UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-07660
Name of Fund: The Massachusetts Health & Education Tax-Exempt Trust (MHE)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, The
Massachusetts Health & Education Tax-Exempt Trust, 55 East 52nd Street, New York, NY
10055.
Registrants telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 08/31/2010
Date of reporting period: 05/31/2010
Item 1 Schedule of Investments
Schedule of Investments May 31, 2010 (Unaudited)
The Massachusetts Health & Education Tax-Exempt Trust (MHE)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
Massachusetts 144.4% | |||
Corporate 4.7% | |||
Massachusetts Development Finance | |||
Agency, RB, Ogden Haverhill Project, | |||
Series A, AMT, 6.70%, 12/01/14 | $ 410 $ | 414,453 | |
Massachusetts Health & Educational | |||
Facilities Authority, RB, Cape Cod | |||
Healthcare Obligor (AGC), 5.00%, | |||
11/15/31 | 1,000 | 1,002,970 | |
1,417,423 | |||
Education 86.6% | |||
Massachusetts Development Finance | |||
Agency, ERB, Belmont Hill School, | |||
5.00%, 9/01/11 (a) | 1,100 | 1,171,863 | |
Massachusetts Development Finance | |||
Agency, RB: | |||
Boston University, Series T-1 | |||
(AMBAC), 5.00%, 10/01/39 | 1,000 | 1,005,050 | |
College Issue, Series B (Syncora), | |||
5.25%, 7/01/33 | 860 | 872,186 | |
College of Pharmacy & Allied | |||
Health, Series D (AGC), 5.00%, | |||
7/01/27 | 500 | 522,340 | |
Educational Facilities, Academy of | |||
the Pacific Rim, Series A (ACA), | |||
5.13%, 6/01/31 | 1,000 | 761,100 | |
Smith College, 5.00%, 7/01/35 | 2,000 | 2,044,980 | |
WGBH Educational Foundation, | |||
Series A (AMBAC), 5.75%, 1/01/42 | 1,100 | 1,222,738 | |
Wheeler School Issue, 6.50%, | |||
12/01/29 | 540 | 542,452 | |
Massachusetts Development Finance | |||
Agency, Refunding RB: | |||
Boston University, Series P, 5.45%, | |||
5/15/59 | 1,500 | 1,582,395 | |
Clark University (Syncora), 5.13%, | |||
10/01/35 | 500 | 509,430 | |
Western New England, Series A, | |||
(AGC), 5.00%, 9/01/33 | 250 | 252,860 | |
Wheelock College, Series C, 5.25%, | |||
10/01/37 | 1,000 | 937,950 | |
Williston Northampton School | |||
Project (Syncora), 5.00%, 10/01/25 | 500 | 495,740 | |
Worcester Polytechnic Institute | |||
(NPFGC), 5.00%, 9/01/27 | 1,985 | 2,074,504 |
Par | |||
Municipal Bonds | (000) | Value | |
Massachusetts (continued) | |||
Education (concluded) | |||
Massachusetts Health & Educational | |||
Facilities Authority, RB: | |||
Harvard University, Series B, 5.00%, | |||
10/01/38 | $ 400 $ | 424,424 | |
Harvard University, Series FF, | |||
5.13%, 7/15/37 | 850 | 869,184 | |
Northeastern University, Series R, | |||
5.00%, 10/01/33 | 225 | 228,668 | |
Simmons College, Series F (FGIC), | |||
5.00%, 10/01/13 (a) | 1,000 | 1,127,600 | |
Springfield College, 5.63%, | |||
10/15/40 | 500 | 515,210 | |
Tufts University, 5.38%, 8/15/38 | 1,000 | 1,085,190 | |
University of Massachusetts, | |||
Series C (NPFGC), 5.13%, | |||
10/01/34 | 230 | 231,621 | |
Massachusetts Health & Educational | |||
Facilities Authority, Refunding RB: | |||
Berklee College of Music, Series A, | |||
5.00%, 10/01/37 | 1,000 | 1,006,650 | |
Boston College, Series N, 5.13%, | |||
6/01/37 | 1,000 | 1,047,340 | |
Harvard University, Series A, 5.50%, | |||
11/15/36 | 100 | 113,858 | |
Tufts University, Series M, 5.50%, | |||
2/15/27 | 1,000 | 1,196,440 | |
Wellesley College, 5.00%, 7/01/33 | 1,500 | 1,543,155 | |
Massachusetts Health & Educational | |||
Facilities Authority, Wheaton College, | |||
Series D, 6.00%, 1/01/18 | 950 | 950,076 | |
Massachusetts State College Building | |||
Authority, RB, Series A (AMBAC), | |||
5.00%, 5/01/31 | 1,000 | 1,039,950 | |
Massachusetts State College Building | |||
Authority, Refunding RB, Series B | |||
(Syncora), 5.50%, 5/01/39 | 825 | 933,017 | |
26,307,971 | |||
Health 45.4% | |||
Massachusetts Development Finance | |||
Agency, RB: | |||
First Mortgage, Edgecombe Project, | |||
Series A, 6.75%, 7/01/21 | 855 | 870,142 | |
First Mortgage, Overlook | |||
Communities, Series A, 6.13%, | |||
7/01/24 | 850 | 754,171 | |
Seven Hills Foundation & Affiliates | |||
(Radian), 5.00%, 9/01/35 | 500 | 416,115 |
Portfolio Abbreviations
To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many of the securities have been abbreviated
according to the following list:
ACA | American Capital Access Corp. | FGIC | Financial Guaranty Insurance Co. |
AGC | Assured Guaranty Corp. | GO | General Obligation Bonds |
AGM | Assured Guaranty Municipal Corp. | HFA | Housing Finance Agency |
AMBAC | American Municipal Bond Assurance Corp. | HRB | Housing Revenue Bonds |
AMT | Alternative Minimum Tax (subject to) | NPFGC | National Public Finance Guarantee Corp. |
BHAC | Berkshire Hathaway Assurance Corp. | RB | Revenue Bonds |
ERB | Education Revenue Bonds | VRDN | Variable Rate Demand Notes |
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
MAY 31, 2010
1
Schedule of Investments (continued)
The Massachusetts Health & Education Tax-Exempt Trust (MHE)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
Massachusetts (continued) | |||
Health (concluded) | |||
Massachusetts Development Finance | |||
Agency, Refunding RB: | |||
Carleton-Willard Village, 5.63%, | |||
12/01/30 | $ 500 $ | 501,605 | |
First Mortgage, Brookhaven, | |||
Series A (Radian), 5.00%, 3/01/35 | 1,250 | 1,059,900 | |
Massachusetts Health & Educational | |||
Facilities Authority, RB: | |||
Baystate Medical Center, Series F, | |||
5.75%, 7/01/33 | 1,000 | 1,011,900 | |
Berkshire Health System, Series E, | |||
6.25%, 10/01/31 | 350 | 354,371 | |
Berkshire Health System, Series F | |||
(AGC), 5.00%, 10/01/19 | 1,000 | 1,042,970 | |
Children's Hospital, Series M, | |||
5.25%, 12/01/39 | 600 | 623,202 | |
Children's Hospital, Series M, | |||
5.50%, 12/01/39 | 500 | 528,815 | |
Lahey Clinic Medical Center, | |||
Series D, 5.25%, 8/15/37 | 1,000 | 1,001,110 | |
Milford-Whitinsville Hospital, | |||
Series D, 6.35%, 7/15/12 (a) | 750 | 845,040 | |
Southcoast Health Obligation, | |||
Series D, 5.00%, 7/01/39 | 500 | 489,470 | |
Massachusetts Health & Educational | |||
Facilities Authority, Refunding RB: | |||
Caregroup, Series E-1, 5.00%, | |||
7/01/28 | 500 | 490,065 | |
Christopher House, Series A, | |||
6.88%, 1/01/29 | 470 | 461,507 | |
Healthcare System, Covenant, | |||
6.00%, 1/01/12 (a) | 170 | 186,060 | |
Healthcare System, Covenant, | |||
6.00%, 1/01/12 (a) | 85 | 93,030 | |
Healthcare System, Covenant, | |||
6.00%, 7/01/22 | 630 | 649,511 | |
Healthcare System, Covenant, | |||
6.00%, 7/01/31 | 315 | 321,010 | |
Partners Healthcare System, | |||
Series B, 5.25%, 7/01/29 | 1,000 | 1,007,750 | |
Valley Regional Health System, | |||
Series C (AMBAC), 5.75%, 7/01/18 | 395 | 392,962 | |
Massachusetts Industrial Finance | |||
Agency, RB, Age Institute of | |||
Massachusetts Project, 8.05%, | |||
11/01/25 | 675 | 675,648 | |
13,776,354 | |||
Housing 4.6% | |||
Massachusetts HFA, Refunding HRB, | |||
Series F, AMT, 5.70%, 6/01/40 | 980 | 999,169 | |
Massachusetts HFA, Refunding RB, | |||
Series 132, AMT, 5.38%, 12/01/27 | 400 | 413,068 | |
1,412,237 |
Par | |||
Municipal Bonds | (000) | Value | |
Massachusetts (concluded) | |||
State 3.1% | |||
Massachusetts Development Finance | |||
Agency, ERB, Middlesex School | |||
Project, 5.00%, 9/01/33 | $ 400 | $ 404,764 | |
Massachusetts State College Building | |||
Authority, RB, Series A, 5.50%, | |||
5/01/39 | 500 | 541,370 | |
946,134 | |||
Total Municipal Bonds in Massachusetts | 43,860,119 | ||
Puerto Rico 10.7% | |||
State 5.4% | |||
Commonwealth of Puerto Rico, GO, | |||
Refunding, Public Improvement, | |||
Series A-4 (AGM), 5.00%, 7/01/31 | 575 | 584,913 | |
Puerto Rico Sales Tax Financing Corp., | |||
RB, First Sub-Series A, 5.75%, | |||
8/01/37 | 1,000 | 1,063,650 | |
1,648,563 | |||
Utilities 5.3% | |||
Puerto Rico Electric Power Authority, RB, | |||
Series WW, 5.50%, 7/01/38 | 1,000 | 1,024,870 | |
Puerto Rico Electric Power Authority, | |||
Refunding RB, Series VV (BHAC), | |||
5.25%, 7/01/25 | 500 | 563,010 | |
1,587,880 | |||
Total Municipal Bonds in Puerto Rico 3,236,443 | |||
Total Municipal Bonds 155.1% 47,096,562 | |||
Municipal Bonds Transferred to Tender | |||
Option Bond Trusts (b) | |||
Massachusetts 6.9% | |||
State 6.9% | |||
Massachusetts School Building | |||
Authority, RB, Series A (AGM), 5.00%, | |||
8/15/30 2,010 2,109,974 | |||
Total Municipal Bonds Transferred to | |||
Tender Option Bond Trusts 6.9% 2,109,974 | |||
Total Long-Term Investments | |||
(Cost $48,369,411) 162.0% 49,206,536 | |||
Short-Term Securities | |||
Massachusetts 1.0% | |||
Massachusetts Health & Educational | |||
Facilities Authority, Refunding RB, | |||
VRDN, Partners Healthcare System, | |||
Series D-1, 0.18%, 6/01/10 (c) | 300 | 300,000 |
2
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
MAY 31, 2010
Schedule of Investments (concluded)
The Massachusetts Health & Education Tax-Exempt Trust (MHE)
(Percentages shown are based on Net Assets)
Short-Term Securities Shares Value | |
Money Market Fund 0.4% | |
CMA Massachusetts Municipal Money | |
Fund, 0.00% (d)(e) 119,850 $ 119,850 | |
Total Short-Term Securities | |
(Cost $419,850) 1.4% 419,850 | |
Total Investments | |
(Cost $48,789,261*) 163.4% | 49,626,386 |
Other Assets Less Liabilities 1.9% | 587,246 |
Liability for Trust Certificates, Including Interest | |
Expense and Fees Payable (4.4)% | (1,340,570) |
Preferred Shares, at Redemption Value (60.9)% | (18,501,255) |
Net Assets Applicable to Common Shares 100.0% | $ 30,371,807 |
* The cost and unrealized appreciation (depreciation) of investments as of
May 31, 2010, as computed for federal income tax purposes, were as
Aggregate follows: cost | $ 47,461,011 |
Gross unrealized appreciation | $ 1,605,923 |
Gross unrealized depreciation | (780,143) |
Net unrealized appreciation | $ 825,780 |
(a) US government securities, held in escrow, are used to pay interest on this
security as well as to retire the bond in full at the date indicated, typically
at a premium to par.
(b) Securities represent bonds transferred to a tender option bond trust in
exchange for which the Trust acquired residual interest certificates. These
securities serve as collateral in a financing transaction.
(c) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate shown is as of report date and maturity shown is the
date the principal owed can be recovered through demand.
(d) Investments in companies considered to be an affiliate of the Trust during
the period, for purposes of Section 2(a)(3) of the Investment Company Act
of 1940, as amended, were as follows:
Shares Held | Shares Held | |||
at | at | |||
August 31, | Net | May 31, | ||
Affiliate | 2009 | Activity | 2010 | Income |
CMA | ||||
Massachu- | ||||
setts | ||||
Municipal | ||||
Money | ||||
Fund | - | 119,850 | 119,850 | - |
(e) Represents the current yield as of report date.
Fair Value Measurements - Various inputs are used in determining the fair
value of investments, which are as follows:
Level 1 price quotations in active markets/exchanges for identical
assets and liabilities
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)
Level 3 unobservable inputs based on the best information available
in the circumstances, to the extent observable inputs are not available
(including the Trust's own assumptions used in determining the fair
value of investments)
The inputs or methodologies used for valuing securities are not necessarily
an indication of the risk associated with investing in those securities. For
information about the Trust's policy regarding valuation of investments and
other significant accounting policies, please refer to the Trusts most recent
financial statements as contained in its semi-annual report.
The following table summarizes the inputs used as of May 31, 2010 in
determining the fair valuation of the Trust's investments:
Investments in Securities | ||||
| ||||
Valuation Inputs | Level 1 | Level 2 | Level 3 | Total |
Assets: | ||||
Long-Term | ||||
Investments1 | | $ 49,206,536 | | $ 49,206,536 |
Short-Term | ||||
Securities | $ 119,850 | 300,000 | | 419,850 |
Total | $ 119,850 | $ 49,506,536 | | $ 49,626,386 |
1 See above Schedule of Investments for values in each sector.
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
MAY 31, 2010
3
Item 2 Controls and Procedures
2(a) The registrant's principal executive and principal financial officers or persons performing similar
functions have concluded that the registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the 1940 Act)) are effective as
of a date within 90 days of the filing of this report based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13(a)-15(b) under the Securities
Exchange Act of 1934, as amended.
2(b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule
30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal quarter that have
materially affected, or are reasonably likely to materially affect, the registrant's internal control over
financial reporting.
Item 3 Exhibits
Certifications Attached hereto
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.
The Massachusetts Health & Education Tax-Exempt Trust
By: /s/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer of
The Massachusetts Health & Education Tax-Exempt Trust
Date: July 23, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company
Act of 1940, this report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
By: /s/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer (principal executive officer) of
The Massachusetts Health & Education Tax-Exempt Trust
Date: July 23, 2010
By: /s/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
The Massachusetts Health & Education Tax-Exempt Trust
Date: July 23, 2010