-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, M0mhrSk8OyBs4MFUaQFFfnYB8Mg3I9YHhH9kP2GDVqfg90DdohnLrEERy+ZwqB17 6NR9p3INy/C4+CJBZYvPkQ== 0000950156-01-000130.txt : 20010307 0000950156-01-000130.hdr.sgml : 20010307 ACCESSION NUMBER: 0000950156-01-000130 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001130 FILED AS OF DATE: 20010301 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLONIAL INVESTMENT GRADE MUNICIPAL TRUST CENTRAL INDEX KEY: 0000847411 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05785 FILM NUMBER: 1558433 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6174263750 N-30D 1 0001.txt COLONIAL INVESTMENT GRADE MUNICIPAL TRUST-11/30/00 - -------------------------------------------------------------------------------- COLONIAL INVESTMENT GRADE MUNICIPAL TRUST ANNUAL REPORT - -------------------------------------------------------------------------------- November 30, 2000 [GRAPHIC OMITTED] PRESIDENT'S MESSAGE DEAR SHAREHOLDER: I am pleased to present to you the annual report for the Colonial Investment Grade Municipal Trust for the 12-month period which ended on November 30, 2000. We have seen two distinct cycles in the bond market over the past 12 months. During the first half of the year, the economy was continuing its rapid growth. Consumer confidence and spending were at high levels. Productivity increases offset rising labor and production costs. However, the shadow looming over this period was OPEC's response to the global demand for oil. OPEC's cut in production levels raised oil prices and contributed to an increase in the rate of inflation. The Federal Reserve Board, continuing with its efforts to engineer a slowing of domestic growth, raised interest rates in order to stave off inflation. ~It was a volatile time for the municipal bond market. The second half of the year, however, was markedly different. Economic indicators reflected a slowing in the domestic economy. Housing starts were at their lowest levels in two years. Auto manufacturers announced cuts in production. There were also signs of a decline in consumer and capital spending levels for this period. In this environment of declining economic growth, the bond market stabilized. Municipals, for the most part, mirrored Treasury securities and rallied as yields declined. Although neither a declining inflation rate -- which has remained on a steady downward slope since the first quarter of this year -- nor a slowdown in economic activity prompted the Federal Reserve to cut interest rates before the end of 1999. When indicators revealed that the economy was slowing faster than expected, the Federal Reserve responded by~cutting its benchmark interest rate by one half of a percentage point on January 4, 2001. The following report will provide you with specific information about the Fund's~performance and the strategies used by your Fund's portfolio manager during this period. Thank you for choosing Colonial Investment Grade Municipal Trust and for giving us the opportunity to serve your investment needs. Sincerely, /s/ Stephen E. Gibson Stephen E. Gibson President January 11, 2001 Not FDIC May Lose Value Insured No Bank Guarantee Because market and economic conditions change frequently, there can be no assurance that the trends described above or on the~following pages will continue or come to pass. - ------------------------------------------------------------------------------- PORTFOLIO MANAGER'S REPORT - ------------------------------------------------------------------------------- FUND PERFORMANCE For the 12-month period which ended on November 30, 2000, the Colonial Investment Grade Municipal Trust performed better than its benchmark index. The Fund returned 9.36% at net asset value (NAV) compared to an 8.18% return for the Lehman Brothers Municipal Bond Index. The Lehman Brothers Municipal Bond Index is an unmanaged index and does not have fees or expenses. Neither the public nor institutions can invest in this index. LITTLE BENEFIT GAINED FROM FAVORABLE ENVIRONMENT Our significant holdings of high yield securities hurt the Fund's performance, which~otherwise would have been stronger. Overall performance in the high yield market was poor for two reasons. The health care industry continued to suffer from cutbacks in~federal Medicaid payments as mandated in the Balanced Budget Act of 1997. These~cutbacks contributed to the erosion of issuers' margins, especially in the hospital industry. Also, as the economy begins to slow, we are seeing a weakening in the performance of bonds in economically sensitive sectors (for example, industrial development bonds, and bonds issued by taxable corporations and smaller utilities). However, we still believe that attractive investment opportunities are available in the high yield sector and we will attempt to selectively add these securities to the portfolio. Also, during the latter half of the year, one of our strategies for improving the Fund's~performance was to increase the sensitivity of some of the Fund's holdings to changing interest rates. We attempted this, in part, by increasing the position of zero coupon bonds. By definition, zero coupon bonds (or zeros) are debt securities that do not pay interest on a current basis but all at maturity. Since zeros are traditionally sold at a deep discount to make up for the absence of these interest payments, when interest rates decline, the value of these bonds increases. By adding zeros, we believe the Fund might perform better in a declining interest rate environment. OUTLOOK The economic indicators are suggesting that domestic economic growth is slowing. The advance report on the gross domestic product for the third quarter of 2000 announced a growth rate of 3.1% (excluding government spending) which was lower than expected. 12-MONTH CUMULATIVE TOTAL RETURNS, ASSUMING REINVESTMENT OF ALL DISTRIBUTIONS FOR THE PERIOD ENDED 11/30/00 NAV 9.36% - ----------------------------------------- Market Price 5.20% - ----------------------------------------- DISTRIBUTIONS DECLARED PER COMMON SHARE 12/1/99 - 11/30/00 $0.604 - ----------------------------------------- Price per share as of 11/30/00 NAV $10.55 - ----------------------------------------- Market Price $8.92 - ----------------------------------------- A portion of the Fund's income may be subject to the alternative minimum tax. The Fund may at times purchase tax-exempt securities at a discount. Some or all of this discount may be included in the Fund's ordinary income, and is~taxable when distributed. TOP 5 INDUSTRY SECTORS 11/30/00 Local GO's 16.2% - ----------------------------------------- Hospital 12.3% - ----------------------------------------- Education 8.9% - ----------------------------------------- State Appropriate 7.4% - ----------------------------------------- Toll Facility 5.2% QUALITY BREAKDOWN AS OF 11/30/00 AAA 58.5% - ----------------------------------------- AA 12.8% - ----------------------------------------- A 10.3% - ----------------------------------------- BBB 8.8% - ----------------------------------------- BB 0.3% - ----------------------------------------- Non-rated 8.9% - ----------------------------------------- Cash equivalents 0.4% - ----------------------------------------- Quality breakdowns are calculated as a percentage of total investments, including short-term obligations. Ratings shown in the quality~breakdown represent the highest~rating assigned to a particular bond~by one of the following nationally~recognized rating agencies:~Standard & Poor's Corporation, Moody's Investors Service, Inc. or Fitch Investors Service, Inc. Sector breakdowns are calculated as a percentage of net assets. Because the Fund is actively managed, there can be no guarantee the Fund will continue to maintain these quality breakdowns or invest in these sectors in the future. Retail sales and labor statistics are considerably softer. Capital spending will likely decrease in the months ahead. Although high earlier this year, energy prices have dipped slightly. The rate of inflation -- always of great concern to the Federal Reserve Board -- has been declining steadily throughout the year. To prevent the economy from stalling, the Federal Reserve cut its short-term interest rate by one half of a percentage in the beginning of 2001. This decrease in interest rates should have a positive effect on the bond market. The Fund is well positioned for a stronger bond market. /s/ William C. Loring, Jr. William C. Loring, Jr., the portfolio manager of the Colonial Investment Grade Municipal Trust, is a~senior vice president of Colonial Management Associates, Inc., the Advisor. The Fund involves certain risks, such as credit risks associated with lower-rated bonds and changes in interest rates.~High-yield municipal bond investing carries increased credit risks. PERFORMANCE OF THE FUND AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX 12/1/99 - 11/30/00 Colonial Investment Grade Municipal Trust 9.36% Lehman Brothers Municipal Bond Index 8.18% The Lehman Brothers Municipal Bond Index is a broad-based, unmanaged index that tracks the performance of the municipal bond market. Unlike mutual funds, indexes are not investments and do not incur fees or expenses. It is not possible to invest directly in an index. - ------------------------------------------------------------------------------------------------ INVESTMENT PORTFOLIO - ------------------------------------------------------------------------------------------------ November 30, 2000 (In Thousands)
MUNICIPAL BONDS - 97.8% PAR VALUE - ------------------------------------------------------------------------------------------------ EDUCATION - 9.8% EDUCATION - 8.9% AL University of South Alabama, Series 1999, (a) 11/15/18 $ 2,500 $ 914 CA State Educational Facilities Authority, Santa Clara University, Series 1996, 5.000% 09/01/15 (f) 800 848 IL Chicago, State University Auxiliary Facilities, Series 1998, 5.500% 12/01/23 1,085 1,093 MA State College Building Authority, Series 1999 A, (a) 5/01/23 2,710 779 MA State Health & Educational Facilities Authority, Brandeis University, Series 1998 I, 4.750% 10/01/28 2,550 2,234 MA State Industrial Finance Agency, Tabor Academy, Series 1998, 5.400% 12/01/28 1,000 916 MN Univeristy of Minnesota: Series 1996 A, 5.750% 07/01/14 500 534 Series 1999 A, 5.500% 07/01/21 (f) 2,000 2,045 MO State Health & Educational Facilities Authority, Central Institute for the Deaf, Series 1999, 5.850% 01/01/22 600 608 NY St. Lawrence County Industrial Development Agency, St. Lawrence University, Series 1998 A, 5.500% 07/01/13 1,465 1,512 TX Texas Tech University, Series 1999, 5.000% 02/15/29 5,000 4,583 -------- 16,066 -------- STUDENT LOAN - 0.9% NE Nebhelp, Inc., Series 1993 A-6, 6.450% 06/01/18 1,500 1,653 -------- - ------------------------------------------------------------------------------------------------ HEALTHCARE - 15.2% HOSPITAL - 12.3% AZ Maricopa County Industrial Development Authority: Mayo Clinic Hospital, Series 1998, 5.250% 11/15/37 3,000 2,806 National Health Facilities II Project, 5.100% 01/01/33 2,500 2,236 FL Orange County Health Facilities Authority, Orlando Regional Healthcare System: Series 1996 C, 6.250% 10/01/13 1,740 1,946 Series 1996 C, 6.250% 10/01/13 720 800 Series 1999, 6.000% 10/01/26 175 173 IL Health Facility Authority, Series 1992 B, IFRN (variable rate) 9.140% 05/01/21 700 741 IL Southwestern Illinois Development Authority, Anderson Hospital, Series 1999, 5.375% 08/15/15 380 319 IL State Development Finance Authority, Adventist Health System, Series 1999, 5.500% 11/15/20 1,000 843 IL State Health Facilities Authority, Swedish American Hospital, Series 2000, 6.875% 11/15/30 500 506 LA Jefferson Parish Hospital Service District 2, Series 1998, 5.250% 07/01/12 1,000 1,015 LA State Public Facilities Authority, Touro Infirmary, Series 1999, 5.625% 08/15/29 500 438 MA State Health & Educational Facilities Authority, South Shore Hospital, Series 1999 F, 5.750% 07/01/29 1,000 896 MD State Health & Educational Facilities Authority, University of Maryland Medical System, 6.750% 07/01/30 250 258 MI Flint Hospital Building Authority, Hurley Medical Center, Series 1998 B, 5.375% 07/01/28 500 362 NC State Medical Care Commission, Gaston Health Care, Series 1998, 5.000% 02/15/29 5,000 4,311 NH Higher Educational and Health Facilities Catholic Medical Center, Series 1989, 6.000% 07/01/17 2,500 2,365 NV Henderson, Catholic Healthcare West, Series 1999 A, 6.750% 07/01/20 500 502 TN Metropolitan Government, Nashville & Davidson Counties, Meharry Medical College, Series 1996, 6.000% 12/01/16 1,575 1,702 -------- 22,219 -------- INTERMEDIATE CARE FACILITIES - 0.2% IL State Development Finance Authority, Hoosier Care, Inc., Series 1999 A, 7.125% 06/01/34 490 438 -------- NURSING HOME - 2.7% CO Health Care Facilities Authority Pioneer Health Care Series 1989, 10.500% 05/01/19 1,685 1,675 DE State Economic Development Authority, Churchman Village Project, Series A, 10.000% 03/01/21 950 1,084 FL Escambia County, Beverly Enterprises - Florida, Inc., Series 1985, 9.800% 06/01/11 165 170 PA Chester County Industrial Development, Pennsylvania Nursing Home, Inc., Series 1989, 10.125% 05/01/19 (b) 1,204 722 PA Delaware County Authority, Main Line and Haverford Nursing, Series 1992, 9.000% 08/01/22 580 607 WI State Health & Educational Facilities Authority, Metro Health Foundation, Inc., Series 1993, 10.000% 11/01/22 (b) 1,300 689 -------- 4,947 -------- - ------------------------------------------------------------------------------------------------ HOUSING - 3.7% ASSISTED LIVING/SENIOR - 0.3% TX Bell County Health Facilities Development Corp., Care Institutions, Inc., 9.000% 11/01/24 490 522 -------- MULTI-FAMILY - 2.1% FL Broward County Housing Finance Authority, Chaves Lake Apartment Project, Series 2000, 7.500% 07/01/40 500 506 FL Clay County Housing Finance Authority, Madison Commons Apartments, Series 2000 A, 7.450% 07/01/40 250 253 MN White Bear Lake, Birch Lake Townhome Project, Series 1989 A, 10.250% 07/15/19 775 804 Series 1989 B, (a) 07/15/19 (c) 700 283 Resolution Trust Corp., Pass Through Certificates, Series 1993 A, 9.250% 12/01/16 (d) 1,891 1,899 -------- 3,745 -------- SINGLE FAMILY - 1.3% CO State Housing Finance Authority, Series 2000 B 2, 7.250% 10/01/31 500 572 IL Chicago, Series 2000 A, 7.150% 09/01/31 500 567 LA Louisiana Housing Finance Agency, Residual Lien Mortgage, Series 1992, 7.375% 09/01/13 195 199 OH State Housing Finance Agency, Series B 4, 9.162% 03/31/31 915 961 -------- 2,299 -------- INDUSTRIAL - 2.6% FOREST PRODUCTS - 1.9% IN Jasper County, Georgia Pacific Corp., Series 2000, 6.700% 04/01/29 1,000 949 MN International Falls, Boise Cascade Corp., Series 1999, 6.850% 12/01/29 1,000 996 VA Bedford County Industrial Development Authority Nekoosa Packaging Corp., Series 1999 A, 6.550% 12/01/25 1,500 1,426 -------- 3,371 -------- MANUFACTURING - 0.7% MN Brooklyn Park, TL Systems Corp., Series 1991, 10.000% 09/01/16 860 962 MO State Development Finance Board, Proctor & Gamble Co., Series 1999, 5.200% 03/15/29 250 236 -------- 1,198 -------- METALS & MINING - 0.0% VA Peninsula Ports Authority, Ziegler Coal Project, Series 1997, 6.900% 05/02/22 (g) 500 75 -------- - ------------------------------------------------------------------------------------------------ OTHER - 5.1% POOL/BOND BANK - 0.1% FL State Municipal Loan Council, Series 2000 A, (a) 04/01/21 520 165 -------- REFUNDED/ESCROWED (d) - 5.0% CA Contra Costa County Public Financing Authority, Series 1992 A, 7.100% 08/01/22 635 679 CA San Joaquin Hills Transportation Corridor Agency, Series 1993, (a) 01/01/23 5,250 1,534 CA State, Series 1995, 5.750% 03/01/19 1,930 2,069 CO Denver City and County Airport, Series B, 7.250% 11/15/23 205 219 DC Hospital, Washington Hospital Center, Series 1990 A, 8.750% 01/01/15 615 630 DE State Economic Development Authority, Riverside Hospital, Series 1992 A, 9.500% 01/01/22 225 261 FL Clearwater Housing Authority, Hampton Apartments, Series 1994, 8.250% 05/01/24 690 777 MI Wayne County Building Authority, Series 1992 A, 8.000% 03/01/17 250 265 MN Mille Lacs Capital Improvement Authority, Mille Lacs Band of Chippewa, Series 1992 A, 9.250% 11/01/12 225 248 NC Lincoln County, Lincoln County Hospital, 9.000% 05/01/07 135 155 TN Metropolitan Government, Nashville & Davidson Counties, 6.150% 05/15/25 1,000 1,044 TN Shelby County, Health, Education, & Housing Facilities Board, Open Arms Development Center: Series 1992 A, 9.750% 08/01/19 440 563 Series 1992 C, 9.750% 08/01/19 440 563 -------- 9,007 -------- - ------------------------------------------------------------------------------------------------ OTHER REVENUE - 0.5% RECREATION DC District of Columbia, Smithsonian Institute, Series 1997, 5.000% 02/01/28 1,000 910 -------- - ------------------------------------------------------------------------------------------------ RESOURCE RECOVERY - 1.2% DISPOSAL IL Development Finance Authority, Waste Management, Inc., Series 1997, 5.050% 01/01/10 500 437 MA State Industrial Finance Agency, Peabody Monofill Associates, Inc., Ogden Hill Project: Series 1995, 9.000% 09/01/05 170 178 Series 1998 A, 5.450% 12/01/12 1,250 1,179 MI State Waste Management, United Waste Systems, Inc., Series 1995, 5.200% 04/01/10 500 442 -------- 2,236 -------- - ------------------------------------------------------------------------------------------------ TAX-BACKED - 32.7% LOCAL APPROPRIATED - 1.5% MN Hibbing Economic Development Authority, 6.400% 02/01/12 335 333 MO St. Louis Industrial Development Authority, St. Louis Convention Center, Series 2000, (a) 07/15/18 300 113 TX Houston Independent School Distict, Public Faclities Corp., Series 1998 A, (a) 9/15/13 2,500 1,268 TX Houston, Series 2000, 6.400% 06/01/27 1,000 1,064 -------- 2,778 -------- LOCAL GENERAL OBLIGATIONS - 16.2% CO El Paso County School District No. 11, Series 1996, 7.125% 12/01/19 1,870 2,273 CO Highlands Ranch Metropolitan District, Series 1996, 6.500% 06/15/11 1,375 1,562 IL Chicago: Series 1995 A-2, 6.250% 01/01/14 1,480 1,643 Series 1999, 5.500% 01/01/23 1,000 1,013 IL Chicago Board of Education: Series 1997 A, 5.250% 12/01/30 4,000 3,792 Series 1998 B-1, (a) 12/01/21 2,000 599 IL St. Clair County Public Building Commision, (a) 12/01/13 2,000 1,008 IL St. Clair County, Series 1999, (a) 10/01/16 2,000 839 MI St. Johns Public School, Series 1998, 5.100% 05/01/25 1,000 957 MN Minneapolis-St. Paul Metropolitan Aiports Commission, Series 1998 13, 5.250% 01/01/13 1,000 1,009 NY New York City, Series 1997 A, 7.000% 08/01/07 2,000 2,237 NY Yonkers, Series 1999 A, 4.500% 12/01/17 1,000 884 OH Olmsted Falls School District, Series 1999: 5.500% 12/01/00 340 340 5.500% 12/01/01 360 362 5.500% 12/01/02 380 382 TX Houston Independent School District, Series 1999 A, 5.000% 02/15/24 7,000 6,490 TX Hurst Euless Bedford Independent School District, Series 1998, 4.500% 08/15/25 2,500 2,115 TX La Joya Independent School District, Series 1998, 5.500% 02/15/12 1,000 1,026 WA King County, Series 1998 B, 5.000% 01/01/30 1,000 912 -------- 29,443 -------- SPECIAL NON-PROPERTY TAX - 3.7% FL Tampa Sports Authority, Tampa Bay Arena Project, Series 1995, 5.750% 10/01/25 1,000 1,056 NM Dona Ana County, Series 1998, 5.500% 06/01/15 1,000 1,039 NY New York City Transitional Finance Authority, Series 1998 C, 4.750% 05/01/23 2,000 1,780 NY State Local Government Assistance Corp., Series 1993 E, 5.000% 04/01/21 3,000 2,867 -------- 6,742 -------- SPECIAL PROPERTY TAX - 0.4% CA Contra Costa County Public Financing Authority, Series 1992 A, 7.100% 08/01/22 365 378 FL Indigo Cummnity Development District, Series 1999 B, 6.400% 05/01/06 200 200 FL Lexington Oaks Community Development District, Series 1998 B, 5.500% 05/01/05 140 138 -------- 716 -------- STATE APPROPRIATED - 7.4% IN State Office Building Commission, Women's Prison, Series B, 6.250% 07/01/16 2,820 3,130 NY New York State Dorm Authority, Consolidation City University, Series 1993 A, 5.750% 07/01/18 5,000 5,220 NY State Dormitory Authority, Mental Health Services: Series 1998 C, 5.000% 02/15/11 1,485 1,471 Series 1999 C, 4.750% 08/15/19 1,000 906 NY State Dormitory Authority, Series 2000 C, 5.750% 05/15/17 1,000 1,065 NY State Medical Care Facilities Finance Agency, Mental Health Services Facilities Improvement, Series 1991 A, 7.500% 02/15/21 100 103 NY State Urban Development Corp., 5.600% 04/01/15 1,000 1,041 WV State Building Commission, Series 1998 A, 5.375% 07/01/18 500 503 -------- 13,439 -------- STATE GENERAL OBLIGATIONS - 3.5% CA State, Series 1995, 5.750% 03/01/19 70 72 DC District of Columbia, Series 1999 A, 5.375% 06/01/18 1,250 1,240 MA State, Series 1998 C, 5.250% 08/01/17 1,000 1,005 PR Commonwealth of Puerto Rico Aqueduct & Sewer Authority: 6.250% 07/01/12 1,000 1,137 6.250% 07/01/13 750 854 TX State, Series 1999 ABC, 5.500% 08/01/35 (f) 2,000 1,982 -------- 6,290 -------- - ------------------------------------------------------------------------------------------------ TRANSPORTATION - 13.9% AIR TRANSPORTATION - 1.9% IL Chicago O'Hare International Airport, United Airlines, Inc., Series 2000 A, 6.750% 11/01/11 800 814 IN Indianapolis Airport Authority, Federal Express Corp., Series 1994, 7.100% 01/15/17 1,000 1,042 NC Charlotte, US Airways, Inc., Series 2000, 7.750% 02/01/28 500 479 NY Port Authority of New York & New Jersey, JFK International Air Terminal, Series 6, 6.250% 12/01/08 1,000 1,100 -------- 3,435 -------- AIRPORT - 4.8% CO Denver City & County Airport: Series B, 7.250% 11/15/23 795 838 Series 1997 E, 5.250% 11/15/23 1,000 963 Series 1998 B, 5.000% 11/15/25 1,800 1,660 MA State Port Authority: Series 1998 D, 5.000% 07/01/28 3,500 3,200 Series 1999, 7.270% 07/01/29 (d) 1,000 1,035 MI Wayne County, Detroit Metropolitan Airport, Series 1998 A, 5.000% 12/01/22 1,000 913 -------- 8,609 -------- TOLL FACILITIES - 5.2% CA Foothill/Eastern Transportation Corridor Agency, Series 1995 A, 5.000% 01/01/35 1,000 911 CA San Joaquin Hills Transportation Corridor Agency, Series A, (a) 01/15/15 2,000 955 CO State Public Highway Authority, E-470, Series B, (a) 09/01/11 2,000 1,150 IL Chicago, Skyway Bridge, Series 1996, 5.375% 01/01/16 1,750 1,751 MA State Turnpike Authority, Series 1999 A, 5.000% 01/01/39 3,900 3,524 NH State Turnpike Systems, Series 1991 C, IFRN (variable rate), 8.968% 11/01/17 (f) 1,000 1,218 -------- 9,509 -------- TRANSPORTATION - 2.0% CA San Mateo County Transportation District, Series 1998 A, 4.500% 06/01/18 1,000 904 IL Regional Transportation Authority, Series C, 7.750% 06/01/20 (f) 1,000 1,286 NV State Department of Business & Industry, Las Vegas Monorail Project, Series 2000: 7.375% 01/01/40 250 241 7.380% 01/20/30 250 244 OH Toledo-Lucas County Port Authority, CSX Transportation, Inc., Series 1992, 6.450% 12/15/21 1,000 1,000 -------- 3,675 -------- - ------------------------------------------------------------------------------------------------ UTILITY - 13.1% INDEPENDENT POWER PRODUCER - 0.6% MI Midland County Economic Development Corp., Series 2000, 6.875% 07/23/09 500 508 NY New York City Industrial Development Agency, Brooklyn Navy Yard Partners, Series 1997, 5.650% 10/01/28 200 179 PR Commonwealth of Puerto Rico Industrial, Educational, Medical & Environmental Cogeneration Facilities, AES Project, Series 2000, 6.625% 06/01/26 325 335 -------- 1,022 -------- INVESTOR OWNED - 4.8% IN Petersburg, Indiana Power & Light Co., Series 1993 B, 5.400% 08/01/17 3,000 3,043 MI State Strategic Fund, Detroit Edison Co., Series 1998 A, 5.550% 09/01/29 3,000 2,932 MS State Business Finance Corp., Systems Energy Resouces Project, Series 1998, 5.875% 04/01/22 1,000 894 TX Matagorda County Navigation District No. 1, Houston Light & Power Co., Series 1997, 5.125% 11/01/28 2,000 1,856 -------- 8,725 -------- JOINT POWER AUTHORITY - 1.9% IN State Municipal Power Agency, Series B, 6.000% 01/01/12 2,000 2,170 NC State Municipal Power Agency, Catawba Electric No. 1, Series 1998 A, 5.500% 01/01/15 640 659 NE American Public Energy Agency, Public Gas Agency - Western Project, Series 1999 A, 5.250% 06/01/11 700 671 -------- 3,500 -------- MUNICIPAL ELECTRIC - 1.2% NC University of North Carolina at Chapel Hill, (a) 08/01/14 1,000 487 NE Public Power District, Sereis 1998 A, 5.250% 01/01/11 500 512 TN Metropolitan Government, Nashville & Davidson Counties, Series 1996 A, (a) 05/15/09 1,825 1,199 -------- 2,198 -------- WATER & SEWER - 4.6% FL Miami-Dade County, Series 1999 A, 5.000% 10/01/29 2,000 1,853 MA Boston Water & Sewer Commission, Series 1998 D, 5.000% 11/01/28 3,000 2,744 MA State Water Resources Authority, Series 1998 B, 4.500% 08/01/22 500 430 MS Five Lakes Utility District, 8.250% 07/15/24 140 123 PA Erie Sewer Authority, 5.625% 06/01/17 1,500 1,586 WA King County, Series 1999, 5.250% 01/01/30 1,750 1,667 -------- 8,403 -------- TOTAL MUNICIPAL BONDS (cost of $173,723) 177,335 -------- MUNICIPAL PREFERRED SHARES - 0.3% SHARES VALUE - ------------------------------------------------------------------------------------------------ HOUSING - 0.3% MULTI-FAMILY Charter Mac Equity Issue Trust, 7.600% 11/30/50 (d) 500 $ 504 -------- TOTAL MUNICIPAL PREFERRED STOCK (cost of $500) 504 -------- OPTIONS - 0.3% - ------------------------------------------------------------------------------------------------ March 2001 Treasury Bond Call, Strike price 102, Expiration 02/17/01 31,000 610 -------- TOTAL OPTIONS (cost of $447) 610 -------- TOTAL INVESTMENTS (cost of $174,670) (h) 178,449 -------- SHORT-TERM OBLIGATIONS - 0.4% PAR - ------------------------------------------------------------------------------------------------ VARIABLE RATE DEMAND NOTES (i) IA State Finance Authority, Diocese of Sioux City, Series 1999, 4.200% 03/01/19 400 400 IL Galesburg, Knox College, Series 1999, 4.200% 07/01/24 100 100 TX Gulf Coast Waste Disposal Authority, Monsanto Co., Series 1996, 4.250% 07/01/01 100 100 WI State Health & Educational Facilities Authority, Monroe Joint Venture, Inc., Series 2000, 4.250% 01/01/30 200 200 -------- TOTAL SHORT-TERM OBLIGATIONS 800 -------- OTHER ASSETS & LIABILITIES, NET - 1.2% 2,117 - ------------------------------------------------------------------------------------------------ NET ASSETS - 100.0% $181,366 -------- NOTES TO INVESTMENT PORTFOLIO: - -------------------------------------------------------------------------------- (a) Zero coupon bond. (b) This issuer is in default of certain debt convenants. Income is not being accrued. (c) Accrued interest accumulates in the value of the security and is payable at redemption. The value of this security represents fair value as determined under procedures approved by the Trustees. (d) These securities are exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At November 30, 2000, the value of these securities amounted to $3,438 or 1.9% of net assets. (e) The Trust has been informed that each issuer has placed direct obligations of the U.S. Government in an irrevocable trust, solely for the payment of principal and interest. (f) These securities, or a portion thereof, with a total market value of $1,927, are being used to collateralize the open futures contracts indicated below. (g) This is a restricted security which was acquired on March 19, 1999 at a cost of $500. This security represents 0.0% of the Trust's net assets as of November 30, 2000 (h) Cost for federal income tax purposes is the same. (i) Variable rate demand notes are considered short-term obligations. Interest rates change peridocially on specified dates. These securities are payable on demand and are secured by either letters of credit or other credit support agreements from banks. The rates listed are as of November 30, 2000. Short futures contracts open at November 30, 2000: PAR VALUE UNREALIZED COVERED BY EXPIRATION DEPRECIATION TYPE CONTRACTS MONTH AT 11/30/00 - ---------------------------------------------------------------------------------------------- Treasury Bond $18,900 March $(413) Municipal Bond 5,700 March (59) ----- ($472) ----- ACRONYM NAME ------- ---- IFRN Inverse Floating Rate Note
- ------------------------------------------------------------------------------- STATEMENT OF ASSETS AND LIABILITIES - ------------------------------------------------------------------------------- November 30, 2000 (In thousands except for per share amount) ASSETS Investments at value (cost $174,670) $178,449 Short-term obligations 800 -------- 179,249 Cash $ 36 Receivable for: Investments sold 25 Interest 3,138 Other 1 3,200 ------ -------- Total assets 182,449 -------- LIABILITIES Payable for: Investments purchased 111 Distributions -- common shares 587 Distributions -- preferred shares 21 Variation margin on futures 186 Accrued: Management fee 98 Bookkeeping fee 4 Transfer agent fee 16 Deferred Trustees' fees 5 Other 55 ------ Total liabilities 1,083 -------- NET ASSETS $181,366 -------- COMPOSITION OF NET ASSETS Auction Preferred Shares (2 shares issued and outstanding at $25,000 per share) 60,000 Capital paid in -- common shares 126,931 Underdistributed net investment income 41 Accumulated net realized loss (8,913) Net unrealized appreciation (depreciation) on: Investments 3,779 Open futures contracts (472) -------- $181,366 -------- NET ASSETS at value for 11,509 common shares of beneficial interest outstanding $121,366 -------- Net asset value per common share $ 10.55 -------- NET ASSETS at value including undeclared dividends for 2 preferred shares outstanding $ 60,000 -------- - ------------------------------------------------------------------------------- STATEMENT OF OPERATIONS - ------------------------------------------------------------------------------- For the Year Ended November 30, 2000 (In thousands) INVESTMENT INCOME Interest $ 10,862 EXPENSES Management fee $ 1,156 Transfer agent 43 Bookkeeping fee 48 Trustees' fee 10 Custodian fee 2 Audit fee 25 Legal fee 8 Reports to shareholders 20 Preferred shares remarketing commissions 150 Other 81 1,543 -------- --------- Net Investment Income 9,319 NET REALIZED AND UNREALIZED GAIN (LOSS) ON PORTFOLIO POSITIONS Net realized loss on: Investments (2,292) Closed futures contracts (1,796) -------- Net realized loss (4,088) --------- Net change in unrealized appreciation/depreciation during the period on: Investments 7,862 Open futures contracts (762) -------- Net Change in Unrealized Appreciation/Depreciation 7,100 --------- Net Gain 3,012 --------- Increase in Net Assets from Operations $ 12,331 --------- - ------------------------------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------- (In thousands)
YEAR ENDED PERIOD ENDED NOVEMBER 30 NOVEMBER 30 ----------- ------------ INCREASE (DECREASE) IN NET ASSETS 2000 1999(a) - -------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 9,319 $ 6,693 Net realized gain (loss) (4,088) 1,044 Net change in unrealized appreciation/depreciation 7,100 (13,909) -------- -------- Net Increase (Decrease) from Operations 12,331 (6,172) DISTRIBUTIONS From net investment income -- common shares (6,951) (6,025) From net investment income -- preferred shares (2,490) (570) -------- -------- 2,890 (12,767) Fund Share Transactions: Preferred share offering (net of $190 and $809 commission and offering costs, respectively) (190) 59,191 -------- -------- Total Increase (Decrease) 2,700 46,424 NET ASSETS Beginning of period 178,666 132,242 -------- -------- End of period (including undistributed net investment income of $41 and $98, respectively) $181,366 $178,666 -------- -------- NUMBER OF FUND SHARES Common: Outstanding 11,509 11,509 -------- -------- Preferred: Issued in initial offering -- 2 Outstanding at Beginning of period 2 -- -------- -------- End of period 2 2 -------- --------
(a) The Fund changed its fiscal year end from December 31 to November 30. - ------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- November 30, 2000 NOTE 1. ACCOUNTING POLICIES ORGANIZATION Colonial Investment Grade Municipal Trust (the Trust), is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end, management investment company. The Trust's investment objective is to seek as high a level of after-tax total return as is consistent with prudent risk, by pursuing current income exempt from ordinary federal income tax and opportunities for long-term appreciation from a portfolio primarily invested in investment grade municipal bonds. The Trust authorized an unlimited number of common shares. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies that are consistently followed by the Trust in the preparation of its financial statements. SECURITY VALUATION AND TRANSACTIONS Debt securities generally are valued by a pricing service based upon market transactions for normal, institutional-size trading units of similar securities. When management deems it appropriate, an over-the-counter or exchange bid quotation is used. Futures contracts are valued based on the difference between the last sale price and the opening price of the contract. Short-term obligations with a maturity of 60 days or less are valued at amortized cost. Portfolio positions for which market quotations are not readily available are valued at fair value under procedures approved by the Trustees. Security transactions are accounted for on the date the securities are purchased, sold or mature. Cost is determined and gains (losses) are based upon the specific identification method for both financial statement and federal income tax purposes. The Trust may trade securities on other than normal settlement terms. This may increase the risk if the other party to the transaction fails to deliver and causes the Trust to subsequently invest at less advantageous prices. FEDERAL INCOME TAXES Consistent with the Trust's policy to qualify as a regulated investment company and to distribute all of its taxable and tax-exempt income, no federal income tax has been accrued. INTEREST INCOME, DEBT DISCOUNT AND PREMIUM: Interest income is recorded on the accrual basis. Original issue discount is accreted to interest income over the life of a security with a corresponding increase in the cost basis; market discount is not accreted. Premium is amortized against interest income with a corresponding decrease in the cost basis. Effective December 1, 2001, the Trust will adopt the provisions of the AICPA Audit and Accounting Guide for Investment Companies and will be required to amortize premium and discount on all debt securities. Upon the effective date, this accounting principle change will not have an impact on total net assets but will result in a reclassification between cost of securities held and net unrealized appreciation/depreciation. The Trust currently has not determined the impact of the adoption of the new accounting policy. DISTRIBUTIONS TO SHAREHOLDERS Distributions to common and preferred shareholders are recorded on the exdate. The amount and character of income and gains to be distributed are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. Reclassifications are made to the Trust's capital accounts to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. Distributions to preferred shareholders are recorded daily and are payable at the end of each dividend period. Each dividend payment period for the Auction Preferred Shares (APS) is generally seven days. The applicable dividend rate for the Auction Preferred Shares on November 30, 2000 was 4.30%. For the year ended November 30, 2000, the Trust paid dividends to Auction Preferred shareholders amounting to $2,489,908 representing an average APS dividend rate for such period of 4.14%. NOTE 2. FEES AND COMPENSATION PAID TO AFFILIATES MANAGEMENT FEE Colonial Management Associates, Inc. (the Advisor) is the investment Advisor of the Trust and furnishes accounting and other services and office facilities for a monthly fee equal to 0.65% annually of the Trust's average weekly net assets. BOOKKEEPING FEE The Advisor provides bookkeeping and pricing services for a monthly fee equal to $18,000 annually, plus 0.0233% annually of the Trust's average net assets over $50 million. OTHER The Trust pays no compensation to its officers, all of whom are employees of the Advisor. The Trust's Trustees may participate in a deferred compensation plan which may be terminated at any time. Obligations of the plan will be paid solely out of the Trust's assets. NOTE 3. PREFERRED SHARE OFFERING On August 26, 1999, the Trust offered and currently has outstanding 2,400 Auction Preferred Shares. The Auction Preferred Shares are redeemable at the option of the Trust on any dividend payment date at the redemption price of $25,000 per share, plus an amount equal to any dividends accumulated on a daily basis unpaid through the redemption date (whether or not such dividends have been declared). Total proceeds, net of commissions, of $59,250,000, were received upon completion of the offering. Costs incurred by the Trust in connection with the offering of the Auction Preferred Shares totaling $190,094 and $59,649 for fiscal year 2000 and 1999, respectively, were recorded as a reduction of capital paid in excess of par applicable to common shares. Under the Investment Company Act of 1940, the Trust is required to maintain asset coverage of at least 200% with respect to the Auction Preferred Shares as of the last business day of each month in which any Auction Preferred Shares are outstanding. Additionally, the Trust is required to meet more stringent asset coverage requirements under the terms of the Auction Preferred Shares and in accordance with the guidelines prescribed by the rating agencies. Should these requirements not be met, or should dividends accrued on the Auction Preferred Shares not be paid, the Trust may be restricted in its ability to declare dividends to common shareholders or may be required to redeem certain of the Auction Preferred Shares. At November 30, 2000 there were no such restrictions on the Trust. NOTE 4. PORTFOLIO INFORMATION INVESTMENT ACTIVITY During the period ended November 30, 2000, purchases and sales of investments, other than short-term obligations, were $39,602,892 and $44,937,841, respectively. Unrealized appreciation (depreciation) at November 30, 2000, based on cost of investments for both financial statement and federal income tax purposes was approximately: Gross unrealized appreciation $8,989,000 Gross unrealized depreciation (5,210,000) ---------- Net unrealized appreciation $3,779,000 ========== CAPITAL LOSS CARRYFORWARDS At November 30, 2000, capital loss carryforwards available (to the extent provided in regulations) to offset future realized gains were approximately as follows: YEAR OF EXPIRATION CAPITAL LOSS CARRYFORWARD ------------------ ------------------------- 2002 $ 454,000 2003 2,611,000 2004 1,455,000 2008 3,464,000 ---------- $7,984,000 ---------- Expired capital loss carryforwards, if any, are recorded as a reduction of capital paid in. To the extent loss carryforwards are used to offset any future realized gains, it is unlikely that such gains would be distributed since they may be taxable to shareholders as ordinary income. OTHER The Trust had greater than 10% of its net assets at November 30, 2000, invested in New York and Texas. There are certain risks arising from geographic concentration in any state. Certain revenue or tax related events in a state may impair the ability of certain issuers of municipal securities to pay principal and interest on their obligations. The Trust may focus its investments in certain industries, subjecting it to greater risk than a fund that is more diversified. The Trust may invest in municipal and Treasury bond futures contracts and purchase and write options on futures. The Trust may invest in these instruments to hedge against the effects of changes in the value of portfolio securities due to anticipated changes in interest rates and/or market conditions, for duration management, or when the transactions are economically appropriate to the reduction of risk inherent in the management of the Trust and not for trading purposes. The use of futures contracts and options involves certain risks, which include (1) imperfect correlation between the price movement of the instruments and the underlying securities, (2) inability to close out positions due to different trading hours, or the temporary absence of a liquid market, for either the instrument or the underlying securities or (3) an inaccurate prediction by the Advisor of the future direction of interest rates. Any of these risks may involve amounts exceeding the amount recognized in the Trust's Statement of Assets and Liabilities at any given time. NOTE 5. RESULTS OF ANNUAL MEETING OF SHAREHOLDERS On May 24, 2000, the Annual Meeting of Shareholders of the Trust was held to elect four Trustees, to be voted by the Common and Preferred shareholders and to elect two Trustees, to be voted solely by Preferred shareholders, and to ratify the selection of PricewaterhouseCoopers LLP as independent accountants for the fiscal year ending November 30, 2000. On March 1, 2000, the record date for the Meeting, the Fund had outstanding 11,509,000 of Common shares and 2,400 of Preferred shares. The votes cast were as follows: AUTHORITY FOR WITHHELD ---- --------- To elect a Board of Trustees: Tom Bleasdale 10,452,182 195,394 William E. Mayer 10,456,447 191,129 James L. Moody 10,448,582 198,994 John J. Neuhauser 10,460,556 187,020 Salvatore Macera 111 6 Thomas E. Stitzel 111 6 To ratify the selection of PricewaterhouseCoopers LLP as independent accountants for the fiscal year ending November 30, 2000; FOR AGAINST ABSTAIN --- ------- ------- 10,442,754 50,126 154,696 - ----------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - ----------------------------------------------------------------------------------------------------------------------------- Selected per share data, total return, and supplemental data throughout each period are as follows (common shares unless otherwise noted):
YEAR ENDED PERIOD ENDED NOVEMBER 30, NOVEMBER 30(a) YEAR ENDED DECEMBER 31 ------------ ----------------------- ------------------------------------- 2000 1999 1998 1997 1996 1995 - ----------------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.310 $ 11.490 $ 11.430 $ 10.870 $ 11.050 $ 9.930 --------- --------- --------- --------- --------- -------- INCOME FROM INVESTMENT OPERATIONS Net investment income 0.809(g) 0.583 0.600 0.620 0.630 0.644 Net realized and unrealized gain (loss) 0.268 (1.119) 0.069 0.575 (0.193) 1.111 Preferred share commission and offering costs (0.017) (0.070) -- -- -- -- --------- --------- --------- --------- --------- -------- Total from Investment Operations 1.060 (0.606) 0.669 1.195 0.437 1.755 --------- --------- --------- --------- --------- -------- LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS From net investment income -- common shares (0.604) (0.524) (0.607) (0.635) (0.617) (0.635) From net investment income -- preferred shares (0.216) (0.050) -- -- -- -- In excess of net investment income -- -- (0.002) -- -- -- --------- --------- --------- --------- --------- -------- Total Distributions Declared to Shareholders (0.820) (0.574) (0.609) (0.635) (0.617) (0.635) --------- --------- --------- --------- --------- -------- NET ASSET VALUE, END OF PERIOD $ 10.550 $ 10.310 $ 11.490 $ 11.430 $ 10.870 $ 11.050 --------- --------- --------- --------- --------- -------- Market price per share $ 8.920 $ 9.062 $ 11.187 $ 10.560 $ 10.130 $ 9.880 --------- --------- --------- --------- --------- -------- Total return based on market value (b) 5.20% (14.64%)(e) 11.94% 10.76% 9.06% 13.87% --------- --------- --------- --------- --------- -------- RATIOS TO AVERAGE NET ASSETS Expenses (c) 1.31%(f) 1.03%(d)(f 0.77% 0.83% 0.88% 1.08% Net investment income (c) 5.80%(f) 5.26%(d)(f 5.24% 5.63% 5.80% 6.08% Portfolio turnover 23% 25%(e) 24% 21% 20% 37% Net assets at end of period (000) -- common shares $ 121,366 $ 118,660 $ 132,242 $ 131,503 $ 125,125 $ 127,118 (a) The Fund changed its fiscal year end from December 31 to November 30. (b) Total return at market value assuming all distributions reinvested and excluding brokerage commissions. (c) The benefits derived from custody credits and directed brokerage arrangements had no impact. (d) Annualized. (e) Not annualized. (f) Ratios reflect net assets available to common shares only, net investment income ratio also reflects reduction for dividend payments to preferred shareholders. (g) The per share net investment income amount does not reflect the period's reclassifications of differences between book and t ax basis net investment income.
- ------------------------------------------------------------------------------- REPORT OF INDEPENDENT ACCOUNTANTS - ------------------------------------------------------------------------------- TO THE SHAREHOLDERS AND THE TRUSTEES OF COLONIAL INVESTMENT GRADE MUNICIPAL TRUST In our opinion, the accompanying statement of assets and liabilities, including the investment portfolio, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Colonial Investment Grade Municipal Trust (the "Trust") at November 30, 2000, the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and the financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of portfolio positions at November 30, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Boston, Massachusetts January 11, 2001 - ------------------------------------------------------------------------------- DIVIDEND REINVESTMENT PLAN - ------------------------------------------------------------------------------- As a shareholder in the Trust you are eligible to participate in the Dividend Reinvestment Plan. The Trust generally distributes net investment income and net short-term capital gains monthly and net long-term capital gains annually. Under the Trust's Dividend Reinvestment Plan (the "Plan") all distributions are reinvested automatically in additional shares of the Trust, unless the shareholder elects~to receive cash or the shares are held in broker or nominee name and a reinvestment service is not provided by the broker or nominee. All cash distributions will be mailed by check directly to the record holder by the dividend paying agent. If the market price of Trust shares on the distribution payment date is equal to or greater than the net asset value, Plan~participants will be issued shares at the higher of net asset value or 95% of the market price. However, if the market price of shares is less than the net asset value, shares will be bought as soon as practicable (but no more than 30 days after the~distribution, except as may be required to comply with federal securities laws) in the open market for the accounts of Plan participants. If, during this purchase period, the market price surpasses the net asset value, the average per share price paid may exceed the net asset value of the shares, resulting in the acquisition of fewer shares than if the distribution had been in newly-issued shares. The aggregate market value of the shares may constitute taxable income to shareholders for federal income tax purposes. All Plan accounts receive monthly written confirmations of all transactions. Shares purchased under the Plan ordinarily are held in uncertificated form, although each participant has~the right to receive certificates for whole shares owned by the participant. Each shareholder's proxy includes shares purchased pursuant to the Plan. The automatic reinvestment of dis-~tributions does not relieve participants of any income tax payable on the distributions. There is no charge to Plan participants for reinvesting~distributions. Fees and expenses of the Plan other than brokerage charges are paid by the Trust. Participants bear a pro-rata share of brokerage charges incurred on open market purchases of shares issued under the Plan. A shareholder may elect not to participate or terminate his or her participation in the Plan by written notice to the Plan administrator. Such notice must be received by the Plan administrator before the dividend record date in order to be effective with respect to that dividend. The Plan may be amended or terminated on 30 days' written notice to the Plan participants. Upon withdrawal by any participant or any termination of the Plan, certificates for whole shares will be issued and cash payments will be made for any fractional shares. All correspondence concerning the Plan should be directed to BankBoston, NA, the Trust's dividend disbursing agent and administrator of the Plan, at P.O. Box 1681, Boston, Massachusetts 02105, Attention: Dividend Reinvestment Department. TRANSFER AGENT IMPORTANT INFORMATION ABOUT THIS REPORT The Transfer Agent for Colonial Investment Grade Municipal Trust is: BankBoston, NA 100 Federal Street Boston, MA 02110 1-800-730-6001 The Colonial Investment Grade Municipal Trust mails one shareholder report to each shareholder address. If you would like more than one report, please call 1-800-426-3750 and additional reports will be sent to you. This report has been prepared for shareholders of Colonial Investment Grade Municipal Trust. TRUSTEES DOUGLAS A. HACKER Executive Vice President and Chief Financial Officer of UAL, Inc. (formerly Senior Vice President and Chief Financial Officer of UAL, Inc.) JANET LANGFORD KELLY Executive Vice President-Corporate Development, General Counsel, and Secretary, Kellogg Company (formerly Senior Vice President, Secretary and General Counsel, Sara Lee Corporation) RICHARD W. LOWRY Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood Corporation) SALVATORE MACERA Private Investor (formerly Executive Vice President of Itek Corp. and President of Itek Optical & Electronic Industries, Inc.) WILLIAM E. MAYER Partner, Park Avenue Equity Partners (formerly Dean, College of Business and Management, University of Maryland; Dean, Simon Graduate School of Business, Universtiy of Rochester; Chairman and Chief Executive Officer, CS First Boston Merchant Bank; and President and Chief Executive Officer, The First Boston Corporation) CHARLES R. NELSON Van Voorhis Professor, Department of Economics, University of Washington; consultant on economic and statistical matters JOHN J. NEUHAUSER Academic Vice President and Dean of Faculties, Boston College (formerly Dean, Boston College School of Management) JOSEPH R. PALOMBO Chief Operations Officer, Mutual Funds, Liberty Financial Companies, Inc.; Executive Vice President and Director of Colonial Management Associates, Inc. and Stein Roe & Farnham Inc.; Executive Vice President and Chief Administrative Officer of Liberty Funds Group LLC (formerly Vice President of Liberty Mutual Funds, Stein Roe Mutual Funds and All-Star Funds, and Chief Operating Officer, Putnam Mutual Funds) THOMAS C. THEOBALD Managing Director, William Blair Capital Partners (formerly Chief Executive Officer and Chairman of the Board of Directors, Continental Bank Corporation) THOMAS E. STITZEL Business Consultant and Chartered Financial Analyst (formerly Professor of Finance, College of Business, Boise State University) ANNE-LEE VERVILLE Consultant (formerly General Manager, Global Education Industry, and President, Applications Solutions Division, IBM Corporation) - ------------------------------------------------------------------------------- COLONIAL INVESTMENT GRADE MUNICIPAL TRUST ANNUAL REPORT - ------------------------------------------------------------------------------- ------------- [logo] L I B E R T Y PRSRT STD ------------- U.S. POSTAGE F U N D S PAID Holliston, MA PERMIT NO. 20 ------------- ALL-STAR o COLONIAL o CRABBE HUSON o NEWPORT o STEIN ROW ADVISER Liberty Funds Distributor, Inc. (C)2001 One Financial Center, Boston, MA 02111-2621, 800-426-3750 www.libertyfunds.com 130-02/119E-1200 (1/01) 00/2364 -----END PRIVACY-ENHANCED MESSAGE-----