<PAGE>
Putnam
Investment
Grade
Intermediate
Municipal
Trust
Annual
Report
April 30, 1994
For investors seeking as
high a level of current
income exempt from
federal income tax as
Putnam Management
believes is consistent with
preservation of capital
A member
of the Putnam
Family of Funds
<TABLE>
<CAPTION>
<S> <C>
Contents
2 How your fund performed
3 From the Chairman
4 Report from Putnam Management
Annual Report
6 Report of Independent Accountants
7 Portfolio of investments owned
9 Financial statements
15 Tax information
15 Fund performance supplement
</TABLE>
<PAGE>
How your
fund performed
For periods ended April 30, 1994
<TABLE>
<CAPTION>
Total return* Lehman Lehman
Fund Brothers Consumer Brothers
Market Municipal Price Govt.
NAV price Bond Index Index Bond Index
<S> <C> <C> <C> <C> <C>
Life-of-fund 1.24% -14.03% 1.59% 2.22% 1.21%
(since 5/28/93)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Share data NAV Market price
May 28, 1993 $14.04 $15.000
April 30, 1994 13.64 12.375
</TABLE>
<TABLE>
<CAPTION>
Distributions Investment Capital
Period ended Number income gains Total
<S> <C> <C> <C> <C>
April 30, 1994 9 $.5175 $.048 $.5655
Current returns
at the end of the period
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Taxable equivalents+
NAV Market price NAV Market price
Current dividend
rate 5.06% 5.58% 8.38% 9.24%
</TABLE>
* Performance data represent past results. Investment return and principal
value will fluctuate so an investor's shares, when sold, may be worth more or
less than their original cost.
(a)Capital gains, if any are taxable for federal and, in most cases, state
purposes. For some investors, investment income may also be subject to the
alternative minimum tax.
+ Assumes the maximum federal tax rate of 39.6%. Results for investors
subject to lower tax rates would not be as advantageous, although many such
investors would have the opportunity to receive attractive tax benefits from
a fund investment. Consult your tax advisor for more guidance.
Please see the fund performance supplement on page 16 for additional
information about performance comparisons.
Terms you need to know
Total return is the change in value of an investment from the beginning to
the end of a period, assuming the reinvestment of all distributions.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding 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.
Current dividend rate is calculated by annualizing the income portion of the
fund's most recent distribution and dividing by the NAV or market price on
the last day of the period.
Taxable equivalent return is the return that a taxable investment would have
to produce to equal the fund's current return.
<PAGE>
From the
Chairman
Dear Shareholder:
(George Putnam photo)
George Putnam
Chairman of the Trustees
(C) Karsh, Ottawa
Many shareholders have been asking us whether we think the volatility that
hit the securities markets in February and March was a prelude to further
decline during the rest of 1994. We have been pointing out that recent
adjustments in the markets are a natural occurrence at this stage of the
economic recovery.
Some volatility will likely continue for a while as investors digest new
realities in areas such as interest rates, inflation, and the pace of the
recovery. But the economy is still strong, interest rates remain historically
low, and inflation appears under control. Overall prospects for the long
term, in our view, as still positive.
Seasoned investors know there will occasionally be periods of rough going.
But experience has also taught them that long-term investment programs should
rarely be altered in response to short-term events.
In the report that follows, Fund Manager Tom Goggins discusses the
performance of Putnam Investment Grade Intermediate Municipal Trust in this
market environment.
Respectfully yours,
(Signature of George Putnam)
George Putnam
June 15, 1994
<PAGE>
Report from
Putnam Management
When the Federal Reserve Board raised short-term interest rates in February
and March, Putnam Investment Grade Intermediate Municipal Trust, like most
other fixed-income investments, felt the effects of the sudden downturn in
the bond market. The decline came as the fund approached the midpoint of its
fiscal year and contributed substantially to the negative results at the end
of the period.
Total return since the fund's inception on May 28, 1993, was 1.24%, again at
net asset value. While intermediate bonds have provided greater relative
stability historically than long-term bonds, they were particularly hard hit
by recent market events.
The fund provided a current tax-free return of 5.06% at net asset value at
the end of the period. Investors in the highest federal income tax bracket of
39.6% would have had to earn 8.38% on a fully taxable investment to match
this result. Investors in the lower brackets would also have had the
opportunity for tax-advantaged earnings.
Preemptive move The Fed's decision to raise short-term rates was billed as a
preemptive move against a pickup in the inflation rate. The board's concern
was prompted by its perception that the economic recovery was gaining too
much momentum, which it feared could begin to put upward pressure on prices.
Keeping a tight rein in inflation has been and continues to be the Fed's
major policy objective.
The market's response to the Fed's boost in rates was, in retrospect,
somewhat extreme. Many investors, concerned that the increases were merely
the first of a series, ran for the exits. More recently, as they perceived
that this might not be the case, they began buying securities with their
freshly liberated assets. This, in turn, moderated the extent of the decline.
We believe, as do most economists and professional money managers, that the
Fed's action was justified and that such market corrections are normal at
this stage of the business cycle. As a result, we were able to take advantage
of the market's decline to acquire some securities at attractive prices.
Stable center The soundness of the fund's basic strategy--seeking high
current income by investing in higher-quality bonds with maturities in the 7
to 10-year range--was confirmed, in our view, by the closeness of its returns
to those of the municipal bond market at large. The fund does not seek to
"beat the market", or to expose its assets to undue risks in the pursuit of
above-average gains. The principal attraction of intermediate maturity
municipal bonds is that they tend to be less volatile than long-term bonds.
Consequently, an intermediate-term portfolio can generally offer a higher
degree of price stability over the long term.
During the period we committed more assets to noncallable bonds. Because
these bonds cannot be called away before the maturity date, we were thus able
to lock in attractive yields and thereby provide the fund with a relatively
secure stream of investment income.
<PAGE>
We should point out that this strategy is not one we would normally pursue in
an environment of rising interest rates, since it diminishes the fund's
ability to invest in new higher-yielding issues as they come to market.
Furthermore, prices of noncallable bonds tend to fluctuate more widely than
those of callable bonds. However, we felt that our main purpose was to
protect the fund's income stream in this period of uncertainty.
We did not make any major changes in the portfolio's sector allocations
during the period. We did, however, shorten the average duration somewhat.
Duration is a mathematical formula that indicates how much bond prices will
move up or down with each percentage-point shift in interest rates. Like
maturity, with which it is often confused, duration is measured in years. The
shorter the duration, the less volatility you can expect from the portfolio.
In a rising rate environment, keeping the portfolio's average duration
relatively short can be instrumental in protecting asset value.
We are maintaining the portfolio's average quality level of A while keeping
the fund well diversified as to geographic and investment mix.
Outlook Supplies of municipal bonds will be tight in the months ahead as the
volume of new issues drops and demand from tax-conscious investors remains
high. This already strong demand will be heightened as the gap between yields
on municipal bonds and taxable bonds remains narrow, making the tax-free
returns available from municipal bonds relatively more attractive. The fund's
tax-equivalent rate at the end of the period for investors in the highest
federal tax bracket illustrates the point. Long-term Treasury bonds yielded
7.31% on the same date.
The reduced supply will reflect significantly smaller number of refinancings
coming to market as interest rates begin to move higher. It may also reflect
a lower volume of municipal borrowings as municipalities are likely to reduce
new issues as well.
We expect the municipal bond market to experience continued volatility along
with the rest of the bond market through the end of 1994. But the heavy
demand should significantly diminish the extent of price swings compared with
those in store for taxable bonds.
Looking ahead, our expectations are for moderate economic growth, continued
low inflation, and only a modest rise in interest rates. The fund is well
positioned for this projected outcome, yet flexible enough to adjust to
others as required.
<PAGE>
Investment
Grade
Intermediate
Municipal
Trust
Annual
Report
For the period May 28, 1993 (commencement of operations) to April 30, 1994
Report of Independent Accountants
To the Trustees and Shareholders of
Putnam Investment Grade Intermediate Municipal Trust
We have audited the accompanying statement of assets and liabilities of
Putnam Investment Grade Intermediate Municipal Trust, including the portfolio
of investments owned, as of April 30, 1994, the related statement of
operations, the statement of changes in net assets and the "Financial
Highlights" for the period May 28, 1993 (commencement of operations) to April
30, 1994. These financial statements and "Financial Highlights" are the
responsibility of the Fund's Management. Our responsibility is to express an
opinion on these financial statements and "Financial Highlights" based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
"Financial Highlights" are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1994 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and "Financial Highlights" referred
to above present fairly, in all material respects, the financial position of
Putnam Investment Grade Intermediate Municipal Trust as of April 30, 1994,
the results of its operations, the changes in its net assets and the
"Financial Highlights" for the period May 28, 1993 (commencement of
operations) to April 30, 1994, in conformity with generally accepted
accounting principles.
Coopers & Lybrand
Boston, Massachusetts
June 20, 1994
<PAGE>
Portfolio of
investments owned
April 30, 1994
Municipal Bonds and Notes (92.4%)(a)
<TABLE>
<CAPTION>
Principal Amount Ratings (b) Value
<C> <S> <C> <C>
California (15.0%)
$1,865,000 Duarte, Certif. of
Participation (City of
Hope Med. Ctr.),
5-1/4s, 4/1/99 Baa $1,802,056
1,500,000 Los Angeles Cnty.,
Certif. of
Participation (Marina
Del Rey), Ser. A,
6-1/4s, 7/1/03 BBB/P 1,468,125
500,000 Orange Cnty., Certif.
of Participation
Variable Rate Demand
Notes (Office and
Courthouse Project),
2.95s, 12/1/15 A 500,000
3,000,000 Riverside Cnty., Asset
Leasing Corp. Rev.
Bonds (Hosp. Project),
Ser. A, 5-3/4s, 6/1/01 A 2,947,500
6,717,681
Colorado (3.2%)
1,415,000 Denver, City and Cnty.,
Arpt. Rev. Bonds Ser.
D, 7.4s, 11/15/01 Baa 1,434,456
Illinois (17.6%)
4,000,000 Chicago, School Fin.
Auth. Residual Interest
Bonds (RIBS) 7.37s,
6/1/05 (acquired
6/11/93, cost
$3,860,000)(c) AA 3,635,000
2,000,000 IL Dev. Fin. Auth.
Solid Waste Disp. Rev.
Bonds (Waste Mgmt. Inc.
Project), 7-1/8s,
1/1/01 AA 2,152,500
2,000,000 IL Hlth. Fac. Auth.
Rev. Bonds (Grant
Hosp.), Ser. B, 7-1/4s,
6/1/99 BB 2,080,000
7,867,500
Kentucky (2.2%)
$1,000,000 Kenton Cnty., Arpt.
Board Rev. Bonds
(Cincinnati/Northern KY
Intl.), Ser. B, 5-1/2s,
3/1/04 AAA $ 980,000
Maryland (4.5%)
2,075,000 Northeast MD Waste
Disp. Auth. Solid Waste
Rev. Bonds (Montgomery
Cnty. Resource Recvy.
Project), Ser. A, 5.8s,
7/1/04 A 2,025,719
Massachusetts (8.0%)
3,000,000 MA Muni. Wholesale
Elec. Co. IVRC Trust
RIBS,
Ser. 93D, American
Municipal Bond
Assurance Corp.
(AMBAC), 7.127s,
4/30/03 (acquired
6/11/93, cost
$2,840,340)(c) AAA 2,610,000
1,000,000 MA State Hlth. & Ed.
Fac. Auth. Rev. Bonds
(Central New England
Hlth. Syst.), Ser. A,
5-3/4s, 8/1/03 Baa 975,000
3,585,000
New York (13.0%)
1,000,000 NY City General
Obligation Bonds
Ser. H, 5.9s, 8/1/05 A 980,000
1,500,000 Ser. A, 6-1/4s, 8/1/03 A 1,526,250
1,925,000 NY State Dorm. Auth.
Rev. Bonds (State U.
Ed. Fac.), Ser. A,
5.2s, 5/15/02 Baa 1,867,250
1,500,000 NY State Urban Dev.
Corp. Rev. Bonds
(Correctional Fac.),
5-1/4s, 1/1/03 Baa 1,441,875
5,815,375
<PAGE>
North Carolina (7.5%)
$1,825,000 NC Eastern Muni. Pwr.
Agcy. Rev. Bonds
Ser. B, 5-3/4s, 1/1/04 A $ 1,827,281
1,500,000 NC Muni. Pwr. Agcy.
Rev. Bonds (No. 1
Catawba Elec.), 5.9s,
1/1/03 A 1,528,125
3,355,406
Pennsylvania (7.6%)
2,000,000 Clinton Cnty., Indl.
Dev. Auth. Poll.
Control Rev. Bonds
(Intl. Paper Co.
Project), Ser. A,
5-3/8s, 5/1/04 A 1,917,500
1,500,000 McKeesport, Hosp. Auth.
Rev. Bonds (McKeesport
Hosp. Project), 6-1/4s,
7/1/03 Baa 1,458,750
3,376,250
South Carolina (3.5%)
1,500,000 Spartanburg Cnty.,
Indl. Dev. Rev. Bonds
(Border Inc. Project),
7.2s, 6/1/00 Baa 1,584,375
Washington (10.3%)
2,000,000 WA State Pub. Pwr.
Supply Syst. Rev. Bonds
(Nuclear Project No.
1), Ser. A, 5-1/2s,
7/1/04 AA 1,930,000
3,000,000 WA State RIBS, 7.051s,
5/1/08 AA 2,681,250
4,611,250
Total Investments
(cost $42,792,335)(d) $41,353,012
</TABLE>
Notes
(a)Percentages indicated are based on net assets of $44,757,510, which
correspond to a net asset value per share of $13.64.
(b)The Moody's or Standard & Poor's ratings indicated are believed to be the
most recent ratings available at April 30, 1994 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, 1994. Securities
rated by Putnam are indicated by "/P" and are not publicly rated. Ratings are
not covered by the Report of Independent Accountants.
(c)Restricted as to public resale. At the date of acquisition, this security
was valued at cost. There were no outstanding unrestricted securities of the
same class as that held. Total market value of restricted securities owned at
April 30, 1994 was $6,245,000 or 14.0% of net assets.
(d)The aggregate identified cost for tax purposes is $42,792,335 resulting in
gross unrealized appreciation and depreciation of $45,157 and $1,484,480,
respectively or net unrealized depreciation of $1,439,323.
The rates shown on Residual Interest Bonds (RIBS) and Variable Rate Demand
Notes (VRDN) are the current interest rates at April 30, 1994, 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, 1994 (as a percentage of net assets):
Utilities 14.2%
Hospital/Health Care 14.1
<PAGE>
Statement of
assets and liabilities
April 30, 1994
<TABLE>
<S> <S> <C> <C>
Assets Investments in securities, at value (identified cost $42,792,335) (Note 1) $41,353,012
Cash 375,705
Interest receivable 942,272
Receivable for securities sold 2,746,111
Unamortized organization expenses (Note 1) 23,208
Total assets 45,440,308
Liabilities Distributions payable to shareholders $188,718
Payable for compensation of Manager (Note 3) 79,176
Payable for investor servicing and custodian fees (Note 3) 19,121
Payable for administrative services (Note 3) 1,794
Payable for offering and organization costs (Notes 1 and 2) 375,923
Payable for exchange listing fee 5,000
Other accrued expenses 13,066
Total liabilities 682,798
Net assets $44,757,510
Represented by Paid-in capital (Note 2) $46,052,954
Undistributed net investment income 441,853
Accumulated net realized loss on investments (297,974)
Net unrealized depreciation of investments (1,439,323)
Net assets $44,757,510
Computation of
net asset value Net asset value per share ($44,757,510 divided by 3,282,073 shares) $ 13.64
</TABLE>
<PAGE>
Statement of
operations
For the period May 28, 1993
(commencement of operations)
to April 30, 1994*
<TABLE>
<CAPTION>
<S> <C> <C>
Tax exempt interest income $ 2,585,616
Expenses:
Compensation of Manager (Note 3) $305,444
Investor servicing and custodian fees (Note 3) 72,656
Compensation of Trustees (Note 3) 1,260
Reports to shareholders 7,812
Auditing 31,729
Legal 14,228
Postage 3,675
Administrative services (Note 3) 5,800
Exchange listing fees 5,000
Amortization of organization expenses (Note 1) 5,800
Other 3,870
Fees waived by Manager (Note 3) (11,619)
Total expenses 445,655
Net investment income 2,139,961
Net realized loss on investments (Notes 1 and 4) (140,557)
Net unrealized depreciation of investments during the
period (1,439,323)
Net loss on investments (1,579,880)
Net increase in net assets resulting from operations $ 560,081
* See Note 2
</TABLE>
<PAGE>
Statement of
changes in net assets
<TABLE>
<CAPTION>
For the period
May 28,
1993(commencement
of operations) to
April 30
1994*
<S> <S> <C>
Increase in
Net investment income $ 2,139,961
Net realized loss on investments (140,557)
Net unrealized depreciation of investments (1,439,323)
Net increase in net assets resulting from operations 560,081
Distributions to shareholders from:
Net investment income (1,698,429)
(1,698,429)
Net realized gain on investments (157,539)
Increase from capital share transactions (Note 2) 45,953,397
Total increase in net assets 44,657,510
Net assets Beginning of period 100,000
End of period (including undistributed net investment income of
$441,853) $44,757,510
*See Note 2.
</TABLE>
<PAGE>
Financial
Highlights*
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
For the period
May 28, 1993
(commencement of
operations) to
April 30
1994
<S> <C>
Net Asset Value, Beginning of Period $14.04*
Investment operations
Net Investment Income .65(a)
Net Realized and Unrealized Loss on Investments (.48)
Total from Investment Operations .17
Less Distributions from:
Net Investment Income (.52)
Net Realized Gain on Investments (.05)
Total Distributions (.57)
Net Asset Value, End of Period $13.64
Market Value, End of Period $12.38
Total Investment Return at Market Value (%) (b) (15.25)(c)
Net Assets, End of Period (in thousands) $44,758
Ratio of Expenses to Average Net Assets (%) 1.02(a)(c)
Ratio of Net Investment Income to Average Net Assets (%) 4.90(a)(c)
Portfolio Turnover (%) 43.07(d)
</TABLE>
* Represents initial net asset value of $14.14 less offering expenses and
closing costs of approximately $0.10.
(a) Reflects a waiver of the management fee for the period May 28, 1993 to
June 13, 1993. As a result of such waiver, expenses of the Fund for the
period ended April 30, 1994 reflect a reduction of less than $0.01 per share.
See Note 3.
(b) Total investment return assumes dividend reinvestment and does not
reflect the effect of sales charges.
(c) Annualized.
(d) Not annualized.
<PAGE>
Notes to
financial statements
April 30, 1994
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 provide as high a level of current income exempt
from federal income tax as is believed to be consistent with preservation of
capital. The Fund intends to achieve its objective by investing in a
portfolio of investment grade municipal securities that the Fund's Manager
believes does not involve undue risk to income or principal.
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 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) 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 of securities held and excise tax on
income and capital gains.
D) Distributions to shareholders Income dividends are declared and
distributed monthly by the Fund. Capital gains distributions, if any, are
recorded on the ex-dividend date and paid annually.
E) 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, original issue
discount bonds and stepped-coupon bonds is accredited according to the
effective yield method.
F) Unamortized organization expenses Expenses incurred by the Fund in
connection with its organization aggregated $29,008. These expenses are being
amortized on a straight-line basis over a five-year period.
Note 2 Initial capitalization and offering of shares
The Fund was established as a Massachusetts business trust under the laws of
The Commonwealth of Massachusetts on
April 1, 1993.
During the period April 1, 1993 to May 27, 1993 the Fund had no operations
other than those related to organizational matters, including the initial
capital contribution of $100,000, and the issuance of 7,073 shares to Putnam
Mutual Funds Corp. on May 27, 1993.
On May 28, 1993, the Fund completed the initial offering of 3,200,000 of its
shares for which it received net proceeds of
$48,000,000 before deducting $346,915 of initial offering expenses and
closing costs of $2,760,000 (such offering expenses and the Fund's
organizational expenditures were paid initially by Putnam Investment
Management, Inc., the Fund's Manager, and the Fund will reimburse the Manager
for such costs). Regular investment operations commenced on May 28, 1993.
On July 8, 1993, the Fund completed a supplemental offering of 75,000 shares
for which it received net proceeds of $1,060,313.
<PAGE>
Note 3 Management fee, administrative services, and other transactions
Compensation of Putnam Investment Management, Inc. ("Putnam Management"), the
Fund's Manager, a wholly-owned subsidiary of Putnam Investments, Inc., for
management, investment advisory and administrative services fees is paid
quarterly based on the average net assets of the Fund. 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.
In connection with the initial offering of shares of the Fund, Putnam
Investment Management agreed to waive its management fee from the period May
28, 1993 (commencement of operations) to June 13, 1993. As a result of the
voluntary waiver, expenses for the period ended April 30, 1994 were reduced
by $11,619 .
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. For the period ended
April 30, 1994, the Fund paid $ 5,800 for these services.
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 subsidiary of Putnam Investments, Inc. Investor
servicing agent functions are provided by Putnam Investor Services, a
division of PFTC. Fees paid for these investor servicing and custodial
functions for the period ended April 30, 1994 amounted to $72,656.
Investor servicing and custodian fees reported in the Statement of operations
for the period ended April 30, 1994 have been reduced by credits allowed by
PFTC.
Note 4 Purchases and sales of securities
During the year ended April 30, 1994, purchases and sales of investment
securities other than short-term investments aggregated $62,414,587 and $
19,936,386 , respectively. Purchases and sales of short-term municipal
obligations aggregated $49,035,000 and $48,535,000, 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>
For the period
May 28, 1993
Three months ended (commencement
of operations) to
April 30 January 31 October 31 July 31, 1993*
1994 1994 1993 1993
<S> <C> <C> <C> <C>
Total investment income
Total $ 725,352 $ 710,220 $ 705,625 $ 444,419
Per Share $ .22 $ .16 $ .28 $ .13
Net investment income
Total $ 611,890 $ 575,733 $ 585,631 $ 366,707
Per Share $ .18 $ .13 $ .23 $ .11
Net realized and
unrealized gain (loss)
on investments
Total $(3,826,674) $ 662,908 $ 1,123,177 $ 460,709
Per Share $ (1.15) $ .24 $ .29 $ .14
Net increase (decrease) in
net assets resulting
from operations
Total $(3,214,784) $ 1,238,641 $ 1,708,808 $ 827,416
Per Share $ (.97) $ .37 $ .52 $ .25
Net assets as end of
period
Total $44,757,510 $48,538,426 $48,042,558 $46,899,916
Per Share $ 13.64 $ 14.79 $ 14.64 $ 14.29
* In connection with the initial offering of shares of the Fund, Putnam Management agreed to waive
its management fee for the period May 28, 1993 to June 13, 1993. As a result of such waiver,
expenses of the Fund reflect a reduction of less than $.01 per share.
</TABLE>
<PAGE>
Tax
Information
The Fund has designated all distributions from investment income during the
fiscal year as exempt-interest dividends. Thus, 100% of these distributions
are exempt from federal income tax.
During the fiscal year, the Fund distributed $0.048 per share from short-term
capital gains constituting "dividend income".
The Form 1099 you receive in January 1995 will show the tax status of any
taxable distributions paid to your account in calendar 1994.
Fund
performance
supplement
Putnam Investment Grade Intermediate Municipal Trust is a portfolio managed
for high current income free from federal income tax, consistent with
preservation of capital.
The Lehman Brothers Municipal Bond Index is an unmanaged list of
approximately 8,000 investment-grade, fixed rate, long-term maturity
tax-exempt bonds, which are selected to be representative of the market in
terms of price movement and sector distribution. The average quality of bonds
held in the index may differ from the average quality of those bonds in which
the fund invests. 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 from the fund. Total return performance for the index
reflects mathematically derived changes of market price and reinvestment of
interest payments, as computed by Lehman Brothers. The fund's portfolio
contains securities that do not match those in the index.
The Consumer Price Index is a commonly used measure of inflation; it does not
represent an investment return.
The fund performance supplement has been prepared by Putnam Management to
provide additional information about the fund and the indexes used for
performance comparisons. The information is not part of the portfolio of
investments owned or the financial statements.
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Putnam
Investment
Grade
Intermediate
Municipal
Trust
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
Investor servicing agent
Putnam Investor Services
Mailing address:
P.O. Box 41203
Providence, RI 02940-1203
1-800-225-1581
Custodian
Putnam Fiduciary
Trust Company
Legal Counsel
Ropes & Gray
Independent accountants
Copoers & Lybrand
Putnam Investor Services
has received the DALBAR
award each year since the
award's 1990 inception.
In more than 10,000 tests
of 38 shareholder
service components,
Putnam outperformed
the industry standard
in every category.
583-12463
<PAGE>
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
John R. Verani
Vice President
Gary N. Coburn
Vice President
James E. Erickson
Vice President
Thomas Goggins
Vice President and
Fund Manager
William N. Shiebler
Vice President
John D. Hughes
Vice President
and Treasurer
Paul O'Neil
Vice President
Beverly Marcus
Clerk and
Assistant Treasurer
Call 1-800-634-1587 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
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
Bulk Rate
U.S. Postage
Paid
Boston, MA
Permit No. 53749
<PAGE>
APPENDIX TO FORM N-30D FILINGS TO DESCRIBE DIFFERENCES BETWEEN PRINTED
AND EDGAR-FILED TEXTS:
(1) Bold and italic typefaces are displayed in normal type.
(2) Headers (e.g., the name of the fund) and footers (e.g., page
numbers and "The accompanying notes are an integral part of these
financial statements") are omitted.
(3) Certain tabular and columnar headings and symbols are displayed
differently in this filing.
(4) Bullet points and similar graphic signals are omitted.
(5) Page numbering is omitted.
(6) Dagger footnote symbol replaced with plus sign (+).
