AllianceBernstein National Municipal Income Fund, Inc.

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-10573

ALLIANCEBERNSTEIN NATIONAL MUNICIPAL INCOME FUND, INC.

(Exact name of registrant as specified in charter)

1345 Avenue of the Americas, New York, New York 10105

(Address of principal executive offices) (Zip code)

Joseph J. Mantineo

AllianceBernstein L.P.

1345 Avenue of the Americas

New York, New York 10105

(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 221-5672

Date of fiscal year end: October 31, 2018

Date of reporting period: July 31, 2018

 

 

 


ITEM 1.

SCHEDULE OF INVESTMENTS.


AB National Municipal Income Fund

Portfolio of Investments

July 31, 2018 (unaudited)

 

     Principal
Amount
(000)
       U.S. $ Value  

MUNICIPAL OBLIGATIONS - 160.8%

       

Long-Term Municipal Bonds - 160.8%

       

Alabama - 3.8%

       

Jefferson County Board of Education/AL

       

Series 2018

       

5.00%, 2/01/46

   $ 10,000        $ 11,134,700  

State of Alabama Docks Department

       

AGM Series 2017A

       

5.00%, 10/01/34

     2,000          2,235,020  

AGM Series 2017C

       

5.00%, 10/01/36

     2,000          2,235,020  
       

 

 

 
              15,604,740  
       

 

 

 

Arizona - 1.1%

       

Salt Verde Financial Corp. (Citigroup, Inc.)

       

Series 2007

       

5.25%, 12/01/22-12/01/23

     4,150          4,665,633  
       

 

 

 

Arkansas - 0.5%

       

Pulaski County Public Facilities Board (Baptist Health)

       

Series 2014

       

5.00%, 12/01/42

     2,000          2,174,860  
       

 

 

 

California - 22.4%

       

Anaheim Public Financing Authority (City of Anaheim CA Lease)

       

Series 2014A

       

5.00%, 5/01/32-5/01/39

     5,500          6,199,175  

Bay Area Toll Authority

       

Series 2013S

       

5.00%, 4/01/32 (Pre-refunded/ETM)

     5,720          6,557,237  

California Econ Recovery

       

Series 2009A

       

5.25%, 7/01/21 (Pre-refunded/ETM)

     4,860          5,033,793  

California Pollution Control Financing Authority (Poseidon Resources Channelside LP)

       

Series 2012

       

5.00%, 7/01/37 (a)

     3,075          3,265,373  

California Statewide Communities Development Authority (Loma Linda University Medical Center)

       

Series 2016A

       

5.00%, 12/01/36 (a)

     800          856,616  

City of Los Angeles Department of Airports

       

Series 2009A

       

5.25%, 5/15/29

     5,700          5,863,989  

County of San Bernardino CA COP

       

Series 2009A

       

5.25%, 8/01/26

     1,455          1,506,885  

Los Angeles County Metropolitan Transportation Authority

       

(Los Angeles County Metropolitan Transportation Authority Sales Tax)

       

Series 2013B

       

5.00%, 7/01/34

             1,770          1,991,693  

Los Angeles Department of Water

       


     Principal
Amount
(000)
       U.S. $ Value  

Series 2013B

       

5.00%, 7/01/32

   $ 3,840        $ 4,353,446  

Los Angeles Department of Water & Power Power System Revenue

       

Series 2013A

       

5.00%, 7/01/30 (Pre-refunded/ETM) (b)

     90          102,207  

5.00%, 7/01/30

     6,165          6,925,884  

Series 2013B

       

5.00%, 7/01/30

             10,000          11,367,100  

San Bernardino County Transportation Authority

       

Series 2015-2

       

5.00%, 3/01/32-3/01/34 (c)

     11,340          12,829,540  

State of California

       

Series 2013

       

5.00%, 11/01/30

     5,800          6,585,030  

University of California

       

Series 2012G

       

5.00%, 5/15/31 (Pre-refunded/ETM) (b)

     3,175          3,557,524  

5.00%, 5/15/31

     3,825          4,233,931  

Series 2013A

       

5.00%, 5/15/30 (Pre-refunded/ETM) (b)

     2,480          2,850,909  

5.00%, 5/15/30-5/15/32

     7,375          8,320,530  
       

 

 

 
              92,400,862  
       

 

 

 

Colorado - 1.8%

       

City & County of Denver CO Airport System Revenue

       

(Denver Intl Airport)

       

Series 2013B

       

5.25%, 11/15/31

     6,680          7,573,450  
       

 

 

 

Connecticut - 10.1%

       

Connecticut State Health & Educational Facilities Authority

       

(Sacred Heart University, Inc.)

       

Series 2017I-1

       

5.00%, 7/01/42

     2,410          2,690,572  

State of Connecticut

       

Series 2013C

       

5.00%, 7/15/27

     7,165          7,823,320  

Series 2013E

       

5.00%, 8/15/29

     4,800          5,205,840  

Series 2015F

       

5.00%, 11/15/32

     5,000          5,515,600  

State of Connecticut Special Tax Revenue

       

Series 2011A

       

5.00%, 12/01/28

     5,000          5,375,350  

Series 2012

       

5.00%, 1/01/29

     13,855          15,058,030  
       

 

 

 
          41,668,712  
       

 

 

 

District of Columbia - 1.6%

       

District of Columbia

       

Series 2013A

       

5.00%, 6/01/29

     5,000          5,623,450  

Metropolitan Washington Airports Authority

       

Series 2016A

       


     Principal
Amount
(000)
       U.S. $ Value  

5.00%, 10/01/35

   $ 1,000        $ 1,126,090  
       

 

 

 
          6,749,540  
       

 

 

 

Florida - 8.7%

       

Alachua County Health Facilities Authority

       

(Shands Teaching Hospital and Clinics Obligated Group)

       

Series 2014A

       

5.00%, 12/01/44

     4,560          4,920,969  

Brevard County Health Facilities Authority

       

(Health First, Inc. Obligated Group)

       

Series 2014

       

5.00%, 4/01/33

     1,000          1,094,700  

City of Orlando FL

       

Series 2014A

       

5.25%, 11/01/33 (Pre-refunded/ETM)

     5,620          6,566,914  

County of Miami-Dade FL Aviation Revenue

       

Series 2014A

       

5.00%, 10/01/33

     1,000          1,116,520  

Florida Ports Financing Commission

       

Series 2011A

       

5.00%, 10/01/25-10/01/27

     4,205          4,571,081  

Halifax Hospital Medical Center

       

(Halifax Hospital Medical Center Obligated Group)

       

Series 2015

       

5.00%, 6/01/35

     2,655          2,915,270  

Miami Beach Health Facilities Authority

       

(Mount Sinai Medical Center of Florida, Inc.)

       

Series 2014

       

5.00%, 11/15/39

     9,250          9,796,027  

Putnam County Development Authority/FL

       

(Seminole Electric Cooperative, Inc.)

       

Series 2018A

       

5.00%, 3/15/42

     4,500          5,045,265  
       

 

 

 
          36,026,746  
       

 

 

 

Georgia - 1.3%

       

City of Atlanta Department of Aviation

       

(Hartsfield Jackson Atlanta Intl Airport)

       

Series 2014B

       

5.00%, 1/01/31-1/01/32

     4,675          5,285,092  
       

 

 

 

Hawaii - 2.5%

       

State of Hawaii

       

Series 2015E

       

4.00%, 10/01/35

     2,000          2,093,800  

State of Hawaii Airports System Revenue

       

Series 2010A

       

5.00%, 7/01/34

             5,000          5,291,850  

Series 2015A

       

5.00%, 7/01/45

     2,500          2,773,800  
       

 

 

 
              10,159,450  
       

 

 

 

Illinois - 10.1%

       

Chicago Board of Education

       

Series 2017C

       

5.00%, 12/01/34

     1,945          2,016,809  


     Principal
Amount
(000)
       U.S. $ Value  

Chicago O’Hare International Airport

       

Series 2016B

       

5.00%, 1/01/41

   $ 8,000        $ 8,815,840  

Series 2016C

       

5.00%, 1/01/38

     2,350          2,596,139  

Illinois Finance Authority

       

(Illinois Institute of Technology)

       

Series 2006A

       

5.00%, 4/01/31

     1,250          1,242,963  

Illinois Finance Authority

       

(OSF Healthcare System Obligated Group)

       

Series 2015A

       

5.00%, 11/15/45

     4,500          4,867,380  

Illinois State Toll Highway Authority

       

Series 2015B

       

5.00%, 1/01/40

     3,000          3,334,980  

State of Illinois

       

Series 2012

       

5.00%, 3/01/31

     1,000          1,033,020  

Series 2014

       

5.00%, 4/01/30-2/01/39

     12,070          12,574,795  

Series 2017D

       

5.00%, 11/01/28

     5,000          5,371,000  
       

 

 

 
          41,852,926  
       

 

 

 

Indiana - 0.3%

       

Indiana Finance Authority

       

(WVB East End Partners LLC)

       

Series 2013A

       

5.00%, 7/01/44

     1,250          1,330,450  
       

 

 

 

Iowa - 0.3%

       

Iowa Finance Authority

       

(Iowa Fertilizer Co. LLC)

       

Series 2013B

       

5.25%, 12/01/50

     1,205          1,280,385  
       

 

 

 

Kansas - 1.3%

       

City of Lawrence KS

       

(Lawrence Memorial Hospital/KS)

       

Series 2018

       

5.00%, 7/01/48

     5,000          5,539,550  
       

 

 

 

Kentucky - 2.3%

       

Kentucky Economic Development Finance Authority

       

(Next Generation Kentucky Information Highway)

       

Series 2015A

       

4.25%, 7/01/35

     1,000          999,990  

Kentucky Municipal Power Agency

       

NATL Series 2015A

       

5.00%, 9/01/30

     2,500          2,818,475  

Kentucky Turnpike Authority

       

Series 2013A

       

5.00%, 7/01/29

             5,000          5,577,000  
       

 

 

 
              9,395,465  
       

 

 

 

 


     Principal
Amount
(000)
       U.S. $ Value  

Maryland - 1.8%

       

Maryland Health & Higher Educational Facilities Authority

       

(Meritus Medical Center Obligated Group)

       

Series 2015

       

5.00%, 7/01/45

   $ 6,725        $ 7,224,129  
       

 

 

 

Massachusetts - 4.1%

       

Massachusetts School Building Authority

       

(Massachusetts School Building Authority Sales Tax)

       

Series 2011B

       

5.00%, 10/15/32

     13,000          14,127,750  

Series 2012B

       

5.00%, 8/15/30

     2,480          2,738,689  
       

 

 

 
          16,866,439  
       

 

 

 

Michigan - 8.7%

       

Detroit City School District

       

Series 2012A

       

5.00%, 5/01/26-5/01/27

     6,045          6,626,708  

Michigan Finance Authority

       

(Great Lakes Water Authority Water Supply System Revenue)

       

AGM Series 2014D-1

       

5.00%, 7/01/35

     1,250          1,380,238  

Michigan Finance Authority

       

(Henry Ford Health System Obligated Group)

       

Series 2016

       

4.00%, 11/15/36

     2,815          2,854,579  

Michigan Finance Authority

       

(Public Lighting Authority)

       

Series 2014B

       

5.00%, 7/01/34

     2,250          2,428,807  

Michigan Strategic Fund

       

(Detroit Renewable Energy Obligated Group)

       

Series 2013

       

8.50%, 12/01/30 (b)(d)(e)

     3,495          3,529,950  

Plymouth Educational Center Charter School

       

Series 2005

       

5.125%, 11/01/23 (f)

     2,140          1,794,090  

Wayne State University

       

Series 2009A

       

5.00%, 11/15/29 (Pre-refunded/ETM) (b)

     11,980          12,491,427  

5.00%, 11/15/29

     4,520          4,695,873  
       

 

 

 
              35,801,672  
       

 

 

 

Minnesota - 0.5%

       

City of Minneapolis MN

       

(Fairview Health Services Obligated Group)

       

Series 2015A

       

5.00%, 11/15/33

     2,000          2,259,960  
       

 

 

 

Nebraska - 2.9%

       

Central Plains Energy Project

       

(Goldman Sachs Group, Inc. (The))

       

Series 2017A

       

5.00%, 9/01/42

             10,000          11,864,400  
       

 

 

 


     Principal
Amount
(000)
       U.S. $ Value  

New Jersey - 11.4%

       

New Jersey Economic Development Authority

       

(New Jersey Economic Development Authority State Lease)

       

Series 2014P

       

5.00%, 6/15/31

   $ 2,500        $ 2,687,700  

Series 2016B

       

5.50%, 6/15/30

     5,000          5,715,950  

New Jersey Economic Development Authority

       

(NYNJ Link Borrower LLC)

       

Series 2013

       

5.125%, 1/01/34

     1,000          1,088,740  

New Jersey Health Care Facilities Financing Authority

       

(New Jersey Health Care Facilities Financing Authority State Lease)

       

Series 2017

       

5.00%, 10/01/36

     2,500          2,723,725  

New Jersey Health Care Facilities Financing Authority

       

(RWJ Barnabas Health Obligated Group)

       

Series 2014

       

5.00%, 7/01/44

     6,450          7,030,952  

New Jersey Transportation Trust Fund Authority

       

(New Jersey Transportation Fed Hwy Grant)

       

Series 2016

       

5.00%, 6/15/29

     4,750          5,295,015  

New Jersey Turnpike Authority

       

Series 2012B

       

5.00%, 1/01/29

     6,500          7,215,195  

Series 2013A

       

5.00%, 1/01/31 (Pre-refunded/ETM)

     5,000          5,579,900  

Tobacco Settlement Financing Corp./NJ

       

Series 2018A

       

5.00%, 6/01/46

     8,990          9,875,335  
       

 

 

 
              47,212,512  
       

 

 

 

New York - 25.2%

       

City of New York NY

       

Series 2012B

       

5.00%, 8/01/30

     5,070          5,591,956  

Series 2012I

       

5.00%, 8/01/28

     8,780          9,701,637  

Metropolitan Transportation Authority

       

Series 2012D

       

5.00%, 11/15/29

     4,000          4,426,200  

Series 2012F

       

5.00%, 11/15/27

     1,575          1,748,250  

Series 2013A

       

5.00%, 11/15/29 (Pre-refunded/ETM)

     1,830          2,088,304  

Series 2014B

       

5.25%, 11/15/34

     4,000          4,529,080  

Metropolitan Transportation Authority

       

(Metropolitan Transportation Authority Ded Tax)

       

Series 2016A

       

5.25%, 11/15/35 (c)

             14,260          16,700,456  

New York City Municipal Water Finance Authority

       


     Principal
Amount
(000)
       U.S. $ Value  

Series 2011HH

       

5.00%, 6/15/26

   $ 5,000        $ 5,430,750  

Series 2013D

       

5.00%, 6/15/34

     3,600          4,008,348  

New York City NY Transitional

       

Series 2007B

       

5.00%, 8/01/34-8/01/37 (c)

     10,000          11,356,560  

New York State Dormitory Authority

       

Series 2012D

       

5.00%, 2/15/29 (Pre-refunded/ETM) (b)

     1,135          1,250,679  

New York State Dormitory Authority

       

(State of New York Pers Income Tax)

       

Series 2012B

       

5.00%, 3/15/32

     7,600          8,327,928  

Series 2012D

       

5.00%, 2/15/29

     6,865          7,530,150  

Port Authority of New York & New Jersey

       

Series 2013-178

       

5.00%, 12/01/32

     4,400          4,871,504  

Series 2014-186

       

5.00%, 10/15/44

     8,000          8,799,200  

Ulster County Capital Resource Corp.

       

(Woodland Pond at New Paltz)

       

Series 2017

       

5.00%, 9/15/37 (b)

     490          480,514  

5.25%, 9/15/42-9/15/53 (b)

     1,320          1,307,839  

Utility Debt Securitization Authority

       

Series 2013T

       

5.00%, 12/15/30

     5,000          5,710,700  
       

 

 

 
          103,860,055  
       

 

 

 

North Carolina - 1.2%

       

North Carolina Medical Care Commission

       

(Vidant Health Obligated Group)

       

Series 2015

       

5.00%, 6/01/45

     4,445          4,855,229  
       

 

 

 

Ohio - 0.5%

       

City of Chillicothe/OH

       

(Adena Health System Obligated Group)

       

Series 2017

       

5.00%, 12/01/37

     1,800          1,983,132  
       

 

 

 

Oklahoma - 0.4%

       

Tulsa Airports Improvement Trust

       

BAM Series 2015A

       

5.00%, 6/01/45

     1,700          1,819,476  
       

 

 

 

Oregon - 1.3%

       

Oregon State Lottery

       

Series 2011A

       

5.25%, 4/01/25 (Pre-refunded/ETM) (b)

     4,305          4,689,522  

5.25%, 4/01/25

     695          754,235  
       

 

 

 
          5,443,757  
       

 

 

 

 


     Principal
Amount
(000)
       U.S. $ Value  

Pennsylvania - 14.4%

       

Allegheny County Industrial Development Authority

  

(Residential Resources, Inc./PA)

  

Series 2006

  

5.00%, 9/01/21

   $ 410        $ 410,898  

Butler County Hospital Authority

  

(Butler Health System Obligated Group)

  

Series 2015

  

5.00%, 7/01/35-7/01/39

     3,510          3,820,693  

City of Philadelphia PA

  

AGM Series 2017A

  

5.00%, 8/01/34

     5,000          5,611,500  

Montgomery County Higher Education & Health Authority

  

(Thomas Jefferson University Obligated Group)

  

Series 2018

  

5.00%, 9/01/43-9/01/48

     13,250          14,748,975  

Montgomery County Industrial Development Authority/PA

  

Series 2010

  

5.25%, 8/01/33 (Pre-refunded/ETM) (b)

     3,480          3,725,131  

Montour School District

  

AGM Series 2015B

  

5.00%, 4/01/34-4/01/35

     6,520          7,347,014  

Pennsylvania Economic Development Financing Authority

  

(PA Bridges Finco LP)

  

Series 2015

  

5.00%, 12/31/34-6/30/42

     9,270          10,089,957  

Pennsylvania Turnpike Commission

  

Series 2014A

  

5.00%, 12/01/31-12/01/33

     6,355          7,091,099  

Philadelphia Authority for Industrial Development

  

(LLPCS Foundation)

  

Series 2005A

  

5.25%, 7/01/24 (b)(g)

     1,150          11,500  

School District of Philadelphia (The)

  

Series 2016F

  

5.00%, 9/01/35

     5,000          5,542,350  

Scranton School District/PA

  

BAM Series 2017E

  

4.00%, 12/01/37

     1,025          1,031,314  
       

 

 

 
       59,430,431  
       

 

 

 

South Carolina - 3.3%

       

South Carolina Ports Authority

  

Series 2015

  

5.00%, 7/01/45

     5,000          5,495,550  

South Carolina Public Service Authority

  

Series 2014A

  

5.00%, 12/01/49

     1,400          1,478,050  

Series 2014C

  

5.00%, 12/01/46

     1,000          1,062,280  

Series 2016B

  


     Principal
Amount
(000)
       U.S. $ Value  

5.00%, 12/01/46

   $ 5,000        $ 5,395,100  
       

 

 

 
       13,430,980  
       

 

 

 

Tennessee - 1.9%

       

Chattanooga-Hamilton County Hospital Authority

  

(Erlanger Medical Center)

  

Series 2014

  

5.00%, 10/01/44

     7,500          7,998,525  
       

 

 

 

Texas - 11.2%

       

Arlington Higher Education Finance Corp.

  

(Lifeschool of Dallas)

  

Series 2014A

  

5.00%, 8/15/39

     4,805          5,320,721  

Central Texas Regional Mobility Authority

  

Series 2016

  

5.00%, 1/01/40

     3,500          3,823,400  

City of Austin TX Water & Wastewater System Revenue

  

Series 2013A

  

5.00%, 11/15/28-11/15/29

     8,075          9,026,024  

City of Houston TX Combined Utility System Revenue

  

Series 2011D

  

5.00%, 11/15/26 (Pre-refunded/ETM)

     6,000          6,597,720  

Fort Bend Independent School District

  

Series 2009

  

5.00%, 2/15/27 (Pre-refunded/ETM) (b)

     5,855          6,061,799  

5.00%, 2/15/27

     1,705          1,765,579  

Love Field Airport Modernization Corp.

  

Series 2015

  

5.00%, 11/01/31

     1,000          1,120,370  

New Hope Cultural Education Facilities Finance Corp.

  

(CHF-Collegiate Housing Denton LLC)

  

AGM Series 2018A-1

  

5.00%, 7/01/38-7/01/48

     1,600          1,745,811  

North Texas Tollway Authority

  

Series 2015B

  

5.00%, 1/01/40

     5,000          5,442,800  

Texas Private Activity Bond Surface Transportation Corp.

  

(NTE Mobility Partners LLC)

  

Series 2009

  

6.875%, 12/31/39

     1,720          1,826,072  

Texas Private Activity Bond Surface Transportation Corp.

  

(NTE Mobility Partners Segments 3 LLC)

  

Series 2013

  

6.75%, 6/30/43

     3,000          3,494,100  
       

 

 

 
       46,224,396  
       

 

 

 

Utah - 1.2%

       

Salt Lake City Corp. Airport Revenue

  

Series 2017A

  

5.00%, 7/01/47

     4,500          5,016,555  
       

 

 

 


     Principal
Amount
(000)
       U.S. $ Value  

Washington - 2.5%

 

FYI Properties

  

(FYI Properties WA State Lease)

  

Series 2009

  

5.00%, 6/01/27

   $ 3,885        $ 3,980,726  

5.125%, 6/01/28

     5,200          5,333,068  

Port of Seattle WA

  

Series 2015A

  

5.00%, 4/01/40

     1,000          1,109,970  
       

 

 

 
       10,423,764  
       

 

 

 

Wisconsin - 0.2%

       

State of Wisconsin

  

Series 2003-3

  

5.00%, 11/01/26

     620          621,934  
       

 

 

 

Total Municipal Obligations
(cost $637,549,861)

 

       664,045,207  
       

 

 

 
     Shares           

SHORT-TERM INVESTMENTS - 0.5%

       

Investment Companies - 0.5%

       

AB Fixed Income Shares, Inc. - Government
Money Market Portfolio - Class AB, 1.74% (h)(i)(j)
(cost $1,811,095)

     1,811,095          1,811,095  
       

 

 

 

Total Investments - 161.3%
(cost $639,360,956) (k)

 

       665,856,302  

Other assets less liabilities - (39.0)%

 

       (160,822,964

Preferred Shares at liquidation value - (22.3)%

 

       (92,125,000
       

 

 

 

Net Assets Applicable to Common Shareholders - 100.0%(l)

 

     $ 412,908,338  
       

 

 

 

 

(a)

Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered restricted, but liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At July 31, 2018, the aggregate market value of these securities amounted to $4,121,989 or 1.0% of net assets.

(b)

Security in which significant unobservable inputs (Level 3) were used in determining fair value.

(c)

Security represents the underlying municipal obligation of an inverse floating rate obligation held by the Fund.

(d)

Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities, which represent 0.85% of net assets as of July 31, 2018, are considered illiquid and restricted. Additional information regarding such securities follows:

 

144A/Restricted & Illiquid Securities

  

Acquisition
Date

     Cost      Market
Value
     Percentage of
Net Assets
 

Michigan Strategic Fund(Detroit Renewable Energy Obligated Group) Series 2013

           

8.50%, 12/01/30

     7/24/13      $ 3,365,810      $ 3,529,950        0.85


(e)

Fair valued by the Adviser.

(f)

Restricted and illiquid security.

 

Restricted & Illiquid Securities

   Acquisition
Date
     Cost      Market
Value
     Percentage of
Net Assets
 

Plymouth Educational Center Charter School Series 2005

           

5.125%, 11/01/23

     11/30/05      $ 2,128,786      $ 1,794,090        0.43

 

(g)

Illiquid security.

(h)

Affiliated investments.

(i)

The rate shown represents the 7-day yield as of period end.

(j)

To obtain a copy of the fund’s shareholder report, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618.

(k)

As of July 31, 2018, the cost basis of investment securities owned was substantially identical for both book and tax purposes. Gross unrealized appreciation of investments was $28,067,334 and gross unrealized depreciation of investments was $(1,571,988), resulting in net unrealized appreciation of $26,495,346.

(l)

Portfolio percentages are calculated based on net assets applicable to common shareholders.

As of July 31, 2018, the Fund’s percentages of investments in municipal bonds that are insured and in insured municipal bonds that have been pre-refunded or escrowed to maturity are 3.9% and 0.0%, respectively.

Glossary:

 

AGM

   -    Assured Guaranty Municipal

BAM

   -    Build American Mutual

COP

   -    Certificate of Participation

ETM

   -    Escrowed to Maturity

NATL

   -    National Interstate Corporation

OSF

   -    Order of St. Francis


AllianceBernstein National Municipal Income Fund

July 31, 2018 (unaudited)

In accordance with U.S. GAAP regarding fair value measurements, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability (including those valued based on their market values). Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.

 

   

Level 1—quoted prices in active markets for identical investments

   

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

   

Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The fair value of debt instruments, such as bonds, and over-the-counter derivatives is generally based on market price quotations, recently executed market transactions (where observable) or industry recognized modeling techniques and are generally classified as Level 2. Pricing vendor inputs to Level 2 valuations may include quoted prices for similar investments in active markets, interest rate curves, coupon rates, currency rates, yield curves, option adjusted spreads, default rates, credit spreads and other unique security features in order to estimate the relevant cash flows which is then discounted to calculate fair values. If these inputs are unobservable and significant to the fair value, these investments will be classified as Level 3. In addition, non-agency rated investments are classified as Level 3.

Other fixed income investments, including non-U.S. government and corporate debt, are generally valued using quoted market prices, if available, which are typically impacted by current interest rates, maturity dates and any perceived credit risk of the issuer. Additionally, in the absence of quoted market prices, these inputs are used by pricing vendors to derive a valuation based upon industry or proprietary models which incorporate issuer specific data with relevant yield/spread comparisons with more widely quoted bonds with similar key characteristics. Those investments for which there are observable inputs are classified as Level 2. Where the inputs are not observable, the investments are classified as Level 3.

Where readily available market prices or relevant bid prices are not available for certain equity investments, such investments may be valued based on similar publicly traded investments, movements in relevant indices since last available prices or based upon underlying company fundamentals and comparable company data (such as multiples to earnings or other multiples to equity). Where an investment is valued using an observable input, by pricing vendors, such as another publicly traded security, the investment will be classified as Level 2. If management determines that an adjustment is appropriate based on restrictions on resale, illiquidity or uncertainty, and such adjustment is a significant component of the valuation, the investment will be classified as Level 3. An investment will also be classified as Level 3 where management uses company fundamentals and other significant inputs to determine the valuation.

The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of July 31, 2018:

 

Investments in Securities:

   Level 1     Level 2     Level 3     Total  

Assets:

 

Long-Term Municipal Bonds

   $ – 0  –    $ 623,986,206     $ 40,059,001     $ 664,045,207  

Short-Term Investments

     1,811,095       – 0  –      – 0  –      1,811,095  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Investments in Securities

     1,811,095       623,986,206       40,059,001       665,856,302  

Other Financial Instruments(a)

     – 0  –      – 0  –      – 0  –      – 0  – 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total(b)

   $     1,811,095     $     623,986,206     $     40,059,001     $     665,856,302  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(a)

Other financial instruments are derivative instruments, such as futures, forwards and swaps, which are valued at the unrealized appreciation/(depreciation) on the instrument. Other financial instruments may also include swaps with upfront premiums, options written and swaptions written which are valued at market value.

(b)

There were no transfers between any levels during the reporting period.

The Fund recognizes all transfers between levels of the fair value hierarchy assuming the financial instruments were transferred at the beginning of the reporting period.


Following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value.

 

     Long Term Municipal Bonds     Total  

Balance as of 10/31/17

   $ 24,279,742     $ 24,279,742  

Accrued discounts/(premiums)

     (118,562     (118,562

Realized gain (loss)

     5,825       5,825  

Change in unrealized appreciation/depreciation

     (29,550     (29,550

Purchases

     17,731,546       17,731,546  

Sales

     (1,810,000     (1,810,000

Transfers in to Level 3

     – 0  –      – 0  – 

Transfers out of Level 3

     – 0  –      – 0  – 
  

 

 

   

 

 

 

Balance as of 7/31/18

   $     40,059,001     $     40,059,001  
  

 

 

   

 

 

 

Net change in unrealized appreciation/depreciation from investments held as of 7/31/18

   $ (28,110   $ (28,110
  

 

 

   

 

 

 

The following presents information about significant unobservable inputs related to the Fund’s Level 3 investments at July 31, 2018. Securities priced by third party vendors are excluded from the following table:

Quantitative Information about Level 3 Fair Value Measurements

 

     Fair Value at
7/31/18
    

Valuation
Technique

  

Unobservable
Input

  

Input

Long-Term Municipal Bonds

   $     3,529,950     

Market Approach

  

Mandatory Tender Level

   $    101.00/ N/A

Generally, a change in the assumptions used in any input in isolation may be accompanied by a change in another input. Significant changes in any of the unobservable inputs may significantly impact the fair value measurement. Significant increases (decreases) in Mandatory Tender Level in isolation would be expected to result in a significantly lower (higher) fair value measurement.

The Adviser established the Valuation Committee (the “Committee”) to oversee the pricing and valuation of all securities held in the Fund. The Committee operates under pricing and valuation policies and procedures established by the Adviser and approved by the Board, including pricing policies which set forth the mechanisms and processes to be employed on a daily basis to implement these policies and procedures. In particular, the pricing policies describe how to determine market quotations for securities and other instruments. The Committee’s responsibilities include: 1) fair value and liquidity determinations (and oversight of any third parties to whom any responsibility for fair value and liquidity determinations is delegated), and 2) regular monitoring of the Adviser’s pricing and valuation policies and procedures and modification or enhancement of these policies and procedures (or recommendation of the modification of these policies and procedures) as the Committee believes appropriate.

The Committee is also responsible for monitoring the implementation of the pricing policies by the Adviser’s Pricing Group (the “Pricing Group”) and any third party which performs certain pricing functions in accordance with the pricing policies. The Pricing Group is responsible for the oversight of the third party on a day-to-day basis. The Committee and the Pricing Group perform a series of activities to provide reasonable assurance of the accuracy of prices including: 1) periodic vendor due diligence meetings, review of methodologies, new developments and process at vendors, 2) daily comparison of security valuation versus prior day for all securities that exceeded established thresholds, and 3) daily review of unpriced, stale, and variance reports with exceptions reviewed by senior management and the Committee.

In addition, several processes outside of the pricing process are used to monitor valuation issues including: 1) performance and performance attribution reports are monitored for anomalous impacts based upon benchmark performance, and 2) portfolio managers review all portfolios for performance and analytics (which are generated using the Adviser’s prices).


A summary of the Fund’s transactions in AB mutual funds for the nine months ended July 31, 2018 is as follows:

 

Fund

   Market Value
10/31/17
(000)
     Purchases
at Cost
(000)
     Sales
Proceeds
(000)
     Market Value
7/31/18
(000)
     Dividend
Income
(000)
 

Government Money Market Portfolio

   $ 1,630      $ 37,610      $ 37,429      $ 1,811      $ 13  


ITEM 2.

CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer 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) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.

(b) There were no changes in the registrant’s internal controls over financial reporting that occurred during the second fiscal quarter of the period that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

ITEM 3.

EXHIBITS.

The following exhibits are attached to this Form N-Q:

 

EXHIBIT NO.

 

DESCRIPTION OF EXHIBIT

3 (a) (1)   Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
3 (a) (2)   Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002


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.

(Registrant): AllianceBernstein National Municipal Income Fund, Inc.

 

By:   /s/    Robert M. Keith
  Robert M. Keith
  President
Date:   September 24, 2018

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/    Robert M. Keith
  Robert M. Keith
  President
Date:   September 24, 2018
By:   /s/    Joseph J. Mantineo
  Joseph J. Mantineo
  Treasurer and Chief Financial Officer
Date:   September 24, 2018