SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 14, 2003
FEDERATED PREMIER INTERMEDIATE MUNICIPAL INCOME FUND
(Exact name of registrant as specified in its charter)
Delaware 001-31563 47-1284989
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (800) 341-7400
Item 9. Regulation FD Disclosure.
The following information is furnished pursuant to Item 9 of Form 8-K :
Following is information that may be made publicly available on or after
May 14, 2003.
Information as of 4/30/03 unless otherwise noted.
Overview
Objective:
Current income exempt from federal income tax, including the alternative
minimum tax (AMT)
Pricing
Market Price $13.66 (Source: Bloomberg)
Daily NAV $14.50
Yield (%)
Current Yield based on Market Price 5.49
Current Yield based on NAV 5.17
Taxable Equivalent Market Yield* 8.94
Dividends
Paid Monthly
Record Date: 23rd or the preceding business day of the month
4/03 $0.06250
3/03 $0.06250
2/03 $0.06250
Investment Concentration
Intermediate-term municipal securities
Portfolio Assets
$161.7 million
Portfolio Profile
Weighted Average Effective Maturity 8.90 Years
Weighted Average Effective Duration to Common** 8.29 Years
Weighted Average Effective Duration to Gross 5.16 Years
Weighted Average Quality Aa2/AA (Rated Only)
Average Coupon 5.59%
Number of Securities 96
Recommended Benchmark
Lehman Brothers Aggregate Municipal Bond Index
Portfolio Managers
Mary Jo Ochson, CFA
Began Managing Fund: 12/02
Lee R. Cunningham, II
Began Managing Fund: 12/02
R.J. Gallo
Began Managing Fund: 12/02
Fund History
NYSE Ticker FPT
CUSIP 31423M105
Inception 12/20/02
Inception NAV $14.33
Inception Share Price $15.00
Portfolio Manager Commentary
Fund Performance
The fund's NAV rose 0.55% to end April at $14.50. Based on NAV, the fund's
monthly total return, which includes the monthly dividend of 6.25 cents/share,
was 0.99%. The fund's common market price increased 0.44% over the month to end
at $13.66. Based on the common market price, the fund's total return for April
was 0.88%.
The discount of share price to NAV was 5.80% on April 30, similar to 5.70%
at the end of March. Trading volume of the fund's common shares on the NYSE
averaged about 18,500 shares per day, down from 23,900 last month.
The annualized current yield of the fund relative to its month-end closing
market price was 5.49%, which equates to 8.94% on a taxable equivalent basis for
shareholders in the 38.6% federal tax bracket.
Municipal Market
The military success of U.S. forces in Iraq allowed market participants to
refocus on the economy during April. Anticipation of accelerating economic
growth following the end of fighting in Iraq seemed to diminish in the face of
generally weak economic data. Treasury and municipal yields rose early in April
as imminent military success was clear, but reversed course as signs of economic
acceleration failed to emerge. On net, the AAA 10-year yield fell 7 basis points
to 3.54% during April, and yields across the municipal yield curve fell from 1
to 14 basis points. (All yields from Municipal Market Data).
Seasonal upward pressure on short-term municipal yields during tax season
contributed to a slight flattening in the slope of the municipal yield curve,
with the difference between one-year and 10-year AAA yields ending April at 246
basis points, down from 256 basis points last month. The tepid pace of economic
recovery continues to underpin the ongoing steep slope of yield curve.
The total return on the Lehman Brothers Aggregate Municipal Bond Index was
0.66% for the month. The healthcare, education and insured segments of the index
were the three strongest performing credit sectors. Holdings in these sectors
contributed to the fund's positive performance in April and cumulatively
represent over 65% of the fund portfolio.
Investment Strategy
The portfolio management team continued to increase the fund's holdings of
BBB or lower-rated bonds, consistent with the fund's income objective. The fund
purchased such securities in the hospital, life care and special tax sectors
during the month. The use of leverage continues to enhance the fund's ability to
pay attractive dividends to common shareholders. The fund paid an average of
1.16% in preferred share dividends during April, while the capital contributed
by preferred shareholders was invested in the fund's portfolio of intermediate
bonds, which had an average yield to effective maturity of 4.52% for the month.
Cumulative Total Return (%)
1 month Since Inception
(12/20/02)
Market Price 0.88 (7.74)
NAV (based on $15.00) (3.56) (2.13)
NAV (based on $14.33) 0.99 2.51
Premium/Discount of Market Price to NAV
5.79% Discount
Top Ten Holdings
Total % of Portfolio: 24.37%
Metropolitan Transportation Authority, 2.89%
NY (MBIA Insured)
Pennsylvania State IDA, Economic 2.78%
Development (AMBAC Insured)
Salt River Project, AZ, Agricultural 2.77%
Improvement & Power
California State, Refunding UT GO Bonds 2.69%
Alaska State Housing Finance Corp. 2.64%
(MBIA Insured)
Delaware Health Facilities Authority 2.54%
(AMBAC Insured)
Austin, TX, Electric Utility System 2.13%
(AMBAC Insured)
North Carolina Municipal Power 2.03%
Agency No. 1
Ohio State Air Quality Development 1.96%
Authority
Kentucky Economic Development Finance 1.94%
*Insured
Sector Breakdown (Top Six) (%)
Total % of Portfolio: 86.13%
Insured 48.95
Hospital 12.05
Special Tax 7.98
Lifecare 6.62
Public Power 5.54
Electric and Gas 4.99
Quality Breakdown (%)
AAA 50.25
AA 5.88
A 10.97
BBB 20.88
BB 1.79
B 1.00
Non Rated 9.23
Percent of Portfolio Callable
2003 2.54%
2004 0.00%
2005 0.00%
2006 1.24%
2007 1.96%
As of 5/8/03
Preferred Share Ratings
Moody's Aaa
Fitch AAA
Face Value of Preferred Shares $61,025,000
*Taxable Equivalent Market Yields - In calculating these yields, the market
yield is divided by (1 minus the applicable tax rate). The maximum federal tax
rate (38.6%) is used when calculating the taxable equivalent market yield.
Federal Tax Rates are based on the 2003 rates as stated in the Economic Growth
and Tax Relief Reconciliation Act of 2001.
**Duration is a measure of a security's price sensitivity to changes in
interest rates. Securities with longer durations are more sensitive to changes
in interest rates than securities of shorter durations. The Fund is a closed-end
fund.Unlike open-end funds, closed-end funds are not continually offered.There
is a one-time public offering, and once issued, shares of closed-end funds are
bought and sold in the open market.Consequently, shares of closed-end funds may
trade at, above or below their net asset values ("NAV"). If a closed-end fund's
shares trade at a price below their NAV, they are said to be trading at a
"discount."
Conversely, if a closed-end fund's shares trade at a price above their NAV,
they are said to be trading at a "premium." Shares of closed-end funds
frequently trade at a discount. The Fund offers Common Shares and Preferred
Shares. The Pricing, Yield, Dividends, Fund History and Total Return information
provided herein relates to Common Shares only. Unlike Preferred Shares, Common
Shares are not rated.
The Fund's issuance of Preferred Shares creates leverage risks for holders
of Common Shares.Two major types of risks created by leverage include: (1) the
likelihood of greater volatility of NAV and market price of Common Shares,
because changes in the value of the Fund's portfolio securities are borne
entirely by holders of Common Shares; and (2) the possibility either that income
available for Common Share dividends will fall if the Preferred Shares dividend
rate rises, or that income available for Common Shares dividends will fluctuate
because the Preferred Shares dividend rate varies.
The Fund invests in high-yield, lower-rated securities that generally
entail greater market, credit and liquidity risks than investment-grade
securities.
Please refer to the Fund's prospectus for more information on the risks
associated with an investment in the Fund.
Income may be subject to state and local taxes.
Past performance is no guarantee of future results. Total return, price,
yields, and NAV will fluctuate. Total returns of less than 1 year are
cumulative.
Portfolio composition is subject to change. Credit ratings pertain only to
the securities in the Fund's portfolio and do not protect the Fund against
market risk.
For additional information, including definitions of related terms and
indexes, see the Financial Glossary and Benchmark Index Glossary.
Total return data assumes full reinvestment of dividends.
Not FDIC Insured May Lose Value No Bank Guarantee
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FEDERATED PREMIER
INTERMEDIATE MUNICIPAL INCOME
FUND
(Registrant)
By /s/ Mary Jo Ochson
Mary Jo Ochson
Vice President
Date: May 14, 2003