MERRILL
LYNCH
OHIO
MUNICIPAL
BOND FUND
Semi-Annual Report January 31, 1994
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.
Merrill Lynch Ohio
Municipal Bond Fund
Merrill Lynch Multi-State
Municipal Series Trust
Box 9011
Princeton, New Jersey
08543-9011
TO OUR SHAREHOLDERS
As 1993 drew to a close, the US economy showed signs of strong
improvement. The initial estimate for gross domestic product
(GDP) growth in the final quarter of 1993 was +5.9% in real
terms, the strongest quarterly performance since the fourth
quarter of 1987. GDP growth was led by interest rate-sensitive
sectors, such as housing, durable goods orders and business
investment in capital equipment. Consumer confidence also
improved after remaining lackluster throughout most of 1993.
While the exceptionally robust rate of growth may not be
sustainable in the first quarter of 1994 (especially considering
the harsh winter weather experienced by virtually half of the
country in January), this strong showing suggests that the US
economy may at last be gaining momentum. This was supported by
the December increase in the Index of Leading Economic
Indicators, the fifth monthly rise in this indicator of future
economic activity.
<PAGE>
At the same time, the rate of inflation remains in check.
Nevertheless, concerns arose late in 1993 that the rate of
business activity might increase inflationary pressures, which
were reflected in an upturn of longer-term interest rates. In
January, Federal Reserve Board Chairman Alan Greenspan indicated
in Congressional testimony that continued strong expansion of
economic activity would lead the central bank to tighten
monetary policy in an effort to contain inflation. On February 4,
1994, the central bank broke with tradition and publicly
announced an increase in short-term interest rates. In the weeks
ahead, investors will continue to gauge the pace of the economic
expansion and watch for signs of an overheating economy that
could prompt successive Federal Reserve Board actions to raise
short-term interest rates.
The Municipal Market
Yields on tax-exempt securities generally declined over the three
months ended January 31, 1994. Long-term revenue bond yields, as
measured by the Bond Buyer Revenue Bond Index, declined an
additional six basis points (0.06%) to end the quarter at 5.50%.
US Treasury bond yields, however, rose approximately 25 basis
points to end the period at approximately 6.20%. This
outperformance by municipal securities is likely to be the
dominant theme for much of 1994.
During the January quarter, taxable yields remained volatile in
reaction to the inherent conflicts between the extremely strong
economic recovery seen during the last quarter of 1993 and
continued low inflationary pressures. Tax-exempt bond yields,
however, reflected very positive technical factors. During the 12
months ended January 31, 1994, municipalities issued more than
$288 billion in securities, an increase of more than 21% versus
one year ago. As we have discussed in earlier reports to
shareholders, much of this increase has been the result of
municipalities refinancing existing higher-couponed debt. At
current yield levels, few of these issues remain to be refunded.
This has led to estimates of municipal bond issuance declining to
approximately $175 billion for all of 1994. More than $290
billion in long-term tax-exempt securities was issued in 1993.
<PAGE>
In addition to this dramatic decline in issuance, investor demand
is expected to increase in the coming year. Greater demand should
be generated by a number of factors, with the recent increases in
marginal Federal income tax rates the most important. Also, bond
calls and early redemptions are expected to increase significantly
in the coming quarters and last into early 1995, at least. The
combination of declining new-issue volume and increasing numbers
of bonds redeemed prior to their stated maturities will eventually
lead to a net decline in the number of bonds outstanding. In such
a scenario, investor demand rises as bondholders are forced to
continually purchase new municipal bonds to replace their previous
holdings.
The outlook for the municipal bond market is very favorable.
While the historic declines in yields seen over the last year are
unlikely to be repeated, the strong technical framework within
the tax-exempt market would support further modest declines in
tax-exempt yields. At the very least, should interest rates rise
in response to continued strong economic growth and a resurgence
in inflationary pressures, we believe that municipal bond price
deterioration will be limited in comparison to taxable investment
alternatives.
Portfolio Strategy
For the quarter ended January 31, 1994, net assets for Merrill
Lynch Ohio Municipal Bond Fund totaled $75.9 million. This
represents a growth rate of 9.7% over the October quarter. Demand
for municipal bonds remains high as investors expect dwindling
volume. The technical environment in Ohio has remained strong,
and the Fund continues to be fully invested. The Fund has swapped
out of par bonds and into either discount coupon or higher-
yielding securities in order to place an emphasis on potentially
superior price performance and attractive accrual of tax-exempt
income.
We appreciate your ongoing interest in Merrill Lynch Ohio
Municipal Bond Fund, and we look forward to serving your
investment needs and objectives in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
March 8, 1994
PERFORMANCE DATA
None of the past results shown should be considered a
representation of future performance. Investment return
and principal value of Class A and Class B Shares will
fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
<TABLE>
Recent Performance Results*
<CAPTION>
12 Month 3 Month
1/31/94 10/31/93 1/31/93 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $11.33 $11.33 $10.45 + 8.55%(1) +0.12%(1)
Class B Shares 11.33 11.33 10.45 + 8.55(1) +0.12(1)
Class A Shares--Total Return +15.06(2) +2.09(3)
Class B Shares--Total Return +14.49(4) +1.96(5)
Class A Shares--Standardized 30-day Yield 4.49%
Class B Shares--Standardized 30-day Yield 4.17%
<FN>
*Investment results shown for the 3-month and 12-month periods are
before the deduction of any sales charges.
(1) Percent change includes reinvestment of $0.013 per share capital gains distributions.
(2) Percent change includes reinvestment of $0.648 per share ordinary income dividends
and $0.013 per share capital gains distributions.
(3) Percent change includes reinvestment of $0.220 per share ordinary income dividends
and $0.013 per share capital gains distributions.
(4) Percent change includes reinvestment of $0.592 per share ordinary income dividends
and $0.013 per share capital gains distributions.
(5) Percent change includes reinvestment of $0.206 per share ordinary income dividends
and $0.013 per share capital gains distributions.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
2/28/92--12/31/92 $10.00 $10.40 -- $0.525 + 9.46%
1993 10.40 11.22 $0.013 0.648 +14.53
1/1/94--1/31/94 11.22 11.33 -- 0.035 + 1.38
------ ------
Total $0.013 Total $1.208
Cumulative total return as of 1/31/94: +27.09%**
<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>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
2/28/92--12/31/92 $10.00 $10.40 -- $0.481 + 8.99%
1993 10.40 11.22 $0.013 0.592 +13.95
1/1/94--1/31/94 11.22 11.33 -- 0.031 + 1.35
------ ------
Total $0.013 Total $1.104
Cumulative total return as of 1/31/94: +25.87%**
<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>
Average Annual Total Return
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 12/31/93 +14.53% + 9.95%
Inception (2/28/92)
through 12/31/93 +13.06 +10.58
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 12/31/93 +13.95% + 9.95%
Inception (2/28/92)
through 12/31/93 +12.49 +11.01
[FN]
*Maximum contingent deferred sales charge is 4%
and is reduced to 0% after 4 years.
**Assuming payment of applicable contingent deferred
sales charge.
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Ohio--89.7%
NR Baa1 $ 900 Ashtabula County, Ohio, IDR, Refunding (Ashland Oil Inc., Project), Series A,
6.90% due 5/01/2010 $ 995
NR A 1,000 Barberton, Ohio, Hospital Facilities Revenue Bonds (Barberton Citizens Hospital
Company Project), 7.25% due 1/01/2012 1,139
NR A 1,000 Bedford, Ohio, City School District, GO, UT, 6.25% due 12/01/2013 1,097
BBB NR 1,000 Bellefontaine, Ohio, Hospital Revenue Refunding Bonds (Mary Rutan Health Association),
6% due 12/01/2002 1,076
NR Aa 500 Berea, Ohio, Various Purpose, GO, UT, Bank Qualified, 6.125% due 12/01/2012 540
NR A1 2,400 Centerville, Ohio, Recreational Facilities, GO, 5.80% due 12/01/2020 2,533
A-1 NR 600 Cincinnati and Hamilton County, Ohio, Port Authority Economic Development Revenue
Bonds (Kenwood Office Association Project), VRDN, 2.20% due 9/01/2025 (a) 600
AAA Aaa 1,025 Cleveland, Ohio, GO, Refunding, 5.375% due 9/01/2010 (b) 1,083
AAA Aaa 2,300 Cleveland, Ohio, Waterworks Revenue Bonds (First Mortgage), Series F-92-A, 6.50% due
1/01/2002 (b)(e) 2,684
AA- A1 700 Columbus, Ohio, Water System Revenue Refunding Bonds, 6.375% due 11/01/2010 773
NR Aa 500 Cuyahoga County, Ohio, GO, 6.50% due 10/01/2012 555
NR NR 2,000 Cuyahoga County, Ohio, GO, County Building Improvement, 6.70% due 10/01/1999 (e) 2,312
NR Aa 500 Cuyahoga County, Ohio, GO, Refunding, Series B, 5.25% due 10/01/2012 513
A A1 500 Cuyahoga County, Ohio, Hospital Revenue Bonds (Meridia Health System), 7.25% due
8/15/2019 565
A A1 2,000 Cuyahoga County, Ohio, Hospital Revenue Health Bonds (Cleveland--Fairview General
Hospital and Lutheran Medical Center), 6.25% due 8/15/2010 2,143
Cuyahoga County, Ohio, Hospital Revenue Improvement Bonds:
NR VMIG1 500 (Cleveland University Hospital), VRDN, 2.25% due 1/01/2016 (a) 500
AA Aa 900 (University Hospital Health Project), 6.50% due 1/15/2019 982
NR Aa 2,000 Cuyahoga County, Ohio, Jail Facilities, GO, UT, 5.25% due 10/01/2013 2,054
A- A 500 Erie County, Ohio, Hospital Improvement Revenue Refunding Bonds (Firelands
Community Hospital Project), 6.75% due 1/01/2015 554
NR NR 1,500 Franklin County, Ohio, Courthouse Revenue Bonds, 6.375% due 12/01/2001 (e) 1,748
AAA Aaa 2,000 Franklin County, Ohio, Refunding Bonds, 5.375% due 12/01/2020 2,061
</TABLE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of Merrill Lynch Ohio 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)
GO General Obligation Bonds
IDR Industrial Development Revenue Bonds
LEVRRS Leveraged Reverse Rate Securities
M/F Multi-Family
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
YCN Yield Curve Notes
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Ohio (continued)
A A $ 1,000 Garfield Heights, Ohio, Hospital Revenue Refunding and Improvement Bonds (Marymont
Hospital Project), Series B, 6.65% due 11/15/2011 $ 1,096
Hamilton County, Ohio, Gas System Revenue Bonds, Series A (d):
AAA Aaa 2,000 5% due 10/15/2018 1,991
AAA Aaa 750 4.75% due 10/15/2023 722
BBB- Baa 1,000 Hamilton County, Ohio, Health System Revenue Refunding Bonds (Providence
Hospital--Franciscan), 6.875% due 7/01/2015 1,069
A A1 1,000 Hamilton County, Ohio, Hospital Facilities, Revenue Refunding Bonds (Bethesda Hospital),
Series A, 6.25% due 1/01/2012 1,075
NR Aa2 500 Hamilton County, Ohio, Hospital Facilities, Revenue Refunding Bonds (Episcopal
Retirement Homes), 6.80% due 1/01/2008 560
NR Aa 500 Lake County, Ohio, GO, Refunding, 6.60% due 12/01/2010 590
NR Aa 425 Lakewood, Ohio, GO, 6.50% due 12/01/2012 488
NR A1 500 Lakota, Ohio, Local School District Revenue Bonds, UT, 6% due 12/01/2015 535
A- NR 1,750 Lorain County, Ohio, Hospital Improvement Revenue Refunding Bonds (Lakeland
Community Hospital Inc.), 6.50% due 11/15/2012 1,879
A NR 2,000 Lorain County, Ohio, M/F Revenue Refunding Bonds (Elderly Housing Corporation), Harr
Plaza & International, Series A, 6.375% due 7/15/2019 2,083
<PAGE>
A NR 840 Loveland, Ohio, City School District, GO, UT, 6.65% due 12/01/2015 977
Lucas County, Ohio, Hospital Revenue Bonds:
BBB+ NR 1,500 (Flower Hospital), 6.125% due 12/01/2013 1,544
AAA Aaa 2,480 (Saint Vincent Medical Center), Series C, 5.375% due 8/15/2017 (d) 2,517
A NR 750 Marion County, Ohio, IDR, Refunding (K mart Corporation Project), 6.70% due 2/01/2007 836
AAA Aaa 500 Medina, Ohio, City School District, GO, UT, 6.20% due 12/01/2018 (c) 553
AAA Aaa 750 Ohio Capital Corporation for Housing, Mortgage Revenue Refunding Bonds, Series J,
6.50% due 1/01/2025 (d) 782
Ohio State Air Quality Development Authority, PCR (Ohio Edison):
BBB- Baa2 2,000 Series A, 5.95% due 5/15/2029 2,012
AAA Aaa 2,500 Series B, 5.625% due 11/15/2029 (b) 2,573
Ohio State Air Quality Development Authority Revenue Bonds:
AAA Aaa 2,000 (Columbus and Southern Ohio), Series A, 6.375% due 12/01/2020 (c) 2,223
BBB Baa3 1,000 (Columbus and Southern Ohio Electric Project), Series B, 6.25% due 12/01/2020 1,029
Ohio State Air Quality Development Authority, Revenue Refunding Bonds:
NR Baa1 1,000 (Ashland Oil Inc., Project), 6.85% due 4/01/2010 1,102
A A2 1,500 (Coll--Dayton Power and Light Project), Series B, 6.40% due 8/15/2027 1,640
BBB- NR 1,000 (Owens--Corning Fiberglass Project), 6.25% due 6/01/2004 1,065
Ohio State Building Authority, State Facilities Revenue Bonds (Adult Correctional
Building), Series A:
A+ A1 1,000 6.30% due 10/01/2011 1,098
A+ A1 2,000 6.125% due 10/01/2012 2,146
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Ohio (concluded)
AAA Aaa $ 900 Ohio State Higher Educational Facility, Community Mortgage Revenue Bonds
(University of Dayton Project), 6.60% due 12/01/2017 (c) $ 1,039
NR A 1,000 Ohio State Higher Educational Facility, Community Revenue Refunding Bonds
(John Carroll University), 5.30% due 11/15/2014 1,010
A NR 505 Ohio State IDR, Mortgage Revenue Refunding Bonds (K mart Corporation), Series A,
6.75% due 10/01/2007 566
Student Loan Funding Corporation, Cincinnati, Ohio, Student Loan Revenue Bonds:
NR A1 1,000 Series A, AMT, 5.50% due 12/01/2001 1,028
NR A1 1,000 Sub-Series A, AMT, 6.15% due 8/01/2010 1,061
<PAGE>
NR NR 500 Student Loan Funding Corporation, Cincinnati, Ohio, Student Loan Revenue Refunding
Bonds, Sub-Series B, AMT, 6.75% due 1/01/2007 530
A NR 500 Trumbull County, Ohio, IDR, Refunding (K mart Corporation Project), 5.60% due 5/15/2006 510
NR A 500 Wilmington, Ohio, GO, 6.05% due 8/01/2017 530
AAA Aaa 1,000 Wooster, Ohio, City School District, GO, UT, 6.50% due 12/01/2017 (b) 1,135
Puerto Rico--8.1%
A Baa1 1,450 Puerto Rico Commonwealth, GO, UT, Refunding, 5.25% due 7/01/2018 1,425
AAA NR 700 Puerto Rico Commonwealth, Public Improvement, GO, UT, Series A, 6.50% due 7/01/1999 (e) 789
AAA Aaa 1,500 Puerto Rico Commonwealth, YCN, GO, UT, 9.132% due 7/01/2020 (a)(f) 1,719
AAA Aaa 900 Puerto Rico Electric Power Authority, Power Revenue Bonds, LEVRRS, 9.428% due
7/01/2023 (f)(g) 1,044
A UR* 1,000 Puerto Rico Public Buildings Authority, Guaranteed Public Education and Health
Facilities Authority Revenue Bonds, Series L, 6.875% due 7/01/2002 (e) 1,202
Total Investments (Cost--$68,802)--97.8% 74,280
Other Assets Less Liabilities--2.2% 1,648
---------
Net Assets--100.0% $ 75,928
=========
<FN>
(a) The interest rate is subject to change periodically based upon the prevailing market rate.
The interest rates shown are the rates in effect at January 31, 1994.
(b) AMBAC Insured.
(c) FGIC Insured.
(d) MBIA Insured.
(e) Prerefunded.
(f) FSA Insured.
(g) The interest rate is subject to change periodically and inversely based upon the prevailing
market rate. The interest rates shown are the rates in effect at January 31, 1994.
*Under review.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Statement of Assets and Liabilities as of January 31, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$68,801,500) (Note 1a) $ 74,280,167
Cash 80,635
Receivables:
Interest $ 944,809
Beneficial interest sold 875,186 1,819,995
<PAGE> ------------
Deferred organization expenses (Note 1e) 42,317
Prepaid expenses and other assets 21,045
------------
Total assets 76,244,159
------------
Liabilities: Payables:
Beneficial interest redeemed 134,068
Dividends to shareholders (Note 1f) 66,856
Distributor (Note 2) 25,495
Investment adviser (Note 2) 17,587 244,006
------------
Accrued expenses and other liabilities 72,558
------------
Total liabilities 316,564
------------
Net Assets: Net assets $ 75,927,595
============
Net Assets Class A Shares of beneficial interest, $.10 par value, unlimited number of
Consist of: shares authorized $ 87,120
Class B Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized 582,916
Paid-in capital in excess of par 69,573,921
Undistributed realized capital gains--net 204,971
Unrealized appreciation on investments--net 5,478,667
------------
Net assets $ 75,927,595
============
Net Asset Value: Class A--Based on net assets of $9,871,985 and 871,199 shares of
beneficial interest outstanding $ 11.33
============
Class B--Based on net assets of $66,055,610 and 5,829,162 shares of
beneficial interest outstanding $ 11.33
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six
Months Ended
January 31, 1994
<S> <S> <C>
Investment Income Interest and amortization of premium and discount earned $ 1,935,301
(Note 1d):
Expenses: Investment advisory fees (Note 2) 188,853
Distribution fees--Class B (Note 2) 148,912
Professional fees 28,220
Printing and shareholder reports 19,404
Accounting services (Note 2) 17,518
Transfer agent fees--Class B (Note 2) 15,384
Registration fees (Note 1e) 12,854
Custodian fees 6,096
Amortization of organization expenses (Note 1e) 6,083
Pricing fees 3,846
Transfer agent fees--Class A (Note 2) 2,060
Trustees' fees and expenses 1,508
Other 992
------------
Total expenses before reimbursement 451,730
Reimbursement of expenses (Note 2) (91,393)
------------
Total expenses after reimbursement 360,337
------------
Investment income--net 1,574,964
------------
Realized & Realized gain on investments--net 359,923
Unrealized Gains on Change in unrealized appreciation on investments--net 2,087,559
Investments--Net ------------
(Notes 1d & 3): Net Increase in Net Assets Resulting from Operations $ 4,022,446
============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the
Six Months For the
Ended Year Ended
January 31, July 31,
Increase (Decrease) in Net Assets: 1994 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 1,574,964 $ 2,167,480
Realized gain on investments--net 359,923 521,730
Change in unrealized appreciation on investments--net 2,087,559 1,973,664
------------ ------------
Net increase in net assets resulting from operations 4,022,446 4,662,874
------------ ------------
<PAGE>
Dividends & Investment income--net:
Distributions to Class A (228,920) (317,057)
Shareholders Class B (1,346,044) (1,850,423)
(Note 1f): Realized gain on investments--net:
Class A (76,803) (13,015)
Class B (515,880) (89,139)
------------ ------------
Net decrease in net assets resulting from dividends and distributions
to shareholders (2,167,647) (2,269,634)
------------ ------------
Beneficial Interest Net increase in net assets derived from beneficial interest transactions 12,285,642 28,940,785
Transactions ------------ ------------
(Note 4):
Net Assets: Net increase in net assets 14,140,441 31,334,025
Beginning of period 61,787,154 30,453,129
------------ ------------
End of period $ 75,927,595 $ 61,787,154
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A
----------------------------------------
For the
For the Period
The following per share data and ratios have been derived Six Months For the February 28,
from information provided in the financial statements. Ended Year Ended 1992++
January 31, July 31, to July 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1992
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.02 $ 10.56 $ 10.00
Operating ------- ------- -------
Performance: Investment income--net .28 .58 .25
Realized and unrealized gain on investments--net .40 .49 .56
------- ------- -------
Total from investment operations .68 1.07 .81
------- ------- -------
Less dividends and distributions:
Investment income--net (.28) (.58) (.25)
Realized gain on investments--net (.09) (.03) --
------- ------- -------
Total dividends and distributions (.37) (.61) (.25)
------- ------- -------
Net asset value, end of period $ 11.33 $ 11.02 $ 10.56
<PAGE> ======= ======= =======
Total Investment Based on net asset value per share 6.28%+++ 10.51% 8.21%+++
Return:** ======= ======= =======
Ratios to Expenses, net of reimbursement .61%* .51% .16%*
Average ======= ======= =======
Net Assets: Expenses .88%* 1.04% 1.36%*
======= ======= =======
Investment income--net 5.03%* 5.44% 5.75%*
======= ======= =======
Supplemental Net assets, end of period (in thousands) $ 9,872 $ 8,446 $ 4,209
Data: ======= ======= =======
Portfolio turnover 14.38% 41.51% 13.21%
======= ======= =======
<FN>
++Commencement of Operations.
+++Aggregate total investment return.
*Annualized.
**Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class B
----------------------------------------
For the
For the Period
The following per share data and ratios have been derived Six Months For the February 28,
from information provided in the financial statements. Ended Year Ended 1992++
January 31, July 31, to July 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1992
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.02 $ 10.56 $ 10.00
Operating ------- ------- -------
Performance: Investment income--net .26 .52 .23
Realized and unrealized gain on investments--net .40 .49 .56
------- ------- -------
Total from investment operations .66 1.01 .79
------- ------- -------
Less dividends and distributions:
Investment income--net (.26) (.52) (.23)
Realized gain on investments--net (.09) (.03) --
------- ------- -------
Total dividends and distributions (.35) (.55) (.23)
------- ------- -------
Net asset value, end of period $ 11.33 $ 11.02 $ 10.56
======= ======= =======
<PAGE>
Total Investment Based on net asset value per share 6.01%+++ 9.96% 7.98%+++
Return:** ======= ======= =======
Ratios to Expenses, excluding distribution fees and net of
Average reimbursement .62%* .52% .17%*
Net Assets: ======= ======= =======
Expenses, net of reimbursement 1.12%* 1.02% .67%*
======= ======= =======
Expenses 1.38%* 1.55% 1.86%*
======= ======= =======
Investment income--net 4.52%* 4.93% 5.26%*
======= ======= =======
Supplemental Net assets, end of period (in thousands) $66,056 $53,341 $26,244
Data: ======= ======= =======
Portfolio turnover 14.38% 41.51% 13.21%
======= ======= =======
<FN>
++Commencement of Operations.
+++Aggregate total investment return.
*Annualized.
**Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Ohio 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. The
Fund offers both Class A and Class B Shares. Class A Shares are
sold with a front-end sales charge. Class B Shares may be subject
to a contingent deferred sales charge. Both classes of shares
have identical voting, dividend, liquidation and other rights and
the same terms and conditions, except that Class B Shares bear
certain expenses related to the distribution of such shares and
have exclusive voting rights with respect to matters relating to
such distribution expenditures. The following is a summary of
significant accounting policies followed by the Fund.
<PAGE>
(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. Options, which are traded on exchanges, are valued at
their last sale price as of the close of such exchanges or,
lacking any sales, at the last available bid price. 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) 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. Original issue discounts and market premiums
are amortized into interest income. Realized gains and losses on
security transactions are determined on the identified cost
basis.
<PAGE>
(e) Deferred organization expenses and prepaid registration
fees--Deferred organization expenses are charged to expense on a
straight-line basis over a five-year period. 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.
2. Investment Advisory Agreement and Transactions with
Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Fund Asset Management, L.P. ("FAM"). Effective January 1, 1994,
the investment advisory business of FAM was reorganized from a
corporation to a limited partnership. Both prior to and after the
reorganization, ultimate control of FAM was vested with Merrill
Lynch & Co., Inc. ("ML & Co."). The general partner of FAM is
Princeton Services, Inc., an indirect wholly-owned subsidiary of
ML & Co. The limited partners are ML & Co. and Merrill Lynch
Investment Management, Inc. ("MLIM"), which is also an indirect
wholly-owned subsidiary of ML & Co. The Fund has also entered
into Distribution Agreements and a Distribution Plan with Merrill
Lynch Funds Distributor, Inc. ("MLFD" or "Distributor"), a
wholly-owned subsidiary of MLIM.
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. The Investment
Advisory Agreement obligates FAM to reimburse the Fund to the
extent the Fund's expenses (excluding interest, taxes,
distribution fees, brokerage fees and commissions, and
extraordinary items) exceed 2.5% of the Fund's first $30 million
of average daily net assets, 2.0% of the next $70 million of
average daily net assets and 1.5% of the average daily net assets
in excess thereof. FAM's obligation to reimburse the Fund is
limited to the amount of the management fee. No fee payment will
be made during any fiscal year which will cause such expenses to
exceed expense limitations at the time of such payment. For the
six months ended January 31, 1994, FAM earned fees of $188,853,
of which $91,393 was voluntarily waived.
<PAGE>
Pursuant to a distribution plan (the "Distribution Plan") 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 relating to Class B
Shares which are accrued daily and paid monthly at the annual
rates of 0.25% and 0.25%, respectively, of the average daily net
assets of the Class B Shares of the Fund. Pursuant to a sub-
agreement with the Distributor, Merrill Lynch also provides
account maintenance and distribution services for the Fund. The
ongoing account maintenance fee compensates the Distributor and
Merrill Lynch for providing account maintenance services to Class
B shareholders. As authorized by the Plan, the Distributor has
entered into an agreement with Merrill Lynch, Pierce, Fenner &
Smith Inc. ("MLPF&S"), an affiliate of FAM, which provides for
the compensation of MLPF&S for providing distribution-related
services to the Fund.
For the six months ended January 31, 1994, MLFD earned
underwriting discounts of $2,213, and MLPF&S earned dealer
concessions of $18,779 on sales of the Fund's Class A Shares.
MLPF&S also received contingent deferred sales charges of $2,961
for transactions in Class B Shares during the period.
Financial Data Services, Inc. ("FDS"), 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, MLIM, MLFD, FDS, MLPF&S, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term
securities, for the six months ended January 31, 1994 were
$20,198,587 and $9,336,195, respectively.
Net realized and unrealized gains as of January 31, 1994 were as
follows:
Realized Unrealized
Gains Gains
Long-term investments $ 359,079 $ 5,272,324
Short-term investments -- 206,343
Financial futures contracts 844 --
----------- -----------
Total $ 359,923 $ 5,478,667
=========== ===========
As of January 31, 1994, net unrealized appreciation for Federal
income tax purposes aggregated $5,478,667, of which $5,489,721
related to appreciated securities and $11,054 related to
depreciated securities. The aggregate cost of investments at
January 31, 1994 for Federal income tax purposes was $68,801,500.
<PAGE>
4. Beneficial Interest Transactions:
Net increase in net assets derived from beneficial interest
transactions was $12,285,642 and $28,940,785 for the six months
ended January 31, 1994 and the year ended July 31, 1993,
respectively.
Transactions in shares of beneficial interest in Class A and
Class B Shares were as follows:
Class A Shares for the Six Dollar
Months Ended January 31, 1994 Shares Amount
Shares sold 161,087 $ 1,815,899
Shares issued to shareholders
in reinvestment of dividends
and distributions 14,604 164,166
----------- -----------
Total issued 175,691 1,980,065
Shares redeemed (71,020) (801,255)
----------- -----------
Net increase 104,671 $ 1,178,810
=========== ===========
Class A Shares for the Dollar
Year Ended July 31, 1993 Shares Amount
Shares sold 391,700 $ 4,184,535
Shares issued to shareholders
in reinvestment of dividends
and distributions 19,119 202,971
----------- -----------
Total issued 410,819 4,387,506
Shares redeemed (42,747) (457,176)
----------- -----------
Net increase 368,072 $ 3,930,330
=========== ===========
Class B Shares for the Six Dollar
Months Ended January 31, 1994 Shares Amount
Shares sold 1,083,646 $12,185,950
Shares issued to shareholders
in reinvestment of dividends
and distributions 97,538 1,096,197
----------- -----------
Total issued 1,181,184 13,282,147
Shares redeemed (193,169) (2,175,315)
----------- -----------
Net increase 988,015 $11,106,832
=========== ===========
<PAGE>
Class B Shares for the Dollar
Year Ended July 31, 1993 Shares Amount
Shares sold 2,554,298 $27,098,873
Shares issued to shareholders
in reinvestment of dividends
and distributions 103,855 1,101,321
----------- -----------
Total issued 2,658,153 28,200,194
Shares redeemed (301,529) (3,189,739)
----------- -----------
Net increase 2,356,624 $25,010,455
=========== ===========
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Kenneth S. Axelson, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary
Custodian
National Westminster Bank NJ
10 Exchange Place
Jersey City, New Jersey 07302
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
