The following constitutes Amendment No. 27 ("Amendment No. 27") to the Schedule 13D filed by the undersigned. This Amendment amends the original Schedule 13D as specifically set forth.
Item 3. Source and Amount of Funds or Other Considerations. Item 3 is hereby amended as follows: KIM, an independent investment advisor, has accumulated 4,760,843 shares of MGF on behalf of accounts that are managed by KIM (the "Accounts") under limited powers of attorney, which represents 9.27% of the outstanding shares. All funds that have been utilized in making such purchases are from such Accounts. Item 5. Interest in Securities of the Issuer. Item 5 is hereby amended as follows: (a) As of the date of this Report, KIM represents beneficial ownership of 4,760,843 shares, which represents 9.27% of the outstanding Shares. George W. Karpus currently owns 14,050 shares purchased on January 8, 2004 at $6.82 (1,500 shares), November 8 at $6.54 (900 shares), March 19, 2007 at $6.63 (250 shares), April 9, 2007 at $6.66 (1,075 shares), April 10, 2007 at $6.62 (425 shares), April 11, 2007 at $6.62 (2,475 shares), April 23, 2007 $6.66 (350 shares), April 24, 2007 at $6.69 (3,025 shares), April 25, 2007 at $6.70 (3,575 shares), April 26, 2007 at $6.65 (25 shares), April 27, 2007 at $6.65 (25 shares), April 30, 2007 at $6.71 (425 shares). Sophie Karpus presently owns 4,000 shares purchased December 29, 1999 at a price of $5.75 (300 shares), December 26, 2003 at $6.77 (550 shares), and November 2, 2004 at $6.63 (1,300 shares), May 16, 2005 at a price of $6.63 (1,850 shares). Karpus Profit Sharing Plan presently owns 9,500 shares purchased November 13, 2001 at a price of $6.73 (1,050 shares), July 2, 2003 at $6.95 (1,150 shares), July 30, 2004 at $6.48 (600 shares), August 2, 2004 at $6.48 (100 shares), March 7, 2007 at $6.62 (3,000 shares), March 13, 2007 at $6.62 (2,500 shares), March 19, 2007 at $6.60 (25 shares), April 9, 2007 at $6.65 (100 shares), April 10, 2007 at $6.60 (50 shares), April 11, 2007 at $6.62 (225 shares), April 23, 2007 at $6.63 (50 shares), April 24, 2007 at $6.69 (275 shares), April 25, 2007 at $6.70 (325 shares), April 30, 2007 at $6.70 (50 shares). Karpus Investment Management Defined Benefit Plan currently owns 3,300 shares purchased on September 2, 2003 at $6.65 (850 shares), April 29, 2004 at $6.53 (270 shares), September 15, at $6.59 (1,180 shares) and April 20, 2006 at $6.26 (1,000 shares). Jo Ann Van Degriff presently owns 950 shares of MGF purchased on March 19, 2007 at $6.60, April 9, 2007 at $6.65 (100 shares), April 10, 2007 at $6.58 (25 shares), April 11, 2007 at $6.62 (200 shares), April 23, 2007 at $6.63 (50 shares), April 24, 2007 at $6.69 (250 shares), April 25, 2007 at $6.70 (275 shares) and April 30, 2007 at $6.68 (25 shares). Karpus Management, Inc. presently owns 1,150 shares purchased on March 19, 2007 at $6.60, April 9, 2007 at $6.65 (100 shares), April 10, 2007 at $6.60 (50 shares), April 11, 2007 at $6.62 (225 shares), April 23, 2007 at $6.63 (50 shares), April 24, 2007 at $6.69 (300 shares), April 25, 2007 at $6.70 (350 shares) and on April 30, 2007 at $6.70 (50 shares). None of the other Principles of KIM presently own shares of MGF. (c) Open market purchases for the last 60 days for the Accounts. There have been no dispositions and no acquisitions, other than by such open market purchases or dispositions:Karpus Management, Inc. By: /s/ Name: Dana R. Consler Title: Senior Vice-President Date: May 2, 2007
Proposal to the Fund
Transmitted March 29, 2007
VIA FACSIMILE & CERTIFIED MAIL March 29, 2007 Mr. Mark Polebaum, Secretary and Clerk MFS Government Markets Income Trust c/o Massachusetts Financial Services Company 500 Boylston Street Boston, Massachusetts 02116 Re: MFS Government Markets Income Trust (NYSE: MGF) Mr. Polebaum:Karpus Management, Inc., d/b/a Karpus Investment Management ("KIM"), represents beneficial ownership of 4,290,747 shares, or 8.36% of the outstanding shares of common stock of MFS Government Markets Income Trust ("MGF" or the "Fund"). We have represented beneficial ownership of Fund shares since October 21, 1992. Pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, KIM hereby submits the following proposals and supporting statement for inclusion in any and all proxy materials at the 2007 annual shareholders' meeting (the "Meeting"):
Accordingly, we feel that it is time for the Board to undertake more serious actions designed to address our Fund's discount and institute a tender offer for up to 25% of the Fund's outstanding common shares at net asset value. Furthermore, we believe it would be responsible for the Fund to institute a policy making it more accountable to enhancing shareholder value over the long-term. We believe that it would greatly enhance shareholder value if the Fund instituted a policy whereby if the Fund trades at an average discount of over 10% for the 10 calendar weeks prior to the end of June 30 or December 31 (as determined by the close of regular trading sessions of the NYSE), it would conduct a tender offer of 5% of the Fund's outstanding shares at net asset value.
Sincerely, /s/ Cody B. Bartlett Jr., CFA Investment Strategist Karpus Investment Management cc: Frank Tarantino Edward Larkin, Esq.
Letter to the Fund
Transmitted May 2, 2007
Board of Trustees May 2, 2007 Attn: Frank Tarantino MFS Government Markets Income Trust c/o Massachusetts Financial Services Company 500 Boylston Street Boston, Massachusetts 02116 Trustees:I am writing on behalf of Karpus Investment Management (KIM), a registered investment adviser. As of April 30, 2007, we represented beneficial ownership of 4,760,843 shares of the MFS Government Markets Income Trust (MGF) for KIM clients, which represents 9.27 percent of outstanding shares. We have been accumulating shares for investment purposes since October 21, 1992. I am writing regarding your April 30, 2007 DEFA14A filing disclosing the Board of Trustees decision to take certain actions "to potentially narrow the discount of the trust's share market price to net asset value." These actions include allowing the fund to add leverage up to 33.3 percent of total assets and to allow the 20 percent invested in non-fundamental investments to be invested in corporate bonds and emerging market debt. These proposed measures suggested by the Trustees, in my opinion, will not only be ineffective in narrowing the trust's discount but would be implemented at a very poor time in the economic cycle. Additionally, these changes would involve the fund incurring unnecessary transaction costs and may involve the trust's Management charging additional management fees on the leveraged portion of the portfolio. We are not dissatisfied with the way the portfolio is being managed, we are concerned with the way the discount is being managed (or not managed) by the Board of Trustees. The solutions being considered by the Board are tenuous at best especially in the current economic environment. Leverage will not enhance shareholder value in an inverted yield curve environment (currently both the three-month and the six-month interest rates are above the two-year, five-year, ten-year, and thirty-year rates). Additionally, spread product, such as corporate and emerging market debt, is trading at very narrow spreads to Treasury yields. Should the domestic and/or emerging market economies growth slowdown, these spreads would likely widen which would lead to poor net asset value performance. Also, if Treasury yields increase, these sectors should under perform. We have suggested methods that have been taken by other Boards to address Shareholder concerns with regard to MGF's discount to net asset value. These suggestions seem to have fallen upon deaf ears. We refuse to endorse the recently announced plans for the Trustees to address the Fund's discount. We will adamantly oppose the approval of these proposals and seriously question the Trustees' reasoning.
Sincerely, /s/ Cody B. Bartlett Jr., CFA Investment Strategist Karpus Investment Management