CMA
CMA CALIFORNIA
MUNICIPAL MONEY FUND
Annual Report
March 31, 1997
MERRILL LYNCH
BULL LOGO
Officers and Trustees
Arthur Zeikel--President and Trustee
Ronald W. Forbes--Trustee
Cynthia A. Montgomery--Trustee
Charles C. Reilly--Trustee
Kevin A. Ryan--Trustee
Richard R. West--Trustee
Terry K. Glenn--Executive Vice President
Vincent R. Giordano--Senior Vice President
Edward J. Andrews--Vice President
Donald C. Burke--Vice President
Peter J. Hayes--Vice President
Kenneth A. Jacob--Vice President
Steven T. Lewis--Vice President
Darrin J. SanFillippo--Vice President
Kevin A. Schiatta--Vice President
Helen Marie Sheehan--Vice President
Gerald M. Richard--Treasurer
Robert Harris--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) 221-7210*
[FN]
*For inquiries regarding your CMA account, call (800) CMA-INFO
[(800) 262-4636].
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, which will fluctuate. The Fund
seeks to maintain a consistent $1.00 net asset value per share,
although this cannot be assured. An investment in the Fund is
neither insured nor guaranteed by the US Government. Statements and
other information herein are as dated and are subject to change.
CMA California
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011
Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS:
For the year ended March 31, 1997, CMA California Municipal Money
Fund paid shareholders a net annualized yield of 2.88%*. As of March
31, 1997, the Fund's 7-day yield was 2.80%.
<PAGE>
The Environment
Stock and bond market turbulence increased during the six-month
period ended March 31, 1997. Mounting evidence of stronger-than-
expected economic growth suggested to investors that the Federal
Reserve Board would make a preemptive strike to contain inflationary
pressures. These concerns were heightened by statements made by
Federal Reserve Board Chairman Alan Greenspan, and culminated in an
announced increase in the Federal Funds rate of 0.25% to 5.5% on
March 25. As investors became concerned that this might prove to be
only the first in a series of monetary policy tightening moves,
interest rates rose and stock and bond prices declined. Following
the central bank's action, investor sentiment fluctuated from
negative to more positive, depending upon whether the latest
economic data releases were perceived to suggest an overheating or
moderating trend. It appears that clear-cut signs of continued low
inflation and moderate economic growth, as well as no further
indications of monetary policy tightening, are needed before
stability returns to the financial markets.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
Investment Outlook and Strategy
Short-term interest rates finished higher for the six-month period
ended March 31, 1997 although they experienced considerable
volatility during that time. Investors were continually trying to
gauge economic strength from conflicting data, while at the same
time reacting to contradictory statements by the Federal Reserve
Board over the direction of monetary policy. Federal Reserve Board
Chairman Alan Greenspan's concerns over "irrational exuberance" in
the stock market seemed to maintain a bias for a tightening of
monetary policy.
However, favorable inflationary data in November 1996 and December
1996 forced interest rates lower, although stronger-than-expected
economic data pushed interest rates higher in January 1997. For
example, interest rates on one-year US Treasury bills, which began
the six-month period at 5.69%, fell to as low as 5.36% by mid-
December 1996, only to rise again to 5.62% by the end of January
1997. Furthermore, yields declined approximately 20 basis points
(0.20%) in February 1997, only to rise to their highest level of the
period by March 31, 1997, closing at 6.01%. This late rise reflected
the fact that the Federal Reserve Board finally did raise the
Federal Funds rate by 25 basis points to 5.50% at its March 25, 1997
Federal Open Market Committee meeting. The interest rate hike, the
first in over two years, was intended by the Federal Reserve Board
to hinder any inflationary pressures that may be building as a
result of the tight labor markets.
<PAGE>
In our last report to shareholders, we discussed the potential
impacts of Proposition 218. Now that California voters passed on the
proposition, we are beginning to see that our expectations were
correct. Proposition 218 constrains the local governments' ability
to impose fee assessments and taxes without voter approval and was
cited as the justification for the recent downgrade of several
California municipalities, most notably the cities of Los Angeles,
Sacramento and San Diego. The significant loss of financial
flexibility relating to revenue increases can be expected to
pressure general funds operation of many California issuers. It is
unclear what type of impact Proposition 218 will have on other bond
security sources such as Mello Roos and other special assessment
bonds. Proposition 218 exacerbates burdens previously imposed by
Proposition 13 and Proposition 92, which placed constitutional
restrictions on municipal finances and borrowing. In the upcoming
quarter, the state and its municipalities will begin to enter the
market to finance their fiscal year 1998 budgetary needs. The Fund's
credit analysts will continue to monitor the financial status of
each of the municipalities, particularly as the municipalities
formulate their final budgets, in an effort to accurately assess the
impact of Proposition 218 on current and future portfolio holdings.
In 1996, the state of California achieved two notable economic
milestones. The economy fully recovered from the drastic job losses
suffered during the early 1990's recession by regaining over 300,000
jobs. The rebound is also marked by the increased diversification of
the state's employment base. For example, since 1990, aerospace
employment was reduced by more than half and military base closings
cut Federal civilian employment in California by 33%. These
industries were replaced by growth in the entertainment, computer
software and multimedia industries, which are an extension of
existing entertainment and electronics industries. Governor Wilson's
fiscal 1998 budget attempts to continue the improvement of the
business environment within the state by proposing a 10% reduction
in the corporate tax rate over the next two years. In addition, the
Governor is attempting to strengthen export relationships with the
establishment of foreign trade offices in Asia and South America.
The state of California ends its current fiscal year on June 30,
1997 and may enter the market shortly thereafter with its annual
note financing.
Assets of the Fund rose close to 10% in the last twelve months, and
at March 31, 1997 stood at $1.55 billion. Assets of the California
tax-exempt fund industry increased by $2.8 billion in the same
period, an increase of 15%. This compares with an increase in total
tax-exempt money fund industry assets of 8.7%. In general,
throughout most of the Fund's recent fiscal year we maintained a
somewhat conservative average portfolio maturity in the 40-day range
because we appeared to be involved in one of the most sustained
economic expansions in recent history and this raised the
possibility that the Federal Reserve Board would need to intervene
in the credit markets and raise short-term interest rates. Our
portfolio holdings were most heavily weighted in tax-exempt
commercial paper and variable rate demand notes which provide
liquidity.
<PAGE>
In the six months ended March 31, 1997, we further reduced our
average portfolio maturity, since economic data confirmed continued
economic strength and we maintained an average portfolio maturity of
33 days. As anticipated, the Federal Reserve Board raised short-term
interest rates on March 25, 1997, and we expect that there may be
additional interest rate increases later in the year. Short-term
interest rates will be further pressured in mid-April and early May
in the tax-exempt market during "tax time," a period in which funds
traditionally see redemptions associated with the payment of income
taxes. We believe interest rates on variable rate demand notes may
sustain a prolonged increase as the result of these two factors, and
this will serve as further incentive to maintain a short average
portfolio maturity in the upcoming months. Our portfolio composition
in the past year provided a strong performance for our shareholders
and leaves us well-positioned for the upcoming note season.
As we enter the upcoming months, we will continue to monitor
economic data in an attempt to accurately measure the strength of
the economy and the corresponding impact on interest rates. When we
believe it is appropriate, we will extend our average portfolio
maturity with the purchase of fixed-rate notes as the state and its
municipalities enter the note market with their seasonal issuance.
In Conclusion
We appreciate your continued interest in CMA California Municipal
Money Fund, and we look forward to continuing to serve your
investment needs in the future.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Helen M. Sheehan)
Helen M. Sheehan
Vice President and Portfolio Manager
<PAGE>
April 30, 1997
IMPORTANT TAX INFORMATION
All of the net investment income distributions paid daily by CMA
California Municipal Money Fund of CMA Multi-State Municipal Series
Trust during its taxable year ended March 31, 1997 qualify as tax-
exempt interest dividends for Federal income tax purposes.
Additionally, there were no capital gains distributed by the Fund
during the year.
Please retain this information for your records.
Portfolio Abbreviations for CMA California Municipal Money Fund
ACES SM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
CP Commercial Paper
GO General Obligation Bonds
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
TRAN Tax Revenue Anticipation Notes
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
California-- $ 13,000 Abag Finance Authority for Nonprofit Corporations, California
89.6% (University of California Project), VRDN, 3.30% due 12/01/2001 (a) $13,000
California Health Facilities Financing Authority Revenue Bonds, VRDN (a):
2,500 (Pooled Loan Program), Series A, 3.30% due 6/01/2007 2,500
7,100 (Scripps Memorial Hospital), Series A, 3.30% due 12/01/2005 (b) 7,100
8,530 (Scripps Memorial Hospital), Series B, 3.30% due 12/01/2015 (b) 8,530
California Pollution Control Financing Authority, PCR, Refunding
(Pacific Gas and Electric):
19,000 CP, Series A, 3.40% due 5/06/1997 19,000
4,500 CP, Series D, 3.40% due 5/07/1997 4,500
30,000 VRDN, AMT, Series B, 3.35% due 12/01/2016 (a) 30,000
California Pollution Control Financing Authority, PCR (Southern California
Edison):
14,700 CP, Series D, 3.20% due 5/07/1997 14,700
1,000 CP, Series D, 3.40% due 5/07/1997 1,000
11,100 Series D, 3.45% due 2/28/2008 11,100
California Pollution Control Financing Authority, Resource Recovery
Revenue Bonds, VRDN, AMT (a):
21,200 (Atlantic Richfield Company Project), Series A, 3.60% due 12/01/2024 21,200
17,900 (Delano Project), 3.70% due 8/01/2019 17,900
22,800 (Delano Project), Series 1991, 3.70% due 8/01/2019 22,800
10,300 (Honey Lake Power Project), 3.70% due 9/01/2018 10,300
15,400 Refunding (Ultra Power Malaga Project), Series A, 3.70% due 4/01/2017 15,400
5,300 Refunding (Ultra Power Malaga Project), Series B, 3.70% due 4/01/2017 5,300
10,400 Refunding (Ultra Power Rocklin Project), Series A, 3.70% due 6/01/2017 10,400
7,700 Refunding (Ultra Power Rocklin Project), Series B, 3.70% due 6/01/2017 7,700
California Pollution Control Financing Authority, Solid Waste Disposal
Revenue Bonds (Shell Oil Co.--Martinez Project), VRDN, AMT (a):
24,000 Series A, 3.55% due 10/01/2024 24,000
8,300 Series B, 3.55% due 12/01/2024 8,300
25,000 California Public Capital Improvements Financing Authority Revenue Bonds
(Pooled Loan Project), Series D, 3.55% due 6/15/1997 25,000
6,200 California State, CP, GO, 3.20% due 5/07/1997 6,200
5,000 California State Economic Development Financing Authority, IDR (Kuhnash
Properties/Arkay Project), VRDN, AMT, 3.75% due 4/01/2017 (a) 5,000
15,000 California State Floating Rate Receipts, GO, VRDN, Series SG-86, 3.50% due
8/01/2015 (a)(c) 15,000
45,520 California State, RAN, Series A, 4.50% due 6/30/1997 45,586
California Statewide Community Development Authority, M/F Revenue Bonds
VRDN, AMT (a)(f):
10,000 (Canyon Creek Apartments), Series C, 3.30% due 6/15/2025 10,000
4,200 (Kimberly Woods), Series B, AMT, 3.30% due 6/15/2025 4,200
</TABLE>
<PAGE>
<TABLE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
California $ 9,400 California Statewide Community Development Authority, Solid Waste
(continued) Facility Revenue Bonds (Chevron United States Inc. Project), VRDN, AMT,
3.55% due 12/15/2024 (a) $ 9,400
Chula Vista, California, IDR (San Diego Gas & Electric Co.), CP, AMT,
Series D:
20,000 3.45% due 5/01/1997 20,000
20,000 3.30% due 5/07/1997 20,000
10,000 3.45% due 5/09/1997 10,000
10,000 3.45% due 5/12/1997 10,000
2,200 Contra Costa County, California, Housing Authority, M/F Mortgage Revenue
Bonds (Lakeshore Apartments), VRDN, Series A, 3.20% due 11/15/2012 (a)(f) 2,200
3,200 Contra Costa County, California, TRAN, 4.50% due 7/03/1997 3,204
Eagle Tax-Exempt Trust, VRDN (a):
9,500 3.51% due 2/01/2006 9,500
9,300 3.51% due 11/01/2020 9,300
17,100 Series 1994 C-6, 3.51% due 8/01/2017 17,100
14,800 Series 1994 C-7, 3.51% due 8/01/2023 14,800
East Bay, California, Municipal Utility District Wastewater Treatment System
Revenue Bonds, CP:
18,600 3.15% due 4/11/1997 18,600
13,000 3.50% due 5/09/1997 13,000
20,000 Floating Rate Trust Certificates, VRDN, Series 1992 H, 3.80% due
10/02/1998 (a)(d) 20,000
7,050 Fontana, California, M/F Housing Revenue Bonds (Springtime Apartments
Project), VRDN, Series A, 3.35% due 12/01/2016 (a) 7,050
Golden Empire Schools Financing Authority, California, Revenue Refunding
Bonds, VRDN (a):
8,900 (Golden Empire Project), Series B, 3.35% due 12/01/2024 8,900
11,300 (Kern High School District), Series A, 3.35% due 12/01/2024 11,300
10,000 Kern County, California, Superintendent of Schools COP, VRDN, Series A,
3.50% due 12/01/2021 (a) 10,000
18,985 Loma Linda, California, M/F Housing Revenue Bonds (Loma Linda Springs
Apartments), VRDN, 3.30% due 7/01/2019 (a) 18,985
Long Beach, California, Harbor Revenue Bonds, CP, AMT, Series A:
17,000 3.45% due 5/01/1997 17,000
19,550 3.45% due 5/07/1997 19,550
16,500 3.45% due 5/08/1997 16,500
3,000 Los Angeles, California, Department of Airports, Airport Revenue Bonds,
VRDN, AMT, Series SG-61, 3.50% due 5/15/2020 (a)(c) 3,000
<PAGE> 10,000 Los Angeles, California, Department of Water and Power Revenue Bonds, CP,
3.35% due 5/09/1997 10,000
5,000 Los Angeles, California, Harbor Department Revenue Bonds, VRDN, AMT, 3.50%
due 8/01/2026 (a)(b) 5,000
39,200 Los Angeles, California, M/F Housing Revenue Bonds (Casden Project),
VRDN, Series K, 3.10% due 7/01/2010 (a) 39,200
Los Angeles, California, M/F Housing Revenue Refunding Bonds, VRDN (a):
12,660 (Canyon Creek Project), Series C, 3.35% due 12/01/2010 12,660
8,340 (Mountainback Project), Series B, 3.35% due 12/01/2010 8,340
14,500 Los Angeles, California, Metropolitan Transportation Authority Revenue
Bonds, CP, 3.40% due 5/06/1997 14,500
3,500 Los Angeles, California, TRAN, UT, 4.50% due 6/19/1997 3,504
11,000 Los Angeles, California, Unified School District, TRAN, UT, Series A, 4.50%
due 6/30/1997 11,018
25,000 Los Angeles County, California, Local Educational Agency, COP, TRAN,
Series A, 4.75% due 6/30/1997 (e) 25,051
11,300 Los Angeles County, California, Metropolitan Transportation Authority Revenue
Bonds, Adjusted General Municipal Trust Receipts, VRDN, Series SGB-2, 3.40%
due 7/01/2021 (a) 11,300
</TABLE>
<TABLE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 (CONTINUED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
California Los Angeles County, California, Metropolitan Transportation Authority,
(continued) Sales Tax Revenue Bonds, VRDN (a):
$ 1,000 Refunding (Proposition C-Second Senior), Series A, 3.20% due 7/01/2020 (b) $ 1,000
12,530 Series SG-46, 3.45% due 7/01/2017 (d) 12,530
23,820 Series SG-55, 3.45% due 7/01/2018 (d) 23,820
39,330 Los Angeles County, California, TRAN, Series A, 4.50% due 6/30/1997 39,396
45,000 Marin County, California, TRAN, 4.75% due 7/01/1997 45,107
Metropolitan Water District (Southern California), CP:
4,400 3.20% due 5/06/1997 4,400
1,300 Series B, 3.15% due 4/10/1997 1,300
7,200 Series B, 3.15% due 4/11/1997 7,200
9,100 Series B, 3.35% due 5/08/1997 9,100
20,300 Series B, 3.40% due 5/08/1997 20,300
14,800 Northern California Power Agency, Public Power Revenue Refunding Bonds
(Geothermal Project No. 3), VRDN, Series A, 3.20% due 7/01/2005 (a)(d) 14,800
Palm Springs, California, Community Redevelopment Agency, COP, VRDN (a):
2,200 Headquarters Hotel 2, 3.10% due 12/01/2014 2,200
2,500 Headquarters Hotel 3, 3.10% due 12/01/2014 2,500
1,500 Headquarters Hotel 4, 3.10% due 12/01/2014 1,500
<PAGE> 1,600 Headquarters Hotel 5, 3.10% due 12/01/2014 1,600
1,600 Headquarters Hotel 7, 3.10% due 12/01/2014 1,600
3,600 Headquarters Hotel 8, 3.10% due 12/01/2014 3,600
2,700 Headquarters Hotel 9, 3.10% due 12/01/2014 2,700
1,400 Headquarters Hotel 10, 3.10% due 12/01/2014 1,400
11,470 Pittsburg, California, Mortgage Obligation Bonds, VRDN, Series A, 3.45%
due 12/30/2022 (a) 11,470
7,790 Redlands, California, COP, Refunding (Sewer Facilities Project),
VRDN, 3.30% due 9/01/2017 (a)(c) 7,790
Redlands, California, M/F Housing Revenue Bonds, VRDN, Series A (a):
2,900 (Orange Village Apartments Project), AMT, 3.35% due 8/01/2018 2,900
12,500 Refunding (Parkview Terrace Project), 3.25% due 2/01/2016 12,500
Regents of the University of California, Series B, CP:
11,500 3.05% due 4/10/1997 11,500
8,000 3.45% due 4/11/1997 8,000
10,000 3.40% due 5/07/1997 10,000
23,000 3.35% due 5/09/1997 23,000
20,000 3.50% due 7/18/1997 20,000
33,240 Riverside County, California, COP (Riverside County Public Facilities),
ACES, Series A, 3.50% due 12/01/2015 (a) 33,240
Riverside County, California, Housing Authority, M/F Mortgage Revenue
Bonds, VRDN (a):
3,650 (Emeritus Park), Series B, 3.20% due 8/01/2018 3,650
5,900 (Woodcreek Village), Series D, 3.20% due 8/01/2018 5,900
13,800 Roseville, California, Finance Authority, Hospital Lease Revenue Bonds
(Roseville Hospital), VRDN, Series A, 3.25% due 10/01/2014 (a) 13,800
Sacramento, California, Municipal Utility District, Electric Revenue Bonds:
5,000 CP, 3.40% due 4/02/1997 5,000
5,760 VRDN, Series SGB-4, 3.40% due 8/15/2021 (a) 5,760
3,700 San Bernardino, California, M/F Housing Revenue Refunding Bonds
(Village Crossing), Series A, VRDN, 3.30% due 2/01/2027 (a) 3,700
6,000 San Bernardino County, California, Residential Mortgage Revenue Refunding
Bonds (Ramona Garden), VRDN, Series A, 3.30% due 2/01/2017 (a) 6,000
15,000 San Bernardino County, California, TRAN, 4.50% due 6/30/1997 15,022
4,050 San Diego, California, IDR, Refunding (San Diego Gas & Electric), CP,
Series A, 3.40% due 5/09/1997 4,050
</TABLE>
<PAGE>
<TABLE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 (CONCLUDED) (IN THOUSANDS)
<CAPTION>
Face Value
State Amount Issue (Note 1a)
<S> <C> <S> <C>
California San Diego, California, M/F Housing Authority Revenue Bonds, VRDN (a):
(concluded) $ 2,330 (Country Hills), Series A, 3.20% due 8/15/2013 $ 2,330
7,740 (La Cima Apartments), Series K, 3.25% due 12/01/2008 7,740
17,250 (Nobel Court Apartments), 3.25% due 12/01/2008 17,250
4,000 San Diego, California, Sewer Revenue Bonds, VRDN, Series SG-14, 3.45%
due 5/15/2020 (a)(b) 4,000
4,000 San Diego, California, Unified School District, TRAN, 4.75% due 10/01/1997 4,020
17,500 San Diego County, California, TRAN, 4.375% due 9/30/1997 17,559
3,645 San Francisco, California, City and County Airports Commission (San Francisco
International Airport), VRDN, Series SG-88, 3.45% due 5/01/2021 (a)(c) 3,645
San Jose, California, M/F Housing Revenue Bonds, VRDN, Series A (a):
13,000 (Siena at Renaissance), AMT, 3.35% due 12/01/2029 13,000
6,360 (Timberwood), 3.25% due 2/01/2020 6,360
2,000 San Jose--Santa Clara, California, Water Financing Authority, Sewer Revenue
Bonds, VRDN, Series SG-49, 3.45% due 11/15/2020 (a)(c) 2,000
10,000 San Leandro, California, M/F Revenue Bonds (Parkside Commons), VRDN,
Series A, 3.20% due 7/15/2018 (a)(f) 10,000
9,400 Santa Clara County, California, M/F Housing Authority, Revenue
Refunding Bonds (Benton Park Central Apartments), VRDN, Series A,
3.25% due 12/15/2025 (a) 9,400
27,000 Santa Clara County, California, TRAN, 4.50% due 8/01/1997 27,076
5,325 Santa Rosa, California, M/F Housing Revenue Bonds (Oak Creek Apartments
Project), VRDN, AMT, Series A, 3.35% due 6/01/2018 (a) 5,325
3,675 Simi Valley, California, Community Redevelopment Agency, M/F Housing Revenue
Bonds (Ashlee Manor Project), VRDN, AMT, Series A, 3.35% due 10/01/2017 (a) 3,675
Southern California Public Power Authority, Revenue Refunding Bonds,
VRDN (a)(d):
7,700 Power Project (Palo Verde Project), Series B, 3.20% due 7/01/2009 7,700
20,500 Power Project (Palo Verde Project), Series C, 3.20% due 7/01/2017 20,500
13,500 Transmission Project (Southern Transmission Project), 3.20% due 7/01/2019 13,500
State of California, CP:
7,000 3.45% due 4/01/1997 7,000
6,000 3.40% due 4/30/1997 6,000
5,000 3.45% due 5/09/1997 5,000
14,000 Ventura County, California, TRAN, UT, 4.75% due 7/02/1997 14,035
Puerto Rico-- Puerto Rico Commonwealth, Government Development Bank
9.7% Revenue Bonds, CP:
1,000 3.60% due 4/01/1997 1,000
6,530 3.50% due 4/11/1997 6,530
4,000 3.40% due 4/24/1997 4,000
20,000 3.40% due 5/01/1997 20,000
14,200 3.40% due 5/07/1997 14,200
11,400 3.45% due 5/08/1997 11,400
9,750 3.55% due 5/09/1997 9,750
36,200 3.45% due 5/12/1997 36,200
49,400 Puerto Rico Commonwealth, TRAN, Series 1997-A, 4% due 7/30/1997 49,484
<PAGE>
Total Investments (Cost--$1,554,692)--99.3% 1,554,692
Other Assets Less Liabilities--0.7% 11,110
-----------
Net Assets--100.0% $ 1,565,802
===========
<FN>
(a)The interest rate is subject to change periodically based
on certain indexes. The interest rate shown is the interest
rate in effect at March 31, 1997.
(b)MBIA Insured.
(c)FGIC Insured.
(d)AMBAC Insured.
(e)FSA Insured.
(f)FNMA Collateralized.
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 1997
<S> <C> <C>
Assets:
Investments, at value (identified cost--$1,554,691,971*) (Note 1a) $ 1,554,691,971
Cash 89,127
Interest receivable 13,287,828
Prepaid registration fees and other assets (Note 1d) 31,195
---------------
Total assets 1,568,100,121
---------------
Liabilities:
Payables:
Securities purchased $ 1,007,770
Investment adviser (Note 2) 578,966
Distributor (Note 2) 462,707
Beneficial interest redeemed 44 2,049,487
---------------
Accrued expenses and other liabilities 248,365
---------------
Total liabilities 2,297,852
---------------
Net Assets $ 1,565,802,269
===============
<PAGE>
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number
of shares authorized $ 156,671,908
Paid-in capital in excess of par 1,410,045,515
Accumulated realized capital losses--net (Note 4) (915,154)
---------------
Net Assets--Equivalent to $1.00 per share based on 1,566,719,083 shares of
beneficial interest outstanding $ 1,565,802,269
===============
<FN>
*Cost for Federal income tax purposes was $1,554,697,830. As of
March 31, 1997, net unrealized depreciation for Federal income tax
purposes amounted to $5,859, all of which related to depreciated
securities.
See Notes to Financial Statements.
</TABLE>
<TABLE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
STATEMENT OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 1997
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 51,053,792
Expenses:
Investment advisory fees (Note 2) $ 6,413,612
Distribution fees (Note 2) 1,819,326
Transfer agent fees (Note 2) 196,356
Registration fees (Note 1d) 138,185
Accounting services (Note 2) 127,776
Custodian fees 80,801
Professional fees 57,223
Printing and shareholder reports 56,401
Trustees' fees and expenses 13,262
Pricing fees 11,874
Other 18,388
---------------
Total expenses 8,933,204
---------------
Investment income--net 42,120,588
Realized Gain on Investments--Net (Note 1c) 26,624
---------------
Net Increase in Net Assets Resulting from Operations $ 42,147,212
===============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Year
Ended March 31,
1997 1996
Increase (Decrease) in Net Assets:
<S> <C> <C>
Operations:
Investment income--net $ 42,120,588 $ 38,986,274
Realized gain on investments--net 26,624 14,898
--------------- ---------------
Net increase in net assets resulting from operations 42,147,212 39,001,172
--------------- ---------------
Dividends to Shareholders (Note 1e):
Investment income--net (42,120,540) (38,963,124)
--------------- ---------------
Net decrease in net assets resulting from dividends to shareholders (42,120,540) (38,963,124)
--------------- ---------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 6,159,698,384 4,504,776,418
Net asset value of shares issued to shareholders in reinvestment
of dividends (Note 1e) 42,121,016 38,962,811
--------------- ---------------
6,201,819,400 4,543,739,229
Cost of shares redeemed (6,057,183,986) (4,290,871,513)
--------------- ---------------
Net increase in net assets derived from beneficial
interest transactions 144,635,414 252,867,716
--------------- ---------------
Net Assets:
Total increase in net assets 144,662,086 252,905,764
Beginning of year 1,421,140,183 1,168,234,419
--------------- ---------------
End of year $ 1,565,802,269 $ 1,421,140,183
=============== ===============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
FINANCIAL HIGHLIGHTS
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended March 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Investment income--net .03 .03 .03 .02 .02
---------- ---------- ---------- ---------- ----------
Total from investment operations .03 .03 .03 .02 .02
---------- ---------- ---------- ---------- ----------
Less dividends from investment income--net (.03) (.03) (.03) (.02) (.02)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Investment Return 2.88% 3.16% 2.66% 1.93% 2.25%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses .60% .64% .63% .62% .63%
========== ========== ========== ========== ==========
Investment income--net 2.85% 3.11% 2.62% 1.91% 2.22%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of year (in thousands) $1,565,802 $1,421,140 $1,168,234 $1,225,160 $1,014,800
========== ========== ========== ========== ==========
See Notes to Financial Statements.
</TABLE>
CMA CALIFORNIA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA California Municipal Money Fund (the "Fund") is part of CMA
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 following
is a summary of significant accounting policies followed by the
Fund.
<PAGE>
(a) Valuation of investments--Investments are valued at amortized
cost, which approximates market value. For the purpose of valuation,
the maturity of a variable rate demand instrument is deemed to be
the next coupon date on which the interest rate is to be adjusted.
In the case of a floating rate instrument, the remaining maturity is
the demand notice payment period.
(b) 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.
(c) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization of
premium and discount) is recognized on the accrual basis. Realized
gains and losses on security transactions are determined on the
identified cost basis.
(d) Prepaid registration fees--Prepaid registration fees are charged
to expense as the related shares are issued.
(e) Dividends and distributions to shareholders--The Fund declares
dividends daily and reinvests daily such dividends (net of non-
resident alien tax and back-up withholding tax withheld) in
additional fund shares at net asset value. Dividends are declared
from the total of net investment income, excluding discounts earned
other than original issue discounts. Net realized capital gains, if
any, are normally distributed annually after deducting prior years'
loss carryforward. The Fund may distribute capital gains more
frequently than annually in order to maintain the Fund's net asset
value at $1.00 per share.
(f) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences of $48
have been reclassified between accumulated net realized capital
losses and undistributed net investment income. These
reclassifications have no effect on net assets or net asset value
per share.
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.
<PAGE>
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets, at the following annual rates: 0.50%
of the first $500 million of average daily net assets; 0.425% of
average daily net assets in excess of $500 million but not exceeding
$1 billion, and 0.375% of average daily net assets in excess of $1
billion.
Pursuant to the Distribution and Shareholder Servicing Plan in
compliance with Rule 12b-1 under the Investment Company Act of 1940,
Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S") receives a
distribution fee from the Fund at the end of each month at the
annual rate of 0.125% of average daily net assets of the Fund. The
distribution fee is to compensate MLPF&S financial consultants and
other directly involved branch office personnel for selling shares
of the Fund and for providing direct personal services to
shareholders. The distribution fee is not compensation for the
administrative and operational services rendered to the Fund by
MLPF&S in processing share orders and administering shareholder
accounts.
CMA CALIFORNIA MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
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, MLFDS, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares purchased and redeemed during the period
corresponds to the amounts included in the Statements of Changes in
Net Assets for net proceeds from sale of shares and cost of shares
redeemed, respectively, since shares are recorded at $1.00 per
share.
4. Capital Loss Carryforward:
At March 31, 1997, the Fund had a net capital loss carryforward of
approximately $909,000, of which $433,000 expires in 2002 and
$476,000 expires in 2003. This amount will be available to offset a
like amount of any future taxable gains.
<PAGE>
<AUDIT-REPORT>
CMA CALIFORNIA MUNICIPAL MONEY FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
CMA California Municipal Money Fund of
CMA Multi-State Municipal Series Trust:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of CMA
California Municipal Money Fund of CMA Multi-State Municipal Series
Trust as of March 31, 1997, the related statements of operations for
the year then ended and changes in net assets for each of the years
in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended. These
financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at March
31, 1997 by correspondence with the custodian and broker. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
CMA California Municipal Money Fund of CMA Multi-State Municipal
Series Trust as of March 31, 1997, the results of its operations,
the changes in its net assets, and the financial highlights for the
respective stated periods in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
May 2, 1997
</AUDIT-REPORT>
<PAGE>
