N-Q
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-05597
Morgan Stanley Municipal Income Opportunities Trust
(Exact name of registrant as specified in charter)
     
522 Fifth Avenue, New York, New York   10036
(Address of principal executive offices)   (Zip code)
Randy Takian
522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)
Registrant’s telephone number, including area code: 212-296-6990
Date of fiscal year end: May 31, 2009
Date of reporting period: August 31, 2008
 
 
Item 1. Schedule of Investments.
The Fund’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:

 

 

Morgan Stanley Municipal Income Opportunities Trust
Portfolio of Investments August 31, 2008 (unaudited)
                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
       
Tax-Exempt Municipal Bonds (106.6%)
                        
       
Alabama (1.0%)
                        
$ 1,000    
Colbert County-Northwest Health Care Authority, Helen Keller Hospital Ser 2003
     5.75 %     06/01/27     $ 956,380  
  400    
Cullman Medical Park South, Medical ClinicBoard of the City Ser 1993 A
     6.50       02/15/23       400,040  
       
 
                      
       
 
                     1,356,420  
       
 
                      
       
 
                        
       
Arizona (2.0%)
                        
  800    
Pima County Industrial Development Authority, Water & Wastewater Ser 2007 (AMT)
     6.55       12/01/37       715,736  
  1,225    
Pima County Industrial Development Authority, Constellation Schools Ser 2008
     7.00       01/01/38       1,158,801  
  400    
Pinal County Electrical District # 4 Ser 2008
     6.00       12/01/38       393,648  
  600    
Scottsdale Industrial Development Authority, Scottsdale Healthcare Ser 2008 A (WI)
     5.25       09/01/30       577,068  
       
 
                      
       
 
                     2,845,253  
       
 
                      
       
 
                        
       
California (7.8%)
                        
  1,935    
California County Tobacco Securitization Agency, Gold County Settlement Funding Corp Ser 2006
     0.00       06/01/33       272,970  
  335    
California Municipal Finance Authority Educational Facility, Ser 2008
     5.875       07/01/28       328,816  
  1,000    
California Statewide Communities Development Authority, California Baptist University Ser 2007 A
     5.50       11/01/38       878,490  
  600    
California Statewide Communities Development Authority, Daughters of Charity Health Ser 2005 A
     5.00       07/01/39       512,388  
  400    
California Statewide Communities Development Authority, Thomas Jefferson School Ser 2008 A
     7.25       10/01/38       389,712  
  1,000    
Daly City Housing Development Finance Agency, Franciscan Mobile Home Park Third Tier Refg Ser 2007 C
     6.50       12/15/47       874,470  
  4,000    
Golden State Tobacco Securitization Corporation, Asset Backed Ser 2007 A-1 (a)
     5.125       06/01/47       2,987,242  
  800    
Quechan Indian Tribe FT Yuma Indian Reservation Ser 2008
     7.00       12/01/27       768,728  
  1,000    
Sacramento Financing Authority, Convention Center Hotel Ser 1999 A
     6.25       01/01/30       1,049,620  
  1,000    
San Diego County, San Diego Natural History Museum COPs
     5.70       02/01/28       908,810  
  1,000    
San Marcos Community Facilities District #2002-01, University Commons Ser 2004
     5.95       09/01/35       969,330  
  1,000    
Santa Ana Unified School District Community Facilities, District #2004-1, Central Park Ser 2005
     5.10       09/01/35       832,260  
  13,000    
Silicon Valley Tobacco Securitization Authority, Santa Clara Tobacco Securitization Corp Ser 2007 C
     0.00       06/01/56       241,800  
       
 
                      
       
 
                     11,014,636  
       
 
                      
       
 
                        
       
Colorado (4.0%)
                        
  1,000    
Colorado Health Facilities Authority, Christian Living Communities Ser 2006 A
     5.75       01/01/37       874,890  
  10    
Colorado Housing Finance Authority, 1996 Ser B-1 (AMT)
     7.65       11/01/26       10,192  
  305    
Colorado Housing Finance Authority, 1998 Ser B-3
     6.35       11/01/29       320,509  
  1,000    
Copperleaf Metropolitan District #2 Ser 2006
     5.95       12/01/36       794,220  
  2,000    
Elk Valley Public Improvement Corporation Ser 2001 A
     7.35       09/01/31       1,994,700  
  2,000    
Northwest Metropolitan District #3 Ser 2005
     6.25       12/01/35       1,681,980  
       
 
                      
       
 
                     5,676,491  
       
 
                      
       
 
                        
       
Connecticut (1.7%)
                        
  2,000    
Georgetown Special Taxing District Ser 2006 A (b)
     5.125       10/01/36       1,463,940  
  1,000    
Mashantucket (Western) Pequot Tribe, Special Ser 1997 B (b)
     5.75       09/01/27       894,290  
       
 
                      
       
 
                     2,358,230  
       
 
                      
       
 
                        
       
District of Columbia (0.2%)
                        
                       
  260    
Metropolitan Washington Airports Authority, District of Columbia & Virginia, CaterAir International Corp Ser 1991 (AMT) (c)
     10.125       09/01/11       260,107  
       
 
                      
       
 
                        
       
Florida (17.4%)
                        
  500    
Alachua County Industrial Development, North Florida Retirement Village Ser 2007
     5.25       11/15/17       467,330  
  800    
Alachua County Florida Industrial Development, North Florida Retirement Village Ser 2007
     5.875       11/15/36       698,592  
  2,000    
Beacon Lakes, Community Development District Ser 2003 A
     6.90       05/01/35       1,905,199  
  950    
Bellalago Educational Facilities Benifits District, Bellalago Chapter School Ser 2004 B
     5.80       05/01/34       911,392  
  650    
Brevard County Health Facilities authority, Buena Vida Estates, Inc Ser 2007
     6.75       01/01/37       624,988  
  2,960    
Broward County Professional Sports Facilities, Civic Arena Refg Ser 2006 A (AMBAC Insd) (a)
     5.00       09/01/23       3,050,546  
  2,780    
Escambia County, Pensacola Care Development Centers Ser 1989
     10.25       07/01/11       2,809,745  
  645    
Escambia County, Pensacola Care Development Centers Ser 1989 A
     10.25       07/01/11       651,902  
  1,000    
Fiddlers Creek Community Development District # 1 Ser 2005
     6.00       05/01/38       907,230  
  500    
Fountainbleau Lakes Community Development District Ser 2007 B (b)
     6.00       05/01/15       458,790  
  750    
Grand Bay at Doral Community Development District Ser 2007 A
     6.00       05/01/39       579,652  
  1,000    
Lee County Florida Industrial Development Authority Ser 2007 A
     5.375       06/15/37       809,690  
  1,000    
Midtown Miami Community Development District, Parking Garage Ser 2004 A
     6.25       05/01/37       908,210  
  500    
Orange County Health Facilities Authority, Orlando Lutheran Towers, Inc Ser 2005
     5.70       07/01/26       444,310  
  2,000    
Orange County Health Facilities Authority, Orlando Lutheran Towers, Inc Ser 2007
     5.50       07/01/32       1,677,600  
  1,000    
Orange County Health Facilities Authority, Westminister Community Care Services Inc Ser 1999
     6.75       04/01/34       1,002,500  
  1,000    
Pinellas County Health Facilities Authority, Oaks of Clearwater Ser 2004
     6.25       06/01/34       1,004,760  
  965    
Renaissance Commons Community Development District, Ser 2005 A
     5.60       05/01/36       790,094  
  500    
Split Pine Community Development District, Ser 2007 A
     5.25       05/01/39       397,695  
  2,860    
South Miami Health Facilities Authority, Baptist Health South Florida Obligated Group Ser 2007 (a)
     5.00       08/15/32       2,710,880  
  1,000    
St Johns County Industrial Development Authority, Glenmoor Ser 1999 A
     8.00       01/01/10 (d)     1,096,120  
  600    
Tolomato Community Development District, Special Assessment Ser 2007
     6.55       05/01/27       586,986  
       
 
                      
       
 
                     24,494,211  
       
 
                      
       
 
                        
       
Georgia (1.3%)
                        
  2,000    
Atlanta Eastside Ser 2005 B
     5.60       01/01/30       1,786,200  
       
 
                      
       
 
                        
       
Hawaii (3.1%)
                        
  1,000    
Hawaii Department of Budget & Finance, Kahala Nui Ser 2003 A
     8.00       11/15/33       1,075,220  
  2,000    
Hawaii Department of Budget & Finance, Kuakini Health 2002 Ser A
     6.375       07/01/32       2,021,419  
  1,220    
Hawaii Ser 2008 DK (a)
     5.00       05/01/23       1,292,877  
       
 
                      
       
 
                     4,389,516  
       
 
                      
       
 
                        
       
Idaho (0.7%)
                        
  1,000    
Idaho Health Facilities Authority-Valley Vista Care Corp Refg Ser 2007
     6.125       11/15/27       921,250  
       
 
                      

 

 

                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
       
Illinois (6.9%)
                        
  1,000    
Bolingbrook Sales Tax Ser 2005
     6.25       01/01/24       975,090  
  2,000    
Chicago Lake Shore East Ser 2002
     6.75       12/01/32       2,008,299  
  1,000    
Illinois Finance Authority, Elmhurst Memorial Healthcare Ser 2008 A
     5.625       01/01/37       967,610  
  1,000    
Illinois Finance Authority, Landing at Plymouth Ser 2005 A
     6.00       05/15/37       877,390  
  1,000    
Illinois Finance Authority, Luther Oaks Ser 2006 A
     6.00       08/15/39       884,920  
  1,650    
Illinois Finance Authority, Montgomery Place Ser 2006 A
     5.75       05/15/38       1,392,418  
  725    
Lincolnshire, Service Area #1-Sedgebrook Ser 2004
     6.25       03/01/34       688,330  
  500    
Village of Hampshire, Kane County Special Service Area # 18 Crown Development Tamms Farm Ser 2007 A
     6.00       03/01/44       413,900  
  650    
Will-Kankakee Regional Development Authority, Senior Estates Supportive Living Ser 2007 (AMT)
     7.00       12/01/42       621,166  
  1,000    
Yorkville Special Service Area #2006-113, Cannonball/Beecher Road Ser 2007
     5.75       03/01/28       864,750  
       
 
                      
       
 
                     9,693,873  
       
 
                      
       
 
                        
       
Iowa (1.5%)
                        
  785    
Jefferson County Hospital Ser 2007 C
     5.95       08/01/37       714,311  
  1,000    
Iowa Finance Authority, Bethany Life Communities Refg Ser 2006 A
     5.55       11/01/41       813,340  
  750    
Iowa Finance Authority Health Care Facilities, Madrid Homes Ser 2007
     5.90       11/15/37       646,605  
       
 
                      
       
 
                     2,174,256  
       
 
                      
       
 
                        
       
Kansas (0.6%)
                        
  900    
Olathe Catholic Care Ser 2006 A
     6.00       11/15/38       807,525  
       
 
                      
       
 
                        
       
Louisiana (0.9%)
                        
  800    
Lakeshore Villages Master Community Development District, Special Assessment Ser 2007
     5.25       07/01/17       718,840  
  600    
Louisiana Public Facilities Authority, Lake Charles Memorial Hospital Refg Ser 2007
     6.375       12/01/34       565,272  
       
 
                      
       
 
                     1,284,112  
       
 
                      
       
 
                        
       
Maryland (1.8%)
                        
  1,000    
Maryland Economic Development Corporation, Chesapeake Bay Conference Center Ser 2006 A
     5.00       12/01/31       749,230  
  800    
Maryland Health & Higher Educational Facilities Authority, Washington Christian Academy Ser 2006
     5.50       07/01/38       649,224  
  500    
Maryland Industrial Development Financing Authority, Our Lady of Good Counsel High School Ser 2005 A
     6.00       05/01/35       489,855  
  750    
Maryland State Health & Higher Educational Facilities Authority, King Farm Presbyterian Community 2007 Ser A
     5.30       01/01/37       596,393  
       
 
                      
       
 
                     2,484,702  
       
 
                      
       
 
                        
       
Massachusetts (2.8%)
                        
  1,500    
Massachusetts Development Finance Agency, Loomis Communities Ser 1999 A
     5.75       07/01/23       1,500,060  
  1,625    
Massachusetts Development Finance Agency, New England Center for Children Ser 1998
     5.875       11/01/18       1,559,074  
  1,000    
Massachusetts Health & Educational Facilities Authority, The Learning Center for Deaf Children Ser 1999 C
     6.125       07/01/29       945,660  
       
 
                      
       
 
                     4,004,794  
       
 
                      
       
 
                        
       
Michigan (2.5%)
                        
  1,230    
Detroit Sewerage Disposal, Senior Lien Revenue Refg Ser 2001 C-2 (FGIC Insd) (a)
     5.25       07/01/29       1,269,028  
  600    
Gaylord Hospital Financing Authority, Otsego Memorial Hospital Ser 2004
     6.50       01/01/37       565,626  
  2,000    
Michigan Tobacco Settlement Finance Authority, Asset Backed Ser 2007 A
     6.00       06/01/48       1,667,460  
       
 
                      
       
 
                     3,502,114  
       
 
                      
       
 
                        
       
Minnesota (0.5%)
                        
  750    
North Oaks Senior Housing Presbyterian Homes Ser 2007
     6.125       10/01/39       702,390  
       
 
                      
       
 
                        
       
Mississippi (0.3%)
                        
  400    
Mississippi Business Finance Corp., Pollution Control Revenue Refg Ser 1998
     5.875       04/01/22       387,972  
       
 
                      
       
 
                        
       
Missouri (6.7%)
                        
  750    
Branson Hills Community Improvement District Ser 2007 A
     5.50       04/01/27       661,238  
  500    
Branson Regional Airport Transportation Development District Ser 2007 B (AMT)
     6.00       07/01/37       404,225  
  2,000    
Des Peres, West County Center Ser 2002
     5.75       04/15/20       1,928,440  
  3,850    
Fenton, Gravois Bluffs Redevelopment Refg Ser 2001 A
     7.00       10/01/11 (d)     4,384,496  
  1,500    
Kansas City Industrial Development Agency, Bishop Spencer 2004 Ser A
     6.50       01/01/35       1,426,560  
  750    
St. Louis Industrial Development Authority, St. Andrews Resources for Seniors Ser 2007 A
     6.375       12/01/41       686,595  
       
 
                      
       
 
                     9,491,554  
       
 
                      
       
 
                        
       
Nevada (1.5%)
                        
  450    
Henderson, Nevada, Local Improvement District #T-18, Ser 2006
     5.30       09/01/55       304,376  
  1,050    
Mesquite Nevada Special Improvement District # 07-01 Local Improvement-Anthem at Mesquite Ser 2007
     6.00       08/01/23       989,279  
  1,000    
Nevada Department of Business & Industry, Las Vegas Monorail 2nd Tier Ser 2000
     7.375       01/01/40       287,370  
  600    
Sparks, Local Improvement District # 3 Legends at Sparks Marina Ser 2008
     6.50       09/01/20       587,550  
       
 
                      
       
 
                     2,168,575  
       
 
                      
       
 
                        
       
New Hampshire (3.3%)
                        
  8,895    
New Hampshire Housing Finance Authority, Single Family Residential 1983 Ser B
     0.00       01/01/15       4,628,692  
       
 
                      
       
 
                        
       
New Jersey (5.6%)
                        
  1,000    
New Jersey Economic Development Authority, Cedar Crest Village Inc Ser 2001 A
     7.25       11/15/11 (d)     1,150,510  
  1,000    
New Jersey Economic Development Authority, Franciscan Oaks Ser 1997
     5.70       10/01/17       978,950  
  730    
New Jersey Economic Development Authority, Lions Gate Ser 2005 A
     5.875       01/01/37       648,043  
  700    
New Jersey Economic Development Authority, Seashore Gardens Living Center Ser 2006
     5.375       11/01/36       570,318  
  1,000    
New Jersey Economic Development Authority, The Presbyterian Home at Montgomery Ser 2001 A
     6.375       11/01/31       953,780  
  2,000    
New Jersey Economic Development Authority, United Methodist Homes of New Jersey Ser 1998
     5.125       07/01/25       1,663,780  
  2,000    
New Jersey Health Care Facilities Financing Authority, Raritan Bay Medical Center Ser 1994
     7.25       07/01/27       1,980,499  
       
 
                      
       
 
                     7,945,880  
       
 
                      
       
 
                        
       
New York (5.2%)
                        
  3,000    
Brookhaven Industrial Development Agency, Woodcrest Estates Ser 1998 A (AMT)
     6.375       12/01/37       2,954,670  
  235    
Mount Vernon Industrial Development Agency, Meadowview at the Wartburg Ser 1999
     6.00       06/01/09       234,554  
  1,800    
New York City Industrial Development Agency, 7 World Trade Center LLC Ser 2005 A
     6.50       03/01/35       1,827,215  
  1,000    
New York Liberty Development Corporation, National Sports Museum, Ser 2006 A
     6.125       02/15/19       887,880  
  1,500    
Suffolk County Industrial Development Agency, Medford Hamlet Ser 2006
     6.375       01/01/39       1,363,035  
       
 
                      
       
 
                     7,267,354  
       
 
                      

 

 

                                 
PRINCIPAL                        
AMOUNT IN         COUPON     MATURITY        
THOUSANDS         RATE     DATE     VALUE  
       
North Carolina (0.6%)
                        
  400    
North Carolina Medical Care Commission Healthcare Facilities, Pennybyrn Ser 2005 A
     6.125       10/01/35       355,168  
  500    
North Carolina Medical Care Commission Healthcare Facilities, Southminster Ser 2007 A
     5.75       10/01/37       468,230  
       
 
                      
       
 
                     823,398  
       
 
                      
 
       
North Dakota (1.2%)
                        
  1,500    
Grand Forks 4000 Valley Square Ser 2006
     5.30       12/01/34       1,208,295  
  500    
Ward County, Trinity Ser 2006
     5.125       07/01/29       461,720  
       
 
                      
       
 
                     1,670,015  
       
 
                      
 
       
Ohio (3.3%)
                        
  3,300    
Buckeye Tobacco Settlement Financing Authority, Asset Backed Ser 2007 A-2
     5.875       06/01/30       2,867,799  
  600    
Centerville Health Care, Bethany Lutheran Village Continuing Care Facility, Ser 2007 A
     6.00       11/01/38       521,280  
  850    
Cuyahoga County Health Care and Independent Living Facilities, Eliza Jennings Senior Care Ser 2007 A
     5.75       05/15/27       756,211  
  450    
Tuscarawas County Hospital Facilities, Twin City Hospital Ser 2007
     6.35       11/01/37       415,130  
  75    
Zanesville-Muskingum County Port Authority, Anchor Glass Container Corp Ser 1989 B (AMT)
     10.25       12/01/08       75,146  
       
 
                      
       
 
                     4,635,566  
       
 
                      
 
       
Oklahoma (0.5%)
                        
  650    
Chickasaw Nation Health Systems Ser 2007
     6.25       12/01/32       652,607  
       
 
                      
 
       
Pennsylvania (7.9%)
                        
  2,300    
Allegheny County Hospital Development Authority, West Penn Allegheny Health Ser 2007 A
     5.375       11/15/40       1,614,209  
  1,500    
Bucks County Industrial Development Authority, Ann’s Choice Ser 2005 A
     6.125       01/01/25       1,491,734  
  1,000    
Chester County Health & Educational Facilities Authority, Jenner’s Pond Inc Ser 2002
     7.625       07/01/12 (d)     1,187,930  
  500    
Fulton County Industrial Development Authority, Fulton County Medical Center Ser 2006
     5.875       07/01/31       450,970  
  1,000    
Harrisburg Authority, Harrisburg University of Science & Technology Ser 2007 B
     6.00       09/01/36       935,290  
  1,000    
Montgomery County Industrial Development Authority, Whitemarsh Community Ser 2005
     6.25       02/01/35       902,440  
  1,000    
Pennsylvania Economic Development Financing Authority, Reliant Energy Inc Ser 2001 A (AMT)
     6.75       12/01/36       1,003,870  
  2,860    
Pennsylvania Housing Finance Agency Ser 2007-100A (AMT) (a)
     5.10       10/01/22       2,754,151  
  1,000    
Washington County, Victory Centre/Tanger Outlet Redevelopment Authority Ser 2006 A
     5.45       07/01/35       850,080  
       
 
                      
       
 
                     11,190,674  
       
 
                      
 
       
South Carolina (2.1%)
                        
  1,250    
Myrtle Beach, Air Force Base Redevelopment Ser 2006 A
     5.30       11/01/35       992,788  
  1,000    
South Carolina Jobs-Economic Development Authority, Lutheran Homes Ser 2007
     5.625       05/01/42       823,930  
  750    
South Carolina Jobs-Economic Development Authority, Westley Commons Ser 2006
     5.30       10/01/36       599,183  
  625    
South Carolina Jobs-Economic Development authority, Woodlands At Furman Ser 2007 A
     6.00       11/15/37       551,456  
       
 
                      
       
 
                     2,967,357  
       
 
                      
 
       
Tennessee (1.1%)
                        
  500    
Shelby County Health, Educational & Housing Facilities Board, Trezevant Manor Ser 2006 A
     5.75       09/01/37       460,150  
  750    
Shelby County Health, Educational & Housing Facilities Board, Village at Germantown Ser 2003 A
     7.25       12/01/34       739,838  
  500    
Shelby County Health, Educational & Housing Facilities Board, Village at Germantown Ser 2006
     6.25       12/01/34       403,805  
       
 
                      
       
 
                     1,603,793  
       
 
                      
 
       
Texas (7.8%)
                        
  2,000    
Austin Convention Enterprises Inc, Convention Center Hotel Ser 2001 A
     6.70       01/01/11 (d)     2,190,320  
  2,000    
Austin Convention Enterprises Inc, Convention Center Hotel Ser 2006 B
     5.75       01/01/34       1,765,400  
  1,000    
Brazos River Authority, Texas Utilities Electric Co Refg Ser 1999 A (AMT)
     7.70       04/01/33       930,980  
  1,000    
Decatur Hospital Authority, Wise Regional Health Ser 2004 A
     7.125       09/01/34       1,017,180  
  1,250    
HFDC Central Texas Inc, Legacy at Willow Bend, Ser 2006 A
     5.75       11/01/36       1,039,575  
  1,000    
Lubbock Health Facilities Development Corporation, Carillon Senior Lifecare Ser 2005 A
     6.50       07/01/26       959,690  
  3,375    
Texas Department of Housing and Community Affairs 2007 Ser B (AMT) (a)
     5.15       09/01/27       3,138,721  
       
 
                      
       
 
                     11,041,866  
       
 
                      
 
       
Virginia (1.6%)
                        
  2,000    
Peninsula Ports Authority of Virginia, Baptist Homes Ser 2006 C
     5.40       12/01/33       1,638,260  
  700    
Peninsula Town Center Community Development Authority Ser 2007
     6.45       09/01/37       630,140  
       
 
                      
       
 
                     2,268,400  
       
 
                      
 
       
Washington (0.6%)
                        
  1,000    
Washington Housing Finance Commission, Skyline at First Hill Ser 2007 A
     5.625       01/01/38       877,650  
       
 
                      
 
       
West Virginia (0.6%)
                        
  825    
West Virginia Hospital Finance Authority, Thomas Health System, Inc. Ser 2008
     6.50       10/01/38       790,862  
       
 
                      
 
       
Total Tax-Exempt Municipal Bonds
(Cost $160,634,405)
                     150,168,295  
       
 
                      
 
       
Short-Term Investments (1.3%)
                        
       
Short-Term Tax-Exempt Municipal Obligation (0.7%)
                        
  1,000    
Harris County Health Facilities Development Corp., Baylor College of Medicine Ser 2007 A (Demand 09/01/08)
(Cost $1,000,000)
     8.50 (e)     11/15/47       1,000,000  
       
 
                      
                                 
NUMBER OF                              
SHARES (000)                              
       
Investment Company (f) (0.6%)
                        
  825    
Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio-
Institutional Class
(Cost $825,164)
                     825,164  
       
 
                      
       
 
                        
       
Total Short-Term Investments
(Cost $1,825,164)
                     1,825,164  
       
 
                      
       
 
                        
       
Total Investments
(Cost $162,459,569)
                     151,993,459  
       
 
                      
                                 
PRINCIPAL                              
AMOUNT IN                              
THOUSANDS                              
       
Floating Rate Note Obligations Related to Securities Held (-9.6%)
                        
$ (13,440 )  
Notes with interest rates ranging from 1.61% to 1.82% at August 31, 2008 and contractual maturities of collateral ranging from 10/01/22 to 06/01/47 (g)
(Cost $(13,440,000))
                     (13,440,000 )
       
 
                      

 

 

                                 
PRINCIPAL                              
AMOUNT IN                              
THOUSANDS                              
       
Total Net Investments
             98.3 %     138,553,459  
       
(Cost $149,429,254) (h)
                        
       
Other Assets in Excess of Liabilities
             1.7       2,342,426  
       
 
                    
 
       
Net Assets
             100.0 %   $ 140,895,885  
       
 
                    
 
AMT   Alternative Minimum Tax.
 
COPs   Certificates of Participation.
 
WI   Security purchased on a when-issued basis.
 
(a)   Underlying security related to inverse floater entered into by the Fund.
 
(b)   Resale is restricted to qualified institutional investors.
 
(c)   Joint exemption.
 
(d)   Prerefunded to call date shown.
 
(e)   Current coupon of variable rate demand obligation.
 
(f)   The Fund invests in Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio - Institutional Class, an open-end management investment company managed by the Investment Adviser. Investment Advisory fees paid by the Fund are reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio — Institutional Class with respect to assets invested by the Fund in Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio — Institutional Class.
 
(g)   Floating rate note obligations related to securities held — The Fund enters into transactions in which it transfers to Dealer Trusts (“Dealer Trusts”), fixed rate bonds in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate investments. The Dealer Trusts fund the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Fund to retain residual interest in the bonds. The Fund enters into shortfall agreements with the Dealer Trusts which commit the Fund to pay the Dealer Trusts, in certain circumstances, the difference between the liquidation value of the fixed rate bonds held by the Dealer Trusts and the liquidation value of the floating rate notes held by third parties, as well as any shortfalls in interest cash flows. The residual interests held by the Fund (inverse floating rate investments) include the right of the Fund (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Fund, thereby collapsing the Dealer Trusts. The Fund accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Fund’s investment assets, and the related floating rate notes reflected as Fund liabilities. The notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. At August 31, 2008, Fund investments with a value of $17,203,445 are held by the Dealer Trusts and serve as collateral for the $13,440,000 in floating rate note obligations outstanding at that date.
 
(h)   The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes.
     
Bond Insurance:    
AMBAC
  AMBAC Assurance Corporation.
FGIC
  Financial Guaranty Insurance Company.

 

 

MS Municipal Income Opportunities Trust
Notes to the Portfolio of Investments
FAS 157
The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”), effective December 1, 2007. In accordance with FAS 157, fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. FAS 157 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund’s investments. The inputs are summarized in the three broad levels listed below.
  •   Level 1 — quoted prices in active markets for identical investments
 
  •   Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
 
  •   Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used as of August 31, 2008 in valuing the Fund’s investments carried at value:
                                 
            Fair Value Measurements at August 31, 2008 Using  
            Quoted Prices In     Significant     Significant  
            Active Market for     Other Observable     Unobservable  
            Identical Assets     Inputs     Inputs  
    Total     (Level 1)     (Level 2)     (Level 3)  
Investments in Securities
   $ 138,553,459     $ 825,164     $ 137,728,295       —  
 
                        
Valuation of Investments — (1) portfolio securities are valued by an outside independent pricing service approved by the Trustees. The pricing service uses both a computerized grid matrix of tax-exempt securities and and evaluations by its staff, in each case based on information concerning market transactions and quotations from dealers which reflect the mean between the last reported bid and asked price. The portfolio securities are thus valued by reference to a combination of transactions and quotations for the same or other securities believed to be comparable in quality, coupon, maturity, type of issue, call provisions, trading characteristics and other features deemed to be relevant. The Trustees believe that timely and reliable market quotations are generally not readily available for purposes of valuing tax-exempt securities and that the valuations supplied by the pricing service are more likely to approximate the fair value of such securities; (2) futures are valued at the latest sale price on the commodities exchange on which they trade unless it is determined that such price does not reflect their market value, in which case they will be valued at their fair value as determined in good faith under procedures established by and under the supervision of the Trustees; (3) interest rate swaps are marked- to-market daily based upon quotations from market makers; (4) investments in open-end mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (5) short-term debt securities having a maturity date of more than sixty days at time of purchase are valued on a mark-to-market basis until sixty days prior to maturity and thereafter at amortized cost based on their value on the 61st day. Short-term debt securities having a maturity date of sixty days or less at the time of purchase are valued at amortized cost.

 

 

Item 2. Controls and Procedures.
(a) The Fund’s principal executive officer and principal financial officer have concluded that the Fund’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.
(b) There were no changes in the Fund’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.
Item 3. Exhibits.
(a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto.

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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Morgan Stanley Municipal Income Opportunities Trust
/s/ Randy Takian
Randy Takian
Principal Executive Officer
October 21, 2008
     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Randy Takian
Randy Takian
Principal Executive Officer
October 21, 2008
/s/ Francis Smith
Francis Smith
Principal Financial Officer
October 21, 2008

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