SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
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PUTNAM HIGH YIELD MUNICIPAL TRUST
PUTNAM INVESTMENT GRADE MUNICIPAL TRUST
PUTNAM MANAGED MUNICIPAL INCOME TRUST
PUTNAM MUNICIPAL OPPORTUNITIES TRUST
(Name of Registrant as Specified In Its Charter)
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if other than Registrant)
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<PAGE>
Q & A for: Putnam High Yield Municipal Trust/Putnam Investment
Grade Municipal Trust/Putnam Managed Municipal Income
Trust/Putnam Municipal Opportunities Trust
On or about July 20, 1998 a proxy statement was sent to
shareholders of [Putnam High Yield Municipal Trust/Putnam
Investment Grade Municipal Trust/Putnam Managed Municipal Income
Trust/Putnam Municipal Opportunities Trust] asking for their vote
on the following matters: (1) for fixing the number of and
electing the fund's Trustees; (2) ratifying the selection of the
fund's independent auditors; (3) approving an amendment to the
fund's fundamental investment restriction with respect to making
loans.
Listed below are questions shareholders are likely to ask and
recommended responses.
Proposal 1
Election of Trustees
What is being proposed?
The Nominating Committee of the Trustees, which consists solely
of Trustees who are independent with no financial interest in
Putnam Management, recommends that the number of Trustees be
fixed at sixteen and that shareholders vote for the election of
the nominees for Trustees.
What are the Trustees' responsibilities?
The Trustees are responsible for the general oversight of your
fund's business and for assuring that your fund is managed in the
best interests of the shareholders.
Proposal 2
Election of Auditors
Who has selected the independent auditors of the fund?
The Trustees have selected PricewaterhouseCoopers LLP as the
independent auditors of your fund and shareholders are being
asked to ratify the selection for the current year.
What were the reasons for the selection of PricewaterhouseCoopers
LLP as the independent auditors of the fund?
The Trustees selected PricewaterhouseCoopers LLP primarily based
on its expertise as auditors of investment companies, the quality
of its audit services and the competitiveness of its fees.
<PAGE>
Proposal 3
Amending the fund's fundamental investment
restriction with respect to making loans
What are the Trustees proposing?
The Trustees are recommending that the fund's fundamental
investment restriction with respect to making loans be revised to
reflect the standard restriction expected to be used by other
Putnam funds and to clarify that the fund is permitted to
participate in a proposed interfund lending program as described
in Proposal 3 in the Proxy Statement.
If the proposal is approved, the fund would be able to
participate in an interfund lending program and make loans to
other Putnam funds. The fund would only make loans under the
program if it could receive an interest rate higher than those
available for repurchase agreements. There is a risk that the
fund could experience a delay in obtaining prompt repayment of a
loan and, unlike repurchase agreements, the fund would not
necessarily have received collateral for its loan. A delay in
obtaining prompt payment could cause the fund to miss an
investment opportunity or to incur costs to borrow money to
replace the delayed payment.
Since the Putnam funds may be considered affiliated parties,
interfund lending may be prohibited by the Investment Company Act
of 1940 and would be implemented only upon receipt of an
exemptive order of the Securities and Exchange Commission.
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