UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-07660
Name of Fund: The Massachusetts Health & Education Tax-Exempt Trust (MHE)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, The
Massachusetts Health & Education Tax-Exempt Trust, 55 East 52nd Street, New York, NY
10055
Registrants telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 08/31/2011
Date of reporting period: 11/30/2010
Item 1 Schedule of Investments
Schedule of Investments November 30, 2010 (Unaudited)
The Massachusetts Health & Education Tax-Exempt Trust (MHE)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
Massachusetts 143.3% | |||
Corporate 4.2% | |||
Massachusetts Development Finance | |||
Agency, RB, Ogden Haverhill Project, | |||
Series A, AMT, 6.70%, 12/01/14 | $ 255 | $ 257,619 | |
Massachusetts Health & Educational | |||
Facilities Authority, RB, Cape Cod | |||
Healthcare Obligor (AGC), 5.00%, | |||
11/15/31 | 1,000 | 987,190 | |
1,244,809 | |||
Education 77.6% | |||
Massachusetts Development Finance | |||
Agency, RB: | |||
Boston University, Series T-1 | |||
(AMBAC), 5.00%, 10/01/39 | 1,000 | 998,420 | |
College Issue, Series B (Syncora), | |||
5.25%, 7/01/33 | 860 | 864,085 | |
College of Pharmacy & Allied Health, | |||
Series D (AGC), 5.00%, 7/01/27 | 500 | 514,830 | |
Foxborough Regional Charter | |||
School, Series A, 7.00%, 7/01/42 | 250 | 255,933 | |
Smith College, 5.00%, 7/01/35 | 2,000 | 2,007,220 | |
WGBH Educational Foundation, | |||
Series A (AMBAC), 5.75%, 1/01/42 | 1,100 | 1,174,965 | |
Wheeler School Issue, 6.50%, | |||
12/01/29 | 540 | 540,200 | |
Massachusetts Development Finance | |||
Agency, Refunding RB: | |||
Boston University, Series P, 5.45%, | |||
5/15/59 | 1,500 | 1,534,845 | |
Clark University (Syncora), 5.13%, | |||
10/01/35 | 500 | 501,130 | |
Western New England, Series A | |||
(AGC), 5.00%, 9/01/33 | 250 | 248,300 | |
Wheelock College, Series C, 5.25%, | |||
10/01/37 | 1,000 | 916,650 | |
Williston Northampton School | |||
Project (Syncora), 5.00%, 10/01/25 | 500 | 489,205 | |
Worcester Polytechnic Institute | |||
(NPFGC), 5.00%, 9/01/27 | 1,985 | 2,010,944 |
Par | |||
Municipal Bonds | (000) | Value | |
Massachusetts (continued) | |||
Education (concluded) | |||
Massachusetts Health & Educational | |||
Facilities Authority, RB: | |||
Harvard University, Series B, | |||
5.00%, 10/01/38 | $ 400 | $ 418,340 | |
Harvard University, Series FF, | |||
5.13%, 7/15/37 | 850 | 853,171 | |
Northeastern University, Series R, | |||
5.00%, 10/01/33 | 225 | 225,173 | |
Springfield College, 5.63%, | |||
10/15/40 | 500 | 504,655 | |
Tufts University, 5.38%, 8/15/38 | 1,000 | 1,057,730 | |
University of Massachusetts, | |||
Series C (NPFGC), 5.13%, 10/01/34 | 230 | 230,163 | |
Massachusetts Health & Educational | |||
Facilities Authority, Refunding RB: | |||
Berklee College of Music, Series A, | |||
5.00%, 10/01/37 | 1,000 | 998,460 | |
Boston College, Series N, 5.13%, | |||
6/01/37 | 1,000 | 1,028,670 | |
Harvard University, Series A, 5.50%, | |||
11/15/36 | 100 | 109,281 | |
Tufts University, Series M, 5.50%, | |||
2/15/27 | 1,000 | 1,168,420 | |
Wellesley College, 5.00%, 7/01/33 | 1,500 | 1,524,405 | |
Massachusetts Health & Educational | |||
Facilities Authority, Wheaton College, | |||
Series D, 6.00%, 1/01/18 | 950 | 950,209 | |
Massachusetts State College Building | |||
Authority, RB, Series A (AMBAC), | |||
5.00%, 5/01/31 | 1,000 | 1,022,330 | |
Massachusetts State College Building | |||
Authority, Refunding RB, Series B | |||
(Syncora), 5.50%, 5/01/39 | 825 | 895,438 | |
23,043,172 | |||
Health 48.9% | |||
Massachusetts Development Finance | |||
Agency, RB: | |||
First Mortgage, Edgecombe Project, | |||
Series A, 6.75%, 7/01/21 | 855 | 872,955 | |
First Mortgage, Overlook | |||
Communities, Series A, 6.13%, | |||
7/01/24 | 850 | 737,196 | |
Seven Hills Foundation & Affiliates | |||
(Radian), 5.00%, 9/01/35 | 500 | 402,000 |
Portfolio Abbreviations
To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many of the securities have been abbreviated
according to the following list:
AGC | Assured Guaranty Corp. | HFA | Housing Finance Agency |
AGM | Assured Guaranty Municipal Corp. | HRB | Housing Revenue Bonds |
AMBAC | American Municipal Bond Assurance Corp. | NPFGC | National Public Finance Guarantee Corp. |
AMT | Alternative Minimum Tax (subject to) | RB | Revenue Bonds |
BHAC | Berkshire Hathaway Assurance Corp. | VRDN | Variable Rate Demand Notes |
ERB | Education Revenue Bonds |
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
NOVEMBER 30, 2010
1
Schedule of Investments(continued)
The Massachusetts Health & Education Tax-Exempt Trust (MHE)
(Percentages shown are based on Net Assets)
Par | |||
Municipal Bonds | (000) | Value | |
Massachusetts (continued) | |||
Health (concluded) | |||
Massachusetts Development Finance | |||
Agency, Refunding RB: | |||
Carleton-Willard Village, 5.63%, | |||
12/01/30 | $ 500 | $ 494,380 | |
First Mortgage, Brookhaven, | |||
Series A (Radian), 5.00%, 3/01/35 | 1,250 | 1,041,137 | |
Massachusetts Health & Educational | |||
Facilities Authority, RB: | |||
Baystate Medical Center, Series F, | |||
5.75%, 7/01/33 | 1,000 | 1,006,400 | |
Berkshire Health System, Series E, | |||
6.25%, 10/01/31 | 350 | 353,122 | |
Berkshire Health System, Series F | |||
(AGC), 5.00%, 10/01/19 | 1,000 | 1,049,710 | |
Children's Hospital, Series M, 5.25%, | |||
12/01/39 | 600 | 614,700 | |
Children's Hospital, Series M, 5.50%, | |||
12/01/39 | 500 | 521,260 | |
Lahey Clinic Medical Center, Series | |||
D, 5.25%, 8/15/37 | 1,000 | 977,450 | |
Milford-Whitinsville Hospital, Series | |||
D, 6.35%, 7/15/12 (a) | 750 | 824,745 | |
Southcoast Health Obligation, Series | |||
D, 5.00%, 7/01/39 | 500 | 477,310 | |
Winchester Hospital, 5.25%, | |||
7/01/38 | 1,000 | 924,700 | |
Massachusetts Health & Educational | |||
Facilities Authority, Refunding RB: | |||
Caregroup, Series E-1, 5.00%, | |||
7/01/28 | 500 | 480,740 | |
Christopher House, Series A, 6.88%, | |||
1/01/29 | 470 | 449,626 | |
Healthcare System, Covenant, | |||
6.00%, 1/01/12 (a) | 170 | 181,747 | |
Healthcare System, Covenant, | |||
6.00%, 1/01/12 (a) | 85 | 90,874 | |
Healthcare System, Covenant, | |||
6.00%, 7/01/22 | 630 | 645,410 | |
Healthcare System, Covenant, | |||
6.00%, 7/01/31 | 315 | 319,791 | |
Partners Healthcare System, Series | |||
B, 5.25%, 7/01/29 | 1,000 | 1,002,930 | |
Valley Regional Health System, | |||
Series C (AMBAC), 5.75%, 7/01/18 | 395 | 396,351 | |
Massachusetts Industrial Finance | |||
Agency, RB, Age Institute of | |||
Massachusetts Project, 8.05%, | |||
11/01/25 | 655 | 655,485 | |
14,520,019 | |||
Housing 9.5% | |||
Massachusetts HFA, HRB, Series B, AMT, | |||
5.50%, 6/01/41 | 495 | 483,555 | |
Massachusetts HFA, Refunding HRB, | |||
Series F, AMT, 5.70%, 6/01/40 | 970 | 975,568 | |
Massachusetts HFA, Refunding RB, AMT: | |||
Series 132, 5.38%, 12/01/27 | 400 | 409,352 | |
Series C, 5.35%, 12/01/42 | 1,000 | 960,110 | |
2,828,585 |
Par | |||
Municipal Bonds | (000) | Value | |
Massachusetts (concluded) | |||
State 3.1% | |||
Massachusetts Development Finance | |||
Agency, ERB, Middlesex School | |||
Project, 5.00%, 9/01/33 | $ 400 | $ 402,012 | |
Massachusetts State College Building | |||
Authority, RB, Series A, 5.50%, | |||
5/01/39 | 500 | 527,530 | |
929,542 | |||
Total Municipal Bonds in Massachusetts | 42,566,127 | ||
Puerto Rico 12.3% | |||
County/City/Special District/School District 3.5% | |||
Puerto Rico Sales Tax Financing Corp., | |||
Refunding RB, First Sub-Series C: | |||
6.00%, 8/01/39 | 510 | 539,860 | |
(AGM), 5.13%, 8/01/42 | 500 | 500,530 | |
1,040,390 | |||
State 3.5% | |||
Puerto Rico Sales Tax Financing Corp., | |||
RB, First Sub-Series A, 5.75%, | |||
8/01/37 | 1,000 | 1,031,570 | |
Utilities 5.3% | |||
Puerto Rico Electric Power Authority, RB, | |||
Series WW, 5.50%, 7/01/38 | 1,000 | 1,009,820 | |
Puerto Rico Electric Power Authority, | |||
Refunding RB, Series VV (BHAC), | |||
5.25%, 7/01/25 | 500 | 553,920 | |
1,563,740 | |||
Total Municipal Bonds in Puerto Rico | 3,635,700 | ||
Total Municipal Bonds 155.6% | 46,201,827 | ||
Municipal Bonds Transferred to Tender | |||
Option Bond Trusts (b) | |||
Massachusetts 7.0% | |||
State 7.0% | |||
Massachusetts School Building | |||
Authority, RB, Series A (AGM), 5.00%, | |||
8/15/30 | 2,010 | 2,070,598 | |
Total Municipal Bonds Transferred to | |||
Tender Option Bond Trusts 7.0% | 2,070,598 | ||
Total Long-Term Investments | |||
(Cost $48,296,974) 162.6% | 48,272,425 |
2 THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
NOVEMBER 30, 2010
Schedule of Investments(concluded)
The Massachusetts Health & Education Tax-Exempt Trust (MHE)
(Percentages shown are based on Net Assets)
Par | ||
Short-Term Securities | (000) | Value |
Massachusetts 1.0% | ||
Massachusetts Health & Educational | ||
Facilities Authority, Refunding RB, | ||
VRDN, Partners Healthcare System, | ||
Series D-1, 0.26%, 12/01/10 (c) | $ 300 | $ 300,000 |
Shares | ||
Money Market Fund 0.7% | ||
BIF Massachusetts Municipal Money | ||
Fund 0.00% (d)(e) | 206,684 | 206,684 |
Total Short-Term Securities | ||
(Cost $506,684) 1.7% | 506,684 | |
Total Investments | ||
(Cost $48,803,658*) 164.3% | 48,779,109 | |
Other Assets Less Liabilities 2.5% | 758,655 | |
Liability for Trust Certificates, Including Interest | ||
Expense and Fees Payable (4.5)% | (1,340,689) | |
Preferred Shares, at Redemption Value (62.3)% | (18,501,344) | |
Net Assets Applicable to Common Shares 100.0% | $ 29,695,731 |
* The cost and unrealized appreciation (depreciation) of investments as of
November 30, 2010, as computed for federal income tax purposes, were
as follows:
Aggregate cost | $ 47,452,227 |
Gross unrealized appreciation | $ 898,420 |
Gross unrealized depreciation | (911,133) |
Net unrealized depreciation | $ (12,713) |
(a) US government securities, held in escrow, are used to pay interest on this
security as well as to retire the bond in full at the date indicated, typically
at a premium to par.
(b) Securities represent bonds transferred to a tender option bond trust in
exchange for which the Trust acquired residual interest certificates. These
securities serve as collateral in a financing transaction.
(c) Variable rate security. Rate shown is as of report date and maturity shown
is the date the principal owed can be recovered through demand.
(d) Investments in companies considered to be an affiliate of the Trust during
the period, for purposes of Section 2(a)(3) of the Investment Company Act
of 1940, as amended, were as follows:
______________________________________________________________________________________________________________________________________________________________________________________________________________
Shares | Shares | |||
Held at | Held at | |||
August 31, | Net | November 30, | ||
Affiliate | 2010 | Activity | 2010 | Income |
BIF | ||||
Massachusetts | ||||
Municipal | ||||
Money Fund | 1,455,666 | (1,248,982) | 206,684 | $ - |
(e) Represents the current yield as of report date. |
Fair Value Measurements - Various inputs are used in determining the fair
value of investments, which are as follows:
Level 1 price quotations in active markets/exchanges for identical
assets and liabilities
Level 2 other observable inputs (including, but not limited to: quoted
prices for similar assets or liabilities in markets that are active, quoted
prices for identical or similar assets or liabilities in markets that are not
active, inputs other than quoted prices that are observable for the assets
or liabilities (such as interest rates, yield curves, volatilities, prepayment
speeds, loss severities, credit risks and default rates) or other market-
corroborated inputs)
Level 3 unobservable inputs based on the best information available in
the circumstances, to the extent observable inputs are not available
(including the Trust's own assumptions used in determining the fair value
of investments)
The inputs or methodologies used for valuing securities are not necessarily
an indication of the risk associated with investing in those securities. For
information about the Trust's policy regarding valuation of investments and
other significant accounting policies, please refer to the Trusts most recent
financial statements as contained in its annual report.
The following table summarizes the inputs used as of November 30, 2010 in
determining the fair valuation of the Trust's investments:
Valuation Inputs | Level 1 | Level 2 | Level 3 | Total |
Assets: | ||||
Investments in Securities: | ||||
Long-Term | ||||
Investments1 | | $ 48,272,425 | | $ 48,272,425 |
Short-Term | ||||
Securities | $ 206,684 | 300,000 | | 506,684 |
Total | $ 206,684 | $ 48,272,425 | | $ 48,779,109 |
1 See above Schedule of Investments for values in each sector.
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
NOVEMBER 30, 2010
3
Item 2 Controls and Procedures
2(a) The registrant's principal executive and principal financial officers or persons performing
similar functions have concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the
31940 Act3)) areeffective 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/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer (principal executive officer) of
The Massachusetts Health & Education Tax-Exempt Trust
Date: January 26, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
By: /s/ Anne F. Ackerley
Anne F. Ackerley
Chief Executive Officer (principal executive officer) of
The Massachusetts Health & Education Tax-Exempt Trust
Date: January 26, 2011
By: /s/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
The Massachusetts Health & Education Tax-Exempt Trust
Date: January 26, 2011