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Rating Action:

Moody's assigns ratings of Aa1 to VMTP shares issued by 4 Invesco closed-end funds

12 Oct 2012

New York, October 12, 2012 -- Moody's Investors Service has assigned ratings of Aa1 to Variable Rate Muni Term Preferred Shares (VMTP Shares) issued by four Invesco managed municipal closed-end funds in connection with the merger of eight national and three state funds into four national funds.

The funds and the ratings assigned to the newly issued VMTP Shares are, as follows:

Invesco Value Municipal Income Trust (IIM) -- $71.9 million, Series 2015/6-IIM-2, Aa1

Invesco Van Kampen Municipal Opportunity Trust (VMO) -- $180.6 million, Series 2015/6-VMO-2, Aa1

Invesco Quality Municipal Income Trust (IQI) -- $97.1 million, Series 2015/12-IQI-2, Aa1

Invesco Van Kampen Municipal Trust (VKQ) -- $84.1 million, Series 2015/12-VKQ-2, Aa1

At the same time Moody's affirmed the following outstanding VMTP shares:

Invesco Value Municipal Income Trust (IIM) -- $71.2 million, Series 2015/6-IIM, Aa1

Invesco Van Kampen Municipal Opportunity Trust (VMO) -- $187.0 million, Series 2015/6-VMO, Aa1

Invesco Quality Municipal Income Trust (IQI) -- $116.8 million, Series 2015/12-IQI, Aa1

Invesco Van Kampen Municipal Trust (VKQ) -- $178.7 million, Series 2015/12-VKQ, Aa1

RATINGS RATIONALE

The fund mergers, scheduled to take effect as of the open of business on October 15, 2012, will result in the transfer of substantially all of the assets and liabilities of eight national and three state funds into surviving four national funds as indicated below.

Invesco Value Municipal Bond Trust (IMC), Invesco Value Municipal Trust (IMT), and Invesco Value Municipal Securities (IMS) merged into Invesco Value Municipal Income Trust (IIM) (IMS does not have any outstanding VMTP Shares);

Invesco Van Kampen Select Sector Municipal Trust (VKL), Invesco Municipal Premium Income Trust (PIA), and Invesco Van Kampen Trust for Value Municipals (VIM) merged into Invesco Van Kampen Municipal Opportunity Trust (VMO);

Invesco Quality Municipal Securities (IQM) and Invesco Quality Municipal Investment Trust (IQT) merged into Invesco Quality Municipal Income Trust (IQI); and

Invesco Van Kampen Massachusetts Value Municipal Income Trust (VMV), Invesco Van Kampen Ohio Quality Municipal Trust (VOQ), and Invesco Van Kampen Trust for Investment Grade New Jersey Municipals (VTJ) merged into Invesco Van Kampen Municipal Trust (VKQ).

IIM will in turn issue common and VTMP Shares in replacement of the corresponding common and VMTP Shares of IMC and IMT and common shares in replacement of the corresponding common Shares of IMS.

VMO will in turn issue common and VMTP Shares in replacement of the corresponding common and VMTP Shares of VKL, PIA, and VIM.

IQI will in turn issue common and VMTP Shares in replacement of the corresponding common and VMTP Shares of IQM and IQT.

VKQ will in turn issue common and VMTP Shares in replacement of the corresponding common and VMTP Shares of VMV, VOQ, and VTJ.

Each VMTP share issued by IIM, VMO, IQI, and VKQ upon the reorganization will have substantially identical terms to the corresponding VMTP shares of IMC, IMT, VKL, PIA, VIM, IQM, IQT, VMV, VOQ, and VTJ, respectively, immediately before the reorganization. With the completion of this reorganization and the satisfaction of all of the obligations of IMC, IMT, VKL, PIA, VIM, IQM, IQT,VMV, VOQ, and VTJ, Moody's ratings of their VMTP Shares will be withdrawn.

Invesco Value Municipal Income Trust (IIM), Invesco Van Kampen Municipal Opportunity Trust (VMO), Invesco Quality Municipal Income Trust (IQI), and Invesco Van Kampen Municipal Trust (VKQ), with combined pro-forma total managed assets of about $1.1 billion, $1.6 billion, $1.2 billion, and $1.3 billion as of September 30, 2012, respectively, seek current income exempt from regular Federal income tax.

The ratings assigned to the VMTP shares are based on the following key rating factors:

Factor 1: Adjusted Leverage

Risk adjusted asset coverage ratios are strong and the risk of an Investment Company Act of 1940 ('40 Act) breach are low for each of the acquiring funds, IIM, VMO, IQI, and VKQ, based on a pro-forma analysis. These are 209%, 152%, 172%, and 162% and 5.55x, 2.85x, 3.77x, and 3.66 x, respectively, consistent with a score of Aaa.

The risk adjusted asset coverage ratio discounts portfolio assets based on the historical price volatility of a CEF's municipal debt securities and compares that value to the CEF's debt and preferred obligations.

The '40 Act breach metric assesses the risk that a fund will breach the regulatory coverage requirement imposed by the '40 Act, based on the fund's historical volatility and its current capital structure.

Factor 2: Portfolio Profile

The Portfolio Profile includes an assessment of the fund's assets, which evaluates the credit quality and liquidity of the fund's holdings. IIM, VMO, IQI and VKQ's asset profiles are considered strong and receive a score of Aa for this metric, reflecting the strong credit quality of each fund's municipal holdings, across various general obligation, tax obligation, revenue bonds, pre-refunded bonds as well as other security types. The strong credit quality of these assets is offset by weaker liquidity characteristics of municipal debt obligations which are not exchange traded and have modest daily trading volumes.

The Portfolio Profile factor also includes sector and issuer correlation metrics based on relative size and number of heterogeneous sectors and/or issuers.

Factor 3: Fixed Charge Coverage

The long-term ratings of the VMTP shares of IIM, VMO, IQI, and VKQ are further supported by high fixed charge coverage ratios of 22.5 times, 25.2 times, 20.6 times and 24.9 times respectively, calculated on a trailing one year basis, evidencing the strong capacity of IIM, VMO, IQI, and VKQ to meet periodic dividend payments from recurring earnings. These coverage levels are consistent with a score of Aaa for this metric.

Senior Rating Profile

The complete evaluation of the quantitative factors produces an indicative senior rating level for a CEF's leverage. In the case of these national municipal CEFs, the senior indicative rating is Aaa.

Relative Priority of Claim

In addition to assessing the key rating factors described above, Moody's considers the priority of claim of a fund's specific security types and any other qualitative factors relevant to the fund's credit profile. In the case of preferred securities, which is the instrument class associated with these ratings, a one-notch downward adjustment from the rating suggested by the key factors is made to reflect the weaker position of investors holding preferred stock relative to those holding senior unsecured debt obligations.

The principal methodology used in this rating was "Moody's Methodology for Rating Securities Issued by U.S. Closed-End Funds" published in May 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Information sources used to prepare the rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Dagmar H. Silva
Vice President - Senior Analyst
Managed Investments Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Daniel Serrao
Associate Managing Director
Managed Investments Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's assigns ratings of Aa1 to VMTP shares issued by 4 Invesco closed-end funds
No Related Data.
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