UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-05597
Morgan Stanley Municipal Income Opportunities Trust
(Exact name of registrant as specified in charter)
1221 Avenue of the Americas, New York, New York 10020
(Address of principal executive offices) (Zip code)
Ronald E. Robison
1221 Avenue of the Americas, New York, New York 10020
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-762-4000
Date of fiscal year end: May 31, 2007
Date of reporting period: February 28, 2007
ITEM 1. SCHEDULE OF INVESTMENTS.
The Trust's schedule of investments as of the close of the reporting period
prepared pursuant to Rule 12-12 of Regulation S-X is as follows:
MORGAN STANLEY MUNICIPAL INCOME OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS February 28, 2007 (unaudited)
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
--------- ------ --------- ------------
TAX-EXEMPT MUNICIPAL BONDS (100.2%)
General Obligation (1.9%)
$ 1,000 Copperleaf Metropolitan District # 2, Colorado, Ser 2006 5.95% 12/01/36 $ 1,041,510
2,000 Georgetown Special Taxing District, Connecticut, Ser 2006 A (a) 5.125 10/01/36 2,010,440
--------- ------------
3,000 3,051,950
--------- ------------
Educational Facilities Revenue (3.5%)
985 Bellalago Educational Facilities Benefits District, Florida, Bellalago
Charter School Ser 2004 B 5.80 05/01/34 1,025,021
500 Maryland Industrial Development Financing Authority, Our Lady of
Good Counsel High School Ser 2005 A 6.00 05/01/35 539,260
1,000 Westchester County Industrial Development Agency, New York,
Guiding Eyes for The Blind Inc Ser 2004 5.375 08/01/24 1,078,530
1,000 Harrisburg Authority, Pennsylvania Harrisburg University of
Science & Technology Ser B 2007 6.00 09/01/36 1,033,450
2,000 Chattanooga Health Educational & Housing Facilities Board,
Tennessee, Student Housing Refg Ser 2005 A 5.00 10/01/25 2,039,800
--------- ------------
5,485 5,716,061
--------- ------------
Hospital Revenue (10.7%)
1,000 Colbert County - Northwest Health Care Authority, Alabama,
Helen Keller Hospital Ser 2003 5.75 06/01/27 1,058,500
700 Salida, Hospital District, Colorado, Heart of the Rockies Regional
Medical Center Ser 2006 5.25 10/01/36 718,270
2,000 Hawaii Department of Budget & Finance, Kuakini Health
2002 Ser A 6.375 07/01/32 2,200,060
1,000 Indiana Health Facility Financing Authority, Riverview Hospital
Ser 2002 6.125 08/01/31 1,086,270
525 Washington County Hospital, Iowa, Ser 2006 5.375 07/01/26 547,880
600 Gaylord Hospital Financing Authority, Michigan, Otsego Memorial
Hospital Ser 2004 6.50 01/01/37 632,592
1,500 St Paul Housing & Redevelopment Authority, Minnesota, HealthEast
Ser 2005 6.00 11/15/35 1,667,910
2,335 Henderson, Nevada, Catholic Health West 1998 Ser A 5.375 07/01/26 2,391,763
1,500 New Hampshire Higher Educational & Health Facilities Authority,
Littleton Hospital Assn Ser 1998 A 6.00 05/01/28 1,544,295
2,000 New Jersey Health Care Facilities Financing Authority, Raritan Bay
Medical Center Ser 1994 7.25 07/01/27 2,048,820
500 Fulton County Industrial Development Authority, Pennsylvania
Fulton County Medical Center Ser 2006 5.875 07/01/31 521,490
1,000 Monroe County Hospital Authority, Pennsylvania, Pocono Medical
Center Ser 2003 6.00 01/01/43 1,084,240
1,000 Knox County Health, Educational & Housing Facility Board,
Tennessee, Baptist Health of East Tennessee Ser 2002 6.50 04/15/31 1,082,610
1,000 Decatur Hospital Authority, Texas, Wise Regional Health
Ser 2004 A 7.125 09/01/34 1,107,600
--------- ------------
16,660 17,692,300
--------- ------------
Industrial Development/Pollution Control Revenue (6.9%)
260 Metropolitan Washington Airports Authority, District of Columbia &
Virginia, CaterAir International Corp Ser 1991 (AMT) ++ 10.125 09/01/11 260,445
New York City Industrial Development Agency, New York,
2,000 7 World Trade Center LLC Ser 2005 A 6.50 03/01/35 2,134,260
2,000 American Airlines Inc Ser 2005 (AMT) 7.75 08/01/31 2,435,320
250 Zanesville-Muskingum County Port Authority, Ohio, Anchor Glass
Container Corp Ser 1989 B (AMT) 10.25 12/01/08 250,768
2,620 Carbon County Industrial Development Authority, Pennsylvania,
Panther Creek Partners Refg 2000 Ser (AMT) 6.65 05/01/10 2,733,366
1,000 Pennsylvania Economic Development Financing Authority, Reliant
Energy Inc Ser 2001 A (AMT) 6.75 12/01/36 1,105,680
350 Lexington County, South Carolina, Ellett Brothers Inc
Refg Ser 1988 7.50 09/01/08 349,045
1,000 Brazos River Authority, Texas, Texas Utilities Electric Co
Refg Ser 1999 A (AMT) 7.70 04/01/33 1,149,900
1,000 Chesterfield County Industrial Development Authority, Virginia,
Virginia Electric & Power Co Ser 1985 5.50 10/01/09 1,011,120
--------- ------------
10,480 11,429,904
--------- ------------
Mortgage Revenue - Multi-Family (1.9%)
3,000 Brookhaven Industrial Development Agency, New York, Woodcrest
Estates Ser 1998 A (AMT) 6.375 12/01/37 3,108,900
--------- ------------
Mortgage Revenue - Single Family (9.9%)
California Housing Finance Agency
500 RITES PA 1417 (AMT) 9.817## 08/01/31 522,480
500 RITES PA 1417 (AMT) 10.017## 08/01/36 526,820
Colorado Housing & Finance Aurhority,
55 Ser 1996 Ser B-1 (AMT) 7.65 11/01/26 55,904
455 Ser 1998 Ser D-2 (AMT) 6.35 11/01/29 460,387
14,895 New Hampshire Housing Finance Authority, Residential 1983 Ser B
Pennsylvania Housing Finance Agency, 0.00 01/01/15 6,668,640
3,520 Ser 2006-96A (AMT) @@ 4.65 10/01/31 3,551,020
4,480 Ser 2006-96A (AMT) @@ 4.70 10/01/37 4,519,480
--------- ------------
24,405 16,304,731
--------- ------------
Nursing & Health Related Facilities Revenue (8.9%)
Escambia County, Florida,
4,250 Pensacola Care Development Centers Ser 1989 10.25 07/01/11 4,308,054
980 Pensacola Care Development Centers Ser 1989 A 10.25 07/01/11 993,387
1,000 Orange County Health Facilities Authority, Florida, Westminister
Community Care Services Inc Ser 1999 6.75 04/01/34 1,042,560
1,000 Pinellas County Health Facilities Authority, Florida, Oaks of
Clearwater Ser 2004 6.25 06/01/34 1,076,720
515 Kentucky Economic Development Financing Authority, AHF/
Kentucky-Iowa Inc Ser 2003 6.50@ 01/01/29 561,618
1,675 Massachusetts Development Finance Agency, New England Center
for Children Ser 1998 5.875 11/01/18 1,724,044
1,000 Massachusetts Health & Educational Facilities Authority, The
Learning Center for Deaf Children Ser C 6.125 07/01/29 1,025,370
1,000 St Louis County Industrial Development Authority, Missouri,
Pediatric Rehabilitation Center Ser 2003 A 6.625 11/15/35 1,052,030
700 New Jersey Economic Development Authority, Seashore
Gardens Ser 2006 5.375 11/01/36 718,809
610 Mount Vernon Industrial Development Agency, New York,
Meadowview at the Wartburg Ser 1999 6.00 06/01/09 623,341
1,500 Suffolk County Industrial Development Agency, New York, Madford
Hamlet Ser 2006 6.375 01/01/39 1,550,610
--------- ------------
14,230 14,676,543
--------- ------------
Recreational Facilities Revenue (5.1%)
2,000 Sacramento Financing Authority, California, Convention Center
Hotel 1999 Ser A 6.25 01/01/30 2,084,240
1,000 San Diego County, California, San Diego Natural History Museum
COPs 5.70 02/01/28 1,009,000
1,000 Mashantucket (Western) Pequot Tribe, Connecticut, Special
1997 Ser B (a) 5.75 09/01/27 1,024,920
1,000 Marlyland State Economic Development Corporation, Chesapeake
Bay Conference Center Ser 2006 A 5.00 12/01/31 1,014,200
1,000 New York Liberty Development Corporation, National Sports
Museum Ser 2006 A 6.125 02/15/19 1,058,310
2,000 Austin Convention Enterprises Inc, Texas, Convention Center Hotel
Ser 2006 B 5.75 01/01/34 2,154,820
--------- ------------
8,000 8,345,490
--------- ------------
Retirement & Life Care Facilities Revenue (22.7%)
1,000 Colorado Health Facilities Authority, Christian Living Communities
Ser 2006 A 5.75 01/01/37 1,052,970
500 Orange County Health Facilities Authority, Florida, Orlando
Lutheran Towers Inc Ser 2005 ** 5.70 07/01/26 520,725
1,000 Hawaii Department of Budget & Finance, Kahala Nui 2003 Ser A
Illinois Finance Authority, 8.00 11/15/33 1,163,830
1,000 Landing at Plymouth Ser 2005 A 6.00 05/15/37 1,072,790
1,000 Luther Oaks Ser 2006 A 6.00 08/15/39 1,059,180
1,650 Montgomery Place Ser 2006 A 5.75 05/15/38 1,732,401
1,000 Iowa Finance Authority, Bethany Life Communities Refg Ser 2006 A 5.55 11/01/41 1,011,240
1,500 Lenexa, Kansas, Lakeview Village - Southridge Ser 2002 C 6.875 05/15/32 1,638,765
Maryland State Health & Higher Educational Facilities Authority,
750 King Farm Presbyterian Community 2007 Ser A 5.30 01/01/37 765,518
500 Edenwald Ser 2006 A 5.40 01/01/31 526,920
1,500 Mercy Ridge 2003 Ser A 6.00 04/01/35 1,629,675
800 Washington Christian Academy 5.50 07/01/38 826,648
1,500 Massachusetts Development Finance Agency, Loomis Communities
Ser 1999 A 5.75 07/01/23 1,554,840
1,500 Kansas City Industrial Development Agency, Missouri, Bishop
Spencer 2004 Ser A 6.50 01/01/35 1,598,295
New Jersey Economic Development Authority,
1,000 Franciscan Oaks Ser 1997 5.70 10/01/17 1,022,170
730 Lions Gate Ser 2005 A 5.875 01/01/37 768,690
1,000 The Presbyterian Home at Montgomery Ser 2001 A 6.375 11/01/31 1,065,600
2,000 United Methodist Homes of New Jersey Ser 1998 5.125 07/01/25 1,996,320
North Carolina Medical Care Commission,
1,000 Given Estate Ser 2003 A 6.50 07/01/32 1,088,340
1,000 Presbyterian Homes Ser 2006 5.50 10/01/31 1,046,990
1,500 Grand Forks, North Dakota, 4000 Valley Square Ser 2006 5.30 12/01/34 1,523,190
1,500 Bucks County Industrial Development Authority, Pennsylvania,
Ann's Choice Ser 2005 A 6.125 01/01/25 1,604,745
1,000 Montgomery County Industry Development Authority, Pennsylvania,
Whitemarsh Community Ser 2005 6.25 02/01/35 1,064,100
750 South Carlolina Jobs-Economic Development Authority, Wesley
Commons Ser 2006 5.30 10/01/36 768,030
Shelby County Health, Educational & Housing Facilities Board,
Tennessee,
500 Trezevant Manor Ser 2006 A 5.75 09/01/37 516,255
500 Village at Germantown Ser 2006 6.25 12/01/34 460,000
750 Village at Germantown Ser 2003 A 7.25 12/01/34 763,995
1,250 HFDC Central Texas Inc, Legacy at Willow Bend Ser 2006 A 5.75 11/01/36 1,303,288
1,000 Houston Health Facilities Authority, Texas, Buckingham Senior
Living Community Ser 2004 A 7.125 02/15/34 1,123,650
1,000 Lubbock, Health Facilities Development Corporation, Texas,
Carillon Senior Lifecare Ser 2005 A 6.50 07/01/26 1,055,370
2,000 Peninsula Ports Authority of Virginia, Virginia Baptist Homes
Ser 2006 C 5.40 12/01/33 2,081,399
1,000 Virginia Beach Development Authority, Virginia, Westminster-
Canterbury Refg Ser 2005 A 5.25 11/01/26 1,033,350
1,000 Washington Housing Finance Commission Skyline at
First Hill Ser 2007 A (WI) 5.625 01/01/38 1,032,340
--------- ------------
35,680 37,471,619
--------- ------------
Tax Allocation Revenue (15.2%)
1,000 Poway Unified School District, Community Facilities District #14
California, Ser 2006 5.25 09/01/36 1,032,100
1,000 San Marcos Community Facilities District # 2002-01, California,
University Commons Ser 2004 5.95 09/01/35 1,054,820
1,000 Santa Ana, Unified School District Community Facilities
District # 2004-1, California, Central Park Ser 2005 5.10 09/01/35 1,021,080
2,000 Elk Valley Public Improvement Corporation, Colorado, Ser 2001 A 7.35 09/01/31 2,128,800
2,000 Northwest Metropolitan District #3, Colorado, Ser 2005 6.25 12/01/35 2,143,860
1,000 Southlands Metropolitan District #1, Colorado, Ser 2004 7.125 12/01/34 1,114,410
2,000 Beacon Lakes, Community Development District, Florida,
Ser 2003 A 6.90 05/01/35 2,198,099
1,000 Midtown Miami Community Development District, Florida, Parking
Garage Ser 2004 A 6.25 05/01/37 1,093,080
1,000 Renaissance Commons Community Development District, Florida
2005 Ser A 5.60 05/01/36 1,023,870
2,000 Atlanta, Georgia, Eastside Ser 2005 B 5.60 01/01/30 2,081,860
1,000 Bolingbrook, Illinois, Sales Tax Ser 2005 0.00@ 01/01/24 1,004,920
2,000 Chicago, Illinois, Lake Shore East Ser 2002 6.75 12/01/32 2,176,380
725 Lincolnshire, Illinois, Service Area # 1-Sedgebrook Ser 2004 6.25 03/01/34 778,440
2,000 Des Peres, Missouri, West County Center Ser 2002 5.75 04/15/20 2,062,000
1,975 Las Vegas District # 808, Nevada, Summerlin Ser 2001 6.75 06/01/21 2,043,138
1,000 Washington County Pennsylvania Redevelopment Authority 5.45 07/01/35 1,031,440
1,000 Myrtle Beach, South Carolina, Air Force Base Redevelopment
Ser 2006 A 5.30 10/01/35 1,030,070
--------- ------------
23,700 25,018,367
--------- ------------
Tobacco Revenue (3.2%)
1,000 Northern Tobacco Securitization Corporation, Alaska, Asset Backed
Ser 2006 A 5.00 06/01/46 983,860
2,000 California County Tobacco Securitization Agency, Gold County
Settlement Funding Corp Ser 2006 0.00 06/01/33 444,640
1,000 Nassau County Tobacco Settlement Corporation, New York,
Ser 2006 A-3 5.125 06/01/46 1,032,670
1,500 TSASC Inc, New York, Tobacco Settlement Ser 2006- 1 5.125 06/01/42 1,549,005
13,000 Silicon Valley Tobacco Securitization Authority, California,
Santa Clara Tobacco Securitization Corp Ser 2007 0.00 06/01/56 621,790
4,000 Tobacco Settlement Financing Corporation, New Jersey, Ser 2007-1B 0.00 06/01/41 594,320
--------- ------------
22,500 5,226,285
--------- ------------
Transportation Facilities Revenue (1.6%)
1,515 Mid-Bay Bridge Authority, Florida, Sr Lien Crossover
Refg Ser 1993 A (Ambac) 5.85 10/01/13 1,597,628
1,000 Nevada Department of Business & Industry, Las Vegas Monorail
2nd Tier Ser 2000 7.375 01/01/40 1,054,910
--------- ------------
2,515 2,652,538
--------- ------------
Refunded (8.7%)
2,000 Baxter County, Arkansas, Baxter County Regional Hospital Impr &
Refg Ser 1999 B 5.625 09/01/09+ 2,086,780
1,000 St Johns County Industrial Development Authority, Florida,
Glenmoor Ser 1999 A 8.00 01/01/10+ 1,115,190
3,850 Fenton, Missouri, Gravois Bluffs Redevelopment Ser 2001 A 7.00 10/01/11+ 4,415,219
1,000 New Jersey Economic Development Authority,Cedar Crest Village
Inc Ser 2001 A 7.25 11/15/11+ 1,155,210
1,000 Chester County Health & Education Facilities Authority,
Pennsylvania, Jenner's Pond Inc Ser 2002 7.625 07/01/12+ 1,196,400
2,000 Austin Convention Enterprises Inc, Texas, Convention Center Hotel
Ser 2000 A 6.70 01/01/11+ 2,212,520
2,100 Vermont Economic Development Authority, Wake Robin Corp
Ser 1999 A 6.75 03/01/09+ 2,249,373
--------- ------------
12,950 14,430,692
--------- ------------
182,605 TOTAL TAX-EXEMPT MUNICIPAL BONDS (IDENTIFIED COST $155,410,367) 165,125,380
--------- ------------
SHORT TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS (1.9%)
100 Missiouri Health & Education, Washington University
Ser 1996 D (Demand 03/01/07) 3.61* 09/01/30 100,000
3,100 North Central Texas Health Facility Development Corporation 3.63* 12/01/15 3,100,000
--------- ------------
Presbyterian Medical Center Ser 1985 D (MBIA) (Demand 03/01/07)
3,200 Total Short-Term Tax-Exempt Municipal Obligations (Cost $3,200,000) 3,200,000
--------- ------------
3,200 Total Investments (Cost $158,610,367)(b)(c) 168,325,380
--------- ------------
Floating Rat Note Obligation Related to Securities Held (-3.60%)
(6,000) Note with interest rate of 3.75% at February 28, 2007 and contractual
maturities of collateral ranging from 10/01/31 to 10/01/37+++
(Cost ($6,000,000))(d) (6,000,000)
------------
179,805 TOTAL NET INVESTMENTS (IDENTIFIED COST $152,610,367) 98.5% 162,325,380
OTHER ASSETS IN EXCESS OF LIABILITIES 1.5% 2,411,660
--------- ------------
NET ASSETS 100.0% $164,737,040
============
----------
COPs Certificate of Participation.
AMT Alternative Minimum Tax.
RITES Residual Interest Tax-Exempt Security (illiquid security).
WI Security purchased on a when - issued basis.
+ Prerefunded to call date shown.
++ Joint exemption in locations shown.
+++ Floating rate note obligations related to securities held. The interest
rate shown reflects the rate in effect at February 28, 2007.
@ Security is a "step-up" bond where the coupon increases on a
predetermined future date
@@ Underlying security related to inverse floater entered into by the Fund.
## Current coupon rate for inverse floating rate municipal obligation. This
rate resets periodically as the auction rate on the related security
changes. Positions in inverse floating rate municipal obligations have a
total value of $1,049,300 which represents 0.6% of net assets.
* Current coupon of variable rate demand obligation.
** A portion of this security has been physically segregated in connection
with open futures contracts in the amount of $16,250.
(a) Resale is restricted to qualified institutional Investors.
(b) Securities have been designated as collateral in an amount equal to
$3,725,281 in connection with open futures, open interest rate swap
contracts and the purchase of a when-issued security.
(c) The aggregate cost for federal income tax purposes approximates the
aggregate cost for book purposes. The aggregate gross unrealized
appreciation is $9,779,295 and the aggregate gross unrealized
depreciation is $64,282, resulting in net unrealized appreciation of
$9,715,013.
(d) Floating Rate Note Obligations Related to Securities Held - The Fund
enters into transactions in which it transfers to Dealer Trusts ("Dealer
Trusts"), fixed rate bonds in exchange for cash and residual interests
in the Dealer Trusts' assets and cash flows, which are in the form of
inverse floating rate investments. The Dealer Trusts fund the purchases
of the fixed rate bonds by issuing floating rate notes to third parties
and allowing the Fund to retain residual interest in the bonds. The Fund
enters into shortfall agreements with the Dealer Trusts which commit the
Fund to pay the Dealer Trusts, in certain circumstances, the difference
between the liquidation value of the fixed rate bonds held by the Dealer
Trusts and the liquidation value of the floating rate notes held by
third parties, as well as any shortfalls in interest cash flows. The
residual interests held by the Fund (inverse floating rate investments)
include the right of the Fund (1) to cause the holders of the floating
rate notes to tender their notes at par at the next interest rate reset
date, and (2) to transfer the municipal bond from the Dealer Trusts to
the Fund, thereby collapsing the Dealer Trusts. The Fund accounts for
the transfer of bonds to the Dealer Trusts as secured borrowings, with
the securities transferred remaining in the Fund's investment assets,
and the related floating rate notes reflected as Fund liabilities. The
notes issued by the Dealer Trusts have interest rates that reset weekly
and the floating rate note holders have the option to tender their notes
to the Dealer Trusts for redemption at par at each reset date. At
February 28, 2007, Fund investments with a value of $8,070,500 are held
by the Dealer Trusts and serve as collateral for the $6,000,000 in
floating rate note obligations outstanding at that date. Contractual
maturities of the floating rate note obligations and interest rates in
effect at February 28, 2007 are presented in the "Portfolio of
Investments".
Bond Insurance:
Ambac Ambac Assurance Corporation.
MBIA Municipal Bond Investors Assurance Corporation.
FUTURES CONTRACTS OPEN AT FEBRUARY 28, 2007:
DESCRIPTION, UNDERLYING
DELIVERY MONTH FACE AMOUNT
NUMBER OF CONTRACTS LONG/SHORT AND YEAR AT VALUE UNREALIZED DEPRECIATION
------------------- ---------- -------------------------- ------------ -----------------------
25 Short U.S. Treasury Note 10 Year
June 2007 $(2,714,844) $(3,389)
=======
INTEREST RATE SWAP CONTRACT OPEN AT FEBRUARY 28, 2007:
NOTIONAL PAYMENTS PAYMENTS TERMINATION UNREALIZED
COUNTERPARTY AMOUNT (OOO) MADE BY FUND RECEIVED BY FUND DATE APPRECIATION
--------------------- ------------- ----------------- ------------------------- ----------- ------------
Floating Rate BMA
J.P. Morgan Chase Co. $12,000 Fixed Rate 3.6075% (Bond Market Association) 05/25/17 $18,417
=======
GEOGRAPHIC SUMMARY OF INVESTMENTS
BASED ON MARKET VALUE AS A PERCENT OF TOTAL NET INVESTMENTS
Alabama 0.6%
Alaska 0.6
Arkansas 1.3
California 5.1
Colorado 5.4
Connecticut 1.9
District of Columbia 0.2
Florida 9.9
Georgia 1.3
Hawaii 2.1
Illinois 4.8
Indiana 0.7
Iowa 1.0
Kansas 1.0
Kentucky 0.3
Maryland 3.3
Massachusetts 2.6
Michigan 0.4
Minnesota 1.0
Missouri 5.7
Nevada 3.4
New Hampshire 5.1
New Jersey 5.8
New York 9.0
North Carlolina 1.3
North Dakota 0.9
Ohio 0.1
Pennsylvania 8.3
South Carolina 1.3
Tennessee 3.0
Texas 8.1
Vermont 1.4
Virginia 2.7
Washington 0.6
Joint exemption * (0.2)
-----
Total ** 100.0%
=====
---------
* Joint exemptions have been included in each geographic location
** Does not include open short futures contracts with an underlying face
amount of $2,714,844 with unrealized depreciation of $3,389 and an open
interest rate swap contract with unrealized appreciation of $18,417.
ITEM 2. CONTROLS AND PROCEDURES.
(a) The Trust's principal executive officer and principal financial officer have
concluded that the Trust's disclosure controls and procedures are sufficient to
provide reasonable assurance that information required to be disclosed by the
Trust in this Form N-Q was recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's ("SEC")
rules and forms, based upon such officers' evaluation of these controls and
procedures as of a date within 90 days of the filing date of the report. The
Trust's principal executive officer and principal financial officer have also
concluded that the Trust's disclosure controls and procedures designed to ensure
that information required to be disclosed by the Trust in this Form N-Q is
accumulated and communicated to the Trust's management, including its principal
executive officer and principal financial officer, as appropriate to allow
timely decisions regarding required disclosure were effective.
Management of the Trust has determined that as of and prior to November 30,
2006, the Trust's fiscal quarter end period, the Trust had a deficiency in its
internal control over financial reporting related to the review, analysis and
determination of whether certain transfers of municipal securities qualified for
sale accounting under the provisions of Statement of Financial Accounting
Standards No. 140 "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities." Since November 30, 2006, and prior to the
issuance of the Trust's quarterly schedule of portfolio holdings, management has
revised its disclosure controls and procedures and its internal control over
financial reporting in order to improve the controls' effectiveness to ensure
that transactions in transfer of municipal securities are accounted for
properly.
Management notes that other investment companies investing in similar
investments over similar time periods had been accounting for such investments
in a similar manner as the Trust. Accordingly, other investment companies are
also concluding that there was a material weakness in their internal control
over financial reporting of such investments. There was no impact to the net
asset value of the Trust's shares or the Trust's total return for any period as
a result of the changes in financial reporting of such investments.
(b) There were no changes in the Trust's internal control over financial
reporting that occurred during the fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the Fund's internal control over
financial reporting. However, as discussed above, subsequent to November 30,
2006, the Fund's internal control over financial reporting was revised.
ITEM 3. EXHIBITS.
(a) A separate certification for each principal executive officer and principal
financial officer of the registrant are attached hereto.
2
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.
Morgan Stanley Municipal Income Opportunities Trust
/s/ Ronald E. Robison
-------------------------------------
Ronald E. Robison
Principal Executive Officer
April 19, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
/s/ Ronald E. Robison
-------------------------------------
Ronald E. Robison
Principal Executive Officer
April 19, 2007
/s/ Francis Smith
-------------------------------------
Francis Smith
Principal Financial Officer
April 19, 2007
3