MERRILL LYNCH
NEW JERSEY
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 New Jersey
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
The three-month period ended January 31, 1995 saw continued
volatility in the municipal marketplace. The Federal Reserve Board
resumed its struggle to slow the economy and prevent inflation by
raising short-term interest rates for the sixth time in the past 11
months. The 75 basis point increase in the Federal Funds rate in
November gave investors confidence that the Federal Reserve Board
would succeed in controlling inflation, and ignited a bond rally
that brought long-term municipal yields down approximately 60 basis
points by quarter-end.
Our portfolio decisions throughout the January quarter were guided
by a cautious posture because we believe that more Federal Reserve
Board monetary policy tightening will be necessary to halt the
forward momentum of the US economy. When the economy begins to show
clear signs that tighter monetary policy is having the desired
impact, our investment strategy is expected to become more
aggressive. Until such time, our emphasis will be placed on seeking
an attractive level of tax-exempt income, call protection, and
credit quality during an uncertain period for fixed-income
securities.
<PAGE>
In Conclusion
We appreciate your ongoing interest in Merrill Lynch New Jersey
Municipal Bond Fund, and we look forward to assisting you with your
financial needs in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
March 3, 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.
*Class D Shares incur a maximum initial sales charge of 4% and an
account maintenance fee of 0.10% (but no distribution fee.)
<PAGE>
Performance data for the Fund's Class A and Class B Shares are
presented in the "Peformance Summary," "Recent Performance Results"
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 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* $10.37 $10.20 $11.49 -9.75% +1.67%
Class B Shares* 10.37 10.20 11.49 -9.75 +1.67
Class C Shares* 10.37 10.19 10.34 +0.29 +1.77
Class D Shares* 10.37 10.20 10.34 +0.29 +1.67
Class A Shares--Total Return* -4.63(1) +3.17(2)
Class B Shares--Total Return* -5.11(3) +3.04(4)
Class C Shares--Total Return* +1.72(5) +3.10(6)
Class D Shares--Total Return* +1.86(7) +3.14(8)
Class A Shares--Standardized 30-day Yield 5.43%
Class B Shares--Standardized 30-day Yield 5.15%
Class C Shares--Standardized 30-day Yield 5.04%
Class D Shares--Standardized 30-day Yield 5.34%
<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 $0.578 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.148 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.525 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.135 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.133 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.132 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.147 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.145 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**
<C> <C> <C> <C> <C> <C>
8/31/90--12/31/90 $10.00 $10.17 -- $0.236 + 4.10%
1991 10.17 10.57 $0.007 0.704 +11.27
1992 10.57 10.78 0.036 0.649 + 8.74
1993 10.78 11.39 0.015 0.635 +11.94
1994 11.39 10.15 -- 0.579 - 5.86
1/1/95--1/31/95 10.15 10.37 -- 0.034 + 2.61
------ ------
Total $0.058 Total $2.837
Cumulative total return as of 1/31/95: +36.19%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date, and do not
include sales charge; results would be lower if sales charge was
included.
</TABLE>
<PAGE>
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
8/31/90--12/31/90 $10.00 $10.17 -- $0.219 + 3.92%
1991 10.17 10.57 $0.007 0.651 +10.72
1992 10.57 10.79 0.036 0.595 + 8.29
1993 10.79 11.39 0.015 0.579 +11.27
1994 11.39 10.15 -- 0.526 - 6.33
1/1/95--1/31/95 10.15 10.37 -- 0.031 + 2.58
------ ------
Total $0.058 Total $2.601
Cumulative total return as of 1/31/95: +33.20%**
<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 -5.86% -9.62%
Inception (8/31/90)
through 12/31/94 +6.75 +5.75
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/94 -6.33% -9.89%
Inception (8/31/90)
through 12/31/94 +6.21 +6.21
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced
to 0% after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94)
through 12/31/94 -0.83% -1.81%
[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 -0.72% -4.69%
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<PAGE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of Merrill Lynch New Jersey
Municipal Bond Fund's portfolio holdings in the Schedule
of Investments, we have abbreviated the names of many
of the securities according to the list at right.
AMT Alternative Minimum Tax (subject to)
EDA Economic Development Authority
GO General Obligation Bonds
M/F Multi-Family
TRAN Tax Revenue Anticipation Notes
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey--94.8%
<S> <S> <C> <S> <C>
A- NR* $ 1,000 Atlantic City, New Jersey, Municipal Utilities Authority, Water Systems
Revenue Bonds, 7.75% due 5/01/2000 (g) $ 1,114
Atlantic County, New Jersey, Utilities Authority, Solid Waste Revenue Bonds:
NR* Baa 2,800 7% due 3/01/2008 2,776
NR* Baa 1,900 7.125% due 3/01/2016 1,864
AAA Aaa 1,500 Camden County, New Jersey, Municipal Utilities Authority, Sewer Revenue
Bonds, 8.125% due 12/01/2007 (f) 1,627
BBB+ Baa1 4,750 Camden County, New Jersey, Pollution Control Financing Authority, Solid
Waste Resource Recovery Revenue Bonds, Series D, 7.25% due 12/01/2010 4,718
Cape May County, New Jersey, Industrial Pollution Control Financing
Authority Revenue Bonds (Atlantic City Electric Company Project), Series A (d):
AAA Aaa 6,000 AMT, 7.20% due 11/01/2029 6,300
AAA Aaa 4,500 Refunding, 6.80% due 3/01/2021 4,859
NR* A 500 Delaware River Joint Toll Bridge Commission, Pennsylvania, Bridge Revenue
Bonds, 7.875% due 7/01/1998 (g) 546
<PAGE>
AAA Aaa 4,000 Essex County, New Jersey, Improvement Authority Revenue Bonds (Irvington
Township School District), 6.625% due 10/01/2002 (g)(i) 4,331
AA A 3,200 Jersey City, New Jersey, School GO, UT, 6.65% due 2/15/2017 3,263
NR* Baa1 3,000 Mercer County, New Jersey, Improvement Authority, Revenue Refunding Bonds
(Solid Waste), AMT, Series B, 6.80% due 4/01/2005 2,942
NR* NR* 5,750 Middlesex County, New Jersey, Pollution Control Authority, Revenue Refunding
Bonds (Amerada Hess), 6.875% due 12/01/2022 5,710
AAA Aaa 1,100 Middlesex County, New Jersey, Utilities Authority, Sewer Revenue Bonds,
Series A, 6.50% due 9/15/2011 (f) 1,136
AAA Aaa 2,000 Monmouth County, New Jersey, Improvement Authority, Sewer Facilities Revenue
Refunding Bonds, 6.75% due 2/01/2001 (d)(g) 2,161
NR* VMIG1++ 300 New Jersey, EDA, Dock Facility Revenue Refunding Bonds (Bayonne International
Matex Tank Terminal Project), VRDN, Series A, 3.90% due 12/01/2027 (a) 300
BB+ Baa2 2,000 New Jersey, EDA, Economic Development Revenue Bonds (American Airlines Inc.
Project), AMT, 7.10% due 11/01/2031 1,929
A A1 4,500 New Jersey, EDA, Lease Rental Revenue Bonds (Liberty State Park Project),
6.80% due 3/15/2022 4,536
AAA Aaa 8,750 New Jersey, EDA, Natural Gas Facilities, Revenue Refunding Bonds (NUI Corp.),
Series A, 6.35% due 10/01/2022 (c) 8,770
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey (continued)
<S> <S> <C> <S> <C>
AAA Aaa $2,500 New Jersey, EDA, Revenue Refunding Bonds (RWJ Health Care Corporation),
6.50% due 7/01/2024 (i) $2,525
New Jersey Health Care Facilities Financing Authority Revenue Bonds:
NR* Baa1 2,725 (Deborah Heart and Lung Center), 6.30% due 7/01/2023 (j) 2,482
BBB+ NR* 1,000 (East Orange General Hospital), Series B, 7.75% due 7/01/2020 l,032
AAA Aaa 2,910 (General Hospital Center At Passaic), 6.75% due 7/01/2019 (i) 2,980
A- NR* 1,665 (Pascack Valley Hospital Association), 6.90% due 7/01/2021 1,672
A- A 2,000 Refunding (Atlantic City Medical Center), Series C, 6.80% due 7/01/2011 2,028
BBB Baa 4,980 Refunding (Englewood Hospital & Medical Center), 6.75% due 7/01/2024 4,713
AAA Aaa 2,000 Refunding (Hackensack Medical Center), 6.625% due 7/01/2017 (f) 2,043
AAA Aaa 7,745 Refunding (Jersey Shore Medical Center), 6.75% due 7/01/2019 (c) 8,006
BBB- Baa 2,950 (Saint Elizabeth Hospital), Series B, 8.25% due 7/01/2020 3,120
AAA Aaa 670 (Saint Peter's Medical Center), Series C, 8.60% due 7/01/1997 (d)(g) 731
AAA Aaa 130 (Saint Peter's Medical Center), Series C, 8.60% due 7/01/2017 (d) 141
<PAGE>
New Jersey Sports and Exposition Authority Revenue Bonds (State Contract):
A+ Aa 3,000 Series A, 6.50% due 3/01/2019 3,024
A1 VMIG1++ 5,200 VRDN, Series C, 3.50% due 9/01/2024 (a)(d) 5,200
New Jersey State Educational Facilities Authority Revenue Bonds:
AAA Aaa 5,150 (Jersey City State College), Series D, 6.125% due 7/01/2022 (d) 5,079
AAA Aaa 1,805 (Rowan College), Series A, 5.75% due 7/01/2023 (c) 1,677
New Jersey State Educational Facilities Authority Revenue Bonds (Seton Hall
University Project):
AAA Aaa 2,000 Series C, 6.85% due 7/01/2019 (e) 2,064
BBB Baa1 500 Series D, 7% due 7/01/2021 509
AAA Aaa 1,000 New Jersey State Educational Facilities Authority, Revenue Refunding Bonds
(Rider College), Series D, 6.20% due 7/01/2017 (c) 999
New Jersey State Highway Authority, General Revenue Bonds
(Garden State Parkway):
AA- Aaa 1,000 7.25% due 1/01/1999 (g) 1,082
AAA Aaa 5,000 6.15% due 1/01/2007 (c) 5,141
New Jersey State Housing and Mortgage Finance Agency, Home Buyer Revenue
Bonds (d):
AAA Aaa 895 AMT, Series B, 7.90% due 10/01/2022 953
AAA Aaa 5,000 AMT, Series M, 7% due 10/01/2026 5,160
AAA Aaa 725 Series A, 7.50% due 4/01/2015 763
New Jersey State Housing and Mortgage Finance Agency, Home Mortgage
Revenue Bonds (d):
AAA Aaa 600 Series A, 7.875% due 10/01/2016 628
AAA Aaa 255 Series C, 8.375% due 4/01/2017 271
A+ NR* 1,120 New Jersey State Housing and Mortgage Finance Agency, M/F Housing
Revenue Bonds (Mont Clarion Project), AMT, Series J, 7.70% due 11/01/2029 1,173
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey (concluded)
<S> <S> <C> <S> <C>
AAA NR* $10,410 New Jersey State Housing and Mortgage Finance Agency, M/F Housing
Revenue Refunding Bonds (Presidential Plaza), 6.95% due 5/01/2013 (h) $10,717
A1+ P1 2,000 New Jersey State, TRAN, Series A, 5% due 6/15/1995 2,004
<PAGE>
AAA VMIG1++ 700 New Jersey State Turnpike Authority, Turnpike Revenue Refunding Bonds,
VRDN, Series D, 3.35% due 1/01/2018 (a)(f) 700
New Jersey State Various Purpose Revenue Bonds (b):
AA+ Aa1 500 9.40% due 4/01/2000 585
AA+ Aa1 1,500 7.25% due 4/15/2000 1,607
A A 1,000 New Jersey Wastewater Treatment Revenue Bonds, 7.90% due 9/01/2007 1,092
AAA Aaa 3,000 New Jersey Water Supply Authority Revenue Bonds (Delaware and Raritan
System), Custodial Receipts/Certificates, AMT, 7.875% due 11/01/2013 (d) 3,267
AAA Aaa 1,300 Newark, New Jersey, Board of Education, GO, UT, 6% due 10/15/2010 (c) 1,305
AAA Aaa 2,120 Passaic Valley, New Jersey, Water Commission Water Supply Bonds, Series A,
6.40% due 12/15/2002 (f)(g) 2,268
Port Authority of New York and New Jersey, Consolidated Bonds:
AA- A1 7,900 69th Series, 7.125% due 6/01/2025 8,167
AA- A1 5,250 72nd Series, 7.35% due 10/01/2027 5,580
AA- A1 2,000 78th Series, 6.50% due 4/15/2011 2,040
AA- A1 2,000 83rd Series, 6.375% due 10/15/2017 1,989
AAA Aaa 3,300 96th Series, AMT, 6.60% due 10/01/2023 (f) 3,340
Port Authority of New York and New Jersey, Versatile Structure
Special Obligation Revenue Bonds, VRDN (a):
A1+ VMIG1++ 4,100 Series 1, 4.10% due 8/01/2028 4,100
A1+ VMIG1++ 4,900 Series 2, 3.75% due 5/01/2019 4,900
Rutgers State University, New Jersey, University Revenue Bonds:
AAA Aaa 1,675 Series O, 7.90% due 5/01/1998 (g) 1,832
AA A1 1,000 Series P, 6.85% due 5/01/2021 1,034
AA Aa2 4,000 Salem County, New Jersey, Pollution Control Financing Authority,
Waste Disposal Revenue Bonds (EI duPont Chambers Works Project), AMT,
Series A, 6.50% due 11/15/2021 3,985
South Brunswick, New Jersey, Board of Education Revenue Bonds, UT (f):
AAA Aaa 1,215 6.40% due 8/01/2015 1,235
AAA Aaa 1,000 6.40% due 8/01/2016 1,015
AAA Aaa 2,500 Trenton, New Jersey, GO, UT, 6.55% due 8/15/2009 (d) 2,615
University of Medicine and Dentistry, New Jersey, Revenue Bonds:
AA A 1,170 Refunding, Series D, 6.50% due 12/01/2005 1,243
AA A 2,750 Series E, 6.50% due 12/01/2018 2,777
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Guam--1.0%
<S> <S> <C> <S> <C>
BBB NR* $ 2,000 Guam Power Authority Revenue Bonds, Series A, 6.75% due 10/01/2024 $ 1,945
Puerto Rico--5.8%
A Baa 2,760 Puerto Rico Commonwealth, Aqueduct and Sewer Authority Revenue Bonds,
Series A, 7.875% due 7/01/2017 2,994
AAA NR* 1,000 Puerto Rico Commonwealth, Highway Authority, Highway Revenue Bonds,
Series Q, 7.75% due 7/01/2000 (g) 1,127
BBB+ Baa1 1,195 Puerto Rico Commonwealth, Infrastructure Financing Authority Revenue
Bonds, Series A, 7.75% due 7/01/2008 1,275
AAA NR* 2,055 Puerto Rico Commonwealth, Public Improvement, GO, 7.70% due 7/01/2000 (g) 2,310
A- Baa1 2,250 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds,
Series S, 7% due 7/01/2006 2,397
AA Aa3 1,500 Puerto Rico Industrial, Medical and Environmental Pollution Control
Facilities' Financing Authority, Revenue Bonds (Motorola Inc. Project),
Series A, 6.75% due l/01/2014 1,559
Total Investments (Cost--$204,097)--101.6% 207,082
Variation Margin on Financial Futures Contracts**--0.0% (94)
Liabilities in Excess of Other Assets--(1.6%) (3,060)
--------
Net Assets--100.0% $203,928
========
<PAGE>
<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)Interest secured by escrow.
(c)AMBAC Insured.
(d)MBIA Insured.
(e)BIG Insured.
(f)FGIC Insured.
(g)Prerefunded.
(h)FHA Collateralized.
(i)FSA Insured.
(j)Portion of security held as collateral in connection with open
financial futures contracts.
++Highest short-term rating by Moody's Investors Service, Inc.
*Not Rated.
**Financial futures contracts sold as of January 31, 1995 were as
follows:
Number of Expiration Value
Contracts Issue Date (Notes 1a & 1b)
201 US Treasury Bonds March 1995 $(20,395,219)
(Total Contract Price--$20,299,125) $(20,395,219)
============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of January 31, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$204,096,734) (Note 1a) $207,082,400
Receivables:
Interest $ 3,148,243
Securities sold 996,370
Beneficial interest sold 517,272 4,661,885
-----------
Deferred organization expenses (Note 1e) 16,734
Prepaid expenses and other assets (Note 1e) 36,128
------------
Total assets 211,797,147
------------
<PAGE>
Liabilities: Variation margin on financial futures contracts (Note 1b) 94,219
Payables:
Securities purchased 4,658,373
Beneficial interest redeemed 610,816
Dividends to shareholders (Note 1f) 234,453
Investment adviser (Note 2) 87,985
Distributor (Note 2) 63,667 5,655,294
------------
Accrued expenses and other liabilities 2,119,976
------------
Total liabilities 7,869,489
------------
Net Assets: Net assets $203,927,658
============
Net Assets Class A Shares of beneficial interest, $.10 par value,
Consist of: unlimited number of shares authorized $ 388,003
Class B Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 1,559,146
Class C Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 3,555
Class D Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 15,851
Paid-in capital in excess of par 206,459,030
Accumulated realized capital losses--net (7,387,499)
Unrealized appreciation on investments--net 2,889,572
------------
Net assets $203,927,658
============
Net Asset Value: Class A--Based on net assets of $40,230,620 and
3,880,032 shares of beneficial interest outstanding $ 10.37
============
Class B--Based on net assets of $161,684,322 and
15,591,460 shares of beneficial interest outstanding $ 10.37
============
Class C--Based on net assets of $368,674 and 35,555
shares of beneficial interest outstanding $ 10.37
============
Class D--Based on net assets of $1,644,042 and 158,508
shares of beneficial interest outstanding $ 10.37
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
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 $ 6,783,205
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 582,944
Distribution fees--Class B (Note 2) 421,978
Transfer agent fees--Class B (Note 2) 48,609
Printing and shareholder reports 36,139
Professional fees 29,414
Accounting services (Note 2) 24,956
Transfer agent fees--Class A (Note 2) 10,292
Registration fees (Note 1e) 9,487
Custodian fees 8,192
Amortization of organization expenses (Note 1e) 7,525
Pricing fees 5,905
Trustees' fees and expenses 5,239
Account maintenance fees--Class D (Note 2) 309
Distribution fees--Class C (Note 2) 235
Transfer agent fees--Class D (Note 2) 164
Transfer agent fees--Class C (Note 2) 29
Other 4,553
-----------
Total expenses 1,195,970
------------
Investment income--net 5,587,235
------------
Realized & Realized loss on investments--net (3,171,849)
Unrealized Change in unrealized appreciation on investments--net (2,577,826)
Loss on ------------
Investments--Net Net Decrease in Net Assets Resulting from Operations ($162,440)
(Notes 1b, 1d ============
& 3):
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
January 31, July 31,
Increase (Decrease) in Net Assets: 1995 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 5,587,235 $ 11,280,577
Realized loss on investments--net (3,171,849) (3,460,520)
Change in unrealized appreciation/depreciation on
investments--net (2,577,826) (9,190,582)
------------ ------------
Net decrease in net assets resulting from operations (162,440) (1,370,525)
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (1,205,437) (2,525,082)
Shareholders Class B (4,361,901) (8,755,495)
(Note 1f): Class C (2,040) --
Class D (17,857) --
In excess of realized gain on investments--net:
Class A -- (197,825)
Class B -- (769,333)
------------ ------------
Net decrease in net assets resulting from dividends
and distributions to shareholders (5,587,235) (12,247,735)
------------ ------------
Beneficial Interest Net increase (decrease) in net assets derived from
Transactions beneficial interest transactions (15,314,486) 20,934,073
(Note 4): ------------ ------------
Net Assets: Total increase (decrease) in net assets (21,064,161) 7,315,813
Beginning of period 224,991,819 217,676,006
------------ ------------
End of period $203,927,658 $224,991,819
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class A
For the
For the Period
The following per share data and ratios have been derived Six Months August 31,
from information provided in the financial statements. Ended 1990++ to
Jan. 31, For the Year Ended July 31, July 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.63 $ 11.23 $ 11.03 $ 10.37 $ 10.00
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .29 .58 .62 .66 .61
Realized and unrealized gain (loss) on
investments--net (.26) (.55) .24 .70 .37
-------- -------- -------- -------- --------
Total from investment operations .03 .03 .86 1.36 .98
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.29) (.58) (.62) (.66) (.61)
Realized gain on investments--net -- -- (.04) (.04) --
In excess of realized gain on
investments--net -- (.05) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.29) (.63) (.66) (.70) (.61)
-------- -------- -------- -------- --------
Net asset value, end of period $ 10.37 $ 10.63 $ 11.23 $ 11.03 $ 10.37
======== ======== ======== ======== ========
Total Investment Based on net asset value per share .36%+++ .19% 8.16% 13.57% 10.28%+++
Return:** ======== ======== ======== ======== ========
Ratios to Expenses, net of reimbursement .72%* .69% .71% .60% .46%*
Average ======== ======== ======== ======== ========
Net Assets: Expenses .72%* .69% .72% .77% 1.09%*
======== ======== ======== ======== ========
Investment income--net 5.67%* 5.28% 5.62% 6.15% 6.63%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 40,231 $ 46,669 $ 47,024 $ 35,042 $ 18,368
Data: ======== ======== ======== ======== ========
Portfolio turnover 30.11% 65.97% 16.28% 29.58% 15.81%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the
effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class B
For the
For the Period
The following per share data and ratios have been derived Six Months August 31,
from information provided in the financial statements. Ended 1990++ to
Jan. 31, For the Year Ended July 31, July 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.63 $ 11.23 $ 11.03 $ 10.37 $ 10.00
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .27 .53 .56 .61 .56
Realized and unrealized gain (loss) on
investments--net (.26) (.55) .24 .70 .37
-------- -------- -------- -------- --------
Total from investment operations .01 (.02) .80 1.31 .93
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.27) (.53) (.56) (.61) (.56)
Realized gain on investments--net -- -- (.04) (.04) --
In excess of realized gain on
investments--net -- (.05) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.27) (.58) (.60) (.65) (.56)
-------- -------- -------- -------- --------
Net asset value, end of period $ 10.37 $ 10.63 $ 11.23 $ 11.03 $ 10.37
======== ======== ======== ======== ========
Total Investment Based on net asset value per share .11%+++ (.31%) 7.61% 13.10% 9.68%+++
Return:** ======== ======== ======== ======== ========
Ratios to Expenses, excluding distribution fees
Average and net of reimbursement .73%* .70% .71% .60% .50%*
Net Assets: ======== ======== ======== ======== ========
Expenses, net of reimbursement 1.23%* 1.20% 1.21% 1.10% 1.00%*
======== ======== ======== ======== ========
Expenses 1.23%* 1.20% 1.22% 1.28% 1.58%*
======== ======== ======== ======== ========
Investment income--net 5.17%* 4.77% 5.11% 5.67% 6.08%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $161,684 $178,322 $170,652 $129,475 $ 77,165
Data: ======== ======== ======== ======== ========
Portfolio turnover 30.11% 65.97% 16.28% 29.58% 15.81%
======== ======== ======== ======== ========
<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>
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. October 21, 1994++ to
January 31, 1995
Increase (Decrease) in Net Asset Value: Class C Class D
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 10.34 $ 10.34
Operating ---------- ----------
Performance: Investment income--net .14 .16
Realized and unrealized gain on investments--net .03 .03
---------- ----------
Total from investment operations .17 .19
---------- ----------
Less dividends:
Investment income--net (.14) (.16)
---------- ----------
Total dividends and distributions (.14) (.16)
---------- ----------
Net asset value, end of period $ 10.37 $ 10.37
========== ==========
Total Investment Based on net asset value per share 1.72%+++ 1.86%+++
Return:** ========== ==========
Ratios to Expenses, excluding account maintenance and distribution
Average fees and net of reimbursement .76%* .74%*
Net Assets: ========== ==========
Expenses, net of reimbursement 1.36%* .84%*
========== ==========
Expenses 1.36%* .84%*
========== ==========
Investment income--net 5.22%* 5.77%*
========== ==========
Supplemental Net assets, end of period (in thousands) $ 369 $ 1,644
Data: ========== ==========
Portfolio turnover 30.11% 30.11%
========== ==========
<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>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch New Jersey Municipal Bond Fund (the "Fund") is part of
Merrill Lynch Multi-State Municipal Series Trust (the "Trust"). The
Fund is registered under the Investment Company Act of 1940 as a non-
diversified, open-end management investment company. These unaudited
financial statements reflect all adjustments which are, in the
opinion of management, necessary to a fair statement of the results
for the interim period presented. All such adjustments are of a
normal recurring nature. The Fund offers four classes of shares
under the Merrill Lynch Select Pricing SM System. Shares of Class A
and Class D are sold with a front-end sales charge. Shares of Class
B and Class C may be subject to a contingent deferred sales charge.
All classes of shares have identical voting, dividend, liquidation
and other rights and the same terms and conditions, except that
Class B, Class C and Class D Shares bear certain expenses related to
the account maintenance of such shares, and Class B and Class C
Shares also bear certain expenses related to the distribution of
such shares. Each class has exclusive voting rights with respect to
matters relating to its account maintenance and distribution
expenditures. The following is a summary of significant accounting
policies followed by the Fund.
(a) Valuation of investments--Municipal bonds and other portfolio
securities in which the Fund invests are traded primarily in the
over-the-counter municipal bond and money markets and are valued at
the last available bid price in the over-the-counter market or on
the basis of yield equivalents as obtained from one or more dealers
that make markets in the securities. Financial futures contracts and
options thereon, which are traded on exchanges, are valued at their
settlement prices as of the close of such exchanges. Short-term
investments with remaining maturities of sixty days or less are
valued at amortized cost, which approximates market value.
Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or
under the direction of the Board of Trustees of the Trust, including
valuations furnished by a pricing service retained by the Trust,
which may utilize a matrix system for valuations. The procedures of
the pricing service and its valuations are reviewed by the officers
of the Trust under the general supervision of the Trustees.
<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.
NOTES TO FINANCIAL STATEMENTS (continued)
(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.
(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.
<PAGE>
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 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
Advisor 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% --
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.
<PAGE>
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 $905 $10,387
Class D $687 $ 8,626
MLPF&S received contingent deferred sales charges of $295,771
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 $59,501,363 and
$75,537,397, respectively.
Net realized and unrealized gains (losses) as of January 31, 1995
were as follows:
Realized Unrealized
Gains Gains
(Losses) (Losses)
Long-term investments $(3,192,779) $ 2,985,666
Financial futures contracts 20,930 (96,094)
----------- -----------
Total $(3,171,849) $ 2,889,572
=========== ===========
As of January 31, 1995, net unrealized appreciation for Federal
income tax purposes aggregated $2,985,666, of which $3,747,041
related to appreciated securities and $761,375 related to
depreciated securities. The aggregate cost of investments at January
31, 1995 for Federal income tax purposes was $204,096,734.
4. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from beneficial
interest transactions was $(15,314,486) and $20,934,073 for the six
months ended January 31, 1995 and the year ended July 31, 1994,
respectively.
<PAGE>
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the
Six Months Ended Dollar
January 31, 1995 Shares Amount
Shares sold 127,663 $ 1,308,543
Shares issued to share-
holders in reinvestment
of dividends 57,642 590,740
----------- -----------
Total issued 185,305 1,899,283
Shares redeemed (696,228) (7,167,588)
----------- -----------
Net decrease (510,923) $(5,268,305)
=========== ===========
NOTES TO FINANCIAL STATEMENTS (concluded)
Class A Shares for the Year Dollar
Ended July 31, 1994 Shares Amount
Shares sold 1,095,757 $12,136,853
Shares issued to shareholders
in reinvestment of dividends
and distributions 120,076 1,329,884
----------- -----------
Total issued 1,215,833 13,466,737
Shares redeemed (1,011,632) (11,085,681)
----------- -----------
Net increase 204,201 $ 2,381,056
=========== ===========
Class B Shares for the Six Months Dollar
Ended January 31, 1995 Shares Amount
Shares sold 1,211,610 $ 12,479,891
Shares issued to shareholders
in reinvestment of dividends 227,727 2,332,226
----------- ------------
Total issued 1,439,337 14,812,117
Shares redeemed (2,623,385) (26,800,025)
----------- ------------
Net decrease (1,184,048) $(11,987,908)
=========== ============
<PAGE>
Class B Shares for the Year Dollar
Ended July 31, 1994 Shares Amount
Shares sold 4,388,673 $ 49,079,880
Shares issued to shareholders
in reinvestment of dividends
and distributions 468,309 5,185,597
----------- ------------
Total issued 4,856,982 54,265,477
Shares redeemed (3,273,476) (35,712,460)
----------- ------------
Net increase 1,583,506 $ 18,553,017
----------- ------------
Class C Shares for the Period
October 21, 1994++ to Dollar
January 31, 1995 Shares Amount
Shares sold 35,393 $ 356,831
Shares issued to shareholders
in reinvestment of dividends 162 1,653
----------- ------------
Net increase 35,555 $ 358,484
----------- ------------
[FN]
++Commencement of Operations.
Class D Shares for the Period
October 21, 1994++ to Dollar
January 31, 1995 Shares Amount
Shares sold 164,136 $ 1,640,075
Shares issued to shareholders
in reinvestment of dividends 195 1,981
----------- ------------
Total issued 164,331 1,642,056
Shares redeemed (5,823) (58,813)
----------- ------------
Net increase 158,508 $ 1,583,243
----------- ------------
[FN]
++Commencement of Operations.
<PAGE>
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Kenneth S. Axelson, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary
Custodian
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
