Item 1. Reports to Stockholders
|
|
|
|
|
|
|
|
Annual Report
Delaware
Investments
®
Closed-End
Municipal
Bond
Funds
|
March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The figures in
the annual report for Delaware Investments Closed-End Municipal Bond Funds represent past results, which are not a guarantee of future results.
A rise or fall in interest rates can have a significant impact on bond
prices. Funds that invest in bonds can lose their value as interest rates
rise.
|
|
|
|
|
|
Closed-end
funds
|
|
|
Table of contents
|
>
Portfolio management review
|
1
|
|
>
Fund basics
|
2
|
|
>
Security type/Sector/State
allocations
|
3
|
|
>
Statements of net assets
|
5
|
|
>
Statements of assets and
liabilities
|
17
|
|
>
Statements of operations
|
18
|
|
>
Statements of changes in net
assets
|
19
|
|
>
Financial highlights
|
20
|
|
>
Notes to financial statements
|
23
|
|
>
Report of independent registered public accounting firm
|
31
|
|
>
Other Fund information
|
32
|
|
>
Board of trustees/directors and officers addendum
|
34
|
|
>
About the organization
|
37
|
Delaware Management Holdings, Inc. and its
subsidiaries (collectively known by the marketing name of
Delaware Investments) are wholly owned subsidiaries of
Macquarie Group Limited, a global provider of banking, financial, advisory,
investment and funds management services. For more information, including press
releases, please visit delawareinvestments.com.
Unless otherwise noted, views expressed
herein are current as of March 31, 2013, and subject to change. Information is
as of the date indicated and subject to change.
Funds are not FDIC insured and are not
guaranteed. It is possible to lose the principal amount invested. Mutual fund
advisory services are provided by Delaware Management Company, a series of
Delaware Management Business Trust, which is a registered investment advisor.
Delaware Investments, a member of Macquarie Group, refers to Delaware Management
Holdings, Inc. and its subsidiaries. Macquarie Group refers to Macquarie
Group Limited and its subsidiaries and affiliates worldwide.
Investments in Delaware
Investments
®
Closed-End Municipal Bond Funds are not and will not be
deposits with or liabilities of Macquarie Bank Limited ABN 46 008 583 542 and
its holding companies, including their subsidiaries or related companies
(Macquarie Group), and are subject to investment risk, including possible delays
in repayment and loss of income and capital invested. No Macquarie Group company
guarantees or will guarantee the performance of the Funds, the repayment of
capital from the Funds, or any particular rate of return.
©
2013 Delaware Management
Holdings, Inc.
All third-party marks cited are the
property of their respective owners.
Portfolio management review
Delaware Investments
®
Closed-End
Municipal Bond Funds
April 9,
2013
Municipal bond market
conditions
During the Funds fiscal year ended March
31, 2013, the U.S. tax-exempt bond market, as measured by the Barclays Municipal
Bond Index, returned 5.25%. In this favorable environment, higher yielding,
lower-rated municipal bonds fared the best overall, with below-investment-grade
issues gaining 14.23%, compared to returns of 6.50% and 3.78% generated by the
higher-rated BBB and AAA segments of the market, respectively. (Data: Barclays.)
On Jan. 1, 2013, an agreement was reached in Washington, D.C., known as the
American Taxpayer Relief Act of 2012. The good news for the municipal market was
that the deal did not include a 28% cap on the municipal tax
exemption.
Fund positioning: maintaining a
long-standing approach
Our portfolio management strategy remained
consistent throughout the Funds fiscal year. We continued investing by
utilizing a bottom-up approach to portfolio construction, meaning that we
evaluated investment opportunities individually based on thorough research;
ultimately, we selected bonds that we believed offered a favorable balance
between risk and potential reward.
We were also mindful of market shifts that
could lead to new opportunities (or risks) for investors. Several such
situations occurred during the fiscal year, as risks emerged that we believed
justified making the portfolio slightly more defensive.
One of these shifts took place in the
final months of the fiscal year. Especially in light of back-to-back years of
strong performance in the municipal bond market, we thought it prudent to take a
defensive position in an effort to seek to mitigate some of the risk to the
Funds from a potential rise in long-term interest rates. This entailed modestly
reducing the Funds exposure to longer-maturity securities. In addition, given
global macroeconomic challenges, we limited the Funds allocations to certain
lower-rated bonds that we believed were potentially at risk. We should note that
this shift represented only subtle changes to the Funds portfolios. Throughout
the Funds fiscal year, we maintained our usual focus on seeking to generate
relative outperformance by emphasizing bonds within the lower tiers of the
investment-grade credit ratings.
This is a segment of the market in which
we believe our credit research capabilities have the potential to add value to
the overall investment process.
Performance effects
Although we slightly reduced the Funds
exposure to lower rated credit and decreased positions in bonds with longer
maturities, these credits were among the strongest-performing bonds within the
Funds. Additionally, the typically maintained overweight positions in these
securities during the fiscal year.
Within
Delaware Investments Colorado Municipal Income Fund,
Inc.,
the strongest performing bonds tended
to include issues within the healthcare sector (one example was issued by the
Colorado Health Facilities Authority, with a coupon of 5% and a maturity date of
2040). The weaker performers, meanwhile, included an issue by the Puerto Rico
Infrastructure Financing Authority, which felt much pressure among that
commonwealths pension-related challenges and uncertainty surrounding a newly
elected governor.
Within
Delaware Investments Minnesota Municipal Income Fund, II
Inc.,
notable performers included bonds
issued by the Dakota and Washington Counties Housing and Redevelopment
Authority. These bonds were issued with a 8.375% coupon, and are scheduled to
mature in 2021. Other contributors included tobacco settlement bonds, with an
S&P rating of A- and a maturity date of 2031. The positive effects generated
by these bonds were offset somewhat by the underperformance of bonds such as
those issued by the Laurentian Energy Authority, with a 5.0% coupon and a
maturity of 2021. Puerto Rican bonds likewise posed a mild drag on the Funds
performance, including bonds issued by the Puerto Rico Electric Power Authority.
Delaware Investments National Municipal
Income Fund
experienced a positive
contribution from so-called tobacco settlement bonds. Another notable
contributor to the Funds performance was a bond issued by the West Virginia
Hospital Finance Authority, with a stated coupon of 9.125% and a maturity date
of 2041. Bonds issued out of Puerto Rico, including an issue by the Puerto Rico
Sales Tax Financing Corporation, were the weakest performers across the Fund.
1
Fund basics
Delaware Investments
®
Colorado
Municipal Income Fund, Inc.
As of March 31, 2013
Fund objective
|
The Fund seeks to provide current income
exempt from both regular federal income tax and Colorado state personal
income tax, consistent with the preservation of capital.
|
|
Total Fund net assets
|
$74 million
|
|
Number of holdings
|
78
|
|
Fund start date
|
July 29, 1993
|
|
CUSIP number
|
246101109
|
|
Delaware
Investments
Minnesota Municipal Income Fund II, Inc.
As of
March 31, 2013
|
|
Fund objective
|
The Fund seeks to provide current income
exempt from both regular federal income tax and Minnesota state personal
income tax, consistent with the preservation of capital.
|
|
Total Fund net assets
|
$176 million
|
|
Number of holdings
|
139
|
|
Fund start date
|
Feb. 26, 1993
|
|
CUSIP number
|
24610V103
|
Delaware
Investments
National Municipal Income Fund
As of March 31,
2013
|
|
Fund
objective
|
The
Fund seeks to provide current income exempt from regular federal income
tax, consistent with the preservation of capital.
|
|
Total Fund net
assets
|
$68 million
|
|
Number of
holdings
|
163
|
|
Fund start
date
|
Feb. 26, 1993
|
|
CUSIP
number
|
24610T108
|
2
Security type/Sector/State
allocations
As of March 31, 2013
(Unaudited)
Sector designations may be different than
the sector designations presented in other Fund materials.
Delaware Investments
®
|
|
|
Colorado Municipal Income Fund,
Inc.
|
|
|
|
Percentage
|
Security
type/Sector
|
of Net
Assets
|
Municipal Bonds*
|
138.04
|
%
|
Corporate-Backed Revenue Bond
|
1.39
|
%
|
Education Revenue Bonds
|
21.32
|
%
|
Electric Revenue Bonds
|
6.41
|
%
|
Healthcare Revenue Bonds
|
29.67
|
%
|
Housing Revenue Bonds
|
2.38
|
%
|
Lease Revenue Bonds
|
10.56
|
%
|
Local General Obligation Bonds
|
13.81
|
%
|
Pre-Refunded Bonds
|
7.54
|
%
|
Special Tax Revenue Bonds
|
33.52
|
%
|
State & Territory General Obligation
Bonds
|
1.80
|
%
|
Transportation Revenue Bonds
|
8.12
|
%
|
Water &
Sewer Revenue Bond
|
1.52
|
%
|
Short-Term
Investment
|
0.27
|
%
|
Total
Value of Securities
|
138.31
|
%
|
Liquidation Value of
Preferred Stock
|
(40.35
|
%)
|
Receivables and Other Assets Net of Liabilities
|
2.04
|
%
|
Total Net
Assets
|
100.00
|
%
|
|
|
|
*
|
|
As of the date of this report, Delaware Investments Colorado
Municipal Income Fund, Inc. held bonds issued by or on behalf of
territories of the United States as follows:
|
|
|
|
Territory
|
(as a % of fixed income
investments)
|
Guam
|
1.1
|
%
|
Puerto Rico
|
12.4
|
%
|
Delaware Investments
|
|
|
Minnesota Municipal Income Fund II,
Inc.
|
|
|
|
Percentage
|
Security
type/Sector
|
of Net
Assets
|
Municipal Bonds
|
140.31
|
%
|
Corporate-Backed Revenue Bonds
|
7.39
|
%
|
Education Revenue Bonds
|
16.90
|
%
|
Electric Revenue Bonds
|
6.43
|
%
|
Healthcare Revenue Bonds
|
40.12
|
%
|
Housing Revenue Bonds
|
6.31
|
%
|
Lease Revenue Bonds
|
14.94
|
%
|
Local General Obligation Bonds
|
8.45
|
%
|
Pre-Refunded/Escrowed to Maturity
Bonds
|
17.94
|
%
|
Special Tax Revenue Bonds
|
7.69
|
%
|
State & Territory General Obligation
Bonds
|
9.16
|
%
|
Transportation Revenue Bonds
|
3.37
|
%
|
Water &
Sewer Revenue Bonds
|
1.61
|
%
|
Total Value of
Securities
|
140.31
|
%
|
Liquidation Value of Preferred Stock
|
(42.70
|
%)
|
Receivables and Other
Assets Net of Liabilities
|
2.39
|
%
|
Total Net
Assets
|
100.00
|
%
|
|
|
|
|
|
As of the date of this report, Delaware Investments
Minnesota Municipal
Income Fund II, Inc. held
bonds issued by or on behalf of territories of the
United States as follows:
|
|
|
|
Territory
|
(as a % of fixed
income investments)
|
Guam
|
0.1
|
%
|
Puerto Rico
|
2.3
|
%
|
(continues)
3
Security type/Sector/State
allocations
As of March 31, 2013
(Unaudited)
Sector designations may be different than
the sector designations presented in other Fund materials.
Delaware Investments
®
National
Municipal Income Fund
|
|
Percentage
|
Security type/Sector
|
|
of Net Assets
|
Municipal Bonds
|
|
143.61
|
%
|
Corporate-Backed Revenue
Bonds
|
|
15.82
|
%
|
Education Revenue
Bonds
|
|
24.78
|
%
|
Electric Revenue Bonds
|
|
4.75
|
%
|
Healthcare Revenue
Bonds
|
|
20.02
|
%
|
Housing Revenue Bonds
|
|
2.44
|
%
|
Lease Revenue
Bonds
|
|
12.35
|
%
|
Local General Obligation
Bonds
|
|
3.33
|
%
|
Special Tax Revenue
Bonds
|
|
25.68
|
%
|
State & Territory General
Obligation Bonds
|
|
6.30
|
%
|
Transportation
Revenue Bonds
|
|
22.55
|
%
|
Water & Sewer Revenue Bonds
|
|
5.59
|
%
|
Total Value of Securities
|
|
143.61
|
%
|
Liquidation Value of Preferred
Stock
|
|
(44.20
|
%)
|
Receivables and Other Assets Net of
Liabilities
|
|
0.59
|
%
|
Total Net Assets
|
|
100.00
|
%
|
State/Territory
|
|
|
(as a % of fixed income investments)
|
Alaska
|
|
0.35
|
%
|
Arizona
|
|
12.52
|
%
|
California
|
|
11.70
|
%
|
Colorado
|
|
1.21
|
%
|
Florida
|
|
2.92
|
%
|
Georgia
|
|
1.62
|
%
|
Guam
|
|
2.06
|
%
|
Hawaii
|
|
0.34
|
%
|
Idaho
|
|
1.12
|
%
|
Illinois
|
|
1.38
|
%
|
Indiana
|
|
1.02
|
%
|
Iowa
|
|
0.55
|
%
|
Kansas
|
|
0.16
|
%
|
Louisiana
|
|
2.40
|
%
|
Maine
|
|
0.37
|
%
|
Maryland
|
|
2.55
|
%
|
Massachusetts
|
|
0.99
|
%
|
Minnesota
|
|
1.28
|
%
|
Missouri
|
|
2.21
|
%
|
New Hampshire
|
|
0.36
|
%
|
New Jersey
|
|
5.42
|
%
|
New Mexico
|
|
0.56
|
%
|
New York
|
|
18.02
|
%
|
Ohio
|
|
1.85
|
%
|
Oregon
|
|
4.01
|
%
|
Pennsylvania
|
|
6.39
|
%
|
Puerto Rico
|
|
6.48
|
%
|
Texas
|
|
6.57
|
%
|
Virginia
|
|
1.85
|
%
|
Washington D.C.
|
|
0.28
|
%
|
West Virginia
|
|
0.66
|
%
|
Wisconsin
|
|
0.51
|
%
|
Wyoming
|
|
0.29
|
%
|
Total
|
|
100.00
|
%
|
4
Statements of net assets
Delaware Investments
®
Colorado
Municipal Income Fund, Inc.
March 31,
2013
|
|
|
Principal
|
|
|
|
|
|
|
Amount
|
|
Value
|
Municipal
Bonds 138.04%
|
|
|
|
|
|
|
Corporate-Backed Revenue Bond 1.39%
|
|
|
|
|
|
|
|
Public
Authority for Colorado Energy
|
|
|
|
|
|
|
|
Natural Gas
Revenue Series 2008
|
|
|
|
|
|
|
|
6.50%
11/15/38
|
|
$
|
750,000
|
|
$
|
1,030,680
|
|
|
|
|
|
|
|
1,030,680
|
Education Revenue Bonds 21.32%
|
|
|
|
|
|
|
|
Colorado Educational &
Cultural
|
|
|
|
|
|
|
|
Facilities
Authority Revenue
|
|
|
|
|
|
|
|
(Academy
Charter School Project)
|
|
|
|
|
|
|
|
5.50% 5/1/36
(SGI)
|
|
|
1,720,000
|
|
|
1,784,552
|
|
(Bromley
Charter School Project)
|
|
|
|
|
|
|
|
5.25%
9/15/32 (SGI)
|
|
|
3,245,000
|
|
|
3,331,187
|
|
(Johnson
& Wales University Project)
|
|
|
|
|
|
|
|
Series A
5.00% 4/1/28 (SGI)
|
|
|
3,000,000
|
|
|
3,002,850
|
|
(Littleton
Charter School Project)
|
|
|
|
|
|
|
|
4.375%
1/15/36 (ASSURED GTY)
|
|
|
1,200,000
|
|
|
1,201,800
|
|
(Student
Housing - Campus
|
|
|
|
|
|
|
|
Village
Apartments) 5.00% 6/1/23
|
|
|
1,065,000
|
|
|
1,187,400
|
|
Colorado State Board of Governors
|
|
|
|
|
|
|
|
Revenue
(University Enterprise
|
|
|
|
|
|
|
|
System)
Series A 5.00% 3/1/39
|
|
|
700,000
|
|
|
780,087
|
|
University of Colorado 5.00%
6/1/31
|
|
|
3,185,000
|
|
|
3,677,337
|
|
University of Colorado Enterprise
|
|
|
|
|
|
|
|
Systems
Revenue
|
|
|
|
|
|
|
|
Series A
5.375% 6/1/38
|
|
|
750,000
|
|
|
883,208
|
|
|
|
|
|
|
|
15,848,421
|
Electric Revenue Bonds 6.41%
|
|
|
|
|
|
|
|
Colorado Springs Utilities System
|
|
|
|
|
|
|
|
Improvement
Revenue
|
|
|
|
|
|
|
|
Series C
5.50% 11/15/48
|
|
|
750,000
|
|
|
866,955
|
|
Platte River Power Authority
Revenue
|
|
|
|
|
|
|
|
Series HH
5.00% 6/1/28
|
|
|
1,500,000
|
|
|
1,781,130
|
|
Puerto Rico Electric Power
|
|
|
|
|
|
|
|
Authority
Revenue
|
|
|
|
|
|
|
|
Series A
5.00% 7/1/42
|
|
|
500,000
|
|
|
460,735
|
|
Series TT
5.00% 7/1/37
|
|
|
685,000
|
|
|
639,804
|
|
Series WW
5.50% 7/1/38
|
|
|
300,000
|
|
|
299,364
|
|
Series XX
5.25% 7/1/40
|
|
|
750,000
|
|
|
720,030
|
|
|
|
|
|
|
|
4,768,018
|
Healthcare Revenue Bonds 29.67%
|
|
|
|
|
|
|
|
Aurora Hospital Revenue
(Childrens
|
|
|
|
|
|
|
|
Hospital
Association Project)
|
|
|
|
|
|
|
|
Series A
5.00% 12/1/40
|
|
|
2,000,000
|
|
|
2,185,480
|
|
Colorado Health Facilities
|
|
|
|
|
|
|
|
Authority
Revenue
|
|
|
|
|
|
|
|
(Boulder
Community Hospital
|
|
|
|
|
|
|
|
Project)
5.00% 10/1/32
|
|
|
500,000
|
|
|
556,155
|
|
(Catholic
Health Initiatives)
|
|
|
|
|
|
|
|
Series A
5.00% 7/1/39
|
|
|
750,000
|
|
|
819,488
|
|
Series A
5.00% 2/1/41
|
|
|
2,400,000
|
|
|
2,623,391
|
|
Series A
5.25% 2/1/33
|
|
|
1,625,000
|
|
|
1,861,015
|
|
Series C-1
5.10% 10/1/41 (AGM)
|
|
|
1,000,000
|
|
|
1,079,830
|
|
Series D
6.125% 10/1/28
|
|
|
750,000
|
|
|
900,075
|
|
(Christian
Living
|
|
|
|
|
|
|
|
Communities
Project)
|
|
|
|
|
|
|
|
6.375%
1/1/41
|
|
|
615,000
|
|
|
702,441
|
|
Series A
5.75% 1/1/37
|
|
|
885,000
|
|
|
943,260
|
|
(Covenant
Retirement
|
|
|
|
|
|
|
|
Communities)
5.00% 12/1/33
|
|
|
1,000,000
|
|
|
1,059,340
|
|
(Evangelical
Lutheran Good
|
|
|
|
|
|
|
|
Samaritan
Society) 5.25% 6/1/23
|
|
|
1,000,000
|
|
|
1,072,410
|
|
(National
Jewish Health Project)
|
|
|
|
|
|
|
|
5.00%
1/1/27
|
|
|
500,000
|
|
|
534,510
|
|
(Sisters of
Charity of Leavenworth
|
|
|
|
|
|
|
|
Health
System) 5.00% 1/1/40
|
|
|
4,750,000
|
|
|
5,141,067
|
|
(Total
Long-Term Care)
|
|
|
|
|
|
|
|
Series A
6.00% 11/15/30
|
|
|
400,000
|
|
|
452,560
|
|
Denver Health & Hospital
Authority
|
|
|
|
|
|
|
|
Revenue
(Recovery Zone Facilities)
|
|
|
|
|
|
|
|
5.625%
12/1/40
|
|
|
750,000
|
|
|
817,140
|
|
University of Colorado Hospital
|
|
|
|
|
|
|
|
Authority
Revenue Series A
|
|
|
|
|
|
|
|
5.00%
11/15/37
|
|
|
500,000
|
|
|
535,030
|
|
6.00%
11/15/29
|
|
|
650,000
|
|
|
773,533
|
|
|
|
|
|
|
|
22,056,725
|
Housing Revenue Bonds 2.38%
|
|
|
|
|
|
|
|
Colorado Housing & Finance
|
|
|
|
|
|
|
|
Authority
(Single Family
|
|
|
|
|
|
|
|
Mortgage -
Class 1) Series A
|
|
|
|
|
|
|
|
5.50%
11/1/29 (FHA) (VA) (HUD)
|
|
|
365,000
|
|
|
378,808
|
|
Puerto Rico Housing Finance
|
|
|
|
|
|
|
|
Authority
Subordinated-Capital
|
|
|
|
|
|
|
|
Fund
Modernization
|
|
|
|
|
|
|
|
5.125%
12/1/27 (HUD)
|
|
|
1,000,000
|
|
|
1,052,770
|
|
5.50%
12/1/18 (HUD)
|
|
|
300,000
|
|
|
339,978
|
|
|
|
|
|
|
|
1,771,556
|
Lease Revenue Bonds 10.56%
|
|
|
|
|
|
|
|
Aurora Certificates of
Participation
|
|
|
|
|
|
|
|
Refunding
Series A 5.00% 12/1/30
|
|
|
630,000
|
|
|
721,545
|
|
Colorado State Building Excellent
|
|
|
|
|
|
|
|
Schools
Today Certificates
|
|
|
|
|
|
|
|
of
Participation
|
|
|
|
|
|
|
|
Series G
5.00% 3/15/32
|
|
|
2,000,000
|
|
|
2,244,581
|
|
Glendale Certificates of
Participation
|
|
|
|
|
|
|
|
5.00%
12/1/25 (SGI)
|
|
|
1,500,000
|
|
|
1,604,565
|
|
Pueblo County Certificates of
|
|
|
|
|
|
|
|
Participation (County Judicial
|
|
|
|
|
|
|
|
Complex
Project)
|
|
|
|
|
|
|
|
5.00%
9/15/42 (AGM)
|
|
|
2,000,000
|
|
|
2,227,100
|
(continues)
5
Statements of net
assets
Delaware
Investments
®
Colorado Municipal Income Fund, Inc.
|
|
|
Principal
|
|
|
|
|
|
|
Amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
|
Lease Revenue Bonds
(continued)
|
|
|
|
|
|
|
|
Puerto Rico Public
Buildings
|
|
|
|
|
|
|
|
Authority
Revenue (Guaranteed
|
|
|
|
|
|
|
|
Government
Facilities)
|
|
|
|
|
|
|
|
Series
M-2 5.50% 7/1/35 (AMBAC)
|
|
$
|
500,000
|
|
$
|
531,925
|
|
Regional Transportation
District
|
|
|
|
|
|
|
|
Certificates
of Participation
|
|
|
|
|
|
|
|
Series
A 5.375% 6/1/31
|
|
|
460,000
|
|
|
518,323
|
|
|
|
|
|
|
|
7,848,039
|
Local General Obligation Bonds 13.81%
|
|
|
|
|
|
|
|
Arapahoe County
School District #1
|
|
|
|
|
|
|
|
Englewood
5.00% 12/1/31
|
|
|
2,935,000
|
|
|
3,418,071
|
|
Boulder, Larimer & Weld
Counties
|
|
|
|
|
|
|
|
St.
Vrain Valley School District
|
|
|
|
|
|
|
|
No.
Re-1J 5.00% 12/15/33
|
|
|
750,000
|
|
|
852,570
|
|
Bowles Metropolitan
District
|
|
|
|
|
|
|
|
5.00%
12/1/33 (AGM)
|
|
|
2,000,000
|
|
|
2,021,680
|
|
Denver City & County
|
|
|
|
|
|
|
|
(Better
Denver & Zoo)
|
|
|
|
|
|
|
|
Series
A 5.00% 8/1/25
|
|
|
650,000
|
|
|
779,246
|
|
Denver International
Business Center
|
|
|
|
|
|
|
|
Metropolitan
District #1
|
|
|
|
|
|
|
|
5.00%
12/1/30
|
|
|
650,000
|
|
|
681,824
|
|
Jefferson County School District
#R-1
|
|
|
|
|
|
|
|
5.25%
12/15/24
|
|
|
750,000
|
|
|
967,733
|
|
Pueblo County School
District #70
|
|
|
|
|
|
|
|
5.00%
12/1/31
|
|
|
500,000
|
|
|
585,020
|
|
Rangely Hospital District
|
|
|
|
|
|
|
|
6.00%
11/1/26
|
|
|
750,000
|
|
|
893,715
|
|
Sand Creek
Metropolitan District
|
|
|
|
|
|
|
|
5.00%
12/1/31 (SGI)
|
|
|
70,000
|
|
|
70,237
|
|
|
|
|
|
|
|
10,270,096
|
§Pre-Refunded Bonds 7.54%
|
|
|
|
|
|
|
|
Adams & Arapahoe Counties
Joint
|
|
|
|
|
|
|
|
School
District #28J (Aurora)
|
|
|
|
|
|
|
|
6.00%
12/1/28-18
|
|
|
600,000
|
|
|
766,776
|
|
Colorado Health
Facilities Authority
|
|
|
|
|
|
|
|
Revenue
(Evangelical Lutheran
|
|
|
|
|
|
|
|
Good
Samaritan Society)
|
|
|
|
|
|
|
|
Series
A 6.125% 6/1/38-14
|
|
|
750,000
|
|
|
801,180
|
|
Colorado Water Resources &
Power
|
|
|
|
|
|
|
|
Development
Authority Revenue
|
|
|
|
|
|
|
|
(Parker
Water & Sanitation
|
|
|
|
|
|
|
|
District)
Series D
|
|
|
|
|
|
|
|
5.125%
9/1/34-14 (NATL-RE)
|
|
|
1,500,000
|
|
|
1,598,625
|
|
5.25%
9/1/43-14 (NATL-RE)
|
|
|
2,000,000
|
|
|
2,138,600
|
|
Sand Creek
Metropolitan District
|
|
|
|
|
|
|
|
5.00%
12/1/31-13 (SGI)
|
|
|
295,000
|
|
|
304,582
|
|
|
|
|
|
|
|
5,609,763
|
Special Tax Revenue Bonds 33.52%
|
|
|
|
|
|
|
|
Castle Rock Sales & Use Tax
Revenue
|
|
|
|
|
|
|
|
5.00%
6/1/35
|
|
|
750,000
|
|
|
861,150
|
|
Denver Convention
Center Hotel
|
|
|
|
|
|
|
|
Authority
Revenue Refunding
|
|
|
|
|
|
|
|
5.00%
12/1/35 (SGI)
|
|
|
2,795,000
|
|
|
2,899,393
|
|
Guam Government Business
Privilege
|
|
|
|
|
|
|
|
Tax
Revenue Series A
|
|
|
|
|
|
|
|
5.125%
1/1/42
|
|
|
435,000
|
|
|
478,082
|
|
5.25%
1/1/36
|
|
|
565,000
|
|
|
630,642
|
|
Puerto Rico
Infrastructure Financing
|
|
|
|
|
|
|
|
Authority
Special Tax Revenue
|
|
|
|
|
|
|
|
Series
B 5.00% 7/1/41
|
|
|
2,475,000
|
|
|
2,228,144
|
|
Puerto Rico Sales Tax
Financing
|
|
|
|
|
|
|
|
Revenue
First Subordinate
|
|
|
|
|
|
|
|
Series
A 5.50% 8/1/37
|
|
|
700,000
|
|
|
722,267
|
|
Series
A 5.50% 8/1/42
|
|
|
1,000,000
|
|
|
1,027,720
|
|
Series
A 5.75% 8/1/37
|
|
|
590,000
|
|
|
628,751
|
|
Series
A-1 5.00% 8/1/43
|
|
|
2,000,000
|
|
|
1,995,220
|
|
Series
C 5.00% 8/1/40
|
|
|
1,000,000
|
|
|
1,035,450
|
|
Series
C 6.00% 8/1/39
|
|
|
500,000
|
|
|
541,055
|
|
Regional
Transportation District
|
|
|
|
|
|
|
|
Revenue
(FasTracks Project) Series A
|
|
|
|
|
|
|
|
4.375%
11/1/31 (AMBAC)
|
|
|
1,250,000
|
|
|
1,303,100
|
|
4.50%
11/1/36 (AGM)
|
|
|
3,000,000
|
|
|
3,158,040
|
|
5.00%
11/1/28 (AMBAC)
|
|
|
2,500,000
|
|
|
2,815,650
|
|
5.00%
11/1/38
|
|
|
4,085,000
|
|
|
4,598,974
|
|
|
|
|
|
|
|
24,923,638
|
State & Territory General Obligation Bonds
1.80%
|
|
|
|
|
Puerto Rico Commonwealth
|
|
|
|
|
|
|
|
(Public
Improvement)
|
|
|
|
|
|
|
|
Series
C 6.00% 7/1/39
|
|
|
505,000
|
|
|
515,090
|
|
Western State
College
|
|
|
|
|
|
|
|
5.00%
5/15/34
|
|
|
750,000
|
|
|
824,805
|
|
|
|
|
|
|
|
1,339,895
|
Transportation Revenue Bonds 8.12%
|
|
|
|
|
|
|
|
Denver City & County
Airport
|
|
|
|
|
|
|
|
System
Revenue
|
|
|
|
|
|
|
|
Series
A 5.25% 11/15/36
|
|
|
750,000
|
|
|
844,275
|
|
Series
B 5.00% 11/15/27
|
|
|
1,000,000
|
|
|
1,176,060
|
|
Series
B 5.00% 11/15/28
|
|
|
1,000,000
|
|
|
1,168,450
|
|
E-470 Public Highway
Authority
|
|
|
|
|
|
|
|
Revenue
Series C 5.25% 9/1/25
|
|
|
310,000
|
|
|
343,911
|
|
Regional Transportation
District
|
|
|
|
|
|
|
|
Revenue
(Denver Transit Partners)
|
|
|
|
|
|
|
|
6.00%
1/15/41
|
|
|
2,175,000
|
|
|
2,504,991
|
|
|
|
|
|
|
|
6,037,687
|
Water & Sewer Revenue Bond 1.52%
|
|
|
|
|
|
|
|
Parker Water &
Sanitation District
|
|
|
|
|
|
|
|
5.00%
8/1/43
|
|
|
1,000,000
|
|
|
1,127,520
|
|
|
|
|
|
|
|
1,127,520
|
Total Municipal Bonds
|
|
|
|
|
|
|
|
(cost
$96,096,590)
|
|
|
|
|
|
102,632,038
|
6
|
|
|
Principal
|
|
|
|
|
|
|
|
Amount
|
|
Value
|
|
Short-Term Investment 0.27%
|
|
|
|
|
|
|
|
¤ Variable Rate Demand Note 0.27%
|
|
|
|
|
|
|
|
|
Colorado State Educational &
|
|
|
|
|
|
|
|
|
Cultural
Facilities Authority
|
|
|
|
|
|
|
|
|
Revenue
(National Jewish
|
|
|
|
|
|
|
|
|
Federation
Bond Program)
|
|
|
|
|
|
|
|
|
Series D-5
0.15% 10/1/38
|
|
|
|
|
|
|
|
|
(LOC-JPMorgan
Chase Bank N.A.)
|
|
$
|
200,000
|
|
$
|
200,000
|
|
Total Short-Term Investments
|
|
|
|
|
|
|
|
|
(cost $200,000)
|
|
|
|
|
|
200,000
|
|
|
|
Total Value of Securities
138.31%
|
|
|
|
|
|
|
|
|
(cost $96,296,590)
|
|
|
|
|
|
102,832,038
|
|
Liquidation Value of
Preferred
|
|
|
|
|
|
|
|
|
Stock (40.35%)
|
|
|
|
|
|
(30,000,000
|
)
|
Receivables and Other Assets
|
|
|
|
|
|
|
|
|
Net of Liabilities 2.04%
|
|
|
|
|
|
1,516,600
|
|
Net Assets Applicable to
4,837,100
|
|
|
|
|
|
|
|
|
Shares Outstanding; Equivalent to
|
|
|
|
|
|
|
|
|
$15.37 Per Share 100.00%
|
|
|
|
|
$
|
74,348,638
|
|
Components of Net Assets at March 31,
2013:
|
|
|
|
|
|
|
Common stock, $0.01 par value, 200 million shares
|
|
|
|
|
|
|
authorized to
the Fund
|
|
|
|
|
$
|
66,918,121
|
Undistributed net investment
income
|
|
|
|
|
|
800,128
|
Accumulated net realized gain on investments
|
|
|
|
|
|
94,941
|
Net unrealized appreciation of
investments
|
|
|
|
|
|
6,535,448
|
Total net assets
|
|
|
|
|
$
|
74,348,638
|
Variable rate security. The rate shown is
the rate as of March 31, 2013. Interest rates reset periodically.
§
Pre-refunded bonds. Municipal bonds that
are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds,
the stated maturity is followed by the year in which the bond is pre-refunded.
See Note 9 in Notes to financial statements.
¤
Tax-exempt obligations that contain a
floating or variable interest rate adjustment formula and an unconditional right
of demand to receive payment of the unpaid principal balance plus accrued
interest upon a short notice period (generally up to 30 days) prior to specified
dates either from the issuer or by drawing on a bank letter of credit, a
guarantee or insurance issued with respect to such instrument. The rate shown is
the rate as of March 31, 2013.
See Note 6
in Notes to financial statements.
Summary of
Abbreviations:
AGM Insured by Assured
Guaranty Municipal Corporation
AMBAC Insured by AMBAC Assurance
Corporation
ASSURED GTY Insured by Assured Guaranty Corporation
FHA
Federal Housing Administration
HUD Housing & Urban Development Section
8
LOC Letter of Credit
NATL-RE Insured
by National Public Finance Guarantee Corporation
SGI Insured by Syncora
Guarantee Inc.
VA Veterans Administration
collateral
See accompanying notes, which are an
integral part of the financial statements.
(continues)
7
Statements of net assets
Delaware Investments
®
Minnesota
Municipal Income Fund II, Inc.
March 31, 2013
|
|
|
Principal
|
|
|
|
|
|
|
Amount
|
|
Value
|
Municipal Bonds 140.31%
|
|
|
|
|
|
|
Corporate-Backed Revenue Bonds 7.39%
|
|
|
|
|
Cloquet Pollution
Control Revenue
|
|
|
|
|
|
|
|
(Potlatch Project) 5.90% 10/1/26
|
|
$
|
5,500,000
|
|
$
|
5,520,515
|
|
Laurentian Energy Authority
|
|
|
|
|
|
|
|
Cogeneration Revenue
|
|
|
|
|
|
|
|
Series
A 5.00% 12/1/21
|
|
|
3,325,000
|
|
|
3,268,575
|
|
Sartell Environmental
Improvement
|
|
|
|
|
|
|
|
Revenue (International Paper)
|
|
|
|
|
|
|
|
Series
A 5.20% 6/1/27
|
|
|
1,000,000
|
|
|
1,006,910
|
|
St. Paul Port Authority
Revenue
|
|
|
|
|
|
|
|
(Gerdau St. Paul Steel Mill Project)
|
|
|
|
|
|
|
|
Series
7 4.50% 10/1/37 (AMT)
|
|
|
3,155,000
|
|
|
3,182,953
|
|
|
|
|
|
|
|
12,978,953
|
Education Revenue Bonds 16.90%
|
|
|
|
|
|
|
|
Bayton Township Lease
Revenue
|
|
|
|
|
|
|
|
(St.
Croix Preparatory Academy)
|
|
|
|
|
|
|
|
5.75%
8/1/42
|
|
|
300,000
|
|
|
302,715
|
|
Minnesota Higher Education
Facilities
|
|
|
|
|
|
|
|
Authority Revenue
|
|
|
|
|
|
|
|
(Augsburg College)
|
|
|
|
|
|
|
|
Series
6-J1 5.00% 5/1/28
|
|
|
1,500,000
|
|
|
1,534,140
|
|
(Carleton College)
|
|
|
|
|
|
|
|
Series
D 5.00% 3/1/30
|
|
|
1,120,000
|
|
|
1,271,637
|
|
Series
6-T 5.00% 1/1/28
|
|
|
1,000,000
|
|
|
1,138,660
|
|
(College of St. Benedict)
|
|
|
|
|
|
|
|
Series
7-M 5.00% 3/1/31
|
|
|
300,000
|
|
|
319,194
|
|
Series
7-M 5.125% 3/1/36
|
|
|
275,000
|
|
|
291,242
|
|
(Macalester College)
|
|
|
|
|
|
|
|
Series
7-S 4.00% 5/1/43
|
|
|
1,250,000
|
|
|
1,294,125
|
|
(St.
Catherine University)
|
|
|
|
|
|
|
|
Series
7-Q 5.00% 10/1/32
|
|
|
700,000
|
|
|
780,402
|
|
(St.
Marys University)
|
|
|
|
|
|
|
|
Series
5-U 4.80% 10/1/23
|
|
|
1,400,000
|
|
|
1,411,312
|
|
(St.
Scholastic College)
|
|
|
|
|
|
|
|
Series
H 5.25% 12/1/35
|
|
|
1,000,000
|
|
|
1,089,960
|
|
(University of St. Thomas)
|
|
|
|
|
|
|
|
Series
6-X 5.00% 4/1/29
|
|
|
2,250,000
|
|
|
2,519,258
|
|
Series
7-A 5.00% 10/1/39
|
|
|
1,000,000
|
|
|
1,104,690
|
|
Series
7-U 5.00% 4/1/20
|
|
|
495,000
|
|
|
600,415
|
|
Series
7-U 5.00% 4/1/21
|
|
|
450,000
|
|
|
549,180
|
|
Series
7-U 5.00% 4/1/22
|
|
|
750,000
|
|
|
919,590
|
|
St. Paul Housing
& Redevelopment
|
|
|
|
|
|
|
|
Authority Charter School
|
|
|
|
|
|
|
|
Lease
Revenue
|
|
|
|
|
|
|
|
(Nova
Classical Academy)
|
|
|
|
|
|
|
|
Series
A 6.375% 9/1/31
|
|
|
750,000
|
|
|
833,505
|
|
University of Minnesota
|
|
|
|
|
|
|
|
Series
A
|
|
|
|
|
|
|
|
5.00%
12/1/27
|
|
|
1,110,000
|
|
|
1,333,421
|
|
5.00%
12/1/28
|
|
|
1,880,000
|
|
|
2,248,480
|
|
5.00%
12/1/29
|
|
|
2,265,000
|
|
|
2,695,327
|
|
5.00%
12/1/31
|
|
|
1,000,000
|
|
|
1,180,600
|
|
5.00%
12/1/36
|
|
|
3,000,000
|
|
|
3,486,269
|
|
5.25%
4/1/29
|
|
|
1,000,000
|
|
|
1,189,680
|
|
Series
C 5.00% 12/1/19
|
|
|
1,290,000
|
|
|
1,582,443
|
|
|
|
|
|
|
|
29,676,245
|
Electric Revenue Bonds 6.43%
|
|
|
|
|
|
|
|
Central Minnesota
Municipal
|
|
|
|
|
|
|
|
Power
Agency Revenue
|
|
|
|
|
|
|
|
(Brookings Southeast Twin
|
|
|
|
|
|
|
|
Cities
Transportation)
|
|
|
|
|
|
|
|
5.00%
1/1/32
|
|
|
1,130,000
|
|
|
1,278,245
|
|
Chaska Electric Revenue
|
|
|
|
|
|
|
|
(Generating Facilities)
|
|
|
|
|
|
|
|
Series
A 5.25% 10/1/25
|
|
|
250,000
|
|
|
276,550
|
|
Minnesota Municipal
Power Agency
|
|
|
|
|
|
|
|
Electric Revenue Series A
|
|
|
|
|
|
|
|
5.00%
10/1/34
|
|
|
1,900,000
|
|
|
2,007,160
|
|
5.25%
10/1/19
|
|
|
1,610,000
|
|
|
1,721,283
|
|
Southern Minnesota Municipal
|
|
|
|
|
|
|
|
Power
Agency Supply Revenue
|
|
|
|
|
|
|
|
Series
A 5.25% 1/1/30
|
|
|
1,000,000
|
|
|
1,117,850
|
|
Western Minnesota
Municipal Power
|
|
|
|
|
|
|
|
Agency
Supply Revenue Series A
|
|
|
|
|
|
|
|
5.00%
1/1/25
|
|
|
3,000,000
|
|
|
3,676,350
|
|
5.00%
1/1/26
|
|
|
1,000,000
|
|
|
1,213,810
|
|
|
|
|
|
|
|
11,291,248
|
Healthcare Revenue Bonds 40.12%
|
|
|
|
|
|
|
|
Anoka Health Care Facility
|
|
|
|
|
|
|
|
Revenue (Homestead
|
|
|
|
|
|
|
|
Anoka
Income Project)
|
|
|
|
|
|
|
|
Series
A 7.00% 11/1/46
|
|
|
1,200,000
|
|
|
1,294,644
|
|
Center City Health
Care
|
|
|
|
|
|
|
|
Facilities Revenue (Hazelden
|
|
|
|
|
|
|
|
Foundation Project)
|
|
|
|
|
|
|
|
4.75%
11/1/31
|
|
|
850,000
|
|
|
900,482
|
|
5.00%
11/1/41
|
|
|
1,600,000
|
|
|
1,724,032
|
|
Duluth Economic Development
|
|
|
|
|
|
|
|
Authority Revenue
|
|
|
|
|
|
|
|
(St.
Lukes Hospital
|
|
|
|
|
|
|
|
Authority Obligation Group)
|
|
|
|
|
|
|
|
5.75%
6/15/32
|
|
|
200,000
|
|
|
213,538
|
|
6.00%
6/15/39
|
|
|
1,000,000
|
|
|
1,079,150
|
|
Fergus Falls Health
Care Facilities
|
|
|
|
|
|
|
|
Revenue (Lake Region Healthcare)
|
|
|
|
|
|
|
|
5.00%
8/1/30
|
|
|
1,000,000
|
|
|
1,041,670
|
|
Glencoe Health Care
Facilities
|
|
|
|
|
|
|
|
Revenue (Glencoe Regional
|
|
|
|
|
|
|
|
Health
Services Project)
|
|
|
|
|
|
|
|
5.00%
4/1/25
|
|
|
2,000,000
|
|
|
2,020,780
|
|
Maple Grove Health
Care System
|
|
|
|
|
|
|
|
Revenue (Maple Grove Hospital)
|
|
|
|
|
|
|
|
5.25%
5/1/37
|
|
|
1,100,000
|
|
|
1,146,112
|
|
Minneapolis Health Care
System
|
|
|
|
|
|
|
|
Revenue (Fairview Health Services)
|
|
|
|
|
|
|
|
Series
A 6.375% 11/15/23
|
|
|
605,000
|
|
|
735,160
|
|
Series
A 6.625% 11/15/28
|
|
|
1,040,000
|
|
|
1,270,766
|
|
Series
B 6.50% 11/15/38
|
|
|
|
|
|
|
|
(ASSURED GTY)
|
|
|
2,295,000
|
|
|
2,806,418
|
|
Series
D 5.00% 11/15/34
|
|
|
|
|
|
|
|
(AMBAC)
|
|
|
2,000,000
|
|
|
2,057,180
|
8
|
|
|
Principal
|
|
|
|
|
|
|
Amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
|
Healthcare Revenue Bonds
(continued)
|
|
|
|
|
|
|
|
Minneapolis Revenue
(National
|
|
|
|
|
|
|
|
Marrow
Donor Program Project)
|
|
|
|
|
|
|
|
4.875%
8/1/25
|
|
$
|
1,000,000
|
|
$
|
1,038,390
|
|
Minnesota Agricultural &
Economic
|
|
|
|
|
|
|
|
Development Board Revenue
|
|
|
|
|
|
|
|
Un-Refunded Balance Series A
|
|
|
|
|
|
|
|
5.75%
11/15/26 (NATL-RE)
|
|
|
100,000
|
|
|
100,173
|
|
6.375%
11/15/29
|
|
|
195,000
|
|
|
195,778
|
|
Rochester Health Care
& Housing
|
|
|
|
|
|
|
|
Revenue (Samaritan Bethany)
|
|
|
|
|
|
|
|
Series
A 7.375% 12/1/41
|
|
|
1,220,000
|
|
|
1,370,694
|
|
Rochester Health Care
Facilities
|
|
|
|
|
|
|
|
Revenue (Mayo Clinic)
|
|
|
|
|
|
|
|
4.00%
11/15/41
|
|
|
8,780,000
|
|
|
9,151,657
|
|
Series
A 4.00% 11/15/30
|
|
|
1,240,000
|
|
|
1,430,154
|
|
Series
C 4.50% 11/15/38
|
|
|
2,000,000
|
|
|
2,384,520
|
|
Sartell Health Care
Facility Revenue
|
|
|
|
|
|
|
|
(Country Manor Campus Project)
|
|
|
|
|
|
|
|
5.25%
9/1/30
|
|
|
1,000,000
|
|
|
1,024,230
|
|
Shakopee Health Care
Facilities
|
|
|
|
|
|
|
|
Revenue (St. Francis Regional
|
|
|
|
|
|
|
|
Medical Center) 5.25% 9/1/34
|
|
|
1,560,000
|
|
|
1,583,353
|
|
St. Cloud Health Care
Revenue
|
|
|
|
|
|
|
|
(Centracare Health System Project)
|
|
|
|
|
|
|
|
5.50%
5/1/39 (ASSURED GTY)
|
|
|
1,500,000
|
|
|
1,648,740
|
|
Series
A 5.125% 5/1/30
|
|
|
4,425,000
|
|
|
4,883,209
|
|
St. Louis Park Health Care
|
|
|
|
|
|
|
|
Facilities Revenue
|
|
|
|
|
|
|
|
(Park
Nicollet Health Services)
|
|
|
|
|
|
|
|
5.75%
7/1/39
|
|
|
3,315,000
|
|
|
3,721,850
|
|
Series
C 5.50% 7/1/23
|
|
|
1,000,000
|
|
|
1,123,320
|
|
St. Paul Housing
& Redevelopment
|
|
|
|
|
|
|
|
Authority Health Care Revenue
|
|
|
|
|
|
|
|
(Allina Health System)
|
|
|
|
|
|
|
|
Series
A 5.00% 11/15/18 (NATL-RE)
|
|
|
1,380,000
|
|
|
1,608,114
|
|
Series
A-1 5.25% 11/15/29
|
|
|
1,395,000
|
|
|
1,558,745
|
|
(Childrens Health Care Facilities)
|
|
|
|
|
|
|
|
Series
A1 5.00% 8/15/34 (AGM)
|
|
|
500,000
|
|
|
544,150
|
|
(Episcopal Homes Project)
|
|
|
|
|
|
|
|
Series
A 4.75% 11/1/31
|
|
|
740,000
|
|
|
745,128
|
|
(Franciscan Health Elderly Project)
|
|
|
|
|
|
|
|
5.40%
11/20/42 (GNMA) (FHA)
|
|
|
2,700,000
|
|
|
2,703,213
|
|
(Health East Project)
|
|
|
|
|
|
|
|
6.00%
11/15/30
|
|
|
2,775,000
|
|
|
2,982,848
|
|
6.00%
11/15/35
|
|
|
2,500,000
|
|
|
2,677,425
|
|
(Health Partners Obligation Group
|
|
|
|
|
|
|
|
Project) 5.25% 5/15/36
|
|
|
2,000,000
|
|
|
2,090,820
|
|
(Regions Hospital Project)
|
|
|
|
|
|
|
|
5.30%
5/15/28
|
|
|
1,000,000
|
|
|
1,001,150
|
|
(Senior Carondelet Village Project)
|
|
|
|
|
|
|
|
Series
A 6.00% 8/1/42
|
|
|
770,000
|
|
|
817,062
|
|
Washington County Housing
&
|
|
|
|
|
|
|
|
Redevelopment Authority
|
|
|
|
|
|
|
|
Revenue (Birchwood & Woodbury
|
|
|
|
|
|
|
|
Projects) Series A 5.625% 6/1/37
|
|
|
1,500,000
|
|
|
1,533,405
|
|
Wayzata Senior
Housing Revenue
|
|
|
|
|
|
|
|
(Folkestone Senior Living
|
|
|
|
|
|
|
|
Community) Series A
|
|
|
|
|
|
|
|
5.50%
11/1/32
|
|
|
420,000
|
|
|
447,031
|
|
5.75%
11/1/39
|
|
|
945,000
|
|
|
1,014,883
|
|
6.00%
5/1/47
|
|
|
1,475,000
|
|
|
1,595,257
|
|
Winona Health Care Facilities
|
|
|
|
|
|
|
|
Revenue (Winona Health
|
|
|
|
|
|
|
|
Obligated Group)
|
|
|
|
|
|
|
|
4.65%
7/1/26
|
|
|
465,000
|
|
|
488,492
|
|
4.75%
7/1/27
|
|
|
785,000
|
|
|
821,793
|
|
5.00%
7/1/23
|
|
|
1,010,000
|
|
|
1,095,820
|
|
5.00%
7/1/34
|
|
|
750,000
|
|
|
785,325
|
|
|
|
|
|
|
|
70,456,661
|
Housing Revenue Bonds 6.31%
|
|
|
|
|
|
|
|
Minneapolis
Multifamily
|
|
|
|
|
|
|
|
Housing Revenue
|
|
|
|
|
|
|
|
(Gaar
Scott Loft Project)
|
|
|
|
|
|
|
|
5.95%
5/1/30 (AMT)
|
|
|
|
|
|
|
|
(LOC-U.S. Bank N.A.)
|
|
|
835,000
|
|
|
837,689
|
|
(Olson
Townhomes Project)
|
|
|
|
|
|
|
|
6.00%
12/1/19 (AMT)
|
|
|
600,000
|
|
|
600,240
|
|
(Seward Towers Project)
|
|
|
|
|
|
|
|
5.00%
5/20/36 (GNMA)
|
|
|
2,000,000
|
|
|
2,044,119
|
|
(Sumner Housing Project) Series A
|
|
|
|
|
|
|
|
5.15%
2/20/45 (GNMA) (AMT)
|
|
|
2,000,000
|
|
|
2,010,100
|
|
Minnesota State Housing
Finance
|
|
|
|
|
|
|
|
Agency
Revenue (Mortgage-
|
|
|
|
|
|
|
|
Backed
Securities Program)
|
|
|
|
|
|
|
|
4.40%
7/1/32 (GNMA)
|
|
|
|
|
|
|
|
(FNMA)
(FHLMC)
|
|
|
1,460,000
|
|
|
1,616,804
|
|
(Rental Housing)
|
|
|
|
|
|
|
|
Series
A 5.00% 2/1/35 (AMT)
|
|
|
1,000,000
|
|
|
1,003,620
|
|
(Residential Housing)
|
|
|
|
|
|
|
|
Series D 4.75% 7/1/32 (AMT)
|
|
|
880,000
|
|
|
905,485
|
|
Series
I 5.15% 7/1/38 (AMT)
|
|
|
625,000
|
|
|
642,981
|
|
Series
L 5.10% 7/1/38 (AMT)
|
|
|
1,330,000
|
|
|
1,420,906
|
|
|
|
|
|
|
|
11,081,944
|
Lease Revenue Bonds 14.94%
|
|
|
|
|
|
|
|
Andover Economic
Development
|
|
|
|
|
|
|
|
Authority Public Facilities
|
|
|
|
|
|
|
|
Lease
Revenue (Andover
|
|
|
|
|
|
|
|
Community Center)
|
|
|
|
|
|
|
|
5.125%
2/1/24
|
|
|
205,000
|
|
|
212,442
|
|
5.20%
2/1/29
|
|
|
410,000
|
|
|
425,141
|
(continues)
9
Statements of net assets
Delaware Investments
®
Minnesota Municipal Income Fund II, Inc.
|
|
|
Principal
|
|
|
|
|
|
|
Amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
|
Lease Revenue Bonds
(continued)
|
|
|
|
|
|
|
|
St. Paul Port
Authority Lease Revenue
|
|
|
|
|
|
|
|
(Cedar
Street Office Building Project)
|
|
|
|
|
|
|
|
5.00%
12/1/22
|
|
$
|
2,385,000
|
|
$
|
2,394,302
|
|
5.25%
12/1/27
|
|
|
2,800,000
|
|
|
2,810,640
|
|
(Robert Street Office
|
|
|
|
|
|
|
|
Building Project)
|
|
|
|
|
|
|
|
Series
3-11 5.00% 12/1/27
|
|
|
2,000,000
|
|
|
2,057,900
|
|
State of Minnesota General
Fund
|
|
|
|
|
|
|
|
Revenue Appropriations Series B
|
|
|
|
|
|
|
|
4.00%
3/1/26
|
|
|
3,720,000
|
|
|
4,123,620
|
|
5.00%
3/1/27
|
|
|
2,160,000
|
|
|
2,574,871
|
|
5.00%
3/1/29
|
|
|
3,525,000
|
|
|
4,147,304
|
|
University of
Minnesota
|
|
|
|
|
|
|
|
Special Purpose Revenue
|
|
|
|
|
|
|
|
(State
Supported Biomed
|
|
|
|
|
|
|
|
Science Research)
|
|
|
|
|
|
|
|
5.00%
8/1/35
|
|
|
1,040,000
|
|
|
1,192,703
|
|
5.00%
8/1/36
|
|
|
4,000,000
|
|
|
4,597,519
|
|
Virginia Housing &
Redevelopment
|
|
|
|
|
|
|
|
Authority Health Care Facility
|
|
|
|
|
|
|
|
Lease
Revenue
|
|
|
|
|
|
|
|
5.25%
10/1/25
|
|
|
680,000
|
|
|
703,705
|
|
5.375%
10/1/30
|
|
|
965,000
|
|
|
1,006,080
|
|
|
|
|
|
|
|
26,246,227
|
Local General Obligation Bonds 8.45%
|
|
|
|
|
|
|
|
City of Willmar (Rice
Memorial
|
|
|
|
|
|
|
|
Hospital Project)
|
|
|
|
|
|
|
|
Series
A 4.00% 2/1/32
|
|
|
2,940,000
|
|
|
3,128,130
|
|
Dakota County Community
|
|
|
|
|
|
|
|
Development Agency
|
|
|
|
|
|
|
|
(Senior Housing Facilities)
|
|
|
|
|
|
|
|
Series
A 5.00% 1/1/23
|
|
|
1,100,000
|
|
|
1,184,623
|
|
Hopkins Independent
School
|
|
|
|
|
|
|
|
District #270 Series A 5.00% 2/1/28
|
|
|
1,000,000
|
|
|
1,172,710
|
|
Rocori Independent School District
#750
|
|
|
|
|
|
|
|
(School Building) Series B
|
|
|
|
|
|
|
|
5.00%
2/1/22
|
|
|
1,010,000
|
|
|
1,193,588
|
|
5.00%
2/1/24
|
|
|
1,075,000
|
|
|
1,264,523
|
|
5.00%
2/1/25
|
|
|
1,115,000
|
|
|
1,307,527
|
|
5.00%
2/1/26
|
|
|
1,155,000
|
|
|
1,354,434
|
|
Shakopee Independent
School
|
|
|
|
|
|
|
|
District #720
|
|
|
|
|
|
|
|
(School Building-Crossover)
|
|
|
|
|
|
|
|
5.00%
2/1/23
|
|
|
1,440,000
|
|
|
1,803,398
|
|
Thief River Falls Independent
School
|
|
|
|
|
|
|
|
District #564 (School Building)
|
|
|
|
|
|
|
|
Series
A 4.00% 2/1/32
|
|
|
1,160,000
|
|
|
1,252,742
|
|
Washington County
Housing &
|
|
|
|
|
|
|
|
Redevelopment Authority Series B
|
|
|
|
|
|
|
|
5.50%
2/1/22 (NATL-RE)
|
|
|
525,000
|
|
|
527,037
|
|
5.50%
2/1/32 (NATL-RE)
|
|
|
655,000
|
|
|
657,260
|
|
|
|
|
|
|
|
14,845,972
|
§Pre-Refunded/Escrowed to Maturity Bonds 17.94%
|
|
|
|
|
Dakota-Washington Counties
|
|
|
|
|
|
|
|
Housing & Redevelopment
|
|
|
|
|
|
|
|
Authority Revenue
|
|
|
|
|
|
|
|
(Bloomington Single Family
|
|
|
|
|
|
|
|
Residential Mortgage)
|
|
|
|
|
|
|
|
Series
B 8.375% 9/1/21
|
|
|
|
|
|
|
|
(GNMA)
(FHA) (VA) (AMT)
|
|
|
7,055,000
|
|
|
10,162,022
|
|
Southern Minnesota
Municipal
|
|
|
|
|
|
|
|
Power
Agency Supply
|
|
|
|
|
|
|
|
Revenue Refunding
|
|
|
|
|
|
|
|
Series
A 5.75% 1/1/18-13
|
|
|
3,350,000
|
|
|
3,585,472
|
|
St. Paul Housing &
Redevelopment
|
|
|
|
|
|
|
|
Authority Sales Tax
|
|
|
|
|
|
|
|
(Civic
Center Project)
|
|
|
|
|
|
|
|
5.55%
11/1/23
|
|
|
2,300,000
|
|
|
2,573,631
|
|
5.55%
11/1/23 (NATL-RE) (IBC)
|
|
|
4,200,000
|
|
|
4,699,674
|
|
University of
Minnesota Hospital &
|
|
|
|
|
|
|
|
Clinics 6.75% 12/1/16
|
|
|
2,580,000
|
|
|
3,041,175
|
|
University of Minnesota Series
A
|
|
|
|
|
|
|
|
5.50%
7/1/21
|
|
|
4,000,000
|
|
|
4,992,360
|
|
5.75%
7/1/18
|
|
|
2,000,000
|
|
|
2,458,900
|
|
|
|
|
|
|
|
31,513,234
|
Special Tax Revenue Bonds 7.69%
|
|
|
|
|
|
|
|
Guam Government
Business
|
|
|
|
|
|
|
|
Privilege Tax Revenue
|
|
|
|
|
|
|
|
Series
A 5.25% 1/1/36
|
|
|
150,000
|
|
|
167,427
|
|
Hennepin County Sales Tax
Revenue
|
|
|
|
|
|
|
|
(Second Lien-Ballpark Project)
|
|
|
|
|
|
|
|
Series
B 4.75% 12/15/27
|
|
|
1,905,000
|
|
|
2,146,440
|
|
Minneapolis Community
Planning &
|
|
|
|
|
|
|
|
Economic Development
|
|
|
|
|
|
|
|
Department (Limited Tax
|
|
|
|
|
|
|
|
Supported Common Bond Fund)
|
|
|
|
|
|
|
|
6.25%
12/1/30
|
|
|
1,000,000
|
|
|
1,210,210
|
|
Series
1 5.50% 12/1/24 (AMT)
|
|
|
1,000,000
|
|
|
1,069,760
|
|
Series
5 5.70% 12/1/27
|
|
|
375,000
|
|
|
377,194
|
|
Minnesota Public Safety Radio
|
|
|
|
|
|
|
|
5.00%
6/1/23
|
|
|
2,845,000
|
|
|
3,352,149
|
|
Puerto Rico Sales
Tax
|
|
|
|
|
|
|
|
Financing Revenue
|
|
|
|
|
|
|
|
^(Capital
Appreciation) Series A
|
|
|
|
|
|
|
|
5.73%
8/1/44 (NATL-RE)
|
|
|
8,485,000
|
|
|
1,371,515
|
|
First
Subordinate
|
|
|
|
|
|
|
|
Series
A 5.75% 8/1/37
|
|
|
1,200,000
|
|
|
1,278,816
|
|
Series
C
|
|
|
|
|
|
|
|
5.00%
8/1/40
|
|
|
985,000
|
|
|
1,019,918
|
|
5.25%
8/1/40
|
|
|
485,000
|
|
|
510,555
|
|
St. Paul Port Authority
(Brownsfields
|
|
|
|
|
|
|
|
Redevelopment Tax) Series 2
|
|
|
|
|
|
|
|
5.00%
3/1/37
|
|
|
895,000
|
|
|
995,464
|
|
|
|
|
|
|
|
13,499,448
|
10
|
|
|
Principal
|
|
|
|
|
|
|
|
Amount
|
|
Value
|
|
Municipal
Bonds
(continued)
|
|
|
|
|
|
|
|
State & Territory General Obligation Bonds 9.16%
|
|
|
|
|
|
Minnesota State Refunding
|
|
|
|
|
|
|
|
|
(State
Various Purpose)
|
|
|
|
|
|
|
|
|
Series D
5.00% 8/1/24
|
|
$
|
2,700,000
|
|
$
|
3,270,753
|
|
|
Minnesota State (State Trunk Highway)
|
|
|
|
|
|
|
|
|
Series
B
|
|
|
|
|
|
|
|
|
5.00%
10/1/22
|
|
|
5,500,000
|
|
|
6,875,275
|
|
|
5.00%
10/1/29
|
|
|
3,715,000
|
|
|
4,436,973
|
|
|
Puerto Rico Commonwealth
|
|
|
|
|
|
|
|
|
Public
Improvement
|
|
|
|
|
|
|
|
|
Series A
5.75% 7/1/41
|
|
|
1,500,000
|
|
|
1,506,210
|
|
|
|
|
|
|
|
|
16,089,211
|
|
Transportation Revenue Bonds
3.37%
|
|
|
|
|
|
|
|
|
Minneapolis - St. Paul Metropolitan
|
|
|
|
|
|
|
|
|
Airports
Commission Revenue
|
|
|
|
|
|
|
|
|
5.00%
1/1/22
|
|
|
670,000
|
|
|
802,848
|
|
|
Series A
5.00% 1/1/35 (AMBAC)
|
|
|
2,000,000
|
|
|
2,108,260
|
|
|
Series B
5.00% 1/1/26
|
|
|
540,000
|
|
|
632,826
|
|
|
Series B
5.00% 1/1/27
|
|
|
1,190,000
|
|
|
1,384,517
|
|
|
Series B
5.00% 1/1/30
|
|
|
500,000
|
|
|
572,560
|
|
|
St. Paul Port Authority Revenue
|
|
|
|
|
|
|
|
|
(Amherst H
Wilder Foundation)
|
|
|
|
|
|
|
|
|
Series 3
5.00% 12/1/36
|
|
|
380,000
|
|
|
424,148
|
|
|
|
|
|
|
|
|
5,925,159
|
|
Water & Sewer Revenue Bonds
1.61%
|
|
|
|
|
|
|
|
|
Metropolitan Council Wastewater
|
|
|
|
|
|
|
|
|
Revenue
Series B 4.00% 9/1/27
|
|
|
1,145,000
|
|
|
1,262,901
|
|
|
St. Paul Sewer Revenue
|
|
|
|
|
|
|
|
|
Series D
5.00% 12/1/21
|
|
|
1,325,000
|
|
|
1,564,758
|
|
|
|
|
|
|
|
|
2,827,659
|
|
Total Municipal Bonds
|
|
|
|
|
|
|
|
|
(cost $232,122,331)
|
|
|
|
|
|
246,431,961
|
|
|
Total Value of Securities
140.31%
|
|
|
|
|
|
|
|
|
(cost $232,122,331)
|
|
|
|
|
|
246,431,961
|
|
Liquidation Value of
Preferred
|
|
|
|
|
|
|
|
|
Stock (42.70%)
|
|
|
|
|
|
(75,000,000
|
)
|
Receivables and Other Assets Net
of
|
|
|
|
|
|
|
|
|
Liabilities 2.39%
|
|
|
|
|
|
4,197,259
|
|
Net Assets Applicable to
11,504,975
|
|
|
|
|
|
|
|
|
Shares Outstanding; Equivalent to
|
|
|
|
|
|
|
|
|
$15.27 Per Share 100.00%
|
|
|
|
|
$
|
175,629,220
|
|
|
Components of Net Assets at March 31,
2013:
|
|
|
|
|
Common stock, $0.01 par value, 200 million shares
|
|
|
|
|
|
authorized to the Fund
|
|
|
|
|
$
|
157,931,075
|
|
Undistributed net investment
income
|
|
|
|
|
|
1,759,475
|
|
Accumulated net realized gain on investments
|
|
|
1,629,040
|
|
Net unrealized appreciation of
investments
|
|
|
|
|
|
14,309,630
|
|
Total net assets
|
|
|
|
|
$
|
175,629,220
|
|
Variable rate security. The
rate shown is the rate as of March 31, 2013. Interest rates reset
periodically.
§Pre-refunded bonds. Municipal bonds that are generally backed or secured
by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed
by the year in which the bond is pre-refunded. See Note 9 in Notes to financial
statements.
^Zero coupon security. The rate shown is the yield at the time of
purchase.
See Note 6 in Notes to financial statements.
Summary of
Abbreviations:
AGM Insured by Assured
Guaranty Municipal Corporation
AMBAC Insured by AMBAC Assurance Corporation
AMT Subject to Alternative Minimum Tax
ASSURED GTY Insured by
Assured Guaranty Corporation
FHA Federal Housing Administration
FHLMC
Federal Home Loan Mortgage Corporation collateral
FNMA Federal National
Mortgage Association collateral
GNMA Government National Mortgage
Association collateral
IBC Insured Bond Certificate
LOC Letter of
Credit
NATL-RE Insured by National Public Finance Guarantee Corporation
VA Veterans Administration collateral
See accompanying notes, which are an
integral part of the financial statements.
(continues)
11
Statements of net
assets
Delaware Investments
®
National Municipal Income Fund
March 31, 2013
|
|
|
Principal
|
|
|
|
|
|
|
Amount
|
|
Value
|
Municipal Bonds 143.61%
|
|
|
|
|
|
|
Corporate-Backed Revenue Bonds 15.82%
|
|
|
|
|
Buckeye, Ohio Tobacco
Settlement
|
|
|
|
|
|
|
|
Financing Authority Asset-Backed
|
|
|
|
|
|
|
|
Senior
Turbo Series A-2
|
|
|
|
|
|
|
|
5.875%
6/1/47
|
|
$
|
480,000
|
|
$
|
427,642
|
|
6.50%
6/1/47
|
|
|
430,000
|
|
|
419,022
|
|
Golden State, California
Tobacco
|
|
|
|
|
|
|
|
Securitization Corporate Settlement
|
|
|
|
|
|
|
|
Revenue (Asset-Backed Senior
|
|
|
|
|
|
|
|
Notes)
Series A-1
|
|
|
|
|
|
|
|
5.125%
6/1/47
|
|
|
500,000
|
|
|
439,320
|
|
5.75%
6/1/47
|
|
|
1,615,000
|
|
|
1,554,210
|
|
Harris County, Texas
Industrial
|
|
|
|
|
|
|
|
Development Solid Waste
|
|
|
|
|
|
|
|
Disposal Revenue (Deer Park
|
|
|
|
|
|
|
|
Refining Project) 5.00% 2/1/23
|
|
|
150,000
|
|
|
167,156
|
|
Illinois Railsplitter
Tobacco Settlement
|
|
|
|
|
|
|
|
Authority 6.25% 6/1/24
|
|
|
500,000
|
|
|
555,800
|
|
Louisiana Local
Government
|
|
|
|
|
|
|
|
Environmental Facilities &
|
|
|
|
|
|
|
|
Community Development
|
|
|
|
|
|
|
|
Authority (Westlake Chemical)
|
|
|
|
|
|
|
|
Series
A 6.50% 8/1/29
|
|
|
645,000
|
|
|
765,338
|
|
Series
A-1 6.50% 11/1/35
|
|
|
255,000
|
|
|
300,301
|
|
Maryland Economic Development
|
|
|
|
|
|
|
|
Port
Facilities Revenue (CNX
|
|
|
|
|
|
|
|
Marine
Terminals) 5.75% 9/1/25
|
|
|
260,000
|
|
|
289,060
|
|
M-S-R Energy
Authority, California
|
|
|
|
|
|
|
|
Gas
Series C 7.00% 11/1/34
|
|
|
1,000,000
|
|
|
1,400,420
|
|
Navajo County, Arizona
Pollution
|
|
|
|
|
|
|
|
Control Revenue
|
|
|
|
|
|
|
|
Series
D 5.75% 6/1/34
|
|
|
500,000
|
|
|
562,400
|
|
New Jersey Economic
Development
|
|
|
|
|
|
|
|
Authority Special Facilities
|
|
|
|
|
|
|
|
Revenue (Continental Airlines
|
|
|
|
|
|
|
|
Project) 5.25% 9/15/29 (AMT)
|
|
|
500,000
|
|
|
516,880
|
|
New York Liberty Development
|
|
|
|
|
|
|
|
Revenue (Goldman Sachs
|
|
|
|
|
|
|
|
Headquarters) 5.25% 10/1/35
|
|
|
500,000
|
|
|
586,020
|
|
Ohio State Air
Quality Development
|
|
|
|
|
|
|
|
Authority Revenue (First Energy
|
|
|
|
|
|
|
|
Generation) Series A
|
|
|
|
|
|
|
|
5.70%
8/1/20
|
|
|
260,000
|
|
|
310,666
|
|
Pennsylvania Economic
Development
|
|
|
|
|
|
|
|
Financing Authority Exempt
|
|
|
|
|
|
|
|
Facilities Revenue (Allegheny
|
|
|
|
|
|
|
|
Energy
Supply) 7.00% 7/15/39
|
|
|
345,000
|
|
|
411,292
|
|
Pima County, Arizona
Industrial
|
|
|
|
|
|
|
|
Development Authority Pollution
|
|
|
|
|
|
|
|
Control Revenue (Tucson Electric
|
|
|
|
|
|
|
|
Power
San Juan) 5.75% 9/1/29
|
|
|
250,000
|
|
|
263,758
|
|
Salt Verde Financial, Arizona
Gas
|
|
|
|
|
|
|
|
Revenue Senior Note
|
|
|
|
|
|
|
|
5.00%
12/1/37
|
|
|
400,000
|
|
|
447,496
|
|
St. John the Baptist
Parish, Louisiana
|
|
|
|
|
|
|
|
(Marathon Oil) Series A
|
|
|
|
|
|
|
|
5.125%
6/1/37
|
|
|
500,000
|
|
|
530,085
|
|
Suffolk County, New York
Tobacco
|
|
|
|
|
|
|
|
Asset
Securitization Series B
|
|
|
|
|
|
|
|
5.00%
6/1/32
|
|
|
750,000
|
|
|
792,615
|
|
|
|
|
|
|
|
10,739,481
|
Education Revenue Bonds 24.78%
|
|
|
|
|
|
|
|
Arizona Board of
Regents System
|
|
|
|
|
|
|
|
Revenue (University of
|
|
|
|
|
|
|
|
Arizona) Series A
|
|
|
|
|
|
|
|
5.00%
7/1/33
|
|
|
1,000,000
|
|
|
1,150,549
|
|
5.00%
6/1/39
|
|
|
500,000
|
|
|
559,405
|
|
Bowling Green, Ohio Student
|
|
|
|
|
|
|
|
Housing Revenue (CFP I State
|
|
|
|
|
|
|
|
University Project) 6.00% 6/1/45
|
|
|
270,000
|
|
|
299,819
|
|
Build New York City,
New York
|
|
|
|
|
|
|
|
Resource (International Leadership
|
|
|
|
|
|
|
|
Charter School)
|
|
|
|
|
|
|
|
6.00%
7/1/43
|
|
|
500,000
|
|
|
501,465
|
|
California Statewide
Communities
|
|
|
|
|
|
|
|
Development Authority School
|
|
|
|
|
|
|
|
Facility Revenue (Aspire Public
|
|
|
|
|
|
|
|
Schools) 6.125% 7/1/46
|
|
|
625,000
|
|
|
661,350
|
|
California Statewide
Communities
|
|
|
|
|
|
|
|
Development Authority Student
|
|
|
|
|
|
|
|
Housing Revenue (Irvine, LLC -
|
|
|
|
|
|
|
|
UCI
East Campus) 6.00% 5/15/23
|
|
|
470,000
|
|
|
530,367
|
|
Delaware County, Pennsylvania
|
|
|
|
|
|
|
|
Authority (Villanova University)
|
|
|
|
|
|
|
|
5.00%
8/1/20
|
|
|
500,000
|
|
|
601,030
|
|
Iowa Higher Education
Loan Authority
|
|
|
|
|
|
|
|
Revenue (Private College Facility)
|
|
|
|
|
|
|
|
5.00%
10/1/38
|
|
|
500,000
|
|
|
532,785
|
|
Marietta, Georgia Development
|
|
|
|
|
|
|
|
Authority Revenue (Life University
|
|
|
|
|
|
|
|
Income
Project) 7.00% 6/15/39
|
|
|
430,000
|
|
|
462,267
|
|
Maryland Health &
Higher
|
|
|
|
|
|
|
|
Educational Facilities Authority
|
|
|
|
|
|
|
|
(Loyola University) Series A
|
|
|
|
|
|
|
|
5.00%
10/1/39
|
|
|
650,000
|
|
|
735,300
|
|
Maryland State Economic
|
|
|
|
|
|
|
|
Development Student Housing
|
|
|
|
|
|
|
|
Revenue (University of Maryland
|
|
|
|
|
|
|
|
College Park Projects) 5.75% 6/1/33
|
|
|
370,000
|
|
|
402,590
|
|
Massachusetts State
Health &
|
|
|
|
|
|
|
|
Educational Facilities Authority
|
|
|
|
|
|
|
|
Revenue (Harvard University)
|
|
|
|
|
|
|
|
Series
A 5.00% 12/15/29
|
|
|
600,000
|
|
|
711,630
|
|
Missouri State Health &
Educational
|
|
|
|
|
|
|
|
Facilities Authority Revenue
|
|
|
|
|
|
|
|
(Washington University)
|
|
|
|
|
|
|
|
Series
B 5.00% 11/15/30
|
|
|
600,000
|
|
|
713,472
|
|
Monroe County, New
York Industrial
|
|
|
|
|
|
|
|
Development Revenue (Nazareth
|
|
|
|
|
|
|
|
College Rochester Project)
|
|
|
|
|
|
|
|
5.50%
10/1/41
|
|
|
495,000
|
|
|
546,411
|
12
|
|
|
Principal
|
|
|
|
|
|
|
Amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
|
Education Revenue Bonds
(continued)
|
|
|
|
|
|
|
|
Montgomery County,
Pennsylvania
|
|
|
|
|
|
|
|
Higher
Education & Health
|
|
|
|
|
|
|
|
Authority Revenue
|
|
|
|
|
|
|
|
(Arcadia University)
|
|
|
|
|
|
|
|
5.25%
4/1/30
|
|
$
|
550,000
|
|
$
|
593,571
|
|
New Jersey Economic
Development
|
|
|
|
|
|
|
|
Authority Revenue
|
|
|
|
|
|
|
|
(MSU
Student Housing Project)
|
|
|
|
|
|
|
|
5.875%
6/1/42
|
|
|
735,000
|
|
|
826,022
|
|
New York City, New
York Trust for
|
|
|
|
|
|
|
|
Cultural Resources (Whitney
|
|
|
|
|
|
|
|
Museum
of American Art)
|
|
|
|
|
|
|
|
5.00%
7/1/31
|
|
|
500,000
|
|
|
555,390
|
|
New York State Dormitory
|
|
|
|
|
|
|
|
Authority (Columbia University)
|
|
|
|
|
|
|
|
5.00%
10/1/41
|
|
|
600,000
|
|
|
691,086
|
|
Oregon State
Facilities Authority
|
|
|
|
|
|
|
|
Revenue (CHF-Ashland)
|
|
|
|
|
|
|
|
5.00%
7/1/44 (AGM)
|
|
|
1,000,000
|
|
|
1,094,090
|
|
#(Concordia
University Project)
|
|
|
|
|
|
|
|
Series
A 144A 6.125% 9/1/30
|
|
|
135,000
|
|
|
146,583
|
|
Pennsylvania State Higher
Educational
|
|
|
|
|
|
|
|
Facilities Authority Student Housing
|
|
|
|
|
|
|
|
Revenue (Edinboro University
|
|
|
|
|
|
|
|
Foundation) 5.80% 7/1/30
|
|
|
400,000
|
|
|
451,928
|
|
(University Properties - East
|
|
|
|
|
|
|
|
Stroudsburg University)
|
|
|
|
|
|
|
|
5.25%
7/1/19
|
|
|
510,000
|
|
|
565,794
|
|
Phoenix, Arizona
Industrial
|
|
|
|
|
|
|
|
Development Authority Revenue
|
|
|
|
|
|
|
|
(Eagle
College Prep Project)
|
|
|
|
|
|
|
|
Series
A 5.00% 7/1/43
|
|
|
500,000
|
|
|
499,960
|
|
(Rowan
University) 5.00% 6/1/42
|
|
|
1,000,000
|
|
|
1,075,710
|
|
Pima County, Arizona
Industrial
|
|
|
|
|
|
|
|
Development Authority Revenue
|
|
|
|
|
|
|
|
(Edkey
Charter Schools Project)
|
|
|
|
|
|
|
|
6.00%
7/1/48
|
|
|
500,000
|
|
|
501,420
|
|
Private Colleges
& Universities
|
|
|
|
|
|
|
|
Authority Revenue (Mercer
|
|
|
|
|
|
|
|
University Project) Series A
|
|
|
|
|
|
|
|
5.00%
10/1/32
|
|
|
135,000
|
|
|
146,428
|
|
St. Lawrence County, New York
|
|
|
|
|
|
|
|
Industrial Development Agency
|
|
|
|
|
|
|
|
(St.
Lawrence University Project)
|
|
|
|
|
|
|
|
5.00%
7/1/26
|
|
|
270,000
|
|
|
320,911
|
|
Troy, New York
Capital Resource
|
|
|
|
|
|
|
|
Revenue (Rensselaer Polytechnic)
|
|
|
|
|
|
|
|
Series
A 5.125% 9/1/40
|
|
|
600,000
|
|
|
656,886
|
|
Wyoming Community Development
|
|
|
|
|
|
|
|
Authority Student Housing
|
|
|
|
|
|
|
|
Revenue (CHF-Wyoming LLC)
|
|
|
|
|
|
|
|
6.50%
7/1/43
|
|
|
250,000
|
|
|
284,555
|
|
|
|
|
|
|
|
16,818,774
|
Electric Revenue Bonds 4.75%
|
|
|
|
|
|
|
|
Puerto Rico Electric
Power
|
|
|
|
|
|
|
|
Authority Revenue
|
|
|
|
|
|
|
|
Series
A 5.00% 7/1/42
|
|
|
830,000
|
|
|
764,820
|
|
Series
TT 5.00% 7/1/26
|
|
|
1,165,000
|
|
|
1,153,233
|
|
Series
WW 5.50% 7/1/38
|
|
|
200,000
|
|
|
199,576
|
|
Series
XX 5.25% 7/1/40
|
|
|
805,000
|
|
|
772,832
|
|
Series
ZZ 5.25% 7/1/26
|
|
|
330,000
|
|
|
332,845
|
|
|
|
|
|
|
|
3,223,306
|
Healthcare Revenue Bonds 20.02%
|
|
|
|
|
|
|
|
Arizona Health Facilities
Authority
|
|
|
|
|
|
|
|
Revenue (Catholic Healthcare
|
|
|
|
|
|
|
|
West)
Series D 5.00% 7/1/28
|
|
|
500,000
|
|
|
543,995
|
|
Brevard County,
Florida Health
|
|
|
|
|
|
|
|
Facilities Authority Revenue
|
|
|
|
|
|
|
|
(Heath
First Project) 7.00% 4/1/39
|
|
|
90,000
|
|
|
109,963
|
|
Butler County, Pennsylvania
Hospital
|
|
|
|
|
|
|
|
Authority Revenue (Butler Health
|
|
|
|
|
|
|
|
System
Project) 7.125% 7/1/29
|
|
|
300,000
|
|
|
373,311
|
|
Hawaii Pacific Health
Special Purpose
|
|
|
|
|
|
|
|
Revenue Series A 5.50% 7/1/40
|
|
|
300,000
|
|
|
328,581
|
|
Illinois Finance Authority
Revenue
|
|
|
|
|
|
|
|
(Franciscan Communities)
|
|
|
|
|
|
|
|
Series
A 5.125% 5/15/43
|
|
|
250,000
|
|
|
256,443
|
|
(Silver Cross & Medical Centers)
|
|
|
|
|
|
|
|
7.00%
8/15/44
|
|
|
450,000
|
|
|
531,864
|
|
Koyukuk, Alaska
Revenue (Tanana
|
|
|
|
|
|
|
|
Chiefs
Conference Health Care
|
|
|
|
|
|
|
|
Facility Project) 7.75% 10/1/41
|
|
|
300,000
|
|
|
340,191
|
|
Louisiana Public Facilities
Authority
|
|
|
|
|
|
|
|
Revenue (Ochsner Clinic
|
|
|
|
|
|
|
|
Foundation Project) 6.50% 5/15/37
|
|
|
105,000
|
|
|
124,785
|
|
Lycoming County,
Pennsylvania
|
|
|
|
|
|
|
|
Authority Health System
|
|
|
|
|
|
|
|
Revenue (Susquehanna Health
|
|
|
|
|
|
|
|
System
Project)
|
|
|
|
|
|
|
|
Series
A 5.50% 7/1/28
|
|
|
500,000
|
|
|
546,770
|
|
Maine Health & Higher
Educational
|
|
|
|
|
|
|
|
Facilities Authority Revenue
|
|
|
|
|
|
|
|
(Maine
General Medical Center)
|
|
|
|
|
|
|
|
6.75%
7/1/41
|
|
|
300,000
|
|
|
360,672
|
|
Maricopa County,
Arizona Industrial
|
|
|
|
|
|
|
|
Development Authority
|
|
|
|
|
|
|
|
Health
Facilities Revenue
|
|
|
|
|
|
|
|
(Catholic Healthcare West)
|
|
|
|
|
|
|
|
Series
A 6.00% 7/1/39
|
|
|
500,000
|
|
|
568,325
|
|
Maryland Health & Higher
Educational
|
|
|
|
|
|
|
|
Facilities Authority Revenue (Carroll
|
|
|
|
|
|
|
|
Hospital) Series A 5.00% 7/1/37
|
|
|
500,000
|
|
|
549,915
|
|
Monroe County,
Pennsylvania
|
|
|
|
|
|
|
|
Hospital Authority Revenue
|
|
|
|
|
|
|
|
(Pocono Medical Center)
|
|
|
|
|
|
|
|
Series
A 5.00% 1/1/41
|
|
|
500,000
|
|
|
534,130
|
|
Montgomery County,
Pennsylvania
|
|
|
|
|
|
|
|
Industrial Development Authority
|
|
|
|
|
|
|
|
Revenue (Mortgage-Whitemarsh
|
|
|
|
|
|
|
|
Continuing Care) 6.25% 2/1/35
|
|
|
675,000
|
|
|
685,402
|
(continues)
13
Statements of net
assets
Delaware
Investments
®
National Municipal Income Fund
|
|
Principal
|
|
|
|
|
|
Amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
Healthcare Revenue Bonds
(continued)
|
|
|
|
|
|
|
New Hampshire Health
& Education
|
|
|
|
|
|
|
Facilities Authority Revenue
|
|
|
|
|
|
|
(Dartmouth-Hitchcock Medical
|
|
|
|
|
|
|
Center) 6.00% 8/1/38
|
$
|
300,000
|
|
$
|
348,321
|
|
New Jersey Health Care
Facilities
|
|
|
|
|
|
|
Financing Authority Revenue
|
|
|
|
|
|
|
Refunding (St. Peters University
|
|
|
|
|
|
|
Hospital) 6.25% 7/1/35
|
|
300,000
|
|
|
349,461
|
|
New Mexico State
Hospital
|
|
|
|
|
|
|
Equipment Loan Council Revenue
|
|
|
|
|
|
|
(Presbyterian Healthcare)
|
|
|
|
|
|
|
5.00% 8/1/39
|
|
500,000
|
|
|
546,405
|
|
New York State Dormitory
Authority
|
|
|
|
|
|
|
Revenue Non State Supported
|
|
|
|
|
|
|
Debt (Orange Regional Medical
|
|
|
|
|
|
|
Center) 6.25% 12/1/37
|
|
500,000
|
|
|
553,370
|
|
Ohio State Hospital
Facilities Revenue
|
|
|
|
|
|
|
Refunding (Cleveland Clinic
|
|
|
|
|
|
|
Health) Series A 5.50% 1/1/39
|
|
300,000
|
|
|
347,019
|
|
Orange County, Florida Health
|
|
|
|
|
|
|
Facilities Authority Revenue
|
|
|
|
|
|
|
(Mayflower Retirement Center)
|
|
|
|
|
|
|
5.00% 6/1/32
|
|
400,000
|
|
|
423,488
|
|
5.00% 6/1/36
|
|
250,000
|
|
|
262,733
|
|
5.125% 6/1/42
|
|
750,000
|
|
|
790,373
|
|
Oregon Health &
Science University
|
|
|
|
|
|
|
Series E 4.00% 7/1/29
|
|
1,000,000
|
|
|
1,056,639
|
|
Philadelphia, Pennsylvania Hospitals
&
|
|
|
|
|
|
|
Higher Education Facilities Authority
|
|
|
|
|
|
|
Revenue (Temple University Health
|
|
|
|
|
|
|
System) Series A 5.50% 7/1/30
|
|
300,000
|
|
|
320,223
|
|
University Medical
Center, Tuscon,
|
|
|
|
|
|
|
Arizona Hospital Revenue
|
|
|
|
|
|
|
6.50% 7/1/39
|
|
500,000
|
|
|
576,785
|
|
West Virginia Hospital
Finance
|
|
|
|
|
|
|
Authority (Highland Hospital
|
|
|
|
|
|
|
Obligation Group) 9.125% 10/1/41
|
|
500,000
|
|
|
639,230
|
|
Yavapai County,
Arizona Industrial
|
|
|
|
|
|
|
Development Authority Revenue
|
|
|
|
|
|
|
(Yavapai Regional Medical Center)
|
|
|
|
|
|
|
Series A 5.25% 8/1/21 (RADIAN)
|
|
1,500,000
|
|
|
1,523,999
|
|
|
|
|
|
|
13,592,393
|
Housing Revenue Bonds 2.44%
|
|
|
|
|
|
|
California Municipal Finance
Authority
|
|
|
|
|
|
|
Mobile Home Park Revenue
|
|
|
|
|
|
|
(Caritas Projects) Series A
|
|
|
|
|
|
|
5.50% 8/15/47
|
|
750,000
|
|
|
796,807
|
|
6.40% 8/15/45
|
|
430,000
|
|
|
474,272
|
|
Florida Housing
Finance Homeowner
|
|
|
|
|
|
|
Mortgage Revenue Series 2
|
|
|
|
|
|
|
5.90% 7/1/29 (NATL-RE) (AMT)
|
|
185,000
|
|
|
187,004
|
|
Puerto Rico Housing Finance
|
|
|
|
|
|
|
Authority (Subordinated-Capital
|
|
|
|
|
|
|
Fund Modernization)
|
|
|
|
|
|
|
5.50% 12/1/18 (HUD)
|
|
175,000
|
|
|
198,321
|
|
|
|
|
|
|
1,656,404
|
Lease Revenue Bonds 12.35%
|
|
|
|
|
|
|
California State
Public Works Board
|
|
|
|
|
|
|
Lease Revenue (Various Capital
|
|
|
|
|
|
|
Projects) Series A 5.00% 4/1/37
|
|
1,000,000
|
|
|
1,081,700
|
|
Hudson Yards, New York
|
|
|
|
|
|
|
Infrastructure Revenue
|
|
|
|
|
|
|
Series A 5.75% 2/15/47
|
|
1,100,000
|
|
|
1,289,958
|
|
Idaho State Building
Authority
|
|
|
|
|
|
|
Revenue (Health & Welfare Project)
|
|
|
|
|
|
|
Series A 5.00% 9/1/24
|
|
135,000
|
|
|
164,487
|
|
(State Police) Series I 5.00% 9/1/23
|
|
760,000
|
|
|
926,539
|
|
Minnesota State General
Revenue
|
|
|
|
|
|
|
Series B 5.00% 3/1/22
|
|
1,000,000
|
|
|
1,252,070
|
|
New Jersey Economic
Development
|
|
|
|
|
|
|
Authority (School Facilities
|
|
|
|
|
|
|
Construction) Series EE
|
|
|
|
|
|
|
5.00% 9/1/18
|
|
100,000
|
|
|
119,424
|
|
New York City, New York
Industrial
|
|
|
|
|
|
|
Development Agency (Senior Trips)
|
|
|
|
|
|
|
Series A 5.00% 7/1/28 (AMT)
|
|
250,000
|
|
|
265,195
|
|
New York Liberty
Development
|
|
|
|
|
|
|
Revenue (4 World Trade Center)
|
|
|
|
|
|
|
5.75% 11/15/51
|
|
970,000
|
|
|
1,137,238
|
|
Pima County, Arizona
Industrial
|
|
|
|
|
|
|
Development Authority Metro
|
|
|
|
|
|
|
Police Facility Revenue
|
|
|
|
|
|
|
(Nevada Project) Series A
|
|
|
|
|
|
|
5.25% 7/1/31
|
|
500,000
|
|
|
539,290
|
|
5.375% 7/1/39
|
|
500,000
|
|
|
543,755
|
|
Public Finance
Authority, Wisconsin
|
|
|
|
|
|
|
Airport Facilities Refunding
|
|
|
|
|
|
|
(AFCO Investors II Portfolio)
|
|
|
|
|
|
|
5.75% 10/1/31 (AMT)
|
|
500,000
|
|
|
496,340
|
|
Ventura County, California
Public
|
|
|
|
|
|
|
Financing Authority
|
|
|
|
|
|
|
Series A 5.00% 11/1/32
|
|
500,000
|
|
|
564,340
|
|
|
|
|
|
|
8,380,336
|
Local General Obligation Bonds 3.33%
|
|
|
|
|
|
|
Gila County, Arizona
Unified School
|
|
|
|
|
|
|
District #10 (Payson School
|
|
|
|
|
|
|
Improvement Project of 2006)
|
|
|
|
|
|
|
Series A 5.25% 7/1/27 (AMBAC)
|
|
500,000
|
|
|
565,890
|
|
New York City, New York
|
|
|
|
|
|
|
Series A-1 5.25% 8/15/21
|
|
250,000
|
|
|
301,068
|
|
Series I-1 5.375% 4/1/36
|
|
250,000
|
|
|
294,060
|
|
Ramapo Local
Development, New York
|
|
|
|
|
|
|
Revenue Refunding Guaranteed
|
|
|
|
|
|
|
5.00% 3/15/33
|
|
1,000,000
|
|
|
1,101,800
|
|
|
|
|
|
|
2,262,818
|
Special Tax Revenue Bonds 25.68%
|
|
|
|
|
|
|
Anne Arundel County, Maryland
|
|
|
|
|
|
|
Special Obligation Revenue
|
|
|
|
|
|
|
(National Business Park -
|
|
|
|
|
|
|
North Project)
|
|
|
|
|
|
|
6.10% 7/1/40
|
|
200,000
|
|
|
217,986
|
14
|
|
Principal
|
|
|
|
|
|
Amount
|
|
Value
|
Municipal Bonds
(continued)
|
|
|
|
|
|
Special Tax Revenue Bonds
(continued)
|
|
|
|
|
|
|
Brooklyn Arena Local
Development,
|
|
|
|
|
|
|
New
York Pilot Revenue
|
|
|
|
|
|
|
(Barclays Center Project)
|
|
|
|
|
|
|
6.25%
7/15/40
|
$
|
940,000
|
|
$
|
1,126,223
|
|
6.50%
7/15/30
|
|
300,000
|
|
|
368,151
|
|
California State Economic
Recovery
|
|
|
|
|
|
|
Series
A 5.25% 7/1/21
|
|
260,000
|
|
|
317,595
|
|
California Statewide
Communities
|
|
|
|
|
|
|
Development Authority Revenue
|
|
|
|
|
|
|
(Statewide Inland Regional Center
|
|
|
|
|
|
|
Project) 5.375% 12/1/37
|
|
500,000
|
|
|
528,585
|
|
Guam Government Business
Privilege
|
|
|
|
|
|
|
Tax
Revenue
|
|
|
|
|
|
|
Series
A 5.00% 1/1/22
|
|
775,000
|
|
|
922,831
|
|
Series
B-1 5.00% 1/1/42
|
|
1,000,000
|
|
|
1,089,800
|
|
Louisiana Stadium
& Exposition
|
|
|
|
|
|
|
District Refunding Senior
|
|
|
|
|
|
|
Series
A 5.00% 7/1/36
|
|
550,000
|
|
|
615,280
|
|
Massachusetts Bay
Transportation
|
|
|
|
|
|
|
Authority Senior
|
|
|
|
|
|
|
Series
A 5.25% 7/1/29
|
|
200,000
|
|
|
255,024
|
|
Miami-Dade County,
Florida
|
|
|
|
|
|
|
Special Obligation (Capital
|
|
|
|
|
|
|
Appreciation & Income)
|
|
|
|
|
|
|
Series
B 5.00% 10/1/35 (NATL-RE)
|
|
1,000,000
|
|
|
1,075,970
|
|
Mosaic District, Virginia
Community
|
|
|
|
|
|
|
Development Authority Revenue
|
|
|
|
|
|
|
Series
A 6.875% 3/1/36
|
|
520,000
|
|
|
602,290
|
|
New Jersey Economic
Development
|
|
|
|
|
|
|
Authority Revenue
|
|
|
|
|
|
|
5.00%
6/15/28
|
|
200,000
|
|
|
223,360
|
|
5.00%
6/15/29
|
|
800,000
|
|
|
887,456
|
|
New Jersey Transportation Trust
Fund
|
|
|
|
|
|
|
Authority Series AA 5.00% 6/15/21
|
|
1,000,000
|
|
|
1,203,660
|
|
New York City, New
York Industrial
|
|
|
|
|
|
|
Development Agency Civic Facility
|
|
|
|
|
|
|
Revenue (YMCA of Greater New
|
|
|
|
|
|
|
York
Project) 5.00% 8/1/36
|
|
1,000,000
|
|
|
1,040,620
|
|
New York City, New York
Transitional
|
|
|
|
|
|
|
Finance Authority Building Aid
|
|
|
|
|
|
|
Revenue Series S1 5.00% 7/15/21
|
|
750,000
|
|
|
925,793
|
|
New York State
Dormitory Authority
|
|
|
|
|
|
|
(State
Personal Income Tax
|
|
|
|
|
|
|
Revenue-Education)
|
|
|
|
|
|
|
Series
A 5.00% 3/15/38
|
|
570,000
|
|
|
645,690
|
|
Peoria, Arizona Municipal
|
|
|
|
|
|
|
Development Authority Sales Tax &
|
|
|
|
|
|
|
Excise
Shared Revenue (Senior Lien
|
|
|
|
|
|
|
&
Subordinate Lien) 5.00% 1/1/18
|
|
1,085,000
|
|
|
1,264,449
|
|
Puerto Rico Sales
Tax
|
|
|
|
|
|
|
Financing Revenue
|
|
|
|
|
|
|
Series
C 5.00% 8/1/40
|
|
600,000
|
|
|
621,270
|
|
First
Subordinate
|
|
|
|
|
|
|
Series
A 5.75% 8/1/37
|
|
245,000
|
|
|
261,092
|
|
Series
C 5.00% 8/1/22
|
|
530,000
|
|
|
619,406
|
|
Series
C 6.00% 8/1/39
|
|
300,000
|
|
|
324,633
|
|
Ω
(Convertible Capital
Appreciation
|
|
|
|
|
|
|
Bonds)
Series A 6.75% 8/1/32
|
|
220,000
|
|
|
227,759
|
|
Regional Transportation
District,
|
|
|
|
|
|
|
Colorado Tax Revenue (FasTracks
|
|
|
|
|
|
|
Project) Series A 5.00% 11/1/26
|
|
500,000
|
|
|
602,125
|
|
San Mateo, California
Special Tax
|
|
|
|
|
|
|
Community Facilities District
|
|
|
|
|
|
|
#2008-1 (Bay Meadows)
|
|
|
|
|
|
|
6.00%
9/1/42
|
|
95,000
|
|
|
103,935
|
|
Virginia Public Building
Authority
|
|
|
|
|
|
|
Series
A 5.00% 8/1/26
|
|
1,000,000
|
|
|
1,199,900
|
|
^Wyandotte County,
Kansas City,
|
|
|
|
|
|
|
Kansas
Unified Government
|
|
|
|
|
|
|
Special Obligation Revenue
|
|
|
|
|
|
|
(Capital Appreciation) Sales
|
|
|
|
|
|
|
Tax
Subordinate Lien Series B
|
|
|
|
|
|
|
6.07%
6/1/21
|
|
240,000
|
|
|
159,120
|
|
|
|
|
|
|
17,430,003
|
State & Territory General Obligation Bonds
6.30%
|
|
|
|
|
California State Various
Purposes
|
|
|
|
|
|
|
5.00%
9/1/41
|
|
460,000
|
|
|
501,717
|
|
5.00%
10/1/41
|
|
440,000
|
|
|
480,251
|
|
5.25%
11/1/40
|
|
320,000
|
|
|
368,666
|
|
6.00%
4/1/38
|
|
105,000
|
|
|
125,610
|
|
New York State Series
A 5.00% 2/15/39
|
|
300,000
|
|
|
343,773
|
|
Oregon State Series K 5.00%
5/1/22
|
|
1,275,000
|
|
|
1,613,921
|
|
Puerto Rico
Commonwealth
|
|
|
|
|
|
|
(Public Improvement)
|
|
|
|
|
|
|
Series
A 5.75% 7/1/41
|
|
500,000
|
|
|
502,070
|
|
Series
C 6.00% 7/1/39
|
|
335,000
|
|
|
341,693
|
|
|
|
|
|
|
4,277,701
|
Transportation Revenue Bonds 22.55%
|
|
|
|
|
|
|
Bay Area, California Toll
Authority
|
|
|
|
|
|
|
Revenue (San Francisco Bay Area)
|
|
|
|
|
|
|
5.00%
4/1/27
|
|
750,000
|
|
|
887,978
|
|
Central Texas
Regional Mobility
|
|
|
|
|
|
|
Authority Revenue Senior Lien
|
|
|
|
|
|
|
6.00%
1/1/41
|
|
520,000
|
|
|
603,221
|
|
Dallas/Fort Worth, Texas
International
|
|
|
|
|
|
|
Airport Series G 5.00% 11/1/33
|
|
1,000,000
|
|
|
1,115,090
|
|
Harris County, Texas
Metropolitan
|
|
|
|
|
|
|
Transit Authority
|
|
|
|
|
|
|
Series
A 5.00% 11/1/24
|
|
500,000
|
|
|
601,365
|
|
Indiana Finance Authority
Revenue
|
|
|
|
|
|
|
(Private Activity-Ohio River Bridges)
|
|
|
|
|
|
|
5.00%
7/1/40 (AMT)
|
|
960,000
|
|
|
998,630
|
|
Maryland State
Economic
|
|
|
|
|
|
|
Development Revenue
|
|
|
|
|
|
|
(Transportation Facilities Project)
|
|
|
|
|
|
|
Series
A 5.75% 6/1/35
|
|
255,000
|
|
|
289,642
|
|
Metropolitan Transportation
Authority,
|
|
|
|
|
|
|
New
York
|
|
|
|
|
|
|
Series
A 5.00% 11/15/41
|
|
500,000
|
|
|
550,150
|
|
Series
E 4.00% 11/15/38
|
|
1,000,000
|
|
|
1,000,910
|
(continues)
15
Statements of net
assets
Delaware
Investments
®
National Municipal Income Fund
|
|
Principal
|
|
|
|
|
|
|
Amount
|
|
Value
|
|
Municipal
Bonds
(continued)
|
|
|
|
|
|
|
Transportation Revenue Bonds
(continued)
|
|
|
|
|
|
|
|
Metropolitan Washington D.C.
|
|
|
|
|
|
|
|
Airports
Authority Dulles Toll
|
|
|
|
|
|
|
|
Road Revenue
(First Senior Lien)
|
|
|
|
|
|
|
|
Series A
5.25% 10/1/44
|
$
|
245,000
|
|
$
|
270,585
|
|
|
New
Jersey State Turnpike Authority
|
|
|
|
|
|
|
|
Revenue
Series A 5.00% 1/1/27
|
|
1,000,000
|
|
|
1,153,160
|
|
|
New York Liberty Development
|
|
|
|
|
|
|
|
Revenue (1
World Trade Center
|
|
|
|
|
|
|
|
Port
Authority Construction)
|
|
|
|
|
|
|
|
5.00%
12/15/41
|
|
500,000
|
|
|
558,470
|
|
|
North Texas Tollway Authority
|
|
|
|
|
|
|
|
Special
Projects System
|
|
|
|
|
|
|
|
Series A
5.00% 9/1/20
|
|
250,000
|
|
|
306,358
|
|
|
Pennsylvania Turnpike Commission
|
|
|
|
|
|
|
|
Subordinate
(Special Motor
|
|
|
|
|
|
|
|
License
Foundation)
|
|
|
|
|
|
|
|
5.00%
12/1/22
|
|
500,000
|
|
|
590,075
|
|
|
Series B
5.00% 12/1/41
|
|
500,000
|
|
|
552,715
|
|
|
Port
Authority of New York & New
|
|
|
|
|
|
|
|
Jersey
Special Obligation Revenue
|
|
|
|
|
|
|
|
(JFK
International Air Terminal)
|
|
|
|
|
|
|
|
6.00%
12/1/42
|
|
230,000
|
|
|
269,408
|
|
|
6.50%
12/1/28
|
|
500,000
|
|
|
551,965
|
|
|
Regional Transportation, Colorado
|
|
|
|
|
|
|
|
District
Revenue (Denver Transit
|
|
|
|
|
|
|
|
Partners)
6.00% 1/15/41
|
|
500,000
|
|
|
575,860
|
|
|
St.
Louis, Missouri Airport Revenue
|
|
|
|
|
|
|
|
(Lambert St.
Louis International)
|
|
|
|
|
|
|
|
5.00% 7/1/32
(AMT)
|
|
1,000,000
|
|
|
1,057,240
|
|
|
Series A-1
6.625% 7/1/34
|
|
325,000
|
|
|
383,919
|
|
|
Texas Private Activity Bond
Surface
|
|
|
|
|
|
|
|
Transportation Senior Lien Revenue
|
|
|
|
|
|
|
|
(LBJ
Infrastructure)
|
|
|
|
|
|
|
|
7.00%
6/30/40
|
|
285,000
|
|
|
344,648
|
|
|
7.50%
6/30/33
|
|
665,000
|
|
|
834,821
|
|
|
(NTE
Mobility Partners)
|
|
|
|
|
|
|
|
6.875%
12/31/39
|
|
1,000,000
|
|
|
1,189,159
|
|
|
7.50%
12/31/31
|
|
500,000
|
|
|
618,175
|
|
|
|
|
|
|
|
15,303,544
|
|
Water & Sewer Revenue Bonds
5.59%
|
|
|
|
|
|
|
|
Atlanta, Georgia Water & Wastewater
|
|
|
|
|
|
|
|
Revenue
Series A 6.25% 11/1/39
|
|
800,000
|
|
|
973,384
|
|
|
New York City, New York Municipal
|
|
|
|
|
|
|
|
Water
Finance Authority (Second
|
|
|
|
|
|
|
|
Generation
Resolution) Fiscal 2012
|
|
|
|
|
|
|
|
Series BB
5.25% 6/15/44
|
|
525,000
|
|
|
590,735
|
|
|
Phoenix, Arizona Civic Improvement
|
|
|
|
|
|
|
|
Wastewater
Systems Revenue
|
|
|
|
|
|
|
|
(Junior
Lien) Series A 5.00% 7/1/39
|
|
900,000
|
|
|
1,018,314
|
|
|
San Francisco, California City
&
|
|
|
|
|
|
|
|
County
Public Utilities
|
|
|
|
|
|
|
|
Commission
Subordinate
|
|
|
|
|
|
|
|
Series F
5.00% 11/1/27
|
|
500,000
|
|
|
588,470
|
|
|
Texas State Series C 5.00% 8/1/22
|
|
500,000
|
|
|
621,870
|
|
|
|
|
|
|
|
3,792,773
|
|
|
|
|
|
|
|
|
Total Municipal Bonds
|
|
|
|
|
|
|
|
(cost $90,628,584)
|
|
|
|
$
|
97,477,533
|
|
|
|
Total Value of Securities
143.61%
|
|
|
|
|
|
|
|
(cost $90,628,584)
|
|
|
|
|
97,477,533
|
|
Liquidation Value of Preferred Stock
(44.20%)
|
|
|
|
|
(30,000,000
|
)
|
Receivables and Other Assets
|
|
|
|
|
|
|
|
Net of Liabilities 0.59%
|
|
|
|
|
398,544
|
|
Net Assets Applicable to
4,528,443
|
|
|
|
|
|
|
|
Shares Outstanding; Equivalent to
|
|
|
|
|
|
|
|
$14.99 Per Share 100.00%
|
|
|
|
$
|
67,876,077
|
|
|
|
Components of Net Assets at March 31,
2013:
|
|
|
|
|
|
|
Common stock, $0.01 par value, unlimited shares
|
|
|
|
|
|
|
|
authorized to the Fund
|
|
|
|
$
|
60,617,476
|
|
Undistributed net investment
income
|
|
|
|
|
792,940
|
|
Accumulated net realized loss on investments
|
|
|
|
|
(383,288
|
)
|
Net unrealized appreciation of
investments
|
|
|
|
|
6,848,949
|
|
Total net assets
|
|
|
|
$
|
67,876,077
|
|
|
Variable rate security. The
rate shown is the rate as of March 31, 2013. Interest rates reset
periodically.
|
#
|
Security exempt from
registration under Rule 144A of the Securities Act of 1933, as amended. At
March 31, 2013, the aggregate value of Rule 144A securities was $146,583,
which represented 0.22% of the Funds net assets. See Note 9 in Notes to
financial statements.
|
W
|
Step coupon bond. Indicates
security that has a zero coupon that remains in effect until a
predetermined date at which time the stated interest rate becomes
effective.
|
^
|
Zero coupon security. The rate
shown is the yield at the time of purchase.
|
|
See Note 6 in Notes to
financial statements.
|
Summary of
Abbreviations:
AGM Insured by Assured
Guaranty Municipal Corporation
AMBAC Insured by AMBAC Assurance
Corporation
AMT Subject to Alternative Minimum Tax
HUD Housing &
Urban Development Section 8
NATL-RE Insured
by National Public Finance Guarantee Corporation
RADIAN Insured by Radian
Asset Assurance
See accompanying notes, which are an
integral part of the financial statements.
16
Statements of assets and
liabilities
Delaware Investments
®
Closed-End
Municipal Bond Funds
March 31,
2013
|
|
Delaware
|
|
Delaware
|
|
Delaware
|
|
|
Investments
|
|
Investments
|
|
Investments
|
|
|
Colorado
|
|
Minnesota
|
|
National
|
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
|
|
Income
|
|
Income
|
|
Income
|
|
|
Fund, Inc.
|
|
Fund II,
Inc.
|
|
Fund
|
Assets:
|
|
|
|
|
|
|
|
|
|
Investments, at value
|
|
$
|
102,632,038
|
|
$
|
246,431,961
|
|
$
|
97,477,533
|
Short-term
investments, at value
|
|
|
200,000
|
|
|
|
|
|
|
Cash
|
|
|
28,648
|
|
|
524,036
|
|
|
71,600
|
Receivable for
securities sold
|
|
|
|
|
|
5,055
|
|
|
15,221
|
Interest income receivable
|
|
|
1,366,817
|
|
|
3,510,614
|
|
|
1,260,801
|
Offering cost
for preferred shareholders
|
|
|
205,883
|
|
|
368,361
|
|
|
283,553
|
Total assets
|
|
|
104,433,386
|
|
|
250,840,027
|
|
|
99,108,708
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Liquidation value of preferred stock
|
|
|
30,000,000
|
|
|
75,000,000
|
|
|
30,000,000
|
Payable for
securities purchased
|
|
|
|
|
|
|
|
|
1,141,250
|
Due to manager and affiliates
|
|
|
18,106
|
|
|
43,252
|
|
|
14,085
|
Other accrued
expenses
|
|
|
33,248
|
|
|
84,069
|
|
|
43,902
|
Distributions payable
|
|
|
33,394
|
|
|
83,486
|
|
|
33,394
|
Total
liabilities
|
|
|
30,084,748
|
|
|
75,210,807
|
|
|
31,232,631
|
|
Total net assets
|
|
$
|
74,348,638
|
|
$
|
175,629,220
|
|
$
|
67,876,077
|
|
Investments, at
cost
|
|
$
|
96,096,590
|
|
$
|
232,122,331
|
|
$
|
90,628,584
|
Short-term investments, at cost
|
|
|
200,000
|
|
|
|
|
|
|
See accompanying notes, which are an
integral part of the financial statements.
17
Statements of operations
Delaware Investments
®
Closed-End
Municipal Bond Funds
Year Ended March 31,
2013
|
|
Delaware
|
|
Delaware
|
|
Delaware
|
|
|
Investments
|
|
Investments
|
|
Investments
|
|
|
Colorado
|
|
Minnesota
|
|
National
|
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
|
|
Income
|
|
Income
|
|
Income
|
|
|
Fund, Inc.
|
|
Fund II,
Inc.
|
|
Fund
|
Investment Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
4,627,063
|
|
|
$
|
10,693,539
|
|
|
$
|
4,325,925
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
420,228
|
|
|
|
1,007,362
|
|
|
|
389,540
|
|
Offering cost
|
|
|
41,896
|
|
|
|
89,457
|
|
|
|
57,464
|
|
Accounting and administration expenses
|
|
|
40,835
|
|
|
|
97,888
|
|
|
|
37,852
|
|
Rating agency
fees
|
|
|
38,283
|
|
|
|
35,580
|
|
|
|
31,624
|
|
Dividend disbursing and transfer agent fees and expenses
|
|
|
34,674
|
|
|
|
70,814
|
|
|
|
34,868
|
|
Legal fees
|
|
|
31,098
|
|
|
|
37,986
|
|
|
|
34,618
|
|
Audit and tax
|
|
|
18,180
|
|
|
|
16,780
|
|
|
|
14,559
|
|
Reports and statements
to shareholders
|
|
|
17,467
|
|
|
|
32,205
|
|
|
|
23,112
|
|
Pricing fees
|
|
|
7,313
|
|
|
|
12,239
|
|
|
|
14,432
|
|
Taxes (Pennsylvania
franchise tax)
|
|
|
5,000
|
|
|
|
12,000
|
|
|
|
|
|
Stock exchange fees
|
|
|
4,678
|
|
|
|
11,232
|
|
|
|
|
|
Directors/Trustees
fees
|
|
|
3,546
|
|
|
|
8,082
|
|
|
|
3,200
|
|
Dues and services
|
|
|
1,554
|
|
|
|
3,970
|
|
|
|
1,803
|
|
Custodian fees
|
|
|
1,345
|
|
|
|
3,258
|
|
|
|
1,428
|
|
Insurance fees
|
|
|
1,128
|
|
|
|
3,726
|
|
|
|
1,217
|
|
Registration
fees
|
|
|
868
|
|
|
|
868
|
|
|
|
868
|
|
Consulting fees
|
|
|
799
|
|
|
|
1,877
|
|
|
|
676
|
|
Directors/Trustees
expenses
|
|
|
224
|
|
|
|
536
|
|
|
|
199
|
|
Total operating expenses
|
|
|
669,116
|
|
|
|
1,445,860
|
|
|
|
647,460
|
|
Net Investment Income
|
|
|
3,957,947
|
|
|
|
9,247,679
|
|
|
|
3,678,465
|
|
|
Net Realized and Unrealized Gain:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain on investments
|
|
|
89,037
|
|
|
|
2,208,718
|
|
|
|
1,281,216
|
|
Net change in unrealized
appreciation (depreciation) of investments
|
|
|
1,916,263
|
|
|
|
1,762,327
|
|
|
|
2,597,893
|
|
Net Realized and
Unrealized Gain
|
|
|
2,005,300
|
|
|
|
3,971,045
|
|
|
|
3,879,109
|
|
|
Dividends and Distributions to Preferred
Shareholders
|
|
|
(411,526
|
)
|
|
|
(1,025,435
|
)
|
|
|
(406,627
|
)
|
Net Increase in Net
Assets Resulting from Operations
|
|
$
|
5,551,721
|
|
|
$
|
12,193,289
|
|
|
$
|
7,150,947
|
|
See accompanying notes, which are an
integral part of the financial statements.
18
Statements of changes in net
assets
Delaware Investments
®
Closed-End
Municipal Bond Funds
|
|
Delaware Investments
|
|
Delaware Investments
|
|
|
Colorado Municipal
|
|
Minnesota Municipal
|
|
|
Income Fund, Inc.
|
|
Income Fund II, Inc.
|
|
|
|
Year Ended
|
|
Year Ended
|
|
|
3/31/13
|
|
3/31/12
|
|
3/31/13
|
|
3/31/12
|
Increase (Decrease) in Net Assets from
Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
$
|
3,957,947
|
|
|
$
|
3,233,923
|
|
|
$
|
9,247,679
|
|
|
$
|
7,747,076
|
|
Net
realized gain
|
|
|
89,037
|
|
|
|
976,769
|
|
|
|
2,208,718
|
|
|
|
1,701,330
|
|
Net change in unrealized
appreciation (depreciation)
|
|
|
1,916,263
|
|
|
|
6,668,604
|
|
|
|
1,762,327
|
|
|
|
11,778,378
|
|
Dividends and distributions to preferred shareholders
|
|
|
(411,526
|
)
|
|
|
(149,762
|
)
|
|
|
(1,025,435
|
)
|
|
|
(374,404
|
)
|
Net increase in net assets
resulting from operations
|
|
|
5,551,721
|
|
|
|
10,729,534
|
|
|
|
12,193,289
|
|
|
|
20,852,380
|
|
|
Dividends and Distributions to Common
Shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
|
(3,337,599
|
)
|
|
|
(2,805,518
|
)
|
|
|
(7,938,433
|
)
|
|
|
(6,672,886
|
)
|
Net
realized gain
|
|
|
(478,873
|
)
|
|
|
|
|
|
|
(460,199
|
)
|
|
|
|
|
|
|
|
(3,816,472
|
)
|
|
|
(2,805,518
|
)
|
|
|
(8,398,632
|
)
|
|
|
(6,672,886
|
)
|
|
Net Increase in Net Assets
|
|
|
1,735,249
|
|
|
|
7,924,016
|
|
|
|
3,794,657
|
|
|
|
14,179,494
|
|
|
Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
72,613,389
|
|
|
|
64,689,373
|
|
|
|
171,834,563
|
|
|
|
157,655,069
|
|
End of
year
|
|
$
|
74,348,638
|
|
|
$
|
72,613,389
|
|
|
$
|
175,629,220
|
|
|
$
|
171,834,563
|
|
|
Undistributed net investment income
|
|
$
|
800,128
|
|
|
$
|
598,215
|
|
|
$
|
1,759,475
|
|
|
$
|
1,504,205
|
|
|
|
Delaware Investments
|
|
|
National Municipal
|
|
|
Income Fund
|
|
|
|
Year Ended
|
|
|
3/31/13
|
|
3/31/12
|
Increase (Decrease) in Net Assets from
Operations:
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
$
|
3,678,465
|
|
|
$
|
2,343,640
|
|
Net
realized gain
|
|
|
1,281,216
|
|
|
|
909,697
|
|
Net change in unrealized
appreciation (depreciation)
|
|
|
2,597,893
|
|
|
|
4,515,112
|
|
Dividends and distributions to preferred shareholders
|
|
|
(406,627
|
)
|
|
|
(18,904
|
)
|
Net increase in net assets
resulting from operations
|
|
|
7,150,947
|
|
|
|
7,749,545
|
|
|
Dividends and Distributions to Common
Shareholders from:
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
|
(2,762,350
|
)
|
|
|
(2,295,215
|
)
|
|
|
|
(2,762,350
|
)
|
|
|
(2,295,215
|
)
|
|
Capital Share Transactions:
|
|
|
|
|
|
|
|
|
Net assets from merger to
Common Shareholders*
|
|
|
|
|
|
|
40,715,147
|
|
Tender
offer**
|
|
|
|
|
|
|
(13,240,759
|
)
|
|
|
|
|
|
|
|
27,474,388
|
|
|
Net Increase in Net Assets
|
|
|
4,388,597
|
|
|
|
32,928,718
|
|
|
Net Assets:
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
63,487,480
|
|
|
|
30,558,762
|
|
End of
year
|
|
$
|
67,876,077
|
|
|
$
|
63,487,480
|
|
|
Undistributed net investment income
|
|
$
|
792,940
|
|
|
$
|
376,432
|
|
*
|
See Note 7
in Notes to financial statements.
|
**
|
See Note 6
in Notes to financial statements.
|
See accompanying notes, which are an
integral part of the financial statements.
19
Financial highlights
Delaware Investments
®
Colorado
Municipal Income Fund, Inc.
Selected data for each share of the Fund
outstanding throughout each period were as follows:
|
|
Year
Ended
|
|
|
3/31/13
|
|
3/31/12
|
|
3/31/11
|
|
3/31/10
|
|
3/31/09
|
Net asset value, beginning of
period
|
|
|
$15.010
|
|
|
|
$13.370
|
|
|
|
$13.990
|
|
|
|
$13.220
|
|
|
|
$14.260
|
|
|
Income (loss) from investment
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
0.818
|
|
|
|
0.669
|
|
|
|
0.601
|
|
|
|
0.607
|
|
|
|
0.755
|
|
Net realized and unrealized gain
(loss)
|
|
|
0.416
|
|
|
|
1.582
|
|
|
|
(0.651
|
)
|
|
|
0.733
|
|
|
|
(0.965
|
)
|
Dividends and distributions on preferred stock from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
(0.085
|
)
|
|
|
(0.031
|
)
|
|
|
|
|
|
|
|
|
|
|
(0.173
|
)
|
Total dividends and distributions on
preferred stock
|
|
|
(0.085
|
)
|
|
|
(0.031
|
)
|
|
|
|
|
|
|
|
|
|
|
(0.173
|
)
|
Total from investment operations
|
|
|
1.149
|
|
|
|
2.220
|
|
|
|
(0.050
|
)
|
|
|
1.340
|
|
|
|
(0.383
|
)
|
|
Less dividends and distributions to common
shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
(0.690
|
)
|
|
|
(0.580
|
)
|
|
|
(0.570
|
)
|
|
|
(0.570
|
)
|
|
|
(0.657
|
)
|
Net realized gain
|
|
|
(0.099
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions
|
|
|
(0.789
|
)
|
|
|
(0.580
|
)
|
|
|
(0.570
|
)
|
|
|
(0.570
|
)
|
|
|
(0.657
|
)
|
|
Net asset value, end of period
|
|
|
$15.370
|
|
|
|
$15.010
|
|
|
|
$13.370
|
|
|
|
$13.990
|
|
|
|
$13.220
|
|
|
Market value, end of period
|
|
|
$14.840
|
|
|
|
$14.600
|
|
|
|
$12.450
|
|
|
|
$13.390
|
|
|
|
$11.240
|
|
|
Total investment return based
on:
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market value
|
|
|
6.92%
|
|
|
|
22.41%
|
|
|
|
(3.00%
|
)
|
|
|
24.49%
|
|
|
|
(21.63%
|
)
|
Net asset value
|
|
|
7.71%
|
|
|
|
17.19%
|
|
|
|
(0.30%
|
)
|
|
|
10.55%
|
|
|
|
(2.66%
|
)
|
|
Ratios and supplemental data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets applicable to common shares, end of period (000 omitted)
|
|
|
$74,349
|
|
|
|
$72,613
|
|
|
|
$64,689
|
|
|
|
$67,651
|
|
|
|
$63,952
|
|
Ratio of expenses to average net assets
applicable to common shares
2
|
|
|
0.89%
|
|
|
|
0.73%
|
|
|
|
0.56%
|
|
|
|
0.56%
|
|
|
|
0.91%
|
|
Ratio of net investment income to average net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
applicable to common
shares
2
|
|
|
5.27%
|
|
|
|
4.68%
|
|
|
|
4.31%
|
|
|
|
4.41%
|
|
|
|
5.55%
|
|
Ratio of net investment income to average
net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
applicable to common shares net of dividends to preferred
shares
3
|
|
|
4.72%
|
|
|
|
4.46%
|
|
|
|
4.31%
|
|
|
|
4.41%
|
|
|
|
4.28%
|
|
Portfolio turnover
|
|
|
8%
|
|
|
|
64%
|
|
|
|
10%
|
|
|
|
20%
|
|
|
|
16%
|
|
|
Leverage analysis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of preferred shares outstanding (000
omitted)
4
|
|
|
$30,000
|
|
|
|
$30,000
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
Net asset coverage per share of preferred
shares, end of period
4
|
|
$
|
347,829
|
|
|
$
|
342,045
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
Liquidation value per
share of preferred shares
4,5
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
1
Total investment return is calculated assuming a purchase of
common stock on the opening of the first day and a sale on the closing of the
last day of each period reported. Dividends and distributions, if any, are
assumed for the purposes of this calculation to be reinvested at prices obtained
under the Funds dividend reinvestment plan. Generally, total investment return
based on net asset value will be higher than total investment return based on
market value in periods where there is an increase in the discount or a decrease
in the premium of the market value to the net asset value from the beginning to
the end of such periods. Conversely, total investment return based on net asset
value will be lower than total investment return based on market value in
periods where there is a decrease in the discount or an increase in the premium
of the market value to the net asset value from the beginning to the end of such
periods.
2
Ratios do not reflect the effect of dividend payments to
preferred shareholders, if applicable.
3
Ratio reflects total net investment income less dividends
paid to preferred shareholders, if applicable, divided by average net assets
applicable to common shareholders.
4
In November 2011, the Fund issued a new series of 300
variable rate preferred shares, with a liquidation preference of $100,000 per
share.
5
Excluding any accumulated but unpaid dividends.
See accompanying notes, which are an
integral part of the financial statements.
20
Delaware Investments
®
Minnesota
Municipal Income Fund II, Inc.
Selected data for each share of the Fund
outstanding throughout each period were as follows:
|
|
Year
Ended
|
|
|
|
3/31/13
|
|
3/31/12
|
|
3/31/11
|
|
3/31/10
|
|
3/31/09
|
|
Net asset value, beginning of
period
|
|
|
$14.940
|
|
|
|
$13.700
|
|
|
|
$14.060
|
|
|
|
$13.140
|
|
|
|
$14.190
|
|
|
|
|
Income (loss) from investment
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
0.804
|
|
|
|
0.673
|
|
|
|
0.612
|
|
|
|
0.602
|
|
|
|
0.776
|
|
|
Net realized and unrealized gain
(loss)
|
|
|
0.345
|
|
|
|
1.180
|
|
|
|
(0.402
|
)
|
|
|
0.888
|
|
|
|
(1.013
|
)
|
|
Dividends and distributions on preferred stock from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
(0.089
|
)
|
|
|
(0.033
|
)
|
|
|
|
|
|
|
|
|
|
|
(0.175
|
)
|
|
Total dividends and distributions on
preferred stock
|
|
|
(0.089
|
)
|
|
|
(0.033
|
)
|
|
|
|
|
|
|
|
|
|
|
(0.175
|
)
|
|
Total from investment operations
|
|
|
1.060
|
|
|
|
1.820
|
|
|
|
0.210
|
|
|
|
1.490
|
|
|
|
(0.412
|
)
|
|
|
|
Less dividends to common shareholders
from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
(0.690
|
)
|
|
|
(0.580
|
)
|
|
|
(0.570
|
)
|
|
|
(0.570
|
)
|
|
|
(0.638
|
)
|
|
Net realized gain
|
|
|
(0.040
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends
|
|
|
(0.730
|
)
|
|
|
(0.580
|
)
|
|
|
(0.570
|
)
|
|
|
(0.570
|
)
|
|
|
(0.638
|
)
|
|
|
|
Net asset value, end of period
|
|
|
$15.270
|
|
|
|
$14.940
|
|
|
|
$13.700
|
|
|
|
$14.060
|
|
|
|
$13.140
|
|
|
|
|
Market value, end of period
|
|
|
$15.630
|
|
|
|
$14.230
|
|
|
|
$12.600
|
|
|
|
$12.740
|
|
|
|
$11.250
|
|
|
|
|
Total investment return based
on:
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market value
|
|
|
15.18%
|
|
|
|
17.95%
|
|
|
|
3.32%
|
|
|
|
18.58%
|
|
|
|
(11.91%
|
)
|
|
Net asset value
|
|
|
7.18%
|
|
|
|
13.90%
|
|
|
|
1.80%
|
|
|
|
12.04%
|
|
|
|
(2.48%
|
)
|
|
|
|
Ratios and supplemental data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets applicable to common shares, end of period (000 omitted)
|
|
$
|
175,629
|
|
|
$
|
171,835
|
|
|
$
|
157,655
|
|
|
$
|
161,723
|
|
|
$
|
151,184
|
|
|
Ratio of expenses to average net assets
applicable to common shares
2,4
|
|
|
0.82%
|
|
|
|
0.70%
|
|
|
|
0.56%
|
|
|
|
0.56%
|
|
|
|
0.98%
|
|
|
Ratio of net investment income to average net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
applicable to common
shares
2
|
|
|
5.23%
|
|
|
|
4.67%
|
|
|
|
4.35%
|
|
|
|
4.36%
|
|
|
|
5.74%
|
|
|
Ratio of net investment income to average
net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
applicable to common shares net of dividends to preferred
shares
3
|
|
|
4.65%
|
|
|
|
4.44%
|
|
|
|
4.35%
|
|
|
|
4.36%
|
|
|
|
4.45%
|
|
|
Portfolio turnover
|
|
|
24%
|
|
|
|
44%
|
|
|
|
9%
|
|
|
|
19%
|
|
|
|
15%
|
|
|
|
|
Leverage analysis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of preferred shares outstanding (000
omitted)
5
|
|
|
$75,000
|
|
|
|
$75,000
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Net asset coverage per share of preferred
shares, end of period
5
|
|
$
|
334,172
|
|
|
$
|
329,113
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
Liquidation value per
share of preferred shares
5,6
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
1
Total investment return is calculated assuming a purchase of
common stock on the opening of the first day and a sale on the closing of the
last day of each period reported. Dividends and distributions, if any, are
assumed for the purposes of this calculation to be reinvested at prices obtained
under the Funds dividend reinvestment plan. Generally, total investment return
based on net asset value will be higher than total investment return based on
market value in periods where there is an increase in the discount or a decrease
in the premium of the market value to the net asset value from the beginning to
the end of such periods. Conversely, total investment return based on net asset
value will be lower than total investment return based on market value in
periods where there is a decrease in the discount or an increase in the premium
of the market value to the net asset value from the beginning to the end of such
periods.
2
Ratios do not reflect the effect of dividend payments to
preferred shareholders, if applicable.
3
Ratio reflects total net investment income less dividends
paid to preferred shareholders, if applicable, divided by average net assets
applicable to common shareholders.
4
The ratio of expenses to average net assets applicable to
common shares includes interest and related expenses which include, but are not
limited to, interest expense, remarketing fees, liquidity fees, and trustees
fees in connection with the Funds participation in inverse floater programs for
the year ended March 31, 2009. See Notes 1 and 8 in Notes of financial
statements.
5
In November 2011, the Fund issued a new series of 750
variable rate preferred shares, with a liquidation preference of $100,000 per
share.
6
Excluding any accumulated but unpaid dividends.
See accompanying notes, which are an
integral part of the financial statements.
(continues)
21
Financial
highlights
Delaware Investments
®
National Municipal Income Fund
Selected data for each share of the Fund
outstanding throughout each period were as follows:
|
|
Year
Ended
|
|
|
|
3/31/13
|
|
3/31/12
|
|
3/31/11
|
|
3/31/10
|
|
3/31/09
|
|
Net asset value, beginning of
period
|
|
|
$14.020
|
|
|
$12.620
|
|
|
$13.070
|
|
|
$11.960
|
|
|
$13.360
|
|
|
|
|
|
Income (loss) from investment
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
0.812
|
|
|
0.535
|
|
|
0.610
|
|
|
0.571
|
|
|
0.704
|
|
|
Net realized and unrealized gain
(loss)
|
|
|
0.858
|
|
|
1.409
|
|
|
(0.532
|
)
|
|
1.049
|
|
|
(1.367
|
)
|
|
Dividends and distributions on preferred stock from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment
income
|
|
|
(0.090
|
)
|
|
(0.004
|
)
|
|
|
|
|
|
|
|
(0.172
|
)
|
|
Total dividends and distributions on
preferred stock
|
|
|
(0.090
|
)
|
|
(0.004
|
)
|
|
|
|
|
|
|
|
(0.172
|
)
|
|
Total from investment operations
|
|
|
1.580
|
|
|
1.940
|
|
|
0.078
|
|
|
1.620
|
|
|
(0.835
|
)
|
|
|
|
|
Less dividends and distributions to common
shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
investment income
|
|
|
(0.610
|
)
|
|
(0.540
|
)
|
|
(0.528
|
)
|
|
(0.510
|
)
|
|
(0.565
|
)
|
|
Net realized gain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions
|
|
|
(0.610
|
)
|
|
(0.540
|
)
|
|
(0.528
|
)
|
|
(0.510
|
)
|
|
(0.565
|
)
|
|
|
|
|
Net asset value, end of period
|
|
|
$14.990
|
|
|
$14.020
|
|
|
$12.620
|
|
|
$13.070
|
|
|
$11.960
|
|
|
|
|
|
Market value, end of period
|
|
|
$14.480
|
|
|
$13.240
|
|
|
$12.200
|
|
|
$12.140
|
|
|
$10.850
|
|
|
|
|
|
Total investment return based
on:
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market value
|
|
|
14.12%
|
|
|
13.19%
|
|
|
4.78%
|
|
|
16.69%
|
|
|
(4.31%
|
)
|
|
Net asset value
|
|
|
11.56%
|
|
|
15.87%
|
|
|
0.67%
|
|
|
13.97%
|
|
|
(5.65%
|
)
|
|
|
|
|
Ratios and supplemental data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
assets applicable to common shares, end of period (000 omitted)
|
|
|
$67,876
|
|
|
$63,487
|
|
|
$30,559
|
|
|
$31,650
|
|
|
$28,967
|
|
|
Ratio of expenses to average net assets
applicable to common shares
2
|
|
|
0.96%
|
|
|
0.99%
|
|
|
0.65%
|
|
|
0.63%
|
|
|
1.06%
|
|
|
Ratio of net investment income to average net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
applicable to common
shares
2
|
|
|
5.46%
|
|
|
3.99%
|
|
|
4.64%
|
|
|
4.48%
|
|
|
5.63%
|
|
|
Ratio of net investment income to average
net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
applicable to common
shares net of dividends to preferred shares
3
|
|
|
4.86%
|
|
|
3.96%
|
|
|
4.64%
|
|
|
4.48%
|
|
|
4.25%
|
|
|
Portfolio turnover
|
|
|
42%
|
|
|
101%
|
|
|
50%
|
|
|
69%
|
|
|
36%
|
|
|
|
|
|
Leverage analysis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of preferred shares outstanding (000
omitted)
4
|
|
|
$30,000
|
|
|
$30,000
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Net asset coverage per share of preferred
shares, end of period
4
|
|
|
$326,254
|
|
|
$311,625
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
Liquidation value per
share of preferred shares
4,5
|
|
|
$100,000
|
|
|
$100,000
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
1
Total investment return is
calculated assuming a purchase of common stock on the opening of the first
day and a sale on the closing of the last day of each period reported.
Dividends and distributions, if any, are assumed for the purposes of this
calculation to be reinvested at prices obtained under the Funds dividend
reinvestment plan. Generally, total investment return based on net asset
value will be higher than total investment return based on market value in
periods where there is an increase in the discount or a decrease in the
premium of the market value to the net asset value from the beginning to
the end of such periods. Conversely, total investment return based on net
asset value will be lower than total investment return based on market
value in periods where there is a decrease in the discount or an increase
in the premium of the market value to the net asset value from the
beginning to the end of such periods.
|
2
Ratios do not reflect the
effect of dividend payments to preferred shareholders, if
applicable.
|
3
Ratio reflects
total net investment income less dividends paid to preferred shareholders,
if applicable, divided by average net assets applicable to common
shareholders.
|
4
In March 2012,
the Fund issued a new series of 300 variable rate preferred shares, with a
liquidation preference of $100,000 per share.
|
5
Excluding any
accumulated but unpaid dividends.
|
See accompanying notes, which are an integral part of
the financial statements.
22
Notes to financial statements
Delaware Investments
®
Closed-End
Municipal Bond Funds
March 31,
2013
Delaware Investments Colorado Municipal
Income Fund, Inc. (Colorado Municipal Fund) and Delaware Investments Minnesota
Municipal Income Fund II, Inc. (Minnesota Municipal Fund II) are organized as
Minnesota corporations and Delaware Investments National Municipal Income Fund
(National Municipal Fund) is organized as a Massachusetts business trust (each
referred to as a Fund and collectively as the Funds). Colorado Municipal Fund,
Minnesota Municipal Fund II and National Municipal Fund are considered
diversified closed-end management investment companies under the Investment
Company Act of 1940, as amended. The Funds shares trade on the New York Stock
Exchange MKT, the successor to the American Stock Exchange.
The investment objective of each of the
Colorado Municipal Fund and Minnesota Municipal Fund II is to provide current
income exempt from federal income tax and from state personal income tax, if
any, consistent with the preservation of capital. The investment objective of
the National Municipal Fund is to provide current income exempt from federal
income tax, consistent with the preservation of capital. Each of Colorado
Municipal Fund and Minnesota Municipal Fund II seek to achieve its investment
objective by investing substantially all of its net assets in investment grade,
tax-exempt municipal obligations of its respective state at the time of
investment. The National Municipal Fund seeks to achieve its investment
objective by investing at least 80% of its net assets in securities the income
from which is exempt from federal income tax.
1. Significant Accounting
Policies
The following accounting policies are in
accordance with U.S. generally accepted accounting principles (U.S. GAAP) and
are consistently followed by the Funds.
Security Valuation
Debt securities are valued based upon valuations provided by
an independent pricing service or broker and reviewed by management. To the
extent current market prices are not available, the pricing service may take
into account developments related to the specific security, as well as
transactions in comparable securities. Valuations for fixed income securities
utilize matrix systems, which reflect such factors as security prices, yields,
maturities, and ratings, and are supplemented by dealer and exchange quotations.
Generally, other securities and assets for which market quotations are not
readily available are valued at fair value as determined in good faith under the
direction of each Funds Board of Directors/Trustees (each a Board, and
collectively, the Boards). In determining whether market quotations are readily
available or fair valuation will be used, various factors will be taken into
consideration, such as market closures or suspension of trading in a
security.
Federal Income Taxes
No provision for federal income taxes has been made as each
Fund intends to continue to qualify for federal income tax purposes as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended, and make the requisite distributions to shareholders. The
Funds evaluate tax positions taken or expected to be taken in the course of
preparing the Funds tax returns to determine whether the tax positions are
more-likely-than-not of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold are recorded as
a tax benefit or expense in the current year. Management has analyzed the Funds
tax positions taken for all open federal income tax years (March 31, 2010March
31, 2013), and has concluded that no provision for federal income tax is
required in the Funds financial statements.
Interest and Related Expenses
Interest and related expenses include, but
are not limited to, interest expense, remarketing fees, liquidity fees, and
trustees fees from the Funds participation in inverse floater programs where a
Fund has transferred its own bonds to a trust that issues floating rate
securities with an aggregate principal amount equal to the principal of the
transferred bonds. In conveyance of the bond, the Funds receive the inverse
floating rate securities and cash from the trust. As a result of certain rights
retained by the Funds, the transfer of the bond is not considered a sale, but
rather a form of financing for accounting purposes whereby the cash received is
recorded as a liability and interest expense is recorded based on the interest
rate of the floating rate securities. Remarketing fees, liquidity fees, and
trustees expenses are recorded on the accrual basis. There were no interest and
related expenses for the year ended March 31, 2013.
Use of Estimates
The preparation of financial statements in conformity with
U.S. GAAP requires management to make estimates and assumptions that affect the
fair value of investments, the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates and the
differences could be material.
Other
Expenses directly attributable to a Fund are charged directly to that
Fund. Other expenses common to various funds within the Delaware
Investments
®
Family of Funds are generally allocated amongst such
funds on the basis of average net assets. Management fees and some other
expenses are paid monthly. Security transactions are recorded on the date the
securities are purchased or sold (trade date) for financial reporting purposes.
Costs used in calculating realized gains and losses on the sale of investment
securities are those of the specific securities sold. Interest income is
recorded on the accrual basis. Discounts and premiums on debt securities are
amortized to interest income over the lives of the respective securities using
the effective interest method. Each Fund declares and pays dividends from net
investment income monthly and distributions from net realized gain on
investments, if any, annually. Each Fund may distribute income dividends and
capital gains more frequently, if necessary for tax purposes. Dividends and
distributions, if any, are recorded on the ex-dividend date.
The Funds may receive earnings credits
from their custodian when positive cash balances are maintained, which are used
to offset custody fees. There were no earnings credits for the year ended March
31, 2013.
(continues)
23
Notes to financial
statements
Delaware
Investments
®
Closed-End Municipal Bond Funds
2. Investment Management,
Administration Agreements and Other Transactions with Affiliates
In accordance with the terms of its
respective investment management agreement, each Fund pays Delaware Management
Company (DMC), a series of Delaware Management Business Trust and the investment
manager, an annual fee of 0.40% which is calculated daily based on the adjusted
average daily net assets of each Fund.
Delaware Service Company, Inc. (DSC), an
affiliate of DMC, provides fund accounting and financial administration
oversight services to the Funds. For these services, the Funds pay DSC fees
based on the aggregate daily net assets of the Delaware Investments
®
Family of Funds at the following annual rate: 0.0050% of the first $30 billion;
0.0045% of the next $10 billion; 0.0040% of the next $10 billion; and 0.0025% of
aggregate average daily net assets in excess of $50 billion. The fees payable to
DSC under the service agreement described above are allocated among all Funds in
the Delaware Investments Family of Funds on a relative net asset value basis.
For the year ended March 31, 2013, the Funds were charged as follows:
|
|
Colorado
|
|
Minnesota
|
|
National
|
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
|
|
Fund
|
|
Fund II
|
|
Fund
|
|
|
$5,114
|
|
$12,259
|
|
$4,740
|
At March 31, 2013, each Fund had
liabilities payable to affiliates as follows:
|
|
Colorado
|
|
Minnesota
|
|
National
|
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
|
|
Fund
|
|
Fund II
|
|
Fund
|
Investment management
fees payable to DMC
|
|
$
|
35,563
|
|
|
$
|
85,213
|
|
|
$
|
33,291
|
|
Accounting administration and other
expenses
|
|
|
431
|
|
|
|
1,031
|
|
|
|
403
|
|
payable to
DSC
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
payable to DMC and affiliates*
|
|
|
1,106
|
|
|
|
2,262
|
|
|
|
879
|
|
*DMC, as part of its administrative services, pays operating expenses on
behalf of each Fund and is reimbursed on a periodic basis. Expenses include
items such as printing of shareholder reports, legal and tax services,
registration fees and directors/trustees fees.
As provided in the investment management
agreement, each Fund bears the cost of certain legal and tax services, including
internal legal and tax services provided to each Fund by DMC and/or its
affiliates employees. For the year ended March 31, 2013, each Fund was charged
for internal legal and tax services provided by DMC and/or its affiliates
employees as follows:
|
|
Colorado
|
|
Minnesota
|
|
National
|
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
|
|
Fund
|
|
Fund II
|
|
Fund
|
|
|
$20,507
|
|
$22,518
|
|
$16,399
|
Directors/Trustees fees include expenses
accrued by the Funds for each Directors/Trustees retainer and meeting fees.
Certain officers of DMC and DSC are officers and/or Directors/Trustees of the
Trust. These officers and Directors/Trustees are paid no compensation by the
Funds.
3. Investments
For the year ended March 31, 2013, the
Funds made purchases and sales of investment securities other than short-term
investments as follows:
|
|
Colorado
|
|
Minnesota
|
|
National
|
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
|
|
Fund
|
|
Fund II
|
|
Fund
|
Purchases
|
|
$
|
8,066,552
|
|
|
$
|
59,619,912
|
|
|
$
|
57,084,937
|
|
Sales
|
|
|
7,836,556
|
|
|
|
61,059,486
|
|
|
|
39,709,982
|
|
At March 31, 2013, the cost of investments
and unrealized appreciation (depreciation) for federal income tax purposes for
each Fund were as follows:
|
|
Colorado
|
|
Minnesota
|
|
National
|
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
|
|
Fund
|
|
Fund II
|
|
Fund
|
Cost of investments
|
|
|
$
|
96,282,229
|
|
|
|
|
$
|
231,990,607
|
|
|
|
|
$
|
90,603,984
|
|
|
Aggregate unrealized
appreciation
|
|
|
$
|
6,857,406
|
|
|
|
|
$
|
15,052,517
|
|
|
|
|
$
|
7,287,651
|
|
|
Aggregate unrealized
depreciation
|
|
|
|
(307,597
|
)
|
|
|
|
|
(611,163
|
)
|
|
|
|
|
(414,102
|
)
|
|
Net unrealized appreciation
|
|
|
$
|
6,549,809
|
|
|
|
|
$
|
14,441,354
|
|
|
|
|
$
|
6,873,549
|
|
|
24
U.S. GAAP defines fair value as the
price that the Funds would receive to sell an asset or pay to transfer a
liability in an orderly transaction between market participants at the
measurement date under current market conditions. A three level hierarchy for
fair value measurements has been established based upon the transparency of
inputs to the valuation of an asset or liability. Inputs may be observable or
unobservable and refer broadly to the assumptions that market participants would
use in pricing the asset or liability. Observable inputs reflect the assumptions
market participants would use in pricing the asset or liability based on market
data obtained from sources independent of the reporting entity. Unobservable
inputs reflect the reporting entitys own assumptions about the assumptions that
market participants would use in pricing the asset or liability developed based
on the best information available under the circumstances. Each Funds
investment in its entirety is assigned a level based upon the observability of
the inputs which are significant to the overall valuation. The three level
hierarchy of inputs is summarized below.
Level 1
|
inputs are quoted prices in active
markets for identical investments (e.g., equity securities, open-end
investment companies, futures contracts, exchange-traded options
contracts)
|
|
|
Level 2
|
other observable inputs
(including, but not limited to: quoted prices for similar assets or
liabilities in markets that are active, quoted prices for identical or
similar assets or liabilities in markets that are not active, inputs other
than quoted prices that are observable for the assets or liabilities (such
as interest rates, yield curves, volatilities, prepayment speeds, loss
severities, credit risks and default rates) or other market-corroborated
inputs) (e.g., debt securities, government securities, swap contracts,
foreign currency exchange contracts, foreign securities utilizing
international fair value pricing, broker-quoted securities, fair valued
securities)
|
|
|
Level 3
|
inputs are significant
unobservable inputs (including the Funds own assumptions used to
determine the fair value of investments) (e.g., broker-quoted securities,
fair valued securities)
|
Level 3 investments are valued using
significant unobservable inputs. The Fund may also use an income-based valuation
approach in which the anticipated future cash flows of the investment are
discounted to calculate fair value. Discounts may also be applied due to the
nature or duration of any restrictions on the disposition of the investments.
Valuations may also be based upon current market prices of securities that are
comparable in coupon, rating, maturity and industry. The derived value of a
Level 3 investment may not represent the value which is received upon
disposition and this could impact the results of operations.
The following table summarizes the
valuation of each Funds investments by fair value hierarchy levels as of March
31, 2013:
|
Colorado Municipal Fund
|
|
Level 2
|
Municipal Bonds
|
|
$
|
102,632,038
|
|
Short-Term Investments
|
|
|
200,000
|
|
Total
|
|
$
|
102,832,038
|
|
|
|
|
Minnesota
Municipal Fund II
|
|
Level 2
|
Municipal Bonds
|
|
$
|
246,431,961
|
|
|
|
|
National
Municipal Fund
|
|
Level 2
|
Municipal Bonds
|
|
$
|
97,477,533
|
|
During the year ended March 31, 2013,
there were no transfers between Level 1 investments, Level 2 investments or
Level 3 investments that had a material impact to the Funds. The Funds policy
is to recognize transfers between levels at the beginning of the reporting
period.
(continues)
25
Notes to financial
statements
Delaware
Investments
®
Closed-End Municipal Bond Funds
4. Dividend and Distribution
Information
Income and long-term capital gain
distributions are determined in accordance with federal income tax regulations,
which may differ from U.S. GAAP. Additionally, distributions from net short-term
gains on sales of investment securities are treated as ordinary income for
federal income tax purposes. The tax character of dividends and distributions
paid during the years ended March 31, 2013 and 2012 was as follows:
|
|
Colorado
|
|
Minnesota
|
|
National
|
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
|
|
Fund
|
|
Fund II
|
|
Fund
|
Year Ended 3/31/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income
|
|
|
$
|
11,156
|
|
|
|
$
|
345,149
|
|
|
|
$
|
4,581
|
|
Tax-exempt
income
|
|
|
|
3,337,599
|
|
|
|
|
7,938,433
|
|
|
|
|
2,757,769
|
|
Long-term capital gain
|
|
|
|
467,717
|
|
|
|
|
115,050
|
|
|
|
|
|
|
Total
|
|
|
$
|
3,816,472
|
|
|
|
$
|
8,398,632
|
|
|
|
$
|
2,762,350
|
|
|
|
Year Ended 3/31/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income
|
|
|
$
|
959
|
|
|
|
$
|
533
|
|
|
|
$
|
8,868
|
|
Tax-exempt
income
|
|
|
|
2,804,559
|
|
|
|
|
6,672,353
|
|
|
|
|
2,286,347
|
|
Total
|
|
|
$
|
2,805,518
|
|
|
|
$
|
6,672,886
|
|
|
|
$
|
2,295,215
|
|
5. Components of Net Assets on a Tax
Basis
As of March 31, 2013, the components of
net assets on a tax basis were as follows:
|
|
Colorado
|
|
Minnesota
|
|
National
|
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
|
|
Fund
|
|
Fund II
|
|
Fund
|
Shares of beneficial interest
|
|
|
$
|
66,918,121
|
|
|
|
|
$
|
157,931,075
|
|
|
|
|
$
|
60,617,476
|
|
|
Undistributed tax-exempt
income
|
|
|
|
833,522
|
|
|
|
|
|
1,833,037
|
|
|
|
|
|
826,334
|
|
|
Undistributed ordinary income
|
|
|
|
10,968
|
|
|
|
|
|
559,635
|
|
|
|
|
|
|
|
|
Undistributed long-term capital
gains
|
|
|
|
69,612
|
|
|
|
|
|
947,605
|
|
|
|
|
|
|
|
|
Distributions payable
|
|
|
|
(33,394
|
)
|
|
|
|
|
(83,486
|
)
|
|
|
|
|
(33,394
|
)
|
|
Capital loss carryforwards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(407,888
|
)
|
|
Unrealized appreciation
|
|
|
|
6,549,809
|
|
|
|
|
|
14,441,354
|
|
|
|
|
|
6,873,549
|
|
|
Net assets
|
|
|
$
|
74,348,638
|
|
|
|
|
$
|
175,629,220
|
|
|
|
|
$
|
67,876,077
|
|
|
The differences between book basis and
tax basis components of net assets are primarily attributable to tax treatment
of market discount on debt instruments.
For financial reporting purposes,
capital accounts are adjusted to reflect the tax character of permanent book/tax
differences. Reclassifications are primarily due to tax treatment of market
discount on debt instruments. Results of operations and net assets were not
affected by these reclassifications. For the year ended March 31, 2013, the
Funds recorded the following reclassifications.
|
|
Colorado
|
|
Minnesota
|
|
National
|
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
|
|
Fund
|
|
Fund II
|
|
Fund
|
Undistributed net
investment income
|
|
|
$
|
(6,909
|
)
|
|
|
|
$
|
(28,541
|
)
|
|
|
|
$
|
(92,980
|
)
|
|
Accumulated net realized gain
(loss)
|
|
|
|
6,909
|
|
|
|
|
|
28,541
|
|
|
|
|
|
92,980
|
|
|
For federal income tax purposes,
capital loss carryforwards may be carried forward and applied against future
capital gains. At March 31, 2013, the Funds utilized capital loss carryforwards
as follows:
|
Colorado
|
|
Minnesota
|
|
National
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
|
Fund
|
|
Fund
|
|
Fund
|
|
$
|
|
$257,166
|
|
$1,339,948
|
26
For federal income tax purposes, capital
loss carryforwards may be carried forward and applied against future capital
gains. Capital loss carryforwards remaining at March 31, 2013 will expire as
follows:
|
|
Colorado
|
|
Minnesota
|
|
National
|
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
Year of Expiration
|
|
|
Fund
|
|
Fund II
|
|
Fund
|
2018
|
|
$
|
|
$
|
|
$407,888
|
On December 22, 2010, the Regulated
Investment Company Modernization Act of 2010 (the Act) was enacted, which
changed various technical rules governing the tax treatment of regulated
investment companies. The changes are generally effective for taxable years
beginning after the date of enactment. Under the Act, the Funds will be
permitted to carry forward capital losses incurred in taxable years beginning
after the date of enactment for an unlimited period. However, any losses
incurred during those future taxable years will be required to be utilized prior
to the losses incurred in pre-enactment taxable years, which carry an expiration
date. As a result of this ordering rule, pre-enactment capital loss
carryforwards may be more likely to expire unused. Additionally, post-enactment
capital loss carryforwards will retain their character as either short-term or
long-term capital losses rather than being considered all short-term as
permitted under previous regulation.
6. Capital Stock
Pursuant to their articles of
incorporation, Colorado Municipal Fund and Minnesota Municipal Fund II each have
200 million shares of $0.01 par value common shares authorized. National
Municipal Fund has been authorized to issue an unlimited amount of $0.01 par
value common shares. The Funds did not repurchase any shares under the Share
Repurchase Program during the year ended March 31, 2013. Shares issuable under
the Funds dividend reinvestment plan are purchased by the Funds transfer
agent, Computershare Shareowner Services LLC (Computershare), in the open
market.
On February 18, 2011, the National
Municipal Funds Board approved a tender offer for shares of the Arizona
Municipal Funds common stock. The tender offer authorized the National
Municipal Fund to purchase for cash up to 18% of the then-outstanding shares of
the Arizona Municipal Funds common stock after the reorganization (Common
Stock) at a per share price equal to 99% of the net asset value per share of the
Common Stock at the expiration of the tender offer.
In connection with the tender offer, the
National Municipal Fund purchased 994,051 shares of capital stock at a total
cost of approximately $13,240,759. The tender offer was oversubscribed and all
tenders of shares were subject to pro-ration (at a ratio of approximately
0.58504231) in accordance with the terms of its tender offer.
On November 15, 2011, Delaware Investments
Colorado Municipal Income Fund, Inc. (Colorado Municipal Fund) and Delaware
Investments Minnesota Municipal Income Fund II, Inc. (Minnesota Municipal Fund
II), issued $30,000,000 and $75,000,000, respectively, of Series 2016 Variable
Rate MuniFund Term Preferred (VMTP) Shares, with $100,000 liquidation value per
share in a privately negotiated offering. On March 15, 2012, Delaware
Investments National Municipal Income Fund (National Municipal Fund) issued
$30,000,000 Series 2017 VMTP Shares, with $100,000 liquidation value per share
in a privately negotiated offering. Proceeds from the issuance of VMTP Shares,
net of offering expenses, were invested in accordance with each funds
investment objective. The VMTP Shares were offered to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933.
Colorado Municipal Fund and Minnesota
Municipal Fund II are obligated to redeem their respective VMTP Shares on
December 1, 2016, unless earlier redeemed or repurchased by the Fund. National
Municipal Fund is obligated to redeem its VMTP Shares on April 1, 2017, unless
earlier redeemed or repurchased by the Fund. VMTP Shares are subject to optional
and mandatory redemption in certain circumstances. The VMTP Shares may be
redeemed at the option of a Fund, subject to payment of a premium until December
1, 2013 (with respect to Minnesota Municipal Fund II and Colorado Municipal Fund) and April 1, 2014 (with respect to National Municipal Fund), and at par
thereafter. A Fund may be obligated to redeem certain of the VMTP Shares if the
Fund fails to maintain certain asset coverage and leverage ratio requirements
and such failures are not cured by the applicable cure date. The redemption
price per share is equal to the sum of the liquidation value per share plus any
accumulated but unpaid dividends. Dividends on the VMTP Shares are set weekly,
subject to adjustments in certain circumstances. The weight average dividend
rates for the year ended March 31, 2013 were as follows:
|
Colorado
|
|
Minnesota
|
|
National
|
|
Municipal
|
|
Municipal
|
|
Municipal
|
|
Fund
|
|
Fund II
|
|
Fund
|
|
1.4%
|
|
1.4%
|
|
1.4%
|
The Funds use leverage because their
managers believe that, over time, leveraging may provide opportunities for
additional income and total return for common shareholders. However, the use of
leverage also can expose common shareholders to additional volatility. For
example, as the prices of securities held by a Fund decline, the negative impact
of these valuation changes on common share net asset value and common
shareholder total return is magnified by the use of leverage; accordingly, the
use of structural leverage may hurt a Funds overall performance.
Leverage may also cause the Funds to incur
certain costs. In the event that a Fund is unable to meet certain criteria
(including, but not limited to, maintaining certain ratings with Fitch Ratings
and Moodys Investor Service, funding dividend payments or funding redemptions),
that Fund will pay additional fees with respect to the leverage.
(continues)
27
Notes to financial
statements
Delaware
Investments
®
Closed-End Municipal Bond Funds
7. Fund Merger
On June 20, 2011, the National
Municipal Fund acquired all of the assets of the Delaware Investments Arizona
Municipal Fund, Inc. (Acquired Fund), a closed-end investment company, in
exchange for the shares of the National Municipal Fund (Acquiring Fund) pursuant
to a Plan and Agreement of Reorganization (Reorganization). The shareholders of
the Acquired Fund received shares of the Acquiring Fund equal to the aggregate
net asset value of their share in the Acquired Fund prior to the Reorganization,
as shown in the following table:
|
|
Acquiring
|
|
Acquired
|
|
|
|
|
Fund
|
|
Fund
|
|
|
|
|
Shares
|
|
Shares
|
|
Value
|
Common
Stock
|
|
2,422,200
|
|
3,100,925
|
|
$40,715,147
|
The Reorganization was treated as a
non-taxable event and, accordingly, the Acquired Funds basis in securities
acquired reflected historical cost basis as of the date of transfer. The net
assets and net unrealized appreciation of the Acquired Fund as of the close of
business on June 17, 2011, were as follows:
Net assets
|
$
|
40,715,147
|
Net unrealized
appreciation
|
|
65,229
|
The net assets of the Acquiring Fund
before the acquisition were $31,792,649. The net assets of the Acquiring Fund
immediately following the acquisition were $72,507,796.
Assuming that the acquisition had been
completed on April 1, 2011, the beginning of the Acquiring Funds reporting
period, the Acquiring Funds pro forma results of operations for the year ended
March 31, 2012, are as follows:
Net investment
income
|
$
|
2,611,659
|
Net realized gain on
investments
|
|
909,699
|
Change in unrealized
appreciation
|
|
5,974,605
|
Net increase in net assets
resulting from operations
|
|
9,477,059
|
Because the combined investment
portfolios have been managed as a single integrated portfolio since the
acquisition was completed, it is not practicable to separate the amounts of
revenue and earnings of the Acquired Fund that have been included in the
National Municipal Funds statement of operations since June 20,
2011.
8. Derivatives
U.S. GAAP requires disclosures that
enable investors to understand: 1) how and why an entity uses derivatives; 2)
how they are accounted for; and 3) how they affect an entitys results of
operations and financial position.
Inverse Floaters
Each Fund may participate in inverse floater programs where a
Fund transfers its own bonds to a trust that issues floating rate securities and
inverse floating rate securities (inverse floaters) with an aggregate principal
amount equal to the principal of the transferred bonds. The inverse floaters
received by the Funds are derivative tax-exempt obligations with floating or
variable interest rates that move in the opposite direction of short-term
interest rates, usually at an accelerated speed. Consequently, the market values
of the inverse floaters will generally be more volatile than other tax-exempt
investments. The Funds typically use inverse floaters to adjust the duration of
their portfolio. Duration measures a portfolios sensitivity to changes in
interest rates. By holding inverse floaters with a different duration than the
underlying bonds that a Fund transferred to the trust, the Fund seeks to adjust
its portfolios sensitivity to changes in interest rates. The Funds may also
invest in inverse floaters to add additional income to the Funds or to adjust
the Funds exposure to a specific segment of the yield curve. At March 31, 2013,
and during the year then ended, the Funds held no investments in inverse
floaters.
9. Credit and Market
Risk
The Funds concentrate their investments
in securities issued by municipalities. Because each of the Colorado Municipal
Income Fund and the Minnesota Municipal Income Fund invest substantially all of
its net assets in municipal obligations of its respective state at the time of
investment, events in that state may have a significant impact on the
performance and investments of the Colorado Municipal Income Fund and the
Minnesota Municipal Income Fund. These events may include economic or political
policy changes, tax base erosion, state constitutional limits on tax increases,
budget deficits and other financial difficulties, changes in the credit ratings
assigned to the states municipal issuers, the effects of natural or human-made
disasters, or other economic, legislative or political or social issues. Any
downgrade to the credit rating of the securities issued by the U.S. government
may result in a downgrade of securities issued by the states or U.S.
territories. The National Municipal Fund will be subject to these risks as well
but to a lesser extent because it invests at least 80% of its net assets in
securities, the income from which is exempt from federal income tax and is not
limited to investing substantially all of its assets in municipal obligations of
a single state.
28
Each Fund may invest a percentage of
assets in obligations of governments of U.S. territories, commonwealths and
possessions such as Puerto Rico, the Virgin Islands or Guam. To the extent a
Fund invests in such obligations, that Fund may be adversely affected by local
political and economic conditions and developments within these U.S.
territories, commonwealths and possessions. Currently Puerto Rico is
experiencing financial difficulties, causing ratings organizations to downgrade
Puerto Rican general obligation bonds as well as a number of other bonds issued
in Puerto Rico, which negatively affects the market values and marketability of
many or all Puerto Rican municipal obligations. The Funds hold some of these
securities, which may negatively impact the Funds performance. If the economic
situation in Puerto Rico changes, the volatility, credit quality and performance
of the Funds could be affected to the extent a Fund holds Puerto Rican
securities.
Many municipalities insure repayment
for their obligations. Although bond insurance may reduce the risk of loss due
to default by an issuer, such bonds remain subject to the risk that market value
may fluctuate for other reasons and there is no assurance that the insurance
company will meet its obligations. A real or perceived decline in
creditworthiness of a bond insurer can have an adverse impact on the value of
insured bonds held in each Fund. At March 31, 2013, the percentages of each
Funds net assets insured by insurers are listed below and these securities have
been identified in the statements of net assets.
Colorado Municipal
Fund
|
36
|
%
|
Minnesota Municipal Fund
II
|
8
|
%
|
National Municipal
Fund
|
7
|
%
|
The Funds invest a portion of their
assets in high yield fixed income securities, which are securities rated BB or
lower by Standard & Poors (S&P) and/or Ba or lower by Moodys Investors
Service, Inc. (Moodys), or similarly rated by another nationally recognized
statistical rating organization. Investments in these higher yielding securities
are generally accompanied by a greater degree of credit risk than higher rated
securities. Additionally, lower rated securities may be more susceptible to
adverse economic and competitive industry conditions than investment grade
securities.
The Funds may invest in advanced
refunded bonds, escrow secured bonds or defeased bonds. Under current federal
tax laws and regulations, state and local government borrowers are permitted to
refinance outstanding bonds by issuing new bonds. The issuer refinances the
outstanding debt to either reduce interest costs or to remove or alter
restrictive covenants imposed by the bonds being refinanced. A refunding
transaction where the municipal securities are being refunded within 90 days
from the issuance of the refunding issue is known as a current refunding.
Advance refunded bonds are bonds in which the refunded bond issue remains
outstanding for more than 90 days following the issuance of the refunding issue.
In an advance refunding, the issuer will use the proceeds of a new bond issue to
purchase high grade interest bearing debt securities which are then deposited in
an irrevocable escrow account held by an escrow agent to secure all future
payments of principal and interest and bond premium of the advance refunded
bond. Bonds are escrowed to maturity when the proceeds of the refunding issue
are deposited in an escrow account for investment sufficient to pay all of the
principal and interest on the original interest payment and maturity
dates.
Bonds are considered pre-refunded
when the refunding issues proceeds are escrowed only until a permitted call
date or dates on the refunded issue with the refunded issue being redeemed at
the time, including any required premium. Bonds become defeased when the
rights and interests of the bondholders and of their lien on the pledged
revenues or other security under the terms of the bond contract are substituted
with an alternative source of revenues (the escrow securities) sufficient to
meet payments of principal and interest to maturity or to the first call dates.
Escrowed secured bonds will often receive a rating of AAA from Moodys, S&P,
and/or Fitch Ratings due to the strong credit quality of the escrow securities
and the irrevocable nature of the escrow deposit agreement.
Certain obligations held by the Fund
may have liquidity protection to ensure that the receipt of payments due on the
underlying security is timely. Such protection may be provided through
guarantees, insurance policies or letters of credit obtained by the issuer or
sponsor from third parties, through various means of structuring the transaction
or through a combination of such approaches. The Fund will not pay any
additional fees for such credit support, although the existence of credit
support may increase the price of a security.
Each Fund may invest up to 15% of its
net assets in illiquid securities, which may include securities with contractual
restrictions on resale, securities exempt from registration under Rule 144A of
the Securities Act of 1933, as amended, and other securities which may not be
readily marketable. The relative illiquidity of these securities may impair each
Fund from disposing of them in a timely manner and at a fair price when it is
necessary or desirable to do so. While maintaining oversight, each Funds Board
has delegated to DMC the day-to-day functions of determining whether individual
securities are liquid for purposes of each Funds limitation on investments in
illiquid securities. Securities eligible for resale pursuant to Rule 144A, which
are determined to be liquid, are not subject to the Funds 15% limit on
investments in illiquid securities. As of March 31, 2013, no securities have
been determined to be illiquid under the Funds Liquidity Procedures. Rule 144A
securities have been identified on the statements of net assets.
10. Contractual
Obligations
The Funds enter into contracts in the
normal course of business that contain a variety of indemnifications. The Funds
maximum exposure under these arrangements is unknown. However, the Funds have
not had prior claims or losses pursuant to these contracts. Management has
reviewed each Funds existing contracts and expects the risk of loss to be
remote.
29
Notes to financial
statements
Delaware
Investments
®
Closed-End Municipal Bond Funds
11. National Municipal Income Fund
Investments in Municipal Securities Issued by Certain States
From time to time and consistent with its
investment policies, the National Municipal Income Fund may invest a
considerable portion of its assets in certain municipalities. As of the date of
this report, the National Municipal Income Fund has invested 11.70% and 18.02%
(each as a percentage of fixed income investments), respectively, in securities
issued by the State of California and the State of New York, respectively. These
investments could make the National Municipal Income Fund more sensitive to
economic conditions in those states.
On May 23, 2011, shareholders of the
National Municipal Fund and shareholders of the Delaware Investments Arizona
Municipal Income Fund, Inc. (Arizona Muni Fund) approved the acquisition of
substantially all of the assets of Arizona Muni Fund in exchange for newly
issued common shares of the National Municipal Fund, which was structured as a
tax-free transaction. This acquisition was completed after the close of business
on June 17, 2011. As of March 31, 2013, municipal bonds issued by the State of
Arizona constitute approximately 13% of the National Municipal Income Funds
portfolio. These investments could make the National Municipal Fund more
sensitive to economic conditions in Arizona than other more geographically
diversified national municipal income funds.
12. Subsequent
Events
Management has determined that no material
events or transactions occurred subsequent to March 31, 2013 that would require
recognition or disclosure in the Funds financial statements.
30
Report of independent
registered public
accounting firm
To the Board of Directors/Trustees and the
Shareholders of
Delaware Investments Colorado Municipal Income Fund,
Inc.,
Delaware Investments Minnesota Municipal Income Fund II, Inc.
and
Delaware Investments National Municipal Income Fund:
In our opinion, the accompanying
statements of net assets, statements of assets and liabilities, and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Delaware Investments Colorado Municipal Income Fund, Inc., Delaware Investments
Minnesota Municipal Income Fund II, Inc. and Delaware Investments National
Municipal Income Fund (hereafter referred to as the Funds) at March 31, 2013,
the results of each of their operations for the year then ended, the changes in
each of their net assets for each of the two years in the period then ended and
the financial highlights for each of the three years in the period then ended,
in conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as financial statements) are the responsibility of the Funds
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements 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 are free of material misstatement. An audit 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, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at March
31, 2013 by correspondence with the custodian, provide a reasonable basis for
our opinion. The financial highlights for each of the two years in the period
ended March 31, 2010 were audited by other independent accountants whose report
dated May 19, 2010 expressed an unqualified opinion on those statements.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
May 21,
2013
(continues)
31
Other Fund information
(Unaudited)
Delaware Investments
®
Closed-End
Municipal Bond Funds
Tax Information
(Unaudited)
The information set forth below is for
each Funds fiscal year as required by federal income tax laws. Shareholders,
however, must report distributions on a calendar year basis for income tax
purposes, which may include distributions for portions of two fiscal years of a
fund. Accordingly, the information needed by shareholders for income tax
purposes will be sent to them in January of each year. Please consult your tax
advisor for proper treatment of this information.
All designations are based on financial
information available as of the date of this annual report and, accordingly are
subject to change. For any and all items requiring designation, it is the
intention of each Fund to designate the maximum amount permitted under the
Internal Revenue Code and the regulations thereunder.
For the fiscal year ended March 31, 2013,
each Fund designates distributions paid during the year as follows:
|
|
(A)
|
|
(B)
|
|
(C)
|
|
|
|
|
Ordinary
|
|
Tax-Exempt
|
|
Long-Term
|
|
|
|
|
Income
|
|
Income
|
|
Capital Gain
|
|
Total
|
|
|
Distributions
|
|
Distributions
|
|
Distributions
|
|
Distributions
|
|
|
(Tax Basis)
|
|
(Tax Basis)
|
|
(Tax Basis)
|
|
(Tax Basis)
|
Colorado Municipal
Fund
|
|
0.27%
|
|
88.67%
|
|
|
11.06
|
%
|
|
|
100.00%
|
Minnesota Municipal Fund II
|
|
3.66%
|
|
95.12%
|
|
|
1.22
|
%
|
|
|
100.00%
|
National Municipal
Fund
|
|
0.14%
|
|
99.86%
|
|
|
|
|
|
100.00%
|
(A) (B) and (C) are based on a percentage
of each Funds total distributions.
32
Fund management
Joseph R. Baxter
Senior Vice President, Head of Municipal Bond
Department,
Senior Portfolio Manager
Joseph R. Baxter is the head of the
municipal bond department and is responsible for setting the departments
investment strategy. He is also a co-portfolio manager of the firms municipal
bond funds and several client accounts. Before joining Delaware Investments in
1999 as head municipal bond trader, he held investment positions with First
Union, most recently as a municipal portfolio manager with the Evergreen Funds.
Baxter received a bachelors degree in finance and marketing from La Salle
University.
Stephen J. Czepiel
Senior Vice President, Senior Portfolio Manager
Stephen J. Czepiel is a member of the
firms municipal fixed income portfolio management team with primary
responsibility for portfolio construction and strategic asset allocation. He is
a co-portfolio manager of the firms municipal bond funds and client accounts.
He joined Delaware Investments in July 2004 as a senior bond trader. Previously,
he was vice president at both Mesirow Financial and Loop Capital Markets. He
began his career in the securities industry in 1982 as a municipal bond trader
at Kidder Peabody and now has more than 20 years of experience in the municipal
securities industry. Czepiel earned his bachelors degree in finance and
economics from Duquesne University.
Denise A. Franchetti, CFA
Vice President, Portfolio Manager, Senior Research
Analyst
Denise A. Franchetti is a senior research
analyst for the municipal bond department. Currently, she is responsible for
following the airport, education, hotel, cogeneration, and cargo sectors for the
group. In 2003, she was also named as portfolio manager on the tax-exempt
closed-end funds in addition to her research duties. Prior to joining Delaware
Investments in 1997 as a municipal bond analyst, she was a fixed income trader
at Provident Mutual Life Insurance and an investment analyst at General Accident
Insurance. Franchetti received her bachelors degree and an MBA from La Salle
University. She is a member of the Financial Analysts of
Philadelphia.
Gregory A. Gizzi
Senior Vice President, Senior Portfolio Manager
Gregory A. Gizzi is a member of the firms
municipal fixed income portfolio management team. He is also a co-portfolio
manager of the firms municipal bond funds and several client accounts. Before
joining Delaware Investments in January 2008 as head of municipal bond trading,
he spent six years as a vice president at Lehman Brothers for the firms
tax-exempt institutional sales effort. Prior to that, he spent two years trading
corporate bonds for UBS before joining Lehman Brothers in a sales capacity.
Gizzi has more than 20 years of trading experience in the municipal securities
industry, beginning at Kidder Peabody in 1984, where he started as a municipal
bond trader and worked his way up to institutional block trading desk manager.
He later worked in the same capacity at Dillon Read. Gizzi earned his bachelors
degree in economics from Harvard University.
(continues)
33
Board of trustees/directors
and
officers addendum
Delaware Investments
®
Family of
Funds
A mutual fund is governed by a Board of
Trustees/Directors (Trustees), which has oversight responsibility for the
management of a funds business affairs. Trustees establish procedures and
oversee and review the performance of the investment manager, the distributor,
and others who perform services for the fund. The independent fund trustees, in
particular, are advocates for shareholder interests. Each trustee has served in
that capacity since he or she was elected to or appointed to the Board of
Trustees, and will continue to serve until his or her retirement or the election
of a new trustee in his or her place. The following is a list of the Trustees
and Officers with certain background and related information.
|
|
|
|
Number of
|
|
|
|
|
|
Portfolios in Fund
|
Other
|
Name,
|
|
|
|
Complex Overseen
|
Directorships
|
Address,
|
Position(s)
|
Length of
|
Principal
Occupation(s)
|
by Trustee
|
Held by
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
During Past 5 Years
|
or Officer
|
Trustee or Officer
|
Interested Trustee
|
|
|
|
|
|
Patrick P.
Coyne
1
|
Chairman,
|
Chairman and Trustee
|
Patrick P. Coyne has served
in
|
70
|
Director and Audit
|
2005 Market Street
|
President,
|
since August 16, 2006
|
various executive
capacities
|
|
Committee Member
|
Philadelphia, PA
|
Chief Executive
|
|
at different times at
|
|
Kaydon Corp.
|
19103
|
Officer, and
|
|
Delaware
Investments.
2
|
|
|
|
Trustee
|
|
|
|
|
April 1963
|
|
President and
|
|
|
Board of Governors
|
|
|
Chief Executive
Officer
|
|
|
Member
|
|
|
since August 1, 2006
|
|
|
Investment Company
|
|
|
|
|
|
Institute (ICI)
|
|
Independent Trustees
|
|
|
|
|
|
Thomas L. Bennett
|
Trustee
|
Since
|
Private Investor
|
70
|
Director
|
2005 Market Street
|
|
March 2005
|
(March 2004Present)
|
|
Bryn Mawr
|
Philadelphia, PA
|
|
|
|
|
Bank Corp. (BMTC)
|
19103
|
|
|
|
|
(20072011)
|
|
October 1947
|
|
|
|
|
|
|
Joseph W. Chow
|
Trustee
|
Since
|
Executive Vice
President
|
70
|
Director and Audit
Committee
|
2005 Market Street
|
|
January 2013
|
(Emerging Economies
|
|
Member Hercules
|
Philadelphia, PA
|
|
|
Strategies, Risk and
|
|
Technology Growth
|
19103
|
|
|
Corporate
Administration)
|
|
Capital, Inc.
|
|
|
|
State Street
Corporation
|
|
|
January 1953
|
|
|
(July 2004March 2011)
|
|
|
|
John A. Fry
|
Trustee
|
Since
|
President
|
70
|
Board of
|
2005 Market Street
|
|
January 2001
|
Drexel University
|
|
Governors Member
|
Philadelphia, PA
|
|
|
(August 2010Present)
|
|
NASDAQ OMX
|
19103
|
|
|
|
|
PHLX LLC
|
|
|
|
President
|
|
|
May 1960
|
|
|
Franklin & Marshall
College
|
|
Director and Audit
|
|
|
|
(July 2002July 2010)
|
|
Committee Member
|
|
|
|
|
|
Community Health
|
|
|
|
|
|
Systems
|
|
|
|
|
|
Director Ecore
|
|
|
|
|
|
International
|
|
|
|
|
|
(20092010)
|
|
Anthony D. Knerr
|
Trustee
|
Since
|
Managing Director
|
70
|
None
|
2005 Market Street
|
|
April 1990
|
Anthony Knerr &
Associates
|
|
|
Philadelphia, PA
|
|
|
(Strategic Consulting)
|
|
|
19103
|
|
|
(1990Present)
|
|
|
|
December 1938
|
|
|
|
|
|
|
|
|
|
|
|
34
|
|
|
|
Number of
|
|
|
|
|
|
Portfolios in Fund
|
Other
|
Name,
|
|
|
|
Complex Overseen
|
Directorships
|
Address,
|
Position(s)
|
Length of
|
Principal
Occupation(s)
|
by Trustee
|
Held by
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
During Past 5 Years
|
or Officer
|
Trustee or Officer
|
Independent Trustees (continued)
|
|
|
|
|
Lucinda S. Landreth
|
Trustee
|
Since
|
Private Investor
|
70
|
None
|
2005 Market Street
|
|
March 2005
|
(2004Present)
|
|
|
Philadelphia, PA
|
|
|
|
|
|
19103
|
|
|
|
|
|
|
June 1947
|
|
|
|
|
|
|
Frances A.
Sevilla-Sacasa
|
Trustee
|
Since
|
Chief Executive Officer
|
70
|
Trust Manager and
|
2005 Market Street
|
|
September 2011
|
Banco Itaú Europa
|
|
Audit Committee
|
Philadelphia, PA
|
|
|
International
|
|
Member Camden
|
19103
|
|
|
(April 2012Present)
|
|
Property Trust
|
|
January 1956
|
|
|
Executive Advisor to
Dean
|
|
|
|
|
|
(August 2011March 2012)
and
|
|
|
|
|
|
Interim Dean
|
|
|
|
|
|
(January 2011July 2011)
|
|
|
|
|
|
University of Miami School
of
|
|
|
|
|
|
Business
Administration
|
|
|
|
|
|
President U.S.
Trust,
|
|
|
|
|
|
Bank of America
Private
|
|
|
|
|
|
Wealth Management
|
|
|
|
|
|
(Private Banking)
|
|
|
|
|
|
(July 2007December
2008)
|
|
|
|
Thomas K. Whitford
|
Trustee
|
Since
|
Vice Chairman
|
70
|
None
|
2005 Market Street
|
|
January 2013
|
(2010April 2013)
|
|
|
Philadelphia, PA
|
|
|
Chief Administrative
|
|
|
19103
|
|
|
Officer (20082010)
|
|
|
|
|
|
and Executive Vice
|
|
|
March 1956
|
|
|
President and Chief
|
|
|
|
|
|
Administrative Officer
|
|
|
|
|
|
(20072009)
|
|
|
|
|
|
PNC Financial
|
|
|
|
|
|
Services Group
|
|
|
|
Janet L. Yeomans
|
Trustee
|
Since
|
Vice President and
Treasurer
|
70
|
Director, Audit
|
2005 Market Street
|
|
April 1999
|
(January 2006July
2012)
|
|
Committee Member
and
|
Philadelphia, PA
|
|
|
Vice President Mergers
&
|
|
Investment
Committee
|
19103
|
|
|
Acquisitions
|
|
Member
|
|
|
|
(January 2003January
2006),
|
|
Okabena Company
|
July 1948
|
|
|
and Vice President
|
|
|
|
|
|
and Treasurer
|
|
Chair 3M
Investment
|
|
|
|
(July 1995January
2003)
|
|
Management Company
|
|
|
|
3M Corporation
|
|
(20052012)
|
|
J. Richard Zecher
|
Trustee
|
Since
|
Founder
|
70
|
Director and
|
2005 Market Street
|
|
March 2005
|
Investor Analytics
|
|
Compensation
|
Philadelphia, PA
|
|
|
(Risk Management)
|
|
Committee Member
|
19103
|
|
|
(May 1999Present)
|
|
Investor Analytics
|
|
July 1940
|
|
|
Founder
|
|
Director P/E
Investments
|
|
|
|
P/E Investments
|
|
|
|
|
|
(Hedge Fund)
|
|
|
|
|
|
(September
1996Present)
|
|
|
|
|
|
|
|
|
(continues)
35
|
|
|
|
Number of
|
|
|
|
|
|
Portfolios in Fund
|
Other
|
Name,
|
|
|
|
Complex Overseen
|
Directorships
|
Address,
|
Position(s)
|
Length of
|
Principal
Occupation(s)
|
by Trustee
|
Held by
|
and Birth Date
|
Held with Fund(s)
|
Time Served
|
During Past 5 Years
|
or Officer
|
Trustee or Officer
|
Officers
|
|
|
|
|
|
David F. Connor
|
Vice President,
|
Vice President since
|
David F. Connor has served
as
|
70
|
None
3
|
2005 Market Street
|
Deputy General
|
September 2000
|
Vice President and
Deputy
|
|
|
Philadelphia, PA
|
Counsel, and Secretary
|
and Secretary
|
General Counsel of
|
|
|
19103
|
|
since
|
Delaware Investments
|
|
|
|
|
October 2005
|
since 2000.
|
|
|
December 1963
|
|
|
|
|
|
|
Daniel V. Geatens
|
Vice President
|
Treasurer
|
Daniel V. Geatens has
served
|
70
|
None
3
|
2005 Market Street
|
and Treasurer
|
since
|
in various capacities
at
|
|
|
Philadelphia, PA
|
|
October 2007
|
different times at
|
|
|
19103
|
|
|
Delaware Investments.
|
|
|
|
October 1972
|
|
|
|
|
|
|
David P. OConnor
|
Executive Vice
|
Executive
|
David P. OConnor has served
in
|
70
|
None
3
|
2005 Market Street
|
President,
|
Vice President
|
various executive and
legal
|
|
|
Philadelphia, PA
|
General Counsel
|
since February 2012;
|
capacities at different
times
|
|
|
19103
|
and Chief
|
Senior Vice President
|
at Delaware
Investments.
|
|
|
|
Legal Officer
|
October 2005
|
|
|
|
February 1966
|
|
February 2012;
|
|
|
|
|
|
General Counsel and
|
|
|
|
|
|
Chief Legal Officer
|
|
|
|
|
|
since
|
|
|
|
|
|
October 2005
|
|
|
|
|
Richard Salus
|
Senior
|
Chief Financial
|
Richard Salus has served
in
|
70
|
None
3
|
2005 Market Street
|
Vice President
|
Officer since
|
various executive
capacities
|
|
|
Philadelphia, PA
|
and
|
November 2006
|
at different times at
|
|
|
19103
|
Chief Financial
|
|
Delaware Investments.
|
|
|
|
Officer
|
|
|
|
|
October 1963
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Patrick P. Coyne is considered to be an Interested Trustee because he is
an executive officer of the Funds(s) investment advisor.
2
Delaware Investments is the marketing name for Delaware Management
Holdings, Inc. and its subsidiaries, including the Funds(s) investment
advisor, principal underwriter, and its transfer agent.
3
David F. Connor, Daniel V. Geatens, David P. OConnor, and Richard Salus
serve in similar capacities for the six portfolios of the Optimum Fund Trust,
which have the same investment advisor, principal underwriter, and transfer
agent as the registrant.
36
About the organization
This annual report is for the information
of Delaware Investments Closed-End Municipal Bond Funds shareholders. Notice is
hereby given in accordance with Section 23(c) of the Investment Company Act of
1940 that the Funds may, from time to time, purchase shares of their common
stock on the open market at market prices.
Board of
directors/trustees
Patrick P.
Coyne
Chairman,
President,
and Chief Executive Officer
Delaware Investments
®
Family of Funds
Philadelphia, PA
Thomas L.
Bennett
Private
Investor
Rosemont, PA
Joseph W.
Chow
Former Executive Vice
President
State Street Corporation
Brookline, MA
John A.
Fry
President
Drexel
University
Philadelphia, PA
Anthony D. Knerr
Founder and Managing
Director
Anthony Knerr & Associates
New York, NY
Lucinda S.
Landreth
Former Chief
Investment Officer
Assurant, Inc.
Philadelphia, PA
Frances A.
Sevilla-Sacasa
Chief Executive
Officer
Banco Itaú Europa
International
Miami, FL
Thomas K.
Whitford
Former Vice
Chairman
PNC Financial Services Group
Pittsburgh, PA
Janet L.
Yeomans
Former Vice President
and Treasurer
3M Corporation
St. Paul, MN
J. Richard
Zecher
Founder
Investor Analytics
Scottsdale, AZ
Your reinvestment
options
Each of the Funds
offers an automatic dividend reinvestment program. If you would like to reinvest
dividends, and shares are registered in your name, contact Computershare
Shareowner Services LLC at 866 437-0252. You will be asked to put your request
in writing. If you have shares registered in street name, contact the
broker/dealer holding the shares or your financial advisor.
Affiliated
officers
David F.
Connor
Vice President, Deputy
General Counsel,
and Secretary
Delaware Investments Family of
Funds
Philadelphia, PA
Daniel V.
Geatens
Vice President and
Treasurer
Delaware Investments
Family of Funds
Philadelphia, PA
David P.
OConnor
Executive Vice
President, General
Counsel and Chief Legal Officer
Delaware Investments
Family of Funds
Philadelphia, PA
Richard
Salus
Senior Vice President
and
Chief Financial Officer
Delaware Investments Family of Funds
Philadelphia, PA
Each Fund files its complete
schedule of portfolio holdings with the Securities and Exchange
Commission
(SEC) for the first and third quarters of each fiscal year on Form N-Q. Each
Funds Forms N-Q, as well as a description of the policies and procedures that
each Fund uses to determine how to vote proxies (if any) relating to portfolio
securities are available without charge (i) upon request, by calling 866
437-0252; and (ii) on the SECs website at sec.gov. In addition, a description
of the policies and procedures that the Fund uses to determine how to vote
proxies (if any) relating to portfolio securities and each Funds Schedule of
Investments are available without charge on the Funds website at
delawareinvestments.com. Each Funds Forms N-Q may be reviewed and copied at the
SECs Public Reference Room in Washington, D.C.; information on the operation of
the Public Reference Room may be obtained by calling 800
SEC-0330.
Information (if any) regarding how each Fund voted proxies
relating to portfolio securities during the most recently disclosed 12-month
period ended June 30 is available without charge (i) through the Funds website
at delawareinvestments.com; and (ii) on the SECs website at
sec.gov.
Investment manager
Delaware Management Company,
a series of Delaware
Management
Business Trust
Philadelphia, PA
Principal office of the
Funds
2005 Market
Street
Philadelphia, PA
19103-7057
Independent registered
public
accounting firm
PricewaterhouseCoopers LLP
2001 Market Street
Philadelphia, PA
19103
Registrar and stock
transfer agent
Computershare
Shareowner Services LLC
480 Washington Blvd.
Jersey City, NJ 07310
866 437-0252
For securities
dealers
and financial institutions
representatives
800 362-7500
Website
delawareinvestments.com
Delaware Investments is the
marketing
name of Delaware Management Holdings,
Inc. and its
subsidiaries.
Number of recordholders as
of
March 31, 2013
Colorado
Municipal
|
|
|
Income Fund
|
|
84
|
Minnesota Municipal
Income
|
|
|
Fund II
|
|
442
|
National
Municipal Income Fund
|
|
106
|
37