MERRILL LYNCH
PENNSYLVANIA
MUNICIPAL
BOND FUND
FUND LOGO
Semi-Annual Report
January 31, 1997
<PAGE>
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
William M. Petty, Vice President
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
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.
Merrill Lynch Pennsylvania
Municipal Bond Fund
Merrill Lynch Multi-State
Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
<PAGE>
TO OUR SHAREHOLDERS
The Municipal Market Environment
Long-term fixed-income bond yields generally declined over the six
months ended January 31, 1997. Initially, US Treasury bond yields
declined over 45 basis points (0.45%) to 6.45% by late November as
low employment growth and continued low inflation combined to
support lower bond yields. Concurrently, long-term municipal revenue
bond yields, as measured by the Bond Buyer Revenue Bond Index,
declined over 20 basis points to approximately 5.80%. However, signs
of increased economic activity and renewed inflation fears pushed
bond yields up for the remainder of the period. By the end of
January 1997, US Treasury bond yields rose 35 basis points to end
the period at approximately 6.80%. Similarly, long-term municipal
revenue bond yields rose approximately 20 basis points from their
lows in late November to approximately 6.00%. During the six months
ended January 31, 1997, US Treasury bond yields declined
approximately 10 basis points, while tax-exempt bond yields were
essentially unchanged.
Recently, tax-exempt bond yields underperformed their taxable
counterparts despite a continued strong supply position. During the
six-month period ended January 31, 1997, over $88 billion in long-
term tax-exempt bonds was underwritten, essentially unchanged from
issuance a year ago. Approximately $50 billion in new municipal
bonds was issued during the three-month period ended January 31,
1997, representing a decline of over 5% compared to the same period
in 1996. This declining trend in bond issuance was even more
apparent recently. Slightly more than $10 billion in long-term bonds
was issued in January 1997, a decrease of over 15% compared to
January 1996 issuance.
The municipal bond market's recent underperformance relative to
Treasury issues was the result of a number of other factors. The
historic strength of the US equity market has attracted significant
investor interest. Additionally, as tax-exempt bond yields declined
again below 6%, some investors temporarily lost interest in the
municipal bond market. If interest rates continue to decline, as
they did at the end of 1994 and throughout 1995, investors, in
general, will quickly adjust to the new levels. The tax advantages
generated by municipal bonds quickly outweigh low nominal yields and
investor demand increases.
The Presidential and Congressional elections this past November
resurrected some investor concerns regarding continued Federal
deficit reduction and potential legislative restrictions upon the
municipal bond market. This situation was similar to that at the
beginning of 1996 when tax-exempt bond yields were negatively
impacted by fears that legislation reducing the tax advantage of
municipal bonds would be introduced to aid further deficit
reductions.
<PAGE>
However, the US Treasury bond market's recent relatively strong
performance resulted in municipal bonds becoming a particularly
attractive investment alternative. At current levels, long-term tax-
exempt revenue bonds yield over 88% of comparable US Treasury bond
yields. Current levels make tax-advantaged products more attractive
than they were at mid-year when yield ratios declined to
approximately 85%. For example, to an investor in the 36% Federal
income tax bracket, a current tax-exempt bond yield of 6% represents
a taxable equivalent yield of approximately 9.37%.
Looking forward, the supply of new bond issuance for 1997 is
expected to be very similar to that of 1996, with most annual
estimates falling in the $170 billion--$175 billion range. Investor
demand is also expected to regain its former strength, with 1997
total municipal redemptions (refundings, maturities and coupon
payments) in the $175 billion--$185 billion range. This overall
balance suggests that the positive technical backdrop the municipal
bond market enjoyed in 1996 could continue in 1997. However, it is
likely that seasonal factors may temporarily distort this overall
balanced technical scenario. During periods of reduced bond
issuance, the ease and ability to purchase tax-advantaged products
at their current attractive levels may be greatly restricted.
Portfolio Strategy
During the six-month period ended January 31, 1997, Merrill Lynch
Pennsylvania Municipal Bond Fund primarily maintained a cautious
stance toward the credit markets. Our strategy was based on the
belief that at current interest rate levels municipal bonds would
underperform taxable bonds if interest rates dropped, and outperform
if interest rates rose. With this scenario as a backdrop, we sought
securities which would provide an extra measure of income without
adding interest rate sensitivity to the portfolio. We also remained
fully invested during this period to further supplement tax-exempt
income to shareholders.
Long-term Pennsylvania bond issuance since July 31, 1996 was low
relative to overall national issuance. For the six months ended
January 31, 1997, Pennsylvania new issues totaled $3.7 billion,
representing a decline of over 10% compared to the same period a
year earlier. This drop in supply reinforced our desire to maintain
a fully invested posture as attractive Pennsylvania offerings were
scarce. Low supply caused Pennsylvania paper to trade expensively
compared to the national market, but this may change as new issuance
may increase during 1997.
Looking forward, we will continue to emphasize current income until
the economy shows clear signs of decelerating. We still believe that
monetary policy may need to be tightened to contain wage inflation
and economic growth during the first half of 1997. If this occurs,
it could set the stage for a significant decline in long-term
interest rates, and the Fund would accordingly adopt a more
aggressive approach to the markets.
<PAGE>
In Conclusion
We appreciate your ongoing interest in Merrill Lynch Pennsylvania
Municipal Bond Fund, and we look forward to serving your investment
needs in the months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(William M. Petty)
William M. Petty
Vice President and Portfolio Manager
March 5, 1997
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.
<PAGE>
* 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).
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.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/96 +3.03% -1.09%
Five Years Ended 12/31/96 +7.23 +6.35
Inception (8/31/90)
through 12/31/96 +8.17 +7.47
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
<PAGE>
Class B Shares*
Year Ended 12/31/96 +2.60% -1.30%
Five Years Ended 12/31/96 +6.68 +6.68
Inception (8/31/90)
through 12/31/96 +7.62 +7.62
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/96 +2.41% +1.43%
Inception (10/21/94)
through 12/31/96 +7.75 +7.75
[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 12/31/96 +2.93% -1.19%
Inception (10/21/94)
through 12/31/96 +8.35 +6.35
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
PERFORMANCE DATA (continued)
<PAGE>
<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>
8/31/90-12/31/90 $10.00 $10.05 -- $0.237 + 2.90%
1991 10.05 10.61 -- 0.678 +12.75
1992 10.61 10.90 $0.005 0.660 + 9.31
1993 10.90 11.65 0.040 0.638 +13.39
1994 11.65 10.43 -- 0.606 - 5.35
1995 10.43 11.57 -- 0.617 +17.26
1996 11.57 11.27 0.021 0.611 + 3.03
1/1/97-1/31/97 11.27 11.22 -- 0.043 + 0.02
------ ------
Total $0.066 Total $4.090
Cumulative total return as of 1/31/97: +64.49%**
<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>
<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>
8/31/90-12/31/90 $10.00 $10.05 -- $0.219 + 2.73%
1991 10.05 10.61 -- 0.626 +12.18
1992 10.61 10.90 $0.005 0.605 + 8.76
1993 10.90 11.65 0.040 0.580 +12.82
1994 11.65 10.43 -- 0.551 - 5.82
1995 10.43 11.56 -- 0.561 +16.57
1996 11.56 11.27 0.021 0.554 + 2.60
1/1/97-1/31/97 11.27 11.22 -- 0.039 - 0.02
------ ------
Total $0.066 Total $3.735
Cumulative total return as of 1/31/97: +59.23%**
<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>
<PAGE>
<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 $10.68 $10.43 -- $0.109 - 1.31%
1995 10.43 11.57 -- 0.550 +16.55
1996 11.57 11.27 $0.021 0.543 + 2.41
1/1/97-1/31/97 11.27 11.22 -- 0.038 - 0.03
------ ------
Total $0.021 Total $1.240
Cumulative total return as of 1/31/97: +17.76%**
<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>
PERFORMANCE DATA (concluded)
<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 $10.68 $10.44 -- $0.120 - 1.11%
1995 10.44 11.58 -- 0.607 +17.13
1996 11.58 11.28 $0.021 0.601 + 2.93
1/1/97-1/31/97 11.28 11.23 -- 0.042 + 0.02
------ ------
Total $0.021 Total $1.370
Cumulative total return as of 1/31/97: +19.26%**
<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>
<PAGE>
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
1/31/97 10/31/96 1/31/96 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $11.22 $11.26 $11.57 -2.84%(1) -0.17%(1)
Class B Shares* 11.22 11.26 11.57 -2.84(1) -0.17(1)
Class C Shares* 11.22 11.26 11.58 -2.93(1) -0.17(1)
Class D Shares* 11.23 11.27 11.58 -2.84(1) -0.17(1)
Class A Shares--Total Return* +2.61(2) +1.27(3)
Class B Shares--Total Return* +2.09(4) +1.14(5)
Class C Shares--Total Return* +1.90(6) +1.11(7)
Class D Shares--Total Return* +2.51(8) +1.25(9)
Class A Shares--Standardized 30-day Yield 4.63%
Class B Shares--Standardized 30-day Yield 4.31%
Class C Shares--Standardized 30-day Yield 4.21%
Class D Shares--Standardized 30-day Yield 4.53%
<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 $0.021 per share capital
gains distributions.
(2)Percent change includes reinvestment of $0.619 per share ordinary
income dividends and $0.021 per share capital gains distributions.
(3)Percent change includes reinvestment of $0.168 per share ordinary
income dividends and $0.021 per share capital gains distributions.
(4)Percent change includes reinvestment of $0.561 per share ordinary
income dividends and $0.021 per share capital gains distributions.
(5)Percent change includes reinvestment of $0.153 per share ordinary
income dividends and $0.021 per share capital gains distributions.
(6)Percent change includes reinvestment of $0.549 per share ordinary
income dividends and $0.021 per share capital gains distributions.
(7)Percent change includes reinvestment of $0.150 per share ordinary
income dividends and $0.021 per share capital gains distributions.
(8)Percent change includes reinvestment of $0.608 per share ordinary
income dividends and $0.021 per share capital gains distributions.
(9)Percent change includes reinvestment of $0.165 per share ordinary
income dividends and $0.021 per share capital gains distributions.
</TABLE>
PORTFOLIO ABBREVIATIONS
<PAGE>
To simplify the listings of Merrill Lynch Pennsylvania
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 below and at the right.
AMT Alternative Minimum Tax (subject to)
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
MVRICS Municipal Variable Rate Inverse Class Securities
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single-Family
UPDATES Unit Priced Demand Adjustable Tax-Exempt Securities
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Pennsylvania--97.4%
<S> <S> <C> <S> <C>
AAA Aaa $ 2,000 Allegheny County, Pennsylvania, Higher Education Building Authority
Revenue Bonds (Duquesne University Project), 5% due 3/01/2016 (b) $ 1,852
NR* A 2,000 Allegheny County, Pennsylvania, Hospital Development Authority Revenue
Bonds (South Hills Health System), Series A, 6.50% due 5/01/2014 2,061
Allegheny County, Pennsylvania, IDA, Revenue Refunding Bonds:
AAA Aaa 4,785 (Commercial Development MPB Association Project), Mercy Hospital of
Pittsburgh, 7.70% due 12/01/2013 (e) 5,935
BBB- Baa3 2,000 (Environmental Improvement--USX Corporation Project), 6.10% due 7/15/2020 2,005
AAA Aaa 475 Allegheny County, Pennsylvania, Institutional District Bonds, UT, Series 18,
7.30% due 4/01/2009 (c) 511
AAA Aaa 750 Allegheny County, Pennsylvania, Sanitation Authority, Sewer Revenue Bonds,
Series C, 6.50% due 12/01/2001 (d)(f) 816
AAA Aaa 1,430 Berks County, Pennsylvania, GO, UT, Second Series, 5.65%** due 5/15/2020 (d) 377
AAA Aaa 2,000 Bristol Township, Pennsylvania, School District, GO, Series A, 6.625% due
2/15/2002 (c)(f) 2,217
<PAGE>
AAA Aaa 3,550 Cambria County, Pennsylvania, Refunding, GO, UT, Series A, 6.625% due
8/15/2014 (d) 3,913
BBB+ NR* 2,545 Cumberland County, Pennsylvania, Municipal Authority Revenue Bonds
(Presbyterian Homes Inc. Project), 6% due 12/01/2026 2,456
AAA NR* 1,200 Delaware County, Pennsylvania, College Authority Revenue Bonds (Neumann
College), 5.625% due 10/01/2025 (g) 1,148
A- NR* 2,350 Delaware County, Pennsylvania, Hospital Authority Revenue Bonds (Riddle
Memorial Hospital), 6.50% due 1/01/2022 2,394
A3 P1 1,600 Delaware County, Pennsylvania, IDA, PCR (BP Oil Inc. Project), UPDATES,
3.65% due 12/01/2009 (a) 1,600
Emmaus, Pennsylvania, General Authority Revenue Bonds, VRDN (a):
SP1+ NR* 100 Series B, 3.60% due 3/01/2024 100
A1 NR* 100 Sub-Series B-10, 3.65% due 3/01/2024 100
A1 NR* 200 Sub-Series B-12, 3.65% due 3/01/2024 200
Erie County, Pennsylvania, IDA, PCR, Refunding (International Paper Co.):
A- A3 1,000 7.15% due 9/01/2013 1,066
A- A3 425 Series A, 7.60% due 9/01/2010 457
NR* NR* 920 Erie--Western Pennsylvania, Port Authority, General Revenue Bonds, 6.875%
due 6/15/2016 938
AAA Aaa 1,155 Exeter Township, Pennsylvania, School District, GO, UT, 6.65% due
5/15/2002 (d)(f) 1,268
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Pennsylvania (continued)
<S> <S> <C> <S> <C>
A1+ NR* $ 6,100 Geisinger, Pennsylvania, Health Systems Revenue Bonds, VRDN, Series B,
3.65% due 7/01/2022 (a) $ 6,100
A- NR* 4,990 Gettysburg, Pennsylvania, Municipal Authority, College Revenue Refunding
Bonds (Gettysburg College Project), 6.60% due 2/15/2012 5,233
AAA Aaa 2,960 Hollidaysburg, Pennsylvania, Area School District, Improvement Bonds, UT,
6.50% due 6/01/2020 (b) 3,196
<PAGE>
NR* Baa1 1,500 Latrobe, Pennsylvania, IDA, College Revenue Bonds (Saint Vincent College
Project), 6.75% due 5/01/2024 1,555
Luzerne County, Pennsylvania, IDA, Exempt Facilities Revenue Refunding Bonds
(Pennsylvania Gas and Water Company Project), AMT, Series A:
BBB A3 3,600 7.20% due 10/01/2017 3,847
AAA Aaa 2,000 7% due 12/01/2017 (b) 2,250
AAA Aaa 4,000 McKeesport, Pennsylvania, Area School District Revenue Bonds, UT, Series A,
6% due 10/01/2025 (e) 4,091
Montgomery County, Pennsylvania, Higher Education and Health Authority,
Hospital Revenue Bonds:
AAA Aaa 2,500 (Abington Hospital), MVRICS, Series A, 9.495% due 6/01/2011 (b)(h) 2,881
NR* NR* 225 (Jeanes Health System Project), 8.625% due 7/01/2000 (f) 258
BBB NR* 2,835 (Northwestern Corporation), 7% due 6/01/2012 2,924
BBB+ Baa2 2,665 Montgomery County, Pennsylvania, IDA, PCR, Refunding (Philadelphia Electric
Company), AMT, Series A, 7.60% due 4/01/2021 2,858
NR* NR* 475 Moon Transportation Authority, Pennsylvania, Highway Improvement Revenue Bonds,
9.50% due 2/01/1998 (f) 501
AAA Aaa 3,300 North Penn, Pennsylvania, Water Authority Revenue Bonds, 7% due
11/01/2004 (d)(f) 3,799
AAA Aaa 4,000 North Wales, Pennsylvania, Water Authority Revenue Bonds, 7% due
11/01/2004 (d)(f) 4,577
AAA NR* 2,095 Northampton County, Pennsylvania, Higher Education Authority Revenue Bonds
(Moravian College), 8.20% due 6/01/2001 (f) 2,433
Pennsylvania Convention Center Authority, Revenue Refunding Bonds, Series A:
BBB- Baa 1,555 6.70% due 9/01/2014 1,666
BBB- Baa 2,500 6.75% due 9/01/2019 2,680
BBB- Baa2 1,500 Pennsylvania Economic Development Financing Authority, Exempt Facilities
Revenue Bonds (MacMillan Limited Partnership Project), AMT, 7.60% due
12/01/2020 1,671
BBB Baa1 4,000 Pennsylvania Economic Development Financing Authority, Wastewater Treatment
Revenue Bonds (Sun Company Inc.--R & M Project), AMT, Series A, 7.60% due
12/01/2024 4,454
AA Aa 1,000 Pennsylvania, HFA, Refunding, RIB, AMT, Series 1991-31C, 10.116% due
10/01/2023 (h) 1,094
Pennsylvania, HFA, S/F Mortgage Revenue Bonds, AMT:
AA+ Aa 975 Series 28, 7.65% due 10/01/2023 1,023
AA+ Aa 2,165 Series 40, 6.90% due 4/01/2025 2,268
AA+ Aa 1,500 Series 41-B, 6.65% due 4/01/2025 1,555
<PAGE>
AAA Aaa 1,000 Pennsylvania Intergovernmental Cooperative Authority, Special Tax Revenue
Refunding Bonds, Series A, 5% due 6/15/2013 (c) 943
A NR* 2,000 Pennsylvania State Finance Authority, Revenue Refunding Bonds (Municipal
Capital Improvements Program), 6.60% due 11/01/2009 2,125
AA- A1 2,285 Pennsylvania State, GO, UT, Second Series A, 6.60% due 11/01/2011 2,455
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Pennsylvania (concluded)
<S> <S> <C> <S> <C>
Pennsylvania State Higher Educational Facilities Authority, College and
University Revenue Bonds:
NR* Baa3 $ 2,295 (Delaware Valley College of Science & Agriculture), 7% due 4/01/2022 $ 2,376
NR* NR* 1,030 (Pennsylvania College of Podiatric Medicine), 8.50% due 10/01/2014 1,102
A1+ NR* 2,200 Refunding (Carnegie Mellon University), VRDN, Series C, 3.65% due
11/01/2029 (a) 2,200
A+ Aa3 2,000 Pennsylvania State Higher Educational Facilities Authority, Revenue
Refunding Bonds (Thomas Jefferson University), Series A, 6.625% due 8/15/2009 2,168
A- NR* 1,225 Pennsylvania State, IDA, Economic Development Revenue Bonds, Series A, 7%
due 7/01/2001 (f) 1,362
Philadelphia, Pennsylvania, Authority for Industrial Development, Industrial
and Commercial Revenue Bonds (Girard Estate Coal Mining Project):
AA Aa3 2,945 5.375% due 11/15/2012 2,879
AA Aa3 1,690 5.50% due 11/15/2016 1,627
AAA Aaa 3,000 Philadelphia, Pennsylvania, Authority for Industrial Development, Lease
Revenue Bonds, Series A, 5.375% due 2/15/2027 (c) 2,840
A+ NR* 1,895 Philadelphia, Pennsylvania, Authority for IDR (National Board of Medical
Examiners Project), 6.75% due 5/01/2012 2,050
Philadelphia, Pennsylvania, Gas Works Revenue Bonds:
AAA Aaa 1,440 12th Series B, 7% due 5/15/2020 (c)(i) 1,676
AAA Aaa 750 13th Series, 7.70% due 6/15/2001 (f) 857
Philadelphia, Pennsylvania, Hospitals and Higher Education Facilities
Authority Revenue Bonds:
A- NR* 1,015 (Children's Seashore House), Series A, 7% due 8/15/2017 1,075
A- NR* 3,000 (Children's Seashore House), Series B, 7% due 8/15/2022 3,176
BBB NR* 3,100 (Northwestern Corp.), 7.125% due 6/01/2018 3,229
A- Baa1 3,750 Refunding (Chestnut Hill Hospital), 6.50% due 11/15/2022 3,811
AAA Aaa 1,000 Refunding (Magee Rehabilitation Hospital), 7% due 12/01/2010 (b) 1,110
AAA NR* 3,000 Refunding (Presbyterian Medical Center), 6.65% due 12/01/2019 (i) 3,382
<PAGE>
AAA Baa 1,000 Philadelphia, Pennsylvania, Water and Sewer Revenue Bonds, 16th Series,
7.50% due 8/01/2001 (f) 1,138
AAA Aaa 1,000 Reading, Pennsylvania, GO, Refunding, UT, 6.50% due 11/15/2002 (b)(f) 1,099
A- NR* 1,750 Scranton-Lackawanna, Pennsylvania, Health and Welfare Authority, Revenue
Refunding Bonds (University of Scranton Project), Series A, 6.50% due
3/01/2013 1,835
AAA Aaa 1,600 West View, Pennsylvania, Municipal Authority, Water Revenue Bonds, 5.15%
due 11/15/2017 (d) 1,505
Puerto Rico--0.6%
AAA NR* 740 Puerto Rico Commonwealth, Public Improvement, GO, 7.70% due 7/01/2000 (f) 834
Total Investments (Cost--$135,091)--98.0% 143,182
Other Assets Less Liabilities--2.0% 2,888
--------
Net Assets--100.0% $146,070
========
<FN>
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at January 31, 1997.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FGIC Insured.
(e)FSA Insured.
(f)Prerefunded.
(g)Connie Lee 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 January 31, 1997.
(i)Escrowed to maturity.
*Not Rated.
**Represents a zero coupon bond; the interest rate shown is the
effective yield at the time of purchase by the Fund.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of January 31, 1997
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$135,091,105) (Note 1a) $143,181,876
Cash 634,125
Receivables:
Interest $ 2,321,942
Beneficial interest sold 360,786 2,682,728
------------
Prepaid registration fees and other assets (Note 1e) 16,287
------------
Total assets 146,515,016
------------
Liabilities: Payables:
Beneficial interest redeemed 126,025
Dividends to shareholders (Note 1f) 116,352
Investment adviser (Note 2) 70,386
Distributor (Note 2) 53,465 366,228
------------
Accrued expenses and other liabilities 79,124
------------
Total liabilities 445,352
------------
Net Assets: Net assets $146,069,664
============
Net Assets Class A Shares of beneficial interest, $.10 par value, unlimited
Consist of: number of shares authorized $ 195,395
Class B Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 1,020,796
Class C Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 47,825
Class D Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 37,549
Paid-in capital in excess of par 138,588,561
Accumulated realized capital losses on investments--net (1,911,233)
Unrealized appreciation on investments--net 8,090,771
------------
Net assets $146,069,664
============
Net Asset Value: Class A--Based on net assets of $21,928,335 and 1,953,951 shares
of beneficial interest outstanding $ 11.22
============
Class B--Based on net assets of $114,555,793 and 10,207,960 shares
of beneficial interest outstanding $ 11.22
============
Class C--Based on net assets of $5,367,633 and 478,247 shares
of beneficial interest outstanding $ 11.22
============
Class D--Based on net assets of $4,217,903 and 375,485 shares
of beneficial interest outstanding $ 11.23
============
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
For the Six Months Ended January 31, 1997
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 4,611,149
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 416,217
Account maintenance and distribution fees--Class B (Note 2) 300,340
Accounting services (Note 2) 47,901
Transfer agent fees--Class B (Note 2) 31,906
Professional fees 29,938
Printing and shareholder reports 21,836
Account maintenance and distribution fees--Class C (Note 2) 15,532
Registration fees (Note 1e) 7,865
Pricing fees 5,299
Custodian fees 4,833
Transfer agent fees--Class A (Note 2) 4,762
Trustees' fees and expenses 3,939
Account maintenance fees--Class D (Note 2) 2,058
Transfer agent fees--Class C (Note 2) 1,392
Transfer agent fees--Class D (Note 2) 894
Other 1,406
------------
Total expenses 896,118
------------
Investment income--net 3,715,031
------------
Realized & Realized gain on investments--net 465,896
Unrealized Change in unrealized appreciation on investments--net 582,624
Gain on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 4,763,551
(Notes 1b, 1d & 3): ============
</TABLE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: Jan. 31, 1997 July 31, 1996
<S> <S> <C> <C>
Operations: Investment income--net $ 3,715,031 $ 7,689,849
Realized gain on investments--net 465,896 415,112
Change in unrealized appreciation on investments--net 582,624 999,490
------------ ------------
Net increase in net assets resulting from operations 4,763,551 9,104,451
------------ ------------
<PAGE>
Dividends & Investment income--net:
Distributions to Class A (585,014) (1,225,179)
Shareholders Class B (2,899,859) (6,116,920)
(Note 1f): Class C (122,380) (172,681)
Class D (107,778) (175,069)
Realized gain on investments--net:
Class A (52,975) --
Class B (290,647) --
Class C (13,183) --
Class D (10,473) --
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (4,082,309) (7,689,849)
------------ ------------
Beneficial Net decrease in net assets derived from beneficial
Interest interest transactions (5,107,580) (1,716,500)
Transactions ------------ ------------
(Note 4):
Net Assets: Total decrease in net assets (4,426,338) (301,898)
Beginning of period 150,496,002 150,797,900
------------ ------------
End of period $146,069,664 $150,496,002
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A
<PAGE>
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.17 $ 11.07 $ 11.00 $ 11.39 $ 11.04
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .31 .61 .62 .60 .63
Realized and unrealized gain (loss) on
investments--net .08 .10 .07 (.33) .36
-------- -------- -------- -------- --------
Total from investment operations .39 .71 .69 .27 .99
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.31) (.61) (.62) (.60) (.63)
Realized gain on investments--net (.03) -- -- (.04) (.01)
In excess of realized gain on
investments--net -- -- -- (.02) --
-------- -------- -------- -------- --------
Total dividends and distributions (.34) (.61) (.62) (.66) (.64)
-------- -------- -------- -------- --------
Net asset value, end of period $ 11.22 $ 11.17 $ 11.07 $ 11.00 $ 11.39
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 3.47%+++ 6.53% 6.54% 2.37% 9.30%
Return:** ======== ======== ======== ======== ========
Ratios to Expenses, net of reimbursement .76%* .76% .77% .75% .69%
Average ======== ======== ======== ======== ========
Net Assets: Expenses .76%* .76% .77% .75% .81%
======== ======== ======== ======== ========
Investment income--net 5.34%* 5.41% 5.72% 5.30% 5.70%
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 21,928 $ 21,626 $ 23,040 $ 28,239 $ 27,639
Data: ======== ======== ======== ======== ========
Portfolio turnover 22.93% 58.33% 59.17% 37.73% 9.69%
======== ======== ======== ======== ========
<PAGE>
<CAPTION>
Class B
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.17 $ 11.07 $ 11.00 $ 11.39 $ 11.04
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .28 .55 .56 .54 .58
Realized and unrealized gain (loss) on
investments--net .08 .10 .07 (.33) .36
-------- -------- -------- -------- --------
Total from investment operations .36 .65 .63 .21 .94
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.28) (.55) (.56) (.54) (.58)
Realized gain on investments--net (.03) -- -- (.04) (.01)
In excess of realized gain on
investments--net -- -- -- (.02) --
-------- -------- -------- -------- --------
Total dividends and distributions (.31) (.55) (.56) (.60) (.59)
-------- -------- -------- -------- --------
Net asset value, end of period $ 11.22 $ 11.17 $ 11.07 $ 11.00 $ 11.39
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 3.20%+++ 5.98% 6.00% 1.86% 8.75%
Return:** ======== ======== ======== ======== ========
Ratios to Expenses, net of reimbursement 1.27%* 1.27% 1.28% 1.25% 1.19%
Average ======== ======== ======== ======== ========
Net Assets: Expenses 1.27%* 1.27% 1.28% 1.25% 1.32%
======== ======== ======== ======== ========
Investment income--net 4.83%* 4.91% 5.21% 4.80% 5.19%
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands). $114,556 $120,565 $123,260 $130,418 $109,463
Data: ======== ======== ======== ======== ========
Portfolio turnover 22.93% 58.33% 59.17% 37.73% 9.69%
======== ======== ======== ======== ========
<FN>
+++Aggregate total investment return.
*Annualized.
**Total investment returns exclude the effect of sales loads.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class C Class D
For the For the For the For the
Six For the Period Six For the Period
The following per share data and ratios have been derived Months Year Oct. 21, Months Year Oct. 21,
from information provided in the financial statements. Ended Ended 1994++ to Ended Ended 1994++ to
Jan. 31, July 31, July 31, Jan. 31, July 31, July 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of period $ 11.17 $ 11.07 $ 10.68 $ 11.18 $ 11.08 $ 10.68
Performance: -------- -------- -------- -------- -------- --------
Investment income--net .27 .54 .43 .30 .60 .47
Realized and unrealized gain on
investments--net .08 .10 .39 .08 .10 .40
-------- -------- -------- -------- -------- --------
Total from investment operations .35 .64 .82 .38 .70 .87
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.27) (.54) (.43) (.30) (.60) (.47)
Realized gain on investments--net (.03) -- -- (.03) -- --
-------- -------- -------- -------- -------- --------
Total dividends and distributions (.30) (.54) (.43) (.33) (.60) (.47)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 11.22 $ 11.17 $ 11.07 $ 11.23 $ 11.18 $ 11.08
======== ======== ======== ======== ======== ========
Total Investment Based on net asset value per share 3.15%+++ 5.87% 7.83%+++ 3.42%+++ 6.42% 8.36%+++
Return:** ======== ======== ======== ======== ======== ========
Ratios to Average Expenses 1.37%* 1.37% 1.38%* .86%* .86% .87%*
Net Assets: ======== ======== ======== ======== ======== ========
Investment income--net 4.73%* 4.80% 5.05%* 5.24%* 5.31% 5.65%*
======== ======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 5,368 $ 4,722 $ 1,868 $ 4,218 $ 3,583 $ 2,630
======== ======== ======== ======== ======== ========
Portfolio turnover 22.93% 58.33% 59.17% 22.93% 58.33% 59.17%
======== ======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Pennsylvania Municipal Bond Fund (the "Fund") is part
of Merrill Lynch Multi-State Municipal Series Trust (the "Trust").
The Fund is registered under the Investment Company Act of 1940 as a
non-diversified, open-end management investment company. 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. The Fund offers four classes of shares
under the Merrill Lynch Select Pricing SM System. Shares of Class A
and Class D are sold with a front-end sales charge. Shares of Class
B and Class C 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 in which the Fund invests are traded primarily in the
over-the-counter municipal bond and money markets and are valued at
the last available bid price in the over-the-counter market or on
the basis of 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 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 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.
<PAGE>
* 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.
(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.
NOTES TO FINANCIAL STATEMENTS (concluded)
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.
<PAGE>
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
ongoing account maintenance and distribution fees. The fees are
accrued daily and paid monthly at annual rates based upon the
average daily net assets of the shares as follows:
Account Distribution
Maintenance 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 & 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 six months ended January 31, 1997, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the
Fund's Class A Shares as follows:
MLFD MLPF&S
Class A $367 $3,712
For the six months ended January 31, 1997, MLPF&S received
contingent deferred sales charges of $79,998 and $1,465 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.
<PAGE>
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, MLFDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended January 31, 1997 were $32,459,511 and
$39,835,484, respectively.
Net realized and unrealized gains (losses) as of January 31, 1997
were as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments. $ 912,521 $ 8,090,771
Financial futures contracts (446,625) --
----------- -----------
Total $ 465,896 $ 8,090,771
=========== ===========
As of January 31, 1997, net unrealized appreciation for Federal
income tax purposes aggregated $8,090,771, of which $8,213,002
related to appreciated securities and $122,231 related to
depreciated securities. The aggregate cost of investments at January
31, 1997 for Federal income tax purposes was $135,091,105.
4. Beneficial Interest Transactions:
Net decrease in net assets derived from beneficial interest
transactions was $5,107,580 and $1,716,500 for the six months ended
January 31, 1997 and for the year ended July 31, 1996, respectively.
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the Six Months Dollar
Ended January 31, 1997 Shares Amount
Shares sold 136,466 $ 1,531,708
Shares issued to share-
holders in reinvestment of
dividends and distributions 31,829 357,240
----------- -----------
Total issued 168,295 1,888,948
Shares redeemed (149,943) (1,683,829)
----------- -----------
Net increase 18,352 $ 205,119
=========== ===========
<PAGE>
Class A Shares for the Year Dollar
Ended July 31, 1996 Shares Amount
Shares sold 109,752 $ 1,229,333
Shares issued to share-
holders in reinvestment of
dividends 58,364 656,749
----------- -----------
Total issued 168,116 1,886,082
Shares redeemed (314,476) (3,540,925)
----------- -----------
Net decrease (146,360) $(1,654,843)
=========== ===========
Class B Shares for the Six Months Dollar
Ended January 31, 1997 Shares Amount
Shares sold 540,872 $ 6,074,391
Shares issued to share-
holders in reinvestment of
dividends and distributions 143,247 1,607,748
----------- -----------
Total issued 684,119 7,682,139
Automatic conversion of
shares (27,572) (309,942)
Shares redeemed (1,240,052) (13,930,405)
----------- -----------
Net decrease (583,505) $(6,558,208)
=========== ===========
Class B Shares for the Year Dollar
Ended July 31, 1996 Shares Amount
Shares sold 1,605,962 $18,118,584
Shares issued to share-
holders in reinvestment of
dividends 267,930 3,014,759
----------- -----------
Total issued 1,873,892 21,133,343
Automatic conversion of
shares (44,290) (494,541)
Shares redeemed (2,176,649) (24,491,107)
----------- -----------
Net decrease (347,047) $(3,852,305)
=========== ===========
<PAGE>
Class C Shares for the
Six Months Ended Dollar
January 31, 1997 Shares Amount
Shares sold 87,055 $ 976,116
Shares issued to share-
holders in reinvestment of
dividends and distributions 7,669 86,092
----------- -----------
Total issued 94,724 1,062,208
Shares redeemed (39,070) (437,819)
----------- -----------
Net increase 55,654 $ 624,389
=========== ===========
Class C Shares for the Year Dollar
Ended July 31, 1996 Shares Amount
Shares sold 310,698 $ 3,488,268
Shares issued to share-
holders in reinvestment of
dividends 10,054 113,133
----------- -----------
Total issued 320,752 3,601,401
Shares redeemed (66,907) (753,080)
----------- -----------
Net increase 253,845 $ 2,848,321
=========== ===========
Class D Shares for the
Six Months Ended Dollar
January 31, 1997 Shares Amount
Shares sold 54,472 $ 613,439
Automatic conversion
of shares 27,537 309,942
Shares issued to share-
holders in reinvestment of
dividends and distributions 6,300 70,809
----------- -----------
Total issued 88,309 994,190
Shares redeemed (33,242) (373,070)
----------- -----------
Net increase 55,067 $ 621,120
=========== ===========
<PAGE>
Class D Shares for the Year Dollar
Ended July 31, 1996 Shares Amount
Shares sold 174,458 $ 1,955,538
Automatic conversion
of shares 44,251 494,541
Shares issued to share-
holders in reinvestment of
dividends 10,521 118,715
----------- -----------
Total issued 229,230 2,568,794
Shares redeemed (146,212) (1,626,467)
----------- -----------
Net increase 83,018 $ 942,327
=========== ===========
