FEDERATED MUNICIPAL SECURITIES INCOME TRUST, N-30D, 2000-05-03

FEDERATED MUNICIPAL SECURITIES INCOME TRUST
N-30D, 2000-05-03

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SEMI-ANNUAL REPORT

President's Message

Dear Shareholder:

I am pleased to present the Semi-Annual Report to Shareholders of Federated California Municipal Income Fund, a portfolio of Federated Municipal Securities Income Trust. This report covers the first half of the fund's fiscal year, which is the six-month reporting period from September 1, 1999 through February 29, 2000. The report begins with a discussion by the fund's portfolio manager, followed by a complete listing of the fund's holdings and its financial statements.

Federated California Municipal Income Fund is a convenient way for tax-sensitive California residents to invest for income that is exempt from federal regular income tax and state income tax.¹ This double tax-free advantage gives investors the opportunity to earn a greater after-tax yield than they could in a comparable high-quality taxable investment.

During the six-month reporting period, the fund's portfolio of 69 quality holdings paid a monthly dividend stream totaling $0.26 per share for Class A Shares and $0.22 for Class B Shares. In a rising interest rate environment that caused a broad decline in bond prices, the fund's share price decreased from $10.49 to $10.12. As a result, the fund's Class A Shares and Class B Shares produced flat six-month total returns of (1.10%) and (1.45%), respectively, based on net asset value.² The Fund's net assets totaled $57 million at the end of the reporting period.

Thank you for joining other shareholders of Federated California Municipal Income Fund in pursuing monthly, double tax-free investment income. Of course, you have the option of receiving income from the fund or building your account by reinvesting your dividends and compounding tax free.

Sincerely,

Richard B. Fisher

Richard B. Fisher
President
April 15, 2000

1 Income may be subject to the federal alternative minimum tax.

2 Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The total return for the six-month reporting period based on offering price was (6.43%) for Class A Shares and (6.76%) for Class B Shares.

Investment Review

What is your review of the municipal bond marketplace over the reporting period?

Municipal bond market yields continued to follow the rising trend in general interest rates over the reporting period from September 1999 to February 2000, as a result of concern over accelerating real economic growth, valuations in the stock market and potential Federal Reserve Board policy changes. Cash flows in municipal bond funds throughout the industry continued to be negative over the reporting period as investors used tax-loss selling in their bond funds to offset capital gains in the equity portion of their investment portfolios. The municipal market experienced a significant shift in supply and demand relationships with a lighter new issuance calendar (a decline of 21% over last year) and a lack of institutional demand from funds, insurance companies and arbitrageurs. This technical situation, which existed for most of the calendar year in 1999, kept municipal and treasury yield ratios in a historically cheap range. Yields increased across the municipal yield curve over the six-month reporting period ended February 29, 2000. Yields increased by 33 basis points to 5.23% in the ten-year area of the AAA general obligation municipal yield curve and by 28 basis points to 5.90% for thirty-year maturities.

How have California municipal bonds performed over the reporting period?

Municipal credit quality continued to benefit from the strong U.S. economy, as reflected by the 4 to 1 ratio of municipal credit upgrades to downgrades by Moody's Investors Services. The hospital sector in California continued to experience credit deterioration as a result of reductions in Medicare reimbursement from the Federal government. California municipal debt was trading with a spread of approximately 33 basis points to the benchmark AAA municipal yield curve at the end of February 2000. This is close to the six-month average of 34.5 basis points.

How has Federated California Municipal Income Fund performed with respect to total return and income for the six-month reporting period ended February 29, 2000?

For the six-month reporting period ended February 29, 2000, the Fund's Class A Shares and Class B Shares produced total returns of (1.10%) and (1.45%), respectively, based on net asset value.¹ The income on the Fund was competitive during the reporting period. The Fund's 30-day current net yield, or SEC yield, on February 29, 2000 was 5.25% for Class A Shares based on the net asset value.² The yield represents an increase from the 4.78% SEC yield at the beginning of the reporting period.

1 Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. The total returns for the six-month reporting period based on offering price for Class A Shares and Class B Shares were (6.43%) and (6.76%), respectively.

2 The 30-day SEC Yields for Class A Shares (based on offering price) and Class B Shares (based on net asset value) were 5.01% and 4.50%, respectively.

What accounted for the Fund's performance?

In general, the total return performance for municipal bond funds was negatively impacted by the general increase in interest rates. Credit spread widening in the health sector impacted those municipal bond funds which had exposure to hospitals and continuing care retirement centers. Individual bond structure also impacted performance, with many bonds that were premium callable bonds at the beginning of the year becoming discount bonds, and then market discount bonds, increasing their duration in a bear market. The strategy over the reporting period involved taking advantage of increasing interest rates by swapping into securities with higher book yields but similar structural characteristics (duration, maturity, call protection and credit quality). Portfolio duration has been managed by adjusting cash positions and through the use of a futures hedging strategy which utilizes the municipal futures contract. The focus in the Federated California Municipal Income Fund is to maximize the current yield provided to shareholders. The strategy involves continuously swapping into securities with higher book yields within a rising interest rate environment while managing portfolio duration within highly defined parameters.

What kind of environment do you see ahead for municipal bonds?

The total issuance of long-term municipal bonds is expected to be in the $200 to $230 billion range in the year 2000. The amount of outstanding municipal debt is expected to grow by approximately $80 billion while the stock of treasury debt is falling. This should bias the municipal and treasury yield ratio upward. Relative performance of the municipal market should improve as most of the damage of higher municipal ratios and rising interest rates should have been absorbed in the fiscal year of 1999. Liquidity should continue to be an issue for the municipal market due to a lack of Wall Street analytical resources and reduced institutional demand from arbitrageur and cross-over buyers. Liquidity in the municipal market should also continue to be impacted by the significant amount of bonds in the secondary market with poor structural characteristics (market discounts) which currently have limited appeal for investors.

Portfolio of Investments

FEBRUARY 29, 2000 (UNAUDITED)

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--97.1%

California--95.8%

1,500,000

ABAG Finance Authority for Non-Profit Corporations, Multifamily Housing Revenue Bonds (Series 1999A), 5.80% (Civic Center Drive Apartments Project)/(FSA INS), 9/1/2020

AAA

1,439,280

500,000

ABAG Finance Authority for Non-Profit Corporations, Refunding Revenue Certificates of Participation, 5.125% (Episcopal Homes Foundation)/(Original Issue Yield: 5.35%), 7/1/2018

A-

413,610

500,000

Anaheim, CA, PFA, Lease Revenue Bonds (Series 1997C), 6.00% (Anaheim Public Improvements Project)/(FSA INS)/ (Original Issue Yield: 5.550%), 9/1/2016

AAA

526,055

1,000,000

Antioch Area, CA, Public Facilities Financing Agency, Special Tax Revenue Bonds, 5.60% (Community Facilities District No. 1989-1)/ (AMBAC INS)/(Original Issue Yield: 5.65%), 8/1/2020

AAA

976,080

605,000

Blythe, CA, Financing Authority, Sewer Revenue Bonds (Series 1998), 5.75%, 4/1/2028

519,453

500,000

Bonita Canyon, CA, Public Facilities Financing Authority, Community Facilities District No. 98-1 Special Tax Bonds (Series 1998), 5.375% (Original Issue Yield: 5.50%), 9/1/2028

398,710

500,000

California Educational Facilities Authority, Revenue Bonds (Series 2000A), 6.75% (Fresno Pacific University), 3/1/2019

Baa3

504,295

625,000

California Educational Facilities Authority, Revenue Bonds (Series B), 6.60% (Loyola Marymount University)/(United States Treasury PRF), 10/1/2022 (@102)

668,006

600,000

California Educational Facilities Authority, Revenue Bonds, 6.70% (Southwestern University)/(Original Issue Yield: 6.838%), 11/1/2024

625,056

500,000

California Educational Facilities Authority, Student Loan Revenue Bonds (Series 1998), 5.55% (AMBAC INS), 4/1/2028

AAA

461,650

1,000,000

California HFA, Revenue Bonds (Series 1996Q), 5.85%, 8/1/2016

AAA

999,940

670,000

California HFA, SFM Revenue Bonds (Series C), 6.75%, 2/1/2025

AA-

680,037

520,000

California HFA, SFM Revenue Bonds (Series F-1), 7.00%, 8/1/2026

AA-

534,565

1,000,000

California Health Facilities Financing Authority, Insured Health Facilities Refunding Revenue Bonds (Series 1997), 5.50% (Valley Care Hospital Corp.)/(California Mortgage INS)/(Original Issue Yield: 5.737%), 5/1/2020

AA-

931,360

500,000

California Health Facilities Financing Authority, Insured Health Facility Revenue Bonds (Series 1998A), 5.25% (Casa De Las Campanas)/ (California Mortgage INS)/(Original Issue Yield: 5.35%), 8/1/2020

AA-

448,845

1,000,000

California Health Facilities Financing Authority, Revenue Bonds (Series 1998), 5.40% (Northern California Presbyterian Homes, Inc.)/ (Original Issue Yield: 5.417%), 7/1/2028

A-

821,960

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

California--continued

1,000,000

California Health Facilities Financing Authority, Revenue Bonds (Series 1998B), 5.00% (Kaiser Permanente)/(Original Issue Yield: 5.20%), 10/1/2020

804,400

400,000

California Health Facilities Financing Authority, Revenue Bonds (Series A), 6.50% (Kaiser Permanente)/(Original Issue Yield: 7.097%), 12/1/2020

415,264

700,000

California Health Facilities Financing Authority, Refunding Revenue Bonds (Series 1996A), 6.00% (Catholic Healthcare West)/(MBIA INS)/ (Original Issue Yield: 6.15%), 7/1/2017

AAA

712,558

900,000

California PCFA, Exempt Facilities Revenue Bonds (Series 1996), 5.50% (Mobil Corp.)/(Original Issue Yield: 5.72%), 12/1/2029

AAA

821,043

500,000

California PCFA, PCR Bonds (Series B), 6.40% (Southern California Edison Co.)/(Original Issue Yield: 6.55%), 12/1/2024

A+

501,660

500,000

California PCFA, Resource Recovery Revenue Bonds (Series A), 7.15% (Waste Management, Inc.), 2/1/2011

BBB

501,290

900,000

California PCFA, Sewer & Solid Waste Disposal Revenue Bonds, 5.75% (Anheuser-Busch Cos., Inc.)/(Original Issue Yield: 5.818%), 12/1/2030

A+

855,801

700,000

California PCFA, Solid Waste Disposal Revenue Bonds, 6.875% (Browning-Ferris Industries, Inc.)/(Original Issue Yield: 6.95%), 11/1/2027

BB-

671,958

1,000,000

California PCFA, Solid Waste Refunding Revenue Bonds (Series 1999A), 5.125% (West County Resource Recovery, Inc.)/(Comerica Bank - California LOC)/(Original Issue Yield: 5.323%), 1/1/2014

AA-

914,480

970,000

California Rural Home Mortgage Finance Authority, SFM Revenue Bonds, (Series 1998 B-4), 6.35% (GNMA COL)/(Original Issue Yield: 5.75%), 12/1/2029

AAA

981,136

2,000,000

California State Department of Water Resources, Water System Revenue Bonds (Series 1995O), 7.00% (Central Valley Project)/(United States Treasury PRF)/(Original Issue Yield 4.90%), 12/1/2007 (@101)

2,246,340

1,000,000

California State Public Works Board, Lease Revenue Bonds (Series 1999A), 5.75% (California Department of Health Services)/ (MBIA INS)/(Original Issue Yield: 5.65%), 11/1/2017

AAA

1,001,170

580,000

California State, UT GO Bonds, 5.75% (United States Treasury PRF)/(Original Issue Yield: 6.25%), 3/1/2019 (@101)

AA-

610,815

20,000

California State, UT GO Bonds, 5.75% (Original Issue Yield: 6.25%), 3/1/2019

AA-

19,852

1,000,000

California State, Refunding UT GO Bonds, 4.75% (Original Issue Yield: 4.82%), 2/1/2016

AAA

886,520

400,000

California Statewide Communities Development Authority, Certificates of Participation, 5.25% (St. Joseph Health System Group)/(Original Issue Yield: 5.47%), 7/1/2021

352,108

1,000,000

California Statewide Communities Development Authority, Certificates of Participation, 5.50% (Sutter Health)/(Original Issue Yield: 5.77%), 8/15/2018

AAA

958,060

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

California--continued

1,000,000

California Statewide Communities Development Authority, Certificates of Participation, (Series 1999), 5.375% (Internext Group)/(Original Issue Yield: 5.52%), 4/1/2017

BBB

826,150

600,000

California Statewide Communities Development Authority, Revenue Certificates of Participation, 6.625% (St. Joseph Health System Group)/ (Original Issue Yield: 6.674%), 7/1/2021

656,232

400,000

California Statewide Communities Development Authority, Special Facilities Revenue Bonds, 5.625% (United Airlines)/(Original Issue Yield: 5.75%), 10/1/2034

BB+

332,684

500,000

Chula Vista, CA, IDA, Revenue Bonds (Series A), 6.40% (San Diego Gas & Electric)/(Original Issue Yield: 6.473%), 12/1/2027

AA-

503,390

1,000,000

Contra Costa County, CA, PFA, Tax Allocation Revenue Bonds (Series 1999), 5.125% (Pleasant Hill BART, North Richmond, Bay Point, Oakley, and Rodeo Redevelopment Project Areas)/(Original Issue Yield: 5.27%), 8/1/2019

BBB

847,040

500,000

El Dorado County, CA, Public Agency Financing Authority, Revenue Bonds, 5.50% (Original Issue Yield: 5.85%), 2/15/2021

AAA

475,245

790,000

El Monte, CA, PFA, Tax Allocation Revenue Bonds (Series 1998), 5.75% (El Monte Community Redevelopment Agency), 6/1/2028

678,033

700,000

Foothill/Eastern Transportation Corridor Agency, CA, (Series 1995A) Senior Lien Toll Road Revenue Bonds, 6.50% (United States Treasury PRF)/(Original Issue Yield: 6.78%), 1/1/2032 (@100)

BBB-

767,557

1,760,000

Fresno, CA, Unified School District, Refunding UT GO Bonds (Series 1999C), 5.90% (MBIA INS)/(Original Issue Yield: 5.53%), 2/1/2017

AAA

1,816,179

1,000,000

Inglewood, CA, PFA, Refunding Revenue Bonds (Series 1999A), 5.625% (AMBAC INS)/(Original Issue Yield: 5.406%), 8/1/2016

AAA

1,002,460

500,000

Inland Empire Solid Waste Financing Authority, CA, Revenue Bonds (Series B), 6.25% (United States Treasury GTD)/(FSA INS)/(Original Issue Yield: 6.15%), 8/1/2011

AAA

538,550

1,750,000

Los Angeles County, CA Metropolitan Transportation Authority, Sales Tax Revenue Bonds (Series 1993B), 4.75% (AMBAC INS)/(Original Issue Yield: 5.35%), 7/1/2013

AAA

1,613,728

600,000

Los Angeles, CA, Community Redevelopment Agency, Housing Refunding Revenue Bonds (Series A), 6.55% (AMBAC INS), 1/1/2027

AAA

611,118

1,000,000

Los Angeles, CA, Department of Water & Power, Electric Plant Revenue Bonds, 6.125% (Original Issue Yield: 6.00%), 2/15/2019

A+

1,010,390

1,000,000

Los Angeles, CA, Unified School District, UT GO Bonds (Series C), 5.50% (MBIA INS)/(Original Issue Yield: 5.02%), 7/1/2013

AAA

1,011,320

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

California--continued

445,000

Placer County, CA, Water Agency, Water Revenue Certificates of Participation (Series 1999), 5.50% (AMBAC INS)/(Original Issue Yield: 5.63%), 7/1/2018

AAA

432,211

940,000

Placer County, CA, Water Agency, Water Revenue Certificates of Participation (Series 1999), 5.50% (AMBAC INS)/(Original Issue Yield: 5.65%), 7/1/2019

AAA

906,865

460,000

Pomona, CA, Redevelopment Agency, Tax Allocation Bonds (Series 1998X), 5.40% (Mountain Meadows Redevelopment Project), 12/1/2024

BBB+

387,913

900,000

Port of Oakland, CA, Revenue Bonds (Series 1997G), 5.50% (MBIA INS)/(Original Issue Yield: 5.83%), 11/1/2017

AAA

867,906

700,000

Regents of University of California, Research Facilities Revenue Bonds (Series 1995B), 6.55% (United States Treasury PRF), 9/1/2024 (@102)

A+

757,442

2,000,000

Richmond, CA, Wastewater Revenue Bonds (Series 1999), 5.80%, 8/1/2018

AAA

2,010,680

600,000

Sacramento, CA, Municipal Utility District, Electric Revenue Bonds (Series J), 5.50% (AMBAC INS)/(Original Issue Yield: 5.80%), 8/15/2021

AAA

569,934

300,000

San Francisco, CA, City & County Airport Commission, Second Series Revenue Bonds (Issue 12A), 5.90% (San Francisco International Airport)/(Original Issue Yield: 5.97%), 5/1/2026

A+

290,388

1,000,000

San Jose, CA, Unified School District, Certificates of Participation, 5.75% (MBIA INS)/(Original Issue Yield: 5.85%), 6/1/2020

AAA

994,570

1,000,000

Sierra View Local Health Care District, CA, Refunding Revenue Bonds (Series 1998), 5.25% (American Capital Access INS)/(Original Issue Yield: 5.40%), 7/1/2018

858,960

1,500,000

Simi Valley, CA, PFA, Lease Revenue Bonds (Series 1995), 5.75% (AMBAC INS), 9/1/2015

AAA

1,520,655

1,000,000

South Orange County, CA, PFA, Reassessment Revenue Bonds (Series 1999), 5.80% (FSA INS)/ (Original Issue Yield: 5.85%), 9/2/2018

Aaa

1,001,940

2,300,000

South Orange County, CA, PFA, Special Tax Revenue Bonds (Series 1999C), 7.50% (Foothill Area)/(FGIC INS)/(Original Issue Yield: 5.70%), 8/15/2007

AAA

2,665,999

1,400,000

Stockton, CA, Certificates of Participation (Series 1999), 5.875% (Original Issue Yield: 5.90%), 8/1/2019

A-

1,383,956

400,000

Stockton, CA, Health Facility Revenue Bonds (Series 1997A), 5.70% (Dameron Hospital Association), 12/1/2014

BBB+

357,656

500,000

Stockton, CA, Revenue Certificates of Participation (Series 1998A), 5.00% (MBIA INS)/(Original Issue Yield: 5.15%), 9/1/2023

AAA

435,445

745,000

Vista, CA, Joint Powers Financing Authority, Revenue Bonds (Series 1997B), 5.50% (Original Issue Yield: 5.57%), 9/1/2020

A-

678,904

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

California--continued

500,000

Watsonville, CA, Insured Hospital Refunding Revenue Bonds (Series 1996A), 6.20% (Watsonville Community Hospital)/ (California Mortgage INS)/(Original Issue Yield: 6.225%), 7/1/2012

530,690

1,000,000

West Sacramento, CA, Limited Obligation Refunding Improvement Bonds, 5.60% (West Sacramento Reassessment District of 1998)/ (Original Issue Yield: 5.70%), 9/2/2017

866,390

TOTAL

54,411,937

Puerto Rico--1.3%

700,000

Puerto Rico Electric Power Authority, Revenue Bonds (Series T), 6.375% (United States Treasury PRF)/(Original Issue Yield: 6.58%), 7/1/2024 (@102)

AAA

757,932

TOTAL LONG-TERM MUNICIPALS (IDENTIFIED COST $56,951,588)

55,169,869

SHORT-TERM INVESTMENTS--4.4%

Puerto Rico--4.4%

2,500,000

Puerto Rico Commonwealth Infrastructure Financing Authority, Floater Certificates (Series 1998-139) Weekly VRDNs (AMBAC INS)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ)

AAA

2,500,000

TOTAL SHORT-TERM INVESTMENTS (AT AMORTIZED COST)

2,500,000

TOTAL INVESTMENTS (IDENTIFIED COST $59,451,588)³

57,669,869

Securities that are subject to alternate minimum tax represent 18.9% of the fund's portfolio as calculated based upon total portfolio market value.

1 Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. Current credit ratings are unaudited.

2 Denotes a security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based on criteria approved by the Board of Trustees. At February 29, 2000, these securities amounted to $1,383,956 which represents 2.4% of net assets.

3 The cost of investments for federal tax purposes amounts to $59,451,588. The net unrealized depreciation of investments on a federal tax basis amounts to $1,781,719, which is comprised of $599,349 appreciation and $2,381,068 depreciation at February 29, 2000.

Note: The categories of investments are shown as a percentage of net assets ($56,803,177) at February 29, 2000.

The following acronyms are used throughout this portfolio:

AMBAC	--American Municipal Bond Assurance Corporation
COL	--Collateralized
FGIC	--Financial Guaranty Insurance Company
FSA	--Financial Security Assurance
GNMA	--Government National Mortgage Association
GO	--General Obligation
GTD	--Guaranteed
HFA	--Housing Finance Authority
IDA	--Industrial Development Authority
INS	--Insured
LIQ	--Liquidity Agreement
LOC	--Letter of Credit
MBIA	--Municipal Bond Investors Assurance
PCR	--Pollution Control Revenue
PCFA	--Pollution Control Finance Authority
PFA	--Public Facility Authority
PRF	--Prerefunded
SFM	--Single Family Mortgage
UT	--Unlimited Tax
VRDNs	--Variable Rate Demand Notes

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

FEBRUARY 29, 2000 (UNAUDITED)

Assets:

Total investments in securities, at value (identified and tax cost $59,451,588)

57,669,869

Cash

36,470

Income receivable

795,580

Receivable for shares sold

91,666

TOTAL ASSETS

58,593,585

Liabilities:

Payable for investments purchased

1,509,032

Payable for shares redeemed

18,608

Payable for daily variation margin

10,938

Income distribution payable

229,930

Accrued expenses

21,900

TOTAL LIABILITIES

1,790,408

Net assets for 5,614,201 shares outstanding

56,803,177

Net Assets Consist of:

Paid in capital

61,369,314

Net unrealized depreciation of investments and futures transactions

(1,783,657

)

Accumulated net realized loss on investments and futures transactions

(2,782,480

)

TOTAL NET ASSETS

56,803,177

Net Asset Value, Offering Price and Redemption Proceeds Per Share

Class A Shares:

Net Asset Value Per Share ($22,693,531 ÷ 2,242,988 shares outstanding)

$10.12

Offering Price Per Share (100/95.50 of $10.12)¹

$10.60

Redemption Proceeds Per Share (100.00/100 of $10.12)²

$10.12

Class B Shares:

Net Asset Value Per Share ($34,109,646 ÷ 3,371,213 shares outstanding)

$10.12

Offering Price Per Share (100/100.00 of $10.12)¹

$10.12

Redemption Proceeds Per Share (94.50/100 of $10.12)²

$9.56

1 See "What Do Shares Cost?" in the Prospectus.

2 See "Sales Charge When You Redeem" in the Prospectus.

See Notes which are an integral part of the Financial Statements

Statement of Operations

SIX MONTHS ENDED FEBRUARY 29, 2000 (UNAUDITED)

Investment Income:

Interest

1,679,628

Expenses:

Investment adviser fee

121,587

Administrative personnel and services fee

73,801

Custodian fees

2,745

Transfer and dividend disbursing agent fees and expenses

36,201

Directors'/Trustees' fees

1,656

Auditing fees

6,562

Legal fees

1,677

Portfolio accounting fees

29,895

Distribution services fee--Class A Shares

32,063

Distribution services fee--Class B Shares

131,787

Shareholder services fee--Class A Shares

32,063

Shareholder services fee--Class B Shares

43,929

Share registration costs

13,482

Printing and postage

12,178

Insurance premiums

1,457

Miscellaneous

4,928

TOTAL EXPENSES

546,011

Waivers and reimbursements:

Waiver of investment adviser fee

(121,587

)

Waiver of distribution services fee--Class A Shares

(32,063

)

Reimbursement of other operating expenses

(107,253

)

TOTAL WAIVERS AND REIMBURSEMENTS

(260,903

)

Net expenses

285,108

Net investment income

1,394,520

Realized and Unrealized Gain (Loss) on Investments and Futures Transactions:

Net realized gain (loss) on investments on investments and futures transactions

(1,570,971

)

Net change in unrealized depreciation of investments and futures transactions

(700,291

)

Net realized and unrealized gain (loss) on investments and futures transactions

(2,271,262

)

Change in net assets resulting from operations

(876,742

)

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Six Months
Ended
(unaudited)
February 29,
2000

Year
Ended
August 31,
1999

Increase (Decrease) in Net Assets

Operations:

Net investment income

1,394,520

2,318,551

Net realized gain (loss) on investments and futures transactions ($(1,570,971) and $(474,546), respectively, as computed for federal tax purposes)

(1,570,971

)

(474,546

)

Net change in unrealized appreciation/depreciation

(700,291

)

(3,186,111

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

(876,742

)

(1,342,106

)

Distributions to Shareholders:

Distributions from net investment income

Class A Shares

(642,593

)

(1,327,405

)

Class B Shares

(751,927

)

(991,146

)

CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS

(1,394,520

)

(2,318,551

)

Share Transactions:

Proceeds from sale of shares

6,670,234

41,012,918

Net asset value of shares issued to shareholders in payment of distributions declared

586,331

1,269,456

Cost of shares redeemed

(11,830,086

)

(13,785,402

)

CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS

(4,573,521

)

28,496,972

Change in net assets

(6,844,783

)

24,836,315

Net Assets:

Beginning of period

63,647,960

38,811,645

End of period

56,803,177

63,647,960

See Notes which are an integral part of the Financial Statements

Financial Highlights--Class A Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
February 29,

Year Ended August 31,

2000

1999

1998

1997

1996

1995

Net Asset Value, Beginning of Period

$10.49

$11.13

$10.73

$10.27

$10.13

$10.01

Income From Investment Operations:

Net investment income

0.26

0.52

0.53

0.55

0.58

0.59

Net realized and unrealized gain (loss) on investments and futures transactions

(0.37

)

(0.64

)

0.40

0.46

0.14

0.12

TOTAL FROM INVESTMENT OPERATIONS

(0.11

)

(0.12

)

0.93

1.01

0.72

0.71

Less Distributions:

Distributions from net investment income

(0.26

)

(0.52

)

(0.53

)

(0.55

)

(0.58

)

(0.59

)

Net Asset Value, End of Period

$10.12

$10.49

$11.13

$10.73

$10.27

$10.13

Total Return¹

(1.10

(1.20

8.84

10.11

7.21

7.48

Ratios to Average Net Assets:

Expenses

0.50

%²

0.50

0.69

0.66

0.60

0.55

Net investment income

5.01

%²

4.70

4.84

5.25

5.61

6.04

Expense waiver/reimbursement³

1.00

%²

1.07

1.42

1.97

2.38

2.41

Supplemental Data:

Net assets, end of period (000 omitted)

$22,694

$28,054

$28,792

$22,000

$17,148

$14,400

Portfolio turnover

1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

2 Computed on an annualized basis.

3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Financial Highlights--Class B Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
February 29,

Year
Ended
August 31,

Period
Ended
August 31,

2000

1999

1998

Net Asset Value, Beginning of Period

$10.49

$11.13

$10.87

Income From Investment Operations:

Net investment income

0.22

0.44

0.33

Net realized and unrealized gain (loss) on investments and futures transactions

(0.37

)

(0.64

)

0.26

TOTAL FROM INVESTMENT OPERATIONS

(0.15

)

(0.20

)

0.59

Less Distributions:

Distributions from net investment income

(0.22

)

(0.44

)

(0.33

)

Net Asset Value, End of Period

$10.12

$10.49

$11.13

Total Return²

(1.45

(1.92

5.53

Ratios to Average Net Assets:

Expenses

1.25

%³

1.25

1.40

%³

Net investment income

4.28

%³

3.96

4.14

%³

Expense waiver/reimbursement⁴

0.75

%³

0.82

1.16

%³

Supplemental Data:

Net assets, end of period (000 omitted)

$34,110

$35,594

$10,020

Portfolio turnover

1 Reflects operations for the period from December 31, 1997 (date of initial public investment) to August 31, 1998.

2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

3 Computed on an annualized basis.

4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

FEBRUARY 29, 2000 (UNAUDITED)

ORGANIZATION

Federated Municipal Securities Income Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of six portfolios. The financial statements included herein are only those of Federated California Municipal Income Fund (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income exempt from federal regular income tax (federal regular income tax does not include the federal alternative minimum tax) and personal income taxes imposed by the state of California and California municipalities.

The Fund offers two classes of shares: Class A Shares and Class B Shares.

SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.

Investment Valuation

Municipal bonds are valued by an independent pricing service, taking into consideration yield, liquidity, risk, credit quality, coupon, maturity, type of issue and any other factors or market data the pricing service deems relevant. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value.

Investment Income, Expenses and Distributions

Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights, differences in per share dividend rates are generally due to differences in separate class expenses.

Federal Taxes

It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.

At August 31, 1999, the Fund, for federal tax purposes, had a capital loss carryforward of $732,129, which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire as follows:

Expiration Year		Expiration Amount
2003		$513,799

2004		$218,330

When-Issued and Delayed Delivery Transactions

The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Futures Contracts

The Fund purchases municipal bond futures contracts to manage cash flows, enhance yield and to potentially reduce transaction costs. Upon entering into a municipal bond futures contract with a broker, the Fund is required to deposit in a segregated account a specified amount of cash or U.S. government securities. Futures contracts are valued daily and unrealized gains or losses are recorded in a "variation margin" account. Daily, the Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. For the period ended February 29, 2000, the Fund had realized gains of $35,089 on future contracts.

At February 29, 2000, the Fund had outstanding futures contracts as set forth below:

Expiration
Date

Contracts
to Receive

Position

Unrealized
(Depreciation)

June 2000

50 Municipal Bond

Short

$(1,938)

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.

Other

Investment transactions are accounted for on a trade date basis.

SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Board of Trustees (the "Trustees") to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. Transactions in shares were as follows:

Six Months
Ended
February 29,
2000

Year
Ended
August 31,
1999

Class A Shares:

Shares sold

194,367

900,962

Shares issued to shareholders in payment of distributions declared

21,317

61,949

Shares redeemed

(647,387

)

(874,803

)

NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS

(431,703

)

88,108

Six Months
Ended
February 29,
2000

Period
Ended
August 31,
1999

Class B Shares:

Shares sold

454,733

2,818,762

Shares issued to shareholders in payment of distributions declared

36,124

53,752

Shares redeemed

(513,303

)

(379,001

)

NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS

(22,446

)

2,493,513

NET CHANGE RESULTING FROM SHARE TRANSACTIONS

(454,149

)

2,581,621

INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee and reimburse certain operating expenses of the fund. The Adviser can modify or terminate this voluntary waiver and reimbursement at any time at its sole discretion.

Administrative Fee

Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Class A Shares and Class B Shares. The Plan provides that the Fund may incur distribution expenses according to the following schedule annually, to compensate FSC.

Share Class Name

Percentage of Average
Daily Net Assets of Class

Class A

0.25%

Class B

0.75%

Shareholder Services Fee

Under the terms of a Shareholder Services Agreement with Federated Shareholder Service Company ("FSSC") the Fund will pay FSSC up to 0.25% of the average daily net assets of the Fund's Class A Shares and Class B Shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholders accounts. FSSC may voluntarily choose to waive a portions of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.

Transfer and Dividend Disbursing Agent Fees and Expenses

FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders.

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.

Interfund Transactions

During the period ended February 29, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $24,000,000 and $31,100,000, respectively.

General

Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.

INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the period ended February 29, 2000, were as follows:

Purchases	$	26,507,126

Sales	$	21,643,723

CONCENTRATION OF CREDIT RISK

Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at February 29, 2000, 47.9% of the securities in the portfolio of investments were backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 19.1% of total investments.

Trustees

JOHN F. DONAHUE

THOMAS G. BIGLEY

JOHN T. CONROY, JR.

NICHOLAS P. CONSTANTAKIS

JOHN F. CUNNINGHAM

J. CHRISTOPHER DONAHUE

LAWRENCE D. ELLIS, M.D.

PETER E. MADDEN

CHARLES F. MANSFIELD, JR.

JOHN E. MURRAY, JR., J.D., S.J.D.

MARJORIE P. SMUTS

JOHN S. WALSH

Officers

JOHN F. DONAHUE

Chairman

RICHARD B. FISHER

President

WILLIAM D. DAWSON III

Chief Investment Officer

J. CHRISTOPHER DONAHUE

Executive Vice President

EDWARD C. GONZALES

Executive Vice President

JOHN W. MCGONIGLE

Executive Vice President and Secretary

RICHARD J. THOMAS

Treasurer

LESLIE K. ROSS

Assistant Secretary

Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.

This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses and other information.

Federated
World-Class Investment Manager

SEMI-ANNUAL REPORT

Federated California Municipal Income Fund

SEMI-ANNUAL REPORT
TO SHAREHOLDERS

FEBRUARY 29, 2000

Federated
Federated California Municipal Income Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor

Cusip 313923104
Cusip 313923203

4031005 (4/00)

SEMI-ANNUAL REPORT

President's Message

Dear Shareholder:

I am pleased to present the Semi-Annual Report to Shareholders of Federated Michigan Intermediate Municipal Trust, a portfolio of Federated Municipal Securities Income Trust. This report covers the first half of the fund's fiscal year, which is the six-month reporting period from September 1, 1999 through February 29, 2000. The report begins with a discussion with the fund's portfolio manager, followed by a complete listing of the fund's holdings and financial statements.

Federated Michigan Intermediate Municipal Trust is a convenient way for tax-sensitive Michigan residents to pursue income that is exempt from federal regular income tax and Michigan state income tax.¹ This double tax-free advantage gives investors the opportunity to earn a greater after-tax yield than they could in a comparable high-quality taxable investment.

During the six-month reporting period, the fund paid a monthly dividend stream totaling $0.26 per share. In a rising interest rate environment that caused a broad decline in bond prices, the share price decreased from $10.62 to $10.40. As a result, the fund's six-month total return was 0.43%, based on net asset value.² The fund's net assets totaled $73 million at the end of the reporting period.

Thank you for joining other shareholders of Federated Michigan Intermediate Municipal Trust in pursuing monthly, double tax-free investment income. Of course, you have the option of receiving any income from the fund or building your account by reinvesting your dividends and compounding tax free.

Sincerely,

Richard B. Fisher

Richard B. Fisher
President
April 15, 2000

1 Income may be subject to the federal alternative minimum tax.

2 Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Total return for the six-month reporting period based on offering price was (2.59%).

Investment Review

What is your review of the municipal bond marketplace over the reporting period?

Municipal bond market yields continued to follow the rising trend in general interest rates over the reporting period from September of 1999, to February of 2000, as a result of concern over accelerating real economic growth, valuations in the stock market and potential Federal Reserve Board policy changes. Cash flows in municipal bond funds throughout the industry continued to be net negative over the reporting period as investors used tax-loss selling in their bond funds to offset capital gains in the equity portion of their investment portfolios. The municipal market experienced a significant shift in supply and demand relationships with a lighter new issuance calendar (a decline of 21% over last year) and a lack of institutional demand from funds, insurance companies and arbitrageurs. This technical situation, which existed for most of calendar year 1999, had kept municipal and treasury yield ratios in a historically cheap range. Yields increased across the municipal yield curve over the six-month reporting period ending February 29, 2000. Yields increased by 45 basis points to 5.08% in the seven-year area of the of the AAA general obligation municipal yield curve, by 33 basis points to 5.23% at ten years, and by 28 basis points to 5.90% for 30-year maturities.

How have Michigan municipal bonds performed over the reporting period?

Municipal credit quality continues to benefit from the strong U.S. economy, as reflected by the 4 to 1 ratio of municipal credit upgrades to downgrades by Moody's Investors Services. The hospital sector in Michigan has continued to experience credit deterioration as a result of reductions in Medicare reimbursement from the Federal government. High quality Michigan municipal debt was trading with a spread of approximately 10 basis points to general market yields at the end of the reporting period in February 2000. This negative spread to the general market reflects the fact that the amount of Michigan municipal debt being issued so far this year has declined significantly relative to last year.

How has the Federated Michigan Intermediate Municipal Trust performed with respect to total return and income for the six-month reporting period ended February 29, 2000?

For the six-month reporting period ended February 29, 2000, the Fund produced total returns of 0.43%¹ based on net asset value. The income on the Fund was competitive during the reporting period. The Fund's 30-day current net yield, or SEC yield, on February 29, 2000 was 4.63% based on the net asset value.² The yield represents a increase from the 4.38% SEC yield at the beginning of the reporting period.

1 Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Total return for the six-month reporting period based on offering price was (2.59%).

2 The Fund's 30-day SEC Yield for the period based on offering price was 4.49%.

What accounted for the Fund's performance?

In general, the total return performance for municipal bond funds was negatively impacted by the general increase in interest rates. Credit spread widening in the health sector impacted those municipal bond funds which had exposure to hospitals and continuing care retirement centers. Individual bond structure also impacted performance, with many bonds that were premium callable bonds at the beginning of the year becoming discount bonds, and then market discount bonds, increasing their duration in a bear market. The strategy over the reporting period involved taking advantage of increasing interest rates by swapping into securities with higher book yields but similar structural characteristics (duration, maturity, call protection and credit quality). Portfolio duration has been managed by adjusting cash positions and through the use of a futures hedging strategy which utilizes the municipal futures contract. The focus in the Michigan municipal bond fund is to maximize the current yield provided to shareholders. The strategy involves continuously swapping into securities with higher book yields within a rising interest rate environment while managing portfolio duration within highly defined parameters.

What kind of environment do you see ahead for municipal bonds?

The total issuance of long term municipal bonds is expected to be in the $200 to $230 billion range in the year 2000. The amount of outstanding municipal debt is expected to grow by approximately $80 billion while the stock of treasury debt is falling. This should bias the municipal and treasury yield ratio upward. Relative performance of the municipal market should improve as most of the damage of higher municipal ratios and rising interest rates should have been absorbed in the fiscal year of 1999. Liquidity will continue to be an issue for the municipal market due to a lack of Wall Street analytical resources and reduced institutional demand from arbitrageur and cross-over buyers. Liquidity in the municipal market will also continue to be impacted by the significant amount of bonds in the secondary market with poor structural characteristics (market discounts) which currently have limited appeal for investors.

Portfolio of Investments

FEBRUARY 29, 2000 (UNAUDITED)

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--96.0%

Michigan--96.0%

1,070,000

Anchor Bay, MI, School District, UT GO Q-SBLF Bonds (Series 1999I), 5.75% (FGIC INS)/ (Original Issue Yield: 5.80%), 5/1/2014

AAA

1,080,154

500,000

Avondale, MI, School District, UT GO Q-SBLF Refunding Bonds, 6.75% (Original Issue Yield: 6.95%), 5/1/2014

AA+

515,030

1,090,000

Boyne City, MI, Public School District, UT GO Bonds, 5.60% (FGIC INS)/(Original Issue Yield: 5.70%), 5/1/2014

AAA

1,088,321

1,360,000

Chippewa Hills, MI, School District, UT GO Bonds, 5.25% (Original Issue Yield: 5.30%), 5/1/2014

AAA

1,306,674

460,000

Detroit, MI, Economic Development Corp., Resource Recovery Revenue Bonds (Series A), 6.875% (FSA INS)/(Original Issue Yield: 7.00%), 5/1/2009

AAA

478,607

3,000,000

Detroit, MI, Water Supply System, Revenue Refunding Bonds, 6.00% (FGIC INS)/(Original Issue Yield: 6.10%), 7/1/2002

AAA

3,082,860

1,335,000

Detroit, MI, Refunding UT GO Bonds, 5.75% (FSA INS)/(Original Issue Yield: 4.93%),4/1/2010

AAA

1,355,853

1,000,000

Detroit, MI, UT GO Bonds (Series 1999A), 5.00% (FSA INS)/(Original Issue Yield: 5.16%), 4/1/2019

AAA

879,450

1,000,000

Detroit/Wayne County, MI, Stadium Authority, Revenue Bonds, 5.25% (FGIC INS)/(Original Issue Yield: 5.55%), 2/1/2011

AAA

985,670

1,000,000

Eastern Michigan University, Revenue Bonds, 6.10% (AMBAC INS)/(Original Issue Yield: 6.15%), 6/1/2004

AAA

1,035,380

425,000

Forest Hills, MI, Public School, UT GO Bonds, 7.375% (United States Treasury PRF)/(Original Issue Yield: 7.397%), 5/1/2015 (@101)

431,583

250,000

Garden City, MI, School District, UT GO Refunding Bonds, 5.90% (FSA INS), 5/1/2005

AAA

260,042

565,000

Garden City, MI, School District, UT GO Refunding Bonds, 6.00% (FSA INS), 5/1/2006

AAA

584,702

515,000

Garden City, MI, School District, UT GO Refunding Bonds, 6.10% (FSA INS), 5/1/2007

AAA

535,646

150,000

Huron Valley, MI, School District, UT GO Q-SBLF Bonds, 6.50% (United States Treasury PRF), 5/1/2002 (@102)

156,416

465,000

Ingham County MI, Sewer Authority, Revenue Bonds, Project #4, Delhi Charter Township, 5.90%, 11/1/2005

AA-

479,438

2,000,000

Jackson County, MI, Public Schools, UT GO Q-SBLF Bonds, 5.60% (FGIC INS)/(Original Issue Yield: 5.70%), 5/1/2019

AAA

1,937,040

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Michigan--continued

850,000

Jenison, MI, Public Schools, UT GO School Improvements, 5.30% (United States Treasury PRF) (FGIC INS)/(Original Issue Yield: 5.40%), 5/1/2007 (@101)

AAA

865,750

150,000

Jenison, MI, Public Schools, GO UT School Improvements, 5.30% (FGIC INS)/(Original Issue Yield: 5.40%), 5/1/2007

AAA

151,280

265,000

Kent Hospital Finance Authority, MI, Hospital Revenue Refunding Bonds, 6.30% (Pine Rest Christian Hospital)/(FGIC INS)/(Original Issue Yield: 6.40%), 11/1/2003

AAA

276,477

415,000

Kent Hospital Finance Authority, MI, Hospital Revenue Refunding Bonds, 6.30% (Pine Rest Christian Hospital)/(FGIC INS)/(Original Issue Yield: 6.45%), 11/1/2004

AAA

432,974

500,000

Lake Orion, MI, School District, UT GO Q-SBLF Refunding Bonds, 5.90% (AMBAC INS), 5/1/2001

AAA

508,870

2,000,000

Lake Orion, MI, School District, UT GO Q-SBLF Refunding Bonds, 6.05% (AMBAC INS), 5/1/2002

AAA

2,054,660

750,000

Livonia, MI, Public School District, UT GO Bonds (Series I), 6.00%, 5/1/2001

AA+

763,732

1,710,000

Marquette, MI, Hospital Finance Authority, Hospital Revenue Refunding Bonds (Series 1996B), 5.30% (Marquette General Hospital), 4/1/2005

AAA

1,718,618

1,290,000

Marquette, MI, Hospital Finance Authority, Hospital Revenue Refunding Bonds (Series 1996D), 5.40% (Marquette General Hospital)/(FSA INS), 4/1/2006

AAA

1,298,901

1,350,000

Michigan Higher Education Student Loan Authority, Student Loan Revenue Bonds, (Series XVII-A), 5.65% (AMBAC INS), 6/1/2010

AAA

1,353,834

2,190,000

Michigan Municipal Bond Authority, Revenue Bonds, 5.625% (Drinking Water Revolving Fund)/(Original Issue Yield: 5.39%), 10/1/2013

AA+

2,203,775

1,500,000

Michigan Municipal Bond Authority, Revenue Refunding Q-SBLF Bonds, 6.00% (Original Issue Yield: 6.10%), 5/1/2002

AA+

1,538,835

3,000,000

Michigan Public Power Agency, Revenue Refunding Bonds (Series A) Belle River Project, 5.70% (Original Issue Yield: 5.80%), 1/1/2003

AA-

3,067,860

1,000,000

Michigan State Comprehensive Transportation Board, Revenue Refunding Bonds (Series B), 5.50% (Original Issue Yield: 5.60%), 5/15/2002

AA-

1,016,750

1,000,000

Michigan State Comprehensive Transportation Board, Revenue Refunding Bonds (Series B), 6.00% (Original Issue Yield: 6.05%), 5/15/2007

AA-

1,029,050

1,000,000

Michigan State Hospital Finance Authority, Refunding Revenue Bonds (Series 1998A), 4.90% (St. John Hospital)/ (AMBAC INS)/(Original Issue Yield: 5.05%), 5/15/2013

AAA

936,330

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Michigan--continued

1,000,000

Michigan State Hospital Finance Authority, Revenue Refunding Bonds (Series 1998A), 5.10% (McLaren Health Care Corp.)/ (Original Issue Yield: 5.15%), 6/1/2013

882,370

1,325,000

Michigan State Hospital Finance Authority, Revenue Bonds (Series 1997W), 5.00% (Mercy Health Services)/(Original Issue Yield: 5.26%), 8/15/2011

AA-

1,209,606

2,000,000

Michigan State Hospital Finance Authority, Revenue Bonds (Series 1999A), 6.00% (Ascension Health Credit Group)/(Original Issue Yield: 5.53%), 11/15/2011

AAA

2,077,480

415,000

Michigan State Hospital Finance Authority, Revenue Bonds (Series A), 6.15% (Crittenton Hospital, MI), 3/1/2001

A+

421,399

440,000

Michigan State Hospital Finance Authority, Revenue Bonds (Series A), 6.25% (Crittenton Hospital, MI), 3/1/2002

A+

449,570

500,000

Michigan State Hospital Finance Authority, Revenue Bonds, Providence Hospital, 7.00% (Daughters of Charity)/(United States Treasury PRF)/(Original Issue Yield: 7.04%), 11/1/2021 (@102)

Aa2

528,785

1,500,000

Michigan State Hospital Finance Authority, Revenue Refunding Bonds (Series A), 5.50% (St. John Hospital)/(Original Issue Yield: 5.80%), 5/15/2001

1,519,740

800,000

Michigan State Hospital Finance Authority, Revenue Refunding Bonds, 5.95% (Oakwood Obligated Group)/(FGIC INS)/(Original Issue Yield: 6.05%), 5/1/2002

AAA

818,240

575,000

Michigan State Hospital Finance Authority, Revenue Refunding Bonds, 6.30% (Sparrow Obligated Group)/(MBIA INS), 11/15/2003

AAA

597,638

1,000,000

Michigan State Housing Development Authority, Rental Housing Revenue Bonds (Series A), 5.55% (MBIA INS), 4/1/2004

AAA

1,008,630

575,000

Michigan State Housing Development Authority, Limited Obligation Multifamily Housing Revenue Refunding Bonds (Series 2000A), 6.30% (Oakbrook Villa Townhomes)/ (GNMA Collateralized Home Mortgage Program GTD), 7/20/2019

Aaa

577,898

500,000

Michigan State Housing Development Authority, Revenue Bonds (Series A), 5.90%, 12/1/2005

AA+

509,430

430,000

Michigan State Housing Development Authority, Revenue Bonds (Series A), 6.25%, 6/1/2002

AA+

437,895

200,000

Michigan State Housing Development Authority, Revenue Bonds (Series A), 7.00%, 12/1/2005

AA+

204,162

280,000

Michigan State Housing Development Authority, Revenue Bonds (Series B), 6.30%, 12/1/2003

AA+

287,487

1,000,000

Michigan State Housing Development Authority, Revenue Bonds (Series E), 5.55%, 12/1/2007

AA+

997,540

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Michigan--continued

75,000

Michigan State Housing Development Authority, SFM Revenue Bonds (Series B), 6.95%, 12/1/2020

AA+

76,398

1,000,000

Michigan State, UT GO Recreation Program Bonds, 5.75% (Original Issue Yield: 5.80%), 11/1/2001

AA+

1,020,250

250,000

Michigan Strategic Fund, LT Obligation Revenue Refunding Bonds (Series A), 7.10% (Ford Motor Co.)/(Original Issue Yield: 7.127%), 2/1/2006

A+

273,973

500,000

Michigan Strategic Fund, LT Obligation Revenue Bonds (Series 1998), 5.30% (Porter Hills Presbyterian Village, Inc.)/(Original Issue Yield: 5.422%), 7/1/2018

420,770

4,250,000

Monroe County, MI, Pollution Control Authority, PCR Bonds (Series A), 6.35% (Detroit Edison Co.)/(AMBAC INS), 12/1/2004

AAA

4,438,062

300,000

Oakland & Washtenaw Counties, MI, Revenue Bonds, 6.65% (Oakland Community College District)/(Original Issue Yield: 6.743%), 5/1/2011

AA-

316,197

1,765,000

Oakland County, MI, EDC, LT Obligation Revenue Bonds (Series 1997), 5.50% (Lutheran Social Services of Michigan)/(First of America Bank, LOC), 6/1/2014

Aa3

1,664,130

250,000

Oakland County, MI, LT GO Bonds, Evergreen-Farmington Sewer Disposal, 6.30%, 5/1/2005

AAA

255,963

610,000

Okemos, MI, Public School District, UT GO Q-SBLF Refunding Bonds, 6.00%, 5/1/2002

AA+

627,098

100,000

Ottawa County, MI, LT GO Bonds, Northwest Ottawa Water System, 6.85%, 5/1/2000

100,468

400,000

Plymouth-Canton, MI, Community School District, UT GO Q-SBLF Bonds (Series C), 6.00% (United States Treasury PRF)/(Original Issue Yield: 6.10%), 5/1/2003 (@102)

AA+

417,584

500,000

Plymouth-Canton, MI, Community School District, UT GO Q-SBLF, Refunding Bonds (Series B), 6.80% (United States Treasury PRF)/ (Original Issue Yield: 6.90%), 5/1/2017 (@101)

AA+

518,850

615,000

Riverview, MI, Community School District, UT GO Q-SBLF Bonds, 6.20% (FGIC INS)/(United States Treasury PRF)/(Original Issue Yield: 6.10%), 5/1/2004 (@101.5)

AAA

642,288

570,000

Riverview, MI, Community School District, UT GO Q-SBLF Bonds, 6.20% (FGIC INS)/(United States Treasury PRF)/(Original Issue Yield: 6.00%), 5/1/2003 (@101.5)

AAA

595,291

350,000

Rochester, MI, Community School District, UT GO Q-SBLF Bonds, 6.50% (Michigan State GTD)/(United States Treasury PRF)/(Original Issue Yield: 6.60%), 5/1/2007 (@100)

AA+

362,632

250,000

Rochester, MI, Community School District, UT GO Q-SBLF Bonds, 6.50% (Michigan State GTD)/(United States Treasury PRF)/(Original Issue Yield: 6.75%), 5/1/2011 (@100)

AA+

259,023

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Michigan--continued

1,170,000

Romulus, MI, Community Schools, UT GO Bonds, 6.00% (Original Issue Yield: 5.40%), 5/1/2011

AAA

1,221,445

270,000

Shelby Charter Townships, MI, Building Authority, Revenue Bonds, 6.25% (AMBAC INS)/(Original Issue Yield: 6.45%), 11/1/2006

AAA

282,544

230,000

Shelby Charter Townships, MI, Building Authority, Revenue Bonds, 6.25% (AMBAC INS)/(Original Issue Yield: 6.50%), 11/1/2007

AAA

240,686

250,000

University of Michigan, Hospital Revenue Bonds, 7.00% (United States Treasury PRF)/ (Original Issue Yield: 7.25%), 12/1/2021 (@102)

259,833

1,500,000

University of Michigan, Hospital Revenue Refunding Bonds (Series A), 5.70% (Original Issue Yield: 5.80%), 12/1/2004

1,533,315

1,000,000

Wayne County, MI, Airport Revenue Bonds (Series 1998A), 5.00% (Detroit Metropolitan Wayne County Airport)/(MBIA INS)/(Original Issue Yield: 5.29%), 12/1/2019

AAA

858,690

1,000,000

Wayne County, MI, Building Authority, LT GO Capital Improvement Bonds (Series A), 5.35% (MBIA INS)/(Original Issue Yield: 5.40%), 6/1/2009

AAA

1,005,550

2,000,000

Wayne State University, MI, General Revenue Bonds (Series 1999), 5.375%, (FGIC INS)/ (Original Issue Yield: 5.35%),11/15/2014

AAA

1,948,280

1,000,000

Wyandotte, MI, Electric Authority, Refunding Revenue Bonds, 6.25% (MBIA INS)/(Original Issue Yield: 6.628%), 10/1/2017

AAA

1,020,050

885,000

Wyandotte, MI, Electric Authority, Revenue Refunding Bonds, 6.10%, 10/1/2002

AAA

914,063

1,000,000

Yale, MI, Public Schools District, UT GO Q-SBLF Bonds, 5.25% (FSA INS)/(Original Issue Yield: 5.30%), 5/1/2017

Aaa

933,910

TOTAL LONG-TERM MUNICIPALS (IDENTIFIED COST $69,844,223)

70,145,775

SHORT-TERM MUNICIPALS--1.2%

Michigan--0.9%

700,000

Bruce Township, MI, Hospital Finance Authority Revenue Bonds (Series 1988A) Weekly VRDNs (Sisters of Charity Health Care System)/(MBIA INS)/(Morgan Guaranty Trust Co., New York LIQ)

AAA/A-1+

700,000

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Puerto Rico--0.3%

200,000

Puerto Rico Commonwealth Infrastructure Financing Authority, Floater Certificates (Series 1998-139) Weekly VRDNs (AMBAC INS)/ (Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ)

AAA

200,000

TOTAL SHORT-TERM MUNICIPALS (AT AMORTIZED COST)

900,000

TOTAL INVESTMENTS (IDENTIFIED COST $70,744,223)²

71,045,775

Securities that are subject to alternative minimum tax represent 10.0% of the Fund's portfolio as calculated based upon total market value.

1 Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. Current credit ratings are unaudited.

2 The cost of investments for federal tax purposes amounts to $70,744,223. The net unrealized appreciation of investments on a federal tax basis amounts to $301,552, which is comprised of $1,167,568 appreciation and $866,016 depreciation at February 29, 2000.

Note: The categories of investments are shown as a percentage of net assets ($73,089,740) at February 29, 2000.

The following acronyms are used throughout this portfolio:

AMBAC	--American Municipal Bond Assurance Corporation
EDC	--Economic Development Commission
FGIC	--Financial Guaranty Insurance Company
FSA	--Financial Security Assurance
GNMA	--Government National Mortgage Association
GO	--General Obligation
GTD	--Guaranteed
INS	--Insured
LIQ	--Liquidity Agreement
LOC	--Letter of Credit
LT	--Limited Tax
MBIA	--Municipal Bond Investors Assurance
PCR	--Pollution Control Revenue
PRF	--Prerefunded
Q-SBLF	--Qualified State Bond Loan Fund
SFM	--Single Family Mortgage
UT	--Unlimited Tax
VRDNs	--Variable Rate Demand Notes

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

FEBRUARY 29, 2000 (UNAUDITED)

Assets:

Total investments in securities, at value (identified and tax cost $70,744,223)

71,045,775

Income receivable

1,231,688

Receivable for investments sold

1,020,000

Receivable for shares sold

75,816

Other assets

24,749

TOTAL ASSETS

73,398,028

Liabilities:

Income distribution payable

308,288

TOTAL LIABILITIES

308,288

Net assets for 7,029,715 shares outstanding

73,089,740

Net Assets Consist of:

Paid in capital

74,465,102

Net unrealized appreciation of investments

301,552

Accumulated net realized loss on investments

(1,676,914

)

TOTAL NET ASSETS

73,089,740

Net Asset Value, Offering Price and Redemption Proceeds Per Share:

Net Asset Value Per Share ($73,089,740 ÷ 7,029,715 shares outstanding)

$10.40

Offering Price Per Share (100/97.00 of $10.40)¹

$10.72

Redemption Proceeds Per Share (100.00/100 of $10.40)²

$10.40

1 See "What Do Shares Cost?" in the Prospectus.

2 See "Sales Charge When You Redeem" in the Prospectus.

See Notes which are an integral part of the Financial Statements

Statement of Operations

SIX MONTHS ENDED FEBRUARY 29, 2000 (UNAUDITED)

Investment Income:

Interest

2,029,356

Expenses:

Investment adviser fee

145,403

Administrative personnel and services fee

57,517

Custodian fees

2,619

Transfer and dividend disbursing agent fees and expenses

20,899

Directors'/Trustees' fees

1,189

Auditing fees

6,178

Legal fees

1,964

Portfolio accounting fees

25,952

Shareholder services fee

90,877

Share registration costs

7,781

Printing and postage

7,737

Insurance premiums

515

Miscellaneous

1,510

TOTAL EXPENSES

370,141

Waivers:

Waiver of investment adviser fee

(121,357

)

Waiver of shareholder services fee

(65,431

)

TOTAL WAIVERS

(186,788

)

Net expenses

183,353

Net investment income

1,846,003

Realized and Unrealized Gain (Loss) on Investments:

Net realized loss on investments

(655,729

)

Net change in unrealized appreciation (depreciation) of investments

(921,057

)

Net realized and unrealized gain (loss) on investments

(1,576,786

)

Change in net assets resulting from operations

269,217

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Six Months
Ended
(unaudited)
February 29,
2000

Year
Ended
August 31,
1999

Increase (Decrease) in Net Assets

Operations:

Net investment income

1,846,003

3,821,350

Net realized loss on investments ($(655,729) and $(254,529), respectively, as computed for federal tax purposes)

(655,729

)

(254,529

)

Net change in unrealized appreciation/depreciation

(921,057

)

(3,186,245

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

269,217

380,576

Distributions to Shareholders:

Distributions from net investment income

(1,846,003

)

(3,821,350

)

Share Transactions:

Proceeds from sale of shares

8,707,346

19,980,873

Net asset value of shares issued to shareholders in payment of distributions declared

348,237

859,921

Cost of shares redeemed

(8,898,940

)

(20,621,254

)

CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS

156,643

219,540

Change in net assets

(1,420,143

)

(3,221,234

)

Net Assets:

Beginning of period

74,509,883

77,731,117

End of period

73,089,740

74,509,883

See Notes which are an integral part of the Financial Statements

Financial Highlights

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
February 29,

Year Ended August 31,

2000

1999

1998

1997

1996

1995

Net Asset Value, Beginning of Period

$10.62

$11.09

$10.85

$10.70

$10.80

$10.59

Income From Investment Operations:

Net investment income

0.26

0.53

0.54

0.36

0.54

Net realized and unrealized gain (loss) on investments

(0.22

)

(0.47

)

0.24

0.15

(0.10

)

0.21

TOTAL FROM INVESTMENT OPERATIONS

0.04

0.06

0.77

0.69

0.26

0.75

Less Distributions:

Distributions from net investment income

(0.26

)

(0.53

)

(0.53

)

(0.54

)

(0.36

)

(0.54

)

Net Asset Value, End of Period

$10.40

$10.62

$11.09

$10.85

$10.70

$10.80

Total Return¹

0.43

0.47

7.27

6.59

4.13

7.39

Ratios to Average Net Assets:

Expenses

0.50

%²

0.50

Net investment

5.08

%²

4.81

4.85

5.00

4.99

5.19

Expenses waivers/reimbursement³

0.51

%²

0.50

0.55

0.59

0.63

0.65

Supplemental Data:

Net assets, end of period (000 omitted)

$73,090

$74,510

$77,731

$67,592

$62,785

$60,621

Portfolio turnover

1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

2 Computed on an annualized basis.

3 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

FEBRUARY 29, 2000 (UNAUDITED)

ORGANIZATION

Federated Municipal Securities Income Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of six portfolios. The financial statements included herein are only those of Federated Michigan Intermediate Municipal Trust (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income which is exempt from federal regular income tax and the personal income taxes imposed by the state Michigan and Michigan municipalities.

SIGNIFICANT ACCOUNTING POLICIES

Investment Valuation

Municipal bonds are valued by an independent pricing service, taking into consideration yield, liquidity, risk, credit quality, coupon, maturity, type of issue, and any other factors or market data the pricing service deems relevant. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value.

Investment Income, Expenses and Distributions

Federal Taxes

At August 31, 1999, the Fund, for federal tax purposes, had a capital loss carryforward of $649,939, which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire as follows:

Expiration Year

Expiration Amount

2004

$649,939

When-Issued and Delayed Delivery Transactions

Use of Estimates

Other

Investment transactions are accounted for on a trade date basis.

SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Board of Trustees ("Trustees") to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Transactions in shares were as follows:

Six Months
Ended
February 29,
2000

Year
Ended
August 31,
1999

Shares sold

832,195

1,815,843

Shares issued to shareholders in payment of distributions declared

33,288

78,349

Shares redeemed

(849,710

)

(1,887,770

)

NET CHANGE RESULTING FROM SHARE TRANSACTIONS

15,773

6,422

INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.

Administrative Fee

Shareholder Services Fee

Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.

Transfer and Dividend Disbursing Agent Fees and Expenses

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.

General

Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.

Interfund Transactions

During the period ended February 29, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $21,000,000 and $20,100,000 respectively.

INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the period ended February 29, 2000, were as follows:

Purchases		$15,015,350

Sales		$14,800,289

Concentration of Credit Risk

Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at February 29, 2000, 53.7% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 19.6% of total investments.

Trustees

JOHN F. DONAHUE

THOMAS G. BIGLEY

JOHN T. CONROY, JR.

NICHOLAS P. CONSTANTAKIS

JOHN F. CUNNINGHAM

J. CHRISTOPHER DONAHUE

LAWRENCE D. ELLIS, M.D.

PETER E. MADDEN

CHARLES F. MANSFIELD, JR.

JOHN E. MURRAY, JR., J.D., S.J.D.

MARJORIE P. SMUTS

JOHN S. WALSH

Officers

JOHN F. DONAHUE

Chairman

RICHARD B. FISHER

President

WILLIAM D. DAWSON III

Chief Investment Officer

J. CHRISTOPHER DONAHUE

Executive Vice President

EDWARD C. GONZALES

Executive Vice President

JOHN W. MCGONIGLE

Executive Vice President and Secretary

RICHARD J. THOMAS

Treasurer

LESLIE K. ROSS

Assistant Secretary

Federated
World-Class Investment Manager

SEMI-ANNUAL REPORT

Federated Michigan Intermediate Municipal Trust

SEMI-ANNUAL REPORT
TO SHAREHOLDERS

FEBRUARY 29, 2000

Federated
Federated Michigan Intermediate Municipal Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor

Cusip 313923302

3032602 (4/00)

SEMI-ANNUAL REPORT

President's Message

Dear Shareholder:

I am pleased to present the Semi-Annual Report to Shareholders of Federated North Carolina Municipal Income Fund, a portfolio of Federated Municipal Securities Income Trust. This report covers the first half of the fund's fiscal year, which is the six-month reporting period from September 1, 1999 through February 29, 2000. The report begins with a discussion with the fund's portfolio manager, followed by a complete listing of the fund's holdings and its financial statements.

Federated North Carolina Municipal Income Fund is a convenient way for tax-sensitive North Carolina residents to invest for income that is exempt from federal regular income tax and state personal income tax.¹ This double tax-free income advantage gives investors the opportunity to earn a greater after-tax yield than they could in a comparable high-quality taxable investment.

During the six-month reporting period, the fund's portfolio of 49 quality holdings paid a monthly dividend stream totaling $0.24 per share. The fund also paid a minimal capital gain of $0.01 per share. In a rising interest rate environment that caused bond prices to decline, the fund's share price decreased from $10.44 to $10.15. As a result, the fund achieved a six-month total return of (0.32%), based on net asset value.² The fund's net assets totaled $41 million at the end of the reporting period.

Thank you for joining other shareholders of Federated North Carolina Municipal Income Fund in pursuing monthly, double tax-free investment income. Of course, you have the option of receiving income from the fund or building your account by reinvesting your dividends and compounding tax free.

Sincerely,

Richard B. Fisher

Richard B. Fisher
President
April 15, 2000

1 Income may be subject to the federal alternative minimum tax.

Investment Review

What is your review of the municipal bond marketplace over the reporting period?

Municipal bond market yields continued to follow the rising trend in general interest rates over the reporting period from September of 1999, to February of 2000, as a result of concern over accelerating real economic growth, valuations in the stock market and potential Federal Reserve Board policy changes. By the end of the reporting period, yields increased by 33 basis points to 5.23% in the ten-year area of the AAA general obligation municipal yield curve and by 28 basis points to 5.90% for 30-year maturities. Treasury yields also increased, but not as much as municipal yields, resulting in 30-year A rated municipal bonds yielding over 100% of 30-year treasuries. Municipal bond prices also fell in the face of weak demand for tax exempt securities from both corporations, insurance companies and municipal bond funds. Cash flows in municipal bond funds throughout the industry continued to be net negative over the reporting period as investors used tax-loss selling in their bond funds to offset capital gains in the equity portion of their investment portfolios. The weakness in bond prices, caused by rising rates and weak demand, hurt the Fund's returns. Excluding sales charges, cumulative total returns for the six-month reporting period ended February 29, 2000 was (0.32%) for the Fund's Shares based on net asset value.¹

How has the Federated North Carolina Municipal Income Fund, Inc. performed compared to that of its peers?

We were pleased with the Fund's superior performance compared to its peers. We outpaced our peer average by having a greater percentage in higher rated securities and a very neutral portfolio duration. The Fund's 30-day current net yield, or SEC yield on February 29, 2000 was 4.83%.² The yield represents an increase from the 4.26% SEC yield at the beginning of the period based on net asset value.This represents a taxable equivalent yield of 9.17% based on a combination of state and federal rates.

1 Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. The total return for the six-month reporting period based on offering price was (4.79%).

2 The Fund's 30-day SEC Yield for the period based on offering price was 4.61%.

What are the Fund's top five long-term holdings based on market value?

Description	Rating	Coupon	Market Value	Percentage of Market Value
North Carolina Municipal Power Agency (Catawba Electric) Revenue Bonds (Pre-refunded)	AAA	10.50	$2,340,268	5.61%

Charlotte, NC Airport, Revenue Bonds, Series B (MBIA Insured)	AAA	5.88	$1,970,300	4.72%

Cumberland County, NC Finance Corporation (Detention Center & Mental Health Facility) Insured--FSA Insured	AAA	5.50	$1,894,160	4.54%

Wilmington, NC, Certificates Of Participation (Series A) Insured--MBIA Insured	AAA	5.35	$1,875,524	4.49%

Martin County, NC (Weyerhaeuser Co.)	A	6.00	$1,851,140	4.48%

What was the credit quality as of 2/29/2000?

The Fund had an average portfolio quality rating equivalent to AAA. The allocation is as follows:

AAA		52.8%
AA		18.0%
A		13.0%
BBB		5.9%
A-1/P-1		10.3%

What kind of environment do you see ahead for municipal bonds and how will you position the Fund?

We expect a more positive environment for municipal bonds in the year 2000, as we think most of the rise in long term interest rates has occurred. However, we will continue to target a neutral duration until the direction of economic growth and interest rates is clearer. Other goals include raising the portfolio income by swapping lower yielding securities for higher yielding securities and maintaining the Fund's high credit quality.

Portfolio of Investments

FEBRUARY 29, 2000 (UNAUDITED)

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--90.5%

North Carolina--90.5%

250,000

Catawba County, NC, GO UT Bonds, 5.70%, 6/1/2003

AA-

257,125

500,000

Catawba County, NC, GO UT Bonds, 5.75%, 6/1/2007

AA-

518,400

500,000

Catawba County, NC, Hospital Refunding Revenue Bonds, 5.85% (Catawba Memorial Hospital)/(United States Treasury GTD)/(Original Issue Yield: 5.90%), 10/1/2004

AAA

522,205

500,000

Catawba County, NC, Hospital Refunding Revenue Bonds, 5.95% (Catawba Memorial Hospital)/(United States Treasury GTD)/(Original Issue Yield: 6.00%), 10/1/2005

AAA

523,410

2,000,000

Charlotte, NC, Airport, Revenue Bonds, Series B, 5.875% (MBIA INS)/(Original Issue Yield: 5.95%), 7/1/2019

AAA

1,970,300

500,000

Charlotte, NC, GO UT Public Improvement Bonds, 5.30%, 4/1/2008

AAA

506,700

500,000

Chatham County, NC, GO UT Bonds, 5.40%, 4/1/2007

A+

508,955

500,000

Chatham County, NC, GO UT Bonds, 5.40%, 4/1/2010

A+

505,595

2,000,000

Cumberland County, NC, Finance Corp., Installment Payment Revenue Bonds (Series 1999), 5.50% (Detention Center & Mental Health Facility Project)/(FSA INS)/(Original Issue Yield: 5.75%), 6/1/2019

AAA

1,894,160

1,000,000

Cumberland County, NC, GO UT Bonds, 5.70% (Original Issue Yield: 5.78%), 3/1/2017

AA-

1,001,620

1,200,000

Dare County, NC, Utility System Revenue Bonds (Series A), 5.25%, 6/1/2016

AAA

1,135,248

470,000

Duplin County, NC, GO UT Bonds, 5.30% (MBIA INS)/(Original Issue Yield: 5.40%), 4/1/2007

AAA

475,927

500,000

Durham & Wake Counties, NC, Special Airport District, GO UT Refunding Bonds, 5.75% (Original Issue Yield: 5.80%), 4/1/2002

AAA

511,455

1,000,000

Fayetteville, NC, Public Works Commission, Revenue Bonds (Series 1999), 5.70% (Original Issue Yield: 5.79%), 3/1/2019

AAA

979,670

250,000

Fayetteville, NC, Public Works Commission, Revenue Bonds (Series B), 5.90% (FSA LOC)/ (Original Issue Yield: 6.00%), 3/1/2007

AAA

256,535

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

North Carolina--continued

900,000

Gastonia, NC, Combined Utilities System, Water & Sewer Revenue Bonds, 5.625% (Original Issue Yield: 5.85%), 5/1/2019

AAA

875,250

500,000

Guilford County, NC, GO UT Bonds, 5.30% (Original Issue Yield: 5.40%), 5/1/2010

AA+

503,285

500,000

Guilford County, NC, GO UT Bonds, 5.30%, 5/1/2009

AA+

504,845

500,000

Guilford County, NC, GO UT Bonds, 5.40% (Original Issue Yield: 5.55%), 4/1/2009

AA+

508,415

1,000,000

Haywood County, NC Industrial Facilities & PCFA, Revenue Refunding Bonds, 6.40% (Champion International Corp. Project)/(Original Issue Yield: 6.42%), 11/1/2024

Baa1

966,840

500,000

Iredell County, NC, Certificates of Participation, 5.50% (FGIC INS)/(Original Issue Yield: 5.60%), 6/1/2001

AAA

506,510

350,000

Iredell County, NC, Certificates of Participation, 6.125% (FGIC INS)/(Original Issue Yield: 6.23%), 6/1/2007

AAA

364,151

1,250,000

Johnston County, NC, Finance Corp., Installment Payment Revenue Bonds, 5.25% (Johnston County, NC)/(FSA LOC)/(Original Issue Yield: 5.377%), 8/1/2021

AAA

1,135,625

2,000,000

Martin County, NC, IFA, (Series 1995) Solid Waste Disposal Revenue Bonds, 6.00% (Weyerhaeuser Co.), 11/1/2025

1,851,140

500,000

Mooresville, NC, Grade School District Facilities, Certificates of Participation, 6.30% (AMBAC INS)/(Original Issue Yield: 6.348%), 10/1/2009

AAA

527,000

500,000

Morganton, NC, GO UT Revenue Bonds, 5.60% (FGIC INS), 6/1/2007

AAA

515,175

500,000

New Hanover County, NC, (Project R-5) GO UT Bonds, 5.40% (Original Issue Yield: 5.45%), 3/1/2009

AA-

507,655

1,000,000

New Hanover County, NC, Public Improvement UT GO Bonds, 5.40%, 11/1/2009

AA-

1,016,110

500,000

North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds (Series 1999D), 6.70%, 1/1/2019

BBB

506,085

1,000,000

North Carolina HFA, Home Ownership Revenue Bonds (Series 5-A), 5.55%, 1/1/2019

934,360

1,000,000

North Carolina HFA, Home Ownership Revenue Bonds (Series 6-A), 6.10%, 1/1/2018

1,003,990

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

North Carolina--continued

1,000,000

North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds (Series 1999), 6.25% (Stanly Memorial Hospital Project)/(Original Issue Yield: 6.40%), 10/1/2019

972,990

625,000

North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, 5.50% (Scotland Memorial Hospital Project)/(Asset Guaranty INS)/(Original Issue Yield: 5.593%), 10/1/2019

575,400

1,000,000

North Carolina Medical Care Commission, Hospital Revenue Bonds, 6.125% (Southeastern Regional Medical Center)/(Original Issue Yield: 6.25%), 6/1/2019

960,080

200,000

North Carolina Medical Care Commission, Hospital Revenue Bonds, 5.95% (Presbyterian Health Services Corp.)/(Original Issue Yield: 6.00%), 10/1/2007

209,214

1,000,000

North Carolina Municipal Power Agency No. 1, Revenue Bonds (Series 1999B), 6.50% (Catawba Electric)/(Original Issue Yield: 6.73%), 1/1/2020

BBB+

993,280

1,850,000

North Carolina Municipal Power Agency No. 1, Revenue Bonds, 10.50% (Catawba Electric)/ (United States Treasury GTD), 1/1/2010

AAA

2,340,268

500,000

North Carolina Municipal Power Agency No. 1, Revenue Refunding Bonds, 5.25% (Catawba Electric)/(AMBAC INS)/(Original Issue Yield: 5.55%), 1/1/2008

AAA

498,215

500,000

North Carolina Municipal Power Agency No. 1, Revenue Refunding Bonds, 5.75% (Catawba Electric)/(AMBAC INS)/(Original Issue Yield: 5.80%), 1/1/2002

AAA

508,275

1,200,000

Piedmont Triad, NC, Airport Authority, Airport Revenue Bonds (Series 1999A), 5.875% (Original Issue Yield: 6.02%), 7/1/2019

AAA

1,203,828

1,500,000

Pitt County, NC, Refunding Bonds, 5.25% (Pitt County Memorial Hospital)/(United States Treasury GTD)/(Original Issue Yield: 5.85%), 12/1/2021

Aaa

1,389,030

500,000

Rowan County, NC, GO UT Bonds, 5.60% (MBIA INS), 4/1/2009

AAA

514,860

600,000

Wake County, NC, Industrial Facilities & PCFA, Revenue Bonds, 6.90% (Carolina Power & Light Co.), 4/1/2009

613,182

500,000

Wilmington, NC, Water & Sewer System, Revenue Bonds (Series 1999), 5.625% (Original Issue Yield: 5.76%), 6/1/2018

Aaa

488,250

2,050,000

Wilmington, NC, Certificates of Participation (Series A), 5.35% (Original Issue Yield: 5.45%), 6/1/2024

AAA

1,875,524

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

North Carolina--continued

500,000

Winston-Salem, NC, GO UT Bonds, 5.40% (Original Issue Yield: 5.50%), 6/1/2011

AAA

507,330

TOTAL LONG-TERM MUNICIPALS (IDENTIFIED COST $37,837,359)

37,443,467

SHORT-TERM MUNICIPALS--10.4%

North Carolina--7.7%

1,100,000

Person County, NC, Industrial Facilities & PCFA, Daily VRDNs (Carolina Power & Light Co.)/(SunTrust Bank, Atlanta LOC)

P-1

1,100,000

2,100,000

Wake County, NC, Industrial Facilities & PCFA, (Series 1990B) Daily VRDNs (Carolina Power & Light Co.)/(Bank of New York, New York LOC)

VMIG1

2,100,000

TOTAL

3,200,000

Puerto Rico--2.7%

1,100,000

Puerto Rico Commonwealth Infrastructure Financing Authority, Floater Certificates (Series 1998-139) Weekly VRDNs (AMBAC INS)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ)

A-1c

1,100,000

TOTAL SHORT-TERM MUNICIPALS (AT AMORTIZED
COST $4,300,000)

4,300,000

TOTAL INVESTMENTS (IDENTIFIED COST $42,137,359)²

41,743,467

Securities that are subject to alternative minimum tax represent 18.7% of the Fund's portfolio based upon total portfolio market value.

1 Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. Current credit ratings are unaudited.

2 The cost of investments for federal tax purposes amounts to $42,137,359. The net unrealized depreciation of investments on a federal tax basis amounts to $393,892, which is comprised of $288,522 appreciation and $682,414 depreciation at February 29, 2000.

Note: The categories of investments are shown as a percentage of net assets ($41,352,079) at February 29, 2000.

The following acronyms are used throughout this portfolio:

AMBAC	--American Municipal Bond Assurance Corporation
FGIC	--Financial Guaranty Insurance Company
FSA	--Financial Security Assurance
GO	--General Obligation
GTD	--Guaranteed
HFA	--Housing Finance Authority
IFA	--Industrial Finance Authority
INS	--Insured
LIQ	--Liquidity Agreement
LOC	--Letter of Credit
MBIA	--Municipal Bond Investors Assurance
PCFA	--Pollution Control Finance Authority
UT	--Unlimited Tax
VRDNs	--Variable Rate Demand Notes

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

FEBRUARY 29, 2000 (UNAUDITED)

Assets:

Total investments in securities, at value (identified and tax cost $42,137,359)

41,743,467

Cash

74,101

Income receivable

666,258

Receivable for daily variation margin

1,875

Other assets

23,710

TOTAL ASSETS

42,509,411

Liabilities:

Payable for investments purchased

988,600

Income distribution payable

166,544

Payable for daily variation margin

2,188

TOTAL LIABILITIES

1,157,332

Net Assets for 4,075,644 shares outstanding

41,352,079

Net Assets Consist of:

Paid in capital

42,542,985

Net unrealized depreciation of investments and futures transactions

(394,280

)

Accumulated net realized loss on investments and futures transactions

(796,626

)

TOTAL NET ASSETS

41,352,079

Net Asset Value, Offering Price and Redemption Proceeds Per Share:

Net Asset Value Per Share ($41,352,079 ÷ 4,075,644 shares outstanding)

$10.15

Offering Price Per Share (100/95.50 of $10.15)¹

$10.63

Redemption Proceeds Per Share (100.00/100 of $10.15)²

$10.15

1 See "What Do Shares Cost?" in the Prospectus.

2 See "Contingent Deferred Sales Charge" in the Prospectus.

See Notes which are an integral part of the Financial Statements

Statement of Operations

SIX MONTHS ENDED FEBRUARY 29, 2000 (UNAUDITED)

Investment Income:

Interest

1,115,398

Expenses:

Investment adviser fee

81,053

Administrative personnel and services fee

57,831

Custodian fees

720

Transfer and dividend disbursing agent fees and expenses

13,284

Directors'/Trustees' fees

Auditing fees

6,074

Legal fees

6,008

Portfolio accounting fees

21,447

Distribution services fee

50,658

Shareholder services fee

50,658

Share registration costs

12,797

Printing and postage

6,681

Insurance premiums

526

Miscellaneous

5,115

TOTAL EXPENSES

312,899

Waivers and Reimbursements:

Waiver of investment adviser fee

(81,053

)

Waiver of distribution services fee

(50,658

)

Reimbursement of other operating expenses

(20,217

)

TOTAL WAIVERS AND REIMBURSEMENTS

(151,928

)

Net expenses

160,971

Net investment income

954,427

Realized and Unrealized Loss on Investments and Futures Transactions:

Net realized loss on investments and futures transactions

(635,850

)

Net change in unrealized depreciation of investments and futures transactions

(470,151

)

Net realized and unrealized loss on investments and futures transactions

(1,106,001

)

Change in net assets resulting from operations

(151,574

)

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Six Months
(unaudited)
Ended
February 29,
2000

Three
Months
Ended
August 31,
1999

Year
Ended
May 31,
1999

Increase (Decrease) in Net Assets

Operations:

Net investment income

954,427

435,864

1,722,921

Net realized gain (loss) on investments and futures transactions ($(635,850), $(159,344) and $181,395, respectively, as computed for federal tax purposes)

(635,850

)

(159,344

)

181,395

Net change in unrealized depreciation

(470,151

)

(903,157

)

(440,652

)

CHANGE IN NET ASSETS RESULTING
FROM OPERATIONS

(151,574

)

(626,637

)

1,463,664

Distributions to Shareholders:

Distributions from net investment income

(955,347

)

(435,689

)

(1,722,921

)

Distributions from net realized gains

(57,169

)

(367,968

)

CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS

(1,012,516

)

(435,689

)

(2,090,889

)

Share Transactions:

Proceeds from sale of shares

4,596,891

3,798,955

10,238,583

Net asset value of shares issued to shareholders in payment of distributions declared

84,659

34,404

188,967

Cost of shares redeemed

(3,347,256

)

(1,766,138

)

(5,636,038

)

CHANGE IN NET ASSETS RESULTING FROM
SHARE TRANSACTIONS

1,334,294

2,067,221

4,791,512

Change in net assets

170,204

1,004,895

4,164,287

Net Assets:

Beginning of period

41,181,875

40,176,980

36,012,693

End of period

41,352,079

41,181,875

40,176,980

1 On July 23, 1999, the CCB North Carolina Municipal Securities Fund was reorganized as a portfolio Municipal Securities Income Trust and was renamed Federated North Carolina Municipal Income Fund. In addition, the Fund also changed its fiscal year end from May 31 to August 31.

See Notes which are an integral part of the Financial Statements

Financial Highlights

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
(unaudited)
Ended
February 29,

Three
Months
Ended
August 31,

Year Ended May 31,

2000

1999

1998

1997

1996

1995

Net Asset Value, Beginning of Period

$10.44

$10.72

$10.89

$10.57

$10.34

$10.44

$10.17

Income From Investment Operations:

Net investment income

0.24

0.11

0.47

0.45

0.49

0.48

Net realized and unrealized gain (loss) on investments and futures transactions

(0.28

)

(0.28

)

(0.07

)

0.32

0.23

(0.10

)

0.27

TOTAL FROM INVESTMENT OPERATIONS

(0.04

)

(0.17

)

0.40

0.77

0.72

0.39

0.75

Less Distributions:

Distributions from net investment income

(0.24

)

(0.11

)

(0.47

)

(0.45

)

(0.49

)

(0.49

)

(0.48

)

Distributions from net realized gain on investments

(0.01

)

(0.10

)

TOTAL DISTRIBUTIONS

(0.25

)

(0.11

)

(0.57

)

(0.45

)

(0.49

)

(0.49

)

(0.48

)

Net Asset Value,
End of Period

$10.15

$10.44

$10.72

$10.89

$10.57

$10.34

$10.44

Total Return²

(0.32

(1.56

3.65

7.77

7.13

3.72

7.71

Ratios to Average
Net Assets:

Expenses

0.79

%³

0.64

%³

0.52

0.51

0.63

0.52

0.57

Net investment income

4.71

%³

4.27

%³

4.28

4.50

4.60

4.73

4.82

Expense waiver/reimbursement⁴

0.75

%³

1.22

%³

0.75

Supplemental Data:

Net assets, end of period (000 omitted)

$41,352

$41,182

$40,177

$36,013

$35,892

$36,872

$39,803

Portfolio turnover

2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

3 Computed on an annualized basis.

4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

FEBRUARY 29, 2000 (UNAUDITED)

ORGANIZATION

Federated Municipal Securities Income Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of six portfolios. The financial statements included herein are only those of Federated North Carolina Municipal Income Fund (formerly CCB North Carolina Municipal Securities Fund) (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income exempt from federal regular income tax and the personal income taxes imposed by the state of North Carolina.

REORGANIZATION

On July 23, 1999, the CCB North Carolina Municipal Securities Fund was reorganized as a portfolio of Federated Municipal Securities Income Trust and was renamed Federated North Carolina Municipal Income Fund. In addition, the Fund changed its fiscal year end from May 31 to August 31.

SIGNIFICANT ACCOUNTING POLICIES

Investment Valuation

Investment Income, Expenses and Distributions

Federal Taxes

When-Issued and Delayed Delivery Transactions

Futures Contracts

The Fund purchases municipal bond futures contracts to manage cash flows, enhance yield, and to potentially reduce transaction costs. Upon entering into a municipal bond futures contract with a broker, the Fund is required to deposit in a segregated account a specified amount of cash or U.S. government securities. Futures contracts are valued daily and unrealized gains or losses are recorded in a "variation margin" account. Daily, the Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with changes in the value of the underlying securities. For the period ended February 29, 2000, the Fund had realized losses of $(8,900) on futures contracts.

At February 29, 2000, the Fund had an outstanding futures contract as set forth below:

Expiration
Date

Contracts
to Receive

Position

Unrealized
(Depreciation)

June 2000

10 Municipal Bond Index Futures

Short

$(388)

Use of Estimates

Other

Investment transactions are accounted for on a trade date basis.

SHARES OF BENEFICIAL INTEREST

Six Months
Ended
February 29,
2000

Three Months
Ended
August 31,
1999

Year
Ended
May 31,
1999

Shares sold

451,443

360,848

939,308

Shares issued to shareholders in payment of distributions declared

8,318

3,277

17,279

Shares redeemed

(327,930

)

(167,597

)

(516,525

)

NET CHANGE RESULTING FROM FUND
SHARE TRANSACTIONS

131,831

196,528

440,062

1 The Fund changed its fiscal year end from May 31 to August 31.

INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary waiver and/or reimbursement at any time at its sole discretion.

Federated Investment Management Company became the Fund's investment adviser on July 23, 1999. Prior to July 23, 1999, Central Carolina Bank and Trust Company served as the Fund's investment adviser and received for its services an annual investment advisory fee equal to 0.75% of the Fund's average daily net assets.

Administrative Fee

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Fund shares. The Plan provides that the Fund may incur distribution expenses up to 0.25% of the average daily net assets of the Fund shares, annually, to compensate FSC. The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.

Prior to July 23, 1999, the CCB North Carolina Municipal Securities Fund did not pay or accrue a distribution services fee.

Shareholder Services Fee

Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.

Prior to July 23, 1999, the CCB North Carolina Municipal Securities Fund did not pay or accrue a shareholder services fee.

Transfer and Dividend Disbursing Agent Fees and Expenses

FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.

Interfund Transactions

During the period ended February 29, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $21,600,000 and $19,100,000, respectively.

General

Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.

INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the period ended February 29, 2000, were as follows:

Purchases	$	17,374,613

Sales	$	19,483,228

Concentration of Credit Risk

Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at February 29, 2000, 33.6% of the securities in the portfolio of investments were backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 7.1% of total investments.

Trustees

JOHN F. DONAHUE

THOMAS G. BIGLEY

JOHN T. CONROY, JR.

NICHOLAS P. CONSTANTAKIS

JOHN F. CUNNINGHAM

J. CHRISTOPHER DONAHUE

LAWRENCE D. ELLIS, M.D.

PETER E. MADDEN

CHARLES F. MANSFIELD, JR.

JOHN E. MURRAY, JR., J.D., S.J.D.

MARJORIE P. SMUTS

JOHN S. WALSH

Officers

JOHN F. DONAHUE

Chairman

RICHARD B. FISHER

President

WILLIAM D. DAWSON III

Chief Investment Officer

J. CHRISTOPHER DONAHUE

Executive Vice President

EDWARD C. GONZALES

Executive Vice President

JOHN W. MCGONIGLE

Executive Vice President and Secretary

RICHARD J. THOMAS

Treasurer

LESLIE K. ROSS

Assistant Secretary

Federated
World-Class Investment Manager

SEMI-ANNUAL REPORT

Federated North Carolina Municipal Income Fund

SEMI-ANNUAL REPORT TO SHAREHOLDERS

FEBRUARY 29, 2000

Federated
Federated North Carolina Municipal Income Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor

Cusip 313923500

G02671-04 (4/00)

SEMI-ANNUAL REPORT

President's Message

Dear Shareholder:

I am pleased to present the Semi-Annual Report to Shareholders of Federated New York Municipal Income Fund, a portfolio of Federated Municipal Securities Income Trust. This report covers the first half of the fund's fiscal year, which is the six-month reporting period from September 1, 1999 through February 29, 2000. The report begins with a discussion with the fund's portfolio manager, followed by a complete listing of the fund's holdings and its financial statements.

Federated New York Municipal Income Fund is a convenient way for tax-sensitive New York residents to invest for income that is exempt from federal regular income tax, state income tax and New York City local income tax.¹ This double tax-free advantage (triple tax-free for New York City residents) gives investors the opportunity to earn a greater after-tax yield than they could in a comparable high-quality taxable investment.

During the six-month reporting period, the fund's portfolio of quality holdings paid a monthly dividend stream totaling $0.26 per share. In a rising interest rate environment that caused a broad decline in bond prices, the fund's share price decreased from $10.36 to $9.95. As a result, the fund achieved a six-month total return of (1.40%) based on net asset value.² The fund's net assets totaled $22 million at the end of the reporting period.

Thank you for joining other shareholders of Federated New York Municipal Income Fund in pursuing monthly, double tax-free investment income. Of course, you have the option of receiving income from the fund or building your account by reinvesting your dividends and compounding tax free.

Sincerely,

Richard B. Fisher

Richard B. Fisher
President
April 15, 2000

1 Income may be subject to the federal alternative minimum tax.

Investment Review

What is your review of the municipal bond marketplace over the reporting period?

Municipal bond market yields continued to follow the rising trend in general interest rates over the reporting period from September 1999 to February 2000, as a result of concern over accelerating real economic growth, valuations in the stock market and potential Federal Reserve Board policy changes. Cash flows in municipal bond funds throughout the industry continued to be net negative over the period as investors used tax-loss selling in their bond funds to offset capital gains in the equity portion of their investment portfolios. The municipal market experienced a significant shift in supply and demand relationships with a lighter new issuance calendar (a decline of 21% over last year) and a lack of institutional demand from funds, insurance companies and arbitrageurs. This technical situation, which existed for most of the calendar year in 1999, kept municipal and treasury yield ratios in a historically cheap range. Yields increased across the municipal yield curve over the six-month reporting period ending February 29, 2000. Yields increased by 33 basis points to 5.23% in the ten-year area of the AAA general obligation municipal yield curve and by 28 basis points to 5.90% for 30-year maturities.

How have New York municipal bonds performed over the reporting period?

Municipal credit quality continues to benefit from the strong U.S. economy, as reflected by the 4 to 1 ratio of municipal credit upgrades to downgrades by Moody's Investors Services. The hospital sector in New York has continued to experience credit deterioration as a result of reductions in Medicare reimbursement from the Federal government. The issuance of new New York municipal debt in January and February 2000 has declined by approximately 34% when compared with the same period during 1999. New York municipal debt was trading with a spread of approximately 28 basis points to the benchmark AAA municipal yield curve at the end of February 2000. This is close to the six-month average of 30.6 basis points.

How has the Federated New York Municipal Income Fund performed with respect to total return and income for the six-month reporting period ended February 29, 2000?

For the six-month reporting period ended February 29, 2000, the Fund produced a total return of (1.40%) based on net asset value.¹ The income on the Fund was competitive during the reporting period. The Fund's 30-day current net yield, or SEC yield, on February 29, 2000 was 5.14% based on net asset value.² The yield represents an increase from the 4.97% SEC yield at the beginning of the period.

1 Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The total return for the six-month reporting period based on offering price was (5.86%).

2 The Fund's 30-day SEC Yield based on offering price was 4.90%.

What accounted for the Fund's performance?

In general, the total return performance for municipal bond funds was negatively impacted by the general increase in interest rates. Individual bond structure also impacted performance, with many bonds that were premium callable bonds at the beginning of the year becoming discount bonds, and then market discount bonds, increasing their duration in a rising rate environment. The strategy over the reporting period involved taking advantage of increasing interest rates by swapping into securities with higher book yields but similar structural characteristics (duration, maturity and call protection) and credit quality. Portfolio duration has been managed by adjusting cash positions and through the use of a futures hedging strategy which utilizes the municipal futures contract. The focus in New York Municipal Income Fund is to maximize the current yield provided to shareholders. The strategy involves continuously swapping into securities with higher book yields within a rising interest rate environment while managing portfolio duration within highly defined parameters.

What kind of environment do you see ahead for municipal bonds?

The total issuance of long-term municipal bonds is expected to be in the $200 to $230 billion range in the year 2000. The amount of outstanding municipal debt is expected to grow by approximately $80 billion while the stock of treasury debt is falling. This should bias the municipal and treasury yield ratio upward. Relative performance of the municipal market should improve as most of the damage of higher municipal ratios and rising interest rates should have been absorbed in the fiscal year of 1999. Liquidity will continue to be an issue for the municipal market due to a lack of Wall Street analytical resources and reduced institutional demand from arbitrageur and cross-over buyers. Liquidity in the municipal market will also continue to be impacted by the significant amount of bonds in the secondary market with poor structural characteristics (market discounts) which currently have limited appeal for investors.

Portfolio of Investments

FEBRUARY 29, 2000 (UNAUDITED)

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--93.5%

New York--93.5%

1,000,000

Amherst, NY IDA, Tax-Exempt Lease Revenue Bonds (Series 1997A), 5.55% (KeyBank, N.A. LOC)/(Original Issue Yield: 5.65%), 10/1/2017

1,032,980

500,000

Essex County, NY IDA, PCR Refunding Bonds (Series 1997C), 5.70% (International Paper Co.), 7/1/2016

BBB+

482,705

500,000

Essex County, NY IDA, Solid Waste Disposal Revenue Bonds (Series A), 5.80% (International Paper Co.), 12/1/2019

BBB+

451,300

500,000

Long Island Power Authority, Electric System General Revenue Bonds, (Series 1998A), 5.50% (Original Issue Yield: 5.57%), 12/1/2029

A-

446,790

305,000

Nassau County, NY IDA, Civic Facility Revenue Bonds, 6.85% (Hofstra University), 1/1/2012

332,593

330,000

Nassau County, NY IDA, Civic Facility Revenue Bonds, 6.85% (Hofstra University), 1/1/2013

359,855

500,000

Nassau County, NY Tobacco Settlement Corp., Asset-Backed Bonds, (Series A), 6.25% (Original Issue Yield: 6.312%), 7/15/2019

A-

490,875

1,000,000

New York City, NY IDA, Civic Facility Revenue Bonds (Series 1995), 6.30% (College of New Rochelle)/(Original Issue Yield: 6.45%), 9/1/2015

Baa2

1,007,060

475,000

New York City, NY IDA, Civic Facility Revenue Bonds, 7.00% (Mt. St. Vincent College), 5/1/2008

502,208

400,000

New York City, NY IDA, Civic Facilities Revenue Bonds, 5.80% (YMCA of Greater NY)/ (Original Issue Yield: 6.10%), 8/1/2016

Baa3

385,592

400,000

New York City, NY IDA, IDRB (Series 1997), 5.75% (Brooklyn Navy Yard Cogeneration Partners, L.P. Project)/(Original Issue Yield: 5.81%), 10/1/2036

BBB-

349,072

400,000

New York City, NY IDA, Revenue Bonds, 5.65% (United Airlines)/(Original Issue Yield: 5.682%), 10/1/2032

BB+

341,356

1,000,000

New York City, NY IDA, Special Facilities Revenue Bonds, 5.25% (British Airways), 12/1/2032

807,350

750,000

New York City, NY IDA, Special Facilities Revenue Bonds, 6.90% (American Airlines), 8/1/2024

BBB-

759,225

1,000,000

New York City, NY Transitional Finance Authority, Future Tax Secured Revenue Bonds (Series 2000B), 6.00% (Original Issue Yield: 6.08%), 11/15/2019

1,008,080

500,000

New York City, NY, GO UT Bonds (Series B), 7.25% (Original Issue Yield: 7.55%), 8/15/2019

A-

550,170

1,000,000

New York State Dormitory Authority, Revenue Bonds (Series 1999), 6.00% (Pratt Institute)/ (Asset Guaranty INS), 7/1/2020

987,760

900,000

New York State Dormitory Authority, Revenue Bonds (Series A), 6.50% (University of Rochester, NY)/(Original Issue Yield: 6.582%), 7/1/2019

A+

928,701

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

New York--continued

1,000,000

New York State Dormitory Authority, Revenue Bonds, 5.50% (Long Island University)/(Asset Guaranty INS)/(Original Issue Yield: 5.75%), 9/1/2020

917,750

500,000

New York State Dormitory Authority, Revenue Bonds, 6.25% (Nyack Hospital)/(Original Issue Yield: 6.50%), 7/1/2013

Baa2

472,065

1,000,000

New York State Environmental Facilities Corp., Solid Waste Disposal Revenue Bonds, 6.10% (Occidental Petroleum Corp.)/(Original Issue Yield: 6.214%), 11/1/2030

BBB+

909,830

900,000

New York State Environmental Facilities Corp., Water Facilities Revenue Refunding Bonds (Series A), 6.30% (Spring Valley Water Co., NY)/(AMBAC INS), 8/1/2024

AAA

911,916

1,000,000

New York State HFA, (Series 1995A), Service Contract Obligation Revenue Bonds, 6.375% (Original Issue Yield: 6.45%), 9/15/2015

A-

1,013,980

1,000,000

New York State Medical Care Facilities Finance Agency, FHA-Mortgage Revenue Bonds (Series A), 6.50% (Lockport Memorial Hospital, NY)/ (FHA GTD), 2/15/2035

1,019,880

1,000,000

New York State Medical Care Facilities Finance Agency, Revenue Bonds (Series B), 6.60% (FHA GTD)/(Original Issue Yield: 6.625%), 8/15/2034

1,031,230

2,000,000

New York State Mortgage Agency, Revenue Bonds (Series 40A), 6.70%, 4/1/2025

Aaa

2,057,200

400,000

Niagara Falls, NY CSD, Certificates of Participation (Series 1998), 5.375% (Original Issue Yield: 5.42%), 6/15/2028

BBB-

336,644

500,000

Port Authority of New York and New Jersey, Revenue Bonds (Series 96), 6.60% (FGIC INS)/(Original Issue Yield: 6.65%), 10/1/2023

AAA

525,470

500,000

Suffolk County, NY IDA, IDRB (Series 1998), 5.50%,(Nissequogue Cogen Partners Facility)/(Original Issue Yield: 5.528%), 1/1/2023

417,050

TOTAL LONG-TERM MUNICIPALS (IDENTIFIED COST $21,082,363)

20,836,687

SHORT-TERM MUNICIPALS--4.9%

New York--4.9%

700,000

New York City, NY IDA, IDRB Daily VRDNs (Nippon Cargo Airlines Co.)/(Industrial Bank of Japan Ltd., Tokyo LOC)

BBB+

700,000

400,000

New York City, NY Transitional Finance Authority, (Series 1998A-1) Weekly VRDNs (Morgan Guaranty Trust Co., New York LIQ)

400,000

TOTAL SHORT-TERM MUNICIPALS

1,100,000

TOTAL INVESTMENTS (IDENTIFIED COST $22,182,363)³

21,936,687

Securities subject to alternative minimum tax represent 34.0% of the fund's portfolio based upon total portfolio market value.

1 Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. Current credit ratings are unaudited.

3 The cost of investments for federal tax purposes amounts to $22,182,363. The net unrealized depreciation of investments on a federal tax basis amounts to $245,676, which is comprised of $449,344 appreciation and $695,020 depreciation at February 29, 2000.

Note: The categories of investments are shown as a percentage of net assets ($22,292,825) at February 29, 2000.

The following acronyms are used throughout this portfolio:

AMBAC	--American Municipal Bond Assurance Corporation
CSD	--Central School District
FGIC	--Financial Guaranty Insurance Company
FHA	--Federal Housing Administration
GO	--General Obligation
GTD	--Guaranteed
HFA	--Housing Finance Authority
IDA	--Industrial Development Authority
IDRB	--Industrial Development Revenue Bonds
INS	--Insured
LIQ	--Liquidity Agreement
LOC	--Letter of Credit
UT	--Unlimited Tax
VRDNs	--Variable Rate Demand Notes

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

FEBRUARY 29, 2000 (UNAUDITED)

Assets:

Total investments in securities, at value (identified and tax cost $22,182,363)

21,936,687

Cash

89,269

Income receivable

351,595

Other assets

11,550

TOTAL ASSETS

22,389,101

Liabilities:

Income distribution payable

96,276

TOTAL LIABILITIES

96,276

Net assets for 2,240,786 shares outstanding

22,292,825

Net Assets Consist of:

Paid in capital

23,914,336

Net unrealized depreciation of investments

(245,676

)

Accumulated net realized loss on investments

(1,375,835

)

TOTAL NET ASSETS

22,292,825

Net Asset Value, Offering Price and Redemption Proceeds Per Share:

Net Asset Value Per Share ($22,292,825 ÷ 2,240,786 shares outstanding)

$9.95

Offering Price Per Share (100/95.50 of $9.95)¹

$10.42

Redemption Proceeds Per Share (100.00/100 of $9.95)²

$9.95

1 See "What Do Shares Cost?" in the Prospectus.

2 See "Sales Charge When You Redeem" in the Prospectus.

See Notes which are an integral part of the Financial Statements

Statement of Operations

SIX MONTHS ENDED FEBRUARY 29, 2000 (UNAUDITED)

Investment Income:

Interest

696,814

Expenses:

Investment adviser fee

46,148

Administrative personnel and services fee

55,926

Custodian fees

664

Transfer and dividend disbursing agent fees and expenses

15,033

Directors'/Trustees' fees

1,046

Auditing fees

6,058

Legal fees

1,731

Portfolio accounting fees

23,343

Distribution services fee

57,685

Shareholder services fee

28,843

Share registration costs

6,458

Printing and postage

8,692

Insurance premiums

663

Miscellaneous

1,111

TOTAL EXPENSES

253,401

Waivers and Reimbursements:

Waiver of investment adviser fee

(46,148

)

Waiver of distribution services fee

(55,378

)

Waiver of shareholder services fee

(2,307

)

Reimbursement of other operating expenses

(60,613

)

TOTAL WAIVERS AND REIMBURSEMENTS

(164,446

)

Net expenses

88,955

Net investment income

607,859

Realized and Unrealized Loss on Investments:

Net realized loss on investments

(344,632

)

Net change in unrealized depreciation of investments

(606,059

)

Net realized and unrealized loss on investments

(950,691

)

Change in net assets resulting from operations

(342,832

)

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Six Months
Ended
(unaudited)
February 29,
2000

Year Ended
August 31,
1999

Increase (Decrease) in Net Assets

Operations:

Net investment income

607,859

1,241,404

Net realized loss on investments ($(344,632) and $(43,863), respectively, as computed for federal tax purposes)

(344,632

)

(43,863

)

Net change in unrealized depreciation

(606,059

)

(1,484,014

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

(342,832

)

(286,473

)

Distributions to Shareholders:

Distributions from net investment income

(607,859

)

(1,241,404

)

Share Transactions:

Proceeds from sale of shares

1,660,476

5,840,749

Net asset value of shares issued to shareholders in payment of distributions declared

161,506

551,435

Cost of shares redeemed

(2,925,326

)

(4,868,867

)

CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS

(1,103,344

)

1,523,317

Change in net assets

(2,054,035

)

(4,560

)

Net Assets:

Beginning of period

24,346,860

24,351,420

End of period

22,292,825

24,346,860

See Notes which are an integral part of the Financial Statements

Financial Highlights

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
February 29,

Year Ended August 31,

2000

1999

1998

1997

1996

1995

Net Asset Value, Beginning of Period

$10.36

$11.00

$10.62

$10.17

$10.13

$10.10

Income From Investment Operations:

Net investment income

0.26

0.53

0.54

0.56

0.58

0.57

Net realized and unrealized gain (loss) on investments

(0.41

)

(0.64

)

0.38

0.45

0.04

0.03

TOTAL FROM INVESTMENT OPERATIONS

(0.15

)

(0.11

)

0.92

1.01

0.62

0.60

Less Distributions:

Distributions from net investment income

(0.26

)

(0.53

)

(0.54

)

(0.56

)

(0.58

)

(0.57

)

Net Asset Value, End of Period

$ 9.95

$10.36

$11.00

$10.62

$10.17

$10.13

Total Return¹

(1.40

(1.11

8.83

10.13

6.18

6.41

Ratios to Average Net Assets:

Expenses

0.77

%²

0.70

0.71

0.66

0.60

0.59

Net investment income

5.27

%²

4.89

4.96

5.34

5.62

5.94

Expense waivers/reimbursement³

1.43

%²

1.51

1.60

1.75

1.93

1.74

Supplemental Data:

Net assets, end of period (000 omitted)

$22,293

$24,347

$24,351

$22,386

$21,932

$21,600

Portfolio turnover

1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

2 Computed on an annualized basis.

3 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

FEBRUARY 29, 2000 (UNAUDITED)

ORGANIZATION

Federated Municipal Securities Income Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of six portfolios. The financial statements included herein are only those of Federated New York Municipal Income Fund (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income exempt from federal regular income tax (federal regular income tax does not include the federal alternative minimum tax) and the personal income taxes imposed by the state of New York and New York municipalities.

SIGNIFICANT ACCOUNTING POLICIES

Investment Valuation

Investment Income, Expenses and Distributions

Federal Taxes

At August 31, 1999, the Fund, for federal tax purposes, had a capital loss carryforward of $907,100, which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire as follows:

Expiration Year

Expiration Amount

2004

$907,100

When-Issued and Delayed Delivery Transactions

Use of Estimates

Other

Investment transactions are accounted for on a trade date basis.

SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Transactions in shares were as follows:

Six Months
Ended
February 29,
2000

Year Ended
August 31,
1999

Shares sold

164,903

534,622

Shares issued to shareholders in payment of distributions declared

16,013

50,762

Shares redeemed

(290,272

)

(448,964

)

NET CHANGE RESULTING FROM SHARE TRANSACTIONS

(109,356

)

136,420

INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee or reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary waiver or reimbursement at any time at its sole discretion.

Administrative Fee

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's shares. The Plan provides that the Fund may incur distribution expenses up to 0.50% of the average daily net assets of the Fund shares, annually, to compensate FSC.

The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.

Shareholder Services Fee

Transfer and Dividend Disbursing Agent Fees and Expenses

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.

Interfund Transactions

During the period ended February 29, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $8,600,000 and $7,900,000, respectively.

General

Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.

INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the period ended February 29, 2000, were as follows:

Purchases		$	4,466,160
Sales		$	6,204,051

CONCENTRATION OF CREDIT RISK

Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at February 29, 2000, 23.1% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 8.7% of total investments.

Trustees

JOHN F. DONAHUE

THOMAS G. BIGLEY

JOHN T. CONROY, JR.

NICHOLAS P. CONSTANTAKIS

JOHN F. CUNNINGHAM

J. CHRISTOPHER DONAHUE

LAWRENCE D. ELLIS, M.D.

PETER E. MADDEN

CHARLES F. MANSFIELD, JR.

JOHN E. MURRAY, JR., J.D., S.J.D.

MARJORIE P. SMUTS

JOHN S. WALSH

Officers

JOHN F. DONAHUE

Chairman

RICHARD B. FISHER

President

WILLIAM D. DAWSON III

Chief Investment Officer

J. CHRISTOPHER DONAHUE

Executive Vice President

EDWARD C. GONZALES

Executive Vice President

JOHN W. MCGONIGLE

Executive Vice President and Secretary

RICHARD J. THOMAS

Treasurer

LESLIE K. ROSS

Assistant Secretary

Federated
World-Class Investment Manager

SEMI-ANNUAL REPORT

Federated New York Municipal Income Fund

SEMI-ANNUAL REPORT
TO SHAREHOLDERS

FEBRUARY 29, 2000

Federated
Federated New York Municipal Income Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor

Cusip 313923401

4031009 (4/00)

SEMI-ANNUAL REPORT

President's Message

Dear Shareholder:

I am pleased to present the Semi-Annual Report to Shareholders of Federated Ohio Municipal Income Fund, a portfolio of Federated Municipal Securities Income Trust. This report covers the first half of the fund's fiscal year, which is the six-month reporting period from September 1, 1999 through February 29, 2000. The report begins with a discussion with the fund's portfolio manager, followed by a complete listing of the fund's holdings and its financial statements.

Federated Ohio Municipal Income Fund is a convenient way for tax-sensitive Ohio residents to invest for income that is exempt from federal regular income tax and state income tax.¹ This double tax-free advantage gives investors the opportunity to earn a greater after-tax yield than they could in a comparable high-quality taxable investment.

During the six-month reporting period, the fund's portfolio of 52 quality holdings paid a monthly dividend stream totaling $0.27 per share. In a rising interest rate environment that caused a broad decline in bond prices, the fund's share price decreased from $11.11 to $10.72. As a result, the fund achieved a six-month total return of (1.07%) based on net asset value.² The fund's net assets totaled $75 million at the end of the reporting period.

Thank you for joining other shareholders of Federated Ohio Municipal Income Fund in pursuing monthly, double tax-free investment income. Of course, you have the option of receiving income from the fund or building your account by reinvesting your dividends and compounding tax free.

Sincerely,

Richard B. Fisher

Richard B. Fisher
President
April 15, 2000

1 Income may be subject to the federal alternative minimum tax.

Investment Review

What is your review of the municipal bond marketplace over the reporting period?

Municipal bond market yields continued to follow the rising trend in general interest rates over the period from September 1999 to February 2000, as a result of concern over accelerating real economic growth, valuations in the stock market and potential Federal Reserve Board policy changes. Cash flows in municipal bond funds throughout the industry continued to be net negative over the reporting period as investors used tax-loss selling in their bond funds to offset capital gains in the equity portion of the investment portfolios. The municipal market experienced a significant shift in supply and demand relationships with a lighter new issuance calendar (a decline of 21% over last year) and a lack of institutional demand from funds, insurance companies and arbitrageurs. This technical situation, which existed for most of the calendar year in 1999, kept municipal and treasury yield ratios in a historically cheap range. Yields increased across the municipal yield curve over the six-month reporting period ending February 29, 2000. Yields increased by 33 basis points to 5.23% in the ten-year area of the AAA general obligation municipal yield curve and by 28 basis points to 5.90% for 30-year maturities.

How have Ohio municipal bonds performed over the reporting period?

Municipal credit quality continues to benefit from the strong U.S. economy, as reflected by the 4 to 1 ratio of municipal credit upgrades to downgrades by Moody's Investors Services. The hospital sector in Ohio has continued to experience credit deterioration as a result of reductions in Medicare reimbursement from the Federal government. The issuance of new Ohio municipal debt in January and February 2000 has declined by approximately 38% when compared with the same period during 1999. High quality Ohio municipal debt was trading with a spread of approximately 7 basis points to general market yields at the end of February 2000. This negative spread to the general market reflects the fact that the amount of Ohio municipal debt being issued so far this year has declined significantly relative to last year.

How has the Federated Ohio Municipal Income Fund performed with respect to total return and income for the six-month reporting period ended February 29, 2000?

For the six-month reporting period ended February 29, 2000, the Fund produced a total return of (1.07%) based on net asset value.¹ The income on the Fund was competitive during the reporting period. The Fund's 30-day current net yield, or SEC yield, on February 29, 2000 was 4.96% based on the net asset value.² The yield represents a increase from the 4.48% SEC yield at the beginning of the reporting period.

2 The 30-day SEC Yield based on offering price was 4.91%.

What accounted for the Fund's performance?

In general, the total return performance for municipal bond funds was negatively impacted by the general increase in interest rates. Credit spread widening in the health sector impacted those municipal bond funds which had exposure to hospitals and continuing care retirement centers. Individual bond structure also impacted performance, with many bonds that were premium callable bonds at the beginning of the year becoming discount bonds, and then market discount bonds, increasing their duration in a rising rate environment. The strategy over the reporting period involved taking advantage of increasing interest rates by swapping into securities with higher book yields but similar structural characteristics (duration, maturity and call protection) and credit quality. Portfolio duration has been managed by adjusting cash positions and through the use of a futures hedging strategy which utilizes the municipal futures contract. The focus in the Ohio municipal bond fund is to maximize the current yield provided to shareholders. The strategy involves continuously swapping into securities with higher book yields within a rising interest rate environment while managing portfolio duration within highly defined parameters.

What kind of environment do you see ahead for municipal bonds?

The total issuance of long-term municipal bonds is expected to be in the $200 to $230 billion range in 2000. The amount of outstanding municipal debt is expected to grow by approximately $80 billion while the stock of treasury debt is falling. This should bias the municipal and treasury yield ratio upward. Relative performance of the municipal market should improve as most of the damage of higher municipal ratios and rising interest rates should have been absorbed in the fiscal year of 1999. Liquidity will continue to be an issue for the municipal market due to a lack of Wall Street analytical resources and reduced institutional demand from arbitrageur and cross-over buyers. Liquidity in the municipal market will also continue to be impacted by the significant amount of bonds in the secondary market with poor structural characteristics (market discounts) which currently have limited appeal for investors.

Portfolio of Investments

FEBRUARY 29, 2000 (UNAUDITED)

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--90.4%

Ohio--85.1%

1,000,000

Akron, OH, LT GO Bonds, 5.80% (Original Issue Yield: 5.95%), 11/1/2020

AA-

975,810

300,000

Bellefontaine, OH, Storm Water Utility, UT GO Bonds, 7.05%, 6/1/2011

312,687

500,000

Brunswick, OH, UT GO Bonds, 7.35% (Original Issue Yield: 7.446%), 12/1/2010

521,810

1,000,000

Cleveland, OH, Airport System, Revenue Bonds (Series 1997A), 5.125% (FSA INS)/(Original Issue Yield: 5.41%), 1/1/2022

AAA

861,000

2,500,000

Cleveland, OH, Airport System, Revenue Bonds (Series A), 6.00% (FGIC INS)/(Original Issue Yield: 6.378%), 1/1/2024

AAA

2,457,775

2,000,000

Cleveland, OH, Public Power System, Revenue Bonds, First Mortgage/(MBIA INS) (United State Treasury PRF)/(Series A), 7.00% (Original Issue Yield: 7.15%), 11/15/2024 (@ 102)

AAA

2,203,760

2,600,000

Columbus, OH, Municipal Airport Authority, Improvement Revenue Bonds, 6.25% (Port Columbus International Airport)/(Original Issue Yield: 6.35%), 1/1/2024

AAA

2,614,222

1,000,000

Columbus, OH, Tax Increment Financing Bonds (Series 1999), 5.30% (Easton Project)/(AMBAC INS)/(Original Issue Yield: 5.33%), 12/1/2019

AAA

933,880

500,000

Cuyahoga County, OH, Health Care Facilities, Revenue Refunding Bonds, 5.50% (Benjamin Rose Institute)/(Original Issue Yield: 5.75%), 12/1/2028

374,260

1,500,000

Cuyahoga County, OH, Hospital Authority, Revenue Bonds, 6.25% (Meridia Health System)/(Original Issue Yield: 6.80%), 8/15/2024

AAA

1,608,165

2,000,000

Evergreen, OH, Local School District, UT GO Bonds, 5.625% (FGIC INS)/(Original Issue Yield: 5.72%), 12/1/2024

Aaa

1,919,880

1,000,000

Forest Hills, OH, Local School District, UT GO Bonds, 5.70% (MBIA INS), 12/1/2016

AAA

1,002,290

1,000,000

Franklin County, OH, Development Revenue Bonds (Series 1999), 5.80% (American Chemical Society)/(Original Issue Yield: 5.83%), 10/1/2014

1,001,900

1,500,000

Franklin County, OH, Health Care Facilities, Revenue Refunding Bonds, 5.50% (Ohio Presbyterian Retirement Services)/(Original Issue Yield: 5.69%), 7/1/2021

1,185,630

500,000

Franklin County, OH, Hospital Facility Authority, Hospital Revenue Refunding & Improvement Bonds, 7.25% (Riverside United Methodist Hospital) (MBIA INS)/(Original Issue Yield: 7.29%), 5/15/2020

AAA

513,170

2,000,000

Franklin County, OH, Hospital Facility Authority, Revenue Refunding Bonds (Series A), 5.75% (Riverside United Methodist Hospital)/ (Original Issue Yield: 6.10%), 5/15/2020

Aa3

1,865,300

1,000,000

Franklin County, OH, Revenue Bonds (Series 1998A), 5.20% (Online Computer Library Center Inc.), 10/1/2020

887,190

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Ohio--continued

1,300,000

Hamilton County, OH, Health System, Revenue Refunding Bonds, Providence Hospital, 6.875% (Franciscan Sisters of Christian Charity HealthCare Ministry, Inc.)/(Original Issue Yield: 7.05%), 7/1/2015

BBB

1,378,741

700,000

Hamilton County, OH, Hospital Facilities Authority, Revenue Refunding & Improvement Bonds, 7.00% (Deaconess Hospital)/(Original Issue Yield: 7.046%), 1/1/2012

A-

733,040

2,000,000

Hamilton County, OH, Hospital Facilities Authority, Revenue Refunding Bonds (Series A), 6.25% (Bethesda Hospital)/(Original Issue Yield: 6.55%), 1/1/2012

2,045,340

1,000,000

Hamilton County, OH, Sales Tax Bonds (Series 1998A), 4.75% (Hamilton County, OH, Football Project)/(MBIA INS)/(Original Issue Yield: 4.93%), 12/1/2017

AAA

859,120

1,010,000

Kent State University, OH, General Receipts Revenue Bonds, 6.00% (Original Issue Yield: 6.09%), 5/1/2024

AAA

1,013,565

440,000

Lakewood, OH, Hospital Improvement Authority, Revenue Refunding Bonds (Series One), 6.00% (Lakewood Hospital, OH)/(Original Issue Yield: 6.90%), 2/15/2010

AAA

440,638

1,500,000

Lorain County, OH, Health Care Facilities Revenue Refunding Bonds (Series 1998A), 5.25% (Kendal at Oberlin)/(MBIA INS) (Original Issue Yield: 5.53%), 2/1/2021

BBB

1,145,040

1,000,000

Mahoning Valley, OH, Sanitary District, Water Revenue Refunding Bonds (Series 1999), 5.75% (Original Issue Yield: 5.85%), 11/15/2016

AAA

999,370

1,000,000

Marion County, OH, Hospital Authority, Hospital Refunding & Improvement Revenue Bonds (Series 1996), 6.375% (Community Hospital of Springfield)/(Original Issue Yield: 6.52%), 5/15/2011

BBB+

947,410

420,000

Marysville, OH, LT Sewer System GO Bonds, 7.15%, 12/1/2011

438,249

2,185,000

Medina, OH, City School District, LT GO Bonds (Series 1999), 5.125% (FGIC INS)/(Original Issue Yield: 5.30%), 12/1/2019

AAA

1,964,555

1,000,000

Miami County, OH, Hospital Facilities Revenue Refunding & Improvement Bonds (Series 1996A), 6.375% (Upper Valley Medical Center, OH)/(Original Issue Yield: 6.62%), 5/15/2026

BBB

874,710

1,500,000

Montgomery County, OH, Health Care Facilities, Revenue Refunding Bonds (Series 1997), 5.50% (Franciscan Medical Center-Dayton Campus)/(Original Issue Yield: 5.551%), 7/1/2018

BBB

1,526,700

1,000,000

Moraine, OH, Solid Waste Disposal Authority, Revenue Bonds, 6.75% (General Motors Corp. Project)/(Original Issue Yield: 6.80%), 7/1/2014

1,079,860

9,105,000

Ohio HFA, Residential Mortgage Revenue Bonds (Series B-2), 6.70% (GNMA COL), 3/1/2025

AAA

9,262,972

100,000

Ohio HFA, SFM Revenue Bonds (Series A), 7.80% (GNMA COL), 3/1/2030

AAA

101,755

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Ohio--continued

3,000,000

Ohio State Air Quality Development Authority, Revenue Refunding Bonds, 6.375% (JMG Funding Limited Partnership)/(AMBAC INS)/ (Original Issue Yield: 6.493%), 1/1/2029

AAA

3,044,820

1,500,000

Ohio State, Education Loan Revenue Bonds (Series 1997A), 5.85%, 12/1/2019

AAA

1,457,955

2,000,000

Ohio State Higher Education Facility, Revenue Bonds, 5.85% (John Carroll University, OH)/ (Original Issue Yield: 6.05%), 4/1/2020

1,948,060

1,500,000

Ohio State, Solid Waste Disposal Revenue Bonds, 6.05% (USG Corp.), 8/1/2034

BBB+

1,358,340

1,000,000

Ohio State University, General Receipts Revenue Bonds (Series 1999A), 5.75% (Original Issue Yield: 5.82%), 12/1/2019

994,640

2,000,000

Olentangy, OH, Local School District, UT GO Bonds, 5.25% (Original Issue Yield: 5.46%), 12/1/2017

AA-

1,867,320

1,000,000

Parma, OH, Hospital Improvement and Revenue Refunding Bonds, 5.375% (Parma Community General Hospital Association)/ (Original Issue Yield: 5.45%), 11/1/2029

A-

788,100

1,000,000

Portage County, OH, Board of County Hospital Trustees, Hospital Revenue Bonds (Series 1999), 5.75% (Robinson Memorial Hospital)/(AMBAC INS)/(Original Issue Yield: 5.90%), 11/15/2019

AAA

981,980

500,000

Tiffin, OH, LT GO Bonds, 7.10%, 12/1/2011

526,415

2,000,000

Toledo-Lucas County, OH, Port Authority, Port Facilities Revenue Refunding Bonds, 5.90% (Cargill, Inc.)/(Original Issue Yield: 5.981%), 12/1/2015

Aa3

2,000,420

1,500,000

Toledo-Lucas County, OH, Port Authority, Revenue Bonds, 6.45% (CSX Corp.), 12/15/2021

Baa2

1,459,485

1,115,000

Warren County, OH, Special Assessment UT GO Bonds, 5.50%, 12/1/2017

Aa2

1,087,158

TOTAL

63,564,487

Puerto Rico--4.4%

1,200,000

Puerto Rico Electric Power Authority, Revenue Bonds (Series T), 6.375%, (Original Issue Yield: 6.58%), 7/1/2024

AAA

1,299,312

1,000,000

Puerto Rico Highway and Transportation Authority, Residual Interest Tax-Exempt Securites (Series PA 331A), 8.065% (AMBAC INS), 7/1/2013

1,019,640

1,000,000

Puerto Rico Highway and Transportation Authority, Residual Interest Tax-Exempt Securities (Series PA 331B), 8.065% (AMBAC INS), 7/1/2014

1,008,720

TOTAL

3,327,672

Virgin Islands--0.9%

670,000

Virgin Islands HFA, SFM Revenue Refunding Bonds (Series A), 6.50% (GNMA COL)/ (Original Issue Yield: 6.522%), 3/1/2025

AAA

677,873

TOTAL LONG-TERM MUNICIPALS (IDENTIFIED COST $68,283,161)

67,570,032

Principal
Amount

Credit
Rating

Value

SHORT-TERM MUNICIPALS--7.1%

Ohio--7.1%

1,000,000

Ohio State Air Quality Development Authority, (Series B) Daily VRDNs (Cincinnati Gas and Electric Co.)/(Canadian Imperial Bank of Commerce LOC)

AA-

1,000,000

2,300,000

Ohio State Air Quality Development Authority, Revenue Bonds (Series B) Daily VRDNs (Cincinnati Gas and Electric Co.)/(J.P. Morgan Delaware, Wilmington LOC)

AAA

2,300,000

1,980,000

Stark County, OH, IDR Weekly VRDNs (Shearer's Foods, Inc.)/(Bank One, N.A. (Ohio) LOC)

1,980,000

TOTAL SHORT TERM MUNICIPALS (AMORTIZED COST)

5,280,000

TOTAL INVESTMENTS (IDENTIFIED COST $73,563,161)³

72,850,032

Securities that are subject to alternative minimum tax represent 34.2% of the portfolio as calculated based upon total portfolio market value.

1 Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. Current credit ratings are unaudited.

3 The cost of investments for federal tax purposes amounts to $73,563,161. The net unrealized depreciation of investments on a federal tax basis amounts to $713,129, which is comprised of $1,612,059 appreciation and $2,325,188 depreciation at February 29, 2000.

Note: The categories of investments are shown as a percentage of net assets ($74,681,024) at February 29, 2000.

The following acronyms are used throughout this portfolio:

AMBAC	--American Municipal Bond Assurance Corporation
COL	--Collateralized
FGIC	--Financial Guaranty Insurance Company
FSA	--Financial Security Assurance
GNMA	--Government National Mortgage Association
GO	--General Obligation
HFA	--Housing Finance Authority
IDR	--Industrial Development Revenue
INS	--Insured
LOC	--Letter of Credit
LT	--Limited Tax
MBIA	--Municipal Bond Investors Assurance
PRF	--Prefunded
SFM	--Single Family Mortgage
UT	--Unlimited Tax
VRDNs	--Variable Rate Demand Notes

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

FEBRUARY 29, 2000 (UNAUDITED)

Assets:

Total investments in securities, at value (identified and tax cost $73,563,161)

72,850,032

Cash

35,783

Income receivable

1,193,754

Receivable for investments sold

955,000

Receivable for shares sold

13,967

TOTAL ASSETS

75,048,536

Liabilities:

Payable for shares redeemed

147,332

Income distribution payable

200,011

Payable for daily variation margin

468

Accrued expenses

19,701

TOTAL LIABILITIES

367,512

Net assets for 6,967,676 shares outstanding

74,681,024

Net Assets Consist of:

Paid in capital

76,654,269

Net unrealized depreciation of investments and futures transactions

(713,710

)

Accumulated net realized loss on investments and futures transactions

(1,168,395

)

Distributions in excess of net investment income

(91,140

)

TOTAL NET ASSETS

74,681,024

Net Asset Value, Offering Price and Redemption Proceeds Per Share:

Net asset Value Per Share ($74,681,024 ÷ 6,967,676 shares outstanding)

$10.72

Offering Price Per Share (100/99.00 of $10.72)¹

$10.83

Redemption Proceeds Per Share (99.00/100 of $10.72)²

$10.61

1 See "What Do Shares Cost?" in the Prospectus.

2 See "Sales Charge When You Redeem" in the Prospectus.

See Notes which are an integral part of the Financial Statements

Statement of Operations

SIX MONTHS ENDED FEBRUARY 29, 2000 (UNAUDITED)

Investment Income:

Interest

2,298,484

Expenses:

Investment adviser fee

154,674

Administrative personnel and services fee

56,712

Custodian fees

1,514

Transfer and dividend disbursing agent fees and expenses

30,336

Directors'/Trustees' fees

1,813

Auditing fees

6,091

Legal fees

2,027

Portfolio accounting fees

23,757

Distribution services fee

154,674

Shareholder services fee

96,671

Share registration costs

8,889

Printing and postage

13,526

Insurance premiums

763

Miscellaneous

1,810

TOTAL EXPENSES

553,257

Waivers:

Waiver of investment adviser fee

(106,868

)

Waiver of distribution services fee

(92,804

)

Waiver of shareholder services fee

(3,867

)

TOTAL WAIVERS

(203,539

)

Net expenses

349,718

Net investment income

1,948,766

Realized and Unrealized Loss on Investments and Futures Transactions:

Net realized loss on investments and futures transactions

(751,266

)

Net change in unrealized depreciation of investments and futures transactions

(2,132,475

)

NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS

(2,883,741

)

Change in net assets resulting from operations

(934,975

)

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Six Months
Ended
(unaudited)
February 29,
2000

Year Ended
August 31,
1999

Increase (Decrease) in Net Assets:

Operations:

Net investment income

1,948,766

3,867,962

Net realized loss on investments and futures transactions ($(751,266) and $(118,811), respectively, as computed for federal tax purposes)

(751,266

)

(118,811

)

Net change in unrealized depreciation

(2,132,475

)

(4,645,424

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

(934,975

)

(896,273

)

Distributions to Shareholders:

Distributions from net investment income

(1,929,984

)

(3,987,825

)

Distributions from net realized gains

(484,220

)

Distributions in excess of net realized gains

(298,322

)

CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS

(1,929,984

)

(4,770,367

)

Share Transactions:

Proceeds from sale of shares

4,728,498

16,135,809

Net asset value of shares issued to shareholders in payment of distributions declared

993,182

2,707,727

Cost of shares redeemed

(10,377,940

)

(11,249,058

)

CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS

(4,656,260

)

7,594,478

Change in net assets

(7,521,219

)

1,927,838

Net Assets:

Beginning of period

82,202,243

80,274,405

End of period

74,681,024

82,202,243

See Notes which are an integral part of the Financial Statements

Financial Highlights

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
February 29,

Year Ended August 31,

2000

1999

1998

1997

1996

1995

Net Asset Value, Beginning of Period

$11.11

$11.91

$11.53

$11.21

$11.22

$11.01

Income From Investment Operations:

Net investment income

0.27

0.55

0.56

0.59

0.60

Net realized and unrealized gain (loss) on investments

(0.39

)

(0.67

)

0.40

0.32

(0.01

)

0.20

TOTAL FROM INVESTMENT OPERATIONS

(0.12

)

(0.12

)

0.96

0.91

0.59

0.80

Less Distributions:

Distributions from net investment income

(0.27

)

(0.57

)

(0.56

)

(0.59

)

(0.60

)

(0.59

)

Distributions from net realized gain on investments

(0.07

)

(0.02

)

Distributions in excess of net realized gains on investments

(0.04

)

TOTAL DISTRIBUTIONS

(0.27

)

(0.68

)

(0.58

)

(0.59

)

(0.60

)

(0.59

)

Net Asset Value, End of Period

$10.72

$11.11

$11.91

$11.53

$11.21

$11.22

Total Return¹

(1.07

(1.14

8.56

8.34

5.34

7.65

Ratios to Average Net Assets:

Expenses

0.90

%²

0.90

Net investment income

5.04

%²

4.71

4.80

5.19

5.28

5.53

Expense waiver/reimbursement³

0.53

%²

0.51

0.58

0.60

Supplemental Data:

Net assets, end of period (000 omitted)

$74,681

$82,202

$80,274

$75,506

$70,568

$70,532

Portfolio turnover

1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

2 Computed on an annualized basis.

3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

FEBRUARY 29, 2000 (UNAUDITED)

ORGANIZATION

Federated Municipal Securities Income Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of six portfolios. The financial statements included herein are only those of Federated Ohio Municipal Income Fund (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income exempt from federal regular income tax (federal regular income tax does not include the federal alternative minimum tax) and the personal income taxes imposed by the state of Ohio and Ohio municipalities.

SIGNIFICANT ACCOUNTING POLICIES

Investment Valuation

Investment Income, Expenses and Distributions

Federal Taxes

When-Issued and Delayed Delivery Transactions

Futures Contracts

For the period ended February 29, 2000, the Fund had realized losses of ($17,100) on future contracts.

Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with changes in the value of the underlying securities.

At February 29, 2000, the Fund had outstanding futures contracts as set forth below:

Expiration
Date

Contracts to
Receive

Position

Unrealized
(Depreciation)

June 2000

15 Municipal
Bond Index

Short

$(581)

Use of Estimates

Other

Investment transactions are accounted for on a trade date basis.

SHARES OF BENEFICIAL INTEREST

Six Months
Ended
February 29,
2000

Year Ended
August 31,
1999

Shares sold

435,759

1,386,959

Shares issued to shareholders in payment of distributions declared

92,154

232,018

Shares redeemed

(957,960

)

(962,035

)

NET CHANGE RESULTING FROM SHARE TRANSACTIONS

(430,047

)

656,942

INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.

Administrative Fee

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's shares. The Plan provides that the Fund may incur distribution expenses up to 0.40% of the average daily net assets of the Fund, annually, to compensate FSC. The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.

Shareholder Services Fee

Transfer and Dividend Disbursing Agent Fees and Expenses

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.

Interfund Transactions

During the period ended February 29, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $22,580,000 and $25,100,000, respectively.

General

Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.

INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the period ended February 29, 2000, were as follows:

Purchases	$	13,315,406

Sales	$	16,377,318

CONCENTRATION OF CREDIT RISK

Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at February 29, 2000, 27.3% of the securities in the portfolio of investments are backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported by (backed) by a letter of credit from any one institution or agency did not exceed 9.6% of total investments.

Trustees

JOHN F. DONAHUE

THOMAS G. BIGLEY

JOHN T. CONROY, JR.

NICHOLAS P. CONSTANTAKIS

JOHN F. CUNNINGHAM

J. CHRISTOPHER DONAHUE

LAWRENCE D. ELLIS, M.D.

PETER E. MADDEN

CHARLES F. MANSFIELD, JR.

JOHN E. MURRAY, JR., J.D., S.J.D.

MARJORIE P. SMUTS

JOHN S. WALSH

Officers

JOHN F. DONAHUE

Chairman

RICHARD B. FISHER

President

WILLIAM D. DAWSON III

Chief Investment Officer

J. CHRISTOPHER DONAHUE

Executive Vice President

EDWARD C. GONZALES

Executive Vice President

JOHN W. MCGONIGLE

Executive Vice President and Secretary

RICHARD J. THOMAS

Treasurer

LESLIE K. ROSS

Assistant Secretary

Federated
World-Class Investment Manager

SEMI-ANNUAL REPORT

Federated Ohio Municipal Income Fund

SEMI-ANNUAL REPORT
TO SHAREHOLDERS

FEBRUARY 29, 2000

Federated
Federated Ohio Municipal Income Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor

Cusip 313923609

2032305 (4/00)

SEMI-ANNUAL REPORT

President's Message

Dear Shareholder:

I am pleased to present the Semi-Annual Report to shareholders of Federated Pennsylvania Municipal Income Fund, a portfolio of Federated Municipal Securities Income Trust. This report covers the first half of the fund's fiscal year, which is the six-month reporting period from September 1, 1999 through February 29, 2000. The report begins with a discussion with the fund's portfolio manager, followed by a complete listing of the fund's holdings and its financial statements.

Federated Pennsylvania Municipal Income Fund is a convenient way for tax-sensitive Pennsylvania residents to invest for income that is exempt from federal regular income tax and state income tax.¹ This double tax-free advantage gives investors the opportunity to earn a greater after-tax yield than they could in a comparable high-quality taxable investment.

During the six-month reporting period, the fund's portfolio of quality holdings paid a monthly dividend stream totaling $0.27 per share for Class A Shares and $0.23 for Class B Shares. In a rising interest rate environment that caused bond prices to fall, the fund's share price decreased. As a result, the fund's Class A Shares and Class B Shares produced six-month total returns of (1.59%) and (2.06%), respectively, based on net asset value.² The fund's net assets reached $237.5 million at the end of the reporting period.

Thank you for joining other shareholders of Federated Pennsylvania Municipal Income Fund in pursuing monthly, double tax-free investment income. Of course, you have the option of receiving income from the fund or building your account by reinvesting your dividends and compounding tax free.

Sincerely,

Richard B. Fisher

Richard B. Fisher
President
April 15, 2000

1 Income may be subject to the federal alternative minimum tax.

2 Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. The total return for the six-month reporting period based on offering price for Class A Shares and Class B Shares was (6.04%) and (7.33%), respectively.

Investment Review

What is your review of the municipal bond marketplace over the reporting period?

Municipal bond market yields continued to follow the rising trend in general interest rates over the reporting period from September of 1999, to February of 2000, as a result of concern over accelerating real economic growth, valuations in the stock market and potential Federal Reserve Board policy changes. Cash flows in municipal bond funds throughout the industry continued to be net negative over the reporting period as investors used tax-loss selling in their bond funds to offset capital gains in the equity portion of their investment portfolios. The municipal market experienced a significant shift in supply and demand relationships with a lighter new issuance calendar (a decline of 21% over last year) and a lack of institutional demand from funds, insurance companies and arbitrageurs. This technical situation which existed for most of the calendar year in 1999 kept municipal and treasury yield ratios in a historically cheap range. Yields increased across the municipal yield curve over the six-month reporting period ending February 29, 2000. Yields increased by 33 basis points to 5.23% in the ten-year area of the AAA general obligation municipal yield curve and by 28 basis points to 5.90% for 30-year maturities.

How have Pennsylvania municipal bonds performed over the reporting period?

Municipal credit quality continues to benefit from the strong U.S. economy, as reflected by the 4 to 1 ratio of municipal credit upgrades to downgrades by Moody's Investors Services. The hospital sector in Pennsylvania has continued to experience credit deterioration as the result of reductions in Medicare reimbursement from the federal government. The issuance of new Pennsylvania municipal debt so far this year has declined by approximately 79% when compared with the same period during 2000. Pennsylvania municipal debt was trading with a spread of approximately 32 basis points to the benchmark AAA municipal yield curve at the end of February, 2000. This is close to the six month average of 30.3 basis points.

How has the Federated Pennsylvania Municipal Income Fund performed with respect to total return and income for the six-month reporting period ended February 29, 2000?

For the six-month period ended February 29, 2000, the fund's Class A Shares and Class B Shares produced total returns of (1.59%) and (2.06%), respectively, based on net asset value.¹ The income of the Fund was competitive during the reporting period. The Fund's 30-day current net yield, or SEC yield, on February 29, 2000 was 5.15% for Class A Shares based on the net asset value.² The yield represents an increase from the 4.64% SEC yield at the beginning of the reporting period.

2 The 30-day SEC Yields for the period for Class A Shares (based on offering price) and Class B Shares (at net asset value) were 4.91% and 4.38%, respectively.

What accounted for the Fund's performance?

In general, the total return performance for municipal bond funds was negatively impacted by the general increase in interest rates. Credit spread widening in the health sector impacted those municipal bond funds, which had exposure to hospitals and continuing care retirement centers. Individual bond structure also impacted performance, with many bonds that were premium callable bonds at the beginning of the year becoming discount bonds, and then market discount bonds, increasing their duration in a rising rate environment. The strategy over the reporting period involved taking advantage of increasing interest rates by swapping into securities with higher book yields but similar structural characteristics (duration, maturity, call protection and credit quality). Portfolio duration has been managed by adjusting cash positions and through the use of a futures hedging strategy which utilizes the municipal futures contract. The focus in the Pennsylvania Municipal Bond Fund is to maximize the current yield provided to shareholders. The strategy involves continuously swapping into securities with higher book yields within a rising interest rate environment while managing portfolio duration within highly defined parameters.

What kind of environment do you see ahead for municipal bonds?

Portfolio of Investments

FEBRUARY 29, 2000 (UNAUDITED)

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--92.7%

Pennsylvania--91.8%

4,250,000

Allegheny County, PA, Airport Authority, Airport Refunding Revenue Bonds, Series 1999, 6.125% (Pittsburgh International Airport), 1/1/2017

AAA

4,303,295

2,000,000

Allegheny County, PA, HDA, Health & Education Revenue Bonds, 7.00% (Rehabilitation Institute of Pittsburgh)/(United States Treasury PRF)/(Original Issue Yield: 7.132%), 6/1/2002 (@102)

2,125,560

1,500,000

Allegheny County, PA, HDA, Hospital Revenue Bonds, Series 1997, 5.75% (St. Francis Medical Center, PA)/(Original Issue Yield: 6.00%), 5/15/2017

Baa1

1,232,070

2,000,000

Allegheny County, PA, HDA, Refunding Revenue Bonds, Series 1998A, 5.125% (South Hills Health System)/(Original Issue Yield: 5.34%), 5/1/2023

1,579,580

1,500,000

Allegheny County, PA, HDA, Refunding Revenue Bonds, Series 1998A, 5.125% (South Hills Health System)/(Original Issue Yield: 5.40%), 5/1/2029

1,152,810

4,000,000

Allegheny County, PA, HDA, Revenue Bonds, Series 1997B, 5.00% (UPMC Health System)/ (MBIA INS)/(Original Issue Yield: 5.43%), 7/1/2016

AAA

3,561,880

300,000

Allegheny County, PA, HDA, Revenue Bonds, Series A, 5.90% (South Hills Health System)/ (Original Issue Yield: 6.00%), 5/1/2003

304,425

300,000

Allegheny County, PA, HDA, Revenue Bonds, Series A, 6.00% (South Hills Health System)/ (Original Issue Yield: 6.10%), 5/1/2004

305,664

1,500,000

Allegheny County, PA, HDA, Revenue Bonds 5.375% (Ohio Valley General Hospital, PA)/ (Original Issue Yield: 5.50%), 1/1/2018

BAA1

1,205,460

4,000,000

Allegheny County, PA, HDA, Revenue Bonds, Series 1997A, 5.60% (UPMC Health System)/ (MBIA INS)/(Original Issue Yield: 5.85%), 4/1/2017

AAA

3,839,680

2,635,000

Allegheny County, PA, Hospital Development Authority, Refunding Revenue Bonds, 6.625% (Allegheny General Hospital), 7/1/2009

AAA

2,764,932

1,000,000

Allegheny County, PA, IDA, Cargo Facilities Lease Revenue Bonds, Series 1999, 6.00% (AFCO Cargo PIT LLC Project), 9/1/2009

966,940

1,000,000

Allegheny County, PA, IDA, Cargo Facilities Lease Revenue Bonds, Series 1999, 6.625% (AFCO Cargo PIT LLC Project)/(Original Issue Yield: 6.75%), 9/1/2024

947,630

3,185,000

Allegheny County, PA, IDA, Environmental Improvement Refunding Revenue Bonds, Series 1998, 5.50% (USX Corp.), 12/1/2029

BBB-

2,593,609

1,250,000

Allegheny County, PA, IDA, Environmental Improvement Refunding Revenue Bonds, Series 1998, 5.60% (USX Corp.), 9/1/2030

BBB-

1,031,988

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Pennsylvania--continued

1,500,000

Allegheny County, PA, IDA, Health Care Facilities Refunding Revenue Bonds, Series 1998, 5.75% (Presbyterian SeniorCare-Westminister Place Project), 1/1/2023

1,210,785

3,000,000

Allegheny County, PA, Port Authority, Special Revenue Transportation Bonds, Series 1999, 6.00% (Original Issue Yield: 6.05%), 3/1/2019

AAA

3,028,050

520,000

Allegheny County, PA, Residential Finance Agency, SFM Revenue Bonds, Series Q, 7.40% (GNMA COL), 12/1/2022

Aaa

533,614

2,465,000

Allegheny County, PA, Residential Finance Agency, SFM Revenue Bonds, Series FF-1, 5.90% (GNMA COL), 5/1/2020

Aaa

2,399,061

2,060,000

Allentown, PA, Area Hospital Authority, Revenue Bonds, Series B, 6.75% (Sacred Heart Hospital of Allentown), 11/15/2015

BBB

2,007,285

3,325,000

Bethlehem, PA, Area Vocational-Technical School Authority, Guaranteed Lease Revenue Bonds, Series 1999, 5.50% (Bethlehem Area Vocational-Technical School)/(Original Issue Yield: 5.55%), 9/1/2020

Aaa

3,139,698

4,250,000

Bradford County, PA, IDA, Solid Waste Disposal Revenue Bonds, Series A, 6.60% (International Paper Co.), 3/1/2019

BBB+

4,206,905

1,000,000

Bucks County, PA, Community College Authority, College Building Revenue Bonds, Series 1996, 5.50% (Original Issue Yield: 5.70%), 6/15/2017

967,950

2,010,000

Bucks County, PA, Water & Sewer Authority, Revenue Bonds, 5.45% (Neshaminy Interceptor Sewer System)/(AMBAC INS)/(Original Issue Yield: 5.50%), 6/1/2015

Aaa

1,960,454

2,085,000

Chartiers Valley, PA, Refunding Revenue Bonds, 6.15%, 3/1/2007

AAA

2,168,671

1,100,000

Chester County, PA, HEFA, Mortgage Refunding Revenue Bonds, 5.50% (Tel Hai Obligated Group Project)/(Original Issue Yield: 5.60%), 6/1/2025

BBB

860,431

1,500,000

Clarion County, PA, Hospital Authority, Refunding Revenue Bonds, Series 1997, 5.75% (Clarion County Hospital)/(Original Issue Yield: 5.95%), 7/1/2017

BBB-

1,251,285

1,575,000

Commonwealth of Pennsylvania, GO UT Bonds, 6.00% (Original Issue Yield: 6.15%), 7/1/2007

1,656,317

1,000,000

Crawford County, PA, Hospital Authority, Senior Living Facilities Revenue Bonds, Series 1999, 6.125% (Wesbury United Methodist Community Obligated Group)/(Original Issue Yield: 6.32%), 8/15/2019

881,700

2,800,000

Delaware County, PA, College Revenue Bonds, Series 1999, 5.75% (Cabrini College)/(Asset Guaranty INS)/(Original Issue Yield: 5.95%), 7/1/2019

2,690,884

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Pennsylvania--continued

2,900,000

Delaware County, PA, College Revenue Refunding Bonds, Series 1998A, 5.375% (Neumann College)/(Original Issue Yield: 5.48%), 10/1/2018

BBB-

2,455,256

300,000

Delaware County, PA, Hospital Revenue Bonds, 5.90% (Riddle Memorial Hospital)/(Original Issue Yield: 6.10%), 1/1/2002

A-

305,376

1,000,000

Delaware County, PA, Revenue Bonds, Series 1996, 5.50% (Elwyn, Inc.)/ (AMBAC INS)/(Original Issue Yield: 5.69%), 6/1/2020

AAA

923,560

1,500,000

Delaware River Port Authority, PA, Revenue Bonds, Series 1999, 6.00%, 1/1/2019

AAA

1,522,680

2,000,000

Delaware River Port Authority, PA, Revenue Bonds, 6.00%, 1/1/2018

AAA

2,036,240

10,000,000

Delaware Valley, PA, Regional Finance Authority, Local Government Revenue Bonds, Series 1997B, 5.60%, 7/1/2017

AAA

9,867,200

4,100,000

Erie County, PA, Hospital Authority, Health Facilities Revenue Bonds, Series 1999, 5.90% (St. Mary's Home of Erie)/(Asset Guaranty INS)/ (Original Issue Yield: 6.05%), 8/15/2019

3,924,930

500,000

Erie County, PA, Prison Authority, Lease Revenue Bonds, 6.45% (MBIA LOC)/(Original Issue Yield: 6.50%), 11/1/2001

AAA

515,540

1,000,000

Fayette County, PA, Hospital Authority, Healthcare Facility Revenue Bonds, Series 1996A, 6.00% (Mount Macrina Manor)/ (National City, Pennsylvania LOC), 9/1/2018

Aa3

970,140

2,000,000

Fayette County, PA, Hospital Authority, Hospital Revenue Bonds, Series 1996A, 5.75% (Uniontown Hospital)/(AMBAC INS)/(Original Issue Yield: 6.05%), 6/15/2015

AAA

1,976,780

410,000

Harrisburg, PA, Pooled Bond Program Revenue Bonds, Series I, 5.625% (MBIA INS)/(Original Issue Yield: 5.98%), 4/1/2015

AAA

406,277

1,420,000

Hazleton, PA, Area School District, UT GO Refunding Bonds, Series C, 5.75% (FGIC LOC), 3/1/2012

AAA

1,456,537

500,000

Indiana County, PA, Hospital Authority, Revenue Refunding Bonds, Series B, 6.20% (Indiana Hospital, PA)/(AMBAC INS)/ (Original Issue Yield: 6.30%), 7/1/2006

AAA

517,100

800,000

Jeannette Health Services Authority, PA, Hospital Revenue Bonds, Series 1996A, 6.00% (Jeannette District Memorial Hospital)/ (Original Issue Yield: 6.15%), 11/1/2018

BBB+

702,904

1,000,000

Lackawanna Trail School District, PA, UT GO Refunding Bonds, 6.90% (AMBAC INS), 3/15/2010

AAA

1,030,680

1,380,000

Latrobe, PA, Industrial Development Authority, College Revenue Bonds, 6.75% (St. Vincent College, PA)/(Original Issue Yield: 7.00%), 5/1/2024

AAA

1,496,348

1,500,000

Lebanon County, PA, Hospital Authority, Hospital Revenue Bonds, 6.00% (Good Samaritan Hospital)/(Original Issue Yield: 6.10%), 11/15/2018

BBB+

1,313,565

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Pennsylvania--continued

1,000,000

Lehigh County, PA, General Purpose Authority, Hospital Refunding Revenue Bonds, Series 1996A, 5.75% (Muhlenberg Hospital Center)/ (Original Issue Yield: 5.85%), 7/15/2010

1,026,440

2,300,000

Lehigh County, PA, General Purpose Authority, Revenue Bonds, 5.625% (Lehigh Valley Hospital, Inc.)/(MBIA INS)/(Original Issue Yield: 5.775%), 7/1/2025

AAA

2,130,490

1,000,000

Luzerne County, PA, UT GO Bonds, 5.625% (FGIC INS)/(Original Issue Yield: 5.78%), 12/15/2021

AAA

955,220

2,500,000

Luzerne County, PA, IDA, Revenue Refunding Bonds, Series A, 7.00% (Pennsylvania Gas & Water Co.), 12/1/2017

AAA

2,695,025

4,000,000

Lycoming County, PA, Authority, Hospital Lease Revenue Bonds, Series B, 6.50% (Divine Providence Hospital, PA)/(Original Issue Yield: 6.70%), 7/1/2022

4,053,280

1,000,000

Lycoming County, PA, Authority, Hospital Revenue Bonds, 5.50% (Divine Providence Hospital, PA)/(Original Issue Yield: 5.90%), 11/15/2022

AAA

913,510

2,360,000

Monroe County, PA, Hospital Authority, Hospital Revenue Bonds, 5.125% (Pocono Medical Center)/(AMBAC INS)/(Original Issue Yield: 5.40%), 7/1/2015

AAA

2,155,718

1,250,000

Montgomery County, PA, Higher Education and Health Authority, Revenue Bonds, 7.25% (Philadelphia Geriatric Center)/(Original Issue Yield: 7.472%), 12/1/2024

1,169,725

3,250,000

Montgomery County, PA, IDA, Retirement Community Revenue Bonds, Series 1996B, 5.75% (Adult Communities Total Services, Inc.)/ (Original Issue Yield: 5.98%), 11/15/2017

A-

2,893,670

1,000,000

Montgomery County, PA, IDA, Retirement Community Refunding Revenue Bonds, Series 1996A, 5.875% (Adult Communities Total Services, Inc.)/(Original Issue Yield: 6.125%), 11/15/2022

A-

873,360

500,000

Mt. Pleasant Borough, PA, Business District Authority, Hospital Revenue Bonds, Series 1997, 5.75% (Frick Hospital)/(Original Issue Yield: 5.85%), 12/1/2017

BBB

420,435

1,300,000

Mt. Pleasant Borough, PA, Business District Authority, Hospital Revenue Bonds, Series 1997, 5.75% (Frick Hospital)/(Original Issue Yield: 5.90%), 12/1/2027

BBB

1,027,026

1,215,000

North Penn, PA, School District, Refunding Revenue Bonds, 6.20%, 3/1/2007

Aaa

1,235,594

110,000

North Penn, PA, Water Authority, Revenue Bonds, 6.10% (FGIC INS), 11/1/2003

AAA

114,660

500,000

Northeastern, PA, Hospital & Education Authority, Health Care Revenue Bonds, Series 1994A, 6.10% (Wyoming Valley Health Care, PA)/(AMBAC INS)/(Original Issue Yield: 6.25%), 1/1/2003

AAA

514,310

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Pennsylvania--continued

3,000,000

Norwin, PA, School District, UT GO Bonds, 6.00% (Original Issue Yield: 6.12%), 4/1/2024

AAA

3,003,180

500,000

Pennsylvania Convention Center Authority, Refunding Revenue Bonds, Series A, 6.25%, 9/1/2004

BBB

511,290

1,000,000

Pennsylvania Convention Center Authority, Revenue Bonds, 6.70% (FGIC INS)/(Original Issue Yield: 6.843%), 9/1/2016

AAA

1,113,960

5,000,000

^{2, 3}

Pennsylvania, EDFA, Exempt Facilities Revenue Bonds, Series 1997B, 6.125% (National Gypsum Co.), 11/1/2027

4,472,000

4,000,000

Pennsylvania, EDFA, Resource Recovery Revenue Bonds, Series A, 6.40% (Northampton Generating), 1/1/2009

BBB-

3,932,200

4,230,000

Pennsylvania, EDFA, Revenue Bonds, Series 1998A, 5.25% (Northwestern Human Services, Inc.)/(Original Issue Yield: 5.668%), 6/1/2028

BBB

3,111,207

435,000

Pennsylvania, HFA, SFM Revenue Bonds, Series 33, 6.90%, 4/1/2017

AA+

445,188

100,000

Pennsylvania, HFA, SFM Revenue Bonds, Series 41-B, 5.90%, 10/1/2005

AA+

102,089

100,000

Pennsylvania, HFA, SFM Revenue Bonds, Series 42, 5.90%, 10/1/2004

AA+

101,962

345,000

Pennsylvania, HFA, SFM Revenue Bonds, Series 43, 6.35%, 4/1/2001

AA+

347,374

785,000

Pennsylvania, HFA, SFM, Revenue Bonds, Series 48, 5.375%, 10/1/2016

AA+

774,536

805,000

Pennsylvania, HFA, SFM, Revenue Bonds, Series 51, 5.65%, 4/1/2020

AA+

809,886

555,000

Pennsylvania, HFA, SFM, Revenue Bonds, Series 52B, 5.55% (FHA/VA Mortgages GTD), 10/1/2012

AA+

555,827

690,000

Pennsylvania, HFA, SFM, Refunding Revenue Bonds, Series 54A, 5.375% (FHA INS), 10/1/2028

AA+

690,621

1,425,000

Pennsylvania, HFA, SFM Revenue Bonds, Series 62A, 5.50%, 10/1/2022

AA+

1,288,528

3,000,000

Pennsylvania, HFA, SFM Revenue Bonds, Series 67A, 5.85%, 10/1/2018

AA+

2,930,760

2,000,000

Pennsylvania Intergovernmental Coop Authority, Special Tax Revenue Bonds, 5.625% (MBIA INS)/(Original Issue Yield: 97.245%), 6/15/2023

AAA

2,048,280

3,085,000

Pennsylvania Intergovernmental Coop Authority, Special Tax Refunding Revenue Bonds, Series 1999, 5.00% (Original Issue Yield: 5.13%), 6/15/2021

AAA

2,681,513

2,590,000

Pennsylvania State Higher Education Assistance Agency, Capital Acquisition Revenue Bonds, 6.125%, 12/15/2019

AAA

2,640,945

2,000,000

Pennsylvania State Higher Education Facilities Authority, Revenue Bonds, Series 1996, 7.20% (Thiel College), 5/15/2026

2,223,620

3,000,000

Pennsylvania State Higher Education Facilities Authority, Revenue Bonds, Series 1999A, 4.875% (UPMC Health System)/(Original Issue Yield: 5.12%), 8/1/2019

AAA

2,496,750

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Pennsylvania--continued

2,000,000

Pennsylvania State Higher Education Facilities Authority, Revenue Bonds, Series N, 5.875% (Original Issue Yield: 5.913%), 6/15/2021

AAA

1,971,140

2,000,000

Pennsylvania State Higher Education Facilities Authority, Revenue Bonds, 5.00% (Thomas Jefferson University)/(AMBAC INS)/(Original Issue Yield: 5.22%), 7/1/2019

AAA

1,763,380

2,000,000

Pennsylvania State Higher Education Facilities Authority, Revenue Bonds, 6.375% (Drexel University)/(Original Issue Yield: 6.415%), 5/1/2017

A-

2,041,160

750,000

Pennsylvania State Higher Education Facilities Authority, Revenue Bonds, 6.80% (MBIA LOC)/ (Original Issue Yield: 6.85%), 6/15/2001

AAA

755,985

1,500,000

Pennsylvania State Higher Education Facilities Authority, University Revenue Bonds, Series 1997, 5.45% (University of the Arts)/(Asset Guaranty INS)/(Original Issue Yield: 5.58%), 3/15/2017

1,373,595

500,000

Pennsylvania State, IDA, Economic Development Revenue Bonds, Series A, 6.80% (Original Issue Yield: 6.85%), 1/1/2001

AAA

510,755

1,000,000

Pennsylvania State Turnpike Commission, Refunding Revenue Bonds, Series L, 6.00% (MBIA INS)/(Original Issue Yield: 6.85%), 6/1/2015

AAA

1,014,770

500,000

Philadelphia, PA, Gas Works, Revenue Bonds, 7.40%, 6/15/2000

BBB

504,320

2,565,000

Philadelphia, PA, Hospitals & Higher Education Facilities Authority, Hospital Revenue Bonds, Series 1997, 5.50% (Temple University Hospital) /(Original Issue Yield: 5.85%), 11/15/2015

BBB+

2,122,614

1,655,000

Philadelphia, PA, Hospitals & Higher Education Facilities Authority, Hospital Revenue Bonds, Series 1997, 5.75% (Jeanes Hospital, PA)/ (Original Issue Yield: 5.80%), 7/1/2008

BBB+

1,560,450

1,700,000

Philadelphia, PA, Hospitals & Higher Education Facilities Authority, Hospital Revenue Bonds, Series 1997, 5.875% (Jeanes Hospital, PA)/ (Original Issue Yield: 6.10%), 7/1/2017

BBB+

1,404,166

325,000

Philadelphia, PA, Hospitals & Higher Education Facilities Authority, Refunding Revenue Bonds, 6.15% (Pennsylvania Hospital)/(Original Issue Yield: 6.25%), 7/1/2005

Baa3

338,208

250,000

Philadelphia, PA, Hospitals & Higher Education Facilities Authority, Revenue Bonds, 7.75% (Children's Seashore House)/(AMBAC INS), 8/15/2000 (@100)

AAA

254,165

1,235,000

Philadelphia, PA, Redevelopment Authority, Multifamily Housing Refunding Revenue Bonds, Series 1998, 5.45% (Woodstock Mutual Homes, Inc.)/(FHA INS)/(Original Issue Yield: 5.468%), 2/1/2023

Aa2

1,125,196

9,500,000

Philadelphia, PA, Airport Revenue Bonds (Series 1997B), 5.50% (Philadelphia Airport System)/ (AMBAC INS)/(Original Issue Yield: 5.65%), 6/15/2017

AAA

8,977,500

3,500,000

Philadelphia, PA, Refunding UT GO Bonds, 5.125% (FGIC INS), 5/15/2014

AAA

3,285,345

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Pennsylvania--continued

855,000

Philadelphia, PA, Revenue Bonds, 10.875% (United States Treasury PRF), 7/1/2005 (@100)

Aaa

1,019,245

4,000,000

Pittsburgh, PA, Auditorium Authority, Regional Asset District Sales Tax Revenue Bonds, Series 1999, 5.00% (AMBAC INS)/(Original Issue Yield: 5.23%), 2/1/2019

AAA

3,507,840

2,880,000

Pittsburgh, PA, Public Parking Authority, Parking Revenue Bonds, Series 2000, 6.00% (Original Issue Yield: 6.02%), 12/1/2020

AAA

2,882,966

765,000

Pittsburgh, PA, Urban Redevelopment Authority, Mortgage Revenue Bonds, Series 1997A, 6.15%, 10/1/2016

AAA

766,002

420,000

Pittsburgh, PA, Urban Redevelopment Authority, Mortgage Revenue Bonds, Series 1997C, 5.35%, 10/1/2009

AAA

410,991

1,260,000

Pittsburgh, PA, Urban Redevelopment Authority, Mortgage Revenue Bonds, Series 1997C, 5.90%, 10/1/2022

AAA

1,201,082

2,855,000

Pittsburgh, PA, LT GO Bonds, Series 1999A, 5.75% (Original Issue Yield: 5.852%), 9/1/2019

AAA

2,797,672

4,950,000

Pottsville, PA, Hospital Authority, Hospital Revenue Bonds, 5.625% (Pottsville Hospital and Warne Clinic)/(Original Issue Yield: 5.75%), 7/1/2024

BBB

3,931,983

2,500,000

Scranton-Lackawanna, PA, Health & Welfare Authority, Revenue Bonds, Series 1994A, 7.60% (Allied Services Rehabilitation Hospitals, PA,), 7/15/2020

2,584,225

1,920,000

Shaler, PA, School District Authority, GO UT Bonds, 6.25%, 4/15/2008

AAA

1,988,064

2,650,000

Sharon, PA, General Hospital Authority, Hospital Revenue Bonds, 6.875% (Sharon Regional Health System), 12/1/2022

AAA

2,838,230

2,000,000

Somerset County, PA, Hospital Authority, Hospital Refunding Revenue Bonds, Series 1997B, 5.375% (Somerset Community Hospital) /(Asset Guaranty INS)/(Original Issue Yield: 5.68%), 3/1/2017

1,811,500

2,000,000

Southeastern, PA, Transportation Authority, Special Revenue Bonds, 5.375% (FGIC INS)/ (Original Issue Yield: 5.70%), 3/1/2017

AAA

1,899,540

100,000

Spring Ford, PA, School District, UT GO Refunding Bonds, Series AA, 5.80%, 8/1/2005

AAA

100,311

500,000

State Public School Building Authority, PA, College Revenue Bonds, 6.50% (Harrisburg Area Community College-D)/(MBIA LOC), 4/1/2002

AAA

517,430

1,000,000

Susquehanna, PA, Area Regional Airport Authority, Airport Facilities Revenue Bonds, Series 1999, 5.50% (Aero Harrisburg)/(Original Issue Yield: 5.85%), 1/1/2024

867,610

40,000

Swarthmore Boro Authority PA, Refunding Revenue Bonds, 6.00% (Original Issue Yield: 6.10%), 9/15/2006

AA+

41,927

7,000,000

University of Pittsburgh, University Refunding Revenue Bonds, Series 1997B, 5.00% (Original Issue Yield: 5.287%), 6/1/2017

AAA

6,284,600

Principal
Amount

Credit
Rating

Value

LONG-TERM MUNICIPALS--continued

Pennsylvania--continued

3,000,000

Upper Darby School District, PA, UT GO Bonds, 5.00% (AMBAC INS)/(Original Issue Yield: 5.10%), 5/1/2019

Aaa

2,646,690

1,000,000

Warren County, PA, Hospital Authority, Revenue Bonds, Series A, 7.00% (Warren General Hospital, PA)/(Original Issue Yield: 7.101%), 4/1/2019

BBB

992,950

680,000

Washington County, PA, Authority, Lease Revenue Bonds, 7.00% (AMBAC INS), 6/15/2000 (@103)

AAA

695,463

400,000

Washington County, PA, Authority, Lease Revenue Bonds, 7.875%, 12/15/2018

AAA

496,304

1,000,000

West View, PA, Municipal Authority, Special Obligation Bonds, 9.50%, 11/15/2014

AAA

1,297,660

645,000

Westmoreland County, PA, Municipal Authority, Special Obligation Bonds, 9.125%, 7/1/2010

AAA

731,817

TOTAL

218,074,756

Puerto Rico--0.9%

1,000,000

^{2, 3}

Puerto Rico Highway and Transportation Authority, Residual Interest Tax-Exempt Securites, Series PA-331A, 8.06516% (AMBAC INS), 7/1/2013

1,019,640

1,000,000

^{2, 3}

Puerto Rico Highway and Transportation Authority, Residual Interest Tax-Exempt Securities, Series PA-331B, 8.06516% (AMBAC INS), 7/1/2014

1,008,720

TOTAL

2,028,360

Virgin Islands--0.0%

70,000

Virgin Islands HFA, SFM, Refunding Revenue Bonds, Series A, 5.80% (GNMA COL), 3/1/2005

AAA

70,847

TOTAL LONG-TERM MUNICIPALS (IDENTIFIED COST $229,901,955)

220,173,963

SHORT-TERM INVESTMENTS--6.7%

Pennsylvania--5.9%

10,280,000

Erie County, PA, Hospital Authority, Series 1998B Daily VRDNs (Hamot Health Foundation)/(AMBAC INS)/(National City, Pennsylvania LOC)

VMIG1

10,280,000

1,500,000

Lancaster County, PA, Hospital Authority, Health Center Revenue Bonds, Series 1996 Weekly VRDNs (Masonic Homes)

VMIG1

1,500,000

2,200,000

South Fork Municipal Authority, PA, Series A Daily VRDNs (Conemaugh Health System)/ (MBIA INS)/(Credit Suisse First Boston LIQ)

A-1+

2,200,000

TOTAL

13,980,000

Principal
Amount

Credit
Rating

Value

SHORT-TERM INVESTMENTS--continued

Puerto Rico--0.8%

2,000,000

Puerto Rico Commonwealth Infrastructure Financing Authority, Floater Certificates, Series 1998-139 Weekly VRDNs (AMBAC INS)/ (Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ)

A-1c

2,000,000

TOTAL SHORT-TERM INVESTMENTS (AT AMORTIZED COST)

15,980,000

TOTAL INVESTMENTS (IDENTIFIED COST $245,881,955)⁴

$236,153,963

Securities that are subject to alternative minimum tax represent 14.6% of the Fund's portfolio based upon total portfolio market value.

1 Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. Current credit ratings are unaudited.

2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. At February 29, 2000 these securities amounted to $7,011,650 which represents 3.0% of net assets. Included in these amounts, securities which have been deemed liquid amounted to $6,500,360 which represents 2.2% of net assets.

3 Denotes a restricted security that has been deemed liquid by criteria approved by the fund's Board of Trustees.

4 The cost of investments for federal tax purposes amounts to $245,881,955. The net unrealized depreciation of investments on a federal tax basis amounts to $9,727,992, which is comprised of $2,791,891 appreciation and $12,519,883 depreciation at Feburary 29, 2000.

Note: The categories of investments are shown as a percentage of net assets ($237,510,284) at February 29, 2000.

The following acronyms are used throughout this portfolio:

AMBAC	--American Municipal Bond Assurance Corporation
COL	--Collateralized
EDFA	--Economic Development Financing Authority
FGIC	--Financial Guaranty Insurance Corporation
FHA	--Federal Housing Administration
FHA/VA	--Federal Housing Administration/Veterans Administration
GNMA	--Government National Mortgage Association
GO	--General Obligation
GTD	--Guaranteed
HDA	--Hospital Development Authority
HEFA	--Health and Education Facilities Authority
HFA	--Housing Finance Agency
IDA	--Industrial Development Authority
INS	--Insured
LIQ	--Liquidity Agreement
LOC	--Letter of Credit
LT	--Limited Tax
MBIA	--Municipal Bond Insurance Association
PRF	--Prerefunded
SFM	--Single Family Mortgage
UT	--Unlimited Tax
VRDNs	--Variable Rate Demand Notes

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

FEBRUARY 29, 2000 (UNAUDITED)

Assets:

Total investments in securities, at value (identified and tax cost $245,881,955)

236,153,963

Cash

46,901

Income receivable

3,691,144

Receivable for investments sold

850,000

Receivable for shares sold

80,793

TOTAL ASSETS

240,822,801

Liabilities:

Payable for investments purchased

2,652,533

Payable for shares redeemed

134,602

Income distribution payable

468,790

Payable for variation margin

15,313

Accrued expenses

41,279

TOTAL LIABILITIES

3,312,517

Net assets for 22,114,437 shares outstanding

237,510,284

Net Assets Consist of:

Paid in capital

250,842,714

Net unrealized depreciation of investments and futures contracts

(9,730,705

)

Accumulated net realized loss on investments and futures contracts

(3,017,043

)

Distributions in excess of net investment income

(584,682

)

TOTAL NET ASSETS

237,510,284

Net Asset Value, Offering Price and Redemption Proceeds Per Share

Class A Shares:

Net Asset Value Per Share ($193,703,216 ÷ 18,035,812 shares outstanding)

$10.74

Offering Price Per Share (100/95.50 of $10.74)¹

$11.25

Redemption Proceeds Per Share (100.00/100 of $10.74)²

$10.74

Class B Shares:

Net Asset Value Per Share ($43,807,068 ÷ 4,078,625 shares outstanding)

$10.74

Offering Price Per Share (100/100.00 of $10.74)¹

$10.74

Redemption Proceeds Per Share (94.50/100 of $10.74)²

$10.15

1 See "What Do Shares Cost?" in the Prospectus.

2 See "Contingent Deferred Sales Charge" in the Prospectus.

See Notes which are an integral part of the Financial Statements

Statement of Operations

SIX MONTHS ENDED FEBRUARY 29, 2000 (UNAUDITED)

Investment Income:

Interest

7,316,186

Expenses:

Investment adviser fee

505,378

Administrative personnel and services fee

95,206

Custodian fees

8,081

Transfer and dividend disbursing agent fees and expenses

73,742

Directors'/Trustees' fees

1,828

Auditing fees

6,264

Legal fees

2,572

Portfolio accounting fees

45,259

Distribution services fee--Class B Shares

171,069

Shareholder services fee--Class A Shares

258,838

Shareholder services fee--Class B Shares

57,023

Share registration costs

12,319

Printing and postage

19,900

Insurance premiums

994

Miscellaneous

2,800

TOTAL EXPENSES

1,261,273

Waivers:

Waiver of investment adviser fee

(111,793

)

Waiver of shareholder services fee--Class A Shares

(20,707

)

TOTAL WAIVERS

(132,500

)

Net expenses

1,128,773

Net investment income

6,187,413

Realized and Unrealized Loss on Investments and Futures Contracts:

Net realized loss on investments and futures contracts

(2,414,045

)

Net change in unrealized depreciation of investments and futures contracts

(8,408,761

)

Net realized and unrealized loss on investments and futures contracts

(10,822,806

)

Change in net assets resulting from operations

(4,635,393

)

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Six Months
Ended
(unaudited)
February 29,
2000

Year
Ended
August 31,
1999

Increase (Decrease) in Net Assets

Operations:

Net investment income

6,187,413

12,702,356

Net realized loss on investments and futures contracts ($(2,414,045) and $(143,649), respectively, as computed for federal tax purposes)

(2,414,045

)

(459,349

)

Net change in unrealized depreciation of investments and futures contracts

(8,408,761)

(17,976,493

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

(4,635,393

)

(5,733,486

)

Distributions to Shareholders:

Distributions from net investment income

Class A Shares

(5,170,028

)

(11,168,636

)

Class B Shares

(965,987

)

(1,629,212

)

Distributions from net realized gains

Class A Shares

(1,810,336

)

Class B Shares

(255,129

)

Distributions in excess of realized gains

Class A Shares

(100,040

)

Class B Shares

(21,220

)

CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS

(6,136,015

)

(14,984,573

)

Share Transactions:

Proceeds from sale of shares

14,800,053

59,110,607

Net asset value of shares issued to shareholders in payment of distributions declared

3,277,801

8,605,947

Cost of shares redeemed

(38,222,851

)

(46,905,826

)

CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS

(20,144,997

)

20,810,728

Change in net assets

(30,916,405

)

92,669

Net Assets:

Beginning of period

268,426,689

268,334,020

End of period

237,510,284

268,426,689

See Notes which are an integral part of the Financial Statements

Financial Highlights--Class A Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
February 29,

Year Ended August 31,

2000

1999

1998

1997

1996

1995

Net Asset Value, Beginning of Period

$11.19

$12.08

$11.71

$11.35

$11.23

$10.94

Income From Investment Operations:

Net investment income

0.27

0.56

0.62

0.65

Net realized and unrealized gain (loss) on investments and futures contracts

(0.45

)

(0.79

)

0.43

0.39

0.12

0.27

TOTAL FROM INVESTMENT OPERATIONS

(0.18

)

(0.23

)

1.05

1.01

0.77

0.92

Less Distributions:

Distributions from net investment income

(0.27

)

(0.56

)

(0.64

)

(0.65

)

(0.65

)

(0.63

)

Distributions from net realized gain on investments

(0.09

)

(0.04

)

Distributions in excess of net realized gain on investments

(0.01

)

TOTAL DISTRIBUTIONS

(0.27

)

(0.66

)

(0.68

)

(0.65

)

(0.65

)

(0.63

)

Net Asset Value, End of Period

$10.74

$11.19

$12.08

$11.71

$11.35

$11.23

Total Return¹

(1.59

(2.05

8.72

9.12

6.99

8.76

Ratios to Average Net Assets:

Expenses

0.75

%²

0.75

Net investment income

5.04

%²

4.74

4.84

5.34

5.73

5.92

Expense waiver/reimbursement³

0.11

%²

0.10

0.22

0.25

0.28

Supplemental Data:

Net assets, end of period (000 omitted)

$193,703

$221,599

$237,705

$212,792

$84,116

$83,722

Portfolio turnover

1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

2 Computed on an annualized basis.

3 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Financial Highlights--Class B Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
February 29,

Year Ended August 31,

2000

1999

1998

1997

Net Asset Value, Beginning of Period

$11.20

$12.08

$11.71

$11.52

Income From Investment Operations:

Net investment income

0.23

0.47

0.54

0.30

Net realized and unrealized gain (loss) on investments and futures contracts

(0.46

)

(0.78

)

0.42

0.20

TOTAL FROM INVESTMENT OPERATIONS

(0.23

)

(0.31

)

0.96

0.50

Less Distributions:

Distributions from net investment income

(0.23

)

(0.47

)

(0.55

)

(0.31

)

Distributions from net realized gain on investments

(0.09

)

(0.04

)

Distributions in excess of net realized gain on investments

(0.01

)

TOTAL DISTRIBUTIONS

(0.23

)

(0.57

)

(0.59

)

(0.31

)

Net Asset Value, End of Period

$10.74

$11.20

$12.08

$11.71

Total Return²

(2.06

(2.70

7.92

4.41

Ratios to Average Net Assets:

Expenses

1.52

%³

1.52

1.53

1.25

%³

Net investment income

4.33

%³

3.98

4.06

4.62

%³

Expenses waiver/reimbursement⁴

0.09

%³

0.08

0.47

%³

Supplemental Data:

Net assets, end of period (000 omitted)

$43,807

$46,828

$30,629

$7,906

Portfolio turnover

1 Reflects operations for the period from March 4, 1997 (date of initial public investment) to August 31, 1997.

2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

3 Computed on an annualized basis.

4 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

FEBRUARY 29, 2000 (UNAUDITED)

ORGANIZATION

Federated Municipal Securities Income Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of six portfolios. The financial statements included herein are only those of Federated Pennsylvania Municipal Income Fund (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income which is exempt from federal regular income tax and the personal income taxes imposed by the Commonwealth of Pennsylvania. The Fund offers two classes of shares: Class A Shares and Class B Shares.

SIGNIFICANT ACCOUNTING POLICIES

Investment Valuation

Investment Income, Expenses and Distributions

Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.

Federal Taxes

Additionally, net capital losses of $621,861 attributable to security transactions incurred after October 31, 1998 are treated as arising on September 1, 1999, the first day of the fund's next taxable year.

When-Issued and Delayed Delivery Transactions

Futures Contracts

At February 29, 2000, the Fund had outstanding futures contracts as set forth below:

Expiration
Date

Contracts
to Deliver

Position

Unrealized
(Depreciation)

March 2000

70 Municipal Bond Index Futures

Short

$(2,713)

Use of Estimates

Other

Investment transactions are accounted for on a trade date basis.

SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Board of Trustees ("Trustees") to issue an unlimited number of full and fractional shares of beneficial interest (without par value).

Transactions in shares were as follows:

Six Months Ended
February 29, 2000

Year Ended
August 31, 1999

Class A Shares:

Shares

Amount

Shares

Amount

Shares sold

932,680

10,268,825

3,020,879

35,437,670

Shares issued to shareholders in payment of distributions declared

246,861

2,678,176

627,660

7,389,056

Shares redeemed

(2,938,433

)

(31,991,591

)

(3,535,185

)

(41,544,942

)

NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS

(1,758,892

)

(19,044,590

)

113,354

1,281,784

Six Months Ended
February 29, 2000

Year Ended
August 31, 1999

Class B Shares:

Shares

Amount

Shares

Amount

Shares sold

414,766

4,531,228

2,003,003

23,672,937

Shares issued to shareholders in payment of distributions declared

55,280

599,625

103,408

1,216,891

Shares redeemed

(574,304

)

(6,231,260

)

(459,373

)

(5,360,884

)

NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS

(104,258

)

(1,100,407

)

1,647,038

19,528,944

NET CHANGE RESULTING FROM SHARE TRANSACTIONS

(1,863,150

)

(20,144,997

)

1,760,392

20,810,728

INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Advisory Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.

Administrative Fee

Distribution Services Fee

Share Class Name

Percentage of
Average Daily
Net Assets
of Class

Class A Shares

0.40%

Class B Shares

0.75%

FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion. Class A Shares did not incur a distribution services fee for the period ended February 29, 2000, and has no present intention of paying or accruing a distribution services fee.

Shareholder Services Fee

Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.

Transfer and Dividend Disbursing Agent Fees and Expenses

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.

Interfund Transactions

During the period ended February 29, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $50,300,000 and $62,000,00, respectively.

General

Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.

INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities, for the period ended February 29, 2000, were as follows:

Purchases	$	37,007,948

Sales	$	48,352,656

Concentration of Credit Risk

Since the Fund invests a substantial portion of its assets in issuers located in one state, it will be more susceptible to factors adversely affecting issuers of that state than would be a comparable tax-exempt mutual fund that invests nationally. In order to reduce the credit risk associated with such factors, at February 29, 2000, 33.7% of the securities in the portfolio of investments were backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The percentage of investments insured by or supported (backed) by a letter of credit from any one institution or agency did not exceed 17.5% of total investments.

Trustees

JOHN F. DONAHUE

THOMAS G. BIGLEY

JOHN T. CONROY, JR.

NICHOLAS P. CONSTANTAKIS

JOHN F. CUNNINGHAM

J. CHRISTOPHER DONAHUE

LAWRENCE D. ELLIS, M.D.

PETER E. MADDEN

CHARLES F. MANSFIELD, JR.

JOHN E. MURRAY, JR., J.D., S.J.D.

MARJORIE P. SMUTS

JOHN S. WALSH

Officers

JOHN F. DONAHUE

Chairman

RICHARD B. FISHER

President

WILLIAM D. DAWSON III

Chief Investment Officer

J. CHRISTOPHER DONAHUE

Executive Vice President

EDWARD C. GONZALES

Executive Vice President

JOHN W. MCGONIGLE

Executive Vice President and Secretary

RICHARD J. THOMAS

Treasurer

LESLIE K. ROSS

Assistant Secretary

Federated
World-Class Investment Manager

SEMI-ANNUAL REPORT

Federated Pennsylvania Municipal Income Fund

SEMI-ANNUAL REPORT TO SHAREHOLDERS

FEBRUARY 29, 2000

Federated
Federated Pennsylvania Municipal Income Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor

Cusip 313923708
Cusip 313923807

2032304 (4/00)