PUTNAM
NEW YORK
INVESTMENT GRADE
MUNICIPAL TRUST
SEMIANNUAL REPORT
October 31, 1995
[LOGO]
BOSTON * LONDON * TOKYO
<PAGE>
FUND HIGHLIGHTS
"We're venturing that demand for long-term munis will pick up as fear
of the flat tax evaporates. . . . Also the flat tax won't be
considered seriously in Congress until 1997, both Republicans and
Democrats agree. And until then, you have a tax regime with the
highest rate at 39.6%, making the tax-equivalent yields on long-term
munis extremely attractive."
-- Louis Rukeyser's Wall Street, October 1995
"Few think a flat tax will pass Congress. . . . New York munis should
be an even better value than other states', too. Because of the high
state and local tax rates there, they may be less hurt even if a flat
tax passes."
-- Morningstar Municipal Bond -- New York Overview,
August 18, 1995
4 Report from Putnam Management
8 Fund performance summary
10 Portfolio holdings
13 Financial statements
<PAGE>
FROM THE CHAIRMAN
[PHOTO OF GEORGE PUTNAM]
(C) KARSH, OTTAWA
DEAR SHAREHOLDER:
THE PERIOD ENCOMPASSING THE FIRST HALF OF PUTNAM NEW YORK INVESTMENT
GRADE MUNICIPAL TRUST'S FISCAL YEAR FOLLOWED ONE OF THE MOST SEVERE
BOND MARKET DOWNTURNS ON RECORD AND ENDED IN THE MIDST OF ONE OF THE
MARKET'S STRONGEST RALLIES.
THE BENEFITS OF THE MARKET'S UPTURN DURING THE SIX MONTHS ENDED
OCTOBER 31, 1995, WERE DAMPENED SOMEWHAT FOR TAX-FREE BOND INVESTORS.
TALK OF A FLAT TAX IGNITED CONCERN THAT THE TAX ADVANTAGE LONG ENJOYED
BY MUNICIPAL SECURITIES WOULD BE LOST. AS IS SO OFTEN THE CASE,
HOWEVER, THE MARKET OVERREACTED, AND BY THE FISCAL YEAR'S MIDPOINT IT
HAD RECOGNIZED THE FACT.
FUND MANAGERS DAVID EURKUS AND MICHAEL BOUSCAREN BELIEVE THAT
PROSPECTS OF A FLAT TAX BEING ENACTED ANY TIME SOON ARE SLIM.
FURTHERMORE, THE FEDERAL RESERVE BOARD'S SUCCESS IN SLOWING THE PACE
OF THE ECONOMY HAS CONTRIBUTED TO A FAVORABLE ENVIRONMENT FOR BONDS.
LOW INFLATION AND RELATIVELY STABLE BOND YIELDS POINT TO A
CONTINUATION OF THESE POSITIVE CONDITIONS THROUGH THE SECOND HALF OF
YOUR FUND'S FISCAL YEAR.
RESPECTFULLY YOURS,
[SIGNATURE]
GEORGE PUTNAM
CHAIRMAN OF THE TRUSTEES
DECEMBER 20, 1995
<PAGE>
REPORT FROM THE FUND MANAGERS
DAVID J. EURKUS
MICHAEL BOUSCAREN
The bond market rally that marked the start of this calendar year
continued unabated over the six months ended October 31, 1995, the
first half of Putnam New York Investment Grade Municipal Trust's
fiscal year. Buoyed by declining interest rates, benign inflation, and
slow economic growth, the fixed-income markets generated returns that,
so far, have been among the best in modern times.
For municipal bonds, however, the results were muted by the effects of
flat-tax rhetoric in Washington. Although uneasy investors reacted to
the perceived effects of a flat tax and not to any hard facts, their
uncertainty depressed demand for tax-free bonds and dampened the
rally's strength during the summer.
Flat-tax fears notwithstanding, your fund produced attractive results
on a relative basis. During the semiannual period, the fund's 6.68%
current dividend rate at net asset value translated into a current
return of 11.97% for a fully taxable investment, assuming the maximum
combined federal and state tax rate of 44.19%. Most investors in lower
brackets would also enjoy tax advantages, though not necessarily to
the same extent.
EMPHASIS ON QUALITY HOLDINGS CONTINUES
A high-quality portfolio has always been your fund's priority, with
two thirds of fund assets invested in bonds rated AA or higher. The
fund is diversified across a wide spectrum of industries, with
investor-owned utilities and health care among the top sectors.
We are pleased to report that the fund has been able to maintain its
current dividend. However, in an environment of declining interest
rates, we are closely monitoring the portfolio's ability to continue
providing income at current levels while maintaining a relatively
stable net asset value. As in the past, we will make adjustments to
the dividend as events dictate.
<PAGE>
A BUYING OPPORTUNITY
The municipal-bond yield curve remained positively sloped over the
past six months. Fears of a flat tax helped to keep shorter-term bonds
relatively expensive. Meanwhile, the flow of new capital into
municipal-bond funds remained slow, contributing to a relative
cheapness on the longer end of the curve, where bond funds have
traditionally done much of their buying.
As bond prices fell, yields reached historically high levels -- as
much as 90% of equivalent Treasury bond yields. Taxable- equivalent
yields are now at double-digit levels and represent excellent values,
particularly for investors in high-tax states such as New York.
We think your fund represents a good buying opportunity because
municipal bonds, in our view, have become great bargains compared with
other bond classes. We believe the market has fully discounted flat-
tax expectations as they currently exist, and that municipal bonds
have the potential to outperform Treasuries over the next 12 months.
CREDIT QUALITY OVERVIEW*
[PIE CHART]
BBB/Baa AA/Aa A AAA/Aaa
36.4 21.5 7.1 35.0
Expressed as a percentage of the market value of the portfolio on
10/31/95. A bond rated BBB or higher is considered investment grade.
This chart refers only to long-term holdings. Holdings will vary over
time.
<PAGE>
COMPETITIVE EDGE
Managing a closed-end portfolio presents unique advantages. We do not
need to be concerned with shareholder redemptions and liquidity
reserves, so we can focus exclusively on molding the portfolio to take
advantage of prevailing market trends. For example, fluctuating
interest rates present opportunities to improve the structure and the
quality of the fund.
Our challenge is to be nimble enough to capture opportunities as they
arise because the windows often do not stay open long. However,
Putnam's size and formidable presence in the market give us what we
regard as a considerable competitive edge, often providing access to
new offerings unavailable to smaller participants.
POSITIVE OUTLOOK FOR THE FUTURE
We believe the economy will continue its course of benign inflation
and conservative growth over the next several months. Furthermore, we
believe investors are optimistic that the budget tangle in Washington
will be resolved favorably. The market may view the likelihood of a
balanced budget as bullish for bonds.
In New York City, the fiscal problems are far from over, but we
continue to view New York City bonds as relatively stable, especially
given Mayor Giuliani's vigorous efforts to close the city's budget
gap. With additional spending cuts in city agencies, municipal unions,
and other government agencies, New York City is expected to end the
1996 fiscal year with a balanced budget.
<PAGE>
TOP INDUSTRY SECTORS
[BAR CHART]
Transportation 13.9%
Utilities/Water and Sewerage 27.2%
Hospitals/Health care 21.2%
*Based on net assets on 10/31/95. Holdings may vary in the future.
Overall, we foresee an attractive climate for bonds in general and
believe all the ingredients are present for a potentially strong
performance in the municipal-bond market. In our view, your fund is
well positioned to benefit from the opportunities that should lie
ahead.
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 10/31/95, there is no guarantee
the fund will continue to hold these securities in the future.
<PAGE>
PERFORMANCE SUMMARY
PERFORMANCE SHOULD ALWAYS BE CONSIDERED IN LIGHT OF A FUND'S
INVESTMENT STRATEGY. PUTNAM NEW YORK INVESTMENT GRADE MUNICIPAL TRUST
IS DESIGNED FOR INVESTORS SEEKING AS HIGH A 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.
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 10/31/95
<TABLE><CAPTION>
<S> <C> <C>
NAV MARKET PRICE
- ----------------------------------------------------------------------
6 months 6.65% 3.43%
1 year 14.04 21.34
- ----------------------------------------------------------------------
Life-of-fund (since 11/27/92) 22.08 11.44
Annual average 7.05 3.77
- ----------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR
PERIODS ENDED 10/31/95
LEHMAN BROS. CONSUMER
MUNICIPAL BOND INDEX PRICE INDEX
- ----------------------------------------------------------------------
6 months 6.76% 1.19%
1 year 14.84 2.81
- ----------------------------------------------------------------------
Life-of-fund (since 11/27/92) 23.10 8.24
Annual average 7.35 2.74
- ----------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 9/30/95
(most recent calendar quarter)
NAV MARKET PRICE
- ----------------------------------------------------------------------
1 year 10.14% 18.76%
- ----------------------------------------------------------------------
Life-of-fund (since 11/27/92) 20.27 12.86
Annual average 6.71 4.35
- ----------------------------------------------------------------------
<FN>
Performance data represent past results, do not reflect future
performance, and do not take into account any adjustment for taxes
payable on reinvested distributions. Investment returns , net asset
value and market price will fluctuate so that an investor's shares,
when sold, may be worth more or less than their original cost.
</TABLE>
<PAGE>
PRICE AND DISTRIBUTION INFORMATION
<TABLE>
<S> <C> <C> <C>
(Six months ended 10/31/95)
DISTRIBUTIONS (COMMON SHARES)
- ----------------------------------------------------------------------
Number 6
- ----------------------------------------------------------------------
Income $0.465
- ----------------------------------------------------------------------
Total $0.465
- ----------------------------------------------------------------------
Preferred shares (200 shares) $1,041.50
- ----------------------------------------------------------------------
Share value (common shares) NAV MARKET PRICE
4/30/95 $13.50 $13.625
- ----------------------------------------------------------------------
10/31/95 13.92 13.625
- ----------------------------------------------------------------------
CURRENT RETURN (end of period)
- ----------------------------------------------------------------------
Current dividend rate1 6.68% 6.83%
- ----------------------------------------------------------------------
Taxable equivalent2 11.97 12.24
- ----------------------------------------------------------------------
Taxable equivalent3 12.58 12.86
- ----------------------------------------------------------------------
1Income portion of most recent distribution, annualized and divided by
NAV or market price at end of period. 2Assumes New York maximum
combined 44.19% federal and New York state tax rate. 3Assumes maximum
combined federal, state and city rate is 46.88%. Results for investors
subject to lower tax rates would not be as advantageous.
<PAGE>
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 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>
PORTFOLIO OF INVESTMENTS OWNED
October 31, 1995 (Unaudited)
KEY TO ABBREVATIONS
FGIC Financial Guaranty Insurance Co.
FHA Insd. Federal Housing Authority Insured
FSA Financial Security Assurance
GO Bonds General Obligations Bonds
IFB Inverse Floating Rate Bonds
MUNICIPAL BONDS AND NOTES (98.4%)*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (92.1%)
- ----------------------------------------------------------------------
$1,610,000 Albany, Parking Auth. Rev.
Bonds Ser. A, 6.85s, 11/1/12 Baa$1,708,613
3,000,000 Babylon, Indl. Dev. Agcy.
Resource Recvy. Rev. Bonds
(Ogden Martin Syst.), Ser. A, 8 1/2s, 1/1/19 Baa 3,401,250
945,000 Ithaca, Hsg. Corp. Mtge. Rev.
Bonds (Eddygate Park Apts. Project),
9s, 6/1/06 BBB/P 1,004,459
1,500,000 Metro. Trans. Auth. Transit Fac. Rev.
Bonds Ser. F, 8 3/8s, 7/1/16 AAA 1,573,725
NY City, G.O. Bonds
1,385,000 Ser. A, 8s, 8/15/19 A 1,642,956
1,700,000 Ser. B, 7s, 10/1/13 Baa 1,802,000
2,000,000 NY City, Muni. Wtr. Fin. Auth. Rev.
Bonds (Wtr. & Swr. Syst), Ser. A-94, FGIC, 7s,
6/15/15 AAA 2,267,500
1,300,000 NY State Dorm. Auth. IFB (Cornell U.),
10.178s, 7/1/30 (acquired 1/6/93,
cost $1,533,675)++ AA 1,618,500
1,800,000 NY State Dorm. Auth. Rev. Bonds
(State U. Edl. Facs.), Ser. A, 6 3/4s,
5/15/21 AAA 2,047,500
NY State Energy Research & Dev. Auth.
Poll. Control Rev. Bonds
1,600,000 (Niagara Mohawk Pwr. Corp.), Ser. I,
8 7/8s, 11/1/25 Baa 1,640,000
1,000,000 (Niagara Mohawk Pwr. Corp.) Ser. A, FGIC,
7.2s, 7/1/29 Aaa 1,135,000
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 1,818,000
1,800,000 NY State Local Govt. Asst. Corp. Rev.
Bonds Ser. B, 6 1/4s, 4/1/21 A1,833,750
<PAGE>
MUNICIPAL BONDS AND NOTES (98.4%)*
PRINCIPAL AMOUNT RATINGS** VALUE
NEW YORK (continued)
- ----------------------------------------------------------------------
NY State Med. Care Fac. Fin. Agy. Rev. Bonds
$1,600,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. A, FHA Insd., 8s, 2/15/27 AAA$1,732,000
1,800,000 (Hosp. & Nursing Home Insd. Mtge.)
Ser. C, FHA Insd., 6.65s, 8/15/32 Aa 1,890,000
1,800,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. D, FHA Insd., 6.6s, 2/15/31 AAA 1,887,750
1,800,000 (Hosp. & Nursing Home Insd. Mtge.),
Ser. C, FHA Insd., 6 3/8s, 8/15/29 AAA 1,865,250
1,310,000 (Mental Hlth. Svcs. Fac.), Ser. D, 7.4s,
2/15/18 Baa 1,454,100
1,600,000 (Secured Hosp.), Ser. A, 7.35s, 8/15/11 Baa 1,712,000
1,800,000 NY State Mtge. Agcy. Rev. Bonds
(Homeownership Dev. Program), Ser. BB-2,
7.95s, 10/1/15 Aa 1,885,500
2,000,000 NY State Pwr. Auth. IFB 4.201s, 1/1/14
(acquired 12/8/93, cost $1,860,000)++ AA 1,677,500
2,000,000 NY State Twy. Auth. Svc. Contract Rev.
Bonds (Local Highway & Bridge), 6 1/4s,
4/1/14 BBB 2,032,500
NY State Urban Dev. Corp. Rev. Bonds
1,450,000 (Correctional Fac.), 8s, 1/1/15 Aaa 1,488,628
2,075,000 (State Fac.), 7 1/2s, 4/1/20 Baa 2,303,250
700,000 (Ctr. Indl. Innovation Project), 7s, 1/1/13 BBB 717,024
1,400,000 Port Auth. NY & NJ Cons. Rev. IFB 9.069s,
8/1/26 (acquired 7/19/93, cost $1,687,700)++ AA 1,606,500
------------
45,745,255
PUERTO RICO (6.3%)
- ----------------------------------------------------------------------
1,500,000 Puerto Rico Elec. Pwr. Auth. Pwr.
IFB, FSA, 7.988s, 7/1/23 AAA 1,546,875
1,365,000 Puerto Rico, Pub. Bldg. Auth. Gtd.
Edl. & Hlth. Fac. Rev. Bonds Ser. L,
6 7/8s, 7/1/21 AAA 1,569,750
- ----------------------------------------------------------------------
3,116,625
- ----------------------------------------------------------------------
TOTAL INVESTMENTS (cost $47,609,846)*** $48,861,880
- ----------------------------------------------------------------------
<FN>
NOTES
* Percentages indicated are based on total net assets of
$49,649,174.
** The Moody's or Standard & Poor's ratings indicated are believed
to be the most recent ratings available at October 31, 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 October 31, 1995.
Securities rated by Putnam are indicated by "/P" and are not
publicly rated.
+ Restricted as to public resale. At the date of acquisition, these
secutities were valued at cost. There were no outstanding
unrestricted securities of the same class as those held. The
total market value of the restricted securities owned at October
31, 1995 was $4,902,500 or 9.9% of net assets.
*** The aggregate identified cost on a tax basis is $47,610,146,
resulting in gross unrealized appreciation and depreciation of
$1,904,227, and $652,493, respectively, or net unrealized
appreciation of $1,251,734.
The rates shown on IFBs which are securities paying variable
interest rates that vary inversely to changes in market interest
rates are the current interest rates at October 31, 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 October 31, 1995 (as a percentage of net assets):
Utilities 27.2%
Hospitals/Health Care 21.2
Transportation 13.9
The Fund had the following insurance concentration greater than
10% on October 31, 1995 (as a percentage of net assets):
FHA 14.8%
</TABLE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995 (Unaudited)
<TABLE>
<S> <C>
ASSETS
- ----------------------------------------------------------------------
Investments in securities, at value
(identified cost $47,609,846) (Note 1) $48,861,880
- ----------------------------------------------------------------------
Cash 264,074
- ----------------------------------------------------------------------
Interest and other receivables 907,785
- ----------------------------------------------------------------------
Unamortized organization expenses (Note 1) 4,780
- ----------------------------------------------------------------------
TOTAL ASSETS 50,038,519
- ----------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------
Distributions payable to shareholders 220,637
- ----------------------------------------------------------------------
Payable for compensation of Manager (Note 3) 86,229
- ----------------------------------------------------------------------
Payable for compensation of Trustees (Note 3) 55
- ----------------------------------------------------------------------
Payable for administrative services (Note 3) 451
- ----------------------------------------------------------------------
Other accrued expenses 81,973
- ----------------------------------------------------------------------
TOTAL LIABILITIES 389,345
- ----------------------------------------------------------------------
NET ASSETS $49,649,174
- ----------------------------------------------------------------------
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 4,681
- ----------------------------------------------------------------------
Accumulated net realized loss on investment transactions (1,116,223)
- ----------------------------------------------------------------------
Net unrealized appreciation of investments 1,252,034
- ----------------------------------------------------------------------
NET ASSETS 49,649,174
- ----------------------------------------------------------------------
Remarketed preferred shares at liquidation preference $10,000,000
- ----------------------------------------------------------------------
Cumulative undeclared dividends on remarketed preferred shares 4,931
- ----------------------------------------------------------------------
Net assets allocated to remarketed preferred shares at
liquidation preference 10,004,931
- ----------------------------------------------------------------------
Net assets available to common shares: Net asset value
per share $13.92 ($39,644,243 divided by 2,847,092 shares) 39,644,243
- ----------------------------------------------------------------------
NET ASSETS $49,649,174
- ----------------------------------------------------------------------
</TABLE>
<PAGE>
STATEMENT OF OPERATIONS
Six months ended October 31, 1995 (Unaudited)
<TABLE>
<S> <C>
Tax exempt interest income $1,660,310
- ----------------------------------------------------------------------
Expenses:
- ----------------------------------------------------------------------
Compensation of Manager (Note 3) 174,940
- ----------------------------------------------------------------------
Investor servicing and custodian fees (Note 3) 20,721
- ----------------------------------------------------------------------
Compensation of Trustees (Note 3) 3,576
- ----------------------------------------------------------------------
Reports to shareholders 19,870
- ----------------------------------------------------------------------
Auditing 18,147
- ----------------------------------------------------------------------
Legal 3,812
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Postage 5,818
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Administrative services (Note 3) 1,768
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Amortization of organization expenses (Note 1) 1,156
- ----------------------------------------------------------------------
Preferred share remarketing agent fees 12,362
- ----------------------------------------------------------------------
Total expenses 262,170
- ----------------------------------------------------------------------
Expense reduction (Note 3) (29,210)
- ----------------------------------------------------------------------
Net expenses 232,960
- ----------------------------------------------------------------------
Net investment income 1,427,350
- ----------------------------------------------------------------------
Net realized loss on investments (Notes 1 and 4) (815,467)
- ----------------------------------------------------------------------
Net unrealized appreciation of investments during the period 2,126,263
- ----------------------------------------------------------------------
Net gain on investments 1,310,796
- ----------------------------------------------------------------------
Net increase in net assets resulting from operations $2,738,146
- ----------------------------------------------------------------------
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE><CAPTION>
<S> <C> <C>
SIX MONTHS
ENDED YEAR ENDED
OCTOBER 31 APRIL 30
- ----------------------------------------------------------------------
1995* 1995
- ----------------------------------------------------------------------
INCREASE (decrease) in net assets
- ----------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------
Net investment income $1,427,350 $3,008,728
- ----------------------------------------------------------------------
Net realized loss on investments (815,467) (300,792)
- ----------------------------------------------------------------------
Net unrealized appreciation (depreciation) of
investments 2,126,263 (455,878)
- ----------------------------------------------------------------------
Net increase in net assets resulting from
operations 2,738,146 2,252,058
- ----------------------------------------------------------------------
Distributions to remarketed preferred
shareholders from:
- ----------------------------------------------------------------------
Net investment income (208,299) (354,950)
- ----------------------------------------------------------------------
Net realized gain on investments -- (31,431)
- ----------------------------------------------------------------------
Net increase in net assets resulting from
operations applicable to common shareholders
(excluding cumulative undeclared dividends on
remarketed preferred shares of $4,931 and
$20,465, respectively) 2,529,847 1,865,677
- ----------------------------------------------------------------------
Distributions to common shareholders from:
- ----------------------------------------------------------------------
Net investment income (1,323,780) (2,679,970)
- ----------------------------------------------------------------------
Net realized gains -- (222,304)
- ----------------------------------------------------------------------
Total increase (decrease) in net assets 1,206,067 (1,036,597)
- ----------------------------------------------------------------------
Net assets
- ----------------------------------------------------------------------
Beginning of period 48,443,107 49,479,704
- ----------------------------------------------------------------------
End of period (including undistributed
net investment income of $4,681 and $109,410,
respectively) 49,649,174 48,443,107
- ----------------------------------------------------------------------
Common shares outstanding at beginning
and end of period 2,847,092 2,847,092
- ----------------------------------------------------------------------
Remarketed preferred shares outstanding
at beginning and end of period 200 200
- ----------------------------------------------------------------------
<FN>
* Unaudited.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
<TABLE><CAPTION>
<S> <C> <C> <C> <C>
FOR THE PERIOD
NOVEMBER 27, 1992
SIX MONTHS (COMMENCEMENT
ENDED OF OPERATIONS TO)
OCTOBER 31 YEAR ENDED APRIL 30 APRIL 30
- ----------------------------------------------------------------------
1995( ) 1995 1994 1993
- ----------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD
(COMMON SHARES) $13.50 $13.86 $14.57 $13.99*
- ----------------------------------------------------------------------
INVESTMENT OPERATIONS:
Net investment income .50 1.06 1.05 .40(a)
Net realized and unrealized gain
(loss) on investments .46 (.26) (.53) .64
- ----------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS.96 .80 .52 1.04
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income:
to preferred shareholders (.07) (.13) (.13) (.03)**
to common shareholders (.47) (.94) (.93) (.31)
Net realized gain on investments
to preferred shareholders -- (.01) (.02) --
to common shareholders -- (.08) (.15) --
- ----------------------------------------------------------------------
TOTAL DISTRIBUTIONS (.54) (1.16) (1.23) (.34)
- ----------------------------------------------------------------------
Preferred share offering costs -- -- -- (.12)
- ----------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD
(common shares) $13.92 $13.50 $13.86 $14.57
- ----------------------------------------------------------------------
MARKET VALUE, END OF PERIOD
(common shares) $13.625 $13.625 $13.50 $15.00
- ----------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT
MARKET VALUE (common shares) (%)(c) 3.43(d) 9.09 (3.25) 2.09(d)
- ----------------------------------------------------------------------
NET ASSETS, END OF PERIOD (total fund)
- ----------------------------------------------------------------------
(in thousands) $49,649 $48,443 $49,480 $51,491
- ----------------------------------------------------------------------
Ratio of expenses to average
net assets (%)(b)(e) .67(d) 1.35 1.23 .35(a)(d)
- ----------------------------------------------------------------------
Ratio of net investment
income to average net assets (%)(b) 3.16(d) 6.87 6.23 2.60(a)(d)
- ----------------------------------------------------------------------
Portfolio turnover rate (%)24.40(d) 8.55 15.18 32.27(d)
- ----------------------------------------------------------------------
<FN>
( ) Unaudited.
* 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 dividend
payments to preferred shareholders.
(c) Total investment return assumes dividend reinvestment and does
not reflect the effect of sales charges.
(d) Not annualized.
(e) The ratio of expenses to average net assets for the six months
ended October 31, 1995 included amounts paid through expenses
offset arrangments. Prior period ratios exclude these amounts
(See Note 3).
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
October 31, 1995 (Unaudited)
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., ("Putnam Management') the fund's Manager, a wholly-owned
subsidiary of Putnam Investments, Inc., 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 or brokers, 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 Putnam Management 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,
less all liabilities (including undeclared dividends on remarketed
preferred shares) 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 on income, capital gains, or
unrealized appreciation on securities held and for excise tax on
income and capital gains.
At April 30, 1995 the fund had a capital loss carryover of
approximately $21,000 available to offset future net capital gains, if
any, which will expire April 30, 2003.
<PAGE>
E DISTRIBUTIONS TO SHAREHOLDERS Distributions to common and preferred
shareholders are recorded by the fund on the ex-dividend date.
Dividends on remarketed preferred shares become payable when, as and
if declared by the Trustees. Each dividend period for the remarketed
shares is generally a 28-day period. The applicable dividend rate for
the remarketed preferred shares on October 31, 1995 was 3.875%. The
amount and character of income and gains to be distributed are
determined in accordance with income regulations which may differ from
generally accepted accounting principles.
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 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, its registration with the Securities
and Exchange Commission and with various states and the initial public
offering of its shares were $11,494. These expenses are being
amortized on a straight-line basis over a five-year period.
<PAGE>
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 six months ended
October 31, 1995 the fund incurred no such additional dividends.
Under the Investment Company Act of 1940, the fund is required to
maintain asset coverage of at least 200% with respect to the
remarketed preferred shares as of the last business day of each month
in which any such shares are outstanding. Additionally, the fund is
required to meet more stringent asset coverage requirements under the
terms of the remarketed preferred shares and the shares' rating
agencies. Should these requirements not be met, or should dividends
accrued on the remarketed preferred shares not be paid, the fund may
be restricted in its ability to declare dividends to common
shareholders or may be required to redeem certain of the remarketed
preferred shares. At October 31, 1995 there were no such restrictions
on the fund.
NOTE 3
MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS
Compensation of Putnam Management 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 Putnam Management for that period
will be reduced by the amount of the excess (but not more than 0.70%
of the liquidation preference of the remarketed preferred outstanding
during the period).
The fund reimburses Putnam Management 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 Putnam Management and who serve on
committees of the Trustees receive additional fees for attendance at
certain committee meetings.
During the six months ended October 31, 1995, the fund adopted a
Trustee Fee Deferral Plan (the "Plan") which allows the Trustees to
defer the receipt of all or a portion of Trustees fees payable on or
after July 1, 1995. The deferred fees remain in the fund and are
invested in the fund or in other Putnam funds until distribution in
accordance with the Plan.
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.
For the six months ended October 31, 1995, fund expenses were reduced
by $29,210 under expense offset arrangements with PFTC. Investor
servicing and custodian fees reported in the Statement of operations
exclude these credits. The fund could have invested a portion of the
assets utilized in connection with the offset arrangments in an income-
producing asset if it had not entered into such arrangements.
NOTE 4
PURCHASES AND SALES OF SECURITIES During the six months ended October
31, 1995, purchases and sales of investment securities other than
short-term investments aggregated $13,594,070 and $11,194,700,
respectively. Purchases and sales of short-term municipal obligations
aggregated $3,700,000 and $6,100,000, respectively. In determining the
net gain or loss on securities sold, the cost of securities has been
determined on the identified cost basis.
<PAGE>
RESULTS OF OCTOBER 5, 1995 SHAREHOLDER MEETING
(Unaudited)
An annual meeting of shareholders of the fund was held on October 5,
1995. At the meeting, each of the nominees for Trustees was elected,
as follows:
VOTES FOR VOTES WITHHELD
- ----------------------------------------------------------------------
Jameson Adkins Baxter 2,639,131 30,018
- ----------------------------------------------------------------------
Hans H. Estin 2,639,871 29,278
- ----------------------------------------------------------------------
Elizabeth T. Kennan 2,638,154 30,995
- ----------------------------------------------------------------------
Lawrence J. Lasser 2,639,531 29,618
- ----------------------------------------------------------------------
Donald S. Perkins 2,639,621 29,528
- ----------------------------------------------------------------------
William F. Pounds 2,639,121 30,028
- ----------------------------------------------------------------------
George Putnam 2,639,427 29,722
- ----------------------------------------------------------------------
George Putnam, III 2,639,221 29,928
- ----------------------------------------------------------------------
E. Shapiro 2,637,985 31,164
- ----------------------------------------------------------------------
A.J.C. Smith 2,639,621 29,528
- ----------------------------------------------------------------------
W. Nicholas Thorndike 2,639,302 29,847
- ----------------------------------------------------------------------
A proposal to ratify the selection of Price Waterhouse LLP as auditors
for the fund was approved as follows: 2,626,238 votes for, and 9,837
votes against, with 33,076 abstentions and broker non-votes. All
tabulations have been rounded to the nearest whole number. SELECTED
<PAGE>
QUARTERLY DATA
(Unaudited)
<TABLE><CAPTION>
<C> <C> <C> <C> <C> <C> <C> <C> <C>
Net realized andNet increase (decrease)
unrealized gain (loss) in net assets
Investment income Net Investment income on investments from operations
Quarter Per Per Per Per
ended Total share Total share Total share Total share
- --------------------------------------------------------------------------------
- --------------
10-31-95 $815,354 $.28 $600,033 $.21 $913,832 $.32 $1,513,865 $.53
- --------------------------------------------------------------------------------
- --------------
7-31-95 $844,956 $.30 $634,552 $.22 $396,964 $.14 $1,031,516 $.36
- --------------------------------------------------------------------------------
- --------------
4-30-95 $874,620 $.31 $644,473 $.23 $702,296 $.23 $1,346,769 $.46
- --------------------------------------------------------------------------------
- --------------
1-31-95 $876,850 $.31 $687,134 $.24 $445,389 $.16 $1,132,523 $.40
- --------------------------------------------------------------------------------
- --------------
10-31-94 $882,892 $.31 $638,855 $.23 $(1,859,549) $(.64) $(1,220,694) $(.41)
- --------------------------------------------------------------------------------
- --------------
7-31-94 $891,663 $.31 $662,851 $.23 $(44,806) $(.02) $618,045 $.21
- --------------------------------------------------------------------------------
- --------------
4-30-94 $878,124 $.30 $622,094 $.22 $(3,221,304) $(1.15) $(2,643,551) $(.95)
- --------------------------------------------------------------------------------
- --------------
1-31-94 $882,072 $.31 $685,489 $.24 $(25,853) $(.01) $659,636 $.23
- --------------------------------------------------------------------------------
- --------------
10-31-93 $892,116 $.32 $661,473 $.23 $914,702 $.34 $1,576,175 $.57
- --------------------------------------------------------------------------------
- --------------
7-31-93 $861,870 $.30 $655,607 $.23 $836,132 $.29 $1,491,739 $.52
- --------------------------------------------------------------------------------
- --------------
<FN>
Per common share.
</TABLE>
<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
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
Michael Bouscaren
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
210703-185 12/95
<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.
