AQUILA TAX-FREE TRUST OF ARIZONA

SCHEDULE OF INVESTMENTS

June 30, 2023

(unaudited)

 

Principal
Amount
  General Obligation Bonds (22.4%)   Ratings Moody's,
S&P and Fitch
  Value   (a)
                 
    City (7.0%)            
                 
    Buckeye Jackrabbit Trail Sanitary Sewer Improvement District            
$   175,000   6.250%, 01/01/29   NR/A-/NR   $   177,438    
                 
    Chandler, Arizona            
3,850,000   5.000%, 07/01/24   Aaa/AAA/AAA   3,924,305    
                 
    Gilbert Improvement District No. 20            
460,000   5.100%, 01/01/29   Aa1/AA-/NR   464,085    
                 
    Goodyear McDowell Road Commercial Corridor Improvement District            
805,000   3.250%, 01/01/27 BAMAC Insured   Aa2/AA/NR   814,249    
                 
    Scottsdale, Arizona            
1,500,000   4.000%, 07/01/40   Aaa/AAA/NR   1,518,405    
1,250,000   4.000%, 07/01/41   Aaa/AAA/NR   1,256,175    
                 
    Tempe, Arizona            
2,000,000   5.000%, 07/01/24   NR/AAA/AAA   2,037,820    
                 
    Tempe Improvement District (Pier Town Lake)            
1,000,000   5.000%, 01/01/29   Aa2/NR/NR   1,013,230    
                 
    Tucson, Arizona            
3,000,000   5.000%, 07/01/24   Aa3/AA/AAA   3,057,300    
                 
    Total City       14,263,007    
                 
    Community College (0.5%)            
                 
    Pinal Co. Community College District            
1,000,000   3.000%, 07/01/34   NR/AA-/NR   956,130    
                 
    County (5.0%)            
                 
    Maricopa Co. Special Health Care District            
2,500,000   5.000%, 07/01/25   Aa3/NR/AA-   2,587,950    
3,000,000   5.000%, 07/01/32   Aa3/NR/AA-   3,290,760    
1,500,000   5.000%, 07/01/34   Aa3/NR/AA-   1,639,245    
                 
    Yavapai Co. Jail District            
1,650,000   4.000%, 07/01/33 BAMAC Insured   NR/AA/AA   1,721,792    
                 
    Yuma Co. Free Library District            
1,000,000   4.000%, 07/01/29   Aa3/NR/AAA   1,023,000    
                 
    Total County       10,262,747    

 

 
 
 

 

    School District (7.8%)            
                 
    Gila Co. Unified School District No. 10 (Payson)            
$1,000,000   5.000%, 07/01/28   Aa2/NR/NR   $1,017,440    
                 
    Maricopa Co. Elementary School District No. 1 (Phoenix)            
500,000   4.000%, 07/01/31 BAMAC Insured   NR/AA/NR   519,110    
1,455,000   5.000%, 07/01/41 AGMC Insured   NR/AA/NR   1,606,233    
                 
    Maricopa Co. Elementary School District No. 40 (Glendale)            
2,050,000   2.000%, 07/01/35 AGMC Insured   NR/AA/AA+   1,663,657    
                 
    Maricopa Co. Elementary School District No. 62 (Union)            
580,000   4.000%, 07/01/32 BAMAC Insured   NR/AA/NR   600,561    
300,000   4.000%, 07/01/33 BAMAC Insured   NR/AA/NR   310,449    
375,000   4.000%, 07/01/34 BAMAC Insured   NR/AA/NR   387,379    
                 
    Maricopa Co. Elementary School District No. 66 (Roosevelt)            
1,100,000   5.000%, 07/01/40 BAMAC Insured   A1/AA/NR   1,209,626    
                 
    Maricopa Co. High School District No. 210 (Phoenix)            
500,000   4.000%, 07/01/26   Aa1/AA/AAA   509,090    
                 
    Maricopa Co. Unified School District No. 11 (Peoria)            
1,490,000   4.000%, 07/01/25   Aa3/AA-/NR   1,490,939    
    Maricopa Co. Unified School District No. 48 (Scottsdale)            
2,350,000   3.000%, 07/01/34   Aa1/AA/NR   2,260,653    
                 
    Navajo Co. Unified School District No. 10 (Show Low)            
500,000   4.000%, 07/01/31 AGMC Insured   NR/AA/NR   517,965    
                 
    Navajo Co. Unified School District No. 32 (Blue Ridge)            
400,000   5.000%, 07/01/29 AGMC Insured   NR/AA/NR   428,432    
                 
    Pima Co. Unified School District No. 6 (Marana)            
1,000,000   4.250%, 07/01/32 AGMC Insured   NR/AA/NR   1,021,440    
1,000,000   4.000%, 07/01/37 AGMC Insured   NR/AA/NR   1,013,840    
                 
    Pima Co. Unified School District No. 12 (Sunnyside)            
1,050,000   4.000%, 07/01/28 BAMAC Insured   NR/AA/NR   1,050,851    
                 
    Santa Cruz Co. Unified School District No. 35 (Santa Cruz Valley)            
300,000   3.000%, 07/01/36 AGMC Insured   NR/AA/NR   283,176    
                 
    Total School District       15,890,841    
                 
    Special District (2.1%)            
                 
    Eastmark Community Facilities District No. 1            
360,000   4.000%, 07/15/34 AGMC Insured   NR/AA/NR   373,720    
                 
    Estrella Mountain Ranch Community Facilities District            
155,000   5.000%, 07/15/32 AGMC Insured   NR/AA/NR   164,988    
                 
    Gladden Farms Phase II Community Facilities District            
300,000   5.000%, 07/15/47 BAMAC Insured   NR/AA/NR   313,197    

 

 
 
 

 

    Goodyear Community Facilities Utilities District No. 1            
$500,000   4.000%, 07/15/28   Aa2/A-/NR   $503,285    
460,000   4.000%, 07/15/32   Aa2/A-/NR   471,118    
                 
    Merrill Ranch Community Facilities District #2            
680,000   6.750%, 07/15/38   NR/BBB/NR   681,693    
                 
    Mystic Lake Pleasant Heights Community Facilities District            
555,000   3.000%, 07/15/28 BAMAC Insured   NR/AA/NR   542,340    
                 
    Verrado Community Facilities Utilities District No. 1            
500,000   6.000%, 07/15/33 144A   NR/NR/NR*   500,105    
                 
    Vistancia Community Facilities District            
850,000   4.000%, 07/15/25 BAMAC Insured   Aa2/AA/NR   863,821    
                 
    Total Special District       4,414,267    
                 
    Total General Obligation Bonds       45,786,992    
                 
    Revenue Bonds (66.9%)            
                 
    Airport (7.5%)            
                 
    Phoenix Civic Improvement Corp. Airport Bonds            
4,000,000   4.000%, 07/01/40   Aa3/A+/NR   3,947,880    
2,595,000   5.000%, 07/01/27 AMT   Aa2/AA-/NR   2,743,460    
3,850,000   5.000%, 07/01/31 AMT   Aa2/AA-/NR   4,067,371    
2,900,000   5.000%, 07/01/31 AMT   Aa2/AA-/NR   3,101,376    
1,300,000   5.000%, 07/01/33 AMT   Aa3/A+/NR   1,404,130    
                 
    Total Airport       15,264,217    
                 
    Charter Schools (2.9%)            
                 
    Arizona Industrial Development Authority (Candeo Schools)            
500,000   3.375%, 07/01/41 State Enhanced   NR/AA-/NR   419,390    
                 
    Arizona Industrial Development Authority (Equitable Schools)            
2,000,000   4.000%, 11/01/38   NR/A/NR   1,916,540    
2,000,000   4.000%, 11/01/40   NR/A/NR   1,878,800    
                 
    Arizona Industrial Development Authority (Greathearts Academies)            
1,000,000   3.000%, 07/01/37 State Enhanced   NR/AA-/NR   862,080    
                 
    Phoenix Industrial Development Authority (Macombs Facility Project)            
315,000   5.000%, 07/01/33   NR/BBB-/NR   334,023    
325,000   4.000%, 07/01/34   NR/BBB-/NR   316,160    
315,000   4.000%, 07/01/35   NR/BBB-/NR   303,087    
                 
    Total Charter Schools       6,030,080    
                 

 

 
 
 

 

    Electric (7.6%)            
                 
    Salt River Agricultural Improvement & Power District            
$3,530,000   5.000%, 01/01/24   Aa1/AA+/NR   $3,562,405    
3,000,000   4.000%, 01/01/41   Aa1/AA+/NR   3,019,740    
1,000,000   5.000%, 01/01/43   Aa1/AA+/NR   1,118,490    
4,000,000   5.000%, 01/01/47   Aa1/AA+/NR   4,425,080    
3,100,000   5.000%, 01/01/50   Aa1/AA+/NR   3,413,751    
                 
    Total Electric       15,539,466    
                 
    Excise Tax (4.2%)            
                 
    Buckeye Excise Tax            
400,000   4.000%, 07/01/36   NR/AA/AA   407,256    
                 
    Cottonwood Pledged Revenue Obligations            
500,000   5.000%, 07/01/30 AGMC Insured   NR/AA/NR   517,100    
                 
    Flagstaff Pledged Revenue            
1,395,000   4.250%, 07/01/33   NR/AA/NR   1,444,648    
                 
    Phoenix Civic Improvement Corp. (Civic Plaza)            
2,000,000   5.500%, 07/01/27 BHAC/FGIC Insured   Aa1/AA+/NR   2,207,060    
1,000,000   5.500%, 07/01/23 NPFG/FGIC Insured   Aa2/AA/NR   1,000,000    
                 
    Santa Cruz Co. Jail District            
1,655,000   5.000%, 07/01/28 AGMC Insured   NR/AA/NR   1,761,748    
                 
    Scottsdale Municipal Property Corp. (Aviation)            
1,100,000   5.000%, 07/01/28 AMT   Aa1/AAA/AA+   1,166,308    
                 
    Total Excise Tax       8,504,120    
                 
    Healthcare (9.0%)            
                 
    Maricopa Co. Industrial Development Authority (Banner Health)            
500,000   4.000%, 01/01/48   NR/AA-/AA-   478,360    
5,000,000   5.000%, 01/01/48   NR/AA-/AA-   5,103,050    
2,000,000   5.000%, 01/01/53   NR/AA-/AA-   2,089,880    
                 
    Maricopa Co. Industrial Development Authority (HonorHealth)            
2,250,000   4.125%, 09/01/38   A2/NR/A+   2,251,845    
1,000,000   3.000%, 09/01/51   A2/NR/A+   716,880    
                 
    Phoenix Industrial Development Authority (Mayo Clinic) VRDO***            
2,650,000   3.620%, 11/15/52   Aa2/AA/NR   2,650,000    
                 
    Pima Co. Industrial Development Authority (Tucson Medical Center)            
1,150,000   5.000%, 04/01/33   NR/A/NR   1,259,354    
880,000   4.000%, 04/01/37   NR/A/NR   851,655    
250,000   3.000%, 04/01/51   NR/A/NR   177,353    
                 
    Yavapai Co. Industrial Development Authority (Yavapai Regional Medical Center)            
1,000,000   5.250%, 08/01/33   A2/NR/A+   1,000,740    
                 

 

 
 
 

 

    Yuma Industrial Development Authority (Yuma Regional Medical Center)            
$1,635,000   5.000%, 08/01/23   NR/A/NR   $1,636,504    
200,000   5.000%, 08/01/32   NR/A/NR   202,344    
                 
    Total Healthcare       18,417,965    
                 
    Higher Education (8.6%)            
                 
    Arizona Board of Regents (Arizona State University System) Green Bonds            
5,000,000   5.500%, 07/01/48   Aa2/AA/NR   5,769,750    
                 
    Arizona Board of Regents (Arizona State University System) VRDO***            
5,630,000   4.050%, 07/01/34   Aa2/AA/NR   5,630,000    
                 
    Arizona Board of Regents (Northern Arizona University) Speed Stimulus Plan for Economic & Educational Development            
2,090,000   5.000%, 08/01/29 AGMC Insured   A1/AA/NR   2,327,717    
                 
    Arizona Board of Regents (University of Arizona System) Speed Stimulus Plan for Economic & Educational Development            
1,000,000   3.125%, 08/01/39   Aa3/A+/NR   864,910    
                 
    Arizona Board of Regents (University of Arizona System)            
105,000   4.000%, 06/01/38   Aa2/AA-/NR   106,431    
                 
    Phoenix Industrial Development Authority (Downtown Phoenix Student Housing)            
200,000   5.000%, 07/01/26   Baa3/NR/NR   204,788    
400,000   5.000%, 07/01/33   Baa3/NR/NR   414,632    
1,250,000   5.000%, 07/01/42   Baa3/NR/NR   1,258,763    
                 
    Phoenix Industrial Development Authority (Downtown Phoenix Student Housing II)            
100,000   5.000%, 07/01/26   Baa3/NR/NR   102,394    
250,000   5.000%, 07/01/27   Baa3/NR/NR   258,480    
150,000   5.000%, 07/01/28   Baa3/NR/NR   156,792    
200,000   5.000%, 07/01/30   Baa3/NR/NR   210,230    
300,000   5.000%, 07/01/32   Baa3/NR/NR   313,722    
                 
    Total Higher Education       17,618,609    
                 
    Housing (1.8%)            
                 
    Arizona Industrial Development Authority Green Bond MTEB (Chandler Village Apartments Project)            
4,777,331   2.120%, 07/01/37 FNMA Insured Series 2020   Aaa/NR/NR   3,662,063    
                 
    Lease (2.5%)            
                 
    Arizona Board of Regents (Northern Arizona University) COP            
600,000   5.000%, 09/01/27   A2/A/NR   600,978    
                 
    Maricopa Co. Unified School District No. 60 (Higley) COP            
1,000,000   4.250%, 06/01/47 AGMC Insured   NR/AA/NR   1,002,070    

 

 
 
 

 

    Nogales Municipal Development Authority, Inc.            
$615,000   5.000%, 06/01/28 AGMC Insured   NR/AA/NR   $   649,871    
810,000   4.000%, 06/01/33 AGMC Insured   NR/AA/NR   845,057    
2,000,000   4.000%, 06/01/39 AGMC Insured   NR/AA/NR   2,022,620    
                 
    Total Lease       5,120,596    
                 
    Pollution Control (2.1%)            
                 
    Coconino Co. Pollution Control (Nevada Power Co.)            
2,000,000   4.125%, 09/01/32 AMT   A2/A+/NR   2,008,280    
1,000,000   3.750%, 03/01/39   A2/A+/NR   1,003,420    
                 
    Maricopa Co. Pollution Control (El Paso Electric Co.)            
375,000   3.600%, 02/01/40   Baa2/NR/BBB+   331,144    
250,000   3.600%, 04/01/40   Baa2/NR/BBB+   220,560    
                 
    Maricopa Co. Pollution Control (Southern California Edison Co.)            
1,000,000   2.400%, 06/01/35   A2/A-/A-   789,800    
                 
    Total Pollution Control       4,353,204    
                 
    Resource Recovery (4.5%)            
                 
    Chandler Industrial Development Authority (Intel Corporation Project)            
2,000,000   2.700%, 12/01/37 AMT (Mandatory Put Date 8/14/23)   A2/A/NR   1,996,220    
5,000,000   5.000%, 09/01/52 AMT   A2/A/NR   5,118,400    
                 
    Maricopa Co. Industrial Development Authority, (Waste Management Inc. Project)            
1,500,000   3.375%, 12/01/31 AMT (Mandatory Put Date 6/03/24)   NR/A-/NR   1,491,660    
                 
    Yavapai Co. Industrial Development Authority, (Waste Management Inc. Project)            
520,000   2.200%, 03/01/28 AMT (Mandatory Put Date 06/03/24)   NR/A-/NR   511,701    
                 
    Total Resource Recovery       9,117,981    
                 
    Sales Tax (2.7%)            
                 
    Arizona Sports & Tourism Authority (Multipurpose Stadium Facility Project)            
5,000,000   5.000%, 07/01/30 BAMAC Insured   A1/AA/A   5,580,650    
                 
    Senior Living Facilities (1.1%)            
                 
    Arizona Industrial Development Authority, Second Tier (Great Lakes Senior Living Communities)            
620,000   5.000%, 01/01/28   NR/CCC-/NR   488,616    
555,000   5.000%, 01/01/29   NR/CCC-/NR   428,238    
1,205,000   5.000%, 01/01/30   NR/CCC-/NR   898,966    
655,000   4.000%, 01/01/33   NR/CCC-/NR   399,524    
                 
    Total Senior Living Facilities       2,215,344    
                 

 

 
 
 

 

    Utility (4.6%)            
                 
    Greater Arizona Development Authority Revenue            
$   500,000   5.000%, 08/01/28 AGMC Insured   A1/AA+/NR   $   504,390    
                 
    Mesa Utility System            
5,000,000   5.000%, 07/01/36   Aa3/A+/NR   5,836,000    
                 
    Salt Verde Finance Corp. Gas Revenue            
3,000,000   5.250%, 12/01/28   A3/BBB+/NR   3,160,260    
                 
    Total Utility       9,500,650    
                 
    Water/Sewer (7.8%)            
                 
    Phoenix Civic Improvement Corp. Junior Lien Water System Revenue            
1,500,000   5.500%, 07/01/24 Series 2001 NPFG/FGIC Insured   Aa2/AAA/NR   1,535,460    
3,000,000   5.000%, 07/01/36 Series 2016   Aa2/AAA/NR   3,137,850    
6,365,000   5.000%, 07/01/45 Series 2021A   Aa2/AAA/NR   6,987,370    
                 
    Pima Co. Sewer System Revenue Refunding            
4,300,000   5.000%, 07/01/23   NR/AA/NR   4,300,000    
                 
    Total Water/Sewer       15,960,680    
                 
    Total Revenue Bonds       136,885,625    
                 
    Pre-Refunded Bonds (4.7%)††            
                 
    Pre-Refunded General Obligation Bonds (1.7%)            
                 
    School District (1.3%)            
                 
    Glendale Union High School District No. 205            
525,000   5.000%, 07/01/27 BAMAC Insured   NR/AA/NR   525,000    
                 
    Maricopa Co. Elementary School District No. 28 (Kyrene Elementary)            
250,000   5.500%, 07/01/30   Aaa/AA/NR   250,000    
                 
    Pima Co. Unified School District No. 6 (Marana)            
955,000   5.000%, 07/01/25   NR/A+/NR   955,000    
950,000   5.250%, 07/01/25 AGMC Insured   NR/AA/NR   950,000    
                 
    Total School District       2,680,000    
                 
    Special District (0.4%)            
                 
    Estrella Mountain Ranch Community Facilities District            
845,000   5.000%, 07/15/32 AGMC Insured   NR/AA/NR   914,594    
                 
    Total Pre-Refunded General Obligation Bonds       3,594,594    
                 

 

 
 
 

 

    Pre-Refunded Revenue Bonds (3.0%)            
                 
    Healthcare (2.3%)            
                 
    Arizona Health Facilities Authority (Banner Health)            
$2,000,000   5.000%, 01/01/44   NR/AA-/NR   $2,017,100    
                 
    Maricopa Co. Hospital Revenue (Sun Health)            
480,000   5.000%, 04/01/25   NR/NR/NR*   486,446    
2,125,000   5.000%, 04/01/35   NR/NR/NR*   2,153,539    
                 
    Total Healthcare       4,657,085    
                 
    Higher Education (0.7%)            
                 
    Northern Arizona University Speed Stimulus Plan for Economic & Educational Development            
1,445,000   5.000%, 08/01/38   A2/A/NR   1,446,835    
                 
    Total Pre-Refunded Revenue Bonds       6,103,920    
                 
    Total Pre-Refunded Bonds       9,698,514    
                 
    Total Municipal Bonds
(cost $197,597,749)
      192,371,131    
                 
Shares    Short-Term Investment (4.5%)            
                 
9,333,107   Dreyfus Treasury Obligations Cash Management - Institutional Shares, 5.00%** (cost $9,333,107)   Aaa-mf/AAAm/NR   9,333,107    
                 
    Total Investments
(cost $206,930,856-note b)
  98.5 %   201,704,238    
    Other assets less liabilities   1.5     3,034,362    
    Net Assets   100.0 %   $204,738,600    
                 
    Portfolio Distribution By Quality Rating   Percent of Investments†        
    Aaa of Moody's or AAA of S&P or Fitch   15.5 %        
    Pre-refunded bonds††   5.0          
    Aa of Moody's or AA of S&P or Fitch   60.4          
    A of Moody's or S&P or Fitch   14.9          
    Baa of Moody's or BBB of S&P or Fitch   2.7          
    CCC of S&P   1.2          
    Not Rated*   0.3          
        100.0 %        

 

 

 
 
 

 

PORTFOLIO ABBREVIATIONS:
AGMC - Assured Guaranty Municipal Corp.
AMT - Alternative Minimum Tax
BAMAC - Build America Mutual Assurance Co.
BHAC - Berkshire Hathaway Assurance Corp.
COP- Certificates of Participation
FGIC - Financial Guaranty Insurance Co.
FNMA - Federal National Mortgage Association
MTEB- Multifamily Tax-Exempt Mortgage-Backed Bonds
NPFG - National Public Finance Guarantee
NR - Not Rated
VRDO - Variable Rate Demand Obligation

 

 

* Any security not rated ("NR") by any of the Nationally Recognized Statistical Rating Organizations ("NRSRO") has been determined by the Investment Adviser to have sufficient quality to be ranked in the top four credit ratings if a credit rating were to be assigned by a NRSRO.
   
** The rate is an annualized seven-day yield at period end.
   
*** Variable rate demand obligations (VRDOs) are payable upon demand within the same day for securities with daily liquidity or seven days for securities with weekly liquidity.
   
Where applicable, calculated using the highest rating of the three NRSRO.  Percentages in this table do not include the Short-Term Investment.
   
†† Pre-refunded bonds are bonds for which U.S. Government Obligations usually have been placed in escrow to retire the bonds at their earliest call date.  
   
††† Illiquid securities: Represents 1.1% of net assets.
   
  Note: 144A – Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2023, these securities amounted to a value of $500,105 or 0.2% of net assets.

 

See accompanying notes to financial statements.

 

 
 
 

AQUILA TAX-FREE TRUST OF ARIZONA

NOTES TO FINANCIAL STATEMENTS

June 30, 2023

(unaudited)

 

(a) Securities valuation policies and other investment related disclosures are hereby incorporated by reference in the annual and semi-annual reports previously filed with the Securities and Exchange Commission on Form N-CSR. 
   
(b) At June 30, 2023, the net unrealized depreciation on investments, based on cost for federal income tax purposes of $206,418,789 amounted to $4,714,551, which consisted of aggregate gross unrealized appreciation of $1,843,331 and aggregate gross unrealized depreciation of $6,557,882.
   
(c) Fair Value Measurements: The Trust follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Trust’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Trust’s investments and are summarized in the following fair value hierarchy:
   
  Level 1 – Unadjusted quoted prices in inactive markets for identical assets or liabilities that the Trust has the ability to access.
   
  Level 2 – Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
   
  Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Trust’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
   
  The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
   
  The following is a summary of the valuation inputs, representing 100% of the Trust’s investments, used to value the Trust’s net assets as of June 30, 2023:

 

Valuation Inputs+   Investments
in Securities
Level 1 – Quoted Prices- Short-Term Investment   $ 9,333,107
Level 2 – Other Significant Observable Inputs- Municipal Bonds     192,371,131
Level 3 – Significant Unobservable Inputs    
Total   $ 201,704,238
+  See schedule of investments for a detailed listing of securities.