UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-7510
ACM Municipal Securities Income Fund, Inc.
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of principal executive offices) (Zip code)
Mark R. Manley
Alliance Capital Management, L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Registrant's telephone number, including area code: (800) 221-5672
Date of fiscal year end: October 31, 2004
Date of reporting period: April 30, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
ACM Municipal Securities Income Fund
Closed End
Semi-Annual Report--April 30, 2004
Investment Products Offered
o Are Not FDIC Insured
o May Lose Value
o Are Not Bank Guaranteed
You may obtain a description of the Fund's proxy voting policies and
procedures, without charge, upon request by visiting Alliance Capital's web
site at www.alliancebernstein.com (click on Investors, then the "proxy voting
policies and procedures" link on the left side of the page), or by going to the
Securities and Exchange Commission's web site at www.sec.gov, or by calling
Alliance Capital at (800) 227-4618.
AllianceBernstein Investment Research and Management, Inc., is an affiliate of
Alliance Capital Management L.P., the manager of the funds, and is a member of
the NASD.
June 25, 2004
Semi-Annual Report
This report provides management's discussion of fund performance for ACM
Municipal Securities Income Fund (the "Fund") for the semi-annual reporting
period ended April 30, 2004.
Investment Objective and Policies
The Fund is a closed-end management investment company designed to provide high
current income exempt from regular federal income tax. The Fund invests
substantially all of its assets in investment grade municipal securities.
Investment Results
The following table provides performance data for the Fund and its benchmark,
the Lehman Brothers (LB) Municipal Index, for the six- and 12-month periods
ended April 30, 2004. For comparison, returns for the Lipper General Municipal
Debt Funds (Leveraged) Average (the "Lipper Average") are also included. The
funds that comprise the Lipper Average have generally similar investment
objectives to the Fund, although some may have different investment policies
and sales and management fees.
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INVESTMENT RESULTS*
Periods Ended April 30, 2004
Returns
6 Months 12 Months
-----------------------
ACM Municipal Securities
Income Fund (NAV) 2.99% 7.73%
Lehman Brothers
Municipal Index 1.19% 2.68%
Lipper General
Municipal Debt Funds
(Leveraged) Average 2.21% 4.97%
The Fund's market price per share on April 30, 2004 was $11.55. For
additional Financial Highlights, please see pages 21-22.
* The Fund's investment results are for the periods shown and are based on
the net asset value (NAV) as of April 30, 2004. All fees and expenses related
to the operation of the Fund have been deducted. Performance assumes
reinvestment of distributions and does not account for taxes. Past performance
is no guarantee of future results.
The unmanaged Lehman Brothers (LB) Municipal Index does not reflect fees
and expenses associated with the active management of a mutual fund portfolio.
The Index is a total return performance benchmark for the long-term, investment
grade, tax-exempt bond market. For the six- and 12-month periods ended April
30, 2004, the Lipper General Municipal Debt Funds (Leveraged) Average consisted
of 65 and 64 funds, respectively. These funds have generally similar investment
objectives to ACM Municipal Securities Income Fund, although some may have
different investment policies and sales and management fees. An investor cannot
invest directly in an index or average, and their results are not indicative of
the performance for any specific investment, including ACM Municipal Securities
Income Fund.
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ACM Municipal Securities Income Fund o 1
For the six-month period ended April 30, 2004, the municipal bond market posted
positive returns even though long municipal rates rose by 0.13%. During this
period, the Fund outperformed its benchmark, the Lehman Brothers Municipal
Index. The Fund's stronger relative performance was largely the result of
certain holdings being advance refunded, as well as its overweight position in
corporate-backed bonds. Security selection in the general obligation and
tobacco settlement sectors also contributed positively to the Fund's
performance. In addition, the Fund's leveraged structure benefited its
performance, primarily because of historically low borrowing costs. During the
six-month reporting period, the Fund also outperformed its peer group, as
represented by the Lipper Average.
Market Review and Investment Strategy
From October 31, 2003 to April 30, 2004, long-term municipal bond yields
increased by approximately 13 basis points. Over that time period, the long
municipal bond market slightly underperformed the taxable bond market on a
pre-tax basis, but outperformed on an after-tax basis. For example, the LB
Municipal Index gained 1.19% during the six-month period ended April 30, 2004
while the LB U.S. Aggregate Index, representing taxable bonds, generated a
pre-tax return of 1.25% over the same period. The Treasury bond component of
the aggregate index posted a lower pre-tax return of 0.75%. As of April 30,
2004, 30-year municipal bonds were yielding approximately 95% of comparable
maturity Treasury bonds.
Continued weak economic conditions, as well as minimal concern for inflation,
contributed to declining municipal bond yields through early March 2004. As
signs of economic recovery emerged in the latter part of March and into early
April, municipal bond yields started to rise in concert with taxable yields. In
anticipation of a more imminent reaction by the U.S. Federal Reserve to the
stronger economic indicators, the market began to push shorter maturity bond
yields higher at a faster pace than longer maturity bonds. As a result, the
difference between 30-year and five-year short-term municipal bond yields
declined by 0.43%. The yield curve, a plot of bond yields sorted by ascending
maturity, normally slopes upward for longer maturity bonds. When the difference
in yield between short- and long-term bonds declines, the change in the shape
of the curve is referred to as a "flattening." When the curve flattens, the
cost, as measured by the decline in yield, of reducing interest rate
sensitivity by moving from longer maturity bonds to shorter maturity bonds,
declines.
The prolonged low rate environment has resulted in an increased demand for
lower-rated bonds that carry higher yields. As demand for those higher yielding
bonds increased, the incremental difference in yield compared to better quality
bonds declined. As a result, higher yielding bonds, in general, generated
strong relative performance over the period.
Given their lower credit profiles, the health care and industrial development
sectors led the market in performance
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2 o ACM Municipal Securities Income Fund
over the past six months. Two of the weakest performing sectors, pre-refunded
bonds and housing bonds, were high credit quality sectors. Pre-refunded bonds
typically have very short effective maturities so rising short-term rates hurt
the performance of those securities. Continued concerns regarding increased
refinancing activity limited price improvement in municipal housing bonds.
Municipal housing bonds are secured by homeowners' mortgages. As homeowners
prepay their mortgages, municipal housing bonds are redeemed at par (100% of
face value). Typically, lower yields cause bond prices to increase, but if the
market anticipates that a bond may be redeemed in the near term, it is unlikely
to value the bonds at a price much above par.
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ACM Municipal Securities Income Fund o 3
PORTFOLIO OF INVESTMENTS
April 30, 2004 (unaudited)
Standard Principal
& Poor's Amount
Rating (000) Value
-------------------------------------------------------------------------------
Long-Term Municipal Bonds-171.3%
Alabama-3.6%
Jefferson Cnty Wtr and Swr Rev
FGIC Ser 02B
Prerefunded 8/01/12 @ 100
5.00%, 2/01/41 AAA $ 1,535 $ 1,660,778
Jefferson Cnty Wtr and Swr Rev
FGIC Ser 02B
5.00%, 2/01/41 AAA 2,465 2,694,319
--------------
4,355,097
--------------
Alaska-4.7%
Alaska International Airport
MBIA Ser 03B
5.00%, 10/01/26 AAA 1,000 995,950
Alaska Muni Bond Bank Auth
MBIA Ser 03E
5.25%, 12/01/26 AAA 3,000 3,079,350
Alaska Muni Bond Bank Auth
MBIA Ser 04G
5.00%, 2/15/22 AAA 1,585 1,610,629
--------------
5,685,929
--------------
Arizona-1.3%
Arizona Cap Facs Fin Corp
(Arizona St Univ Proj)
6.25%, 9/01/32(a) Baa3 1,550 1,606,869
--------------
California-15.5%
Burbank Redev Agy
FGIC Ser 03
5.625%, 12/01/28 AAA 1,660 1,760,131
California Dept of Wtr
Ser 02A
5.375%, 5/01/22(a) A3 2,000 2,050,840
California St
General Obligation Ser 03
5.00%, 2/01/32 BBB 2,450 2,319,807
5.00%, 2/01/33 BBB 1,100 1,040,644
California St
General Obligation Ser 04
5.00%, 2/01/33 BBB 1,000 946,040
Golden St
Tobacco Settlement XLCA
Ser 03B
5.50%, 6/01/33 AAA 3,000 3,097,170
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4 o ACM Municipal Securities Income Fund
Standard Principal
& Poor's Amount
Rating (000) Value
-------------------------------------------------------------------------------
Golden St
Tobacco Settlement RADIAN
Ser 03B
5.50%, 6/01/43 AA $ 3,000 $ 3,004,110
Pomona Lease Rev
AMBAC Ser 03
5.50%, 6/01/24 AAA 1,465 1,552,563
5.50%, 6/01/34 AAA 3,000 3,140,160
--------------
18,911,465
--------------
Colorado-0.8%
Colorado Toll Rev
(Hwy E-470) Ser 00
Zero coupon, 9/01/35 BBB- 10,000 983,600
--------------
Connecticut-7.2%
Connecticut Gaming Auth
(Mohegan Tribe) Ser 01
6.25%, 1/01/31(b) BBB- 3,000 3,136,860
Connecticut St General Obligation
MBIA Ser 412
8.64%, 12/01/11(b)(c) AAA 5,000 5,625,900
--------------
8,762,760
--------------
District of Columbia-4.8%
District of Columbia
Tobacco Settlement Ser 01
6.75%, 5/15/40 BBB 6,320 5,805,173
--------------
Florida-17.0%
Collier Cnty Hlth Fac Rev
(The Moorings Proj) Ser 94
7.00%, 12/01/19 A- 2,000 2,093,620
Florida Hsg Fin Corp Rev MFHR
(Westlake Apts) FSA
Ser 02-D1 AMT
5.40%, 3/01/42 AAA 8,780 8,846,113
Florida Hsg Fin Corp Rev MFHR
(Westminster Apts) FSA
Ser 02-E1 AMT
5.40%, 4/01/42 AAA 2,850 2,875,764
Lee Cnty Hlth Fac Rev
(Shell Point Village Proj) Ser 99A
5.50%, 11/15/29 BBB- 3,670 3,449,910
Miami Beach Hlth Fac Rev
(Mount Sinai Med Ctr)
6.75%, 11/15/24(b) BB 2,000 1,963,040
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ACM Municipal Securities Income Fund o 5
Standard Principal
& Poor's Amount
Rating (000) Value
-------------------------------------------------------------------------------
Orange Cnty Hlth Fac Rev
(Orlando Regl Healthcare) Ser 02
5.75%, 12/01/32 A- $ 1,400 $ 1,431,276
--------------
20,659,723
--------------
Hawaii-2.5%
Hawaii Elec Rev
XLCA Ser 03B AMT
5.00%, 12/01/22 AAA 3,000 2,989,110
--------------
Illinois-7.0%
Chicago Arpt Rev
(O'Hare Intl Arpt) XLCA Ser B-1
5.25%, 1/01/34 AAA 3,100 3,144,330
Chicago Hsg Agy SFMR
(Mortgage Rev) GNMA/FNMA
Ser 02B AMT
6.00%, 10/01/33 AAA 710 757,975
Cook Cnty Sch Dist
FSA Ser 04
4.60%, 12/01/20(e) AAA 1,000 837,180
Illinois Dev Fin Auth Gas Rev
(Peoples Gas Light) AMBAC Ser 03
5.00%, 2/01/33 AAA 2,000 1,969,920
Metropolitan Pier & Exposition Rev
(McCormick Pl) MBIA Ser 02A
5.25%, 6/15/42 AAA 1,750 1,770,108
--------------
8,479,513
--------------
Indiana-7.0%
Indiana Bd Bk Rev
FSA Ser 04B
5.00%, 2/01/21 AAA 1,100 1,127,203
Warrick Cnty Poll Ctl Rev
(Southern IN Gas & Electric)
Ser 93B AMT
6.00%, 5/01/23 A- 7,290 7,392,060
--------------
8,519,263
--------------
Louisiana-0.1%
Calcasieu Parish Hsg Agy SFMR
(Mortgage Rev) GNMA
Ser 97A AMT
6.40%, 4/01/32(a) Aaa 95 97,479
--------------
Maine-0.9%
Jay Solid Waste Disp Rev
(International Paper Co)
Ser 99B AMT
6.20%, 9/01/19 BBB 1,000 1,065,440
--------------
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6 o ACM Municipal Securities Income Fund
Standard Principal
& Poor's Amount
Rating (000) Value
-------------------------------------------------------------------------------
Massachusetts-11.8%
Mass General Obligation Ser 02
Prerefunded 11/01/12 @ 100
5.25%, 11/01/30 AA- $ 3,310 $ 3,657,980
Mass General Obligation Ser 02
5.25%, 11/01/30 AA- 1,690 1,848,421
Mass Hlth & Ed Fac Hosp Rev
(New England Med Ctr) MBIA
Ser 94
9.48%, 7/01/18(c) AAA 5,000 5,247,300
Mass Hsg Fin Agy MFHR
(Rental Rev) AMBAC Ser 00A AMT
6.00%, 7/01/41 AAA 2,965 3,086,624
Mass Hsg Fin Agy MFHR
(Rental Rev) MBIA Ser 00H AMT
6.65%, 7/01/41 AAA 545 581,956
--------------
14,422,281
--------------
Michigan-5.9%
Michigan St Hosp Rev
(Trinity Hlth) Ser 00A
6.00%, 12/01/27 AA- 3,000 3,190,950
Saginaw Hosp Fac Rev
(Covenant Med Ctr) Ser 00F
6.50%, 7/01/30 A 3,775 4,049,631
--------------
7,240,581
--------------
Minnesota-1.9%
Bass Brook Poll Ctl Rev
(Minnesota Pwr & Light Co) Ser 92
6.00%, 7/01/22 A 2,250 2,264,423
--------------
Mississippi-7.6%
Adams Cnty Poll Ctl Rev
(International Paper Co) Ser 99 AMT
6.25%, 9/01/23 BBB 5,000 5,244,550
Gulfport Hosp Fac Rev
(Mem Hosp at Gulfport Proj)
Ser 01A
5.75%, 7/01/31(a) A2 4,000 4,053,440
--------------
9,297,990
--------------
Nevada-1.7%
Carson City Hosp Rev
(Carson-Tahoe Hosp Proj)
RADIAN Ser 03A
5.00%, 9/01/23 AA 2,100 2,051,532
--------------
New Jersey-3.1%
New Jersey St Edl Facs
AMBAC Ser 02A-213
9.32%, 9/01/21(a)(b)(c) Aaa 3,400 3,750,336
--------------
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ACM Municipal Securities Income Fund o 7
Standard Principal
& Poor's Amount
Rating (000) Value
-------------------------------------------------------------------------------
New Mexico-0.6%
Dona Ana Cnty Tax Rev
AMBAC Ser 03
5.25%, 5/01/25(a) Aaa $ 750 $ 769,448
--------------
New York-10.4%
New York City
General Obligation Ser 04I
5.00%, 8/01/21 A 3,300 3,312,870
New York City Indl Dev Agy Rev
(Terminal One Group) Ser 94 AMT
6.125%, 1/01/24(a) A3 8,100 8,282,898
New York City Indl Dev Agy Rev
(British Airways) Ser 98 AMT
5.25%, 12/01/32 BB+ 1,500 1,103,430
--------------
12,699,198
--------------
North Dakota-2.5%
North Dakota Hsg Fin Agy SFMR
(Mortgage Rev) Ser 98E AMT
5.25%, 1/01/30(a) Aa2 3,070 3,025,516
--------------
Ohio-10.8%
Cuyahoga Cnty Hosp Fac Rev
(University Hosp Hlth) Ser 00
7.50%, 1/01/30 BBB 2,400 2,633,136
Fairfield Cnty Hosp Fac Rev
(Fairfield Med Ctr Proj) RADIAN
Ser 03
5.00%, 6/15/23 AA 1,255 1,248,825
Ohio Hsg Fin Agy MFHR
(Mortgage Rev) GNMA Ser 97 AMT
6.15%, 3/01/29(a) Aaa 4,945 5,059,081
Ohio State Wtr Dev Auth
(North Star) Ser 95 AMT
6.45%, 9/01/20 A+ 4,075 4,250,795
--------------
13,191,837
--------------
Pennsylvania-7.6%
Pennsylvania Parking Fac Rev
(30th St Station) ACA Ser 02 AMT
5.875%, 6/01/33 A 2,050 2,107,154
Pennsylvania Hsg Fin Agy SFMR
(Mortgage Rev) Ser 99-68A AMT
6.15%, 10/01/30 AA+ 7,000 7,170,450
--------------
9,277,604
--------------
South Carolina-0.4%
Richland Lexington Arpt Rev
(Columbia Met Arpt)
FSA Ser 04 AMT
5.125%, 1/01/25 AAA 500 484,950
--------------
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8 o ACM Municipal Securities Income Fund
Standard Principal
& Poor's Amount
Rating (000) Value
-------------------------------------------------------------------------------
Tennessee-9.1%
Tenn Ed Loan Rev
(Educational Funding of South)
Ser 97B AMT
6.20%, 12/01/21(a) Aa2 $10,600 $ 11,046,790
--------------
Texas-13.0%
Dallas TX Arpt Rev
(Fort Worth Intl Arpt) MBIA
Ser 03A AMT
5.25%, 11/01/25 AAA 2,000 2,016,340
Harris Cnty
Ser 03
5.00%, 10/01/23 AA+ 1,950 1,996,956
Harris Cnty Toll Rev
FSA Ser 02
5.125%, 8/15/32 AAA 5,000 5,021,350
Lower Colorado Riv Auth
AMBAC Ser 03
5.25%, 5/15/25 AAA 1,800 1,846,818
Lower Colorado Riv Auth
MBIA Ser 02
5.00%, 5/15/31 AAA 3,000 2,977,950
Matagorda Cnty Rev
(Centerpoint Energy Houston
Electric LLC)
Ser 04
5.60%, 3/01/27 BBB 1,000 999,910
Seguin Ed Fac Rev
(Texas Lutheran Univ) Ser 04
5.25%, 9/01/28 BBB- 1,000 928,960
--------------
15,788,284
--------------
Utah-2.1%
Salt Lake City Wtr Rev
AMBAC Ser 04
5.00%, 7/01/23(a) Aaa 1,500 1,518,975
Davis Cnty Sales Tax Rev
AMBAC Ser 03B
5.25%, 10/01/23 AAA 1,005 1,037,070
--------------
2,556,045
--------------
Washington-7.4%
Pilchuck Dev Pub Corp Spec Fac
(BF Goodrich) Ser 93 AMT
6.00%, 8/01/23 BBB- 7,500 7,508,025
Seattle Hsg Auth Rev MFHR
(Wisteria Ct Proj) GNMA Ser 03
5.20%, 10/20/28(a) Aaa 1,475 1,491,476
--------------
8,999,501
--------------
Wisconsin-3.0%
Wisconsin General Obligation Ser 03
5.00%, 11/01/26 AA- 3,700 3,704,403
--------------
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ACM Municipal Securities Income Fund o 9
Value
-------------------------------------------------------------------------------
Total Investments-171.3%
(cost $203,289,172) $ 208,492,140
Other assets less liabilities-2.6% 3,207,245
Preferred Stock, at redemption
value-(73.9)% (90,000,000)
--------------
Net Assets Applicable to Common
Shareholders-100%(f) $ 121,699,385
--------------
INTEREST RATE SWAP TRANSACTIONS (see Note C)
Rate Type
-------------------------
Payments Payments
Swap Notional Termination made by received by Unrealized
Counterparty Amount Date the Fund the Fund Depreciation
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BMA* Municipal
J.P. Morgan $3,400,000 11/18/2004 1.297% Swap IndexTM $ (4,163)
BMA* Municipal
J.P. Morgan 5,000,000 7/8/2005 1.257 Swap IndexTM (579)
---------
$ (4,742)
* BMA (Bond Market Association)
(a) Moody's or Fitch Rating.
(b) Private Placement.
(c) Inverse Floater Security-Security with variable interest rate that moves
in the opposite direction of short-term interest rates.
(d) Variable rate coupon, rate shown as of April 30, 2004.
(e) Initial yield is presented. Interest rate after 12/01/07 will be 5.00%.
(f) Portfolio percentages are calculated based on net assets applicable to
common shareholders.
Glossary of Terms:
ACA - American Capital Access (Financial Guaranty Corporation)
AMBAC - American Municipal Bond Assurance Corporation
AMT - Alternative Minimum Tax
FGIC - Financial Guaranty Insurance Company
FNMA - Federal National Mortgage Association
FSA - Financial Security Assurance, Inc.
GNMA - Government National Mortgage Association
MBIA - Municipal Bond Investors Assurance Corporation
MFHR - Multi-Family Housing Revenue
RADIAN - Radian Group, Inc.
SFMR - Single Family Mortgage Revenue
XLCA - XL Capital Assurance, Inc.
See notes to financial statements.
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10 o ACM Municipal Securities Income Fund
STATEMENT OF ASSETS & LIABILITIES
April 30, 2004 (unaudited)
Assets
Investments in securities, at value (cost $203,289,172) $ 208,492,140
Interest receivable 3,778,067
Receivable for investment securities sold 2,015,440
Prepaid expenses 52,872
Total assets 214,338,519
Liabilities
Due to custodian 1,883,446
Unrealized depreciation of swap contracts 4,742
Payable for investment securities purchased 508,930
Advisory fee payable 102,901
Administrative fee payable 26,345
Dividend payable--preferred shares 10,037
Accrued expenses and other liabilities 102,733
Total liabilities 2,639,134
Preferred Stock, at redemption value
$.01 par value per share; 3,600 shares
Auction Preferred Stock authorized,
issued and outstanding at $25,000
per share liquidation preference 90,000,000
Net Assets Applicable to Common Shareholders $ 121,699,385
Composition of Net Assets Applicable to
Common Shareholders
Common Stock, $.01 par value per share;
99,996,400 shares authorized,
11,107,575 shares issued and outstanding $ 111,076
Additional paid-in capital 140,477,630
Undistributed net investment income 764,284
Accumulated net realized loss on investment transactions (24,851,831)
Net unrealized appreciation of investments 5,198,226
Net Assets Applicable to Common Shareholders $ 121,699,385
Net Asset Value Applicable to Common Shareholders
(based on 11,107,575 common shares outstanding) $10.96
See notes to financial statements.
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ACM Municipal Securities Income Fund o 11
STATEMENT OF OPERATIONS
Six Months Ended April 30, 2004 (unaudited)
Investment Income
Interest $ 6,039,051
Expenses
Advisory fee $ 542,115
Administrative fee 162,634
Auction Preferred Stock--auction
agent's fees 113,554
Audit and legal 60,636
Custodian 55,645
Printing 20,884
Registration fees 17,112
Directors' fees and expenses 13,525
Transfer agency 13,189
Miscellaneous 23,388
Total expenses 1,022,682
Net investment income 5,016,369
Realized and Unrealized Gain (Loss)
on Investment Transactions
Net realized loss on:
Investment transactions (820,532)
Swap transactions (2,245)
Net change in unrealized
appreciation/depreciation of:
Investments 73,909
Swaps (4,742)
Net loss on investment transactions (753,610)
Dividends to Auctioned Preferred
Shareholders from
Net investment income (442,315)
Net Increase in Net Assets Applicable
to Common Shareholders Resulting
from Operations $ 3,820,444
See notes to financial statements.
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12 o ACM Municipal Securities Income Fund
STATEMENT OF CHANGES IN NET ASSETS
APPLICABLE TO COMMON SHAREHOLDERS
Statement of Changes in Net Assets
Six Monthss
Ended Year Ended
April 30, 2004 October 31,
(unaudited) 2003
------------- --------------
Increase (Decrease) in Net Assets
Applicable to Common Shareholders
Resulting from Operations
Net investment income $ 5,016,369 $ 10,678,570
Net realized loss on investment
transactions (822,777) (4,988,518)
Net change in unrealized
appreciation/depreciation
of investments 69,167 6,318,119
Dividends to Auction Preferred
Shareholders from
Net Investment Income (442,315) (1,026,752)
Net increase in net assets
applicable to common shareholders
resulting from operations 3,820,444 10,981,419
Dividends and Distributions to
Common Shareholders from
Net investment income (4,823,288) (8,802,335)
Common Stock Transactions
Reinvestment of dividends resulting in the
issuance of common stock 379,788 820,580
Total increase (decrease) (623,056) 2,999,664
Net Assets Applicable to Common
Shareholders
Beginning of period 122,322,441 119,322,777
End of period (including undistributed
net investment income of $764,284
and $1,013,518, respectively) $ 121,699,385 $ 122,322,441
See notes to financial statements.
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ACM Municipal Securities Income Fund o 13
NOTES TO FINANCIAL STATEMENTS
April 30, 2004 (unaudited)
NOTE A
Significant Accounting Policies
ACM Municipal Securities Income Fund, Inc. (the "Fund"), was incorporated in
the state of Maryland on February 11, 1993 and is registered under the
Investment Company Act of 1940 as a diversified, closed-end management
investment company. The financial statements have been prepared in conformity
with accounting principles generally accepted in the United States, which
require management to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities in the financial statements and
amounts of income and expenses during the reporting period. Actual results
could differ from those estimates. The following is a summary of significant
accounting policies followed by the Fund.
1. Security Valuation
In accordance with Pricing Policies adopted by the Board of Directors of the
Fund (the "Pricing Policies") and applicable law, portfolio securities are
valued at current market value or at fair value. The Board of Directors has
delegated to Alliance Capital Management L.P. (the "Adviser"), subject to the
Board's continuing oversight, certain responsibilities with respect to the
implementation of the Pricing Policies. Pursuant to the Pricing Policies,
securities for which market quotations are readily available are valued at
their current market value. In general, the market value of these securities is
determined as follows:
Securities listed on a national securities exchange or on a foreign securities
exchange are valued at the last sale price at the close of the exchange or
foreign securities exchange. If there has been no sale on such day, the
securities are valued at the mean of the closing bid and asked prices on such
day. If no bid or asked prices are quoted on such day, then the security is
valued in good faith at fair value in accordance with the Pricing Policies.
Securities listed on more than one exchange are valued by reference to the
principal exchange on which the securities are traded; securities not listed on
an exchange but traded on The Nasdaq Stock Market, Inc. ("NASDAQ") are valued
in accordance with the NASDAQ Official Closing Price; listed put or call
options are valued at the last sale price. If there has been no sale on that
day, such securities will be valued at the closing bid prices on that day; open
futures contracts and options thereon are valued using the closing settlement
price or, in the absence of such a price, the most recent quoted bid price. If
there are no quotations available for the day of valuations, the last available
closing settlement price is used; securities traded in the over-the-counter
market, (but excluding securities traded on NASDAQ) are valued at the mean of
the current bid and asked prices as reported by the National Quotation Bureau
or other comparable sources; U.S. Government securities and other debt
instruments having 60 days or less remaining until maturity are valued at
amortized cost if their original maturity was 60 days or less, or by amortizing
their fair value as of the 61st day prior to maturity if their original term to
maturity exceeded 60 days; fixed-income securities, including
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14 o ACM Municipal Securities Income Fund
mortgage backed and asset backed securities, may be valued on the basis of
prices provided by a pricing service or at a price obtained from one or more of
the major broker/dealers. In cases where broker/dealer quotes are obtained, the
Pricing Policies provide that the Adviser may establish procedures whereby
changes in market yields or spreads are used to adjust, on a daily basis, a
recently obtained quoted price on a security; and OTC and other derivatives are
valued on the basis of a quoted bid price or spread from a major broker/dealer
in such security.
Securities for which market quotations are not readily available are valued at
fair value in accordance with the Pricing Policies. The Fund fair values a
security that it holds when a significant event (e.g., an earthquake or a major
terrorist attack) occurs after the time that the latest market quotation was
established, and, as a result, such market quotation cannot be said to
represent the current market value of the security as of the time the Fund
prices its shares. Fair valuing securities is imprecise, and there is no
assurance that the Fund could dispose of the security at the price used for
determining the Fund's net asset value.
2. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute substantially
all of its investment company taxable income and net realized gains, if any, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
3. Investment Income and Investment Transactions
Interest income is accrued daily. Investment transactions are accounted for on
the trade date securities are purchased or sold. Investment gains and losses
are determined on the identified cost basis. The Fund amortizes premiums and
accretes original issue discounts and market discounts as adjustments to
interest income.
4. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance with
accounting principles generally accepted in the United States. To the extent
these differences are permanent, such amounts are reclassified within the
capital accounts based on their federal tax basis treatment; temporary
differences do not require such reclassification.
NOTE B
Advisory, Administrative Fees and Other Transactions with Affiliates
Under the terms of an investment advisory agreement, the Fund pays the Adviser
an advisory fee at an annual rate of .50 of 1% of the average weekly net assets
of the Fund. Such fee is accrued daily and paid monthly.
-------------------------------------------------------------------------------
ACM Municipal Securities Income Fund o 15
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Global
Investor Services, Inc. (AGIS), an affiliate of the Adviser, the Fund
reimburses AGIS for costs relating to servicing phone inquiries for the Fund.
During the six months ended April 30, 2004, there was no reimbursement paid to
AGIS.
Under the terms of an Administration Agreement, the Fund pays Alliance Capital
Management L.P. (the "Administrator") an administration fee at an annual rate
of .15 of 1% of the average weekly net assets of the Fund. Such fee is accrued
daily and paid monthly. The Administrator has engaged Prudential Investments
LLC (the "Sub-Administrator"), an indirect, wholly-owned subsidiary of
Prudential Financial, Inc., to act as sub-administrator. The Administrator, out
of its own assets, will pay the Sub-Administrator a monthly fee equal to an
annual rate of .10 of 1% of the Fund's average weekly net assets. The
Sub-Administrator prepares financial and regulatory reports for the Fund and
provides other clerical services.
NOTE C
Investment Transactions
Purchases and sales of investment securities (excluding short-term investments)
for the six months ended April 30, 2004, were as follows:
Purchases Sales
--------------- --------------
Investment securities (excluding
U.S. government securities) $ 29,983,167 $ 34,110,160
U.S. government securities -0- -0-
The cost of investments for federal income tax purposes was substantially the
same as the cost for financial reporting purposes. Accordingly, gross
unrealized appreciation and unrealized depreciation (excluding swaps) are as
follows:
Gross unrealized appreciation $ 7,667,466
Gross unrealized depreciation (2,464,498)
Net unrealized appreciation $ 5,202,968
1. Swap Agreements
The Fund may enter into swaps to hedge its exposure to interest rates and
credit risk and for investment purposes. A swap is an agreement that obligates
two parties to exchange a series of cash flows at specified intervals based
upon or calculated by reference to changes in specified prices or rates for a
specific amount of an underlying asset. The payment flows are usually netted
against each other, with the difference being paid by one party to the other.
Risks may arise as a result of the failure of the counterparty to the swap
contract to comply with the terms of the swap contract. The loss incurred by
the failure of the counterparty is generally limited to the net interest
payment to be received by the Fund, and/or the termination value at the end of
the contract. Therefore,
-------------------------------------------------------------------------------
16 o ACM Municipal Securities Income Fund
the Fund considers the creditworthiness of each counterparty to a swap contract
in evaluating potential credit risk. Additionally, risks may arise from
unanticipated movements in interest rates or in the value of the underlying
securities.
The Fund accrues for the interim payments on swap contracts on a daily basis,
with the net amount recorded within unrealized appreciation/depreciation of
swap contracts on the statement of assets and liabilities. Once the interim
payments are settled in cash, the net amount is recorded as realized gain/loss
on swaps, in addition to realized gain/loss recorded upon the termination of
swap contracts on the statement of operations. Fluctuations in the value of
swap contracts are recorded as a component of net change in unrealized
appreciation/ depreciation of investments.
NOTE D
Distributions To Common Shareholders
The tax character of distributions to be paid for the year ending October 31,
2004 will be determined at the end of the current fiscal year. The tax
character of distributions paid to common shareholders during the fiscal years
ended October 31, 2003 and October 31, 2002 were as follows:
2003 2002
---------- -------------
Distributions paid from:
Ordinary income $ 87,103 $ 103,452
Tax-exempt income 8,715,232 9,384,782
Total distributions paid $ 8,802,335 $ 9,488,234(a)
As of October 31, 2003, the components of accumulated earnings/(deficit)
applicable to common shareholders on a tax basis were as follows:
Undistributed net tax exempt income $ 1,045,613
Accumulated capital and other losses (23,830,825)(b)
Unrealized appreciation/(depreciation) 4,930,830(c)
Total accumulated earnings/(deficit) $ (17,854,382)
(a) Total distributions paid differ from the statement of changes in net
assets applicable to common shareholders because for tax purposes dividends are
recognized when actually paid.
(b) On October 31, 2003, the Fund had a net capital loss carryforward of
$23,830,825 of which $6,475,518 expires in the year 2007, $10,294,946 expires
in the year 2008, $1,971,343 expires in the year 2010, and $5,089,018 expires
in the year 2011. To the extent future capital gains are offset by capital loss
carryforward, such gains will not be distributed. During the current fiscal
year, $9,919,727 of the capital loss carryforward expired unutilized.
(c) The difference between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral of
losses on wash sales.
-------------------------------------------------------------------------------
ACM Municipal Securities Income Fund o 17
NOTE E
Common Stock
There are 99,996,400 shares of $0.01 par value common stock authorized. There
are 11,107,575 shares of common stock outstanding at April 30, 2004. During the
six months ended April 30, 2004 and the year ended October 31, 2003, the Fund
issued 32,955 and 73,818 shares, respectively, in connection with the Fund's
dividend reinvestment plan.
NOTE F
Preferred Stock
The Fund has issued and outstanding 3,600 shares of Auction Preferred Stock,
consisting of 1,200 shares each of Series A, Series B and Series C. The
preferred shares have a liquidation value of $25,000 per share plus
accumulated, unpaid dividends.
The dividend rate on Series A is 1.323%, effective through March 9, 2005. The
dividend rate on Series B is 1.07%, effective through May 3, 2004. The dividend
rate on Series C is 1.00%, effective through May 6, 2004.
At certain times, the Preferred Shares are redeemable by the Fund, in whole or
in part, at $25,000 per share plus accumulated, unpaid dividends.
Although the Fund will not ordinarily redeem the Preferred Shares, it may be
required to redeem shares if, for example, the Fund does not meet an asset
coverage ratio required by law or to correct a failure to meet a rating agency
guideline in a timely manner. The Fund voluntarily may redeem the Preferred
Shares in certain circumstances.
The Preferred Shareholders, voting as a separate class, have the right to elect
at least two Directors at all times and to elect a majority of the Directors in
the event two years' dividends on the Preferred Shares are unpaid. In each
case, the remaining Directors will be elected by the Common Shareholders and
Preferred Shareholders voting together as a single class. The Preferred
Shareholders will vote as a separate class on certain other matters as required
under the Fund's Charter, the Investment Company Act of 1940 and Maryland law.
NOTE G
Risks Involved in Investing in the Fund
Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes
in interest rates will affect the value of the Fund's investments in
fixed-income debt securities such as bonds or notes. Increases in interest
rates may cause the value of the Fund's investments to decline. Credit risk is
the risk that the issuer or guarantor of a debt security, or the counterparty
to a derivative contract, will be
-------------------------------------------------------------------------------
18 o ACM Municipal Securities Income Fund
unable or unwilling to make timely principal and/or interest payments, or to
otherwise honor its obligations. The degree of risk for a particular security
may be reflected in its credit risk rating. Credit risk is greater for medium
quality and lower-rated securities. Lower-rated debt securities and similar
unrated securities (commonly known as "junk bonds") have speculative elements
or are predominantly speculative risks.
In the ordinary course of business, the Fund enters into contracts that contain
a variety of indemnifications. The Fund's maximum exposure under these
arrangements is unknown. However, the Fund has not had prior claims or losses
pursuant to these indemnification provisions and expects the risk of loss
thereunder to be remote.
NOTE H
Legal Proceedings
As has been previously reported in the press, the Staff of the U.S. Securities
and Exchange Commission ("SEC") and the Office of the New York Attorney General
("NYAG") have been investigating practices in the mutual fund industry
identified as "market timing" and "late trading" of mutual fund shares. Certain
other regulatory authorities have also been conducting investigations into
these practices within the industry and have requested that Alliance Capital
Management L.P. ("Alliance Capital"), the Fund's Adviser, provide information
to them. Alliance Capital has been cooperating and will continue to cooperate
with all of these authorities. The shares of the Fund are not redeemable by the
Fund, but are traded on an exchange at prices established by the market.
Accordingly, the Fund and its shareholders are not subject to the market timing
and late trading practices that are the subject of the investigations mentioned
above or the lawsuits described below. Please see below for a description of
the agreements reached by Alliance Capital and the SEC and NYAG in connection
with the investigations mentioned above.
In addition, numerous lawsuits have been filed against Alliance Capital and
certain other defendants in which plaintiffs make claims purportedly based on
or related to the same practices that are the subject of the SEC and NYAG
investigations referred to above. Some of these lawsuits name the Fund as a
party. Management of the Fund's Adviser believes that these private lawsuits
are not likely to have a material adverse effect on the results of operations
or financial condition of the Fund.
On December 18, 2003, Alliance Capital confirmed that it had reached terms with
the SEC and the NYAG for the resolution of regulatory claims relating to the
practice of "market timing" mutual fund shares in some of the AllianceBernstein
Mutual Funds. The agreement with the SEC is reflected in an
-------------------------------------------------------------------------------
ACM Municipal Securities Income Fund o 19
Order of the Commission ("SEC Order"). The agreement with the NYAG is subject
to final, definitive documentation. Among the key provisions of these
agreements are the following:
(i) Alliance Capital agreed to establish a $250 million fund (the
"Reimbursement Fund") to compensate mutual fund shareholders for the adverse
effects of market timing attributable to market timing relationships described
in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be
paid, in order of priority, to fund investors based on (i) their aliquot share
of losses suffered by the fund due to market timing, and (ii) a proportionate
share of advisory fees paid by such fund during the period of such market
timing;
(ii) Alliance Capital agreed to reduce the advisory fees it receives from
some of the AllianceBernstein long-term, open-end retail funds, commencing
January 1, 2004, for a period of at least five years; and
(iii) Alliance Capital agreed to implement changes to its governance and
compliance procedures. Additionally, the SEC Order contemplates that Alliance
Capital's registered investment company clients, including the Fund, will
introduce governance and compliance changes.
The shares of the Fund are not redeemable by the Fund, but are traded on an
exchange at prices established by the market. Accordingly, the Fund and its
shareholders are not subject to the market timing practices described in the
SEC Order and are not expected to participate in the Reimbursement Fund. Since
the Fund is a closed-end fund, it will not have its advisory fee reduced
pursuant to the terms of the above.
-------------------------------------------------------------------------------
20 o ACM Municipal Securities Income Fund
FINANCIAL HIGHLIGHTS
Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
Financial Highlights
Six Months
Ended
April 30, Year Ended October 31,
2004 ----------------------------------------------------
(unaudited) 2003 2002 2001 2000 1999
------------------------------------------------------------------------
Net asset value,
beginning of period $ 11.05 $ 10.85 $ 12.10 $ 11.71 $ 11.64 $ 13.49
Income From Investment
Operations
Net investment income .45 .97 1.08 1.15 1.12 1.11
Net realized and unrealized
gain (loss) on investment
transactions (.06) .12 (1.32) .45 .16 (1.82)
Dividends to preferred
shareholders from
net investment income
(common stock equivalent
basis) (.04) (.09) (.14) (.27) (.34) (.27)
Net increase (decrease) in net
asset value from operations .35 1.00 (.38) 1.33 .94 (.98)
Less: Dividends and
Distributions to
Common Shareholders
Dividends from net
investment income (.44) (.80) (.87) (.88) (.78) (.84)
Distributions in excess of
net investment income -0- -0- -0- (.06) (.09) (.03)
Total dividends and distributions
to common shareholders (.44) (.80) (.87) (.94) (.87) (.87)
Net asset value, end of period $ 10.96 $ 11.05 $ 10.85 $ 12.10 $ 11.71 $ 11.64
Market value, end of period $ 11.55 $ 11.62 $ 11.50 $ 12.70 $ 12.56 $ 11.69
Premium 5.38% 5.16% 5.99% 4.96% 7.26% .43%
Total Return
Total investment return based on:(a)
Market value 3.21% 8.53% (2.44)% 9.14% 16.16% (11.14)%
Net asset value 2.99% 9.39% (3.35)% 11.59% 8.74% (7.76)%
Ratios/Supplemental Data
Net assets, applicable to common
shareholders, end of period
(000's omitted) $121,699 $122,322 $119,323 $132,201 $127,142 $125,850
Preferred stock, at redemption
value ($25,000 per share
liquidation preference)
(000's omitted) $90,000 $90,000 $90,000 $90,000 $90,000 $90,000
Ratios to average net assets
applicable to common
shareholders of:
Expenses(b) 1.62%(c) 1.71% 1.65% 1.53% 1.61% 1.45%
Net investment income, before
preferred stock dividends(b) 7.94%(c) 8.78% 9.32% 9.60% 9.92% 8.54%
Preferred stock dividends .70%(c) .84% 1.19% 2.26% 3.03% 2.08%
Net investment income, net of
preferred stock dividends 7.24%(c) 7.94% 8.13% 7.34% 6.89% 6.46%
Portfolio turnover rate 16% 32% 24% 82% 360% 292%
Asset coverage ratio 235% 236% 233% 247% 241% 240%
See footnote summary on page 22.
-------------------------------------------------------------------------------
ACM Municipal Securities Income Fund o 21
(a) 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
purposes of this calculation, to be reinvested at prices obtained under the
Fund's 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 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 the
period. Total investment return calculated for a period of less than one year
is not annualized.
(b) These expense and net investment income ratios do not reflect the effect
of dividend payments to preferred shareholders.
(c) Annualized.
-------------------------------------------------------------------------------
22 o ACM Municipal Securities Income Fund
SUPPLEMENTAL PROXY INFORMATION
(unaudited)
Supplemental Proxy Information
A Joint Annual Meeting of Shareholders of ACMMunicipal Securities Income Fund,
Inc. was held on March 25, 2004. The description of each proposal and number of
shares voted at the meeting are as follows:
Authority
Voted For Withheld
1. To elect directors Class One Nominees
(terms expire in 2007)
John H. Dobkin 9,377,795 148,562
Clifford L. Michel 9,381,097 145,260
Donald J. Robinson 9,374,145 152,212
Class Three Nominee
(terms expire in 2006)
Marc O. Mayer 9,384,445 141,912
-------------------------------------------------------------------------------
ACM Municipal Securities Income Fund o 23
BOARD OF DIRECTORS
William H. Foulk, Jr.(1), Chairman
Marc O. Mayer, President
Ruth Block(1)
David H. Dievler(1)
John H. Dobkin(1)
Dr. James M. Hester(1)
Clifford L. Michel(1)
Donald J. Robinson(1)
OFFICERS
Robert B. Davidson, III, Senior Vice President
David M. Dowden(2), Vice President
Terrance T. Hults(2), Vice President
Mark R. Manley, Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Thomas R. Manley, Controller
Administrator
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, NY 10105
Sub-Administrator
Prudential Investments LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Common Stock: Dividend Paying Agent,
Transfer Agent and Registrar
Equiserve Trust Company N.A.
P.O. Box 43011
Providence, RI 02940-3011
Preferred Stock: Dividend Paying Agent,
Transfer Agent and Registrar
The Bank of New York
100 Church Street
New York, NY 10286
Independent Auditors
Ernst & Young LLP
5 Times Square
New York, NY 10036-6530
Custodian
The Bank of New York
One Wall Street
New York, NY 10286
Notice is hereby given in accordance with Section 23(c) of the Investment
CompanyAct of 1940 that the Fund may purchase at market prices from time to
time shares of its Common Stock in the open market.
This report, including the financial statements therein, is transmitted to the
shareholders of ACM Municipal Securities Income Fund for their information.This
is not a prospectus, circular or representation intended for use in the
purchase of shares of the Fund or any securities mentioned in the report.
(1) Member of the Audit Committee.
(2) Messrs. Dowden and Hults are the persons primarily responsible for the
day-to-day management of the Fund's investment portfolio.
-------------------------------------------------------------------------------
24 o ACM Municipal Securities Income Fund
ALLIANCEBERNSTEIN FAMILY OF FUNDS
AllianceBernstein Family of Funds
Wealth Strategies Funds
Balanced Wealth Strategy
Wealth Appreciation Strategy
Wealth Preservation Strategy
Tax-Managed Balanced Wealth Strategy*
Tax-Managed Wealth Appreciation Strategy
Tax-Managed Wealth Preservation Strategy**
Blended Style Funds
U.S. Large Cap Portfolio
International Portfolio
Tax-Managed International Portfolio
Growth Funds
Domestic
Growth Fund
Health Care Fund
Mid-Cap Growth Fund
Premier Growth Fund
Small Cap Growth Fund
Technology Fund
Global & International
All-Asia Investment Fund
Global Research Growth Fund
Global Small Cap Fund
Greater China '97 Fund
International Premier Growth Fund
New Europe Fund
Worldwide Privatization Fund
Select Investor Series
Biotechnology Portfolio
Premier Portfolio
Technology Portfolio
Value Funds
Domestic
Balanced Shares
Disciplined Value Fund
Growth & Income Fund
Real Estate Investment Fund
Small Cap Value Fund
Utility Income Fund
Value Fund
Global & International
Global Value Fund
International Value Fund
Taxable Bond Funds
Americas Government Income Trust
Corporate Bond Portfolio
Emerging Market Debt Fund
Global Strategic Income Trust
High Yield Fund
Multi-Market Strategy Trust
Quality Bond Portfolio
Short Duration Portfolio
U.S. Government Portfolio
Municipal Bond Funds
National
Insured National
Arizona
California
Insured California
Florida
Massachusetts
Michigan
Minnesota
New Jersey
New York
Ohio
Pennsylvania
Virginia
Intermediate Municipal Bond Funds
Intermediate California
Intermediate Diversified
Intermediate New York
Closed-End Funds
All-Market Advantage Fund
ACM Income Fund
ACM Government Opportunity Fund
ACM Managed Dollar Income Fund
ACM Managed Income Fund
ACM Municipal Securities Income Fund
California Municipal Income Fund
National Municipal Income Fund
New York Municipal Income Fund
The Spain Fund
World Dollar Government Fund
World Dollar Government Fund II
We also offer Exchange Reserves,+ which serves as the money market fund
exchange vehicle for the AllianceBernstein mutual funds.
For more complete information on any AllianceBernstein mutual fund, including
investment objectives and policies, sales charges, expenses, risks and other
matters of importance to prospective investors, visit our web site at
www.alliancebernstein.com or call us at (800) 227-4618 for a current
prospectus. Please read the prospectus carefully before you invest or send
money.
* Formerly Growth Investors Fund.
** Formerly Conservative Investors Fund.
+ An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the Fund.
-------------------------------------------------------------------------------
ACM Municipal Securities Income Fund o 25
SUMMARY OF GENERAL INFORMATION
Shareholder Information
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction Section of newspapers each day, under the
designation "ACMMSI." The Fund's NYSEtrading symbol is "AMU." Weekly
comparative net asset value (NAV) and market price information about the Fund
is published each Monday in The Wall Street Journal, each Sunday in The New
York Times and each Saturday in Barron's and other newspapers in a table called
"Closed-End Bond Funds."
Dividend Reinvestment Plan
A Dividend Reinvestment Plan provides automatic reinvestment of dividends and
capital gains in additional Fund shares.
For questions concerning shareholder account information, or if you would like
a brochure describing the Dividend Reinvestment Plan, please call Equiserve
Trust Company at (800) 219-4218.
-------------------------------------------------------------------------------
26 o ACM Municipal Securities Income Fund
NOTES
-------------------------------------------------------------------------------
ACM Municipal Securities Income Fund o 27
NOTES
-------------------------------------------------------------------------------
28 o ACM Municipal Securities Income Fund
ACM MUNICIPAL SECURITIES INCOME FUND
1345 Avenue of the Americas
New York, NY 10105
(800) 221-5672
[LOGO] ALLIANCEBERNSTEIN (SM)
Investment Research and Management
(SM) This service mark used under license from
the owner, Alliance Capital Management L.P.
MSISR0404
ITEM 2. CODE OF ETHICS.
Not applicable when filing a Semi-Annual report to shareholders.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable when filing a Semi-Annual report to shareholders.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable when filing a Semi-Annual report to shareholders.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable when filing a Semi-Annual report to shareholders.
ITEM 6. SCHEDULE OF INVESTMENTS.
Form N-CSR disclosure requirement not yet effective with respect to the
registrant.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable when filing a Semi-Annual report to shareholders.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Form N-CSR disclosure requirement not yet effective with respect to the
registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the Fund's Board of Directors since the Fund last provided
disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule
14A in its proxy statement filed with the Commission on February 23, 2004.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and procedures
(as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as
amended) are effective at the reasonable assurance level based on their
evaluation of these controls and procedures as of a date within 90 days
of the filing date of this document.
(b) There were no significant changes in the registrant's internal controls
that could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 11. EXHIBITS.
The following exhibits are attached to this Form N-CSR:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
11 (b) (1) Certification of Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
11 (b) (2) Certification of Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
11 (c) Certification of Principal Executive Officer and Principal
Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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.
(Registrant): ACM Municipal Securities Income Fund, Inc.
By: /s/Marc O. Mayer
--------------------------------
Marc O. Mayer
President
Date: June 30, 2004
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/Marc O. Mayer
--------------------------------
Marc O. Mayer
President
Date: June 30, 2004
By: /s/Mark D. Gersten
-------------------------------
Mark D. Gersten
Treasurer and Chief Financial Officer
Date: June 30, 2004