Eaton Vance Michigan Municipal Bond Fund

 

 

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: 811-21224

 

 

Eaton Vance Michigan Municipal Bond Fund

(Exact Name of Registrant as Specified in Charter)

 

 

Two International Place, Boston, Massachusetts 02110

(Address of Principal Executive Offices)

 

 

Maureen A. Gemma

Two International Place, Boston, Massachusetts 02110

(Name and Address of Agent for Services)

 

 

(617) 482-8260

(Registrant’s Telephone Number)

September 30

Date of Fiscal Year End

September 30, 2017

Date of Reporting Period

 

 

 


Item 1. Reports to Stockholders

 


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Eaton Vance

Municipal Bond Funds

Annual Report

September 30, 2017

 

 

 

Municipal II (EIV)    •    California II (EIA)    •    Massachusetts (MAB)    •    Michigan (MIW)

New Jersey (EMJ)    •    New York II (NYH)    •    Ohio (EIO)    •    Pennsylvania (EIP)

 

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Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. Each Fund has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act. Accordingly, neither the Funds nor the adviser with respect to the operation of the Funds is subject to CFTC regulation. Because of its management of other strategies, each Fund’s adviser is registered with the CFTC as a commodity pool operator and a commodity trading advisor.

Fund shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested.


Annual Report September 30, 2017

Eaton Vance

Municipal Bond Funds

Table of Contents

 

Management’s Discussion of Fund Performance

     2  

Performance and Fund Profile

  
  

Municipal Bond Fund II

     4  

California Municipal Bond Fund II

     5  

Massachusetts Municipal Bond Fund

     6  

Michigan Municipal Bond Fund

     7  

New Jersey Municipal Bond Fund

     8  

New York Municipal Bond Fund II

     9  

Ohio Municipal Bond Fund

     10  

Pennsylvania Municipal Bond Fund

     11  
  

Endnotes and Additional Disclosures

     12  

Financial Statements

     13  

Report of Independent Registered Public Accounting Firm

     74  

Federal Tax Information

     75  

Annual Meeting of Shareholders

     76  

Dividend Reinvestment Plan

     77  

Board of Trustees’ Contract Approval

     79  

Management and Organization

     83  

Important Notices

     86  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Management’s Discussion of Fund Performance1

 

 

 

Economic and Market Conditions

The fiscal year that began on October 1, 2016 played out as a tale of two markets. For the first two months of the period, interest rates rose and municipal bond prices declined. But from December 2016 until nearly the end of the period on September 30, 2017, longer-term rates generally fell and municipals gained back some, but not all, of their previous losses.

As the period opened, municipal bonds had just come off of a rally fueled by mixed U.S. economic reports, ongoing Federal Reserve Board (the Fed) caution, and the United Kingdom’s June 2016 vote to leave the European Union. In early fall 2016, the rally had ended when remarks by the European Central Bank, the Bank of Japan and the Fed seemed to indicate that rates might begin to rise sooner than markets had anticipated. As a result, municipal rates crept upward in October of 2016.

In November 2016, Donald Trump’s surprise win in the U.S. presidential election precipitated one of the largest municipal market declines in at least two decades. Rates rose, the yield curve steepened and bond prices fell as markets anticipated that decreasing regulation and lower tax rates under a Trump administration could lead to higher economic growth and inflation.

In December 2016, however, interest rates began to reverse direction, despite a Fed rate hike that month and two subsequent hikes in 2017 that put upward pressure on short-term rates. Mixed U.S. economic data, along with loss of confidence that the Trump administration could accomplish health care or tax reform, put downward pressure on long-term rates that would increase as the period wore on. As a result, municipal bonds rallied modestly in December 2016 and continued to stabilize during January and February 2017. From March through July, long-term rates drifted downward and the yield curve flattened. In August and early September, increasing geopolitical tension between the U.S. and North Korea led to a “flight to quality” that drove investors toward the perceived safety of U.S. Treasurys. As a result, rates declined further as Treasury prices rallied, and the municipal market rallied along with Treasurys. But in the final weeks of the period, the rally ended as rates rose in response to Republican legislators’ release of their outline for tax reform, which was viewed as a potential driver of higher U.S. economic growth and inflation.

For the 12-month period, municipal market returns were relatively flat. The Bloomberg Barclays Municipal Bond Index,2 a broad measure of the asset class, returned 0.87%, as total return generated from coupon payments was largely canceled out by price declines early in the fiscal year.

For the one-year period as a whole, rates rose throughout the yield curve for municipal AAA-rated7 issues. The greatest increases occurred at the long end of the curve, causing the curve to steepen for the one year period and longer-term bonds to underperform shorter-term issues. Across the curve, municipal bonds with maturities of 10 years and less outperformed comparable U.S. Treasurys, while 30-year municipals performed in line with 30-year Treasurys.

Fund Performance

For the fiscal year ended September 30, 2017, Municipal Bond Fund II, California Municipal Bond Fund II, Massachusetts Municipal Bond Fund, New Jersey Municipal Bond Fund, New York Municipal Bond Fund II, Ohio Municipal Bond Fund and Pennsylvania Municipal Bond Fund shares at net asset value (NAV) underperformed the 0.59% return of the Funds’ benchmark, the Bloomberg Barclays Long (22+) Year Municipal Bond Index (the Index). During the same 12-month period, Michigan Municipal Bond Fund shares at NAV outperformed the Index.

The Funds’ overall strategy is to invest primarily in higher-quality bonds (rated A or higher).

In managing the Funds, management employs leverage through Residual Interest Bond (RIB) financing, Auction Preferred Shares (APS) and Institutional MuniFund Term Preferred (iMTP) Shares6 to seek to enhance the Funds’ tax-exempt income. The use of leverage has the effect of achieving additional exposure to the municipal market, and thus magnifying a Fund’s exposure to its underlying investments in both up and down market environments. During this period of relatively flat performance by municipal bonds, the additional income generated by the use of leverage was a modest contributor to performance versus the Index — which does not employ leverage — for all eight Funds.

Management hedges to various degrees against the greater potential risk of volatility caused by the use of leverage and investing in bonds at the long end of the yield curve, by using Treasury futures and/or interest-rate swaps. As a risk management tactic within the Funds’ overall strategy, interest rate hedging is intended to moderate performance on both the upside and the downside of the market. So in a period when municipal and Treasury bonds generally declined in price, the hedging strategy mitigated a portion of that decline — and was thus a contributor to relative performance versus the unhedged Index — for all Funds except the Michigan and Ohio Funds, which did not employ a hedging strategy during the period.

 

 

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and include management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.

 

  2  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Management’s Discussion of Fund Performance — continued

 

 

 

Fund-specific Results

Eaton Vance Municipal Bond Fund II shares at NAV returned 0.25% during the fiscal year ended September 30, 2017, underperforming the 0.59% return of the Index. The main detractors from performance relative to the Index were security selection in long-maturity bonds, with 22 years or more remaining to maturity, and security selection in AAA-rated bonds. Significant contributors to relative results versus the Index included the Fund’s hedging strategy, as noted above; bonds in the Fund’s portfolio that were prerefunded, or escrowed, during the period; and security selection in the electric utility sector.

Eaton Vance California Municipal Bond Fund II shares at NAV returned 0.04% during the fiscal year ended September 30, 2017, underperforming the 0.59% return of the Index. Detractors from results versus the Index included security selection in the water and sewer sector; security selection in the industrial development revenue (IDR) sector, which was the best-performing sector in the Index during the period; and an underweight, relative to the Index, in BBB-rated bonds, which were the best-performing ratings category in the Index during the period. In contrast, performance versus the Index was helped by the Fund’s hedging strategy; security selection in zero-coupon bonds, which were, however, the worst-performing coupon structure in the Index during the period; and security selection in AAA-rated bonds.

Eaton Vance Massachusetts Municipal Bond Fund shares at NAV returned -1.68% during the fiscal year ended September 30, 2017, underperforming the 0.59% return of the Index. An overweight in prerefunded bonds, security selection in AAA-rated bonds, and an overweight in zero-coupon bonds detracted from performance versus the Index. In contrast, key contributors to performance relative to the Index included the Fund’s hedging strategy, security selection in the electric utility sector and an overweight in the health care sector.

Eaton Vance Michigan Municipal Bond Fund shares at NAV returned 0.91% during the fiscal year ended September 30, 2017, outperforming the 0.59% return of the Index. Contributors to results versus the Index included security selection in local general obligation (GO) bonds, security selection in AAA-rated bonds and an overweight and security selection in insured Puerto Rico bonds. Detractors from Fund performance versus the Index included security selection in the leasing sector and an underweight in BBB-rated bonds.

Eaton Vance New Jersey Municipal Bond Fund shares at NAV returned -0.44% during the fiscal year ended September 30, 2017, underperforming the 0.59% return of the Index. Detractors from results relative to the Index included an overweight in

zero-coupon bonds, security selection in the transportation sector and security selection in bonds with 22 years or more remaining to maturity. Contributors to performance versus the Index included the Fund’s hedging strategy, holdings that were prerefunded during the period and an overweight in the health care sector.

Eaton Vance New York Municipal Bond Fund II shares at NAV returned -0.15% during the fiscal year ended September 30, 2017, underperforming the 0.59% return of the Index. Fund performance versus the Index was hurt by security selection in the health care sector, security selection in bonds with 22 years or more remaining to maturity and security selection in AAA-rated bonds. Contributors to results versus the Index included the Fund’s hedging strategy, security selection in insured Puerto Rico bonds and an overweight in the housing sector.

Eaton Vance Ohio Municipal Bond Fund shares at NAV returned -1.04% during the fiscal year ended September 30, 2017, underperforming the 0.59% return of the Index. Key detractors from results versus the Index included an overweight and security selection in zero-coupon bonds, security selection in GO bonds and security selection in the electric utility sector. In contrast, an overweight in insured Puerto bonds, security selection in the education sector, and holdings that were prerefunded during the period all contributed to performance relative to the Index.

Eaton Vance Pennsylvania Municipal Bond Fund shares at NAV returned 0.44% during the fiscal year ended September 30, 2017, underperforming the 0.59% return of the Index. Security selection in local GO bonds detracted from performance versus the Index, as did security selection in BBB-rated bonds and an overweight in zero-coupon bonds. In contrast, the Fund’s hedging strategy, an overweight in insured Puerto Rico bonds, and security selection in the water and sewer sector contributed to performance relative to the Index during the period.

Each Fund’s insured Puerto Rico holdings were insured by various municipal bond insurers. It should be noted that most uninsured bonds issued by the Commonwealth of Puerto Rico and its various conduit issuers were no longer included in the Index. As Puerto Rico continued to deal with an ongoing fiscal crisis, bonds issued by its various legal entities were impacted by a number of factors throughout the period, including monetary default. As the period ended, Puerto Rico continued to negotiate with creditors and address its current debt structure under the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) passed by the U.S. Congress.

 

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and include management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.

 

  3  


Eaton Vance

Municipal Bond Fund II

September 30, 2017

 

Performance2,3

 

Portfolio Manager Cynthia J. Clemson

 

% Average Annual Total Returns    Inception Date      One Year      Five Years      Ten Years  

Fund at NAV

     11/29/2002        0.25      6.10      5.34

Fund at Market Price

            –2.55        3.67        5.16  

Bloomberg Barclays Long (22+) Year Municipal Bond Index

            0.59      4.12      5.16
           
% Premium/Discount to NAV4                                
              –7.52
           
Distributions5                                

Total Distributions per share for the period

            $ 0.591  

Distribution Rate at NAV

              4.24

Taxable-Equivalent Distribution Rate at NAV

              7.49

Distribution Rate at Market Price

              4.59

Taxable-Equivalent Distribution Rate at Market Price

              8.11
           
% Total Leverage6                                

Auction Preferred Shares (APS)

              2.14

Institutional MuniFund Term Preferred (iMTP) Shares

              18.02  

Residual Interest Bond (RIB) Financing

              18.58  

Fund Profile

 

Credit Quality (% of total investments)7,8

 

LOGO

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and include management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.

 

  4  


Eaton Vance

California Municipal Bond Fund II

September 30, 2017

 

Performance2,3

 

Portfolio Manager Craig R. Brandon, CFA

 

% Average Annual Total Returns    Inception Date      One Year      Five Years      Ten Years  

Fund at NAV

     11/29/2002        0.04      4.83      4.81

Fund at Market Price

            –3.09        3.07        4.65  

Bloomberg Barclays Long (22+) Year Municipal Bond Index

            0.59      4.12      5.16
           
% Premium/Discount to NAV4                                
              –6.58
           
Distributions5                                

Total Distributions per share for the period

            $ 0.530  

Distribution Rate at NAV

              4.11

Taxable-Equivalent Distribution Rate at NAV

              8.38

Distribution Rate at Market Price

              4.39

Taxable-Equivalent Distribution Rate at Market Price

              8.95
           
% Total Leverage6                                

APS

              1.08

iMTP Shares

              29.82  

RIB Financing

              8.72  

Fund Profile

 

Credit Quality (% of total investments)7,8

 

 

LOGO

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and include management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.

 

  5  


Eaton Vance

Massachusetts Municipal Bond Fund

September 30, 2017

 

Performance2,3

 

Portfolio Manager Craig R. Brandon, CFA

 

% Average Annual Total Returns    Inception Date      One Year      Five Years      Ten Years  

Fund at NAV

     11/29/2002        –1.68      4.10      5.55

Fund at Market Price

            –6.40        1.29        4.69  

Bloomberg Barclays Long (22+) Year Municipal Bond Index

            0.59      4.12      5.16
           
% Premium/Discount to NAV4                                
              –9.55
           
Distributions5                                

Total Distributions per share for the period

            $ 0.556  

Distribution Rate at NAV

              3.43

Taxable-Equivalent Distribution Rate at NAV

              6.39

Distribution Rate at Market Price

              3.79

Taxable-Equivalent Distribution Rate at Market Price

              7.06
           
% Total Leverage6                                

APS

              1.53

iMTP Shares

              31.64  

RIB Financing

              1.22  

Fund Profile

 

Credit Quality (% of total investments)7,8

 

LOGO

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and include management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.

 

  6  


Eaton Vance

Michigan Municipal Bond Fund

September 30, 2017

 

Performance2,3

 

Portfolio Manager Cynthia J. Clemson

 

% Average Annual Total Returns    Inception Date      One Year      Five Years      Ten Years  

Fund at NAV

     11/29/2002        0.91      5.88      6.04

Fund at Market Price

            –4.21        2.38        5.73  

Bloomberg Barclays Long (22+) Year Municipal Bond Index

            0.59      4.12      5.16
           
% Premium/Discount to NAV4                                
              –10.03
           
Distributions5                                

Total Distributions per share for the period

            $ 0.598  

Distribution Rate at NAV

              3.71

Taxable-Equivalent Distribution Rate at NAV

              6.85

Distribution Rate at Market Price

              4.13

Taxable-Equivalent Distribution Rate at Market Price

              7.62
           
% Total Leverage6                                

APS

              7.70

iMTP Shares

              28.96  

Fund Profile

 

Credit Quality (% of total investments)7

 

LOGO

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and include management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.

 

  7  


Eaton Vance

New Jersey Municipal Bond Fund

September 30, 2017

 

Performance2,3

 

Portfolio Manager Adam A. Weigold, CFA

 

% Average Annual Total Returns    Inception Date      One Year      Five Years      Ten Years  

Fund at NAV

     11/29/2002        –0.44      5.20      5.38

Fund at Market Price

            –7.13        2.36        4.88  

Bloomberg Barclays Long (22+) Year Municipal Bond Index

            0.59      4.12      5.16
           
% Premium/Discount to NAV4                                
              –10.14
           
Distributions5                                

Total Distributions per share for the period

            $ 0.627  

Distribution Rate at NAV

              4.07

Taxable-Equivalent Distribution Rate at NAV

              7.90

Distribution Rate at Market Price

              4.53

Taxable-Equivalent Distribution Rate at Market Price

              8.79
           
% Total Leverage6                                

APS

              3.67

iMTP Shares

              28.62  

RIB Financing

              6.16  

Fund Profile

 

Credit Quality (% of total investments)7,8

 

LOGO

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and include management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.

 

  8  


Eaton Vance

New York Municipal Bond Fund II

September 30, 2017

 

Performance2,3

 

Portfolio Manager Craig R. Brandon, CFA

 

% Average Annual Total Returns    Inception Date      One Year      Five Years      Ten Years  

Fund at NAV

     11/29/2002        –0.15      4.26      4.57

Fund at Market Price

            –8.01        2.16        4.13  

Bloomberg Barclays Long (22+) Year Municipal Bond Index

            0.59      4.12      5.16
           
% Premium/Discount to NAV4                                
              –9.21
           
Distributions5                                

Total Distributions per share for the period

            $ 0.562  

Distribution Rate at NAV

              4.01

Taxable-Equivalent Distribution Rate at NAV

              7.77

Distribution Rate at Market Price

              4.42

Taxable-Equivalent Distribution Rate at Market Price

              8.56
           
% Total Leverage6                                

APS

              3.11

iMTP Shares

              20.41  

RIB Financing

              16.86  

Fund Profile

 

Credit Quality (% of total investments)7,8

 

LOGO

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and include management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.

 

  9  


Eaton Vance

Ohio Municipal Bond Fund

September 30, 2017

 

Performance2,3

 

Portfolio Manager Cynthia J. Clemson

 

% Average Annual Total Returns    Inception Date      One Year      Five Years      Ten Years  

Fund at NAV

     11/29/2002        –1.04      5.57      4.96

Fund at Market Price

            –9.65        2.03        5.10  

Bloomberg Barclays Long (22+) Year Municipal Bond Index

            0.59      4.12      5.16
           
% Premium/Discount to NAV4                                
              –7.16
           
Distributions5                                

Total Distributions per share for the period

            $ 0.586  

Distribution Rate at NAV

              4.03

Taxable-Equivalent Distribution Rate at NAV

              7.49

Distribution Rate at Market Price

              4.34

Taxable-Equivalent Distribution Rate at Market Price

              8.07
           
% Total Leverage6                                

APS

              4.03

iMTP Shares

              26.44  

RIB Financing

              5.95  

Fund Profile

 

Credit Quality (% of total investments)7,8

 

LOGO

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and include management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.

 

  10  


Eaton Vance

Pennsylvania Municipal Bond Fund

September 30, 2017

 

Performance2,3

 

Portfolio Manager Adam A. Weigold, CFA

 

% Average Annual Total Returns    Inception Date      One Year      Five Years      Ten Years  

Fund at NAV

     11/29/2002        0.44      5.62      5.91

Fund at Market Price

            –6.35        1.72        5.65  

Bloomberg Barclays Long (22+) Year Municipal Bond Index

            0.59      4.12      5.16
           
% Premium/Discount to NAV4                                
              –9.60
           
Distributions5                                

Total Distributions per share for the period

            $ 0.635  

Distribution Rate at NAV

              4.08

Taxable-Equivalent Distribution Rate at NAV

              7.44

Distribution Rate at Market Price

              4.51

Taxable-Equivalent Distribution Rate at Market Price

              8.22
           
% Total Leverage6                                

APS

              1.89

iMTP Shares

              30.32  

RIB Financing

              5.03  

Fund Profile

 

Credit Quality (% of total investments)7,8

 

LOGO

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and include management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than or equal to one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month-end, please refer to eatonvance.com.

 

  11  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Endnotes and Additional Disclosures

 

 

1 

The views expressed in this report are those of the portfolio manager(s) and are current only through the date stated at the top of this page. These views are subject to change at any time based upon market or other conditions, and Eaton Vance and the Fund(s) disclaim any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Eaton Vance fund. This commentary may contain statements that are not historical facts, referred to as “forward looking statements”. The Fund’s actual future results may differ significantly from those stated in any forward looking statement, depending on factors such as changes in securities or financial markets or general economic conditions, the volume of sales and purchases of Fund shares, the continuation of investment advisory, administrative and service contracts, and other risks discussed from time to time in the Fund’s filings with the Securities and Exchange Commission.

 

2 

Bloomberg Barclays Municipal Bond Index is an unmanaged index of municipal bonds traded in the U.S. Bloomberg Barclays Long (22+) Year Municipal Bond Index is an unmanaged index of municipal bonds traded in the U.S. with maturities of 22 years or more. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index.

 

3 

Performance results reflect the effects of leverage. Performance since inception for an index, if presented, is the performance since the Fund’s or oldest share class’ inception, as applicable. Included in the average annual total return at NAV for the five and ten year periods is the impact of the tender and repurchase of a portion of the Fund’s APS at 95.5% of the Fund’s APS per share liquidation preference. Had this transaction not occurred, the total return at NAV would be lower for the Fund.

 

4 

The shares of the Fund often trade at a discount or premium from their net asset value. The discount or premium of the Fund may vary over time and may be higher or lower than what is quoted in this report. For up-to-date premium/discount information, please refer to http://eatonvance.com/closedend.

 

5

The Distribution Rate is based on the Fund’s last regular distribution per share in the period (annualized) divided by the Fund’s NAV or market price at the end of the period. The Fund’s distributions may be comprised of amounts characterized for federal income tax purposes as tax-exempt income, qualified and non-qualified ordinary dividends, capital gains and nondividend distributions, also known as return of capital. The Fund will determine the federal income tax character of distributions paid to a shareholder after the end of the calendar year. This is reported on the IRS form 1099-DIV and provided to the shareholder shortly after each year-end. For information about the tax character of distributions made in prior calendar years, please refer to Performance-Tax Character of Distributions on the Fund’s webpage available at eatonvance.com. The Fund’s distributions are determined by the investment adviser based on its current assessment of the Fund’s long-term return potential.

   Fund distributions may be affected by numerous factors including changes in Fund performance, the cost of financing for Funds that employ leverage, portfolio holdings, realized and projected returns, and other factors. As portfolio and market conditions change, the rate of distributions paid by the Fund could change. Taxable-equivalent performance is based on the highest combined federal and state income tax rates, where applicable. Lower tax rates would result in lower tax-equivalent performance. Actual tax rates will vary depending on your income, exemptions and deductions. Rates do not include local taxes.

 

6 

Fund employs RIB financing and/or APS and iMTP Shares leverage. The leverage created by RIB investments, APS and iMTP Shares provides an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater price volatility). The cost of leverage rises and falls with changes in short-term interest rates. See “Floating Rate Notes Issued in Conjunction with Securities Held” in the notes to the financial statements for more information about RIB financing. RIB leverage represents the amount of Floating Rate Notes outstanding at period end as a percentage of Fund net assets applicable to common shares plus APS, iMTP Shares and Floating Rate Notes. APS leverage represents the liquidation value of the Fund’s APS outstanding at period end as a percentage of Fund net assets applicable to common shares plus APS, iMTP Shares and Floating Rate Notes. iMTP Shares leverage represents the liquidation value of the Fund’s iMTP Shares outstanding at period end as a percentage of Fund net assets applicable to common shares plus APS, iMTP Shares and Floating Rate Notes. The Fund may be required to maintain prescribed asset coverage for its leverage and may be required to reduce its leverage at an inopportune time.

 

7 

Ratings are based on Moody’s, S&P or Fitch, as applicable. If securities are rated differently by the ratings agencies, the higher rating is applied. Ratings, which are subject to change, apply to the creditworthiness of the issuers of the underlying securities and not to the Fund or its shares. Credit ratings measure the quality of a bond based on the issuer’s creditworthiness, with ratings ranging from AAA, being the highest, to D, being the lowest based on S&P’s measures. Ratings of BBB or higher by S&P or Fitch (Baa or higher by Moody’s) are considered to be investment-grade quality. Credit ratings are based largely on the ratings agency’s analysis at the time of rating. The rating assigned to any particular security is not necessarily a reflection of the issuer’s current financial condition and does not necessarily reflect its assessment of the volatility of a security’s market value or of the liquidity of an investment in the security. Holdings designated as “Not Rated” are not rated by the national ratings agencies stated above.

 

8 

The chart includes the municipal bonds held by a trust that issues residual interest bonds, consistent with the Portfolio of Investments.

 

   Fund profile subject to change due to active management.

 

   Important Notice to Shareholders
   Effective September 30, 2017, the Funds’ benchmark was changed to the Bloomberg Barclays Municipal Bond Index.
 

 

  12  


Eaton Vance

Municipal Bond Fund II

September 30, 2017

 

Portfolio of Investments

 

 

Tax-Exempt Investments — 161.5%  
   
Security   Principal
Amount
(000’s omitted)
    Value  

Education — 5.7%

 

Connecticut Health and Educational Facilities Authority, (Fairfield University), 5.00%, 7/1/46

  $ 1,500     $ 1,682,760  

Houston Higher Education Finance Corp., TX, (St. John’s School), 5.25%, 9/1/33

    565       625,483  

Houston Higher Education Finance Corp., TX, (William Marsh Rice University), 5.00%, 5/15/35

    1,745       1,908,053  

Massachusetts Development Finance Agency, (Northeastern University), 5.25%, 3/1/37

    1,650       1,933,668  

New York Dormitory Authority, (Rockefeller University), 5.00%, 7/1/40(1)

    1,500       1,597,485  
   
    $ 7,747,449  
   

Electric Utilities — 4.9%

 

Energy Northwest, WA, (Columbia Generating Station), 5.00%, 7/1/40

  $ 330     $ 378,985  

Pima County Industrial Development Authority, AZ, (Tucson Electric Power Co.), 5.25%, 10/1/40

    1,300       1,394,419  

Public Power Generation Agency, NE, (Whelan Energy Center Unit 2), 5.00%, 1/1/28

    3,000       3,512,100  

Unified Government of Wyandotte County/Kansas City Board of Public Utilities, KS, 5.00%, 9/1/36

    685       761,679  

Utility Debt Securitization Authority, NY, 5.00%, 12/15/35

    500       584,960  
   
    $ 6,632,143  
   

Escrowed / Prerefunded — 19.4%

 

Connecticut Health and Educational Facilities Authority, (Wesleyan University), Prerefunded to 7/1/20, 5.00%, 7/1/39(1)

  $ 2,200     $ 2,433,486  

Hawaii, Prerefunded to 12/1/21,
5.00%, 12/1/29

    1,545       1,780,921  

Hawaii, Prerefunded to 12/1/21,
5.00%, 12/1/29

    955       1,100,828  

Hawaii, Prerefunded to 12/1/21,
5.00%, 12/1/30

    620       714,674  

Hawaii, Prerefunded to 12/1/21,
5.00%, 12/1/30

    380       438,026  

Maryland Health and Higher Educational Facilities Authority, (Charlestown Community, Inc.), Prerefunded to 1/1/21, 6.125%, 1/1/30

    235       271,839  

Massachusetts Health and Educational Facilities Authority, (Harvard University), Prerefunded to 11/15/18, 5.50%, 11/15/36

    2,045       2,150,236  

Massachusetts Health and Educational Facilities Authority, (Harvard University), Prerefunded to 11/15/18, 5.50%, 11/15/36

    665       699,221  

Mississippi, Prerefunded to 10/1/21, 5.00%, 10/1/36(1)

    1,725       1,979,869  

North Carolina Capital Facilities Finance Agency, (Duke University), Prerefunded to 4/1/19, 5.00%, 10/1/38(1)

    500       529,930  

North Carolina, Capital Improvement Limited Obligation Bonds, Prerefunded to 5/1/21, 5.00%, 5/1/30

    5,000       5,678,650  
Security   Principal
Amount
(000’s omitted)
    Value  

Escrowed / Prerefunded (continued)

 

Oregon, Prerefunded to 8/2/21,
5.00%, 8/1/36

  $ 570     $ 651,607  

Oregon State Department of Administrative Services, Lottery Revenue, Prerefunded to 4/1/21, 5.25%, 4/1/30

    1,120       1,277,752  

South Carolina Public Service Authority, Prerefunded to 1/1/19, 5.50%, 1/1/38

    110       116,302  

South Carolina Public Service Authority, Prerefunded to 1/1/19, 5.50%, 1/1/38

    1,310       1,385,050  

Tennessee School Bond Authority, Prerefunded to 5/1/18, 5.50%, 5/1/38

    1,000       1,027,170  

Triborough Bridge and Tunnel Authority, NY, Prerefunded to 5/15/18, 5.00%, 11/15/37

    2,500       2,564,925  

University of Virginia, Prerefunded to 6/1/18, 5.00%, 6/1/40

    1,500       1,541,445  
   
    $ 26,341,931  
   

General Obligations — 17.0%

 

California, 5.00%, 12/1/30

  $ 610     $ 723,301  

California, 5.00%, 10/1/33

    2,150       2,546,525  

Chicago Park District, IL, (Harbor Facilities), 5.25%, 1/1/37(1)

    1,680       1,805,026  

Clark County, NV, 5.00%, 7/1/33

    500       571,245  

Delaware Valley Regional Finance Authority, PA, 5.75%, 7/1/32

    2,500       3,190,525  

Kane, Cook and DuPage Counties School District No. 46, IL, 5.00%, 1/1/33

    2,000       2,282,840  

New York, 5.00%, 2/15/34(1)

    2,750       3,090,752  

New York, NY, 5.00%, 8/1/31

    2,000       2,315,560  

Oregon, 5.00%, 8/1/36

    430       486,476  

Washington, 5.00%, 2/1/35(1)

    5,250       6,118,560  
   
    $ 23,130,810  
   

Hospital — 6.1%

 

Hawaii Department of Budget and Finance, (Hawaii Pacific Health), 5.50%, 7/1/38

  $ 360     $ 409,270  

New Jersey Health Care Facilities Financing Authority, (Robert Wood Johnson University Hospital), 5.25%, 7/1/35

    615       702,631  

Ohio Higher Educational Facility Commission, (Cleveland Clinic Health System), 5.00%, 1/1/32

    1,550       1,758,398  

Vermont Educational and Health Buildings Financing Agency, (University of Vermont Medical Center),
5.00%, 12/1/33

    2,500       2,846,450  

Wisconsin Health and Educational Facilities Authority, (Ascension Senior Credit Group), 4.50%, 11/15/39

    2,395       2,616,705  
   
    $ 8,333,454  
   

Industrial Development Revenue — 0.5%

 

Maricopa County Pollution Control Corp., AZ, (El Paso Electric Co.), 4.50%, 8/1/42

  $ 595     $ 614,819  
   
    $ 614,819  
   
 

 

  13   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Fund II

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  

Insured – Electric Utilities — 4.7%

 

Chelan County Public Utility District No. 1, WA, (Columbia River), (NPFG),
0.00%, 6/1/23

  $ 6,335     $ 5,592,538  

Louisiana Energy and Power Authority, (AGM), 5.25%, 6/1/38

    735       842,082  
   
    $ 6,434,620  
   

Insured – Escrowed / Prerefunded — 20.5%

 

American Municipal Power-Ohio, Inc., OH, (Prairie State Energy Campus), (AGC), Prerefunded to 2/15/19,
5.75%, 2/15/39

  $ 1,000     $ 1,065,390  

Arizona Health Facilities Authority, (Banner Health), (BHAC), Prerefunded to 1/1/18, 5.375%, 1/1/32

    1,750       1,770,230  

Bossier City, LA, Utilities Revenue, (BHAC), Prerefunded to 10/1/18, 5.25%, 10/1/26

    670       698,797  

Bossier City, LA, Utilities Revenue, (BHAC), Prerefunded to 10/1/18, 5.25%, 10/1/27

    420       438,052  

Bossier City, LA, Utilities Revenue, (BHAC), Prerefunded to 10/1/18, 5.50%, 10/1/38

    660       690,017  

California Statewide Communities Development Authority, (Sutter Health), (AGM), Prerefunded to 8/15/18, 5.05%, 8/15/38(1)

    1,500       1,555,635  

Chicago, IL, Wastewater Transmission Revenue, (BHAC), Prerefunded to 1/1/18, 5.50%, 1/1/38

    1,635       1,654,162  

Colorado Health Facilities Authority, (Catholic Health), (AGM), Prerefunded to 4/29/18, 5.10%, 10/1/41(1)

    2,200       2,253,966  

District of Columbia Water and Sewer Authority, (AGC), Prerefunded to 10/1/18, 5.00%, 10/1/34(1)

    1,250       1,301,312  

New Jersey Economic Development Authority, (School Facilities Construction), (AGC), Prerefunded to 12/15/18, 5.50%, 12/15/34

    305       321,931  

New Jersey Economic Development Authority, (School Facilities Construction), (AGC), Prerefunded to 12/15/18, 5.50%, 12/15/34

    565       596,787  

North Carolina Turnpike Authority, (Triangle Expressway System), (AGC), Prerefunded to 1/1/19, 5.50%, 1/1/29

    255       269,277  

North Carolina Turnpike Authority, (Triangle Expressway System), (AGC), Prerefunded to 1/1/19, 5.75%, 1/1/39

    290       307,139  

Palm Beach County Solid Waste Authority, FL, (BHAC), Prerefunded to 10/1/19, 5.00%, 10/1/24

    530       572,156  

Palm Beach County Solid Waste Authority, FL, (BHAC), Prerefunded to 10/1/19, 5.00%, 10/1/24

    210       226,745  

Palm Beach County Solid Waste Authority, FL, (BHAC), Prerefunded to 10/1/19, 5.00%, 10/1/26

    425       458,889  

Palm Springs Unified School District, CA, (Election of 2008), (AGC), Prerefunded to 8/1/19, 5.00%, 8/1/33

    2,750       2,954,352  

San Diego County Water Authority, CA, Certificates of Participation, (AGM), Prerefunded to 5/1/18, 5.00%, 5/1/38(1)

    3,250       3,330,210  
Security   Principal
Amount
(000’s omitted)
    Value  

Insured – Escrowed / Prerefunded (continued)

 

South Carolina Public Service Authority, (BHAC), Prerefunded to 1/1/19,
5.50%, 1/1/38

  $ 130     $ 137,448  

South Carolina Public Service Authority, (BHAC), Prerefunded to 1/1/19,
5.50%, 1/1/38

    1,465       1,548,930  

University of South Alabama, (BHAC), Prerefunded to 8/1/18, 5.00%, 8/1/38

    3,900       4,032,834  

Washington Health Care Facilities Authority, (MultiCare Health System), (AGC), Prerefunded to 8/15/19, 6.00%, 8/15/39

    1,545       1,686,136  
   
    $ 27,870,395  
   

Insured – General Obligations — 0.7%

 

Cincinnati City School District, OH, (AGM), (FGIC), 5.25%, 12/1/30

  $ 750     $ 959,257  
   
    $ 959,257  
   

Insured – Hospital — 5.4%

 

Illinois Finance Authority, (Children’s Memorial Hospital), (AGC),
5.25%, 8/15/47(1)

  $ 2,500     $ 2,576,900  

New Jersey Health Care Facilities Financing Authority, (Virtua Health), (AGC),
5.50%, 7/1/38

    2,245       2,401,993  

Washington Health Care Facilities Authority, (Providence Health Care), (AGM), 5.25%, 10/1/33

    2,300       2,391,126  
   
    $ 7,370,019  
   

Insured – Industrial Development Revenue — 1.1%

 

Pennsylvania Economic Development Financing Authority, (Aqua Pennsylvania, Inc.), (BHAC),
5.00%, 10/1/39

  $ 1,340     $ 1,431,013  
   
    $ 1,431,013  
   

Insured – Lease Revenue / Certificates of Participation — 1.0%

 

Essex County Improvement Authority, NJ, (NPFG), 5.50%, 10/1/30

  $ 1,000     $ 1,312,770  
   
    $ 1,312,770  
   

Insured – Other Revenue — 1.7%

 

Harris County-Houston Sports Authority, TX, (AGM), (NPFG), 0.00%, 11/15/34

  $ 2,540     $ 1,249,350  

New York City Industrial Development Agency, NY, (Yankee Stadium), (AGC), 7.00%, 3/1/49

    1,000       1,083,150  
   
    $ 2,332,500  
   

Insured – Special Tax Revenue — 5.7%

 

Miami-Dade County, FL, Professional Sports Franchise Facilities, (AGC), 7.00%, (0.00% until 10/1/19), 10/1/39

  $ 3,000     $ 3,618,690  
 

 

  14   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Fund II

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  

Insured – Special Tax Revenue (continued)

 

Pennsylvania Turnpike Commission, (AGM), 5.25%, 7/15/30

  $ 2,540     $ 3,150,515  

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

    4,440       933,998  
   
    $ 7,703,203  
   

Insured – Student Loan — 0.7%

 

Maine Educational Loan Authority, (AGC), 5.625%, 12/1/27

  $ 905     $ 958,857  
   
    $ 958,857  
   

Insured – Transportation — 19.1%

 

Chicago, IL, (O’Hare International Airport), (AGM), 5.00%, 1/1/29

  $ 260     $ 298,022  

Chicago, IL, (O’Hare International Airport), (AGM), 5.125%, 1/1/30

    400       453,820  

Chicago, IL, (O’Hare International Airport), (AGM), 5.125%, 1/1/31

    180       203,602  

Chicago, IL, (O’Hare International Airport), (AGM), 5.25%, 1/1/32

    100       113,514  

Clark County, NV, (Las Vegas-McCarran International Airport), (AGM),
5.25%, 7/1/39

    1,585       1,717,776  

E-470 Public Highway Authority, CO, (NPFG), 0.00%, 9/1/22

    7,800       7,071,012  

Manchester, NH, (Manchester-Boston Regional Airport), (AGM),
5.125%, 1/1/30

    1,305       1,343,837  

Maryland Transportation Authority, (AGM), 5.00%, 7/1/41(1)

    10,000       10,299,000  

Metropolitan Washington Airports Authority, D.C., (BHAC),
5.00%, 10/1/24

    1,000       1,075,750  

Metropolitan Washington Airports Authority, D.C., (BHAC),
5.00%, 10/1/29

    535       574,419  

New Jersey Transportation Trust Fund Authority, (AGC),
5.50%, 12/15/38

    1,040       1,082,702  

North Texas Tollway Authority, (BHAC), 5.75%, 1/1/48

    210       212,497  

North Texas Tollway Authority, (BHAC), Prerefunded to 1/1/18, 5.75%, 1/1/48

    1,540       1,558,757  
   
    $ 26,004,708  
   

Insured – Water and Sewer — 4.6%

 

Houston, TX, Combined Utility System Revenue, (AGM), (BHAC),
5.00%, 11/15/33

  $ 105     $ 105,520  

Houston, TX, Combined Utility System Revenue, (AGM), (BHAC), Prerefunded to 11/15/17,
5.00%, 11/15/33

    330       331,716  

Massachusetts Water Resources Authority, (AGM), 5.25%, 8/1/35

    1,000       1,322,150  

Michigan Finance Authority, (Detroit Water and Sewerage Department), (AGM), 5.00%, 7/1/32

    230       261,241  

Michigan Finance Authority, (Detroit Water and Sewerage Department), (AGM), 5.00%, 7/1/33

    195       220,461  
Security   Principal
Amount
(000’s omitted)
    Value  

Insured – Water and Sewer (continued)

 

Michigan Finance Authority, (Detroit Water and Sewerage Department), (AGM), 5.00%, 7/1/35

  $ 240     $ 269,925  

Michigan Finance Authority, (Detroit Water and Sewerage Department), (AGM), 5.00%, 7/1/37

    195       218,174  

New York City Municipal Water Finance Authority, NY, (BHAC), 5.75%, 6/15/40

    2,205       2,279,441  

Pearland, TX, Waterworks and Sewer Systems, (NPFG), 3.50%, 9/1/31

    1,220       1,220,512  
   
    $ 6,229,140  
   

Lease Revenue / Certificates of Participation — 6.4%

 

New Jersey Health Care Facilities Financing Authority, (Hospital Asset Transformation Program),
5.75%, 10/1/31

  $ 2,235     $ 2,388,008  

North Carolina, Limited Obligation Bonds, 5.00%, 5/1/26(1)

    5,250       6,297,848  
   
    $ 8,685,856  
   

Other Revenue — 0.4%

 

Oregon State Department of Administrative Services, Lottery Revenue,
5.25%, 4/1/30

  $ 180     $ 204,124  

Texas Municipal Gas Acquisition and Supply Corp. III, Gas Supply Revenue,
5.00%, 12/15/30

    260       290,217  
   
    $ 494,341  
   

Special Tax Revenue — 12.1%

 

Central Puget Sound Regional Transit Authority, WA, Sales and Use Tax Revenue, 5.00%, 11/1/30(1)

  $ 1,850     $ 2,237,205  

Dallas Area Rapid Transit, TX, Sales Tax Revenue, 5.00%, 12/1/35

    405       476,616  

Dallas Area Rapid Transit, TX, Sales Tax Revenue, 5.00%, 12/1/36

    215       252,242  

Homewood City Board of Education, AL, 5.00%, 4/1/32

    1,880       2,117,313  

Massachusetts Bay Transportation Authority, Sales Tax Revenue,
5.25%, 7/1/33

    750       968,288  

Metropolitan Transportation Authority, NY, Dedicated Tax Revenue, Green Bonds, 5.25%, 11/15/33

    1,195       1,480,151  

New York City Transitional Finance Authority, NY, Future Tax Revenue, 5.50%, 11/1/35(1)

    2,145       2,411,066  

New York City Transitional Finance Authority, NY, Future Tax Revenue, Prerefunded to 11/1/20,
5.50%, 11/1/35(1)

    1,655       1,877,177  

New York Dormitory Authority, Personal Income Tax Revenue, 4.00%, 2/15/35

    2,000       2,160,680  

New York Dormitory Authority, Sales Tax Revenue, 5.00%, 3/15/34

    465       532,420  

New York Dormitory Authority, Sales Tax Revenue, 5.00%, 3/15/35

    1,710       1,947,536  
   
    $ 16,460,694  
   
 

 

  15   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Fund II

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  

Transportation — 18.6%

 

Austin, TX, Airport System Revenue, 5.00%, 11/15/41

  $ 2,110     $ 2,430,150  

Chicago, IL, (O’Hare International Airport), 5.00%, 1/1/33

    1,750       2,027,760  

Chicago, IL, (O’Hare International Airport),
5.00%, 1/1/34

    1,000       1,144,210  

Dallas and Fort Worth, TX, (Dallas/Fort Worth International Airport),
5.25%, 11/1/30

    640       759,405  

Dallas and Fort Worth, TX, (Dallas/Fort Worth International Airport),
5.25%, 11/1/31

    990       1,173,566  

Delaware River Port Authority of Pennsylvania and New Jersey,
5.00%, 1/1/35

    1,715       1,846,403  

Los Angeles Department of Airports, CA, (Los Angeles International Airport), 5.25%, 5/15/28

    465       513,825  

Metropolitan Transportation Authority, NY, 5.25%, 11/15/32

    620       736,014  

Metropolitan Transportation Authority, NY, 5.25%, 11/15/38

    865       988,107  

Miami-Dade County, FL, (Miami International Airport), 5.00%, 10/1/41

    2,095       2,262,307  

Miami-Dade County, FL, Aviation Revenue, 5.00%, 10/1/37

    1,385       1,603,359  

New Jersey Transportation Trust Fund Authority, (Transportation Program), 5.00%, 6/15/38

    130       138,840  

New Jersey Transportation Trust Fund Authority, (Transportation System), 5.25%, 12/15/23

    1,000       1,139,120  

New Jersey Turnpike Authority, 5.00%, 1/1/34

    800       950,424  

New York Liberty Development Corp., (4 World Trade Center), 5.00%, 11/15/31

    1,070       1,210,619  

Orlando-Orange County Expressway Authority, FL, 5.00%, 7/1/35

    90       98,317  

Orlando-Orange County Expressway Authority, FL, 5.00%, 7/1/40

    230       250,344  

Orlando-Orange County Expressway Authority, FL, Prerefunded to 7/1/20, 5.00%, 7/1/35

    330       364,643  

Orlando-Orange County Expressway Authority, FL, Prerefunded to 7/1/20, 5.00%, 7/1/40

    145       160,222  

Port Authority of New York and New Jersey, 5.00%, 12/1/34(1)

    2,040       2,366,645  

South Carolina Transportation Infrastructure Bank, Prerefunded to 10/1/19, 5.25%, 10/1/40

    1,000       1,083,450  

Texas Transportation Commission, (Central Texas Turnpike System), 5.00%, 8/15/37

    1,500       1,669,365  

Texas Transportation Commission, (Central Texas Turnpike System), 5.00%, 8/15/42

    265       293,196  
   
    $ 25,210,291  
   

Water and Sewer — 5.2%

 

Detroit, MI, Sewage Disposal System, 5.00%, 7/1/32

  $ 1,555     $ 1,709,909  

Detroit, MI, Sewage Disposal System, 5.25%, 7/1/39

    380       419,740  

Detroit, MI, Water Supply System,
5.25%, 7/1/41

    300       325,125  
Security   Principal
Amount
(000’s omitted)
    Value  

Water and Sewer (continued)

 

New York City Municipal Water Finance Authority, NY, (Water and Sewer System), 5.00%, 6/15/36

  $ 4,000     $ 4,670,640  
   
    $ 7,125,414  
   

Total Tax-Exempt Investments — 161.5%
(identified cost $202,627,348)

 

  $ 219,383,684  
   

Auction Preferred Shares Plus Cumulative Unpaid Dividends — (3.5)%

 

  $ (4,750,932
   

Institutional MuniFund Term Preferred Shares, at Liquidation Value
(net of unamortized deferred offering costs) — (29.3)%

 

  $ (39,798,080
   

Other Assets, Less Liabilities — (28.7)%

 

  $ (38,994,598
   

Net Assets Applicable to Common Shares — 100.0%

 

  $ 135,840,074  
   

The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.

At September 30, 2017, the concentration of the Fund’s investments in the various states and territories, determined as a percentage of total investments, is as follows:

 

New York      15.5%  
Others, representing less than 10% individually      84.5%  

The Fund invests primarily in debt securities issued by municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at September 30, 2017, 40.4% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution or financial guaranty assurance agency ranged from 0.4% to 15.0% of total investments.

 

(1)

Security represents the municipal bond held by a trust that issues residual interest bonds (see Note 1G).

Abbreviations:

 

AGC     Assured Guaranty Corp.
AGM     Assured Guaranty Municipal Corp.
BHAC     Berkshire Hathaway Assurance Corp.
FGIC     Financial Guaranty Insurance Company
NPFG     National Public Finance Guaranty Corp.
 

 

  16   See Notes to Financial Statements.


Eaton Vance

California Municipal Bond Fund II

September 30, 2017

 

Portfolio of Investments

 

 

Tax-Exempt Investments — 164.4%  
   
Security  

Principal
Amount

(000’s omitted)

    Value  

Education — 8.5%

 

California Educational Facilities Authority, (Harvey Mudd College), 5.25%, 12/1/31

  $ 395     $ 456,731  

California Educational Facilities Authority, (Harvey Mudd College), 5.25%, 12/1/36

    160       182,768  

California Educational Facilities Authority, (Loyola Marymount University),
5.00%, 10/1/22

    70       79,892  

California Educational Facilities Authority, (Loyola Marymount University),
5.00%, 10/1/30

    380       406,277  

California Educational Facilities Authority, (University of San Francisco),
6.125%, 10/1/36

    115       137,110  

California Educational Facilities Authority, (University of the Pacific),
5.00%, 11/1/30

    330       370,979  

California Municipal Finance Authority, (University of San Diego),
5.00%, 10/1/31

    210       238,690  

California Municipal Finance Authority, (University of San Diego),
5.00%, 10/1/35

    145       164,265  

California Municipal Finance Authority, (University of San Diego), 5.25%, 10/1/26

    405       465,657  

California Municipal Finance Authority, (University of San Diego),
5.25%, 10/1/27

    425       487,934  

California Municipal Finance Authority, (University of San Diego),
5.25%, 10/1/28

    450       515,880  

University of California, Prerefunded to 5/15/19, 5.25%, 5/15/39

    165       176,571  

University of California, Prerefunded to 5/15/19, 5.25%, 5/15/39

    550       588,572  
                 
    $ 4,271,326  
                 

Electric Utilities — 5.7%

 

Los Angeles Department of Water and Power, Electric System Revenue, 5.25%, 7/1/32

  $ 745     $ 769,369  

Sacramento Municipal Utility District,
5.00%, 8/15/30

    420       486,058  

Sacramento Municipal Utility District,
5.00%, 8/15/31

    125       144,152  

Southern California Public Power Authority, (Tieton Hydropower), 5.00%, 7/1/30

    1,000       1,099,530  

Vernon, Electric System Revenue,
5.125%, 8/1/21

    335       358,182  
                 
    $ 2,857,291  
                 

Escrowed / Prerefunded — 16.1%

 

California Educational Facilities Authority, (Claremont McKenna College), Prerefunded to 1/1/19, 5.00%, 1/1/39

  $ 1,370     $ 1,440,665  

California Educational Facilities Authority, (Santa Clara University), Prerefunded to 2/1/20, 5.00%, 2/1/29

    890       972,734  

California Educational Facilities Authority, (University of Southern California), Prerefunded to 10/1/18, 5.25%, 10/1/39

    1,200       1,252,944  

California Health Facilities Financing Authority, (Cedars-Sinai Medical Center), Prerefunded to 8/15/19,
5.00%, 8/15/39

    1,400       1,505,882  
Security  

Principal
Amount

(000’s omitted)

    Value  

Escrowed / Prerefunded (continued)

 

San Diego Community College District, (Election of 2002), Prerefunded to 8/1/21, 5.00%, 8/1/32

  $ 720     $ 826,279  

San Diego Community College District, (Election of 2006), Prerefunded to 8/1/21, 5.00%, 8/1/31

    455       522,163  

San Mateo Union High School District, (Election of 2006), Prerefunded to 9/1/23, 5.00%, 9/1/27

    350       420,997  

San Mateo Union High School District, (Election of 2006), Prerefunded to 9/1/23, 5.00%, 9/1/28

    590       709,681  

University of California, Prerefunded to 5/15/19, 5.25%, 5/15/39

    285       304,987  

Vernon, Electric System Revenue, Prerefunded to 8/1/19, 5.125%, 8/1/21

    140       148,308  
                 
    $ 8,104,640  
                 

General Obligations — 44.3%

 

Alta Loma School District, (Election of 2016), 5.00%, 8/1/42

  $ 1,750     $ 2,046,222  

California, 5.00%, 10/1/31

    465       556,438  

California, 5.50%, 11/1/35

    1,300       1,469,689  

Castro Valley Unified School District, (Election of 2016), 5.00%, 8/1/41

    1,000       1,174,590  

Jurupa Unified School District, (Election of 2014), 5.00%, 8/1/37

    1,150       1,358,633  

Lodi Unified School District, (Election of 2016), 5.00%, 8/1/34

    1,365       1,621,647  

Montebello Unified School District, (Election of 2016), 5.00%, 8/1/41

    1,000       1,154,230  

Mountain View Whisman School District, (Election of 2012), 4.00%, 9/1/42(1)

    2,000       2,110,560  

Napa Valley Unified School District,
5.00%, 8/1/41

    1,445       1,697,283  

Palo Alto, (Election of 2008), 5.00%, 8/1/40

    1,850       2,034,778  

San Bernardino Community College District, 4.00%, 8/1/30

    1,510       1,638,501  

San Francisco Bay Area Rapid Transit District, (Election of 2016), Green Bonds, 5.00%, 8/1/47

    1,100       1,304,743  

San Jose-Evergreen Community College District, (Election of 2010), 5.00%, 8/1/35

    410       468,113  

San Mateo Union High School District, (Election of 2006), 5.00%, 9/1/27

    335       398,342  

San Mateo Union High School District, (Election of 2006), 5.00%, 9/1/28

    580       690,867  

Torrance Unified School District, (Election of 2008), 5.00%, 8/1/35

    1,125       1,311,435  

Ventura County Community College District, 5.00%, 8/1/29

    1,000       1,186,040  
                 
    $ 22,222,111  
                 

Hospital — 9.5%

 

California Health Facilities Financing Authority, (Cedars-Sinai Medical Center), 5.00%, 8/15/34

  $ 775     $ 913,508  

California Health Facilities Financing Authority, (City of Hope), 5.00%, 11/15/32

    335       380,590  
 

 

  17   See Notes to Financial Statements.


Eaton Vance

California Municipal Bond Fund II

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security  

Principal
Amount

(000’s omitted)

    Value  

Hospital (continued)

 

California Health Facilities Financing Authority, (City of Hope),
5.00%, 11/15/35

  $ 475     $ 538,902  

California Health Facilities Financing Authority, (Memorial Health Services), 5.00%, 10/1/27

    750       857,722  

California Health Facilities Financing Authority, (St. Joseph Health System), 5.00%, 7/1/33

    600       683,718  

California Health Facilities Financing Authority, (St. Joseph Health System), 5.00%, 7/1/37

    280       316,176  

California Statewide Communities Development Authority, (Cottage Health System), 5.25%, 11/1/30

    1,000       1,095,230  
                 
    $ 4,785,846  
                 

Insured – Electric Utilities — 3.5%

 

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/34

  $ 1,035     $ 1,102,906  

Sacramento Municipal Utility District, (AGM), 5.00%, 8/15/27

    610       631,643  
                 
    $ 1,734,549  
                 

Insured – Escrowed / Prerefunded — 17.7%

 

California Statewide Communities Development Authority, (Sutter Health), (AGM), Prerefunded to 8/15/18,
5.05%, 8/15/38(1)

  $ 1,750     $ 1,814,908  

Clovis Unified School District, (NPFG), Escrowed to Maturity, 0.00%, 8/1/20

    3,130       3,011,123  

Orange County Water District, Certificates of Participation, (NPFG), Prerefunded to 8/15/32, 5.00%, 8/15/34

    395       507,381  

Palm Springs Unified School District, (Election of 2008), (AGC), Prerefunded to 8/1/19, 5.00%, 8/1/33

    1,250       1,342,887  

Sacramento Municipal Utility District, (AGM), Prerefunded to 8/15/18,
5.00%, 8/15/27

    390       404,368  

San Diego County Water Authority, Certificates of Participation, (AGM), Prerefunded to 5/1/18, 5.00%, 5/1/38(1)

    1,750       1,793,190  
                 
    $ 8,873,857  
                 

Insured – General Obligations — 8.8%

 

Coalinga-Huron Joint Unified School District, (Election of 2016), (BAM), 5.00%, 8/1/41

  $ 1,265     $ 1,479,127  

Union Elementary School District, (Election of 1999), (NPFG), 0.00%, 9/1/22

    3,200       2,942,240  
                 
    $ 4,421,367  
                 

Insured – Special Tax Revenue — 4.2%

 

Hesperia Public Financing Authority, (Redevelopment and Housing Projects), (XLCA), 5.00%, 9/1/37

  $ 1,535     $ 1,536,934  

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

    2,675       562,713  
                 
    $ 2,099,647  
                 
Security  

Principal
Amount

(000’s omitted)

    Value  

Insured – Transportation — 5.1%

 

San Joaquin Hills Transportation Corridor Agency, (NPFG), 0.00%, 1/15/27

  $ 3,520     $ 2,570,022  
                 
    $ 2,570,022  
                 

Insured – Water and Sewer — 0.9%

 

Riverside, Water System Revenue, (AGM), 5.00%, 10/1/38

  $ 445     $ 462,800  
                 
    $ 462,800  
                 

Lease Revenue / Certificates of Participation — 1.1%

 

California Public Works Board, 5.00%, 11/1/38

  $ 480     $ 552,058  
                 
    $ 552,058  
                 

Special Tax Revenue — 13.6%

 

Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue, 5.00%, 7/1/31

  $ 1,490     $ 1,533,180  

San Diego County Regional Transportation Commission, Sales Tax Revenue,
5.00%, 4/1/41

    1,750       2,054,063  

San Francisco Bay Area Rapid Transit District, Sales Tax Revenue, 5.00%, 7/1/28

    1,300       1,434,225  

Successor Agency to La Quinta Redevelopment Agency, 5.00%, 9/1/29

    500       586,970  

Successor Agency to San Diego Redevelopment Agency, 5.00%, 9/1/31

    1,000       1,201,460  
                 
    $ 6,809,898  
                 

Transportation — 11.3%

 

Bay Area Toll Authority, Toll Bridge Revenue, (San Francisco Bay Area), Prerefunded to 4/1/19, 5.25%, 4/1/29

  $ 1,190     $ 1,267,422  

Long Beach, Harbor Revenue,
5.00%, 5/15/27

    540       593,957  

Los Angeles Department of Airports, (Los Angeles International Airport),
5.00%, 5/15/35(1)

    1,060       1,161,357  

Los Angeles Harbor Department,
5.00%, 8/1/25

    1,250       1,424,925  

San Francisco City and County Airport Commission, (San Francisco International Airport), 5.00%, 5/1/35

    635       689,648  

San Jose, Airport Revenue, 5.00%, 3/1/20

    500       546,985  
                 
    $ 5,684,294  
                 

Water and Sewer — 14.1%

 

East Bay Municipal Utility District, Green Bonds, 5.00%, 6/1/42

  $ 1,100     $ 1,308,901  

Metropolitan Water District of Southern California, 5.00%, 1/1/39

    1,050       1,101,712  

Rancho California Water District Financing Authority, 5.00%, 8/1/46(1)

    2,000       2,340,640  
 

 

  18   See Notes to Financial Statements.


Eaton Vance

California Municipal Bond Fund II

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security  

Principal
Amount

(000’s omitted)

    Value  

Water and Sewer (continued)

 

San Diego Public Facilities Financing Authority, Sewer Revenue, 5.00%, 5/15/38

  $ 2,000     $ 2,352,940  
                 
    $ 7,104,193  
                 

Total Tax-Exempt Investments — 164.4%
(identified cost $77,225,827)

 

  $ 82,553,899  
                 

Auction Preferred Shares Plus Cumulative Unpaid Dividends — (1.8)%

 

  $ (900,110
                 

Institutional MuniFund Term Preferred Shares, at Liquidation Value
(net of unamortized deferred offering costs) — (49.2)%

 

  $ (24,700,807
                 

Other Assets, Less Liabilities — (13.4)%

 

  $ (6,734,638
                 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 50,218,344  
                 

The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.

The Fund invests primarily in debt securities issued by California municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at September 30, 2017, 24.4% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution or financial guaranty assurance agency ranged from 1.6% to 13.0% of total investments.

 

(1) 

Security represents the municipal bond held by a trust that issues residual interest bonds (see Note 1G).

Abbreviations:

 

AGC     Assured Guaranty Corp.
AGM     Assured Guaranty Municipal Corp.
BAM     Build America Mutual Assurance Co.
NPFG     National Public Finance Guaranty Corp.
XLCA     XL Capital Assurance, Inc.
 

 

  19   See Notes to Financial Statements.


Eaton Vance

Massachusetts Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments

 

 

Tax-Exempt Investments — 147.9%  
   
Security  

Principal

Amount

(000’s omitted)

    Value  

Bond Bank — 5.9%

 

Massachusetts Water Pollution Abatement Trust, 5.25%, 8/1/33

  $ 585     $ 752,527  

Massachusetts Water Pollution Abatement Trust, 5.25%, 8/1/34

    640       825,299  
                 
    $ 1,577,826  
   

Education — 10.9%

 

Massachusetts Development Finance Agency, (Milton Academy), 5.00%, 9/1/35

  $ 750     $ 821,902  

Massachusetts Health and Educational Facilities Authority, (Northeastern University), 5.00%, 10/1/35

    870       953,903  

University of Massachusetts Building Authority, 5.00%, 11/1/39

    1,000       1,139,590  
   
    $ 2,915,395  
   

Escrowed / Prerefunded — 12.2%

 

Boston, Prerefunded to 4/1/21, 4.00%, 4/1/24

  $ 200     $ 219,242  

Massachusetts Bay Transportation Authority, Prerefunded to 7/1/18, 5.25%, 7/1/34

    25       25,830  

Massachusetts Bay Transportation Authority, Prerefunded to 7/1/18, 5.25%, 7/1/34

    70       72,325  

Massachusetts Health and Educational Facilities Authority, (Isabella Stewart Gardner Museum), Prerefunded to 5/1/19, 5.00%, 5/1/25

    320       340,211  

Massachusetts Health and Educational Facilities Authority, (Isabella Stewart Gardner Museum), Prerefunded to 5/1/19, 5.00%, 5/1/29

    490       520,949  

Massachusetts Health and Educational Facilities Authority, (Massachusetts Institute of Technology), Prerefunded to 7/1/18, 5.50%, 7/1/36

    1,000       1,035,480  

Massachusetts Health and Educational Facilities Authority, (Tufts University), Prerefunded to 8/15/18, 5.375%, 8/15/38

    1,025       1,065,395  
   
    $ 3,279,432  
   

General Obligations — 9.4%

 

Danvers, 5.25%, 7/1/36

  $ 565     $ 642,529  

Plymouth, 5.00%, 5/1/26

    250       281,455  

Plymouth, 5.00%, 5/1/31

    225       252,556  

Plymouth, 5.00%, 5/1/32

    205       228,962  

Wayland, 5.00%, 2/1/33

    340       378,036  

Wayland, 5.00%, 2/1/36

    510       565,998  

Winchester, 5.00%, 4/15/36

    160       178,856  
   
    $ 2,528,392  
   
Security  

Principal

Amount

(000’s omitted)

    Value  

Hospital — 21.9%

 

Massachusetts Development Finance Agency, (CareGroup), 5.00%, 7/1/33

  $ 120     $ 136,314  

Massachusetts Development Finance Agency, (Children’s Hospital), 5.00%, 10/1/31

    525       613,641  

Massachusetts Development Finance Agency, (Lahey Health System Obligated Group), 5.00%, 8/15/40

    750       843,322  

Massachusetts Development Finance Agency, (South Shore Hospital), 5.00%, 7/1/41

    1,000       1,105,080  

Massachusetts Health and Educational Facilities Authority, (Dana-Farber Cancer Institute), 5.00%, 12/1/37

    775       808,054  

Massachusetts Health and Educational Facilities Authority, (Partners HealthCare System), 5.00%, 7/1/34

    500       530,695  

Massachusetts Health and Educational Facilities Authority, (Partners HealthCare System), 5.00%, 7/1/39

    750       791,543  

Massachusetts Health and Educational Facilities Authority, (Southcoast Health System), 5.00%, 7/1/29

    1,000       1,047,400  
                 
    $ 5,876,049  
                 

Insured – Education — 12.3%

 

Massachusetts College Building Authority, (XLCA), 5.50%, 5/1/39

  $ 700     $ 954,660  

Massachusetts Development Finance Agency, (Boston University), (XLCA), 6.00%, 5/15/59

    1,105       1,403,416  

Massachusetts Development Finance Agency, (College of the Holy Cross), (AMBAC), 5.25%, 9/1/32(1)

    750       956,993  
                 
    $ 3,315,069  
                 

Insured – Electric Utilities — 4.4%

 

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/23

  $ 1,095     $ 1,175,734  
                 
    $ 1,175,734  
                 

Insured – Escrowed / Prerefunded — 13.7%

 

Massachusetts College Building Authority, (NPFG), Escrowed to Maturity, 0.00%, 5/1/26

  $ 2,900     $ 2,378,203  

Massachusetts Health and Educational Facilities Authority, (Cape Cod Healthcare), (AGC), Prerefunded to 11/15/19, 5.00%, 11/15/25

    220       238,346  

Revere, (AGC), Prerefunded to 4/1/19, 5.00%, 4/1/39

    1,000       1,060,240  
                 
    $ 3,676,789  
                 

Insured – General Obligations — 9.3%

 

Massachusetts, (AMBAC), 5.50%, 8/1/30

  $ 1,900     $ 2,509,121  
                 
    $ 2,509,121  
                 
 

 

  20   See Notes to Financial Statements.


Eaton Vance

Massachusetts Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security  

Principal

Amount

(000’s omitted)

    Value  

Insured – Lease Revenue / Certificates of Participation — 4.7%

 

Puerto Rico Public Finance Corp., (AMBAC), Escrowed to Maturity, 5.50%, 8/1/27

  $ 1,000     $ 1,251,780  
                 
    $ 1,251,780  
                 

Insured – Other Revenue — 2.1%

 

Massachusetts Development Finance Agency, (WGBH Educational Foundation), (AMBAC), 5.75%, 1/1/42

  $ 415     $ 566,388  
                 
    $ 566,388  
                 

Insured – Special Tax Revenue — 12.1%

 

Martha’s Vineyard Land Bank, (BAM), 5.00%, 5/1/25

  $ 555     $ 662,931  

Martha’s Vineyard Land Bank, (BAM), 5.00%, 5/1/28

    805       949,683  

Massachusetts Bay Transportation Authority, Sales Tax Revenue, (NPFG), 5.50%, 7/1/28

    400       529,180  

Massachusetts, Special Obligation, Dedicated Tax Revenue, (NPFG), 5.50%, 1/1/29

    750       960,187  

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

    770       161,977  
                 
    $ 3,263,958  
                 

Insured – Water and Sewer — 4.7%

 

Massachusetts Water Resources Authority, (AGM), 5.25%, 8/1/36

  $ 960     $ 1,274,026  
                 
    $ 1,274,026  
                 

Special Tax Revenue — 9.3%

 

Massachusetts Bay Transportation Authority, 5.00%, 7/1/35

  $ 1,210     $ 1,321,126  

Massachusetts School Building Authority, Dedicated Sales Tax Revenue, 5.00%, 8/15/37

    500       582,645  

Massachusetts, (Rail Enhancement and Accelerated Bridge Programs), 5.00%, 6/1/41

    500       581,645  
                 
    $ 2,485,416  
                 

Transportation — 12.0%

 

Massachusetts Department of Transportation, (Metropolitan Highway System), 5.00%, 1/1/32

  $ 1,000     $ 1,080,100  

Massachusetts Department of Transportation, (Metropolitan Highway System), 5.00%, 1/1/37

    500       536,465  

Massachusetts Port Authority, 5.00%, 7/1/28

    250       275,025  

Massachusetts Port Authority, 5.00%, 7/1/34

    435       474,950  

Massachusetts Port Authority, 5.00%, 7/1/45

    750       859,778  
                 
    $ 3,226,318  
                 
Security  

Principal

Amount

(000’s omitted)

    Value  

Water and Sewer — 3.0%

 

Boston Water & Sewer Commission, Prerefunded to 11/1/19, 5.00%, 11/1/27

  $ 750     $ 811,312  
                 
    $ 811,312  
                 

Total Tax-Exempt Investments — 147.9%
(identified cost $35,598,293)

 

  $ 39,733,005  
                 

Auction Preferred Shares Plus Cumulative Unpaid Dividends — (2.3)%

 

  $ (625,052
                 

Institutional MuniFund Term Preferred Shares, at Liquidation Value
(net of unamortized deferred offering costs) — (48.0)%

 

  $ (12,889,731
                 

Other Assets, Less Liabilities — 2.4%

 

  $ 640,936  
                 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 26,859,158  
                 

The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.

The Fund invests primarily in debt securities issued by Massachusetts municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at September 30, 2017, 42.9% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution or financial guaranty assurance agency ranged from 3.2% to 13.3% of total investments.

 

(1) 

Security represents the municipal bond held by a trust that issues residual interest bonds (see Note 1G).

Abbreviations:

 

AGC     Assured Guaranty Corp.
AGM     Assured Guaranty Municipal Corp.
AMBAC     AMBAC Financial Group, Inc.
BAM     Build America Mutual Assurance Co.
NPFG     National Public Finance Guaranty Corp.
XLCA     XL Capital Assurance, Inc.
 

 

  21   See Notes to Financial Statements.


Eaton Vance

Michigan Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments

 

 

Tax-Exempt Investments — 156.0%  
   
Security  

Principal
Amount

(000’s omitted)

    Value  

Education — 5.9%

 

Michigan Technological University, 4.00%, 10/1/36

  $ 570     $ 591,888  

Wayne State University, 5.00%, 11/15/40

    675       764,566  
                 
  $ 1,356,454  
                 

Electric Utilities — 7.4%

 

Holland, Electric Utility System, 5.00%, 7/1/39

  $ 865     $ 971,776  

Michigan Public Power Agency, 5.00%, 1/1/43

    700       738,878  
                 
  $ 1,710,654  
                 

Escrowed / Prerefunded — 2.4%

 

Comstock Park Public Schools, Prerefunded to 5/1/21, 5.25%, 5/1/33

  $ 60     $ 68,579  

Kalamazoo Hospital Finance Authority, (Bronson Healthcare Group), Prerefunded to 5/15/21, 5.25%, 5/15/33

    430       490,410  
                 
    $ 558,989  
                 

General Obligations — 39.5%

 

Battle Creek, 5.00%, 12/1/41

  $ 750     $ 857,828  

Buchanan Community Schools, 4.00%, 5/1/31

    500       531,525  

Byron Center Public Schools, 5.00%, 5/1/43

    1,000       1,139,620  

Comstock Park Public Schools, 5.125%, 5/1/31

    205       230,539  

Comstock Park Public Schools, 5.25%, 5/1/33

    105       117,755  

East Grand Rapids Public Schools, 5.00%, 5/1/39

    665       749,468  

Grass Lake Community Schools, 5.00%, 5/1/30

    430       503,345  

Lakeview School District, 5.00%, 5/1/40

    550       626,478  

Lansing Community College, 5.00%, 5/1/30

    1,000       1,128,720  

Plymouth-Canton Community Schools, 4.00%, 5/1/33

    750       788,310  

Rockford Public Schools, 5.00%, 5/1/44

    500       566,305  

Walled Lake Consolidated School District, 5.00%, 5/1/34

    635       722,979  

Watervliet Public Schools, 5.00%, 5/1/38

    1,000       1,128,300  
                 
    $ 9,091,172  
                 

Hospital — 21.2%

 

Grand Traverse Hospital, Finance Authority, (Munson Healthcare Obligated Group), 5.375%, 7/1/35

  $ 750     $ 841,402  

Kent Hospital Finance Authority, (Spectrum Health System), 5.00%, 1/15/31

    750       818,520  

Michigan Finance Authority, (McLaren Health Care), 5.00%, 6/1/35

    750       817,988  

Michigan Finance Authority, (Oakwood Obligated Group), 5.00%, 11/1/32

    500       552,575  

Michigan Hospital Finance Authority, (Trinity Health Corp.), 5.00%, 12/1/48

    700       751,394  
Security  

Principal

Amount

(000’s omitted)

    Value  

Hospital (continued)

 

Royal Oak Hospital Finance Authority, (William Beaumont Hospital), 5.00%, 9/1/39

  $ 1,000     $ 1,104,950  
                 
  $ 4,886,829  
                 

Insured – Bond Bank — 3.1%

 

Puerto Rico Municipal Finance Agency, (AGM), 5.00%, 8/1/27

  $ 700     $ 711,452  
                 
    $ 711,452  
                 

Insured – Electric Utilities — 2.9%

 

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/26

  $ 610     $ 656,018  
                 
  $ 656,018  
                 

Insured – Escrowed / Prerefunded — 27.7%

 

Battle Creek, (BAM), Prerefunded to 6/1/18, 5.00%, 6/1/33

  $ 250     $ 256,875  

Ferris State University, (AGC), Prerefunded to 10/1/18, 5.125%, 10/1/33

    435       453,266  

Grand Rapids Water Supply System, (AGC), Prerefunded to 1/1/19, 5.00%, 1/1/29

    1,000       1,050,160  

Michigan Hospital Finance Authority, (St. John Health System), (AMBAC), Escrowed to Maturity, 5.00%, 5/15/28

    1,135       1,217,776  

Michigan House of Representatives, (AMBAC), Escrowed to Maturity, 0.00%, 8/15/23

    2,615       2,339,300  

Royal Oak, (AGC), Prerefunded to 10/1/18, 6.25%, 10/1/28

    1,000       1,053,430  
                 
  $ 6,370,807  
                 

Insured – General Obligations — 21.3%

 

Bay City Brownfield Redevelopment Authority, (BAM), 5.375%, 10/1/38

  $ 500     $ 564,375  

Livonia Public Schools, (AGM), 5.00%, 5/1/43

    750       838,913  

Okemos Public Schools, (NPFG), 0.00%, 5/1/19

    1,330       1,298,040  

South Haven Public Schools, (AGM), 5.00%, 5/1/40

    500       569,590  

South Haven Public Schools, (BAM), 5.00%, 5/1/41

    950       1,083,522  

Westland Tax Increment Finance Authority, (BAM), 5.25%, 4/1/34

    500       559,125  
                 
  $ 4,913,565  
                 

Insured – Special Tax Revenue — 1.6%

 

Puerto Rico Sales Tax Financing Corp., (AGM), 0.00%, 8/1/33

  $ 560     $ 237,743  

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

    615       129,371  
                 
  $ 367,114  
                 

Insured – Water and Sewer — 9.0%

 

Michigan Finance Authority, (Detroit Water & Sewerage Department), (AGM), 5.00%, 7/1/31

  $ 1,500     $ 1,710,690  
 

 

  22   See Notes to Financial Statements.


Eaton Vance

Michigan Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security  

Principal

Amount

(000’s omitted)

    Value  

Insured – Water and Sewer (continued)

 

Puerto Rico Aqueduct and Sewer Authority, (AGC), 5.00%, 7/1/28

  $ 355     $ 361,184  
                 
  $ 2,071,874  
                 

Lease Revenue / Certificates of Participation — 4.6%

 

Michigan Strategic Fund, (Facility for Rare Isotope Beams), 4.00%, 3/1/30

  $ 1,000     $ 1,067,150  
                 
  $ 1,067,150  
                 

Special Tax Revenue — 4.9%

 

Michigan Trunk Line Fund, 5.00%, 11/15/36

  $ 1,000     $ 1,127,270  
                 
  $ 1,127,270  
                 

Water and Sewer — 4.5%

 

Grand Rapids, Sanitary Sewer System, 5.00%, 1/1/28

  $ 605     $ 753,455  

Port Huron, Water Supply System, 5.25%, 10/1/31

    250       278,117  
                 
  $ 1,031,572  
                 

Total Tax-Exempt Investments — 156.0%
(identified cost $33,234,533)

 

  $ 35,920,920  
                 

Auction Preferred Shares Plus Cumulative Unpaid Dividends — (12.2)%

 

  $ (2,800,458
                 

Institutional MuniFund Term Preferred Shares, at Liquidation Value (net of unamortized deferred offering costs) — (45.4)%

 

  $ (10,470,809
                 

Other Assets, Less Liabilities — 1.6%

 

  $ 373,761  
                 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 23,023,414  
                 

The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.

The Fund invests primarily in debt securities issued by Michigan municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at September 30, 2017, 42.0% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution or financial guaranty assurance agency ranged from 5.8% to 11.3% of total investments.

Abbreviations:

 

AGC     Assured Guaranty Corp.
AGM     Assured Guaranty Municipal Corp.
AMBAC     AMBAC Financial Group, Inc.
BAM     Build America Mutual Assurance Co.
NPFG     National Public Finance Guaranty Corp.
 

 

  23   See Notes to Financial Statements.


Eaton Vance

New Jersey Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments

 

 

Tax-Exempt Investments — 161.2%  
   
Security  

Principal

Amount

(000’s omitted)

    Value  

Education — 4.8%

 

New Jersey Educational Facilities Authority, (Montclair State University), 5.00%, 7/1/33

  $ 340     $ 386,182  

New Jersey Educational Facilities Authority, (Montclair State University), 5.00%, 7/1/34

    210       237,695  

New Jersey Educational Facilities Authority, (Ramapo College), 5.00%, 7/1/37

    360       394,517  

New Jersey Educational Facilities Authority, (Ramapo College), 5.00%, 7/1/40

    690       769,653  
                 
    $ 1,788,047  
                 

Escrowed / Prerefunded — 6.5%

 

Monmouth County Improvement Authority, Prerefunded to 1/15/21, 5.00%, 1/15/27

  $ 1,115     $ 1,255,122  

New Jersey Health Care Facilities Financing Authority, (Hospital Asset Transformation Program), Prerefunded to 10/1/18, 5.25%, 10/1/38

    135       140,899  

New Jersey Health Care Facilities Financing Authority, (Palisades Medical Center), Prerefunded to 7/1/23, 5.25%, 7/1/31

    615       741,524  

North Hudson Sewerage Authority, Prerefunded to 6/1/22, 5.00%, 6/1/29

    30       34,889  

Rutgers State University, Prerefunded to 5/1/19, 5.00%, 5/1/39

    250       266,065  
                 
    $ 2,438,499  
                 

General Obligations — 7.9%

 

Edgewater Board of Education, 4.00%, 3/1/40

  $ 1,250     $ 1,325,675  

Jersey City, 4.00%, 11/1/35

    250       267,568  

Monmouth County Improvement Authority, 5.00%, 1/15/27

    260       290,082  

Montclair, 4.00%, 3/1/31

    560       619,707  

Union City, 5.00%, 11/1/23

    375       431,827  
                 
    $ 2,934,859  
                 

Hospital — 14.6%

 

Camden County Improvement Authority, (Cooper Health System), 5.75%, 2/15/42

  $ 250     $ 280,078  

New Jersey Health Care Facilities Financing Authority, (Barnabas Health Obligated Group), 4.25%, 7/1/44

    450       470,956  

New Jersey Health Care Facilities Financing Authority, (Hackensack Meridian Health Obligated Group), 4.00%, 7/1/34

    500       524,285  

New Jersey Health Care Facilities Financing Authority, (Inspira Health Obligated Group), 4.00%, 7/1/47

    500       510,460  

New Jersey Health Care Facilities Financing Authority, (Meridian Health System), 5.00%, 7/1/26

    295       334,306  
Security  

Principal

Amount

(000’s omitted)

    Value  

Hospital (continued)

 

New Jersey Health Care Facilities Financing Authority, (Palisades Medical Center), Prerefunded to 7/1/23, 5.25%, 7/1/31

  $ 135     $ 162,609  

New Jersey Health Care Facilities Financing Authority, (Princeton HealthCare System), 5.00%, 7/1/32

    400       461,180  

New Jersey Health Care Facilities Financing Authority, (Princeton HealthCare System), 5.00%, 7/1/39

    1,085       1,217,196  

New Jersey Health Care Facilities Financing Authority, (Robert Wood Johnson University Hospital), 5.00%, 7/1/34

    700       797,860  

New Jersey Health Care Facilities Financing Authority, (RWJ Barnabas Health Obligated Group), 4.00%, 7/1/35

    675       710,127  
                 
    $ 5,469,057  
                 

Housing — 2.6%

 

New Jersey Housing and Mortgage Finance Agency, (Single Family Housing), 4.375%, 4/1/28

  $ 900     $ 951,696  
                 
    $ 951,696  
                 

Insured – Education — 0.3%

 

New Jersey Educational Facilities Authority, (William Paterson University), (AGC), 4.75%, 7/1/34

  $ 85     $ 87,088  

New Jersey Educational Facilities Authority, (William Paterson University), (AGC), 5.00%, 7/1/38

    20       20,543  
                 
    $ 107,631  
                 

Insured – Electric Utilities — 2.7%

 

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/26

  $ 615     $ 661,395  

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/35

    335       356,993  
                 
    $ 1,018,388  
                 

Insured – Escrowed / Prerefunded — 22.1%

 

Bayonne, (AGM), Prerefunded to 7/1/19, 5.50%, 7/1/39

  $ 1,000     $ 1,079,380  

Delaware Township, Hunterdon County, (AGC), Prerefunded to 10/15/18, 5.00%, 10/15/35

    320       333,731  

Delaware Township, Hunterdon County, (AGC), Prerefunded to 10/15/18, 5.10%, 10/15/36

    340       354,940  

Delaware Township, Hunterdon County, (AGC), Prerefunded to 10/15/18, 5.15%, 10/15/37

    360       376,006  

Delaware Township, Hunterdon County, (AGC), Prerefunded to 10/15/18, 5.20%, 10/15/38

    382       399,182  

Jersey City, (AGM), Prerefunded to 1/15/19, 5.00%, 1/15/29

    1,000       1,052,360  

Lakewood Township, (AGC), Prerefunded to 11/1/18, 5.75%, 11/1/31

    700       736,827  

Monroe Township Board of Education, Middlesex County, (AGC), Prerefunded to 3/1/18, 4.75%, 3/1/34

    1,015       1,031,392  
 

 

  24   See Notes to Financial Statements.


Eaton Vance

New Jersey Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security  

Principal

Amount

(000’s omitted)

    Value  

Insured – Escrowed / Prerefunded (continued)

 

New Jersey Economic Development Authority, (School Facilities Construction), (AGC), Prerefunded to 12/15/18, 5.50%, 12/15/34

  $ 450     $ 474,980  

New Jersey Economic Development Authority, (School Facilities Construction), (AGC), Prerefunded to 12/15/18, 5.50%, 12/15/34

    840       887,258  

New Jersey Educational Facilities Authority, (William Paterson University), (AGC), Prerefunded to 7/1/18, 4.75%, 7/1/34

    1,060       1,090,814  

New Jersey Educational Facilities Authority, (William Paterson University), (AGC), Prerefunded to 7/1/18, 5.00%, 7/1/38

    255       262,890  

New Jersey Health Care Facilities Financing Authority, (Meridian Health System), Series II, (AGC), Prerefunded to 7/1/18, 5.00%, 7/1/38

    170       175,260  
                 
    $ 8,255,020  
                 

Insured – General Obligations — 24.6%

 

Atlantic City, (BAM), 5.00%, 3/1/37

  $ 500     $ 566,610  

Bayonne, (AGM), 0.00%, 7/1/23

    2,415       2,102,789  

Hudson County Improvement Authority, (Harrison Parking), (AGC), 5.25%, 1/1/39

    1,500       1,571,010  

Hudson County Improvement Authority, (Harrison Redevelopment), (NPFG), 0.00%, 12/15/38

    2,000       900,040  

Irvington Township, (AGM), 0.00%, 7/15/26

    5,235       4,054,036  
                 
    $ 9,194,485  
                 

Insured – Hospital — 4.3%

 

New Jersey Health Care Facilities Financing Authority, (Virtua Health), (AGC), 5.50%, 7/1/38

  $ 1,500     $ 1,604,895  
                 
    $ 1,604,895  
                 

Insured – Lease Revenue / Certificates of Participation — 5.1%

 

Essex County Improvement Authority, (NPFG), 5.50%, 10/1/30

  $ 1,000     $ 1,312,770  

New Jersey Economic Development Authority, (School Facilities Construction), (NPFG), 5.50%, 9/1/28

    500       606,310  
                 
    $ 1,919,080  
                 

Insured – Special Tax Revenue — 14.3%

 

Garden State Preservation Trust, (AGM), 0.00%, 11/1/21

  $ 1,000     $ 921,220  

Garden State Preservation Trust, (AGM), 5.75%, 11/1/28

    500       607,065  

New Jersey Economic Development Authority, (Motor Vehicle Surcharges), (BHAC), (NPFG), 5.00%, 7/1/27

    975       977,428  

New Jersey Economic Development Authority, (Motor Vehicle Surcharges), (XLCA), 0.00%, 7/1/26

    2,380       1,787,023  

New Jersey Economic Development Authority, (Motor Vehicle Surcharges), (XLCA), 0.00%, 7/1/27

    1,120       806,097  
Security  

Principal

Amount

(000’s omitted)

    Value  

Insured – Special Tax Revenue (continued)

 

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

  $ 1,105     $ 232,448  
                 
    $ 5,331,281  
                 

Insured – Transportation — 7.7%

 

New Jersey Transportation Trust Fund Authority, (Transportation System), (AMBAC), 0.00%, 12/15/28

  $ 1,200     $ 795,840  

New Jersey Turnpike Authority, (AGM), (BHAC), 5.25%, 1/1/29

    1,500       1,900,770  

South Jersey Transportation Authority, (AGC), 5.50%, 11/1/33

    180       193,378  
                 
    $ 2,889,988  
                 

Insured – Water and Sewer — 11.5%

 

Middlesex County Improvement Authority, (Perth Amboy), (AMBAC), 0.00%, 9/1/24

  $ 4,500     $ 3,731,535  

Passaic Valley Sewerage Commissioners, (NPFG), 2.50%, 12/1/32

    635       564,191  
                 
    $ 4,295,726  
                 

Lease Revenue / Certificates of Participation — 1.3%

 

New Jersey Health Care Facilities Financing Authority, (Hospital Asset Transformation Program), 5.25%, 10/1/38

  $ 465     $ 476,593  
                 
    $ 476,593  
                 

Senior Living / Life Care — 1.9%

 

New Jersey Economic Development Authority, (United Methodist Homes of New Jersey), 5.00%, 7/1/34

  $ 675     $ 714,690  
                 
    $ 714,690  
                 

Student Loan — 2.8%

 

New Jersey Higher Education Student Assistance Authority, 5.625%, 6/1/30

  $ 965     $ 1,026,075  
                 
    $ 1,026,075  
                 

Transportation — 22.9%

 

Delaware River Port Authority of Pennsylvania and New Jersey, 5.00%, 1/1/35

  $ 590     $ 635,206  

Delaware River Port Authority of Pennsylvania and New Jersey, 5.00%, 1/1/40

    210       225,945  

New Jersey Transportation Trust Fund Authority, 5.00%, 6/15/29

    750       767,183  

New Jersey Transportation Trust Fund Authority, (Transportation System), 5.50%, 6/15/31

    1,150       1,261,228  

Port Authority of New York and New Jersey, 5.00%, 10/15/35(1)

    2,675       3,140,396  

Port Authority of New York and New Jersey, 5.00%, 10/15/41(1)

    2,000       2,310,260  

South Jersey Transportation Authority, 5.00%, 11/1/39

    200       217,636  
                 
    $ 8,557,854  
                 
 

 

  25   See Notes to Financial Statements.


Eaton Vance

New Jersey Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security  

Principal

Amount

(000’s omitted)

    Value  

Water and Sewer — 3.3%

 

North Hudson Sewerage Authority, 5.00%, 6/1/29

  $ 695     $ 768,469  

Sussex County Municipal Utilities Authority, 0.00%, 12/1/37

    1,000       478,270  
                 
    $ 1,246,739  
                 

Total Tax-Exempt Investments — 161.2%
(identified cost $55,396,077)

 

  $ 60,220,603  
                 

Auction Preferred Shares Plus Cumulative Unpaid Dividends — (6.0)%

 

  $ (2,225,455
                 

Institutional MuniFund Term Preferred Shares, at Liquidation Value (net of unamortized deferred offering costs) — (46.3)%

 

  $ (17,298,937
                 

Other Assets, Less Liabilities — (8.9)%

 

  $ (3,330,165
   

Net Assets Applicable to Common Shares — 100.0%

 

  $ 37,366,046  
                 

The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.

The Fund invests primarily in debt securities issued by New Jersey municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at September 30, 2017, 57.5% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution or financial guaranty assurance agency ranged from 0.9% to 19.5% of total investments.

 

(1) 

Security represents the municipal bond held by a trust that issues residual interest bonds (see Note 1G).

 

 

Futures Contracts  
Description   Number of
Contracts
     Position    Expiration
Month/Year
     Notional Amount     

Value/Net

Unrealized
Appreciation

 

Interest Rate Futures

 

U.S. Long Treasury Bond     14      Short      Dec-17      $ (2,139,375    $ 35,083  
       $ 35,083  

Abbreviations:

 

AGC     Assured Guaranty Corp.
AGM     Assured Guaranty Municipal Corp.
AMBAC     AMBAC Financial Group, Inc.
BAM     Build America Mutual Assurance Co.
BHAC     Berkshire Hathaway Assurance Corp.
NPFG     National Public Finance Guaranty Corp.
XLCA     XL Capital Assurance, Inc.
 

 

  26   See Notes to Financial Statements.


Eaton Vance

New York Municipal Bond Fund II

September 30, 2017

 

Portfolio of Investments

 

 

Tax-Exempt Investments — 167.2%  
   
Security  

Principal

Amount

(000’s omitted)

    Value  

Bond Bank — 10.3%

 

New York Environmental Facilities Corp., 5.00%, 10/15/39

  $ 750     $ 814,920  

New York Environmental Facilities Corp., Clean Water and Drinking Water, 4.00%, 6/15/46(1)

    2,500       2,633,400  
                 
    $ 3,448,320  
                 

Education — 22.7%

 

Geneva Development Corp., (Hobart and William Smith Colleges), 5.00%, 9/1/33

  $ 110     $ 126,947  

Geneva Development Corp., (Hobart and William Smith Colleges), Series 2012, 5.00%, 9/1/32

    605       689,367  

New York Dormitory Authority, (Columbia University), 5.00%, 10/1/41

    1,275       1,429,875  

New York Dormitory Authority, (Cornell University), 5.00%, 7/1/37(1)

    1,275       1,403,354  

New York Dormitory Authority, (Rockefeller University), 5.00%, 7/1/34

    100       115,409  

New York Dormitory Authority, (Rockefeller University), 5.00%, 7/1/40

    610       649,644  

New York Dormitory Authority, (Skidmore College), 5.00%, 7/1/28

    325       368,163  

New York Dormitory Authority, (The New School), 5.00%, 7/1/46

    1,000       1,138,010  

New York Dormitory Authority, (The New School), Prerefunded to 7/1/20, 5.50%, 7/1/40

    1,000       1,119,080  

Onondaga County Cultural Resources Trust, (Syracuse University), 5.00%, 12/1/38

    515       595,211  
                 
    $ 7,635,060  
                 

Electric Utilities — 4.1%

 

Utility Debt Securitization Authority, 5.00%, 12/15/33

  $ 1,160     $ 1,368,220  
                 
    $ 1,368,220  
                 

Escrowed / Prerefunded — 2.0%

 

Triborough Bridge and Tunnel Authority, Prerefunded to 5/15/18, 5.00%, 11/15/37

  $ 340     $ 348,830  

Triborough Bridge and Tunnel Authority, Prerefunded to 11/15/18, 5.00%, 11/15/38(1)

    300       313,952  
                 
    $ 662,782  
                 

General Obligations — 11.2%

 

Long Beach City School District, 4.50%, 5/1/26

  $ 500     $ 542,020  

New York, 4.00%, 10/1/41(2)

    500       533,545  

New York, 5.00%, 2/15/34(1)

    1,000       1,123,910  

New York City, 5.00%, 8/1/34(1)

    1,350       1,567,256  
                 
    $ 3,766,731  
                 
Security  

Principal

Amount

(000’s omitted)

    Value  

Hospital — 9.6%

 

Dutchess County Local Development Corp., (Health Quest Systems, Inc.), 5.00%, 7/1/33

  $ 745     $ 857,093  

New York Dormitory Authority, (Highland Hospital of Rochester), 5.00%, 7/1/26

    135       145,803  

New York Dormitory Authority, (Highland Hospital of Rochester), 5.20%, 7/1/32

    180       193,424  

New York Dormitory Authority, (Memorial Sloan-Kettering Cancer Center), 4.375%, 7/1/34(1)

    500       529,410  

New York Dormitory Authority, (North Shore-Long Island Jewish Obligated Group), Escrowed to Maturity, 5.00%, 5/1/20

    235       258,495  

Suffolk County Economic Development Corp., (Catholic Health Services of Long Island Obligated Group), 5.00%, 7/1/28

    970       1,062,771  

Suffolk County Economic Development Corp., (Catholic Health Services of Long Island Obligated Group), Prerefunded to 7/1/21, 5.00%, 7/1/28

    165       188,281  
                 
    $ 3,235,277  
                 

Housing — 11.3%

 

New York City Housing Development Corp., 3.55%, 11/1/42

  $ 805     $ 796,789  

New York City Housing Development Corp., 4.05%, 11/1/41

    330       342,210  

New York Housing Finance Agency, (FHLMC), (FNMA), (GNMA), 3.20%, 11/1/46

    805       785,583  

New York Housing Finance Agency, (FHLMC), (FNMA), (GNMA), 4.00%, 11/1/42

    500       518,020  

New York Mortgage Agency, 3.55%, 10/1/33

    495       502,772  

New York Mortgage Agency, 3.90%, 10/1/36

    810       834,389  
                 
    $ 3,779,763  
                 

Industrial Development Revenue — 1.9%

 

New York Liberty Development Corp., (Goldman Sachs Group, Inc.), 5.25%, 10/1/35

  $ 500     $ 641,055  
                 
    $ 641,055  
                 

Insured – Education — 3.7%

 

New York Dormitory Authority, (Barnard College), (NPFG), 5.00%, 7/1/24

  $ 290     $ 290,974  

New York Dormitory Authority, (Pratt Institute), (AGC), Prerefunded to 7/1/19, 5.00%, 7/1/34

    345       369,012  

New York Dormitory Authority, (Pratt Institute), (AGC), Prerefunded to 7/1/19, 5.125%, 7/1/39

    545       584,115  
                 
    $ 1,244,101  
                 

Insured – Electric Utilities — 3.2%

 

Long Island Power Authority, Electric System Revenue, (BHAC), Prerefunded to 5/1/19, 5.50%, 5/1/33

  $ 500     $ 535,785  

Long Island Power Authority, Electric System Revenue, (BHAC), Prerefunded to 5/1/19, 6.00%, 5/1/33

    500       539,720  
                 
    $ 1,075,505  
                 
 

 

  27   See Notes to Financial Statements.


Eaton Vance

New York Municipal Bond Fund II

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security  

Principal

Amount

(000’s omitted)

    Value  

Insured – Escrowed / Prerefunded — 9.5%

 

Brentwood Union Free School District, (AGC), Prerefunded to 11/15/19, 4.75%, 11/15/23

  $ 535     $ 577,543  

Brentwood Union Free School District, (AGC), Prerefunded to 11/15/19, 5.00%, 11/15/24

    560       607,471  

Hoosic Valley Central School District, (AGC), Prerefunded to 6/15/19, 4.00%, 6/15/23

    250       262,690  

Nassau County Sewer and Storm Water Finance Authority, (BHAC), Prerefunded to 11/1/18, 5.375%, 11/1/28

    905       949,354  

Wantagh Union Free School District, (AGC), Prerefunded to 11/15/17, 4.50%, 11/15/19

    185       185,892  

Wantagh Union Free School District, (AGC), Prerefunded to 11/15/17, 4.50%, 11/15/20

    190       190,916  

Wantagh Union Free School District, (AGC), Prerefunded to 11/15/17, 4.75%, 11/15/22

    210       211,077  

Wantagh Union Free School District, (AGC), Prerefunded to 11/15/17, 4.75%, 11/15/23

    220       221,129  
                 
    $ 3,206,072  
                 

Insured – General Obligations — 3.4%

 

Longwood Central School District, Suffolk County, (AGC), 4.15%, 6/1/23

  $ 185     $ 188,626  

Longwood Central School District, Suffolk County, (AGC), 4.25%, 6/1/24

    190       193,882  

Oyster Bay, (AGM), 4.00%, 8/1/28

    725       772,864  
                 
    $ 1,155,372  
                 

Insured – Hospital — 1.5%

 

New York City Health and Hospitals Corp., (AGM), 5.50%, 2/15/20

  $ 500     $ 508,490  
                 
    $ 508,490  
                 

Insured – Other Revenue — 2.9%

 

New York City Transitional Finance Authority, (BHAC), 5.50%, 7/15/38

  $ 950     $ 983,982  
                 
    $ 983,982  
                 

Insured – Special Tax Revenue — 4.3%

 

New York Thruway Authority, Miscellaneous Tax Revenue, (AMBAC), 5.50%, 4/1/20

  $ 510     $ 565,773  

Puerto Rico Infrastructure Financing Authority, (AMBAC), 0.00%, 7/1/35

    1,700       630,615  

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

    1,185       249,277  
                 
    $ 1,445,665  
                 
Security  

Principal

Amount

(000’s omitted)

    Value  

Lease Revenue / Certificates of Participation — 5.2%

 

Hudson Yards Infrastructure Corp., 5.00%, 2/15/42(1)

  $ 500     $ 582,085  

Hudson Yards Infrastructure Corp., 5.00%, 2/15/42

    1,000       1,164,170  
                 
    $ 1,746,255  
                 

Other Revenue — 14.1%

 

Brooklyn Arena Local Development Corp., (Barclays Center), 0.00%, 7/15/31

  $ 1,100     $ 680,768  

Brooklyn Arena Local Development Corp., (Barclays Center), 5.00%, 7/15/42

    500       559,465  

Erie County Fiscal Stability Authority, Series 2017C, 5.00%, 9/1/27

    50       63,044  

Erie County Fiscal Stability Authority, Series 2017D, 5.00%, 9/1/27

    35       44,131  

Erie County Fiscal Stability Authority, Series 2017C, 5.00%, 9/1/28

    80       99,975  

Erie County Fiscal Stability Authority, Series 2017D, 5.00%, 9/1/28

    55       68,733  

New York City Transitional Finance Authority, (Building Aid), 4.00%, 7/15/36

    1,000       1,079,880  

New York Liberty Development Corp., (7 World Trade Center), 5.00%, 9/15/32

    1,865       2,133,504  
                 
    $ 4,729,500  
                 

Special Tax Revenue — 20.4%

 

New York City Transitional Finance Authority, Future Tax Revenue, 5.50%, 11/1/35(1)

  $ 280     $ 314,731  

New York City Transitional Finance Authority, Future Tax Revenue, Prerefunded to 11/1/20, 5.50%, 11/1/35(1)

    220       249,511  

New York Dormitory Authority, Personal Income Tax Revenue, 5.00%, 6/15/31(1)

    2,750       3,223,137  

New York Dormitory Authority, Personal Income Tax Revenue, Series 2011A, 5.00%, 3/15/33

    650       729,723  

New York Dormitory Authority, Sales Tax Revenue, 5.00%, 3/15/34

    1,020       1,167,890  

New York Dormitory Authority, Sales Tax Revenue, 5.00%, 3/15/35

    500       599,140  

New York Thruway Authority, Miscellaneous Tax Revenue, Prerefunded to 4/1/20, 5.00%, 4/1/26

    530       579,221  
                 
    $ 6,863,353  
                 

Senior Living / Life Care — 0.9%

 

Brookhaven Local Development Corp., (Jeffersons Ferry), 5.00%, 11/1/24

  $ 20     $ 23,149  

Brookhaven Local Development Corp., (Jeffersons Ferry), 5.25%, 11/1/25

    50       59,140  
 

 

  28   See Notes to Financial Statements.


Eaton Vance

New York Municipal Bond Fund II

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security  

Principal

Amount

(000’s omitted)

    Value  

Senior Living / Life Care (continued)

 

Brookhaven Local Development Corp., (Jeffersons Ferry), 5.25%, 11/1/26

  $ 55     $ 65,583  

Brookhaven Local Development Corp., (Jeffersons Ferry), 5.25%, 11/1/36

    125       141,900  
                 
    $ 289,772  
                 

Transportation — 19.7%

 

Metropolitan Transportation Authority, 5.00%, 11/15/34

  $ 2,000     $ 2,213,880  

Nassau County Bridge Authority, 5.00%, 10/1/35

    350       382,088  

Nassau County Bridge Authority, 5.00%, 10/1/40

    65       70,860  

New York Thruway Authority, 5.00%, 1/1/37

    1,170       1,320,123  

Niagara Falls Bridge Commission, 5.00%, 10/1/26

    160       190,944  

Port Authority of New York and New Jersey, 5.00%, 12/1/34(1)

    820       951,298  

Port Authority of New York and New Jersey, 5.00%, 11/15/41

    1,095       1,278,215  

Triborough Bridge and Tunnel Authority, 5.00%, 11/15/38(1)

    200       208,668  
                 
    $ 6,616,076  
                 

Water and Sewer — 5.3%

 

New York City Municipal Water Finance Authority, (Water and Sewer System), 5.00%, 6/15/38

  $ 1,500     $ 1,773,240  
                 
    $ 1,773,240  
                 

Total Tax-Exempt Investments — 167.2%
(identified cost $52,847,259)

 

  $ 56,174,591  
                 

Auction Preferred Shares Plus Cumulative Unpaid Dividends — (5.2)%

 

  $ (1,750,286
                 

Institutional MuniFund Term Preferred Shares, at Liquidation Value
(net of unamortized deferred offering costs) — (34.1)%

 

  $ (11,443,512
                 

Other Assets, Less Liabilities — (27.9)%

 

  $ (9,380,056
                 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 33,600,737  
                 

The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.

The Fund invests primarily in debt securities issued by New York municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at September 30, 2017, 17.1% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution or financial guaranty assurance agency ranged from 1.0% to 6.4% of total investments.

 

(1) 

Security represents the municipal bond held by a trust that issues residual interest bonds (see Note 1G).

 

(2) 

When-issued security.

Abbreviations:

 

AGC     Assured Guaranty Corp.
AGM     Assured Guaranty Municipal Corp.
AMBAC     AMBAC Financial Group, Inc.
BHAC     Berkshire Hathaway Assurance Corp.
FHLMC     Federal Home Loan Mortgage Corp.
FNMA     Federal National Mortgage Association
GNMA     Government National Mortgage Association
NPFG     National Public Finance Guaranty Corp.
 

 

  29   See Notes to Financial Statements.


Eaton Vance

Ohio Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments

 

 

Tax-Exempt Investments — 154.3%  
   
Security   Principal
Amount
(000’s omitted)
    Value  

Bond Bank — 4.3%

 

Ohio Economic Development, (Ohio Enterprise Bond Fund), 6.00%, 12/1/34

  $ 700     $ 790,426  

Rickenbacker Port Authority, (OASBO Expanded Asset Pooled Financing Program), 5.375%, 1/1/32

    640       734,118  
   
    $ 1,524,544  
   

Education — 16.4%

 

Bowling Green State University, 5.00%, 6/1/33

  $ 500     $ 585,685  

Miami University, 5.00%, 9/1/41

    500       576,490  

Ohio Higher Educational Facility Commission, (Denison University), 5.00%, 11/1/42

    850       983,059  

Ohio Higher Educational Facility Commission, (Kenyon College), 5.00%, 7/1/44

    200       216,226  

Ohio Higher Educational Facility Commission, (Oberlin College), 5.00%, 10/1/33

    500       571,400  

Ohio Higher Educational Facility Commission, (Oberlin College), 5.00%, 10/1/42

    500       575,920  

Ohio State University, 5.00%, 12/1/30

    455       572,303  

University of Cincinnati, 5.00%, 6/1/45(1)

    1,500       1,725,705  
   
    $ 5,806,788  
   

Electric Utilities — 4.0%

 

American Municipal Power, Inc., (Meldahl Hydroelectric), 4.00%, 2/15/34

  $ 615     $ 645,350  

American Municipal Power, Inc., (Meldahl Hydroelectric), 5.00%, 2/15/33

    180       206,487  

Ohio Air Quality Development Authority, (Buckeye Power, Inc.), 6.00%, 12/1/40

    500       569,405  
   
    $ 1,421,242  
   

Escrowed / Prerefunded — 15.5%

 

Beavercreek City School District, Prerefunded to 6/1/19, 5.00%, 12/1/30

  $ 900     $ 959,796  

Canton Local School District, (School Facilities Construction and Improvement), Prerefunded to 5/1/21, 5.00%, 11/1/43

    1,000       1,134,850  

Franklin County, Prerefunded to 12/1/17, 5.00%, 12/1/27

    500       503,670  

Hamilton County, Sewer System, Prerefunded to 12/1/17, 5.00%, 12/1/32

    250       251,815  

Ohio Higher Educational Facility Commission, (Kenyon College), Prerefunded to 7/1/20, 5.00%, 7/1/44

    105       115,932  

Ohio Higher Educational Facility Commission, (Summa Health System), Prerefunded to 5/15/20, 5.75%, 11/15/40

    290       324,469  

Ohio Turnpike Commission, Prerefunded to 2/15/20, 5.00%, 2/15/31

    1,000       1,091,890  
Security   Principal
Amount
(000’s omitted)
    Value  

Escrowed / Prerefunded (continued)

 

Ohio Water Development Authority, Water Pollution Control Loan Fund, (Water Quality), Prerefunded to 12/1/19, 5.00%, 6/1/30

  $ 1,040     $ 1,129,118  
   
    $ 5,511,540  
   

General Obligations — 3.7%

 

Apollo Career Center Joint Vocational School District, 5.25%, 12/1/33

  $ 270     $ 307,719  

Lakewood City School District, 5.00%, 11/1/39

    400       457,988  

Napoleon Area City School District, (School Facilities Construction and Improvement), 5.00%, 12/1/36

    500       555,015  
   
    $ 1,320,722  
   

Hospital — 16.8%

 

Akron, Bath and Copley Joint Township Hospital District, (Children’s Hospital Medical Center of Akron), 5.00%, 11/15/32

  $ 865     $ 949,398  

Akron, Bath and Copley Joint Township Hospital District, (Children’s Hospital Medical Center of Akron), 5.00%, 11/15/38

    440       493,473  

Hamilton County, (Cincinnati Children’s Hospital Medical Center), 5.00%, 5/15/34

    250       285,977  

Lucas County, (ProMedica Healthcare Obligated Group), 4.00%, 11/15/45

    260       265,975  

Middleburg Heights, (Southwest General Health Center), 5.25%, 8/1/36

    500       540,300  

Middleburg Heights, (Southwest General Health Center), 5.25%, 8/1/41

    755       810,742  

Montgomery County, (Kettering Health Network Obligated Group), 4.00%, 8/1/47

    500       510,755  

Ohio Higher Educational Facility Commission, (Cleveland Clinic Health System), 5.00%, 1/1/32

    500       549,690  

Ohio Higher Educational Facility Commission, (Summa Health System), 5.75%, 11/15/40

    170       182,257  

Ohio Higher Educational Facility Commission, (University Hospitals Health System, Inc.), 5.00%, 1/15/27

    565       639,597  

Ohio Higher Educational Facility Commission, (University Hospitals Health System, Inc.), 5.00%, 1/15/29

    165       185,051  

Ohio, (Cleveland Clinic Health System), 4.00%, 1/1/43

    505       529,689  
   
    $ 5,942,904  
   

Insured – Education — 0.2%

 

Kent State University, (AGC), 5.00%, 5/1/26

  $ 80     $ 84,752  
   
    $ 84,752  
   
 

 

  30   See Notes to Financial Statements.


Eaton Vance

Ohio Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  

Insured – Electric Utilities — 19.0%

 

American Municipal Power-Ohio, Inc., (Prairie State Energy Campus), (AGC), 5.25%, 2/15/33

  $ 40     $ 40,601  

Cleveland, Public Power System Revenue, (NPFG), 0.00%, 11/15/27

    2,750       2,042,700  

Cleveland, Public Power System Revenue, (NPFG), 0.00%, 11/15/38

    1,000       435,810  

Ohio Municipal Electric Generation Agency, (NPFG), 0.00%, 2/15/27

    5,000       3,880,100  

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/26

    305       328,009  
   
    $ 6,727,220  
   

Insured – Escrowed / Prerefunded — 23.3%

 

American Municipal Power-Ohio, Inc., (Prairie State Energy Campus), (AGC), Prerefunded to 2/15/18, 5.25%, 2/15/33

  $ 660     $ 670,923  

Brooklyn City School District, (AGM), Prerefunded to 12/1/20, 5.00%, 12/1/38

    445       499,250  

Kent State University, (AGC), Prerefunded to 5/1/19, 5.00%, 5/1/26

    920       979,221  

Kent State University, (AGC), Prerefunded to 5/1/19, 5.00%, 5/1/29

    330       351,242  

Milford Exempt Village School District, (AGC), Prerefunded to 12/1/18, 5.25%, 12/1/36

    1,000       1,050,640  

Ohio University, (AGM), Prerefunded to 6/1/18, 5.00%, 12/1/33

    500       513,745  

Olentangy, Local School District, (AGC), Prerefunded to 6/1/18, 5.00%, 12/1/36

    1,400       1,438,682  

St. Marys City School District, (AGM), Prerefunded to 6/1/18, 5.00%, 12/1/35

    510       524,091  

St. Marys City School District, (AGM), Prerefunded to 6/1/18, 5.00%, 12/1/35

    150       154,134  

University of Akron, Series 2008B, (AGM), Prerefunded to 1/1/18, 5.00%, 1/1/38

    360       363,866  

University of Akron, Series 2008B, (AGM), Prerefunded to 1/1/18, 5.00%, 1/1/38

    640       646,874  

Youngstown State University, (AGC), Prerefunded to 6/15/19, 5.50%, 12/15/33

    1,000       1,075,850  
   
    $ 8,268,518  
   

Insured – General Obligations — 12.9%

 

Cincinnati City School District, (AGM), (FGIC), 5.25%, 12/1/30

  $ 500     $ 639,505  

Plain School District, (NPFG), 0.00%, 12/1/27

    2,400       1,880,328  

Wapakoneta City School District, (AGM), Prerefunded to 6/1/18, 4.75%, 12/1/35

    2,000       2,051,920  
   
    $ 4,571,753  
   
Security   Principal
Amount
(000’s omitted)
    Value  

Insured – Hospital — 5.1%

 

Lorain County, (Catholic Healthcare Partners), (AGM), 5.00%, 2/1/29(1)

  $ 1,760     $ 1,791,909  
   
    $ 1,791,909  
   

Insured – Special Tax Revenue — 11.8%

 

Hamilton County Sales Tax, (AMBAC), 0.00%, 12/1/23

  $ 1,245     $ 1,077,809  

Hamilton County Sales Tax, (AMBAC), 0.00%, 12/1/24

    3,665       3,065,149  

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

    250       52,590  
   
    $ 4,195,548  
   

Insured – Transportation — 4.5%

 

Cleveland, Airport System Revenue, (AGM), 5.00%, 1/1/30

  $ 480     $ 529,978  

Puerto Rico Highway and Transportation Authority, (AGC), 5.25%, 7/1/41

    500       583,380  

Puerto Rico Highway and Transportation Authority, (AGM), 5.00%, 7/1/32

    475       479,517  
   
    $ 1,592,875  
   

Insured – Water and Sewer — 1.5%

 

Puerto Rico Aqueduct and Sewer Authority, (AGC), 5.00%, 7/1/28

  $ 535     $ 544,320  
   
    $ 544,320  
   

Other Revenue — 1.1%

 

Summit County Port Authority, 5.00%, 12/1/31

  $ 350     $ 394,366  
   
    $ 394,366  
   

Senior Living / Life Care — 4.0%

 

Franklin County, (Friendship Village of Dublin), 5.00%, 11/15/44

  $ 525     $ 562,637  

Hamilton County, (Life Enriching Communities), 5.00%, 1/1/32

    375       403,447  

Lorain County Port Authority, (Kendal at Oberlin), 5.00%, 11/15/30

    190       213,454  

Warren County, (Otterbein Homes Obligated Group), 5.75%, 7/1/33

    220       252,754  
   
    $ 1,432,292  
   

Special Tax Revenue — 1.6%

 

Cleveland, Income Tax Revenue, (Parks and Recreation Facilities Improvements), 5.00%, 10/1/35

  $ 500     $ 568,425  
   
    $ 568,425  
   
 

 

  31   See Notes to Financial Statements.


Eaton Vance

Ohio Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  

Transportation — 3.0%

 

Ohio Turnpike and Infrastructure Commission, 0.00%, 2/15/43

  $ 310     $ 115,745  

Ohio Turnpike and Infrastructure Commission, 5.00%, 2/15/31

    785       951,789  
   
    $ 1,067,534  
   

Water and Sewer — 5.6%

 

Northeast Ohio Regional Sewer District, 4.00%, 11/15/33(1)

  $ 1,000     $ 1,051,930  

Northeast Ohio Regional Sewer District, Prerefunded to 5/15/23, 5.00%, 11/15/43

    500       568,040  

Toledo, Sewerage System Revenue, 5.00%, 11/15/28

    300       346,392  
   
    $ 1,966,362  
   

Total Tax-Exempt Investments — 154.3%
(identified cost $49,757,797)

 

  $ 54,733,614  
   

Auction Preferred Shares Plus Cumulative Unpaid Dividends — (6.3)%

 

  $ (2,250,521
   

Institutional MuniFund Term Preferred Shares, at Liquidation Value (net of unamortized deferred offering costs) — (41.4)%

 

  $ (14,682,481
   

Other Assets, Less Liabilities — (6.6)%

 

  $ (2,333,899
   

Net Assets Applicable to Common Shares — 100.0%

 

  $ 35,466,713  
   

The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.

The Fund invests primarily in debt securities issued by Ohio municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at September 30, 2017, 50.7% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution or financial guaranty assurance agency ranged from 1.2% to 15.7% of total investments.

 

(1) 

Security represents the municipal bond held by a trust that issues residual interest bonds (see Note 1G).

Abbreviations:

 

AGC     Assured Guaranty Corp.
AGM     Assured Guaranty Municipal Corp.
AMBAC     AMBAC Financial Group, Inc.
FGIC     Financial Guaranty Insurance Company
NPFG     National Public Finance Guaranty Corp.
 

 

  32   See Notes to Financial Statements.


Eaton Vance

Pennsylvania Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments

 

 

Tax-Exempt Investments — 152.0%  
   
Security   Principal
Amount
(000’s omitted)
    Value  

Education — 31.2%

 

Bucks County Industrial Development Authority, (George School), 5.00%, 9/15/41

  $ 390     $ 434,803  

Delaware County Authority, (Villanova University), 5.00%, 8/1/35

    750       868,238  

General Authority of Southcentral Pennsylvania, (York College of Pennsylvania), 5.50%, 11/1/31

    1,500       1,695,210  

Lehigh County General Purpose Authority, (Muhlenberg College), 5.00%, 2/1/31

    755       890,636  

Northampton County General Purpose Authority, (Lafayette College), 5.00%, 11/1/32

    750       873,450  

Northampton County General Purpose Authority, (Moravian College), 5.00%, 10/1/24

    95       110,191  

Northampton County General Purpose Authority, (Moravian College), 5.00%, 10/1/25

    135       157,009  

Northampton County General Purpose Authority, (Moravian College), 5.00%, 10/1/26

    360       421,330  

Northampton County General Purpose Authority, (Moravian College), 5.00%, 10/1/27

    185       215,159  

Northampton County General Purpose Authority, (Moravian College), 5.00%, 10/1/30

    270       308,275  

Northampton County General Purpose Authority, (Moravian College), 5.00%, 10/1/31

    230       261,206  

Northampton County General Purpose Authority, (Moravian College), 5.00%, 10/1/40

    610       672,232  

Northeastern Pennsylvania Hospital and Education Authority, (Wilkes University), 5.00%, 3/1/26

    670       779,820  

Pennsylvania Higher Educational Facilities Authority, (Drexel University), 5.00%, 5/1/34

    530       607,995  

Pennsylvania Higher Educational Facilities Authority, (Saint Joseph’s University), 4.25%, 11/1/34

    1,740       1,787,606  

Pennsylvania Higher Educational Facilities Authority, (Saint Joseph’s University), 5.00%, 11/1/40

    440       480,260  

Pennsylvania State University, 5.00%, 9/1/34

    750       884,647  

State Public School Building Authority, (Northampton County Area Community College), 5.50%, 3/1/31

    750       840,195  

Swarthmore Borough Authority, (Swarthmore College), 5.00%, 9/15/38

    250       293,020  

Washington County Industrial Development Authority, (Washington and Jefferson College), 5.25%, 11/1/30

    575       623,024  
   
    $ 13,204,306  
   

Escrowed / Prerefunded — 8.9%

 

Allegheny County Higher Education Building Authority, (Duquesne University), Prerefunded to 3/1/21, 5.50%, 3/1/31

  $ 1,050     $ 1,203,227  
Security   Principal
Amount
(000’s omitted)
    Value  

Escrowed / Prerefunded (continued)

 

Chester County Health and Education Facilities Authority, (Jefferson Health System), Prerefunded to 5/15/20, 5.00%, 5/15/40

  $ 555     $ 611,593  

Pennsylvania Higher Educational Facilities Authority, (Thomas Jefferson University), Prerefunded to 3/1/20, 5.00%, 3/1/40

    925       1,010,137  

Pennsylvania Turnpike Commission, Prerefunded to 12/1/20, 5.35%, 12/1/30

    175       198,249  

Philadelphia, Water and Wastewater Revenue, Prerefunded to 1/1/19, 5.25%, 1/1/32

    715       753,274  
   
    $ 3,776,480  
   

General Obligations — 13.3%

 

Chester County, 4.00%, 7/15/29

  $ 250     $ 284,253  

Delaware Valley Regional Finance Authority, 5.75%, 7/1/32

    1,000       1,276,210  

Pennsylvania, 4.00%, 4/1/29(1)

    3,000       3,222,540  

West York Area School District, 5.00%, 4/1/33

    750       848,767  
   
    $ 5,631,770  
   

Hospital — 10.6%

 

Chester County Health and Education Facilities Authority, (Jefferson Health System), 5.00%, 5/15/40

  $ 195     $ 211,832  

Franklin County Industrial Development Authority, (The Chambersburg Hospital), 5.375%, 7/1/42

    1,000       1,079,940  

Lehigh County General Purpose Authority, (Lehigh Valley Health Network), 4.00%, 7/1/33

    500       519,960  

Monroeville Finance Authority, (UPMC Obligated Group), 5.00%, 2/15/42

    500       552,695  

Northampton County General Purpose Authority, (Saint Luke’s Hospital), 5.50%, 8/15/33

    250       271,490  

Pennsylvania Higher Educational Facilities Authority, (UPMC Health System), 5.00%, 5/15/31

    675       722,628  

Philadelphia Hospitals and Higher Education Facilities Authority, (The Children’s Hospital of Philadelphia), 5.00%, 7/1/32

    750       841,110  

South Fork Municipal Authority, (Conemaugh Health System), Prerefunded to 7/1/20, 5.50%, 7/1/29

    250       279,625  
   
    $ 4,479,280  
   

Housing — 1.7%

 

East Hempfield Township Industrial Development Authority, (Student Services, Inc.), 5.00%, 7/1/39

  $ 175     $ 187,829  

Pennsylvania Housing Finance Agency, SFMR, 4.00%, 10/1/38

    500       513,470  
   
    $ 701,299  
   

Insured – Education — 4.2%

 

State Public School Building Authority, (Delaware County Community College), (AGM), Prerefunded to 4/1/18, 5.00%, 10/1/27

  $ 500     $ 510,290  
 

 

  33   See Notes to Financial Statements.


Eaton Vance

Pennsylvania Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  

Insured – Education (continued)

 

State Public School Building Authority, (Delaware County Community College), (AGM), Prerefunded to 4/1/18, 5.00%, 10/1/29

  $ 375     $ 382,718  

State Public School Building Authority, (Delaware County Community College), (AGM), Prerefunded to 4/1/18, 5.00%, 10/1/32

    875       893,007  
   
    $ 1,786,015  
   

Insured – Electric Utilities — 3.1%

 

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/34

  $ 490     $ 522,149  

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/35

    750       799,237  
   
    $ 1,321,386  
   

Insured – Escrowed / Prerefunded — 22.6%

 

Bethlehem Area School District, (AGM), Prerefunded to 1/15/20, 5.25%, 1/15/25

  $ 1,250     $ 1,368,350  

Centennial School District, (AGM), Prerefunded to 12/15/18, 5.25%, 12/15/37

    660       694,676  

Central Greene School District, (AGM), Prerefunded to 2/15/18, 5.00%, 2/15/35

    1,000       1,015,510  

Erie Sewer Authority, Series A, (AMBAC), Escrowed to Maturity, 0.00%, 12/1/25

    180       149,215  

Lehigh County General Purpose Authority, (Lehigh Valley Health Network), (AGM), Prerefunded to 7/1/18, 5.00%, 7/1/35

    1,620       1,685,594  

Lycoming County Authority, (Pennsylvania College of Technology), (AGC), Prerefunded to 4/1/18, 5.50%, 10/1/37

    500       511,550  

Pennsylvania Higher Educational Facilities Authority, (Drexel University), (NPFG), Prerefunded to 11/1/17, 5.00%, 5/1/37

    1,530       1,535,661  

Pennsylvania Higher Educational Facilities Authority, (University of the Sciences in Philadelphia), (AGC), Prerefunded to 11/1/18, 5.00%, 11/1/37

    500       521,935  

Reading School District, (AGM), Prerefunded to 9/1/18, 5.00%, 3/1/35

    1,500       1,556,385  

State Public School Building Authority, (Harrisburg School District), (AGC), Prerefunded to 5/15/19, 5.00%, 11/15/33

    85       90,461  

State Public School Building Authority, (Harrisburg School District), (AGC), Prerefunded to 5/15/19, 5.00%, 11/15/33

    85       90,490  

State Public School Building Authority, (Harrisburg School District), (AGC), Prerefunded to 5/15/19, 5.00%, 11/15/33

    330       351,203  
   
    $ 9,571,030  
   

Insured – General Obligations — 15.5%

 

Erie School District, (AMBAC), 0.00%, 9/1/30

  $ 1,000     $ 608,350  

Laurel Highlands School District, (AGM), 5.00%, 2/1/37

    750       849,945  

Luzerne County, (AGM), 5.00%, 11/15/29

    250       281,928  

McKeesport School District, (NPFG), 0.00%, 10/1/21

    2,555       2,333,660  
Security   Principal
Amount
(000’s omitted)
    Value  

Insured – General Obligations (continued)

 

Scranton School District, (AGM), 5.00%, 7/15/38

  $ 1,000     $ 1,009,580  

Shaler Area School District, (XLCA), 0.00%, 9/1/33

    2,550       1,458,447  
   
    $ 6,541,910  
   

Insured – Hospital — 0.7%

 

Allegheny County Hospital Development Authority, (UPMC Health System), (NPFG), 6.00%, 7/1/24

  $ 250     $ 313,340  
   
    $ 313,340  
   

Insured – Industrial Development Revenue — 2.5%

 

Pennsylvania Economic Development Financing Authority, (Aqua Pennsylvania, Inc.), (BHAC), 5.00%, 10/1/39(1)

  $ 1,000     $ 1,067,920  
   
    $ 1,067,920  
   

Insured – Lease Revenue / Certificates of Participation — 4.1%

 

Commonwealth Financing Authority, (AGC), 5.00%, 6/1/31

  $ 500     $ 527,185  

Philadelphia Authority for Industrial Development, (One Benjamin Franklin), (AGM), 4.75%, 2/15/27

    1,215       1,228,693  
   
    $ 1,755,878  
   

Insured – Special Tax Revenue — 3.2%

 

Pittsburgh and Allegheny County Sports & Exhibition Authority, Sales Tax Revenue, (AGM), 5.00%, 2/1/31

  $ 1,000     $ 1,088,540  

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

    1,295       272,416  
   
    $ 1,360,956  
   

Insured – Transportation — 6.5%

 

Philadelphia, Airport Revenue, (AGC), 5.375%, 6/15/29

  $ 295     $ 296,062  

Puerto Rico Highway and Transportation Authority, (AGC), 5.25%, 7/1/41

    2,100       2,450,196  
   
    $ 2,746,258  
   

Insured – Water and Sewer — 10.7%

 

Bucks County Water and Sewer Authority, (AGM), 5.00%, 12/1/35

  $ 500     $ 549,405  

Erie Sewer Authority, Series A, (AMBAC), 0.00%, 12/1/25

    1,250       944,525  

Erie Sewer Authority, Series B, (AMBAC), 0.00%, 12/1/25

    2,155       1,628,361  

Erie Sewer Authority, Series B, (AMBAC), 0.00%, 12/1/26

    1,920       1,387,642  
   
    $ 4,509,933  
   

Special Tax Revenue — 4.1%

 

Allegheny County Port Authority, 5.75%, 3/1/29

  $ 1,500     $ 1,718,010  
   
    $ 1,718,010  
   
 

 

  34   See Notes to Financial Statements.


Eaton Vance

Pennsylvania Municipal Bond Fund

September 30, 2017

 

Portfolio of Investments — continued

 

 

 

Security   Principal
Amount
(000’s omitted)
    Value  

Transportation — 7.8%

 

Delaware River Port Authority of Pennsylvania and New Jersey, 5.00%, 1/1/35

  $ 465     $ 500,628  

Delaware River Port Authority of Pennsylvania and New Jersey, 5.00%, 1/1/40

    730       785,429  

Pennsylvania Turnpike Commission, 5.25%, 12/1/31

    1,000       1,105,350  

Pennsylvania Turnpike Commission, 5.35%, 12/1/30

    135       148,334  

Pennsylvania Turnpike Commission, Prerefunded to 12/1/20, 5.35%, 12/1/30

    190       215,050  

Philadelphia, Airport Revenue, 5.25%, 6/15/27

    500       551,650  
   
    $ 3,306,441  
   

Water and Sewer — 1.3%

 

Philadelphia, Water and Wastewater Revenue, 5.00%, 1/1/36

  $ 500     $ 549,525  
   
    $ 549,525  
   

Total Tax-Exempt Investments — 152.0%
(identified cost $59,786,222)

 

  $ 64,341,737  
   

Auction Preferred Shares Plus Cumulative Unpaid Dividends — (3.0)%

 

  $ (1,275,107
   

Institutional MuniFund Term Preferred Shares, at Liquidation Value
(net of unamortized deferred offering costs) — (48.1)%

 

  $ (20,364,691
   

Other Assets, Less Liabilities — (0.9)%

 

  $ (369,209
   

Net Assets Applicable to Common Shares — 100.0%

 

  $ 42,332,730  
   

The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.

The Fund invests primarily in debt securities issued by Pennsylvania municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at September 30, 2017, 48.1% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution or financial guaranty assurance agency ranged from 1.7% to 20.4% of total investments.

 

(1) 

Security represents the municipal bond held by a trust that issues residual interest bonds (see Note 1G).

 

 

Futures Contracts  
Description   Number of
Contracts
     Position      Expiration
Month/Year
     Notional Amount      Value/Net
Unrealized
Appreciation
 

Interest Rate Futures

             
U.S. Long Treasury Bond     20        Short        Dec-17      $ (3,056,250    $ 50,119  
       $ 50,119  

Abbreviations:

 

AGC     Assured Guaranty Corp.
AGM     Assured Guaranty Municipal Corp.
AMBAC     AMBAC Financial Group, Inc.
BHAC     Berkshire Hathaway Assurance Corp.
NPFG     National Public Finance Guaranty Corp.
SFMR     Single Family Mortgage Revenue
XLCA     XL Capital Assurance, Inc.
 

 

  35   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Statements of Assets and Liabilities

 

 

    September 30, 2017  
Assets   Municipal Fund II     California Fund II     Massachusetts Fund     Michigan Fund  

Investments —

       

Identified cost

  $ 202,627,348     $ 77,225,827     $ 35,598,293     $ 33,234,533  

Unrealized appreciation

    16,756,336       5,328,072       4,134,712       2,686,387  

Investments, at value

  $ 219,383,684     $ 82,553,899     $ 39,733,005     $ 35,920,920  

Cash

  $     $     $ 776,207     $  

Interest receivable

    2,839,054       819,461       456,608       489,078  

Total assets

  $ 222,222,738     $ 83,373,360     $ 40,965,820     $ 36,409,998  
Liabilities  

Payable for floating rate notes issued (net of unamortized deferred debt issuance costs of $25,722, $8,082, $0 and $0, respectively)

  $ 41,169,278     $ 7,241,918     $ 500,000     $  

Institutional MuniFund Term Preferred Shares, at liquidation value (net of unamortized deferred offering costs of $151,920, $99,193, $60,269 and $54,191, respectively)

    39,798,080       24,700,807       12,889,731       10,470,809  

Due to custodian

    246,921       164,094             31,935  

Payable to affiliate:

       

Investment adviser fee

    100,806       37,835       18,655       16,527  

Interest expense and fees payable

    187,919       23,200       743        

Accrued expenses

    128,728       87,052       72,481       66,855  

Total liabilities

  $ 81,631,732     $ 32,254,906     $ 13,481,610     $ 10,586,126  

Auction preferred shares at liquidation value plus cumulative unpaid dividends

  $ 4,750,932     $ 900,110     $ 625,052     $ 2,800,458  

Net assets applicable to common shares

  $ 135,840,074     $ 50,218,344     $ 26,859,158     $ 23,023,414  
Sources of Net Assets  

Common shares, $0.01 par value, unlimited number of shares authorized

  $ 100,134     $ 38,864     $ 17,685     $ 15,001  

Additional paid-in capital

    140,783,878       54,598,746       25,277,829       21,265,907  

Accumulated net realized loss

    (21,981,960     (10,026,024     (2,664,282     (1,044,805

Accumulated undistributed net investment income

    181,686       278,686       93,214       100,924  

Net unrealized appreciation

    16,756,336       5,328,072       4,134,712       2,686,387  

Net assets applicable to common shares

  $ 135,840,074     $ 50,218,344     $ 26,859,158     $ 23,023,414  

Auction Preferred Shares Issued and Outstanding

(Liquidation preference of $25,000 per share)

    190 (1)      36       25       112  
Institutional MuniFund Term Preferred Shares Issued and Outstanding (Liquidation preference of $25,000 per share)     1,598       992       518       421  
Common Shares Outstanding     10,013,381       3,886,356       1,768,514       1,500,065  
Net Asset Value Per Common Share  

Net assets applicable to common shares ÷ common shares issued and outstanding

  $ 13.57     $ 12.92     $ 15.19     $ 15.35  

 

(1) 

Comprised of 62 Series A shares and 128 Series B shares.

 

  36   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Statements of Assets and Liabilities — continued

 

 

    September 30, 2017  
Assets   New Jersey Fund     New York Fund II     Ohio Fund     Pennsylvania Fund  

Investments —

       

Identified cost

  $ 55,396,077     $ 52,847,259     $ 49,757,797     $ 59,786,222  

Unrealized appreciation

    4,824,526       3,327,332       4,975,817       4,555,515  

Investments, at value

  $ 60,220,603     $ 56,174,591     $ 54,733,614     $ 64,341,737  

Cash

  $     $ 128,995     $ 531,553     $ 1,452,707  

Deposits for financial futures contracts

    42,000                   60,000  

Interest receivable

    600,192       671,894       569,720       754,746  

Receivable for investments sold

    25,000                   890,000  

Total assets

  $ 60,887,795     $ 56,975,480     $ 55,834,887     $ 67,499,190  
Liabilities  

Payable for floating rate notes issued

  $ 3,740,000     $ 9,500,000     $ 3,320,000     $ 3,390,000  

Institutional MuniFund Term Preferred Shares, at liquidation value (net of unamortized deferred offering costs of $76,063, $56,488, $67,519 and $85,309, respectively)

    17,298,937       11,443,512       14,682,481       20,364,691  

Payable for when-issued securities

          535,310              

Payable for variation margin on open financial futures contracts

    438                   625  

Due to custodian

    127,307                    

Payable to affiliate:

       

Investment adviser fee

    27,230       25,509       25,374       30,578  

Interest expense and fees payable

    24,909       36,521       14,090       24,825  

Accrued expenses

    77,473       83,605       75,708       80,634  

Total liabilities

  $ 21,296,294     $ 21,624,457     $ 18,117,653     $ 23,891,353  

Auction preferred shares at liquidation value plus cumulative unpaid dividends

  $ 2,225,455     $ 1,750,286     $ 2,250,521     $ 1,275,107  

Net assets applicable to common shares

  $ 37,366,046     $ 33,600,737     $ 35,466,713     $ 42,332,730  
Sources of Net Assets  

Common shares, $0.01 par value, unlimited number of shares authorized

  $ 25,792     $ 25,565     $ 25,379     $ 29,600  

Additional paid-in capital

    37,006,258       35,388,694       34,462,282       42,735,788  

Accumulated net realized loss

    (4,709,309     (5,252,074     (4,284,851     (5,282,065

Accumulated undistributed net investment income

    183,696       111,220       288,086       243,773  

Net unrealized appreciation

    4,859,609       3,327,332       4,975,817       4,605,634  

Net assets applicable to common shares

  $ 37,366,046     $ 33,600,737     $ 35,466,713     $ 42,332,730  
Auction Preferred Shares Issued and Outstanding
(Liquidation preference of $25,000 per share)
    89       70       90       51  
Institutional MuniFund Term Preferred Shares Issued and Outstanding (Liquidation preference of $25,000 per share)     695       460       590       818  
Common Shares Outstanding     2,579,166       2,556,510       2,537,940       2,960,040  
Net Asset Value Per Common Share  

Net assets applicable to common shares ÷ common shares issued
and outstanding

  $ 14.49     $ 13.14     $ 13.97     $ 14.30  

 

  37   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Statements of Operations

 

 

    Year Ended September 30, 2017  
Investment Income   Municipal Fund II     California Fund II     Massachusetts Fund     Michigan Fund  

Interest

  $ 8,954,360     $ 3,303,113     $ 1,640,630     $ 1,493,239  

Total investment income

  $ 8,954,360     $ 3,303,113     $ 1,640,630     $ 1,493,239  
Expenses  

Investment adviser fee

  $ 1,224,438     $ 457,225     $ 227,504     $ 199,143  

Trustees’ fees and expenses

    13,090       5,203       2,840       2,546  

Custodian fee

    63,546       35,553       24,291       23,167  

Transfer and dividend disbursing agent fees

    18,499       18,719       19,014       18,434  

Legal and accounting services

    64,691       43,912       37,011       32,307  

Printing and postage

    19,484       9,413       7,099       7,314  

Interest expense and fees

    1,406,846       554,143       272,518       215,330  

Auction preferred shares service fee

    3,759       711       496       2,217  

Rating agency fees

    29,000       29,000       29,000       29,000  

Miscellaneous

    61,314       43,139       37,333       36,661  

Total expenses

  $ 2,904,667     $ 1,197,018     $ 657,106     $ 566,119  

Net investment income

  $ 6,049,693     $ 2,106,095     $ 983,524     $ 927,120  
Realized and Unrealized Gain (Loss)  

Net realized gain (loss) —

       

Investment transactions

  $ (525,985   $ (62,806   $ 129,659     $ 62,626  

Financial futures contracts

    319,055       226,528       107,081        

Net realized gain (loss)

  $ (206,930   $ 163,722     $ 236,740     $ 62,626  

Change in unrealized appreciation (depreciation) —

       

Investments

  $ (5,995,930   $ (2,382,895   $ (1,783,176   $ (868,239

Financial futures contracts

    (82,096     (44,310     (25,478      

Net change in unrealized appreciation (depreciation)

  $ (6,078,026   $ (2,427,205   $ (1,808,654   $ (868,239

Net realized and unrealized loss

  $ (6,284,956   $ (2,263,483   $ (1,571,914   $ (805,613

Distributions to auction preferred shareholders

                               

From net investment income

  $ (60,020   $ (11,462   $ (7,904   $ (35,681

Net increase (decrease) in net assets from operations

  $ (295,283   $ (168,850   $ (596,294   $ 85,826  

 

  38   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Statements of Operations — continued

 

 

    Year Ended September 30, 2017  
Investment Income   New Jersey Fund     New York Fund II     Ohio Fund     Pennsylvania Fund  

Interest

  $ 2,508,133     $ 2,254,912     $ 2,342,862     $ 2,864,838  

Total investment income

  $ 2,508,133     $ 2,254,912     $ 2,342,862     $ 2,864,838  
Expenses  

Investment adviser fee

  $ 328,097     $ 308,009     $ 303,646     $ 370,582  

Trustees’ fees and expenses

    3,869       3,664       3,623       4,307  

Custodian fee

    29,099       30,010       27,577       29,267  

Transfer and dividend disbursing agent fees

    18,469       18,439       18,460       18,684  

Legal and accounting services

    36,366       46,029       38,465       40,354  

Printing and postage

    8,524       8,019       8,152       10,267  

Interest expense and fees

    398,927       352,959       334,846       453,401  

Auction preferred shares service fee

    1,761       1,386       1,783       1,010  

Rating agency fees

    29,000       29,000       29,000       29,000  

Miscellaneous

    40,656       40,380       41,022       42,114  

Total expenses

  $ 894,768     $ 837,895     $ 806,574     $ 998,986  

Net investment income

  $ 1,613,365     $ 1,417,017     $ 1,536,288     $ 1,865,852  
Realized and Unrealized Gain (Loss)  

Net realized gain (loss) —

       

Investment transactions

  $ 607,619     $ (488,424   $ 488,387     $ 233,355  

Financial futures contracts

    146,970       178,469             209,957  

Net realized gain (loss)

  $ 754,589     $ (309,955   $ 488,387     $ 443,312  

Change in unrealized appreciation (depreciation) —

       

Investments

  $ (2,737,090   $ (1,245,631   $ (2,465,330   $ (2,327,579

Financial futures contracts

    (4,549     (42,463           (6,499

Net change in unrealized appreciation (depreciation)

  $ (2,741,639   $ (1,288,094   $ (2,465,330   $ (2,334,078

Net realized and unrealized loss

  $ (1,987,050   $ (1,598,049   $ (1,976,943   $ (1,890,766

Distributions to auction preferred shareholders

                               

From net investment income

  $ (28,329   $ (22,300   $ (28,411   $ (16,122

Net decrease in net assets from operations

  $ (402,014   $ (203,332   $ (469,066   $ (41,036

 

  39   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Statements of Changes in Net Assets

 

 

    Year Ended September 30, 2017  
Increase (Decrease) in Net Assets   Municipal Fund II     California Fund II     Massachusetts Fund     Michigan Fund  

From operations —

       

Net investment income

  $ 6,049,693     $ 2,106,095     $ 983,524     $ 927,120  

Net realized gain (loss)

    (206,930     163,722       236,740       62,626  

Net change in unrealized appreciation (depreciation)

    (6,078,026     (2,427,205     (1,808,654     (868,239

Distributions to auction preferred shareholders —

       

From net investment income

    (60,020     (11,462     (7,904     (35,681

Net increase (decrease) in net assets from operations

  $ (295,283   $ (168,850   $ (596,294   $ 85,826  

Distributions to common shareholders —

       

From net investment income

  $ (5,920,912   $ (2,061,323   $ (984,001   $ (897,189

Total distributions to common shareholders

  $ (5,920,912   $ (2,061,323   $ (984,001   $ (897,189

Net decrease in net assets

  $ (6,216,195   $ (2,230,173   $ (1,580,295   $ (811,363
Net Assets Applicable to Common Shares  

At beginning of year

  $ 142,056,269     $ 52,448,517     $ 28,439,453     $ 23,834,777  

At end of year

  $ 135,840,074     $ 50,218,344     $ 26,859,158     $ 23,023,414  
Accumulated undistributed net investment income
included in net assets applicable to common shares
 

At end of year

  $ 181,686     $ 278,686     $ 93,214     $ 100,924  

 

  40   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Statements of Changes in Net Assets — continued

 

 

    Year Ended September 30, 2017  
Increase (Decrease) in Net Assets   New Jersey Fund     New York Fund II     Ohio Fund     Pennsylvania Fund  

From operations —

       

Net investment income

  $ 1,613,365     $ 1,417,017     $ 1,536,288     $ 1,865,852  

Net realized gain (loss)

    754,589       (309,955     488,387       443,312  

Net change in unrealized appreciation (depreciation)

    (2,741,639     (1,288,094     (2,465,330     (2,334,078

Distributions to auction preferred shareholders —

       

From net investment income

    (28,329     (22,300     (28,411     (16,122

Net decrease in net assets from operations

  $ (402,014   $ (203,332   $ (469,066   $ (41,036

Distributions to common shareholders —

       

From net investment income

  $ (1,617,137   $ (1,436,247   $ (1,486,971   $ (1,880,809

Total distributions to common shareholders

  $ (1,617,137   $ (1,436,247   $ (1,486,971   $ (1,880,809

Capital share transactions —

       

Reinvestment of distributions to common shareholders

  $     $     $ 2,404     $  

Net increase in net assets from capital share transactions

  $     $     $ 2,404     $  

Net decrease in net assets

  $ (2,019,151   $ (1,639,579   $ (1,953,633   $ (1,921,845
Net Assets Applicable to Common Shares  

At beginning of year

  $ 39,385,197     $ 35,240,316     $ 37,420,346     $ 44,254,575  

At end of year

  $ 37,366,046     $ 33,600,737     $ 35,466,713     $ 42,332,730  
Accumulated undistributed net investment income
included in net assets applicable to common shares
 

At end of year

  $ 183,696     $ 111,220     $ 288,086     $ 243,773  

 

  41   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Statements of Changes in Net Assets — continued

 

 

    Year Ended September 30, 2016  
Increase (Decrease) in Net Assets   Municipal Fund II     California Fund II     Massachusetts Fund     Michigan Fund  

From operations —

       

Net investment income

  $ 6,670,230     $ 2,373,303     $ 1,095,314     $ 1,023,537  

Net realized gain (loss)

    (238,885     31,073       (177,504      

Net change in unrealized appreciation (depreciation)

    3,883,663       506,291       1,421,273       1,005,211  

Distributions to auction preferred shareholders —

       

From net investment income

    (34,297     (11,631     (6,274     (17,098

Discount on redemption and repurchase of auction preferred shares

    1,797,750       1,116,000       582,750       473,625  

Net increase in net assets from operations

  $ 12,078,461     $ 4,015,036     $ 2,915,559     $ 2,485,275  

Distributions to common shareholders —

       

From net investment income

  $ (6,729,703   $ (2,489,124   $ (1,163,327   $ (1,058,966

Total distributions to common shareholders

  $ (6,729,703   $ (2,489,124   $ (1,163,327   $ (1,058,966

Capital share transactions —

       

Reinvestment of distributions to common shareholders

  $     $ 8,111     $     $  

Net increase in net assets from capital share transactions

  $     $ 8,111     $     $  

Net increase in net assets

  $ 5,348,758     $ 1,534,023     $ 1,752,232     $ 1,426,309  
Net Assets Applicable to Common Shares  

At beginning of year

  $ 136,707,511     $ 50,914,494     $ 26,687,221     $ 22,408,468  

At end of year

  $ 142,056,269     $ 52,448,517     $ 28,439,453     $ 23,834,777  
Accumulated undistributed net investment income
included in net assets applicable to common shares
 

At end of year

  $ 33,485     $ 179,680     $ 72,374     $ 75,068  

 

  42   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Statements of Changes in Net Assets — continued

 

 

    Year Ended September 30, 2016  
Increase (Decrease) in Net Assets   New Jersey Fund     New York Fund II     Ohio Fund     Pennsylvania Fund  

From operations —

       

Net investment income

  $ 1,741,730     $ 1,565,546     $ 1,664,272     $ 2,051,733  

Net realized gain (loss)

    (190,085     94,317       120,419       (337,929

Net change in unrealized appreciation (depreciation)

    2,189,782       527,952       1,395,985       2,175,874  

Distributions to auction preferred shareholders —

       

From net investment income

    (15,805     (12,081     (14,782     (11,340

Discount on redemption and repurchase of auction preferred shares

    781,875       517,500       663,750       920,250  

Net increase in net assets from operations

  $ 4,507,497     $ 2,693,234     $ 3,829,644     $ 4,798,588  

Distributions to common shareholders —

       

From net investment income

  $ (1,839,344   $ (1,692,030   $ (1,696,824   $ (2,228,821

Total distributions to common shareholders

  $ (1,839,344   $ (1,692,030   $ (1,696,824   $ (2,228,821

Capital share transactions —

       

Reinvestment of distributions to common shareholders

  $ 2,749     $ 6,563     $ 11,488     $  

Net increase in net assets from capital share transactions

  $ 2,749     $ 6,563     $ 11,488     $  

Net increase in net assets

  $ 2,670,902     $ 1,007,767     $ 2,144,308     $ 2,569,767  
Net Assets Applicable to Common Shares  

At beginning of year

  $ 36,714,295     $ 34,232,549     $ 35,276,038     $ 41,684,808  

At end of year

  $ 39,385,197     $ 35,240,316     $ 37,420,346     $ 44,254,575  
Accumulated undistributed net investment income
included in net assets applicable to common shares
 

At end of year

  $ 159,669     $ 127,886     $ 98,235     $ 191,681  

 

  43   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Statements of Cash Flows

 

 

    Year Ended September 30, 2017  
Cash Flows From Operating Activities   Municipal Fund II     California Fund II     Massachusetts Fund     Michigan Fund  

Net increase (decrease) in net assets from operations

  $ (295,283   $ (168,850   $ (596,294   $ 85,826  

Distributions to auction preferred shareholders

    60,020       11,462       7,904       35,681  

Net increase (decrease) in net assets from operations excluding distributions to auction preferred shareholders

  $ (235,263   $ (157,388   $ (588,390   $ 121,507  

Adjustments to reconcile net increase (decrease) in net assets from operations to net cash provided by operating activities:

       

Investments purchased

    (19,806,730     (22,607,805     (2,248,831     (4,615,268

Investments sold

    17,970,990       20,938,660       2,863,836       4,285,793  

Net amortization/accretion of premium (discount)

    284,832       (119,640     49,007       (64,673

Amortization of deferred debt issuance costs

    1,610       548              

Amortization of deferred offering costs on Institutional MuniFund Term Preferred Shares

    87,406       57,050       34,650       31,164  

Decrease in deposits for financial futures contracts

    118,000       82,000       37,000        

Decrease (increase) in interest receivable

    8,929       (38,888     1,484       (25,069

Decrease in receivable for variation margin on open financial futures contracts

    42,594       28,359       13,219        

Decrease in payable to affiliate for investment adviser fee

    (3,051     (92     (986     (297

Increase (decrease) in interest expense and fees payable

    38,834       2,769       (1,232      

Increase in accrued expenses

    8,818       13,254       14,563       15,340  

Net change in unrealized (appreciation) depreciation from investments

    5,995,930       2,382,895       1,783,176       868,239  

Net realized (gain) loss from investments

    525,985       62,806       (129,659     (62,626

Net cash provided by operating activities

  $ 5,038,884     $ 644,528     $ 1,827,837     $ 554,110  
Cash Flows From Financing Activities          

Distributions paid to common shareholders, net of reinvestments

  $ (5,920,912   $ (2,061,323   $ (984,001   $ (897,189

Cash distributions paid to auction preferred shareholders

    (59,779     (11,419     (7,875     (35,536

Proceeds from secured borrowings

          1,600,000              

Repayment of secured borrowings

    (1,400,000           (870,000      

Increase (decrease) in due to custodian

    246,921       (171,786           31,935  

Net cash used in financing activities

  $ (7,133,770   $ (644,528   $ (1,861,876   $ (900,790

Net decrease in cash

  $ (2,094,886   $     $ (34,039   $ (346,680

Cash at beginning of year

  $ 2,094,886     $     $ 810,246     $ 346,680  

Cash at end of year

  $     $     $ 776,207     $  
Supplemental disclosure of cash flow information:          

Cash paid for interest and fees on floating rate notes issued and Institutional MuniFund Term Preferred Shares

  $ 1,278,996     $ 493,776     $ 239,100     $ 184,166  

 

  44   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Statements of Cash Flows — continued

 

 

    Year Ended September 30, 2017  
Cash Flows From Operating Activities   New Jersey Fund     New York Fund II     Ohio Fund     Pennsylvania Fund  

Net decrease in net assets from operations

  $ (402,014   $ (203,332   $ (469,066   $ (41,036

Distributions to auction preferred shareholders

    28,329       22,300       28,411       16,122  

Net decrease in net assets from operations excluding distributions to auction preferred shareholders

  $ (373,685   $ (181,032   $ (440,655   $ (24,914

Adjustments to reconcile net decrease in net assets from operations to net cash provided by (used in) operating activities:

       

Investments purchased

    (6,694,859     (14,927,895     (6,422,048     (2,424,547

Investments sold

    6,805,463       16,069,919       5,236,724       3,683,411  

Net amortization/accretion of premium (discount)

    (485,919     40,505       (444,326     (232,315

Amortization of deferred offering costs on Institutional MuniFund Term Preferred Shares

    43,746       32,477       38,833       49,060  

Decrease in deposits for financial futures contracts

    16,000       61,000             21,000  

Decrease (increase) in interest receivable

    6,495       (19,965     (7,314     39,317  

Decrease in receivable for variation margin on open financial futures contracts

    20,563       22,031             29,375  

Decrease in receivable from the transfer agent

                2,419        

Increase in payable for variation margin on open financial futures contracts

    438                   625  

Decrease in payable to affiliate for investment adviser fee

    (775     (614     (210     (806

Increase in interest expense and fees payable

    10,706       5,325       7,461       7,895  

Increase in accrued expenses

    12,179       15,560       14,115       13,790  

Net change in unrealized (appreciation) depreciation from investments

    2,737,090       1,245,631       2,465,330       2,327,579  

Net realized (gain) loss from investments

    (607,619     488,424       (488,387     (233,355

Net cash provided by (used in) operating activities

  $ 1,489,823     $ 2,851,366     $ (38,058   $ 3,256,115  
Cash Flows From Financing Activities  

Distributions paid to common shareholders, net of reinvestments

  $ (1,617,137   $ (1,436,247   $ (1,484,567   $ (1,880,809

Cash distributions paid to auction preferred shareholders

    (28,206     (22,210     (28,294     (16,065

Proceeds from secured borrowings

          400,000       1,200,000        

Repayment of secured borrowings

          (2,000,000            

Increase in due to custodian

    127,307                    

Net cash used in financing activities

  $ (1,518,036   $ (3,058,457   $ (312,861   $ (1,896,874

Net increase (decrease) in cash

  $ (28,213   $ (207,091   $ (350,919   $ 1,359,241  

Cash at beginning of year

  $ 28,213     $ 336,086     $ 882,472     $ 93,466  

Cash at end of year

  $     $ 128,995     $ 531,553     $ 1,452,707  
Supplemental disclosure of cash flow information:  

Noncash financing activities not included herein consist of:

       

Reinvestment of dividends and distributions

  $     $     $ 2,404     $  

Cash paid for interest and fees on floating rate notes issued and Institutional MuniFund Term Preferred Shares

  $ 344,475     $ 315,157     $ 288,553     $ 396,446  

 

  45   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights

 

Selected data for a common share outstanding during the periods stated

 

    Municipal Fund II  
    Year Ended September 30,  
    2017     2016     2015     2014     2013  

Net asset value — Beginning of year (Common shares)

  $ 14.190     $ 13.650     $ 13.620     $ 11.840     $ 13.370  
Income (Loss) From Operations                                        

Net investment income(1)

  $ 0.604     $ 0.666     $ 0.739     $ 0.757     $ 0.752  

Net realized and unrealized gain (loss)

    (0.627     0.369       0.046       1.785       (1.516

Distributions to APS shareholders(1)

         

From net investment income

    (0.006     (0.003     (0.006     (0.005     (0.009

Discount on redemption and repurchase of APS(1)

          0.180                    

Total income (loss) from operations

  $ (0.029   $ 1.212     $ 0.779     $ 2.537     $ (0.773
Less Distributions to Common Shareholders                                        

From net investment income

  $ (0.591   $ (0.672   $ (0.749   $ (0.757   $ (0.757

Total distributions to common shareholders

  $ (0.591   $ (0.672   $ (0.749   $ (0.757   $ (0.757

Net asset value — End of year (Common shares)

  $ 13.570     $ 14.190     $ 13.650     $ 13.620     $ 11.840  

Market value — End of year (Common shares)

  $ 12.550     $ 13.500     $ 12.550     $ 12.570     $ 11.200  

Total Investment Return on Net Asset Value(2)

    0.25     9.27 %(3)      6.30     22.61     (5.83 )% 

Total Investment Return on Market Value(2)

    (2.55 )%      13.07     5.89     19.62     (14.20 )% 

 

  46   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    Municipal Fund II  
    Year Ended September 30,  
Ratios/Supplemental Data   2017     2016     2015     2014     2013  

Net assets applicable to common shares, end of year (000’s omitted)

  $ 135,840     $ 142,056     $ 136,708     $ 136,398     $ 118,569  

Ratios (as a percentage of average daily net assets applicable to common shares):(4)

         

Expenses excluding interest and fees(5)

    1.10     1.17     1.11     1.20     1.23

Interest and fee expense(6)

    1.04     0.58     0.19     0.21     0.23

Total expenses(5)

    2.14     1.75     1.30     1.41     1.46

Net investment income

    4.46     4.71     5.37     6.01     5.83

Portfolio Turnover

    8     7     6     10     7

Senior Securities:

         

Total preferred shares outstanding(7)

    1,788       1,788       1,788       1,788       1,788  

Asset coverage per preferred share(8)

  $ 100,974     $ 104,450     $ 101,459     $ 101,285     $ 91,314  

Involuntary liquidation preference per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

Approximate market value per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

 

(1) 

Computed using average common shares outstanding.

 

(2) 

Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan.

 

(3) 

The total return based on net asset value reflects the impact of the tender and repurchase by the Fund of a portion of its APS at 95.5% of the per share liquidation preference. Absent this transaction, the total return based on net asset value would have been 7.89%.

 

(4) 

Ratios do not reflect the effect of dividend payments to APS shareholders.

 

(5) 

Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian.

 

(6) 

Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1G) and iMTP Shares issued to redeem a portion of the Fund’s APS (see Note 3). Effective October 1, 2016, the ratio includes amortization of deferred offering costs for iMTP Shares which for the year ended September 30, 2016, were included in the ratio of expenses excluding interest and fees.

 

(7) 

Preferred shares represent iMTP Shares and APS as of September 30, 2017 and 2016 and APS as of September 30, 2015, 2014 and 2013.

 

(8) 

Calculated by subtracting the Fund’s total liabilities (not including the preferred shares) from the Fund’s total assets, and dividing the result by the number of preferred shares outstanding.

 

(9) 

Plus accumulated and unpaid dividends.

 

Ratios based on net assets applicable to common shares plus preferred shares (iMTP Shares and APS, as applicable) are presented below. Ratios do not reflect the effect of dividend payments to APS shareholders and exclude the effect of custody fee credits, if any.

 

    Year Ended September 30,  
    2017      2016      2015      2014      2013  

Expenses excluding interest and fees

    0.83      0.89      0.84      0.89      0.91

Interest and fee expense

    0.78      0.44      0.14      0.15      0.17

Total expenses

    1.61      1.33      0.98      1.04      1.08

Net investment income

    3.35      3.58      4.06      4.44      4.33

 

APS     Auction Preferred Shares
iMTP Shares     Institutional MuniFund Term Preferred Shares

 

  47   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    California Fund II  
    Year Ended September 30,  
    2017     2016     2015     2014     2013  

Net asset value — Beginning of year (Common shares)

  $ 13.500     $ 13.100     $ 13.280     $ 11.770     $ 13.410  
Income (Loss) From Operations                                        

Net investment income(1)

  $ 0.542     $ 0.611     $ 0.754     $ 0.769     $ 0.756  

Net realized and unrealized gain (loss)

    (0.589     0.146       (0.194     1.479       (1.632

Distributions to APS shareholders(1)

         

From net investment income

    (0.003     (0.003     (0.009     (0.007     (0.013

Discount on redemption and repurchase of APS(1)

          0.287                    

Total income (loss) from operations

  $ (0.050   $ 1.041     $ 0.551     $ 2.241     $ (0.889
Less Distributions to Common Shareholders                                        

From net investment income

  $ (0.530   $ (0.641   $ (0.731   $ (0.731   $ (0.751

Total distributions to common shareholders

  $ (0.530   $ (0.641   $ (0.731   $ (0.731   $ (0.751

Net asset value — End of year (Common shares)

  $ 12.920     $ 13.500     $ 13.100     $ 13.280     $ 11.770  

Market value — End of year (Common shares)

  $ 12.070     $ 13.020     $ 12.540     $ 12.080     $ 11.260  

Total Investment Return on Net Asset Value(2)

    0.04     8.18 %(3)      4.47     20.12     (6.75 )% 

Total Investment Return on Market Value(2)

    (3.09 )%      8.99     9.94     14.22     (12.29 )% 

 

  48   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    California Fund II  
    Year Ended September 30,  
Ratios/Supplemental Data   2017     2016     2015     2014     2013  

Net assets applicable to common shares, end of year (000’s omitted)

  $ 50,218     $ 52,449     $ 50,914     $ 51,581     $ 45,732  

Ratios (as a percentage of average daily net assets applicable to common shares):(4)

         

Expenses excluding interest and fees(5)

    1.28     1.36     1.27     1.32     1.34

Interest and fee expense(6)

    1.10     0.54     0.11     0.12     0.13

Total expenses(5)

    2.38     1.90     1.38     1.44     1.47

Net investment income

    4.19     4.53     5.69     6.15     5.84

Portfolio Turnover

    24     14     0     5     7

Senior Securities:

         

Total preferred shares outstanding(7)

    1,028       1,028       1,028       1,028       1,028  

Asset coverage per preferred share(8)

  $ 73,851     $ 76,020     $ 74,528     $ 75,176     $ 69,487  

Involuntary liquidation preference per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

Approximate market value per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

 

(1) 

Computed using average common shares outstanding.

 

(2) 

Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan.

 

(3) 

The total return based on net asset value reflects the impact of the tender and repurchase by the Fund of a portion of its APS at 95.5% of the per share liquidation preference. Absent this transaction, the total return based on net asset value would have been 5.88%.

 

(4) 

Ratios do not reflect the effect of dividend payments to APS shareholders.

 

(5) 

Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian.

 

(6) 

Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1G) and iMTP Shares issued to redeem a portion of the Fund’s APS (see Note 3). Effective October 1, 2016, the ratio includes amortization of deferred offering costs for iMTP Shares which for the year ended September 30, 2016, were included in the ratio of expenses excluding interest and fees.

 

(7) 

Preferred shares represent iMTP Shares and APS as of September 30, 2017 and 2016 and APS as of September 30, 2015, 2014 and 2013.

 

(8) 

Calculated by subtracting the Fund’s total liabilities (not including the preferred shares) from the Fund’s total assets, and dividing the result by the number of preferred shares outstanding.

 

(9) 

Plus accumulated and unpaid dividends.

 

Ratios based on net assets applicable to common shares plus preferred shares (iMTP Shares and APS, as applicable) are presented below. Ratios do not reflect the effect of dividend payments to APS shareholders and exclude the effect of custody fee credits, if any.

 

    Year Ended September 30,  
    2017      2016      2015      2014      2013  

Expenses excluding interest and fees

    0.85      0.91      0.85      0.86      0.88

Interest and fee expense

    0.73      0.36      0.07      0.08      0.09

Total expenses

    1.58      1.27      0.92      0.94      0.97

Net investment income

    2.77      3.04      3.80      4.02      3.86

 

APS     Auction Preferred Shares
iMTP Shares     Institutional MuniFund Term Preferred Shares

 

  49   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    Massachusetts Fund  
    Year Ended September 30,  
    2017     2016     2015     2014     2013  

Net asset value — Beginning of year (Common shares)

  $ 16.080     $ 15.090     $ 15.190     $ 13.530     $ 15.920  
Income (Loss) From Operations                                        

Net investment income(1)

  $ 0.556     $ 0.619     $ 0.775     $ 0.788     $ 0.801  

Net realized and unrealized gain (loss)

    (0.886     0.703       (0.105     1.641       (2.389

Distributions to APS shareholders(1)

         

From net investment income

    (0.004     (0.004     (0.010     (0.009     (0.015

Discount on redemption and repurchase of APS(1)

          0.330                    

Total income (loss) from operations

  $ (0.334   $ 1.648     $ 0.660     $ 2.420     $ (1.603
Less Distributions to Common Shareholders                                        

From net investment income

  $ (0.556   $ (0.658   $ (0.760   $ (0.760   $ (0.787

Total distributions to common shareholders

  $ (0.556   $ (0.658   $ (0.760   $ (0.760   $ (0.787

Net asset value — End of year (Common shares)

  $ 15.190     $ 16.080     $ 15.090     $ 15.190     $ 13.530  

Market value — End of year (Common shares)

  $ 13.740     $ 15.280     $ 13.650     $ 14.560     $ 12.510  

Total Investment Return on Net Asset Value(2)

    (1.68 )%      11.32 %(3)      4.76     18.82     (10.28 )% 

Total Investment Return on Market Value(2)

    (6.40 )%      16.93     (1.14 )%      23.19     (20.01 )% 

 

  50   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    Massachusetts Fund  
    Year Ended September 30,  
Ratios/Supplemental Data   2017     2016     2015     2014     2013  

Net assets applicable to common shares, end of year (000’s omitted)

  $ 26,859     $ 28,439     $ 26,687     $ 26,870     $ 23,925  

Ratios (as a percentage of average daily net assets applicable to common shares):(4)

         

Expenses excluding interest and fees(5)

    1.43     1.53     1.41     1.44     1.45

Interest and fee expense(6)

    1.01     0.53     0.08     0.08     0.09

Total expenses(5)

    2.44     2.06     1.49     1.52     1.54

Net investment income

    3.66     3.90     5.11     5.50     5.31

Portfolio Turnover

    6     2     7     1     3

Senior Securities:

         

Total preferred shares outstanding(7)

    543       543       543       543       543  

Asset coverage per preferred share(8)

  $ 74,464     $ 77,375     $ 74,148     $ 74,484     $ 69,061  

Involuntary liquidation preference per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

Approximate market value per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

 

(1) 

Computed using average common shares outstanding.

 

(2) 

Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan.

 

(3) 

The total return based on net asset value reflects the impact of the tender and repurchase by the Fund of a portion of its APS at 95.5% of the per share liquidation preference. Absent this transaction, the total return based on net asset value would have been 9.04%.

 

(4) 

Ratios do not reflect the effect of dividend payments to APS shareholders.

 

(5) 

Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian.

 

(6) 

Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1G) and iMTP Shares issued to redeem a portion of the Fund’s APS (see Note 3). Effective October 1, 2016, the ratio includes amortization of deferred offering costs for iMTP Shares which for the year ended September 30, 2016, were included in the ratio of expenses excluding interest and fees.

 

(7) 

Preferred shares represent iMTP Shares and APS as of September 30, 2017 and 2016 and APS as of September 30, 2015, 2014 and 2013.

 

(8) 

Calculated by subtracting the Fund’s total liabilities (not including the preferred shares) from the Fund’s total assets, and dividing the result by the number of preferred shares outstanding.

 

(9) 

Plus accumulated and unpaid dividends.

 

Ratios based on net assets applicable to common shares plus preferred shares (iMTP Shares and APS, as applicable) are presented below. Ratios do not reflect the effect of dividend payments to APS shareholders and exclude the effect of custody fee credits, if any.

 

       Year Ended September 30,  
       2017      2016      2015      2014      2013  

Expenses excluding interest and fees

       0.95      1.03      0.94      0.94      0.96

Interest and fee expense

       0.67      0.36      0.05      0.05      0.06

Total expenses

       1.62      1.39      0.99      0.99      1.02

Net investment income

       2.43      2.63      3.39      3.58      3.52

 

APS     Auction Preferred Shares
iMTP Shares     Institutional MuniFund Term Preferred Shares

 

  51   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    Michigan Fund  
    Year Ended September 30,  
    2017     2016     2015     2014     2013  

Net asset value — Beginning of year (Common shares)

  $ 15.890     $ 14.940     $ 14.860     $ 13.160     $ 15.030  
Income (Loss) From Operations                                        

Net investment income(1)

  $ 0.618     $ 0.682     $ 0.793     $ 0.784     $ 0.789  

Net realized and unrealized gain (loss)

    (0.536     0.669       0.070       1.660       (1.859

Distributions to APS shareholders(1)

         

From net investment income

    (0.024     (0.011     (0.011     (0.010     (0.017

Discount on redemption and repurchase of APS(1)

          0.316                    

Total income (loss) from operations

  $ 0.058     $ 1.656     $ 0.852     $ 2.434     $ (1.087
Less Distributions to Common Shareholders                                        

From net investment income

  $ (0.598   $ (0.706   $ (0.789   $ (0.734   $ (0.783

Total distributions to common shareholders

  $ (0.598   $ (0.706   $ (0.789   $ (0.734   $ (0.783

Anti-dilutive effect of share repurchase program (see Note 7)(1)

  $     $     $ 0.017     $     $  

Net asset value — End of year (Common shares)

  $ 15.350     $ 15.890     $ 14.940     $ 14.860     $ 13.160  

Market value — End of year (Common shares)

  $ 13.810     $ 15.060     $ 13.020     $ 13.010     $ 11.790  

Total Investment Return on Net Asset Value(2)

    0.91     11.59 %(3)      6.63     19.57     (7.29 )% 

Total Investment Return on Market Value(2)

    (4.21 )%      21.36     6.11     16.89     (21.98 )% 

 

  52   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    Michigan Fund  
    Year Ended September 30,  
Ratios/Supplemental Data   2017     2016     2015     2014     2013  

Net assets applicable to common shares, end of year (000’s omitted)

  $ 23,023     $ 23,835     $ 22,408     $ 22,492     $ 19,931  

Ratios (as a percentage of average daily net assets applicable to common shares):(4)

         

Expenses excluding interest and fees(5)

    1.54     1.65     1.48     1.54     1.55

Interest and fee expense(6)

    0.94     0.47                  

Total expenses(5)

    2.48     2.12     1.48     1.54     1.55

Net investment income

    4.05     4.36     5.30     5.60     5.46

Portfolio Turnover

    12           3     30     29

Senior Securities:

         

Total preferred shares outstanding(7)

    533       533       533       533       533  

Asset coverage per preferred share(8)

  $ 68,197     $ 69,719     $ 67,042     $ 67,199     $ 62,395  

Involuntary liquidation preference per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

Approximate market value per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

 

(1) 

Computed using average common shares outstanding.

 

(2) 

Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan.

 

(3) 

The total return based on net asset value reflects the impact of the tender and repurchase by the Fund of a portion of its APS at 95.5% of the per share liquidation preference. Absent this transaction, the total return based on net asset value would have been 9.37%.

 

(4) 

Ratios do not reflect the effect of dividend payments to APS shareholders.

 

(5) 

Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian.

 

(6) 

Interest and fee expense relates to iMTP Shares issued to redeem a portion of the Fund’s APS (see Note 3). Effective October 1, 2016, the ratio includes amortization of deferred offering costs for iMTP Shares which for the year ended September 30, 2016, were included in the ratio of expenses excluding interest and fees.

 

(7) 

Preferred shares represent iMTP Shares and APS as of September 30, 2017 and 2016 and APS as of September 30, 2015, 2014 and 2013.

 

(8) 

Calculated by subtracting the Fund’s total liabilities (not including the preferred shares) from the Fund’s total assets, and dividing the result by the number of preferred shares outstanding.

 

(9) 

Plus accumulated and unpaid dividends.

 

Ratios based on net assets applicable to common shares plus preferred shares (iMTP Shares and APS, as applicable) are presented below. Ratios do not reflect the effect of dividend payments to APS shareholders and exclude the effect of custody fee credits, if any.

 

    Year Ended September 30,  
    2017      2016      2015      2014      2013  

Expenses excluding interest and fees

    0.97      1.06      0.93      0.95      0.96

Interest and fee expense

    0.59      0.30                     

Total expenses

    1.56      1.36      0.93      0.95      0.96

Net investment income

    2.56      2.78      3.33      3.44      3.39

 

APS     Auction Preferred Shares
iMTP Shares     Institutional MuniFund Term Preferred Shares

 

  53   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    New Jersey Fund  
    Year Ended September 30,  
    2017     2016     2015     2014     2013  

Net asset value — Beginning of year (Common shares)

  $ 15.270     $ 14.240     $ 14.480     $ 13.120     $ 14.640  
Income (Loss) From Operations                                        

Net investment income(1)

  $ 0.626     $ 0.675     $ 0.760     $ 0.755     $ 0.759  

Net realized and unrealized gain (loss)

    (0.768     0.771       (0.261     1.318       (1.537

Distributions to APS shareholders(1)

         

From net investment income

    (0.011     (0.006     (0.010     (0.009     (0.015

Discount on redemption and repurchase of APS(1)

          0.303                    

Total income (loss) from operations

  $ (0.153   $ 1.743     $ 0.489     $ 2.064     $ (0.793
Less Distributions to Common Shareholders                                        

From net investment income

  $ (0.627   $ (0.713   $ (0.750   $ (0.704   $ (0.727

Total distributions to common shareholders

  $ (0.627   $ (0.713   $ (0.750   $ (0.704   $ (0.727

Anti-dilutive effect of share repurchase program (see Note 7)(1)

  $     $     $ 0.021     $     $  

Net asset value — End of year (Common shares)

  $ 14.490     $ 15.270     $ 14.240     $ 14.480     $ 13.120  

Market value — End of year (Common shares)

  $ 13.020     $ 14.710     $ 13.050     $ 12.540     $ 11.730  

Total Investment Return on Net Asset Value(2)

    (0.44 )%      12.67 %(3)      4.11     16.77     (5.48 )% 

Total Investment Return on Market Value(2)

    (7.13 )%      18.43     10.17     13.11     (18.01 )% 

 

  54   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    New Jersey Fund  
    Year Ended September 30,  
Ratios/Supplemental Data   2017     2016     2015     2014     2013  

Net assets applicable to common shares, end of year (000’s omitted)

  $ 37,366     $ 39,385     $ 36,714     $ 37,789     $ 34,221  

Ratios (as a percentage of average daily net assets applicable to common shares):(4)

         

Expenses excluding interest and fees(5)

    1.34     1.45     1.29     1.30     1.35

Interest and fee expense(6)

    1.07     0.52     0.00 %(7)      0.01     0.04

Total expenses(5)

    2.41     1.97     1.29     1.31     1.39

Net investment income

    4.35     4.50     5.28     5.50     5.35

Portfolio Turnover

    11     8     5     5     11

Senior Securities:

         

Total preferred shares outstanding(8)

    784       784       784       784       784  

Asset coverage per preferred share(9)

  $ 72,661     $ 75,237     $ 71,830     $ 73,201     $ 68,650  

Involuntary liquidation preference per preferred share(10)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

Approximate market value per preferred share(10)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

 

(1) 

Computed using average common shares outstanding.

 

(2) 

Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan.

 

(3) 

The total return based on net asset value reflects the impact of the tender and repurchase by the Fund of a portion of its APS at 95.5% of the per share liquidation preference. Absent this transaction, the total return based on net asset value would have been 10.43%.

 

(4) 

Ratios do not reflect the effect of dividend payments to APS shareholders.

 

(5) 

Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian.

 

(6) 

Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1G) and iMTP Shares issued to redeem a portion of the Fund’s APS (see Note 3). Effective October 1, 2016, the ratio includes amortization of deferred offering costs for iMTP Shares which for the year ended September 30, 2016, were included in the ratio of expenses excluding interest and fees.

 

(7) 

Amount is less than 0.005%.

 

(8) 

Preferred shares represent iMTP Shares and APS as of September 30, 2017 and 2016 and APS as of September 30, 2015, 2014 and 2013.

 

(9) 

Calculated by subtracting the Fund’s total liabilities (not including the preferred shares) from the Fund’s total assets, and dividing the result by the number of preferred shares outstanding.

 

(10) 

Plus accumulated and unpaid dividends.

 

Ratios based on net assets applicable to common shares plus preferred shares (iMTP Shares and APS, as applicable) are presented below. Ratios do not reflect the effect of dividend payments to APS shareholders and exclude the effect of custody fee credits, if any.

 

    Year Ended September 30,  
    2017      2016      2015      2014      2013  

Expenses excluding interest and fees

    0.88      0.96      0.84      0.84      0.88

Interest and fee expense

    0.70      0.35      0.00 %(7)       0.00 %(7)       0.03

Total expenses

    1.58      1.31      0.84      0.84      0.91

Net investment income

    2.84      2.99      3.46      3.55      3.50

 

APS     Auction Preferred Shares
iMTP Shares     Institutional MuniFund Term Preferred Shares

 

  55   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    New York Fund II  
    Year Ended September 30,  
    2017     2016     2015     2014     2013  

Net asset value — Beginning of year (Common shares)

  $ 13.780     $ 13.390     $ 13.460     $ 12.380     $ 13.900  
Income (Loss) From Operations                                        

Net investment income(1)

  $ 0.554     $ 0.612     $ 0.700     $ 0.736     $ 0.714  

Net realized and unrealized gain (loss)

    (0.623     0.243       (0.083     1.037       (1.537

Distributions to APS shareholders(1)

         

From net investment income

    (0.009     (0.005     (0.007     (0.006     (0.010

Discount on redemption and repurchase of APS(1)

          0.202                    

Total income (loss) from operations

  $ (0.078   $ 1.052     $ 0.610     $ 1.767     $ (0.833
Less Distributions to Common Shareholders                                        

From net investment income

  $ (0.562   $ (0.662   $ (0.687   $ (0.687   $ (0.687

Total distributions to common shareholders

  $ (0.562   $ (0.662   $ (0.687   $ (0.687   $ (0.687

Anti-dilutive effect of share repurchase program (see Note 7)(1)

  $     $     $ 0.007     $     $  

Net asset value — End of year (Common shares)

  $ 13.140     $ 13.780     $ 13.390     $ 13.460     $ 12.380  

Market value — End of year (Common shares)

  $ 11.930     $ 13.590     $ 12.320     $ 11.840     $ 11.120  

Total Investment Return on Net Asset Value(2)

    (0.15 )%      8.28 %(3)      5.22     15.23     (6.01 )% 

Total Investment Return on Market Value(2)

    (8.01 )%      15.94     10.09     12.85     (16.01 )% 

 

  56   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    New York Fund II  
    Year Ended September 30,  
Ratios/Supplemental Data   2017     2016     2015     2014     2013  

Net assets applicable to common shares, end of year (000’s omitted)

  $ 33,601     $ 35,240     $ 34,233     $ 34,557     $ 31,779  

Ratios (as a percentage of average daily net assets applicable to common shares):(4)

         

Expenses excluding interest and fees(5)

    1.45     1.49     1.37     1.39     1.40

Interest and fee expense(6)

    1.05     0.54     0.16     0.17     0.17

Total expenses(5)

    2.50     2.03     1.53     1.56     1.57

Net investment income

    4.22     4.44     5.20     5.72     5.33

Portfolio Turnover

    28     14     1     7     14

Senior Securities:

         

Total preferred shares outstanding(7)

    530       530       530       530       530  

Asset coverage per preferred share(8)

  $ 88,398     $ 91,492     $ 89,590     $ 90,203     $ 84,960  

Involuntary liquidation preference per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

Approximate market value per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

 

  (1) 

Computed using average common shares outstanding.

 

  (2) 

Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan.

 

  (3) 

The total return based on net asset value reflects the impact of the tender and repurchase by the Fund of a portion of its APS at 95.5% of the per share liquidation preference. Absent this transaction, the total return based on net asset value would have been 6.69%.

 

  (4) 

Ratios do not reflect the effect of dividend payments to APS shareholders.

 

  (5) 

Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian.

 

  (6) 

Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1G) and iMTP Shares issued to redeem a portion of the Fund’s APS (see Note 3). Effective October 1, 2016, the ratio includes amortization of deferred offering costs for iMTP Shares which for the year ended September 30, 2016, were included in the ratio of expenses excluding interest and fees.

 

  (7) 

Preferred shares represent iMTP Shares and APS as of September 30, 2017 and 2016 and APS as of September 30, 2015, 2014 and 2013.

 

  (8) 

Calculated by subtracting the Fund’s total liabilities (not including the preferred shares) from the Fund’s total assets, and dividing the result by the number of preferred shares outstanding.

 

  (9) 

Plus accumulated and unpaid dividends.

 

  Ratios based on net assets applicable to common shares plus preferred shares (iMTP Shares and APS, as applicable) are presented below. Ratios do not reflect the effect of dividend payments to APS shareholders and exclude the effect of custody fee credits, if any.

 

    Year Ended September 30,  
    2017      2016      2015      2014      2013  

Expenses excluding interest and fees

    1.04      1.09      1.00      1.00      1.01

Interest and fee expense

    0.75      0.39      0.11      0.12      0.12

Total expenses

    1.79      1.48      1.11      1.12      1.13

Net investment income

    3.03      3.23      3.75      4.08      3.85

 

APS     Auction Preferred Shares
iMTP Shares     Institutional MuniFund Term Preferred Shares

 

  57   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    Ohio Fund  
    Year Ended September 30,  
    2017     2016     2015     2014     2013  

Net asset value — Beginning of year (Common shares)

  $ 14.750     $ 13.900     $ 13.770     $ 12.220     $ 13.800  
Income (Loss) From Operations                                        

Net investment income(1)

  $ 0.605     $ 0.656     $ 0.741     $ 0.742     $ 0.736  

Net realized and unrealized gain (loss)

    (0.788     0.607       0.100       1.518       (1.584

Distributions to APS shareholders(1)

         

From net investment income

    (0.011     (0.006     (0.009     (0.008     (0.013

Discount on redemption and repurchase of APS(1)

          0.262                    

Total income (loss) from operations

  $ (0.194   $ 1.519     $ 0.832     $ 2.252     $ (0.861
Less Distributions to Common Shareholders                                        

From net investment income

  $ (0.586   $ (0.669   $ (0.702   $ (0.702   $ (0.719

Total distributions to common shareholders

  $ (0.586   $ (0.669   $ (0.702   $ (0.702   $ (0.719

Net asset value — End of year (Common shares)

  $ 13.970     $ 14.750     $ 13.900     $ 13.770     $ 12.220  

Market value — End of year (Common shares)

  $ 12.970     $ 15.000     $ 12.460     $ 12.500     $ 11.380  

Total Investment Return on Net Asset Value(2)

    (1.04 )%      11.24 %(3)      6.63     19.45     (6.46 )% 

Total Investment Return on Market Value(2)

    (9.65 )%      26.20     5.30     16.44     (20.91 )% 

 

  58   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    Ohio Fund  
    Year Ended September 30,  
Ratios/Supplemental Data   2017     2016     2015     2014     2013  

Net assets applicable to common shares, end of year (000’s omitted)

  $ 35,467     $ 37,420     $ 35,276     $ 34,947     $ 30,995  

Ratios (as a percentage of average daily net assets applicable to common shares):(4)

         

Expenses excluding interest and fees(5)

    1.33     1.38     1.27     1.32     1.33

Interest and fee expense(6)

    0.94     0.46     0.01     0.03     0.02

Total expenses(5)

    2.27     1.84     1.28     1.35     1.35

Net investment income

    4.32     4.51     5.33     5.74     5.51

Portfolio Turnover

    10     5     4     12     12

Senior Securities:

         

Total preferred shares outstanding(7)

    680       680       680       680       680  

Asset coverage per preferred share(8)

  $ 77,158     $ 80,031     $ 76,877     $ 76,393     $ 70,581  

Involuntary liquidation preference per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

Approximate market value per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

 

  (1) 

Computed using average common shares outstanding.

 

  (2) 

Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan.

 

  (3) 

The total return based on net asset value reflects the impact of the tender and repurchase by the Fund of a portion of its APS at 95.5% of the per share liquidation preference. Absent this transaction, the total return based on net asset value would have been 9.27%.

 

  (4) 

Ratios do not reflect the effect of dividend payments to APS shareholders.

 

  (5) 

Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian.

 

  (6) 

Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1G) and iMTP Shares issued to redeem a portion of the Fund’s APS (see Note 3). Effective October 1, 2016, the ratio includes amortization of deferred offering costs for iMTP Shares which for the year ended September 30, 2016, were included in the ratio of expenses excluding interest and fees.

 

  (7) 

Preferred shares represent iMTP Shares and APS as of September 30, 2017 and 2016 and APS as of September 30, 2015, 2014 and 2013.

 

  (8) 

Calculated by subtracting the Fund’s total liabilities (not including the preferred shares) from the Fund’s total assets, and dividing the result by the number of preferred shares outstanding.

 

  (9) 

Plus accumulated and unpaid dividends.

 

Ratios based on net assets applicable to common shares plus preferred shares (iMTP Shares and APS, as applicable) are presented below. Ratios do not reflect the effect of dividend payments to APS shareholders and exclude the effect of custody fee credits, if any.

 

    Year Ended September 30,  
    2017      2016      2015      2014      2013  

Expenses excluding interest and fees

    0.89      0.95      0.86      0.87      0.89

Interest and fee expense

    0.64      0.31      0.01      0.02      0.01

Total expenses

    1.53      1.26      0.87      0.89      0.90

Net investment income

    2.92      3.09      3.60      3.78      3.67

 

APS     Auction Preferred Shares
iMTP Shares     Institutional MuniFund Term Preferred Shares

 

  59   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    Pennsylvania Fund  
    Year Ended September 30,  
    2017     2016     2015     2014     2013  

Net asset value — Beginning of year (Common shares)

  $ 14.950     $ 14.080     $ 14.200     $ 12.710     $ 14.460  
Income (Loss) From Operations                                        

Net investment income(1)

  $ 0.630     $ 0.693     $ 0.809     $ 0.834     $ 0.812  

Net realized and unrealized gain (loss)

    (0.640     0.623       (0.147     1.437       (1.742

Distributions to APS shareholders(1)

         

From net investment income

    (0.005     (0.004     (0.009     (0.008     (0.014

Discount on redemption and repurchase of APS(1)

          0.311                    

Total income (loss) from operations

  $ (0.015   $ 1.623     $ 0.653     $ 2.263     $ (0.944
Less Distributions to Common Shareholders                                        

From net investment income

  $ (0.635   $ (0.753   $ (0.773   $ (0.773   $ (0.806

Total distributions to common shareholders

  $ (0.635   $ (0.753   $ (0.773   $ (0.773   $ (0.806

Net asset value — End of year (Common shares)

  $ 14.300     $ 14.950     $ 14.080     $ 14.200     $ 12.710  

Market value — End of year (Common shares)

  $ 12.930     $ 14.500     $ 12.240     $ 12.850     $ 11.590  

Total Investment Return on Net Asset Value(2)

    0.44     12.08 %(3)      5.29     18.84     (6.69 )% 

Total Investment Return on Market Value(2)

    (6.35 )%      25.00     1.16     17.93     (22.03 )% 

 

  60   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Financial Highlights — continued

 

Selected data for a common share outstanding during the periods stated

 

    Pennsylvania Fund  
    Year Ended September 30,  
Ratios/Supplemental Data   2017     2016     2015     2014     2013  

Net assets applicable to common shares, end of year (000’s omitted)

  $ 42,333     $ 44,255     $ 41,685     $ 42,033     $ 37,619  

Ratios (as a percentage of average daily net assets applicable to common shares):(4)

         

Expenses excluding interest and fees(5)

    1.30     1.40     1.28     1.34     1.35

Interest and fee expense(6)

    1.07     0.55     0.05     0.08     0.06

Total expenses(5)

    2.37     1.95     1.33     1.42     1.41

Net investment income

    4.42     4.71     5.69     6.21     5.83

Portfolio Turnover

    4     7     4     2     14

Senior Securities:

         

Total preferred shares outstanding(7)

    869       869       869       869       869  

Asset coverage per preferred share(8)

  $ 73,714     $ 75,926     $ 72,969     $ 73,370     $ 68,290  

Involuntary liquidation preference per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

Approximate market value per preferred share(9)

  $ 25,000     $ 25,000     $ 25,000     $ 25,000     $ 25,000  

 

  (1) 

Computed using average common shares outstanding.

 

  (2) 

Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan.

 

  (3) 

The total return based on net asset value reflects the impact of the tender and repurchase by the Fund of a portion of its APS at 95.5% of the per share liquidation preference. Absent this transaction, the total return based on net asset value would have been 9.75%.

 

  (4) 

Ratios do not reflect the effect of dividend payments to APS shareholders.

 

  (5) 

Excludes the effect of custody fee credits, if any, of less than 0.005%. Effective September 1, 2015, custody fee credits, which were earned on cash deposit balances, were discontinued by the custodian.

 

  (6) 

Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1G) and iMTP Shares issued to redeem a portion of the Fund’s APS (see Note 3). Effective October 1, 2016, the ratio includes amortization of deferred offering costs for iMTP Shares which for the year ended September 30, 2016, were included in the ratio of expenses excluding interest and fees.

 

  (7) 

Preferred shares represent iMTP Shares and APS as of September 30, 2017 and 2016 and APS as of September 30, 2015, 2014 and 2013.

 

  (8) 

Calculated by subtracting the Fund’s total liabilities (not including the preferred shares) from the Fund’s total assets, and dividing the result by the number of preferred shares outstanding.

 

  (9) 

Plus accumulated and unpaid dividends.

 

  Ratios based on net assets applicable to common shares plus preferred shares (iMTP Shares and APS, as applicable) are presented below. Ratios do not reflect the effect of dividend payments to APS shareholders and exclude the effect of custody fee credits, if any.

 

    Year Ended September 30,  
    2017      2016      2015      2014      2013  

Expenses excluding interest and fees

    0.85      0.93      0.85      0.86      0.88

Interest and fee expense

    0.71      0.37      0.03      0.06      0.04

Total expenses

    1.56      1.30      0.88      0.92      0.92

Net investment income

    2.92      3.14      3.75      4.02      3.82

 

APS     Auction Preferred Shares
iMTP Shares     Institutional MuniFund Term Preferred Shares

 

  61   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Notes to Financial Statements

 

 

1  Significant Accounting Policies

Eaton Vance Municipal Bond Fund II (Municipal Fund II), Eaton Vance California Municipal Bond Fund II (California Fund II), Eaton Vance Massachusetts Municipal Bond Fund (Massachusetts Fund), Eaton Vance Michigan Municipal Bond Fund (Michigan Fund), Eaton Vance New Jersey Municipal Bond Fund (New Jersey Fund), Eaton Vance New York Municipal Bond Fund II (New York Fund II), Eaton Vance Ohio Municipal Bond Fund (Ohio Fund) and Eaton Vance Pennsylvania Municipal Bond Fund (Pennsylvania Fund), (each individually referred to as the Fund, and collectively, the Funds), are Massachusetts business trusts registered under the Investment Company Act of 1940, as amended (the 1940 Act), as non-diversified, closed-end management investment companies, except for Municipal Fund II, which is a diversified, closed-end management investment company. The Funds’ investment objective is to provide current income exempt from regular federal income tax, including alternative minimum tax, and, in state specific funds, taxes in its specified state.

The following is a summary of significant accounting policies of the Funds. The policies are in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). Each Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.

A  Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.

Debt Obligations. Debt obligations are generally valued on the basis of valuations provided by third party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and asked prices, broker/dealer quotations, prices or yields of securities with similar characteristics, interest rates, anticipated prepayments, benchmark curves or information pertaining to the issuer, as well as industry and economic events. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security. Short-term obligations purchased with a remaining maturity of sixty days or less for which a valuation from a third party pricing service is not readily available may be valued at amortized cost, which approximates fair value.

Derivatives. Financial futures contracts are valued at the closing settlement price established by the board of trade or exchange on which they are traded.

Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of a Fund in a manner that fairly reflects the security’s value, or the amount that a Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the entity’s financial condition, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.

B  Investment Transactions and Related Income — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost. Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount.

C  Federal Taxes — Each Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its taxable, if any, and tax-exempt net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary. Each Fund intends to satisfy conditions which will enable it to designate distributions from the interest income generated by its investments in municipal obligations, which are exempt from regular federal income tax when received by each Fund, as exempt-interest dividends.

As of September 30, 2017, the Funds had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. Each Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.

D  Legal Fees — Legal fees and other related expenses incurred as part of negotiations of the terms and requirement of capital infusions, or that are expected to result in the restructuring of, or a plan of reorganization for, an investment are recorded as realized losses. Ongoing expenditures to protect or enhance an investment are treated as operating expenses.

E  Use of Estimates — The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.

F  Indemnifications — Under each Fund’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to each Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as a Fund) could be deemed to have personal liability for the obligations of the Fund. However, each Fund’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Fund shall assume the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, each Fund

 

  62  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Notes to Financial Statements — continued

 

 

enters into agreements with service providers that may contain indemnification clauses. Each Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against each Fund that have not yet occurred.

G  Floating Rate Notes Issued in Conjunction with Securities Held — The Funds may invest in residual interest bonds, also referred to as inverse floating rate securities, whereby a Fund may sell a variable or fixed rate bond for cash to a Special-Purpose Vehicle (the SPV), (which is generally organized as a trust), while at the same time, buying a residual interest in the assets and cash flows of the SPV. The bond is deposited into the SPV with the same CUSIP number as the bond sold to the SPV by the Fund, and which may have been, but is not required to be, the bond purchased from the Fund (the Bond). The SPV also issues floating rate notes (Floating Rate Notes) which are sold to third-parties. The residual interest bond held by a Fund gives the Fund the right (1) to cause the holders of the Floating Rate Notes to generally tender their notes at par, and (2) to have the Bond held by the SPV transferred to the Fund, thereby terminating the SPV. Should the Fund exercise such right, it would generally pay the SPV the par amount due on the Floating Rate Notes and exchange the residual interest bond for the underlying Bond. Pursuant to generally accepted accounting principles for transfers and servicing of financial assets and extinguishment of liabilities, the Funds account for the transaction described above as a secured borrowing by including the Bond in their Portfolio of Investments and the Floating Rate Notes (net of unamortized deferred debt issuance costs) as a liability under the caption “Payable for floating rate notes issued” in their Statement of Assets and Liabilities. The Floating Rate Notes have interest rates that generally reset weekly and their holders have the option to tender their notes to the SPV for redemption at par at each reset date. Accordingly, the fair value of the payable for floating rate notes issued approximates its carrying value. If measured at fair value, the payable for floating rate notes would have been considered as Level 2 in the fair value hierarchy (see Note 10) at September 30, 2017. Interest expense related to a Fund’s liability with respect to Floating Rate Notes is recorded as incurred. The SPV may be terminated by the Fund, as noted above, or by the occurrence of certain termination events as defined in the trust agreement, such as a downgrade in the credit quality of the underlying Bond, bankruptcy of or payment failure by the issuer of the underlying Bond, the inability to remarket Floating Rate Notes that have been tendered due to insufficient buyers in the market, or the failure by the SPV to obtain renewal of the liquidity agreement under which liquidity support is provided for the Floating Rate Notes up to one year. Structuring fees paid to the liquidity provider upon the creation of an SPV have been recorded as debt issuance costs and are being amortized as interest expense to the expected maturity of the related trust. Unamortized structuring fees related to a terminated SPV are recorded as a realized loss on extinguishment of debt. At September 30, 2017, the amounts of the Funds’ Floating Rate Notes and related interest rates and collateral were as follows:

 

    

Municipal

Fund II

    

California

Fund II

    

Massachusetts

Fund

 

Floating Rate Notes Outstanding

  $ 41,195,000      $ 7,250,000      $ 500,000  

Interest Rate or Range of Interest Rates (%)

    0.95 - 1.44        0.95 - 0.97        1.07  

Collateral for Floating Rate Notes Outstanding

  $ 54,062,072      $ 9,220,655      $ 956,993  

 

    

New Jersey

Fund

    

New York

Fund II

    

Ohio

Fund

    

Pennsylvania

Fund

 

Floating Rate Notes Outstanding

  $ 3,740,000      $ 9,500,000      $ 3,320,000      $ 3,390,000  

Interest Rate or Range of Interest Rates (%)

    0.95        0.95 - 0.97        0.97 - 1.18        0.97  

Collateral for Floating Rate Notes Outstanding

  $ 5,450,656      $ 13,100,712      $ 4,569,544      $ 4,290,460  

For the year ended September 30, 2017, the Funds’ average Floating Rate Notes outstanding and the average interest rate including fees and amortization of deferred debt issuance costs were as follows:

 

    

Municipal

Fund II

    

California

Fund II

    

Massachusetts

Fund

 

Average Floating Rate Notes Outstanding

  $ 42,077,192      $ 7,197,397      $ 798,863  

Average Interest Rate

    1.43      1.39      1.45

 

    

New Jersey

Fund

    

New York

Fund II

    

Ohio

Fund

    

Pennsylvania

Fund

 

Average Floating Rate Notes Outstanding

  $ 3,740,000      $ 9,626,027      $ 2,639,452      $ 3,390,000  

Average Interest Rate

    1.37      1.41      1.45      1.39

 

  63  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Notes to Financial Statements — continued

 

 

In certain circumstances, the Funds may enter into shortfall and forbearance agreements with brokers by which a Fund agrees to reimburse the broker for the difference between the liquidation value of the Bond held by the SPV and the liquidation value of the Floating Rate Notes, as well as any shortfalls in interest cash flows. The Funds had no shortfalls as of September 30, 2017.

The Funds may also purchase residual interest bonds in a secondary market transaction without first owning the underlying bond. Such transactions are not required to be treated as secured borrowings. Shortfall agreements, if any, related to residual interest bonds purchased in a secondary market transaction are disclosed in the Portfolio of Investments.

The Funds’ investment policies and restrictions expressly permit investments in residual interest bonds. Such bonds typically offer the potential for yields exceeding the yields available on fixed rate bonds with comparable credit quality and maturity. These securities tend to underperform the market for fixed rate bonds in a rising long-term interest rate environment, but tend to outperform the market for fixed rate bonds when long-term interest rates decline. The value and income of residual interest bonds are generally more volatile than that of a fixed rate bond. The Funds’ investment policies do not allow the Funds to borrow money except as permitted by the 1940 Act. Management believes that the Funds’ restrictions on borrowing money and issuing senior securities (other than as specifically permitted) do not apply to Floating Rate Notes issued by the SPV and included as a liability in the Funds’ Statement of Assets and Liabilities. As secured indebtedness issued by an SPV, Floating Rate Notes are distinct from the borrowings and senior securities to which the Funds’ restrictions apply. Residual interest bonds held by the Funds are securities exempt from registration under Rule 144A of the Securities Act of 1933.

Final rules implementing section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”) prohibit banking entities from engaging in proprietary trading of certain instruments and limit such entities’ investments in, and relationships with, covered funds (such as SPVs), as defined in the rules. The compliance date for the Volcker Rule for certain covered funds was July 21, 2015 while for other covered funds the compliance date was July 21, 2017, as announced on July 7, 2016. The Volcker Rule precludes banking entities and their affiliates from (i) sponsoring residual interest bond programs and (ii) continuing relationships with or services for existing residual interest bond programs. All residual interest bonds held by the Funds during the year ended September 30, 2017 were Volcker Rule compliant. The effects of the Volcker Rule may make it more difficult for the Funds to maintain current or desired levels of leverage and may cause the Funds to incur additional expenses to maintain their leverage.

H  Financial Futures Contracts — Upon entering into a financial futures contract, a Fund is required to deposit with the broker, either in cash or securities, an amount equal to a certain percentage of the contract amount (initial margin). Subsequent payments, known as variation margin, are made or received by the Fund each business day, depending on the daily fluctuations in the value of the underlying security, and are recorded as unrealized gains or losses by the Fund. Gains (losses) are realized upon the expiration or closing of the financial futures contracts. Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. Futures contracts have minimal counterparty risk as they are exchange traded and the clearinghouse for the exchange is substituted as the counterparty, guaranteeing counterparty performance.

I  When-Issued Securities and Delayed Delivery Transactions — The Funds may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. At the time the transaction is negotiated, the price of the security that will be delivered is fixed. The Funds maintain cash and/or security positions for these commitments such that sufficient liquid assets will be available to make payments upon settlement. Securities purchased on a delayed delivery or when-issued basis are marked-to-market daily and begin earning interest on settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

J  Statement of Cash Flows — The cash amount shown in the Statement of Cash Flows of a Fund is the amount included in the Fund’s Statement of Assets and Liabilities and represents the unrestricted cash on hand at its custodian and does not include any short-term investments.

K  New Accounting Pronouncement — During the year ended September 30, 2017, the Funds adopted the FASB’s Accounting Standards Update No. 2015-03, which provides guidance to simplify the presentation of debt issuance costs and became effective for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Pursuant to the new standard, the Funds are required to present debt issuance costs in their Statement of Assets and Liabilities as a direct deduction from the carrying value of the related debt liability. Prior to the change, such costs were presented by the Funds as a deferred asset. This change in accounting had no impact on the Funds’ net assets.

2  Auction Preferred Shares

Each Fund issued Auction Preferred Shares (APS) on January 15, 2003 in a public offering. Dividends on the APS, which accrue daily, are cumulative at rates which are reset every seven days by an auction, unless a special dividend period has been set. If the APS auctions do not successfully clear, the dividend payment rate over the next period for the APS holders is set at a specified maximum applicable rate until such time as the APS auctions are successful. The maximum applicable rate on the APS is 110% (150% for taxable distributions) of the greater of the 1) “AA” Financial Composite Commercial Paper Rate or 2) Taxable Equivalent of the Short-Term Municipal Obligation Rate on the date of the auction. The stated spread over the reference benchmark rate is determined based on the credit rating of the APS. Series of APS are identical in all respects except for the reset dates of the dividend rates.

The APS are redeemable at the option of each Fund at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends, on any dividend payment date. The APS, with a Fund’s other preferred shares (see Note 3), are also subject to mandatory redemption at a redemption price equal

 

  64  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Notes to Financial Statements — continued

 

 

to $25,000 per share, plus accumulated and unpaid dividends, if a Fund is in default for an extended period on its asset maintenance requirements, as defined in the Funds’ By-laws and the 1940 Act, with respect to the preferred shares. The APS have a liquidation preference of $25,000 per share, plus accumulated and unpaid dividends. Each Fund pays an annual fee up to 0.15% of the liquidation value of the APS to broker/dealers as a service fee if the auctions are unsuccessful; otherwise, the annual fee is 0.25%.

On October 22, 2015, each Fund announced a tender offer to purchase up to 100% of its outstanding APS at a price per share equal to 95.5% of the APS liquidation preference of $25,000 per share (or $23,875 per share), plus any accrued but unpaid APS dividends. The tender offer expired on December 2, 2015. The number of APS accepted for repurchase pursuant to the tender offer and their liquidation preference were as follows:

 

    

Municipal

Fund II

(Series A)

    

Municipal

Fund II

(Series B)

    

California

Fund II

     Massachusetts
Fund
    

Michigan

Fund

 

APS Tendered and Redeemed

    832        766        992        518        421  

Redemption Amount

  $ 19,864,000      $ 18,288,250      $ 23,684,000      $ 12,367,250      $ 10,051,375  

 

     

New Jersey

Fund

    

New York

Fund II

    

Ohio

Fund

    

Pennsylvania

Fund

 

APS Tendered and Redeemed

     695        460        590        818  

Redemption Amount

   $ 16,593,125      $ 10,982,500      $ 14,086,250      $ 19,529,750  

There were no transactions in APS during the year ended September 30, 2017.

3  Institutional MuniFund Term Preferred Shares

On December 11, 2015, each Fund issued Institutional MuniFund Term Preferred Shares (iMTP Shares) in a private offering to finance the tender offer for its outstanding APS (see Note 2). The number of new iMTP Shares issued was equal to the APS accepted for payment pursuant to the tender offer. The number of iMTP Shares issued and outstanding at September 30, 2017 was as follows:

 

Fund   iMTP Shares Issued and
Outstanding
 

Municipal Fund II

    1,598  

California Fund II

    992  

Massachusetts Fund

    518  

Michigan Fund

    421  

New Jersey Fund

    695  

New York Fund II

    460  

Ohio Fund

    590  

Pennsylvania Fund

    818  

The iMTP Shares are a form of preferred shares that represent stock of the Funds. The iMTP Shares have a par value of $0.01 per share, a liquidation preference of $25,000 per share, and a mandatory redemption date of July 1, 2019, unless earlier redeemed or repurchased by a Fund. Dividends on the iMTP Shares are determined weekly based upon the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Index Rate plus a spread. Such spread to the SIFMA Municipal Swap Index Rate is determined based on the current credit rating of the iMTP Shares. At September 30, 2017, the spread to the SIFMA Municipal Swap Index Rate was 0.85% for California Fund II and New York Fund II, 1.00% for Massachusetts Fund, Michigan Fund, New Jersey Fund, Ohio Fund and Pennsylvania Fund, and 1.05% for Municipal Fund II.

The iMTP Shares are subject to optional and mandatory redemption in certain circumstances. After December 31, 2016, the iMTP Shares are redeemable at the option of each Fund at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends, plus an optional redemption premium. The iMTP Shares are also subject to mandatory redemption at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends (mandatory redemption price), if a Fund is in default for an extended period on its asset maintenance requirements with respect to its preferred shares. For so long as the iMTP Shares are outstanding, a Fund’s effective leverage ratio is not permitted to exceed 45%. In order to comply with this requirement, a Fund may have to redeem all or a portion of its iMTP Shares and APS at the mandatory redemption price.

 

  65  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Notes to Financial Statements — continued

 

 

The holders of the iMTP Shares, APS and common shares have equal voting rights of one vote per share except that the holders of the iMTP Shares and APS, voting as a class, are entitled to elect two Trustees of each Fund. If the dividends on the iMTP Shares and APS remain unpaid in an amount equal to two full years’ dividends, the holders of the iMTP Shares and APS voting as a class have the right to elect a majority of each Fund’s Trustees.

For financial reporting purposes, the liquidation value of the iMTP Shares (net of unamortized deferred offering costs) is presented as a liability on the Statements of Assets and Liabilities and unpaid dividends are included in interest expense and fees payable. Dividends accrued on iMTP Shares are treated as interest payments for financial reporting purposes and are included in interest expense and fees on the Statements of Operations. Costs incurred by each Fund in connection with its offering of iMTP Shares were capitalized as deferred offering costs and are being amortized to the mandatory redemption date of July 1, 2019.

The carrying amount of the iMTP Shares at September 30, 2017 represents its liquidation value, which approximates fair value. If measured at fair value, the iMTP Shares would have been considered as Level 2 in the fair value hierarchy (see Note 10) at September 30, 2017.

The average liquidation preference of the iMTP Shares during the year ended September 30, 2017 was as follows:

 

    

Municipal

Fund II

     California
Fund II
     Massachusetts
Fund
    

Michigan

Fund

 

Average Liquidation Preference of iMTP Shares

  $ 39,950,000      $ 24,800,000      $ 12,950,000      $ 10,525,000  

 

     New Jersey
Fund
     New York
Fund II
    

Ohio

Fund

     Pennsylvania
Fund
 

Average Liquidation Preference of iMTP Shares

  $ 17,375,000      $ 11,500,000      $ 14,750,000      $ 20,450,000  

4  Distributions to Shareholders and Income Tax Information

Each Fund intends to make monthly distributions of net investment income to common shareholders, after payment of any dividends on any outstanding APS and iMTP Shares. In addition, at least annually, each Fund intends to distribute all or substantially all of its net realized capital gains (reduced by available capital loss carryforwards from prior years). Distributions to common shareholders are recorded on the ex-dividend date. Distributions to APS and iMTP shareholders are recorded daily and are payable at the end of each dividend period. The dividend rates for APS at September 30, 2017, and the amount of dividends accrued (including capital gains, if any) to APS shareholders, average APS dividend rates, and dividend rate ranges for the year then ended were as follows:

 

    

Municipal

Fund II

(Series A)

    

Municipal

Fund II

(Series B)

    

California

Fund II

    

Massachusetts

Fund

    

Michigan

Fund

 

APS Dividend Rates at September 30, 2017

    1.49      1.41      1.49      1.53      1.49

Dividends Accrued to APS Shareholders

  $ 19,612      $ 40,407      $ 11,462      $ 7,904      $ 35,681  

Average APS Dividend Rates

    1.27      1.26      1.27      1.26      1.27

Dividend Rate Ranges (%)

    0.95 - 1.56        0.95 - 1.54        0.95 - 1.61        0.95 - 1.54        0.95 - 1.61  

 

     New Jersey
Fund
    

New York

Fund II

    

Ohio

Fund

     Pennsylvania
Fund
 

APS Dividend Rates at September 30, 2017

    1.49      1.49      1.41      1.53

Dividends Accrued to APS Shareholders

  $ 28,329      $ 22,300      $ 28,411      $ 16,122  

Average APS Dividend Rates

    1.27      1.27      1.26      1.26

Dividend Rate Ranges (%)

    0.95 - 1.61        0.95 - 1.61        0.95 - 1.54        0.95 - 1.54  

Beginning February 13, 2008 and consistent with the patterns in the broader market for auction-rate securities, the Funds’ APS auctions were unsuccessful in clearing due to an imbalance of sell orders over bids to buy the APS. As a result, the dividend rates of the APS were reset to the maximum applicable rates. The table above reflects such maximum dividend rates for each series as of September 30, 2017.

 

  66  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Notes to Financial Statements — continued

 

 

The dividend rates for iMTP Shares at September 30, 2017, and the amount of dividends accrued to iMTP shareholders and average iMTP dividend rates for the year then ended were as follows:

 

    

Municipal

Fund II

    

California

Fund II

    

Massachusetts

Fund

    

Michigan

Fund

 

iMTP Dividend Rates at September 30, 2017

    1.99      1.79      1.94      1.94

Dividends Accrued to iMTP Shareholders

  $ 718,060      $ 397,268      $ 226,292      $ 184,166  

Average iMTP Dividend Rates

    1.80      1.60      1.75      1.75
          
    

New Jersey

Fund

    

New York

Fund II

    

Ohio

Fund

    

Pennsylvania

Fund

 

iMTP Dividend Rates at September 30, 2017

    1.94      1.79      1.94      1.94

Dividends Accrued to iMTP Shareholders

  $ 303,774      $ 185,043      $ 257,746      $ 357,350  

Average iMTP Dividend Rates

    1.75      1.61      1.75      1.75

Distributions to shareholders are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As required by U.S. GAAP, only distributions in excess of tax basis earnings and profits are reported in the financial statements as a return of capital. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.

The tax character of distributions declared, including distributions on iMTP Shares that are treated as interest payments for financial reporting purposes, for the years ended September 30, 2017 and September 30, 2016 was as follows:

 

    Year Ended September 30, 2017  
    

Municipal

Fund II

    

California

Fund II

    

Massachusetts

Fund

    

Michigan

Fund

 

Distributions declared from:

          

Tax-exempt income

  $ 6,698,992      $ 2,457,464      $ 1,218,197      $ 1,114,104  

Ordinary income

  $      $ 12,589      $      $ 2,932  

 

    Year Ended September 30, 2017  
    

New Jersey

Fund

    

New York

Fund II

    

Ohio

Fund

    

Pennsylvania

Fund

 

Distributions declared from:

          

Tax-exempt income

  $ 1,928,685      $ 1,643,590      $ 1,629,017      $ 2,210,313  

Ordinary income

  $ 20,555      $      $ 144,111      $ 43,968  

 

    Year Ended September 30, 2016  
    

Municipal

Fund II

    

California

Fund II

     Massachusetts
Fund
     Michigan
Fund
 

Distributions declared from:

          

Tax-exempt income

  $ 7,200,358      $ 2,715,071      $ 1,304,828      $ 1,185,903  

Ordinary income

  $ 36      $ 15,903      $      $  

 

  67  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Notes to Financial Statements — continued

 

 

 

    Year Ended September 30, 2016  
    

New Jersey

Fund

    

New York

Fund II

    

Ohio

Fund

    

Pennsylvania

Fund

 

Distributions declared from:

          

Tax-exempt income

  $ 2,035,059      $ 1,783,646      $ 1,865,951      $ 2,454,530  

Ordinary income

  $ 2,114      $ 26,591      $      $  

During the year ended September 30, 2017, the following amounts were reclassified due to expired capital loss carryforwards and differences between book and tax accounting, primarily for premium amortization, accretion of market discount, non-deductible expenses and the treatment of iMTP Shares as equity for tax purposes.

 

     Municipal
Fund II
     California
Fund II
     Massachusetts
Fund
     Michigan
Fund
 

Change in:

          

Paid-in capital

  $ (2,098,448    $ (1,422,760    $ (129,228    $ (31,164

Accumulated net realized loss

  $ 2,019,008      $ 1,357,064      $ 100,007      $ (442

Accumulated undistributed net investment income

  $ 79,440      $ 65,696      $ 29,221      $ 31,606  
          
     New Jersey
Fund
     New York
Fund II
     Ohio Fund      Pennsylvania
Fund
 

Change in:

          

Paid-in capital

  $ (288,672    $ (1,265,834    $ (1,658,917    $ (49,060

Accumulated net realized loss

  $ 232,544      $ 1,240,970      $ 1,489,972      $ (34,111

Accumulated undistributed net investment income

  $ 56,128      $ 24,864      $ 168,945      $ 83,171  

These reclassifications had no effect on the net assets or net asset value per share of the Funds.

As of September 30, 2017, the components of distributable earnings (accumulated losses) on a tax basis were as follows:

 

    

Municipal

Fund II

    

California

Fund II

     Massachusetts
Fund
    

Michigan

Fund

 

Undistributed tax-exempt income

  $ 182,618      $ 278,796      $ 93,266      $ 101,382  

Capital loss carryforwards and deferred capital losses

  $ (22,404,414    $ (10,243,384    $ (2,744,592    $ (1,104,175

Net unrealized appreciation

  $ 17,178,790      $ 5,545,432      $ 4,215,022      $ 2,745,757  

Other temporary differences

  $ (932    $ (110    $ (52    $ (458
          
     New Jersey
Fund
     New York
Fund II
     Ohio Fund      Pennsylvania
Fund
 

Undistributed tax-exempt income

  $ 184,151      $ 111,506      $ 288,606      $ 243,880  

Capital loss carryforwards and deferred capital losses

  $ (4,736,124    $ (5,356,298    $ (4,451,741    $ (5,402,847

Net unrealized appreciation

  $ 4,886,424      $ 3,431,556      $ 5,142,707      $ 4,726,416  

Other temporary differences

  $ (455    $ (286    $ (520    $ (107

The differences between components of distributable earnings (accumulated losses) on a tax basis and the amounts reflected in the Statements of Assets and Liabilities are primarily due to wash sales, futures contracts, the timing of recognizing distributions to shareholders, premium amortization, accretion of market discount and residual interest bonds.

 

 

  68  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Notes to Financial Statements — continued

 

 

At September 30, 2017, the following Funds, for federal income tax purposes, had capital loss carryforwards and deferred capital losses which would reduce the respective Fund’s taxable income arising from future net realized gains on investment transactions, if any, to the extent permitted by the Internal Revenue Code, and thus would reduce the amount of distributions to shareholders, which would otherwise be necessary to relieve the Funds of any liability for federal income or excise tax. Under tax regulations, capital losses incurred in taxable years beginning after December 2010 are considered deferred capital losses and are treated as arising on the first day of a Fund’s next taxable year, retaining the same short-term or long-term character as when originally deferred. Deferred capital losses are required to be used prior to capital loss carryforwards, which carry an expiration date. As a result of this ordering rule, capital loss carryforwards may be more likely to expire unused. The amounts and expiration dates of the capital loss carryforwards, whose character is short-term, and the amounts of the deferred capital losses are as follows:

 

Expiration Date   Municipal
Fund II
     California
Fund II
     Massachusetts
Fund
     Michigan
Fund
 

September 30, 2018

  $ 11,539,291      $ 3,330,399      $ 1,054,999      $ 579,696  

September 30, 2019

    1,277,303        1,539,887        225,669        515,704  

Total capital loss carryforwards

  $ 12,816,594      $ 4,870,286      $ 1,280,668      $ 1,095,400  

Deferred capital losses:

          

Short-term

  $ 2,962,087      $ 1,897,328      $ 641,167      $ 8,775  

Long-term

  $ 6,625,733      $ 3,475,770      $ 822,757      $  
          
Expiration Date   New Jersey
Fund
     New York
Fund II
     Ohio
Fund
     Pennsylvania
Fund
 

September 30, 2018

  $ 2,060,337      $ 1,545,637      $ 3,381,936      $ 1,949,047  

September 30, 2019

    1,369,694        1,548,104        669,118        925,899  

Total capital loss carryforwards

  $ 3,430,031      $ 3,093,741      $ 4,051,054      $ 2,874,946  

Deferred capital losses:

          

Short-term

  $ 886,069      $ 1,421,651      $ 400,687      $ 943,162  

Long-term

  $ 420,024      $ 840,906      $      $ 1,584,739  

The cost and unrealized appreciation (depreciation) of investments, including open derivative contracts, of each Fund at September 30, 2017, as determined on a federal income tax basis, were as follows:

 

     Municipal
Fund II
     California
Fund II
     Massachusetts
Fund
     Michigan
Fund
 

Aggregate cost

  $ 161,009,894      $ 69,758,467      $ 35,017,983      $ 33,175,163  

Gross unrealized appreciation

  $ 17,397,586      $ 5,784,187      $ 4,245,731      $ 2,784,993  

Gross unrealized depreciation

    (218,796      (238,755      (30,709      (39,236

Net unrealized appreciation

  $ 17,178,790      $ 5,545,432      $ 4,215,022      $ 2,745,757  

 

  69  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Notes to Financial Statements — continued

 

 

 

     New Jersey
Fund
     New York
Fund II
     Ohio
Fund
     Pennsylvania
Fund
 

Aggregate cost

  $ 51,594,179      $ 43,243,035      $ 46,270,907      $ 56,225,321  

Gross unrealized appreciation

  $ 5,104,945      $ 3,774,928      $ 5,202,526      $ 4,800,719  

Gross unrealized depreciation

    (218,521      (343,372      (59,819      (74,303

Net unrealized appreciation

  $ 4,886,424      $ 3,431,556      $ 5,142,707      $ 4,726,416  

5  Investment Adviser Fee and Other Transactions with Affiliates

The investment adviser fee is earned by Eaton Vance Management (EVM) as compensation for investment advisory services rendered to each Fund. The fee is computed at an annual rate of 0.55% of each Fund’s average weekly gross assets and is payable monthly. Average weekly gross assets include the principal amount of any indebtedness for money borrowed, including debt securities issued by a Fund, and the amount of any outstanding preferred shares issued by the Fund. Pursuant to a fee reduction agreement with EVM, average weekly gross assets are calculated by adding to net assets the liquidation value of a Fund’s APS and iMTP Shares then outstanding and the amount payable by the Fund to floating rate note holders, such adjustment being limited to the value of the APS outstanding prior to any APS redemptions by the Fund. EVM also serves as the administrator of each Fund, but receives no compensation. For the year ended September 30, 2017, the investment adviser fees were as follows:

 

     Municipal
Fund II
     California
Fund II
     Massachusetts
Fund
     Michigan
Fund
 

Investment Adviser Fee

  $ 1,224,438      $ 457,225      $ 227,504      $ 199,143  
          
     New Jersey
Fund
     New York
Fund II
     Ohio
Fund
     Pennsylvania
Fund
 

Investment Adviser Fee

  $ 328,097      $ 308,009        $303,646      $ 370,582  

Trustees and officers of the Funds who are members of EVM’s organization receive remuneration for their services to the Funds out of the investment adviser fee. Trustees of the Funds who are not affiliated with EVM may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the year ended September 30, 2017, no significant amounts have been deferred. Certain officers and Trustees of the Funds are officers of EVM.

6  Purchases and Sales of Investments

Purchases and sales of investments, other than short-term obligations, for the year ended September 30, 2017 were as follows:

 

     Municipal
Fund II
     California
Fund II
     Massachusetts
Fund
     Michigan
Fund
 

Purchases

  $ 19,806,730      $ 20,162,605      $ 2,248,831      $ 4,615,268  

Sales

  $ 17,970,990      $ 20,938,660      $ 2,863,836      $ 4,285,793  
          
     New Jersey
Fund
     New York
Fund II
     Ohio
Fund
     Pennsylvania
Fund
 

Purchases

  $ 6,694,859      $ 15,463,205      $ 6,422,048      $ 2,424,547  

Sales

  $ 6,830,463      $ 16,069,919      $ 5,236,724      $ 4,573,411  

 

  70  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Notes to Financial Statements — continued

 

 

7  Common Shares of Beneficial Interest

The Funds may issue common shares pursuant to their dividend reinvestment plans. For the year ended September 30, 2017, the Ohio Fund issued 166 common shares pursuant to its dividend reinvestment plan and there were no common shares issued by the other Funds. For the year ended September 30, 2016, the California Fund II, New Jersey Fund, New York Fund II and Ohio Fund issued 597, 178, 469 and 775 common shares, respectively, pursuant to its dividend reinvestment plan and there were no common shares issued by the other Funds.

On November 11, 2013, the Boards of Trustees of the Funds authorized the repurchase by each Fund of up to 10% of its then currently outstanding common shares in open-market transactions at a discount to net asset value (NAV). The repurchase program does not obligate the Funds to purchase a specific amount of shares. There were no repurchases of common shares by the Funds for the years ended September 30, 2017 and September 30, 2016.

8  Overdraft Advances

Pursuant to the custodian agreement, State Street Bank and Trust Company (SSBT) may, in its discretion, advance funds to the Funds to make properly authorized payments. When such payments result in an overdraft, the Funds are obligated to repay SSBT at the current rate of interest charged by SSBT for secured loans (currently, the Federal Funds rate plus 2%). This obligation is payable on demand to SSBT. SSBT has a lien on a Fund’s assets to the extent of any overdraft. At September 30, 2017, the Municipal Fund II, California Fund II, Michigan Fund and New Jersey Fund had a payment due to SSBT pursuant to the foregoing arrangement of $246,921, $164,094, $31,935 and $127,307, respectively. Based on the short-term nature of these payments and the variable interest rate, the carrying value of the overdraft advances approximated its fair value at September 30, 2017. If measured at fair value, overdraft advances would have been considered as Level 2 in the fair value hierarchy (see Note 10) at September 30, 2017. The Funds’ average overdraft advances during the year ended September 30, 2017 were not significant.

9  Financial Instruments

The Funds may trade in financial instruments with off-balance sheet risk in the normal course of their investing activities. These financial instruments may include financial futures contracts and may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. The notional or contractual amounts of these instruments represent the investment a Fund has in particular classes of financial instruments and do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. A summary of obligations under these financial instruments at September 30, 2017 is included in the Portfolio of Investments. At September 30, 2017, the Funds had sufficient cash and/or securities to cover commitments under these contracts.

Each Fund is subject to interest rate risk in the normal course of pursuing its investment objective. Because the Funds hold fixed-rate bonds, the value of these bonds may decrease if interest rates rise. The Funds enter into U.S. Treasury futures contracts to hedge against changes in interest rates.

The fair values of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) and whose primary underlying risk exposure is interest rate risk at September 30, 2017 were as follows:

 

     New Jersey
Fund
     Pennsylvania
Fund
 

Asset Derivative:

    

Futures Contracts

  $ 35,083 (1)     $ 50,119 (1) 

Total

  $ 35,083      $ 50,119  

 

(1) 

Amount represents cumulative unrealized appreciation on futures contracts. Only the current day’s variation margin on open futures contracts is reported within the Statement of Assets and Liabilities as Receivable or Payable for variation margin on open financial futures contracts, as applicable.

The effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) on the Statement of Operations and whose primary underlying risk exposure is interest rate risk for the year ended September 30, 2017 was as follows:

 

     Municipal
Fund II
     California
Fund II
     Massachusetts
Fund
 

Realized Gain (Loss) on Derivatives Recognized in Income

  $ 319,055 (1)     $ 226,528 (1)     $ 107,081 (1) 

Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income

  $ (82,096 )(2)     $ (44,310 )(2)     $ (25,478 )(2) 

 

(1) 

Statement of Operations location: Net realized gain (loss) – Financial futures contracts.

 

(2) 

Statement of Operations location: Change in unrealized appreciation (depreciation) – Financial futures contracts.

 

  71  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Notes to Financial Statements — continued

 

 

 

     New Jersey
Fund
     New York
Fund II
     Pennsylvania
Fund
 

Realized Gain (Loss) on Derivatives Recognized in Income

  $ 146,970 (1)     $ 178,469 (1)     $ 209,957 (1) 

Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income

  $ (4,549 )(2)     $ (42,463 )(2)     $ (6,499 )(2) 

 

(1) 

Statement of Operations location: Net realized gain (loss) – Financial futures contracts.

 

(2) 

Statement of Operations location: Change in unrealized appreciation (depreciation) – Financial futures contracts.

The average notional cost of futures contracts outstanding during the year ended September 30, 2017, which is indicative of the volume of this derivative type, was approximately as follows:

 

     Municipal
Fund II
     California
Fund II
     Massachusetts
Fund
 

Average Notional Cost:

 

     

Futures Contracts — Short

  $ 4,162,000      $ 3,573,000      $ 1,184,000  
       
     New Jersey
Fund
     New York
Fund II
     Pennsylvania
Fund
 

Average Notional Cost:

 

     

Futures Contracts — Short

  $ 2,176,000      $ 1,973,000      $ 3,109,000  

10  Fair Value Measurements

Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

 

 

Level 1 – quoted prices in active markets for identical investments

 

 

Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

 

 

Level 3 – significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments)

In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

At September 30, 2017, the hierarchy of inputs used in valuing the Funds’ investments and open derivative instruments, which are carried at value, were as follows:

 

Municipal Fund II

 
Asset Description   Level 1      Level 2      Level 3      Total  

Tax-Exempt Investments

  $      $ 219,383,684      $         —      $ 219,383,684  

Total Investments

  $      $ 219,383,684      $      $ 219,383,684  
          

California Fund II

 
Asset Description   Level 1      Level 2      Level 3      Total  

Tax-Exempt Investments

  $      $ 82,553,899      $      $ 82,553,899  

Total Investments

  $      $ 82,553,899      $      $ 82,553,899  

 

  72  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Notes to Financial Statements — continued

 

 

Massachusetts Fund

 
Asset Description   Level 1      Level 2      Level 3      Total  

Tax-Exempt Investments

  $      $ 39,733,005      $      $ 39,733,005  

Total Investments

  $      $ 39,733,005      $      $ 39,733,005  
          

Michigan Fund

 
Asset Description   Level 1      Level 2      Level 3      Total  

Tax-Exempt Investments

  $      $ 35,920,920      $      $ 35,920,920  

Total Investments

  $      $ 35,920,920      $      $ 35,920,920  
          

New Jersey Fund

 
Asset Description   Level 1      Level 2      Level 3      Total  

Tax-Exempt Investments

  $      $ 60,220,603      $      $ 60,220,603  

Total Investments

  $      $ 60,220,603      $      $ 60,220,603  

Futures Contracts

  $ 35,083      $      $      $ 35,083  

Total

  $ 35,083      $ 60,220,603      $      $ 60,255,686  
          

New York Fund II

 
Asset Description   Level 1      Level 2      Level 3      Total  

Tax-Exempt Investments

  $      $ 56,174,591      $      $ 56,174,591  

Total Investments

  $      $ 56,174,591      $      $ 56,174,591  
          

Ohio Fund

 
Asset Description   Level 1      Level 2      Level 3      Total  

Tax-Exempt Investments

  $      $ 54,733,614      $      $ 54,733,614  

Total Investments

  $      $ 54,733,614      $      $ 54,733,614  
          

Pennsylvania Fund

 
Asset Description   Level 1      Level 2      Level 3      Total  

Tax-Exempt Investments

  $      $ 64,341,737      $      $ 64,341,737  

Total Investments

  $      $ 64,341,737      $      $ 64,341,737  

Futures Contracts

  $ 50,119      $      $      $ 50,119  

Total

  $ 50,119      $ 64,341,737      $      $ 64,391,856  

The Funds held no investments or other financial instruments as of September 30, 2016 whose fair value was determined using Level 3 inputs. At September 30, 2017, there were no investments transferred between Level 1 and Level 2 during the year then ended.

 

  73  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Report of Independent Registered Public Accounting Firm

 

 

To the Trustees and Shareholders of Eaton Vance Municipal Bond Fund II, Eaton Vance California Municipal Bond Fund II, Eaton Vance Massachusetts Municipal Bond Fund, Eaton Vance Michigan Municipal Bond Fund, Eaton Vance New Jersey Municipal Bond Fund, Eaton Vance New York Municipal Bond Fund II, Eaton Vance Ohio Municipal Bond Fund, and Eaton Vance Pennsylvania Municipal Bond Fund:

We have audited the accompanying statements of assets and liabilities of Eaton Vance Municipal Bond Fund II, Eaton Vance California Municipal Bond Fund II, Eaton Vance Massachusetts Municipal Bond Fund, Eaton Vance Michigan Municipal Bond Fund, Eaton Vance New Jersey Municipal Bond Fund, Eaton Vance New York Municipal Bond Fund II, Eaton Vance Ohio Municipal Bond Fund, and Eaton Vance Pennsylvania Municipal Bond Fund (collectively, the “Funds”), including the portfolios of investments, as of September 30, 2017, and the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of September 30, 2017, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of Eaton Vance Municipal Bond Fund II, Eaton Vance California Municipal Bond Fund II, Eaton Vance Massachusetts Municipal Bond Fund, Eaton Vance Michigan Municipal Bond Fund, Eaton Vance New Jersey Municipal Bond Fund, Eaton Vance New York Municipal Bond Fund II, Eaton Vance Ohio Municipal Bond Fund, and Eaton Vance Pennsylvania Municipal Bond Fund as of September 30, 2017, the results of their operations and their cash flows for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Boston, Massachusetts

November 17, 2017

 

  74  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Federal Tax Information (Unaudited)

 

 

The Form 1099-DIV you receive in February 2018 will show the tax status of all distributions paid to your account in calendar year 2017. Shareholders are advised to consult their own tax adviser with respect to the tax consequences of their investment in the Funds. As required by the Internal Revenue Code and/or regulations, shareholders must be notified regarding exempt-interest dividends.

Exempt-Interest Dividends.  For the fiscal year ended September 30, 2017, the Funds designate the following percentages of distributions from net investment income as exempt-interest dividends:

 

Municipal Bond Fund II

    100.00

California Municipal Bond Fund II

    99.49

Massachusetts Municipal Bond Fund

    100.00

Michigan Municipal Bond Fund

    99.74

New Jersey Municipal Bond Fund

    98.95

New York Municipal Bond Fund II

    100.00

Ohio Municipal Bond Fund

    91.87

Pennsylvania Municipal Bond Fund

    98.05

 

  75  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Annual Meeting of Shareholders (Unaudited)

 

 

Each Fund held its Annual Meeting of Shareholders on July 20, 2017. The following action was taken by the shareholders:

Item 1.  The election of George J. Gorman, Helen Frame Peters, Susan J. Sutherland and Harriett Tee Taggart as Class III Trustees of each Fund for a three-year term expiring in 2020. Ms. Peters was elected solely by APS and iMTP shareholders, referred to as Preferred Shareholders.

 

    

Nominee for Class III Trustee

Elected by Preferred Shareholders:

Helen Frame Peters

   

Nominee for Class III Trustee

Elected by All Shareholders:

George J. Gorman

   

Nominee for Class III Trustee

Elected by All Shareholders:

Susan J. Sutherland(1)

   

Nominee for Class III Trustee

Elected by All Shareholders:

Harriett Tee Taggart(1)

 

Municipal Fund II

       

For

    1,779       9,012,904       8,998,117       8,994,565  

Withheld

    0       268,681       283,467       287,019  

California Fund II

       

For

    1,009       3,359,397       3,361,149       3,318,671  

Withheld

    0       170,022       168,270       210,748  

Massachusetts Fund

       

For

    543       1,597,609       1,597,609       1,597,609  

Withheld

    0       20,381       20,381       20,381  

Michigan Fund

       

For

    533       1,381,855       1,367,465       1,381,855  

Withheld

    0       74,272       88,662       74,272  

New Jersey Fund

       

For

    783       2,294,799       2,295,050       2,278,294  

Withheld

    0       125,898       125,647       142,403  

New York Fund II

       

For

    528       2,206,093       2,288,206       2,288,206  

Withheld

    0       115,040       32,927       32,927  

Ohio Fund

       

For

    662       2,311,993       2,333,478       2,333,478  

Withheld

    0       68,953       47,468       47,468  

Pennsylvania Fund

       

For

    863       2,518,494       2,520,806       2,489,106  

Withheld

    0       69,241       66,929       98,629  

 

(1) 

Excludes fractional shares

 

  76  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Dividend Reinvestment Plan

 

 

Each Fund offers a dividend reinvestment plan (Plan) pursuant to which shareholders may elect to have distributions automatically reinvested in common shares (Shares) of the Fund. You may elect to participate in the Plan by completing the Dividend Reinvestment Plan Application Form. If you do not participate, you will receive all distributions in cash paid by check mailed directly to you by American Stock Transfer & Trust Company, LLC (AST) as dividend paying agent. On the distribution payment date, if the NAV per Share is equal to or less than the market price per Share plus estimated brokerage commissions, then new Shares will be issued. The number of Shares shall be determined by the greater of the NAV per Share or 95% of the market price. Otherwise, Shares generally will be purchased on the open market by AST, the Plan agent (Agent). Distributions subject to income tax (if any) are taxable whether or not Shares are reinvested.

If your Shares are in the name of a brokerage firm, bank, or other nominee, you can ask the firm or nominee to participate in the Plan on your behalf. If the nominee does not offer the Plan, you will need to request that the Fund’s transfer agent re-register your Shares in your name or you will not be able to participate.

The Agent’s service fee for handling distributions will be paid by the Fund. Plan participants will be charged their pro rata share of brokerage commissions on all open-market purchases.

Plan participants may withdraw from the Plan at any time by writing to the Agent at the address noted on the following page. If you withdraw, you will receive Shares in your name for all Shares credited to your account under the Plan. If a participant elects by written notice to the Agent to sell part or all of his or her Shares and remit the proceeds, the Agent is authorized to deduct a $5.00 fee plus brokerage commissions from the proceeds.

If you wish to participate in the Plan and your Shares are held in your own name, you may complete the form on the following page and deliver it to the Agent. Any inquiries regarding the Plan can be directed to the Agent at 1-866-439-6787.

 

  77  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Application for Participation in Dividend Reinvestment Plan

 

 

 

This form is for shareholders who hold their common shares in their own names. If your common shares are held in the name of a brokerage firm, bank, or other nominee, you should contact your nominee to see if it will participate in the Plan on your behalf. If you wish to participate in the Plan, but your brokerage firm, bank, or nominee is unable to participate on your behalf, you should request that your common shares be re-registered in your own name which will enable your participation in the Plan.

The following authorization and appointment is given with the understanding that I may terminate it at any time by terminating my participation in the Plan as provided in the terms and conditions of the Plan.

 

 

Please print exact name on account

 

Shareholder signature                                                           Date

 

Shareholder signature                                                           Date

Please sign exactly as your common shares are registered. All persons whose names appear on the share certificate must sign.

YOU SHOULD NOT RETURN THIS FORM IF YOU WISH TO RECEIVE YOUR DISTRIBUTIONS IN CASH. THIS IS NOT A PROXY.

This authorization form, when signed, should be mailed to the following address:

Eaton Vance Municipal Bond Funds

c/o American Stock Transfer & Trust Company, LLC

P.O. Box 922

Wall Street Station

New York, NY 10269-0560

 

 

Number of Employees

Each Fund is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as a closed-end management investment company and has no employees.

Number of Shareholders

As of September 30, 2017, Fund records indicate that there are 11, 4, 3, 5, 6, 11, 5 and 21 registered shareholders for Municipal Fund II, California Fund II, Massachusetts Fund, Michigan Fund, New Jersey Fund, New York Fund II, Ohio Fund and Pennsylvania Fund, respectively, and approximately 4,696, 1,425, 798, 957, 1,132, 1,044, 1,381 and 1,526 shareholders owning the Fund shares in street name, such as through brokers, banks and financial intermediaries for Municipal Fund II, California Fund II, Massachusetts Fund, Michigan Fund, New Jersey Fund, New York Fund II, Ohio Fund and Pennsylvania Fund, respectively.

If you are a street name shareholder and wish to receive Fund reports directly, which contain important information about a Fund, please write or call:

Eaton Vance Distributors, Inc.

Two International Place

Boston, MA 02110

1-800-262-1122

NYSE MKT symbols

 

Municipal Bond Fund II    EIV
California Municipal Bond Fund II    EIA
Massachusetts Municipal Bond Fund    MAB
Michigan Municipal Bond Fund    MIW
New Jersey Municipal Bond Fund    EMJ
New York Municipal Bond Fund II    NYH
Ohio Municipal Bond Fund    EIO
Pennsylvania Municipal Bond Fund    EIP
 

 

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Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Board of Trustees’ Contract Approval

 

 

Overview of the Contract Review Process

The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that each investment advisory agreement between a fund and its investment adviser will continue in effect from year to year only if its continuation is approved at least annually by the fund’s board of trustees, including by a vote of a majority of the trustees who are not “interested persons” of the fund (“Independent Trustees”), cast in person at a meeting called for the purpose of considering such approval.

At a meeting of the Boards of Trustees (each a “Board”) of the registered investment companies advised by either Eaton Vance Management or its affiliate, Boston Management and Research, (the “Eaton Vance Funds”) held on April 25, 2017, the Board, including a majority of the Independent Trustees, voted to approve continuation of existing investment advisory and sub-advisory agreements for the Eaton Vance Funds for an additional one-year period. In voting its approval, the Board relied upon the affirmative recommendation of its Contract Review Committee, which is a committee comprised exclusively of Independent Trustees. Prior to making its recommendation, the Contract Review Committee reviewed information furnished by each adviser to the Eaton Vance Funds (including information specifically requested by the Board) for a series of meetings of the Contract Review Committee held between February and April 2017. The Contract Review Committee also considered information received at prior meetings of the Board and its committees, as relevant to its annual evaluation of the investment advisory and sub-advisory agreements.

The information that the Board considered included, among other things, the following (for funds that invest through one or more underlying portfolio(s), references to “each fund” in this section may include information that was considered at the portfolio-level):

Information about Fees, Performance and Expenses

 

 

A report from an independent data provider comparing the advisory and related fees paid by each fund with fees paid by comparable funds as identified by the independent data provider (“comparable funds”);

 

 

A report from an independent data provider comparing each fund’s total expense ratio and its components to comparable funds;

 

 

A report from an independent data provider comparing the investment performance of each fund (including, where relevant, yield data, Sharpe ratios and information ratios) to the investment performance of comparable funds over various time periods;

 

 

Data regarding investment performance in comparison to benchmark indices, as well as customized groups of peer funds and blended indices identified by the adviser in consultation with the Board;

 

 

For each fund, comparative information concerning the fees charged and the services provided by each adviser in managing other accounts (including mutual funds, other collective investment funds and institutional accounts) using investment strategies and techniques similar to those used in managing such fund;

 

 

Profitability analyses for each adviser with respect to each fund;

Information about Portfolio Management and Trading

 

 

Descriptions of the investment management services provided to each fund, including the investment strategies and processes it employs;

 

 

The procedures and processes used to determine the fair value of fund assets and actions taken to monitor and test the effectiveness of such procedures and processes;

 

 

Information about each adviser’s policies and practices with respect to trading, including each adviser’s processes for monitoring best execution of portfolio transactions;

 

 

Information about the allocation of brokerage transactions and the benefits received by each adviser as a result of brokerage allocation, including information concerning the acquisition of research through client commission arrangements and policies with respect to “soft dollars”;

 

 

Data relating to portfolio turnover rates of each fund;

Information about each Adviser

 

 

Reports detailing the financial results and condition of each adviser;

 

 

Descriptions of the qualifications, education and experience of the individual investment professionals whose responsibilities include portfolio management and investment research for the funds, and information relating to their compensation and responsibilities with respect to managing other mutual funds and investment accounts;

 

 

The Code of Ethics of each adviser and its affiliates, together with information relating to compliance with and the administration of such codes;

 

 

Policies and procedures relating to proxy voting and the handling of corporate actions and class actions;

 

 

Information concerning the resources devoted to compliance efforts undertaken by each adviser and its affiliates (including descriptions of various compliance programs) and their record of compliance;

 

 

Information concerning the business continuity and disaster recovery plans of each adviser and its affiliates;

 

 

A description of Eaton Vance Management’s procedures for overseeing third party advisers and sub-advisers, including with respect to regulatory and compliance issues, investment management and other matters;

 

  79  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Board of Trustees’ Contract Approval — continued

 

 

Other Relevant Information

 

 

Information concerning the nature, cost and character of the administrative and other non-investment advisory services provided by Eaton Vance Management and its affiliates;

 

 

Information concerning management of the relationship with the custodian, subcustodians and fund accountants by each adviser or the funds’ administrator; and

 

 

The terms of each investment advisory agreement.

Over the course of the twelve-month period ended April 30, 2017, with respect to one or more funds, the Board met ten times and the Contract Review Committee, the Audit Committee, the Governance Committee, the Portfolio Management Committee and the Compliance Reports and Regulatory Matters Committee, each of which is a Committee comprised solely of Independent Trustees, met seven, thirteen, six, eight and ten times, respectively. At such meetings, the Trustees participated in investment and performance reviews with the portfolio managers and other investment professionals of each investment adviser relating to each fund, and considered various investment and trading strategies used in pursuing each fund’s investment objective, such as the use of derivative instruments, as well as risk management techniques. The Board and its Committees also evaluated issues pertaining to industry and regulatory developments, compliance procedures, fund governance and other issues with respect to the funds, and received and participated in reports and presentations provided by Eaton Vance Management and other fund advisers with respect to such matters. In addition to the formal meetings of the Board and its Committees, the Independent Trustees hold regular teleconferences in between meetings to discuss, among other topics, matters relating to the continuation of investment advisory and sub-advisory agreements.

For funds that invest through one or more underlying portfolios, the Board considered similar information about the portfolio(s) when considering the approval of investment advisory agreements. In addition, in cases where the fund’s investment adviser has engaged a sub-adviser, the Board considered similar information about the sub-adviser when considering the approval of any sub-advisory agreement.

The Contract Review Committee was assisted throughout the contract review process by Goodwin Procter LLP, independent legal counsel for the Independent Trustees. The members of the Contract Review Committee relied upon the advice of such counsel and their own business judgment in determining the material factors to be considered in evaluating each investment advisory and sub-advisory agreement and the weight to be given to each such factor. The conclusions reached with respect to each investment advisory and sub-advisory agreement were based on a comprehensive evaluation of all the information provided and not any single factor. Moreover, each member of the Contract Review Committee may have placed varying emphasis on particular factors in reaching conclusions with respect to each investment advisory and sub-advisory agreement. In evaluating each investment advisory and sub-advisory agreement, including the specific fee structures and other terms of the agreements, the Contract Review Committee was informed by multiple years of analysis and discussion among the Independent Trustees and the Eaton Vance Funds’ advisers and sub-advisers.

Results of the Process

Based on its consideration of the foregoing, and such other information as it deemed relevant, including the factors and conclusions described below, the Contract Review Committee concluded that the continuation of the investment advisory agreements of the following funds:

 

 

Eaton Vance Municipal Bond Fund II

 

 

Eaton Vance California Municipal Bond Fund II

 

 

Eaton Vance Massachusetts Municipal Bond Fund

 

 

Eaton Vance Michigan Municipal Bond Fund

 

 

Eaton Vance New Jersey Municipal Bond Fund

 

 

Eaton Vance New York Municipal Bond Fund II

 

 

Eaton Vance Ohio Municipal Bond Fund

 

 

Eaton Vance Pennsylvania Municipal Bond Fund

(the “Funds”), each with Eaton Vance Management (the “Adviser”), including their fee structures, is in the interests of shareholders and, therefore, the Contract Review Committee recommended to the Board approval of each agreement. The Board accepted the recommendation of the Contract Review Committee based on the material factors considered and conclusions reached by the Contract Review Committee with respect to each agreement. Accordingly, the Board, including a majority of the Independent Trustees, voted to approve continuation of the investment advisory agreement for each Fund.

Nature, Extent and Quality of Services

In considering whether to approve the investment advisory agreements of the Funds, the Board evaluated the nature, extent and quality of services provided to the Funds by the Adviser.

The Board considered the Adviser’s management capabilities and investment process with respect to the types of investments held by each Fund, including the education, experience and number of its investment professionals and other personnel who provide portfolio management, investment research, and similar services to the Funds. In particular, the Board considered the abilities and experience of the Adviser’s investment professionals in analyzing factors

 

  80  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Board of Trustees’ Contract Approval — continued

 

 

such as credit risk, tax efficiency, and special considerations relevant to investing in municipal bonds. The Board considered the Adviser’s municipal bond team, which includes investment professionals and credit specialists who provide services to the Funds. The Board also took into account the resources dedicated to portfolio management and other services, as well as the compensation methods of the Adviser and other factors, such as the reputation and resources of the Adviser to recruit and retain highly qualified research, advisory and supervisory investment professionals. In addition, the Board considered the time and attention devoted to the Eaton Vance Funds, including each Fund, by senior management, as well as the infrastructure, operational capabilities and support staff in place to assist in the portfolio management and operations of the Funds, including the provision of administrative services. The Board also considered the business-related and other risks to which the Adviser or its affiliates may be subject in managing the Funds.

The Board considered the compliance programs of the Adviser and relevant affiliates thereof. Among other matters, the Board considered compliance and reporting matters relating to personal trading by investment professionals, selective disclosure of portfolio holdings, late trading, frequent trading, portfolio valuation, business continuity and the allocation of investment opportunities. The Board also considered the responses of the Adviser and its affiliates to requests in recent years from regulatory authorities such as the Securities and Exchange Commission and the Financial Industry Regulatory Authority.

The Board was aware that on April 24, 2017 a former employee of the Adviser agreed to plead guilty to fraud charges arising from the individual’s prior activities as an equity options trader for certain Eaton Vance Funds. The Board was informed that the Adviser became aware of the matter on April 18, 2017, at which time management contacted federal authorities, alerted the Board and began an internal investigation. The Adviser represented to the Board that, based on information available as of April 25, 2017, management had no reason to believe that any other employee of the Adviser or its affiliates was involved in any wrongful activities or that any fund had been materially harmed. The Adviser agreed to keep the Board fully apprised as additional information is learned, and assured the Board that any fund harmed by the former employee’s wrongful activities will be made whole, as determined in consultation with the Board. The Board concluded that the Adviser’s actions in response to these events are appropriate and consistent with the Adviser’s commitment to protect and provide quality services to the Eaton Vance Funds.

The Board considered shareholder and other administrative services provided or managed by Eaton Vance Management and its affiliates, including transfer agency and accounting services. The Board evaluated the benefits to shareholders of investing in a fund that is a part of a large fund complex offering exposure to a variety of asset classes and investment disciplines.

After consideration of the foregoing factors, among others, the Board concluded that the nature, extent and quality of services provided by the Adviser, taken as a whole, are appropriate and consistent with the terms of the investment advisory agreements.

Fund Performance

The Board compared each Fund’s investment performance to that of comparable funds and appropriate benchmark indices and, where relevant, a customized peer group of similarly managed funds, and assessed each Fund’s performance on the basis of total return and current income return. The Board’s review included comparative performance data for the one-, three-, five- and ten-year periods ended September 30, 2016 for each Fund. The Board considered, among other things, the Adviser’s efforts to generate competitive levels of tax-exempt current income over time through investments that, relative to comparable funds, focus on higher quality municipal bonds with longer maturities. With respect to Eaton Vance New York Municipal Bond Fund II, the Board noted that security selection was the primary detractor from the Fund’s performance relative to its benchmark. With respect to all other Funds, the Board concluded that the performance of each Fund was satisfactory.

Management Fees and Expenses

The Board considered contractual fee rates payable by each Fund for advisory and administrative services (referred to collectively as “management fees”). As part of its review, the Board considered each Fund’s management fees and total expense ratio for the one year period ended September 30, 2016, as compared to those of comparable funds, before and after giving effect to any undertaking to waive fees or reimburse expenses. The Board also considered factors that had an impact on Fund expense ratios relative to comparable funds, and, with respect to Eaton Vance Massachusetts Municipal Bond Fund and Eaton Vance Michigan Municipal Bond Fund, certain Fund specific factors, as identified by management in response to inquiries from the Contract Review Committee.

After considering the foregoing information, and in light of the nature, extent and quality of the services provided by the Adviser, the Board concluded that the management fees charged for advisory and related services are reasonable.

Profitability and Other “Fall-Out” Benefits

The Board considered the level of profits realized by the Adviser and relevant affiliates thereof in providing investment advisory and administrative services to each Fund and to all Eaton Vance Funds as a group. The Board considered the level of profits realized without regard to marketing support or other payments by the Adviser and its affiliates to third parties in respect of distribution services. The Board also considered other direct or indirect fall-out benefits received by the Adviser and its affiliates in connection with their relationships with the Funds, including the benefits of research services that may be available to the Adviser as a result of securities transactions effected for the Funds and other investment advisory clients.

 

  81  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Board of Trustees’ Contract Approval — continued

 

 

The Board concluded that, in light of the foregoing factors and the nature, extent and quality of the services rendered, the profits realized by the Adviser and its affiliates are deemed not to be excessive.

Economies of Scale

In reviewing management fees and profitability, the Board also considered the extent to which the Adviser and its affiliates, on the one hand, and each Fund, on the other hand, can expect to realize benefits from economies of scale as the assets of each Fund increase. The Board acknowledged the difficulty in accurately measuring the benefits resulting from economies of scale, if any, with respect to the management of any specific fund or group of funds. The Board reviewed data summarizing the increases and decreases in the assets of each Fund and of all Eaton Vance Funds as a group over various time periods, and evaluated the extent to which the total expense ratio of each Fund and the profitability of the Adviser and its affiliates may have been affected by such increases or decreases. Based upon the foregoing, the Board concluded that each Fund currently shares in any benefits from economies of scale. The Board also considered the fact that the Funds are not continuously offered and that the Funds’ assets are not expected to increase materially in the foreseeable future. The Board concluded that, in light of the level of the Adviser’s profits with respect to each Fund, the implementation of breakpoints in the advisory fee schedules is not warranted at this time.

 

  82  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Management and Organization

 

 

Fund Management.  The Trustees and officers of Eaton Vance Municipal Bond Fund II, Eaton Vance California Municipal Bond Fund II, Eaton Vance Massachusetts Municipal Bond Fund, Eaton Vance Michigan Municipal Bond Fund, Eaton Vance New Jersey Municipal Bond Fund, Eaton Vance New York Municipal Bond Fund II, Eaton Vance Ohio Municipal Bond Fund, and Eaton Vance Pennsylvania Municipal Bond Fund (the Funds) are responsible for the overall management and supervision of the Funds’ affairs. The Trustees and officers of the Funds are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. The “Noninterested Trustees” consist of those Trustees who are not “interested persons” of the Funds, as that term is defined under the 1940 Act. The business address of each Trustee and officer is Two International Place, Boston, Massachusetts 02110. As used below, “EVC” refers to Eaton Vance Corp., “EV” refers to Eaton Vance, Inc., “EVM” refers to Eaton Vance Management, “BMR” refers to Boston Management and Research and “EVD” refers to Eaton Vance Distributors, Inc. EVC and EV are the corporate parent and trustee, respectively, of EVM and BMR. EVD is a wholly-owned subsidiary of EVC. Each officer affiliated with Eaton Vance may hold a position with other Eaton Vance affiliates that is comparable to his or her position with EVM listed below. Each Trustee oversees 176 portfolios in the Eaton Vance Complex (including all master and feeder funds in a master feeder structure). Each officer serves as an officer of certain other Eaton Vance funds. Each Trustee serves for a three year term. Each officer serves until his or her successor is elected.

 

Name and Year of Birth   

Position(s)

with the
Funds

    

Term Expiring;

Trustee Since(1)

    

Principal Occupation(s) and Directorships

During Past Five Years and Other Relevant Experience

Interested Trustee

            

Thomas E. Faust Jr.

1958

  

Class II

Trustee

    

Until 2019.

Trustee since 2007.

    

Chairman, Chief Executive Officer and President of EVC, Director and President of EV, Chief Executive Officer and President of EVM and BMR, and Director of EVD. Trustee and/or officer of 176 registered investment companies. Mr. Faust is an interested person because of his positions with EVM, BMR, EVD, EVC and EV, which are affiliates of the Funds.

Directorships in the Last Five Years.(2) Director of EVC and Hexavest Inc. (investment management firm).

            

Noninterested Trustees

            

Mark R. Fetting

1954

  

Class I

Trustee

    

Until 2018.

Trustee since 2016.

    

Private investor. Formerly held various positions at Legg Mason, Inc. (investment management firm) (2000-2012), including President, Chief Executive Officer, Director and Chairman (2008-2012), Senior Executive Vice President (2004-2008) and Executive Vice President (2001-2004). Formerly, President of Legg Mason family of funds (2001-2008). Formerly, Division President and Senior Officer of Prudential Financial Group, Inc. and related companies (investment management firm) (1991-2000).

Directorships in the Last Five Years. Formerly, Director and Chairman of Legg Mason, Inc. (2008-2012); Director/Trustee and Chairman of Legg Mason family of funds (14 funds) (2008-2012); and Director/Trustee of the Royce family of funds (35 funds) (2001-2012).

Cynthia E. Frost

1961

  

Class II

Trustee

    

Until 2019.

Trustee

since 2014.

    

Private investor. Formerly, Chief Investment Officer of Brown University (university endowment) (2000-2012); Formerly, Portfolio Strategist for Duke Management Company (university endowment manager) (1995-2000); Formerly, Managing Director, Cambridge Associates (investment consulting company) (1989-1995); Formerly, Consultant, Bain and Company (management consulting firm) (1987-1989); Formerly, Senior Equity Analyst, BA Investment Management Company (1983-1985).

Directorships in the Last Five Years. None.

George J. Gorman

1952

  

Class III

Trustee

    

Until 2020.

Trustee

since 2014.

    

Principal at George J. Gorman LLC (consulting firm). Formerly, Senior Partner at Ernst & Young LLP (a registered public accounting firm) (1974-2009).

Directorships in the Last Five Years. Formerly, Trustee of the BofA Funds Series Trust (11 funds) (2011-2014) and of the Ashmore Funds (9 funds) (2010-2014).

Valerie A. Mosley

1960

  

Class I

Trustee(3)

    

Until 2018.

Trustee

since 2014.

    

Chairwoman and Chief Executive Officer of Valmo Ventures (a consulting and investment firm). Former Partner and Senior Vice President, Portfolio Manager and Investment Strategist at Wellington Management Company, LLP (investment management firm) (1992-2012). Former Chief Investment Officer, PG Corbin Asset Management (1990-1992). Formerly worked in institutional corporate bond sales at Kidder Peabody (1986-1990).

Directorships in the Last Five Years.(2) Director of Dynex Capital, Inc. (mortgage REIT) (since 2013).

 

  83  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Management and Organization — continued

 

 

Name and Year of Birth   

Position(s)

with the
Funds

    

Term Expiring;

Trustee Since(1)

    

Principal Occupation(s) and Directorships

During Past Five Years and Other Relevant Experience

Noninterested Trustees (continued)

         

William H. Park

1947

  

Chairperson of the Board and Class I

Trustee

    

Until 2018.

Chairperson of the Board

since 2016 and Trustee

since 2003.

    

Private investor. Formerly, Consultant (management and transactional) (2012-2014). Formerly, Chief Financial Officer, Aveon Group L.P. (investment management firm) (2010-2011). Formerly, Vice Chairman, Commercial Industrial Finance Corp. (specialty finance company) (2006-2010). Formerly, President and Chief Executive Officer, Prizm Capital Management, LLC (investment management firm) (2002-2005). Formerly, Executive Vice President and Chief Financial Officer, United Asset Management Corporation (investment management firm) (1982-2001). Formerly, Senior Manager, Price Waterhouse (now PricewaterhouseCoopers) (a registered public accounting firm) (1972-1981).

Directorships in the Last Five Years.(2) None.

Helen Frame Peters

1948

  

Class III

Trustee(3)

    

Until 2020.

Trustee

since 2008.

    

Professor of Finance, Carroll School of Management, Boston College. Formerly, Dean, Carroll School of Management, Boston College (2000-2002). Formerly, Chief Investment Officer, Fixed Income, Scudder Kemper Investments (investment management firm) (1998-1999). Formerly, Chief Investment Officer, Equity and Fixed Income, Colonial Management Associates (investment management firm) (1991-1998).

Directorships in the Last Five Years.(2) Formerly, Director of BJ’s Wholesale Club, Inc. (wholesale club retailer) (2004-2011). Formerly, Trustee of SPDR Index Shares Funds and SPDR Series Trust (exchange traded funds) (2000-2009). Formerly, Director of Federal Home Loan Bank of Boston (a bank for banks) (2007-2009).

Susan J. Sutherland

1957

  

Class III

Trustee

    

Until 2020.

Trustee

since 2015.

    

Private investor. Formerly, Associate, Counsel and Partner at Skadden, Arps, Slate, Meagher & Flom LLP (law firm) (1982-2013).

Directorships in the Last Five Years. Formerly, Director of Montpelier Re Holdings Ltd. (global provider of customized insurance and reinsurance products) (2013-2015).

Harriett Tee Taggart

1948

  

Class III

Trustee

    

Until 2020.

Trustee

since 2011.

    

Managing Director, Taggart Associates (a professional practice firm). Formerly, Partner and Senior Vice President, Wellington Management Company, LLP (investment management firm) (1983-2006).

Directorships in the Last Five Years.(2) Director of Albemarle Corporation (chemicals manufacturer) (since 2007) and The Hanover Group (specialty property and casualty insurance company) (since 2009). Formerly, Director of Lubrizol Corporation (specialty chemicals) (2007-2011).

Scott E. Wennerholm

1959

  

Class II

Trustee

    

Until 2019.

Trustee

since 2016.

    

Trustee at Wheelock College (postsecondary institution) (since 2012). Formerly, Consultant at GF Parish Group (executive recruiting firm) (2016-2017). Formerly, Chief Operating Officer and Executive Vice President at BNY Mellon Asset Management (investment management firm) (2005-2011). Formerly, Chief Operating Officer and Chief Financial Officer at Natixis Global Asset Management (investment management firm) (1997-2004). Formerly, Vice President at Fidelity Investments Institutional Services (investment management firm) (1994-1997).

Directorships in the Last Five Years. None.

            

Principal Officers who are not Trustees

Name and Year of Birth   

Position(s)
with the

Funds

    

Officer

Since(4)

    

Principal Occupation(s)

During Past Five Years

Payson F. Swaffield

1956

   President      2003      Vice President and Chief Income Investment Officer of EVM and BMR. Also Vice President of Calvert Research and Management (“CRM”).

Maureen A. Gemma

1960

   Vice President, Secretary and Chief Legal Officer      2005      Vice President of EVM and BMR. Also Vice President of CRM.

James F. Kirchner

1967

   Treasurer      2007      Vice President of EVM and BMR. Also Vice President of CRM.

 

  84  


Eaton Vance

Municipal Bond Funds

September 30, 2017

 

Management and Organization — continued

 

 

Name and Year of Birth   

Position(s)
with the

Funds

     Officer
Since
(4)
    

Principal Occupation(s)

During Past Five Years

Principal Officers who are not Trustees (continued)

    

Richard F. Froio

1968

   Chief Compliance Officer      2017      Vice President of EVM and BMR since 2017. Formerly Deputy Chief Compliance Officer (Adviser/Funds) and Chief Compliance Officer (Distribution) at PIMCO (2012-2017) and Managing Director at BlackRock/Barclays Global Investors (2009-2012).

 

(1) 

Year first appointed to serve as Trustee for a fund in the Eaton Vance family of funds. Each Trustee has served continuously since appointment unless indicated otherwise. Each Trustee holds office until the annual meeting for the year in which his or her term expires and until his or her successor is elected and qualified, subject to a prior death, resignation, retirement, disqualification or removal.

(2) 

During their respective tenures, the Trustees (except for Mmes. Frost and Sutherland and Messrs. Fetting, Gorman and Wennerholm) also served as Board members of one or more of the following funds (which operated in the years noted): eUnitsTM 2 Year U.S. Market Participation Trust: Upside to Cap / Buffered Downside (launched in 2012 and terminated in 2014); eUnitsTM 2 Year U.S. Market Participation Trust II: Upside to Cap / Buffered Downside (launched in 2012 and terminated in 2014); and Eaton Vance National Municipal Income Trust (launched in 1998 and terminated in 2009). However, Ms. Mosley did not serve as a Board member of eUnitsTM 2 Year U.S. Market Participation Trust: Upside to Cap / Buffered Downside (launched in 2012 and terminated in 2014).

(3) 

APS Trustee.

(4) 

Year first elected to serve as officer of a fund in the Eaton Vance family of funds when the officer has served continuously. Otherwise, year of most recent election as an officer of a fund in the Eaton Vance family of funds. Titles may have changed since initial election.

 

  85  


Eaton Vance Funds

 

IMPORTANT NOTICES

 

 

Privacy.  The Eaton Vance organization is committed to ensuring your financial privacy. Each of the financial institutions identified below has in effect the following policy (“Privacy Policy”) with respect to nonpublic personal information about its customers:

 

 

Only such information received from you, through application forms or otherwise, and information about your Eaton Vance fund transactions will be collected. This may include information such as name, address, social security number, tax status, account balances and transactions.

 

 

None of such information about you (or former customers) will be disclosed to anyone, except as permitted by law (which includes disclosure to employees necessary to service your account). In the normal course of servicing a customer’s account, Eaton Vance may share information with unaffiliated third parties that perform various required services such as transfer agents, custodians and broker-dealers.

 

 

Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information.

 

 

We reserve the right to change our Privacy Policy at any time upon proper notification to you. Customers may want to review our Privacy Policy periodically for changes by accessing the link on our homepage: www.eatonvance.com.

Our pledge of privacy applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management (International) Limited, Eaton Vance Management’s Real Estate Investment Group and Boston Management and Research. In addition, our Privacy Policy applies only to those Eaton Vance customers who are individuals and who have a direct relationship with us. If a customer’s account (i.e., fund shares) is held in the name of a third-party financial advisor/broker-dealer, it is likely that only such advisor’s privacy policies apply to the customer. This notice supersedes all previously issued privacy disclosures. For more information about Eaton Vance’s Privacy Policy, please call 1-800-262-1122.

Delivery of Shareholder Documents.  The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. American Stock Transfer & Trust Company, LLC (“AST”), the closed-end funds transfer agent, or your financial advisor, may household the mailing of your documents indefinitely unless you instruct AST, or your financial advisor, otherwise. If you would prefer that your Eaton Vance documents not be householded, please contact AST or your financial advisor. Your instructions that householding not apply to delivery of your Eaton Vance documents will typically be effective within 30 days of receipt by AST or your financial advisor.

Portfolio Holdings.  Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) will file a schedule of portfolio holdings on Form N-Q with the SEC for the first and third quarters of each fiscal year. The Form N-Q will be available on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov. Form N-Q may also be reviewed and copied at the SEC’s public reference room in Washington, D.C. (call 1-800-732-0330 for information on the operation of the public reference room).

Proxy Voting.  From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.

Share Repurchase Program.  The Funds’ Boards of Trustees have approved a share repurchase program authorizing each Fund to repurchase up to 10% of its outstanding common shares as of the approved date in open-market transactions at a discount to net asset value. The repurchase program does not obligate a Fund to purchase a specific amount of shares. The Funds’ repurchase activity, including the number of shares purchased, average price and average discount to net asset value, is disclosed in the Funds’ annual and semi-annual reports to shareholders.

Additional Notice to Shareholders.  If applicable, a Fund may also redeem or purchase its outstanding preferred shares in order to maintain compliance with regulatory requirements, borrowing or rating agency requirements or for other purposes as it deems appropriate or necessary.

Closed-End Fund Information.  Eaton Vance closed-end funds make fund performance data and certain information about portfolio characteristics available on the Eaton Vance website shortly after the end of each month. Other information about the funds is available on the website. The funds’ net asset value per share is readily accessible on the Eaton Vance website. Portfolio holdings for the most recent month-end are also posted to the website approximately 30 days following the end of the month. This information is available at www.eatonvance.com on the fund information pages under “Individual Investors — Closed-End Funds”.

 

 

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Investment Adviser and Administrator

Eaton Vance Management

Two International Place

Boston, MA 02110

Custodian

State Street Bank and Trust Company

State Street Financial Center, One Lincoln Street

Boston, MA 02111

Transfer Agent

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, NY 11219

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

200 Berkeley Street

Boston, MA 02116-5022

Fund Offices

Two International Place

Boston, MA 02110

 


LOGO

1557    9.30.17


Item 2. Code of Ethics

The registrant has adopted a code of ethics applicable to its Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer. The registrant undertakes to provide a copy of such code of ethics to any person upon request, without charge, by calling 1-800-262-1122. The registrant has amended the code of ethics as described in Form N-CSR during the period covered by this report to make clarifying changes consistent with Rule 21F-17 of the Securities Exchange Act of 1934, as amended. The registrant has not granted any waiver, including an implicit waiver, from a provision of the code of ethics as described in Form N-CSR during the period covered by this report.

Item 3. Audit Committee Financial Expert

The registrant’s Board has designated William H. Park, an independent trustee, as its audit committee financial expert. Mr. Park is a certified public accountant who is a private investor. Previously, he served as a consultant, as the Chief Financial Officer of Aveon Group, L.P. (an investment management firm), as the Vice Chairman of Commercial Industrial Finance Corp. (specialty finance company), as President and Chief Executive Officer of Prizm Capital Management, LLC (investment management firm), as Executive Vice President and Chief Financial Officer of United Asset Management Corporation (an institutional investment management firm) and as a Senior Manager at Price Waterhouse (now PricewaterhouseCoopers) (an independent registered public accounting firm).

Item 4. Principal Accountant Fees and Services

Rule 2-01(c)(1)(ii)(A) of Regulation S-X (the “Loan Rule”) prohibits an accounting firm, such as the Fund’s principal accountant, Deloitte & Touche LLP (“D&T”), from having certain financial relationships with their audit clients and affiliated entities. Specifically, the Loan Rule provides, in relevant part, that an accounting firm generally would not be independent if it or a “covered person” of the accounting firm (within the meaning of applicable SEC rules relating to auditor independence) receives a loan from a lender that is a “record or beneficial owner of more than ten percent of the audit client’s equity securities.” Based on information provided to the Audit Committee of the Board of Trustees (the “Audit Committee”) of the Eaton Vance family of funds by D&T, certain relationships between D&T and its affiliates (“Deloitte Entities”) and one or more lenders who are record owners of shares of one or more funds within the Eaton Vance family of funds (the “Funds”) implicate the Loan Rule, calling into question D&T’s independence with respect to the Funds. The Funds are providing this disclosure to explain the facts and circumstances as well as D&T’s conclusions concerning D&T’s objectivity and impartiality with respect to the audits of the Funds notwithstanding the existence of one or more breaches of the Loan Rule.

On June 20, 2016, the U.S. Securities and Exchange Commission (the “SEC”) issued no-action relief to another mutual fund complex (see Fidelity Management & Research Company et al., No-Action Letter (June 20, 2016) (the “No-Action Letter”)) related to an auditor independence issue arising under the Loan Rule. In the No-Action Letter, the SEC indicated that it would not recommend enforcement action against the fund group if the auditor is not in compliance with the Loan Rule provided that: (1) the auditor has complied with PCAOB Rule 3526(b)(1) and 3526(b)(2); (2) the auditor’s non-compliance under the Loan Rule is with respect to certain lending relationships; and (3) notwithstanding such non-compliance, the auditor has concluded that it is objective and impartial with respect to the issues encompassed within its engagement as auditor of the funds. The SEC has indicated that the no-action relief will expire 18 months from its issuance.

Based on information provided by D&T to the Audit Committee, the requirements of the No-Action Letter appear to be met with respect to D&T’s lending relationships described above. Among other things, D&T has advised the Audit Committee of its conclusion that the consequences of the breach of the Loan Rule have been satisfactorily addressed, that D&T’s objectivity and impartiality in the planning and conduct of the audits of the Fund’s financial statements has not been compromised and that, notwithstanding the breach, D&T is in a


position to continue as the auditor for the Funds and D&T does not believe any actions need to be taken with respect to previously issued reports by D&T. D&T has advised the Audit Committee that these conclusions were based in part on its consideration of the No-Action Letter and other relevant information communicated to the Audit Committee.

(a) –(d)

The following table presents the aggregate fees billed to the registrant for the registrant’s fiscal years ended September 30, 2016 and September 30, 2017 by D&T for professional services rendered for the audit of the registrant’s annual financial statements and fees billed for other services rendered by D&T during such periods.

 

Fiscal Years Ended

   9/30/16      9/30/17  

Audit Fees

   $ 24,000      $ 24,000  

Audit-Related Fees(1)

   $ 3,500      $ 0  

Tax Fees(2)

   $ 8,104      $ 8,226  

All Other Fees(3)

   $ 0      $ 0  
  

 

 

    

 

 

 

Total

   $ 35,604      $ 32,226  
  

 

 

    

 

 

 

 

(1)  Audit-related fees consist of the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under the category of audit fees and specifically include fees incurred to satisfy the requirements of the underwriter in conjunction with the private offering of the registrant’s Institutional MuniFund Term Preferred Shares (iMTP Shares).

 

(2)  Tax fees consist of the aggregate fees billed for professional services rendered by the principal accountant relating to tax compliance, tax advice, and tax planning and specifically include fees for tax return preparation and other related tax compliance/planning matters.

 

(3) All other fees consist of the aggregate fees billed for products and services provided by the principal accountant other than audit, audit-related, and tax services.

(e)(1) The registrant’s audit committee has adopted policies and procedures relating to the pre-approval of services provided by the registrant’s principal accountant (the “Pre-Approval Policies”). The Pre-Approval Policies establish a framework intended to assist the audit committee in the proper discharge of its pre-approval responsibilities. As a general matter, the Pre-Approval Policies (i) specify certain types of audit, audit-related, tax, and other services determined to be pre-approved by the audit committee; and (ii) delineate specific procedures governing the mechanics of the pre-approval process, including the approval and monitoring of audit and non-audit service fees. Unless a service is specifically pre-approved under the Pre-Approval Policies, it must be separately pre-approved by the audit committee.

The Pre-Approval Policies and the types of audit and non-audit services pre-approved therein must be reviewed and ratified by the registrant’s audit committee at least annually. The registrant’s audit committee maintains full responsibility for the appointment, compensation, and oversight of the work of the registrant’s principal accountant.

(e)(2) No services described in paragraphs (b)-(d) above were approved by the registrant’s audit committee pursuant to the “de minimis exception” set forth in Rule 2-01 (c)(7)(i)(C) of Regulation S-X.

(f) Not applicable.


(g) The following table presents (i) the aggregate non-audit fees (i.e., fees for audit-related, tax, and other services) billed to the registrant by D&T for the registrant’s fiscal years ended September 30, 2016 and September 30, 2017; and (ii) the aggregate non-audit fees (i.e., fees for audit-related, tax, and other services) billed to the Eaton Vance organization by D&T for the same time periods.

 

Fiscal Years Ended

   9/30/16      9/30/17  

Registrant

   $ 11,604      $ 8,226  

Eaton Vance(1)

   $ 56,434      $ 148,018  

 

(1) The investment adviser to the registrant, as well as any of its affiliates that provide ongoing services to the registrant, are subsidiaries of Eaton Vance Corp.

(h) The registrant’s audit committee has considered whether the provision by the registrant’s principal accountant of non-audit services to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Item 5. Audit Committee of Listed Registrants

The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities and Exchange Act of 1934, as amended. George J. Gorman (Chair), Valerie A. Mosley, William H. Park and Scott E. Wennerholm are the members of the registrant’s audit committee.

Item 6. Schedule of Investments

Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

The Board of Trustees of the Trust has adopted a proxy voting policy and procedure (the “Fund Policy”), pursuant to which the Trustees have delegated proxy voting responsibility to the Fund’s investment adviser and adopted the investment adviser’s proxy voting policies and procedures (the “Policies”) which are described below. The Trustees will review the Fund’s proxy voting records from time to time and will annually consider approving the Policies for the upcoming year. In the event that a conflict of interest arises between the Fund’s shareholders and the investment adviser, the administrator, or any of their affiliates or any affiliate of the Fund, the investment adviser will generally refrain from voting the proxies related to the companies giving rise to such conflict until it consults with the Board’s Special Committee except as contemplated under the Fund Policy. The Board’s Special Committee will instruct the investment adviser on the appropriate course of action.

The Policies are designed to promote accountability of a company’s management to its shareholders and to align the interests of management with those shareholders. An independent proxy voting service (“Agent”), currently Institutional Shareholder Services, Inc., has been retained to assist in the voting of proxies through the provision of vote analysis, implementation and recordkeeping and disclosure services. The investment adviser will generally vote proxies through the Agent. The Agent is required to vote all proxies and/or refer them back to the investment adviser pursuant to the Policies. It is generally the policy of the investment adviser to vote in accordance with the recommendation of the Agent. The Agent shall refer to the investment adviser proxies relating to mergers and restructurings, and the disposition of assets, termination, liquidation and mergers


contained in mutual fund proxies. The investment adviser will normally vote against anti-takeover measures and other proposals designed to limit the ability of shareholders to act on possible transactions, except in the case of closed-end management investment companies. The investment adviser generally supports management on social and environmental proposals. The investment adviser may abstain from voting from time to time where it determines that the costs associated with voting a proxy outweighs the benefits derived from exercising the right to vote or the economic effect on shareholders interests or the value of the portfolio holding is indeterminable or insignificant.

In addition, the investment adviser will monitor situations that may result in a conflict of interest between the Fund’s shareholders and the investment adviser, the administrator, or any of their affiliates or any affiliate of the Fund by maintaining a list of significant existing and prospective corporate clients. The investment adviser’s personnel responsible for reviewing and voting proxies on behalf of the Fund will report any proxy received or expected to be received from a company included on that list to the personnel of the investment adviser identified in the Policies. If such personnel expects to instruct the Agent to vote such proxies in a manner inconsistent with the guidelines of the Policies or the recommendation of the Agent, the personnel will consult with members of senior management of the investment adviser to determine if a material conflict of interests exists. If it is determined that a material conflict does exist, the investment adviser will seek instruction on how to vote from the Special Committee.

Information on how the Fund voted proxies relating to portfolio securities during the most recent 12 month period ended June 30 is available (1) without charge, upon request, by calling 1-800-262-1122, and (2) on the Securities and Exchange Commission’s website at http://www.sec.gov.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Eaton Vance Management (“EVM” or “Eaton Vance”) is the investment adviser of each Fund. Craig R. Brandon, portfolio manager of Eaton Vance California Municipal Bond Fund II, Eaton Vance Massachusetts Municipal Bond Fund and Eaton Vance New York Municipal Bond Fund II, Cynthia J. Clemson, portfolio manager of Eaton Vance Michigan Municipal Bond Fund, Eaton Vance Municipal Bond Fund II and Eaton Vance Ohio Municipal Bond Fund and Adam A. Weigold, portfolio manager of Eaton Vance New Jersey Municipal Bond Fund and Eaton Vance Pennsylvania Municipal Bond Fund, are responsible for the overall and day-to-day management of each Fund’s investments.

Mr. Brandon is a Vice President of EVM, has been a portfolio manager of Eaton Vance California Municipal Bond Fund II since January 2014, of Eaton Vance Massachusetts Municipal Bond Fund since February 2010, and of Eaton Vance New York Municipal Bond Fund II since November 2005, has been an EVM analyst since 1998 and is Co-Director of the Municipal Investments Group. Ms. Clemson is a Vice President of EVM, has been a portfolio manager of Eaton Vance Michigan Municipal Bond Fund since July 2015, of Eaton Vance Municipal Bond Fund II since March 2014, of Eaton Vance Ohio Municipal Bond Fund since July 2015 and is Co-Director of the Municipal Investments Group. Mr. Weigold is a Vice President of EVM, has been a portfolio manager of Eaton Vance New Jersey Municipal Bond Fund since February 2010 and of Eaton Vance Pennsylvania Municipal Bond Fund since October 2007 and has been an EVM credit analyst since 1991. Messrs. Brandon and Weigold and Ms. Clemson have managed other Eaton Vance portfolios for more than five years. This information is provided as of the date of filing this report.

The following table shows, as of each Fund’s most recent fiscal year end, the number of accounts each portfolio manager managed in each of the listed categories and the total assets (in millions of dollars) in the accounts managed within each category. The table also shows the number of accounts with respect to which the advisory fee is based on the performance of the account, if any, and the total assets (in millions of dollars) in those accounts.


     Number of
All
Accounts
     Total Assets of
All Accounts
     Number of
Accounts
Paying a
Performance Fee
     Total Assets of
Accounts Paying a
Performance Fee
 

Craig R. Brandon

           

Registered Investment Companies

     19      $ 5,845.6        0      $ 0  

Other Pooled Investment Vehicles

     1      $ 93.0        0      $ 0  

Other Accounts

     1      $ 1.1        0      $ 0  

Cynthia J. Clemson

           

Registered Investment Companies

     14      $ 4,056.9        0      $ 0  

Other Pooled Investment Vehicles

     1      $ 93.0        0      $ 0  

Other Accounts

     1      $ 1.1        0      $ 0  

Adam A. Weigold

           

Registered Investment Companies

     17      $ 3,390.6        0      $ 0  

Other Pooled Investment Vehicles

     0      $ 0        0      $ 0  

Other Accounts

     0      $ 0        0      $ 0  

The following table shows the dollar range of Fund shares beneficially owned by each portfolio manager as of each Fund’s most recent fiscal year end.

 

                   

Fund Name and Portfolio Manager

  

Dollar Range of Equity

Securities

Beneficially Owned in the Fund

    
   California Municipal Bond Fund II      
  

Craig R. Brandon

   None   
   Massachusetts Municipal Bond Fund      
  

Craig R. Brandon

   None   
   Michigan Municipal Bond Fund      
  

Cynthia J. Clemson

   None   
  

Municipal Bond Fund II

     
  

Cynthia J. Clemson

   None   


  

New Jersey Municipal Bond Fund

     
  

Adam A. Weigold

   None   
  

New York Municipal Bond Fund II

     
  

Craig R. Brandon

   None   
  

Ohio Municipal Bond Fund

     
  

Cynthia J. Clemson

   None   
  

Pennsylvania Municipal Bond Fund

     
  

Adam A. Weigold

   None   

Potential for Conflicts of Interest. It is possible that conflicts of interest may arise in connection with a portfolio manager’s management of the Fund’s investments on the one hand and the investments of other accounts for which a portfolio manager is responsible on the other. For example, a portfolio manager may have conflicts of interest in allocating management time, resources and investment opportunities among the Fund and other accounts he or she advises. In addition, due to differences in the investment strategies or restrictions between the Fund and the other accounts, the portfolio manager may take action with respect to another account that differs from the action taken with respect to the Fund. In some cases, another account managed by a portfolio manager may compensate the investment adviser based on the performance of the securities held by that account. The existence of such a performance based fee may create additional conflicts of interest for the portfolio manager in the allocation of management time, resources and investment opportunities. Whenever conflicts of interest arise, the portfolio manager will endeavor to exercise his or her discretion in a manner that he or she believes is equitable to all interested persons. EVM has adopted several policies and procedures designed to address these potential conflicts including a code of ethics and policies that govern the investment adviser’s trading practices, including among other things the aggregation and allocation of trades among clients, brokerage allocations, cross trades and best execution.

Compensation Structure for EVM

Compensation of EVM’s portfolio managers and other investment professionals has three primary components: (1) a base salary, (2) an annual cash bonus, and (3) annual non-cash compensation consisting of options to purchase shares of Eaton Vance Corp.’s (“EVC’s”) nonvoting common stock, restricted shares of EVC’s nonvoting common stock and a Deferred Alpha Incentive Plan, which pays a deferred cash award tied to future excess returns in certain equity strategy portfolios. EVM’s investment professionals also receive certain retirement, insurance and other benefits that are broadly available to EVM’s employees. Compensation of EVM’s investment professionals is reviewed primarily on an annual basis. Cash bonuses, stock-based compensation awards, and adjustments in base salary are typically paid or put into effect at or shortly after the October 31st fiscal year end of EVC.

Method to Determine Compensation. EVM compensates its portfolio managers based primarily on the scale and complexity of their portfolio responsibilities and the total return performance of managed funds and accounts versus the benchmark(s) stated in the prospectus, as well as an appropriate peer group (as described below). In addition to rankings within peer groups of funds on the basis of absolute performance, consideration may also be given to relative risk-adjusted performance. Risk-adjusted performance measures include, but are not limited to, the Sharpe ratio (Sharpe ratio uses standard deviation and excess return to determine reward per unit of risk). Performance is normally based on periods ending on the September 30th preceding fiscal year end. Fund performance is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s peer group as determined by Lipper or Morningstar is deemed by EVM’s management not to provide a fair comparison, performance may instead be evaluated primarily against a custom peer group or market index. In evaluating the performance of a fund and its manager, primary


emphasis is normally placed on three-year performance, with secondary consideration of performance over longer and shorter periods. A portion of the compensation payable to equity portfolio managers and investment professionals will be determined based on the ability of one or more accounts managed by such manager to achieve a specified target average annual gross return over a three year period in excess of the account benchmark. The cash bonus to be payable at the end of the three year term will be established at the inception of the term and will be adjusted positively or negatively to the extent that the average annual gross return varies from the specified target return. For funds that are tax-managed or otherwise have an objective of after-tax returns, performance is measured net of taxes. For other funds, performance is evaluated on a pre-tax basis. For funds with an investment objective other than total return (such as current income), consideration will also be given to the fund’s success in achieving its objective. For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis, based on averages or weighted averages among managed funds and accounts. Funds and accounts that have performance-based advisory fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance.

The compensation of portfolio managers with other job responsibilities (such as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of such responsibilities and the managers’ performance in meeting them.

EVM seeks to compensate portfolio managers commensurate with their responsibilities and performance, and competitive with other firms within the investment management industry. EVM participates in investment-industry compensation surveys and utilizes survey data as a factor in determining salary, bonus and stock-based compensation levels for portfolio managers and other investment professionals. Salaries, bonuses and stock-based compensation are also influenced by the operating performance of EVM and its parent company. The overall annual cash bonus pool is generally based on a substantially fixed percentage of pre-bonus adjusted operating income. While the salaries of EVM’s portfolio managers are comparatively fixed, cash bonuses and stock-based compensation may fluctuate significantly from year to year, based on changes in manager performance and other factors as described herein. For a high performing portfolio manager, cash bonuses and stock-based compensation may represent a substantial portion of total compensation.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

No such purchases this period.

Item 10. Submission of Matters to a Vote of Security Holders

No material changes.

Item 11. Controls and Procedures

(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

(b) There have been no changes in the registrant’s internal controls over financial reporting during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.


Item 12. Exhibits

 

(a)(1)   Registrant’s Code of Ethics – Not applicable (please see Item 2).
(a)(2)(i)   Treasurer’s Section 302 certification.
(a)(2)(ii)   President’s Section 302 certification.
(b)   Combined Section 906 certification.

 


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.

Eaton Vance Michigan Municipal Bond Fund

 

By:

 

/s/ Payson F. Swaffield

 

Payson F. Swaffield

 

President

Date:

 

November 27, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:

 

/s/ James F. Kirchner

 

James F. Kirchner

 

Treasurer

Date:

 

November 27, 2017

By:

 

/s/ Payson F. Swaffield

 

Payson F. Swaffield

 

President

Date:

 

November 27, 2017