MERRILL LYNCH MUNICIPAL BOND FUND, INC.
Supplement dated April 1, 1996 to the
Statement of Additional Information dated October 31, 1995
As of the date hereof, the Insured Portfolio may engage
in transactions in financial futures contracts for hedging
purposes. Accordingly, the disclosure set forth in the Statement
of Additional Information is modified as follows:
The first paragraph of "INVESTMENT OBJECTIVES AND
POLICIES -- Transactions in Futures Contracts" on page 4 of the
Statement of Additional Information is deleted and replaced by the
following:
The Insured Portfolio, the National Portfolio and the Limited
Maturity Portfolio (collectively, the "Portfolios") may engage in
the purchase and sale of futures contracts on an index of municipal
bonds or on U.S. Treasury securities, or options on such futures
contracts, for hedging purposes only. The Portfolios may sell such
futures contracts in anticipation of a decline in the value of
municipal bonds held by them or may purchase such futures contracts
in anticipation of an increase in the cost of municipal bonds they
intend to acquire. The Portfolios also are authorized to purchase
and sell other financial futures contracts which in the opinion of
management provide an appropriate hedge for some or all of the
Fund's portfolio securities.
The second paragraph of "ADDITIONAL INFORMATION --
Description of Financial Futures Contracts -- Futures Contracts" on
pages 46 and 47 of the Statement of Additional Information is
deleted and replaced by the following:
The Insured Portfolio, the National and the Limited Maturity
Portfolio (collectively, the "Portfolios") may sell futures
contracts in anticipation of a decline in value of their
investments in Municipal Bonds. The loss associated with any such
decline could be reduced without employing futures as a hedge by
selling long-term securities and either reinvesting the proceeds in
securities with shorter maturities of by holding assets in cash.
This strategy, however, entails increased transaction costs in the
form of brokerage commissions and dealer spreads and will typically
reduce the Portfolio's average yields as a result of the shortening
of maturities.
Code # 10130-1095 ALL
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