[front cover]
- ----------------------------------------------------------------
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST Semiannual report
- ----------------------------------------------------------------
June 30, 1999
<PAGE>
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COLONIAL INVESTMENT GRADE MUNICIPAL TRUST HIGHLIGHTS
JANUARY 1, 1999 -- June 30, 1999
Investment Objective: Seeks as high a level of after-tax total return as is
consistent with prudent risk, by pursuing current income exempt from ordinary
federal income tax and opportunities for long-term appreciation from a portfolio
primarily invested in investment-grade municipal bonds.
Portfolio Manager Commentary: "Rising interest rates and declining prices
challenged bond market investors over the past six months. We adjusted our
investment strategy in response to numerous reports illustrating the economy's
strength. Since we had concerns about inflation and potentially higher interest
rates -- both negative conditions for fixed-income investments -- we structured
the Trust to be less sensitive to interest rate changes in either direction."
-- William Loring
Colonial Investment Grade Municipal Trust Performance
<TABLE>
<S> <C> <C> <C>
Six-month distributions declared per share(1) $0.289
- --------------------------------------------------------------------------------
NAV Market Price
Six-month total return, assuming
reinvestment of all distributions (1.67)% (10.56)%
- --------------------------------------------------------------------------------
Price per share on 6/30/99 $11.01 $9.75
</TABLE>
<TABLE>
<CAPTION>
Top Five Sectors(2) Quality Breakdown(2)
(as of 6/30/99) (as of 6/30/99)
................................................................................
<S> <C> <C> <C>
Local General Obligation 14.6% [pie chart]
Hospital 10.3%
State Appropriated 9.1% AAA: 53.4%
Refunded 7.6% AA: 9.7%
Education 6.3% A: 9.0%
BBB: 11.9%
Short-term obligations: 0.2%
Non-rated: 15.8%
[end pie chart
</TABLE>
(1) A portion of the Fund's income may be subject to the alternative minimum
tax. The Fund may at times purchase tax-exempt securities at a discount.
Some or all of this discount may be included in the Fund's ordinary income,
and is taxable when distributed.
(2) Quality and sector breakdowns are calculated as a percentage of total
investments, including short-term obligations. Ratings shown in the quality
breakdowns represent the highest rating assigned to a particular bond by
one of the following respected rating agencies: Standard & Poor's, Moody's
or Fitch. Because the Trust is actively managed, there can be no guarantee
the Trust will continue to maintain these quality and sector breakdowns in
the future.
Industry sectors in the following financial statements are based upon the
standard industrial classifications (SIC) as published by the U.S. Office
of Management and Budget. The sector classifications used on this page are
based upon the Advisor's defined criteria as used in the investment
process.
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2
<PAGE>
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PRESIDENT'S MESSAGE
Dear Shareholder:
[photo: Stephen E. Gibson]
During the six months ended June 30, 1999, the bond market experienced
considerable volatility. At the beginning of the period, continued fears of a
global recession resulted in a flight to quality that benefited bond
performance. Treasury securities, considered the safest bond investments, were
the top performers for the bond market, but municipal bonds also posted solid
returns. By the end of May 1999, several events reversed the trend. Global
economies stabilized, and strong U.S. economic growth in the last quarter of
1998 and the first quarter of 1999 renewed investors' inflation fears. Bond
prices declined, driving interest rates up across the board. Fortunately,
municipal bonds were not hit as hard as Treasurys on the way down. At the close
of the period, continued U.S. economic growth and inflation concerns caused the
Federal Reserve Board to raise short-term interest rates by a quarter of a point
to 5.00%.
This difficult environment was reflected in the Trust's performance. For the six
months ended June 30, 1999, the Trust generated a total return of negative 1.67%
(based on NAV), slightly underperforming its Lipper average of negative 1.13%.
While past performance cannot predict future results, it is important to keep a
long-term perspective and remember that the Trust has provided above-average
returns over a longer time frame, such as the one-, three- and five-year
periods.(1)
As always, we thank you for choosing Colonial Investment Grade Municipal Trust
and for giving us the opportunity to serve your investment needs.
Respectfully,
/s/ Stephen E. Gibson
- ---------------------
Stephen E. Gibson
President
August 11, 1999
(1) Source: Lipper, Inc., a widely respected data provider in the industry,
calculates an average total return for mutual funds with similar investment
objectives as the Trust. The total return calculated for the Lipper General
& Insured Unleveraged Municipal Fund Category was negative 1.13% for the
six months ended June 30, 1999. The Trust's Class A shares were ranked in
the third quartile for the six-month period (16 out of 21), in the second
quartile for the one year (6 out of 21), in the first quartile for the
three years (1 out of 21), in the first quartile for the five years (4 out
of 21) and in the third quartile for the ten years (5 out of 8).
Because economic and market conditions change frequently, there can be no
assurance that the trends discussed above or on the following pages will
continue or come to pass.
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3
<PAGE>
INVESTMENT PORTFOLIO
JUNE 30, 1999 (UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
MUNICIPAL BONDS - 98.8% PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION - 7.5%
Education - 6.3%
CA State Educational Facilities Authority,
Santa Clara University,
Series 1996,
5.000% 9/1/2015 $ 800 $ 838
IL Chicago,
State University Auxiliary Facilities,
Series 1998,
5.500% 12/1/2023 1,085 1,103
MA State Industrial Finance Agency,
Tabor Academy,
Series 1998,
5.400% 12/1/2028 1,000 947
MN University of Minnesota,
Series 1996 A:
5.500% 7/1/2021 2,000 2,054
5.750% 7/1/2014 500 529
NY St. Lawrence County Industrial Development
Agency, St. Lawrence University,
Series 1998 A,
5.500% 7/1/2013 1,465 1,493
RI State Health & Educational Buildings Corp.,
Roger Williams University,
Series 1998,
5.125% 11/15/2012 1,000 985
-------
7,949
-------
Student Loan - 1.2%
NE Nebhelp, Inc.,
Series 1993 A-6,
6.450% 6/1/2018 1,500 1,574
-------
................................................................................
HEALTHCARE - 16.5%
Hospitals - 10.2%
AL Alabama Special Care Facilities Authority,
Montgomery Healthcare,
Series 1989,
11.000% 10/1/2019 935 940
FL Orange County Health Facilities Authority,
Orlando Regional Healthcare System,
Series 1996 C,
6.250% 10/1/2013 (a) 2,460 2,715
</TABLE>
4
<PAGE>
Investment Portfolio/June 30, 1999
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<TABLE>
<S> <C> <C> <C> <C>
IL Health Facility Authority,
Series 1992 B, IFRN (variable rate),
10.226% 5/1/2021 $ 700 $ 789
IL Southwestern Development Authority,
Anderson Hospital,
Series 1999,
5.375% 8/15/2015 380 360
IL State Development Finance Authority,
Adventist Health System,
Series 1999,
5.500% 11/15/2020 1,000 953
LA Jefferson Parish Hospital,
Series 1998,
5.250% 7/1/2012 1,000 992
MA Health & Education Facilities Authority,
South Shore Hospital,
Series F,
5.750% 7/1/2029 (b) 1,000 994
MN Rochester,
Mayo Foundation,
Series 1998 A,
5.500% 11/15/2027 1,000 1,000
NH Higher Educational & Health Facilities
Authority, Catholic Medical Center, Series 1989,
6.000% 7/1/2017 2,500 2,502
TN Metropolitan Government,
Nashville & Davidson Counties,
Meharry Medical College, Series 1996,
6.000% 12/1/2016 1,575 1,705
-------
12,950
-------
Intermediate Care Facilities - 1.5%
IL Development Finance Authority Revenue,
Hoosier Care Project,
Series A,
7.125% 6/1/2034 (b) 500 500
IN Wabash First Mortgage,
Hoosier Care, Inc.,
Series 1989 A,
9.750% 8/1/2019 1,420 1,465
-------
1,965
-------
Nursing Homes - 4.8%
CO Health Care Facilities Authority,
Pioneer Health Care,
Series 1989,
10.500% 5/1/2019 1,710 1,748
</TABLE>
5
<PAGE>
Investment Portfolio/June 30, 1999
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<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HEALTHCARE - CONT.
Nursing Homes - Cont.
DE State Economic Development Authority,
Churchman Village Project,
Series A,
10.000% 3/1/2021 $ 965 $ 1,186
FL Escambia County,
Beverly Enterprises-Florida, Inc.,
Series 1985,
9.800% 6/1/2011 175 185
PA Chester County Industrial Development,
Pennsylvania Nursing Home, Inc.,
Series 1989,
10.125% 5/1/2019 (c) 1,204 987
PA Delaware County Authority,
Main Line and Haverford Nursing,
Series 1992,
9.000% 8/1/2022 590 666
WI State Health & Educational Facilities Authority,
Metro Health Foundation, Inc., Series 1993,
10.000% 11/1/2022 (c) 1,300 1,300
-------
6,072
-------
................................................................................
HOUSING - 4.7%
Assisted Living/Senior - 0.4%
TX Bell County Health Facilities Development
Corp., Care Institute, Inc.,
9.000% 11/1/2024 500 563
-------
Multi-Family - 2.5%
MN White Bear Lake,
Birch Lake Townhome Project:
Series 1989 A,
10.250% 7/15/2019 775 778
Series 1989 B,
(d) 7/15/2019 (e) 709 213
Resolution Trust Corp.,
Pass Through Certificates,
Series 1993 A,
9.250% 12/1/2016 (f) 2,124 2,164
-------
3,155
-------
Single Family - 1.8%
IN State Housing Finance Authority,
Single Family Mortgage-GNMA,
Series 1990 D,
7.800% 1/1/2022 90 93
</TABLE>
6
<PAGE>
Investment Portfolio/June 30, 1999
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<TABLE>
<S> <C> <C> <C> <C>
LA Louisiana Housing Finance Agency,
Residual Lien Mortgage,
Series 1992,
7.375% 9/1/2013 $ 415 $ 436
MA State Housing Finance Agency,
Series 1988 B,
8.100% 8/1/2023 110 112
NE State Investment Finance Authority,
7.550% 3/15/2022 100 103
OH State Housing Finance Agency,
Series B-4, IFRN (variable rate),
10.181% 3/31/2031 1,365 1,491
-------
2,235
-------
................................................................................
INDUSTRIAL - 1.9%
Manufacturing - 1.5%
MN Brooklyn Park,
TL Systems Corp.,
Series 1991,
10.000% 9/1/2016 905 1,072
MN Buffalo,
Von Ruden Manufacturing, Inc.,
Series 1989,
10.500% 9/1/2014 520 539
MO State Development Finance Board,
Proctor & Gamble Co.,
Series 1999,
5.200% 3/15/2029 250 238
-------
1,849
-------
Metals & Mining - 0.4%
VA Peninsula Ports Authority,
Ziegler Coal Project,
Series 1997,
6.900% 5/2/2022 500 498
-------
................................................................................
OTHER - 7.5%
Refunded/Escrowed (g)
CA California State,
Series 1995,
5.750% 3/1/2019 1,930 2,073
CA San Joaquin Hills Transportation
Corridor Agency, Series 1993,
(d) 1/1/2023 5,250 1,434
CO Denver City and County Airport,
Series B,
7.250% 11/15/2023 205 227
</TABLE>
7
<PAGE>
Investment Portfolio/June 30, 1999
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<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OTHER - CONT.
Refunded/Escrowed (g) - Cont.
DC Hospital Revenue,
Washington Hospital Center Corp.,
Series 1990 A,
8.750% 1/1/2015 $ 615 $ 668
DE State Economic Development Authority,
Riverside Hospital,
Series 1992 A,
9.500% 1/1/2022 225 274
FL Clearwater Housing Authority,
Hampton Apartments,
Series 1994,
8.250% 5/1/2024 700 826
MI Wayne County Building Authority,
Series 1992 A,
8.000% 3/1/2017 250 277
MN Mille Lacs Capital Improvement Authority,
Mille Lacs Band of Chippewa,
Series 1992 A,
9.250% 11/1/2012 245 288
NC Lincoln County Hospital Revenue,
Lincoln County Hospital Project,
9.000% 5/1/2007 145 167
TN Metropolitan Government,
Nashville & Davidson Counties,
6.150% 5/15/2025 1,000 1,069
TN Shelby County, Health, Education,
& Housing Facilities Board,
Open Arms Development Center:
Series 1992 A,
9.750% 8/1/2019 455 613
Series 1992 C,
9.750% 8/1/2019 455 613
TX Bexar Metropolitan Water District,
5.000% 5/1/2019 1,000 981
-------
9,510
-------
................................................................................
OTHER REVENUE - 0.3%
Hotel
MN Minneapolis,
Holiday Inn Metrodome Project,
6.000% 12/1/2001 350 352
-------
</TABLE>
8
<PAGE>
Investment Portfolio/June 30, 1999
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<TABLE>
<S> <C> <C> <C> <C>
RESOURCE RECOVERY - 2.0%
Disposal - 1.0%
IL Development Finance Authority,
Waste Management, Inc.,
Series 1997,
5.050% 1/1/2010 $ 500 $ 488
MA State Industrial Finance Agency,
Peabody Monofill Associates, Inc.,
Series 1995,
9.000% 9/1/2005 220 239
MI State Strategic Fund,
United Waste Systems, Inc.,
Series 1995,
5.200% 4/1/2010 500 495
-------
1,222
-------
Resource Recovery - 1.0%
MA State Industrial Finance Agency,
Ogden Haverhill Project,
Series 1998 A,
5.450% 12/1/2012 1,250 1,219
-------
................................................................................
TAX-BACKED - 33.0%
Local Appropriated - 1.2%
MN Hibbing Economic Development Authority,
6.400% 2/1/2012 335 344
TX Houston Independent School District,
Public Facilities Corp.,
Series 1998 A,
(d) 9/15/2013 2,500 1,152
-------
1,496
-------
Local General Obligations - 14.5%
AK Anchorage,
Series 1999,
5.125% 12/1/2013 1,000 984
CO El Paso County School District No. 11,
Series 1996,
7.125% 12/1/2019 1,870 2,274
CO Highlands Ranch Metropolitan District,
Series 1996,
6.500% 6/15/2011 1,375 1,546
IL Chicago:
Series 1995 A-2,
6.250% 1/1/2014 1,480 1,635
Series 1999,
5.500% 1/1/2023 1,000 1,016
</TABLE>
9
<PAGE>
Investment Portfolio/June 30, 1999
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<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX-BACKED - CONT.
Local General Obligations - Cont.
IL St Clair County,
(d) 10/1/2016 $2,000 $ 758
IL St. Clair County Public Building Commission,
(d) 12/1/2013 2,000 919
MI St. Johns Public School,
Series 1998,
5.100% 5/1/2025 1,000 960
MN Minneapolis St. Paul Airport,
5.250% 1/1/2013 1,000 1,001
NY New York City,
Series 1997 A,
7.000% 8/1/2007 2,000 2,252
NY Yonkers,
Series 1999 A,
4.500% 12/1/2017 1,000 878
OH Olmsted Falls City School District,
Tax Anticipation Notes:
5.500% 12/1/2000 340 348
5.500% 12/1/2001 360 360
5.500% 12/1/2002 380 380
PA Philadelphia School District,
Series B,
5.500% 9/1/2018 2,000 2,006
TX La Joya Independent School District,
Series 1998,
5.500% 2/15/2012 1,000 1,020
-------
18,337
-------
Special Non-Property Tax - 5.4%
FL Tampa Sports Authority,
Tampa Bay Arena Project,
Series 1995,
5.750% 10/1/2025 1,000 1,059
NM Dona Ana County,
Series 1998,
5.500% 6/1/2015 1,000 1,030
NY Metropolitan Transportation Authority,
Series 1998 A,
4.500% 4/1/2018 1,000 879
NY State Local Government Assistance Corp.,
Series 1993 E,
5.000% 4/1/2021 3,000 2,844
</TABLE>
10
<PAGE>
Investment Portfolio/June 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
WV State Building Commission,
Series 1997 A,
5.250% 7/1/2009 $1,000 $ 1,017
-------
6,829
-------
Special Property Tax - 1.3%
CA Capistrano Unified School District,
Ladera Community Facilities District No. 98-2,
Series 1999,
5.750% 9/1/2029 345 333
CA Contra Costa County Public Financing
Authority, Series 1992 A,
7.100% 8/1/2022 1,000 1,086
FL Lexington Oaks Community Development
District, Series 1998 B,
5.500% 5/1/2005 240 236
-------
1,655
-------
State Appropriated - 9.0%
IN State Office Building Commission,
Women's Prison,
Series B,
6.250% 7/1/2016 (a) 2,820 3,128
NY State Dormitory Authority,
City University of New York,
Series 1993 A,
5.750% 7/1/2018 5,000 5,176
NY State Dormitory Authority,
Mental Health Services,
Series 1998 C,
5.000% 2/15/2011 1,485 1,445
NY State Medical Care Facilities Finance Agency,
Mental Health Services Facilities Improvement,
Series 1991 A,
7.500% 2/15/2021 100 107
NY State Urban Development Corp.,
5.600% 4/1/2015 1,000 1,024
WV State Building Commission,
Series 1998 A,
5.375% 7/1/2018 500 500
-------
11,380
-------
State General Obligations - 1.6%
CA State,
Series 1995,
5.750% 3/1/2019 70 73
</TABLE>
11
<PAGE>
Investment Portfolio/June 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX-BACKED - CONT.
State General Obligations - Cont.
PR Commonwealth of Puerto Rico
Aqueduct & Sewer Authority:
6.250% 7/1/2012 $1,000 $ 1,116
6.250% 7/1/2013 750 839
-------
2,028
-------
................................................................................
TRANSPORTATION - 9.6%
Air Transportation - 1.7%
IN Indianapolis Airport Authority,
Federal Express Corp.,
Series 1994,
7.100% 1/15/2017 1,000 1,099
NY Port Authority of New York & New Jersey,
JFK International Air Terminal,
Series 6,
6.250% 12/1/2008 (a) 1,000 1,090
-------
2,189
-------
Airport - 0.7%
CO Denver City and County Airport,
Series B,
7.250% 11/15/2023 795 863
-------
Toll Facilities - 5.5%
CA Foothill/Eastern Transportation Corridor
Agency, Series 1995 A,
5.000% 1/1/2035 1,000 905
CA San Joaquin Hills Transportation Corridor
Agency, Series A,
(d) 1/15/2015 2,000 866
CO State Public Highway Authority,
E-470, Series B,
(d) 9/1/2011 2,000 1,056
IL Chicago,
Skyway Bridge,
Series 1996,
5.375% 1/1/2016 1,750 1,738
MA State Turnpike Authority,
Series C,
(d) 1/1/2018 (a) 3,000 1,093
NH State Turnpike Systems,
Series 1991 C, IFRN (variable rate),
10.083% 11/1/2017 1,000 1,262
-------
6,920
-------
</TABLE>
12
<PAGE>
Investment Portfolio/June 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Transportation - 1.7%
CA San Mateo Transportation Authority,
4.500% 6/1/2018 $1,000 $ 892
IL Regional Transportation Authority,
Series C,
7.750% 6/1/2020 1,000 1,298
-------
2,190
-------
................................................................................
UTILITY - 15.8%
Investor Owned - 3.1%
IN Petersburg Pollution Control,
Indianapolis Power & Light Co.,
Series 1993 B,
5.400% 8/1/2017 3,000 3,007
MS State Business Finance Corp.,
Systems Energy Resources Project,
Series 1998,
5.875% 4/1/2022 1,000 972
-------
3,979
-------
Joint Power Authority - 4.4%
IN Indianapolis,
Citizens Gas & Coke Utility,
Series 1998 A,
5.250% 8/15/2011 2,000 2,008
IN State Municipal Power Agency,
Series B,
6.000% 1/1/2012 (a) 2,000 2,151
NC State Municipal Power Agency,
Catawba Electric No. 1,
Series 1998 A,
5.500% 1/1/2015 640 660
NE American Public Energy Agency,
Public Gas Agency-Western Project,
Series 1999 A,
5.250% 6/1/2011 750 752
-------
5,571
-------
Municipal Electric - 3.4%
CA Sacramento Municipal Utilities District,
Series L,
5.125% 7/1/2022 1,850 1,783
NC University of North Carolina at Chapel Hill,
(d) 8/1/2014 1,000 448
NE Public Power District,
Series 1998 A,
5.250% 1/1/2011 1,000 1,008
</TABLE>
13
<PAGE>
Investment Portfolio/June 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS - CONT. PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTILITY - CONT.
Municipal Electric - Cont.
TN Metropolitan Government,
Nashville & Davidson Counties,
Series 1996 A,
(d) 5/15/2009 $1,825 $ 1,105
-------
4,344
-------
Water & Sewer - 4.9%
CT State Clean Water Fund,
Series 1999,
5.125% 9/1/2014 1,000 999
MA State Water Resources Authority,
Series 1998 B,
4.500% 8/1/2022 3,000 2,586
MS Five Lakes Utility District,
8.250% 7/15/2024 140 112
PA Erie Sewer Authority,
5.625% 6/1/2017 1,500 1,587
TX Nueces River Authority,
Corpus Christi Lake Texana Project,
5.250% 7/15/2017 1,000 985
-------
6,269
-------
TOTAL MUNICIPAL BONDS (cost of $121,749) 125,163
-------
<CAPTION>
OPTIONS - 0.0% CONTRACTS
- --------------------------------------------------------------------------------
<S> <C> <C>
September 1999 Treasury Bond Put,
Strike price 112, Expiration 08/20/99 19,200 66
(cost of $201)
September 1999 Treasury Bond Call,
Strike price 124, expiration 08/20/99 3,500 1
(cost of $49) -------
TOTAL OPTIONS (cost of $250) 67
-------
TOTAL INVESTMENTS (cost of $121,999)(h) 125,230
-------
<CAPTION>
SHORT-TERM OBLIGATIONS - 0.2% PAR
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
VARIABLE RATE DEMAND NOTES (i)
IN Purdue University,
Series 1998,
3.500% 7/1/2019 200 200
-------
</TABLE>
14
<PAGE>
Investment Portfolio/June 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
OTHER ASSETS & LIABILITIES, NET - 1.0% $ 1,252
- --------------------------------------------------------------------------------
NET ASSETS - 100.0% $126,682
========
</TABLE>
NOTES TO INVESTMENT PORTFOLIO:
- --------------------------------------------------------------------------------
(a) These securities, or a portion thereof, with a total market value of
$7,808, are being used to collateralize the delayed delivery purchases
indicated in note (b) below and open futures contracts.
(b) These securities have been purchased on a delayed delivery basis for
settlement at a future date beyond the customary settlement date.
(c) This issuer is in default of certain debt covenants. Income is not being
accrued.
(d) Zero coupon bond.
(e) Accrued interest accumulates in the value of the security and is payable at
redemption. The value of this security represents fair value as determined
under procedures approved by the Trustees.
(f) This security is exempt from registration under Rule 144A of the Securities
Act of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30, 1999,
the value of this security amounted to $2,164 or 1.7% of net assets.
(g) The Trust has been informed that each issuer has placed direct obligations
of the U.S. Government in an irrevocable trust, solely for the payment of
the principal and interest.
(h) Cost for federal income tax purposes is the same.
(i) Variable rate demand notes are considered short-term obligations. Interest
rates change periodically on specified dates. These securities are payable
on demand and are secured by either letters of credit or other credit
support agreements from banks. The rates listed are as of June 30, 1999.
Long futures contracts open at June 30, 1999:
<TABLE>
<CAPTION>
Par value Unrealized
covered by Expiration appreciation
Type contracts month at 06/30/99
- --------------------------------------------------------------
<S> <C> <C> <C>
Treasury Bond $ 4,500 September $ 94
</TABLE>
<TABLE>
<CAPTION>
Acronym Name
------- ----
<S> <C>
IFRN Inverse Floating Rate Note
</TABLE>
See notes to financial statements.
15
<PAGE>
STATEMENT OF ASSETS & LIABILITIES
JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
(in thousands except for per share amount)
<S> <C> <C>
ASSETS
Investments at value (cost $121,999) $125,230
Short-term obligations 200
--------
125,430
Receivable for:
Investments sold $ 2,369
Interest 2,122
Other 22 4,513
------- --------
Total Assets 129,943
LIABILITIES
Payable for:
Investments purchased 2,719
Accrued:
Deferred Trustees fees 4
Other 538
-------
Total Liabilities 3,261
--------
NET ASSETS at value for 11,509
shares of beneficial interest outstanding $126,682
========
Net asset value per share $ 11.01
========
COMPOSITION OF NET ASSETS
Capital paid in $127,930
Overdistributed net investment income (78)
Accumulated net realized loss (4,495)
Net unrealized appreciation on:
Investments 3,231
Open futures contracts 94
--------
$126,682
========
</TABLE>
See notes to financial statements.
16
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
(in thousands)
<S> <C> <C>
INVESTMENT INCOME
Interest $ 3,808
EXPENSES
Management fee $ 426
Transfer agent 30
Bookkeeping fee 18
Trustees fee 11
Custodian fee 1
Audit fee 18
Legal fee 3
Reports to shareholders 5
Other 48 560
------- --------
Net Investment Income 3,248
--------
NET REALIZED & UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS
Net realized gain on:
Investments 931
Closed futures contracts 378
-------
Net Realized Gain 1,309
Net change in unrealized appreciation
(depreciation) during the period on:
Investments (6,905)
Open futures contracts 114
-------
Net Change in Unrealized Depreciation (6,791)
--------
Net Loss (5,482)
--------
Decrease in Net Assets from Operations $ (2,234)
========
</TABLE>
See notes to financial statements.
17
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
(Unaudited)
Six months
ended Year ended
(in thousands) June 30 December 31
=========== ===========
INCREASE (DECREASE) IN NET ASSETS 1999 1998
Operations:
<S> <C> <C>
Net investment income $ 3,248 $ 6,877
Net realized gain 1,309 2,131
Net unrealized depreciation (6,791) (1,260)
--------- ---------
Net Increase (Decrease) from Operations (2,234) 7,748
Distributions:
From net investment income (3,326) (6,984)
In excess of net investment income --- (25)
--------- ---------
Total Increase (Decrease) (5,560) 739
NET ASSETS
Beginning of period 132,242 131,503
--------- ---------
End of period (net of overdistributed
net investment income of $78 and
none, respectively) $ 126,682 $ 132,242
========= =========
NUMBER OF TRUST SHARES
Outstanding at end of period 11,509 11,509
========= =========
</TABLE>
See notes to financial statements.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
................................................................................
In the opinion of management of Colonial Investment Grade Municipal Trust (the
Trust), the accompanying financial statements contain all normal and recurring
adjustments necessary for the fair presentation of the financial position of the
Trust at June 30, 1999, and the results of its operations, the changes in its
net assets and the financial highlights for the six months then ended.
NOTE 2. ACCOUNTING POLICIES
................................................................................
Organization: The Trust is a Massachusetts business trust, registered under the
Investment Company Act of 1940, as amended, as a diversified, closed-end,
management investment company. The Trust's investment objective is to seek as
high a level of after-tax total return as is consistent with prudent risk, by
pursuing current income exempt from ordinary federal income tax and
opportunities for long-term appreciation from a portfolio primarily invested in
investment grade municipal bonds. The Trust authorized an unlimited number of
shares.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies that are consistently followed by the Trust in
the preparation of its financial statements.
Security valuation and transactions: Debt securities generally are valued by a
pricing service based upon market transactions for normal, institutional-size
trading units of similar securities. When management deems it appropriate, an
over-the-counter or exchange bid quotation is used.
Futures contracts are valued based on the difference between the last sale price
and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Portfolio positions for which market quotations are not readily available are
valued at fair value under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains (losses) are based upon the specific identification
method for both financial statement and federal income tax purposes.
The Trust may trade securities on other than normal settlement terms. This may
increase the risk if the other party to the transaction fails to deliver and
19
<PAGE>
Notes to Financial Statements/June 30, 1999
- --------------------------------------------------------------------------------
NOTE 2. ACCOUNTING POLICIES - CONT.
................................................................................
causes the Trust to subsequently invest at less advantageous prices.
Federal income taxes: Consistent with the Trust's policy to qualify as a
regulated investment company and to distribute all of its taxable and tax-exempt
income, no federal income tax has been accrued.
Interest income, debt discount and premium: Interest income is recorded on the
accrual basis. Original issue discount is accreted to interest income over the
life of a security with a corresponding increase in the cost basis; market
discount is not accreted. Premium is amortized against interest income with a
corresponding decrease in the cost basis.
Distributions to shareholders: Distributions to shareholders are recorded on the
ex-date.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. Reclassifications are made to the Trust's capital
accounts to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
................................................................................
Management fee: Colonial Management Associates, Inc. (the Advisor) is the
investment Advisor of the Trust and furnishes accounting and other services and
office facilities for a monthly fee equal to 0.65% annually of the Trust's
average weekly net assets.
Bookkeeping fee: The Advisor provides bookkeeping and pricing services for
$18,000 per year plus 0.0233% of the Trust's average weekly net assets over $50
million.
Other: The Trust pays no compensation to its officers, all of whom are employees
of the Advisor.
The Trust's Trustees may participate in a deferred compensation plan which may
be terminated at any time. Obligations of the plan will be paid solely out of
the Trust's assets.
NOTE 4. PORTFOLIO INFORMATION
................................................................................
Investment activity: During the six months ended June 30, 1999, purchases and
sales of investments, other than short-term obligations, were $22,426,694 and
$21,172,092, respectively.
Unrealized appreciation (depreciation) at June 30, 1999, based on cost of
investments for both financial statement and federal income tax purposes was:
<TABLE>
<S> <C>
Gross unrealized appreciation $ 6,913,676
Gross unrealized depreciation (3,682,823)
--------------
Net unrealized appreciation $ 3,230,853
==============
</TABLE>
20
<PAGE>
Notes to Financial Statements/June 30, 1999
- --------------------------------------------------------------------------------
Capital loss carryforwards: At December 31, 1998, capital loss carryforwards
available (to the extent provided in regulations) to offset future realized
gains were approximately as follows:
<TABLE>
<CAPTION>
Year of Capital loss
expiration carryforward
------------ --------------
<S> <C>
2002 $ 1,417,000
2003 2,611,000
2004 1,455,000
-------------
$ 5,483,000
=============
</TABLE>
Expired capital loss carryforwards, if any, are recorded as a reduction of
capital paid in.
To the extent loss carryforwards are used to offset any future realized gains,
it is unlikely that such gains would be distributed since they may be taxable to
shareholders as ordinary income.
Other: There are certain risks arising from geographic concentration in any
state. Certain revenue or tax related events in a state may impair the ability
of certain issuers of municipal securities to pay principal and interest on
their obligations.
The Trust may focus its investments in certain industries, subjecting it to
greater risk than a trust that is more diversified.
The Trust may purchase or sell municipal and Treasury bond futures contracts and
purchase and write options on futures. The Trust will invest in these
instruments to hedge against the effects of changes in the value of portfolio
securities due to anticipated changes in interest rates and/or market
conditions, for duration management, or when the transactions are economically
appropriate to the reduction of risk inherent in the man- agement of the Trust
and not for trading purposes. The use of futures contracts and options involves
certain risks which include (1) imperfect correlation between the price movement
of the instruments and the underlying securities, (2) inability to close out a
position due to different trading hours, or the temporary absence of a liquid
market for either the instrument or the underlying securities or (3) an
inaccurate prediction by the Advisor of the future direction of interest rates.
Any of these risks may involve amounts exceeding the variation margin recorded
in the Trust's Statement of Assets and Liabilities at any given time.
NOTE 5. RESULTS OF ANNUAL MEETING OF SHAREHOLDERS
................................................................................
On April 15, 1999, the Annual Meeting of Shareholders of the Trust was held to
elect a Board of Trustees, to approve amendments to the Trust's Declaration of
Trust to permit the issuance of preferred shares of the Trust and to ratify the
selection of PricewaterhouseCoopers LLP as independent accountants for the
fiscal year ending December 31, 1999. The Meeting was adjourned to June 9, 1999
in connection with the approval of amendments to the Declaration of Trust. On
February 17, 1999, the record date for the Meeting,
21
<PAGE>
Notes to Financial Statements/June 30, 1999
- --------------------------------------------------------------------------------
NOTE 5. RESULTS OF ANNUAL MEETING OF SHAREHOLDERS - CONT.
................................................................................
the Trust had outstanding 11,509,000 shares of beneficial interest. The votes
cast at the Meeting were as follows:
1. To elect a Board of Trustees:
<TABLE>
<CAPTION>
Authority
For Withheld
--- --------
<S> <C> <C>
John V. Carberry 10,397,156 258,550
Lora S. Collins 10,384,412 271,293
Robert J. Birnbaum 10,383,980 271,726
Salvatore Macera 10,395,295 260,411
James E. Grinnell 10,398,829 256,877
Thomas E. Stitzel 10,403,527 252,179
Anne-Lee Verville 10,394,466 261,239
</TABLE>
The Board of Trustees also consists of Tom Bleasdale, Richard L. Lowry, William
E. Mayer, James L. Moody, Jr., John J. Neuhauser and Robert L. Sullivan.
2. To approve or disapprove amendments to the Trust's Agreement and Declaration
of Trust to permit the issuance of preferred shares of the Trust:
<TABLE>
<S> <C> <C>
For: 7,690,095 Shares of beneficial interest
being a majority of the shares
represented at the Meeting
Against: 945,217 Shares of beneficial interest
Abstain: 579,363 Shares of beneficial interest
Broker Non-Votes: 1,580,814
</TABLE>
3. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants for the fiscal year ending December 31, 1999:
<TABLE>
<S> <C> <C>
For: 10,320,092 Shares of beneficial interest
being a majority of the shares
represented at the Meeting
Against: 88,206 Shares of beneficial interest
Abstain: 247,408 Shares of beneficial interest
</TABLE>
22
<PAGE>
FINANCIAL HIGHLIGHTS
Selected per share data, total return, ratios and supplemental data throughout
each period are as follows:
<TABLE>
<CAPTION>
(Unaudited)
Six months
ended
June 30 Year ended December 31
========= =============================
1999 1998 1997
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 11.490 $ 11.430 $ 10.870
--------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.282 0.600 0.620
Net realized and
unrealized gain (loss) (0.473) 0.069 0.575
--------- --------- ---------
Total from Investment
Operations (0.191) 0.669 1.195
--------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.289) (0.607) (0.635)
In excess of net investment
income -- (0.002) --
--------- --------- ---------
Total Distributions
Declared to Shareholders (0.289) (0.609) (0.635)
--------- --------- ---------
Net asset value -
End of period $ 11.010 $ 11.490 $ 11.430
========= ========= =========
Market price per share $ 9.750 $ 11.187 $ 10.560
========= ========= =========
Total return - based on
net asset value (a) (1.67)%(b) 6.23% 11.61%
========= ========= =========
Total return - based on market
value (c) (10.56)%(b) 11.94% 10.76%
========= ========= =========
RATIOS TO AVERAGE NET ASSETS
Expenses (d) 0.86%(e) 0.77% 0.83%
Net investment income (d) 4.96%(e) 5.24% 5.63%
Portfolio turnover 16%(b) 24% 21%
Net assets at end
of period (000) $ 126,682 $ 132,242 $ 131,503
</TABLE>
(a) Total return at net asset value assuming all distributions reinvested.
(b) Not annualized.
(c) Total return at market value assuming all distributions reinvested and
excluding brokerage commissions.
(d) The benefits derived from custody credits and directed brokerage arrange-
ments had no impact.
(e) Annualized.
23
<PAGE>
FINANCIAL HIGHLIGHTS - CONT.
Selected per share data, total return, ratios and supplemental data throughout
each period are as follows:
<TABLE>
<CAPTION>
Year ended December 31
=============================================
1996 1995 1994
<S> <C> <C> <C>
Net asset value -
Beginning of period $ 11.050 $ 9.930 $ 11.050
--------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.630 0.644 0.673
Net realized and
unrealized gain (loss) (0.193) 1.111 (1.121)
--------- --------- ---------
Total from Investment
Operations 0.437 1.755 (0.448)
--------- --------- ---------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.617) (0.635) (0.672)
--------- --------- ---------
Net asset value -
End of period $ 10.870 $ 11.050 $ 9.930
========= ========= =========
Market price per share $ 10.130 $ 9.880 $ 9.250
========= ========= =========
Total return - based on net
asset value (a) 4.60% 18.63% (4.08)%
========= ========= =========
Total return - based on market
value (b) 9.06% 13.87% (8.12)%
========= ========= =========
RATIOS TO AVERAGE NET ASSETS
Expenses 0.88%(c) 1.08%(c) 0.94%
Net investment income 5.80%(c) 6.08%(c) 6.46%
Portfolio turnover 20% 37% 34%
Net assets at end
of period (000) $ 125,125 $ 127,118 $ 114,260
</TABLE>
(a) Total return at net asset value assuming all distributions reinvested.
(b) Total return at market value assuming all distributions reinvested and
excluding brokerage commissions.
(c) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
24
<PAGE>
- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
As a shareholder in the Trust you are eligible to participate in the Dividend
Reinvestment Plan.
The Trust generally distributes net investment income and net short-term capital
gains monthly and net long-term capital gains annually. Under the Trust's
Dividend Reinvestment Plan (the "Plan") all distributions are reinvested
automatically in additional shares of the Trust, unless the shareholder elects
to receive cash or the shares are held in broker or nominee name and a
reinvestment service is not provided by the broker or nominee. All cash
distributions will be mailed by check directly to the record holder by the
dividend paying agent.
If the market price of Trust shares on the distribution payment date is equal to
or greater than the net asset value, Plan participants will be issued shares at
the higher of net asset value or 95% of the market price. However, if the market
price of shares is less than the net asset value, shares will be bought as soon
as practicable (but no more than 30 days after the distribution, except as may
be required to comply with federal securities laws) in the open market for the
accounts of Plan participants. If, during this purchase period, the market price
surpasses the net asset value, the average per share price paid may exceed the
net asset value of the shares, resulting in the acquisition of fewer shares than
if the distribution had been in newly-issued shares. The aggregate market value
of the shares may constitute taxable income to shareholders for federal income
tax purposes.
All Plan accounts receive monthly written confirmations of all transactions.
Shares purchased under the Plan ordinarily are held in uncertificated form,
although each participant has the right to receive certificates for whole shares
owned by the participant. Each shareholder's proxy includes shares purchased
pursuant to the Plan. The automatic reinvestment of distributions does not
relieve participants of any income tax payable on the distributions.
There is no charge to Plan participants for reinvesting distributions. Fees and
expenses of the Plan other than brokerage charges are paid by the Trust.
Participants bear a pro-rata share of brokerage charges incurred on open market
purchases of shares issued under the Plan.
A shareholder may elect not to participate or terminate his or her participation
in the Plan by written notice to the Plan administrator. Such notice must be
received by the Plan administrator before the dividend record date in order to
be effective with respect to that dividend. The Plan may be amended or
terminated on 30 days' written notice to the Plan participants. Upon withdrawal
by any participant or any termination of the Plan, certificates for whole shares
will be issued and cash payments will be made for any fractional shares. All
correspondence concerning the Plan should be directed to BankBoston, NA, the
Trust's dividend disbursing agent and administrator of the Plan, at P.O. Box
1681, Boston, Massachusetts 02105, Attention: Dividend Reinvestment Department.
- --------------------------------------------------------------------------------
25
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
26
<PAGE>
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Investment Grade Municipal Trust is:
BankBoston, NA
100 Federal Street
Boston, MA 02110
1-800-730-6001
Colonial Investment Grade Municipal Trust mails one shareholder report to each
shareholder address. If you would like more than one report, please call
1-800-426-3750 and additional reports will be sent to you.
This report has been prepared for shareholders of Colonial Investment Grade
Municipal Trust.
27
<PAGE>
[back cover]
- --------------------------------------------------------------------------------
TRUSTEES
ROBERT J. BIRNBAUM
Consultant (formerly Special Counsel, Dechert, Price & Rhoads; President and
Chief Operating Officer, New York Stock Exchange, Inc.; President, American
Stock Exchange, Inc.)
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
JOHN CARBERRY
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President--Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
SALVATORE MACERA
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
WILLIAM E. MAYER
Partner, Development Capital, LLC (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board, Chief Executive Officer and Director,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Dean, Boston College School of Management
THOMAS E. STITZEL
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
ROBERT L. SULLIVAN
Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
IG-03/386H-0799 (8/99) 99/968
