CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number: 811-07660
The Massachusetts Health & Education Tax-Exempt Trust
(Exact Name of Registrant as Specified in Charter)
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
-----------------------------------------------------------------------
(Address of Principal Executive Offices)
Alan R. Dynner
The Eaton Vance Building, 255 State Street, Boston, Massachusetts 02109
-----------------------------------------------------------------------
(Name and Address of Agent for Services)
(617) 482-8260
-----------------------------------------------------------------------
(Registrants Telephone Number)
December 31, 2003
Date of Fiscal Year End
June 30, 2003
Date of Reporting Period
-----------------------------------------------------------------------
Item 1. Reports to Stockholders
[EATON VANCE LOGO]
[PHOTO: Wall of Educational Institution]
Semiannual Report June 30, 2003
[PHOTO: Highway]
THE
MASSACHUSETTS
HEALTH &
EDUCATION
TAX-EXEMPT
TRUST
[PHOTO: Boston, MA Skyline]
Important Notice Regarding Delivery
of Shareholder Documents
The Securities and Exchange Commission (SEC) permits mutual funds to
deliver only one copy of shareholder documents, including prospectuses,
proxy statements and shareholder reports, to fund investors with
multiple accounts at the same residential or post office box address.
This practice is often called "householding" and it helps eliminate
duplicate mailings to shareholders.
Eaton Vance, or your financial adviser, may household the mailing of
your documents indefinitely unless you instruct Eaton Vance, or your
financial adviser, otherwise.
If you would prefer that your Eaton Vance documents not be householded,
please contact Eaton Vance at 1-800-262-1122, or contact your financial
adviser.
Your instructions that householding not apply to delivery of your Eaton
Vance documents will be effective within 30 days of receipt by Eaton
Vance or your financial adviser.
--------------------------------------------------------------------------
From time to time mutual funds are required to vote proxies related to
the securities held by the funds. The Eaton Vance Funds or their
underlying Portfolios vote proxies according to a set of policies and
procedures approved by the Funds' and Portfolios' Boards. You may obtain
a description of these policies and procedures without charge, upon
request, by calling 1-800-262-1122. This description is also available
on the Securities and Exchange Commission's website at http://www.sec.gov.
--------------------------------------------------------------------------
The Massachusetts Health & Education Tax-Exempt Trust as of June 30, 2003
LETTER TO SHAREHOLDERS
[PHOTO WITH CAPTION "Thomas J. Fetter, President and Trustee"]
In our shareholder reports, we refer frequently to "quality spreads" and
their important role in bond analysis. However, while followed closely
by bond analysts and portfolio managers, this aspect of municipal bond
investing is generally overlooked by individual investors. As part of
our continuing educational series, we thought it might be instructive to
discuss quality spreads and why they constitute a key variable for
investors in the municipal bond market.
Quality spreads: compensation for added credit risk...
The term "quality spread" refers to the difference in yields between
bonds of varying quality but similar maturities. A bond rated BBB, for
example, should have a higher yield than an insured bond rated AAA
because investors who buy lower-quality bonds anticipate being paid for
accepting a higher level of credit risk. That risk premium comes in the
form of higher yields. Spreads are typically stated in basis points, or
1/100's of a percentage point. Thus, a bond yielding 5.00% trades at a
spread of 100 basis points (1.00%) over a bond that yields 4.00%.
Spread fluctuations are influenced by a variety of factors...
Spreads fluctuate with changes in market conditions, with many factors
influencing spread relationships. The quality and type of bond are
primary factors. For example, an insured general obligation rated AAA -
with no credit risk -- will trade at a significantly lower yield than a
BBB-rated industrial bond, which has a significantly higher credit risk.
Naturally, a bond's price will respond to changes that may impact -- for
better or worse -- the underlying fundamentals of an issuer. Remember,
bond yields move in the opposite direction of bond prices.
Another factor that influences spreads is supply. Assuming stable
demand, spreads are likely to widen if the supply for a specific issuer
increases, as the market must now digest a larger volume of bonds.
Similarly, if supply declines, spreads may narrow, as investors may be
willing to pay more for a credit that is increasingly scarce.
Finally, quality spreads may fluctuate with changes in the overall
economy. For example, spreads tend to narrow as the economy strengthens
and the revenue outlook improves. On the other hand, as the economy
slows or enters recession, spreads tend to widen, as investors become
increasingly worried about the direction of the economy and its impact
on bonds with higher credit risk.
Spreads constitute a key factor in investment decisions...
Quality spreads have a profound influence on the investment decisions of
municipal bond portfolio managers. The widening of spreads may suggest a
developing opportunity. If spreads have widened appreciably, the
investor may detect an unusual opportunity in a lower-quality,
higher-yielding bond. Conversely, if lower-quality bonds have
significantly outperformed high-quality bonds over a period, the
resulting narrowing of spreads may signal the need for caution. This
"spread compression" may prompt portfolio managers to upgrade their
portfolios with higher-quality bonds because they are no longer being
adequately compensated for the risk of owning lower-quality bonds.
While quality spreads are a key metric for municipal bond investors,
they represent just one of many factors considered in establishing a
diversified bond portfolio. At Eaton Vance, we realize that complex
markets require intensive research, a need that emphasizes once again
the value of experienced, professional portfolio management.
Sincerely,
/s/ THOMAS J. FETTER
Thomas J. Fetter
President
August 6, 2003
-----------------------------------------------------------------------
Shares of the Trust are not insured by the FDIC and are not deposits or
other obligations of, or guaranteed by, any depository institution.
Shares are subject to investment risks, including possible loss of
principal invested. Yield will change.
-----------------------------------------------------------------------
The views expressed in this report are those of the portfolio manager
and other Trust officers and are current only through the end of the
period of the report as stated on the cover. These views are subject to
change at any time based upon market or other conditions, and Eaton
Vance Management disclaims any responsibility to update such views.
These views may not be relied on as investment advice and, because
investment decisions are based on many factors, may not be relied on as
an indication of trading intent on behalf of any fund.
The Massachusetts Health & Education Tax-Exempt Trust as of June 30, 2003
MANAGEMENT DISCUSSION
The U.S. economy, which has slumped badly in recent years, remained
sluggish in the first half of 2003, although there were sporadic signs
of improvement. A continued decline in interest rates to their lowest
level in 45 years helped fuel rallies in the financial markets. The
conclusion of official hostilities in Iraq and the passage of a Tax Bill
gave investors added confidence. Capital spending remained well below
past recovery rates, although some businesses indicated that they were
starting to commit new investment toward equipment.
While there were signs of spotty growth, the overall economy failed to
gain traction...
The manufacturing sector turned in a mixed showing, characterized by
weak demand. The auto and textile areas registered declines, while
construction and defense-related manufacturing were fairly strong.
Boosted by the lowest mortgage rates in a decade, the construction
sector was fairly strong. Growth was limited to the residential segment,
however, as commercial investment continued to slump. Consumer spending
remained lackluster, despite a modest rebound in retail activity
following the end of official hostilities in Iraq. However, retail sales
were below the levels of a year earlier.
The Federal Reserve maintained an accommodative monetary policy...
Gross Domestic Product expanded 1.4% in the first quarter of 2003,
followed by a 2.4% rise in the second quarter. As the economy struggled,
businesses reported more layoffs in response to still-weak demand. The
nation's unemployment rate climbed to 6.4% in June 2003, the highest
monthly jobless rate since July 1994. Not surprisingly, inflation has
remained quite tame. In fact, many economists have pointed to de-flation
as a more worrisome threat. In that environment, the Federal Reserve has
maintained an accommodative monetary posture. The Federal Funds rate -- a
key short-term interest rate barometer -- stood at 1.00%, at June 30,
2003. Ten-year Treasury bond yields -- which were 5.04% at June 30, 2002
-- declined to 3.49% by June 30, 2003, in response to the tepid economy.
The sharp decline in rates was greeted warmly by investors wary of the
volatile equity markets, although the market gave back some ground as
the period came to a close in June. The Lehman Brothers Municipal Bond
Index had a total return of 3.81% for the six months ended June 30,
2003.1
While Federal tax rates have fallen, state taxes have been on the
rise...
While interest rates remain near historical lows, the likelihood of a
sharp increase in rates in the near term is fairly remote. Core
inflation -- the major nemesis of the bond market -- has been dealt a blow
by a weak economy and, importantly, by the longer-term influence of
global competition. Meanwhile, the rationale for tax-exempt income
remains intact. Even as Federal tax rates have been reduced, state
governments -- most of which have constitutional mandates to balance
their budgets -- have enacted property and income tax increases to make
up for revenue shortfalls. As a result, we believe that municipal bonds
will continue to merit a place in the investment portfolios of
tax-conscious investors.
Trust Information
as of June 30, 2003
Performance 2
-----------------------------------------------------------------------
Average Annual Total Returns (by share price, American Stock Exchange)
-----------------------------------------------------------------------
One Year 8.49%
Five Years 7.30
Life of Fund (7/23/93) 5.78
Average Annual Total Returns (by net asset value)
-----------------------------------------------------------------------
One Year 11.30%
Five Years 6.11
Life of Fund (7/23/93) 6.00
Five Largest Categories 3
-----------------------------------------------------------------------
[The bar chart provides a breakdown by sector of the five largest categories:
Education 39.9%, Insured Hospitals* 21.6%, Escrowed 15.4%, Hospitals 15.0% and
Insured Education* 5.7%]
1 It is not possible to invest directly in an Index.
2 Returns are historical and are calculated by determining the
percentage change in net asset value or share price with all
distributions reinvested.
3 Five Largest Categories account for 97.6% of the Trust's net assets
applicable to common shares, determined by dividing the total market
value of the holdings by the net assets applicable to common shares of
the Trust. Categories are subject to change.
* Private insurance does not remove the risk of loss of principal
associated with this investment due to changes in market conditions.
Past performance is no guarantee of future results. Investment return
and principal value will fluctuate so that shares, when sold, may be
worth more or less than their original cost. Yield will vary.
The Massachusetts Health & Education Tax-Exempt Trust as of June 30, 2003
MANAGEMENT DISCUSSION
[PHOTO WITH CAPTION "Robert B. MacIntosh, Portfolio Manager"]
Management Discussion
-----------------------------------------------------------------------
* The Massachusetts economy struggled in early 2003. Manufacturing of
consumer durables was especially weak, while slow technology sales
reflected slow capital spending. Temporary staffing showed some growth,
as weary employers opted for outsourcing. The Commonwealth's June 2003
unemployment rate was 5.6%, lower than the national rate, but above the
5.3% rate of a year ago.
* Education bonds constituted the Trust's largest sector weighting at
June 30, 2003 and contributed to the Trust's performance, providing
excellent quality in an uncertain economic climate. The Trust's holdings
included issues for some of the Commonwealth's leading private colleges
and universities.
* The Trust made an additional purchase in the hospital sector, focusing
on institutions with improving fundamentals and finances. With the
industry in flux, some hospitals have managed to maintain or increase
market share, benefiting from strategies that highlight in-demand
specialties, such as cardiac care, cancer treatment, dialysis or
rehabilitation services.
* Escrowed bonds once again constituted a significant investment for the
Trust. Pre-refunded and backed by Treasury bonds, escrowed issues
typically provide above-average coupons, are deemed very high quality
and are especially valued by investors in a weak credit environment.
* The Trust generally avoided obligations of the Commonwealth, which may
be subject to downgrades of credit ratings. In addition, management took
advantage of strong retail demand to sell selected coupons and adjust
the overall coupon structure of the Trust.
* Management adjusted coupon structure throughout the period to reflect
the sharp decrease in interest rates. In addition, as the rate decline
increased call risk, management emphasized non-callable bonds and bonds
with favorable call characteristics. The calling of older, higher-coupon
bonds has made call protection an important consideration for investors.
The Trust
-----------------------------------------------------------------------
Performance for the Past Six Months
* Based on share price (traded on the American Stock Exchange), the
Trust had a total return of 12.98% for the six months ended June 30,
2003. That return was the result of an increase in share price from
$13.48 on December 31, 2002 to $14.80 on June 30, 2003, and the
reinvestment of $0.401 in regular monthly dividends.
* Based on net asset value, the Trust had a total return of 5.30% for
the six months ended June 30, 2003. That return was the result of an
increase in net asset value from $13.76 on December 31, 2002 to $14.08
on June 30, 2003, and the reinvestment of all distributions.
* Based on most recent dividend and a share price of $14.80, the Trust
had a market yield of 5.59% at June 30, 2003.1 The Trust's market yield
is equivalent to a taxable yield of 9.08%.2
* On June 30, 2003, the Trust's share price on the American Stock
Exchange traded at a 5.1% premium to its underlying net asset value.
Rating Distribution 3
-----------------------------------------------------------------------
By total investments
[The pie chart provides a breakdown of total investments by quality
weightings as follows: AAA 39.1%, AA 11.0%, A 11.9%, BBB 21.0%, BB 1.1%
and Non-Rated 15.9%.]
Trust Overview 3
-----------------------------------------------------------------------
Number of Issues 49
Average Maturity 22.1 Years
Effective Maturity 7.9 Years
Average Rating A+
Average Call 6.4 Years
Average Dollar Price $105.89
1 The Trust's market yield is calculated by dividing the most recent
dividend per share by the share price at the end of the period and
annualizing the result.
2 Taxable-equivalent yield assumes maximum 38.45% combined federal and
state income tax rate. A lower rate would result in a lower
tax-equivalent figure.
3 Because the Trust is actively managed, Rating Distribution and Trust
Overview statistics are subject to change.
* Private insurance does not remove the risk of loss of principal
associated with insured investments due to changes in market conditions.
Past performance is no guarantee of future results. Investment return
and market price will fluctuate so that shares, when sold, may be worth
more or less than their original cost.
The Massachusetts Health & Education Tax-Exempt Trust as of June 30, 2003
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments -- 129.0%
Ratings (Unaudited) Principal
----------------------------- Amount
Standard (000's
Moody's & Poor's Omitted) Security Value
---------------------------------------------------------------------------------------------------------
Education -- 39.9%
---------------------------------------------------------------------------------------------------------
NR A $1,100 Massachusetts DFA, Belmont Hill School,
5.00%, 9/1/31 $ 1,124,134
A3 BBB+ 1,500 Massachusetts DFA, Boston University,
5.45%, 5/15/59 1,572,690
Aa1 AAA 400 Massachusetts DFA, Deerfield Academy,
5.00%, 10/1/33 419,000
NR BBB 500 Massachusetts DFA, Massachusetts College of
Pharmacy and Health Sciences,
5.75%, 7/1/33 503,035
Baa2 BBB 400 Massachusetts DFA, Suffolk University,
5.75%, 7/1/19 418,684
NR BBB 600 Massachusetts DFA, Western New England
College, 5.875%, 12/1/22 616,674
NR BBB 540 Massachusetts DFA, Wheeler School,
6.50%, 12/1/29 578,551
Baa2 NR 250 Massachusetts DFA, Xaverian Brothers
High School, 5.65%, 7/1/29 256,630
Aa3 AA- 1,500 Massachusetts HEFA, Boston College,
4.75%, 6/1/31 1,515,750
Aaa AAA 1,800 Massachusetts HEFA, Harvard University,
5.125%, 7/15/37 1,892,610
NR NR 1,480 Massachusetts HEFA, Wheaton College,
6.00%, 1/1/18 (5) 1,604,853
Baa1 BBB 2,110 Massachusetts IFA, Springfield College,
5.625%, 9/15/10 2,158,509
Ba1 NR 400 Massachusetts IFA, Wentworth Institute of
Technology, 5.75%, 10/1/28 413,384
---------------------------------------------------------------------------------------------------------
$ 13,074,504
---------------------------------------------------------------------------------------------------------
Escrowed -- 15.4%
---------------------------------------------------------------------------------------------------------
NR NR $1,775 Massachusetts HEFA, Atlanticare Medical
Center, 8.00%, 12/01/13,
Prerefunded to 12/1/03 (5) $ 1,839,468
Aaa AA+ 1,500 Massachusetts HEFA, Daughters of Charity,
6.10%, 7/1/14,
Prerefunded to 7/1/06 1,598,835
Aa2 NR 1,000 Massachusetts HEFA, Youville House,
6.25%, 2/15/41,
Prerefunded to 2/15/07 1,177,110
Aaa A 1,000 Rail Connections Inc., MA, (ACA),
0.00%, 7/1/20,
Prerefunded to 7/1/09 427,250
---------------------------------------------------------------------------------------------------------
$ 5,042,663
---------------------------------------------------------------------------------------------------------
Health Care -- 1.2%
---------------------------------------------------------------------------------------------------------
NR NR $ 425 Massachusetts DFA, MCHSP,
6.60%, 8/15/29 $ 389,538
---------------------------------------------------------------------------------------------------------
Hospitals -- 15.0%
---------------------------------------------------------------------------------------------------------
A1 A+ $1,000 Massachusetts HEFA, Baystate Medical
Center, 5.75%, 7/1/33 $ 1,046,090
NR BBB+ 350 Massachusetts HEFA, Berkshire Healthcare,
6.25%, 10/1/31 365,754
Baa3 BBB 400 Massachusetts HEFA, Caritas Christi
Obligation Group, 6.25%, 7/1/22 384,043
NR A- 800 Massachusetts HEFA, Covenant Health,
6.00%, 7/1/22 852,104
NR A- 400 Massachusetts HEFA, Covenant Health,
6.00%, 7/1/31 422,796
Baa2 BBB- 750 Massachusetts HEFA, Milford-Whitinsville,
6.35%, 7/15/32 783,533
Aa3 AA- 1,000 Massachusetts HEFA, Partners Healthcare,
5.75%, 7/1/32 1,068,410
---------------------------------------------------------------------------------------------------------
$ 4,922,730
---------------------------------------------------------------------------------------------------------
Industrial Development Revenue -- 4.6%
---------------------------------------------------------------------------------------------------------
Baa1 BBB $1,500 Massachusetts IFA, General Motors,
5.55%, 4/1/09 $ 1,502,295
---------------------------------------------------------------------------------------------------------
Insured Education -- 5.7%
---------------------------------------------------------------------------------------------------------
Aaa AAA $ 230 Massachusetts HEFA, University of
Massachusetts Amherst, (FGIC),
5.125%, 10/1/34 $ 242,940
Aaa AAA 650 Massachusetts HEFA, Brandeis
University, (MBIA), 4.75%, 10/1/28 660,283
Aaa AAA 825 Massachusetts State College Building
Authority, (XLCA), 5.50%, 5/1/39 961,867
--------------------------------------------------------------------------------------------------------
$ 1,865,090
---------------------------------------------------------------------------------------------------------
Insured Hospitals -- 21.6%
---------------------------------------------------------------------------------------------------------
Aaa AAA $1,225 Massachusetts HEFA, Addison Gilbert
Hospital, (MBIA), 5.75%, 7/1/23 $ 1,252,746
Aaa AAA 800 Massachusetts HEFA, Baystate Medical
Center, (FSA), 6.00%, 7/1/26 894,376
Aaa AAA 1,000 Massachusetts HEFA, Berkshire Health
System, (MBIA), 6.00%, 10/1/19 1,092,050
Aaa AAA 1,250 Massachusetts HEFA, Dana Farber Cancer
Institute, (FGIC), 6.00%, 12/1/10 1,298,962
Aaa AAA 500 Massachusetts HEFA, Mt. Auburn Hospital,
(MBIA), 6.25%, 8/15/14 532,180
Aaa AAA 500 Massachusetts HEFA, New England Medical
Center, (FGIC), 5.00%, 5/15/22 517,915
Aaa AAA 1,000 Massachusetts HEFA, North Shore Medical
Center, (MBIA), 5.625%, 7/1/14 1,051,910
NR AAA 395 Massachusetts HEFA, Valley Regional Health
System, (CLEE), 5.75%, 7/1/18 415,382
---------------------------------------------------------------------------------------------------------
$ 7,055,521
---------------------------------------------------------------------------------------------------------
Insured Public Power -- 2.4%
---------------------------------------------------------------------------------------------------------
Aaa NR $ 500 Puerto Rico Electric Power Authority, (MBIA),
Variable Rate, 13.96%, 7/1/16(7)(8) $ 786,110
---------------------------------------------------------------------------------------------------------
Insured Special Tax -- 4.7%
---------------------------------------------------------------------------------------------------------
NR NR $1,000 Puerto Rico IFA, (AMBAC), Variable Rate,
8.81%, 7/1/07(6)(7) $ 1,074,350
NR AAA 420 Puerto Rico IFA, (AMBAC), Variable Rate,
11.73%, 7/1/28(8) 466,843
---------------------------------------------------------------------------------------------------------
$ 1,541,193
---------------------------------------------------------------------------------------------------------
Insured Water & Sewer -- 3.4%
---------------------------------------------------------------------------------------------------------
Aaa AAA $1,000 Massachusetts Water Resources Authority,
(FGIC), 5.75%, 8/1/39 $ 1,125,110
---------------------------------------------------------------------------------------------------------
Life Care -- 3.7%
---------------------------------------------------------------------------------------------------------
NR BBB- $ 855 Massachusetts DFA, Edgecombe Project,
6.75%, 7/1/21 $ 885,994
NR NR 340 Massachusetts IFA, Forge Hill, 6.75%,
4/1/30 324,999
---------------------------------------------------------------------------------------------------------
$ 1,210,993
---------------------------------------------------------------------------------------------------------
Miscellaneous -- 4.2%
---------------------------------------------------------------------------------------------------------
Ba2 BB $ 495 Massachusetts HEFA, Learning Center
for the Deaf, 6.125%, 7/1/29 $ 460,231
NR AAA 700 Puerto Rico IFA, Variable Rate,
14.35%, 10/1/34(7)(8) 921,137
---------------------------------------------------------------------------------------------------------
$ 1,381,368
---------------------------------------------------------------------------------------------------------
Nursing Home -- 4.5%
---------------------------------------------------------------------------------------------------------
NR NR $ 255 Massachusetts DFA, Odd Fellows,
6.25%, 1/1/15 $ 238,532
NR NR 500 Massachusetts HEFA, Christopher House,
6.875%, 1/1/29 490,865
NR NR 750 Massachusetts IFA, Age Institute of
Massachusetts, 8.05%, 11/1/25 755,745
---------------------------------------------------------------------------------------------------------
$ 1,485,142
---------------------------------------------------------------------------------------------------------
Transportation -- 2.7%
---------------------------------------------------------------------------------------------------------
NR AA- $ 830 Massachusetts Bay Transportation Authority,
Variable Rate, 8.74%, 3/1/27(6)(7) $ 874,795
---------------------------------------------------------------------------------------------------------
Total Tax-Exempt Investments -- 129.0%
(identified cost $39,345,453) $ 42,257,052
---------------------------------------------------------------------------------------------------------
Other Assets, Less Liabilities -- 1.5% $ 490,852
---------------------------------------------------------------------------------------------------------
Auction Preferred Shares
Plus Accumulated
Unpaid Dividends -- (30.5%) $(10,000,707)
---------------------------------------------------------------------------------------------------------
Net Assets -- 100% $ 32,747,197
---------------------------------------------------------------------------------------------------------
Notes to Portfolio:
(1) Portfolio Overview (Unaudited):
Number of Issues 49
Average Maturity (Years) 22.1 yrs
Effective Maturity (Years) 7.9 yrs
Average Call (Years) 6.4 yrs
Duration (Years) 4.6 yrs
Average Rating A+
(2) Health and Educational Obligors -- At June 30, 2003, the Trust held
securities issued by health and educational obligors with a value of
$35,079,162 (representing 83.0% of total investments).
(3) Insured Investments -- The Trust invests primarily in debt
securities issued by the Commonwealth of Massachusetts and its
municipalities. The ability of the issuers of the debt securities to
meet their obligations may be affected by economic developments in a
specific industry or municipality. In order to reduce the risk
associated with such economic developments, at June 30, 2003, 30.3% of
total investments is backed by bond insurance of various financial
institutions and financial guaranty assurance agencies. The Trust's
insured securities by financial institution are as follows:
Percentage
of Total
Value Investments
-----------------------------------------------------------------------------------
Municipal Bond Insurance Association (MBIA) $5,375,279 12.7%
Financial Guaranty Insurance Company (FGIC) 3,184,927 7.5%
AMBAC Financial Group Inc. (AMBAC) 1,541,193 3.7%
XL Capital Assurance (XLCA) 961,867 2.3%
Financial Security Assurance Incorporated (FSA) 894,376 2.1%
American Capital Access (ACA) 427,250 1.0%
College Construction Loan Insurance Corporation (CLEE) 415,382 1.0%
-----------------------------------------------------------------------------------
Total Insured Securities $12,800,274 30.3%
-----------------------------------------------------------------------------------
(4) Summary of Ratings (Unaudited):
Percentage
Number of Total
Ratings of Issues Value Investments
-----------------------------------------------------------------------------------
AAA/Aaa 19 $16,557,506 39.1%
AA/Aa 4 4,636,065 11.0%
A/A 5 5,017,814 11.9%
BBB/Baa 12 8,867,086 21.0%
BB/Ba 1 460,231 1.1%
NR 8 6,718,350 15.9%
-----------------------------------------------------------------------------------
Total 49 $42,257,052 100.0%
-----------------------------------------------------------------------------------
The ratings indicated are the most recent Moody's and Standard & Poor's
ratings believed to be available at June 30, 2003. NR indicates no
rating is available for the security. Ratings are generally ascribed to
securities at time of issuance. While the rating agencies may from time
to time revise such ratings, they undertake no responsibility to do so,
and the ratings indicated do not necessarily represent ratings the
agencies would ascribe to these securities at June 30, 2003.
(5) Private Placement Securities -- Information relating to the initial
acquisition and market valuation of private placement securities is
presented below:
Percentage
of Net Assets
Acquisition Applicable to
Cost Value Common Shares
-----------------------------------------------------------------------------------
Massachusetts HEFA,
Atlanticare Medical Center "AMC"
(acquired 12/15/93) $1,776,464 $1,839,468 5.6%
Massachusetts HEFA, Wheaton College
(acquired 1/12/98) 1,480,000 1,604,853 4.9%
-----------------------------------------------------------------------------------
Total $3,444,321 10.5%
-----------------------------------------------------------------------------------
AMC has no publicly offered securities of the same class as the private
placement security held by the Trust. Wheaton College has outstanding
publicly offered securities of the same class as the private placement
security held by the Trust. The Trust will bear the costs, if any,
relating to the disposition of the private placement securities,
including costs associated with registering the securities under the
Securities Act of 1933, if necessary.
(6) Security has been issued as an inverse floater bond.
(7) Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(8) Security has been issued as a leveraged inverse floater.
The accompanying notes are an integral part of these financial statements.
The Massachusetts Health & Education Tax-Exempt Trust as of June 30, 2003
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
As of June 30, 2003
Assets
----------------------------------------------------------------------------------------------------
Total Investments, at value (identified cost, $39,345,453) $42,257,052
Interest receivable 850,738
Other assets 2,473
----------------------------------------------------------------------------------------------------
Total assets $43,110,263
----------------------------------------------------------------------------------------------------
Liabilities
----------------------------------------------------------------------------------------------------
Due to bank $ 339,450
Accrued expenses and other liabilities 22,909
----------------------------------------------------------------------------------------------------
Total liabilities 362,359
----------------------------------------------------------------------------------------------------
Net assets applicable to Auction Preferred Shares, $0.01 par value;
400 shares authorized, 200 shares issued and outstanding at $50,000
per share liquidation preference plus cumulative unpaid dividends $10,000,707
----------------------------------------------------------------------------------------------------
Net Assets applicable to common shares $32,747,197
----------------------------------------------------------------------------------------------------
Sources of Net Assets:
----------------------------------------------------------------------------------------------------
Common Shares, $0.01 par value; unlimited number of shares
authorized, 2,325,087 shares issued and outstanding $ 23,251
Additional paid-in capital 30,547,908
Accumulated net realized loss from investment transactions (1,396,184)
Undistributed net investment income 660,623
Unrealized appreciation of investments 2,911,599
----------------------------------------------------------------------------------------------------
Net Assets applicable to common shares $32,747,197
----------------------------------------------------------------------------------------------------
Net Asset Value Per Common Share
($ 32,747,197 divided by 2,325,087
common shares issued and outstanding) $ 14.08
----------------------------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended
June 30, 2003
Investment Income
----------------------------------------------------------------------------------------------------
Interest income $1,263,377
----------------------------------------------------------------------------------------------------
Expenses
----------------------------------------------------------------------------------------------------
Investment advisory fee $ 73,846
Administration fee 31,462
Trustees' fees 12,397
Custodian and transfer agent fees 24,741
Legal and accounting services 15,830
Preferred share remarketing agent fee 10,637
Printing and postage 6,939
Preferred shares auction agent fees 2,480
Miscellaneous 4,882
----------------------------------------------------------------------------------------------------
Total operating expenses $ 183,214
----------------------------------------------------------------------------------------------------
Net investment income $1,080,163
----------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss)
on Investments
----------------------------------------------------------------------------------------------------
Net realized gain from investment transactions 8,344
Net change in unrealized appreciation of investments 630,704
----------------------------------------------------------------------------------------------------
Net gain on investments $ 639,048
----------------------------------------------------------------------------------------------------
Distributions to preferred shareholders $ (44,813)
----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations
applicable to common shares $1,674,398
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
The Massachusetts Health & Education Tax-Exempt Trust as of June 30, 2003
FINANCIAL STATEMENTS Cont'd
Statements of Changes in Net Assets
----------------------------------------------------------------------------------------------------
Six Months Ended
Increase (Decrease) June 30, 2003 Year Ended
in Net Assets (Unaudited) December 31, 2002
----------------------------------------------------------------------------------------------------
From operations:
Net investment income $ 1,080,163 $ 2,192,143
Net realized gain 8,344 63,983
Net change in unrealized appreciation 630,704 910,312
Distributions to preferred shareholders (44,813) (119,521)
----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
operations applicable to common shares $ 1,674,398 $ 3,046,917
----------------------------------------------------------------------------------------------------
Distributions to Common Shareholders:
From net investment income $ (931,026) $(1,847,879)
----------------------------------------------------------------------------------------------------
Total distributions to common
shareholders $ (931,026) $(1,847,879)
----------------------------------------------------------------------------------------------------
Capital Share Transactions:
Reinvestment of distributions to
common shareholders $ 7,370 $ 70,402
----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions $ 7,370 $ 70,402
----------------------------------------------------------------------------------------------------
Net increase in net assets $ 750,742 $ 1,269,440
----------------------------------------------------------------------------------------------------
Net Assets applicable to Common Shares:
----------------------------------------------------------------------------------------------------
At beginning of period $31,996,455 $30,727,015
----------------------------------------------------------------------------------------------------
At end of period, including undistributed
net investment income of $660,623
and $556,299, respectively $32,747,197 $31,966,455
----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
The Massachusetts Health & Education Tax-Exempt Trust as of June 30, 2003
FINANCIAL STATEMENTS Cont'd
Financial Highlights
Selected data for a common share outstanding during each period
Six Months
Ended
June 30, Year Ended December 31,
2003 ---------------------------------------------------------------
(Unaudited) 2002 2001 2000 1999 1998
----------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period (common shares) $ 13.76 $ 13.25 $ 13.17 $ 12.45 $ 14.06 $ 13.90
----------------------------------------------------------------------------------------------------------------------------
Investment Operations
----------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.46(d) $ 0.94(d) $ 0.94(a)(d) $ 0.90(d) $ 0.89(d) $ 0.88(d)
Net realized and unrealized gain
(loss) on investments 0.28 0.42 0.03 0.73 (1.63) 0.16
Distributions to preferred
shareholders (0.02) (0.05) (0.11) (0.15) (0.12) (0.14)
----------------------------------------------------------------------------------------------------------------------------
Total from investment operations
applicable to common shares $ 0.72 $ 1.31 $ 0.86 $ 1.48 $ (0.86) $ 0.90
----------------------------------------------------------------------------------------------------------------------------
Less Distributions to
Common Shareholders
----------------------------------------------------------------------------------------------------------------------------
From net investment income $ (0.40) $ (0.80) $ (0.78) $ (0.76) $ (0.75) $ (0.74)
----------------------------------------------------------------------------------------------------------------------------
Total distributions to Common
Shareholders $ (0.40) $ (0.80) $ (0.78) $ (0.76) $ (0.75) $ (0.74)
----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period
(Common shares) $ 14.08 $ 13.76 $ 13.25 $ 13.17 $ 12.45 $ 14.06
----------------------------------------------------------------------------------------------------------------------------
Per share market value, end of
period (Common shares) $ 14.80 $ 13.48 $ 13.60 $ 12.75 $ 11.50 $14.875
----------------------------------------------------------------------------------------------------------------------------
Total investment return at
Market Value 12.98% 5.10% 13.01% 17.78% (18.23%) 12.05%
----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
----------------------------------------------------------------------------------------------------------------------------
Net assets applicable to common
shares, end of period (000 omitted) $32,747 $31,996 $30,727 $30,500 $28,830 $32,503
Ratios: (as a percentage of
average total net assets)
Expenses 0.87%(e) 0.91% 0.91% 0.97% 0.97% 0.96%(c)
Expenses, after custodian fee reduction 0.87%(e) 0.90% 0.90% 0.96% 0.96% 0.95%(c)
Net investment income 5.15%(e) 5.31% 5.31%(a) 5.33% 5.05% 4.79%(c)
Ratios: (as a percentage of
average common net assets)
Expenses (b) 1.14%(e) 1.20% 1.20% 1.30% 1.28% 1.25%(c)
Expenses, after custodian
fee reduction (b) 1.14%(e) 1.19% 1.18% 1.29% 1.27% 1.24%(c)
Net investment income (b) 6.74%(e) 7.00% 7.02%(a) 7.16% 6.68% 6.27%(c)
Portfolio turnover rate 5% 36% 13% 8% 32% 28%
----------------------------------------------------------------------------------------------------------------------------
The Financial Highlights summarize the impact of net investment income,
gains (losses) and distributions on the Trust's net asset value per
common share during the periods stated. Additionally, important
relationships between certain financial statement items are expressed in
ratio form.
The accompanying notes are an integral part of these financial statements.
The Massachusetts Health & Education Tax-Exempt Trust as of June 30, 2003
FINANCIAL STATEMENTS Cont'd
Financial Highlights
(a) The Trust has adopted the provisions of the AICPA Audit and
Accounting Guide for Investment Companies, as revised, and began
accreting market discounts on debt securities. The effect of this change
for the year ended December 31, 2001 was an increase in net investment
income per common share of $0.01, a decrease in net realized and
unrealized gains per common share of $0.01, an increase in the ratio of
net investment income to average total net assets from 5.24% to 5.31%
and an increase in the ratio of net investment income to average common
assets from 6.93% to 7.02%. Per share data and ratios for the periods
prior to January 1, 2001 have not been restated to reflect this change
in presentation.
(b) Ratios do not reflect the effect of dividend payments to preferred
shareholders. Ratios to average common net assets reflect the Trust's
leveraged capital structure.
(c) Reflects expense waivers by the Administrator during the period. If
the Trust had borne all expenses for the year ended December 31, 1998,
net investment income per common share would have decreased by less than
$0.01.
(d) Computed using average common shares outstanding throughout the
period.
(e) Annualized
The accompanying notes are an integral part of these financial statements.
The Massachusetts Health & Education Tax-Exempt Trust as of June 30, 2003
NOTES TO FINANCIAL STATEMENTS
1 General Information and
Significant Accounting Policies
------------------------------------------------------------------------
The Massachusetts Health & Education Tax-Exempt Trust (the "Trust") is
an entity commonly known as a Massachusetts business trust and is
registered under the Investment Company Act of 1940, as amended, as a
non-diversified, closed-end management investment company. The Trust's
investment objective is to earn a high level of current income exempt
from regular Federal income taxes and Massachusetts personal income
taxes consistent with preservation of capital. The Trust seeks to
achieve its objective by investing primarily in Massachusetts
"investment grade" tax-exempt obligations issued on behalf of
not-for-profit health and education institutions.
The following is a summary of significant accounting policies followed
by the Trust in the preparation of its financial statements, in
accordance with accounting principles generally accepted in the United
States of America.
Securities Valuation. Municipal securities are normally valued on the
basis of valuations furnished from a pricing service. Short-term
obligations, maturing in sixty days or less, are valued at amortized
cost, which approximates value. Futures and options on futures contracts
traded on an exchange will be valued at last settlement price.
Investments for which valuations or market quotations are unavailable
are valued at fair value using methods determined in good faith by or at
the direction of the Trustees. In the event of unusual market
disruptions affecting valuation, the Pricing Committee of the Trustees
will be consulted.
Securities Transactions. Securities transactions are recorded on a trade
date basis. Realized gains and losses from such transactions are
determined using the specific identification method. Securities
purchased or sold on a when-issued or delayed delivery basis may be
settled a month or more after the transaction date. The securities so
purchased are subject to market fluctuations during this period. To the
extent that when-issued or delayed delivery purchases are outstanding,
the Trust instructs the custodian to segregate assets in a separate
account, with a current value at least equal to the amount of its
purchase commitments.
Interest Income. Interest income is determined on the basis of interest
accrued and discount earned, adjusted for amortization of premium or
accretion of discounts on long term debt securities.
Federal Income Taxes. The Trust has complied and intends to comply with
the requirements of the Internal Revenue Code (the "Code") applicable to
regulated investment companies by distributing all of its income,
including any net realized gains from investments, to shareholders.
Therefore, no federal income tax provision is required. In addition, the
Trust intends to satisfy conditions which will enable it to designate
distributions from the interest income generated by its investments in
municipal securities, which are exempt from regular federal and
Massachusetts income taxes when received by the Trust, as exempt
interest dividends.
At December 31, 2002, the Trust for federal income tax purposes had a
capital loss carryover of $1,321,267, which will reduce taxable income
arising from future net realized gain on investments, if any, to the
extent permitted by the Internal Revenue Code, and thus will reduce the
amount of distributions to shareholders which would otherwise be
necessary to relieve the Trust of any liability for federal income or
excise tax. Such capital loss carryovers will expire on December 31,
2003 ($1,165,653), December 31, 2008 ($116,670) and December 31, 2009
($38,944).
Expense Reductions. Investors Bank & Trust Company (IBT) serves the
Trust as its Custodian and Transfer Agent. Pursuant to its service
agreements, IBT receives a fee reduced by credits which are determined
based on the average daily cash balance the Trust maintains with IBT.
All significant credit balances used to reduce the Trust's custodian fee
are reported as a reduction of expenses on the statement of operations.
Use of Estimates. The preparation of the financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date
of the financial statements and the reported amounts of revenue and
expense during the reporting period. Actual results could differ from
those estimates.
Interim Financial Information. The interim financial statements relating
to June 30, 2003 and for the six months then ended have not been audited
by independent certified public accountants, but in the opinion of the
Trust's management, reflect all adjustments, consisting only of normal
recurring adjustments necessary for the fair presentation of the
financial statements.
2 Auction Preferred Shares
------------------------------------------------------------------------
The Trust currently has 200 Auction Preferred Shares outstanding. The
Auction Preferred Shares are redeemable at the option of the Trust on
any dividend payment date at the redemption price of $50,000 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 Investment Company Act of 1940, the Trust is required to
maintain asset coverage of at least 200% with respect to the Auction
Preferred Shares as of the last business day of each month in which any
Auction Preferred Shares are outstanding. Additionally, the Trust is
required to meet more stringent asset coverage requirements under the
terms of the Auction Preferred Shares and in accordance with the
guidelines prescribed by the rating agency. Should these requirements
not be met, or should dividends accrued on the Auction Preferred Shares
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 Auction Preferred Shares. At June 30, 2003, there were no such
restrictions on the Trust.
3 Distributions to Shareholders
------------------------------------------------------------------------
Distributions to common shareholders are recorded on the ex-dividend
date and are paid on the last business day of each month. Distributions
to preferred shareholders are recorded daily and are payable at the end
of each dividend period. Each dividend payment period for the Auction
Preferred Shares is generally seven days. The applicable dividend rate
for the Auction Preferred Shares on June 30, 2003 was 0.516%. For the
year six months ended June 30, 2003, the Trust paid dividends to Auction
Preferred shareholders amounting to $44,813, representing an average APS
dividend rate for such period of 0.90% (annualized).
The Trust distinguishes between distributions on a tax basis and a
financial reporting basis. Accounting principles generally accepted in
the United States of America require that only distributions in excess
of tax basis earnings and profits be reported in the financial
statements as a return of capital. Permanent differences between book
and tax accounting relating to distributions are reclassified to
paid-in-capital. These differences primarily relate to expired capital
loss carryforwards.
4 Investment Advisory Fees and
Other Transactions with Affiliates
------------------------------------------------------------------------
The Trust has entered into an Advisory Agreement with Eaton Vance
Management ("Eaton Vance"), under which Eaton Vance will furnish the
Trust with investment research and advisory services. For the six months
ended June 30, 2003, the fee paid for such services amounted to $73,846
and was equivalent to 0.35% (annualized) of the average daily net assets
of the Trust, including net assets attributable to any Auction Preferred
Shares outstanding.
In addition, the Trust also entered into an Administration Agreement
with Eaton Vance, under which Eaton Vance will manage and administer the
Trust's business affairs and, in connection therewith, furnish for use
of the Trust, office space and all necessary office facilities,
equipment, and personnel for administering the affairs of the Trust.
For the six months ended June 30, 2003, the fee paid for such services
amounted to $31,462 and was equivalent to 0.15% (annualized) of the
average daily net assets of the Trust, including net assets attributable
to any Auction Preferred Shares outstanding.
Trustees who are not affiliates of Eaton Vance are eligible to receive
an annual fee of $5,000 each.
5 Securities Transactions
------------------------------------------------------------------------
Purchases and sales (including maturities) of portfolio securities
during the six months ended June 30, 2003, aggregated $3,044,003 and
$2,023,468 respectively. There were no purchases and sales of short-term
municipal securities during the six months ended June 30, 2003.
The identified cost and unrealized appreciation (depreciation) in value
of the investments owned by the Trust at June 30, 2003, as computed for
federal income tax purposes, were as follows:
Identified cost $39,171,187
------------------------------------------------------------------------
Gross unrealized appreciation $ 3,186,078
Gross unrealized depreciation (100,213)
------------------------------------------------------------------------
Net unrealized appreciation $ 3,085,865
------------------------------------------------------------------------
6 Capital Transactions
------------------------------------------------------------------------
The Declaration of Trust allows the Trustees to issue an unlimited
number of $0.01 par value shares of common stock. Transactions in common
shares were as follows:
Six Months Ended
June 30, 2003 Year Ended
(Unaudited) December 31, 2002
------------------------------------------------------------------------
Beginning shares 2,324,569 2,319,394
Shares issued pursuant to the Trust's
dividend reinvestment plan 518 2,421
------------------------------------------------------------------------
Ending shares 2,325,087 2,324,569
------------------------------------------------------------------------
7 Annual Meeting of Shareholders
------------------------------------------------------------------------
The Trust held its annual meeting of Shareholders on May 13, 2003.
2,324,569 common shares and 200 Auction Preferred Shares (APS) were
outstanding on March 17, 2003, the record date for shares eligible to
vote at the meeting. 2,010,275 (86.47% of the record date common shares)
and 190 APS shares (95.00% of the record date APS shares) were
represented at the meeting. The following actions were taken by the
shareholders:
The election of James F. Carlin III, Thomas H. Green, III, Thomas J.
Fetter, Walter B. Prince, Edward M. Murphy and James M. Storey as
Trustees of the Trust. Messrs. Carlin and Green were designated the
Nominees that will represent the APS shareholders:
Number of
Nominees for Trustee Shares
Elected by APS Shareholders Affirmative Withheld
------------------------------------------------------------------------
James F. Carlin III 190 --
Thomas H. Green, III 190 --
Number of
Nominees for Trustee Shares
Elected by All Shareholders Affirmative Withheld
------------------------------------------------------------------------
Thomas J. Fetter 1,994,361 15,913
Edward M. Murphy 1,997,361 12,913
Walter B. Prince 1,997,361 12,913
James M. Storey 1,996,761 13,513
8 Engagement of New Independent Auditors
------------------------------------------------------------------------
On March 4, 2003, upon the recommendation of its Audit Committee, the
Board of Trustees of the Trust approved the engagement of Deloitte &
Touche, LLP as the Trust's independent auditors for fiscal year 2003,
replacing PricewaterhouseCoopers LLP ("PWC"). The change was effective
March 17, 2003. During the two previous fiscal years, PWC's reports on
the Trust's financial statements did not contain an adverse opinion or
disclaimer of opinion, nor were they qualified or modified as to
uncertainty, audit scope or accounting principles. Further, there were
no disagreements with PWC on any matter of accounting principle or
practices, financial statement disclosure, or auditing scope or
procedure.
The Massachusetts Health & Education Tax-Exempt Trust as of June 30, 2003
OTHER INFORMATION
From time to time in the future, the Trust may effect redemptions and/or
repurchases of its Auction Preferred Shares as provided in the
applicable constituent instruments or as agreed upon by the Trust and
holders of Auction Preferred Shares. The Trust would generally effect
such redemptions and/or repurchases to the extent necessary to maintain
applicable asset coverage requirements.
The Massachusetts Health & Education Tax-Exempt Trust
INVESTMENT MANAGEMENT
The Massachusetts Health & Education Tax-Exempt Trust
Officers
Thomas J. Fetter, CFA
President and Trustee
Robert B. MacIntosh, CFA
Vice President and
Portfolio Manager
James M. Wall
Secretary
Kristin S. Anagnost
Treasurer
Board of Trustees
Walter B. Prince, Esq., Chairman
James F. Carlin III
Thomas H. Green, III, Esq.
Edward M. Murphy
James M. Storey, Esq.
THIS PAGE INTENTIONALLY LEFT BLANK.
THIS PAGE INTENTIONALLY LEFT BLANK.
Investment Advisor and Administrator
Eaton Vance Management
The Eaton Vance Building
255 State Street
Boston, MA 02109
Custodian, Transfer Agent,
Dividend Disbursing Agent and Registrar
Investors Bank & Trust Company
200 Clarendon Street
Boston, MA 02116
EATON VANCE FUNDS
EATON VANCE MANAGEMENT
BOSTON MANAGEMENT AND RESEARCH
EATON VANCE DISTRIBUTORS, INC.
PRIVACY NOTICE
The Eaton Vance organization is committed to ensuring your financial
privacy. This notice is being sent to comply with privacy regulations of
the Securities and Exchange Commission. Each of the above financial
institutions has in effect the following policy with respect to
nonpublic personal information about its customers:
* Only such information received from you, through application forms or
otherwise, and information about your Eaton Vance fund transactions will
be collected.
* None of such information about you (or former customers) will be
disclosed to anyone, except as permitted by law (which includes
disclosure to employees necessary to service your account).
* Policies and procedures (including physical, electronic and procedural
safeguards) are in place that are designed to protect the
confidentiality of such information.
For more information about Eaton Vance's privacy policies,
call: 1-800-262-1122
The Massachusetts Health & Education Tax-Exempt Trust
The Eaton Vance Building
255 State Street
Boston, MA 02109
1-800-225-6265
278-8/03 MHEFASRC
Item 2. Code of Ethics
Not required in this filing.
Item 3. Audit Committee Financial Expert
Not required in this filing.
Item 4. Principal Accountant Fees and Services
Not required in this filing.
Item 5. Audit Committee of Listed Registrants
Not required in this filing.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not required in this filing.
Item 8. [Reserved]
Item 9. Controls and Procedures
(a) It is the conclusion of the registrants principal executive officer and
principal financial officer that the effectiveness of the registrants
current disclosure controls and procedures (such disclosure controls and
procedures having been evaluated within 90 days of the date of this
filing) provide reasonable assurance that the information required to be
disclosed by the registrant has been recorded, processed, summarized and
reported within the time period specified in the Commissions rules and
forms and that the information required to be disclosed by the registrant
has been accumulated and communicated to the registrants principal
executive officer and principal financial officer in order to allow
timely decisions regarding required disclosure.
(b) There have been no significant changes in the registrants internal
controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
Item 10. Exhibits
(a)(1) Registrants Code of Ethics Not applicable (please see Item 2).
(a)(2)(i) Treasurers Section 302 certification.
(a)(2)(ii) Presidents Section 302 certification.
(b) Combined Section 906 certification.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
The Massachusetts Health & Education Tax-Exempt Trust
By: /s/ Thomas J. Fetter
---------------------------
Thomas J. Fetter
President
Date: September 3, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by
the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
By: /s/ Kristin S. Anagnost
---------------------------
Kristin S. Anagnost
Treasurer
Date: September 3, 2003
By: /s/ Thomas J. Fetter
---------------------------
Thomas J. Fetter
President
Date: September 3, 2003