<PAGE> 1
ANNUAL REPORT / DECEMBER 31 1999
AIM MUNICIPAL BOND FUND
[COVER IMAGE]
[AIM LOGO APPEARS HERE]
<PAGE> 2
[COVER IMAGE]
-------------------------------------
BENEATH THE BROOKLYN BRIDGE BY JANE WOOSTER SCOTT
STATE AND LOCAL GOVERNMENTS REGULARLY ISSUE MUNICIPAL BONDS
TO FUND A WIDE ARRAY OF PROJECTS, INCLUDING ROADS, BRIDGES AND
RECREATIONAL FACILITIES, THAT IMPROVE THE QUALITY OF LIFE IN
COMMUNITIES ACROSS THE NATION. SCOTT'S PAINTING CAPTURES A
SLICE OF AN URBAN LANDSCAPE MADE MORE HOSPITABLE AND
ENJOYABLE BY THESE PROJECTS.
-------------------------------------
AIM Municipal Bond Fund is for shareholders who seek a high level of current
income exempt from federal income taxes by investing in a diversified portfolio
of municipal bonds.
ABOUT FUND PERFORMANCE AND PORTFOLIO DATA THROUGHOUT THIS REPORT:
o AIM Municipal Bond Fund's performance figures are historical, and they
reflect changes in net asset value and reinvestment of distributions.
o When sales charges are included in performance figures, Class A share
performance reflects the maximum 4.75% sales charge, and Class B and Class C
share performance reflects the applicable contingent deferred sales charge
(CDSC) for the period involved. The CDSC on Class B shares declines from 5%
beginning at the time of purchase to 0% at the beginning of the seventh
year. The CDSC on Class C shares is 1% for the first year after purchase.
The performance of the fund's Class B and Class C shares will differ from
that of its Class A shares due to different sales charge structure and
expenses.
o The 30-day yield is calculated using a formula defined by the SEC. The
formula is based on the portfolio's potential earnings from dividends,
interest, yield-to-maturity, or yield-to-call of the portfolio's bond
holdings, net of all expenses and annualized.
o The taxable-equivalent yield is calculated in the same manner as the 30-day
yield with an adjustment for a stated, assumed tax rate.
o The fund's annualized distribution rate reflects its most recent monthly
dividend distribution multiplied by 12 and divided by the most recent
month-end net asset value.
o Government securities, such as U.S. Treasury bills, notes and bonds, offer a
high degree of safety and are guaranteed as to the timely payment of
principal and interest if held to maturity. Fund shares are not insured, and
their value will vary with market conditions.
o The fund's investment return and principal value will fluctuate, so an
investor's shares, when redeemed, may be worth more or less than their
original cost.
ABOUT INDEXES AND OTHER PERFORMANCE BENCHMARKS CITED IN THIS REPORT:
o The unmanaged Lehman Municipal Bond Index is a composite representing an
approximation of the performance of investment-grade municipal bonds,
tracked by Lehman Brothers, a well-known global investment bank.
o The unmanaged Lipper Municipal Debt Funds Index represents an average of the
performance of the 30 largest municipal-bond funds tracked by Lipper, Inc.,
an independent mutual fund performance monitor.
o An investment cannot be made in an index. Unless otherwise indicated, index
results include reinvested dividends and do not reflect sales charges.
AN INVESTMENT IN THE FUND IS NOT A DEPOSIT OF A BANK AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY. THERE IS A RISK THAT YOU COULD LOSE SOME OR ALL OF
YOUR MONEY.
This report may be distributed only to current shareholders or to persons
who have received a current prospectus of the fund.
AIM MUNICIPAL BOND FUND
<PAGE> 3
ANNUAL REPORT / CHAIRMAN'S LETTER
Dear Fellow Shareholder:
The fiscal year discussed in this report has reconfirmed our
[PHOTO OF faith in two long-established principles of investing:
Charles T. portfolio diversification and long-term thinking. We could
Bauer, title this report "What a Difference a Year Makes."
Chairman of An investor surveying conditions when the fiscal year
the Board of opened on January 1, 1999, would have seen a market
THE FUND dominated by large-capitalization stocks and high-quality
APPEARS HERE] bonds, especially U.S. Treasuries. During 1998, two
well-known indexes of large-capitalization U.S. companies,
the S&P 500 and the Dow Jones Industrial Average, were up
28.60% and 18.15%, respectively. By contrast,
smaller-company stocks in the Russell 2000 had lost 2.55%.
Overseas, many markets were languishing, especially in Asia,
where so many financial difficulties had originated in 1997.
In bond markets as well, name-brand quality was the
place to be. The Lehman Government/Corporate Bond Index,
which follows sovereign issues and investment-grade debt, was up 9.47%, while
the Lehman High Yield Index, which tracks riskier "junk bonds," had risen only
1.60%.
It would be easy for an investor to conclude that blue-chip issues, whether
equity or fixed-income, were the place to be, that it was time to divest himself
of everything else and put all his eggs in the blue-chip basket. The investor,
of course, would be wrong.
MARKETS TURN
While large-capitalization stocks continued to do very well, during 1999 markets
broadened dramatically with many investment sectors performing a complete
turnaround. For example, the small-cap stocks in the Russell 2000 were up 21.26%
for calendar year 1999, and many Asian markets, particularly Japan, had staged a
comeback.
The same holds true of bonds. The higher-quality Lehman index was down 2.15%
during 1999 while the Lehman High Yield index was up 2.39%.
The point, at the risk of sounding repetitive to those of you who have
invested with us for a long time, is that this is why diversification is a
fundamental investing principle. Market sectors and asset classes go in and out
of favor, but over the long run--and the long run is several years--the markets'
overall trend has been upward. Selecting an asset class or a market sector on
the basis of a short-term snapshot of conditions is usually unwise, as is
concentrating your portfolio in one asset class. Staying fully invested in a
diversified portfolio remains a compelling strategy and one of your best
prospects for long-term gain. We also continue to remind you that the past few
years have seen extraordinary gains in some markets, and there is no assurance
that this trend will continue.
LOOKING AHEAD
As we look about at the close of this fiscal year, we are encouraged by multiple
signs of economic health in Europe and Asia, not to mention the prolonged U.S.
economic expansion. However, we are aware of how easily an investor could have
been misled by conditions just 12 months ago. For our shareholders, we therefore
reiterate our commitment to investing through a financial advisor. In addition
to helping you select investments appropriate to your time horizon and risk
tolerance, a financial advisor can keep you informed about how changing market
conditions affect you and your portfolio--and help ensure that when you do alter
your investments, there's a logical reason for doing so. AIM believes every
investor should be guided by a financial professional.
FUND MANAGERS COMMENT
In the pages that follow, your fund's portfolio managers discuss how they
managed your fund during the year ended December 31, how the markets behaved and
what they foresee for the near future. We trust you will find their discussion
informative. If you have any questions or comments, we invite you to contact us,
either at our Web site, aimfunds.com, or through our Client Services department
at 800-959-4246. Information about your account is also available through our
automated AIM Investor Line, 800-246-5463.
Thank you for your continued participation in The AIM Family of
Funds--Registered Trademark--.
Sincerely,
/s/ CHARLES T. BAUER
Charles T. Bauer
Chairman, A I M Advisors, Inc.
-------------------------------------
STAYING FULLY
INVESTED IN A DIVERSIFIED
PORTFOLIO REMAINS
A COMPELLING STRATEGY
AND ONE OF YOUR
BEST PROSPECTS FOR
LONG-TERM GAIN.
-------------------------------------
AIM MUNICIPAL BOND FUND
<PAGE> 4
ANNUAL REPORT / MANAGERS' OVERVIEW
FUND OFFERS ATTRACTIVE YIELD DESPITE
DISMAL BOND MARKET
RISING INTEREST RATES HAD A NEGATIVE IMPACT ON BONDS, INCLUDING MUNICIPAL
ISSUES. HOW DID THE FUND PERFORM?
Although the bond market endured its worst year since 1994, the fund provided
attractive current income (see chart below), exempt from federal income taxes,
while maintaining relative share-price stability. During the fiscal year, net
asset value per share remained within a relatively narrow range of $7.74 to
$8.42 for Class A, Class B and Class C shares, extending the fund's long-time
record of relative price stability as shown on the accompanying chart.
We manage the fund in an effort to protect it during market downturns like
the one experienced in 1999. In line with this strategy, we avoid buying
discounted bonds, which can be more volatile in price. We also strive to keep
the fund's weighted average maturity relatively short. For the year ended
December 31, 1999, total return was -2.45%, -3.28% and -3.16% for Class A, Class
B and Class C shares, respectively, excluding sales charges. The fund fared
better than its peer group, the Lipper Municipal Debt Funds Index, which
recorded a total return of -4.63%. Please keep in mind that the fund is managed
for income and stability of net asset value rather than total return.
WHAT WERE SOME OF THE MAJOR TRENDS IN THE BOND MARKET?
The weakness in the bond market in 1999 stemmed primarily from investor concerns
that strong economic growth would prompt the Federal Reserve Board (the Fed) to
raise interest rates to keep inflation at bay. Ultimately, in three separate
moves, the central bank raised the key federal funds rate from 4.75% to 5.50%.
The bond market was also rattled by Y2K concerns, which largely proved to be
unfounded, and the decline in value of the U.S. dollar against the Japanese yen.
U.S. Treasury issues endured their worst 12-month performance in 22 years.
The weakness in the Treasury market was reflected in the yield of the benchmark
30-year Treasury bond, which rose from 5.09% at the beginning of the fiscal year
to 6.48% at its conclusion. At the end of the reporting period, Treasury yields
were at their highest levels in more than two years.
Only a few bond sectors, such as high-yield corporate bonds and
emerging-markets debt, posted gains for the reporting period. Most other types
of bonds at least performed better than Treasuries. Lower-rated bonds outpaced
higher-rated bonds and shorter-term securities outperformed longer-term
securities.
HOW DID MUNICIPAL BONDS PERFORM?
Municipal bonds (munis) tended to track the performance of Treasuries. Muni bond
prices, relatively stable at the beginning of the year, began to decline in
April, sending their yields higher. Treasury yields also rose, but not as
significantly as muni yields.
As a result, the gap between Treasury and muni yields narrowed. By the end
of the fiscal year, muni yields were more than
[GRAPHIC]
YOUR FUND'S PERFORMANCE
FUND PROVIDES ATTRACTIVE INCOME
As of 12/31/99
================================================================================
30-DAY
SEC YIELD TAXABLE
30-DAY TAXABLE AT EQUIVALENT
DISTRIBUTION EQUIVALENT MAXIMUM 30-DAY
RATE AT DISTRIBUTION OFFERING SEC
CLASS NAV RATE* PRICE YIELD*
- --------------------------------------------------------------------------------
A 5.27% 8.73% 4.35% 7.20%
B 4.49 7.43 3.78 6.26
C 4.50 7.45 3.78 6.26
*Assumes highest marginal federal income tax rate of 39.6%
================================================================================
CLASS A SHARES VS.
30-YEAR U.S. TREASURY BOND
As of 12/31/99
[BAR CHART]
================================================================================
TAXABLE
EQUIVALENT TAXABLE 30-YEAR
DISTRIBUTION EQUIVALENT TREASURY
RATE* YIELD* BOND
- --------------------------------------------------------------------------------
8.73% 7.20% 6.48%
================================================================================
HISTORY OF NET ASSET VALUE STABILITY
CLASS A SHARES
6/30/92-12/31/99
[GRAPH]
================================================================================
6/30/92 8.23 3/31/95 8.04 12/31/97 8.36
9/30/92 8.31 6/30/95 8.11 3/31/98 8.32
12/31/92 8.27 9/29/95 8.16 6/30/98 8.32
3/30/93 8.43 12/29/95 8.72 9/30/98 8.41
6/30/93 8.58 3/29/96 8.16 12/31/98 8.35
9/30/93 8.74 6/28/96 8.1 3/31/99 8.32
12/31/93 8.61 9/30/96 8.14 6/30/99 8.09
3/31/94 8.13 12/31/96 8.19 9/30/99 7.93
6/30/94 8.09 3/31/97 8.1 12/31/99 7.74
9/30/94 8.01 6/30/97 8.2
12/30/94 7.78 9/30/97 8.27
This chart has no calculations; it only tracks net asset value. There is no
guarantee that the fund will maintain a constant net asset value. NAV per share
for Class A, Class B and Class C shares has not differed by more than $0.02 per
share.
Source: Lipper, Inc.
================================================================================
See important fund and index disclosures inside front cover.
AIM MUNICIPAL BOND FUND
2
<PAGE> 5
ANNUAL REPORT / MANAGERS' OVERVIEW
PORTFOLIO COMPOSITION
TOP FIVE BOND HOLDINGS
As of 12/31/99, based on total net assets
================================================================================
COUPON MATURITY %
- --------------------------------------------------------------------------------
1. New York State Urban 7.375% 01/01/02 2.23%
Development Corp.
2. New Jersey (State of) 6.40 09/15/23 1.56
3. Connecticut (State of) 6.50 03/15/02 1.54
4. Mississippi Higher 7.50 09/01/09 1.37
Education Assistance Corp.
5. New York (City of) 7.65 02/01/02 1.36
The fund's portfolio is subject to change and there is no assurance that the
fund will continue to hold any particular security.
================================================================================
PERCENTAGE OF HOLDINGS
As of 12/31/99, based on total net assets
================================================================================
[PIE CHART]
GENERAL OBLIGATION 11%
ESCROW & PRE-REFUNDING 32%
REVENUE 57%
NUMBER OF HOLDINGS 281
AVERAGE MATURITY 13 YEARS
DURATION 6 YEARS
================================================================================
90% of those of Treasuries, above the historical average of roughly 85%. Munis
thus were attractively priced in comparison to Treasuries and represented one of
the better bargains in the bond market.
Rising interest rates and weak demand deflated municipal bond prices. These
factors also contributed to a decline in new issue volume. In 1999, about $226
billion in new municipal bonds entered the market, nearly a 21% decline from
1998, according to The Bond Buyer, a newspaper that tracks the muni bond market.
State and local governments cut back on issuing new bonds and refinancing older
issues as the cost of borrowing money increased.
HOW WAS THE FUND POSITIONED AT THE END OF THE REPORTING PERIOD?
The fund had 281 holdings. Revenue bonds, which are supported with income from
various projects, made up 57% of the portfolio. The focus was on bonds for
essential-service projects, particularly hospitals, water-treatment facilities
and utilities.
The fund had an average portfolio quality rating of AA/Aa as measured by
Standard & Poor's (S&P) and Moody's, two widely known credit-rating agencies.
S&P and Moody's historical ratings are based on an analysis of the credit
quality of the individual municipal securities in the fund's portfolio.
Approximately 60% of the fund's holdings were securities rated AAA, and 88%
of the portfolio was rated A or better. Credit-enhanced securities--those backed
by insurance or escrowed with U.S. Treasury securities--composed about 58% of
the portfolio.
HOW TAX EFFICIENT WAS THE FUND?
For six years, the fund has paid no taxable capital-gains distributions . We
endeavor to avoid transactions that would result in capital gains that are not
offset by capital losses.
WHAT IS YOUR OUTLOOK?
The near-term outlook for bonds, including municipal issues, will likely depend
largely on the strength of the economy. If the economy continues to grow at a
blistering pace, it could have a negative impact on the bond market. On February
2, after the close of the reporting period, the Fed raised the federal funds
rate to 5.75%. We expect the Fed to raise interest rates again in the months
ahead to slow economic growth and forestall inflation. If economic growth
moderates as 2000 progresses, interest rates could level off, and that could
have a positive impact on the bond market. And while past performance cannot
guarantee comparable future results, the U.S. bond market has seldom had two
dismal years in a row.
Factors that could work in favor of municipal bonds in the next few months
include their attractive valuations and yields in comparison to Treasuries and a
continuing decline in new issue volume. Regardless of market trends, we will
continue to manage the fund for attractive income, exempt from federal income
taxes, while maintaining relative stability of net asset value per share.
See important fund and index disclosures inside front cover.
AIM MUNICIPAL BOND FUND
3
<PAGE> 6
ANNUAL REPORT / PERFORMANCE HISTORY
YOUR FUND'S LONG-TERM PERFORMANCE
RESULTS OF A $10,000 INVESTMENT
AIM MUNICIPAL BOND FUND VS. BENCHMARK INDEX
12/31/89-12/31/99
[HYPO CHART]
In thousands $25
================================================================================
AIM LEHMAN
MUNICIPAL BOND FUND MUNICIPAL BOND
CLASS A SHARES INDEX
- --------------------------------------------------------------------------------
12/89 9,524 10,000
12/90 10,026 10,728.8
12/91 11,360 12,031.5
12/92 12,394 13,092
12/93 13,838 14,700.3
12/94 13,314 13,940.4
12/95 15,051 16,373.8
12/96 15,638 17,098.8
12/97 16,775 18,670.7
12/98 17,660 19,880.4
12/99 17,227 19,472
Source: Lipper, Inc.
Past performance cannot guarantee comparable future results.
================================================================================
MARKET VOLATILITY CAN SIGNIFICANTLY IMPACT SHORT-TERM PERFORMANCE. RESULTS OF AN
INVESTMENT MADE TODAY MAY DIFFER SUBSTANTIALLY FROM THE HISTORICAL PERFORMANCE
SHOWN.
ABOUT THIS CHART
This chart compares the performance of your fund's Class A shares to a benchmark
index over the period 12/31/89- 12/31/99. It is important to understand the
differences between your fund and an index. Your fund's total return is shown
with a sales charge and includes fund expenses and management fees. An index
measures the performance of a hypothetical portfolio. A market index such as the
Lehman Municipal Bond Index is not managed, incurring no sales charges, expenses
or fees. If you could buy all the securities that make up a market index, you
would incur expenses that would affect your investment's return.
AVERAGE ANNUAL TOTAL RETURNS
As of 12/31/99, including sales charges
================================================================================
CLASS A SHARES
10 years 5.59%
5 years 4.26
1 year -7.12*
* -2.45% excluding sales charges
CLASS B SHARES
Inception (9/1/93) 3.06%
5 years 4.13
1 year -7.91*
* -3.28% excluding CDSC
CLASS C SHARES
Inception (8/4/97) 1.42%
1 year -4.09*
* -3.16% excluding CDSC
================================================================================
Your fund's total return includes sales charges, expenses and management fees.
The performance of Class B and Class C shares will differ from that of its Class
A shares due to differing fees and expenses. For fund performance calculations
and descriptions of the indexes cited on this page, please see the inside front
cover.
AIM MUNICIPAL BOND FUND
4
<PAGE> 7
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
ALABAMA-1.43%
Alabama (State of)
Housing Finance
Authority; Single
Family Mortgage Series
D-2 RB
5.50%, 10/01/17(b) -- Aaa $ 985 $ 923,408
- ----------------------------------------------------------------
Alabama (State of) Public
School & College
Authority; Capital
Improvement Series 1999
C RB
5.75%, 07/01/17 AA Aa3 1,400 1,383,284
- ----------------------------------------------------------------
Courtland Industrial
Development Board
(Champion International
Corp. Project);
Refunding Environmental
Improvement Series RB
6.40%, 11/01/26(b) -- Baa1 2,315 2,225,988
- ----------------------------------------------------------------
McIntosh Industrial
Development Board;
Environmental
Improvement Series C
IDR
5.375%, 06/01/28 AA- A2 1,000 870,040
- ----------------------------------------------------------------
5,402,720
- ----------------------------------------------------------------
ALASKA-0.84%
Alaska (State of) Housing
Finance Corp.;
Collateralized First
Veterans' Home Mortgage
Series A-2 RB
6.75%, 12/01/24(b) AAA Aaa 2,860 2,916,313
- ----------------------------------------------------------------
Alaska (State of) Housing
Finance Corp.;
Collateralized First
Veterans' Mortgage
Program Series RB
6.875%, 06/01/33 AAA Aaa 250 256,475
- ----------------------------------------------------------------
3,172,788
- ----------------------------------------------------------------
ARIZONA-1.67%
Arizona (State of)
Educational Loan
Marketing Corp.; RB
6.125%, 09/01/02(b) -- Aa 1,900 1,953,808
- ----------------------------------------------------------------
Mohave (County of)
Unified School District
No. 1 (Lake Havasu);
Series 1996 A GO
5.90%, 07/01/15(c) AAA Aaa 1,000 1,009,290
- ----------------------------------------------------------------
Pima (County of) Unified
School District No. 10
(Amphitheater); School
Improvement Series 1992
E GO
6.50%, 07/01/05 A+ A2 3,100 3,336,158
- ----------------------------------------------------------------
6,299,256
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
ARKANSAS-0.92%
Arkansas (State of)
Development Financing
Authority (State Agency
Facilities Department
Corp. Project); Series
1999 A RB
5.70%, 11/01/19(c) AAA Aaa $1,500 $ 1,454,850
- ----------------------------------------------------------------
Little Rock (City of);
Capital Improvement
Series B GO
5.75%, 02/01/06 AA Aa3 2,000 2,001,660
- ----------------------------------------------------------------
3,456,510
- ----------------------------------------------------------------
CALIFORNIA-1.77%
Abag Financing Authority
for Non-Profit Corps.
(Lytton Gardens Inc.);
Series 1999 COP
6.00%, 02/15/19 AA- -- 2,085 2,066,131
- ----------------------------------------------------------------
Abag Financing Authority
for Non-Profit Corps.
(Odd Fellows Home of
California); Series
1999 COP
6.00%, 08/15/24 AA- -- 1,000 957,830
- ----------------------------------------------------------------
Foothill/Eastern Corridor
Agency (California Toll
Road Project); Senior
Lien Series A RB
6.00%, 01/01/10(d)(e) AAA AAA 400 426,932
- ----------------------------------------------------------------
Sacramento (City of)
California City
Financing Authority
(Senior Convention
Center Hotel); Series
1999 A RB
6.25%, 01/01/30(f) -- -- 750 684,015
- ----------------------------------------------------------------
Sacramento (City of)
California Cogeneration
Authority (Procter &
Gamble Project); Series
1995 RB
7.00%, 07/01/04 BBB -- 500 536,855
- ----------------------------------------------------------------
Sacramento (City of);
Refunding Municipal
Utility District Series
M RB
5.25%, 07/01/28 A A2 1,000 857,110
- ----------------------------------------------------------------
San Francisco (City and
County of) Parking
Authority; Parking
Meter Series 1994 RB
7.00%, 06/01/05(d)(e) AAA Aaa 1,000 1,120,600
- ----------------------------------------------------------------
6,649,473
- ----------------------------------------------------------------
COLORADO-1.11%
Adams County School
District No. 1;
Unlimited Tax Building
Series 1992 A GO
6.625%, 12/01/02(d)(e) AAA Aaa 500 531,320
- ----------------------------------------------------------------
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
COLORADO-(CONTINUED)
Colorado Health
Facilities Authority
(National Jewish
Medical and Research
Project); Hospital
Series RB
5.25%, 01/01/18 BBB -- $ 500 $ 413,925
- ----------------------------------------------------------------
5.375%, 01/01/29 BBB -- 1,000 794,280
- ----------------------------------------------------------------
Highlands Ranch Metro
District No. 1;
Unlimited Tax Refunding
& Improvement Series A
GO
7.30%, 09/01/02(d)(e) NRR NRR 500 545,050
- ----------------------------------------------------------------
Mesa County School
District No. 51; 1989
Series B COP
6.875%, 12/01/05(c) AAA Aaa 1,465 1,538,499
- ----------------------------------------------------------------
Mountain Village Metro
District (San Miguel
County); Unlimited Tax
Refunding Series GO
7.95%, 12/01/02(d)(e) NRR NRR 50 54,710
- ----------------------------------------------------------------
Mountain Village Metro
District (San Miguel
County); Unlimited Tax
Unrefunded Balance
Series GO
7.95%, 12/01/03(f) -- -- 305 318,466
- ----------------------------------------------------------------
4,196,250
- ----------------------------------------------------------------
CONNECTICUT-2.81%
Bridgeport (City of);
Unlimited Tax Refunding
Series A GO
6.00%, 09/01/06(c) AAA Aaa 1,000 1,062,340
- ----------------------------------------------------------------
Connecticut (State of);
General Purpose Public
Improvement Series
1992-A GO
6.50%, 03/15/02(d)(e) NRR NRR 5,500 5,812,455
- ----------------------------------------------------------------
Connecticut (State of)
Housing Finance
Authority; Housing
Mortgage Financing
Program Sub-Series C-2
RB
5.85%, 11/15/28(b) AA Aa2 2,340 2,227,352
- ----------------------------------------------------------------
Connecticut (State of)
Housing Finance
Authority; Subseries
1996 A-3 RB
5.95%, 05/15/17 AA Aa2 800 803,592
- ----------------------------------------------------------------
Waterbury Housing
Authority; Refunding
Mortgage Series A RB
5.45%, 07/01/23(c) AAA Aaa 750 690,435
- ----------------------------------------------------------------
10,596,174
- ----------------------------------------------------------------
DELAWARE-0.07%
Delaware Economic
Development Authority
(Osteopathic Hospital
Association); Series A
RB
6.75%, 01/01/13(d) NRR AAA 250 272,178
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
DISTRICT OF
COLUMBIA-0.47%
District of Columbia
(Gonzaga College High
School); Series 1999 RB
5.375%, 07/01/19(c) AAA Aaa $1,000 $ 914,800
- ----------------------------------------------------------------
District of Columbia;
Unlimited Tax Series
1999 A GO
5.50%, 06/01/29 BBB Baa3 1,000 873,060
- ----------------------------------------------------------------
1,787,860
- ----------------------------------------------------------------
FLORIDA-1.64%
Dade (County of)
(Courthouse Center
Project); RB
5.90%, 04/01/05(d)(e) NRR NRR 500 530,810
- ----------------------------------------------------------------
Escambia (County of)
(Champion International
Corp. Project); PCR
6.90%, 08/01/22(b) BBB Baa1 1,125 1,142,685
- ----------------------------------------------------------------
Highlands (County of)
Health Facilities
Authority (Adventist
Health System Project);
Hospital Series RB
5.25%, 11/15/20 A- Baa1 2,000 1,643,460
- ----------------------------------------------------------------
Miami (City of) Parking
Facilities; Series 1992
A RB
6.70%, 10/01/01(d)(e) NRR NRR 1,120 1,181,018
- ----------------------------------------------------------------
Orange County Health
Facilities Authority
(South Central Nursing
Homes); Mortgage Series
A RB
5.40%, 07/01/19(c) AAA Aaa 1,000 939,230
- ----------------------------------------------------------------
Plantation (City of)
Health Facilities
Authority (Covenant
Retirement Communities
Inc.); RB
7.75%, 12/01/02(d)(e) NRR NRR 250 275,413
- ----------------------------------------------------------------
Seminole (County of)
Water & Sewer Series
1999 RB
5.375%, 10/01/22 AA- Aa3 500 463,785
- ----------------------------------------------------------------
6,176,401
- ----------------------------------------------------------------
GEORGIA-1.77%
Cobb-Marietta (City of)
Coliseum & Exhibition
Hall Authority; Series
1999 RB
5.625%, 10/01/19(c) AAA Aaa 2,000 1,911,480
- ----------------------------------------------------------------
Fulton (County of)
Development Authority;
(Delta Airlines Inc.
Project) Special
Facilities RB
5.45%, 05/01/23(b) BBB- Baa3 3,450 2,930,051
- ----------------------------------------------------------------
Georgia (State of)
Housing and Finance
Authority (Home
Ownership Opportunity
Program); Series C RB
6.50%, 12/01/11 AA+ Aa2 755 781,131
- ----------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
GEORGIA-(CONTINUED)
Savannah (City of)
Economic Development
Authority (Hershey
Foods Corp. Project);
Refunding IDR
6.60%, 06/01/12 A+ -- $1,000 $ 1,047,960
- ----------------------------------------------------------------
6,670,622
- ----------------------------------------------------------------
IDAHO-0.25%
Idaho Health Facilities
Authority (Elks
Rehabilitation Hospital
Project); Hospital
Series RB
5.30%, 07/15/18 BBB -- 1,150 949,785
- ----------------------------------------------------------------
ILLINOIS-8.95%
Berwyn (City of) (Macneal
Memorial Hospital
Association Project);
Hospital Series 1991 RB
7.00%, 06/01/01(d)(e) AAA Aaa 3,250 3,422,640
- ----------------------------------------------------------------
Chicago (City of) Public
Building Committee
(Chicago School
Reform); Refunding
Series 1999 RB
5.25%, 12/01/15(c) AAA Aaa 1,500 1,419,435
- ----------------------------------------------------------------
Chicago (City of); Sales
Tax Series RB
5.25%, 01/01/28(c) AAA Aaa 650 569,205
- ----------------------------------------------------------------
Chicago (City of);
Wastewater
Transmission; RB
5.25%, Second Lien
Series 01/01/17(c) AAA Aaa 1,500 1,385,670
- ----------------------------------------------------------------
5.125%, Second Lien
Series B 01/01/18(c) AAA Aaa 750 665,543
- ----------------------------------------------------------------
Chicago Emergency
Telephone System;
Unlimited Tax Series GO
5.60%, 01/01/10(d) AAA Aaa 400 409,524
- ----------------------------------------------------------------
Chicago Midway Airport;
Series A RB
5.625%, 01/01/22(c) AAA Aaa 1,000 940,600
- ----------------------------------------------------------------
Cook (County of);
Unlimited Tax Series
1992 B GO
5.75%, 11/15/02(d)(e) AAA Aaa 2,000 2,093,240
- ----------------------------------------------------------------
Du Page (County of) High
School District No. 87
(Glenbard TWP);
Unlimited Tax Series B
GO
5.10%, 12/01/20 -- Aa3 2,000 1,739,820
- ----------------------------------------------------------------
Illinois (State of);
Sales Tax Series 1991 B
RB
6.50%, 06/15/01(d)(e) AAA NRR 1,500 1,569,585
- ----------------------------------------------------------------
Illinois (State of)
Development Finance
Authority (CPC
International Project);
Refunding PCR
6.75%, 05/01/16 -- A2 2,500 2,581,675
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
ILLINOIS-(CONTINUED)
Illinois Educational
Facilities Authority
(Midwestern
University); Series B
RB
5.50%, 05/15/18 A -- $1,000 $ 921,750
- ----------------------------------------------------------------
Illinois Educational
Facilities Authority
(Northwestern
University); Adjustable
Medium Term Series RB
5.25%, 11/01/14(e) AA+ Aa1 1,000 954,330
- ----------------------------------------------------------------
Illinois Educational
Facilities Authority
(Shedd Aquarium
Society); RB
5.60%, 07/01/27(c) AAA Aaa 3,500 3,241,805
- ----------------------------------------------------------------
Illinois Health
Facilities Authority
(Blessing Hospital);
Hospital Series 1999 A
6.00%, 11/15/19(b) AAA Aaa 1,000 991,890
- ----------------------------------------------------------------
Illinois Health
Facilities Authority
(Evangelical Hospital
Corp.); RB
6.25%, Refunding Series
1992 A 04/15/22(d) NRR AAA 1,000 1,043,350
- ----------------------------------------------------------------
6.25%, Series 1992 C
04/15/22(d) NRR NRR 1,150 1,191,573
- ----------------------------------------------------------------
Illinois Health
Facilities Authority
(Franciscan Sisters
Health Care); Series
1992 RB
6.40%, 09/01/04(d) AAA Aaa 2,000 2,130,220
- ----------------------------------------------------------------
Illinois Health
Facilities Authority
(Memorial Hospital);
Refunding Hospital
Series 1992 RB
7.25%, 05/01/02(d)(e) NRR NRR 200 214,668
- ----------------------------------------------------------------
Peoria and Pekin and
Waukegan (Cities of);
GNMA Collateralized
Mortgage Series 1990 RB
7.875%, 08/01/22(b) AA -- 80 82,801
- ----------------------------------------------------------------
Tazewell County Community
High School District
No. 303 (Pekin);
Unlimited Tax Series
1996 GO
5.625%, 01/01/14(c) AAA Aaa 1,435 1,423,348
- ----------------------------------------------------------------
University of Illinois
(Auxiliary Facilities
System); Series 1991 RB
5.75%, 04/01/22 AA- Aa3 4,750 4,667,635
- ----------------------------------------------------------------
33,660,307
- ----------------------------------------------------------------
INDIANA-0.67%
Carmel Retirement Rental
Housing (Beverly
Enterprises Project);
Refunding Series RB
8.75%, 12/01/08(f) -- -- 90 96,286
- ----------------------------------------------------------------
Indiana (State of)
Housing Finance
Authority; Series B-1
RB
6.15%, 07/01/17 -- Aaa 155 156,477
- ----------------------------------------------------------------
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
INDIANA-(CONTINUED)
Indianapolis (City of)
(Lake Nora and Fox Club
Project); Series 1999 A
Multi-Family RB
5.90%, 10/01/19(c) -- Aaa $1,795 $ 1,741,904
- ----------------------------------------------------------------
Indiana Transportation
Finance Authority
(Airport Lease
Facility); Series A RB
6.25%, 11/01/02(d)(e) NRR AAA 395 418,226
- ----------------------------------------------------------------
6.25%, 11/01/16 A+ A1 105 107,085
- ----------------------------------------------------------------
2,519,978
- ----------------------------------------------------------------
IOWA-0.28%
Iowa Finance Authority
(Trinity Regional
Hospital Project);
Hospital Facilities
Series 1997 RB
6.00%, 07/01/12(c) AAA Aaa 1,000 1,048,420
- ----------------------------------------------------------------
KANSAS-0.43%
Hutchinson Health Care
Facilities (Wesley
Towers); Refunding &
Improvement Series 1999
A RB
6.25%, 11/15/19(f) -- -- 1,500 1,331,265
- ----------------------------------------------------------------
Newton (City of) (Newton
Healthcare Corp.);
Hospital Series A RB
7.375%, 11/15/04(d)(e) NRR NRR 250 281,103
- ----------------------------------------------------------------
1,612,368
- ----------------------------------------------------------------
KENTUCKY-1.18%
Jefferson (County of)
(Beverly Enterprises
Project); Refunding
Health Facilities
Series RB
5.875%, 05/01/08(f) -- -- 595 565,066
- ----------------------------------------------------------------
Kentucky Economic
Development Finance
Authority (Appalachian
Regional Healthcare);
Refunding & Improvement
Hospital Systems Series
RB
5.875%, 10/01/22 BB+ -- 1,000 791,070
- ----------------------------------------------------------------
Mount Sterling (City of);
Lease Funding Series
1993 A RB
6.15%, 03/01/13 -- Aa 3,000 3,101,190
- ----------------------------------------------------------------
4,457,326
- ----------------------------------------------------------------
LOUISIANA-3.25%
Louisiana Public
Facilities Authority
(Medical Center at New
Orleans Project); RB
6.125%, 10/15/07(c) AAA -- 2,775 2,842,488
- ----------------------------------------------------------------
Louisiana Public
Facilities Authority
(Our Lady of Lake
Regional Hospital);
Hospital Refunding
Series C RB
6.00%, 12/01/01(d)(e) AAA Aaa 2,500 2,612,625
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
LOUISIANA-(CONTINUED)
Louisiana Public
Facilities Authority
(Tulane University of
Louisiana); RB
6.00%, 10/01/16(c) AAA Aaa $2,500 $ 2,531,925
- ----------------------------------------------------------------
New Orleans Levee
District; Trust
Receipts Series 1995 A
RB
5.95%, 11/01/07(c) AAA Aaa 1,000 1,043,700
- ----------------------------------------------------------------
Ouachita Parish Hospital
Service District No. 1
(Glenwood Regional
Medical Center);
Refunding Series 1996
RB
5.70%, 05/15/16(c) AAA Aaa 1,000 982,200
- ----------------------------------------------------------------
St. John Baptist Parish
(Sales Tax
Distribution); Public
Improvement Series 1987
RB
7.60%, 01/01/08(d) NRR NRR 500 575,865
- ----------------------------------------------------------------
7.60%, 01/01/09(d) NRR NRR 500 582,560
- ----------------------------------------------------------------
West Feliciana Parish
(Gulf States
Utilities); Series A
PCR
7.50%, 05/01/15 BB+ -- 1,000 1,061,240
- ----------------------------------------------------------------
12,232,603
- ----------------------------------------------------------------
MAINE-0.60%
Maine (State of)
Education Loan
Authority; Education
Loan Series A-2 RB
6.95%, 12/01/07(b) -- A 770 791,984
- ----------------------------------------------------------------
Maine (State of) Housing
Authority; Series 1999
E-1 RB
5.85%, 11/15/20 AA Aa2 1,500 1,464,585
- ----------------------------------------------------------------
2,256,569
- ----------------------------------------------------------------
MARYLAND-0.28%
Maryland Health and
Higher Education
Facilities Authority
(Doctors Community
Hospital Inc.); Series
1990 RB
8.75%, 07/01/00(d)(e) AAA AAA 1,000 1,042,370
- ----------------------------------------------------------------
MASSACHUSETTS-3.91%
Massachusetts (State of);
Unlimited Tax
Consolidated Loan
Series 1991 C GO
7.00%, 08/01/01(d)(e) NRR NRR 2,450 2,588,695
- ----------------------------------------------------------------
Massachusetts (State of)
Health and Education
Facilities Authority
(Caritas Christi
Obligation Group);
Series A RB
5.625%, 07/01/20 BBB Baa2 1,000 830,720
- ----------------------------------------------------------------
Massachusetts (State of)
Health and Education
Facilities Authority
(Lowell General
Hospital); Series 1991
A RB
8.40%, 06/01/01(d)(e) NRR NRR 3,550 3,807,020
- ----------------------------------------------------------------
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
MASSACHUSETTS-(CONTINUED)
Massachusetts (State of)
Health and Education
Facilities Authority
(Valley Regional Health
System Issue); Series
1990 B RB
8.00%, 07/01/00(d)(e) NRR AAA $3,000 $ 3,116,340
- ----------------------------------------------------------------
Massachusetts (State of)
Health and Education
Facilities Authority
(Winchester Hospital);
Series D RB
5.80%, 07/01/09(c) AAA -- 1,000 1,035,460
- ----------------------------------------------------------------
Massachusetts (State of)
Industrial Finance
Agency (Beverly
Enterprises); Refunding
Series RB
8.00%, 05/01/02(f) -- -- 150 151,005
- ----------------------------------------------------------------
Massachusetts (State of)
Municipal Wholesale
Electric Cooperative
Power Supply; System
Series 1992 A RB
6.75%, 07/01/08(c) AAA Aaa 3,000 3,183,180
- ----------------------------------------------------------------
14,712,420
- ----------------------------------------------------------------
MICHIGAN-4.14%
Detroit (City of) School
District; Unlimited Tax
Series 1992 GO
6.00%, 05/01/01(d)(e) NRR NRR 1,000 1,038,220
- ----------------------------------------------------------------
6.15%, 05/01/01(d)(e) NRR NRR 1,300 1,352,169
- ----------------------------------------------------------------
Flint (City of) Hospital
Building Authority;
Hospital Series B RB
5.375%, 07/01/18(c) A -- 1,000 901,820
- ----------------------------------------------------------------
Garden City Hospital
Finance Authority
(Garden City Hospital);
Hospital Refunding
Series A RB
5.625%, 09/01/10 -- Ba3 1,000 881,290
- ----------------------------------------------------------------
Hudsonville (City of)
Public Schools;
Refunding Unlimited Tax
Series 1997 GO
5.15%, 05/01/27(c) AAA Aaa 1,000 861,320
- ----------------------------------------------------------------
Lake Orion Community
School District;
Unlimited Tax Refunding
Series 1994 GO
7.00%, 05/01/05(d)(e) AAA Aaa 2,500 2,763,675
- ----------------------------------------------------------------
Lakeview Community School
District; Refunding
Unlimited Tax Series
1996 GO
5.75%, 05/01/07(d)(e) AAA NRR 1,000 1,042,951
- ----------------------------------------------------------------
Lincoln Park (City of)
School District;
Unlimited Tax Series
1996 GO
6.00%, 05/01/06(d)(e) AAA Aaa 1,210 1,285,686
- ----------------------------------------------------------------
Michigan (State of)
Housing Development
Authority; Refunding
Rental Housing Series A
RB
6.60%, 04/01/12 AA- -- 945 989,991
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
MICHIGAN-(CONTINUED)
Ypsilanti (City of)
School District;
Refunding Unlimited Tax
Series 1996 GO
5.75%, 05/01/07(d)(e) AAA Aaa $4,275 $ 4,458,611
- ----------------------------------------------------------------
15,575,733
- ----------------------------------------------------------------
MINNESOTA-0.32%
Minneapolis (City of)
Special School District
No. 001; Unlimited Tax
Series 1997 GO
5.00%, 02/01/14 AA+ Aa1 1,300 1,213,875
- ----------------------------------------------------------------
MISSISSIPPI-3.45%
Mississippi (State of)
Development Board
(Capital Projects and
Equipment Acquisition);
Special Obligation
Series A2 RB
5.00%, 07/01/24(c) AAA Aaa 4,570 3,904,151
- ----------------------------------------------------------------
Mississippi (State of)
Development Board
(Panola County
Hospital); Special
Obligation Series RB
5.00%, 07/01/28 A -- 5,000 3,920,100
- ----------------------------------------------------------------
Mississippi Higher
Education Assistance
Corp.; Student Loan
Sub-Series C RB
7.50%, 09/01/09(b) -- A 5,000 5,175,200
- ----------------------------------------------------------------
12,999,451
- ----------------------------------------------------------------
MISSOURI-2.03%
Kansas City Industrial
Development Authority
(General Motors Corp.
Project); PCR
6.05%, 04/01/06 A A3 1,435 1,450,168
- ----------------------------------------------------------------
Kansas City Municipal
Assistance Corp.
(Truman Medical Center
Charitable Foundation);
Leasehold Improvement
Series 1991 A RB
7.00%, 11/01/01(d)(e) NRR NRR 605 630,912
- ----------------------------------------------------------------
Missouri Development
Finance Board (Procter
& Gamble Paper
Products); Solid Waste
Disposal Series RB
5.20%, 03/15/29(b) AA -- 1,000 868,150
- ----------------------------------------------------------------
Missouri (State of)
Environmental
Improvement and Energy
Resources Authority;
Series 1995 C PCR
5.85%, 01/01/10 -- Aa1 1,000 1,035,530
- ----------------------------------------------------------------
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
MISSOURI-(CONTINUED)
Missouri (State of)
Health and Educational
Facilities Authority
(Fontbonne College);
Educational Facilities
Series RB
5.125%, 10/01/17(c) A -- $2,555 $ 2,271,804
- ----------------------------------------------------------------
5.20%, 10/01/20(c) A -- 1,575 1,395,765
- ----------------------------------------------------------------
7,652,329
- ----------------------------------------------------------------
NEVADA-1.54%
Boulder (City of)
(Boulder City Hospital
Inc. Project); Hospital
Refunding Series RB
5.85%, 01/01/22(f) -- -- 500 419,045
- ----------------------------------------------------------------
Humboldt (County of)
(Sierra Pacific
Project); Refunding
Series 1987 PCR
6.55%, 10/01/13(c) AAA Aaa 3,000 3,146,550
- ----------------------------------------------------------------
Las Vegas (City of);
Refunding 1992 Limited
Tax GO
6.50%, 04/01/02(d)(e) AAA Aaa 1,000 1,057,520
- ----------------------------------------------------------------
Reno Redevelopment
Agency; Refunding
Sub-Series A Tax
Allocation Notes
6.00%, 06/01/10 -- Baa3 1,185 1,187,832
- ----------------------------------------------------------------
5,810,947
- ----------------------------------------------------------------
NEW HAMPSHIRE-1.43%
Hudson (City of);
Unlimited Tax Series GO
5.25%, 03/15/28 -- Aa3 1,610 1,432,642
- ----------------------------------------------------------------
New Hampshire State
Turnpike System; Series
1990 RB
7.40%, 04/01/00(d)(e) AAA AAA 3,850 3,957,030
- ----------------------------------------------------------------
5,389,672
- ----------------------------------------------------------------
NEW JERSEY-2.52%
Hudson (County of)
Correctional Facility;
Series 1992 Refunding
COP
6.60%, 12/01/21(c) AAA Aaa 1,250 1,291,538
- ----------------------------------------------------------------
New Jersey Economic
Development Authority
(Atlantic City Sewer
Co.); Sewer Facility
Series 1991 RB
7.25%, 12/01/11(b)(f) -- -- 1,630 1,694,222
- ----------------------------------------------------------------
New Jersey Economic
Development Authority
(Continental Airlines
Inc. Project);
Specialty Facilities
Series 1999 RB
6.40%, 09/15/23(b) BB Ba2 6,250 5,887,063
- ----------------------------------------------------------------
New Jersey City Economic
Development Authority
(Franciscan Oaks
Project); First
Mortgage Series RB
5.70%, 10/01/17(f) -- -- 500 422,795
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
NEW JERSEY-(CONTINUED)
New Jersey Health Care
Facility Financing
Authority; Unrefunded
Balance Series 1987 C
RB
8.60%, 07/01/17(c) AAA Aaa $ 190 $ 195,348
- ----------------------------------------------------------------
9,490,966
- ----------------------------------------------------------------
NEW MEXICO-1.79%
Albuquerque (City of)
(Albuquerque Academy
Project); Educational
Facilities Series 1995
RB
5.75%, 10/15/03(d)(e) NRR NRR 915 945,588
- ----------------------------------------------------------------
Espanola Gross Receipt
Tax; Refunding and
Improvement Series 1999
RB
5.80%, 03/01/23(c) AAA Aaa 1,000 960,570
- ----------------------------------------------------------------
Las Cruces South Central
Solid Waste Authority;
Environmental Services
RB
5.65%, 06/01/09 -- A3 575 571,653
- ----------------------------------------------------------------
Los Alamos (County of);
Utility Series A RB
6.00%, 07/01/15(c) AAA Aaa 2,000 2,025,660
- ----------------------------------------------------------------
Santa Fe (City of);
Series 1994 RB
6.25%, 06/01/04(d)(e) AAA Aaa 2,100 2,220,372
- ----------------------------------------------------------------
6,723,843
- ----------------------------------------------------------------
NEW YORK-9.37%
New York (City of); GO
8.25%, Unlimited Tax
Series 1991 F
11/15/01(d)(e) NRR AAA 2,000 2,161,020
- ----------------------------------------------------------------
7.65%, Unlimited Tax
Series 1992 F
02/01/02(d)(e) NRR AAA 4,775 5,122,715
- ----------------------------------------------------------------
7.00%, Unlimited Tax
Series H
02/01/02(d)(e) NRR NRR 350 370,685
- ----------------------------------------------------------------
7.20%, Unlimited Tax
Series H
02/01/02(d)(e) NRR NRR 390 414,570
- ----------------------------------------------------------------
02/01/15 A- A3 110 115,724
- ----------------------------------------------------------------
7.70%, Unlimited Tax
Series D
02/01/02(d)(e) NRR AAA 1,970 2,115,386
- ----------------------------------------------------------------
02/01/09 A- A3 30 32,091
- ----------------------------------------------------------------
7.00%, Unlimited Tax
Series C, Sub-Series
C-1 08/01/02(d)(e) NRR AAA 1,990 2,130,076
- ----------------------------------------------------------------
7.379, Unlimited Tax
Series B1
08/15/04(d)(e) NRR AAA 500 556,895
- ----------------------------------------------------------------
6.25%, Unlimited Tax
Series A 08/01/17 A- A3 3,035 3,083,074
- ----------------------------------------------------------------
7.00%, Unlimited Tax
Series C, Sub-Series
C-1 08/01/17 A- A3 10 10,544
- ----------------------------------------------------------------
7.00%, Unlimited Tax
Series B 02/01/18(c) AAA -- 830 869,807
- ----------------------------------------------------------------
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
NEW YORK-(CONTINUED)
New York (City of); GO-(Continued)
7.00%, Unlimited Tax
Series B
02/01/02(d)(e) AAA -- $ 170 $ 180,220
- ----------------------------------------------------------------
New York City Industrial
Development Agency
(Brooklyn Navy Yard
Cogen Partners); RB
5.65%, 10/01/28(b) BBB- Baa3 500 431,675
- ----------------------------------------------------------------
New York City Industrial
Development Agency (The
Lighthouse Inc.
Project); Series 1992
RB LOC-Chase Manhattan
Bank
6.50%, 07/01/02(d)(e) NRR NRR 1,500 1,588,710
- ----------------------------------------------------------------
New York City Municipal
Water Finance
Authority; Water &
Sewer Systems Series A
RB
5.00%, 06/15/17 A A1 1,350 1,191,847
- ----------------------------------------------------------------
New York State Dorm
Authority (City
University System);
Series C RB
6.00%, 07/01/00(d)(e) NRR NRR 135 136,195
- ----------------------------------------------------------------
6.00%, 07/01/16 A- Baa1 365 365,044
- ----------------------------------------------------------------
New York State Dorm
Authority (State
University Educational
Facilities); Series A
RB
6.50%, 05/15/06 A A3 1,000 1,072,360
- ----------------------------------------------------------------
New York State
Environmental Facility
Corp.; Water Revenue
Series E PCR
6.875%, 06/15/01(d)(e) AAA NRR 2,300 2,419,623
- ----------------------------------------------------------------
6.875%, 06/15/10 AA+ Aaa 1,100 1,154,197
- ----------------------------------------------------------------
New York State Urban
Development Corp.;
Correctional Capital
Facilities Series 1991
3 RB
7.375%, 01/01/02(d)(e) NRR AAA 7,850 8,399,814
- ----------------------------------------------------------------
Triborough Bridge and
Tunnel Authority;
General Purpose Series
1996 B RB
5.20%, 01/01/22 A+ Aa3 1,570 1,381,192
- ----------------------------------------------------------------
35,303,464
- ----------------------------------------------------------------
NORTH CAROLINA-1.49%
North Carolina Eastern
Municipal Power Agency;
Series A RB
6.125%, 01/01/10(c) AAA Aaa 1,500 1,552,290
- ----------------------------------------------------------------
North Carolina Housing
Finance Agency; Single
Family- Series II RB
6.20%, 03/01/16 AA Aa2 595 601,765
- ----------------------------------------------------------------
North Carolina Medical
Care Community Hospital
(Annie Penn Memorial
Hospital); Refunding
Series RB
5.375%, 01/01/22 -- Baa3 250 205,955
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
NORTH CAROLINA-(CONTINUED)
North Carolina Municipal
Power Agency (No. 1
Catawba Electric
Project); Refunding RB
7.25%, 01/01/07 BBB+ Baa1 $2,750 $ 2,955,205
- ----------------------------------------------------------------
North Carolina Municipal
Power Agency (No. 1
Catawba Electric
Project); Series 1990
RB
6.50%, 01/01/10(d) AAA AAA 260 280,192
- ----------------------------------------------------------------
5,595,407
- ----------------------------------------------------------------
NORTH DAKOTA-0.24%
North Dakota Housing
Finance Agency; Home
Mortgage Series B RB
5.85%, 07/01/28(b) -- Aa3 945 898,591
- ----------------------------------------------------------------
OHIO-2.09%
Cleveland (City of)
Parking Facilities;
Improvement Series RB
8.00%, 09/15/02(d)(e) NRR NRR 500 549,805
- ----------------------------------------------------------------
Fairfield (City of)
School District;
Unlimited Tax Series
1995 GO
6.10%, 12/01/15(c) AAA Aaa 1,000 1,035,960
- ----------------------------------------------------------------
Findlay (City of);
Limited Tax Series 1996
GO
5.875%, 07/01/17 AA- Aa3 1,000 1,001,640
- ----------------------------------------------------------------
Mason (City of) Health
Care Facilities (MCV
Health Care Facilities,
Inc.); Series 1990 RB
7.625%, 02/01/01(d)(e) AAA NRR 2,105 2,206,566
- ----------------------------------------------------------------
Montgomery (County of)
(Grandview Hospital &
Medical Center);
Refunding Hospital
Series RB
5.50%, 12/01/09(d)(e) NRR NRR 1,000 1,017,520
- ----------------------------------------------------------------
Ohio Department of
Transportation
(Panhandle Rail Line
Project); Series 1992
COP
6.50%, 04/15/12(c) AAA Aaa 1,100 1,153,449
- ----------------------------------------------------------------
Ohio Building Authority
(Adult Correctional
Facility); Series 1999
A RB
5.25%, 10/01/18 AA- Aa2 1,000 914,090
- ----------------------------------------------------------------
7,879,030
- ----------------------------------------------------------------
OKLAHOMA-2.55%
McAlester (City of)
Public Works Authority;
Refunding and
Improvement Series 1995
RB
5.50%, 12/01/09(d)(e) AAA Aaa 975 998,244
- ----------------------------------------------------------------
Mustang Improvement
Utility Authority;
Series 1999 RB
5.70%, 10/01/19(c) -- Aaa 1,500 1,423,290
- ----------------------------------------------------------------
</TABLE>
11
<PAGE> 14
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
OKLAHOMA-(CONTINUED)
Oklahoma Development
Finance Authority (St.
John Health System);
Refunding Series 1999
RB
5.75%, 02/15/18 AA Aa3 $ 675 $ 647,122
- ----------------------------------------------------------------
5.75%, 02/15/25 AA Aa3 1,750 1,643,932
- ----------------------------------------------------------------
Sapula (City of)
Municipal Authority;
Capital Improvement
Series RB
5.00%, 07/01/21(c) AAA Aaa 1,000 867,090
- ----------------------------------------------------------------
Tulsa (City of)
Industrial Authority
(St. Johns Medical
Center Project); RB
6.25%, 02/15/06(d)(e) AA Aa3 2,000 2,133,380
- ----------------------------------------------------------------
Tulsa (City of)
Industrial Authority
(Tulsa Regional Medical
Center); Hospital
Series RB
7.20%, 06/01/03(d)(e) AAA NRR 500 547,090
- ----------------------------------------------------------------
Tulsa Public Facilities
Authority-Capital
Improvements-Water
System; Series 1988 B
RB
6.00%, 03/01/08 A+ -- 1,305 1,350,388
- ----------------------------------------------------------------
9,610,536
- ----------------------------------------------------------------
OREGON-1.15%
Cow Creek Band Umpqua
Tribe of Indians;
Series B RB
5.10%, 07/01/12(c) AAA Aaa 1,000 961,580
- ----------------------------------------------------------------
Marion (County of) (Ogden
Martin Systems);
Refunding Solid Waste &
Electric Series RB
5.50%, 10/01/06(c) AAA Aaa 1,000 1,031,110
- ----------------------------------------------------------------
Portland (City of) Sewer
System; Series 1994 A
RB
6.20%, 06/01/04(d)(e) NRR NRR 1,200 1,273,704
- ----------------------------------------------------------------
6.25%, 06/01/04(d)(e) NRR NRR 1,000 1,063,390
- ----------------------------------------------------------------
4,329,784
- ----------------------------------------------------------------
PENNSYLVANIA-2.39%
Chester (County of)
Health and Educational
Facilities Authority
(Jefferson Health
Systems); Series B RB
5.375%, 05/15/27 AA- A1 4,000 3,325,960
- ----------------------------------------------------------------
Chester Upland School
Authority; Refunding
School Series B RB
5.25%, 09/01/21(c) AAA Aaa 1,000 892,340
- ----------------------------------------------------------------
Montgomery County
Industrial Development
Authority (Meadowood
Corp. Project);
Refunding First
Mortgage Series A RB
10.25%, 12/01/00(d)(e) NRR NRR 100 107,239
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
PENNSYLVANIA-(CONTINUED)
Montgomery County
Industrial Development
Authority (Pennsburg
Nursing &
Rehabilitation Center);
Refunding Series 1993
RB
7.625%, 03/31/04(d)(e) NRR AAA $ 100 $ 112,607
- ----------------------------------------------------------------
Pennsylvania (State of);
Unlimited Tax Third
Series GO
6.75%, 11/15/13(c) AAA Aaa 1,250 1,352,387
- ----------------------------------------------------------------
Pennsylvania Economic
Development Finance
Authority (Colver
Project); Resource
Recovery Series 1994 D
RB
7.05%, 12/01/10(b) BBB- -- 2,900 2,958,348
- ----------------------------------------------------------------
Scranton-Lackawanna
Health & Welfare
Authority (Moses Taylor
Hospital Project);
Series B RB
8.50%, 07/01/01(d)(e) AAA NRR 250 269,037
- ----------------------------------------------------------------
9,017,918
- ----------------------------------------------------------------
PUERTO RICO-0.37%
Puerto Rico (Commonwealth
of) Electric Power
Authority; Series 1991
P RB
7.00%, 07/01/01(d)(e) AAA AAA 1,325 1,401,519
- ----------------------------------------------------------------
RHODE ISLAND-0.63%
Rhode Island Depositors
Economic Protection
Corp.; Special
Obligation Series 1992
A RB
6.95%, 08/01/02(d)(e) AAA AAA 1,250 1,340,462
- ----------------------------------------------------------------
Rhode Island Housing and
Mortgage Finance Corp.;
Homeownership
Opportunity Series 15 B
RB
6.00%, 10/01/04 AA+ Aa2 1,000 1,033,970
- ----------------------------------------------------------------
2,374,432
- ----------------------------------------------------------------
SOUTH CAROLINA-0.40%
Piedmont Municipal Power
Agency; Refunding
Electric Series A RB
5.75%, 01/01/24 BBB- Baa3 1,150 1,011,804
- ----------------------------------------------------------------
South Carolina State
Housing Finance and
Development Authority;
Homeownership Mortgage
Series 1990 C RB
7.50%, 07/01/05(b) AA Aa2 500 513,290
- ----------------------------------------------------------------
1,525,094
- ----------------------------------------------------------------
SOUTH DAKOTA-0.53%
South Dakota Health and
Educational Facility
Authority (Huron
Regional Medical
Center); Series 1994 RB
7.25%, 04/01/20 BBB -- 100 102,395
- ----------------------------------------------------------------
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
SOUTH DAKOTA-(CONTINUED)
South Dakota Housing
Development Authority;
Homeownership Mortgage
Series F RB
5.80%, 05/01/28(b) AAA Aa1 $1,995 $ 1,878,811
- ----------------------------------------------------------------
1,981,206
- ----------------------------------------------------------------
TENNESSEE-1.42%
Franklin Industrial
Development Board
(Landings Apartment
Project); Multifamily
Housing Series A RB
5.75%, 04/01/10(c) AAA Aaa 1,035 1,039,906
- ----------------------------------------------------------------
Montgomery (County of)
Health, Educational and
Housing Facilities
Board (Clarksville
Project); Refunding and
Improvement Hospital
Series RB
5.375%, 01/01/28(c) A -- 1,800 1,552,806
- ----------------------------------------------------------------
Shelby (County of);
Unlimited Tax School
Series B GO
6.00%, 03/01/02(d)(e) NRR NRR 1,000 1,035,950
- ----------------------------------------------------------------
Shelby County Health,
Educational & Housing
Facilities Board (Kirby
Pines); Health Care
Facilities Series A RB
6.25%, 11/15/16(f) -- -- 1,000 898,960
- ----------------------------------------------------------------
Tennessee Housing
Development Agency;
Homeownership
Progressive Series Q RB
6.80%, 07/01/17 AA Aa2 790 811,733
- ----------------------------------------------------------------
5,339,355
- ----------------------------------------------------------------
TEXAS-17.31%
Arlington Independent
School District;
Pre-Refunding Unlimited
Tax Series GO
5.75%, 02/15/05(d)(e) NRR NRR 705 732,086
- ----------------------------------------------------------------
Arlington Independent
School District;
Unlimited Tax Series GO
5.75%, 02/15/21(d) -- Aaa 295 286,560
- ----------------------------------------------------------------
Austin (City of); Utility
System Combined Fee
Refunding Series 1991
RB
6.50%, 05/15/01(d)(e) AAA AAA 1,380 1,443,425
- ----------------------------------------------------------------
Austin Community College
District; Combined Fee
Revenue Building and
Refunding Series 1995
RB
6.10%, 02/01/05(d)(e) AAA Aaa 1,115 1,174,909
- ----------------------------------------------------------------
Austin Hotel Occupancy
Tax (Convention
Center); Series 1999 A
RB
5.50%, 11/15/29(c) AAA Aaa 1,425 1,298,944
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
TEXAS-(CONTINUED)
Austin Hotel Occupancy
Tax; Refunding Sub Lien
1999 Series RB
5.80%, 11/15/29(c) AAA Aaa $1,000 $ 951,020
- ----------------------------------------------------------------
Bellville Independent
School District;
Unlimited Tax School
Building and Refunding
Series 1995 A GO
6.125%, 02/01/20(c) -- Aaa 830 839,794
- ----------------------------------------------------------------
Brazos (County of) Health
Facilities Development
Corp. (Franciscan
Services Corp.); Series
A RB
5.375%, 01/01/22(c) AAA Aaa 2,000 1,810,020
- ----------------------------------------------------------------
Brazos Higher Education
Loan Authority Inc.;
Refunding Series 1992
C-1 RB
6.30%, Series 1992 C-1
11/01/01(b) -- Aa 325 333,554
- ----------------------------------------------------------------
6.45%, Series 1992 C-1
11/01/02(b) -- Aa 1,135 1,173,193
- ----------------------------------------------------------------
Carrollton (City of);
Limited Tax Series 1996
GO
5.75%, 08/15/06(d)(e) NRR NRR 1,000 1,040,580
- ----------------------------------------------------------------
Comal County Industrial
Development Authority
(The Coleman Co., Inc.
Project); Industrial
Development Series 1980
RB
9.25%, 08/01/00(d) NRR NRR 280 287,963
- ----------------------------------------------------------------
Dallas (City of);
Waterworks and Sewer
System Refunding and
Improvement Series RB
5.35%, 04/01/14 AA Aa2 3,055 2,968,788
- ----------------------------------------------------------------
Dallas (City of);
Waterworks and Sewer
System Series A RB
6.00%, 10/01/01(d)(e) NRR NRR 2,030 2,109,434
- ----------------------------------------------------------------
Dallas-Fort Worth
Regional Airport
Authority; Airport
Series 1985 RB
6.10%, 05/01/00(e) A+ A1 160 161,046
- ----------------------------------------------------------------
6.10%, 05/01/00(c)(e) AAA Aaa 365 367,445
- ----------------------------------------------------------------
De Soto (City of)
Independent School
District; Refunding
Unlimited Tax Series GO
5.125%, 08/15/17(c) AAA -- 2,155 1,907,541
- ----------------------------------------------------------------
Denton (County of);
Limited Tax Series 1999
A GO
5.875%, 05/01/19 AA Aa2 1,025 1,005,761
- ----------------------------------------------------------------
Denton (County of);
Refunding Limited Tax
Permanent Improvement
Series GO
5.125%, 07/15/26 AA Aa2 1,000 858,600
- ----------------------------------------------------------------
Georgetown (City of);
Utility System Series
1995 A RB
6.20%, 08/15/05(d)(e) AAA Aaa 1,500 1,591,545
- ----------------------------------------------------------------
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
TEXAS-(CONTINUED)
Harris County; Toll Road
Unlimited Tax GO and
Sub. Lien Refunding
Series 1991
6.75%, 08/01/14 AA Aa1 $3,850 $ 4,053,511
- ----------------------------------------------------------------
Harris County Health
Facilities Development
Corp. (Saint Luke's
Episcopal Hospital
Project); Series 1991
6.70%, 02/15/03(d) AAA NRR 1,000 1,056,600
- ----------------------------------------------------------------
Harris County Health
Facilities Development
Corp. (Texas Childrens
Hospital Project);
Hospital Series 1999 RB
5.25%, 10/01/29 AA Aa2 2,000 1,690,960
- ----------------------------------------------------------------
Harris County Mental
Health and Mental
Retardation Authority;
Refunding Series 1992
RB
6.25%, 09/15/10(c) AAA Aaa 4,500 4,618,080
- ----------------------------------------------------------------
Houston (City of);
Refunding Series 1992 C
GO
6.25%, 03/01/02(d)(e) NRR NRR 1,470 1,518,510
- ----------------------------------------------------------------
Hurst, Euless, Bedford,
Texas Independent
School District;
6.50%, Refunding
Unlimited Tax Series
1994 GO 08/15/04(d)(e) AAA AAA 640 684,762
- ----------------------------------------------------------------
6.50%, Unrefunded
Unlimited Tax Series
1994 GO 08/15/24(c) AAA Aaa 360 371,214
- ----------------------------------------------------------------
Katy (City of)
Independent School
District; Limited Tax
Series 1999 GO
6.125%, 02/15/32 AAA Aaa 1,500 1,487,175
- ----------------------------------------------------------------
Keller (City of) Independent
School District; Series 1994
COP
6.00%, 08/15/05(c) AAA Aaa 1,000 1,055,840
- ----------------------------------------------------------------
Lockhart (City of) Tax
and Utility Systems;
Unlimited Tax Series
1996 GO
5.85%, 08/01/11(c) AAA Aaa 605 623,235
- ----------------------------------------------------------------
5.90%, Refunding
08/01/06(d)(e) AAA Aaa 1,100 1,156,716
- ----------------------------------------------------------------
Matagorda (County of)
District No. 1 (Reliant
Energy Project);
Refunding 1999 RB
5.95%, 05/01/30(b) BBB+ Baa1 2,250 1,975,860
- ----------------------------------------------------------------
North Central Texas
Health Facilities
Development Corp. (CC
Young Memorial
Project); Hospital
Series RB
5.375%, 02/15/25(c) A -- 1,000 884,030
- ----------------------------------------------------------------
Northside Independent
School District;
Unlimited Tax Series
1999 A GO
5.50%, 08/15/24 AAA Aaa 1,000 927,580
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
TEXAS-(CONTINUED)
North Texas Higher
Education Authority
Inc.; Student Loan RB
6.10%, Series 1993 C
04/01/08(b) -- Aa $1,000 $ 1,009,240
- ----------------------------------------------------------------
6.30%, Series 1993 D
04/01/09(b) -- A 500 499,245
- ----------------------------------------------------------------
Plano (City of)
Independent School
District; Unlimited Tax
Series 1991 B GO
5.625%, 02/15/01(d)(e) AAA Aaa 2,500 2,532,175
- ----------------------------------------------------------------
Richardson (City of)
Hospital Authority
(Baylor/Richardson
Project); Refunding and
Improvement Hospital
Series RB
5.625%, 12/01/28 BBB+ Baa2 1,250 1,010,575
- ----------------------------------------------------------------
South San Antonio (City
of ) Independent School
District; Refunding
Unlimited Tax Series
1999 GO
5.80%, 08/15/29 AAA Aaa 2,935 2,814,782
- ----------------------------------------------------------------
Southwest Higher
Education Authority
Inc. (Southern
Methodist University);
Higher Education Series
D RB
5.00%, 10/01/22 A+ A1 1,750 1,473,132
- ----------------------------------------------------------------
Tarrant County Texas
Water Control and
Improvement District
No. 1; Refunding Series
1993 RB
5.20%, 03/01/10(c) AAA Aaa 2,000 1,978,120
- ----------------------------------------------------------------
Texas (State of) Public
Property Finance Corp.
(Mental Health and
Mental Retardation);
Series 1996 RB
6.20%, 09/01/16 BBB+ -- 1,590 1,575,197
- ----------------------------------------------------------------
Texas (State of);
Unlimited Tax Veteran's
Land Unlimited Tax
Series 1994 GO
6.40%, 12/01/24(b) AA Aa1 2,000 2,021,600
- ----------------------------------------------------------------
Texas (State of)
Department of Housing
and Community Affairs
(Asmara Project);
Multifamily Housing
Series 1996 A RB
6.30%, 01/01/16 A -- 310 318,119
- ----------------------------------------------------------------
Texas National Research
Laboratory Community
Financing Corp.
(Superconducting Super
Collider); Refunded
Series 1991 RB
7.10%, 12/01/01(d)(e) AAA AAA 600 639,516
- ----------------------------------------------------------------
Tyler Health Facilities
Development Corp. (East
Texas Medical Center);
Hospital Series D RB
5.375%, 11/01/27(c) AAA Aaa 1,000 878,040
- ----------------------------------------------------------------
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
TEXAS-(CONTINUED)
Tyler Health Facilities
Development Corp.
(Mother Frances
Hospital); Hospital
Series A RB
5.625%, 07/01/13 -- Baa2 $1,000 $ 898,120
- ----------------------------------------------------------------
University of Texas;
Series 1999 B RB
5.70%, 08/15/20 AAA Aa1 1,000 959,010
- ----------------------------------------------------------------
Victoria (County of)
(Texas Hospital
Citizens Medical
Center); RB
6.20%, 01/01/10(c) AAA Aaa 1,000 1,040,980
- ----------------------------------------------------------------
Weatherford (City of)
Independent School
District; Unlimited Tax
Series 1994 GO
6.40%, 02/15/05(d)(e) NRR NRR 900 960,750
- ----------------------------------------------------------------
6.40%, 02/15/12(c) -- Aaa 100 105,456
- ----------------------------------------------------------------
65,160,338
- ----------------------------------------------------------------
UTAH-1.90%
Central Utah Water
Conservancy District;
Limited Tax Series D GO
5.00%, 04/01/27(c) AAA Aaa 1,660 1,407,132
- ----------------------------------------------------------------
Intermountain Power
Agency (Utah Power
Supply); Series 1986 B
RB
5.00%, 07/01/16 A+ A1 1,550 1,372,789
- ----------------------------------------------------------------
Salt Lake (County of)
(Westminster College
Project); RB
5.75%, 10/01/27 BBB -- 1,000 890,040
- ----------------------------------------------------------------
Utah (State of)
Associated Municipal
Power System (San Juan
Project); Refunding
Series RB
5.00%, 06/01/22(c) AAA Aaa 775 660,649
- ----------------------------------------------------------------
Utah (State of) Housing
Finance Agency;
Federally Insured Term
Sub. Single Family
Mortgage RB
6.30%, Sub-Series 1994
E-1, 07/01/06 AA- Aa3 300 308,667
- ----------------------------------------------------------------
7.15%, Sub-Series 1994
G-1, 07/01/06 AA- Aa3 155 162,347
- ----------------------------------------------------------------
Utah (State of) Housing
Finance Agency; Single
Family Mortgage RB
6.05%, Series 1994 C
07/01/06 AA- Aa3 415 423,910
- ----------------------------------------------------------------
6.45%, Series G2
07/01/27(b) AAA Aaa 810 819,048
- ----------------------------------------------------------------
Utah (State of) Water
Finance Agency; Series
A RB
5.30%, 10/01/23(c) AAA Aaa 1,250 1,128,200
- ----------------------------------------------------------------
7,172,782
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
VIRGIN ISLAND-0.89%
Virgin Islands Public
Finance Authority;
Matching Fund Loan
Notes Series A RB
7.25%, 10/01/02(d)(e) AAA NRR $1,000 $ 1,088,940
- ----------------------------------------------------------------
Virgin Islands Territory
(Hugo Insurance Claims
Fund); Special Tax Bond
Series 1991
7.75%, 10/01/01(d)(e) NRR NRR 2,155 2,271,392
- ----------------------------------------------------------------
3,360,332
- ----------------------------------------------------------------
VIRGINIA-0.63%
Covington-Alleghany
(County of) Industrial
Development Authority
(Beverly Enterprises);
Refunding Series RB
9.375%, 09/01/01(f) -- -- 30 30,613
- ----------------------------------------------------------------
Richmond (City of);
Public Improvement
Refunding Unlimited Tax
Series B GO
6.25%, 01/15/18 AA A1 2,000 2,079,120
- ----------------------------------------------------------------
Virginia (State of)
Housing Development
Authority; Commonwealth
Mortgage Series A RB
7.10%, 01/01/17 AA+ Aa1 250 256,160
- ----------------------------------------------------------------
2,365,893
- ----------------------------------------------------------------
WASHINGTON-1.88%
Clark (County of) Camas
School District No. 17;
GO
6.00%, 12/01/05(d)(e) AAA Aaa 1,000 1,051,060
- ----------------------------------------------------------------
King (County of);
Unlimited Tax GO
5.50%, 07/01/07(d) AAA AAA 500 514,195
- ----------------------------------------------------------------
King (County of);
Unlimited Tax Refunding
GO
6.50%, 12/01/11 AA+ Aaa 500 500,600
- ----------------------------------------------------------------
Pend Oreille (County of)
Public Utility District
No. 1; Electric Series
B RB
6.30%, 01/01/17 A- A3 1,400 1,406,076
- ----------------------------------------------------------------
Washington State Public
Power Supply System
(Nuclear Project No.
1); Refunding Series A
RB
6.00%, 07/01/07(c) AAA Aaa 1,000 1,045,310
- ----------------------------------------------------------------
5.75%, 07/01/12(c) AAA Aaa 2,000 2,011,980
- ----------------------------------------------------------------
West Richland (City of);
Water & Sewer Refunding
Series RB
7.00%, 12/01/04(d)(e) AAA Aaa 500 547,770
- ----------------------------------------------------------------
7,076,991
- ----------------------------------------------------------------
WISCONSIN-1.28%
Wisconsin Health and
Educational Facility
Authority (United
Health Group, Inc.); RB
5.25%, 12/15/27(c) AAA Aaa 1,000 867,440
- ----------------------------------------------------------------
</TABLE>
15
<PAGE> 18
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
WISCONSIN-(CONTINUED)
Wisconsin Health and
Educational Facilities
Authority (Sinai
Samaritan Medical
Center); Series 1996 F
RB
5.75%, 08/15/16(c) AAA Aaa $1,500 $ 1,473,165
- ----------------------------------------------------------------
Wisconsin Health and
Educational Facility
Authority (Sisters of
Sorrowful Mother);
Series 1997 A RB
5.90%, 08/15/24(c) AAA Aaa 2,500 2,384,550
- ----------------------------------------------------------------
Wisconsin Housing and
Economic Development
Authority; Home
Ownership Series 1994 E
RB
7.35%, 01/01/17 AA Aa2 90 93,890
- ----------------------------------------------------------------
4,819,045
- ----------------------------------------------------------------
WYOMING-0.88%
Campbell (County of)
School District No. 1
(Gillette); Unlimited
Tax Series GO
5.35%, 06/01/04 AAA Aaa 1,000 1,025,950
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATINGS(a) PAR
S&P MOODY'S (000) MARKET VALUE
<S> <C> <C> <C> <C>
WYOMING-(CONTINUED)
Laramie (County of)
(Memorial Hospital
Project); Hospital
Series RB
6.70%, 05/01/12(c) AAA Aaa $ 250 $ 264,432
- ----------------------------------------------------------------
Natrona (County of)
Wyoming Medical Center;
RB
6.00%, 09/15/11(c) AAA Aaa 1,000 1,037,260
- ----------------------------------------------------------------
Sweetwater (County of)
(Idaho Power Company
Project); Refunding
Series 1996 A PCR
6.05%, 07/15/26 A A3 1,000 988,260
- ----------------------------------------------------------------
3,315,902
- ----------------------------------------------------------------
TOTAL INVESTMENTS-98.92%
(Cost $372,253,281) 372,556,813
- ----------------------------------------------------------------
OTHER ASSETS LESS
LIABILITIES-1.08% 4,070,816
- ----------------------------------------------------------------
NET ASSETS-100.00% $376,627,629
================================================================
</TABLE>
Notes to Schedule of Investments:
(a) Ratings assigned by Moody's Investors Service, Inc. ("Moody's") and Standard
& Poor's Ratings Service ("S&P"). NRR indicates a security that is not
re-rated subsequent to funding of an escrow fund (consisting of U.S.
Treasury obligations); this funding is pursuant to an advance refunding of
the security. Ratings are not covered by Independent Auditors' Report.
(b) Security subject to alternative minimum tax.
(c) Secured by bond insurance.
(d) Secured by an escrow fund of U.S. Treasury obligations.
(e) Security has an irrevocable call or mandatory put by the issuer. Maturity
date reflects such call or put.
(f) Unrated security; determined by the investment advisor to be of comparable
quality to the rated securities in which the Fund may invest pursuant to
guidelines of quality adopted by the Board of Trustees and followed by the
investment advisor.
Investment Abbreviations:
COP - Certificates of Participation
GO - General Obligation Bonds
IDR - Industrial Development Revenue Bonds
LOC - Letter of Credit
NRR - Not Re-Rated
PCR - Pollution Control Revenue Bonds
RB - Revenue Bonds
Sub. - Subordinated
See Notes to Financial Statements.
16
<PAGE> 19
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (cost
$372,253,281) $372,556,813
- ----------------------------------------------------------
Receivables for:
Fund shares sold 679,906
- ----------------------------------------------------------
Interest 6,993,466
- ----------------------------------------------------------
Investments sold 2,225,600
- ----------------------------------------------------------
Investment for deferred compensation plan 69,976
- ----------------------------------------------------------
Other assets 24,176
- ----------------------------------------------------------
Total assets 382,549,937
- ----------------------------------------------------------
LIABILITIES:
Payables for:
Fund shares reacquired 2,033,552
- ----------------------------------------------------------
Investments purchased 1,510,208
- ----------------------------------------------------------
Dividends 745,358
- ----------------------------------------------------------
Amount due to custodian 1,024,350
- ----------------------------------------------------------
Deferred compensation plan 69,976
- ----------------------------------------------------------
Accrued advisory fees 146,896
- ----------------------------------------------------------
Accrued distribution fees 301,129
- ----------------------------------------------------------
Accrued transfer agent fees 18,969
- ----------------------------------------------------------
Accrued operating expenses 71,870
- ----------------------------------------------------------
Total liabilities 5,922,308
- ----------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $376,627,629
==========================================================
NET ASSETS:
Class A $294,719,732
==========================================================
Class B $ 72,255,902
==========================================================
Class C $ 9,651,995
==========================================================
SHARES OUTSTANDING, $0.01 PAR VALUE PER
SHARE:
Class A 38,054,890
==========================================================
Class B 9,317,682
==========================================================
Class C 1,246,825
==========================================================
Class A:
Net asset value and redemption price per
share $ 7.74
- ----------------------------------------------------------
Offering price per share:
(Net asset value of $7.74 divided by
95.25%) $ 8.13
==========================================================
Class B:
Net asset value and offering price per
share $ 7.75
==========================================================
Class C:
Net asset value and offering price per
share $ 7.74
==========================================================
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 23,860,069
- ----------------------------------------------------------
EXPENSES:
Advisory fees 1,830,490
- ----------------------------------------------------------
Administrative services fees 91,647
- ----------------------------------------------------------
Custodian fees 19,729
- ----------------------------------------------------------
Transfer agent fees - Class A 160,531
- ----------------------------------------------------------
Transfer agent fees - Class B 46,049
- ----------------------------------------------------------
Transfer agent fees - Class C 5,831
- ----------------------------------------------------------
Trustees' fees 9,669
- ----------------------------------------------------------
Distribution fees - Class A 805,244
- ----------------------------------------------------------
Distribution fees - Class B 753,522
- ----------------------------------------------------------
Distribution fees - Class C 101,726
- ----------------------------------------------------------
Interest expense 461
- ----------------------------------------------------------
Other 232,442
- ----------------------------------------------------------
Total expenses 4,057,341
- ----------------------------------------------------------
Less: Expenses paid indirectly (4,633)
- ----------------------------------------------------------
Net expenses 4,052,708
- ----------------------------------------------------------
Net investment income 19,807,361
- ----------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENT SECURITIES:
Net realized gain (loss) from investment
securities (3,713,985)
- ----------------------------------------------------------
Change in net unrealized appreciation
(depreciation) of investment securities (26,831,659)
- ----------------------------------------------------------
Net gain (loss) on investment securities (30,545,644)
- ----------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $(10,738,283)
==========================================================
</TABLE>
See Notes to Financial Statements.
17
<PAGE> 20
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 19,807,361 $ 18,756,162
- ------------------------------------------------------------------------------------------
Net realized gain (loss) from investment securities (3,713,985) 595,427
- ------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) of
investment securities (26,831,659) (197,391)
- ------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (10,738,283) 19,154,198
- ------------------------------------------------------------------------------------------
Distributions to shareholders from net investment income:
Class A (16,158,034) (16,134,077)
- ------------------------------------------------------------------------------------------
Class B (3,218,044) (2,410,612)
- ------------------------------------------------------------------------------------------
Class C (435,134) (214,027)
- ------------------------------------------------------------------------------------------
Distributions in excess of net investment income:
Class A (288,606) (87,502)
- ------------------------------------------------------------------------------------------
Class B (67,461) (15,369)
- ------------------------------------------------------------------------------------------
Class C (9,104) (1,355)
- ------------------------------------------------------------------------------------------
Share transactions-net:
Class A (8,643,725) 8,923,504
- ------------------------------------------------------------------------------------------
Class B 5,334,838 25,558,113
- ------------------------------------------------------------------------------------------
Class C 857,965 8,741,537
- ------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (33,365,588) 43,514,410
- ------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of period 409,993,217 366,478,807
- ------------------------------------------------------------------------------------------
End of period $376,627,629 $409,993,217
==========================================================================================
NET ASSETS CONSIST OF:
Shares of beneficial interest $381,002,296 $383,815,745
- ------------------------------------------------------------------------------------------
Undistributed net investment income (loss) (80,397) (73,902)
- ------------------------------------------------------------------------------------------
Undistributed net realized gain (loss) from investment
securities (4,597,802) (883,817)
- ------------------------------------------------------------------------------------------
Unrealized appreciation of investment securities 303,532 27,135,191
- ------------------------------------------------------------------------------------------
$376,627,629 $409,993,217
==========================================================================================
</TABLE>
See Notes to Financial Statements.
18
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES
AIM Municipal Bond Fund (the "Fund") is a series portfolio of AIM Funds Group
(the "Trust"). The Trust is a Delaware business trust registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
series management investment company consisting of nine separate portfolios,
each having an unlimited number of shares of beneficial interest. The Fund
currently offers three different classes of shares: Class A shares, Class B
shares and Class C shares. Class A shares are sold with a front-end sales
charge. Class B shares and Class C shares are sold with a contingent deferred
sales charge. Matters affecting each portfolio or class will be voted on
exclusively by the shareholders of such portfolio or class. The assets,
liabilities and operations of each portfolio are accounted for separately.
Information presented in these financial statements pertains only to the Fund.
The Fund's investment objective is to achieve a high level of current income
exempt from federal income taxes, consistent with the preservation of principal,
by investing in a diversified portfolio of municipal bonds.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of 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. The
following is a summary of the significant accounting policies followed by the
Fund in the preparation of its financial statements.
A. Security Valuations -- Portfolio securities are valued on the basis of prices
provided by an independent pricing service approved by the Board of Trustees,
provided that securities with a demand feature exercisable within one to
seven days will be valued at par. Prices provided by the pricing service may
be determined without exclusive reliance on quoted prices and may reflect
appropriate factors such as institution-size trading in similar groups of
securities, yield, quality, coupon rate, maturity, type of issue, individual
trading characteristics and other market data. Portfolio securities for which
prices are not provided by the pricing service are valued at the mean between
the last available bid and asked prices, unless the Board of Trustees, or
persons designated by the Board of Trustees, determines that the mean between
the last available bid and asked prices does not accurately reflect the
current market value of the security. Securities for which market quotations
either are not readily available or are questionable are valued at fair value
as determined in good faith by or under the supervision of the Trust's
officers in a manner specifically authorized by the Board of Trustees.
Notwithstanding the above, short-term obligations with maturities of 60 days
or less are valued at amortized cost.
B. Securities Transactions and Investment Income -- Securities transactions are
accounted for on a trade date basis. Realized gains or losses on sales are
computed on the basis of specific identification of the securities sold.
Interest income is recorded as earned from settlement date and is recorded on
the accrual basis. Dividend income is recorded on the ex-dividend date. On
December 31, 1999, undistributed net investment income was increased by
$362,527 and paid-in capital decreased by $362,527 as a result of differing
book/tax treatment reclassifications. Net assets of the Fund were unaffected
by the reclassifications.
C. Distributions -- It is the policy of the Fund to declare daily dividends from
net investment income. Such distributions are paid monthly. Distributions
from net realized capital gains, if any, are generally paid annually and
recorded on ex-dividend date. The Fund may elect to use a portion of the
proceeds of fund share redemptions as distributions for federal income tax
purposes.
D. Federal Income Taxes -- The Fund intends to comply with the requirements of
the Internal Revenue Code necessary to qualify as a regulated investment
company and, as such, will not be subject to federal income taxes on
otherwise taxable income (including net realized capital gains) which is
distributed to shareholders. Therefore, no provision for federal income taxes
is recorded in the financial statements. The Fund has a capital loss
carryforward of $2,805,103 as of December 31, 1999 which may be carried
forward to offset future taxable gains, if any, which expires in varying
increments, if not previously utilized, in the year 2007.
E. Expenses -- Distribution expenses and transfer agency expenses directly
attributable to a class of shares are charged to that class' operations. All
other expenses which are attributable to more than one class are allocated
among the classes.
NOTE 2-ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a master investment advisory agreement with A I M
Advisors, Inc. ("AIM"). Under the terms of the master investment advisory
agreement, the Fund pays an advisory fee to AIM at an annual rate of 0.50% on
the first $200 million of the Fund's average daily net assets, plus 0.40% on the
next $300 million of the Fund's average daily net assets, plus 0.35% on the next
$500 million of the Fund's average daily net assets, plus 0.30% on the Fund's
average daily net assets in excess of $1 billion.
The Fund, pursuant to a master administrative services agreement with AIM, has
agreed to pay AIM for certain administrative costs incurred in providing
accounting services to the Fund. For the year ended December 31, 1999, AIM was
paid $91,647 for such services.
The Fund, pursuant to a transfer agency and service agreement, has agreed to
pay A I M Fund Services, Inc. ("AFS") a fee for providing transfer agency and
shareholder services to the Fund.
19
<PAGE> 22
For the year ended December 31, 1999, AFS was paid $138,338 for such services.
The Trust has entered into master distribution agreements with A I M
Distributors, Inc. ("AIM Distributors") to serve as the distributor for the
Class A, Class B and Class C shares of the Fund. The Trust has adopted plans
pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund's Class A
shares, Class B shares and Class C shares (collectively, the "Plans"). The Fund,
pursuant to the Plans, pays AIM Distributors compensation at the annual rate of
0.25% of the Fund's average daily net assets of Class A shares and 1.00% of the
average daily net assets of Class B and C shares. Of these amounts, the Fund may
pay a service fee of 0.25% of the average daily net assets of the Class A, Class
B or Class C shares to selected dealers and financial institutions who furnish
continuing personal shareholder services to their customers who purchase and own
the appropriate class of shares of the Fund. Any amounts not paid as a service
fee under the Plans would constitute an asset-based sales charge. The Plans also
impose a cap on the total sales charges, including asset-based sales charges
that may be paid by the respective classes. For the year ended December 31,
1999, the Class A, Class B and Class C shares paid AIM Distributors $805,244,
$753,522 and $101,726, respectively, as compensation under the Plans.
AIM Distributors received commissions of $97,187 from sales of the Class A
shares of the Fund during the year ended December 31, 1999. Such commissions are
not an expense of the Fund. They are deducted from, and are not included in, the
proceeds from sales of Class A shares. During the year ended December 31, 1999,
AIM Distributors received $123,118 in contingent deferred sales charges imposed
on redemptions of Fund shares.
Certain officers and trustees of the Trust are officers and directors of AIM,
AFS and AIM Distributors.
During the year ended December 31, 1999, the Fund paid legal fees of $4,178
for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the
Board of Trustees. A member of that firm is a trustee of the Trust.
NOTE 3-INDIRECT EXPENSES
During the year ended December 31, 1999, the Fund received reductions in
transfer agency fees from AFS (an affiliate of AIM) of $4,633 under an expense
offset arrangement. The effect of the above arrangement resulted in a reduction
of the Fund's total expenses of $4,633 during the year ended December 31, 1999.
NOTE 4-TRUSTEES' FEES
Trustees' fees represent remuneration paid to trustees who are not an
"interested person" of AIM. The Trust invests trustees' fees, if so elected by a
trustee, in mutual fund shares in accordance with a deferred compensation plan.
NOTE 5-BANK BORROWINGS
The Fund is a participant in a committed line of credit facility with a
syndicate administered by The Chase Manhattan Bank. The Fund may borrow up to
the lesser of (i) $1,000,000,000 or (ii) the limits set by its prospectus for
borrowings. The Fund and other funds advised by AIM which are parties to the
line of credit may borrow on a first come, first served basis. The funds which
are party to the line of credit are charged a commitment fee of 0.09% on the
unused balance of the committed line. Prior to May 28, 1999, the commitment fee
rate was 0.05%. The commitment fee is allocated among the funds based on their
respective average net assets for the period. During the year ended December 31,
1999, the Fund borrowed minimal amounts under the line of credit agreement.
Interest expense for the Fund for the year ended December 31, 1999 was $461.
NOTE 6-INVESTMENT SECURITIES
The aggregate amount of investment securities (other than short-term securities)
purchased and sold by the Fund during the year ended December 31, 1999 was
$112,320,103 and $112,820,490, respectively.
The amount of unrealized appreciation (depreciation) of investment securities,
for tax purposes, as of December 31, 1999 was as follows:
<TABLE>
<S> <C>
Aggregate unrealized appreciation of
investment securities $ 11,295,947
- ---------------------------------------------------------
Aggregate unrealized (depreciation) of
investment securities (10,992,415)
- ---------------------------------------------------------
Net unrealized appreciation of investment
securities $ 303,532
=========================================================
</TABLE>
Investments have the same cost for tax and financial
statement purposes.
20
<PAGE> 23
NOTE 7-SHARE INFORMATION
Changes in shares outstanding during the years ended December 31, 1999 and 1998
were as follows:
<TABLE>
<CAPTION>
1999 1998
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Sold:
Class A 10,431,994 $ 85,813,744 12,409,366 $ 103,769,637
- -----------------------------------------------------------------------------------------------------------------------
Class B 3,700,766 30,098,258 5,306,019 44,489,342
- -----------------------------------------------------------------------------------------------------------------------
Class C 851,082 6,903,087 1,294,847 10,824,561
- -----------------------------------------------------------------------------------------------------------------------
Issued as reinvestment of dividends:
Class A 1,102,784 8,919,262 1,031,670 8,611,126
- -----------------------------------------------------------------------------------------------------------------------
Class B 264,015 2,137,326 183,219 1,532,455
- -----------------------------------------------------------------------------------------------------------------------
Class C 31,375 254,074 16,529 138,044
- -----------------------------------------------------------------------------------------------------------------------
Reacquired:
Class A (12,703,387) (103,376,731) (12,388,704) (103,457,259)
- -----------------------------------------------------------------------------------------------------------------------
Class B (3,338,570) (26,900,746) (2,444,886) (20,463,684)
- -----------------------------------------------------------------------------------------------------------------------
Class C (780,440) (6,299,196) (265,347) (2,221,068)
- -----------------------------------------------------------------------------------------------------------------------
(440,381) $ (2,450,922) 5,142,713 $ 43,223,154
=======================================================================================================================
</TABLE>
NOTE 8-FINANCIAL HIGHLIGHTS
Shown below are the financial highlights for a share of Class A and a share of
Class B outstanding during each of the years in the five-year period ended
December 31, 1999, and for a share of Class C outstanding during each of the
years in the two-year period ended December 31, 1999 and the period August 4,
1997 (date sales commenced) through December 31, 1997.
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.35 $ 8.34 $ 8.19 $ 8.31 $ 7.78
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Income from investment operations:
Net investment income 0.41 0.42 0.42 0.43 0.43
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Net gains (losses) on securities (both realized and
unrealized) (0.61) 0.01 0.16 (0.12) 0.56
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Total from investment operations (0.20) 0.43 0.58 0.31 0.99
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income (0.41) (0.42) (0.43) (0.43) (0.43)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Returns of capital -- -- -- -- (0.03)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Total distributions (0.41) (0.42) (0.43) (0.43) (0.46)
- ------------------------------------------------------------ -------- -------- -------- -------- --------
Net asset value, end of period $ 7.74 $ 8.35 $ 8.34 $ 8.19 $ 8.31
============================================================ ======== ======== ======== ======== ========
Total return(a) (2.45)% 5.28% 7.27% 3.90% 13.05%
============================================================ ======== ======== ======== ======== ========
Ratios/supplemental data:
Net assets, end of period (000s omitted) $294,720 $327,705 $318,469 $278,812 $284,803
============================================================ ======== ======== ======== ======== ========
Ratio of expenses to average net assets 0.84%(b) 0.82% 0.90% 0.80% 0.88%
============================================================ ======== ======== ======== ======== ========
Ratio of net investment income to average net assets 5.01%(b) 5.00% 5.14% 5.29% 5.26%
============================================================ ======== ======== ======== ======== ========
Portfolio turnover rate 28% 19% 24% 26% 36%
============================================================ ======== ======== ======== ======== ========
</TABLE>
(a) Does not deduct sales charges.
(b) Ratios are based on average daily net assets of $322,097,527.
21
<PAGE> 24
NOTE 8-FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
CLASS B CLASS C
------------------------------------------------------- ----------------------------
1999 1998 1997 1996 1995 1999 1998 1997
------- ------- ------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.37 $ 8.36 $ 8.19 $ 8.31 $ 7.78 $ 8.35 $ 8.35 $ 8.30
- -------------------------------------- ------- ------- ------- ------- ------- ------ ------ ------
Income from investment operations:
Net investment income 0.35 0.36 0.36 0.37 0.39 0.35 0.36 0.15
- -------------------------------------- ------- ------- ------- ------- ------- ------ ------ ------
Net gains (losses) on securities
(both realized and unrealized) (0.62) 0.01 0.17 (0.13) 0.54 (0.61) -- 0.04
- -------------------------------------- ------- ------- ------- ------- ------- ------ ------ ------
Total from investment operations (0.27) 0.37 0.53 0.24 0.93 (0.26) 0.36 0.19
- -------------------------------------- ------- ------- ------- ------- ------- ------ ------ ------
Less distributions:
Dividends from net investment income (0.35) (0.36) (0.36) (0.36) (0.37) (0.35) (0.36) (0.14)
- -------------------------------------- ------- ------- ------- ------- ------- ------ ------ ------
Returns of capital -- -- -- -- (0.03) -- -- --
- -------------------------------------- ------- ------- ------- ------- ------- ------ ------
Total distributions (0.35) (0.36) (0.36) (0.36) (0.40) (0.35) (0.36) (0.14)
- -------------------------------------- ------- ------- ------- ------- ------- ------ ------ ------
Net asset value, end of period $ 7.75 $ 8.37 $ 8.36 $ 8.19 $ 8.31 $ 7.74 $ 8.35 $ 8.35
====================================== ======= ======= ======= ======= ======= ====== ====== ======
Total return(a) (3.28)% 4.48% 6.59% 2.99% 12.14% (3.16)% 4.36% 2.36%
====================================== ======= ======= ======= ======= ======= ====== ====== ======
Ratios/supplemental data:
Net assets, end of period (000s
omitted) $72,256 $72,723 $47,185 $33,770 $21,478 $9,652 $9,565 $ 825
====================================== ======= ======= ======= ======= ======= ====== ====== ======
Ratio of expenses to average net
assets 1.59%(b) 1.57% 1.66% 1.61% 1.68%(c) 1.59%(b) 1.57% 1.67%(d)
====================================== ======= ======= ======= ======= ======= ====== ====== ======
Ratio of net investment income to
average net assets 4.26%(b) 4.25% 4.38% 4.49% 4.46%(e) 4.26%(b) 4.25% 4.37%(d)
====================================== ======= ======= ======= ======= ======= ====== ====== ======
Portfolio turnover rate 28% 19% 24% 26% 36% 28% 19% 24%
====================================== ======= ======= ======= ======= ======= ====== ====== ======
</TABLE>
(a) Does not deduct contingent deferred sales charges and is not annualized for
periods less than one year.
(b) Ratios are based on average daily net assets of $75,352,248 and $10,172,642
for Class B and Class C, respectively.
(c) After fee waivers and/or expense reimbursements. The ratio of expenses to
average daily net assets prior to fee waivers and/or expense reimbursements
was 1.77% for 1995.
(d) Annualized.
(e) After fee waivers and/or expense reimbursements. The ratio of net investment
income to average daily net assets prior to fee waivers and/or expense
reimbursements was 4.37% for 1995.
22
<PAGE> 25
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders of
AIM Municipal Bond Fund:
We have audited the accompanying statement of assets and
liabilities of AIM Municipal Bond Fund (a portfolio of
AIM Funds Group), including the schedule of investments,
as of December 31, 1999, and the related statement of
operations for the year then ended, the statement of
changes in net assets and the financial highlights for
each of the years in the five-year period then ended.
These financial statements and financial highlights are
the responsibility of the Fund'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 generally
accepted auditing standards. 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.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of
securities owned as of December 31, 1999, by
correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all
material respects, the financial position of AIM
Municipal Bond Fund as of December 31, 1999, the results
of its operations for the year then ended, the changes in
its net assets and the financial highlights for each of
the years in the five-year period then ended, in
conformity with generally accepted accounting principles.
KPMG LLP
February 4, 2000
Houston, Texas
23
<PAGE> 26
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C>
Charles T. Bauer Charles T. Bauer 11 Greenway Plaza
Chairman Chairman Suite 100
A I M Management Group Inc. Houston, TX 77046
Robert H. Graham
Bruce L. Crockett President INVESTMENT ADVISOR
Director
ACE Limited; Carol F. Relihan A I M Advisors, Inc.
Formerly Director, President, and Senior Vice President and Secretary 11 Greenway Plaza
Chief Executive Officer Suite 100
COMSAT Corporation Gary T. Crum Houston, TX 77046
Senior Vice President
Owen Daly II TRANSFER AGENT
Director Dana R. Sutton
Cortland Trust Inc. Vice President and Treasurer A I M Fund Services, Inc.
P.O. Box 4739
Edward K. Dunn Jr. Robert G. Alley Houston, TX 77210-4739
Chairman, Mercantile Mortgage Corp.; Vice President
Formerly Vice Chairman, CUSTODIAN
President and Chief Operating Officer, Stuart W. Coco
Mercantile-Safe Deposit & Trust Co.; and Vice President The Bank of New York
President, Mercantile Bankshares 90 Washington Street
Melville B. Cox 11th Floor
Jack Fields Vice President New York, NY 10286
Chief Executive Officer
Texana Global, Inc.; Karen Dunn Kelley COUNSEL TO THE FUND
Formerly Member Vice President
of the U.S. House of Representatives Ballard Spahr
Edgar M. Larsen Andrews & Ingersoll, LLP
Carl Frischling Vice President 1735 Market Street
Partner Philadelphia, PA 19103
Kramer, Levin, Naftalis & Frankel LLP Mary J. Benson
Assistant Vice President and COUNSEL TO THE TRUSTEES
Robert H. Graham Assistant Treasurer
President and Chief Executive Officer Kramer, Levin, Naftalis & Frankel LLP
A I M Management Group Inc. Sheri Morris 919 Third Avenue
Assistant Vice President and New York, NY 10022
Prema Mathai-Davis Assistant Treasurer
Chief Executive Officer, YWCA of the U.S.A. DISTRIBUTOR
Renee A. Friedli
Lewis F. Pennock Assistant Secretary A I M Distributors, Inc.
Attorney 11 Greenway Plaza
P. Michelle Grace Suite 100
Louis S. Sklar Assistant Secretary Houston, TX 77046
Executive Vice President
Hines Interests Nancy L. Martin AUDITORS
Limited Partnership Assistant Secretary
KPMG LLP
Ofelia M. Mayo 700 Louisiana
Assistant Secretary Houston, TX 77002
Lisa A. Moss
Assistant Secretary
Kathleen J. Pflueger
Assistant Secretary
Samuel D. Sirko
Assistant Secretary
Stephen I. Winer
Assistant Secretary
</TABLE>
REQUIRED FEDERAL INCOME TAX INFORMATION (UNAUDITED)
AIM Municipal Bond Fund Class A, Class B, and Class C shares paid ordinary
dividends in the amount of $0.414, $0.354, and $0.354 per share, respectively,
to shareholders during its tax year ended December 31, 1999. Of these amounts,
98.26%, 97.97% and 97.97% are qualified as tax-exempt interest dividends for
Class A shares, Class B shares and Class C shares, respectively for federal
income tax purposes.
24
<PAGE> 27
-------------------------------------
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AIM MUNICIPAL BOND FUND
<PAGE> 28
THE AIM FAMILY OF FUNDS--Registered Trademark--
<TABLE>
<S> <C> <C>
GROWTH FUNDS INTERNATIONAL GROWTH FUNDS A I M Management Group Inc. has provided
AIM Aggressive Growth Fund AIM Advisor International Value Fund leadership in the mutual fund industry
AIM Blue Chip Fund AIM Asian Growth Fund since 1976 and managed approximately $160
AIM Capital Development Fund AIM Developing Markets Fund billion in assets for more than 6.6 million
AIM Constellation Fund(1) AIM Euroland Growth Fund(4) shareholders, including individual investors,
AIM Dent Demographic Trends Fund AIM European Development Fund corporate clients and financial institutions,
AIM Large Cap Growth Fund AIM International Equity Fund as of December 31, 1999.
AIM Mid Cap Equity Fund AIM Japan Growth Fund The AIM Family of Funds--Registered Trademark--
AIM Mid Cap Growth Fund AIM Latin American Growth Fund is distributed nationwide, and AIM today is the
AIM Mid Cap Opportunities Fund AIM New Pacific Growth Fund eighth-largest mutual fund complex in the United
AIM Select Growth Fund States in assets under management, according to
AIM Small Cap Growth Fund(2) GLOBAL GROWTH FUNDS Strategic Insight, an independent mutual fund
AIM Small Cap Opportunities Fund(3) AIM Global Aggressive Growth Fund monitor.
AIM Value Fund AIM Global Growth Fund
AIM Weingarten Fund
GLOBAL GROWTH & INCOME FUNDS
GROWTH & INCOME FUNDS AIM Global Growth & Income Fund
AIM Advisor Flex Fund AIM Global Utilities Fund
AIM Advisor Large Cap Value Fund
AIM Advisor Real Estate Fund GLOBAL INCOME FUNDS
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AIM Basic Value Fund AIM Global Government Income Fund
AIM Charter Fund AIM Global Income Fund
AIM Strategic Income Fund
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AIM Floating Rate Fund THEME FUNDS
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AIM Limited Maturity Treasury Fund AIM Global Resources Fund
AIM Global Telecommunications and Technology Fund(5)
TAX-FREE INCOME FUNDS AIM Global Trends Fund(6)
AIM High Income Municipal Fund
AIM Municipal Bond Fund
AIM Tax-Exempt Bond Fund of Connecticut
AIM Tax-Free Intermediate Fund
MONEY MARKET FUNDS
AIM Money Market Fund
AIM Tax-Exempt Cash Fund
</TABLE>
(1) Effective December 1, 1999, AIM Constellation Fund's investment strategy
broadened to allow investments across all market capitalizations. (2) AIM Small
Cap Growth Fund closed to new investors on November 8, 1999. (3) AIM Small Cap
Opportunities Fund closed to new investors on November 4, 1999. (4) On September
1, 1999, AIM Europe Growth Fund was renamed AIM Euroland Growth Fund. Previously
the fund invested in all size companies in most areas of Europe. The fund now
seeks to invest at least 65%of its assets in large-cap companies within
countries using the euro as their currency (EMU-member countries). (5) On June
1, 1999, AIM Global Telecommunications Fund was renamed AIM Global
Telecommunications and Technology Fund. (6) Effective August 27, 1999, AIM
Global Trends Fund was restructured to operate as a traditional mutual fund.
Before that date, the fund operated as a fund of funds. For more complete
information about any AIM fund(s), including sales charges and expenses, ask
your financial advisor or securities dealer for a free prospectus(es). Please
read the prospectus(es) carefully before you invest or send money. If used as
sales material after April 20, 2000, this report must be accompanied by a
current Quarterly Review of Performance for AIM Funds.
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