Eaton Vance Municipal Bond Fund

 

 

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: 811-21142

 

 

Eaton Vance Municipal Bond Fund

(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)

September 30

Date of Fiscal Year End

March 31, 2014

Date of Reporting Period

 

 

 


Item 1. Reports to Stockholders


LOGO

 

 

Eaton Vance

Municipal Bond Funds

Semiannual Report

March 31, 2014

 

 

 

Municipal (EIM)    •    California (EVM)    •     New York (ENX)    

 

LOGO


 

 

Commodity Futures Trading Commission Registration. Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to regulation by the CFTC if a fund invests more than a prescribed level of its assets in certain CFTC-regulated instruments (including futures, certain options and swap agreements) or markets itself as providing investment exposure to such instruments. Each Fund has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act. Accordingly, neither the Funds nor the adviser with respect to the operation of the Funds is subject to CFTC regulation. Because of its management of other strategies, each Fund’s adviser is registered with the CFTC as a commodity pool operator and a commodity trading advisor.

Fund shares are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Shares are subject to investment risks, including possible loss of principal invested.


Semiannual Report March 31, 2014

Eaton Vance

Municipal Bond Funds

Table of Contents

 

Performance and Fund Profile

  
  

Municipal Bond Fund

     2   

California Municipal Bond Fund

     3   

New York Municipal Bond Fund

     4   
  

Endnotes and Additional Disclosures

     5   

Financial Statements

     6   

Officers and Trustees

     35   

Important Notices

     36   


Eaton Vance

Municipal Bond Fund

March 31, 2014

 

Performance1,2

 

Portfolio Manager Cynthia J. Clemson

 

% Average Annual Total Returns    Inception Date      Six Months      One Year      Five Years      Ten Years  

Fund at NAV

     08/30/2002         9.10      –0.47      11.93      5.46

Fund at Market Price

             6.23         –7.77         9.09         4.85   

Barclays Long (22+) Year Municipal Bond Index

             5.97      –0.82      8.14      4.90
              
% Premium/Discount to NAV3                                        
                 –8.33
              
Distributions4                                        

Total Distributions per share for the period

                 $0.383   

Distribution Rate at NAV

                 5.91

Taxable-Equivalent Distribution Rate at NAV

                 10.44

Distribution Rate at Market Price

                 6.45

Taxable-Equivalent Distribution Rate at Market Price

                 11.40
              
% Total Leverage5                                        

Residual Interest Bond (RIB)

                 40.98

Fund Profile

 

 

 

LOGO

The above chart includes the ratings of securities held by special purpose vehicles established in connection with the RIB financing.5 Absent such securities, credit quality (% of total investments) is as follows:6

 

AAA

    11.0   

BB

    0.6

AA

    64.9      

B

    0.3   

A

    18.4      

Not Rated

    0.6   

BBB

    4.2        

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and includes management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month end, please refer to eatonvance.com.

 

  2  


Eaton Vance

California Municipal Bond Fund

March 31, 2014

 

Performance1,2

 

Portfolio Manager Craig R. Brandon, CFA

 

% Average Annual Total Returns    Inception Date      Six Months      One Year      Five Years      Ten Years  

Fund at NAV

     08/30/2002         8.80      –0.08      9.95      4.55

Fund at Market Price

             8.44         –5.57         8.02         3.54   

Barclays Long (22+) Year Municipal Bond Index

             5.97      –0.82      8.14      4.90
              
% Premium/Discount to NAV3                                        
                 –10.54
              
Distributions4                                        

Total Distributions per share for the period

                 $0.327   

Distribution Rate at NAV

                 5.39

Taxable-Equivalent Distribution Rate at NAV

                 10.98

Distribution Rate at Market Price

                 6.02

Taxable-Equivalent Distribution Rate at Market Price

                 12.27
              
% Total Leverage5                                        

RIB

                 41.39

Fund Profile

 

 

 

LOGO

The above chart includes the ratings of securities held by special purpose vehicles established in connection with the RIB financing.5 Absent such securities, credit quality (%of total investments) is as follows:6

 

AAA

    8.9   

BBB

    3.8

AA

    62.7      

Not Rated

    2.9   

A

    21.7        

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and includes management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month end, please refer to eatonvance.com.

 

  3  


Eaton Vance

New York Municipal Bond Fund

March 31, 2014

 

Performance1,2

 

Portfolio Manager Craig R. Brandon, CFA

 

% Average Annual Total Returns    Inception Date      Six Months      One Year      Five Years      Ten Years  

Fund at NAV

     08/30/2002         7.12      –0.90      9.46      4.93

Fund at Market Price

             7.01         –9.30         7.66         3.93   

Barclays Long (22+) Year Municipal Bond Index

             5.97      –0.82      8.14      4.90
              
% Premium/Discount to NAV3                                        
                 –9.51
              
Distributions4                                        

Total Distributions per share for the period

                 $0.344   

Distribution Rate at NAV

                 5.19

Taxable-Equivalent Distribution Rate at NAV

                 10.06

Distribution Rate at Market Price

                 5.74

Taxable-Equivalent Distribution Rate at Market Price

                 11.12
              
% Total Leverage5                                        

RIB

                 40.66

Fund Profile

 

 

 

LOGO

The above chart includes the ratings of securities held by special purpose vehicles established in connection with the RIB financing.5 Absent such securities, credit quality (% of total investments) is as follows:6

 

AAA

    20.0   

BBB

    5.8

AA

    52.8      

BB

    0.5   

A

    19.4      

Not Rated

    1.5   

 

See Endnotes and Additional Disclosures in this report.

Past performance is no guarantee of future results. Returns are historical and are calculated by determining the percentage change in net asset value (NAV) or market price (as applicable) with all distributions reinvested and includes management fees and other expenses. Fund performance at market price will differ from its results at NAV due to factors such as changing perceptions about the Fund, market conditions, fluctuations in supply and demand for Fund shares, or changes in Fund distributions. Investment return and principal value will fluctuate so that shares, when sold, may be worth more or less than their original cost. Performance less than one year is cumulative. Performance is for the stated time period only; due to market volatility, current Fund performance may be lower or higher than the quoted return. For performance as of the most recent month end, please refer to eatonvance.com.

 

  4  


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Endnotes and Additional Disclosures

 

 

1 

Barclays Long (22+) Year Municipal Bond Index is an unmanaged index of municipal bonds traded in the U.S. with maturities of 22 years or more. Unless otherwise stated, index returns do not reflect the effect of any applicable sales charges, commissions, expenses, taxes or leverage, as applicable. It is not possible to invest directly in an index.

 

2 

Performance results reflect the effects of leverage. Performance since inception for an index, if presented, is the performance since the Fund’s or oldest share class’ inception, as applicable.

 

3

The shares of the Fund often trade at a discount or premium from their net asset value. The discount or premium of the Fund may vary over time and may be higher or lower than what is quoted in this report. For up-to-date premium/discount information, please refer to http://eatonvance.com/closedend.

 

4 

The Distribution Rate is based on the Fund’s last regular distribution per share in the period (annualized) divided by the Fund’s NAV or market price at the end of the period. The Fund’s distributions may be comprised of amounts characterized for federal income tax purposes as tax-exempt income, ordinary income and net realized capital gains. The Fund will determine the federal income tax character of distributions paid to a shareholder after the end of the calendar year. This is reported on the IRS form 1099-DIV and provided to the shareholder shortly after each year-end. For information about the tax character of distributions made in prior calendar years, please refer to Performance-Tax Character of Distributions on the Fund’s webpage available at eatonvance.com. The Fund’s distributions are determined by the investment adviser based on its current assessment of the Fund’s long-term return potential. As portfolio and market conditions change, the rate of distributions paid by the Fund could change. Taxable-equivalent performance is based on the highest combined federal and state income tax rates, where applicable. Lower tax rates would result in lower tax-equivalent performance. Actual tax rates will vary depending on your income, exemptions and deductions. Rates do not include local taxes.

5 

Fund employs RIB financing. The leverage created by RIB investments provides an opportunity for increased income but, at the same time, creates special risks (including the likelihood of greater price volatility). The cost of leverage rises and falls with changes in short-term interest rates. See “Floating Rate Notes Issued in Conjunction with Securities Held” in the notes to the financial statements for more information about RIB financing. RIB leverage represents the amount of Floating Rate Notes outstanding at period end as a percentage of Fund net assets plus Floating Rate Notes.

 

6 

Ratings are based on Moody’s, S&P or Fitch, as applicable. If securities are rated differently by the rating agencies, the higher rating is applied. Ratings, which are subject to change, apply to the creditworthiness of the issuers of the underlying securities and not to the Fund or its shares. Credit ratings measure the quality of a bond based on the issuer’s creditworthiness, with ratings ranging from AAA, being the highest, to D, being the lowest based on S&P’s measures. Ratings of BBB or higher by S&P or Fitch (Baa or higher by Moody’s) are considered to be investment grade quality. Credit ratings are based largely on the rating agency’s analysis at the time of rating. The rating assigned to any particular security is not necessarily a reflection of the issuer’s current financial condition and does not necessarily reflect its assessment of the volatility of a security’s market value or of the liquidity of an investment in the security. Holdings designated as “Not Rated” are not rated by the national rating agencies stated above.

 

  Fund profile subject to change due to active management.

 

  Important Notices to Shareholders

 

  Effective March 3, 2014, the Municipal Bond Fund is managed by Cynthia J. Clemson.

 

  Effective January 1, 2014, the California Municipal Bond Fund is managed by Craig R. Brandon, CFA.
 

 

Information About Share Repurchase Program

On November 11, 2013, the Fund’s Boards of Trustees approved a share repurchase program authorizing each Fund to repurchase up to 10% of its currently outstanding common shares in open-market transactions at a discount to net asset value (NAV). From the date the Funds listed below began repurchasing shares until March 31, 2014, such Fund has purchased the number and percentage of its outstanding shares and seen the changes in its market price and discount to NAV as set forth in the table below. For more information on each Fund’s share repurchase program, please see Note 5 in the Funds’ Notes to Financial Statements.

 

   Fund   No. of Shares
Repurchased 
 

%

Shares
Repurchased1 

 

Beginning 

Market

Price2

 

3/31/14 

Market 

Price

 

%

Market

Return3 

 

Beginning 

NAV

Discount2 

 

3/31/14

NAV

Discount 

 

Discount

Change

   California Municipal Bond Fund

  200,000   0.92%   $10.60   $10.86   3.48%   –11.00%   –10.54%   –0.46%

   New York Municipal Bond Fund

  178,700   1.12%   $11.66   $11.99   3.81%   –10.65%   –9.51%   –1.14%
 

1 % Shares Repurchased is based on the number of shares outstanding on November 11, 2013. 2 Beginning Market Price and Beginning NAV Discount are as of the close of the market on the business day preceding the Fund’s first share repurchase. 3 % Market Return reflects the change in the market price of the Fund shares plus any distributions paid during the period but not reflecting the reinvestment of distributions.

 

 

  5  


Eaton Vance

Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited)

 

 

Tax-Exempt Municipal Securities — 167.7%   
   
Security   Principal
Amount
(000’s omitted)
    Value  

Education — 16.8%

               

California Educational Facilities Authority, (University of Southern California), 5.25%, 10/1/38(1)

  $ 9,750      $ 10,903,230   

Connecticut Health and Educational Facilities Authority, (Wesleyan University), 5.00%, 7/1/39(1)

    14,700        15,820,581   

Houston, TX, Higher Education Finance Corp., (St. John’s School), 5.25%, 9/1/33

    3,985        4,239,721   

Houston, TX, Higher Education Finance Corp., (William Marsh Rice University), 5.00%, 5/15/35(1)

    15,000        16,848,900   

Massachusetts Health and Educational Facilities Authority, (Boston College), 5.50%, 6/1/27

    5,810        7,171,690   

Massachusetts Health and Educational Facilities Authority, (Boston College), 5.50%, 6/1/30

    8,325        10,175,564   

Massachusetts Health and Educational Facilities Authority, (Harvard University), 5.00%, 10/1/38(1)

    2,000        2,209,700   

Massachusetts Health and Educational Facilities Authority, (Harvard University), 5.50%, 11/15/36

    8,790        10,144,803   

New York Dormitory Authority, (Rockefeller University), 5.00%, 7/1/40(1)

    15,300        16,486,209   

North Carolina Capital Facilities Finance Agency, (Duke University), 5.00%, 10/1/38(1)

    13,500        14,766,030   

Tennessee School Bond Authority, 5.50%, 5/1/38

    5,000        5,519,050   

University of California, 5.25%, 5/15/39

    4,450        5,015,283   

University of Colorado, (University Enterprise Revenue),
5.25%, 6/1/36(1)

    10,000        11,070,200   

University of Massachusetts Building Authority, 5.00%, 11/1/39(1)

    14,175        15,372,646   

University of North Carolina at Charlotte, 5.00%, 4/1/32

    2,090        2,300,212   
                 
  $ 148,043,819   
                 

Electric Utilities — 4.2%

  

JEA St. Johns River Power Park System Revenue, FL, 4.00%, 10/1/32(1)

  $ 10,000      $ 10,069,900   

Pima County, AZ, Industrial Development Authority, (Tucson Electric Power Co.), 5.25%, 10/1/40

    10,000        10,344,600   

South Carolina Public Service Authority, (Santee Cooper), 5.50%, 1/1/38

    7,110        7,912,790   

Utility Debt Securitization Authority, NY, 5.00%, 12/15/35

    4,500        5,025,645   

Wyandotte County/Kansas City, KS, Unified Government Board of Public Utilities, 5.00%, 9/1/36

    3,425        3,634,918   
                 
  $ 36,987,853   
                 

General Obligations — 14.2%

  

Bloomfield Hills Schools, MI, 4.00%, 5/1/37

  $ 750      $ 754,815   

California, 5.00%, 12/1/30

    7,390        8,263,202   
Security   Principal
Amount
(000’s omitted)
    Value  

General Obligations (continued)

  

Chicago Park District, IL, (Harbor Facilities), 5.25%, 1/1/37(1)

  $ 8,320      $ 8,686,579   

City & County of San Francisco, CA, (Earthquake Safety & Emergency Response), 4.00%, 6/15/27

    4,080        4,270,862   

Clark County, NV, 5.00%, 7/1/33

    4,500        4,910,760   

Delaware Valley, PA, Regional Finance Authority, 5.75%, 7/1/32

    3,000        3,384,870   

Hawaii, 5.00%, 12/1/29

    7,620        8,686,267   

Hawaii, 5.00%, 12/1/30

    6,500        7,262,905   

Klein, TX, Independent School District, (PSF Guaranteed), 5.00%, 2/1/36(1)

    2,000        2,173,860   

Mississippi, 5.00%, 10/1/30(1)

    10,000        11,223,700   

Mississippi, 5.00%, 10/1/36(1)

    12,075        13,214,880   

New York, NY, 5.00%, 10/1/32

    10,000        10,906,400   

Northside Independent School District, TX, (PSF Guaranteed), 5.00%, 6/15/35

    180        191,923   

Northside Independent School District, TX, (PSF Guaranteed), 5.00%, 6/15/35(1)

    12,250        13,061,440   

Oregon, 5.00%, 8/1/35(1)

    6,750        7,415,618   

Oregon, 5.00%, 8/1/36

    2,000        2,179,640   

Port of Houston Authority of Harris County, TX, 5.00%, 10/1/35

    7,500        8,238,150   

Washington, 4.00%, 7/1/28(1)

    10,000        10,472,100   
                 
  $ 125,297,971   
                 

Hospital — 9.7%

  

California Health Facilities Financing Authority, (Catholic Healthcare West), 5.25%, 3/1/27

  $ 1,000      $ 1,087,970   

California Health Facilities Financing Authority, (Catholic Healthcare West), 5.25%, 3/1/28

    1,770        1,914,697   

California Health Facilities Financing Authority, (Cedars-Sinai Medical Center), 5.00%, 8/15/39

    11,570        11,920,687   

Camden County, NJ, Improvement Authority, (Cooper Health System), 5.00%, 2/15/35

    2,520        2,520,706   

Camden County, NJ, Improvement Authority, (Cooper Health System), 5.25%, 2/15/27

    860        865,547   

Camden County, NJ, Improvement Authority, (Cooper Health System), 5.75%, 2/15/34

    4,535        4,576,405   

Hawaii Department of Budget and Finance, (Hawaii Pacific Health), 5.50%, 7/1/38

    2,790        3,005,555   

Highlands County, FL, Health Facilities Authority, (Adventist Health System), 5.25%, 11/15/36

    7,190        7,607,092   

Knox County, TN, Health, Educational and Housing Facilities Board, (Covenant Health), 0.00%, 1/1/38

    8,310        1,956,257   

Knox County, TN, Health, Educational and Housing Facilities Board, (Covenant Health), 0.00%, 1/1/41

    10,000        1,950,900   
 

 

  6   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited) — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  

Hospital (continued)

  

Michigan Hospital Finance Authority, (Henry Ford Health System), 5.25%, 11/15/46

  $ 5,355      $ 5,355,696   

New Jersey Health Care Facilities Financing Authority, (Robert Wood Johnson University Hospital), 5.25%, 7/1/35

    4,385        4,706,815   

Ohio Higher Educational Facility Commission, (Cleveland Clinic Health System), 5.00%, 1/1/32

    10,950        11,904,730   

Tarrant County, TX, Cultural Education Facilities Finance Corp., (Scott & White Healthcare), 5.25%, 8/15/40

    6,105        6,373,071   

West Virginia Hospital Finance Authority, (West Virginia United Health System Obligated Group), 5.375%, 6/1/38

    7,605        8,141,152   

Wisconsin Health & Educational Facilities Authority, (Ascension Health Alliance Senior Credit Group), 5.00%, 11/15/41

    35        36,704   

Wisconsin Health & Educational Facilities Authority, (Ascension Health Alliance Senior Credit Group),
5.00%, 11/15/41(1)

    11,500        12,059,820   
                 
  $ 85,983,804   
                 

Industrial Development Revenue — 0.5%

  

Maricopa County, AZ, Pollution Control Corp., (El Paso Electric Co.), 4.50%, 8/1/42

  $ 4,245      $ 4,090,015   
                 
  $ 4,090,015   
                 

Insured – Education — 3.1%

  

Massachusetts Development Finance Agency, (College of the Holy Cross), (AMBAC), 5.25%, 9/1/32

  $ 15,900      $ 18,874,890   

Miami-Dade County, FL, Educational Facilities Authority, (University of Miami), (AMBAC), (BHAC), 5.00%, 4/1/31

    7,865        8,399,427   
                 
  $ 27,274,317   
                 

Insured – Electric Utilities — 4.1%

  

American Municipal Power-Ohio, Inc., OH, (Prairie State Energy Campus), (AGC), 5.75%, 2/15/39

  $ 5,000      $ 5,389,350   

Louisiana Energy and Power Authority, (AGM), 5.25%, 6/1/38

    4,905        5,287,394   

Mississippi Development Bank, (Municipal Energy), (XLCA), 5.00%, 3/1/41

    13,895        14,049,929   

Paducah, KY, Electric Plant Board, (AGC), 5.25%, 10/1/35

    2,735        2,967,557   

South Carolina Public Service Authority, (Santee Cooper), (BHAC), 5.50%, 1/1/38

    7,840        8,806,515   
                 
    $ 36,500,745   
                 
Security   Principal
Amount
(000’s omitted)
    Value  

Insured – Escrowed / Prerefunded — 2.1%

  

Centre County, PA, Hospital Authority, (Mount Nittany Medical Center), (AGC), Prerefunded to 11/15/14, 6.125%, 11/15/39

  $ 3,950      $ 4,097,375   

Centre County, PA, Hospital Authority, (Mount Nittany Medical Center), (AGC), Prerefunded to 11/15/14, 6.25%, 11/15/44

    1,050        1,089,984   

Schaumburg, IL, (BHAC), (FGIC), Prerefunded to 12/01/14, 5.00%, 12/1/38(1)

    12,750        13,163,987   
                 
    $ 18,351,346   
                 

Insured – General Obligations — 8.7%

  

Cincinnati, OH, City School District, (AGM), (FGIC), 5.25%, 12/1/30

  $ 3,750      $ 4,475,813   

Clark County, NV, (AMBAC),
2.50%, 11/1/36

    11,845        8,609,538   

Frisco, TX, Independent School District, (AGM), (PSF Guaranteed), 2.75%, 8/15/39

    9,530        7,930,294   

Kane, Cook and DuPage Counties, IL, School District No. 46, (AMBAC), 0.00%, 1/1/22

    29,750        23,137,467   

King County, WA, Public Hospital District No. 1, (AGC), 5.00%, 12/1/37(1)

    7,000        7,234,570   

Palm Springs, CA, Unified School District, (AGC), 5.00%, 8/1/32

    8,955        9,791,576   

Port Arthur, TX, Independent School District, (AGC), 4.75%, 2/15/38

    95        98,818   

Port Arthur, TX, Independent School District, (AGC), 4.75%, 2/15/38(1)

    10,950        11,390,081   

Yuma and La Paz Counties, AZ, Community College District, (Arizona Western College), (NPFG), 3.75%, 7/1/31

    4,275        4,278,035   
                 
    $ 76,946,192   
                 

Insured – Hospital — 16.0%

  

Arizona Health Facilities Authority, (Banner Health), (BHAC), 5.375%, 1/1/32

  $ 8,250      $ 8,784,270   

California Statewide Communities Development Authority, (Sutter Health), (AGM), 5.05%, 8/15/38(1)

    11,000        11,296,450   

Colorado Health Facilities Authority, (Catholic Health), (AGM), 5.10%, 10/1/41(1)

    11,500        11,788,420   

Highlands County, FL, Health Facilities Authority, (Adventist Health System), (BHAC), 5.25%, 11/15/36(1)

    15,500        16,583,760   

Highlands County, FL, Health Facilities Authority, (Adventist Health System), (NPFG), 5.00%, 11/15/35

    3,795        3,858,946   

Illinois Finance Authority, (Children’s Memorial Hospital), (AGC), 5.25%, 8/15/47(1)

    15,000        15,369,444   

Indiana Health and Educational Facility Finance Authority, (Sisters of St. Francis Health Services), (AGM), 5.25%, 5/15/41(1)

    2,500        2,573,350   
 

 

  7   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited) — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  

Insured – Hospital (continued)

  

Iowa Finance Authority, Health Facilities, (Iowa Health System), (AGC), 5.625%, 8/15/37

  $ 2,625      $ 2,902,961   

Maricopa County, AZ, Industrial Development Authority, (Catholic Healthcare West), (BHAC), 5.25%, 7/1/32

    1,675        1,801,848   

Maryland Health and Higher Educational Facilities Authority, (LifeBridge Health), (AGC), 4.75%, 7/1/47(1)

    19,150        18,915,987   

New Jersey Health Care Facilities Financing Authority, (Meridian Health System), Series II, (AGC), 5.00%, 7/1/38

    535        555,266   

New Jersey Health Care Facilities Financing Authority, (Meridian Health System), Series V, (AGC), 5.00%, 7/1/38(1)

    3,200        3,321,216   

New Jersey Health Care Facilities Financing Authority, (Virtua Health), (AGC), 5.50%, 7/1/38

    13,115        13,852,981   

Washington Health Care Facilities Authority, (MultiCare Health System), (AGC), 6.00%, 8/15/39

    5,795        6,328,024   

Washington Health Care Facilities Authority, (Providence Health Care), Series C, (AGM), 5.25%, 10/1/33(1)

    8,700        9,549,816   

Washington Health Care Facilities Authority, (Providence Health Care), Series D, (AGM), 5.25%, 10/1/33(1)

    12,605        13,836,126   
                 
    $ 141,318,865   
                 

Insured – Industrial Development Revenue — 1.1%

  

Pennsylvania Economic Development Financing Authority, (Aqua Pennsylvania, Inc.), (BHAC), 5.00%, 10/1/39(1)

  $ 9,000      $ 9,605,160   
                 
    $ 9,605,160   
                 

Insured – Lease Revenue / Certificates of Participation — 4.9%

  

New Jersey Economic Development Authority, (School Facilities Construction), (AGC), 5.50%, 12/15/34

  $ 2,910      $ 3,258,909   

San Diego County, CA, Water Authority, Certificates of Participation, (AGM), 5.00%, 5/1/38(1)

    24,000        26,035,920   

Tri-Creek Middle School Building Corp., IN, (AGM), 5.25%, 1/15/34(1)

    13,000        13,636,480   
                 
    $ 42,931,309   
                 

Insured – Other Revenue — 4.4%

  

Golden State Tobacco Securitization Corp., CA, (AGC), 5.00%, 6/1/45(1)

  $ 25,875      $ 25,906,567   

Harris County-Houston, TX, Sports Authority, (NPFG), 0.00%, 11/15/34

    16,795        4,885,666   

New York, NY, Industrial Development Agency, (Yankee Stadium), (AGC), 7.00%, 3/1/49

    6,750        7,887,105   
                 
    $ 38,679,338   
                 
Security   Principal
Amount
(000’s omitted)
    Value  

Insured – Solid Waste — 0.6%

  

Palm Beach County, FL, Solid Waste Authority, (BHAC), 5.00%, 10/1/24

  $ 2,760      $ 3,192,713   

Palm Beach County, FL, Solid Waste Authority, (BHAC), 5.00%, 10/1/26

    1,575        1,814,510   
                 
    $ 5,007,223   
                 

Insured – Special Tax Revenue — 6.1%

  

Alabama Public School and College Authority, (AGM), 2.50%, 12/1/27

  $ 15,975      $ 14,184,043   

Houston, TX, Hotel Occupancy Tax, (AMBAC), 0.00%, 9/1/24

    18,035        11,441,404   

Miami-Dade County, FL, Professional Sports Franchise Facilities, (AGC), 7.00%, (0.00% until 10/1/19), 10/1/39

    15,000        13,152,900   

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

    28,945        3,693,382   

Utah Transportation Authority, Sales Tax Revenue, (AGM), 4.75%, 6/15/32(1)

    10,800        11,618,532   
                 
    $ 54,090,261   
                 

Insured – Student Loan — 0.8%

  

Maine Educational Loan Authority, (AGC), 5.625%, 12/1/27

  $ 6,830      $ 7,412,667   
                 
    $ 7,412,667   
                 

Insured – Transportation — 21.9%

  

Chicago, IL, (O’Hare International Airport), (AGM), 4.75%, 1/1/34(1)

  $ 21,640      $ 21,812,254   

Chicago, IL, (O’Hare International Airport), (AGM), 5.00%, 1/1/28

    2,500        2,710,750   

Chicago, IL, (O’Hare International Airport), (AGM), 5.00%, 1/1/29

    1,000        1,076,600   

Chicago, IL, (O’Hare International Airport), (AGM), 5.125%, 1/1/30

    1,800        1,946,088   

Chicago, IL, (O’Hare International Airport), (AGM), 5.125%, 1/1/31

    1,570        1,693,810   

Chicago, IL, (O’Hare International Airport), (AGM), 5.25%, 1/1/32

    1,015        1,100,422   

Chicago, IL, (O’Hare International Airport), (AGM), 5.25%, 1/1/33

    1,150        1,240,643   

Clark County, NV, (Las Vegas-McCarran International Airport), (AGM), 5.25%, 7/1/39

    8,080        8,591,626   

Director of the State of Nevada Department of Business and Industry, (Las Vegas Monorail), (AMBAC), 0.00%, 1/1/23(2)

    10,070        1,344,244   

Director of the State of Nevada Department of Business and Industry, (Las Vegas Monorail), (AMBAC), 0.00%, 1/1/28(2)

    3,100        307,179   
 

 

  8   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited) — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  

Insured – Transportation (continued)

  

Director of the State of Nevada Department of Business and Industry, (Las Vegas Monorail), (AMBAC), 5.375%, 1/1/40(3)

  $ 15,000      $ 3,596,850   

E-470 Public Highway Authority, CO, (NPFG), 0.00%, 9/1/21

    10,200        7,718,952   

E-470 Public Highway Authority, CO, (NPFG), 0.00%, 9/1/39

    25,000        5,731,250   

Harris County, TX, Toll Road, Senior Lien, (BHAC), (NPFG), 5.00%, 8/15/33(1)

    7,800        8,424,780   

Manchester, NH, (Manchester-Boston Regional Airport), (AGM), 5.125%, 1/1/30

    6,710        7,100,120   

Maryland Transportation Authority, (AGM), 5.00%, 7/1/35(1)

    20,995        22,834,581   

Maryland Transportation Authority, (AGM), 5.00%, 7/1/36(1)

    14,000        15,176,980   

Metropolitan Washington, D.C., Airports Authority, (BHAC), 5.00%, 10/1/29

    1,785        1,968,195   

New Jersey Transportation Trust Fund Authority, (AGC), 5.50%, 12/15/38

    11,700        13,080,834   

North Carolina Turnpike Authority, (Triangle Expressway System), (AGC), 5.50%, 1/1/29

    1,015        1,116,358   

North Carolina Turnpike Authority, (Triangle Expressway System), (AGC), 5.75%, 1/1/39

    1,160        1,263,959   

North Texas Tollway Authority, (BHAC), 5.75%, 1/1/48(1)

    20,000        22,369,200   

Port Authority of New York and New Jersey, (AGM), 5.00%, 8/15/26(1)

    10,000        11,202,600   

Port Palm Beach District, FL, (XLCA), 0.00%, 9/1/24

    1,605        842,834   

Port Palm Beach District, FL, (XLCA), 0.00%, 9/1/25

    1,950        957,294   

Port Palm Beach District, FL, (XLCA), 0.00%, 9/1/26

    1,000        459,100   

San Joaquin Hills Transportation Corridor Agency, CA, (Toll Road Bonds), (NPFG), 0.00%, 1/15/25

    26,215        14,514,983   

Texas Turnpike Authority, (AMBAC), 0.00%, 8/15/20

    15,845        13,222,653   
                 
    $ 193,405,139   
                 

Insured – Water and Sewer — 16.4%

  

Austin, TX, Water and Wastewater, (AGM), (BHAC), 5.00%, 11/15/33(1)

  $ 2,000      $ 2,145,660   

Bossier City, LA, Utilities Revenue, (BHAC), 5.25%, 10/1/26

    3,185        3,566,945   

Bossier City, LA, Utilities Revenue, (BHAC), 5.25%, 10/1/27

    1,985        2,224,947   

Bossier City, LA, Utilities Revenue, (BHAC), 5.50%, 10/1/38

    3,170        3,532,363   

Chicago, IL, Wastewater Transmission Revenue, (BHAC), 5.50%, 1/1/38

    3,060        3,358,319   

Chicago, IL, Wastewater Transmission Revenue, (NPFG), 0.00%, 1/1/23

    13,670        9,927,154   

DeKalb County, GA, Water and Sewer, (AGM), 5.25%, 10/1/32(1)

    10,000        11,469,800   

Detroit, MI, Water Supply System, (NPFG), 5.00%, 7/1/34

    8,680        8,285,755   

District of Columbia Water and Sewer Authority, (AGC), 5.00%, 10/1/34(1)

    8,500        9,241,625   

Houston, TX, Utility System, (AGM), (BHAC), 5.00%, 11/15/33(1)

    27,570        29,909,865   
Security   Principal
Amount
(000’s omitted)
    Value  

Insured – Water and Sewer (continued)

  

Massachusetts Water Resources Authority, (AGM), 5.25%, 8/1/32

  $ 5,540      $ 6,671,323   

Massachusetts Water Resources Authority, (AGM), 5.25%, 8/1/38

    1,070        1,273,963   

Massachusetts Water Resources Authority, (AMBAC), (BHAC), 4.00%, 8/1/40

    9,095        9,111,644   

New York, NY, Municipal Water Finance Authority, (BHAC), 5.75%, 6/15/40(1)

    9,500        10,698,995   

San Luis Obispo County, CA, (Nacimiento Water Project), (NPFG), 4.50%, 9/1/40

    3,535        3,532,172   

Seattle, WA, Drain and Wastewater Revenue, (AGM), 5.00%, 6/1/38(1)

    27,670        29,552,667   
                 
    $ 144,503,197   
                 

Lease Revenue / Certificates of Participation — 1.6%

  

Hudson Yards Infrastructure Corp., NY, 5.75%, 2/15/47

  $ 2,565      $ 2,821,295   

North Carolina, Capital Improvement Limited Obligation Bonds, 5.00%, 5/1/30

    335        371,706   

North Carolina, Capital Improvement Limited Obligation Bonds, 5.00%, 5/1/30(1)

    10,000        11,095,700   
                 
    $ 14,288,701   
                 

Other Revenue — 3.0%

  

New York, NY, Transitional Finance Authority, Building Aid Revenue, 5.00%, 7/15/36(1)

  $ 10,750      $ 11,517,980   

Oregon Department of Administrative Services, Lottery Revenue, 5.25%, 4/1/30

    9,200        10,470,244   

Texas Municipal Gas Acquisition and Supply Corp. III, Gas Supply Revenue, 5.00%, 12/15/29

    3,135        3,219,394   

Texas Municipal Gas Acquisition and Supply Corp. III, Gas Supply Revenue, 5.00%, 12/15/30

    1,700        1,739,644   
                 
    $ 26,947,262   
                 

Senior Living / Life Care — 0.1%

  

Maryland Health and Higher Educational Facilities Authority, (Charlestown Community, Inc.), 6.125%, 1/1/30

  $ 1,175      $ 1,276,450   
                 
    $ 1,276,450   
                 

Special Tax Revenue — 8.7%

  

Connecticut, Special Tax Obligation, (Transportation Infrastructure), 5.00%, 1/1/31(1)

  $ 20,000      $ 22,251,200   

Michigan Trunk Line Fund, 5.00%, 11/15/30

    1,390        1,522,050   

Michigan Trunk Line Fund, 5.00%, 11/15/31

    1,500        1,634,145   

Michigan Trunk Line Fund, 5.00%, 11/15/33

    1,285        1,382,198   

Michigan Trunk Line Fund, 5.00%, 11/15/36

    1,020        1,092,981   
 

 

  9   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited) — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  

Special Tax Revenue (continued)

  

New York City Transitional Finance Authority, Future Tax Revenue, 5.00%, 2/1/37(1)

  $ 20,000      $ 21,520,600   

New York Dormitory Authority, Personal Income Tax Revenue, 5.00%, 6/15/31

    10,000        11,041,700   

New York Dormitory Authority, Sales Tax Revenue, 5.00%, 3/15/34

    3,285        3,598,783   

New York Dormitory Authority, Sales Tax Revenue, 5.00%, 3/15/35

    12,040        13,132,630   
                 
    $ 77,176,287   
                 

Transportation — 10.6%

  

Dallas and Fort Worth, TX, (Dallas/Fort Worth International Airport), 5.25%, 11/1/30

  $ 3,205      $ 3,601,298   

Dallas and Fort Worth, TX, (Dallas/Fort Worth International Airport), 5.25%, 11/1/31

    4,950        5,528,160   

Delaware River Port Authority of Pennsylvania and New Jersey, 5.00%, 1/1/35

    8,275        8,776,548   

Los Angeles, CA, Department of Airports, (Los Angeles International Airport), 5.25%, 5/15/28

    3,285        3,743,750   

Metropolitan Transportation Authority, NY, 5.25%, 11/15/38

    4,640        4,987,629   

Metropolitan Transportation Authority, NY, 5.25%, 11/15/40

    6,735        7,185,908   

Miami-Dade County, FL, (Miami International Airport), 5.00%, 10/1/41

    10,825        11,124,095   

New Jersey Transportation Trust Fund Authority, (Transportation System), 5.00%, 12/15/24

    10,000        11,551,000   

Orlando-Orange County, FL, Expressway Authority, Series A, 5.00%, 7/1/35

    2,915        3,049,178   

Orlando-Orange County, FL, Expressway Authority, Series A, 5.00%, 7/1/40

    2,590        2,690,440   

Pennsylvania Turnpike Commission, 6.00%, (0.00% until 12/1/15), 12/1/34

    5,000        5,078,200   

Port Authority of New York and New Jersey, 5.00%, 12/1/34(1)

    14,360        15,858,753   

Port Authority of New York and New Jersey, 5.00%, 7/15/39

    5,000        5,290,950   

Triborough Bridge and Tunnel Authority, NY, 5.00%, 11/15/33

    5,000        5,477,900   
                 
    $ 93,943,809   
                 

Water and Sewer — 8.1%

  

California Department of Water Resources, (Central Valley Project), 5.25%, 12/1/35(1)

  $ 10,000      $ 11,407,000   

Charleston, SC, Waterworks and Sewer Revenue, 5.00%, 1/1/35

    2,735        2,982,162   

Chicago, IL, Water Revenue, 5.00%, 11/1/42

    5,000        5,106,500   

Detroit, MI, Sewage Disposal System, 5.00%, 7/1/32

    1,070        1,016,457   

Detroit, MI, Sewage Disposal System, 5.25%, 7/1/39

    1,965        1,866,102   

Detroit, MI, Water Supply System, 5.25%, 7/1/41

    2,910        2,758,534   
Security   Principal
Amount
(000’s omitted)
    Value  

Water and Sewer (continued)

  

Honolulu, HI, City and County Wastewater System,
5.25%, 7/1/36(1)

  $ 9,750      $ 10,732,020   

King County, WA, Sewer Revenue,
5.00%, 1/1/34(1)

    10,000        10,853,600   

Marco Island, FL, Utility System, 5.00%, 10/1/34

    1,445        1,526,570   

Marco Island, FL, Utility System, 5.00%, 10/1/40

    6,325        6,615,697   

New York, NY, Municipal Water Finance Authority, 5.00%, 6/15/31

    10,000        10,990,200   

Portland, OR, Water System, 5.00%, 5/1/36

    5,385        5,854,249   
   
    $ 71,709,091   
   

Total Tax-Exempt Municipal Securities — 167.7%
(identified cost $1,415,611,400)

   

  $ 1,481,770,821   
   
Corporate Bonds & Notes — 0.0%(4)   
   
Security   Principal
Amount
(000’s omitted)
    Value  

Transportation — 0.0%(4)

  

Las Vegas Monorail Co., Jr. Subordinated Notes,
3.00% to 12/31/15, 5.50%, 7/15/55(5)(6)

  $ 125      $ 16,704   

Las Vegas Monorail Co., Sr. Secured Notes, 5.50%, 7/15/19(5)(6)

    445        80,031   
                 

Total Corporate Bonds & Notes — 0.0%(4)
(identified cost $28,339)

   

  $ 96,735   
   

Total Investments — 167.7%
(identified cost $1,415,639,739)

   

  $ 1,481,867,556   
   

Other Assets, Less Liabilities — (67.7)%

  

  $ (598,225,634
   

Net Assets — 100.0%

  

  $ 883,641,922   
   

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

 

AGC     Assured Guaranty Corp.
AGM     Assured Guaranty Municipal Corp.
AMBAC     AMBAC Financial Group, Inc.
BHAC     Berkshire Hathaway Assurance Corp.
FGIC     Financial Guaranty Insurance Company
NPFG     National Public Finance Guaranty Corp.
PSF     Permanent School Fund
XLCA     XL Capital Assurance, Inc.

 

 

 

  10   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited) — continued

 

 

At March 31, 2014, the concentration of the Fund’s investments in the various states, determined as a percentage of total investments, is as follows:

 

Texas      11.9%   
New York      11.9%   
California      10.1%   
Others, representing less than 10% individually      66.1%   

The Fund invests primarily in debt securities issued by 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 March 31, 2014, 53.7% 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 20.9% of total investments.

 

(1) 

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

 

(2) 

Defaulted security. Issuer has defaulted on the payment of interest or has filed for bankruptcy.

 

(3) 

Security is in default and making only partial interest payments.

 

(4) 

Amount is less than 0.05%.

 

(5) 

For fair value measurement disclosure purposes, security is categorized as Level 3 (see Note 9).

 

(6) 

Represents a payment-in-kind security which may pay all or a portion of interest in additional principal.

 

 

  11   See Notes to Financial Statements.


Eaton Vance

California Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited)

 

 

Tax-Exempt Investments — 167.1%    
   
Security   Principal
Amount
(000’s omitted)
    Value  
   

Education — 15.5%

  

California Educational Facilities Authority, (California Institute of Technology), 5.00%, 11/1/39(1)

  $ 10,000      $ 10,799,200   

California Educational Facilities Authority, (Claremont McKenna College), 5.00%, 1/1/27

    2,680        2,957,246   

California Educational Facilities Authority, (Harvey Mudd College), 5.25%, 12/1/31

    550        605,077   

California Educational Facilities Authority, (Harvey Mudd College), 5.25%, 12/1/36

    940        1,019,129   

California Educational Facilities Authority, (Loyola Marymount University), 5.00%, 10/1/30

    1,375        1,453,059   

California Educational Facilities Authority, (Santa Clara University), 5.00%, 2/1/29

    3,630        3,965,920   

California Educational Facilities Authority, (University of San Francisco), 6.125%, 10/1/36

    650        760,123   

California Educational Facilities Authority, (University of Southern California), 5.25%, 10/1/39

    6,200        6,933,336   

California Educational Facilities Authority, (University of the Pacific), 5.00%, 11/1/30

    1,790        1,950,617   

California Municipal Finance Authority, (University of San Diego), 5.00%, 10/1/31

    1,175        1,252,444   

California Municipal Finance Authority, (University of San Diego), 5.00%, 10/1/35

    800        836,360   

California Municipal Finance Authority, (University of San Diego), 5.25%, 10/1/26

    2,270        2,521,766   

California Municipal Finance Authority, (University of San Diego), 5.25%, 10/1/27

    2,395        2,647,744   

California Municipal Finance Authority, (University of San Diego), 5.25%, 10/1/28

    2,520        2,772,907   
                 
    $ 40,474,928   
                 

Electric Utilities — 1.8%

  

Southern California Public Power Authority, (Tieton Hydropower), 5.00%, 7/1/35

  $ 1,890      $ 2,042,636   

Vernon, Electric System Revenue, 5.125%, 8/1/21

    2,375        2,613,545   
                 
    $ 4,656,181   
                 

General Obligations — 33.5%

  

Burbank Unified School District, (Election of 2013), 4.00%, 8/1/31(1)

  $ 6,900      $ 7,026,339   

California, 5.50%, 11/1/35

    4,600        5,239,538   

Contra Costa Community College District, (Election of 2006), 5.00%, 8/1/38

    20        21,763   

Contra Costa Community College District, (Election of 2006), 5.00%, 8/1/38(1)

    9,750        10,609,657   
Security   Principal
Amount
(000’s omitted)
    Value  
   

General Obligations (continued)

  

Foothill-De Anza Community College District, 5.00%, 8/1/36(1)

  $ 10,000      $ 10,851,200   

Palo Alto, (Election of 2008), 5.00%, 8/1/40(1)

    7,020        7,582,162   

San Bernardino Community College District, 4.00%, 8/1/27(1)

    5,775        6,021,304   

San Diego Community College District, (Election of 2002), 5.00%, 8/1/32

    1,375        1,513,394   

San Diego Community College District, (Election of 2006), 5.00%, 8/1/31

    2,545        2,811,563   

San Francisco Bay Area Rapid Transit District, (Election of 2004), 5.00%, 8/1/35

    5,000        5,405,000   

San Jose-Evergreen Community College District, (Election of 2010), 5.00%, 8/1/33

    1,910        2,095,900   

San Jose-Evergreen Community College District, (Election of 2010), 5.00%, 8/1/35

    2,230        2,430,299   

San Jose-Evergreen Community College District, (Election of 2010), 5.00%, 8/1/37(1)

    4,975        5,359,070   

Santa Monica-Malibu Unified School District, (Election 2006),
4.50%, 7/1/36(1)

    12,000        12,606,360   

Torrance Unified School District, (Election of 2008), 5.00%, 8/1/35

    7,500        8,088,075   
                 
    $ 87,661,624   
                 

Hospital — 14.8%

  

California Health Facilities Financing Authority, (Catholic Healthcare West), 5.25%, 7/1/23

  $ 2,000      $ 2,018,780   

California Health Facilities Financing Authority, (Catholic Healthcare West), 5.25%, 3/1/27

    1,750        1,903,948   

California Health Facilities Financing Authority, (Catholic Healthcare West), 5.25%, 3/1/28

    550        594,963   

California Health Facilities Financing Authority, (Cedars-Sinai Medical Center), 5.00%, 8/15/39

    4,505        4,641,547   

California Health Facilities Financing Authority, (City of Hope), 5.00%, 11/15/32

    1,795        1,901,892   

California Health Facilities Financing Authority, (City of Hope), 5.00%, 11/15/35

    2,565        2,693,096   

California Health Facilities Financing Authority, (St. Joseph Health System), 5.00%, 7/1/33

    4,480        4,803,590   

California Health Facilities Financing Authority, (St. Joseph Health System), 5.00%, 7/1/37

    2,100        2,225,055   

California Health Facilities Financing Authority, (Sutter Health), 5.25%, 8/15/31(1)

    5,000        5,484,000   

California Statewide Communities Development Authority, (John Muir Health), 5.00%, 8/15/34

    2,170        2,250,116   

Torrance, (Torrance Memorial Medical Center), 5.50%, 6/1/31

    3,950        3,955,964   

Washington Township Health Care District, 5.00%, 7/1/32

    3,165        3,176,046   

Washington Township Health Care District, 5.25%, 7/1/29

    3,005        3,006,262   
                 
    $ 38,655,259   
                 
 

 

  12   See Notes to Financial Statements.


Eaton Vance

California Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited) — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  
   

Insured – Education — 7.3%

  

California State University, (AGM), (BHAC), 5.00%, 11/1/39(1)

  $ 8,250      $ 8,946,878   

University of California, (AGM), 4.50%, 5/15/26(1)

    3,095        3,248,914   

University of California, (AGM), 4.50%, 5/15/28(1)

    6,690        6,976,332   
                 
    $ 19,172,124   
                 

Insured – Electric Utilities — 16.1%

  

Anaheim Public Financing Authority, (Electric System District), (BHAC), (NPFG), 4.50%, 10/1/32(1)

  $ 20,000      $ 20,754,999   

Glendale, Electric System Revenue, (AGC), 5.00%, 2/1/31

    2,240        2,368,106   

Los Angeles Department of Water and Power, Electric System Revenue, (AMBAC), (BHAC), 5.00%, 7/1/26(1)

    6,750        7,508,700   

Northern California Power Agency, (Hydroelectric), (AGC), 5.00%, 7/1/24

    2,000        2,259,320   

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/34

    3,840        3,479,578   

Sacramento Municipal Utility District, (AGM), 5.00%, 8/15/27

    1,000        1,114,430   

Sacramento Municipal Utility District, (AMBAC), (BHAC), 5.25%, 7/1/24

    4,000        4,673,080   
                 
    $ 42,158,213   
                 

Insured – General Obligations — 21.9%

  

Antelope Valley Community College District, (Election of 2004), (NPFG), 5.25%, 8/1/39

  $ 4,175      $ 4,540,814   

Burbank Unified School District, (Election of 1997), (NPFG), 0.00%, 8/1/21

    4,135        3,355,056   

Coast Community College District, (Election of 2002), (AGM), 0.00%, 8/1/34

    23,150        7,782,799   

Palm Springs Unified School District, (Election of 2008), (AGC), 5.00%, 8/1/33

    4,500        4,891,545   

Riverside Community College District, (Election of 2004), (AGM), (NPFG), 5.00%, 8/1/32

    5,705        6,159,517   

San Diego Community College District, (Election of 2006), (AGM), 5.00%, 8/1/32(1)

    6,100        6,594,100   

San Diego Unified School District, (NPFG), 0.00%, 7/1/22

    2,300        1,766,492   

San Diego Unified School District, (NPFG), 0.00%, 7/1/23

    5,000        3,652,200   

San Juan Unified School District, (AGM), 0.00%, 8/1/21

    5,630        4,522,072   

San Mateo County, Community College District, (NPFG), 0.00%, 9/1/22

    4,840        3,789,962   

San Mateo County, Community College District, (NPFG), 0.00%, 9/1/23

    4,365        3,248,084   

San Mateo County, Community College District, (NPFG), 0.00%, 9/1/25

    3,955        2,656,415   

San Mateo Union High School District, (NPFG), 0.00%, 9/1/21

    5,240        4,317,865   
                 
    $ 57,276,921   
                 
Security   Principal
Amount
(000’s omitted)
    Value  
   

Insured – Hospital — 7.1%

  

California Health Facilities Financing Authority, (Cedars-Sinai Medical Center), (BHAC), 5.00%, 11/15/34

  $ 2,205      $ 2,314,611   

California Statewide Communities Development Authority, (Kaiser Permanente), (BHAC),
5.00%, 4/1/31(1)

    10,000        10,667,500   

California Statewide Communities Development Authority, (Kaiser Permanente), (BHAC),
5.00%, 3/1/41(1)

    3,500        3,666,460   

California Statewide Communities Development Authority, (Sutter Health), (AMBAC), (BHAC), 5.00%, 11/15/38(1)

    2,000        2,054,220   
                 
    $ 18,702,791   
                 

Insured – Lease Revenue / Certificates of Participation — 4.1%

  

San Diego County Water Authority, Certificates of Participation, (AGM), 5.00%, 5/1/38(1)

  $ 10,000      $ 10,848,300   
                 
    $ 10,848,300   
                 

Insured – Special Tax Revenue — 12.7%

  

Ceres, Redevelopment Agency Tax, (AMBAC), 4.00%, 11/1/36

  $ 7,765      $ 6,594,581   

Hesperia Public Financing Authority, (Redevelopment and Housing Projects), (XLCA), 5.00%, 9/1/31

    595        573,086   

Hesperia Public Financing Authority, (Redevelopment and Housing Projects), (XLCA), 5.00%, 9/1/37

    7,240        6,757,164   

Pomona, Public Financing Authority, (NPFG), 5.00%, 2/1/33

    5,940        5,942,614   

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

    15,020        1,916,552   

San Jose Redevelopment Agency, (Merged Area Redevelopment Project), (XLCA), 4.25%, 8/1/36

    3,680        3,324,402   

Santa Clara Valley Transportation Authority, Sales Tax Revenue, (AMBAC), 5.00%, 4/1/32(1)

    7,500        8,047,725   
                 
    $ 33,156,124   
                 

Insured – Transportation — 2.1%

  

San Joaquin Hills, Transportation Corridor Agency, (NPFG), 0.00%, 1/15/30

  $ 3,445      $ 1,364,014   

San Jose, Airport Revenue, (AMBAC), 5.00%, 3/1/33

    1,885        1,926,187   

San Jose, Airport Revenue, (AMBAC), 5.00%, 3/1/37

    2,040        2,072,803   
                 
    $ 5,363,004   
                 

Insured – Water and Sewer — 10.1%

  

Calleguas Las Virgines Public Financing Authority, (Municipal Water District), (BHAC), (FGIC), 4.75%, 7/1/37(1)

  $ 7,000      $ 7,188,160   

East Bay Municipal Utility District, Water System Revenue, (AGM), (FGIC), 5.00%, 6/1/32

    345        371,347   

East Bay Municipal Utility District, Water System Revenue, (NPFG), 5.00%, 6/1/32(1)

    6,500        6,996,405   
 

 

  13   See Notes to Financial Statements.


Eaton Vance

California Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited) — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  
   

Insured – Water and Sewer (continued)

  

Riverside, Water System Revenue, (AGM), 5.00%, 10/1/38

  $ 1,595      $ 1,726,811   

San Luis Obispo County, (Nacimiento Water Project), (BHAC), (NPFG), 5.00%, 9/1/38

    5,000        5,204,250   

San Luis Obispo County, (Nacimiento Water Project), (NPFG), 4.50%, 9/1/40

    2,750        2,747,800   

Santa Clara Valley Water District, (AGM), 3.75%, 6/1/28

    2,075        2,102,162   
                 
    $ 26,336,935   
                 

Lease Revenue / Certificates of Participation — 1.0%

  

California Public Works Board, 5.00%, 11/1/38

  $ 2,565      $ 2,709,871   
                 
    $ 2,709,871   
                 

Special Tax Revenue — 5.3%

  

Riverside County Transportation Commission, Sales Tax Revenue, 5.25%, 6/1/39(1)

  $ 6,285      $ 6,981,931   

San Francisco Bay Area Rapid Transportation District, Sales Tax Revenue, 5.00%, 7/1/36(1)

    6,250        6,825,125   
                 
    $ 13,807,056   
                 

Transportation — 8.3%

  

Bay Area Toll Authority, Toll Bridge Revenue, (San Francisco Bay Area), 5.25%, 4/1/29(1)

  $ 6,500      $ 7,419,880   

Long Beach, Harbor Revenue, 5.00%, 5/15/27

    1,960        2,183,518   

Los Angeles Department of Airports, (Los Angeles International Airport), 5.00%, 5/15/35(1)

    7,500        8,071,200   

San Francisco City and County Airport Commission, (San Francisco International Airport), 5.00%, 5/1/35

    2,190        2,299,303   

San Jose, Airport Revenue, 5.00%, 3/1/31

    1,750        1,841,263   
                 
    $ 21,815,164   
                 

Water and Sewer — 5.5%

  

Beverly Hills Public Financing Authority, Water Revenue, 5.00%, 6/1/37(1)

  $ 5,725      $ 6,392,592   

Los Angeles, Wastewater System Revenue, 5.00%, 6/1/43(1)

    7,500        8,097,300   
                 
    $ 14,489,892   
                 

Total Tax-Exempt Investments — 167.1%
(identified cost $416,390,527)

   

  $ 437,284,387   
                 

Other Assets, Less Liabilities — (67.1)%

  

  $ (175,602,610
                 

Net Assets — 100.0%

  

  $ 261,681,777   
                 

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

 

AGC     Assured Guaranty Corp.
AGM     Assured Guaranty Municipal Corp.
AMBAC     AMBAC Financial Group, Inc.
BHAC     Berkshire Hathaway Assurance Corp.
FGIC     Financial Guaranty Insurance Company
NPFG     National Public Finance Guaranty Corp.
XLCA     XL Capital Assurance, Inc.

The Fund invests primarily in debt securities issued by California 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 March 31, 2014, 48.7% 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 1.7% to 18.7% of total investments.

 

(1) 

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

 

 

  14   See Notes to Financial Statements.


Eaton Vance

New York Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited)

 

 

Tax-Exempt Investments — 166.8%   
   
Security   Principal
Amount
(000’s omitted)
    Value  
   

Bond Bank — 4.9%

  

New York Environmental Facilities Corp., 5.00%, 10/15/39

  $ 3,360      $ 3,628,934   

New York Environmental Facilities Corp., Clean Water and Drinking Water, (Municipal Water Finance), 5.00%, 10/15/35

    50        53,639   

New York Environmental Facilities Corp., Clean Water and Drinking Water, (Municipal Water Finance), 5.00%, 10/15/35(1)

    6,100        6,543,897   
   
    $ 10,226,470   
   

Education — 29.4%

  

Geneva Development Corp., (Hobart and William Smith Colleges), 5.00%, 9/1/30

  $ 200      $ 219,590   

Geneva Development Corp., (Hobart and William Smith Colleges), 5.00%, 9/1/32

    1,330        1,436,546   

Geneva Development Corp., (Hobart and William Smith Colleges), 5.00%, 9/1/32

    200        216,948   

Geneva Development Corp., (Hobart and William Smith Colleges), 5.00%, 9/1/33

    105        113,382   

Geneva Development Corp., (Hobart and William Smith Colleges), 5.00%, 9/1/34

    200        214,990   

Hempstead Local Development Corp., (Adelphi University), 5.00%, 6/1/20

    760        879,335   

Hempstead Local Development Corp., (Adelphi University), 5.00%, 6/1/21

    950        1,098,191   

Hempstead Local Development Corp., (Adelphi University), 5.00%, 6/1/31

    800        850,656   

Hempstead Local Development Corp., (Adelphi University), 5.00%, 6/1/32

    300        317,079   

Monroe County Industrial Development Corp., (St. John Fisher College), 5.00%, 6/1/23

    405        446,756   

New York City Cultural Resource Trust, (The Juilliard School), 5.00%, 1/1/39

    240        259,942   

New York City Cultural Resource Trust, (The Juilliard School), 5.00%, 1/1/39(1)

    10,000        10,830,900   

New York Dormitory Authority, (Columbia University), 5.00%, 10/1/41(1)

    10,000        10,875,600   

New York Dormitory Authority, (Cornell University), 5.00%, 7/1/37(1)

    5,700        6,255,408   

New York Dormitory Authority, (New York University), 5.00%, 7/1/39(1)

    10,000        10,889,300   

New York Dormitory Authority, (Rochester Institute of Technology), 5.00%, 7/1/40

    2,000        2,149,440   

New York Dormitory Authority, (Rockefeller University), 5.00%, 7/1/40

    500        538,765   

New York Dormitory Authority, (Rockefeller University),
5.00%, 7/1/40(1)

    2,700        2,909,331   
Security   Principal
Amount
(000’s omitted)
    Value  
   

Education (continued)

  

New York Dormitory Authority, (Skidmore College), 5.00%, 7/1/26

  $ 1,175      $ 1,300,431   

New York Dormitory Authority, (Skidmore College), 5.25%, 7/1/30

    250        274,180   

New York Dormitory Authority, (The New School), 5.50%, 7/1/40

    5,250        5,643,802   

Onondaga County Cultural Resources Trust, (Syracuse University), 5.00%, 12/1/38

    3,305        3,580,042   
   
    $ 61,300,614   
   

Electric Utilities — 2.6%

  

Puerto Rico Electric Power Authority, 5.25%, 7/1/31

  $ 3,615      $ 2,220,441   

Utility Debt Securitization Authority, 5.00%, 12/15/33

    2,895        3,255,920   
   
    $ 5,476,361   
   

General Obligations — 11.2%

  

Long Beach City School District, 4.50%, 5/1/26

  $ 4,715      $ 5,069,804   

New York City, 5.00%, 8/1/34(1)

    8,650        9,377,378   

New York, 5.00%, 2/15/34(1)

    7,250        7,888,072   

Peekskill, 5.00%, 6/1/35

    465        488,213   

Peekskill, 5.00%, 6/1/36

    490        513,883   
   
    $ 23,337,350   
   

Hospital — 10.5%

  

New York Dormitory Authority, (Highland Hospital of Rochester), 5.00%, 7/1/26

  $ 620      $ 678,509   

New York Dormitory Authority, (Highland Hospital of Rochester), 5.20%, 7/1/32

    820        864,608   

New York Dormitory Authority, (Memorial Sloan-Kettering Cancer Center), 4.375%, 7/1/34(1)

    9,325        9,640,372   

New York Dormitory Authority, (North Shore-Long Island Jewish Obligated Group), 5.00%, 5/1/20

    1,065        1,223,887   

New York Dormitory Authority, (North Shore-Long Island Jewish Obligated Group), 5.00%, 5/1/26

    2,055        2,145,934   

Suffolk County Economic Development Corp., (Catholic Health Services of Long Island Obligated Group), 5.00%, 7/1/28

    6,900        7,267,977   
   
    $ 21,821,287   
   

Housing — 1.7%

  

New York Housing Development Corp., 4.95%, 11/1/39

  $ 2,500      $ 2,572,825   

New York Mortgage Agency, 3.55%, 10/1/33

    1,000        934,310   
   
    $ 3,507,135   
   
 

 

  15   See Notes to Financial Statements.


Eaton Vance

New York Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited) — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  
   

Industrial Development Revenue — 1.0%

  

New York Liberty Development Corp., (Goldman Sachs Group, Inc.), 5.25%, 10/1/35

  $ 490      $ 540,656   

New York Liberty Development Corp., (Goldman Sachs Group, Inc.), 5.50%, 10/1/37

    1,440        1,626,091   
   
    $ 2,166,747   
   

Insured – Education — 18.3%

  

New York Dormitory Authority, (City University), (AMBAC), 5.50%, 7/1/35

  $ 925      $ 994,514   

New York Dormitory Authority, (Educational Housing Services CUNY Student Housing), (AMBAC),
5.25%, 7/1/23

    1,750        1,966,615   

New York Dormitory Authority, (Fordham University), (AGC), (BHAC), 5.00%, 7/1/38(1)

    10,750        11,335,875   

New York Dormitory Authority, (Pratt Institute), (AGC), 5.00%, 7/1/34

    1,555        1,632,019   

New York Dormitory Authority, (Pratt Institute), (AGC), 5.125%, 7/1/39

    2,405        2,519,646   

New York Dormitory Authority, (St. John’s University), (NPFG), 5.25%, 7/1/37

    3,750        3,890,700   

New York Dormitory Authority, (State University), (BHAC), 5.00%, 7/1/38(1)

    8,500        8,963,250   

Oneida County Industrial Development Agency, (Hamilton College), (NPFG), 0.00%, 7/1/34

    5,555        2,234,610   

Oneida County Industrial Development Agency, (Hamilton College), (NPFG), 0.00%, 7/1/36

    8,455        3,090,810   

Oneida County Industrial Development Agency, (Hamilton College), (NPFG), 0.00%, 7/1/37

    4,000        1,395,200   
   
    $ 38,023,239   
   

Insured – Electric Utilities — 6.3%

  

Long Island Power Authority, Electric System Revenue, (BHAC), 5.75%, 4/1/33

  $ 5,000      $ 5,758,750   

New York Power Authority, (BHAC), (NPFG), 4.50%, 11/15/47(1)

    7,210        7,341,078   
   
    $ 13,099,828   
   

Insured – Escrowed / Prerefunded — 5.6%

  

Madison County Industrial Development Agency, (Colgate University), (NPFG), Prerefunded to 7/1/14, 5.00%, 7/1/39

  $ 4,000      $ 4,048,840   

New York City, (AGM), Prerefunded to 4/1/16, 5.00%, 4/1/22

    2,250        2,458,328   

New York Dormitory Authority, (Maimonides Medical Center), (NPFG), Prerefunded to 8/1/14, 5.00%, 8/1/33

    2,525        2,566,006   

New York Housing Development Corp., (NPFG), Prerefunded to 7/1/15, 5.00%, 7/1/25

    2,350        2,491,211   
   
    $ 11,564,385   
   
Security   Principal
Amount
(000’s omitted)
    Value  
   

Insured – General Obligations — 7.3%

  

Brentwood Union Free School District, (AGC), 4.75%, 11/15/23

  $ 2,290      $ 2,569,495   

Brentwood Union Free School District, (AGC), 5.00%, 11/15/24

    2,390        2,689,682   

East Northport Fire District, (AGC), 4.50%, 11/1/20

    200        225,242   

East Northport Fire District, (AGC), 4.50%, 11/1/21

    200        222,436   

East Northport Fire District, (AGC), 4.50%, 11/1/22

    200        220,850   

East Northport Fire District, (AGC), 4.50%, 11/1/23

    200        219,854   

Eastchester Union Free School District, (AGM), 4.00%, 6/15/23

    175        185,906   

Freeport, (AGC), 5.00%, 10/15/20

    185        210,101   

Freeport, (AGC), 5.00%, 10/15/21

    195        218,813   

Hoosic Valley Central School District, (AGC), 4.00%, 6/15/23

    1,110        1,180,951   

Longwood Central School District, Suffolk County, (AGC), 4.15%, 6/1/23

    820        871,258   

Longwood Central School District, Suffolk County, (AGC), 4.25%, 6/1/24

    860        911,849   

Wantagh Union Free School District, (AGC), 4.50%, 11/15/19

    785        871,311   

Wantagh Union Free School District, (AGC), 4.50%, 11/15/20

    825        904,860   

Wantagh Union Free School District, (AGC), 4.75%, 11/15/22

    905        981,174   

Wantagh Union Free School District, (AGC), 4.75%, 11/15/23

    950        1,026,475   

William Floyd Union Free School District, (AGC), 4.00%, 12/15/24

    1,590        1,687,928   
   
    $ 15,198,185   
   

Insured – Hospital — 2.2%

  

New York Dormitory Authority, (Hudson Valley Hospital Center), (AGM), (BHAC), 5.00%, 8/15/36

  $ 4,355      $ 4,606,414   
   
    $ 4,606,414   
   

Insured – Lease Revenue / Certificates of Participation — 2.2%

  

Ulster County, Resource Recovery Agency, Solid Waste System, (AMBAC), 0.00%, 3/1/21

  $ 1,490      $ 1,261,553   

Ulster County, Resource Recovery Agency, Solid Waste System, (AMBAC), 0.00%, 3/1/23

    1,090        843,366   

Ulster County, Resource Recovery Agency, Solid Waste System, (AMBAC), 0.00%, 3/1/25

    3,635        2,556,205   
   
    $ 4,661,124   
   

Insured – Other Revenue — 3.8%

  

New York City Cultural Resources Trust, (American Museum of Natural History), (NPFG), 5.00%, 7/1/44

  $ 2,055      $ 2,075,797   

New York City Industrial Development Agency, (Yankee Stadium), (NPFG), 4.75%, 3/1/46

    1,175        1,182,003   
 

 

  16   See Notes to Financial Statements.


Eaton Vance

New York Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited) — continued

 

 

Security   Principal
Amount
(000’s omitted)
    Value  
   

Insured – Other Revenue (continued)

  

New York City Transitional Finance Authority, (BHAC), 5.50%, 7/15/38

  $ 4,050      $ 4,561,150   
   
    $ 7,818,950   
   

Insured – Special Tax Revenue — 5.9%

  

New York State Housing Finance Agency, (AGM), 5.00%, 3/15/37

  $ 2,415      $ 2,594,966   

New York Thruway Authority, Miscellaneous Tax Revenue, (AMBAC), 5.50%, 4/1/20

    2,175        2,619,461   

Puerto Rico Infrastructure Financing Authority, (AMBAC), 0.00%, 7/1/36

    3,000        498,630   

Puerto Rico Infrastructure Financing Authority, (FGIC), 0.00%, 7/1/32

    4,000        567,760   

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

    6,705        855,558   

Sales Tax Asset Receivables Corp., (AMBAC), 5.00%, 10/15/29

    850        870,374   

Sales Tax Asset Receivables Corp., (AMBAC), 5.00%, 10/15/32

    4,185        4,284,645   
   
    $ 12,291,394   
   

Insured – Transportation — 8.7%

  

Port Authority of New York and New Jersey, (AGM), 5.00%, 8/15/24(1)

  $ 5,600      $ 6,289,190   

Port Authority of New York and New Jersey, (AGM), 5.00%, 8/15/33(1)

    11,000        11,899,690   
   
    $ 18,188,880   
   

Insured – Water and Sewer — 3.0%

  

Nassau County Sewer and Storm Water Finance Authority, (BHAC), 5.125%, 11/1/23

  $ 300      $ 343,500   

Nassau County Sewer and Storm Water Finance Authority, (BHAC), 5.375%, 11/1/28

    3,835        4,364,499   

Suffolk County Water Authority, (NPFG), 4.50%, 6/1/25

    1,475        1,501,712   
   
    $ 6,209,711   
   

Other Revenue — 5.8%

  

Battery Park City Authority, 5.00%, 11/1/34

  $ 4,925      $ 5,571,899   

Brooklyn Arena Local Development Corp., (Barclays Center), 0.00%, 7/15/31

    4,900        1,908,158   

New York Liberty Development Corp., (7 World Trade Center), 5.00%, 9/15/32

    4,110        4,518,328   
   
    $ 11,998,385   
   
Security   Principal
Amount
(000’s omitted)
    Value  
   

Special Tax Revenue — 19.2%

  

Metropolitan Transportation Authority Dedicated Tax Fund, 5.00%, 11/15/31(1)

  $ 10,000      $ 11,103,800   

New York City Transitional Finance Authority, Future Tax Revenue, 5.00%, 2/1/35(1)

    10,000        10,781,200   

New York City Transitional Finance Authority, Future Tax Revenue, 5.50%, 11/1/35(1)(2)

    1,000        1,116,350   

New York Dormitory Authority, Personal Income Tax Revenue, 5.00%, 6/15/31(1)

    6,500        7,177,105   

New York Dormitory Authority, Sales Tax Revenue, 5.00%, 3/15/34

    6,600        7,230,432   

New York Thruway Authority, Miscellaneous Tax Revenue, 5.00%, 4/1/26

    2,370        2,630,605   
   
    $ 40,039,492   
   

Transportation — 11.6%

  

Metropolitan Transportation Authority, 5.25%, 11/15/38

  $ 3,430      $ 3,686,976   

Nassau County Bridge Authority, 5.00%, 10/1/35

    1,565        1,633,312   

Nassau County Bridge Authority, 5.00%, 10/1/40

    300        312,231   

New York Thruway Authority, 5.00%, 1/1/37

    7,280        7,778,098   

Triborough Bridge and Tunnel Authority, 5.00%, 11/15/38(1)

    10,000        10,657,500   
   
    $ 24,068,117   
   

Water and Sewer — 5.6%

  

Albany Municipal Water Finance Authority, 5.00%, 12/1/26

  $ 755      $ 845,170   

Albany Municipal Water Finance Authority, 5.00%, 12/1/29

    500        549,145   

New York City Municipal Water Finance Authority, (Water and Sewer System), 5.00%, 6/15/34

    1,000        1,088,640   

New York City Municipal Water Finance Authority, (Water and Sewer System), 5.00%, 6/15/44(1)

    8,750        9,239,300   
   
    $ 11,722,255   
   

Total Tax-Exempt Investments — 166.8%
(identified cost $331,138,549)

   

  $ 347,326,323   
   

Other Assets, Less Liabilities — (66.8)%

  

  $ (139,080,645
   

Net Assets — 100.0%

  

  $ 208,245,678   
   

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

 

AGC     Assured Guaranty Corp.
AGM     Assured Guaranty Municipal Corp.
AMBAC     AMBAC Financial Group, Inc.
BHAC     Berkshire Hathaway Assurance Corp.
FGIC     Financial Guaranty Insurance Company
NPFG     National Public Finance Guaranty Corp.
 

 

  17   See Notes to Financial Statements.


Eaton Vance

New York Municipal Bond Fund

March 31, 2014

 

Portfolio of Investments (Unaudited) — continued

 

 

The Fund invests primarily in debt securities issued by New York 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 March 31, 2014, 37.9% 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 0.2% to 13.6% of total investments.

 

(1) 

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

 

(2) 

Security (or a portion thereof) has been pledged as collateral for residual interest bond transactions. The aggregate value of such collateral is $366,350.

 

 

  18   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Statements of Assets and Liabilities (Unaudited)

 

 

    March 31, 2014  
Assets   Municipal Fund     California Fund     New York Fund  

Investments —

     

Identified cost

  $ 1,415,639,739      $ 416,390,527      $ 331,138,549   

Unrealized appreciation

    66,227,817        20,893,860        16,187,774   

Investments, at value

  $ 1,481,867,556      $ 437,284,387      $ 347,326,323   

Cash

  $      $ 3,757,870      $   

Restricted cash*

    1,033,000        530,000        225,000   

Interest receivable

    19,451,601        5,340,154        4,438,157   

Receivable for investments sold

    3,709,169               336,291   

Receivable for variation margin on open financial futures contracts

    107,500        43,438        23,438   

Deferred debt issuance costs

    559,106        159,049        46,354   

Total assets

  $ 1,506,727,932      $ 447,114,898      $ 352,395,563   
Liabilities                        

Payable for floating rate notes issued

  $ 613,620,000      $ 184,800,000      $ 142,670,000   

Payable for investments purchased

    4,961,745                 

Due to custodian

    2,428,964               1,007,840   

Payable to affiliates:

     

Investment adviser fee

    792,532        236,932        193,313   

Interest expense and fees payable

    1,155,942        333,954        211,591   

Accrued expenses

    126,827        62,235        67,141   

Total liabilities

  $ 623,086,010      $ 185,433,121      $ 144,149,885   

Net Assets

  $ 883,641,922      $ 261,681,777      $ 208,245,678   
Sources of Net Assets                        

Common shares, $0.01 par value, unlimited number of shares authorized

  $ 681,683      $ 215,562      $ 157,179   

Additional paid-in capital

    958,234,857        304,573,766        221,746,687   

Accumulated net realized loss

    (141,102,858     (65,622,128     (31,263,833

Accumulated undistributed net investment income

    297,115        1,819,719        1,569,766   

Net unrealized appreciation

    65,531,125        20,694,858        16,035,879   

Net Assets

  $ 883,641,922      $ 261,681,777      $ 208,245,678   
Common Shares Outstanding     68,168,250        21,556,186        15,717,885   
Net Asset Value                        

Net assets ÷ common shares issued and outstanding

  $ 12.96      $ 12.14      $ 13.25   

 

* Represents restricted cash on deposit at the broker for open financial futures contracts.

 

  19   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Statements of Operations (Unaudited)

 

 

    Six Months Ended March 31, 2014  
Investment Income   Municipal Fund     California Fund     New York Fund  

Interest

  $ 33,594,106      $ 9,637,799      $ 7,716,044   

Total investment income

  $ 33,594,106      $ 9,637,799      $ 7,716,044   
Expenses                        

Investment adviser fee

  $ 4,559,176      $ 1,368,908      $ 1,123,723   

Trustees’ fees and expenses

    30,694        9,394        7,489   

Custodian fee

    148,294        46,496        43,536   

Transfer and dividend disbursing agent fees

    10,740        9,468        9,840   

Legal and accounting services

    147,166        42,406        40,195   

Printing and postage

    35,755        10,307        10,002   

Interest expense and fees

    1,861,553        542,424        414,450   

Miscellaneous

    34,884        18,086        15,874   

Total expenses

  $ 6,828,262      $ 2,047,489      $ 1,665,109   

Deduct —

     

Reduction of custodian fee

  $ 2,908      $ 1,603      $ 404   

Total expense reductions

  $ 2,908      $ 1,603      $ 404   

Net expenses

  $ 6,825,354      $ 2,045,886      $ 1,664,705   

Net investment income

  $ 26,768,752      $ 7,591,913      $ 6,051,339   
Realized and Unrealized Gain (Loss)                        

Net realized gain (loss) —

     

Investment transactions

  $ 1,173,782      $ (589,224   $ (175,279

Financial futures contracts

    (852,112     (664,257     (180,432

Net realized gain (loss)

  $ 321,670      $ (1,253,481   $ (355,711

Change in unrealized appreciation (depreciation) —

     

Investments

  $ 45,328,004      $ 13,886,748      $ 7,682,057   

Financial futures contracts

    (114,509     303,554        (31,641

Net change in unrealized appreciation (depreciation)

  $ 45,213,495      $ 14,190,302      $ 7,650,416   

Net realized and unrealized gain

  $ 45,535,165      $ 12,936,821      $ 7,294,705   

Net increase in net assets from operations

  $ 72,303,917      $ 20,528,734      $ 13,346,044   

 

  20   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Statements of Changes in Net Assets

 

 

    Six Months Ended March 31, 2014 (Unaudited)  
Increase (Decrease) in Net Assets   Municipal Fund     California Fund     New York Fund  

From operations —

     

Net investment income

  $ 26,768,752      $ 7,591,913      $ 6,051,339   

Net realized gain (loss) from investment transactions and financial futures contracts

    321,670        (1,253,481     (355,711

Net change in unrealized appreciation (depreciation) from investments and financial futures contracts

    45,213,495        14,190,302        7,650,416   

Net increase in net assets from operations

  $ 72,303,917      $ 20,528,734      $ 13,346,044   

Distributions to common shareholders —

     

From net investment income

  $ (26,109,122   $ (7,099,890   $ (5,451,228

Total distributions to common shareholders

  $ (26,109,122   $ (7,099,890   $ (5,451,228

Capital share transactions —

     

Cost of shares repurchased (See Note 5)

  $      $ (2,154,373   $ (2,101,607

Net decrease in net assets from capital share transactions

  $      $ (2,154,373   $ (2,101,607

Net increase in net assets

  $ 46,194,795      $ 11,274,471      $ 5,793,209   
Net Assets   

At beginning of period

  $ 837,447,127      $ 250,407,306      $ 202,452,469   

At end of period

  $ 883,641,922      $ 261,681,777      $ 208,245,678   
Accumulated undistributed net investment income
included in net assets
   

At end of period

  $ 297,115      $ 1,819,719      $ 1,569,766   

 

  21   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Statements of Changes in Net Assets — continued

 

 

    Year Ended September 30, 2013  
Increase (Decrease) in Net Assets   Municipal Fund     California Fund     New York Fund  

From operations —

     

Net investment income

  $ 52,345,090      $ 15,192,176      $ 11,688,802   

Net realized loss from investment transactions, extinguishment of debt and financial futures contracts

    (9,557,654     (3,286,310     (807,903

Net change in unrealized appreciation (depreciation) from investments and financial futures contracts

    (114,009,675     (29,622,573     (27,325,554

Net decrease in net assets from operations

  $ (71,222,239   $ (17,716,707   $ (16,444,655

Distributions to common shareholders —

     

From net investment income

  $ (52,214,271   $ (14,228,546   $ (10,936,048

Total distributions to common shareholders

  $ (52,214,271   $ (14,228,546   $ (10,936,048

Capital share transactions —

     

Reinvestment of distributions to common shareholders

  $ 356,129      $      $ 40,685   

Net increase in net assets from capital share transactions

  $ 356,129      $      $ 40,685   

Net decrease in net assets

  $ (123,080,381   $ (31,945,253   $ (27,340,018
Net Assets   

At beginning of year

  $ 960,527,508      $ 282,352,559      $ 229,792,487   

At end of year

  $ 837,447,127      $ 250,407,306      $ 202,452,469   
Accumulated undistributed (distributions in excess of) net investment income
included in net assets
   

At end of year

  $ (362,515   $ 1,327,696      $ 969,655   

 

  22   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Statements of Cash Flows (Unaudited)

 

 

    Six Months Ended March 31, 2014  
Cash Flows From Operating Activities   Municipal Fund     California Fund     New York Fund  

Net increase in net assets from operations

  $ 72,303,917      $ 20,528,734      $ 13,346,044   

Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities:

     

Investments purchased

    (77,358,683     (10,525,476     (10,841,436

Investments sold

    67,566,373        12,316,710        8,160,769   

Net amortization/accretion of premium (discount)

    (2,049,336     (421,393     7,961   

Amortization of deferred debt issuance costs

    56,804        9,464        7,602   

Decrease in restricted cash

    15,000        45,000          

Decrease (increase) in interest receivable

    (386,849     15,511        (60,330

Increase in receivable for variation margin on open financial futures contracts

    (86,312     (41,860     (18,750

Increase in payable to affiliate for investment adviser fee

    64,094        16,236        12,850   

Decrease in interest expense and fees payable

    (52,702     (27,916     (14,808

Decrease in accrued expenses

    (80,343     (67,950     (59,818

Net change in unrealized (appreciation) depreciation from investments

    (45,328,004     (13,886,748     (7,682,057

Net realized (gain) loss from investments

    (1,173,782     589,224        175,279   

Net cash provided by operating activities

  $ 13,490,177      $ 8,549,536      $ 3,033,306   
Cash Flows From Financing Activities   

Distributions paid to common shareholders, net of reinvestments

  $ (26,109,122   $ (7,099,890   $ (5,451,228

Repurchase of common shares

           (2,154,373     (2,101,607

Proceeds from secured borrowings

    10,770,000                 

Repayment of secured borrowings

    (7,720,000              

Increase in due to custodian

    2,428,964               1,007,840   

Net cash used in financing activities

  $ (20,630,158   $ (9,254,263   $ (6,544,995

Net decrease in cash

  $ (7,139,981   $ (704,727   $ (3,511,689

Cash at beginning of period

  $ 7,139,981      $ 4,462,597      $ 3,511,689   

Cash at end of period

  $      $ 3,757,870      $   
Supplemental disclosure of cash flow information:   

Cash paid for interest and fees

  $ 1,857,451      $ 560,876      $ 421,656   

 

  23   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Financial Highlights

 

 

    Municipal Fund  
    Six Months Ended
March 31, 2014
(Unaudited)
    Year Ended September 30,  
      2013     2012     2011     2010     2009  

Net asset value — Beginning of period

  $ 12.290      $ 14.100      $ 12.560      $ 13.080      $ 13.170      $ 11.080   
Income (Loss) From Operations                                                

Net investment income(1)

  $ 0.393      $ 0.768      $ 0.763      $ 0.878      $ 0.878      $ 0.846   

Net realized and unrealized gain (loss)

    0.660        (1.812     1.584        (0.482     (0.059     2.051   

Total income (loss) from operations

  $ 1.053      $ (1.044   $ 2.347      $ 0.396      $ 0.819      $ 2.897   
Less Distributions                                                

From net investment income

  $ (0.383   $ (0.766   $ (0.807   $ (0.916   $ (0.909   $ (0.807

Total distributions

  $ (0.383   $ (0.766   $ (0.807   $ (0.916   $ (0.909   $ (0.807

Net asset value — End of period

  $ 12.960      $ 12.290      $ 14.100      $ 12.560      $ 13.080      $ 13.170   

Market value — End of period

  $ 11.880      $ 11.560      $ 14.460      $ 12.350      $ 13.900      $ 13.160   

Total Investment Return on Net Asset Value(2)

    9.10 %(3)      (7.59 )%      19.33     3.89     6.77     28.15

Total Investment Return on Market Value(2)

    6.23 %(3)      (15.17 )%      24.45     (3.87 )%      13.55     27.36
Ratios/Supplemental Data                                                

Net assets, end of period (000’s omitted)

  $ 883,642      $ 837,447      $ 960,528      $ 855,705      $ 889,539      $ 893,391   

Ratios (as a percentage of average daily net assets):

           

Expenses excluding interest and fees(4)

    1.17 %(5)      1.15     1.30     1.25     1.12     1.04

Interest and fee expense(6)

    0.44 %(5)      0.47     0.48     0.56     0.54     1.33

Total expenses(4)

    1.61 %(5)      1.62     1.78     1.81     1.66     2.37

Net investment income

    6.31 %(5)      5.67     5.75     7.54     7.04     7.94

Portfolio Turnover

    5 %(3)      18     17     18     18     19

 

(1) 

Computed using average shares outstanding.

 

(2) 

Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan.

 

(3) 

Not annualized.

 

(4) 

Excludes the effect of custody fee credits, if any, of less than 0.005%.

 

(5) 

Annualized.

 

(6) 

Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1H).

 

  24   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Financial Highlights — continued

 

 

    California Fund  
    Six Months Ended
March 31, 2014
(Unaudited)
    Year Ended September 30,  
      2013     2012     2011     2010     2009  

Net asset value — Beginning of period

  $ 11.510      $ 12.980      $ 11.740      $ 12.610      $ 12.940      $ 11.310   
Income (Loss) From Operations                                                

Net investment income(1)

  $ 0.350      $ 0.698      $ 0.689      $ 0.801      $ 0.847      $ 0.827   

Net realized and unrealized gain (loss)

    0.596        (1.514     1.282        (0.822     (0.331     1.570   

Total income (loss) from operations

  $ 0.946      $ (0.816   $ 1.971      $ (0.021   $ 0.516      $ 2.397   
Less Distributions                                                

From net investment income

  $ (0.327   $ (0.654   $ (0.731   $ (0.849   $ (0.846   $ (0.767

Total distributions

  $ (0.327   $ (0.654   $ (0.731   $ (0.849   $ (0.846   $ (0.767

Anti-dilutive effect of share repurchase program (see Note 5)(1)

  $ 0.011      $      $      $      $      $   

Net asset value — End of period

  $ 12.140      $ 11.510      $ 12.980      $ 11.740      $ 12.610      $ 12.940   

Market value — End of period

  $ 10.860      $ 10.330      $ 12.650      $ 12.270      $ 13.300      $ 12.970   

Total Investment Return on Net Asset Value(2)

    8.80 %(3)      (6.18 )%      17.34     0.48     4.53     22.99

Total Investment Return on Market Value(2)

    8.44 %(3)      (13.60 )%      9.42     (0.43 )%      10.00     25.72
Ratios/Supplemental Data                                                

Net assets, end of period (000’s omitted)

  $ 261,682      $ 250,407      $ 282,353      $ 255,294      $ 273,914      $ 280,743   

Ratios (as a percentage of average daily net assets):

           

Expenses excluding interest and fees

    1.18 %(4)      1.22     1.25     1.42     1.16     1.06

Interest and fee expense(5)

    0.43 %(4)      0.46     0.48     0.57     0.56     1.28

Total expenses before custodian fee reduction

    1.61 %(4)      1.68     1.73     1.99     1.72     2.34

Expenses after custodian fee reduction excluding interest and fees

    1.18 %(4)      1.22     1.25     1.42     1.16     1.04

Net investment income

    5.99 %(4)      5.56     5.57     7.20     7.01     7.64

Portfolio Turnover

    2 %(3)      22     27     21     11     8

 

(1) 

Computed using average shares outstanding.

 

(2) 

Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan.

 

(3) 

Not annualized.

 

(4) 

Annualized.

 

(5) 

Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1H).

 

  25   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Financial Highlights — continued

 

 

    New York Fund  
    Six Months Ended
March 31, 2014
(Unaudited)
    Year Ended September 30,  
      2013     2012     2011     2010     2009  

Net asset value — Beginning of period

  $ 12.740      $ 14.460      $ 13.170      $ 13.610      $ 13.640      $ 11.650   
Income (Loss) From Operations                                                

Net investment income(1)

  $ 0.382      $ 0.735      $ 0.728      $ 0.797      $ 0.831      $ 0.790   

Net realized and unrealized gain (loss)

    0.457        (1.767     1.308        (0.412     (0.041     1.934   

Total income (loss) from operations

  $ 0.839      $ (1.032   $ 2.036      $ 0.385      $ 0.790      $ 2.724   
Less Distributions                                                

From net investment income

  $ (0.344   $ (0.688   $ (0.746   $ (0.825   $ (0.820   $ (0.734

Total distributions

  $ (0.344   $ (0.688   $ (0.746   $ (0.825   $ (0.820   $ (0.734

Anti-dilutive effect of share repurchase program (see Note 5)(1)

  $ 0.015      $      $      $      $      $   

Net asset value — End of period

  $ 13.250      $ 12.740      $ 14.460      $ 13.170      $ 13.610      $ 13.640   

Market value — End of period

  $ 11.990      $ 11.540      $ 14.660      $ 13.450      $ 14.010      $ 14.120   

Total Investment Return on Net Asset Value(2)

    7.12 %(3)      (7.16 )%      15.87     3.37     6.16     24.78

Total Investment Return on Market Value(2)

    7.01 %(3)      (17.05 )%      15.03     2.56     5.56     37.06
Ratios/Supplemental Data                                                

Net assets, end of period (000’s omitted)

  $ 208,246      $ 202,452      $ 229,792      $ 209,003      $ 215,453      $ 215,303   

Ratios (as a percentage of average daily net assets):

           

Expenses excluding interest and fees

    1.23 %(4)      1.21     1.22     1.39     1.12     1.04

Interest and fee expense(5)

    0.40 %(4)      0.42     0.43     0.52     0.55     1.34

Total expenses before custodian fee reduction

    1.63 %(4)      1.63     1.65     1.91     1.67     2.38

Expenses after custodian fee reduction excluding interest and fees

    1.23 %(4)      1.21     1.22     1.39     1.12     1.03

Net investment income

    5.94 %(4)      5.29     5.29     6.37     6.30     6.83

Portfolio Turnover

    2 %(3)      12     17     29     11     21

 

(1) 

Computed using average shares outstanding.

 

(2) 

Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund’s dividend reinvestment plan.

 

(3) 

Not annualized.

 

(4) 

Annualized.

 

(5) 

Interest and fee expense relates to the liability for floating rate notes issued in conjunction with residual interest bond transactions (see Note 1H).

 

  26   See Notes to Financial Statements.


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Notes to Financial Statements (Unaudited)

 

 

1  Significant Accounting Policies

Eaton Vance Municipal Bond Fund, Eaton Vance California Municipal Bond Fund and Eaton Vance New York Municipal Bond Fund, (each individually referred to as the Fund, and collectively, the Funds), are Massachusetts business trusts registered under the Investment Company Act of 1940, as amended (the 1940 Act), as non-diversified, closed-end management investment companies. The Funds’ investment objective is to provide current income exempt from regular federal income tax, including alternative minimum tax, and, in state specific funds, taxes in its specified state.

The following is a summary of significant accounting policies of the Funds. The policies are in conformity with accounting principles generally accepted in the United States of America.

A  Investment Valuation — The following methodologies are used to determine the market value or fair value of investments.

Debt Obligations. Debt obligations (including short-term obligations with a remaining maturity of more than sixty days) are generally valued on the basis of valuations provided by third party pricing services, as derived from such services’ pricing models. Inputs to the models may include, but are not limited to, reported trades, executable bid and asked prices, broker/dealer quotations, prices or yields of securities with similar characteristics, benchmark curves or information pertaining to the issuer, as well as industry and economic events. The pricing services may use a matrix approach, which considers information regarding securities with similar characteristics to determine the valuation for a security. Short-term obligations purchased with a remaining maturity of sixty days or less are generally valued at amortized cost, which approximates market value.

Derivatives. Financial futures contracts are valued at the closing settlement price established by the board of trade or exchange on which they are traded.

Fair Valuation. Investments for which valuations or market quotations are not readily available or are deemed unreliable are valued at fair value using methods determined in good faith by or at the direction of the Trustees of a Fund in a manner that fairly reflects the security’s value, or the amount that the Fund might reasonably expect to receive for the security upon its current sale in the ordinary course. Each such determination is based on a consideration of relevant factors, which are likely to vary from one pricing context to another. These factors may include, but are not limited to, the type of security, the existence of any contractual restrictions on the security’s disposition, the price and extent of public trading in similar securities of the issuer or of comparable entities, quotations or relevant information obtained from broker/dealers or other market participants, information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities), an analysis of the entity’s financial condition, and an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold.

B  Investment Transactions and Related Income — Investment transactions for financial statement purposes are accounted for on a trade date basis. Realized gains and losses on investments sold are determined on the basis of identified cost. Interest income is recorded on the basis of interest accrued, adjusted for amortization of premium or accretion of discount.

C  Federal Taxes — Each Fund’s policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its taxable, if any, and tax-exempt net investment income, and all or substantially all of its net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary. Each Fund intends to satisfy conditions which will enable it to designate distributions from the interest income generated by its investments in non-taxable municipal securities, which are exempt from regular federal income tax when received by each Fund, as exempt-interest dividends.

At September 30, 2013, the following Funds, for federal income tax purposes, had capital loss carryforwards and deferred capital losses which will reduce the respective Fund’s taxable income arising from future net realized gains on investment transactions, if any, to the extent permitted by the Internal Revenue Code, and thus will reduce the amount of distributions to shareholders, which would otherwise be necessary to relieve the Funds of any liability for federal income or excise tax. The deferred capital losses are treated as arising on the first day of the Funds’ next taxable year and are treated as realized prior to the utilization of the capital loss carryforward. The amounts and expiration dates of the capital loss carryforwards and the amounts of the deferred capital losses are as follows:

 

Expiration Date   Municipal
Fund
     California
Fund
     New York
Fund
 

September 30, 2015

  $ 31,250       $       $   

September 30, 2016

    6,857,645         533,889           

September 30, 2017

    18,034,628         4,562,453         7,946,914   

September 30, 2018

    56,183,712         23,169,615         8,909,352   

September 30, 2019

    16,458,561         7,665,268         6,463,209   

Total capital loss carryforward

  $ 97,565,796       $ 35,931,225       $ 23,319,475   

Deferred capital losses

  $ 48,053,779       $ 27,483,193       $ 7,430,247   

 

  27  


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Notes to Financial Statements (Unaudited) — continued

 

 

As of March 31, 2014, the Funds had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. Each Fund files a U.S. federal income tax return annually after its fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of filing.

D  Expense Reduction — State Street Bank and Trust Company (SSBT) serves as custodian of the Funds. Pursuant to the custodian agreement, SSBT receives a fee reduced by credits, which are determined based on the average daily cash balance each Fund maintains with SSBT. All credit balances, if any, used to reduce each Fund’s custodian fees are reported as a reduction of expenses in the Statements of Operations.

E  Legal Fees — Legal fees and other related expenses incurred as part of negotiations of the terms and requirement of capital infusions, or that are expected to result in the restructuring of, or a plan of reorganization for, an investment are recorded as realized losses. Ongoing expenditures to protect or enhance an investment are treated as operating expenses.

F  Use of Estimates — The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates.

G  Indemnifications — Under each Fund’s organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to each Fund. Under Massachusetts law, if certain conditions prevail, shareholders of a Massachusetts business trust (such as a Fund) could be deemed to have personal liability for the obligations of the Fund. However, each Fund’s Declaration of Trust contains an express disclaimer of liability on the part of Fund shareholders and the By-laws provide that the Fund shall assume the defense on behalf of any Fund shareholders. Moreover, the By-laws also provide for indemnification out of Fund property of any shareholder held personally liable solely by reason of being or having been a shareholder for all loss or expense arising from such liability. Additionally, in the normal course of business, each Fund enters into agreements with service providers that may contain indemnification clauses. Each Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against each Fund that have not yet occurred.

H  Floating Rate Notes Issued in Conjunction with Securities Held — The Funds may invest in residual interest bonds, also referred to as inverse floating rate securities, whereby a Fund may sell a variable or fixed rate bond to a broker for cash. At the same time, the Fund buys a residual interest in the assets and cash flows of a Special-Purpose Vehicle (the SPV), (which is generally organized as a trust), set up by the broker. The broker deposits a bond into the SPV with the same CUSIP number as the bond sold to the broker by the Fund, and which may have been, but is not required to be, the bond purchased from the Fund (the Bond). The SPV also issues floating rate notes (Floating Rate Notes) which are sold to third-parties. The residual interest bond held by a Fund gives the Fund the right (1) to cause the holders of the Floating Rate Notes to generally tender their notes at par, and (2) to have the broker transfer the Bond held by the SPV to the Fund, thereby terminating the SPV. Should the Fund exercise such right, it would generally pay the broker the par amount due on the Floating Rate Notes and exchange the residual interest bond for the underlying Bond. Pursuant to generally accepted accounting principles for transfers and servicing of financial assets and extinguishment of liabilities, the Funds account for the transaction described above as a secured borrowing by including the Bond in their Portfolio of Investments and the Floating Rate Notes as a liability under the caption “Payable for floating rate notes issued” in their Statement of Assets and Liabilities. The Floating Rate Notes have interest rates that generally reset weekly and their holders have the option to tender their notes to the broker for redemption at par at each reset date. Accordingly, the fair value of the payable for floating rate notes issued approximates its carrying value. If measured at fair value, the payable for floating rate notes would have been considered as Level 2 in the fair value hierarchy (see Note 9) at March 31, 2014. Interest expense related to the Funds’ liability with respect to Floating Rate Notes is recorded as incurred. The SPV may be terminated by the Fund, as noted above, or by the broker upon the occurrence of certain termination events as defined in the trust agreement, such as a downgrade in the credit quality of the underlying Bond, bankruptcy of or payment failure by the issuer of the underlying Bond, the inability to remarket Floating Rate Notes that have been tendered due to insufficient buyers in the market, or the failure by the SPV to obtain renewal of the liquidity agreement under which liquidity support is provided for the Floating Rate Notes up to one year. Structuring fees paid to the liquidity provider upon the creation of an SPV have been recorded as debt issuance costs and are being amortized as interest expense to the expected maturity of the related trust. Unamortized structuring fees related to a terminated SPV are recorded as a realized loss on extinguishment of debt. At March 31, 2014, the amounts of the Funds’ Floating Rate Notes and related interest rates and collateral were as follows:

 

     Municipal
Fund
     California
Fund
     New York
Fund
 

Floating Rate Notes Outstanding

  $ 613,620,000       $ 184,800,000       $ 142,670,000   

Interest Rate or Range of Interest Rates (%)

    0.06 - 0.51         0.06 - 0.08         0.06 - 0.08   

Collateral for Floating Rate Notes Outstanding

  $ 723,757,119       $ 223,626,013       $ 171,114,596   

 

  28  


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Notes to Financial Statements (Unaudited) — continued

 

 

For the six months ended March 31, 2014, the Funds’ average Floating Rate Notes outstanding and the average interest rate (annualized) including fees and amortization of deferred debt issuance costs were as follows:

 

    

Municipal

Fund

    

California

Fund

    

New York

Fund

 

Average Floating Rate Notes Outstanding

  $ 612,410,275       $ 184,800,000       $ 142,670,000   

Average Interest Rate

    0.61      0.59      0.58

The Funds may enter into shortfall and forbearance agreements with the broker by which a Fund agrees to reimburse the broker, in certain circumstances, for the difference between the liquidation value of the Bond held by the SPV and the liquidation value of the Floating Rate Notes, as well as any shortfalls in interest cash flows. The Funds had no shortfalls as of March 31, 2014.

The Funds may also purchase residual interest bonds from brokers in a secondary market transaction without first owning the underlying bond. Such transactions are not required to be treated as secured borrowings. Shortfall agreements, if any, related to residual interest bonds purchased in a secondary market transaction are disclosed in the Portfolio of Investments.

The Funds’ investment policies and restrictions expressly permit investments in residual interest bonds. Such bonds typically offer the potential for yields exceeding the yields available on fixed rate bonds with comparable credit quality and maturity. These securities tend to underperform the market for fixed rate bonds in a rising long-term interest rate environment, but tend to outperform the market for fixed rate bonds when long-term interest rates decline. The value and income of residual interest bonds are generally more volatile than that of a fixed rate bond. The Funds’ investment policies do not allow the Funds to borrow money except as permitted by the 1940 Act. Management believes that the Funds’ restrictions on borrowing money and issuing senior securities (other than as specifically permitted) do not apply to Floating Rate Notes issued by the SPV and included as a liability in the Funds’ Statement of Assets and Liabilities. As secured indebtedness issued by an SPV, Floating Rate Notes are distinct from the borrowings and senior securities to which the Funds’ restrictions apply. Residual interest bonds held by the Funds are securities exempt from registration under Rule 144A of the Securities Act of 1933.

On December 10, 2013, five U.S. federal agencies published final rules implementing section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”). The Volcker Rule prohibits banking entities from engaging in proprietary trading of certain instruments and limits such entities’ investments in, and relationships with, covered funds, as defined in the rules. The compliance date for the Volcker Rule is July 21, 2015. The Volcker Rule may preclude banking entities and their affiliates from (i) sponsoring residual interest bond programs (as such programs are presently structured) and (ii) continuing relationships with or services for existing residual interest bond programs. As a result, residual interest bond trusts may need to be restructured or unwound. There can be no assurances that residual interest bond trusts can be restructured, that new sponsors of residual interest bond programs will develop, or that alternative forms of leverage will be available to the Funds. The effects of the Volcker Rule may make it more difficult for the Funds to maintain current or desired levels of leverage and may cause the Funds to incur additional expenses to maintain their leverage.

I  Financial Futures Contracts — Upon entering into a financial futures contract, a Fund is required to deposit with the broker, either in cash or securities, an amount equal to a certain percentage of the contract amount (initial margin). Subsequent payments, known as variation margin, are made or received by the Fund each business day, depending on the daily fluctuations in the value of the underlying security, and are recorded as unrealized gains or losses by the Fund. Gains (losses) are realized upon the expiration or closing of the financial futures contracts. Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. Futures contracts have minimal counterparty risk as they are exchange traded and the clearinghouse for the exchange is substituted as the counterparty, guaranteeing counterparty performance.

J  When-Issued Securities and Delayed Delivery Transactions — The Funds may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. At the time the transaction is negotiated, the price of the security that will be delivered is fixed. The Funds maintain security positions for these commitments such that sufficient liquid assets will be available to make payments upon settlement. Securities purchased on a delayed delivery or when-issued basis are marked-to-market daily and begin earning interest on settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

K  Statement of Cash Flows — The cash amount shown in the Statement of Cash Flows of a Fund is the amount included in the Fund’s Statement of Assets and Liabilities and represents the unrestricted cash on hand at its custodian and does not include any short-term investments.

L  Interim Financial Statements — The interim financial statements relating to March 31, 2014 and for the six months then ended have not been audited by an independent registered public accounting firm, but in the opinion of the Funds’ management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial statements.

 

 

  29  


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Notes to Financial Statements (Unaudited) — continued

 

 

2  Distributions to Shareholders

Each Fund intends to make monthly distributions of net investment income to common shareholders. In addition, at least annually, each Fund intends to distribute all or substantially all of its net realized capital gains (reduced by available capital loss carryforwards). Distributions are recorded on the ex-dividend date.

The Funds distinguish between distributions on a tax basis and a financial reporting basis. Accounting principles generally accepted in the United States of America require that only distributions in excess of tax basis earnings and profits be reported in the financial statements as a return of capital. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. For tax purposes, distributions from short-term capital gains are considered to be from ordinary income.

3  Investment Adviser Fee and Other Transactions with Affiliates

The investment adviser fee is earned by Eaton Vance Management (EVM) as compensation for investment advisory services rendered to each Fund. For New York Fund, the fee is computed at an annual rate of 0.65% of its average weekly gross assets. For Municipal Fund and California Fund, the fee is computed at an annual rate of 0.625% of each Fund’s average weekly gross assets, pursuant to a fee reduction agreement between each of Municipal Fund and California Fund and EVM that commenced on May 1, 2013, and will be reduced by another 0.025% commencing May 1, 2014. The fee reductions cannot be terminated without the consent of a majority of Trustees and a majority of shareholders. Average weekly gross assets include the principal amount of any indebtedness for money borrowed, including debt securities issued by a Fund. Pursuant to a fee reduction agreement between each Fund and EVM, average weekly gross assets are calculated by adding to net assets the amount payable by the Fund to floating rate note holders, such adjustment being limited to the value of the Auction Preferred Shares (APS) outstanding prior to any APS redemptions by the Fund. The investment adviser fee is payable monthly. EVM also serves as the administrator of each Fund, but receives no compensation. For the six months ended March 31, 2014, the investment adviser fees were as follows:

 

    

Municipal

Fund

    

California

Fund

    

New York

Fund

 

Investment Adviser Fee

  $ 4,559,176       $ 1,368,908       $ 1,123,723   

Trustees and officers of the Funds who are members of EVM’s organization receive remuneration for their services to the Funds out of the investment adviser fee. Trustees of the Funds who are not affiliated with the investment adviser may elect to defer receipt of all or a percentage of their annual fees in accordance with the terms of the Trustees Deferred Compensation Plan. For the six months ended March 31, 2014, no significant amounts have been deferred. Certain officers and Trustees of the Funds are officers of EVM.

4  Purchases and Sales of Investments

Purchases and sales of investments, other than short-term obligations, for the six months ended March 31, 2014 were as follows:

 

     Municipal
Fund
     California
Fund
     New York
Fund
 

Purchases

  $ 72,135,403       $ 10,525,476       $ 10,841,436   

Sales

  $ 71,133,985       $ 12,292,069       $ 8,456,530   

5  Common Shares of Beneficial Interest

Common shares issued pursuant to the Funds’ dividend reinvestment plan for the six months ended March 31, 2014 and the year ended September 30, 2013 were as follows:

 

     Municipal
Fund
     California
Fund
     New York
Fund
 

Six Months Ended March 31, 2014 (Unaudited)

                      

Year Ended September 30, 2013

    24,971                 2,812   

 

  30  


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Notes to Financial Statements (Unaudited) — continued

 

 

On November 11, 2013, the Boards of Trustees of the Funds authorized the repurchase by each Fund of up to 10% of its then currently outstanding common shares in open-market transactions at a discount to net asset value (NAV). The repurchase program does not obligate the Funds to purchase a specific amount of shares. During the six months ended March 31, 2014, the number, cost (including brokerage commissions), average price per share and weighted average discount per share to NAV of common shares repurchased, were as follows:

 

    Six Months Ended March 31, 2014 (Unaudited)  
     Municipal
Fund
     California
Fund
     New York
Fund
 

Common shares repurchased

            200,000         178,700   

Cost, including brokerage commissions, of common shares repurchased

          $ 2,154,373       $ 2,101,607   

Average price per share

          $ 10.77       $ 11.76   

Weighted average discount per share to NAV

            10.34      10.30

6  Federal Income Tax Basis of Investments

The cost and unrealized appreciation (depreciation) of investments of each Fund at March 31, 2014, as determined on a federal income tax basis, were as follows:

 

     Municipal
Fund
     California
Fund
     New York
Fund
 

Aggregate cost

  $ 799,686,408       $ 233,015,677       $ 188,698,993   

Gross unrealized appreciation

  $ 94,384,778       $ 23,579,803       $ 20,581,625   

Gross unrealized depreciation

    (25,823,630      (4,111,093      (4,624,295

Net unrealized appreciation

  $ 68,561,148       $ 19,468,710       $ 15,957,330   

7  Overdraft Advances

Pursuant to the custodian agreement, SSBT may, in its discretion, advance funds to the Funds to make properly authorized payments. When such payments result in an overdraft, the Funds are obligated to repay SSBT at the current rate of interest charged by SSBT for secured loans (currently, the Federal Funds rate plus 2%). This obligation is payable on demand to SSBT. SSBT has a lien on a Fund’s assets to the extent of any overdraft. At March 31, 2014, the Municipal Fund and New York Fund had an overdraft balance due to SSBT pursuant to the foregoing arrangement of $2,428,964 and $1,007,840, respectively. Based on the short-term nature of these payments and the variable interest rate, the carrying value of the overdraft advances approximated its fair value at March 31, 2014. If measured at fair value, overdraft advances would have been considered as Level 2 in the fair value hierarchy (see Note 9) at March 31, 2014. The Funds’ average overdraft advances during the six months ended March 31, 2014 were not significant.

8  Financial Instruments

The Funds may trade in financial instruments with off-balance sheet risk in the normal course of their investing activities. These financial instruments may include financial futures contracts and may involve, to a varying degree, elements of risk in excess of the amounts recognized for financial statement purposes. The notional or contractual amounts of these instruments represent the investment a Fund has in particular classes of financial instruments and do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered.

 

 

  31  


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Notes to Financial Statements (Unaudited) — continued

 

 

A summary of obligations under these financial instruments at March 31, 2014 is as follows:

 

Futures Contracts  
Fund   Expiration
Month/Year
     Contracts    Position    Aggregate
Cost
     Value      Net Unrealized
Appreciation
(Depreciation)
 
Municipal     6/14       344
U.S. Long Treasury Bond
   Short    $ (45,130,558    $ (45,827,250    $ (696,692
California     6/14       100
U.S. 10-Year Treasury Note
   Short    $ (12,392,005    $ (12,350,000    $ 42,005   
      6/14       119
U.S. Long Treasury Bond
   Short      (15,612,024      (15,853,031      (241,007
New York     6/14       75
U.S. Long Treasury Bond
   Short    $ (9,839,511    $ (9,991,406    $ (151,895

At March 31, 2014, the Funds had sufficient cash and/or securities to cover commitments under these contracts.

Each Fund is subject to interest rate risk in the normal course of pursuing its investment objective. Because the Funds hold fixed-rate bonds, the value of these bonds may decrease if interest rates rise. The Funds purchase and sell U.S. Treasury futures contracts to hedge against changes in interest rates.

The fair values of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) and whose primary underlying risk exposure is interest rate risk at March 31, 2014 were as follows:

 

     Municipal
Fund
     California
Fund
     New York
Fund
 

Asset Derivative:

       

Futures Contracts

  $       $ 42,005 (1)     $   

Total

  $       $ 42,005       $   

Liability Derivative:

    

Futures Contracts

  $ (696,692 )(1)     $ (241,007 )(1)     $ (151,895 )(1) 

Total

  $ (696,692    $ (241,007    $ (151,895

 

(1) 

Amount represents cumulative unrealized appreciation or (depreciation) on futures contracts in the Futures Contracts table above. Only the current day’s variation margin on open futures contracts is reported within the Statement of Assets and Liabilities as Receivable or Payable for variation margin, as applicable.

The effect of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) on the Statement of Operations and whose primary underlying risk exposure is interest rate risk for the six months ended March 31, 2014 was as follows:

 

     Municipal
Fund
     California
Fund
     New York
Fund
 

Realized Gain (Loss) on Derivatives Recognized in Income

  $ (852,112 )(1)     $ (664,257 )(1)     $ (180,432 )(1) 

Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income

  $ (114,509 )(2)     $ 303,554 (2)     $ (31,641 )(2) 

 

(1) 

Statement of Operations location: Net realized gain (loss) – Financial futures contracts.

 

(2) 

Statement of Operations location: Change in unrealized appreciation (depreciation) – Financial futures contracts.

 

  32  


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Notes to Financial Statements (Unaudited) — continued

 

 

The average notional amounts of futures contracts outstanding during the six months ended March 31, 2014, which are indicative of the volume of this derivative type, were approximately as follows:

 

     Municipal
Fund
     California
Fund
     New York
Fund
 

Average Notional Amount:

    

Futures Contracts

  $ 34,329,000       $ 22,614,000       $ 7,500,000   

9  Fair Value Measurements

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.

 

Ÿ  

Level 1 – quoted prices in active markets for identical investments

 

Ÿ  

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

 

Ÿ  

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 March 31, 2014, the hierarchy of inputs used in valuing the Funds’ investments and open derivative instruments, which are carried at value, were as follows:

 

Municipal Fund

                          
Asset Description   Level 1      Level 2      Level 3*      Total  

Tax-Exempt Municipal Securities

  $       $ 1,481,770,821       $       $ 1,481,770,821   

Corporate Bonds & Notes

                    96,735         96,735   

Total Investments

  $       $ 1,481,770,821       $ 96,735       $ 1,481,867,556   

Liability Description

                                  

Futures Contracts

  $ (696,692    $       $       $ (696,692

Total

  $ (696,692    $       $       $ (696,692
          

California Fund

                          
Asset Description   Level 1      Level 2      Level 3      Total  

Tax-Exempt Investments

  $       $ 437,284,387       $       $ 437,284,387   

Total Investments

  $       $ 437,284,387       $       $ 437,284,387   

Futures Contracts

  $ 42,005       $       $       $ 42,005   

Total

  $ 42,005       $ 437,284,387       $       $ 437,326,392   

Liability Description

                                  

Futures Contracts

  $ (241,007    $       $       $ (241,007

Total

  $ (241,007    $       $       $ (241,007
          

 

  33  


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Notes to Financial Statements (Unaudited) — continued

 

 

New York Fund

                          
Asset Description   Level 1      Level 2      Level 3      Total  

Tax-Exempt Investments

  $       $ 347,326,323       $       $ 347,326,323   

Total Investments

  $       $ 347,326,323       $       $ 347,326,323   

Liability Description

                                  

Futures Contracts

  $ (151,895    $       $       $ (151,895

Total

  $ (151,895    $       $       $ (151,895

 

* None of the unobservable inputs for Level 3 assets, individually or collectively, had a material impact on the Municipal Fund.

California Fund and New York Fund held no investments or other financial instruments as of September 30, 2013 whose fair value was determined using Level 3 inputs. Level 3 investments held by Municipal Fund at the beginning and/or end of the period in relation to net assets were not significant and accordingly, a reconciliation of Level 3 assets for the six months ended March 31, 2014 is not presented.

At March 31, 2014, there were no investments transferred between Level 1 and Level 2 during the six months then ended.

 

  34  


Eaton Vance

Municipal Bond Funds

March 31, 2014

 

Officers and Trustees

 

 

Officers of Eaton Vance Municipal Bond Funds

 

 

Payson F. Swaffield

President

Maureen A. Gemma

Vice President, Secretary and Chief Legal Officer

James F. Kirchner

Treasurer

Paul M. O’Neil

Chief Compliance Officer

 

 

Trustees of Eaton Vance Municipal Bond Funds

 

 

Ralph F. Verni

Chairman

Scott E. Eston

Thomas E. Faust Jr.*

Allen R. Freedman

Valerie A. Mosley

William H. Park

Ronald A. Pearlman

Helen Frame Peters

Harriett Tee Taggart

 

 

* Interested Trustee

 

 

Number of Employees

Each Fund is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as a closed-end management investment company and has no employees.

Number of Shareholders

As of March 31, 2014, Fund records indicate that there are 167, 30 and 43 registered shareholders for Municipal Bond Fund, California Municipal Bond Fund and New York Municipal Bond Fund, respectively, and approximately 23,218, 5,795 and 4,808 shareholders owning the Fund shares in street name, such as through brokers, banks and financial intermediaries for Municipal Bond Fund, California Municipal Bond Fund and New York Municipal Bond Fund, respectively.

If you are a street name shareholder and wish to receive Fund reports directly, which contain important information about a Fund, please write or call:

Eaton Vance Distributors, Inc.

Two International Place

Boston, MA 02110

1-800-262-1122

NYSE MKT symbols

 

Municipal Bond Fund    EIM
California Municipal Bond Fund    EVM
New York Municipal Bond Fund    ENX

 

  35  


Eaton Vance Funds

 

IMPORTANT NOTICES

 

 

Privacy.  The Eaton Vance organization is committed to ensuring your financial privacy. Each of the financial institutions identified below has in effect the following policy (“Privacy Policy”) with respect to nonpublic personal information about its customers:

 

Ÿ  

Only such information received from you, through application forms or otherwise, and information about your Eaton Vance fund transactions will be collected. This may include information such as name, address, social security number, tax status, account balances and transactions.

 

Ÿ  

None of such information about you (or former customers) will be disclosed to anyone, except as permitted by law (which includes disclosure to employees necessary to service your account). In the normal course of servicing a customer’s account, Eaton Vance may share information with unaffiliated third parties that perform various required services such as transfer agents, custodians and broker-dealers.

 

Ÿ  

Policies and procedures (including physical, electronic and procedural safeguards) are in place that are designed to protect the confidentiality of such information.

 

Ÿ  

We reserve the right to change our Privacy Policy at any time upon proper notification to you. Customers may want to review our Privacy Policy periodically for changes by accessing the link on our homepage: www.eatonvance.com.

Our pledge of privacy applies to the following entities within the Eaton Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management, Eaton Vance Investment Counsel, Eaton Vance Distributors, Inc., Eaton Vance Trust Company, Eaton Vance Management’s Real Estate Investment Group and Boston Management and Research. In addition, our Privacy Policy applies only to those Eaton Vance customers who are individuals and who have a direct relationship with us. If a customer’s account (i.e., fund shares) is held in the name of a third-party financial advisor/broker-dealer, it is likely that only such advisor’s privacy policies apply to the customer. This notice supersedes all previously issued privacy disclosures. For more information about Eaton Vance’s Privacy Policy, please call 1-800-262-1122.

Delivery of Shareholder Documents.  The Securities and Exchange Commission (SEC) permits funds to deliver only one copy of shareholder documents, including prospectuses, proxy statements and shareholder reports, to fund investors with multiple accounts at the same residential or post office box address. This practice is often called “householding” and it helps eliminate duplicate mailings to shareholders. Eaton Vance, or your financial advisor, may household the mailing of your documents indefinitely unless you instruct Eaton Vance, or your financial advisor, otherwise. If you would prefer that your Eaton Vance documents not be householded, please contact Eaton Vance at 1-800-262-1122, or contact your financial advisor. Your instructions that householding not apply to delivery of your Eaton Vance documents will be effective within 30 days of receipt by Eaton Vance or your financial advisor.

Portfolio Holdings.  Each Eaton Vance Fund and its underlying Portfolio(s) (if applicable) will file a schedule of portfolio holdings on Form N-Q with the SEC for the first and third quarters of each fiscal year. The Form N-Q will be available on the Eaton Vance website at www.eatonvance.com, by calling Eaton Vance at 1-800-262-1122 or in the EDGAR database on the SEC’s website at www.sec.gov. Form N-Q may also be reviewed and copied at the SEC’s public reference room in Washington, D.C. (call 1-800-732-0330 for information on the operation of the public reference room).

Proxy Voting.  From time to time, funds are required to vote proxies related to the securities held by the funds. The Eaton Vance Funds or their underlying Portfolios (if applicable) vote proxies according to a set of policies and procedures approved by the Funds’ and Portfolios’ Boards. You may obtain a description of these policies and procedures and information on how the Funds or Portfolios voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request, by calling 1-800-262-1122 and by accessing the SEC’s website at www.sec.gov.

Share Repurchase Program.  On November 11, 2013, the Funds’ Boards of Trustees approved a share repurchase program authorizing each Fund to repurchase up to 10% of its currently outstanding common shares in open-market transactions at a discount to net asset value. The repurchase program does not obligate a Fund to purchase a specific amount of shares. The Funds’ repurchase activity, including the number of shares purchased, average price and average discount to net asset value, are disclosed in the Funds’ annual and semi-annual reports to shareholders.

Additional Notice to Shareholders.  If applicable, a Fund may also redeem or purchase its outstanding preferred shares in order to maintain compliance with regulatory requirements, borrowing or rating agency requirements or for other purposes as it deems appropriate or necessary.

Closed-End Fund Information.  Eaton Vance closed-end funds make fund performance data and certain information about portfolio characteristics available on the Eaton Vance website shortly after the end of each month. The funds’ net asset value per share is readily accessible on the Eaton Vance website. Portfolio holdings for the most recent month-end are also posted to the website approximately 30 days following the end of the month. This information is available at www.eatonvance.com on the fund information pages under “Individual Investors — Closed-End Funds”.

 

  36  


Investment Adviser and Administrator

Eaton Vance Management

Two International Place

Boston, MA 02110

Custodian

State Street Bank and Trust Company

200 Clarendon Street

Boston, MA 02116

Transfer Agent

American Stock Transfer & Trust Company, LLC

6201 15th Avenue

Brooklyn, NY 11219

Fund Offices

Two International Place

Boston, MA 02110

 


LOGO

 

7727    3.31.14    


Item 2. Code of Ethics

Not required in this filing.

Item 3. Audit Committee Financial Expert

Not required in this filing.

Item 4. Principal Accountant Fees and Services

Not required in this filing.

Item 5. Audit Committee of Listed Registrants

Not required in this filing.


Item 6. Schedule of Investments

Please see schedule of investments contained in the Report to Stockholders included under Item 1 of this Form N-CSR.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not required in this filing.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Craig R. Brandon, portfolio manager of Eaton Vance California Municipal Bond Fund and Cynthia J. Clemson, portfolio manager of Eaton Vance Municipal Bond Fund are responsible for the overall and day-to-day management of each Fund’s investments.

Mr. Brandon has been an Eaton Vance analyst since 1998, a portfolio manager since 2004 and is Co-Director of the Municipal Investments Group. Ms. Clemson has been an Eaton Vance portfolio manager since 1991 and is Co-Director of the Municipal Investments Group. Mr. Brandon and Ms. Clemson are Vice Presidents of Eaton Vance Management (“EVM”). This information is provided as of the date of filing of this report.

The following tables show, as of March 31, 2014, the number of accounts each portfolio manager managed in each of the listed categories and the total assets (in millions of dollars) in the accounts managed within each category. The table also shows the number of accounts with respect to which the advisory fee is based on the performance of the account, if any, and the total assets (in millions of dollars) in those accounts.

 

     Number
of All
Accounts
     Total Assets
of All
Accounts
     Number of
Accounts
Paying a
Performance
Fee
     Total Assets
of Accounts
Paying a
Performance
Fee
 

Craig R. Brandon

           

Registered Investment Companies

     17       $ 6,013.0         0       $ 0   

Other Pooled Investment Vehicles

     0       $ 0         0       $ 0   

Other Accounts

     0       $ 0         0       $ 0   

Cynthia J. Clemson

           

Registered Investment Companies

     9       $ 3,491.0         0       $ 0   

Other Pooled Investment Vehicles

     0       $ 0         0       $ 0   

Other Accounts

     0       $ 0         0       $ 0   


The following table shows the dollar range of Fund shares beneficially owned by each portfolio manager as of March 31, 2014.

 

     Dollar Range of Equity Securities
Owned in the Fund

California Municipal Bond Fund

  

Craig R. Brandon

   None

Municipal Bond Fund

  

Cynthia J. Clemson

   None

Potential for Conflicts of Interest. It is possible that conflicts of interest may arise in connection with a portfolio manager’s management of a Fund’s investments on the one hand and investments of other accounts for which a portfolio manager is responsible on the other. For example, a portfolio manager may have conflicts of interest in allocating management time, resources and investment opportunities among the Fund and other accounts he or she advises. In addition, due to differences in the investment strategies or restrictions between a Fund and the other accounts, a portfolio manager may take action with respect to another account that differs from the action taken with respect to the Fund. In some cases, another account managed by a portfolio manager may compensate the investment adviser based on the performance of the securities held by that account. The existence of such a performance based fee may create additional conflicts of interest for a portfolio manager in the allocation of management time, resources and investment opportunities. Whenever conflicts of interest arise, a portfolio manager will endeavor to exercise his or her discretion in a manner that he or she believes is equitable to all interested persons. EVM has adopted several policies and procedures designed to address these potential conflicts including a code of ethics and policies which govern the investment adviser’s trading practices, including among other things the aggregation and allocation of trades among clients, brokerage allocation, cross trades and best execution.

Compensation Structure for EVM

Compensation of EVM’s portfolio managers and other investment professionals has three primary components: (1) a base salary, (2) an annual cash bonus, and (3) annual stock-based compensation consisting of options to purchase shares of EVC’s nonvoting common stock and/or restricted shares of EVC’s nonvoting common stock. EVM’s investment professionals also receive certain retirement, insurance and other benefits that are broadly available to EVM’s employees. Compensation of EVM’s investment professionals is reviewed primarily on an annual basis. Cash bonuses, stock-based compensation awards, and adjustments in base salary are typically paid or put into effect at or shortly after the October 31st fiscal year end of EVC.

Method to Determine Compensation. EVM compensates its portfolio managers based primarily on the scale and complexity of their portfolio responsibilities and the total return performance of managed funds and accounts versus the benchmark(s) stated in the prospectus, as well as an appropriate peer group (as described below). In addition to rankings within peer groups of funds on the basis of absolute performance, consideration may also be given to relative risk-adjusted performance. Risk-adjusted performance measures include, but are not limited to, the Sharpe Ratio. Performance is normally based on periods ending on the September 30th preceding fiscal year end. Fund performance is normally evaluated primarily versus peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. When a fund’s peer group as determined by Lipper or Morningstar is deemed by EVM’s management not to provide a fair comparison, performance may instead be evaluated primarily


against a custom peer group or market index. In evaluating the performance of a fund and its manager, primary emphasis is normally placed on three-year performance, with secondary consideration of performance over longer and shorter periods. For funds that are tax-managed or otherwise have an objective of after-tax returns, performance is measured net of taxes. For other funds, performance is evaluated on a pre-tax basis. For funds with an investment objective other than total return (such as current income), consideration will also be given to the fund’s success in achieving its objective. For managers responsible for multiple funds and accounts, investment performance is evaluated on an aggregate basis, based on averages or weighted averages among managed funds and accounts. Funds and accounts that have performance-based advisory fees are not accorded disproportionate weightings in measuring aggregate portfolio manager performance.

The compensation of portfolio managers with other job responsibilities (such as heading an investment group or providing analytical support to other portfolios) will include consideration of the scope of such responsibilities and the managers’ performance in meeting them.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

No such purchases this period.

Item 10. Submission of Matters to a Vote of Security Holders

No material changes.

Item 11. 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 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 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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits

 

(a)(1)    Registrant’s Code of Ethics – Not applicable (please see Item 2).
(a)(2)(i)    Treasurer’s Section 302 certification.
(a)(2)(ii)    President’s Section 302 certification.
(b)    Combined Section 906 certification.


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 Municipal Bond Fund

 

By:  

/s/ Payson F. Swaffield

  Payson F. Swaffield
  President
Date:   May 9, 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/ James F. Kirchner

  James F. Kirchner
  Treasurer
Date:   May 9, 2014

 

By:  

/s/ Payson F. Swaffield

  Payson F. Swaffield
  President
Date:   May 9, 2014