MUNIHOLDINGS
FLORIDA INSURED
FUND V
FUND LOGO
Semi-Annual Report
November 30, 1999
This report, including the financial information herein, is
transmitted to the shareholders of MuniHoldings Florida Insured Fund
V for their information. It is not a prospectus, circular or
representation intended for use in the purchase of shares of the
Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a
representation of future performance. The Fund has leveraged its
Common Shares by issuing Preferred Shares to provide the Common
Shareholders with a potentially higher rate of return. Leverage
creates risks for Common Shareholders, including the likelihood of
greater volatility of net asset value and market price of shares of
the Common Shares, and the risk that fluctuations in the short-term
dividend rates of the Preferred Shares may affect the yield to
Common Shareholders. Statements and other information herein are as
dated and are subject to change.
MuniHoldings Florida
Insured Fund V
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MuniHoldings Florida Insured Fund V
The Benefits and
Risks of
Leveraging
MuniHoldings Florida Insured Fund V has the ability to leverage to
seek to enhance the yield and net asset value of its Common Shares.
However, these objectives cannot be achieved in all interest rate
environments. To leverage, the Fund issues Preferred Shares, which
pay dividends at prevailing short-term interest rates, and invests
the proceeds in long-term municipal bonds. The interest earned on
these investments is paid to Common Shareholders in the form of
dividends, and the value of these portfolio holdings is reflected in
the per share net asset value of the Fund's Common Shares. However,
in order to benefit Common Shareholders, the yield curve must be
positively sloped; that is, short-term interest rates must be lower
than long-term interest rates. At the same time, a period of
generally declining interest rates will benefit Common Shareholders.
If either of these conditions change, then the risks of leveraging
will begin to outweigh the benefits.
To illustrate these concepts, assume a fund's Common Share
capitalization of $100 million and the issuance of Preferred Shares
for an additional $50 million, creating a total value of $150
million available for investment in long-term municipal bonds. If
prevailing short-term interest rates are approximately 3% and long-
term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million
of Preferred Shares based on the lower short-term interest rates. At
the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends on the Common Shares.
In this case, the dividends paid to Preferred Shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pickup on the
Common Shares will be reduced or eliminated completely. At the same
time, the market value of the fund's Common Shares (that is, its
price as listed on the American Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Shares' net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Shares does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Shares may
also decline.
As a part of its investment strategy, the Fund may invest in certain
securities whose potential income return is inversely related to
changes in a floating interest rate ("inverse floaters"). In
general, income on inverse floaters will decrease when short-term
interest rates increase and increase when short-term interest rates
decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of
reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of
providing investment leverage and, as a result, the market value of
such securities will generally be more volatile than that of fixed-
rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and net
asset value of the Fund's shares may also be more volatile than if
the Fund did not invest in these securities.
MuniHoldings Florida Insured Fund V, November 30, 1999
DEAR SHAREHOLDER
We are pleased to provide you with this first semi-annual report for
MuniHoldings Florida Insured V. In this and future reports to
shareholders, we will highlight the Fund's performance, describe the
recent investment environment and outline investment activities. The
Fund seeks to provide shareholders with current income exempt from
Federal income tax and Florida intangible personal property taxes by
investing in a portfolio of long-term, investment-grade municipal
obligations.
Since inception (July 23, 1999) through November 30, 1999, the
Common Shares of MuniHoldings Florida Insured Fund V earned $0.296
per share income dividends, which included earned and unpaid
dividends of $0.069. This represents a net annualized yield of
5.99%, based on a month-end net asset value of $13.76 per share.
Over the same period, the total investment return on the Fund's
Common Shares was -6.65%, based on a change in per share net asset
value from $15.00 to $13.76, and assuming reinvestment of $0.227 per
share income dividends.
For the period July 23, 1999 through November 30, 1999, the Fund's
Auction Market Preferred Shares had an average yield of 3.46% for
Series A.
The Municipal Market Environment
The combination of steady strong domestic economic growth,
improvement in foreign economies (most notably in Japan) and
increasing investor concerns regarding potential increases in US
inflation put upward pressure on bond yields throughout the six-
month period ended November 30, 1999. Continued strong US employment
growth and consumer spending were among the reasons the Federal
Reserve Board cited for raising short-term interest rates in late
June, August and November. US Treasury bond yields reacted by
climbing above 6.375% by late October and into November. During the
period, yields on 30-year US Treasury bonds increased over 45 basis
points (0.45%).
Long-term tax-exempt bond yields also rose during the six months
ended November 30, 1999. For much of the first half of 1999, the
municipal bond market was able to withstand much of the upward
pressure on bond yields. However, investor concerns of additional
moves by the Federal Reserve Board to moderate US economic growth
and, more importantly, the loss of the strong technical support that
the tax-exempt market enjoyed in early 1999 helped push municipal
bond yields significantly higher for the remainder of the period.
The yields on long-term tax-exempt revenue bonds rose over 70 basis
points to 6.14% by November 30, 1999, as measured by the Bond Buyer
Revenue Bond Index.
In recent months, the significant decline in new tax-exempt bond
issuance has remained a positive factor within the municipal bond
market, as it had been for much of the past year. Over the last
year, more than $230 billion in long-term municipal bonds was
issued, a decline of nearly 20% compared to the same period a year
ago. During the past six months, over $115 billion in long-term tax-
exempt bonds was underwritten, representing a decline of nearly 15%
compared to the corresponding period in 1998. Over the past three
months, approximately $55 billion in securities was issued by
municipalities nationally. This quarterly issuance represented a
decline of over 5% when compared to the same period in 1998. It is
likely that many tax-exempt issuers have accelerated their
financings in recent months to avoid any potential Year 2000 (Y2K)-
related disruptions at year-end. It is likely that this increased
new-issue volume in October and November is at the expense of future
bond issuance, particularly in early 2000. Consequently, the
municipal market's positive technical position is likely to continue
into early next year.
Although tax-exempt bond yields are at their highest level in over
two years and have attracted significant retail investor interest,
institutional demand has declined sharply. Long-term municipal
mutual funds have seen consistent outflows in recent months as the
yields of individual securities have risen faster than those of
larger, more diverse mutual funds. In addition, the demand from
property/casualty insurance companies has weakened as a result of
the losses, and anticipated losses, incurred as a result of the
series of damaging storms across much of the eastern United States.
Additionally, many institutional investors who were attracted to the
municipal bond market in recent years by historically attractive tax-
exempt bond yield ratios of over 90% have found other asset classes
even more attractive. Even with a reduced supply position, tax-
exempt issuers have been forced to repeatedly raise municipal bond
yields in the attempt to attract adequate demand.
The recent relative underperformance of the municipal bond market
has resulted in an opportunity for long-term investors to purchase
tax-exempt issues whose yields are nearly identical with taxable US
Treasury securities. At November 30, 1999, long-term uninsured
municipal revenue bond yields were almost 98% of comparable US
Treasury securities. In recent months, many taxable asset classes,
such as corporate bonds, mortgage-backed securities and US agency
debt, have all accelerated debt issuance. This acceleration was
initiated largely to avoid issuing securities at year-end and to
minimize any associated Y2K problems that may develop. However, this
increased issuance has also resulted in higher yield levels in the
various asset classes as lower bond prices became necessary to
attract sufficient investor demand. Going forward, it is believed
that the pace of non-US Government debt issuance is likely to slow
significantly. As the supply of this debt declines, we would expect
many institutional investors to return to the municipal bond market
and the attractive yield ratios available.
Looking ahead, it appears to us that long-term tax-exempt bond
yields will remain under pressure, trading in a broad range centered
near current levels. Investors are likely to remain concerned about
future action by the Federal Reserve Board. We believe Y2K
considerations have prohibited any further Federal Reserve Board
moves from the end of the year and the beginning of 2000. Any
improvement in bond prices will probably be contingent upon
weakening in both US employment growth and consumer spending. The
100 basis point rise in US Treasury bond yields seen thus far this
year may negatively impact US economic growth. The US housing market
will be among the first sectors likely to be affected, as some
declines have already been evidenced in response to higher mortgage
rates. We believe that it is also unrealistic to expect double-digit
returns in US equity markets to continue indefinitely. Much of the
US consumer's wealth is tied to recent stock market appreciation.
Any slowing in these incredible growth rates is likely to reduce
consumer spending. We believe that these factors suggest that the
worst of the recent increase in bond yields has passed and stable,
if not slightly improving, bond prices may be expected.
Portfolio Strategy
Since the Fund's inception on July 23, 1999, we focused on seeking
to deliver an optimal level of tax-exempt income. To achieve this
goal, the Fund had an above average duration and was fully invested.
During the four-month period, the price volatility in fixed-income
markets, particularly the municipal market, was above average. This
was the result of strong domestic growth, concerns about inflation
and the uncertainty surrounding Y2K issues.
During the four-month period ended November 30, 1999, the yield on
the long-term Treasury bond rose approximately 30 basis points,
while long-term tax-exempt interest rates rose about 60 basis
points. While this was not beneficial to the Fund's total return, it
allowed us to purchase larger coupon issues that have not been
available in the Florida tax-exempt market since early 1995. This
enabled us to structure the Fund to generate a higher level of tax-
exempt income for our shareholders.
In Conclusion
We appreciate your investment in MuniHoldings Florida Insured Fund
V, and we look forward to assisting you with your financial needs in
the months and years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Robert D. Sneeden)
Robert D. Sneeden
Vice President and Portfolio Manager
January 7, 2000
MuniHoldings Florida Insured Fund V, November 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
Alabama--0.8% A1 VMIG1++ $ 700 Columbia, Alabama, IDB, PCR, Refunding (Alabama Power
Company Project), VRDN, Series C, 4% due 10/01/2022 (g) $ 700
Florida--100.2% NR* Aaa 1,325 Bay County, Florida, School Board, COP, 5% due 7/01/2023 (a) 1,162
NR* Aaa 5,965 Dade County, Florida, Water and Sewer Revenue Bonds,
RIB, Series 155, 6.75% due 10/01/2025 (b)(f) 5,335
AAA Aaa 1,100 Enterprise Community Development District, Florida,
Water and Sewer Revenue Bonds, 5.75% due 5/01/2017 (e) 1,103
NR* Baa1 3,000 Escambia County, Florida, PCR (Champion International
Corp. Project), AMT, 6.40% due 9/01/2030 2,934
Florida Housing Finance Corporation, Housing
Revenue Bonds, AMT (a):
AAA Aaa 2,135 (Riley Chase Apartments), Series L-1, 5.90% due 10/01/2029 2,043
AAA NR* 2,345 (Wentworth II Apartments-TWC Ninety-Nine Ltd.),
Series A, 5.375% due 11/01/2029 2,095
AAA Aaa 2,500 Florida Ports Financing Commission Revenue Bonds (State
Transportation Trust Fund--Intermodal Program), AMT, 5.50%
due 10/01/2023 (b) 2,357
AAA Aaa 1,810 Florida State Division Board, Finance Department, General
Services Revenue Refunding Bonds (Department of Environmental
Protection), Series B, 6% due 7/01/2011 (a) 1,943
AAA Aaa 3,645 Florida State Turnpike Authority, Turnpike Revenue Bonds,
Series A, 5% due 7/01/2022 (d) 3,230
AAA Aaa 1,250 Hillsborough County, Florida, IDA, PCR, Refunding
(Tampa Electric Company Project), 6.25% due 12/01/2034 (e) 1,277
AAA Aaa 4,000 Hillsborough County, Florida, School Board, COP,
6% due 7/01/2025 (e) 4,069
AAA Aaa 4,000 Jacksonville, Florida, Capital Improvement Revenue
Refunding Bonds (Stadium Project), 4.75% due 10/01/2025 (a) 3,329
AAA Aaa 2,500 Lakeland, Florida, Electric and Water Revenue
Refunding Bonds, Series A, 5% due 10/01/2028 (e) 2,171
A1+ VMIG1++ 1,000 Manatee County, Florida, PCR, Refunding (Florida Power
and Light Company Project), VRDN, 3.80% due 9/01/2024 (g) 1,000
A1+ VMIG1++ 500 Martin County, Florida, PCR, Refunding (Florida Power
and Light Co. Project), VRDN, 3.80% due 9/01/2024 (g) 500
AAA Aaa 2,000 Miami-Dade County, Florida, Educational Facilities
Authority Revenue Bonds, Series A, 6% due 4/01/2023 (a) 2,040
Miami-Dade County, Florida, HFA Revenue Refunding Bonds,
Home Ownership Mortgage, AMT, Series A-1 (c):
NR* Aaa 1,000 5.55% due 10/01/2019 933
NR* Aaa 4,000 5.625% due 4/01/2032 3,662
AAA Aaa 3,810 Miami-Dade County, Florida, Professional Sports
Franchise Facility Revenue Refunding Bonds, 5% due
10/01/2023 (e) 3,361
AAA Aaa 3,000 Miami-Dade County, Florida, School Board, COP,
Refunding, Series C, 5% due 8/01/2025 (d) 2,606
AAA Aaa 2,000 Miami-Dade County, Florida, Water and Sewer Revenue
Bonds, Series A, 5% due 10/01/2029 (b) 1,733
NR* Aaa 1,630 Orange County, Florida, School Board, COP,
Series A, 5% due 8/01/2024 (e) 1,421
AAA Aaa 4,000 Orlando and Orange County Expressway Authority, Florida,
Expressway Revenue Refunding Bonds, Junior Lien, 5%
due 7/01/2021 (b) 3,555
NR* Aaa 3,100 Osceola County, Florida, Sales Tax Revenue Bonds, 5%
due 4/01/2019 (d) 2,797
NR* Aaa 3,735 Osceola County, Florida, School Board, Refunding Bonds,
COP, Series A, 5% due 6/01/2024 (a) 3,259
A1+ VMIG1++ 200 Pinellas County, Florida, Health Facilities Authority,
Revenue Refunding Bonds (Pooled Hospital Loan Program),
DATES, 3.80% due 12/01/2015 (a)(g) 200
AAA Aaa 2,000 Pinellas County, Florida, Sewer Revenue Refunding
Bonds, 5% due 10/01/2024 (b) 1,755
A1+ VMIG1++ 600 Putnam County, Florida, Development Authority, PCR,
Refunding (Florida Power and Light Company Project), VRDN,
3.80% due 9/01/2024 (g) 600
AAA Aaa 2,135 Saint John's County, Florida, Sales Tax Revenue
Refunding Bonds, 5% due 10/01/2019 (b) 1,923
A1+ VMIG1++ 2,800 Saint Lucie County, Florida, PCR, Refunding (Florida Power
and Light Company Project), VRDN, 3.80% due 1/01/2026 (g) 2,800
NR* Aaa 4,000 Saint Petersburg, Florida, Public Utilities Revenue
Bonds, Series A, 5% due 10/01/2028 (d) 3,474
AAA Aaa 3,000 Sarasota County, Florida, Public Hospital Board, Revenue
Refunding Bonds (Sarasota Memorial Hospital), Series B,
5.25% due 7/01/2024 (e) 2,763
AAA Aaa 3,000 Seminole County, Florida, School Board, COP, Series A, 5%
due 7/01/2023 (e) 2,631
AAA Aaa 3,000 Tallahassee, Florida, Energy System Revenue Refunding
Bonds, Series A, 5% due 10/01/2028 (d) 2,605
AAA Aaa 2,500 Tampa Bay, Florida, Water Utility System Revenue Bonds,
6% due 10/01/2024 (b) 2,546
AAA Aaa 3,575 Tampa-Hillsborough County, Florida, Expressway Authority
Revenue Refunding Bonds, 5% due 7/01/2022 (a) 3,168
NR* Aaa 1,880 Village Center Community Development District, Florida,
Utility Revenue Refunding Bonds, Series A, 5% due
10/01/2023 (e) 1,658
Puerto Rico--2.6% AAA Aaa 2,500 Puerto Rico Public Buildings Authority Revenue Bonds
(Government Facilities), Series B, 5% due 7/01/2027 (a) 2,198
Total Investments (Cost--$91,915)--103.6% 88,936
Liabilities in Excess of Other Assets--(3.6%) (3,056)
---------
Net Assets--100.0% $ 85,880
=========
<FN>
(a)AMBAC Insured.
(b)FGIC Insured.
(c)FNMA/GNMA Collateralized.
(d)FSA Insured.
(e)MBIA Insured.
(f)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at November 30, 1999.
(g)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at November 30, 1999.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
Portfolio Abbreviations
To simplify the listings of MuniHoldings Florida Insured Fund V's
portfolio holdings in the Schedule of Investments, we have
abbreviated the names of many of the securities according to the
list below and at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DATES Daily Adjustable Tax-Exempt Securities
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
VRDN Variable Rate Demand Notes
MuniHoldings Florida Insured Fund V, November 30, 1999
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of November 30, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$91,914,539) $ 88,935,790
Receivables:
Interest $ 1,384,522
Investment adviser 22,428 1,406,950
------------
Other assets 98,975
------------
Total assets 90,441,715
------------
Liabilities: Payables:
Securities purchased 4,064,481
Custodian bank 151,455
Offering costs 131,000
Dividends to shareholders 87,900 4,434,836
------------
Accrued expenses and other liabilities 126,983
------------
Total liabilities 4,561,819
------------
Net Assets: Net assets $ 85,879,896
============
Capital: Capital Shares (unlimited number of shares authorized):
Preferred Shares, par value $.10 per share (1,400 shares
of AMPS* issued and outstanding at $25,000
per share liquidation preference) $ 35,000,000
Common Shares, par value $.10 per share (3,698,102
shares issued and outstanding) $ 369,810
Paid-in capital in excess of par 54,560,039
Undistributed investment income--net 328,106
Accumulated realized capital losses on investments--net (1,399,310)
Unrealized depreciation on investments--net (2,978,749)
------------
Total--Equivalent to $13.76 net asset value per Common Share
(market price--$12.00) 50,879,896
------------
Total capital $ 85,879,896
============
<FN>
*Auction Market Preferred Shares.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Period July 23, 1999++ to November 30, 1999
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 1,592,395
Income:
Expenses: Investment advisory fees $ 156,536
Commission fees 28,117
Accounting services 16,459
Professional fees 14,109
Transfer agent fees 9,656
Trustees' fees and expenses 7,153
Listing fees 2,857
Custodian fees 2,767
Printing and shareholder reports 2,332
Pricing fees 1,692
Other 1,864
------------
Total expenses before reimbursement 243,542
Reimbursement of expenses (173,320)
------------
Total expenses after reimbursement 70,222
------------
Investment income--net 1,522,173
------------
Realized & Realized loss on investments--net (1,399,310)
Unrealized Loss on Unrealized depreciation on investments--net (2,978,749)
Investments--Net: ------------
Net Decrease in Net Assets Resulting from Operations $ (2,855,886)
============
<FN>
++Commencement of operations.
See Notes to Financial Statements.
</TABLE>
MuniHoldings Florida Insured Fund V, November 30, 1999
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
For the Period
July 23, 1999++ to
Increase (Decrease) in Net Assets: November 30, 1999
<S> <S> <C>
Operations: Investment income--net $ 1,522,173
Realized loss on investments--net (1,399,310)
Unrealized depreciation on investments--net (2,978,749)
------------
Net decrease in net assets resulting from operations (2,855,886)
------------
Dividends to Investment income--net:
Shareholders: Common Shares (839,242)
Preferred Shares (354,825)
------------
Net decrease in net assets resulting from dividends to shareholders (1,194,067)
------------
Capital Share Net proceeds from issuance of Common Shares 55,369,350
Transactions: Proceeds from issuance of Preferred Shares 35,000,000
Value of shares issued to Common Shareholders in reinvestment of dividends 2,047
Offering costs resulting from the issuance of Common Shares (138,323)
Offering and underwriting costs resulting from the issuance of Preferred Shares (403,230)
------------
Net increase in net assets derived from capital share transactions 89,829,844
------------
Net Assets: Total increase in net assets 85,779,891
Beginning of period 100,005
------------
End of period* $ 85,879,896
============
<FN>
*Undistributed investment income--net $ 328,106
============
++Commencement of operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. For the Period
July 23, 1999++ to
Increase (Decrease) in Net Asset Value: November 30, 1999
<S> <S> <C>
Per Share Net asset value, beginning of period $ 15.00
Operating ---------
Performance: Investment income--net .42
Realized and unrealized loss on investments--net (1.17)
---------
Total from investment operations (.75)
---------
Less dividends to Common Shareholders from investment income--net (.23)
---------
Capital charge resulting from issuance of Common Shares (.04)
---------
Effect of Preferred Share activity:++++
Dividends to Preferred Shareholders:
Investment income--net (.10)
Capital charge resulting from issuance of Preferred Shares (.12)
---------
Total effect of Preferred Share activity (.22)
---------
Net asset value, end of period $ 13.76
=========
Market price per share, end of period $ 12.00
=========
Total Investment Based on market price per share (18.59%)+++
Return:** =========
Based on net asset value per share (6.65%)+++
=========
Ratios Based on Expenses, net of reimbursement*** .39%*
Average Net Assets =========
Of Common Shares: Total expenses*** 1.34%*
=========
Total investment income--net*** 8.36%*
=========
Amount of dividends to Preferred Shareholders 1.95%*
=========
Investment income--net, to Common Shareholders 6.41%*
=========
Ratios Based Expenses, net of reimbursement .25%*
on Total =========
Average Net Total expenses .86%*
Assets:++++++*** =========
Total investment income--net 5.35%*
=========
Ratios Based on Dividends to Preferred Shareholders 3.46%*
Average Net Assets =========
Of Preferred Shares:
Supplemental Net assets, net of Preferred Shares, end of period (in thousands) $ 50,880
Data: =========
Preferred Shares outstanding, end of period (in thousands) $ 35,000
=========
Portfolio turnover 42.08%
=========
Leverage: Asset coverage per $1,000 $ 2,454
=========
Dividends Series A--Investment income--net $ 253
Per Share on =========
Preferred Shares
Outstanding:
<FN>
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or less than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales charges.
***Do not reflect the effect of dividends to Preferred Shareholders.
++Commencement of operations.
++++The Fund's Preferred Shares were issued on August 16, 1999.
++++++Includes Common and Preferred Shares average net assets.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
MuniHoldings Florida Insured Fund V, November 30, 1999
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniHoldings Florida Insured Fund V (the "Fund") is registered under
the Investment Company Act of 1940 as a non-diversified, closed-end
management investment company. The Fund's financial statements are
prepared in accordance with generally accepted accounting
principles, which may require the use of management accruals and
estimates. These unaudited financial statements reflect all
adjustments, which are, in the opinion of management, necessary to a
fair statement of the results for the interim period presented. All
such adjustments are of a normal recurring nature. Prior to
commencement of operations on July 23, 1999, the Fund had no
operations other than those relating to organizational matters and
the sale of 6,667 shares of Common Shares on June 15, 1999 to Fund
Asset Management, L.P. ("FAM") for $100,005. The Fund determines and
makes available for publication the net asset value of its Common
Shares on a weekly basis. The Fund's Common Shares are listed on the
American Stock Exchange under the symbol FDM. The following is a
summary of significant accounting policies followed by the Fund.
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of
such exchanges. Options written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of
options traded in the over-the-counter market, valuation is the last
asked price (options written) or the last bid price (options
purchased). Securities with remaining maturities of sixty days or
less are valued at amortized cost, which approximates market value.
Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or
under the direction of the Board of Trustees of the Fund, including
valuations furnished by a pricing service retained by the Fund,
which may utilize a matrix system for valuations. The procedures of
the pricing service and its valuations are reviewed by the officers
of the Fund under the general supervision of the Board of Trustees.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at
a specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal
to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
* Options--The Fund is authorized to write covered call options and
purchase call and put options. When the Fund writes an option, an
amount equal to the premium received by the Fund is reflected as an
asset and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written. When a security is purchased or sold through an
exercise of an option, the related premium paid (or received) is
added to (or deducted from) the basis of the security acquired or
deducted from (or added to) the proceeds of the security sold. When
an option expires (or the Fund enters into a closing transaction),
the Fund realizes a gain or loss on the option to the extent of the
premiums received or paid (or gain or loss to the extent the cost of
the closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Offering expenses--Direct expenses relating to the public
offering of the Fund's Common and Preferred Shares were charged to
capital at the time of issuance of the shares.
(f) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
(g) Custodian bank--The Fund recorded an amount payable to the
custodian bank reflecting an overnight overdraft, which resulted
from an unprojected payment of net investment income dividends.
2. Investment Advisory Agreement and Transactions with
Affiliates:
The Fund has entered into an Investment Advisory Agreement
with FAM. The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co.,
Inc. ("ML & Co."), which is the limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of .55% of
the Fund's average weekly net assets, including proceeds from the
issuance of Preferred Shares. For the period July 23, 1999 to
November 30, 1999, FAM earned fees of $156,536, of which $144,591
was voluntarily waived. In addition, FAM also reimbursed the Fund
$28,729 in additional expenses.
During the period July 23, 1999 to November 30, 1999, Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MLPF&S"), an affiliate of FAM,
received underwriting fees of $262,500 in connection with the
issuance of the Fund's Preferred Shares.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the period July 23, 1999 to November 30, 1999 were $116,387,448
and $28,877,519, respectively.
Net realized losses for the period July 23, 1999 to November 30,
1999 and net unrealized losses as of November 30, 1999 were
as follows:
Realized Unrealized
Losses Losses
Long-term investments $ (1,399,310) $(2,978,749)
------------ -----------
Total $ (1,399,310) $(2,978,749)
============ ===========
As of November 30, 1999, net unrealized depreciation for Federal
income tax purposes aggregated $2,978,749, of which $209,269 related
to appreciated securities and $3,188,018 related to depreciated
securities. The aggregate cost of investments at November 30, 1999
for Federal income tax purposes was $91,914,539.
4. Capital Share Transactions:
The Fund is authorized to issue an unlimited number of shares of
beneficial interest, including Preferred Shares, par value $.10 per
share, all of which were initially classified as Common Shares. The
Board of Trustees is authorized, however, to reclassify any unissued
shares of beneficial interest without approval of holders of Common
Shares.
Common Shares
Shares issued and outstanding during the period July 23, 1999 to
November 30, 1999 increased by 3,691,290 from shares sold and by 145
as a result of dividend reinvestment.
Preferred Shares
Auction Market Preferred Shares ("AMPS") are shares of Preferred
Shares of the Fund, with a par value of $.10 per share and a
liquidation preference of $25,000 per share, that entitle their
holders to receive cash dividends at an annual rate that may vary
for the successive dividend periods. The yield in effect at November
30, 1999 was 3.95%.
In connection with the offering of AMPS, the Board of Trustees
reclassified 1,400 shares of unissued beneficial interest as AMPS.
Shares issued and outstanding during the period July 23, 1999 to
November 30, 1999 increased by 1,400 as a result of the AMPS
offering.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from .25% to .375%,
calculated on the proceeds of each auction. For the period July 23,
1999 to November 30, 1999, MLPF&S, an affiliate of FAM, earned
$20,629 as commissions.
5. Subsequent Event:
On December 8, 1999, the Fund's Board of Trustees declared an
ordinary income dividend to Common Shareholders in the amount of
$.069000 per share, payable on December 30, 1999 to shareholders of
record as of December 23, 1999.
MuniHoldings Florida Insured Fund V, November 30, 1999
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute all or a portion of its
net investment income to its shareholders on a monthly basis. In
order to provide shareholders with a more consistent yield to the
current trading price of the Fund's Common Shares, the Fund may at
times pay out less than the entire amount of net investment income
earned in any particular month and may at times in any particular
month pay out such accumulated but undistributed income in addition
to net investment income earned in that month. As a result, the
dividends paid by the Fund for any particular month may be more or
less than the amount of net investment income earned by the Fund
during such month. The Fund's current accumulated but undistributed
net investment income, if any, is disclosed in the Statement of
Assets, Liabilities and Capital, which comprises part of the
financial information included in this report.
QUALITY PROFILE
The quality ratings of securities in the Fund as of
November 30, 1999 were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 93.4%
BBB/Baa 3.4
Other++ 6.8
[FN]
++Temporary investments in short-term municipal securities.
MuniHoldings Florida Insured Fund V, November 30, 1999
OFFICERS AND TRUSTEES
Terry K. Glenn, President and Trustee
Ronald W. Forbes, Trustee
Cynthia A. Montgomery, Trustee
Charles C. Reilly, Trustee
Kevin A. Ryan, Trustee
Richard R. West, Trustee
Arthur Zeikel, Trustee
Vincent R. Giordano, Senior Vice President
Robert A. DiMella, Vice President
Kenneth A. Jacob, Vice President
Robert D. Sneeden, Vice President
Donald C. Burke, Vice President and Treasurer
William E. Zitelli, Secretary
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Transfer Agents
Common Shares:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Preferred Shares:
The Bank of New York
100 Church Street
New York, NY 10286
AMEX Symbol
FDM
