nvq
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-06591
Morgan Stanley Quality Municipal Income Trust
(Exact name of registrant as specified in charter)
     
522 Fifth Avenue, New York, New York
(Address of principal executive offices)
  10036
(Zip code)
Randy Takian
522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)
Registrant’s telephone number, including area code: 212-296-6963
Date of fiscal year end: October 31, 2009
Date of reporting period: July 31, 2009
 
 

 


 

Item 1. Schedule of Investments.
The Trust’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:
Morgan Stanley Quality Municipal Income Trust
Portfolio of Investments July 31, 2009 (unaudited)
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
       
Tax-Exempt Municipal Bonds (173.4%)
                       
       
Alaska (0.8%)
                       
$ 4,000    
Northern Tobacco Securitization Corporation, Asset Backed Ser 2006 A
    5.00       06/01/46     $ 2,188,280  
       
 
                     
       
 
                       
       
Arizona (6.1%)
                       
  2,000    
Arizona Transportation Board, Highway Refg Ser 2002 A
    5.25       07/01/19       2,179,360  
  650    
Maricopa County, Pollution Control Corp., 2009 Ser A
    6.00       05/01/29       661,375  
  3,000    
Phoenix Civic Improvement Corporation, Airport Ser 2002 B (AMT) (FGIC Insd)
    5.25       07/01/32       2,700,930  
  3,800    
Phoenix Civic Improvement Corporation, Jr Lien Water Ser 2002 (FGIC Insd)
    5.00       07/01/26       3,816,188  
  6,000    
Salt River Project Agricultural Improvement & Power District, 2002 Ser B (a)
    5.00       01/01/31       6,153,699  
  2,000    
Surprise Municipal Property Corporation Ser 2007
    4.90       04/01/32       1,522,240  
       
 
                     
       
 
                    17,033,792  
       
 
                     
       
California (27.2%)
                       
  1,575    
Alhambra Unified School District 2009 Ser B (g)
    0.00       08/01/35       283,169  
  2,545    
Alhambra Unified School District 2009 Ser B (g)
    0.00       08/01/36       430,589  
  2,000    
California Health Facilities Financing Authority, Cedars-Sinai Medical Center Ser 2005
    5.00       11/15/34       1,745,920  
  2,000    
California Health Facilities Financing Authority, Kaiser Permanente Ser 2006 A
    5.25       04/01/39       1,763,060  
  5,000    
California Infrastructure & Economic Development Bank, Bay Area Toll Bridges First Lien Ser 2003 (a)
    5.00       01/01/28 (b)     5,692,580  
  3,000    
California Infrastructure & Economic Development Bank, The Scripps Research Institute Ser 2005 A
    5.00       07/01/29       3,005,970  
  6,000    
California Pollution Control Financing Authority, Keller Canyon Landfill Co/Browning-Ferris Industries Inc Ser 1992 (AMT)
    6.875       11/01/27       6,002,160  
  5,000    
California State Economic Recovery Ser 2004 A
    5.00       07/01/16       5,128,850  
  4,000    
California Statewide Communities Development, Baptist University Ser 2007 A
    5.40       11/01/27       2,844,080  
  5,000    
California Statewide Communities Development, John Muir Health Ser 2006 A
    5.00       08/15/32       4,335,150  
  5,000    
California, Various Purpose Dtd 05/01/03
    5.25       02/01/19       5,199,100  
  4,685    
Dry Creek Joint Elementary School District Election 2008 E Ser 2009 (g)
    0.00       08/01/40       568,103  
  4,535    
Dry Creek Joint Elementary School District Election 2008 E Ser 2009 (g)
    0.00       08/01/41       513,090  
  6,000    
Golden State Tobacco Securitization Corporation, Enhanced Asset Backed Ser 2005 A (AMBAC Insd)
    5.00       06/01/29       5,111,100  
  1,150    
Golden State Tobacco Securitization Corporation, Enhanced Asset Backed Ser 2007 A
    5.75       06/01/47       690,173  
  5,100    
Golden State Tobacco Securitization Corporation, Enhanced Asset Backed Ser 2007 A-1
    5.125       06/01/47       2,757,774  
  4,000    
Los Angeles Ser 2004 A (NATL-RE Insd)
    5.00       09/01/24       4,139,400  
  1,745    
Moreland School District, Santa Clara County 2006 Ser C (AMBAC Insd) (g)
    0.00       08/01/29       457,591  
  1,270    
Oak Grove School District, Santa Clara County Election 2008 Ser A
    0.00       08/01/28       376,682  
  1,000    
Port of Oakland Ser 2002 L (AMT) (FGIC Insd)
    5.00       11/01/21       916,630  
  4,000    
Port of Oakland Ser 2002 L (AMT) (FGIC Insd)
    5.00       11/01/32       3,256,400  
  22,685    
San Bernardino Community College District Election 2002 Ser B (g)
    0.00       08/01/44       2,133,071  
  1,000    
San Diego County, Burnham Institute for Medical Research Ser 2006 (COPs)
    5.00       09/01/34       737,030  
  3,720    
San Diego County Water Authority Ser 2002 A (COPs) (NATL-RE Insd)
    5.00       05/01/27       3,751,322  
  960    
San Francisco City and County, Laguna Honda Hospital Refg Ser 2008 R3 (AGC Insd) (a)
    5.00       06/15/28       965,966  
  720    
San Rafael City Elementary School District, Marin County Election 2002 Ser B (g)
    0.00       08/01/25       286,639  
  16,000    
Silicon Valley Tobacco Securitization Authority Tobacco Settlement, Santa Clara Tobacco Securitization Corp Ser 2007 (g)
    0.00       06/01/36       1,120,000  
  5,000    
Tobacco Securitization Authority of Northern California, Sacramento County Tobacco Securitization Corporation Ser 2006 A-1
    5.00       06/01/37       3,019,550  
  1,350    
Twin Rivers Unified School District, Ser 2009 (BANs) (g)
    0.00       04/01/14       1,071,144  
  500    
University of California, 2009 Ser 0
    5.25       05/15/39       511,490  
  2,760    
University of California Ser 2007-J (FSA Insd) (a)
    4.50       05/15/31       2,492,945  
  2,240    
University of California Ser 2007-J (FSA Insd) (a)
    4.50       05/15/35       1,978,317  
  10,100    
William S. Hart Union High School District, Los Angeles County Election 2008 Ser A (g)
    0.00       08/01/32       2,228,262  
       
 
                     
       
 
                    75,513,307  
       
 
                     

 


 

                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
       
Colorado (3.9%)
                       
  1,750    
Boulder County, University Corp for Atmospheric Research Ser 2002 (NATL-RE Insd)
    5.375       09/01/18       1,861,230  
  1,750    
Boulder County, University Corp for Atmospheric Research Ser 2002 (NATL-RE Insd)
    5.375       09/01/21       1,861,125  
  2,000    
Colorado Educational & Cultural Facilities Authority, Peak to Peak Charter School Refg & Impr Ser 2004 (XLCA Insd)
    5.25       08/15/34       1,773,820  
  2,000    
Colorado Health Facilities Authority, Adventist/Sunbelt Ser 2006 D
    5.25       11/15/35       1,865,080  
  1,820    
Denver Airport System Ser 2006 B (AMT)
    5.00       11/15/12       1,905,467  
  1,590    
Denver Convention Center Hotel Authority, Refg Ser 2006 (XLCA Insd)
    5.00       12/01/30       1,221,406  
  265    
Public Authority For Colorado Energy, Natural Gas Ser 2008
    6.25       11/15/28       256,332  
       
 
                     
       
 
                    10,744,460  
       
 
                     
       
Connecticut (1.7%)
                       
  5,000    
Connecticut Housing Finance Authority, SubSer A-2 (AMT)
    5.15       05/15/38       4,775,900  
       
 
                     
       
 
                       
       
Delaware (0.3%)
                       
  1,000    
New Castle County, Newark Charter School Inc Ser 2006
    5.00       09/01/36       735,630  
       
 
                     
       
 
                       
       
District of Columbia (1.8%)
                       
  6,000    
District of Columbia Ballpark Ser 2006 B-1 (FGIC Insd)
    5.00       02/01/31       4,905,540  
       
 
                     
       
 
                       
       
Florida (8.9%)
                       
  2,000    
Broward County School Board, Ser 2001 A (COPs) (FSA Insd)
    5.00       07/01/26       2,004,760  
  3,000    
Highlands County Health Facilities Authority, Adventist Health/ Sunbelt Ser 2006 C
    5.25       11/15/36       2,840,032  
  3,300    
Jacksonville Electric Authority, St Johns Power Park Refg Issue 2 Ser 17
    5.00       10/01/18       3,370,620  
  1,500    
Lee County Industrial Development Authority, Shell Point Village/ The Alliance Community for Retirement Living Inc, Ser 2006
    5.125       11/15/36       933,645  
  2,000    
Miami-Dade County, Building Better Communities Program Ser 2008 B-1
    6.00       07/01/38       2,085,360  
  1,250    
Miami-Dade County, Miami International Airport Ser 2009 A
    5.00       10/01/25       1,257,838  
  1,200    
Palm Beach County, Solid Waste Authority Ser 2009 (BHAC Insd)
    5.50       10/01/23       1,324,800  
  12,000    
South Miami Health Facilities Authority, Baptist Health South Florida Ser 2007
    5.00       08/15/42       10,772,520  
       
 
                     
       
 
                    24,589,575  
       
 
                     
       
Georgia (4.1%)
                       
  2,000    
Atlanta, Airport Ser 2004 J (FSA Insd)
    5.00       01/01/34       1,983,200  
  6,000    
Georgia State Road & Tollway Authority Ser 2004
    5.00       10/01/22       6,366,180  
  3,000    
Georgia State Road & Tollway Authority Ser 2004
    5.00       10/01/23       3,171,360  
       
 
                     
       
 
                    11,520,740  
       
 
                     
       
Hawaii (3.7%)
                       
  10,000    
Honolulu City & County Ser 2003 A (NATL-RE Insd) (a)
    5.25       03/01/26       10,318,750  
       
 
                     
       
 
                    10,318,750  
       
 
                     
       
Idaho (1.3%)
                       
  35    
Idaho Housing Agency, 1992 Ser E (AMT)
    6.75       07/01/12       35,069  
  745    
Idaho Housing & Finance Association, 2000 Ser E (AMT)
    6.00       01/01/32       762,835  
  2,600    
Idaho Housing & Finance Association 2008 Ser A
    5.25       07/15/23       2,800,772  
       
 
                     
       
 
                    3,598,676  
       
 
                     
       
Illinois (5.0%)
                       
  4,000    
Chicago, O’ Hare Int’l Airport Third Lien Ser 2003 B-2 (AMT) (FSA Insd)
    5.75       01/01/23       4,052,600  
  830    
Illinois Finance Authority, Northwestern Memorial Hospital Ser 2009 B
    5.00       08/15/16       894,184  
  645    
Illinois Finance Authority, Rush University Medical Center Obligated Group Ser 2009 A
    7.25       11/01/38       679,978  
  6,000    
Illinois, First Ser 2002 (NATL-RE Insd)
    5.375       07/01/20       6,228,120  
  2,000    
Schaumburg Ser 2004 B (FGIC Insd)
    5.25       12/01/34       2,027,680  
       
 
                     
       
 
                    13,882,562  
       
 
                     
       
Indiana (6.5%)
                       
  10,000    
Indiana Bond Bank, Revolving Fund Ser 2001 A
    5.00       02/01/23       10,411,000  
  6,000    
Indiana Health & Educational Facility Financing Authority, Clarian Health Ser 2006 A
    5.25       02/15/40       5,245,020  
  1,400    
Marion County Convention & Recreational Facilities Authority, Refg Ser 2003 A (AMBAC Insd)
    5.00       06/01/21       1,417,472  
  820    
Rockport Indiana Michigan Power Company Project, Refg Ser 2009 B
    6.25       06/01/25       859,180  
       
 
                     
       
 
                    17,932,672  
       
 
                     
       
Iowa (1.4%)
                       
  2120    
Iowa State LJOBS Program Ser 2009 A (a)
    5.00       06/01/25       2,277,584  
  1590    
Iowa State LJOBS Program Ser 2009 A (a)
    5.00       06/01/26       1,695,228  
       
 
                     
       
 
                    3,972,812  
       
 
                     
       
Kansas (1.2%)
                       
  730    
Kansas Development Finance Authority, Adventist Health System Sunbelt Obligated Group Ser 2009 C
    5.50       11/15/29       736,212  

 


 

                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
  3,000    
University of Kansas Hospital Authority, KU Health Ser 2002
    4.50       09/01/32       2,613,840  
       
 
                     
       
 
                    3,350,052  
       
 
                     
       
Kentucky (1.8%)
                       
  5,000    
Louisville & Jefferson County Metropolitan Sewer District, Ser 1999 A (FGIC Insd)
    5.75       05/15/33       5,047,450  
       
 
                     
       
 
                       
       
Louisiana (0.5%)
                       
  1,500    
Louisiana Offshore Terminal Authority, Deepwater Port Ser 2007 B-2
    4.30       10/01/37       1,518,390  
       
 
                     
       
 
                       
       
Maryland (2.5%)
                       
  1,105    
Baltimore County, Oak Crest Village Ser 2007 A
    5.00       01/01/37       951,902  
  2,885    
Maryland Health & Higher Educational Facilities Authority, King Farm Presbyterian Community 2006 Ser B
    5.00       01/01/17       2,419,765  
  1,700    
Maryland Health & Higher Educational Facilities Authority, University of Maryland Medical Ser 2006 A
    5.00       07/01/41       1,465,944  
  2,000    
Northeast Maryland Waste Disposal Authority, Montgomery County Ser 2003 (AMT) (AMBAC Insd)
    5.50       04/01/16       2,091,540  
       
 
                     
       
 
                    6,929,151  
       
 
                     
       
Massachusetts (0.6%)
                       
  1,600    
Massachusetts Health and Educational Facilities Authority, Boston College 2008 Ser M-2
    5.50       06/01/30       1,791,568  
       
 
                     
       
 
                       
       
Michigan (3.9%)
                       
  1,735    
Michigan Hospital Finance Authority, Henry Ford Health Refg Ser 2006 A
    5.25       11/15/46       1,329,096  
  5,000    
Michigan Strategic Fund, Detroit Edison Co Ser 2001 C (AMT)
    5.65       09/01/29       4,480,450  
  3,000    
Wayne County, Detroit Metropolitan Wayne County Airport Refg Ser 2002 D (AMT) (FGIC Insd)
    5.50       12/01/17       3,024,990  
  1,855    
Wayne State University, Refg Ser 2008 (FSA Insd)
    5.00       11/15/25       1,919,109  
       
 
                     
       
 
                    10,753,645  
       
 
                     
       
Minnesota (0.7%)
                       
  2,000    
Western Minnesota Municipal Power Agency, 2003 Ser A (NATL-RE Insd)
    5.00       01/01/30       1,977,220  
       
 
                     
       
 
                       
       
Missouri (0.5%)
                       
  1,500    
Missouri Health & Educational Facilities Authority, Lutheran Senior Services Ser 2005 A
    5.375       02/01/35       1,159,500  
  150    
Missouri Housing Development Commission, Homeownership Ser 2000 B-1 (AMT)
    6.25       03/01/31       155,299  
       
 
                     
       
 
                    1,314,799  
       
 
                     
       
Montana (1.0%)
                       
  2,705    
Montana Board of Housing, 2000 Ser B (AMT)
    6.00       12/01/29       2,741,598  
       
 
                     
       
 
                       
       
Nevada (4.3%)
                       
  2,000    
Clark County, Airport SubLien Ser 2004 A-1 (AMT) (FGIC Insd)
    5.50       07/01/20       1,990,180  
  1,000    
Clark County, Jet Aviation Fuel Tax Ser 2003 C (AMT) (AMBAC Insd)
    5.375       07/01/19       969,700  
  1,100    
Clark County, Jet Aviation Fuel Tax Ser 2003 C (AMT) (AMBAC Insd)
    5.375       07/01/20       1,057,793  
  2,000    
Clark County, Jet Aviation Fuel Tax Ser 2003 C (AMT) (AMBAC Insd)
    5.375       07/01/22       1,893,800  
  640    
Las Vegas Redevelopment Agency, Tax Increment Ser 2009 A
    6.25       06/15/16       677,613  
  5,345    
Las Vegas Valley Water District, Water Impr Refg Ser 2003 A (FGIC Insd)
    5.25       06/01/20       5,485,253  
       
 
                     
       
 
                    12,074,339  
       
 
                     
       
New Hampshire (0.2%)
                       
  655    
New Hampshire Business Finance Authority, Ser 2009
    7.125       07/01/27       674,244  
       
 
                     
       
 
                       
       
New Jersey (9.3%)
                       
  2,000    
New Jersey Economic Development Authority, School Facilities Construction Refd 2005 Ser N
    5.50       09/01/24       2,164,640  
  1,555    
New Jersey Housing Mortgage Finance Authority, Home Buyer Ser 2000 CC (AMT) (NATL-RE Insd)
    5.875       10/01/31       1,561,718  
  5,000    
New Jersey Transportation Trust Fund Authority, 1999 Ser A
    5.75       06/15/20       5,498,100  
  1,500    
New Jersey Turnpike Authority, Ser 2003 A (FGIC Insd) (c)
    5.00       01/01/27       1,525,530  
  10,000    
Passaic Valley Sewerage Commissioners Ser F (FGIC Insd)
    5.00       12/01/20       9,329,600  
  5,000    
Tobacco Settlement Financing Corporation Ser 2007-1 A
    4.625       06/01/26       3,464,050  
  6,000    
Tobacco Settlement Financing Corporation Ser 2007-1 B (g)
    0.00       06/01/41       263,760  
  2,000    
University of Medicine & Dentistry Ser 2004 (COPs) (NATL-RE Insd)
    5.25       06/15/23       1,947,060  
       
 
                     
       
 
                    25,754,458  
       
 
                     
       
New York (25.4%)
                       
  10,000    
Metropolitan Transportation Authority, Transportation Refg Ser 2002 A (FGIC Insd)
    5.00       11/15/25       10,080,600  
  2,380    
New York City, 2009 Subser A-1 (a)
    5.25       08/15/27       2,478,333  
  2,380    
New York City, 2009 Subser A-1 (a)
    5.25       08/15/28       2,478,334  
  2,040    
New York City Transitional Finance Authority, 2010 Subser A-1 (a)
    5.00       05/01/28       2,107,891  
  1,635    
New York City Transitional Finance Authority, 2010 Subser A-1 (a)
    5.00       05/01/29       1,689,413  

 


 

                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
  1,635    
New York City Transitional Finance Authority, 2010 Subser A-1 (a)
    5.00       05/01/30       1,689,413  
  3,500    
New York City Municipal Water Finance Authority, Ser A-2003
    5.375       06/15/19       3,793,510  
  18,000    
New York City Municipal Water Finance Authority, 2002 Ser B (a)
    5.00       06/15/26       18,213,720  
  10,000    
New York City Municipal Water Finance Authority, 2004 Ser A
    5.00       06/15/35       10,013,400  
  1,935    
New York City Trust for Cultural Resources, Museum of Modern Art Refg Ser 2008 1A (a)
    5.00       04/01/26       2,039,751  
  2,815    
New York City Trust for Cultural Resources, Museum of Modern Art Refg Ser 2008 1A (a)
    5.00       04/01/27       2,967,389  
  1,100    
New York State Dormitory Authority, Court Facilities Lease Ser 2005 A
    5.50       05/15/29       1,157,156  
  2,000    
Seneca Nation of Indians Ser 2007 A (d)
    5.00       12/01/23       1,498,320  
  5,000    
Tobacco Settlement Financing Corporation, State Contingency Ser 2003 B-1C
    5.50       06/01/17       5,165,900  
  5,000    
Triborough Bridge & Tunnel Authority Refg 2002 E (NATL-RE Insd) (a)
    5.25       11/15/22       5,185,604  
       
 
                     
       
 
                    70,558,734  
       
 
                     
       
North Carolina (1.7%)
                       
  4,500    
Charlotte, Water & Sewer Ser 2001
    5.125       06/01/26       4,637,745  
       
 
                     
       
 
                       
       
North Dakota (0.8%)
                       
  2,750    
Ward County, Trinity Ser 2006
    5.125       07/01/29       2,155,890  
       
 
                     
       
 
                       
       
Ohio (5.9%)
                       
  5,100    
American Municipal Power — Ohio, Inc., Prairie State Energy Campus Ser 2008 A (AGC Insd) (a)
    5.25       02/15/33       5,177,271  
  5,370    
Cuyahoga County, Cleveland Clinic Ser 2003 A
    6.00       01/01/32       5,591,512  
  3,000    
Lorain County, Catholic Healthcare Partners Ser 2001 A
    5.625       10/01/17       3,097,410  
  2,000    
Ohio State University, General Receipts Ser 2002 A
    5.125       12/01/31       2,013,540  
  410    
Ohio State Water Development Authority 2009 Ser A
    5.875       06/01/33       426,503  
       
 
                     
       
 
                    16,306,236  
       
 
                     
       
Oklahoma (0.4%)
                       
  1,500    
Oklahoma Development Finance Authority, Great Plains Medical Center Ser 2007
    5.125       12/01/36       1,111,695  
       
 
                     
       
 
                       
       
Oregon (0.3%)
                       
  685    
Oregon Department of Administrative Services 2009 Ser A
    5.25       04/01/24       755,651  
       
 
                     
       
 
                       
       
Pennsylvania (0.9%)
                       
  4,000    
Allegheny County Redevelopment Authority, West Penn Allegheny Health Ser 2007 A
    5.375       11/15/40       2,410,760  
       
 
                     
       
 
                       
       
Puerto Rico (0.5%)
                       
  1,375    
Puerto Rico, Sales Tax Financing 2009 Subser A
    5.00 (e)     08/01/39       1,398,526  
       
 
                     
       
 
                       
       
South Carolina (5.8%)
                       
  3,000    
Charleston Educational Excellence Financing Corporation, Charleston County School District Ser 2005
    5.25       12/01/29       3,040,080  
  70    
Lexington County Health Services District, Lexmed Inc, Ser 2007 A
    5.00       11/01/16       73,184  
  5,000    
South Carolina Public Service Authority, Refg Ser 2002 D (FSA Insd)
    5.00       01/01/20       5,317,300  
  7,000    
South Carolina Public Service Authority, Refg Ser 2003 A (AMBAC Insd) (a)
    5.00       01/01/22       7,207,601  
  345    
Richland County, Environmental Improvement, International Paper Company Ser 2007 A
    4.60       09/01/12       337,959  
       
 
                     
       
 
                    15,976,124  
       
 
                     
       
 
                       
       
Tennessee (0.6%)
                       
  1,620    
Tennessee Energy Acquisition Corporation Ser 2006 A
    5.25       09/01/19       1,556,545  
       
 
                     
       
 
                       
       
Texas (20.8%)
                       
  2,000    
Alliance Airport Authority, Federal Express Corp Refg Ser 2006 (AMT)
    4.85       04/01/21       1,708,060  
  2,500    
Arlington City, Special Tax Ser 2009
    5.00       08/15/28       2,460,750  
  10,000    
Austin, Water & Wastewater Rrfg Sec 2001 A & B (FSA Insd) (a) (d)
    5.125       05/15/27       10,105,155  
  5,100    
Board of Regents of the University of Houston System Ser 2008 (FSA Insd) (a)
    5.00       02/15/33       5,135,173  
  2,380    
Harris County, Toll Road Unlimited Tax Ser 2007 C
    5.25       08/15/31       2,596,295  
  6,000    
Houston, Airport Sub Lien Ser 2000 A (AMT) (FSA Insd)
    5.875       07/01/17       6,063,660  
  5,000    
Houston, Airport Sub Lien Ser 2000 A (AMT) (FSA Insd)
    5.625       07/01/30       4,870,850  
  5,120    
Houston, Combined Utility First Lien Refg 2004 Ser A (FGIC Insd)
    5.25       05/15/23       5,325,926  
  8,600    
North Texas Tollway Authority Refg First Tier Ser 2008 D (g)
    0.00       01/01/28       2,828,626  
  1,650    
North Texas Tollway Authority Refg First Tier Ser 2008 D (g)
    0.00       01/01/31       437,069  
  13,960    
San Antonio, Water & Refg Ser 2001 (FGIC Insd)
    5.00       05/15/26       14,058,697  
  2,000    
Tarrant County Cultural Educational Facilities Finance Corp, Air Force Village II Inc Ser 2007
    5.125       05/15/37       1,439,300  
  530    
Taxas Municipal Gas Acquisition and Supply Corp. Ser 2008 D
    6.25       12/15/26       512,531  
       
 
                     
       
 
                    57,542,092  
       
 
                     
       
Vermont (0.7%)
                       
  2,500    
Vermont Economic Development Authority, Wake Robin Corp Ser 2006 A
    5.375       05/01/36       1,839,300  
       
 
                     

 


 

                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
       
Virginia (1.4%)
                       
  2,000    
Fairfax County Economic Development Authority, Goodwin House Inc Ser 2007
    5.125       10/01/42       1,524,960  
  1,450    
Henrico County Economic Development Authority, Residential Care Facility, Westminster Canterbury-Management Corp Ser 2006
    5.00       10/01/27       1,170,875  
  1,750    
Henrico County Economic Development Authority, Residential Care Facility, Westminster Canterbury-Management Corp Ser 2006
    5.00       10/01/35       1,315,615  
       
 
                     
       
 
                    4,011,450  
       
 
                     
       
Washington (9.0%)
                       
  5,000    
Energy Northwest, ColuNATL-RE Refg Ser 2001 C (NATL-RE Insd)
    5.75       07/01/18       5,483,100  
  5,000    
Grant County Public Utility District #2, Electric Refg Ser 2001 H (FSA Insd)
    5.375       01/01/18       5,299,900  
  3,510    
Port of Seattle, Passenger Facility Ser 1998 A (NATL-RE Insd)
    5.00       12/01/23       3,474,373  
  2,500    
Spokane School District #81 Ser 2005 (NATL-RE Insd) (g)
    0.00 (e)     06/01/23       2,660,825  
  3,725    
Washington State, Various Purpose Ser 2010 A (a)
    5.00       08/01/29       3,885,683  
  3,915    
Washington State, Various Purpose Ser 2010 A (a)
    5.00       08/01/30       4,083,879  
       
 
                     
       
 
                    24,887,760  
       
 
                     
       
Total Tax-Exempt Municipal Bonds
(Cost $500,204,019)
                    480,788,118  
       
 
                     
                                 
NUMBER OF                              
SHARES (000)                              
       
Short-Term Investment (f) (2.5%)
                       
       
Investment Company
                       
  6,882    
Morgan Stanley Institutional Liquidity Funds — Tax-Exempt Portfolio — Institutional Class
(Cost $6,881,704)
                    6,881,704  
       
 
                     
       
 
                       
       
Total Investments
(Cost $507,085,723) (i) (j)
    175.9 %             487,669,822  
       
 
                       
       
Other Assets in Excess of Liabilities
    3.9               10,822,620  
       
 
                       
       
Floating Rate Note and Dealer Trusts Obligations Related to Securities Held
                       
       
Notes with interest rates ranging from 0.31% to 0.71% at July 31, 2009 and contractual maturities of collateral ranging from 01/01/22 to 07/01/36 (h)
(Cost ($66,824,000))
    -24.1               (66,824,000 )
       
 
                       
       
Preferred Shares of Beneficial Interest
    (55.7 )             (154,500,000 )
       
 
                   
       
 
                       
       
Net Assets Applicable to Common Shareholders
    100.0 %           $ 277,168,442  
       
 
                   
Note: The categories of investments are shown as a percentage of net assets applicable to common shareholders.
AMT   Alternative Minimum Tax.
 
COPs   Certificates of Participation.
 
(a)   Underlying security related to inverse floater entered into by the Fund.
 
(b)   Prerefunded to call date shown.
 
(c)   A portion of this security has been physically segregated in connection with open futures contracts.
 
(d)   Resale is restricted to qualified institutional investors.
 
(e)   Security is a “Step-up” bond where the coupon increases on a predetermined future date.
 
(f)   The Fund invests in Morgan Stanley Institutional Liquidity Funds — Tax-Exempt Portfolio — Institutional Class, an open-end management investment company managed by the Investment Adviser. Investment Advisory fees paid by the Fund are reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Tax-Exempt Portfolio — Institutional Class with respect to assets invested by the Fund in Morgan Stanley Institutional Liquidity Funds — Tax-Exempt Portfolio — Institutional Class .
 
(g)   Capital appreciation bond.
 
(h)   Floating rate note and dealer trusts obligations related to securities held — The Trust enters into transactions in which it transfers to Dealer Trusts (“Dealer Trusts”), fixed rate bonds in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate investments. The Dealer Trusts fund the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Trust to retain residual interest in the bonds. The Trust enters into shortfall agreements with the Dealer Trusts which commit the Trust to pay the Dealer Trusts, in certain circumstances, the difference between the liquidation value of the fixed rate bonds held by the Dealer Trusts and the liquidation value of the floating rate notes held by third parties, as well as any shortfalls in interest cash flows. The residual interests held by the Trust (inverse floating rate investments) include the right of the Fund (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Trust, thereby collapsing the Dealer Trusts.

 


 

    The Trust accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Trust’s investment assets, and the related floating rate notes reflected as Trust liabilities. The notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. At July 31, 2009, Trust investments with a value of $106,019,678 are held by the Dealer Trusts and serve as collateral for the $66,824,000 in floating rate note obligations outstanding at that date.
 
(i)   Securities have been designated as collateral in connection with open futures contracts and inverse floating rate municipal obligations.
 
(j)   The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes.
Bond Insurance:
AGC   Assured Guaranty Corporation.
 
AMBAC   AMBAC Assurance Corporation.
 
FGIC   Financial Guaranty Insurance Company.
 
FSA   Financial Security Assurance Inc.
 
NATL-RE   National Public Finance Guarantee Corporation.
 
XLCA   XL Capital Assurance Inc.

 


 

Futures Contracts Open at July 31, 2009:
                                 
                            UNREALIZED  
NUMBER OF             DESCRIPTION, DELIVERY   UNDERLYING FACE     APPRECIATION/  
CONTRACTS     LONG/SHORT     MONTH AND YEAR   AMOUNT AT VALUE     (DEPRECIATION)  
 
  14     Long  
U.S. Treasury Notes 5 Year September 2009
  $ 1,615,359     $ (313 )
               
 
               
  4     Long  
U.S. Treasury Bond 2 Year September 2009
    866,312       366  
               
 
               
  23     Short  
U.S. Treasury Notes 10 Year September 2009
    (2,697,469 )     (25,723 )
               
 
               
  267     Short  
U.S. Treasury Notes 20 Year September 2009
    (31,773,000 )     (982,283 )
               
 
             
               
 
               
               
Net Unrealized Depreciation
          $ (1,007,952 )
               
 
             

 


 

Morgan Stanley Quality Municipal Income Trust
Notes to the Portfolio of Investments
SFAS 157 Disclosure
7/31/2009
The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), effective November 1, 2008. In accordance with SFAS 157, fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. SFAS 157 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund’s investments. The inputs are summarized in the three broad levels listed below.
Level 1 — unadjusted quoted prices in active markets for identical investments
Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.
The following is a summary of the inputs used as of July 31, 2009 in valuing the Fund’s investments carried at value:
                                 
    Fair Value Measurements at July 31, 2009 Using
            Unadjusted        
            Quoted Prices In   Significant   Significant
            Active Market for   Other Observable   Unobservable
            Identical Investments   Inputs   Inputs
Investment Type   Total   (Level 1)   (Level 2)   (Level 3)
 
Assets
                               
Tax-Exempt Municipal Bonds
  $ 480,788,118           $ 480,788,118        
Short-Term Investment — Investment Company
    6,881,704     $ 6,881,704              
Futures
    366       366              
 
Total
  $ 487,670,188     $ 6,882,070     $ 480,788,118        
 
Liabilities
                               
Futures
    ($1,008,318 )     ($1,008,318 )            
 
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; (3) interest rate swaps are marked-to-market daily based upon quotations from market makers; (4) investments in open-end mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (5) 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, which approximates market value.

 


 

Item 2. Controls and Procedures.
(a) The Trust’s principal executive officer and principal financial officer have concluded that the Trust’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Trust’s in this Form N-Q 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.
(b) There were no changes in the Trust’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.
Item 3. Exhibits.
(a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto.

2


 

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 Quality Municipal Income Trust
 
 
/s/ Randy Takian    
Randy Takian   
Principal Executive Officer   
September 17, 2009
     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/ Randy Takian    
Randy Takian   
Principal Executive Officer   
September 17, 2009
         
/s/ Francis Smith    
Francis Smith   
Principal Financial Officer   
September 17, 2009

3