Putnam
Investment
Grade
Municipal
Trust
Annual
Report
November 30, 1993
For investors seeking
high current income
free from federal
income tax, consistent
with preservation
of capital
Contents
2 How your fund performed
3 From the Chairman
4 Report from Putnam Management
Annual Report
6 Report of Independent
Accountants
7 Portfolio of investments owned
12 Financial statements
22 Fund performance supplement
23 Your Trustees
A member
of the Putnam
Family of Funds
<PAGE>
How your
fund performed
For periods ended November 30, 1993
<TABLE>
<CAPTION>
Total return*
Lehman Bros.
(common shares) Fund Market Municipal
NAV price Bond Index
-------------------------------------------------------------------
<S> <C> <C> <C>
1 year 16.85% 13.54% 11.09%
3 years 52.70 55.95 34.77
annualized 15.15 15.97 10.46
Life-of-fund 63.41 58.31 47.67
(annualized since 10/26/89) 12.66 11.86 9.92
-------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------------------------------------------------
Share data (common shares) NAV Market price
---------------------------------------------------
<S> <C> <C>
November 30, 1992 $ 12.36 $13.250
November 30, 1993 $ 13.44 $14.000
---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
Distributions (a)
(common shares) Investment Capital
12 months ended Number income gains Total
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
November 30, 1993 12 $0.96 -- $0.96
-----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------------------------
Number
(preferred shares) Investment Capital
Series A Income Gains Total
- --------------------------------------------------------------
<S> <C> <C> <C>
1.400 2,265.95 393.63 $2,659.58
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Taxable equivalents+
Current returns
at the end of the period Market Market
(Common shares) NAV price NAV price
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Current dividend rate 7.14% 6.86% 11.82% 11.36%
--------------------------------------------------------------------
</TABLE>
*Performance data represent past results. Investment return, market price and
net asset value will fluctuate so an investor's shares, when sold, may be
worth more or less than their original cost.
(a) Capital gains, if any, are taxable, and income from this fund may be
subject to state and local taxes. For some investors, investment income may
also be subject to the alternative minimum tax.
+Taxable equivalent rates cited assume the maximum federal tax rate of 39.6%.
Results for investors subject to lower tax rates would not be as
advantageous, although many such investors would have the opportunity to
receive attractive tax benefits from a fund investment. Consult your tax
advisor for more guidance.
Terms you need to know
Total return is the change in value of an investment from the beginning to
the end of a period, assuming the reinvestment of all distributions. It may
be shown at net asset value or at market price.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, the liquidation preference and cumulative undeclared dividends
on the remarketed preferred shares, divided by the number of outstanding
common shares. (See Note 1b).
Market price is the current trading price of one share of the fund. Market
prices are set by transactions between buyers and sellers on the New York
Stock Exchange.
Current dividend rate is calculated by annualizing the income portion of the
fund's most recent distribution and dividing by the NAV or market price on
the last day of the period.
Taxable equivalent return is the rate at which a taxable investment would
have to generate income to equal the fund's current dividend rate.
Please see the fund performance supplement on page 22 for additional
information about performance comparisons.
<PAGE>
From the
Chairman
[George Putnam photo]
George Putnam
Chairman of the Trustees
(C) Karsh, Ottawa
Dear Shareholder:
For the 12 months ended November 30, 1993, Putnam Investment Grade Municipal
Trust handed in impressive performance results. For the period, the fund
provided a total return of over 16% at net asset value, assuming reinvestment
of all distributions. Your fund's performance significantly outpaced that of
the Lehman Brothers Municipal Bond Index, which provided a return of just
over 11% for the same period.
Your fund's performance record has not gone unnoticed. Lipper Analytical
Services, an industry ranking agency, ranked your fund #1 out of 20 similar
funds for the three-year period ended November 30, 1993. Credit for this
performance is due, at least in part, to intensive and on-going
research-driven analysis by Putnam's team of professionals.
Additionally, conditions in the municipal bond market have been exceptional
for the last couple of years. As your fund's manager, William H. Reeves, will
discuss in the Report from Putnam Management that follows, this and several
other important factors are making tax-exempt investing more attractive than
ever. I am confident that Bill will continue to position the fund to take
full advantage of this favorable environment.
Respectfully yours,
[George Putnam signature]
George Putnam
January 19, 1994
<PAGE>
Report from
Putnam Management
In seeking high current income consistent with capital preservation, Putnam
Investment Grade Municipal Trust concentrates on municipal securities that
are considered investment grade -- those rated BBB or better by nationally
recognized rating services such as Fitch Investors Service, Inc. and Standard
& Poor's(r).
Thanks to several factors, including favorable market conditions for these
securities, your fund's performance during the last 12 months has been
exceptional. Total return at net asset value was 16.85%, assuming
reinvestment of all distributions. Each of the factors that contributed to
your fund's performance warrants explanation.
Attractive municipal market The tax-exempt securities market as a whole has
provided very strong returns over the last year. A slowly recovering economy,
coupled with low interest rates and low inflation, has helped boost the
performance of tax-exempt securities and your fund's holdings. One reason for
this is that as interest rates decline, the value of all bonds, including
tax-exempt bonds, increases.
Additionally, more and more investors are looking for ways to shelter their
investment income from higher taxes. Tax-exempt bond investments continue to
be one of the few ways for investors to reduce their tax bill. The demand for
municipal bonds has, therefore, continued to exceed the supply, and we
believe it will continue to do so in the coming months.
Benefits of leverage We have carefully managed the use of leverage to help
boost the fund's returns. By issuing and selling preferred shares of the fund
to institutional, short-term investors, we have been able to reinvest the
proceeds in longer-term, higher-paying bonds. A portion of the income
generated from these higher-paying bonds is then distributed to holders of
common shares, which can enhance their monthly dividend level.
We believe that positive conditions in the municipal securities market and
the expectation for continued slow economic growth will continue to make the
use of leverage attractive for your fund. Of course, we are continually
monitoring the impact of these strategies on the fund's portfolio, and will
use them selectively and appropriately, considering market conditions.
Remaining fully invested We continue to stress the importance of keeping at
least 99% of the fund's assets invested in tax-exempt bonds. We believe that,
under current market conditions, maintaining a significant portion of the
fund's holdings in cash or other investments would deprive the fund of income
benefits now available.
Currently, your fund's portfolio holds a broad range of securities from
issuers across the country and in different municipal sectors that include
housing, electric power, hospitals, education, water and sewer, and
transportation. So while we believe that staying fully invested in the
tax-exempt securities market is important, we realize the advantage of
diversifying assets among a range of quality, tax-exempt holdings.
Active call protection One of our most important tools for preserving and
enhancing the fund's income stream over time remains to be active call
protection. By taking advantage of the market's current supply and demand
imbalance, we have been able to replace bonds with approaching call dates --
the ones most likely to be called in by issuers refinancing at lower rates --
with bonds having later call dates, which offer better yields over a longer
period. Therefore, while there has been talk of a municipal bond "call
problem," your fund is turning this into an opportunity to enhance the value
of your shares.
Looking ahead All of the factors we have discussed here have contributed to
the fund's strong total return--the result of both attractive income and
appreciation in the value of the fund's holdings.
We believe that the current low rate of inflation coupled with slow economic
growth will continue for several months. Additionally, we expect the demand
for tax-exempt securities to continue to outpace supply. Many analysts are
predicting a sharp drop in supply of municipal bonds over the next year, an
expectation we share. In the coming months, we will continue to monitor the
tax-exempt market and position your fund accordingly.
[Bar chart]
Top industry sectors
(based on net assets as of 11/30/93)
Utilities 26.8%
Hospitals/Healthcare 11.8%
Transportation 10.2%
Housing 7.4%
Education 6.5%
[End Bar Chart]
<PAGE>
Putnam
Investment
Grade
Municipal
Trust
Annual Report
For the Year Ended November 30, 1993
Report of Independent Accountants
To the Trustees and Shareholders of
Putnam Investment Grade Municipal Trust
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments owned (except for bond ratings), and
the related statements of operations and of changes in net assets and the
financial highlights present fairly, in all material respects, the financial
position of Putnam Investment Grade Municipal Trust (the "Fund") at November
30, 1993, and the results of its operations, the changes in its net assets,
and the financial highlights for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted
our audits of these financial statements in accordance with generally
accepted auditing standards, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of investments owned at
November 30, 1993 by correspondence with the custodian and brokers and the
application of alternative auditing procedures where confirmations from
brokers were not received, provide a reasonable basis for the opinion
expressed above.
Price Waterhouse
Boston, Massachusetts
January 12, 1994
<PAGE>
Portfolio of
investments owned
November 30, 1993
Municipal Bonds and Notes (102.1%)(a)
<TABLE>
<CAPTION>
Principal Amount Ratings(b) Value
- ---------------------------------------------------------------------------------------------- ------------- --------------
<S> <C> <C> <C>
Alabama (1.8%)
$ 5,500,000 Gadsden East, Med. Clinic Board Rev. Bonds (Baptist Hosp. of Gadsden Inc.),
Ser. A, 7.8s, 11/1/21 BBB $ 6,125,623
1,000,000 Mobile, Arpt. Auth. Rev. Bonds 11-1/4s, 10/1/14 BBB 1,085,000
--------------------------------------------------------------------------------------------------------------------------------
7,210,623
--------------------------------------------------------------------------------------------------------------------------------
Arizona (0.6%)
2,500,000 Maricopa Cnty., School Dist. No. 48 Rev. Bonds Ser. B, 4.6s, 7/1/11 AA 2,278,125
--------------------------------------------------------------------------------------------------------------------------------
California (18.5%)
5,000,000 CA State Pub. Works Board Lease Rev. Bonds (Dept. of Corrections-State
Prisons), Ser. A, American Municipal Bond Assurance Corp. (AMBAC) 5-1/4s,
12/1/07 AAA 5,043,750
8,400,000 CA State U. Residual Interest Bonds (RIBS) AMBAC, 10.888s, 11/1/21 (acquired
8/5/91, cost $8,592,696)(c) AAA 10,500,000
Los Angeles Cnty., Pub. Works Fin. Auth. Lease Rev. Bonds (Multi. Cap. Facs.
Project), Municipal Bond Insurance Assn. (MBIA)
5,000,000 5-1/4s, 12/1/16(d) AAA 4,806,250
9,500,000 4-3/4s, 12/1/10(d) AAA 8,870,625
1,580,000 Los Angeles, Regl. Arpts. Impt. Corp. Rev. Bonds (Western Airlines-Delta
Airlines), 11-1/4s, 11/1/25 Baa 1,815,025
$ 6,700,000 Metropolitan Wtr. Dist. RIBS 10.393s, 7/1/18 (acquired 8/5/91, cost
$6,566,000)(c) AA $ 8,818,875
5,000,000 Northern CA Transmission Rev. Bonds (CA-OR Transmission), Ser. A, MBIA, 5.1s,
5/1/06 AAA 5,025,000
5,500,000 Orange Cnty., Sanitation Dist. Certif. of Participation Variable Rate Demand
Notes (VRDN) 1.7s, 8/1/15 VMIG1 5,500,000
5,000,000 Poway, Redev. Agcy. Tax Alloc. Rev. Bonds (Paraguay Redev. Project),
Financial Guaranty Insurance Company (FGIC), 5-1/2s, 12/15/23 AAA 4,900,000
San Diego Cnty., Regl. Trans. Comm. Sales Tax Rev. Bonds, Ser. A-2, FGIC
4,000,000 5-1/4s, 4/1/07 AAA 4,025,000
3,000,000 5-1/4s, 4/1/06 AAA 3,045,000
7,000,000 Southern CA Pub. Pwr. Auth. Rev. Bonds (Transmission Project), 5-1/2s, 7/1/20 AA 6,781,250
5,000,000 U. of CA Rev. Bonds (USCD Med. Ctr. Satellite Fac.), 7.9s, 12/1/19 (acquired
3/2/92, cost $5,229,150)(c) BBB 5,600,000
--------------------------------------------------------------------------------------------------------------------------------
74,730,775
--------------------------------------------------------------------------------------------------------------------------------
Colorado (2.7%)
10,000,000 Denver, City & Cnty. Arpt. Rev. Bonds Ser. D, 7-3/4s, 11/15/21 BBB 11,137,500
- --------------------------------------------------------------------------------------------------------------------------------
Florida (2.1%)
$ 6,375,000 Jacksonville, Port Auth. Indl. Dev. Poll. Control Rev. Bonds
(FL Pwr. & Lt. Co. Project), 11-3/8s, 5/1/19 A $ 6,757,500
1,500,000 Tampa, Wtr. & Swr. floating rate notes,
Ser. A, FGIC, 3.34s, 10/1/12 AAA 1,582,500
--------------------------------------------------------------------------------------------------------------------------------
8,340,000
--------------------------------------------------------------------------------------------------------------------------------
Georgia (5.1%)
Burke Cnty., Dev. Auth. Poll. Control Rev. Bonds (Oglethorpe Pwr.
Corp.-Vogtle Project),
1,600,000 9-7/8s, 1/1/10 AA 1,730,000
3,800,000 10-1/2s, 1/1/14 AA 3,895,000
10,000,000 Burke Cnty., Dev. Auth. Poll. Control VRDN (Oglethorpe Pwr. Corp.-Vogtle
Project), 2.1s, 1/1/16 VMIG1 10,000,000
4,800,000 De Kalb Cnty., Hsg. Auth. Muni. Rev. Bonds (Briarcliff Pk. Apts. Project),
Ser. A, 7-1/2s, 4/1/17 A/P 4,938,000
--------------------------------------------------------------------------------------------------------------------------------
20,563,000
--------------------------------------------------------------------------------------------------------------------------------
Hawaii (1.3%)
4,500,000 HI State Dept. of Budget & Fin. Mtge. RIBS (Citizens Util. Co.), Ser. 91-B,
10.4s, 11/1/21 AAA 5,310,000
--------------------------------------------------------------------------------------------------------------------------------
Illinois (2.4%)
1,800,000 IL Dev. Fin. Auth. Poll. Control Rev. Bonds (Cmnwlth. Edison Co. Project),
10-5/8s, 3/1/15 BBB 1,968,750
8,000,000 IL State Sales Tax Rev. Bonds Ser. S, 5s, 6/15/08 AAA 7,730,000
--------------------------------------------------------------------------------------------------------------------------------
9,698,750
--------------------------------------------------------------------------------------------------------------------------------
Louisiana (2.2%)
$ 5,000,000 Lake Charles, Harbor & Term. Dist. Port Fac. Rev. Bonds (Trunkline Co.
Project), 7-3/4s, 8/15/22 Ba $ 5,712,500
3,000,000 West Feliciana, Poll. Control Rev. Bonds (Gulf States Util. Co. Project),
7.7s, 12/1/14 BBB 3,416,250
--------------------------------------------------------------------------------------------------------------------------------
9,128,750
--------------------------------------------------------------------------------------------------------------------------------
Maryland (2.1%)
5,000,000 Baltimore Cnty., RIBS 10.377s, 7/1/16 (acquired 12/17/91, cost $5,062,500)(c) AAA 6,112,500
2,000,000 MD State Hlth. & Higher Edl. Fac. Auth. Rev. Bonds (Doctors Cmnty. Hosp.),
8-3/4s, 7/1/12 BBB 2,507,500
--------------------------------------------------------------------------------------------------------------------------------
8,620,000
--------------------------------------------------------------------------------------------------------------------------------
Massachusetts (10.6%)
5,000,000 MA Indl. Fin. Agcy. Rev. Bonds (Cape Cod Hlth. Syst.), 8-1/2s, 11/15/20 AAA 6,237,500
MA State Cons. Loan General Obligation (G.O.) Bonds
6,000,000 Ser. D, 6s, 7/1/12 A 6,165,000
12,000,000 Ser. A, 6s, 6/1/11 A 12,330,000
15,000,000 MA State Wtr. Resource Auth. Rev. Bonds Ser. A, 7-5/8s, 4/1/14 AAA 17,737,500
--------------------------------------------------------------------------------------------------------------------------------
42,470,000
--------------------------------------------------------------------------------------------------------------------------------
Michigan (4.4%)
2,000,000 Detroit, Dev. Fin. Auth. Tax Increment Rev. Bonds Ser. A, 9-1/2s, 5/1/21 BBB/P 2,482,500
$ 1,690,000 Highland Park, Hosp. Fin. Auth. Fac. Rev. Bonds (MI Hlth. Care Corp.
Project), Ser. A, 9-3/4s, 12/1/06 B $ 1,789,288
3,900,000 MI State Hosp. Fin. Auth. Rev. Bonds (Henry Ford Hosp.), Ser. A
10-1/2s, 5/1/08 AA 4,089,638
3,000,000 MI State Strategic Fund Ltd. Oblig. Rev. Bonds (Mercy Svcs. for Aging
Project), 9.4s, 5/15/20 BBB/P 3,292,500
5,435,000 Monroe Cnty., Poll. Control Rev. Bonds (Detroit Edison Co.), Ser. A,
10-1/2s, 12/1/16 BBB 6,223,075
--------------------------------------------------------------------------------------------------------------------------------
17,877,001
--------------------------------------------------------------------------------------------------------------------------------
Minnesota (0.2%)
900,000 Hutchinson, Indl. Dev. VRDN (Hutchinson Tech. Inc. Project), 2.4s, 6/1/04 VMIG1 900,000
--------------------------------------------------------------------------------------------------------------------------------
Mississippi (1.5%)
4,950,000 Claiborne Cnty., Poll. Control Rev. Bonds (Middle South Energy Inc.), Ser. C,
9-7/8s, 12/1/14 BBB/P 6,094,688
--------------------------------------------------------------------------------------------------------------------------------
Missouri (0.3%)
1,000,000 MO State Hlth. & Edl. Fac. Auth. VRDN (Sisters of Mercy Project), 2.3s,
6/1/14 VMIG1 1,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
Nebraska (4.3%)
$ 3,500,000 NE Investment Fin. Auth. Single Fam. Mtge. RIBS, Ser. B, Government National
Mortgage Assn. (GNMA) Coll., 12.231s, 3/15/22 AAA $ 4,112,500
12,690,000 NE Investment Fin. Auth. Single Fam. Mtge. Rev. Bonds 1st Ser., GNMA Coll.,
MBIA, 8-1/8s, 8/15/38 AAA 13,467,263
--------------------------------------------------------------------------------------------------------------------------------
17,579,763
--------------------------------------------------------------------------------------------------------------------------------
Nevada (2.6%)
3,400,000 Clark Cnty., Arpt. Impt. VRDN Ser. A, MBIA, 2-1/4s, 7/1/12 VMIG1 3,400,000
6,500,000 Clark Cnty., Indl. Dev. Rev. Bonds (NV Pwr. Co. Project), 7.8s, 6/1/20 BBB 7,288,125
--------------------------------------------------------------------------------------------------------------------------------
10,688,125
--------------------------------------------------------------------------------------------------------------------------------
New York (8.1%)
NY City, G.O. Bonds
8,070,000 Ser. B, 7-1/2s, 2/1/04 A 9,139,275
15,735,000 Ser. B, 7s, 10/1/15 A 16,974,131
1,865,000 NY City, Hsg. Dev. Corp. Multi-Fam. Rev. Bonds Ser. 85-1, Federal Housing
Administration (FHA) Insd., 9-1/2s, 10/1/00 AA 1,955,919
4,000,000 NY State Energy Research & Dev. Auth. Poll. Control Rev. Bonds
(NY State Elec. & Gas Corp.), Ser. 84-A, 12s, 5/1/14 BBB 4,255,000
$ 1,125,000 Riverton Hsg. Corp. Mtge. Rev. Bonds (Conifer Genesee Apt.), FHA Insd.,
10-1/2s, 1/15/25 A $ 1,182,656
--------------------------------------------------------------------------------------------------------------------------------
33,506,981
--------------------------------------------------------------------------------------------------------------------------------
North Dakota (2.9%)
10,850,000 Mercer Cnty., Poll. Control Rev. Bonds (Basin Elec. Pwr. Coop.-Antelope),
AMBAC, 10-1/2s, 6/30/13 AAA 11,853,625
--------------------------------------------------------------------------------------------------------------------------------
Ohio (2.5%)
OH State Air Quality Dev. Auth. Poll. Control Rev. Bonds
3,600,000 (Cincinnati Gas & Elec.), 10-1/8s, 12/1/15 BBB 4,099,500
5,000,000 (Cleveland Co. Project), FGIC, 8s, 12/1/13 AAA 6,018,750
--------------------------------------------------------------------------------------------------------------------------------
10,118,250
--------------------------------------------------------------------------------------------------------------------------------
Oklahoma (1.7%)
Tulsa, Muni. Arpt. Trans Rev. Bonds (American Airlines, Inc.)
2,750,000 9-1/2, 6/1/20 BB 3,014,688
3,500,000 7-3/8s, 12/1/20 BBB 3,745,000
--------------------------------------------------------------------------------------------------------------------------------
6,759,688
--------------------------------------------------------------------------------------------------------------------------------
Pennsylvania (7.6%)
4,270,000 Allegheny Cnty., Res. Fin. Auth. Single Fam. Mtge. Rev. Bonds, GNMA Coll.,
7.9s, 6/1/11 AAA 4,547,550
2,500,000 Delaware Cnty., Indl. Dev. Auth. Arpt. Fac. VRDN (UPS Project), 1.8s, 12/1/15 A-1 2,500,000
4,500,000 Geisinger, Hlth. Syst. Rev. Muni. Cap. Bonds
Ser. A, 5.45s, 7/1/22 AA 4,786,875
$ 5,000,000 Montgomery Cnty., Indl. Dev. Auth. Resource Recvy. Rev. Bonds
7-1/2s, 1/1/12 A $ 5,506,250
7,600,000 PA State Higher Ed. Assistance Agcy. Student Loan RIBS
Ser. B, MBIA, 12.079s, 3/1/20 AAA 9,186,500
Philadelphia Wtr. & Swr. FGIC
3,000,000 5.2s, 6/15/05 AAA 3,033,750
3,000,000 4.8s, linked annuity 6/15/05 AAA 1,282,500
--------------------------------------------------------------------------------------------------------------------------------
30,843,425
--------------------------------------------------------------------------------------------------------------------------------
Tennessee (0.3%)
1,000,000 Metro. Nashville & Davidson Cnty., Hlth. & Edl. Fac. Rev. Bonds (Vanderbilt
U.), Ser. A, 10-1/2s, 12/1/14 A 1,090,000
--------------------------------------------------------------------------------------------------------------------------------
Texas (10.9%)
2,500,000 Bexar Cnty., Hlth. Fac. Dev. Corp. Rev. Bonds (St. Luke's Lutheran Hosp.
Project), 7.9s, 5/1/11 BBB 2,737,500
15,500,000 Dallas-Fort Worth, Intl. Arpt. Fac. Impt. Corp. Rev. Bonds (American
Airlines, Inc.), 7-1/2s, 11/1/25 BB 16,701,250
3,500,000 Dallas-Fort Worth, Regl. Arpt. Rev. Bonds
Ser. 84-A, 11s, 11/1/12 A 3,810,625
11,000,000 North Central TX Hlth. Fac. Dev. Corp. RIBS (Presbyterian Health Care Syst.),
Ser. C, MBIA, 10.495s, 6/15/21 AAA 12,705,000
$ 1,000,000 North Central TX Hlth. Fac. Dev. Corp. Rev. Bonds (U. Med. Ctr. Inc.
Project), 7-3/4s, 4/1/17 BBB/P $ 1,053,750
7,000,000 Northeast Hosp. Auth. Rev. Bonds (Northeast Med. Ctr. Hosp.),
Ser. B, FGIC, 7-1/4s, 7/1/22 BBB 7,376,250
--------------------------------------------------------------------------------------------------------------------------------
44,384,375
--------------------------------------------------------------------------------------------------------------------------------
Virginia (0.8%)
3,200,000 Winchester, Indl. Dev. Auth. Hosp. RIBS, AMBAC, 5.39s, 1/1/15 AAA 3,288,000
--------------------------------------------------------------------------------------------------------------------------------
Washington (4.6%)
1,000,000 Port Longview, Indl. Dev. Corp. Export Fac. Rev. Bonds (Atlantic Richfield
Co.), 10-3/4s, 9/1/12 A 1,026,250
WA State Pub. Pwr. Supply Syst. Rev. Bonds (Nuclear Project No. 1), Ser. A
4,860,000 7-1/2s prerefunded 7/1/15 AA 5,661,900
10,640,000 7-1/2s, 7/1/15 AA 11,943,400
--------------------------------------------------------------------------------------------------------------------------------
18,631,550
--------------------------------------------------------------------------------------------------------------------------------
Total Investments (cost $381,769,167)(e) $ 414,102,994
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Percentages indicated are based on total net assets of $405,670,181. Net
assets available to common shareholders are $265,629,948, which correspond to
a net asset value per common share of $13.44.
(b) The Moody's and Standard & Poor's ratings indicated are believed to be
the most recent ratings available at November 30, 1993 for the securities
listed. Ratings are generally ascribed to securities at the time of issuance.
While the agencies may from time to time revise such ratings, they undertake
no obligation to do so, and the ratings do not necessarily represent ratings
the agencies would ascribe to these securities at November 30, 1993.
Securities rated by Putnam are indicated by "/P" and are not publicly rated.
Ratings are not covered by the Report of Independent Accountants.
(c) Restricted as to public resale. At the date of acquisition, these
securities were valued at cost. There were no outstanding unrestricted
securities of the same class as those held. The total market value of
restricted securities owned at November 30, 1993 was $31,031,375 or 7.6% of
net assets.
(d) A portion of these securities, having a value of $13,676,875 or 3.4% of
net assets has been purchased on a "forward commitment" basis--that is, the
fund has agreed to take delivery of and make payment for such securities
beyond the settlement time of five business days after the trade date and
subsequent to the date of this report. The purchase price and interest rate
of such securities are fixed at trade date, although the Fund does not earn
any interest on such securities until settlement date.
(e) The aggregate identified cost for federal income tax purposes is
$382,008,083, resulting in gross unrealized appreciation and depreciation of
$35,193,672 and $3,098,761, respectively, or net unrealized appreciation of
$32,094,911.
The rates shown on Residual Interest Bonds (RIBS) and Variable Rate Demand
Notes (VRDN) are the current rates at November 30, 1993, which are subject to
change based on the terms of the security.
The Fund had the following industry group concentrations greater than 10% on
November 30, 1993 (as a percentage of net assets):
Utilities 26.8%
Hospitals/Healthcare 11.8
Transportation 10.2
The Fund had the following insurance group concentrations greater than 10% at
November 30, 1993 (as a percentage of net assets):
MBIA 11.03%
<PAGE>
Statement of
assets and liabilities
November 30, 1993
<TABLE>
<S> <S> <C> <C>
Assets Investments in securities, at value (identified cost $381,769,167) (Note 1) $414,102,994
Interest and other receivables 7,637,595
Unamortized organization expenses (Note 1) 6,405
------------------------------------------------------------------ ------------- -------------
Total assets 421,746,994
Liabilities Payable to subcustodian bank (Note 3) $ 34,639
Payable for securities purchased 13,620,643
Distributions payable to shareholders 1,581,157
Payable for compensation of Manager (Note 3) 714,758
Payable for administrative services (Note 3) 1,787
Payable for compensation of Trustees (Note 3) 207
Payable for investor servicing and custodian fees (Note 3) 59,463
Other accrued expenses 64,159
------------------------------------------------------------------ ------------- -------------
Total liabilities 16,076,813
------------------------------------------------------------------ ------------- -------------
Net assets $405,670,181
------------------------------------------------------------------ ------------- -------------
Represented by Series A remarketed preferred shares, without par value; 2,000
shares authorized (1,400 shares issued at $100,000 per share
liquidation preference) (Note 2) $140,000,000
Common shares, without par value; unlimited shares authorized;
19,764,439 shares outstanding 217,502,698
Undistributed net investment income 11,091,758
Accumulated net realized gain on investments 4,741,898
Net unrealized appreciation of investments 32,333,827
------------------------------------------------------------------ ------------- -------------
Net assets $405,670,181
------------------------------------------------------------------------------------- -------------
Computation of Remarketed preferred shares at liquidation preference $140,000,000
net asset value Cumulative undeclared income dividends on remarketed preferred
shares 9,590
Cumulative undeclared capital gain dividends on remarketed
preferred shares (Note 2) 30,643
------------------------------------------------------------------ ------------- -------------
Net assets allocated to remarketed preferred shares at liquidation
preference 140,040,233
------------------------------------------------------------------ ------------- -------------
Net assets available to common shares: Net asset value per share
$13.44 ($265,629,948 divided by 19,764,439 shares) 265,629,948
------------------------------------------------------------------ ------------- -------------
Net assets $405,670,181
------------------------------------------------------------------ ------------- -------------
</TABLE>
<PAGE>
Statement of
operations
Year ended November 30, 1993
<TABLE>
<S> <S> <C> <C>
========================================================= ========== ===========
Tax exempt investment income $29,583,570
Expenses:
Compensation of Manager (Note 3) $2,794,315
Investor servicing and custodian fees (Note 3) 245,231
Compensation of Trustees (Note 3) 16,703
Reports to shareholders 17,392
Auditing 58,991
Postage 70,862
Legal 13,743
Administrative services (Note 3) 15,455
Exchange listing fees 22,201
Amortization of organization expenses (Note 1) 7,099
Preferred share remarketing agent fees 357,842
Other 5,977
--------------------------------------------------------- ----------- ------------
Total expenses 3,625,811
--------------------------------------------------------- ----------- ------------
Net investment income 25,957,759
--------------------------------------------------------- ----------- ------------
Net realized gain on investments (Notes 1 and 4) 5,190,582
Net realized loss on futures contracts (Notes 1 and 4) (189,197)
Net unrealized appreciation of investments during the
year 12,914,296
--------------------------------------------------------- ----------- ------------
Net gain on investments 17,915,681
--------------------------------------------------------- ----------- ------------
Net increase in net assets resulting from operations $43,873,440
--------------------------------------------------------- ----------- ------------
</TABLE>
<PAGE>
Statement of
changes in net assets
<TABLE>
<CAPTION>
Year ended November 30
1993 1992
================================================================== ============= =============
<S> <S> <C> <C>
Increase in net Operations:
assets
Net investment income $ 25,957,759 $ 26,324,298
Net realized gain on investments 5,190,582 479,586
Net realized loss on futures contracts (189,197) --
Net unrealized appreciation of investments during the year 12,914,296 12,093,843
------------------------------------------------------------------ ------------- -------------
Net increase in net assets resulting from operations 43,873,440 38,897,727
Distributions to remarketed preferred shareholders from:
Net investment income (3,172,332) (4,717,705)
Net realized gain on investments (551,080) --
------------------------------------------------------------------ ------------- -------------
Net increase in net assets resulting from operations applicable to
common shareholders (excluding cumulative undeclared income
dividends on remarketed preferred shares of $9,590 and $0,
respectively, and cumulative undeclared capital gain dividends
on remarketed preferred shares of $30,643 and $0, respectively) 40,150,028 34,180,022
Distributions to common shareholders from net investment income (18,883,406) (17,757,617)
Increase from capital share transactions from reinvestment of
distributions to common shareholders 2,722,866 2,284,641
------------------------------------------------------------------ ------------- -------------
Total increase in net assets 23,989,488 18,707,046
Net assets Beginning of year 381,680,693 362,973,647
------------------------------------------------------------------ ------------- -------------
End of year (including undistributed net investment income of
$11,091,758 and $7,740,817, respectively) $405,670,181 $381,680,693
------------------------------------------------------------------ ------------- -------------
Number of fund Common shares outstanding at beginning of year 19,560,916 19,371,673
shares Common shares issued in connection with reinvestment of
distributions 203,523 189,243
------------------------------------------------------------------ ------------- -------------
Common shares outstanding at end of year 19,764,439 19,560,916
------------------------------------------------------------------ ------------- -------------
Remarketed preferred shares outstanding at the beginning and end
of year 1,400 1,400
</TABLE>
<PAGE>
Financial Highlights*
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
For the period
October 26, 1989
(commencement
of operations) to
Year ended November 30 November 30
------------------------------------ ------------------
1993 1992 1991 1990 1989
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period (common shares) $ 12.36 $ 11.51 $ 11.03 $ 11.19 $ 11.11**
----------------------------------------------------------------------------------------------------------
Investment Operations:
Net Investment Income 1.32 1.35 1.27 1.14 .07
Net Realized and Unrealized Gain (Loss) on
Investments .91 .65 .43 (.08) .01
----------------------------------------------------------------------------------------------------------
Total from Investment Operations 2.23 2.00 1.70 1.06 .08
----------------------------------------------------------------------------------------------------------
Less Distributions from:
Net Investment Income:
to Preferred Shareholders (.16) (.24) (.29) (.23) --
to Common Shareholders (.96) (.91) (.89) (.87) --
Net Realized Gain on Investments
to Common Shareholders -- -- -- (.01) --
to Preferred Shareholders (.03) -- -- -- --
----------------------------------------------------------------------------------------------------------
Total Distributions (1.15) (1.15) (1.18) (1.11) --
----------------------------------------------------------------------------------------------------------
Preferred Shares Offering Costs -- -- (.04) (.11) --
----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period
(common shares) $ 13.44 $ 12.36 $ 11.51 $ 11.03 $ 11.19
- -----------------------------------------------------------------------------------------------------------
Market Value, End of Period
(common shares) $ 14.00 $ 13.25 $ 11.88 $ 11.25 $ 11.88
- -----------------------------------------------------------------------------------------------------------
Total Investment Return at Market Price
(common shares) % (a) 13.54 20.24 14.23 2.58 (10.40)(b)
----------------------------------------------------------------------------------------------------------
Net Assets, End of Period
(Total Fund)(in thousands) $405,670 $381,681 $362,974 $311,731 $213,924
----------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets
(%)(c) 1.40 1.45 1.46 1.21 1.25(b)
Ratio of Net Investment Income to Average Net
Assets (%)(c) 8.59 9.20 8.70 8.29 --
Portfolio Turnover (%) 33.73 44.39 72.49 89.65 13.17(d)
----------------------------------------------------------------------------------------------------------
</TABLE>
* Financial highlights for periods ended through November 30, 1992 have been
restated to conform with requirements issued by the SEC in December 1992.
** Represents initial net asset value of $11.16 less offering expenses of
approximately $0.05.
(a)Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(b)Annualized.
(c)Ratios reflect net assets available to common shares only; net investment
income ratio also reflects reduction for dividend payments to preferred
shareholders.
(d)Not annualized.
<PAGE>
Notes to
financial statements
November 30, 1993
Note 1
Significant
accounting
policies
The Fund is registered under the Investment Company Act of 1940, as amended,
as a diversified, closed-end management investment company. The Fund's
investment objective is to provide as high a level of current income exempt
from federal income tax as is believed to be consistent with preservation of
capital. The Fund intends to achieve its objective by investing in a
diversified portfolio of tax-exempt municipal securities that the Fund's
Manager believes does not involve undue risk to income or principal. Under
normal market conditions, the Fund will invest at least 80% of its total
assets in tax-exempt municipal securities rated "investment grade" at the
time of investment or, if not rated, determined by the Fund's Manager to be
of comparable quality.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
A) Security valuation Tax-exempt bonds and notes are stated on the basis of
valuations provided by a pricing service, approved by the Trustees, which
uses information with respect to transactions in bonds, quotations from bond
dealers, market transactions in comparable securities and various
relationships between securities in determining value.
The fair value of restricted securities is determined by the Manager
following procedures approved by the Trustees, and such valuations and
procedures are reviewed periodically by Trustees. The fair value of
restricted securities represents the amount the Fund can reasonably expect to
realize from an orderly disposition of such securities over a reasonable
period of time. In making this determination, consideration is given to the
financial position of the issuer and other fundamental analytical data
relating to the investment and to the nature of the restrictions on
disposition of the securities (including any registration expenses that might
be borne by the Fund in connection with such disposition). In addition, such
specific factors as the cost of the investment, the market value of any
unrestricted securities of the same class (both at the time of purchase and
at the time of valuation), the size of the holding, the prices of any recent
transactions or offers with respect to such securities and any available
analysts' reports regarding the issuer are also considered.
B) Determination of net asset value Net asset value of the common shares is
determined by dividing the value of all assets of the Fund (including accrued
interest and dividends), less all liabilities (including accrued expenses),
and the liquidation value of any outstanding remarketed preferred shares, by
the total number of common shares outstanding.
C) Security transactions and related investment income Security transactions
are accounted for on the trade date (date the order to buy or sell is
executed). Interest income is recorded on the accrual basis.
D) Futures A futures contract is an agreement between two parties to buy and
sell a security at a set price on a future date. Upon entering into such a
contract the Fund is required to pledge to the broker an amount of cash or
U.S. government securities equal to the minimum "initial margin" requirements
of the exchange. Pursuant to the contract, the Fund agrees to receive from or
pay to the broker an amount of cash equal to the daily fluctuation in value
of the contract. Such receipts or payments are know as "variation margin" and
are recorded by the Fund as unrealized gains or losses. When the contract is
closed, the Fund records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at
the time it was closed. The potential risk to the Fund is that the change in
value of the underlying securities may not correspond to the change in value
of the futures contracts.
E) Federal taxes It is the policy of the Fund to distribute all of its income
within the prescribed time and otherwise comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies. It is
also the intention of the Fund to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Internal Revenue Code
of 1986. Therefore, no provision has been made for federal taxes on income,
capital gains or unrealized appreciation of securities held and excise tax on
income and capital gains.
F) Distributions to shareholders Distributions to common and preferred
shareholders are recorded by the Fund on the ex-dividend date. Dividends on
remarketed preferred shares become payable, when, as and if declared by the
Trustees. Each dividend period for the remarketed preferred shares is
generally a 7-day period. The applicable dividend rate for the remarketed
preferred shares on November 30, 1993 was 2.50%.
G) Amortization of bond premium and discount Any premium resulting from the
purchase of securities in excess of maturity value is amortized on a
yield-to-maturity basis. Discount on zero-coupon bonds is accreted according
to the effective yield method.
H) Unamortized organization expenses Expenses incurred by the Fund in
connection with its organization aggregated $35,502. These expenses are being
amortized on a straight-line basis over a five-year period.
Note 2
Remarketed
Preferred
Shares
The Series A RP shares are redeemable at the option of the Fund on any
dividend payment date at a redemption price of $100,000 per share, plus an
amount equal to any dividends accumulated on a daily basis but unpaid through
the redemption date (whether or not such dividends have been declared) and,
in certain circumstances, a call premium. Additionally, the Fund has
authorized a separate series of 2,000 Serial Remarketed Preferred shares,
which are issuable only under certain conditions in exchange for Series A RP
shares. No Serial Remarketed Preferred shares are currently outstanding.
It is anticipated that approximately 83% of total distributions and dividends
paid during fiscal 1993 to holders of remarketed preferred shares will be
considered tax-exempt dividends under the Internal Revenue Code of 1986, as
amended. To the extent that the Fund earned taxable income and taxable gains
during the fiscal year, it is required to pay holders of the remarketed
preferred shares throughout the year additional dividends as necessary to
result in an after-tax yield equivalent to the applicable dividend rate for
the year. Of the total additional dividends required to be paid, $192,878 was
paid during the year ended November 30, 1993 and the remaining $30,643 will
be paid subsequent to year end.
Under the Investment Company Act of 1940, the Fund is required to maintain
asset coverage of at least 200% with respect to the remarketed preferred
shares as of the last business day of each month in which any such shares are
outstanding. Additionally, the Fund is required to meet more stringent asset
coverage requirements under the terms of the remarketed preferred shares and
the shares' rating agencies. Should these requirements not be met, or should
dividends accrued on the remarketed preferred shares not be paid, the Fund
may be restricted in its ability to declare dividends to common shareholders
or may be required to redeem certain of the remarketed preferred shares.
At November 30, 1993, there were no such restrictions on the Fund.
Note 3
Management fee,
administrative
services, and
other transactions
Compensation of Putnam Investment Management, Inc. (formerly known as The
Putnam Management Company, Inc.), the Fund's Manager, a wholly-owned
subsidiary of Putnam Investments, Inc., (formerly known as The Putnam
Companies, Inc.), for management and investment advisory services is paid
quarterly based on the average net assets of the Fund, including those
allocated to the remarketed preferred shares. Such fee is based on the annual
rate of 0.70% of the average weekly net assets.
If dividends payable on remarketed preferred shares during any dividend
payment period plus any expenses attributable to remarketed preferred shares
for that period exceed the Fund's net income attributable to the proceeds of
the remarketed preferred shares during that period, then the fee payable to
Putnam for that period will be reduced by the amount of the excess (but not
more than 0.70% of the liquidation preference of the remarketed preferred
shares outstanding during the period).
The Fund also reimburses the Manager for the compensation and related
expenses of certain officers of the Fund and their staff who provide
administrative services to the Fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees. For the year ended
November 30, 1993, the Fund paid $15,455 for these services.
Trustees of the Fund receive an annual Trustee's fee of $1,220 and an
additional fee for each Trustees' meeting attended. Trustees who are not
interested persons of the Manager and who serve on committees of the Trustees
receive additional fees for attendance at certain committee meetings.
Custodial functions are provided to the Fund by Putnam Fiduciary Trust
Company (PFTC), a subsidiary of Putnam Investments, Inc. Investor servicing
agent functions for the Fund's common shares are being provided by PFTC. Fees
paid for these investor servicing and custodial functions for the year ended
November 30, 1993 amounted to $245,231.
Investor servicing and custodian fees reported in the statement of operations
have been reduced by credits allowed by the custodian.
As part of the custodian contract between PFTC and the subcustodian bank, the
subcustodian has a lien on the securities of the Fund to the extent permitted
by the Fund's investment restrictions to cover any advances made by the Fund.
At November 30, 1993, the payable to subcustodian represents the amount due
for cash advanced for the settlement of a security purchased.
Note 4
Purchases
and sales
of securities
During the year ended November 30, 1993, purchases and sales of investment
securities other than short-term municipal obligations aggregated
$136,824,812 and $129,886,631, respectively. Purchases and sales of
short-term municipal obligations aggregated $77,200,000 and $64,825,000,
respectively. In determining the net gain or loss on securities sold, the
cost of securities has been determined on the identified cost basis.
Transactions in U.S. Treasury Bond futures contracts during the year are
summarized as follows:
<TABLE>
<CAPTION>
Sales of Futures Contracts
--------------------------
Number of Aggregate
Contracts Face Value
- -------------------------------------------------
<S> <C> <C>
Contracts opened 700 $ 77,885,279
Contracts closed (700) (77,885,279)
- -------------------------------------------------
Open at end of year -- $ --
- -------------------------------------------------
</TABLE>
Selected
quarterly
data
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
November 30 August 31 May 31 February 28 November 30 August 31 May 31 February 29
1993 1993 1993 1993 1992 1992 1992 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Total investment
income
Total $ 7,299,845 $ 7,412,198 $ 7,460,790 $ 7,410,737 $ 7,508,063 $ 7,584,336 $ 7,395,574 $ 7,237,837
Per Share* $ .37 $ .38 $ .37 $ .38 $ .38 $ .39 $ .38 $ .37
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income
available to common
shareholders
Total $ 5,266,270 $ 5,650,335 $ 5,679,969 $ 5,637,773 $ 5,509,821 $ 5,781,715 $ 5,211,323 $ 5,103,734
Per Share* $ .27 $ .29 $ .28 $ .29 $ .29 $ .29 $ .27 $ .26
Net realized and
unrealized gain
(loss) on
investments
Total $ (3,629,890)$ 9,372,959 $ (4,510,500)$ 16,683,112 $ (3,419,262) $ 8,679,987 $ 4,286,298 $ 3,026,406
Per Share* $ (.19)$ .48 $ (.22)$ .84 $ (.17) $ .45 $ .22 $ .15
- ---------------------------------------------------------------------------------------------------------------------------------
Net increase in net
assets available to
common shareholders
resulting from
operations
Total $ 1,636,380 $ 15,023,294 $ 1,169,469 $ 22,320,885 $ 2,090,559 $ 14,461,702 $ 9,497,621 $ 8,130,140
Per Share* $ .08 $ .77 $ .06 $ 1.13 $ .12 $ .74 $ .49 $ .41
- -----------------------------------------------------------------------------------------------------------------------------
Net assets available
to common
shareholders at the
end of the period
Total $265,629,948 $268,053,202 $257,065,067 $259,927,102 $241,680,693 $243,565,922 $233,041,423 $227,253,559
Per Share* $ 13.44 $ 13.60 $ 13.07 $ 13.25 $ 12.36 $ 12.48 $ 11.97 $ 11.70
- ---------------------------------------------------------------------------------------------------------------------------------
* Per common share
</TABLE>
Fund
performance
supplement
Putnam Investment Grade Municipal Trust is a portfolio managed for high
current income free from federal income tax, consistent with preservation of
capital.
The Lehman Brothers Municipal Bond Index is an unmanaged list of
approximately 8,000 investment-grade, fixed rate, long-term maturity
tax-exempt bonds, which are selected to be representative of the market in
terms of price movement and sector distribution. The average quality of bonds
held in the index may differ from the average quality of those bonds in which
the fund invests. The index does not include bonds in certain of the lower
rating classifications in which the fund may invest. The index does not take
into account brokerage commissions or other costs and may pose different
risks from the fund. Total return performance for the index reflects
mathematically derived changes of market price and reinvestment of interest
payments, as computed by Lehman Brothers. The fund's portfolio contains
securities that do not match those in the index.
The fund performance supplement has been prepared by Putnam Management to
provide additional information about the fund and the indexes used for
performance comparisons. The information is not part of the portfolio of
investments owned or the financial statements.
<PAGE>
Your
Trustees
George Putnam
Chairman
Chairman and President,
The Putnam Funds
William F. Pounds
Vice Chairman
Professor of Management,
Alfred P. Sloan
School of Management,
Massachusetts Institute of
Technology
Hans H. Estin
Vice Chairman,
North American
Management Corporation
John A. Hill
Principal and
Managing Director,
First Reserve Corp.
Elizabeth T. Kennan
President,
Mount Holyoke College
Lawrence J. Lasser
President and
Chief Executive Officer,
Putnam Investments, Inc.
Robert E. Patterson
Executive Vice President,
Cabot Partners
Limited Partnership
Donald S. Perkins
Director of various
corporations
George Putnam, III
President, New Generation
Research, Inc.
A.J.C. Smith
Chairman of the Board
and Chief Executive Officer,
Marsh & McLennan
Companies, Inc.
W. Nicholas Thorndike
Director of various
corporations
<PAGE>
Putnam
Investment
Grade
Municipal
Trust
Fund information
Investment manager
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
Marketing services
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
Investor servicing agent
Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203
1-800-225-1581
Custodian
Putnam Fiduciary
Trust Company
Legal counsel
Ropes & Gray
Independent accountants
Price Waterhouse
Officers
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
John R. Verani
Vice President
Gary N. Coburn
Vice President
James E. Erickson
Vice President
William Reeves
Vice President
and Fund Manager
William N. Shiebler
Vice President
John D. Hughes
Vice President
and Treasurer
Paul O'Neil
Vice President
Beverly Marcus
Clerk and
Assistant Treasurer
Call 1-800-634-1587 weekdays from 9 a.m. to 5 p.m. Eastern time for
up-to-date information about the fund's NAV or to request Putnam's quarterly
Closed-End Fund Commentary.
10014-MGM 12/93
[Dalbar logo]
Putnam Investor Services
has received the DALBAR
award
each year since the award's
1990 inception.
In more than 10,000 tests
of 38 shareholder
service components,
Putnam outperformed
the industry standard
in every category.
<PAGE>
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Bulk Rate
U.S. Postage
Paid
Boston, MA
Permit No. 53749
<PAGE>
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED
AND EDGAR-FILED TEXTS:
(1) Bold and italic typefaces are displayed in normal type.
(2) Headers (e.g., the name of the fund) and footers (e.g., page
numbers and "The accompanying notes are an integral part of these
financial statements") are omitted.
(3) Because the printed page breaks are not reflected, certain tabular
and columnar headings and symbols are displayed differently in
this filing.
(4) Bullet points and similar graphic signals are omitted.
(5) Page numbering is omitted.
(6) Dagger footnote symbol replaced with plus sign (+).
