PPM Investment Grade Municipal Income Fund

Investment Grade Municipal Income Fund Inc. (the “Fund”) (NYSE:PPM), a closed-end management investment company normally investing substantially all of its assets in a diversified portfolio of tax-exempt municipal obligations, with common and preferred shares outstanding, today announced that the Fund’s Board of Directors has declared a dividend from net investment income of $0.0725 per share of common stock. The dividend is payable on January 29, 2010 to common shareholders of record as of January 21, 2010. The ex-dividend date is January 19, 2010. Under normal circumstances, the Fund invests at least 80% of its net assets in investment grade municipal obligations, the income from which is exempt from regular federal income tax.

Fund Commentary for the month of December 2009 from UBS Global Asset Management (Americas) Inc. (“UBS Global AM”), the Fund’s investment advisor:

The Barclays Capital Municipal Bond Index (the “Index”) generated a 0.34% return in December, outperforming US Treasuries during the month. During this time, AAA and AA rated securities underperformed their A and BBB rated counterparts, as lower-quality bonds performed relatively better overall during the month. At the same time, longer maturities outperformed shorter- and intermediate-term maturity municipals.

Overall, we had a neutral position in longer-term securities (20+ years) versus the Index, an area of the curve that performed well in December. On a relative basis compared to the Index, this neither hurt nor helped performance; however, on an absolute basis, the Fund benefited from this position. Also generating positive results was the Fund’s underweight to shorter-term securities, an area which underperformed in December. Conversely, our overweight to intermediate term securities hurt Fund performance as that area posted the biggest underperformance during the month. However, these negative results were not enough to detract from the positive results generated by the Fund’s positioning in shorter- and longer-term securities.

From a credit quality perspective, the Fund's significant underweight to AAA rated securities (versus the Index) was a strong driver of positive performance during the month. With respect to sectors, a significant overweight to hospital bonds benefited Fund performance, while an overweight to leases hurt Fund performance. The Fund’s use of leverage continued to benefit results in December.

Disclaimers Regarding Fund Commentary - The Fund Commentary is intended to assist shareholders in understanding how the Fund performed during the month noted. Views and opinions were current as of the date of this press release. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and the Fund and UBS Global AM reserve the right to change views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund’s future investment intent.

  Portfolio statistics as of December 31, 20091   Top ten states   Percentage of total investments Texas   12.9

%  

California 12.6 Illinois 10.2 New York 8.1 Washington 6.7 North Carolina 5.8 South Carolina 5.1 Michigan 5.0 New Jersey 4.8 Ohio   4.6   Total 75.8 %   Yields2 NAV yield 6.00 % Market yield 6.16 %  

Top five sectors

 

Percentage of total investments

Hospital 16.3

%   

Airport 14.2 University 12.3 Power 11.6 Lease   10.0   Total 64.4 %  

Credit quality3

    AAA 12.3 % AA 39.7 A 23.9 BBB 13.2 A-1+ 0.3 Nonrated   10.6   Total 100.0 %   Portfolio statistics as of December 31, 2009 continued1   Characteristics     Net asset value per share2  

     $14

.50 Market price per share2 $14 .13 Weighted average maturity

14

.53 years

Weighted average modified duration 4

5

.36 years

Weighted average coupon5 5 .52% Subject to Alternative Minimum Tax (AMT) 15 .03% Leverage6 39 .89%   Stated maturity schedule   Percentage of total investments 2010 0 .9% 2011 0 .0 2012 1 .1 2013 0 .6 2014–2024 53 .4 2025–2045   44 .0 Total   100

.0%

1 The Fund is actively managed and its portfolio composition will vary over time.

2 Net asset value (NAV), market price and yields will fluctuate. NAV yield is calculated by multiplying the current month’s dividend by 12 and dividing by the month-end net asset value. Market yield is calculated by multiplying the current month’s dividend by 12 and dividing by the month-end market price.

3 Credit quality ratings shown are based on those assigned by Standard & Poor's (“S&P”), a division of The McGraw-Hill Companies, Inc. S&P is an independent rating agency.

4 Modified duration is the change in the price of a security, expressed in years, expected in response to each 1% change in the yield to maturity of the portfolio's holdings.

5 Weighted by par.

6 Includes leverage attributable to both the Fund’s Auction Preferred Shares and the Tender Option Bond Program as a percentage of total assets. Leverage may vary.