MERRILL LYNCH
OHIO MUNICIPAL
BOND FUND
FUND LOGO
Semi-Annual Report
January 31, 1995
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, NJ
08543-9011
<PAGE>
TO OUR SHAREHOLDERS
The combination of heightened inflationary concerns, anticipation of
further tightening of monetary policy by the Federal Reserve Board
and the turmoil of the Mexican currency crisis all exerted negative
influences on the US financial markets during the January quarter.
On the positive side, increasing signs that the US economy may be
losing momentum suggested that most of the interest rate increases
for this economic cycle may be behind us. As a result of these
economic crosscurrents, the US stock and bond markets continued to
be volatile during the period.
The manufacturing sector proved to be the driving force behind the
US economy through the final quarter of 1994, making an important
contribution to the substantial increase in corporate earnings. US
companies have been successful at containing labor costs, which are
an important component of the inflation outlook. Growth in the
economy has not been translated into higher wages and benefits for
US workers. Consumer spending is growing at a slower pace than in
previous economic recoveries, but households are nonetheless
spending more than saving, as the personal savings rate fell to an
all-time annual low in 1994.
In the weeks ahead, investors will continue to assess economic data
and inflationary trends in order to gauge whether further increases
in short-term interest rates are likely as 1995 unfolds. Despite the
widespread concerns about rising prices for raw materials and
incipient inflationary pressures, 1994's inflation results were as
positive as those in 1993, creating the best sustained inflation
performance in 30 years. However, it is not likely that such
positive inflation results will be duplicated in 1995. Investors
will also focus on the progress that the new Congress makes on both
reducing spending and the Federal budget deficit and passing tax
cuts that promote savings and investment. Legislative progress,
combined with continued indications of moderate and sustainable
levels of economic growth, would be positive for the US capital
markets. However, the lagged effects of higher interest rates could
slow the economy sharply and with it, the growth of corporate
profits.
The Municipal Market
The municipal bond market continued to exhibit considerable interest
rate volatility during the three months ended January 31, 1995.
Yields on A-rated municipal revenue bonds continued to rise
throughout November to a high of 7.37% as measured by the Bond Buyer
Revenue Bond Index. The tax-exempt bond market improved dramatically
for the remainder of the quarter, and yields fell by approximately
60 basis points (0.60%) to a four-month low of 6.78%. However, the
Index failed to capture much of the rally that occurred at the end
of January as market yields declined a further ten basis points into
the 6.65% range. Municipal bond prices have now recaptured most of
their declines of the last six months.
<PAGE>
This improvement in municipal bond prices during the January quarter
was largely the result of significant positive change in investor
sentiment. The series of interest rate increases engineered during
1994 have gone a long way in confirming the Federal Reserve Board's
anti-inflationary resolve. Additionally, the recent signs of a
weakening domestic economy, as well as the negative near-term impact
of the Kobe earthquake and Mexican currency situation, have allowed
investors to become more comfortable with the concept that the vast
majority of the recent rise in fixed-income rates has already
occurred and that yields during 1995 are more likely to remain
stable or decline than they are to significantly rise again.
Consequently, current yield levels are being viewed as attractive to
long-term investors.
In addition to this more positive outlook, the ongoing strong
technical position of the municipal bond market has only fostered
the increase in tax-exempt bond prices seen in recent months. Over
$25 billion in bond proceeds became available to investors at year-
end 1994 from bond maturities, coupon payments and early
redemptions. However, during the recent January quarter, new bond
issuance was less than $25 billion, down 50% from the January 1994
quarter. In January 1995, less than $7 billion in long-term
municipal securities were issued, making this past January's
issuance the lowest monthly total since the mid-1980s. Investor
demand has easily surpassed supply, causing bond prices to rise
rapidly. Also, as 1995 annual issuance is expected to be below the
recent historically low 1994 levels, this positive technical
environment should continue to support the recent improvements in
municipal bond prices into the coming quarters.
Portfolio Strategy
Structural changes to the Fund included lengthening the maturities
in the one-year--ten-year range, increasing the percentage of
revenue bonds over general obligation bonds, and significantly
reducing the Fund's cash position to a minimum amount. We anticipate
that the value of high-grade revenue bonds will increase relative to
general obligation bonds. Finally, the overall tone in the
fixed-income markets improved during the January quarter as
investors perceived that the Federal Reserve Board was clearly
committed to and successful at fighting inflation. Therefore, we
reduced the Fund's cash position to seek to further improve the
yield to shareholders.
In general, after the November peak in yields, retail and
institutional investors returned to the market looking to purchase
bonds in the 20-year--25-year maturity range. Having repositioned
the Fund to participate in this type of movement, we are looking
forward to seeking to enhance the Fund's performance in 1995.
<PAGE>
In Conclusion
We appreciate your ongoing interest in Merrill Lynch Ohio Municipal
Bond Fund, and we look forward to assisting you with your financial
needs in the months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
February 28, 1995
PERFORMANCE DATA
About Fund Performance
Since October 21, 1994, investors have been 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.
* 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.
<PAGE>
* Class D Shares incur a maximum initial sales charge of 4% and an
account maintenance fee of 0.10% (but no distribution fee).
Performance data for the Fund's Class A and Class B Shares are
presented in the "Recent Performance Results," "Performance
Summary" and "Average Annual Total Return" tables below and on page
4. Data for Class C and Class D Shares are also presented in the
"Recent Performance Results" and "Aggregate Total Return" tables
below and on page 4.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for Class A and Class B
Shares for the 12-month and 3-month periods ended January 31, 1995
and for Class C and Class D Shares for the since inception and 3-
month periods ended January 31, 1995. All data in this table assume
imposition of the actual total expenses (net of reimbursement)
incurred by each class of shares during the relevant period.
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
1/31/95 10/31/94 1/31/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $10.20 $9.93 $11.33 -9.97% +2.72%
Class B Shares* 10.20 9.93 11.33 -9.97 +2.72
Class C Shares* 10.20 9.93 10.09 +1.09 +2.72
Class D Shares* 10.20 9.93 10.09 +1.09 +2.72
Class A Shares--Total Return* -5.08(1) +4.12(2)
Class B Shares--Total Return* -5.56(3) +3.99(4)
Class C Shares--Total Return* +2.42(5) +3.95(6)
Class D Shares--Total Return* +2.57(7) +4.10(8)
Class A Shares--Standardized 30-day Yield 5.08%
Class B Shares--Standardized 30-day Yield 4.79%
Class C Shares--Standardized 30-day Yield 4.68%
Class D Shares--Standardized 30-day Yield 4.98%
<PAGE>
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
++Investment results shown for Class C and Class D Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.544 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.133 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.492 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.121 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.119 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.118 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.133 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.131 per share ordinary
income dividends.
</TABLE>
PERFORMANCE DATA (concluded)
<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>
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
1994 11.22 9.90 -- 0.548 - 6.98
1/1/95--1/31/95 9.90 10.20 -- 0.031 + 3.45
------ ------
Total $0.013 Total $1.752
Cumulative total return as of 1/31/95: +20.63%**
<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**
<S> <S> <S> <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
1994 11.22 9.90 -- 0.495 - 7.45
1/1/95--1/31/95 9.90 10.20 -- 0.028 + 3.42
------ ------
Total $0.013 Total $1.596
Cumulative total return as of 1/31/95: +18.87%**
<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
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/94 -6.98% -10.70%
Inception (2/28/92)
through 12/31/94 +5.56 + 4.05
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/94 -7.45% -10.97%
Inception (2/28/92)
through 12/31/94 +5.02 + 4.39
[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>
Aggregate Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94)
through 12/31/94 -1.06% -2.04%
[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*
Inception (10/21/94)
through 12/31/94 -0.95% -4.91%
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
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 below and at right.
AMT Alternative Minimum Tax (subject to)
ARC Auction Rate Certificates
BAN Bond Anticipation Notes
GO General Obligation Bonds
HFA Housing Finance Authority
IDR Industrial Development Revenue Bonds
LEVRRS Leveraged Reverse Rate Securities
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
SAVRS Select Auction Variable Rate Securities
S/F Single-Family
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)
Ohio--98.4%
<S> <S> <C> <S> <C>
NR* Baa1 $ 900 Ashtabula County, Ohio, IDR, Refunding (Ashland Oil Inc. Project), Series
A, 6.90% due 5/01/2010 $ 909
NR* A 4,000 Barberton, Ohio, Hospital Facilities Revenue Bonds (Barberton Citizens
Hospital Company Project), 7.25% due 1/01/2012 4,129
A1 NR* 1,900 Cincinnati and Hamilton County, Ohio, Port Authority, Economic Development
Revenue Bonds (Kenwood Office Association Project), VRDN, 4% due 9/01/2025 (a) 1,900
NR* NR* 445 Cincinnati, Ohio, Student Loan Funding Corporation, Revenue Refunding Bonds,
AMT, Sub-Series B, 6.75% due 1/01/2007 450
NR* VMIG1++ 3,400 Cuyahoga County, Ohio, Hospital Revenue Improvement Bonds (Cleveland
University Hospital), VRDN, 3.95% due 1/01/2016 (a) 3,400
A- A 1,220 Erie County, Ohio, Hospital Improvement Revenue Refunding Bonds (Firelands
Community Hospital Project), 6.75% due 1/01/2015 1,207
NR* Aa 1,000 Franklin County, Ohio, Hospital Revenue Refunding Bonds (Riverside United
Methodist Church), Series A, 5.75% due 5/15/2020 884
AAA Aaa 3,500 Hamilton County, Ohio, Electric System, Mortgage Revenue Refunding Bonds,
Series A, 6% due 10/15/2012 (c) 3,447
Hamilton County, Ohio, Health System Revenue Bonds:
NR* VMIG1++ 900 (Franciscan Sisters Poor Health), VRDN, Series A, 3.95% due 3/01/2017 (a) 900
BBB- Baa 3,000 Refunding (Providence Hospital-Franciscan), 6.875% due 7/01/2015 2,823
NR* Aa2 500 Hamilton County, Ohio, Hospital Facilities, Revenue Refunding Bonds
(Episcopal Retirement Homes), 6.80% due 1/01/2008 510
AAA Aaa 1,200 Huron County, Ohio, Human Services, Building Revenue Bonds, 7.25% due
12/01/2013 (d) 1,323
NR* Aaa 5,530 Kent, Ohio, M/F Housing Mortgage Revenue Bonds (Silver Meadows), AMT, 7.30%
due 12/20/2036 (g) 5,657
Lakota, Ohio, Local School District Revenue Bonds, GO, UT (b):
AAA Aaa 1,000 7% due 12/01/2008 1,112
AAA Aaa 1,740 7% due 12/01/2010 1,925
<PAGE>
NR* NR* 1,500 Lucas County, Ohio, BAN, 5.75% due 11/30/1995 1,506
BBB+ NR* 1,500 Lucas County, Ohio, Hospital Revenue Bonds (Flower Hospital), 6.125% due
12/01/2013 1,310
AAA Aaa 1,500 Mahoning County, Ohio, Hospital Facilities Revenue Refunding Bonds (YHA Inc.
Project), Series A, 7% due 10/15/2014 (d) 1,569
BBB+ Baa1 2,000 Moraine, Ohio, Solid Waste Disposal Revenue Bonds (General Motors Corpor-
ation Project), AMT, 6.75% due 7/01/2014 1,970
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Ohio (concluded)
<S> <S> <C> <S> <C>
AAA Aaa $ 3,000 North Canton City, Ohio, School District Improvement Bonds, GO, UT, 6.70%
due 12/01/2019 (b) $ 3,114
AAA NR* 1,000 Ohio HFA, Residential Mortgage Revenue Bonds, AMT, Series B-2, 6.70% due
3/01/2025 (g) 1,000
AAA Aaa 1,200 Ohio HFA, S/F Mortgage Revenue Bonds, Linked SAVRS and RIB, AMT, Series B,
6.903% due 3/24/2031 (g) 1,197
AAA Aaa 1,505 Ohio State Air Quality Development Authority, PCR, Refunding (Ohio Edison),
Series B, 7.10% due 6/01/2018 (c) 1,575
Ohio State Air Quality Development Authority Revenue Bonds:
AAA Aaa 4,250 (Columbus & Southern Ohio Power Company Project), Series A, 6.375%
due 12/01/2020 (c) 4,282
BBB Baa3 1,000 (Columbus & Southern Ohio Power Company Project), Series B, 6.25% due
12/01/2020 880
NR* Baa1 1,000 Refunding (Ashland Oil Inc., Project), 6.85% due 4/01/2010 1,000
AA- A1 4,000 Refunding (Coll-Dayton Power & Light Project), Series B, 6.40% due
8/15/2027 3,962
AAA Aaa 3,000 Refunding (JMG Funding Ltd. Partnership Project), AMT, 6.375% due
1/01/2029 (b) 2,965
BBB- NR* 1,000 Refunding (Owens Corning Fiberglass Project), 6.25% due 6/01/2004 966
A+ A 1,015 Ohio State Building Authority, State Facilities Revenue Bonds (Adult
Correctional Building), Series A, 4.75% due 4/01/2014 (d) 812
Ohio State Higher Educational Facilities, Revenue Refunding Bonds (Case
Western Reserve University):
AA- Aa 1,410 6.25% due 10/01/2016 1,412
AA- Aa 2,500 6.25% due 10/01/2017 2,503
<PAGE>
AA Aa 2,500 Ohio State Infrastructure Improvement Bonds, 5.90% due 8/01/2006 2,552
AA- A1 3,080 Ohio State Turnpike Commission, Turnpike Revenue Bonds, Series A, 5.75%
due 2/15/2024 2,810
AAA Aaa 2,000 Ohio University, General Receipts Refunding Bonds (Athens), 5% due
12/01/2013 (c) 1,715
AAA Aaa 2,000 Westerville, Ohio, Minerva Park and Blendon Joint Township, Hospital
District Revenue Refunding Bonds (Saint Ann's Hospital), Series B, 7%
due 9/15/2012 (b) 2,093
Guam--2.7%
BBB NR* 2,000 Guam Power Authority Revenue Bonds, Series A, 6.75% due 10/01/2024 1,945
Puerto Rico--8.5%
AAA Aaa 3,000 Puerto Rico Commonwealth, Linked Bonds, 5.83% due 7/01/2020 (f) 2,848
Puerto Rico Electric Power Authority, Power Revenue Bonds:
AAA Aaa 1,800 Linked ARC and LEVRRS, 5.929% due 7/01/2023 (f) 1,728
A- Baa1 500 Refunding, Series S, 7% due 7/01/2007 533
AAA Aaa 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) 1,096
Total Investments (Cost--$80,081)--109.6% 79,919
Liabilities in Excess of Other Assets--(9.6%) (6,994)
-------
Net Assets--100.0% $72,925
=======
<FN>
(a)The interest rate is subject to change periodically based
upon the prevailing market rate. The interest rate shown
is the rate in effect at January 31, 1995.
(b)AMBAC Insured.
(c)FGIC Insured.
(d)MBIA Insured.
(e)Prerefunded.
(f)FSA Insured.
(g)GNMA Collateralized.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of January 31, 1995
<CAPTION>
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$80,080,949) (Note 1a) $79,918,763
Cash 9,806
Receivables:
Securities sold $ 3,396,813
Interest 1,048,809
Beneficial interest sold 347,451 4,793,073
-----------
Deferred organization expenses (Note 1e) 30,481
Prepaid registration fees and other assets (Note 1e) 13,538
-----------
Total assets 84,765,661
-----------
Liabilities: Payables:
Securities purchased 11,643,124
Dividends to shareholders (Note 1f) 75,926
Investment adviser (Note 2) 30,829
Distributor (Note 2) 24,448
Beneficial interest redeemed 12,547 11,786,874
-----------
Accrued expenses and other liabilities 53,454
-----------
Total liabilities 11,840,328
-----------
Net Assets: Net assets $72,925,333
===========
Net Assets Class A Shares of beneficial interest, $.10 par value,
Consist of: unlimited number of shares authorized $ 70,040
Class B Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 613,538
Class C Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 2,507
Class D Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 28,744
Paid-in capital in excess of par 74,297,693
Accumulated realized capital losses on investments--net (1,925,003)
Unrealized depreciation on investments--net (162,186)
Net assets $72,925,333
<PAGE>
Net Asset Value: Class A--Based on net assets of $7,145,418 and 700,396 shares of
beneficial interest outstanding $ 10.20
===========
Class B--Based on net assets of $62,592,924 and 6,135,382 shares of
beneficial interest outstanding $ 10.20
===========
Class C--Based on net assets of $255,743 and 25,074 shares of
beneficial interest outstanding $ 10.20
===========
Class D--Based on net assets of $2,931,248 and 287,438 shares of
beneficial interest outstanding $ 10.20
===========
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months
Ended January 31, 1995
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 2,209,808
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 195,920
Distribution fees--Class B (Note 2) 156,777
Printing and shareholder reports 27,688
Professional fees 26,013
Transfer agent fees--Class B (Note 2) 22,255
Accounting services (Note 2) 21,353
Custodian fees 7,122
Amortization of organization expenses (Note 1e) 5,802
Registration fees (Note 1e) 5,802
Pricing fees 3,796
Transfer agent fees--Class A (Note 2) 2,356
Trustees' fees and expenses 1,878
Account maintenance fees--Class D (Note 2) 311
Distribution fees--Class C (Note 2) 275
Transfer agent fees--Class D (Note 2) 198
Transfer agent fees--Class C (Note 2) 37
Other 2,653
-----------
Total expenses before reimbursement 480,236
Reimbursement of expenses (Note 2) (19,871)
-----------
Total expenses after reimbursement 460,365
-----------
Investment income--net 1,749,443
-----------
<PAGE>
Realized & Realized loss on investments--net (1,493,978)
Unrealized Change in unrealized appreciation/depreciation on investments--net (653,841)
Loss on -----------
Investments Net Decrease in Net Assets Resulting from Operations $ (398,376)
- --Net (Notes ===========
1b, 1d & 3):
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the
Six For the
Months Year
Ended Ended
January 31, July 31,
Increase (Decrease) in Net Assets: 1995 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 1,749,443 $ 3,310,756
Realized loss on investments--net (1,493,978) (276,074)
Change in unrealized appreciation/depreciation on
investments--net (653,841) (2,899,454)
----------- -----------
Net increase (decrease) in net assets resulting from operations (398,376) 135,228
----------- -----------
Dividends & Investment income--net:
Distributions to Class A (209,469) (470,881)
Shareholders Class B (1,521,223) (2,839,875)
(Note 1f): Class C (2,215) --
Class D (16,536) --
In excess of realized gain on investments--net
Class A -- (76,803)
Class B -- (515,879)
----------- -----------
Net decrease in net assets resulting from dividends and
distributions to shareholders (1,749,443) (3,903,438)
----------- -----------
Beneficial Net increase in net assets derived from beneficial interest
Interest transactions 90,596 16,963,612
Transactions ----------- -----------
(Note 4):
Net Assets: Total increase (decrease) in net assets (2,057,223) 13,195,402
Beginning of period 74,982,556 61,787,154
----------- -----------
End of period $72,925,333 $74,982,556
=========== ===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A
For the For the
Six Period
The following per share data and ratios have been derived Months Feb. 28,
from information provided in the financial statements. Ended For the Year Ended 1992++ to
Jan. 31, July 31, July 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.50 $ 11.02 $ 10.56 $ 10.00
Operating -------- -------- -------- --------
Performance: Investment income--net .27 .56 .58 .25
Realized and unrealized gain (loss) on invest-
ments--net (.30) (.43) .49 .56
-------- -------- -------- --------
Total from investment operations (.03) .13 1.07 .81
-------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.27) (.56) (.58) (.25)
Realized gain on investments--net -- -- (.03) --
In excess of realized gain on investments--net -- (.09) -- --
-------- -------- -------- --------
Total dividends and distributions (.27) (.65) (.61) (.25)
-------- -------- -------- --------
Net asset value, end of period $ 10.20 $ 10.50 $ 11.02 $ 10.56
======== ======== ======== ========
Total Investment Based on net asset value per share (.22%)+++ 1.10% 10.51% 8.21%+++
Return:** ======== ======== ======== ========
Ratios to Expenses, net of reimbursement .84%* .65% .51% .16%*
Average ======== ======== ======== ========
Expenses .90%* .89% 1.04% 1.36%*
======== ======== ======== ========
Net Assets: Investment income--net 5.36%* 5.12% 5.44% 5.75%*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 7,145 $ 9,373 $ 8,446 $ 4,209
Data: ======== ======== ======== ========
Portfolio turnover 83.44% 44.83% 41.51% 13.21%
======== ======== ======== ========
<PAGE>
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class B
For the For the
The following per share data and ratios have been Six Period
derived from information provided in the financial Months Feb. 28, For the Period
statements. Ended For the Year Ended 1992++ to Oct. 21. 1994++ to
Jan. 31, July 31, July 31, Jan. 31, 1995
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 Class C Class D
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of period $ 10.50 $ 11.02 $ 10.56 $ 10.00 $ 10.09 $ 10.09
Performance: -------- -------- -------- -------- -------- --------
Investment income--net .25 .50 .52 .23 .13 .14
Realized and unrealized gain
(loss) on investments--net (.30) (.43) .49 .56 .11 .11
-------- -------- -------- -------- -------- --------
Total from investment
operations (.05) .07 1.01 .79 .24 .25
-------- -------- -------- -------- -------- --------
Less dividends and distribu-
tions:
Investment income--net (.25) (.50) (.52) (.23) (.13) (.14)
Realized gain on invest-
ments--net -- -- (.03) -- -- --
In excess of realized gain
on investments--net -- (.09) -- -- -- --
-------- -------- -------- -------- -------- --------
Total dividends and distribu-
tions (.25) (.59) (.55) (.23) (.13) (.14)
-------- -------- -------- -------- -------- --------
Net asset value, end of
period $ 10.20 $ 10.50 $ 11.02 $ 10.56 $ 10.20 $ 10.20
======== ======== ======== ======== ======== ========
Total Investment Based on net asset value per
Return:** share (.47%)+++ .59% 9.96% 7.98%+++ 2.42%+++ 2.57%
======== ======== ======== ======== ======== ========
<PAGE>
Ratios to Expenses, excluding account
Average maintenance and distribution
Net Assets: fees and net of reimbursement .85%* .66% .52% .17%* .93%* .91%*
======== ======== ======== ======== ======== ========
Expenses, net of reimburse-
ment 1.35%* 1.16% 1.02% .67%* 1.53%* 1.01%*
======== ======== ======== ======== ======== ========
Expenses 1.41%* 1.39% 1.55% 1.86%* 1.53%* 1.01%*
======== ======== ======== ======== ======== ========
Investment income--net 4.85%* 4.61% 4.93% 5.26%* 4.83%* 5.32%*
======== ======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 62,593 $ 65,610 $ 53,341 $ 26,244 $ 256 $ 2,931
======== ======== ======== ======== ======== ========
Portfolio turnover 83.44% 44.83% 41.51% 13.21% 83.44% 83.44%
======== ======== ======== ======== ======== ========
<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
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. 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.
<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. 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.
* 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.
<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. Distributions in excess
of realized capital gains are due primarily to differing tax
treatments for futures transactions and post-October losses.
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. 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 to the Investment Adviser during any fiscal year which will
cause such expenses to exceed expense limitations at the time of
payment. For the six months ended January 31, 1995, FAM earned fees
of $195,920, of which $19,871 was voluntarily waived.
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:
<PAGE>
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, 1995, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the
Fund's Class A and Class D Shares as follows:
MLFD MLPF&S
Class A $84 $933
Class D -- --
MLPF&S received contingent deferred sales charges of $88,047
relating to transactions in Class B Shares of beneficial interest
for the six months ended January 31, 1995.
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, PSI, MLPF&S, FDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended January 31, 1995 were $57,630,899 and
$55,218,426, respectively.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded)
Net realized and unrealized losses as of January 31, 1995 were as
follows:
Realized Unrealized
Losses Losses
Long-term investments $ (1,400,141) $ (159,610)
Short-term investments -- (2,576)
Financial futures contracts (93,837) --
------------ ------------
Total $ (1,493,978) $ (162,186)
============ ============
As of January 31, 1995, net unrealized depreciation for Federal
income tax purposes aggregated $162,186, of which $1,199,519 related
to appreciated securities and $1,361,705 related to depreciated
securities. The aggregate cost of investments at January 31, 1995
for Federal income tax purposes was $80,080,949.
4. Beneficial Interest Transactions:
Net increase in net assets derived from beneficial interest
transactions was $90,596 and $16,963,612 for the six months ended
January 31, 1995 and the year ended July 31, 1994, respectively.
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the Six Dollar
Months Ended January 31, 1995 Shares Amount
Shares sold 142,813 $ 1,467,131
Shares issued to shareholders
in reinvestment of dividends 9,920 99,670
------------ ------------
Total issued 152,733 1,566,801
Shares redeemed (345,029) (3,510,215)
------------ ------------
Net decrease (192,296) $ (1,943,414)
============ ============
<PAGE>
Class A Shares for the Dollar
Year Ended July 31, 1994 Shares Amount
Shares sold 337,482 $ 3,657,739
Shares issued to shareholders
in reinvestment of dividends
and distributions 26,056 285,141
------------ ------------
Total issued 363,538 3,942,880
Shares redeemed (237,374) (2,563,654)
------------ ------------
Net increase 126,164 $ 1,379,226
============ ============
Class B Shares for the
Six Months Ended Dollar
January 31, 1995 Shares Amount
Shares sold 650,507 $ 6,575,339
Shares issued to shareholders
in reinvestment of dividends 86,596 867,497
------------ ------------
Total issued 737,103 7,442,836
Shares redeemed (850,698) (8,488,748)
------------ ------------
Net decrease (113,595) $ (1,045,912)
============ ============
Class B Shares for the Dollar
Year Ended July 31, 1994 Shares Amount
Shares sold 1,957,432 $ 21,477,219
Shares issued to shareholders
in reinvestment of dividends
and distributions 180,104 1,968,660
------------ ------------
Total issued 2,137,536 23,445,879
Shares redeemed (729,706) (7,861,493)
------------ ------------
Net increase 1,407,830 $ 15,584,386
============ ============
<PAGE>
Class C Shares for the
Period October 21, 1994++ Dollar
to January 31, 1995 Shares Amount
Shares sold 24,903 $ 241,255
Shares issued to shareholders
in reinvestment of dividends 171 1,693
------------ ------------
Net increase 25,074 $ 242,948
============ ============
[FN]
++Commencement of Operations.
Class D Shares for the
Period October 21, 1994++ to Dollar
January 31, 1995 Shares Amount
Shares sold 287,414 $ 2,836,702
Shares issued to shareholders
in reinvestment of dividends 352 3,509
------------ ------------
Total issued 287,766 2,840,211
Shares redeemed (328) (3,237)
------------ ------------
Net increase 287,438 $ 2,836,974
============ ============
[FN]
++Commencement of Operations.
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
<PAGE>
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
