<PAGE>
[Graphic Omitted]
------------------------------------------------------
COLONIAL INTERMARKET INCOME TRUST I SEMIANNUAL REPORT
------------------------------------------------------
MAY 31, 2000
<PAGE>
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The half-year ended May 31, 2000, might best be described as a "mixed bag" for
bond markets worldwide. Here in the United States, the robust economy, concerns
about the possibility of higher inflation and a 1.0% rise in key short-term
interest rates added up to a slight gain for U.S. Treasury securities and a
negative total return for the corporate fixed-income sector. Overseas, interest
rates in the developed countries of Europe and Japan generally followed the
United States' lead, moving higher. This hurt bond market performance in those
regions, since higher rates triggered higher bond yields and lower bond prices.
In contrast, fixed-income markets in the emerging-market nations posted strong
gains, spurred on by worldwide economic expansion and high demand for exports
such as oil and other basic commodities. When all was said and done,
emerging-markets bonds provided the period's strongest total returns.
As always, at least 20% of the Trust's net assets were invested in each of three
broad market sectors: U.S. government bonds, bonds issued by foreign
governments, and high-yield bonds from U.S. corporations. This diversity, plus
an increased allocation to emerging-market bonds, helped to reduce the adverse
effects of rising interest rates in the developed world.
We thank you for choosing Colonial InterMarket Income Trust I 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
--------------------------------------------------------------------------------
o TREASURY LED U.S. MARKET.
Persistent strength in the U.S. economy induced the Federal Reserve to raise
short-term interest rates by 0.25% in February and March, and by 0.50% in
May. These moves kept the U.S. bond market on edge. But by the end of the
period, the Fed's moves were seen as anti-inflationary, and investors became
less concerned about the need for higher income in the future to combat
inflation. As a result, yields on long-term Treasury bonds declined and
their prices recovered from the negative impact of rising rates in 1999 and
early 2000.
o HIGH-YIELD COMPONENT UNDERPERFORMED.
Yields on U.S. corporate bonds did not subside to the same extent as
Treasury yields, and the "spread" or difference between corporate and
Treasury yields expanded. As the gap widened, high-yield corporate bonds
underperformed, detracting from the Trust's total return for the period.
Nonetheless, the Trust maintained its commitment to the sector, particularly
to telecommunications bonds, which continued to benefit from the expansion
of the Internet and general demand for wireless communications.
o EMERGING-MARKET DEBT OUTPACED BONDS FROM DEVELOPED COUNTRIES.
Stronger-than-expected economic growth throughout the developed
world contributed to economic growth in the emerging markets. As the
economic situation in the emerging markets improved, they regained
credibility with international investors. With increased demand came higher
prices and stronger total returns. Meanwhile, the Trust's investments in
developed-market bonds -- mostly European securities -- did not hold up as
well. The combination of a strengthening global economy, fears of higher
inflation and rising interest rates resulted in relatively small price
declines. These, however, were magnified for U.S. investors by weakness in
the major European currency, the euro, against the U.S. dollar.
--Laura Ostrander
Portfolio Manager
Fixed-income investing offers attractive income and total return opportunities,
but also involves certain risks. The value and return of your investment may
fluctuate as a result of changes in interest rates, the financial strength of
issuers of lower-rated bonds, foreign and domestic, political and economic
developments, and changes in currency exchange rates.
SIX-MONTH DISTRIBUTIONS
DECLARED PER SHARE FOR PERIOD
ENDED 5/31/00
$0.444
------------------------------
SIX-MONTH TOTAL RETURNS,
ASSUMING REINVESTMENT OF
ALL DISTRIBUTIONS FOR PERIOD
ENDING 5/31/00
NAV (0.72)%
--------------------------
Market Price 1.62%
--------------------------
SECURITIES BREAKDOWN AS OF
5/31/00
High Yield 36.9%
--------------------------
Foreign Government 25.0%
& Agency
--------------------------
U.S. Government 27.6%
& Agency
--------------------------
Cash and Equivalents 6.2%
--------------------------
Preferred Stocks 3.5%
--------------------------
Other 0.5%
--------------------------
Common Stock 0.3%
--------------------------
GOVERNMENT BREAKDOWN
TOP FIVE FOREIGN COUNTRIES
AS OF 5/31/00
Brazil 2.9%
--------------------------
Mexico 2.9%
--------------------------
Argentina 2.5%
--------------------------
Greece 2.4%
--------------------------
Norway 2.3%
--------------------------
Securities and government breakdowns are calculated as a percentage of net
assets. Because the Trust is actively managed, there can be no guarantee the
Trust will continue to invest in these securities and countries in the future.
<PAGE>
--------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
--------------------------------------------------------------------------------
May 31, 2000 (Unaudited)
(In thousands)
BONDS & NOTES - 89.5% PAR VALUE
-----------------------------------------------------------------------------
CORPORATE FIXED-INCOME BONDS & NOTES - 36.9%
-----------------------------------------------------------------------------
CONSTRUCTION - 0.2%
BUILDING CONSTRUCTION
Atrium Cos., Inc.,
10.500% 05/01/09 $ 300 $ 252
---------
-----------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 0.5%
DEPOSITORY INSTITUTIONS - 0.4%
Cal Fed Bancorp, Inc.,
9.125%, Series A 9 183
Sovereign Bancorp, Inc.,
10.500% 11/15/06 250 249
---------
432
---------
FINANCIAL SERVICES - 0.1%
PDVSA Finance Ltd., Series 1999 I,
9.750% 02/15/10 152 144
---------
-----------------------------------------------------------------------------
MANUFACTURING - 13.4%
CHEMICALS & ALLIED PRODUCTS - 2.8%
Agricultural Minerals
Co., LP,
10.750% 09/30/03 120 87
Allied Waste North America, Inc.,
10.000% 08/01/09 635 498
Bio-Rad Laboratories, Inc.,
11.625% 02/15/07 (a) 115 117
Huntsman ICI Holdings LLC,
0.000% 12/31/09 930 288
HydroChem Industrial Services, Inc.,
10.375% 08/01/07 490 372
LaRoche Industries, Inc.,
9.500% 09/15/07 500 105
Lyondell Chemical Co.,
10.875% 05/01/09 200 194
PCI Chemicals Canada, Inc.,
9.250% 10/15/07 225 153
Sterling Chemicals, Inc.,
11.750% 08/15/06 500 410
Terra Industries, Inc.,
10.500% 06/15/05 365 277
Texas Petrochemical Corp.,
11.125% 07/01/06 315 258
Trans Resources, Inc.,
10.750% 03/15/08 500 240
---------
2,999
---------
ELECTRONIC & ELECTRICAL EQUIPMENT - 0.5%
Amphenol Corp.,
9.875% 05/15/07 150 151
TransDigm, Inc.,
10.375% 12/01/08 500 410
---------
561
---------
FABRICATED METAL - 0.3%
Euramax International, PLC,
11.250% 10/01/2006 (b) 350 340
---------
FOOD & KINDRED PRODUCTS - 0.8%
Chattem, Inc.,
8.875% 04/01/08 500 425
Premier International Foods, PLC,
12.000% 09/01/2009 (a)(b) 500 475
---------
900
---------
MACHINERY & COMPUTER EQUIPMENT - 0.6%
IMO Industries, Inc.,
11.750% 05/01/06 625 625
---------
MEASURING & ANALYZING INSTRUMENT - 0.3%
Envirosource, Inc.,
9.750% 06/15/03 450 286
---------
MISCELLANEOUS MANUFACTURING - 3.1%
Blount, Inc.,
13.000% 08/01/09 330 319
Eagle-Picher Industries, Inc.,
9.375% 03/01/08 225 190
ISG Resources, Inc.,
10.000% 04/15/08 250 223
Koppers Industries, Inc.,
9.875% 12/01/07 500 460
Newcor, Inc.,
9.875% 03/01/08 1,000 300
Owens-Illinois, Inc.,
7.500% 05/15/10 500 434
Tekni-Plex, Inc.,
9.250% 03/01/08 500 480
Terex Corp.,
8.875% 04/01/08 350 315
Thermadyne Holdings Corp.,
9.875% 06/01/08 400 314
Tokheim Corp.,
11.375% 08/01/08 395 49
Werner Holding Co.,
10.000% 11/15/07 250 235
---------
3,319
---------
PAPER PRODUCTS - 1.7%
Gaylord Container Corp.,
9.750% 06/15/07 1,000 840
Georgia Gulf Corp.,
10.375% 11/01/07 45 46
Repap New Brunswick, Inc.,
10.625% 04/15/05 450 401
Riverwood International Corp.:
10.625% 08/01/07 500 490
10.875% 04/01/08 50 47
---------
1,824
---------
PETROLEUM REFINING - 0.2% Benton Oil & Gas Co.:
9.375% 11/01/07 290 174
11.625% 05/01/03 25 17
---------
191
---------
PRIMARY METAL - 1.9%
Bayou Steel Corp.,
9.500% 05/15/08 500 440
Kaiser Aluminum & Chemical Corp.,
9.875% 02/15/02 250 239
Keystone Consolidated Industries, Inc.,
9.625% 08/01/07 500 425
WCI Steel, Inc.,
10.000% 12/01/04 500 480
Wheeling-Pittsburgh Corp.,
9.250% 11/15/07 500 395
---------
1,979
---------
PRINTING & PUBLISHING - 0.3%
American Lawyer Media, Inc.,
9.750% 12/15/07 295 268
---------
RUBBER & PLASTIC - 0.4%
Burke Industries, Inc.,
10.000% 08/15/07 145 59
Metromedia Fiber Network, Inc.,
10.000% 12/15/09 350 332
---------
391
---------
STONE, CLAY, GLASS & CONCRETE - 0.1%
Owens-Illinois, Inc.,
8.100% 05/15/07 50 46
---------
TEXTILE MILL PRODUCTS - 0.2%
Collins & Aikman Products Co.,
10.000% 01/15/07 200 194
---------
TRANSPORTATION EQUIPMENT - 0.2%
LDM Technologies, Inc.,
10.750% 01/15/07 275 217
---------
-----------------------------------------------------------------------------
MINING & ENERGY - 2.3%
COAL MINING - 0.1%
AEI Resources, Inc.,
10.500% 12/15/2005 (a) 500 70
---------
OIL & GAS EXTRACTION - 2.2%
HS Resources, Inc.,
9.250% 11/15/06 400 390
Magnum Hunter Resources, Inc.,
10.000% 06/01/07 525 483
Mariner Energy, Inc.,
10.500% 08/01/06 350 322
Ocean Energy, Inc.,
8.875% 07/15/07 500 487
Petsec Energy, Inc.,
9.500% 06/15/07 750 292
Vintage Petroleum, Inc.,
9.750% 06/30/09 350 349
---------
2,323
---------
RETAIL TRADE - 1.0%
FOOD STORES - 1.0%
Pathmark Stores, Inc.:
9.625% 05/01/03 1,000 700
10.750% 11/01/03 750 52
Richmont Marketing Specialist, Inc.,
10.125% 12/15/07 500 260
---------
1,012
---------
-----------------------------------------------------------------------------
SERVICES - 3.3%
AMUSEMENT & RECREATION - 1.7%
Coast Hotels & Casinos, Inc.,
9.500% 04/01/09 420 393
Hollywood Casino Corp.,
11.250% 05/01/07 500 508
Hollywood Park, Inc.,
9.500% 08/01/07 225 224
Horseshoe Gaming LLC,
9.375% 06/15/07 350 337
Mohegan Tribal Gaming Authority,
8.750% 01/01/09 250 235
Regal Cinemas, Inc.,
9.500% 06/01/08 260 107
---------
1,804
---------
HEALTH SERVICES - 0.6%
Tenet Healthcare Corp.,
8.625% 01/15/07 725 680
---------
HOTELS, CAMPS & LODGING - 0.6%
CapRock Communications Corp.,
11.500% 05/01/09 750 675
---------
OTHER SERVICES - 0.4%
Intertek Finance, PLC,
10.250% 11/01/2006 (b) 500 415
---------
-----------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 16.2%
BROADCASTING - 1.6%
Cumulus Media, Inc.,
10.375% 07/01/08 75 64
LIN Holding Corp.,
stepped coupon, (10.000% 03/01/03)
(c) 03/01/08 500 298
Sinclair Broadcast Group, Inc.,
10.000% 09/30/05 400 370
Young Broadcasting Corp.,
10.125% 02/15/05 1,000 960
---------
1,692
---------
CABLE - 5.4%
Adelphia Communications Corp.,
9.875% 03/01/07 700 658
Charter Communications Holding LLC,
stepped coupon, (9.920% 04/01/04)
(c) 04/01/11 600 311
Comcast UK Cable Partners Ltd.,
stepped coupon, (11.200% 11/15/00)
(c) 11/15/07 1,000 930
Diamond Cable Co.,
stepped coupon, (10.750% 02/15/02)
(c) 02/15/07 500 380
EchoStar DBS Corp.,
9.250% 02/01/06 1,000 940
NTL, Inc.,
stepped coupon, (9.750% 04/15/04)
(c) 04/15/09 (b) 1,000 780
Northland Cable Television, Inc.,
10.250% 11/15/07 375 334
Shop At Home, Inc.,
11.000% 04/01/05 500 490
Telewest Communication PLC,
stepped coupon, (11.000% 10/01/00)
(c) 10/01/07 (b) 1,000 940
---------
5,763
---------
COMMUNICATION - 2.0%
Call-Net Enterprises, Inc.,
stepped coupon, (10.800% 05/15/04)
(c) 05/15/09 500 175
Exodus Communications, Inc.,
10.750% 12/15/09 (a) 170 168
Metrocall, Inc.,
9.750% 11/01/07 230 158
ORBCOMM Global LP,
14.000% 08/15/04 45 41
Spectrasite Holdings, Inc.,
stepped coupon, (11.250% 04/15/04)
(c) 04/15/09 500 270
Spectrasite Holdings, Inc.,
10.750% 03/15/10 (a) 60 59
Time Warner Telecom LLC,
9.750% 07/15/08 500 480
United Pan-Europe Communications NV,
11.500% 02/01/10 (a) 300 255
Verio, Inc.,
11.250% 12/01/08 506 562
---------
2,168
---------
ELECTRIC SERVICES - 0.5%
The AES Corp.,
9.500% 06/01/09 510 485
---------
MOTOR FREIGHT & WAREHOUSING - 0.2%
MTL, Inc.,
10.000% 06/15/06 250 193
---------
TELECOMMUNICATION - 6.3%
AirGate PCS, Inc.,
stepped coupon, (13.500% 10/01/04)
(c) 10/01/09 336 189
Arch Communication Group, Inc.,
12.750% 07/01/07 250 200
Carrier1 International SA,
13.250% 02/15/09 450 441
Clearnet Communications, Inc.,
stepped coupon, (14.750% 12/15/00)
(c) 12/15/05 750 761
Covad Communications Group, Inc.,
12.000% 02/15/10 (a) 100 92
Crown Castle International Corp.,
stepped coupon, (10.375% 05/15/04)
(c) 05/15/11 450 257
FLAG Telecom Holdings Ltd.,
11.625% 03/30/10 (a) 200 184
Global Crossing Ltd.,
9.125% 11/15/06 (a) 375 353
Hyperion Telecommunications, Inc.,
stepped coupon, (13.000% 04/15/01)
(c) 04/15/03 (a) 150 134
Jazztel PLC,
13.250% 12/15/09 (b) 150 138
Level 3 Communications, Inc.:
9.125% 05/01/08 160 138
11.000% 03/15/08 (a) 225 214
McLeodUSA, Inc.,
stepped coupon, (10.500% 03/01/02)
(c) 03/01/07 500 394
NEXTLINK Communications, Inc.,
10.750% 06/01/09 300 288
Nextel Communications, Inc.,
9.375% 11/15/2009 (a) 100 95
Nextel International, Inc.,
stepped coupon, (12.125% 04/15/03)
(c) 04/15/08 175 108
Nextel Partners, Inc.,
11.000% 03/15/10 200 192
RCN Corp.,
stepped coupon (11.125%, 10/15/02)
(c) 10/15/07 300 165
Rogers Cantel, Inc.,
9.750% 06/01/16 460 483
Sprint Spectrum LP,
stepped coupon, (12.500% 08/15/01)
(c) 08/15/06 500 470
TeleCorp PCS, Inc.,
stepped coupon, (11.625% 04/15/04)
(c) 04/15/09 (a) 650 426
UbiquiTel Operating Co.,
stepped coupon (14.000%, 04/15/05)
(c) 04/15/10 150 83
Williams Communications Group, Inc.,
10.875% 10/01/09 515 516
WinStar Equipment Corp.,
12.500% 04/15/08 (a) 175 163
Worldwide Fiber, Inc.,
12.000% 08/01/2009 175 162
---------
6,646
---------
WATER TRANSPORTATION - 0.2%
Azurix Corp.,
10.750% 02/15/10 (a) 260 229
---------
TOTAL CORPORATE FIXED-INCOME
BONDS & NOTES (cost of $47,896) 39,122
---------
U.S. GOVERNMENT & AGENCIES OBLIGATIONS - 27.6%
-----------------------------------------------------------------------------
Government National Mortgage Association:
9.000% 2016 883 915
10.500% 2015-2020 90 98
11.000% 2018-2019 583 637
---------
1,650
---------
Federal Home Loan Mortgage Corp.,
6.468% 09/07/00 500 500
---------
U.S. Treasury Bond:
8.750% 05/15/17 1,675 2,073
11.625% 11/15/04 (d) 12,090 14,376
12.000% 08/15/13 (d) 5,952 7,926
---------
24,375
---------
U.S. Treasury Note:
8.875% 02/15/19 896 1,133
11.875% 11/15/03 500 578
---------
1,711
---------
Student Loan Marketing Association,
6.248% 11/16/00 1,100 1,100
---------
TOTAL U.S. GOVERNMENT & AGENCY
OBLIGATIONS (cost of $31,700) 29,336
---------
FOREIGN GOVERNMENT &
AGENCY OBLIGATIONS - 25.0% CURRENCY
-----------------------------------------------------------------------------
Government of Mexico,
11.375% 09/15/2016 (e) 908 978
Hellenic Republic:
8.600% 03/26/08 GD 346,000 1,104
8.800% 06/19/07 GD 190,000 606
8.900% 03/21/04 GD 287,000 869
Kingdom of Norway:
9.500% 10/31/02 NK 14,305 1,713
6.750% 01/15/07 NK 5,920 685
Kingdom of Sweden,
10.250% 05/5/03 SK 7,600 964
Poland Government Bond,
8.500% 10/12/04 PZ 5,100 929
Republic of South Africa:
9.125% 05/19/09 SR 400 374
12.000% 02/28/05 SR 2,335 314
13.000% 08/31/10 SR 1,140 151
Republic of Argentina:
11.250% 04/10/06 (f) DM 1,200 607
11.375% 01/30/17 (g) 2,335 2,016
Republic of Brazil:
10.125% 05/15/27 (h) 1,775 1,336
12.750% 01/15/20 (h) 945 862
14.500% 10/15/09 (h) 875 896
Republic of Bulgaria,
6.500% 07/28/11 (i) 1,500 1,112
Republic of Colombia,
11.750% 02/25/20 (j) 800 624
Republic of Turkey:
11.875% 11/05/04 (k) 710 728
12.375% 06/15/09 (k) 855 889
Republic of Venezuela,
9.250% 09/15/27 (l) 907 565
Russian Federation,
11.000% 07/24/18 (m) 2,940 1,999
United Kingdom,
10.000% 09/08/03 KB 1,355 2,263
United Mexican States Global,
8.625% 03/12/08 (n) DM 1,577 1,451
United Mexican States,
10.375% 01/29/03 (o) 1,210 622
Western Australia Treasury:
10.000% 07/15/05 A$ 1,485 973
12.000% 08/01/01 A$ 1,536 934
---------
TOTAL FOREIGN GOVERNMENT & AGENCY
OBLIGATIONS (cost of $27,057) 26,564
---------
TOTAL BONDS & NOTES (cost of $106,653) 95,022
---------
PREFERRED STOCKS - 3.5% SHARES
-----------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 3.5%
BROADCASTING - 0.4%
Granite Broadcasting Corp.,
12.750% PIK (p) 137
PriMedia, Inc., 9.200% 3 273
---------
410
---------
CABLE - 0.5%
CSC Holdings Limited,
11.125% PIK 5 579
---------
COMMUNICATIONS - 0.1%
Dobson Communication Corp.,
12.250% PIK 107
---------
TELECOMMUNICATION - 2.5%
Concentric Network Corp.,
13.000% PIK 1 612
Nextel Communications, Inc.:
11.125% PIK 1 564
13.000% PIK 1 1,441
---------
2,617
---------
TOTAL PREFERRED STOCKS
(cost of $4,029) 3,713
---------
WARRANTS (q) - 0.2%
-----------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 0.2%
COMMUNICATION
Clearnet Communications, Inc.,
(expires 09/15/05) 2 69
---------
TELECOMMUNICATION
Airgate-PCS (expires 10/01/09) (p) 16
Carrier 1 International
(expires 02/19/09) (p) 82
MetroNet Communications Corp.
(expires 08/15/07) (a) (p) 27
---------
125
---------
TOTAL WARRANTS (cost of $48) 194
---------
COMMON STOCK - 0.3% SHARES VALUE
-----------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATION, ELECTRIC,
GAS & SANITARY SERVICES - 0.3%
MOTOR FREIGHT & WAREHOUSING - 0.0%
St. Johnsbury Trucking Co. (r) 16 $ (p)
Sun Carriers, Inc. (r) 65 (p)
---------
(p)
---------
TELECOMMUNICATION - 0.3%
Price Communications Corp. 12 280
---------
TOTAL COMMON STOCKS
(cost of $336) 280
---------
TOTAL INVESTMENTS
(cost of $111,066) (s) 99,209
---------
SHORT-TERM OBLIGATIONS - 6.2% PAR
-----------------------------------------------------------------------------
Repurchase agreement with SBC Warburg Ltd.,
dated 05/31/00, due 06/01/ 00 at
6.360%, collateralized by U.S. Treasury
notes with various maturities to 2027,
market value $6,742 (repurchase proceeds $6,603) $6,602 6,602
---------
FORWARD CURRENCY CONTRACTS (t) - 0.0% (13)
-----------------------------------------------------------------------------
OTHER ASSETS & LIABILITIES, NET - 0.3% 378
-----------------------------------------------------------------------------
NET ASSETS - 100.0% $ 106,176
---------
NOTES TO INVESTMENT PORTFOLIO:
-----------------------------------------------------------------------------
(a) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At May 31, 2000,
the value of these securities amounted to $3,061 or 2.9% of net assets.
(b) This is a British security. Par amount is stated in U.S. dollars.
(c) Currently zero coupon. Shown parenthetically is the next interest rate to be
paid and the date the Trust will begin accruing this rate.
(d) These securities, or a portion thereof, with a total market value of $8,894
are being used to collateralize the forward currency contracts shown below.
(e) This is a Mexican security. Par amount is stated in U.S. dollars.
(f) This is an Argentinean security. Par amount is stated in German
Deutschemarks.
(g) This is an Argentinean security. Par amount is stated in U.S. dollars.
(h) This is a Brazilian security. Par amount is stated in U.S. dollars.
(i) This is a Bulgarian security. Par amount is stated in U.S. dollars.
(j) This is a Colombian security. Par amount is stated in U.S. dollars.
(k) This is a Turkish security. Par amount is stated in U.S. dollars.
(l) This is a Venezuelan security. Par amount is stated in U.S. dollars.
(m) This is a Russian security. Par amount is stated in U.S. dollars.
(n) This is a Mexican security. Par amount is stated in German Deutschemarks.
(o) This is a Mexican security. Par amount is stated in U.S. dollars.
(p) Rounds to less than one.
(q) Non-income producing.
(r) Represents fair value as determined in good faith under the direction of the
Trustees.
(s) Cost for federal income tax purposes is the same.
(t) As of May 31, 2000, the Trust had entered into the following forward
currency exchange contracts:
NET UNREALIZED
APPRECIATION
CONTRACTS IN EXCHANGE (DEPRECIATION)
TO DELIVER FOR SETTLEMENT DATE (U.S.$)
--------------------------------------------------------------------------
EU 1,343 US$ 1,264 08/08/00 $ (75)
EU 1,342 US$ 1,260 06/26/00 19
KB 1,971 US$ 2,961 08/08/00 46
KR 11,083 US$ 1,251 07/26/00 25
SK 7,800 US$ 964 06/30/00 8
NZ 5,078 US$ 1,412 06/09/00 75
NZ 3,078 US$ 1,412 06/09/00 (111)
-----
$ (13)
-----
SUMMARY OF SECURITIES
BY COUNTRY COUNTRY VALUE % OF TOTAL
--------------------------------------------------------------------------
United States $72,645 73.3
Brazil Bz 3,094 3.2
Mexico Mx 3,051 3.1
Greece Gr 2,579 2.6
Argentina Ar 2,623 2.6
Norway No 2,398 2.4
United Kingdom UK 2,263 2.3
Russia Ru 1,999 2.0
Australia Au 1,907 2.0
Turkey Tu 1,617 1.6
Bulgaria Bu 1,112 1.1
Sweden Sw 964 0.9
Poland Po 929 0.9
South Africa SA 839 0.8
Colombia Co 624 0.6
Venezuela Ve 565 0.6
------- -----
$99,209 100.0
======= =====
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
ACRONYM NAME
------------------- ---------------------------
A$ Australian Dollar
Eu Euro
DM German Deutschemarks
GD Greek Drachmas
NK Norwegian Kroner
PIK Payment-In-Kind
PZ Polish Zloty
SR South African Rand
SK Swedish Kroner
See notes to financial statements.
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
May 31, 2000
(Unaudited)
(In thousands except for per share amounts)
ASSETS
Investments at value (cost $111,066) $ 99,209
Short-term obligations 6,602
--------
105,810
Cash including foreign currencies
(cost of $1,014) $ 983
Unrealized appreciation on forward currency contracts 98
Receivable for:
Interest 2,418
Investments sold 66
Dividends 22
Other 77 3,663
------ --------
Total assets 109,473
LIABILITIES
Cash including foreign currencies
(cost of $1,010) 980
Unrealized depreciation on forward currency contracts 111
Payable for:
Investments purchased 1,117
Distributions 816
Accrued:
Management fee 66
Bookkeeping fee 3
Deferred Trustees' fees 5
Other 200
------
Total liabilities 3,298
--------
NET ASSETS at value for 11,009 shares of beneficial
interest outstanding $106,176
========
Net asset value per share $ 9.64
========
COMPOSITION OF NET ASSETS
Capital paid in $122,280
Undistributed net investment income 136
Accumulated net realized loss (4,340)
Net unrealized appreciation/ depreciation on:
Investments (11,857)
Foreign currency transactions (43)
========
$106,176
========
See notes to financial statements.
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
For the Six Months Ended May 31, 2000
(Unaudited)
(In thousands
INVESTMENT INCOME
Interest $ 5,309
Dividends 235
-------
5,544
EXPENSES
Management fee $ 414
Bookkeeping fee 16
Transfer agent fee 28
Trustees fee 6
Custodian fee 12
Audit fee 14
Legal fee 3
Reports to shareholders 5
Other 38 536
------- ------
Net Investment Income 5,008
------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON PORTFOLIO POSITIONS
Net realized gain
(loss) on:
Investments (2,745)
Foreign currency transactions 306
-------
Net Realized Loss (2,439)
Net change in unrealized appreciation/depreciation
during the period on:
Investments (4,434)
Foreign currency transactions (75)
-------
Net Change in Unrealized Appreciation/Depreciation (4,509)
-------
Net Loss (6,948)
-------
Decrease in Net Assets from Operations $(1,940)
=======
See notes to financial statements.
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
(In thousands
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
MAY 31, NOVEMBER 30,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $ 5,008 $ 10,005
Net realized loss (2,439) (1,828)
Net change in unrealized appreciation/depreciation (4,509) (7,711)
-------- ---------
Net Increase (Decrease) from Operations (1,940) 466
DISTRIBUTIONS
From net investment income (4,889) (9,951)
-------- ---------
Total Decrease (6,829) (9,485)
NET ASSETS
Beginning of period 113,005 122,490
-------- ---------
End of period (including undistributed net investment income of
$136 and $17, respectively) $106,176 $113,005
======== ========
NUMBER OF TRUST SHARES
Outstanding at end of period 11,009 11,009
-------- ---------
</TABLE>
See notes to financial statements.
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
May 31, 2000 (Unaudited)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of management of Colonial InterMarket Income Trust I (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 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 seek as high a level
of current income and total return as is consistent with prudent risk, by
diversifying investments primarily in U.S. and foreign government and
lower-rated corporate debt 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 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.
Equity securities generally are valued at the last sale price or, in the case of
unlisted or listed securities for which there were no sales during the day, at
current quoted bid prices.
Forward currency contracts are valued based on the weighted value of the
exchange traded contracts with similar durations.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
The value of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates.
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
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 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; premium and market discount are not amortized or
accreted.
The value of additional securities received as an interest payment is recorded
as income and as the cost basis of such securities.
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.
FOREIGN CURRENCY TRANSACTIONS:
Net realized and unrealized gains (losses) on foreign currency transactions
includes gains (losses) arising from the fluctuation in exchange rates between
trade and settlement dates on securities transactions, gains (losses) arising
from the disposition of foreign currency and currency gains (losses) between the
accrual and payment dates on dividends, interest income and foreign withholding
taxes.
The Trust does not distinguish that portion of gains (losses) on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included with
the net realized and unrealized gains (losses) on investments.
FORWARD CURRENCY CONTRACTS
The Trust may enter into forward currency contracts to purchase or sell foreign
currencies at predetermined exchange rates in connection with the settlement of
purchases and sales of securities. The Trust may also enter into forward
currency contracts to hedge certain other foreign currency denominated assets.
The contracts are used to minimize the exposure to foreign exchange rate
fluctuations during the period between trade and settlement date of the
contracts. All contracts are marked-to-market daily, resulting in unrealized
gains and losses which become realized at the time the forward currency
contracts are closed or mature. Realized and unrealized gains (losses) arising
from such transactions are included in net realized and unrealized gains
(losses) on foreign currency transactions. Forward currency contracts do not
eliminate fluctuations in the prices of the Trust's portfolio securities. While
the maximum potential loss from such contracts is the aggregate face value in
U.S. dollars at the time the contract was opened, exposure is typically limited
to the change in value of the contract (in U.S. dollars) over the period it
remains open. Risks may also arise if counterparties fail to perform their
obligations under the contracts.
OTHER
Corporate actions are recorded on the ex-date (except for certain foreign
securities which are recorded as soon after ex-date as the Trust becomes aware
of such), net of nonreclaimable tax withholdings. Where a high level of
uncertainty as to collection exists, income on securities is recorded net of all
tax withholdings with any rebates recorded when received.
The Trust's custodian takes possession through the federal book-entry system of
securities collateralizing repurchase agreements. Collateral is marked-to-
market daily to ensure that the market value of the underlying assets remains
sufficient to protect the Trust. The Trust may experience costs and delays in
liquidating the collateral if the issuer defaults or enters bankruptcy.
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 0.75% 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 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 $24,564,168 and $25,158,559,
respectively, of which $1,166,900 and $1,217,048, respectively, were U.S.
government securities.
Unrealized appreciation (depreciation) at May 31, 2000, based on cost of
investments for federal income tax purposes was:
Gross unrealized appreciation $ 1,572,231
Gross unrealized depreciation (13,429,253)
------------
Net unrealized depreciation $(11,857,022)
============
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 CAPITAL LOSS
EXPIRATION CARRYFORWARD
---------- ------------
2006 $ 58,000
2007 1,621,000
----------
$1,679,000
==========
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 additional risks involved when investing in foreign securities
that are not inherent with investments in domestic securities. These risks may
involve foreign currency exchange rate fluctuations, adverse political and
economic developments and the possible prevention of currency exchange or the
imposition of other foreign governmental laws or restrictions.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
NOTE 5. RESULTS OF ANNUAL SHAREHOLDER
MEETING
On May 24, 2000, the Annual Meeting of Shareholders of the Trust was held to
elect five Trustees, 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 Trust had outstanding
11,009,000 shares of beneficial interest. The votes cast at these Meetings were
as follows:
Election of five Trustees:
AUTHORITY
FOR WITHHELD
--- --------
Tom Bleasdale 9,812,691 262,475
John V. Carberry 9,857,164 218,003
Lora S. Collins 9,859,914 215,253
Salvatore Macera 9,849,030 226,136
John J. Neuhauser 9,864,334 210,833
The Board of Trustees also consists of James E. Grinnell, Richard L. Lowry,
William E. Mayer, James L. Moody, Jr., Thomas E. Stitzel and Anne-Lee
Verville.
Ratification of the selection of PricewaterhouseCoopers LLP:
FOR AGAINST ABSTAIN
--- ------- -------
9,896,670 51,193 127,304
<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
MAY 31, YEAR ENDED NOVEMBER 30
---------- ----------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 10.260 $ 11.130 $ 11.450 $ 11.520 $ 11.270 $ 10.410
--------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.454 0.909 0.945 0.911 1.003 0.986
Net realized and unrealized
gain (loss) (0.630) (0.875) (0.251) (0.004) 0.242 0.822
--------- --------- --------- --------- --------- ---------
Total from Investment
Operations (0.176) 0.034 0.694 0.907 1.245 1.808
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS DECLARED
TO SHAREHOLDERS
From net investment income (0.444) (0.904) (0.930) (0.977) (0.995) (0.948)
In excess of net investment
income -- -- (0.002) -- -- --
From net realized gains -- -- (0.028) -- -- --
In excess of net realized
gains -- -- (0.054) -- -- --
--------- --------- --------- --------- --------- ---------
Total Distributions
Declared to Shareholders (0.444) (0.904) (1.014) (0.977) (0.995) (0.948)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 9.650 $ 10.260 $ 11.130 $ 11.450 $ 11.520 $ 11.270
--------- --------- --------- --------- --------- ---------
Market Price Per Share, End
of Period $ 8.000 $ 8.312 $ 10.562 $ 10.940 $ 10.630 $ 10.750
========= ========= ========= ========= ========= =========
Total return, based on market
value (a) 1.63%(b) (13.51)% 6.26% 12.62% 8.30% 17.67%
========= ========= ========= ========= ========= =========
RATIOS TO AVERAGE NET ASSETS
Expenses (c) 0.97%(d) 1.00% 0.93% 0.96% 0.95% 0.97%
Net investment income (c) 9.07%(d) 8.51% 8.22% 8.06% 8.33% 8.73%
Portfolio turnover 22%(b) 52% 99% 154% 117% 77%
Net assets at end of period
(000) $106,176 $113,005 $122,490 $126,011 $126,835 $124,097
(a) Total return at market value assuming all distributions reinvested and excluding brokerage commissions.
(b) Not annualized.
(c) The benefits derived from custody credits and directed brokerage arrangements had no impact.
(d) Annualized.
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
--------------------------------------------------------------------------------
As a shareholder in the Fund you are eligible to participate in the Dividend
Reinvestment Plan.
The Fund generally distributes net investment income monthly and capital gains
annually. Under the Fund's Dividend Reinvestment Plan (the "Plan") all
distributions will be reinvested automatically in additional shares of the Fund,
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 the 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. The aggregate market
value of the shares may constitute income to shareholders for federal income tax
purposes. However, if the market price of the 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.
All Plan accounts receive written confirmations of all transactions. Shares
purchased under the Plan are held in uncertificated form. 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.
Fees and expenses of the Plan other than brokerage charges will be paid by the
Fund. No brokerage charges are incurred on shares issued directly by the Fund.
Participants will bear a pro-rata share of brokerage charges incurred on open
market purchases.
A Plan participant may terminate his or her participation by written notice to
the Plan agent. The Plan may be amended or terminated on 30 days written notice
to the Plan participants. All correspondence concerning the Plan should be
directed to State Street Bank and Trust Company, the Plan agent, by mail at P.O.
Box 8200, Boston, MA 02266-8200 or by phone at 1-800-426-5523.
TRANSFER AGENT
--------------------------------------------------------------------------------
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial InterMarket Income Trust I is:
State Street Bank and Trust Company
P.O. Box 8200
Boston, MA 02266-8200
1-800-426-5523
Colonial InterMarket Income Trust I 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 InterMarket Income
Trust I.
<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 (former Dean,
Boston College School of Management)
THOMAS E. STITZEL
Professor of Finance, College of Business, Boise State University; Business
Consultant and Author
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
-----------------------------------------------------
COLONIAL INTERMARKET INCOME TRUST I SEMIANNUAL REPORT
-----------------------------------------------------
198-03/860B-0600 (7/00) 00/1189
