MERRILL LYNCH
NEW YORK
MUNICIPAL
BOND FUND
Merrill Lynch Multi-State
Municipal Series Trust
FUND LOGO
Annual Report
September 30, 1996
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject
to change.
<PAGE>
Merrill Lynch New York
Municipal Bond Fund
Merrill Lynch Multi-State
Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
TO OUR SHAREHOLDERS
The Municipal Market Environment
The tax-exempt bond market continued its relatively strong
performance during the three months ended September 30, 1996. Long-
term uninsured municipal revenue bond yields, as measured by the
Bond Buyer Revenue Bond Index, declined 20 basis points (0.20%) to
end the September quarter at 6.00%. The economic environment has
remained little changed in recent months. Economic growth continued
to be moderate and inflation well-contained. The US Treasury bond
market remained under greater pressure, and bond yields only
marginally improved. By September 30, 1996, the yield on the 30-year
US Treasury bond fell 4 basis points to 6.92%.
The municipal bond market improved in recent months largely in
response to its increasingly strong technical position. The supply
of new tax-exempt bond issuance declined during the September
quarter. Over the last six months, less than $90 billion in new long-
term municipal securities were underwritten, an increase of just 9%
versus the comparable period a year earlier. Only $36 billion in tax-
exempt securities were issued during the September quarter, a 3%
decline as compared to the September 30, 1995 quarter. The recent
quarterly issuance in some states, such as Michigan and
Massachusetts, declined by as much as 35%.
<PAGE>
Currently, the future direction of interest rates remains unclear.
The Federal Reserve Board's decision to hold interest rates steady
in late September temporarily relieved fears of rising interest
rates for the remainder of 1996. Should economic growth slow further
in the coming months, as is expected by the Federal Reserve Board,
and inflation remain well-contained, interest rates are poised to
decline further. Under such a scenario, municipal bond yields also
are likely to decline. Given current levels of expected future
supply, the municipal bond market could be expected to perform very
well as both retail and institutional investors chase an
increasingly scarce commodity.
Fiscal Year in Review
For the 12 months ended September 30, 1996, we managed the Fund with
the intention of sustaining an appealing level of tax-exempt income
while seeking to achieve an attractive total return. We entered the
12-month period optimistic that interest rates would decline. This
opinion was based on the belief that higher interest rates earlier
in the year would cause a drag on the economy. To take advantage of
this scenario, we extended the Fund's duration and lowered our cash
reserve position to a minimal level. This strategy resulted in a
total return performance similar to the industry average. From
August 1995 to January 1996, the impression that the economy had
slowed and that there was no inflation on the horizon was enough to
lower interest rates 55 basis points. Two rounds of Federal Reserve
Board easings in December 1995 and January 1996 made investors
complacent. However, the report of stronger-than-expected employment
data in March sparked a period of extreme volatility, which still
persists. Looking ahead, we expect this volatility to continue, and
our portfolio strategy is expected to remain neutral until the
direction of the economy becomes clearer.
In Conclusion
We appreciate your ongoing interest in Merrill Lynch New York
Municipal Bond Fund, and we look forward to assisting you with your
financial needs in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
<PAGE>
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Roberto Roffo)
Roberto Roffo
Vice President and Portfolio Manager
October 31, 1996
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Fund through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 4% and bear no ongoing distribution or account maintenance
fees. Class A Shares are available only to eligible investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.25% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 10 years. (There is no initial
sales charge for automatic share conversions.)
* Class C Shares are subject to a distribution fee of 0.35% and an
account maintenance fee of 0.25%. In addition, Class C Shares are
subject to a 1% contingent deferred sales charge if redeemed within
one year of purchase.
* Class D Shares incur a maximum initial sales charge of 4% and an
account maintenance fee of 0.10% (but no distribution fee).
<PAGE>
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
9/30/96 6/30/96 9/30/95 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $11.12 $11.02 $11.04 +0.72% +0.91%
Class B Shares* 11.12 11.02 11.04 +0.72 +0.91
Class C Shares* 11.12 11.02 11.04 +0.72 +0.91
Class D Shares* 11.11 11.01 11.03 +0.73 +0.91
Class A Shares--Total Return* +6.19(1) +2.25(2)
Class B Shares--Total Return* +5.66(3) +2.12(4)
Class C Shares--Total Return* +5.55(5) +2.10(6)
Class D Shares--Total Return* +6.09(7) +2.23(8)
Class A Shares--Standardized 30-day Yield 4.74%
Class B Shares--Standardized 30-day Yield 4.43%
Class C Shares--Standardized 30-day Yield 4.32%
Class D Shares--Standardized 30-day Yield 4.65%
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
(1)Percent change includes reinvestment of $0.590 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.144 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.533 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.131 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.522 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.128 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.578 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.142 per share ordinary
income dividends.
</TABLE>
PERFORMANCE DATA (continued)
<PAGE>
Total Return Based on a $10,000 Investment--Class A Shares
A line graph depicting the growth of an investment in the Fund's
Class A Shares compared to growth of an investment in the Lehman
Brothers Municipal Bond Index. Beginning and ending values are:
10/25/88** 9/96
ML New York Municipal Bond Fund++--
Class A Shares* $ 9,600 $16,564
Lehman Brothers Municipal Bond
Index++++ $10,000 $18,491
Total Return Based on a $10,000 Investment--Class B Shares
A line graph depicting the growth of an investment in the Fund's
Class B Shares compared to growth of an investment in the Lehman
Brothers Municipal Bond Index. Beginning and ending values are:
10/25/88** 9/96
ML New York Municipal Bond Fund++--
Class B Shares* $10,000 $18,732
Lehman Brothers Municipal Bond
Index++++-- $10,000 $21,370
[FN]
*Assuming maxiumum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of Operations.
++ML New York Municipal Bond Fund invests primarily in long-term
investment-grade obligations issued by or on behalf of the State of
New York, its political subdivisions, agencies and instumentalities
and obligations of other qualifying issuers.
++++This unmanaged Index consists of long-term revenue bonds, prerefunded
bonds, general obligation bonds and insured bonds.
Past performance is not predictive of future performance.
Average Annual Total Return--Class A and Class B Shares
% Return Without % Return With
Sales Charge Sales Charge**
<PAGE>
Class A Shares*
Year Ended 9/30/96 +6.19% +1.95%
Five Years Ended 9/30/96 +6.48 +5.61
Inception (10/25/88)
through 9/30/96 +7.12 +6.57
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 9/30/96 +5.66% +1.66%
Five Years Ended 9/30/96 +5.92 +5.92
Ten Years Ended 9/30/96 +6.48 +6.48
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced
to 0% after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
PERFORMANCE DATA (continued)
Total Return Based on a $10,000 Investment--Class C Shares and Class D Shares
A line graph depicting the growth of an investment in the Fund's
Class C and D Shares compared to growth of an investment in the
Lehman Brothers Municipal Bond Index. Beginning and ending values
are:
10/21/94** 9/96
ML New York Municipal Bond Fund++--
Class C Shares* $10,000 $11,355
ML New York Municipal Bond Fund++--
Class D Shares* $ 9,600 $10,988
Lehman Brothers Municipal Bond
Index++++ $10,000 $12,003
[FN]
*Assuming maxiumum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of Operations.
++ML New York Municipal Bond Fund invests primarily in long-term
investment-grade obligations issued by or on behalf of the State of
New York, its political subdivisions, agencies and instumentalities
and obligations of other qualifying issuers.
++++This unmanaged Index consists of long-term revenue bonds, prerefunded
bonds, general obligation bonds and insured bonds.
Past performance is not predictive of future performance.
<PAGE>
Average Annual Total Return--Class C and Class D Shares
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 9/30/96 +5.55% +4.55%
Inception (10/21/94)
through 9/30/96 +6.75 +6.75
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced
to 0% after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 9/30/96 +6.09% +1.85%
Inception (10/21/94)
through 9/30/96 +7.24 +5.02
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/25/88--12/31/88 $10.85 $10.76 -- $0.138 + 0.44%
1989 10.76 11.00 -- 0.742 + 9.43
1990 11.00 10.76 -- 0.734 + 4.71
1991 10.76 11.43 -- 0.728 +13.44
1992 11.43 11.74 $0.110 0.727 +10.37
1993 11.74 12.08 0.241 0.775 +11.81
1994 12.08 10.43 -- 0.629 - 8.60
1995 10.43 11.48 -- 0.605 +16.25
1/1/96--9/30/96 11.48 11.12 -- 0.430 + 0.78
------ ------
Total $0.351 Total $5.508
Cumulative total return as of 9/30/96: +72.55%**
<PAGE>
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
11/1/85--12/31/85 $10.00 $10.34 -- $0.098 + 4.60%
1986 10.34 11.24 $0.073 0.732 +16.95
1987 11.24 10.44 -- 0.722 - 0.79
1988 10.44 10.76 -- 0.685 + 9.92
1989 10.76 11.00 -- 0.687 + 8.89
1990 11.00 10.77 -- 0.680 + 4.29
1991 10.77 11.43 -- 0.672 +12.76
1992 11.43 11.74 0.110 0.668 + 9.82
1993 11.74 12.09 0.241 0.714 +11.34
1994 12.09 10.43 -- 0.573 - 9.14
1995 10.43 11.48 -- 0.549 +15.67
1/1/96--9/30/96 11.48 11.12 -- 0.389 + 0.40
------ ------
Total $0.424 Total $7.169
Cumulative total return as of 9/30/96: +120.40%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<TABLE>
Performance Summary--Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $10.76 $10.43 -- $0.107 - 2.05%
1995 10.43 11.48 -- 0.538 +15.55
1/1/96--9/30/96 11.48 11.12 -- 0.380 + 0.33
------
Total $1.025
<PAGE>
Cumulative total return as of 9/30/96: +13.55%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
<TABLE>
Performance Summary--Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94--12/31/94 $10.76 $10.42 -- $0.118 - 2.05%
1995 10.42 11.47 -- 0.594 +16.15
1/1/96--9/30/96 11.47 11.11 -- 0.421 + 0.70
------
Total $1.133
Cumulative total return as of 9/30/96: +14.57%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of Merrill Lynch New York Municipal Bond
Fund's portfolio holdings in the Schedule of Investments, we have
abbreviated the names of many of the securities according to the
list at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
GO General Obligation Bonds
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New York--92.2%
<S> <S> <C> <S> <C>
AAA Aaa $ 3,205 Babylon, New York, IDA, Resource Recovery Revenue Bonds (Ogden Martin
Systems of Babylon, Inc.), Series C, 8.50% due 7/01/1998 (d) $ 3,531
NR* Baa1 14,750 Babylon, New York, IDA, Waste Facilities Revenue Bonds (Babylon Community
Waste Management), Series A, 7.875% due 7/01/1999 (d) 16,362
AAA Aaa 4,000 Buffalo, New York, Sewer Authority Revenue Bonds, Series F, 6% due
7/01/2013 (b) 4,235
AA+ Aa1 6,200 Hornell, New York, IDA, IDR (Crowley Foods, Inc.), 7.75% due 12/01/2016 6,360
AAA Aaa 3,000 Metropolitan Transportation Authority, New York, Commuter Facilities
Revenue Bonds, Series A, 6.10% due 7/01/2026 (b) 3,089
BBB Baa1 10,000 Metropolitan Transportation Authority, New York, Service Contract Revenue
Bonds(Commuter Facilities), Series O, 5.75% due 7/01/2013 9,862
AAA Aaa 2,950 Monroe County, New York, Airport Authority Revenue Bonds (Greater Rochester
International Airport), AMT, 7.25% due 1/01/2009 (c) 3,195
BBB+ Baa 9,595 Monroe County, New York, COP, 8.05% due 1/01/2011 10,402
A1+ NR* 700 Nassau County, New York, IDA, Civic Facilities Revenue Bonds (Cold Spring
Harbor Laboratory Project), VRDN, 3.95% due 7/01/2019 (e) 700
New York City, New York, GO, UT:
BBB+ Baa1 9,325 Refunding, Series A, 7% due 8/01/2007 10,090
BBB+ Baa1 5,400 Refunding, Series A, 6.50% due 8/01/2011 5,563
BBB+ Baa1 2,000 Refunding, Series E, 6.50% due 2/15/2006 2,088
BBB+ Baa1 5,000 Series B, 7% due 6/01/2016 5,255
BBB+ Baa1 5,450 Series C, 7.25% due 8/15/2024 5,757
BBB+ Baa1 5,000 Series D, 6.50% due 2/15/2006 5,221
New York City, New York, IDA, Civic Facilities Revenue Bonds:
NR* NR* 2,000 (New York Blood Center Inc. Project), 7.20% due 5/01/2004 (d) 2,261
NR* NR* 6,895 (New York Blood Center Inc. Project), 7.25% due 5/01/2004 (d) 7,869
AAA Aaa 4,690 (USTA National Tennis Center Project), 6.60% due 11/15/2011 (g) 5,101
A1+ NR* 400 New York City, New York, IDA, IDR (Japan Airlines Company Ltd. Project),
VRDN, AMT, 4% due 11/01/2015 (e) 400
<PAGE>
BB+ Baa2 2,030 New York City, New York, IDA, Special Facilities Revenue Bonds
(1990 AMR/American Airlines Inc. Project), AMT, 7.75% due 7/01/2019 2,137
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New York (continued)
<S> <S> <C> <S> <C>
New York City, New York, Municipal Water Finance Authority, Water and
Sewer System Revenue Bonds:
A1 VMIG1++ $19,600 Residual Interest Trust Receipt, Series RI-2, 7.716% due 6/15/2025 (h) $ 19,747
AAA Aaa 1,000 Series A-1994, 7% due 6/15/2015 (b) 1,097
A1+ VMIG1++ 6,600 VRDN, Series G, 3.75% due 6/15/2024 (b)(e) 6,600
New York City, New York, Trust for Cultural Resources Revenue Bonds:
AAA Aaa 3,750 (American Museum of Natural History), Series A, 6.90% due 4/01/2001 (c)(d) 4,160
A1+ VMIG1++ 1,000 (Soloman R. Guggenheim), VRDN, Series B, 3.95% due 12/01/2015 (e) 1,000
New York State Dormitory Authority Revenue Bonds:
BBB Baa1 2,475 (Consolidated City University Systems), Second Generation, Series A, 5.75%
due 7/01/2018 2,418
BBB Baa1 6,500 (Consolidated City University Systems), Series A, 5.625% due 7/01/2016 6,292
AAA Aaa 16,000 (Consolidated City University Systems), Third Generation-Series 1, 5.375%
due 7/01/2025 (a) 15,246
BBB Baa1 21,800 (Department of Health), 5.50% due 7/01/2025 20,090
AAA Aaa 4,250 (Mental Health Services Facilities Improvement), Series B, 5.125%
due 8/15/2021 (c) 3,916
BBB+ Baa1 18,900 (Mental Health Services Facilities Improvement), Series B, 5.375%
due 2/15/2026 17,084
BBB+ Baa1 5,000 Refunding (State University Educational Facilities), Series A, 5.25%
due 5/15/2015 4,619
BBB+ Baa1 12,000 Refunding (State University Educational Facilities), Series B, 7%
due 5/15/2016 12,780
AA Aa 6,650 Refunding (Vassar College), 5% due 7/01/2025 5,969
AAA Aaa 7,820 New York State Energy Research and Development Authority, Facilities
Revenue Bonds (Consolidated Edison Company Inc.), AMT, Series A, 6.75%
due 1/15/2027 (c) 8,281
A1+ VMIG1++ 100 New York State Energy Research and Development Authority, PCR (New York
Electric and Gas), VRDN, Series D, 3.80% due 10/01/2029 (e) 100
New York State Environmental Facilities Corporation, PCR (State Water
Revolving Fund), Series E:
A Aa 5,000 6.50% due 6/15/2014 5,330
A- Aa 4,250 (New York City Municipal Water Financing Project), 6.875% due 6/15/2014 4,723
<PAGE>
BBB NR* 2,750 New York State Environmental Facilities Corporation, Special Obligation
Bonds (Riverbank State Park), 7.25% due 4/01/2012 2,957
New York State Local Government Assistance Corporation:
A A 10,000 Refunding, Series C, 5% due 4/01/2021 8,913
A A 10,000 Refunding, Series E, 5% due 4/01/2021 9,057
A A 12,880 Series D, 5% due 4/01/2023 11,430
A1+ VMIG1++ 2,400 VRDN, Series B, 3.75% due 4/01/2025 (e) 2,400
New York State Medical Care Facilities Finance Agency Revenue Bonds:
AAA Aaa 6,820 (Health Insurance Plan of Greater New York), Series B, 8.50%
due 12/01/1997 (a)(d) 7,178
AAA Aaa 5 (Mental Health Services Facilities), Series C, 7.30% due 8/15/2001 (d) 6
BBB+ Baa1 1,070 (Mental Health Services Facilities), Series C, 7.30% due 2/15/2021 1,172
BBB+ Baa1 1,210 (Mental Health Services Facilities Improvement), Series B, 7.625%
due 8/15/2017 1,354
BBB+ Baa1 5,115 (Mental Health Services Facilities Improvement), Series D, 7.40%
due 2/15/2018 5,658
AAA Aaa 6,140 (Saint Francis Hospital Project), Series A, 7.625% due 11/01/2021 (b) 6,649
BBB Baa 12,200 (Security Hospital), Series A, 7.40% due 8/15/2021 13,113
NR* Aa 9,980 New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, AMT,
Series 46, 6.65% due 10/01/2025 10,330
NR* Aa 4,900 New York State Mortgage Agency Revenue Bonds, Series 41-A, 6.45%
due 10/01/2014 5,070
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New York (concluded)
<S> <S> <C> <S> <C>
AA- Aa $21,205 New York State Power Authority, Revenue and General Purpose Bonds,
Series Y, 6.75% due 1/01/2018 $ 22,978
AAA Aaa 10,850 New York State Thruway Authority, Highway and Bridge Trust Fund, UT,
Series B, 6.25% due 4/01/2012 (b) 11,462
New York State Urban Development Corporation Revenue Bonds:
BBB Baa1 1,500 (Alfred Technology Resources Inc. Project), 7.875% due 1/01/2000 (d) 1,674
BBB Baa1 20,500 (Correctional Capital Facilities), Series 6, 5.375% due 1/01/2025 18,482
BBB Baa1 1,685 Refunding (Clarkson Center Advance Materials), 5.50% due 1/01/2020 1,586
BBB Baa1 14,500 Refunding (Correctional Capital Facilities), Series A, 5.25% due 1/01/2021 12,915
AAA Aaa 8,470 Refunding (Correctional Facilities), Series A, 5.50% due 1/01/2014 (a) 8,479
BBB Baa1 9,475 Refunding (State Facilities), 5.70% due 4/01/2020 9,166
BBB Baa1 2,250 Refunding (University Facility Grant), 5.50% due 1/01/2019 2,123
BBB Aaa 4,000 (State Facilities), 7.50% due 4/01/2001 (d) 4,534
<PAGE>
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 8,000 69th Series, 7.125% due 6/01/2025 8,674
AA- A1 7,995 76th Series, AMT, 6.50% due 11/01/2026 8,355
AAA Aaa 1,540 104th Series, 3rd Installment, 4.75% due 1/15/2026 (a) 1,319
AAA Aaa 8,665 Suffolk County, New York, Water Authority, Waterworks Revenue Bonds,
5% due 6/01/2017 (c) 7,923
Triborough Bridge and Tunnel Authority, New York, General Purpose Revenue Bonds:
AAA Aaa 9,000 Refunding, Series Y, 6.125% due 1/01/2021 (f) 9,659
A+ Aa 5,000 Series X, 6.50% due 1/01/2019 5,326
A- A1 13,050 Triborough Bridge and Tunnel Authority, New York, Special Obligation
Refunding Bonds, Series B, 6.875% due 1/01/2015 14,182
Total Investments (Cost--$461,998)--92.2% 483,054
Other Assets Less Liabilities--7.8% 40,583
--------
Net Assets--100.0% $523,637
========
<FN>
(a)AMBAC Insured.
(b)FGIC Insured.
(c)MBIA Insured.
(d)Prerefunded.
(e)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at September 30, 1996.
(f)CAPMAC Insured.
(g)FSA Insured.
(h)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 September 30, 1996.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues have not been audited by Deloitte &Touche LLP.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<PAGE>
<TABLE>
Statement of Assets and Liabilities as of September 30, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$461,997,858) (Note 1a) $483,054,253
Cash 17,160
Receivables:
Securities sold $ 35,045,385
Interest 8,903,650
Beneficial interest sold 212,254 44,161,289
------------
Prepaid registration fees and other assets (Note 1e) 99,571
------------
Total assets 527,332,273
------------
Liabilities: Payables:
Securities purchased 1,348,331
Beneficial interest redeemed 1,278,547
Dividends to shareholders (Note 1f) 509,452
Investment adviser (Note 2) 220,099
Distributor (Note 2) 164,623 3,521,052
------------
Accrued expenses and other liabilities 174,057
------------
Total liabilities 3,695,109
------------
Net Assets: Net assets $523,637,164
============
Net Assets Class A Shares of beneficial interest, $.10 par value, unlimited
Consist of: number of shares authorized $ 195,730
Class B Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 3,627,697
Class C Shares of beneficial interest, $.10 par value, unlimited
snumber of hares authorized 37,544
Class D Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 848,480
Paid-in capital in excess of par 520,102,719
Accumulated realized capital losses on investments--net (Note 5) (12,552,733)
Accumulated distributions in excess of realized captial gains on
investments--net (Note 1f) (9,678,668)
Unrealized appreciation on investments--net 21,056,395
------------
Net assets $523,637,164
============
<PAGE>
Net Asset Value: Class A--Based on net assets of $21,761,887 and 1,957,297 shares
of beneficial interest outstanding $ 11.12
============
Class B--Based on net assets of $403,402,644 and 36,276,973 shares
of beneficial interest outstanding $ 11.12
============
Class C--Based on net assets of $4,175,610 and 375,436 shares
of beneficial interest outstanding $ 11.12
============
Class D--Based on net assets of $94,297,023 and 8,484,802 shares
of beneficial interest outstanding $ 11.11
============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
September 30, 1996
<S> <S> <C>
Investment Income Interest and amortization of premium and discount earned $ 34,180,072
(Note 1d):
Expenses: Investment advisory fees (Note 2) 3,125,896
Account maintenance and distribution fees--Class B (Note 2) 2,424,324
Transfer agent fees--Class B (Note 2) 245,628
Accounting services (Note 2) 110,355
Printing and shareholder reports 75,156
Registration fees (Note 1e) 66,667
Professional fees 64,812
Account maintenance fees--Class D (Note 2) 59,864
Custodian fees 32,665
Trustees' fees and expenses 27,853
Account maintenance and distribution fees--Class C (Note 2) 25,832
Transfer agent fees--Class D (Note 2) 24,699
Pricing fees 10,193
Transfer agent fees--Class A (Note 2) 9,470
Transfer agent fees--Class C (Note 2) 2,284
Other 11,177
------------
Total expenses 6,316,875
------------
Investment income--net 27,863,197
------------
<PAGE>
Realized & Realized gain on investments--net 3,915,290
Unrealized Change in unrealized appreciation on investments--net 338,186
Gain on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 32,116,673
(Notes 1b, 1d & 3): ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended
September 30,
Increase (Decrease) in Net Assets: 1996 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 27,863,197 $ 31,982,147
Realized gain (loss) on investments--net 3,915,290 (12,552,800)
Change in unrealized appreciation on investments--net 338,186 20,412,080
------------ ------------
Net increase in net assets resulting from operations 32,116,673 39,841,427
------------ ------------
Dividends to Investment income--net:
Shareholders Class A (1,204,108) (1,357,050)
(Note 1f): Class B (23,330,565) (30,476,605)
Class C (202,740) (77,075)
Class D (3,125,784) (71,417)
------------ ------------
Net decrease in net assets resulting from dividends to
shareholders (27,863,197) (31,982,147)
------------ ------------
Beneficial Net decrease in net assets derived from beneficial interest
Interest transactions (75,010,943) (87,106,114)
Transactions ------------ ------------
(Note 4):
Net Assets: Total decrease in net assets (70,757,467) (79,246,834)
Beginning of year 594,394,631 673,641,465
------------ ------------
End of year $523,637,164 $594,394,631
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
The following per share data and ratios have been derived Class A
from information provided in the financial statements.
For the Year Ended September 30,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 11.04 $ 10.88 $ 12.46 $ 11.77 $ 11.22
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .59 .61 .64 .70 .72
Realized and unrealized gain (loss) on
investments--net .08 .16 (1.25) .80 .55
-------- -------- -------- -------- --------
Total from investment operations .67 .77 (.61) 1.50 1.27
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.59) (.61) (.64) (.70) (.72)
Realized gain on investments--net -- -- (.11) (.11) --
In excess of realized gain
on investments--net -- -- (.22) -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.59) (.61) (.97) (.81) (.72)
-------- -------- -------- -------- --------
Net asset value, end of year $ 11.12 $ 11.04 $ 10.88 $ 12.46 $ 11.77
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 6.19% 7.37% (5.17%) 13.24% 11.77%
Return:* ======== ======== ======== ======== ========
Ratios to Expenses .66% .67% .63% .64% .65%
Average ======== ======== ======== ======== ========
Net Assets Investment income--net 5.31% 5.67% 5.52% 5.80% 6.28%
======== ======== ======== ======== ========
Supplemental Net assets, end of year (in thousands) $ 21,762 $ 23,304 $ 28,301 $ 31,976 $ 18,973
Data: ======== ======== ======== ======== ========
Portfolio turnover 114.78% 181.21% 107.96% 38.31% 35.90%
======== ======== ======== ======== ========
<FN>
*Total investment returns exclude the effects of
sales loads.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<PAGE>
<TABLE>
Financial Highlights (continued)
<CAPTION>
The following per share data and ratios have been derived Class B
from information provided in the financial statements.
For the Year Ended September 30,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 11.04 $ 10.88 $ 12.46 $ 11.77 $ 11.23
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .54 .56 .58 .64 .67
Realized and unrealized gain (loss) on
investments--net .08 .16 (1.25) .80 .54
-------- -------- -------- -------- --------
Total from investment operations .62 .72 (.67) 1.44 1.21
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.54) (.56) (.58) (.64) (.67)
Realized gain on investments--net -- -- (.11) (.11) --
In excess of realized gain on
investments--net -- -- (.22) -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.54) (.56) (.91) (.75) (.67)
-------- -------- -------- -------- --------
Net asset value, end of year $ 11.12 $ 11.04 $ 10.88 $ 12.46 $ 11.77
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 5.66% 6.82% (5.66%) 12.67% 11.12%
Return:* ======== ======== ======== ======== ========
Ratios to Expenses 1.16% 1.18% 1.14% 1.14% 1.16%
Average ======== ======== ======== ======== ========
Net Assets: Investment income--net 4.80% 5.16% 5.02% 5.32% 5.79%
======== ======== ======== ======== ========
Supplemental Net assets, end of year (in thousands). $403,403 $564,963 $645,341 $733,981 $616,590
Data: ======== ======== ======== ======== ========
Portfolio turnover 114.78% 181.21% 107.96% 38.31% 35.90%
======== ======== ======== ======== ========
<FN>
*Total investment returns exclude the effects of
sales loads.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<PAGE>
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class C Class D
For the For the
For the Period For the Period
The following per share data and ratios have been derived Year Oct. 21, Year Oct. 21,
from information provided in the financial statements. Ended 1994++ to Ended 1994++ to
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
Increase (Decrease) in Net Asset Value: 1996 1995 1996 1995
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.04 $ 10.76 $ 11.03 $ 10.76
Operating -------- -------- -------- --------
Performance: Investment income--net .52 .51 .58 .56
Realized and unrealized gain on investments--net .08 .28 .08 .27
-------- -------- -------- --------
Total from investment operations .60 .79 .66 .83
-------- -------- -------- --------
Less dividends from investment income--net (.52) (.51) (.58) (.56)
-------- -------- -------- --------
Net asset value, end of period $ 11.12 $ 11.04 $ 11.11 $ 11.03
======== ======== ======== ========
Total Investment Based on net asset value per share 5.55% 7.57%+++ 6.09% 7.99%+++
Return:** ======== ======== ======== ========
Ratios to Expenses 1.27% 1.27%* .76% .76%*
Average Net ======== ======== ======== ========
Assets: Investment income--net 4.70% 4.91%* 5.21% 5.46%*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 4,175 $ 3,556 $ 94,297 $ 2,572
Data: ======== ======== ======== ========
Portfolio turnover 114.78% 181.21% 114.78% 181.21%
======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects
of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
<PAGE>
1. Significant Accounting Policies:
Merrill Lynch New York Municipal Bond Fund (the "Fund") is part of
the Merrill Lynch Multi-State Municipal Series Trust (the "Trust").
The Fund is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. The Fund offers
four classes of shares under the Merrill Lynch Select Pricing SM
System. Class A and Class D Shares are sold with a front-end sales
charge. Class B and Class C Shares may be subject to a contingent
deferred sales charge. All classes of shares have identical voting,
dividend, liquidation and other rights and the same terms and
conditions, except that Class B, Class C and Class D Shares bear
certain expenses related to the account maintenance of such shares,
and Class B and Class C Shares also bear certain expenses related to
the distribution of such shares. Each class has exclusive voting
rights with respect to matters relating to its account maintenance
and distribution expenditures. The following is a summary of
significant accounting policies followed by the Fund.
(a) Valuation of investments--Municipal bonds and other portfolio
securities are traded primarily in the over-the-counter municipal
bond and money markets and are valued at the last available bid
price or yield equivalents as obtained from one or more dealers that
make markets in the securities. Financial futures contracts and
options thereon, which are traded on exchanges, are valued at their
settlement prices as of the close of such exchanges. Short-term
investments with a remaining maturity 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 Trust, including
valuations furnished by a pricing service retained by the Trust,
which may utilize a matrix system for valuations. The procedures of
the pricing service and its valuations are reviewed by the officers
of the Trust under the general supervision of the 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 interest
rate 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.
<PAGE>
(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) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(f) Dividends and distributions--Dividends from net investment
income are declared daily and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates. Distributions in excess
of realized capital gains are due primarily to differing tax
treatments for post-October losses.
NOTES TO FINANCIAL STATEMENTS (continued)
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("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. The Fund has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned
subsidiary of Merrill Lynch Group, Inc.
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 based upon the average daily
value of the Fund's net assets at the following annual rates: 0.55%
of the Fund's average daily net assets not exceeding $500 million;
0.525% of average daily net assets in excess of $500 million but not
exceeding $1 billion; and 0.50% of average daily net assets in
excess of $1 billion.
Pursuant to the distribution plans (the "Distribution Plans")
adopted by the Fund in accordance with Rule 12b-1 under the
Investment Company Act of 1940, the Fund pays the Distributor an
ongoing account maintenance fee and a distribution fee. These fees
are accrued daily and paid monthly, at the annual rates based upon
the average daily net assets of the shares as follows.
<PAGE>
Account
Maintenance Distribution
Fee Fee
Class B 0.25% 0.25%
Class C 0.25% 0.35%
Class D 0.10% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner, and Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. The ongoing account maintenance fee compensates the
Distributor and MLPF&S for providing account maintenance services to
Class B, Class C and Class D shareholders. The ongoing distribution
fee compensates the Distributor and MLPF&S for providing shareholder
and distribution-related services to Class B and Class C
shareholders.
For the year ended September 30, 1996, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on the sales of the
Fund's Class A and Class D Shares as follow:
MLFD MLPF&S
Class A $ 772 $ 6,739
Class D $2,366 $22,012
For the year ended September 30, 1996, MLPF&S received contingent
deferred sales charges of $676,121 and $2,876 relating to
transactions in Class B and Class C Shares, respectively.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., is the Fund's transfer agent.
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, MLPF&S, PSI, MLFDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended September 30, 1996 were $606,482,594 and
$704,659,914, respectively.
Net realized and unrealized gains (losses) as of September 30, 1996
were as follows:
<PAGE>
Realized
Gains Unrealized
(Losses) Gains
Long-term investments $ 5,726,842 $ 21,056,395
Short-term investments (8,883) --
Financial futures
contracts (1,802,669) --
------------- -------------
Total $ 3,915,290 $ 21,056,395
============= =============
As of September 30, 1996, net unrealized appreciation for Federal
income tax purposes aggregated $20,749,312, of which $22,215,822
related to appreciated securities and $1,466,510 related to
depreciated securities. The aggregate cost of investments at
September 30, 1996 for Federal income tax purposes was $462,304,941.
4. Beneficial Interest Transactions:
Net decrease in net assets derived from beneficial interest
transactions was $75,010,943 and $87,106,114 for the years ended
September 30, 1996 and September 30, 1995, respectively.
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the Year Dollar
Ended September 30, 1996 Shares Amount
Shares sold 128,499 $ 1,441,274
Shares issued to share-
holders in reinvestment
of dividends 67,175 749,799
------------- -------------
Total issued 195,674 2,191,073
Shares redeemed (349,477) (3,907,947)
------------- -------------
Net decrease (153,803) $ (1,716,874)
============= =============
Class A Shares for the Year Dollar
Ended September 30, 1995 Shares Amount
<PAGE>
Shares sold 310,937 $ 3,344,063
Shares issued to share-
holders in reinvestment
of dividends 76,814 829,561
------------- -------------
Total issued 387,751 4,173,624
Shares redeemed (878,791) (9,342,889)
------------- -------------
Net decrease (491,040) $ (5,169,265)
============= =============
Class B Shares for the Year Dollar
Ended September 30, 1996 Shares Amount
Shares sold 3,354,839 $ 37,442,180
Shares issued to share-
holders in reinvestment
of dividends 996,711 11,135,115
------------- -------------
Total issued 4,351,550 48,577,295
Automatic conversion
of shares (9,079,555) (101,502,036)
Shares redeemed (10,168,261) (113,251,056)
------------- -------------
Net decrease (14,896,266) $(166,175,797)
============= =============
Class B Shares for the Year Dollar
Ended September 30, 1995 Shares Amount
Shares sold 3,667,182 $ 39,752,322
Shares issued to share-
holders in reinvestment
of dividends 1,322,739 14,277,855
------------- -------------
Total issued 4,989,921 54,030,177
Automatic conversion
of shares (18,699) (201,021)
Shares redeemed (13,124,398) (141,756,812)
------------- -------------
Net decrease (8,153,176) $ (87,927,656)
============= =============
<PAGE>
Class C Shares for the Year Dollar
Ended September 30, 1996 Shares Amount
Shares sold 273,667 $ 3,058,759
Shares issued to share-
holders in reinvestment
of dividends 12,253 136,646
------------- -------------
Total issued 285,920 3,195,405
Shares redeemed (232,545) (2,583,517)
------------- -------------
Net increase 53,375 $ 611,888
============= =============
Class C Shares for the Period
October 21, 1994++ to Dollar
September 30, 1995 Shares Amount
Shares sold 350,647 $ 3,811,029
Shares issued to share-
holders in reinvestment
of dividends 4,349 47,691
------------- -------------
Total issued 354,996 3,858,720
Shares redeemed (32,935) (360,612)
------------- -------------
Net increase 322,061 $ 3,498,108
============= =============
[FN]
++Commencement of Operations.
Class D Shares for the Year Dollar
Ended September 30, 1996 Shares Amount
Shares sold 225,462 $ 2,508,549
Automatic conversion
of shares 9,085,219 101,502,036
Shares issued to share-
holders in reinvestment
of dividends 105,564 1,172,385
------------- -------------
Total issued 9,416,245 105,182,970
Shares redeemed (1,164,545) (12,913,130)
------------- -------------
Net increase 8,251,700 $ 92,269,840
============= =============
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded)
Class D Shares for the Period
October 21, 1994++ to Dollar
September 30, 1995 Shares Amount
Shares sold 257,719 $ 2,747,387
Automatic conversion
of shares 18,714 201,021
Shares issued to share-
holders in reinvestment
of dividends 2,989 32,646
------------- -------------
Total issued 279,422 2,981,054
Shares redeemed (46,320) (488,355)
------------- -------------
Net increase 233,102 $ 2,492,699
============= =============
[FN]
++Commencement of Operations.
5. Capital Loss Carryforward:
At September 30, 1996, the Fund had a net capital loss carryforward
of approximately $15,959,000, all of which expires in 2003. This
amount will be available to offset like amounts of any future
taxable gains.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
Merrill Lynch New York Municipal Bond Fund of
Merrill Lynch Multi-State Municipal Series Trust:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Merrill Lynch
New York Municipal Bond Fund of Merrill Lynch Municipal Multi-State
Series Trust as of September 30, 1996, the related statements of
operations for the year then ended and changes in net assets for
each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period
then ended. These financial statements and the financial highlights
are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and the
financial highlights based on our audits.
<PAGE>
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at
September 30, 1996 by correspondence with the custodian and broker.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch New York Municipal Bond Fund of Merrill Lynch Multi-
State Municipal Series Trust as of September 30, 1996, the results
of its operations, the changes in its net assets, and the financial
highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
November 6, 1996
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid monthly by
Merrill Lynch New York Municipal Bond Fund of Merrill Lynch Multi-
State Municipal Series Trust during its taxable year ended September
30, 1996 qualify as tax-exempt interest dividends for Federal income
tax purposes.
Additionally, there were no capital gains distributed by the Fund
during the year.
Please retain this information for your records.
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
James H. Bodurtha, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Roberto Roffo, Vice President
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary
<PAGE>
Custodian
State Street Bank &Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
