N-Q 1 d95984dnq.htm MFS CALIFORNIA MUNICIPAL FUND N-Q MFS CALIFORNIA MUNICIPAL FUND N-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-9537

MFS CALIFORNIA MUNICIPAL FUND

(Exact name of registrant as specified in charter)

111 Huntington Avenue, Boston, Massachusetts 02199

(Address of principal executive offices) (Zip code)

Kristin V. Collins

Massachusetts Financial Services Company

111 Huntington Avenue

Boston, Massachusetts 02199

(Name and address of agents for service)

Registrant’s telephone number, including area code: (617) 954-5000

Date of fiscal year end: November 30

Date of reporting period: August 31, 2015


ITEM 1. SCHEDULE OF INVESTMENTS.


QUARTERLY REPORT

August 31, 2015

 

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MFS® CALIFORNIA MUNICIPAL FUND

 

LOGO


PORTFOLIO OF INVESTMENTS

8/31/15 (unaudited)

The Portfolio of Investments is a complete list of all securities owned by your fund. It is categorized by broad-based asset classes.

 

Issuer    Shares/Par     Value ($)  
Municipal Bonds - 167.0%                 
Airport Revenue - 9.1%                 
Los Angeles, CA, Department of Airports Rev. (Los Angeles International), “C”, BHAC, 5.25%, 5/15/38    $ 750,000      $ 839,475   
Orange County, CA, Airport Rev., “A”, 5%, 7/01/31      190,000        212,272   
San Diego County, CA, Regional Airport Authority Rev., “A”, 5%, 7/01/21      500,000        570,760   
San Diego County, CA, Regional Airport Authority Rev., “A”, 5%, 7/01/43      500,000        554,590   
San Francisco, CA, City & County Airports Commission, International Airport Rev., “A”, 5%, 5/01/30      285,000        318,285   
San Francisco, CA, City & County Airports Commission, International Airport Rev., “A”, 5%, 5/01/31      150,000        165,614   
San Jose, CA, Airport Rev., “A-2”, 5.25%, 3/01/34      440,000        493,856   
    

 

 

 
      $ 3,154,852   
General Obligations - General Purpose - 8.9%                 
Commonwealth of Puerto Rico, “A”, NATL, 5.5%, 7/01/20    $ 160,000      $ 157,229   
Puerto Rico Public Buildings Authority Rev., “H”, AMBAC, 5.5%, 7/01/17      70,000        69,580   
Puerto Rico Public Buildings Authority Rev., “H”, AMBAC, 5.5%, 7/01/18      50,000        49,339   
State of California, AMBAC, 6%, 2/01/17      1,000,000        1,077,430   
State of California, 5.25%, 4/01/35      455,000        520,411   
State of California, 5.5%, 3/01/40      630,000        731,512   
State of California, 5.25%, 11/01/40      415,000        483,321   
    

 

 

 
      $ 3,088,822   
General Obligations - Schools - 29.6%                 
Alhambra, CA, Unified School District, “B”, ASSD GTY, 5.25%, 8/01/28    $ 500,000      $ 563,980   
Banning, CA, Unified School District (Election of 2006), “B”, ASSD GTY, 5.25%, 8/01/33      500,000        547,660   
Beaumont, CA, Unified School District (Election of 2008), Capital Appreciation, “C”, AGM, 0%, 8/01/40      955,000        301,713   
Beaumont, CA, Unified School District (Election of 2008), Capital Appreciation, “C”, AGM, 0%, 8/01/44      1,000,000        262,050   
Chabot-Las Positas, CA, Community College (Election of 2004), “B”, AMBAC, 5%, 8/01/30      60,000        62,362   
Folsom Cordova, CA, Unified School District (Election of 2012), “A”, 5%, 10/01/38      535,000        597,044   
Lake Tahoe, CA, Unified School District (Election of 2008), Capital Appreciation, AGM, 0%, 8/01/45      515,000        280,958   
Mendocino Lake, CA, Community College District Rev. (Election of 2006), Capital Appreciation, “B”, AGM, 0%, 8/01/32      330,000        159,614   
Montebello, CA, Unified School District (Election of 2004), “A-1”, ASSD GTY, 5.25%, 8/01/34      355,000        396,855   
Mount San Antonio, CA, Community College District Rev. (Election of 2008), Capital Appreciation, 0%, 8/01/43      855,000        593,259   
Napa Valley, CA, Unified School District, 5%, 8/01/20      225,000        263,225   
Oakland, CA, Unified School District Rev., AGM, 5%, 8/01/28      170,000        194,784   
Oakland, CA, Unified School District Rev., AGM, 5%, 8/01/30      170,000        192,423   
Pittsburg, CA, Unified School District, “B”, AGM, 5.5%, 8/01/34      500,000        558,295   
Pomona, CA, Unified School District, “A”, NATL, 6.55%, 8/01/29      1,000,000        1,263,180   
San Diego, CA, Community College (Election of 2002), 5.25%, 8/01/33      125,000        142,774   
San Diego, CA, Unified School District (Election of 2008), Capital Appreciation, “G”, 0%, 7/01/34      265,000        106,848   
San Joaquin, CA, Delta Community College District (Election of 2004), Capital Appreciation, “B”, AGM, 0%, 8/01/18      400,000        381,408   
San Jose, CA, Evergreen Community College District (Election of 2010), “A”, 5%, 8/01/41      265,000        296,297   
Santee, CA, School District (Election of 2006), Capital Appreciation, “D”, ASSD GTY, 0%, 8/01/43      765,000        219,065   
Vallejo City, CA, Unified School District, “A”, NATL, 5.9%, 8/01/25      500,000        590,230   
Victor, CA, Elementary School District (Election of 2008), “A”, ASSD GTY, 5.125%, 8/01/34      500,000        565,020   
Washington, CA, Yolo County Unified School District (New High School Project), 5%, 8/01/21      450,000        480,249   
West Contra Costa, CA, Unified School District, “A”, NATL, 5.7%, 2/01/23      500,000        612,080   
West Covina, CA, Unified School District, “A”, NATL, 5.8%, 2/01/21      500,000        601,115   
    

 

 

 
      $ 10,232,488   
Healthcare Revenue - Hospitals - 24.6%                 
ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Sharp Healthcare), 6.25%, 8/01/39    $ 505,000      $ 589,608   
ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Sharp Healthcare), “A”, 5%, 8/01/26      110,000        124,534   
California Health Facilities Financing Authority Rev. (Cedars-Sinai Medical Center), 5%, 11/15/34      250,000        252,105   
California Health Facilities Financing Authority Rev. (Memorial Health Services), “A”, 5%, 10/01/33      295,000        325,264   
California Health Facilities Financing Authority Rev. (Scripps Health), “A”, 5%, 11/15/32      525,000        592,904   

 

1


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par     Value ($)  
Municipal Bonds - continued                 
Healthcare Revenue - Hospitals - continued                 
California Health Facilities Financing Authority Rev. (Scripps Health), “A”, 5%, 11/15/40    $ 255,000      $ 284,282   
California Health Facilities Financing Authority Rev. (Sutter Health), “B”, 5.875%, 8/15/31      500,000        588,745   
California Municipal Finance Authority Rev. (Northbay Healthcare Group), 5%, 11/01/29      35,000        38,224   
California Municipal Finance Authority Rev. (Northbay Healthcare Group), 5%, 11/01/28      45,000        49,406   
California Municipal Finance Authority Rev. (Northbay Healthcare Group), 5%, 11/01/44      85,000        90,926   
California Municipal Finance Authority Rev. (Northbay Healthcare Group), 5%, 11/01/30      15,000        16,345   
California Municipal Finance Authority Rev. (Northbay Healthcare Group), 5%, 11/01/35      65,000        70,255   
California Municipal Finance Authority, COP (Community Hospitals of Central California), 5.25%, 2/01/27      250,000        260,610   
California Statewide Communities Development Authority Rev. (Adventist), ASSD GTY, 5%, 3/01/37      495,000        524,591   
California Statewide Communities Development Authority Rev. (Catholic Healthcare West), “K”, ASSD GTY, 5.5%, 7/01/41      1,000,000        1,062,110   
California Statewide Communities Development Authority Rev. (Enloe Medical Center), “A”, CALHF, 5.5%, 8/15/23      500,000        564,340   
California Statewide Communities Development Authority Rev. (Kaiser Permanente), “A”, 5%, 4/01/42      455,000        498,730   
California Statewide Communities Development Authority Rev. (Loma Linda University Medical Center), “A”, 5.5%, 12/01/54      350,000        369,170   
California Statewide Communities Development Authority Rev. (Santa Ynez Valley Cottage Hospital), 5.25%, 11/01/30      260,000        294,042   
California Statewide Communities Development Authority Rev. (Sutter Health), “A”, 5%, 8/15/32      610,000        683,627   
California Statewide Communities Development Authority Rev. (Trinity Health Corp.), 5%, 12/01/41      450,000        498,222   
Santa Clara County, CA, Financing Authority Rev. (El Camino Hospital), AMBAC, 5.125%, 2/01/41      400,000        434,676   
Upland, CA, COP (San Antonio Community Hospital), 6.375%, 1/01/32      250,000        288,888   
    

 

 

 
      $ 8,501,604   
Healthcare Revenue - Long Term Care - 4.0%                 
ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Episcopal Senior Communities), 6.125%, 7/01/41    $ 150,000      $ 169,340   
ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Eskaton Properties, Inc.), 5%, 11/15/35      230,000        240,049   
California Statewide Communities Development Authority Rev. (899 Charleston Project), “A”, 5.25%, 11/01/44      295,000        298,726   
California Statewide Communities Development Authority Rev. (Episcopal Communities & Services for Seniors Obligated Group), 5%, 5/15/47      315,000        334,234   
Los Angeles County, CA, Regional Financing Authority Rev. (Montecedro Inc. Project), “A”, CALHF, 5%, 11/15/44      300,000        331,239   
    

 

 

 
      $ 1,373,588   
Industrial Revenue - Other - 1.6%                 
Liberty, NY, Development Corp. Rev. (Goldman Sachs Headquarters), 5.25%, 10/01/35    $ 485,000      $ 567,392   
Miscellaneous Revenue - Other - 3.0%                 
ABAG Finance Authority for Non-Profit Corps., CA, Rev. (Jackson Lab), 5%, 7/01/37    $ 400,000      $ 442,052   
California Infrastructure & Economic Development Bank Rev. (Walt Disney Family Museum), 5.25%, 2/01/33      160,000        173,386   
California Statewide Communities Development Authority Rev. (Buck Institute for Research on Aging), AGM, 5%, 11/15/44      385,000        426,260   
    

 

 

 
      $ 1,041,698   
Port Revenue - 4.2%                 
Alameda Corridor Transportation Authority, California Rev., “A”, AGM, 5%, 10/01/28    $ 305,000      $ 354,968   
Port of Oakland, CA, Rev., “P”, 5%, 5/01/33      1,000,000        1,097,180   
    

 

 

 
      $ 1,452,148   
Sales & Excise Tax Revenue - 1.2%                 
California Economic Recovery, “A”, 5%, 7/01/20 (Prerefunded 7/01/19)    $ 250,000      $ 287,615   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “C”, 5%, 8/01/40      50,000        31,315   
Puerto Rico Sales Tax Financing Corp., Sales Tax Rev., “C”, 5.25%, 8/01/40      165,000        104,165   
    

 

 

 
      $ 423,095   
Single Family Housing - Other - 1.2%                 
California Department of Veterans Affairs, Home Purchase Rev., “A”, 4.5%, 12/01/28    $ 385,000      $ 417,906   
Single Family Housing - State - 3.2%                 
California Housing Finance Agency Rev. (Home Mortgage), “E”, 4.75%, 2/01/30    $ 305,000      $ 307,315   
California Housing Finance Agency Rev. (Home Mortgage), “K”, 5.3%, 8/01/23      175,000        179,254   

 

2


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par     Value ($)  
Municipal Bonds - continued                 
Single Family Housing - State - continued                 
California Housing Finance Agency Rev. (Home Mortgage), “L”, 5.45%, 8/01/33    $ 555,000      $ 574,769   
California Housing Finance Agency Rev. (Home Mortgage), “L”, FNMA, 5.5%, 8/01/38      60,000        61,058   
    

 

 

 
      $ 1,122,396   
State & Agency - Other - 1.5%                 
Sacramento County, CA, Public Facilities Project, COP, AMBAC, 4.75%, 10/01/27    $ 500,000      $ 500,385   
State & Local Agencies - 11.7%                 
California Public Works Board Lease Rev. (Judicial Council Projects), “A”, 5%, 3/01/28    $ 380,000      $ 439,778   
California Public Works Board Lease Rev. (New Stockton Courthouse), “B”, 5%, 10/01/33      275,000        313,745   
Los Angeles County, CA, Schools Regionalized Business Service Corp., Pooled Financing, Capital Appreciation, “A”, AMBAC, 0%, 8/01/18      2,020,000        1,893,750   
Los Angeles County, CA, Schools Regionalized Business Service Corp., Pooled Financing, Capital Appreciation, “A”, AMBAC, 0%, 8/01/23      1,220,000        950,295   
Los Angeles, CA, Municipal Improvement Corp. Lease Rev., “B”, ASSD GTY, 5.5%, 4/01/30      390,000        441,671   
    

 

 

 
      $ 4,039,239   
Tax Assessment - 12.9%                 
Fontana, CA, Public Finance Authority, Tax Allocation Rev. (Sub Lien North Fontana Redevelopment), “A”, AMBAC, 5%, 10/01/29    $ 1,000,000      $ 1,001,470   
Huntington Park, CA, Public Financing Authority Rev., “A”, AGM, 5.25%, 9/01/19      500,000        507,090   
Irvine, CA, Limited Obligation Improvement (Reassessment District #12-1), 4%, 9/02/22      115,000        127,888   
Irvine, CA, Limited Obligation Improvement (Reassessment District #12-1), 5%, 9/02/23      60,000        69,510   
North Natomas, CA, Community Facilities District Special Tax, “4-E”, 5.25%, 9/01/33      160,000        178,445   
Riverside County, CA, Jurupa Valley Redevelopment Project Rev., “B”, AGM, 5%, 10/01/30      465,000        528,477   
Riverside County, CA, Jurupa Valley Redevelopment Project Rev., “B”, AGM, 5%, 10/01/31      225,000        253,665   
Riverside County, CA, Redevelopment Agency, Tax Allocation, “A”, AGM, 5%, 10/01/34      295,000        332,347   
San Diego, CA, Redevelopment Agency, Tax Allocation (Centre City), “A”, AMBAC, 5.25%, 9/01/25      500,000        508,725   
San Dieguito, CA, Public Facilities Authority, “A”, AMBAC, 5%, 8/01/32      500,000        541,905   
San Francisco, CA, City & County Redevelopment Successor Agency, Community Facilities District No. 6 (Mission Bay South Public Improvements), “A”, 5%, 8/01/33      130,000        141,073   
San Francisco, CA, City & County Redevelopment Successor Agency, Tax Allocation (Mission Bay South Public Improvements), “A”, 5%, 8/01/43      250,000        271,518   
    

 

 

 
      $ 4,462,113   
Tobacco - 4.0%                 
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.125%, 6/01/47    $ 1,000,000      $ 778,800   
Golden State, CA, Tobacco Securitization Corp., Tobacco Settlement Rev., “A-1”, 5.75%, 6/01/47      715,000        610,460   
    

 

 

 
      $ 1,389,260   
Toll Roads - 1.1%                 
Riverside County, CA, Transportation Commission, Toll Rev., “A”, 5.75%, 6/01/44    $ 320,000      $ 361,760   
Transportation - Special Tax - 2.4%                 
Commonwealth of Puerto Rico Highway & Transportation Authority, Highway Rev., “Y”, AGM, 5.5%, 7/01/36 (Prerefunded 7/01/16)    $ 450,000      $ 469,188   
San Francisco, CA, Municipal Transportation Agency Rev., “B”, 5%, 3/01/37      335,000        373,880   
    

 

 

 
      $ 843,068   
Universities - Colleges - 10.0%                 
California Educational Facilities Authority Rev. (Chapman University), 5%, 4/01/28    $ 170,000      $ 197,173   
California Educational Facilities Authority Rev. (Dominican University of California), 5%, 12/01/25      120,000        125,072   
California Educational Facilities Authority Rev. (University of San Francisco), 6.125%, 10/01/30      285,000        347,227   
California Municipal Finance Authority Rev. (Azusa Pacific University Project), “B”, 5%, 4/01/35      345,000        370,523   
California Public Works Board Lease Rev. (The Regents of the University of California), 5%, 12/01/28 (Prerefunded 12/01/21)      375,000        450,675   
California State University Rev., “A”, 5%, 11/01/24      370,000        434,199   
California State University Rev., “A”, 5%, 11/01/30      680,000        800,183   

 

3


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par     Value ($)  
Municipal Bonds - continued                 
Universities - Colleges - continued                 
California Statewide Communities Development Authority Rev. (Lancer Plaza Project), 5.875%, 11/01/43    $ 230,000      $ 232,652   
University Enterprises, Inc. (Auxiliary Organization), “A”, FGIC, 4.375%, 10/01/30      500,000        501,780   
    

 

 

 
      $ 3,459,484   
Universities - Dormitories - 0.1%                 
California Municipal Finance Authority, Student Housing Rev. (Bowles Hall Foundation) “A”, 5%, 6/01/35    $ 25,000      $ 27,233   
Universities - Secondary Schools - 1.5%                 
California School Finance Authority, School Facility Rev. (Alliance for College-Ready Public Schools Projects), “A”, 5%, 7/01/30    $ 255,000      $ 266,883   
California Statewide Communities Development Authority, School Facility Rev. (Alliance for College-Ready Public Schools), “A”, 6.375%, 7/01/47      230,000        250,003   
    

 

 

 
      $ 516,886   
Utilities - Cogeneration - 0.7%                 
California Pollution Control Financing Authority, Water Furnishing Rev. (Poseidon Resources Desalination Project), 5%, 11/21/45    $ 150,000      $ 157,511   
California Pollution Control Financing Authority, Water Furnishing Rev. (San Diego County Water Desalination Project Pipeline), 5%, 11/21/45      75,000        77,193   
    

 

 

 
      $ 234,704   
Utilities - Municipal Owned - 9.4%                 
California Department of Water Resources, Power Supply Rev., “L”, 5%, 5/01/19    $ 805,000      $ 920,429   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/39      50,000        56,623   
Guam Power Authority Rev., “A”, AGM, 5%, 10/01/44      55,000        61,917   
Northern California Power Agency, Capital Facilities Rev., “A”, 5.25%, 8/01/24      390,000        437,132   
Puerto Rico Electric Power Authority Rev., “DDD”, AGM, 3.625%, 7/01/23      10,000        9,234   
Puerto Rico Electric Power Authority Rev., “DDD”, AGM, 3.65%, 7/01/24      55,000        49,419   
Puerto Rico Electric Power Authority Rev., “SS”, ASSD GTY, 4.375%, 7/01/30      5,000        4,383   
Puerto Rico Electric Power Authority Rev., “UU”, ASSD GTY, 4.25%, 7/01/27      40,000        35,658   
Sacramento, CA, Municipal Utility District Rev., “U”, AGM, 5%, 8/15/19      750,000        840,998   
Sacramento, CA, Municipal Utility District Rev., “X”, 5%, 8/15/25      370,000        435,734   
Vernon, CA, Electric System Rev., “A”, 5.5%, 8/01/41      370,000        415,340   
    

 

 

 
      $ 3,266,867   
Utilities - Other - 2.8%                 
California M-S-R Energy Authority Gas Rev., “A”, 6.5%, 11/01/39    $ 245,000      $ 321,068   
Southern California Public Power Authority (Natural Gas Project No. 1), “A”, 5%, 11/01/33      585,000        662,431   
    

 

 

 
      $ 983,499   
Water & Sewer Utility Revenue - 18.3%                 
Atwater, CA, Public Financing Authority Wastewater Rev., ASSD GTY, 5%, 5/01/34    $ 500,000      $ 529,640   
California Department of Water Resources Rev. (Central Valley Project Water System), “AE”, 5%, 12/01/28 (Prerefunded 6/01/18)      480,000        534,811   
California Department of Water Resources Rev. (Central Valley Project Water System), “AE”, 5%, 12/01/28      20,000        22,265   
California Department of Water Resources Rev. (Central Valley Project Water System), “AM”, 5%, 12/01/24      500,000        606,240   
Chino Basin, CA, Regional Financing Authority Rev. (Inland Empire Utilities Agency), “A”, AMBAC, 5%, 11/01/38      1,000,000        1,069,110   
Escondido, CA, Joint Powers Financing Authority Rev. (Water System Financing), 5%, 9/01/41      460,000        502,320   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/29      105,000        116,033   
Guam Waterworks Authority Rev. (Water and Wastewater System), “A”, 5%, 7/01/35      105,000        113,718   
Madera, CA, Financing Authority, Irrigation Rev., 6.5%, 1/01/40      440,000        509,678   
Norco, CA, Financing Authority, Enterprise Rev., AGM, 5.625%, 10/01/39      215,000        242,929   
Oxnard, CA, Financing Authority, Wastewater Rev., AGM, 5%, 6/01/30      340,000        383,877   
Oxnard, CA, Financing Authority, Wastewater Rev., AGM, 5%, 6/01/31      85,000        95,351   
Sonoma County, CA, Water Agency Rev., “A”, AGM, 5%, 7/01/36      600,000        618,636   
Soquel Creek, CA, Water District, COP, 5%, 3/01/43      370,000        403,785   
Tulare, CA, Sewer Rev., AGM, 5%, 11/15/31      350,000        399,228   

 

4


Portfolio of Investments (unaudited) – continued

 

Issuer    Shares/Par     Value ($)  
Municipal Bonds - continued                 
Water & Sewer Utility Revenue - continued                 
Tulare, CA, Sewer Rev., AGM, 5%, 11/15/35    $ 170,000      $ 192,185   
    

 

 

 
             $ 6,339,806   
Total Municipal Bonds            $ 57,800,293   
Money Market Funds - 1.8%                 
MFS Institutional Money Market Portfolio, 0.11%, at Net Asset Value (v)      642,396      $ 642,396   
Total Investments            $ 58,442,689   
Other Assets, Less Liabilities - 1.7%              596,392   
VMTPS, at liquidation value (issued by the fund) - (70.6)%              (24,425,000
Net Assets applicable to common shares - 100.0%            $ 34,614,081   

 

(v) Underlying affiliated fund that is available only to investment companies managed by MFS. The rate quoted for the MFS Institutional Money Market Portfolio is the annualized seven-day yield of the fund at period end.

The following abbreviations are used in this report and are defined:

 

COP   Certificate of Participation
VMTPS   Variable Rate Municipal Term Preferred Shares

 

Insurers      
AGM    Assured Guaranty Municipal
AMBAC    AMBAC Indemnity Corp.
ASSD GTY    Assured Guaranty Insurance Co.
BHAC    Berkshire Hathaway Assurance Corp.
CALHF    California Health Facility Construction Loan Insurance Program
FGIC    Financial Guaranty Insurance Co.
FNMA    Federal National Mortgage Assn.
NATL    National Public Finance Guarantee Corp.

Derivative Contracts at 8/31/15

Futures Contracts at 8/31/15

 

Description    Currency      Contracts      Value    Expiration Date    Unrealized
Appreciation
(Depreciation)
 
Asset Derivatives               
Interest Rate Futures               
U.S. Treasury Note 10 yr (Short)      USD         20       $2,541,250    December - 2015      $553   
U.S. Treasury Bond 30 yr (Short)      USD         3       463,875    December - 2015      1,208   
              

 

 

 
                 $1,761   
              

 

 

 

At August 31, 2015, the fund had cash collateral of $37,200 to cover any commitments for certain derivative contracts.

See attached supplemental information. For more information see notes to financial statements as disclosed in the most recent semiannual or annual report.

 

5


Supplemental Information

8/31/15 (unaudited)

The fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 Financial Services – Investment Companies.

(1) Investment Valuations

Debt instruments and floating rate loans, including restricted debt instruments, are generally valued at an evaluated or composite bid as provided by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Futures contracts are generally valued at last posted settlement price as provided by a third-party pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as provided by a third-party pricing service on the market on which such futures contracts are primarily traded. Open-end investment companies are generally valued at net asset value per share. Securities and other assets generally valued on the basis of information from a third-party pricing service may also be valued at a broker/dealer bid quotation. Values obtained from third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data.

The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the fund’s investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under the fund’s valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the fund’s net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. The adviser generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the fund could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which the fund determines its net asset value per share.

Various inputs are used in determining the value of the fund’s assets or liabilities. These inputs are categorized into three broad levels. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fund’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes unobservable inputs, which may include the adviser’s own assumptions in determining the fair value of investments. Other financial instruments are derivative instruments not reflected in total investments, such as futures contracts. The following is a summary of the levels used as of August 31, 2015 in valuing the fund’s assets or liabilities:

 

Investments at Value    Level 1      Level 2      Level 3      Total  
Municipal Bonds      $—         $57,800,293         $—         $57,800,293   
Mutual Funds      642,396                         642,396   
Total Investments      $642,396         $57,800,293         $—         $58,442,689   
Other Financial Instruments                            
Futures Contracts      $1,761         $—         $—         $1,761   

For further information regarding security characteristics, see the Portfolio of Investments.

(2) Portfolio Securities

The cost and unrealized appreciation and depreciation in the value of the investments owned by the fund, as computed on a federal income tax basis, are as follows:

 

Aggregate cost      $54,450,649   
Gross unrealized appreciation      4,235,240   
Gross unrealized depreciation      (243,200
Net unrealized appreciation (depreciation)      $3,992,040   

 

6


Supplemental Information (unaudited) – continued

 

The aggregate cost above includes prior fiscal year end tax adjustments, if applicable.

(3) Transactions in Underlying Affiliated Funds – Affiliated Issuers

An affiliated issuer may be considered one in which the fund owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, the fund assumes the following to be an affiliated issuer:

 

Underlying Affiliated Fund    Beginning
Shares/Par
Amount
     Acquisitions
Shares/Par
Amount
     Dispositions
Shares/Par
Amount
     Ending
Shares/Par
Amount
 
MFS Institutional Money Market Portfolio      868,573         7,784,180         (8,010,357      642,396   
Underlying Affiliated Fund    Realized
Gain (Loss)
     Capital Gain
Distributions
     Dividend
Income
     Ending
Value
 
MFS Institutional Money Market Portfolio      $—         $—         $770         $642,396   

(4) Jurisdiction Weightings

Jurisdiction weighting percentages are based on net assets (applicable to common shares), as of August 31, 2015, are as follows:

 

California     163.2%   
Puerto Rico     2.9%   
New York     1.7%   
Guam     1.0%   

The jurisdiction weighting percentages include both accrued interest amounts and equivalent exposure from any derivatives holdings, if applicable.

 

7


ITEM 2. CONTROLS AND PROCEDURES.

 

(a) Based upon their evaluation of the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as conducted within 90 days of the filing date of this Form N-Q, the registrant’s principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

 

(b) There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

ITEM 3. EXHIBITS.

File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2): Attached hereto.


Notice

A copy of the Agreement and Declaration of Trust, as amended, of the Registrant is on file with the Secretary of State of The Commonwealth of Massachusetts and notice is hereby given that this instrument is executed on behalf of the Registrant by an officer of the Registrant as an officer and not individually and the obligations of or arising out of this instrument are not binding upon any of the Trustees or shareholders individually, but are binding only upon the assets and property of the respective constituent series of the Registrant.


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.

Registrant: MFS CALIFORNIA MUNICIPAL FUND

 

By (Signature and Title)*    ROBIN A. STELMACH
  Robin A. Stelmach, President

Date: October 15, 2015

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 (Signature and Title)*    ROBIN A. STELMACH
 

Robin A. Stelmach, President

(Principal Executive Officer)

Date: October 15, 2015

 

By (Signature and Title)*    DAVID L. DILORENZO
 

David L. DiLorenzo, Treasurer

(Principal Financial Officer and Accounting Officer)

Date: October 15, 2015

 

* Print name and title of each signing officer under his or her signature.