nvq
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
811-21227
Investment Company Act File Number
Eaton Vance Pennsylvania Municipal Bond Fund
(Exact Name of Registrant as Specified in Charter)
Two International Place, Boston, Massachusetts 02110
(Address of Principal Executive Offices)
Maureen A. Gemma
Two International Place, Boston, Massachusetts 02110
(Name and Address of Agent for Services)
(617) 482-8260
(Registrant’s Telephone Number, Including Area Code)
September 30
Date of Fiscal Year End
June 30, 2010
Date of Reporting Period
 
 

 

 

Item 1. Schedule of Investments

 

 

Eaton Vance Pennsylvania Municipal Bond Fund as of June 30, 2010
 
PORTFOLIO OF INVESTMENTS (Unaudited)
 
Tax-Exempt Investments — 160.8%
 
                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
Hospital — 11.6%
$ 300    
Lancaster County Hospital Authority, (Lancaster General Hospital), 4.50%, 3/15/36
  $ 281,295  
  1,455    
Lehigh County General Purpose Authority, (Lehigh Valley Health Network), 5.25%, 7/1/32
    1,456,891  
  250    
Northampton County General Purpose Authority, (Saint Luke’s Hospital), 5.50%, 8/15/33
    248,688  
  675    
Pennsylvania Higher Educational Facilities Authority, (UPMC Health System), 5.00%, 5/15/31
    677,572  
  750    
Pennsylvania Higher Educational Facilities Authority, (UPMC Health System), 6.00%, 1/15/31
    780,772  
  755    
Philadelphia Hospitals and Higher Education Facilities Authority, (Children’s Hospital), 4.50%, 7/1/37
    734,290  
  250    
South Fork Municipal Authority, (Conemaugh Health System), 5.50%, 7/1/29
    243,678  
                 
            $ 4,423,186  
                 
Insured-Electric Utilities — 6.2%
$ 1,610    
Lehigh County Industrial Development Authority, (PPL Electric Utilities Corp.), (FGIC), (NPFG), 4.75%, 2/15/27
  $ 1,609,919  
  750    
Puerto Rico Electric Power Authority, (FGIC), (NPFG), 5.25%, 7/1/35
    760,478  
                 
            $ 2,370,397  
                 
Insured-Escrowed/Prerefunded — 0.7%
$ 270    
Southcentral General Authority, (Wellspan Health), (NPFG), Escrowed to Maturity, 5.25%, 5/15/31
  $ 283,773  
                 
            $ 283,773  
                 
Insured-General Obligations — 32.1%
$ 1,650    
Armstrong County, (NPFG), 5.40%, 6/1/31
  $ 1,680,739  
  1,250    
Bethlehem Area School District, (AGM), 5.25%, 1/15/25
    1,340,088  
  660    
Centennial School District, (AGM), 5.25%, 12/15/37
    696,868  
  1,350    
Central Greene School District, (AGM), 5.00%, 2/15/35
    1,390,459  
  1,000    
Erie School District, (AMBAC), 0.00%, 9/1/30
    360,000  
  500    
Harrisburg School District, (AGC), 5.00%, 11/15/33
    519,215  
  2,555    
McKeesport School District, (NPFG), 0.00%, 10/1/21
    1,601,397  
  1,500    
Norwin School District, (AGM), 3.25%, 4/1/27
    1,308,345  
  1,500    
Reading School District, (AGM), 5.00%, 3/1/35
    1,547,595  
  1,000    
Scranton School District, (AGM), 5.00%, 7/15/38
    1,025,230  
  2,550    
Shaler Area School District, (XLCA), 0.00%, 9/1/33
    739,959  
                 
            $ 12,209,895  
                 
Insured-Hospital — 8.8%
$ 250    
Allegheny County Hospital Development Authority, (UPMC Health System), (NPFG), 6.00%, 7/1/24
  $ 289,493  
  500    
Centre County Hospital Authority, (Mount Nittany Medical Center), (AGC), 6.25%, 11/15/44
    521,065  
  1,620    
Lehigh County General Purpose Authority, (Lehigh Valley Health Network), (AGM), 5.00%, 7/1/35(1)
    1,629,339  
  1,000    
Washington County Hospital Authority, (Washington Hospital), (AMBAC), 5.125%, 7/1/28
    925,200  
                 
            $ 3,365,097  
                 
Insured-Industrial Development Revenue — 3.2%
$ 150    
Pennsylvania Economic Development Financing Authority, (Aqua Pennsylvania, Inc. Project), (BHAC), 5.00%, 10/1/39
  $ 156,538  
  1,000    
Pennsylvania Economic Development Financing Authority, (Aqua Pennsylvania, Inc. Project), (BHAC), 5.00%, 10/1/39(1)
    1,043,590  
                 
            $ 1,200,128  
                 
Insured-Lease Revenue/Certificates of Participation — 4.7%
$ 500    
Commonwealth Financing Authority, (AGC), 5.00%, 6/1/31
  $ 519,670  
  1,215    
Philadelphia Authority for Industrial Development, (One Benjamin Franklin), (AGM), 4.75%, 2/15/27
    1,250,964  
                 
            $ 1,770,634  
                 
Insured-Private Education — 12.1%
$ 1,000    
Chester County Industrial Development Authority, Educational Facility, (Westtown School), (AMBAC), 5.00%, 1/1/31
  $ 1,003,580  
  1,675    
Pennsylvania Higher Educational Facilities Authority, (Drexel University), (NPFG), 5.00%, 5/1/37
    1,717,260  
 
1

 

                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
$ 1,405    
Pennsylvania Higher Educational Facilities Authority, (Temple University), (NPFG), 4.50%, 4/1/36
  $ 1,351,020  
  500    
Pennsylvania Higher Educational Facilities Authority, (University of the Sciences in Philadelphia), (AGC), 5.00%, 11/1/37
    514,035  
                 
            $ 4,585,895  
                 
Insured-Public Education — 11.4%
$ 500    
Lycoming County Authority, (Pennsylvania College of Technology), (AGC), 5.50%, 10/1/37
  $ 523,385  
  1,200    
Lycoming County Authority, (Pennsylvania College of Technology), (AMBAC), 5.25%, 5/1/32
    1,151,736  
  1,000    
Pennsylvania Higher Educational Facilities Authority, (Clarion University Foundation), (XLCA), 5.00%, 7/1/33
    834,710  
  500    
State Public School Building Authority, (Delaware County Community College), (AGM), 5.00%, 10/1/27
    531,990  
  375    
State Public School Building Authority, (Delaware County Community College), (AGM), 5.00%, 10/1/29
    395,160  
  875    
State Public School Building Authority, (Delaware County Community College), (AGM), 5.00%, 10/1/32
    910,866  
                 
            $ 4,347,847  
                 
Insured-Sewer Revenue — 17.3%
$ 300    
Allegheny County Sanitation Authority, (BHAC), (FGIC), 5.00%, 12/1/32
  $ 311,169  
  1,500    
Allegheny County Sanitation Authority, (BHAC), (NPFG), 5.00%, 12/1/22(2)
    1,607,250  
  1,000    
Ambridge Borough Municipal Authority, Sewer Revenue, (AGM), 4.60%, 10/15/41
    943,620  
  1,920    
Erie Sewer Authority, (AMBAC), 0.00%, 12/1/26
    733,171  
  1,430    
Erie Sewer Authority, Series A, (AMBAC), 0.00%, 12/1/25
    586,886  
  2,155    
Erie Sewer Authority, Series B, (AMBAC), 0.00%, 12/1/25
    884,434  
  1,500    
University Area Joint Authority, (NPFG), 5.00%, 11/1/26
    1,503,360  
                 
            $ 6,569,890  
                 
Insured-Special Tax Revenue — 13.4%
$ 3,225    
Pittsburgh and Allegheny County Public Auditorium Authority, (AMBAC), 5.00%, 2/1/29
  $ 3,063,814  
  22,015    
Puerto Rico Sales Tax Financing Corp., (AMBAC), 0.00%, 8/1/54
    1,255,736  
  1,770    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/44
    200,930  
  3,510    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45
    370,656  
  2,220    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/46
    217,982  
                 
            $ 5,109,118  
                 
Insured-Transportation — 20.7%
$ 2,000    
Allegheny County Port Authority, (FGIC), (NPFG), 5.00%, 3/1/25
  $ 2,028,960  
  1,000    
Allegheny County Port Authority, (FGIC), (NPFG), 5.00%, 3/1/29
    1,009,980  
  2,075    
Pennsylvania Turnpike Commission, (AGM), 5.25%, 7/15/30
    2,334,977  
  295    
Philadelphia, Airport Revenue, (AGC), 5.375%, 6/15/29
    311,532  
  2,100    
Puerto Rico Highway and Transportation Authority, (AGC), (CIFG), 5.25%, 7/1/41(1)
    2,172,219  
                 
            $ 7,857,668  
                 
Insured-Utilities — 2.3%
$ 890    
Philadelphia Gas Works Revenue, (AMBAC), 5.00%, 10/1/37
  $ 864,145  
                 
            $ 864,145  
                 
Insured-Water and Sewer — 0.4%
$ 150    
Saxonburg Water and Sewer Authority, (AGC), 5.00%, 3/1/35
  $ 152,357  
                 
            $ 152,357  
                 
Private Education — 11.6%
$ 925    
Pennsylvania Higher Educational Facilities Authority, (Thomas Jefferson University), 5.00%, 3/1/40
  $ 952,833  
  2,900    
Pennsylvania Higher Educational Facilities Authority, (University of Pennsylvania), 4.75%, 7/15/35
    2,923,867  
  500    
Washington County Industrial Development Authority, (Washington and Jefferson College), 5.25%, 11/1/30
    520,625  
                 
            $ 4,397,325  
                 
Public Education — 1.4%
$ 500    
Pennsylvania State University, 5.00%, 3/1/40
  $ 528,435  
                 
            $ 528,435  
                 
Senior Living/Life Care — 0.5%
$ 200    
Montgomery County Industrial Development Authority, (Foulkeways at Gwynedd), 5.00%, 12/1/24
  $ 196,566  
                 
            $ 196,566  
                 
 
2

 

                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
Special Tax Revenue — 0.3%
$ 110    
Virgin Islands Public Finance Authority, 6.75%, 10/1/37
  $ 122,986  
                 
            $ 122,986  
                 
Water and Sewer — 2.1%
$ 765    
Philadelphia Water and Wastewater Revenue, 5.25%, 1/1/32
  $ 801,315  
                 
            $ 801,315  
                 
         
Total Tax-Exempt Investments — 160.8%
(identified cost $62,478,926)
  $ 61,156,657  
         
 
Short-Term Investments — 2.6%
 
                 
Principal
 		           
Amount
 		           
(000’s omitted)     Description   Value  
$ 1,001    
State Street Bank and Trust Euro Time Deposit, 0.01%, 7/1/10
  $ 1,000,750  
                 
         
Total Short-Term Investments — 2.6%
(identified cost $1,000,750)
  $ 1,000,750  
         
         
Total Investments — 163.4%
(identified cost $63,479,676)
  $ 62,157,407  
         
         
Auction Preferred Shares Plus Cumulative Unpaid Dividends — (57.1)%
  $ (21,726,631 )
         
         
Other Assets, Less Liabilities — (6.3)%
  $ (2,399,381 )
         
         
Net Assets Applicable to Common Shares — 100.0%
  $ 38,031,395  
         
 
             
 
The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.
         
AGC   -   Assured Guaranty Corp.
         
AGM
  -   Assured Guaranty Municipal Corp.
         
AMBAC
  -   AMBAC Financial Group, Inc.
         
BHAC
  -   Berkshire Hathaway Assurance Corp.
         
CIFG
  -   CIFG Assurance North America, Inc.
         
FGIC
  -   Financial Guaranty Insurance Company
         
NPFG
  -   National Public Finance Guaranty Corp.
         
XLCA
  -   XL Capital Assurance, Inc.
 
The Fund invests primarily in debt securities issued by Pennsylvania municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at June 30, 2010, 81.5% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution ranged from 2.5% to 26.1% of total investments.
         
(1)
      Security represents the underlying municipal bond of an inverse floater.
         
(2)
      Security (or a portion thereof) has been pledged as collateral for open swap contracts. The aggregate value of such collateral is $428,600.
 
3

 

A summary of financial instruments outstanding at June 30, 2010 is as follows:
 
Interest Rate Swaps
 
                                 
          Annual
 		        Effective Date/
 		     
    Notional
 		    Fixed Rate
 		    Floating Rate
 		  Termination
 		  Net Unrealized
 		 
Counterparty   Amount     Paid By Fund     Paid To Fund   Date   Depreciation  
Barclays Bank PLC
  $ 3,000,000       4.544 %   3-month USD-
LIBOR-BBA 		  July 20, 2010 /
July 20, 2040 		  $ (462,956 )
JPMorgan Chase Co. 
    725,000       4.046     3-month USD-
LIBOR-BBA 		  September 17, 2010 /
September 17, 2040 		    (41,041 )
                                 
                            $ (503,997 )
                                 
 
The effective date represents the date on which the Fund and the counterparty to the interest rate swap contract begin interest payment accruals.
 
At June 30, 2010, the Fund had sufficient cash and/or securities to cover commitments under these contracts.
 
The Fund is subject to interest rate risk in the normal course of pursuing its investment objectives. Because the Fund holds fixed rate bonds, the value of these bonds may decrease if interest rates rise. To hedge against this risk, the Fund may enter into interest rate swap contracts.
 
At June 30, 2010, the aggregate fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in a liability position and whose primary underlying risk exposure is interest rate risk was $503,997.
 
The cost and unrealized appreciation (depreciation) of investments of the Fund at June 30, 2010, as determined on a federal income tax basis, were as follows:
 
         
Aggregate cost
  $ 60,689,024  
         
Gross unrealized appreciation
  $ 1,131,467  
Gross unrealized depreciation
    (2,513,084 )
         
Net unrealized depreciation
  $ (1,381,617 )
         
 
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
 
  •   Level 1 — 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 a 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.
 
4

 

At June 30, 2010, the inputs used in valuing the Fund’s investments, which are carried at value, were as follows:
 
                                 
    Quoted Prices in
 		                   
    Active Markets for
 		    Significant Other
 		    Significant
 		       
    Identical Assets     Observable Inputs     Unobservable Inputs        
       
Asset Description   (Level 1)     (Level 2)     (Level 3)     Total  
   
Tax-Exempt Investments
  $ —     $ 61,156,657     $ —     $ 61,156,657  
Short-Term Investments
    —       1,000,750       —       1,000,750  
 
 
Total Investments
  $ —     $ 62,157,407     $ —     $ 62,157,407  
 
 
                                 
Liability Description                        
   
Interest Rate Swaps
  $ —     $ (503,997 )   $ —     $ (503,997 )
 
 
Total
  $ —     $ (503,997 )   $ —     $ (503,997 )
 
 
 
The Fund held no investments or other financial instruments as of September 30, 2009 whose fair value was determined using Level 3 inputs.
 
For information on the Fund’s policy regarding the valuation of investments and other significant accounting policies, please refer to the Fund’s most recent financial statements included in its semiannual or annual report to shareholders.
 
5

 

Item 2. Controls and Procedures
(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant on this Form N-Q has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant on this Form N-Q has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant’s internal controls over financial reporting during the fiscal quarter for which the report is being filed that have materially affected, or are reasonably likely to materially affect the registrant’s internal control over financial reporting.

 

 

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.
Eaton Vance Pennsylvania Municipal Bond Fund
         
By:
  /s/ Cynthia J. Clemson    
 
 
 
Cynthia J. Clemson 		   
 
  President    
 
        
Date:
  August 25, 2010    
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
         
By:
  /s/ Cynthia J. Clemson    
 
 
 
Cynthia J. Clemson 		   
 
  President    
 
        
Date:
  August 25, 2010    
 
        
By:
  /s/ Barbara E. Campbell    
 
 
 
Barbara E. Campbell 		   
 
  Treasurer    
 
        
Date:
  August 25, 2010