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: 811-06591
Morgan Stanley Quality Municipal Income 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: October 31, 2010
Date of reporting period: January 31, 2010
 
 
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 Quality Municipal Income Trust*
Portfolio of Investments § January 31, 2010 (unaudited)
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
       
Tax-Exempt Municipal Bonds (167.3%)
                       
       
Alaska (0.9%)
                       
$ 4,000    
Northern Tobacco Securitization Corp., Asset Backed Ser 2006 A
    5.00 %     06/01/46     $ 2,701,000  
       
 
                     
       
Arizona (5.8%)
                       
  2,000    
Arizona State Transportation Board, Highway Refg Ser 2002 A
    5.25       07/01/19       2,185,920  
  650    
Maricopa County, Pollution Control Corp., Ser 2009 A
    6.00       05/01/29       684,086  
  3,000    
Phoenix Civic Improvement Corp., Airport Ser 2002 B (AMT) (NATL-RE & FGIC Insd)
    5.25       07/01/32       2,976,420  
  3,800    
Phoenix Civic Improvement Corp., Jr Lien Water Ser 2002 (NATL-RE & FGIC Insd)
    5.00       07/01/26       3,853,466  
  6,000    
Salt River Project Agricultural Improvement & Power District, 2002 Ser B (a)
    5.00       01/01/31       6,210,111  
  2,000    
Surprise Municipal Property Corp., Ser 2007
    4.90       04/01/32       1,607,540  
       
 
                     
       
 
                    17,517,543  
       
 
                     
       
California (27.8%)
                       
  1,575    
Alhambra Unified School District, Ser 2009 B (AGC Insd) (b)
    0.00       08/01/35       310,417  
  2,545    
Alhambra Unified School District, Ser 2009 B (AGC Insd) (b)
    0.00       08/01/36       468,254  
  2,000    
California Health Facilities Financing Authority, Cedars-Sinai Medical Center Ser 2005
    5.00       11/15/34       1,878,240  
  2,000    
California Health Facilities Financing Authority, Kaiser Permanente Ser 2006 A
    5.25       04/01/39       1,916,400  
  5,000    
California Infrastructure & Economic Development Bank, Bay Area Toll Bridges 1st Lien Ser 2003 (AMBAC Insd) (a)
    5.00       01/01/28  (c)     5,856,409  
  3,000    
California Infrastructure & Economic Development Bank, The Scripps Research Institute Ser 2005 A
    5.00       07/01/29       3,085,890  
  6,000    
California Pollution Control Financing Authority, Keller Canyon Landfill Co./Browning-Ferris Industries Inc. Ser 1992 (AMT)
    6.875       11/01/27       6,006,120  
  4,000    
California Statewide Communities Development Authority, Baptist University Ser 2007 A
    5.40       11/01/27       3,333,400  
  5,000    
California Statewide Communities Development Authority, John Muir Health Ser 2006 A
    5.00       08/15/32       4,784,850  
  960    
City & County of San Francisco, Laguna Honda Hospital Refg Ser 2008-R3 (AGC Insd) (a)
    5.00       06/15/28       983,261  
  4,000    
City of Los Angeles, Ser 2004 A (NATL-RE Insd)
    5.00       09/01/24       4,270,400  
  1,000    
County of San Diego, Burnham Institute for Medical Research Ser 2006 (COPs)
    5.00       09/01/34       825,530  
  4,685    
Dry Creek Joint Elementary School District, Election 2008 Ser 2009 (b)
    0.00       08/01/40       600,336  
  4,535    
Dry Creek Joint Elementary School District, Election 2008 Ser 2009 (b)
    0.00       08/01/41       543,248  
  6,000    
Golden State Tobacco Securitization Corp., Enhanced Asset Backed Ser 2005 A (AMBAC Insd)
    5.00       06/01/29       5,484,960  
  5,100    
Golden State Tobacco Securitization Corp., Enhanced Asset Backed Ser 2007 A-1
    5.125       06/01/47       3,522,723  
  1,150    
Golden State Tobacco Securitization Corp., Enhanced Asset Backed Ser 2007 A-1
    5.75       06/01/47       878,197  
  1,745    
Moreland School District, Ser 2014 C (AMBAC Insd) (b)
    0.00       08/01/29       509,610  
  1,270    
Oak Grove School District, Election 2008 Ser A (b)
    0.00       08/01/28       408,813  
  110    
Port of Oakland, Ser 2002 L (AMT) (NATL-RE & FGIC Insd)
    5.00       11/01/12  (c)     122,473  
  445    
Port of Oakland, Ser 2002 L (AMT) (NATL-RE & FGIC Insd)
    5.00       11/01/12  (c)     495,454  

 


 

Morgan Stanley Quality Municipal Income Trust*
Portfolio of Investments § January 31, 2010 (unaudited) continued
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
$ 890    
Port of Oakland, Ser 2002 L (AMT) (NATL-RE & FGIC Insd)
    5.00 %     11/01/21     $ 870,820  
  3,555    
Port of Oakland, Ser 2002 L (AMT) (NATL-RE & FGIC Insd)
    5.00       11/01/32       3,164,981  
  22,685    
San Bernardino Community College District, Election 2008 Ser B (b)
    0.00       08/01/44       2,288,009  
  3,720    
San Diego County Water Authority, Ser 2002 A (COPs) (NATL-RE Insd)
    5.00       05/01/27       3,823,007  
  2,500    
San Francisco City & County Public Utilities Commission, Ser 2009 A
    5.00       11/01/27       2,662,700  
  720    
San Rafael City High School District, Election Ser 2002 B (NATL-RE & FGIC Insd) (b)
    0.00       08/01/25       294,034  
  16,000    
Silicon Valley Tobacco Securitization Authority Tobacco Settlement, Santa Clara Tobacco Securitization Corp. Ser 2007 (b)
    0.00       06/01/36       1,693,920  
  4,000    
State of California, Ser 2004 A
    5.00       07/01/16       4,164,200  
  5,000    
State of California, Various Purpose Dtd 05/01/03
    5.25       02/01/19       5,241,200  
  5,000    
Tobacco Securitization Authority of Northern California, Sacramento County Tobacco Securitization Corporation Ser 2006 A-1
    5.00       06/01/37       3,788,750  
  1,350    
Twin Rivers Unified School District, Ser 2009 (BANs) (b)
    0.00       04/01/14       1,181,304  
  2,760    
University of California, Ser 2007-J (AGM Insd) (a)
    4.50       05/15/31       2,717,103  
  2,240    
University of California, Ser 2007-J (AGM Insd) (a)
    4.50       05/15/35       2,154,189  
  500    
University of California, Ser 2009 O
    5.25       05/15/39       524,510  
  10,100    
William S. Hart Union High School District, Ser 2009 A (b)
    0.00       08/01/32       2,306,941  
       
 
                     
       
 
                    83,160,653  
       
 
                     
       
Colorado (3.1%)
                       
  2,000    
Colorado Educational & Cultural Facilities Authority, Peak to Peak Charter School Refg & Impr Ser 2004 (XLCA Insd)
    5.25       08/15/34       1,956,740  
  2,000    
Colorado Health Facilities Authority, Adventist/Sunbelt Ser 2006 D
    5.00       07/01/39       2,014,880  
  1,750    
County of Boulder, University Corp. for Atmospheric Research Ser 2002 (NATL-RE Insd)
    5.375       09/01/18       1,893,640  
  1,750    
County of Boulder, University Corp. for Atmospheric Research Ser 2002 (NATL-RE Insd)
    5.375       09/01/21       1,890,052  
  1,590    
Denver Convention Center Hotel Authority, Refg Ser 2006 (XLCA Insd)
    5.00       12/01/30       1,353,488  
  265    
Public Authority for Colorado Energy, Natural Gas Ser 2008
    6.25       11/15/28       285,159  
       
 
                     
       
 
                    9,393,959  
       
 
                     
       
Connecticut (1.7%)
                       
  5,000    
Connecticut Housing Finance Authority, SubSer A-2 (AMT)
    5.15       05/15/38       5,012,350  
       
 
                     
       
Delaware (0.3%)
                       
  1,000    
County of New Castle, Newark Charter School Inc Ser 2006
    5.00       09/01/36       807,010  
       
 
                     
       
District of Columbia (1.8%)
                       
  6,000    
District of Columbia Ballpark, Ser 2006 B-1 (NATL-RE & FGIC Insd)
    5.00       02/01/31       5,441,700  
       
 
                     
       
Florida (8.7%)
                       
  2,000    
Broward County School Board, Ser 2001 A (COPs) (AGM Insd)
    5.00       07/01/26       2,017,620  
  2,000    
County of Miami-Dade, Building Better Communities Program Ser 2009 B-1
    6.00       07/01/38       2,208,300  
  1,250    
County of Miami-Dade, Miami International Airport Ser 2009 A (AGC Insd)
    5.00       10/01/25       1,299,500  

 


 

Morgan Stanley Quality Municipal Income Trust*
Portfolio of Investments § January 31, 2010 (unaudited) continued
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
$ 75    
Highlands County Health Facilities Authority, Adventist Health/Sunbelt Ser 2006 C
    5.25 %     11/15/16  (c)   $ 88,634  
  2,925    
Highlands County Health Facilities Authority, Adventist Health/Sunbelt Ser 2006 C
    5.25       11/15/36       2,926,404  
  3,300    
Jacksonville Electric Authority, St Johns Power Park Refg Issue 2 Ser 17
    5.00       10/01/18       3,487,605  
  1,500    
Lee County Industrial Development Authority, Shell Point Village/The Alliance Community for Retirement Living Inc., Ser 2006
    5.125       11/15/36       1,163,130  
  1,200    
Palm Beach County Solid Waste Authority, Ser 2009 (BHAC Insd)
    5.50       10/01/23       1,353,084  
  12,000    
South Miami Health Facilities Authority, Baptist Health South Florida Ser 2007
    5.00       08/15/42       11,498,040  
       
 
                     
       
 
                    26,042,317  
       
 
                     
       
Georgia (3.9%)
                       
  2,000    
City of Atlanta, Airport Ser 2004 J (AGM Insd)
    5.00       01/01/34       2,005,980  
  6,000    
Georgia State Road & Tollway Authority, Ser 2003
    5.00       10/01/22       6,371,580  
  3,000    
Georgia State Road & Tollway Authority, Ser 2003
    5.00       10/01/23       3,178,080  
       
 
                     
       
 
                    11,555,640  
       
 
                     
       
Hawaii (3.5%)
                       
  10,000    
City & County of Honolulu, Ser 2003 A (NATL-RE Insd) (a)
    5.25       03/01/26       10,489,900  
       
 
                     
       
Idaho (1.2%)
                       
  20    
Idaho Housing & Finance Association, Ser 1992 E (AMT)
    6.75       07/01/12       20,051  
  655    
Idaho Housing & Finance Association, Ser 2000 E (AMT)
    6.00       01/01/32       688,392  
  2,600    
Idaho Housing & Finance Association, Ser 2008 A (AGC Insd)
    5.25       07/15/23       2,868,398  
       
 
                     
       
 
                    3,576,841  
       
 
                     
       
Illinois (8.5%)
                       
  4,000    
City of Chicago, O’ Hare Int’l Airport Third Lien Ser 2003 B-2 (AMT) (AGM Insd)
    5.75       01/01/23       4,131,320  
  7,250    
City of Chicago, Project & Refg Ser 2007 A (CR) (AGM & FGIC Insd) (a)(d)
    5.00       01/01/37       7,291,804  
  1,650    
Illinois Finance Authority, Resurrection Health Center, Refg Ser 2009
    6.125       05/15/25       1,641,404  
  645    
Illinois Finance Authority, Rush University Medical Center Obligated Group Ser 2009 A
    7.25       11/01/38       706,107  
  830    
Illinois Finance Authority, Ser 2009 B
    5.00       08/15/16       903,762  
  1,155    
Illinois Finance Authority, Swedish Covenant Hospital Ser 2010 A (e)
    5.75       08/15/29       1,144,270  
  1,235    
Illinois Finance Authority, Swedish Covenant Hospital Ser 2010 A (e)
    6.00       08/15/38       1,224,947  
  6,000    
State of Illinois, First Ser 2002 (NATL-RE Insd)
    5.375       07/01/20       6,426,840  
  2,000    
Village of Schaumburg, Ser 2004 B (NATL-RE & FGIC Insd)
    5.25       12/01/34       2,067,340  
       
 
                     
       
 
                    25,537,794  
       
 
                     
       
Indiana (6.0%)
                       
  10,000    
Indiana Bond Bank, Revolving Fund Ser 2001 A
    5.00       02/01/23       10,438,100  
  5,400    
Indiana Health & Educational Facilities Financing Authority, Clarian Health Ser 2006 A
    5.25       02/15/40       5,081,778  
  1,400    
Marion County Convention & Recreational Facilities Authority, Refg Ser 2003 A (AMBAC Insd)
    5.00       06/01/21       1,425,522  
  820    
Rockport, Indian Michigan Power Company Project Refg Ser 2009 B
    6.25       06/01/25       913,234  
       
 
                     
       
 
                    17,858,634  
       
 
                     
       
Iowa (1.3%)
                       
  2,120    
State of Iowa, LJOBS Program Ser 2009 A (a)(d)
    5.00       06/01/25       2,301,916  

 


 

Morgan Stanley Quality Municipal Income Trust*
Portfolio of Investments § January 31, 2010 (unaudited) continued
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
$ 1,590    
State of Iowa, LJOBS Program Ser 2009 A (a)(d)
    5.00 %     06/01/26     $ 1,716,368  
       
 
                     
       
 
                    4,018,284  
       
 
                     
       
Kansas (0.3%)
                       
  730    
Kansas Development Finance Authority Hospital Revenue, Adventist Health System Sunbelt Obligated Group Ser 2009 C
    5.50       11/15/29       770,084  
       
 
                     
       
Louisiana (0.5%)
                       
  1,500    
Louisiana Offshore Terminal Authority, Deepwater Port Ser 2007 B-2
    4.30       10/01/37       1,534,110  
       
 
                     
       
Maryland (2.1%)
                       
  1,105    
County of Baltimore, Oak Crest Village Ser 2007 A
    5.00       01/01/37       967,582  
  1,080    
Maryland Economic Development Corp., Ser B
    5.75       06/01/35       1,095,034  
  2,885    
Maryland Health & Higher Educational Facilities Authority, King Farm Presbyterian Community 2006 Ser B
    5.00       01/01/17       2,648,170  
  1,700    
Maryland Health & Higher Educational Facilities Authority, University of Maryland Medical Ser 2006 A
    5.00       07/01/41       1,650,139  
       
 
                     
       
 
                    6,360,925  
       
 
                     
       
Massachusetts (0.6%)
                       
  1,600    
Massachusetts Health & Educational Facilities Authority, Boston College Ser 2008 M-2
    5.50       06/01/30       1,889,776  
       
 
                     
       
Michigan (3.3%)
                       
  3,000    
County of Wayne, Detroit Metropolitan Wayne County Airport Refg Ser 2002 D (AMT) (NATL-RE & FGIC Insd)
    5.50       12/01/17       3,049,410  
  5,000    
Michigan Strategic Fund, Detroit Edison Co. Ser 2001 C (AMT)
    5.65       09/01/29       5,000,450  
  1,855    
Wayne State University, Refg Ser 2008 (AGM Insd)
    5.00       11/15/25       1,953,445  
       
 
                     
       
 
                    10,003,305  
       
 
                     
       
Minnesota (0.7%)
                       
  2,000    
Western Minnesota Municipal Power Agency, Ser 2003 A (NATL-RE Insd)
    5.00       01/01/30       2,023,200  
       
 
                     
       
Missouri (0.4%)
                       
  135    
Missouri Housing Development Commission, Homeownership Ser 2000 B-1 (AMT)
    6.25       03/01/31       139,882  
  1,125    
Missouri State Health & Educational Facilities Authority, Lutheran Senior Services Ser 2005 A
    5.375       02/01/35       1,029,105  
       
 
                     
       
 
                    1,168,987  
       
 
                     
       
Montana (0.8%)
                       
  2,410    
Montana Board of Housing, 2000 Ser B (AMT)
    6.00       12/01/29       2,490,398  
       
 
                     
       
Nevada (4.4%)
                       
  2,000    
County of Clark, Airport Sub Lien Ser 2004 A-1 (AMT) (NATL-RE & FGIC Insd)
    5.50       07/01/20       2,045,920  
  1,000    
County of Clark, Jet Aviation Fuel Tax Ser 2003 C (AMT) (AMBAC Insd)
    5.375       07/01/19       970,140  
  1,100    
County of Clark, Jet Aviation Fuel Tax Ser 2003 C (AMT) (AMBAC Insd)
    5.375       07/01/20       1,065,009  
  2,000    
County of Clark, Jet Aviation Fuel Tax Ser 2003 C (AMT) (AMBAC Insd)
    5.375       07/01/22       1,909,200  
  1,000    
County of Clark, McCarran International Airport Ser 2010 A (e)
    5.125       07/01/34       978,820  
  640    
Las Vegas Redevelopment Agency, Tax Increment Ser 2009 A
    6.25       06/15/16       711,949  
  5,345    
Las Vegas Valley Water District, Water Impr Refg Ser 2003 A (NATL-RE & FGIC Insd)
    5.25       06/01/20       5,614,495  
       
 
                     
       
 
                    13,295,533  
       
 
                     

 


 

Morgan Stanley Quality Municipal Income Trust*
Portfolio of Investments § January 31, 2010 (unaudited) continued
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
       
New Hampshire (0.2%)
                       
$ 655    
New Hampshire Business Finance Authority, Ser 2009 (AMT)
    7.125 %     07/01/27     $ 697,811  
       
 
                     
       
New Jersey (9.2%)
                       
  2,000    
New Jersey Economic Development Authority, School Facilities Construction Ser N-1 (AMBAC Insd)
    5.50       09/01/24       2,262,660  
  1,430    
New Jersey St Housing & Mortgage Finance Agency, Home Buyer Ser 2000 CC (AMT) (NATL-RE Insd)
    5.875       10/01/31       1,436,921  
  1,500    
New Jersey State Turnpike Authority, Ser 2003 A (FGIC Insd)
    5.00       01/01/27       1,531,590  
  5,000    
New Jersey Transportation Trust Fund
Authority, 1999 Ser A
    5.75       06/15/20       5,821,100  
  10,000    
Passaic Valley Sewage Commissioners, Ser F (NATL-RE & FGIC Insd)
    5.00       12/01/20       10,024,600  
  5,000    
Tobacco Settlement Financing Corp., Ser 2007-1 A
    4.625       06/01/26       4,166,200  
  6,000    
Tobacco Settlement Financing Corp., Ser 2007-1 B (b)
    0.00       06/01/41       387,060  
  2,000    
University of Medicine & Dentistry of New Jersey, Ser 2004 (COPs) (NATL-RE Insd)
    5.25       06/15/23       2,031,500  
       
 
                     
       
 
                    27,661,631  
       
 
                     
       
New York (22.1%)
                       
  820    
Brooklyn Arena Local Development Corp., Ser 2009
    6.25       07/15/40       844,223  
  340    
Brooklyn Arena Local Development Corp., Ser 2009
    6.375       07/15/43       348,653  
  2,380    
City of New York, 2009 Subser A-1 (a)
    5.25       08/15/27       2,559,082  
  2,380    
City of New York, 2009 Subser A-1 (a)
    5.25       08/15/28       2,559,082  
  10,000    
Metropolitan Transportation Authority, Transportation Refg Ser 2002 A (NATL-RE & FGIC Insd)
    5.00       11/15/25       10,312,100  
  3,500    
New York City Municipal Water Finance Authority, Ser 2002 A
    5.375       06/15/19       3,799,285  
  18,000    
New York City Municipal Water Finance Authority, Ser 2002 B (a)
    5.00       06/15/26       18,422,820  
  3,000    
New York City Municipal Water Finance Authority, Ser 2003 A
    5.00       06/15/35       3,050,130  
  2,040    
New York City Transitional Finance Authority, 2010 Subser A-1 (a)
    5.00       05/01/28       2,179,325  
  1,635    
New York City Transitional Finance Authority, 2010 Subser A-1 (a)
    5.00       05/01/29       1,746,665  
  1,635    
New York City Transitional Finance Authority, 2010 Subser A-1 (a)
    5.00       05/01/30       1,746,665  
  1,935    
New York City Trust for Cultural Resources, Museum of Modern Art Refg Ser 2008 1A (a)
    5.00       04/01/26       2,096,000  
  2,815    
New York City Trust for Cultural Resources, Museum of Modern Art Refg Ser 2008 1A (a)
    5.00       04/01/27       3,049,220  
  1,100    
New York State Dormitory Authority, New York University (AMBAC Insd)
    5.50       05/15/29       1,197,548  
  2,000    
Seneca Nation Indians, Ser 2007 A (f)
    5.00       12/01/23       1,654,640  
  5,000    
Tobacco Settlement Financing Corp., Ser 2003 B-1C
    5.50       06/01/17       5,226,400  
  5,000    
Triborough Bridge & Tunnel Authority, Refg 2002 E (NATL-RE
Insd) (a)
    5.25       11/15/22       5,358,649  
       
 
                     
       
 
                    66,150,487  
       
 
                     
       
North Carolina (1.6%)
                       
  4,500    
City of Charlotte, Water/Sewer Ser 2001
    5.125       06/01/26       4,674,285  
       
 
                     
       
North Dakota (0.8%)
                       
  2,750    
County of Ward, Trinity Ser 2006
    5.125       07/01/29       2,441,422  
       
 
                     

 


 

Morgan Stanley Quality Municipal Income Trust*
Portfolio of Investments § January 31, 2010 (unaudited) continued
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
       
Ohio (5.5%)
                       
$ 5,100    
American Municipal Power-Ohio Inc., Prairie State Energy Campus Ser 2008 A (AGC Insd) (a)
    5.25 %     02/15/33     $ 5,307,379  
  5,370    
County of Cuyahoga, Cleveland Clinic Ser 2003 A
    6.00       01/01/32       5,636,513  
  3,000    
County of Lorain, Catholic Healthcare Partners Ser 2001 A
    5.625       10/01/17       3,108,960  
  2,000    
Ohio State University, General Receipts Ser 2002 A
    5.125       12/01/31       2,055,980  
  410    
Ohio State Water Development Authority, Ser 2009 A
    5.875       06/01/33       446,490  
       
 
                     
       
 
                    16,555,322  
       
 
                     
       
Oklahoma (0.4%)
                       
  1,500    
Oklahoma Development Finance Authority, Great Plains Regional Medical Center Ser 2007
    5.125       12/01/36       1,257,810  
       
 
                     
       
Oregon (0.3%)
                       
  685    
Oregon State Department of Administrative Services, Ser 2009 A
    5.25       04/01/24       774,303  
       
 
                     
       
Pennsylvania (1.0%)
                       
  4,000    
Allegheny County Hospital Development Authority, West Penn Allegheny Health Ser 2007 A
    5.375       11/15/40       2,962,200  
       
 
                     
       
Puerto Rico (1.4%)
                       
  1,375    
Puerto Rico Sales Tax Financing Corp., Ser 2009 A
    5.00       08/01/39       1,444,272  
  1,225    
Puerto Rico Sales Tax Financing Corp., Ser 2010 A (e)
    5.375       08/01/39       1,209,810  
  1,400    
Puerto Rico Sales Tax Financing Corp., Ser 2010 A (e)
    5.50       08/01/42       1,389,514  
       
 
                     
       
 
                    4,043,596  
       
 
                     
       
South Carolina (5.4%)
                       
  3,000    
Charleston Educational Excellence Finance Corp., Charleston County School District Ser 2005
    5.25       12/01/29       3,097,110  
  345    
County of Richland, Environmental Improvement, Paper Co. Ser 2007 A
    4.60       09/01/12       349,437  
  70    
Lexington County Health Services District, Inc., Ser 2007 A
    5.00       11/01/16       75,578  
  5,000    
South Carolina State Public Service Authority, Refg Ser 2002 D (AGM Insd)
    5.00       01/01/20       5,334,450  
  7,000    
South Carolina State Public Service Authority, Santee Cooper Ser 2003 A (AMBAC Insd) (a)
    5.00       01/01/22       7,380,805  
       
 
                     
       
 
                    16,237,380  
       
 
                     
       
Tennessee (0.6%)
                       
  1,620    
Tennessee Energy Acquisition Corp., Ser 2006 A
    5.25       09/01/19       1,649,614  
       
 
                     
       
Texas (20.4%)
                       
  2,000    
Alliance Airport Authority, Federal Express Corp. Refg Ser 2006 (AMT)
    4.85       04/01/21       1,975,100  
  1,045    
Bexar County Health Facilities Development Corp. (e)
    6.20       07/01/45       1,048,908  
  2,500    
City of Arlington, Special Tax Ser 2009
    5.00       08/15/28       2,541,775  
  10,000    
City of Austin, Water & Wastewater Refg Ser 2001 A & B (AGM Insd) (a)
    5.125       05/15/27       10,341,142  
  6,000    
City of Houston, Airport Sub Lien Ser 2000 A (AMT) (AGM Insd)
    5.875       07/01/17       6,091,500  
  5,120    
City of Houston, Combined Utility First Lien Refg 2004 Ser A (NATL-RE & FGIC Insd)
    5.25       05/15/23       5,405,696  
  2,000    
City of Houston, Ser 2009 A
    5.00       03/01/27       2,141,640  
  5,000    
City of Houston, Ser A 2001 (AMT) (AGM Insd)
    5.625       07/01/30       5,008,750  
  8,960    
City of San Antonio, (NATL-RE & FGIC Insd)
    5.00       05/15/26       9,183,194  
  2,500    
County of Bexar, Ser 2009 A
    5.00       06/15/35       2,589,800  
  2,380    
County of Harris, Ser 2007 C (AGM Insd)
    5.25       08/15/31       2,731,954  
  600    
Harris County Industrial Development Corp., Deer Park Refinancing Project
    5.00       02/01/23       599,940  

 


 

Morgan Stanley Quality Municipal Income Trust*
Portfolio of Investments § January 31, 2010 (unaudited) continued
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
 
$ 8,600    
North Texas Tollway Authority, Refg Ser 2008 D (AGC Insd) (b)
    0.00 %     01/01/28     $ 3,097,376  
  1,650    
North Texas Tollway Authority, Refg Ser 2008 D (AGC Insd) (b)
    0.00       01/01/31       486,833  
  2,000    
Tarrant County Cultural Education Facilities Finance Corp., Air Force Village II Inc Ser 2007
    5.125       05/15/37       1,666,040  
  915    
Texas Private Activity Bond Surface Transportation Corp., Senior Lien
    6.875       12/31/39       956,605  
  5,100    
University of Houston/TX, Ser 2008 (AGM Insd) (a)
    5.00       02/15/33       5,235,762  
       
 
                     
       
 
                    61,102,015  
       
 
                     
       
Vermont (0.7%)
                       
  2,500    
Vermont Economic Development Authority, Wake Robin Corp Ser 2006 A
    5.375       05/01/36       2,066,350  
       
 
                     
       
Virginia (1.5%)
                       
  2,000    
Fairfax County Economic Development Authority, Goodwin House, Inc. Ser 2007
    5.125       10/01/42       1,811,120  
  1,450    
Henrico County Economic Development Authority, Residential Care Facility, Westminster Cantebury-Management Corp. Ser 2006
    5.00       10/01/27       1,268,866  
  1,750    
Henrico County Economic Development Authority, Residential Care Facility, Westminster Cantebury-Management Corp. Ser 2006
    5.00       10/01/35       1,452,552  
       
 
                     
       
 
                    4,532,538  
       
 
                     
       
Washington (8.6%)
                       
  5,000    
Energy Northwest, Ser 2002 A (NATL-RE Insd)
    5.75       07/01/18       5,478,450  
  5,000    
Grant County Public Utility District No. 2, Electric Refg Ser 2001 H (AGM Insd)
    5.375       01/01/18       5,340,100  
  2,510    
Port of Seattle, Passenger Facility Ser 1998 A (NATL-RE Insd)
    5.00       12/01/23       2,516,200  
  2,500    
Spokane County School District No. 81, Ser 2005 (NATL-RE Insd)
    5.125       06/01/23       2,667,550  
  3,725    
State of Washington, Various Purpose Ser 2010 A (a)
    5.00       08/01/29       3,979,141  
  3,915    
State of Washington, Various Purpose Ser 2010 A (a)
    5.00       08/01/30       4,182,104  
  1,500    
Washington Health Care Facilities Authority, Providence Health Ser 2006 C (AGM Insd)
    5.25       10/01/33       1,538,790  
       
 
                     
       
 
                    25,702,335  
       
 
                     
        Total Tax-Exempt Municipal Bonds (Cost $500,095,767)             501,159,042  
       
 
                     
                         
NUMBER OF                      
SHARES (000)                      
       
Short-Term Investment (g) (3.1%)
               
       
Investment Company
               
  9,199    
Morgan Stanley Institutional Liquidity Funds — Tax Exempt Portfolio — Institutional Class (Cost $9,198,512)
            9,198,512  
       
 
             
       
Total Investments (Cost $509,294,279) (h)(i)
    170.4 %     510,357,554  
       
Liabilities in Excess of Other Assets
    (0.5 )     (1,521,750 )
       
Floating Rate Note and Dealer Trusts Obligations Related to Securities Held
               
       
Notes with interest rates ranging from 0.16% to 0.25% at January 31, 2010 and contractual maturity dates of collateral ranging from 01/01/22 to 01/01/37 (j)
    (23.9 )     (71,659,000 )
       
Preferred Shares of Beneficial Interest
    (46.0 )     (137,650,000 )
       
 
           
       
Net Assets Applicable to Common Shareholders
    100.0 %   $ 299,526,804  
       
 
           
 
Note: The categories of investments are shown as a percentage of net assets applicable to common shareholders.
 
AMT   Alternative Minimum Tax.
 
BANs   Bond Anticipation Notes.

 


 

Morgan Stanley Quality Municipal Income Trust*
Portfolio of Investments § January 31, 2010 (unaudited) continued
     
COPs
  Certificates of Participation.
 
CR
  Custodial Receipts.
 
(a)
  Underlying security related to inverse floater entered into by the Trust.
 
(b)
  Capital appreciation bond.
 
(c)
  Prefunded to call date shown.
 
(d)
  Security is subject to a shortfall agreement which may require the Trust to pay amounts to a counterparty in the event of a significant decline in the market value of the security underlying the inverse floater. In case of a shortfall, the maximum potential amount of payments the Trust could ultimately be required to make under the agreement is $7,335,000. However, such shortfall payment would be reduced by the proceeds from the sale of the security underlying the inverse floater.
 
(e)
  Security purchased on a when-issued basis.
 
(f)
  Resale is restricted to qualified institutional investors.
 
(g)
  The Trust invests in Morgan Stanley Institutional Liquidity Funds — Tax-Exempt Portfolio — Institutional Class, an open-end management investment company managed by the Investment Adviser. Investment advisory fees paid by the Trust are reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Tax-Exempt Portfolio — Institutional Class with respect to assets invested by the Trust in Morgan Stanley Institutional Liquidity Funds — Tax-Exempt Portfolio — Institutional Class.
 
(h)
  Securities have been designated as collateral in connection with securities purchased on a when-issued basis and inverse floating rate municipal obligations.
 
(i)
  The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes.
 
(j)
  Floating rate note obligations related to securities held — The Trust 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 Trust to retain residual interest in the bonds. The Trust enters into shortfall agreements with the Dealer Trusts which commit the Trust 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 Trust (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 Trust, thereby collapsing the Dealer Trusts. The Trust accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Trust’s investment assets, and the related floating rate notes reflected as Trust 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 January 31, 2010, the Trust’s investments with a value of $115,864,902 are held by the Dealer Trusts and serve as collateral for the $71,659,000 in floating rate note and dealer trusts obligations outstanding at that date.
Bond Insurance:
     
AGC
  Assured Guaranty Corporation.
 
AGM
  Assured Guaranty Municipal Corporation.
 
AMBAC
  AMBAC Assurance Corporation.
 
BHAC
  Berkshire Hathaway Assurance Corporation.
 
FGIC
  Financial Guaranty Insurance Company.
 
NATL-RE
  National Public Finance Guarantee Corporation.
 
XLCA
  XL Capital Assurance Inc.

 


 

Morgan Stanley Quality Municipal Income Trust*
Notes to the Portfolio of Investments § January 31, 2010 (unaudited)
Fair Valuation Measurements
Fair value is defined as the price that the Trust 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. GAAP utilizes 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 Trust’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 Trust’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 the summary of the inputs used as of January 31, 2010 in valuing the Trust’s investments carried at fair value:
                                 
    FAIR VALUE MEASUREMENTS AT JANUARY 31, 2010 USING  
            UNADJUSTED              
            QUOTED PRICES IN              
            ACTIVE MARKET     OTHER        
            FOR     SIGNIFICANT     SIGNIFICANT  
            IDENTICAL     OBSERVABLE     UNOBSERVABLE  
            INVESTMENTS     INPUTS     INPUTS  
INVESTMENT TYPE   TOTAL     (LEVEL 1)     (LEVEL 2)     (LEVEL 3)  
 
Tax-Exempt Municipal Bonds
  $ 501,159,042           $ 501,159,042        
Short-Term Investment — Investment Company
    9,198,512     $ 9,198,512              
 
                       
Total
  $ 510,357,554     $ 9,198,512     $ 501,159,042        
 
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 represent 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.
 
*   Morgan Stanley announced on October 19, 2009 that it has entered into a definitive agreement to sell substantially all of its retail asset management business to Invesco Ltd. (“Invesco”), a leading global investment management company. The Trustees of the Trust approved an Agreement and Plan of Reorganization (the “Plan”). Pursuant to the Plan, substantially all of the assets of the Trust would be combined with those of a newly organized mutual fund advised by an affiliate of Invesco Ltd. (the “New Trust”). Pursuant to the Plan, shareholders of the Trust would become shareholders of the New Trust, receiving shares of such New Trust equal to the value of their holdings in the Trust. The Plan is subject to the approval of the Trust’s shareholders at a special meeting of shareholders anticipated to be held during the second quarter of 2010.

 


 

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 ensure 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 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 Trust’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 Trust’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.

 


 

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 Quality Municipal Income Trust
/s/ Randy Takian
Randy Takian
Principal Executive Officer
March 23, 2010
     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
March 23, 2010
/s/ Francis Smith
Francis Smith
Principal Financial Officer
March 23, 2010