<PAGE>
-------------------------------------------------------------
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST SEMIANNUAL REPORT
-------------------------------------------------------------
May 31, 2000
[Graphic Omitted]
<PAGE>
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Volatility was the watchword for the municipal markets during the past six
months. Early in the period, interest rates were rising. Yields on most bonds
followed suit, and as they rose, bond prices fell. The higher rates and yields
were prompted by the Federal Reserve. Concerned that robust economic growth
could ignite higher levels of inflation, the Fed attempted to cool the economy
and douse the inflationary sparks by raising key short-term lending rates in
February and March 2000.
Later, the municipal markets rallied. Although the Fed raised short-term
interest rates again in May -- this time, by 0.50% -- investors viewed it as a
positive move. Convinced that the central bankers were quite determined to keep
the economy and inflation from overheating, investors took some pressure off
municipal bond yields and prices recovered to some extent. In the end, the
municipal bond market, as measured by the Lehman Brothers Municipal Bond Index,
finished ahead by 1.02%. Investment grade municipal bonds -- those rated BBB or
higher -- fared better than non-investment grade securities.
Although steps were taken to mitigate the impact of rising rates, the Fund's
performance was affected by the general market volatility. These steps and other
information about the Fund's holdings and the strategies employed during this
half-year period are discussed on the next page.
As always, we thank you for choosing Colonial Investment Grade Municipal Trust
for your portfolio and for giving us the opportunity to serve your investment
needs.
Respectfully,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
July 17, 2000
---------------------------
Not FDIC May Lose Value
Insured No Bank Guarantee
---------------------------
Because market and economic conditions change frequently, there can be no
assurance that the trends described above or on the following pages will
continue or come to pass.
<PAGE>
-------------------------------------------------------------------------------
HIGHLIGHTS
-------------------------------------------------------------------------------
> FUND LIMITED RISK IN A RISING-RATE ENVIRONMENT.
When interest rates rise, bond prices fall, and the effect is most pronounced
for bonds with longer maturities. In response to a steady climb in interest
rates over the past six months, the Fund pursued a shorter average maturity for
its holdings. It also sought to offset the impact of higher rates with
short-term hedging strategies.
> PORTFOLIO MANAGERS' COMMENTARY
For the six-month period ended May 31, 2000, the Fund underperformed the Lehman
Brothers Municipal Bond Index, generating a total return of negative 0.61%,
based on net asset value. The period was marked by volatility in the municipal
markets, brought on by investors' reaction to three interest-rate increases by
the Federal Reserve. This volatility impacted the Fund's performance, as did an
overweighting in high-yield or non-investment grade securities. While these
provide additional income, they also are more sensitive than higher-quality
bonds to changes in interest rates. Going forward, we look for slower economic
growth and a reversal in the direction of interest rates and yields. In that
event, we would expect the Fund's longer-term and high-yield securities to
perform well. Until then, we will make use of short-term hedging techniques
designed to reduce interest-rate risk and look for an opportune time to invest
in more long-term securities.
William Loring
Brian Hartford
Portfolio Co-Managers
The Fund involves certain risks, such as credit risks associated with
lower-rated bonds and changes in interest rates. High-yield municipal bond
investing carries increased credit risks.
SIX-MONTH TOTAL RETURN, ASSUMING REINVESTMENT OF ALL DISTRIBUTIONS
NAV (0.61)%
-----------------------------------------
Market price 1.27%
-----------------------------------------
DISTRIBUTIONS DECLARED PER COMMON SHARE (12/1/99 - 5/31/001): $0.298
(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.
PRICE PER SHARE AS OF 5/31/00
NAV $9.91
-----------------------------------------
Market price $8.875
-----------------------------------------
TOP FIVE SECTORS AS OF 5/31/00
LOCAL GENERAL OBLIGATIONS 18.36%
HOSPITAL 13.30%
EDUCATION 7.00%
STATE APPROPRIATED 6.30%
WATER/SEWER 5.71%
QUALITY BREAKDOWN AS OF 5/31/00
AAA 59.1%
-----------------------------------------
AA 12.6%
-----------------------------------------
A 9.8%
-----------------------------------------
BBB 8.4%
-----------------------------------------
Non-rated 9.8%
-----------------------------------------
Cash equivalents 0.3%
-----------------------------------------
Quality and sector breakdowns are calculated as a percentage of total
investments, including short-term obligations. Ratings shown in the Quality
Breakdown represent the highest rating assigned to a particular bond by one of
the following respected agencies: Standard & Poor's Corp., Moody's Investors
Service, Inc. or Fitch Investors Service.
Because the Trust is actively managed, there can be no guarantee that the Trust
will continue to maintain this quality breakdown or invest in these sectors in
the future. Industry sectors in the following financial statements are based
upon the standard industrial classifications (SIC) published by the U.S. Office
of Management and Budget. The sector classifications used on this page are based
upon Colonial's defined criteria as used in the investment process.
<PAGE>
<TABLE>
---------------------------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
---------------------------------------------------------------------------------------------------
May 31,2000 (Unaudited)
(In thousands)
<CAPTION>
MUNICIPAL BONDS - 98.3% PAR VALUE
---------------------------------------------------------------------------------------------------
<S> <C> <C>
EDUCATION - 7.8%
EDUCATION - 6.9%
CA State Educational Facilities Authority, Santa Clara University,
Series 1996,
5.000% 09/01/15 $ 800 $ 818
IL Chicago, State University Auxiliary Facilities Series 1998,
5.500% 12/01/23 (a) 1,085 1,011
MA State College Building Authority,
Series 1999 A,
(b) 05/01/23 (a) 2,710 664
MA State Industrial Finance Agency, Tabor Academy, Series 1998,
5.400% 12/01/28 1,000 830
MN Univeristy of Minnesota:
Series 1996 A,
5.750% 07/01/14 500 508
Series 1999 A,
5.500% 07/01/21 2,000 1,918
MO State Health & Educational Facilities Authority Central Institute
for the Deaf,
Series 1999,
5.850% 01/01/22 600 577
NY St. Lawrence County Industrial Development Agency, St. Lawrence
University, Series 1998 A,
5.500% 07/01/13 1,465 1,447
TX Texas Tech University, Series 1999,
5.000% 02/15/29 (a) 5,000 4,223
--------
11,996
--------
STUDENT LOAN - 0.9%
NE Nebhelp, Inc., Series 1993 A6,
6.450% 06/01/18 1,500 1,542
--------
---------------------------------------------------------------------------------------------------
HEALTHCARE - 16.7%
CONGREGATE CARE RETIREMENT - 0.3%
OR Clackamas County Hospital Facilities Authority, Willamette View,
Series 1999 A,
7.500% 11/01/29 600 580
--------
HOSPITAL - 13.1%
AL Alabama Special Care Facilities Authority, Montgomery Healthcare,
Series 1989,
11.000% 10/01/19 (c) 647 32
AZ Maricopa County Industrial Development Authority, Mayo Clinic
Hospital,
Series 1998,
5.250% 11/15/37 3,000 2,538
National Health Facilities II Project,
5.100% 01/01/33 (a) 2,500 2,093
FL Orange County Health Facilities Authority, Orlando Regional
Healthcare System:
Series 1999,
6.000% 10/01/26 175 164
Series 1996 C,
6.250% 10/01/13 2,460 2,617
IL Health Facility Authority, Series 1992 B, IFRN (variable rate),
9.061% 05/01/21 700 749
IL Southwestern Illinois Development Authority, Anderson Hospital,
Series 1999,
5.375% 08/15/15 380 307
IL State Development Finance Authority, Adventist Health System,
Series 1999,
5.500% 11/15/20 1,000 802
IL State Health Facilities Authority, Swedish American Hospital,
Series 2000,
6.875% 11/15/30 500 482
LA Jefferson Parish Hospital Service District 2, Series 1998,
5.250% 07/01/12 1,000 946
LA State Public Facilities Authority, Touro Infirmary, Series 1999,
5.625% 08/15/29 500 391
MA State Health & Educational Facilities Authority, South Shore
Hospital,
Series 1999 F,
5.750% 07/01/29 1,000 861
MD State Health & Educational Facilities Authority, University of
Maryland Medical System,
6.750% 07/01/30 250 246
MI Flint Hospital Building Authority, Hurley Medical Center, Series
1998 B,
5.375% 07/01/28 500 350
NC State Medical Care Commission, Gaston Health Care, Series 1998,
5.000% 02/15/29 5,000 3,911
NH Higher Educational and Health Facilities Catholic Medical Center,
Series 1989,
6.000% 07/01/17 2,500 2,300
NV Henderson, Catholic Healthcare West, Series 1999 A,
6.750% 07/01/20 500 482
TN Metropolitan Government, Nashville & Davidson Counties, Meharry
Medical College, Series 1996,
6.000% 12/01/16 1,575 1,615
UT Weber County, IHC Health Services, Inc., Series 1999,
5.000% 08/15/30 (a) 2,300 1,895
--------
22,782
--------
INTERMEDIATE CARE FACILITIES - 0.2%
IL State Development Finance Authority, Hoosier Care, Inc.,
Series 1999 A,
7.125% 06/01/34 490 430
--------
NURSING HOME - 3.1%
CO Health Care Facilities Authority Pioneer Health Care, Series 1989,
10.500% 05/01/19 1,685 1,653
DE State Economic Development Authority, Churchman Village Project,
Series A,
10.000% 03/01/21 950 1,087
FL Escambia County, Beverly Enterprises - Florida, Inc., Series 1985,
9.800% 06/01/11 165 172
PA Chester County Industrial Development, Pennsylvania Nursing
Home, Inc.,
Series 1989,
10.125% 05/01/19 (c) 1,204 879
PA Delaware County Authority, Main Line and Haverford Nursing,
Series 1992,
9.000% 08/01/22 590 626
WI State Health & Educational Facilities Authority, Metro Health
Foundation, Inc., Series 1993,
10.000% 11/01/22 (c) (d) 1,300 985
--------
5,402
--------
---------------------------------------------------------------------------------------------------
HOUSING - 4.0%
ASSISTED LIVING/SENIOR - 0.3%
TX Bell County Health Facilities Development Corp.,
Care Institutions, Inc.,
9.000% 11/01/24 500 532
--------
MULTI-FAMILY - 2.3%
FL Broward County Housing Finance Authority, Chaves Lake Apartment
Project, Series 2000,
7.500% 07/01/40 500 495
FL Clay County Housing Finance Authority, Madison Commons Apartments,
Series 2000 A,
7.450% 07/01/40 250 246
MN White Bear Lake,
Birch Lake Townhome Project,
Series 1989A,
10.250% 07/15/19 775 799
Series 1989B,
(b) 07/15/19 (e) 703 284
Resolution Trust Corp., Pass Through Certificates, Series 1993-A,
9.250% 12/01/16 (f) 2,124 2,130
--------
3,954
--------
SINGLE FAMILY - 1.4%
CO State Housing Finance Authority,
Series 2000 B2,
7.250% 10/01/31 500 538
IL Chicago, Series 2000 A,
7.150% 09/01/31 500 541
IN State Housing Finance Authority Single Family Mortgage - GNMA
Series 1990-D,
7.800% 01/01/22 60 61
LA Louisiana Housing Finance Agency, Residual Lien Mortgage,
Series 1992,
7.375% 09/01/13 (f) 250 255
OH State Housing Finance Agency, Series B-4,
8.959% 03/31/31 1,015 1,058
--------
2,454
--------
--------------------------------------------------------------------------------------------------------
INDUSTRIAL - 2.9%
FOREST PRODUCTS - 2.0%
IN Jasper County, Georgia Pacific Corp.,
Series 2000,
6.700% 04/01/29 1,000 975
MN International Falls, Boise Cascade Corp., Series 1999,
6.850% 12/01/29 1,000 962
VA Bedford County Industrial Development Authority,
Nekoosa Packaging Corp.,
Series 1999 A,
6.550% 12/01/25 1,500 1,451
--------
3,388
--------
MANUFACTURING - 0.7%
MN Brooklyn Park, TL Systems Corp.,
Series 1991,
10.000% 09/01/16 885 997
MO State Development Finance Board, Proctor & Gamble Co., Series 1999,
5.200% 03/15/29 250 218
--------
1,215
--------
METALS & MINING - 0.2%
VA Peninsula Ports Authority, Ziegler Coal Project, Series 1997,
6.900% 05/02/22 500 426
--------
---------------------------------------------------------------------------------------------------
OTHER - 5.3%
POOL/BOND BANK - 0.1%
FL State Municipal Loan Council,
Series 2000 A,
(b) 04/01/21 520 143
--------
REFUNDED/ESCROWED - 5.2% (g)
CA San Joaquin Hills Transportation Corridor Agency, Series 1993,
(b) 01/01/23 (a) 5,250 1,334
CA State, Series 1995,
5.750% 03/01/19 1,930 2,021
CO Denver City and County Airport,
Series B,
7.250% 11/15/23 205 219
DC Hospital, Washington Hospital Center, Series 1990 A,
8.750% 01/01/15 615 641
DE State Economic Development Authority, Riverside Hospital,
Series 1992 A,
9.500% 01/01/22 225 261
FL Clearwater Housing Authority, Hampton Apartments, Series 1994,
8.250% 05/01/24 691 777
MI Wayne County Building Authority,
Series 1992 A,
8.000% 03/01/17 250 267
MN Mille Lacs Capital Improvement Authority, Mille Lacs Band of
Chippewa, Series 1992 A,
9.250% 11/01/12 235 261
NC Lincoln County, Lincoln County Hospital,
9.000% 05/01/07 135 150
TN Metropolitan Government, Nashville & Davidson Counties,
6.150% 05/15/25 1,000 1,040
TN Shelby County, Health, Education, & Housing Facilities Board, Open
Arms Development Center:
Series 1992A,
9.750% 08/01/19 445 561
Series 1992C,
9.750% 08/01/19 445 561
TX Bexar Metropolitan Water District,
5.000% 05/01/19 1,000 932
--------
9,024
--------
---------------------------------------------------------------------------------------------------
OTHER REVENUE - 0.5%
RECREATION - 0.5%
DC District of Columbia, Smithsonian Institute, Series 1997,
5.000% 02/01/28 1,000 842
--------
---------------------------------------------------------------------------------------------------
RESOURCE RECOVERY - 1.2%
DISPOSAL - 1.2%
IL Development Finance Authority, Waste Management, Inc., Series 1997,
5.050% 01/01/10 500 420
MA State Industrial Finance Agency, Peabody Monofill Associates, Inc.,
Ogden Hill Project:
Series 1995,
9.000% 09/01/05 195 202
Series 1998 A,
5.450% 12/01/12 1,250 1,113
MI State Strategic Fund, United Waste Systems, Inc., Series 1995,
5.200% 04/01/10 500 428
--------
2,163
--------
TAX-BACKED - 32.6%
LOCAL APPROPRIATED - 0.8%
MN Hibbing Economic Development Authority,
6.400% 02/01/12 335 325
TX Houston Independent School Distict Public Faclities Corp.,
Series 1998 A,
(b) 09/15/13 (a) 2,500 1,135
--------
1,460
--------
LOCAL GENERAL OBLIGATIONS - 18.1%
CO El Paso County School District No. 11, Series 1996,
7.125% 12/01/19 1,870 2,154
CO Highlands Ranch Metropolitan District, Series 1996,
6.500% 06/15/11 (a) 1,375 1,495
IL Chicago:
Series 1995 A-2,
6.250% 01/01/14 1,480 1,558
Series 1999,
5.500% 01/01/23 1,000 939
IL Chicago Board of Education, Series 1997 A,
5.250% 12/01/30 7,000 6,068
IL Cook County, Series 1997 A,
5.625% 11/15/22 (a) 2,100 1,991
IL St. Clair County Public Building Commision,
(b) 12/01/13 (a) 2,000 906
IL St. Clair County, Series 1999,
(b) 10/01/16 (a) 2,000 748
MI St. Johns Public School, Series 1998,
5.100% 05/01/25 1,000 878
MN Minneapolis-St. Paul Metropolitan Aiports Commission,
Series 1998 13,
5.250% 01/01/13 1,000 960
NY New York City, Series 1997 A,
7.000% 08/01/07 2,000 2,171
NY Yonkers, Series 1999 A,
4.500% 12/01/17 1,000 823
OH Olmsted Falls School District:
Series 1999,
5.500% 12/01/00 340 341
Series 1999,
5.500% 12/01/01 360 356
Series 1999,
5.500% 12/01/02 380 371
PA Philadelphia School District, Series B,
5.500% 09/01/18 2,000 1,898
TX Houston Independent School District, Series 1999 A,
5.000% 02/15/24 7,000 5,986
---------------------------------------------------------------------------------------------------
TX La Joya Independent School District, Series 1998,
5.500% 02/15/12 1,000 988
WA King County, Series 1998 B,
5.000% 01/01/30 1,000 836
--------
31,466
--------
SPECIAL NON-PROPERTY TAX - 3.7%
FL Tampa Sports Authority, Tampa Bay Arena Project, Series 1995,
5.750% 10/01/25 1,000 984
NM Dona Ana County, Series 1998,
5.500% 06/01/15 1,000 981
NY Metropolitan Transportation Authority, Series 1998 A,
4.500% 04/01/18 1,000 817
NY State Local Government Assistance Corp., Series 1993 E,
5.000% 04/01/21 3,000 2,639
WV State Building Commission, Series 1997 A,
5.250% 07/01/09 1,000 987
--------
6,408
--------
SPECIAL PROPERTY TAX - 1.0%
CA Capistrano Unified School District, Ladera Community Facilities
District No.98-2,
Series 1999,
5.750% 09/01/29 345 298
CA Contra Costa County Public Financing Authority, Series 1992 A,
7.100% 08/01/22 1,000 1,052
FL Indigo Community Development District, Series 1999 B,
6.400% 05/01/06 200 198
FL Lexington Oaks Community Development District, Series 1998 B,
5.500% 05/01/05 175 169
--------
1,716
--------
STATE APPROPRIATED - 6.2%
IN State Office Building Commission, Women's Prison, Series B,
6.250% 07/01/16 2,820 2,973
NY New York State Dormitory Authority Consolidation City University,
Series 1993A,
5.750% 07/01/18 5,000 4,890
Mental Health Services, Series 1998 C,
5.000% 02/15/11 1,485 1,371
NY State Medical Care Facilities Finance Agency, Mental Health Services
Facilities Improvement, Series 1991 A,
7.500% 02/15/21 100 104
NY State Urban Development Corp.,
5.600% 04/01/15 1,000 978
WV State Building Commission, Series 1998 A,
5.375% 07/01/18 500 477
--------
10,793
--------
STATE GENERAL OBLIGATIONS - 2.8%
CA State, Series 1995,
5.750% 03/01/19 70 70
DC District of Columbia, Series 1999 A,
5.375% 06/01/18 (a) 1,250 1,156
PR Commonwealth of Puerto Rico Aqueduct & Sewer Authority:
6.250% 07/01/12 1,000 1,077
6.250% 07/01/13 750 808
TX State, Series 1999 ABC,
5.500% 08/01/35 2,000 1,835
--------
4,944
--------
---------------------------------------------------------------------------------------------------
TRANSPORTATION - 13.0%
AIR TRANSPORTATION - 1.2%
IN Indianapolis Airport Authority, Federal Express Corp., Series 1994,
7.100% 01/15/17 1,000 1,025
NY Port Authority of New York & New Jersey, JFK International Air
Terminal, Series 6,
6.250% 12/01/08 1,000 1,059
--------
2,085
--------
AIRPORT - 5.1%
CO Denver City & County Airport:
Series 1997 E,
5.250% 11/15/23 (a) 2,000 1,778
Series 1998 B,
5.000% 11/15/25 1,800 1,519
Series B,
7.250% 11/15/23 795 830
MA State Port Authority:
Series 1998 D,
5.000% 07/01/28 3,500 2,963
Series 1999,
6.966% 07/01/29 1,000 916
MI Wayne County, Detroit Metropolitan Airport, Series 1998 A,
5.000% 12/01/22 1,000 844
--------
8,849
--------
TOLL FACILITIES - 5.0%
CA Foothill/Eastern Transportation Corridor Agency, Series 1995 A,
5.000% 01/01/35 1,000 829
CA San Joaquin Hills Transportation Corridor Agency, Series A,
(b) 01/15/15 (a) 2,000 862
CO State Public Highway Authority, E-470,
Series B,
(b) 09/01/11 (a) 2,000 1,027
IL Chicago, Skyway Bridge, Series 1996,
5.375% 01/01/16 (a) 1,750 1,652
MA State Turnpike Authority, Series 1999 A,
5.000% 01/01/39 (a) 3,900 3,221
NH State Turnpike Systems, Series 1991-C, IFRN (variable rate),
8.869% 11/01/17 1,000 1,131
--------
8,723
--------
TRANSPORTATION - 1.7%
CA San Mateo County Transportation District, Series 1998 A,
4.500% 06/01/18 1,000 832
IL Regional Transportation Authority, Series C,
7.750% 06/01/20 1,000 1,210
OH Toledo-Lucas County Port Authority, CSX Transportation, Inc.,
Series 1992,
6.450% 12/15/21 1,000 956
--------
2,998
--------
---------------------------------------------------------------------------------------------------
UTILITY - 14.3%
INDEPENDENT POWER PRODUCER - 0.3%
NY New York City Industrial Development Agency,
Brooklyn Navy Yard Partners,
Series 1997,
5.650% 10/01/28 200 169
PR Commonwealth of Puerto Rico Industrial, Educational, Medical &
Environmental Cogeneration Facilities, AES Project,
Series 2000,
6.625% 06/01/26 325 327
--------
496
--------
INVESTOR OWNED - 4.7%
IN Petersburg Pollution Control, Indianapolis Power & Light Company,
Series 1993-B,
5.400% 08/01/17 3,000 2,853
MI State Strategic Fund, Detroit Edison Co.,
Series 1998 A,
5.550% 09/01/29 3,000 2,738
MS State Business Finance Corp., Systems Energy Resources Project,
Series 1998,
5.875% 04/01/22 1,000 841
TX Matagorda County Navigation District #1, Houston Light & Power Co.,
Series 1997,
5.125% 11/01/28 2,000 1,712
--------
8,145
--------
JOINT POWER AUTHORITY - 2.5%
IN Indianapolis, Citizens Gas & Coke Utility, Series 1998 A,
5.250% 08/15/11 1,000 971
IN State Municipal Power Agency, Series B,
6.000% 01/01/12 2,000 2,076
NC State Municipal Power Agency, Catawba Electric No. 1, Series 1998 A,
5.500% 01/01/15 (a) 640 625
NE American Public Energy Agency, Public Gas Agency-Western Project,
Series 1999 A,
5.250% 06/01/11 700 667
--------
4,339
--------
MUNICIPAL ELECTRIC - 1.2%
NC University of North Carolina at Chapel Hill, (b) 08/01/14 1,000 439
NE Public Power District, Sereis 1998 A,
5.250% 01/01/11 500 488
TN Metropolitan Government, Nashville & Davidson Counties,
Series 1996 A,
(b) 05/15/09 (a) 1,825 1,107
--------
2,034
--------
WATER & SEWER - 5.6%
FL Miami-Dade County, Series 1999 A,
5.000% 10/01/29 (a) 2,000 1,696
MA Boston Water & Sewer Commission,
Series 1998 D,
5.000% 11/01/28 3,000 2,536
MA State Water Resources Authority,
Series 1998 B,
4.500% 08/01/22 (a) 3,000 2,371
MS V Lakes Utility District,
8.250% 07/15/24 (e) 140 112
PA Erie Sewer Authority,
5.625% 06/01/17 1,500 1,533
WA King County, Series 1999,
5.250% 01/01/30 1,750 1,530
--------
9,780
--------
TOTAL MUNICIPAL BONDS (cost of $177,242)(h) 171,109
--------
OPTIONS - 0.2%
CONTRACTS
----------------------------------------------------------------------------------------------------------
September 2000 Treasury Bond Put Strike price 92 expiration 08/19/2000 24,200 132
September 2000 Treasury Bond Calls Strike price 96
expiration 09/19/2000 9,800 153
September 2000 Treasury Bond Calls Strike price 98
expiration 09/19/2000 5,700 45
--------
TOTAL OPTIONS (cost of $458) 331
--------
TOTAL INVESTMENTS (cost of $177,700) 171,440
--------
SHORT-TERM OBLIGATIONS - 0.3% PAR VALUE
---------------------------------------------------------------------------------------------------
VARIABLE RATE DEMAND NOTES (i)
IA State Higher Education Loan Authority,
St. Ambrose University, Series 1999,
4.450% 10/01/09 $ 395 $ 395
IN State Hospital Equipment Finance Authority, Series A,
4.500% 12/01/15 100 100
--------
TOTAL SHORT-TERM OBLIGATIONS 495
--------
OTHER ASSETS & LIABILITIES, NET - 1.2% 2,097
---------------------------------------------------------------------------------------------------
NET ASSETS - 100.0% $174,032
--------
NOTES TO INVESTMENT PORTFOLIO:
---------------------------------------------------------------------------------------------------
(a) These securities, or a portion thereof, with a total market value of $31,026, are being used to
collateralize the open future contracts indicated below.
(b) Zero coupon bond.
(c) This issuer is in default of certain debt covenants. Income is not being accrued.
(d) This is a restricted security which was acquired on February 25, 1996 at a cost of $1,432. The
security represents 0.8% of the Fund's net assets as of May 31, 2000.
(e) Accrued interest accumulates in the value of the security and is payable at redemption.
(f) This security is exempt from registration under Rule 144A of the Securities Act of 1993. This
security may be resold in transactions exempt from registration, normally to qualified
institutional buyers. At May 31, 2000, the value of this security amounted to $2,385 or 1.4% of
net asstes.
(g) The Fund 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 payment of principal and interest.
(h) Cost for federal income tax purposes is approximately 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 May 31, 2000.
ACRONYM NAME
----- ---
IFRN Inverse Floating Rate Note
</TABLE>
<TABLE>
Short futures contracts open at May 31, 2000
<CAPTION>
PAR VALUE UNREALIZED
COVERED BY EXPIRATION DEPRECIATION
TYPE CONTRACTS MONTH AT 05/31/00
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Treasury Bond 24,300 September $ 227
Municipal Bond 5,700 September 97
------
$ 324
======
See notes to investment portfolio.
</TABLE>
<PAGE>
-------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
-------------------------------------------------------------------------------
May 31, 2000 (Unaudited)
(In thousands except for per share amounts)
ASSETS
Investments at value (cost $177,700) $171,440
Short-term obligations 495
--------
171,935
Receivable for:
Interest $3,241
Investments sold 286
Other 44 3,571
------ --------
Total Assets 175,506
LIABILITIES
Payable for:
Distributions - preferred shares 15
Distributions - common shares 587
Investments purchased 408
Variation margin on futures 282
Accrued:
Management fee 94
Bookkeeping fees 4
Deferred Trustees fees 5
Other 79
------
Total Liabilities 1,474
--------
NET ASSETS $174,032
--------
COMPOSITION OF NET ASSETS
Auction Preferred Shares (2 shares issued and
outstanding at $25,000 per share) $ 60,000
Capital paid in 126,930
Undistributed net investment income 132
Accumulated net realized loss (6,446)
Net unrealized depreciation on:
Investments (6,260)
Open futures contracts (324)
--------
174,032
--------
Net Assets at value for 11,509 common shares of
beneficial interest outstanding $114,032
--------
Net asset value per common share $ 9.91
--------
Net Assets at value including accrued dividends for
2 preferred shares outstanding $ 60,015
--------
See notes to financial statements.
<PAGE>
-------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
-------------------------------------------------------------------------------
For the Six Months Ended May 31, 2000 (Unaudited)
(In thousands)
INVESTMENT INCOME
Interest $ 5,469
EXPENSES
Management fee $ 572
Bookkeeping fee 24
Transfer agent fee 12
Trustees fee 6
Custodian fee 2
Audit fee 16
Legal fee 3
Reports to shareholders 7
Preferred shares remarketing commissions 75
Other 52 769
-------- --------
Net Investment Income 4,700
--------
NET REALIZED AND UNREALIZED LOSS ON
PORTFOLIO POSITIONS
Net realized loss on:
Investments (1,641)
Closed futures contracts (46)
-------
Net Realized Loss (1,687)
Net Change in Unrealized Appreciation/Depreciation
during the period on:
Investments (2,459)
Open futures contracts (332)
-------
Net Change in Unrealized Appreciation/Depreciation (2,791)
--------
Net Loss (4,478)
--------
Increase in Net Assets from Operations $ 222
--------
See notes to financial statements.
<PAGE>
<TABLE>
---------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
---------------------------------------------------------------------------------------------------------
(In thousands)
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED PERIOD ENDED
MAY 31, NOVEMBER 30,
INCREASE (DECREASE) IN NET ASSETS 2000 1999(a)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 4,700 $ 6,693
Net realized gain (loss) (1,687) 1,044
Net change in unrealized appreciation/depreciation (2,791) (13,909)
-------- --------
Net Increase (Decrease) from Operations 222 (6,172)
DISTRIBUTIONS
From net investment income - common (3,430) (6,025)
From net investment income - preferred (1,236) (570)
-------- --------
(4,444) (12,767)
-------- --------
FUND SHARE TRANSACTIONS
Preferred share offering (net of $190 and $809 offering costs,
respectively) (190) 59,191
-------- --------
Total Increase (Decrease) (4,634) 46,424
NET ASSETS
Beginning of period 178,666 132,242
-------- --------
End of period (including undistributed net investment income of
$132 and $98, respectively) $174,032 $178,666
-------- --------
NUMBER OF FUND SHARES
COMMON:
Outstanding at Beginning of Period 11,509 --
-------- --------
End of Period 11,509 11,509
PREFERRED:
Issued in initial offering -- 2
Outstanding at Beginning of Period 2 --
-------- --------
End of period 2 2
-------- --------
(a) The Fund changed its fiscal year end from December 31 to November 30.
See notes to financial statements.
</TABLE>
<PAGE>
-------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
May 31, 2000 (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 Fund at May 31, 2000, 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 provide high
current income, generally exempt from federal income taxes, by investing
primarily in medium and lower quality municipal securities. 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 significant
accounting policies 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.
Options are valued at the last reported sale price, or in the absence of a
sale, the mean between the last quoted bid and asking price.
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 and 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
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.
Distributions to preferred shareholders are recorded daily and are payable at
the end of each dividend period. Each dividend payment period for the Auction
Preferred Shares is generally seven days. The applicable dividend rate for the
Auction Preferred Shares on May 31, 2000 was 4.49%. For the six months ended
May 31, 2000, the Trust paid dividends to Auction Preferred shareholders
amounting to $1,236,335 representing an average APS dividend rate for such
period of 4.12%.
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% annually 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 May 31, 2000, purchases and sales of investments,
other than short-term obligations, were $16,628,103 and $23,703,704,
respectively.
Unrealized appreciation (depreciation) at May 31, 2000, based on cost of
investments for both financial statement and federal income tax purposes was:
Gross unrealized appreciation $ 3,797,928
Gross unrealized depreciation (10,058,088)
------------
Net unrealized depreciation $ (6,260,160)
------------
CAPITAL LOSS CARRYFORWARDS
At November 30, 1999, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were approximately as
follows:
YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD
--------------------------- ---------------------------
2002 $ 454,000
2003 2,611,000
2004 1,455,000
----------
$4,520,000
----------
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 fund 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 management 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 positions 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 amount
recorded in the Trust's Statement of Assets and Liabilities at any given time.
NOTE 5. PREFERRED SHARE OFFERING
On August 26, 1999, the Trust offered and currently has outstanding 2,400
Auction Preferred Shares. The Auction Preferred Shares are redeemable at the
option of the Trust on any dividend payment date at the redemption price of
$25,000 per share, plus an amount equal to any dividends accumulated on a
daily basis unpaid through the redemption date (whether or not such dividends
have been declared). Total proceeds of $59,000,257 net of underwriting and
offering costs, were received upon completion of offering.
Cost incurred by the Trust in connection with the offerings of the Auction
Preferred Shares totaling $999,743 were recorded as a reduction of capital
paid in excess of par applicable to common shares.
Under the Investment Company Act of 1940, the Trust is required to maintain
asset coverage of at least 200% with respect to the Auction Preferred Shares
as of the last business day of each month in which any Auction Preferred
Shares are outstanding. Additionally, the Trust is required to meet more
stringent asset coverage requirements under the terms of the Auction Preferred
Shares and in accordance with the guidelines prescribed by the rating
agencies. Should these requirements not be met, or should dividends accrued on
the Auction Preferred Shares not be paid, the Trust may be restricted in its
ability to declare dividends to common shareholders or may be required to
redeem certain of the Auction Preferred Shares. At May 31, 2000 there were no
such restrictions on the Trust.
NOTE 6. RESULTS OF ANNUAL MEETING OF SHAREHOLDERS
On May 24, 2000, the Annual Meeting of Shareholders of the Trust was held to
elect four Trustees, to be voted by the Common and Preferred shareholders and
to elect two Trustees, to be voted solely by Preferred shareholders, and to
ratify the selection of PricewaterhouseCoopers LLP as independent accountants
for the fiscal year ending November 30, 2000. On March 1, 2000, the record
date for the Meeting, the Fund had outstanding 11,509,000 of Common shares and
2,400 of Preferred shares. The votes cast were as follows:
AUTHORITY
FOR WITHHELD
--- --------
To elect a Board of Trustees:
Tom Bleasdale 10,452,182 195,394
William E. Mayer 10,456,447 191,129
James L. Moody 10,448,582 198,994
John J. Neuhauser 10,460,556 187,020
Salvatore Macera 111 6
Thomas E. Stirzel 111 6
To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants for the fiscal year ending November 30, 2000:
FOR AGAINST ABSTAIN
--- ------- -------
10,442,754 50,126 154,696
<PAGE>
<TABLE>
----------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------------------------------------
Selected per share data, total return, ratios and supplemental data throughout each period are as
follows (common shares unless otherwise noted):
<CAPTION>
(UNAUDITED)
SIX MONTHS
ENDED PERIOD ENDED
MAY 31, NOVEMBER 30 (a)
--------------- --------------
2000 1999
---------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.310 $ 11.490
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.300 0.583
Net realized and unrealized loss (0.278) (1.119)
Offering costs - preferred shares (0.017) (0.070)
-------- --------
Total from Investment Operations 0.005 (0.606)
-------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income - common (0.298) (0.524)
From net investment income - preferred (0.107) (0.050)
-------- --------
Total Distributions Declared to Shareholders (0.405) (0.574)
-------- --------
NET ASSET VALUE, END OF PERIOD $ 9.910 $ 10.310
======== ========
Market price per share $ 8.875 $ 9.062
======== ========
Total return-based on market value - common shares (b)(c) 1.27% (14.64)%
======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses (d)(e) 1.33%(f) 1.03%
Net investment income (d)(e) 5.98%(f) 5.26%
Portfolio turnover (c) 10% 25%
Net assets at end of period (000) - Total Fund $174,032 $178,666
(a) The Fund changed its fiscal year end from December 31 to November 30.
(b) Total return at market value assuming all distributions reinvested and excluding brokerage
commissions.
(c) Not annualized.
(d) The benefits derived from custody credits and directed brokerage arrangements had no impact.
(e) Annualized.
(f) Ratios reflect net assets available to common shares only; net investment income ratio also
reflects reduction for dividend payments to preferred shareholders.
<CAPTION>
YEAR ENDED
DECEMBER 31
----------------------------
1998 1997
--------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.430 $ 10.870
-------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.600 0.620
Net realized and unrealized gain 0.069 0.575
-------- --------
Total from Investment Operations 0.669 1.195
-------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income - common (0.607) (0.635)
In excess of net investment income (0.002) --
-------- --------
Total Distributions Declared to Shareholders (0.609) (0.635)
-------- --------
NET ASSET VALUE, END OF PERIOD $ 11.490 $ 11.430
======== ========
Market price per share $ 11.187 $ 10.560
======== ========
Total return - based on market value (a) 11.94% 10.76%
======== ========
RATIOS TO AVERAGE NET ASSETS
Expenses (b) 0.77% 0.83%
Net investment income (b) 5.24% 5.63%
Portfolio turnover 24% 21%
Net assets at end of period (000) $132,242 $131,503
(a) Total return at market value assuming all distributions reinvested and excluding brokerage
commissions.
(b) The benefits derived from custody credits and directed brokerage arrangements had no impact.
</TABLE>
<PAGE>
<TABLE>
--------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------------------------
Selected per share data, total return, ratios and supplemental data throughout each period are as
follows (common shares unless otherwise noted):
YEAR ENDED DECEMBER 31
-----------------------------
1996 1995
--------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.050 $ 9.930
--------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.630 0.644
Net realized and unrealized gain (loss) (0.193) 1.111
--------- --------
Total from Investment Operations 0.437 1.755
--------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.617) (0.635)
--------- --------
NET ASSET VALUE, END OF PERIOD $ 10.870 $ 11.050
========= ========
Market price per share $ 10.130 $ 9.880
========= ========
Total return - based on market value (a) 9.06% 13.87%
========= ========
RATIOS TO AVERAGE NET ASSETS
Expenses (b) 0.88% 1.08%
Net investment income (b) 5.80% 6.08%
Portfolio turnover 20% 37%
Net assets at end of period (000) $125,125 $127,118
(a) Total return at market value assuming all distributions reinvested and excluding brokerage
commissions.
(b) The benefits derived from custody credits and directed brokerage arrangements had no impact.
</TABLE>
<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 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 participants 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.
<PAGE>
TRANSFER AGENT
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
The 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.
<PAGE>
TRUSTEES
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
JOHN V. 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
Academic Vice President and Dean of Faculties, Boston College (formerly Dean,
Boston College School of Management)
THOMAS E. STITZEL
Business Consultant and Chartered Financial Analyst (formerly Professor of
Finance, College of Business, Boise State University)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
-------------------------------------------------------------
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST SEMIANNUAL REPORT
-------------------------------------------------------------
130-03/834B-0600 (7/00) 00/1187
