UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-05597
Morgan Stanley Municipal Income Opportunities Trust
(Exact name of registrant as specified in charter)
522 Fifth Avenue, New York, New York 10036
(Address of principal executive offices) (Zip code)
Ronald E. Robison
522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-296-6990
Date of fiscal year end: May 31, 2008
Date of reporting period: August 31, 2007
ITEM 1. SCHEDULE OF INVESTMENTS.
The Fund's schedule of investments as of the close of the reporting period
prepared pursuant to Rule 12-12 of Regulation S-X is as follows:
MORGAN STANLEY MUNICIPAL INCOME OPPORTUNITIES TRUST
PORTFOLIO OF INVESTMENTS AUGUST 31, 2007 (UNAUDITED)
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
--------- ------ -------- ------------
TAX-EXEMPT MUNICIPAL BONDS (104.5%)
ALABAMA (0.6%)
$ 1,000 Colbert County - Northwest Health Care Authority, Alabama,
Helen Keller Hospital, Ser 2003 5.75% 06/01/27 $ 985,400
------------
ALASKA (0.6%)
1,000 Northern Tobacco Securitization Corporation, Alaska,
Asset Backed, Ser 2006 A 5.00 06/01/46 854,720
------------
CALIFORNIA (7.7%)
1,955 California County Tobacco Securitization Agency, Gold
County Settlement Funding Corp, Ser 2006 0.00 06/01/33 360,463
500 California Housing Finance Agency, RITES PA 1417 Ser 2006
(AMT) 4.117## 08/01/31 370,450
500 California Housing Finance Agency, RITES PA 1417 Ser 2006
(AMT) 4.317## 08/01/36 359,030
2,000 California Statewide Community, Baptist University, Ser
2007 A 5.50 11/01/38 1,943,240
4,000 Golden State Tobacco Securitization Corporation,
California, Enhanced Asset Backed, Ser 2007 A-1 @@ 5.125 06/01/47 3,545,099
2,000 Sacramento Financing Authority, California, Convention
Center Hotel, Ser 1999 A 6.25 01/01/30 2,005,440
1,000 San Diego County, California, San Diego Natural History
Museum COPs 5.70 02/01/28 967,070
1,000 San Marcos Community Facilities District # 2002-01,
California, University Commons, Ser 2004 5.95 09/01/35 1,018,780
1,000 Santa Ana, Unified School District Community Facilities,
District # 2004-1, California, Central Park, Ser 2005 5.10 09/01/35 938,450
13,000 Silicon Valley Tobacco Securitization Authority,
California, Santa Clara Tobacco Securitization Corp,
Ser 2007 0.00 06/01/56 378,950
------------
11,886,972
------------
COLORADO (4.1%)
1,000 Colorado Health Facilities Authority, Christian Living
Communities, Ser 2006 5.75 01/01/37 951,720
45 Colorado Housing & Finance Authority, Ser 1996 Ser B-1
(AMT) 7.65 11/01/26 45,711
395 Colorado Housing & Finance Authority, Ser 1998 Ser D-2
(AMT) 6.35 11/01/29 410,966
1,000 Copperleaf Metropolitan District # 2, Colorado, Ser 2006 5.95 12/01/36 936,330
2,000 Elk Valley Public Improvement Corporation, Colorado, Ser
2001 A 7.35 09/01/31 2,079,600
2,000 Northwest Metropolitan District #3, Colorado, Ser 2005 6.25 12/01/35 1,954,400
------------
6,378,727
------------
CONNECTICUT (1.8%)
2,000 Georgetown Special Taxing District, Connecticut, Ser
2006 A 5.125 10/01/36 1,789,420
1,000 Mashantucket (Western) Pequot Tribe, Connecticut, Special
Ser 1997 B ** 5.75 09/01/27 1,003,830
------------
2,793,250
------------
DISTRICT OF COLUMBIA (0.2%)
260 Metropolitan Washington Airports Authority, District of
Columbia & Virginia, CaterAir International Corp, Ser
1991 (AMT) ++ 10.125 09/01/11 260,322
------------
FLORIDA (13.7%)
500 Alachua County Florida Industrial Development Revenue,
North Florida, Retirement Village, Ser 2007 5.25 11/15/17 483,850
800 Alachua County Florida Industrial Development Revenue,
North Florida, Retirement Village, Ser 2007 5.875 11/15/36 802,656
2,000 Beacon Lakes, Community Development District, Florida, Ser
2003 A 6.90 05/01/35 2,070,320
960 Bellalago Educational Facilities Benefits District,
Florida, Bellalago Charter School, Ser 2004 B 5.80 05/01/34 937,642
3,550 Escambia County, Florida, Pensacola Care Development
Centers, Ser 1989 10.25 07/01/11 3,590,292
820 Escambia County, Florida, Pensacola Care Development
Centers, Ser 1989 A 10.25 07/01/11 829,307
1,000 Fiddlers Creek Community Development District # 1,
Florida, Ser 2005 6.00 05/01/38 992,280
500 Fountainbleau Lakes Florida Community Development
District, Ser 2007 B 6.00 05/01/15 501,015
750 Grand Bay at Doral Community Development District,
Florida, Ser 2007 A 6.00 05/01/39 696,532
1,000 Lee County Florida Industrial Development Authority,
Florida, Lee Charter Foundation, Ser 2007 A 5.375 06/15/37 909,150
1,415 Mid-Bay Bridge Authority, Florida, Sr Lien Crossover Refg,
Ser 1993 A (Ambac) 5.85 10/01/13 1,476,836
1,000 Midtown Miami Community Development District, Florida,
Parking Garage, Ser 2004 A 6.25 05/01/37 999,220
500 Orange County Health Facilities Authority, Florida,
Orlando Lutheran Towers Inc, Ser 2005 * 5.70 07/01/26 492,020
2,000 Orange County Health Facilities Authority, Florida,
Orlando Lutheran Towers Inc, Ser 2007 5.50 07/01/32 1,898,720
1,000 Orange County Health Facilities Authority, Florida,
Westminster Community Care Services Inc, Ser 1999 6.75 04/01/34 1,027,210
1,000 Pinellas County Health Facilities Authority, Florida,
Oaks of Clearwater, Ser 2004 6.25 06/01/34 1,027,150
980 Renaissance Commons Community Development District,
Florida, Ser 2005 A 5.60 05/01/36 927,090
500 Split Pine Community Development District, Florida, Ser
2007 A 5.25 05/01/39 431,045
1,000 St Johns County Industrial Development Authority, Florida,
Glenmoor Ser 1999 A 8.00 01/01/10+ 1,110,820
------------
21,203,155
------------
GEORGIA (1.2%)
2,000 Atlanta, Georgia, Eastside Ser 2005 B 5.60 01/01/30 1,896,680
------------
HAWAII (2.1%)
1,000 Hawaii Department of Budget & Finance, Kahala Nui, Ser
2003 A 8.00 11/15/33 1,126,070
2,000 Hawaii Department of Budget & Finance, Kuakini Health, Ser
2002 A 6.375 07/01/32 2,074,500
------------
3,200,570
------------
IDAHO (0.7%)
1,000 Idaho Health Facilities Authority Revenue, Idaho, Valley
Vista Care Corporation, Ser 2007 (WI) 6.125 11/15/27 1,012,750
------------
ILLINOIS (5.7%)
1,000 Bolingbrook, Illinois, Sales Tax, Ser 2005 0.00@ 01/01/24 997,530
2,000 Chicago, Illinois, Lake Shore East, Ser 2002 6.75 12/01/32 2,101,880
500 Hampshire, Illinois, Special Service Area #18, Ser 2007 A 6.00 03/01/44 489,495
1,000 Illinois Finance Authority, Landing at Plymouth, Ser
2005 A 6.00 05/15/37 994,400
1,000 Illinois Finance Authority, Luther Oaks, Ser 2006 A 6.00 08/15/39 992,230
1,650 Illinois Finance Authority, Montgomery Place, Ser 2006 A 5.75 05/15/38 1,583,802
725 Lincolnshire, Illinois, Service Area #1-Sedgebrook, Ser
2004 6.25 03/01/34 743,792
1,000 Yorkville, Illinois, Cannonball/Beecher Road, Ser 2007 5.75 03/01/28 939,910
------------
8,843,039
------------
INDIANA (0.7%)
1,000 Indiana Health Facility Financing Authority, Riverview
Hospital, Ser 2002 6.125 08/01/31 1,037,270
------------
IOWA (0.9%)
1,000 Iowa Finance Authority, Bethany Life Communities Refg, Ser
2006 A 5.55 11/01/41 927,780
525 Washington County Hospital, Iowa, Ser 2006 5.375 07/01/26 502,199
------------
1,429,979
------------
KANSAS (1.1%)
1,500 Lenexa, Kansas, Lakeview Village - Southridge, Ser 2002 C 6.875 05/15/32 1,706,715
------------
MARYLAND (2.2%)
500 Maryland Health & Higher Educational Facilities Authority,
Edenwald, Ser 2006 A 5.40 01/01/31 487,340
750 Maryland Health & Higher Educational Facilities Authority,
King Farm Presbyterian Community, Ser 2007 A 5.30 01/01/37 687,030
800 Maryland Health & Higher Educational Facilities Authority,
Washington Christian Academy, Ser 2006 5.50 07/01/38 766,200
500 Maryland Industrial Development Financing Authority, Our
Lady of Good Counsel High School, Ser 2005 A 6.00 05/01/35 509,010
1,000 Maryland State Economic Development Corporation,
Chesapeake Bay Conference Center, Ser 2006 A 5.00 12/01/31 885,190
------------
3,334,770
------------
MASSACHUSETTS (2.7%)
1,500 Massachusetts Development Finance Agency,
Loomis Communities, Ser 1999 A 5.75 07/01/23 1,506,255
1,675 Massachusetts Development Finance Agency,
New England Center for Children, Ser 1998 5.875 11/01/18 1,688,969
1,000 Massachusetts Health & Educational Facilities Authority,
The Learning Center for Deaf Children, Ser 1999 C 6.125 07/01/29 1,015,040
------------
4,210,264
------------
MICHIGAN (1.7%)
600 Gaylord Hospital Financing Authority, Michigan, Otsego
Memorial Hospital, Ser 2004 6.50 01/01/37 617,490
2,000 Michigan Tob Settlement Financial Authority, Ser 2007 A 6.00 06/01/48 2,009,300
------------
2,626,790
------------
MINNESOTA (1.5%)
750 North Oaks Minnesota SR Housing Revenue, Presbyterian
Homes, North Oaks, Ser 2007 (WI) 6.125 10/01/39 748,905
1,500 St Paul Housing & Redevelopment Authority, Minnesota,
HealthEast, Ser 2005 6.00 11/15/35 1,535,430
------------
2,284,335
------------
MISSOURI (6.1%)
750 Branson Hills Community Improvement District, Missouri,
Ser 2007 A 5.50 04/01/27 709,988
2,000 Des Peres, Missouri, West County Center, Ser 2002 5.75 04/15/20 2,009,100
3,850 Fenton, Missouri, Gravois Bluffs Redevelopment, Ser 2001 A 7.00 10/01/11+ 4,358,046
1,500 Kansas City Industrial Development Agency, Missouri,
Bishop Spencer, Ser 2004 A 6.50 01/01/35 1,539,795
750 St Louis County Industrial Development Authority,
Missouri, Pediatric Rehabilitation Center, Ser 2007 A
(WI) 6.375 12/01/41 749,903
------------
9,366,832
------------
NEVADA (2.0%)
1,965 Las Vegas District # 808, Nevada, Summerlin Ser 2001 6.75 06/01/21 2,035,779
1,000 Nevada Department of Business & Industry, Las Vegas
Monorail 2nd Tier Ser 2000 7.375 01/01/40 1,005,980
------------
3,041,759
------------
NEW HAMPSHIRE (4.8%)
1,500 New Hampshire Higher Educational & Health Facilities
Authority, Littleton Hospital Assn Ser 1998 A 6.00 05/01/28 1,508,460
12,800 New Hampshire Housing Finance Authority, Residential Ser
1983 B 0.00 01/01/15 5,999,360
------------
7,507,820
------------
NEW JERSEY (5.7%)
1,000 New Jersey Economic Development Authority, Cedar Crest
Village Inc, Ser 2001 A 7.25 11/15/11+ 1,140,340
1,000 New Jersey Economic Development Authority, Franciscan
Oaks, Ser 1997 5.70 10/01/17 1,013,750
730 New Jersey Economic Development Authority, Lions Gate,
Ser 2005 A 5.875 01/01/37 715,831
700 New Jersey Economic Development Authority, Seashore
Gardens Living Center, Ser 2006 5.375 11/01/36 630,721
1,000 New Jersey Economic Development Authority, The
Presbyterian Home at Montgomery, Ser 2001 A 6.375 11/01/31 1,020,120
2,000 New Jersey Economic Development Authority, United
Methodist Homes of New Jersey, Ser 1998 5.125 07/01/25 1,877,460
2,000 New Jersey Health Care Facilities Financing Authority,
Raritan Bay Medical Center, Ser 1994 7.25 07/01/27 2,039,260
4,000 Tobacco Settlement Financing Corporation, New Jersey,
Ser 2007-1B 0.00 06/01/41 436,160
------------
8,873,642
------------
NEW YORK (7.4%)
3,000 Brookhaven Industrial Development Agency, New York,
Woodcrest Estates, Ser 1998 A (AMT) 6.375 12/01/37 3,049,200
415 Mount Vernon Industrial Development Agency, New York,
Meadowview at the Wartburg, Ser 1999 6.00 06/01/09 418,067
2,000 New York City Industrial Development Agency, New York,
7 World Trade Center LLC, Ser 2005 A 6.50 03/01/35 2,090,380
2,000 New York City Industrial Development Agency, New York,
American Airlines Inc, Ser 2005 (AMT) 7.75 08/01/31 2,297,760
1,000 New York Liberty Development Corporation, National Sports
Museum, Ser 2006 A 6.125 02/15/19 1,014,180
1,500 Suffolk County Industrial Development Agency, New York,
Medford Hamlet, Ser 2006 6.375 01/01/39 1,480,410
1,000 Westchester County Industrial Development Agency, New
York, Guiding Eyes for The Blind Inc, Ser 2004 5.375 08/01/24 1,018,740
------------
11,368,737
------------
NORTH CAROLINA (0.6%)
1,000 North Carolina Medical Care Commission, Presbyterian
Homes, Ser 2006 5.50 10/01/31 961,900
------------
NORTH DAKOTA (0.9%)
1,500 Grand Forks, North Dakota, 4000 Valley Square, Ser 2006 5.30 12/01/34 1,355,160
------------
OHIO (0.1%)
200 Zanesville-Muskingum County Port Authority, Ohio, Anchor
Glass Container Corp, Ser 1989 B (AMT) 10.25 12/01/08 200,510
------------
PENNSYLVANIA (13.3%)
4,000 Allegheny County Hospital Development Authority,
Pennsylvania, West Penn Allegheny Health, Ser 2007 A @@ 5.375 11/15/40 3,741,000
1,500 Bucks County Industrial Development Authority,
Pennsylvania, Ann's Choice, Ser 2005 A 6.125 01/01/25 1,523,805
2,120 Carbon County Industrial Development Authority,
Pennsylvania, Panther Creek Partners Refg, Ser 2000
(AMT) 6.65 05/01/10 2,199,712
1,000 Chester County Health & Education Facilities Authority,
Pennsylvania, Jenner's Pond Inc, Ser 2002 7.625 07/01/12+ 1,180,140
500 Fulton County Industrial Development Authority,
Pennsylvania, Fulton County Medical Center, Ser 2006 5.875 07/01/31 495,210
1,000 Harrisburg Authority, Pennsylvania, Harrisburg University
of Science & Technology, Ser 2007 B 6.00 09/01/36 999,320
1,000 Montgomery County Industry Development Authority,
Pennsylvania, Whitemarsh Community, Ser 2005 6.25 02/01/35 1,010,850
1,000 Pennsylvania Economic Development Financing Authority,
Reliant Energy Inc, Ser 2001 A (AMT) 6.75 12/01/36 1,087,050
3,520 Pennsylvania Housing Finance Agency, Ser 2006-96 A
(AMT) @@ 4.65 10/01/31 3,235,522
4,480 Pennsylvania Housing Finance Agency, Ser 2006-96 A
(AMT) @@ 4.70 10/01/37 4,117,938
1,000 Washington County, Pennsylvania, Victory Centre/Tanger
Outlet, Redevelopment Authority, Ser 2006 A 5.45 07/01/35 974,080
------------
20,564,627
------------
SOUTH CAROLINA (1.0%)
1,000 Myrtle Beach, South Carolina, Air Force Base
Redevelopment, Ser 2006 A 5.30 11/01/35 894,900
750 South Carolina Jobs-Economic Development Authority,
Wesley Commons, Ser 2006 5.30 10/01/36 659,977
------------
1,554,877
------------
TENNESSEE (2.3%)
2,000 Chattanooga Health Educational & Housing Facilities Board,
Tennessee, Student Housing Refg, Ser 2005 A 5.00 10/01/25 1,885,160
500 Shelby County Health, Educational & Housing Facilities
Board, Tennessee, Trezevant Manor, Ser 2006 A 5.75 09/01/37 481,090
750 Shelby County Health, Educational & Housing Facilities
Board, Tennessee, Village at Germantown, Ser 2003 A 7.25 12/01/34 751,890
500 Shelby County Health, Educational & Housing Facilities
Board, Tennessee, Village at Germantown, Ser 2006 6.25 12/01/34 428,570
------------
3,546,710
------------
TEXAS (6.2%)
2,000 Austin Convention Enterprises Inc, Texas, Convention
Center Hotel, Ser 2000 A 6.70 01/01/11+ 2,184,760
2,000 Austin Convention Enterprises Inc, Texas, Convention
Center Hotel, Ser 2006 B 5.75 01/01/34 1,914,940
1,000 Brazos River Authority, Texas, Texas Utilities Electric
Co Refg, Ser 1999 A (AMT) 7.70 04/01/33 1,095,170
1,000 Decatur Hospital Authority, Texas, Wise Regional Health,
Ser 2004 A 7.125 09/01/34 1,070,610
1,250 HFDC Central Texas Inc, Legacy at Willow Bend, Ser 2006 A 5.75 11/01/36 1,158,625
1,000 Houston Health Facilities Authority, Texas, Buckingham
Senior Living Community, Ser 2004 A 7.125 02/15/34 1,185,540
1,000 Lubbock, Health Facilities Development Corporation, Texas,
Carillon Senior Lifecare, Ser 2005 A 6.50 07/01/26 1,020,630
------------
9,630,275
------------
VERMONT (1.4%)
2,100 Vermont Economic Development Authority, Wake Robin Corp,
Ser 1999 A 6.75 03/01/09+ 2,221,527
------------
VIRGINIA (2.9%)
1,000 Chesterfield County Industrial Development Authority,
Virginia, Virginia Electric & Power Co Ser 1985 5.50 10/01/09 1,011,010
2,000 Peninsula Ports Authority of Virginia, Virginia Baptist
Homes Ser 2006 C 5.40 12/01/33 1,837,480
700 Peninsula Town Center Community Development Authority,
Ser 2007 (WI) 6.45 09/01/37 702,814
1,000 Virginia Beach Development Authority, Virginia,
Westminster-Canterbury Refg, Ser 2005 A 5.25 11/01/26 943,960
------------
4,495,264
------------
WASHINGTON (0.6%)
1,000 Washington Housing Finance Commission, Skyline at First
Hill Ser 2007 A 5.625 01/01/38 960,610
------------
TOTAL TAX-EXEMPT MUNICIPAL BONDS
(Cost $162,106,371) 161,595,958
------------
NUMBER
OF SHARES
(000)
---------
SHORT-TERM INVESTMENT (3.7%)
INVESTMENT COMPANY (a)
5,725 Morgan Stanley Institutional Liquidity Tax-Exempt
Portfolio - Institutional Class
(Cost $5,725,151) 5,725,151
------------
PRINCIPAL
AMOUNT IN
THOUSANDS
---------
FLOATING RATE NOTES RELATED TO SECURITIES HELD (- 7.5%)
(11,665) Notes with interest rates ranging from 3.99% to 4.05% at
August 31, 2007 and contractual maturities of
collateral ranging from 10/01/31 to 06/01/47 +++ (b)
(Cost ($11,665,000)) (11,665,000)
------------
TOTAL NET INVESTMENTS
(Cost $156,166,522) (c) (d) 100.7% 155,656,109
LIABILITIES IN EXCESS OF OTHER ASSETS (0.7) (1,012,189)
-------- ------------
NET ASSETS 100.0% $154,643,920
======== ============
----------
COPs Certificate of Participation.
AMT Alternative Minimum Tax.
RITES Residual Interest Tax-Exempt Security (illiquid security).
WI Security purchased on a when - issued basis.
+ Prerefunded to call date shown.
++ Joint exemption in locations shown.
+++ Floating rate note obligations related to securities held. The interest
rates shown reflect the rates in effect at August 31, 2007.
@ Security is a "step-up" bond where the coupon increases on a predetermined
future date
@@ Underlying security related to inverse floater entered into by the Fund.
## Current coupon rate for inverse floating rate municipal obligation. This
rate resets periodically as the auction rate on the related security
changes. Positions in inverse floating rate municipal obligations have a
total value of $729,480 which represents 0.5% of net assets.
* A portion of this security has been physically segregated in connection
with open futures contracts in the amount of $124,800.
** Resale is restricted to qualified institutional Investors.
(a) The Fund invests in Morgan Stanley Institutional Liquidity Tax-Exempt
Portfolio - Institutional Class, an open-end management investment company
managed by the Investment Adviser. Investment Advisory fees paid by the
Fund are reduced by an amount equal to the advisory and administrative
service fees paid by Morgan Stanley Institutional Liquidity Tax-Exempt
Portfolio - Institutional Class with respect to assets invested by the Fund
in Morgan Stanley Institutional Liquidity Tax-Exempt Portfolio -
Institutional Class. Income distributions earned by the Fund totaled
$27,420, for the period ended August 31, 2007.
(b) Floating Rate Note Obligations Related to Securities Held - The Fund enters
into transactions in which it transfers to Dealer Trusts ("Dealer Trusts"),
fixed rate bonds in exchange for cash and residual interests in the Dealer
Trusts' assets and cash flows, which are in the form of inverse floating
rate investments. The Dealer Trusts fund the purchases of the fixed rate
bonds by issuing floating rate notes to third parties and allowing the Fund
to retain residual interest in the bonds. The Fund enters into shortfall
agreements with the Dealer Trusts which commit the Fund to pay the Dealer
Trusts, in certain circumstances, the difference between the liquidation
value of the fixed rate bonds held by the Dealer Trusts and the liquidation
value of the floating rate notes held by third parties, as well as any
shortfalls in interest cash flows. The residual interests held by the Fund
(inverse floating rate investments) include the right of the Fund (1) to
cause the holders of the floating rate notes to tender their notes at par
at the next interest rate reset date, and (2) to transfer the municipal
bond from the Dealer Trusts to the Fund, thereby collapsing the Dealer
Trusts. The Fund accounts for the transfer of bonds to the Dealer Trusts as
secured borrowings, with the securities transferred remaining in the Fund's
investment assets, and the related floating rate notes reflected as Fund
liabilities. The notes issued by the Dealer Trusts have interest rates that
reset weekly and the floating rate note holders have the option to tender
their notes to the Dealer Trusts for redemption at par at each reset date.
At August 31, 2007, Fund investments with a value of $14,639,559 are held
by the Dealer Trusts and serve as collateral for the $11,665,000 in
floating rate note obligations outstanding at that date. Contractual
maturities of the floating rate note obligations and interest rates in
effect at August 31, 2007 are presented in the "Portfolio of Investments".
(c) Securities have been designated as collateral in an amount equal to
$14,456,260 in connection with open futures and the purchase of when-issued
securities.
(d) The aggregate cost for federal income tax purposes approximates the
aggregate cost for book purposes. The aggregate gross unrealized
appreciation is $4,706,970 and the aggregate gross unrealized depreciation
is $5,217,383, resulting in net unrealized depreciation of $510,413.
Bond Insurance:
Ambac Ambac Assurance Corporation.
FUTURES CONTRACTS OPEN AT AUGUST 31, 2007:
NUMBER OF DESCRIPTION, DELIVERY UNDERLYING FACE UNREALIZED
CONTRACTS SHORT MONTH AND YEAR AMOUNT AT VALUE DEPRECIATION
--------- ----- ----------------------------- --------------- ------------
15 Short U.S. Treasury Bonds
20 Years September 2007 $(1,676,719) $ (27,229)
17 Short U.S. Treasury Bonds
20 Years September 2007 (1,900,281) (52,109)
20 Short U.S. Treasury Bonds
20 Years September 2007 (2,235,625) (73,180)
52 Short U.S. Treasury Bonds
20 Years September 2007 (5,812,625) (71,643)
----------
TOTAL UNREALIZED DEPRECIATION $(224,161)
==========
ITEM 2. CONTROLS AND PROCEDURES.
(a) The Fund's principal executive officer and principal financial officer have
concluded that the Fund's disclosure controls and procedures are sufficient to
provide reasonable assurance that information required to be disclosed by the
Fund in this Form N-Q was recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's ("SEC")
rules and forms, based upon such officers' evaluation of these controls and
procedures as of a date within 90 days of the filing date of the report. The
Fund's principal executive officer and principal financial officer have also
concluded that the Fund's disclosure controls and procedures designed to ensure
that information required to be disclosed by the Fund in this Form N-Q is
accumulated and communicated to the Fund's management, including its principal
executive officer and principal financial officer, as appropriate to allow
timely decisions regarding required disclosure were effective.
Management of the Fund has determined that as of and prior to November 30, 2006,
the Fund's fiscal quarter end period, the Fund had a deficiency in its internal
control over financial reporting related to the review, analysis and
determination of whether certain transfers of municipal securities qualified for
sale accounting under the provisions of Statement of Financial Accounting
Standards No. 140 "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities." Since November 30, 2006, and prior to the
issuance of the Fund's quarterly schedule of portfolio holdings, management has
revised its disclosure controls and procedures and its internal control over
financial reporting in order to improve the controls' effectiveness to ensure
that transactions in transfer of municipal securities are accounted for
properly.
Management notes that other investment companies investing in similar
investments over similar time periods had been accounting for such investments
in a similar manner as the Fund. Accordingly, other investment companies are
also concluding that there was a material weakness in their internal control
over financial reporting of such investments. There was no impact to the net
asset value of the Fund's shares or the Fund's total return for any period as a
result of the changes in financial reporting of such investments.
(b) There were no changes in the Fund's internal control over financial
reporting that occurred during the fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the Fund's internal control over
financial reporting. However, as discussed above, subsequent to November 30,
2006, the Fund's internal control over financial reporting was revised.
ITEM 3. EXHIBITS.
(a) A separate certification for each principal executive officer and principal
financial officer of the registrant are attached hereto.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Morgan Stanley Municipal Income Opportunities Trust
/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
October 18, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
October 18, 2007
/s/ Francis Smith
Francis Smith
Principal Financial Officer
October 18, 2007
3