<PAGE>
MERRILL LYNCH NEW YORK MUNICIPAL BOND FUND
OF MERRILL LYNCH MULTI-STATE MUNICIPAL SERIES TRUST
SUPPLEMENT DATED JULY 24, 1996 TO
PROSPECTUS DATED JANUARY 25, 1996
Effective August 19, 1996, Merrill Lynch New York Municipal Bond Fund
(the "Fund") may invest up to 20% of its total assets in municipal bonds that
are rated below Baa by Moody's Investors Service, Inc. or below BBB by
Standard & Poor's Ratings Group or Fitch Investors Service, Inc. Such
securities, sometimes referred to as "high yield" or "junk" bonds, are
predominantly speculative with respect to the capacity to pay interest and
repay principal in accordance with the terms of the security and generally
involve a greater volatility of price than securities in higher rating
categories. The market prices of high yielding, lower rated securities may
fluctuate more than higher rated securities and may decline significantly in
periods of general economic difficulty, which may follow periods of rising
interest rates. In purchasing such securities, the Fund will rely on the
judgment, analysis and experience of Fund Asset Management, L.P. (the
"Manager") in evaluating the creditworthiness of the issuer of such
securities. The Manager will take into consideration, among other things,
the issuer's financial resources, its sensitivity to economic conditions and
trends, its operating history, the quality of its management and regulatory
matters. See "Investment Objective and Policies" in the Statement of
Additional Information, as supplemented on July 24, 1996, for a more
detailed discussion of the pertinent risk factors involved in investing in
"high yield" or "junk" bonds and Appendix II--"Ratings of Municipal Bonds"--
in the Statement of Additional Information for additional information
regarding ratings of debt securities. The Fund does not intend to purchase
debt securities that are in default or which the Manager believes will be in
default.
