<PAGE>
American Municipal Term Trusts - 1997 Semiannual Report
1997 Semiannual Report
AMERICAN
MUNICIPAL
TERM
TRUSTS
AXT
BXT
CXT
[LOGO]
<PAGE>
[LOGO]
CONTENTS
Portfolio Managers' Letter . . . . . . . . . . . . . . . . . . . . . . . . .2
Financial Statements and Notes . . . . . . . . . . . . . . . . . . . . . . .7
Investments in Securities
AXT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
BXT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
CXT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Glossary***. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
*** This report includes a glossary to help you understand financial terms used
in the portfolio managers' letter. When you see this symbol, it indicates a word
that is defined in the glossary.
AMERICAN MUNICIPAL TERM TRUSTS
- --------------------------------------------------------------------------------
PRIMARY INVESTMENTS
High-quality municipal obligations including municipal zero-coupon securities.
FUND OBJECTIVE
American Municipal Term Trust (AXT), American Municipal Term Trust II (BXT), and
American Municipal Term Trust III (CXT) are diversified, closed-end investment
management companies. The investment objectives of AXT, BXT and CXT are to
provide high current income exempt from regular federal income tax and to return
$10 per share on or shortly before April 15, 2001; April 15, 2002; and April 15,
2003, respectively - although each fund's termination may be extended up to five
years if necessary to assist the fund in reaching its $10 per share objective.
The funds' income may be subject to state or local tax and the federal
alternative minimum tax. Investors should consult their tax advisers. As with
other investment companies, there can be no assurance that each fund will
achieve its objective.
*** - This symbol represents a graduation cap, used throughout this report to
indicate terms defined in the glossary.
<PAGE>
AVERAGE ANNUALIZED TOTAL RETURNS
- --------------------------------------------------------------------------------
Based on net asset value for the periods ended June 30, 1997
- --------------------------------------------------------------------------------
[EDGAR REPRESENTATION OF CHART]
<TABLE>
<CAPTION>
ONE FIVE SINCE
YEAR YEAR INCEPTION
---- ---- ---------
<S> <C> <C> <C>
American Municipal Term Trust (AXT, inception 3/27/91) 6.74% 8.33% 9.44%
American Municipal Term Trust II (BXT, inception 9/26/91) 8.11% 8.72% 9.43%
American Municipal Term Trust III (CXT, inception 11/27/92) 10.38% N/A 9.23%
</TABLE>
All total return figures are through June 30, 1997, and reflect the reinvestment
of distributions but not sales charges. NAV-based performance is used to measure
investment management results. At the end of June, the six-month NAV total
returns for AXT, BXT and CXT were 2.12%, 2.73% and 3.69%, respectively. As
noted in our last shareholder report to you, we no longer compare the funds' NAV
performance to a market benchmark. This is because our primary goal is to meet
the funds' investment objectives of providing high current income exempt from
regular federal income tax and returning $10 per share to investors at the
funds' termination dates.
Based on market price, the six-month total returns for AXT, BXT and CXT were
1.84%, 4.10% and 5.24%, respectively. Average annualized total return figures
based on the change in market price for the one-year, five-year and since
inception periods ended June 30, 1997, were 10.31%, 7.30% and 8.09% for AXT and
10.05%, 7.69% and 7.64% for BXT. The one-year and since inception figures were
13.74% and 7.17% for CXT.
PLEASE REMEMBER, YOU COULD LOSE MONEY WITH THESE INVESTMENTS. NEITHER SAFETY OF
PRINCIPAL NOR STABILITY OF INCOME IS GUARANTEED. Past performance does not
guarantee future results. The investment return and principal value of an
investment will fluctuate so that fund shares, when sold, may be worth more or
less than their original cost. Closed-end funds, such as these funds, often
trade at discounts to net asset value. Therefore, you may be unable to realize
the full net asset value of your shares when you sell.
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1997 Semiannual Report 1 American Municipal Term Trusts
<PAGE>
PORTFOLIO MANAGERS' LETTER
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[PHOTO]
DOUG WHITE, CFA,
shares responsibility for the management of the American Municipal
Term Trusts. He has 14 years of financial experience.
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August 18, 1997
- --------------------------------------------------------------------------------
DEAR SHAREHOLDERS:
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1997, WE ARE PLEASED TO REPORT THAT THE
AMERICAN MUNICIPAL TERM TRUSTS (AXT, BXT AND CXT) REMAINED ON TARGET TO MEET
THEIR INVESTMENT OBJECTIVES. The funds continued to earn more than their monthly
common and preferred stock*** dividends and add to their dividend reserves. This
enabled the funds to maintain their monthly common stock distributions of 5.42
cents, 5.17 cents and 4.75 cents, respectively, which have been unchanged since
their inceptions. In addition, net asset values for the funds remained above the
$10 per share objective. As of June 30, 1997, the net asset values for AXT,
BXT and CXT were $11.49, $11.48 and $11.08, respectively. (Please refer to the
charts below and on page 4 for each fund's distribution and net asset value
history since inception.)
DURING THE FIRST SIX MONTHS OF 1997, INTEREST RATES AND, IN TURN, BOND PRICES
WERE VOLATILE. The economy showed signs of strength early in the period,
prompting the Federal Reserve (the Fed) to raise the federal funds rate*** in
March from 5.25% to 5.50%. That caused bond yields to rise and prices to fall.
It was the first time in more than two years that the Fed had adopted a
tightening monetary policy. Beginning in mid-April, however, concerns of
DISTRIBUTION HISTORY
- --------------------------------------------------------------------------------
AXT BXT CXT
Inception Inception Inception
3/27/91 9/26/91 11/27/92
Total Monthly Income Distributions
Through 6/30/97
- --------------------------------------------------------------------------------
Common Shareholders $4.01 $3.52 $2.57
- --------------------------------------------------------------------------------
Preferred Shareholders (On a Common Share Basis) $1.02 $0.91 $0.72
- --------------------------------------------------------------------------------
Total Capital Gains Distributions to Common
Shareholders Through 6/30/97 $0.05 $0.04 $0.00
- --------------------------------------------------------------------------------
*** - This symbol represents a graduation cap, used throughout this report to
indicate terms defined in the glossary.
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1997 Semiannual Report 2 American Municipal Term Trusts
<PAGE>
PORTFOLIO MANAGERS' LETTER (CONTINUED)
- --------------------------------------------------------------------------------
[PHOTO]
RON REUSS, ISFA,
shares responsibility for the management of the American Municipal
Term Trusts. He has 28 years of financial experience.
- --------------------------------------------------------------------------------
an overheating economy were replaced by signs that the economy was beginning to
slow and inflation was decelerating. As a result, interest rates trended
downward and bond prices increased in the final three months.
FOR THE PERIOD, TAX-EXEMPT BONDS OUTPERFORMED THEIR TAXABLE COUNTERPARTS. The
prices of 30-year, AAA-rated municipal bonds ended the period basically
unchanged, compared to a decrease in the prices of 30-year Treasuries.
Municipals outperformed mainly because of a decrease in the supply of new issues
and, to a lesser degree, because of a pickup in demand. In our report to you six
months ago, we were anticipating an increase in the supply of new national
municipal bonds in 1997. However, year-to-date new issues are down 2.5% compared
to 1996.
DURING THE PERIOD, WE CONTINUED TO REDUCE OUR EXPOSURE TO LONGER MATURITY BONDS
AND INCREASE OUR POSITION IN BONDS THAT COME DUE CLOSER TO THE FUNDS'
TERMINATION DATES. (See chart below.) This strategy is designed to help achieve
the funds' objective of returning $10 per share at maturity. The closer a bond's
maturity date*** is to the termination date of the fund, the less sensitive the
bond's price will be to interest rate changes and the more certain we can be of
its value at termination. This strategy slightly lowered income, but as noted
earlier, the funds earned more than their monthly common and preferred stock
dividends and added to their dividend reserves. (See each fund's dividend
reserve amount in the chart on page 4.)
BONDS MATURING WITHIN A YEAR OF TERMINATION
- --------------------------------------------------------------------------------
The chart below illustrates the percentage of bonds in each fund with maturity
dates within a year of the funds' termination dates.
AXT BXT CXT
Inception Inception Inception
3/27/91 9/26/91 11/27/92
At the Fund's Inception 0% 0% 0%
- --------------------------------------------------------------------------------
As of June 30, 1997 61% 55% 21%
- --------------------------------------------------------------------------------
*** - This symbol represents a graduation cap, used throughout this report to
indicate terms defined in the glossary.
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1997 Semiannual Report 3 American Municipal Term Trusts
<PAGE>
PORTFOLIO MANAGERS' LETTER (CONTINUED)
- --------------------------------------------------------------------------------
GIVEN THE RECENT DECLINE IN INTEREST RATES, WE ARE NOT CURRENTLY IMPLEMENTING
OUR STRATEGY OF SELLING LONGER MATURITY BONDS TO PURCHASE SHORTER MATURITY
BONDS. Lower rates have increased the prices of the longer maturity bonds in the
funds, creating the potential for additional taxable capital gains distributions
if the funds sell these bonds. Moreover, lower rates have reduced the income
available from shorter maturity bonds in which the fund would invest. This
strategy, however, has been effective in the past, and we do plan to employ it
again in the appropriate economic environment.
AS THE FUNDS APPROACH THEIR TERMINATIONS, WE EXPECT THEIR NET ASSET VALUES TO
DECLINE DUE TO THREE FACTORS. First, at some point we will continue to sell
longer maturity bonds in favor of bonds with lower coupons*** that come due
closer to the funds' termination dates. If these shorter-maturity bonds pay
insufficient income to maintain our current dividends, the funds' dividend
reserves may be used to pay common and/or preferred dividends. Second, part of
the unrealized appreciation in the funds is the result of bonds that are
currently trading at unrealized gains.*** As the maturity and/or refunding
dates*** of these bonds approach, their market
NET ASSET VALUE SUMMARY
- --------------------------------------------------------------------------------
Common Shares AXT BXT CXT
Inception Inception Inception
3/27/91 9/26/91 11/27/92
Initial Offering Price $10.00 $10.00 $10.00
- --------------------------------------------------------------------------------
Initial Offering and Underwriting Expenses
(Common and Preferred Stock) -$0.67 -$0.66 -$0.67
- --------------------------------------------------------------------------------
Accumulated Realized Gains or Losses at 6/30/97 +$0.07 +$0.06 +$0.07
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SUBTOTAL $9.40 $9.40 $9.40
- --------------------------------------------------------------------------------
Dividend Reserve
(Undistributed Net Investment Income) at 6/30/97 +$0.72 +$0.70 +$0.46
- --------------------------------------------------------------------------------
Unrealized Appreciation on Investments at 6/30/97 +$1.37 +$1.38 +$1.22
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ON 6/30/97 $11.49 $11.48 $11.08
- --------------------------------------------------------------------------------
*** - This symbol represents a graduation cap, used throughout this report to
indicate terms defined in the glossary.
- --------------------------------------------------------------------------------
1997 Semiannual Report 4 American Municipal Term Trusts
<PAGE>
PORTFOLIO MANAGERS' LETTER (CONTINUED)
- --------------------------------------------------------------------------------
prices will converge toward a price that is at or near par.*** Third, any
realized gains*** in the funds will have to be paid out before or at
termination. All three of these factors could reduce the funds' net asset
values. In addition, keep in mind that the funds are always subject to interest
rate risk*** and credit risk,*** which could have an impact on net asset value.
Please refer to the chart on page 4 for each fund's current dividend reserve,
unrealized appreciation and accumulated realized gains.
LOOKING AHEAD, WE REMAIN POSITIVE ABOUT THE TAX-EXEMPT MARKET. The economy
appears to be growing at a moderate pace, which should help keep inflation under
control. Given this scenario, the Fed is not likely to raise interest rates.
However, we believe the Fed will continue to be vigilant about controlling
economic growth and inflation and may increase short-term interest rates
if inflation becomes a major concern. Should interest rates rise, we would again
look to trade longer maturity bonds for shorter maturities while attempting to
keep the impact on each fund's income-producing potential to a minimum.
AS ALWAYS, WE WILL CONTINUE TO APPLY OUR PROPRIETARY CREDIT ANALYSIS TO EXISTING
HOLDINGS AND NEW PURCHASES as we work toward meeting the funds' objectives. Our
credit analysis is designed to help ensure that the municipalities in which we
invest meet our high-quality criteria and remain able to repay interest and
principal in a timely manner.
Thank you for your investment in the American Municipal Term Trusts. We remain
committed to providing you with quality service and look forward to helping you
achieve your financial goals.
Sincerely,
/s/ Douglas J. White /s/ Ronald R. Reuss
Douglas J. White Ronald R. Reuss
Portfolio Manager Portfolio Manager
*** - This symbol represents a graduation cap, used throughout this report to
indicate terms defined in the glossary.
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1997 Semiannual Report 5 American Municipal Term Trusts
<PAGE>
PORTFOLIO MANAGERS' LETTER (CONTINUED)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITIONS
- --------------------------------------------------------------------------------
As a percentage of total assets on June 30, 1997
AMERICAN MUNICIPAL TERM TRUST (AXT)
[EDGAR REPRESENTATION OF CHART]
Water/Sewer/Pollution Control Revenue.......... 11%
Leasing Revenue................................ 3%
Education Revenue.............................. 7%
Other Assets................................... 2%
Sales/Excise Tax Revenue....................... 14%
Hospital Revenue............................... 17%
Industrial Development Revenue................. 1%
Airport Revenue................................ 1%
General Obligations............................ 16%
Housing Revenue................................ 1%
Electric Revenue............................... 27%
AMERICAN MUNICIPAL TERM TRUST II (BXT)
[EDGAR REPRESENTATION OF CHART]
Water/Sewer/Pollution Control Revenue.......... 10%
Leasing Revenue................................ 5%
Education Revenue.............................. 7%
Other Assets................................... 2%
Multiple Utility Revenue....................... 1%
General Obligations............................ 16%
Hospital Revenue............................... 24%
Industrial Development Revenue................. 4%
Sales/Excise Tax Revenue....................... 6%
Airport Revenue................................ 1%
Housing Revenue................................ 2%
Miscellaneous Revenue.......................... 5%
Electric Revenue............................... 17%
AMERICAN MUNICIPAL TERM TRUST III (CXT)
[EDGAR REPRESENTATION OF CHART]
Water/Sewer/Pollution Control Revenue.......... 22%
Education Revenue.............................. 4%
Leasing Revenue................................ 13%
Electric Revenue............................... 13%
General Obligations............................ 17%
Housing Revenue................................ 4%
Miscellaneous Revenue.......................... 1%
Other Assets................................... 1%
Multiple Utility Revenue....................... 4%
Hospital Revenue............................... 21%
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1997 Semiannual Report 6 American Municipal Term Trusts
<PAGE>
Financial Statements (Unaudited)
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES June 30, 1997
..................................................................
<TABLE>
<CAPTION>
AMERICAN AMERICAN AMERICAN
MUNICIPAL MUNICIPAL MUNICIPAL
TERM TRUST TERM TRUST II TERM TRUST III
-------------- -------------- --------------
<S> <C> <C> <C>
ASSETS:
Investments in securities at market value* (note 2) ........ $ 138,302,356 $ 120,764,187 $ 84,172,693
Cash in bank on demand deposit ............................. 32,106 45,913 46,665
Accrued interest receivable ................................ 2,433,504 1,951,377 1,153,190
-------------- -------------- --------------
Total assets ............................................. 140,767,966 122,761,477 85,372,548
-------------- -------------- --------------
LIABILITIES:
Preferred stock dividends payable (note 3) ................. 23,579 27,674 2,915
Payable for investment securities purchased on a when-issued
basis .................................................... 1,005,830 1,241,879 --
Accrued investment management fee .......................... 28,671 24,935 17,504
Accrued remarketing agent fee .............................. 8,854 7,708 5,542
Accrued administrative fee ................................. 17,202 14,961 10,502
-------------- -------------- --------------
Total liabilities ........................................ 1,084,136 1,317,157 36,463
-------------- -------------- --------------
Net assets applicable to outstanding capital stock ....... $ 139,683,830 $ 121,444,320 $ 85,336,085
-------------- -------------- --------------
-------------- -------------- --------------
COMPOSITION OF NET ASSETS:
Capital stock and additional paid-in capital (common and
preferred stock) ......................................... $ 121,433,704 $ 105,777,790 $ 76,084,420
Undistributed net investment income ........................ 6,071,400 5,125,663 2,430,448
Accumulated net realized gain on investments ............... 610,217 431,720 384,572
Unrealized appreciation of investments ..................... 11,568,509 10,109,147 6,436,645
-------------- -------------- --------------
Total - representing net assets applicable to outstanding
capital stock .......................................... $ 139,683,830 $ 121,444,320 $ 85,336,085
-------------- -------------- --------------
-------------- -------------- --------------
* Investments in securities at identified cost ............. $ 126,733,847 $ 110,655,040 $ 77,736,048
-------------- -------------- --------------
-------------- -------------- --------------
NET ASSET VALUE AND MARKET PRICE OF COMMON STOCK:
Net assets applicable to common stock ...................... $ 97,183,830 $ 84,444,320 $ 58,736,085
Shares of common stock outstanding ......................... 8,455,000 7,355,820 5,300,000
Net asset value ............................................ $ 11.49 $ 11.48 $ 11.08
Market price ............................................... $ 11.13 $ 10.88 $ 10.63
LIQUIDATION PREFERENCE OF PREFERRED STOCK:
Net assets applicable to preferred stock (note 3) .......... $ 42,500,000 $ 37,000,000 $ 26,600,000
Shares of preferred stock outstanding ...................... 1,700 1,480 1,064
Liquidation preference per share ........................... $ 25,000 $ 25,000 $ 25,000
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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1997 Semiannual Report 7 American Municipal Term Trusts
<PAGE>
Financial Statements (Unaudited) (continued)
- ---------------------------------------------------------------------
STATEMENTS OF OPERATIONS For the Six Months Ended June 30, 1997
..................................................................
<TABLE>
<CAPTION>
AMERICAN AMERICAN AMERICAN
MUNICIPAL MUNICIPAL MUNICIPAL
TERM TRUST TERM TRUST II TERM TRUST III
-------------- -------------- --------------
<S> <C> <C> <C>
INCOME:
Interest ................................................... $ 4,283,330 $ 3,649,882 $ 2,460,744
-------------- -------------- --------------
EXPENSES (NOTE 5):
Investment management fee .................................. 172,678 149,872 104,550
Administrative fee ......................................... 103,607 89,923 62,730
Remarketing agent fee ...................................... 53,420 46,506 33,434
Custodian and accounting fees .............................. 40,840 36,388 28,147
Transfer agent fees ........................................ 2,062 1,815 1,391
Reports to shareholders .................................... 6,648 6,065 5,512
Directors' fees ............................................ 6,572 8,986 8,986
Audit and legal fees ....................................... 31,353 31,050 31,052
Other expenses ............................................. 56,256 36,410 38,058
-------------- -------------- --------------
Total expenses ........................................... 473,436 407,015 313,860
Less expenses paid indirectly .......................... (2,065) (1,568) (2,497)
-------------- -------------- --------------
Total net expenses ....................................... 471,371 405,447 311,363
-------------- -------------- --------------
Net investment income .................................... 3,811,959 3,244,435 2,149,381
-------------- -------------- --------------
NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS:
Net realized gain on investments (note 4) .................. 353,781 431,720 306,498
Net change in unrealized appreciation or depreciation of
investments .............................................. (1,305,811) (772,961) 143,689
-------------- -------------- --------------
Net gain (loss) on investments ........................... (952,030) (341,241) 450,187
-------------- -------------- --------------
Net increase in net assets resulting from operations ... $ 2,859,929 $ 2,903,194 $ 2,599,568
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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1997 Semiannual Report 8 American Municipal Term Trusts
<PAGE>
Financial Statements (continued)
- ---------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
..................................................................
<TABLE>
<CAPTION>
AMERICAN MUNICIPAL
TERM TRUST
-------------------------------
Six Months
Ended
6/30/97 Year Ended
(Unaudited) 12/31/96
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 3,811,959 $ 7,840,100
Net realized gain on investments ........................... 353,781 912,314
Net change in unrealized appreciation or depreciation of
investments .............................................. (1,305,811) (3,877,256)
-------------- --------------
Net increase in net assets resulting from operations ..... 2,859,929 4,875,158
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Common stock dividends ................................... (2,291,305) (5,499,132)
Preferred stock dividends ................................ (767,727) (1,410,067)
From net realized gains:
Common stock dividends ................................... -- (448,115)
Preferred stock dividends ................................ -- (135,256)
-------------- --------------
Total distributions ...................................... (3,059,032) (7,492,570)
-------------- --------------
Total decrease in net assets ........................... (199,103) (2,617,412)
Net assets at beginning of period .......................... 139,882,933 142,500,345
-------------- --------------
Net assets at end of period ................................ $ 139,683,830 $ 139,882,933
-------------- --------------
-------------- --------------
Undistributed net investment income ........................ $ 6,071,400 $ 5,318,473
-------------- --------------
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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1997 Semiannual Report 9 American Municipal Term Trusts
<PAGE>
Financial Statements (continued)
- ---------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
..................................................................
<TABLE>
<CAPTION>
AMERICAN MUNICIPAL
TERM TRUST II
-------------------------------
Six Months
Ended
6/30/97 Year Ended
(Unaudited) 12/31/96
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 3,244,435 $ 6,621,493
Net realized gain on investments ........................... 431,720 298,902
Net change in unrealized appreciation or depreciation of
investments .............................................. (772,961) (2,841,031)
-------------- --------------
Net increase in net assets resulting from operations ..... 2,903,194 4,079,364
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Common stock dividends ................................... (1,901,479) (4,563,551)
Preferred stock dividends ................................ (657,706) (1,247,224)
From net realized gains:
Common stock dividends ................................... -- (227,294)
Preferred stock dividends ................................ -- (71,619)
-------------- --------------
Total distributions ...................................... (2,559,185) (6,109,688)
-------------- --------------
Total increase (decrease) in net assets ................ 344,009 (2,030,324)
Net assets at beginning of period .......................... 121,100,311 123,130,635
-------------- --------------
Net assets at end of period ................................ $ 121,444,320 $ 121,100,311
-------------- --------------
-------------- --------------
Undistributed net investment income ........................ $ 5,125,663 $ 4,440,413
-------------- --------------
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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1997 Semiannual Report 10 American Municipal Term Trusts
<PAGE>
Financial Statements (continued)
- ---------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
..................................................................
<TABLE>
<CAPTION>
AMERICAN MUNICIPAL
TERM TRUST III
-------------------------------
Six Months
Ended
6/30/97 Year Ended
(Unaudited) 12/31/96
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income ...................................... $ 2,149,381 $ 4,396,666
Net realized gain on investments ........................... 306,498 230,484
Net change in unrealized appreciation or depreciation of
investments .............................................. 143,689 (1,679,008)
-------------- --------------
Net increase in net assets resulting from operations ..... 2,599,568 2,948,142
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Common stock dividends ................................... (1,258,750) (3,021,000)
Preferred stock dividends ................................ (469,144) (930,034)
From net realized gains:
Common stock dividends ................................... -- (15,900)
Preferred stock dividends ................................ -- (5,298)
-------------- --------------
Total distributions ...................................... (1,727,894) (3,972,232)
-------------- --------------
Total increase (decrease) in net assets ................ 871,674 (1,024,090)
Net assets at beginning of period .......................... 84,464,411 85,488,501
-------------- --------------
Net assets at end of period ................................ $ 85,336,085 $ 84,464,411
-------------- --------------
-------------- --------------
Undistributed net investment income ........................ $ 2,430,448 $ 2,008,961
-------------- --------------
-------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
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1997 Semiannual Report 11 American Municipal Term Trusts
<PAGE>
Notes to Financial Statements (Unaudited)
- ---------------------------------------------------------------------
(1) ORGANIZATION
................................
American Municipal Term Trust Inc. (AXT), American Municipal Term
Trust Inc. II (BXT) and American Municipal Term Trust Inc. III
(CXT) (the funds) are registered under the Investment Company Act
of 1940 (as amended) as diversified, closed-end management
investment companies. AXT, BXT and CXT expect to terminate
operations and distribute all of their net assets to shareholders
on or shortly before April 15, 2001, April 15, 2002, and April
15, 2003, respectively, although termination may be extended to a
date no later than April 15, 2006, April 15, 2007, and April 15,
2008, respectively. The funds invest primarily in high-quality
municipal obligations including municipal zero-coupon securities.
Fund shares are listed on the New York Stock Exchange under the
symbols AXT, BXT and CXT, respectively.
(2) SUMMARY OF
SIGNIFICANT
ACCOUNTING
POLICIES
................................
INVESTMENTS IN SECURITIES
Portfolio securities for which market quotations are readily
available are valued at current market value. If market
quotations or valuations are not available, or if Piper Capital
Management Incorporated believes such quotations or valuations
are inaccurate, unreliable or not reflective of market value,
portfolio securities are valued according to procedures adopted
by the funds' board of directors in good faith at "fair value",
that is, a price that the funds might reasonably expect to
receive for the security or other asset upon its current sale.
The current market value of certain fixed income securities is
provided by an independent pricing service. Fixed income
securities for which prices are not available from an independent
pricing service but where an active market exists are valued
using market quotations obtained from one or more dealers that
make markets in the securities or from a widely-used quotation
system. Short-term securities with maturities of 60 days or less
are valued at amortized cost, which approximates market value.
- ---------------------------------------------------------------------
1997 Semiannual Report 12 American Municipal Term Trusts
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- ---------------------------------------------------------------------
Securities transactions are accounted for on the date securities
are purchased or sold. Realized gains and losses are calculated
on the identified-cost basis. Interest income, including
amortization of bond discount and premium, is recorded on an
accrual basis.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS
Delivery and payment for securities that have been purchased by
the funds on a when-issued or forward-commitment basis can take
place a month or more after the transaction date. During this
period, such securities do not earn interest, are subject to
market fluctuation and may increase or decrease in value prior to
their delivery. The funds segregate, with their custodian, assets
with a market value equal to the amount of their purchase
commitments. The purchase of securities on a when-issued or
forward-commitment basis may increase the volatility of the
funds' net asset value if the funds make such purchases while
remaining substantially fully invested. As of June 30, 1997,
American Municipal Term Trust Inc., American Municipal Term Trust
Inc. II, and American Municipal Term Trust Inc. III had entered
into outstanding when-issued or forward commitments of
$1,005,830, $1,241,879 and $0, respectively.
FEDERAL TAXES
Each fund is treated separately for federal income tax purposes.
Each fund intends to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and not
be subject to federal income tax. Therefore, no income tax
provision is required. The funds intend to distribute their
taxable net investment income and realized gains, if any, to
avoid the payment of any federal excise taxes.
Net investment income and net realized gains (losses) may differ
for financial statement and tax purposes primarily because of
market discount amortization. The character of distributions made
during the year from net investment income or net realized gains
may differ from its ultimate characterization for federal income
tax
- ---------------------------------------------------------------------
1997 Semiannual Report 13 American Municipal Term Trusts
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- ---------------------------------------------------------------------
purposes. In addition, due to the timing of dividend
distributions, the fiscal year in which amounts are distributed
may differ from the year that the income or realized gains
(losses) were recorded by the funds.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income are made monthly for
common shareholders and weekly for preferred shareholders. Common
stock distributions are recorded as of the close of business on
the ex-dividend date and preferred stock dividends are accrued
daily. Net realized gains distributions, if any, will be made at
least annually. Distributions are payable in cash or, for common
shareholders pursuant to the funds' dividend reinvestment plans,
reinvested in additional shares of the funds' common stock. Under
the plans, common shares will be purchased in the open market.
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 reported amounts
in the financial statements. Actual results could differ from
these estimates.
(3) REMARKETED
PREFERRED
STOCK
................................
American Municipal Term Trust, American Municipal Term Trust II,
and American Municipal Term Trust III have issued and, as of June
30, 1997, have outstanding 1,700 shares, 1,480 shares, and 1,064
shares, respectively, of remarketed preferred stock (RP) with a
liquidation preference of $25,000 per share for each fund. The
dividend rate on the RP is adjusted every seven days as
determined by the remarketing agent. On June 30, 1997, the
dividend rates were 4.05%, 3.90% and 4.00% for American Municipal
Term Trust, American Municipal Term Trust II, and American
Municipal Term Trust III, respectively.
RP is a registered trademark of Merrill Lynch & Company.
- ---------------------------------------------------------------------
1997 Semiannual Report 14 American Municipal Term Trusts
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- ---------------------------------------------------------------------
(4) INVESTMENT
SECURITY
TRANSACTIONS
................................
Cost of purchases and proceeds from sales of securities, other
than temporary investments in short-term securities, for the six
months ended June 30, 1997, were as follows:
<TABLE>
<CAPTION>
AMERICAN AMERICAN
AMERICAN MUNICIPAL MUNICIPAL
MUNICIPAL TERM TRUST TERM TRUST
TERM TRUST II III
----------- ----------- -----------
<S> <C> <C> <C>
Purchases ................................... $ 5,505,260 $6,058,456 $5,586,889
Proceeds from sales ......................... $ 6,093,800 $6,691,468 $4,564,682
</TABLE>
(5) EXPENSES
................................
INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES
The funds have entered into the following agreements with Piper
Capital Management Incorporated (the adviser and administrator):
The investment advisory agreement provides the adviser with a
monthly investment management fee in an amount equal to an
annualized rate of 0.25% of the funds' average weekly net assets
(computed by subtracting liabilities, which exclude preferred
stock, from the value of the total assets of the funds). For its
fee, the adviser provides investment advice and, in general,
conducts the management and investment activity of the funds.
The administration agreement provides the administrator with a
monthly fee in an amount equal to an annualized rate of 0.15% of
the funds' average weekly net assets (computed by subtracting
liabilities, which exclude preferred stock, from the value of the
total assets of the funds). For its fee, the administrator will
provide regulatory, reporting, and record-keeping services for
the funds.
REMARKETING AGENT FEE
The funds have entered into a remarketing agent agreement with
Merrill Lynch, Pierce, Fenner & Smith (the remarketing agent).
The remarketing agreement provides the remarketing agent with a
monthly fee in an amount equal to an annualized rate of 0.25% of
the funds' average amount of RP outstanding. For its fee, the
remarketing agent will remarket shares of RP tendered to it, on
behalf of shareholders thereof, and will determine the applicable
dividend rate for each seven-day dividend period.
- ---------------------------------------------------------------------
1997 Semiannual Report 15 American Municipal Term Trusts
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
- ---------------------------------------------------------------------
OTHER FEES AND EXPENSES
In addition to the investment management, administrative and the
remarketing agent fees, the funds are responsible for paying most
other operating expenses including: outside directors' fees and
expenses; custodian fees; registration fees; printing and
shareholder reports; transfer agent fees and expenses; legal,
auditing and accounting services; insurance; interest; taxes and
other miscellaneous expenses.
Expenses paid indirectly represent a reduction of custodian fees
for earnings on miscellaneous cash balances maintained by the
funds.
- ---------------------------------------------------------------------
1997 Semiannual Report 16 American Municipal Term Trusts
<PAGE>
Notes to Financial Statements (continued)
- ---------------------------------------------------------------------
(6) FINANCIAL
HIGHLIGHTS
................................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each period
are as follows:
AMERICAN MUNICIPAL TERM TRUST
<TABLE>
<CAPTION>
Six months
ended Fiscal year ended December 31,
6/30/97 -------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992
------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, common stock, beginning of
period .................................... $ 11.52 $ 11.83 $ 10.52 $ 11.89 $ 10.57 $ 9.99
------------ ------- ------- ------- ------- -------
Operations:
Net investment income ..................... 0.45 0.93 0.94 0.93 0.92 0.92
Net realized and unrealized gains (losses)
on investments .......................... (0.12) (0.35) 1.22 (1.50) 1.17 0.47
------------ ------- ------- ------- ------- -------
Total from operations ................... 0.33 0.58 2.16 (0.57) 2.09 1.39
------------ ------- ------- ------- ------- -------
Distributions to shareholders:
From net investment income
Paid to common shareholders ............. (0.27) (0.65) (0.65) (0.65) (0.65) (0.65)
Paid to preferred shareholders .......... (0.09) (0.17) (0.20) (0.15) (0.12) (0.16)
From net realized gains
Paid to common shareholders ............. -- (0.05) -- -- -- --
Paid to preferred shareholders .......... -- (0.02) -- -- -- --
------------ ------- ------- ------- ------- -------
Total distributions to shareholders ..... (0.36) (0.89) (0.85) (0.80) (0.77) (0.81)
------------ ------- ------- ------- ------- -------
Net asset value, common stock, end of
period .................................... $ 11.49 $ 11.52 $ 11.83 $ 10.52 $ 11.89 $ 10.57
------------ ------- ------- ------- ------- -------
------------ ------- ------- ------- ------- -------
Market value, common stock, end of period ... $ 11.13 $ 11.25 $ 11.00 $ 10.00 $ 10.88 $ 10.50
------------ ------- ------- ------- ------- -------
------------ ------- ------- ------- ------- -------
SELECTED INFORMATION
Total return, common stock, net asset value
(a) ....................................... 2.12% 3.47% 18.93% (6.34%) 18.98% 12.68%
Total return, common stock, market value
(b) ....................................... 1.84% 9.06% 16.91% (2.11%) 9.83% 10.26%
Net assets at end of period (in millions) ... $ 140 $ 140 $ 143 $ 131 $ 143 $ 132
Ratio of expenses to total average weekly net
assets .................................... 0.69%(e) 0.64% 0.61% 0.58% 0.59% 0.62%
Ratio of expenses to average weekly net
assets applicable to common shares ........ 0.99%(e) 0.91% 0.88% 0.84% 0.85% 0.92%
Ratio of net investment income to total
average weekly net assets ................. 5.52%(e) 5.59% 5.72% 5.80% 5.65% 6.03%
Ratio of net investment income to average
weekly net assets applicable to common
stock (c) ................................. 6.34%(e) 6.57% 6.53% 7.04% 7.11% 7.44%
Portfolio turnover rate (excluding short-term
securities) ............................... 4% 9% 1% 1% 2% 4%
Remarketed preferred stock outstanding end of
period (in millions) ...................... $ 43 $ 43 $ 43 $ 43 $ 43 $ 43
Asset coverage ratio (d) .................... 329% 329% 335% 309% 336% 310%
</TABLE>
(a) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT NET ASSET VALUE AND DOES NOT
REFLECT A SALES CHARGE.
(b) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT ACTUAL PRICES PURSUANT TO THE
FUND'S DIVIDEND REINVESTMENT PLAN.
(c) RATIO REFLECTS TOTAL NET INVESTMENT INCOME LESS DIVIDENDS PAID TO PREFERRED
SHAREHOLDERS FROM NET INVESTMENT INCOME DIVIDED BY NET ASSETS APPLICABLE TO
COMMON SHARES.
(d) REPRESENTS TOTAL NET ASSETS DIVIDED BY REMARKETED PREFERRED STOCK.
(e) ANNUALIZED.
- ---------------------------------------------------------------------
1997 Semiannual Report 17 American Municipal Term Trusts
<PAGE>
Notes to Financial Statements (continued)
- ---------------------------------------------------------------------
(6) FINANCIAL
HIGHLIGHTS
................................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each period
are as follows:
AMERICAN MUNICIPAL TERM TRUST II
<TABLE>
<CAPTION>
Six months
ended Fiscal year ended December 31,
6/30/97 -------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992
----------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, common stock, beginning of
period .................................... $11.43 $ 11.71 $ 10.27 $ 11.66 $ 10.26 $ 9.71
----------- ------- ------- ------- ------- -------
Operations:
Net investment income ..................... 0.44 0.90 0.90 0.90 0.89 0.89
Net realized and unrealized gains (losses)
on investments .......................... (0.04) (0.35) 1.37 (1.52) 1.25 0.44
----------- ------- ------- ------- ------- -------
Total from operations ................... 0.40 0.55 2.27 (0.62) 2.14 1.33
----------- ------- ------- ------- ------- -------
Distributions to shareholders:
From net investment income
Paid to common shareholders ............. (0.26) (0.62) (0.62) (0.62) (0.62) (0.62)
Paid to preferred shareholders .......... (0.09) (0.17) (0.20) (0.15) (0.12) (0.16)
From net realized gains
Paid to common shareholders ............. -- (0.03) (0.01) -- -- --
Paid to preferred shareholders .......... -- (0.01) -- -- -- --
----------- ------- ------- ------- ------- -------
Total distributions to shareholders ..... (0.35) (0.83) (0.83) (0.77) (0.74) (0.78)
----------- ------- ------- ------- ------- -------
Net asset value, common stock, end of
period .................................... $11.48 $ 11.43 $ 11.71 $ 10.27 $ 11.66 $ 10.26
----------- ------- ------- ------- ------- -------
----------- ------- ------- ------- ------- -------
Market value, common stock, end of period ... $10.88 $ 10.75 $ 10.63 $ 9.63 $ 10.75 $ 10.38
----------- ------- ------- ------- ------- -------
----------- ------- ------- ------- ------- -------
SELECTED INFORMATION
Total return, common stock, net asset value
(a) ....................................... 2.73% 3.33% 20.48% (6.80%) 20.03% 12.41%
Total return, common stock, market value
(b) ....................................... 4.10% 7.66% 17.28% (4.83%) 9.74% 11.59%
Net assets at end of period (in millions) ... $ 121 $ 121 $ 123 $ 113 $ 123 $ 112
Ratio of expenses to total average weekly net
assets .................................... 0.68%(e) 0.64% 0.62% 0.60% 0.60% 0.64%
Ratio of expenses to average weekly net
assets applicable to common shares ........ 0.98%(e) 0.92% 0.90% 0.88% 0.87% 0.97%
Ratio of net investment income to total
average weekly net assets ................. 5.41%(e) 5.48% 5.58% 5.72% 5.51% 5.92%
Ratio of net investment income to average
weekly net assets applicable to common
stock (c) ................................. 6.22%(e) 6.41% 6.35% 7.01% 6.89% 7.38%
Portfolio turnover rate (excluding short-term
securities) ............................... 5% 6% 3% 0% 2% 11%
Remarketed preferred stock outstanding end of
period (in millions) ...................... $ 37 $ 37 $ 37 $ 37 $ 37 $ 37
Asset coverage ratio (d) .................... 328% 327% 333% 304% 332% 304%
</TABLE>
(a) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT NET ASSET VALUE AND DOES NOT
REFLECT A SALES CHARGE.
(b) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT ACTUAL PRICES PURSUANT TO THE
FUND'S DIVIDEND REINVESTMENT PLAN.
(c) RATIO REFLECTS TOTAL NET INVESTMENT INCOME LESS DIVIDENDS PAID TO PREFERRED
SHAREHOLDERS FROM NET INVESTMENT INCOME DIVIDED BY NET ASSETS APPLICABLE TO
COMMON SHARES.
(d) REPRESENTS TOTAL NET ASSETS DIVIDED BY REMARKETED PREFERRED STOCK.
(e) ANNUALIZED.
- ---------------------------------------------------------------------
1997 Semiannual Report 18 American Municipal Term Trusts
<PAGE>
Notes to Financial Statements (continued)
- ---------------------------------------------------------------------
(6) FINANCIAL
HIGHLIGHTS
................................
Per-share data for a share of capital stock outstanding
throughout each period and selected information for each period
are as follows:
AMERICAN MUNICIPAL TERM TRUST III
<TABLE>
<CAPTION>
Six months
ended Fiscal year ended December 31, Period
6/30/97 -------------------------------------------- Ended
(Unaudited) 1996 1995 1994 1993 12/31/92(e)
----------- ------- ------- -------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, common stock, beginning of
period .................................... $10.92 $ 11.11 $ 9.31 $ 10.95 $ 9.57 $ 9.44
----------- ------- ------- -------- ------- -----------
Operations:
Net investment income ..................... 0.41 0.83 0.83 0.83 0.81 0.04
Net realized and unrealized gains (losses)
on investments .......................... 0.08 (0.27) 1.73 (1.75) 1.36 0.14
----------- ------- ------- -------- ------- -----------
Total from operations ................... 0.49 0.56 2.56 (0.92) 2.17 0.18
----------- ------- ------- -------- ------- -----------
Distributions to shareholders:
From net investment income
Paid to common shareholders ............. (0.24) (0.57) (0.57) (0.57) (0.57) (0.05)
Paid to preferred shareholders .......... (0.09) (0.18) (0.19) (0.15) (0.11) --
----------- ------- ------- -------- ------- -----------
Total distributions to shareholders ..... (0.33) (0.75) (0.76) (0.72) (0.68) (0.05)
----------- ------- ------- -------- ------- -----------
Offering costs and underwriting discounts
associated with the remarket preferred
stock . -- -- -- -- (0.11) --
----------- ------- ------- -------- ------- -----------
Net asset value, common stock, end of
period .................................... $11.08 $ 10.92 $ 11.11 $ 9.31 $ 10.95 $ 9.57
----------- ------- ------- -------- ------- -----------
----------- ------- ------- -------- ------- -----------
Market value, common stock, end of period ... $10.63 $ 10.38 $ 10.13 $ 8.50 $ 10.13 $ 9.88
----------- ------- ------- -------- ------- -----------
----------- ------- ------- -------- ------- -----------
SELECTED INFORMATION
Total return, common stock, net asset value
(a) ....................................... 3.69% 3.65% 25.93% (10.04%) 20.74% 1.88%
Total return, common stock, market value
(b) ....................................... 5.24% 8.38% 26.32% (10.93%) 8.35% (0.78%)
Net assets at end of period (in millions) ... $ 85 $ 84 $ 85 $ 76 $ 85 $ 51
Ratio of expenses to total average weekly net
assets .................................... 0.75%(f) 0.69% 0.66% 0.64% 0.61% 0.60%(f)
Ratio of expenses to average weekly net
assets applicable to common shares ........ 1.10%(f) 1.01% 0.98% 0.96% 0.91% 0.60%(f)
Ratio of net investment income to total
average weekly net assets ................. 5.14%(f) 5.26% 5.38% 5.53% 5.34% 4.90%(f)
Ratio of net investment income to average
weekly net assets applicable to common
stock (c) ................................. 5.87%(f) 6.08% 6.05% 6.88% 6.85% 4.90%(f)
Portfolio turnover rate (excluding short-term
securities) ............................... 6% 3% 5% 3% 1% --%
Remarketed preferred stock outstanding end of
period (in millions) ...................... $ 27 $ 27 $ 27 $ 27 $ 27 $ --
Asset coverage ratio (d) .................... 321% 318% 321% 285% 318% --%
</TABLE>
(a) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT NET ASSET VALUE AND DOES NOT
REFLECT A SALES CHARGE.
(b) ASSUMES REINVESTMENT OF DISTRIBUTIONS AT ACTUAL PRICES PURSUANT TO THE
FUND'S DIVIDEND REINVESTMENT PLAN.
(c) RATIO REFLECTS TOTAL NET INVESTMENT INCOME LESS DIVIDENDS PAID TO PREFERRED
SHAREHOLDERS FROM NET INVESTMENT INCOME DIVIDED BY NET ASSETS APPLICABLE TO
COMMON SHARES.
(d) REPRESENTS TOTAL NET ASSETS DIVIDED BY REMARKETED PREFERRED STOCK.
(e) COMMENCEMENT OF OPERATIONS WAS NOVEMBER 27, 1992.
(f) ANNUALIZED.
- ---------------------------------------------------------------------
1997 Semiannual Report 19 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN MUNICIPAL TERM TRUST June 30, 1997
................................................................................................
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------------- -------------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
MUNICIPAL LONG-TERM SECURITIES (96.8%):
COLORADO (1.5%):
Health Care Facility (FSA) (Prerefunded to 2/15/01),
7.25%, 2/15/16 .................................... $ 1,925,000(d) $ 2,141,447
-------------
DISTRICT OF COLUMBIA (3.4%):
General Obligation (MBIA) (Callable 6/1/00 at 102),
6.75%, 6/1/08 ..................................... 4,400,000 4,728,152
-------------
FLORIDA (2.3%):
Jacksonville Electric Authority (Prerefunded to
10/1/00), 7.00%, 10/1/12 .......................... 3,000,000(d) 3,288,600
-------------
GEORGIA (2.2%):
Municipal Electric Authority (MBIA) (Prerefunded to
1/1/01), 7.00%, 1/1/16 ............................ 2,840,000(d) 3,132,406
-------------
ILLINOIS (12.5%):
Chicago Motor Fuel Tax (AMBAC) (Prerefunded to
1/1/01), 7.10%, 1/1/11 ............................ 1,525,000(d) 1,686,924
Health Facility-Evangelical Hospital (FSA) (Callable
1/1/01 at 102), 7.13%, 1/1/21 ..................... 2,500,000 2,708,725
Higher Education Facility-Augustana College (Connie
Lee), 4.80%, 10/1/01 .............................. 500,000 502,255
Kankakee General Obligation (FGIC) (Callable 5/1/03
at 102), 6.88%, 5/1/11 ............................ 1,000,000 1,107,990
State Dedicated Tax-Civic Center (AMBAC) (Callable
12/15/00 at 102), 7.00%, 12/15/13 ................. 4,500,000 4,910,130
State Sales Tax Revenue (Prerefunded to 6/15/01),
6.90%, 6/15/12-6/15/13 ............................ 2,300,000(d) 2,548,561
State Sales Tax Revenue (Prerefunded to 6/15/99),
7.25%, 6/15/14 .................................... 3,650,000(d) 3,929,772
-------------
17,394,357
-------------
INDIANA (4.9%):
Hamilton S.E. School Building Corporation (AMBAC)
(Callable 1/1/01 at 102), 7.00%, 7/1/08 ........... 3,445,000 3,764,317
Indiana Bond Bank, 5.00%, 2/1/01 .................... 650,000 655,063
Marion County Convention Center (AMBAC) (Callable
6/1/01 at 102), 7.00%, 6/1/10 ..................... 345,000 376,823
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semiannual Report 20 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------------- -------------
<S> <C> <C>
Marion County Convention Center (AMBAC) (Prerefunded
to 6/1/01), 7.00%, 6/1/10 ......................... $ 870,000(d) $ 966,413
St. Joseph County Hospital Authority (MBIA)(Callable
8/15/01 at 102), 7.00%, 8/15/11 ................... 1,000,000 1,088,980
-------------
6,851,596
-------------
IOWA (0.8%):
Dubuque Hospital Revenue (Callable 1/1/02 at 102),
6.88%, 1/1/12 ..................................... 1,000,000 1,072,540
-------------
MAINE (2.4%):
Municipal Bond Bank (Prerefunded 11/1/01), 7.20%,
11/1/13 ........................................... 3,000,000(d) 3,374,580
-------------
MINNESOTA (0.8%):
East Grand Forks Industrial Development Revenue
(Callable 4/1/01 at 102), 8.00%, 4/1/11 ........... 1,000,000 1,087,930
-------------
NEBRASKA (0.8%):
Hospital Lease Investment Financing (MBIA) (Callable
3/1/01 at 102), 7.00%, 3/1/06 ..................... 1,000,000 1,089,400
-------------
NEVADA (6.2%):
Clark County School District (MBIA) (Prerefunded to
6/1/01), 7.00%, 6/1/09 ............................ 3,000,000(d) 3,304,860
University of Nevada Revenue (AMBAC) (Prerefunded to
7/1/00), 7.13%, 7/1/16 ............................ 2,720,000(d) 2,982,589
Washoe County Limited Tax General Obligation,
Zero-Coupon (MBIA), 7.12%, 7/1/06 ................. 3,725,000(b) 2,371,298
-------------
8,658,747
-------------
NEW YORK (2.9%):
New York City General Obligation, 5.00%, 8/1/01 ..... 4,000,000 4,033,640
-------------
PENNSYLVANIA (3.1%):
Higher Education-Duquesne University (MBIA) (Callable
4/1/01 at 100), 7.00%, 4/1/10 ..................... 1,000,000 1,073,390
Sayre Healthcare Facility (AMBAC) (Callable 3/1/01 at
102), 7.00%, 3/1/11 ............................... 3,000,000 3,246,030
-------------
4,319,420
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semiannual Report 21 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------------- -------------
<S> <C> <C>
SOUTH DAKOTA (3.7%):
Health and Education Facility Revenue (Callable
5/1/01 at 102), 7.00%, 11/1/07 .................... $ 3,000,000 $ 3,204,840
Rapid City Area School District (MBIA) (Prerefunded
to 1/1/02), 7.20%, 1/1/11 ......................... 1,770,000(d) 1,976,187
-------------
5,181,027
-------------
TENNESSEE (2.8%):
Bristol Health and Education Facility (FGIC)
(Prerefunded to 3/1/01), 7.00%, 9/1/11 ............ 1,000,000(d) 1,105,440
Housing Development Authority (FSA) (Callable 7/1/00
at 103), 7.60%, 7/1/16 ............................ 1,700,000 1,794,554
Memphis-Shelby County Airport Authority (MBIA), AMT,
5.25%, 2/15/01 .................................... 1,000,000(e) (f) 1,013,890
-------------
3,913,884
-------------
TEXAS (17.4%):
Austin Utility System Revenue (MBIA) (Prerefunded to
5/15/01), 8.00%, 11/15/16 ......................... 500,000(d) 563,735
Corpus Christi Utility System Revenue (FGIC)
(Callable 7/15/00 at 102), 7.00%, 7/15/10 ......... 1,500,000 1,625,625
Harris County Health Facilities (FSA) (Callable
10/1/01 at 102), 6.85%, 10/1/06 ................... 2,000,000 2,187,320
Houston Hotel Occupancy (FGIC) (Prerefunded to
7/1/01), 7.00%, 7/1/15 ............................ 4,700,000(d) 5,152,140
Houston Water and Sewer, Zero-Coupon (AMBAC), 7.14%,
8/15/06 ........................................... 4,285,000(b) 2,711,119
Lower Colorado River Authority (AMBAC) (Callable
1/1/01 at 102), 7.00%, 1/1/11 ..................... 415,000 450,653
Lower Colorado River Authority (AMBAC) (Prerefunded
to 1/1/01), 7.00%, 1/1/11 ......................... 585,000(d) 645,431
Lower Colorado River Authority, Zero-Coupon (AMBAC),
7.17%, 1/1/06 ..................................... 765,000(b) 499,361
Municipal Power Agency, Zero-Coupon (AMBAC), 7.11%,
9/1/06 ............................................ 3,000,000(b) 1,893,870
San Antonio Electric and Gas, Zero-Coupon (FGIC),
7.11%, 2/1/06 ..................................... 3,000,000(b) 1,950,120
Trinity River Authority (AMBAC) (Prerefunded to
8/1/00), 7.10%, 8/1/16 ............................ 2,250,000(d) 2,432,520
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semiannual Report 22 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------------- -------------
<S> <C> <C>
Weatherford Utility System, Water Revenue (MBIA)
(Prerefunded to 9/1/01), 7.00%, 9/1/11 ............ $ 3,750,000(d) $ 4,124,175
-------------
24,236,069
-------------
UTAH (2.8%):
Intermountain Power Agency (FSA), 5.25%, 7/1/01 ..... 3,810,000 3,922,738
-------------
WASHINGTON (17.9%):
Chelan County Public Utilities District (Callable
7/1/03 at 100), AMT, 7.60%, 7/1/25 ................ 3,375,000(f) 3,706,999
Chelan County Public Utilities District (MBIA), AMT,
5.20%-5.35%, 7/1/00-7/1/01 ........................ 885,000(f) 903,584
King and Snohomish Counties School District (FGIC)
(Prerefunded to 12/1/00), 7.00%, 12/1/09 .......... 1,450,000(d) 1,574,396
Public Power Supply System (Prerefunded to 1/1/00),
7.25%, 7/1/15 ..................................... 1,435,000(d) 1,561,854
Public Power Supply System (Prerefunded to 1/1/01),
7.63%, 7/1/10 ..................................... 5,000,000(d) 5,615,350
Public Power Supply System (Prerefunded to 7/1/00),
7.38%, 7/1/12 ..................................... 1,550,000(d) 1,711,371
Public Power Supply System, Zero-Coupon (BIG), 7.15%,
7/1/06 ............................................ 1,500,000(b) 950,700
Public Power Supply System, Zero-Coupon (FGIC),
7.17%, 7/1/06 ..................................... 5,000,000(b) 3,169,000
Public Power Supply Systems, 5.00%-5.25%,
7/1/00-7/1/01 ..................................... 3,500,000 3,548,790
Seattle Water Revenue (Prerefunded to 5/1/00), 7.25%,
5/1/17 ............................................ 2,000,000(d) 2,192,660
-------------
24,934,704
-------------
WEST VIRGINIA (3.5%):
School Building Authority (MBIA) (Prerefunded to
7/1/00), 7.25%, 7/1/15 ............................ 4,000,000(d) 4,402,480
State Water Development Authority (CGIC) (Callable
11/1/01 at 102), 7.00%, 11/1/11 ................... 500,000 549,975
-------------
4,952,455
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semiannual Report 23 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ---------------- -------------
<S> <C> <C>
WISCONSIN (4.9%):
Health & Educational Facilities-Gundersen Clinic
(FSA), 5.50%, 12/1/01 ............................. $ 2,500,000 $ 2,601,125
Health and Education Facilities-Waukesha Hospital
(AMBAC) (Callable 8/15/00 at 102), 7.25%,
8/15/19 ........................................... 105,000 114,106
Health and Education Facilities-Waukesha Hospital
(AMBAC) (Prerefunded to 8/15/00), 7.25%,
8/15/19 ........................................... 1,570,000(d) 1,731,223
Health and Education Facility (MBIA) (Prerefunded to
6/1/00), 7.00%, 6/1/20 ............................ 1,600,000(d) 1,745,296
Neenah Industrial Development Revenue (Callable
6/1/00 at 101), AMT, 6.75%, 6/1/12 ................ 650,000(f) 686,914
-------------
6,878,664
-------------
Total Municipal Long-Term Securities
(cost: $123,623,847) ............................ 135,192,356
-------------
MUNICIPAL SHORT-TERM SECURITIES (2.2%):
IDAHO (0.5%):
Health Facilities Authority, 4.10%, 5/1/22 .......... 710,000(c) 710,000
-------------
ILLINOIS (0.2%):
Health Facilities Authority, 4.30%, 1/1/16 .......... 400,000(c) 400,000
-------------
INDIANA (0.2%):
Hospital Equipment Finance Authority, 4.25%,
12/1/15 ........................................... 300,000(c) 300,000
-------------
MICHIGAN (0.6%):
Flint Hospital Building Authority, 4.30%, 7/1/15 .... 800,000(c) 800,000
-------------
NEW YORK (0.1%):
New York City Municipal Water Authority, 5.50%,
6/15/25 ........................................... 100,000(c) 100,000
-------------
NORTH DAKOTA (0.6%):
Grand Forks Health Care-United Hospital, 4.10%,
12/1/25 ........................................... 800,000(c) 800,000
-------------
Total Municipal Short-Term Securities
(cost: $3,110,000) .............................. 3,110,000
-------------
Total Investments in Securities
(cost: $126,733,847) (g) ........................ $ 138,302,356
-------------
-------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semiannual Report 24 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
NOTES TO INVESTMENTS IN SECURITIES:
(a) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(b) FOR ZERO-COUPON INVESTMENTS, THE INTEREST RATE SHOWN IS THE EFFECTIVE YIELD
ON THE DATE OF PURCHASE.
(c) FLOATING OR VARIABLE RATE OBLIGATION MATURING IN MORE THAN ONE YEAR. THE
INTEREST RATE, WHICH IS BASED ON SPECIFIC, OR AN INDEX OF, MARKET INTEREST
RATES, IS SUBJECT TO CHANGE PERIODICALLY AND IS THE EFFECTIVE RATE ON JUNE
30, 1997. THIS INSTRUMENT MAY ALSO HAVE A DEMAND FEATURE WHICH ALLOWS THE
RECOVERY OF PRINCIPAL AT ANY TIME, OR AT SPECIFIED INTERVALS NOT EXCEEDING
ONE YEAR, ON UP TO 30 DAYS' NOTICE. MATURITY DATE SHOWN REPRESENTS FINAL
MATURITY.
(d) PREREFUNDED ISSUES ARE BACKED BY U.S. GOVERNMENT OBLIGATIONS. THESE BONDS
ARE CALLED AND MATURE AT THE CALL DATE INDICATED.
(e) ON JUNE 30, 1997, THE TOTAL COST OF INVESTMENTS PURCHASED ON A WHEN-ISSUED
BASIS WAS $1,005,830.
(f) AMT - ALTERNATIVE MINIMUM TAX. AS OF JUNE 30, 1997, THE AGGREGATE MARKET
VALUE OF SECURITIES SUBJECT TO THE ALTERNATIVE MINIMUM TAX IS $6,311,387,
WHICH REPRESENTS 4.52% OF NET ASSETS.
(g) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES. THE AGGREGATE GROSS
UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED
ON THIS COST WERE AS FOLLOWS:
<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION ...... $ 11,568,509
GROSS UNREALIZED DEPRECIATION ...... --
-------------
NET UNREALIZED APPRECIATION ...... $ 11,568,509
-------------
-------------
</TABLE>
- ---------------------------------------------------------------------
1997 Semiannual Report 25 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN MUNICIPAL TERM TRUST II June 30, 1997
..........................................................................................
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
MUNICIPAL LONG-TERM SECURITIES (97.2%):
FLORIDA (4.7%):
Manatee County, Zero-Coupon (MBIA), 6.91%,
10/1/07 ........................................... $ 2,995,000(b) $ 1,790,710
University Community Hospital (FSA) (Prerefunded to
9/1/00), 7.50%, 9/1/11 ............................ 3,500,000(e) 3,893,295
------------
5,684,005
------------
ILLINOIS (24.1%):
Belleville General Obligation (FGIC) (Prerefunded to
12/1/01), 7.13%, 12/1/08 .......................... 1,000,000(e) 1,109,800
Carbondale General Obligation (FGIC) (Prerefunded to
5/1/01), 6.90%, 5/1/12 ............................ 3,200,000(e) 3,497,600
Central Lake County, Zero-Coupon (MBIA), 6.98%,
5/1/07 ............................................ 2,370,000(b) 1,426,290
Chicago Motor Fuel Tax (AMBAC) (Prerefunded to
1/1/01), 7.10%, 1/1/11 ............................ 1,500,000(e) 1,659,270
Chicago Wastewater Revenue (FGIC) (Prerefunded to
11/15/00), 6.75%, 11/15/20 ........................ 2,000,000(e) 2,188,580
Commonwealth Edison Pollution Control (MBIA)
(Callable 6/1/01 at 102), 7.25%, 6/1/11 ........... 1,000,000 1,101,070
Cook County General Obligation (AMBAC) (Prerefunded
to 11/1/01), 6.75%, 11/1/18 ....................... 5,000,000(e) 5,549,000
Decatur, Zero-Coupon (AMBAC), 6.98%, 10/1/07 ........ 1,250,000(b) 736,250
Health Facility-Evangelical Hospital (Callable
4/15/02 at 102), 6.75%, 4/15/12-4/15/17 ........... 2,310,000 2,642,320
Health Facility-Evangelical Hospital (Prerefunded to
4/15/02), 6.75%, 4/15/12-4/15/17 .................. 1,190,000(e) 1,323,113
Health Facility-Highland Park Hospital (FGIC), 5.30%,
10/1/02 ........................................... 1,265,000 1,306,998
Higher Education Facility-Augustana College (Connie
Lee), 4.90%, 10/1/02 .............................. 500,000 502,540
Kane County Public Building Authority (MBIA)
(Prerefunded to 12/1/99), 6.88%, 12/1/10 .......... 1,000,000(e) 1,062,430
Kendall, Kane, and Will Counties, Zero-Coupon (FGIC),
6.96%, 3/1/07 ..................................... 975,000(b) 591,835
Lake County Water and Sewer System (AMBAC)
(Prerefunded to 12/1/01), 6.75%,
12/1/08-12/1/09 ................................... 4,215,000(e) 4,614,919
------------
29,312,015
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semiannual Report 26 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST II
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
INDIANA (13.2%):
Boonville School Building Corporation (Callable
7/1/02 at 102), 6.90%, 7/1/09 ..................... $ 2,000,000 $ 2,218,740
Indiana Bond Bank, 5.15%, 2/1/02 .................... 900,000 910,575
Indiana University, Zero-Coupon (AMBAC), 7.07%,
8/1/07 ............................................ 3,180,000(b) 1,889,206
Lake Central Multi-District School Building
Corporation (Prerefunded to 7/15/01), 7.00%,
1/15/14-1/15/18 ................................... 2,500,000(e) 2,777,700
Noblesville/Hamilton County School Building
Corporation (Prerefunded to 2/1/01), 7.00%,
2/1/13 ............................................ 1,000,000(e) 1,103,680
Port Commission, Cargill Inc. Project (Callable
5/1/02 at 102), 6.88%, 5/1/12 ..................... 450,000(c) 486,936
Purdue University (AMBAC) (Prerefunded to 7/1/01),
7.00%, 7/1/14 ..................................... 3,000,000(e) 3,337,920
St. Joseph County Hospital Authority (MBIA) (Callable
12/1/01 at 102), 7.00%, 12/1/12 ................... 3,000,000 3,280,230
------------
16,004,987
------------
IOWA (2.8%):
Mason City Hospital Facilities (FSA) (Callable
8/15/01 at 102), 6.88%, 8/15/09 ................... 1,265,000 1,371,728
Polk County Health Facilities (MBIA) (Callable
11/1/01 at 101), 7.10%, 11/1/09 ................... 1,895,000 2,061,608
------------
3,433,336
------------
KENTUCKY (0.9%):
Owensboro Electric Light and Power, Zero-Coupon
(AMBAC), 6.91%, 1/1/07 ............................ 1,775,000(b) 1,101,955
------------
LOUISIANA (2.7%):
New Orleans General Obligation, Zero-Coupon (AMBAC),
7.01%, 9/1/07 ..................................... 5,000,000(b) 2,972,400
Parrish of St. Martin, Cargill Inc. Project (Callable
10/1/02 at 102), 6.63%, 10/1/12 ................... 300,000(c) 321,588
------------
3,293,988
------------
MICHIGAN (0.9%):
State Housing Development Authority (FSA) (Callable
10/15/02 at 103), 6.85%, 10/15/18 ................. 1,000,000 1,062,150
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semiannual Report 27 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST II
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
MONTANA (2.8%):
State Board of Investment (MBIA) (Callable 6/1/01 at
102), 6.88%, 6/1/20 ............................... $ 3,000,000 $ 3,329,640
------------
NEVADA (1.7%):
Clark County School District (FGIC), 5.75%,
6/15/02 ........................................... 2,000,000 2,106,780
------------
NEW HAMPSHIRE (0.8%):
Single Family Housing Authority (Callable 7/1/03 at
102), 5.85%, 7/1/10 ............................... 1,000,000 1,014,020
------------
NEW JERSEY (1.8%):
State Educational Facilities Authority (Callable
7/1/01 at 102), 6.88%, 7/1/10 ..................... 2,000,000 2,124,960
------------
NEW YORK (0.8%):
New York City General Obligation, 5.10%, 8/1/02 ..... 1,000,000 1,009,310
------------
NORTH DAKOTA (4.8%):
Bismark Hospital Revenue (AMBAC) (Callable 5/1/01 at
102), 6.90%, 5/1/06 ............................... 4,300,000 4,681,927
Grand Forks Health Care Authority (MBIA) (Callable
12/1/01 at 102), 6.63%, 12/1/10 ................... 1,000,000 1,078,710
------------
5,760,637
------------
SOUTH CAROLINA (1.4%):
Lexington County Health Services (FSA) (Callable
10/1/01 at 102), 6.75%, 10/1/18 ................... 1,600,000 1,730,256
------------
TENNESSEE (1.0%):
Memphis-Shelby County Airport Authority (MBIA), AMT,
5.25%, 2/15/02 .................................... 1,235,000(f) (g) 1,252,982
------------
TEXAS (8.1%):
Harris County Health Facilities (FSA) (Callable
10/1/01 at 102), 7.00%, 10/1/14 ................... 2,225,000 2,427,186
Houston Hotel Occupancy (FGIC) (Prerefunded to
7/1/01), 7.00%, 7/1/15 ............................ 5,095,000(e) 5,585,139
Houston Water and Sewer, Zero-Coupon (AMBAC), 6.91%,
12/1/07 ........................................... 3,000,000(b) 1,769,730
------------
9,782,055
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semiannual Report 28 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST II
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
WASHINGTON (17.1%):
Chelan County Public Utilities District (Callable
7/1/03 at 100), AMT, 7.60%, 7/1/25 ................ $ 3,000,000(g) $ 3,295,110
Chelan County Public Utilities District (MBIA), AMT,
5.45%, 7/1/02 ..................................... 385,000(g) 396,962
Clark County Public Utility District (FGIC) (Callable
1/1/01 at 102), 6.50%, 1/1/11 ..................... 2,000,000 2,150,020
King and Snohomish Counties School District (FGIC)
(Callable 12/1/02 at 100), 6.63%, 12/1/12 ......... 300,000 324,726
Public Power Supply System (Callable 7/1/01 at 102),
6.75%, 7/1/11 ..................................... 1,350,000 1,452,573
Public Power Supply System (Prerefunded to 1/1/00),
7.25%, 7/1/15 ..................................... 3,875,000(e) 4,217,550
Public Power Supply System (Prerefunded to 7/1/00),
7.00%-7.38%, 7/1/11-7/1/12 ........................ 5,225,000(e) 5,761,646
Public Power Supply Systems, 5.25%, 7/1/01 .......... 2,000,000 2,041,180
Snohomish County Solid Waste Revenue (MBIA) (Callable
12/1/01 at 102), 7.00%, 12/1/10 ................... 1,000,000 1,101,370
------------
20,741,137
------------
WEST VIRGINIA (4.1%):
School Building Authority (MBIA) (Callable 7/1/00 at
102), 6.75%, 7/1/17 ............................... 2,500,000 2,716,675
State Water Development Authority (Prerefunded to
11/1/01), 7.30%-7.40%, 11/1/11-11/1/19 ............ 2,000,000(e) 2,263,980
------------
4,980,655
------------
WISCONSIN (3.5%):
Health & Educational Facilities-Gundersen Clinic
(FSA), 5.10%, 12/1/02 ............................. 3,000,000 3,074,010
Neenah Industrial Development Revenue (Callable
6/1/00 at 101), AMT, 6.75%, 6/1/12 ................ 1,150,000(g) 1,215,309
------------
4,289,319
------------
Total Municipal Long-Term Securities
(cost: $107,905,040) ............................ 118,014,187
------------
MUNICIPAL SHORT-TERM SECURITIES (2.3%):
ILLINOIS (0.2%):
Health Facilities Authority, 4.30%, 1/1/16 .......... 200,000(d) 200,000
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semiannual Report 29 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST II
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
INDIANA (1.9%):
Hospital Equipment Finance Authority, 4.25%,
12/1/15 ........................................... $ 2,250,000(d) $ 2,250,000
------------
NORTH DAKOTA (0.2%):
Grand Forks Health Care-United Hospital, 4.10%,
12/1/25 ........................................... 300,000(d) 300,000
------------
Total Municipal Short-Term Securities
(cost: $2,750,000) .............................. 2,750,000
------------
Total Investments in Securities
(cost: $110,655,040) (h) ........................ $120,764,187
------------
------------
</TABLE>
NOTES TO INVESTMENTS IN SECURITIES:
(a) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(b) FOR ZERO-COUPON INVESTMENTS, THE INTEREST RATE SHOWN IS THE EFFECTIVE YIELD
ON THE DATE OF PURCHASE.
(c) SECURITIES PURCHASED AS PART OF A PRIVATE PLACEMENT WHICH HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES
ACT OF 1933 AND ARE CONSIDERED TO BE ILLIQUID. ON JUNE 30, 1997, THE TOTAL
MARKET VALUE OF THESE INVESTMENTS WAS $808,524 OR .67% OF TOTAL NET ASSETS.
(d) FLOATING OR VARIABLE RATE OBLIGATION MATURING IN MORE THAN ONE YEAR. THE
INTEREST RATE, WHICH IS BASED ON SPECIFIC, OR AN INDEX OF, MARKET INTEREST
RATES, IS SUBJECT TO CHANGE PERIODICALLY AND IS THE EFFECTIVE RATE ON JUNE
30, 1997. THIS INSTRUMENT MAY ALSO HAVE A DEMAND FEATURE WHICH ALLOWS THE
RECOVERY OF PRINCIPAL AT ANY TIME, OR AT SPECIFIED INTERVALS NOT EXCEEDING
ONE YEAR, ON UP TO 30 DAYS' NOTICE. MATURITY DATE SHOWN REPRESENTS FINAL
MATURITY.
(e) PREREFUNDED ISSUES ARE BACKED BY U.S. GOVERNMENT OBLIGATIONS. THESE BONDS
ARE CALLED AND MATURE AT THE CALL DATE INDICATED.
(f) ON JUNE 30, 1997, THE TOTAL COST OF INVESTMENTS PURCHASED ON A WHEN-ISSUED
BASIS WAS $1,241,879.
(g) AMT - ALTERNATIVE MINIMUM TAX. AS OF JUNE 30, 1997, THE AGGREGATE MARKET
VALUE OF SECURITIES SUBJECT TO THE ALTERNATIVE MINIMUM TAX IS $6,160,363,
WHICH REPRESENTS 5.07% OF NET ASSETS.
(h) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES. THE AGGREGATE GROSS
UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED
ON THIS COST WERE AS FOLLOWS:
<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION ...... $ 10,109,147
GROSS UNREALIZED DEPRECIATION ...... --
------------
NET UNREALIZED APPRECIATION ...... $ 10,109,147
------------
------------
</TABLE>
- ---------------------------------------------------------------------
1997 Semiannual Report 30 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited)
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
AMERICAN MUNICIPAL TERM TRUST III June 30, 1997
.......................................................................................
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
(PERCENTAGES OF EACH INVESTMENT CATEGORY RELATE TO TOTAL NET ASSETS)
MUNICIPAL LONG-TERM SECURITIES (98.2%):
ALABAMA (0.6%):
Agricultural and Mechanical University Revenue (MBIA)
(Callable 11/1/02 at 102), 6.45%, 11/1/17 ......... $ 500,000 $ 543,565
------------
COLORADO (1.2%):
Snowmass Village Multifamily Housing (FSA) (Callable
12/15/02 at 102), 6.25%, 12/15/16 ................. 1,000,000 1,034,850
------------
DISTRICT OF COLUMBIA (3.5%):
Catholic University of America (Connie Lee) (Callable
10/1/03 at 102), 6.30%, 10/1/13 ................... 1,000,000 1,044,100
General Obligation (MBIA), 4.75%, 6/1/03 ............ 1,960,000 1,949,945
------------
2,994,045
------------
FLORIDA (0.7%):
Broward County School District, Zero-Coupon (MBIA),
6.55%, 2/15/08 .................................... 1,000,000(b) 583,800
------------
HAWAII (1.5%):
State General Obligation (FGIC), 4.80%, 3/1/03 ...... 1,250,000 1,260,725
------------
ILLINOIS (18.4%):
Chicago Wastewater Revenue (FGIC) (Prerefunded to
1/1/03), 6.35%, 1/1/22 ............................ 1,000,000(d) 1,103,140
Health Facility-Alexian Brothers Medical Center
(MBIA) (Callable 1/1/02 at 102), 6.38%, 1/1/15 .... 1,125,000 1,199,756
Health Facility-Elmhurst Memorial Hospital (FGIC)
(Callable 1/1/02 at 102), 6.50%, 1/1/12 ........... 1,190,000 1,275,989
Health Facility-Highland Park Hospital (FGIC), 5.40%,
10/1/03 ........................................... 1,000,000 1,038,570
Health Facility-Lutheran General Systems (FSA)
(Callable 4/1/03 at 102), 6.13%, 4/1/12 ........... 1,000,000 1,078,070
Henry Hospital District (AMBAC) (Callable 12/1/02 at
100), 6.60%, 12/1/17 .............................. 2,000,000 2,141,860
Higher Education Facility-Augustana College (Connie
Lee), 5.00%, 10/1/03 .............................. 330,000 331,911
Lake County Housing and Finance Corporation (FHA)
(Callable 11/1/02 at 100), 6.70%, 11/1/14 ......... 2,000,000 2,072,120
Rochelle Water and Sewer Revenue (Callable 5/1/02 at
102), 7.15%, 5/1/14 ............................... 2,000,000 2,182,860
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semiannual Report 31 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST III
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
State General Obligation (CGIC) (Callable 10/1/02 at
102), 6.25%, 10/1/12 .............................. $ 3,100,000 $ 3,317,930
------------
15,742,206
------------
INDIANA (16.8%):
Crawfordsville School Building Corporation (Callable
1/1/03 at 102), 6.25%, 7/1/11 ..................... 1,500,000 1,586,805
Freemont Middle School Building (AMBAC) (Prerefunded
to 3/15/02), 6.75%, 3/15/13 ....................... 3,000,000(d) 3,315,000
Health Facilities-Community Hospital Project (MBIA)
(Callable 5/1/02 at 102), 6.40%, 5/1/12 ........... 5,000,000 5,352,350
Health Facilities-Methodist Hospital (AMBAC)
(Callable 9/1/02 at 102), 5.75%, 9/1/15 ........... 1,750,000 1,823,290
Lake County Redevelopment Authority (Callable 2/1/05
at 102), 6.45%, 2/1/11 ............................ 1,600,000 1,737,760
Patoka Lake Regional Water and Sewer District (AMBAC)
(Callable 1/1/04 at 101), 6.45%, 1/1/15 ........... 500,000 542,150
------------
14,357,355
------------
IOWA (1.5%):
Cedar Rapids Hospital Facilities (FGIC) (Callable
8/15/03 at 102), 6.13%, 8/15/13 ................... 1,200,000 1,252,908
------------
KANSAS (1.8%):
Kansas City Utility Systems, Zero-Coupon (AMBAC),
6.40%, 3/1/08 ..................................... 2,575,000(b) 1,496,246
------------
MAINE (2.5%):
Water and Sewer Revenue (Callable 11/1/02 at 102),
6.60%, 11/1/15 .................................... 2,000,000 2,171,460
------------
MICHIGAN (1.8%):
Municipal Bond Authority Revenue (Callable 11/1/02 at
102), 6.50%, 5/1/16 ............................... 1,000,000 1,080,130
State Building Authority (Callable 10/1/02 at 102),
6.25%, 10/1/12 .................................... 400,000 427,160
------------
1,507,290
------------
NEVADA (1.2%):
Clark County School District (FGIC), 5.75%,
6/15/03 ........................................... 1,000,000 1,057,450
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semiannual Report 32 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST III
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
NEW MEXICO (1.3%):
Las Cruces Health Facility-Evangelical Lutheran
Project (CGIC) (Callable 12/1/02 at 102), 6.45%,
12/1/17 ........................................... $ 1,000,000 $ 1,078,150
------------
NEW YORK (2.1%):
State General Obligation, 5.20%, 8/1/03 ............. 1,735,000 1,752,940
------------
NORTH DAKOTA (3.8%):
Mercer County Pollution Control Revenue (AMBAC),
7.20%, 6/30/13 .................................... 2,700,000 3,226,014
------------
RHODE ISLAND (1.5%):
State Health and Education Building Corporation
(Connie Lee) (Callable 4/1/03 at 102), 6.38%,
4/1/12 ............................................ 1,200,000 1,260,792
------------
SOUTH CAROLINA (2.0%):
Piedmont Municipal Power Agency (MBIA) (Callable
1/1/03 at 102), 6.30%, 1/1/14 ..................... 1,600,000 1,713,376
------------
SOUTH DAKOTA (4.8%):
Heartland Consumers Power District (FSA), 6.00%,
1/1/17 ............................................ 85,000 90,731
State Building Authority (AMBAC) (escrowed to
maturity), 6.63%, 9/1/12 .......................... 3,600,000 3,995,748
------------
4,086,479
------------
TEXAS (20.2%):
Austin Utility System Revenue, Zero-Coupon (MBIA),
6.53%, 11/15/08 ................................... 5,000,000(b) 2,794,650
Houston Water and Sewer Revenue (FSA) (Callable
12/1/02 at 102), 6.38%, 12/1/14 ................... 2,000,000 2,128,480
Montgomery County Hospital District (FSA)
(Prerefunded to 4/1/02), 6.63%, 4/1/17 ............ 3,300,000(d) 3,653,925
Pflugerville Independent School District (Callable
8/15/04 at 100), 5.75%, 8/15/15 ................... 975,000 993,447
San Antonio Electric and Gas, Zero-Coupon (FGIC),
6.40%, 2/1/08 ..................................... 4,500,000(b) 2,618,730
San Antonio Water System Revenue (MBIA) (Callable
5/15/02 at 102), 6.50%, 5/15/10 ................... 3,000,000 3,268,800
State Capital Appreciation, Zero-Coupon (FGIC),
6.43%, 4/1/08 ..................................... 3,100,000(b) 1,788,731
------------
17,246,763
------------
</TABLE>
SEE ACCOMPANYING NOTES TO INVESTMENTS IN SECURITIES.
- ---------------------------------------------------------------------
1997 Semiannual Report 33 American Municipal Term Trusts
<PAGE>
Investments in Securities (Unaudited) (continued)
- ---------------------------------------------------------------------
AMERICAN MUNICIPAL TERM TRUST III
(CONTINUED)
<TABLE>
<CAPTION>
Principal Market
Description of Security Amount Value (a)
- --------------------------------------------------------- ----------- ------------
<S> <C> <C>
WASHINGTON (7.8%):
Chelan County Public Utilities District (MBIA), AMT,
5.55%, 7/1/03 ..................................... $ 305,000(e) $ 316,004
Public Power Supply System (Callable 7/1/01 at 102),
6.50%, 7/1/18 ..................................... 2,515,000 2,672,263
Public Power Supply System (Callable 7/1/02 at 102),
6.25%, 7/1/12 ..................................... 3,555,000 3,669,684
------------
6,657,951
------------
WEST VIRGINIA (3.2%):
Clarksburg Water Revenue (Asset Guaranty) (Callable
9/1/02 at 102), 6.25%, 9/1/14 ..................... 2,620,000 2,748,328
------------
Total Municipal Long-Term Securities
(cost: $77,336,048) ............................. 83,772,693
------------
MUNICIPAL SHORT-TERM SECURITIES (0.5%):
ILLINOIS (0.5%):
Health Facilities Authority, 4.30%, 1/1/16
(cost: $400,000) .................................. 400,000(c) 400,000
------------
Total Investments in Securities
(cost: $77,736,048) (f) ......................... $ 84,172,693
------------
------------
</TABLE>
NOTES TO INVESTMENTS IN SECURITIES:
(a) SECURITIES ARE VALUED IN ACCORDANCE WITH PROCEDURES DESCRIBED IN NOTE 2 TO
THE FINANCIAL STATEMENTS.
(b) FOR ZERO-COUPON INVESTMENTS, THE INTEREST RATE SHOWN IS THE EFFECTIVE YIELD
ON THE DATE OF PURCHASE.
(c) FLOATING OR VARIABLE RATE OBLIGATION MATURING IN MORE THAN ONE YEAR. THE
INTEREST RATE, WHICH IS BASED ON SPECIFIC, OR AN INDEX OF, MARKET INTEREST
RATES, IS SUBJECT TO CHANGE PERIODICALLY AND IS THE EFFECTIVE RATE ON JUNE
30, 1997. THIS INSTRUMENT MAY ALSO HAVE A DEMAND FEATURE WHICH ALLOWS THE
RECOVERY OF PRINCIPAL AT ANY TIME, OR AT SPECIFIED INTERVALS NOT EXCEEDING
ONE YEAR, ON UP TO 30 DAYS' NOTICE. MATURITY DATE SHOWN REPRESENTS FINAL
MATURITY.
(d) PREREFUNDED ISSUES ARE BACKED BY U.S. GOVERNMENT OBLIGATIONS. THESE BONDS
ARE CALLED AND MATURE AT THE CALL DATE INDICATED.
(e) AMT - ALTERNATIVE MINIMUM TAX. AS OF JUNE 30, 1997, THE AGGREGATE MARKET
VALUE OF SECURITIES SUBJECT TO THE ALTERNATIVE MINIMUM TAX IS $316,004,
WHICH REPRESENTS .37% OF NET ASSETS.
(f) ALSO APPROXIMATES COST FOR FEDERAL INCOME TAX PURPOSES. THE AGGREGATE GROSS
UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS IN SECURITIES BASED
ON THIS COST WERE AS FOLLOWS:
<TABLE>
<S> <C>
GROSS UNREALIZED APPRECIATION ...... $ 6,436,645
GROSS UNREALIZED DEPRECIATION ...... --
------------
NET UNREALIZED APPRECIATION ...... $ 6,436,645
------------
------------
</TABLE>
- ---------------------------------------------------------------------
1997 Semiannual Report 34 American Municipal Term Trusts
<PAGE>
GLOSSARY OF TERMS***
- --------------------------------------------------------------------------------
COUPON
The interest rate on a bond that the issuer promises to pay to the holder until
the bond matures or resets its rate. It is expressed as an annual percentage of
face value.
CREDIT RISK
The risk that a bond issuer will not make timely principal and interest payments
and a loss to the investor will result.
FEDERAL FUNDS RATE
The federal funds rate is the interest rate charged by banks with excess
reserves at a Federal Reserve district bank to banks needing overnight loans to
meet reserve requirements. The federal funds rate is the most sensitive
indicator of the direction of interest rates, since it is set daily by the
market, unlike the prime rate and the discount rate, which are periodically
changed by banks and by the Federal Reserve Board, respectively.
INTEREST RATE RISK
The risk that after an investor purchases a bond, interest rates will rise and
the price of the bond will go down.
MATURITY DATE
The date on which the principal amount of a bond is due and payable to the
investor.
PAR
The dollar amount of a bond at the time it was issued and the amount that will
be repaid at maturity.
PREFERRED STOCK
Preferred stock pays dividends at a specified rate and has preference over
common stock in the payments of dividends and the liquidation of assets. Rates
paid on preferred stock are reset every seven days and are based on short-term,
tax-exempt interest rates. Preferred shareholders accept these short-term rates
in exchange for low credit risk (shares of preferred stock are rated AAA by
Moody's and S&P) and high liquidity (shares of preferred stock trade at par and
are remarketed every seven days). The proceeds from the sale of preferred stock
are invested at intermediate- and long-term tax-exempt rates. Because these
intermediate- and long-term rates are normally higher than the short-term rates
paid on preferred stock, common shareholders benefit by receiving higher
dividends and/or an increase to the dividend reserve. However, the risk of
having preferred stock is that if short-term rates rise higher than
intermediate- and long-term rates, creating an inverted yield curve, common
shareholders may receive a lower rate of return than if their fund did not have
any preferred stock outstanding. This type of economic environment is unusual
and historically has been short term in nature. Investors should also be aware
that the issuance of preferred stock results in the leveraging of common stock,
which increases the volatility of both the net asset value of the fund and the
market value of shares of common stock.
*** - This symbol represents a graduation cap, used throughout this report to
indicate terms defined in the glossary.
- --------------------------------------------------------------------------------
1997 Semiannual Report 35 American Municipal Term Trusts
<PAGE>
GLOSSARY OF TERMS (CONTINUED)
- --------------------------------------------------------------------------------
REFUNDING DATE
The specific date when a bond is redeemed before maturity.
REALIZED GAINS
Profits earned by a fund from the sale of a security at a market price that is
higher than its cost basis.
UNREALIZED GAINS
A bond is said to be trading at unrealized gains when its current market price
is higher than its cost basis.
- --------------------------------------------------------------------------------
1997 Semiannual Report 36 American Municipal Term Trusts
<PAGE>
DIRECTORS
- --------------------------------------------------------------------------------
DAVID T. BENNETT, Chairman, Highland Homes, Inc., USL Products, Inc., Kiefer
Built, Inc., of Counsel, Gray, Plant, Mooty, Mooty & Bennett, P.A.
JAYE F. DYER, President, Dyer Management Company
WILLIAM H. ELLIS, President, Piper Jaffray Companies Inc., Piper Capital
Management Incorporated
KAROL D. EMMERICH, President, The Paraclete Group
LUELLA G. GOLDBERG, Director, TCF Financial, ReliaStar Financial Corp., Hormel
Foods Corp.
DAVID A. HUGHEY, Retired Executive Vice President and Chief Administrative
Officer of Dean Witter InterCapital Inc. and Dean Witter Trust Co.
GEORGE LATIMER, Chief Executive Officer, National Equity Funds
OFFICERS
- --------------------------------------------------------------------------------
WILLIAM H. ELLIS, Chairman of the Board
PAUL A. DOW, President
ROBERT H. NELSON, Vice President and Treasurer
SUSAN SHARP MILEY, Secretary
INVESTMENT ADVISER
- --------------------------------------------------------------------------------
PIPER CAPITAL MANAGEMENT INCORPORATED
222 South Ninth Street, Minneapolis, MN 55402-3804
CUSTODIAN, ACCOUNTING AND TRANSFER AGENT
- --------------------------------------------------------------------------------
INVESTORS FIDUCIARY TRUST COMPANY
127 West 10th Street, Kansas City, MO 64105-1716
LEGAL COUNSEL
- --------------------------------------------------------------------------------
DORSEY & WHITNEY LLP
220 South Sixth Street, Minneapolis, MN 55402
FOR MORE INFORMATION
By Phone [GRAPHIC]
1 800 866-7778
FOR GENERAL INFORMATION
press 5, our Mutual Fund Services representatives are ready to answer your
questions.
TO ORDER LITERATURE
press 5, ask a service representative to mail you additional literature,
including a Quarterly Update. You can also request to be put on a mailing list
to receive this information automatically each quarter.
By Mail [GRAPHIC]
Piper Capital Management
Attn: Mutual Fund Services
222 South Ninth Street
Minneapolis, MN 55402-3804
In an effort to reduce costs to our shareholders, we have implemented a process
to reduce duplicate mailings of the funds' shareholder reports. This
householding process should allow us to mail one report to each address where
one or more registered shareholders with the same last name reside. If you would
like to have additional reports mailed to your address, please call our Mutual
Fund Services area at 1 800 866-7778, or mail a request to us.
On-Line [GRAPHIC]
http://www.piperjaffray.com/
money_management/
<PAGE>
[LOGO]
PIPER CAPITAL MANAGEMENT INCORPORATED ---------------
222 SOUTH NINTH STREET Bulk Rate
MINNEAPOLIS, MN 55402-3804 U.S. Postage
PAID
Permit No. 3008
[GRAPHIC] THIS DOCUMENT IS PRINTED ON PAPER MADE FROM Mpls., MN
100% TOTAL RECOVERED FIBER, INCLUDING 15% POST-CONSUMER WASTE. ---------------
#21200 8/1997 233-97
