[GRAPHIC]
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST SEMIANNUAL REPORT
MAY 31, 2002
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The environment for the municipal bond market has been shaped by economic events
and investor uncertainties over the past six months. Although the Federal
Reserve halted its string of interest rate cuts in December 2001, its presence
on the sidelines was felt by the market as investors tried to guess the timing
of its next move. A robust first quarter suggested that the Fed could act early
in 2002 to begin to raise short-term interest rates; however, they remained at a
40-year low throughout the period. Indications of more moderate economic growth
in the second quarter raised the possibility that the Fed may delay action until
later in the year.
The municipal bond market was one of the strongest bond market sectors for the
six-month period. As cities and states face leaner times and tighter budgets,
the volume of new municipal bonds increased somewhat. However, demand also
increased as investors favored bonds over stocks, and that has helped support
municipal bond returns.
The following report will provide you with more detailed information about the
trust's performance and the strategies used by portfolio manager Maureen G.
Newman. For more information, contact your financial advisor. As always, we
thank you for investing in Colonial Investment Grade Municipal Trust and for
giving us the opportunity to help you build a strong financial future.
/s/ Keith T. Banks
Keith T. Banks
President
Colonial Management Associates, Inc.
Not FDIC Insured
May Lose Value
No Bank Guarantee
Economic and market conditions can frequently change. There is not assurance
that the trends described herein will continue or commence.
PORTFOLIO MANAGER'S REPORT
For the six-month period ended May 31, 2002, Colonial Investment Grade
Municipal Trust generated a 2.88% total return, based on net asset value.
The trust outperformed the average 2.62% return of its peer group, the
Lipper General Municipal Debt Funds (Leveraged). The trust benefited from
its relatively large allocation to intermediate-term bonds, which generally
outperformed long-maturity bonds. Also, the trust's leverage, investing the
proceeds from the sale of preferred shares in long-term bonds and paying
out a short rate, boosted its income stream. As a result, the income
available for distribution to common shareholders was enhanced.
The trust's relatively long duration at the beginning of the period
detracted from performance. However, we shortened duration as economic
growth improved. Duration measures sensitivity to interest rate changes
(see sidebar). The trust's investment in Ogden Haverhill Project, (0.6% of
net assets) a resource recovery project in Haverhill, Massachusetts, also
had a negative effect on performance. These bonds lost value when its
parent company filed for bankruptcy, even though the operations and
finances of Ogden Haverhill Project have not been affected by the
bankruptcy.
Effective July 31, 2002, the trust's investment strategies were changed to
indicate that the trust will, under normal conditions, invest at least 80%
of its net assets (plus any borrowings for investment purposes) in
investment grade Municipal Obligations (bonds rated Baa or higher by
Moody's Investors Service, Inc. or BBB or higher by Standard & Poor's
Ratings Services, or comparably rated by another national bond rating
service or unrated but considered to be of comparable quality by the
trust's advisor). "Municipal Obligations" are debt obligations, the
interest on which was at the time of issuance, in the opinion of bond
counsel to the issuer, exempt from federal income tax (other than the
possible incidence of any alternative minimum tax). Prior to July 31, 2002,
the trust was required to invest primarily (at least 65% of its assets) in
investment grade Municipal Obligations.
We have structured the portfolio to take advantage of a moderately
improving economic environment, one in which interest rates will stabilize
or rise. In the months ahead, we expect most of the trust's total return to
come from income. Therefore, we added small positions in several cyclical
issuers, including Cessna Citation Service Center (0.3% of net assets)(1),
the aircraft division of Textron Manufacturing Company which have the
potential to boost the trust's income. In keeping with our income-producing
strategy, we plan to invest a small portion of the trust's assets in lower
quality bonds.
/s/ Maureen G. Newman
MAUREEN G. NEWMAN
Maureen G. Newman is the portfolio manager of Colonial Investment Grade
Municipal Trust and a senior vice president of Colonial Management Associates,
Inc., an affiliate of Columbia Management Group. Ms. Newman received her BA in
economics from Boston College and her MBA from Babson College. She is a
Chartered Financial Analyst, a member of the Boston Security Analysts Society
and former chairman of the National Federation of Municipal Analysts.
(1) Holdings are disclosed as of May 31, 2002 and are subject to change.
Past performance is no guarantee of future investment results. The principal
value and investment returns will fluctuate, resulting in a gain or loss on
sale.
Tax-exempt investing offers current tax-exempt income, but it also involves
certain risks. The value of the trust shares will be affected by interest rate
changes and the creditworthiness of issues held in the trusts. Interest income
from certain tax-exempt bonds may be subject to the federal alternative minimum
tax for individuals and corporations.
PRICE PER SHARE AS OF 5/31/02 ($)
Net asset value 11.02
------------------------------------------
Market price 10.44
------------------------------------------
6-MONTH TOTAL RETURNS (%)
Net asset value 2.88
------------------------------------------
Market price (0.83)
------------------------------------------
DISTRIBUTIONS DECLARED
PER COMMON SHARE ($)
12/1/01-5/31/02 0.34
------------------------------------------
A portion of the trust's income may be subject to the alternative minimum tax.
The trust may at times purchase tax-exempt securities at a discount from their
original issue price. Some or all of this discount may be included in the
trust's ordinary income, and any market discount is taxable when distributed.
TOP 10 INDUSTRY SECTORS AS OF 5/31/02 (%)
Local general obligations 17.8
-----------------------------------------------
Hospitals 10.1
-----------------------------------------------
State appropriated 8.3
-----------------------------------------------
Education 8.1
-----------------------------------------------
State general obligations 6.4
-----------------------------------------------
Refunded/escrowed 4.8
-----------------------------------------------
Investor owned 5.1
-----------------------------------------------
Toll facilities 4.8
-----------------------------------------------
Special non-property tax 4.7
-----------------------------------------------
Water & sewer 4.1
-----------------------------------------------
Sector breakdowns are calculated as a percentage of net assets representing both
common shares and auction preferred shares.
QUALITY BREAKDOWN AS OF 5/31/02 (%)
AAA 62.0
-----------------------------------------------
AA 15.5
-----------------------------------------------
A 6.7
-----------------------------------------------
BBB 7.0
-----------------------------------------------
BB 0.8
-----------------------------------------------
B 0.2
-----------------------------------------------
Non-rated 7.5
-----------------------------------------------
Cash equivalents 0.3
-----------------------------------------------
Quality breakdowns are calculated as a percentage of total investments,
including short-term obligations. Ratings shown in the quality breakdown
represent the highest rating assigned to a a particular bond by one of the
following nationally recognized rating agencies: Standard & Poor's Corporation,
Moody's Investors Service, Inc. or Fitch Investors Service, Inc. Because the
trust is actively managed, there can be no guarantee that the trust will
continue to maintain this quality breakdown or invest in these sectors in the
future.
ABOUT DURATION
Duration is a measure, expressed in years, of interest-rate sensitivity. It's
similar to maturity, but because it takes into consideration the entire stream
of future principal and interest payments and how long it will take to collect
them, it is a more complex and also a more accurate measure of a trust's
exposure to changing interest rates.
Because we are active duration managers, we tend to use duration as a tactical
tool to anticipate or respond to interest rate changes. Because bond prices move
in the opposite direction that interest rates are moving, usually we lower
duration when we expect interest rates to rise or raise it when we expect
interest rates to fall. This adjustment provides the potential to benefit
performance. If we are wrong and interest rates rise after we lengthen duration
or fall after we shorten duration, trust performance could be hurt.
1
INVESTMENT PORTFOLIO
May 31, 2002 (Unaudited)
MUNICIPAL BONDS - 98.3% (continued) PAR VALUE
------------ ------------
EDUCATION - 9.0%
EDUCATION - 8.1%
AL University of South Alabama,
Series 1999,
(a) 11/15/18 $ 2,500,000 $ 1,051,500
IL Chicago, State University Auxiliary
Facilities, Series 1998,
5.500% 12/01/23 1,085,000 1,139,825
MA State College Building Authority,
Series 1999 A,
(a) 05/01/23 2,710,000 896,360
MA State Health & Educational
Facilities Authority, Brandeis
University, Series 1998 I,
4.750% 10/01/28 2,550,000 2,349,902
MA State Industrial Finance Agency:
Tabor Academy, Series 1998,
5.400% 12/01/28 1,000,000 955,430
Tufts University, Series 1998 H,
4.750% 02/15/28 1,500,000 1,385,385
MN University of Minnesota:
Series 1996 A,
5.750% 07/01/14 500,000 560,225
Series 1999 A,
5.500% 07/01/21 2,000,000 2,145,000
MO State Health & Educational
Facilities Authority, Central Institute
for the Deaf, Series 1999,
5.850% 01/01/22 600,000 630,366
NY St. Lawrence County Industrial
Development Agency,
St. Lawrence University, Series 1998 A,
5.500% 07/01/13 1,465,000 1,581,599
TX Texas Tech University, Series 1999,
5.000% 02/15/29 2,500,000 2,393,300
------------
15,088,892
------------
STUDENT LOAN - 0.9%
NE Nebhelp, Inc., Series 1993 A-6,
6.450% 06/01/18 1,500,000 1,679,340
------------
--------------------------------------------------------------------------------
HEALTH CARE - 12.9%
HOSPITALS - 10.1%
AZ Maricopa County Industrial
Development Authority,
National Health Facilities II Project,
5.100% 01/01/33 2,500,000 2,461,800
FL Orange County Health Facilities Authority,
Orlando Regional Healthcare System:
Series 1996 C,
6.250% 10/01/13 2,460,000 2,886,084
Series 1999,
6.000% 10/01/26 $ 175,000 $ 178,489
Series 2002,
5.750% 12/01/32 (b) 150,000 149,358
FL South Broward Hospital District,
Series 2002,
5.625% 05/01/32 1,000,000 989,240
IL Southwestern Illinois Development Authority,
Anderson Hospital, Series 1999,
5.375% 08/15/15 380,000 356,372
IL State Development Finance Authority,
Adventist Health System, Series 1999,
5.500% 11/15/20 1,000,000 957,630
IL State Health Facilities Authority,
Swedish American Hospital, Series 2000,
6.875% 11/15/30 500,000 532,985
LA Jefferson Parish Hospital Service
District 2, Series 1998,
5.250% 07/01/12 1,000,000 1,057,930
LA State Public Facilities Authority,
Touro Infirmary, Series 1999 A,
5.625% 08/15/29 500,000 490,060
MA State Health & Educational
Facilities Authority, South Shore Hospital,
Series 1999 F,
5.750% 07/01/29 1,000,000 990,460
MD State Health & Educational
Facilities Authority, University of
Maryland Medical System,
6.750% 07/01/30 250,000 269,732
MI Flint Hospital Building Authority,
Hurley Medical Center, Series 1998 B,
5.375% 07/01/28 500,000 416,145
NC State Medical Care Commission,
Gaston Health Care, Series 1998,
5.000% 02/15/29 2,450,000 2,292,367
NH Higher Educational & Health Facilities,
Catholic Medical Center, Series 1989,
6.000% 07/01/17 2,500,000 2,500,175
NV Henderson, Catholic Healthcare West,
Series 1999 A,
6.750% 07/01/20 500,000 524,685
TN Metropolitan Government, Nashville
& Davidson Counties, Meharry Medical
College, Series 1996,
6.000% 12/01/16 1,575,000 1,790,302
------------
18,843,814
------------
INTERMEDIATE CARE FACILITIES - 0.2%
IL State Development Finance Authority,
Hoosier Care, Inc., Series 1999 A,
7.125% 06/01/34 475,000 415,625
------------
See notes to investment portfolio.
2
MUNICIPAL BONDS - 98.3% (continued) PAR VALUE
------------ ------------
NURSING HOMES - 2.6%
AK Juneau, St. Ann's Care Center,
Series 1999,
6.875% 12/01/25 $ 500,000 $ 499,375
CO Health Care Facilities Authority,
Pioneer Health Care, Series 1989,
10.500% 05/01/19 1,620,000 1,597,725
DE State Economic Development
Authority, Churchman Village
Project, Series 1991 A,
10.000% 03/01/21 920,000 1,016,600
PA Chester County Industrial
Development Authority, Pennsylvania
Nursing Home, Inc.,
8.500% 05/01/32 765,000 759,507
PA Delaware County Authority,
Main Line and Haverford Nursing,
Series 1992,
9.000% 08/01/22 575,000 500,250
WI State Health & Educational Facilities
Authority, Metro Health
Foundation, Inc., Series 1993,
11.000% 11/01/22 (c) 1,300,000 442,000
------------
4,815,457
------------
--------------------------------------------------------------------------------
HOUSING - 2.0%
ASSISTED LIVING/SENIOR - 0.3%
TX Bell County Health Facilities
Development Corp., Care Institute, Inc.,
9.000% 11/01/24 485,000 504,400
------------
MULTI-FAMILY - 1.3%
FL Broward County Housing Finance
Authority, Chaves Lake Apartment
Project, Series 2000,
7.500% 07/01/40 500,000 508,125
FL Clay County Housing Finance
Authority, Madison Commons
Apartments, Series 2000 A,
7.450% 07/01/40 250,000 254,063
MN White Bear Lake, Birch Lake
Townhome Project:
Series 1989 A,
10.250% 07/15/19 775,000 794,375
Series 1989 B,
(a) 07/15/19 (d) 685,000 298,115
Resolution Trust Corp., Pass Through
Certificates, Series 1993 A,
8.750% 12/01/16 (e) 584,443 587,318
------------
2,441,996
------------
SINGLE FAMILY - 0.4%
CO State Housing Finance Authority,
Series 2000 B-2,
7.250% 10/01/31 $ 390,000 $ 433,785
IL Chicago, Series 2000 A,
7.150% 09/01/31 360,000 402,433
------------
836,218
------------
--------------------------------------------------------------------------------
INDUSTRIAL - 1.4%
FOREST PRODUCTS - 0.5%
MN International Falls, Boise Cascade Corp.,
Series 1999,
6.850% 12/01/29 1,000,000 1,023,450
MANUFACTURING - 0.9%
KS Wichita Airport Authority Facilities,
Cessna Citation Service Center,
Series 2002 A,
6.250% 06/15/32 475,000 477,052
MN Brooklyn Park, TL Systems Corp.,
Series 1991,
10.000% 09/01/16 835,000 900,756
MO State Development Finance Board,
Procter & Gamble Co., Series 1999,
5.200% 03/15/29 250,000 245,022
------------
1,622,830
------------
--------------------------------------------------------------------------------
OTHER - 5.8%
OTHER - 0.2%
SC Tobacco Settlement Revenue
Management Authority, Series 2001 B,
6.375% 05/15/28 400,000 400,568
------------
POOL/BOND BANK - 0.8%
FL State Municipal Loan Council,
Series 2000 A,
(a) 04/01/21 520,000 190,278
KS State Development Finance Authority,
Water Pollution Control,
5.500% 11/01/17 1,125,000 1,220,299
------------
1,410,577
------------
REFUNDED/ESCROWED (f) - 4.8%
CA Contra Costa County Public Financing
Authority, Series 1992 A,
7.100% 08/01/22 635,000 653,644
CA San Joaquin Hills Transportation
Corridor Agency, Series 1993,
(a) 01/01/23 5,250,000 1,721,895
CA State, Series 1995,
5.750% 03/01/19 1,930,000 2,122,325
See notes to investment portfolio.
3
MUNICIPAL BONDS - 98.3% (continued) PAR VALUE
------------ ------------
CA State Educational Facilities Authority,
Santa Clara University, Series 1996,
5.000% 09/01/15 $ 800,000 $ 889,368
CO Denver City and County Airport,
Series 1992 B,
7.250% 11/15/23 205,000 213,993
DE State Economic Development Authority,
Riverside Hospital, Series 1992 A,
9.500% 01/01/22 215,000 246,530
MN Mille Lacs Capital Improvement Authority,
Mille Lacs Band of Chippewa,
Series 1992 A,
9.250% 11/01/12 210,000 222,298
NC Lincoln County, Lincoln County Hospital,
9.000% 05/01/07 105,000 122,063
NC State Municipal Power Agency,
Catawba No. 1, Series 1986,
5.000% 01/02/20 1,670,000 1,697,355
TN Shelby County, Health, Education
& Housing Facilities Board, Open Arms
Development Center:
Series 1992 A,
9.750% 08/01/19 435,000 554,625
Series 1992 C,
9.750% 08/01/19 435,000 554,625
------------
8,998,721
------------
--------------------------------------------------------------------------------
OTHER REVENUE - 0.8%
RECREATION - 0.8%
DC District of Columbia,
Smithsonian Institute, Series 1997,
5.000% 02/01/28 1,000,000 954,600
FL Capital Trust Agency,
Seminole Tribe Convention Center,
Series 2002 A,
10.000% 10/01/33 500,000 498,750
------------
1,453,350
------------
--------------------------------------------------------------------------------
RESOURCE RECOVERY - 1.2%
DISPOSAL - 1.2%
IL Development Finance Authority,
Waste Management, Inc., Series 1997,
5.050% 01/01/10 500,000 477,375
MA State Industrial Finance Agency,
Peabody Monofill Associates, Inc.,
Ogden Haverhill Project:
Series 1995,
9.000% 09/01/05 145,000 152,794
Series 1998 A,
5.450% 12/01/12 1,250,000 1,038,100
MI State Strategic Fund, United Waste
Systems, Inc., Series 1995,
5.200% 04/01/10 $ 500,000 $ 484,495
------------
2,152,764
------------
--------------------------------------------------------------------------------
TAX-BACKED - 39.2%
LOCAL APPROPRIATED - 1.6%
MN Hibbing Economic Development
Authority,
6.400% 02/01/12 335,000 340,444
MO St. Louis Industrial Development
Authority, St. Louis Convention Center,
Series 2000,
(a) 07/15/18 300,000 131,535
TX Houston Independent School District,
Public Facilities Corp., Series 1998 A,
(a) 09/15/13 2,500,000 1,444,275
TX Houston, Series 2000,
6.400% 06/01/27 1,000,000 1,104,040
------------
3,020,294
------------
LOCAL GENERAL OBLIGATIONS - 17.8%
AK North Slope Borough, Series 2001 A,
(a) 06/30/12 2,000,000 1,231,420
CA Carlsbad Unified School District,
(a) 05/01/22 2,730,000 914,031
CA Las Virenes Unified School District,
Series 2001 C,
(a) 11/01/22 1,210,000 394,145
CA Los Angeles County,
Series 1999 A,
(a) 08/01/21 2,135,000 746,844
CA Modesto High School District,
Stanislaus County, Capital Appreciation,
Series 2002 A,
(a) 08/01/19 1,350,000 545,400
CA West Contra Costa Unified School District,
Series 2001 B,
6.000% 08/01/24 250,000 283,610
CO El Paso County School District No. 11,
Colorado Springs, Series 1996,
7.125% 12/01/19 1,870,000 2,366,672
CO Highlands Ranch Metropolitan District,
Series 1996,
6.500% 06/15/11 1,375,000 1,619,860
IL Chicago:
Series 1995 A-2,
6.250% 01/01/14 1,480,000 1,710,303
Series 1999,
5.500% 01/01/23 1,000,000 1,054,500
Series 2001 A,
(a) 01/01/15 3,000,000 1,584,060
See notes to investment portfolio.
4
MUNICIPAL BONDS - 98.3% (continued) PAR VALUE
------------ ------------
IL Chicago Board of Education,
Series 1998 B-1:
(a) 12/01/11 $ 1,000,000 $ 640,790
(a) 12/01/21 2,000,000 671,480
IL St. Clair County, Series 1999,
(a) 10/01/16 2,000,000 956,900
IL St. Clair County Public Building
Commission,
(a) 12/01/13 2,000,000 1,148,760
IL Will County School District No. 17,
Series 2001,
8.500% 12/01/15 1,400,000 1,921,374
MI Chippewa Valley Schools, Series 1998,
4.750% 05/01/23 2,000,000 1,873,380
MI Garden City School District, Series 2001,
5.500% 05/01/16 325,000 345,940
MI St. Johns Public School, Series 1998,
5.100% 05/01/25 1,000,000 1,001,300
NY New York City, Series 1997 A,
7.000% 08/01/07 2,000,000 2,300,940
OH Olmsted Falls School District,
Series 1999,
5.500% 12/01/02 380,000 386,627
PA Erie, Series 2001 C,
(a) 11/15/26 2,000,000 513,220
TX Brenham, Certificates of Obligation,
Series 2001,
5.375% 08/15/16 1,040,000 1,092,686
TX Houston Independent School District,
Series 1999 A,
4.750% 02/15/22 5,000,000 4,665,850
TX Hurst Euless Bedford Independent
School District, Series 1998,
4.500% 08/15/25 2,500,000 2,189,175
TX La Joya Independent School District,
Series 1998,
5.500% 02/15/12 1,000,000 1,060,590
------------
33,219,857
------------
SPECIAL NON-PROPERTY TAX - 4.7%
CA San Diego Redevelopment Agency,
Capital Appreciation Tax Allocation Center,
Series 2001,
(a) 09/01/21 3,725,000 1,296,114
CT State Special Tax Obligation
Infrastructure, Series 2001 A,
5.375% 10/01/16 500,000 530,270
FL Tampa Sports Authority,
Tampa Bay Arena Project, Series 1995,
5.750% 10/01/25 1,000,000 1,096,690
NM Dona Ana County, Series 1998,
5.500% 06/01/15 $ 1,000,000 $ 1,091,430
NY New York City Transitional Finance
Authority, Series 1998 C,
4.750% 05/01/23 2,000,000 1,857,080
NY State Local Government Assistance
Corp., Series 1993 E,
5.000% 04/01/21 3,000,000 3,014,370
------------
8,885,954
------------
SPECIAL PROPERTY TAX - 0.4%
CA Contra Costa County Public Financing
Authority, Series 1992 A,
7.100% 08/01/22 365,000 373,004
CA Huntington Beach Community Facilities
District, Grand Coast Resort, Series 2001,
6.450% 09/01/31 300,000 302,625
FL Lexington Oaks Community
Development District, Series 1998 B,
5.500% 05/01/05 20,000 20,075
------------
695,704
------------
STATE APPROPRIATED - 8.3%
IN State Office Building Commission,
Women's Prison, Series 1995 B,
6.250% 07/01/16 2,820,000 3,279,124
KY State Property & Buildings Commission,
Project No. 73, Series 2001,
5.500% 11/01/14 455,000 492,501
NY New York State Dormitory Authority:
City University, Series 1993 A,
5.750% 07/01/18 5,000,000 5,581,650
Mental Health Services:
Series 1998 C,
5.000% 02/15/11 1,485,000 1,556,443
Series 2000 C,
5.750% 05/15/17 1,000,000 1,121,030
NY State Urban Development Corp.,
5.600% 04/01/15 1,000,000 1,103,200
UT State Building Ownership Authority,
Facilities Master Lease,
Series 1998 C,
5.500% 05/15/19 1,750,000 1,878,310
WV State Building Commission,
Series 1998 A,
5.375% 07/01/18 500,000 530,890
------------
15,543,148
------------
STATE GENERAL OBLIGATIONS - 6.4%
CA State, Series 1995,
5.750% 03/01/19 70,000 72,193
DC District of Columbia,
Series 1999 A,
5.375% 06/01/18 1,250,000 1,318,412
See notes to investment portfolio.
5
MUNICIPAL BONDS - 98.3% (continued) PAR VALUE
------------ ------------
MA State, Series 1998 C,
5.250% 08/01/17 $ 1,000,000 $ 1,063,590
NJ State, Series 2001,
5.250% 07/01/16 2,000,000 2,133,580
PR Commonwealth of Puerto Rico:
Aqueduct & Sewer Authority:
6.250% 07/01/12 1,000,000 1,176,970
6.250% 07/01/13 750,000 887,295
Series 2001,
5.500% 07/01/17 1,000,000 1,103,980
TX State, Series 1999 ABC,
5.500% 08/01/35 2,000,000 2,030,820
WA State, Series 1998 A,
4.500% 07/01/23 2,340,000 2,098,723
------------
11,885,563
------------
--------------------------------------------------------------------------------
TRANSPORTATION - 12.5%
Air Transportation - 1.8%
CA Los Angeles Regional Airport
Improvement Corp., Series 2002 C,
7.500% 12/01/24 750,000 731,250
IL Chicago O'Hare International Airport,
United Airlines, Inc., Series 2000 A,
6.750% 11/01/11 800,000 414,000
KY Kenton County Airport Board,
Delta Airlines, Inc., Series 1992 A,
7.500% 02/01/20 200,000 198,964
MN Minneapolis & St. Paul Metropolitan
Airport Commission, Northwest
Airlines, Inc., Series 2001 A,
7.000% 04/01/25 350,000 314,125
NC Charlotte, US Airways, Inc.:
Series 1998,
5.600% 07/01/27 500,000 253,125
Series 2000,
7.750% 02/01/28 500,000 273,125
NY Port Authority of New York &
New Jersey, JFK International Air Terminal,
Series 1997 6,
6.250% 12/01/08 1,000,000 1,128,950
------------
3,313,539
------------
Airports - 2.9%
CO Denver City & County Airport:
Series 1997 E,
5.250% 11/15/23 110,000 110,131
Series 1997 B,
7.250% 11/15/23 795,000 824,161
MA State Port Authority:
Series 1998 D,
5.000% 07/01/28 $ 2,500,000 $ 2,400,675
Series 1999,
9.640% 07/01/29 (e) 1,000,000 1,092,180
MN Minneapolis-St. Paul Metropolitan
Airport Commission, Series 1998 13,
5.250% 01/01/13 1,000,000 1,044,510
------------
5,471,657
------------
Ports - 0.9%
FL Gulf Breeze, Series 1998 B,
4.500% 10/01/27 2,000,000 1,785,620
------------
Toll Facilities - 4.8%
CA Foothill/Eastern Transportation
Corridor Agency, Series 1995 A,
5.000% 01/01/35 1,000,000 903,630
CA San Joaquin Hills Transportation
Corridor Agency, Series 1997 A,
(a) 01/15/15 2,000,000 1,080,240
CO State Public Highway Authority,
E-470, Series 1997 B,
(a) 09/01/11 2,000,000 1,304,920
MA State Turnpike Authority,
Series 1999 A:
4.750% 01/01/34 1,850,000 1,666,036
5.000% 01/01/39 2,000,000 1,875,880
NH State Turnpike Systems, Series 1991 C,
IFRN (variable rate),
11.870% 11/01/17 1,000,000 1,273,480
PA State Turnpike Commission,
Oil Franchise Tax Revenue,
Series 1998 A,
4.750% 12/01/27 1,000,000 923,040
------------
9,027,226
------------
TRANSPORTATION - 2.1%
CA San Mateo County Transportation
District, Series 1998 A,
4.500% 06/01/18 1,000,000 962,430
IL Regional Transportation Authority,
Series 1994 C,
7.750% 06/01/20 1,000,000 1,333,950
NV State Department of Business & Industry,
Las Vegas Monorail Project,
Series 2000:
7.375% 01/01/40 250,000 243,125
7.380% 01/20/30 250,000 245,000
OH Toledo-Lucas County Port Authority,
CSX Transportation, Inc., Series 1992,
6.450% 12/15/21 1,000,000 1,056,680
------------
3,841,185
------------
See notes to investment portfolio.
6
MUNICIPAL BONDS - 98.3% (continued) PAR VALUE
------------ ------------
UTILITY - 13.5%
INDEPENDENT POWER PRODUCER - 0.6%
MI Midland County Economic
Development Corp., series 2000,
6.875% 07/23/09 $ 500,000 $ 519,375
NY New York City Industrial Development
Agency, Brooklyn Navy Yard Partners,
Series 1997,
5.650% 10/01/28 200,000 195,036
PR Commonwealth of Puerto Rico Industrial,
Educational, Medical & Environmental
Cogeneration Facilities, AES Project,
Series 2000,
6.625% 06/01/26 325,000 336,684
------------
1,051,095
------------
Investor Owned - 5.1%
IN Petersburg, Indiana Power & Light Co.,
Series 1993 B,
5.400% 08/01/17 3,000,000 3,202,170
MI State Strategic Fund, Detroit Edison Co.,
Series 1998 A,
5.550% 09/01/29 3,000,000 3,033,900
MS State Business Finance Corp., Systems
Energy Resources Project, Series 1998,
5.875% 04/01/22 1,000,000 957,500
TX Brazos River Authority, Pollution Control,
Series 2001,
5.750% 05/01/36 500,000 501,885
TX Matagorda County Navigation
District No. 1, Houston Light &
Power Co., Series 1997,
5.125% 11/01/28 2,000,000 1,899,260
------------
9,594,715
------------
JOINT POWER AUTHORITY - 2.4%
IN State Municipal Power Agency,
Series 1993 B
6.000% 01/01/12 2,000,000 2,262,980
MA Municipal Wholesale Electric Co.,
Power Supply System, Project 6-A,
5.250% 07/01/14 1,000,000 1,054,800
NC State Municipal Power Agency,
Catawba Electric No. 1, Series 1998 A,
5.500% 01/01/15 640,000 695,174
OH Municipal Electricity Generation Agency,
Series 2001:
(a) 02/15/25 1,000,000 294,320
(a) 02/15/30 1,000,000 221,810
------------
4,529,084
------------
MUNICIPAL ELECTRIC - 1.3%
NC University of North Carolina at
Chapel Hill,
(a) 08/01/14 1,000,000 554,230
NE Public Power District, Series 1998 A,
5.250% 01/01/11 $ 500,000 $ 531,115
TN Metropolitan Government, Nashville
& Davidson Counties, Series 1996 A,
(a) 05/15/09 1,825,000 1,359,370
------------
2,444,715
------------
WATER & SEWER - 4.1%
GA Atlanta, Series 1993,
5.500% 11/01/22 (g) 1,000,000 1,070,120
MA State Water Resources Authority:
Series 1998 A,
4.750% 08/01/27 3,000,000 2,769,570
Series 1998 B,
4.500% 08/01/22 500,000 455,515
MS Five Lakes Utility District,
8.250% 07/15/24 140,000 129,675
NY NYC Municipal Water Finance Authority,
Water & Sewer System,
Capital Appreciation, Series 1998 D,
(a) 06/15/20 3,900,000 1,544,868
WA King County, Series 1999,
5.250% 01/01/30 1,750,000 1,719,883
------------
7,689,631
------------
TOTAL MUNICIPAL BONDS
(cost of $176,927,914) 183,686,989
------------
MUNICIPAL PREFERRED STOCK - 0.3% SHARES
------------
HOUSING - 0.3%
MULTI-FAMILY - 0.3%
Charter Mac Equity Issue Trust,
7.600% 11/30/50 500,000 531,875
------------
(cost of $500,000) (h)
SHORT-TERM OBLIGATIONS - 0.3% PAR
------------
VARIABLE RATE DEMAND NOTES (i) - 0.3%
IA State Higher Education Loan Authority,
St. Ambrose University, Series 1999,
1.150% 10/01/09 $ 300,000 300,000
MN Maple Grove, Multifamily Revenue,
Series 1991 B,
1.100% 11/01/17 200,000 200,000
MN Minneapolis, Convention Center,
Series 2000,
1.000% 12/01/18 100,000 100,000
------------
TOTAL SHORT-TERM OBLIGATIONS
(cost of $600,000) 600,000
------------
TOTAL INVESTMENTS - 98.9%
(cost of $178,027,914) (j) 184,818,864
------------
OTHER ASSETS & LIABILITIES, NET - 1.1% 1,993,681
------------
NET ASSETS* - 100.0% $186,812,545
------------
See notes to investment portfolio.
7
NOTES TO INVESTMENT PORTFOLIO:
(a) Zero coupon bond.
(b) Settlement of this security is on a delayed delivery basis.
(c) This issuer is in default of certain debt covenants. Income is not being
fully accrued.
(d) Accrued interest accumulates in the value of the security and is payable at
redemption.
(e) These securities are exempt from registration under Rule 144A of the
Securities Act of 1933 and may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At May 31, 2002,
the value of these securities amounted to $1,679,498, which represented
0.9% of net assets.
(f) The Trust has been informed that each issuer has placed direct obligations
of the U.S. Government in an irrevocable trust, solely for the payment of
principal and interest.
(g) This security, or a portion thereof with a market value of $379,893, is
being used to collateralize open futures contracts.
(h) Denotes a restricted security, which is subject to restrictions on resale
under federal securities laws. At May 31, 2002, this security amounted to
$531,875, which represents 0.3% of net assets.
Additional information on this restricted security is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
-------- ------------ ------------
Charter Mac Equity Issue Trust,
7.600%, 11/30/50 07/06/00 $ 500,000
(i) Variable rate demand notes are considered short-term obligations. Interest
rates change periodically on specified dates. These securities are payable
on demand and are secured by either letters of credit or other credit
support agreements from banks. The rates listed are as of May 31, 2002.
(j) Cost for generally accepted accounting principles is $178,027,914. Cost for
federal income tax purposes is $177,823,697. The difference between cost
for generally accepted accounting principles and cost on a tax basis is
related to amortization/accretion tax elections on fixed income securities.
Short futures contracts open at May 31, 2002:
PAR VALUE UNREALIZED
COVERED BY EXPIRATION APPRECIATION
TYPE CONTRACTS MONTH (DEPRECIATION)
---- ---------- ---------- -------------
Municipal Bond Index $5,700,000 September $ (17,524)
10 Year U.S. Treasury Note 7,200,000 September (51,848)
30 Year U.S. Treasury Bond 6,700,000 September 21,865
------------
$ (47,507)
------------
ACRONYM NAME
------- --------------------------
IFRN Inverse Floating Rate Note
* Net assets represent both Common Shares and Auction Preferred Shares.
See notes to financial statements.
8
STATEMENT OF ASSETS AND LIABILITIES
May 31, (Unaudited)
ASSETS:
Investments, at cost $ 178,027,914
--------------
Investments, at value $ 184,818,864
Receivable for:
Investments sold 711,664
Interest 2,906,973
Futures variation margin 19,971
Deferred Trustees' compensation plan 5,480
--------------
Total Assets 188,462,952
--------------
LIABILITIES:
Payable due to custodian bank 705,545
Payable for:
Investments purchased on a delayed delivery
basis 146,006
Distributions -- common shares 644,504
Distributions -- preferred shares 10,878
Management fee 101,658
Pricing and bookkeeping fees 9,570
Trustees' fee 13
Deferred Trustees' fee 5,480
Other liabilities 26,753
--------------
Total Liabilities 1,650,407
--------------
Auction Preferred Shares (2,400 shares issued and
outstanding at $25,000 per share) 60,000,000
--------------
COMPOSITION OF NET ASSETS APPLICABLE TO
COMMON SHARES:
Paid-in capital -- common shares $ 126,993,094
Undistributed net investment income 381,940
Accumulated net realized loss (7,305,932)
Net unrealized appreciation (depreciation) on:
Investments 6,790,950
Futures contracts (47,507)
--------------
Net assets at value applicable to 11,509,000
common shares of beneficial interest
outstanding $ 126,812,545
==============
Net asset value per common share $ 11.02
==============
STATEMENTS OF OPERATIONS
Fot the six Months Ended May 31, 2002 (Unaudited)
INVESTMENT INCOME:
Interest $ 5,295,823
--------------
EXPENSES:
Management fee 601,524
Pricing and bookkeeping fees 47,703
Trustees' fee 6,244
Preferred shares remarketing commissions 74,880
Other expenses 77,855
--------------
Total Expenses 808,206
Custody earnings credit (509)
--------------
Net Expenses 807,697
--------------
Net Investment Income 4,488,126
--------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND FUTURES
CONTRACTS:
Net realized gain (loss) on:
Investments (321,916)
Futures contracts 392,809
--------------
Net realized gain 70,893
--------------
Net change in unrealized appreciation/
depreciation on:
Investments (208,036)
Futures contracts (491,602)
--------------
Net change in unrealized
appreciation/depreciation (699,638)
--------------
Net Loss (628,745)
--------------
Net Increase in Net Assets from Operations 3,859,381
--------------
LESS DISTRIBUTIONS DECLARED TO
PREFERRED SHAREHOLDERS:
From net investment income (453,005)
--------------
Increase in Net Assets from Operations
Applicable to Common Shares $ 3,406,376
--------------
See notes to financial statements.
9
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
SIX MONTHS
ENDED YEAR ENDED
MAY 31, NOVEMBER 30,
INCREASE (DECREASE) IN NET ASSETS: 2002 2001
---------------------------------- -------------- --------------
OPERATIONS:
Net investment income $ 4,488,126 $ 8,682,715
Net realized gain on investments and futures contracts 70,893 1,614,053
Net change in unrealized appreciation/depreciation on investments and
futures contracts (699,638) 4,304,408
------------- -------------
Net Increase from Operations 3,859,381 14,601,176
------------- -------------
LESS DISTRIBUTIONS DECLARED TO PREFERRED SHAREHOLDERS:
From net investment income (453,005) (1,811,142)
------------- -------------
Increase in Net Assets from Operations Applicable to Common Shares 3,406,376 12,790,034
------------- -------------
LESS DISTRIBUTIONS DECLARED TO COMMON SHAREHOLDERS:
From net investment income (3,867,024) (6,882,385)
------------- -------------
Total Increase (Decrease) in Net Assets Applicable to Common Shares (460,648) 5,907,649
------------- -------------
NET ASSETS APPLICABLE TO COMMON SHARES:
Beginning of period 127,273,193 121,365,544
------------- -------------
End of period (including undistributed net investment income of $381,940 and
$44,867, respectively) $ 126,812,545 $ 127,273,193
============= =============
NUMBER OF FUND SHARES:
Common Shares:
Outstanding at end of period 11,509,000 11,509,000
------------- -------------
Preferred Shares:
Outstanding at end of period 2,400 2,400
------------- -------------
See notes to financial statements.
10
NOTES TO FINANCIAL STATEMENTS
May 31, 2002 (Unaudited)
NOTE 1. ACCOUNTING POLICIES
ORGANIZATION:
Colonial Investment Grade Municipal Trust (the "Trust"), is a Massachusetts
business trust registered under the Investment Company Act of 1940 (the "Act"),
as amended, as a diversified, closed-end, management investment company. The
Trust's investment goal is to seek as high a level of after-tax total return as
is consistent with prudent risk, by pursuing current income generally exempt
from ordinary federal income tax and opportunities for long-term appreciation
from a portfolio primarily invested in investment grade municipal bonds. The
Trust is authorized to issue an unlimited number of common shares of beneficial
interest and 2,400 Auction Preferred Shares ("APS").
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Trust in the
preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS:
Debt securities generally are valued by a pricing service based upon market
transactions for normal, institutional-size trading units of similar securities.
When management deems it appropriate, an over-the-counter or exchange bid
quotation is used.
Options are valued at the last reported sale price, or in the absence of a sale,
the mean between last quoted bid and asking price.
Futures contracts are valued based on the difference between the last sale price
and the opening price of the contract.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
Investments for which market quotations are not readily available are valued at
fair value under procedures approved by the Board of Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains (losses) are based upon the specific identification
method for both financial statement and federal income tax purposes.
The Trust may trade securities on other than normal settlement terms. This may
increase the risk if the other party to the transaction fails to deliver and
causes the Trust to subsequently invest at less advantageous prices.
FEDERAL INCOME TAXES:
Consistent with the Trust's policy to qualify as a regulated investment company
and to distribute all of its taxable and tax-exempt income, no federal income
tax has been accrued.
At November 30, 2001, capital loss carryforwards available (to the extent
provided in regulations) to offset future realized gains were as follows:
YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD
------------------ -------------------------
2003 $ 172,808
2004 1,454,485
2008 3,464,384
-----------
$ 5,091,677
===========
Expired capital loss carryforwards, if any, are recorded as a reduction of
paid-in capital.
INTEREST INCOME, DEBT DISCOUNT AND PREMIUM:
Interest income is recorded on the accrual basis. Original issue discount is
accreted to interest income over the life of the security with a corresponding
increase in the cost basis. Premium is amortized against interest income with a
corresponding decrease in the cost basis.
Effective December 1, 2001, the Trust adopted the provisions of the AICPA Audit
and Accounting Guide for Investment Companies and began accreting discount on
all debt securities. The cumulative effect of this accounting change did not
impact total net assets, but resulted in a $168,976 increase in cost of
securities and a corresponding $168,976 decrease in net unrealized appreciation,
based on securities held by the Trust on December 1, 2001.
The effect of this change for the six months ended May 31, 2002 was to increase
net investment income by $36,781, decrease net unrealized appreciation by
$35,241, and increase net realized loss by $1,540. The Statement of Changes in
Net Assets and the Financial Highlights for prior periods have not been restated
to reflect this change.
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions to common shareholders are recorded on the ex-date.
The amount and character of income and gains to be distributed are determined in
accordance with income tax regulations, which may differ from generally accepted
accounting principles. Reclassifications are made to the Trust's capital
accounts to reflect income and gains available for distribution (or available
capital loss carryforwards) under income tax regulations.
Distributions to preferred shareholders are recorded daily and are payable at
the end of each dividend period. Each dividend payment period for the APS is
generally seven days. The applicable dividend rate for the APS on May 31, 2002
was 1.60%. For the six months ended May 31, 2002, the Trust declared dividends
to Auction Preferred shareholders amounting to $453,005 representing an average
APS dividend rate for such period of 1.52%.
NOTE 2. FEE AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE:
Colonial Management Associates, Inc. (the "Advisor") is the investment advisor
of the Trust and furnishes accounting and other services and office facilities
for a monthly fee equal to 0.65% annually of the Trust's average weekly net
assets.
11
BOOKKEEPING FEE:
The Advisor is responsible for providing pricing and bookkeeping services to the
Trust under a Pricing and Bookkeeping Agreement. Under a separate agreement (the
"Outsourcing Agreement"), the Advisor has delegated those functions to State
Street Bank and Trust Company ("State Street"). The Advisor pays fees to State
Street under the Outsourcing Agreement.
Under its pricing and bookkeeping agreement with the Trust, the Advisor receives
from the Trust an annual flat fee of $10,000, paid monthly, and in any month
that the Trust's average weekly net assets are more than $50 million, a monthly
fee equal to the average weekly net assets of the Trust for that month
multiplied by a fee rate that is calculated by taking into account the fees
payable to State Street under the Outsourcing Agreement.
OTHER:
The Trust pays no compensation to its officers, all of whom are employees of the
Advisor or its affiliates.
The Trust's Independent Trustees may participate in a deferred compensation plan
which may be terminated at any time. Obligations of the plan will be paid solely
out of the Trust's assets.
The Trust has an agreement with its custodian bank under which $509 of custody
fees were reduced by balance credits for the six months ended May 31, 2002. The
Trust could have invested a portion of the assets utilized in connection with
the expense offset arrangement in an income-producing asset if it had not
entered into such an agreement.
NOTE 3. PREFERRED SHARE OFFERING
The Trust currently has outstanding 2,400 APS. The APS are redeemable at the
option of the Trust on any dividend payment date at the redemption price of
$25,000 per share, plus an amount equal to any dividends accumulated on a daily
basis unpaid through the redemption date (whether or not such dividends have
been declared).
Under the Act, the Trust is required to maintain asset coverage of at least 200%
with respect to the APS as of the last business day of each month in which any
APS are outstanding. Additionally, the Trust is required to meet more stringent
asset coverage requirements under the terms of the APS and in accordance with
the guidelines prescribed by the rating agencies. Should these requirements not
be met, or should dividends accrued on the APS not be paid, the Trust may be
restricted in its ability to declare dividends to common shareholders or may be
required to redeem certain of the APS. At May 31, 2002, there were no such
restrictions on the Trust.
Certain reclassifications have been made relating to the presentation of the APS
in the Statement of Changes in Net Assets for the year ending November 30, 2001
and the financial highlights for the year ending November 30, 2001 and 2000 to
conform to current requirements.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY:
During the six months ended May 31, 2002, purchases and sales of investments,
other than short-term obligations, were $4,838,991 and $6,020,190, respectively.
Unrealized appreciation (depreciation) at May 31, 2002, based on cost of
investments for federal income tax purposes, was:
Gross unrealized appreciation $ 11,725,342
Gross unrealized depreciation (4,730,175)
-------------
Net unrealized appreciation $ 6,995,167
=============
OTHER:
The Trust had greater than 10% of its net assets at May 31, 2002, invested in
New York, Texas and Massachusetts, collectively.
There are certain risks arising from geographic concentration in any state.
Certain revenue or tax related events in a state may impair the ability of
certain issuers of municipal securities to pay principal and interest on their
obligations.
The Trust may focus its investments in certain industries, subjecting it to
greater risk than a trust that is more diversified.
The Trust may invest in municipal and Treasury bond futures contracts and
purchase and write options on futures. The Trust may invest in these instruments
to hedge against the effects of changes in the value of portfolio securities due
to anticipated changes in interest rates and/or market conditions, for duration
management, or when the transactions are economically appropriate to the
reduction of risk inherent in the management of the Trust and not for trading
purposes. The use of futures contracts and options involves certain risks, which
include (1) imperfect correlation between the price movement of the instruments
and the underlying securities, (2) inability to close out positions due to
different trading hours, or the temporary absence of a liquid market, for either
the instrument or the underlying securities or (3) an inaccurate prediction by
the Advisor of the future direction of interest rates. Any of these risks may
involve amounts exceeding the amount recognized in the Trust's Statement of
Assets and Liabilities at any given time.
Upon entering into a futures contract, the Trust deposits cash or securities
with its custodian in an amount sufficient to meet the initial margin
requirement. Subsequent payments are made or received by the Trust equal to the
daily change in the contract value and are recorded as variation margin payable
or receivable and offset in unrealized gains or losses. The Trust recognizes a
realized gain or loss when the contract is closed or expires. Refer to the
Trust's Investment Portfolio for a summary of open futures contracts at May 31,
2002.
12
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each period is as follows
(common shares unless otherwise noted):
(UNAUDITED) PERIOD
SIX MONTHS ENDED YEAR ENDED NOVEMBER 30, ENDED
MAY 31, ---------------------------- NOVEMBER 30,
2002 2001 2000 1999(a)
---------------- ----------- ----------- ------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.06 $ 10.55 $ 10.31 $ 11.49
---------------- ----------- ----------- ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.35(b)(c) 0.75(c) 0.81(d) 0.58
Net realized and unrealized gain (loss) on
investments and futures contracts (0.01)(b) 0.52 0.27 (1.12)
---------------- ----------- ----------- ------------
Total from Investment Operations 0.34 1.27 1.08 (0.54)
---------------- ----------- ----------- ------------
LESS DISTRIBUTIONS DECLARED TO
PREFERRED SHAREHOLDERS:
From net investment income (0.04) (0.16) (0.22) (0.05)
---------------- ----------- ----------- ------------
Total from Investment Operations Applicable
to Common Shareholders 0.30 1.11 0.86 (0.59)
---------------- ----------- ----------- ------------
LESS DISTRIBUTIONS DECLARED TO
COMMON SHAREHOLDERS:
From net investment income (0.34) (0.60) (0.60) (0.52)
In excess of net investment income -- -- -- --
---------------- ----------- ----------- ------------
Total Distributions Declared to
Common Shareholders (0.34) (0.60) (0.60) (0.52)
---------------- ----------- ----------- ------------
LESS CAPITAL TRANSACTIONS:
Commissions and offering costs -- preferred shares -- -- (0.02) (0.07)
---------------- ----------- ----------- ------------
NET ASSET VALUE, END OF PERIOD $ 11.02 $ 11.06 $ 10.55 $ 10.31
================ =========== =========== ============
Market price per share -- common shares $ 10.44 $ 10.87 $ 8.92 $ 9.06
================ =========== =========== ============
Total return -- based on market value
-- common shares (f) (0.83)%(g) 29.28% 5.20% (14.64)%(g)
================ =========== =========== ============
RATIOS TO AVERAGE NET ASSETS:
Expenses (h)(i) 1.27%(j) 1.28% 1.31% 1.03%(j)
Net investment income (h)(i) 7.17%(b)(j) 6.80% 7.91% 5.75%(j)
Net investment income (h)(i) 6.45%(b)(j)(k) 5.38%(k) 5.80%(k) 5.26%(j)(k)
Portfolio turnover rate 3%(g) 31% 23% 25%(g)
Net assets, end of period (000's) -- common shares $ 126,813 $ 127,273 $ 121,366 $ 118,660
YEAR ENDED DECEMBER 31, 1998
-----------------------------------------------
1998 1997 1996
------------- ------------- -------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.43 $ 10.87 $ 11.05
------------ ------------ -------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.60 0.62 0.63
Net realized and unrealized gain (loss) on
investments and futures contracts 0.07 0.58 (0.19)
------------ ------------ -------------
Total from Investment Operations 0.67 1.20 0.44
------------ ------------ -------------
LESS DISTRIBUTIONS DECLARED TO
PREFERRED SHAREHOLDERS:
From net investment income -- -- --
------------ ------------ -------------
Total from Investment Operations Applicable
to Common Shareholders 0.67 1.20 0.44
------------ ------------ -------------
LESS DISTRIBUTIONS DECLARED TO
COMMON SHAREHOLDERS:
From net investment income (0.61) (0.64) (0.62)
In excess of net investment income --(e) -- --
------------ ------------ -------------
Total Distributions Declared to
Common Shareholders (0.61) (0.64) (0.62)
------------ ------------ -------------
LESS CAPITAL TRANSACTIONS:
Commissions and offering costs -- preferred shares -- -- --
------------ ------------ -------------
NET ASSET VALUE, END OF PERIOD $ 11.49 $ 11.43 $ 10.87
============ ============ =============
Market price per share -- common shares $ 11.19 $ 10.56 $ 10.13
============ ============ =============
Total return -- based on market value
-- common shares (f) 11.94% 10.76% 9.06%
============ ============ =============
RATIOS TO AVERAGE NET ASSETS:
Expenses (h)(i) 0.77% 0.83% 0.88%
Net investment income (h)(i) 5.24% 5.63% 5.80%
Net investment income (h)(i) 5.24% 5.63% 5.80%
Portfolio turnover rate 24% 21% 20%
Net assets, end of period (000's) -- common shares $ 132,242 $ 131,503 $ 125,125
(a) The Trust changed its fiscal year end from December 31 to November 30.
(b) Effective December 1, 2001, the Trust adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began accreting
discount on all debt securities. The effect of this change, for the six
months ended May 31, 2002, was to increase the ratio of net investment
income to average net assets from 7.11% to 7.17% and increase the ratio of
net investment income (adjusted for dividend payments to preferred
shareholders) from 6.39% to 6.45%. The impact to net investment income and
net realized and unrealized loss per share was less than $0.01. Per share
data and ratios for periods prior to May 31, 2002 have not been restated to
reflect this change in presentation.
(c) Per share data was calculated using average shares outstanding during the
period.
(d) The per share net investment income amount does not reflect the period's
reclassification of differences between book and tax basis net investment
income.
(e) Rounds to less than $0.01 per share.
(f) Total return at market value assuming all distributions reinvested at prices
calculated in accordance with the Dividend Reinvestment Plan.
(g) Not annualized.
(h) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had no impact.
(i) Ratios reflect average net assets available to common shares only.
(j) Annualized.
(k) Ratios reflect reduction for dividend payments to preferred shareholders.
13
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1995 1994 1993 1992
----------- ------------ ------------ ------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.93 $ 11.05 $ 10.96 $ 11.09
----------- ------------ ------------ -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.64 0.67 0.79 0.85
Net realized and unrealized gain (loss) on investments
and futures contracts 1.11 (1.12) 0.09 (0.13)
----------- ------------ ------------ -----------
Total Income from Investment Operations 1.75 (0.45) 0.88 0.72
----------- ------------ ------------ -----------
LESS DISTRIBUTIONS DECLARED TO COMMON SHAREHOLDERS:
From net investment income (0.63) (0.67) (0.79) (0.85)
----------- ------------ ------------ -----------
NET ASSET VALUE, END OF PERIOD $ 11.05 $ 9.93 $ 11.05 $ 10.96
----------- ------------ ------------ -----------
Market price per share -- common shares $ 9.88 $ 9.25 $ 10.75 $ 11.75
=========== ============ ============ ===========
Total return -- based on market value -- common shares (a) 13.87% (8.12)% (2.16)% 7.43%
=========== ============ ============ ===========
RATIOS TO AVERAGE NET ASSETS:
Expenses (b) 1.08% 0.94% 0.87% 0.86%
Net investment income (b) 6.08% 6.46% 7.08% 7.76%
Portfolio turnover rate 37% 34% 35% 18%
Net assets, end of period (000's) -- common shares $ 127,118 $ 114,260 $ 127,213 $ 126,169
(a) Total return at market value assuming all distributions reinvested at prices
calculated in accordance with the Dividend Reinvestment Plan.
(b) The benefits derived from custody credits and directed brokerage
arrangements, if applicable, had no impact.
ASSET COVERAGE REQUIREMENTS
INVOLUNTARY
ASSET LIQUIDATING AVERAGE
TOTAL AMOUNT COVERAGE PREFERENCE MARKET VALUE
OUTSTANDING PER SHARE PER SHARE PER SHARE
------------------------------------------------------------------------------------------------
05/31/02* $ 60,000,000 $ 77,839 $ 25,005 $ 25,000
11/30/01 60,000,000 78,030 25,005 25,000
11/30/00 60,000,000 75,569 25,009 25,000
11/30/99** 60,000,000 74,444 25,003 25,000
* Unaudited.
**On August 26, 1999, the Trust began offering Auction Preferred Shares.
14
SHAREHOLDER MEETING RESULTS
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS
On May 22, 2002, the Annual Meeting of Shareholders of the Trust was held to
conduct a vote for or against the approval of the following Items listed on the
Trust's Proxy Statement for said Meeting. On March 1, 2002, the record date for
the Meeting, the Trust had 11,509,000 common shares outstanding. The votes cast
were as follows:
FOR WITHHELD
--- --------
PROPOSAL 1:
ELECTION OF TRUSTEES:
Richard W. Lowry 10,566,451 149,447
William E. Mayer 10,571,193 144,704
Anne-Lee Verville 10,565,568 150,330
On March 1, 2002, the record date for the Meeting, the Trust had 2,400 preferred
shares outstanding. The votes cast were as follows:
FOR WITHHELD
--- --------
PROPOSAL 1:
ELECTION OF TRUSTEES:
Richard W. Lowry 2,045 0
Salvatore Macera 2,045 0
Charles Nelson 2,045 0
Thomas E. Stizel 2,045 0
Anne-Lee Verville 2,045 0
15
DIVIDEND REINVESTMENT PLAN
As a shareholder in the Trust you are eligible to participate in the Dividend
Reinvestment Plan.
The Trust generally distributes net investment income monthly and capital gains
annually. Under the Trust's Dividend Reinvestment Plan (the "Plan") all
distributions will be reinvested automatically in additional shares of the
Trust, unless the shareholder elects to receive cash or the shares are held in
broker or nominee name and a reinvestment service is not provided by the broker
or nominee. All cash distributions will be mailed by check directly to the
record holder by the dividend paying agent.
If the market price of the shares on the distribution payment date is equal to
or greater than the net asset value, Plan participants will be issued shares at
the higher of net asset value or 95% of the market price. The aggregate market
value of the shares may constitute income to shareholders for federal income tax
purposes. However, if the market price of the shares is less than the net asset
value, shares will be bought as soon as practicable (but no more than 30 days
after the distribution, except as may be required to comply with federal
securities laws) in the open market for the accounts of Plan participants. If,
during this purchase period, the market price surpasses the net asset value, the
average per share price paid may exceed the net asset value of the shares,
resulting in the acquisition of fewer shares than if the distribution had been
in newly-issued shares.
All Plan accounts receive written confirmations of all transactions. Shares
purchased under the Plan are held in uncertificated form. Each shareholder's
proxy includes shares purchased pursuant to the Plan. The automatic reinvestment
of distributions does not relieve participants of any income tax payable on the
distributions.
Fees and expenses of the Plan other than brokerage charges are incurred on
shares issued directly by the Trust. Participants will bear a pro-rata share of
brokerage charges incurred on open market purchases.
A Plan participant may terminate his or her participation by written notice to
the Plan agent. The Plan may be amended or terminated on 30 days written notice
to the Plan participants. All correspondence concerning the Plan should be
directed to State Street Bank and Trust Company*, the Plan agent, by mail at
P.O. Box 8200, Boston, MA 02266-8200 or by phone at 1-800-426-5523.
* EquiServe Trust Company, N.A. currently serves as Agent under the Dividend
Reinvestment Plan.
16
TRANSFER AGENT
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Colonial Investment Grade Municipal Trust is:
EquiServe Trust Company, N.A.
150 Royall Street
Canton, MA 02021
1-800-730-6001
The trust mails one shareholder report to each shareholder address. Shareholders
can order additional reports by calling 800-345-6611. In addition,
representatives at that number can provide shareholders information about the
trust.
Financial advisors who want additional information about the trust may speak to
a representative at 800-426-3750.
This report has been prepared for shareholders of Colonial Investment Grade
Municipal Trust.
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST SEMIANNUAL REPORT
130-03/961J-0502(07/02) 02/1219