<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
Two World Trade Center, New York, New York 10048
LETTER TO THE SHAREHOLDERS April 30, 1996
DEAR SHAREHOLDER:
During the first six months of InterCapital New York Quality Municipal
Securities's current fiscal year, interest rates initially declined, but
reversed direction in February and began to move higher. Last year's
favorable bond market environment was created by proposals to achieve a
balanced federal budget within five to seven years and by continued easing of
Federal Reserve Board monetary policy. However, budget negotiations reached a
political impasse early in 1996 and federal offices were partially closed.
This had an adverse impact on bonds. Concerns also developed about an
increase in the pace of the economic recovery, which was marked by
unexpectedly strong job growth in March and rising commodity prices. The bond
market reacted to these developments by pushing yields sharply higher.
MUNICIPAL MARKET CONDITIONS
Long-term municipal revenue bond yields as tracked by The Bond Buyer Revenue
Bond Index * moved from 6.02 percent in October 1995 to a low of 5.63 percent
in January 1996. Interest rates subsequently began to rise in mid-February on
signs of stronger economic growth and renewed inflationary fears. The Index
yield reached 6.16 percent in April. Yields on one-year municipal notes
declined from 3.82 percent to 3.70 percent over the past six months. The
yield pickup for extending maturities from one-to-thirty years was 246 basis
points at the end of April.
The risk of flat-tax legislation had caused the ratio of Revenue Bond Index
yields to 30-year U.S. Treasury bond yields to rise from 85 to 94 percent
between March and September 1995. However, as the prospects of a flat tax
faded, the ratio improved to 92 percent by the end of April. A declining
ratio means that municipal bond prices have outperformed U.S. Treasury
prices. Over the previous eight-year period prior to the flat-tax debate,
long-term municipal yields averaged 89 percent of U.S. Treasury yields.
- ----------------------
* The Bond Buyer Revenue Bond Index is an arithmetic average of the yields
of 25 selected municipal revenue bonds with 30-year maturities. Credit
ratings of these bonds range from Aa1 to Baa1 by Moody's Investors Service,
Inc., and AA+ to A- by Standard & Poor's Corp.
<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
LETTER TO THE SHAREHOLDERS April 30, 1996, continued
Municipal underwriting activity was fueled by the trend of lower interest
rates in 1995. Between November 1995 and April 1996, new issue volume
increased 45 percent versus the same period a year ago. Despite a resurgence
in underwriting, dealers have continued to withdraw from the municipal
business.
PERFORMANCE
The Trust's net asset value (NAV) declined from $12.86 to $12.47 per share
during the six-month period ended April 30, 1996. Based on this NAV change
plus reinvestment of tax-free dividends totaling $0.36 per share, the Trust's
total return was 0.05 percent. Over the same period, the Trust's market price
on the New York Stock Exchange declined from $11.25 to $10.875 per share.
Based on this market price change and reinvestment of tax-free dividends, the
Trust's total return was -0.26 percent. The Trust began the period trading at
a 12.5 percent discount to NAV and closed at a 13 percent discount.
Undistributed net investment income totaled $0.045 per share
on April 30, 1996 versus $0.053 per share six months ago.
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
(The chart below represents information which appears as a
graphic printed report for the Five Largest Sectors as of April 30, 1996.)
MUNICIPAL SECTORS PERCENT
- ----------------- -------
Other 41%
Hospital 16%
Education 14%
Transportation 11%
General Obligations 10%
Public facilities 8%
A pie chart reflecting the credit quality of the portfolio as
rated by Moody's or Standard & Poors Credit Ratings of total long term
investments as of April 30, 1996.
CREDIT RATING PERCENT
- ------------- -------
Baa or BBB 41%
A or A 25%
Aa or AA 18%
Aaa or AAA 16%
PORTFOLIO STRUCTURE
On April 30, 1996, the Trust had over $91 million in net assets diversified
among 13 long-term municipal sectors and 28 credits. The five largest
specific sectors represented 59 percent of net assets. The portfolio has
consistently maintained its investment grade quality with 59 percent of its
long-term holdings rated "A" or better. The average maturity and call
protection of the Trust's long-term portfolio were 22 and 8 years,
respectively.
THE IMPACT OF LEVERAGING
As discussed in previous reports, the total income available for distribution
to common shareholders includes incremental income provided by the Trust's
outstanding Auction Rate Preferred Shares (ARPS). ARPS dividends reflect
prevailing short-term interest rates on maturities normally ranging from one
week to one year. Incremental
<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
LETTER TO THE SHAREHOLDERS April 30, 1996, continued
income to common shares depends on two factors: first, the spread between
interest earned on the long-term bonds in the established portfolio of
investments and the ARPS auction rate plus ARPS expenses; second, the amount
of ARPS outstanding. The greater the amount of ARPS outstanding, the greater
the amount of incremental income available for distribution to common
shareholders.
ARPS yields ranged between 2.75 and 5.00 percent during the six-months ended
April 30, 1996. Over the same period, ARPS leverage contributed $0.03 per
share to common share earnings. As of April 30, 1996, $24 million in ARPS
were outstanding, which represented 26 percent of net assets.
LOOKING AHEAD
Tax-reduction proposals may receive additional publicity. However, the
balance between the supply of new issues and demand created by maturities and
calls for redemption should remain positive for the municipal market.
Long-term municipal securities currently yield 90 percent of the yield on
U.S. Treasury securities and may be expected to move in tandem with the
Treasury market.
The Trust's procedure for reinvestment of all dividends and distributions on
common shares is through purchases in the open market. This method helps to
support the market value of the Trust's shares. In addition, we would like to
remind you that the Trustees have approved a procedure whereby the Trust,
when appropriate, may purchase shares in the open market or in privately
negotiated transactions at a price not above market value or net asset value,
whichever is lower at the time of purchase. During the six-month period ended
April 30, 1996, the Trust purchased and retired 90,900 shares of common stock
at a weighted average market discount of 11.98 percent. The Trust may also
utilize procedures to reduce or eliminate the amount of outstanding ARPS,
including their purchase in the open market or in privately negotiated
transactions.
We appreciate your ongoing support of InterCapital New York Quality Municipal
Securities and look forward to continuing to serve your investment needs.
Very truly yours,
/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
Chairman of the Board
<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1996 (unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ----------- ---------------------------------------------------------------- -------- ---------- ------------
<S> <C> <C> <C> <C>
NEW YORK EXEMPT MUNICIPAL BONDS (97.7%)
General Obligation (9.6%)
New York City,
$ 3,000 1994 Ser C .................................................... 5.50 % 10/01/08 $ 2,792,760
4,000 1994 Ser D .................................................... 5.75 08/15/09 3,772,560
2,500 Puerto Rico, Pub Impr Refg Ser 1993 ............................ 5.25 07/01/18 2,218,400
- ----------- ------------
9,500 8,783,720
- ----------- ------------
Educational Facilities Revenue (13.8%)
2,500 New York State, City University - John Jay College Ser 1995 A
COPs .......................................................... 6.00 08/15/06 2,532,275
New York State Dormitory Authority,
4,000 City University Ser 1993 F .................................... 5.50 07/01/12 3,700,880
2,000 New York University Ser A (MBIA) .............................. 5.00 07/01/11 1,845,560
5,000 State University Ser 1993 C ................................... 5.375 05/15/13 4,511,150
- ----------- ------------
13,500 12,589,865
- ----------- ------------
Electric Revenue (3.0%)
3,000 New York State Power Authority, General Purpose Ser CC ......... 5.25 01/01/18 2,732,280
- ----------- ------------
Hospital Revenue (16.2%)
2,000 New York State Dormitory Authority, Rochester Hospital - FHA
Insured Mtge Ser 1993 ........................................ 5.70 08/01/33 1,849,660
New York State Medical Care Facilities Finance Agency,
3,845 Hospital & Nursing Home - FHA Insured Mtge 1993 Ser B ......... 5.50 02/15/22 3,556,087
4,000 Hospital & Nursing Home - FHA Insured Mtge 1993 Ser A ......... 5.90 08/15/33 3,809,200
4,000 Presbyterian Hospital - FHA Insured Mtge Ser A ................ 5.25 08/15/14 3,665,040
2,000 St Lukes-Roosevelt Hospital - FHA Insured Mtge Ser 1993 A ..... 5.625 08/15/18 1,877,920
- ----------- ------------
15,845 14,757,907
- ----------- ------------
Industrial Development/Pollution Control Revenue (7.0%)
New York State Energy Research & Development Authority,
3,000 Consolidated Edison Co of New York Inc Refg Ser 1993-B ........ 5.25 08/15/20 2,711,430
3,000 New York State Electric & Gas Co Ser A (AMT) .................. 5.95 12/01/27 2,753,070
1,000 New York State Electric & Gas Co Ser A (AMT) (MBIA) ........... 5.70 12/01/28 943,620
- ----------- ------------
7,000 6,408,120
- ----------- ------------
Mortgage Revenue - Multi-Family (3.2%)
3,000 New York City Housing Development Corporation, FHA Insured Mtge
Ser 1993 B ................................................... 5.85 05/01/26 2,877,420
- ----------- ------------
Mortgage Revenue - Single Family (4.0%)
4,000 New York State Mortgage Agency, Homeowner Ser 29 A ............. 5.25 04/01/15 3,675,880
- ----------- ------------
Nursing & Health Related Facilities Revenue (7.0%)
2,990 New York State Dormitory Authority, Department of Health Ser
1993 .......................................................... 5.70 07/01/09 2,911,512
New York State Medical Care Facilities Finance Agency,
2,000 Mental Health 1993 Ser F ...................................... 5.375 02/15/14 1,797,620
2,000 Mental Health 1993 Ser D ...................................... 5.25 08/15/23 1,709,380
- ----------- ------------
6,990 6,418,512
- ----------- ------------
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS April 30, 1996 (unaudited) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ----------- ---------------------------------------------------------------- -------- ---------- ------------
Public Facilities Revenue (8.0%)
$ 4,000 New York State Dormitory Authority, Court Facilities Ser 1993 A 5.625% 05/15/13 $ 3,708,400
4,000 New York State Urban Development Corporation, Correctional Refg
1993 Ser ...................................................... 5.50 01/01/15 3,626,800
- ----------- ------------
8,000 7,335,200
- ----------- ------------
Tax Allocation (2.4%)
2,500 Grand Central Station District Managers Association Inc, Cap Impr
- -----------
Refg Ser 1994 ................................................. 5.25 01/01/22 2,173,575
------------
Transportation Facilities Revenue (11.1%)
1,000 Buffalo & Fort Erie Public Bridge Authority, Toll Bridge Ser
1995 (MBIA) ................................................... 5.75 01/01/25 972,550
3,000 New York State Thruway Authority, Local Hwy & Bridge Ser 1993 .. 5.125 04/01/08 2,807,700
3,000 Triborough Bridge & Tunnel Authority, Ser 1993 B ............... 5.00 01/01/20 2,640,330
Puerto Rico Highway & Transportation Authority,
2,000 Refg Ser W .................................................... 5.50 07/01/17 1,840,420
2,000 Refg Ser X .................................................... 5.50 07/01/19 1,831,160
- ----------- ------------
11,000 10,092,160
- ----------- ------------
Water & Sewer Revenue (4.1%)
New York City Municipal Water Finance Authority,
2,000 1993 Ser A .................................................... 5.50 06/15/11 1,932,160
2,000 1994 Ser B .................................................... 5.50 06/15/19 1,840,540
- ----------- ------------
4,000 3,772,700
- ----------- ------------
Other Revenue (8.3%)
4,000 New York Local Government Assistance Corporation, Ser 1993 B
Refg .......................................................... 5.50 04/01/21 3,699,160
4,000 United Nations Development Corporation, Sr Lien 1992 Refg Ser A 6.00 07/01/26 3,880,400
- ----------- ------------
8,000 7,579,560
- ----------- ------------
96,335 TOTAL NEW YORK EXEMPT MUNICIPAL BONDS (Identified Cost $94,975,851) ................ 89,196,899
- ----------- ------------
NEW YORK EXEMPT SHORT-TERM MUNICIPAL OBLIGATION (0.7%)
600 Port Authority of New York & New Jersey, Special Obligation Ser 2
- -----------
(Demand 05/01/96) (Identified Cost $600,000) .................. 3.85* 05/01/19 600,000
------------
$96,935 TOTAL INVESTMENTS (Identified Cost $95,575,851) (a) ..................... 98.4% 89,796,899
===========
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES .......................... 1.6 1,487,539
------------
NET ASSETS .............................................................. 100.0% $91,284,438
============
</TABLE>
- ------------
AMT Alternative Minimum Tax.
COPs Certificates of Participation.
* Current coupon of variable rate security.
(a) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation was
$25,814 and the aggregate gross unrealized depreciation was
$5,804,766, resulting in net unrealized depreciation of
$5,778,952.
Bond Insurance:
- ---------------
MBIA Municipal Bond Investors Assurance Corporation.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $95,575,851) ........................................ $89,796,899
Cash .................................................................. 36,518
Interest receivable ................................................... 1,502,595
Deferred organizational expenses ...................................... 16,885
Prepaid expenses and other assets ..................................... 20,970
--------------
TOTAL ASSETS ....................................................... 91,373,867
--------------
LIABILITIES:
Investment management fee payable ..................................... 28,305
Accrued expenses and other payables ................................... 61,124
--------------
TOTAL LIABILITIES ................................................... 89,429
--------------
NET ASSETS:
Preferred shares of beneficial interest (1,000,000 shares authorized
of non-participating $.01 par value, 480 shares outstanding) ........ 24,000,000
--------------
Common shares of beneficial interest (unlimited shares authorized of
$.01 par value, 5,397,413 shares outstanding) ........................ 75,926,063
Net unrealized depreciation ........................................... (5,778,952)
Accumulated undistributed net investment income ....................... 242,080
Accumulated net realized loss ......................................... (3,104,753)
--------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS ........................ 67,284,438
--------------
TOTAL NET ASSETS .................................................... $91,284,438
==============
NET ASSET VALUE PER COMMON SHARE
($67,284,438 divided by 5,397,413 common shares outstanding) ......... $12.47
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1996 (unaudited)
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ........................ $ 2,675,671
--------------
EXPENSES
Investment management fee .............. 166,445
Professional fees ...................... 75,680
Auction commission fees ................ 29,954
Transfer agent fees and expenses ...... 14,090
Trustees' fees and expenses ............ 10,491
Registration fees ...................... 8,310
Auction agent fees ..................... 8,140
Servicing fees ......................... 4,485
Organizational expenses ................ 3,489
Shareholder reports and notices ........ 2,497
Custodian fees ......................... 1,868
Other .................................. 5,740
--------------
TOTAL EXPENSES BEFORE EXPENSE OFFSET 331,189
LESS: EXPENSE OFFSET ................. (1,826)
--------------
TOTAL EXPENSES AFTER EXPENSE OFFSET .. 329,363
--------------
NET INVESTMENT INCOME ................ 2,346,308
--------------
NET REALIZED AND UNREALIZED LOSS:
Net realized loss ...................... (42,153)
Net change in unrealized depreciation . (2,166,111)
--------------
NET LOSS ............................. (2,208,264)
--------------
NET INCREASE ........................... $ 138,044
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED OCTOBER
APRIL 30, 1996 31, 1995
- -------------------------------------------------- -------------- ----------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ............................. $ 2,346,308 $ 4,816,126
Net realized loss ................................. (42,153) (854,320)
Net change in unrealized depreciation ............. (2,166,111) 11,608,715
--------------- ----------------
NET INCREASE .................................... 138,044 15,570,521
--------------- ----------------
DIVIDENDS FROM NET INVESTMENT INCOME:
Preferred ......................................... (433,208) (902,563)
Common ............................................ (1,959,798) (4,034,876)
--------------- ----------------
TOTAL ........................................... (2,393,006) (4,937,439)
--------------- ----------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST:
Preferred ......................................... -- (7,150,000)
Common ............................................ (1,051,690) (1,563,275)
--------------- ----------------
TOTAL ........................................... (1,051,690) (8,713,275)
--------------- ----------------
TOTAL INCREASE (DECREASE) ....................... (3,306,652) 1,919,807
NET ASSETS:
Beginning of period ............................... 94,591,090 92,671,283
--------------- ----------------
END OF PERIOD
(Including undistributed net investment income
of $242,080 and $288,778, respectively) ......... $91,284,438 $94,591,090
=============== ================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (unaudited)
1. ORGANIZATION AND ACCOUNTING POLICIES
InterCapital New York Quality Municipal Securities (the "Trust") is
registered under the Investment Company Act of 1940, as amended, as a
non-diversified, closed-end management investment company. The Trust was
organized as a Massachusetts business trust on March 3, 1993 and commenced
operations on September 29, 1993.
The following is a summary of significant accounting policies:
A. VALUATION OF INVESTMENTS -- Portfolio securities are valued by an outside
independent pricing service approved by the Trustees. The pricing service has
informed the Trust that in valuing the portfolio securities, it uses both a
computerized matrix of tax-exempt securities and evaluations by its staff, in
each case based on information concerning market transactions and quotations
from dealers which reflect the bid side of the market each day. The portfolio
securities are thus valued by reference to a combination of transactions and
quotations for the same or other securities believed to be comparable in
quality, coupon, maturity, type of issue, call provisions, trading
characteristics and other features deemed to be relevant. Short-term debt
securities having a maturity date of more than sixty days at time of purchase
are valued on a mark-to-market basis until sixty days prior to maturity and
thereafter at amortized cost based on their value on the 61st day. Short-term
debt securities having a maturity date of sixty days or less at the time of
purchase are valued at amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. The Trust amortizes premiums and accretes discounts over the life of
the respective securities. Interest income is accrued daily.
C. FEDERAL INCOME TAX STATUS -- It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable and nontaxable income to its
shareholders. Accordingly, no federal income tax provision is required.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Trust records dividends
and distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax-basis
treatment;
<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (unaudited) continued
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital
gains for financial reporting purposes but not for tax purposes are reported
as dividends in excess of net investment income or distributions in excess of
net realized capital gains. To the extent they exceed net investment income
and net realized capital gains for tax purposes, they are reported as
distributions of paid-in-capital.
E. ORGANIZATIONAL EXPENSES -- Dean Witter InterCapital Inc. (the "Investment
Manager") paid the organizational expenses of the Trust's common shares in
the amount of $35,000 which have been reimbursed for the full amount thereof.
Such expenses have been deferred and are being amortized by the straight-line
method over a period not to exceed five years from the commencement of
operations.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement, the Trust pays a management
fee, calculated weekly and payable monthly, by applying the annual rate of
0.35% to the Trust's weekly net assets.
Under the terms of the Agreement, in addition to managing the Trust's
investments, the Investment Manager maintains certain of the Trust's books
and records and furnishes, at its own expense, office space, facilities,
equipment, clerical, bookkeeping and certain legal services and pays the
salaries of all personnel, including officers of the Trust who are employees
of the Investment Manager. The Investment Manager also bears the cost of
telephone services, heat, light, power and other utilities provided to the
Trust.
3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities,
excluding short-term investments, for the six months ended April 30, 1996
aggregated $2,589,025 and $2,963,050, respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager, is the
Trust's transfer agent. At April 30, 1996, the Trust had transfer agent fees
and expenses payable of approximately $8,900.
4. PREFERRED SHARES OF BENEFICIAL INTEREST
The Trust is authorized to issue up to 1,000,000 non-participating preferred
shares of beneficial interest having a par value of $.01 per share, in one or
more series, with rights as determined by the Trustees, without approval of
the common shareholders. On November 16, 1993, the Trust issued 800 shares of
Auction Rate Preferred Shares ("Preferred Shares") consisting of 400 shares
each of Series 1 and 2 for gross total proceeds of $40,000,000 of which
140 shares of Series 1 and 180 shares of Series 2 have
<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (unaudited) continued
subsequently been retired. The preferred shares have a liquidation value of
$50,000 per share plus the redemption premium, if any, plus accumulated but
unpaid dividends, whether or not declared, thereon to the date of
distribution. The Trust may redeem such shares, in whole or in part, at the
original purchase price of $50,000 per share plus accumulated but unpaid
dividends, whether or not declared, thereon to the date of redemption.
Dividends, which are cumulative, are reset through auction procedures.
<TABLE>
<CAPTION>
RESET RANGE OF
SHARES* SERIES RATE* DATE DIVIDEND RATES**
- --------- -------- ----------- ---------- ------------------
<S> <C> <C> <C> <C>
260 1 4.00% 05/06/96 3.21%-5.00%
220 2 4.00 05/02/96 2.75 -5.00
<FN>
- ------------
* As of April 30, 1996.
** For the six months ended April 30, 1996.
</TABLE>
Subsequent to April 30, 1996 and up through June 7, 1996, the Trust paid
dividends to Series 1 and 2 at rates ranging from 3.194% to 4.00%,
respectively, in the aggregate amount of $92,248.
The Trust is subject to certain restrictions relating to the preferred
shares. Failure to comply with these restrictions could preclude the Trust
from declaring any distributions to common shareholders or purchasing common
shares and/or could trigger the mandatory redemption of preferred shares at
liquidation value.
The preferred shares, which are entitled to one vote per share, generally
vote with the common shares but vote separately as a class to elect two
Trustees and on any matters affecting the rights of the preferred shares.
5. COMMON SHARES OF BENEFICIAL INTEREST
Transactions in common shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
CAPITAL PAID
PAR IN EXCESS OF
SHARES VALUE PAR VALUE
----------- --------- -------------
<S> <C> <C> <C>
Balance, October 31, 1994 ................................................ 5,644,913 $56,449 $78,484,579
Treasury shares purchased and retired (weighted average discount 8.88%)* (156,600) (1,566) (1,561,709)
----------- --------- -------------
Balance, October 31, 1995 ................................................ 5,488,313 54,883 76,922,870
Treasury shares purchased and retired (weighted average discount 11.98%)* (90,900) (909) (1,050,781)
----------- --------- -------------
Balance, April 30, 1996 .................................................. 5,397,413 $53,974 $75,872,089
=========== ========= =============
</TABLE>
- ------------
* The Trustees have voted to retire the shares purchased.
<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS April 30, 1996 (unaudited) continued
6. FEDERAL INCOME TAX STATUS
At October 31, 1995, the Trust had a net capital loss carryover of
approximately $3,062,000 of which $2,208,000 will be available through
October 31, 2002 and $854,000 will be available through October 31, 2003
which may be used to offset future capital gains to the extent provided by
regulations.
7. DIVIDENDS TO COMMON SHAREHOLDERS
The Trust declared the following dividends from net investment income:
<TABLE>
<CAPTION>
DECLARATION AMOUNT RECORD PAYABLE
DATE PER SHARE DATE DATE
- ---------------- ----------- -------------- --------------
<S> <C> <C> <C>
April 23, 1996 $0.06 May 3, 1996 May 17, 1996
May 28, 1996 $0.06 June 7, 1996 June 21, 1996
</TABLE>
<PAGE>
INTERCAPITAL NEW YORK QUALITY MUNICIPAL SECURITIES
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a common share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR SEPTEMBER 29, 1993*
MONTHS ENDED ENDED ENDED THROUGH
APRIL 30, 1996** OCTOBER 31, 1995** OCTOBER 31, 1994** OCTOBER 31, 1993**
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(unaudited)
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ............. $ 12.86 $10.90 $13.99 $14.06
---------------- ------------------ ------------------ -------------------
Net investment income............................. 0.43 0.87 0.92 0.03
Net realized and unrealized gain (loss) .......... (0.38) 1.98 (2.98) (0.04)
---------------- ------------------ ------------------ -------------------
Total from investment operations ................. 0.05 2.85 (2.06) (0.01)
---------------- ------------------ ------------------ -------------------
Less dividends from:
Net investment income ........................... (0.36) (0.73) (0.72) --
Common share equivalent of dividend paid to
preferred ..................................... (0.08) (0.16) (0.17) --
---------------- ------------------ ------------------ -------------------
Total dividends ....................... .......... (0.44) (0.89) (0.89) --
Offering costs charged against capital . ......... -- -- (0.14) (0.06)
---------------- ------------------ ------------------ ------------------
Net asset value, end of period ................... $ 12.47 $12.86 $10.90 $13.99
================ ================== ================== ===================
Market value, end of period ...................... $ 10.875 $11.25 $9.75 $15.25
================ ================== ================== ===================
TOTAL INVESTMENT RETURN+ ......................... (0.26)%(1) 23.58% (32.18)% 1.67%(1)
RATIOS TO AVERAGE NET ASSETS OF COMMON SHAREHOLDERS:
Total expenses before expense offset ............. 0.93 %(2)(4) 0.99%(3) 1.08% 0.67%(2)
Net investment income before preferred stock
dividends ....................................... 6.60 %(2) 7.31%(3) 7.31% 2.55%(2)
Preferred stock dividends ........................ 1.22 %(2) 1.37% 1.31% N/A
Net investment income available to common
shareholders .................................... 5.38 %(2) 5.94% 6.00% 2.55%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands .......... $91,284 $94,591 $92,671 $80,529
Asset coverage on preferred shares at end of
period .......................................... 380 % 394% 297% N/A
Portfolio turnover rate .......................... 3 %(1) 1% 17% - %(1)
<FN>
- ------------
* Commencement of operations.
** The per share amounts were computed using an average number of shares
outstanding during the period.
+ Total investment return is based upon the current market value on the
last day of each period reported. Dividends are assumed to be
reinvested at the prices obtained under the Trust's dividend
reinvestment plan. Total investment return does not reflect brokerage
commissions.
(1) Not annualized.
(2) Annualized.
(3) The above expense and net investment income ratios would have been
0.98% and 7.31%, respectively, which reflects 0.01% effect for custody
cash credits.
(4) The above annualized expense ratio would have been 0.93% after expense
offset.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
TRUSTEES
- -----------------------------------------------------------------------------
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
- -----------------------------------------------------------------------------
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
James F. Willison
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
- -----------------------------------------------------------------------------
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT ACCOUNTANTS
- -----------------------------------------------------------------------------
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
- -----------------------------------------------------------------------------
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
The financial statements included herein have been taken from the records of
the Trust without examination by the independent accountants and accordingly
they do not express an opinion thereon.
INTERCAPITAL
NEW YORK
QUALITY
MUNICIPAL
SECURITIES
SEMIANNUAL REPORT
APRIL 30, 1996
