development Finance Authority, Economic Development
Rev., "B", AMBAC, 5.8%, 2020 500,000 519,505
Arkansas State Development Finance Authority Rev., Environmental
State Agency Facilities, "A", AMBAC, 5%, 2040 2,500,000 2,583,025
------------
$ 3,282,493
- ---------------------------------------------------------------------------------------------------------------------------------
Student Loan Revenue - 1.5% Arkansas Student Loan Authority, "B", 6.25%, 2006 (c) $ 2,000,000 $ 2,008,120
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 3.3% Little Rock, AR, Hotel & Restaurant Gross Receipts
Tax, 7.375%, 2015 $ 2,790,000 $ 3,286,760
Virgin Islands Public Finance Authority Rev., "A", 5.5%, 2022 1,000,000 1,036,310
------------
$ 4,323,070
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.4% Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico,
5.375%, 2033 $ 235,000 $ 240,901
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico,
5.5%, 2039 290,000 297,789
------------
$ 538,690
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico Highway & Transportation Authority, "B",
Tax - 2.6% MBIA, 5.875%, 2010 (c) $ 2,000,000 $ 2,189,500
Commonwealth of Puerto Rico Highway & Transportation Authority, "G",
5%, 2023 750,000 767,310
Commonwealth of Puerto Rico Highway & Transportation Authority, "G",
FGIC, 5%, 2022 500,000 524,715
------------
$ 3,481,525
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Arkansas State University, Student Fee-ASU (Newport Campus),
16.5% AMBAC, 5%, 2028 $ 700,000 $ 713,629
Conway, AR, Public Facilities Board, Capital Improvement Rev.
(Hendrix College), "B", 5%, 2035 1,000,000 1,010,480
Conway, AR, Public Facilities Rev. (Hendrix College), 5.85%, 2006 (c) 1,000,000 1,011,530
Pulaski, AR, Technical College, Student Tuition & Fee Rev., FGIC,
5%, 2029 1,820,000 1,875,182
Siloam Springs, AR, Public Education Facilities, Capital
Improvement (John Brown University), AMBAC, 5.35%, 2020 500,000 525,785
University of Arkansas, University Construction Rev.
(UAMS Campus), "B", MBIA, 5%, 2026 1,405,000 1,463,589
University of Arkansas, University Construction Rev.
(UAMS Campus), "B", MBIA, 5%, 2027 1,000,000 1,039,530
University of Arkansas, University Facilities Rev. (Fayetteville
Campus), FGIC, 5%, 2027 3,155,000 3,255,676
University of Arkansas, University Facilities Rev. (Fayetteville
Campus), FGIC, 5%, 2032 2,500,000 2,572,500
University of Arkansas, University Facilities Rev. (Monticello),
AMBAC, 5%, 2025 1,525,000 1,583,835
University of Arkansas, University Rev. (UAMS Campus), "B",
MBIA, 5%, 2034 3,290,000 3,412,947
University of Arkansas, University Revenues Facilities,
(UAMS Campus), FGIC, 5%, 2028 2,000,000 2,085,640
University of Central Arkansas, "A", AMBAC, 5%, 2023 1,100,000 1,124,266
University of Central Arkansas, Student Housing Rev., "C",
FGIC, 5%, 2034 250,000 254,735
------------
$ 21,929,324
- ---------------------------------------------------------------------------------------------------------------------------------
Universities -
Dormitories - 2.5% Arkansas State University Rev., Housing Systems, AMBAC, 5.15%, 2021 $ 1,240,000 $ 1,291,683
Arkansas Tech University Rev., Housing Systems, AMBAC, 5.2%, 2026 1,000,000 1,062,370
Pope County, AR, Residential Housing, Arkansas Tech University
Project, "A", 6%, 2027 500,000 490,145
University of Central Arkansas, Student Housing Rev., "C", FGIC,
5.25%, 2029 500,000 520,090
------------
$ 3,364,288
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Jefferson County, AR, Pollution Control Rev. (Arkansas Power &
Owned - 0.8% Light Co.), 6.3%, 2018 $ 1,050,000 $ 1,055,355
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 8.0% Benton, AR, Utilities Rev., AMBAC, 5%, 2030 $ 470,000 $ 484,514
North Little Rock, AR, Electric Rev., "A", MBIA, 6.5%, 2010 2,000,000 2,116,100
North Little Rock, AR, Electric Rev., "A", MBIA, 6.5%, 2015 6,000,000 6,911,820
Puerto Rico Electric Power Authority Rev., "NN", 5.125%, 2024 1,000,000 1,044,460
------------
$ 10,556,894
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Arkansas Development Finance Authority, Economic Development Rev.,
Revenue - 11.3% "I", AMBAC, 5.65%, 2014 $ 375,000 $ 381,840
Arkansas Development Finance Authority, Revolving Loan Fund, "A",
5.85%, 2006 (c) 2,130,000 2,159,202
Fort Smith, AR, Water & Sewer Rev., "C", FSA, 5.25%, 2020 1,315,000 1,395,005
Fort Smith, AR, Water & Sewer Rev., AMBAC, 5.65%, 2009 (c) 1,000,000 1,064,960
Fort Smith, AR, Water & Sewer Rev., Refunding & Construction,
"A", FSA, 5%, 2019 2,125,000 2,208,619
Fort Smith, AR, Water & Sewer Rev., Refunding & Construction,
"A", FSA, 5%, 2021 2,750,000 2,843,225
Little Rock, AR, Sewer Rev., Refunding & Construction, 5%, 2022 1,750,000 1,806,771
Paragould, AR, Water Sewer & Electric Rev., AMBAC, 5.6%, 2010 (c) 765,000 826,261
South Sebastian County, AR, Water Refunding, MBIA, 5%, 2038 1,000,000 1,019,370
Virgin Islands Water & Power Authority Rev., ASST GTY, 5.3%, 2018 1,250,000 1,302,663
------------
$ 15,007,916
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $122,512,930) $129,562,619
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.5%
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "D", 3.22%, due 4/06/06 $ 200,000 $ 200,000
Georgia Municipal Electric Authority, 3.05%, due 4/05/06 100,000 100,000
Illinois Development Finance Authority Rev. (Jewish Federation of
Metropolitan Chicago), 3.18%, due 4/03/06 50,000 50,000
Jefferson County, AL, Sewer Rev., Capital Improvement Warrants, "A",
3.22%, due 4/06/06 700,000 700,000
Jefferson County, AL, Sewer Rev., Warrants, "B-4", 3.22%, due 4/06/06 800,000 800,000
Triborough Bridge & Tunnel Authority, NY, Rev., "F",
3.02%, due 4/06/06 100,000 100,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 1,950,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $124,462,930) $131,512,619
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.9% 1,202,828
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $132,715,447
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $3,000,000 Fixed - 3 Year Floating - 7 Day $41,188
BMA Swap Index (2.795%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
7/13/16 USD 1,500,000 Fixed - 10 Year Floating - 7 Day 31,536
BMA Swap Index (3.742%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/15/18 USD 3,000,000 Fixed - 12 Year Floating - 7 Day 15,791
BMA Swap Index (4.019%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/22/18 USD 2,000,000 Fixed - 12 Year Floating - 7 Day 38,062
BMA Swap Index (3.861%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
8/02/21 USD 1,000,000 Fixed - 15 Year Floating - 7 Day 15,981
BMA Swap Index (4.011%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
9/07/26 USD 1,000,000 Floating - 3 Month Fixed - 20 Year (26,908)
LIBOR Swap Index LIBOR Swap Index (5.268%)
- ------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 1,500,000 Floating - 3 Month Fixed - 20 Year (23,244)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- ------------------------------------------------------------------------------------------------------------------------------
$92,406
=======
At March 31, 2006, the fund had sufficient cash and/or securities to cover any commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) CALIFORNIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 97.7%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 4.0% Long Beach, CA, Harbor Rev., "A" FGIC, 5.25%, 2018 $ 3,500,000 $ 3,681,685
Los Angeles, CA, Department of Airports Rev. (Ontario International
Airport), "A", FGIC, 6%, 2017 4,100,000 4,150,594
Los Angeles, CA, Harbor Department Rev.,"B", 5.375%, 2023 3,000,000 3,060,930
Port Oakland, CA, "K", FGIC, 5.75%, 2020 4,000,000 4,225,120
------------
$ 15,118,329
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations - Commonwealth of Puerto Rico, ROLS, Series II R 124B, XLCA,
General Purpose - 7.8% 7.693%, 2017 (z)(v) $ 1,500,000 $ 1,840,650
Commonwealth of Puerto Rico, ROLS, Series II R 184C, FGIC,
7.763%, 2020 (z)(v) 3,300,000 4,077,546
Los Angeles, CA, RITES, 6.519%, 2014 (z)(v) 5,405,000 6,433,788
State of California, 10%, 2007 1,055,000 1,147,850
State of California, 5.5%, 2010 (c) 3,000,000 3,235,350
State of California, 5.125%, 2025 2,000,000 2,086,880
State of California, 5.25%, 2029 2,000,000 2,094,320
State of California, AMBAC, 7.2%, 2008 1,600,000 1,711,824
State of California, AMBAC, 6.3%, 2010 3,000,000 3,319,410
State of California, AMBAC, 7%, 2010 2,000,000 2,269,780
State of California, RITES, "B", 7.519%, 2017 (z)(v) 1,250,000 1,459,750
------------
$ 29,677,148
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 15.4% Antelope Valley, CA (Union High School), "A", MBIA, 5%, 2027 $ 1,500,000 $ 1,560,495
Butte Glenn Community College District, "A", MBIA, 5%, 2026 1,885,000 1,963,416
Campbell, CA, Union High School District, Election 2002, "B",
FGIC, 5.5%, 2033 2,270,000 2,469,783
Campbell, CA, Union High School District, FSA, 5%, 2021 1,280,000 1,333,888
Capistrano, CA, Union High School District, "A", FGIC, 5.875%, 2020 1,185,000 1,308,619
Chaffey, CA, Union High School District, "C", FSA, 5%, 2027 1,000,000 1,042,270
Colton, CA, Joint Union School District (Election of 2001), "C",
FGIC, 0%, 2032 1,000,000 261,110
Colton, CA, Joint Union School District (Election of 2001), "C",
FGIC, 0%, 2033 3,000,000 740,610
Colton, CA, Joint Union School District, "A", FGIC, 5.375%, 2026 1,200,000 1,304,352
Coronado, CA, Union School District, "A", 5.7%, 2020 1,285,000 1,407,396
Escondido, CA, Union School District, "A", FSA, 5%, 2026 1,000,000 1,036,650
Folsom Cordova, CA, Union School District, Facilities
Improvement, "A", MBIA, 0%, 2025 1,505,000 603,987
Glendale, CA, Union School District, "B", FSA, 5.5%, 2018 4,275,000 4,510,809
Inglewood, CA, Union School District, "A", FGIC, 6%, 2019 1,695,000 1,832,363
Little Lake, CA, City School District, "A", FSA, 6.125%, 2010 (c) 1,035,000 1,145,290
Live Oak, CA, School District, Santa Cruz County, Election 2004,
"A", MBIA, 5%, 2033 1,410,000 1,470,743
Los Angeles, CA, Union School District Election of 1997, "E", MBIA,
5.125%, 2027 5,000,000 5,265,250
Los Angeles, CA, Union School District, RITES, FSA,
6.519%, 2020 (z)(v) 5,000,000 5,692,700
Moreno Valley, CA, Union School District, Election 2004, "A", FSA,
5%, 2025 1,075,000 1,122,526
Moreno Valley, CA, Union School District, Election 2004, "A", FSA,
5%, 2026 1,715,000 1,788,385
Morgan Hill, CA, Union School District, FGIC, 5.5%, 2020 2,545,000 2,751,196
Natomas Union School District, Election 2002 "B", FGIC, 5%, 2028 1,430,000 1,488,659
Oceanside, CA, Union School District Election of 2000, "C", MBIA,
5.25%, 2032 1,940,000 2,049,746
Perris, CA, Union School District, "A", FGIC, 0%, 2027 3,100,000 1,123,068
Rowland, CA, Union School District, "A", FSA, 5.5%, 2010 (c) 1,250,000 1,356,063
San Gabriel, CA, Union School District, "A", FSA, 5%, 2024 2,000,000 2,083,400
San Ysidro, CA, School District, AMBAC, 6.125%, 2021 960,000 1,097,520
Santa Clara, CA, Union School District, FGIC, 5.5%, 2019 2,210,000 2,371,750
Santa Maria, CA, Joint Union High School District, "A", FSA,
5.375%, 2020 1,120,000 1,233,960
Santa Maria, CA, Joint Union High School District, "A", FSA,
5.375%, 2021 1,210,000 1,331,133
Tehachapi, CA, Union School District, "A", FGIC, 5.625%, 2020 1,100,000 1,172,809
Val Verde, CA, Union School District, COP, "B", FGIC, 5%, 2030 1,000,000 1,032,810
Walnut Valley, CA, Union School District, (Election of 2000), "E",
FSA, 0%, 2028 1,535,000 530,128
Washington, CA, Union School District, (Election of 1999), "A",
FGIC, 5.625%, 2021 1,000,000 1,095,820
------------
$ 58,578,704
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue -
Hospitals - 11.0% Abag Finance Authority Rev. (San Diego Hospital), "C", 5.375%, 2020 $ 2,000,000 $ 2,069,500
California Health Facilities Financing Authority Rev., Catholic
Healthcare West, "G", 5.25%, 2023 2,000,000 2,070,140
California Health Facilities Financing Authority Rev., Cedars Sinai
Medical Center, 5%, 2027 1,000,000 1,019,840
California Health Facilities Financing Authority Rev., Health
Facilities (Adventist Health Systems), "A", 5%, 2033 1,750,000 1,752,957
California Statewide Communities Development Authority Rev. (Henry
Mayo Newhall Memorial Hospital), "A", CHFC, 5%, 2018 2,000,000 2,078,100
California Statewide Communities Development Authority Rev. (Kaiser
Permanente), "A", 5.5%, 2032 2,000,000 2,089,500
California Statewide Communities Development Authority Rev. (Los
Angeles Children's Hospital), 5.125%, 2019 4,000,000 4,129,080
California Statewide Communities Development Authority Rev., CHFC,
ETM, 0%, 2007 (c) 3,645,000 3,472,519
California Statewide Communities Development Authority Rev., CHFC,
ETM, 0%, 2008 (c) 6,345,000 5,797,998
California Statewide Communities Development Authority Rev., Health
Facilities (Memorial Health Services), "A", 6%, 2023 1,500,000 1,643,040
California Statewide Communities Development, "B", 5.625%, 2042 4,000,000 4,172,120
California Valley Health Systems, COP, 6.875%, 2023 485,000 485,456
Central California Joint Powers Health Financing (Community
Hospitals of Central California), 5.625%, 2021 1,000,000 1,030,650
Kaweah Delta Health Care District Rev., 6%, 2034 2,000,000 2,152,200
Rancho Mirage, CA, Joint Powers (Eisenhower Medical Center),
5.625%, 2029 3,000,000 3,170,730
Tahoe Forest, CA, Hospital District Rev., "A", 5.85%, 2022 1,000,000 1,026,880
Turlock, CA, Health Facilities Rev. (Emanuel Medical Center),
5%, 2024 500,000 499,395
Washington Township, CA, Health Care Rev., 5%, 2018 1,000,000 1,023,040
West Contra Costa California Healthcare District, AMBAC, 5.5%, 2029 2,000,000 2,139,100
------------
$ 41,822,245
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long California Health Facilities Financing Authority Rev. (Paradise
Term Care - 0.7% Valley Estates), 5.125%, 2022 $ 1,000,000 $ 1,042,410
La Verne, CA, COP (Brethren Hillcrest Homes), "B", 6.625%, 2025 1,000,000 1,064,930
Millbrae, CA, Residential Facilities Rev. (Magnolia of Millbrae),
"A", 7.375%, 2027 465,000 484,688
------------
$ 2,592,028
- ---------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.5% California Statewide Communities Development Authority (Prides
Industries), 7.125%, 2009 (c) $ 1,640,000 $ 1,802,918
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Environmental Services - California Pollution Control Financing Authority, Solid Waste
1.4% Disposal Rev. (Browning Ferris, Inc.), "A", 5.8%, 2016 $ 2,000,000 $ 1,951,360
California Pollution Control Financing Authority, Solid Waste
Disposal Rev. (Waste Management, Inc.), "A", 5.125%, 2031 2,250,000 2,334,960
California Pollution Control Financing Authority, Solid Waste
Disposal Rev. (Waste Management, Inc.), "A-2", 5.4%, 2025 1,000,000 1,040,720
------------
$ 5,327,040
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Virgin Islands Public Finance Authority, Refinery Facilities Rev.
Other - 0.3% (Hovensa Refinery), 5.875%, 2022 $ 960,000 $ 1,012,339
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment &
Tourism - 0.4% Del Mar, CA, Race Track Authority Rev., 6.2%, 2006 (c) $ 1,365,000 $ 1,405,459
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue - San Diego County, CA, COP, (Burnham Institute for Medical Research),
Other - 0.9% 5%, 2034 $ 1,000,000 $ 994,140
San Diego County, CA, COP, (Burnham Institute), 6.25%, 2009 (c) 2,300,000 2,510,105
------------
$ 3,504,245
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing California Housing Finance Agency Rev., Multi-Unit Rental Housing,
Revenue - 2.7% "B II", 6.7%, 2015 $ 1,003,000 $ 1,006,329
California Statewide Communities Development Authority Rev. (Irvine
Apartments), 5.25%, 2025 6,000,000 6,183,060
San Bernardino County, CA (Equity Residential/Redlands), "A",
5.2%, 2029 3,000,000 3,064,320
------------
$ 10,253,709
- ---------------------------------------------------------------------------------------------------------------------------------
Parking - 0.3% San Francisco, CA, Union Square, MBIA, 6%, 2020 $ 1,000,000 $ 1,094,420
- ---------------------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax Contra Costa, CA, Transportation & Sales Tax Rev., "A", ETM,
Revenue - 0.1% 6.875%, 2007 (c) $ 480,000 $ 494,510
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - California Rural Home Mortgage Finance Authority Rev.,
Local - 1.1% GNMA, 7.3%, 2031 $ 35,000 $ 35,801
California Rural Home Mortgage Finance Authority Rev., Mortgage
Backed Securities Program, "B4", GNMA, 6.35%, 2029 50,000 50,107
Pomona, CA, Single Family Mortgage Rev., GNMA, ETM, 7.375%, 2010 (c) 1,265,000 1,357,206
Pomona, CA, Single Family Mortgage Rev., GNMA, ETM, 7.5%, 2023 (c) 2,000,000 2,604,800
------------
$ 4,047,914
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 0.8% California Housing Finance Agency Rev., Home Mortgage, FSA, 0%, 2019 $ 2,885,000 $ 1,257,715
California Housing Finance Agency Rev., Home Mortgage, MBIA, 0%, 2028 5,225,000 1,664,423
------------
$ 2,922,138
- ---------------------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 0.9% California Pollution Control Financing Authority, Solid Waste
Disposal Rev. (West County Resource Recovery), "A", 5.125%, 2014 $ 1,000,000 $ 1,012,520
South Bayside Waste Management Authority, California Solid Waste
System Rev., AMBAC, 5.75%, 2020 2,100,000 2,251,620
------------
$ 3,264,140
- ---------------------------------------------------------------------------------------------------------------------------------
State & Agency -
Other - 2.8% Grossmont, CA, Union High School District, MBIA, 0%, 2006 $ 6,000,000 $ 5,874,120
Pasadena CA, COP, Old Pasadena Parking Facilities Project,
6.25%, 2018 2,995,000 3,338,407
Sacramento County, CA, COP, Capital Projects, AMBAC, 5.75%, 2018 1,500,000 1,623,765
------------
$ 10,836,292
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local
Agencies - 13.5% Banning, CA, COP, Water Systems Improvement Project, AMBAC, 8%, 2019 $ 925,000 $ 1,148,045
California Public Works Board Lease Rev., Department of Corrections
State Prison, "A", 7.4%, 2010 5,000,000 5,688,850
California Public Works Board, Department of Justice, "D",
5.25%, 2020 1,565,000 1,644,252
California State Department of Water Resources Power Supply,
Rev, "C", 5.25%, 2028 2,500,000 2,616,850
Fortuna & Susanville, CA, COP, "B", 7.375%, 2017 660,000 670,190
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement
Rev., "A", FSA, 0% to 2010, 4.55% to 2022 3,000,000 2,423,550
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement
Rev., Enhanced, "A", 5%, 2045 3,000,000 3,046,770
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement
Rev., Enhanced, "B", 5.5%, 2013 (c) 7,000,000 7,670,180
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement
Rev., Enhanced, "B", 5.625%, 2013 (c) 5,000,000 5,517,350
Los Angeles, CA, COP, Antelope Valley Courthouse, "A", AMBAC,
5.25%, 2027 3,000,000 3,136,050
Los Angeles, CA, COP, Real Property Program, AMBAC, 5.3%, 2027 3,000,000 3,181,260
Pomona, CA, Public Financing Authority Rev., "P", 6.25%, 2010 4,020,000 4,304,737
Sacramento, CA, City Financing Authority Rev., Capital Improvement,
5.5%, 2010 (c) 1,635,000 1,769,904
Sacramento, CA, City Financing Authority Rev., City Hall &
Redevelopment Projects, "A", FSA, 5%, 2032 2,000,000 2,145,940
Salinas, CA, COP, Capital Improvement Projects, "A", 5.7%, 2007 (c) 2,200,000 2,311,408
San Francisco, CA, City & County, COP, (San Bruno Jail No 3),
AMBAC, 5.25%, 2033 3,930,000 4,113,610
------------
$ 51,388,946
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 2.4% Irvine, CA, School District Special Tax Rev., Community Facilities
District No. 86-1, AMBAC, 5.8%, 2020 $ 3,500,000 $ 3,679,445
Santa Cruz County, CA, Redevelopment Agency Tax Allocation (Oak/
Soquel Community), 5.6%, 2017 1,455,000 1,524,418
Virgin Islands Public Finance Authority Rev., "A", 5.5%, 2022 2,000,000 2,072,620
Virgin Islands Public Finance Authority Rev., "E", 5.875%, 2018 1,600,000 1,684,896
------------
$ 8,961,379
- ---------------------------------------------------------------------------------------------------------------------------------
Tax Assessment - 7.4% Brea, CA, Public Finance Authority Rev., MBIA, 0%, 2006 $ 2,415,000 $ 2,388,217
Duarte, CA, Redevelopment Agency Tax Allocation, Davis Addition
Project Area, 6.7%, 2014 605,000 637,247
Fontana, CA, Redevelopment Agency Tax Allocation, Jurupa Hills
Redevelopment Project, "A", 5.5%, 2027 3,350,000 3,440,718
Huntington Park, CA, Public Financing Rev. Wastewater Systems
Project, "A", 6.2%, 2025 2,000,000 2,045,160
La Mirada, CA, Redevelopment Agency, Special Tax Rev., Community
Facilities District No. 89-1, 5.7%, 2020 1,500,000 1,524,720
Modesto, CA, Irrigation District, COP, Refunding & Capital
Improvements, "B", 5.3%, 2022 1,720,000 1,721,995
Modesto, CA, Public Financing Authority (John Thurman Field
Renovation), 6.125%, 2016 1,255,000 1,295,662
Orange County, CA, Community Facilities District, Special Tax
(Rancho Santa Margarita), "A", 5.55%, 2017 1,000,000 1,041,270
Poway, CA, Community Facilities District, Special Tax (Parkway
Business Center), 6.5%, 2010 715,000 763,677
Poway, CA, Community Facilities District, Special Tax (Parkway
Business Center), 6.75%, 2015 775,000 832,621
Riverside County, CA, Public Financing Authority, Tax Allocation
Rev., "A", 5.25%, 2006 (c) 892,500 917,990
Riverside County, CA, Public Financing Authority, Tax Allocation
Rev., "A", 5.25%, 2006 (c) 1,655,000 1,702,267
Riverside County, CA, Public Financing Authority, Tax Allocation
Rev., "A", 5.25%, 2016 572,500 587,860
Riverside County, CA, Public Financing Authority, Tax Allocation
Rev., XLCA, 5%, 2037 3,000,000 3,066,600
Riverside County, CA, Redevelopment Agency, Tax Allocation, "A",
XLCA, 5%, 2037 2,000,000 2,051,440
San Diego, CA, Redevelopment Agency, Tax Allocation (Centre City),
"B", AMBAC, 5.3%, 2020 1,250,000 1,334,900
San Jose, CA, Redevelopment Agency, Tax Allocation Redevelopment
Project, FGIC, 4.9%, 2033 2,675,000 2,744,309
------------
$ 28,096,653
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 2.2% California County, CA, Tobacco Asset Baked L.A. County, "A", 0%, 2041 $ 2,500,000 $ 1,939,350
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, "A",
0%, 2050 2,000,000 130,800
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, "B",
0%, 2055 2,000,000 69,300
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement
"A-1", 6.75%, 2039 2,645,000 2,974,593
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement,
"A-1", 6.25%, 2033 2,935,000 3,197,389
------------
$ 8,311,432
- ---------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 0.7% Foothill/Eastern Corridor Agency, California Toll Road Rev., Capital
Appreciation, "A", 7.1%, 2010 (c) $ 2,500,000 $ 2,849,950
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Alameda Corridor Transportation Authority, California Rev., Capital
Tax - 0.6% Appreciation, "A", AMBAC, 0%, 2030 $ 8,000,000 $ 2,468,240
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - California Educational Facilities Authority Rev. (Dominican
7.1% University), 5%, 2036 $ 1,150,000 $ 1,126,942
California Educational Facilities Authority Rev. (Fresno Pacific
University), "A", 6.75%, 2019 2,000,000 2,162,800
California Educational Facilities Authority Rev. (L.A. College of
Chiropractic), 5.6%, 2017 2,100,000 2,029,524
California Educational Facilities Authority Rev. (Lutheran
University), "C", 5%, 2029 2,500,000 2,524,100
California Educational Facilities Authority Rev. (Pomona College),
"B", 5.875%, 2009 (c) 2,000,000 2,158,820
California Educational Facilities Authority Rev. (Santa Clara
University), "A", MBIA, 5%, 2027 1,340,000 1,384,300
California Educational Facilities Authority Rev. (University of Los
Angeles), "A", 5%, 2029 1,500,000 1,507,785
California Educational Facilities Authority Rev., Pooled College &
University Projects, "B", 6.3%, 2007 (c) 1,000,000 1,045,800
California Educational Facilities Authority Rev., Pooled College &
University Projects, "B", 6.625%, 2020 1,000,000 1,116,980
California Statewide Communities, Notre Dame De Namur University,
6.625%, 2033 1,000,000 1,021,440
Foothill-De Anza, CA, Community College District, Election of 1999,
"B", FGIC, 0%, 2025 1,500,000 612,450
Long Beach, CA, Industrial Development Rev. (CSU Foundation), "A",
5.25%, 2023 1,450,000 1,466,385
Santa Monica, CA, Community College District, 2002 Election, "C",
MBIA, 0%, 2027 2,000,000 695,140
University of California Rev., RITES, MBIA, 6.985%, 2016 (z)(v) 5,705,000 6,052,663
University of California, COP, San Diego Campus Projects, "A",
5.25%, 2032 1,840,000 1,914,060
------------
$ 26,819,189
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Secondary California Statewide Communities Development Authority Rev., Aspire
Schools - 1.1% Public Schools, (Oakland Project), "A", 7.25%, 2031 $ 975,000 $ 1,004,309
California Statewide Communities, Development Authority Rev.
(Escondido Charter High School), 7.5%, 2036 1,000,000 1,059,680
Los Angeles, CA, COP, 5.7%, 2018 1,900,000 1,990,079
------------
$ 4,054,068
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor California Pollution Control Financing Authority, Pollution Control
Owned - 1.6% Rev. (Pacific Gas & Electric Co.), MBIA, 5.35%, 2016 $ 3,500,000 $ 3,728,165
Chula Vista, CA, Industrial Development Rev. (San Diego Gas), "B",
5%, 2027 2,500,000 2,539,600
------------
$ 6,267,765
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 3.0% Glendale, CA, Electric Works Rev., MBIA, 5.75%, 2019 $ 1,420,000 $ 1,541,481
Glendale, CA, Electric Works Rev., MBIA, 5.75%, 2020 1,160,000 1,250,178
Northern California Power Agency Public Power Rev., 5.85%, 2010 880,000 934,375
Sacramento, CA, Power Authority, Cogeneration Project Rev., MBIA,
5.875%, 2006 (c) 5,500,000 5,642,065
Virgin Islands Water & Power Authority Rev., 5.5%, 2017 800,000 815,040
Virgin Islands Water & Power Authority Rev., 5.3%, 2018 250,000 249,533
Virgin Islands Water & Power Authority Rev., "A", 5.125%, 2013 1,000,000 1,001,240
------------
$ 11,433,912
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility California Department of Water Resources, Central Valley Project
Revenue - 7.0% Rev., "X", FGIC, 5%, 2029 $ 2,000,000 $ 2,059,160
California Department of Water Resources, Water Systems Rev.,
7%, 2012 1,090,000 1,286,320
California Department of Water Resources, Water Systems Rev.,
ETM, 7%, 2012 (c) 405,000 480,556
Castaic Lake Water Agency, California Rev., Water Systems
Improvement Project, AMBAC, 5.125%, 2030 1,725,000 1,787,980
Culver City, CA, Wastewater Facilities Rev, "A", FGIC, 5.6%, 2019 1,000,000 1,075,550
El Monte, CA, Water Authority Rev., Water Systems Project, AMBAC,
6%, 2019 1,065,000 1,175,888
Fairfield-Suisun, CA, Sewer District Rev., "A", MBIA, 0%, 2006 2,080,000 2,074,821
Livermore Amador Valley Water Management Rev., "A", AMBAC, 5%, 2031 4,875,000 5,000,531
Mojave, CA, Water Agency, Improvement District (M - Morongo Basin),
FGIC, 5.75%, 2006 (c) 2,625,000 2,701,808
Southern California Metropolitan Water District Rev., RITES,
7.542%, 2018 (z)(v) 5,000,000 6,313,500
West Sacramento, CA, Financing Authority Rev., Water Systems
Improvement Project, FGIC, 5%, 2032 2,750,000 2,840,530
------------
$ 26,796,644
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $351,522,967) $371,201,756
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.3%
- ---------------------------------------------------------------------------------------------------------------------------------
Bay Area Toll Authority, California Toll Bridge Rev., "A", 3.05%,
due 4/06/06 $ 100,000 $ 100,000
Orange County, CA, 3.06%, due 4/03/06 100,000 100,000
State of California, Department of Water Resources, Power Supply
Rev., "C-2", 3.17%, due 4/06/06 3,500,000 3,500,000
State of California, Department of Water Resources, Power Supply
Rev., "C-3", 3.17%, due 4/06/06 1,000,000 1,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 4,700,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $356,222,967) $375,901,756
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.0% 3,972,533
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $379,874,289
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $9,000,000 Fixed - 3 Year Floating - 7 day $123,600
BMA Swap Index (2.795%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
7/13/16 USD 3,000,000 Fixed - 10 Year Floating - 7 Day 63,072
BMA Swap Index (3.742%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
8/02/21 USD 3,000,000 Fixed - 15 Year Floating - 7 Day 47,944
BMA Swap Index (4.011%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
9/07/26 USD 3,000,000 Floating - 3 Month Fixed - 20 Year (80,725)
LIBOR Swap Index LIBOR Swap Index (5.268%)
- ------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 3,750,000 Floating - 3 Month Fixed - 20 Year (58,111)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- ------------------------------------------------------------------------------------------------------------------------------
7/11/36 USD 3,000,000 Floating - 7 day Fixed - 30 Year (96,827)
BMA Swap Index BMA Swap Index (4.127%)
- ------------------------------------------------------------------------------------------------------------------------------
$ (1,047)
========
At March 31, 2006, the fund had sufficient cash and/or securities to cover any commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) 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 - 97.5%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 5.2% Greater Orlando Aviation Authority Rev., "A", FGIC, 5.25%, 2018 $ 1,000,000 $ 1,038,820
Hillsborough County, FL, Aviation Authority Rev. (Tampa International
Airport), "A", FGIC, 5.875%, 2015 750,000 771,630
Lee County, FL, Airport Rev., "A", FSA, 5.875%, 2018 1,000,000 1,078,300
Miami-Dade County, FL, Aviation Rev., "C", MBIA, 5.25%, 2018 500,000 516,310
Miami-Dade County, FL, Aviation Revenue, "A", CIFG, 5%, 2038 500,000 509,455
Pensacola, FL, Airport Rev., "B", MBIA, 5.625%, 2014 500,000 520,980
------------
$ 4,435,495
- ---------------------------------------------------------------------------------------------------------------------------------
Chemicals - 0.3% Red River Authority, TX, Pollution Control Rev. (Celanese Project),
6.7%, 2030 $ 200,000 $ 211,794
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 7.0% Commonwealth of Puerto Rico, RITES, MBIA, 7.599%, 2019 (z)(v) $ 1,000,000 $ 1,154,480
Miami-Dade County, FL, Educational Facilities Authority, "A", AMBAC,
5.5%, 2018 1,400,000 1,492,400
State of Florida, RITES, 6.019%, 2017 (z)(v) 3,000,000 3,288,960
------------
$ 5,935,840
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 9.3% Florida Board of Education, Capital Outlay, 9.125%, 2014 $ 2,600,000 $ 3,190,330
Florida Board of Education, Capital Outlay, ETM, 9.125%, 2014 (c) 400,000 533,648
Florida State Board of Education, Public Education, "J", 5%, 2032 1,000,000 1,031,690
Martin County, FL, School Board Certificate, MBIA, 5%, 2031 1,090,000 1,121,610
Osceola County, FL, School Board Certificate, "A", AMBAC, 5.25%, 2027 1,950,000 2,066,649
------------
$ 7,943,927
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Birmingham, AL, Baptist Medical Center, Special Care Facilities Rev.
Hospitals - 17.0% (Baptist Health Systems, Inc.), "A", 5%, 2030 $ 500,000 $ 488,215
Brevard County, FL, Health Facilities Rev., Health First Inc., 5%, 2034 500,000 507,065
Citrus County, FL, Hospital Development Authority Rev. (Citrus Memorial
Hospital), 6.25%, 2023 480,000 511,075
Coral Gables, FL, Health Facilities Authority, Hospital Rev. (Baptist
Health South Florida), 5%, 2029 535,000 552,687
Denver, CO, Health & Hospital Authority Rev., "A", 6%, 2023 250,000 264,812
Highlands County, FL, Health Facilities Authority Rev. (Adventist
Health Systems), 5.25%, 2013 500,000 516,065
Hillsborough County, FL, Industrial Development Rev. (University
Community Hospital), MBIA, 6.5%, 2019 1,000,000 1,200,510
Indiana Health Facilities Financing Authority, Hospital Rev. (Munster
Medical Research Foundation, Inc.), 6.375%, 2031 500,000 524,985
Jacksonville, FL, Health Facilities, Ascencion Health, "A", 5.25%, 2032 1,000,000 1,036,740
Lakeland, FL, Hospital Systems Rev. (Lakeland Regional Health Systems),
5.5%, 2032 1,000,000 1,052,600
Leesburg, FL, Hospital Rev. (Leesburg Regional Medical Center),
5.5%, 2032 750,000 770,227
Marion County, FL, Hospital District Rev., Refunding & Improvement,
Health Systems (Monroe Regional Health System), 5.5%, 2014 500,000 522,230
Marshall County, AL, Health Care Rev., "A", 6.25%, 2022 500,000 532,250
Martin County, FL, Health Facilities Rev. (Martin Memorial Medical
Center), "B", 5.75%, 2022 500,000 529,960
Miami Beach, FL, Health Facilities Rev. (Mount Sinai Medical Center),
"A", 6.7%, 2019 250,000 274,527
Miami, FL, Health Facilities Authority Rev. (Catholic Health East),
"B", 5.25%, 2028 650,000 669,266
New Hampshire Health & Educational Facilities Authority Rev. (Exeter
Hospital), 6%, 2024 500,000 546,405
Orange County, FL, Health Facilities Authority Hospital Rev. (Orlando
Regional Healthcare), 5.75%, 2012 (c) 1,000,000 1,107,470
Rhode Island Health & Education Building Rev., Hospital Financing
(Lifespan Obligated Group), 6.5%, 2012 (c) 500,000 572,580
South Dakota Health & Education Facilities Authority Rev. (Prairie
Lakes Health Care System), 5.625%, 2032 500,000 514,085
Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial
Healthcare), 6.25%, 2020 300,000 317,166
Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial Regional
Medical Center), MBIA, 6.625%, 2013 1,000,000 1,011,620
Wisconsin Health & Educational Facilities Authority Rev. (Marshfield
Clinic), "A", 5.375%, 2034 500,000 512,075
------------
$ 14,534,615
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Orange County, FL, Health Facilities Authority Rev. (Orlando Lutheran),
Term Care - 0.3% 5.7%, 2026 $ 250,000 $ 248,192
- ---------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.4% Orange County, FL, Health Facilities Authority Rev. (GF/Orlando
Healthcare Facilities), 8.875%, 2021 $ 300,000 $ 334,161
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Brazos River, TX, Brazoria County Environmental Rev. (Dow Chemical,
Chemicals - 0.7% Co.), "A", 6.625%, 2033 $ 500,000 $ 555,470
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Environmental Services - California Pollution Control Financing Authority, Solid Waste Disposal
1.0% Rev. (Waste Management, Inc.), "B", 5%, 2027 $ 500,000 $ 501,950
Nevada Department of Business Rev. (Republic Services, Inc.),
5.625%, 2026 300,000 322,803
------------
$ 824,753
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Other - 1.0% Madison County, FL, Rev. (Twin Oaks Project), "A", 6%, 2025 $ 150,000 $ 153,413
Park Creek Metropolitan District, CO, Rev., Custodial Receipts, CR-2,
7.875%, 2032 (a) 160,000 176,827
Tooele County, UT, Hazardous Waste Treatment Rev. (Union Pacific
Corp.), 5.7%, 2026 500,000 523,740
------------
$ 853,980
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Delta County, MI, Economic Development Corp., Environmental
Paper - 0.7% Improvements Rev. (Mead Westvaco Escanaba), "A", 6.25%, 2012 (c) $ 500,000 $ 565,145
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment & Palm Beach County, FL, Industrial Development Rev. (South Florida Fair
Tourism - 1.2% Project), MBIA, 5.5%, 2020 $ 1,000,000 $ 1,058,420
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Other - 0.2% Summit County, OH, Port Authority Building (Seville), "A", 5.1%, 2025 $ 200,000 $ 202,754
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Bay County, FL, Housing Finance Authority, Multi-family Rev. (Andrews
Revenue - 3.3% Place II Apartments), FSA, 5%, 2035 $ 500,000 $ 502,475
Collier County, FL, Housing Finance Authority Rev. (Goodlette Arms
Housing Project), "A", FNMA, 4.9%, 2032 500,000 523,815
Florida Housing Finance Corp., Housing Rev. (Augustine Club
Apartments), "D", MBIA, 5.5%, 2020 500,000 520,445
Florida Housing Finance Corp., Housing Rev. (Crossing At University
Apartments), AMBAC, 5.1%, 2018 1,115,000 1,130,588
Palm Beach County, FL, Housing Finance Rev. (Westlake Apartments
Project), Phase II, FSA, 4.3%, 2012 140,000 141,674
------------
$ 2,818,997
- ---------------------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax
Revenue - 4.9% Escambia County, FL, Sales Tax Rev., AMBAC, 5%, 2022 $ 1,160,000 $ 1,213,789
Hillsborough County, FL, Court Facilities Rev., 3%, 2006 300,000 298,713
Miami-Dade County, FL, Special Obligations, Capital Appreciation, "A",
MBIA, 0%, 2032 2,000,000 515,800
Pasco County, FL, Sales Tax Rev., Half Central, AMBAC, 5%, 2023 1,000,000 1,045,860
Volusia County, FL, Tourist Development Tax Rev., FSA, 5%, 2034 815,000 840,363
Wyandotte County-Kansas City, KS, Sales Tax 2nd Lien Area B, 5%, 2020 250,000 255,128
------------
$ 4,169,653
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
Local - 3.5% Brevard County, FL, Housing Finance Authority, "B", GNMA, 6.5%, 2022 $ 39,000 $ 39,304
Lee County, FL, Housing Finance Authority Rev., "A", GNMA, 7%, 2031 95,000 96,019
Lee County, FL, Housing Finance Authority, Multi-County Program, "A",
GNMA, 7.2%, 2033 35,000 35,429
Manatee County, FL, Housing Finance Mortgage Rev., Single Family,
Subordinated Series 3, GNMA, 5.3%, 2028 70,000 70,955
Miami-Dade County, FL, Housing Finance Authority Rev. (Home Ownership
Mortgage), "A", GNMA, 5.2%, 2031 485,000 492,314
Palm Beach County, FL, Single Family Rev., "B", GNMA, 5.5%, 2022 235,000 238,133
Pinellas County, FL, Housing Finance Authority Rev., "A-1", GNMA,
4.85%, 2037 1,000,000 984,210
Pinellas County, FL, Housing Finance Authority Rev., Multi-County
Program, "A", GNMA, 5.45%, 2034 595,000 611,000
Pinellas County, FL, Housing Finance Authority Rev., Multi-County
Program, "B", GNMA, 6.2%, 2031 380,000 386,992
------------
$ 2,954,356
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Florida Housing Finance Corp. Rev., Homeowner Mortgage, "1", GNMA,
State - 2.7% 4.8%, 2031 $ 1,000,000 $ 983,260
Florida Housing Finance Corp. Rev., Homeowner Mortgage, "4", FSA,
5.85%, 2031 400,000 408,392
Florida Housing Finance Corp. Rev., Homeowner Mortgage, "5", 5%, 2034 920,000 938,492
------------
$ 2,330,144
- ---------------------------------------------------------------------------------------------------------------------------------
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 $ 209,036
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies -
3.7% Florida Municipal Loan Council Rev., "B", MBIA, 5.625%, 2009 (c) $ 1,000,000 $ 1,074,340
Florida Municipal Loan Council Rev., "C", MBIA, 5.25%, 2022 1,000,000 1,072,100
St. Augustine, FL, Capital Improvement Rev, AMBAC, 5%, 2029 1,000,000 1,040,680
------------
$ 3,187,120
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 2.0% Orange County, FL, Tourist Development Tax Rev., Subordinated, AMBAC,
5.25%, 2027 $ 1,500,000 $ 1,585,065
Virgin Islands Public Finance Authority Rev., "A", 5.25%, 2024 130,000 135,049
------------
$ 1,720,114
- ---------------------------------------------------------------------------------------------------------------------------------
Tax Assessment - 4.1% Arbor Greene, FL, Community Development District, 5.75%, 2006 $ 46,000 $ 46,000
Arborwood Community Development District, Florida Capital Improvement
Rev. (Master Infrastructure Projects), "B", 5.1%, 2014 200,000 197,798
Concord Station Community Development District, FL, Capital Improvement
Rev., 5%, 2015 185,000 183,028
Concorde Estates Community Development District, FL, Capital
Improvement Rev., "B", 5%, 2011 235,000 234,497
Durbin Crossing Community Development District, "B-1", 4.875%, 2010 250,000 249,012
Fishawk Community Development District II, "B", 5%, 2007 100,000 99,567
Greyhawk Landing Community Development, FL, Special Assessment Rev.,
"B", 6.25%, 2009 100,000 101,077
Heritage Harbour South Community, Development District, FL, Rev.,
Capital Improvement, "B", 5.4%, 2008 25,000 24,827
Killarney, FL, Community Development District, "B", 5.125%, 2009 165,000 164,535
Lakes by the Bay South Community Development District, FL, Special
Assessment, "B", 5.3%, 2009 180,000 179,690
Middle Village Community Development District, FL, Special Assessment,
"B", 5%, 2009 95,000 94,908
Middle Village, FL, Community Development District Rev.,
"A", 5.8%, 2022 95,000 97,304
New Port Tampa Bay Community Development District, FL, Special
Assessment, "B", 5.3%, 2012 200,000 198,724
North Springs Improvement District, FL, Special Assessment Rev.
(Parkland Golf Country Club), "B-2", 5.125%, 2015 250,000 247,825
Old Palm Community Development District, FL, Special Assessment (Palm
Beach Gardens), "B", 5.375%, 2014 155,000 155,888
Palm Glades Community Development District, FL, Special Assessment,
"A", 5.3%, 2036 200,000 200,732
Panther Trace, FL, Community Development District Rev., 5.4%, 2008 10,000 9,938
Panther Trace, FL, Community Development District Rev., "B", 5%, 2010 200,000 198,862
Parkway Center, FL, Community Development District Rev.,
"B", 5.625%, 2014 100,000 101,130
Renaissance Community Development, FL, "B", 6.25%, 2008 100,000 100,687
Tuscany Reserve Community Development District, FL, "B", 5.25%, 2016 250,000 250,453
Villa Portofino West Community Development District, FL, Special
Assessment, "A", 5.35%, 2036 200,000 200,948
Watergrass Community Development District, FL, Special Assessment
Rev., "B", 4.875%, 2010 200,000 198,570
------------
$ 3,536,000
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.6% Louisiana Tobacco Settlement Authority, "B", 5.875%, 2039 $ 250,000 $ 263,573
South Carolina Tobacco Settlement Authority, "B", 6.375%, 2030 250,000 280,133
------------
$ 543,706
- ---------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 1.2% Lee County, FL, Transportation Facilities Rev., "A", AMBAC, 5%, 2027 $ 1,000,000 $ 1,043,560
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico, Highway & Transportation, ROLS, Railroad
Tax - 4.3% II R 227 1, MBIA, 7.763%, 2020 (z)(v) $ 2,500,000 $ 3,185,200
St. Johns County, FL, Rev. Transportation Improvement, AMBAC, 5%, 2027 500,000 520,255
------------
$ 3,705,455
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Florida Board Regents, Housing Rev. (University of Central Florida),
Dormitories - 3.5% FGIC, 5.25%, 2020 $ 1,185,000 $ 1,270,877
Florida Board Regents, Housing Rev., MBIA, 5.3%, 2020 610,000 653,401
Florida Finance Authority, Capital Loan Projects, "F", MBIA,
5.125%, 2021 1,000,000 1,025,380
------------
$ 2,949,658
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Brazos River Authority, TX, Pollution Control Rev. (Texas Utility Co.),
Owned - 0.5% "C", 6.75%, 2038 $ 215,000 $ 241,359
Port Morrow, OR, Pollution Control Rev. (Portland General Electric),
5.2%, 2033 200,000 206,576
------------
$ 447,935
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 3.1% Palm Coast, FL, Utility Systems Rev., MBIA, 5%, 2024 $ 250,000 $ 261,265
Port St. Lucie, FL, Utility Rev., Capital Appreciation, "A", FGIC,
0%, 2006 (c) 1,405,000 568,154
Port St. Lucie, FL, Utility Rev., MBIA, 5%, 2022 1,000,000 1,042,670
St. Lucie West, FL, Utility Rev., MBIA, 5.25%, 2034 720,000 768,204
------------
$ 2,640,293
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 15.5% Bay County, FL, Water Systems Rev., AMBAC, 5.625%, 2010 (c) $ 1,000,000 $ 1,085,640
Florida Community Services Corp., AMBAC, 5.5%, 2018 1,125,000 1,209,229
Lee County, FL, Industrial Development Authority (Bonita Springs
Utilities Project), MBIA, 6.05%, 2015 1,000,000 1,021,970
Miami Beach, FL, Stormwater Rev., FGIC, 5.25%, 2020 1,000,000 1,059,640
Miami-Dade County, FL, Stormwater Utility Rev., MBIA, 5%, 2028 2,000,000 2,076,240
Orlando, FL, Utilities Commission, Water & Electric Rev. "C", 5%, 2027 1,000,000 1,035,830
Pinellas County, FL, Sewer Rev., FSA, 5%, 2032 1,500,000 1,549,155
Polk County, FL, Utility Systems Rev., "A", FGIC, 5%, 2030 1,000,000 1,039,240
Polk County, FL, Utility Systems Rev., FGIC, 5%, 2023 1,000,000 1,045,060
Seminole County, FL, Water & Sewer Rev., MBIA, 6%, 2019 940,000 1,080,088
Tohopekaliga Water Authority, Florida Utility System Rev., "A",
FSA, 5%, 2024 1,000,000 1,045,060
------------
$ 13,247,152
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $79,713,329) $ 83,207,725
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 2.1%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Burke County, GA, Development Authority Pollution Control Rev.
(Oglethorpe Power Corp.), "A", 3.22%, due 4/05/06 $ 1,000,000 $ 1,000,000
Georgia Municipal Electric Authority, 3.05%, due 4/05/06 100,000 100,000
Jefferson County, AL, Sewer Rev., Warrants, "B-4", 3.22%, due 4/06/06 100,000 100,000
Lincoln County, WY, Pollution Control Rev. (Exxon Mobile Corp.),
3.13%, due 4/03/06 600,000 600,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 1,800,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $81,513,329) $ 85,007,725
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.4% 364,394
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $ 85,372,119
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $2,000,000 Fixed - 3 Year Floating - 7 day $27,467
BMA Swap Index (2.795%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/06/16 USD 1,000,000 Fixed - 10 Year Floating - 7 Day 5,302
BMA Swap Index (3.938%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/16/16 USD 1,500,000 Fixed - 10 Year Floating - 7 Day 3,864
BMA Swap Index (3.977%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
7/13/16 USD 1,000,000 Fixed - 10 Year Floating - 7 Day 21,024
BMA Swap Index (3.742%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
8/30/16 USD 1,500,000 Fixed - 10 Year Floating - 7 Day 11,519
BMA Swap Index (3.926%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/15/18 USD 1,500,000 Fixed - 12 Year Floating - 7 Day 7,896
BMA Swap Index (4.019%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
8/02/21 USD 1,000,000 Fixed - 15 Year Floating - 7 Day 15,981
BMA Swap Index (4.011%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 850,000 Floating - 3 Month Fixed - 20 Year (13,172)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- ------------------------------------------------------------------------------------------------------------------------------
$79,881
=======
At March 31, 2006, the fund had sufficient cash and/or securities to cover any commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) GEORGIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 98.1%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 5.6% Atlanta, GA, Airport Passenger Facilities Rev., "J", FSA, 5%, 2029 $ 750,000 $ 776,250
Atlanta, GA, Airport Passenger Facilities Rev., "J", FSA, 5%, 2034 1,250,000 1,288,287
Atlanta, GA, Airport Rev., "B", FSA, 5.25%, 2033 1,000,000 1,057,430
Augusta, GA, Airport Rev., "B", 5.35%, 2028 350,000 352,887
------------
$ 3,474,854
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 5.1% Columbia County, GA (Courthouse Detention Center), 5.625%, 2020 $ 1,490,000 $ 1,567,063
Gilmer County, GA, Building Authority Rev., Courthouse Project,
"A", XLCA, 5%, 2029 500,000 520,190
Macon Bibb County, GA, Urban Development Rev. (Bibb County Public
Facilities Project), 5.5%, 2022 1,000,000 1,073,110
------------
$ 3,160,363
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 2.2% Puerto Rico Municipal Finance Agency, RITES, FSA, 8.108%, 2016 (z)(v) $ 500,000 $ 583,340
Suwanee, GA, MBIA, 5.25%, 2032 750,000 786,623
------------
$ 1,369,963
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 7.6% Fayette County, GA, School District Rev., FSA, 0% to 2010,
4.9% to 2024 $ 575,000 $ 465,830
Forsyth County, GA, School District, 6%, 2010 (c) 750,000 823,387
Fulton County, GA, School District, 6.375%, 2010 2,000,000 2,198,880
Wilkes County, GA, School District, 5%, 2024 1,115,000 1,167,951
------------
$ 4,656,048
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Athens Clarke County, GA (United Catholic Health East Issue),
5.5%, Hospitals - 9.2% 2032 $ 500,000 $ 522,765
Chatham County, GA, Hospital Authority Rev. (Memorial Health Medical
Center), "A", 6%, 2017 350,000 375,819
Chatham County, GA, Hospital Authority Rev., Hospital Improvement
(Memorial Health University), "A", 5.375%, 2026 200,000 207,870
Cobb County, GA, Hospital Authority Revolving, Refunding & Improvement
Rev., Anticipation Certificates, AMBAC, 5.25%, 2023 750,000 803,707
Coffee County, GA, Hospital Authority Rev. (Coffee Regional Medical
Center, Inc.), 5%, 2026 350,000 345,978
Gainesville & Hall County, GA, Hospital Authority Rev. (Northeast
Georgia Health System, Inc.), 5.5%, 2031 500,000 515,900
Royston, GA, Hospital Authority Rev. (Ty Cobb Healthcare System, Inc.),
6.125%, 2009 280,000 279,093
Tift County, GA, Hospital Authority Rev., Anticipation Certificates,
AMBAC, 5%, 2022 2,000,000 2,079,800
Valdosta & Lowdes County, GA, Hospital Authority Rev. (Southern Georgia
Medical Center Project), AMBAC, 5.25%, 2027 500,000 528,170
------------
$ 5,659,102
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Fulton County, GA, Residential Care Facilities (Canterbury Court), "A",
Term Care - 0.2% 6.125%, 2034 $ 150,000 $ 150,681
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Environmental Services - Savannah, GA, Economic Development Authority, Solid Waste Disposal Rev.
0.9% (Georgia Waste Management Project), "A", 5.5%, 2016 $ 500,000 $ 525,120
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Cartersville, GA, Development Authority Waste (Anheuser Busch Project),
Other - 1.6% 5.95%, 2032 $ 750,000 $ 813,090
Virgin Islands Public Finance Authority, Refinery Facilities Rev.
(Hovensa Refinery), 5.875%, 2022 160,000 168,723
------------
$ 981,813
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Effingham County, GA, Development Authority, Solid Waste Disposal Rev.
Paper - 2.0% (Fort James), 5.625%, 2018 $ 150,000 $ 147,460
Savannah, GA, Economic Development Pollution (Union Camp Corp.),
6.15%, 2017 1,000,000 1,101,020
------------
$ 1,248,480
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing De Kalb County, GA, Housing Authority Multi-Family Housing Rev.
Revenue - 3.8% (Castaways Apartments), "A", GNMA, 5.4%, 2029 $ 595,000 $ 615,986
Hinesville, GA, Leased Housing Corp., "A", FHA, 6.7%, 2017 900,000 902,016
Savannah, GA, Housing Authority (Chatham Gardens Project), FNMA,
5.625%, 2031 750,000 794,205
------------
$ 2,312,207
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 4.8% Georgia Housing & Finance Authority Rev., 5.5%, 2032 $ 1,000,000 $ 1,005,710
Georgia Housing & Finance Authority Rev., Single Family Mortgage, "A",
5.6%, 2032 675,000 687,501
Georgia Housing & Finance Authority Rev., Single Family Mortgage,
"A-2", 4.85%, 2037 500,000 488,420
Georgia Housing & Finance Authority Rev., Single Family Mortgage, "C",
5.1%, 2022 750,000 756,263
------------
$ 2,937,894
- ---------------------------------------------------------------------------------------------------------------------------------
State & Agency - County Commissioners of Georgia Assoc., Leasing Program, Rockdale
Other - 2.6% County, GA (Public Purpose Project), AMBAC, 5.625%, 2020 $ 500,000 $ 534,375
Fulton County, GA, Facilities Corp., Fulton County, GA (Public Purpose
Project), AMBAC, 5.9%, 2019 1,000,000 1,073,540
------------
$ 1,607,915
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies -
3.8% Clayton County, GA, Development Authority Rev., "A", 6.25%, 2009 (c) $ 500,000 $ 549,165
College Park, GA, Bus & Industrial Development Civic Center Project,
"N", AMBAC, 5.25%, 2025 500,000 539,055
De Kalb County, GA, Public Safety & Judicial Facilities Authority Rev.,
5%, 2029 400,000 417,096
Fayette County, GA, Public Facilities Authority (Criminal Justice
Center Project), 6.25%, 2010 (c) 755,000 835,891
------------
$ 2,341,207
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 2.9% Puerto Rico Convention Center, District Authority Hotel Occupancy Tax
Rev., "A", CIFG, 4.5%, 2036 $ 750,000 $ 730,598
Virgin Islands Public Finance Authority Rev., ASST GTY, 5.5%, 2018 1,000,000 1,050,330
------------
$ 1,780,928
- ---------------------------------------------------------------------------------------------------------------------------------
Tax Assessment - 0.5% Atlanta, GA, Tax Allocation (Eastside Project), "B", 5.6%, 2030 $ 150,000 $ 153,306
Atlanta, GA, Tax Allocation (Princeton Lakes Project), 5.5%, 2031 150,000 150,510
------------
$ 303,816
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.6% Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico,
5.375%, 2033 $ 365,000 $ 374,165
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico Highway & Transportation Authority, "Y",
Tax - 1.1% 5.5%, 2036 $ 610,000 $ 652,328
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Atlanta, GA, Development Authority Rev. (Tuff Yamacraw LLC Project),
9.8% "A", AMBAC, 5%, 2027 $ 335,000 $ 359,760
Fulton County, GA (Morehouse College), AMBAC, 6.25%, 2021 980,000 1,087,516
Fulton County, GA, Development Authority Rev. (Georgia Tech Foundation
Funding), "A", 5%, 2031 265,000 272,815
Fulton County, GA, Development Authority Rev. (Georgia Tech
Foundation), "A", 5.75%, 2017 1,000,000 1,089,730
Private Colleges & University Authority (Emory University), "A",
5.75%, 2009 (c) 1,000,000 1,076,750
Private Colleges & University Authority (Emory University), "A",
5.75%, 2010 (c) 1,000,000 1,091,280
Private Colleges & University Authority (Mercer University),
5.75%, 2021 500,000 535,400
Savannah, GA, Economic Development Authority Rev. (College of
Art & Design, Inc.), ETM, 6.2%, 2009 (c) 500,000 519,330
------------
$ 6,032,581
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Georgia Private College & University Authority Rev. (Mercer Housing
Dormitories - 2.6% Corp.), "A", 6%, 2021 $ 500,000 $ 529,275
Marietta, GA, Development Authority Rev., Student Housing (Southern
Polytech University), "A", 6.25%, 2007 (c) 1,000,000 1,058,240
------------
$ 1,587,515
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 5.8% Georgia Municipal Electric Authority Power Rev., "A", MBIA, 6.5%, 2020 $ 1,250,000 $ 1,537,375
Griffin, GA, Combined Public Utility Rev., Refunding & Improvement,
AMBAC, 5%, 2025 500,000 521,905
Monroe County, GA, Pollution Control Rev. (Oglethorpe Power Corp.),
"A", 6.8%, 2012 1,000,000 1,136,740
Summerville, GA, Public Utility Rev., Refunding & Improvement,
5.75%, 2026 350,000 372,950
------------
$ 3,568,970
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 25.4% Atlanta, GA, Water & Wastewater Rev., "A", MBIA, 5%, 2033 $ 500,000 $ 514,210
Atlanta, GA, Water & Wastewater Rev., RITES, FGIC, 7.019%, 2016 (z)(v) 4,000,000 4,744,400
Augusta, GA, Water & Sewer Rev., FSA, 5.25%, 2034 1,000,000 1,064,770
Clayton County, GA, Water Authority, Water & Sewer Rev., 6.25%,
2010 (c) 1,000,000 1,103,360
Columbia County, GA, Water & Sewer Rev., FGIC, 6.25%, 2010 (c) 470,000 516,314
De Kalb County, GA, Water & Sewer Rev., 5.125%, 2031 1,200,000 1,257,504
Fairburn, GA, Utility Rev., 5.75%, 2020 500,000 527,990
Forsyth County, GA, Water & Sewer Authority, 6.25%, 2010 (c) 1,105,000 1,217,290
Fulton County, GA, Water & Sewer Rev., FGIC, 6.375%, 2014 100,000 111,947
Fulton County, GA, Water & Sewer Rev., FGIC, ETM, 6.375%, 2014 (c) 2,150,000 2,410,430
Gainesville, GA, Water & Sew Rev., FGIC, 5.625%, 2019 1,000,000 1,074,990
Jackson County, GA, Water & Sewer Authority, "A", AMBAC, 5.75%, 2017 1,000,000 1,094,890
------------
$ 15,638,095
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $57,018,161) $ 60,364,045
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.5%
- ---------------------------------------------------------------------------------------------------------------------------------
Georgia Municipal Electric Authority, 3.05%, due 4/05/06 $ 100,000 $ 100,000
Jefferson County, AL, Sewer Rev., Capital Improvement Warrants, "A",
3.22%, due 4/06/06 200,000 200,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 300,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $57,318,161) $ 60,664,045
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.4% 832,368
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $ 61,496,413
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $1,000,000 Fixed - 3 Year Floating - 7 day $13,733
BMA Swap Index (2.795%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/16/16 USD 1,000,000 Fixed - 10 Year Floating - 7 Day 2,576
BMA Swap Index (3.977%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
7/13/16 USD 1,000,000 Fixed - 10 Year Floating - 7 Day 21,024
BMA Swap Index (3.742%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
8/30/16 USD 1,500,000 Fixed - 10 Year Floating - 7 Day 11,519
BMA Swap Index (3.926%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/15/18 USD 1,500,000 Fixed - 12 Year Floating - 7 Day 7,896
BMA Swap Index (4.019%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/22/18 USD 1,000,000 Fixed - 12 Year Floating - 7 Day 19,031
BMA Swap Index (3.861%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 600,000 Floating - 3 Month Fixed - 20 Year (9,298)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- ------------------------------------------------------------------------------------------------------------------------------
$66,481
=======
At March 31, 2006, the fund had sufficient cash and/or securities to cover any commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) MARYLAND MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 96.6%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport and Port Maryland Transportation Authority Rev. (Baltimore/Washington
Revenue - 0.8% International Airport), "A", AMBAC, 5%, 2027 $ 1,000,000 $ 1,035,430
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 4.1% Baltimore, MD, "B", 7.15%, 2009 $ 2,120,000 $ 2,350,910
Baltimore, MD, Public Improvement, "A", MBIA, 7%, 2009 1,000,000 1,110,980
Frederick County, MD, Public Facilities, 5.25%, 2009 (c) 2,000,000 2,114,600
------------
$ 5,576,490
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 14.1% Howard County, MD, "B", 0%, 2008 $ 1,000,000 $ 914,320
Howard County, MD, Consolidated Public Improvement,
"A", 5.5%, 2008 (c) 1,000,000 1,043,770
Howard County, MD, Consolidated Public Improvement,
"A", 5.5%, 2008 (c) 2,000,000 2,087,540
Prince George's County, MD, 0%, 2007 5,110,000 4,887,255
Prince George's County, MD, Consolidated Public Improvement,
"A", 5%, 2023 2,000,000 2,112,420
Prince George's County, MD, Unrefunded Balance, Public Improvement,
FSA, 5.375%, 2015 80,000 85,322
Puerto Rico Municipal Finance Agency, RITES, FSA, 7.101%, 2019 (z)(v) 1,000,000 1,135,640
Washington Suburban Sanitation District, General Construction Rev.,
5%, 2027 930,000 973,766
Washington Suburban Sanitation District, General Construction Rev.,
5%, 2028 980,000 1,024,619
Washington Suburban Sanitation District, General Construction Rev.,
5%, 2029 1,025,000 1,070,090
Worcester County, MD, Public Improvement, 5.625%, 2010 (c) 1,620,000 1,748,255
Worcester County, MD, Public Improvement, 5.625%, 2010 (c) 2,030,000 2,190,715
------------
$ 19,273,712
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Maryland Health & Higher Educational Facilities Authority Rev.
Hospitals - 19.9% (Peninsula Regional Medical Center), 5%, 2036 $ 1,000,000 $ 1,018,390
Maryland Health & Higher Educational Facilities Authority Rev.
(Adventist Healthcare), "A", 5.75%, 2025 1,000,000 1,052,800
Maryland Health & Higher Educational Facilities Authority Rev. (Anne
Arundel Health Systems), "A", FSA, 5%, 2023 1,000,000 1,044,540
Maryland Health & Higher Educational Facilities Authority Rev.
(Calvert Health Systems), 5.5%, 2039 1,000,000 1,048,480
Maryland Health & Higher Educational Facilities Authority Rev.
(Carroll County General Hospital), 6%, 2037 1,000,000 1,058,430
Maryland Health & Higher Educational Facilities Authority Rev.
(Doctors Community Hospital), 5.5%, 2024 1,000,000 1,001,800
Maryland Health & Higher Educational Facilities Authority Rev.
(Frederick Memorial Hospital), 5.125%, 2035 1,000,000 1,007,620
Maryland Health & Higher Educational Facilities Authority Rev. (Good
Samaritan Hospital), ETM, 5.7%, 2009 (c) 1,085,000 1,133,706
Maryland Health & Higher Educational Facilities Authority Rev. (Johns
Hopkins Hospital), 5%, 2021 750,000 772,440
Maryland Health & Higher Educational Facilities Authority Rev. (Johns
Hopkins Medical Institutions), "A", 5%, 2037 750,000 763,140
Maryland Health & Higher Educational Facilities Authority Rev.
(Lifebridge Health), "A", 5.125%, 2034 1,000,000 1,018,420
Maryland Health & Higher Educational Facilities Authority Rev.
(Medlantic/Helix Issue), "B", AMBAC, 5.25%, 2038 1,500,000 1,668,660
Maryland Health & Higher Educational Facilities Authority Rev.
(Medstar Health), 5.5%, 2033 800,000 829,224
Maryland Health & Higher Educational Facilities Authority Rev. (Mercy
Medical Center), FSA, 5.625%, 2017 1,800,000 1,843,650
Maryland Health & Higher Educational Facilities Authority Rev. (North
Arundel Hospital), 6.5%, 2010 (c) 500,000 557,455
Maryland Health & Higher Educational Facilities Authority Rev.
(Suburban Hospital), "A", 5.5%, 2016 1,000,000 1,077,410
Maryland Health & Higher Educational Facilities Authority Rev. (Union
Hospital of Cecil County Issue), 5.625%, 2032 1,000,000 1,045,590
Maryland Health & Higher Educational Facilities Authority Rev. (Union
Hospital of Cecil County Issue), 5%, 2035 500,000 506,980
Maryland Health & Higher Educational Facilities Authority Rev.
(University of Maryland Medical Systems), 6.625%, 2010 (c) 1,000,000 1,106,890
Maryland Health & Higher Educational Facilities Authority Rev.
(University of Maryland Medical Systems), "B", AMBAC, 5%, 2024 1,000,000 1,048,160
Maryland Health & Higher Educational Facilities Authority Rev. (Upper
Chesapeake Hospital), "A", FSA, 5.5%, 2020 2,000,000 2,078,040
Maryland Health & Higher Educational Facilities Rev. (Helix Health
Issue), AMBAC, ETM, 5%, 2027 (c) 1,000,000 1,062,920
Maryland Industrial Development Authority, Economic Development Rev.,
RIBS, FSA, 8.36%, 2022 (v) 1,400,000 1,776,180
Maryland State Health & Higher Educational Facilities Authority Rev.
(Catholic Health), "A", 6%, 2020 245,000 269,904
Maryland State Health & Higher Educational Facilities Authority Rev.
(Catholic Health), "A", ETM, 6%, 2020 (c) 755,000 820,723
Montgomery County, MD, Economic Development (Trinity Healthcare
Group), 5.125%, 2022 500,000 517,945
------------
$ 27,129,497
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Maryland Health & Higher Educational Facilities Authority Rev.
Term Care - 1.1% (Bradford Oaks Nursing & Rehabilitation Center), 6.375%, 2027 $ 1,000,000 $ 1,004,230
Maryland Health & Higher Educational Facilities Authority Rev. (Mercy
Ridge), "A", 6%, 2035 150,000 155,106
Westminster, MD, Economic Development Rev. (Carroll Lutheran
Village), "A", 6.25%, 2034 400,000 410,968
------------
$ 1,570,304
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Baltimore, MD, Port Facilities Rev., Consolidated Coal Sales, "B",
Chemicals - 1.2% 6.5%, 2011 $ 1,500,000 $ 1,587,675
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Environmental Services - Northeast Maryland Waste Disposal Authority Resources Recovery Rev.
0.5% (Baltimore Resco Retrofit Project), 5%, 2012 $ 690,000 $ 703,848
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Virgin Islands Public Finance Authority, Refinery Facilities Rev.
Other - 0.3% (Hovensa Refinery), 5.875%, 2022 $ 375,000 $ 395,445
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment & Maryland Industrial Development Authority Economic Development
Tourism - 0.8% (Baltimore Aquarium Project), 5.2%, 2026 $ 1,000,000 $ 1,042,880
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Other - 4.4% Baltimore, MD, Convention Center Hotel Rev., "A", XLCA, 5.25%, 2039 $ 1,000,000 $ 1,066,010
Baltimore, MD, Convention Center Hotel Rev., "B", 5.875%, 2039 300,000 310,464
Harford County MD, Economic Development Rev. (Battelle Memorial
Institute Project), 5.25%, 2034 1,600,000 1,669,952
Maryland Industrial Authority Economic Development Rev. (YMCA
Baltimore), 8%, 2006 (c) 2,825,000 2,920,937
------------
$ 5,967,363
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing
Revenue - 4.3% Baltimore, MD, City Housing Corp. Rev., "A", FHA, 7.25%, 2023 $ 1,040,000 $ 1,041,830
Baltimore, MD, City Housing Corp. Rev., FHA, 7.75%, 2009 420,000 418,669
Maryland Community Development Administration (Waters Landing II
Apartments), "A", GNMA, 5.875%, 2033 1,500,000 1,570,275
Maryland Community Development Administration, "A", 5%, 2034 910,000 911,665
Maryland Community Development Administration, "A", 5.1%, 2044 970,000 972,386
Maryland Community Development Administration, "D", 5%, 2032 1,000,000 997,020
------------
$ 5,911,845
- ---------------------------------------------------------------------------------------------------------------------------------
Parking - 1.1% Maryland Health & Higher Educational Facilities Authority Rev. (Johns
Hopkins Medical Institutions), AMBAC, 5%, 2034 $ 1,500,000 $ 1,554,195
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Prince George's County, MD, Housing Single Family Collateral, "A",
Local - 0.3% 7.4%, 2032 $ 40,000 $ 40,204
Prince George's County, MD, Housing Single Family Collateral, "A",
GNMA, 5.6%, 2034 85,000 85,811
Prince George's County, MD, Housing Single Family, "A", GNMA,
5.375%, 2018 240,000 244,598
------------
$ 370,613
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Maryland Community Development Administration Housing, "A",
State - 3.3% 5.875%, 2016 $ 1,155,000 $ 1,184,568
Maryland Community Development Administration Residential, "B",
4.75%, 2019 785,000 787,261
Maryland Community Development Administration Single Family Program,
First Series, 5.15%, 2018 2,000,000 2,024,520
Puerto Rico Housing Finance Authority Home Mortgage Rev., Mortgage
Backed Securities, "A", 4.75%, 2023 180,000 180,254
Puerto Rico Housing Finance Authority Mortgage Backed Securities,
"A", 4.375%, 2017 305,000 299,385
------------
$ 4,475,988
- ---------------------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 0.8% Northeast Maryland Waste Disposal Authority Solid Waste Rev., 6%, 2006 $ 1,100,000 $ 1,105,126
- ---------------------------------------------------------------------------------------------------------------------------------
State & Agency -
Other - 4.2% Howard County, MD, COP, 8%, 2019 $ 805,000 $ 1,115,295
Howard County, MD, COP, 8%, 2019 385,000 533,402
Howard County, MD, COP, 8%, 2019 680,000 942,113
Howard County, MD, COP, 8.15%, 2021 450,000 640,004
Prince George's County, MD, COP, "A", MBIA, 0%, 2006 2,490,000 2,469,532
------------
$ 5,700,346
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies - Maryland Stadium Authority, Lease Rev. (Convention Center Expansion),
4.5% AMBAC, 5.875%, 2012 $ 1,000,000 $ 1,011,290
Prince George's County, MD, Lease Development Authority Rev., MBIA,
0%, 2009 1,500,000 1,321,230
Puerto Rico Public Finance Corp., Commonwealth Appropriation, "E",
5.7%, 2010 (c) 1,235,000 1,323,574
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2013 (z)(v) 500,000 591,270
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2016 (z)(v) 1,520,000 1,844,490
------------
$ 6,091,854
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.5% Virgin Islands Public Finance Authority Rev., "A", 5.5%, 2022 $ 1,000,000 $ 1,036,310
Virgin Islands Public Finance Authority Rev., "E", 5.875%, 2018 1,000,000 1,053,060
------------
$ 2,089,370
- ---------------------------------------------------------------------------------------------------------------------------------
Tax Assessment - 1.6% Anne Arundel County, MD, Special Obligations (Arundel Mills Project),
5.125%, 2029 $ 1,555,000 $ 1,639,794
Prince George's County, MD, Special Obligations (National Harbor
Project), 5.2%, 2034 500,000 498,710
------------
$ 2,138,504
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.6% Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico,
5.375%, 2033 $ 235,000 $ 240,901
Guam Economic Development Authority Tobacco Settlement,
"B", 5.5%, 2041 400,000 408,220
Virgin Islands Tobacco Settlement Financing Corp., 5%, 2021 235,000 236,781
------------
$ 885,902
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Annapolis, MD, Economic Development Rev. (St. John's College),
14.2% 5.5%, 2018 $ 750,000 $ 771,735
Anne Arundel County, MD, Economic Development (Community College
Project), 5.25%, 2028 1,600,000 1,691,168
Frederick County, MD, Educational Facilities Rev. (Mount St. Mary's
College), "A", 5.7%, 2020 850,000 880,039
Maryland Health & Higher Education (College Of Art), 5%, 2030 750,000 758,888
Maryland Health & Higher Education (Loyola College), "A", 5%, 2040 1,000,000 1,012,050
Maryland Health & Higher Educational Facilities Authority Rev.
(Goucher College), 5.375%, 2025 500,000 530,155
Maryland Health & Higher Educational Facilities Authority Rev. (Johns
Hopkins University), 5.625%, 2027 1,400,000 1,446,536
Maryland Health & Higher Educational Facilities Authority Rev. (Johns
Hopkins University), "A", 5%, 2032 2,000,000 2,066,920
Maryland Health & Higher Educational Facilities Authority Rev.
(Loyola College), "A", MBIA, 5.5%, 2006 (c) 3,000,000 3,089,280
Montgomery County, MD, Rev. Authority (College Arts Center Project),
"A", 5%, 2027 1,950,000 2,030,750
Morgan State University, MD, Academic, "A", MBIA, ETM, 0%, 2006 (c) 1,135,000 1,125,591
Morgan State University, MD, Academic, "A", MBIA, ETM, 0%, 2008 (c) 1,400,000 1,289,106
Morgan State University, MD, Academic, MBIA, 6.05%, 2015 1,500,000 1,676,100
Westminster, MD, Educational Facilities Rev. (McDaniel College),
5.5%, 2032 1,000,000 1,038,630
------------
$ 19,406,948
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Maryland Economic Development Corp. (Morgan State University
Dormitories - 3.7% Project), "A", 6%, 2034 $ 1,000,000 $ 1,037,550
Maryland Economic Development Corp. (University of Maryland College
Park Project), AMBAC, 5%, 2019 1,850,000 1,928,551
Maryland Economic Development Corp., Collegiate Housing (Salisbury),
"A", 6%, 2019 1,000,000 1,041,910
Maryland Economic Development Corp., Collegiate Housing Rev. (Towson
University), "A", 5.75%, 2029 1,000,000 1,008,950
------------
$ 5,016,961
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Secondary Maryland Industrial Development Financing Authority, Economic
Schools - 0.3% Development Authority Rev., (Our Lady of Good Council), "A", 6%, 2035 $ 400,000 $ 424,272
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 3.6% Guam Power Authority Rev., RITES, AMBAC, 6.565%, 2015 (z)(v) $ 1,680,000 $ 1,875,149
Puerto Rico Electric Power Authority Rev., "NN", 5.125%, 2024 1,500,000 1,566,690
Puerto Rico Electric Power Authority Rev., RITES, FSA, 6.559%,
2015 (z)(v) 1,400,000 1,497,244
------------
$ 4,939,083
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Baltimore, MD, Project Rev., Refunding Water Projects, "A", FGIC,
Revenue - 5.4% 5.125%, 2032 $ 1,000,000 $ 1,044,100
Baltimore, MD, Rev., LEVRRS, MBIA, 7.9%, 2020 (v) 3,000,000 3,752,880
Baltimore, MD, Wastewater Rev. Project, "A", MBIA, 5.65%, 2020 2,000,000 2,250,960
Puerto Rico Aqueduct & Sewer Authority Rev., ETM, 10.25%, 2009 (c) 250,000 277,590
------------
$ 7,325,530
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $124,432,764) $131,719,181
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.6%
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "A", 3.22%, due 4/06/06 $ 300,000 $ 300,000
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "B", 3.22%, due 4/06/06 400,000 400,000
Triborough Bridge & Tunnel Authority, NY, Rev., "F", 3.16%,
due 4/06/06 100,000 100,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 800,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $125,232,764) $132,519,181
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 2.8% 3,798,079
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $136,317,260
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $3,000,000 Fixed - 3 Year Floating - 7 Day $41,200
BMA Swap Index (2.795%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/16/16 USD 1,500,000 Fixed - 10 Year Floating - 7 Day 3,864
BMA Swap Index (3.977%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
7/13/16 USD 1,000,000 Fixed - 10 Year Floating - 7 Day 21,024
BMA Swap Index (3.742%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
8/30/16 USD 1,500,000 Fixed - 10 Year Floating - 7 Day 11,519
BMA Swap Index (3.926%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/22/18 USD 2,000,000 Fixed - 12 Year Floating - 7 Day 38,062
BMA Swap Index (3.861%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
8/02/21 USD 1,000,000 Fixed - 15 Year Floating -7 Day 15,981
BMA Swap Index (4.011%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 1,250,000 Floating - 3 Month Fixed - 20 Year (19,370)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- ------------------------------------------------------------------------------------------------------------------------------
$112,280
========
At March 31, 2006, the fund had sufficient cash and/or securities to cover any commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) MASSACHUSETTS MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 98.0%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 4.3% Massachusetts Port Authority Rev., 6.125%, 2010 (c) $ 1,460,000 $ 1,594,130
Massachusetts Port Authority Rev., "A", AMBAC, 5%, 2035 2,000,000 2,056,480
Massachusetts Port Authority Rev., "A", FSA, 5.125%, 2017 1,275,000 1,335,257
Massachusetts Port Authority Rev., "A", MBIA, 5%, 2033 3,000,000 3,071,100
Massachusetts Port Authority Rev., "C", 6%, 2010 (c) 1,000,000 1,087,550
Massachusetts Port Authority Rev., ETM, 13%, 2013 (c) 660,000 889,786
------------
$ 10,034,303
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 13.4% Boston, MA, "A", 5.75%, 2010 (c) $ 3,645,000 $ 3,912,871
Brookline, MA, 5.375%, 2019 1,800,000 1,938,906
Commonwealth of Massachusetts, 5.875%, 2009 (c) 1,000,000 1,076,120
Commonwealth of Massachusetts, "B", 5.25%, 2028 2,500,000 2,792,375
Commonwealth of Massachusetts, FGIC, ETM, 7%, 2009 (c) 1,150,000 1,224,865
Greater Lawrence, MA, San District, MBIA, 5.625%, 2020 1,640,000 1,759,703
Lynn, MA, AMBAC, 5.125%, 2018 3,690,000 3,864,426
Middleborough, MA, FGIC, 5.6%, 2010 (c) 75,000 80,712
Salisbury, MA, MBIA, 5.25%, 2031 2,790,000 2,975,033
State of Massachusetts, Consolidated Loan, "A", 6%, 2010 (c) 3,000,000 3,261,900
State of Massachusetts, Consolidated Loan, "B", 5.75%, 2010 (c) 1,000,000 1,079,440
State of Massachusetts, Consolidated Loan, "C", 5.75%, 2010 (c) 1,500,000 1,622,235
Sutton, MA, MBIA, 5.5%, 2017 1,000,000 1,069,060
Sutton, MA, MBIA, 5.5%, 2019 1,000,000 1,066,000
Westford, MA, FGIC, 5.25%, 2020 2,250,000 2,395,080
Weymouth, MA, MBIA, 5.375%, 2020 1,250,000 1,331,375
------------
$ 31,450,101
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations - Massachusetts Bay Transportation Authority, RITES,
Improvement - 5.4% 8.389%, 2016 (z)(v) $ 4,835,000 $ 6,193,828
Massachusetts Bay Transportation Authority, Unrefunded Balance,
"A", 5.75%, 2018 320,000 343,939
Maynard, MA, MBIA, 5.5%, 2021 1,000,000 1,089,480
Springfield, MA, FSA, 6.25%, 2009 (c) 1,600,000 1,749,216
Worcester, MA, "A", FSA, 6%, 2016 2,955,000 3,233,863
------------
$ 12,610,326
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 4.9% Belmont, MA, 5%, 2015 $ 2,165,000 $ 2,195,569
Dudley-Charlton, MA, Regional School District, RITES, FGIC,
6.542%, 2015 (z)(v) 1,365,000 1,618,617
Dudley-Charlton, MA, Regional School District, RITES, FGIC,
6.542%, 2016 (z)(v) 1,430,000 1,706,619
Dudley-Charlton, MA, Regional School District, RITES, FGIC,
6.542%, 2018 (z)(v) 1,565,000 1,888,517
Narragansett, MA, Regional School District, AMBAC, 6%, 2019 1,720,000 1,877,414
Tantasquama, MA, Regional School District, FSA, 5.375%, 2010 (c) 2,000,000 2,149,900
------------
$ 11,436,636
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Massachusetts Development Finance Agency, Massachusetts Biomedical
Hospitals - 10.9% Research, "C", 6.375%, 2016 $ 50,000 $ 54,672
Massachusetts Health & Educational Facilities Authority Rev.
(Baystate Medical Center), "F", 5.75%, 2033 2,000,000 2,103,420
Massachusetts Health & Educational Facilities Authority Rev.
(Berkshire Health Systems), 6.25%, 2031 1,350,000 1,431,756
Massachusetts Health & Educational Facilities Authority Rev. (Caritas
Christi), 6.5%, 2012 500,000 541,735
Massachusetts Health & Educational Facilities Authority Rev. (Caritas
Christi), "B", 6.25%, 2022 20,000 21,493
Massachusetts Health & Educational Facilities Authority Rev.
(Catholic Health East Issue), 5.5%, 2032 1,575,000 1,646,710
Massachusetts Health & Educational Facilities Authority Rev.
(Covenant Health Systems, Inc.), 6.5%, 2017 75,000 83,288
Massachusetts Health & Educational Facilities Authority Rev.
(Covenant Health Systems, Inc.), 6%, 2031 1,000,000 1,080,680
Massachusetts Health & Educational Facilities Authority Rev. (Jordan
Hospital), 5.25%, 2018 1,330,000 1,325,465
Massachusetts Health & Educational Facilities Authority Rev. (Milford
Whitinsville Hospital), 6.35%, 2032 50,000 52,946
Massachusetts Health & Educational Facilities Authority Rev.
(Milford-Whitinsville Regional Hospital), "C", 5.25%, 2018 1,500,000 1,483,845
Massachusetts Health & Educational Facilities Authority Rev. (Milton
Hospital), "C", 5.5%, 2016 800,000 817,280
Massachusetts Health & Educational Facilities Authority Rev. (New
England Medical Center Hospital), "H", FGIC, 5.375%, 2018 1,000,000 1,072,730
Massachusetts Health & Educational Facilities Authority Rev. (New
England Medical Center Hospital), "H", FGIC, 5.375%, 2019 815,000 873,819
Massachusetts Health & Educational Facilities Authority Rev. (New
England Medical Center Hospital), "H", FGIC, 5%, 2025 1,135,000 1,174,782
Massachusetts Health & Educational Facilities Authority Rev. (Newton
Wellesley Hospital), "G", MBIA, 6.125%, 2015 1,000,000 1,047,890
Massachusetts Health & Educational Facilities Authority Rev. (North
Adams Regional Hospital), "C", 6.625%, 2018 475,000 485,811
Massachusetts Health & Educational Facilities Authority Rev.
(Partners Healthcare Systems), 5.75%, 2021 100,000 109,053
Massachusetts Health & Educational Facilities Authority Rev.
(Partners Healthcare Systems), "A", MBIA, 5.375%, 2018 2,000,000 2,057,480
Massachusetts Health & Educational Facilities Authority Rev. (South
Shore Hospital), "F", 5.625%, 2019 2,000,000 2,110,280
Massachusetts Health & Educational Facilities Authority Rev.
(University of Massachusetts Memorial Hospital), 6.5%, 2021 1,000,000 1,095,260
Massachusetts Health & Educational Facilities Authority Rev.
(University of Massachusetts), "D", 5%, 2033 500,000 493,370
Massachusetts Industrial Finance Agency Rev., Capital Appreciation
(Mass Biomedical Research), "A", 0%, 2010 5,300,000 4,409,759
------------
$ 25,573,524
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Boston, MA, Industrial Development Finance Authority, Alzheimer's
Term Care - 0.3% Center Project, FHA, 5.5%, 2012 $ 140,000 $ 140,189
Massachusetts Development Finance Agency Rev., First Mortgage,
(Loomis Communities Project), "A", 6.9%, 2032 530,000 569,697
------------
$ 709,886
- ---------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.4% Massachusetts Health & Educational Facilities Authority Rev.
(Learning Center for Deaf Children), 6.1%, 2019 $ 1,000,000 $ 1,016,200
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Airlines - 1.4% Massachusetts Port Authority Rev. (U.S. Airways), MBIA, 5.875%, 2016 $ 1,900,000 $ 2,000,339
Massachusetts Port Authority Rev., Special Facilities (U.S. Airways),
"A", MBIA, 5.625%, 2011 1,140,000 1,170,529
------------
$ 3,170,868
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Massachusetts Development Finance Agency Rev. (Waste Management,
Environmental Services - Inc.), 5.5%, 2027 $ 750,000 $ 797,138
0.8% Massachusetts Development Finance Agency Rev., Resource Recovery Rev.
(Waste Management, Inc.), 6.9%, 2029 1,000,000 1,089,130
------------
$ 1,886,268
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Massachusetts Development Finance Agency, Resource Recovery Rev.
Other - 2.0% (Flour Corp.), 5.625%, 2019 $ 1,675,000 $ 1,747,427
Massachusetts Industrial Finance Agency Rev. (Welch Foods, Inc.),
5.6%, 2017 2,100,000 2,179,443
Virgin Islands Public Finance Authority, Refinery Facilities Rev.
(Hovensa Refinery), 5.875%, 2022 595,000 627,439
------------
$ 4,554,309
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Other - 1.7% Martha's Vineyard, MA, Land Bank Rev., AMBAC, 5%, 2029 $ 785,000 $ 814,523
Massachusetts Development Finance Agency Rev. (WGBH Educational
Foundation), "A", AMBAC, 5.375%, 2042 (c) 3,000,000 3,156,030
------------
$ 3,970,553
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Massachusetts Development Finance Agency (Morville House Apartments),
Revenue - 4.8% "A", LOC, 4.95%, 2023 $ 2,500,000 $ 2,475,400
Massachusetts Development Finance Agency Rev. (Credit Housing-Chelsea
Homes), "I-A", 5%, 2024 1,185,000 1,173,553
Massachusetts Housing Finance Agency Rev., "F", 5.125%, 2034 720,000 729,288
Massachusetts Housing Finance Agency Rev., "P", 5%, 2023 1,240,000 1,256,294
Massachusetts Housing Finance Agency Rev., "P", 5.1%, 2033 1,565,000 1,578,428
Massachusetts Housing Finance Agency Rev., "P", 5.2%, 2045 1,445,000 1,456,921
Massachusetts Housing Finance Agency Rev., Rental Mortgage, "A",
AMBAC, 5.7%, 2020 1,475,000 1,502,391
Massachusetts Housing Finance Agency, Rev., "E", 5%, 2028 1,000,000 991,900
------------
$ 11,164,175
- ---------------------------------------------------------------------------------------------------------------------------------
Parking - 0.6% Rail Connections, Inc., Massachusetts Rev. (Route 128 Parking
Garage), "A", 6%, 2009 (c) $ 450,000 $ 490,005
Rail Connections, Inc., Massachusetts Rev. (Route 128 Parking
Garage), "A", 6%, 2009 (c) 500,000 544,450
Rail Connections, Inc., Massachusetts Rev. (Route 128 Parking
Garage), "A", 6%, 2009 (c) 250,000 272,225
------------
$ 1,306,680
- ---------------------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax Massachusetts Bay Transportation Authority, Sales Tax Rev.,
Revenue - 1.6% "A", 5%, 2012 (c) $ 2,020,000 $ 2,147,623
Route 3 North Transportation Improvement Associates, MBIA,
5.625%, 2010 (c) 1,500,000 1,610,535
------------
$ 3,758,158
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Massachusetts Housing Finance Agency, Single Family Housing Rev.,
State - 2.4% "102", 5%, 2029 $ 1,500,000 $ 1,503,270
Massachusetts Housing Finance Agency, Single Family Housing Rev.,
"118", 4.75%, 2030 1,500,000 1,461,630
Massachusetts Housing Finance Agency, Single Family Housing Rev.,
"91", 5.5%, 2031 660,000 664,719
Massachusetts Housing Finance Agency, Single Family, "122",
4.85%, 2031 2,000,000 1,995,220
------------
$ 5,624,839
- ---------------------------------------------------------------------------------------------------------------------------------
Solid Waste Revenue - 1.1% Massachusetts Development Finance Agency Rev. (Ogden Haverhill
Associates), 6.7%, 2014 $ 600,000 $ 655,470
Massachusetts Industrial Finance Agency, Resource Recovery Rev.
(Ogden Haverhill Associates), 5.5%, 2013 25,000 26,113
Massachusetts Industrial Finance Agency, Resource Recovery Rev.
(Ogden Haverhill Associates), 5.6%, 2019 1,925,000 1,990,123
------------
$ 2,671,706
- ---------------------------------------------------------------------------------------------------------------------------------
State & Agency - Massachusetts Development Finance Agency Rev., Visual & Performing
Other - 0.6% Arts Project, 6%, 2015 $ 1,235,000 $ 1,406,986
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies -
2.6% Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2016 (z)(v) $ 2,500,000 $ 3,033,700
University of Massachusetts, Building Authority Project, "1", AMBAC,
5.25%, 2023 1,500,000 1,604,220
University of Massachusetts, Building Authority Project, "B", AMBAC,
5.5%, 2018 1,400,000 1,504,454
------------
$ 6,142,374
- ---------------------------------------------------------------------------------------------------------------------------------
Student Loan Revenue - 0.7% Massachusetts Educational Financing Authority, Education Loan Rev.,
"E", AMBAC, 5%, 2015 $ 90,000 $ 91,383
Massachusetts Educational Financing Authority, Education Loan Rev.,
"Issue E", AMBAC, 5.3%, 2016 1,490,000 1,513,021
Massachusetts Educational Financing Authority, Education Loan Rev.,
"Issue G", "A", MBIA, 6.05%, 2017 60,000 61,114
------------
$ 1,665,518
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 2.0% Virgin Islands Public Finance Authority Rev., "A", 5.5%, 2022 $ 2,950,000 $ 3,057,115
Virgin Islands Public Finance Authority Rev., "E", 5.875%, 2018 1,420,000 1,495,345
------------
$ 4,552,460
- ---------------------------------------------------------------------------------------------------------------------------------
Tax Assessment - 3.5% Massachusetts Bay Transportation Authority Assessment, "A",
5.25%, 2030 $ 615,000 $ 641,980
Massachusetts Bay Transportation Authority Assessment, "A",
5.75%, 2010 (c) 3,460,000 3,734,274
Massachusetts Bay Transportation Authority, "A", 5%, 2014 (c) 3,500,000 3,748,465
------------
$ 8,124,719
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.5% Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico,
5.375%, 2033 $ 675,000 $ 691,949
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico,
5.5%, 2039 400,000 410,744
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, "A",
0%, 2050 2,000,000 130,800
------------
$ 1,233,493
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Massachusetts College Building Authority Project Rev., "A", MBIA,
20.0% 5.625%, 2009 (c) $ 1,650,000 $ 1,759,610
Massachusetts College Building Authority Project Rev., "A", XLCA,
5.25%, 2023 1,000,000 1,060,500
Massachusetts Development Finance Agency Rev. (Boston University),
XLCA, 6%, 2059 1,500,000 1,781,820
Massachusetts Development Finance Agency Rev. (Hampshire College),
5.7%, 2034 1,000,000 1,047,930
Massachusetts Development Finance Agency Rev. (Massachusetts College
of Pharmacy), 6.625%, 2010 (c) 50,000 55,551
Massachusetts Development Finance Agency Rev. (Massachusetts College
of Pharmacy), "C", 5.75%, 2033 1,000,000 1,055,580
Massachusetts Development Finance Agency Rev. (Mount Holyoke
College), 5.125%, 2021 1,000,000 1,051,670
Massachusetts Development Finance Agency Rev. (Suffolk University),
5.75%, 2009 (c) 1,000,000 1,069,270
Massachusetts Development Finance Agency Rev. (Suffolk University),
5.85%, 2009 (c) 1,000,000 1,072,290
Massachusetts Development Finance Agency Rev. (Western New England
College), 6.125%, 2032 1,115,000 1,264,243
Massachusetts Development Finance Agency Rev., (Olin College), "B",
XLCA, 5.25%, 2033 3,000,000 3,158,310
Massachusetts Development Finance Agency Rev., Higher Education
(Smith College), 5.5%, 2010 (c) 1,210,000 1,304,513
Massachusetts Development Finance Agency, (Clark University), "N",
XLCA, 5.125%, 2025 1,500,000 1,576,485
Massachusetts Health & Educational Authority Rev. (University of
Massachusetts), "A", FGIC, 5.625%, 2010 (c) 2,170,000 2,354,081
Massachusetts Health & Educational Facilities Authority Rev. (Boston
College), "K", 5.25%, 2023 4,350,000 4,354,959
Massachusetts Health & Educational Facilities Authority Rev. (Simmons
College), "D", AMBAC, 6.05%, 2010 (c) 1,745,000 1,927,213
Massachusetts Health & Educational Facilities Authority Rev. (Simmons
College), "F", FGIC, 5%, 2023 500,000 524,160
Massachusetts Health & Educational Facilities Authority Rev.
(University of Massachusetts Worcester Campus), "B", FGIC,
5.125%, 2019 1,780,000 1,879,591
Massachusetts Health & Educational Facilities Authority Rev.
(University of Massachusetts), "A", FGIC, 5.75%, 2010 (c) 2,395,000 2,610,430
Massachusetts Health & Educational Facilities Authority Rev.
(University of Massachusetts), "A", FGIC, 5.85%, 2010 (c) 1,200,000 1,312,860
Massachusetts Health & Educational Facilities Authority Rev.
(University of Massachusetts), "C", MBIA, 5.25%, 2031 3,000,000 3,175,530
Massachusetts Health & Educational Facilities Authority Rev.
(University of Massachusetts), "D", FGIC, 5%, 2029 1,500,000 1,556,715
Massachusetts Health & Educational Facilities Authority Rev.
(Wellesley College), "H", 5%, 2033 1,000,000 1,031,150
Massachusetts Health & Educational Facilities Authority Rev.
(Wheelock College), "B", MBIA, 5.5%, 2021 3,275,000 3,484,698
Massachusetts Health & Educational Facilities Authority Rev.
(Williams College), "H", 5%, 2028 1,000,000 1,038,670
Massachusetts Industrial Finance Agency Rev. (Brandeis University),
"C", MBIA, 0%, 2009 1,000,000 870,350
Massachusetts Industrial Finance Agency Rev. (Brandeis University),
"C", MBIA, 0%, 2010 1,000,000 831,620
Massachusetts Industrial Finance Agency Rev. (Brandeis University),
"C", MBIA, 0%, 2011 500,000 397,790
Massachusetts State College Building Authority Project Rev., "A",
XLCA, 5%, 2043 2,110,000 2,155,281
------------
$ 46,762,870
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Secondary Massachusetts Development Finance Agency Rev. (Deerfield Academy),
Schools - 4.6% "A", 5%, 2028 $ 1,000,000 $ 1,037,590
Massachusetts Development Finance Agency Rev. (Williston Northampton
School), 6.5%, 2008 (c) 1,300,000 1,410,487
Massachusetts Development Finance Agency Rev. (Xaverian Brothers High
School), 5.55%, 2019 1,000,000 1,044,820
Massachusetts Development Finance Agency Rev. (Xaverian Brothers High
School), 5.65%, 2029 1,000,000 1,035,840
Massachusetts Development Finance Agency Rev., Middlesex School
Education Project, 5.125%, 2023 500,000 528,505
Massachusetts Industrial Finance Agency Rev. (Belmont Hill School),
5.625%, 2020 1,150,000 1,205,568
Massachusetts Industrial Finance Agency Rev. (Concord Academy),
5.5%, 2027 2,000,000 2,078,360
Massachusetts Industrial Finance Agency Rev. (Dana Hall School),
5.9%, 2007 (c) 1,340,000 1,401,734
Massachusetts Industrial Finance Agency Rev. (Tabor Academy),
5.4%, 2018 1,000,000 1,051,330
------------
$ 10,794,234
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Massachusetts Development Finance Agency Dominion Energy Brayton
Owned - 0.9% Point, 5%, 2036 $ 2,000,000 $ 2,013,760
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal Massachusetts Development Finance Agency Rev. (Devens Electric
Owned - 0.3% Systems), 5.625%, 2016 $ 725,000 $ 766,934
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 6.3% Massachusetts State Water Authority General, "A", MBIA, 5%, 2028 $ 800,000 $ 838,024
Massachusetts State Water Pollution Abatement Trust, (Pool Program
Bonds), "10", 5%, 2029 1,000,000 1,039,960
Massachusetts State Water Pollution Abatement Trust, MWRA Program,
"A", 5%, 2032 1,510,000 1,556,070
Massachusetts State Water Resources Authority, "B", MBIA, 5%, 2035 1,000,000 1,039,410
Massachusetts Water Pollution Abatement Trust (Pool Program Bonds),
"10", 5%, 2034 1,000,000 1,035,030
Massachusetts Water Pollution Abatement Trust, Series "5",
5.75%, 2009 (c) 975,000 1,047,101
Massachusetts Water Pollution Abatement Trust, Unrefunded Balance,
Series "5", 5.75%, 2017 25,000 26,695
Massachusetts Water Resources Authority, "A", FGIC, 6%, 2010 (c) 1,000,000 1,097,040
Massachusetts Water Resources Authority, General, "J", FSA, 5%, 2023 500,000 520,290
Massachusetts Water Resources Authority, RITES, FGIC,
8.937%, 2019 (z)(v) 4,010,000 5,522,011
Springfield, MA, Street & Sewer Commission, General, "A", AMBAC,
5%, 2021 1,000,000 1,051,860
------------
$ 14,773,491
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $215,521,616) $229,175,371
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.6%
- ---------------------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, Sewer Rev., Capital Improvement Warrants, "A",
3.22%, due 4/06/06 $ 650,000 $ 650,000
Jefferson County, AL, Sewer Rev., Warrants, "B-4", 3.22%, due 4/06/06 200,000 200,000
Triborough Bridge & Tunnel Authority, NY, Rev., "F",
3.16%, due 4/06/06 700,000 700,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 1,550,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $217,071,616) $230,725,371
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.4% 3,190,258
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $233,915,629
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- ------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $5,000,000 Fixed - 3 Year Floating - Day $68,667
BMA Swap Index (2.795%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/06/16 USD 2,000,000 Fixed - 10 Year Floating - 7 Day 10,603
BMA Swap Index (3.938%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/16/16 USD 3,000,000 Fixed - 10 Year Floating - 7 Day 7,728
BMA Swap Index (3.977%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
7/13/16 USD 1,000,000 Fixed - 10 Year Floating - 7 Day 21,024
BMA Swap Index (3.742%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
6/15/18 USD 5,000,000 Fixed - 12 Year Floating - 7 Day 26,319
BMA Swap Index (4.019%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
8/02/21 USD 2,000,000 Fixed - 15 Year Floating - 7 Day 31,962
BMA Swap Index (4.011%) BMA Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 2,250,000 Floating - 3 Month Fixed - 20 Year (34,867)
LIBOR Swap Index (4.900%) LIBOR Swap Index
- ------------------------------------------------------------------------------------------------------------------------------
$131,436
========
At March 31, 2006 the fund had sufficient cash and/or securities to cover any commitments under these derivative contracts.
The following abbreviations are used in the Portfolio of Investments and are defined:
BMA Bond Market Assn.
COP Certificate of Participation
ETM Escrowed to Maturity
LIBOR London Interbank Offered Rate
LOC Letter of Credit
Insurers Inverse Floaters
-------------------------------------------------------------------------------------------------------------------
AMBAC AMBAC Indemnity Corp. LEVRRS Leveraged Reverse Rate Securities
ASST GTY Asset Guaranty Insurance Co. RIBS Residual Interest Bonds
CHFC California Health Facilities Construction Program RITES Residual Interest Tax-Exempt Security
CIFG CDS IXIS Financial Guaranty ROLS Residual Options Longs
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.
XLCA XL Capital Insurance Co.
Portfolio Footnotes:
(a) SEC Rule 144A restriction.
(c) Refunded bond.
(d) Non-income producing security - in default.
(v) Inverse floating rate security.
(z) Restricted securities (excluding 144A issues) are not registered under the Securities Act of 1933 and are subject to legal
or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or
to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and
prompt sale at an acceptable price may be difficult. The funds hold the following restricted securities:
CURRENT TOTAL %
ACQUISITION ACQUISITION MARKET OF NET
FUND SECURITY DATE COST VALUE ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
Alabama Guam Power Authority Rev., RITES, AMBAC, 6.565%, 2013 5/20/99 $ 536,360 $ 559,090
Fund Guam Power Authority Rev., RITES, AMBAC, 6.065%, 2018 5/20/99 4,376,790 4,828,950
Puerto Rico Municipal Finance Agency, RITES, FSA,
7.101%, 2017 1/06/00 469,080 567,820
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2013 9/30/99 509,110 591,270
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2016 3/31/99 569,030 606,740
- ---------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $ 7,153,870 8.2%
=========== ====
Arkansas Commonwealth of Puerto Rico, RITES, MBIA, 7.599%, 2020 3/30/00 $3,067,320 $ 3,463,440
Fund Commonwealth of Puerto Rico, Infrastructure, RITES, ETM,
7.099%, 2019 10/05/00 1,282,225 1,441,850
Puerto Rico Municipal Finance Agency, RITES, FSA,
7.101%, 2017 1/06/00 689,548 834,695
Puerto Rico Municipal Finance Agency, RITES, FSA,
7.101%, 2018 1/06/00 3,006,835 3,690,830
- ---------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $ 9,430,815 7.1%
=========== ====
California Commonwealth of Puerto Rico, ROLS, Series II R 124B, XLCA,
Fund 7.693%, 2017 10/22/01 $1,816,140 $ 1,840,650
Commonwealth of Puerto Rico, ROLS, Series II R 184C, FGIC,
7.763%, 2020 8/05/02 4,269,738 4,077,546
Los Angeles, CA, RITES, 6.519%, 2014 7/20/99 5,672,548 6,433,788
Los Angeles, CA, Union School District, RITES, FSA,
6.519%, 2020 3/04/03 5,808,100 5,692,700
Southern California Metropolitan Water District Rev., RITES,
7.542%, 2018 5/07/01 5,819,300 6,313,500
State of California, RITES, "B", 7.519%, 2017 1/03/00 1,230,275 1,459,750
University of California Rev., RITES, MBIA, 6.985%, 2016 5/21/99 5,783,273 6,052,663
- ---------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $31,870,597 8.3%
=========== ====
Florida Commonwealth of Puerto Rico, Highway & Transportation, ROLS, 4/25/03 $3,282,600 $ 3,185,200
Fund Railroad II R 227 1, MBIA, 7.763%, 2020
Commonwealth of Puerto Rico, RITES, MBIA, 7.599%, 2019 3/30/00 1,030,240 1,154,480
State of Florida, RITES, 6.019%, 2017 4/09/99 3,042,840 3,288,960
- ---------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $ 7,628,640 8.9%
=========== ====
Georgia Atlanta, GA, Water & Wastewater Rev., RITES, FGIC,
Fund 7.019%, 2016 4/20/99 $4,668,400 $ 4,744,400
Puerto Rico Municipal Finance Agency, RITES, FSA,
8.108%, 2016 1/06/00 519,760 583,340
- ---------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $ 5,327,740 8.7%
=========== ====
Maryland Guam Power Authority Rev., RITES, AMBAC, 6.565%, 2015 5/20/99 $1,760,909 $ 1,875,149
Fund Puerto Rico Electric Power Authority Rev., RITES, FSA,
6.559%, 2015 9/16/99 1,367,100 1,497,244
Puerto Rico Municipal Finance Agency, RITES, FSA,
7.101%, 2019 1/06/00 905,080 1,135,640
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2013 9/30/99 509,110 591,270
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2016 3/31/99 1,729,851 1,844,490
- ---------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $ 6,943,793 5.1%
=========== ====
Massachusetts Dudley-Charlton, MA, Regional School District, RITES, FGIC,
Fund 6.542%, 2015 5/05/99 $1,501,582 $ 1,618,617
Dudley-Charlton, MA, Regional School District, RITES, FGIC,
6.542%, 2016 5/05/99 1,558,414 1,706,619
Dudley-Charlton, MA, Regional School District, RITES, FGIC,
6.542%, 2018 5/05/99 1,687,884 1,888,517
Massachusetts Bay Transportation Authority, RITES,
8.389%, 2016 4/19/00 5,484,534 6,193,828
Massachusetts Water Resources Authority, RITES, FGIC,
8.937%, 2019 3/16/00 4,742,707 5,522,011
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2016 3/31/99 2,845,150 3,033,700
- ---------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $19,963,292 8.5%
=========== ====
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
This statement represents your fund's balance sheet, which details the assets
and liabilities composing the total value of your fund.
ALABAMA ARKANSAS CALIFORNIA FLORIDA
At 3/31/06 FUND FUND FUND FUND
ASSETS
- -----------------------------------------------------------------------------------------------------------------------
Investments -
Identified cost $81,650,077 $124,462,930 $356,222,967 $81,513,329
Unrealized appreciation (depreciation) 4,241,019 7,049,689 19,678,789 3,494,396
- -----------------------------------------------------------------------------------------------------------------------
Total investments, at value $85,891,096 $131,512,619 $375,901,756 $85,007,725
Cash 68,561 3,614 645 42,965
Receivable for investments sold 620,000 34,203 -- 525,204
Receivable for fund shares sold 72,146 154,565 176,665 35,711
Interest receivable 1,291,220 1,888,314 4,885,004 1,526,804
Unrealized appreciation on interest rate swaps 88,161 149,546 255,578 97,711
- -----------------------------------------------------------------------------------------------------------------------
Total assets $88,031,184 $133,742,861 $381,219,648 $87,236,120
- -----------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------
Distributions payable $130,620 $212,967 $639,062 $159,705
Payable for investments purchased -- -- -- 1,200,000
Payable for fund shares reacquired 130,265 668,836 292,150 406,663
Unrealized depreciation on interest rate swaps 43,189 57,140 256,625 17,830
Payable to affiliates -
Management fee 1,319 1,088 3,117 705
Shareholder servicing costs 8,030 9,642 24,434 6,439
Distribution and service fees 876 3,719 18,644 780
Administrative services fee 54 56 113 46
Payable for independent trustees' compensation 11,629 10,896 22,421 10,816
Accrued expenses and other liabilities 58,320 63,070 88,793 61,017
- -----------------------------------------------------------------------------------------------------------------------
Total liabilities $384,302 $1,027,414 $1,345,359 $1,864,001
- -----------------------------------------------------------------------------------------------------------------------
Net assets $87,646,882 $132,715,447 $379,874,289 $85,372,119
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- -----------------------------------------------------------------------------------------------------------------------
Paid-in capital $83,359,647 $125,959,954 $362,138,585 $82,164,042
Unrealized appreciation (depreciation)
on investments 4,285,991 7,142,095 19,677,742 3,574,277
Accumulated net realized gain (loss)
on investments 159,426 (458,545) (1,340,298) (264,735)
Accumulated undistributed (distributions in
excess of) net investment income (158,182) 71,943 (601,740) (101,465)
- -----------------------------------------------------------------------------------------------------------------------
Net assets $87,646,882 $132,715,447 $379,874,289 $85,372,119
- -----------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
ALABAMA ARKANSAS CALIFORNIA FLORIDA
FUND FUND FUND FUND
Net assets
Class A $74,203,651 $122,067,032 $291,656,588 $70,401,793
Class B 13,443,231 10,648,415 58,337,772 14,970,326
Class C -- -- 29,879,929 --
- -----------------------------------------------------------------------------------------------------------------------
Total net assets $87,646,882 $132,715,447 $379,874,289 $85,372,119
- -----------------------------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding
Class A 7,088,318 12,162,073 49,972,336 7,002,547
Class B 1,284,386 1,059,820 9,991,128 1,489,014
Class C -- -- 5,102,071 --
- -----------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding 8,372,704 13,221,893 65,065,535 8,491,561
- -----------------------------------------------------------------------------------------------------------------------
Class A shares
Net asset value per share
(net assets/shares of beneficial interest outstanding) $10.47 $10.04 $5.84 $10.05
- -----------------------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25Xnet
asset value per share) $10.99 $10.54 $6.13 $10.55
- -----------------------------------------------------------------------------------------------------------------------
Class B shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $10.47 $10.05 $5.84 $10.05
- -----------------------------------------------------------------------------------------------------------------------
Class C shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $-- $-- $5.86 $--
- -----------------------------------------------------------------------------------------------------------------------
On sales of $100,000 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
Statement of Assets and Liabilities - continued
GEORGIA MARYLAND MASSACHUSETTS
At 3/31/06 FUND FUND FUND
ASSETS
- -------------------------------------------------------------------------------------------------------
Investments -
Identified cost $57,318,161 $125,232,764 $217,071,616
Unrealized appreciation (depreciation) 3,345,884 7,286,417 13,653,755
- -------------------------------------------------------------------------------------------------------
Total investments, at value $60,664,045 $132,519,181 $230,725,371
Cash 54,250 10,346 75,124
Receivable for investments sold -- 1,990,060 --
Receivable for fund shares sold 35,215 221,015 38,886
Interest receivable 1,049,860 1,811,021 3,518,806
Unrealized appreciation on interest rate swaps 78,108 138,638 177,949
- -------------------------------------------------------------------------------------------------------
Total assets $61,881,478 $136,690,261 $234,536,136
- -------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------
Distributions payable $74,291 $195,558 $379,043
Payable for fund shares reacquired 219,553 51,437 86,480
Unrealized depreciation on interest rate swaps 11,627 26,358 46,513
Payable to affiliates -
Management fee 2,973 1,117 1,921
Shareholder servicing costs 5,163 11,472 14,333
Distribution and service fees 624 2,134 2,899
Administrative services fee 39 58 79
Payable for independent trustees' compensation 13,270 16,074 16,494
Accrued expenses and other liabilities 57,525 68,793 72,745
- -------------------------------------------------------------------------------------------------------
Total liabilities $385,065 $373,001 $620,507
- -------------------------------------------------------------------------------------------------------
Net assets $61,496,413 $136,317,260 $233,915,629
- -------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- -------------------------------------------------------------------------------------------------------
Paid-in capital $58,325,749 $129,113,504 $220,161,630
Unrealized appreciation (depreciation) on investments 3,412,365 7,398,697 13,785,191
Accumulated net realized gain (loss) on investments (67,496) 75,408 446,067
Accumulated distributions in excess of net
investment income (174,205) (270,349) (477,259)
- -------------------------------------------------------------------------------------------------------
Net assets $61,496,413 $136,317,260 $233,915,629
- -------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND
Net assets
Class A $51,680,550 $115,306,646 $196,991,730
Class B 9,815,863 21,010,614 36,923,899
- -------------------------------------------------------------------------------------------------------
Total net assets $61,496,413 $136,317,260 $233,915,629
- -------------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding
Class A 4,783,583 10,230,813 17,554,782
Class B 905,305 1,865,219 3,285,201
- -------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding 5,688,888 12,096,032 20,839,983
- -------------------------------------------------------------------------------------------------------
Class A shares
Net asset value per share
(net assets/shares of beneficial interest outstanding) $10.80 $11.27 $11.22
- -------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25Xnet
asset value per share) $11.34 $11.83 $11.78
- ----------------------------------------------------------------------------- -------------------------
Class B shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $10.84 $11.26 $11.24
- -------------------------------------------------------------------------------------------------------
On sales of $100,000 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
FINANCIAL STATEMENTS STATEMENT OF OPERATIONS
This statement describes how much your fund received in investment income and
paid in expenses. It also describes any gains or losses generated by fund
operations.
ALABAMA ARKANSAS CALIFORNIA FLORIDA
FUND FUND FUND FUND
For year ended 3/31/06
NET INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------------------------
Interest $4,777,315 $7,059,394 $20,690,822 $4,431,057
- -----------------------------------------------------------------------------------------------------------------------
Expenses -
Management fee $502,775 $759,174 $2,142,271 $479,444
Distribution and service fees 335,896 222,686 1,165,659 132,855
Shareholder servicing costs 136,331 184,594 526,298 121,782
Administrative services fee 17,808 23,073 51,617 17,317
Independent trustees' compensation 5,020 7,545 15,656 5,433
Custodian fee 34,535 47,487 160,938 38,608
Shareholder communications 8,865 17,412 38,975 10,681
Auditing fees 44,324 44,334 43,592 44,322
Legal fees 6,539 6,234 19,841 6,956
Miscellaneous 38,979 44,217 61,870 48,050
- -----------------------------------------------------------------------------------------------------------------------
Total expenses $1,131,072 $1,356,756 $4,226,717 $905,448
- -----------------------------------------------------------------------------------------------------------------------
Fees paid indirectly (7,220) (11,458) (51,458) (8,011)
Reduction of expenses by investment adviser (230,537) (345,913) (976,123) (218,447)
- -----------------------------------------------------------------------------------------------------------------------
Net expenses $893,315 $999,385 $3,199,136 $678,990
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $3,884,000 $6,060,009 $17,491,686 $3,752,067
- -----------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -----------------------------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis) -
Investment transactions $262,160 $399,844 $(1,611,564) $721,513
Swap transactions (29,612) 118,119 432,384 77,734
- -----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $232,548 $517,963 $(1,179,180) $799,247
- -----------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments $(1,547,321) $(2,271,359) $(1,078,662) $(1,100,601)
Swap transactions (31,266) (40,094) 9,311 (22,481)
- -----------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $(1,578,587) $(2,311,453) $(1,069,351) $(1,123,082)
- -----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $(1,346,039) $(1,793,490) $(2,248,531) $(323,835)
- -----------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $2,537,961 $4,266,519 $15,243,155 $3,428,232
- -----------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Operations - continued
GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND
For year ended 3/31/06
NET INVESTMENT INCOME
- -------------------------------------------------------------------------------------------------------
Interest $3,398,968 $7,706,790 $12,547,081
- -------------------------------------------------------------------------------------------------------
Expenses -
Management fee $363,158 $798,552 $1,347,164
Distribution and service fees 250,537 659,530 1,111,313
Shareholder servicing costs 93,229 213,835 345,799
Administrative services fee 14,882 23,971 35,281
Independent trustees' compensation 5,915 9,684 15,175
Custodian fee 28,411 57,213 89,527
Shareholder communications 8,404 19,917 28,728
Auditing fees 44,319 44,337 43,559
Legal fees 9,349 8,201 8,382
Miscellaneous 44,357 46,892 52,730
- -------------------------------------------------------------------------------------------------------
Total expenses $862,561 $1,882,132 $3,077,658
- -------------------------------------------------------------------------------------------------------
Fees paid indirectly (7,457) (12,121) (20,035)
Reduction of expenses by investment adviser (166,822) (363,950) (613,881)
- -------------------------------------------------------------------------------------------------------
Net expenses $688,282 $1,506,061 $2,443,742
- -------------------------------------------------------------------------------------------------------
Net investment income $2,710,686 $6,200,729 $10,103,339
- -------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- -------------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis) -
Investment transactions $49,753 $584,002 $1,150,361
Swap transactions 55,181 55,409 618,028
- -------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $104,934 $639,411 $1,768,389
- -------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments $(1,169,922) $(2,711,507) $(2,758,406)
Swap transactions 1,406 83,165 5,430
- -------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $(1,168,516) $(2,628,342) $(2,752,976)
- -------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $(1,063,582) $(1,988,931) $(984,587)
- -------------------------------------------------------------------------------------------------------
Change in net assets from operations $1,647,104 $4,211,798 $9,118,752
- -------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS STATEMENT OF CHANGES IN NET ASSETS
The statement describes the increases and/or decreases in net assets resulting
from operations, any distributions, and any shareholder transactions.
ALABAMA ARKANSAS CALIFORNIA FLORIDA
FUND FUND FUND FUND
For year ended 3/31/06
CHANGE IN NET ASSETS
FROM OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $3,884,000 $6,060,009 $17,491,686 $3,752,067
Net realized gain (loss) on investments 232,548 517,963 (1,179,180) 799,247
Net unrealized gain (loss) on investments (1,578,587) (2,311,453) (1,069,351) (1,123,082)
- -----------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $2,537,961 $4,266,519 $15,243,155 $3,428,232
- -----------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
From net investment income
Class A $(3,354,087) $(5,605,194) $(13,643,612) $(3,110,488)
Class B (517,644) (401,413) (2,512,572) (644,130)
Class C -- -- (1,210,439) --
- -----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- -- (498,302) --
Class B -- -- (106,987) --
Class C -- -- (52,867) --
- -----------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3,871,731) $(6,006,607) $(18,024,779) $(3,754,618)
- -----------------------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(3,636,892) $(3,878,943) $(14,978,975) $(1,765,570)
- -----------------------------------------------------------------------------------------------------------------------
Total change in net assets $(4,970,662) $(5,619,031) $(17,760,599) $(2,091,956)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
At beginning of period 92,617,544 138,334,478 397,634,888 87,464,075
At end of period $87,646,882 $132,715,447 $379,874,289 $85,372,119
- -----------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions in excess
of) net investment income included in net assets
at end of period $(158,182) $71,943 $(601,740) $(101,465)
- -----------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Changes in Net Assets - continued
GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND
For year ended 3/31/06
CHANGE IN NET ASSETS
FROM OPERATIONS
- -------------------------------------------------------------------------------------------------------
Net investment income $2,710,686 $6,200,729 $10,103,339
Net realized gain (loss) on investments 104,934 639,411 1,768,389
Net unrealized gain (loss) on investments (1,168,516) (2,628,342) (2,752,976)
- -------------------------------------------------------------------------------------------------------
Change in net assets from operations $1,647,104 $4,211,798 $9,118,752
- -------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------
From net investment income
Class A $(2,297,243) $(5,277,930) $(8,657,757)
Class B (404,404) (856,271) (1,391,165)
- -------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- (725,708) (709,997)
Class B -- (137,622) (137,074)
- -------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(2,701,647) $(6,997,531) $(10,895,993)
- -------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(3,918,543) $(10,873,307) $(15,175,916)
- -------------------------------------------------------------------------------------------------------
Total change in net assets $(4,973,086) $(13,659,040) $(16,953,157)
- -------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------
At beginning of period 66,469,499 149,976,300 250,868,786
At end of period $61,496,413 $136,317,260 $233,915,629
- -------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment
income included in net assets at end of period $(174,205) $(270,349) $(477,259)
- -------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Changes in Net Assets - continued
ALABAMA ARKANSAS CALIFORNIA FLORIDA
FUND FUND FUND FUND
For year ended 3/31/05
CHANGE IN NET ASSETS
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------
Net investment income $4,102,325 $6,200,096 $19,346,992 $4,062,571
Net realized gain (loss) on investments 319,870 (22,285) 2,695,657 541,384
Net unrealized gain (loss) on investments (2,318,426) (3,569,522) (10,450,536) (2,131,974)
- -----------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $2,103,769 $2,608,289 $11,592,113 $2,471,981
- -----------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------
From net investment income
Class A $(3,487,315) $(5,765,824) $(14,446,017) $(3,284,555)
Class B (604,659) (425,966) (3,065,257) (773,814)
Class C -- -- (1,327,738) --
- -----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (270,143) -- -- --
Class B (56,021) -- -- --
- -----------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(4,418,138) $(6,191,790) $(18,839,012) $(4,058,369)
- -----------------------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(3,110,948) $(9,969,276) $(30,697,704) $(12,416,594)
- -----------------------------------------------------------------------------------------------------------------------
Redemption fees $-- $91 $1,866 $--
- -----------------------------------------------------------------------------------------------------------------------
Total change in net assets $(5,425,317) $(13,552,686) $(37,942,737) $(14,002,982)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
At beginning of period 98,042,861 151,887,164 435,577,625 101,467,057
At end of period $92,617,544 $138,334,478 $397,634,888 $87,464,075
- -----------------------------------------------------------------------------------------------------------------------
Accumulated undistributed (distributions in excess
of) net investment income included in net assets
at end of period $(164,995) $26,928 $(715,580) $(98,019)
- -----------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Changes in Net Assets - continued
GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND
For year ended 3/31/05
CHANGE IN NET ASSETS
OPERATIONS
- -------------------------------------------------------------------------------------------------------
Net investment income $2,859,534 $6,874,073 $11,220,830
Net realized gain (loss) on investments 137,158 784,552 579,740
Net unrealized gain (loss) on investments (1,655,497) (4,370,095) (5,718,727)
- -------------------------------------------------------------------------------------------------------
Change in net assets from operations $1,341,195 $3,288,530 $6,081,843
- -------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------
From net investment income
Class A $(2,302,371) $(5,719,390) $(9,525,974)
Class B (538,120) (1,103,829) (1,614,570)
- -------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- (49,124) --
Class B -- (11,124) --
- -------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(2,840,491) $(6,883,467) $(11,140,544)
- -------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(4,449,674) $(16,326,214) $(15,249,895)
- -------------------------------------------------------------------------------------------------------
Redemption fees $61 $-- $926
- -------------------------------------------------------------------------------------------------------
Total change in net assets $(5,948,909) $(19,921,151) $(20,307,670)
- -------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------
At beginning of period 72,418,408 169,897,451 271,176,456
At end of period $66,469,499 $149,976,300 $250,868,786
- -------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment
income included in net assets at end of period $(183,007) $(331,642) $(514,536)
- -------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) ALABAMA 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. This information has been audited by the fund's
independent registered public accounting firm, whose report, together with the fund's financial statements, are
included in this report.
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS A
Net asset value, beginning of period $10.62 $10.88 $10.82 $10.31 $10.53
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.46 $0.48 $0.48 $0.48 $0.51
Net realized and unrealized gain (loss) on investments (0.15) (0.22) 0.06 0.54 (0.19)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.31 $0.26 $0.54 $1.02 $0.32
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.46) $(0.48) $(0.48) $(0.50) $(0.54)
From net realized gain on investments -- (0.04) -- (0.01) --
- ----------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.46) $(0.52) $(0.48) $(0.51) $(0.54)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.47 $10.62 $10.88 $10.82 $10.31
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 2.97 2.40 5.11 10.06 3.05
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.12 1.09 1.09 1.08 1.08
Expenses after expense reductions (f) 0.87 0.84 0.88 0.88 0.88
Net investment income 4.37 4.46 4.38 4.49 4.87
Portfolio turnover 9 17 10 21 20
Net assets at end of period (000 Omitted) $74,204 $77,499 $80,704 $84,474 $83,146
- ----------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS B
Net asset value, beginning of period $10.62 $10.88 $10.82 $10.31 $10.53
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.38 $0.40 $0.39 $0.40 $0.43
Net realized and unrealized gain (loss) on investments (0.15) (0.23) 0.07 0.54 (0.19)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.23 $0.17 $0.46 $0.94 $0.24
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.38) $(0.39) $(0.40) $(0.42) $(0.46)
From net realized gain on investments -- (0.04) -- (0.01) --
- ----------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.38) $(0.43) $(0.40) $(0.43) $(0.46)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.47 $10.62 $10.88 $10.82 $10.31
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 2.20 1.63 4.32 9.14 2.38
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.87 1.84 1.83 1.83 1.83
Expenses after expense reductions (f) 1.62 1.59 1.63 1.63 1.63
Net investment income 3.61 3.71 3.63 3.74 4.09
Portfolio turnover 9 17 10 21 20
Net assets at end of period (000 Omitted) $13,443 $15,118 $17,339 $16,163 $13,579
- ----------------------------------------------------------------------------------------------------------------------
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) ARKANSAS 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. This information has been audited by the fund's
independent registered public accounting firm, whose report, together with the fund's financial statements, are
included in this report.
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS A
Net asset value, beginning of period $10.17 $10.41 $10.40 $9.97 $10.08
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.45 $0.45 $0.45 $0.47 $0.51
Net realized and unrealized gain (loss) on investments (0.13) (0.23) 0.01 0.46 (0.11)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.32 $0.22 $0.46 $0.93 $0.40
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.45) $(0.46) $(0.45) $(0.50) $(0.51)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.04 $10.17 $10.41 $10.40 $9.97
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 3.17 2.14 4.53 9.51 4.06
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 0.92 0.90 0.92 0.93 0.92
Expenses after expense reductions (f) 0.67 0.65 0.72 0.73 0.72
Net investment income 4.45 4.47 4.31 4.59 5.05
Portfolio turnover 10 13 19 15 15
Net assets at end of period (000 Omitted) $122,067 $127,075 $139,333 $134,521 $119,328
- ----------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS B
Net asset value, beginning of period $10.18 $10.42 $10.41 $9.98 $10.09
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.38 $0.38 $0.37 $0.39 $0.43
Net realized and unrealized gain (loss) on investments (0.14) (0.24) 0.01 0.46 (0.11)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.24 $0.14 $0.38 $0.85 $0.32
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- --------------------------------------------------------------------------------
From net investment income $(0.37) $(0.38) $(0.37) $(0.42) $(0.43)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.05 $10.18 $10.42 $10.41 $9.98
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 2.39 1.37 3.68 8.62 3.24
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.69 1.66 1.73 1.74 1.70
Expenses after expense reductions (f) 1.44 1.41 1.53 1.54 1.50
Net investment income 3.68 3.71 3.50 3.77 4.26
Portfolio turnover 10 13 19 15 15
Net assets at end of period (000 Omitted) $10,648 $11,259 $12,554 $12,049 $8,700
- ----------------------------------------------------------------------------------------------------------------------
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.
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) CALIFORNIA 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. This information has been audited by the fund's
independent registered public accounting firm, whose report, together with the fund's financial statements, are
included in this report.
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS A
Net asset value, beginning of period $5.88 $5.98 $5.96 $5.70 $5.81
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.28 $0.29 $0.28 $0.28 $0.28
Net realized and unrealized gain (loss) on investments (0.03) (0.11) 0.02 0.27 (0.10)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.25 $0.18 $0.30 $0.55 $0.18
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.28) $(0.28) $(0.28) $(0.29) $(0.29)
From net realized gain on investments (0.01) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.29) $(0.28) $(0.28) $(0.29) $(0.29)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.84 $5.88 $5.98 $5.96 $5.70
- ----------------------------------------------------------------------------------------------------------------------
Total return (%)(t)(s)(r) 4.22 3.14 5.22 9.79 3.11
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 0.88 0.86 0.87 0.87 0.87
Expenses after expense reductions (f) 0.63 0.61 0.67 0.67 0.67
Net investment income 4.69 4.91 4.71 4.73 4.87
Portfolio turnover 9 12 8 22 12
Net assets at end of period (000 Omitted) $291,656 $295,332 $314,108 $333,350 $305,699
- ----------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS B
Net asset value, beginning of period $5.88 $5.98 $5.96 $5.70 $5.81
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.23 $0.25 $0.23 $0.23 $0.24
Net realized and unrealized gain (loss) on investments (0.03) (0.11) 0.03 0.27 (0.11)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.20 $0.14 $0.26 $0.50 $0.13
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.23) $(0.24) $(0.24) $(0.24) $(0.24)
From net realized gain on investments (0.01) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.24) $(0.24) $(0.24) $(0.24) $(0.24)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.84 $5.88 $5.98 $5.96 $5.70
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 3.44 2.38 4.38 8.93 2.30
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:-
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.64 1.59 1.67 1.66 1.65
Expenses after expense reductions (f) 1.39 1.34 1.47 1.46 1.45
Net investment income 3.94 4.17 3.91 3.94 4.09
Portfolio turnover 9 12 8 22 12
Net assets at end of period (000 Omitted) $58,338 $69,142 $85,106 $98,888 $84,123
- ----------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) CALIFORNIA MUNICIPAL BOND FUND - CONTINUED
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS C
Net asset value, beginning of period $5.90 $6.00 $5.98 $5.72 $5.83
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.23 $0.24 $0.23 $0.23 $0.23
Net realized and unrealized gain (loss) on investments (0.04) (0.11) 0.02 0.27 (0.10)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.19 $0.13 $0.25 $0.50 $0.13
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.22) $(0.23) $(0.23) $(0.24) $(0.24)
From net realized gain on investments (0.01) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.23) $(0.23) $(0.23) $(0.24) $(0.24)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.86 $5.90 $6.00 $5.98 $5.72
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 3.29 2.22 4.27 8.78 2.17
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.78 1.76 1.77 1.77 1.77
Expenses after expense reductions (f) 1.53 1.51 1.56 1.57 1.57
Net investment income 3.79 4.01 3.81 3.83 3.97
Portfolio turnover 9 12 8 22 12
Net assets at end of period (000 Omitted) $29,880 $33,162 $36,363 $40,804 $35,022
- ----------------------------------------------------------------------------------------------------------------------
Any redemption fees charged by the fund during the 2004 and 2005 fiscal years 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.
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) FLORIDA 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. This information has been audited by the fund's
independent registered public accounting firm, whose report, together with the fund's financial statements, are
included in this report.
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS A
Net asset value, beginning of period $10.09 $10.24 $10.19 $9.78 $9.95
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.45 $0.47 $0.47 $0.48 $0.50
Net realized and unrealized gain (loss) on investments (0.04) (0.15) 0.05 0.44 (0.16)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.41 $0.32 $0.52 $0.92 $0.34
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.45) $(0.47) $(0.47) $(0.51) $(0.51)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.05 $10.09 $10.24 $10.19 $9.78
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 4.14 3.25 5.20 9.40 3.52
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 0.89 0.82 0.85 0.82 0.83
Expenses after expense reductions (f) 0.64 0.57 0.64 0.62 0.63
Net investment income 4.46 4.68 4.58 4.78 5.09
Portfolio turnover 17 18 31 27 16
Net assets at end of period (000 Omitted) $70,402 $69,082 $79,155 $86,045 $69,959
- ----------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS B
Net asset value, beginning of period $10.09 $10.24 $10.19 $9.78 $9.95
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.38 $0.40 $0.39 $0.40 $0.43
Net realized and unrealized gain (loss) on investments (0.04) (0.16) 0.05 0.43 (0.17)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.34 $0.24 $0.44 $0.83 $0.26
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.38) $(0.39) $(0.39) $(0.42) $(0.43)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.05 $10.09 $10.24 $10.19 $9.78
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 3.35 2.45 4.36 8.64 2.58
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.65 1.59 1.64 1.62 1.63
Expenses after expense reductions (f) 1.40 1.34 1.44 1.42 1.43
Net investment income 3.70 3.92 3.78 3.97 4.29
Portfolio turnover 17 18 31 27 16
Net assets at end of period (000 Omitted) $14,970 $18,382 $22,312 $25,175 $22,151
- ----------------------------------------------------------------------------------------------------------------------
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) GEORGIA 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. This information has been audited by the fund's
independent registered public accounting firm, whose report, together with the fund's financial statements, are
included in this report.
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS A
Net asset value, beginning of period $10.99 $11.22 $11.17 $10.63 $10.82
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.46 $0.48 $0.49 $0.49 $0.50
Net realized and unrealized gain (loss) on investments (0.18) (0.23) 0.05 0.55 (0.17)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.28 $0.25 $0.54 $1.04 $0.33
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.47) $(0.48) $(0.49) $(0.50) $(0.52)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.80 $10.99 $11.22 $11.17 $10.63
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 2.53 2.27 4.93 9.97 3.03
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.18 1.13 1.12 1.12 1.13
Expenses after expense reductions (f) 0.93 0.88 0.91 0.92 0.93
Net investment income 4.22 4.35 4.35 4.43 4.67
Portfolio turnover 5 18 12 25 19
Net assets at end of period (000 Omitted) $51,681 $53,190 $55,659 $57,636 $54,179
- ----------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS B
Net asset value, beginning of period $11.00 $11.23 $11.18 $10.64 $10.83
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.41 $0.40 $0.40 $0.40 $0.42
Net realized and unrealized gain (loss) on investments (0.18) (0.24) 0.06 0.56 (0.18)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.23 $0.16 $0.46 $0.96 $0.24
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.39) $(0.39) $(0.41) $(0.42) $(0.43)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.84 $11.00 $11.23 $11.18 $10.64
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 2.05 1.51 4.15 9.15 2.26
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.93 1.88 1.86 1.87 1.88
Expenses after expense reductions (f) 1.68 1.63 1.66 1.67 1.68
Net investment income 3.72 3.60 3.60 3.68 3.91
Portfolio turnover 5 18 12 25 19
Net assets at end of period (000 Omitted) $9,816 $13,280 $16,759 $18,077 $16,031
- ----------------------------------------------------------------------------------------------------------------------
Any redemption fees charged by the fund during the 2004 and 2005 fiscal years 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.
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) 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. This information has been audited by the fund's
independent registered public accounting firm, whose report, together with the fund's financial statements, are
included in this report.
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS A
Net asset value, beginning of period $11.49 $11.74 $11.69 $11.21 $11.35
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.50 $0.52 $0.51 $0.52 $0.54
Net realized and unrealized gain (loss) on investments (0.15) (0.25) 0.06 0.50 (0.14)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.35 $0.27 $0.57 $1.02 $0.40
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.50) $(0.51) $(0.52) $(0.54) $(0.54)
From net realized gain on investments (0.07) (0.01) -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.57) $(0.52) $(0.52) $(0.54) $(0.54)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.27 $11.49 $11.74 $11.69 $11.21
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 3.06 2.36 4.96 9.21 3.59
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.19 1.14 1.17 1.15 1.15
Expenses after expense reductions (f) 0.94 0.89 0.96 0.95 0.95
Net investment income 4.38 4.48 4.35 4.51 4.73
Portfolio turnover 9 12 21 12 8
Net assets at end of period (000 Omitted) $115,307 $124,261 $138,201 $138,666 $128,750
- ----------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS B
Net asset value, beginning of period $11.49 $11.74 $11.68 $11.20 $11.34
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.43 $0.44 $0.43 $0.45 $0.46
Net realized and unrealized gain (loss) on investments (0.17) (0.25) 0.07 0.49 (0.13)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.26 $0.19 $0.50 $0.94 $0.33
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.42) $(0.44) $(0.44) $(0.46) $(0.47)
From net realized gain on investments (0.07) (0.00)(w) -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.49) $(0.44) $(0.44) $(0.46) $(0.47)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.26 $11.49 $11.74 $11.68 $11.20
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 2.30 1.69 4.37 8.52 2.92
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.84 1.79 1.81 1.80 1.80
Expenses after expense reductions (f) 1.59 1.54 1.61 1.60 1.60
Net investment income 3.72 3.83 3.70 3.86 4.08
Portfolio turnover 9 12 21 12 8
Net assets at end of period (000 Omitted) $21,011 $25,716 $31,697 $34,033 $31,542
- ----------------------------------------------------------------------------------------------------------------------
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MASSACHUSETTS 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. This information has been audited by the fund's
independent registered public accounting firm, whose report, together with the fund's financial statements, are
included in this report.
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS A
Net asset value, beginning of period $11.31 $11.52 $11.49 $10.90 $11.11
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.48 $0.51 $0.51 $0.52 $0.53
Net realized and unrealized gain (loss) on investments (0.05) (0.22) 0.03 0.60 (0.21)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.43 $0.29 $0.54 $1.12 $0.32
- ----------------------------------------------------------------------------------------------------------------------
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) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.52) $(0.50) $(0.51) $(0.53) $(0.53)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.22 $11.31 $11.52 $11.49 $10.90
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 3.83 2.63 4.82 10.42 2.93
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.15 1.09 1.16 1.12 1.12
Expenses after expense reductions (f) 0.90 0.84 0.95 0.92 0.92
Net investment income 4.23 4.48 4.39 4.56 4.73
Portfolio turnover 10 11 14 15 13
Net assets at end of period (000 Omitted) $196,992 $210,103 $224,923 $233,500 $210,269
- ----------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
------------------------------------------------------------
2006 2005 2004 2003 2002
CLASS B
Net asset value, beginning of period $11.33 $11.54 $11.51 $10.92 $11.12
- ----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.41 $0.43 $0.43 $0.44 $0.46
Net realized and unrealized gain (loss) on investments (0.05) (0.21) 0.04 0.60 (0.20)
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.36 $0.22 $0.47 $1.04 $0.26
- ----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ----------------------------------------------------------------------------------------------------------------------
From net investment income $(0.41) $(0.43) $(0.44) $(0.45) $(0.46)
From net realized gain on investments (0.04) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.45) $(0.43) $(0.44) $(0.45) $(0.46)
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.24 $11.33 $11.54 $11.51 $10.92
- ----------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 3.16 1.97 4.14 9.69 2.35
- ----------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.80 1.74 1.80 1.77 1.77
Expenses after expense reductions (f) 1.55 1.49 1.60 1.57 1.57
Net investment income 3.58 3.83 3.74 3.91 4.13
Portfolio turnover 10 11 14 15 13
Net assets at end of period (000 Omitted) $36,924 $40,766 $46,253 $47,612 $37,487
- ----------------------------------------------------------------------------------------------------------------------
Any redemption fees charged by the fund during the 2004 and 2005 fiscal years 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.
(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.
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
(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 (the trust). The trust 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 (other than short-term instruments),
including restricted debt instruments, are generally valued at an evaluated
bid price as reported by an independent pricing service. Values of debt
instruments 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. Short-term instruments with a maturity at issuance of
365 days or less are generally valued at amortized cost, which approximates
market value. Swaps are generally valued on the basis of quotations from
brokers and dealers. Securities and other assets generally valued on the basis
of information from an independent pricing service may also be valued on the
basis of information from brokers and dealers. When pricing-service
information or market quotations are not readily available, securities are
priced at fair value as determined under the direction of the Board of
Trustees.
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. Derivative instruments include swap agreements.
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 Statement of Operations. The value of the swap is adjusted
daily and the change in value is recorded as unrealized appreciation or
depreciation in the Statement of Operations. Risks may arise upon entering
into these agreements from the potential inability of counterparties to meet
the terms of their contract and from unanticipated changes in the value of the
financial index on which the swap agreement is based.
Interest Rate Swap Agreements - Interest rate swap agreements are agreements
to exchange cash flows periodically based on a notional principal amount, such
as the exchange of fixed rate interest payments for floating rate interest
payments, which are based on a specific financial index, or the exchange of
two distinct floating rate payments. The net receivable or payable associated
with these payments is accrued daily and recorded as an unrealized gain or
loss, and any payments received or made are recorded as realized gains or
losses, in the Statement of Operations. The primary risk associated with
interest rate swap agreements is that unfavorable changes in the fluctuation
of interest rates could adversely impact the funds.
Short Term Fees - For purchases made on or after July 1, 2004 and before April
1, 2005, each fund charged a 2% redemption fee (which was retained by each
fund) on proceeds from Class A, Class B, and Class C shares redeemed or
exchanged within 5 business days following their acquisition (either by
purchase or exchange). Effective April 1, 2005, each fund will no longer
charge a redemption fee. See each fund's prospectus for details. Any
redemption fees charged are accounted for as an addition to paid-in capital.
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. All premium and
original issue discount is amortized or accreted for tax reporting purposes as
required by federal income tax regulations.
Each fund may receive proceeds from litigation settlements involving its
portfolio holdings. Any proceeds received are reflected in realized gain/loss
in the Statement of Operations, or in unrealized gain/loss if the security is
still held by the fund.
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 is 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, 2006, is shown as a
reduction of total expenses on the Statement of Operations.
Tax Matters and Distributions - Each fund intends to continue 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. Accordingly, no provision for federal income
tax is required in the 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 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 expiration of capital loss
carryforwards, amortization and accretion of debt securities, defaulted bonds,
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:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
YEAR ENDED MARCH 31, 2006 FUND FUND FUND FUND FUND FUND FUND
Ordinary income (including
any short-term capital gains) $-- $-- $-- $49,709 $-- $-- $--
Tax-exempt income 3,871,731 6,006,607 17,366,623 3,704,909 2,701,647 6,134,201 10,048,922
Long-term capital gain -- -- 658,156 -- -- 863,330 847,071
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions $3,871,731 $6,006,607 $18,024,779 $3,754,618 $2,701,647 $6,997,531 $10,895,993
YEAR ENDED MARCH 31, 2005
Ordinary income (including
any short-term capital gains) $63,872 $214,789 $55,853 $-- $-- $70,072 $252,507
Tax-exempt income 4,028,102 5,977,001 18,783,159 4,058,369 2,840,491 6,753,147 10,888,037
Long-term capital gain 326,164 -- -- -- -- 60,248 --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions $4,418,138 $6,191,790 $18,839,012 $4,058,369 $2,840,491 $6,883,467 $11,140,544
The federal tax cost and the tax basis components of distributable earnings were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
AS OF MARCH 31, 2006 FUND FUND FUND FUND FUND FUND FUND
Cost of investments $81,630,945 $124,419,290 $356,158,426 $81,513,307 $57,318,687 $125,156,444 $216,977,632
- ----------------------------------------------------------------------------------------------------------------------------------
Gross appreciation $4,697,020 $7,185,673 $20,031,371 $3,634,491 $3,381,056 $7,506,728 $13,897,006
Gross depreciation (436,869) (92,344) (288,041) (140,073) (35,698) (143,991) (149,267)
- ----------------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) $4,260,151 $7,093,329 $19,743,330 $3,494,418 $3,345,358 $7,362,737 $13,747,739
Undistributed ordinary income $-- $-- $-- $-- $-- $-- $372,024
Undistributed tax-exempt income 282,450 570,738 818,897 214,900 53,805 227,456 339,371
Undistributed long-term
capital gain 140,902 -- -- -- -- -- --
Capital loss carryforwards -- (501,285) (1,402,103) (264,149) (66,666) -- --
Post-October capital loss
deferral -- -- -- -- -- -- (18,421)
Other temporary differences (396,268) (407,289) (1,424,420) (237,092) (161,833) (386,437) (686,714)
As of March 31, 2006, certain funds had available capital loss carryforwards to offset future realized gains. Such losses expire as
follows:
ARKANSAS CALIFORNIA FLORIDA GEORGIA
EXPIRATION DATE FUND FUND FUND FUND
March 31, 2008 $-- $(229,685) $-- $--
March 31, 2009 -- -- -- (66,666)
March 31, 2010 -- -- (142,514) --
March 31, 2011 -- -- (121,635) --
March 31, 2012 (501,285) -- -- --
March 31, 2014 -- (1,172,418) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total $(501,285) $(1,402,103) $(264,149) $(66,666)
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 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 shares will convert
to Class A shares approximately eight years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
Investment Adviser - The trust has an investment advisory agreement with MFS to provide overall investment advisory and
administrative services, and general office facilities. 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, 2006, this waiver amounted to the following for each fund and is reflected as a reduction of
total expenses in the Statement of Operations.
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
$229,879 $345,100 $973,826 $217,935 $166,435 $363,030 $612,409
The management fee incurred for the year ended March 31, 2006 was equivalent to an annual effective rate of 0.30% of the 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, 2006, as its portion of the initial sales charge on sales of Class A shares of the funds.
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
$21,270 $53,465 $87,854 $34,849 $19,343 $27,698 $46,201
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 FEE PLAN TABLE:
CLASS A
-----------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
Alabama Fund 0.10% 0.25% 0.35% 0.25% $192,363
Arkansas Fund 0.10% 0.25% 0.35% 0.10% 127,022
California Fund 0.10% 0.25% 0.35% 0.10% 292,962
Florida Fund 0.10% 0.25% 0.35% 0.00% --
Georgia Fund 0.10% 0.25% 0.35% 0.25% 135,068
Maryland Fund 0.10% 0.25% 0.35% 0.35% 426,576
Massachusetts Fund 0.10% 0.25% 0.35% 0.35% 720,392
CLASS B
-----------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
Alabama Fund 0.75% 0.25% 1.00% 1.00% $143,533
Arkansas Fund 0.75% 0.25% 1.00% 0.87% 95,664
California Fund 0.75% 0.25% 1.00% 0.86% 550,533
Florida Fund 0.75% 0.25% 1.00% 0.76% 132,855
Georgia Fund 0.75% 0.25% 1.00% 1.00% 115,469
Maryland Fund 0.75% 0.25% 1.00% 1.00% 232,954
Massachusetts Fund 0.75% 0.25% 1.00% 1.00% 390,921
CLASS C
-----------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
California Fund 0.75% 0.25% 1.00% 1.00% $322,164
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
Total Distribution and Service Fees $335,896 $222,686 $1,165,659 $132,855 $250,537 $659,530 $1,111,313
(1) 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.
(2) The annual effective rates represent actual fees incurred under the distribution plan for the year ended March 31, 2006 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 implemented and will commence on such date as the Trustees
of the Trust may determine. Payment of Florida Fund's 0.25% annual Class A service fee is not yet implemented and will
commence on such date as the Trustees of the Trust may determine. Payment of Arkansas Fund's and California Fund's 0.10% of
the Class A service fee is currently being paid by each fund, payment of the remaining 0.15% of the Class A service fee is not
yet implemented and will commence on such date as the Trustees of the Trust may determine. Except in the case of the 0.25%
annual Class B service fee paid by the Florida Fund upon the sale of Class B shares in the first year, payment of the Class B
service fee will not be implemented until such date as the Trustees of the Trust may determine. Except in the case of the
0.25% annual Class B service fee paid by Arkansas Fund and California Fund upon the sale of Class B shares in the first year,
the Class B service fee has been set at 0.10% annually and may be increased to a maximum of 0.25% annually on such date as the
Trustees of the Trust 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,
2006, were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
CDSC IMPOSED FUND FUND FUND FUND FUND FUND FUND
Class A $-- $-- $6,153 $4,160 $-- $-- $--
Class B 18,376 25,043 105,552 38,519 28,884 41,816 70,385
Class C N/A N/A 2,560 N/A N/A N/A N/A
Shareholder Servicing Agent - Each fund pays a portion of shareholder servicing costs to MFS Service Center, Inc. (MFSC), a
wholly-owned subsidiary of MFS. MFSC receives a fee from the funds, for its services as shareholder servicing agent, set
periodically under the supervision of the funds' Board of Trustees. For the year ended March 31, 2006, each fund paid MFSC the
following fee, which equated to the following annual percentage of each fund's average daily net assets for shareholder services.
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
Expenses Paid $96,310 $145,503 $410,922 $91,868 $69,126 $153,392 $258,652
Percentage of average daily net assets 0.1055% 0.1054% 0.1055% 0.1054% 0.1054% 0.1057% 0.1056%
MFSC also receives payment from the funds for out-of-pocket and sub-accounting expenses paid by MFSC on behalf of the funds. For
the year ended March 31, 2006, these costs amounted to the following:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
$36,425 $33,428 $95,308 $25,167 $20,942 $51,227 $74,238
Administrator - MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services
to certain funds for which MFS acts as investment adviser. Under an administrative services agreement, the funds may partially
reimburse MFS the costs incurred to provide these services, subject to review and approval by the Board of Trustees. Each fund is
charged a fixed amount plus a fee based on calendar year average net assets. Effective July 1, 2005, each fund's annual fixed
amount is $10,000. The administrative services fee incurred for the year ended March 31, 2006 was equivalent to the following
annual effective rates of each fund's average daily net assets:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
Percentage of average daily net assets 0.0195% 0.0167% 0.0133% 0.0199% 0.0227% 0.0165% 0.0144%
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 who
are officers of the investment adviser, or to officers of each fund, 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 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, 2006.
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
$1,590 $1,388 $3,363 $1,384 $1,597 $3,093 $3,135
The deferred liability for retirement benefits payable to retired Trustees amounted to the following for each fund at March 31,
2006, and is included in payable for independent trustees' compensation.
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
$11,185 $10,659 $21,323 $10,645 $12,819 $15,431 $15,354
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, 2006, the fees paid to
Tarantino LLC amounted to the following:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
$699 $926 $2,627 $582 $439 $975 $1,655
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 ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
$658 $813 $2,297 $512 $387 $920 $1,472
(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 ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
Purchases $8,044,469 $12,862,683 $35,732,650 $14,429,891 $3,481,046 $12,856,377 $24,674,924
- ---------------------------------------------------------------------------------------------------------------------------------
Sales $10,510,710 $15,604,340 $52,726,768 $15,254,182 $6,137,950 $25,647,080 $35,741,140
- ---------------------------------------------------------------------------------------------------------------------------------
(5) SHARES OF BENEFICIAL INTEREST
The Trust's Declaration permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest.
Transactions in each funds' shares were as follows:
ALABAMA FUND ARKANSAS FUND
------------------------------------------------------ ---------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2006 MARCH 31, 2005 MARCH 31, 2006 MARCH 31, 2005
-------------------------- -------------------------- ------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 453,164 $4,807,670 633,888 $6,775,648 1,098,066 $11,184,396 995,533 $10,203,706
Class B 47,894 508,335 139,584 1,483,702 127,141 1,292,625 131,045 1,342,758
- -----------------------------------------------------------------------------------------------------------------------------------
501,058 $5,316,005 773,472 $8,259,350 1,225,207 $12,477,021 1,126,578 $11,546,464
Shares issued to shareholders in reinvestment of distributions
Class A 183,725 $1,948,887 228,052 $2,438,067 306,870 $3,122,224 373,158 $3,817,869
Class B 27,249 289,073 37,666 402,644 24,788 252,510 27,514 281,798
- -----------------------------------------------------------------------------------------------------------------------------------
210,974 $2,237,960 265,718 $2,840,711 331,658 $3,374,734 400,672 $4,099,667
Shares reacquired
Class A (842,942) $(8,923,169) (983,413) $(10,502,049) (1,743,455) $(17,710,230) (2,249,074) $(22,990,694)
Class B (213,823) (2,267,688) (347,499) (3,708,960) (198,441) (2,020,468) (256,542) (2,624,713)
- -----------------------------------------------------------------------------------------------------------------------------------
(1,056,765) $(11,190,857) (1,330,912) $(14,211,009) (1,941,896) $(19,730,698) (2,505,616) $(25,615,407)
Net change
Class A (206,053) $(2,166,612) (121,473) $(1,288,334) (338,519) $(3,403,610) (880,383) $(8,969,119)
Class B (138,680) (1,470,280) (170,249) (1,822,614) (46,512) (475,333) (97,983) (1,000,157)
- -----------------------------------------------------------------------------------------------------------------------------------
(344,733) $(3,636,892) (291,722) $(3,110,948) (385,031) $(3,878,943) (978,366) $(9,969,276)
CALIFORNIA FUND FLORIDA FUND
------------------------------------------------------ ---------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2006 MARCH 31, 2005 MARCH 31, 2006 MARCH 31, 2005
-------------------------- -------------------------- ------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 5,540,422 $32,768,817 3,679,642 $21,728,685 1,343,743 $13,639,634 971,884 $9,841,457
Class B 341,572 2,022,416 386,452 2,273,545 116,876 1,188,551 190,084 1,920,916
Class C 501,717 2,981,705 642,391 3,786,792 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
6,383,711 $37,772,938 4,708,485 $27,789,022 1,460,619 $14,828,185 1,161,968 $11,762,373
Shares issued to shareholders in reinvestment of distributions
Class A 1,269,372 $7,511,470 1,398,671 $8,246,933 142,752 $1,450,063 164,846 $1,665,046
Class B 262,673 1,555,229 330,068 1,945,699 27,817 282,641 36,036 363,956
Class C 129,873 771,330 147,165 870,734 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
1,661,918 $9,838,029 1,875,904 $11,063,366 170,569 $1,732,704 200,882 $2,029,002
Shares reacquired
Class A (7,053,114) $(41,766,637) (7,403,226) $(43,515,183) (1,327,818) $(13,490,043) (2,025,356) $ (20,328,622)
Class B (2,363,896) (14,014,351) (3,197,035) (18,786,884) (476,733) (4,836,416) (584,841) (5,879,347)
Class C (1,149,084) (6,808,954) (1,232,114) (7,248,025) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
(10,566,094) $(62,589,942) (11,832,375) $(69,550,092) (1,804,551) $(18,326,459) (2,610,197) $ (26,207,969)
Net change
Class A (243,320) $(1,486,350) (2,324,913) $(13,539,565) 158,677 $1,599,654 (888,626) $(8,822,119)
Class B (1,759,651) (10,436,706) (2,480,515) (14,567,640) (332,040) (3,365,224) (358,721) (3,594,475)
Class C (517,494) (3,055,919) (442,558) (2,590,499) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
(2,520,465) $(14,978,975) (5,247,986) $(30,697,704) (173,363) $(1,765,570) (1,247,347) $(12,416,594)
GEORGIA FUND MARYLAND FUND
------------------------------------------------------ ---------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2006 MARCH 31, 2005 MARCH 31, 2006 MARCH 31, 2005
-------------------------- -------------------------- ------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 460,892 $5,066,357 329,030 $3,641,888 730,679 $8,394,007 580,758 $6,707,670
Class B 28,232 312,944 33,020 365,147 83,527 958,062 101,049 1,161,791
- -----------------------------------------------------------------------------------------------------------------------------------
489,124 $5,379,301 362,050 $4,007,035 814,206 $9,352,069 681,807 $7,869,461
Shares issued to shareholders in reinvestment of distributions
Class A 137,577 $1,511,329 148,053 $1,634,914 299,543 $3,427,995 317,868 $3,668,412
Class B 20,316 223,644 29,129 321,863 48,765 557,986 58,752 677,734
- -----------------------------------------------------------------------------------------------------------------------------------
157,893 $1,734,973 177,182 $1,956,777 348,308 $3,985,981 376,620 $4,346,146
Shares reacquired
Class A (655,008) $(7,177,983) (597,886) $(6,573,646) (1,610,274)$(18,401,179) (1,856,776) $(21,368,626)
Class B (350,537) (3,854,834) (347,203) (3,839,840) (505,608) (5,810,178) (622,058) (7,173,195)
- -----------------------------------------------------------------------------------------------------------------------------------
(1,005,545) $(11,032,817) (945,089) $(10,413,486) (2,115,882) $(24,211,357) (2,478,834) $(28,541,821)
Net change
Class A (56,539) $(600,297) (120,803) $(1,296,844) (580,052) $(6,579,177) (958,150) $(10,992,544)
Class B (301,989) (3,318,246) (285,054) (3,152,830) (373,316) (4,294,130) (462,257) (5,333,670)
- -----------------------------------------------------------------------------------------------------------------------------------
(358,528) $(3,918,543) (405,857) $(4,449,674) (953,368) $(10,873,307) (1,420,407) $(16,326,214)
MASSACHUSETTS FUND
------------------------------------------------------
YEAR ENDED YEAR ENDED
MARCH 31, 2006 MARCH 31, 2005
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 1,762,892 $20,057,220 1,137,090 $12,908,079
Class B 181,196 2,072,498 196,932 2,239,325
- --------------------------------------------------------------------------------
1,944,088 $22,129,718 1,334,022 $15,147,404
Shares issued to shareholders in reinvestment of distributions
Class A 405,376 $4,607,951 426,503 $4,841,396
Class B 81,697 930,076 95,377 1,084,111
- --------------------------------------------------------------------------------
487,073 $5,538,027 521,880 $5,925,507
Shares reacquired
Class A (3,187,918) $(36,274,707) (2,509,529) $(28,364,705)
Class B (575,954) (6,568,954) (701,985) (7,958,101)
- --------------------------------------------------------------------------------
(3,763,872) $(42,843,661) (3,211,514) $(36,322,806)
Net change
Class A (1,019,650) $(11,609,536) (945,936) $(10,615,230)
Class B (313,061) (3,566,380) (409,676) (4,634,665)
- --------------------------------------------------------------------------------
(1,332,711) $(15,175,916) (1,355,612) $(15,249,895)
(6) LINE OF CREDIT
Each fund and other affiliated funds participate in a $1 billion unsecured line of credit provided by a syndication of banks
under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its
borrowings, at a rate equal to the Federal Reserve funds rate plus 0.35%. In addition, a commitment fee, based on the average
daily, unused portion of the line of credit, is allocated among the participating funds at the end of each calendar quarter. The
commitment fee allocated to each fund for the year ended March 31, 2006 ranged from $461 to $2,521, and is included in
miscellaneous expense on the Statement of Operations. None of the funds had significant borrowings during the year ended March
31, 2006.
(7) CONCENTRATION OF CREDIT RISK
Since each fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to
factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. The
risk associated with such factors is mitigated by the fact that a percentage of securities in a portfolio of investments are
backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. At
March 31, 2006, the percentage of holdings that carried such enhancements were as follows:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
Total: 70.25% 70.91% 49.29% 61.49% 49.06% 43.76% 43.27%
For each fund, the greatest exposure to any one institution or agency did not exceed the following percentages of total
investments as of March 31, 2006:
ALABAMA ARKANSAS CALIFORNIA FLORIDA GEORGIA MARYLAND MASSACHUSETTS
FUND FUND FUND FUND FUND FUND FUND
Single Insurer: 38.78% 20.76% 12.40% 24.46% 14.40% 10.49% 13.98%
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Trustees and 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 of MFS Municipal Series Trust (the "Trust"), as of March 31, 2006,
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, 2006, 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, such financial statements and financial highlights present
fairly, in all material respects, the financial positions 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 as of March 31, 2006, 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 23, 2006
TRUSTEES AND OFFICERS -- IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust, as of May 1, 2006, 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.
TRUSTEE/
POSITION(s) HELD OFFICER PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS &
NAME, DATE OF BIRTH WITH FUND SINCE(H) OTHER DIRECTORSHIPS(J)
- ------------------- --------- -------- ----------------------------------------------------
INTERESTED TRUSTEES
Robert J. Manning(k) Trustee February 2004 Massachusetts Financial Services Company,
(born 10/20/63) Chief Executive Officer, President, Chief
Investment Officer and Director
Robert C. Pozen(k) Trustee February 2004 Massachusetts Financial Services Company,
(born 08/08/46) Chairman (since February 2004); 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
INDEPENDENT TRUSTEES
J. Atwood Ives Trustee and Chair of February 1992 Private investor; Eastern Enterprises
(born 05/01/36) Trustees (diversified services company), Chairman,
Trustee and Chief Executive Officer (until
November 2000)
Robert E. Butler(n) Trustee January 2006 Consultant - regulatory and
(born 11/29/41) compliance matters (since July 2002);
PricewaterhouseCoopers LLP (professional
services firm), Partner (November 2000 until
June 2002)
Lawrence H. Cohn, M.D. Trustee August 1993 Brigham and Women's Hospital, Senior Cardiac
(born 03/11/37) Surgeon, Chief of Cardiac Surgery (until
2005); Harvard Medical School, Professor of
Surgery;Brigham and Women's Hospital
Physicians' Organization, Chair (2000 to
2004)
David H. Gunning Trustee January 2004 Cleveland-Cliffs Inc. (mining products
(born 05/30/42) and service provider), Vice Chairman/
Director (since April 2001); Encinitos
Ventures (private investment company),
Principal (1997 to April 2001); Lincoln
Electric Holdings, Inc. (welding equipment
manufacturer), Director
William R. Gutow Trustee December 1993 Private investor and real estate consultant;
(born 09/27/41) Capitol Entertainment Management Company
(video franchise), Vice Chairman
Michael Hegarty Trustee December 2004 Retired; AXA Financial (financial services
(born 12/21/44) 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 Trustee July 1981 Hemenway & Barnes (attorneys), Partner
(born 06/23/35)
J. Dale Sherratt Trustee August 1993 Insight Resources, Inc. (acquisition planning
(born 09/23/38) specialists), President; Wellfleet
Investments (investor in health care
companies), ManagingGeneral Partner (since
1993); Cambridge Nutraceuticals (professional
nutritional products), Chief Executive
Officer (until May 2001)
Laurie J. Thomsen Trustee March 2005 Private investor; Prism Venture Partners
(born 08/05/57) (venture capital), Co-founder and General
Partner (until June 2004); St. Paul Travelers
Companies (commercial property liability
insurance), Director
Robert W. Uek Trustee January 2006 Retired (since 1999); PricewaterhouseCoopers
(born 05/18/41) 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
Maria F. Dwyer(k) President November 2005 Massachusetts Financial Services Company,
(born 12/01/58) Executive Vice President and Chief Regulatory
Officer (since March 2004); Fidelity
Management & Research Company, Vice President
(prior to March 2004); Fidelity Group of
Funds, President and Treasurer (prior to
March 2004)
Tracy Atkinson(k) Treasurer September 2005 Massachusetts Financial Services Company,
(born 12/30/64) Senior Vice President (since September 2004);
PricewaterhouseCoopers LLP, Partner (prior to
September 2004)
Christopher R. Bohane Assistant Secretary July 2005 Massachusetts Financial Services Company,
(k) and Assistant Clerk Vice President and Senior Counsel (since April
(born 1/18/74) 2003); Kirkpatrick & Lockhart LLP (law firm),
Associate (prior to April 2003); Nvest
Services Company, Assistant Vice President
and Associate Counsel (prior to January 2001)
Ethan D. Corey(k) Assistant Secretary July 2005 Massachusetts Financial Services Company,
(born 11/21/63) and Assistant Clerk Special Counsel (since December 2004);
Dechert LLP (law firm), Counsel (prior to
December 2004)
David L. DiLorenzo(k) Assistant Treasurer July 2005 Massachusetts Financial Services Company,
(born 8/10/68) Vice President (since June 2005); JP Morgan
Investor Services, Vice President (January
2001 to June 2005); State Street Bank, Vice
President and Corporate Audit Manager (prior
to January 2001)
Timothy M. Fagan(k) Assistant Secretary September 2005 Massachusetts Financial Services Company,
(born 7/10/68) and Assistant Clerk 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) Assistant Treasurer July 2005 Massachusetts Financial Services Company,
(born 10/27/70) Vice President (since May 2005); JP Morgan
Investment Management Company, Vice President
(prior to May 2005)
Ellen Moynihan(k) Assistant Treasurer April 1997 Massachusetts Financial Services Company,
(born 11/13/57) Senior Vice President
Susan S. Newton(k) Assistant Secretary May 2005 Massachusetts Financial Services Company,
(born 03/07/50) and Assistant Clerk 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) Assistant Secretary July 2005 Massachusetts Financial Services Company,
(born 11/05/70) and Assistant Clerk Vice President and Senior Counsel (since June
2004); Bingham McCutchen LLP (law firm),
Associate (January 2001 to June 2004); Preti,
Flaherty, Beliveau, Pachios & Haley, LLC,
Associate (prior to January 2001)
Mark N. Polebaum(k) Secretary and Clerk January 2006 Massachusetts Financial Services Company,
(born 05/01/52) 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 Independent Chief June 2004 Tarantino LLC (provider of compliance
(born 03/07/44) Compliance Officer 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
(February 1997 to March 2003)
James O. Yost(k) Assistant Treasurer September 1990 Massachusetts Financial Services Company,
(born 06/12/60) 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.
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, 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 December 31, 2005, each
Trustee served as a board member of 98 funds within the MFS Family of Funds.
The Trust held a shareholders' meeting in 2005, and will hold a shareholders' meeting at least once every five years thereafter,
to elect Trustees.
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 State Street Bank and Trust Company
500 Boylston Street, Boston, MA 02116-3741 225 Franklin Street, Boston, MA 02110
INDEPENDENT REGISTERED PUBLIC
DISTRIBUTOR ACCOUNTING FIRM
MFS Fund Distributors, Inc. Deloitte & Touche LLP
500 Boylston Street, Boston, MA 02116-3741 200 Berkeley Street, Boston, MA 02116
PORTFOLIO MANAGER
Michael L. Dawson
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 1-202-551-5850. 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
The funds will notify shareholders of amounts for use in preparing 2006 income
tax forms in January 2007. The following information is provided pursuant to
provisions of the Internal Revenue Code.
The funds below designated the following amounts as capital gain dividends
paid during the fiscal year.
CAPITAL GAINS
------------------------------------------
Alabama Fund 33,574
California Fund 658,156
Maryland Fund 863,330
Massachusetts Fund 1,019,498
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 100.00%
California Fund 100.00%
Florida Fund 98.68%
Georgia Fund 100.00%
Maryland Fund 100.00%
Massachusetts Fund 100.00%
CONTACT INFORMATION
INVESTOR SERVICE
Write to us at: MFS Service Center, Inc.
P.O. Box 55824
Boston, MA 02205-5824
Type of Information Phone number Hours, Eastern Time
- -------------------------------------------------------------------------------------------------------------------
General information 1-800-225-2606 8 a.m. to 8 p.m., any business day
- -------------------------------------------------------------------------------------------------------------------
Speech- or hearing-impaired 1-800-637-6576 9 a.m. to 5 p.m., any business day
- -------------------------------------------------------------------------------------------------------------------
Share prices, account balances, exchanges 1-800-MFS-TALK (1-800-637-8255)
or stock and bond outlooks touch-tone required 24 hours a day, 365 days a year
- -------------------------------------------------------------------------------------------------------------------
M F S(M)
INVESTMENT MANAGEMENT(R)
MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
MST-A-ANN-5/06 22M
MFS(R) MUNICIPAL SERIES TRUST 3/31/06
FOR THE STATES OF: MISSISSIPPI,
NEW YORK, NORTH CAROLINA,
PENNSYLVANIA, SOUTH CAROLINA,
TENNESSEE, VIRGINIA, AND WEST VIRGINIA
ANNUAL REPORT
- ----------------------------------------------------
LETTER FROM THE CEO 1
- ----------------------------------------------------
PORTFOLIO COMPOSITION 2
- ----------------------------------------------------
MANAGEMENT REVIEW 5
- ----------------------------------------------------
PERFORMANCE SUMMARY 6
- ----------------------------------------------------
FUND EXPENSE TABLES 14
- ----------------------------------------------------
PORTFOLIO OF INVESTMENTS 17
- ----------------------------------------------------
FINANCIAL STATEMENTS 57
- ----------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 76
- ----------------------------------------------------
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 84
- ----------------------------------------------------
TRUSTEES AND OFFICERS 85
- ----------------------------------------------------
BOARD REVIEW OF INVESTMENT
ADVISORY AGREEMENT 87
- ----------------------------------------------------
PROXY VOTING POLICIES AND
INFORMATION 87
- ----------------------------------------------------
QUARTERLY PORTFOLIO DISCLOSURE 87
- ----------------------------------------------------
FEDERAL TAX INFORMATION 87
- ----------------------------------------------------
CONTACT INFORMATION BACK COVER
- ----------------------------------------------------
THIS REPORT HAS BEEN PREPARED FOR THE GENERAL INFORMATION OF SHAREHOLDERS. IT
IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY WHEN PRECEDED OR
ACCOMPANIED BY A CURRENT PROSPECTUS.
M F S(SM)
INVESTMENT MANAGEMENT(R)
LETTER FROM THE CEO
[Photo of Robert J. Manning]
Dear Shareholders,
It has been said that change is the only constant in life. As investors have
seen, that theme is still accurate today as we recently have experienced
shifting economic cycles because of natural disasters and political instability
around the globe.
Markets worldwide have fluctuated in the past year as devastating hurricanes
had a dramatic effect on the international economy, particularly on oil prices.
We witnessed political unrest in the Middle East, highlighted by instability in
Iraq, and in Africa, the usually stable Nigeria also experienced violence. As a
result, energy prices have bounced up and down, with crude oil prices at one
point topping a record $70 per barrel.
Such cycles are not uncommon and in fact have almost become the norm in our
everyday lives. What does all of this mean to you as an investor? In times like
these, it helps to know that you're working with a seasoned investment
professional who has experience to guide you through difficult times. At
MFS(R), we believe our investment management team has the knowledge and
confidence to navigate through difficult cycles and at the same time see
through adversity to find investment opportunities for our clients and
shareholders.
Our investment management process, honed over 80 years, combines a unique
concept of teamwork with our unwavering focus on the long term. We firmly
believe that the best way to realize long-term financial goals - be it a
college education, a comfortable retirement, or a secure family legacy - is to
follow a three-pronged approach that focuses on longer time horizons. Allocate
holdings across the major asset classes - including stocks, bonds, and cash.
Diversify within each class to take advantage of different market segments and
investing styles. Rebalance assets regularly to maintain a desired asset
allocation. Of course, these strategies cannot guarantee a profit or protect
against a loss. This long-term approach requires diligence and patience, two
traits that in our experience are essential to capitalizing on the many
opportunities the financial markets can offer - through both up and down
economic cycles.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management(R)
May 15, 2006
The opinions expressed in this letter are those of MFS, and no forecasts can be
guaranteed.
PORTFOLIO COMPOSITION
MFS(R) Mississippi Municipal Bond Fund
PORTFOLIO STRUCTURE(i)
Bonds 98.6%
Cash & Other Net Assets 1.4%
TOP FIVE BOND INDUSTRIES (i)
Health/Hospitals 16.5%
------------------------------------------------
State Agency 13.5%
------------------------------------------------
General Obligations/General Purpose 13.3%
------------------------------------------------
Water/Sewer 11.2%
------------------------------------------------
Universities/Colleges 11.1%
------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 80.6%
------------------------------------------------
AA 2.5%
------------------------------------------------
A 6.9%
------------------------------------------------
BBB 8.5%
------------------------------------------------
Not Rated 1.5%
------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 6.5
------------------------------------------------
Average Life (m) 14.8 yrs.
------------------------------------------------
Average Maturity (m) 16.1 yrs.
------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA+
------------------------------------------------
Average Short Term Credit Quality A-1
------------------------------------------------
MFS(R) New York Municipal Bond Fund
PORTFOLIO STRUCTURE(i)
Bonds 98.7%
Cash & Other Net Assets 1.3%
TOP FIVE BOND INDUSTRIES (i)
Water/Sewer 13.2%
------------------------------------------------
State Agency 12.1%
------------------------------------------------
Toll Roads 8.6%
------------------------------------------------
Transportation/Special Tax 7.7%
------------------------------------------------
General Obligations/General Purpos 7.6%
------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 43.8%
------------------------------------------------
AA 20.3%
------------------------------------------------
A 19.0%
------------------------------------------------
BBB 9.8%
------------------------------------------------
BB 2.2%
------------------------------------------------
B 0.6%
------------------------------------------------
Not Rated 4.3%
------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 6.6
------------------------------------------------
Average Life (m) 15.6 yrs.
------------------------------------------------
Average Maturity (m) 17.2 yrs.
------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA
------------------------------------------------
Average Short Term Credit Quality A-1
------------------------------------------------
MFS(R) North Carolina Municipal Bond Fund
PORTFOLIO STRUCTURE (i)
Bonds 93.3%
Cash & Other Net Assets 0.7%
TOP FIVE BOND INDUSTRIES (i)
Health/Hospitals 23.0%
------------------------------------------------
Municipal-owned utilities 13.8%
------------------------------------------------
Universities/Colleges 10.1%
------------------------------------------------
Water/Sewer 9.3%
------------------------------------------------
State & Local Appropriation Other 8.2%
------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 40.3%
------------------------------------------------
AA 33.8%
------------------------------------------------
A 8.6%
------------------------------------------------
BBB 16.4%
------------------------------------------------
Not Rated 0.9%
------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 6.1
------------------------------------------------
Average Life (m) 14.2 yrs.
------------------------------------------------
Average Maturity (m) 15.5 yrs.
------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA
------------------------------------------------
Average Short Term Credit Quality A-1
------------------------------------------------
MFS(R) Pennsylvania Municipal Bond Fund
PORTFOLIO STRUCTURE (i)
Bonds 98.6%
Cash & Other Net Assets 1.4%
TOP FIVE BOND INDUSTRIES (i)
General Obligations/Schools 21.8%
------------------------------------------------
Universities/Colleges 13.9%
------------------------------------------------
Health/Hospitals 11.7%
------------------------------------------------
Water/Sewer 9.4%
------------------------------------------------
General Obligations/General Purpose 7.7%
------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 68.1%
------------------------------------------------
AA 14.0%
------------------------------------------------
A 5.9%
------------------------------------------------
BBB 9.0%
------------------------------------------------
BB 0.6%
------------------------------------------------
B 0.2%
------------------------------------------------
CCC 0.5%
------------------------------------------------
Not Rated 1.7%
------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 7.0
------------------------------------------------
Average Life (m) 16.9 yrs.
------------------------------------------------
Average Maturity (m) 18.0 yrs.
------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA
------------------------------------------------
Average Short Term Credit Quality A-1
------------------------------------------------
MFS(R) South Carolina Municipal Bond Fund
PORTFOLIO STRUCTURE(i)
Bonds 98.8%
Cash & Other Net Assets 1.2%
TOP FIVE BOND INDUSTRIES (i)
Health/Hospitals 20.9%
------------------------------------------------
Water/Sewer 14.6%
------------------------------------------------
Universities/Colleges 11.7%
------------------------------------------------
Municipal-owned Utilities 11.3%
------------------------------------------------
General Obligations/Schools 10.2%
------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 76.1%
------------------------------------------------
AA 11.8%
------------------------------------------------
A 6.2%
------------------------------------------------
BBB 2.8%
------------------------------------------------
B 0.6%
------------------------------------------------
Not Rated 2.5%
------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 6.8
------------------------------------------------
Average Life (m) 18.1 yrs.
------------------------------------------------
Average Maturity (m) 19.3 yrs.
------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA+
------------------------------------------------
Average Short Term Credit Quality A-1
------------------------------------------------
MFS(R) Tennessee Municipal Bond Fund
PORTFOLIO STRUCTURE(i)
Bonds 99.1%
Cash & Other Net Assets 0.9%
TOP FIVE BOND INDUSTRIES (i)
Water/Sewer 19.3%
------------------------------------------------
Health/Hospitals 14.0%
------------------------------------------------
General Obligations/Schools 12.9%
------------------------------------------------
Single Family Housing/State 12.7%
------------------------------------------------
General Obligations/General Purpose 8.4%
------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 56.8%
------------------------------------------------
AA 28.9%
------------------------------------------------
A 4.3%
------------------------------------------------
BBB 7.1%
------------------------------------------------
B 0.9%
------------------------------------------------
Not Rated 2.0%
------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 5.9
------------------------------------------------
Average Life (m) 12.8 yrs.
------------------------------------------------
Average Maturity (m) 15.9 yrs.
------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA
------------------------------------------------
Average Short Term Credit Quality A-1
------------------------------------------------
MFS(R) Virginia Municipal Bond Fund
PORTFOLIO STRUCTURE(i)
Bonds 98.4%
Cash & Other Net Assets 1.6%
TOP FIVE BOND INDUSTRIES (i)
State Agency 22.0%
------------------------------------------------
General Obligations/Improvement 12.9%
------------------------------------------------
Health/Hospitals 12.4%
------------------------------------------------
Water/Sewer 10.2%
------------------------------------------------
Airport 8.5%
------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 48.3%
------------------------------------------------
AA 27.1%
------------------------------------------------
A 12.0%
------------------------------------------------
BBB 5.0%
------------------------------------------------
BB 1.1%
------------------------------------------------
B 1.0%
------------------------------------------------
CCC 0.6%
------------------------------------------------
Not Rated 4.9%
------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 6.2
------------------------------------------------
Average Life (m) 14.5 yrs.
------------------------------------------------
Average Maturity (m) 16.5 yrs.
------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA
------------------------------------------------
Average Short Term Credit Quality A-1
------------------------------------------------
MFS(R) West Virginia Municipal Bond Fund
PORTFOLIO STRUCTURE(i)
Bonds 99.0%
Cash & Other Net Assets 1.0%
TOP FIVE BOND INDUSTRIES (i)
Universities/Colleges 23.4%
------------------------------------------------
General Obligations/General Purpose 22.2%
------------------------------------------------
State Agency 20.5%
------------------------------------------------
Water/Sewer 8.2%
------------------------------------------------
Health/Hospitals 5.4%
------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 79.0%
------------------------------------------------
AA 6.4%
------------------------------------------------
A 9.2%
------------------------------------------------
BBB 3.8%
------------------------------------------------
BB 0.2%
------------------------------------------------
B 0.6%
------------------------------------------------
Not Rated 0.8%
------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 6.2
------------------------------------------------
Average Life (m) 15.8 yrs.
------------------------------------------------
Average Maturity (m) 16.8 yrs.
------------------------------------------------
Average Credit Quality of Rated
Securities (a) AA+
------------------------------------------------
Average Short Term Credit Quality 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 graphical presentation, the bond component includes
both accrued interest amounts and the equivalent expo sure 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 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 3/31/06.
Percentages are based on net assets as of 3/31/06, unless otherwise noted.
The portfolios are actively managed, and current holdings may be different.
MANAGEMENT REVIEW
FACTORS THAT AFFECTED PERFORMANCE
During the period, our duration(d) positioning relative to our benchmark, the
Lehman Brothers Municipal Bond Index (Lehman Index), had a positive effect on
relative performance for the North Carolina and Tennessee funds, and a negative
effect on results for the Pennsylvania fund. For all other funds, duration
positioning had a neutral effect on performance.
Yield-curve(y) positioning was a strong contributor to relative results in all
funds, with the exception of the Virginia and Tennessee funds, in which the
positioning had a neutral and negative effect, respectively. Compared to the
benchmark, all of the funds, excluding the South Carolina, Tennessee, and
Virginia funds, were underweighted in bonds on the short end of the yield-
curve (represented by bonds with durations of 0- to 4- years). This positioning
helped relative returns as bonds on the short-end of the curve suffered price
declines as their yields increased. The South Carolina fund was overweighted in
bonds on the long end of the curve (represented by bonds with durations of 11-
to 25-years). This helped relative results during the period because long-term
municipal bonds increased in price as their yields flattened.
The average credit quality of most of the funds was similar to that of the
Lehman Index over the period. The effect of credit quality on relative
performance was therefore neutral for all funds with the exception of the South
Carolina and Virginia funds, where credit quality hurt results.
Sector allocation benefited the Mississippi and New York funds, where our
underweighted positions in the general obligation sector aided results. The
Virginia fund benefited from an overweighting in the utilities sector. On the
negative side, security selection in the credit enhanced sector was an area of
weakness for many of the funds. Underweighting the strong-performing tobacco
sector hurt results for all funds, except the New York and Tennessee funds,
where the sector had a neutral impact on performance. Security selection in the
pre-refunded bonds sector also negatively impacted relative returns for the New
York, South Carolina, and West Virginia funds. Overweighting this sector in the
Tennessee fund also dampened results.
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 and
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.
PERFORMANCE SUMMARY THROUGH 3/31/06
The following information illustrates the historical performance of each fund's
original share class in comparison to various market indicators. 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 average relevant state municipal debt fund tracked by Lipper
Inc., an independent firm that reports mutual fund performance. For those
states where Lipper does not track state specific fund performance, we have
provided the average "other state" municipal debt fund returns. Each fund's
results have also 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. FOR MOST RECENT MONTH-END
PERFORMANCE, PLEASE VISIT MFS.COM. 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 3/31/06)
MFS Mississippi Lehman Brothers
Municipal Bond Municipal
Bond Fund - Class A Bond Index
3/96 $ 9,525 $10,000
3/97 10,022 10,547
3/98 11,126 11,677
3/99 11,751 12,400
3/00 11,683 12,39
3/01 12,854 13,744
3/02 13,298 14,261
3/03 14,558 15,671
3/04 15,252 16,590
3/05 15,674 17,032
3/06 16,237 17,682
MFS(R) MISSISSIPPI BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Class inception
Share class date 1-yr 5-yr 10-yr
A 8/06/92 3.59% 4.78% 5.48%
- ------------------------------------------------------------------------------
B 9/07/93 2.71% 3.95% 4.64%
AVERAGE ANNUAL
Comparative Benchmarks
Average "other state" municipal debt
fund (l) 3.82% 4.88% 5.40%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index
(f) 3.81% 5.17% 5.86%
AVERAGE ANNUAL WITH SALES CHARGE
Share class
A -1.33% 3.77% 4.97%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -1.25% 3.61% 4.64%
With CDSC (Declining over six years
from 4% to 0%)
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
MFS New York Lehman Brothers
Municipal Bond Municipal
Fund - Class A Bond Index
3/96 $ 9,525 $10,000
3/97 9,971 10,547
3/98 11,126 11,677
3/99 11,698 12,400
3/00 11,574 12,390
3/01 12,819 13,744
3/02 13,224 14,261
3/03 14,553 15,671
3/04 15,267 16,590
3/05 15,641 17,032
3/06 16,157 17,682
MFS(R) NEW YORK MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Class inception
Share class date 1-yr 5-yr 10-yr
A 6/06/88 3.30% 4.74% 5.43%
- ------------------------------------------------------------------------------
B 9/07/93 2.43% 3.90% 4.60%
- ------------------------------------------------------------------------------
C 12/11/00 2.43% 3.94% 4.61%
AVERAGE ANNUAL
Comparative Benchmarks
Average New York municipal debt
fund (l) 3.89% 4.64% 5.20%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond
Index (f) 3.81% 5.17% 5.86%
AVERAGE ANNUAL WITH SALES CHARGE
Share class
A -1.61% 3.72% 4.91%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -1.51% 3.56% 4.60%
With CDSC (Declining over six years
from 4% to 0%)
- ------------------------------------------------------------------------------
C 1.45% 3.94% 4.61%
With CDSC (1% for 12 months) (x)
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
(x) Assuming redemption within one year from the end of the prior month of
purchase.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
MFS North Carolina Lehman Brothers
Municipal Bond Municipal
Fund - Class A Bond Index
3/96 $ 9,525 $10,000
3/97 10,010 10,547
3/98 11,047 11,677
3/99 11,572 12,400
3/00 11,379 12,390
3/01 12,539 13,744
3/02 12,926 14,261
3/03 14,181 15,671
3/04 14,891 16,590
3/05 15,211 17,032
3/06 15,742 17,682
MFS(R) NORTH CAROLINA MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Class inception
Share class date 1-yr 5-yr 10-yr
A 10/31/84 3.49% 4.65% 5.15%
- ------------------------------------------------------------------------------
B 9/07/93 2.73% 3.94% 4.46%
- ------------------------------------------------------------------------------
C 1/03/94 2.82% 3.96% 4.48%
AVERAGE ANNUAL
Comparative Benchmarks
Average North Carolina municipal
debt fund (l) 3.14% 4.23% 4.89%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond
Index (f) 3.81% 5.17% 5.86%
AVERAGE ANNUAL WITH SALES CHARGE
Share class
A -1.43% 3.64% 4.64%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -1.22% 3.60% 4.46%
With CDSC (Declining over six years
from 4% to 0%)
- ------------------------------------------------------------------------------
C 1.83% 3.96% 4.48%
With CDSC (1% for 12 months) (x)
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
(x) Assuming redemption within one year from the end of the prior month of
purchase.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
MFS Pennsylvania Lehman Brothers
Municipal Bond Municipal
Fund - Class A Bond Index
3/96 $ 9,525 $10,000
3/97 9,970 10,547
3/98 11,131 11,677
3/99 11,782 12,400
3/00 11,730 12,390
3/01 13,002 13,744
3/02 13,502 14,261
3/03 14,868 15,671
3/04 15,629 16,590
3/05 16,093 17,032
3/06 16,750 17,682
MFS(R) PENNSYLVANIA MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Class inception
Share class date 1-yr 5-yr 10-yr
A 2/01/93 4.08% 5.20% 5.81%
- ------------------------------------------------------------------------------
B 9/07/93 3.30% 4.36% 4.97%
AVERAGE ANNUAL
Comparative Benchmarks
Average Pennsylvania municipal debt
fund (l) 3.66% 4.79% 5.03%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond
Index (f) 3.81% 5.17% 5.86%
AVERAGE ANNUAL WITH SALES CHARGE
Share class
A -0.86% 4.18% 5.29%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -0.69% 4.02% 4.97%
With CDSC (Declining over six years
from 4% to 0%)
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
MFS South Carolina Lehman Brothers
Municipal Bond Municipal
Fund - Class A Bond Index
3/96 $ 9,525 $10,000
3/97 9,949 10,547
3/98 11,006 11,677
3/99 11,482 12,400
3/00 11,222 12,390
3/01 12,373 13,744
3/02 12,828 14,261
3/03 14,048 15,671
3/04 14,793 16,590
3/05 15,166 17,032
3/06 15,694 17,682
MFS(R) SOUTH CAROLINA MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Class inception
Share class date 1-yr 5-yr 10-yr
A 10/31/84 3.48% 4.87% 5.12%
- ------------------------------------------------------------------------------
B 9/07/93 2.73% 4.19% 4.43%
AVERAGE ANNUAL
Comparative Benchmarks
Average South Carolina municipal
debt fund (l) 3.16% 4.47% 4.97%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond
Index (f) 3.81% 5.17% 5.86%
AVERAGE ANNUAL WITH SALES CHARGE
Share class
A -1.44% 3.85% 4.61%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -1.23% 3.85% 4.43%
With CDSC (Declining over six years
from 4% to 0%)
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
MFS Tennessee Lehman Brothers
Municipal Bond Municipal
Fund - Class A Bond Index
3/96 $ 9,525 $10,000
3/97 9,952 10,547
3/98 11,058 11,677
3/99 11,589 12,400
3/00 11,386 12,390
3/01 12,510 13,744
3/02 12,930 14,261
3/03 14,138 15,671
3/04 14,816 16,590
3/05 15,191 17,032
3/06 15,666 17,682
MFS(R) TENNESSEE MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Class inception
Share class date 1-yr 5-yr 10-yr
A 8/12/88 3.13% 4.60% 5.10%
- ------------------------------------------------------------------------------
B 9/07/93 2.56% 3.95% 4.43%
AVERAGE ANNUAL
Comparative Benchmarks
Average Tennessee municipal debt
fund (l) 2.89% 4.27% 4.94%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index
(f) 3.81% 5.17% 5.86%
AVERAGE ANNUAL WITH SALES CHARGE
Share class
A -1.77% 3.59% 4.59%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -1.39% 3.60% 4.43%
With CDSC (Declining over six years
from 4% to 0%)
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
MFS Virginia Lehman Brothers
Municipal Bond Municipal
Fund - Class A Bond Index
3/96 $ 9,525 $10,000
3/97 9,903 10,547
3/98 10,925 11,677
3/99 11,440 12,400
3/00 11,315 12,390
3/01 12,510 13,744
3/02 12,751 14,261
3/03 13,412 15,671
3/04 14,705 16,590
3/05 15,120 17,032
3/06 15,641 17,682
MFS(R) VIRGINIA MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Class inception
Share class date 1-yr 5-yr 10-yr
A 10/31/84 3.45% 4.76% 5.09%
- ------------------------------------------------------------------------------
B 9/07/93 2.78% 4.08% 4.39%
- ------------------------------------------------------------------------------
C 1/03/94 2.78% 4.08% 4.41%
AVERAGE ANNUAL
Comparative Benchmarks
Average Virginia municipal debt
fund (l) 3.16% 4.27% 4.93%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond
Index (f) 3.81% 5.17% 5.86%
AVERAGE ANNUAL WITH SALES CHARGE
Share class
A -1.47% 3.75% 4.57%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -1.19% 3.74% 4.39%
With CDSC (Declining over six years
from 4% to 0%)
- ------------------------------------------------------------------------------
C 1.79% 4.08% 4.41%
With CDSC (1% for 12 months) (x)
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
(x) Assuming redemption within one year from the end of the prior month of
purchase.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
(FOR THE 10-YEAR PERIOD ENDED 3/31/06)
MFS West Virginia Lehman Brothers
Municipal Bond Municipal
Fund - Class A Bond Index
3/96 $ 9,525 $10,000
3/97 10,021 10,547
3/98 10,965 11,677
3/99 11,483 12,400
3/00 11,266 12,390
3/01 12,398 13,744
3/02 12,868 14,261
3/03 14,031 15,671
3/04 14,710 16,590
3/05 15,046 17,032
3/06 15,528 17,682
MFS(R) WEST VIRGINIA MUNICIPAL BOND FUND
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Class inception
Share class date 1-yr 5-yr 10-yr
A 10/31/84 3.21% 4.61% 5.01%
- ------------------------------------------------------------------------------
B 9/07/93 2.45% 3.93% 4.32%
AVERAGE ANNUAL
Comparative Benchmarks
Average "other state" municipal debt
fund (l) 3.82% 4.88% 5.40%
- ------------------------------------------------------------------------------
Lehman Brothers Municipal Bond
Index (f) 3.81% 5.17% 5.86%
AVERAGE ANNUAL WITH SALES CHARGE
Share class
A -1.69% 3.59% 4.50%
With Initial Sales Charge (4.75%)
- ------------------------------------------------------------------------------
B -1.50% 3.58% 4.32%
With CDSC (Declining over six years
from 4% to 0%)
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
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 funds'
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 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.
FUND EXPENSE TABLES
FUND EXPENSES BORNE BY THE SHAREHOLDERS DURING THE PERIOD, OCTOBER 1, 2005,
THROUGH MARCH 31, 2006.
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 redemption fees on certain exchanges and redemptions, 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 funds 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, 2005 through March 31,
2006.
ACTUAL EXPENSES
The first line for each share class in the tables below provides information
about actual account values and actual expenses. You may use the information in
7this 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 tables below 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) or redemption fees. 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(R) MISSISSIPPI MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------------------
Actual 0.64% $1,000.0 $1,009.90 $3.21
A -------------------------------------------------------------------------------
Hypothetical (h) 0.64% $1,000.00 $1,021.74 $3.23
- -------------------------------------------------------------------------------------------
Actual 1.40% $1,000.00 $1,006.10 $7.00
B -------------------------------------------------------------------------------
Hypothetical (h) 1.40% $1,000.00 $1,017.95 $7.04
- -------------------------------------------------------------------------------------------
(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) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
MFS(R) NEW YORK MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------------------
Actual 0.82% $1,000.00 $1,006.80 $4.10
A -------------------------------------------------------------------------------
Hypothetical (h) 0.82% $1,000.00 $1,020.84 $4.13
- -------------------------------------------------------------------------------------------
Actual 1.57% $1,000.00 $1,003.00 $7.84
B -------------------------------------------------------------------------------
Hypothetical (h) 1.57% $1,000.00 $1,017.10 $7.90
- -------------------------------------------------------------------------------------------
Actual 1.57% $1,000.00 $1,003.00 $7.84
C -------------------------------------------------------------------------------
Hypothetical (h) 1.57% $1,000.00 $1,017.10 $7.90
- -------------------------------------------------------------------------------------------
MFS(R) NORTH CAROLINA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------------------
Actual 0.87% $1,000.00 $1,009.20 $4.36
A -------------------------------------------------------------------------------
Hypothetical (h) 0.87% $1,000.00 $1,020.59 $4.38
- -------------------------------------------------------------------------------------------
Actual 1.52% $1,000.00 $1,006.00 $7.60
B -------------------------------------------------------------------------------
Hypothetical (h) 1.52% $1,000.00 $1,017.35 $7.64
- -------------------------------------------------------------------------------------------
Actual 1.52% $1,000.00 $1,006.00 $7.60
C -------------------------------------------------------------------------------
Hypothetical (h) 1.52% $1,000.00 $1,017.35 $7.64
- -------------------------------------------------------------------------------------------
MFS(R) PENNSYLVANIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------------------
Actual 0.59% $1,000.00 $1,013.20 $2.96
A -------------------------------------------------------------------------------
Hypothetical (h) 0.59% $1,000.00 $1,021.99 $2.97
- -------------------------------------------------------------------------------------------
Actual 1.34% $1,000.00 $1,010.40 $6.72
B -------------------------------------------------------------------------------
Hypothetical (h) 1.34% $1,000.00 $1,018.25 $6.74
- -------------------------------------------------------------------------------------------
MFS(R) SOUTH CAROLINA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------------------
Actual 0.89% $1,000.00 $1,009.50 $4.46
A -------------------------------------------------------------------------------
Hypothetical (h) 0.89% $1,000.00 $1,020.49 $4.48
- -------------------------------------------------------------------------------------------
Actual 1.54% $1,000.00 $1,006.20 $7.70
B -------------------------------------------------------------------------------
Hypothetical (h) 1.54% $1,000.00 $1,017.25 $7.75
- -------------------------------------------------------------------------------------------
(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) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
MFS(R) TENNESSEE MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------------------
Actual 0.93% $1,000.00 $1,006.70 $4.65
A -------------------------------------------------------------------------------
Hypothetical (h) 0.93% $1,000.00 $1,020.29 $4.68
- -------------------------------------------------------------------------------------------
Actual 1.58% $1,000.00 $1,003.40 $7.89
B -------------------------------------------------------------------------------
Hypothetical (h) 1.58% $1,000.00 $1,017.05 $7.95
- -------------------------------------------------------------------------------------------
MFS(R) VIRGINIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------------------
Actual 0.88% $1,000.00 $1,008.40 $4.41
A -------------------------------------------------------------------------------
Hypothetical (h) 0.88% $1,000.00 $1,020.54 $4.43
- -------------------------------------------------------------------------------------------
Actual 1.53% $1,000.00 $1,005.10 $7.65
B -------------------------------------------------------------------------------
Hypothetical (h) 1.53% $1,000.00 $1,017.30 $7.70
- -------------------------------------------------------------------------------------------
Actual 1.53% $1,000.00 $1,006.00 $7.65
C -------------------------------------------------------------------------------
Hypothetical (h) 1.53% $1,000.00 $1,017.30 $7.70
- -------------------------------------------------------------------------------------------
MFS(R) WEST VIRGINIA MUNICIPAL BOND FUND
- -------------------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period (p)
Expense Account Value Account Value 10/01/05-
Share Class Ratio 10/01/05 3/31/06 3/31/06
- -------------------------------------------------------------------------------------------
Actual 0.91% $1,000.00 $1,010.20 $4.56
A -------------------------------------------------------------------------------
Hypothetical (h) 0.91% $1,000.00 $1,020.39 $4.58
- -------------------------------------------------------------------------------------------
Actual 1.56% $1,000.00 $1,006.00 $7.80
B -------------------------------------------------------------------------------
Hypothetical (h) 1.56% $1,000.00 $1,017.15 $7.85
- -------------------------------------------------------------------------------------------
(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) MISSISSIPPI MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 97.5%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport and Port Jackson, MS, Municipal Airport Authority, Airport Rev., "A", AMBAC,
Revenue - 3.0% 5%, 2031 $ 2,510,000 $ 2,590,370
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 13.2% Commonwealth of Puerto Rico, ROLS, FGIC, 7.763%, 2016 (z)(v) $ 3,110,000 $ 3,842,778
Hinds County, MS, MBIA, 6.25%, 2010 1,660,000 1,809,400
Hinds County, MS, MBIA, 6.25%, 2011 1,285,000 1,425,849
Mississippi Development Bank Special Obligations (Jackson, Mississippi)
FSA, 5.25%, 2018 600,000 657,348
Mississippi Development Bank Special Obligations (Jackson, Mississippi)
FSA, 5.25%, 2019 1,260,000 1,382,812
Mississippi Development Bank Special Obligations (Jackson, Mississippi)
FSA, 5.25%, 2020 620,000 681,826
Mississippi Development Bank Special Obligations, Harrison County
Mississippi Highway Construction, "N", FGIC, 5%, 2026 1,000,000 1,037,410
Puerto Rico Commonwealth Public Improvement, "A", CIFG, 5%, 2025 500,000 524,385
------------
$ 11,361,808
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 3.2% Puerto Rico Municipal Finance Agency, RITES, FSA, 7.101%, 2017 (z)(v) $ 750,000 $ 851,730
State of Mississippi, Capital Improvement, 5.5%, 2010 (c) 750,000 802,702
State of Mississippi, Capital Improvement, "I", 6%, 2009 (c) 1,000,000 1,074,540
------------
$ 2,728,972
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 5.8% Biloxi, MS, Public School District, MBIA, 5%, 2021 $ 1,000,000 $ 1,029,320
Jackson, MS, Public School District, "B", AMBAC, 5.75%, 2010 (c) 1,000,000 1,083,640
Jackson, MS, Public School District, "B", AMBAC, 0%, 2022 2,000,000 850,980
Jackson, MS, Public School District, "B", AMBAC, 0%, 2023 1,000,000 398,440
Madison County, MS, School District, "A", MBIA, 5.875%, 2016 1,500,000 1,605,915
------------
$ 4,968,295
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Alcorn County, MS, Corinth Hospital Rev. (Magnolia Regional Health
Hospitals - 16.2% Center), AMBAC, 5.75%, 2013 $ 1,000,000 $ 1,021,090
Corinth & Alcorn County, MS, Hospital Rev. (Magnolia Regional Health
Center), 5.5%, 2021 400,000 402,128
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital), 5.75%, 2031 500,000 511,965
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital) MBIA,
6.125%, 2015 2,250,000 2,265,322
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital) MBIA,
6.2%, 2018 1,000,000 1,006,990
Hinds County, MS, Rev. (Methodist Hospital & Rehabilitation) AMBAC,
5.6%, 2012 2,055,000 2,133,994
Jones County, MS, Hospital Rev. (South Central Regional Medical
Center), 5.5%, 2017 1,000,000 1,017,480
Mississippi Development Bank Special Obligations (Adams County
Hospital) FSA, 5.75%, 2016 1,000,000 1,014,640
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist
Medical Center) MBIA, 6.5%, 2010 1,190,000 1,204,625
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist
Medical Center) MBIA, 6%, 2013 750,000 758,955
Mississippi Hospital Equipment & Facilities Authority Rev. (Baptist
Memorial Healthcare), "B-1", 5%, 2024 1,000,000 1,012,270
Mississippi Hospital Equipment & Facilities Authority Rev. (Forrest
County General Hospital) FSA, 5.625%, 2020 1,000,000 1,074,600
Mississippi Hospital Equipment & Facilities Authority Rev., Refunding &
Improvement, Southwest Regional Medical Center, 5.5%, 2019 250,000 260,320
Mississippi Hospital Equipment & Facilities Authority, Refunding &
Improvement, Southwest Regional Medical Center, 5.75%, 2023 250,000 261,220
------------
$ 13,945,599
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Environmental Mississippi Business Finance Corp. (Solid Waste Management, Inc.),
Services - 0.3% 4.4%, 2027 $ 250,000 $ 250,868
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Virgin Islands Public Finance Authority, Refinery Facilities Rev.
Other - 0.3% (Hovensa Refinery), 5.875%, 2022 $ 210,000 $ 221,449
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Jones County, MS, Solid Waste Disposal Rev. (International Paper Co.)
Paper - 3.1% "A", 5.8%, 2021 $ 500,000 $ 511,215
Lowndes County, MS, Solid Waste Disposal & Pollution Control Rev.
(Weyerhaeuser Co.), 6.8%, 2022 1,250,000 1,486,488
Warren County, MS, Environmental Improvement Rev. (International Paper
Co.), "A", 4.4%, 2015 750,000 714,082
------------
$ 2,711,785
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment & Mississippi Development Bank, Special Obligation (Diamond Lakes
Tourism - 1.4% Utilities), 6.25%, 2017 $ 1,150,000 $ 1,173,161
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Gulfport, MS, Community Development Urban Renewal Rev. (Oakview
Revenue - 2.0% Apartments) FNMA, 7.4%, 2025 $ 1,720,000 $ 1,723,079
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 6.9% Mississippi Home Corp. Rev., Single Family Rev, "B-2", GNMA, 6.375%, 2032 $ 550,000 $ 570,922
Mississippi Home Corp. Rev., Single Family Rev., "A", GNMA, 6.3%, 2031 205,000 214,301
Mississippi Home Corp. Rev., Single Family Rev., "A-2", GNMA, 5.3%, 2023 780,000 796,887
Mississippi Home Corp. Rev., Single Family Rev., "A-2", GNMA, 6.95%, 2031 330,000 339,781
Mississippi Home Corp. Rev., Single Family Rev., "A-2", GNMA, 6.5%, 2032 320,000 331,219
Mississippi Home Corp. Rev., Single Family Rev., "B", GNMA, 6.625%, 2027 235,000 236,981
Mississippi Home Corp. Rev., Single Family Rev., "B", GNMA, 5.3%, 2035 860,000 879,513
Mississippi Home Corp. Rev., Single Family Rev., "B-2", GNMA, 6.45%, 2033 585,000 612,612
Mississippi Home Corp. Rev., Single Family Rev., "C", GNMA, 4.95%, 2025 885,000 889,425
Mississippi Home Corp. Rev., Single Family Rev., "F", GNMA, 7.55%, 2027 174,000 176,563
Mississippi Home Corp. Rev., Single Family Rev., GNMA, 6.5%, 2024 890,000 891,104
------------
$ 5,939,308
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local
Agencies - 13.3% Lamar County, MS, (Jail Project) MBIA, 5.1%, 2021 $ 430,000 $ 447,428
Mississippi Development Bank Special Obligations (Correctional
Facilities), "A", AMBAC, 5.125%, 2025 1,000,000 1,047,450
Mississippi Development Bank Special Obligations (Hinds County Public
Improvements), FSA, 5.25%, 2030 1,110,000 1,172,837
Mississippi Development Bank Special Obligations (Mississippi, Ltd. Tax
Hospital Rev.), 5.1%, 2020 1,000,000 1,037,280
Mississippi Development Bank Special Obligations (Natchez Mississippi
Convention Center) AMBAC, 6%, 2021 750,000 819,360
Mississippi Development Bank Special Obligations (Public Improvement
Board), 5%, 2023 750,000 750,323
Mississippi Development Bank Special Obligations (Southaven, MS,
Recreation Facilities), 5.875%, 2014 375,000 395,670
Mississippi Development Bank Special Obligations (Southaven, MS,
Recreation Facilities), 6.2%, 2020 400,000 426,268
Mississippi Development Bank Special Obligations (Tunica County Highway
Construction Project), FGIC, 5%, 2024 1,000,000 1,041,600
Mississippi Development Bank Special Obligations (Tunica County Highway
Construction Project), FGIC, 5%, 2025 1,000,000 1,039,390
Mississippi Development Bank Special Obligations (Tupelo Fairgrounds),
"A", AMBAC, 5%, 2017 785,000 812,342
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2013 (z)(v) 500,000 591,270
Walnut Grove, MS, Correctional Authority, AMBAC, 6%, 2009 (c) 1,750,000 1,914,185
------------
$ 11,495,403
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.0% Puerto Rico Convention Center, District Authority Hotel Occupancy Tax
Rev., "A", CIFG, 4.5%, 2036 $ 750,000 $ 730,597
Virgin Islands Public Finance Authority Rev., "A", 5.25%, 2024 135,000 140,243
------------
$ 870,840
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.7% Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 $ 235,000 $ 240,901
Guam Economic Development Authority Tobacco Settlement, "B", 5.5%, 2041 350,000 357,193
------------
$ 598,094
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Mississippi Development Bank Special Obligations, Madison County (Road
Special Tax - 1.4% & Bridge) AMBAC, 5.1%, 2019 $ 1,175,000 $ 1,234,526
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Jackson State University, Educational Building Corp. Rev., (Campus
Colleges - 11.0% Facilities), "A", FGIC, 5%, 2029 $ 3,100,000 $ 3,196,565
Jackson State University, Educational Building Corp. Rev., (Student
Recreation Center), AMBAC, 5.125%, 2027 750,000 779,483
Medical Center, Educational Building Corp. Rev. (University of
Mississippi Medical Center), "B", AMBAC, 5.5%, 2023 1,000,000 1,134,000
Mississippi State University Educational Building Corp. Rev. (Athletic
Facilities), "A", 6.2%, 2006 (c) 1,000,000 1,024,120
Mississippi State University Educational Building Corp. Rev., AMBAC,
5.5%, 2016 1,000,000 1,066,270
Mississippi State University Educational Building Corp. Rev., AMBAC,
5%, 2021 250,000 258,352
Mississippi Valley State University, Educational Building Corp., MBIA,
5.5%, 2021 890,000 941,575
University of Mississippi, Educational Building Corp. (Performing Arts
Center) AMBAC, 5.25%, 2018 1,000,000 1,038,150
------------
$ 9,438,515
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 3.6% Guam Power Authority Rev., RITES, AMBAC, 6.565%, 2013 (z)(v) $ 1,000,000 $ 1,118,180
Mississippi Development Bank Special Obligations (Okolona Electric
System), 5.2%, 2016 1,010,000 1,056,985
Puerto Rico Electric Power Authority Rev., "II", 5.25%, 2031 875,000 909,615
------------
$ 3,084,780
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 11.1% Jackson, MS, Water & Sewer Systems Rev., FGIC, 5.25%, 2009 (c) $ 420,000 $ 441,323
Mississippi Development Bank Special Obligations (Combined Water Sewer
& Solid Waste Management) FSA, 5.25%, 2021 1,270,000 1,369,454
Mississippi Development Bank Special Obligations (Combined Water Sewer
& Solid Waste Management) FSA, 5.05%, 2027 1,610,000 1,693,028
Mississippi Development Bank Special Obligations (Gulfport Water &
Sewer Project) FSA, 5.625%, 2012 (c) 500,000 556,655
Mississippi Development Bank Special Obligations (Gulfport Water &
Sewer Project), "A", FGIC, 5.25%, 2012 (c) 2,000,000 2,153,860
Mississippi Development Bank Special Obligations (Jackson Water & Sewer
System Project) FSA, 5%, 2029 2,000,000 2,063,600
Mississippi Development Bank Special Obligations (Jackson Water & Sewer
System Project), FGIC, 5%, 2032 250,000 257,160
Mississippi Development Bank Special Obligations, Grenada, MS, Water &
Sewer Systems Project, "N", FSA, 5%, 2030 1,000,000 1,037,181
------------
$ 9,572,261
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $80,680,738) $ 83,909,113
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.8%
- ---------------------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, Sewer Rev., 3.22%, due 4/06/06 $ 300,000 $ 300,000
Oklahoma Industries Authority, Health System Rev. (Integris Baptist
Medical Center), "B", 3.18%, due 4/03/06 400,000 400,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 700,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $81,380,738) $ 84,609,113
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.7% 1,452,407
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $ 86,061,520
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $2,000,000 Fixed - 3 Year Floating - 7 Day $ 27,467
BMA Swap Index (2.795%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
7/13/16 USD 1,000,000 Fixed - 10 Year Floating - 7 Day 21,024
BMA Swap Index (3.742%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/15/18 USD 2,000,000 Fixed - 12 Year Floating - 7 Day 10,528
BMA Swap Index (4.019%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/22/18 USD 1,000,000 Fixed - 12 Year Floating - 7 Day 19,031
BMA Swap Index (3.861%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
9/07/26 USD 1,000,000 Floating - 3 Month Fixed - 20 Year (26,908)
LIBOR Swap Index LIBOR Swap Index (5.268%)
- -------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 850,000 Floating - 3 Month Fixed - 20 Year (13,173)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- -------------------------------------------------------------------------------------------------------------------------------
$ 37,969
========
At March 31, 2006, the fund had sufficient cash and/or securities to cover any
commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) 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 - 97.3%
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ISSUER SHARES/PAR VALUE ($)
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Airport & Port New York City, NY, City Industrial Development Agency, Special
Revenue - 3.5% Facilities Rev. (Terminal One Group), 5.5%, 2024 $ 1,000,000 $ 1,050,690
Port Authority NY & NJ, (120th Series) MBIA, 5.5%, 2018 1,500,000 1,548,705
Port Authority NY & NJ, (132nd Series), 5%, 2033 2,000,000 2,068,160
Port Authority NY & NJ, Special Obligation Rev. (JFK International),
MBIA, 6.25%, 2015 1,000,000 1,148,430
------------
$ 5,815,985
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General Obligations -
General Purpose - 7.3% Commonwealth of Puerto Rico, ROLS, XLCA, 7.693%, 2017 (z)(v) $ 1,350,000 $ 1,656,585
Nassau County, NY, Health Systems Rev. (Nassau County), FSA,
6%, 2009 (c) 1,000,000 1,090,570
New York NY, "N", 5%, 2026 1,500,000 1,550,730
New York, NY, "D", 5%, 2028 2,000,000 2,057,500
New York, NY, "A", 6%, 2010 (c) 990,000 1,085,763
New York, NY, "B", 5.375%, 2017 1,250,000 1,332,162
New York, NY, "C-1", 5.25%, 2025 1,000,000 1,060,310
New York, NY, "G", 5%, 2028 2,000,000 2,057,900
New York, NY, "J", FGIC, 5.5%, 2026 200,000 203,386
New York, NY, Unrefunded, "A", 6%, 2019 10,000 10,804
------------
$ 12,105,710
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General Obligations -
Improvement - 0.1% Erie County, NY, Public Improvement, "A", FGIC, 5%, 2019 $ 140,000 $ 146,556
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General Obligations - Genesee Valley, NY, Central School District (Angelica Belmont), FGIC,
Schools - 5.5% 5.25%, 2028 $ 1,720,000 $ 1,850,290
North Babylon, NY, Union Free School District, "A", FGIC, 5.5%, 2018 2,415,000 2,564,899
Port Byron, NY, Central School District, AMBAC, ETM, 7.4%, 2012 (c) 500,000 598,480
Port Byron, NY, Central School District, AMBAC, ETM, 7.4%, 2013 (c) 500,000 609,525
Port Byron, NY, Central School District, AMBAC, ETM, 7.4%, 2014 (c) 500,000 620,510
Port Byron, NY, Central School District, AMBAC, ETM, 7.4%, 2015 (c) 500,000 629,670
Rome, NY, City School District, FSA, 5.5%, 2009 (c) 1,000,000 1,065,720
Washingtonville, NY, Central School Central District, FGIC, 7.35%, 2008 550,000 593,346
Washingtonville, NY, Central School Central District, FGIC, 7.35%, 2009 550,000 611,320
------------
$ 9,143,760
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Healthcare Revenue - Chautauqua County, NY, Industrial Development Agency, Civic
Hospitals - 6.6% Facilities Rev. (Women's Christian Assn.), "A", 6.35%, 2017 $ 155,000 $ 157,006
Chautauqua County, NY, Industrial Development Agency, Civic
Facilities Rev. (Women's Christian Assn.), "A", 6.4%, 2029 490,000 485,605
Chemung County, NY, Industrial Development Agency, Civic Facilities
Rev. (Arnot Ogden Medical Center), "A", 5%, 2029 750,000 754,672
Chemung County, NY, Industrial Development Agency, Civic Facilities
Rev. (Arnot Ogden Medical Center), "B", 5%, 2029 1,000,000 1,006,230
Fulton County, NY, Industrial Development Agency, Civic Facilities
Rev. (Nathan Littauer Hospital), "A", 5.75%, 2009 615,000 613,383
Monroe County, NY, Industrial Development Agency, Civic Facilities
Rev. (Highland Hospital of Rochester), 5%, 2025 1,000,000 1,007,340
Nassau County, NY, Industrial Development Agency, Civic Facilities
Rev. (North Shore Health Systems), "D", 5.625%, 2010 500,000 528,280
New York City, NY, Industrial Development Agency, Civic Facilities
Rev. (Staten Island University Hospital), "B", 6.375%, 2031 500,000 507,290
New York City, NY, Health & Hospital Corp. Rev., "A", 5.25%, 2017 760,000 789,260
New York Dormitory Authority Rev. (Montefiore Medical Center), AMBAC,
5.25%, 2019 810,000 852,136
New York Dormitory Authority Rev. (North Shore Long Island Jewish
Group), 5.5%, 2033 250,000 263,290
New York Dormitory Authority Rev. (White Plains Hospital), FHA,
5.375%, 2043 1,500,000 1,579,215
New York State Dormitory Authority Rev., Non State Supported Debt
(Mt. Sinai NYU Health), 5.5%, 2026 250,000 253,760
New York State Dormitory Authority Rev., Non State Supported Debt
(Mt. Sinai NYU Health), "C", 5.5%, 2026 500,000 507,520
Suffolk County, NY, Industrial Development Agency, Civic Facilities
Rev. (Huntington Hospital), "C", 5.875%, 2032 1,000,000 1,046,180
Yonkers, NY, Industrial Development Agency, Civic Facilities Rev.
(St. John's Riverside Hospital), "A", 7.125%, 2031 500,000 519,640
------------
$ 10,870,807
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Healthcare Revenue - Long Suffolk County, NY, Industrial Development Agency, Civic Facilities
Term Care - 0.4% Rev. (Gurwin Jewish Phase II), 6.7%, 2039 $ 385,000 $ 406,256
Westchester County, NY, Industrial Development Agency, Civic
Facilities Rev., Continuing Care Retirement (Kendal On Hudson), "A",
6.5%, 2034 300,000 311,640
------------
$ 717,896
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Human Services - 0.9% Nassau County, NY, Industrial Development Agency, Civic Facility Rev.
(Special Needs Facility), "B-1", 6.5%, 2017 $ 205,000 $ 212,558
New York Dormitory Authority Rev. (Jewish Board of Families &
Children), AMBAC, 5%, 2023 695,000 725,823
New York, NY, Industrial Development Agency (PSCH, Inc.),
6.375%, 2033 500,000 519,400
------------
$ 1,457,781
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Industrial Revenue - New York City, NY, Industrial Development Agency Rev. (American
Airlines - 0.2% Airlines, Inc.), 7.625%, 2025 $ 350,000 $ 384,608
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Industrial Revenue - Onondaga County, NY, Industrial Development Agency, Sewer Facilities
Other - 1.0% Rev. (Bristol-Meyers Squibb Co.), 5.75%, 2024 $ 1,000,000 $ 1,120,930
Virgin Islands Public Finance Authority, Refinery Facilities Rev.
(Hovensa Refinery), 5.875%, 2022 430,000 453,444
------------
$ 1,574,374
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Industrial Revenue - Essex County, NY, Industrial Development Agency, Pollution Control
Paper - 1.6% Rev. (International Paper Corp.), 5.55%, 2014 $ 750,000 $ 787,425
Essex County, NY, Industrial Development Agency, Pollution Control
Rev. (International Paper Corp.), 6.15%, 2021 1,000,000 1,030,690
Essex County, NY, Industrial Development Agency, Pollution Control
Rev. (International Paper Corp.), 6.45%, 2023 700,000 747,810
------------
$ 2,565,925
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Miscellaneous Revenue -
Entertainment & New York City, NY, City Industrial Development Agency Rev., Liberty
Tourism - 0.3% IAC/InterActiveCorp, 5%, 2035 $ 500,000 $ 489,655
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Miscellaneous Revenue - New York City, NY, Industrial Development Agency, Civic Facilities
Other - 0.6% Rev. (United Jewish Appeal), "A", 5%, 2027 $ 1,000,000 $ 1,041,720
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Multi-Family Housing
Revenue - 2.6% New York City, NY, City Housing Development Corp., "E", 4.65%, 2025 $ 1,000,000 $ 1,000,730
New York City, NY, Housing Development Corp., Multi-Family Housing
Rev., 5.5%, 2034 2,000,000 2,045,440
New York City, NY, Housing Development Corp., Multi-Family Housing
Rev., "C", 5.6%, 2019 400,000 420,744
New York State Housing Finance Agency Rev. Multi Family Housing, "A",
5.1%, 2041 840,000 846,418
------------
$ 4,313,332
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Sales & Excise Tax Schenectady, NY, Metroplex Development Authority Rev., "A", MBIA,
Revenue - 0.3% 5.375%, 2021 $ 475,000 $ 513,000
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Single Family Housing -
State - 4.8% New York Mortgage Agency Rev., 4.6%, 2015 $ 2,000,000 $ 2,009,620
New York Mortgage Agency Rev., 5.8%, 2020 1,555,000 1,598,913
New York Mortgage Agency Rev., 5.1%, 2024 2,000,000 2,022,220
New York Mortgage Agency Rev., "130", 4.75%, 2030 1,500,000 1,468,110
New York Mortgage Agency Rev., "B", 5.85%, 2018 845,000 877,296
------------
$ 7,976,159
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Solid Waste Niagara County, NY, Industrial Development Agency, Solid Waste
Revenue - 0.5% Disposal Rev., (American Ref-fuel), "C", 5.625%, 2024 $ 850,000 $ 883,728
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State & Agency -
Other - 5.7% New York Dormitory Authority (City University), AMBAC, 5.75%, 2018 $ 800,000 $ 907,160
New York Dormitory Authority (Pace University), MBIA, 6%, 2010 (c) 1,700,000 1,869,354
New York Dormitory Authority (School Program), 6.25%, 2020 1,690,000 1,858,713
New York Dormitory Authority (State University), 5.375%, 2010 (c) 1,500,000 1,612,605
New York Dormitory Authority (State University), 5.875%, 2017 1,130,000 1,290,144
New York Dormitory Authority (Upstate Community Colleges), "A", FSA,
6%, 2010 (c) 1,010,000 1,110,616
New York Municipal Bond Bank Agency, Special Program Rev., "A",
AMBAC, 5.25%, 2015 715,000 757,271
------------
$ 9,405,863
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State & Local New York City Industrial Development Agency (American National Red
Agencies - 12.0% Cross Project), AMBAC, 5%, 2036 $ 500,000 $ 518,435
New York Dormitory Authority (City University), "A", 5.625%, 2016 2,450,000 2,724,988
New York Dormitory Authority (Judicial Institute at Pace), AMBAC,
5.5%, 2020 2,500,000 2,672,925
New York Dormitory Authority Rev., Mental Health Services, "A", MBIA,
5.75%, 2010 (c) 5,000 5,380
New York Dormitory Authority Rev., Mental Health Services, "B", MBIA,
5.25%, 2011 (c) 385,000 413,374
New York Dormitory Authority Rev., Mental Health Services, "D", FSA,
5.25%, 2010 (c) 35,000 37,223
New York Dormitory Authority Rev., Mental Health Services,
Unrefunded, "B", MBIA, 5.25%, 2031 830,000 866,943
New York Dormitory Authority Rev., Mental Health Services,
Unrefunded, "D", FSA, 5.25%, 2030 70,000 73,352
New York Dormitory Authority, Mental Health Services Facilities
Improvement, "B", MBIA, 5.25%, 2011 (c) 785,000 840,884
New York Dormitory Authority, Mental Health Services Facilities
Improvement, "D", FSA, 5.25%, 2010 (c) 895,000 951,841
New York Municipal Bond Bank Agency, Special School Purpose Rev.,
5.25%, 2022 1,000,000 1,056,660
New York Urban Development Corp. (Correctional Facilities), AMBAC,
0%, 2009 5,000,000 4,504,100
New York Urban Development Corp. (State Facilities), AMBAC, 5.6%, 2015 2,750,000 3,032,123
Tobacco Settlement Financing Corp., NY, "A-1", 5.5%, 2018 2,000,000 2,150,860
------------
$ 19,849,088
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Tax - Other - 2.4% New York City, NY, Transitional Finance Authority Rev., "A",
5.75%, 2009 (c) $ 2,730,000 $ 2,938,326
New York City, NY, Transitional Finance Authority Rev., "A", 5%, 2026 1,000,000 1,040,330
------------
$ 3,978,656
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Tobacco - 1.9% Erie County, NY, Tobacco Asset Securitization Corp., 0%, 2047 $ 8,000,000 $ 664,000
Guam Economic Development Authority Tobacco Settlement, "B", 5.5%, 2041 400,000 408,220
New York County Tobacco Trust II, 5.625%, 2035 800,000 818,344
Rockland Tobacco Asset Securitization Corp., NY, Tobacco Asset
Backed, "C", 0%, 2060 5,000,000 86,550
TSASC, Inc., NY, "1", 5%, 2034 750,000 729,128
Westchester, NY, Tobacco Asset Securitization Corp., 5.125%, 2045 500,000 486,570
------------
$ 3,192,812
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Toll Roads - 8.5% New York Thruway Authority, General Rev., "E", 5.25%, 2008 (c) $ 200,000 $ 207,486
New York Thruway Authority, General Rev., "E", 5.25%, 2015 1,300,000 1,344,200
Niagara Falls, NY, Bridge Commission Toll Rev., RITES, FGIC,
6.53%, 2015 (z)(v) 3,500,000 4,055,940
Triborough Bridge & Tunnel Authority Rev., NY, "B", 5%, 2032 1,000,000 1,026,550
Triborough Bridge & Tunnel Authority Rev., NY, ETM, 6%, 2012 (c) 1,000,000 1,087,340
Triborough Bridge & Tunnel Authority Rev., NY, RITES, ETM,
7.745%, 2017 (z)(v)(c) 5,000,000 6,042,800
Triborough Bridge & Tunnel Authority Rev., NY, Unrefunded "A", MBIA,
5%, 2032 310,000 319,799
------------
$ 14,084,115
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Transportation - Special Metropolitan Transportation Authority Rev., NY, AMBAC, ETM,
Tax - 7.6% 5.75%, 2013 (c) $ 825,000 $ 892,122
Metropolitan Transportation Authority Rev., NY, Dedicated Tax Fund
Rev., 5.5%, 2015 (c) 750,000 833,070
Metropolitan Transportation Authority Rev., NY, ETM, 7.375%, 2008 (c) 1,095,000 1,141,943
Metropolitan Transportation Authority Rev., NY, FGIC, 5.875%, 2010 (c) 2,000,000 2,166,100
Metropolitan Transportation Authority Rev., NY, FGIC, 5%, 2025 2,500,000 2,597,475
Metropolitan Transportation Authority, NY, Commuter Facilities Rev.,
FGIC, 5.25%, 2011 (c) 1,000,000 1,074,620
New York Thruway Authority, General Rev., Highway & Bridges, "A",
FSA, 5.8%, 2010 (c) 20,000 21,740
New York Thruway Authority, General Rev., Highway & Bridges, "B-1",
FGIC, 5.4%, 2010 (c) 2,000,000 2,148,460
Puerto Rico Highway & Transportation Authority Rev., "Y", 5%, 2036 1,700,000 1,710,710
------------
$ 12,586,240
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Universities - Amherst, NY, Industrial Development Agency Rev. (Daemen College), "A",
Colleges - 4.6% 6%, 2021 $ 1,000,000 $ 1,065,030
Cattaraugus County, NY, Industrial Development Agency Rev. (Jamestown
Community College), "A", 6.4%, 2019 500,000 559,780
Hempstead Town, NY, Industrial Development Agency, Civic Facilities
Rev. (Hofstra University), MBIA, 5.8%, 2015 1,500,000 1,537,620
New York Dormitory Authority Rev. (Fordham University), AMBAC, 7.2%, 2015 40,000 40,081
New York Dormitory Authority Rev. (St. John's University), "A", MBIA,
5%, 2017 300,000 315,048
New York Dormitory Authority Rev. (Yeshiva University), AMBAC,
5.125%, 2034 1,000,000 1,055,240
Onondaga County, NY, Industrial Development Agency Rev. (Le Moyne
College), 5.625%, 2021 750,000 803,318
Schenectady, NY, Industrial Development Agency, Civic Facilities Rev.
(Union College), "A", AMBAC, 5%, 2032 2,000,000 2,068,560
Utica, NY, Industrial Development Agency, Civic Facilities Rev.
(Utica College), "A", 5.3%, 2008 110,000 111,179
------------
$ 7,555,856
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Universities - New York Dormitory Authority Rev. (New York University), "A", FGIC,
Dormitories - 0.6% 5%, 2029 $ 1,000,000 $ 1,041,720
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Utilities - Investor New York Environmental Facilities, Water Facilities Rev. (NY American
Owned - 1.5% Water Co.), 8.85%, 2015 $ 2,500,000 $ 2,507,525
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Utilities - Municipal
Owned - 3.3% Guam Power Authority Rev., RITES, "B-1", AMBAC, 6.565%, 2014 (z)(v) $ 500,000 $ 557,410
Long Island Power Authority, Electrical Systems Rev., "C", 5.5%, 2021 400,000 430,152
New York Power Authority Rev., 5.25%, 2040 3,000,000 3,148,620
New York Power Authority Rev., "A", 5%, 2021 1,000,000 1,048,660
Virgin Islands Water & Power Authority Rev., 5.5%, 2017 200,000 203,760
------------
$ 5,388,602
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Water & Sewer Utility New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
Revenue - 13.0% 5.5%, 2010 (c) $ 1,850,000 $ 1,997,038
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
"A", 5%, 2027 1,500,000 1,551,150
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
"A", ETM, 6%, 2010 (c) 620,000 675,899
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
"B", AMBAC, 5%, 2028 1,500,000 1,565,445
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
"C", 4.75%, 2033 1,500,000 1,511,970
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
AMBAC, ETM, 6.75%, 2014 (c) 1,000,000 1,152,370
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
FGIC, 5.25%, 2033 2,000,000 2,091,260
New York Environmental Facilities Corp., Clean Water & Drinking Rev.,
5%, 2024 1,005,000 1,048,004
New York Environmental Facilities Corp., Clean Water & Drinking Rev.,
5%, 2025 1,500,000 1,566,180
New York Environmental Facilities Corp., Clean Water & Drinking Rev.,
5%, 2029 2,000,000 2,085,880
New York Environmental Facilities Corp., Pollution Control Rev.,
5.75%, 2010 175,000 189,374
New York Environmental Facilities Corp., Pollution Control Rev.,
6.875%, 2010 220,000 220,396
New York Environmental Facilities Corp., Pollution Control Rev.,
7.25%, 2010 70,000 70,137
New York Environmental Facilities Corp., Pollution Control Rev., ETM,
5.75%, 2010 (c) 945,000 1,021,091
New York Environmental Facilities Corp., Pollution Control Rev., ETM,
5.75%, 2010 (c) 1,115,000 1,204,780
New York Environmental Facilities Corp., Water Facilities Rev., 6%, 2031 1,005,000 1,069,642
New York Environmental Facilities Corp., Water Facilities Rev.
(Spring Valley Water Co.), "B", AMBAC, 6.15%, 2024 1,500,000 1,513,950
Suffolk County, NY, Water Authority Rev., MBIA, 5.1%, 2012 660,000 706,292
Suffolk County, NY, Water Authority Rev., MBIA, ETM, 5.1%, 2012 (c) 235,000 252,150
------------
$ 21,493,008
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TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $151,369,624) $161,084,481
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Floating Rate Demand Notes - 1.1%
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Jefferson County, AL, Sewer Rev., Capital Improvement Warrants, "A",
3.22%, due 4/06/06 $ 250,000 $ 250,000
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
3.08%, due 4/03/06 700,000 700,000
Washington State Health Care Facilities, "A", 3.12%, due 4/03/06 900,000 900,000
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TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 1,850,000
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TOTAL INVESTMENTS (IDENTIFIED COST, $153,219,624) $162,934,481
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Other Assets, Less Liabilities - 1.6% 2,650,810
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NET ASSETS - 100.0% $165,585,291
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INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $3,000,000 Fixed - 3 Year Floating - 7 Day $ 41,200
BMA Swap Index (2.795%) BMA Index
- -------------------------------------------------------------------------------------------------------------------------------
6/06/16 USD 2,000,000 Fixed - 10 Year Floating - 7 Day 10,603
BMA Swap Index (3.938%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/16/16 USD 1,500,000 Fixed - 10 Year Floating - 7 Day 3,865
BMA Swap Index (3.977%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
7/13/16 USD 1,000,000 Fixed - 10 Year Floating - 7 Day 21,024
BMA Swap Index (3.742%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
8/30/16 USD 1,500,000 Fixed - 10 Year Floating - 7 Day 11,519
BMA Swap Index (3.926%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/22/18 USD 2,000,000 Fixed - 12 Year Floating - 7 Day 38,062
BMA Swap Index (3.861%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
8/02/21 USD 1,000,000 Fixed - 15 Year Floating - 7 Day 15,981
BMA Swap Index (4.011%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 1,650,000 Floating - 3 Month Fixed - 20 Year (25,569)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- -------------------------------------------------------------------------------------------------------------------------------
$116,685
========
At March 31, 2006, the fund had sufficient cash and/or securities to cover any
commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) NORTH CAROLINA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 98.1%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 5.3% Charlotte, NC, Airport Rev., "A", MBIA, 5%, 2029 $ 2,000,000 $ 2,075,040
Charlotte, NC, Airport Rev., "A", MBIA, 5%, 2034 4,485,000 4,628,296
Charlotte, NC, Airport Rev., "B", MBIA, 5.875%, 2019 1,000,000 1,064,840
Charlotte, NC, Airport Rev., "B", MBIA, 5.875%, 2020 3,775,000 4,016,223
Raleigh Durham, NC, Airport Authority Rev., "A", AMBAC, 5%, 2030 3,000,000 3,124,230
Raleigh Durham, NC, Airport Authority Rev., "A", FGIC, 5.25%, 2018 2,700,000 2,862,783
------------
$ 17,771,412
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General Obligations -
General Purpose - 1.0% Charlotte, NC, 5.5%, 2010 (c) $ 3,100,000 $ 3,369,948
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General Obligations -
Improvement - 1.4% New Hanover County, NC, Public Improvement, 5.8%, 2010 (c) $ 4,200,000 $ 4,636,926
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 3.8% Brunswick County, NC, FGIC, 5%, 2020 $ 2,800,000 $ 2,961,168
Cumberland County, NC, 5.8%, 2010 (c) 4,400,000 4,805,856
Johnston County, NC, FGIC, 5.6%, 2010 (c) 2,000,000 2,173,880
New Hanover County, NC, Public Improvement, 5%, 2021 1,435,000 1,499,790
New Hanover County, NC, School Improvement, 5%, 2019 1,255,000 1,327,301
------------
$ 12,767,995
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Healthcare Revenue - Catawba County, NC, Hospital Rev. (Catawba Memorial Hospital), AMBAC,
Hospitals - 22.8% 5%, 2017 $ 1,200,000 $ 1,242,816
Charlotte-Mecklenberg, NC, Healthcare Systems Rev. (Carolinas
Healthcare), "A", 5.125%, 2022 1,000,000 1,028,330
Charlotte-Mecklenberg, NC, Healthcare Systems Rev. (Carolinas
Healthcare), "A", 5%, 2031 3,500,000 3,577,210
Cumberland County, NC, Hospital Facilities Rev. (Cumberland
Hospital), MBIA, 0%, 2009 1,800,000 1,563,948
New Hanover County, NC, Hospital Rev. (New Hanover Regional Medical
Center), MBIA, 5%, 2019 6,225,000 6,412,310
North Carolina Medical Care Commission (Cleveland County Healthcare),
"A", AMBAC, 5%, 2035 1,305,000 1,343,080
North Carolina Medical Care Commission (Morehead Memorial Hospital),
FHA, 5%, 2026 2,000,000 2,078,280
North Carolina Medical Care Commission (Northeast Medical Center),
5.25%, 2029 2,000,000 2,082,540
North Carolina Medical Care Commission (Novant Health), "A", MBIA,
5%, 2018 1,975,000 2,038,753
North Carolina Medical Care Commission (Novant Health), Obligations
Group A, 5%, 2020 500,000 517,500
North Carolina Medical Care Commission, Health Care Facilities Rev.
(Wakemed), AMBAC, 5%, 2021 3,500,000 3,661,630
North Carolina Medical Care Commission, Hospital Rev. (Betsy Johnson
Health Care System), FSA, 5.125%, 2032 1,500,000 1,567,770
North Carolina Medical Care Commission, Hospital Rev. (Duke
University), "C", 5.25%, 2021 5,975,000 5,992,029
North Carolina Medical Care Commission, Hospital Rev. (Gaston
Memorial Hospital), 5.5%, 2015 5,790,000 5,938,687
North Carolina Medical Care Commission, Hospital Rev. (Gaston
Memorial Hospital), 5.5%, 2019 6,500,000 6,666,465
North Carolina Medical Care Commission, Hospital Rev. (Mission-St.
Joseph Health Systems), 5.5%, 2021 2,825,000 3,001,563
North Carolina Medical Care Commission, Hospital Rev. (Mission-St.
Joseph Health Systems), MBIA, 5.1%, 2018 1,500,000 1,550,505
North Carolina Medical Care Commission, Hospital Rev. (Pitt County
Memorial Hospital), "B", 5%, 2008 (c) 3,000,000 3,131,070
North Carolina Medical Care Commission, Hospital Rev. (Rex
Healthcare), AMBAC, 5%, 2017 5,000,000 5,152,100
North Carolina Medical Care Commission, Hospital Rev. (Southeastern
Regional Medical Center), 5.375%, 2032 3,330,000 3,436,427
North Carolina Medical Care Commission, Hospital Rev. (Wilson
Memorial Hospital), AMBAC, 0%, 2013 1,000,000 718,700
North Carolina Medical Care Commission, Hospital Rev. (Wilson
Memorial Hospital), AMBAC, 0%, 2015 1,140,000 739,712
Northern Hospital District Surry County, NC, Health Care Facilities
Rev., ASST GTY, 5.5%, 2019 1,250,000 1,308,338
Northern Hospital District Surry County, NC, Health Care Facilities
Rev., ASST GTY, 5.1%, 2021 1,000,000 1,037,420
Pitt County, NC, Rev., Pitt County Memorial Hospital, ETM,
5.25%, 2021 (c) 10,135,000 10,611,649
------------
$ 76,398,832
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Healthcare Revenue - North Carolina Medical Care Commission, Health Care Facilities Rev.
Long Term Care - 1.1% (Arbor Acres Community), 6.375%, 2032 $ 1,000,000 $ 1,037,840
North Carolina Medical Care Commission, Health Care Facilities Rev.
(Deerfield), "A", 5%, 2023 1,000,000 1,023,770
North Carolina Medical Care Commission, Health Care Facilities Rev.
(Givens Estates), 6.5%, 2032 800,000 836,848
North Carolina Medical Care Commission, Health Care Facilities Rev.,
"A", 6.125%, 2035 750,000 773,123
------------
$ 3,671,581
- ---------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.7% Cumberland County, NC, Finance Corp., Installment Payment Rev.
(Detention Center & Mental Health), AMBAC, 5.625%, 2019 $ 2,125,000 $ 2,250,885
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Virgin Islands Public Finance Authority, Refinery Facilities Rev.
Other - 0.3% (Hovensa Refinery), 5.875%, 2022 $ 860,000 $ 906,887
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Columbus County, NC, Industrial Facilities & Pollution Control
Paper - 2.3% Financing Authority Rev. (International Paper Co.), "A", 5.8%, 2016 $ 2,000,000 $ 2,072,840
Haywood County, NC, Industrial Facilities & Pollution Control
Financing Authority Rev. (Champion International Corp.), "A", 5.75%, 2025 5,400,000 5,446,980
------------
$ 7,519,820
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Charlotte, NC, Housing Authority Rev., Mortgage Rocky Branch II,
Revenue - 2.4% GNMA, 4.65%, 2035 $ 2,000,000 $ 1,940,560
Mecklenburg County, NC (Little Rock Apartments), FNMA, 5.15%, 2022 1,000,000 1,025,510
North Carolina Housing Finance Agency, "H", FHA, 6.05%, 2028 3,920,000 3,986,993
North Carolina Medical Care Commission, Health Care Facilities Rev.,
"A", 5.8%, 2034 1,000,000 1,052,900
------------
$ 8,005,963
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 6.1% North Carolina Housing Finance Agency Rev., "14-A", AMBAC, 4.35%, 2028 $ 3,070,000 $ 3,075,587
North Carolina Housing Finance Agency Rev., "15-A", FSA, 4.95%, 2032 435,000 436,357
North Carolina Housing Finance Agency Rev., "19-A", 5.1%, 2030 2,430,000 2,453,012
North Carolina Housing Finance Agency Rev., "22-A", 4.8%, 2026 2,000,000 2,007,960
North Carolina Housing Finance Agency Rev., "23-A", 4.8%, 2037 3,000,000 2,951,460
North Carolina Housing Finance Agency Rev., "5-A", 5.55%, 2019 3,080,000 3,140,892
North Carolina Housing Finance Agency Rev., "7-A", 6.15%, 2020 695,000 716,260
North Carolina Housing Finance Agency Rev., "A", 5.25%, 2020 1,430,000 1,439,052
North Carolina Housing Finance Agency Rev., "A", 5.375%, 2023 245,000 248,795
North Carolina Housing Finance Agency Rev., "PP", FHA, 6.15%, 2017 1,420,000 1,455,855
North Carolina Housing Finance Agency Rev., "RR", 5.85%, 2028 2,485,000 2,517,206
------------
$ 20,442,436
- ---------------------------------------------------------------------------------------------------------------------------------
State & Agency -
Other - 8.2% Brunswick County, NC, Certificates of Participation, FSA, 5.5%, 2020 $ 1,000,000 $ 1,078,480
Cabarrus County, NC, Installment Financing Contract, 5%, 2021 5,500,000 5,750,525
Carteret County, NC, AMBAC, 5.625%, 2020 1,010,000 1,080,377
Charlotte, NC, Certificates of Participation (Convention Facilities),
AMBAC, 0%, 2006 1,075,000 1,050,555
Charlotte, NC, Certificates of Participation (Convention Facilities),
AMBAC, 0%, 2008 3,000,000 2,708,250
Charlotte, NC, Certificates of Participation (Public Safety
Facilities), "D", 5.5%, 2010 (c) 3,000,000 3,235,440
Charlotte, NC, Certificates of Participation (Transit Projects), "E",
5%, 2035 1,990,000 2,045,820
Harnett County, NC, Certificates of Participation, FSA, 5.25%, 2015 1,020,000 1,116,033
Harnett County, NC, Certificates of Participation, FSA, 5.5%, 2016 1,225,000 1,315,711
Pitt County, NC, Certificates of Participation (School Facilities
Improvement), "A", FSA, 5.5%, 2020 1,250,000 1,326,788
Pitt County, NC, Certificates of Participation (School Facilities
Improvement), "B", FSA, 5.75%, 2018 1,390,000 1,501,937
Pitt County, NC, Certificates of Participation (School Facilities
Improvement), "B", FSA, 5.75%, 2019 1,390,000 1,500,866
Randolph County, NC, Certificates of Participation, FSA, 5.6%, 2009 (c) 3,000,000 3,201,330
Rockingham, NC, Certificates of Participation, AMBAC, 5.125%, 2024 350,000 371,389
------------
$ 27,283,501
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies -
5.6% Cabarrus County, NC, Development Corp., AMBAC, 5.3%, 2019 $ 1,250,000 $ 1,322,425
Forsyth County, NC, Certificates of Participation (Public Facilities
& Equipment Project), 5.25%, 2013 (c) 775,000 842,402
Forsyth County, NC, Certificates of Participation (Public Facilities
& Equipment Project), 5.25%, 2013 (c) 1,230,000 1,336,973
Iredell County, NC, Public Facilities (School Projects), AMBAC,
5.5%, 2010 (c) 1,000,000 1,078,480
New Hanover County, NC, Certificates of Participation (New Hanover
County Projects), AMBAC, 5.25%, 2011 (c) 1,635,000 1,770,362
Puerto Rico Housing Bank & Finance Agency (Kidder), 7.5%, 2006 7,000,000 7,138,110
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.535%, 2016 (z)(v) 1,500,000 1,820,220
Rutherford County, NC, Certificates of Participation (Rutherford
County School), AMBAC, 5%, 2023 840,000 879,598
Winston Salem, NC, Certificates of Participation, "C", 5%, 2018 2,575,000 2,686,446
------------
$ 18,875,016
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.8% Virgin Islands Public Finance Authority Rev., "A", 5.5%, 2022 $ 1,650,000 $ 1,709,912
Virgin Islands Public Finance Authority Rev., ASST GTY, 5.5%, 2018 1,000,000 1,050,330
------------
$ 2,760,242
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.6% Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 $ 1,820,000 $ 1,865,700
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, "A",
0%, 2050 2,000,000 130,800
------------
$ 1,996,500
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico, Highway & Transportation Authority Rev.,
Tax - 2.2% RITES, FSA, 8.076%, 2018 (z)(v) $ 5,425,000 $ 7,335,251
- ---------------------------------------------------------------------------------------------------------------------------------
Universities -
Colleges - 10.0% Appalachian State University, NC, "A", FGIC, 5.125%, 2022 $ 1,260,000 $ 1,338,561
Appalachian State University, NC, Rev., "C", MBIA, 5%, 2030 1,000,000 1,043,690
Appalachian State University, NC, Rev., FSA, 5.6%, 2010 (c) 2,285,000 2,473,764
East Carolina University, NC, Rev., "A", AMBAC, 5.25%, 2021 1,375,000 1,472,254
North Carolina Capital Facilities, Finance Agency Rev. (Duke
University), "A", 5%, 2041 2,000,000 2,057,840
North Carolina Capital Facilities, Finance Agency Rev. (Duke
University), "A", 5.125%, 2041 5,000,000 5,145,550
North Carolina Capital Facilities, Finance Agency Rev. (Duke
University), "A", 5.25%, 2042 2,000,000 2,092,760
North Carolina Capital Facilities, Finance Agency Rev. (High Point
University), 5.125%, 2018 510,000 536,658
North Carolina Capital Facilities, Finance Agency Rev. (High Point
University), 5.125%, 2021 300,000 315,084
North Carolina Capital Facilities, Finance Agency Rev. (Johnson &
Wales University), "A", XLCA, 5.25%, 2021 775,000 829,653
North Carolina Capital Facilities, Finance Agency Rev. (Johnson &
Wales University), "A", XLCA, 5.25%, 2022 1,870,000 1,998,357
North Carolina Capital Facilities, Finance Agency Rev. (Johnson &
Wales University), "A", XLCA, 5%, 2033 3,385,000 3,481,439
Puerto Rico Industrial Tourist Authority (University Plaza), "A",
MBIA, 5%, 2020 2,180,000 2,270,993
University of North Carolina, Greensboro Rev., "A", FSA, 5%, 2020 2,835,000 2,969,266
University of North Carolina, Systems Pool Rev., "C", AMBAC, 5%, 2029 2,000,000 2,076,000
University of North Carolina, University Rev., 5%, 2028 2,000,000 2,081,120
University of North Carolina, Wilmington Rev., "A", AMBAC, 5%, 2019 1,375,000 1,441,358
------------
$ 33,624,347
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Wake County, NC, Industrial Facilities & Pollution Control Rev.
Owned - 0.8% (Carolina Power & Light Co.), 5.375%, 2017 $ 2,500,000 $ 2,631,400
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 13.6% North Carolina Eastern Municipal Power Agency, "A", ETM, 7.5%, 2010 (c) $ 2,595,000 $ 2,939,071
North Carolina Eastern Municipal Power Agency, "A", ETM, 5%, 2017 (c) 3,120,000 3,354,094
North Carolina Eastern Municipal Power Agency, "A", MBIA, 7.5%, 2010 3,005,000 3,394,478
North Carolina Eastern Municipal Power Agency, "B", MBIA, 7.25%, 2007 5,000,000 5,133,700
North Carolina Eastern Municipal Power Agency, AMBAC, 6%, 2018 1,245,000 1,448,408
North Carolina Eastern Municipal Power Agency, RITES, AMBAC,
8.042%, 2018 (z)(v) 6,500,000 8,623,940
North Carolina Municipal Power Agency, Catawba Electric Rev.,
6.375%, 2013 1,000,000 1,087,360
North Carolina Municipal Power Agency, Catawba Electric Rev., MBIA,
7%, 2007 5,000,000 5,124,700
North Carolina Municipal Power Agency, Catawba Electric Rev., MBIA,
6%, 2011 5,000,000 5,488,500
North Carolina Municipal Power Agency, Catawba Electric Rev., ROLS,
MBIA, 7.236%, 2019 (z)(v) 5,000,000 5,652,300
North Carolina Municipal Power Agency, Catawba Electric Rev., ROLS,
MBIA, 7.236%, 2020 (z)(v) 3,000,000 3,384,120
------------
$ 45,630,671
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 9.1% Broad River, NC, Water Authority Rev., MBIA, 5.75%, 2010 (c) $ 1,490,000 $ 1,621,180
Cary, NC, Combined Enterprise Systems Rev., 5%, 2026 1,000,000 1,038,320
Charlotte, NC, Storm Water Fee Rev., 6%, 2010 (c) 3,180,000 3,490,336
Charlotte, NC, Storm Water Fee Rev., 5%, 2034 3,675,000 3,806,675
Charlotte, NC, Water & Sewer Systems Rev., 5.75%, 2009 (c) 2,000,000 2,143,080
Charlotte, NC, Water & Sewer Systems Rev., 5.75%, 2010 (c) 3,075,000 3,345,723
Charlotte, NC, Water & Sewer Systems Rev., 5.5%, 2017 1,650,000 1,771,242
Durham County, NC, Enterprise Systems Rev., MBIA, 5%, 2023 1,675,000 1,758,047
Greensboro, NC, Enterprise Systems Rev., "A", 5.125%, 2018 1,490,000 1,575,899
Greensboro, NC, Enterprise Systems Rev., "A", 5.125%, 2019 1,750,000 1,848,368
Greenville, NC, Combined Enterprise Systems Rev., FSA, 5%, 2016 1,005,000 1,061,260
Greenville, NC, Combined Enterprise Systems Rev., FSA, 5.25%, 2019 1,170,000 1,256,358
Harnett County, NC, Water & Sewer Systems Rev., AMBAC, 5%, 2028 700,000 728,483
Kannapolis, NC, Water & Sewer Rev., "B", FSA, 5.25%, 2021 1,000,000 1,051,370
Raleigh, NC, Combined Enterprise Systems Rev., 5.125%, 2007 (c) 2,000,000 2,066,500
Raleigh, NC, Combined Enterprise Systems Rev., 5%, 2024 385,000 403,938
Winston Salem, NC, Water & Sewer Systems Rev., 5%, 2033 1,600,000 1,664,264
------------
$ 30,631,043
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $310,088,695) $328,510,656
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.0%
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "B", 3.22%, due 4/06/06, at
Identified Cost $ 100,000 $ 100,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $310,188,695) $328,610,656
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.9% 6,346,043
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $334,956,699
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $7,000,000 Fixed - 3 Year Floating - 7 Day $ 96,106
BMA Swap Index (2.795%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/16/16 USD 2,500,000 Fixed - 10 Year Floating - 7 Day 6,440
BMA Swap Index (3.977%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
7/13/16 USD 2,500,000 Fixed - 10 Year Floating - 7 Day 52,560
BMA Swap Index (3.742%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/22/18 USD 3,000,000 Fixed - 12 Year Floating - 7 Day 57,092
BMA Swap Index (3.861%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
8/02/21 USD 3,000,000 Fixed - 15 Year Floating - 7 Day 47,944
BMA Swap Index (4.011%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 3,300,000 Floating - 3 Month Fixed - 20 Year (51,138)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- -------------------------------------------------------------------------------------------------------------------------------
$209,004
========
At March 31, 2006, the fund had sufficient cash and/or securities to cover any
commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) PENNSYLVANIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 97.4%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port Allegheny County PA, Airport Rev. (Pittsburgh International Airport),
Revenue - 2.1% FGIC, 6.125%, 2017 $ 500,000 $ 533,645
Allegheny County PA, Airport Rev. (Pittsburgh International Airport),
MBIA, 5.75%, 2014 1,000,000 1,085,610
Susquehanna Area Regional Airport, 5.375%, 2018 200,000 204,344
Susquehanna Area Regional Airport, AMBAC, 5.375%, 2023 500,000 525,155
------------
$ 2,348,754
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 7.6% Allegheny County, PA, Unrefunded Balance, "C53", FGIC, 5.3%, 2018 $ 285,000 $ 302,972
Allegheny County, PA, Unrefunded Balance, "C53", FGIC, 5.4%, 2019 290,000 309,198
Beaver County, PA, MBIA, 5.75%, 2006 (c) 250,000 252,823
Bedford County PA, "N", AMBAC, 5%, 2028 1,000,000 1,044,980
Commonwealth of Puerto Rico, ROLS, FGIC, 7.763%, 2015 (z)(v) 1,000,000 1,224,780
Commonwealth of Puerto Rico, ROLS, XLCA, 7.693%, 2017 (z)(v) 1,000,000 1,227,100
Erie County, PA, Convention Center, FGIC, 5%, 2025 500,000 521,985
Erie County, PA, Convention Center, FGIC, 5%, 2026 500,000 520,875
Luzerne County, PA, MBIA, 5.25%, 2025 500,000 528,825
North Huntingdon Township, PA, AMBAC, 5.25%, 2019 500,000 534,775
Pennsylvania, 6%, 2010 (c) 1,000,000 1,090,150
Pennsylvania, 6.25%, 2010 300,000 329,613
Pennsylvania State Finance Authority Rev. (Penn Hills), "A", FGIC,
5.45%, 2010 (c) 85,000 91,266
Pennsylvania State Finance Authority Rev. (Penn Hills), "A", FGIC,
5.45%, 2019 415,000 441,058
------------
$ 8,420,400
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 0.5% Pittsburgh, PA, FGIC, 5.75%, 2009 (c) $ 500,000 $ 533,320
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 21.6% Allegheny Valley, PA, School District, "A", MBIA, 5%, 2028 $ 1,000,000 $ 1,041,700
Ambridge, PA, Area School District, MBIA, 5%, 2034 750,000 778,028
Butler, PA, School District, FGIC, 5.375%, 2018 500,000 519,980
Chambersburg, PA, School District, FSA, 5%, 2011 (c) 500,000 529,950
Chester County, PA, School Authority (School Intermediate Unit
Project), "N", AMBAC, 5%, 2025 750,000 785,190
Downingtown, PA, School District, AMBAC, 5.65%, 2008 (c) 500,000 523,165
Exeter Township, PA, School District, FGIC, 5%, 2025 1,000,000 1,042,350
Garnet Valley, PA, School District, FGIC, 5.5%, 2015 750,000 813,540
Gateway, PA, Allegheny School District, FGIC, 5.2%, 2023 1,000,000 1,063,960
Gateway, PA, Allegheny School District, FGIC, 5%, 2032 1,890,000 1,955,848
North Allegheny, PA, School District, FGIC, 5.05%, 2022 590,000 611,700
North Pocono, PA, School District, FGIC, 5%, 2013 (c) 500,000 533,165
North Schuylkill, PA, School District, FGIC, 5%, 2028 650,000 670,319
Palmyra, PA, School District, FGIC, 5.375%, 2016 820,000 882,976
Pennridge, PA, School District, MBIA, 5%, 2020 500,000 523,300
Pennridge, PA, School District, MBIA, 5%, 2021 500,000 522,695
Pennsylvania Public School Building (Garnet Valley School District),
AMBAC, 5.5%, 2011 (c) 1,005,000 1,083,249
Perkiomen Valley, PA, School District, "A", FSA, 5.25%, 2028 1,000,000 1,058,250
Perkiomen Valley, PA, School District, FSA, 5%, 2011 (c) 280,000 295,926
Perkiomen Valley, PA, School District, FSA, 5%, 2013 (c) 1,000,000 1,066,720
Perkiomen Valley, PA, School District, FSA, 5%, 2019 220,000 230,228
Perkiomen Valley, PA, School District, FSA, 5%, 2025 1,260,000 1,309,669
Philadelphia, PA, School District, AMBAC, 5.375%, 2007 (c) 500,000 508,790
Philadelphia, PA, School District, FSA, 5.75%, 2011 (c) 500,000 544,400
Philadelphia, PA, School District, MBIA, 6%, 2010 (c) 500,000 541,065
South Park, PA, School District, FGIC, 5%, 2019 750,000 778,673
Southeastern Area, PA, Special Schools Authority Rev., 0%, 2007 360,000 341,024
State Public School Building Authority, Pennsylvania School (Colonial
Intermediate Unit 20), FGIC, 5%, 2030 500,000 521,150
State Public School Building Authority, Pennsylvania School (Lease
Philadelphia School District), FSA, 5.25%, 2024 1,000,000 1,063,620
State Public School Building Authority, Pennsylvania School
(Tuscarora School District), FSA, 5%, 2013 (c) 1,000,000 1,066,720
State Public School Building Authority, Pennsylvania School
(Wattsburg School District), MBIA, 0%, 2027 2,150,000 788,233
------------
$ 23,995,583
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Allegheny County, PA, Hospital Development Authority Rev. (South
Hospitals - 11.5% Hills Health System), MBIA, 5.8%, 2016 $ 500,000 $ 510,695
Allegheny County, PA, Hospital Development Authority Rev. (South
Hills Health Systems), "B", 6.75%, 2025 555,000 583,066
Allegheny County, PA, Hospital Development Authority Rev. (UPMC
Health Systems), MBIA, 5%, 2018 500,000 516,855
Allegheny County, PA, Hospital Development Authority Rev. (West Penn
Allegheny Health), 9.25%, 2030 150,000 179,093
Allegheny County, PA, Hospital Development Authority Rev. (West Penn
Allegheny Health), "B", 9.25%, 2022 50,000 59,698
Blair County, PA, Hospital Authority Rev. (Altoona), AMBAC, 5.5%, 2008 470,000 488,194
Erie County, PA, Hospital Authority Rev. (Hamot Health Foundation),
AMBAC, 5.25%, 2017 675,000 720,104
Lancaster County, PA, Hospital Authority Rev., 5.5%, 2026 500,000 527,435
Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan
Hospital), 5%, 2018 200,000 202,516
Lebanon County, PA, Health Facilities Authority Rev. (Good Samaritan
Hospital), 6%, 2035 350,000 373,629
Lehigh County, PA, General Purpose Authority (Good Shepherd Group),
"A", 5.625%, 2034 350,000 368,074
Lehigh County, PA, General Purpose Authority (Lehigh Valley
Hospital), 5.25%, 2032 600,000 616,308
Lehigh County, PA, General Purpose Authority (Lehigh Valley
Hospital), MBIA, 7%, 2016 250,000 292,598
Lehigh County, PA, General Purpose Authority (St. Luke's Bethlehem
Hospital), 5.375%, 2033 600,000 617,394
Lehigh County, PA, Hospital Rev. (Lehigh Valley Hospital), FSA,
5.25%, 2019 500,000 530,630
Lycoming County, PA, Authority Hospital Rev. (Williamsport Hospital
Obligation Group), CONNIE LEE, 5.375%, 2010 750,000 766,560
Monroe County, PA, Hospital Authority Rev. (Pocono Medical Center),
6%, 2043 750,000 790,200
Mount Lebanon, PA, Hospital Authority Rev. (St. Clair Memorial
Hospital), 5.625%, 2032 400,000 416,484
Pennsylvania Higher Educational Facilities Authority Rev. (UPMC
Health), 6.25%, 2018 100,000 110,013
Pennsylvania Higher Educational Facilities Authority Rev. (UPMC
Health), 6%, 2031 650,000 706,043
Philadelphia, PA, Health & Educational Facilities Rev. (Jeane
Health), 6.6%, 2010 140,000 148,058
Philadelphia, PA, Health & Educational Facilities Rev. (Temple
University), 6.625%, 2023 250,000 250,925
Sayre, PA, Health Care Facilities Authority Rev. (Guthrie Health),
5.875%, 2031 500,000 531,155
Sayre, PA, Health Care Facilities Authority Rev. (Latrobe Hospital),
AMBAC, 5.25%, 2015 585,000 630,004
South Central, PA, General Authority Rev., 5.625%, 2011 (c) 490,000 535,923
South Central, PA, General Authority Rev.. Wellspan Health, ETM,
5.625%, 2026 (c) 110,000 119,051
St. Mary's Hospital Authority, PA, Health Systems Rev. (Catholic
Health East), "B", 5.375%, 2034 750,000 788,183
West Shore, PA, Hospital Authority (Holy Spirit Hospital), 6.25%, 2032 350,000 372,278
------------
$ 12,751,166
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Bucks County, PA, Industrial Development Authority Rev. (Ann's
Long Term Care - 1.2% Choice, Inc.), 6.125%, 2025 $ 250,000 $ 255,295
Clarion, PA, Industrial Development Authority Rev. (Beverly
Enterprises, Inc.), 7.5%, 2012 150,000 152,130
Cumberland County, PA, Municipal Authority Rev. (Wesley), "A",
7.25%, 2013 (c) 110,000 131,768
Cumberland County, PA, Municipal Authority Rev. (Wesley), "A",
7.25%, 2035 40,000 42,718
Lancaster County, PA, Hospital Authority Rev. (Willow Valley
Retirement Project), 5.875%, 2031 500,000 521,035
Montgomery County, PA, Industrial Development Authority Rev.
(Whitemarsh Continuing Care), 6.25%, 2035 250,000 262,675
------------
$ 1,365,621
- ---------------------------------------------------------------------------------------------------------------------------------
Human Services - 0.1% Montgomery County, PA, Industrial Development Authority (Wordsworth
Academy), 8%, 2024 $ 150,000 $ 150,596
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - New Morgan, PA, Industrial Development Authority, Solid Waste
Environmental Services - Disposal Rev. (New Morgan Landfill Co., Inc./Browning Ferris, Inc.),
1.0% 6.5%, 2019 $ 530,000 $ 532,767
Westmoreland County, PA, Industrial Development Corp. (Waste
Management), LOC, 5.1%, 2018 500,000 512,250
------------
$ 1,045,017
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Bucks County, PA, Industrial Development Authority Rev. (USX Corp.),
Other - 1.7% 5.4%, 2017 $ 300,000 $ 318,051
Pennsylvania Economic Development Financing Authority Rev. (Amtrak),
6.125%, 2021 150,000 158,846
Pennsylvania Economic Development Financing Authority, Solid Waste
Disposal Rev. (Procter & Gamble), 5.375%, 2031 1,000,000 1,098,410
Virgin Islands Public Finance Authority, Refinery Facilities Rev.
(Hovensa Refinery), 5.875%, 2022 270,000 284,720
------------
$ 1,860,027
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Erie County, PA, Industrial Development Authority, Pollution Control
Paper - 0.6% (International Paper Co.), "A", 5.3%, 2012 $ 650,000 $ 674,960
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Other - 0.1% Gallery Certificate Trust, PA, Parking Rev., FSA, 4.5%, 2013 $ 150,000 $ 148,077
- ---------------------------------------------------------------------------------------------------------------------------------
Parking - 1.9% Philadelphia, PA, Public Parking Authority Rev., FSA, 5.625%, 2015 $ 1,000,000 $ 1,065,880
Pittsburgh, PA, Public Parking Authority Rev., "A", FGIC, 5%, 2025 500,000 517,790
Pittsburgh, PA, Public Parking Authority Rev., AMBAC, 6%, 2020 500,000 544,495
------------
$ 2,128,165
- ---------------------------------------------------------------------------------------------------------------------------------
Sales & Excise Tax Pittsburgh & Allegheny County, PA, Sales Tax Rev. (Public Auditorium
Revenue - 0.5% Hotel Room), AMBAC, 5.25%, 2017 $ 500,000 $ 525,530
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Allegheny County, PA, Residential Financing Authority, Single Family
Local - 0.5% Mortgage Rev., "RR", 4.75%, 2025 $ 375,000 $ 366,574
Pittsburgh, PA, Urban Development Authority Mortgage Rev., 5.5%, 2010 225,000 226,942
------------
$ 593,516
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., 5%,
State - 4.1% 2014 $ 500,000 $ 507,620
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5.1%, 2020 1,405,000 1,417,420
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5.25%, 2021 750,000 754,163
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
5.25%, 2033 555,000 563,331
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev., 5%,
2034 835,000 851,141
Pennsylvania Housing Finance Agency, Single Family Mortgage Rev.,
"A", 4.875%, 2026 500,000 498,985
------------
$ 4,592,660
- ---------------------------------------------------------------------------------------------------------------------------------
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 $ 313,554
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies - Delaware Valley, PA, Regional Finance Authority, RITES, AMBAC,
3.7% 7.624%, 2018 (v) $ 500,000 $ 591,750
Northumberland County, PA (Country Careers & Arts Center), 6.65%, 2020 245,000 250,030
Pennsylvania Industrial Development Authority, Economic Development,
AMBAC, 7%, 2007 300,000 307,437
Philadelphia, PA, Industrial Development Authority, FSA, 5.125%, 2026 1,000,000 1,045,700
Philadelphia, PA, Industrial Development Authority, FSA, 5.25%, 2030 750,000 780,060
Philadelphia, PA, Industrial Development Authority, MBIA, 5.35%, 2012 500,000 517,160
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2013 (z)(v) 500,000 591,270
------------
$ 4,083,407
- ---------------------------------------------------------------------------------------------------------------------------------
Student Loan Revenue -
1.4% Pennsylvania Higher Education, Capital Acquistion Rev., MBIA, 5%, 2026 $ 1,500,000 $ 1,546,245
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.6% Pittsburgh & Allegheny County, PA, Sales Tax Rev. (Public Auditorium
Hotel Room), AMBAC, 5.25%, 2013 $ 500,000 $ 526,975
Virgin Islands Public Finance Authority Rev., "A", 5.25%, 2024 135,000 140,243
------------
$ 667,218
- ---------------------------------------------------------------------------------------------------------------------------------
Tax Assessment - 0.3% Allegheny County, PA, Redevelopment Authority Rev. (Pittsburgh
Mills), 5.6%, 2023 $ 350,000 $ 366,051
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.4% Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico,
5.375%, 2033 $ 320,000 $ 328,035
Virgin Islands Tobacco Settlement Financing Corp., 5%, 2021 150,000 151,137
------------
$ 479,172
- ---------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 0.3% Pennsylvania Turnpike Commission, 5.5%, 2015 $ 250,000 $ 268,130
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Allegheny County, PA, Port Authority Special Rev., MBIA,
Tax - 5.8% 6.25%, 2009 (c) $ 500,000 $ 540,300
Commonwealth of Puerto Rico Highway & Transportation Authority, "Y",
5.5%, 2036 1,020,000 1,090,778
Commonwealth of Puerto Rico Highway & Transportation Authority, ROLS,
MBIA, 7.763%, 2020 (z)(v) 1,500,000 1,911,120
Pennsylvania Turnpike Commission, MBIA, 5%, 2024 1,775,000 1,854,041
Southeastern Pennsylvania Transportation Authority, Special Rev.,
FGIC, 5.25%, 2013 500,000 525,075
Southeastern Pennsylvania Transportation Authority, Special Rev.,
FGIC, 5.375%, 2017 500,000 517,640
------------
$ 6,438,954
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges -
13.7% Allegheny County, PA, (Chatham College), 5.95%, 2032 $ 335,000 $ 354,239
Allegheny County, PA, Higher Education Building Authority Rev.
(Duquesne University), "A", XLCA, 5%, 2024 1,000,000 1,051,000
Cumberland County, PA, Municipal Authority (Dickinson College),
AMBAC, 5.55%, 2017 535,000 569,780
Lycoming County, PA, (College of Technology), AMBAC, 5.25%, 2032 750,000 781,598
Pennsylvania Higher Educational Facilities Authority Rev. (Clarion
University Foundation), XLCA, 5%, 2023 1,000,000 1,044,350
Pennsylvania Higher Educational Facilities Authority Rev. (Drexel
University), 5.2%, 2032 500,000 523,470
Pennsylvania Higher Educational Facilities Authority Rev. (Drexel
University), MBIA, 5%, 2028 750,000 782,768
Pennsylvania Higher Educational Facilities Authority Rev.
(Independent Colleges & Universities), FGIC, 5%, 2024 1,000,000 1,046,590
Pennsylvania Higher Educational Facilities Authority Rev. (Marywood
University), MBIA, 5.5%, 2018 (c) 300,000 320,967
Pennsylvania Higher Educational Facilities Authority Rev. (Mercyhurst
College), "B", 5%, 2023 500,000 503,900
Pennsylvania Higher Educational Facilities Authority Rev. (Widener
University), 5.375%, 2029 300,000 313,653
Pennsylvania Higher Educational Facilities Authority Rev. (Widener
University), 5%, 2031 300,000 303,084
Pennsylvania Public School Building Authority (Delaware County
College), MBIA, 5.75%, 2016 500,000 539,675
Pennsylvania State Higher Educational Facilities (Allegheny College),
4.75%, 2031 500,000 492,060
Pennsylvania State Higher Educational Facilities (Philadelphia
University), 5.5%, 2020 500,000 520,090
Pennsylvania State Higher Educational Facilities Authority, "C",
4.5%, 2030 1,000,000 972,570
Pennsylvania State Public School Building Authority, Montgomery
County Community College, AMBAC, 5%, 2025 500,000 524,515
Pennsylvania State University, 5%, 2029 1,400,000 1,460,788
Pennsylvania State University, "A", 5%, 2029 1,000,000 1,039,600
State Public School Building Authority, PA, Jefferson County (Dubois
Technical School), FGIC, 5%, 2026 1,000,000 1,043,500
Union County, PA, Higher Educational Facilities Financing Authority,
University Rev. (Bucknell University), 5.25%, 2021 1,000,000 1,061,160
------------
$ 15,249,357
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Pennsylvania Economic Development Financing Authority (Germantown
Dormitories - 0.6% Friends School Project), 5.35%, 2031 $ 600,000 $ 629,550
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Carbon County, PA, Industrial Development Authority Rev. (Panther
Cogeneration - 0.3% Creek Partners), 6.65%, 2010 $ 110,000 $ 116,091
Pennsylvania Economic Development Financing Authority Rev., Resources
Recovery Rev. (Colver), "G", 5.125%, 2015 100,000 97,694
Pennsylvania Economic Development Financing Authority Rev., Resources
Recovery Rev. (Northampton Generating), 6.4%, 2009 150,000 149,118
------------
$ 362,903
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Lehigh County, PA, Industrial Development Authority Pollution Control
Owned - 1.1% Rev. (PPL Electric Utilities Corp.), "A", FGIC, 4.7%, 2029 $ 500,000 $ 497,170
Lehigh County, PA, Industrial Development Authority Rev. (PPL
Electric Utilities Corp.), FGIC, 4.75%, 2027 750,000 752,648
------------
$ 1,249,818
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 4.6% Guam Power Authority Rev., RITES, AMBAC, 6.565%, 2014 (z)(v) $ 2,170,000 $ 2,419,159
Philadelphia, PA, Gas Works Rev. (1998 General Ordinance), FSA,
5.25%, 2020 1,000,000 1,059,720
Philadelphia, PA, Gas Works Rev., FSA, 5.5%, 2009 (c) 1,000,000 1,064,870
Philadelphia, PA, Gas Works Rev., FSA, 5.5%, 2011 (c) 500,000 541,330
------------
$ 5,085,079
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 9.3% Allegheny County, PA, Sewer Rev., MBIA, 5.75%, 2010 (c) $ 750,000 $ 814,440
Bucks County, PA, (Suburban Water Co.), FGIC, 5.55%, 2032 1,000,000 1,054,940
Delaware County, PA, Water Quality Control Authority, Sewer Rev.,
FGIC, 5%, 2018 750,000 778,380
Fairview Township, PA, Sewer Rev., FGIC, 5.05%, 2018 750,000 782,115
Johnstown, PA, Redevelopment Authority, Sewer Rev., "A", FSA, 5%, 2034 1,500,000 1,554,870
Lancaster County, PA, Water & Sewer Authority Rev., MBIA, 5%, 2028 440,000 457,318
Unity Township, PA, Municipal Authority Sewer Rev., FSA, 5%, 2034 1,660,000 1,722,482
University Area Joint Authority, Sewer Rev., MBIA, 5%, 2023 1,500,000 1,552,995
Virgin Islands Water & Power Authority Rev., ASST GTY, 5.3%, 2018 500,000 521,065
Westmoreland County, PA, Municipal Authority Services Rev., FSA,
5.25%, 2026 1,000,000 1,070,922
------------
$ 10,309,527
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $104,246,535) $108,182,357
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.8%
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "B", 3.22%, due 4/06/06 $ 400,000 $ 400,000
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "D", 3.22%, due 4/06/06 500,000 500,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 900,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $105,146,535) $109,082,357
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.8% 1,989,195
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $111,071,552
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $2,000,000 Fixed - 3 Year Floating - 7 Day $ 27,467
BMA Swap Index (2.795%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/06/16 USD 4,000,000 Fixed - 10 Year Floating - 7 Day 21,206
BMA Swap Index (3.938%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
8/30/16 USD 2,000,000 Fixed - 10 Year Floating - 7 Day 15,359
BMA Swap Index (3.926%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/15/18 USD 2,000,000 Fixed - 12 Year Floating - 7 Day 10,528
BMA Swap Index (4.019%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/22/18 USD 2,000,000 Fixed - 12 Year Floating - 7 Day 38,062
BMA Swap Index (3.861%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
8/02/21 USD 1,000,000 Fixed - 15 Year Floating - 7 Day 15,981
BMA Swap Index (4.011%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 1,100,000 Floating - 3 Month Fixed - 20 Year (17,046)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- -------------------------------------------------------------------------------------------------------------------------------
$111,557
========
At March 31, 2006, the fund had sufficient cash and/or securities to cover any
commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) SOUTH CAROLINA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 97.7%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port
Revenue - 3.1% Horry County, SC, "A", FSA, 5.7%, 2027 $ 2,250,000 $ 2,280,260
Richland Lexington, SC, Airport Rev. (Columbia Airport), "A", FSA,
5%, 2026 1,000,000 1,025,990
Richland Lexington, SC, Airport Rev. (Columbia Airport), FSA,
5.125%, 2025 1,500,000 1,549,485
------------
$ 4,855,735
- ---------------------------------------------------------------------------------------------------------------------------------
Chemicals - 0.5% York County, SC, Industrial Rev., Exempt Facilities Hoechst Celanese,
5.7%, 2024 $ 850,000 $ 831,530
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 6.2% Commonwealth of Puerto Rico, RITES, ETM, 7.099%, 2018 (z)(c)(v) $ 2,000,000 $ 2,310,400
Commonwealth of Puerto Rico, RITES, ETM, 7.099%, 2019 (z)(c)(v) 1,750,000 2,018,590
Commonwealth of Puerto Rico, RITES, MBIA, 7.599%, 2020 (z)(v) 2,000,000 2,308,960
Hilton Head Island, SC, Rev., MBIA, 5.125%, 2022 1,000,000 1,059,720
Horry County, SC, Hospital Fee Special Obligation, 6%, 2015 915,000 994,953
Richard Lexington Riverbanks, SC, Parks District, FGIC, 5.8%, 2018 1,000,000 1,065,730
------------
$ 9,758,353
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 1.3% Beaufort County, SC, FGIC, 5.25%, 2018 $ 1,000,000 $ 1,047,120
Commonwealth of Puerto Rico, RITES, FSA, 8.108%, 2016 (z)(v) 850,000 991,678
------------
$ 2,038,798
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 10.1% Anderson County, SC, School District, "B", 5.5%, 2018 $ 1,465,000 $ 1,560,606
Berkeley County, SC, School District, 5%, 2008 (c) 2,000,000 2,091,720
Chesterfield County, SC, School District, FSA, 5%, 2023 3,000,000 3,127,440
Darlington County, SC, School District, FSA, 5%, 2027 2,770,000 2,905,813
Jasper County, SC, School District, MBIA, 5.25%, 2024 1,000,000 1,071,930
Orangeburg County, SC, Consolidated School District, FSA, 5.25%, 2020 1,065,000 1,133,213
Orangeburg County, SC, Consolidated School District, FSA, 5.375%, 2022 2,050,000 2,204,447
Richland County, SC, School District, 5.1%, 2021 1,750,000 1,844,868
------------
$ 15,940,037
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Charleston County, SC, Hospital Facilities Rev. (Medical Society
Hospitals - 20.6% Health), MBIA, ETM, 5%, 2022 (c) $ 2,450,000 $ 2,465,141
Florence County, SC, Hospital Rev. (McLeod Regional Medical Center),
"A", FSA, 5%, 2031 2,000,000 2,071,840
Florence County, SC, Hospital Rev. (McLeod Regional Medical Center),
"A", FSA, 5.25%, 2034 2,000,000 2,105,640
Greenville, SC, Hospital Systems, Hospital Facilities Rev., 6%, 2020 3,400,000 3,915,304
Greenwood County, SC, Hospital Facilities Rev. (Self Memorial
Hospital), 5.5%, 2021 1,000,000 1,034,880
Lexington County, SC, Health Services District, Inc., 5.5%, 2032 250,000 263,640
Lexington County, SC, Health Services District, Inc., 5.5%, 2037 250,000 262,783
Lexington County, SC, Health Services District, Inc., Hospital Rev.,
Refunding & Improvement, 5.5%, 2032 1,000,000 1,051,740
Lexington County, SC, Health Services District, Inc., Hospital Rev.,
Refunding & Improvement, FSA, 5.125%, 2021 1,500,000 1,562,190
South Carolina Jobs & Economic Development Authority Rev. (Bon
Secours Health Systems, Inc.), "A", 5.625%, 2030 1,250,000 1,306,325
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Anderson Area Medical Center, Inc.), MBIA, 5.25%, 2015 1,750,000 1,788,045
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Georgetown Memorial Hospital), AMBAC, 5%, 2023 1,000,000 1,022,060
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Georgetown Memorial Hospital), ASST GTY, 5.25%, 2021 1,500,000 1,563,435
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Palmetto Health Alliance), 6.25%, 2031 750,000 808,260
South Carolina Jobs & Economic Development Authority, Hospital
Facilties Rev. (Georgetown Memorial Hospital), AMBAC, 6%, 2014 1,000,000 1,084,690
South Carolina Jobs & Economic Development Authority, Hospital
Facilties Rev. (Tuomey), CIFG, 5%, 2030 1,000,000 1,033,550
South Carolina Medical University, Hospital Facilities Rev., "A",
MBIA, 5%, 2031 3,100,000 3,189,435
Spartanburg County, SC, Health Service Rev., AMBAC, 5.3%, 2020 2,500,000 2,527,275
Spartanburg County, SC, Health Service Rev., AMBAC, 5.3%, 2025 1,000,000 1,010,910
Spartanburg County, SC, Health Service Rev., FSA, 5.25%, 2032 2,250,000 2,345,423
------------
$ 32,412,566
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue -
Long Term Care - 1.2% Greenville County, SC, Hospital Rev. (Chestnut Hill), "A", 8%, 2015 $ 1,420,000 $ 1,421,775
South Carolina Jobs & Economic Development Authority, Residential
Care Facilities (Episcopal Home), "A", 6.375%, 2032 400,000 408,440
------------
$ 1,830,215
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Calhoun County, SC, Solid Waste Disposal Facilities Rev. (Carolina
Other - 1.0% Eastman Co.), ETM, 6.75%, 2017 (c) $ 1,000,000 $ 1,194,470
Virgin Islands Public Finance Authority, Refinery Facilities Rev.
(Hovensa Refinery), 5.875%, 2022 385,000 405,990
------------
$ 1,600,460
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Darlington County, SC, Industrial Development Rev. (Sonoco Products
Paper - 2.1% Co.), 6.125%, 2025 $ 1,500,000 $ 1,521,555
Florence County, SC, Industrial Development Rev. (Stone Container
Corp.), 7.375%, 2007 225,000 226,118
Georgetown County, SC, Environmental Improvement Rev., International
Paper, "A", 5.3%, 2028 500,000 483,010
Richland County, SC, Environmental Improvement Rev., International
Paper, "A", 6.1%, 2023 1,000,000 1,070,680
------------
$ 3,301,363
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment &
Tourism - 1.5% Myrtle Beach, SC, Hospitality Fee Rev., "A", FGIC, 5%, 2036 $ 510,000 $ 527,921
South Carolina Jobs & Economic Development Authority (Myrtle Beach
Convention), "B", MBIA, 5.125%, 2018 570,000 593,245
South Carolina Jobs & Economic Development Authority (Myrtle Beach
Convention), "B", MBIA, 5.125%, 2019 595,000 624,179
South Carolina Jobs & Economic Development Authority (Myrtle Beach
Convention), "B", MBIA, 5.125%, 2020 630,000 660,026
------------
$ 2,405,371
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing North Charleston SC, Housing Authority Rev. (Horizon Village), "A",
Revenue - 1.4% FHA, 5%, 2038 $ 1,000,000 $ 978,110
North Charleston SC, Housing Authority Rev. (Horizon Village), "A",
FHA, 5.1%, 2041 1,210,000 1,182,787
------------
$ 2,160,897
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - South Carolina Housing, Finance & Development Authority Mortgage Rev,
State - 2.0% "A-2", FSA, 5.2%, 2035 $ 1,000,000 $ 1,010,730
South Carolina Housing, Finance & Development Authority Rev., "A-2",
FSA, 6%, 2020 395,000 401,423
South Carolina Housing, Finance & Development Authority Rev., "A-2",
FSA, 5.35%, 2024 1,715,000 1,744,687
------------
$ 3,156,840
- ---------------------------------------------------------------------------------------------------------------------------------
State & Agency -
Other - 1.1% Greenville County, SC (University Center), "A", AMBAC, 5.25%, 2019 $ 1,000,000 $ 1,054,470
South Carolina Water Resources Authority Rev. (Local Government
Program), "A", 7.25%, 2020 605,000 606,198
------------
$ 1,660,668
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies - North Charleston, SC, Municipal Golf Course Mortgage Rev.,
3.9% 5.5%, 2009 (c) $ 1,000,000 $ 1,062,820
Puerto Rico Public Finance Corp., 5.75%, 2007 (c) 1,000,000 1,017,620
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2013 (z)(v) 1,375,000 1,625,993
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2019 (z)(v) 1,300,000 1,611,818
Spartanburg, SC, Public Facilities Corp. (Renaissance Park), AMBAC,
5.125%, 2025 685,000 716,763
------------
$ 6,035,014
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.1% Virgin Islands Public Finance Authority Rev., "A", 5.25%, 2024 $ 180,000 $ 186,991
- ---------------------------------------------------------------------------------------------------------------------------------
Tax Assessment - 0.3% Lancaster County, SC, Assessment Rev. (Sun City Carolina Lakes),
5.45%, 2037 $ 500,000 $ 501,060
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.7% South Carolina Tobacco Settlement Authority, 6.375%, 2028 $ 1,000,000 $ 1,075,290
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special
Tax - 3.4% South Carolina Transportation Infrastructure Rev., "A", AMBAC, 5%, 2023 $ 500,000 $ 518,435
South Carolina Transportation Infrastructure Rev., "A", AMBAC, 5%, 2027 2,000,000 2,078,440
South Carolina Transportation Infrastructure Rev., "A", AMBAC, 5%, 2033 1,645,000 1,707,197
South Carolina Transportation Infrastructure Rev., "A", MBIA,
5.375%, 2009 (c) 1,000,000 1,064,840
------------
$ 5,368,912
- ---------------------------------------------------------------------------------------------------------------------------------
Universities -
Colleges - 11.6% Clemson University, University Rev., AMBAC, 6.25%, 2009 (c) $ 1,250,000 $ 1,355,550
College Charleston, SC, Higher Education Facility Rev., "A", FGIC,
5.25%, 2028 2,435,000 2,561,230
College of Charleston, SC, Academic & Administrative Facilities Rev.,
"B", XLCA, 5%, 2024 800,000 833,672
College of Charleston, SC, Academic & Administrative Facilities Rev.,
"B", XLCA, 5.125%, 2034 1,510,000 1,579,958
South Carolina Educational Facilities Authority (Furman University),
5%, 2038 1,000,000 1,027,120
South Carolina Educational Facilities Authority (Furman University),
AMBAC, 5.375%, 2020 1,245,000 1,332,013
South Carolina Educational Facilities Authority (Furman University),
AMBAC, 5.5%, 2030 2,000,000 2,114,380
South Carolina Jobs & Economic Development Authority, Student Housing
Rev. (Francis Marion University), "A", MBIA, 5%, 2034 1,945,000 2,007,668
University of South Carolina, University Rev., "A", AMBAC, 5%, 2034 3,665,000 3,770,369
University of South Carolina, University Rev., "A", FGIC,
5.625%, 2010 (c) 1,555,000 1,671,096
------------
$ 18,253,056
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 11.1% Camden, SC, Public Utilities Rev., MBIA, 5.5%, 2007 (c) $ 1,425,000 $ 1,477,098
Camden, SC, Public Utilities Rev., MBIA, 5.5%, 2017 75,000 77,797
Easley, SC, Utility Rev., FSA, 5%, 2027 1,000,000 1,038,330
Easley, SC, Utility Rev., Refunding & Improvement, FSA, 5%, 2034 3,500,000 3,643,990
Greenwood, SC, Combined Public Utility, Refunding & Improvement
Systems, MBIA, 5%, 2021 175,000 183,141
Orangeburg County, SC, Solid Waste Disposal Facilities Rev., Electric
& Gas, AMBAC, 5.7%, 2024 2,000,000 2,003,340
Piedmont, SC, Municipal Power Agency, FGIC, 6.25%, 2021 2,600,000 3,152,240
Puerto Rico Electric Power Authority, RITES, FSA, 6.559%, 2015 (z)(v) 1,000,000 1,069,460
South Carolina Public Service Authority, "A", AMBAC, 5%, 2034 2,000,000 2,064,600
South Carolina Public Service Authority, "A", MBIA, 5.5%, 2018 200,000 212,752
South Carolina Public Service Authority, "A", MBIA, 5%, 2030 1,000,000 1,044,630
South Carolina Public Service Authority, "B", FSA, 5.125%, 2037 1,500,000 1,550,685
------------
$ 17,518,063
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility
Revenue - 14.5% Anderson County, SC, Joint Municipal Water, FSA, 5%, 2032 $ 1,000,000 $ 1,030,870
Anderson County, SC, Water & Sewer Systems Rev., FGIC, 5.125%, 2032 2,000,000 2,093,980
Charleston, SC, Waterworks & Sewer Rev., Capital Improvement, "B",
5%, 2028 1,000,000 1,031,650
Columbia, SC, Waterworks & Sewer Systems Rev., 6%, 2010 (c) 2,000,000 2,164,660
Greenville, SC, Stormwater Systems, FSA, 5%, 2022 595,000 622,537
Greenville, SC, Waterworks Rev., 5.5%, 2007 (c) 1,000,000 1,035,040
Greenville, SC, Waterworks Rev., 5.25%, 2020 860,000 919,340
Rock Hill, SC, Utility Systems Rev., Refunding & Improvement, "A",
FSA, 5.375%, 2023 500,000 536,565
Spartanburg, SC, San Sewer District, Sewer Systems Rev., "B", MBIA,
5%, 2034 4,000,000 4,145,120
Spartanburg, SC, Water & Sewer Authority Rev., "B", MBIA, 5.25%, 2030 1,000,000 1,061,680
Spartanburg, SC, Waterworks Rev., FGIC, 6.05%, 2006 (c) 2,750,000 2,761,193
Western Carolina Regional Sewer Authority Rev., AMBAC, 0%, 2007 4,000,000 3,871,440
York County, SC, Water & Sewer Rev., Refunding & Capital Improvement,
MBIA, 5%, 2027 1,490,000 1,551,209
------------
$ 22,825,284
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $145,381,815) $153,716,503
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.5%
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "B", 3.22%, due 4/06/06 $ 400,000 $ 400,000
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "D", 3.22%, due 4/06/06 100,000 100,000
Burke County, GA, Development Authority Pollution Control Rev.
(Oglethorpe Power Corp.), "A", 3.22%, due 4/05/06 1,230,000 1,230,000
Georgia Municipal Electric Authority, 3.05%, due 4/05/06 100,000 100,000
Jefferson County, AL, Sewer Rev., Capital Improvement Warrants, "A",
3.22%, due 4/06/06 400,000 400,000
Jefferson County, AL, Sewer Rev., Warrants, "B-4", 3.22%, due 4/06/06 100,000 100,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 2,330,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $147,711,815) $156,046,503
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 0.8% 1,334,833
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $157,381,336
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $3,000,000 Fixed - 3 Year Floating - 7 Day $ 41,200
BMA Swap Index (2.795%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
7/13/16 USD 2,000,000 Fixed - 10 Year Floating - 7 Day 42,048
BMA Swap Index (3.742%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/22/18 USD 3,000,000 Fixed - 12 Year Floating - 7 Day 57,092
BMA Swap Index (3.861%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
8/02/21 USD 2,000,000 Fixed - 15 Year Floating - 7 Day 31,963
BMA Swap Index (4.011%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 1,500,000 Floating - 3 Month Fixed - 20 Year (23,244)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- -------------------------------------------------------------------------------------------------------------------------------
$149,059
========
At March 31, 2006, the fund had sufficient cash and/or securities to cover any
commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) TENNESSEE MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 98.1%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport and Port Memphis-Shelby County, TN, Airport Authority Facilities Rev., FSA,
Revenue - 1.3% 5.125%, 2021 $ 1,500,000 $ 1,536,810
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
General Purpose - 8.3% Chattanooga, TN, Public Improvement, 5%, 2021 $ 2,570,000 $ 2,663,368
Commonwealth of Puerto Rico, Unrefunded, Public Improvement, FSA,
5%, 2024 770,000 801,955
Lincoln County, TN, School Improvement, FGIC, 5.8%, 2007 (c) 1,000,000 1,031,330
Lincoln County, TN, School Improvement, FGIC, 5.8%, 2007 (c) 1,000,000 1,031,330
Puerto Rico Commonwealth, 5.4%, 2006 (c) 3,000,000 3,058,140
Puerto Rico Public Building Authority, 5.5%, 2021 1,000,000 1,101,710
------------
$ 9,687,833
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Improvement - 2.2% Knoxville, TN, Recreational Facilities Improvement, 5.5%, 2008 (c) $ 645,000 $ 675,631
Williamson County, TN, Public Improvement, 5%, 2018 1,760,000 1,850,992
------------
$ 2,526,623
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations -
Schools - 12.8% Fayette County, TN, School District, AMBAC, 5.6%, 2008 (c) $ 1,215,000 $ 1,258,072
Gibson County, TN, School District, MBIA, 5.75%, 2009 (c) 455,000 482,086
Gibson County, TN, School District, MBIA, 5.75%, 2016 190,000 201,533
Giles County, TN, School Improvement, FGIC, 5.75%, 2010 (c) 1,980,000 2,125,510
Greene County, TN, Rural School, FGIC, 5%, 2011 (c) 1,240,000 1,313,780
Roane County, TN, Rural School, FGIC, 5.6%, 2008 (c) 915,000 947,684
Roane County, TN, Rural School, FGIC, 5.6%, 2008 (c) 975,000 1,009,827
Rutherford County, TN, School & Public Improvement, 5%, 2022 1,510,000 1,573,284
Rutherford County, TN, School District, 5.875%, 2010 (c) 1,100,000 1,189,243
Rutherford County, TN, School Improvement, 0%, 2007 (c) 1,500,000 914,955
Rutherford County, TN, School Improvement, 5.875%, 2010 (c) 2,000,000 2,162,260
Williamson County, TN, Rural School, 6.125%, 2010 (c) 1,575,000 1,711,442
------------
$ 14,889,676
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Jackson, TN, Hospital Rev. (Jackson-Madison County General Hospital),
Hospitals - 13.9% AMBAC, 5%, 2018 $ 1,000,000 $ 1,034,680
Johnson City, TN, Health & Education Financing Authority Rev.
(Johnson City Medical Center Hospital), MBIA, 5.25%, 2016 1,375,000 1,381,545
Johnson City, TN, Health & Education Financing Authority Rev.
(Johnson City Medical Center Hospital), MBIA, ETM, 5%, 2018 (c) 1,500,000 1,554,285
Johnson City, TN, Health & Educational Facilities, Hospital Rev.
(Mountain States Health), "A", 5.5%, 2036 600,000 625,230
Knox County, TN, Health Educational Housing Facilities Board,
Hospital Facilities Rev. (Baptist Health Systems), 6.5%, 2031 300,000 316,839
Knox County, TN, Health, Education & Housing Facilities Board Rev.
(Catholic Healthcare Partners), 5.25%, 2030 1,000,000 1,033,270
Knox County, TN, Health, Education & Housing Facilities Board Rev.
(Covenent Health), FSA, 5%, 2022 1,000,000 1,036,960
Knox County, TN, Health, Education & Housing Facilities Board Rev.
(East Tennessee Children's Hospital), 5.75%, 2033 450,000 469,971
Knox County, TN, Health, Education & Housing Facilities Board Rev.
(Fort Sanders), MBIA, 5.75%, 2014 3,250,000 3,613,675
Metropolitan Government of Nashville & Davidson County, TN, Health,
Educational & Housing Facilities Board Rev. (Adventist Health
System), 5.25%, 2020 1,000,000 1,025,150
Shelby County, TN, Health Educational & Housing Facilities Board Rev.
(St. Judes Children's Research), 5.5%, 2020 1,750,000 1,833,230
Shelby County, TN, Health Educational & Housing Facilities Hospital
Rev., (Methodist Healthcare), 6.5%, 2012 (c) 625,000 716,294
Shelby County, TN, Health Educational & Housing Facilities Hospital
Rev., (Methodist Healthcare), 6.5%, 2012 (c) 375,000 429,776
Springfield, TN, Health & Higher Educational Facilities Hospital Rev.
(Northcrest Medical Center), 5.25%, 2013 1,000,000 1,013,450
------------
$ 16,084,355
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Shelby County, TN, Health Educational Rev. (Germantown Village),
Long Term Care - 0.5% 7.25%, 2034 $ 250,000 $ 264,998
Shelby County, TN, Nursing Home Rev. (Beverly Enterprises, Inc.),
7.4%, 2006 (c) 250,000 260,898
------------
$ 525,896
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue -
Other - 1.2% Hardeman County, TN, Correctional Facilities Rev., 7.75%, 2017 $ 1,000,000 $ 1,033,190
Virgin Islands Public Finance Authority, Refinery Facilities Rev.
(Hovensa Refinery), 5.875%, 2022 320,000 337,446
------------
$ 1,370,636
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - McMinn County, TN, Industrial Development Board, Pollution Control
Paper - 0.9% Rev. (Bowater, Inc.), 7.625%, 2016 $ 1,000,000 $ 1,006,540
- ---------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Revenue -
Entertainment &
Tourism - 3.3% Memphis-Shelby County, TN (Memphis Sports Arena), AMBAC, 5.125%, 2028 $ 2,000,000 $ 2,088,880
Memphis-Shelby County, TN (Memphis Sports Arena), AMBAC, 5.35%, 2029 1,665,000 1,776,871
------------
$ 3,865,751
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Chattanooga, TN, Health, Educational & Housing Facilities (Rainbow
Revenue - 3.9% Creek), GNMA, 6.125%, 2019 $ 425,000 $ 447,461
Franklin, TN, Industrial Development Rev. (Landings Apartments), FSA,
6%, 2026 1,000,000 1,024,820
Knoxville, TN, Community Development Corp., 5%, 2024 1,000,000 1,045,240
Memphis, TN, Health & Educational Facilities Board Rev. (Hickory
Point Apartments), MBIA, 5.85%, 2020 1,000,000 1,035,080
Metropolitan Government of Nashville & Davidson County, TN, Health &
Educational & Housing Facilities Board Rev. (Berkshire Place), GNMA,
6%, 2023 500,000 521,815
Metropolitan Government of Nashville & Davidson County, TN, Health,
Educational & Housing Facilities Board Rev. (Herman Street), FHA,
7.25%, 2032 485,000 486,896
------------
$ 4,561,312
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Tennessee Housing Development Agency (Homeownership Program), "1A",
State - 12.5% 5%, 2035 $ 1,000,000 $ 1,039,370
Tennessee Housing Development Agency Mortgage Finance, 5.2%, 2023 1,500,000 1,551,510
Tennessee Housing Development Agency Mortgage Finance, 5.35%, 2034 1,150,000 1,174,104
Tennessee Housing Development Agency Rev., Homeownership Program,
5.45%, 2014 2,535,000 2,591,480
Tennessee Housing Development Agency Rev., Homeownership Program,
4.45%, 2017 645,000 634,151
Tennessee Housing Development Agency Rev., Homeownership Program,
4.45%, 2017 660,000 648,503
Tennessee Housing Development Agency Rev., Homeownership Program,
4.55%, 2018 575,000 565,214
Tennessee Housing Development Agency Rev., Homeownership Program,
4.55%, 2018 690,000 677,884
Tennessee Housing Development Agency Rev., Homeownership Program,
6%, 2020 1,260,000 1,288,073
Tennessee Housing Development Agency Rev., Homeownership Program,
5.05%, 2027 885,000 888,690
Tennessee Housing Development Agency Rev., Homeownership Program,
5.125%, 2034 1,090,000 1,125,381
Tennessee Housing Development Agency Rev., Homeownership Program,
5.25%, 2034 1,400,000 1,443,484
Tennessee Housing Development Agency Rev., Homeownership Program,
FSA, 5.4%, 2032 790,000 798,177
Tennessee Housing Development Agency Rev., Homeownership Program,
MBIA, 6.125%, 2020 70,000 70,725
------------
$ 14,496,746
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local Agencies - Chattanooga,TN, Industrial Development Board, AMBAC, 5.75%, 2018 $ 1,000,000 $ 1,078,060
5.4% Puerto Rico Public Finance Corp., 5.75%, 2007 (c) 2,000,000 2,035,240
State of Tennessee, School Bond Authority (Higher Education
Facilities), FSA, 5.25%, 2029 3,000,000 3,152,430
------------
$ 6,265,730
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.7% Virgin Islands Public Finance Authority Rev., "E", 5.875%, 2018 $ 730,000 $ 768,734
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 1.0% Guam Economic Development Authority Tobacco Settlement, "B", 5.5%, 2041 $ 350,000 $ 357,193
Tobacco Settlement Financing Corp., 5%, 2031 750,000 752,040
------------
$ 1,109,233
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Metropolitan Government of Nashville & Davidson County, TN, Health,
Colleges - 4.2% Educational & Housing Facilities Board Rev. (McKendree Village,
Inc.), 5.125%, 2020 $ 1,000,000 $ 1,020,680
Metropolitan Government of Nashville & Davidson County, TN, Health,
Educational & Housing Facilities Board Rev. (Meharry Medical
College), AMBAC, 5%, 2024 3,750,000 3,858,825
------------
$ 4,879,505
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal Jackson, TN, Electrical Systems Rev., MBIA, 5%, 2018 $ 1,000,000 $ 1,015,930
Owned - 6.9% Lawrenceburg, TN, Electrical Rev., MBIA, 5.5%, 2009 (c) 1,255,000 1,325,242
Metropolitan Government of Nashville & Davidson County, TN,
Electrical Rev., 5.125%, 2021 1,500,000 1,568,775
Metropolitan Government of Nashville & Davidson County, TN,
Electrical Rev., "A", AMBAC, 5%, 2029 1,500,000 1,558,695
Metropolitan Government of Nashville & Davidson County, TN,
Electrical Rev., MBIA, 0%, 2012 3,305,000 2,563,622
------------
$ 8,032,264
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Hallsdale-Powell Utility District, TN, Water & Sewer Rev., "A", FGIC,
Revenue - 19.1% 5%, 2024 $ 1,500,000 $ 1,561,875
Hallsdale-Powell Utility District, TN, Water & Sewer Rev., FGIC,
5%, 2027 3,000,000 3,109,110
Harpeth Valley, TN, Utilities Improvements Rev., MBIA, 5.05%, 2008 (c) 1,925,000 1,990,046
Madison, TN, Utility Waterworks Rev., MBIA, 5%, 2019 2,750,000 2,811,820
Memphis, TN, Sewage Systems Rev., 5.75%, 2016 625,000 655,594
Memphis, TN, Sewage Systems Rev., 5.75%, 2018 1,145,000 1,201,048
Memphis, TN, Sewage Systems Rev., 5.75%, 2020 750,000 789,480
Rutherford County, TN, Water Rev., MBIA, 5%, 2027 770,000 807,106
West Knox Utility District, TN, Water & Sewer Rev., MBIA, ETM,
0%, 2006 (c) 1,920,000 1,876,224
West Knox Utility District, TN, Water & Sewer Rev., MBIA, ETM,
0%, 2007 (c) 1,920,000 1,806,931
West Wilson Utility District, TN, Waterworks Rev., MBIA, 5.25%, 2030 2,000,000 2,118,140
White House Utility District, TN, Water & Sewer Rev. (Robertson &
Sumner Counties Waterworks), FSA, 6%, 2010 (c) 1,000,000 1,080,650
White House Utility District, TN, Water & Sewer Rev. (Robertson &
Sumner Counties Waterworks), FSA, 5%, 2021 800,000 827,536
White House Utility District, TN, Water & Sewer Rev. (Robertson &
Sumner Counties Waterworks), FSA, 5%, 2032 1,500,000 1,540,515
------------
$ 22,176,075
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $108,161,488) $113,783,719
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.3%
- ---------------------------------------------------------------------------------------------------------------------------------
Jefferson County, AL, Sewer Rev., Warrants, "B-4", 3.22%, due 4/06/06 $ 200,000 $ 200,000
Sevier County, TN, Public Building Authority, 3.19%, due 4/06/06 200,000 200,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 400,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $108,561,488) $114,183,719
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.6% 1,859,269
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $116,042,988
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------------------------
9/07/26 USD $2,000,000 Floating - 3 Month Fixed - 20 Year $ (53,817)
LIBOR Swap Index LIBOR Swap Index (5.268%)
- -------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 2,150,000 Floating - 3 Month Fixed - 20 Year (33,317)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- -------------------------------------------------------------------------------------------------------------------------------
7/11/36 USD 2,000,000 Floating - 7 Day Fixed - 30 Year (64,550)
BMA Swap Index BMA Swap Index (4.127%)
- -------------------------------------------------------------------------------------------------------------------------------
$(151,684)
=========
At March 31, 2006, the fund had sufficient cash and/or securities to cover any
commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) VIRGINIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 97.4%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
Airport & Port Metropolitan Washington, D C, Airports Authority Rev., "A", FSA,
Revenue - 8.5% 5%, 2032 $ 1,455,000 $ 1,496,889
Metropolitan Washington, DC, Airport Authority Rev., "A", FGIC,
5.125%, 2024 1,000,000 1,035,500
Metropolitan Washington, DC, Airport Authority Rev., "A", FGIC, 5%, 2025 705,000 724,486
Metropolitan Washington, DC, Airport Authority Rev., "A", MBIA, 5%, 2035 3,000,000 3,075,180
Metropolitan Washington, DC, Airport Authority Rev., "B", 5.5%, 2016 2,465,000 2,552,039
Metropolitan Washington, DC, Airport Authority Rev., "B", 5.75%, 2020 11,000,000 11,427,900
Norfolk, VA, Airport Authority Rev., "A", FGIC, 5.375%, 2017 1,755,000 1,871,339
Norfolk, VA, Airport Authority Rev., "A", FGIC, 5%, 2022 3,000,000 3,100,230
Virginia Resources Authority, Airport Rev., "B", 5.125%, 2027 720,000 739,296
------------
$ 26,022,859
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations - Lebanon, VA, 6.375%, 2006 (c) $ 1,625,000 $ 1,687,335
General Purpose - 2.1% Newport News, VA, Economic Development, "A", 5%, 2031 1,595,000 1,659,980
Stafford County, VA, Industrial Development Authority Rev., "B",
MBIA, 5%, 2034 3,060,000 3,177,963
------------
$ 6,525,278
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations - Chesterfield County, VA, 6%, 2010 (c) $ 1,900,000 $ 2,054,717
Improvement - 12.8% Chesterfield County, VA, 5%, 2020 2,015,000 2,106,178
Hampton, VA, Public Improvement, 6%, 2010 (c) 3,280,000 3,607,114
Hampton, VA, Public Improvement, 6%, 2010 (c) 3,480,000 3,827,060
Lynchburg, VA, Public Improvement, 5.6%, 2010 (c) 1,765,000 1,910,260
Puerto Rico Municipal Finance Agency, RITES, FSA, 8.108%, 2016 (z)(v) 1,105,000 1,289,181
Puerto Rico Municipal Finance Agency, RITES, FSA, 7.101%, 2017 (z)(v) 615,000 698,419
Richmond, VA, 0%, 2008 2,000,000 1,875,120
Richmond, VA, "A", FSA, 5.125%, 2010 (c) 5,000,000 5,297,750
Richmond, VA, "B", 0%, 2007 5,280,000 5,135,856
Richmond, VA, "B", 0%, 2008 5,270,000 4,940,941
Richmond, VA, "B", 0%, 2009 5,175,000 4,620,758
Suffolk, VA, Public Improvement, 5.5%, 2010 (c) 1,880,000 2,022,842
------------
$ 39,386,196
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations - Harrisonburg, VA, Public Recreation Facilities, FSA, 5.75%, 2029 $ 1,000,000 $ 1,088,010
Schools - 0.4%
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Albemarle County, VA, Industrial Development Authority, Hospital Rev.
Hospitals - 12.3% (Martha Jefferson Hospital), 5.25%, 2023 $ 3,000,000 $ 3,082,890
Arlington County, VA, Industrial Development Authority Rev. (Virginia
Hospital Center Arlington Health Systems), 5.25%, 2011 (c) 2,600,000 2,802,618
Fredericksburg, VA, Industrial Development Rev. (Medicorp Health
Systems), "B", 5.125%, 2033 750,000 760,065
Fredericksburg, VA, Industrial Development Rev. (Medicorp Health
Systems), AMBAC, 5.25%, 2023 11,000,000 11,385,000
Henrico County, VA, Economic Development Authority Rev. (Bon Secours
Health Systems, Inc.), "A", 5.6%, 2030 2,000,000 2,085,020
Henrico County, VA, Industrial Development Authority Rev. (Bon
Secours Health Systems, Inc.), MBIA, 6.25%, 2020 1,500,000 1,768,005
Loudoun County, VA, Industrial Development Authority, Hospital Rev.
(Loudoun Hospital Center), "A", 6.1%, 2012 (c) 1,000,000 1,126,600
Lynchburg, VA, Industrial Development Authority, Healthcare
Facilities Rev. (Central Health), 5.2%, 2008 (c) 855,000 885,549
Lynchburg, VA, Industrial Development Authority, Healthcare
Facilities Rev., Unrefunded Balance (Central Health), 5.2%, 2018 145,000 150,330
Medical College of Virginia, Hospital Authority Rev., MBIA, 5.125%, 2018 3,000,000 3,108,900
Peninsula Ports Authority, VA, Health System Rev. (Riverside Health
System), 5%, 2018 3,580,000 3,678,522
Peninsula Ports Authority, VA, Hospital Facility Rev. (Whittaker
Memorial), FHA, 8.7%, 2023 2,025,000 2,357,809
Prince William County, VA, Industrial Development Authority, Hospital
Rev. (Potomac Hospital Corp.), 5.2%, 2026 1,000,000 1,035,590
Roanoke, VA, Industrial Development Authority, Hospital Rev. (Roanoke
Memorial Hospital), "B", MBIA, 6.125%, 2017 3,000,000 3,490,620
------------
$ 37,717,518
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Henrico County, VA, Economic Development Authority, Residential Care
Long Term Care - 0.5% Facilities (United Methodist Homes), "A", 6.7%, 2027 $ 750,000 $ 782,888
Norfolk, VA, Redevelopment & Housing Authority Rev. (Fort Norfolk
Retirement Community), "A", 6.125%, 2035 750,000 761,385
------------
$ 1,544,273
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Charles City County, VA, Industrial Development Authority, Solid
Environmental Services - Waste Disposal Facility Rev. (Waste Management, Inc.), 6.25%, 2027 $ 1,500,000 $ 1,643,880
1.1% Henrico County, VA, Industrial Development Authority Rev. (Browning
Ferris, Inc.), 5.45%, 2014 1,750,000 1,689,713
------------
$ 3,333,593
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Loudoun County, VA, Industrial Development Authority Rev. (Dulles
Other - 1.3% Airport Marriot Hotel), 7.125%, 2015 $ 2,000,000 $ 2,040,800
Peninsula Ports Authority, Virginia Coal (Dominion Terminal
Associates), 6%, 2033 1,000,000 1,069,110
Virgin Islands Public Finance Authority, Refinery Facilities Rev.
(Hovensa Refinery), 5.875%, 2022 750,000 790,890
------------
$ 3,900,800
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Bedford County, VA, Industrial Development Authority Rev. (Nekooska
Paper - 1.8% Packaging Corp.), 5.6%, 2025 $ 1,000,000 $ 969,570
Isle Wight County, VA, Industrial Development Authority, Solid Waste
Disposal Facilities Rev. (Union Camp Corp.), 6.1%, 2027 2,750,000 2,819,300
West Point, VA, Industrial Development Authority, Solid Waste
Disposal Rev. (Chesapeake Corp.), "A", 6.375%, 2019 1,750,000 1,751,435
------------
$ 5,540,305
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Alexandria, VA, Redevelopment & Housing Finance Authority Rev.
Revenue - 4.3% (Jefferson Village Apartments), "B", 9%, 2018 $ 3,610,000 $ 3,593,394
Arlington County, VA, Industrial Development Authority Rev. (Colonial
Village), FNMA, 5.15%, 2031 3,000,000 3,073,560
Virginia Housing Development Authority Rev., "B", 5.95%, 2016 1,345,000 1,367,569
Virginia Housing Development Authority Rev., "G", 5.625%, 2020 2,000,000 2,060,220
Virginia Housing Development Authority Rev., "I", 5.15%, 2017 3,000,000 3,055,260
------------
$ 13,150,003
- ---------------------------------------------------------------------------------------------------------------------------------
Parking - 0.5% Norfolk, VA, Parking Systems Rev., MBIA, 5%, 2020 $ 1,630,000 $ 1,688,468
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing -
State - 3.0% Virginia Housing Development Authority Commonwealth, "C", 4.4%, 2022 $ 1,270,000 $ 1,217,740
Virginia Housing Development Authority Commonwealth, "C", 4.75%, 2032 1,795,000 1,757,897
Virginia Housing Development Authority, "A", 4.9%, 2027 2,850,000 2,838,401
Virginia Housing Development Authority, "A", 5%, 2031 2,000,000 2,026,740
Virginia Housing Development Authority, "C", 4.66%, 2027 1,285,000 1,252,220
------------
$ 9,092,998
- ---------------------------------------------------------------------------------------------------------------------------------
State & Agency -
Other - 1.6% Fairfax County, VA, COP, 6.1%, 2017 $ 3,090,000 $ 3,463,674
Virginia Biotechnology Research Park Lease Rev. (Consolidated
Laboratories), 5%, 2021 1,500,000 1,565,550
------------
$ 5,029,224
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local
Agencies - 21.7% Blue Ridge, VA, Regional Jail Authority, MBIA, 5.2%, 2021 $ 1,830,000 $ 1,904,426
Caroline County, VA, Industrial Development Authority, Lease Rev.,
AMBAC, 5.125%, 2034 1,000,000 1,046,560
Chesapeake, VA, Industrial Development Authority (Chesapeake Court
House), MBIA, 6.25%, 2011 3,985,000 4,181,141
Chesapeake, VA, Industrial Development Authority (Chesapeake Court
House), MBIA, 5.25%, 2017 2,000,000 2,074,840
Chesterfield County, VA, Industrial Development Authority, Public
Facilities Lease Rev., 7.5%, 2008 1,150,000 1,150,356
Culpepperva Industrial Development Authority, "N", MBIA, 4.5%, 2030 5,000,000 4,885,500
Dinwiddie County, VA, Industrial Development Authority Lease Rev.,
"B", MBIA, 5%, 2030 2,500,000 2,585,200
Fairfax County, VA, Economic Development Authority (Vienna II
Metrorail), 6%, 2009 (c) 1,750,000 1,911,455
Fairfax County, VA, Economic Development Authority Rev. (U.S. Route
28), MBIA, 5%, 2029 1,000,000 1,042,780
Fairfax County, VA, Economic Development Authority, Parking Rev.
(Vienna II Metrorail), 6%, 2009 (c) 1,650,000 1,802,229
Fairfax County, VA, Redevelopment & Housing Authority Rev. (Mott &
Gum Springs Community Centers), 5.5%, 2017 2,225,000 2,267,787
Fairfax, VA, Economic Development Authority Fairfax Public
Improvement Project, 5%, 2030 1,000,000 1,035,130
Front Royal & Warren County, VA, Industrial Development Authority
Lease Rev., School & Capital Improvement, "B", FSA, 5%, 2035 2,875,000 2,976,401
King George County, VA, Industrial Development Authority Lease Rev.,
FSA, 5%, 2036 2,000,000 2,067,160
Middlesex County, VA, Industrial Development Authority Rev., AMBAC,
5.125%, 2027 1,000,000 1,056,240
Middlesex County, VA, Industrial Development Authority Rev., AMBAC,
5.25%, 2032 2,000,000 2,113,680
Montgomery County, VA, Industrial Development, "B", AMBAC, 6%, 2017 1,000,000 1,107,280
Montgomery County, VA, Industrial Development, "C", AMBAC, 6%, 2017 1,120,000 1,240,154
New River Valley, VA, Regional Jail Authority, MBIA, 5.125%, 2019 3,405,000 3,548,248
Orange County, VA, Industrial Development Authority (Orange County
Project), AMBAC, 5%, 2034 1,000,000 1,036,140
Pamunkey, VA, Regional Jail Authority, MBIA, 5.75%, 2006 (c) 2,230,000 2,286,664
Pamunkey, VA, Regional Jail Authority, MBIA, 5.75%, 2006 (c) 270,000 276,861
Powhatan County, VA, Economic Development Authority Lease Rev.
(Virginia Capital Projects), AMBAC, 5.25%, 2033 1,000,000 1,055,980
Prince William County, VA, Lease Partnerships, 5%, 2021 1,500,000 1,565,235
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2013 (z)(v) 2,000,000 2,365,080
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2016 (z)(v) 500,000 606,740
Richmond, VA, Public Facilities, COP (Megahertz Project), "A", AMBAC,
5%, 2022 1,600,000 1,659,616
Southwest Virginia Regional Jail Authority Rev., MBIA, 5%, 2035 1,720,000 1,777,964
Virginia College Building Authority (21st Century College Program),
6%, 2009 (c) 2,000,000 2,144,020
Virginia Public Building Authority Rev., "B", MBIA, 0%, 2007 3,750,000 3,573,000
Virginia Resources Authority Rev., "B", FSA, 5.5%, 2019 1,070,000 1,140,909
Virginia Resources Authority Rev., ROLS, 6.729%, 2021 (z)(v) 1,390,000 1,534,727
Virginia Resources Authority Rev., ROLS, 6.729%, 2023 (z)(v) 1,520,000 1,658,198
Virginia Resources Authority Rev., ROLS, 6.729%, 2033 (z)(v) 2,510,000 2,682,437
Virginia Resources Authority, Infrastructure Rev., "A", 5%, 2017 1,360,000 1,421,200
------------
$ 66,781,338
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 1.6% Greater Richmond Convention Center Authority, Hotel Tax Rev.
(Convention Center Expansion), 6.125%, 2010 (c) $ 3,500,000 $ 3,855,320
Virgin Islands, Public Finance Authority Rev., "A", 5.625%, 2025 1,000,000 1,036,830
------------
$ 4,892,150
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 1.0% Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 $ 455,000 $ 466,425
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.5%, 2039 965,000 990,919
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, "B",
0%, 2055 2,000,000 69,300
Tobacco Settlement Financing Corp., 5.625%, 2037 1,000,000 1,024,190
Virgin Islands Tobacco Settlement Financing Corp., 5%, 2021 570,000 574,321
------------
$ 3,125,155
- ---------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 0.3% Pocahontas Parkway Assn., VA, Toll Road Rev., 0%, 2013 $ 1,500,000 $ 1,018,440
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico, Highway & Transportation Authority Rev.,
Tax - 2.2% "J", MBIA, 5%, 2029 $ 1,210,000 $ 1,263,893
Virginia Transportation Board Rev. (U.S. Route 58), "B", 5.125%, 2006 (c) 4,000,000 4,047,400
Virginia Commonwealth Board Program (Oak Grove Connector), "A",
5.25%, 2022 1,500,000 1,525,440
------------
$ 6,836,733
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Colleges - Amherst, VA, Industrial Development Authority Rev. (Educational
2.7% Facilities Sweet Briar), 5%, 2026 $ 1,770,000 $ 1,801,559
Danville, VA, Industrial Development Authority, Educational
Facilities Rev. (Averett University), 6%, 2022 500,000 519,140
Loudoun County, VA, Industrial Development Authority, University
Facilities Rev. (George Washington University), 6.25%, 2012 2,710,000 2,714,824
Virginia College Building Authority, Educational Facilities Rev.
(Washington & Lee University), MBIA, 5.25%, 2031 1,000,000 1,115,740
Virginia College Building Authority, Educational Facilities Rev.
(Hampton University), 6%, 2010 (c) 1,000,000 1,092,430
Virginia College Building Authority, Educational Facilities Rev.
(Regent University), MBIA, 5.125%, 2031 1,000,000 1,037,480
------------
$ 8,281,173
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Chesapeake, VA, Industrial Development Authority Rev. (Virginia
Owned - 2.2% Electric & Power Co.), 5.25%, 2008 $ 750,000 $ 757,717
Halifax County, VA, Industrial Development Authority (Old Dominion
Electric Cooperative), AMBAC, 5.625%, 2028 3,000,000 3,212,850
Mecklenburg County, VA, Industrial Development Authority Rev. (UAE
Mecklenburg LP), 6.5%, 2017 700,000 766,003
Pittsylvania County, VA, Industrial Development Authority Rev.,
7.5%, 2014 2,000,000 2,036,000
------------
$ 6,772,570
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Municipal
Owned - 5.4% Bristol, VA, Utility Systems Rev., FSA, ETM, 5.75%, 2016 (c) $ 240,000 $ 273,358
Guam Power Authority Rev., RITES, AMBAC, 6.565%, 2015 (z)(v) 1,010,000 1,127,322
Puerto Rico Electric Power Authority Rev., RITES, FSA,
7.599%, 2017 (z)(v) 2,500,000 2,949,450
Puerto Rico Electric Power Authority Rev., RITES, FSA,
7.349%, 2019 (z)(v) 1,270,000 1,485,951
Puerto Rico Electric Power Authority Rev., RITES, FSA,
6.699%, 2020 (z)(v) 1,250,000 1,435,000
Richmond, VA, Public Utilities Rev., FSA, 5%, 2033 6,950,000 7,149,535
Richmond, VA, Public Utilities Rev., FSA, 5%, 2035 1,000,000 1,038,070
Richmond, VA, Public Utilities Rev., FSA, "N", 5%, 2027 1,000,000 1,043,230
------------
$ 16,501,916
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Fairfax County, VA, Water Authority Rev., 5%, 2026 $ 1,000,000 $ 1,044,840
Revenue - 10.1% Fairfax County, VA, Water Authority Rev., 5%, 2027 3,155,000 3,292,148
Fairfax County, VA, Water Authority Rev., 5%, 2027 3,210,000 3,344,724
Fairfax County, VA, Water Authority Rev., 5%, 2032 2,000,000 2,068,960
Fairfax County, VA, Water Authority Rev., "A", 5%, 2030 2,000,000 2,094,340
Loudoun County, VA, Sanitation Authority Water & Sewer Rev., 5%, 2033 3,000,000 3,115,980
Prince William County, VA, Water & Sewer Rev., FGIC, 5.5%, 2009 (c) 2,000,000 2,129,740
Puerto Rico Aqueduct & Sewer Authority Rev., ETM, 10.25%, 2009 (c) 195,000 216,520
Spotsylvania County, VA, Water & Sewer Rev., FSA, 5%, 2022 1,450,000 1,504,549
Virginia Beach, VA, Storm Water Utilities Rev., 6%, 2020 1,000,000 1,097,760
Virginia Resources Authority Sewer Systems Rev. (Hopewell Regional
Wastewater), 5.75%, 2021 1,335,000 1,447,594
Virginia Resources Authority, Clean Water Rev., 5.4%, 2010 (c) 1,135,000 1,213,644
Virginia Resources Authority, Clean Water Rev., 6%, 2017 2,750,000 3,004,623
Virginia Resources Authority, Infrastructure Rev., "A", MBIA, 5.5%, 2019 1,600,000 1,719,936
Virginia Resources Authority, Infrastructure Rev., "A", MBIA, 5.5%, 2020 1,690,000 1,815,077
Virginia State Resources Authority, Water & Sewer Systems Rev.
(Tuckahoe Creek Project), 5%, 2035 2,015,000 2,090,240
------------
$ 31,200,675
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $285,595,692) $299,429,675
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.5%
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "A", 3.22%, due 4/06/06 $ 100,000 $ 100,000
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "B", 3.22%, due 4/06/06 600,000 600,000
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "C", 3.22%, due 4/06/06 500,000 500,000
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "D", 3.22%, due 4/06/06 600,000 600,000
Burke County, GA, Development Authority Pollution Control Rev.
(Oglethorpe Power Corp.), "A", 3.22%, due 4/05/06 300,000 300,000
Georgia Municipal Electric Authority, 3.05%, due 4/05/06 800,000 800,000
Jefferson County, AL, Sewer Rev., Capital Improvement Warrants, "A",
3.22%, due 4/06/06 1,000,000 1,000,000
Jefferson County, AL, Sewer Rev., Warrants, "B-4", 3.22%, due 4/06/06 300,000 300,000
Massachusetts Water Resources Authority, 3.17%, due 4/05/06 100,000 100,000
Missouri Health & Educational Facilities Authority Rev., Medical
Research Facilities (Stowers Institute), 3.22%, due 4/06/06 200,000 200,000
Sevier County, TN, Public Building Authority, 3.19%, due 4/06/06 70,000 70,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 4,570,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $290,165,692) $303,999,675
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.1% 3,513,045
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $307,512,720
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $6,000,000 Fixed - 3 Year Floating - 7 Day $ 82,400
BMA Swap Index (2.795%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
8/02/21 USD 3,000,000 Fixed - 15 Year Floating - 7 Day 47,944
BMA Swap Index (4.011%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 3,000,000 Floating - 3 Month Fixed - 20 Year (46,489)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- -------------------------------------------------------------------------------------------------------------------------------
7/11/36 USD 3,000,000 Floating - 7 Day Fixed - 30 Year (96,826)
BMA Swap Index BMA Swap Index (4.127%)
- -------------------------------------------------------------------------------------------------------------------------------
$(12,971)
========
At March 31, 2006 the fund had sufficient cash and/or securities to cover any
commitments under these derivative contracts.
SEE PORTFOLIO FOOTNOTES AND NOTES TO FINANCIAL STATEMENTS
PORTFOLIO OF INVESTMENTS - 3/31/06 MFS(R) WEST VIRGINIA MUNICIPAL BOND FUND
The Portfolio of Investments is a complete list of all securities owned by your
fund. It is categorized by broad-based asset classes.
Municipal Bonds - 97.7%
- ---------------------------------------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations - Charleston, WV, Public Improvements, 7.2%, 2009 $ 1,140,000 $ 1,255,357
General Purpose - 21.8% Commonwealth of Puerto Rico, Public Improvement, 5.25%, 2023 1,500,000 1,562,160
Commonwealth of Puerto Rico, Public Improvement, "A", CIFG, 5%, 2034 2,000,000 2,062,520
Commonwealth of Puerto Rico, Public Improvement, RITES, MBIA,
7.599%, 2019 (z)(v) 3,000,000 3,463,440
Puerto Rico Commonwealth Public Improvement, "A", CIFG, 5%, 2025 1,000,000 1,048,770
Puerto Rico Public Buildings Authority Rev. (State Office Building),
"F", XLCA, 5.25%, 2025 2,000,000 2,224,520
Puerto Rico Public Buildings Authority Rev., "B", 5.25%, 2007 (c) 3,115,000 3,223,184
West Virginia State, Highway Improvements, FGIC, 5.625%, 2010 (c) 2,000,000 2,162,500
West Virginia State, Public Improvements, FGIC, 5%, 2021 4,000,000 4,107,880
West Virginia State, Sewer Improvements, FGIC, 5.5%, 2017 2,565,000 2,721,952
West Virginia State, Water Utility Improvements, FGIC, 5.25%, 2026 8,000,000 8,229,280
------------
$ 32,061,563
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations - Brooke County, WV, Board of Education, FGIC, 5%, 2016 $ 1,390,000 $ 1,446,726
Improvement - 1.7% Puerto Rico, Municipal Finance Agency, RITES, FSA,
7.101%, 2017 (z)(v) 900,000 1,022,076
------------
$ 2,468,802
- ---------------------------------------------------------------------------------------------------------------------------------
General Obligations - Jefferson County, WV, Board of Education, FGIC, ETM, 6.85%, 2009 (c) $ 1,680,000 $ 1,842,691
Schools - 5.0% Monongalia County, WV, Board of Education, MBIA, 5%, 2027 2,350,000 2,447,313
Monongalia County, WV, Board of Education, MBIA, 5%, 2033 3,000,000 3,108,360
------------
$ 7,398,364
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Kanawha County, WV, Building Commission Rev. (St. Francis Hospital),
Hospitals - 5.3% ETM, 7.5%, 2007 (c) $ 60,000 $ 62,552
Monongalia County, WV, Building Community Hospital Rev. (Monongalia
General Hospital), "A", 5.25%, 2035 1,000,000 1,012,330
Ohio County, WV, County Commission Health System Rev. (Ohio Valley
Medical Center), 5.75%, 2013 750,000 713,415
Randolph County, WV, Community Health Systems Rev. (Davis Health
Systems, Inc.), FSA, 5.2%, 2021 1,000,000 1,059,600
Weirton, WV, Municipal Hospital Building, Commission Rev. (Weirton
Hospital Medical Center), 6.375%, 2031 600,000 602,898
West Virginia Hospital Finance Authority, Hospital Rev. (Charleston
Area Medical Center), ETM, 6.5%, 2023 (c) 2,000,000 2,408,780
West Virginia Hospital Finance Authority, Hospital Rev. (Fairmont
General Hospital), 6.625%, 2019 300,000 300,042
West Virginia Hospital Finance Authority, Hospital Rev. (General
Division Medical Office Building), 7.25%, 2014 1,645,000 1,647,912
------------
$ 7,807,529
- ---------------------------------------------------------------------------------------------------------------------------------
Healthcare Revenue - Harrison County, WV, Building Commission Rev. (Maplewood Retirement),
Long Term Care - 1.9% AMBAC, 5.25%, 2008 (c) $ 2,625,000 $ 2,757,877
- ---------------------------------------------------------------------------------------------------------------------------------
Industrial Revenue - Virgin Islands Public Finance Authority, Refinery Facilities Rev.
Other - 0.2% (Hovensa Refinery), 5.875%, 2022 $ 350,000 $ 369,082
- ---------------------------------------------------------------------------------------------------------------------------------
Multi-Family Housing Webster County, WV, Housing Development Rev. (Circlebrook), FHA,
Revenue - 0.1% 6.35%, 2008 $ 155,000 $ 155,338
- ---------------------------------------------------------------------------------------------------------------------------------
Parking - 0.9% West Virginia Economic Development Authority, Auto Lease Rev.
(Capitol Parking Garage), AMBAC, 5.8%, 2020 $ 1,260,000 $ 1,356,579
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Charlestown, WV, Residential Mortgage Rev., 6.2%, 2011 $ 75,000 $ 75,211
Local - 0.9% Kanawha County, WV, 0%, 2014 (c) 1,920,000 1,212,346
------------
$ 1,287,557
- ---------------------------------------------------------------------------------------------------------------------------------
Single Family Housing - Puerto Rico Housing Finance Authority Home Mortgage Rev., Mortgage
State - 1.8% Backed Securities, "A", 4.75%, 2023 $ 690,000 $ 690,973
West Virginia State, Housing Development Fund Rev., 5.25%, 2018 1,000,000 1,008,700
West Virginia State, Housing Development Fund Rev., 5.3%, 2023 985,000 992,299
------------
$ 2,691,972
- ---------------------------------------------------------------------------------------------------------------------------------
State & Local Huntington, WV, Municipal Development Authority, Rev., MBIA, 5.1%, 2018 $ 1,740,000 $ 1,802,431
Agencies - 20.3% West Virginia Building Commission, "A", RITES, AMBAC,
7.475%, 2018 (z)(v) 4,520,000 5,463,866
West Virginia Building Commission, "B", RITES, AMBAC,
7.475%, 2018 (z)(v) 1,250,000 1,511,025
West Virginia Building Commission, Lease Rev., MBIA, ETM, 0%, 2007 (c) 3,150,000 3,010,140
West Virginia Building Commission, Lease Rev., MBIA, ETM, 0%, 2008 (c) 3,050,000 2,808,410
West Virginia Building Commission, Lease Rev., MBIA, ETM, 0%, 2009 (c) 1,000,000 883,810
West Virginia Economic Development Authority (Correctional Juvenile &
Public), 5%, 2020 1,000,000 1,036,970
West Virginia Economic Development Authority (Correctional Juvenile &
Public), MBIA, 5.5%, 2013 1,000,000 1,091,770
West Virginia Economic Development Authority (Correctional Juvenile &
Public), MBIA, 5%, 2026 2,100,000 2,173,899
West Virginia Economic Development Authority State Office Building,
"B", MBIA, 5.25%, 2030 1,355,000 1,427,032
West Virginia Economic Development Authority, Auto Lease Rev., 5.2%, 2033 1,000,000 1,036,550
West Virginia Economic Development Authority, Department of
Environmental Protection, 5.5%, 2022 2,000,000 2,153,160
West Virginia Economic Development Authority, Lease Rev. (State
Office Building), "B", MBIA, 5.25%, 2025 645,000 683,190
West Virginia Hospital Finance Authority, Hospital Rev. (Veterans
Nursing Home), 5.5%, 2034 1,000,000 1,010,230
West Virginia Hospital Finance Authority, Hospital Rev. (West
Virginia University Hospital), AMBAC, 5%, 2018 1,000,000 1,020,100
West Virginia School Building Authority, Miscellaneous Tax Rev., FSA,
5.25%, 2021 2,550,000 2,646,976
------------
$ 29,759,559
- ---------------------------------------------------------------------------------------------------------------------------------
Tax - Other - 0.4% Virgin Islands, Public Finance Authority Rev., "A", 5.625%, 2025 $ 500,000 $ 518,415
- ---------------------------------------------------------------------------------------------------------------------------------
Tobacco - 0.5% Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico, 5.375%, 2033 $ 675,000 $ 691,949
- ---------------------------------------------------------------------------------------------------------------------------------
Toll Roads - 3.4% West Virginia Parkways, Economic Development & Tourism Authority,
Rev., FGIC, ETM, 0%, 2006 (c) $ 2,500,000 $ 2,479,275
West Virginia Parkways, Economic Development & Tourism Authority,
Rev., FGIC, ETM, 0%, 2007 (c) 2,000,000 1,911,200
West Virginia Parkways, Economic Development & Tourism Authority,
Rev., FGIC, ETM, 0%, 2008 (c) 610,000 561,682
------------
$ 4,952,157
- ---------------------------------------------------------------------------------------------------------------------------------
Transportation - Special Commonwealth of Puerto Rico, Highway & Transportation Authority Rev.,
Tax - 1.3% "J", MBIA, 5%, 2029 $ 1,820,000 $ 1,901,063
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - Commonwealth of Puerto Rico, Industrial Tourist Education (University
Colleges - 23.2% Plaza), MBIA, 5%, 2021 $ 1,270,000 $ 1,318,984
Fairmont State College, West Virginia, College Rev., "A", FGIC, 5%, 2032 3,210,000 3,307,070
Fairmont State College, West Virginia, College Rev., FGIC, 5.25%, 2022 5,130,000 5,443,392
Fairmont State College, West Virginia, College Rev., FGIC, 5.375%, 2027 1,500,000 1,603,725
Fairmont State College, West Virginia, College Rev., FGIC, 5%, 2032 2,250,000 2,318,040
Shepherd University Board of Governors, West Virginia Rev. (Residence
Facilities Projects), MBIA, 5%, 2035 1,675,000 1,734,630
State of West Virginia, Department of Higher Education (Marshall
University), FGIC, 5.25%, 2019 1,680,000 1,768,402
State of West Virginia, Department of Higher Education (Student Union
James C. Wilson College), 5.125%, 2022 1,500,000 1,576,935
State of West Virginia, Department of Higher Education, "B", FGIC,
5%, 2029 1,000,000 1,035,950
State of West Virginia, Department of Higher Education, MBIA, 5%, 2010 1,345,000 1,409,291
West Virginia University, Dormitory Rev., AMBAC, 5%, 2007 (c) 2,000,000 2,062,840
West Virginia University, University Systems Rev. (Marshall
University), FGIC, 6%, 2020 2,705,000 2,947,666
West Virginia University, University Systems Rev. (West Virginia
University), MBIA, 5.5%, 2020 1,700,000 1,914,693
West Virginia, Higher Education Facilities Rev., "B", FGIC, 5%, 2034 4,395,000 4,535,113
West Virginia, West Virginia University Improvement Rev., "C", FGIC,
5%, 2028 1,000,000 1,034,240
------------
$ 34,010,971
- ---------------------------------------------------------------------------------------------------------------------------------
Universities - West Liberty State College, Capital Improvement, 6%, 2028 $ 500,000 $ 529,420
Dormitories - 0.4%
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities - Investor Mason County, WV, Pollution Control Rev. (Appalachian Power Co.),
Owned - 0.5% 5.5%, 2022 $ 750,000 $ 766,357
- ---------------------------------------------------------------------------------------------------------------------------------
Water & Sewer Utility Fairmont, WV, Waterworks Rev., AMBAC, 5.25%, 2022 $ 200,000 $ 222,278
Revenue - 8.1% Parkersburg, WV, Waterworks & Sewer Series A, "N", FGIC, 4.5%, 2022 1,000,000 1,003,720
West Virginia Water Development Authority Loan Program, "B", AMBAC,
4.75%, 2035 500,000 501,890
West Virginia Water Development Authority Rev., AMBAC, 6.25%, 2020 1,000,000 1,090,410
West Virginia Water Development Authority Rev., AMBAC, 5.25%, 2023 1,000,000 1,065,270
West Virginia Water Development Authority Rev., AMBAC, 5%, 2026 2,850,000 2,966,793
West Virginia Water Development Authority Rev., ETM, 7.1%, 2009 (c) 105,000 111,794
West Virginia Water Development Authority, "A", FGIC, 5%, 2033 1,500,000 1,556,580
West Virginia Water Development Authority, Infrastructure Rev., "A",
AMBAC, 5%, 2033 1,950,000 2,016,768
West Virginia Water Development Authority, Infrastructure Rev., FSA,
5.5%, 2018 390,000 413,162
West Virginia Water Development Authority, Infrastructure Rev., FSA,
5.5%, 2019 895,000 945,899
------------
$ 11,894,564
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $136,466,802) $143,379,118
- ---------------------------------------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 0.7%
- ---------------------------------------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "C", 3.22%, due 4/06/06 $ 100,000 $ 100,000
Allegheny County, PA, Hospital Development Authority Rev.
(Presbyterian University Hospital), "D", 3.22%, due 4/06/06 400,000 400,000
New York City, NY, Municipal Water & Sewer Finance Authority Rev.,
3.09%, due 4/03/06 600,000 600,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES, AT IDENTIFIED COST $ 1,100,000
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $137,566,802) $144,479,118
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.6% 2,324,643
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $146,803,761
- ---------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL PRINCIPAL UNREALIZED
AMOUNT OF CASH FLOWS PAID CASH FLOWS APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND RECEIVED BY THE FUND (DEPRECIATION)
- -------------------------------------------------------------------------------------------------------------------------------
12/01/07 USD $3,000,000 Fixed - 3 Year Floating - 7 Day $ 41,200
BMA Swap Index (2.795%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/16/16 USD 3,000,000 Fixed - 10 Year Floating - 7 Day 7,728
BMA Swap Index (3.977%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/15/18 USD 3,000,000 Fixed - 12 Year Floating - 7 Day 15,791
BMA Swap Index (4.019%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
6/22/18 USD 3,000,000 Fixed - 12 Year Floating - 7 Day 57,092
BMA Swap Index (3.861%) BMA Swap Index
- -------------------------------------------------------------------------------------------------------------------------------
9/13/26 USD 1,500,000 Floating - 3 Month Fixed - 20 Year (23,244)
LIBOR Swap Index LIBOR Swap Index (5.363%)
- -------------------------------------------------------------------------------------------------------------------------------
$ 98,567
========
At March 31, 2006 the fund had sufficient cash and/or securities to cover any
commitments under these derivative contracts.
The following abbreviations are used in the Portfolio of Investments and are
defined:
BMA Bond Market Assn.
COP Certificate of Participation
ETM Escrowed to Maturity
LIBOR London Interbank Offered Rate
LOC Letter of Credit
Insurers Inverse Floaters
- ----------------------------------------------------------------------------------------------------------------------------
AMBAC AMBAC Indemnity Corp. RITES Residual Interest Tax-Exempt Security
ASST GTY Asset Guaranty Insurance Co. ROLS Residual Options Longs
CIFG CDS 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.
XLCA XL Capital Insurance Co.
Portfolio Footnotes:
(c) Refunded bond.
(v) Inverse floating rate security.
(z) Restricted securities (excluding 144A issues) are not registered under the Securities Act of 1933 and are subject to legal or
contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to
the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and prompt
sale at an acceptable price may be difficult. The funds hold the following restricted securities:
TOTAL %
ACQUISITION ACQUISITION CURRENT OF NET
FUND SECURITY DATE COST MARKET VALUE ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
Mississippi Commonwealth of Puerto Rico, ROLS, FGIC, 7.763%, 2016 8/05/02 $4,023,905 $ 3,842,778
Fund Guam Power Authority Rev., RITES, AMBAC, 6.565%, 2013 5/20/99 1,072,720 1,118,180
Puerto Rico Municipal Finance Agency, RITES, FSA, 7.101%,
2017 1/06/00 703,620 851,730
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2013 9/30/99 509,110 591,270
- ---------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $ 6,403,958 7.4%
=========== ===
New York Commonwealth of Puerto Rico, ROLS, XLCA, 7.693%, 2017 10/22/01 $1,634,526 $ 1,656,585
Fund Guam Power Authority Rev., RITES, "B-1", AMBAC, 6.565%, 2014 5/20/99 531,950 557,410
Niagra Falls, NY, Bridge Commission Toll Rev., RITES, FGIC,
6.53%, 2015 5/21/99 3,755,920 4,055,940
Triborough Bridge & Tunnel Authority Rev., NY, RITES, ETM,
7.745%, 2017 4/18/00 5,018,300 6,042,800
- ---------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $12,312,735 7.4%
=========== ===
North Carolina Commonwealth of Puerto Rico, Highway & Transportation 2/26/99 $7,037,419 $ 7,335,251
Fund Authority Rev., RITES, FSA, 8.076%, 2018
North Carolina Eastern Municipal Power Agency, RITES, AMBAC,
8.042%, 2018 5/26/00 6,552,130 8,623,940
North Carolina Municipal Power Agency, ROLS, Catawaba
Electric Rev., MBIA, 7.236%, 2019 3/03/03 5,726,600 5,652,300
North Carolina Municipal Power Agency, ROLS, Catawaba
Electric Rev., MBIA, 7.236%, 2020 3/03/03 3,376,680 3,384,120
Puerto Rico Public Finance Corp., RITES, AMBAC, 7.535%, 2016 9/30/99 1,471,890 1,820,220
- -----------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $26,815,831 8.0%
=========== ===
Pennsylvania Commonwealth of Puerto Rico Highway & Transportation 4/25/03 $1,969,560 $ 1,911,120
Fund Authority, ROLS, MBIA, 7.763%, 2020
Commonwealth of Puerto Rico, ROLS, FGIC, 7.763%, 2015 8/05/02 1,292,920 1,224,780
Commonwealth of Puerto Rico, ROLS, XLCA, 7.693%, 2017 10/22/01 1,210,760 1,227,100
Guam Power Authority Rev., RITES, AMBAC, 6.565%, 2014 5/20/99 2,308,663 2,419,159
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2013 9/30/99 509,110 591,270
- -----------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $ 7,373,429 6.6%
=========== ===
South Carolina Commonwealth of Puerto Rico, RITES, ETM, 7.099%, 2018 10/05/00 $2,068,200 $ 2,310,400
Fund Commonwealth of Puerto Rico, RITES, ETM, 7.099%, 2019 10/05/00 1,795,115 2,018,590
Commonwealth of Puerto Rico, RITES, MBIA, 7.599%, 2020 3/30/00 2,044,880 2,308,960
Commonwealth of Puerto Rico, RITES, FSA, 8.108%, 2016 1/06/00 883,592 991,678
Puerto Rico Electric Power Authority, RITES, FSA,
6.559%, 2015 9/16/99 976,500 1,069,460
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2013 9/30/99 1,400,053 1,625,993
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2019 3/31/99 1,470,326 1,611,818
- ---------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $11,936,899 7.6%
=========== ===
Virginia Guam Power Authority Rev., RITES, AMBAC, 6.565%, 2015 5/20/99 $1,058,642 $ 1,127,322
Fund Puerto Rico Electric Power Authority Rev., RITES, FSA, 8/28/00 2,770,600 2,949,450
7.599%, 2017
Puerto Rico Electric Power Authority Rev., RITES, FSA,
7.349%, 2019 8/28/00 1,345,006 1,485,951
Puerto Rico Electric Power Authority Rev., RITES, FSA,
6.699%, 2020 8/28/00 1,240,075 1,435,000
Puerto Rico Municipal Finance Agency, RITES, FSA,
8.108%, 2016 1/06/00 1,145,670 1,289,181
Puerto Rico Municipal Finance Agency, RITES, FSA,
7.101%, 2017 1/06/00 576,968 698,419
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2013 9/30/99 2,036,440 2,365,080
Puerto Rico Public Finance Corp., RITES, AMBAC, 6.826%, 2016 3/31/99 569,030 606,740
Virginia Resources Authority Rev., ROLS, 6.729%, 2021 12/01/03 1,508,372 1,534,727
Virginia Resources Authority Rev., ROLS, 6.729%, 2023 12/01/03 1,612,568 1,658,198
Virginia Resources Authority Rev., ROLS, 6.729%, 2033 12/01/03 2,586,957 2,682,437
- -----------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $17,832,505 5.8%
=========== ===
West Virginia Commonwealth of Puerto Rico, Public Improvement, RITES, MBIA, 3/30/00 $3,090,720 $ 3,463,440
Fund 7.599%, 2019
Puerto Rico, Municipal Finance Agency, RITES, FSA,
7.101%, 2017 1/06/00 844,344 1,022,076
West Virginia Building Commission, "A", RITES, AMBAC,
7.475%, 2018 5/05/99 4,888,561 5,463,866
West Virginia Building Commission, "B", RITES, AMBAC,
7.475%, 2018 5/05/99 1,351,925 1,511,025
- ---------------------------------------------------------------------------------------------------------------------------------
Total Restricted Securities $11,460,407 7.8%
=========== ===
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
This statement represents your fund's balance sheet, which details the assets
and liabilities composing the total value of your fund.
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA
For year ended 3/31/06 FUND FUND FUND FUND
ASSETS
- --------------------------------------------------------------------------------------------------------------------------------
Investments -
Identified cost $81,380,738 $153,219,624 $310,188,695 $105,146,535
Unrealized appreciation (depreciation) 3,228,375 9,714,857 18,421,961 3,935,822
- --------------------------------------------------------------------------------------------------------------------------------
Total investments, at value $84,609,113 $162,934,481 $328,610,656 $109,082,357
Cash 53,828 57,731 93,330 5,497
Receivable for investments sold 431,255 353,308 1,631,327 40,000
Receivable for fund shares sold 76,679 76,006 49,621 288,684
Interest receivable 1,247,192 2,520,587 5,344,196 1,671,290
Receivable from investment adviser -- -- -- 328,082
Unrealized appreciation on interest rate swaps 82,707 149,241 276,446 133,261
- --------------------------------------------------------------------------------------------------------------------------------
Total assets $86,500,774 $166,091,354 $336,005,576 $111,549,171
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------------------------------------------------------
Distributions payable $139,233 $222,243 $399,413 $135,535
Payable for fund shares reacquired 175,578 148,117 451,404 222,027
Unrealized depreciation on interest rate swaps 44,738 32,556 67,442 21,704
Payable to affiliates -
Management fee 708 1,359 2,750 910
Shareholder servicing costs 7,105 13,134 21,244 7,366
Distribution and service fees 487 2,068 4,362 12,009
Administrative services fee 47 64 129 61
Payable for independent trustees' compensation 10,213 13,428 16,565 9,952
Accrued expenses and other liabilities 61,145 73,094 85,568 68,055
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities $439,254 $506,063 $1,048,877 $477,619
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $86,061,520 $165,585,291 $334,956,699 $111,071,552
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- --------------------------------------------------------------------------------------------------------------------------------
Paid-in capital $83,246,841 $155,568,821 $316,806,089 $107,409,795
Unrealized appreciation (depreciation) on investments 3,266,344 9,831,542 18,630,965 4,047,379
Accumulated net realized gain (loss) on investments (329,133) 691,315 105,034 (175,233)
Accumulated distributions in excess of net investment income (122,532) (506,387) (585,389) (210,389)
- --------------------------------------------------------------------------------------------------------------------------------
Net assets $86,061,520 $165,585,291 $334,956,699 $111,071,552
- --------------------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA
FUND FUND FUND FUND
Net Assets
Class A $75,596,857 $118,475,660 $270,123,603 $ 72,429,191
Class B 10,464,663 30,045,829 32,609,959 38,642,361
Class C -- 17,063,802 32,223,137 --
- --------------------------------------------------------------------------------------------------------------------------------
Total net assets $86,061,520 $165,585,291 $334,956,699 $111,071,552
- --------------------------------------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding
Class A 7,772,637 10,644,398 22,796,832 7,134,583
Class B 1,074,534 2,708,136 2,755,978 3,796,778
Class C -- 1,535,312 2,721,190 --
- --------------------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding 8,847,171 14,887,846 28,274,000 10,931,361
- --------------------------------------------------------------------------------------------------------------------------------
Class A shares
Net asset value per share
(net assets/shares of beneficial interest outstanding) $ 9.73 $ 11.13 $ 11.85 $ 10.15
- --------------------------------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25Xnet asset value per share) $ 10.22 $ 11.69 $ 12.44 $ 10.66
- --------------------------------------------------------------------------------------------------------------------------------
Class B shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $ 9.74 $ 11.09 $ 11.83 $ 10.18
- --------------------------------------------------------------------------------------------------------------------------------
Class C shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $-- $ 11.11 $ 11.84 $--
- --------------------------------------------------------------------------------------------------------------------------------
On sales of $100,000 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
Statement of Assets and Liabilities - continued
SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
For year ended 3/31/06 FUND FUND FUND FUND
ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
Investments -
Identified cost $147,711,815 $108,561,488 $290,165,692 $137,566,802
Unrealized appreciation (depreciation) 8,334,688 5,622,231 13,833,983 6,912,316
- ----------------------------------------------------------------------------------------------------------------------------------
Total investments, at value $156,046,503 $114,183,719 $303,999,675 $144,479,118
Cash 37,408 24,466 99,860 25,983
Receivable for investments sold -- 875,742 3,138,230 30,000
Receivable for fund shares sold 143,634 23,100 114,129 98,795
Interest receivable 2,444,173 1,660,432 4,747,094 2,417,707
Unrealized appreciation on interest rate swaps 179,291 -- 144,319 128,799
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets $158,851,009 $116,767,459 $312,243,307 $147,180,402
- ----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions payable $161,341 $198,454 $445,466 $158,591
Payable for investments purchased 1,028,680 -- 3,811,842 --
Payable for fund shares reacquired 154,949 289,318 184,651 97,683
Unrealized depreciation on interest rate swaps 30,232 151,684 157,290 30,232
Payable to affiliates -
Management fee 1,292 953 2,522 1,204
Shareholder servicing costs 10,691 7,388 20,447 8,881
Distribution and service fees 1,972 1,419 3,473 1,627
Administrative services fee 63 53 120 61
Payable for independent trustees' compensation 16,078 13,107 16,669 15,736
Accrued expenses and other liabilities 64,375 62,095 88,107 62,626
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities $1,469,673 $724,471 $4,730,587 $376,641
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets $157,381,336 $116,042,988 $307,512,720 $146,803,761
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF
- ----------------------------------------------------------------------------------------------------------------------------------
Paid-in capital $149,405,014 $110,694,520 $294,437,588 $140,245,969
Unrealized appreciation (depreciation) on investments 8,483,747 5,470,547 13,821,012 7,010,883
Accumulated net realized gain (loss) on investments (414,234) 133,909 78,692 (169,083)
Accumulated distributions in excess of net investment income (93,191) (255,988) (824,572) (284,008)
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets $157,381,336 $116,042,988 $307,512,720 $146,803,761
- ----------------------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
For year ended 3/31/06 FUND FUND FUND FUND
Net Assets
Class A $131,167,200 $ 98,825,497 $277,632,554 $134,415,461
Class B 26,214,136 17,217,491 16,884,892 12,388,300
Class C -- -- 12,995,274 --
- ----------------------------------------------------------------------------------------------------------------------------------
Total net assets $157,381,336 $116,042,988 $307,512,720 $146,803,761
- ----------------------------------------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding
Class A 10,706,507 9,356,295 24,329,340 11,718,696
Class B 2,141,062 1,631,198 1,480,756 1,080,558
Class C -- -- 1,139,059 --
- ----------------------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest outstanding 12,847,569 10,987,493 26,949,155 12,799,254
- ----------------------------------------------------------------------------------------------------------------------------------
Class A shares
Net asset value per share
(net assets/shares of beneficial interest outstanding) $12.25 $10.56 $11.41 $11.47
- ----------------------------------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25Xnet asset value per share) $12.86 $11.09 $11.98 $12.04
- ----------------------------------------------------------------------------------------------------------------------------------
Class B shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $12.24 $10.56 $11.40 $11.46
- ----------------------------------------------------------------------------------------------------------------------------------
Class C shares
Net asset value and offering price per share
(net assets/shares of beneficial interest outstanding) $-- $-- $11.41 $--
- ----------------------------------------------------------------------------------------------------------------------------------
On sales of $100,000 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
FINANCIAL STATEMENTS STATEMENT OF OPERATIONS
This statement describes how much your fund received in investment income and
paid in expenses. It also describes any gains or losses generated by fund
operations.
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA
For year ended 3/31/06 FUND FUND FUND FUND
NET INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------------------------------------
Interest $4,474,833 $9,047,182 $17,763,345 $5,387,602
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses -
Management fee $482,629 $956,565 $1,905,888 $612,949
Distribution and service fees 84,973 818,796 1,664,065 418,425
Shareholder servicing costs 124,489 247,140 478,496 154,667
Administrative services fee 17,427 27,235 46,766 20,034
Independent trustees' compensation 5,418 8,205 15,340 7,302
Custodian fee 40,431 62,240 121,182 42,987
Shareholder communications 8,219 23,483 42,755 18,819
Auditing fees 44,324 44,344 44,382 43,528
Legal fees 8,970 33,890 11,129 14,383
Miscellaneous 50,516 75,746 72,746 39,418
- ---------------------------------------------------------------------------------------------------------------------------------
Total expenses $867,396 $2,297,644 $4,402,749 $1,372,512
- ---------------------------------------------------------------------------------------------------------------------------------
Fees paid indirectly (10,791) (12,591) (30,136) (8,166)
Reduction of expenses by investment adviser (220,301) (435,899) (868,267) (399,762)
- ---------------------------------------------------------------------------------------------------------------------------------
Net expenses $636,304 $1,849,154 $3,504,346 $964,584
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $3,838,529 $7,198,028 $14,258,999 $4,423,018
- ---------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis) -
Investment transactions $139,165 $719,463 $736,465 $301,189
Swap transactions 147,467 89,998 282,977 42,702
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $286,632 $809,461 $1,019,442 $343,891
- ---------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments $(1,058,665) $(2,621,573) $(3,866,717) $(580,781)
Swap transactions (44,559) 334 119,123 (19,004)
- ---------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $(1,103,224) $(2,621,239) $(3,747,594) $(599,785)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $(816,592) $(1,811,778) $(2,728,152) $(255,894)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $3,021,937 $5,386,250 $11,530,847 $4,167,124
- ---------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Operations - continued
SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
For year ended 3/31/06 FUND FUND FUND FUND
NET INVESTMENT INCOME
- --------------------------------------------------------------------------------------------------------------------------------
Interest $8,393,277 $6,229,512 $16,499,907 $7,522,980
- --------------------------------------------------------------------------------------------------------------------------------
Expenses -
Management fee $878,565 $672,349 $1,723,944 $816,555
Distribution and service fees 746,133 551,957 1,299,754 607,115
Shareholder servicing costs 216,254 163,542 421,988 195,257
Administrative services fee 25,541 21,330 42,966 24,259
Independent trustees' compensation 9,710 7,628 14,603 9,345
Custodian fee 62,188 41,947 106,473 51,385
Shareholder communications 18,139 10,881 45,839 14,942
Auditing fees 44,340 44,332 44,374 44,337
Legal fees 5,840 6,328 12,132 5,570
Miscellaneous 39,887 49,714 83,830 50,665
- --------------------------------------------------------------------------------------------------------------------------------
Total expenses $2,046,597 $1,570,008 $3,795,903 $1,819,430
- --------------------------------------------------------------------------------------------------------------------------------
Fees paid indirectly (11,861) (8,344) (26,212) (12,467)
Reduction of expenses by investment adviser (400,334) (306,371) (785,506) (372,074)
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses $1,634,402 $1,255,293 $2,984,185 $1,434,889
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income $6,758,875 $4,974,219 $13,515,722 $6,088,091
- --------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- --------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis) -
Investment transactions $439,645 $361,731 $830,201 $150,465
Swap transactions 250,896 119,455 364,938 250,952
- --------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $690,541 $481,186 $1,195,139 $401,417
- --------------------------------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) -
Investments $(2,259,791) $(1,581,219) $(4,268,211) $(1,918,969)
Swap transactions 94,849 (139,688) 102,093 (9,694)
- --------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $(2,164,942) $(1,720,907) $(4,166,118) $(1,928,663)
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $(1,474,401) $(1,239,721) $(2,970,979) $(1,527,246)
- --------------------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $5,284,474 $3,734,498 $10,544,743 $4,560,845
- --------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS STATEMENT OF CHANGES IN NET ASSETS
This statement describes the increases and or decreases in net assets resulting
from operations, any distributions, and any shareholder transactions.
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA
For year ended 3/31/06 FUND FUND FUND FUND
CHANGE IN NET ASSETS
OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $3,838,529 $7,198,028 $14,258,999 $4,423,018
Net realized gain (loss) on investments 286,632 809,461 1,019,442 343,891
Net unrealized gain (loss) on investments (1,103,224) (2,621,239) (3,747,594) (599,785)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $3,021,937 $5,386,250 $11,530,847 $4,167,124
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income
Class A $(3,413,002) $(5,263,309) $(11,694,658) $(2,989,205)
Class B (412,712) (1,168,804) (1,306,917) (1,394,784)
Class C -- (642,938) (1,170,926) --
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- (564,709) (1,065,305) --
Class B -- (152,917) (135,859) --
Class C -- (82,521) (127,766) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(3,825,714) $(7,875,198) $(15,501,431) $(4,383,989)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(4,252,560) $(12,844,892) $(14,095,028) $1,890,721
- ---------------------------------------------------------------------------------------------------------------------------------
Total change in net assets $(5,056,337) $(15,333,840) $(18,065,612) $1,673,856
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
At beginning of period 91,117,857 180,919,131 353,022,311 109,397,696
At end of period $86,061,520 $165,585,291 $334,956,699 $111,071,552
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income
included in net assets at end of period $(122,532) $(506,387) $(585,389) $(210,389)
- ---------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
For year ended 3/31/06 FUND FUND FUND FUND
CHANGE IN NET ASSETS
OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $6,758,875 $4,974,219 $13,515,722 $6,088,091
Net realized gain (loss) on investments 690,541 481,186 1,195,139 401,417
Net unrealized gain (loss) on investments (2,164,942) (1,720,907) (4,166,118) (1,928,663)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $5,284,474 $3,734,498 $10,544,743 $4,560,845
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income
Class A $(5,659,836) $(4,261,947) $(12,295,006) $(5,562,081)
Class B (1,056,777) (664,458) (688,908) (467,115)
Class C -- -- (466,544) --
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- (373,368) -- --
Class B -- (67,191) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholder $(6,716,613) $(5,366,964) $(13,450,458) $(6,029,196)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(2,560,303) $(7,850,463) $(6,612,020) $(521,038)
- ---------------------------------------------------------------------------------------------------------------------------------
Total change in net assets $(3,992,442) $(9,482,929) $(9,517,735) $(1,989,389)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
At beginning of period 161,373,778 125,525,917 317,030,455 148,793,150
At end of period $157,381,336 $116,042,988 $307,512,720 $146,803,761
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income
included in net assets at end of period $(93,191) $(255,988) $(824,572) $(284,008)
- ---------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Statement of Changes in Net Assets - continued
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA
For year ended 3/31/05 FUND FUND FUND FUND
CHANGE IN NET ASSETS
OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $4,246,035 $7,863,201 $15,534,523 $4,519,117
Net realized gain (loss) on investments (599,779) 1,305,318 2,301,615 515,430
Net unrealized gain (loss) on investments (1,291,053) (5,205,262) (10,908,526) (2,429,625)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $2,355,203 $3,963,257 $6,927,612 $2,604,922
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income
Class A $(3,800,669) $(5,659,906) $(12,575,689) $(2,936,106)
Class B (488,047) (1,405,511) (1,644,629) (1,545,007)
Class C -- (758,214) (1,223,511) --
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- -- (936,801) --
Class B -- -- (140,671) --
Class C -- -- (107,103) --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(4,288,716) $(7,823,631) $(16,628,404) $(4,481,113)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(2,632,645) $(10,280,741) $(28,080,809) $(12,289,315)
- ---------------------------------------------------------------------------------------------------------------------------------
Redemption fees $41 $2,441 $1 $21
- ---------------------------------------------------------------------------------------------------------------------------------
Total change in net assets $(4,566,117) $(14,138,674) $(37,781,600) $(14,165,485)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
At beginning of period 95,683,974 195,057,805 390,803,911 123,563,181
At end of period $91,117,857 $180,919,131 $353,022,311 $109,397,696
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income
included in net assets at end of period $(145,835) $(579,928) $(629,708) $(247,616)
- ---------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
For year ended 3/31/05 FUND FUND FUND FUND
CHANGE IN NET ASSETS
OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income $7,197,796 $5,340,555 $14,787,096 $6,504,194
Net realized gain (loss) on investments 930,247 1,007,888 3,298,859 (76,934)
Net unrealized gain (loss) on investments (4,411,964) (3,338,157) (9,424,724) (3,229,447)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in net assets from operations $3,716,079 $3,010,286 $8,661,231 $3,197,813
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income
Class A $(5,900,829) $(4,493,724) $(13,347,276) $(5,865,720)
Class B (1,287,235) (765,363) (855,754) (572,534)
Class C -- -- (489,932) --
- ---------------------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A -- (753,833) -- --
Class B -- (154,547) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(7,188,064) $(6,167,467) $(14,692,962) $(6,438,254)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(9,882,323) $(14,612,884) $(15,058,690) $(6,309,465)
- ---------------------------------------------------------------------------------------------------------------------------------
Redemption fees $-- $-- $606 $44
- ---------------------------------------------------------------------------------------------------------------------------------
Total change in net assets $(13,354,308) $(17,770,065) $(21,089,815) $(9,549,862)
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------------
At beginning of period 174,728,086 143,295,982 338,120,270 158,343,012
At end of period $161,373,778 $125,525,917 $317,030,455 $148,793,150
- ---------------------------------------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income
included in net assets at end of period $(104,050) $(285,525) $(862,634) $(336,222)
- ---------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) MISSISSIPPI 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. This information has been audited by the fund's independent registered
public accounting firm, whose report, together with the fund's financial statements, are included in this report.
YEARS ENDED 3/31
-----------------------------------------------------------
CLASS A 2006 2005 2004 2003 2002
Net asset value, beginning of period $9.82 $10.02 $10.02 $9.61 $9.78
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.44 $0.46 $0.46 $0.46 $0.49
Net realized and unrealized gain (loss) on investments (0.09) (0.19) 0.01 0.44 (0.16)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.35 $0.27 $0.47 $0.90 $0.33
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.44) $(0.47) $(0.47) $(0.49) $(0.50)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.73 $9.82 $10.02 $10.02 $9.61
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 3.59 2.76 4.77 9.48 3.45
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 0.89 0.83 0.82 0.84 0.85
Expenses after expense reductions (f) 0.64 0.58 0.62 0.64 0.65
Net investment income 4.48 4.70 4.61 4.70 5.05
Portfolio turnover 9 19 12 22 6
Net assets at end of period (000 Omitted) $75,597 $79,574 $82,507 $87,724 $76,004
- ---------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
-----------------------------------------------------------
CLASS B 2006 2005 2004 2003 2002
Net asset value, beginning of period $9.84 $10.03 $10.04 $9.62 $9.79
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.37 $0.39 $0.38 $0.38 $0.42
Net realized and unrealized gain (loss) on investments (0.10) (0.19) (0.01)(g) 0.44 (0.17)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.27 $0.20 $0.37 $0.82 $0.25
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.37) $(0.39) $(0.38) $(0.40) $(0.42)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.74 $9.84 $10.03 $10.04 $9.62
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 2.71 2.08 3.80 8.67 2.62
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.65 1.60 1.64 1.67 1.65
Expenses after expense reductions (f) 1.40 1.35 1.44 1.47 1.45
Net investment income 3.72 3.93 3.79 3.86 4.23
Portfolio turnover 9 19 12 22 6
Net assets at end of period (000 Omitted) $10,465 $11,544 $13,177 $12,900 $10,177
- ---------------------------------------------------------------------------------------------------------------------------------
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 are based on average shares outstanding
(f) Ratios do not reflect reductions from fees paid indirectly.
(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 amount of per share realized and unrealized gains and losses at such time.
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NEW YORK 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. This information has been audited by the fund's independent registered
public accounting firm, whose report, together with the fund's financial statements, are included in this report.
YEARS ENDED 3/31
----------------------------------------------------------------
CLASS A 2006 2005 2004 2003 2002
Net asset value, beginning of period $11.30 $11.53 $11.49 $10.94 $11.14
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.49 $0.51 $0.51 $0.52 $0.53
Net realized and unrealized gain (loss) on investments (0.12) (0.24) 0.04 0.56 (0.18)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.37 $0.27 $0.55 $1.08 $0.35
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.49) $(0.50) $(0.51) $(0.53) $(0.55)
From net realized gain on investments (0.05) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.54) $(0.50) $(0.51) $(0.53) $(0.55)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.13 $11.30 $11.53 $11.49 $10.94
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 3.30 2.45 4.90 10.05 3.16
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.10 1.04 1.06 1.07 1.08
Expenses after expense reductions (f) 0.85 0.79 0.86 0.87 0.88
Net investment income 4.36 4.47 4.39 4.56 4.80
Portfolio turnover 12 20 13 17 18
Net assets at end of period (000 Omitted) $118,476 $125,861 $131,642 $132,843 $121,717
- ---------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
----------------------------------------------------------------
CLASS B 2006 2005 2004 2003 2002
Net asset value, beginning of period $11.27 $11.49 $11.45 $10.93 $11.13
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.41 $0.42 $0.42 $0.43 $0.45
Net realized and unrealized gain (loss) on investments (0.14) (0.22) 0.04 0.54 (0.19)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.27 $0.20 $0.46 $0.97 $0.26
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.40) $(0.42) $(0.42) $(0.45) $(0.46)
From net realized gain on investments (0.05) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.45) $(0.42) $(0.42) $(0.45) $(0.46)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.09 $11.27 $11.49 $11.45 $10.93
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 2.43 1.77 4.12 8.96 2.39
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.85 1.79 1.80 1.82 1.83
Expenses after expense reductions (f) 1.60 1.54 1.60 1.62 1.63
Net investment income 3.61 3.70 3.62 3.80 4.05
Portfolio turnover 12 20 13 17 18
Net assets at end of period (000 Omitted) $30,046 $35,328 $41,509 $40,867 $29,903
- ---------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NEW YORK MUNICIPAL BOND FUND - CONTINUED
YEARS ENDED 3/31
-----------------------------------------------------------
CLASS C 2006 2005 2004 2003 2002
Net asset value, beginning of period $11.29 $11.51 $11.47 $10.93 $11.13
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.41 $0.42 $0.42 $0.43 $0.45
Net realized and unrealized gain (loss) on investments (0.14) (0.22) 0.04 0.56 (0.18)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.27 $0.20 $0.46 $0.99 $0.27
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.40) $(0.42) $(0.42) $(0.45) $(0.47)
From net realized gain on investments (0.05) -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.45) $(0.42) $(0.42) $(0.45) $(0.47)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.11 $11.29 $11.51 $11.47 $10.93
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 2.43 1.78 4.12 9.14 2.39
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.85 1.79 1.80 1.82 1.83
Expenses after expense reductions (f) 1.60 1.54 1.60 1.62 1.63
Net investment income 3.61 3.72 3.63 3.81 4.05
Portfolio turnover 12 20 13 17 18
Net assets at end of period (000 Omitted) $17,064 $19,730 $21,907 $14,005 $10,178
- ---------------------------------------------------------------------------------------------------------------------------------
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.
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NORTH CAROLINA 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. This information has been audited by the fund's independent registered
public accounting firm, whose report, together with the fund's financial statements, are included in this report.
YEARS ENDED 3/31
----------------------------------------------------------------
CLASS A 2006 2005 2004 2003 2002
Net asset value, beginning of period $11.99 $12.30 $12.24 $11.68 $11.89
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.51 $0.53 $0.53 $0.54 $0.57
Net realized and unrealized gain (loss) on investments (0.09) (0.27) 0.07 0.58 (0.21)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.42 $0.26 $0.60 $1.12 $0.36
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.51) $(0.53) $(0.53) $(0.56) $(0.57)
From net realized gain on investments (0.05) (0.04) (0.01) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.56) $(0.57) $(0.54) $(0.56) $(0.57)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.85 $11.99 $12.30 $12.24 $11.68
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 3.49 2.15 5.01 9.71 3.08
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.14 1.10 1.12 1.11 1.12
Expenses after expense reductions (f) 0.89 0.85 0.92 0.91 0.92
Net investment income 4.24 4.38 4.30 4.50 4.78
Portfolio turnover 8 9 9 20 13
Net assets at end of period (000 Omitted) $270,124 $279,875 $305,185 $316,687 $303,250
- ---------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
----------------------------------------------------------------
CLASS B 2006 2005 2004 2003 2002
Net asset value, beginning of period $11.98 $12.29 $12.23 $11.67 $11.89
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.43 $0.45 $0.45 $0.47 $0.48
Net realized and unrealized gain (loss) on investments (0.10) (0.27) 0.07 0.57 (0.20)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.33 $0.18 $0.52 $1.04 $0.28
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.43) $(0.45) $(0.45) $(0.48) $(0.50)
From net realized gain on investments (0.05) (0.04) (0.01) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.48) $(0.49) $(0.46) $(0.48) $(0.50)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.83 $11.98 $12.29 $12.23 $11.67
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 2.73 1.49 4.33 9.01 2.33
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.79 1.75 1.76 1.76 1.77
Expenses after expense reductions (f) 1.54 1.50 1.56 1.56 1.57
Net investment income 3.59 3.72 3.64 3.85 4.07
Portfolio turnover 8 9 9 20 13
Net assets at end of period (000 Omitted) $32,610 $40,251 $50,363 $59,116 $57,534
- ---------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) NORTH CAROLINA MUNICIPAL BOND FUND - CONTINUED
YEARS ENDED 3/31
-----------------------------------------------------------
CLASS C 2006 2005 2004 2003 2002
Net asset value, beginning of period $11.98 $12.29 $12.23 $11.67 $11.89
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.43 $0.45 $0.45 $0.46 $0.48
Net realized and unrealized gain (loss) on investments (0.09) (0.27) 0.07 0.58 (0.20)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.34 $0.18 $0.52 $1.04 $0.28
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.43) $(0.45) $(0.45) $(0.48) $(0.50)
From net realized gain on investments (0.05) (0.04) (0.01) -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.48) $(0.49) $(0.46) $(0.48) $(0.50)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.84 $11.98 $12.29 $12.23 $11.67
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%) (r)(s)(t) 2.82 1.49 4.33 9.01 2.33
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.79 1.76 1.77 1.76 1.77
Expenses after expense reductions (f) 1.54 1.51 1.57 1.56 1.57
Net investment income 3.61 3.76 3.67 3.84 4.07
Portfolio turnover 8 9 9 20 13
Net assets at end of period (000 Omitted) $32,223 $32,897 $35,256 $31,836 $23,741
- ---------------------------------------------------------------------------------------------------------------------------------
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.
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) PENNSYLVANIA 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. This information has been audited by the fund's independent registered
public accounting firm, whose report, together with the fund's financial statements, are included in this report.
YEARS ENDED 3/31
-----------------------------------------------------------
CLASS A 2006 2005 2004 2003 2002
Net asset value, beginning of period $10.17 $10.31 $10.21 $9.73 $9.85
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.43 $0.44 $0.42 $0.45 $0.48
Net realized and unrealized gain (loss) on investments (0.02) (0.14) 0.10 0.51 (0.11)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.41 $0.30 $0.52 $0.96 $0.37
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.43) $(0.44) $(0.42) $(0.48) $(0.49)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.15 $10.17 $10.31 $10.21 $9.73
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%)(r)(s)(t) 4.08 2.97 5.12 10.12 3.85
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 0.96 0.94 0.94 0.96 0.89
Expenses after expense reductions (f) 0.60 0.60 0.64 0.48 0.36
Net investment income 4.24 4.33 4.12 4.47 4.90
Portfolio turnover 9 20 24 19 19
Net assets at end of period (000 Omitted) $72,429 $67,942 $75,083 $68,705 $47,661
- ---------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
----------------------------------------------------------------
CLASS B 2006 2005 2004 2003 2002
Net asset value, beginning of period $10.20 $10.34 $10.24 $9.75 $9.88
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.36 $0.36 $0.34 $0.36 $0.40
Net realized and unrealized gain (loss) on investments (0.03) (0.14) 0.10 0.53 (0.12)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.33 $0.22 $0.44 $0.89 $0.28
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.35) $(0.36) $(0.34) $(0.40) $(0.41)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.18 $10.20 $10.34 $10.24 $9.75
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%)(r)(s)(t) 3.30 2.19 4.38 9.21 2.86
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.72 1.71 1.74 1.78 1.73
Expenses after expense reductions (f) 1.36 1.37 1.44 1.30 1.20
Net investment income 3.49 3.56 3.32 3.62 4.06
Portfolio turnover 9 20 24 19 19
Net assets at end of period (000 Omitted) $38,642 $41,455 $48,480 $46,941 $28,286
- ---------------------------------------------------------------------------------------------------------------------------------
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.
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) SOUTH CAROLINA 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. This information has been audited by the fund's independent registered
public accounting firm, whose report, together with the fund's financial statements, are included in this report.
YEARS ENDED 3/31
----------------------------------------------------------------
CLASS A 2006 2005 2004 2003 2002
Net asset value, beginning of period $12.36 $12.61 $12.53 $12.00 $12.15
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.54 $0.56 $0.55 $0.58 $0.60
Net realized and unrealized gain (loss) on investments (0.11) (0.25) 0.10 0.54 (0.16)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.43 $0.31 $0.65 $1.12 $0.44
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.54) $(0.56) $(0.57) $(0.59) $(0.59)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.25 $12.36 $12.61 $12.53 $12.00
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%)(r)(s)(t) 3.48 2.52 5.30 9.51 3.68
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.17 1.14 1.14 1.15 1.14
Expenses after expense reductions (f) 0.92 0.89 0.94 0.95 0.94
Net investment income 4.35 4.50 4.39 4.68 4.91
Portfolio turnover 13 15 16 21 10
Net assets at end of period (000 Omitted) $131,167 $130,342 $137,911 $129,844 $121,438
- ---------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
----------------------------------------------------------------
CLASS B 2006 2005 2004 2003 2002
Net asset value, beginning of period $12.36 $12.60 $12.52 $11.99 $12.14
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.46 $0.48 $0.47 $0.50 $0.52
Net realized and unrealized gain (loss) on investments (0.12) (0.24) 0.10 0.54 (0.16)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.34 $0.24 $0.57 $1.04 $0.36
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.46) $(0.48) $(0.49) $(0.51) $(0.51)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $12.24 $12.36 $12.60 $12.52 $11.99
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%)(r)(s)(t) 2.73 1.94 4.62 8.81 3.01
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.82 1.79 1.79 1.80 1.79
Expenses after expense reductions (f) 1.57 1.54 1.59 1.60 1.59
Net investment income 3.70 3.85 3.74 4.03 4.25
Portfolio turnover 13 15 16 21 10
Net assets at end of period (000 Omitted) $26,214 $31,032 $36,817 $37,603 $34,139
- ---------------------------------------------------------------------------------------------------------------------------------
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) TENNESSEE 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. This information has been audited by the fund's independent registered
public accounting firm, whose report, together with the fund's financial statements, are included in this report.
YEARS ENDED 3/31
---------------------------------------------------------------
CLASS A 2006 2005 2004 2003 2002
Net asset value, beginning of period $10.71 $10.96 $10.90 $10.43 $10.58
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.45 $0.45 $0.45 $0.47 $0.49
Net realized and unrealized gain (loss) on investments (0.12) (0.18) 0.06 0.49 (0.14)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.33 $0.27 $0.51 $0.96 $0.35
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.44) $(0.44) $(0.45) $(0.49) $(0.50)
From net realized gain on investments (0.04) (0.08) -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.48) $(0.52) $(0.45) $(0.49) $(0.50)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.56 $10.71 $10.96 $10.90 $10.43
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%)(r)(s)(t) 3.13 2.53 4.80 9.34 3.36
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.19 1.16 1.14 1.17 1.14
Expenses after expense reductions (f) 0.94 0.91 0.94 0.97 0.94
Net investment income 4.17 4.16 4.08 4.35 4.66
Portfolio turnover 5 11 19 16 12
Net assets at end of period (000 Omitted) $98,825 $104,837 $118,990 $115,819 $101,294
- ---------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
----------------------------------------------------------------
CLASS B 2006 2005 2004 2003 2002
Net asset value, beginning of period $10.70 $10.95 $10.89 $10.42 $10.57
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.38 $0.38 $0.38 $0.40 $0.42
Net realized and unrealized gain (loss) on investments (0.11) (0.18) 0.06 0.49 (0.14)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.27 $0.20 $0.44 $0.89 $0.28
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.37) $(0.37) $(0.38) $(0.42) $(0.43)
From net realized gain on investments (0.04) (0.08) -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(0.41) $(0.45) $(0.38) $(0.42) $(0.43)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.56 $10.70 $10.95 $10.89 $10.42
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%)(r)(s)(t) 2.56 1.87 4.12 8.64 2.69
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.84 1.81 1.79 1.82 1.79
Expenses after expense reductions (f) 1.59 1.56 1.59 1.62 1.59
Net investment income 3.52 3.51 3.43 3.70 4.00
Portfolio turnover 5 11 19 16 12
Net assets at end of period (000 Omitted) $17,217 $20,689 $24,306 $27,546 $26,183
- ---------------------------------------------------------------------------------------------------------------------------------
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) VIRGINIA 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. This information has been audited by the fund's independent registered
public accounting firm, whose report, together with the fund's financial statements, are included in this report.
YEARS ENDED 3/31
----------------------------------------------------------------
CLASS A 2006 2005 2004 2003 2002
Net asset value, beginning of period $11.52 $11.73 $11.61 $11.14 $11.36
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.51 $0.53 $0.53 $0.53 $0.54
Net realized and unrealized gain (loss) on investments (0.12) (0.21) 0.12 0.47 (0.22)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.39 $0.32 $0.65 $1.00 $0.32
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.50) $(0.53) $(0.53) $(0.53) $(0.54)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.41 $11.52 $11.73 $11.61 $11.14
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%)(r)(s)(t) 3.45 2.83 5.70 9.10 2.87
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.15 1.10 1.13 1.13 1.12
Expenses after expense reductions (f) 0.90 0.85 0.93 0.93 0.92
Net investment income 4.38 4.63 4.53 4.62 4.77
Portfolio turnover 13 11 11 13 14
Net assets at end of period (000 Omitted) $277,633 $285,185 $301,218 $308,164 $299,088
- ---------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
----------------------------------------------------------------
CLASS B 2006 2005 2004 2003 2002
Net asset value, beginning of period $11.51 $11.72 $11.60 $11.13 $11.35
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.43 $0.46 $0.45 $0.46 $0.47
Net realized and unrealized gain (loss) on investments (0.11) (0.21) 0.12 0.46 (0.22)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.32 $0.25 $0.57 $0.92 $0.25
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.43) $(0.46) $(0.45) $(0.45) $(0.47)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.40 $11.51 $11.72 $11.60 $11.13
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%)(r)(s)(t) 2.78 2.16 5.02 8.40 2.20
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.80 1.75 1.77 1.78 1.78
Expenses after expense reductions (f) 1.55 1.50 1.57 1.58 1.58
Net investment income 3.73 3.98 3.88 3.97 4.12
Portfolio turnover 13 11 11 13 14
Net assets at end of period (000 Omitted) $16,885 $19,637 $23,564 $25,470 $26,970
- ---------------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) VIRGINIA MUNICIPAL BOND FUND - CONTINUED
YEARS ENDED 3/31
-----------------------------------------------------------
CLASS C 2006 2005 2004 2003 2002
Net asset value, beginning of period $11.52 $11.72 $11.61 $11.13 $11.36
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.43 $0.46 $0.45 $0.45 $0.47
Net realized and unrealized gain (loss) on investments (0.11) (0.20) 0.11 0.48 (0.23)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.32 $0.26 $0.56 $0.93 $0.24
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.43) $(0.46) $(0.45) $(0.45) $(0.47)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.41 $11.52 $11.72 $11.61 $11.13
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%)(r)(s)(t) 2.78 2.25 4.93 8.49 2.10
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.80 1.75 1.77 1.78 1.77
Expenses after expense reductions (f) 1.55 1.50 1.57 1.58 1.57
Net investment income 3.72 3.98 3.88 3.97 4.10
Portfolio turnover 13 11 11 13 14
Net assets at end of period (000 Omitted) $12,995 $12,208 $13,338 $12,758 $10,619
- ---------------------------------------------------------------------------------------------------------------------------------
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.
(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.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL HIGHLIGHTS, MFS(R) WEST VIRGINIA 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. This information has been audited by the fund's independent registered
public accounting firm, whose report, together with the fund's financial statements, are included in this report.
YEARS ENDED 3/31
----------------------------------------------------------------
CLASS A 2006 2005 2004 2003 2002
Net asset value, beginning of period $11.58 $11.82 $11.77 $11.32 $11.45
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.48 $0.51 $0.51 $0.55 $0.57
Net realized and unrealized gain (loss) on investments (0.11) (0.25) 0.05 0.46 (0.14)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.37 $0.26 $0.56 $1.01 $0.43
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.48) $(0.50) $(0.51) $(0.56) $(0.56)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.47 $11.58 $11.82 $11.77 $11.32
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%)(r)(s)(t) 3.21 2.28 4.84 9.04 3.79
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.17 1.14 1.13 1.16 1.13
Expenses after expense reductions (f) 0.92 0.89 0.93 0.96 0.93
Net investment income 4.16 4.35 4.33 4.71 4.97
Portfolio turnover 7 14 17 13 2
Net assets at end of period (000 Omitted) $134,416 $134,459 $140,599 $139,564 $121,860
- ---------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED 3/31
----------------------------------------------------------------
CLASS B 2006 2005 2004 2003 2002
Net asset value, beginning of period $11.58 $11.82 $11.76 $11.31 $11.44
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.41 $0.43 $0.43 $0.47 $0.50
Net realized and unrealized gain (loss) on investments (0.13) (0.24) 0.06 0.46 (0.15)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.28 $0.19 $0.49 $0.93 $0.35
- ---------------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.40) $(0.43) $(0.43) $(0.48) $(0.48)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.46 $11.58 $11.82 $11.76 $11.31
- ---------------------------------------------------------------------------------------------------------------------------------
Total return (%)(r)(s)(t) 2.45 1.62 4.25 8.34 3.12
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS) AND
SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.82 1.79 1.78 1.81 1.79
Expenses after expense reductions (f) 1.57 1.54 1.58 1.61 1.59
Net investment income 3.51 3.71 3.68 4.06 4.31
Portfolio turnover 7 14 17 13 2
Net assets at end of period (000 Omitted) $12,388 $14,334 $17,744 $19,443 $16,248
- ---------------------------------------------------------------------------------------------------------------------------------
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.
(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.
SEE NOTES TO FINANCIAL STATEMENTS
(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 (the trust). The trust 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 (other than short-term instruments),
including restricted debt instruments, are generally valued at an evaluated bid
price as reported by an independent pricing service. Values of debt instruments
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. Short-term instruments with a maturity at issuance of 365 days or less
are generally valued at amortized cost, which approximates market value. Swaps
are generally valued on the basis of quotations from brokers and dealers.
Securities and other assets generally valued on the basis of information from
an independent pricing service may also be valued on the basis of information
from brokers and dealers. When pricing-service information or market quotations
are not readily available, securities are priced at fair value as determined
under the direction of the Board of Trustees.
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.
Derivative instruments include swap agreements.
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 Statement of Operations. The value of the swap is adjusted daily
and the change in value is recorded as unrealized appreciation or depreciation
in the Statement of Operations. Risks may arise upon entering into these
agreements from the potential inability of counterparties to meet the terms of
their contract and from unanticipated changes in the value of the financial
index on which the swap agreement is based.
Interest Rate Swap Agreements - Interest rate swap agreements are agreements to
exchange cash flows periodically based on a notional principal amount, such as
the exchange of fixed rate interest payments for floating rate interest
payments, which are based on a specific financial index, or the exchange of two
distinct floating rate payments. The net receivable or payable associated with
these payments is accrued daily and recorded as an unrealized gain or loss, and
any payments received or made are recorded as realized gains or losses, in the
Statement of Operations. The primary risk associated with interest rate swap
agreements is that unfavorable changes in the fluctuation of interest rates
could adversely impact the funds.
Short Term Fees - For purchases made on or after July 1, 2004 and before April
1, 2005, each fund charged a 2% redemption fee (which was retained by each
fund) on proceeds from Class A, Class B, and Class C shares redeemed or
exchanged within 5 business days following their acquisition (either by
purchase or exchange). Effective April 1, 2005, each fund will no longer charge
a redemption fee. See each fund's prospectus for details. Any redemption fees
charged are accounted for as an addition to paid-in capital.
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. All premium and
original issue discount is amortized or accreted for tax reporting purposes as
required by federal income tax regulations.
Each fund may receive proceeds from litigation settlements involving its
portfolio holdings. Any proceeds received are reflected in realized gain/loss
in the Statement of Operations, or in unrealized gain/loss if the security is
still held by the fund.
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 is 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, 2006, is shown as a
reduction of total expenses on the Statement of Operations.
Tax Matters and Distributions - Each fund intends to continue 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. Accordingly, no provision for federal income
tax is required in the 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 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, wash sale loss deferrals, 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:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
YEAR ENDED MARCH 31, 2006 FUND FUND FUND FUND FUND FUND FUND FUND
Ordinary income (including
any short-term capital
gains) $-- $-- $398,095 $-- $-- $178,774 $-- $--
Tax-exempt income 3,825,714 7,075,051 14,172,501 4,383,989 6,716,613 4,915,444 13,450,458 6,029,196
Long-term capital gain -- 800,147 930,835 -- -- 272,746 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions $3,825,714 $7,875,198 $15,501,431 $4,383,989 $6,716,613 $5,366,964 $13,450,458 $6,029,196
YEAR ENDED MARCH 31, 2005
Ordinary income (including
any short-term capital
gains) $-- $-- $338,971 $-- $7,152,028 $194,393 $-- $35,541
Tax-exempt income 4,288,716 7,823,631 15,104,858 4,481,113 36,036 5,259,087 14,692,962 6,402,713
Long-term capital gain -- -- 1,184,575 -- -- 713,987 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions $4,288,716 $7,823,631 $16,628,404 $4,481,113 $7,188,064 $6,167,467 $14,692,962 $6,438,254
The federal tax cost and the tax basis components of distributable earnings were as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
AS OF MARCH 31, 2006 FUND FUND FUND FUND FUND FUND FUND FUND
Cost of investments $81,370,159 $153,098,806 $310,081,560 $105,130,780 $147,510,016 $108,427,579 $290,015,566 $137,513,232
- -----------------------------------------------------------------------------------------------------------------------------------
Gross appreciation $3,355,431 $9,986,521 $18,739,736 $4,083,736 $8,658,413 $5,835,077 $14,375,942 $7,069,833
Gross depreciation (116,477) (150,846) (210,640) (132,159) (121,926) (78,937) (391,833) (103,947)
- -----------------------------------------------------------------------------------------------------------------------------------
Net unrealized
appreciation
(depreciation) $3,238,954 $9,835,675 $18,529,096 $3,951,577 $8,536,487 $5,756,140 $13,984,109 $6,965,886
Undistributed ordinary
income $-- $42,588 $-- $-- $-- $-- $-- $--
Undistributed tax-exempt
income 198,486 76,149 586,480 162,694 445,131 154,994 276,734 228,967
Undistributed long-term
capital gain -- 528,821 -- -- -- -- -- --
Capital loss
carryforwards (317,125) -- -- (190,380) (615,121) -- -- (221,741)
Post-October capital loss
deferral (21,979) -- -- -- -- -- (69,610) --
Other temporary differences (283,657) (466,763) (964,966) (262,134) (390,175) (562,666) (1,116,101) (415,320)
As of March 31, 2006, certain funds had available capital loss carryforwards to offset future realized gains. Such losses expire
as follows:
MISSISSIPPI PENNSYLVANIA SOUTH CAROLINA WEST VIRGINIA
EXPIRATION DATE FUND FUND FUND FUND
March 31, 2009 $-- $-- $(615,121) $(75,960)
March 31, 2010 -- -- -- (83,347)
March 31, 2012 -- (190,380) -- --
March 31, 2013 (287,448) -- -- (62,434)
March 31, 2014 (29,677) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total $(317,125) $(190,380) $(615,121) $(221,741)
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 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 shares will convert
to Class A shares approximately eight years after purchase.
(3) TRANSACTIONS WITH AFFILIATES
Investment Adviser - The trust has an investment advisory agreement with MFS to provide overall investment advisory and
administrative services, and general office facilities. 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, 2006, this waiver amounted to the following for each fund and is reflected as a
reduction of total expenses in the Statement of Operations.
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
$219,717 $434,859 $866,378 $278,607 $399,362 $305,648 $783,646 $371,168
The management fee incurred for the year ended March 31, 2006 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 contractually agreed to pay a portion of the fund's 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 contractual fee arrangement will continue until August 1,
2006. For the year ended March 31, 2006 this reduction amounted to $120,502 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
amounts for the year ended March 31, 2006, as its portion of the initial sales charge on sales of Class A shares of the funds.
MISSISSIPPI NEW YORK NORTH CAROLINA PENNSYLVANIA SOUTH CAROLINA TENNESSEE VIRGINIA WEST VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
$36,917 $32,543 $48,878 $54,052 $53,030 $15,995 $54,548 $59,371
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 Fee Plan Table:
CLASS A
--------------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
Mississippi Fund 0.10% 0.25% 0.35% -- $--
New York Fund 0.10% 0.25% 0.35% 0.25% 306,731
North Carolina Fund 0.10% 0.25% 0.35% 0.35% 969,752
Pennsylvania Fund 0.10% 0.25% 0.35% 0.10% 71,057
South Carolina Fund 0.10% 0.25% 0.35% 0.35% 458,345
Tennessee Fund 0.10% 0.25% 0.35% 0.35% 360,973
Virginia Fund 0.10% 0.25% 0.35% 0.35% 987,845
West Virginia Fund 0.10% 0.25% 0.35% 0.35% 472,504
CLASS B
--------------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
Mississippi Fund 0.75% 0.25% 1.00% 0.76% $84,973
New York Fund 0.75% 0.25% 1.00% 1.00% 330,385
North Carolina Fund 0.75% 0.25% 1.00% 1.00% 366,281
Pennsylvania Fund 0.75% 0.25% 1.00% 0.86% 347,368
South Carolina Fund 0.75% 0.25% 1.00% 1.00% 287,788
Tennessee Fund 0.75% 0.25% 1.00% 1.00% 190,984
Virginia Fund 0.75% 0.25% 1.00% 1.00% 185,897
West Virginia Fund 0.75% 0.25% 1.00% 1.00% 134,611
CLASS C
--------------------------------------------------------------------------------------------
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
New York Fund 0.75% 0.25% 1.00% 1.00% $181,680
North Carolina Fund 0.75% 0.25% 1.00% 1.00% 328,032
Virginia Fund 0.75% 0.25% 1.00% 1.00% 126,012
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
Total Distribution and
Service Fees $84,973 $818,796 $1,664,065 $418,425 $746,133 $551,957 $1,299,754 $607,115
(1) 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.
(2) The annual effective rates represent actual fees incurred under the distribution plan for the year ended March 31, 2006
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 are not yet implemented and will commence on such date as the Trustees of the Trust may
determine. Except in the case of the 0.25% annual Class B service fee paid by the Mississippi Fund upon the sale of Class B
shares in the first year, payment of the Class B service fee will not be implemented until such date as the Trustees of the
Trust may determine. Payment of the New York Fund's 0.10% annual Class A distribution fee is not yet implemented and will
commence on such date as the Trustees of the Trust may determine. Payment of the Pennsylvania Fund's 0.10% annual Class A
distribution fee is not yet implemented and will commence on such date as the Trustees of the Trust 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 implemented and will commence on such date as the Trustees of the Trust may determine.
Except in the case of the 0.25% annual Class B service fee paid by the Pennsylvania Fund upon the sale of Class B shares in
the first year, the Class B service fee has been set at 0.10% annually and may be increased to a maximum of 0.25% annually
on such date as the Trustees of the Trust 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, 2006, were as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
CDSC IMPOSED FUND FUND FUND FUND FUND FUND FUND FUND
Class A $-- $-- $-- $901 $137 $-- $3,586 $3,924
Class B 12,550 63,111 78,328 79,310 41,905 32,750 28,120 28,095
Class C N/A 1,491 3,994 N/A N/A N/A 1,619 N/A
Shareholder Servicing Agent - Each fund pays a portion of shareholder servicing costs to MFS Service Center, Inc. (MFSC), a
wholly-owned subsidiary of MFS. MFSC receives a fee from the funds', for its services as shareholder servicing agent, set
periodically under the supervision of the funds' Board of Trustees. For the year ended March 31, 2006, each fund paid MFSC the
following fee, which equated to the following annual percentage of each fund's average daily net assets for shareholder
services.
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
Expenses paid $92,562 $183,682 $365,689 $117,352 $168,397 $128,989 $330,601 $156,514
Percentage of average
daily net assets 0.1056% 0.1056% 0.1055% 0.1053% 0.1054% 0.1055% 0.1055% 0.1054%
MFSC also receives payment from each fund for out-of-pocket and sub-accounting expenses paid by MFSC on behalf of the funds. For
the year ended March 31, 2006, these costs amounted to the following:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
$31,625 $51,023 $111,575 $27,359 $40,228 $28,805 $72,709 $31,652
Administrator - MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services
to certain funds for which MFS acts as investment adviser. Under an administrative services agreement, the funds may partially
reimburse MFS the costs incurred to provide these services, subject to review and approval by the Board of Trustees. Each fund
is charged a fixed amount plus a fee based on calendar year average net assets. Effective July 1, 2005, each fund's annual fixed
amount is $10,000. The administrative services fee incurred for the year ended March 31, 2006 was equivalent to the following
annual effective rates of each fund's average daily net assets:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
Percentage of average
daily net assets 0.0199% 0.0157% 0.0135% 0.0180% 0.0160% 0.0175% 0.0137% 0.0163%
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
who are officers of the investment adviser, or to officers of each fund, 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 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, 2006.
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
$1,161 $1,612 $3,141 $1,197 $3,096 $1,425 $3,127 $3,091
The deferred liability for retirement benefits payable to retired Trustees amounted to the following for each fund at March 31,
2006, and is included in payable for independent trustees' compensation.
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
$9,834 $12,845 $15,474 $9,716 $15,432 $12,801 $15,500 $15,429
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, 2006, the
fees paid to Tarantino LLC amounted to the following:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
$587 $1,172 $2,319 $747 $1,071 $820 $3,027 $995
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.
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
$584 $1,040 $1,889 $653 $972 $723 $1,860 $906
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than U.S. government securities, purchased option transactions, and short-term
obligations were as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
Purchases $7,370,638 $20,298,941 $27,904,787 $12,854,080 $20,123,471 $5,427,424 $40,721,663 $12,124,714
- -----------------------------------------------------------------------------------------------------------------------------------
Sales $9,479,866 $31,159,252 $37,060,077 $9,900,191 $22,517,387 $13,377,719 $48,080,889 $10,290,796
- -----------------------------------------------------------------------------------------------------------------------------------
(5) SHARES OF BENEFICIAL INTEREST
The Trust's Declaration permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest.
Transactions in each funds' shares were as follows:
MISSISSIPPI FUND NEW YORK FUND
---------------------------------------------------- --------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2006 MARCH 31, 2005 MARCH 31, 2006 MARCH 31, 2005
------------------------- ------------------------- ------------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 866,381 $8,546,452 848,592 $8,374,011 653,127 $7,390,698 815,176 $9,246,436
Class B 24,252 239,436 67,946 671,256 138,910 1,569,384 189,036 2,134,993
Class C -- -- -- -- 134,687 1,526,215 254,356 2,882,371
- ----------------------------------------------------------------------------------------------------------------------------------
890,633 $8,785,888 916,538 $9,045,267 926,724 $10,486,297 1,258,568 $14,263,800
Shares issued to shareholders in reinvestment of distributions
Class A 185,126 $1,824,861 202,129 $1,995,326 324,484 $3,670,111 341,492 $3,876,961
Class B 21,153 208,716 26,931 266,210 74,060 834,700 82,381 932,304
Class C -- -- -- -- 39,815 449,550 40,923 464,049
- -----------------------------------------------------------------------------------------------------------------------------------
206,279 $2,033,577 229,060 $2,261,536 438,359 $4,954,361 464,796 $5,273,314
Shares reacquired
Class A (1,380,138) $(13,645,231) (1,181,606) $(11,628,233) (1,469,796) $(16,663,402) (1,439,174) $(16,299,898)
Class B (144,591) (1,426,794) (234,324) (2,311,215) (640,793) (7,238,245) (746,624) (8,419,453)
Class C -- -- -- -- (387,465) (4,383,903) (450,082) (5,098,504)
- -----------------------------------------------------------------------------------------------------------------------------------
(1,524,729) $(15,072,025) (1,415,930) $(13,939,448) (2,498,054) $(28,285,550) (2,635,880) $(29,817,855)
Net change
Class A (328,631) $(3,273,918) (130,885) $(1,258,896) (492,185) $(5,602,593) (282,506) $(3,176,501)
Class B (99,186) (978,642) (139,447) (1,373,749) (427,823) (4,834,161) (475,207) (5,352,156)
Class C -- -- -- -- (212,963) (2,408,138) (154,803) (1,752,084)
- -----------------------------------------------------------------------------------------------------------------------------------
(427,817) $(4,252,560) (270,332) $(2,632,645) (1,132,971) $(12,844,892) (912,516) $(10,280,741)
NORTH CAROLINA FUND PENNSYLVANIA FUND
---------------------------------------------------- --------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2006 MARCH 31, 2005 MARCH 31, 2006 MARCH 31, 2005
------------------------- ------------------------- ------------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 1,314,537 $15,818,825 1,143,651 $13,851,656 1,258,762 $12,897,989 939,866 $9,572,613
Class B 132,671 1,590,635 226,499 2,727,665 275,025 2,820,655 219,277 2,233,233
Class C 271,600 3,270,481 350,544 4,238,404 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
1,718,808 $20,679,941 1,720,694 $20,817,725 1,533,787 $15,718,644 1,159,143 $11,805,846
Shares issued to shareholders in reinvestment of distributions
Class A 698,501 $8,393,304 801,691 $9,697,346 185,707 $1,901,237 199,352 $2,028,705
Class B 69,832 838,029 89,784 1,084,499 87,173 894,888 103,442 1,054,750
Class C 79,561 954,980 86,256 1,042,409 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
847,894 $10,186,313 977,731 $11,824,254 272,880 $2,796,125 302,794 $3,083,455
Shares reacquired
Class A (2,554,557) $(30,727,514) (3,418,210) $(41,256,336) (990,703) $(10,143,698) (1,740,181) $(17,572,031)
Class B (807,609) (9,719,958) (1,054,515) (12,698,157) (631,297) (6,480,350) (946,568) (9,606,585)
Class C (375,266) (4,513,810) (560,837) (6,768,295) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
(3,737,432) $(44,961,282) (5,033,562) $(60,722,788) (1,622,000) $(16,624,048) (2,686,749) $(27,178,616)
Net change
Class A (541,519) $(6,515,385) (1,472,868) $(17,707,334) 453,766 $4,655,528 (600,963) $(5,970,713)
Class B (605,106) (7,291,294) (738,232) (8,885,993) (269,099) (2,764,807) (623,849) (6,318,602)
Class C (24,105) (288,349) (124,037) (1,487,482) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
(1,170,730) $(14,095,028) (2,335,137) $(28,080,809) 184,667 $1,890,721 (1,224,812) $(12,289,315)
SOUTH CAROLINA FUND TENNESSEE FUND
---------------------------------------------------- --------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2006 MARCH 31, 2005 MARCH 31, 2006 MARCH 31, 2005
------------------------- ------------------------- ------------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 1,132,204 $14,046,582 950,794 $11,757,607 493,536 $5,305,262 807,064 $8,690,294
Class B 85,307 1,056,145 141,911 1,753,969 79,543 857,100 100,093 1,078,899
- -----------------------------------------------------------------------------------------------------------------------------------
1,217,511 $15,102,727 1,092,705 $13,511,576 573,079 $6,162,362 907,157 $9,769,193
Shares issued to shareholders in reinvestment of distributions
Class A 307,593 $3,815,307 331,066 $4,103,455 210,399 $2,255,583 305,347 $3,294,671
Class B 54,579 676,705 71,169 881,385 40,963 439,012 55,569 599,037
- -----------------------------------------------------------------------------------------------------------------------------------
362,172 $4,492,012 402,235 $4,984,840 251,362 $2,694,595 360,916 $3,893,708
Shares reacquired
Class A (1,274,850) $(15,823,297) (1,676,720) $(20,679,951) (1,135,271) $(12,170,537) (2,185,685) $(23,511,524)
Class B (510,226) (6,331,745) (623,153) (7,698,788) (422,094) (4,536,883) (442,829) (4,764,261)
- -----------------------------------------------------------------------------------------------------------------------------------
(1,785,076) $(22,155,042) (2,299,873) $(28,378,739) (1,557,365) $(16,707,420) (2,628,514) $(28,275,785)
Net change
Class A 164,947 $2,038,592 (394,860) $(4,818,889) (431,336) $(4,609,692) (1,073,274) $(11,526,559)
Class B (370,340) (4,598,895) (410,073) (5,063,434) (301,588) (3,240,771) (287,167) (3,086,325)
- -----------------------------------------------------------------------------------------------------------------------------------
(205,393) $(2,560,303) (804,933) $(9,882,323) (732,924) $(7,850,463) (1,360,441) $(14,612,884)
VIRGINIA FUND WEST VIRGINIA FUND
---------------------------------------------------- --------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, 2006 MARCH 31, 2005 MARCH 31, 2006 MARCH 31, 2005
------------------------- ------------------------- ------------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 1,481,053 $17,100,137 1,462,579 $16,951,475 767,854 $8,913,846 649,571 $7,566,744
Class B 138,191 1,599,934 170,166 1,965,225 78,236 910,206 79,286 924,193
Class C 152,773 1,767,443 153,081 1,777,770 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
1,772,017 $20,467,514 1,785,826 $20,694,470 846,090 $9,824,052 728,857 $8,490,937
Shares issued to shareholders in reinvestment of distributions
Class A 610,984 $7,063,585 708,987 $8,198,785 325,732 $3,779,345 363,462 $4,229,391
Class B 33,680 389,119 43,470 502,212 23,338 270,745 32,505 377,803
Class C 26,043 300,916 29,691 343,223 -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
670,707 $7,753,620 782,148 $9,044,220 349,070 $4,050,090 395,967 $4,607,194
Shares reacquired
Class A (2,517,056) $(29,092,777) (3,103,223) $(35,811,466) (981,278) $(11,390,785) (1,296,913) $(15,044,930)
Class B (396,940) (4,587,647) (518,696) (5,990,259) (258,946) (3,004,395) (375,140) (4,362,666)
Class C (99,697) (1,152,730) (260,460) (2,995,655) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
(3,013,693) $(34,833,154) (3,882,379) $(44,797,380) (1,240,224) $(14,395,180) (1,672,053) $(19,407,596)
Net change
Class A (425,019) $(4,929,055) (931,657) $(10,661,206) 112,308 $1,302,406 (283,880) $(3,248,795)
Class B (225,069) (2,598,594) (305,060) (3,522,822) (157,372) (1,823,444) (263,349) (3,060,670)
Class C 79,119 915,629 (77,688) (874,662) -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
(570,969) $(6,612,020) (1,314,405) $(15,058,690) (45,064) $(521,038) (547,229) $(6,309,465)
(6) LINE OF CREDIT
Each fund and other affiliated funds participate in a $1 billion unsecured line of credit provided by a syndication of banks
under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its
borrowings, at a rate equal to the Federal Reserve funds rate plus 0.35%. In addition, a commitment fee, based on the average
daily, unused portion of the line of credit, is allocated among the participating funds at the end of each calendar quarter. The
commitment fee allocated to each fund for the year ended March 31, 2006 ranged from $563 to $2,216, and is included in
miscellaneous expense on the Statement of Operations. None of the funds had significant borrowings during the year ended March
31, 2006.
(7) CONCENTRATION OF CREDIT RISK
Since each fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to
factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. The
risk associated with such factors is mitigated by the fact that a percentage of securities in a portfolio of investments are
backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. At
March 31, 2006, the percentage of holdings that carried such enhancements were as follows:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
Total: 78.86% 39.05% 49.67% 68.60% 73.75% 68.48% 40.51% 79.57%
For each fund, the greatest exposure to any one institution or agency did not exceed the following percentages of total
investments as of March 31, 2006:
NORTH SOUTH WEST
MISSISSIPPI NEW YORK CAROLINA PENNSYLVANIA CAROLINA TENNESSEE VIRGINIA VIRGINIA
FUND FUND FUND FUND FUND FUND FUND FUND
Single Insurer: 23.11% 15.26% 17.41% 19.26% 22.84% 36.53% 10.71% 35.43%
To the Trustees and 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 of MFS Municipal
Series Trust (the "Trust"), as of March 31, 2006, 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, 2006, 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, such financial statements and financial highlights present
fairly, in all material respects, the financial positions 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 as of March 31, 2006, 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 23, 2006
TRUSTEES AND OFFICERS -- IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust, as of May 1, 2006, 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.
TRUSTEE/
POSITION(s) HELD OFFICER PRINCIPAL OCCUPATIONS DURING THE PAST FIVE YEARS &
NAME, DATE OF BIRTH WITH FUND SINCE(H) OTHER DIRECTORSHIPS(J)
---------------------------------------------------------------------
INTERESTED TRUSTEES
Robert J. Manning(k) Trustee February 2004 Massachusetts Financial Services Company, Chief Executive Officer,
(born 10/20/63) President, Chief Investment Officer and Director
Robert C. Pozen(k) Trustee February 2004 Massachusetts Financial Services Company, Chairman (since February
(born 08/08/46) 2004); 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
INDEPENDENT TRUSTEES
J. Atwood Ives Trustee and Chair of February 1992 Private investor; Eastern Enterprises (diversified services company),
(born 05/01/36) Trustees Chairman, Trustee and Chief Executive Officer (until November 2000)
Robert E. Butler(n) Trustee January 2006 Consultant - regulatory and compliance matters (since July 2002);
(born 11/29/41) PricewaterhouseCoopers LLP (professional services firm), Partner
(November 2000 until June 2002)
Lawrence H. Cohn, M.D. Trustee August 1993 Brigham and Women's Hospital, Senior Cardiac Surgeon, Chief of
(born 03/11/37) Cardiac Surgery (until 2005); Harvard Medical School, Professor of
Surgery; Brigham and Women's Hospital Physicians' Organization,
Chair (2000 to 2004)
David H. Gunning Trustee January 2004 Cleveland-Cliffs Inc. (mining products and service provider), Vice
(born 05/30/42) Chairman/ Director (since April 2001); Encinitos Ventures (private
investment company), Principal (1997 to April 2001); Lincoln
Electric Holdings, Inc. (welding equipment manufacturer), Director
William R. Gutow Trustee December 1993 Private investor and real estate consultant; Capitol Entertainment
(born 09/27/41) Management Company (video franchise), Vice Chairman
Michael Hegarty Trustee December 2004 Retired; AXA Financial (financial services and insurance), Vice
(born 12/21/44) 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 Trustee July 1981 Hemenway & Barnes (attorneys), Partner
(born 06/23/35)
J. Dale Sherratt Trustee August 1993 Insight Resources, Inc. (acquisition planning specialists),
(born 09/23/38) 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 Trustee March 2005 Private investor; Prism Venture Partners (venture capital),
(born 08/05/57) Co-founder and General Partner (until June 2004); St. Paul Travelers
Companies (commercial property liability insurance), Director
Robert W. Uek Trustee January 2006 Retired (since 1999); PricewaterhouseCoopers LLP (professional
(born 05/18/41) 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
Maria F. Dwyer(k) President November 2005 Massachusetts Financial Services Company, Executive Vice President
(born 12/01/58) and Chief Regulatory Officer (since March 2004); Fidelity Management
& Research Company, Vice President (prior to March 2004); Fidelity
Group of Funds, President and Treasurer (prior to March 2004)
Tracy Atkinson(k) Treasurer September 2005 Massachusetts Financial Services Company, Senior Vice President
(born 12/30/64) (since September 2004); PricewaterhouseCoopers LLP, Partner (prior
to September 2004)
Christopher R. Bohane(k) Assistant Secretary July 2005 Massachusetts Financial Services Company, Vice President and Senior
(born 1/18/74) and Assistant Clerk Counsel (since April 2003); Kirkpatrick & Lockhart LLP (law firm),
Associate (prior to April 2003); Nvest Services Company, Assistant
Vice President and Associate Counsel (prior to January 2001)
Ethan D. Corey(k) Assistant Secretary July 2005 Massachusetts Financial Services Company, Special Counsel (since
(born 11/21/63) and Assistant Clerk December 2004); Dechert LLP (law firm), Counsel (prior to December
2004)
David L. DiLorenzo(k) Assistant Treasurer July 2005 Massachusetts Financial Services Company, Vice President (since
(born 8/10/68) June 2005); JP Morgan Investor Services, Vice President (January
2001 to June 2005); State Street Bank, Vice President and Corporate
Audit Manager (prior to January 2001)
Timothy M. Fagan(k) Assistant Secretary September 2005 Massachusetts Financial Services Company, Vice President and Senior
(born 7/10/68) and Assistant Clerk 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) Assistant Treasurer July 2005 Massachusetts Financial Services Company, Vice President (since May
(born 10/27/70) 2005); JP Morgan Investment Management Company, Vice President
(prior to May 2005)
Ellen Moynihan(k) Assistant Treasurer April 1997 Massachusetts Financial Services Company, Senior
(born 11/13/57) Vice President
Susan S. Newton(k) Assistant Secretary May 2005 Massachusetts Financial Services Company, Senior Vice President and
(born 03/07/50) and Assistant Clerk 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) Assistant Secretary July 2005 Massachusetts Financial Services Company, Vice President and Senior
(born 11/05/70) and Assistant Clerk Counsel (since June 2004); Bingham McCutchen LLP (law firm),
Associate (January 2001 to June 2004); Preti, Flaherty, Beliveau,
Pachios & Haley, LLC, Associate (prior to January 2001)
Mark N. Polebaum(k) Secretary and Clerk January 2006 Massachusetts Financial Services Company, Executive Vice President,
(born 05/01/52) General Counsel and Secretary (since January 2006); Wilmer Cutler
Pickering Hale and Dorr LLP (law firm), Partner (prior to January
2006)
Frank L. Tarantino Independent Chief June 2004 Tarantino LLC (provider of compliance services), Principal (since
(born 03/07/44) Compliance Officer 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 (February 1997 to March 2003)
James O. Yost(k) Assistant Treasurer September 1990 Massachusetts Financial Services Company, Senior Vice President
(born 06/12/60)
- --------------
(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.
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, 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 December 31, 2005,
each Trustee served as a board member of 98 funds within the MFS Family of Funds.
The Trust held a shareholders' meeting in 2005, and will hold a shareholders' meeting at least once every five years thereafter,
to elect Trustees.
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 State Street Bank and Trust Company
500 Boylston Street, Boston, MA 225 Franklin Street, Boston, MA 02110
02116-3741
INDEPENDENT REGISTERED PUBLIC
DISTRIBUTOR ACCOUNTING FIRM
MFS Fund Distributors, Inc. Deloitte & Touche LLP
500 Boylston Street, Boston, MA 200 Berkeley Street, Boston, MA 02116
02116-3741
PORTFOLIO MANAGER
Michael Dawson
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 1-202-551-5850. 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 2006 income
tax forms in January 2007. The following information is provided pursuant to
provisions of the Internal Revenue Code.
The funds below designated the following amounts as capital gain dividends paid
during the fiscal year.
CAPITAL GAINS
New York Fund 882,849
North Carolina Fund 930,835
Tennessee Fund 315,108
Virginia Fund 56,016
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 99.78%
Virginia Fund 100.00%
West Virginia Fund 100.00%
CONTACT INFORMATION
INVESTOR SERVICE
Write to us at: MFS Service Center, Inc.
P.O. Box 55824
Boston, MA 02205-5824
Type of Information Phone number Hours, Eastern Time
- -------------------------------------------------------------------------------------------------------------------
General information 1-800-225-2606 8 a.m. to 8 p.m., any business day
- -------------------------------------------------------------------------------------------------------------------
Speech- or hearing-impaired 1-800-637-6576 9 a.m. to 5 p.m., any business day
- -------------------------------------------------------------------------------------------------------------------
Share prices, account balances, exchanges 1-800-MFS-TALK (1-800-637-8255)
or stock and bond outlooks touch-tone required 24 hours a day, 365 days a year
- -------------------------------------------------------------------------------------------------------------------
M F S(SM)
INVESTMENT MANAGEMENT(R)
MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc., 500
Boylston Street, Boston, MA 02116.
MST-B-ANN-05/06 30M
MFS(R) MUNICIPAL INCOME FUND 3/31/06
ANNUAL REPORT
- -------------------------------------------------------------------------------
LETTER FROM THE CEO 1
- ---------------------------------------------------
PORTFOLIO COMPOSITION 2
- ---------------------------------------------------
MANAGEMENT REVIEW 3
- ---------------------------------------------------
PERFORMANCE SUMMARY 4
- ---------------------------------------------------
EXPENSE TABLE 6
- ---------------------------------------------------
PORTFOLIO OF INVESTMENTS 8
- ---------------------------------------------------
FINANCIAL STATEMENTS 27
- ---------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 34
- ---------------------------------------------------
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM 41
- ---------------------------------------------------
TRUSTEES AND OFFICERS 42
- ---------------------------------------------------
BOARD REVIEW OF INVESTMENT ADVISORY AGREEMENT 47
- ---------------------------------------------------
PROXY VOTING POLICIES AND INFORMATION 47
- ---------------------------------------------------
QUARTERLY PORTFOLIO DISCLOSURE 47
- ---------------------------------------------------
FEDERAL TAX INFORMATION 47
- ---------------------------------------------------
CONTACT INFORMATION BACK COVER
- ---------------------------------------------------
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.
M F S(SM)
INVESTMENT MANAGEMENT(R)
LETTER FROM THE CEO
[Photo of Robert J. Manning]
Dear Shareholders,
It has been said that change is the only constant in life. As investors have
seen, that theme is still accurate today as we recently have experienced
shifting economic cycles because of natural disasters and political
instability around the globe.
Markets worldwide have fluctuated in the past year as devastating hurricanes
had a dramatic effect on the international economy, particularly on oil
prices. We witnessed political unrest in the Middle East, highlighted by
instability in Iraq, and in Africa, the usually stable Nigeria also
experienced violence. As a result, energy prices have bounced up and down,
with crude oil prices at one point topping a record $70 per barrel.
Such cycles are not uncommon and in fact have almost become the norm in our
everyday lives. What does all of this mean to you as an investor? In times like
these, it helps to know that you're working with a seasoned investment
professional who has experience to guide you through difficult times. At
MFS(R), we believe our investment management team has the knowledge and
confidence to navigate through difficult cycles and at the same time see
through adversity to find investment opportunities for our clients and
shareholders.
Our investment management process, honed over 80 years, combines a unique
concept of teamwork with our unwavering focus on the long term. We firmly
believe that the best way to realize long-term financial goals - be it a
college education, a comfortable retirement, or a secure family legacy - is to
follow a three-pronged approach that focuses on longer time horizons. Allocate
holdings across the major asset classes - including stocks, bonds, and cash.
Diversify within each class to take advantage of different market segments and
investing styles. Rebalance assets regularly to maintain a desired asset
allocation. Of course, these strategies cannot guarantee a profit or protect
against a loss. This long-term approach requires diligence and patience, two
traits that in our experience are essential to capitalizing on the many
opportunities the financial markets can offer - through both up and down
economic cycles.
Respectfully,
/s/ Robert J. Manning
Robert J. Manning
Chief Executive Officer and Chief Investment Officer
MFS Investment Management(R)
May 15, 2006
The opinions expressed in this letter are those of MFS, and no forecasts can
be guaranteed.
PORTFOLIO COMPOSITION
Bonds 99.3%
Cash & Other Net Assets 0.7%
TOP 5 BOND INDUSTRIES (i)
Health/Hospitals 19.6%
------------------------------------------------
General Obligations/Schools 9.1%
------------------------------------------------
General Obligations/General Purpose 7.7%
------------------------------------------------
Municipal-Owned Utilities 6.4%
------------------------------------------------
Water/Sewer 5.7%
------------------------------------------------
CREDIT QUALITY OF BONDS (r)
AAA 36.4%
------------------------------------------------
AA 11.7%
------------------------------------------------
A 16.0%
------------------------------------------------
BBB 20.6%
------------------------------------------------
BB 4.1%
------------------------------------------------
B 1.9%
------------------------------------------------
CCC 0.4%
------------------------------------------------
Not Rated 8.9%
------------------------------------------------
PORTFOLIO FACTS
Average Duration (d) 5.9
------------------------------------------------
Average Life (m) 14.4 yrs.
------------------------------------------------
Average Maturity (m) 16.8 yrs.
------------------------------------------------
Average Credit Quality of
Rated Securities (a) A+
------------------------------------------------
Average Short Term Credit Quality 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 price is likely to fluctuate with
general changes in interest rates, e.g., if rates rise 1.00%, a fund with a
5-year duration is likely to lose about 5.00% of its value.
(i) For purposes of this graphical presentation, the bond component includes
both accrued interest amounts and 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 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 a "AAA"-rating
category. Percentages are based on the total market value of investments as
of 3/31/06.
Percentages are based on net assets as of 3/31/06, unless otherwise noted.
The portfolio is actively managed, and current holdings may be different.
MANAGEMENT REVIEW
SUMMARY OF RESULTS
For the twelve months ended March 31, 2006, Class A shares of the MFS
Municipal Income Fund provided a total return of 4.18%, at net asset value. In
comparison, the fund's benchmark, the Lehman Brothers Municipal Bond Index
(the Lehman Index), returned 3.81%.
CONTRIBUTORS TO PERFORMANCE
The fund benefited from holding lower-quality "BBB"-rated(s) securities and
below-investment-grade debt. During the period, spreads in these credit
sectors narrowed due to strong demands for higher-yielding securities, causing
prices on these securities to appreciate. (The Lehman Index is composed
primarily of higher-grade securities with no bonds rated lower than "BBB").
Strong security selection in the utilities sector also bolstered relative
returns. A combination of security selection and overweighted positions in the
health care sector also helped relative performance.
DETRACTORS FROM PERFORMANCE
Yield curve(y) positioning had a small negative effect on relative results.
Overweighting the short-to-intermediate portion of the curve (represented by
bonds with durations(d) of 0- to 8- years) detracted as this area
underperformed the index. Additionally, underweighting the longer end of the
curve (represented by bonds with durations of 11- to 14- years) hindered
relative results as rates in that area decreased over the reporting period.
Respectively,
Geoffrey L. 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 by S&P as "BBB" or higher are considered investment grade;
bonds rated "BB" or lower are considered non-investment grade.
(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
and 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.
PERFORMANCE SUMMARY THROUGH 3/31/06
THE FOLLOWING CHART ILLUSTRATES THE HISTORICAL PERFORMANCE OF THE FUND'S
ORIGINAL SHARE CLASS IN COMPARISON TO ITS BENCHMARK. PERFORMANCE RESULTS
INCLUDE ANY APPLICABLE CONTINGENT DEFERRED 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. FOR MOST RECENT MONTH-END
PERFORMANCE, PLEASE VISIT MFS.COM. 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
MFS Municipal Lehman Brothers
Income Fund -- Municipal Bond
Class A Index
3/96 $ 9,525 $10,000
3/97 9,933 10,547
3/98 11,086 11,677
3/99 11,658 12,400
3/00 11,524 12,390
3/01 12,568 13,744
3/02 12,917 14,261
3/03 13,950 15,671
3/04 14,919 16,590
3/05 15,439 17,032
3/06 16,085 17,682
TOTAL RETURNS THROUGH 3/31/06
AVERAGE ANNUAL WITHOUT SALES CHARGE
Share class Class inception date 1-yr 5-yr 10-yr
- ---------------------------------------------------------------------------
A 9/07/93 4.18% 5.06% 5.38%
- ---------------------------------------------------------------------------
B 12/29/86 3.40% 4.27% 4.58%
- ---------------------------------------------------------------------------
C 1/03/94 3.41% 4.29% 4.61%
- ---------------------------------------------------------------------------
AVERAGE ANNUAL
Comparative benchmarks
- ---------------------------------------------------------------------------
Average general municipal debt fund (l) 3.48% 4.44% 4.97%
- ---------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index (f) 3.81% 5.17% 5.86%
- ---------------------------------------------------------------------------
AVERAGE ANNUAL WITH SALES CHARGE
Share class 1-yr 5-yr 10-yr
- ---------------------------------------------------------------------------
A -0.77% 4.04% 4.87%
With Initial Sales Charge (4.75%)
- ---------------------------------------------------------------------------
B -0.57% 3.93% 4.58%
With CDSC (Declining over six years from 4% to 0%)
- ---------------------------------------------------------------------------
C 2.41% 4.29% 4.61%
With CDSC (1% for 12 months) (x)
- ---------------------------------------------------------------------------
CDSC - Contingent Deferred Sales Charge.
(f) Source: FactSet Research Systems, Inc.
(l) Source: Lipper Inc., an independent firm that reports mutual fund
performance.
(x) Assuming redemption within one year from the end of the prior month of
purchase.
INDEX DEFINITION
Lehman Brothers Municipal Bond Index - a market-value-weighted index
representative of the tax-exempt bond market.
It is not possible to invest directly in an index.
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.
EXPENSE TABLE
FUND EXPENSES BORNE BY THE SHAREHOLDERS DURING THE PERIOD,
OCTOBER 1, 2005 THROUGH MARCH 31, 2006.
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 redemption fees on certain exchanges and redemptions, and (2)
ongoing costs, including management fees; distribution and service (12b-1)
fees; and other trust 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, 2005 through
March 31, 2006.
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) or redemption fees. 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.
- -------------------------------------------------------------------------------
Expenses
Paid During
Annualized Beginning Ending Period(p)
Share Expense Account Value Account Value 10/01/05-
Class Ratio 10/01/05 3/31/06 3/31/06
- --------------------------------------------------------------------------------
Actual 0.81% $1,000.00 $1,011.80 $4.06
A ------------------------------------------------------------------------
Hypothetical (h) 0.81% $1,000.00 $1,020.89 $4.08
- --------------------------------------------------------------------------------
Actual 1.56% $1,000.00 $1,008.10 $7.81
B -------------------------------------------------------------------------
Hypothetical (h) 1.56% $1,000.00 $1,017.15 $7.85
- --------------------------------------------------------------------------------
Actual 1.57% $1,000.00 $1,009.20 $7.86
C ------------------------------------------------------------------------
Hypothetical (h) 1.57% $1,000.00 $1,017.10 $7.90
- --------------------------------------------------------------------------------
(h) 5% class return per year before expenses.
(p) Expenses paid is equal to each class' annualized expense ratio, as shown
above, multiplied by the average account value over the period, multiplied
by the number of days in the period, divided by the number of days in the
year. Expenses paid do not include any applicable sales charges (loads) or
redemption fees. If these transaction costs had been included, your costs
would have been higher.
PORTFOLIO OF INVESTMENTS - 3/31/06
The Portfolio of Investments is a complete list of all
securities owned by your fund. It is categorized by broad-based
asset classes.
Municipal Bonds - 98.0%
- --------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- --------------------------------------------------------------------------------------------------
Airport & Port Revenue - 2.7%
- --------------------------------------------------------------------------------------------------
Chicago, IL, O'Hare International Airport Rev. (2nd Lien
Passenger Facility D), AMBAC, 5.5%, 2019 $ 350,000 $ 373,618
Chicago, IL, O'Hare International Airport Rev., RITES, FSA,
7.461%, 2022 (z)(v) 1,500,000 1,760,940
Chicago, IL, O'Hare International Airport Rev., Third Lien,
"A", FGIC, 5%, 2033 235,000 242,668
Chicago, IL, O'Hare International Airport Rev., Third Lien,
"A", MBIA, 5%, 2029 950,000 984,020
Indianapolis, IN, Local Public Improvement (Airport Authority
Project), "I", MBIA, 5%, 2034 200,000 201,818
Louisville & Jefferson County, KY, Regional Airport Authority,
"A", MBIA, 6.5%, 2017 3,000,000 3,146,280
Miami-Dade County, FL, Aviation Revenue, "A", CIFG, 5%, 2038 500,000 509,455
New York City, NY, City Industrial Development Agency, Special
Facilities Rev. (Terminal One Group), 5.5%, 2024 195,000 204,885
Oklahoma City, OK, Airport Trust, "B", FSA, 5.75%, 2017 1,080,000 1,141,733
------------
$ 8,565,417
- --------------------------------------------------------------------------------------------------
Chemicals - 0.3%
- --------------------------------------------------------------------------------------------------
Red River Authority, TX, Pollution Control Rev. (Celanese
Project), 6.7%, 2030 $ 1,000,000 $ 1,058,970
- --------------------------------------------------------------------------------------------------
General Obligations - General Purpose - 7.6%
- --------------------------------------------------------------------------------------------------
Chicago, IL (Lakefront Millennium Parking Facilities), MBIA,
5%, 2018 $ 4,000,000 $ 4,180,600
Chicago, IL (Lakefront Millennium Parking Facilities), MBIA,
0% to 2006, 5.7% to 2025 645,000 699,174
Commonwealth of Massachusetts, 5.875%, 2009 (c) 3,205,000 3,448,965
Commonwealth of Puerto Rico, ROLS, FGIC, 7.763%, 2015 (z)(v) 3,000,000 3,674,340
Cranston, RI, FGIC, 6.375%, 2009 (c) 200,000 220,028
Houston County, AL, AMBAC, 6.25%, 2009 (c) 850,000 937,482
Huntsville, AL, Capital Improvement Warrants, "C", MBIA,
5%, 2024 195,000 203,227
Interlocken Metropolitan District, CO, Improvement, "C", XLCA,
0%, 2027 510,000 148,828
Kane Kendall County, IL, Capital Appreciation, "E", FGIC,
0%, 2023 1,360,000 567,759
Kane Kendall County, IL, Capital Appreciation, "E", FGIC,
0%, 2025 1,335,000 497,381
Massachusetts State Consolidated Loan, "C", 5%, 2025 1,390,000 1,452,522
Mobile County, AL, 6%, 2009 (c) 800,000 856,976
New York City, NY, "J", 5%, 2030 320,000 329,254
New York City, NY, "J", MBIA, 5%, 2017 2,000,000 2,077,340
San Antonio, TX, 5%, 2020 700,000 719,047
Southlake, TX, AMBAC, 0%, 2009 (c) 3,185,000 1,219,218
Southlake, TX, AMBAC, 0%, 2009 (c) 3,150,000 1,127,826
State of Illinois, MBIA, 5.5%, 2025 110,000 115,243
State of Wisconsin, "C", 6%, 2010 (c) 1,200,000 1,302,468
------------
$ 23,777,678
- --------------------------------------------------------------------------------------------------
General Obligations - Improvement - 1.6%
- --------------------------------------------------------------------------------------------------
Birmingham, AL, "A", 5.75%, 2017 $ 1,000,000 $ 1,079,260
Worcester, MA, FSA, 6%, 2010 (c) 3,475,000 3,802,936
------------
$ 4,882,196
- --------------------------------------------------------------------------------------------------
General Obligations - Schools - 9.0%
- --------------------------------------------------------------------------------------------------
Adams 12 Five Star Schools, CO, "B", FGIC, 0%, 2025 $ 490,000 $ 183,495
De Soto, TX, Independent School District, School Building, PSF,
0%, 2031 380,000 103,109
De Soto, TX, Independent School District, School Building, PSF,
0%, 2034 285,000 65,365
De Soto, TX, Independent School District, School Building, PSF,
0%, 2036 380,000 78,557
Detroit, MI, City School District, "B", FGIC, 5%, 2009 (c) 2,000,000 2,093,860
Dudley-Charlton, MA, Regional School District, RITES, FGIC,
6.542%, 2013 (z)(v) 1,495,000 1,792,565
Ennis, TX, Independent School District, Capital Appreciation,
"N", PSF, 0%, 2028 200,000 63,736
Ennis, TX, Independent School District, Capital Appreciation,
"N", PSF, 0%, 2029 385,000 120,574
Ennis, TX, Independent School District, Capital Appreciation,
"N", PSF, 0%, 2031 380,000 103,109
Ferris, TX, Independent School District, PSF, 5.5%, 2034 640,000 687,462
Florida State Board of Education Capital Outlay, Public
Education, "A", 5%, 2019 1,000,000 1,033,150
Fresno, CA, Unified School District, MBIA, 6.55%, 2020 1,225,000 1,429,881
Goose Creek, TX, Consolidated School District, PSF,
5%, 2009 (c) 2,500,000 2,588,925
Houston, TX, Independent School District, RITES,
6.519%, 2017 (z)(v) 2,325,000 2,527,740
Keller, TX, Independent School District, PSF, 6%, 2017 225,000 244,521
Knox County, KY, Independent School District, XLCA, 5.5%, 2029 640,000 697,875
Lancaster, TX, Independent School District, Capital
Appreciation, FSA, 0%, 2025 275,000 106,959
Lancaster, TX, Independent School District, Capital
Appreciation, FSA, 0%, 2014 (c) 485,000 168,266
Lancaster, TX, Independent School District, Capital
Appreciation, FSA, 0%, 2026 275,000 101,340
Lancaster, TX, Independent School District, Capital
Appreciation, FSA, 0%, 2014 (c) 430,000 140,279
Leander, TX, Independent School District, Capital Appreciation,
Refunding, School Building, FGIC, 0%, 2026 900,000 316,404
Leander, TX, Independent School District, Capital Appreciation,
Refunding, School Building, FGIC, 0%, 2031 910,000 237,055
Leander, TX, Independent School District, PSF, 0%, 2018 2,500,000 1,252,550
Manchester, NH, School Facilities Rev., MBIA, 5.5%, 2027 215,000 247,332
Manchester, NH, School Facilities Rev., MBIA, 5.5%, 2028 215,000 247,577
Manistee, MI, Area Public Schools, FGIC, 5.75%, 2009 (c) 700,000 742,756
Marshall, MI, Public School District, 5.5%, 2011 (c) 500,000 540,780
Phenix City, AL, AMBAC, 5.65%, 2021 1,500,000 1,625,025
Philadelphia, PA, School District, MBIA, 6%, 2010 (c) 750,000 811,598
Roma, TX, Independent School District, PSF, 5.875%, 2010 (c) 1,705,000 1,852,295
San Jose Evergreen, CA, Community College District, Election
2004, "A", MBIA, 0%, 2028 740,000 233,418
Wattsburg, PA, Public School Building Authority Rev., Capital
Appreciation, MBIA, 0%, 2029 2,150,000 710,317
Williamson County, TN, Rural School, 6.125%, 2010 (c) 1,665,000 1,809,239
Williamson County, TN, Rural School, 6.125%, 2010 (c) 1,765,000 1,917,902
Wylie, TX, Independent School District, PSF, 5.25%, 2029 1,080,000 1,138,352
------------
$ 28,013,368
------------
Healthcare Revenue - Hospitals - 19.3%
- --------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev. (West
Penn Allegheny Health), 9.25%, 2030 $ 650,000 $ 776,068
Allegheny County, PA, Hospital Development Authority Rev. (West
Penn Allegheny Health), "B", 9.25%, 2022 350,000 417,883
Baldwin County, AL, Eastern Shore Health Care Authority Rev
(Thomas Hospital), 5.75%, 2008 (c) 600,000 634,890
Baxter County, AR, Hospital Rev., 5.375%, 2014 1,000,000 1,030,160
Chemung County, NY, Civic Facilities Rev. (St. Joseph's
Hospital-Elmira), "A", 6%, 2013 600,000 598,698
Colorado Health Facilities Authority Rev. (Portercare Adventist
Health Systems), 6.625%, 2011 (c) 500,000 574,250
Cuyahoga County, OH, Hospital Facilities Rev. (Canton, Inc.),
7.5%, 2030 900,000 994,365
Denver, CO, Health & Hospital Authority Rev., 5.375%, 2018 300,000 305,199
Denver, CO, Health & Hospital Authority Rev., "A", 6%, 2023 500,000 529,625
District of Columbia, Health & Hospital Authority Rev. (Medstar
University Hospital), "D", 6.875%, 2007 (c) 700,000 719,586
Fulton County, NY, Industrial Development Agency, Civic
Facilities Rev. (Nathan Littauer Hospital), "A", 5.75%, 2009 205,000 204,461
Gainesville & Hall County, GA, Hospital Authority Rev
(Northeast Georgia Health System, Inc.), 5.5%, 2031 445,000 459,151
Gulfport, MS, Hospital Facilities Rev. (Memorial Hospital),
5.75%, 2031 500,000 511,965
Henrico County, VA, Industrial Development Authority Rev. (Bon
Secours) RIBS, FSA, 8.431%, 2027 (v) 5,000,000 6,441,900
Highlands County, FL, Health Facilities Authority Rev
(Adventist/Sunbelt Hospital), 6%, 2011 (c) 350,000 376,863
Illinois Health Facilities Authority Rev. (Condell Medical
Center), 6.35%, 2015 1,000,000 1,064,600
Illinois Health Facilities Authority Rev. (Decatur Memorial
Hospital), 5.75%, 2024 350,000 364,336
Illinois Health Facilities Authority Rev. (Passavant Memorial
Area Hospital Associates), 6%, 2024 335,000 360,363
Illinois Health Facilities Authority Rev. (Riverside Health
Systems), 5.75%, 2022 650,000 670,111
Illinois Health Facilities Authority Rev. (Sinai Health), FHA,
5.15%, 2037 640,000 658,509
Indiana Health Facilities Financing Authority, Hospital Rev
(Deaconess Hospital), "A", AMBAC, 5.375%, 2034 565,000 598,714
Indiana Health Facilities Financing Authority, Hospital Rev
(Clarian Health), "A", 5%, 2039 760,000 753,890
Indiana Health Facilities Financing Authority, Hospital Rev
(Munster Medical Research Foundation, Inc.), 6.375%, 2031 500,000 524,985
Indiana Health Facilities Financing Authority, Hospital Rev
(Munster Medical Research Foundation, Inc.), 6.375%, 2021 1,700,000 1,786,156
Indiana Health Facilities Financing Authority, Hospital Rev
(Riverview Hospital), 5.25%, 2014 400,000 407,772
Indiana Health Facilities Financing Authority, Hospital Rev
(Riverview Hospital), 6.125%, 2031 250,000 261,128
Kentucky Economic Development Finance Authority, Health Systems
Rev. (Norton Healthcare, Inc.), 6.5%, 2020 1,250,000 1,357,113
Kentucky Economic Development Finance Authority, Health Systems
Rev. (Norton Healthcare, Inc.), 6.625%, 2028 250,000 271,195
Kentucky Economic Development Finance Authority, Refunding &
Improvement, "A", MBIA, 5%, 2018 2,400,000 2,488,656
Knox County, TN, Health Educational Hospital Facility (Baptist
Health Systems, East Tennessee), 6.375%, 2022 1,000,000 1,052,080
Lauderdale County & Florence, AL (Coffee Health Group), "A",
MBIA, 5.25%, 2019 1,100,000 1,145,199
Macomb County, MI, Hospital Finance Authority Rev. (Mount
Clemens General Hospital), 5.75%, 2025 1,000,000 1,024,690
Marion County, FL, Hospital District Rev. (Monroe Hospital),
5.625%, 2019 750,000 781,410
Marshall County, AL, Health Care Rev., "A", 6.25%, 2022 500,000 532,250
Martin County, FL, Health Facilities Rev. (Martin Memorial
Medical Center), "B", 5.75%, 2022 850,000 900,932
Maryland Health & Higher Educational Facilities Authority Rev.
(Medstar Health), 5.5%, 2033 305,000 316,142
Maryland Health & Higher Educational Facilities Authority Rev.
(University of Maryland Medical System), 6.75%, 2010 (c) 1,000,000 1,122,520
Massachusetts Health & Educational Facilities Authority Rev
(Caritas Christi), 6.5%, 2012 400,000 433,388
Massachusetts Health & Educational Facilities Authority Rev
(Caritas Christi), 5.7%, 2015 1,000,000 1,039,900
Massachusetts Health & Educational Facilities Authority Rev
(Partners Healthcare Systems), 5.75%, 2021 400,000 436,212
Mecosta County, MI, General Hospital Rev., 6%, 2018 300,000 305,700
Miami Beach, FL, Health Facilities Rev. (Mount Sinai Medical
Center), "A", 6.7%, 2019 750,000 823,583
Michigan Hospital Finance Authority Rev. (Memorial Healthcare
Center), 5.75%, 2015 800,000 835,944
Montgomery, AL, Special Care Facilities, Financing Authority
Rev. (Baptist Health), "A-2", MBIA, 0% to 2007, 5% to 2014 (c) 1,270,000 1,239,279
Mount Lebanon, PA, Hospital Authority Rev. (St. Clair Memorial
Hospital), 5.625%, 2032 375,000 390,454
Nassau County, NY, Industrial Development Agency, Civic
Facilities Rev. (North Shore Health System), 5.875%, 2011 330,000 346,843
New Hampshire Health & Educational Facilities Authority Rev
(Covenant Health), 6.5%, 2017 870,000 969,876
New Hampshire Health & Educational Facilities Authority Rev
(Exeter Hospital), 6%, 2024 500,000 546,405
New Jersey Health Care Facilities (Palisades Medical Center),
6.5%, 2021 500,000 543,550
North Texas Health Facilities Development Corp. Rev. (United
Regional Health Care System, Inc.), 6%, 2023 1,000,000 1,072,070
Ohio County, WV, County Commission Health System Rev. (Ohio
Valley Medical Center), 5.75%, 2013 900,000 856,098
Oklahoma Development Finance Authority Rev. (Comanche County
Hospital), 6%, 2014 600,000 657,750
Oklahoma Development Finance Authority Rev. (Comanche County
Hospital), 6.6%, 2031 255,000 276,624
Rhode Island Health & Education Building Rev., Hospital
Financing (Lifespan Obligated Group), "A", FSA, 5%, 2032 1,120,000 1,151,282
Rhode Island Health & Education Building Rev., Hospital
Financing (Lifespan Obligated Group), 6.5%, 2012 (c) 1,500,000 1,717,740
Royston, GA, Hospital Authority Rev. (Ty Cobb Healthcare
Systems, Inc.), 6.5%, 2027 290,000 271,501
Shelby County, TN, Educational & Housing Facilities Board
Hospital Rev. (Methodist Healthcare), 6%, 2012 (c) 300,000 335,394
Shelby County, TN, Educational & Housing Facilities Board
Hospital Rev. (Methodist Healthcare), 6%, 2012 (c) 500,000 558,990
South Carolina Jobs & Economic Development Authority, Hospital
Facilities Rev. (Palmetto Health Alliance), 6.25%, 2031 500,000 538,840
Steubenville, OH, Hospital Rev. (Trinity Hospital),
6.375%, 2020 300,000 328,236
Stillwater, OK, Medical Center Authority (Stillwater Medical
Center), 6.5%, 2007 (c) 1,000,000 1,049,920
Suffolk County, NY, Industrial Development Agency, Civic
Facilities Rev. (Huntington Hospital), "C", 5.875%, 2032 1,000,000 1,046,180
Tallahassee, FL, Health Facilities Rev. (Tallahassee Memorial
Healthcare), 6.25%, 2020 1,000,000 1,057,220
Tom Green County, TX, Health Facilities Rev. (Shannon Health
System), 6.75%, 2021 400,000 428,616
Upper Illinois River Valley Development, Health Facilities Rev.
(Morris Hospital), 6.625%, 2031 500,000 542,565
Valley, AL, Special Care Facilities Financing (Lanier Memorial
Hospital), 5.5%, 2007 500,000 500,500
Wapello County, IA, Hospital Authority Rev. (Ottumwa Regional
Health Center), 6.375%, 2031 750,000 788,325
Weirton, WV, Municipal Hospital Building, Commission Rev
(Weirton Hospital Medical Center), 6.375%, 2031 500,000 502,415
West Plains, MO, Industrial Development Authority Rev. (Ozarks
Medical Center), 6.75%, 2024 195,000 199,838
West Shore, PA, Hospital Authority (Holy Spirit Hospital),
6.25%, 2032 1,000,000 1,063,650
Wichita, KS, Hospital Authority Rev. (Via Christi Health
System), 6.25%, 2019 1,500,000 1,659,345
Wisconsin Health & Educational Facilities Authority Rev
(Agnesian Healthcare, Inc.), 6%, 2017 325,000 345,010
Wisconsin Health & Educational Facilities Authority Rev
(Aurora Health Care, Inc.), 6.875%, 2030 750,000 854,835
Wisconsin Health & Educational Facilities Authority Rev
(Wheaton Franciscan Services), 6.25%, 2022 1,000,000 1,087,220
Yonkers, NY, Industrial Development Agency, Civic Facilities
Rev. (St. John's Riverside Hospital), 6.8%, 2016 410,000 427,954
------------
$ 60,247,067
- --------------------------------------------------------------------------------------------------
Healthcare Revenue - Long Term Care - 1.8%
- --------------------------------------------------------------------------------------------------
Bell County, TX, Health Facilities Development Rev. (Advanced
Living Technology), 7.75%, 2006 $ 30,000 $ 29,933
Bell County, TX, Health Facilities Development Rev. (Advanced
Living Technology), 8.125%, 2016 505,000 481,861
Bell County, TX, Health Facilities Development Rev. (Advanced
Living Technology), 8.5%, 2026 1,130,000 1,060,042
Colorado Health Facilities Authority Rev. (Evangelical
Lutheran), 6.9%, 2025 500,000 563,390
Cumberland County, PA, Municipal Authority Rev. (Wesley), "A",
7.25%, 2013 (c) 270,000 323,430
Cumberland County, PA, Municipal Authority Rev. (Wesley), "A",
7.25%, 2035 105,000 112,135
Eden Prairie, MN, Multi-Family Housing Rev. (Coll-Rolling
Hills), "A", GNMA, 6%, 2021 200,000 214,894
Indiana Health Facilities Financing Authority Rev. (Hoosier
Care), 7.125%, 2034 805,000 763,180
Iowa Finance Authority, Health Care Facilities Rev. (Care
Initiatives Project), 9.25%, 2025 485,000 575,278
Millbrae, CA, Residential Facilities Rev. (Magnolia of
Millbrae), "A", 7.375%, 2027 940,000 979,800
Shelby County, TN, Health Educational Rev. (Germantown
Village), 7.25%, 2034 385,000 408,096
------------
$ 5,512,039
- --------------------------------------------------------------------------------------------------
Human Services - 0.4%
- --------------------------------------------------------------------------------------------------
Nassau County, NY, Industrial Development Civic (Special Needs
Facilities), 6.1%, 2012 $ 295,000 $ 302,691
Orange County, FL, Health Facilities Authority Rev. (GF/Orlando
Healthcare Facilities), 9%, 2031 1,000,000 1,103,990
------------
$ 1,406,681
- --------------------------------------------------------------------------------------------------
Industrial Revenue - Airlines - 0.8%
- --------------------------------------------------------------------------------------------------
Los Angeles, CA, Regional Airport Lease Rev. (AMR Corp.),
7%, 2012 $ 300,000 $ 309,189
New York City, NY, Industrial Development Agency Rev. (American
Airlines, Inc.), 7.625%, 2025 970,000 1,065,914
Tulsa, OK, Municipal Airport Trust Rev. (American Airlines,
Inc.), "B", 5.65%, 2035 1,000,000 990,230
------------
$ 2,365,333
- --------------------------------------------------------------------------------------------------
Industrial Revenue - Chemicals - 0.3%
- --------------------------------------------------------------------------------------------------
Brazos River, TX, Harbor Navigation District (Dow Chemical
Co.), 5.7%, 2033 $ 1,000,000 $ 1,063,440
- --------------------------------------------------------------------------------------------------
Industrial Revenue - Environmental Services - 1.5%
- --------------------------------------------------------------------------------------------------
California Pollution Control Financing Authority, Solid Waste
Disposal Rev. (Waste Management, Inc.), "A-2", 5.4%, 2025 $ 215,000 $ 223,755
Carbon County, UT, Solid Waste Disposal Rev. (Laidlaw
Environmental), 7.45%, 2017 2,500,000 2,627,500
Charles City County, VA, Industrial Development Authority,
Solid Waste Disposal Facility Rev. (Waste Management, Inc.),
6.25%, 2027 500,000 547,960
Colorado Housing & Finance Authority, Solid Waste Rev. (Waste
Management, Inc.), 5.7%, 2018 230,000 246,986
Gloucester County, NJ, Solid Waste Resource Recovery Rev
(Waste Management, Inc.), 6.85%, 2029 150,000 163,808
Massachusetts Development Finance Agency Rev., Resource
Recovery Rev. (Waste Management, Inc.), 6.9%, 2029 300,000 326,739
Nevada Department of Business Rev. (Republic Services, Inc.),
5.625%, 2026 450,000 484,205
------------
$ 4,620,953
- --------------------------------------------------------------------------------------------------
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 - 2.6%
- --------------------------------------------------------------------------------------------------
Bucks County, PA, Industrial Development Authority Rev. (USX
Corp.), 5.4%, 2017 $ 500,000 $ 530,085
Gulf Coast, TX, Industrial Development Authority (Valero Energy
Corp.), 5.6%, 2031 500,000 513,625
Hardeman County, TN, Correctional Facilities Corp. (Corrections
Corp. of America), 7.375%, 2017 500,000 512,070
Massachusetts Development Finance Agency, Resource Recovery
Rev. (Flour Corp.), 5.625%, 2019 2,895,000 3,020,180
Massachusetts Industrial Finance Agency Rev. (Welch Foods,
Inc.), 5.6%, 2017 1,300,000 1,349,179
Park Creek Metropolitan District, CO, Rev., Custodial Receipts,
CR-2, 7.875%, 2032 (a) 400,000 442,068
Pennsylvania Economic Development Financing Authority Rev
(Amtrak), 6.125%, 2021 550,000 582,434
Tooele County, UT, Hazardous Waste Treatment Rev. (Union
Pacific Corp.), 5.7%, 2026 980,000 1,026,530
------------
$ 7,976,171
- --------------------------------------------------------------------------------------------------
Industrial Revenue - Paper - 2.3%
- --------------------------------------------------------------------------------------------------
Butler, AL, Industrial Development Board, Solid Waste Disposal
Rev. (Georgia Pacific Corp.), 5.75%, 2028 $ 260,000 $ 255,154
Delta County, MI, Economic Development Corp., Environmental
Improvements Rev. (MeadWestvaco Escanaba), "A",
6.25%, 2012 (c) 900,000 1,017,261
Mobile, AL, Industrial Development Board Improvement Rev.,
(International Paper Co.), "B", 6.45%, 2019 2,000,000 2,120,160
Navajo County, AZ, Industrial Development Authority Rev. (Stone
Container Corp.), 7.2%, 2027 500,000 518,160
Navajo County, AZ, Industrial Development Authority Rev. (Stone
Container Corp.), 7.4%, 2026 1,500,000 1,542,900
Onondaga County, NY, Industrial Development Authority Rev.,
Solid Waste Disposal Rev. (Solvay Paperboard LLC), 6.8%, 2014 1,000,000 1,046,650
West Point, VA, Industrial Development Authority, Solid Waste
Disposal Rev. (Chesapeake Corp.), "A", 6.375%, 2019 550,000 550,451
------------
$ 7,050,736
- --------------------------------------------------------------------------------------------------
Miscellaneous Revenue - Other - 0.8%
- --------------------------------------------------------------------------------------------------
Austin, TX, Convention Center (Convention Enterprises, Inc.),
"A", 6.6%, 2021 $ 300,000 $ 318,186
Austin, TX, Convention Center (Convention Enterprises, Inc.),
"A", 6.7%, 2028 400,000 424,700
Baltimore, MD, Convention Center Hotel Revenue, "A", XLCA,
5.25%, 2039 555,000 591,636
Gallery Certificate Trust, PA, Parking Rev., FSA,
4.5%, 2013 (z) 640,000 631,795
San Antonio, TX, Convention Center, Hotel Financial Corp.,
Contract Rev. (Empowerment Zone), "A", AMBAC, 5%, 2034 490,000 498,335
Toledo Lucas County, OH, Port Authority Development Rev
(Northwest Ohio Bond Fund), "C", 5.125%, 2025 65,000 65,070
------------
$ 2,529,722
- --------------------------------------------------------------------------------------------------
Multi-Family Housing Revenue - 3.0%
- --------------------------------------------------------------------------------------------------
Bay County, FL, Housing Finance Authority, Multi-Family Rev
(Andrews Place II Apartments), FSA, 5%, 2035 $ 150,000 $ 150,743
Bay County, FL, Housing Finance Authority, Multi-Family Rev
(Andrews Place II Apartments), FSA, 5.1%, 2046 275,000 276,356
California Statewide Communities Development Authority Rev
(Irvine Apartments), 5.25%, 2025 1,000,000 1,030,510
Charter Mac Equity Issuer Trust, 6.625%, 2009 2,000,000 2,128,960
Eaglebend, CO, Affordable Housing Corp., 6.2%, 2012 1,000,000 992,790
GMAC Municipal Mortgage Trust, "B-1", 5.6%, 2039 (a) 1,000,000 1,028,730
GMAC Municipal Mortgage Trust, "C-1", 5.7%, 2040 (a) 500,000 498,250
Indianapolis, IN, Multi-Family Rev. (Cambridge Station
Apartments II), FNMA, 5.25%, 2039 320,000 324,112
Munimae TE Bond Subsidiary LLC, "A-2", 4.9%, 2049 (a) 2,000,000 1,984,920
Newark, NJ, Housing Authority Port Authority (Newark Marine
Terminal), MBIA, 5.5%, 2028 215,000 233,290
North Charleston, SC, Housing Authority Rev. (Horizon Village),
"A", FGIC, 5.15%, 2048 305,000 297,814
Seattle, WA, Housing Authority Rev., Capped Fund Program (High
Rise Rehab), "I", FSA, 5%, 2025 455,000 453,858
------------
$ 9,400,333
- --------------------------------------------------------------------------------------------------
Parking - 0.1%
- --------------------------------------------------------------------------------------------------
Rail Connections, Inc., MA Rev., 0%, 2009 (c) $ 100,000 $ 57,884
Rail Connections, Inc., MA Rev., 0%, 2009 (c) 210,000 113,663
Rail Connections, Inc., MA Rev., 0%, 2009 (c) 300,000 152,076
------------
$ 323,623
- --------------------------------------------------------------------------------------------------
Sales & Excise Tax Revenue - 0.4%
- --------------------------------------------------------------------------------------------------
Austin, TX, Town Community Events Center Venue, FGIC,
6%, 2009 (c) $ 1,015,000 $ 1,094,972
Metropolitan Pier & Expo, IL, McCormick Place Expansion, MBIA,
5.25%, 2042 220,000 231,411
------------
$ 1,326,383
- --------------------------------------------------------------------------------------------------
Single Family Housing - Local - 3.2%
- --------------------------------------------------------------------------------------------------
Adams County, CO, Single Family Mortgage Rev., ETM,
8.875%, 2011 (c) $ 2,510,000 $ 3,088,430
Brevard County, FL, Housing Finance Authority, "B", GNMA,
6.5%, 2022 161,000 162,254
Calcasieu Parish, LA, Public Trust Authority, Single Family
Mortgage Rev. "A", GNMA, 6.05%, 2032 465,000 491,775
California Rural Home Mortgage Finance Authority Rev., GNMA,
6.55%, 2030 110,000 111,610
Chicago, IL, Single Family Mortgage Rev., "C", GNMA,
7.05%, 2030 10,000 9,991
Cook County, IL, Single Family Mortgage Rev., "A", 0%, 2015 415,000 94,454
Jefferson Parish, LA, Single Family Mortgage Rev., GNMA,
6.625%, 2023 340,000 350,057
Jefferson Parish, LA, Single Family Mortgage Rev., GNMA,
6.75%, 2030 435,000 451,778
Lee County, FL, Housing Finance Authority Rev., "A", GNMA,
7%, 2031 20,000 20,215
Maricopa County, AZ, Single Family Mortgage Rev., "B", GNMA,
6.2%, 2034 100,000 102,014
Pima County, AZ, Industrial Development Authority Rev., "B-1",
GNMA, 7.05%, 2030 225,000 229,293
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev.,
"A", GNMA, 6.45%, 2029 560,000 575,372
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev.,
"A", GNMA, 5.8%, 2036 615,000 666,488
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev.,
"A-1", GNMA, 6.875%, 2026 90,000 90,436
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev.,
"A-1", GNMA, 5.75%, 2037 190,000 202,392
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev.,
"A-3", GNMA, 6%, 2035 395,000 426,580
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev.,
"A-4", GNMA, 5.85%, 2037 365,000 392,284
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev.,
"A-5", GNMA, 5.8%, 2027 315,000 334,231
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev.,
"A-5", GNMA, 5.7%, 2036 645,000 691,982
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev.,
"A-5", GNMA, 5.9%, 2037 145,000 157,221
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev.,
"A-6", GNMA, 5.65%, 2036 465,000 494,993
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev.,
"B", GNMA, 5.45%, 2027 345,000 363,551
Sedgwick & Shawnee Counties, KS, Single Family Housing Rev.,
"B-2", GNMA, 6.45%, 2033 325,000 336,638
------------
$ 9,844,039
- --------------------------------------------------------------------------------------------------
Single Family Housing - State - 2.6%
- --------------------------------------------------------------------------------------------------
California Housing Finance Agency Rev., Home Mortgage, MBIA,
0%, 2028 $ 1,735,000 $ 552,684
Colorado Housing & Finance Authority Rev., 7.45%, 2016 35,000 35,554
Colorado Housing & Finance Authority Rev., 6.875%, 2028 60,000 60,509
Colorado Housing & Finance Authority Rev., 6.8%, 2030 80,000 82,166
Colorado Housing & Finance Authority Rev., "A-1", 7.4%, 2027 15,000 15,058
Colorado Housing & Finance Authority Rev., "A-2", 7.15%, 2014 7,000 7,012
Colorado Housing & Finance Authority Rev., "A-2", AMBAC,
6.6%, 2028 300,000 309,618
Colorado Housing & Finance Authority Rev., "B-2", 6.1%, 2023 115,000 119,103
Colorado Housing & Finance Authority Rev., "B-3", 6.55%, 2033 105,000 107,626
Colorado Housing & Finance Authority Rev., "C", FHA,
6.75%, 2021 40,000 40,482
Colorado Housing & Finance Authority Rev., "C-2", FHA,
5.9%, 2023 170,000 177,176
Colorado Housing & Finance Authority Rev., "C-2", FHA,
6.6%, 2032 165,000 170,488
Colorado Housing & Finance Authority Rev., "C-3", FHA,
6.375%, 2033 90,000 92,280
Louisiana Housing Finance Agency, Single Family Mortgage Rev.,
"B-2", GNMA, 7.55%, 2031 125,000 130,013
Louisiana Housing Finance Agency, Single Family Mortgage Rev.,
GNMA, 6.4%, 2032 130,000 132,123
Minnesota Housing Finance Agency Rev., Residential Housing
Finance, "B", 4.8%, 2023 195,000 196,166
Missouri State Housing Development Commission, Single Family
Mortgage Rev. (Home Loan Program), "B", GNMA, 6.7%, 2030 190,000 196,737
Missouri State Housing Development Commission, Single Family
Mortgage Rev. (Home Loan Program), GNMA, 6.35%, 2032 195,000 200,485
Missouri State Housing Development Commission, Single Family
Mortgage Rev. (Home Loan Program), GNMA, 6.85%, 2032 175,000 181,249
Missouri State Housing Development Commission, Single Family
Mortgage Rev. (Home Loan Program), GNMA, 6.75%, 2034 105,000 106,579
New Hampshire Housing Finance Authority Rev., "B", 5.875%, 2030 105,000 105,920
New Hampshire Housing Finance Authority Rev., "B", 6.3%, 2031 90,000 91,110
New Hampshire Housing Finance Authority Rev., "B", 6.5%, 2035 705,000 766,081
New Mexico Mortgage Finance Authority Rev., "B-2", GNMA,
6.35%, 2033 175,000 182,499
New Mexico Mortgage Finance Authority Rev., GNMA, 7.1%, 2030 70,000 70,986
New Mexico Mortgage Finance Authority Rev., GNMA, 6.25%, 2032 380,000 395,173
New Mexico Mortgage Finance Authority Rev., "N", GNMA,
5.95%, 2037 440,000 476,340
North Dakota Housing Finance Agency Rev., Housing Finance, "A",
5%, 2033 385,000 386,690
Ohio Housing Finance Agency Mortgage Rev., Residential Mortgage
Backed, "C", GNMA, 5.9%, 2035 425,000 444,682
Oklahoma Housing Finance Agency Rev., 6.65%, 2029 515,000 545,071
Texas Affordable Housing Corp., Single Family Mortgage Rev.,
"B", 5.25%, 2039 520,000 537,592
Texas Housing & Community Affairs, Residential Mortgage Rev ,
GNMA, 7.1%, 2021 755,000 792,629
Vermont Housing Finance Agency Rev., FSA, 4.95%, 2032 275,000 278,240
------------
$ 7,986,121
- --------------------------------------------------------------------------------------------------
Solid Waste Revenue - 1.0%
- --------------------------------------------------------------------------------------------------
Delaware County, PA, Industrial Development Authority, Resource
Recovery Facilities Rev. (American Ref-Fuel Co.), "A",
6.2%, 2019 $ 500,000 $ 522,590
Hudson County, NJ, Solid Waste System Rev., 5.9%, 2015 830,000 828,788
Massachusetts Development Finance Agency Rev. (Ogden Haverhill
Associates), 6.7%, 2014 700,000 764,715
Massachusetts Industrial Finance Agency, Resource Recovery Rev.
(Ogden Haverhill Associates), 5.6%, 2019 1,000,000 1,033,830
------------
$ 3,149,923
- --------------------------------------------------------------------------------------------------
State & Agency - Other - 0.8%
- --------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency (Visual &
Performing Arts), 6%, 2021 $ 1,000,000 $ 1,176,900
State of Michigan, COP, AMBAC, 5.5%, 2010 (c) 1,250,000 1,334,875
------------
$ 2,511,775
- --------------------------------------------------------------------------------------------------
State & Local Agencies - 5.1%
- --------------------------------------------------------------------------------------------------
Alabama Building Renovation Authority, AMBAC, 6%, 2018 $ 760,000 $ 826,538
Alabama State Public School & College, Capital Improvement,
"D", 6%, 2015 2,850,000 3,086,151
Chicago, IL, Public Building Commission Rev., RITES, FGIC,
8.981%, 2016 (z)(v) 1,500,000 1,784,400
Chicago, IL, Public Building Commission Rev., RITES, FGIC,
8.981%, 2017 (z)(v) 1,250,000 1,497,100
Golden State, CA, Tobacco Securitization Corp., Tobacco
Settlement Rev., Enhanced, "A", 5%, 2045 325,000 330,067
Golden State, CA, Tobacco Securitization Corp., Tobacco
Settlement Rev., Enhanced, "B", 5.375%, 2010 (c) 1,500,000 1,597,665
Golden State, CA, Tobacco Securitization Corp., Tobacco
Settlement Rev., Enhanced, "B", 5.5%, 2013 (c) 1,075,000 1,177,921
Indianapolis, IN, Public Improvement Bond Bank, "C", AMBAC,
6%, 2017 500,000 542,315
New Jersey Economic Development Authority Rev., School
Facilities Construction, "O", 5.25%, 2025 445,000 469,248
New Mexico Finance Authority Rev., Court Facilities Fee Rev ,
MBIA, 5.5%, 2011 (c) 475,000 514,577
New York State Urban Development Corp., Correctional Facilities
Service Contract C, AMBAC, 5.875%, 2009 (c) 1,000,000 1,068,380
Stafford, TX, Economic Development Corp., FGIC, 6%, 2015 525,000 599,975
Virginia College Building Authority, VA, Public Higher
Education Financing, "A", 5.75%, 2009 (c) 2,295,000 2,447,939
------------
$ 15,942,276
- --------------------------------------------------------------------------------------------------
Student Loan Revenue - 0.9%
- --------------------------------------------------------------------------------------------------
Access to Loans for Learning, California Student Loan Rev.,
7.95%, 2030 $ 650,000 $ 683,690
Arizona Student Loan Acquisition Authority Rev., 5.8%, 2016 675,000 714,690
Arizona Student Loan Acquisition Authority Rev., 5.85%, 2017 700,000 741,349
Massachusetts Educational Financing Authority, Refunding Issue
G, "A", MBIA, 6.1%, 2018 590,000 602,077
------------
$ 2,741,806
- --------------------------------------------------------------------------------------------------
Tax - Other - 1.1%
- --------------------------------------------------------------------------------------------------
New Jersey Economic Development Authority Rev., Cigarette Tax,
5.5%, 2024 $ 250,000 $ 260,855
New Jersey Economic Development Authority Rev., Cigarette Tax,
5.75%, 2029 450,000 476,208
New Jersey Economic Development Authority Rev., Cigarette Tax,
5.5%, 2031 200,000 207,616
New Jersey Economic Development Authority Rev., Cigarette Tax,
5.75%, 2034 300,000 315,399
New York City, NY, Transitional Finance Authority Rev., Future
Tax Secured, "A", 6%, 2009 (c) 2,000,000 2,168,320
------------
$ 3,428,398
- --------------------------------------------------------------------------------------------------
Tax Assessment - 2.1%
- --------------------------------------------------------------------------------------------------
Allegheny County, PA, Redevelopment Authority Rev. (Pittsburgh
Mills), 5.1%, 2014 $ 75,000 $ 76,992
Allegheny County, PA, Redevelopment Authority Rev. (Pittsburgh
Mills), 5.6%, 2023 50,000 52,293
Broadview, IL, Tax Increment Rev., 5.25%, 2012 1,000,000 1,026,850
Capital Region Community Development District, FL, Capital
Improvement Rev., "B", 5.95%, 2006 40,000 40,060
Fishhawk Community Development District, FL, 5.125%, 2009 380,000 378,982
Greyhawk Landing Community Development, FL, Special Assessment
Rev., "B", 6.25%, 2009 140,000 141,508
Katy, TX, Development Authority Rev., 5.8%, 2011 865,000 891,521
Katy, TX, Development Authority Rev., "B", 6%, 2018 1,200,000 1,238,064
Killarney, FL, Community Development District, "B",
5.125%, 2009 205,000 204,422
Lakes by the Bay South Community Development District, FL,
Special Assessment, "B", 5.3%, 2009 255,000 254,561
Lancaster County, SC, Assessment Rev. (Sun City Carolina
Lakes), 5.45%, 2037 50,000 50,106
Panther Trace, FL, Community Development District Rev., "B",
6.5%, 2009 5,000 5,023
Panther Trace, FL, Community Development District Rev., "B",
5%, 2010 655,000 651,273
Parkway Center, FL, Community Development District Rev., "B",
5.625%, 2014 935,000 945,566
Preserve at Wilderness Lake, FL, Community Development
District, Capital Improvement, "B", 5%, 2009 150,000 148,358
Renaissance Community Development, FL, "B", 6.25%, 2008 120,000 120,824
Tuscany Reserve Community Development District, FL, "B",
5.25%, 2016 185,000 185,335
------------
$ 6,411,738
- --------------------------------------------------------------------------------------------------
Tobacco - 1.6%
- --------------------------------------------------------------------------------------------------
Badger, WI, Tobacco Asset Securitization Corp., 6.125%, 2027 $ 1,055,000 $ 1,115,251
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico,
"A", 0%, 2050 4,000,000 261,600
Children's Trust Fund, Tobacco Settlement Rev., Puerto Rico,
"B", 0%, 2055 2,000,000 69,300
District of Columbia, Tobacco Settlement, 6.25%, 2024 405,000 430,013
Guam Economic Development Authority, 5%, 2022 115,000 116,133
Iowa Tobacco Settlement Authority, Tobacco Settlement Rev.,
Asset Backed, "B", 5.3%, 2011 (c) 750,000 799,140
Iowa Tobacco Settlement Authority, Tobacco Settlement Rev.,
Asset Backed, "B", 0% to 2007, 5.6% to 2034 615,000 571,353
Louisiana Tobacco Settlement Authority, 5.5%, 2030 415,000 431,471
New Jersey Tobacco Settlement Authority, 5.75%, 2032 675,000 701,008
South Carolina Tobacco Settlement Authority, 6.375%, 2028 500,000 537,645
Washington Tobacco Settlement Authority, 6.5%, 2026 70,000 76,334
------------
$ 5,109,248
- --------------------------------------------------------------------------------------------------
Toll Roads - 0.5%
- --------------------------------------------------------------------------------------------------
New Jersey State Turnpike Authority Rev., Unrefunded, "C",
MBIA, 6.5%, 2016 $ 235,000 $ 271,141
New Jersey State Turnpike Authority Rev. "C", MBIA, ETM,
6.5%, 2016 (c) 80,000 92,598
Northwest Parkway Public Highway Authority Co. Rev., Capital
Appreciation, "B", AMBAC, 0%, 2018 750,000 405,150
San Joaquin Hills, CA, Transportation Corridor Agency, Toll
Road Rev., ETM, 0%, 2009 (c) 1,000,000 900,340
------------
$ 1,669,229
- --------------------------------------------------------------------------------------------------
Transportation - Special Tax - 1.1%
- --------------------------------------------------------------------------------------------------
Allegheny County, PA, Port Authority Special Rev., MBIA,
6.25%, 2009 (c) $ 1,000,000 $ 1,080,600
New Jersey Economic Development Authority Rev., Transportation
Project Sublease, "A", FSA, 6%, 2009 (c) 325,000 346,704
Pennsylvania State Turnpike Commission Oil, "A", AMBAC,
5.25%, 2018 850,000 891,140
Pennsylvania State Turnpike Commission Oil, "A", AMBAC, ETM,
5.25%, 2018 (c) 1,150,000 1,193,804
------------
$ 3,512,248
- --------------------------------------------------------------------------------------------------
Universities - Colleges - 4.1%
- --------------------------------------------------------------------------------------------------
Alabama Private Colleges & Universities, Facilities Authority
Rev. (Tuskegee University), ASSD GTY, 4.75%, 2026 $ 1,000,000 $ 1,004,670
Amherst, NY, Industrial Development Agency Rev. (Daemen
College), "A", 6%, 2021 1,000,000 1,065,030
California Educational Facilities Authority Rev. (L.A. College
of Chiropractic), 5.6%, 2017 250,000 241,610
Houston, TX, Community College Systems, MBIA, 7.875%, 2025 1,650,000 1,989,554
Illinois Finance Authority Rev. (University of Chicago), "A",
5%, 2034 215,000 221,869
Massachusetts Development Finance Agency Rev. (Boston
University), XLCA, 6%, 2059 1,250,000 1,484,850
Massachusetts Development Finance Agency Rev. (Massachusetts
College of Pharmacy), 6.625%, 2010 (c) 100,000 111,102
Massachusetts Development Finance Agency Rev., (Olin College),
"B", XLCA, 5.25%, 2033 2,000,000 2,105,540
Northern Illinois University Rev., Auxiliary Facilities
Systems, AMBAC, 5.875%, 2018 1,370,000 1,452,378
Savannah, GA, Economic Development Authority Rev. (College of
Art & Design, Inc.), 6.5%, 2009 (c) 500,000 548,175
St. Joseph County, IN, Educational Facilities Rev. (University
of Notre Dame), 6.5%, 2026 1,000,000 1,279,650
State of Oregon, Facilities Authority Rev. (Linfield College),
"A", 5%, 2030 165,000 167,114
Upland, IN, Economic Development Rev. (Taylor University),
6%, 2018 435,000 478,509
Upland, IN, Economic Development Rev. (Taylor University),
6.25%, 2023 520,000 571,834
------------
$ 12,721,885
- --------------------------------------------------------------------------------------------------
Universities - Secondary Schools - 1.8%
- --------------------------------------------------------------------------------------------------
California Statewide Communities, Development Authority Rev
(Escondido Charter High School), 7.5%, 2036 $ 500,000 $ 529,840
Clark County, NV, Economic Development Rev. (Alexander Dawson
School), 5.5%, 2020 1,500,000 1,564,965
Maine Finance Authority, Educational Rev. (Waynflete School),
6.4%, 2019 1,000,000 1,064,340
Maine Finance Authority, Educational Rev. (Waynflete School),
6.5%, 2029 1,000,000 1,068,670
Michigan Municipal Bond Authority Rev. (YMCA Service Learning
Academy), 7.625%, 2021 400,000 425,396
New Hampshire Health & Education (Derryfield School),
6.5%, 2010 290,000 294,808
Pima County, AZ, Industrial Development Authority Education
Rev. (Arizona Charter Schools), "C", 6.75%, 2031 500,000 520,345
------------
$ 5,468,364
- --------------------------------------------------------------------------------------------------
Utilities - Cogeneration - 0.6%
- --------------------------------------------------------------------------------------------------
Carbon County, PA, Industrial Development Authority Rev
(Panther Creek Partners), 6.65%, 2010 $ 550,000 $ 580,454
Klamath Falls, OR, Electric Rev. (Klamath Cogeneration),
6%, 2025 1,475,000 1,183,496
------------
$ 1,763,950
- --------------------------------------------------------------------------------------------------
Utilities - Investor Owned - 5.0%
- --------------------------------------------------------------------------------------------------
Apache County, AZ, Industrial Development Authority, Pollution
Control Rev. (Tucson Electric Power Co.), 5.875%, 2033 $ 1,000,000 $ 1,002,410
Brazos River Authority, TX, Pollution Control Rev. (Texas
Utility Co.), "B", 6.3%, 2032 120,000 131,207
California Pollution Control Financing Authority, Pollution
Control Rev. (Pacific Gas & Electric Co.), MBIA, 5.35%, 2016 1,600,000 1,704,304
Clark County, NV, Industrial Development Rev. (Southwest Gas
Corp.), "A", AMBAC, 4.85%, 2035 730,000 724,335
Connecticut Development Authority, Pollution Control Rev
(Connecticut Light & Power Co.), 5.85%, 2028 1,000,000 1,058,350
Farmington, NM, Pollution Control Rev. (New Mexico Public
Service), 5.8%, 2022 500,000 507,580
Farmington, NM, Pollution Control Rev. (New Mexico Public
Service), 6.375%, 2022 1,000,000 1,049,240
Farmington, NM, Pollution Control Rev. (New Mexico Public
Service), "A", 6.3%, 2016 565,000 587,199
Lehigh County, PA, Industrial Development Authority Pollution
Control Rev. (PPL Electric Utility Corp.), "A", FGIC,
4.7%, 2029 320,000 318,189
Matagorda County, TX, Pollution Control Rev. (Reliant Energy),
5.95%, 2030 750,000 767,055
Mecklenburg County, VA, Industrial Development Authority Rev.
(UAE Mecklenburg LP), 6.5%, 2017 700,000 766,003
New Hampshire Industrial Development Authority, Pollution
Control Rev. (Connecticut Light & Power), 5.9%, 2016 500,000 510,590
Pima County, AZ, Industrial Development Authority Rev. (Tucson
Electric Power Co.), "A", 6.1%, 2025 2,000,000 2,005,700
Pittsylvania County, VA, Industrial Development Authority Rev.,
7.5%, 2014 2,000,000 2,036,000
Port Morrow, OR, Pollution Control Rev. (Portland General
Electric), 5.2%, 2033 350,000 361,508
Sabine River Authority, TX, Pollution Control Rev. (TXU
Electric Co.), "A", 5.5%, 2022 500,000 529,965
West Feliciana Parish, LA, Pollution Control Rev. (Entergy Gulf
States), 6.6%, 2028 1,665,000 1,680,218
------------
$ 15,739,853
- --------------------------------------------------------------------------------------------------
Utilities - Municipal Owned - 6.3%
- --------------------------------------------------------------------------------------------------
Austin, TX, Utility Systems Rev., AMBAC, 6.75%, 2011 $ 1,500,000 $ 1,715,130
California State, Department of Water Resources Power Supply
Rev., "A", 5.125%, 2012 (c) 750,000 813,203
Georgia Municipal Electric Power Authority Rev., MBIA,
6.375%, 2016 2,000,000 2,337,640
Georgia Municipal Electric Power Authority Rev., MBIA,
6.5%, 2020 7,350,000 8,799,347
North Carolina Municipal Power Agency, Catawba Electric Rev ,
6.375%, 2013 750,000 815,520
North Carolina Municipal Power Agency, Catawba Electric Rev ,
MBIA, 7%, 2007 3,250,000 3,331,055
North Carolina Municipal Power Agency, ROLS, MBIA,
7.236%, 2019 (z)(v) 1,500,000 1,695,690
------------
$ 19,507,585
- --------------------------------------------------------------------------------------------------
Water & Sewer Utility Revenue - 5.7%
- --------------------------------------------------------------------------------------------------
Atlanta, GA, Water & Wastewater Rev., RITES, FGIC,
7.019%, 2016 (z)(v) $ 1,000,000 $ 1,186,100
Augusta, GA, Water & Sewer Rev., FSA, 5.25%, 2039 1,090,000 1,155,825
Forsyth County, GA, Water & Sewage Authority, 6.25%, 2010 (c) 1,170,000 1,288,895
Massachusetts Water Resources Authority, 6.5%, 2019 5,965,000 7,062,321
Mississippi Development Bank Special Obligations, Grenada, MS,
Water & Sewer Systems Project, "N", FSA, 5%, 2030 490,000 508,218
Narragansett, RI, Bay Commission Wastewater Systems Rev., "A",
MBIA, 5%, 2028 860,000 895,716
Pittsburgh, PA, Water & Sewer Authority Rev., "C", FSA,
5.25%, 2022 2,000,000 2,054,240
Spartanburg, SC, Water & Sewer Authority Rev., "B", MBIA,
5.25%, 2030 255,000 270,728
State of New York, Environmental Facilities, 5%, 2016 430,000 445,347
State of New York, Environmental Facilities, ETM, 5%, 2016 (c) 570,000 587,904
Upland, CA, Public Financing Authority Rev., Water Systems
Improvement, AMBAC, 5%, 2033 590,000 605,558
West Virginia Water Development Authority Loan Program, "B",
AMBAC, 4.75%, 2035 110,000 110,416
West Wilson Utility District, TN, Waterworks Rev., MBIA,
5.25%, 2030 480,000 508,354
Westmoreland County, PA, Municipal Authority Services Rev.,
FSA, 5.25%, 2025 400,000 429,328
Westmoreland County, PA, Municipal Authority Services Rev.,
FSA, 5.25%, 2026 520,000 556,863
------------
$ 17,665,813
- --------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST, $287,523,337) $305,294,661
- --------------------------------------------------------------------------------------------------
Floating Rate Demand Notes - 1.0%
- --------------------------------------------------------------------------------------------------
ISSUER SHARES/PAR VALUE ($)
- --------------------------------------------------------------------------------------------------
Allegheny County, PA, Hospital Development Authority Rev
(Presbyterian University Hospital), "D", 3.22%, due 4/06/06 $ 600,000 $ 600,000
Burke County, GA, Development Authority Pollution Control Rev.
(Oglethorpe Power Corp.), "A", 3.22%, due 4/05/06 200,000 200,000
Georgia Municipal Electric Authority, 3.05%, due 4/05/06 100,000 100,000
Jefferson County, AL, Sewer Rev., 3.22%, due 4/06/06 300,000 300,000
Lincoln County, WY, Pollution Control Rev. (Exxon Mobile
Corp.), 3.19%, due 4/03/06 1,000,000 1,000,000
New York City, NY, Municipal Water & Sewer Finance Authority
Rev., 3.13%, due 4/03/06 200,000 200,000
Orange County, CA, 3.1%, due 4/03/06 100,000 100,000
Pinellas County, FL, Health Facilities Authority Rev. (Pooled
Hospital Loan Program), 3.18%, due 4/03/06 500,000 500,000
Washington State Health Care Facilities, "A",
3.18%, due 4/03/06 100,000 100,000
- --------------------------------------------------------------------------------------------------
TOTAL FLOATING RATE DEMAND NOTES (IDENTIFIED COST,
$3,100,000) $3,100,000
- --------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (IDENTIFIED COST, $290,623,337) $308,394,661
- --------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities - 1.0% 3,187,554
- --------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $311,582,215
- --------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS
NOTIONAL
PRINCIPAL CASH FLOWS UNREALIZED
AMOUNT OF CASH FLOWS PAID RECEIVED APPRECIATION
EXPIRATION CURRENCY CONTRACT BY THE FUND BY THE FUND (DEPRECIATION)
12/01/2007 USD $6,000,000 Fixed - 3 Year Floating - 7 day $82,399
BMA Swap Index BMA Swap Index
(2.795%)
8/30/2016 USD 15,000,000 Fixed - 10 Year Floating - 7 Day 115,193
BMA Swap Index BMA Swap Index
(3.926%)
8/02/2021 USD 2,000,000 Fixed - 15 Year Floating - 7 Day 31,963
BMA Swap Index BMA Swap Index
(4.011%)
- -------------------------------------------------------------------------------------------------
$229,555
At March 31, 2006, the fund had sufficient cash and/or securities to cover any
commitments under these derivative contracts.
Portfolio of Investments - continued
(a) SEC Rule 144A restriction.
(d) Non-income producing security - in default.
(c) Refunded bond.
(v) Inverse floating rate security.
(z) Restricted securities (excluding 144A issues) are not registered under the Securities Act of
1933 and are subject to legal or contractual restrictions on resale. These securities
generally may be resold in transactions exempt from registration or to the public if the
securities are registered. Disposal of these securities may involve time-consuming
negotiations and prompt sale at an acceptable price may be difficult. The fund holds the
following restricted securities:
ACQUISITION ACQUISITION CURRENT TOTAL % OF
SECURITY DATE COST MARKET VALUE NET ASSETS
Atlanta, GA, Water & Wastewater Rev.,
RITES, FGIC, 7.019%, 2016 4/20/1999 $1,167,100 $1,186,100
Chicago, IL O'Hare International Airport
Rev., RITES, FSA, 7.461%, 2022 8/21/2003 1,599,510 1,760,940
Chicago, IL, Public Building Commission
Rev., RITES, FGIC, 8.981%, 2016 3/10/1999 1,619,550 1,784,400
Chicago, IL, Public Building Commission
Rev., RITES, FGIC, 8.981%, 2017 3/10/1999 1,337,550 1,497,100
Commonwealth of Puerto Rico, ROLS, FGIC,
7.763%, 2015 8/05/2002 3,878,760 3,674,340
Dudley-Charlton, MA, Regional School
District, RITES, FGIC, 6.542%, 2013 5/05/1999 1,615,946 1,792,565
Gallery Certificate Trust, PA, Parking
Rev., FSA, 4.5%, 2013 12/17/2003 640,558 631,795
Houston, TX, Independent School District,
RITES, 6.519%, 2017 2/26/1999 2,440,832 2,527,740
North Carolina Municipal Power Agency,
ROLS, MBIA, 7.236%, 2019 3/3/2003 1,717,980 1,695,690
- ----------------------------------------------------------------------------------------------------
Total Restricted Securities $16,550,670 5.3%
The following abbreviations are used in the Portfolio of Investments and are
defined:
BMA Bond Market Assn.
COP Certificate of Participation
ETM Escrowed to Maturity
Insurers Inverse Floaters
AMBAC AMBAC Indemnity Corp. RIBS Residual Interest Bonds
ASSD GTY Assured Guarantee Insurance Co. RITES Residual Interest Tax-Exempt Security
CIFG CDC IXIS Financial Guaranty ROLS Residual Options Longs
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.
PSF Permanent School Fund
XLCA XL Capital Insurance Co.
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Statement of Assets and Liabilities
This statement represents your fund's balance sheet, which details the assets
and liabilities composing the total value of the fund.
AT 3/31/06
ASSETS
- ------------------------------------------------------------------------------------------------------
Investments, at value (identified cost, $290,623,337) $308,394,661
Cash 77,197
Receivable for investments sold 559,006
Receivable for fund shares sold 172,314
Interest receivable 4,517,174
Unrealized appreciation on interest rate swap agreements 243,530
- ------------------------------------------------------------------------------------------------------
Total assets $313,963,882
- ------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------
Distributions payable $513,639
Payable for investments purchased 1,280,005
Payable for fund shares reacquired 404,795
Unrealized depreciation on interest rate swap agreements 13,975
Payable to affiliates
Management fee 2,510
Shareholder servicing costs 21,285
Distribution and service fees 3,600
Administrative services fee 97
Payable for independent trustees' compensation 32,280
Accrued expenses and other liabilities 109,481
- ------------------------------------------------------------------------------------------------------
Total liabilities $2,381,667
- ------------------------------------------------------------------------------------------------------
Net assets $311,582,215
- ------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------
Paid-in capital $297,426,695
Unrealized appreciation (depreciation) on investments 18,000,879
Accumulated net realized gain (loss) on investments (3,719,333)
Accumulated distributions in excess of net investment income (126,026)
- ------------------------------------------------------------------------------------------------------
Net assets $311,582,215
- ------------------------------------------------------------------------------------------------------
Shares of beneficial interest outstanding 36,523,035
- ------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities - continued
Class A shares
- ------------------------------------------------------------------------------------------------------
Net assets $240,212,089
Shares outstanding 28,174,876
- ------------------------------------------------------------------------------------------------------
Net asset value per share $8.53
- ------------------------------------------------------------------------------------------------------
Offering price per share (100/95.25Xnet asset value per
share) $8.96
- ------------------------------------------------------------------------------------------------------
Class B shares
- ------------------------------------------------------------------------------------------------------
Net assets $36,751,814
Shares outstanding 4,304,321
- ------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $8.54
- ------------------------------------------------------------------------------------------------------
Class C shares
- ------------------------------------------------------------------------------------------------------
Net assets $34,618,312
Shares outstanding 4,043,838
- ------------------------------------------------------------------------------------------------------
Net asset value and offering price per share $8.56
- ------------------------------------------------------------------------------------------------------
On sales of $100,000 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
FINANCIAL STATEMENTS Statement of Operations
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.
YEAR ENDED 3/31/06
NET INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------
Interest income $17,558,073
- ------------------------------------------------------------------------------------------------------
Expenses
Management fee $1,748,513
Distribution and service fees 1,354,018
Shareholder servicing costs 438,989
Administrative services fee 43,442
Independent trustees' compensation 18,054
Custodian fee 117,265
Shareholder communications 30,259
Auditing fees 47,537
Legal fees 8,691
Miscellaneous 110,393
- ------------------------------------------------------------------------------------------------------
Total expenses $3,917,161
- ------------------------------------------------------------------------------------------------------
Fees paid indirectly (22,580)
Reduction of expenses by investment adviser (796,680)
- ------------------------------------------------------------------------------------------------------
Net expenses $3,097,901
- ------------------------------------------------------------------------------------------------------
Net investment income $14,460,172
- ------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------
Realized gain (loss) (identified cost basis)
Investment transactions $174,408
Swap transactions 454,917
- ------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments $629,325
- ------------------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation)
Investments $(2,475,902)
Swap transactions (267,889)
- ------------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments $(2,743,791)
- ------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments $(2,114,466)
- ------------------------------------------------------------------------------------------------------
Change in net assets from operations $12,345,706
- ------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
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 2006 2005
CHANGE IN NET ASSETS
- ------------------------------------------------------------------------------------------------------
FROM OPERATIONS
- ------------------------------------------------------------------------------------------------------
Net investment income $14,460,172 $15,635,213
Net realized gain (loss) on investments 629,325 1,875,472
Net unrealized gain (loss) on investments (2,743,791) (7,230,682)
- ------------------------------------------------------------------------------------------------------
Change in net assets from operations $12,345,706 $10,280,003
- ------------------------------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------
From net investment income
Class A $(11,422,176) $(12,056,821)
Class B (1,578,544) (1,913,952)
Class C (1,359,481) (1,411,847)
- ------------------------------------------------------------------------------------------------------
Total distributions declared to shareholders $(14,360,201) $(15,382,620)
- ------------------------------------------------------------------------------------------------------
Change in net assets from fund share transactions $(6,094,125) $(30,106,846)
- ------------------------------------------------------------------------------------------------------
Redemption fees $-- $691
- ------------------------------------------------------------------------------------------------------
Total change in net assets $(8,108,620) $(35,208,772)
- ------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------
At beginning of period 319,690,835 354,899,607
At end of period (including accumulated distributions
in excess of net investment income of $126,026 and
$216,146, respectively) $311,582,215 $319,690,835
- ------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS Financial Highlights
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. This information has been audited by the fund's independent registered public
accounting firm, whose report, together with the fund's financial statements, are included in this report.
CLASS A
YEARS ENDED 3/31
-------------------------------------------------------------------------------
2006 2005 2004 2003 2002
Net asset value, beginning of period $8.58 $8.70 $8.54 $8.32 $8.54
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.41 $0.42 $0.41 $0.41 $0.44
Net realized and unrealized gain (loss)
on investments (0.06) (0.13) 0.17 0.25 (0.20)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.35 $0.29 $0.58 $0.66 $0.24
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.40) $(0.41) $(0.42) $(0.44) $(0.46)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.53 $8.58 $8.70 $8.54 $8.32
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 4.18 3.49 6.94 8.00 2.78
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.06 1.04 1.04 1.05 1.15
Expenses after expense reductions (f) 0.81 0.79 0.88 0.90 0.91
Net investment income 4.71 4.90 4.80 4.85 5.12
Portfolio turnover 9 8 9 13 15
Net assets at end of period (000 Omitted) $240,212 $241,850 $264,797 $274,442 $276,719
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
CLASS B
YEARS ENDED 3/31
--------------------------------------------------------------------------
2006 2005 2004 2003 2002
Net asset value, beginning of period $8.59 $8.72 $8.55 $8.33 $8.55
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.34 $0.36 $0.35 $0.35 $0.37
Net realized and unrealized gain (loss)
on investments (0.05) (0.14) 0.18 0.24 (0.20)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.29 $0.22 $0.53 $0.59 $0.17
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.34) $(0.35) $(0.36) $(0.37) $(0.39)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.54 $8.59 $8.72 $8.55 $8.33
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 3.40 2.60 6.27 7.19 2.00
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.81 1.79 1.79 1.80 1.90
Expenses after expense reductions (f) 1.56 1.54 1.63 1.65 1.66
Net investment income 3.96 4.15 4.05 4.10 4.37
Portfolio turnover 9 8 9 13 15
Net assets at end of period (000 Omitted) $36,752 $43,930 $52,594 $59,591 $61,627
- -----------------------------------------------------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS
Financial Highlights - continued
CLASS C
YEARS ENDED 3/31
--------------------------------------------------------------------------
2006 2005 2004 2003 2002
Net asset value, beginning of period $8.61 $8.73 $8.56 $8.34 $8.56
- -----------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income (d) $0.35 $0.36 $0.35 $0.35 $0.37
Net realized and unrealized gain (loss)
on investments (0.06) (0.13) 0.18 0.24 (0.20)
- -----------------------------------------------------------------------------------------------------------------------------
Total from investment operations $0.29 $0.23 $0.53 $0.59 $0.17
- -----------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.34) $(0.35) $(0.36) $(0.37) $(0.39)
- -----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.56 $8.61 $8.73 $8.56 $8.34
- -----------------------------------------------------------------------------------------------------------------------------
Total return (%) (t)(s)(r) 3.41 2.72 6.27 7.18 2.00
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS (%) (TO AVERAGE NET ASSETS)
AND SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------
Expenses before expense reductions (f) 1.81 1.79 1.79 1.80 1.90
Expenses after expense reductions (f) 1.56 1.54 1.63 1.65 1.66
Net investment income 4.09 4.15 4.05 4.10 4.37
Portfolio turnover 9 8 9 13 15
Net assets at end of period (000 Omitted) $34,618 $33,911 $37,508 $39,420 $36,146
- -----------------------------------------------------------------------------------------------------------------------------
Any redemption fees charged by the fund during the 2004 and 2005 fiscal years 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.
(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.
SEE NOTES TO FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
(1) BUSINESS AND ORGANIZATION
MFS Municipal Income Fund (the fund) is a series of MFS Municipal Series Trust
(the trust). The trust 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 (other than short-term instruments),
including restricted debt instruments, are generally valued at an evaluated
bid price as reported by an independent pricing service. Values of debt
instruments 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. Short-term instruments with a maturity at issuance of
365 days or less are generally valued at amortized cost, which approximates
market value. Swaps are generally valued on the basis of quotations from
brokers and dealers. Securities and other assets generally valued on the basis
of information from an independent pricing service may also be valued on the
basis of information from brokers and dealers. When pricing-service
information or market quotations are not readily available, securities are
priced at fair value as determined under the direction of the Board of
Trustees.
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. Derivative instruments include swap agreements.
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 is recorded as unrealized appreciation or
depreciation in the Statement of Operations. Risks may arise upon entering
into these agreements from the potential inability of counterparties to meet
the terms of their contract and from unanticipated changes in the value of the
financial index on which the swap agreement is based. Interest rate swap
agreements are agreements to exchange cash flows periodically based on a
notional principal amount, such as the exchange of fixed rate interest
payments for floating rate interest payments, which are based on a specific
financial index, or the exchange of two distinct floating rate payments. The
net receivable or payable associated with these payments is accrued daily and
recorded as an unrealized gain or loss, and any payments received or made are
recorded as realized gains or losses, in the Statement of Operations. The
primary risk associated with interest rate swap agreements is that unfavorable
changes in the fluctuation of interest rates could adversely impact the fund.
SHORT TERM FEES - For purchases made on or after July 1, 2004 and before April
1, 2005, the fund charged a 2% redemption fee (which was retained by the fund)
on proceeds from Class A, Class B, and Class C shares redeemed or exchanged
within 5 business days following their acquisition (either by purchase or
exchange). Effective April 1, 2005, the fund no longer charges a redemption
fee. See the fund's prospectus for details. Any redemption fees charged are
accounted for as an addition to paid-in capital.
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. All premium and
original issue discount is amortized or accreted for tax reporting purposes as
required by federal income tax regulations. The fund may receive proceeds from
litigation settlements involving its portfolio holdings. Any proceeds received
are reflected in realized gain/loss in the Statement of Operations, or in
unrealized gain/loss if the security is still held by the fund.
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 is 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, 2006, is shown as a
reduction of total expenses on the Statement of Operations.
TAX MATTERS AND DISTRIBUTIONS - The fund intends to continue 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. Accordingly, no provision for federal income
tax is required in the 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 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.
The tax character of distributions declared to shareholders is as follows:
MARCH 31, 2006 MARCH 31, 2005
Ordinary income (including any
short-term capital gains) $-- $27,254
Tax-exempt income 14,360,201 15,355,366
----------------------------------------------------------------
Total distributions $14,360,201 $15,382,620
The federal tax cost and the tax basis components of distributable earnings
were as follows:
AS OF MARCH 31, 2006
Cost of investments $290,150,614
----------------------------------------------------------
Gross appreciation $22,050,402
Gross depreciation (3,806,355)
----------------------------------------------------------
Net unrealized appreciation (depreciation) $18,244,047
Undistributed tax-exempt income $1,078,782
Capital loss carryforwards (4,190,232)
Other temporary differences (977,077)
As of March 31, 2006, the fund had available capital loss carryforwards to
offset future realized gains. Such losses expire as follows:
March 31, 2011 $(104,559)
March 31, 2012 (4,085,673)
----------------------------------------------------------
$(4,190,232)
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 shares will convert to Class A shares 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
advisory and administrative services, and general office facilities. 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, 2006, this waiver amounted to $794,807 and is
reflected as a reduction of total expenses in the Statement of Operations.
The management fee incurred for the year ended March 31, 2006 was equivalent
to an annual effective rate of 0.30% of the fund's average daily
net assets.
DISTRIBUTOR - MFS Fund Distributors, Inc. (MFD), a wholly owned subsidiary of
MFS, as distributor, received $57,357 for the year ended March 31, 2006, as
its portion of the initial sales charge on sales of Class A shares of the
fund.
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 Fee Plan Table:
TOTAL ANNUAL DISTRIBUTION
DISTRIBUTION SERVICE DISTRIBUTION EFFECTIVE AND SERVICE
FEE RATE FEE RATE PLAN(1) RATE(2) FEE
Class A 0.10% 0.25% 0.35% 0.25% $608,334
Class B 0.75% 0.25% 1.00% 1.00% 400,650
Class C 0.75% 0.25% 1.00% 1.00% 345,034
- --------------------------------------------------------------------------------
Total Distribution and Service Fees$1,354,018
(1) 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.
(2) The annual effective rates represent actual fees incurred under the
distribution plan for the year ended March 31, 2006 based on each class'
average daily net assets. Payment of the 0.10% annual Class A distribution
fee is not yet implemented and will commence 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,
2006, were as follows:
AMOUNT
Class A $8,903
Class B $59,246
Class C $4,632
SHAREHOLDER SERVICING AGENT - The fund pays a portion of shareholder servicing
costs to MFS Service Center, Inc. (MFSC), a wholly-owned subsidiary of MFS.
MFSC receives a fee from the fund, for its services as shareholder servicing
agent, set periodically under the supervision of the fund's Board of Trustees.
For the year ended March 31, 2006, the fee was $335,209, which equated to
0.1054% annually of the fund's average daily net assets. MFSC also receives
payment from the fund for out-of-pocket and sub-accounting expenses paid by
MFSC on behalf of the fund. For the year ended March 31, 2006, these costs
amounted to $79,495.
ADMINISTRATOR - MFS provides certain financial, legal, shareholder
communications, compliance, and other administrative services to certain funds
for which MFS acts as investment adviser. Under an administrative services
agreement, the funds may partially reimburse MFS the costs incurred to provide
these services, subject to review and approval by the Board of Trustees. Each
fund is charged a fixed amount plus a fee based on calendar year average net
assets. Effective July 1, 2005, the fund's annual fixed amount is $10,000. The
administrative services fee incurred for the year ended March 31, 2006 was
equivalent to an annual effective rate of 0.0137% 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 who are officers of the investment
adviser, or to officers of the fund, 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 retired Independent Trustees which resulted in a
pension expense of $5,751. This amount is included in Independent trustees'
compensation for the year ended March 31, 2006. The deferred liability for
retirement benefits payable to retired Trustees amounted to $31,194 at March
31, 2006, 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, 2006, the fee paid to Tarantino LLC
was $2,125. MFS has agreed to reimburse the fund for a portion of the payments
made by the funds to Tarantino LLC in the amount of $1,873, 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.
(4) PORTFOLIO SECURITIES
Purchases and sales of investments, other than U.S. government securities,
purchased option transactions, and short-term obligations, aggregated
$27,704,803 and $31,794,529, 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 3/31/06 YEAR ENDED 3/31/05
SHARES AMOUNT SHARES AMOUNT
Shares sold
Class A 3,325,237 $28,649,761 1,567,579 $13,461,021
Class B 537,071 4,625,461 454,146 3,903,573
Class C 633,255 5,472,817 544,452 4,690,961
- --------------------------------------------------------------------------------------------------------------
4,495,563 $38,748,039 2,566,177 $22,055,555
Shares issued to shareholders in
reinvestment of distributions
Class A 734,629 $6,332,181 849,343 $7,292,898
Class B 90,476 781,204 118,406 1,017,998
Class C 104,388 902,609 119,904 1,032,616
- ------------------------------------------------------------------------------------------------------------
929,493 $8,015,994 1,087,653 $9,343,512
Shares reacquired
Class A (4,066,222) $(34,988,521) (4,659,350) $(39,924,894)
Class B (1,435,040) (12,389,239) (1,495,083) (12,809,285)
Class C (634,387) (5,480,398) (1,021,491) (8,771,734)
- ------------------------------------------------------------------------------------------------------------
(6,135,649) $(52,858,158) (7,175,924) $(61,505,913)
Net change
Class A (6,356) $(6,579) (2,242,428) $(19,170,975)
Class B (807,493) (6,982,574) (922,531) (7,887,714)
Class C 103,256 895,028 (357,135) (3,048,157)
- ------------------------------------------------------------------------------------------------------------
(710,593) $(6,094,125) (3,522,094) $(30,106,846)
(6) LINE OF CREDIT
The fund and other affiliated funds participate in a $1 billion unsecured line
of credit provided by a syndication of banks under a credit agreement.
Borrowings may be made for temporary financing needs. Interest is charged to
each fund, based on its borrowings, at a rate equal to the Federal Reserve
funds rate plus 0.35%. In addition, a commitment fee, based on the average
daily, unused portion of the line of credit, is allocated among the
participating funds at the end of each calendar quarter. The commitment fee
allocated to the fund for the year ended March 31, 2006 was $2,047, and is
included in miscellaneous expense on the Statement of Operations. The fund had
no significant borrowings during the year ended March 31, 2006.
(7) CONCENTRATION OF CREDIT RISK
At March 31, 2006, 40% of securities in the portfolio of investments are
backed by letters of credit or bond insurance of various financial
institutions and financial guaranty assurance agencies. The percentage of
investments insured by or supported (backed) by a letter of credit from any
one institution or agency did not exceed 14.5% of total investments.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To The 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 series
comprising MFS Municipal Series Trust) (the "Trust") as of March 31, 2006, 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 audit.
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, 2006, 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of MFS Muncipal
Income Fund as of March 31, 2006, 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 23, 2006
TRUSTEES AND OFFICERS -- IDENTIFICATION AND BACKGROUND
The Trustees and officers of the Trust, as of May 1, 2006, 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.
PRINCIPAL OCCUPATIONS DURING
POSITION(s) HELD TRUSTEE/OFFICER THE PAST FIVE YEARS &
NAME, DATE OF BIRTH WITH FUND SINCE(H) OTHER DIRECTORSHIPS(J)
- ------------------- ---------------- --------------- ----------------------------------
INTERESTED TRUSTEES
Robert J. Manning(k) Trustee February 2004 Massachusetts Financial Services
(born 10/20/63) Company, Chief Executive Officer,
President, Chief Investment
Officer and Director
Robert C. Pozen(k) Trustee February 2004 Massachusetts Financial Services
(born 08/08/46) Company, Chairman (since February
2004); 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
INDEPENDENT TRUSTEES
J. Atwood Ives Trustee and Chair February 1992 Private investor; Eastern
(born 05/01/36) of Trustees Enterprises (diversified services
company), Chairman, Trustee and
Chief Executive Officer (until
November 2000)
Robert E. Butler(n) Trustee January 2006 Consultant - regulatory and
(born 11/29/41) compliance matters (since July
2002); PricewaterhouseCoopers LLP
(professional services firm),
Partner (November 2000 until June
2002)
Lawrence H. Cohn, M.D. Trustee August 1993 Brigham and Women's Hospital,
(born 03/11/37) Senior Cardiac Surgeon, Chief of
Cardiac Surgery (until 2005);
Harvard Medical School, Professor
of Surgery; Brigham and Women's
Hospital Physicians' Organization,
Chair (2000 to 2004)
David H. Gunning Trustee January 2004 Cleveland-Cliffs Inc. (mining
(born 05/30/42) products and service provider),
Vice Chairman/Director (since
April 2001); Encinitos Ventures
(private investment company),
Principal (1997 to April 2001);
Lincoln Electric Holdings, Inc.
(welding equipment manufacturer),
Director
William R. Gutow Trustee December 1993 Private investor and real estate
(born 09/27/41) consultant; Capitol Entertainment
Management Company (video
franchise), Vice Chairman
Michael Hegarty Trustee December 2004 Retired; AXA Financial (financial
(born 12/21/44) 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 Trustee July 1981 Hemenway & Barnes (attorneys),
(born 06/23/35) Partner
J. Dale Sherratt Trustee August 1993 Insight Resources, Inc.
(born 09/23/38) (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 Trustee March 2005 Private investor; Prism Venture
(born 08/05/57) Partners (venture capital), Co-
founder and General Partner (until
June 2004); St. Paul Travelers
Companies (commercial property
liability insurance), Director
Robert W. Uek Trustee January 2006 Retired (since 1999);
(born 05/18/41) 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
Maria F. Dwyer(k) President November 2005 Massachusetts Financial Services
(born 12/01/58) Company, Executive Vice President
and Chief Regulatory Officer
(since March 2004); Fidelity
Management & Research Company,
Vice President (prior to March
2004); Fidelity Group of Funds,
President and Treasurer (prior to
March 2004)
Tracy Atkinson(k) Treasurer September 2005 Massachusetts Financial Services
(born 12/30/64) Company, Senior Vice President
(since September 2004);
PricewaterhouseCoopers LLP,
Partner (prior to September 2004)
Christopher R. Bohane(k) Assistant July 2005 Massachusetts Financial Services
(born 1/18/74) Secretary and Company, Vice President and Senior
Assistant Clerk Counsel (since April 2003);
Kirkpatrick & Lockhart LLP (law
firm), Associate (prior to April
2003); Nvest Services Company,
Assistant Vice President and
Associate Counsel (prior to
January 2001)
Ethan D. Corey(k) Assistant July 2005 Massachusetts Financial Services
(born 11/21/63) Secretary and Company, Special Counsel (since
Assistant Clerk December 2004); Dechert LLP (law
firm), Counsel (prior to December
2004)
David L. DiLorenzo(k) Assistant July 2005 Massachusetts Financial Services
(born 8/10/68) Treasurer Company, Vice President (since
June 2005); JP Morgan Investor
Services, Vice President (January
2001 to June 2005); State Street
Bank, Vice President and Corporate
Audit Manager (prior to January
2001)
Timothy M. Fagan(k) Assistant September 2005 Massachusetts Financial Services
(born 7/10/68) Secretary and Company, Vice President and Senior
Assistant Clerk 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) Assistant July 2005 Massachusetts Financial Services
(born 10/27/70) Treasurer Company, Vice President (since May
2005); JP Morgan Investment
Management Company, Vice President
(prior to May 2005)
Ellen Moynihan(k) Assistant April 1997 Massachusetts Financial Services
(born 11/13/57) Treasurer Company, Senior Vice President
Susan S. Newton(k) Assistant May 2005 Massachusetts Financial Services
(born 03/07/50) Secretary and Company, Senior Vice President and
Assistant Clerk 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) Assistant July 2005 Massachusetts Financial Services
(born 11/05/70) Secretary and Company, Vice President and Senior
Assistant Clerk Counsel (since June 2004); Bingham
McCutchen LLP (law firm),
Associate (January 2001 to June
2004); Preti, Flaherty, Beliveau,
Pachios & Haley, LLC, Associate
(prior to January 2001)
Mark N. Polebaum(k) Secretary and January 2006 Massachusetts Financial Services
(born 05/01/52) Clerk 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 Independent Chief June 2004 Tarantino LLC (provider of
(born 03/07/44) Compliance compliance services), Principal
Officer (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 (February
1997 to March 2003)
James O. Yost(k) Assistant September 1990 Massachusetts Financial Services
(born 06/12/60) Treasurer 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.
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, 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 December 31, 2005, each Trustee served as a board member of 98 funds
within the MFS Family of Funds.
The Trust held a shareholders' meeting in 2005, and will hold a shareholders' meeting at least once
every five years thereafter, to elect Trustees.
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 State Street Bank and Trust Company
500 Boylston Street, Boston, MA 225 Franklin Street, Boston, MA 02110
02116-3741
INDEPENDENT REGISTERED PUBLIC
DISTRIBUTOR ACCOUNTING FIRM
MFS Fund Distributors, Inc. Deloitte & Touche LLP
500 Boylston Street, Boston, MA 200 Berkeley Street, Boston, MA 02116
02116-3741
PORTFOLIO MANAGER
Geoffrey L. Schechter
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 1-202-551-5850. 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 2006 income
tax forms in January 2007. The following information is provided pursuant to
provisions of the Internal Revenue Code.
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.
CONTACT INFORMATION
INVESTOR SERVICE
Write to us at: MFS Service Center, Inc.
P.O. Box 55824
Boston, MA 02205-5824
Type of Information Phone number Hours, Eastern Time
- --------------------------------------------------------------------------------
General information 1-800-225-2606 8 a.m. to 8 p.m., any
business day
- --------------------------------------------------------------------------------
Speech- or hearing-impaired 1-800-637-6576 9 a.m. to 5 p.m., any
business day
- --------------------------------------------------------------------------------
Shares prices, account 1-800-MFS-TALK
balances exchanges (1-800-637-8255) 24 hours a day, 365 days a
or stock and bond outlooks touch-tone required year
- --------------------------------------------------------------------------------
M F S(SM)
INVESTMENT MANAGEMENT(R)
MFS Investment Management(R)
MFS(R) investment products are offered through MFS Fund Distributors, Inc.,
500 Boylston Street, Boston, MA 02116.
LMB-ANN-05/06 10M
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.
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").
For the fiscal years ended March 31, 2006 and 2005, audit fees billed to the
Funds by Deloitte were as follows:
Audit Fees
FEES BILLED BY DELOITTE: 2006 2005
MFS Alabama Municipal Bond Fund $ 32,954 $ 33,754
MFS Arkansas Municipal Bond Fund 32,954 33,754
MFS California Municipal Bond Fund 32,954 33,754
MFS Florida Municipal Bond Fund 32,954 33,754
MFS Georgia Municipal Bond Fund 32,954 33,754
MFS Maryland Municipal Bond Fund 32,954 33,754
MFS Massachusetts Municipal Bond Fund 32,954 33,754
MFS Mississippi Municipal Bond Fund 32,954 33,754
MFS Municipal Income Fund 36,117 36,917
MFS New York Municipal Bond Fund 32,954 33,754
MFS North Carolina Municipal Bond Fund 32,954 33,754
MFS Pennsylvania Municipal Bond Fund 32,954 33,754
MFS South Carolina Municipal Bond Fund 32,954 33,754
MFS Tennessee Municipal Bond Fund 32,954 33,754
MFS Virginia Municipal Bond Fund 32,954 33,754
MFS West Virginia Municipal Bond Fund 32,954 33,754
TOTAL $530,427 $543,227
For the fiscal years ended March 31, 2006 and 2005, 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 Fees(1) Tax Fees(2) All Other Fees(3)
FEES BILLED BY DELOITTE: 2006 2005 2006 2005 2006 2005
To MFS Alabama
Municipal Bond Fund $ 0 $ 0 $ 9,550 $ 9,550 $ 514 $ 0
To MFS Arkansas
Municipal Bond Fund 0 0 9,550 9,550 519 0
To MFS California
Municipal Bond Fund 0 0 9,550 9,550 548 0
To MFS Florida
Municipal Bond Fund 0 0 9,550 9,550 514 0
To MFS Georgia
Municipal Bond Fund 0 0 9,550 9,550 511 0
To MFS Maryland
Municipal Bond Fund 0 0 9,550 9,550 520 0
To MFS Massachusetts
Municipal Bond Fund 0 0 9,550 9,550 532 0
To MFS Mississippi
Municipal Bond Fund 0 0 9,550 9,550 514 0
To MFS Municipal
Income Fund 0 0 9,550 9,550 539 0
To MFS New York
Municipal Bond Fund 0 0 9,550 9,550 524 0
To MFS North Carolina
Municipal Bond Fund 0 0 9,550 9,550 543 0
To MFS Pennsylvania
Municipal Bond Fund 0 0 9,550 9,550 516 0
To MFS South Carolina
Municipal Bond Fund 0 0 9,550 9,550 522 0
To MFS Tennessee
Municipal Bond Fund 0 0 9,550 9,550 518 0
To MFS Virginia
Municipal Bond Fund 0 0 9,550 9,550 539 0
To MFS West Virginia
Municipal Bond Fund 0 0 9,550 9,550 520 0
TOTAL FEES BILLED BY DELOITTE
TO ABOVE FUNDS: $ 0 $ 0 $152,800 $152,800 $ 8,393 $ 0
To MFS and MFS Related
Entities of MFS Alabama
Municipal Bond Fund* $931,475 $1,242,066 $ 0 $ 62,000 $444,131 $595,000
To MFS and MFS Related
Entities of MFS Arkansas
Municipal Bond Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS California
Municipal Bond Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS Florida
Municipal Bond Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS Georgia
Municipal Bond Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS Maryland
Municipal Bond Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS
Massachusetts Municipal
Bond Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS
Mississippi Municipal
Bond Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS Municipal
Income Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS New York
Municipal Bond Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS North
Carolina Municipal Bond
Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS
Pennsylvania Municipal
Bond Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS South
Carolina Municipal Bond
Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS Tennessee
Municipal Bond Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS Virginia
Municipal Bond Fund* 931,475 1,242,066 0 62,000 444,131 595,000
To MFS and MFS Related
Entities of MFS West
Virginia Municipal Bond
Fund* 931,475 1,242,066 0 62,000 444,131 595,000
AGGREGATE FEES FOR NON-AUDIT
SERVICES:
2006 2005
To MFS Alabama
Municipal Bond Fund, $1,493,265 $1,946,217
MFS and MFS Related
Entities(#)
To MFS Arkansas
Municipal Bond Fund, 1,493,270 1,946,217
MFS and MFS Related
Entities(#)
To MFS California
Municipal Bond Fund, 1,493,299 1,946,217
MFS and MFS Related
Entities(#)
To MFS Florida
Municipal Bond Fund, 1,493,265 1,946,217
MFS and MFS Related
Entities(#)
To MFS Georgia
Municipal Bond Fund, 1,493,262 1,946,217
MFS and MFS Related
Entities(#)
To MFS Maryland
Municipal Bond Fund, 1,493,271 1,946,217
MFS and MFS Related
Entities(#)
To MFS Massachusetts
Municipal Bond Fund, 1,493,283 1,946,217
MFS and MFS Related
Entities(#)
To MFS Mississippi
Municipal Bond Fund, 1,493,265 1,946,217
MFS and MFS Related
Entities(#)
To MFS Municipal
Income Fund, MFS 1,493,290 1,946,217
and MFS Related Entities(#)
To MFS New York
Municipal Bond Fund, 1,493,275 1,946,217
MFS and MFS Related
Entities(#)
To MFS North Carolina
Municipal Bond Fund, 1,493,294 1,946,217
MFS and MFS Related
Entities(#)
To MFS Pennsylvania
Municipal Bond Fund, 1,493,267 1,946,217
MFS and MFS Related
Entities(#)
To MFS South Carolina
Municipal Bond Fund, 1,493,273 1,946,217
MFS and MFS Related
Entities(#)
To MFS Tennessee
Municipal Bond Fund, 1,493,269 1,946,217
MFS and MFS Related
Entities(#)
To MFS Virginia
Municipal Bond Fund, 1,493,290 1,946,217
MFS and MFS Related
Entities(#)
To MFS West Virginia
Municipal Bond Fund, 1,493,271 1,946,217
MFS and MFS Related
Entities(#)
* 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 Fund (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 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.
(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 between such 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.
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 7(d)(2)(ii)(G) of Schedule 14A 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 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.
(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.
NOTICE
A copy of the Amended and Restated Declaration of Trust 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
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By (Signature and Title)* MARIA F. DWYER
-----------------------------------------------------
Maria F. Dwyer, President
Date: May 23, 2006
------------
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)* MARIA F. DWYER
-----------------------------------------------------
Maria F. Dwyer, President (Principal Executive
Officer)
Date: May 23, 2006
------------
By (Signature and Title)* TRACY ATKINSON
-----------------------------------------------------
Tracy Atkinson, Treasurer (Principal Financial Officer
and Accounting Officer)
Date: May 23, 2006
------------
* Print name and title of each signing officer under his or her signature.