UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-07660
Name of Fund: The Massachusetts Health & Education Tax-Exempt Trust (MHE)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive
Officer, The Massachusetts Health & Education Tax-Exempt Trust, 800
Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011,
Princeton, NJ, 08543-9011
Registrant's telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 08/31/2008
Date of reporting period: 09/01/2008 - 11/30/2008
Item 1 - Schedule of Investments
The Massachusetts Health & Education Tax-Exempt Trust
Schedule of Investments November 30, 2008 (Unaudited)
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
----------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 162.6% Massachusetts State College Building Authority, Project Revenue
Bonds, Series A, 5%, 5/01/31 (a) $ 1,000 $ 901,450
----------------------------------------------------------------------------------------------------------
Massachusetts State College Building Authority, Project Revenue
Refunding Bonds, Series B, 5.50%, 5/01/39 (b) 825 783,016
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, Education Revenue Bonds
(Belmont Hill School), 5%, 9/01/11 (c) 1,100 1,192,620
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, Education Revenue Bonds
(Middlesex School Project), 5%, 9/01/33 400 350,120
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, Education Revenue Bonds
(Xaverian Brothers High School), 5.65%, 7/01/29 250 198,115
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, Educational Facility
Revenue Bonds (Academy of the Pacific Rim), Series A, 5.125%,
6/01/31 (d) 1,000 618,820
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, First Mortgage Revenue
Bonds (Edgecombe Project), Series A, 6.75%, 7/01/21 855 794,714
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, First Mortgage Revenue
Bonds (Overlook Communities, Inc.), Series A, 6.125%, 7/01/24 850 642,566
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, First Mortgage Revenue
Refunding Bonds (Symmes Life Care, Inc. - Brookhaven at Lexington),
Series A, 5%, 3/01/35 (e) 1,250 826,025
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, Human Service Provider
Revenue Bonds (Seven Hills Foundation & Affiliates), 5%,
9/01/35 (e) 500 375,400
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, Resource Recovery Revenue
Bonds (Ogden Haverhill Associates), AMT, Series A, 6.70%, 12/01/14 555 523,110
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency Revenue Bonds (Boston
University), Series T-1, 5%, 10/01/39 (a) 1,000 826,130
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency Revenue Bonds (College
of Pharmacy and Allied Health Services), Series D, 5%,
7/01/27 (f) 500 469,435
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency Revenue Bonds (Franklin
W. Olin College), Series B, 5.25%, 7/01/33 (b) 400 357,888
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency Revenue Bonds
(Massachusetts College of Pharmacy and Health Sciences), 5.75%,
7/01/13 (c) 1,000 1,143,430
Portfolio Abbreviations
To simplify the listings of portfolio holdings in the Schedule of Investments,
the names and descriptions of many of the securities have been abbreviated
according to the list below.
AMT Alternative Minimum Tax (subject to)
PCR Pollution Control Revenue Bonds
VRDN Variable Rate Demand Notes
The Massachusetts Health & Education Tax-Exempt Trust
Schedule of Investments November 30, 2008 (Unaudited)
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
----------------------------------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency Revenue Bonds
(Massachusetts Council of Human Service Providers, Inc.),
Series C, 6.60%, 8/15/29 $ 425 $ 308,775
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency Revenue Bonds
(Smith College), 5%, 7/01/35 2,000 1,822,100
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency Revenue Bonds
(Volunteers of America - Ayer Limited Partnership), AMT,
Series A, 6.20%, 2/20/46 (g) 495 398,183
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency Revenue Bonds
(WGBH Educational Foundation), Series A, 5.75%, 1/01/42 (a) 1,100 1,032,141
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency Revenue Bonds
(The Wheeler School), 6.50%, 12/01/29 540 474,568
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency Revenue Bonds
(Williston Northampton School Project), 5%, 10/01/25 (b) 500 424,315
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency Revenue Bonds
(Worcester Polytechnic Institute), 5%, 9/01/27 (h) 1,985 1,834,596
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, Revenue Refunding
Bonds (Boston University), Series P, 5.45%, 5/15/59 1,500 1,311,270
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, Revenue Refunding
Bonds (Clark University), 5.125%, 10/01/35 (b) 500 430,680
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, Revenue Refunding
Bonds (Western New England College), Series A, 5%, 9/01/33 (f) 1,500 1,285,365
----------------------------------------------------------------------------------------------------------
Massachusetts State Development Finance Agency, Revenue Refunding
Bonds (Wheelock College), Series C, 5.25%, 10/01/37 1,000 696,120
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority,
Healthcare System Revenue Refunding Bonds (Covenant Health System),
6%, 1/01/12 (c) 255 284,720
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority,
Healthcare System Revenue Refunding Bonds (Covenant Health System),
6%, 7/01/22 630 625,918
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority,
Healthcare System Revenue Refunding Bonds (Covenant Health System),
6%, 7/01/31 315 285,091
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority
Revenue Bonds (Baystate Medical Center), Series F, 5.75%, 7/01/33 1,000 859,440
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority
Revenue Bonds (Berkshire Health System), Series E, 6.25%, 10/01/31 350 301,794
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority
Revenue Bonds (Berkshire Health System), Series F, 5%, 10/01/19 (f) 1,000 972,620
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority
Revenue Bonds (Harvard University), Series FF, 5.125%, 7/15/37 1,350 1,305,652
----------------------------------------------------------------------------------------------------------
The Massachusetts Health & Education Tax-Exempt Trust
Schedule of Investments November 30, 2008 (Unaudited)
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
----------------------------------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority Revenue
Bonds (Lahey Clinic Medical Center), Series D, 5.25%, 8/15/37 $1,000 $ 797,990
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority Revenue
Bonds (Milford-Whitinsville Hospital), Series D, 6.35%,
7/15/12 (c) 750 849,277
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority Revenue
Bonds (Northeastern University), Series R, 5%, 10/01/33 750 651,983
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority Revenue
Bonds (Simmons College), Series F, 5%, 10/01/13 (c)(i) 1,000 1,097,030
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority Revenue
Bonds (Tufts University), 5.375%, 8/15/38 1,000 970,330
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority Revenue
Bonds (University of Massachusetts), Series C, 5.125%, 10/01/34 (h)(i) 230 199,394
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority Revenue
Bonds (Wheaton College), Series D, 6%, 1/01/18 1,130 1,037,747
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority, Revenue
Refunding Bonds (Bay Cove Human Services Issue), Series A, 5.90%, 4/01/28 775 566,874
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority, Revenue
Refunding Bonds (Berklee College of Music), Series A, 5%,
10/01/37 1,000 826,910
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority, Revenue
Refunding Bonds (Boston College), Series N, 5.125%, 6/01/37 1,000 915,500
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority, Revenue
Refunding Bonds (Caregroup, Inc.), Series E-1, 5%, 7/01/28 500 355,870
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority, Revenue
Refunding Bonds (Christopher House), Series A, 6.875%, 1/01/29 490 399,007
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority, Revenue
Refunding Bonds (Learning Center For Deaf Children),
Series C, 6.125%, 7/01/29 495 367,785
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority, Revenue
Refunding Bonds (Massachusetts Institute of Technology), Series L, 5%,
7/01/23 500 512,765
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority, Revenue
Refunding Bonds (Partners Healthcare System), VRDN, Series
D-1, 0.55%, 7/01/35 (j)(k) 1,200 1,200,000
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority, Revenue
Refunding Bonds (Valley Regional Health System), Series C,
5.75%, 7/01/18 (l) 395 367,145
----------------------------------------------------------------------------------------------------------
Massachusetts State Health and Educational Facilities Authority, Revenue
Refunding Bonds (Wellesley College), 5%, 7/01/33 1,500 1,442,460
----------------------------------------------------------------------------------------------------------
The Massachusetts Health & Education Tax-Exempt Trust
Schedule of Investments November 30, 2008 (Unaudited)
(Percentages shown are based on Net Assets)
Par
Municipal Bonds (000) Value
----------------------------------------------------------------------------------------------------------------------------------
Massachusetts State Industrial Finance Agency, Health Care Facility
Revenue Bonds (Age Institute of Massachusetts Project), 8.05%, 11/01/25 $ 695 $ 647,754
----------------------------------------------------------------------------------------------------------
Massachusetts State Industrial Finance Agency, PCR (General Motors
Corporation), 5.55%, 4/01/09 1,000 450,000
----------------------------------------------------------------------------------------------------------
Rail Connections, Inc., Massachusetts, Capital Appreciation Revenue
Bonds (Route 128 Parking Garage), Series B, 6.53%, 7/01/09 (c)(d)(m) 1,000 498,700
----------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds - 162.6% 38,810,708
----------------------------------------------------------------------------------------------------------------------------------
Municipal Bonds Transferred to
Tender Option Bond Trusts (n)
----------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 8.0% Massachusetts State School Building Authority, Dedicated Sales Tax
Revenue Bonds, Series A, 5%, 8/15/30 (o) 2,010 1,904,894
----------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds Transferred to
Tender Option Bond Trusts - 8.0% 1,904,894
----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost - $46,043,517*) - 170.6% 40,715,602
Other Assets Less Liabilities - 12.6% 3,003,422
Liability for Trust Certificates, Including
Interest Expense and Fees Payable - (5.7)% (1,352,462)
Preferred Shares, at Redemption Value - (77.5)% (18,506,495)
-----------
Net Assets Applicable to Common Shares - 100.0% $23,860,067
===========
* The cost and unrealized appreciation (depreciation) of investments as of
November 30, 2008, as computed for federal income tax purposes, were as
follows:
Aggregate cost $ 44,536,296
==============
Gross unrealized appreciation $ 701,035
Gross unrealized depreciation (5,861,324)
--------------
Net unrealized depreciation $ (5,160,289)
==============
(a) AMBAC Insured.
(b) XL Capital Insured.
(c) U.S. government securities, held in escrow, are used to pay interest on
this security as well as to retire the bond in full at the date indicated,
typically at a premium to par.
(d) ACA Insured.
(e) Radian Insured.
(f) Assured Guaranty Insured.
(g) GNMA Collateralized.
(h) MBIA Insured.
(i) FGIC Insured.
(j) Variable rate security. Rate shown is as of report date. Maturity shown is
the final maturity date.
(k) Security may have a maturity of more than one year at the time of
issuance, but has variable rate and demand features that qualify it as a
short-term security.
(l) Connie Lee Insured.
(m) Represents a zero-coupon bond. Rate shown reflects the effective yield at
the time of purchase.
(n) Securities represent bonds transferred to a tender option bond trust in
exchange for which the Trust acquired residual interest certificates.
These securities serve as collateral in a financing transaction.
(o) FSA Insured.
The Massachusetts Health & Education Tax-Exempt Trust
Schedule of Investments November 30, 2008 (Unaudited)
o Effective September 1, 2008, the Trust adopted Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" ("FAS 157"). FAS 157 clarifies the definition of fair
value, establishes a framework for measuring fair values and requires
additional disclosures about the use of fair value measurements. Various
inputs are used in determining the fair value of investments, which are as
follows:
o Level 1 - price quotations in active markets/exchanges for
identical securities
o Level 2 - other observable inputs (including, but not limited
to: quoted prices for similar assets or liabilities in markets
that are not active, inputs other than quoted prices that are
observable for the assets or liabilities (such as interest
rates, yield curves, volatilities, prepayment speeds, loss
severities, credit risks, and default rates) or other
market-corroborated inputs)
o Level 3 - unobservable inputs based on the best information
available in the circumstance, to the extent observable inputs
are not available (including the Trust's own assumption used
in determining the fair value of investments)
The inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. For
information about the Trust's policy regarding valuation of investments and
other significant accounting policies, please refer to the Trust's most recent
financial statements as contained in its semi-annual report.
The following table summarizes the inputs used as of November 30, 2008 in
determining the fair valuation of the Trust's investments:
--------------------------------------------------------------------------------
Valuation Investments in
Inputs Securities
--------------------------------------------------------------------------------
Level 1 --
Level 2 $ 40,715,602
Level 3 --
--------------------------------------------------------------------------------
Total $ 40,715,602
=============
Item 2 - Controls and Procedures
2(a) - The registrant's principal executive and principal financial officers
or persons performing similar functions have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act")) are effective as of a date within 90 days of the filing of
this report based on the evaluation of these controls and procedures
required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under
the Securities Exchange Act of 1934, as amended.
2(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act)
that occurred during the registrant's last fiscal quarter that have
materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 3 - Exhibits
Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
The Massachusetts Health & Education Tax-Exempt Trust
By: /s/ Donald C. Burke
-----------------------
Donald C. Burke
Chief Executive Officer of
The Massachusetts Health & Education Tax-Exempt Trust
Date: January 20, 2009
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/ Donald C. Burke
-----------------------
Donald C. Burke
Chief Executive Officer (principal executive officer) of
The Massachusetts Health & Education Tax-Exempt Trust
Date: January 20, 2009
By: /s/ Neal J. Andrews
-----------------------
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
The Massachusetts Health & Education Tax-Exempt Trust
Date: January 20, 2009