Edgar Filing: EATON VANCE MASSACHUSETTS MUNICIPAL INCOME TRUST

Eaton Vance Massachusetts Municipal Income Trust

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

811-09147

Investment Company Act File Number

Eaton Vance Massachusetts Municipal Income Trust

(Exact Name of Registrant as Specified in Charter)

Two International Place, Boston, Massachusetts 02110

(Address of Principal Executive Offices)

Maureen A. Gemma

Two International Place, Boston, Massachusetts 02110

(Name and Address of Agent for Services)

(617) 482-8260

(Registrant’s Telephone Number, Including Area Code)

November 30

Date of Fiscal Year End

February 28, 2014

Date of Reporting Period

Item 1. Schedule of Investments

Eaton Vance

Massachusetts Municipal Income Trust

February 28, 2014

PORTFOLIO OF INVESTMENTS (Unaudited)

Tax-Exempt Investments — 153.2%


Security	Principal Amount (000’s omitted)		Value
Bond Bank — 5.8%
Massachusetts Water Pollution Abatement Trust, 5.25%, 8/1/33	$	910	$	1,106,305
Massachusetts Water Pollution Abatement Trust, 5.25%, 8/1/34		990		1,206,157

			$	2,312,462

Education — 30.8%
Massachusetts Development Finance Agency, (Milton Academy), 5.00%, 9/1/35	$	1,080	$	1,158,926
Massachusetts Development Finance Agency, (New England Conservatory of Music), 5.25%, 7/1/38		625		636,844
Massachusetts Development Finance Agency, (Northeastern University), 5.00%, 3/1/33		770		828,712
Massachusetts Health and Educational Facilities Authority, (Berklee College of Music), 5.00%, 10/1/32		1,500		1,631,925
Massachusetts Health and Educational Facilities Authority, (Boston College), 5.50%, 6/1/35		1,640		2,009,951
Massachusetts Health and Educational Facilities Authority, (Harvard University), 5.00%, 10/1/38⁽¹⁾		1,500		1,643,850
Massachusetts Health and Educational Facilities Authority, (Massachusetts Institute of Technology), 5.00%, 7/1/38		415		452,931
Massachusetts Health and Educational Facilities Authority, (Northeastern University), 5.00%, 10/1/35		1,350		1,426,302
Massachusetts Health and Educational Facilities Authority, (Tufts University), 5.375%, 8/15/38		1,420		1,582,704
University of Massachusetts Building Authority, 5.00%, 11/1/39		750		807,608

			$	12,179,753

General Obligations — 16.6%
Boston, 4.00%, 4/1/24	$	300	$	330,048
Cambridge, 4.00%, 2/15/21		595		683,108
Danvers, 5.25%, 7/1/36		885		976,332
Lexington, 4.00%, 2/1/21		415		475,802
Lexington, 4.00%, 2/1/22		430		490,720
Lexington, 4.00%, 2/1/23		355		403,585
Newton, 5.00%, 4/1/36		750		818,542
Plymouth, 5.00%, 5/1/31		345		379,062
Plymouth, 5.00%, 5/1/32		315		344,840
Wayland, 5.00%, 2/1/33		510		562,770
Wayland, 5.00%, 2/1/36		770		842,195
Winchester, 5.00%, 4/15/36		245		268,571

			$	6,575,575

Hospital — 25.9%
Massachusetts Development Finance Agency, (Berkshire Health Systems), 5.00%, 10/1/31	$	1,000	$	1,041,600
Massachusetts Development Finance Agency, (Tufts Medical Center), 7.25%, 1/1/32		600		712,506
Massachusetts Development Finance Agency, (UMass Memorial), 5.50%, 7/1/31		555		577,022
Massachusetts Health and Educational Facilities Authority, (Baystate Medical Center, Inc.), 5.75%, 7/1/36		1,210		1,319,977
Massachusetts Health and Educational Facilities Authority, (Children’s Hospital), 5.25%, 12/1/39		500		520,990
Massachusetts Health and Educational Facilities Authority, (Dana-Farber Cancer Institute), 5.00%, 12/1/37		1,135		1,170,265
Massachusetts Health and Educational Facilities Authority, (Jordan Hospital), 6.75%, 10/1/33		755		755,536


Security	Principal Amount (000’s omitted)		Value
Massachusetts Health and Educational Facilities Authority, (Lowell General Hospital), 5.125%, 7/1/35	$	970	$	984,346
Massachusetts Health and Educational Facilities Authority, (Partners Healthcare Systems), 5.00%, 7/1/32		2,000		2,141,080
Massachusetts Health and Educational Facilities Authority, (South Shore Hospital), 5.75%, 7/1/29		675		677,923
Massachusetts Health and Educational Facilities Authority, (Southcoast Health System), 5.00%, 7/1/29		350		363,594

			$	10,264,839

Housing — 6.8%
Massachusetts Housing Finance Agency, (AMT), 4.75%, 12/1/48	$	2,100	$	2,030,700
Massachusetts Housing Finance Agency, (AMT), 5.00%, 12/1/28		650		656,233

			$	2,686,933

Industrial Development Revenue — 1.9%
Massachusetts Development Finance Agency, (Covanta Energy), (AMT), 4.875%, 11/1/27	$	800	$	768,664

			$	768,664

Insured-Education — 7.1%
Massachusetts College Building Authority, (XLCA), 5.50%, 5/1/39	$	1,000	$	1,202,860
Massachusetts Development Finance Agency, (College of the Holy Cross), (AMBAC), 5.25%, 9/1/32⁽¹⁾⁽²⁾		1,365		1,619,299

			$	2,822,159

Insured-Electric Utilities — 1.3%
Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/29	$	550	$	494,181

			$	494,181

Insured-General Obligations — 3.2%
Massachusetts, (AMBAC), 5.50%, 8/1/30	$	1,000	$	1,264,780

			$	1,264,780

Insured-Hospital — 0.9%
Massachusetts Health and Educational Facilities Authority, (Cape Cod Healthcare), (AGC), 5.00%, 11/15/25	$	335	$	358,162

			$	358,162

Insured-Other Revenue — 1.7%
Massachusetts Development Finance Agency, (WGBH Educational Foundation), (AMBAC), 5.75%, 1/1/42	$	590	$	684,695

			$	684,695

Insured-Special Tax Revenue — 10.7%
Martha’s Vineyard Land Bank, (AMBAC), 5.00%, 5/1/32	$	1,450	$	1,455,133
Massachusetts, Special Obligation, Dedicated Tax Revenue, (NPFG), 5.50%, 1/1/29		1,000		1,193,330
Massachusetts School Building Authority, Dedicated Sales Tax Revenue, (AMBAC), 5.00%, 8/15/37⁽¹⁾		1,340		1,439,643
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45		1,105		140,147

			$	4,228,253

Insured-Student Loan — 3.7%
Massachusetts Educational Financing Authority, (AGC), (AMT), 6.35%, 1/1/30	$	300	$	320,394
Massachusetts Educational Financing Authority, (AMBAC), (AMT), 4.70%, 1/1/33		1,175		1,156,317

			$	1,476,711


Security	Principal Amount (000’s omitted)		Value
Insured-Transportation — 0.8%
Massachusetts Port Authority, (Bosfuel Project), (NPFG), (AMT), 5.00%, 7/1/32	$	315	$	320,746

			$	320,746

Other Revenue — 2.9%
Massachusetts Health and Educational Facilities Authority, (Isabella Stewart Gardner Museum), 5.00%, 5/1/22	$	500	$	566,945
Massachusetts Health and Educational Facilities Authority, (Isabella Stewart Gardner Museum), 5.00%, 5/1/25		505		572,614

			$	1,139,559

Senior Living/Life Care — 6.1%
Massachusetts Development Finance Agency, (Berkshire Retirement Community, Inc.), 5.15%, 7/1/31	$	250	$	238,640
Massachusetts Development Finance Agency, (Berkshire Retirement Community, Inc.), 5.625%, 7/1/29		1,500		1,500,105
Massachusetts Development Finance Agency, (Carleton-Willard Village), 5.625%, 12/1/30		125		131,860
Massachusetts Development Finance Agency, (VOA Concord Assisted Living, Inc.), 5.125%, 11/1/27		140		130,088
Massachusetts Development Finance Agency, (VOA Concord Assisted Living, Inc.), 5.20%, 11/1/41		475		400,501

			$	2,401,194

Special Tax Revenue — 8.4%
Massachusetts Bay Transportation Authority, 5.25%, 7/1/34	$	140	$	155,227
Massachusetts Bay Transportation Authority, Sales Tax Revenue, 0.00%, 7/1/31		1,665		760,322
Massachusetts Bay Transportation Authority, Sales Tax Revenue, 0.00%, 7/1/34		5,195		2,036,128
Virgin Islands Public Finance Authority, 6.75%, 10/1/37		335		368,959

			$	3,320,636

Transportation — 7.3%
Massachusetts Department of Transportation, (Metropolitan Highway System), 5.00%, 1/1/37	$	1,500	$	1,567,440
Massachusetts Port Authority, 5.00%, 7/1/28		500		574,420
Massachusetts Port Authority, 5.00%, 7/1/34		670		735,111

			$	2,876,971

Water and Sewer — 11.3%
Boston Water and Sewer Commission, 5.00%, 11/1/26	$	2,005	$	2,303,464
Boston Water and Sewer Commission, 5.00%, 11/1/29		495		563,449
Boston Water and Sewer Commission, 5.00%, 11/1/31		225		249,241
Massachusetts Water Resources Authority, 5.00%, 8/1/28		1,195		1,356,337

			$	4,472,491


Total Tax-Exempt Investments — 153.2% (identified cost $57,320,402)			$	60,648,764


Auction Preferred Shares Plus Cumulative Unpaid Dividends — (50.6)%			$	(20,050,192	)


Other Assets, Less Liabilities — (2.6)%			$	(1,000,002	)


Net Assets Applicable to Common Shares — 100.0%			$	39,598,570

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



AGC	-	Assured Guaranty Corp.

AMBAC	-	AMBAC Financial Group, Inc.

AMT	-	Interest earned from these securities may be considered a tax preference item for purposes of the Federal Alternative Minimum Tax.

NPFG	-	National Public Finance Guaranty Corp.

XLCA	-	XL Capital Assurance, Inc.

The Trust invests primarily in debt securities issued by Massachusetts municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at February 28, 2014, 19.2% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution or financial guaranty assurance agency ranged from 1.1% to 12.6% of total investments.

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

(2)	Security (or a portion thereof) has been pledged as collateral for residual interest bond transactions. The aggregate value of such collateral is $709,300.

A summary of open financial instruments at February 28, 2014 is as follows:

Futures Contracts


Expiration Month/Year	Contracts	Position	Aggregate Cost			Value			Net Unrealized Depreciation
6/14	34 U.S. Long Treasury Bond	Short	$	(4,460,578	)	$	(4,524,125	)	$	(63,547	)

At February 28, 2014, the Trust had sufficient cash and/or securities to cover commitments under these contracts.

The Trust is subject to interest rate risk in the normal course of pursuing its investment objective. Because the Trust holds fixed-rate bonds, the value of these bonds may decrease if interest rates rise. The Trust purchases and sells U.S. Treasury futures contracts to hedge against changes in interest rates.

At February 28, 2014, the aggregate fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in a liability position and whose primary underlying risk exposure is interest rate risk was $63,547.

The cost and unrealized appreciation (depreciation) of investments of the Trust at February 28, 2014, as determined on a federal income tax basis, were as follows:


Aggregate cost	$	53,803,365

Gross unrealized appreciation	$	3,779,485
Gross unrealized depreciation		(319,086	)

Net unrealized appreciation	$	3,460,399

Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

•

Level 1 — quoted prices in active markets for identical investments

•

Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•

Level 3 — significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments)

In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

At February 28, 2014, the hierarchy of inputs used in valuing the Trust’s investments and open derivative instruments, which are carried at value, were as follows:


Asset Description	Level 1			Level 2		Level 3		Total
Tax-Exempt Investments	$	—		$	60,648,764	$	—	$	60,648,764
Total Investments	$	—		$	60,648,764	$	—	$	60,648,764

Liability Description
Futures Contracts	$	(63,547	)	$	—	$	—	$	(63,547	)
Total	$	(63,547	)	$	—	$	—	$	(63,547	)

The Trust held no investments or other financial instruments as of November 30, 2013 whose fair value was determined using Level 3 inputs. At February 28, 2014, there were no investments transferred between Level 1 and Level 2 during the fiscal year to date then ended.

For information on the Trust’s policy regarding the valuation of investments and other significant accounting policies, please refer to the Trust’s most recent financial statements included in its semiannual or annual report to shareholders.

Item 2. Controls and Procedures

(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant on this Form N-Q has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant on this Form N-Q has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

(b) There have been no changes in the registrant’s internal controls over financial reporting during the fiscal quarter for which the report is being filed that have materially affected, or are reasonably likely to materially affect the registrant’s internal control over financial reporting.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Eaton Vance Massachusetts Municipal Income Trust



By:		/s/ Payson F. Swaffield
		Payson F. Swaffield
		President

Date:		April 21, 2014

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/ Payson F. Swaffield
		Payson F. Swaffield
		President

Date:		April 21, 2014



By:		/s/ James F. Kirchner
		James F. Kirchner
		Treasurer

Date:		April 21, 2014