N-Q 1 dnq.htm ALLIANCE CALIFORNIA MUNICIPAL INCOME FUND, INC Alliance California Municipal Income Fund, Inc

 

 

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: 811-10575

ALLIANCE CALIFORNIA MUNICIPAL INCOME FUND, INC.

(Exact name of registrant as specified in charter)

1345 Avenue of the Americas, New York, New York 10105

(Address of principal executive offices) (Zip code)

Joseph J. Mantineo

AllianceBernstein L.P.

1345 Avenue of the Americas

New York, New York 10105

(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 221-5672

Date of fiscal year end: October 31, 2009

Date of reporting period: January 31, 2009

 

 

 


ITEM 1. SCHEDULE OF INVESTMENTS.


Alliance California Municipal Income Fund

Portfolio of Investments

January 31, 2009 (unaudited)

 

     Principal
Amount
(000)
     U.S. $ Value

MUNICIPAL OBLIGATIONS - 172.6%

       

Long-Term Municipal Bonds - 172.4%

       

California - 154.2%

       

ABAG Fin Auth for Nonprofit Corp.(Bijou
Woods Apts) AMT

       

FNMA Series 01A

       

5.30%, 12/01/31

   $ 2,735      $ 2,376,223

Banning Util Auth
(Wtr & Enterprise Rev)

       

FGIC Series 05

       

5.25%, 11/01/30

     1,850        1,635,696

Beaumont Fin Auth

       

AMBAC Series C

       

5.00%, 9/01/26

     755        676,744

Bellflower Redev Agy MFHR
(Bellflower Terrace) AMT

       

FNMA Series 02A

       

5.50%, 6/01/35 (a)

     3,000        2,814,180

California
(Prerefunded)

       

5.25%, 4/01/30 (b)

     8,825        9,943,922

5.30%, 4/01/29

     1,000        1,180,300

Series 03

       

5.25%, 2/01/24

     1,500        1,507,725

California
(Unrefunded)

       

5.25%, 4/01/30

     175        169,769

California AMT

       

MBIA Series 01BZ

       

5.375%, 12/01/24

     4,000        3,664,000

California Dept of Wtr Res
(Pwr Sup Rev)
(Prerefunded)

       

Series 02A

       

5.375%, 5/01/22

     4,000        4,567,800

California Ed Fac Auth
(Lutheran Univ)

       

Series 04C

       

5.00%, 10/01/24

     1,250        948,637

California Ed Fac Auth
(Univ of the Pacific)

       

5.00%, 11/01/21

     260        253,994

Series 02

       

5.375%, 11/01/32

     4,035        4,501,849


California Hlth Fac Fin Auth
(Cottage Hlth Sys)

       

MBIA Series 03B

       

5.00%, 11/01/23

   2,770      2,534,910

California Hlth Fac Fin Auth
(Lucile Salter Packard Hosp)

       

AMBAC Series 03C

       

5.00%, 8/15/22

   3,295      3,328,181

California Hlth Fac Fin Auth
(Sutter Hlth)

       

Series 00A

       

6.25%, 8/15/35

   5,000      5,038,100

California Infra & Econ Dev Bank
(YMCA Metro L.A. Proj)

       

AMBAC Series 01

       

5.25%, 2/01/32 (c)

   6,295      6,035,583

California Pub Wks Brd
(Dept of Hlth Svcs-Richmond Lab)

       

XLCA Series 05B

       

5.00%, 11/01/30

   3,500      2,995,650

California Statewide CDA
(Bentley Sch)

       

6.75%, 7/01/32

   2,445      1,906,073

California Statewide CDA
(Kaiser Permanente)

       

Series 02

       

5.50%, 11/01/32

   4,000      3,450,120

Coast CCD

       

FSA Series 06B

       

5.00%, 8/01/23 - 8/01/24 (d)

   6,000      6,166,408

Cucamonga Sch Dist COP

       

Series 02

       

5.125%, 6/01/23 (e)

   820      706,307

Fontana
(Cmnty Fac Dist No 22-Sierra Hills)

       

Series 04

       

5.85%, 9/01/25

   2,000      1,480,460

Fontana Pub Fin Auth
(North Fontana Redev Proj)

       

AMBAC Series 03A

       

5.50%, 9/01/32

   4,800      4,083,984

Fullerton Redev Agy COP

       

RADIAN

       

5.00%, 4/01/21

   2,200      1,990,670

Golden St Tobacco Securitization Corp.
(Prerefunded)

       

XLCA Series 03B

       

5.50%, 6/01/33

   1,000      1,142,950

Grossmont-Cuyamaca CCD

       

ASSURED GTY

       

5.00%, 8/01/23 (d)

   2,860      2,973,942


Grossmont-Cuyamaca Comnty Coll Dist

       

ASSURED GTY

       

5.00%, 8/01/22 (d)

   3,140      3,329,907

Huntington Park Pub Fin Auth

       

FSA Series 04A

       

5.25%, 9/01/17

   1,000      1,132,740

La Quinta Fin Auth

       

AMBAC Series 04A

       

5.25%, 9/01/24

   3,000      3,031,620

Loma Linda Hosp
(Loma Linda Univ Med Ctr)

       

Series 05A

       

5.00%, 12/01/23

   500      361,705

Los Angeles CCD

       

Series F-1

       

5.00%, 8/01/28

   4,200      4,143,384

Los Angeles Cnty Metro Transp Auth
(Prerefunded)

       

FGIC Series 00A

       

5.25%, 7/01/30

   3,700      3,968,324

Los Angeles Comnty Redev Agy
(Grand Central Square)

       

Series 04L

       

5.00%, 3/01/18

   1,000      963,260

Los Angeles Comnty Redev Agy
(Grand Central Square) AMT

       

AMBAC Series 02

       

5.375%, 12/01/26

   6,635      5,978,799

Los Angeles Dept of Wtr & Pwr
(Wtrwks Rev)

       

FGIC Series 01A

       

5.125%, 7/01/41

   10,000      9,536,700

Los Angeles Uni Sch Dist
(Prerefunded)

       

MBIA Series 02E

       

5.125%, 1/01/27 (b)

   10,000      11,306,800

Murrieta Valley Uni Sch Dist CFD ETM
(Prerefunded)

       

Series 02

       

6.375%, 9/01/32

   930      1,073,090

Napa MFHR
(Vintage at Napa Apts) AMT

       

FNMA Series 01A

       

5.20%, 6/15/34

   4,500      4,118,805

Palo Alto
(Univ Ave Area Off Street Parking Assess Dist)

       

Series 02A

       

5.875%, 9/02/30

   8,020      5,738,551

Pomona COP

       

AMBAC Series 03

       

5.50%, 6/01/34

   1,640      1,524,905


Port of Oakland AMT

       

FGIC Series 02L

       

5.375%, 11/01/27

   5,000      3,978,300

Riverside Cnty Pub Fin Auth
(Tax Alloc Rev)

       

XLCA Series 04

       

5.00%, 10/01/23 - 10/01/24

   2,860      2,275,398

Riverside Comnty Coll Dist

       

MBIA Series C

       

5.00%, 8/01/25

   455      460,651

Salinas Valley Solid Waste Auth
(Transfer Station) AMT

       

AMBAC Series 02

       

5.25%, 8/01/31

   3,930      2,785,898

San Diego Uni Sch Dist
(Election of 1998)

       

MBIA Series 04E-1

       

5.00%, 7/01/23 - 7/01/24

   2,000      2,061,710

San Francisco City & Cnty Arpt Commn
(Int’l Arpt)

       

FGIC Series 03

       

5.125%, 5/01/19

   1,000      1,043,430

San Francisco City & Cnty Arpt Commn
(Int’l Arpt) AMT

       

MBIA Series 02-28A

       

5.125%, 5/01/32

   2,500      1,875,875

San Francisco City & Cnty COP
(San Bruno Jail #3)

       

AMBAC Series 00

       

5.25%, 10/01/33

   5,000      4,891,400

San Joaquin Hills Transp Corridor Agy

       

MBIA Series 97

       

5.25%, 1/15/30

   5,000      3,656,800

Sequoia Uni Sch Dist
(Prerefunded)

       

FSA Series 02

       

5.125%, 7/01/31

   1,770      1,978,754

Temecula Redev Agy

       

MBIA Series 02

       

5.25%, 8/01/36

   6,270      4,845,644

Torrance COP
(Ref & Pub Impt Proj)

       

AMBAC Series 04A

       

5.00%, 6/01/24

   2,275      2,281,165

AMBAC Series 05B

       

5.00%, 6/01/24

   665      666,802
         
        167,084,594
         

Colorado - 0.3%

       

Murphy Creek Metro Dist No 3

       

Series 06

       

6.00%, 12/01/26

   500      308,760
         


Nevada - 1.9%

       

Henderson Loc Impr Dist

       

FSA Series A

       

5.00%, 3/01/18

   2,155      2,034,234
         

Ohio - 0.4%

       

Port Auth of Columbiana Cnty SWFR
(Apex Enviro LLC) AMT

       

Series 04A

       

7.125%, 8/01/25

   500      417,415
         

Puerto Rico - 15.6%

       

Puerto Rico

       

Series 06A

       

5.25%, 7/01/22

   500      455,860

Puerto Rico
(Pub Impr)

       

Series 01A

       

5.50%, 7/01/19

   500      484,905

Series 04A

       

5.25%, 7/01/19

   900      844,434

Puerto Rico Elec Pwr Auth
(Prerefunded)

       

XLCA Series 02-2

       

5.25%, 7/01/31

   6,000      6,812,580

Puerto Rico Govt Dev Bank
(Sr Notes)

       

Series 06B

       

5.00%, 12/01/15

   500      475,765

Puerto Rico Hwy & Transp Auth
(Prerefunded)

       

Series 02D

       

5.375%, 7/01/36

   6,450      7,174,915

Puerto Rico Pub Bldg Auth

       

Series N

       

5.50%, 7/01/22

   700      649,222
         
        16,897,681
         

Total Long-Term Municipal Bonds
(cost $196,503,444)

        186,742,684
         

Short-Term Municipal Notes - 0.2%

       

California - 0.2%

       

California Dept of Wtr Res
(Pwr Sup Rev)

       

Series F-4

       

0.40%, 5/01/22 (e)

(cost $200,000)

   200      200,000
         


Total Investments - 172.6%
(cost $196,703,444) (f)

            186,942,684  

Other assets less liabilities - (5.6)%

            (6,057,393 )

Preferred Stock at redemption value - (67.0)%

            (72,550,000 )
               

Net Assets Applicable to Common Shareholders - 100.0% (g)

          $ 108,335,291  
               

INTEREST RATE SWAP TRANSACTIONS

 

               Rate Type        

Swap Counterparty

   Notional
Amount
(000)
   Termination
Date
   Payments
made by
the Portfolio
    Payments
received by
the Portfolio
    Unrealized
Appreciation/
(Depreciation)
 

Goldman Sachs

   $ 13,500    12/15/11    1.828 %   SIFMA *   $ 50,851  

JP Morgan Chase

     13,500    9/20/10    2.080 %   SIFMA *     (161,220 )

JP Morgan Chase

     13,500    11/20/10    1.855 %   SIFMA *     (142,457 )

Merrill Lynch

     2,300    10/21/16    SIFMA *   4.128 %     246,252  

Merrill Lynch

     3,000    8/09/26    4.063 %   SIFMA *     (350,397 )

 

(a) Variable rate coupon, rate shown as of January 31, 2009.
(b) Position, or portion thereof, has been segregated to collateralize tender option bonds.
(c) Position, or a portion thereof, has been segregated to collateralize interest rate swaps.
(d) Security represents the underlying municipal obligation of an inverse floating rate obligation held by the Fund.
(e) Variable Rate Demand Notes (VRDN) are instruments whose interest rates change on a specific date (such as coupon date or interest payment date) or whose interest rates vary with changes in a designated base rate (such as the prime interest rate). This instrument is payable on demand and is secured by letters of credit or other credit support agreements from major banks.
(f) As of January 31, 2009, the cost basis of investment securities owned was substantially identical for both book and tax purposes. Gross unrealized appreciation of investments was $6,642,067 and gross unrealized depreciation of investments was $16,402,827, resulting in net unrealized depreciation of $9,760,760.
(g) Portfolio percentages are calculated based on net assets applicable to common shareholders.
* Variable interest rate based on the Securities Industry & Financial Markets Association (SIFMA).

As of January 31, 2009, the Portfolio held 102% of net assets in insured bonds (of this amount 23% represents the Portfolio’s holding in pre-refunded insured bonds). 33% and 28% of the Portfolio’s insured bonds were insured by AMBAC and MBIA, respectively.


Glossary:

 

AMBAC -    American Bond Assurance Corporation
AMT -    Alternative Minimum Tax (subject to)
ASSURED GTY -    Assured Guaranty
CDA -    Community Development Administration
CFD -    Community Facilities District
COP -    Certificate of Participation
ETM -    Escrow to Maturity
FGIC -    Financial Guaranty Insurance Company
FNMA -    Federal National Mortgage Association
FSA -    Financial Security Assurance Inc.
MBIA -    Municipal Bond Investors Assurance
MFHR -    Multi-Family Housing Revenue
RADIAN -    Radian Group, Inc.
SWFR -    Solid Waste Facility Revenue
XLCA -    XL Capital Assurance Inc.


FINANCIAL ACCOUNTING STANDARDS NO. 157

The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157”), effective November 1, 2008. In accordance with FAS 157, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. FAS 157 also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized 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 the Fund’s own assumptions in determining the fair value of investments)

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of January 31, 2009:

 

Level

   Investments in
Securities
    Other
Financial
Instruments*
 

Level 1

   $ – 0  –   $ – 0  –

Level 2

     186,942,684       – 0  –

Level 3

     – 0  –     (356,971 )
                

Total

   $     186,942,684     $     (356,971 )
                

 

* Other financial instruments are derivative instruments not reflected in the portfolio of investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation / depreciation on the instrument.

Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

 

     Investments In
Securities
    Other
Financial
Instruments
 

Balance as of 11/1/2008

   $             – 0  –   $ 36,948  

Accrued discounts /premiums

     – 0  –     – 0  –

Realized gain (loss)

     – 0  –     – 0  –*

Change in unrealized appreciation/depreciation

     – 0  –     (393,919 )

Net purchases (sales)

     – 0  –     – 0  –

Net transfers in and/or out of Level 3

     – 0  –     – 0  –
                

Balance as of 1/31/09

   $ – 0  –   $ (356,971 )
                

Net change in unrealized appreciation/depreciation from Investments still held as of 01/31/2009

   $ – 0  –   $     (393,919 )
                

 

* The realized gain (loss) recognized during the period ended 01/31/2009 for other financial instruments was $0.


ITEM 2. CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.

(b) There were no changes in the registrant’s internal controls over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

ITEM 3. EXHIBITS.

The following exhibits are attached to this Form N-Q:

 

EXHIBIT NO.

 

DESCRIPTION OF EXHIBIT

3 (a) (1)   Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
3 (a) (2)   Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


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): Alliance California Municipal Income Fund, Inc.

 

By:   /s/    Robert M. Keith
  Robert M. Keith
  President
Date:   March 27, 2009

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/    Robert M. Keith
  Robert M. Keith
  President
Date:   March 27, 2009
By:   /s/    Joseph J. Mantineo
  Joseph J. Mantineo
  Treasurer and Chief Financial Officer
Date:   March 27, 2009