MERRILL LYNCH
OHIO MUNICIPAL
BOND FUND
FUND LOGO
Semi-Annual Report
January 31, 1996
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
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, 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.
<PAGE>
Merrill Lynch Ohio
Municipal Bond Fund
Merrill Lynch Multi-State
Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
TO OUR SHAREHOLDERS
Although the partial shutdown of the US Government curtailed the
release of most economic data in the latter part of the six-month
period ended January 31, 1996, it was nonetheless apparent that
gross domestic product (GDP) growth was losing momentum. Consumer
spending is barely growing, the industrial sector is at a virtual
standstill and, despite lower mortgage rates, there is little or no
pick-up in housing activity. With inflationary pressures subdued,
the Federal Reserve Board responded to the slowing economy by
continuing to modestly lower short-term interest rates.
Historically, it has taken some time for shifts in monetary policy
to have an impact on economic growth. Therefore, the Federal Reserve
Board's gradual shift to lowering interest rates, which began early
last year, may not be reflected in a pick-up in real economic growth
until later this year.
The impasse between the Clinton Administration and Congress over the
Federal budget continues, although both sides have made concessions
since the debate began. It appears that investors are currently
focusing on the progress that has been made rather than on the
differences that remain. Initially, President Clinton proposed
deficits of about $190 billion annually through fiscal year 2002,
but now proposes balanced budgets, as do the Republicans. Current
indications are that a piecemeal budget accord is the most likely
outcome. Even without the proposed policy changes, it appears that
the US Federal budget deficit would remain stable at about 2% of GDP
for the rest of the decade. This would be far better than is the
case for most Group of Seven industrial nations, and for the United
States would represent a great improvement over the last 15 years.
Although this may fall short of investors' best expectations, it
appears that the Federal budget debate over the past year has
resulted in a trend toward a more conservative fiscal policy.
<PAGE>
The Municipal Market
The municipal bond market rallied strongly during the six months
ended January 31, 1996. Long-term, tax-exempt revenue bond yields,
as measured by the Bond Buyer Revenue Bond Index, declined over 65
basis points (0.65%) to end the January period at 5.69%. Continued
weak economic conditions coupled with low inflation fostered a very
positive environment for almost all fixed-income investments during
the last three months of 1995. Long-term US Treasury bond yields
also declined approximately 65 basis points to 6.00% by January 31,
1996. Both US Treasury and long-term tax-exempt bond yields are near
their lowest levels in the past two years.
The municipal bond market had to contend with a number of
difficulties for much of 1995. Various tax reform proposals have
made the future tax advantage of municipal bonds uncertain. This
has, at a minimum, reduced the overall demand for tax-exempt
securities. At the same time, as municipal bond yields declined, tax-
exempt authorities have rushed to issue debt at near historic low
yield levels. During the six-month period ended January 31, 1996,
approximately $90 billion in municipal securities were underwritten,
an increase of over 30% compared to the same period last year.
However, as early 1995 issuance was significantly reduced, the last
12 months issuance of approximately $160 billion remained the same
as that issued a year earlier. Tax-exempt bond yields declined
throughout the six months ended January 31, 1996, despite investor
uncertainty and increased supply pressures.
It is likely that the municipal market will regain much of the
technical support it enjoyed earlier in 1995. 1995 issuance remained
significantly below levels underwritten in 1993, when over $290
billion in long-term tax-exempt securities were issued. Also,
municipal investors received over $25 billion in bond maturities,
coupon income and early redemptions on January 1, 1996. This $25
billion is almost twice the average monthly issuance for 1995. The
amount of outstanding municipal securities will continue to decline
throughout 1996 and into early 1997. As the uncertainties
surrounding proposed tax reforms are resolved in 1996, the tax-
exempt bond market's renewed technical position should provide
support to municipal bond prices.
Many of the features that made tax-exempt products attractive to
investors last year are still in place. Long-term, A-rated municipal
revenue bonds continue to yield well over 90% of comparable US
Treasury bond yields. Historically, analysts have considered yields
in excess of 82% attractive for long-term investors. For example,
currently available tax-exempt bond yields generate taxable
equivalent yields in excess of 8.50% for an investor in the 36%
Federal income tax bracket. While the uncertainties regarding
potential changes in current tax law remain, it appears that, at
current price levels, bond investors have discounted at least some
of the uncertainty.
<PAGE>
Looking ahead, it may be unreasonable to expect to duplicate the
double-digit returns produced by most tax-exempt issues in 1995,
given current municipal bond yields. Municipal bond yields would
have to decline to levels not seen since the 1960s in order to
generate such significant returns in the coming years. While the
current economic environment may still justify additional declines
in interest rates, it may be prudent to expect some period of
consolidation before the interest rate decline resumes. Tax-exempt
bond market performance in 1996 is likely to be generated more by
enhancing current income and limiting credit risk than by
significant interest rate declines.
Portfolio Strategy
For the three-month period ended January 31, 1996, the Fund
continued to participate in the bond market rally. We still maintain
the very constructive outlook for bonds we adopted in 1995 and
anticipate seeking to provide attractive total returns for the
Fund's shareholders in 1996.
During the past several months, investors were very bullish toward
the bond market even after an impressive rally caused some investors
to become somewhat cautious. The ongoing debate in Washington over
the Federal budget, the recent sharp rise in the price of various
commodities such as gas, grains and gold, and the discussions
regarding a flat tax have overshadowed the fundamental weakness in
the economy. We believe the slowing economy will prompt the Federal
Reserve Board to ease monetary policy further, which would lead to
higher bond prices.
We used some of the extreme market weakness in late 1995 to purchase
attractive issues, and subsequently sold issues which we expected to
underperform. In addition, we maintained our overweighting to
interest rate-sensitive issues, which should continue to offer
attractive total returns when investors refocus on the fundamentals
of the economy and inflation.
In Conclusion
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
<PAGE>
(Vincent R. Giordano)
Vincent R. Giordano
Vice President
(William M. Petty)
William M. Petty
Portfolio Manager
March 14, 1996
We are pleased to announce that William M. Petty is responsible for
the day-to-day management of Merrill Lynch Ohio Municipal Bond Fund.
Mr. Petty has been employed by Merrill Lynch Asset Management, L.P.
(an affiliate of the Fund's investment adviser) since 1993 as Vice
President and was Assistant Vice President from 1992 to 1993. Prior
thereto, he was employed by J.J. Kenny Municipal Bond Brokers as a
Municipal Bond Broker from 1990 to 1992.
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.
* 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.
<PAGE>
* 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.
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
1/31/96 10/31/95 1/31/95 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $11.01 $10.75 $10.20 + 7.94% +2.42%
Class B Shares* 11.01 10.75 10.20 + 7.94 +2.42
Class C Shares* 11.01 10.75 10.20 + 7.94 +2.42
Class D Shares* 11.01 10.74 10.20 + 7.94 +2.51
Class A Shares--Total Return* +13.60(1) +3.69(2)
Class B Shares--Total Return* +13.02(3) +3.56(4)
Class C Shares--Total Return* +12.91(5) +3.53(6)
Class D Shares--Total Return* +13.48(7) +3.76(8)
Class A Shares--Standardized 30-day Yield 4.47%
Class B Shares--Standardized 30-day Yield 4.15%
Class C Shares--Standardized 30-day Yield 4.04%
Class D Shares--Standardized 30-day Yield 4.37%
<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 $0.545 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.136 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.491 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.122 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.480 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.119 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.535 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.133 per share ordinary
income dividends.
</TABLE>
<PAGE>
PERFORMANCE DATA (continued)
<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
1995 9.90 11.00 -- 0.545 +16.97
1/1/96--1/31/96 11.00 11.01 -- 0.031 + 0.47
------ ------
Total $0.013 Total $2.297
Cumulative total return as of 1/31/96: +37.03%**
<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>
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
1995 9.90 11.00 -- 0.491 +16.38
1/1/96--1/31/96 11.00 11.01 -- 0.028 + 0.44
------ ------
Total $0.013 Total $2.087
Cumulative total return as of 1/31/96: +34.35%**
<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 $10.09 $ 9.89 -- $0.091 - 1.06%
1995 9.89 11.00 -- 0.480 +16.37
1/1/96--1/31/96 11.00 11.01 -- 0.027 + 0.43
------
Total $0.598
Cumulative total return as of 1/31/96: +15.64%**
<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 $10.09 $ 9.89 -- $0.103 - 0.95%
1995 9.89 11.00 -- 0.534 +16.97
1/1/96--1/31/96 11.00 11.01 -- 0.031 + 0.46
------
Total $0.668
Cumulative total return as of 1/31/96: +16.40%**
<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>
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/95 +16.97% +12.29%
Inception (2/28/92)
through 12/31/95 + 8.42 + 7.27
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/95 +16.38% +12.38%
Inception (2/28/92)
through 12/31/95 + 7.87 + 7.66
[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 12/31/95 +16.37% +15.37%
Inception (10/21/94)
through 12/31/95 +12.53 +12.53
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 12/31/95 +16.97% +12.29%
Inception (10/21/94)
through 12/31/95 +13.12 + 9.32
[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)
GO General Obligation Bonds
HFA Housing Finance Agency
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
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--95.2%
<S> <S> <C> <S> <C>
AAA Aaa $ 1,000 Akron-Bath-Copley Township, Ohio, State Hospital District, Revenue Refunding
Bonds (Children's Hospital Medical Center), 5% due 11/15/2015 (b) $ 948
NR* Baa1 900 Ashtabula County, Ohio, IDR, Refunding (Ashland Oil Inc. Project),
Series A, 6.90% due 5/01/2010 960
NR* A 4,000 Barberton, Ohio, Hospital Facilities Revenue Bonds (Barberton Citizens
Hospital Co. Project), 7.25% due 1/01/2012 4,365
AAA Aaa 1,000 Buckeye Valley, Ohio, Local School District Revenue Bonds (Delaware
County), Series A, UT, 6.85% due 12/01/2015 (d) 1,224
A1 NR* 1,000 Cincinnati and Hamilton County, Ohio, Port Authority, IDR (Multi-Color
Corp. Project), VRDN, 3.35% due 11/01/2000 (a) 1,000
NR* NR* 710 Cincinnati, Ohio, Student Loan Funding Corporation, Revenue Refunding
Bonds, AMT, Sub-Series B, 6.75% due 1/01/2007 726
AAA Aaa 1,000 Clermont County, Ohio, Sewer System Revenue Refunding Bonds, 5.20%
due 12/01/2021 (b) 978
AAA Aaa 3,665 Cleveland, Ohio, Water Works Revenue Bonds, Series F-92 A, 6.25%
due 1/01/2015 (b) 3,926
Cuyahoga County, Ohio, M/F Revenue Bonds (Dalebridge Apartments), AMT (e):
NR* Aaa 1,000 6.50% due 10/20/2020 1,042
NR* Aaa 2,850 6.60% due 10/20/2030 2,975
AAA Aaa 2,000 Dayton, Ohio, Airport Revenue Refunding Bonds (James M. Cox Dayton
International), 5.25% due 12/01/2015 (b) 1,992
NR* A1 1,300 Dayton, Ohio, Special Facilities Revenue Bonds (Emery Air Freight
Project), VRDN, Series C, 3.85% due 10/01/2009 (a) 1,300
A- A 1,220 Erie County, Ohio, Hospital Improvement Revenue Refunding Bonds (Firelands
Community Hospital Project), 6.75% due 1/01/2015 1,285
NR* Aa 3,130 Euclid, Ohio, GO, 5.50% due 12/01/2015 3,215
AAA Aaa 1,375 Granville, Ohio, Exempted Village School District, Revenue Refunding Bonds,
UT, 5.42% due 12/01/2013 (b)(f) 530
BBB Baa1 2,750 Hamilton County, Ohio, Health System Revenue Refunding Bonds (Providence
Hospital-Franciscan), 6.875% due 7/01/2015 2,852
<PAGE>
AAA Aaa 1,500 Hudson, Ohio, Local School District, Revenue Refunding Bonds, 5.60%
due 12/15/2014 (c) 1,512
AAA Aaa 1,200 Huron County, Ohio, Human Services, Building Revenue Bonds, 7.25% due
12/01/2013 (d) 1,440
NR* Aaa 5,530 Kent, Ohio, M/F Housing Mortgage Revenue Bonds (Silver Meadows), AMT,
7.30% due 12/20/2036 (e) 6,210
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Ohio (concluded)
<S> <S> <C> <S> <C>
AAA Aaa $1,740 Lakota, Ohio, Local School District Revenue Bonds, GO, UT, 7% due
12/01/2010 (b) $ 2,124
A NR* 1,660 Loveland, Ohio, City School District, GO, UT, 6.65% due 12/01/2015 1,827
BBB+ NR* 2,000 Lucas County, Ohio, Hospital Revenue Bonds (Flower Hospital), 6.125%
due 12/01/2013 2,009
AAA Aaa 1,500 Mahoning County, Ohio, Hospital Facilities Revenue Refunding Bonds
(YHA Inc. Project), Series A, 7% due 10/15/2014 (d) 1,675
A- A3 2,000 Moraine, Ohio, Solid Waste Disposal Revenue Bonds (General Motors
Corp. Project), AMT, 6.75% due 7/01/2014 2,312
AAA Aaa 3,000 North Canton City, Ohio, School District Improvement Bonds, GO, UT, 6.70%
due 12/01/2019 (b) 3,469
AAA NR* 995 Ohio HFA, Residential Mortgage Revenue Bonds, AMT, Series B-2, 6.70%
due 3/01/2025 (e) 1,035
Ohio HFA, S/F Mortgage Revenue Bonds, AMT (e):
AAA Aaa 1,200 RIB, Series B-4, 9.477% due 3/31/2031 (g) 1,323
AAA Aaa 35 Series B, 6.903% due 3/31/2031 37
Ohio State Air Quality Development Authority, Revenue Refunding Bonds:
NR* Baa1 1,000 (Ashland Oil Inc. Project), 6.85% due 4/01/2010 1,049
A1+ VMIG1++ 3,400 (Cincinnati Gas & Electric), VRDN, Series B, 3.75% due 9/01/2030 (a) 3,400
AA- Aa3 4,200 (Coll-Dayton Power & Light Project), Series B, 6.40% due 8/15/2027 4,443
AAA Aaa 1,505 PCR (Ohio-Edison), Series B, 7.10% due 6/01/2018 (c) 1,686
A+ A1 2,500 Ohio State Building Authority Facilities (Administration Building
Fund), Series A, 4.875% due 10/01/2010 2,412
<PAGE>
Ohio State, GO:
AA Aa 1,395 4.80% due 8/01/2013 1,339
AA Aa 1,000 College Savings, UT, 5.35% due 8/01/2013 (f) 397
AA- Aa 1,410 Ohio State Higher Educational Facilities, Revenue Refunding Bonds (Case
Western Reserve University), 6.25% due 10/01/2016 1,600
AA- A1 3,250 Ohio State Turnpike Commission, Turnpike Revenue Bonds, Series A, 5.75%
due 2/15/2024 3,324
A A2 800 Ohio State Water Development Authority, Solid Waste Disposal Revenue Bonds
(North Star BHP Steel Project-Broken Hill), AMT, 6.45% due 9/01/2020 842
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) 2,272
NR* A1 475 Wood County, Ohio, Sewer District Water Assessment Improvement Bonds,
Issue II, 6.55% due 12/01/2014 547
Puerto Rico--3.6%
A Baa1 3,100 Puerto Rico Commonwealth Aqueduct and Sewer Authority, Revenue Refunding
Bonds, 5% due 7/01/2019 2,917
Total Investments (Cost--$75,645)--98.8% 80,519
Other Assets Less Liabilities--1.2% 950
-------
Net Assets--100.0% $81,469
=======
<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, 1996.
(b)AMBAC Insured.
(c)FGIC Insured.
(d)MBIA Insured.
(e)GNMA Collateralized.
(f)Represents a zero coupon bond; the interest rate shown is the
effective yield at the time of purchase by the Fund.
(g)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, 1996.
*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, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$75,645,224) (Note 1a) $ 80,519,132
Cash 17,259
Receivables:
Interest $ 1,055,216
Beneficial interest sold 163,139 1,218,355
------------
Deferred organization expenses (Note 1e) 18,645
Prepaid registration fees and other assets (Note 1e) 14,728
------------
Total assets 81,788,119
------------
Liabilities: Payables:
Beneficial interest redeemed 99,422
Dividends to shareholders (Note 1f) 89,648
Investment adviser (Note 2) 36,531
Distributor (Note 2) 29,151 254,752
------------
Accrued expenses and other liabilities 64,528
Total liabilities 319,280
------------
Net Assets: Net assets $ 81,468,839
============
<PAGE>
Net Assets Class A Shares of beneficial interest, $.10 par value,
Consist of: unlimited number of shares authorized $ 69,420
Class B Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 626,068
Class C Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 16,002
Class D Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 28,482
Paid-in capital in excess of par 77,000,326
Accumulated realized capital losses on investments--net (Note 5) (714,342)
Accumulated distributions in excess of realized capital gains--net (431,025)
Unrealized appreciation on investments--net 4,873,908
------------
Net assets $ 81,468,839
============
Net Asset Value: Class A--Based on net assets of $7,642,999 and 694,195 shares
of beneficial interest outstanding $ 11.01
============
Class B--Based on net assets of $68,929,704 and 6,260,680 shares
of beneficial interest outstanding $ 11.01
============
Class C--Based on net assets of $1,761,651 and 160,023 shares
of beneficial interest outstanding $ 11.01
============
Class D--Based on net assets of $3,134,485 and 284,817 shares
of beneficial interest outstanding $ 11.01
============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended January 31, 1996
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 2,298,355
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 214,311
Account maintenance and distribution fees--Class B (Note 2) 165,744
Accounting services (Note 2) 33,800
Professional fees 27,320
Transfer agent fees--Class B (Note 2) 21,685
Printing and shareholder reports 11,049
Registration fees (Note 1e) 6,219
Amortization of organization expenses (Note 1e) 5,827
Account maintenance and distribution fees--Class C (Note 2) 3,707
Custodian fees 3,264
Pricing fees 2,943
Transfer agent fees--Class A (Note 2) 2,036
Trustees' fees and expenses 1,911
Account maintenance fees--Class D (Note 2) 1,486
Transfer agent fees--Class D (Note 2) 815
Transfer agent fees--Class C (Note 2) 423
Other 1,389
------------
Total expenses 503,929
------------
Investment income--net 1,794,426
------------
<PAGE>
Realized & Realized gain on investments--net 678,024
Unrealized Gain on Change in unrealized appreciation on investments--net 2,546,510
Investments--Net ------------
(Notes 1b, 1d Net Increase in Net Assets Resulting from Operations $ 5,018,960
& 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, 1996 July 31, 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 1,794,426 $ 3,552,858
Realized gain (loss) on investments--net 678,024 (1,392,365)
Change in unrealized appreciation/depreciation on investments--net 2,546,510 1,835,744
------------ ------------
Net increase in net assets resulting from operations 5,018,960 3,996,237
------------ ------------
Dividends to Investment income--net:
Shareholders Class A (187,642) (402,108)
(Note 1f): Class B (1,505,825) (3,039,531)
Class C (27,367) (15,289)
Class D (73,592) (95,930)
------------ ------------
Net decrease in net assets resulting from dividends
to shareholders (1,794,426) (3,552,858)
------------ ------------
<PAGE>
Beneficial Net increase in net assets derived from beneficial
Interest interest transactions 2,798,280 20,090
Transactions ------------ ------------
(Note 4):
Net Assets: Total increase in net assets 6,022,814 463,469
Beginning of period 75,446,025 74,982,556
------------ ------------
End of period $ 81,468,839 $ 75,446,025
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORAMTION (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 1992++ to
Jan. 31, For the Year Ended July 31, July 31,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.56 $ 10.50 $ 11.02 $ 10.56 $ 10.00
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .27 .55 .56 .58 .25
Realized and unrealized gain (loss) on
investments--net .45 .06 (.43) .49 .56
-------- -------- -------- -------- --------
Total from investment operations .72 .61 .13 1.07 .81
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.27) (.55) (.56) (.58) (.25)
Realized gain on investments--net -- -- -- (.03) --
In excess of realized gain on
investments--net -- -- (.09) -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.27) (.55) (.65) (.61) (.25)
-------- -------- -------- -------- --------
Net asset value, end of period $ 11.01 $ 10.56 $ 10.50 $ 11.02 $ 10.56
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 6.91%+++ 6.03% 1.10% 10.51% 8.21%+++
Return:** ======== ======== ======== ======== ========
Ratios to Expenses, net of reimbursement .84%* .86% .65% .51% .16%*
Average ======== ======== ======== ======== ========
Net Assets: Expenses .84%* .89% .89% 1.04% 1.36%*
======== ======== ======== ======== ========
Investment income--net 5.04%* 5.30% 5.12% 5.44% 5.75%*
======== ======== ======== ======== ========
<PAGE>
Supplemental Net assets, end of period (in thousands) $ 7,643 $ 7,270 $ 9,373 $ 8,446 $ 4,209
Data: ======== ======== ======== ======== ========
Portfolio turnover 83.64% 169.34% 44.83% 41.51% 13.21%
======== ======== ======== ======== ========
<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 Six For the Period
The following per share data and ratios have been derived Months Feb. 28,
from information provided in the financial statements. Ended 1992++ to
Jan. 31, For the Year Ended July 31, July 31,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.56 $ 10.50 $ 11.02 $ 10.56 $ 10.00
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .25 .49 .50 .52 .23
Realized and unrealized gain (loss) on
investments--net .45 .06 (.43) .49 .56
-------- -------- -------- -------- --------
Total from investment operations .70 .55 .07 1.01 .79
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.25) (.49) (.50) (.52) (.23)
Realized gain on investments--net -- -- -- (.03) --
In excess of realized gain on
investments--net -- -- (.09) -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.25) (.49) (.59) (.55) (.23)
-------- -------- -------- -------- --------
Net asset value, end of period $ 11.01 $ 10.56 $ 10.50 $ 11.02 $ 10.56
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 6.64%+++ 5.49% .59% 9.95% 7.98%+++
Return:** ======== ======== ======== ======== ========
<PAGE>
Ratios to Expenses, net of reimbursement 1.35%* 1.37% 1.16% 1.02% .67%*
Average ======== ======== ======== ======== ========
Net Assets: Expenses 1.35%* 1.40% 1.39% 1.55% 1.86%*
======== ======== ======== ======== ========
Investment income--net 4.53%* 4.79% 4.61% 4.93% 5.26%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands). $ 68,930 $ 64,068 $ 65,610 $ 53,341 $ 26,244
Data: ======== ======== ======== ======== ========
Portfolio turnover 83.64% 169.34% 44.83% 41.51% 13.21%
======== ======== ======== ======== ========
<CAPTION>
Class C Class D
For the For the For the For the
Six Period Six Period
The following per share data and ratios have been derived Months Oct. 21, Months Oct. 21,
from information provided in the financial statements. Ended 1994++ to Ended 1994++ to
Jan. 31, July 31, Jan. 31, July 31,
Increase (Decrease) in Net Asset Value: 1996 1995 1996 1995
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.56 $ 10.09 $ 10.56 $ 10.09
Operating -------- -------- -------- --------
Performance: Investment income--net .24 .37 .27 .41
Realized and unrealized gain on investments--net .45 .47 .45 .47
-------- -------- -------- --------
Total from investment operations .69 .84 .72 .88
-------- -------- -------- --------
Less dividends from investment income--net (.24) (.37) (.27) (.41)
-------- -------- -------- --------
Net asset value, end of period $ 11.01 $ 10.56 $ 11.01 $ 10.56
======== ======== ======== ========
Total Investment Based on net asset value per share 6.58%+++ 8.50%+++ 6.85%+++ 8.93%+++
Return:** ======== ======== ======== ========
Ratios to Expenses 1.45%* 1.50%* .94%* .99%*
Average Net ======== ======== ======== ========
Assets: Investment income--net 4.42%* 4.62%* 4.94%* 5.17%*
======== ======== ======== ========
<PAGE>
Supplemental Net assets, end of period (in thousands) $ 1,762 $ 874 $ 3,134 $ 3,234
Data: ======== ======== ======== ========
Portfolio turnover 83.64% 169.34% 83.64% 169.34%
======== ======== ======== ========
<FN>
*Annualized.
++Commencement of Operations.
**Total investment returns exclude the effects of sales loads.
+++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 Pricingsm 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.
<PAGE>
(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.
(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.
<PAGE>
(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"). 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 FAM during any fiscal year which will cause such expenses
to exceed expense limitations at the time of payment.
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% --
<PAGE>
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, 1996, 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 $ 62 $678
Class D $140 $662
For the six months ended January 31, 1996, MLPF&S received
contingent deferred sales charges of $65,616 and $265 relating to
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.
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, MLFDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended January 31, 1996 were $65,156,325 and
$60,954,545, respectively.
Net realized and unrealized gains (losses) as of January 31, 1996
were as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 915,007 $ 4,873,908
Short-term investments (117,170) --
Financial futures contracts (119,813) --
------------ ------------
Total $ 678,024 $ 4,873,908
============ ============
<PAGE>
As of January 31, 1996, net unrealized appreciation for Federal
income tax purposes aggregated $4,873,908, of which $4,878,976
related to appreciated securities and $5,068 related to depreciated
securities. The aggregate cost of investments at January 31, 1996
for Federal income tax purposes was $75,645,224.
4. Beneficial Interest Transactions:
Net increase in net assets derived from beneficial interest
transactions was $2,798,280 and $20,090 for the six months ended
January 31, 1996 and for the year ended July 31, 1995, respectively.
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the Six Months Dollar
Ended January 31, 1996 Shares Amount
Shares sold 71,622 $ 774,873
Shares issued to shareholders
in reinvestment of dividends 7,152 76,878
----------- ------------
Total issued 78,774 851,751
Shares redeemed (72,825) (784,699)
----------- ------------
Net increase 5,949 $ 67,052
=========== ============
Class A Shares for the Year Dollar
Ended July 31, 1995 Shares Amount
Shares sold 181,071 $ 1,870,062
Shares issued to shareholders
in reinvestment of dividends 17,661 181,209
----------- ------------
Total issued 198,732 2,051,271
Shares redeemed (403,178) (4,123,436)
----------- ------------
Net decrease (204,446) $ (2,072,165)
=========== ============
<PAGE>
Class B Shares for the
Six Months Ended Dollar
January 31, 1996 Shares Amount
Shares sold 622,629 $ 6,701,691
Shares issued to shareholders
in reinvestment of dividends 77,777 836,446
Total issued 700,406 7,538,137
Automatic conversion
of shares (3,145) (33,076)
Shares redeemed (501,964) (5,388,768)
----------- ------------
Net increase 195,297 $ 2,116,293
=========== ============
Class B Shares for the Year Dollar
Ended July 31, 1995 Shares Amount
Shares sold 1,171,885 $ 12,053,962
Shares issued to shareholders
in reinvestment of dividends 169,857 1,744,620
----------- ------------
Total issued 1,341,742 13,798,582
Automatic conversion
of shares (600) (6,397)
Shares redeemed (1,524,736) (15,586,483)
----------- ------------
Net decrease (183,594) $ (1,794,298)
=========== ============
Class C Shares for the
Six Months Ended Dollar
January 31, 1996 Shares Amount
Shares sold 84,252 $ 909,410
Shares issued to shareholders
in reinvestment of dividends 1,741 18,806
----------- ------------
Total issued 85,993 928,216
Shares redeemed (8,696) (93,351)
----------- ------------
Net increase 77,297 $ 834,865
=========== ============
<PAGE>
Class C Shares for the Period
October 21, 1994++ to Dollar
July 31, 1995 Shares Amount
Shares sold 88,400 $ 911,000
Shares issued to shareholders
in reinvestment of dividends 1,135 11,864
----------- ------------
Total issued 89,535 922,864
Shares redeemed (6,809) (71,984)
----------- ------------
Net increase 82,726 $ 850,880
=========== ============
[FN]
++Commencement of Operations.
Class D Shares for the
Six Months Ended Dollar
January 31, 1996 Shares Amount
Shares sold 23,305 $ 252,068
Automatic conversion of shares 3,145 33,076
Shares issued to shareholders
in reinvestment of dividends 1,846 19,850
----------- ------------
Total issued 28,296 304,994
Shares redeemed (49,800) (524,924)
----------- ------------
Net decrease (21,504) $ (219,930)
=========== ============
Class D Shares for the Period
October 21, 1994++ to Dollar
July 31, 1995 Shares Amount
Shares sold 303,361 $ 3,004,430
Automatic conversion of shares 600 6,397
Shares issued to shareholders
in reinvestment of dividends 3,127 32,727
----------- ------------
Total issued 307,088 3,043,554
Shares redeemed (767) (7,881)
----------- ------------
Net increase 306,321 $ 3,035,673
=========== ============
[FN]
++Commencement of Operations.
<PAGE>
5. Capital Loss Carryforward:
At July 31, 1995, the Fund had a net capital loss carryforward of
approximately $750,000, all of which expires in 2003. This amount
will be available to offset like amounts of any future taxable
gains.
