<PAGE>
Putnam
NEW YORK
INVESTMENT GRADE
MUNICIPAL
TRUST
ANNUAL REPORT
April 30, 1995
[LOGO]
BOSTON * LONDON * TOKYO
<PAGE>
PERFORMANCE HIGHLIGHTS
"Without a doubt, 1994 was one of the worst bond markets on record.
However, all signs now suggest that municipal bonds, like all fixed-
income investments, are back on track. Clearly, those investors who
sat tight and remained committed to their longer-term goals should be
well positioned to benefit from an improving tax-free market."
- --David Eurkus, fund manager
Performance should always be considered in light of a fund's
investment strategy. This fund is designed for investors seeking a
high current income exempt from federal and New York State and city
personal income tax as Putnam Investment Management believes is
consistent with preservation of capital.
FISCAL 1995 RESULTS AT A GLANCE
<TABLE><CAPTION>
<S> <C> <C> <C> <C> <C>
MARKET
TOTAL RETURN: NAV PRICE
- ----------------------------------------------------------------------
- --
12 months ended 4/30/95
(change in value during
period plus reinvested
distributions) 5.28% 9.09%
- ----------------------------------------------------------------------
- --
MARKET
SHARE VALUE: NAV PRICE
- ----------------------------------------------------------------------
- --
4/30/94 $13.86 $13.500
4/30/95 13.50 13.625
- ----------------------------------------------------------------------
- --
CAPITAL GAINS(1)
LONG- SHORT-
DISTRIBUTIONS: NO. INCOME TERM TERM TOTAL
- ----------------------------------------------------------------------
- --
Common shares 12 $0.941 $0.047 $0.0312 $1.0192
Preferred shares 12 1,774.75 157.15 -- 1,931.90
- ----------------------------------------------------------------------
- --
MARKET
Current return NAV price
- ----------------------------------------------------------------------
- --
End of period
Current dividend rate(2) 6.89% 6.83%
Taxable equivalent(3) 12.35 12.24
Taxable equivalent(4) 12.97 12.86
- ----------------------------------------------------------------------
- --
<FN>
Performance data represent past results. For performance over longer
periods, see page 9. (1)Capital gains are taxable for federal and, in
most cases, state tax purposes. For some investors, investment income
may also be subject to the federal alternative minimum tax. Investment
income may be subject to state and local taxes. (2)Income portion of
most recent distribution, annualized and divided by NAV or market
price at end of period. (3)Assumes New York maximum combined 44.19%
federal and New York state tax rate.(4) Assumes maximum combined
federal, state, and city rate is 46.88%. Results for investors subject
to lower tax rates would not be as advantageous.
</TABLE>
<PAGE>
FROM THE CHAIRMAN
[PHOTO OF GEORGE PUTNAM]
(C) KARSH, OTTAWA
DEAR SHAREHOLDER:
MANY OF THE GATHERING SIGNS OF HOPE THAT SUSTAINED MUNICIPAL BOND
INVESTORS DURING THE DARKEST DAYS OF THE 1993-94 MARKET DECLINE BEGAN
MANIFESTING THEMSELVES IN REALITY OVER THE EARLY MONTHS OF 1995. AS
PUTNAM NEW YORK INVESTMENT GRADE MUNICIPAL TRUST ENDED ITS FISCAL YEAR
ON APRIL 30, 1995, THE MARKET MOOD WAS APPRECIABLY MORE UPBEAT THAN IT
HAD BEEN WHEN THE FISCAL YEAR BEGAN.
THE ECONOMY CONTINUED TO MARCH AT A BRISK STRIDE, THOUGH THE PACE
SINCE JANUARY HAS SLOWED CONSIDERABLY FROM THE LEVELS THAT PREVAILED
DURING THE REST OF THE FISCAL YEAR. INVESTORS TOOK THIS MODERATION AS
A SIGN THAT THE ECONOMY WAS RESPONDING FAVORABLY TO THE FEDERAL
RESERVE BOARD'S STRATEGY OF RAISING SHORT-TERM RATES TO REIN IN GROWTH
AND THEREBY HOLD INFLATION IN CHECK. THE CONSENSUS IN THE MARKETS
SEEMS TO BE THAT THE FED'S SERIES OF INTEREST-RATE INCREASES MAY BE
NEAR AN END.
THE SHARP DECLINE IN NEW ISSUES THAT MARKET WATCHERS FORESAW AS A SPUR
TO HIGHER PRICES ADDED FUEL TO THE RECENT RALLY. SO DID THE CONTINUED
ATTRACTIVENESS OF TAX-FREE YIELDS RELATIVE TO TAXABLE TREASURIES. IN
THE FOLLOWING REPORT, FUND MANAGER DAVID EURKUS DISCUSSES THE FUND'S
PERFORMANCE IN FISCAL 1995 AND PROSPECTS FOR FISCAL 1996.
RESPECTFULLY YOURS,
[SIGNATURE]
George Putnam
Chairman of the Trustees
June 21, 1995
<PAGE>
REPORT FROM THE FUND MANAGER
DAVID J. EURKUS
Stabilizing interest rates, low inflation, and positive supply/demand
dynamics contributed to a strong turnaround in the tax-free bond
market during the last four months of Putnam New York Investment Grade
Municipal Trust's fiscal year. Despite the strong ending, events such
as the Orange County, California, bankruptcy and the Federal Reserve
Board's series of interest-rate increases still had an impact on the
fund's performance for the 12 months ended April 30, 1995; total
return was 5.28% at net asset value.
The fund's yield continues to be attractive relative to that of other
funds in the New York tax-free universe. Furthermore, taxable-
equivalent yields are now at double-digit levels and represent
excellent values -- particularly for investors in such high-tax states
as New York. Your fund's 6.89% current dividend rate at net asset
value at fiscal year's end translates into a current dividend rate of
12.35% for a fully taxable investment, assuming the maximum combined
44.19% federal and state tax rate. Most investors in lower brackets
would also enjoy tax advantages, though not necessarily to the same
extent.
TAX-LOSS SELLING AND ANXIETY OVER ORANGE COUNTY DEPRESS PRICES
As the end of a tax year approaches, individual and institutional
investors typically employ several strategies to reduce the impact of
taxes. So, beginning in October and November 1994, many investors sold
municipal bonds to establish capital losses with which to offset
taxable profits in other sectors. This tax- loss selling helped
extinguish a fledgling rally in early October and led to further
pressures on municipal bond prices.
Orange County's financial woes shook the market in early December,
just as municipal bonds were starting to enjoy another rally. The
immediate plunge in value of county-related bonds was only the
beginning. The fallout from the $2 billion in losses sustained by the
county's investment fund ultimately extended across the entire
municipal-bond market and once again extinguished a rally in the tax-
free market.
<PAGE>
Early in calendar 1995, the rally finally began in earnest. The
municipal bond market's increasingly positive outlook was supported by
a growing belief that, after nudging short-term interest rates higher
for almost a year, the Federal Reserve Board was unlikely to push them
much further. In addition, the long-anticipated supply/demand
imbalance had become quite pronounced. Following the 44% drop in
municipal bonds issuance to $162 billion in 1994, analysts had
predicted at least an additional drop this year to $120 billion.*
According to the April 17, 1995, edition of The Wall Street Journal,
long-term issuance in New York was down more than 50% from the same
period last year.
POSITIONING FOR AN IMPROVING MUNICIPAL MARKET
With all signs suggesting that the municipal bond market was oversold
and poised to recover in the last quarter of 1994, we took several
steps to ensure that the fund would be an active participant in a
rally. The re-evaluation -- and possible repositioning -- of current
holdings in light of our market forecasts is part of our daily
management of the fund. If the right circumstances present themselves,
we may swap bonds; that is, sell one holding while simultaneously
buying another issue in order to take advantage of differences in such
factors as coupon rates, maturity, and marketability.
* Despite a favorable supply and demand situation, municipal bonds
can be affected by many factors, including changes in interest
rates.
[BAR CHART]
A DECLINE IN SUPPLY
- ----------------------------------------------------------------------
- --
[PLOT POINTS]
Date
1/94 977
2/94 961
3/94 1,056
4/94 782
5/94 986
6/94 1,008
7/94 751
8/94 865
9/94 774
10/94 867
11/94 870
12/94 868
1/95 584
2/95 573
3/95 687
4/95 690
Chart shows monthly volume of new municipal bond issues. Source:
Securities Data Co. Used by permission.
<PAGE>
The wave of tax-loss selling we saw in late 1994 prompted us to begin
repositioning the portfolio. We noted a pool of bonds whose low prices
did not reflect what we perceived as their fair investment value. So,
in October and November, we sold selected lower-coupon investment-
grade bonds and redeployed the proceeds into higher-yielding bonds of
similar quality. We believe the addition of these higher-coupon bonds
may help the fund maintain a more competitive yield, and that they may
also appreciate in value over time.
At the end of the period, the fund had an average maturity of 25.31
years and average duration of 6.05 years. The fund's assets remain
invested across a wide spectrum of industries. With minor
modifications, medical facilities, utilities, and transportation were
the fund's top industry sectors throughout the period.
POLITICAL ATMOSPHERE INCREASINGLY PROMISING
The New York state legislature missed its April 1, 1995, deadline for
passing a budget for fiscal 1996. However, the legislature has taken
the extraordinary step of committing to meeting debt-service payments
on state bonds through the end of the new fiscal year, regardless of
the status of the budget.
In addition, we believe the Pataki administration's theme of fiscal
prudence offers the potential for more cost-efficient municipal
services. This could have a positive effect on state-appropriated
debt, that is, the bonds used to finance public programs. Your fund
holds a large amount of these bonds, particularly those issued to
finance hospitals and dormitories in the state university system.
The legislature is also considering a constitutional amendment that
would cap state borrowing and significantly curtail New York's bond
issuance. With a significant number of bonds being refunded or called
during the year, an expected decrease in new issues of high-coupon
bonds could push the prices of existing New York debt higher.
POSITIVE ECONOMIC AND MARKET FUNDAMENTALS SEEN FOR 1995
Among the myriad tax-reform proposals before Congress, one that has
generated a great deal of attention in the media is
<PAGE>
[BAR CHART]
CREDIT QUALITY PROFILE*
- ----------------------------------------------------------------------
- --
[PLOT POINTS]
AAA 29.0%
AA 28.5%
A 10.6%
BBB/Baa 25.1%
VMIG1 5.0%
*Based on net assets of 4/30/95, percentages will vary over time.
the flat tax. Although its passage is far from certain, its perceived
effects on the tax status of municipal bonds has already contributed
to a short-term downturn in the market. Much like the fallout from the
Orange County scare, the flat-tax debate is providing ample buying
opportunities as the proverbial dust settles.
Despite the souring effect of the flat-tax discussion, we continue to
see potential in the municipal market. By most accounts, the most
dramatic rise in interest rates is behind us. With interest rates
stabilizing, the fund will remain fully invested to best capitalize on
market rallies. Furthermore, low inflation and moderate economic
growth foster a generally benign environment for bonds. Finally,
moderately strong demand chasing a diminishing supply of tax-free
securities can create a natural price support. This June and July,
there are a large number of issues scheduled to mature or become
callable, which should further bolster prices.
As of this writing, New York City is facing a $3.1 billion projected
revenue shortfall in its fiscal 1996 budget. Mayor Giuliani has
proposed about $500 million in additional spending cuts from existing
programs and services to help cover part of the shortfall. With the
legislators in Albany struggling to balance the state budget, it
remains unclear at this time if they will come through with additional
funds -- as requested by the mayor -- to close the city's budget gap.
<PAGE>
All this uncertainty has contributed to discussions of a modest
downgrade of the city's general obligation debt. By most accounts,
municipal bond investors have already factored in the likelihood of
such an event. Should it occur, we believe the fund's well-diversified
portfolio has played, and we believe should continue to play, a
significant role in limiting price fluctuation.
Without a doubt, 1994 was one of the worst bond markets on record.
However, all signs now suggest that municipal bonds, like all fixed-
income investments, are back on track. Those investors who remained
committed to their longer-term goals should be well positioned to
benefit from the potential of an improving tax-free market.
The views expressed here are exclusively those of Putnam Management.
They are not meant as investment advice. Although the described
holdings were viewed favorably as of 4/30/95, there is no guarantee
the fund will continue to hold these securities in the future.
<PAGE>
PERFORMANCE SUMMARY
This section provides, at a glance, information about your fund's
performance. Total return shows how the value of the fund's shares
changed over time, assuming you held the shares through the entire
period and reinvested all distributions back into the fund. We show
total return in two ways: on a cumulative long-term basis and on
average how the fund might have grown each year over varying periods.
TOTAL RETURN FOR PERIODS ENDED 4/30/95
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
LEHMAN BROS.
MARKET MUNICIPAL
NAV PRICE BOND INDEX CPI
- ----------------------------------------------------------------------
- --
1 year 5.28% 9.09% 6.65% 3.05%
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- --
Life of fund
(since 11/27/92) 14.47 7.75 15.31 6.97
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- --
Annual average 5.72 3.12 6.04 2.81
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- --
</TABLE>
TOTAL RETURN FOR PERIODS ENDED 3/31/95
(most current calendar quarter)
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
LEHMAN BROS.
MARKET MUNICIPAL
NAV PRICE BOND INDEX CPI
- ----------------------------------------------------------------------
- --
1 year 5.07% 1.34% 7.43% 2.85%
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- --
Life of fund
(since 11/27/92) 14.16 3.21 15.17 6.62
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- --
Annual average 5.82 1.36 6.22 2.78
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<FN>
Performance data represent past results and should not be taken as
indicative of future performance. Investment returns, net asset value,
and market value will fluctuate so an investor's shares, when sold,
may be worth more or less than their original cost. Fund performance
data do not take into account any adjustment for taxes payable on
reinvested distributions.
</TABLE>
TERMS AND DEFINITIONS
NET ASSET VALUE (NAV) is the value of all your fund's assets, minus
any liabilities, the liquidation preference and cumulative undeclared
dividends paid on the remarketed preferred shares, divided by the
number of outstanding common shares.
MARKET PRICE is the current trading price of one share of the fund.
Market prices are set by transactions between buyers and sellers on
the New York Stock Exchange.
COMPARATIVE BENCHMARKS
LEHMAN BROTHERS MUNICIPAL BOND INDEX is an unmanaged list of long-term
fixed-rate investment-grade tax-exempt bonds representative of the
municipal bond market. The index does not take into account brokerage
commissions or other costs, may include bonds different from those in
the fund, and may pose different risks than the fund.
CONSUMER PRICE INDEX (CPI) is a commonly used measure of inflation; it
does not represent an investment return.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
For the year ended April 30, 1995
To the Trustees and Shareholders of
Putnam New York Investment Grade Municipal Trust
In our opinion, the accompanying statement of assets and
liabilities, including the portfolio of investments owned (except for
bond ratings), and the related statements of operations and of changes
in net assets and the financial highlights present fairly, in all
material respects, the financial position of Putnam New York
Investment Grade Municipal Trust (the "fund") at April 30, 1995, and
the results of its operations, the changes in its net assets and the
financial highlights for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements
and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the fund's management, our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation
of investments owned at April 30, 1995 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 12, 1995
<PAGE>
PORTFOLIO OF INVESTMENTS OWNED
April 30, 1995
KEY TO ABBREVIATIONS
G.O. BONDS--General Obligation Bonds
IFB:--Inverse Floating Rate Bonds
VRDN:--Variable Rate Demand Notes
FGIC:--Financial Guaranty Insurance Co.
FHA:--Federal Housing Authority
MBIA:--Municipal Bond Investor's Assurance Corp.
<TABLE><CAPTION>
<C> <S> <C> <C>
MUNICIPAL BONDS AND NOTES (98.2%)*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (95.0%)
- ----------------------------------------------------------------------
--
$1,610,000 Albany, Parking Auth. Rev.
Bonds, Ser. A, 6.85s, 11/1/12 Baa $1,658,300
3,000,000 Babylon, Indl. Dev. Agcy. Resource
Recvy. Rev. Bonds (Ogden Martin Syst.),
Ser. A, 8 1/2s, 1/1/19 Baa 3,262,500
960,000 Ithaca, Hsg. Corp. Mtge. Rev. Bonds
(Eddygate Park Apts. Project),
9s, 6/1/06 BBB/P 973,200
1,500,000 Metro. Trans. Auth. Transit Fac. Rev.
Bonds, Ser. F, 8 3/8s, 7/1/16 AAA 1,595,625
500,000 NY City, Cultural Res. VRDN
(American Museum of Natural History),
Ser. B, MBIA, 4.3s, 4/1/21 VMIG1 500,000
NY City, G.O. Bonds
1,385,000 Ser. A, 8s, 8/15/19 A 1,611,794
1,700,000 Ser. B, 7s, 10/1/13 A 1,727,625
400,000 NY City, G.O. VRDN, Sub. Ser. B4,
5 1/4s, 8/15/23 VMIG1 400,000
500,000 NY City, Muni. Wtr. & Fin. Auth.
Wtr. & Swr. Syst. VRDN, Ser. G,
FGIC, 4.8s, 6/15/24 VMIG1 500,000
1,000,000 NY City, VRDN, Sub. Ser. B-4,
2.35s, 8/15/21 VMIG1 1,000,000
1,300,000 NY State Dorm. Auth. IFB (Cornell U.),
10.114s, 7/1/30 (acquired 1/6/93,
cost $1,533,675)++ AA 1,499,875
NY State Dorm. Auth. Rev. Bonds
1,500,000 (City U.), Ser. T, 10 1/4s, 7/1/12 Baa 1,543,125
1,800,000 (State U. Edl. Facs.),
Ser. A, 6 3/4s, 5/15/21 AAA 2,004,750
3,500,000 NY State Energy Research & Dev.
Auth. Elec. Fac. Rev. Bonds
(Cons. Edison Co. of NY, Inc.
Project), 9s, 8/15/20 Aa 3,609,375
1,600,000 NY State Energy Research & Dev.
Auth. Poll. Control Rev. Bonds
(Niagara Mohawk Pwr. Corp.),
Ser. I, 8 7/8s, 11/1/25 Baa 1,662,000
1,600,000 NY State Environmental Fac. Corp.
Poll. Control Rev. Bonds
(State Wtr. Revolving Fund),
Ser A, 7 1/2s, 6/15/12 Aa 1,750,000
1,800,000 NY State Local Govt. Asst. Corp.
Rev. Bonds, Ser. B, 6 1/4s, 4/1/21 A 1,795,500
<PAGE>
MUNICIPAL BONDS AND NOTES
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (continued)
- ----------------------------------------------------------------------
- --
NY State Med. Care Fac. Fin. Agcy. Rev. Bonds
$2,000,000 (Nursing Home Insd. Mtge.),
Ser. B, FHA Insd., 10 1/2s, 1/15/24 AAA $2,022,500
1,600,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. A, FHA Insd., 8s, 2/15/27 AAA 1,742,000
1,310,000 (Mental Hlth. Svcs. Fac.),
Ser. D, 7.4s, 2/15/18 Baa 1,401,700
1,600,000 Ser. A, 7.35s, 8/15/11 Baa 1,662,000
1,800,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. C, 6.65s, 8/15/32 Aa 1,833,750
1,800,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. D, FHA Insd., 6.6s, 2/15/31 AAA 1,838,250
1,800,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. C, FHA Insd., 6 3/8s, 8/15/29 AAA 1,809,000
2,000,000 NY State Pwr. Auth. IFB, 4.201s,
1/1/14 (acquired 12/8/93,
cost $1,860,000)++ AA 1,525,000
1,450,000 NY State Urban Dev. Corp. Rev. Bonds
(Correctional Fac.), 8s, 1/1/15 Aaa 1,511,625
1,400,000 Port Auth. NY & NJ Cons. IFB,
8.576s, 8/1/26 (acquired 7/19/93,
cost $1,687,700)++ AA 1,512,000
2,000,000 Port Auth. of NY & NJ Cons. Bonds
53rd Ser., 8.7s, 7/15/20 AA 2,075,000
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- --
46,026,494
- ----------------------------------------------------------------------
- --
PUERTO RICO (3.2%)
- ----------------------------------------------------------------------
- --
$1,365,000 Puerto Rico, Pub. Bldg. Auth. Gtd.
Edl. & Hlth. Fac. Rev. Bonds,
Ser. L, 6 7/8s, 7/1/21 AAA 1,535,625
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TOTAL INVESTMENTS (cost $48,436,348)*** $47,562,119
- ----------------------------------------------------------------------
- --
<FN>
* Percentages indicated are based on total net assets of
$48,443,107. Net assets available to common shareholders are
$38,422,642 which corresponds to a net asset value per common
share of $13.50.
** The Moody's or Standard & Poor's ratings indicated are believed
to be the most recent ratings available at April 30, 1995 for the
securities listed. Ratings are generally ascribed to securities
at the time of issuance. While the agencies may from time to time
revise such ratings, they undertake no obligation to do so, and
the ratings do not necessarily represent what the agencies would
ascribe to these securities at April 30, 1995. Securities rated
by Putnam are indicated by "/P" and are not publicly rated. These
ratings are not covered by the Report of Independent Accountants.
*** The aggregate identified cost for federal income tax purposes is
$48,436,648, resulting in gross unrealized appreciation and
depreciation of $648,338 and $1,522,867, respectively, or net
unrealized depreciation of $874,529.
++ Restricted as to public resale. At the date of acquisition, these
securities were valued at cost. There were no outstanding
unrestricted securities of the same class as those held. Total
market value of the restricted securities owned at April 30, 1995
was $4,536,875 or 9.4% of net assets.
The rates shown on IFBS which are securities paying variable
interest rates that vary inversely to changes in market interest
rates and VRDNS are the current interest rates at April 30, 1995,
which are subject to change based on the terms of the security.
The Fund had the following industry group concentrations greater
than 10% on April 30, 1995 (as a percentage of net assets):
Hospitals/Health Care 25.4%
Utilities 25.4%
Transportation 14.1
Education 10.4
The Fund had the following insurance concentration greater than
10% on April 30, 1995 (as a percentage of net assets):
FHA 15.3%
</TABLE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1995
<TABLE><CAPTION>
<S> <C>
ASSETS
- ----------------------------------------------------------------------
- --
Investments in securities, at value
(identified cost $48,436,348) (Note 1) $47,562,119
- ----------------------------------------------------------------------
- --
Cash 289,889
- ----------------------------------------------------------------------
- --
Interest receivable 988,152
- ----------------------------------------------------------------------
- --
Unamortized organization expenses (Note 1) 5,936
- ----------------------------------------------------------------------
- --
Total assets 48,846,096
- ----------------------------------------------------------------------
- --
LIABILITIES
- ----------------------------------------------------------------------
- --
Distributions payable to shareholders 220,639
- ----------------------------------------------------------------------
- --
Payable for compensation of Manager (Note 3) 81,793
- ----------------------------------------------------------------------
- --
Payable for investor servicing and custodian fees (Note 3) 8,740
- ----------------------------------------------------------------------
- --
Payable for compensation of Trustees (Note 3) 286
- ----------------------------------------------------------------------
- --
Payable for administrative services (Note 3) 1,466
- ----------------------------------------------------------------------
- --
Other accrued expenses 90,065
- ----------------------------------------------------------------------
- --
Total liabilities 402,989
- ----------------------------------------------------------------------
- --
Net assets $48,443,107
- ----------------------------------------------------------------------
- --
REPRESENTED BY
- ----------------------------------------------------------------------
- --
Remarketed preferred shares, without par value;
200 shares authorized (200 shares issued at
$50,000 per share liquidation preference) (Note 2) $10,000,000
- ----------------------------------------------------------------------
- --
Common shares, without par value; unlimited shares
authorized; 2,847,092 shares outstanding 39,508,682
- ----------------------------------------------------------------------
- --
Undistributed net investment income 109,410
- ----------------------------------------------------------------------
- --
Accumulated net realized loss on investment transactions (300,756)
- ----------------------------------------------------------------------
- --
Net unrealized depreciation of investments (874,229)
- ----------------------------------------------------------------------
- --
NET ASSETS $48,443,107
- ----------------------------------------------------------------------
- --
Remarketed preferred shares at liquidation preference $10,000,000
- ----------------------------------------------------------------------
- --
Cumulative undeclared dividends on
remarketed preferred shares 20,465
- ----------------------------------------------------------------------
- --
Net assets allocated to remarketed preferred
shares at liquidation preference 10,020,465
- ----------------------------------------------------------------------
- --
Net assets available to common shares: Net asset
value per share $13.50 ($38,422,642 divided
by 2,847,092 shares) 38,422,642
- ----------------------------------------------------------------------
- --
NET ASSETS $48,443,107
- ----------------------------------------------------------------------
- --
</TABLE>
<PAGE>
STATEMENT OF OPERATIONS
For the year ended April 30, 1995
<TABLE><CAPTION>
<S> <C>
TAX EXEMPT INTEREST INCOME $3,526,025
- ----------------------------------------------------------------------
- --
EXPENSES:
- ----------------------------------------------------------------------
- --
Compensation of Manager (Note 3) 338,080
- ----------------------------------------------------------------------
- --
Investor servicing and custodian fees (Note 3) 43,542
- ----------------------------------------------------------------------
- --
Compensation of Trustees (Note 3) 8,678
- ----------------------------------------------------------------------
- --
Reports to shareholders 18,581
- ----------------------------------------------------------------------
- --
Auditing 43,073
- ----------------------------------------------------------------------
- --
Legal 2,541
- ----------------------------------------------------------------------
- --
Postage 7,232
- ----------------------------------------------------------------------
- --
Administrative services (Note 3) 5,864
- ----------------------------------------------------------------------
- --
Amortization of organization expenses (Note 1) 2,292
- ----------------------------------------------------------------------
- --
Registration fees 605
- ----------------------------------------------------------------------
- --
Exchange listing fees 7,500
- ----------------------------------------------------------------------
- --
Preferred share remarketing agent fees 37,550
- ----------------------------------------------------------------------
- --
Other 1,759
- ----------------------------------------------------------------------
- --
TOTAL EXPENSES 517,297
- ----------------------------------------------------------------------
- --
NET INVESTMENT INCOME 3,008,728
- ----------------------------------------------------------------------
- --
Net realized loss on investments (Notes 1 and 3) (300,792)
- ----------------------------------------------------------------------
- --
Net unrealized depreciation of investments during the period (455,878)
- ----------------------------------------------------------------------
- --
NET LOSS ON INVESTMENTS (756,670)
- ----------------------------------------------------------------------
- --
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $2,252,058
- ----------------------------------------------------------------------
- --
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE><CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
APRIL 30 APRIL 30
- ----------------------------------------------------------------------
- --
1995 1994
- ----------------------------------------------------------------------
- --
DECREASE IN NET ASSETS
- ----------------------------------------------------------------------
- --
Operations:
- ----------------------------------------------------------------------
- --
Net investment income $3,008,728 $2,996,101
- ----------------------------------------------------------------------
- --
Net realized gain (loss) on investments (300,792) 507,759
- ----------------------------------------------------------------------
- --
Net unrealized depreciation of investments (455,878) (2,004,082)
- ----------------------------------------------------------------------
- --
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 2,252,058 1,499,778
- ----------------------------------------------------------------------
- --
Distributions to remarketed preferred shareholders from:
- ----------------------------------------------------------------------
- --
Net investment income (354,950) (371,438)
- ----------------------------------------------------------------------
- --
Net realized gain on investments (31,431) (44,341)
- ----------------------------------------------------------------------
- --
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS APPLICABLE TO COMMON SHAREHOLDERS
(EXCLUDING CUMULATIVE UNDECLARED DIVIDENDS
ON REMARKETED PREFERRED SHARES OF $20,465
AND $14,179, RESPECTIVELY) 1,865,677 1,083,999
- ----------------------------------------------------------------------
- --
Distributions to common shareholders from
- ----------------------------------------------------------------------
- --
Net investment income (2,679,970) (2,647,978)
- ----------------------------------------------------------------------
- --
Net realized gains (222,304) (438,443)
- ----------------------------------------------------------------------
- --
Underwriting commissions and offering
costs on remarketed preferred shares -- (8,855)
- ----------------------------------------------------------------------
- --
TOTAL DECREASE IN NET ASSETS (1,036,597) (2,011,277)
- ----------------------------------------------------------------------
- --
NET ASSETS
- ----------------------------------------------------------------------
- --
Beginning of year 49,479,704 51,490,981
- ----------------------------------------------------------------------
- --
END OF YEAR (including undistributed net
investment income of $109,410 and $135,602,
respectively) $48,443,107 $49,479,704
- ----------------------------------------------------------------------
- --
COMMON SHARES OUTSTANDING AT BEGINNING
AND END OF YEAR 2,847,092 2,847,092
- ----------------------------------------------------------------------
- --
REMARKETED PREFERRED SHARES OUTSTANDING AT
BEGINNING AND END OF YEAR 200 200
- ----------------------------------------------------------------------
- --
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
<TABLE><CAPTION>
<S> <C> <C> <C>
FOR THE PERIOD
NOVEMBER 27, 1992
(COMMENCEMENT OF
OPERATIONS) TO
YEAR ENDED APRIL 30 APRIL 30
- ----------------------------------------------------------------------
- --
1995 1994 1993
- ----------------------------------------------------------------------
- --
NET ASSET VALUE, BEGINNING OF
PERIOD (common shares) $13.86 $14.57 $13.99*
- ----------------------------------------------------------------------
- --
Investment operations:
- ----------------------------------------------------------------------
- --
Net investment income 1.06 1.05 .40(a)
Net realized and unrealized (loss)
gain on investments (.26) (.53) .64
- ----------------------------------------------------------------------
- --
Total from investment operations .80 .52 1.04
- ----------------------------------------------------------------------
- --
LESS DISTRIBUTIONS FROM:
- ----------------------------------------------------------------------
- --
Net investment income:
- ----------------------------------------------------------------------
- --
to preferred shareholders (.13) (.13) (.03)**
- ----------------------------------------------------------------------
- --
to common shareholders (.94) (.93) (.31)
- ----------------------------------------------------------------------
- --
Net realized gain on investments
- ----------------------------------------------------------------------
- --
to preferred shareholders (.01) (.02) --
- ----------------------------------------------------------------------
- --
to common shareholders (.08) (.15) --
- ----------------------------------------------------------------------
- --
TOTAL DISTRIBUTIONS (1.16) (1.23) (.34)
- ----------------------------------------------------------------------
- --
Preferred share offering costs -- -- (.12)
- ----------------------------------------------------------------------
- --
NET ASSET VALUE, END OF PERIOD
(common shares) $13.50 $13.86 $14.57
- ----------------------------------------------------------------------
- --
MARKET VALUE, END OF PERIOD
(common shares) $13.625 $13.50 $15.00
- ----------------------------------------------------------------------
- --
TOTAL INVESTMENT RETURN AT MARKET
VALUE (common shares) (%)(c) 9.09 (3.25) 2.09(d)
- ----------------------------------------------------------------------
- --
NET ASSETS, END OF PERIOD
(total fund) (in thousands) $48,443 $49,480 $51,491
- ----------------------------------------------------------------------
- --
Ratio of expenses to average
net assets (%) (b) 1.35 1.23 .35(a)(d)
- ----------------------------------------------------------------------
- --
Ratio of net investment income
to average net assets (%) (b) 6.87 6.23 2.60(a)(d)
- ----------------------------------------------------------------------
- --
Portfolio turnover rate (%) 8.55 15.18 32.27(d)
- ----------------------------------------------------------------------
- --
<FN>
* Represents initial net asset value of $14.10 less offering
expenses of approximately $0.11.
** Preferred shares were issued on February 18, 1993
(a) Reflects a waiver of the management fee for the period November
27, 1992 to February 19, 1993. As a result of such waiver,
expenses of the fund for the period ended April 30, 1993 reflect
a reduction of approximately $0.02 per share.
(b) Ratios reflect net assets available to common shares only; net
investment income ratio also reflects reduction for distributions
to preferred shareholders.
(c) Total investment return assumes dividend reinvestment and does
not reflect the effect of sales charges.
(d) Not annualized.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
April 30, 1995
NOTE 1
SIGNIFICANT ACCOUNTING POLICIES
The fund is registered under the Investment Company Act of 1940, as
amended, as a non-diversified, closed- end management investment
company. The fund's investment objective is to seek a high current
income exempt from federal income tax and New York State and City
personal income tax. The fund intends to achieve its objective by
investing in investment grade municipal securities constituting a
portfolio that Putnam Investment Management, Inc., a wholly-owned
subsidiary of Putnam Investment, Inc., the fund's Manager, believes to
be consistent with preservation of capital.
The following is a summary of significant accounting policies
consistently followed by the fund in the preparation of its financial
statements. The policies are in conformity with generally accepted
accounting principles.
A SECURITY VALUATION Tax-exempt bonds and notes are stated on the
basis of valuations provided by a pricing service, approved by the
Trustees, which uses information with respect to transactions in
bonds, quotations from bond dealers, market transactions in comparable
securities and various relationships between securities in determining
value. The fair value of restricted securities is determined by the
Manager following procedures approved by the Trustees, and such
valuations and procedures are reviewed periodically by the Trustees.
B SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME Security
transactions are accounted for on the trade date (date the order to
buy or sell is executed). Interest income is recorded on the accrual
basis.
C DETERMINATION OF NET ASSET VALUE Net asset value of the common
shares is determined by dividing the value of all assets of the fund
(including accrued interest), less all liabilities (including accrued
expenses) and the liquidation value of any outstanding remarketed
preferred shares, by the total number of common shares outstanding.
D FEDERAL TAXES It is the policy of the fund to distribute all of
its income within the prescribed time and otherwise comply with the
provisions of the Internal Revenue Code applicable to regulated
investment companies. It is also the intention of the fund to
distribute an amount sufficient to avoid imposition of any excise tax
under Section 4982 of the Internal Revenue Code of 1986. Therefore, no
provision has been made for federal taxes or income or capital gains
or unrealized appreciation of securities held and excise tax on income
and capital gains.
At April 30, 1995, the fund had a capital loss carryover which will
expire April 30, 2003, of approximately $21,000 which may be available
to offset realized capital gains.
E DISTRIBUTIONS TO SHAREHOLDERS Distributions to common and
preferred shareholders are recorded
<PAGE>
by the fund on the ex-dividend date. Dividends on remarketed preferred
shares become payable when, as and if declared by the Trustees. Each
dividend period for the remarketed preferred shares was generally a 30-
day period until January 20, 1995 with a fixed dividend rate of 3.95%
per annum. Each subsequent dividend period will generally be a 28-day
period and the applicable dividend rate will be determined by the
remarketing agent. The applicable dividend rates for the remarketed
preferred shares on April 30, 1995 was 4.15 % per annum.
The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ
from generally accepted accounting principles. These differences
include post October losses and wash sales. Reclassifications, if any,
are made to the fund's capital accounts at the close of the fund's
fiscal year to reflect income and gains available for distribution (or
available capital loss carryovers) under income tax regulations.
F AMORTIZATION OF BOND PREMIUM AND DISCOUNT Any premium resulting
from the purchase of securities in excess of maturity value is
amortized on a yield-to-maturity basis. Discount on zero-coupon bonds,
stepped-coupon bonds and original issue discount bonds is accreted
according to the effective yield method.
G UNAMORTIZED ORGANIZATION EXPENSES Expenses incurred by the fund in
connection with its organization aggregated $11,494. These expenses
are being amortized on a straight-line basis over a five-year period.
NOTE 2
REMARKETED PREFERRED SHARES
The Series A remarketed preferred shares are redeemable at the option
of the fund on any remarketing date at a redemption price of $50,000
per share, plus an amount equal to any dividends accumulated on a
daily basis but unpaid through the redemption date (whether or not
such dividends have been declared) and, in certain circumstances, a
call premium.
It is anticipated that dividends paid to holders of remarketed
preferred shares will be considered tax-exempt dividends under the
Internal Revenue Code of 1986, as amended. To the extent that the fund
earns taxable income and capital gains by the conclusion of a fiscal
year, it will be required to apportion to the holders of the
remarketed preferred shares throughout that year additional dividends
as necessary to result in an after-tax yield equivalent to the
applicable dividend rate for the period. During the year ended April
30, 1995 the fund incurred additional dividends of $14,735.
Under the Investment Company Act of 1940, the fund is required to
maintain asset coverage of at least 200% with respect to the
remarketed preferred shares as of the last business day of each month
in which any such shares are outstanding. Additionally, the fund is
required to meet more stringent asset coverage requirements under the
terms of the remarketed preferred shares and the shares' rating
agencies. Should these requirements not be met, or should dividends
accrued on the remarketed preferred shares not be paid, the fund may
be restricted in its ability to declare dividends to common
<PAGE>
shareholders or may be required to redeem certain of the remarketed
preferred shares. At April 30, 1995 there were no such restrictions on
the fund.
NOTE 3
MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS
Compensation of the fund's Manager for management and investment
advisory services is paid quarterly based on the average net assets of
the fund, including net assets attributable to remarketed preferred
shares. Such fee in the aggregate is based on the annual rate of 0.70%
of the first $500 million of the average net asset value of the fund,
0.60% of the next $500 million, 0.55% of the next $500 million, and
0.50% of any excess over $1.5 billion of such average net asset value.
If dividends payable on remarketed preferred shares during any
dividend payment period plus any expenses attributable to remarketed
preferred shares for the period exceed the fund's net income
attributable to the proceeds of the remarketed preferred shares during
that period, then the fee payable to the fund's Manager for that
period will be reduced by the amount of the excess (but not more than
.70% of the liquidation preference of the remarketed preferred
outstanding during the period).
The fund also reimburses the Manager for the compensation and related
expenses of certain officers of the fund and their staff who provide
administrative services to the fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees.
Trustees of the fund receive an annual Trustee's fee of $510 and an
additional fee for each Trustees' meeting attended. Trustees who are
not interested persons of the Manager and who serve on committees of
the Trustees receive additional fees for attendance at certain
committee meetings.
Custodial functions for the fund's assets are provided by Putnam
Fiduciary Trust Company (PFTC), a wholly-owned subsidiary of Putnam
Investments, Inc. Investor servicing agent functions are provided by
Putnam Investor Services, a division of PFTC.
Investor servicing and custodian fees reported in the Statement of
operations for the year ended April 30, 1995 have been reduced by
credits allowed by PFTC.
NOTE 4 PURCHASES AND SALES OF SECURITIES
During the year ended April 30, 1995, purchases and sales of
investment securities other than short-term investments aggregated
$3,962,949 and $5,523,162 respectively. Purchases and sales of short-
term municipal obligations aggregated $2,300,000 and $1,000,000,
respectively. In determining the net gain or loss on securities sold,
the cost of securities has been determined on the identified cost
basis.
<PAGE>
SELECTED QUARTERLY DATA
(Unaudited)
<TABLE><CAPTION>
<S> <C> <C> <C>
THREE MONTHS ENDED
----------------------------------------
APRIL 30 JANUARY 31 OCTOBER 31
1995 1995 1994
- ----------------------------------------------------------------------
- --
Total investment income
Total $874,620 $876,850 $882,892
Per share+ $.31 $.31 $.31
- ----------------------------------------------------------------------
- --
Net investment income available
to common shareholders
Total $644,473 $687,134 $638,855
Per share+ $.23 $.24 $.23
- ----------------------------------------------------------------------
- --
Net realized and unrealized gain
(loss) on investments
Total $702,296 $445,389 $(1,859,549)
Per share+ $.23 $.16 $(.64)
- ----------------------------------------------------------------------
- --
Net increase (decrease) in net
assets available to common
shareholders resulting from
operations
Total $1,346,769 $1,132,523 $(1,220,694)
Per share+ $.46 $.40 $(.41)
- ----------------------------------------------------------------------
- --
Net assets available to
common shareholders at
end of period
Total $38,422,642 $37,738,335 $37,538,492
Per share+ $13.50 $13.26 $13.19
</TABLE>
<PAGE>
SELECTED QUARTERLY DATA (continued)
<TABLE><CAPTION>
<C> <C> <C> <C> <C>
Three months ended
- ----------------------------------------------------------------------
- --
July 31 April 30 January 31 October 31 July 31
1994 1994 1994 1993 1993
- ----------------------------------------------------------------------
- --
$891,663 $878,124 $882,072 $892,116 $861,870
$.31 $.30 $.31 $.32 $.30
- ----------------------------------------------------------------------
- --
$662,851 $622,094 $685,489 $661,473 $655,607
$.23 $.22 $.24 $.23 $.23
- ----------------------------------------------------------------------
- --
$(44,806) $(3,221,304) $(25,853) $914,702 $836,132
$(.02) $(1.15) $(.01) $.34 $.29
- ----------------------------------------------------------------------
- --
$618,045 $(2,643,551) $659,636 $1,576,175 $1,491,739
$.21 $(.95) $.23 $.57 $.52
- ----------------------------------------------------------------------
- --
$39,421,581 $39,465,525 $42,785,170 $43,214,505 $42,320,607
$13.85 $13.86 $15.03 $15.18 $14.86
- ----------------------------------------------------------------------
- --
<FN>
+ Per common share.
</TABLE>
<PAGE>
FEDERAL INCOME TAX INFORMATION
(Unaudited)
The fund has designated all dividends paid from net investment income
during the fiscal year as exempt-interest dividends. Thus, 100% of
these distributions are exempt from federal income tax. For residents
of the state of New York, 100% of the fund's distributions are also
exempt from New York personal income tax.
During the fiscal year the fund distributed $0.03 per common share
from short-term capital gains and $0.06 per share from long-term
capital gains.
The Form 1099 you will receive in January 1996 will show the tax
status of all distributions paid to your account in calendar 1995.
<PAGE>
FUND INFORMATION
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
Eli Shapiro
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Gary N. Coburn
Vice President
James E. Erickson
Vice President
Blake E. Anderson
Vice President
David J. Eurkus
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
John D. Hughes
Vice President and Treasurer
Beverly Marcus
Clerk and Assistant Treasurer
Call 1-800-225-1581 weekdays from 9 a.m. to 5 p.m. Eastern Time for up-
to-date information about the fund's NAV or to request Putnam's
quarterly Closed-End Fund Commentary.
<PAGE>
PUTNAM INVESTMENTS
THE PUTNAM FUNDS
One Post Office Square
Boston, Massachusetts 02109
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
185-18298
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED
AND EDGAR-FILED TEXTS.
(1) Rule lines for tables are omitted.
(2) Italic typefaces is displayed in normal type.
(3) Boldface type is displayed in capital letters.
(4) Headers (e.g. the names of the fund) and footers (e.g. page
numbers and OThe accompanying notes are an integral part of these
financial statementsO) are omitted.
(5) Because the printed page breaks are not reflected, certain
tabular and columnar headings and symbols are displayed
differently in this filing.
(6) Bullet points and similar graphic symbols are omitted.
(7) Page numbering is different.
