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MERRILL LYNCH HIGH INCOME MUNICIPAL BOND FUND, INC.
SUPPLEMENT TO PROSPECTUS DATED DECEMBER 28, 1994
FOR USE IN THE STATE OF NEW JERSEY
THESE ARE SPECULATIVE SECURITIES. AN INVESTMENT IN THE FUND MAY INVOLVE
SIGNIFICANT RISKS.
THE FUND MAY INVEST IN MEDIUM TO LOWER RATED MUNICIPAL OBLIGATIONS AND
IN CERTAIN MUNICIPAL OBLIGATIONS THAT ARE CONSIDERED DERIVATIVE INSTRUMENTS.
SUCH MUNICIPAL OBLIGATIONS MAY HAVE CERTAIN SPECULATIVE CHARACTERISTICS.
In order to seek to hedge various portfolio positions or to enhance its
return, the Fund may invest in certain instruments which may be characterized
as derivatives. These investments include various types of options
transactions and futures and options thereon entered into for hedging
purposes. See "Investment Objective and Policies--Options and Futures
Transactions." Such investments also include municipal obligations the
return on which is based on a particular index of value or interest rates,
and inverse floating obligations or residual interest bonds on which interest
rates typically decline as market rates increase and increase as market rates
decline. Such municipal obligations have the effect of providing a degree of
investment leverage, which will generally result in the market values of such
instruments having greater volatility than the market values of fixed-rate
municipal obligations. See "Investment Objective and Policies--Description
of Municipal Bonds."
