Ten Morgan Stanley Closed-End Funds to redeem 20% of auction-rate preferreds

By Cristal Cody

Tupelo, Miss., Sept. 29 - The boards of 10 Morgan Stanley Closed-End Municipal Funds on Monday approved another round of refinancing through tender option bonds to redeem outstanding auction-rate preferred shares.

The boards approved the refinancing of an additional 20% of the preferreds leverage, on top of the 30%, or $233.2 million, in refinancing the boards announced in July and August.

As part of the additional refinancing, the funds' limit on investments in inverse floaters has been increased to 25% of net assets from 15% of net assets.

A redemption date was not released.

The funds that will redeem preferreds include the Morgan Stanley Insured Municipal Trust, Morgan Stanley Insured Municipal Bond Trust, Morgan Stanley Insured Municipal Income Trust, Morgan Stanley California Insured Municipal Income Trust, Morgan Stanley Quality Municipal Income Trust, Morgan Stanley Quality Municipal Investment Trust, Morgan Stanley Quality Municipal Securities, Morgan Stanley California Quality Municipal Securities, Morgan Stanley New York Quality Municipal Securities and the Morgan Stanley Municipal Premium Income Trust.

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