UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q AMENDMENT
TO FORM N-Q FILED ON APRIL 29, 2005
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-5078
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MFS GOVERNMENT MARKETS INCOME TRUST
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(Exact name of registrant as specified in charter)
500 Boylston Street, Boston, Massachusetts 02116
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(Address of principal executive offices) (Zip code)
James F. DesMarais
Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
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(Name and address of agents for service)
Registrant's telephone number, including area code: (617) 954-5000
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Date of fiscal year end: November 30
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Date of reporting period: February 28, 2005
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ITEM 1. SCHEDULE OF INVESTMENTS.
MFS(R) Mutual Funds
QUARTERLY PORTFOLIO HOLDINGS 2/28/05
MFS(R) GOVERNMENT MARKETS INCOME TRUST
[graphic omitted]
[logo] M F S(R)
INVESTMENT MANAGEMENT
THE TRUST IS A CLOSED-END INVESTMENT PRODUCT. SHARES OF THE TRUST ARE ONLY
AVAILABLE FOR PURCHASE/SALE ON THE NYSE AT THE CURRENT MARKET PRICE. SHARES MAY
TRADE AT A PREMIUM OR DISCOUNT TO NAV.
Visit MFS.COM for the latest information about your investment.
o Annual and semiannual reports contain information regarding the specific
securities held in the fund and how the fund has performed over the
period.
o Week in Review provides a look at key events influencing U.S. and global
financial markets for the week.
o MFS Global Perspective is a commentary and analysis of markets around the
globe.
o Chief Investment Strategist Corner is a commentary by James Swanson, MFS'
Chief Investment Strategist.
A fact sheet, annual, and semiannual report for the fund can be accessed by
clicking "Closed End Funds" on the home page. Week in Review, MFS Global
Perspective, and Chief Investment Strategist Corner are located under "Updates
and Announcements."
The portfolio is actively managed, and current holdings may be different.
MFS Government Markets Income Trust
PORTFOLIO OF INVESTMENTS (Unaudited) 02/28/2005
ISSUER PAR AMOUNT $ VALUE
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BONDS - 94.3%
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U.S. BONDS - 80.3%
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AGENCY - OTHER - 5.8%
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Financing Corp., 10.7%, 2017 $ 4,095,000 $ 6,310,571
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Financing Corp., 9.8%, 2018 4,350,000 6,387,253
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Financing Corp., 10.35%, 2018 6,820,000 10,418,853
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$ 23,116,677
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ASSET BACKED & SECURITIZED - 0.7%
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Freddie Mac, 3.108%, 2035 $ 660,000 $ 656,304
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Prudential Securities Secured Financing Corp., 7.3874%, 2013## 1,819,000 1,976,069
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$ 2,632,373
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FINANCIAL INSTITUTIONS - 0.8%
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SLM Corp., 2.92%, 2007 $ 3,205,000 $ 3,211,971
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MORTGAGE BACKED - 47.7%
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Fannie Mae, 6.942%, 2007 $ 1,071,127 $ 1,127,282
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Fannie Mae, 4.79%, 2012 3,522,804 3,486,985
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Fannie Mae, 5%, 2013 - 2019 44,740,868 45,114,383
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Fannie Mae, 4.8%, 2013 355,558 357,296
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Fannie Mae, 4.845%, 2013 1,038,346 1,044,886
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Fannie Mae, 5.06%, 2013 415,654 423,443
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Fannie Mae, 4.65%, 2013 979,360 969,565
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Fannie Mae, 4.45%, 2014 1,246,176 1,219,482
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Fannie Mae, 4.652%, 2014 3,168,738 3,146,885
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Fannie Mae, 4.771%, 2014 2,480,567 2,487,231
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Fannie Mae, 4.846%, 2014 3,527,011 3,544,591
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Fannie Mae, 5.1%, 2014 540,167 550,207
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Fannie Mae, 4.62%, 2015 714,706 705,437
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Fannie Mae, 4.82%, 2015 967,824 966,614
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Fannie Mae, 6.5%, 2016 - 2033 17,200,870 17,972,907
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Fannie Mae, 6%, 2016 - 2034 20,800,756 21,463,372
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Fannie Mae, 5.5%, 2017 - 2034 59,519,286 60,378,636
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Fannie Mae, 4.5%, 2019 23,941,721 23,661,118
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Freddie Mac, 7.5%, 2028 94,582 101,382
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$188,721,702
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U.S. GOVERNMENT AGENCIES - 13.1%
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Aid to Israel, 0%, 2024 $ 5,452,000 $ 2,000,955
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Fannie Mae, 3.41%, 2007 3,945,000 3,890,168
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Fannie Mae, 4.625%, 2014 12,197,000 12,163,507
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Freddie Mac, 5.05%, 2015 3,680,000 3,692,041
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Overseas Private Investment Corp., 0%, 2007 1,728,763 1,711,293
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Small Business Administration, 8.875%, 2011 322,249 342,317
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Small Business Administration, 6.35%, 2021 1,802,633 1,919,113
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Small Business Administration, 6.34%, 2021 1,526,632 1,625,369
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Small Business Administration, 6.44%, 2021 1,484,728 1,585,175
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Small Business Administration, 6.625%, 2021 1,512,404 1,628,339
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Small Business Administration, 4.98%, 2023 953,282 962,091
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Small Business Administration, 4.72%, 2024 2,542,157 2,526,833
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Small Business Administration, 4.34%, 2024 1,378,010 1,338,710
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Small Business Administration, 4.77%, 2024 2,483,381 2,475,719
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Small Business Administration, 5.52%, 2024 1,505,395 1,558,142
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Small Business Administration, 4.86%, 2024 - 2025 2,913,000 2,910,626
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Small Business Administration, 4.87%, 2024 1,591,000 1,590,413
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U.S. Department of Housing & Urban Development, 6.36%, 2016 1,580,000 1,723,850
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U.S. Department of Housing & Urban Development, 6.59%, 2016 5,612,000 5,964,692
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$ 51,609,353
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U.S. TREASURY OBLIGATIONS - 12.2%
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U.S. Treasury Bonds, 10.375%, 2012 $ 8,400,000 $ 9,820,780
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U.S. Treasury Bonds, 12%, 2013 3,036,000 3,830,816
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U.S. Treasury Bonds, 8.875%, 2017 6,000,000 8,445,702
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U.S. Treasury Notes, 3.375%, 2007 7,767,476 8,162,825
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U.S. Treasury Notes, 3.625%, 2008### 7,318,233 7,897,120
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U.S. Treasury Notes, 2%, 2014 7,558,434 7,793,750
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U.S. Treasury STRIPS, 0%, 2016 3,504,000 2,091,156
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$ 48,042,149
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Total U.S. Bonds $317,334,225
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FOREIGN BONDS - 14.0%
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AUSTRALIA - 0.1%
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Commonwealth of Australia, 6%, 2017 AUD 640,000 $ 524,214
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AUSTRIA - 0.6%
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Republic of Austria, 5.5%, 2007 EUR 859,000 $ 1,218,875
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Republic of Austria, 5%, 2012 EUR 750,000 1,092,050
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Republic of Austria, 4.65%, 2018 EUR 118,000 168,144
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$ 2,479,069
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BELGIUM - 0.3%
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Kingdom of Belgium, 3.75%, 2009 EUR 374,000 $ 510,318
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Kingdom of Belgium, 5%, 2012 EUR 483,000 703,724
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$ 1,214,042
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BRAZIL - 0.4%
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Federal Republic of Brazil, 8%, 2014 $ 1,461,739 $ 1,488,233
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CANADA - 1.0%
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Canada Housing Trust, 4.65%, 2009 CAD 95,000 $ 79,871
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Government of Canada, 5.25%, 2008 2,735,000 2,848,155
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Government of Canada, 5.5%, 2010 CAD 702,000 614,927
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Government of Canada, 5.25%, 2012 CAD 462,000 401,298
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Government of Canada, 8%, 2023 CAD 74,000 84,209
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$ 4,028,460
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CHILE - 0.1%
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Compania Nacional de Transmision Electrica S.A. (Transelec), 7.875%, 2011 $ 314,000 $ 363,821
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FINLAND - 0.7%
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Republic of Finland, 2.75%, 2006 EUR 270,000 $ 359,662
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Republic of Finland, 3%, 2008 EUR 1,536,000 2,048,096
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Republic of Finland, 5.375%, 2013 EUR 229,000 342,740
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$ 2,750,498
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FRANCE - 0.8%
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Republic of France, 4.75%, 2007 EUR 985,000 $ 1,368,490
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Republic of France, 4%, 2009 EUR 1,224,000 1,687,991
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$ 3,056,481
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GERMANY - 1.8%
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Federal Republic of Germany, 4%, 2007 - 2009 EUR 788,000 $ 1,078,298
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Federal Republic of Germany, 3.5%, 2008 EUR 3,721,000 5,034,153
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Federal Republic of Germany, 3.75%, 2015 EUR 379,000 503,845
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Federal Republic of Germany, 6.25%, 2030 EUR 227,000 397,148
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$ 7,013,444
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IRELAND - 1.0%
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Republic of Ireland, 4.25%, 2007 EUR 2,520,000 $ 3,474,070
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Republic of Ireland, 4.6%, 2016 EUR 263,000 375,420
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$ 3,849,490
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MALAYSIA - 0.2%
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Petroliam Nasional Berhad, 7.75%, 2015 $ 537,000 $ 650,788
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MEXICO - 0.9%
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Pemex Project Funding Master Trust, 9.375%, 2008## $ 1,072,000 $ 1,247,272
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Pemex Project Funding Master Trust, 8.625%, 2022 987,000 1,184,400
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United Mexican States, 8.125%, 2019 1,040,000 1,244,360
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United Mexican States, 8%, 2022 89,000 104,798
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$ 3,780,830
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NETHERLANDS - 1.0%
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Kingdom of Netherlands, 5.75%, 2007 EUR 1,213,000 $ 1,706,493
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Kingdom of Netherlands, 3.75%, 2009 EUR 1,601,000 2,183,664
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$ 3,890,157
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NEW ZEALAND - 0.7%
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Government of New Zealand, 7%, 2009 NZD 477,000 $ 357,519
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Government of New Zealand, 6.5%, 2013 NZD 3,206,000 2,387,395
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$ 2,744,914
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PANAMA - 0.3%
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Republic of Panama, 9.375%, 2023 - 2029 $ 715,000 $ 864,010
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Republic of Panama, 8.875%, 2027 134,000 151,420
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$ 1,015,430
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QATAR - 0.4%
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State of Qatar, 9.75%, 2030 $ 990,000 $ 1,472,625
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RUSSIA - 0.8%
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Russian Federation, 3%, 2008 $ 1,474,000 $ 1,375,979
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Russian Federation, 11%, 2018 640,000 921,856
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Russian Ministry of Finance, 12.75%, 2028 443,000 755,005
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$ 3,052,840
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SOUTH AFRICA - 0.5%
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Republic of South Africa, 9.125%, 2009 $ 855,000 $ 997,144
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Republic of South Africa, 8.5%, 2017 843,000 1,055,858
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$ 2,053,002
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SPAIN - 1.6%
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Kingdom of Spain, 7%, 2005 $ 3,600,000 $ 3,653,708
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Kingdom of Spain, 6%, 2008 EUR 194,000 280,755
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Kingdom of Spain, 5.35%, 2011 EUR 1,657,000 2,451,393
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$ 6,385,856
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UNITED KINGDOM - 0.8%
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United Kingdom Treasury, 7.25%, 2007 GBP 149,000 $ 304,795
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United Kingdom Treasury, 5.75%, 2009 GBP 573,000 1,148,121
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United Kingdom Treasury, 8%, 2015 GBP 778,000 1,906,615
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$ 3,359,531
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Total Foreign Bonds $ 55,173,725
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Total Bonds (Identified Cost, $364,695,871) $372,507,950
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REPURCHASE AGREEMENT - 4.3%
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Goldman Sachs, 2.61%, dated 2/28/2005, due 3/01/2005, total to be received
$17,086,239 (secured by various U.S. Treasury and Federal Agency obligations
in a jointly traded account), at Cost $ 17,085,000 $ 17,085,000
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Total Investments (Identified Cost, $381,780,871) $389,592,950
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OTHER ASSETS, LESS LIABILITIES - 1.4% 5,690,447
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Net Assets - 100.0% $395,283,397
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## SEC Rule 144A restriction
### Security segregated as collateral for open futures contracts.
All amounts are stated in U.S. dollars unless otherwise indicated.
Abbreviations have been used throughout this report to indicate amounts shown in
currencies other than the U.S. dollar. A list of abbreviations is shown below
AUD = Australian Dollar
CAD = Canadian Dollar
CHF = Swiss Franc
DKK = Danish Krone
EUR = Euro
GBP = British Pound
NOK = Norwegian Krone
NZD = New Zealand Dollar
SEK = Swedish Krona
See attached schedules. For more information see notes to financial statements
as disclosed in the most recent semiannual or annual report.
MFS GOVERNMENT MARKETS INCOME TRUST
SUPPLEMENTAL SCHEDULES (UNAUDITED)
(1) PORTFOLIO SECURITIES
The cost and unrealized appreciation and depreciation in the value of the
investments owned by the trust, as computed on a federal income tax basis, are
as follows:
Aggregate cost $386,105,825
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Gross unrealized appreciation $ 7,677,166
Gross unrealized depreciation (4,190,041)
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Net unrealized appreciation (depreciation) $ 3,487,125
============
(2) FINANCIAL INSTRUMENTS
The trust trades financial instruments with off-balance-sheet risk in the normal
course of its investing activities in order to manage exposure to market risks
such as interest rates and foreign currency exchange rates. These financial
instruments include forward foreign currency exchange contracts and futures
contracts. The notional or contractual amounts of these instruments represent
the investment the trust has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
Forward Foreign Currency Exchange Contracts
NET UNREALIZED
CONTRACTS TO CONTRACTS APPRECIATION
SETTLEMENT DATE DELIVER/RECEIVE IN EXCHANGE FOR AT VALUE (DEPRECIATION)
----------------------------------------------------------------------------------------------------------
SALES
4/11/2005 AUD 916,819 $ 697,947 $ 723,476 ($ 25,529)
3/4/2005-4/25/2005 EUR 20,634,429 26,526,855 27,363,742 (836,887)
3/10/2005 GBP 1,719,058 3,214,639 3,302,356 (87,717)
4/11/2005 NZD 3,815,347 2,646,840 2,763,544 (116,704)
------------ ------------ ------------
$ 33,086,281 $ 34,153,118 ($ 1,066,837)
============ ============ ============
PURCHASES
4/11/2005 AUD 464,615 $ 364,521 $ 366,635 $ 2,114
4/11/2005 CHF 1,162,135 957,278 1,003,399 46,121
4/11/2005 DKK 391,346 67,305 69,729 2,424
4/25/2005 EUR 616,210 814,815 817,387 2,572
3/4/2005 NOK 6,220,000 983,508 1,002,879 19,371
3/14/2005-4/14/2005 SEK 15,587,218 2,209,115 2,281,695 72,580
------------ ------------ ------------
$ 5,396,542 $ 5,541,724 $ 145,182
============ ============ ============
At February 28, 2005, forward foreign currency purchases and sales under master
netting agreements excluded above amounted to a net payable of $39,776 with
Merrill Lynch International.
At February 28, 2005, the trust had sufficient cash and/or securities to cover
any commitments under these contracts.
Futures Contracts
Unrealized
Appreciation
Description Expiration Contracts Position (Depreciation)
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U.S. Treasury Note 10 Year March 2005 115 Long ($ 63,813)
U.S. Treasury Note 2 Year March 2005 87 Short $ 98,876
U.S. Treasury Note 5 Year March 2005 54 Short $ 65,937
U.S. Treasury Long Bond March 2005 39 Long (22,152)
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$ 78,848
============
At February 28, 2005, the trust had sufficient cash and/or securities to cover
any margin requirements under these contracts.
(C) 2005 MFS Investment Management
ITEM 2. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form N-Q,
the registrant's principal financial officer and principal executive officer
have concluded that those disclosure controls and procedures provide
reasonable assurance that the material information required to be disclosed
by the registrant on this report is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms.
(b) There were no changes in the registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of
1940 (the "Act")) that occurred during the registrant's last fiscal quarter
that has materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting.
ITEM 3. EXHIBITS.
File as exhibits as part of this Form a separate certification for each
principal executive officer and principal financial officer of the registrant as
required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2): Attached hereto.
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: MFS GOVERNMENT MARKETS INCOME TRUST
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By (Signature and Title)* ROBERT J. MANNING
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Robert J. Manning, President
Date: May 6, 2005
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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 (Signature and Title)* ROBERT J. MANNING
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Robert J. Manning, President (Principal Executive
Officer)
Date: May 6, 2005
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By (Signature and Title)* RICHARD M. HISEY
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Richard M. Hisey, Treasurer (Principal Financial
Officer and Accounting Officer)
Date: May 6, 2005
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* Print name and title of each signing officer under his or her signature.