UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-05597
Morgan Stanley Municipal Income Opportunities Trust
(Exact name of registrant as specified in charter)
1221 Avenue of the Americas, New York, New York 10020
(Address of principal executive offices) (Zip code)
Ronald E. Robison
1221 Avenue of the Americas, New York, New York 10020
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-762-4000
Date of fiscal year end: May 31, 2006
Date of reporting period: November 30, 2005
Item 1 - Report to Shareholders
Welcome, Shareholder:
In this report, you'll learn about how your investment in Morgan Stanley
Municipal Income Opportunities Trust performed during the semiannual period. We
will provide an overview of the market conditions, and discuss some of the
factors that affected performance during the reporting period. In addition, this
report includes the Fund's financial statements and a list of Fund investments.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO PASS. THERE
IS NO ASSURANCE THAT THE FUND WILL ACHIEVE ITS INVESTMENT OBJECTIVE. THE FUND IS
SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY THAT MARKET VALUES OF
SECURITIES OWNED BY THE FUND WILL DECLINE AND, THEREFORE, THE VALUE OF THE
FUND'S SHARES MAY BE LESS THAN WHAT YOU PAID FOR THEM. ACCORDINGLY, YOU CAN LOSE
MONEY INVESTING IN THIS FUND.
FUND REPORT
For the six months ended November 30, 2005
MARKET CONDITIONS
Throughout the six-month period ended November 30, 2005, economic reports
continued to show moderate growth, sustained consumer spending, and reasonable
gains in employment. Although core inflation (which excludes food and energy)
remained benign, inflationary concerns mounted during the summer as heavy demand
and geopolitical events drove oil prices to protracted highs. September brought
heightened uncertainty in the wake of the unprecedented devastation caused by
Hurricanes Rita and Katrina. The immediate economic impact was a major
disruption of the nation's energy infrastructure. However, in the weeks that
followed, economists generally agreed that an initial slowdown would be followed
by a growth stimulus from reconstruction.
The Federal Open Market Committee (the Fed) continued the "measured" rate
tightening cycle it began in June of 2004, raising the federal funds target rate
four times during the six-month period. As a result, the rate moved from 3.00
percent to 4.00 percent, a four-year high. Yet, as the period closed, signals
from the Fed appeared to support investors' expectations of additional
increases.
Within this context, long-term municipal bond yields generally moved higher
during the period. Representative yields on 30-year AAA rated municipal bonds
increased from 4.25 percent at the start of the period to 4.55 percent at the
end of November. Yields of shorter maturity bonds, which are more directly
influenced by the Fed's actions, rose more significantly. Overall, the municipal
yield curve continued to flatten and the yield spread (or differential between
one-year rates and 30-year rates) narrowed. Investors' quest for yield favored
lower-quality bonds over high-grade issues and kept credit spreads relatively
tight.
Lower yields during most of the year led to a surge in refinancing activity, and
municipal issuance remained strong. New issue volume increased by 14 percent to
a record $371 billion during the first 11 months of the calendar year. As
issuers rushed to refinance higher cost debt, refundings increased to 32 percent
of total issuance, up from 25 percent in the first 11 months of 2004. Bonds
backed by insurance dominated issuance and increased their market penetration to
nearly 60 percent. Issuers in California, New York, Texas, Florida and
Pennsylvania accounted for more than 40 percent of the total underwriting volume
during the year-to-date period.
The municipal-to-Treasury yield ratio, which gauges performance between the two
markets, remained attractive for tax-exempt bonds. The 30-year ratio averaged 97
percent during the period and moved as high as 102 percent in June. (Higher
ratios indicate increased relative attractiveness of municipal bonds.) As a
result, institutional investors that normally focus on taxable bond sectors
supported municipals by "crossing over" to purchase tax-exempt bonds.
PERFORMANCE ANALYSIS
For the six-month period ended November 30, 2005, the net asset value (NAV) of
Morgan Stanley Municipal Income Opportunities Trust (OIA) decreased from $8.00
to $7.97 per share. Based on this change plus reinvestment of tax-free dividends
totaling $0.26 per
2
share, the Fund's total NAV return was 2.83 percent. OIA's value on the New York
Stock Exchange (NYSE) moved from $7.97 to $8.05 per share during the same
period. Based on this change plus reinvestment of dividends, the Fund's total
market return was 4.25 percent. On November 30, 2005, OIA's NYSE market price
was at a one percent premium to its NAV. Past performance is no guarantee of
future results.
Monthly dividends for the fourth quarter of 2005, declared in September, were
increased from $0.0425 to $0.0450 per share. The new dividend reflects the
current level of the Fund's net investment income. OIA's level of undistributed
net investment income was $0.135 per share on November 30, 2005, versus $0.124
per share six months earlier.(1)
The Fund invests primarily in higher yielding municipal bonds. Consistent with
this focus, over two-thirds of the Fund is invested in below investment grade or
non-rated issues. As of the end of the reporting period, the Fund included only
one nonperforming holding which represented less than one percent of net assets.
During the period, the Fund maintained a conservative strategy in anticipation
of continued Fed tightening and higher interest rates. The Fund's duration
stance helped total returns as rates rose during the period. The portfolio's
option-adjusted duration was 5.7 years. Reflecting a commitment to
diversification, the Fund's net assets of approximately $157 million were
invested among 10 long-term sectors and 91 credits.
OIA's procedure for reinvesting all dividends and distributions in common shares
is through purchases in the open market. This method helps support the market
value of the Fund's shares. In addition, we would like to remind you that the
Trustees have approved a procedure whereby the Fund may, when appropriate,
purchase shares in the open market or in privately negotiated transactions at a
price not above market value or net asset value, whichever is lower at the time
of purchase.
------------------------
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. INVESTMENT RETURN, NET ASSET VALUE AND COMMON SHARE MARKET PRICE WILL
FLUCTUATE AND FUND SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
There is no guarantee that any sectors mentioned will continue to perform well
or that securities in such sectors will be held by the Fund in the future.
(1) Income earned by certain securities in the portfolio may be subject to the
federal alternative minimum tax (AMT).
3
TOP FIVE SECTORS
Retirement & Life Care Facilities Revenue 18.3%
Tax Allocation Revenue 14.2
Hospital Revenue 13.8
IDR/PCR* 13.7
Nursing & Health Related Facilities Revenue 9.9
LONG-TERM CREDIT ANALYSIS
Aaa/AAA 1.2%
Aa/AA 6.3
A/A 3.4
Baa/BBB 18.8
Ba/BB or Less 8.9
N/R 61.4
* Industrial Development/Pollution Control Revenue
Data as of November 30, 2005. Subject to change daily. All percentages for top
five sectors are as a percentage of net assets and all percentages for long-term
credit analysis are as a percentage of total long-term investments. These data
are provided for informational purposes only and should not be deemed a
recommendation to buy or sell the securities mentioned. Morgan Stanley is a
full-service securities firm engaged in securities trading and brokerage
activities, investment banking, research and analysis, financing and financial
advisory services.
FOR MORE INFORMATION
ABOUT PORTFOLIO HOLDINGS
EACH MORGAN STANLEY FUND PROVIDES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS IN
ITS SEMIANNUAL AND ANNUAL REPORTS WITHIN 60 DAYS OF THE END OF THE FUND'S SECOND
AND FOURTH FISCAL QUARTERS BY FILING THE SCHEDULE ELECTRONICALLY WITH THE
SECURITIES AND EXCHANGE COMMISSION (SEC). THE SEMIANNUAL REPORTS ARE FILED ON
FORM N-CSRS AND THE ANNUAL REPORTS ARE FILED ON FORM N-CSR. MORGAN STANLEY ALSO
DELIVERS THE SEMIANNUAL AND ANNUAL REPORTS TO FUND SHAREHOLDERS AND MAKES THESE
REPORTS AVAILABLE ON ITS PUBLIC WEB SITE, WWW.MORGANSTANLEY.COM. EACH MORGAN
STANLEY FUND ALSO FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SEC
FOR THE FUND'S FIRST AND THIRD FISCAL QUARTERS ON FORM N-Q. MORGAN STANLEY DOES
NOT DELIVER THE REPORTS FOR THE FIRST AND THIRD FISCAL QUARTERS TO SHAREHOLDERS,
NOR ARE THE REPORTS POSTED TO THE MORGAN STANLEY PUBLIC WEB SITE. YOU MAY,
HOWEVER, OBTAIN THE FORM N-Q FILINGS (AS WELL AS THE FORM N-CSR AND N-CSRS
FILINGS) BY ACCESSING THE SEC'S WEB SITE, HTTP://WWW.SEC.GOV. YOU MAY ALSO
REVIEW AND COPY THEM AT THE SEC'S PUBLIC REFERENCE ROOM IN WASHINGTON, DC.
INFORMATION ON THE OPERATION OF THE SEC'S PUBLIC REFERENCE ROOM MAY BE OBTAINED
BY CALLING THE SEC AT (800) SEC-0330. YOU CAN ALSO REQUEST COPIES OF THESE
MATERIALS, UPON PAYMENT OF A DUPLICATING FEE, BY ELECTRONIC REQUEST AT THE SEC'S
E-MAIL ADDRESS (PUBLICINFO@SEC.GOV) OR BY WRITING THE PUBLIC REFERENCE SECTION
OF THE SEC, WASHINGTON, DC 20549-0102.
4
DISTRIBUTION BY MATURITY
(% of Long-Term Portfolio) As of November 30, 2005
WEIGHTED AVERAGE MATURITY: 20 YEARS(A)
0-5 8.00
6-10 14.00
11-15 10.00
16-20 9.00
21-25 20.00
26-30 32.00
30+ 7.00
(a) Where applicable maturities reflect mandatory tender, put and call dates.
Portfolio structure is subject to change.
Geographic Summary of Investments
Based on Market Value as a Percent of Total Investments
November 30, 2005
Alabama................ 0.7%
Arkansas............... 1.3
California............. 6.0
Colorado............... 2.5
Connecticut............ 1.3
District of Columbia... 0.2
Florida................ 10.1
Georgia................ 1.8
Hawaii................. 2.1
Illinois............... 3.1
Indiana................ 0.7
Iowa................... 2.5
Kansas................. 1.0
Kentucky............... 0.3
Louisiana.............. 0.6
Maryland............... 1.4
Massachusetts.......... 2.8
Michigan............... 2.3
Minnesota.............. 6.3
Missouri............... 5.8
Nevada................. 4.0
New Hampshire.......... 6.7
New Jersey............. 5.1
New York............... 9.6%
North Carolina......... 0.7
Ohio................... 0.2
Pennsylvania........... 6.1
South Carolina......... 2.3
Tennessee.............. 2.4
Texas.................. 3.5
Vermont................ 1.4
Virginia............... 5.4
Joint exemption*....... (0.2)
-----
Total.................. 100.0%
=====
---------------------
* Joint exemptions have been included in each geographic location.
5
CALL AND COST (BOOK) YIELD STRUCTURE
(Based on Long-Term Portfolio) As of November 30, 2005
YEARS BONDS CALLABLE -- WEIGHTED AVERAGE CALL PROTECTION: 5 YEARS
2006(a) 18
2007 3
2008 10
2009 13
2010 4
2011 9
2012 9
2013 11
2014 7
2015+ 16
COST (BOOK) YIELD(B) -- WEIGHTED AVERAGE BOOK YIELD: 7.2%
2006(a) 8.7
2007 5.9
2008 6.5
2009 6.5
2010 7
2011 7
2012 6.6
2013 6.8
2014 6.4
2015+ 7.6
(a) May include issues initially callable in previous years.
(b) Cost or "book" yield is the annual income earned on a portfolio investment
based on its original purchase price before the Fund's operating expenses.
For example, the Fund is earning a book yield of 8.7% on 18% of the
long-term portfolio that is callable in 2006.
Portfolio structure is subject to change.
6
Morgan Stanley Municipal Income Opportunities Trust
PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2005 (UNAUDITED)
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
---------------------------------------------------------------------------------------------------------
Tax-Exempt Municipal Bonds (94.3%)
Educational Facilities Revenue (4.3%)
$ 1,100 ABAG Finance Authority for Nonprofit Corporations,
California, National Center for International Schools
COPs.................................................... 7.50% 05/01/11 $ 1,136,113
500 San Diego County, California, The Burnham Institute
COPs.................................................... 6.25 09/01/29 525,865
1,000 Bellalago Educational Facilities Benefits District,
Florida, Bellalago Charter School Ser 2004 B............ 5.80 05/01/34 1,026,790
500 Illinois Finance Authority, Fullerton Village Student
Housing Ser 2004 A...................................... 5.125 06/01/35 500,000
500 Maryland Industrial Development Financing Authority, Our
Lady of Good Counsel High School Ser 2005 A............. 6.00 05/01/35 511,080
1,000 Westchester County Industrial Development Agency, New
York, Guiding Eyes for The Blind Inc Ser 2004........... 5.375 08/01/24 1,026,070
2,000 Chattanooga Health Educational & Housing Facilities Board,
Tennessee, Student Housing Refg Ser 2005 A.............. 5.125 10/01/35 1,969,800
------------
--------
6,695,718
6,600
------------
--------
Hospital Revenue (13.8%)
1,000 Colbert County - Northwest Health Care Authority, Alabama,
Helen Keller Hospital Ser 2003.......................... 5.75 06/01/27 1,021,220
2,000 Baxter County, Arkansas, Baxter County Regional Hospital
Impr & Refg Ser 1999 B.................................. 5.625 09/01/28 2,043,140
2,000 Hawaii Department of Budget & Finance, Kuakini Health 2002
Ser A................................................... 6.375 07/01/32 2,119,820
1,000 Indiana Health Facility Financing Authority, Riverview
Hospital Ser 2002....................................... 6.125 08/01/31 1,064,960
600 Gaylord Hospital Financing Authority, Michigan, Otsego
Memorial Hospital Ser 2004.............................. 6.50 01/01/37 616,428
1,500 St Paul Housing & Redevelopment Authority, Minnesota,
HealthEast Ser 2005..................................... 6.00 11/15/35 1,600,725
3,000 Henderson, Nevada, Catholic Health West 1998 Ser A........ 5.375 07/01/26 3,067,530
1,500 New Hampshire Higher Educational & Health Facilities
Authority, Littleton Hospital Assn Ser 1998 A........... 6.00 05/01/28 1,530,750
2,000 New Jersey Health Care Facilities Financing Authority,
Raritan Bay Medical Center Ser 1994..................... 7.25 07/01/27 2,053,800
955 Nassau County Industrial Development Agency, New York,
North Shore Health Ser B................................ 5.875 11/01/11 1,019,720
1,000 Monroe County Hospital Authority, Pennsylvania, Pocono
Medical Center Ser 2003................................. 6.00 01/01/43 1,058,160
2,000 South Carolina Jobs - Economic Development Authority,
Palmetto Health Alliance Refg Ser 2003 C................ 6.875 08/01/27 2,319,820
See Notes to Financial Statements
7
Morgan Stanley Municipal Income Opportunities Trust
PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2005 (UNAUDITED) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
---------------------------------------------------------------------------------------------------------
$ 1,000 Knox County Health, Educational & Housing Facility Board,
Tennessee, Baptist Health of East Tennessee Ser 2002.... 6.50% 04/15/31 $ 1,055,850
1,000 Decatur Hospital Authority, Texas, Wise Regional Health
Ser 2004 A.............................................. 7.125 09/01/34 1,077,300
------------
--------
21,649,223
20,555
------------
--------
Industrial Development/Pollution Control Revenue (13.7%)
360 Metropolitan Washington Airports Authority, District of
Columbia & Virginia, CaterAir International Corp Ser
1991 (AMT)++............................................ 10.125 09/01/11 360,475
2,000 Chicago, Illinois, Chicago O'Hare Int'l Airport/United
Airlines Inc Refg Ser 2001 C (a)........................ 6.30 05/01/16 294,860
1,500 Iowa Finance Authority, IPSCO Inc Ser 1997 (AMT).......... 6.00 06/01/27 1,523,535
New York City Industrial Development Agency, New York,
2,000 7 World Trade Center LLC Ser 2005 A..................... 6.50 03/01/35 2,110,880
2,000 American Airlines Inc Ser 2005 (AMT).................... 7.75 08/01/31 1,933,280
1,500 New York Counties Tobacco Trust IV, New York, Ser 2005
A....................................................... 5.00 06/01/45 1,371,780
380 Zanesville-Muskingum County Port Authority, Ohio, Anchor
Glass Container Corp Ser 1989 B (AMT)................... 10.25 12/01/08 380,182
2,000 Beaver County Industrial Development Authority,
Pennsylvania, Toledo Edison Co Collateralized Ser 1995
B....................................................... 7.75 05/01/20 2,047,780
2,920 Carbon County Industrial Development Authority,
Pennsylvania, Panther Creek Partners Refg 2000 Ser
(AMT)................................................... 6.65 05/01/10 3,128,605
1,000 Pennsylvania Economic Development Financing Authority,
Reliant Energy Inc Ser 2001 A (AMT)..................... 6.75 12/01/36 1,063,480
1,225 Lexington County, South Carolina, Ellett Brothers Inc Refg
Ser 1988................................................ 7.50 09/01/08 1,209,786
1,000 Brazos River Authority, Texas, Texas Utilities Electric
Co. Electric Refg Ser 1999 A (AMT)...................... 7.70 04/01/33 1,172,120
1,000 Chesterfield County Industrial Development Authority,
Virginia, Virginia Electric & Power Co Ser 1985......... 5.50 10/01/09 1,028,070
3,700 Pittsylvania County Industrial Development Authority,
Virginia, Multi-Trade Pittsylvania County Ser 1994 A
(AMT)................................................... 7.45 01/01/09 3,795,312
------------
--------
21,420,145
22,585
------------
--------
Mortgage Revenue - Multi-Family (7.2%)
Washington County Housing & Redevelopment Authority,
Minnesota,
3,885 Courtly Park Ser 1989 A................................. 9.75 06/15/19 3,023,929
1,165 Courtly Park Ser 1989 A (AMT)........................... 10.25 06/15/19 907,057
24,080 Courtly Park Ser 1989 B................................. 0.00 06/15/19 467,633
8,678 Courtly Park Ser 1989 B (AMT)........................... 0.00 06/15/19 168,524
White Bear Lake, Minnesota,
3,715 White Bear Woods Apts Phase II Refg 1989 Ser A.......... 9.75 06/15/19 3,200,287
19,771 White Bear Woods Apts Phase II Refg 1989 Ser B.......... 0.00 06/15/19 383,961
See Notes to Financial Statements
8
Morgan Stanley Municipal Income Opportunities Trust
PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2005 (UNAUDITED) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
---------------------------------------------------------------------------------------------------------
$ 3,000 Brookhaven Industrial Development Agency, New York,
Woodcrest Estates Ser 1998 A (AMT)...................... 6.375% 12/01/37 $ 3,059,670
------------
--------
11,211,061
64,294
------------
--------
Mortgage Revenue - Single Family (6.0%)
Colorado Housing & Finance Authority,
115 1996 Ser B (AMT)........................................ 7.65 11/01/26 117,514
575 Ser 1998 D-2 (AMT)...................................... 6.35 11/01/29 581,245
22,400 New Hampshire Housing Finance Authority, Residential 1983
Ser B................................................... 0.00 01/01/15 8,789,983
------------
--------
9,488,742
23,090
------------
--------
Nursing & Health Related Facilities Revenue (9.9%)
Escambia County, Florida,
4,885 Pensacola Care Development Centers Ser 1989............. 10.25 07/01/11 4,899,947
1,125 Pensacola Care Development Centers Ser 1989 A........... 10.25 07/01/11 1,128,443
1,000 Orange County Health Facilities Authority, Florida,
Westminister Community Care Services Inc Ser 1999....... 6.75 04/01/34 1,029,860
1,000 Pinellas County Health Facilities Authority, Florida, Oaks
of Clearwater Ser 2004.................................. 6.25 06/01/34 1,050,870
1,925 Iowa Health Facilities Development Financing Authority,
Care Initiatives Ser 1996............................... 9.25 07/01/25 2,343,033
515 Kentucky Economic Development Financing Authority, AHF/
Kentucky-Iowa Inc Ser 2003.............................. 6.50# 01/01/29 517,019
1,725 Massachusetts Development Finance Agency, New England
Center for Children Ser 1998............................ 5.875 11/01/18 1,754,601
1,000 Massachusetts Health & Educational Facilities Authority,
The Learning Center for Deaf Children Ser C............. 6.125 07/01/29 1,008,390
1,000 St Louis County Industrial Development Authority,
Missouri, Pediatric Rehabilitation Center Ser 2003 A.... 6.625 11/15/35 1,029,820
780 Mount Vernon Industrial Development Agency, New York,
Meadowview at the Wartburg Ser 1999..................... 6.00 06/01/09 797,246
------------
--------
15,559,229
14,955
------------
--------
Recreational Facilities Revenue (4.6%)
2,000 Sacramento Financing Authority, California, Convention
Center Hotel 1999 Ser A................................. 6.25 01/01/30 2,089,740
1,000 San Diego County, California, San Diego Natural History
Museum COPs............................................. 5.70 02/01/28 970,300
Mashantucket (Western) Pequot Tribe, Connecticut,
1,010 Special 1996 Ser A (b).................................. 6.40 09/01/11 1,048,077
1,000 Special 1997 Ser B (b).................................. 5.75 09/01/27 1,027,180
See Notes to Financial Statements
9
Morgan Stanley Municipal Income Opportunities Trust
PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2005 (UNAUDITED) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
---------------------------------------------------------------------------------------------------------
$ 2,000 Austin Convention Enterprises Inc, Texas, Convention
Center Hotel Ser 2000 A................................. 6.70% 01/01/32 $ 2,112,800
------------
--------
7,248,097
7,010
------------
--------
Retirement & Life Care Facilities Revenue (18.3%)
500 Orange County Health Facilities Authority, Florida,
Orlando Lutheran Towers Inc Ser 2005.................... 5.70 07/01/26 500,595
1,000 St Johns County Industrial Development Authority, Florida,
Glenmoor Ser 1999 A..................................... 8.00 01/01/30 1,076,600
1,000 Illinois Finance Authority, Landing at Plymouth Ser 2005 A
(WI).................................................... 6.00 05/15/37 994,340
1,000 Hawaii Department of Budget & Finance, Kahala Nui 2003 Ser
A....................................................... 8.00 11/15/33 1,156,170
1,500 Lenexa, Kansas, Lakeview Village - Southridge Ser 2002
C....................................................... 6.875 05/15/32 1,610,385
1,500 Maryland Health & Higher Educational Facilities Authority,
Mercy Ridge 2003 Ser A.................................. 6.00 04/01/35 1,580,220
1,500 Massachusetts Development Finance Agency, Loomis
Communities Ser 1999 A.................................. 5.75 07/01/23 1,503,810
1,500 Kansas City Industrial Development Agency, Missouri,
Bishop Spencer 2004 Ser A............................... 6.50 01/01/35 1,573,245
New Jersey Economic Development Authority,
1,000 Cedar Crest Village Inc Ser 2001 A...................... 7.25 11/15/31 1,081,770
1,000 Franciscan Oaks Ser 1997................................ 5.70 10/01/17 1,014,850
730 Lions Gate Ser 2005 A................................... 5.875 01/01/37 742,958
1,000 The Presbyterian Home at Montgomery Ser 2001 A.......... 6.375 11/01/31 1,032,910
2,000 United Methodist Homes of New Jersey Ser 1998........... 5.125 07/01/25 1,981,620
3,250 Suffolk County Industrial Development Agency, New York,
Jefferson's Ferry Ser 1999.............................. 7.25 11/01/28 3,512,145
1,000 North Carolina Medical Care Commission, The Given Estate
Ser 2003 A.............................................. 6.50 07/01/32 1,069,760
1,000 Chester County Health & Education Facilities Authority,
Pennsylvania, Jenner's Pond Inc Ser 2002................ 7.625 07/01/34 1,134,710
1,000 Montgomery County Industry Development Authority,
Pennsylvania, Whitemarsh Community Ser 2005............. 6.25 02/01/35 1,042,380
750 Shelby County Health, Educational & Housing Facilities
Board, Tennessee, Village at Germantown Ser 2003 A...... 7.25 12/01/34 765,840
1,000 Houston Health Facilities Authority, Texas, Buckingham
Senior Living Community Ser 2004 A...................... 7.125 02/15/34 1,093,340
2,100 Vermont Economic Development Authority, Wake Robin Corp
Ser 1999 A.............................................. 6.75 03/01/29 2,199,414
1,000 Peninsula Ports Authority of Virginia, Virginia Baptist
Homes Ser 2003 A........................................ 7.375 12/01/32 1,109,220
See Notes to Financial Statements
10
Morgan Stanley Municipal Income Opportunities Trust
PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2005 (UNAUDITED) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
---------------------------------------------------------------------------------------------------------
$ 1,000 Virginia Beach Development Authority, Virginia,
Westminster-Canterbury Refg Ser 2005 A.................. 5.25% 11/01/26 $ 1,010,360
------------
--------
28,786,642
27,330
------------
--------
Tax Allocation Revenue (14.2%)
500 Carlsbad Assessment District #2002-2001, California,
Poinsettia Lane East Ser 2005 A......................... 5.20 09/02/35 499,430
1,000 San Marcos Community Facilities District #2002-01,
California, University Commons Ser 2004................. 5.95 09/01/35 1,042,450
1,000 Santa Ana Unified School District Community Facilities
District #2004-1, California, Central Park Ser 2005..... 5.10 09/01/35 980,260
2,000 Elk Valley Public Improvement Corporation, Colorado, Ser
2001 A.................................................. 7.35 09/01/31 2,123,180
1,000 Southlands Metropolitan District #1, Colorado, Ser 2004... 7.125 12/01/34 1,088,690
2,000 Beacon Lakes, Community Development District, Florida, Ser
2003 A.................................................. 6.90 05/01/35 2,107,360
1,000 Midtown Miami Community Development District, Florida, Ser
2004 A.................................................. 6.25 05/01/37 1,060,660
2,000 Atlanta, Georgia, Eastside Ser 2005 B..................... 5.60 01/01/30 2,051,640
2,000 Chicago, Illinois, Lake Shore East, Ser 2002.............. 6.75 12/01/32 2,167,760
725 Lincolnshire, Illinois, Service Area #1 Sedgebrook Ser
2004.................................................... 6.25 03/01/34 769,530
2,000 Des Peres, Missouri, West County Center Ser 2002.......... 5.75 04/15/20 2,046,380
4,000 Fenton, Missouri, Gravois Bluffs Redevelopment Ser 2001 A
Refg.................................................... 7.00 10/01/21 4,286,559
1,980 Las Vegas District #808, Nevada, Summerlin Ser 2001....... 6.75 06/01/21 2,062,883
------------
--------
22,286,782
21,205
------------
--------
Transportation Facilities Revenue (2.3%)
1,650 Mid-Bay Bridge Authority, Florida, Sr Lien Crossover Refg
Ser 1993 A (Ambac)...................................... 5.85 10/01/13 1,772,380
750 Augusta, Georgia, Airport Passenger Facility Charge Ser
2005 A.................................................. 5.15 01/01/35 754,838
1,000 Nevada Department of Business & Industry, Las Vegas
Monorail 2nd Tier Ser 2000.............................. 7.375 01/01/40 1,044,450
------------
--------
3,571,668
3,400
------------
--------
211,024 Total Tax-Exempt Municipal Bonds (Cost $156,639,931)......................... 147,917,307
------------
--------
Short-Term Tax-Exempt Municipal Obligations (4.5%)
2,100 Orange County Sanitation District, California, Ser 2000 B
COPs (Demand 12/01/05).................................. 3.00* 08/01/30 2,100,000
1,000 Westside Habilitation Center, Louisiana, Intermediate Care
Facility for the Mentally Retarded Refg Ser 1993 (Called
for Redemption 12/29/05)................................ 8.375 10/01/13 1,004,370
2,900 Michigan State University, Ser 2002 A (Demand 12/01/05)... 1.00* 08/15/32 2,900,000
See Notes to Financial Statements
11
Morgan Stanley Municipal Income Opportunities Trust
PORTFOLIO OF INVESTMENTS - NOVEMBER 30, 2005 (UNAUDITED) continued
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
---------------------------------------------------------------------------------------------------------
$ 1,100 Roanoke Industrial Development Authority, Virginia,
Carilion Health Ser 1997 A (Demand 12/01/05)............ 1.20*% 07/01/27 $ 1,100,000
------------
--------
7,100 Total Short-Term Tax-Exempt Municipal Obligations (Cost $7,092,821).......... 7,104,370
------------
--------
$218,124 Total Investments (Cost $163,732,752) (c)(d)......................... 98.8% 155,021,677
========
Other Assets in Excess of Liabilities................................ 1.2 1,849,285
----- ------------
Net Assets........................................................... 100.0% $156,870,962
===== ============
---------------------
AMT Alternative Minimum Tax.
COPs Certificates of Participation.
WI Security purchased on a when-issued basis.
* Current coupon of variable rate demand obligation.
++ Joint exemption in locations shown.
# Currently a 6.50% coupon; increases to 8.00% on January 1,
2009.
(a) Bond in default; Issuer in bankruptcy; non-income producing
security.
(b) Resale is restricted to qualified institutional investors.
(c) Securities have been designated as collateral in an amount
equal to $995,407 in connection with security purchased on a
when-issued basis.
(d) The aggregate cost for federal income tax purposes is
$163,630,292. The aggregate gross unrealized appreciation is
$7,028,973 and the aggregate gross unrealized depreciation
is $15,637,588, resulting in net unrealized depreciation of
$8,608,615.
Bond Insurance:
---------------
Ambac Ambac Assurance Corporation.
See Notes to Financial Statements
12
Morgan Stanley Municipal Income Opportunities Trust
FINANCIAL STATEMENTS (UNAUDITED)
Statement of Assets and Liabilities
November 30, 2005
Assets:
Investments in securities, at value
(cost $163,732,752)............... $155,021,677
Cash................................ 24,190
Receivable for:
Interest........................ 2,840,011
Investments sold................ 174,372
Prepaid expenses and other assets... 11,082
------------
Total Assets.................... 158,071,332
------------
Liabilities:
Payable for:
Investments purchased........... 995,507
Investment advisory fee......... 70,919
Transfer agent fee.............. 32,222
Administration fee.............. 11,347
Accrued expenses and other
payables.......................... 90,375
------------
Total Liabilities............... 1,200,370
------------
Net Assets...................... $156,870,962
============
Composition of Net Assets:
Paid-in-capital..................... $174,399,443
Net unrealized depreciation......... (8,711,075)
Accumulated undistributed net
investment income................. 2,657,321
Accumulated net realized loss....... (11,474,727)
------------
Net Assets...................... $156,870,962
============
Net Asset Value Per Share,
19,685,043 shares outstanding
(unlimited shares authorized $.01
par value).......................... $7.97
============
Statement of Operations
For the six months ended November 30, 2005
Net Investment Income:
Interest Income....................... $ 5,889,474
-----------
Expenses
Investment advisory fee............... 395,613
Administration fee.................... 63,298
Transfer agent fees and expenses...... 35,102
Professional fees..................... 31,545
Shareholder reports and notices....... 17,598
Registration fees..................... 5,894
Trustees' fees and expenses........... 4,514
Custodian fees........................ 3,858
Other................................. 9,959
-----------
Total Expenses.................... 567,381
-----------
Less: expense offset.................. (3,788)
-----------
Net Expenses...................... 563,593
-----------
Net Investment Income............. 5,325,881
-----------
Net Realized and Unrealized Gain
(Loss):
Net Realized Gain on:
Investments........................... 640,600
Futures contracts..................... 41,078
-----------
Net Realized Gain................. 681,678
-----------
Net Change in Unrealized
Depreciation........................ (1,546,003)
-----------
Net Loss.......................... (864,325)
-----------
Net Increase.......................... $ 4,461,556
===========
See Notes to Financial Statements
13
Morgan Stanley Municipal Income Opportunities Trust
FINANCIAL STATEMENTS continued
Statement of Changes in Net Assets
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
NOVEMBER 30, 2005 MAY 31, 2005
----------------- ------------
(unaudited)
Increase (Decrease) in Net Assets:
Operations:
Net investment income....................................... $ 5,325,881 $ 10,610,238
Net realized gain (loss).................................... 681,678 (1,978,394)
Net change in unrealized depreciation....................... (1,546,003) 7,868,814
------------ ------------
Net Increase............................................ 4,461,556 16,500,658
Dividends to shareholders from net investment income........ (5,120,171) (10,055,170)
Decrease from transactions in shares of beneficial
interest.................................................. (64,711) (5,116,505)
------------ ------------
Net Increase (Decrease)................................. (723,326) 1,328,983
Net Assets:
Beginning of period......................................... 157,594,288 156,265,305
------------ ------------
End of Period
(Including accumulated undistributed net investment income
of $2,657,321 and $2,451,611, respectively)................. $156,870,962 $157,594,288
============ ============
See Notes to Financial Statements
14
Morgan Stanley Municipal Income Opportunities Trust
NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2005 (UNAUDITED)
1. Organization and Accounting Policies
Morgan Stanley Municipal Income Opportunities Trust (the "Fund") is registered
under the Investment Company Act of 1940, as amended, as a diversified,
closed-end management investment company. The Fund's investment objective is to
provide a high level of current income which is exempt from federal income tax.
The Fund was organized as a Massachusetts business trust on June 22, 1988 and
commenced operations on September 19, 1988.
The following is a summary of significant accounting policies:
A. Valuation of Investments -- (1) portfolio securities are valued by an outside
independent pricing service approved by the Trustees. The pricing service uses
both a computerized grid matrix of tax-exempt securities and evaluations by its
staff, in each case based on information concerning market transactions and
quotations from dealers which reflect the mean between the last reported bid and
asked price. The portfolio securities are thus valued by reference to a
combination of transactions and quotations for the same or other securities
believed to be comparable in quality, coupon, maturity, type of issue, call
provisions, trading characteristics and other features deemed to be relevant.
The Trustees believe that timely and reliable market quotations are generally
not readily available for purposes of valuing tax-exempt securities and that the
valuations supplied by the pricing service are more likely to approximate the
fair value of such securities; (2) futures are valued at the latest sale price
on the commodities exchange on which they trade unless it is determined that
such price does not reflect their market value, in which case they will be
valued at their fair value as determined in good faith under procedures
established by and under the supervision of the Trustees; and (3) short-term
debt securities having a maturity date of more than sixty days at time of
purchase are valued on a mark-to-market basis until sixty days prior to maturity
and thereafter at amortized cost based on their value on the 61st day.
Short-term debt securities having a maturity date of sixty days or less at the
time of purchase are valued at amortized cost.
B. Accounting for Investments -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Discounts are accreted and premiums are amortized over the life of the
respective securities. Interest income is accrued daily except where collection
is not expected.
C. Federal Income Tax Policy -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable and nontaxable
income to its shareholders. Accordingly, no federal income tax provision is
required.
15
Morgan Stanley Municipal Income Opportunities Trust
NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2005 (UNAUDITED) continued
D. Dividends and Distributions to Shareholders -- Dividends and distributions to
shareholders are recorded on the ex-dividend date.
E. Futures Contracts -- A futures contract is an agreement between two parties
to buy and sell financial instruments or contracts based on financial indices at
a set price on a future date. Upon entering into such a contract, the Fund is
required to pledge to the broker cash, U.S. Government securities or other
liquid portfolio securities equal to the minimum initial margin requirements of
the applicable futures exchange. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in the value of the contract. Such receipts or payments known as
variation margin are recorded by the Fund as unrealized gains and losses. Upon
closing of the contract, the Fund realizes a gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed.
F. Use of Estimates -- The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures.
Actual results could differ from those estimates.
2. Investment Advisory/Administration Agreements
Pursuant to an Investment Advisory Agreement with Morgan Stanley Investment
Advisors Inc. (the "Investment Adviser"), the Fund pays an advisory fee,
calculated weekly and payable monthly, by applying the annual rate of 0.50% to
the Fund's weekly net assets.
Pursuant to an Administration Agreement with Morgan Stanley Services Company
Inc. (the "Administrator"), an affiliate of the Investment Adviser, the Fund
pays an administration fee, calculated weekly and payable monthly, by applying
the annual rate of 0.08% to the Fund's weekly net assets.
3. Security Transactions and Transactions with Affiliates
The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended November 30, 2005 aggregated
$14,878,357 and $19,461,506, respectively. Included in the aforementioned
transactions are purchases of $1,995,320 with other Morgan Stanley funds.
Morgan Stanley Trust, an affiliate of the Investment Adviser and Administrator,
is the Fund's transfer agent.
The Fund has an unfunded noncontributory defined benefit pension plan covering
certain independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time
16
Morgan Stanley Municipal Income Opportunities Trust
NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2005 (UNAUDITED) continued
of retirement. Benefits under this plan are based on factors which include years
of service and compensation. The Trustees voted to close the plan to new
participants and eliminate the future benefits growth due to increases to
compensation after July 31, 2003. Aggregate pension costs for the six months
ended November 30, 2005 included in Trustees' fees and expenses in the Statement
of Operations amounted to $3,757. At November 30, 2005, the Fund had an accrued
pension liability of $63,333 which is included in accrued expenses in the
Statement of Assets and Liabilities.
The Fund has an unfunded Deferred Compensation Plan (the "Compensation Plan")
which allows each independent Trustee to defer payment of all, or a portion, of
the fees he receives for serving on the Board of Trustees. Each eligible Trustee
generally may elect to have the deferred amounts credited with a return equal to
the total return on one or more of the Morgan Stanley funds that are offered as
investment options under the Compensation Plan. Appreciation/depreciation and
distributions received from these investments are recorded with an offsetting
increase/decrease in the deferred compensation obligation and do not affect the
net asset value of the Fund.
4. Shares of Beneficial Interest
Transactions in shares of beneficial interest were as follows:
CAPITAL
PAID IN
PAR VALUE EXCESS OF
SHARES OF SHARES PAR VALUE
---------- --------- ------------
Balance, May 31, 2004....................................... 20,379,272 $203,792 $179,376,867
Treasury shares purchased and retired (weighted average
discount 4.79%*).......................................... (686,029) (6,860) (5,109,645)
---------- -------- ------------
Balance, May 31, 2005....................................... 19,693,243 $196,932 $174,267,222
Treasury shares purchased and retired (weighted average
discount 0.54%)*.......................................... (8,200) (82) (64,629)
---------- -------- ------------
Balance November 30, 2005................................... 19,685,043 $196,850 $174,202,593
========== ======== ============
---------------------
* The Trustees have voted to retire the shares purchased.
5. Dividends
The Fund declared the following dividends from net investment income:
DECLARATION AMOUNT RECORD PAYABLE
DATE PER SHARE DATE DATE
------------------ --------- ---------------- -----------------
September 27,
2005............ $0.045 December 9, 2005 December 23, 2005
December 27,
2005............ $0.045 January 6, 2006 January 20, 2006
December 27,
2005............ $0.045 February 3, 2006 February 17, 2006
December 27,
2005............ $0.045 March 3, 2006 March 17, 2006
17
Morgan Stanley Municipal Income Opportunities Trust
NOTES TO FINANCIAL STATEMENTS - NOVEMBER 30, 2005 (UNAUDITED) continued
6. Expense Offset
The expense offset represents a reduction of the custodian fees for earnings on
cash balances maintained by the Fund.
7. Risks Relating to Certain Financial Instruments
The Fund may invest a portion of its assets in residual interest bonds, which
are inverse floating rate municipal obligations. The prices of these securities
are subject to greater market fluctuations during periods of changing prevailing
interest rates than are comparable fixed rate obligations.
To hedge against adverse interest rate changes, the Fund may invest in financial
futures contracts or municipal bond index futures contracts ("futures
contracts").
These futures contracts involve elements of market risk in excess of the amount
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the value of the underlying securities. Risks may also
arise upon entering into these contracts from the potential inability of the
counterparties to meet the terms of their contracts.
8. Federal Income Tax Status
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for tax purposes are reported as distributions of paid-in-capital.
As of May 31, 2005, the Fund had a net capital loss carryforward of $12,156,403
of which $700,037 will expire on May 31, 2006, $87,017 will expire on May 31,
2008, $4,628,820 will expire on May 31, 2009, $1,864,080 will expire on May 31,
2011 and $4,876,449 will expire on May 31, 2013 to offset future capital gains
to the extent provided by regulations.
As of May 31, 2005, the Fund had temporary book/tax differences primarily
attributable to book amortization of discounts on debt securities and interest
on bonds in default.
18
Morgan Stanley Municipal Income Opportunities Trust
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
FOR THE SIX FOR THE YEAR ENDED MAY 31
MONTHS ENDED ----------------------------------------------------
NOVEMBER 30, 2005 2005 2004 2003 2002 2001
----------------- -------- -------- -------- -------- --------
(unaudited)
Selected Per Share Data:
Net asset value, beginning of the
period................................ $ 8.00 $7.67 $7.91 $7.88 $8.03 $7.79
------ ----- ----- ----- ----- -----
Income (loss) from investment
operations:
Net investment income*............. 0.27 0.53 0.52 0.54 0.55 0.55
Net realized and unrealized gain
(loss)............................. (0.04) 0.29 (0.26) 0.04 (0.13) 0.28
------ ----- ----- ----- ----- -----
Total income from investment
operations............................ 0.23 0.82 0.26 0.58 0.42 0.83
------ ----- ----- ----- ----- -----
Less dividends from net investment
income................................ (0.26) (0.50) (0.50) (0.55) (0.57) (0.59)
------ ----- ----- ----- ----- -----
Anti-dilutive effect of acquiring
treasury shares*...................... -- 0.01 -- -- -- --
------ ----- ----- ----- ----- -----
Net asset value, end of period......... $ 7.97 $8.00 $7.67 $7.91 $7.88 $8.03
====== ===== ===== ===== ===== =====
Market value, end of period............ $ 8.05 $7.97 $7.09 $7.76 $8.08 $8.53
====== ===== ===== ===== ===== =====
Total Return+.......................... 4.25%(1) 20.12% (2.34)% 3.09% 1.42% 10.78%
Ratios to Average Net Assets:
Total expenses (before expense
offset)............................... 0.72%(2) 0.83% 0.94% 0.93%(3) 0.92% 0.93%
Net investment income.................. 6.73%(2) 6.76% 6.63% 6.85% 6.92% 6.95%
Supplemental Data:
Net assets, end of period, in
thousands............................. $156,871 $157,594 $156,265 $164,208 $165,019 $168,062
Portfolio turnover rate................ 10%(1) 12% 10% 8% 7% 16%
---------------------
* The per share amounts were computed using an average number
of shares outstanding during the period.
+ Total return is based upon the current market value on the
last day of each period reported. Dividends are assumed to
be reinvested at the prices obtained under the Fund's
dividend reinvestment plan.
(1) Not annualized.
(2) Annualized.
(3) Does not reflect the effect of expense offset of 0.01%.
19
See Notes to Financial Statements
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
James F. Higgins
Dr. Manuel H. Johnson
Joseph J. Kearns
Michael E. Nugent
Fergus Reid
OFFICERS
Charles A. Fiumefreddo
Chairman of the Board
Ronald E. Robison
President and Principal Executive Officer
Joseph J. McAlinden
Vice President
Barry Fink
Vice President
Amy R. Doberman
Vice President
Carsten Otto
Chief Compliance Officer
Stefanie V. Chang
Vice President
Francis J. Smith
Treasurer and Chief Financial Officer
Thomas F. Caloia
Vice President
Mary E. Mullin
Secretary
TRANSFER AGENT
Morgan Stanley Trust
Harborside Financial Center, Plaza Two
Jersey City, New Jersey 07311
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
INVESTMENT ADVISER
Morgan Stanley Investment Advisors Inc.
1221 Avenue of the Americas
New York, New York 10020
The financial statements included herein have been taken from the records of the
Fund without examination by the independent auditors and accordingly they do not
express an opinion thereon.
Investments and services offered through Morgan Stanley DW Inc., member SIPC.
(c) 2005 Morgan Stanley
[MORGAN STANLEY LOGO]
MORGAN STANLEY FUNDS
Morgan Stanley
Municipal Income
Opportunities Trust
Semiannual Report
November 30, 2005
[MORGAN STANLEY LOGO]
38532RPT-RA06-00007P-Y11/05
Item 2. Code of Ethics.
Not applicable for semiannual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semiannual reports.
Item 4. Principal Accountant Fees and Services
Not applicable for semiannual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semiannual reports.
Item 6.
Refer to Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable for semiannual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Applicable only to reports covering periods ending on or after December 31,
2005.
Item 9. Closed-End Fund Repurchases
REGISTRANT PURCHASE OF EQUITY SECURITIES
----------------------------------------
(d) Maximum Number
(or Approximate
(c) Total Number of Dollar Value) of
Shares (or Units) Shares (or Units)
Purchased as Part that May Yet Be
(a) Total Number of (b) Average Price of Publicly Purchased Under
Shares (or Units) Paid per Share (or Announced Plans or the Plans or
Period Purchased Unit) Programs Programs
------------------ ------------------- ------------------ -------------------- -------------------
June 1, 2005-
June 30, 2005 - - N/A N/A
July 1, 2005-
July 31, 2005 - - N/A N/A
August 1, 2005-
August 31, 2005 - - N/A N/A
September 1, 2005-
September 30, 2005 - - N/A N/A
October 1, 2005-
October 31, 2005 - - N/A N/A
November 1, 2005-
November 30, 2005 8,200 $7.8905 N/A N/A
----- ------- --- ---
Total 8,200 $7.8905 N/A N/A
----- ------- --- ---
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures
(a) The Fund's principal executive officer and principal financial officer have
concluded that the Fund's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Fund in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
2
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits
(a) Code of Ethics - Not applicable for semiannual reports.
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant are attached hereto as part of EX-99.CERT.
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
Morgan Stanley Municipal Income Opportunities Trust
/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
January 19, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
January 19, 2006
/s/ Francis Smith
Francis Smith
Principal Financial Officer
January 19, 2006
4