nvq
 
 
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)
     
522 Fifth Avenue, New York, New York   10036
(Address of principal executive offices)   (Zip code)
Randy Takian
522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)
Registrant’s telephone number, including area code: 212-296-6963
Date of fiscal year end: May 31, 2010
Date of reporting period: August 31, 2009
 
 
Item 1. Schedule of Investments.
The Fund’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 § August 31, 2009 (unaudited)
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
       
Tax-Exempt Municipal Bonds (103.7%)
                        
       
Alabama (1.1%)
                        
$ 1,000    
Colbert County-Northwest Alabama Health Care Authority, Helen Keller Hospital Ser 2003
     5.75 %     06/01/27     $ 884,140  
  400    
Cullman Medical Clinic Board, Cullman Medical Park South, Regional Medical Center, Inc. Ser 1993-A
     6.50       02/15/23       390,888  
       
 
                      
       
 
                     1,275,028  
       
 
                      
       
Arizona (2.9%)
                        
  1,550    
Navajo County Pollution Control Corp., Ser B
     5.50       06/01/34       1,575,931  
  1,225    
Pima County Industrial Development Authority, Constellation Schools Ser 2008
     7.00       01/01/38       982,842  
  800    
Pima County Industrial Development Authority, Water & Wastewater Global Water Resources Ser 2007 (AMT)
     6.55       12/01/37       594,136  
  400    
Pinal County Electric District No 4, Ser 2008
     6.00       12/01/38       371,464  
       
 
                      
       
 
                     3,524,373  
       
 
                      
       
California (4.8%)
                        
  1,760    
California County Tobacco Securitization Agency, Gold County Settlement Funding Corp. Ser 2006 (a)
     0.00       06/01/33       222,006  
  335    
California Municipal Finance Authority, High Tech High-Media Arts Ser 2008 (144A) (b)
     5.875       07/01/28       260,483  
  1,000    
California Statewide Communities Development Authority, California Baptist University Ser 2007 A
     5.50       11/01/38       669,180  
  400    
California Statewide Communities Development Authority, Thomas Jefferson School of Law Ser 2008 A (b)
     7.25       10/01/38       363,800  
  995    
Daly City Housing Development Finance Agency, Franciscan Mobile Home Park Third Tier Refg Ser 2007 C
     6.50       12/15/47       749,036  
  3,000    
Golden State Tobacco Securitization Corp., Asset Backed Ser 2007 A-1
     5.125       06/01/47       2,105,850  
  800    
Quechan Indian Tribe of Fort Yuma, Indian Reservation Ser 2008
     7.00       12/01/27       567,648  
  1,000    
Santa Ana Unified School District, Unified School District Community Facilities, District # 2004-1, Central Park Ser 2005
     5.10       09/01/35       663,690  
  13,000    
Silicon Valley Tobacco Securitization Authority, Santa Clara Tobacco Securitization Corp. Ser 2007 C (a)
     0.00       06/01/56       116,740  
       
 
                      
       
 
                     5,718,433  
       
 
                      
       
Colorado (4.1%)
                        
  500    
Colorado Health Facilities Authority, Christian Living Communities Ser 2006 A
     9.00       01/01/34       520,065  
  1,000    
Colorado Health Facilities Authority, Christian Living Communities Ser 2006 A
     5.75       01/01/37       742,430  
  280    
Colorado Housing & Finance Authority, 1998 Ser B-3
     6.35       11/01/29       288,649  
  1,000    
Copperleaf Metropolitan District No 2, Ser 2006
     5.95       12/01/36       571,670  
  2,000    
Elk Valley Public Improvement, Ser 2001 A
     7.35       09/01/31       1,649,240  
  2,000    
Northwest Metropolitan District No 3, Ser 2005
     6.25       12/01/35       1,078,260  
       
 
                      
       
 
                     4,850,314  
       
 
                      
       
Connecticut (0.8%)
                        
  1,970    
Georgetown Special Taxing District, Ser 2006 A
     5.125       10/01/36       915,301  
       
 
                      
       
District of Columbia (0.7%)
                        
  540    
District of Columbia, Refg, Ser 2009 B (c)
     5.00       12/01/25       594,128  
  220    
Metropolitan Washington Airports Authority, District of Columbia & Virginia, CaterAir International Corp. Ser 1991 (AMT) (d)
     10.125       09/01/11       215,670  
       
 
                      
       
 
                     809,798  
       
 
                      
See Notes to Financial Statements

1

 

Morgan Stanley Municipal Income Opportunities Trust
Portfolio of Investments § August 31, 2009 (unaudited) continued
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
       
Florida (16.4%)
                        
$ 1,855    
Beacon Lakes Community Development District, Ser 2003 A
     6.90 %     05/01/35     $ 1,521,304  
  935    
Bellalago Educational Facilities Benefit District, Bellalago Charter School Ser 2004 B
     5.80       05/01/34       729,347  
  645    
Brevard County Health Facilities Authority, Buena Vida Estates, Inc. Ser 2007
     6.75       01/01/37       518,064  
  2,960    
Broward County Professional Sports Facilities, Civic Arena Refg. Ser 2006 A (CR) (FSA AMBAC Insd) (c)
     5.00       09/01/23       3,065,698  
  500    
County of Alachua, North Florida Retirement Village
     5.25       11/15/17       436,935  
  800    
County of Alachua, North Florida Retirement Village
     5.875       11/15/36       583,064  
  1,930    
County of Escambia, Pensacola Care Development Centers Ser 1989 (b)
     10.25       07/01/11       1,941,734  
  450    
County of Escambia, Pensacola Care Development Centers Ser 1989 A (b)
     10.25       07/01/11       452,736  
  980    
Fiddlers Creek Community Development District No 1, Ser 2005 (b)
     6.00       05/01/38       655,346  
  500    
Fountainbleau Lakes Community Development District, Ser 2007 B
     6.00       05/01/15       268,575  
  750    
Grand Bay at Doral Community Development District, Ser 2007 A
     6.00       05/01/39       390,847  
  1,000    
Lee County Industrial Development Authority, Ser 2007 A
     5.375       06/15/37       624,690  
  500    
Miami Beach Health Facilities Authority, Refg Ser 2004
     6.75       11/15/21       430,675  
  1,000    
Midtown Miami Community Development District, Parking Garage Ser 2004 A
     6.25       05/01/37       746,160  
  2,000    
Orange County Health Facilities Authority, Orlando Lutheran Towers Inc, Ser 2007
     5.50       07/01/32       1,358,340  
  500    
Orange County Health Facilities Authority, Orlando Lutheran Towers, Inc. Ser 2005
     5.70       07/01/26       383,710  
  1,000    
Orange County Health Facilities Authority, Westminister Community Care Services, Inc. Ser 1999
     6.75       04/01/34       826,350  
  600    
Pinellas County Health Facility Authority, Oaks of Clearwater Ser 2004
     6.25       06/01/34       595,446  
  950    
Renaissance Commons Community Development District, 2005 Ser A
     5.60       05/01/36       604,409  
  2,860    
South Miami Health Facilities Authority, Baptist Health South Florida Obligated Group Ser 2007 (c)
     5.00       08/15/32       2,724,994  
  500    
Split Pine Community Development District, Ser 2007 A
     5.25       05/01/39       283,905  
  600    
Tolomato Community Development District, Special Assessment Ser 2007
     6.55       05/01/27       449,940  
       
 
                      
       
 
                     19,592,269  
       
 
                      
       
Georgia (1.4%)
                        
  2,000    
City of Atlanta, Eastside Ser 2005 B
     5.60       01/01/30       1,621,620  
       
 
                      
       
Hawaii (2.0%)
                        
  1,000    
Hawaii State Department of Budget & Finance, Kahala Nui Ser 2003 A
     8.00       11/15/33       1,002,470  
  1,220    
Hawaii State Ser 2008 DK (c)
     5.00       05/01/23       1,339,809  
       
 
                      
       
 
                     2,342,279  
       
 
                      
       
Idaho (0.6%)
                        
  975    
Idaho Health Facilities Authority, Valley Vista Care Corp Refg Ser 2007 (b)
     6.125       11/15/27       743,506  
       
 
                      
       
Illinois (7.8%)
                        
  750    
Bolingbrook Special Service Area No. 1, Ser 2005
     5.90       03/01/27       537,532  
  2,000    
City of Chicago Lake Shore East Ser 2002
     6.75       12/01/32       1,592,520  
  500    
Hampshire Special Service Area No. 18, Crown Development Projects -Tamms Farm-Ser A
     6.00       03/01/44       255,920  
See Notes to Financial Statements

2

 

Morgan Stanley Municipal Income Opportunities Trust
Portfolio of Investments § August 31, 2009 (unaudited) continued
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
$ 1,000    
Illinois Finance Authority, Elmhurst Memorial Healthcare Ser 2008 A
     5.625 %     01/01/37     $ 852,700  
  1,000    
Illinois Finance Authority, Landing at Plymouth Ser 2005 A
     6.00       05/15/37       734,620  
  1,000    
Illinois Finance Authority, Luther Oaks Ser 2006 A
     6.00       08/15/39       700,810  
  1,650    
Illinois Finance Authority, Montgomery Place Ser 2006 A
     5.75       05/15/38       1,161,567  
  1,200    
Illinois Toll Highway Authority, Ser 2008 B (c)
     5.50       01/01/33       1,278,260  
  725    
Lincolnshire Special Service Area No. 1, Sedgebrook Ser 2004
     6.25       03/01/34       503,774  
  1,000    
United City of Yorkville, Cannonball/Beecher Road Ser 2007
     5.75       03/01/28       750,720  
  1,000    
Village of Bolingbrook, Bolingbrook Sales Tax Ser 2005
     6.25       01/01/24       445,000  
  650    
Will-Kankakee Regional Development Authority, Senior Estates Supportive Living Ser 2007 (AMT)
     7.00       12/01/42       507,383  
       
 
                      
       
 
                     9,320,806  
       
 
                      
       
Iowa (1.4%)
                        
  785    
County of Jefferson, Jefferson County Hospital Project Ser C
     5.95       08/01/37       552,750  
  1,000    
Iowa Finance Authority, Bethany Life Communities Refg Ser 2006 A
     5.55       11/01/41       655,550  
  750    
Iowa Finance Authority Health Care Facilities, Madrid Homes Ser 2007
     5.90       11/15/37       520,185  
       
 
                      
       
 
                     1,728,485  
       
 
                      
       
Kansas (0.6%)
                        
  900    
City of Olathe, Catholic Care Ser 2006 A
     6.00       11/15/38       664,839  
       
 
                      
       
Louisiana (1.3%)
                        
  794    
Lakeshore Villages Master Community Development District, Special Assessment Ser 2007
     5.25       07/01/17       626,982  
  600    
Louisiana Public Facilities Authority, Lake Charles Memorial Hospital Refg Ser 2007 (b)
     6.375       12/01/34       452,142  
  500    
Parish of St. John the Baptist, Marathon Oil Corp. Project Ser 2007 A
     5.125       06/01/37       457,200  
       
 
                      
       
 
                     1,536,324  
       
 
                      
       
Maryland (1.5%)
                        
  1,000    
Maryland Economic Development Corp., Chesapeake Bay Conference Center Ser 2006 A
     5.00       12/01/31       530,080  
  750    
Maryland Health & Higher Educational Facilities Authority, King Farm Presbyterian Community 2007 Ser A
     5.30       01/01/37       453,960  
  800    
Maryland Health & Higher Educational Facilities Authority, Washington Christian Academy Ser 2006
     5.50       07/01/38       404,816  
  500    
Maryland Industrial Development Financing Authority, Our Lady of Good Counsel High School Ser 2005 A
     6.00       05/01/35       423,260  
       
 
                      
       
 
                     1,812,116  
       
 
                      
       
Massachusetts (3.1%)
                        
  425    
Massachusetts Development Finance Agency, Linden Ponds, Inc. Facility Ser 2007 A
     5.75       11/15/42       264,159  
  1,500    
Massachusetts Development Finance Agency, Loomis Communities Ser 1999 A
     5.75       07/01/23       1,344,570  
  1,570    
Massachusetts Development Finance Agency, New England Center for Children Ser 1998
     5.875       11/01/18       1,359,447  
  1,000    
Massachusetts Health & Educational Facilities Authority, The Learning Center for Deaf Children Ser 1999 C
     6.125       07/01/29       761,990  
       
 
                      
       
 
                     3,730,166  
       
 
                      
See Notes to Financial Statements

3

 

Morgan Stanley Municipal Income Opportunities Trust
Portfolio of Investments § August 31, 2009 (unaudited) continued
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
       
Michigan (2.0%)
                        
$ 500    
Dearborn Economic Development Corp., Henry Ford Village, Inc. Refg Ser 2008
     7.00 %     11/15/28     $ 433,100  
  400    
Michigan Strategic Fund, Limited Obligation Revenue Ser 2003 A-1 (AMT)
     6.75       12/01/28       414,584  
  2,000    
Michigan Tobacco Settlement Finance Authority, Ser 2007 A
     6.00       06/01/48       1,540,680  
       
 
                      
       
 
                     2,388,364  
       
 
                      
       
Minnesota (1.5%)
                        
  450    
City of Brooklyn Park, Prairie Seeds Academy Project Ser 2009 A
     9.25       03/01/39       476,055  
  600    
City of Minneapolis, Health Care System Revenue Bonds, Fairview Health Services
     6.75       11/15/32       658,086  
  750    
City of North Oaks, Presbyterian Homes Ser 2007
     6.125       10/01/39       637,215  
       
 
                      
       
 
                     1,771,356  
       
 
                      
       
Mississippi (0.3%)
                        
  400    
Mississippi Business Finance Corp., System Energy Resources, Inc. Ser 1998
     5.875       04/01/22       374,664  
       
 
                      
       
Missouri (6.5%)
                        
  750    
Branson Hills Infrastructure Facilities Community Improvement District, Ser 2007 A
     5.50       04/01/27       560,557  
  500    
Branson Regional Airport Transportation Development District, Ser 2007 B (AMT)
     6.00       07/01/37       326,990  
  2,000    
City of Des Peres, West County Center Ser 2002
     5.75       04/15/20       1,732,740  
  3,850    
City of Fenton, Gravois Bluffs Redevelopment Ser 2001 A
     7.00       10/01/11 (e)     4,339,181  
  250    
St Louis County Industrial Development Authority, Health Facilitites, Ranken Jordan Project
     5.00       11/15/22       198,068  
  750    
St Louis Industrial Development Authority, St Andrews Resources for Seniors Ser 2007 A
     6.375       12/01/41       558,225  
       
 
                      
       
 
                     7,715,761  
       
 
                      
       
Nevada (1.6%)
                        
  450    
City of Henderson, Local Improvement District #T-18, Ser 2006 (b)
     5.30       09/01/35       162,765  
  1,000    
Director of the State of Nevada Department of Business & Industry, Las Vegas Monorail 2nd Tier Ser 2000 (b)
     7.375       01/01/40       10,000  
  500    
Las Vegas Redevelopment Agency, Tax Increment Revenue Ser 2009 A
     8.00       06/15/30       544,540  
  1,050    
Mesquite Special Improvement District No 07-01, Local Improvement-Anthem at Mesquite Ser 2007
     6.00       08/01/23       750,593  
  600    
Sparks Local Improvement District #3, Ser 2008
     6.50       09/01/20       505,674  
       
 
                      
       
 
                     1,973,572  
       
 
                      
       
New Hampshire (2.6%)
                        
  5,485    
New Hampshire Housing Finance Authority, Single Family Residential 1983 Ser B (a)
     0.00       01/01/15       3,166,655  
       
 
                      
       
New Jersey (5.1%)
                        
  1,000    
New Jersey Economic Development Authority, Franciscan Oaks Ser 1997
     5.70       10/01/17       921,110  
  730    
New Jersey Economic Development Authority, Lions Gate Ser 2005 A
     5.875       01/01/37       558,070  
  700    
New Jersey Economic Development Authority, Seashore Gardens Living Center Ser 2006
     5.375       11/01/36       472,451  
  1,000    
New Jersey Economic Development Authority, The Presbyterian Home at Montgomery Ser 2001 A
     6.375       11/01/31       783,180  
  2,000    
New Jersey Economic Development Authority, United Methodist Homes of New Jersey Ser 1998
     5.125       07/01/25       1,416,160  
  2,000    
New Jersey Health Care Facilities Financing Authority, Raritan Bay Medical Center Ser 1994 (b)
     7.25       07/01/27       1,709,700  
  275    
Tobacco Settlement Financing Corp., Ser 2007-1 A
     4.625       06/01/26       222,577  
       
 
                      
       
 
                     6,083,248  
       
 
                      
See Notes to Financial Statements

4

 

Morgan Stanley Municipal Income Opportunities Trust
Portfolio of Investments § August 31, 2009 (unaudited) continued
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
       
New York (4.7%)
                        
$ 3,000    
Brookhaven Industrial Development Agency, Woodcrest Estates Ser 1998 A (AMT)
     6.375 %     12/01/37     $ 2,272,560  
  625    
Nassau County Industrial Development Agency, Continuing Care Retirement Community Revenue, Amsterdam at Harborside Project Ser 2007 A
     6.50       01/01/27       506,069  
  1,800    
New York City Industrial Development Agency, 7 World Trade Center LLC Ser 2005 A
     6.50       03/01/35       1,368,162  
  500    
New York City Industrial Development Agency, Polytechnic University Refg Ser 2007 (ACA Insd)
     5.25       11/01/37       404,635  
  1,000    
New York Liberty Development Corp., National Sports Museum, Ser 2006 A (b)(f)
     6.125       02/15/19       1,000  
  1,500    
Suffolk County Industrial Development Agency, Medford Hamlet Ser 2006
     6.375       01/01/39       1,054,635  
       
 
                      
       
 
                     5,607,061  
       
 
                      
       
North Carolina (0.2%)
                        
  400    
North Carolina Medical Care Commission, Pennsburg Ser 2005 A
     6.125       10/01/35       274,288  
       
 
                      
       
North Dakota (1.2%)
                        
  1,500    
City of Grand Forks, Valley Square Ser 2006
     5.30       12/01/34       1,015,890  
  500    
County of Ward, Trinity Ser 2006
     5.125       07/01/29       410,900  
       
 
                      
       
 
                     1,426,790  
       
 
                      
       
Ohio (2.9%)
                        
  1,900    
Buckeye Tobacco Settlement Financing Authority, Asset-Backed Ser 2007 A-2
     5.875       06/01/30       1,610,839  
  600    
City of Centerville, Bethany Lutheran Village Ser 2007 A
     6.00       11/01/38       492,432  
  850    
County of Cuyahoga, Eliza Jennings Senior Care Ser 2007 A
     5.75       05/15/27       625,464  
  450    
County of Tuscarawas, Twin City Hospital Ser 2007
     6.35       11/01/37       372,690  
  400    
Ohio Air Quality Development Authority, Pollution Control First Energy Rev Ser C
     5.625       06/01/18       414,752  
       
 
                      
       
 
                     3,516,177  
       
 
                      
       
Oklahoma (0.9%)
                        
  650    
Chickasawa Nation Health Systems Ser 2007
     6.25       12/01/32       563,875  
  500    
Citizen Potawatomi Nation Senior Obligation Tax Revenue Ser 2004 A
     6.50       09/01/16       481,255  
       
 
                      
       
 
                     1,045,130  
       
 
                      
       
Pennsylvania (6.7%)
                        
  2,000    
Allegheny County Hospital Development Authority, West Penn Ser 2007 A
     5.375       11/15/40       1,287,180  
  1,500    
Bucks County Industrial Development Authority, Ann’s Choice Ser 2005 A
     6.125       01/01/25       1,254,420  
  1,000    
Chester County Health & Education Facilities Authority, Jenner’s Pond Inc Ser 2002
     7.625       07/01/12 (e)     1,191,530  
  750    
Harrisburg Authority, Harrisburg University of Science & Technology Ser 2007 B
     6.00       09/01/36       617,212  
  1,000    
Montgomery County Industrial Development Authority, Whitemarsh Community Ser 2005
     6.25       02/01/35       668,480  
  1,000    
Pennsylvania Economic Development Financing Authority, Reliant Energy, Inc. Ser 2001 A (AMT)
     6.75       12/01/36       979,980  
  1,230    
Pennsylvania Intergovernmental Cooperative Authority, Phladelphia Funding Prog (c)
     5.00       06/15/21       1,345,235  
  995    
Washington County Redevelopment Authority, Victory Centre/Tanger Outlet Redevelopment Authority Ser 2006 A
     5.45       07/01/35       604,154  
       
 
                      
       
 
                     7,948,191  
       
 
                      
       
South Carolina (1.6%)
                        
  1,250    
City of Myrtle Beach, Air Force Base Ser 2006 A
     5.30       10/01/35       724,137  
See Notes to Financial Statements

5

 

Morgan Stanley Municipal Income Opportunities Trust
Portfolio of Investments § August 31, 2009 (unaudited) continued
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
$ 300    
County of Georgetown, Environment Improvement Revenue, International Paper Co., Refg Ser 2000 A
     5.95 %     03/15/14     $ 305,529  
  625    
South Carolina Jobs-Economic Development Authority, Furman Project Ser 2007 A
     6.00       11/15/37       433,725  
  750    
South Carolina Jobs-Economic Development Authority, Wesley Commons Ser 2006
     5.30       10/01/36       495,113  
       
 
                      
       
 
                     1,958,504  
       
 
                      
       
Tennessee (2.1%)
                        
  800    
Johnson City Health & Educational Facilities Board, Mountain States Health Alliance Ser 2006A
     5.50       07/01/31       747,912  
  500    
Shelby County Health Educational & Housing Facilities Board, Trezevant Manor Ser 2006 A
     5.75       09/01/37       397,935  
  750    
Shelby County Health Educational & Housing Facilities Board, Village at Germantown Ser 2003 A
     7.25       12/01/34       647,535  
  500    
Shelby County Health Educational & Housing Facilities Board, Village at Germantown Ser 2006
     6.25       12/01/34       376,520  
  400    
Trenton Health & Educational Facilities Board Revenue, Ser 2009
     9.25       04/01/39       403,944  
       
 
                      
       
 
                     2,573,846  
       
 
                      
       
Texas (7.7%)
                        
  500    
Alliance Airport Authority, Federal Express Corp Refg Ser 2006 (AMT)
     4.85       04/01/21       434,325  
  2,000    
Austin Convention Enterprises, Inc., Convention Center Hotel Ser 2006 B (b)
     5.75       01/01/34       1,427,820  
  400    
Brazos River Harbor Navigation, District of Brazoria County, The Dow Chemical Project Ser 2002A-4
     5.95       05/15/33       350,236  
  425    
City of Houston, Continental Airlines, Inc. Ser 2001 E (AMT)
     6.75       07/01/21       377,498  
  425    
City of Houston, Continental Airlines, Inc. Ser 2001 E (AMT)
     6.75       07/01/29       363,396  
  1,000    
Decatur Hospital Authority, Wise Regional Health Ser 2004 A
     7.125       09/01/34       862,720  
  1,250    
HFDC of Central Texas, Inc., Legacy at Willow Bend, Ser 2006 A
     5.75       11/01/36       854,475  
  1,000    
Lubbock Health Facilities Development Corp., Carillon Ser 2005 A
     6.50       07/01/26       801,670  
  450    
Tarrant County Cultural Education Facilities Finance Corp., Northwest Senior Housing Corp. Edgemere Ser 2006 A
     6.00       11/15/36       364,387  
  3,305    
Texas Department of Housing and Community Affairs, 2007 Ser B (AMT) (c)
     5.15       09/01/27       3,325,475  
       
 
                      
       
 
                     9,162,002  
       
 
                      
       
Utah (0.7%)
                        
  1,000    
County of Emery Environmental Improvement, Pacificorp Ser 1996 (AMT)
     6.15       09/01/30       799,860  
       
 
                      
       
Virginia (2.0%)
                        
  2,000    
Peninsula Ports Authority, Baptist Homes Ser 2006 C
     5.40       12/01/33       1,387,980  
  700    
Peninsula Town Center Community Development Authority, Ser 2007
     6.45       09/01/37       521,038  
  500    
Virginia Small Business Financing Authority Revenue
     9.00       07/01/39       499,120  
       
 
                      
       
 
                     2,408,138  
       
 
                      
       
Washington (1.8%)
                        
  400    
King County Public Hospital District No. 4
     7.25       12/01/38       401,920  
  650    
Port of Seattle, Northwest Airlines, Inc. Ser 2001 (AMT)
     7.25       04/01/30       526,442  
  500    
Washington Health Care Facilities Authority, Seattle Cancer Care Alliance Ser 2008
     7.375       03/01/38       540,590  
See Notes to Financial Statements

6

 

Morgan Stanley Municipal Income Opportunities Trust
Portfolio of Investments § August 31, 2009 (unaudited) continued
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
$ 1,000    
Washington State Housing Finance Commission, Skyline at First Hill Ser 2007 A
     5.625 %     01/01/38     $ 659,080  
       
 
                      
       
 
                     2,128,032  
       
 
                      
       
West Virginia (0.6%)
                        
  825    
West Virginia State Hospial Finance Authority, Thomas Health Ser 2008
     6.50       10/01/38       692,060  
       
 
                      
       
Wisconsin (0.5%)
                        
  600    
Wisconsin Health & Educational Facilities Authority, ProHealth Care, Inc. Obligated Group Ser 2009
     6.375       02/15/29       629,268  
       
 
                      
       
Total Tax-Exempt Municipal Bonds (Cost $150,929,317) (g)
             103.7 %     123,828,624  
       
Other Assets in Excess of Liabilities
             2.3       2,743,926  
 
       
Floating Rate Note and Dealer Trusts Obligations Related to Securities Held
                        
  (7,161 )  
Notes with interest rates ranging from .30% to .54% at August 31, 2009 and contractual maturities of collateral ranging from 06/15/21 to 01/01/33 (h) (Cost $(7,161,000))
             (6.0 )     (7,161,000 )
       
 
                    
       
Net Assets
             100.0 %   $ 119,411,551  
       
 
                    
 
AMT   Alternative Minimum Tax.
 
CR   Custodial Receipts.
 
(a)   Capital appreciation bond.
 
(b)   Resale is restricted to qualified institutional investors.
 
(c)   Underlying security related to inverse floater entered into by the Fund.
 
(d)   Joint exemption.
 
(e)   Prefunded to call date shown.
 
(f)   Non-income producing security; Bond in default.
 
(g)   The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes.
 
(h)   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 Trust (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 floating rate 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 August 31, 2009, the Fund’s investments with a value of $13,673,599 are held by the Dealer Trusts and serve as collateral for the $7,161,000 in floating rate note and dealer trust obligations outstanding at that date.
 
Bond Insurance:    
 
ACA   ACA Financial Guaranty Corporation.
 
AMBAC   AMBAC Assurance Corporation.
 
FSA   Financial Security Assurance Inc.
See Notes to Financial Statements

7

 

MS Municipal Income Opportunities Trust
Notes to the Portfolio of Investments
SFAS 157 Disclosure
8/31/2009
The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), effective June 1, 2008. In accordance with SFAS 157, fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. SFAS 157 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund’s investments. The inputs are summarized in the three broad levels listed below.
Level 1 – unadjusted quoted prices in active markets for identical investments
Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.
The following is a summary of the inputs used as of August 31, 2009 in valuing the Fund’s investments carried at value:
                                 
    Fair Value Measurements at August 31, 2009 Using  
            Unadjusted              
            Quoted Prices In     Significant     Significant  
            Active Market for     Other Observable     Unobservable  
            Identical Investments     Inputs     Inputs  
Investment Type   Total     (Level 1)     (Level 2)     (Level 3)  
 
Tax-Exempt Municipal Bonds
   $ 123,828,624       —     $ 123,828,624       —  
 
                        
Valuation of Investments — (1) portfolio securities are valued by an outside independent pricing service approved by the Trustees. The pricing service uses both a computerized grid matrix of tax-exempt securities and evaluations by its staff, in each case based on information concerning market transactions and quotations from dealers which reflect the mean between the last reported bid and ask price. The portfolio securities are thus valued by reference to a combination of transactions and quotations for the same or other securities believed to be comparable in quality, coupon, maturity, type of issue, call provisions, trading characteristics and other features deemed to be relevant. The Trustees believe that timely and reliable market quotations are generally not readily available for purposes of valuing tax-exempt securities and that the valuations supplied by the pricing service are more likely to approximate the fair value of such securities; (2) futures are valued at the latest sale price on the commodities exchange on which they trade unless it is determined that such price does not reflect their market value, in which case they will be valued at their fair value as determined in good faith under procedures established by and under the supervision of the Trustees; (3) interest rate swaps are marked-to-market daily based upon quotations from market makers; (4) investments in open-end mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (5) short-term debt securities having a maturity date of more than sixty days at time of purchase are valued on a mark-to-market basis until sixty days prior to maturity and thereafter at amortized cost based on their value on the 61st day. Short-term debt securities having a maturity date of sixty days or less at the time of purchase are valued at amortized cost, which approximates market value.

 

 

Item 2. Controls and Procedures.
(a) The Fund’s principal executive officer and principal financial officer have concluded that the Fund’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s 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.
(b) There were no changes in the Fund’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.
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/ Randy Takian
Randy Takian
Principal Executive Officer
October 22, 2009
     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/ Randy Takian
Randy Takian
Principal Executive Officer
October 22, 2009
/s/ Francis Smith
Francis Smith
Principal Financial Officer
October 22, 2009

3