Filed Pursuant to Rule 497(e)
File No. 33-8708
MERRILL LYNCH INSTITUTIONAL INTERMEDIATE FUND
Supplement dated September 12, 1996 to the
Prospectus dated February 26, 1996
CAPITALIZED TERMS USED HEREIN BUT NOT DEFINED HEREIN SHALL
HAVE THE MEANING ASCRIBED TO THEM IN THE FUND'S PROSPECTUS.
The Board of Trustees of Merrill Lynch Institutional
Intermediate Fund (the "Fund") has approved the following proposals
for submission to shareholders of the Fund at a meeting of
shareholders of the Fund scheduled to be held on October 25, 1996:
(i) a proposal to amend the investment objective of the Fund and to
change the name of the Fund, (ii) a proposal to amend the
fundamental investment restrictions of the Fund, and (iii) a
proposal to approve certain amendments to the Fund's Declaration of
Trust that would permit the Fund to issue multiple classes of
shares. With respect to proposal (i) above, it is proposed that
the Fund's investment objective be changed to "seeking the highest
possible current income consistent with the protection of capital
afforded by investing in intermediate term debt securities issued
or guaranteed by the U.S. Government, its agencies or
instrumentalities with a maximum maturity not to exceed fifteen
years." If this proposal is adopted, the investments of the Fund
will no longer be considered Permitted Investments for federal
savings and loan associations and federal credit unions. If
proposal (iii) above is adopted, the Fund will issue four classes
of shares, Class A, Class B, Class C and Class D. The Fund's
existing shares would be reclassified as Class D shares. Holders
of reclassified shares would be permitted to purchase additional
Class D shares without a sales charge and would be subject to an
ongoing 0.10% annual account maintenance fee as compared to the
0.15% annual distribution fee to which the Fund's existing shares
are subject.
It is anticipated that all the proposals, if approved by the
stockholders of the affected Funds, will be implemented on or about
November 1, 1996.
