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As filed with the Securities and Exchange Commission
on April 27, 1998
Registration No. 2-58774
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
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UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. [ ]
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Fidelity Court Street Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Offices)
Registrant's Telephone Number (617) 563-7000
Eric D. Roiter, Secretary
82 Devonshire Street
Boston, MA 02109
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable
after the Registration Statement becomes effective under the
Securities Act of 1933.
The Registrant has registered an indefinite amount of securities under
the Securities Act of 1933 pursuant to Section 24(f) under the
Investment Company Act of 1940; accordingly, no fee is payable
herewith because of reliance upon Section 24(f). Pursuant to Rule 429,
this Registration Statement relates to shares previously registered on
Form N-1A.
It is proposed that this filing will become effective on May 26, 1998,
pursuant to Rule 488.
Spartan Municipal Income Fund
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following papers and
documents:
Facing Page
Contents of Registration Statement
Cross Reference Sheet
Solicitation Letters to Shareholders
Form of Proxy Card
Notice of Special Meeting
Part A - Proxy Statement and Prospectus
Part B- Statement of Additional Information
Part C - Other Information
Signature Page
Exhibits
Fidelity Court Street Trust:
Spartan Municipal Income Fund
FORM N-14 CROSS REFERENCE SHEET
PART A
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Form N-14 Item Number and Caption Prospectus/Proxy Statement Caption
1. Beginning of Registration Statement and Out- Cover Page
side Front Cover Page of Prospectus
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2. Beginning and Outside Back Cover Page of Pro- Table of Contents
spectus
3. Fee Table, Synopsis Information and Risk Factors Synopsis; Comparison of Other Policies of the Funds;
Comparison of Principal Risk Factors; The Proposed
Transaction
4. Information About the Transactions Synopsis; The Proposed Transaction;
Prospectus of Spartan Municipal Income Fund dated
March 19, 1998
5. Information About the Registrant Synopsis; Comparison of Other Policies of the Funds;
Comparison of Principal Risk Factors; Miscellaneous;
Additional Information About Spartan Municipal
Income Fund; Prospectus of Spartan Municipal
Income Fund dated March 19, 1998; Attachment I.
6. Information About the Company Being Acquired Cover Page; Synopsis; Comparison of Other Policies
of the Funds; Comparison of Principal Risk Factors;
Miscellaneous; Prospectuses of Fidelity Advisor
Municipal Bond Fund dated October 31, 1997 (Class
A, Class T, Class B, and Institutional Class) and
supplemented on February 4, 1998 (Class A, Class T,
and Class B) and February 12, 1998 (Institutional
Class), and dated February 28, 1998 (Initial Class).
7. Voting Information Voting Information
8. Interest of Certain Persons and Experts Not applicable
9. Additional Information Required for Reoffering Not applicable
by Persons Deemed to be Underwriters
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PART B
Item Number and Caption Statement of Additional Information Caption
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10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. Additional Information About the Registrant Prospectus and Statement of Additional
Information of Spartan Municipal Income
Fund dated March 19, 1998
13. Additional Information About the Company Be- Not applicable
ing Acquired
14. Financial Statements Financial Statements included in the Annual
Reports of Fidelity Advisor Municipal Bond
Fund for the Fiscal Year Ended December 31,
1997; Financial Statements included in the
Annual Report of Spartan Municipal Income
Fund for the Fiscal Year Ended November 30,
1997.
Pro-Forma Financial Statements for the Fiscal
Year Ended November 30, 1997.
Part C Information required to be included in Part C
is set forth under the appropriate item so
numbered in Part C of this Registration
Statement.
</TABLE>
IMPORTANT PROXY MATERIALS
PLEASE CAST YOUR VOTE NOW!
Dear Shareholder:
I am writing to ask you for your vote on an important proposal to
merge Fidelity Advisor Municipal Bond Fund (FIDELITY MUNICIPAL),
including Fidelity Municipal Bond Fund, into Spartan(registered
trademark) Municipal Income Fund (SPARTAN MUNICIPAL). A shareholder
meeting is scheduled for August 3, 1998. Votes received in time to be
counted at the meeting will decide whether the merger takes place.
This package contains information about the proposal and includes all
the materials you will need to vote by mail.
The fund's Board of Trustees has reviewed the proposed merger and has
recommended that the proposed merger be presented to shareholders.
The Trustees, most of whom are not affiliated with Fidelity, are
responsible for protecting your interests as a shareholder. The
Trustees have determined that the proposed merger is in shareholders'
best interest. However, the final decision is up to you.
The proposed merger would give shareholders of Fidelity Municipal the
opportunity to participate in a larger fund with similar investment
policies. The combined fund would also have lower expenses guaranteed
through December 31, 2000. We have attached a Q&A to assist you in
understanding the proposal. The enclosed proxy statement includes a
detailed description of the proposed merger.
Please read the enclosed materials and promptly cast your vote on the
proxy card. You are entitled to one vote for each dollar of net asset
value you own of a fund on the record date (June 8, 1998). Your vote
is extremely important, no matter how large or small your holdings may
be.
VOTING BY MAIL IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED.
To cast your vote, simply complete the proxy card enclosed in this
package. Be sure to sign the card before mailing it in the
postage-paid envelope provided.
If you have any questions before you vote, please call us at
1-800-544-8888. We will be glad to help you get your vote in quickly.
Thank you for your participation in this important initiative for your
fund.
Sincerely,
[signature]
Edward C. Johnson 3d
President
Important information to help you understand and vote on the proposal
Please read the full text of the enclosed proxy statement. Below is a
brief overview of the proposal to be voted upon. Your vote is
important. We appreciate you placing your trust in Fidelity and look
forward to helping you achieve your financial goals.
WHAT PROPOSAL AM I BEING ASKED TO VOTE ON?
You are being asked to approve a merger of Fidelity Advisor Municipal
Bond Fund, including Fidelity Municipal Bond Fund (Initial Class),
into Spartan Municipal Income Fund.
WHAT IS THE REASON FOR AND ADVANTAGES OF THIS MERGER?
The proposed merger is part of a wider strategy by Fidelity to reduce
the number of municipal bond funds it manages. The combined fund
would have lower expenses guaranteed through December 31, 2000, and
substantially similar investment policies.
DO THE FUNDS BEING MERGED HAVE SIMILAR INVESTMENT POLICIES?
Both funds are municipal bond funds that seek high current income
exempt from federal income tax by investing in investment-grade
municipal securities. The funds differ primarily in their investment
policies regarding debt quality and the level of expenses they incur.
Spartan Municipal has the ability to invest up to 5% of assets in
below investment-grade securities, while Fidelity Municipal invests
only in investment-grade securities.
WHO IS THE FUND MANAGER FOR THESE FUNDS?
George Fisher currently manages both funds and is expected to manage
the combined fund.
HOW DO THE EXPENSE STRUCTURES OF THE FUNDS COMPARE?
Fidelity Municipal and Spartan Municipal have similar expense
structures in that each fund pays a management fee and other expenses.
Fidelity Municipal offers five classes of shares including Fidelity
Municipal Bond Fund, and Spartan Municipal offers one class of shares.
Fidelity Management & Research Company (FMR) has voluntarily agreed to
reimburse each share class of Fidelity Municipal to the extent they
exceed a voluntary total operating expense cap applicable to each
class. FMR has agreed to reimburse Spartan Municipal to the extent
that total operating expenses exceed 0.53% of average net assets
through December 31, 1999.
If the Reorganization is approved, FMR has agreed to limit the
combined fund's total operating expenses to 0.53% of average net
assets through December 31, 2000. After that date, the combined
fund's expenses could increase or decrease.
The Reorganization would provide Fidelity Municipal shareholders with
a fund that has lower expenses and substantially similar investment
policies.
WHAT WILL BE THE NAME OF THE COMBINED FUND AFTER THE MERGER IS
COMPLETED?
If shareholders of Fidelity Municipal approve the merger of their fund
into Spartan Municipal, the combined fund's name will remain Spartan
Municipal Income Fund.
WHAT ARE THE FEDERAL TAX IMPLICATIONS OF THE MERGER?
Typically, the merger of mutual funds is not a federally taxable event
to shareholders of either of the funds.
WHAT WILL BE THE SIZE OF SPARTAN MUNICIPAL AFTER THE MERGER AND HOW
HAS THE FUND PERFORMED?
If the proposal is approved, the combined fund will have over $3.2
billion in assets.
The table below shows average annual total returns for both Spartan
Municipal and its Lipper peer group over the last 1, 3, and 5 year
periods. Please keep in mind that past performance is no guarantee of
future results and you may have a gain or loss when you sell your
shares.
AVERAGE ANNUAL TOTAL RETURN AS OF MARCH 31, 1998
1 YEAR 3 YEARS 5 YEARS
Spartan Municipal Income Fund
Lipper Int. Municipal Debt Funds Average
HOW WILL YOU DETERMINE THE NUMBER OF SHARES OF SPARTAN MUNICIPAL THAT
I WILL RECEIVE?
As of the close of business of the New York Stock Exchange on the
Closing Date of the merger, shareholders will receive the number of
full and fractional shares of Spartan Municipal that is equal in value
to the net asset value of their shares of Fidelity Municipal on that
date. The anticipated closing date is September 10, 1998.
WHAT IF THERE ARE NOT ENOUGH VOTES TO REACH QUORUM BY THE SCHEDULED
SHAREHOLDER MEETING DATE?
To facilitate receiving sufficient votes, we will need to take further
action. We or D.F. King & Co., Inc., a proxy solicitation firm, may
contact you by mail or telephone. Therefore, we encourage
shareholders to vote as soon as they review the enclosed proxy
materials to avoid additional mailings or telephone calls.
If there are not sufficient votes to approve the proposal by the time
of the Shareholder Meeting (August 3, 1998), the meeting may be
adjourned to permit further solicitation of proxy votes.
HAS THE FUND'S BOARD OF TRUSTEES APPROVED THE PROPOSAL?
Yes. The Board of Trustees has unanimously approved the proposal and
recommends that you vote to approve it.
HOW MANY VOTES AM I ENTITLED TO CAST?
As a shareholder, you are entitled to one vote for each dollar of net
asset value you own of a fund on the record date. The record date is
June 8, 1998.
HOW DO I VOTE MY SHARES?
You can vote your shares by completing and signing the enclosed proxy
card, and mailing it in the enclosed postage paid envelope. If you
need any assistance, or have any questions regarding the proposal or
how to vote your shares, please call Fidelity at 800-544-8888 (Initial
Class) or 800-522-7297 (Class A, Class B, Class T, and Institutional
Class).
HOW DO I SIGN THE PROXY CARD?
INDIVIDUAL ACCOUNTS: Shareholders should sign exactly as their names
appear on the account registration shown on the card.
JOINT ACCOUNTS: Either owner may sign, but the name of the person
signing should conform exactly to a name shown in the registration.
ALL OTHER ACCOUNTS: The person signing must indicate his or her
capacity. For example, a trustee for a trust or other entity should
sign, "Ann B. Collins, Trustee."
NOT AUTHORIZED FOR DISTRIBUTION UNLESS PRECEDED OR ACCOMPANIED BY A
CURRENT FUND PROSPECTUS.
Average annual total returns for the period ended 3/31/98 are
historical and include changes in share price, reinvestment of
dividends and capital gains. Share price and return will vary.
Lipper Analytical Services, Inc. is a nationally recognized
organization that provides performance information for mutual funds.
Each fund is classified within a universe of funds similar in
investment objective. Peer group averages include the reinvestment of
dividends and capital gains, if any, and exclude sales charges.
Fidelity Distributors Corporation, General Distribution Agent for
Fidelity Mutual Funds. 100 Summer Street, Boston, MA 02110.
Brokerage services provided by Fidelity Brokerage Services, Inc.
Member NYSE, SIPC.
IMPORTANT PROXY MATERIALS
PLEASE CAST YOUR VOTE NOW!
Dear Fidelity Advisor Municipal Bond Fund Shareholder:
I am writing to ask you for your vote on an important proposal to
merge all classes of Fidelity Advisor Municipal Bond Fund (FIDELITY
ADVISOR MUNICIPAL), into Spartan(registered trademark) Municipal
Income Fund (SPARTAN MUNICIPAL). A shareholder meeting is scheduled
for August 3, 1998. Votes received in time to be counted at the
meeting will decide whether the merger takes place. This package
contains information about the proposal and includes all the materials
you will need to vote by mail.
The fund's Board of Trustees has reviewed the proposed merger and has
recommended that the proposed merger be presented to shareholders for
their approval. The Trustees, most of whom are not affiliated with
Fidelity, are responsible for protecting your interests as a
shareholder. The Trustees have determined that the proposed merger is
in shareholders' best interests. However, the final decision is up to
you.
The proposed merger would give shareholders of Fidelity Advisor
Municipal the opportunity to participate in a larger fund with similar
investment policies. Fidelity believes that it can achieve a higher
degree of efficiency if the two funds are combined. The enclosed
proxy statement includes a detailed description of the proposed
merger.
The merger would not be a taxable event for shareholders (i.e., you
will not have a capital gain or loss on your shares), and no sales
charge will be imposed on the merger. However, as a shareholder of
the combined fund, you will no longer have the ability to exchange
into other funds in the Advisor product line.
Please read the enclosed materials and promptly cast your vote on the
proxy card. You are entitled to one vote for each dollar of net asset
value you own of a fund on the record date (June 8, 1998). Your vote
is extremely important, no matter how large or small your holdings may
be.
VOTING BY MAIL IS QUICK AND EASY. EVERYTHING YOU NEED IS ENCLOSED.
To cast your vote, simply complete the proxy card enclosed in this
package. Be sure to sign the card before mailing it in the
postage-paid envelope provided.
If you have any questions before you vote, please call Fidelity
Advisor Client Services at 1-800-522-7297. We will be glad to help
you get your vote in quickly. Thank you for your participation in
this important initiative for your fund.
Sincerely,
[signature]
Edward C. Johnson 3d
President
[FIIS Letterhead]
IMPORTANT PROXY MATERIALS
ARE ON THE WAY TO YOUR CLIENTS RIGHT NOW!
Dear Investment Professional:
On August 3, 1998, there will be a Special Meeting of Shareholders of
Fidelity Advisor Municipal Bond Fund. The only item to be voted on by
shareholders is a proposal to merge Advisor Municipal Bond Fund into
Spartan Municipal Income Fund.
The enclosed Proxy Statement details the proposal pertaining to this
fund. A copy of the shareholder letter being mailed to all of your
clients who hold shares in this fund is also enclosed. The proposed
merger is part of Fidelity's restructuring of its municipal bond fund
product line. We have communicated with you our restructuring efforts
in October `97, January and March `98. If the merger occurs, Advisor
Municipal Bond Fund will cease to exist and intermediaries will no
longer receive 12b-1 fees from the fund. Shareholders of the combined
fund will no longer have an exchange privilege into funds in the
Advisor product line.
If you have any questions about this proxy after reading the letter or
Proxy Statement, please call your Fidelity representative at
800-522-7297.
We appreciate your support, and look forward to serving you in any way
we can.
Sincerely,
Kevin J. Kelly
President
This letter is intended for investment professional use only, and may
not be reproduced or shown to
the public in oral or written form as sales material.
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ---------------------------------------------------------------------
- -------------------------
FIDELITY MUNICIPAL TRUST: FIDELITY ADVISOR MUNICIPAL BOND FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Donald J. Kirk, or any one or more
of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Municipal Trust: Fidelity Advisor Municipal Bond
Fund which the undersigned is entitled to vote at the Special Meeting
of Shareholders of the fund to be held at the office of the trust at
82 Devonshire St., Boston, MA 02109, on August 3, 1998 at 9:00 a.m
Eastern time and at any adjournments thereof. All powers may be
exercised by a majority of said proxy holders or substitutes voting or
acting or, if only one votes and acts, then by that one. This Proxy
shall be voted on the proposals described in the Proxy Statement as
specified on the reverse side. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date _____________, 1998
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 316201102/fund# 035
cusip # 316203702/fund# 277
cusip # 316203405/fund# 537
cusip # 316203504/fund# 538
cusip # 316203603/fund# 539
Please refer to the Proxy Statement discussion of this matter.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSAL.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
- ---------------------------------------------------------------------
- -------------------------
_____________________________________________________________________
________________________
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1. To approve an Agreement and Plan of Reorganization FOR [ ] AGAINST [ ] ABSTAIN [ ] 1.
between Fidelity Advisor Municipal Bond Fund and
Fidelity Court Street Trust: Spartan Municipal
Income Fund, providing for the transfer of all of the
assets of Fidelity Advisor Municipal Bond Fund to
Spartan Municipal Income Fund in exchange solely
for shares of beneficial interest in Spartan Municipal
Income Fund and the assumption by Spartan
Municipal Income Fund of Fidelity Advisor
Municipal Bond Fund's liabilities, followed by the
distribution of Spartan Municipal Income Fund
shares to shareholders of each class of Fidelity
Advisor Municipal Bond Fund in liquidation of
Fidelity Advisor Municipal Bond Fund.
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AMUN/MUN-PXC-0698 cusip # 316201102/fund# 035
cusip # 316203702/fund# 277
cusip # 316203405/fund# 537
cusip # 316203504/fund# 538
cusip # 316203603/fund# 539
FIDELITY ADVISOR MUNICIPAL BOND FUND
A FUND OF
FIDELITY MUNICIPAL TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
CLASS A, CLASS T, CLASS B, AND INSTITUTIONAL CLASS...1-800-522-7297
FIDELITY MUNICIPAL BOND FUND ("INITIAL CLASS").......1-800-544-8888
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Fidelity Advisor Municipal Bond Fund:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Advisor Municipal Bond Fund (the fund) will be
held at the office of Fidelity Municipal Trust (the trust), 82
Devonshire Street, Boston, Massachusetts 02109 on August 3, 1998, at
9:00 a.m. Eastern time. The purpose of the Meeting is to consider and
act upon the following proposal, and to transact such other business
as may properly come before the Meeting or any adjournments thereof.
(1) To approve an Agreement and Plan of Reorganization between
Fidelity Advisor Municipal Bond Fund and Fidelity Court Street Trust:
Spartan Municipal Income Fund, providing for the transfer of all of
the assets of Fidelity Advisor Municipal Bond Fund to Spartan
Municipal Income Fund in exchange solely for shares of beneficial
interest in Spartan Municipal Income Fund and the assumption by
Spartan Municipal Income Fund of Fidelity Advisor Municipal Bond
Fund's liabilities, followed by the distribution of Spartan Municipal
Income Fund shares to shareholders of each class of Fidelity Advisor
Municipal Bond Fund in liquidation of Fidelity Advisor Municipal Bond
Fund.
The Board of Trustees has fixed the close of business on June 8, 1998
as the record date for the determination of the shareholders of
Fidelity Advisor Municipal Bond Fund entitled to notice of, and to
vote at, such Meeting and any adjournments thereof.
By order of the Board of Trustees,
ERIC D. ROITER, Secretary
June 8, 1998
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy card. For
example:
REGISTRATION VALID SIGNATURE
A. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins,
Trustee
2) ABC Trust Ann B. Collins,
Trustee
3) Ann B. Collins, Trustee Ann B. Collins,
Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
FIDELITY ADVISOR MUNICIPAL BOND FUND
A FUND OF
FIDELITY MUNICIPAL TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
CLASS A, CLASS T, CLASS B, AND INSTITUTIONAL CLASS...1-800-522-7297
FIDELITY MUNICIPAL BOND FUND ("INITIAL CLASS").......1-800-544-8888
PROXY STATEMENT AND PROSPECTUS
JUNE 8, 1998
This Proxy Statement and Prospectus (Proxy Statement) is being
furnished to shareholders of Fidelity Advisor Municipal Bond Fund
(Advisor Municipal Bond or the fund), a fund of Fidelity Municipal
Trust (the trust), in connection with the solicitation of proxies by
the trust's Board of Trustees for use at the Special Meeting of
Shareholders of the fund and at any adjournments thereof (the
Meeting). The Meeting will be held on Monday, August 3, 1998 at 9:00
a.m. Eastern time at 82 Devonshire Street, Boston, Massachusetts
02109, the principal executive office of the trust.
As more fully described in the Proxy Statement, the purpose of the
Meeting is to vote on a proposed reorganization (Reorganization).
Pursuant to an Agreement and Plan of Reorganization (the Agreement),
Advisor Municipal Bond would transfer all of its assets to Fidelity
Court Street Trust: Spartan Municipal Income Fund (Spartan Municipal
Income), in exchange solely for shares of beneficial interest of
Spartan Municipal Income and the assumption by Spartan Municipal
Income of Advisor Municipal Bond's liabilities. The number of shares
to be issued in the proposed Reorganization will be based upon the
relative net asset values of the outstanding shares of Class A, Class
T, Class B, Institutional Class, and Fidelity Municipal Bond Fund
(Initial Class) of Advisor Municipal Bond and of Spartan Municipal
Income at the time of the exchange. As provided in the Agreement,
Advisor Municipal Bond will distribute shares of Spartan Municipal
Income to each class of its shareholders in liquidation of Advisor
Municipal Bond on September 10, 1998, or such other date as the
parties may agree (the Closing Date). Shareholders of Class A, Class
T, Class B, Institutional Class, and Initial Class of Advisor
Municipal Bond will receive shares of Spartan Municipal Income equal
in value to the shares of Advisor Municipal Bond they are
surrendering, based upon the relative net asset values of each of
Class A, Class T, Class B, Institutional Class, and Initial Class of
Advisor Municipal Bond to Spartan Municipal Income, respectively, as
of the Closing Date.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROXY STATEMENT AND PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Spartan Municipal Income, a municipal bond fund, is a diversified
fund of Fidelity Court Street Trust, an open-end management investment
company organized as a Massachusetts business trust on April 21, 1977.
Spartan Municipal Income's invest-ment objective is to seek high
current income exempt from federal income tax. Spartan Municipal
Income seeks to achieve its investment objective by normally investing
in investment-grade municipal securities.
This Proxy Statement, which should be retained for future reference,
sets forth concisely the information about the Reorganization and
Spartan Municipal Income that a shareholder should know before voting
on the proposed Reorganization. The Statement of Additional
Information dated June 8, 1998 relating to this Proxy Statement has
been filed with the Securities and Exchange Commission (SEC) and is
in-corporated herein by reference. This Proxy Statement is accompanied
by the Prospectus (dated March 19, 1998), which offers shares of
Spartan Municipal Income. The Statement of Additional Information for
Spartan Municipal Income (dated March 19, 1998) is available upon
request. Attachment 1 contains excerpts from the Annual Report of
Spartan Municipal Income dated November 30, 1997. The Prospectus and
Statement of Additional Information for Spartan Municipal Income have
been filed with the SEC and are incorporated herein by reference. A
Prospectus (each dated October 31, 1997 and supplemented February 4,
1998 for Class A, Class T, and Class B, and February 12, 1998 for
Institutional Class) and Statement of Additional Information for Class
A, Class T, Class B, and Institutional Class of Advisor Municipal Bond
(supplemented February 4, 1998 for Class A, Class T, and Class B) have
been filed with the SEC and are incorporated herein by reference. A
Prospectus and Statement of Additional Information for Initial Class
of Advisor Municipal Bond (each dated February 28, 1998) have been
filed with the SEC and are incorporated herein by reference. Copies of
these documents may be obtained without charge by contacting the trust
or Fidelity Court Street Trust at Fidelity Distributors Corporation,
82 Devonshire Street, Boston, Massachusetts 02109. Copies may also be
obtained by calling Fidelity Client Services at 1-800-544-8888 (for
Initial Class) or 1-800-522-7297 (for Class A, Class T, Class B, and
Institutional Class).
TABLE OF CONTENTS
Voting Information
Synopsis
Comparison of Other Policies of the Funds
Comparison of Principal Risk Factors
The Proposed Transaction
Additional Information About Spartan Municipal Income Fund
Proposed Mergers of Spartan Aggressive Municipal Fund and Spartan
Insured Municipal Income Fund into Spartan Municipal Income Fund 32
Miscellaneous
Attachment 1. Excerpts from Annual Report of Spartan Municipal Income
Fund Dated November 30, 1997 38
Attachment 2. Pro Forma Expenses Following Other Proposed Fund
Mergers: Spartan Aggressive Municipal Fund and Spartan Insured
Municipal Income Fund into Spartan Municipal Income Fund 43
Exhibit 1. Form of Agreement and Plan of Reorganization between
Fidelity
Advisor Municipal Bond Fund and Spartan Municipal Income Fund
PROXY STATEMENT AND PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY ADVISOR MUNICIPAL BOND FUND
A FUND OF
FIDELITY MUNICIPAL TRUST
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
CLASS A, CLASS T, CLASS B, AND INSTITUTIONAL CLASS..1-800-522-7297
FIDELITY MUNICIPAL BOND FUND ("INITIAL CLASS").....1-800-544-8888
TO BE HELD ON AUGUST 3, 1998
_________________________________
VOTING INFORMATION
This Proxy Statement and Prospectus (Proxy Statement) is furnished in
connection with a solicitation of proxies made by, and on behalf of,
the Board of Trustees of Fidelity Municipal Trust (the trust) to be
used at the Special Meeting of Shareholders of Fidelity Advisor
Municipal Bond Fund (Advisor Municipal Bond or the fund) and at any
adjournments thereof (the Meeting), to be held on Monday, August 3,
1998 at 9:00 a.m. Eastern Time at 82 Devonshire Street, Boston,
Massachusetts 02109, the principal executive office of the trust and
Fidelity Management & Research Company (FMR), the fund's investment
adviser.
The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about June 8, 1998.
Supplementary solicitations may be made by mail, telephone, telegraph,
facsimile, electronic means or by personal interview by
representatives of the trust. In addition, D.F. King & Co., Inc.
and/or Management Information Services Corp. may be paid on a per-call
basis to solicit shareholders on behalf of the fund at an anticipated
cost of approximately $4,000. The expenses in connection with
preparing this Proxy Statement and its enclosures and of all
solicitations will be paid by the fund, provided the expenses do not
exceed Class A's, Class T's, Class B's, Institutional Class's, or
Fidelity Municipal Bond Fund's (Initial Class's) expense cap of 2.15%,
2.25%, 2.90%, 2.00%, and 0.75%, respectively. Expenses exceeding a
class's expense cap, as applicable, will be paid by FMR. The fund will
reimburse brokerage firms and others for their reasonable expenses in
forwarding solicitation material to the beneficial owners of shares.
If the enclosed proxy card is executed and returned, it may
nevertheless be revoked at any time prior to its use by written
notification received by the trust, by the execution of a later-dated
proxy card, or by attending the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and which
are not revoked, will be voted at the Meeting. Shares represented by
such proxies will be voted in accordance with the instructions
thereon. If no specification is made on a proxy card, it will be voted
FOR the matters specified on the proxy card. Only proxies that are
voted will be counted toward establishing a quorum. Broker non-votes
are not considered voted for this purpose. Shareholders should note
that while votes to ABSTAIN will count toward establishing a quorum,
passage of any proposal being considered at the Meeting will occur
only if a sufficient number of votes are cast FOR the proposal.
Accordingly, votes to ABSTAIN and votes AGAINST will have the same
effect in determining whether the proposal is approved.
Advisor Municipal Bond may also arrange to have votes recorded by
telephone. D.F. King & Co., Inc. may be paid on a per-call basis for
vote-by-phone solicitations on behalf of the fund at an anticipated
cost of approximately $3,000. The expenses in connection with
telephone voting will be paid by the fund, provided the expenses do
not exceed Class A's, Class T's, Class B's, Institutional Class's or
Initial Class's expense cap of 2.15%, 2.25%, 2.90%, 2.00%, and 0.75%,
respectively. Expenses exceeding a class's expense cap, as applicable,
will be paid by FMR. If the fund records votes by telephone, it will
use procedures designed to authenticate shareholders' identities, to
allow shareholders to authorize the voting of their shares in
accordance with their instructions, and to confirm that their
instructions have been properly recorded. Proxies given by telephone
may be revoked at any time before they are voted in the same manner
that proxies voted by mail may be revoked.
If a quorum is not present at the Meeting, or if a quorum is present
at the Meeting but sufficient votes to approve one or more of the
proposed items are not received, or if other matters arise requiring
shareholder attention, the persons named as proxy agents may propose
one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of
a majority of those shares present at the Meeting or represented by
proxy. When voting on a proposed adjournment, the persons named as
proxy agents will vote FOR the proposed adjournment all shares that
they are entitled to vote with respect to each item, unless directed
to vote AGAINST the item, in which case such shares will be voted
against the proposed adjournment with respect to that item. A
shareholder vote may be taken on one or more of the items in this
Proxy Statement or on any other business properly presented at the
meeting prior to such adjournment if sufficient votes have been
received and it is otherwise appropriate.
Shares of Spartan Municipal Income Fund (Spartan Municipal Income)
and each class of Advisor Municipal Bond issued and outstanding as of
February 28, 1998 are listed below:
Spartan Municipal Income 186,642,505.965
Advisor Municipal Bond:
Class A 88,052.520
Class T 162,576.361
Class B 126,729.417
Institutional Class 122,188.922
Initial Class 108,835,634.903
Shareholders of Advisor Municipal Bond of record at the close of
business on June 8, 1998 will be entitled to vote at the Meeting.
Approval of the Reorganization will be determined by the shareholders
of each class of Advisor Municipal Bond voting in the aggregate rather
than by vote of each class separately. Each such shareholder will be
entitled to one vote for each dollar of net asset value held on that
date.
As of February 28, 1998, the Trustees, Members of the Advisory Board,
and officers of each fund owned, in the aggregate, less than 1% of
each fund's total outstanding shares. As of February 28, 1998, the
Trustees, Members of the Advisory Board, and officers of Advisor
Municipal Bond owned, in the aggregate, less than 1% of each class's
total outstanding shares. As of February 28, 1998, the following owned
of record or beneficially 5% or more of any class of Advisor Municipal
Bond's outstanding shares:
Class A of Advisor Municipal Bond: Donaldson, Lufkin & Jenrette, New
York, NY (51.92%); FMR Corp., Boston, MA (13.58%); Stephens, Inc.,
Little Rock, AR (6.23%); Walnut Street Securities, Inc., Clayton, MO
(6.08%); WRP Investments, Inc., Youngstown, OH (5.31%).
Class T of Advisor Municipal Bond: FSC Securities Corporation,
Atlanta, GA (26.52%); Secura Investments, Inc., Appleton, WI (11.58%);
FMR Corp., Boston, MA (8.20%); Transamerica Financial Resources, Los
Angeles, CA (6.03%); A.G. Edwards & Sons, St. Louis, MO (5.02%).
Class B of Advisor Municipal Bond: Prudential Securities, New York,
NY (20.64%); Merrill Lynch Pierce Fenner & Smith, Jacksonville, FL
(12.83%); FMR Corp., Boston, MA (10.33%); Dain Rauscher, Inc.,
Minneapolis, MN (10.20%); Bank One Securities Corporation, Columbus,
OH (5.37%); John Hancock Distributors, Boston, MA (5.13%).
Institutional Class of Advisor Municipal Bond: Drovers Bank, York, PA
(87.07%); FMR Corp., Boston, MA (11.53%).
To the knowledge of Fidelity Municipal Trust and Fidelity Court
Street Trust, no other shareholder owned of record or beneficially 5%
or more of the outstanding shares of Spartan Municipal Income or of
Advisor Municipal Bond or of any class of Advisor Municipal Bond on
that date. It is not anticipated that any of the above shareholders
will own of record or beneficially 5% or more of the outstanding
shares of the combined fund as a result of the Reorganization.
VOTE REQUIRED: APPROVAL OF THE REORGANIZATION REQUIRES THE AFFIRMATIVE
VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF ADVISOR
MUNICIPAL BOND. UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940
ACT), THE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES"
MEANS THE AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR MORE OF THE
VOTING SECURITIES PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF
THE HOLDERS OF MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES ARE
PRESENT OR REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED
"PRESENT" FOR THIS PURPOSE.
SYNOPSIS
The following is a summary of certain information contained elsewhere
in this Proxy Statement, in the Agreement, and in the Prospectuses of
Advisor Municipal Bond and Spartan Municipal Income, which are
incorporated herein by this reference. Shareholders should read the
entire Proxy Statement and the Prospectus of Spartan Municipal Income
carefully for more complete information.
The proposed reorganization (Reorganization) would merge Advisor
Municipal Bond into Spartan Municipal Income, a municipal bond fund
also managed by FMR. If the Reorganization is approved, Advisor
Municipal Bond will cease to exist and current Class A, Class T, Class
B, Institutional Class, and Fidelity Municipal Bond Fund (Initial
Class) shareholders of the fund will become shareholders of Spartan
Municipal Income instead. Approval of the Reorganization will be
determined by the shareholders of each class of Advisor Municipal Bond
voting in the aggregate rather than by vote of each class separately.
Both Spartan Municipal Income and Advisor Municipal Bond seek high
current income exempt from federal income tax. The funds currently
have the same portfolio manager. The funds differ primarily with
respect to their debt quality policies and the level of expenses they
incur.
The proposed merger is part of a wider strategy by Fidelity to reduce
the number of municipal bond funds it manages. Combining the funds
will allow Fidelity to consolidate its municipal bond fund product
line and potentially offer lower gross operating expenses in the
future by increasing the size of the combined fund.
SUMMARY OF INVESTMENT OBJECTIVES AND POLICIES
Advisor Municipal Bond and Spartan Municipal Income have
substantially similar investment objectives in that they both seek
high current income exempt from federal income tax. Advisor Municipal
Bond pursues its objective consistent with the preservation of
capital. Each fund may invest up to 100% of its assets in municipal
securities subject to the federal alternative minimum tax (AMT).
Both funds normally invest only in investment-grade securities and
are managed to have similar overall interest rate risk to the Lehman
Brothers Municipal Bond Index. Advisor Municipal Bond and Spartan
Municipal Income differ primarily in their debt quality policies.
Spartan Municipal Income reserves the right to invest up to 5% of
assets in below investment-grade securities, while Advisor Municipal
Bond does not reserve the right to purchase below investment-grade
securities.
EXPENSE AND LOAD STRUCTURES
Advisor Municipal Bond and Spartan Municipal Income have similar
expense structures. Each fund pays a management fee. Advisor Municipal
Bond offers five classes of shares: Class A, Class T, Class B,
Institutional Class and Initial Class. Spartan Municipal Income offers
only one class of shares. Certain classes of Advisor Municipal Bond
pay distribution fees. In addition, Spartan Municipal Income and each
class of Advisor Municipal Bond pay other expenses. The sum of the
management fee, the distribution fee (if applicable), and other
expenses is a class's or fund's gross expenses. FMR has voluntarily
agreed to reimburse the gross expenses of Class A, Class T, Class B,
Institutional Class, and Initial Class of Advisor Municipal Bond to
the extent that they exceed a voluntary expense cap applicable to that
class. As a result of a prior merger, FMR has agreed to limit Spartan
Municipal Income's total operating expenses to 0.53% of average net
assets through December 31, 1999. The funds also have different load
structures.
If the Reorganization is approved, FMR has agreed to extend Spartan
Municipal Income's current expense cap of 0.53% of average net assets
through December 31, 2000 (excluding interest, taxes, brokerage
commissions and extraordinary expenses). After that date, the combined
fund's expenses could increase.
The Reorganization would provide Advisor Municipal Bond shareholders
with a fund that has lower expenses and substantially similar
investment policies.
MANAGEMENT FEE
The funds pay management fees at the same rate. The management fee is
the same with respect to all classes of shares of Advisor Municipal
Bond and Spartan Municipal Income.
DISTRIBUTION FEES
Spartan Municipal Income and each class of Advisor Municipal Bond
have adopted Distribution and Service Plans (the Plans) pursuant to
Rule 12b-1 of the Investment Company Act of 1940.
Under the Plans, Class A, Class T, and Class B of Advisor Municipal
Bond are authorized to pay Fidelity Distributors Corporation (FDC) a
monthly distribution fee as compensation for its services and expenses
in connection with the distribution of Class A, Class T, and Class B
shares, respectively.
Class A of Advisor Municipal Bond may pay FDC a distribution fee at
an annual rate of 0.40% of its average net assets, or such lesser
amount as the Trustees may determine from time to time. Class A of
Advisor Municipal Bond currently pays a distribution fee of 0.15%.
Class T of Advisor Municipal Bond may pay FDC a distribution fee at
an annual rate of 0.40% of its average net assets, or such lesser
amount as the Trustees may determine from time to time. Class T of
Advisor Municipal Bond currently pays a distribution fee of 0.25%.
Class B of Advisor Municipal Bond may pay FDC a distribution fee at
an annual rate of 0.75% of its average net assets, or such lesser
amount as the Trustees may determine from time to time. Class B of
Advisor Municipal Bond currently pays a distribution fee of 0.65%. In
addition, Class B pays FDC a monthly service fee at an annual rate of
0.25% of Class B's average net assets.
Spartan Municipal Income and Institutional Class and Initial Class of
Advisor Municipal Bond do not pay a distribution fee.
In addition, the Plans specifically recognize that FMR may make
payments from its management fee revenue, past profits, or other
resources (not from a fund's or class's assets) to compensate
financial intermediaries (including FDC) for providing
distribution-related services for a class or fund, as applicable.
If the Reorganization is approved, investment professionals will no
longer receive fees on their client assets merged into Spartan
Municipal Income.
TOTAL OPERATING EXPENSES AND EXPENSE REIMBURSEMENT
In addition to management fees and distribution fees, there are also
other operating expenses such as legal, audit, custody, transfer
agency, dividend disbursing, and shareholder servicing expenses. Such
expenses are paid by Spartan Municipal Income or each class of Advisor
Municipal Bond.
FMR has voluntarily agreed to reimburse Class A, Class T, Class B,
Institutional Class, and Initial Class of Advisor Municipal Bond to
the extent that total operating expenses, as a percentage of their
respective net assets, exceed a voluntary expense cap (excluding
interest, taxes, brokerage commissions and extraordinary expenses).
The expense caps for Class A, Class T, Class B, Institutional Class,
and Initial Class of Advisor Municipal Bond are 2.15%, 2.25%, 2.90%,
2.00%, and 0.75%, respectively.
As noted above, FMR currently has agreed to reimburse Spartan
Municipal Income to the extent that total operating expenses exceed
0.53% of average net assets per year through December 31, 1999
(excluding interest, taxes, brokerage commissions and extraordinary
expenses).
SALES LOADS
Class A and Class T of Advisor Municipal Bond have a front-end sales
load and Class B of Advisor Municipal Bond has a contingent deferred
sales charge (CDSC). Spartan Municipal Income and Institutional Class
and Initial Class of Advisor Municipal Bond have neither a front-end
sales load nor a CDSC. Class A and Class T of Advisor Municipal Bond
have a maximum sales load of 4.75% and 3.50%, respectively. On
eligible purchases of Class A and Class T shares of Advisor Municipal
Bond in amounts of $1 million or more, investment professionals are
compensated with a finder's fee at the rate of 0.25% of the purchase
amount. Any assets on which a finder's fee has been paid will bear a
CDSC if they do not remain in Class A or Class T shares of the
Fidelity Advisor funds, or Daily Money Class shares of Treasury Fund,
Prime Fund, or Tax-Exempt Fund, for a period of at least one
uninterrupted year. Class B shares of Advisor Municipal Bond may, upon
redemption, be assessed a CDSC which declines over six years from
5.00% to 0%. After a holding period of seven years, Class B shares of
Advisor Municipal Bond will convert automatically to Class A shares of
Advisor Municipal Bond.
IMPACT OF PROPOSED REORGANIZATION ON EXPENSES
The Reorganization would provide Advisor Municipal Bond shareholders
with a fund with lower expenses (see "Shareholder Transaction and
Annual Fund Operating Expenses" beginning on page 9.). If the
Reorganization is approved, shareholders of Advisor Municipal Bond
will have the opportunity to participate in a larger fund. Increases
in fund assets have the potential to result in lower total operating
expenses.
In sum, the Reorganization would provide Advisor Municipal Bond
shareholders with a larger fund with a substantially similar
investment objective and potentially lower gross expenses. A reduction
in gross expenses resulting from growth in fund size ultimately
benefits shareholders of Advisor Municipal Bond because it increases
the likelihood that FMR will maintain Spartan Municipal Income's
expense cap at its current level or that the expenses will fall below
the fund's current expense cap level. If the Reorganization is not
approved, FMR may not be willing to maintain the voluntary expense
caps on Class A, Class T, Class B, Institutional Class, and Initial
Class of Advisor Municipal Bond. Also, the combined fund's expenses
would be limited to 0.53% of average net assets through December 31,
2000 (excluding interest, taxes, brokerage commissions, and
extraordinary expenses).
The Boards of Trustees believe that the Reorganization would benefit
Advisor Municipal Bond shareholders and recommend that shareholders
vote in favor of the Reorganization.
THE PROPOSED REORGANIZATION
Shareholders of Advisor Municipal Bond will be asked at the Meeting
to vote upon and approve the Reorganization and the Agreement, which
provide for the acquisition by Spartan Municipal Income of all of the
assets of Advisor Municipal Bond in exchange solely for shares of
Spartan Municipal Income and the assumption by Spartan Municipal
Income of the liabilities of Advisor Municipal Bond. Advisor Municipal
Bond will then distribute the shares of Spartan Municipal Income to
shareholders of each class of Advisor Municipal Bond, so that each
shareholder will receive the number of full and fractional shares of
Spartan Municipal Income equal in value to the net asset value of the
shareholder's shares of their respective class of Advisor Municipal
Bond on the Closing Date (defined below). The exchange of Advisor
Municipal Bond's assets for Spartan Municipal Income's shares will
occur as of the close of business of the New York Stock Exchange
(NYSE) on September 10, 1998, or such other time and date as the
parties may agree (the Closing Date). Shareholders of Class A, Class
T, Class B, Institutional Class, and Initial Class of Advisor
Municipal Bond will receive shares of Spartan Municipal Income equal
in value to the shares of Advisor Municipal Bond they are
surrendering, based upon the relative net asset values of each class
of Advisor Municipal Bond to Spartan Municipal Income, respectively,
as of the Closing Date. Advisor Municipal Bond will then be liquidated
as soon as practicable thereafter. Approval of the Reorganization will
be determined by the shareholders of each class of Advisor Municipal
Bond voting in the aggregate rather than by vote of each class
separately.
The funds have received an opinion of counsel that, except with
respect to Section 1256 contracts, the Reorganization will not result
in any gain or loss for federal income tax purposes either to Advisor
Municipal Bond or Spartan Municipal Income or to the shareholders of
either fund. The rights and privileges of the former shareholders of
Advisor Municipal Bond will be effectively unchanged by the
Reorganization.
COMPARATIVE FEE TABLES
Each fund pays a management fee to FMR for managing its investments
and business affairs which is calculated and paid to FMR every month.
Each fund's management fee is calculated by adding a group fee rate to
an individual fund fee rate, multiplying the result by each fund's
monthly average net assets, and dividing by twelve. The group fee rate
is based on the average net assets of all mutual funds advised by FMR.
In addition to the management fee payable by the funds, each class or
fund also incurs other expenses for services such as maintaining
shareholder records and furnishing shareholder statements and
financial reports.
The following tables beginning on page 10 show (i) the shareholder
transaction expenses that each shareholder of each class of Advisor
Municipal Bond and that each shareholder of Spartan Municipal Income
currently incurs, and the shareholder transaction expenses that
shareholders of the combined fund will incur after giving effect to
the Reorganization, (ii) the current fees and expenses of Class A,
Class T, Class B, Institutional Class and Initial Class of Advisor
Municipal Bond and of Spartan Municipal Income for the 12 months ended
November 30, 1997, and pro forma fees for the combined fund based on
the same time period after giving effect to the Reorganization,
including the effect of FMR's voluntary expense limitation for the
combined fund of 0.53% of average net assets (excluding interest,
taxes, brokerage commissions and extraordinary expenses), and (iii)
the current fees and expenses of Class A, Class T, Class B,
Institutional Class and Initial Class of Advisor Municipal Bond and of
Spartan Municipal Income for the 12 months ended November 30, 1997,
and pro forma fees for the combined fund based on the same time period
after giving effect to the Reorganization, excluding the effect of
FMR's voluntary expense limitation for Class A, Class T, Class B,
Institutional Class, and Initial Class of Advisor Municipal Bond and
for Spartan Municipal Income. Net expenses include the effect of any
applicable voluntary expense limitation and gross expenses do not
include the effect of any applicable voluntary expense limitation. For
more information about the funds' current fees, refer to their
prospectuses.
SHAREHOLDER TRANSACTION AND ANNUAL FUND OPERATING EXPENSES
Shareholder transaction expenses are charges that shareholders may
pay when they buy or sell shares of a fund.
Annual fund operating expenses are paid out of each fund's assets.
Expenses are factored into a class's or fund's, as applicable, share
price or dividends and are not charged directly to shareholder
accounts. The following figures are based on historical expenses,
adjusted to reflect current fees, of each class or fund, as
applicable, and are calculated as a percentage of average net assets
of each class or fund, as applicable.
CLASS A
Advisor Spartan
Municipal Municipal Combined
Bond Income Fund
Maximum sales charge on
purchases (as a % of offering 4.75% none none
price)
Maximum CDSC (as a % of the
lesser of original purchase price
or redemption proceeds) none[A] none none
Annual account maintenance fee
(for accounts under $2,500) $12.00 $12.00 $12.00
Advisor Spartan Combined
Municipal Bond Municipal Fund
Net Expenses* Income Net Expenses
Net Expenses
Management fee 0.39% 0.37% 0.37%
(after reimbursement)
12b-1 fee 0.15% none none
Other Expenses 1.61% 0.16% 0.16%
(after reimbursement)
TOTAL OPERATING EXPENSES 2.15% 0.53% 0.53%
Advisor Spartan Combined
Municipal Bond Municipal Fund
Gross Expenses* Income Gross Gross Expenses
Expenses
Management fee 0.39% 0.39% 0.39%
12b-1 fee 0.15% none none
Other Expenses 2.81% 0.16% 0.16%
TOTAL OPERATING EXPENSES 3.35% 0.55% 0.55%
* ESTIMATED
CLASS T
Advisor Spartan
Municipal Municipal Combined
Bond Income Fund
Maximum sales charge on
purchases (as a % of offering 3.50% none none
price)
Maximum CDSC (as a % of the
lesser of original purchase price
or redemption proceeds) none[A] none none
Annual account maintenance fee
(for accounts under $2,500) $12.00 $12.00 $12.00
Advisor Spartan Combined
Municipal Bond Municipal Fund
Net Expenses Income Net Expenses
Net Expenses
Management fee 0.39% 0.37% 0.37%
(after reimbursement)
12b-1 fee 0.25% none none
Other Expenses 0.71% 0.16% 0.16%
(after reimbursement)
TOTAL OPERATING EXPENSES 1.35% 0.53% 0.53%
Advisor Spartan Combined
Municipal Bond Municipal Fund
Gross Expenses Income Gross Expenses
Gross Expenses
Management fee 0.39% 0.39% 0.39%
12b-1 fee 0.25% none none
Other Expenses 0.71% 0.16% 0.16%
TOTAL OPERATING EXPENSES 1.35% 0.55% 0.55%
CLASS B
Advisor Spartan
Municipal Municipal Combined
Bond Income Fund
Maximum sales charge on
purchases (as a % of offering none none none
price)
Maximum CDSC (as a % of the
lesser of original purchase price
or redemption proceeds) 5.00%[B] none none
Annual account maintenance fee
(for accounts under $2,500) $12.00 $12.00 $12.00
Advisor Spartan Combined
Municipal Bond Municipal Fund
Net Expenses Income Net Expenses
Net Expenses
Management fee 0.39% 0.37% 0.37%
(after reimbursement)
12b-1 fee (including 0.25% 0.90% none none
shareholder service fee)
Other Expenses 1.61% 0.16% 0.16%
(after reimbursement)
TOTAL OPERATING EXPENSES 2.90% 0.53% 0.53%
Advisor Spartan Combined
Municipal Bond Municipal Fund
Gross Expenses Income Gross Expenses
Gross Expenses
Management fee 0.39% 0.39% 0.39%
12b-1 fee (including 0.25% 0.90% none none
shareholder service fee)
Other Expenses 2.97% 0.16% 0.16%
TOTAL OPERATING EXPENSES 4.26% 0.55% 0.55%
INSTITUTIONAL CLASS
Advisor Spartan
Municipal Municipal Combined
Bond Income Fund
Maximum sales charge on
purchases (as a % of offering none none none
price)
Maximum CDSC (as a % of the
lesser of original purchase price
or redemption proceeds) none none none
Annual account maintenance fee
(for accounts under $2,500) $12.00 $12.00 $12.00
Advisor Spartan Combined
Municipal Bond Municipal Fund
Net Expenses Income Net Expenses
Net Expenses
Management fee 0.39% 0.37% 0.37%
(after reimbursement)
12b-1 fee none none none
Other Expenses 1.61% 0.16% 0.16%
(after reimbursement)
TOTAL OPERATING EXPENSES 2.00% 0.53% 0.53%
Advisor Spartan Combined
Municipal Bond Municipal Fund
Gross Expenses Income Gross Expenses
Gross Expenses
Management fee 0.39% 0.39% 0.39%
12b-1 fee none none none
Other Expenses 3.30% 0.16% 0.16%
TOTAL OPERATING EXPENSES 3.69% 0.55% 0.55%
INITIAL CLASS
Advisor Spartan
Municipal Municipal Combined
Bond Income Fund
Maximum sales charge on
purchases (as a % of offering none none none
price)
Maximum CDSC (as a % of the
lesser of original purchase price
or redemption proceeds) none none none
Annual account maintenance fee
(for accounts under $2,500) $12.00 $12.00 $12.00
Advisor Spartan Combined
Municipal Bond Municipal Fund
Net Expenses Income Net Expenses
Net Expenses
Management fee 0.39% 0.37% 0.37%
(after reimbursement)
12b-1 fee none none none
Other Expenses 0.16% 0.16% 0.16%
(after reimbursement)
TOTAL OPERATING EXPENSES 0.55% 0.53% 0.53%
Advisor Spartan Combined
Municipal Bond Municipal Fund
Gross Expenses Income Gross Expenses
Gross Expenses
Management fee 0.39% 0.39% 0.39%
12b-1 fee none none none
Other Expenses 0.16% 0.16% 0.16%
TOTAL OPERATING EXPENSES 0.55% 0.55% 0.55%
[A] A CDSC OF 0.25% IS ASSESSED ON CERTAIN REDEMPTIONS OF CLASS A AND
CLASS T SHARES ON WHICH A FINDER'S FEE WAS PAID.
[B] DECLINES OVER 6 YEARS FROM 5.00% TO 0%.
Expenses eligible for reimbursement do not include interest, taxes,
brokerage commissions, and extraordinary expenses.
EXAMPLES OF EFFECT OF FUND EXPENSES
The following table illustrates the expenses on a hypothetical $1,000
investment in each class or fund, as applicable, under the current and
pro forma (combined fund) expenses calculated at the rates stated
above, assuming a 5% annual return and full redemption at the end of
each time period. Total expenses shown below include shareholder
transaction expenses, such as the current maximum front-end sales
charge on Class A shares of Advisor Municipal Bond, and a class's or
fund's annual operating expenses, as applicable.
After 1 After 3 After 5 After 10
Year Years Years Years
Advisor Municipal Bond:
Class A $68 $112 $157 $284
Class T $48 $76 $106 $192
Class B $79[A] $120[A] $173[A] $296[B]
Institutional Class $20 $63 $108 $233
Initial Class $6 $18 $31 $69
Spartan Municipal Income $5 $17 $30 $66
Combined Fund $5 $17 $30 $66
[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
[B] REFLECTS CONVERSION OF CLASS B SHARES TO CLASS A SHARES AFTER
SEVEN YEARS.
These examples assume that all dividends and other distributions are
reinvested and that the percentage amounts listed under Annual Fund
Operating Expenses remain the same in the years shown. These examples
illustrate the effect of expenses, but are not meant to suggest actual
or expected expenses, which may vary. The assumed return of 5% is not
a prediction of, and does not represent, actual or expected
performance of any class or fund, as applicable.
FORMS OF ORGANIZATION
Advisor Municipal Bond is a diversified fund of Fidelity Municipal
Trust, an open-end management investment company organized as a
Massachusetts business trust on June 22, 1984. Spartan Municipal
Income is a diversified fund of Fidelity Court Street Trust, an
open-end management investment company organized as a Massachusetts
business trust on April 21, 1977. The trusts are authorized to issue
an unlimited number of shares of beneficial interest. Because the
funds are series of Massachusetts business trusts, organized under
substantially similar Declarations of Trust, the rights of the
security holders of Advisor Municipal Bond under state law and the
governing documents are expected to remain unchanged after the
Reorganization. For more information regarding shareholder rights,
refer to the section of each fund's Statement of Additional
Information called "Description of the Trust."
INVESTMENT OBJECTIVES AND POLICIES
The funds have similar investment objectives and policies in that
both seek high current income exempt from federal income tax by
investing in investment-grade municipal securities under normal
conditions. As a matter of fundamental policy, Advisor Municipal Bond
seeks this objective in a manner consistent with the preservation of
capital. As a matter of fundamental policy, Advisor Municipal Bond
will normally invest at least 80% of its assets in municipal
securities whose interest is exempt from federal income tax. As a
matter of fundamental policy, Spartan Municipal Income will normally
invest so that at least 80% of its income is exempt from federal
income tax.
The benchmark index for Spartan Municipal Income and Advisor
Municipal Bond (including all five classes) is the Lehman Brothers
Municipal Bond Index (the Index), a benchmark of investment-grade
municipal bonds with maturities of one year or more. FMR manages both
funds to have similar overall interest rate risk to the index. As of
December 31, 1997, Advisor Municipal Bond's, Spartan Municipal
Income's, and the Index's average maturities were 11.3 years, 12.5
years, and 14.0 years, respectively.
As a matter of fundamental policy, Advisor Municipal Bond invests
only in investment-grade securities. Spartan Municipal Income normally
invests only in investment-grade securities, but reserves the right to
invest up to 5% of its assets in below investment-grade securities.
These policies and limitations are considered at the time of purchase;
the sale of instruments is not required in the event of a subsequent
change in circumstances. As of December 31, 1997, Spartan Municipal
Income and Advisor Municipal Bond held less than 0.1% and 0.7% of
assets, respectively, in below investment-grade securities.
FMR may invest all of each fund's assets in municipal securities
issued to finance private activities. The interest from these
securities is a tax-preference item for purposes of the AMT. As of
December 31, 1997, approximately 1.42% of Advisor Municipal Bond's and
16.54% of Spartan Municipal Income's income dividends were subject to
the AMT.
The investment objective of each fund is fundamental and may not be
changed without the approval of a vote of at least a majority of the
outstanding voting securities of the fund. There can be no assurance
that either fund will achieve its objective. With the exception of
fundamental policies, investment policies of the funds can be changed
without shareholder approval. The differences between the funds
discussed above, except as noted, could be changed without a vote of
shareholders.
PERFORMANCE COMPARISONS OF THE FUNDS
Spartan Municipal Income and Advisor Municipal Bond have experienced
similar performance, as shown in the tables below. Any differential in
performance can be attributed primarily to historical differences in
the funds' portfolio holdings.
The following table compares the year-by-year total returns and
cumulative total returns for Spartan Municipal Income and the Initial
Class of Advisor Municipal Bond for the periods indicated. As the
oldest class of shares offered and the class with the largest asset
base, Initial Class was chosen to represent performance. Please note
that total returns are based on past results and are not an indication
of future performance.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Year-by-Year Total Return (periods ended December 31)
CALENDAR YEARS 1993 1994 1995 1996 1997
Spartan Municipal Income 13.11% -7.45% 16.18% 4.94% 9.23%
Advisor Municipal Bond: 13.17% -8.49% 18.15% 4.12% 9.20%
Initial Class
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cumulative Total Return (periods ended December 31, 1997)
1 Yr. 5 Yr. 10 Yr.
Spartan Municipal Income 9.23% 39.41% 125.69%
Advisor Municipal Bond: Initial Class 9.20% 39.12% 123.09%
</TABLE>
* IF FMR HAD NOT REIMBURSED CERTAIN EXPENSES, TOTAL RETURNS WOULD HAVE
BEEN LOWER.
The following graph shows the value of a hypothetical $10,000
investment in Spartan Municipal Income and Initial Class of Advisor
Municipal Bond made on December 31, 1987 through December 31, 1997,
assuming all distributions are reinvested. The graph compares the
cumulative total return of Spartan Municipal Income to the cumulative
total return of Initial Class of Advisor Municipal Bond during this
period.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fidelity Advisor Municipal Spartan Municipal
Bond Fund (035) Income Fund (037)
Period Ending
Dec-87 10,000.00 10,000.00
Jan-88 10,507.75 10,348.01
Feb-88 10,607.78 10,478.08
Mar-88 10,351.09 10,228.49
Apr-88 10,386.45 10,303.35
May-88 10,422.20 10,378.06
Jun-88 10,619.61 10,502.24
Jul-88 10,696.25 10,610.99
Aug-88 10,719.82 10,659.93
Sep-88 10,935.48 10,894.45
Oct-88 11,180.89 11,103.82
Nov-88 11,051.57 11,010.13
Dec-88 11,230.32 11,222.31
Jan-89 11,394.77 11,380.63
Feb-89 11,276.96 11,311.78
Mar-89 11,273.04 11,335.09
Apr-89 11,598.36 11,700.85
May-89 11,824.99 11,948.36
Jun-89 11,993.73 12,064.47
Jul-89 12,105.48 12,152.40
Aug-89 11,997.50 12,098.48
Sep-89 11,950.78 12,046.84
Oct-89 12,091.82 12,172.99
Nov-89 12,249.29 12,397.81
Dec-89 12,304.38 12,500.89
Jan-90 12,234.51 12,369.17
Feb-90 12,347.75 12,531.12
Mar-90 12,358.59 12,545.30
Apr-90 12,196.00 12,319.63
May-90 12,529.30 12,659.56
Jun-90 12,661.33 12,794.76
Jul-90 12,856.47 12,992.83
Aug-90 12,612.61 12,857.68
Sep-90 12,684.79 12,954.68
Oct-90 12,836.03 13,126.87
Nov-90 13,081.54 13,502.14
Dec-90 13,154.66 13,560.22
Jan-91 13,307.89 13,736.84
Feb-91 13,377.33 13,822.82
Mar-91 13,400.90 13,867.30
Apr-91 13,588.11 14,057.02
May-91 13,692.62 14,180.83
Jun-91 13,698.38 14,181.58
Jul-91 13,888.53 14,387.60
Aug-91 14,063.80 14,514.70
Sep-91 14,223.09 14,630.71
Oct-91 14,365.18 14,768.27
Nov-91 14,404.18 14,800.51
Dec-91 14,721.59 14,940.20
Jan-92 14,728.25 15,093.56
Feb-92 14,750.15 15,124.45
Mar-92 14,743.00 15,139.27
Apr-92 14,890.37 15,284.03
May-92 15,075.64 15,430.72
Jun-92 15,346.38 15,644.69
Jul-92 15,817.88 16,046.06
Aug-92 15,589.98 15,832.49
Sep-92 15,684.25 15,875.00
Oct-92 15,363.52 15,610.68
Nov-92 15,823.95 16,015.79
Dec-92 16,036.06 16,189.21
Jan-93 16,248.63 16,415.78
Feb-93 16,910.15 17,019.92
Mar-93 16,683.18 16,896.62
Apr-93 16,875.47 17,057.34
May-93 16,975.54 17,156.34
Jun-93 17,285.21 17,408.81
Jul-93 17,249.41 17,414.86
Aug-93 17,702.66 17,793.27
Sep-93 17,919.43 18,050.60
Oct-93 17,920.59 18,069.61
Nov-93 17,701.23 17,924.16
Dec-93 18,148.19 18,311.67
Jan-94 18,375.12 18,513.06
Feb-94 17,819.94 18,041.46
Mar-94 16,911.94 17,206.71
Apr-94 16,991.26 17,296.10
May-94 17,159.31 17,403.90
Jun-94 17,024.57 17,305.40
Jul-94 17,386.14 17,631.99
Aug-94 17,425.41 17,696.03
Sep-94 17,050.60 17,433.14
Oct-94 16,612.37 17,069.00
Nov-94 16,146.08 16,536.45
Dec-94 16,607.47 16,947.58
Jan-95 17,163.91 17,525.32
Feb-95 17,735.94 18,032.50
Mar-95 17,932.25 18,079.75
Apr-95 17,920.28 18,088.80
May-95 18,505.24 18,652.98
Jun-95 18,328.26 18,365.91
Jul-95 18,477.31 18,498.85
Aug-95 18,718.99 18,725.38
Sep-95 18,841.23 18,869.86
Oct-95 19,106.10 19,141.22
Nov-95 19,440.11 19,503.96
Dec-95 19,622.16 19,689.54
Jan-96 19,773.53 19,852.59
Feb-96 19,636.73 19,770.24
Mar-96 19,383.17 19,516.99
Apr-96 19,296.31 19,437.56
May-96 19,284.54 19,442.71
Jun-96 19,463.41 19,672.69
Jul-96 19,641.60 19,857.91
Aug-96 19,622.84 19,862.96
Sep-96 19,874.31 20,096.01
Oct-96 20,133.56 20,332.88
Nov-96 20,515.47 20,749.84
Dec-96 20,429.99 20,663.11
Jan-97 20,490.16 20,683.25
Feb-97 20,667.01 20,862.51
Mar-97 20,400.35 20,592.26
Apr-97 20,535.30 20,762.80
May-97 20,826.19 21,056.59
Jun-97 21,063.66 21,314.55
Jul-97 21,687.79 21,921.07
Aug-97 21,441.62 21,698.26
Sep-97 21,706.79 21,958.91
Oct-97 21,846.95 22,084.17
Nov-97 21,957.54 22,206.25
Dec-97 22,308.96 22,569.42
</TABLE>
COMPARISON OF OTHER POLICIES OF THE FUNDS
DIVERSIFICATION. Advisor Municipal Bond and Spartan Municipal Income
have similar diversification policies. Each fund is a diversified
fund. As a matter of fundamental policy, each fund, with respect to
75% of total assets, may not purchase a security if, as a result, more
than 5% would be invested in the securities of any one issuer. This
limitation does not apply to U.S. Government securities.
OTHER INVESTMENT POLICIES. Each fund may borrow from banks or other
funds advised by FMR, or through reverse repurchase agreements. As a
matter of fundamental policy, each fund may borrow only for temporary
or emergency purposes, but not in an amount exceeding 33 1/3% of its
total assets.
FMR normally invests each fund's assets according to its investment
strategy and does not expect to invest in federally taxable
obligations. However, each fund reserves the right to invest without
limitation in short-term instruments, to hold a substantial amount of
uninvested cash, or to invest more than normally permitted in
federally taxable obligations for temporary, defensive purposes. Each
fund may also enter into when-issued and forward purchase or sale
transactions, invest in asset-backed securities, variable and floating
rate securities, municipal lease obligations, securities with put
features, private entity securities, and illiquid and restricted
securities. Both funds have identical investment policies regarding
issuing senior securities, underwriting, concentration, real estate,
commodities, and securities lending.
As stated above, for more information about the risks and
restrictions associated with these policies, see each fund's
Prospectus, and for a more detailed discussion of the funds'
investments, see their Statements of Additional Information, which are
incorporated herein by reference.
OPERATIONS OF SPARTAN MUNICIPAL INCOME FOLLOWING THE REORGANIZATION
FMR does not expect Spartan Municipal Income to revise its investment
policies as a result of the Reorganization. In addition, FMR does not
anticipate significant changes to the fund's management or to agents
that provide the fund with services. Specifically, the Trustees and
officers, the investment adviser, distributor, and other agents will
continue to serve Spartan Municipal Income in their current
capacities. George Fischer, who is currently the portfolio manager of
Spartan Municipal Income and Advisor Municipal Bond, is expected to
continue to be responsible for portfolio management of the surviving
fund after the Reorganization.
All of the current investments of Advisor Municipal Bond are
permissible investments for Spartan Municipal Income. However, if the
Reorganization is approved, portfolio adjustments may be required to
more closely align the funds' portfolios. Transaction costs associated
with such adjustments due to the Reorganization that occur between
shareholder approval and the Closing Date will be borne by the fund
that incurred them. Transaction costs associated with such adjustments
that occur after the Closing Date will be borne by Spartan Municipal
Income. The funds may recognize a taxable gain or loss on the
disposition of securities pursuant to these portfolio adjustments. See
the section entitled "Reasons for the Reorganization" on page 27.
PURCHASES AND REDEMPTIONS
Except for the differences in sales charges across classes of Advisor
Municipal Bond, the purchase policies for both funds are substantially
similar. The redemption policies for both funds are also similar, with
the exception of Class B of Advisor Municipal Bond. Shareholders of
Class B of Advisor Municipal Bond may, upon redemption, be assessed a
CDSC which declines over six years from 5.00% to 0%. For Advisor
Municipal Bond Class A or Class T purchases in the amount of $1
million or more, investment professionals will be compensated with a
finder's fee at the rate of 0.25% of the purchase amount. Any assets
on which a finder's fee was paid will bear a CDSC of 0.25% of the
purchase amount if they do not remain in Class A or Class T shares of
Fidelity Advisor funds, or Daily Money Class shares of Treasury Fund,
Prime Fund, and Tax-Exempt Fund, for a period of at least one
uninterrupted year. For more information about the CDSC of Class B,
Class A, or Class T, refer to the classes' prospectus.
Class A, Class T, Class B, and Institutional Class of Advisor
Municipal Bond do not offer checkwriting, while Spartan Municipal
Income and Initial Class of Advisor Municipal Bond offer checkwriting.
For Spartan Municipal Income, the minimum amount for a check is
$1,000. For Initial Class of Advisor Municipal Bond, the minimum
amount for a check is $500. If the Reorganization is approved,
existing shareholders of Initial Class of Advisor Municipal Bond will
maintain their current minimum amount for a check of $500.
Class A, Class T, Class B, and Institutional Class of Advisor
Municipal Bond currently require a minimum balance of $1,000, Initial
Class of Advisor Municipal Bond requires a minimum balance of $2,000,
and all classes of Advisor Municipal Bond require a minimum additional
investment of $250. Spartan Municipal Income requires a minimum
balance of $5,000 and a minimum additional investment of $1,000. If
the Reorganization is approved, existing shareholders of each class of
Advisor Municipal Bond will maintain their current minimum balance and
additional investment requirements.
The price to buy one share of Class A or Class T of Advisor Municipal
Bond is the class's offering price or the class's net asset value per
share (NAV), depending on whether you pay a front-end sales charge.
The price to buy one share of Class B, Institutional Class, or Initial
Class of Advisor Municipal Bond is the class's NAV. Your shares are
purchased at the next NAV or offering price, as applicable, calculated
after your order is received in proper form. Each class's offering
price or NAV, as applicable, is normally calculated each business day
at 4:00 p.m. Eastern time. Refer to each class's Prospectus for more
information regarding how to buy shares.
The price to buy one share of Spartan Municipal Income is the fund's
NAV. Your shares are purchased at the next NAV, calculated after your
order is received in proper form. The fund's NAV is normally
calculated each business day at 4:00 p.m. Eastern time. Refer to the
fund's Prospectus for more information regarding how to buy shares.
The price to sell one share of each class of Advisor Municipal Bond
is the class's NAV, minus any applicable CDSC. Your shares will be
sold at the next NAV, minus any applicable CDSC, calculated after your
order is received in proper form, normally each business day at 4:00
p.m. Eastern time.
For Class A, Class T, Class B, and Institutional Class of Advisor
Municipal Bond, it is the responsibility of your investment
professional to transmit your order to buy or sell shares to Fidelity
before the close of business on the day you place your order.
The price to sell one share of Spartan Municipal Income is the fund's
NAV. Your shares will be sold at the next NAV calculated after your
order is received in proper form, normally each business day at 4:00
p.m. Eastern time.
Effective November 1, 1997, Class A, Class T, Class B, and
Institutional Class of Advisor Municipal Bond were closed to all
investments, except for investments through the Fidelity sponsored
TARGETS Program, which were allowed through December 31, 1997. Initial
Class of Advisor Municipal Bond is closed to new accounts but open to
additional purchases by existing shareholders. Shareholders of each
class of Advisor Municipal Bond may redeem shares through the Closing
Date. If the Reorganization is approved, the combined fund will retain
the purchase and redemption policies of Spartan Municipal Income after
the Reorganization.
EXCHANGES
The exchange privileges currently offered by Spartan Municipal Income
and each class of Advisor Municipal Bond are different. Class A and
Class T shares of Advisor Municipal Bond may be exchanged for the same
class of shares of other Fidelity Advisor funds or Daily Money Class
shares of Treasury Fund, Prime Fund, and Tax-Exempt Fund. If Class T
shares of Advisor Municipal Bond were purchased through certain
investment professionals that have signed an agreement with FDC, those
shareholders also have the privilege of exchanging Class T shares for
shares of Fidelity Capital Appreciation Fund. Class B shares of
Advisor Municipal Bond may be exchanged for Class B shares of other
Fidelity Advisor funds or Advisor B Class shares of Treasury Fund.
Institutional Class shares of Advisor Municipal Bond may be exchanged
for Institutional Class shares of other Fidelity Advisor funds or
shares of other Fidelity funds. For Initial Class of Advisor Municipal
Bond, shareholders may exchange their shares for Institutional Class
shares of Advisor Municipal Bond or shares of any other Fidelity fund.
Spartan Municipal Income shareholders may exchange their shares for
shares of any other Fidelity fund. Shareholders of each class of
Advisor Municipal Bond and shareholders of Spartan Municipal Income
may exchange only into a class or fund, as applicable, that is
available for sale in the shareholder's state. Exchanges out of a fund
are limited to four per calendar year. Neither fund currently imposes
a redemption fee. For purchases of (i) Advisor Municipal Bond Class A
shares in the amounts of $1 million or more that qualify for a Class A
load waiver, (ii) Class A shares in the amounts of $25 million or
more, or (iii) Class T shares in the amount of $1 million or more,
investment professionals will be compensated with a finder's fee at
the rate of 0.25% of the purchase amount. Any assets on which a
finder's fee was paid will bear a CDSC if they do not remain in Class
A or Class T shares of Fidelity Advisor funds, or Daily Money Class
shares of Treasury Fund, Prime Fund, and Tax-Exempt Fund, for a period
of at least one uninterrupted year. When exchanging Class B shares of
Advisor Municipal Bond for Class B shares of another Fidelity Advisor
fund or Advisor B Class shares of Treasury Fund, your Class B shares
retain the CDSC schedule in effect at the time of original purchase.
If the Reorganization is approved, the combined fund will retain
Spartan Municipal Income's exchange privilege after the
Reorganization, and shareholders of Class A, Class T, Class B, and
Institutional Class will no longer have the ability to exchange their
shares for shares of another Advisor fund.
DIVIDENDS AND OTHER DISTRIBUTIONS
Each fund distributes substantially all of its net investment income
and capital gains to shareholders each year. Each fund declares income
dividends daily and pays them monthly. Each class of Advisor Municipal
Bond normally distributes capital gains in February and December.
Spartan Municipal Income normally distributes capital gains in January
and December. On or before the Closing Date, Advisor Municipal Bond
may declare additional dividends or other distributions in order to
distribute substantially all of its investment company taxable income
and net realized capital gain.
Advisor Municipal Bond will be required to recognize gain or loss on
Section 1256 contracts held by the individual fund on the last day of
its taxable year which is December 31. If the Reorganization is
approved, gains or losses of Section 1256 contracts held on the
Closing Date will be recognized on the Closing Date.
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION
Each fund has received an opinion of its counsel, Kirkpatrick &
Lockhart LLP, that the Reorganization will constitute a tax-free
reorganization within the meaning of Section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the Code). Accordingly,
except with respect to Section 1256 contracts, no gain or loss will be
recognized by the funds or their shareholders as a result of the
Reorganziation. Please see the section entitled "Federal Income Tax
Considerations" for more information.
As of December 31, 1997, Advisor Municipal Bond had a capital loss
carryforward for federal income tax purposes of approximately
$8,535,000. As of November 30, 1997, Spartan Municipal Income had a
capital loss carryforward for federal income tax purposes of
approximately $15,508,000. Under current federal income tax law,
Spartan Municipal Income may be limited to using only a portion, if
any, of its capital loss carryforward or the capital loss carryforward
transferred by Advisor Municipal Bond at the time of the
Reorganization ("capital loss carryforward"). There is no assurance
that Spartan Municipal Income will be able to realize sufficient
capital gains to use the capital loss carryforward before it expires.
The capital loss carryforward attributable to Advisor Municipal Bond
will expire on November 30, 2002. The capital loss carryforward
attributable to Spartan Municipal Income will expire between November
30, 2000 and November 30, 2002.
COMPARISON OF PRINCIPAL RISK FACTORS
Each fund is subject to the risks normally associated with bond
funds. As described more fully above, the funds have similar
investment objectives, policies, and permissible investments. The
principal risk factor associated with the funds is set forth below.
INVESTMENT STRATEGY. Advisor Municipal Bond, as a matter of
fundamental policy, invests in only investment-grade municipal
securities. Spartan Municipal Income currently intends to invest only
in investment-grade securities but has the ability to invest up to 5%
of its assets in below investment-grade securities. Although below
investment-grade securities may provide the potential for significant
price appreciation, it is important to note that they are considered
to have speculative characteristics and involve greater risk of
default or price changes due to changes in the issuer's
creditworthiness or that such securities may already be in default.
The market prices of these securities may fluctuate more than
higher-quality securities and may decline significantly in periods of
general or regional economic activity.
THE PROPOSED TRANSACTION
1. TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN ADVISOR
MUNICIPAL BOND AND SPARTAN MUNICIPAL INCOME.
REORGANIZATION PLAN
The terms and conditions under which the proposed transaction may be
consummated are set forth in the Agreement. Significant provisions of
the Agreement are summarized below; however, this summary is qualified
in its entirety by reference to the Agreement, a copy of which is
attached at Exhibit 1 to this Proxy Statement.
The Agreement contemplates (a) Spartan Municipal Income acquiring as
of the Closing Date all of the assets of Advisor Municipal Bond in
exchange solely for shares of Spartan Municipal Income based on the
net asset value attributable to Class A, Class T, Class B,
Institutional Class, and Fidelity Municipal Bond Fund (Initial Class)
of Advisor Municipal Bond and the assumption by Spartan Municipal
Income of Advisor Municipal Bond's liabilities; and (b) the
distribution of shares of Spartan Municipal Income to shareholders of
each class of Advisor Municipal Bond as provided for in the Agreement.
The assets of Advisor Municipal Bond to be acquired by Spartan
Municipal Income include all cash, cash equivalents, securities,
receivables (including interest or dividends receivables), claims,
choses in action, and other property owned by Advisor Municipal Bond,
and any deferred or prepaid expenses shown as an asset on the books of
Advisor Municipal Bond on the Closing Date. Spartan Municipal Income
will assume from Advisor Municipal Bond all liabilities, debts,
obligations, and duties of Advisor Municipal Bond of whatever kind or
nature, whether absolute, accrued, contingent, or otherwise, whether
or not arising in the ordinary course of business, whether or not
determinable on the Closing Date, and whether or not specifically
referred to in the Agreement; provided, however, that Advisor
Municipal Bond will use its best efforts, to the extent practicable,
to discharge all of its known liabilities prior to the Closing Date,
other than liabilities incurred in the ordinary course of business.
Spartan Municipal Income also will deliver to Advisor Municipal Bond
the number of full and fractional shares of Spartan Municipal Income
having a net asset value equal to the value of the net assets of each
class of Advisor Municipal Bond less the liabilities of Advisor
Municipal Bond as of the Closing Date.
The value of Advisor Municipal Bond's assets to be acquired by
Spartan Municipal Income and the amount of its liabilities to be
assumed by Spartan Municipal Income will be determined as of the close
of business of the NYSE on the Closing Date, using the valuation
procedures set forth in the then-current or last effective Prospectus
and Statement of Additional Information of each class of Advisor
Municipal Bond. The net asset value of a share of Spartan Municipal
Income will be determined as of the same time using the valuation
procedures set forth in its then-current Prospectus and Statement of
Additional Information.
As of the Closing Date, Advisor Municipal Bond will distribute to its
shareholders of record the shares of Spartan Municipal Income it
received, so that shareholders of each class of Advisor Municipal Bond
will receive the number of full and fractional shares of Spartan
Municipal Income equal in value to the net asset value of shares of
each class of Advisor Municipal Bond held by such shareholder on the
Closing Date; Advisor Municipal Bond will be liquidated as soon as
practicable thereafter. Such distribution will be accomplished by
opening accounts on the books of Spartan Municipal Income in the names
of the Advisor Municipal Bond shareholders and by transferring thereto
shares of Spartan Municipal Income. Shareholders of Class A, Class T,
Class B, Institutional Class, and Initial Class of Advisor Municipal
Bond will receive shares of Spartan Municipal Income equal in value to
the shares of Advisor Municipal Bond they are surrendering, based upon
the relative net asset values of each of Class A, Class T, Class B,
Institutional Class and Initial Class of Advisor Municipal Bond to
Spartan Municipal Income, respectively, as of the Closing Date. Each
Advisor Municipal Bond shareholder's account shall be credited with
the respective number of full and fractional shares (rounded to the
third decimal place) of Spartan Municipal Income due that shareholder.
Spartan Municipal Income shall not issue certificates representing its
shares in connection with such exchange.
Accordingly, immediately after the Reorganization, each former
Advisor Municipal Bond Class A, Class T, Class B, Institutional Class
and Initial Class shareholder will own shares of Spartan Municipal
Income equal to the net asset value of that shareholder's shares of
Class A, Class T, Class B, Institutional Class and Initial Class of
Advisor Municipal Bond immediately prior to the Reorganization. The
net asset value per share of Spartan Municipal Income will be
unchanged by the transaction. Thus, the Reorganization will not result
in a dilution of any shareholder interest.
Any transfer taxes payable upon issuance of shares of Spartan
Municipal Income in a name other than that of the registered holder of
the shares on the books of Advisor Municipal Bond as of that time
shall be paid by the person to whom such shares are to be issued as a
condition of such transfer. Any reporting responsibility of Advisor
Municipal Bond is and will continue to be its responsibility up to and
including the Closing Date and such later date on which Advisor
Municipal Bond is liquidated.
Advisor Municipal Bond will bear the cost of the Reorganization,
including professional fees, expenses associated with the filing of
registration statements, and the cost of soliciting proxies for the
Meeting, which will consist principally of printing and mailing
prospectuses and proxy statements, together with the cost of any
supplementary solicitation, provided that these expenses do not exceed
a class's expense cap, if applicable. Any merger-related costs that
may be attributable to Spartan Municipal Income will be borne by
Spartan Municipal Income, provided that they do not exceed the fund's
expense cap. Expenses exceeding a class's or fund's expense cap, as
applicable, will be borne by FMR. However, there may be some
transaction costs associated with portfolio adjustments to Advisor
Municipal Bond and Spartan Municipal Income due to the Reorganization
prior to the Closing Date that will be borne by Advisor Municipal Bond
and Spartan Municipal Income, respectively. Any transaction costs
associated with portfolio adjustments to Advisor Municipal Bond and
Spartan Municipal Income due to the Reorganization that occur after
the Closing Date will be borne by Spartan Municipal Income. The funds
may recognize a taxable gain or loss on the disposition of securities
pursuant to these portfolio adjustments. See the section entitled
"Reasons for the Reorganization."
The consummation of the Reorganization is subject to a number of
conditions set forth in the Agreement, some of which may be waived by
a fund. In addition, the Agreement may be amended in any mutually
agreeable manner, except that no amendment that may have a materially
adverse effect on the shareholders' interests may be made subsequent
to the meeting.
REASONS FOR THE REORGANIZATION
The Boards of Trustees (the Boards) of the funds have determined that
the Reorganization is in the best interests of the shareholders of
both funds and that the Reorganization will not result in a dilution
of the interests of shareholders of either fund.
In considering the Reorganization, the Boards considered a number of
factors, including the following:
(1) the compatibility of the funds' investment objectives and
policies;
(2) the historical performance of the funds;
(3) the relative expense ratios of the funds;
(4) the costs to be incurred by each fund as a result of the
Reorganization;
(5) the tax consequences of the Reorganization;
(6) the relative size of the funds;
(7) the elimination of duplicative funds;
(8) the impact of changes to the municipal bond product line on the
funds and their shareholders; and
(9) the benefit to FMR and to the shareholders of the funds.
FMR recommended the Reorganization to the Boards at a meeting of the
Boards on February 19, 1998. In recommending the Reorganization, FMR
also advised the Boards that the funds have similar investment
objectives, policies, and permissible investments. In particular, FMR
informed the Boards that the funds differed primarily with respect to
sales load structures, the level of expenses they incur, and debt
quality policies.
The Boards considered that former shareholders of Advisor Municipal
Bond will receive shares of Spartan Municipal Income equal to the
value of their Class A, Class T, Class B, Institutional Class, or
Initial Class shares of Advisor Municipal Bond. In addition, the funds
have received an opinion of counsel that, except with respect to
Section 1256 contracts, the Reorganization will not result in the
recognition of any gain or loss for federal income tax purposes either
to Advisor Municipal Bond or Spartan Municipal Income or to the
shareholders of either fund.
Furthermore, on February 19, 1998, the Boards considered that the
proposed Reorganization would provide shareholders of Advisor
Municipal Bond with a fund with lower expenses and substantially
similar investment policies. The Boards also considered that the risk
of the small asset levels of Class A, Class T, Class B, Institutional
Class, and Initial Class of Advisor Municipal Bond could eventually
lead to higher expenses through an increase in the voluntary expense
caps. The Boards considered FMR's representation to the Boards that if
the Reorganization is approved, FMR would guarantee an expense ratio
of 0.53% of average net assets for the surviving fund (excluding
interest, taxes, brokerage commissions, and extraordinary expenses)
following the Closing Date of the Reorganization through December 31,
2000. The Boards were also informed that existing shareholders of
Advisor Municipal Bond will maintain their current minimum balance
requirements (currently $1,000 for Class A, Class T, Class B and
Institutional Class, and $2,000 for Initial Class) and will not be
subject to Spartan Municipal Income's higher minimum balance
requirement of $5,000. FMR also informed the Boards that any expenses
associated with the Reorganization, including professional fees, and
any additional merger-related costs directly attributable to Advisor
Municipal Bond would be borne by Advisor Municipal Bond, provided that
they do not exceed each class's expense cap, if applicable. The Boards
were informed that any merger-related costs, including professional
fees, directly attributable to Spartan Municipal Income would be borne
by Spartan Municipal Income, provided that they do not exceed the
fund's expense cap.
Finally, the Boards considered the proposed Reorganization in the
context of a general goal of reducing the number of duplicative funds
managed by FMR. While the reduction of duplicative funds and funds or
classes with lower assets potentially would benefit FMR, it also
should benefit shareholders by facilitating increased operational
efficiencies and potentially reducing gross expense ratios.
DESCRIPTION OF THE SECURITIES TO BE ISSUED
Fidelity Court Street Trust (the trust) is registered with the
Securities and Exchange Commission (the Commission) as an open-end
management investment company. The trust's Trustees are authorized to
issue an unlimited number of shares of beneficial interest of separate
series. Spartan Municipal Income is one of four funds of the trust.
Each share of Spartan Municipal Income represents an equal
proportionate interest with each other share of the fund, and each
such share of Spartan Municipal Income is entitled to equal voting,
dividend, liquidation, and redemption rights. Each shareholder of the
fund is entitled to one vote for each dollar value of net asset value
of the fund that shareholder owns. Shares of Spartan Municipal Income
have no preemptive or conversion rights. The voting and dividend
rights, the right of redemption, and the privilege of exchange are
described in the fund's Prospectus. Shares are fully paid and
nonassessable, except as set forth in the fund's Statement of
Additional Information under the heading "Shareholder and Trustee
Liability."
The trust does not hold annual meetings of shareholders. There will
normally be no meetings of shareholders for the purpose of electing
Trustees unless less than a majority of the Trustees holding office
have been elected by shareholders, at which time the Trustees then in
office will call a shareholder meeting for the election of Trustees.
Under the 1940 Act, shareholders of record of at least two-thirds of
the outstanding shares of an investment company may remove a Trustee
by votes cast in person or by proxy at a meeting called for that
purpose. The Trustees are required to call a meeting of shareholders
for the purpose of voting upon the question of removal of any Trustee
when requested in writing to do so by the shareholders of record
holding at least 10% of the trust's outstanding shares.
FEDERAL INCOME TAX CONSIDERATIONS
The exchange of Advisor Municipal Bond's assets for Spartan Municipal
Income's shares, the assumption of the liabilities of Advisor
Municipal Bond by Spartan Municipal Income, and the distribution of
Spartan Municipal Income shares to shareholders of each class of
Advisor Municipal Bond is intended to qualify for federal income tax
purposes as a tax-free reorganization under the Code. With respect to
the Reorganization, the participating funds have received an opinion
from Kirkpatrick & Lockhart LLP, counsel to Advisor Municipal Bond and
Spartan Municipal Income, substantially to the effect that:
(i) The acquisition by Spartan Municipal Income of all of the assets
of Advisor Municipal Bond solely in exchange for Spartan Municipal
Income shares and the assumption by Spartan Municipal Income of
Advisor Municipal Bond's liabilities, followed by the distribution by
Advisor Municipal Bond of Spartan Municipal Income shares to
shareholders of each class of Advisor Municipal Bond pursuant to the
liquidation of Advisor Municipal Bond and constructively in exchange
for their Advisor Municipal Bond shares, will constitute a
reorganization within the meaning of section 368(a)(1)(C) of the Code,
and Advisor Municipal Bond and Spartan Municipal Income will each be
"a party to a reorganization" within the meaning of section 368(b) of
the Code;
(ii) No gain or loss will be recognized by Advisor Municipal Bond
upon the transfer of all of its assets to Spartan Municipal Income in
exchange solely for Spartan Municipal Income shares and Spartan
Municipal Income's assumption of Advisor Municipal Bond's liabilities,
followed by Advisor Municipal Bond's subsequent distribution of those
shares to shareholders of each class in liquidation of Advisor
Municipal Bond;
(iii) No gain or loss will be recognized by Spartan Municipal Income
upon the receipt of the assets of Advisor Municipal Bond in exchange
solely for Spartan Municipal Income shares and its assumption of
Advisor Municipal Bond's liabilities;
(iv) The shareholders of each class of Advisor Municipal Bond will
recognize no gain or loss upon the exchange of their Advisor Municipal
Bond shares solely for Spartan Municipal Income shares;
(v) The basis of Advisor Municipal Bond's assets in the hands of
Spartan Municipal Income will be the same as the basis of those assets
in the hands of Advisor Municipal Bond immediately prior to the
Reorganization, and the holding period of those assets in the hands of
Spartan Municipal Income will include the holding period of those
assets in the hands of Advisor Municipal Bond;
(vi) The basis of Advisor Municipal Bond shareholders in Spartan
Municipal Income shares will be the same as their basis in shares of
each class of Advisor Municipal Bond to be surrendered in exchange
therefor; and
(vii) The holding period of the Spartan Municipal Income shares to be
received by the Advisor Municipal Bond shareholders will include the
period during which the shares of each class of Advisor Municipal Bond
to be surrendered in exchange therefor were held, provided such
Advisor Municipal Bond shares were held as capital assets by those
shareholders on the date of the Reorganization.
Shareholders of Advisor Municipal Bond should consult their tax
advisers regarding the effect, if any, of the proposed Reorganization
in light of their individual circumstances. Because the foregoing
discussion relates to only the federal income tax consequences of the
Reorganization, those shareholders also should consult their tax
advisers as to state and local tax consequences, if any, of the
Reorganization.
CAPITALIZATION
The following table shows the capitalization of Spartan Municipal
Income and of each class of Advisor Municipal Bond as of November 30,
1997 and on a pro forma combined basis (unaudited) as of that date
giving effect to the Reorganization.
Net Assets Net Asset Shares
Value Per Outstanding
Share
Advisor Municipal Bond:
Class A $ 737,805 $ 8.42 87,672
Class T $ 7,007,720 $ 8.41 833,240
Class B $ 2,134,267 $ 8.41 253,715
Institutional Class $ 1,208,176 $ 8.41 143,650
Initial Class $ 924,769,426 $ 8.42 109,880,310
Spartan Municipal Income $ 2,319,826,504 $ 12.61 183,940,016
Pro Forma Combined Fund $ 3,255,683,898 $ 12.61 258,155,511
CONCLUSION
The Agreement and the transactions provided for therein were approved
by the Boards at a meeting held on February 19, 1998. The Boards of
Trustees of Fidelity Municipal Trust and Fidelity Court Street Trust
determined that the proposed Reorganization is in the best interests
of shareholders of each fund and that the interests of existing
shareholders of Advisor Municipal Bond and Spartan Municipal Income
would not be diluted as a result of the Reorganization. In the event
that the Reorganization is not consummated, Advisor Municipal Bond
will continue to engage in business as a fund of a registered
investment company and FMR and the Board of Fidelity Municipal Trust
will consider other proposals concerning the fund, including possible
increase or removal of the voluntary expense caps and proposals for
the reorganization or liquidation of the fund.
ADDITIONAL INFORMATION ABOUT SPARTAN MUNICIPAL INCOME
Spartan Municipal Income's Prospectus dated March 19, 1998, is
enclosed with this Proxy Statement and is incorporated herein by
reference. The Prospectus contains additional information about the
fund including its investment objective and policies, investment
adviser, advisory fees and expenses, organization, and procedures for
purchasing and redeeming shares. The prospectus also contains Spartan
Municipal Income's financial highlights for the fiscal year ended
November 30, 1997, as shown on the following page:
SPARTAN MUNICIPAL INCOME FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended November 30 1997 1996 1995 1994A 1993 1992 1991 1990 1989 1988
Net asset value, $ 12.430 $ 12.300 $ 11.040 $ 13.230 $ 12.720 $ 12.690 $ 12.610 $ 12.800 $ 12.210 $ 11.750
beginning of period
Income from Investment .607 .648B .677 .755 .764 .811 .845 .857 .893 .901
Operations
Net interest income
Net realized and .235 .109 1.260 (1.690) .700 .190 .310 .200 .600 .460
unrealized gain (loss)
Total from investment .842 .757 1.937 (.935) 1.464 1.001 1.155 1.057 1.493 1.361
operations
Less Distributions (.632)B (.623) (.677) (.755) (.764) (.811) (.845) (.857) (.893) (.901)
From net interest income
From net realized gain (.030) (.004) -- (.500) (.190) (.160) (.230) (.390) (.010) --
Total distributions (.662) (.627) (.677) (1.255) (.954) (.971) (1.075) (1.247) (.903) (.901)
Net asset value, 12.610 $12.430 12.300 11.040 13.230 12.720 12.690 12.610 12.800 12.210
end of period
Total return 7.02% 6.39% 17.95% (7.74)% 11.92% 8.21% 9.62% 8.91% 12.60% 11.93%
Net assets, end of
period $ 2,320 $ 1,837 $ 1,801 $ 1,693 $ 2,128 $ 2,075 $ 1,997 $ 1,784 $ 1,738 $ 1,574
(In millions)
Ratio of expenses to .55% .56% .57% .56% .56% .57% .56% .57% .58% .60%
average net assets
Ratio of net interest
income 4.92% 5.32% 5.69% 6.21% 5.85% 6.40% 6.72% 6.96% 7.10% 7.48%
to average net assets
Portfolio turnover rate 31%C 53% 50% 48% 53% 47% 44% 58% 71% 47%
</TABLE>
A EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INTEREST INCOME PER SHARE MAY
REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
B NET INTEREST INCOME PER SHARE IN 1996 REFLECTS A PAYMENT RECEIVED
FROM AN ISSUER IN BANKRUPTCY WHICH WAS DISTRIBUTED IN 1997.
C THE PORTFOLIO TURNOVER RATE DOES NOT INCLUDE THE ASSETS ACQUIRED IN
THE MERGER.
PROPOSED MERGERS OF SPARTAN AGGRESSIVE MUNICIPAL FUNDAND SPARTAN
INSURED MUNICIPAL INCOME FUNDINTO SPARTAN MUNICIPAL INCOME
On January 15, 1998, the Boards of Trustees of Fidelity Municipal
Trust and Fidelity Court Street Trust approved presenting to
shareholders of Spartan Aggressive Municipal Fund (Spartan Aggressive)
and Spartan Insured Municipal Income Fund (Spartan Insured) a proposal
to merge each fund into Spartan Municipal Income (the Spartan
Aggressive and Spartan Insured Reorganizations, respectively). If the
Spartan Aggressive and Spartan Insured Reorganizations are approved by
shareholders of each fund the assets of Spartan Aggressive and Spartan
Insured (approximately $968 million and $338 million, respectively, as
of January 31, 1998) would be transferred to Spartan Municipal Income
on or about August 20, 1998 and August 27, 1998, respectively, or such
other date as the parties may agree. The following provides additional
information concerning the Spartan Aggressive and Spartan Insured
Reorganizations. Attachment 2 provides additional expense information
concerning the Spartan Aggressive and Spartan Insured Reorganizations.
VOTING INFORMATION
The following supplements information concerning beneficial ownership
found in the "Voting Information" section:
As of February 28, 1998, the Trustees, Members of the Advisory Board,
and officers of Spartan Aggressive and Spartan Insured owned, in the
aggregate, less than 1% of each fund's total outstanding shares. If
the Spartan Aggressive Reorganization, the Spartan Insured
Reorganization, or both reorganizations were approved and either or
both of Spartan Aggressive and Spartan Insured merged into Spartan
Municipal Income prior to February 28, 1998, no shareholders would
have owned of record or beneficially 5% or more of the outstanding
shares of Spartan Municipal Income on that date.
EXPENSE AND LOAD STRUCTURES, TOTAL OPERATING EXPENSES AND EXPENSE
REIMBURSEMENT
The following supplements information found in the "Expense and Load
Structures" and "Total Operating Expenses and Expense Reimbursement"
sections:
Currently, FMR has agreed to reimburse Spartan Municipal Income to
the extent that total operating expenses exceed 0.53% of average net
assets per year through December 31, 1999 (excluding interest, taxes,
brokerage commissions and extraordinary expenses). If either of the
Spartan Aggressive or Spartan Insured Reorganizations is approved by
shareholders and either fund was merged into Spartan Municipal Income,
FMR has agreed to extend Spartan Municipal Income's current expense
cap of 0.53% of average net assets through December 31, 2000.
SHAREHOLDER TRANSACTION AND ANNUAL FUND OPERATING EXPENSES
The following supplements information found in the "Shareholder
Transaction and Annual Fund Operating Expenses" section:
Attachment 2 provides additional expense information assuming the
completion of the of Spartan Aggressive and Spartan Insured
Reorganizations, both of which would be completed prior to the
Reorganization.
INVESTMENT OBJECTIVES AND POLICIES
If either of the Spartan Aggressive or Spartan Insured
Reorganizations is approved by shareholders, Spartan Municipal
Income's average maturity, percentage of holdings in below
investment-grade securities, percentage of holdings in insured
securities, and percentage of the fund's income dividends subject to
the AMT may change. To estimate the fund's portfolio characteristics
on the closing date, the following table presents information for each
fund as of December 31, 1997. The information found in the "Investment
Objectives and Policies" section is supplemented as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Below Income
Net Average Investment Dividends
Assets Portfolio -Grade Insured Subject to
AS OF DECEMBER 31, 1997 ($mm) Maturity Securities Securities AMT
Spartan Aggressive $954.6 13.9 yrs 3.3% 36.3% 13.04%
Spartan Insured $331.4 13.3 yrs 0.0% 81.6% 3.05%
Advisor Municipal Bond $942.6 11.3 yrs 0.7% 45.0% 1.42%
Spartan Municipal Income $2,347.1 12.5 yrs 0.1% 40.4% 16.54%
</TABLE>
PERFORMANCE COMPARISONS OF THE FUNDS
If the Spartan Aggressive and Spartan Insured Reorganizations are
approved by shareholders, the funds will be merged into Spartan
Municipal Income on their respective closing dates. The following
table compares the funds' year-by-year total returns and cumulative
total returns for the periods indicated. Please note that total
returns are based on past results and are not an indication of future
performance.
Year-By-Year Total Returns (periods ended December 31)
CALENDAR YEARS 1993 1994 1995 1996 1997
Spartan Aggressive 13.63% -5.82% 14.89% 3.56% 10.29
%
Spartan Insured 13.85% -7.73% 18.67% 3.68% 9.54%
Cumulative Total Returns (periods ended December 31, 1997)
1 year 3 years 5 years
Spartan Aggressive 10.29% 31.22% 40.43%
Spartan Insured 9.54% 34.78% 41.59%
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATIONS
The following information would replace similar information found in
the "Federal Income Tax Consequences of the Reorganization" section:
IF THE SPARTAN AGGRESSIVE, SPARTAN INSURED, AND ADVISOR MUNICIPAL BOND
MERGERS ARE APPROVED:
"As of December 31, 1997, Advisor Municipal Bond, Spartan Aggressive,
and Spartan Insured had capital loss carryforwards for federal income
tax purposes of approximately $8,535,000, $14,750,000, and $0,
respectively. As of November 30, 1997, Spartan Municipal Income had a
capital loss carryforward for federal income tax purposes of
approximately $15,508,000. Under current federal income tax law,
Spartan Municipal Income may be limited to using only a portion, if
any, of its capital loss carryforward or the capital loss
carryforwards transferred by Advisor Municipal Bond, Spartan
Aggressive, and Spartan Insured at the time of the Reorganization
("capital loss carryforwards"). There is no assurance that Spartan
Municipal Income will be able to realize sufficient capital gains to
use the capital loss carryforwards before they expire. The capital
loss carryforward attributable to Advisor Municipal Bond will expire
on November 30, 2002. The capital loss carryforward attributable to
Spartan Municipal Income will expire between November 30, 2000 and
November 30, 2002. The capital loss carryforward attributable to
Spartan Aggressive will expire between November 30, 2002 and November
30, 2003."
IF THE SPARTAN AGGRESSIVE AND ADVISOR MUNICIPAL BOND MERGERS ARE
APPROVED:
"As of December 31, 1997, Advisor Municipal Bond and Spartan
Aggressive had capital loss carryforwards for federal income tax
purposes of approximately $8,535,000 and $14,750,000, respectively. As
of November 30, 1997, Spartan Municipal Income had a capital loss
carryforward for federal income tax purposes of approximately
$15,508,000. Under current federal income tax law, Spartan Municipal
Income may be limited to using only a portion, if any, of its capital
loss carryforward or the capital loss carryforwards transferred by
Advisor Municipal Bond and Spartan Aggressive at the time of the
Reorganization ("capital loss carryforwards"). There is no assurance
that Spartan Municipal Income will be able to realize sufficient
capital gains to use the capital loss carryforwards before they
expire. The capital loss carryforward attributable to Advisor
Municipal Bond will expire on November 30, 2002. The capital loss
carryforward attributable to Spartan Municipal Income will expire
between November 30, 2000 and November 30, 2002. The capital loss
carryforward attributable to Spartan Aggressive will expire between
November 30, 2002 and November 30, 2003."
IF THE SPARTAN INSURED AND ADVISOR MUNICIPAL BOND MERGERS ARE
APPROVED:
"As of December 31, 1997, Advisor Municipal Bond and Spartan Insured
had capital loss carryforwards for federal income tax purposes of
approximately $8,535,000 and $0, respectively. As of November 30,
1997, Spartan Municipal Income had a capital loss carryforward for
federal income tax purposes of approximately $15,508,000. Under
current federal income tax law, Spartan Municipal Income may be
limited to using only a portion, if any, of its capital loss
carryforward or the capital loss carryforward transferred by Advisor
Municipal Bond at the time of the Reorganization ("capital loss
carryforward"). There is no assurance that Spartan Municipal Income
will be able to realize sufficient capital gains to use the capital
loss carryforward before it expires. The capital loss carryforward
attributable to Advisor Municipal Bond will expire on November 30,
2002. The capital loss carryforward attributable to Spartan Municipal
Income will expire between November 30, 2000 and November 30, 2002."
CAPITALIZATION
The information contained in the "Capitalization" section on page 30
would be revised as follows, assuming that both or either of the
Spartan Aggressive or Spartan Insured Reorganizations had previously
been approved and completed:
"The following table shows the capitalization of Spartan Municipal
Income and of each class of Advisor Municipal Bond as of November 30,
1997 and on a pro forma combined basis (unaudited) as of that date
giving effect to the Reorganization."
IF THE SPARTAN AGGRESSIVE, SPARTAN INSURED, AND ADVISOR MUNICIPAL BOND
MERGERS ARE APPROVED:
Net Assets Net Asset Shares
Value Per Outstanding
Share
Advisor Municipal Bond:
Class A $ 737,805 $ 8.42 87,672
Class T $ 7,007,720 $ 8.41 833,240
Class B $ 2,134,267 $ 8.41 253,715
Institutional Class $ 1,208,176 $ 8.41 143,650
Initial Class $ 924,769,426 $ 8.42 109,880,310
Spartan Municipal Income $ 3,594,458,286 $ 12.61 285,021,125
Pro Forma Combined Fund $ 4,530,315,680 $ 12.61 359,236,620
IF THE SPARTAN AGGRESSIVE AND ADVISOR MUNICIPAL BOND MERGERS ARE
APPROVED:
Net Assets Net Asset Shares
Value Per Outstanding
Share
Advisor Municipal Bond:
Class A $ 737,805 $ 8.42 87,672
Class T $ 7,007,720 $ 8.41 833,240
Class B $ 2,134,267 $ 8.41 253,715
Institutional Class $ 1,208,176 $ 8.41 143,650
Initial Class $ 924,769,426 $ 8.42 109,880,310
Spartan Municipal Income $ 3,267,818,514 $ 12.61 259,117,812
Pro Forma Combined Fund $ 4,203,675,908 $ 12.61 333,333,307
IF THE SPARTAN INSURED AND ADVISOR MUNICIPAL BOND MERGERS ARE
APPROVED:
Net Assets Net Asset Shares
Value Per Outstanding
Share
Advisor Municipal Bond:
Class A $ 737,805 $ 8.42 87,672
Class T $ 7,007,720 $ 8.41 833,240
Class B $ 2,134,267 $ 8.41 253,715
Institutional Class $ 1,208,176 $ 8.41 143,650
Initial Class $ 924,769,426 $ 8.42 109,880,310
Spartan Municipal Income $ 2,646,467,276 $ 12.61 209,843,329
Pro Forma Combined Fund $ 3,582,324,670 $ 12.61 284,058,824
MISCELLANEOUS
LEGAL MATTERS. Certain legal matters in connection with the issuance
of Spartan Municipal Income shares have been passed upon by
Kirkpatrick & Lockhart LLP, counsel to the trust.
EXPERTS. The audited financial statements of Advisor Municipal Bond
and Spartan Municipal Income incorporated by reference into the
Statement of Additional Information, have been examined by Coopers &
Lybrand L.L.P., independent accountants, whose reports thereon are
included in the Annual Reports to Shareholders for the fiscal years
ended December 31, 1997 or November 30, 1997. The financial statements
audited by Coopers & Lybrand L.L.P. have been incorporated by
reference in reliance on their reports given on their authority as
experts in auditing and accounting.
AVAILABLE INFORMATION. Fidelity Municipal Trust and Fidelity Court
Street Trust are each subject to the informational requirements of the
Securities Exchange Act of 1934 and the 1940 Act, and in accordance
therewith file reports, proxy material, and other information with the
SEC. Such reports, proxy material, and other information can be
inspected and copied at the Public Reference Room maintained by the
SEC at 450 Fifth Street, N.W., Washington D.C. 20549 and 7 World Trade
Center, New York, NY 10048. Copies of such material can also be
obtained from the Public Reference Branch, Office of Consumer Affairs
and Information Services, Securities and Exchange Commission,
Washington D.C. 20549, at prescribed rates.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR
NOMINEES. Please advise Fidelity Municipal Trust, in care of Fidelity
Service Company, Inc., P.O. Box 789, Boston, Massachusetts 02109,
whether other persons are beneficial owners of shares for which
proxies are being solicited and, if so, the number of copies of the
Proxy Statement you wish to receive in order to supply copies to the
beneficial owners of the respective shares.
ATTACHMENT 1
EXCERPTS FROM ANNUAL REPORTOF SPARTAN MUNICIPAL INCOME FUND
DATED NOVEMBER 30, 1997
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Spartan Municipal Income 7.02% 6.75% 8.48%
Lehman Brothers Municipal Bond Index 7.17% 7.27% 8.58%
General Municipal Debt Funds Average 6.88% 6.74% 8.24%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and
annualizing the result.)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971130 19971217 165922 S00000000000001
Spartan Municipal Income LB Municipal Bond
00037 LB015
1987/11/30 10000.00 10000.00
1987/12/31 10166.30 10145.10
1988/01/31 10520.10 10506.47
1988/02/29 10652.34 10617.52
1988/03/31 10398.59 10494.36
1988/04/30 10474.70 10574.12
1988/05/31 10550.65 10543.56
1988/06/30 10676.89 10697.81
1988/07/31 10787.46 10767.56
1988/08/31 10837.21 10777.03
1988/09/30 11075.63 10972.10
1988/10/31 11288.48 11165.21
1988/11/30 11193.23 11062.93
1988/12/31 11408.95 11176.11
1989/01/31 11569.89 11407.23
1989/02/28 11499.90 11277.07
1989/03/31 11523.60 11250.12
1989/04/30 11895.44 11517.20
1989/05/31 12147.07 11756.41
1989/06/30 12265.11 11916.06
1989/07/31 12354.50 12078.24
1989/08/31 12299.69 11959.99
1989/09/30 12247.19 11924.35
1989/10/31 12375.43 12070.19
1989/11/30 12603.99 12281.42
1989/12/31 12708.79 12381.88
1990/01/31 12574.87 12323.31
1990/02/28 12739.52 12432.99
1990/03/31 12753.93 12436.72
1990/04/30 12524.52 12346.68
1990/05/31 12870.09 12616.21
1990/06/30 13007.54 12727.10
1990/07/31 13208.91 12914.19
1990/08/31 13071.51 12726.68
1990/09/30 13170.12 12733.93
1990/10/31 13345.17 12964.92
1990/11/30 13726.69 13225.65
1990/12/31 13785.74 13283.18
1991/01/31 13965.29 13461.44
1991/02/28 14052.70 13578.56
1991/03/31 14097.92 13583.44
1991/04/30 14290.80 13764.10
1991/05/31 14416.66 13886.47
1991/06/30 14417.43 13872.72
1991/07/31 14626.87 14041.69
1991/08/31 14756.08 14226.62
1991/09/30 14874.03 14411.85
1991/10/31 15013.88 14541.56
1991/11/30 15046.65 14582.13
1991/12/31 15188.66 14895.06
1992/01/31 15344.58 14929.02
1992/02/29 15375.98 14933.80
1992/03/31 15391.04 14939.32
1992/04/30 15538.21 15072.28
1992/05/31 15687.34 15249.68
1992/06/30 15904.87 15505.57
1992/07/31 16312.92 15970.43
1992/08/31 16095.79 15814.72
1992/09/30 16139.01 15918.15
1992/10/31 15870.29 15761.67
1992/11/30 16282.14 16043.96
1992/12/31 16458.45 16207.77
1993/01/31 16688.78 16396.27
1993/02/28 17302.97 16989.32
1993/03/31 17177.62 16809.74
1993/04/30 17341.02 16979.35
1993/05/31 17441.66 17074.78
1993/06/30 17698.32 17359.76
1993/07/31 17704.47 17382.50
1993/08/31 18089.18 17744.40
1993/09/30 18350.79 17946.51
1993/10/31 18370.12 17981.15
1993/11/30 18222.25 17822.73
1993/12/31 18616.20 18198.97
1994/01/31 18820.94 18406.80
1994/02/28 18341.50 17930.07
1994/03/31 17492.86 17199.95
1994/04/30 17583.74 17345.81
1994/05/31 17693.33 17496.20
1994/06/30 17593.20 17389.30
1994/07/31 17925.22 17708.04
1994/08/31 17990.33 17769.31
1994/09/30 17723.06 17508.46
1994/10/31 17352.86 17197.51
1994/11/30 16811.46 16886.58
1994/12/31 17229.43 17258.25
1995/01/31 17816.77 17751.49
1995/02/28 18332.39 18267.70
1995/03/31 18380.43 18477.60
1995/04/30 18389.62 18499.40
1995/05/31 18963.19 19089.72
1995/06/30 18671.35 18923.64
1995/07/31 18806.49 19103.04
1995/08/31 19036.79 19345.26
1995/09/30 19183.67 19467.72
1995/10/31 19459.54 19750.78
1995/11/30 19828.32 20078.44
1995/12/31 20016.99 20271.40
1996/01/31 20182.75 20424.45
1996/02/29 20099.03 20286.58
1996/03/31 19841.57 20027.32
1996/04/30 19760.82 19970.64
1996/05/31 19766.05 19962.65
1996/06/30 19999.86 20180.05
1996/07/31 20188.16 20363.68
1996/08/31 20193.29 20358.80
1996/09/30 20430.21 20643.82
1996/10/31 20671.02 20877.30
1996/11/30 21094.92 21259.36
1996/12/31 21006.75 21170.07
1997/01/31 21027.23 21210.08
1997/02/28 21209.46 21404.79
1997/03/31 20934.72 21119.46
1997/04/30 21108.09 21296.23
1997/05/31 21406.77 21616.53
1997/06/30 21669.02 21846.74
1997/07/31 22285.63 22451.90
1997/08/31 22059.11 22241.52
1997/09/30 22324.10 22505.53
1997/10/31 22451.44 22650.24
1997/11/28 22575.55 22783.42
IMATRL PRASUN SHR__CHT 19971130 19971217 165925 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Spartan Municipal Income Fund on November 30, 1987. As the
chart shows, by November 30, 1997, the value of the investment would
have grown to $22,576 - a 125.76% increase on the initial investment.
For comparison, look at how the Lehman Brothers Municipal Bond Index
did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 would have grown to $22,783 - a 127.83%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in the
opposite direction of interest
rates. In turn, the share price,
return and yield of a fund that
invests in bonds will vary. That
means if you sell your shares
during a market downturn, you
might lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
MARKET RECAP
With investor sentiment, shifting
supply/demand conditions and
Federal Reserve Board policymaking
playing key roles, municipal bonds
performed more or less in line with
their taxable counterparts for the
12 months that ended November 30,
1997. The Lehman Brothers Municipal
Bond Index - a broad measure of the
municipal bond market - returned
7.17%, while the Lehman Brothers
Aggregate Bond Index - a
barometer of the taxable bond market
- - returned 7.55%. Through much of
the first half of the period, the
supply/demand scenario within the
muni market was favorable: low
supply and high demand that led to
rising municipal bond prices. The
second half, however, saw a large
amount of new issuance come to
market, and while demand remained
strong, it took time for investors to
become acclimated to this new supply.
In the interim, muni bond prices fell.
The cold months of winter contrasted
with what many felt was an
overheating economy ripe for an
inflation appearance. In late March,
the Federal Reserve Board raised a
key short-term interest rate by 0.25%.
While this move was anticipated by
investors, the market nonetheless
reacted negatively. From April through
mid-September, market conditions
were more friendly. Favorable
economic data soothed inflationary
concerns, while the Fed's reluctance to
raise rates further was another
positive influence. High supply and
low demand resulted in a sub-par
performance for muni bonds in
September and October, but Asian
volatility toward the end of the period
changed momentum. Currency
devaluations meant prices of Asian
goods would become cheaper, further
decreasing the likelihood of
inflation.
An interview with David Murphy, Portfolio Manager of Spartan Municipal
Income Fund
Q. HOW DID THE FUND PERFORM, DAVID?
A. Pretty well. For the 12-month period that ended November 30, 1997,
the fund had a total return of 7.02%. To get a sense of how the fund
did relative to its competitors, the general municipal debt funds
average returned 6.88% for the same 12-month period, according to
Lipper Analytical Services. Additionally, the Lehman Brothers
Municipal Bond Index - which is a broad measure of the performance of
the municipal bond market - returned 7.17% for the same one-year
period.
Q. WHAT WERE SOME OF THE KEY ELEMENTS OF YOUR STRATEGY?
A. In terms of the way the fund's investments were allocated among
bonds with various maturities, I focused on bonds with maturities
between eight and 15 years. I did that because the yield curve - which
is a graphical representation of bond yields by ascending maturity
dates - was flat beyond 15 years. Up to about a 15-year maturity, an
investor was paid an appropriate amount of additional income for each
additional year of maturity. It is this additional income that
compensates the investor for the additional risk taken on by investing
in the long-maturity part of the market. But for bonds with maturities
longer than 15 years, the extra income for each successive year was
not, in my opinion, attractive enough given the level of risk inherent
in these long-term bonds. Another key strategy was that I kept the
fund's duration, which measures its sensitivity to changing interest
rates, neutral relative to the municipal bond market as a whole, as
represented by the Lehman Brothers Municipal Bond Index. By doing so,
the fund avoids getting whipsawed by becoming bullish or bearish about
the direction of interest rates at the wrong time.
Q. WHAT WERE SOME OF THE FUND'S BEST PERFORMERS DURING THE PERIOD?
A. Several holdings issued by the Massachusetts Industrial Finance
Agency on behalf of health care organizations performed particularly
well. One of these, Atlanticare Medical Center, was boosted on the
news that it would be taken over by a subsidiary of the Partners
Group, one of the dominant health care providers in the greater Boston
area. Other good performers were bonds issued for the Massachusetts
Biomedical Research Corp. They did well because more investors became
better-informed about the facility's positive financial performance.
Additionally, the fund's holdings in bonds issued in the state of New
York - which made up 15.3% of investments at the end of the period -
were winners. The state's finances improved, driven in part by the
strength of the securities industry, which is an important contributor
to New York's tax revenues. In recognition of this improvement,
Standard & Poor's - one of the municipal bond credit rating agencies -
recently upgraded the credit rating of some of the state's agencies,
which was a positive for the price of the fund's state-agency
holdings. Likewise, general obligation bonds issued by New York City
also performed well. The city's economy continued to expand and tax
revenues rose. I especially liked the fact that the city has been
conservative in its budgeting, not relying on a continuation of a
dramatic boost from Wall Street next year. Furthermore, because the
city now uses a new financing vehicle - the Transitional Finance
Authority - to raise money for capital construction projects, there
probably will be a dramatic decline in the amount of New York City
general obligation bonds issued in the near term.
Q. WERE THERE ANY DISAPPOINTMENTS DURING THE PERIOD?
A. There wasn't much improvement in the price of bonds issued by
Michigan Health Care Corporation, which has been mired in bankruptcy
since 1995. Fortunately, the fund's investments in these bonds were
small, so they weren't a major detractor from the fund's performance.
Q. DURING THE PAST SIX MONTHS, THERE WAS A SMALL INCREASE IN THE
FUND'S ELECTRIC UTILITY REVENUE POSITION. GIVEN THAT THE ELECTRIC
INDUSTRY IS UNDER PRESSURE FROM THE THREAT OF INCREASED COMPETITION,
WHAT FACTORS DO YOU LOOK FOR WHEN SELECTING THESE BONDS?
A. The electric utility industry is in the early stages of a
transformation from an environment where electric providers enjoy
monopolistic strongholds on a given service area to one where
competition will reign. With that in mind, I have focused on electric
utilities that are either well-prepared to deal with increased
competition or those that I believe can meet competitive challenges
down the road, but have been severely penalized by the market today.
Q. WHAT'S AHEAD FOR THE MUNICIPAL MARKET?
A. During the past several years, the amount of outstanding municipal
bonds has shrunk considerably. In the first half of 1997, the low
supply helped the municipal market outperform the taxable bond market.
I expect supply will increase next year. The question is, will there
be enough demand to digest that supply? In my view, that will depend
on how investors perceive the attractiveness of municipals relative to
other fixed-income alternatives and especially to equity investments.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT DATED
NOVEMBER 30, 1997. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY
TIME BASED ON MARKET AND OTHER CONDITIONS.
DAVID MURPHY ON MUNICIPAL
BOND SUPPLY:
"The supply of municipal bonds is
a significant factor in their
performance. During the past six
months, interest rates have declined
fairly significantly. Falling interest
rates have prompted municipal
bond issuers to refund, or
refinance, their older debt at
current low interest rates, much in
the same fashion that homeowners
refinance their mortgages when
they see an opportunity to lower
their interest costs. As a result of a
recent increase in the supply of
municipal bonds, their prices
tended to lag U.S. Treasuries during
the final months of the period. If
interest rates stay at current low
levels, or fall further, I think that the
supply of issued municipal bonds
will continue to expand, perhaps
dramatically. This would, in my
opinion, lead to further
underperformance of municipals
relative to U.S. Treasuries. But if
there is a significant decline in the
U.S. stock market, more investor
dollars could be reallocated to
municipals, helping to bolster that
market."
NOTE TO SHAREHOLDERS: Effective
January 31, 1998, George Fischer
will become manager of the fund.
Fischer joined Fidelity in 1989 and
manages several Fidelity and
Spartan municipal income funds.
ATTACHMENT 2
ANNUAL FUND OPERATING EXPENSES AND EXAMPLES OF FUND EXPENSES FOR
CERTAIN REORGANIZATIONS
IF SPARTAN AGGRESSIVE AND SPARTAN INSURED HAD PREVIOUSLY BEEN MERGED
WITH SPARTAN MUNICIPAL INCOME:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Advisor Municipal Bond
Spartan InitialB Cl. AC* Cl. TD Cl. BE Inst'lF Pro Forma
Municipal Expenses
IncomeA Combined
FundG
Management 0.37% 0.39% 0.39% 0.39% 0.39% 0.39% 0.37%
Fees (after
reimbursemen
t)
12b-1 none none 0.15% 0.25% 0.90% none none
Other 0.16% 0.16% 1.61% 0.71% 1.61% 1.61% 0.16%
Expenses
Total Fund 0.53% 0.55% 2.15% 1.35% 2.90% 2.00% 0.53%
Operating
Expenses
(after
reimbursement
)
</TABLE>
* Estimated
A Effective October 24, 1997, FMR agreed to reimburse the fund to the
extent that total operating expenses exceed 0.53% of its average net
assets (excluding interest, taxes, brokerage commissions, and
extraordinary expenses). This agreement will continue through December
31, 2000. If this agreement were not in effect, the management fee,
other expenses, and total operating expenses, as a percentage of
average net assets, would have been 0.39%, 0.16%, and 0.55%,
respectively.
B Effective June 1, 1996, FMR agreed to reimburse the class to the
extent that total operating expenses exceed 0.75% of its average net
assets (excluding interest, taxes, brokerage commissions, and
extraordinary expenses).
C Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.15% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). If this agreement were not
in effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets, would have been
0.39%, 2.81%, and 3.35%, respectively.
D Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.25% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses).
E Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.90% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). If this agreement were not
in effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets, would have been
0.39%, 2.97%, and 4.26%, respectively.
F Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.00% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). If this agreement were not
in effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets, would have been
0.39%, 3.30%, and 3.69%, respectively.
G FMR has agreed to limit the combined fund's total operating expenses
to 0.53% of its average net assets (excluding interest, taxes,
brokerage commissions and extraordinary expenses) through December 31,
2000. If this agreement were not in effect, the management fee, other
expenses, and total operating expenses, as a percentage of average net
assets, would be 0.39%, 0.15%, and 0.54%, respectively.
EXAMPLE:
After 1 After 3 After 5 After 10
Year Years Years Years
Spartan Municipal Income $5 $17 $30 $66
Advisor Municipal Bond: $6 $18 $31 $69
Initial Class
Class A $68 $112 $157 $284
Class T $48 $76 $106 $192
Class B $79 $120 $173 $296
Institutional Class $20 $63 $108 $233
Combined Fund $5 $17 $30 $66
IF ONLY SPARTAN AGGRESSIVE HAD PREVIOUSLY BEEN MERGED WITH SPARTAN
MUNICIPAL INCOME:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Advisor Municipal Bond
Spartan InitialB Cl. AC* Cl. TD Cl. BE Inst'lF Pro Forma
Municipal Expenses
IncomeA Combined
FundG
Management 0.37% 0.39% 0.39% 0.39% 0.39% 0.39% 0.37%
Fees (after
reimbursemen
t)
12b-1 none none 0.15% 0.25% 0.90% none none
Other 0.16% 0.16% 1.61% 0.71% 1.61% 1.61% 0.16%
Expenses
Total Fund 0.53% 0.55% 2.15% 1.35% 2.90% 2.00% 0.53%
Operating
Expenses
(after
reimbursement
)
</TABLE>
* Estimated
A Effective October 24, 1997, FMR agreed to reimburse the fund to the
extent that total operating expenses exceed 0.53% of its average net
assets (excluding interest, taxes, brokerage commissions, and
extraordinary expenses). This agreement will continue through December
31, 2000. If this agreement were not in effect, the management fee,
other expenses, and total operating expenses, as a percentage of
average net assets, would have been 0.39%, 0.16%, and 0.55%,
respectively.
B Effective June 1, 1996, FMR agreed to reimburse the class to the
extent that total operating expenses exceed 0.75% of its average net
assets (excluding interest, taxes, brokerage commissions, and
extraordinary expenses).
C Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.15% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). If this agreement were not
in effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets, would have been
0.39%, 2.81%, and 3.35%, respectively.
D Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.25% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses).
E Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.90% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). If this agreement were not
in effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets, would have been
0.39%, 2.97%, and 4.26%, respectively.
F Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.00% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). If this agreement were not
in effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets, would have been
0.39%, 3.30%, and 3.69%, respectively.
G FMR has agreed to limit the combined fund's total operating expenses
to 0.53% of its average net assets (excluding interest, taxes,
brokerage commissions and extraordinary expenses) through December 31,
2000. If this agreement were not in effect, the management fee, other
expenses, and total operating expenses, as a percentage of average net
assets, would be 0.39%, 0.16%, and 0.55%, respectively.
EXAMPLE:
After 1 After 3 After 5 After 10
Year Years Years Years
Spartan Municipal Income $5 $17 $30 $66
Advisor Municipal Bond: $6 $18 $31 $69
Initial Class
Class A $68 $112 $157 $284
Class T $48 $76 $106 $192
Class B $79 $120 $173 $296
Institutional Class $20 $63 $108 $233
Combined Fund $5 $17 $30 $66
IF ONLY SPARTAN INSURED HAD PREVIOUSLY BEEN MERGED WITH SPARTAN
MUNICIPAL INCOME:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Advisor Municipal Bond
Spartan InitialB Cl. AC* Cl. TD Cl. BE Inst'lF Pro Forma
Municipal Expenses
IncomeA Combined
FundG
Management 0.37% 0.39% 0.39% 0.39% 0.39% 0.39% 0.37%
Fees (after
reimbursemen
t)
12b-1 none none 0.15% 0.25% 0.90% none none
Other 0.16% 0.16% 1.61% 0.71% 1.61% 1.61% 0.16%
Expenses
Total Fund 0.53% 0.55% 2.15% 1.35% 2.90% 2.00% 0.53%
Operating
Expenses
(after
reimbursemen
t)
</TABLE>
* Estimated.
A Effective October 24, 1997, FMR agreed to reimburse the fund to the
extent that total operating expenses exceed 0.53% of its average net
assets (excluding interest, taxes, brokerage commissions, and
extraordinary expenses). This agreement will continue through December
31, 2000. If this agreement were not in effect, the management fee,
other expenses, and total operating expenses, as a percentage of
average net assets, would have been 0.39%, 0.16%, and 0.55%,
respectively.
B Effective June 1, 1996, FMR agreed to reimburse the class to the
extent that total operating expenses exceed 0.75% of its average net
assets (excluding interest, taxes, brokerage commissions, and
extraordinary expenses).
C Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.15% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). If this agreement were not
in effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets, would have been
0.39%, 2.81%, and 3.35%, respectively.
D Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.25% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses).
E Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.90% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). If this agreement were not
in effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets, would have been
0.39%, 2.97%, and 4.26%, respectively.
F Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.00% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). If this agreement were not
in effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets, would have been
0.39%, 3.30%, and 3.69%, respectively.
G FMR has agreed to limit the combined fund's total operating expenses
to 0.53% of its average net assets (excluding interest, taxes,
brokerage commissions and extraordinary expenses) through December 31,
2000. If this agreement were not in effect, the management fee, other
expenses, and total operating expenses, as a percentage of average net
assets, would be 0.39%, 0.16%, and 0.55%, respectively.
EXAMPLE:
After 1 After 3 After 5 After 10
Year Years Years Years
Spartan Municipal Income $5 $17 $30 $66
Advisor Municipal Bond: $6 $18 $31 $69
Initial Class
Class A $68 $112 $157 $284
Class T $48 $76 $106 $192
Class B $79 $120 $173 $296
Institutional Class $20 $63 $108 $233
Combined Fund $5 $17 $30 $66
IF NEITHER SPARTAN AGGRESSIVE NOR SPARTAN INSURED HAD BEEN MERGED INTO
SPARTAN MUNICIPAL INCOME:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Advisor Municipal Bond
Spartan InitialB Cl. AC* Cl. TD Cl. BE Inst'lF Pro Forma
Municipal Expenses
IncomeA Combined
FundG
Management 0.37% 0.39% 0.39% 0.39% 0.39% 0.39% 0.37%
Fees (after
reimburseme
nt)
12b-1 none none 0.15% 0.25% 0.90% none none
Other 0.16% 0.16% 1.61% 0.71% 1.61% 1.61% 0.16%
Expenses
Total Fund 0.53% 0.55% 2.15% 1.35% 2.90% 2.00% 0.53%
Operating
Expenses
(after
reimbursemen
t)
</TABLE>
* Estimated.
A Effective October 24, 1997, FMR agreed to reimburse the fund to the
extent that total operating expenses exceed 0.53% of its average net
assets (excluding interest, taxes, brokerage commissions, and
extraordinary expenses). This agreement will continue through December
31, 1999. If this agreement were not in effect, the management fee,
other expenses, and total operating expenses, as a percentage of
average net assets, would have been 0.39%, 0.16%, and 0.55%,
respectively.
B Effective June 1, 1996, FMR agreed to reimburse the class to the
extent that total operating expenses exceed 0.75% of its average net
assets (excluding interest, taxes, brokerage commissions, and
extraordinary expenses).
C Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.15% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). If this agreement were not
in effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets, would have been
0.39%, 2.81%, and 3.35%, respectively.
D Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.25% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses).
E Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.90% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). If this agreement were not
in effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets, would have been
0.39%, 2.97%, and 4.26%, respectively.
F Effective January 1, 1998, FMR has voluntarily agreed to reimburse
the class to the extent that total operating expenses exceed 2.00% of
its average net assets (excluding interest, taxes, brokerage
commissions, and extraordinary expenses). If this agreement were not
in effect, the management fee, other expenses, and total operating
expenses, as a percentage of average net assets, would have been
0.39%, 3.30%, and 3.69%, respectively.
G FMR has agreed to limit the combined fund's total operating expenses
to 0.53% of its average net assets (excluding interest, taxes,
brokerage commissions and extraordinary expenses) through December 31,
2000. If this agreement were not in effect, the management fee, other
expenses, and total operating expenses, as a percentage of average net
assets, would be 0.39%, 0.16%, and 0.55%, respectively.
EXAMPLE:
After 1 After 3 After 5 After 10
Year Years Years Years
Spartan Municipal Income $5 $17 $30 $66
Advisor Municipal Bond: $6 $18 $31 $69
Initial Class
Class A $68 $112 $157 $284
Class T $48 $76 $106 $192
Class B $79 $120 $173 $296
Institutional Class $20 $63 $108 $233
Combined Fund $5 $17 $30 $66
ATTACHMENT 2
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as
of June 8, 1998, by and between Fidelity Municipal Trust, a
Massachusetts business trust, on behalf of its series Fidelity Advisor
Municipal Bond Fund (Advisor Municipal Bond), and Fidelity Court
Street Trust, a Massachusetts business trust, on behalf of its series
Spartan Municipal Income Fund (Spartan Municipal Income). Fidelity
Municipal Trust and Fidelity Court Street Trust may be referred to
herein collectively as the "Trusts" or each individually as a "Trust."
The Trusts are duly organized business trusts under the laws of the
Commonwealth of Massachusetts with their principal place of business
at 82 Devonshire Street, Boston, Massachusetts 02109. Spartan
Municipal Income and Advisor Municipal Bond may be referred to herein
collectively as the "Funds" or each individually as the "Fund."
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the Code). The
reorganization will comprise: (a) the transfer of all of the assets of
Advisor Municipal Bond to Spartan Municipal Income solely in exchange
for shares of beneficial interest in Spartan Municipal Income (the
Spartan Municipal Income Shares) based upon the net asset value
attributable to Class A, Class T, Class B, Institutional Class, and
Fidelity Municipal Bond Fund (Initial Class) of Advisor Municipal Bond
and the assumption by Spartan Municipal Income of Advisor Municipal
Bond's liabilities; and (b) the constructive distribution of such
shares by Advisor Municipal Bond to its Class A, Class T, Class B,
Institutional Class and Initial Class shareholders in complete
liquidation and termination of Advisor Municipal Bond in exchange for
all of Advisor Municipal Bond's outstanding shares. Advisor Municipal
Bond shall receive shares of Spartan Municipal Income having a net
asset value equal to the value of the net assets of Class A, Class T,
Class B, Institutional Class and Initial Class of Advisor Municipal
Bond on the Closing Date (as defined in Section 6), which shares
Advisor Municipal Bond shall then distribute to each class's
shareholders. Shareholders of Class A, Class T, Class B, Institutional
Class, and Initial Class of Advisor Municipal Bond will receive shares
of Spartan Municipal Income equal in value to the shares of Advisor
Municipal Bond they are surrendering, based upon the relative net
asset values of each of Class A, Class T, Class B, Institutional
Class, and Initial Class of Advisor Municipal Bond to Spartan
Municipal Income, respectively, as of the Closing Date. The foregoing
transactions are referred to herein as the "Reorganization."
In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF ADVISOR MUNICIPAL BOND. Advisor
Municipal Bond represents and warrants to and agrees with Spartan
Municipal Income that:
(a) Advisor Municipal Bond is a series of Fidelity Municipal Trust, a
business trust duly organized, validly existing, and in good standing
under the laws of the Commonwealth of Massachusetts, and has the power
to own all of its properties and assets and to carry out its
obligations under this Agreement. It has all necessary federal, state,
and local authorizations to carry on its business as now being
conducted and to carry out this Agreement;
(b) Fidelity Municipal Trust is an open-end, management investment
company duly registered under the Investment Company Act of 1940, as
amended (the 1940 Act), and such registration is in full force and
effect;
(c) The Prospectus and Statement of Additional Information of Advisor
Municipal Bond dated February 28, 1998 with respect to Initial Class,
October 31, 1997 as supplemented on February 4, 1998 with respect to
Class A, Class T, and Class B, and October 31, 1997 as supplemented on
February 12, 1998 with respect to Institutional Class, previously
furnished to Spartan Municipal Income, did not and do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading;
(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Advisor Municipal Bond, threatened
against Advisor Municipal Bond which assert liability on the part of
Advisor Municipal Bond. Advisor Municipal Bond knows of no facts which
might form the basis for the institution of such proceedings;
(e) Advisor Municipal Bond is not in, and the execution, delivery,
and performance of this Agreement will not result in, violation of any
provision of its Amended and Restated Declaration of Trust or By-laws,
or, to the knowledge of Advisor Municipal Bond, of any agreement,
indenture, instrument, contract, lease, or other undertaking to which
Advisor Municipal Bond is a party or by which Advisor Municipal Bond
is bound or result in the acceleration of any obligation or the
imposition of any penalty under any agreement, judgment or decree to
which Advisor Municipal Bond is a party or is bound;
(f) The Statement of Assets and Liabilities, the Statement of
Operations, the Statement of Changes in Net Assets, Financial
Highlights (of each class), and the Schedule of Investments (including
market values) of Advisor Municipal Bond at December 31, 1997, have
been audited by Coopers & Lybrand L.L.P., independent accountants, and
have been furnished to Spartan Municipal Income. Said Statement of
Assets and Liabilities and Schedule of Investments fairly present the
Fund's financial position as of such date and said Statement of
Operations, Statement of Changes in Net Assets, and Financial
Highlights (of each class) fairly reflect its results of operations,
changes in financial position, and financial highlights for the
periods covered thereby in conformity with generally accepted
accounting principles consistently applied;
(g) Advisor Municipal Bond has no known liabilities of a material
nature, contingent or otherwise, other than those shown as belonging
to it on its Statement of Assets and Liabilities as of December 31,
1997 and those incurred in the ordinary course of Advisor Municipal
Bond's business as an investment company since December 31, 1997;
(h) The registration statement (Registration Statement) filed with
the Securities and Exchange Commission (Commission) by Fidelity Court
Street Trust on Form N-14 relating to the shares of Spartan Municipal
Income issuable hereunder and the proxy statement of Advisor Municipal
Bond included therein (Proxy Statement), on the effective date of the
Registration Statement and insofar as they relate to Advisor Municipal
Bond (i) comply in all material respects with the provisions of the
Securities Act of 1933, as amended (the 1933 Act), the Securities
Exchange Act of 1934, as amended (the 1934 Act), and the 1940 Act, and
the rules and regulations thereunder, and (ii) do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and at the time of the shareholders' meeting
referred to in Section 7 and on the Closing Date, the prospectus
contained in the Registration Statement of which the Proxy Statement
is a part (the Prospectus), as amended or supplemented, insofar as it
relates to Advisor Municipal Bond, does not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading;
(i) All material contracts and commitments of Advisor Municipal Bond
(other than this Agreement) will be terminated without liability to
Advisor Municipal Bond prior to or on the Closing Date (other than
those made in connection with redemptions of Class A, Class T, Class
B, Institutional Class and Initial Class shares and the purchase and
sale of portfolio securities made in the ordinary course of business);
(j) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Advisor
Municipal Bond of the transactions contemplated by this Agreement,
except such as have been obtained under the 1933 Act, the 1934 Act,
the 1940 Act, and state securities or blue sky laws (which term as
used herein shall include the District of Columbia and Puerto Rico);
(k) Advisor Municipal Bond has filed or will file all federal and
state tax returns which, to the knowledge of Advisor Municipal Bond's
officers, are required to be filed by Advisor Municipal Bond and has
paid or will pay all federal and state taxes shown to be due on said
returns or provision shall have been made for the payment thereof,
and, to the best of Advisor Municipal Bond's knowledge, no such return
is currently under audit and no assessment has been asserted with
respect to such returns;
(l) Advisor Municipal Bond has met the requirements of Subchapter M
of the Code for qualification and treatment as a regulated investment
company for all prior taxable years and intends to meet such
requirements for its current taxable year ending on the Closing Date;
(m) All of the issued and outstanding Class A, Class T, Class B,
Institutional Class, and Initial Class shares of Advisor Municipal
Bond are, and at the Closing Date will be, duly and validly issued and
outstanding and fully paid and nonassessable as a matter of
Massachusetts law (except as disclosed in the Fund's Statement of
Additional Information), and have been offered for sale and in
conformity with all applicable federal securities laws. All of the
issued and outstanding Class A, Class T, Class B, Institutional Class,
and Initial Class shares of Advisor Municipal Bond will, at the
Closing Date, be held by the persons and in the amounts set forth in
the list of shareholders of each class submitted to Spartan Municipal
Income in accordance with this Agreement;
(n) As of both the Valuation Time (as defined in Section 4) and the
Closing Date, Advisor Municipal Bond will have the full right, power,
and authority to sell, assign, transfer, and deliver its portfolio
securities and any other assets of Advisor Municipal Bond to be
transferred to Spartan Municipal Income pursuant to this Agreement. As
of the Closing Date, subject only to the delivery of Advisor Municipal
Bond's portfolio securities and any such other assets as contemplated
by this Agreement, Spartan Municipal Income will acquire Advisor
Municipal Bond's portfolio securities and any such other assets
subject to no encumbrances, liens, or security interests (except for
those that may arise in the ordinary course and are disclosed to
Spartan Municipal Income) and without any restrictions upon the
transfer thereof; and
(o) The execution, performance, and delivery of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of Advisor Municipal Bond, and this
Agreement constitutes a valid and binding obligation of Advisor
Municipal Bond enforceable in accordance with its terms, subject to
shareholder approval.
2. REPRESENTATIONS AND WARRANTIES OF SPARTAN MUNICIPAL INCOME. Spartan
Municipal Income represents and warrants to and agrees with Advisor
Municipal Bond that:
(a) Spartan Municipal Income is a series of Fidelity Court Street
Trust, a business trust duly organized, validly existing, and in good
standing under the laws of the Commonwealth of Massachusetts, and has
the power to own all of its properties and assets and to carry out its
obligations under this Agreement. It has all necessary federal, state,
and local authorizations to carry on its business as now being
conducted and to carry out this Agreement;
(b) Fidelity Court Street Trust is an open-end, management investment
company duly registered under the 1940 Act, and such registration is
in full force and effect;
(c) The Prospectus and Statement of Additional Information of Spartan
Municipal Income, dated March 19, 1998, previously furnished to
Advisor Municipal Bond, did not and do not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading;
(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Spartan Municipal Income, threatened
against Spartan Municipal Income which assert liability on the part of
Spartan Municipal Income. Spartan Municipal Income knows of no facts
which might form the basis for the institution of such proceedings;
(e) Spartan Municipal Income is not in, and the execution, delivery,
and performance of this Agreement will not result in, violation of any
provision of its Amended and Restated Declaration of Trust or By-laws,
or, to the knowledge of Spartan Municipal Income, of any agreement,
indenture, instrument, contract, lease, or other undertaking to which
Spartan Municipal Income is a party or by which Spartan Municipal
Income is bound or result in the acceleration of any obligation or the
imposition of any penalty under any agreement, judgment, or decree to
which Spartan Municipal Income is a party or is bound;
(f) The Statement of Assets and Liabilities, the Statement of
Operations, the Statement of Changes in Net Assets, Financial
Highlights, and the Schedule of Investments (including market values)
of Spartan Municipal Income at November 30, 1997, have been audited by
Coopers & Lybrand L.L.P., independent accountants, and have been
furnished to Advisor Municipal Bond. Said Statement of Assets and
Liabilities and Schedule of Investments fairly present its financial
position as of such date and said Statement of Operations, Statement
of Changes in Net Assets, and Financial Highlights fairly reflect its
results of operations, changes in financial position, and financial
highlights for the periods covered thereby in conformity with
generally accepted accounting principles consistently applied;
(g) Spartan Municipal Income has no known liabilities of a material
nature, contingent or otherwise, other than those shown as belonging
to it on its statement of assets and liabilities as of November 30,
1997 and those incurred in the ordinary course of Spartan Municipal
Income's business as an investment company since November 30, 1997;
(h) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by Spartan
Municipal Income of the transactions contemplated by this Agreement,
except such as have been obtained under the 1933 Act, the 1934 Act,
the 1940 Act, and state securities or blue sky laws (which term as
used herein shall include the District of Columbia and Puerto Rico);
(i) Spartan Municipal Income has filed or will file all federal and
state tax returns which, to the knowledge of Spartan Municipal
Income's officers, are required to be filed by Spartan Municipal
Income and has paid or will pay all federal and state taxes shown to
be due on said returns or provision shall have been made for the
payment thereof, and, to the best of Spartan Municipal Income's
knowledge, no such return is currently under audit and no assessment
has been asserted with respect to such returns;
(j) Spartan Municipal Income has met the requirements of Subchapter M
of the Code for qualification and treatment as a regulated investment
company for all prior taxable years and intends to meet such
requirements for its current taxable year ending on November 30, 1998;
(k) As of the Closing Date, the shares of beneficial interest of
Spartan Municipal Income to be issued to Advisor Municipal Bond will
have been duly authorized and, when issued and delivered pursuant to
this Agreement, will be legally and validly issued and will be fully
paid and nonassessable as a matter of Massachusetts law (except as
disclosed in the Fund's Statement of Additional Information) by
Spartan Municipal Income, and no shareholder of Spartan Municipal
Income will have any preemptive right of subscription or purchase in
respect thereof;
(l) The execution, performance, and delivery of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of Spartan Municipal Income, and this
Agreement constitutes a valid and binding obligation of Spartan
Municipal Income enforceable in accordance with its terms, subject to
approval by the shareholders of Advisor Municipal Bond;
(m) The Registration Statement and the Proxy Statement, on the
effective date of the Registration Statement and insofar as they
relate to Spartan Municipal Income, (i) will comply in all material
respects with the provisions of the 1933 Act, the 1934 Act, and the
1940 Act, and the rules and regulations thereunder, and (ii) will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and at the time of the
shareholders' meeting referred to in Section 7 and on the Closing
Date, the Prospectus, as amended or supplemented, insofar as it
relates to Spartan Municipal Income, will not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading;
(n) The issuance of the Spartan Municipal Income Shares pursuant to
this Agreement will be in compliance with all applicable federal
securities laws; and
(o) All of the issued and outstanding shares of beneficial interest
of Spartan Municipal Income have been offered for sale and sold in
conformity with the federal securities laws.
3. REORGANIZATION.
(a) Subject to the requisite approval of the shareholders of Advisor
Municipal Bond and to the other terms and conditions contained herein,
Advisor Municipal Bond agrees to assign, sell, convey, transfer, and
deliver to Spartan Municipal Income as of the Closing Date all of the
assets of Advisor Municipal Bond of every kind and nature existing on
the Closing Date. Spartan Municipal Income agrees in exchange
therefor: (i) to assume all of Advisor Municipal Bond's liabilities
existing on or after the Closing Date, whether or not determinable on
the Closing Date, and (ii) to issue and deliver to Advisor Municipal
Bond the number of full and fractional shares of Spartan Municipal
Income having a net asset value equal to the value of the assets of
Class A, Class T, Class B, Institutional Class and Initial Class of
Advisor Municipal Bond transferred hereunder, less the value of the
liabilities of Advisor Municipal Bond, determined as provided for
under Section 4.
(b) The assets of Advisor Municipal Bond to be acquired by Spartan
Municipal Income shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest or dividends
receivables), claims, choses in action, and other property owned by
Advisor Municipal Bond, and any deferred or prepaid expenses shown as
an asset on the books of Advisor Municipal Bond on the Closing Date.
Advisor Municipal Bond will pay or cause to be paid to Spartan
Municipal Income any dividend or interest payments received by it on
or after the Closing Date with respect to the assets transferred to
Spartan Municipal Income hereunder, and Spartan Municipal Income will
retain any dividend or interest payments received by it after the
Valuation Time with respect to the assets transferred hereunder
without regard to the payment date thereof.
(c) The liabilities of Advisor Municipal Bond to be assumed by
Spartan Municipal Income shall include (except as otherwise provided
for herein) all of Advisor Municipal Bond's liabilities, debts,
obligations, and duties, of whatever kind or nature, whether absolute,
accrued, contingent, or otherwise, whether or not arising in the
ordinary course of business, whether or not determinable on the
Closing Date, and whether or not specifically referred to in this
Agreement. Notwithstanding the foregoing, Advisor Municipal Bond
agrees to use its best efforts to discharge all of its known
liabilities prior to the Closing Date, other than liabilities incurred
in the ordinary course of business.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable, Advisor Municipal Bond will constructively
distribute to its shareholders of record, determined as of the
Valuation Time on the Closing Date, the Spartan Municipal Income
Shares in exchange for such shareholders' shares of beneficial
interest in Class A, Class T, Class B, Institutional Class and Initial
Class of Advisor Municipal Bond and Advisor Municipal Bond will be
liquidated in accordance with Advisor Municipal Bond's Amended and
Restated Declaration of Trust. Shareholders of Class A, Class T, Class
B, Institutional Class and Initial Class of Advisor Municipal Bond
will receive shares of Spartan Municipal Income equal in value to the
shares of Advisor Municipal Bond they are surrendering, based upon the
relative net asset values of each of Class A, Class T, Class B,
Institutional Class and Initial Class of Advisor Municipal Bond to
Spartan Municipal Income, respectively, as of the Closing Date. Such
distribution shall be accomplished by the Funds' transfer agent
opening accounts on Spartan Municipal Income's share transfer books in
the names of the Advisor Municipal Bond shareholders and transferring
the Spartan Municipal Income Shares thereto. Each Advisor Municipal
Bond shareholder's account shall be credited with the respective
number of full and fractional (rounded to the third decimal place)
Spartan Municipal Income Shares due that shareholder. All outstanding
Advisor Municipal Bond shares, including any represented by
certificates, shall simultaneously be canceled on Advisor Municipal
Bond's share transfer records. Spartan Municipal Income shall not
issue certificates representing the Spartan Municipal Income Shares in
connection with the Reorganization.
(e) Any reporting responsibility of Advisor Municipal Bond is and
shall remain its responsibility up to and including the date on which
it is terminated.
(f) Any transfer taxes payable upon issuance of the Spartan Municipal
Income Shares in a name other than that of the registered holder on
Advisor Municipal Bond's books of the Advisor Municipal Bond shares
constructively exchanged for the Spartan Municipal Income Shares shall
be paid by the person to whom such Spartan Municipal Income Shares are
to be issued, as a condition of such transfer.
4. VALUATION.
(a) The Valuation Time shall be as of the close of business of the
New York Stock Exchange on the Closing Date, or such other date as may
be mutually agreed upon in writing by the parties hereto (the
Valuation Time).
(b) As of the Closing Date, Spartan Municipal Income will deliver to
Advisor Municipal Bond the number of Spartan Municipal Income Shares
having a net asset value equal to the value of the assets attributable
to Class A, Class T, Class B, Institutional Class, and Initial Class
of Advisor Municipal Bond transferred hereunder less the liabilities
of Advisor Municipal Bond, determined as provided in this Section 4.
(c) The net asset value per share of the Spartan Municipal Income
Shares to be delivered to Advisor Municipal Bond, the value of the
assets of Advisor Municipal Bond transferred hereunder, the value of
the liabilities of Advisor Municipal Bond to be assumed hereunder, and
the net asset value per share of each class of Advisor Municipal Bond
to be transferred hereunder shall in each case be determined as of the
Valuation Time.
(d) The net asset value per share of the Spartan Municipal Income
Shares shall be computed in the manner set forth in the then-current
Spartan Municipal Income Prospectus and Statement of Additional
Information, and the value of the assets and liabilities of Advisor
Municipal Bond shall be computed in the manner set forth in the
then-current or last effective Prospectus and Statement of Additional
Information of each class of Advisor Municipal Bond.
(e) All computations pursuant to this Section shall be made by or
under the direction of Fidelity Service Company, Inc., a wholly-owned
subsidiary of FMR Corp., in accordance with its regular practice as
pricing agent for Advisor Municipal Bond and Spartan Municipal Income.
5. FEES; EXPENSES.
(a) Advisor Municipal Bond shall be responsible for all expenses,
fees and other charges in connection with the transactions
contemplated by this Agreement, provided that they do not exceed Class
A's, Class T's, Class B's, or Institutional Class's expense cap in
effect since January 1, 1998, or Initial Class's expense cap in effect
since July 1, 1996. Expenses exceeding a class's expense cap, as
applicable, will be paid by FMR (but not including costs incurred in
connection with the purchase or sale of portfolio securities). Any
expenses incurred in connection with the transactions contemplated by
this Agreement which may be attributable to Spartan Municipal Income
will be borne by Spartan Municipal Income, provided that they do not
exceed the Fund's 0.53% expense cap in effect since October 24, 1997.
Expenses exceeding Spartan Municipal Income's expense cap will be paid
by FMR (but not including costs incurred in connection with the
purchase or sale of portfolio securities).
(b) Each of Spartan Municipal Income and Advisor Municipal Bond
represents that there is no person who has dealt with it who by reason
of such dealings is entitled to any broker's or finder's or other
similar fee or commission arising out of the transactions contemplated
by this Agreement.
6. CLOSING DATE.
(a) The Reorganization, together with related acts necessary to
consummate the same (the Closing), unless otherwise provided herein,
shall occur at the principal office of the Trusts, 82 Devonshire
Street, Boston, Massachusetts, as of the Valuation Time on September
10, 1998, or at some other time, date, and place agreed to by Advisor
Municipal Bond and Spartan Municipal Income (the Closing Date).
(b) In the event that on the Closing Date: (i) any of the markets for
securities held by the Funds is closed to trading, or (ii) trading
thereon is restricted, or (iii) trading or the reporting of trading on
said market or elsewhere is disrupted, all so that accurate appraisal
of the total net asset value of each class of Advisor Municipal Bond
or the net asset value per share of Spartan Municipal Income is
impracticable, the Valuation Time and the Closing Date shall be
postponed until the first business day after the day when such trading
shall have been fully resumed and such reporting shall have been
restored, or such other date as the parties may agree.
7. SHAREHOLDER MEETING AND TERMINATION OF ADVISOR MUNICIPAL BOND.
(a) Advisor Municipal Bond agrees to call a meeting of its
shareholders after the effective date of the Registration Statement to
consider transferring its assets to Spartan Municipal Income as herein
provided, adopting this Agreement, and authorizing the liquidation of
Advisor Municipal Bond.
(b) Advisor Municipal Bond agrees that as soon as reasonably
practicable after distribution of the Spartan Municipal Income Shares,
Advisor Municipal Bond shall be terminated as a series of Fidelity
Municipal Trust pursuant to its Amended and Restated Declaration of
Trust, any further actions shall be taken in connection therewith as
required by applicable law, and on and after the Closing Date Advisor
Municipal Bond shall not conduct any business except in connection
with its liquidation and termination.
8. CONDITIONS TO OBLIGATIONS OF SPARTAN MUNICIPAL INCOME.
(a) That Advisor Municipal Bond furnishes to Spartan Municipal Income
a statement, dated as of the Closing Date, signed by an officer of
Fidelity Municipal Trust, certifying that as of the Valuation Time and
the Closing Date all representations and warranties of Advisor
Municipal Bond made in this Agreement are true and correct in all
material respects and that Advisor Municipal Bond has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such dates;
(b) That Advisor Municipal Bond furnishes Spartan Municipal Income
with copies of the resolutions, certified by an officer of Fidelity
Municipal Trust, evidencing the adoption of this Agreement and the
approval of the transactions contemplated herein by the requisite vote
of the holders of the outstanding shares of beneficial interest of
Advisor Municipal Bond;
(c) That, on or prior to the Closing Date, Advisor Municipal Bond
will declare one or more dividends or distributions which, together
with all previous such dividends or distributions attributable to its
current taxable year, shall have the effect of distributing to the
shareholders of Advisor Municipal Bond substantially all of Advisor
Municipal Bond's investment company taxable income and all of its net
realized capital gain, if any, as of the Closing Date;
(d) That Advisor Municipal Bond shall deliver to Spartan Municipal
Income at the Closing a statement of its assets and liabilities,
together with a list of its portfolio securities showing each such
security's adjusted tax basis and holding period by lot, with values
determined as provided in Section 4 of this Agreement, all as of the
Valuation Time, certified on Advisor Municipal Bond's behalf by its
Treasurer or Assistant Treasurer;
(e) That Advisor Municipal Bond's custodian shall deliver to Spartan
Municipal Income a certificate identifying the assets of Advisor
Municipal Bond held by such custodian as of the Valuation Time on the
Closing Date and stating that as of the Valuation Time: (i) the assets
held by the custodian will be transferred to Spartan Municipal Income;
(ii) Advisor Municipal Bond's assets have been duly endorsed in proper
form for transfer in such condition as to constitute good delivery
thereof; and (iii) to the best of the custodian's knowledge, all
necessary taxes in conjunction with the delivery of the assets,
including all applicable federal and state stock transfer stamps, if
any, have been paid or provision for payment has been made;
(f) That Advisor Municipal Bond's transfer agent shall deliver to
Spartan Municipal Income at the Closing a certificate setting forth
the number of shares of each class of Advisor Municipal Bond
outstanding as of the Valuation Time and the name and address of each
holder of record of any such shares and the number of shares held of
record by each such shareholder;
(g) That Advisor Municipal Bond calls a meeting of its shareholders
to be held after the effective date of the Registration Statement to
consider transferring its assets to Spartan Municipal Income as herein
provided, adopting this Agreement, and authorizing the liquidation and
termination of Advisor Municipal Bond;
(h) That Advisor Municipal Bond delivers to Spartan Municipal Income
a certificate of an officer of Fidelity Municipal Trust, dated as of
the Closing Date, that there has been no material adverse change in
Advisor Municipal Bond's financial position since December 31, 1997,
other than changes in the market value of its portfolio securities, or
changes due to net redemptions of its shares, dividends paid, or
losses from operations; and
(i) That all of the issued and outstanding shares of beneficial
interest of Advisor Municipal Bond shall have been offered for sale
and sold in conformity with all applicable state securities laws and,
to the extent that any audit of the records of Advisor Municipal Bond
or its transfer agent by Spartan Municipal Income or its agents shall
have revealed otherwise, Advisor Municipal Bond shall have taken all
actions that in the opinion of Spartan Municipal Income are necessary
to remedy any prior failure on the part of Advisor Municipal Bond to
have offered for sale and sold such shares in conformity with such
laws.
9. CONDITIONS TO OBLIGATIONS OF ADVISOR MUNICIPAL BOND.
(a) That Spartan Municipal Income shall have executed and delivered
to Advisor Municipal Bond an Assumption of Liabilities, certified by
an officer of Fidelity Court Street Trust, dated as of the Closing
Date pursuant to which Spartan Municipal Income will assume all of the
liabilities of Advisor Municipal Bond existing at the Valuation Time
in connection with the transactions contemplated by this Agreement;
(b) That Spartan Municipal Income furnishes to Advisor Municipal Bond
a statement, dated as of the Closing Date, signed by an officer of
Fidelity Court Street Trust, certifying that as of the Valuation Time
and the Closing Date all representations and warranties of Spartan
Municipal Income made in this Agreement are true and correct in all
material respects, and Spartan Municipal Income has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such dates; and
(c) That Advisor Municipal Bond shall have received an opinion of
Kirkpatrick & Lockhart LLP, counsel to Advisor Municipal Bond and
Spartan Municipal Income, to the effect that the Spartan Municipal
Income Shares are duly authorized and upon delivery to Advisor
Municipal Bond as provided in this Agreement will be validly issued
and will be fully paid and nonassessable by Spartan Municipal Income
as a matter of Massachusetts law (except as disclosed in Spartan
Municipal Income's Statement of Additional Information) and no
shareholder of Spartan Municipal Income has any preemptive right of
subscription or purchase in respect thereof.
10. CONDITIONS TO OBLIGATIONS OF SPARTAN MUNICIPAL INCOME AND ADVISOR
MUNICIPAL BOND.
(a) That this Agreement shall have been adopted and the transactions
contemplated herein shall have been approved by the requisite vote of
the holders of the outstanding shares of beneficial interest of
Advisor Municipal Bond;
(b) That all consents of other parties and all other consents,
orders, and permits of federal, state, and local regulatory
authorities (including those of the Commission and of state Blue Sky
and securities authorities, which term as used herein shall include
the District of Columbia and Puerto Rico, and including "no action"
positions of such federal or state authorities) deemed necessary by
Spartan Municipal Income or Advisor Municipal Bond to permit
consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure to
obtain any such consent, order, or permit would not involve a risk of
a material adverse effect on the assets or properties of Spartan
Municipal Income or Advisor Municipal Bond, provided that either party
hereto may for itself waive any of such conditions;
(c) That all proceedings taken by either Fund in connection with the
transactions contemplated by this Agreement and all documents
incidental thereto shall be satisfactory in form and substance to it
and its counsel, Kirkpatrick & Lockhart LLP;
(d) That there shall not be any material litigation pending with
respect to the matters contemplated by this Agreement;
(e) That the Registration Statement shall have become effective under
the 1933 Act, and no stop order suspending such effectiveness shall
have been instituted or, to the knowledge of Spartan Municipal Income
and Advisor Municipal Bond, threatened by the Commission; and
(f) That Spartan Municipal Income and Advisor Municipal Bond shall
have received an opinion of Kirkpatrick & Lockhart LLP satisfactory to
Spartan Municipal Income and Advisor Municipal Bond that for federal
income tax purposes:
(i) The Reorganization will be a reorganization under section
368(a)(1)(C) of the Code, and Advisor Municipal Bond and Spartan
Municipal Income will each be parties to the Reorganization under
section 368(b) of the Code;
(ii) No gain or loss will be recognized by Advisor Municipal Bond
upon the transfer of all of its assets to Spartan Municipal Income in
exchange solely for the Spartan Municipal Income Shares and the
assumption of Advisor Municipal Bond's liabilities followed by the
distribution of those Spartan Municipal Income Shares to the
shareholders of each class of Advisor Municipal Bond in liquidation of
Advisor Municipal Bond;
(iii) No gain or loss will be recognized by Spartan Municipal Income
on the receipt of Advisor Municipal Bond's assets in exchange solely
for the Spartan Municipal Income Shares and the assumption of Advisor
Municipal Bond's liabilities;
(iv) The basis of Advisor Municipal Bond's assets in the hands of
Spartan Municipal Income will be the same as the basis of such assets
in Advisor Municipal Bond's hands immediately prior to the
Reorganization;
(v) Spartan Municipal Income's holding period in the assets to be
received from Advisor Municipal Bond will include Advisor Municipal
Bond's holding period in such assets;
(vi) An Advisor Municipal Bond shareholder will recognize no gain or
loss on the exchange of each class of his or her shares of beneficial
interest in Advisor Municipal Bond solely for the Spartan Municipal
Income Shares in the Reorganization;
(vii) An Advisor Municipal Bond shareholder's basis in the Spartan
Municipal Income Shares to be received by him or her will be the same
as his or her basis in the class of Advisor Municipal Bond shares
exchanged therefor;
(viii) An Advisor Municipal Bond shareholder's holding period for
his or her Spartan Municipal Income Shares will include the holding
period of shares of the class of Advisor Municipal Bond exchanged,
provided that those Advisor Municipal Bond shares were held as capital
assets on the date of the Reorganization.
Notwithstanding anything herein to the contrary, neither Advisor
Municipal Bond nor Spartan Municipal Income may waive the conditions
set forth in this subsection 10(f).
11. COVENANTS OF SPARTAN MUNICIPAL INCOME AND ADVISOR MUNICIPAL BOND.
(a) Spartan Municipal Income and Advisor Municipal Bond each
covenants to operate its respective business in the ordinary course
between the date hereof and the Closing Date, it being understood that
such ordinary course of business will include the payment of customary
dividends and distributions;
(b) Advisor Municipal Bond covenants that it is not acquiring the
Spartan Municipal Income Shares for the purpose of making any
distribution other than in accordance with the terms of this
Agreement;
(c) Advisor Municipal Bond covenants that it will assist Spartan
Municipal Income in obtaining such information as Spartan Municipal
Income reasonably requests concerning the beneficial ownership of
Advisor Municipal Bond's shares; and
(d) Advisor Municipal Bond covenants that its liquidation and
termination will be effected in the manner provided in its Amended and
Restated Declaration of Trust in accordance with applicable law, and
after the Closing Date Advisor Municipal Bond will not conduct any
business except in connection with its liquidation and termination.
12. TERMINATION; WAIVER.
Spartan Municipal Income and Advisor Municipal Bond may terminate
this Agreement by mutual agreement. In addition, either Spartan
Municipal Income or Advisor Municipal Bond may at its option terminate
this Agreement at or prior to the Closing Date because:
(i) of a material breach by the other of any representation,
warranty, or agreement contained herein to be performed at or prior to
the Closing Date; or
(ii) a condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.
In the event of any such termination, there shall be no liability for
damages on the part of Advisor Municipal Bond or Spartan Municipal
Income, or their respective Trustees or officers.
13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES.
(a) This Agreement supersedes all previous correspondence and oral
communications between the parties regarding the subject matter
hereof, constitutes the only understanding with respect to such
subject matter, may not be changed except by a letter of agreement
signed by each party hereto and shall be construed in accordance with
and governed by the laws of the Commonwealth of Massachusetts.
(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the respective
President, any Vice President, or Treasurer of Spartan Municipal
Income or Advisor Municipal Bond; provided, however, that following
the shareholders' meeting called by Advisor Municipal Bond pursuant to
Section 7 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of Spartan
Municipal Income Shares to be delivered to shareholders of each class
of Advisor Municipal Bond under this Agreement to the detriment of
such shareholders without their further approval.
(c) Either Fund may waive any condition to its obligations hereunder,
provided that such waiver does not have any material adverse effect on
the interests of such Fund's shareholders.
The representations, warranties, and covenants contained in the
Agreement, or in any document delivered pursuant hereto or in
connection herewith, shall survive the consummation of the
transactions contemplated hereunder.
14. DECLARATIONS OF TRUST.
A copy of each Fund's Declaration of Trust, as restated and amended,
is on file with the Secretary of the Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on behalf
of the Trustees of each Fund as trustees and not individually and that
the obligations of each Fund under this instrument are not binding
upon any of such Fund's Trustees, officers, or shareholders
individually but are binding only upon the assets and property of such
Fund. Each Fund agrees that its obligations hereunder apply only to
such Fund and not to its shareholders individually or to the Trustees
of such Fund.
15. ASSIGNMENT.
This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment
or transfer of any rights or obligations hereunder shall be made by
any party without the written consent of the other parties. Nothing
herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation other than the
parties hereto and their respective successors and assigns any rights
or remedies under or by reason of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by an appropriate officer.
SIGNATURE LINES OMITTED
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how
each fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a
copy of each fund's most recent financial report and portfolio
listing, or a copy of the Statement of Additional Information (SAI)
dated March 19 , 1998. The SAI has been filed with the
Securities and Exchange Commission (SEC) and is available along with
other related materials on the SEC's Internet Web site
(http://www.sec.gov). The SAI is incorporated herein by reference
(legally forms a part of the prospectus). For a free copy of either
document, call Fidelity at 1-800-544-8888.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
LIM/HIY-pr o-0398
Each fund seeks a high level of current income free from federal
income tax. The funds have different strategies, however, and carry
varying degrees of risk and yield potential.
SPARTAN (registered trademark)
MUNICIPAL
FUNDS
SPARTAN(registered trademark) INTERMEDIATE MUNICIPAL INCOME
FUND
(formerly Fidelity Limited Term Municipal Income Fund)
(fund number 036, trading symbol FLTMX)
SPARTAN (registered trademark) MUNICIPAL
INCOME FUND
(formerly Fidelity Municipal Income Fund)
(fund number 037, trading symbol FHIGX)
PROSPECTUS
MARCH 19 , 1998 (FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET,
BOSTON, MA 02109
CONTENTS
KEY FACTS 47 THE FUNDS AT A GLANCE
47 WHO MAY WANT TO INVEST
48 EXPENSES Each fund's yearly operating
expenses.
50 FINANCIAL HIGHLIGHTS A summary of
each fund's financial data.
52 PERFORMANCE How each fund has done
over time.
THE FUNDS IN DETAIL 53 CHARTER How each fund is organized.
54 INVESTMENT PRINCIPLES AND RISKS Each
fund's overall approach to investing.
56 BREAKDOWN OF EXPENSES How
operating costs are calculated and what
they include.
YOUR ACCOUNT 56 DOING BUSINESS WITH FIDELITY
57 TYPES OF ACCOUNTS Different ways to
set up your account.
58 HOW TO BUY SHARES Opening an
account and making additional
investments.
60 HOW TO SELL SHARES Taking money out
and closing your account.
62 INVESTOR SERVICES Services to help you
manage your account.
SHAREHOLDER AND 63 DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES
64 TRANSACTION DETAILS Share price
calculations and the timing of purchases
and redemptions.
64 EXCHANGE RESTRICTIONS
KEY FACTS
THE FUNDS AT A GLANCE
SPARTAN INTERMEDIATE
GOAL: High current income free from federal income tax with
preservation of capital.
STRATEGY: Normally invests in investment-grade municipal securities.
FMR uses the Lehman Brothers 1-17 Year Municipal Bond Index as a guide
in structuring the fund and selecting its investments.
SIZE: As of December 31, 1997, the fund had over $ 914 million
in assets.
SPARTAN MUNICIPAL
GOAL: High current income free from federal income tax.
STRATEGY: Invests normally in investment-grade municipal securities.
FMR uses the Lehman Brothers Municipal Bond Index as a guide in
structuring the fund and selecting its investments.
SIZE: As of November 30, 1997, the fund had over $2 .3 billion
in assets.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments, which was established in 1946
and is now America's largest mutual fund manager. Beginning January
1, 1999, Fidelity Investments Money Management, Inc. (FIMM), a
subsidiary of FMR, will choose investments for the funds.
As with any mutual fund, there is no assurance that a fund will
achieve its goal.
WHO MAY WANT TO INVEST
These funds may be appropriate for investors in higher tax brackets
who seek high current income that is free from federal income tax.
Each fund's level of risk and potential reward depends on the quality
and maturity of its investments. You should consider your investment
objective and tolerance for risk when making an investment decision.
THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking to
maximize return must assume
greater risk. The funds in this
prospectus are in the INCOME
category.
(solid bullet) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(right arrow) INCOME Seeks income by
investing in bonds.
(solid bullet) GROWTH AND INCOME Seeks
long-term growth and income
by investing in stocks and
bonds.
(solid bullet) GROWTH Seeks long-term
growth by investing mainly in
stocks.
(checkmark)
The value of the funds' investments and the income they generate will
vary from day to day, and generally reflect interest rates, market
conditions, and other economic and political news . When you
sell your shares, they may be worth more or less than what you paid
for them. By themselves, the funds do not constitute a balanced
investment plan.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you
buy or sell shares of a fund. In addition, you may be charged an
annual account maintenance fee if your account balance falls below
$2,500. See "Transaction Details," page , for an explanation of how
and when these charges apply.
Sales charge on purchases None
and reinvested distributions
Deferred sales charge on redemptions None
Annual account maintenance fee $12.00
(for accounts under $2,500)
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets.
Each fund pays a management fee to FMR. It also incurs other expenses
for services such as maintaining shareholder records and furnishing
shareholder statements and financial reports. A fund's expenses are
factored into its share price or dividends and are not charged
directly to shareholder accounts (see "Breakdown of Expenses" page
).
The following figures are based on historical expenses, adjusted to
reflect current fees, of each fund and are calculated as a percentage
of average net assets of each fund .
SPARTAN INTERMEDIATE
Management fee (after reimbursement) 0.36 %
12b-1 fee None
Other expenses 0.17 %
Total fund operating expenses 0.53 %
(after reimbursement)
SPARTAN MUNICIPAL
Management fee (after reimbursement) 0.37 %
12b-1 fee None
Other expenses 0.16 %
Total fund operating expenses 0.53 %
(after reimbursement)
UNDERSTANDING
EXPENSES
Operating a mutual fund
involves a variety of expenses
for portfolio management,
shareholder statements, tax
reporting, and other services.
These expenses are paid from
each fund's assets, and their
effect is already factored into
any quoted share price or
return. Also, as an investor,
you may pay certain expenses
directly.
(checkmark)
EXAMPLES: Let's say, hypothetically, that each fund's annual return is
5% and that your shareholder transaction expenses and each fund's
annual operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses
if you close your account after the number of years indicated:
SPARTAN INTERMEDIATE
1 year $ 5
3 years $ 17
5 years $ 30
10 years $ 66
SPARTAN MUNICIPAL
1 year $ 5
3 years $ 17
5 years $ 30
10 years $ 66
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected expenses or returns, all of which may vary.
Effective March 20, 1998 and October 24, 1997, FMR has
voluntarily agreed to reimburse each of Spartan Intermediate Municipal
Income and Spartan Municipal Income to the extent that total operating
expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) exceed 0.53% of its average net assets
through December 31, 1999 . If these agreements were not in effect,
the management fee, other expenses, and total operating expenses
for Spartan Intermediate Municipal Income and Spartan Municipal
Income would have been 0.38 %, 0.17 %, and
0.55 % and 0.39 %, 0.16 %, and 0.55 %,
respectively.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow have been audited by
Coopers & Lybrand L.L.P., independent accountants. The funds'
financial highlights, financial statements, and reports of the auditor
are included in each fund's Annual Report, and are incorporated by
reference into (are legally a part of) the funds' SAI. Contact
Fidelity for a free copy of an Annual Report or the SAI.
SPARTAN INTERMEDIATE MUNICIPAL INCOME FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended December 31 1997 1996 1995 1994 1993A 1992 1991 1990 1989 1988
Net asset value, $ 9.700 $ 9.800 $ 8.990 $ 9.990 $ 9.600 $ 9.520 $ 9.270 $ 9.310 $ 9.230 $ 9.100
beginning of period
Income from Investment .485 .488 .497 .512 .516 .573 .603 .615 .617 .600
Operations
Net interest income
Net realized and unrealized .290 (.069) .810 (.980) .630 .180 .400 .010 .080 .130
gain (loss)
Total from investment .775 .419 1.307 (.468) 1.146 .753 1.003 .625 .697 .730
operations
Less Distributions (.485) (.488) (.497) (.512) (.516) (.573) (.603) (.615) (.617) (.600)
From net interest income
From net realized gain (.050) (.031) -- (.010) (.220) (.100) (.150) (.050) -- --
In excess of net realized gain -- -- -- (.010) (.020) -- -- -- -- --
Total distributions (.535) (.519) (.497) (.532) (.756) (.673) (.753) (.665) (.617) (.600)
Net asset value, end of period 9.940 9.700 9.800 8.990 9.990 9.600 9.520 9.270 9.310 9.230
Total returnC 8.23% 4.43% 14.84% (4.76)% 12.24% 8.17% 11.19% 6.97% 7.83% 8.22%
Net assets, end of period $ 915 $ 904 $ 943 $ 878 $ 1,199 $ 976 $ 696 $ 468 $ 442 $ 441
(In millions)
Ratio of expenses to .55% .56% .57% .56% .57% .64% .68% .67% .66%B .67%
average net assets
Ratio of net interest income to 4.97% 5.06% 5.25% 5.42% 5.19% 5.94% 6.41% 6.63% 6.70% 6.51%
average net assets
Portfolio turnover rate 22% 27% 31% 30% 111% 50% 42% 72% 55% 30%
</TABLE>
D EFFECTIVE JANUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INTEREST INCOME PER SHARE MAY
REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
E FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIOD SHOWN.
SPARTAN MUNICIPAL INCOME FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended November 30 1997 1996 1995 1994A 1993 1992 1991 1990 1989 1988
Net asset value, $ 12.430 $ 12.300 $ 11.040 $ 13.230 $ 12.720 $ 12.690 $ 12.610 $ 12.800 $ 12.210 $ 11.750
beginning of period
Income from Investment .607 .648B .677 .755 .764 .811 .845 .857 .893 .901
Operations
Net interest income
Net realized and .235 .109 1.260 (1.690) .700 .190 .310 .200 .600 .460
unrealized gain (loss)
Total from investment .842 .757 1.937 (.935) 1.464 1.001 1.155 1.057 1.493 1.361
operations
Less Distributions (.632)B (.623) (.677) (.755) (.764) (.811) (.845) (.857) (.893) (.901)
From net interest income
From net realized gain (.030) (.004) -- (.500) (.190) (.160) (.230) (.390) (.010) --
Total distributions (.662) (.627) (.677) (1.255) (.954) (.971) (1.075) (1.247) (.903) (.901)
Net asset value, 12.610 12.430 12.300 11.040 13.230 12.720 12.690 12.610 12.800 12.210
end of period
Total return 7.02% 6.39% 17.95% (7.74)% 11.92% 8.21% 9.62% 8.91% 12.60% 11.93%
Net assets, end of
period $ 2,320 $ 1,837 $ 1,801 $ 1,693 $ 2,128 $ 2,075 $ 1,997 $ 1,784 $ 1,738 $ 1,574
(In millions)
Ratio of expenses to .55% .56% .57% .56% .56% .57% .56% .57% .58% .60%
average net assets
Ratio of net interest
income 4.92% 5.32% 5.69% 6.21% 5.85% 6.40% 6.72% 6.96% 7.10% 7.48%
to average net assets
Portfolio turnover rate 31%C 53% 50% 48% 53% 47% 44% 58% 71% 47%
</TABLE>
G EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF
POSITION 93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT
PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL
DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET INTEREST
INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES.
H NET INTEREST INCOME PER SHARE IN 1996 REFLECTS A PAYMENT RECEIVED
FROM AN ISSUER IN BANKRUPTCY WHICH WAS DISTRIBUTED IN 1997.
I THE PORTFOLIO TURNOVER RATE DOES NOT INCLUDE THE ASSETS ACQUIRED
IN THE MERGER.
PERFORMANCE
Bond fund performance can be measured as TOTAL RETURN or YIELD. The
total returns that follow are based on historical fund results.
Spartan Intermediate Municipal Income's fiscal year runs from January
1 through December 31. Spartan Municipal Income's fiscal year runs
from December 1 through November 30. The tables below show each fund's
performance over past fiscal years compared to different measures,
including a comparative index and a competitive funds average. The
charts on page present calendar year performance .
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods ended Past 1 Past 5 Past 10
December 31, 1997 year years years
Spartan Intermediate 8.23% 6.77% 7.61%
Lehman Bros. 1-17 Year Muni. Bond Index 8.14% n/a n/a
Lipper Intermediate Muni. Debt Funds Avg. 7.16% 6.12% 7.09%
CUMULATIVE TOTAL RETURNS
Fiscal periods ended Past 1 Past 5 Past 10
December 31, 1997 year years years
Spartan Intermediate 8.23% 38.76% 108.29%
Lehman Bros. 1-17 Year Muni. Bond Index 8.14% n/a n/a
Lipper Intermediate Muni. Debt Funds Avg. 7.16% 34.65% 98.63%
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods ended Past 1 Past 5 Past 10
November 30, 1997 year years years
Spartan Municipal 7.02% 6.75% 8.48%
Lehman Bros. Muni. Bond Index 7.17% 7.27% 8.58%
Lipper Gen. Muni. Debt Funds Average 6.88% 6.74% 8.24%
CUMULATIVE TOTAL RETURNS
Fiscal periods ended Past 1 Past 5 Past 10
November 30, 1997 year years years
Spartan Municipal 7.02% 38.65% 125.76%
Lehman Bros. Muni. Bond Index 7.17% 42.01% 127.83%
Lipper Gen. Muni. Debt Funds Average 6.88% 38.65% 121.13%
If FMR had not reimbursed certain fund expenses during these periods,
yields and total returns would have been lower.
UNDERSTANDING
PERFORMANCE
YIELD illustrates the income
earned by a fund over a recent
period. 30-day yields are
usually used for bond funds.
Yields change daily, reflecting
changes in interest rates.
TOTAL RETURN reflects both the
reinvestment of income and
capital gain distributions and
any change in a fund's share
price.
(checkmark)
EXPLANATION OF TERMS
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1988 1989 1990 1991 1992 1993 1994 1995 1996
1997
SPARTAN MUNICIPAL INCOME 12.22% 11.39% 8.47% 10.18% 8.36% 13.11%
- -7.45% 16.18% 4.94% 9.23%
Lipper General Municipal
Debt Funds Average 11.53% 9.65% 6.05% 12.09% 8.79% 12.47% -6.50%
16.84% 3.30% 9.11%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67%
2.54% 3.32% 1.70%
Percentage (%)
Row: 1, Col: 1, Value: 12.22
Row: 2, Col: 1, Value: 11.39
Row: 3, Col: 1, Value: 8.470000000000001
Row: 4, Col: 1, Value: 10.18
Row: 5, Col: 1, Value: 8.360000000000001
Row: 6, Col: 1, Value: 13.11
Row: 7, Col: 1, Value: -7.45
Row: 8, Col: 1, Value: 16.18
Row: 9, Col: 1, Value: 4.94
Row: 10, Col: 1, Value: 9.229999999999999
(LARGE SOLID BOX) Spartan Municipal
Income
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1988 1989 1990 1991 1992 1993 1994 1995 1996
1997
SPARTAN INTERMEDIATE
MUNICIPAL INCOME 8.22% 7.83% 6.97% 11.19% 8.17% 12.24% -4.76%
14.84% 4.43% 8.23%
Lipper Intermediate Municipal
Debt Funds Average 7.57% 8.26% 6.59% 10.52% 7.80% 10.18% -3.51%
12.89% 3.70% 7.16%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67%
2.54% 3.32% 1.70%
Percentage (%)
Row: 1, Col: 1, Value: 8.219999999999999
Row: 2, Col: 1, Value: 7.83
Row: 3, Col: 1, Value: 6.970000000000001
Row: 4, Col: 1, Value: 11.19
Row: 5, Col: 1, Value: 8.17
Row: 6, Col: 1, Value: 12.24
Row: 7, Col: 1, Value: -4.76
Row: 8, Col: 1, Value: 14.84
Row: 9, Col: 1, Value: 4.430000000000001
Row: 10, Col: 1, Value: 8.229999999999999
(LARGE SOLID BOX) Spartan
Intermediate
Municipal Income
TOTAL RETURN is the change in value of an investment over a
given period, assuming reinvestment of any dividends and capital
gains. A CUMULATIVE TOTAL RETURN reflects actual performance over a
stated period of time. An AVERAGE ANNUAL TOTAL RETURN is a
hypothetical rate of return that, if achieved annually, would have
produced the same cumulative total return if performance had been
constant over the entire period. Average annual total returns smooth
out variations in performance; they are not the same as actual
year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. A
TAX-EQUIVALENT YIELD shows what an investor would have to earn before
taxes to equal a tax-free yield. Yields are calculated according to a
standard that is required for all stock and bond funds. Because this
differs from other accounting methods, the quoted yield may not equal
the income actually paid to shareholders.
LEHMAN BROTHERS MUNICIPAL BOND INDEX is a total return performance
benchmark for investment-grade municipal bonds with maturities of at
least one year.
LEHMAN BROTHERS 1-17 YEAR MUNICIPAL BOND INDEX is a total return
performance benchmark for investment-grade municipal bonds with
maturities between one and 17 years.
Unlike each fund's returns, the total returns of each comparative
index do not include the effect of any brokerage commissions,
transaction fees, or other costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
THE COMPETITIVE FUNDS AVERAGES are the Lipper Intermediate Municipal
Debt Funds Average and Lipper General Municipal Debt Funds Average for
Spartan Intermediate Municipal Income and Spartan Municipal Income,
respectively. As of December 31, 1997 and November 30, 1997, the
averages reflected the performance of 140 and 232 mutual
funds with similar investment objectives, respectively. These
averages, published by Lipper Analytical Services, Inc., exclude the
effect of sales loads.
The funds' recent strategies, performance, and holdings are detailed
twice a year in financial reports, which are sent to all shareholders.
For current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. Spartan Intermediate
Municipal Income is a diversified fund of Fidelity School Street
Trust, and Spartan Municipal Income is a diversified fund of Fidelity
Court Street Trust. Both trusts are open-end management investment
companies. Fidelity School Street Trust was organized as a
Massachusetts business trust on September 10, 1976. Fidelity Court
Street Trust was organized as a Massachusetts business trust on April
21, 1977. There is a remote possibility that one fund might become
liable for a misstatement in the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the
funds' activities, review contractual arrangements with companies that
provide services to the funds, and review the funds' performance. The
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy. Fidelity will mail proxy materials in
advance, including a voting card and information about the proposals
to be voted on. The number of votes you are entitled to is based upon
the dollar value of your investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which chooses their investments and
handles their business affairs. Beginning January 1, 1999, FIMM,
located in Merrimack, New Hampshire, will have primary responsibility
for providing investment management services for the funds.
Norm Lind is Vice President and manager of Spartan Intermediate
Municipal Income, which he has managed since January 1998. He also
manages several other Fidelity funds. Since joining Fidelity in 1986,
Mr. Lind has worked as an analyst and manager.
George Fischer is Vice President and manager of Spartan Municipal
Income, which he has managed since January 1998. He also manages
several other Fidelity funds. Since joining Fidelity in 1989, Mr.
Fischer has worked as an analyst and manager.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets
Fidelity's funds and services.
UMB Bank, n.a. (UMB) is each fund's transfer agent, and is located at
1010 Grand Avenue, Kansas City, Missouri. UMB employs Fidelity Service
Company, Inc. (FSC) to perform transfer agent servicing functions for
each fund.
FMR Corp. is the ultimate parent company of FMR and FIMM .
Members of the Edward C. Johnson 3d family are the predominant owners
of a class of shares of common stock representing approximately 49% of
the voting power of FMR Corp. Under the Investment Company Act of 1940
(the 1940 Act), control of a company is presumed where one individual
or group of individuals owns more than 25% of the voting stock of that
company; therefore, the Johnson family may be deemed under the 1940
Act to form a controlling group with respect to FMR Corp.
FMR may use its broker-dealer affiliates and other firms that sell
fund shares to carry out a fund's transactions, provided that the fund
receives brokerage services and commission rates comparable to those
of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
BOND FUNDS IN GENERAL. The yield and share price of a bond fund change
daily based on changes in interest rates and market conditions, and in
response to other economic, political or financial events. The types
and maturities of the securities a bond fund purchases and the credit
quality of their issuers will impact a bond fund's reaction to these
events.
The total return from a bond includes both income and price gains or
losses. While income is the most important component of bond returns
over time, a bond fund's emphasis on income does not mean the fund
invests only in the highest-yielding bonds available, or that it can
avoid losses of principal.
INTEREST RATE RISK. In general, bond prices rise when interest rates
fall and fall when interest rates rise. Longer-term bonds are usually
more sensitive to interest rate changes. In other words, the longer
the maturity of a bond, the greater the impact a change in interest
rates is likely to have on the bond's price. In addition, short-term
interest rates and long-term interest rates do not necessarily move in
the same amount or in the same direction. A short-term bond tends to
react to changes in short-term interest rates and a long-term bond
tends to react to changes in long-term interest rates.
ISSUER RISK. The price of a bond is affected by the credit quality of
its issuer. Changes in the financial condition of an issuer, changes
in general economic conditions, and changes in specific economic
conditions that affect a particular type of issuer can impact the
credit quality of an issuer. Lower quality bonds generally tend to be
more sensitive to these changes than higher quality bonds.
MUNICIPAL MARKET RISK. Municipal securities are backed by the entity
that issued them and/or other revenue streams. Municipal security
values may be significantly affected by political changes as well as
uncertainties in the municipal market related to taxation or the
rights of municipal securities holders. The credit quality of many
municipal securities is enhanced by insurance guaranteeing the timely
payment of interest and repayment of principal. Due to the relatively
small number of municipal insurers, changes in the financial condition
of an individual municipal insurance provider may affect the municipal
market as a whole.
FIDELITY'S APPROACH TO BOND FUNDS. In managing bond funds, FMR selects
a benchmark index which is representative of the universe of
securities in which a fund invests. FMR uses this benchmark as a guide
in structuring the fund and selecting its investments.
FMR allocates assets among different market sectors (for example,
general obligation bonds of a state or bonds financing a specific
project) and different maturities based on its view of the relative
value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that
it believes will provide the best balance between risk and return
within the universe of securities in which the fund invests. FMR's
evaluation of a potential investment includes an analysis of the
credit quality of the issuer, its structural features, its current
price compared to FMR's estimate of its long-term value, and any
short-term trading opportunities resulting from market inefficiencies.
SPARTAN INTERMEDIATE MUNICIPAL INCOME seeks high current income that
is free from federal income tax, consistent with preservation of
capital, by investing in investment-grade municipal securities under
normal conditions. The benchmark index for the fund is the Lehman
Brothers 1-17 Year Municipal Bond Index, a benchmark of
investment-grade municipal bonds with maturities between one and 17
years. FMR manages the fund to have similar overall interest rate risk
to the Index. As of December 31, 1997, the dollar-weighted average
maturity of the fund and the Index was approximately 8.0 and
8.5 years, respectively. In addition, the fund normally
maintains a dollar-weighted average maturity between three and 10
years.
FMR normally invests at least 80% of the fund's assets in municipal
securities whose interest is free from federal income tax.
SPARTAN MUNICIPAL INCOME seeks high current income that is free from
federal income tax by investing in investment-grade municipal
securities under normal conditions. The benchmark index for the fund
is the Lehman Brothers Municipal Bond Index, a benchmark of
investment-grade municipal bonds with maturities of one year or more.
FMR manages the fund to have similar overall interest rate risk to the
Index. As of November 30, 1997, the dollar-weighted average maturity
of the fund and the Index was approximately 12.6 and
14.0 years, respectively.
FMR normally invests so that at least 80% of the fund's income is free
from federal income tax.
FMR may invest all of each fund's assets in municipal securities
issued to finance private activities. The interest from these
securities is a tax-preference item for purposes of the federal
alternative minimum tax.
FMR may use various techniques to hedge a portion of a fund's risks,
but there is no guarantee that these strategies will work as intended.
When you sell your shares of a fund, they may be worth more or less
than what you paid for them.
FMR normally invests each fund's assets according to its investment
strategy and does not expect to invest in federally taxable
obligations. Each fund also reserves the right to invest without
limitation in short-term instruments, to hold a substantial amount of
uninvested cash, or to invest more than normally permitted in
federally taxable obligations for temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of each fund's limitations and more
detailed information about each fund's investments are contained in a
fund's SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with a fund's
investment objective and policies and that doing so will help a fund
achieve its goal. Fund holdings and recent investment strategies are
detailed in each fund's financial reports, which are sent to
shareholders twice a year. For a free SAI or financial report, call
1-800-544-8888.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers
to borrow money from investors. The issuer generally pays the investor
a fixed, variable, or floating rate of interest, and must repay the
amount borrowed at maturity. Some debt securities, such as zero coupon
bonds, do not pay current interest, but are sold at a discount from
their face values.
Debt securities have varying levels of sensitivity to changes in
interest rates and varying degrees of credit quality. In general, bond
prices rise when interest rates fall, and fall when interest rates
rise. Longer-term bonds and zero coupon bonds are generally more
sensitive to interest rate changes.
In addition, bond prices are also affected by the credit quality of
the issuer. Investment-grade debt securities are medium- and
high-quality securities. Some, however, may possess speculative
characteristics, and may be more sensitive to economic changes and to
changes in the financial condition of issuers.
RESTRICTIONS: Spartan Intermediate Municipal Income invests only in
investment-grade securities.
Spartan Municipal Income normally invests in investment-grade
securities, but reserves the right to invest up to 5% of its assets in
below investment-grade securities (sometimes called "junk bonds").
A security is considered to be investment-grade if it is rated
investment-grade by Moody's Investors Service, Standard & Poor's, Duff
& Phelps Credit Rating Co., or Fitch IBCA, Inc., or is unrated
but judged by FMR to be of equivalent quality.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of
credit and liquidity enhancement, including letters of credit,
guarantees, puts and demand features, and insurance, provided by
foreign or domestic entities such as banks and other financial
institutions. These arrangements expose a fund to the credit risk of
the entity providing the credit or liquidity support. Changes in the
credit quality of the provider could affect the value of the security
and a fund's share price. In addition, in the case of foreign
providers of credit or liquidity support, extensive public information
about the provider may not be available, and unfavorable political,
economic, or governmental developments could affect its ability to
honor its commitment.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
or private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities.
They may be fully or partially backed by the local government, or by
the credit of a private issuer or the current or anticipated revenues
from specific projects or assets. Because many municipal securities
are issued to finance similar types of projects, especially those
relating to education, health care, housing, transportation, and
utilities, the municipal markets can be affected by conditions in
those sectors. In addition, all municipal securities may be affected
by uncertainties regarding their tax status, legislative changes, or
rights of municipal securities holders. A municipal security may be
owned directly or through a participation interest.
ASSET-BACKED SECURITIES include interests in pools of purchase
contracts, financing leases, or sales agreements entered into by
municipalities. The value of these securities depends on many factors,
including changes in interest rates, the availability of information
concerning the pool and its structure, the credit quality of the
underlying assets, the market's perception of the servicer of the
pool, and any credit enhancement provided. In addition, these
securities may be subject to prepayment risk.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a
benchmark rate changes. Inverse floaters have interest rates that move
in the opposite direction from a benchmark, often making the
security's market value more volatile.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire
land, equipment, or facilities. If the municipality stops making
payments or transfers its obligations to a private entity, the
obligation could lose value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories
and possessions such as Guam, the Virgin Islands, and Puerto Rico, and
their political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the
issuer or another party. In exchange for this benefit, a fund may
accept a lower interest rate. Demand features and standby commitments
are types of put features.
PRIVATE ENTITIES may be involved in some municipal securities. For
example, industrial revenue bonds are backed by private entities, and
resource recovery bonds often involve private corporations. The
viability of a project or tax incentives could affect the value and
credit quality of these securities.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices,
interest rates, or other factors that affect security values. These
techniques may involve derivative transactions such as buying and
selling options and futures contracts, entering into swap agreements,
and purchasing indexed securities.
FMR can use these practices to adjust the risk and return
characteristics of a fund's portfolio of investments. If FMR judges
market conditions incorrectly or employs a strategy that does not
correlate well with a fund's investments, these techniques could
result in a loss, regardless of whether the intent was to reduce risk
or increase return. These techniques may increase the volatility of a
fund and may involve a small investment of cash relative to the
magnitude of the risk assumed. In addition, these techniques could
result in a loss if the counterparty to the transaction does not
perform as promised.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined
by FMR, under the supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities and some
other securities may be subject to legal restrictions. Difficulty in
selling securities may result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more
than 10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading
practices in which payment and delivery for the security take place at
a later date than is customary for that type of security. The market
value of the security could change during this period.
CASH MANAGEMENT. A fund may invest in money market securities and in a
money market fund available only to funds and accounts managed by FMR
or its affiliates, whose goal is to seek a high level of current
income exempt from federal income tax while maintaining a stable $1.00
share price. A major change in interest rates or a default on the
money market fund's investments could cause its share price to change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce
the risks of investing. This may include limiting the amount of money
invested in any one issuer or, on a broader scale, in any one industry
or type of project. Economic, business, or political changes can
affect all securities of a similar type.
RESTRICTIONS: With respect to 75% of its total assets, a fund may not
purchase a security if, as a result, more than 5% would be invested in
the securities of any one issuer. This limitation does not apply to
U.S. Government securities. Each fund may invest more than 25% of its
total assets in tax-free securities that finance similar types of
projects.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR, or through reverse repurchase agreements. If a fund borrows
money, its share price may be subject to greater fluctuation until the
borrowing is paid off. If a fund makes additional investments while
borrowings are outstanding, this may be considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
SPARTAN INTERMEDIATE MUNICIPAL INCOME seeks the highest level of
income exempt from federal income tax that can be obtained, consistent
with the preservation of capital, from a diversified portfolio of
investment-grade obligations. The fund will normally invest so that at
least 80% of its assets are invested in municipal securities whose
interest is free from federal income tax.
SPARTAN MUNICIPAL INCOME seeks to provide a high current yield exempt
from federal income tax. The fund will normally invest so that at
least 80% of its income is exempt from federal income tax.
With respect to 75% of its total assets, a fund may not purchase a
security if, as a result, more than 5% would be invested in the
securities of any one issuer. This limitation does not apply to U.S.
Government securities.
Each fund may borrow only for temporary or emergency purposes, but not
in an amount exceeding 331/3% of its total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its
share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments
and business affairs. Each fund also pays OTHER EXPENSES, which are
explained on page .
FMR may, from time to time, agree to reimburse the funds for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by a fund if expenses fall below the
specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be terminated at any time without notice, can
decrease a fund's expenses and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month.
Spartan Intermediate Municipal Income's fee is calculated at an annual
rate of 0.10% of the fund's average net assets plus 5% of gross
income.
For Spartan Municipal Income, the fee is calculated by adding a group
fee rate to an individual fund fee rate, multiplying the result by the
fund's monthly average net assets and dividing by twelve. The group
fee rate is based on the average net assets of all the mutual funds
advised by FMR. This rate cannot rise above 0.37%, and it drops as
total assets under management increase.
For November 1997, the group fee rate was 0.1376%. The individual fund
fee rate is 0.25% for Spartan Municipal Income.
FMR has voluntarily agreed to limit each fund's total operating
expenses to an annual rate of 0.53% of average net assets. These
agreements will continue until December 31, 1999.
The total management fee for Spartan Intermediate Municipal Income
for the fiscal year ended December 1997 was 0.38% of the fund's
average net assets. The total management fee for Spartan Municipal
Income for the fiscal year ended November 1997 was 0.39% of the fund's
average net assets.
Beginning January 1, 1999, FIMM will have primary responsibility
for managing the funds' investments. FMR will pay FIMM 50% of its
management fee (before expense reimbursements) for FIMM's services.
OTHER EXPENSES
While the management fee is a significant component of the funds'
annual operating costs, the funds have other expenses as well.
UMB is the transfer and service agent for each fund. UMB has entered
into sub-agreements with FSC under which FSC performs transfer agency,
dividend disbursing, shareholder servicing, and accounting functions
for the funds. These services include processing shareholder
transactions, valuing each fund's investments, and calculating each
fund's share price and dividends.
Under the terms of the sub-agreements, FSC receives all related fees
paid to UMB by each fund.
For the fiscal year ended December 1997 or November 1997, as
applicable, transfer agency and pricing and bookkeeping fees paid (as
a percentage of average net assets) amounted to the following. These
amounts are before expense reductions, if any.
Transfer Agency and
Pricing and Bookkeeping
Fees Paid by Fund
Spartan Intermediate Municipal Income 0.16 %
Spartan Municipal Income 0.14 %
Each fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity. A
broker-dealer may use a portion of the commissions paid by a fund to
reduce that fund's custodian or transfer agent fees.
Each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Each plan
recognizes that FMR may use its management fee revenues, as well as
its past profits or its resources from any other source, to pay FDC
for expenses incurred in connection with the distribution of fund
shares. FMR directly, or through FDC, may make payments to third
parties, such as banks or broker-dealers, that engage in the sale of,
or provide shareholder support services for, the fund's shares.
Currently, the Board of Trustees of each fund has authorized such
payments.
For the fiscal year ended December 1997 or November 1997, the
portfolio turnover rates for Spartan Intermediate Municipal Income and
Spartan Municipal Income were 22 % and 31 %, respectively.
These rates vary from year to year.
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of
America's first mutual funds. Today, Fidelity is the largest mutual
fund company in the country, and is known as an innovative provider of
high-quality financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage
Services, Inc. (FBSI). Fidelity is also a leader in providing
tax- advantaged retirement plans for individuals investing on
their own or through their employer.
Fidelity is committed to providing investors with practical
information to make investment decisions. Based in Boston, Fidelity
provides customers with complete service 24 hours a day, 365 days a
year, through a network of telephone service centers around the
country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity
has over 80 walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend
to purchase individual securities as part of your total investment
portfolio, you may consider investing in a fund through a brokerage
account.
You may purchase or sell shares of the funds through an investment
professional, including a broker, who may charge you a transaction fee
for this service. If you invest through FBSI, another financial
institution, or an investment professional, read their program
materials for any special provisions, additional service features or
fees that may apply to your investment in a fund. Certain features of
the fund, such as the minimum initial or subsequent investment
amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed in the table that follows.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have
two or more owners (tenants).
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and
obtain tax benefits. An individual can give up to $10,000 a year per
child without paying federal gift tax. Depending on state laws, you
can set up a custodial account under the Uniform Gifts to Minors Act
(UGMA) or the Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS
Requires a special application.
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of each fund is the fund's net asset value
per share (NAV). Each fund's shares are sold without a sales charge.
Your shares will be purchased at the next NAV calculated after your
investment is received in proper form . Each fund's NAV is
normally calculated each business day at 4:00 p.m. Eastern time.
Each fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they
would disrupt management of a fund.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application
and mail it along with your check. You may also open your account in
person or by wire as described on page . If there is no application
accompanying this prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another
Fidelity fund.
If you buy shares by check or Fidelity Money Line(registered
trademark), and then sell those shares by any method other than by
exchange to another Fidelity fund, the payment may be delayed for up
to seven business days to ensure that your previous investment has
cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $10,000
TO ADD TO AN ACCOUNT $1,000
Through regular investment plans* 500
MINIMUM BALANCE $5,000
*FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
"INVESTOR SERVICES," PAGE .
These minimums may vary for investments through a Fidelity Portfolio
Advisory Services account in either fund or a Fidelity Payroll
Deduction Program account in Spartan Intermediate Municipal Income.
Refer to the program materials for details.
<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
PHONE 1-800-544-7777
(PHONE_GRAPHIC) (SMALL SOLID BULLET) EXCHANGE FROM ANOTHER
FIDELITY FUND (SMALL SOLID BULLET) EXCHANGE FROM ANOTHER FIDELITY FUND
ACCOUNT WITH THE SAME REGISTRATION, ACCOUNT WITH THE SAME REGISTRATION,
INCLUDING NAME, ADDRESS, AND INCLUDING NAME, ADDRESS, AND
TAXPAYER ID NUMBER. TAXPAYER ID NUMBER.
(SMALL SOLID BULLET) USE FIDELITY MONEY LINE TO TRANSFER
FROM YOUR BANK ACCOUNT. CALL BEFORE
YOUR FIRST USE TO VERIFY THAT THIS
SERVICE IS IN PLACE ON YOUR ACCOUNT.
MAXIMUM MONEY LINE: UP TO
$100,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MAIL (MAIL_GRAPHIC) (SMALL SOLID BULLET) COMPLETE AND SIGN THE
APPLICATION. (SMALL SOLID BULLET) MAKE YOUR CHECK PAYABLE TO THE
MAKE YOUR CHECK PAYABLE TO THE COMPLETE NAME OF THE FUND. INDICATE
COMPLETE NAME OF THE FUND. MAIL TO YOUR FUND ACCOUNT NUMBER ON YOUR
THE ADDRESS INDICATED ON THE CHECK AND MAIL TO THE ADDRESS PRINTED
APPLICATION. ON YOUR ACCOUNT STATEMENT.
(SMALL SOLID BULLET) EXCHANGE BY MAIL: CALL
1-800-544-6666 FOR INSTRUCTIONS.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
IN PERSON (HAND_GRAPHIC) (SMALL SOLID BULLET) BRING YOUR
APPLICATION AND CHECK TO A (SMALL SOLID BULLET) BRING YOUR CHECK TO A FIDELITY INVESTOR
FIDELITY INVESTOR CENTER. CALL CENTER. CALL 1-800-544-9797 FOR THE
1-800-544-9797 FOR THE CENTER CENTER NEAREST YOU.
NEAREST YOU.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
WIRE (WIRE_GRAPHIC) (SMALL SOLID BULLET) CALL 1-800-544-7777 TO SET UP YOUR (SMALL SOLID BULLET) WIRE TO:
ACCOUNT AND TO ARRANGE A WIRE BANKERS TRUST COMPANY,
TRANSACTION. BANK ROUTING #021001033,
(SMALL SOLID BULLET) WIRE WITHIN 24 HOURS TO: ACCOUNT #00163053.
BANKERS TRUST COMPANY, SPECIFY THE COMPLETE NAME OF THE
BANK ROUTING #021001033, FUND AND INCLUDE YOUR ACCOUNT
ACCOUNT #00163053. NUMBER AND YOUR NAME.
SPECIFY THE COMPLETE NAME OF THE
FUND AND INCLUDE YOUR NEW ACCOUNT
NUMBER AND YOUR NAME.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
AUTOMATICALLY (AUTOMATIC_GRAPHIC) (SMALL SOLID BULLET) NOT AVAILABLE. (SMALL SOLID BULLET) USE FIDELITY AUTOMATIC ACCOUNT
BUILDER. SIGN UP FOR THIS SERVICE
WHEN OPENING YOUR ACCOUNT, OR CALL
1-800-544-6666 TO ADD IT.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(TDD_GRAPHIC) TDD - SERVICE FOR THE DEAF AND HEARING IMPAIRED: 1-800-544-0118
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of each fund is the fund's NAV.
Your shares will be sold at the next NAV calculated after your order
is received in proper form. Each fund's NAV is normally
calculated each business day at 4:00 p.m. Eastern time.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least
$5,000 worth of shares in the account to keep it open.
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to
sign up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of
shares,
(small solid bullet) Your account registration has changed within the
last 30 days,
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address),
(small solid bullet) The check is being made payable to someone other
than the account owner, or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be
redeemed, and
(small solid bullet) Any other applicable requirements listed in the
table that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it
to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited
number of checks. Do not, however, try to close out your account by
check.
ACCOUNT TYPE SPECIAL REQUIREMENTS
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PHONE 1-800-544-777
(PHONE_GRAPHIC) ALL ACCOUNT TYPES (SMALL SOLID BULLET) MAXIMUM CHECK REQUEST: $100,000.
(SMALL SOLID BULLET) FOR MONEY LINE TRANSFERS TO YOUR BANK ACCOUNT;
MINIMUM: $10; MAXIMUM: UP TO $100,000.
(SMALL SOLID BULLET) YOU MAY EXCHANGE TO OTHER FIDELITY FUNDS IF
BOTH ACCOUNTS ARE REGISTERED WITH THE SAME
NAME(S), ADDRESS, AND TAXPAYER ID NUMBER.
MAIL OR IN PERSON
(MAIL_GRAPHIC)
(HAND_GRAPHIC) INDIVIDUAL, JOINT TENANT, (SMALL SOLID BULLET) THE LETTER OF INSTRUCTION MUST BE SIGNED BY ALL
SOLE PROPRIETORSHIP, PERSONS REQUIRED TO SIGN FOR TRANSACTIONS,
UGMA, UTMA EXACTLY AS THEIR NAMES APPEAR ON THE ACCOUNT.
TRUST (SMALL SOLID BULLET) THE TRUSTEE MUST SIGN THE LETTER INDICATING
CAPACITY AS TRUSTEE. IF THE TRUSTEE'S NAME IS NOT
IN THE ACCOUNT REGISTRATION, PROVIDE A COPY OF THE
TRUST DOCUMENT CERTIFIED WITHIN THE LAST 60 DAYS.
BUSINESS OR ORGANIZATION (SMALL SOLID BULLET) AT LEAST ONE PERSON AUTHORIZED BY CORPORATE
RESOLUTION TO ACT ON THE ACCOUNT MUST SIGN THE
LETTER.
(SMALL SOLID BULLET) INCLUDE A CORPORATE RESOLUTION WITH CORPORATE
SEAL OR A SIGNATURE GUARANTEE.
EXECUTOR, ADMINISTRATOR, (SMALL SOLID BULLET) CALL 1-800-544-6666 FOR INSTRUCTIONS.
CONSERVATOR, GUARDIAN
WIRE (WIRE_GRAPHIC) ALL ACCOUNT TYPES (SMALL SOLID BULLET) YOU MUST SIGN UP FOR THE WIRE FEATURE BEFORE
USING IT. TO VERIFY THAT IT IS IN PLACE, CALL
1-800-544-6666. MINIMUM WIRE: $5,000.
(SMALL SOLID BULLET) YOUR WIRE REDEMPTION REQUEST MUST BE RECEIVED
IN PROPER FORM BY FIDELITY BEFORE 4:00 P.M.
EASTERN TIME FOR MONEY TO BE WIRED ON THE
NEXT BUSINESS DAY.
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CHECK (CHECK_GRAPHIC) ALL ACCOUNT TYPES (SMALL SOLID BULLET) MINIMUM CHECK: $1,000.
(SMALL SOLID BULLET) ALL ACCOUNT OWNERS MUST SIGN A SIGNATURE CARD
TO RECEIVE A CHECKBOOK.
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(TDD_GRAPHIC) TDD - SERVICE FOR THE DEAF AND HEARING IMPAIRED: 1-800-544-0118
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INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your
account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365
days a year. Whenever you call, you can speak with someone equipped to
provide the information or service you need.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
TOUCHTONE XPRESSSM
1-800-544-5555
AUTOMATED SERVICE
(checkmark)
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your
account registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in the fund. Call 1-800-544-6666 if you need copies
of financial reports, prospectuses, or historical account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of
other Fidelity funds by telephone or in writing.
Note that exchanges out of a fund are limited to four per calendar
year, and that they may have tax consequences for you. For details on
policies and restrictions governing exchanges, including circumstances
under which a shareholder's exchange privilege may be suspended or
revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from
your account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer
money by phone between your bank account and your fund account. Most
transfers are complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money
regularly. Fidelity offers convenient services that let you transfer
money into your fund account, or between fund accounts, automatically.
While regular investment plans do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for a home, educational expenses, and other
long-term financial goals.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 MONTHLY OR QUARTERLY (SMALL SOLID BULLET) FOR A NEW ACCOUNT, COMPLETE THE APPROPRIATE SECTION ON THE FUND
APPLICATION.
(SMALL SOLID BULLET) FOR EXISTING ACCOUNTS, CALL 1-800-544-6666 FOR AN APPLICATION.
(SMALL SOLID BULLET) TO CHANGE THE AMOUNT OR FREQUENCY OF YOUR INVESTMENT, CALL
1-800-544-6666 AT LEAST THREE BUSINESS DAYS PRIOR TO YOUR NEXT
SCHEDULED INVESTMENT DATE.
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DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A
FIDELITY FUNDA
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 EVERY PAY PERIOD (SMALL SOLID BULLET) CHECK THE APPROPRIATE BOX ON THE FUND APPLICATION, OR CALL
1-800-544-6666 FOR AN AUTHORIZATION FORM.
(SMALL SOLID BULLET) CHANGES REQUIRE A NEW AUTHORIZATION FORM.
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FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY
FUND
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Monthly, bimonthly, (small solid bullet) To establish, call 1-800-544-6666 after both accounts are
quarterly, or annually opened.
(small solid bullet) To change the amount or frequency of your investment, call
1-800-544-6666.
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A BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE
APPROPRIATE CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income
and capital gains to shareholders each year. Income dividends are
declared daily and paid monthly. Capital gains are normally
distributed in February and December for Spartan Intermediate
Municipal Income and in January and December for Spartan Municipal
Income.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on
the application, call 1-800-544-6666 for instructions. Each fund
offers four options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each
dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions will be reinvested at the NAV as of
the date the fund deducts the distribution from its NAV. The mailing
of distribution checks will begin within seven days, or longer for a
December ex-dividend date.
UNDERSTANDING
DISTRIBUTIONS
AS A FUND SHAREHOLDER, YOU ARE
ENTITLED TO YOUR SHARE OF THE
FUND'S NET INCOME AND GAINS
ON ITS INVESTMENTS. THE FUND
PASSES ITS EARNINGS ALONG TO ITS
INVESTORS AS DISTRIBUTIONS.
EACH FUND EARNS INTEREST FROM
ITS INVESTMENTS. THESE ARE
PASSED ALONG AS DIVIDEND
DISTRIBUTIONS. THE FUND MAY
REALIZE CAPITAL GAINS IF IT SELLS
SECURITIES FOR A HIGHER PRICE
THAN IT PAID FOR THEM. THESE
ARE PASSED ALONG AS CAPITAL
GAIN DISTRIBUTIONS.
(CHECKMARK)
TAXES
As with any investment, you should consider how an investment in a
tax-free fund could affect you. Below are some of the funds' tax
implications.
TAXES ON DISTRIBUTIONS. Interest income that a fund earns is
distributed to shareholders as income dividends. Interest that is
federally tax-free remains tax-free when it is distributed.
However, gain on the sale of tax-free bonds results in taxable
distributions. Short-term capital gains and a portion of the gain on
bonds purchased at a discount are distributed as dividends and taxed
as ordinary income. Capital gain distributions are taxed as long-term
capital gains. These distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were
paid on December 31. Fidelity will send you a statement showing the
tax status of distributions, and will report to the IRS the amount of
any taxable distributions, paid to you in the previous year.
The interest from some municipal securities is subject to the federal
alternative minimum tax. Each fund may invest up to 100% of its assets
in these securities. Individuals who are subject to the tax must
report this interest on their tax returns.
A portion of a fund's dividends may be free from state or local taxes.
Income from investments in your state are often tax-free to you. Each
year, Fidelity will send you a breakdown of your fund's income from
each state to help you calculate your taxes.
During the fiscal year ended December 1 997, 100% of Spartan
Intermediate Municipal Income's income dividends was free from federal
income tax and 3.13% of the f und's income dividends were
subject to the federal alternative minimum tax. During the fiscal year
ended November 1997, 100 % of Spartan Municipal Income's income
dividends was free from federal income tax and 14.43% of the
fund's income dividends were subject to the federal alternative
minimum tax.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or
loss is the difference between the cost of your shares and the price
you receive when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a
confirmation statement showing how many shares you sold and at what
price. You will also receive a consolidated transaction statement
every January. However, it is up to you or your tax preparer to
determine whether this sale resulted in a capital gain and, if so, the
amount of tax to be paid. Be sure to keep your regular account
statements; the information they contain will be essential in
calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a fund has realized but
not yet distributed income or capital gains, you will pay the full
price for the shares and then receive a portion of the price back in
the form of a taxable distribution.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange
(NYSE) is open. FSC normally calculates each fund's NAV as of the
close of business of the NYSE, normally 4:00 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the
number of shares outstanding.
Each fund's assets are valued primarily on the basis of information
furnished by a pricing service or market quotations, if available, or
by another method that the Board of Trustees believes accurately
reflects fair value.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct
and that you are not subject to 31% backup withholding for failing to
report income to the IRS. If you violate IRS regulations, the IRS can
require a fund to withhold 31% of your taxable distributions and
redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. You
should verify the accuracy of your confirmation statements immediately
after you receive them. If you do not want the ability to redeem and
exchange by telephone, call Fidelity for instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail or by visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT to suspend the offering of shares
for a period of time.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next NAV calculated after your investment is received in
proper form . Note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees a fund or
its transfer agent has incurred.
(small solid bullet) You begin to earn dividends as of the first
business day following the day of your purchase.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money
order, U.S. Treasury check, Federal Reserve check, or direct deposit
instead.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements
with FDC may enter confirmed purchase orders on behalf of customers by
phone, with payment to follow no later than the time when a fund is
priced on the following business day. If payment is not received by
that time, the financial institution could be held liable for
resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received in proper
form . Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed to
you on the next business day, but if making immediate payment could
adversely affect a fund, it may take up to seven days to pay you.
(small solid bullet) Shares will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday
will continue to earn dividends until the next business day.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day
after your phone call.
(small solid bullet) Each fund may hold payment on redemptions until
it is reasonably satisfied that investments made by check or Fidelity
Money Line have been collected, which can take up to seven business
days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) If you sell shares by writing a check and the
amount of the check is greater than the value of your account, your
check will be returned to you and you may be subject to additional
charges.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500, subject to an
annual maximum charge of $24.00 per shareholder. It is expected that
accounts will be valued on the second Friday in November of each year.
Accounts opened after September 30 will not be subject to the fee for
that year. The fee, which is payable to the transfer agent, is
designed to offset in part the relatively higher costs of servicing
smaller accounts. This fee will not be deducted from Fidelity
brokerage accounts, retirement accounts (except non-prototype
retirement accounts), accounts using regular investment plans, or if
total assets with Fidelity exceed $30,000. Eligibility for the $30,000
waiver is determined by aggregating Fidelity accounts maintained by
FSC or FBSI which are registered under the same social security number
or which list the same social security number for the custodian of a
Uniform Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $5,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send
the proceeds to you. Your shares will be redeemed at the NAV on the
day your account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to
qualified recipients who support the sale of shares of the funds
without reimbursement from the funds. Qualified recipients are
securities dealers who have sold fund shares or others, including
banks and other financial institutions, under special arrangements in
connection with FDC's sales activities. In some instances, these
incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or
expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a
fund for shares of other Fidelity funds. However, you should note the
following:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) If you exchange into a fund with a sales charge,
you pay the percentage-point difference between that fund's sales
charge and any sales charge you have previously paid in connection
with the shares you are exchanging. For example, if you had already
paid a sales charge of 2% on your shares and you exchange them into a
fund with a 3% sales charge, you would pay an additional 1% sales
charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund
performance and shareholders, each fund reserves the right to
temporarily or permanently terminate the exchange privilege of any
investor who makes more than four exchanges out of the fund per
calendar year. Accounts under common ownership or control, including
accounts with the same taxpayer identification number, will be counted
together for purposes of the four exchange limit.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would
be unable to invest the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) Your exchanges may be restricted or refused if a
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges
that coincides with a "market timing" strategy may be disruptive to a
fund.
Although the funds will attempt to give you prior notice whenever they
are reasonably able to do so, they may impose these restrictions at
any time. The funds reserve the right to terminate or modify the
exchange privilege in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to 1.00% and trading fees of up to
1.50% of the amount exchanged. Check each fund's prospectus for
details.
This prospectus is printed on recycled paper using soy-based inks.
Fidelity Advisor Municipal Bond Fund
(A Fund of Fidelity Municipal Trust)
Spartan Municipal Income Fund
(A Fund of Fidelity Court Street Trust)
FORM N-14
STATEMENT OF ADDITIONAL INFORMATION
June 8, 1998
This Statement of Additional Information, relates to the proposed
reorganization whereby Spartan Municipal Income Fund (Spartan
Municipal Income), a fund of Fidelity Court Street Trust, would
acquire all of the assets of Fidelity Advisor Municipal Bond Fund
(Advisor Municipal Bond), a fund of Fidelity Municipal Trust, and
assume all of Advisor Municipal Bond's liabilities in exchange solely
for shares of beneficial interest in Spartan Municipal Income.
This Statement of Additional Information consists of this cover page
and the following described documents, each of which is incorporated
herein by reference:
1. The Statement of Additional Information of Spartan Municipal
Income dated March 19, 1998, which was previously filed via EDGAR
(Accession No. 0000205323-98-000012).
2. The Prospectus of Class A, Class T and Class B of Advisor
Municipal Bond dated October 31, 1997, which was previously filed via
EDGAR (Accession No. 0000722574-97-000311).
3. The Prospectus of Institutional Class of Advisor Municipal Bond
dated October 31, 1997, which was previously filed via EDGAR
(Accession No. 0000722574-97-000311).
4. The Prospectus of Fidelity Municipal Bond Fund (Initial Class) of
Advisor Municipal Bond dated February 28, 1998, which was previously
filed via EDGAR (Accession No. 0000722574-98-000052).
5. The Statement of Additional Information of Advisor Municipal Bond
dated February 28, 1998, which was previously filed via EDGAR
(Accession No. 0000722574-98-000052).
6. Supplement to the Prospectus of Class A, Class T and Class B of
Advisor Municipal Bond dated February 4, 1997, which was previously
filed via EDGAR (Accession No. 0000722574-98-000033).
7. Supplement to the Prospectus of Institutional Class of Advisor
Municipal Bond dated February 12, 1997, which was previously filed via
EDGAR (Accession No. 0000035373-98-000002).
8. Supplement to the Statement of Additional Informational of Class
A, Class T and Class B of Advisor Municipal Bond dated February 4,
1997, which was previously filed via EDGAR (Accession No.
0000722574-98-000022).
9. The Financial Statements included in the Annual Report of Spartan
Municipal Income for the fiscal year ended November 30, 1997, which
was previously filed via EDGAR (Accession No. 0000722574-98-000027).
10. The Financial Statements included in the Annual Reports of
Advisor Municipal Bond for the fiscal year ended December 31, 1997,
which was previously filed via EDGAR (Accession No.
0000356494-98-000027).
11. The Pro Forma Financial Statements for Advisor Municipal Bond and
Spartan Municipal Income for the period ended November 30, 1997.
This Statement of Additional Information is not a prospectus. A Proxy
Statement and Prospectus dated June 8, 1998, relating to the
above-referenced matter may be obtained from Fidelity Distributors
Corporation, 82 Devonshire Street, Boston, Massachusetts, 02109. This
Statement of Additional Information relates to, and should be read in
conjunction with, such Proxy Statement and Prospectus.
PART C. OTHER INFORMATION
Item 15. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification
shall be provided to any past or present Trustee or officer. It states
that the Registrant shall indemnify any present or past Trustee or
officer to the fullest extent permitted by law against liability and
all expenses reasonably incurred by him in connection with any claim,
action, suit, or proceeding in which he is involved by virtue of his
service as a Trustee, an officer, or both. Additionally, amounts paid
or incurred in settlement of such matters are covered by this
indemnification. Indemnification will not be provided in certain
circumstances, however. These include instances of willful
misfeasance, bad faith, gross negligence, and reckless disregard of
the duties involved in the conduct of the particular office involved.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense arising by reason of
any person acquiring any shares, based upon the ground that the
registration statement, Prospectus, Statement of Additional
Information, shareholder reports or other information filed or made
public by the Registrant included a materially misleading statement or
omission. However, the Registrant does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with,
information furnished to the Registrant by or on behalf of the
Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of
willful misfeasance, bad faith, gross negligence, and reckless
disregard of the obligations and duties under the Distribution
Agreement.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("Service") is appointed sub-transfer agent, the Transfer Agent agrees
to indemnify Service for Service's losses, claims, damages,
liabilities and expenses (including reasonable counsel fees and
expenses) (losses) to the extent that the Transfer Agent is entitled
to and receives indemnification from the Portfolio for the same
events. Under the Transfer Agency Agreement, the Registrant agrees to
indemnify and hold the Transfer Agent harmless against any losses,
claims, damages, liabilities, or expenses (including reasonable
counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other
than the Registrant, including by a shareholder which names the
Transfer Agent and/or the Registrant as a party and is not based on
and does not result from the Transfer Agent's willful misfeasance, bad
faith or negligence or reckless disregard of duties, and arises out of
or in connection with the Transfer Agent's performance under the
Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by the Transfer Agent's willful misfeasance, bad faith
or negligence or reckless disregard of duties) which results from the
negligence of the Registrant, or from the Transfer Agent's acting upon
any instruction(s) reasonably believed by it to have been executed or
communicated by any person duly authorized by the Registrant, or as a
result of the Transfer Agent's acting in reliance upon advice
reasonably believed by the Transfer Agent to have been given by
counsel for the Registrant, or as a result of the Transfer Agent's
acting in reliance upon any instrument or stock certificate reasonably
believed by it to have been genuine and signed, countersigned or
executed by the proper person.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed sub-transfer agent,
the Transfer Agent agrees to indemnify FIIOC for FIIOC's losses,
claims, damages, liabilities and expenses (including reasonable
counsel fees and expenses) (losses) to the extent that the Transfer
Agent is entitled to and receives indemnification from the Portfolio
for the same events. Under the Transfer Agency Agreement, the
Registrant agrees to indemnify and hold the Transfer Agent harmless
against any losses, claims, damages, liabilities, or expenses
(including reasonable counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other
than the Registrant, including by a shareholder which names the
Transfer Agent and/or the Registrant as a party and is not based on
and does not result from the Transfer Agent's willful misfeasance, bad
faith or negligence or reckless disregard of duties, and arises out of
or in connection with the Transfer Agent's performance under the
Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by the Transfer Agent's willful misfeasance, bad faith
or negligence or reckless disregard of duties) which results from the
negligence of the Registrant, or from the Transfer Agent's acting upon
any instruction(s) reasonably believed by it to have been executed or
communicated by any person duly authorized by the Registrant, or as a
result of the Transfer Agent's acting in reliance upon advice
reasonably believed by the Transfer Agent to have been given by
counsel for the Registrant, or as a result of the Transfer Agent's
acting in reliance upon any instrument or stock certificate reasonably
believed by it to have been genuine and signed, countersigned or
executed by the proper person.
Item 16. Exhibits
(1) Amended and Restated Declaration of Trust, dated January 19, 1995,
is incorporated herein by reference to Exhibit 1(a) of Post-Effective
Amendment No. 55.
(2) Bylaws of the Trust are incorporated herein by reference to
Exhibit 2(a) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(3) Not applicable.
(4) Agreement and Plan of Reorganization between Fidelity Municipal
Trust: Fidelity Advisor Municipal Bond Fund and Fidelity Court Street
Trust: Spartan Municipal Income Fund is filed herein as Exhibit 1 to
the Proxy Statement and Prospectus.
(5) ARTICLE VIII of the Amended and Restated Declaration of Trust,
dated January 19, 1995, is incorporated herein by reference to Exhibit
1(a) of Post-Effective Amendment No.55.
(6)(a) Management Contract between Fidelity High Yield Tax-Free
Portfolio (currently known as Spartan Municipal Income Fund) and
Fidelity Management & Research Company, dated December 1, 1994, is
incorporated herein by reference to Exhibit 5(a) of Post-Effective
Amendment No. 54.
(b) Management Contract between Spartan Florida Municipal Income
Portfolio (currently known as Spartan Florida Municipal Income Fund)
and Fidelity Management & Research Company, dated February 20, 1992,
is incorporated herein by reference to Exhibit 5(b) of Post-Effective
Amendment No. 53.
(c) Management Contract between Spartan New Jersey Municipal High
Yield Portfolio (currently known as Spartan New Jersey Municipal
Income Fund) and Fidelity Management & Research Company, dated January
1, 1992, is incorporated herein by reference to Exhibit 5(c) of
Post-Effective Amendment No. 54.
(d) Management Contract between Spartan Connecticut Municipal High
Yield Portfolio (currently known as Spartan Connecticut Municipal
Income Fund) and Fidelity Management & Research Company, dated January
1, 1992, is incorporated herein by reference to Exhibit 5(d) of
Post-Effective Amendment No. 55.
(7)(a) General Distribution Agreement between Fidelity High Yield
Municipals (currently known as Spartan Municipal Income Fund) and
Fidelity Distributors Corporation, dated April 1, 1987, is
incorporated herein by reference to Exhibit 6(a) of Post-Effective
Amendment No. 54.
(b) General Distribution Agreement between Fidelity New Jersey
Tax-Free High Yield Portfolio (currently known as Spartan New Jersey
Municipal Income Fund) and Fidelity Distributors Corporation, dated
August 10, 1987, is incorporated herein by reference to Exhibit 6(b)
of Post-Effective Amendment No. 54.
(c) General Distribution Agreement between Fidelity Connecticut
Tax-Free Portfolio (currently known as Spartan Connecticut Municipal
Income Fund) and Fidelity Distributors Corporation, dated October 15,
1987, is incorporated herein by reference to Exhibit 6(c) of
Post-Effective Amendment No. 55.
(d) Amendment to the General Distribution Agreement between Fidelity
High Yield Municipals (currently known as Spartan Municipal Income
Fund) and Fidelity Distributors Corporation, dated January 1, 1988, is
incorporated herein by reference to Exhibit 6(d) of Post-Effective
Amendment No. 54.
(e) Amendment to the General Distribution Agreement between Fidelity
New Jersey Tax-Free High Yield Portfolio (currently known as Spartan
New Jersey Municipal Income Fund) and Fidelity Distributors
Corporation, dated January 1, 1988, is incorporated herein by
reference to Exhibit 6(e) of Post-Effective Amendment No. 54.
(f) Amendment to the General Distribution Agreement between Fidelity
Connecticut Municipal High Yield Portfolio (currently known as Spartan
Connecticut Municipal Income Fund) and Fidelity Distributors
Corporation, dated May 10, 1994, is incorporated herein by reference
to Exhibit 6(f) of Post-Effective Amendment No. 55.
(g) General Distribution Agreement between Spartan Florida Municipal
Income Portfolio (currently known as Spartan Florida Municipal Income
Fund) and Fidelity Distributors Corporation, dated February 20, 1992,
is incorporated herein by reference to Exhibit 6(g) of Post-Effective
Amendment No. 53.
(h) Amendments to the General Distribution Agreement between Fidelity
Court Street Trust on behalf of Spartan New Jersey Municipal Income
Fund and Fidelity Distributors Corporation, dated March 14, 1996 and
July 15, 1996, are incorporated herein by reference to Exhibit 6(b) of
Post-Effective Amendment No. 61.
(i) Amendments to the General Distribution Agreement between Fidelity
Court Street Trust on behalf of Spartan Municipal Income Fund, Spartan
Connecticut Municipal Income Fund, Spartan Florida Municipal Income
Fund and Fidelity Distributors Corporation, dated March 14, 1996 and
July 15, 1996, are incorporated herein by reference to Exhibit 6(a) of
Post-Effective Amendment No. 61.
(8 )(a) Retirement Plan for Non-Interested Person Trustees, Directors
or General Partners, as amended on November 16, 1995, is incorporated
herein by reference to Exhibit 7(a) of Fidelity Select Portfolio's
(File No. 2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of September 14, 1995 and
amended through November 14, 1996, is incorporated herein by reference
to Exhibit 7(b) of Fidelity Aberdeen Street Trust's (File No.
33-43529) Post-Effective Amendment No. 19.
(9)(a) Custodian Agreement, Appendix B, and Appendix C, dated December
1, 1994, between UMB Bank, n.a. and the Registrant is incorporated
herein by reference to Exhibit 8 of Fidelity California Municipal
Trust's Post-Effective Amendment No. 28 (File No. 2-83367).
(b) Appendix A, dated September 18, 1997, to the Custodian Agreement,
dated December 1, 1994, between UMB Bank, n.a. and the Registrant is
incorporated herein by reference to Exhibit 8(b) of Fidelity Municipal
Trust II's Post-Effective Amendment No. 17 (File No. 33-43986).
(10)(a) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Municipal Income Fund (currently known as Spartan Municipal
Income Fund) is incorporated herein by reference to Exhibit 15(a) of
Post-Effective Amendment No. 67.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
New Jersey Municipal Income Fund is incorporated herein by reference
to Exhibit 15(b) of Post-Effective Amendment No. 67.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Connecticut Municipal Income Fund is incorporated herein by reference
as Exhibit 15(c) of Post-Effective Amendment No. 67.
(d) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Florida Municipal Income Fund is incorporated herein by reference as
Exhibit 15(d) of Post-Effective Amendment No. 67.
(11) Opinion and consent of counsel (K&L) as to the legality of shares
being registered is filed herein as Exhibit 11.
(12) Opinion and Consent of counsel (K&L) as to tax matters in
connection with the reorganization of Fidelity Advisor Municipal Bond
Fund is filed herein as Exhibit 12.
(13) Not applicable.
(14) Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit
14.
(15) Pro forma Financial Statements for the period ending November 30,
1997, are filed herein as Exhibit 15
(16) Powers of Attorney, dated December 19, 1996, March 6, 1997, and
July 17, 1997 are filed herein as Exhibit 16.
(17) Not applicable.
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of the
prospectus which is a part of this Registration Statement by any
person or party who is deemed to be an underwriter within the meaning
of Rule 145(c) of the Securities Act of 1933, the reoffering
prospectus will contain the information called for by the applicable
registration form for reoffering by persons who may be deemed
underwriters, in addition to the information called for by the other
items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as part of an amendment
to the Registration Statement and will not be used until the amendment
is effective, and that, in determining any liability under the
Securities Act of 1933, each Post-Effective Amendment shall be deemed
to be a new Registration Statement for the securities offered therein,
and the offering of securities at that time shall be deemed to be the
initial bona fide offering of them.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, and the
Commonwealth of Massachusetts, on the 27 day of April 1998.
Fidelity Court Street Trust
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d (dagger) President and Trustee April 27, 1998
Edward C. Johnson 3d (Principal Executive Officer)
/s/Richard A. Silver Treasurer April 27, 1998
Richard A. Silver
/s/Robert C. Pozen Trustee April 27, 1998
Robert C. Pozen
/s/Ralph F. Cox * Trustee April 27, 1998
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee April 27, 1998
Phyllis Burke Davis
/s/Robert M. Gates ** Trustee April 27, 1998
Robert M. Gates
/s/E. Bradley Jones * Trustee April 27, 1998
E. Bradley Jones
/s/Donald J. Kirk * Trustee April 27, 1998
Donald J. Kirk
/s/Peter S. Lynch * Trustee April 27, 1998
Peter S. Lynch
/s/Marvin L. Mann * Trustee April 27, 1998
Marvin L. Mann
/s/William O. McCoy * Trustee April 27, 1998
William O. McCoy
/s/Gerald C. McDonough * Trustee April 27, 1998
Gerald C. McDonough
/s/Thomas R. Williams * Trustee April 27, 1998
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated March 6, 1997 and filed herewith.
Exhibit 11
KIRKPATRICK & LOCKHART LLP
1800 MASSACHUSETTS AVENUE, N.W.
2ND FLOOR
WASHINGTON, D.C. 20036-1800
TELEPHONE (202) 778-9000
FACSIMILE (202) 778-9100
April 15, 1998
Fidelity Court Street Trust
82 Devonshire Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
You have requested our opinion regarding certain matters in
connection with the issuance of shares of Spartan Municipal Income
Fund ("Municipal Income"), a series of Fidelity Court Street Trust
(the "Trust"), pursuant to a Registration Statement to be filed by the
Trust on Form N-14 ("Registration Statement") under the Securities Act
of 1933 ("1933 Act") in connection with the proposed acquisition by
Municipal Income of all of the assets of Fidelity Advisor Municipal
Bond Fund (the "Merged Fund"), a series of Fidelity Municipal Trust,
and the assumption by Municipal Income of the liabilities of the
Merged Fund solely in exchange for Municipal Income shares. This
transfer will be effected under an Agreement and Plan of
Reorganization.
In connection with our services as counsel for the Trust, we have
examined, among other things, originals or copies of such documents,
certificates and corporate and other records as we deemed necessary or
appropriate for purposes of this opinion. We have assumed the
genuineness of all signatures, the authenticity of all documents
submitted to us, the conformity to original documents of all documents
presented to us as copies thereof and the authenticity of the original
documents from which any such copies were made, which assumptions we
have not independently verified. As to various matters of fact
material to this opinion, we have relied upon statements and
certificates of officers of the Trust. Based upon this examination,
we are of the opinion that the shares to be issued pursuant to the
Registration Statement, when issued upon the terms provided in the
Registration Statement, subject to compliance with the 1933 Act, the
Investment Company Act of 1940, and applicable state law regulating
the offer and sale of securities, will be legally issued, fully paid,
and non-assessable.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of a business
trust may be held personally liable for the obligations of the Trust.
The Trust's Declaration of Trust provides that the Trustees shall have
no power to bind any shareholder personally or to call upon any
shareholder for the payment of any sum of money or assessment
whatsoever other than such as the shareholder may at any time
personally agree to pay by way of subscription for any shares or
otherwise. The Declaration of Trust also requires that every note,
bond, contract or other undertaking issued by or on behalf of the
Trust or the Trustees relating to the Trust shall include a recitation
limiting the obligation represented thereby to the Trust and its
assets (although the omission of such recitation shall not operate to
bind any shareholder). The Declaration of Trust provides that: (i) in
case any shareholder or any former shareholder of any Series of the
Trust shall be held personally liable solely by reason of his being or
having been a shareholder and not because of his acts or omissions or
for some other reason, the shareholder or former shareholder shall be
entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense
arising from such liability; and (ii) a Series shall, upon request by
the shareholder, assume the defense of any claim made against any
shareholder for any act or obligation of that Series and satisfy any
judgment thereon.
We hereby consent to the reference to our firm under the captions
"Federal Income Tax Consequences of the Reorganization," "Federal
Income Tax Considerations" and "Legal Matters" in the Proxy Statement
and Prospectus which constitute a part of the Registration Statement.
We further consent to your filing a copy of this opinion as an exhibit
to the Registration Statement.
Yours truly,
/s/Kirkpatrick & Lockhart LLP
Kirkpatrick & Lockhart LLP
Exhibit 12
KIRKPATRICK & LOCKHART LLP
1500 OLIVER BUILDING
PITTSBURGH, PENNSYLVANIA 15222-2312
April 20, 1998
Fidelity Municipal Trust Fidelity Court Street Trust
82 Devonshire Street
Boston, MA 02109
Ladies and Gentlemen:
Fidelity Municipal Trust ("FMT"), a Massachusetts business trust, on
behalf of Fidelity Advisor Municipal Bond Fund ("Acquired"), a series
of FMT, and Fidelity Court Street Trust ("FCST"), a Massachusetts
business trust, on behalf of Spartan Municipal Income Fund
("Acquiring"), a series of FCST, have requested our opinion as to
certain federal income tax consequences of a transaction
("Reorganization") in which Acquiring will acquire all of the assets
and assume all of the liabilities of Acquired in exchange solely for
shares of beneficial interest in Acquiring ("Acquiring Shares")
pursuant to an Agreement and Plan of Reorganization ("Agreement")
between Acquired and Acquiring made as of June 8, 1998.
In rendering this opinion, we have examined the Agreement, the
prospectus/proxy statement to be filed with the Securities and
Exchange Commission ("SEC") in connection with the Reorganization, the
currently effective prospectuses and statements of additional
information of Acquired and Acquiring, and such other documents as we
have deemed necessary. We have also relied, with your consent, on
certificates of officers of FMT and FCST.
OPINION
Based solely on the facts and representations set forth in the
reviewed documents and the certificates of officers of FMT and FCST,
and assuming that (i) those representations are true on the date of
the Reorganization and (ii) the Reorganization is consummated in
accordance with the Agreement, our opinion with respect to the federal
income tax consequences of the Reorganization is as follows.
1. The Reorganization will be a reorganization under section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended
("Code"), and Acquired and Acquiring will each be parties to the
Reorganization under section 368(b) of the Code.
2. No gain or loss will be recognized by Acquired upon the transfer
of all of its assets to Acquiring in exchange solely for Acquiring
Shares and Acquiring's assumption of Acquired's liabilities followed
by the distribution of those Acquiring Shares to the Acquired
shareholders in liquidation of Acquired.
3. No gain or loss will be recognized by Acquiring on the receipt of
Acquired's assets in exchange solely for Acquiring Shares and the
assumption of Acquired's liabilities.
4. The basis of Acquired's assets in the hands of Acquiring will be
the same as the basis of such assets in Acquired's hands immediately
prior to the Reorganization.
5. Acquiring's holding period in the assets to be received from
Acquired will include Acquired's holding period in such assets.
6. The Acquired shareholders will recognize no gain or loss on the
exchange of the shares of beneficial interest in Acquired ("Acquired
Shares") solely for the Acquiring Shares in the Reorganization.
7. The Acquired shareholders' basis in the Acquiring Shares to be
received by them will be the same as their basis in the Acquired
Shares to be surrendered in exchange therefor.
8. The holding period of the Acquiring Shares to be received by the
Acquired shareholders will include the holding period of the Acquired
Shares to be surrendered in exchange therefor, provided those Acquired
Shares were held as capital assets on the date of the Reorganization.
The foregoing opinion is based on, and is conditioned on the
continued applicability of, the provisions of the Code and the
regulations thereunder, case law precedent, and the Internal Revenue
Service pronouncements in existence at the date hereof. We express no
opinion as to whether Acquired will recognize gain or loss under
Section 1256 of the Code on the transfer of futures, forwards, or
options to Acquiring in the Reorganization. Nor do we express any
opinion other than those contained herein.
We consent to the inclusion of this opinion in the Registration
Statement on Form N-14 filed with the SEC and the inclusion of the
name "Kirkpatrick & Lockhart LLP" in the "Federal Income Tax
Consequences of the Reorganization," "Federal Income Tax
Considerations" and "Legal Matters" sections of that Registration
Statement.
Very truly yours,
/s/Kirkpatrick & Lockhart LLP
Kirkpatrick & Lockhart LLP
Exhibit 14
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Proxy
Statement and Prospectus (the Proxy/Prospectus) constituting part of
this Registration Statement on Form N-14 (the Registration Statement)
of Fidelity Court Street Trust: Spartan Municipal Income Fund, of our
report dated January 15, 1998 on the financial statements and
financial highlights included in the November 30, 1997 Annual Report
to Shareholders of Fidelity Court Street Trust: Spartan Municipal
Income Fund.
We also consent to the incorporation by reference in the Registration
Statement, of our reports dated February 12, 1998 on the financial
statements and financial highlights included in the December 31, 1997
Annual Reports to Shareholders of each class of Fidelity Municipal
Trust: Fidelity Advisor Municipal Bond Fund.
We further consent to the references to our Firm under the headings
"Experts" and "Financial Highlights" in the Proxy/Prospectus and to
the references to our Firm under the headings "Financial Highlights"
in the Prospectuses and "Auditor" in the Statements of Additional
Information for Fidelity Court Street Trust: Spartan Municipal Income
Fund and Fidelity Municipal Trust: Fidelity Advisor Municipal Bond
Fund, which are also incorporated by reference into the
Proxy/Prospectus.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
April 20, 1998
Exhibit 15
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SPARTAN MUNICIPAL INCOME FUND
FIDELITY ADIVSOR MUNICIPAL BOND FUND
PRO FORMA COMBINING STATEMENT OF ASSETS & LIABILITIES AS OF NOVEMBER 30, 1997
(UNAUDITED)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SPARTAN FIDELITY ADVISOR PRO FORMA PRO FORMA
MUNICIPAL INCOME MUNICIPAL BOND COMBINED ADJUSTMENTS COMBINED
ASSETS
Investment in securities, at value
- See accompanying schedule $ 2,320,518,980 $ 943,928,008 $3,264,446,988 -
$3,264,446,988
Interest receivable 32,239,033 15,205,744 47,444,777 - 47,444,777
Receivable for daily variation on - 3,969 3,969 - 3,969
futures contracts
Receivable for Investments Sold 5,902,120 498,532 6,400,652 - 6,400,652
Prepaid Expenses - 5,221 5,221 - 5,221
Other receivables 18,516 22,483 40,999 - 40,999
TOTAL ASSETS 2,358,678,649 959,663,957 3,318,342,606 - 3,318,342,606
LIABILITIES
Payable for investments
purchased
Delayed Delivery $ 34,515,703 $ 18,444,500 $ 52,960,203 - $ 52,960,203
Payable for fund shares redeemed 1,103,162 1,269,789 2,372,951 - 2,372,951
Distributions payable 2,129,327 3,611,485 5,740,812 - 5,740,812
Accrued management fee 746,241 301,762 1,048,003 - 1,048,003
Other payables and accrued 357,712 179,029 536,741 - 536,741
expenses
TOTAL LIABILITIES 38,852,145 23,806,565 62,658,710 - 62,658,710
NET ASSETS $ 2,319,826,504 $ 935,857,392 $3,255,683,896 $ - $3,255,683,896
Net Assets consist of:
Paid in capital $ 2,234,547,486 $ 890,990,070 $3,125,537,556 - $3,125,537,556
Accumulated undistributed net
realized gain (loss)
on investments (12,735,104) (11,572,775) (24,307,879) - (24,307,879)
Net unrealized appreciation
(depreciation) on
investments 98,014,122 56,440,097 154,454,219 - 154,454,219
NET ASSETS $ 2,319,826,504 $ 935,857,392 $3,255,683,896 $ - $3,255,683,896
SPARTAN
MUNICIPAL INCOME COMBINED
$2,319,826,504 $935,857,392 $3,255,683,896 3,255,683,896
NET ASSET VALUE,offering price $12.61 $12.61
and redemption price per share
Shares outstanding 183,940,016 111,198,587 295,138,603 (36,983,092) 258,155,511
Class A:
Net Assets 737,804.70 8.42
Net Asset Value and 8.42
redemption price per share
Shares outstanding 87,671.77 58,509
Maximum offering price per 8.84
share (100/95.25 of $8.42)
Class T
Net Assets 7,007,719.84 8.41
Net Asset Value and 8.41
redemption price per share
Shares outstanding 833,239.90 555,727
Maximum offering price per 8.72
share (100/96.5 of $8.41)
Class B:
Net Assets 2,134,266.53 8.41
Net Asset Value and offering 8.41
price per share (A)
Shares outstanding 253,714.74 169,252
Class C:
Net Assets 1,208,175.77 8.41
Net Asset Value and offering 8.41
price per share (A)
Shares outstanding 143,650.46 95,811
Initial Class
Net Assets 924,769,425.62 8.42
Net Asset Value, offering price 8.42
and redemption price per
share
Shares outstanding 109,880,310.31 73,336,196
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
(A) Redemption price per share is equal to net asset value less any applicable contingent deferred
sales charge.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SPARTAN MUNICIPAL INCOME FUND
FIDELITY ADIVSOR MUNICIPAL BOND FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1997
(UNAUDITED)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SPARTAN FIDELITY ADVISOR PRO FORMA PRO FORMA
MUNICIPAL INCOME MUNICIPAL BOND COMBINED ADJUSTMENTS COMBINED
INTEREST INCOME $ 9,974,240 $ 53,986,048 $153,960,288 - $153,960,288
EXPENSES
Management fee 7,134,992 3,656,357 10,791,349 - 10,791,349
Transfer agent fees:
Class A - 3,992
Class T - 1,036,671
Class B - 491
Inital Class - 926
Institutional Class - 1,673
Total Transfer Agent Fees 2,086,376 1,043,753 3,130,129 (26,771) (c) 3,103,358
Distribution fees: -
Class T - 10,889
Class B - 7,201
Inital Class - 527
Total Distribution Fees - 18,617 18,617 (18,617) (f) -
Accounting fees and expenses 475,765 287,440 763,205 (93,226) (b) 669,979
Non-interested trustees' 5,646 200 5,846 - 5,846
compensation
Custodian fees and expenses 81,727 53,231 134,958 (11,340) (c) 123,618
Registration fees
Class A - 25,049
Class T - 30,010
Class B - 32,251
Inital Class - 24,448
Institutional Class - 34,819
Total Registration Fees 152,040 146,577 298,617 21,815 (d) 320,432
Audit 67,405 52,805 120,210 (50,305) (c) 69,905
Legal 49,066 29,939 79,005 (15,000) (c) 64,005
Miscellaneous - 6,015 6,015 - 6,015
Total expenses before reductions 10,053,017 5,294,934 15,347,951 (193,444) 15,154,507
Expense reductions (11,248) (122,375) (133,623) (366,850) (e) (500,473)
Total expenses 10,041,769 5,172,559 15,214,328 (560,294) 14,654,034
NET INTEREST INCOME 89,932,471 48,813,489 138,745,960 560,294 139,306,254
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 15,819,996 7,881,503 23,701,499 - 23,701,499
Futures contracts 738,025 272,343 1,010,368 - 1,010,368
Change in net unrealized apprecation - - -
(depreciation) on:
Investment securities 19,310,613 4,851,786 24,162,399 - 24,162,399
Futures contracts 431,389 209,573 640,962 - 640,962
NET GAIN (LOSS) 36,300,023 13,215,205 49,515,228 - 49,515,228
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING
FROM OPERATIONS $126,232,494 62,028,694 188,261,188 $560,294 $188,821,482
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Scenario 1
Merger of
37 and 12
and 13 does
not get
shareholder
approval
Net Assets Nav Per Shares o/s
Share
Advisor
Municipal
Bond
Class A $737,805 $8.42 87,672
Class T $7,007,720 $8.41 833,240
Class B $2,134,267 $8.41 253,715
Institutional $1,208,176 $8.41 143,650
Class
Initial Class $924,769,426 $8.42 109,880,310
Spartan $2,319,826,504 $12.61 183,940,016
Municipal
Income
Proforma $3,255,683,896 $12.61 258,155,511 74,215,495
Combined
Scenario 2
Both
Aggressive
and Insured
(12 and 13
are
approved by
shareholder
s)
Net Assets Nav Per Shares o/s
Share
Advisor
Municipal
Bond
Class A $737,805 $8.42 87,672
Class T $7,007,720 $8.41 833,240
Class B $2,134,267 $8.41 253,715
Institutional $1,208,176 $8.41 143,650
Class
Initial Class $924,769,426 $8.42 109,880,310
Spartan $3,594,458,286 $12.61 285,021,125
Municipal
Income
Proforma $4,530,315,678 $12.61 359,236,620 74,215,495
Combined
Scenario 3
Only
Aggressive
is approved
by
shareholder
s
Net Assets Nav Per Shares o/s
Share
Advisor
Municipal
Bond
Class A $737,805 $8.42 87,672
Class T $7,007,720 $8.41 833,240
Class B $2,134,267 $8.41 253,715
Institutional $1,208,176 $8.41 143,650
Class
Initial Class $924,769,426 $8.42 109,880,310
Spartan $3,267,818,514 $12.61 259,117,812
Municipal
Income
Proforma $4,203,675,906 $12.61 333,333,307 74,215,495
Combined
Scenario 4
Only Insured
is approved
by
shareholder
s
Net Assets Nav Per Shares o/s
Share
Advisor
Municipal
Bond
Class A $737,805 $8.42 87,672
Class T1 $7,007,720 $8.41 833,240
Class B $2,134,267 $8.41 253,715
Institutional $1,208,176 $8.41 143,650
Class
Initial Class $924,769,426 $8.42 109,880,310
Spartan $2,646,466,276 $12.61 209,843,329
Municipal
Income
Proforma $3,582,323,668 $12.61 284,058,824 74,215,495
Combined
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SPARTAN MUNICIPAL INCOME FUND SPARTAN MUNICIPAL FIDELITY ADVISOR
INVESTMENTS AT NOVEMBER 30, 1997 (UNAUDITED) INCOME FUND MUNI. BOND FUND
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE ($) AMOUNT VALUE ($) AMOUNT VALUE ($)
MUNICIPAL
BONDS
Alabama Alabama Bldg. 3,000,000 3,296,250 3,000,000 3,296,250
Renovation
Fin. Auth.
Rev. 7.45%
9/1/11
Alabama Alabama 3,000,000 3,191,250 3,000,000 3,191,250
Mental Health
Fin. Auth.
Spl. Tax
7.375% 5/1/09
(Pre-Refunded
to 5/1/99 @
102)
Alabama Mobile Wtr. & 4,600,000 4,991,000 4,600,000 4,991,000
Swr.
Commissioners
Wtr. & Swr.
Rev. Rfdg.
6.50% 1/1/09
Alaska Alaska 4,200,000 4,520,250 4,200,000 4,520,250
Student Loan
Corp. Student
Loan Rev.
Series A,
7.30% 7/1/00
(AMBAC
Insured) AMT
Alaska Alaska 1,070,000 1,122,163 1,070,000 1,122,163
Student Ln.
Corp. Student
Ln. Rev.
Series A,
5.90% 7/1/03
(AMBAC
Insured)
Alaska Alaska 2,000,000 2,102,500 2,000,000 2,102,500
Student Loan
Corp. Student
Loan Rev.
(State
Assisted)
Series A, 6%
7/1/04(AMBAC
Insured)
(AMT)
Alaska Alaska 1,300,000 1,358,500 1,300,000 1,358,500
Student Loan
Corp. Student
Loan Rev.
Series A,
5.55% 7/1/03
(AMBAC
Insured) AMT
Alaska Alaska 1,300,000 1,366,625 1,300,000 1,366,625
Student Loan
Corp. Student
Loan Rev.
Series A,
5.65% 7/1/04
(AMBAC
Insured) AMT
Alaska Alaska 1,500,000 1,539,375 1,500,000 1,539,375
Student Loan
Rev. Series
A, 5.15%
7/1/05 (AMBAC
Insured)
(AMT)
Alaska North Slope 16,000,00 13,340,00 16,000,00 13,340,00
Borough Gen. 0 0 0 0
Oblig. (Cap.
Appreciation)
Series B, 0%
1/1/02 (MBIA
Insured)
Alaska North Slope 9,000,000 7,143,750 9,000,000 7,143,750
Borough Gen.
Oblig. (Cap.
Appreciation)
Series B, 0%
1/1/03 (MBIA
Insured)
Alaska North Slope 2,500,000 1,737,500 2,500,000 1,737,500
Borough Gen.
Oblig. (Cap.
Appreciation)
Series B, 0%
6/30/05 (Cap.
Guaranty
Insured)
Alaska North Slope 2,000,000 2,212,500 2,000,000 2,212,500
Borough Gen.
Oblig. Series
B, 7.50%
6/30/01 (FSA
Insured)
Alaska North Slope 5,000,000 4,281,250 5,000,000 4,281,250
Borough Gen.
Oblig. (Cap.
Appreciation)
Series A, 0%
6/30/01 (MBIA
Insured)
Alaska North Slope 1,400,000 1,198,750 1,400,000 1,198,750
Boro Alaska
Series A, 0%
6/30/01 (MBIA
Insured)
Arizona Chandler Gen. 5,700,000 4,004,250 16,700,000 2,421,500 22,400,00 6,425,750
Oblig. Rfdg. 0
(Cap.
Appreciation)
0% 7/1/05
(FGIC
Insured)
Arizona Chandler Gen. 5,700,000 3,811,875 2,000,000 2,140,000 7,700,000 5,951,875
Oblig. Rfdg.
(Cap.
Appreciation)
0% 7/1/06
(FGIC
Insured)
Arizona Chandler Gen. 5,700,000 3,619,500 5,700,000 3,619,500
Oblig. Rfdg.
(Cap.
Appreciation)
0% 7/1/07
(FGIC
Insured)
Arizona Chandler Gen. 1,700,000 1,020,000 1,700,000 1,020,000
Oblig. Rfdg.
(Cap.
Appreciation)
0% 7/1/08
(FGIC
Insured)
Arizona Chandler 1,000,000 1,237,500 1,000,000 1,237,500
7.375%
7/1/09, (FGIC
Insured)
Arizona Chandler 1,000,000 926,250 16,820,000 18,523,025 17,820,00 19,449,27
4.375% 7/1/12 0 5
(FGIC
Insured)
Arizona Maricopa 3,950,000 4,236,375 3,950,000 4,236,375
County Series
C, 8.90%
7/1/99
Arizona Maricopa 2,435,000 2,483,700 2,435,000 2,483,700
County Hosp.
Rev. Rfdg.
(Sun Health
Corp.) 5.40%
4/1/05
Arizona Maricopa 2,000,000 2,437,500 2,000,000 2,437,500
County Ind.
Dev. Auth.
Hosp. Facs.
Rev. Rfdg.
(Samaritan
Health
Svcs.)Series
A, 7% 12/1/16
(MBIA
Insured)
Arizona Phoenix Gen. 1,840,000 1,971,100 3,900,000 3,178,500 5,740,000 5,149,600
Oblig. Rfdg.
6% 7/1/02
Arizona Pima County 2,060,000 2,098,625 3,430,000 4,017,387 5,490,000 6,116,012
Ctfs. Prtn.
4.75% 1/1/04
(MBIA
Insured)
Arizona Pima County 2,000,000 2,047,500 2,000,000 2,047,500
Ctfs. Prtn.
4.90% 1/1/06
(MBIA
Insured)
Arizona Pima Cnty. 2,000,000 2,417,500 2,000,000 2,417,500
Unified
School Dist.
Tucson Proj.
of 1989
Series G, 8%
7/1/04 (MBIA
Insured)
Arizona Tucson Ltd. 2,525,000 2,796,438 2,000,000 2,365,000 4,525,000 5,161,438
Tax Rfdg.
7.50% 7/1/01
Arizona Tucson Wtr. 500,000 694,375 8,665,000 4,408,319 9,165,000 5,102,694
Rev. Series
D, 9.75%
7/1/07
Arizona Tucson Wtr. 500,000 709,375 500,000 709,375
Rev. Series
D, 9.75%
7/1/08
Arizona Tucson Wtr. 750,000 1,082,813 750,000 1,082,813
Rev. Series
D, 9.75%
7/1/09
Arkansas Arkansas 1,280,000 1,000,000 1,280,000 1,000,000
State College
Savings (Cap.
Appreciation)
Series A, 0%
6/1/03
Arkansas Arkansas 1,110,000 824,175 1,110,000 824,175
State College
Savings (Cap.
Appreciation)
Series A, 0%
6/1/04
Arkansas Arkansas Dev. 4,500,000 4,905,000 4,500,000 4,905,000
Fin. Auth.
Rev. (Cap.
Asset) Series
B, 7.10%
3/1/08
Arkansas North Little 3,840,000 4,483,200 3,840,000 4,483,200
Rock Elec.
Rev. Rfdg.
Series A,
6.50% 7/1/10
(MBIA
Insured)
Arkansas Pulaski 1,750,000 1,951,250 1,750,000 1,951,250
County Health
Facs. Board
Rev. Rfdg.
(Sisters
Charity
Nazareth-St.
VincentsInfir
mary) 6.05%
11/1/09 (MBIA
Insured)
Arkansas Rogers Sales 2,000,000 2,037,500 2,000,000 2,037,500
& Use Tax
Rev. 5%
11/1/15
California California 5,400,000 5,379,750 5,400,000 5,379,750
Edl. Facs.
Auth. Rev.
(Standford
Univ.) Series
N, 5.20%
12/1/27
California California 187,000 36,933 187,000 36,933
Hsg. Fin.
Agcy. Rev.
(Home Mtg.
Single
Family) (Cap.
Appreciation)
Series 1983
A, 0% 2/1/15
California California 1,000,000 1,053,750 2,775,000 2,847,844 3,775,000 3,901,594
Hsg. Fin.
Agcy. Rev.
(Home Mtg.)
Series G,
5.90% 2/1/09
(MBIA
Insured) AMT
California California 2,000,000 2,107,500 2,000,000 2,107,500
Hsg. Fin.
Agcy. Rev.
(Home Mtg.)
Series G,
5.90% 8/1/09
(MBIA
Insured) AMT
California California 870,000 893,925 1,975,000 2,029,313 2,845,000 2,923,238
Hsg. Fin.
Agcy. Rev.
Rfdg. (Home
Mtg.) Series
A, 5.30%
8/1/14 (MBIA
Insured)
California California 2,100,000 2,155,125 2,100,000 2,155,125
Hsg. Fin.
Agcy. Rev.
Rfdg. (Home
Mtg.) Series
A, 5.70%
8/1/16 (MBIA
Insured)
California California 3,000,000 3,157,500 4,875,000 4,929,844 7,875,000 8,087,344
Hsg. Fin.
Agcy. Rev.
(Home Mtg.)
Series R,
6.15% 8/1/27
(MBIA
Insured) AMT
California California 5,235,000 5,699,606 5,235,000 5,699,606
Poll. Cont.
Fing. Auth.
Resource
Recovery Rev.
(Waste Mgmt.,
Inc.) Series
A, 7.15%
2/1/11 (AMT)
California California 9,000,000 9,101,250 9,000,000 9,101,250
Rural Home
Mtg. Fin.
Auth. Lease
Rev. (Rural
Lease Purp.)
Series A,
4.45%8/1/01
(MBIA
Insured)
California California 2,000,000 2,282,500 2,000,000 2,282,500
Gen. Oblig.
7% 8/1/04
California California 1,365,000 1,590,225 1,365,000 1,590,225
Gen. Oblig.
7% 3/1/06
California California 8,975,000 10,545,62 10,500,000 11,431,875 19,475,00 21,977,50
Gen. Oblig. 5 0 0
7% 10/1/06
California California 1,000,000 1,195,000 1,000,000 1,195,000
Gen. Oblig.
7% 10/1/09
California California 4,000,000 4,540,000 4,000,000 4,540,000
Gen. Oblig.
6.30% 9/1/10
California California 16,060,00 17,485,32 16,060,00 17,485,32
Gen. Oblig. 0 5 0 5
(Various
Purp.) 6.25%
10/1/19
California California 4,040,000 3,757,200 5,250,000 5,807,813 9,290,000 9,565,013
Gen. Oblig.
4.75% 9/1/18
(FSA Insured)
California California 5,000,000 5,050,000 5,000,000 5,050,000
Gen. Oblig.
5.25% 10/1/13
California California 1,500,000 1,500,000 1,500,000 1,500,000
Gen. Oblig.
5.25% 10/1/17
California California 4,650,000 4,522,125 4,650,000 4,522,125
Gen. Oblig.
5.125%
10/1/27
California California 2,500,000 2,540,625 2,500,000 2,540,625
Pub. Wks
Board Lease
Rev. Rfdg.
(Dept. of
Corrections
State Prison,
Montery
County
Soledad II)
Series D,
5.375%
11/1/13
California California 3,000,000 3,071,250 1,150,000 1,221,875 4,150,000 4,293,125
Pub. Wks.
Board Lease
Rev. Rfdg.
(California
Commty.
Colleges)
Series
D,5.375%
3/1/11
California California 1,500,000 1,530,000 1,500,000 1,530,000
Pub. Wks.
Board Lease
Rev. Rfdg.
(California
Commty.
Colleges)
Series D,
5.375% 3/1/12
California California 5,000,000 5,156,250 5,000,000 5,156,250
Pub. Wks.
Board Lease
Rev. Rfdg.
(State
Archives
Bldg.
Complex)
Series
A,5.375%
12/1/10
California California Pub. 2,250,000 2,376,563 2,250,000 2,376,563
Wks. Board
Lease Rev.
(Franchise Tax
Board-PH II)
Series A,
6.25%9/1/11
California California 3,500,000 3,696,875 3,500,000 3,696,875
St. Pub. Wks.
Board Lease
Rev.
(Secretary of
State) Series
A, 6% 5/1/13
California California 5,500,000 5,761,250 5,500,000 5,761,250
Pub. Wks.
Board Lease
Rev. (Various
California
State Univ.
Projs.)
Series A,
5.50% 6/1/14
California California 18,250,00 19,276,56 2,500,000 2,578,125 20,750,00 21,854,68
Pub. Wks. 0 3 0 8
Board Lease
Rev. Rfdg.
(Various
California
State Univ.
Projs.)Series
A, 5.50%
6/1/10
California California 3,750,000 3,754,688 3,750,000 3,754,688
Pub. Wks.
Board Lease
Rev. (Various
California
Univ. Proj.)
Series A,
5.25% 12/1/13
California California 1,500,000 1,492,500 1,500,000 1,492,500
Pub. Wks.
Board Lease
Rev. (Dept.
of
Corrections
State Prison
D-Susanville)
5.375% 6/1/18
California California Pub. 2,750,000 2,677,813 2,750,000 2,677,813
Wks. Board
Lease Rev. (Dept.
of Corrections
State Prison,
Medera)Series E,
5.50% 6/1/15
California California 5,000,000 5,312,500 5,000,000 5,312,500
Pub. Wks.
Board Lease
Rev. (Commty.
College
Proj.) Series
A, 6% 10/1/14
California California 5,195,000 4,948,238 5,195,000 4,948,238
Statewide
Commtys. Dev.
Corp. Ctfs.
of Prtn. (J.
Paul Getty
Trust) 5%
10/1/23
California California 1,475,000 1,770,000 1,475,000 1,770,000
Statewide
Commtys. Dev.
Auth. Rev. Ctfs. of
Prtn. (Sisters of
CharityLeavenwor
th Sys.) 5%
12/1/14
California Castaic lake 1,800,000 2,187,000 1,800,000 2,187,000
Wtr. Agcy.
Ctfs. of
Prtn. Rfdg.
(Wtr. Sys.
Impt. Proj.)
Series A,
7.25%8/1/09
(MBIA
Insured)
California Duarte Ctfs. 15,750,00 16,498,12 15,750,00 16,498,12
of Prtn. 0 5 0 5
(City of Hope
Med. Ctr.)
6.25% 4/1/23
California East Bay 1,250,000 1,348,438 1,250,000 1,348,438
Muni. Util.
Dist. Wtr.
Sys. Rev.
Rfdg. 6.10%
6/1/07
California Encintas 1,500,000 1,059,375 1,500,000 1,059,375
School Dist.
0% 8/1/05
(MBIA
Insured)
California Encinitas 1,000,000 670,000 1,000,000 670,000
Union School
Dist. (Cap.
Appreciation)
0% 8/1/06
(MBIA
Insured)
California Encinitas 1,500,000 950,625 2,500,000 2,684,375 4,000,000 3,635,000
Union School
Dist. (Cap.
Appreciation)
0% 8/1/07
(MBIA
Insured)
California Encinitas 1,250,000 746,875 1,250,000 746,875
Union School
Dist. (Cap.
Appreciation)
0% 8/1/08
(MBIA
Insured)
California Fresno Swr. Rev. 10,000,000 11,037,500 10,000,00 11,037,50
Series A, 4.75% 0 0
9/1/26 (MBIA
Insured)
California Long Beach 5,000,000 4,831,250 2,300,000 2,299,353 7,300,000 7,130,603
Hbr. Rev.
5.125%
5/15/18 (AMT)
California Long Beach 6,235,000 7,435,238 6,235,000 7,435,238
Hbr. Rev.
8.50% 5/15/03
(MBIA
Insured)
(AMT)
California Long Beach 6,305,000 7,518,713 6,305,000 7,518,713
Hbr. Rev. 8%
5/15/04 (MBIA
Insured)
(AMT)
California Long Beach 3,000,000 3,288,750 3,000,000 3,288,750
Hbr. Rev. 6%
5/15/06 (MBIA
Insured)
(AMT)
California Long Beach 4,700,000 5,093,625 4,700,000 5,093,625
Harbor Rev.
Refdg. Series
A, 6% 5/15/13
(FGIC
Insured)
California Los Angeles 3,380,000 3,523,650 3,380,000 3,523,650
County
Metropolitan
Trans. Auth.
Sales Tax
Rev. Rfdg.
(Prop. A-2nd
Tier)5.625%
7/1/13 (MBIA
Insured)
California Los Angeles 4,355,000 4,409,438 4,355,000 4,409,438
County
Metropolitan
Trans. Auth.
Rev. Rfdg.
(Gen. Union
Station)
Series
A,5.20%
7/1/12 (FSA
Insured)
California Los Angeles 6,000,000 5,850,000 6,000,000 5,850,000
County Pub.
Wks. Fing.
Auth. Lease
Rev.
(Multiple
Cap. Facs.
Proj.
#4)4.75%
2/1/10 (MBIA
Insured)
California Metropolitan 2,000,000 2,075,000 2,000,000 2,075,000
Wtr. Dist.
Southern
California
Wtrwks. Rev.
Series A,
5.75% 7/1/21
(MBIAInsured)
California Metropolitan 8,770,000 8,112,250 8,770,000 8,112,250
Wtr. Dist.
Southern
California
Wtrwks. Rev.
Rfdg. Series
B, 4.75%
7/1/21(MBIA
Insured)
California Northern 6,000,000 6,547,500 3,000,000 3,288,750 9,000,000 9,836,250
California
Pwr. Agcy.
Pub. Pwr.
Rev. Rfdg.
(Geothermal
Proj. #3)
Series
A,5.80%
7/1/09 (AMBAC
Insured)
California Placer County 3,200,000 3,480,000 3,200,000 3,480,000
Wtr. Agcy. Rev.
(Middle Fork
Proj.) Series A,
3.75% 1/1/13
California San Diego 1,100,000 1,186,625 1,380,000 1,542,150 2,480,000 2,728,775
County Reg'l.
Trans.
Commission
Sales Tax
Rev. Second
Sr. Series A,
6.25%4/1/02
(FGIC
Insured)
California San Francisco 2,330,000 2,536,788 2,330,000 2,536,788
City & County
Arpts.
Commission
Int'l. Arpt.
Rev. Rfdg.
Second Series
Issue 1,
6.20% 5/1/05
(AMBAC
Insured)
California San Francisco 5,955,000 6,051,769 4,500,000 4,708,125 10,455,00 10,759,89
City & County 0 4
Arpt.
Commission
Int'l. Arpt.
Rev. 2nd
Series Issue
10A,5.50%
5/1/13 (MBIA
Insured)
(AMT)
California San Fransicso 5,875,000 5,970,469 5,875,000 5,970,469
City & County
Arpt.
Commission
Int'l. Aprt.
Rev. 2nd
Series Issue
10A,5.55%
5/1/14 (MBIA
Insured)
(AMT)
California San Francisco 10,000,00 10,700,00 2,245,000 2,691,194 12,245,00 13,391,19
City & County 0 0 0 4
Swr. Rev.
Rfdg.5.90%
10/1/08
(AMBAC
Insured)
California San Francisco 5,500,000 5,369,375 7,000,000 7,875,000 12,500,00 13,244,37
Bldg. Auth. 0 5
Lease Rev.
(Dept. Gen.
Svcs. Lease)
Series A, 5%
10/1/13
California San Jaoquin 8,000,000 6,690,000 6,665,000 7,064,900 14,665,00 13,754,90
Hills Trans. 0 0
Corridor
Agcy. Toll
Road Rev.
Refdg. Series
A, 0% 1/15/02
(MBIA
Insured)
California Santa Clara 5,000,000 5,212,500 5,000,000 5,212,500
Redev. Agcy. Tax
Allocation Rfdg.
(Bayshore North
Proj.) 7% 7/1/10
(AMBACInsured)
California Santa 1,770,000 2,150,550 1,770,000 2,150,550
Margarita/Dan
a Point Auth.
Rev. Rfdg.
(Impt. Dist.
3&3A,4&4A)
Series B,
7.25%8/1/08
(MBIA
Insured)
California Santa Rosa 4,000,000 3,745,000 4,000,000 4,520,000 8,000,000 8,265,000
Wastewtr.
Rev. Rfdg. &
Sub-Reg'l.
Wastewtr.
Proj. Series
A, 4.75%
9/1/16(FGIC
Insured)
California South Orange 3,490,000 4,192,363 3,490,000 4,192,363
County Pub.
Fing. Auth.
Spl. Tax Rev.
Rfdg. (Sr.
Lien) Series
A, 7%9/1/11
(MBIA
Insured)
California South Orange 2,500,000 3,059,375 10,000,000 10,637,500 12,500,00 13,696,87
County Pub. 0 5
Fing. Auth.
Spl. Tax Rev.
(Foothill
Area) Series
C,
7.50%8/15/07
(FGIC
Insured)
California South Orange 2,500,000 3,184,375 2,500,000 3,184,375
County Pub.
Fing. Auth.
Spl. Tax Rev.
(Foothill
Area) Series
C, 8%8/15/08
(FGIC
Insured)
California Southern 1,500,000 1,393,125 1,500,000 1,393,125
California
Pub. Pwr.
Auth. Pwr.
Proj. Rev.
Rfdg. (Mead
Adelanto
Proj.) Series
A, 4.875%
7/1/20 (AMBAC
Insured)
California Southern 4,640,000 4,309,400 4,640,000 4,309,400
California
Pub. Pwr.
Auth. Pwr.
Proj. Rev.
Rfdg. (Mead
Phoenix
Proj.)Series
A, 4.875%
7/1/20 (AMBAC
Insured)
California California 2,000,000 2,190,000 2,000,000 2,190,000
Univ. Rev.
(Multiple
Purp. Projs.)
Series D,
6.10% 9/1/10
(MBIA
Insured)
California Upland Ctfs. 3,000,000 2,816,250 3,000,000 2,816,250
of Prtn.
Rfdg. (San
Antonio
Commty.
Hosp.) 5%
1/1/18
California West & 5,800,000 6,032,000 5,800,000 6,032,000
Central Basin
Fin. Auth.
Series C,
5.20% 8/1/07
(AMBAC
Insured)
California West & 6,100,000 6,305,875 6,100,000 6,305,875
Central Basin
Fin. Auth.
Series C
5.25% 8/1/08
(AMBAC
Insured)
Colorado Arapahoe 13,000,00 4,387,500 13,000,00 4,387,500
County Cap. 0 0
Impt. Trust
Fund Hwy.
Rev. Series
C, 0% 8/31/15
(Pre-Refunded
to8/31/05 @
48.618)
Colorado Arapahoe 170,700,0 24,751,50 1,950,000 2,147,438 172,650,0 26,898,93
County Cap. 00 0 00 8
Impt. Tr.
Fed. Hwy.
Rev. (Cap.
Appreciation)
Series E, 0%,
8/31/26(Pre-R
efunded to
8/31/05@
20.8626
Colorado Aurora Gen. 3,040,000 2,891,800 3,040,000 2,891,800
Oblig. Rfdg.
4.75% 11/1/14
Colorado Colorado 5,725,000 6.38E+06 5,725,000 6,376,219
Univ. Rev.
(Research
Bldg.
Revolving
Fund)
(Biomedical
Research
Bldg.
Proj.)7%
6/1/09
Colorado Colorado 2,500,000 2,653,125 2,500,000 2,653,125
Health Facs.
Auth. Rev.
Rfdg. (Rocky
Mountain
Adventist)
6.25% 2/1/04
Colorado Colorado 4,700,000 4,958,500 4,700,000 4,958,500
Health Facs.
Auth. Rev.
Rfdg. (Rocky
Mountain
Adventist)
6.625% 2/1/22
Colorado Colorado 6,500,000 6,914,375 6,500,000 6,914,375
Health Facs.
Auth. Rev.
Rfdg. (Rocky
Mountain
Adventist)
6.625% 2/1/13
Colorado Colorado 1,000,000 1,098,750 1,000,000 1,098,750
Health Facs.
Auth. Rev.
(Hosp.
Sys.-Swedish
Med. Ctr.)
Series A,
7.25%10/1/08
(Pre-Refunded
to 10/1/00 @
102)
Colorado Colorado 1,550,000 1,300,063 1,550,000 1,300,063
Springs Arpt.
Rev. (Cap.
Appreciation)
Series C, 0%
1/1/02 (MBIA
Insured)
Colorado Colorado 1,530,000 1,162,800 1,530,000 1,162,800
Springs Arpt.
Rev. (Cap.
Appreciation)
Series C, 0%
1/1/04 (MBIA
Insured)
Colorado Colorado 1,655,000 964,038 1,655,000 964,038
Springs Arpt.
Rev. (Cap.
Appreciation)
Series C, 0%
1/1/09 (MBIA
Insured)
Colorado Colorado 1,500,000 823,125 1,000,000 1,165,000 2,500,000 1,988,125
Springs Arpt.
Rev. (Cap.
Appreciation)
Series C, 0%
1/1/10 (MBIA
Insured)
Colorado Denver City & 4,900,000 3,907,750 4,900,000 3,907,750
County Arpt.
Rev. (Cap.
Appreciation)
Series A, 0%
11/15/02
(MBIA
Insured)
(AMT)
Colorado Denver City & 7,250,000 7,432,193 7,250,000 7,432,193
County Arpt.
Rev. Series
A, 6.90%
11/15/98
(AMT)
Colorado Denver City & 3,000,000 3,142,500 3,000,000 3,142,500
County Arpt.
Rev. Series
A, 7%
11/15/99
(AMT)
Colorado Denver City & 3,000,000 2,040,000 2,500,000 2,337,500 5,500,000 4,377,500
County Arpt.
Rev. (Cap.
Appreciation)
Series A, 0%
11/15/05
(MBIA
Insured)
Colorado Denver City & 7,500,000 5,390,625 7,500,000 5,390,625
County Arpt.
Rev. (Cap.
Appreciation)
Series D, 0%
11/15/04
(MBIAInsured)
Colorado Denver City & 3,000,000 2,040,000 3,000,000 2,040,000
County Arpt.
Rev. (Cap.
Appreciation)
Series D, 0%
11/15/05
(MBIAInsured)
Colorado Denver City & 5,000,000 3,793,750 5,000,000 3,793,750
County Arpt.
Rev. (Cap.
Appreciation)
Series D, 0%
10/15/03
(MBIAInsured)
Colorado Denver City & 6,700,000 6,751,054 6,700,000 6,751,054
County Arpt.
Rev. Rfdg.
Series D, 5%
11/15/98
(AMT)
Colorado Denver City & 520,000 567,450 3,500,000 3,583,125 4,020,000 4,150,575
County Arpt.
Rev. Series
D, 7%
11/15/25
(Pre-Refunded
11/15/01 @
100)
Colorado Denver City & 1,980,000 2,126,025 3,800,000 4,018,500 5,780,000 6,144,525
County Arpt.
Rev. Series
D, 7%
11/15/25
Colorado Highlands 1,725,000 1,781,063 1,725,000 1,781,063
Ranch
Metropolitan
Dist. #2
Rfdg. 5.50%
6/15/00 (FSA
Insured)
Colorado Highlands 2,050,000 2,219,125 2,050,000 2,219,125
Ranch
Metropolitan
Dist. #2
Rfdg. 6%
6/15/03 (FSA
Insured)
Colorado Jefferson 3,000,000 3,330,000 3,000,000 3,330,000
County Ctfs.
of Prtn.
Rfdg. 6.65%
12/1/08 (MBIA
Insured)
Colorado Jefferson 185,000 198,181 185,000 198,181
County Single
Family Mtg.
Rev. Rfdg.
Series
1991-A,
8.875%
10/1/13
(MBIAInsured)
Connecticut Connecticut 250,000 255,313 250,000 255,313
Health & Edl.
Facs. Auth.
Rev. Rfdg.
(Quinnipiac
College)
Series D, 6%
7/1/13
Connecticut Connecticut 4,345,000 4,806,656 4,345,000 4,806,656
Health & Edl.
Facs. Auth.
Rev. (New
Britain Mem.
Hosp.) Series
A,
7.50%7/1/06
Connecticut Connecticut 2,990,000 3,098,388 2,600,000 2,619,812 5,590,000 5,718,200
Health & Ed.
Facs. Auth.
Rev. (St.
Raphael
Hosp.) 5.30%
7/1/10,
(AMBAC
Insured)
District of District of 2,635,000 2,826,038 2,635,000 2,826,038
Columbia Columbia Gen.
Oblig. Rfdg.
Series A,
5.875% 6/1/05
(AMBAC
Insured)
District of District of 2,000,000 2,175,000 2,000,000 2,175,000
Columbia Columbia Gen.
Oblig. Rfdg.
Series A-1,
6% 6/1/11
(MBIA
Insured)
District of District of 1,000,000 1,015,000 1,000,000 1,015,000
Columbia Columbia Gen.
Oblig. Rfdg.
Series A, 5.625%
6/1/02 (MBIA
Insured)
District of District of 3,350,000 3,496,563 1,000,000 1,087,500 4,350,000 4,584,063
Columbia Columbia Gen.
Oblig. Rfdg.
Series B-1,
5.40% 6/1/06
(AMBAC
Insured)
District of District of 9,105,000 9,969,975 1,500,000 1,565,625 10,605,00 11,535,60
Columbia Columbia 0 0
Hosp. Rev.
(Hosp. for
Sick
Children)
Series A,
8.875% 1/1/21
District of District of 1,000,000 1,018,750 3,000,000 3,217,500 4,000,000 4,236,250
Columbia Columbia
Redev. Land
Agcy.
Washington
D.C. Sports
Arena Spl.
Tax Rev.5.40%
11/1/00
District of District of 5,955,000 6,051,769 5,955,000 6,051,769
Columbia Columbia
Redev. Land
Agcy.
Washington
D.C. Sports
Arena Spl.
Tax
Rev.5.625%
11/1/10
District of District of 8,335,000 8,595,469 8,335,000 8,595,469
Columbia Columbia Rev.
Rfdg.
(Georgetown
Univ.) Series
A, 6% 4/1/18
(MBIA
Insured)
District of Metropolitan 3,000,000 3,277,500 3,000,000 3,277,500
Columbia Washington
Arpt. Auth.
Gen. Arpt.
Rev. Series
A, 7.25%
10/1/10 (FGIC
Insured)
(AMT)
Florida Broward 12,655,00 13,762,31 5,810,000 5,904,413 18,465,00 19,666,72
County 0 3 0 6
Resource
Recovery Rev.
(SES Broward
Co. LP South
Proj.) 7.95%
12/1/08
Florida Dade County 3,750,000 3,984,375 3,300,000 3,403,125 7,050,000 7,387,500
Aviation Rev.
(Miami Int'l
Arpt.) Series
B, 6% 10/1/24
(MBIA
Insured)
Florida Florida Board 5,605,000 5,282,713 5,605,000 5,282,713
of Ed. Cap.
Outlay Rfdg.
(Pub. Ed.)
Series D,
4.75% 6/1/17
Florida Florida 4,750,000 5,135,938 4,750,000 5,135,938
Division Fin.
Dept. Gen.
Svcs. Rev.
(Dept. of
Natural
Resources-Pre
servation2000
) Series A,
6.25% 7/1/10
(MBIA
Insured)
Florida Florida Muni. 3,000,000 2,737,500 3,000,000 2,737,500
Pwr. Agcy.
Rev. Rfdg.
(Stanton II
Proj.) 4.50%
10/1/16
(AMBAC
Insured)
Florida Florida Muni. 6,000,000 5,280,000 6,000,000 5,280,000
Pwr. Agcy.
Rev. Rfdg.
(Stanton II
Proj.) 4.50%
10/1/27
(AMBAC
Insured)
Florida Jacksonville 4,145,000 4,305,619 3,000,000 2,786,250 7,145,000 7,091,869
Elec. Auth.
Rev. 6%
7/1/01
(Escrowed to
Maturity)
Florida Jacksonville 3,000,000 3,435,000 2,600,000 1,579,500 5,600,000 5,014,500
Elec. Auth.
Rev. Series
73, 6.80%
7/1/12
(Escrowed to
Maturity)
Florida Jacksonville 2,000,000 2,200,000 2,000,000 2,200,000
Health Facs.
Auth. Ind.
Dev. Rev.
Rfdg.
(Cypress
Village
Proj.)
(Nat'l.Benevo
lent Assoc.)
7% 12/1/22
Florida Jacksonville 1,000,000 1,077,500 1,000,000 1,077,500
Port Auth.
Rev. Rfdg.
(Port Facs.)
5.75% 11/1/09
(MBIA
Insured)
(AMT)
Florida Lakeland 5,000,000 5,668,750 5,000,000 5,668,750
Elec. & Wtr.
Rev. Rfdg.
(Jr.
Sub-Lien)
6.50% 10/1/05
(FGIC
Insured)
Florida Orange County 5,000,000 5,525,000 5,000,000 5,525,000
Tourist Dev.
Tax Rev.
Rfdg. Series
A, 6.50%
10/1/10
(AMBAC
Insured)
Florida Orlando Util. 5,465,000 5,362,531 5,465,000 5,362,531
Commission
Wtr. & Elec.
Rev. Series
B, 5.25%
10/1/23
Florida Pasco County 5,000,000 5,362,500 5,000,000 5,362,500
Solid Waste
Disp. &
Resource
Recovery Sys.
Rev. 6%
4/1/08 (AMBAC
Insured)
(AMT)
Florida Pasco County 5,090,000 5,452,663 5,090,000 5,452,663
Solid Waste
Disp. &
Resource
Recovery Sys.
Rev. 6%
4/1/09 (AMBAC
Insured)
(AMT)
Florida Tampa Cap. 10,000,00 10,299,50 10,000,00 10,299,50
Impt. Prog. 0 0 0 0
Rev. Series
A, 8.25%
10/1/18
Georgia Atlanta Arpt. 21,727,782 21,727,782 21,727,78 21,727,78
Facs. Rev. Rfdg. 2 2
6.25% 1/1/05
(AMBAC Insured)
Georgia Atlanta 2,500,000 2,668,750 2,500,000 2,668,750
Downtown Dev.
Auth. Rev.
Rfdg.
(Underground
Atlanta
Proj.) 6.25%
10/1/12
Georgia Atlanta 3,000,000 3,187,500 3,000,000 3,187,500
Downtown Dev.
Auth. Rev.
Rfdg.
(Underground
Atlanta
Proj.) 6.25%
10/1/16
Georgia Fulton County 2,000,000 2,305,000 2,000,000 2,305,000
School Dist.
Rfdg. 6.375%
5/1/14
Georgia Georgia Gen. 4,000,000 2,840,000 4,000,000 2,840,000
Oblig. Series A,
6.25% 4/1/06
Georgia Georgia 6,305,000 5,769,075 6,305,000 5,769,075
Gen.Oblig. Series
B Impt. 7.20%
3/1/04
Georgia Georgia Gen. 3,000,000 3,495,000 2,500,000 2,881,250 5,500,000 6,376,250
Oblig. Impt.
Series B,
7.20% 3/1/05
Georgia Georgia Gen. 2,000,000 2,205,000 4,000,000 4,375,000 6,000,000 6,580,000
Oblig. Series
B, 6.10%
3/1/05
Georgia Georgia Gen. 5,500,000 6,022,500 4,500,000 5,180,625 10,000,00 11,203,12
Oblig. Series 0 5
B, 6.25%
4/1/03
Georgia Georgia Muni. 12,200,000 13,664,000 12,200,00 13,664,00
Elec. Auth. Pwr. 0 0
Rev. Series B,
6.20% 1/1/10
(AMBAC Insured)
Georgia Georgia 13,615,00 1,900,109 7,625,000 8,835,469 21,240,00 10,735,57
Residential 0 0 8
Fin. Auth.
Home
Ownership
Mtg. (Cap.
Appreciation)
Series 1984
B,0% 12/1/15
Hawaii Hawaii Gen. 4,860,000 4,969,350 4,860,000 4,969,350
Oblig. Series
CM, 5%
12/1/00 (FGIC
Insured)
Hawaii Hawaii Gen. 2,625,000 2,762,813 2,625,000 2,762,813
Oblig. Series
CM, 5.50%
12/1/02 (FGIC
Insured)
Hawaii Hawaii Arpts. 1,500,000 1,636,875 1,500,000 1,636,875
Sys. Rev. 2nd
Series, 7.50%
7/1/20 (FGIC
Insured)*
Hawaii Hawaii Hsg. 3,500,000 3,535,000 4,400,000 4,961,000 7,900,000 8,496,000
Fin. & Dev.
Corp. Single
Family Mtg.
Rev. Series
A, 4.90%
7/1/28 (AMT)
Hawaii Honolulu 7,135,000 7,554,181 5,000,000 5,625,000 12,135,00 13,179,18
Hawaii City 0 1
and County
Rfdg. Series
C, 5.50%
11/01/04
(FGIC
Insured)
Idaho Boise Urban 2,600,000 2,685,124 2,600,000 2,685,124
Renewal
Parking Agcy.
Rev. (Tax
Increment)
Series A, B,
C, 8.125%
9/1/15
Idaho Idaho Falls 2,000,000 1,365,000 2,000,000 1,365,000
Rfdg. Elec.
0% 4/1/06
(FGIC
Insured)
Idaho Idaho Falls 2,500,000 1,621,875 3,825,000 3,839,344 6,325,000 5,461,219
Elec. Rfdg.
0% 4/1/07,
(FGIC
Insured)
Idaho Idaho Falls 1,500,000 690,000 4,500,000 4,426,875 6,000,000 5,116,875
Rfdg. Elec.
0% 4/1/13
(FGIC
Insured)
Idaho Idaho Housing 1,785,000 1,892,100 2,640,000 3,075,600 4,425,000 4,967,700
Agcy. Single
Family Mtg.
Series 1991
B, 7.50%
7/1/24
Illinois Chicago Gen. 2,200,000 2,191,750 2,865,000 3,384,281 5,065,000 5,576,031
Oblig. Rfdg.
Series B, 5%
1/1/11 (AMBAC
Insured)
Illinois Chicago Ill 2,250,000 2,235,938 2,000,000 2,402,500 4,250,000 4,638,438
FGIC Rfdg.
Series B,
5.125% 1/1/15
(AMBAC
Insured)
Illinois Chicago Oblig. 4,245,000 2,822,925 4,245,000 2,822,925
Rfdg. Series A-2,
6.125% 1/1/12
(AMBAC Insured)
Illinois Chicago Board 4,750,000 5,367,500 8,005,000 4,752,969 12,755,00 10,120,46
of Ed. 0 9
(Chicago
School
Reform) 6.25%
12/1/09 (MBIA
Insured)
Illinois Chicago Board 1,000,000 1,121,250 3,000,000 3,615,000 4,000,000 4,736,250
of Ed.
(Chicago
School
Reform) 6.25%
12/1/11 (MBIA
Insured)
Illinois Chicago 2,170,000 2,343,600 2,170,000 2,343,600
Midway Arpt.
Rev. Series
B, 6% 1/1/08
(MBIA
Insured)
(AMT)
Illinois Chicago 2,435,000 2,593,275 2,435,000 2,593,275
Midway Arpt.
Rev. Series
B, 6% 1/1/10
(MBIA
Insured)
(AMT)
Illinois Chicago 2,580,000 2,760,600 2,580,000 2,760,600
Midway Arpt.
Rev. Series
B, 6.125%
1/1/11 (MBIA
Insured)
(AMT)
Illinois Chicago 2,910,000 2,884,538 2,910,000 2,884,538
Midway Arpt.
Rev. Series
B, 5.25%
1/1/13 (MBIA
Insured)
(AMT)
Illinois Chicago 3,060,000 3,021,750 2,455,000 2,884,625 5,515,000 5,906,375
Midway Arpt.
Rev. Series
B, 5.25%
1/1/14 (MBIA
Insured)
(AMT)
Illinois Chicago Motor 4,000,000 4,090,000 2,590,000 3,088,575 6,590,000 7,178,575
Fuel Tax Rev.
Rfdg. Series
A, 5.375%
1/1/14 (AMBAC
Insured)
Illinois Chicago 4,500,000 4,803,750 4,500,000 4,803,750
O'Hare Int'l.
Arpt. Spl.
facs. Rev.
Rfdg. (Int'l.
Term.) Series
A,
7.50%1/1/17
(AMT)
Illinois Chicago 1,970,000 2,056,188 1,970,000 2,056,188
O'Hare Int'l.
Arpt. Spl.
Facs. Rev.
(United
Airlines,
Inc.) 8.25%
5/1/99 (AMT)
Illinois Chicago 8,200,000 8,917,500 8,200,000 8,917,500
O'Hare Int'l.
Arpt. Rev.
Rfdg. (Gen.
Arpt. Proj.)
(2nd Lien)
Series A,
6.375% 1/1/15
(MBIA
Insured)
Illinois Chicago 10,000,00 10,075,00 10,000,00 10,075,00
O'Hare Int'l. 0 0 0 0
Arpt. Rev.
Rfdg. (Gen.
Arpt. 2nd
Lien) Series
A, 5.50%
1/1/16(AMBAC
Insured)
Illinois Chicago Park 3,000,000 3,352,500 5,000,000 5,206,250 8,000,000 8,558,750
Dist. Rfdg.
6.25% 1/1/09
(FGIC
Insured)
Illinois Chicago 4,760,000 2,100,350 4,760,000 2,100,350
Residential
Mtg. Rev.
Rfdg. (Cap.
Appreciation)
Series B, 0%
10/1/09
(MBIAInsured)
Illinois Chicago Wtr. 1,960,000 1,653,750 3,620,000 1,796,425 5,580,000 3,450,175
Rev. 0%
11/1/01 (FGIC
Insured)
Illinois DeKalb Single 1,485,000 1,637,213 5,105,000 2,392,969 6,590,000 4,030,182
Family Mtg.
Rev. 7.45%
12/1/09,
(GNMA Coll.)*
Illinois Illinois 5,000,000 5,231,250 3,610,000 1,592,912 8,610,000 6,824,162
Health Facs.
Auth. Rev.
Rfdg. (OSF
Healthcare
Sys.) 6%
11/15/13
Illinois Illinois 900,000 927,000 900,000 927,000
Health Facs.
Auth. Rev.
(Mem. Hosp.)
6.875% 5/1/00
Illinois Illinois 4,000,000 4,270,000 4,000,000 4,270,000
Health Facs.
Auth. Rev.
(Mem. Hosp.)
7.125% 5/1/10
Illinois Illinois 1,500,000 1,756,875 1,500,000 1,756,875
Health Facs.
Auth. Rev.
Rfdg.
(Lutheran
Gen. Health
Care Sys.)
Series C,
7%4/1/14
Illinois Illinois 3,000,000 3,180,000 3,000,000 3,180,000
Health Facs.
Auth. Rev.
Rfdg.
(Lutheran
Gen. Health
Care Sys.)
Series C,
6%4/1/18
Illinois Illinois Dedicated 2,300,000 2,300,000 2,300,000 2,300,000
Tax Rev. (Civic
Ctr.) Series A, 7%
12/15/13 (AMBAC
Insured)
Illinois Lake County 10,440,00 6,511,950 10,440,00 6,511,950
Forest 0 0
Preserve
Dist. Unltd.
Tax (Cap.
Appreciation)
0% 12/1/07
Illinois Lake County 12,505,00 7,346,688 12,505,00 7,346,688
Forest 0 0
Preserve
Dist. Unltd.
Tax (Cap.
Appreciation)
0% 12/1/08
Illinois Metropolitan 2,700,000 2,416,500 2,700,000 2,416,500
Pier &
Exposition
Auth.
Dedicated Tax
Rev. 0%
6/15/00
(AMBAC
Insured)
Illinois Metropolitan 12,175,00 6,863,656 12,175,00 6,863,656
Pier & 0 0
Exposition
Auth.
Dedicated Tax
Rev.
(McCormick
Place
ExpansionProj
.) (Cap.
Appreciation)
Series A, 0%
6/15/09 (FGIC
Insured)
Illinois Metropolitan 7,250,000 3,842,500 2,500,000 2,721,875 9,750,000 6,564,375
Pier &
Exposition
Auth.
Dedicated Tax
Rev.
(McCormick
Place
ExpansionProj
.) (Cap.
Appreciation)
Series A, 0%
6/15/10 (FGIC
Insured)
Illinois Metropolitan Pier & Exposition 1,500,000 1,721,250 1,500,000 1,721,250
Auth. Dedicated Tax Rev.
(McCormick Place
ExpansionProj.) (Cap.
Appreciation) Series A, 0%
6/15/15 (FGIC Insured)
Illinois Metropolitan 7,450,000 7,617,625 7,450,000 7,617,625
Pier &
Exposition
Auth.
Dedicated Tax
Rev. Refdg.
(McCormick
PlaceExpansio
n Proj.)
Series A,
5.25%
12/15/10
Illinois Metropolitan 11,570,00 9,863,425 11,570,00 9,863,425
Pier & 0 0
Exposition
Auth.
Dedicated Tax
Rev.
(McCormick
Plain
Expansion
Proj.) (Cap.
Appreciation)
Series A, 0%
6/15/12 (FGIC
Insured)
Illinois Metropolitan 95,000 105,450 3,000,000 3,435,000 3,095,000 3,540,450
Pier &
Exposition
Auth.
Dedicated Tax
Rev.
(McCormick
Place
ExpansionProj
.) Series A,
6.50% 6/15/07
(FGIC
Insured)
Illinois Metropolitan 250,000 203,750 250,000 203,750
Pier &
Exposition
Auth.
Dedicated Tax
Rev.
(McCormick
Plane
ExpansionProj
.) (Cap.
Appreciatiion
) Series A,
0% 6/15/12
(FGIC
Insured)
Illinois Northern 1,000,000 1,057,500 1,000,000 1,057,500
Univ. Rev.
Auxiliary
Facs. Sys.
Rfdg. 6%
4/1/02 (FGIC
Insured)
Illinois Illinois Reg'l. 3,000,000 3,337,500 3,000,000 3,337,500
Trans. Auth.
Series A, 8%
6/1/17 (AMBAC
Insured)
Illinois Illinois Reg'l. 2,800,000 3,223,500 2,800,000 3,223,500
Trans. Auth.
Series D, 7.75%
6/1/04 (FGIC
Insured)
Illinois Illinois Reg'l. 10,000,000 10,662,500 10,000,00 10,662,50
Tran. Auth. Series 0 0
D, 7.75% 6/1/05
(FGIC Insured)
Indiana Indiana Bond 2,500,000 2,412,500 2,500,000 2,412,500
Bank Rev. (State
Revolving Fund
Prog.) Series A,
7% 2/1/05
Indiana Indiana 500,000 591,250 500,000 591,250
Health Facs.
Fing. Auth.
Hosp. Rev.
Rfdg.
(Columbus
Reg'l. Hosp.)
7%
8/15/15(FSA
Insured)
Indiana Indianapolis 3,000,000 3,352,500 1,635,000 1,882,294 4,635,000 5,234,794
Econ. Dev.
Rev. Rfdg. &
Impt. (Nat'l.
Benevolent
Assoc.)
7.625%
10/1/22
Indiana Indianapolis 1,000,000 1,145,000 10,345,000 11,069,150 11,345,00 12,214,15
Resource 0 0
Recovery Rev.
Rfdg. (Ogden
Martin Sys.
Inc. Proj.)
6.75%
12/1/06(AMBAC
Insured)
Kansas Johnson 1,015,000 1,204,044 1,015,000 1,204,044
County
Unified
School Dist.
#512 (Shawnee
Mission) 8%
10/1/03
Kansas Johnson 1,225,000 1,482,250 1,225,000 1,482,250
County
Unified
School Dist
#512 (Shawnee
Mission) 8%
10/1/04
Kansas Johnson 1,250,000 1,535,938 1,250,000 1,535,938
County
Unified
School Dist.
#512 (Shawnee
Mission) 8%
10/1/05
Kansas Kansas City 3,825,000 2,022,469 3,825,000 2,022,469
Util. Sys.
Rev. (Cap.
Appreciation)
0% 9/1/10
(AMBAC
Insured)
(Escrowed to
Maturity)
Kansas Kansas City 2,865,000 1,511,288 2,865,000 1,511,288
Util. Sys.
Rev. (Cap.
Appreciation)
0% 9/1/10
(AMBAC
Insured)
Kansas Kansas Dept. 4,750,000 5,551,563 4,750,000 5,551,563
Trans. Hwy.
Rev. 7.25%
3/1/05
Kansas Reno County 575,000 622,438 575,000 622,438
Mtg. Rev.
Rfdg. (Single
Family)
Series B,
8.70% 9/1/11
Kentucky Jefferson 5,250,000 2,546,250 5,250,000 2,546,250
County Cap.
Projs. Corp.
Rev. (Muni.
Multiple
Rfdg. Lease)
Series A,
0%8/15/11
Kentucky Kentucky Tpk. 7,760,000 6,489,300 7,760,000 6,489,300
Auth. Econ.
Dev. Road
Rev. Rfdg.
(Revitalizati
on) (Cap.
Appreciation)
0% 1/1/02
(FGIC
Insured)
Kentucky Owensboro 10,000,00 6,500,000 10,000,00 6,500,000
Elec. Lt. & 0 0
Pwr. Rev.
Series B, 0%
1/1/07 (AMBAC
Insured)
Kentucky Owensboro 4,000,000 2,180,000 4,000,000 2,180,000
Elec. Lt. &
Pwr. Rev.
Series B, 0%
1/1/10 (AMBAC
Insured)
Kentucky Owensboro 600,000 369,000 600,000 369,000
Elec. Lt. &
Pwr. Rev.
Rfdg. Series
B, 0% 1/1/08,
(AMBAC
Insured)
Louisiana Louisiana 4,000,000 4,460,000 4,000,000 4,460,000
Gen. Oblig.
Series A,
6.75% 5/15/03
(MBIA
Insured)
Louisiana Louisiana 5,865,000 6,612,788 2,000,000 2,395,000 7,865,000 9,007,788
Gen. Oblig.
Series A,
6.75%
5/15/04,
(MBIA
Insured)
Louisiana Lousianna 1,205,000 1,328,513 3,975,000 2,280,656 5,180,000 3,609,169
Offshore Term
Auth. Series
E, 7.60%
9/1/10
(Pre-Refunded
9/1/00 @ 102)
Louisiana Louisianna 1,095,000 1,196,288 1,095,000 1,196,288
Offshore Term
Auth. Series
B, 7.60%
9/1/10
Louisiana Monroe-West 9,000,000 3,566,250 9,000,000 3,566,250
Monroe Pub.
Trust Fing.
Auth. Mtg.
Rev. Rfdg.
(Cap.
Appreciation)
Series C, 0%
8/20/14
Louisiana St. John 2,700,000 2,926,125 2,700,000 2,926,125
Baptist
Parish Sales
Tax Dist.
Rfdg. Series
1989-ST,
7.80% 12/1/14
Maryland Baltimore 3,100,000 3,665,750 3,100,000 3,665,750
Consolidated
Pub. Impt.
Series A,
7.25%
10/15/05
(FGIC
Insured)
Maryland Howard County 250,000 269,688 250,000 269,688
Mtg. Rev.
(Heartlands
Elderly Apts.
Proj.) 8.875%
12/1/10 (MBIA
Insured) (FHA
Guaranteed)
Maryland Maryland 2,500,000 2,543,750 2,500,000 2,543,750
Commmty. Dev.
Admin. Dept.
of Hsg. &
Commty. Dev.
(Single
Family
Housing)
Series B,
5.05% 9/1/19
Maryland Maryland Health 2,000,000 2,255,000 2,000,000 2,255,000
& Higher Edl.
Facs. Auth. Rev.
Rfdg. (Good
Samaritan Hosp.)
5.75%7/1/13
Maryland Maryland 3,000,000 2,970,000 2,660,000 3,205,300 5,660,000 6,175,300
Health &
Higher Edl.
Facs. Auth.
Rev. Rfdg.
(Johns
Hopkins
Univ.) 5.25%
7/1/19
Maryland Maryland 3,000,000 2,951,250 3,000,000 2,951,250
Health &
Higher Edl.
Facs. Auth.
REv. Refdg.
(John Hopkins
Univ.) 5.25%
7/1/17
Maryland Prince 1,500,000 1,515,000 1,500,000 1,515,000
George's
County Solid
Waste Mgmt.
Sys. Rev.
Rfdg. 5.25%
6/15/13 (FSA
Insured)
Maryland Washington D.C. 3,000,000 3,371,250 3,000,000 3,371,250
Metropolitan Area
Trans. Auth.
Gross Rev. Rfdg.
6% 7/1/09 (FGIC
Insured)
Massachusetts Boston Rev. 7,000,000 7,743,750 7,000,000 7,743,750
(Boston City
Hosp.) Series
A, 7.625%
2/15/21 (FHA
Guaranteed)
(Pre-Refunded
to 8/15/00 @
102)
Massachusetts Boston Rev. 1,500,000 1,640,625 1,500,000 1,640,625
Rfdg. (Boston
City Hosp.)
7.15% 8/15/01
(FHA
Guaranteed)
(Pre-Refunded
to8/15/00 @
102)
Massachusetts Massachusetts 5,000,000 5,231,250 5,000,000 5,231,250
Bay Trans.
Auth. Rfdg.
(Gen. Trans.
Sys.) Series
A, 5.50%
3/1/12
Massachusetts Massachusetts 3,090,000 3,298,575 3,090,000 3,298,575
Edl. Loan
Auth. (Edl.
Loan Rev.)
Issue E,
Series B,
5.75% 7/1/05
(AMBACInsured
)
Massachusetts Massachusetts 3,680,000 3,951,400 3,680,000 3,951,400
Edl. Loan
Auth. (Edl.
Loan Rev)
Issue E,
Series B
5.85% 7/1/06
(AMBAC
Insured)
Massachusetts Massachusetts 3,980,000 4,273,525 3,980,000 4,273,525
Educational
Laoan Auth.
(Edl.Loan
Rev.) Issue E
Series B,
5.95% 7/1/07
(AMBAC
Insured)
Massachusetts Massachusetts 4,115,000 4,403,050 4,115,000 4,403,050
Ed. Loan
Auth. Ed.
Loan Rev.
Rfdg. Issue E
Series B,
6.05% 7/1/08
(AMBACInsured
) (AMT)
Massachusetts Massachusetts 1,650,000 1,753,125 1,650,000 1,753,125
Ed. Loan
Auth. Ed.
Loan Rev.
Rfdg. Issue E
Series B,
6.15% 7/1/10
(AMBAC
Insured)
(AMT)
Massachusetts Massachusetts 1,000,000 1,062,500 1,000,000 1,062,500
Ed. Loan
Auth. Ed.
Loan Rev.
Rfdg. Issue E
Series B,
6.25% 7/1/11
(AMBAC
Insured)
(AMT)
Massachusetts Massachusetts 1,000,000 1,058,750 1,000,000 1,058,750
Ed. Loan
Auth. Ed.
Loan Rev.
Rfdg. Issue E
Series B,
6.30% 7/1/12
(AMBAC
Insured)
(AMT)
Massachusetts Massachusetts 3,000,000 3,011,250 3,000,000 3,011,250
Muni.
Wholesale
Elec. Co.
Pwr. Supply
Sys. Rev.
Rfdg. 5%
7/1/10
(AMBACInsured
)
Massachusetts Massachusetts 21,685,000 5,177,294 21,685,00 5,177,294
Muni. Wholesale 0
Elec. Co. Pwr.
Supply Sys. Rev.
Series A, 6.75%
7/1/08(MBIA
Insured)
Massachusetts Massachusetts 11,095,00 11,427,85 11,095,00 11,427,85
Gen. Oblig. 0 0 0 0
Rfdg. Series
A, 5.50%
2/1/11 (MBIA
Insured)
Massachusetts Massachusetts 1,400,000 1,480,500 1,400,000 1,480,500
Gen. Oblig.
Consolidated
LoanSeries A,
6% 6/1/11
(Pre-Refunded
to
6/1/01@100)
Massachusetts Massachusetts 4,000,000 3,965,000 4,000,000 3,965,000
Gen. Oblig.
Consolidated
Loan Series
A, 5% 1/1/12
Massachusetts Massachusetts 9,800,000 10,706,50 9,800,000 10,706,50
Gen. Oblig. 0 0
Rfdg. Series
A, 6.25%
7/1/03
Massachusetts Massachusetts 6,000,000 6,600,000 6,000,000 6,600,000
Gen. Oblig.
Rfdg. Series
A, 6.25%
7/1/04
Massachusetts Massachusetts 12,000,00 12,225,00 12,000,00 12,225,00
Gen. Oblig. 0 0 0 0
Consolidated
LoanSeries C,
5.375% 9/1/14
(MBIA
Insured)
Massachusetts Massachusetts 2,660,000 1,878,625 2,660,000 1,878,625
Health & Edl.
Facs. Auth. Rev.
(Univ. Hosp.)
Series C, 7.25%
7/1/19(MBIA
Insured)
Massachusetts Massachusetts 2,000,000 1,997,500 3,050,000 1,932,938 5,050,000 3,930,438
Health & Edl.
Facs. Auth.
Rev. (New
England Med.
Ctr. Hosp.)
Series
G,5.375%
7/1/24 (MBIA
Insured)
Massachusetts Massachusetts 3,000,000 2,966,250 2,600,000 2,765,750 5,600,000 5,732,000
Health & Edl.
Facs. Auth.
Rev. Rfdg.
(Baystate
Med. Ctr.)
Series D,
5%7/1/12
(FGIC
Insured)
Massachusetts Massachusetts 1,100,000 1,236,125 1,100,000 1,236,125
Health & Edl.
Facs. Auth.
Rev. Rfdg.
(Harvard
Univ.) Series
P,
6.50%11/1/03
Massachusetts Massachusetts 2,500,000 2,437,500 2,500,000 2,437,500
Ind. Fin. Agcy.
Rev. Rfdg.
(Harvard
Commty. Health
Plan) Series
B,8.125% 10/1/17
Massachusetts Massachusetts 23,300,00 17,941,00 23,300,00 17,941,00
Ind. Fin. 0 0 0 0
Agcy. Rev.
(Cap.
Appreciation)
(Massachusett
s
BiomedicalRes
earch) Series
A-2, 0%
8/1/03
Massachusetts Massachusetts 225,000 234,281 225,000 234,281
Ind. Fin.
Agcy. Rev.
(Massachusett
s Biomedical
Research)
Series
A-1,7.10%
8/1/99
Massachusetts Massachusetts 5,000,000 3,662,500 2,000,000 2,242,500 7,000,000 5,905,000
Ind. Fin.
Agcy. Rev.
(Cap.
Appreciation)
(Massachusett
s Biomedical
Research)
Series A-2,
0% 8/1/04
Massachusetts Massachusetts 26,800,00 17,587,50 26,800,00 17,587,50
Ind. Fin. 0 0 0 0
Agcy. Rev.
(Cap.
Appreciation)
(Massachusett
s Biomedical
Research)
Series A-2,
0% 8/1/06
Massachusetts Massachusetts 15,800,00 8,650,500 15,800,00 8,650,500
Ind. Fin. 0 0
Agcy. Rev.
(Cap.
Appreciation)
(Massachusett
s Biomedical
Research)
Series A-2,
0% 8/1/09
Massachusetts Massachusetts 11,000,00 5,651,250 11,000,00 5,651,250
Ind. Fin. 0 0
Agcy. Rev.
(Cap.
Appreciation)
(Massachusett
s Biomedical
Research)
Series A-2,
0% 8/1/10
Massachusetts Massachusetts 6,600,000 7,053,750 6,600,000 7,053,750
Ind. Fin.
Agcy. Rev.
Rfdg.
(Atlanticare
Med. Ctr.)
Series A,
10.125%11/1/1
4
Massachusetts Massachusetts 2,000,000 2,150,000 2,000,000 2,150,000
Hsg. Fin.
Agcy. Hsg.
Rev. Rfdg.
(Rental)
Series A,
6.65% 7/1/19
(AMBACInsured
) (AMT)
Massachusetts Massachusetts 2,500,000 2,453,125 2,500,000 2,453,125
Tpk. Auth.
Metropolitan
Hwy. Sys.
Rev. Series
A, 5.125%
1/1/23 (MBIA
Insured)
Massachusetts Massachusetts 7,000,000 6,685,000 7,000,000 6,685,000
Tpk. Auth.
Metropolitan
Hwy. Sys.
Rev. Series
A, 5% 1/1/27
(MBIA
Insured)
Massachusetts Massachusetts 9,500,000 9,500,000 2,715,000 2,670,881 12,215,00 12,170,88
Tpk. Auth. 0 1
Metropolitan
Hwy. Sys.
Rev. Series
B, 5.25%
1/1/17 (MBIA
Insured)
Massachusetts Massachusetts 9,150,000 9,317,171 2,500,000 2,750,000 11,650,00 12,067,17
Tpk. Auth. 0 1
Western Tpk.
Rev. Series
A, 5.55%
01/1/17 (MBIA
Insured)
Massachusetts New England 18,500,00 19,309,37 5,995,000 6,594,500 24,495,00 25,903,87
Ed. Loan 0 5 0 5
Marketing
Corp. Rev.
Rfdg.
(Student
Loan) Series
A, 5.70%
7/1/05(AMT)
Massachusetts New England 2,500,000 2,562,500 2,500,000 2,562,500
Ed. Loan
Marketing
Corp. Rev.
Rfdg.
(Student
Loan) Series
B, 5.40%
6/1/00
Massachusetts New England 2,500,000 2,540,625 2,500,000 2,540,625
Ed. Loan
Marketing
Corp. Rev.
Rfdg.
(Student
Loan) Series
G, 5% 8/1/00
Massachusetts New England 2,000,000 2,052,500 3,270,000 3,785,025 5,270,000 5,837,525
Ed. Loan
Marketing
Corp. Rev.
Rfdg.
(Student
Loan) Series
G, 5.20%
8/1/02
Michigan Detroit 3,000,000 3,011,250 2,500,000 2,440,625 5,500,000 5,451,875
Convention
Facs. Rev.
Rfdg. (Cobo
Hall
Expansion
Proj.) 5.25%
9/30/12
Michigan Detroit Hosp. 36,710,00 6,607,800 36,710,00 6,607,800
Fin. Auth. 0 0
Hosp. Facs.
Rev. Rfdg.
(Michigan
Health Care
Corp. Proj.)
0%12/1/20
Michigan Michigan Muni. 2,750,000 3,007,813 2,750,000 3,007,813
Auth. Rev. Rfdg.
(Local Gov't.
Loan Prog.) 7%
11/1/02 (AMBAC
Insured)
Michigan Michigan Muni. 3,500,000 3,810,625 3,500,000 3,810,625
Auth. Rev. Rfdg.
(Local Gov't.
Loan Prog.) 7%
11/1/03 (AMBAC
Insured)
Michigan Michigan Hsg. 1,475,000 1,535,844 800,000 799,000 2,275,000 2,334,844
Dev. Auth.
Single Family
Mtg. Rev.
Series A,
7.70% 12/1/16
Michigan Michigan Hsg. 470,000 492,325 4,790,000 5,203,138 5,260,000 5,695,463
Dev. Auth.
Single Family
Mtg. Rev.
Series A,
7.50% 6/1/15
Michigan Michigan 1,000,000 1,115,000 1,000,000 1,115,000
Hosp. Fin.
Auth. Rev.
Rfdg. (Bay
Med. Ctr.)
Series A,
8.25% 7/1/12
Michigan Michigan Hosp. 2,000,000 2,104,200 2,000,000 2,104,200
Fin. Auth. Rev.
Rfdg. (Sisters of
Mercy Health
Corp.) 5.375%
8/15/14(MBIA
Insured)
Michigan Royal Oak 3,695,000 3,791,994 3,695,000 3,791,994
Hosp. Fin.
Auth. Hosp.
Rev. Rfdg.
(William
Beaumont
Hosp.) 5.50%
1/1/14
Michigan Michigan 7,750,000 8,021,250 5,000,000 2,912,500 12,750,00 10,933,75
Univ. Rev. 0 0
Rfdg. (Univ.
Hosp. Proj.)
Series A,
5.75% 12/1/12
Michigan Western 2,000,000 2,112,820 2,000,000 2,112,820
Townships
Util. Auth.
Swr. Disp.
Sys. Ltd. Tax
8.20% 1/1/18
Michigan Western 2,810,000 2,026,713 2,810,000 2,026,713
Townships
Util. Auth.
Swr. Disp.
Sys. Rfdg.
(Cap.
Appreciation)
0% 1/1/05
(FSAInsured)
Minnesota Centennial 2,610,000 2,554,538 2,610,000 2,554,538
Independant
School Dist.
#12 Rfdg.
Series B,
4.875% 2/1/12
(FGIC
Insured)
Minnesota Maplewood 1,000,000 1,036,250 1,000,000 1,036,250
Health Care
Facs. Rev.
(Healtheast
Proj.) 5.80%
11/15/03
Minnesota Minneapolis & 7,000,000 6,571,250 4,500,000 4,415,625 11,500,00 10,986,87
St. Paul Hsg. 0 5
& Redev.
Auth. Health
Care Sys.
Rev. Rfdg.
(HealthspanHe
alth Sys.
Corp.) Series
A, 4.75%
11/15/18
(AMBAC
Insured)
Minnesota Minneapolis 1,175,000 904,750 2,000,000 1,910,000 3,175,000 2,814,750
Gen. Oblig.
(Cap.
Appreciation)
Series B, 0%
12/1/03
Minnesota Minnesota Gen. 8,700,000 8,858,949 8,700,000 8,858,949
Oblig. Unltd. Tax
5.75% 8/1/05
Minnesota Minnesota Hsg. 1,000,000 1,078,750 1,000,000 1,078,750
Fin. Agcy. Single
Family Mtg.
Series K, 6.40%
1/1/15
Minnesota Minnesota 5,750,000 5,857,813 1,500,000 1,668,750 7,250,000 7,526,563
Hsg. Fin.
Agcy. (Single
Family Mtg.)
Series B,
5.80% 7/1/25
(AMT)
Minnesota Minnesota Hsg. 1,000,000 1,111,250 1,000,000 1,111,250
Fin. Agcy. Single
Family Mtg.
Series I, 6.25%
1/1/15
Minnesota Northern 1,700,000 1,790,202 1,700,000 1,790,202
Muni. Pwr.
Agcy. Elec.
Sys. Rev.
Rfdg. Series
A, 7.25%
1/1/16
Minnesota Rochester 2,000,000 2,200,000 2,000,000 2,200,000
Health Care
Facs. Rev.
Rfdg. (Mayo
Foundation/Ma
yo Med. Ctr.)
Series
I,5.90%
11/15/09
Minnesota Rochester 2,250,000 2,466,563 2,250,000 2,466,563
Health Care
Facs. Rev.
Rfdg. (Mayo
Foundation/My
ao Med. Ctr.)
Series
I,5.90%
11/15/10
Minnesota Minnesota 10,000,00 10,200,00 10,000,00 10,200,00
Univ. Rfdg. 0 0 0 0
4.80% 8/15/03
Minnesota Western 3,525,000 3,674,813 3,890,000 2,329,138 7,415,000 6,003,951
Minnesota
Muni. Pwr.
Agcy. Wtr.
Supply Rev.
Rfdg. Series
A, 5.50%
1/1/11 (AMBAC
Insured)
Minnesota Western 1,750,000 1,826,563 1,750,000 1,826,563
Minnesota
Muni. Pwr.
Agncy. Pwr.
Supply Rev.
Rfdg. Series
A, 5.50%
1/1/12 (AMBAC
Insured)
Mississippi Hinds County 1,095,000 1,164,806 8,100,000 4,293,000 9,195,000 5,457,806
Ctfs. of
Prtn. (Hinds
County
Welfare Dept.
Proj.) 7.75%
3/1/09(Pre-Re
funded to
3/1/99 @ 102)
Mississippi Hinds County 4,000,000 4,220,000 3,100,000 1,224,500 7,100,000 5,444,500
Rev. Rfdg.
(Mississipi
Methodist
Hosp. &
Rehabilitatio
n) 5.60%
5/1/12(AMBAC
Insured)
Mississippi Mississippi 275,000 296,313 7,000,000 7,157,500 7,275,000 7,453,813
Home Corp.
Single Family
Rev. Rfdg.
Series
1990-A, 9.25%
3/1/12
(FGICInsured)
Missouri Missouri Higher 75,000 83,250 75,000 83,250
Ed. Loan Auth.
Student Loan
Rev. (Sr. Lien)
Series A, 5.625%
2/15/01
Montana Montana Coal 2,000,000 2,102,500 2,000,000 2,102,500
Severance Tax
Rfdg.
(Broadwater
Pwr. Proj.)
Series A,
6.875%
12/1/11*
Montana Montana Board 6,200,000 7,068,000 6,200,000 7,068,000
of Investment
Payroll Tax
(Workers
Compensation)
Series 1991,
6.875%
6/1/11(MBIA
Insured)
(Escrowed to
Maturity)
Montana Montana Board 2,005,000 2,187,956 2,005,000 2,187,956
of Investment
Payroll Tax
(Workers
Compensation)
6.875% 6/1/20
(MBIA
Insured)
(Escrowed to
Maturity)
Montana Montana Board 1,255,000 1,369,519 1,255,000 1,369,519
of Investment
Payroll Tax
(Workers
Compensation)
6.875% 6/1/20
(MBIA
Insured)
(Escrowed to
Maturity)
Montana Montana Board 3,870,000 4,223,138 3,870,000 4,223,138
of Investment
Payroll Tax
(Workers
Compensation)
6.875% 6/1/20
(MBIA
Insured)
(Escrowed to
Maturity)
Nebraska Douglas 3,250,000 3,599,375 3,250,000 3,599,375
County Hosp.
Auth. #1 Rev.
Rfdg.
(Immanuel
Med. Ctr.,
Inc.) 6.90%
9/1/11(AMBAC
Insured)
Nebraska Nebraska Pub. 6,065,000 6,087,744 1,420,000 1,560,225 7,485,000 7,647,969
Pwr. Dist.
Rev. Rfdg.
(Pwr. Supply
Sys.) Series
B, 5.25%
1/1/13
(MBIAInsured)
Nebraska Nebraska Pub. 5,880,000 5,902,050 4,255,000 4,308,187 10,135,00 10,210,23
Pwr. Dist. 0 7
Rev. Rfdg.
(Pwr. Supply
Sys.) Series
C, 5% 1/1/10
(MBIA
Insured)
Nebraska Scotts Bluff 3,000,000 3,258,750 3,450,000 3,475,875 6,450,000 6,734,625
County Hosp.
Auth. #1
Hosp. Rev.
Rfdg. (Reg'l.
West Med.
Ctr.
Proj.)6.45%
12/15/04
Nevada Clark County Ind. 4,920,000 5,036,850 4,920,000 5,036,850
Dev. Rev. Rfdg.
(Neveda Pwr. Co.
Proj. C) 7.20%
10/1/22
(AMBACInsured)
New Hampshire New Hampshire 2,500,000 2,934,375 2,500,000 2,934,375
Tpk. Sys.
Rev. Rfdg.
Series A, 7%
11/1/06 (FGIC
Insured)
New Jersey Camden County 1,060,000 1,171,300 1,060,000 1,171,300
Muni. Util.
Auth. Swr.
Rev. Rfdg. 6%
7/15/06 (FGIC
Insured)
New Jersey New Jersey 1,345,000 1,400,481 1,345,000 1,400,481
Transit Corp.
Series A,
5.40% 9/1/02
(FSA Insured)
New Jersey New Jersey 7,800,000 8,521,500 7,800,000 8,521,500
Trans. Trust
Fund Auth.
Rfdg. (Trans.
Sys.) Series
A, 6% 6/15/04
(AMBACInsured
)
New Jersey New Jersey 3,000,000 3,525,000 3,000,000 3,525,000
Trans. Trust
Fund Auth.
Rfdg. (Trans.
Sys.) Series
B, 6.50%
6/15/10
(MBIAInsured)
New Jersey New Jersey Tpk. 2,425,000 2,688,719 2,425,000 2,688,719
Auth. Tpk. Rev.
Rfdg. 10.375%
1/1/03 (Escrowed
to Maturity)
New Jersey New Jersey 3,475,000 3,831,188 1,465,000 1,640,800 4,940,000 5,471,988
Wastewtr.
Treatment
Trust Ref.
Series C,
6.25% 5/15/04
(MBIA
Insured)
New Jersey Passaic 3,580,000 3,119,075 2,700,000 3,040,875 6,280,000 6,159,950
County Util.
Auth. Solid
Waste Disp.
Rev. Rfdg.
(Cap.
Appreciation)
0% 3/1/01
(MBIA
Insured)
New Mexico Albuquerque 2,375,000 2,588,750 1,570,000 1,783,913 3,945,000 4,372,663
Arpt. Rev.
Series A,
6.60% 7/1/16
(AMBAC
Insured)
New Mexico Albuquerque 1,100,000 1,190,750 1,100,000 1,190,750
Arpt. Rev.
Rfdg. 6.25%
7/1/03 (AMBAC
Insured)
(AMT)
New Mexico Albuquerque 1,700,000 1,963,500 1,700,000 1,963,500
Arpt. Rev.
Rdfg. 6.75%
7/1/10 (AMBAC
Insured)
(AMT)
New Mexico Albuquerque 1,935,000 2,242,181 5,000,000 5,368,750 6,935,000 7,610,931
Arpt. Rev.
Rfdg. 6.75%
7/1/12 (AMBAC
Insured)
(AMT)
New Mexico New Mexico 5,020,000 5,120,400 5,020,000 5,120,400
Edl.
Assistance
Foundation
Student Loan
Rev. Series
B, 5.25%
4/1/05
(AMBACInsured
)
New Mexico New Mexico 3,400,000 3,761,250 3,000,000 3,082,500 6,400,000 6,843,750
Univ. Rev.
Rfdg. Series
A, 6% 6/1/21
New York Metropolitan 2,000,000 2,150,000 6,000,000 6,465,000 8,000,000 8,615,000
Trans. Auth.
Facs. Rev.
SeriesA, 6%
7/1/16 (FGIC
Insured)
New York Metropolitan 2,890,000 3,074,238 3,750,000 3,881,250 6,640,000 6,955,488
Trans. Auth.
Commuter
Facs. Rev.
Series A, 6%
7/1/21 (FGIC
Insured)
New York Metropolitan 5,000,000 5,137,500 8,010,000 4,475,588 13,010,00 9,613,088
Trans. Auth. 0
Commuter
Facs. Rev.
Series A,
5.625% 7/1/27
(MBIA
Insured)
New York Metropolitan 1,000,000 1,062,500 7,750,000 9,009,375 8,750,000 10,071,87
Trans. Auth. 5
Svc. Contract
Commuter
Facs. Series
O, 5.75%
7/1/08
New York Metropolitan 3,840,000 4,080,000 3,840,000 4,080,000
Trans. Auth.
Svc. Contract
Commuter
Facs. Series
O, 5.75%
7/1/08
New York Metropolitan 7,650,000 8,051,625 1,970,000 1,130,287 9,620,000 9,181,912
Trans. Auth.
Svc. Contract
Commuter
Facs. Series
O, 5.75%
7/1/13
New York Metropolitan 1,800,000 1,320,750 1,800,000 1,320,750
Trans. Auth.
Trans. Facs. Rev.
(Svc. Contract)
Series R, 5.50%
7/1/07
New York Metropolitan 5,000,000 5,612,500 3,315,000 3,600,919 8,315,000 9,213,419
Trans. Auth.
Transport
Facs. Rev.
Rfdg. Series
K, 6.30%
7/1/07
(MBIAInsured)
New York Metropolitan 3,500,000 3,911,250 3,305,000 3,519,825 6,805,000 7,431,075
Trans. Auth.
Transport
Facs. Rev.
Rfdg. Series
K, 6.30%
7/1/06
(MBIAInsured)
New York Metropolitan 5,000,000 5,362,500 5,000,000 5,362,500
Trans. Auth.
Transport
Facs. Rev.
Series A,
6.10% 7/1/21
(FSA Insured)
New York Metropolitan 3,430,000 3,580,063 1,915,000 2,010,750 5,345,000 5,590,813
Trans. Auth.
Transit Facs.
Rev. Series
A, 5.75%
7/1/21 (MBIA
Insured)
New York New York City 18,750,00 20,367,18 455,000 490,262 19,205,00 20,857,45
Muni. 0 8 0 0
Assistance
Corp. Rfdg.
Series E, 6%
7/1/04
New York New York City 2,140,000 2,324,575 4,000,000 4,130,000 6,140,000 6,454,575
Muni.
Assistance
Corp. Rfdg.
Series J, 6%
7/1/04
New York Nassau County 2,465,000 2,625,225 2,465,000 2,625,225
Gen. Impt. Rfdg.
Series A, 6.50%
5/1/04 (FGIC
Insured)
New York Nassau County 4,390,000 5,772,850 4,390,000 5,772,850
Gen. Impt. Rfdg.
series A, 6.50%
5/1/06 (FGIC
Insured)
New York New York City 4,940,000 5,384,600 4,940,000 5,384,600
Gen. Oblig.
Rfdg. Series
H, 7.875%
8/1/00
New York New York City 2,000,000 2,150,000 2,000,000 2,150,000
Gen. Oblig.
Series F,
8.10%
11/15/99
New York New York City 2,000,000 2,100,000 2,000,000 2,100,000
Gen. Oblig.
Rfdg. Series
B, 5.70%
8/15/02
New York New York City 2,000,000 2,222,500 2,000,000 2,222,500
Gen. Oblig.
Series B,
7.50% 2/1/02
New York New York City 5,000,000 5,187,500 5,000,000 5,187,500
Gen. Oblig.
Rfdg. Series
H, 5.50%
8/1/01
New York New York City 5,000,000 5,587,500 2,325,000 2,673,750 7,325,000 8,261,250
Gen. Oblig.
Series B,
7.50% 2/1/03
New York New York City 1,500,000 1,670,625 2,540,000 2,959,100 4,040,000 4,629,725
Gen. Oblig.
Series B,
7.50% 2/1/04
New York New York City 4,120,000 4,459,900 4,120,000 4,459,900
Gen. Oblig.
Series C,
6.40% 8/1/03
New York New York City 2,000,000 2,235,000 7,425,000 8,288,156 9,425,000 10,523,15
Gen. Oblig. 6
Rfdg. Series
A, 7% 8/1/03
New York New York City 5,000,000 5,375,000 4,490,000 5,034,412 9,490,000 10,409,41
Gen. Oblig. 2
Rfdg. Series
A, 6.375%
8/1/05
New York New York City 4,000,000 4,515,000 4,000,000 4,515,000
Gen. Oblig. Rfdg.
Series D, 8%
2/1/05
New York New York City 3,000,000 3,217,500 3,000,000 3,217,500
Gen. Oblig.
Rfdg. Series
C, 6.50%
8/1/07
New York New York City 4,900,000 4,911,564 4,900,000 4,911,564
Gen. Oblig.
Series A, 6%
8/1/18 (FSA
Insured)
(Escrowed to
Maturity)
New York New York City 10,285,00 10,657,83 10,285,00 10,657,83
Gen. Oblig. 0 1 0 1
Rfdg. Series
E, 5.40%
2/15/03
New York New York City 3,000,000 3,090,000 3,000,000 3,090,000
Gen. Oblig.
Series G,
5.40% 2/1/01
New York New York City 12,595,00 13,098,80 12,595,00 13,098,80
Gen. Oblig. 0 0 0 0
Series G,
5.60% 2/1/02
New York New York City 3,000,000 3,206,250 3,000,000 3,206,250
Gen. Oblig.
Series J, 6%
2/15/04
New York New York City 3,580,000 3,718,725 3,580,000 3,718,725
Gen. Oblig.
Rfdg. Series
H, 5.40%
8/1/04
New York New York City 1,640,000 1,771,200 1,640,000 1,771,200
Gen. Oblig.
Series H,
6.90% 2/1/01
(Escrowed to
Maturity)
New York New York City 245,000 263,069 245,000 263,069
Gen. Oblig.
Series H,
6.90% 2/1/01
New York New York Gen. 250,000 279,063 250,000 279,063
Oblig. Series
A, 7.75%
8/17/07
New York New York City 1,495,000 1,597,781 6,500,000 7,345,000 7,995,000 8,942,781
Gen. Oblig.
Series F,
6.10% 2/15/02
(Escrowed to
Maturity)
New York New York City 995,000 1,054,700 2,000,000 2,350,000 2,995,000 3,404,700
Gen. Oblig.
Series F,
6.10% 2/15/02
New York New York City 5,000 5,225 1,200,000 1,401,000 1,205,000 1,406,225
Rfdg. Series
B, 5.50%
8/15/01(Escro
wed to
Maturity)
New York New York Gen. 395,000 409,813 395,000 409,813
Oblig. Series
B, 5.5%
8/15/01
New York New York City 11,900,00 11,969,37 11,900,00 11,969,37
Gen. Oblig. 0 7 0 7
Series L,
4.75% 8/1/98
New York New York City 1,325,000 1,376,344 1,500,000 1,668,750 2,825,000 3,045,094
Muni. Wtr.
Fin. Auth.
Wtr. & Swr.
Sys. Rev.
Series B,
5.875%
6/15/26
New York New York City 4,550,000 4,680,813 4,550,000 4,680,813
Trust
Cultural
Resources
Rev.
(American
Museum of
Nat'l.
History)Serie
s A, 5.65%
4/1/27 (MBIA
Insured)
New York New York State 7,450,000 7,934,250 7,450,000 7,934,250
Dorm. Auth. Rev.
(City Univ. Sys.
Consolidated)
Series D, 7%
7/1/09
New York New York 7,000,000 8,172,990 10,000,000 11,175,000 17,000,00 19,347,99
State Dorm. 0 0
Auth. Rev.
(Suffolk
County
Judicial
Facs.) Series
A, 9.50%
4/15/14
New York New York 3,500,000 3,696,875 3,500,000 3,696,875
State Dorm.
Auth. Rev.
Rfdg. (State
Univ. Edl.
Facs.) Series
A, 5.50%
5/15/08
New York New York 7,000,000 7,560,000 7,000,000 7,560,000
State Dorm.
Auth. Rev.
Rfdg. (State
Univ. Edl.
Facs.) Series
A, 5.875%
5/15/11
New York New York 19,100,00 19,649,12 4,375,000 4,943,750 23,475,00 24,592,87
State Dorm. 0 5 0 5
Auth. Rev.
Rfdg. (State
Univ. Edl.
Facs.) Series
A, 5.50%
5/15/13
New York New York 3,565,000 3,836,831 3,565,000 3,836,831
State Dorm.
Auth. Rev.
Rfdg. (State
Univ. Edl.
Facs.) Series
A,5.875%
5/15/17
New York New York 1,000,000 1,036,250 2,550,000 3,037,687 3,550,000 4,073,937
State Dorm.
Auth. Rev.
Rfdg. (State
Univ. Edl.
Facs.) Series
B, 5.25%
5/15/05
New York New York 8,000,000 8,110,000 8,000,000 8,110,000
State Dorm.
Auth. Rev.
Rfdg. (State
Univ. Edl.
Facs.) Series
B, 5.25%
5/15/11
New York New York 3,000,000 3,322,500 3,000,000 3,322,500
State Dorm.
Auth. Rev.
Rfdg. (State
Univ. Edl.
Facs.) Series
A, 6.50%
5/15/04
New York New York 2,465,000 2,622,144 2,465,000 2,622,144
State Dorm.
Auth. Rev.
(State Univ.
Edl. Facs.)
5.75% 5/15/09
New York New York State 6,000,000 6,180,000 6,000,000 6,180,000
Dorm. Auth. Rev.
Rfdg. (Mental
Health Svcs.
Facs.) Series B,
6% 2/15/03
New York New York 2,000,000 2,155,000 14,120,000 14,684,800 16,120,00 16,839,80
State Envir. 0 0
Facs. Corp.
Poll. Cont.
Rev. Rfdg.
(State Wtr.
Revolving
Fund)(New
York City
Muni. Wtr.)
Series A,
5.75% 6/15/12
New York New York 2,000,000 1,202,500 2,000,000 1,202,500
State Local
Gov't.
Assistance
Corp. (Cap.
Appreciation)
Series A, 0%
4/1/08
New York New York 5,000,000 3,006,250 5,000,000 3,006,250
State Local
Gov't.
Assistance
Corp. (Cap.
Appreciation)
Series B, 0%
4/1/08
New York New York 4,600,000 4,922,000 4,600,000 4,922,000
State Local
Gov't.
Assistance
Corp. Series
C, 6.50%
4/1/15
New York New York 18,140,00 18,752,22 18,140,00 18,752,22
State Local 0 5 0 5
Gov't.
Assistance
Corp. Series
B, 6% 4/1/18
New York New York 31,600,00 32,311,00 31,600,00 32,311,00
State Local 0 0 0 0
Gov't.
Assistance
Corp. Rfdg.
Series C,
5.50% 4/1/17
New York New York 8,335,000 9,085,150 8,335,000 9,085,150
State Local
Gov't.
Assistance
Corp. Rfdg.
Series E, 6%
4/1/14
New York New York 15,575,00 15,555,53 15,575,00 15,555,53
State Local 0 1 0 1
Gov't.
Assistance
Corp. Rfdg.
Series E,
5.25% 4/1/16
New York New York 11,000,00 11,013,75 11,000,00 11,013,75
State Local 0 0 0 0
Gov't.
Assistance
Corp. Rfdg.
Series A,
5.375% 4/1/16
New York New York 8,500,000 5,896,875 8,500,000 5,896,875
State Tollway
Auth. Gen.
Rev. (Spl.
Oblig.) (Cap.
Appreciation)
Series A,
0%1/1/05
New York New York 2,345,000 2,588,294 2,500,000 2,721,875 4,845,000 5,310,169
State Thruway
Auth. Hwy. &
Bridge Trust
Fund Series
A, 6.25%
4/1/04
(MBIAInsured)
New York New York State 3,500,000 3,561,250 3,500,000 3,561,250
Thruway Auth.
Svc. Contract
Rev. (Local Hwy.
& Bridge) 7.25%
1/1/10(Pre-Refun
ded to 1/1/01 @
102)
New York New York State 3,000,000 3,637,500 3,000,000 3,637,500
Tollway Auth. Svc.
Contract Rev.
(Local Hwy. &
Bridge) Series A,
6%1/1/05 (MBIA
Insured)
New York New York 2,300,000 2,423,625 2,000,000 2,332,500 4,300,000 4,756,125
State Urban
Dev. Corp.
Rev. Rfdg.
(State Facs.)
5.75% 4/1/11
New York New York State 3,780,000 4,502,925 3,780,000 4,502,925
Urban Dev. Corp.
Rev.
Rfdg.(Correctiona
l Cap. Facs.)
Series A,
6.30%1/1/03
New York Niagara Falls 500,000 642,500 500,000 642,500
Pub. Impt.
7.50% 3/1/18
(MBIA
Insured)
New York Suffolk 3,000,000 3,078,750 3,000,000 3,078,750
County Wtr.
Auth.
Waterwks.
Rev. Rfdg.
(Sr, Lien)
5.10% 6/1/09
(MBIA
Insured)
New York Triborough 2,325,000 2,752,219 2,325,000 2,752,219
Bridge &
Tunnel Auth.
Rev.
(Convention
Ctr. Proj.)
Series E,
7.25% 1/1/10
New York Triborough 3,155,000 2,906,544 3,155,000 2,906,544
Bridge &
Tunnel Auth.
Rev. (Gen.
Purp.) Series
A, 4.75%
1/1/19
New York Triborough 2,075,000 2,023,125 2,075,000 2,023,125
Bridge &
Tunnel Auth.
Rev. Series
A, 5.125%
1/1/22
New York Triborough 10,100,00 10,554,50 4,370,000 4,621,275 14,470,00 15,175,77
Bridge & 0 0 0 5
Tunnel Auth.
Rev. Rfdg.
(Gen. Purp.)
Series Y,
5.50% 1/1/17
North North 2,000,000 2,120,000 2,000,000 2,120,000
Carolina Caroline
Eastern Muni.
Pwr. Agcy.
Pwr. Sys.
Rev. Rfdg.
Series A,
6.25% 1/1/03
North North 9,000,000 9,483,750 9,000,000 9,483,750
Carolina Carolina
Eastern Muni.
Pwr. Agcy.
Pwr. Sys.
Rev. Series
B, 6% 1/1/05
North Carolina North Carolina 8,035,000 8,547,231 8,035,000 8,547,231
Eastern Muni.
Pwr. Agcy. Pwr.
Sys. Rev. Rfdg.
Series B, 7.25%
1/1/07
North North 20,000,00 22,875,00 20,000,00 22,875,00
Carolina Carolina 0 0 0 0
Eastern Muni.
Pwr. Agcy.
Pwr. Sys.
Rev. Rfdg.
Series B, 7%
1/1/08
North North 5,000,000 5,693,750 2,500,000 2,687,500 7,500,000 8,381,250
Carolina Carolina
Eastern Muni.
Pwr. Agcy.
Pwr. Sys.
Rev. Rfdg.
Series C, 7%
1/1/07
North North 5,950,000 6,128,500 5,950,000 6,128,500
Carolina Carolina
Eastern Muni.
Pwr. Agcy.
Pwr. Sys.
Rev. Rfdg.
Series C,
5.50% 1/1/07
North North 4,655,000 4,841,200 4,655,000 4,841,200
Carolina Carolina
Muni. Pwr.
Agcy. #1
Catawba Elec.
Rev. 5.25%
1/1/09 (MBIA
Insured)
North Dakota Mercer County 3,750,000 4,110,938 2,500,000 2,556,250 6,250,000 6,667,188
Poll. Cont.
Rev. Rfdg.
(Montana-Dako
ta Utils. Co.
Proj.) 6.65%
6/1/22(FGIC
Insured)
North Dakota Mercer County 5,000,000 6,106,250 5,250,000 5,722,500 10,250,00 11,828,75
Poll. Cont. 0 0
Rev. Rfdg.
(Antelope
Valley
Station/Basin
Elec. Pwr.
Cooper) 7.20%
6/30/13
(AMBAC
Insured)
Ohio Bedford Hosp. 935,000 1,024,994 8,425,000 8,414,469 9,360,000 9,439,463
Impt. Rev.
Rfdg.
(Bedford
Commty.
Hosp.) Series
1990, 8.50%
5/15/09(Pre-R
efunded to
5/15/00 @
102)
Ohio Cleveland 2,000,000 2,180,000 2,000,000 2,180,000
Wtrwks. Rev.
Rfdg. (First Mtg.)
Series G, 5.50%
1/1/21 (MBIA
Insured)
Ohio Euclid City 1,265,000 1,019,906 1,265,000 1,019,906
School Dist.
(Cap.
Appreciation)
0% 12/1/02,
(AMBAC
Insured)
Ohio Euclid City 1,265,000 972,469 1,265,000 972,469
School Dist.
(Cap.
Appreciation)
0% 12/1/03,
(AMBAC
Insured)
Ohio Ohio Hsg. 7,000,000 7,122,500 5,000,000 5,518,750 12,000,00 12,641,25
Fin. Agcy. 0 0
Mtg. Rev.
4.95% 9/1/20
(AMT)
Ohio Ohio Hsg. 1,570,000 1,813,350 2,500,000 2,659,375 4,070,000 4,472,725
Fin. Agcy.
Mtg. Rev.
(Oakleaf-Tole
do Apts.
Proj.) 10.25%
12/20/25,
(GNMA Coll.)
Ohio Ohio Bldg. 8,500,000 8,000,625 2,500,000 2,725,000 11,000,00 10,725,62
Auth. Workers 0 5
Compensation
(W. Green
Bldg. A)
4.75% 4/1/14
Ohio Ohio Bldg. 4,000,000 4,180,000 4,000,000 4,180,000
Auth. State
Facs. (Adult
Correctional)
Series A,
5.95% 10/1/14
(MBIA
Insured)
Ohio Ohio Bldg. Auth. 6,000,000 6,457,500 6,000,000 6,457,500
Facs.
(Administration
Bldg. Fund)
Series A, 6%
10/1/06
Ohio Ohio Tpk. 1,250,000 1,295,313 1,250,000 1,295,313
Commission
Tpk. Rev.
Series A,
5.60% 2/15/12
(MBIA
Insured)
Ohio Ohio Tpk. 2,750,000 2,866,875 2,750,000 2,866,875
Commission
Tpk. Rev.
Series A,
5.70% 2/15/13
(MBIA
Insured)
Ohio Ohio Tpk. 5,000,000 5,187,500 5,000,000 5,187,500
Commission
Tpk. Rev.
Series A,
5.70% 2/15/17
(MBIA
Insured)
Ohio Ohio Wtr. 1,000,000 1,067,500 2,375,000 2,746,094 3,375,000 3,813,594
Dev. Auth.
Rev. Rfdg.
(Impt. Pure
Wtr. 5.75%
6/1/06 (MBIA
Insured)
Ohio Ohio Wtr. Dev. 3,650,000 4,174,687 3,650,000 4,174,687
Auth. Rev. Fresh
Wtr. Series,
6.25% 6/1/02
(AMBAC Insured)
Ohio Ohio Wtr. Dev. 10,000,000 10,162,500 10,000,00 10,162,50
Auth. Poll. Cont. 0 0
Facs. Rev. (Wtr.
Cont. Loan Fund)
State Match
Series, 6.50%
6/1/03 (MBIA
Insured)
Oregon Multnomah 10,000,000 10,037,500 10,000,00 10,037,50
County School 0 0
Dist. #3 (Park
Rose) 7% 12/1/04
(FGIC Insured)
Oregon Oregon Health 1,750,000 1,885,625 3,245,000 3,557,331 4,995,000 5,442,956
Hsg. Edl. &
Cultural
Facs. Auth.
Rev. Rfdg.
(Lewis &
Clark
College)Serie
s A, 6%
10/1/13 (MBIA
Insured)
Oregon Oregon Health 1,000,000 1,068,750 1,000,000 1,068,750
Hsg. Edl. &
Cultural
Facs. Auth.
Rev. Rfdg.
(Lewis &
Clark
College)Serie
s A, 6.125%
10/1/24 (MBIA
Insured)
Oregon Port Morrow 385,000 437,456 385,000 437,456
Poll. Cont.
Rev. Rfdg.
(Pacific
Northwest)
Series A, 8%
7/15/11
Oregon Port Morrow 155,000 158,891 155,000 158,891
Poll. Cont.
Rev. Rfdg.
(Pacific
Northwest)
Series A, 8%
7/15/98
Oregon Port Morrow 175,000 185,719 175,000 185,719
Poll. Cont.
Rev. Rfdg.
(Pacific
Northwest)
Series A, 8%
7/15/99
Oregon Port Morrow 385,000 437,456 385,000 437,456
Poll. Cont.
Rev. Rfdg.
(Pacific
Northwest)
Series A, 8%
7/15/06
Oregon Port Morrow 430,000 488,588 430,000 488,588
Poll. Cont.
Rev. Rfdg.
(Pacific
Northwest)
Series A, 8%
7/15/07
Oregon Port Morrow 480,000 545,400 480,000 545,400
Poll. Cont.
Rev. Rfdg.
(Pacific
Northwest)
Series A, 8%
7/15/08
Oregon Port Morrow 540,000 613,575 540,000 613,575
Poll. Cont.
Rev. Rfdg.
(Pacific
Northwest)
Series A, 8%
7/15/09
Oregon Port Morrow 605,000 687,431 605,000 687,431
Poll. Cont.
Rev. Rfdg.
(Pacific
Northwest)
Series A, 8%
7/15/10
Oregon Portland 1,385,000 1,483,681 1,385,000 1,483,681
Series B, 7%
6/1/00
Oregon Portland 1,480,000 1,620,600 1,480,000 1,620,600
Series B, 7%
6/1/01
Oregon Portland Swr. 2,000,000 2,032,500 3,250,000 3,306,875 5,250,000 5,339,375
Sys. Rev.
Rfdg. Series
A, 5.25%
3/1/10
Oregon Portland Swr. 1,875,000 2,071,875 1,875,000 2,071,875
Sys. Rev.
Series A,
6.25% 6/1/15
(Pre-Refunded
to 6/1/04 @
101)
Pennsylvania Allegheny 10,040,00 9,688,600 6,500,000 6,118,125 16,540,00 15,806,72
County Hosp. 0 0 5
Dev. Auth.
(Univ. of
Pittsburg
Med. Ctr.)
Series B,
5.125% 7/1/22
(MBIA
Insured)
Pennsylvania Butler County 5,000,000 5,493,750 5,000,000 5,493,750
Hosp. Auth.
Hosp. Rev.
(North Hills
Passavant
Hosp.) Series
A,
6.80%6/1/06
(FSA Insured)
(Pre-Refunded
to 6/1/01 @
102)
Pennsylvania Cumberland 4,600,000 4,950,750 1,750,000 1,922,812 6,350,000 6,873,562
County Muni.
Auth. Rev.
Rfdg. (1st.
Mtg.-Carlisle
Hosp. &
Health)
6.80%11/15/23
Pennsylvania Delaware 9,050,000 9,570,375 9,050,000 9,570,375
County Ind.
Dev. Auth.
Rev. Rfdg.
(Resource
Recovery
Fac.) Series
A,
6.10%7/1/13
Pennsylvania Northumberlan 11,830,00 5,190,413 11,830,00 5,190,413
d County 0 0
Auth.
Commonwealth
Lease Rev.
(Correctional
Facs.)
(Cap.Apprecia
tion) 0%
10/15/13
(MBIA
Insured)
Pennsylvania Pennsylvania 10,000,00 10,775,00 10,000,00 10,775,00
Hsg. Fin. 0 0 0 0
Agcy. Single
Family Mtg.
Series 44C,
6.65% 10/1/21
(AMT)
Pennsylvania Pennsylvania 1,860,000 2,011,125 1,860,000 2,011,125
Hsg. Fin. Agcy.
Rev. Rfdg. (Single
Family Mtg.)
Series 54A,
5.375%10/1/28
(AMT)
Pennsylvania Philadelphia 7,670,000 8,236,569 7,670,000 8,236,569
Graduated Hlth.
7% 7/1/05
Pennsylvania Philadelphia 3,000,000 2,966,250 1,975,000 2,157,687 4,975,000 5,123,937
Wtr. &
Wastewtr.
Rev. Rfdg. 5%
6/15/12 (FGIC
Insured)
Pennsylvania Philadelphia 2,000,000 2,257,500 2,790,000 3,348,000 4,790,000 5,605,500
Wtr. &
Wastewtr.
Rev. 6.75%
8/1/04 (MBIA
Insured)
Pennsylvania Philadelphia 1,500,000 1,706,250 2,940,000 3,248,700 4,440,000 4,954,950
Wtr. &
Wastewtr.
Rev. 6.75%
8/1/05 (MBIA
Insured)
Pennsylvania Philadelphia 5,500,000 5,396,875 5,500,000 5,396,875
Hosp. & Higher
Ed. Facs. Auth.
Hosp. Rev. Rfdg.
(Pennsylvania
Hosp.)5.35%
7/1/99
Pennsylvania Philadelphia 4,405,000 4,531,644 4,405,000 4,531,644
Hosp. &
Higher Ed.
Facs.
Auth.Hosp.
Rev. Rfdg.
(Pennsylvania
Hosp.) 5.70%
7/1/01
Pennsylvania Philadelphia 250,000 261,563 250,000 261,563
Muni. Auth.
Rev. Rfdg.
Lease Series
D, 6% 7/15/03
Pennsylvania Philadelphia 4,000,000 4,220,000 4,000,000 4,220,000
Muni. Auth.
Rev. Rfdg.
Series D,
6.125%
7/15/08
Pennsylvania Pittsburgh 3,900,000 2,851,875 3,900,000 2,851,875
Wtr. & Swr.
Auth. Wtr. &
Swr. Sys.
Rev. Rfdg.
(Cap.
Appreciation)
Series A,0%
9/1/04 (FGIC
Insured)
(Escrowed to
Maturity)
Pennsylvania Pittsburgh 10,000,00 9,387,500 10,000,00 9,387,500
Wtr. & Swr. 0 0
Auth. Wtr. &
Swr. Sys.
Rev. Rfdg.
Series A,
4.75% 9/1/16
(FGICInsured)
Pennsylvania Wyoming Ind. 4,300,000 4,558,000 4,300,000 4,558,000
Dev. Auth.
Poll. Cont.
Rev. Rfdg.
(Proctor &
Gamble Paper
Proj.)
5.55%5/1/10
Rhode Island Rhode Island 2,645,000 2,820,231 2,645,000 2,820,231
Depositors
Econ.
Protection
Corp. Spl.
Oblig. Rfdg.
Series A,
5.75%8/1/12
(MBIA
Insured)
South Carolina Charlston County 980,000 1,008,175 980,000 1,008,175
Gen. Oblig. Unltd.
Tax 6% 6/1/13
South Piedmont 1,135,000 1,201,681 1,135,000 1,201,681
Carolina Muni. Pwr.
Agcy. Elec.
Rev. Rfdg.
5.50% 1/1/10
(MBIA
Insured)
(Escrowed
toMaturity)
South Piedmont 1,455,000 1,531,388 1,455,000 1,531,388
Carolina Muni. Pwr.
Agcy. Elec.
Rev. Rfdg.
5.50% 1/1/10
(MBIA
Insured)
South Piedmont 2,295,000 2,461,388 2,295,000 2,461,388
Carolina Muni. Pwr.
Agcy. Elec.
Rev. Rfdg.
5.60% 1/1/09
(MBIA
Insured)
(Escrowed
toMaturity)
South Piedmont 2,945,000 3,140,106 2,000,000 2,252,500 4,945,000 5,392,606
Carolina Muni. Pwr.
Agcy. Elec.
Rev. Rfdg.
5.60% 1/1/09
(MBIA
Insured)
South Piedmont 4,625,000 4,711,719 2,000,000 2,247,500 6,625,000 6,959,219
Carolina Muni. Pwr.
Agcy. Elec.
Rev. Rfdg.
Series B,
5.25% 1/1/11
(MBIA
Insured)
South South 8,775,000 9,455,063 1,200,000 1,205,652 9,975,000 10,660,71
Carolina Carolina Ed. 5
Assistance
Auth. Rev.
(Student
Loan) 6.625%
9/1/06 (AMT)
South South 3,750,000 3,984,375 1,335,000 1,353,356 5,085,000 5,337,731
Carolina Carolina Pub.
Svc. Auth.
Rev. Rfdg.
Series A,
6.375% 7/1/21
(AMBAC
Insured)
South South 3,665,000 4,068,150 3,665,000 4,068,150
Carolina Carolina Pub.
Svc. Auth.
Rev. Rfdg.
Series A,
6.25% 2/1/06
(MBIA
Insured)
South South 200,000 227,000 200,000 227,000
Carolina Carolina Pub.
Svc. Auth.
Rev. Rfdg.
Series A,
6.50% 1/1/08
(MBIA
Insured)
South Dakota Spearfish 1,500,000 1,670,625 1,500,000 1,670,625
School Dist.
#40-2 Unltd.
Tax (Lawrence
County) 7.30%
7/1/11
(Pre-Refunded
to 7/1/01 @
102)
Tennessee Johnson City 5,335,000 5,274,981 5,335,000 5,274,981
Elec. Rev.
5.15% 5/1/23
(MBIA
Insured)
Tennessee Memphis-Shelb 1,415,000 1,574,188 1,415,000 1,574,188
y County
Arpt. Auth.
Arpt. Rev.
Rfdg. Series
A, 6.25%
2/15/11 (MBIA
Insured)
Tennessee Shelby County 3,000,000 3,371,250 3,000,000 3,371,250
Gen. Oblig.
Rfdg. Series
A, 6.75%
4/1/04
Tennessee Tennessee 2,355,000 2,658,206 2,355,000 2,658,206
Gen. Oblig.
Series A, 7%
3/1/03
Texas Allen 2,120,000 1,597,950 3,000,000 3,195,000 5,120,000 4,792,950
Independent
School Dist.
Rfdg. (Cap.
Appreciation)
0% 2/15/04
(PSF
Guaranteed)
Texas Allen 2,120,000 1,515,800 2,120,000 1,515,800
Independent
School Dist.
Rfdg. (Cap.
Appreciation)
0% 2/15/05
(PSF
Guaranteed)
Texas Austin Gen. 2,000,000 1,943,720 2,000,000 1,943,720
Oblig. Rfdg.
(Pub. Impt.)
(Cap.
Appreciation)
Series B, 0%
9/1/98
(MBIAInsured)
Texas Austin 500,000 565,625 1,500,000 1,291,875 2,000,000 1,857,500
Independent
School Dist.
School Bldg.
8.125% 8/1/01
(PSF
Guaranteed)
(Escrowedto
Maturity)
Texas Austin 2,100,000 1,711,500 7,820,000 6,871,825 9,920,000 8,583,325
Independent
School Dist.
Rfdg. (Cap.
Appreciation)
0% 8/1/02
(PSF
Guaranteed)
Texas Austin Util. 4,000,000 3,375,000 4,000,000 3,375,000
Sys. Rev.
Rfdg. (Cap.
Appreciation)
Series A, 0%
11/15/01
(MBIA
Insured)
Texas Austin Util. 3,895,000 2,283,444 3,895,000 2,283,444
Sys. Rev.
Rfdg. Series
A, 0%
11/15/08,
(MBIA
Insured)
Texas Austin Util. 4,000,000 2,210,000 4,000,000 2,210,000
Sys. Rev.
(Capital
Appreciation)
0% 11/15/09,
(AMBAC
Insured)
Texas Brazos River 6,400,000 6,604,992 6,400,000 6,604,992
Auth. Poll.
Cont. Rev.
(Texas Utils.
Elec. Co.)
Series A,
9.25%
3/1/18(AMT)
Texas Cedar Hill 1,575,000 876,094 1,575,000 876,094
Independent
School Dist.
Rfdg. (Cap.
Appreciation)
0% 8/15/09
(PSFGuarantee
d)
Texas Conroe 1,360,000 875,500 1,360,000 875,500
Independent
School Dist.
Rfdg. (Cap.
Appreciation)
0% 2/15/07
(PSF
Guaranteed)
Texas Conroe 3,000,000 1,826,250 3,000,000 1,826,250
Independent
School Dist.
Rfdg. (Cap.
Appreication)
0% 2/15/08
(PSF
Guaranteed)
Texas Conroe 1,805,000 972,444 1,805,000 972,444
Independent
School Dist.
Rfdg. (Cap.
Appreciation)
0% 2/15/10
(PSF
Guaranteed)
Texas Conroe 1,500,000 763,125 1,500,000 763,125
Independent
School Dist.
Rfdg. (Cap.
Appreciation)
0% 2/15/11
(PSF
Guaranteed)
Texas Corpus 1,535,000 1,310,506 1,535,000 1,310,506
Christi
Independent.
School Dist.
Rfdg. (Cap.
Appreciation)
0% 8/15/01
(PSF
Guanteed)
Texas Corpus 2,165,000 1,761,769 2,165,000 1,761,769
Christi
Independent.
School Dist.
Rfdg. 0%
8/15/02 (PSF
Guaranteed)
Texas Cypress-Fairb 4,250,000 3,208,750 4,250,000 3,208,750
anks
Independent
School Dist.
Rfdg. Unltd.
Tax (Cap.
Appreciation)
0%2/1/04 (PSF
Guaranteed)
Texas Cypress-Fairb 5,000,000 2,400,000 5,000,000 2,400,000
anks
Independent
School Dist.
Rfdg. Unltd.
Tax (Cap.
Appreciation)
Series A, 0%
2/15/12 (PSF
Guaranteed)
Texas Dallas-Fort 2,295,000 2,590,481 2,295,000 2,590,481
Worth Reg'l.
Arpt. Rev.
Rfdg. (Joint
Dallas/Fort
Worth Int'l.
Arpt.)
6.50%11/1/05
(FGIC
Insured)
Texas Dallas Gen. 5,115,000 4,072,819 3,125,000 3,024,250 8,240,000 7,097,069
Oblig. Rfdg.
(Cap.
Appreciation)
0% 2/15/03
Texas Dallas Gen. 2,500,000 2,759,375 2,500,000 2,759,375
Oblig. Ref.
(Dallas
Denton &
Collin Co.)
6.50% 2/15/03
Texas Dallas Gen. 2,400,000 2,244,000 2,400,000 2,244,000
Oblig. 4.50%
2/15/14
Texas Dallas Hsg. 1,100,000 1,157,750 3,000,000 4,046,250 4,100,000 5,204,000
Corp. Cap.
Prog. Rev.
Rfdg.
(Section 8
Assorted
Projs.) 7.70%
8/1/05
Texas Dallas Hsg. 1,000,000 1,056,250 1,115,000 1,319,881 2,115,000 2,376,131
Corp. Cap.
Prog. Rev.
Rfdg.
(Section 8
Assorted
Projs.) 7.85%
8/1/13
Texas Dallas 3,300,000 2,074,875 2,405,000 2,889,006 5,705,000 4,963,881
Independent
School Dist.
Rfdg. (Cap.
Appreciation)
0% 8/15/07
(PSF
Guaranteed)
Texas El Paso 1,000,000 1,023,750 1,000,000 1,023,750
Int'l. Arpt.
Rev. 5.12%
8/15/04 (FGIC
Insured)
(AMT)
Texas El Paso Prop. 1,060,000 1,154,075 1,060,000 1,154,075
Fin. Auth.
Single Family
Mtg. Rev.
Series A,
8.70%
12/1/18,
(GNMA Coll.)
(AMT)
Texas Garland 5,000,000 4,193,750 5,000,000 4,193,750
Independent
School Dist.
Series A, 4%
2/15/17
Texas Grapevine-Col 2,580,000 1,715,700 2,580,000 1,715,700
leyville
Indpt. School
Dist. Rfdg.
(Cap.
Appreciation)
0%
8/15/06(PSF
Guaranteed)
Texas Houston Gen. 9,800,000 5,965,750 9,800,000 5,965,750
Oblig. Rfdg.
Series C, 5.75%
4/1/12
Texas Houston 6,400,000 3,176,000 6,400,000 3,176,000
Independent.
School Dist.
Rfdg. Series
A, 0% 8/15/11
(PSF
Guaranteed)
Texas Irving 5,520,000 4,816,200 2,975,000 3,681,563 8,495,000 8,497,763
Independent
School Dist.
0% 2/15/01
Texas Katy Indpt. 4,170,000 2,069,363 6,515,000 7,247,938 10,685,00 9,317,301
School Dist. 0
Rfdg. 0%
8/15/11 (PSF
Guaranteed)
Texas Katy 2,450,000 1,577,188 2,450,000 1,577,188
Independent
School Dist.
Rfdg. Ltd.
Tax (Cap.
Appreciation)
Series A, 0%
2/15/07(PSF
Guaranteed)
Texas Leander 300,000 370,875 12,285,000 8,768,419 12,585,00 9,139,294
Independant 0
School Dist.
Unltd. Tax
7.50%
8/15/08, (PSF
Guaranteed)
Texas Lower 6,000,000 6,187,500 10,000,000 6,450,000 16,000,00 12,637,50
Colorado 0 0
River Auth.
Rev. Refdg.
5.25% 1/1/05
Texas Lower 6,000,000 6,172,500 6,000,000 6,172,500
Colorado
River Auth.
Rev. Rfdg.
(Jr. Lien-4th
Supplement)
5.25% 1/1/15
(Escrowed to
Maturity)
Texas Lower 3,000,000 1,751,250 3,000,000 1,751,250
Colorado
River Auth.
Rev. Priority
Rfdg. (Cap.
Appreciation)
0% 1/1/09
(MBIAInsured)
(Escrowed to
Maturity)
Texas Lower Neches 9,500,000 10,260,00 5,000,000 5,606,250 14,500,00 15,866,25
Valley Auth. 0 0 0
Ind. Dev.
Corp. Envir.
Rev. (Mobil
Oil Refining
Corp. Proj.)
6.35% 4/1/26
(AMT)
Texas Lower Neches 35,455,00 38,380,03 6,000,000 6,487,500 41,455,00 44,867,53
Valley Auth. 0 8 0 8
Ind. Dev.
Corp. Swr.
Facs. Rev.
(Mobil Oil
Refining
Corp.Proj.)
6.40% 3/1/30
(AMT)
Texas Midlothian 1,935,000 1,245,656 1,935,000 1,245,656
Indpt. School
Dist. Rfdg.
(Cap.
Appreciation)
0% 2/15/07
(PSF
Guaranteed)
Texas Midlothian 1,525,000 821,594 1,525,000 821,594
Indpt. School
Dist. Rfdg.
(Cap.
Appreciation)
0% 2/15/10
(PSF
Guaranteed)
Texas Port Arthur 755,000 823,894 755,000 823,894
Hsg. Fin.
Corp. Single
Family Mtg.
Rev. Rfdg.
8.70% 3/1/12
Texas Port Dev. 1,000,000 1,055,000 3,000,000 3,266,250 4,000,000 4,321,250
Corp. Ind.
Dev. Rev.
Rfdg.
(Cargill,
Inc. Proj.)
7.70% 3/1/07
Texas Round Rock 5,000,000 2,625,000 5,000,000 2,625,000
Indpt. School
Dist. Rfdg. &
School Bldg.
0% 8/15/10
(MBIA
Insured)
Texas Round Rock 2,000,000 1,745,000 2,000,000 1,745,000
Independent
School Dist.
Rfdg. 0%
2/15/01 (PSF
Guaranteed)
Texas Round Rock 1,300,000 1,503,125 1,300,000 1,503,125
Independent
School Dist.
Series A,
7.50% 8/1/03
(PSF
Guaranteed)
Texas Round Rock 1,025,000 1,145,438 1,025,000 1,145,438
Independent
School Dist.
6.50% 8/1/04
(PSF
Guaranteed)
Texas San Antonio 5,850,000 4,175,438 5,850,000 4,175,438
Elec. & Gas
Rev. Rfdg.
(Cap.
Appreciation)
Series A, 0%
2/1/05
(AMBACInsured
)
Texas San Antonio Elec. 4,200,000 3,512,250 4,200,000 3,512,250
& Gas Rev. Rfdg.
(Cap.
Appreciation)
Series 1991 B,
0% 2/1/05
(FGICInsured)
Texas San Antonio Elec. 4,000,000 4,795,000 4,000,000 4,795,000
& Gas Rev. Rfdg.
(Cap.
Appreciation)
Series B, 0%
2/1/07
(FGICInsured)
Texas San Antonio 4,340,000 2,647,400 4,340,000 2,647,400
Elec. & Gas
Rev. Rfdg.
(Cap.
Appreciation)
Series B, 0%
2/1/08
(FGICInsured)
Texas San Antonio 2,000,000 1,150,000 2,000,000 1,150,000
Elec. & Gas
Rev. Rfdg.
(Cap.
Appreciation)
Series B, 0%
2/1/09, (FGIC
Insured)
Texas San Antonio 300,000 336,375 300,000 336,375
Elec. & Gas
Rev. Rfdg.
Series 95,
6.375% 2/1/06
Texas San Antonio 6,500,000 6,678,750 6,500,000 6,678,750
Elec. & Gas
Rev. Rfdg.
5.25% 2/1/10
Texas San Antonio 585,000 598,894 585,000 598,894
Elec. & Gas
Rev. Series
B, 6% 2/1/14
Texas San Antonio 12,010,00 12,400,32 12,010,00 12,400,32
Elec. & Gas 0 5 0 5
Rev. 5.75%
2/1/11
Texas San Antonio 5,500,000 2,117,500 2,000,000 2,220,000 7,500,000 4,337,500
Wtr. Rev.
(Cap.
Appreciation)
0% 5/1/12
(AMBAC
Insured)
(Pre-Refunded
to5/1/00 @
42.652)
Texas Spring Branch 4,705,000 5,010,825 4,705,000 5,010,825
Independent
School Dist. Rev.
Rfdg. 6.50%
2/1/04 (PSF
Guaranteed)
Texas Spring Branch 5,725,000 4,100,531 5,725,000 4,100,531
Indpt. School
Dist. Rfdg.
0% 2/1/05
Texas Spring Branch 5,710,000 3,897,075 8,140,000 9,839,225 13,850,00 13,736,30
Independent 0 0
School Dist.
Rfdg. (Cap.
Appreciation)
0% 2/1/06
(PSFGuarantee
d)
Texas Spring 2,500,000 2,465,625 2,500,000 2,465,625
Independent
School Dist.
4.875%
8/15/10 (PSF
Guaranteed)
Texas Spring $3,000,00 $2,497,50 3,000,000 2,497,500
Independent 0 0
School Dist.
Rfdg. (Cap.
Appreciation)
0% 2/15/02
(PSF
Guaranteed)
Texas Texarkana 1,750,000 1,898,750 1,750,000 1,898,750
Health Facs.
Dev. Corp.
Hosp. Rev.
(Wadley
Reg'l. Med.
Ctr. Proj.)
7% 10/1/05
(MBIA
Insured)
Texas Texas A&M 3,850,000 4,100,250 3,850,000 4,100,250
Univ.
Permament
Univ. Fund
Rfdg. 5.50%
7/1/04
Texas Texas Muni. 1,000,000 733,750 5,000,000 5,550,000 6,000,000 6,283,750
Pwr. Agcy.
Rev. Rfdg.
(Cap.
Appreciation)
0% 9/1/04
(AMBAC
Insured)
Texas Texas Muni. 13,000,00 9,035,000 13,000,00 9,035,000
Pwr. Agcy. 0 0
Rev. Rfdg.
(Cap.
Appreciation)
0% 9/1/05
(AMBAC
Insured)
Texas Texas Gen. 2,500,000 2,740,625 2,500,000 2,740,625
Oblig. Rfdg.
(Veterans
Land) 7.40%
12/1/20
Texas Texas Gen. 3,000,000 3,026,250 3,000,000 3,026,250
Oblig. Series
B, 5.25%
10/1/13
Texas Texas Pub. 9,420,000 8,007,000 9,420,000 8,007,000
Fin. Auth.
Rfdg. (Cap.
Appreciation)
Series A, 0%
10/1/01
(AMBAC
Insured)
Texas Texas College 2,350,000 2,458,688 2,350,000 2,458,688
Student Loan
Gen. Oblig.
5.80% 8/1/05
(AMT)
Texas Texas Pub. 4,000,000 4,390,000 4,000,000 4,390,000
Fin. Auth.
Rfdg. Series
C, 6% 10/1/05
Texas Univ. of 1,170,000 1,278,225 1,170,000 1,278,225
Texas Univ.
Revs. Rfdg.
(Fing. Sys.)
Series A, 6%
8/15/04
Texas Univ. of 1,000,000 1,097,500 3,000,000 3,228,750 4,000,000 4,326,250
Texas Univ.
Revs. Rfdg.
(Fing. Sys.)
Series A, 6%
8/15/05
Texas Winters 500,000 600,000 4,900,000 3,595,375 5,400,000 4,195,375
Wtrwks. &
Swr. Sys.
Rev. Rfdg.
8.50% 8/1/17,
(Pre-Refunded
to 8/1/03 @
100)
Utah Intermountain 1,660,000 1,757,525 1,660,000 1,757,525
Pwr. Agcy.
Pwr. Supply
Sys. Rev.
Rfdg. Series
G, 0% 7/1/12
(Pre-Refunded
to1/1/03 @
101) stepped
coupon
Utah Intermountain 4,435,000 3,974,869 4,435,000 3,974,869
Pwr. Agcy.
Pwr. Supply
Sys. Rev.
Rfdg. (Cap.
Appreciation)
Series B, 0%
7/1/00 (MBIA
Insured)
Utah Intermountain 5,000,000 4,931,250 5,000,000 4,931,250
Pwr. Agcy. Pwr.
Supply Sys. Rev.
Rfdg. Spl. Oblig.
Sixth Series B,
6%7/1/16 (MBIA
Insured)
Utah Intermountain 6,200,000 5,983,000 3,000,000 3,138,750 9,200,000 9,121,750
Pwr. Agcy.
Pwr. Supply
Sys. Rev.
Rfdg. Series
D, 5% 7/1/21
(MBIA
Insured)
Utah Intermountain 3,100,000 3,561,125 3,100,000 3,561,125
Pwr. Agcy.
Pwr. Supply
Sys. Rev.
Rfdg. Series
A, 6.50%
7/1/08
(AMBACInsured
)
Utah Intermountain 5,000,000 5,350,000 6,150,000 6,649,687 11,150,00 11,999,68
Pwr. Agcy. 0 7
Pwr. Supply
Sys. Rev.
Rfdg. Series
A, 6% 7/1/16
(AMBAC
Insured)
Utah Intermountain 1,000,000 1,155,000 7,325,000 8,670,969 8,325,000 9,825,969
Pwr. Agcy.
Pwr. Supply
Sys. Rev.
Rfdg. Series
A, 6.50%
7/1/11,
(AMBAC
Insured)
Utah Intermountain 18,000,00 18,787,50 18,000,00 18,787,50
Pwr. Agcy. 0 0 0 0
Pwr. Supply
Sys. Rev.
Rfdg. Series
B, 5.75%
7/1/16
(MBIAInsured)
Utah Utah Hsg. 355,000 390,944 355,000 390,944
Fin. Agcy.
(Single
Family Mtg.)
Series G,
9.25% 7/1/19,
(FHA
Guaranteed)*
Vermont Vermont Ind. 2,350,000 2,564,438 4,230,000 4,795,763 6,580,000 7,360,201
Dev. Auth.
Ind. Dev.
Rev.
(Radisson
Hotel) Series
B-1, 7.75%
11/15/15
Vermont Vermont Muni. 3,000,000 3,232,500 3,000,000 3,232,500
Bond Bank
Series B,
7.20% 12/1/20
(Pre-Refunded
to 12/1/99 @
102)
Virginia Fairfax 3,700,000 3,945,125 3,700,000 3,945,125
County Econ.
Dev. Auth.
Resource
Recovery Rev.
(Ogden Martin
Sys. Proj.)
Series A,
7.75% 2/1/11
(AMT)
Virginia Lynchburg 3,000,000 3,124,920 3,000,000 3,124,920
Ind. Dev.
Auth. Hosp.
Facs. 1st.
Mtg. Rev.
Rfdg.
(Central
Health,
Inc.)8.125%
1/1/16
Virginia Peninsula 1,500,000 1,539,300 1,500,000 1,539,300
Ports Auth.
Hosp. Facs.
Rev. Rfdg.
(Whittaker
Mem. Proj.)
8.70% 8/1/23
(FHAGuarantee
d)
Virginia Richmond Gen. 1,725,000 1,834,969 1,725,000 1,834,969
Oblig. Rfdg.
Series B,
5.50% 1/15/04
(FGIC
Insured)
Virginia Richmond 750,000 757,755 750,000 757,755
Redev. & Hsg.
Auth. Mtg.
Rev.
(Multi-Family
Hsg.
Pinebrook
Proj.) 9.25%
10/1/20 (GNMA
Coll.)
Virginia Upper 8,000,000 8,010,000 8,000,000 8,010,000
Occoquan Swr.
Auth. Reg'l.
Swr. Rev.
Series A,
5.15% 7/1/20
(MBIA
Insured)
Virginia Virginia 3,100,000 3,072,875 3,100,000 3,072,875
Beach Dev.
Auth. Hosp.
Facs. Rev.
(Virginia
Beach Gen.
Hosp. Proj.)
5.125%2/15/18
(AMBAC
Insured)
Virginia Virginia 4,370,000 4,533,875 4,370,000 4,533,875
Commonwealth
Gen. Oblig.
5% 6/1/04
Virginia Virginia Hsg. 1,890,000 1,996,313 1,890,000 1,996,313
Dev. Auth.
Multi-Family
Hsg. Series
I, 5.95%
5/1/09 (AMT)
Virginia Virginia 180,000 189,614 180,000 189,614
Resources
Auth. Wtr. &
Swr. Sys.
Rev. Series
A, 7.70%
11/1/10
Washington Douglas 1,395,000 1,780,369 1,395,000 1,780,369
County Pub.
Util. Dist.
#1 Wells
Hydroelec.
Rev. Rfdg.
(Pacific Pwr.
& Lt. Co.)
Series A,
8.75% 9/1/18
Washington King County 2,000,000 2,135,000 4,255,000 4,643,269 6,255,000 6,778,269
Gen. Oblig.
Series D,
5.40% 12/1/06
Washington Port Seattle 4,010,000 4,155,363 4,010,000 4,155,363
Rev. Series
B, 5.50%
9/1/09 (FGIC
Insured)
(AMT)
Washington Port Seattle 4,230,000 4,383,338 5,500,000 6,091,250 9,730,000 10,474,58
Rev. Series 8
B, 5.60%
9/1/10 (FGIC
Insured)
(AMT)
Washington Snohomish 2,405,000 2,759,738 2,405,000 2,759,738
County School
Dist. #201,
6.75% 12/1/06
(AMBAC
Insured)
Washington Washington 2,655,000 3,079,800 2,655,000 3,079,800
Gen. Oblig.
(Motor
Vehicle Fuel
Tax) Series
B, 7% 9/1/05
Washington Washington 1,000,000 1,106,250 1,000,000 1,106,250
Gen Oblig.
Series C,
6.50% 7/1/03
Washington Washington 4,635,000 5,144,850 4,635,000 5,144,850
Motor Vehicle
Fuel Tax Gen.
Oblig. Series
B, 6.50%
9/1/03
Washington Washington 3,560,000 3,920,450 3,560,000 3,920,450
Gen. Oblig.
Series
1996-A, 6.75%
7/1/02
Washington Washington 2,000,000 2,177,500 2,000,000 2,177,500
Gen. Oblig.
Series R-96C,
6% 7/1/04
Washington Washington 500,000 590,000 500,000 590,000
State Pub.
Pwr. Supply
Sys. Nuclear
Proj. #1 Rev.
Series A, 7%
7/1/08
Washington Washington 16,080,00 11,075,10 16,080,00 11,075,10
Pub. Pwr. 0 0 0 0
Supply Sys.
Nuclear Proj.
#2 Rev. Rfdg.
Series C, 0%
7/1/05
Washington Washington 11,000,00 7,645,000 11,000,00 7,645,000
Pub. Pwr. 0 0
Supply Sys.
Nuclear Proj.
#2 Rev.
Series C, 0%
7/1/05, (MBIA
Insured)
Washington Washington 7,500,000 7,800,000 10,000,000 10,137,500 17,500,00 17,937,50
Pub. Pwr. 0 0
Supply Sys.
Nuclear Proj.
#2 Rev. 6.92%
7/1/10 (FGIC
Insured)(inve
rse floaters)
Washington Washington 33,950,00 34,416,77 33,950,00 34,416,77
Pub. Pwr. 0 1 0 1
Supply Sys.
Nuclear Proj.
#2 Rev. 5.40%
7/1/12
Washington Washington 3,565,000 3,859,113 3,565,000 3,859,113
Pub. Pwr.
Supply Sys.
Nuclear Proj.
#2 Rev.
Refdg. Series
A, 6% 7/1/05
(AMBAC
Insured)
Washington Washington 6,000,000 6,105,000 9,050,000 9,423,312 15,050,00 15,528,31
Pub. Pwr. 0 2
Supply Sys.
Nuclear Proj.
#2 Rev.
Refdg. Series
A, 5% 7/1/01
Washington Washington 1,000,000 1,092,500 5,000,000 3,300,000 6,000,000 4,392,500
Pub. Pwr.
Supply Sys.
Nuclear Proj.
#3 Rev. Rfdg.
Series B,
7.375% 7/1/04
Wyoming Natrona 4,500,000 4,848,750 4,500,000 4,848,750
County Hosp.
Rev. (Wyoming
Med. Ctr.
Proj.) 8.125%
9/15/10
Wyoming Wyoming Farm 3,995,000 2,926,338 3,995,000 2,926,338
Loan Board
Cap. Facs.
Rev. 0%
10/1/04
(Escrowed to
Maturity)
Wyoming Wyoming Farm 3,995,000 2,786,513 2,500,000 2,550,000 6,495,000 5,336,513
Loan Board
Cap. Facs.
Rev. 0%
10/1/05
(Escrowed to
Maturity)
Wyoming Wyoming Farm 3,695,000 2,461,794 12,890,000 14,952,400 16,585,00 17,414,19
Loan Board 0 4
Cap. Facs.
Rev. 0%
10/1/06
(Escrowed to
Maturity)
4,000,000 4,455,000 4,000,000 4,455,000
2,000,000 2,125,000 2,000,000 2,125,000
TOTAL 2,253,774 3,197,702
MUNICIPAL ,808 943,928,0 ,816
BONDS 08
MUNICIPAL
NOTES
Florida Florida Hsg. 6,200,000 6,200,000 6,200,000 6,200,000
Fin. Agcy.
Multi-Family
Hsg. Rev.
Rfdg.
(Brandon-Oxfo
rd) Series
90C,4.20%,
VRDN
Illinois Chicago Gen. 6,500,000 6,498,180 6,500,000 6,498,180
Oblig. Series
1997, 3.65%,
tender
2/5/98, LOC
Morgan
Guaranty
Trust Co.
Illinois Illinois Dev. 4,000,000 4,000,000 4,000,000 4,000,000
Fin. Auth.
Multi-Family
Hsg. Rev.
Rfdg. (Garden
Glen Apts.)
Series
93,4.10%,
VRDN
New York Erie County 760,000 760,000 0 0 760,000 760,000
Ind. Dev.
Auth. Ind.
Dev. Rev.
(The Holling
Press, Inc.)
Series 1989
F,4.10%, LOC
Marine
Midland Bank,
VRDN (AMT)
Texas Texas Gen. 21,500,00 21,643,62 - 21,500,00 21,643,62
Oblig. TRAN 0 0 0 0
Series A,
4.75% 8/31/98
TOTAL 0 39,101,80
MUNICIPAL 39,101,80 0
NOTES 0
CASH
EQUIVALENTS
Cash Municipal 27,642,37 27,642,37 0 27,642,37 27,642,37
Equivalents Central Cash 2 2 2 2
Fund 3.8690%
12/5/97
TOTAL $ $ $
INVESTMENTS 2,320,518 943,928,0 3,264,446
IN SECURITIES ,980 08 ,988
- - 100%
FUTURES UNDERLYIN UNREALIZE UNDERLYIN UNREALIZE
CONTRACTS G FACE D G FACE D
EXPIRATION AMOUNT AT GAIN/ AMOUNT AT GAIN/
DATE VALUE (LOSS) VALUE (LOSS)
PURCHASED 127 Municipal 209,573 15,739,29 209,573
Bond Future 15,739,29 2
Contracts 2
Dec. 97
TOTAL COST OF $ $ $
INVESTMENT 2,222,505 880,266,7 3,102,772
SECURITIES ,358 13 ,071
</TABLE>
Spartan Municipal Income Fund
Fidelity Advisor Municipal Bond Fund
Notes to Pro Forma Combining Financial Statements
(Unaudited)
The accompanying unaudited Pro Forma Combining Schedule of
Investments and Statement of Assets and Liabilities as of November
30, 1997 and the unaudited Pro Forma Combining Statement of Operations
for the year ended November 30, 1997 are intended to present the
financial condition and related results of operations of Spartan
Municipal Income Fund as if the reorganization with Fidelity Advisor
Municipal Bond Fund, had been consummated at December 1, 1996. Had
the pro forma adjustments not included the effect of the expense
limitation, Pro Forma Combined Expense reductions would have been
$12,159, resulting in Pro Forma Combined Net Interest Income and Pro
Forma Combined Net Increase in Net Assets resulting from operations of
$138,817,940 and $188,333,168, respectively.
The pro forma adjustments to these pro forma financial statements are
comprised of:
(a) Reflects the exchange of the Fidelity Advisor Municipal Bond
Fund's shares for shares of Spartan Municipal Income Fund as of
November 30, 1997.
(b) Decrease in fees reflects contractual rates charged against
combined average net assets.
(c) Decrease in fees reflects elimination of duplicate services or
charges.
(d) Increase in fees reflects net increase in costs incurred as a
result of the reorganization offset with savings in duplicate charges.
(e) Reflects reduction in expenses due to FMR's agreement to
voluntarily limit the combined fund's expenses to 0.53% of average net
assets.
(f) Decrease reflects elimination of non applicable expense type.
The unaudited pro forma combining statements should be read in
conjunction with the separate annual audited financial statements as
of December 31, 1997 for Fidelity Advisor Municipal Bond Fund and
November 30, 1997 for Spartan Municipal Income Fund, which are
incorporated by reference in the Statement of Additional Information
to this Proxy Statement and Prospectus. The unaudited pro forma
combining financial statements do not include the effect of the merger
of Spartan Aggressive Municipal Income Fund and Spartan Insured
Municipal Income Fund with Spartan Municipal Income Fund which is
pending shareholder approval.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General
Partner, as the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash Portfolios
Fidelity Advisor Series III Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series VII Fidelity Money Market Trust
Fidelity Advisor Series VIII Fidelity Mt. Vernon Street Trust
Fidelity Beacon Street Trust Fidelity Municipal Trust
Fidelity Boston Street Trust Fidelity Municipal Trust II
Fidelity California Municipal Trust Fidelity New York Municipal Trust
Fidelity California Municipal Trust II Fidelity New York Municipal Trust II
Fidelity Capital Trust Fidelity Phillips Street Trust
Fidelity Charles Street Trust Fidelity Puritan Trust
Fidelity Commonwealth Trust Fidelity Revere Street Trust
Fidelity Concord Street Trust Fidelity School Street Trust
Fidelity Congress Street Fund Fidelity Securities Fund
Fidelity Contrafund Fidelity Select Portfolios
Fidelity Corporate Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Court Street Trust Fidelity Summer Street Trust
Fidelity Court Street Trust II Fidelity Trend Fund
Fidelity Covington Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Daily Money Fund Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Union Street Trust II
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Newbury Street Trust
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund Variable Insurance Products Fund III
Fidelity Hastings Street Trust
</TABLE>
in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such
things in my name and on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d_ July 17, 1997
Edward C. Johnson 3d
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the
case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead_______________ /s/William O. McCoy______________
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________
Phyllis Burke Davis Marvin L. Mann
/s/E. Bradley Jones________________ /s/Thomas R. Williams ____________
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk __________________
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned Director, Trustee, or General Partner, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in my name
and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after March 1,
1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997
Robert M. Gates
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