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CMA NORTH CAROLINA
MUNICIPAL MONEY FUND
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Annual Report
March 31, 1997
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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
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*
* 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 North Carolina
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011 #16057 -- 3/97
[RECYCLE LOGO] Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS:
For the year ended March 31, 1997, CMA North Carolina Municipal Money
Fund paid shareholders a net annualized yield of 2.82%*. As of
March 31, 1997, the Fund's 7-day yield was 2.77%.
Economic Environment & Investment Strategy
The state of North Carolina continued to experience steady growth
during the six-month period ended March 31, 1997. As 1997 begins,
state economists are predicting a slightly slower rate of growth
this year compared to the previous four years. Expectations are for
the state to grow 2.9% in 1997 compared to the 3.3% gain reported in
1996. This compares to an average annual growth rate of 4.8% from
1992 to 1995. Moreover, the state's economy continues to diversify,
with manufacturing accounting for over 25% of the non-agricultural
work force. North Carolina's unemployment remains low, at 3.6% for
February 1997 compared to the national rate of 5.2% for the same
period.
Furthermore, financial operations continue to be solid. The state
ended 1996 fiscal year with a $1.42 billion reserve, or 9.1% of
general fund revenues. For the first five months of fiscal year
1996-1997, operations are on target with state budget projections.
On January 15, 1997, the state of North Carolina issued $195 million
in capital improvement bonds rated AAA by Fitch Investor Service.
The purpose of the bonds, which were authorized by voters in a 1993
referendum, is to upgrade community colleges, universities and state
parks. However, despite $1.3 billion in outstanding debt, the
state's debt ratios remain among the lowest in the country at 0.7%
of personal income and $146 per capita compared to the Moody's
Median of 2.1% and $431, respectively. Of the $2.8 billion
authorized and unissued, the state plans to market $450 million in
school bonds and $100 million in highway bonds in the spring of
1997.
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
During the six-month period ended March 31, 1997, economic
statistics continued to paint an ideal picture of the US economy.
For a majority of the period, a combination of steady growth and low
inflation kept Federal Reserve Board policymakers on hold. Despite
strong holiday sales spurred by healthy increases in personal
income, the consensus remained that monetary policy would be on hold
for the near term. However, during most of this period, a lack of
fixed-rate supply combined with traditional inflows during early
December 1996 and January 1997 kept yields on fixed-rate notes
relatively unattractive compared to those on variable rate demand
notes. Both the flat short-term tax-exempt yield curve and a bias
for tighter monetary policy caused us to use the Fund's commercial
paper to maintain a relatively neutral average portfolio maturity
while selectively purchasing fixed-rate notes when yields were
attractive. With similar conditions existing during the six-month
period ended September 30, 1996, the Fund continued to utilize the
same market strategy as it had then. Furthermore, the purchase of
fixed-rate notes at attractive levels during July 1996 and August
1996 enhanced the Fund's performance for the recent fiscal year.
As the six-month period ended March 31, 1997 concluded, continued
strength in a majority of economic statistics revealed the potential
for impressive growth during the first quarter of 1997. Therefore,
with the likelihood of an interest rate hike and the expected rise
in yields on variable rate products in April because of outflows
during tax time, we decided to position the Fund more defensively.
In October 1996, the average portfolio maturity was in the 40-day
range, but by the end of March, the average portfolio maturity was
reduced to the 35-day range. On March 25, 1997, the Federal Reserve
Board increased the Federal Funds rate by 25 basis points (0.25%) to
5.5%. During the six-month period ended March 31, 1997, the state of
North Carolina's short-term issuance totaled $129.3 million.
Diversification and credit quality remain paramount to the Fund, and
we will continue to closely monitor the everchanging marketplace.
In Conclusion
We thank you for your support of CMA North Carolina Municipal Money
Fund, and we look forward to serving your investment needs in the
months and years ahead.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/VINCENT R. GIORDANO
Vincent R. Giordano
Senior Vice President
/S/ DARRIN J. SANFILLIPPO
Darrin J. SanFillippo
Vice President and Portfolio Manager
May 1, 1997
Portfolio Abbreviations for CMA North Carolina Municipal Money Fund
ACESSM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
BAN Bond Anticipation Notes
CP Commercial Paper
GO General Obligation Bonds
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
<CAPTION>
CMA North Carolina Municipal Money Fund
Schedule of Investments as of March 31, 1997 (in Thousands)
Face Value
State Amount Issue (Note 1a)
<S> <C> <C> <C>
North Carolina -- $1,000 Beaufort County, North Carolina, Industrial Facilities and Pollution Control
87.8% Financing Authority Revenue Bonds (Texasgulf, Inc. Project), VRDN, 3.50%
due 12/01/2000 (a) $1,000
3,300 Buncombe County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Revenue Refunding Bonds (Cooper Industries), VRDN,
3.65% due 1/01/2006 (a) 3,300
6,600 Cabarrus County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Industrial Revenue Bonds (S & D Coffee Inc. Project), VRDN,
AMT, 3.50% due 9/01/2011 (a) 6,600
3,000 Carteret County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, PCR (Texasgulf, Inc. Project), VRDN, 3.40% due
10/01/2005 (a) 3,000
800 Catawba County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Lukens Steel Co. Project), VRDN, AMT,
3.75% due 12/01/2009 (a) 800
Charlotte-Mecklenberg Hospital Authority, North Carolina, Health Care System
Revenue Bonds, VRDN, Series C (a):
4,000 3.25% due 1/15/2026 4,000
8,500 3.50% due 1/15/2026 8,500
5,000 Charlotte, North Carolina, Airport Revenue Refunding Bonds, VRDN, Series A,
3.35% due 7/01/2016 (a)(b) 5,000
1,000 Charlotte, North Carolina, Refunding Bonds, GO, UT, 4.50% due 6/01/1997 1,002
1,000 Charlotte, North Carolina, Water and Sewer, UT, 7.30% due 6/01/1997 (c) 1,027
Craven County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Resource Bonds (Cravenwood Energy Project), VRDN,
AMT (a):
4,400 Series B, 3.80% due 5/01/2011 4,400
3,200 Series C, 3.80% due 5/01/2011 3,200
Cumberland County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Revenue Refunding Bonds (Monsanto Co. Project), VRDN (a):
1,715 3.40% due 6/01/2012 1,715
600 3.40% due 10/01/2014 600
Durham County, North Carolina, Public Improvement Bonds, VRDN, UT (a):
1,000 3.40% due 5/01/2009 1,000
1,000 3.40% due 5/01/2010 1,000
1,000 3.40% due 5/01/2011 1,000
2,688 Enfield, North Carolina, BAN, 3.585% due 8/20/1997 2,688
772 Freemont, North Carolina, BAN, UT, 3.70% due 1/21/1998 773
Gaston County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, VRDN (a):
2,000 (Gold Medal Homes), 3.55% due 12/01/2009 2,000
800 (Mount Holly Enterprises/Queens G.P. Inc.), AMT, 3.65% due 5/01/2004 800
2,000 (Mount Holly Enterprises/Queens G.P. Inc.), AMT, 3.55% due 12/01/2009 2,000
Granville County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, VRDN, AMT (a):
4,000 Mayville Metal Production Project), 3.65% due 5/23/2020 4,000
1,840 (Tuscarora Plastics, Inc. Project), 3.65% due 12/01/2001 1,840
500 Greene County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDA, Revenue Bonds (Federal Paper Board Company, Inc.
Project), VRDN, AMT, 3.50% due 11/01/2009 (a) 500
Guilford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, VRDN, AMT (a):
900 (Pharmagraphics Inc. Project), 3.75% due 9/01/2010 900
7,500 (US Woven Label Project), 3.50% due 1/01/2013 7,500
26,015 Halifax County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Exempt Facilities -- Westmoreland Project),
VRDN, AMT, 3.85% due 12/01/2019 (a) 26,015
Iredell County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds:
4,000 (Purina Mills Inc. Project), VRDN, AMT, 3.60% due 7/01/2020 (a) 4,000
8,300 (Rubbermaid Specialty Products, Inc.), 3.85% due 6/01/1997 8,300
1,585 Lee County, North Carolina, BAN, 3.96% due 4/02/1997 1,585
3,700 Lenoir County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (West Co. Nebraska, Inc. Project),
VRDN, 3.55% due 10/01/2005 (a) 3,700
8,900 Lincoln County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Hof Textiles Inc. Project), VRDN, AMT,
3.50% due 10/01/2011 (a) 8,900
8,500 Mecklenberg County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (Rexroth Corporation Project), VRDN, AMT, 3.50% due
9/01/2016 (a) 8,500
Mecklenberg County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds, VRDN (a):
2,000 (Edgecomb Metals Company Project), 3.40% due 12/01/2009 2,000
900 (Flawa Corporation Project), AMT, 3.35% due 12/01/2008 900
1,500 (Griffith Micro Science Project), AMT, 3.60% due 11/01/2007 1,500
1,000 Mecklenburg County, North Carolina, UT, Series A and B, 6.60% due 4/01/1997 1,000
905 New Hanover County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Interroll Corp. Project), VRDN, 3.65%
due 11/01/2003 (a) 905
3,200 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds,
CP, Series B, 3.15% due 4/01/1997 3,200
North Carolina Educational Facilities Finance Agency Revenue Bonds, VRDN (a):
1,500 (Bowman Grey School of Medicine Project), 3.50% due 9/01/2020 1,500
1,500 (Duke University Project), Series A, 3.35% due 6/01/2027 1,500
3,300 North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds
(Cabarrus Memorial Hospital Project), VRDN, 3.45% due 3/01/2012 (a) 3,300
North Carolina Medical Care Commission, Hospital Revenue Bonds (a):
3,300 (Duke University Hospital), VRDN, Series B, 3.35% due 6/01/2015 3,300
3,500 (Duke University Hospital), VRDN, Series C, 3.35% due 6/01/2015 3,500
2,130 (Duke University Hospital), VRDN, Series D, 3.35% due 6/01/2015 2,130
3,700 (Pooled Financing Project), ACES, 3.40% due 4/01/2012 3,700
200 Refunding (Moses H. Cone Memorial Hospital Project), VRDN, 3.45%
due 10/01/2023 200
North Carolina Municipal Power Agency, Electric Revenue Bonds
(No. 1 Catawba), CP:
3,817 3.35% due 4/10/1997 3,817
4,000 3.40% due 6/25/1997 4,000
7,000 3.45% due 7/16/1997 7,000
16,000 3.50% due 7/16/1997 16,000
2,600 3.55% due 7/25/1997 2,600
10,000 3.55% due 8/21/1997 10,000
3,000 3.60% due 8/22/1997 3,000
1,900 North Carolina State Port Authority, Docks and Wharves Facility Revenue Bonds
(Morehead City Terminals), VRDN, AMT, 3.65% due 1/01/2016 (a) 1,900
1,405 Piedmont Triad Airport Authority, North Carolina, Special Facility Revenue
Bonds (Purpose - Cessna Aircraft Company Project), VRDN, AMT, 3.65% due
10/01/2012 (a) 1,405
1,700 Raleigh-Durham, North Carolina, Airport Authority, Special Facility Revenue
Refunding Bonds (American Airlines), VRDN, Series A, 3.70% due 11/01/2015 (a) 1,700
5,770 Robeson County, North Carolina, BAN, UT, 3.485% due 10/15/1997 5,771
700 Rowan County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Reynolds Metals Company Project),
3.55% due 6/01/1997 700
3,100 Rutherford County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (All American Homes of North Carolina Inc.),
VRDN, AMT, 3.75% due 11/01/2011 (a) 3,100
1,000 South Central Water and Sewer District, North Carolina, Harnett County, BAN, UT,
3.52% due 6/11/1997 1,000
2,225 Tabor City, North Carolina, BAN, UT, 3.64% due 6/05/1997 2,225
5,100 University of North Carolina, Chapel Hill School of Medicine and Ambulatory
Care Clinic Revenue Bonds, VRDN, 3.35% due 7/01/2012 (a) 5,100
4,500 Wake County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority Revenue Bonds (Carolina Power and Light Company
Project), VRDN, Series C, 3.65% due 10/01/2015 (a) 4,500
2,000 Wayne County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, Revenue Refunding Bonds (General Signal), VRDN,
3.65% due 12/01/2000 (a) 2,000
600 Wilson County, North Carolina, Industrial Facilities and Pollution Control
Financing Authority, IDR (North Carolina Chip Co. Project), VRDN, 3.65% due
1/01/2000 (a) 600
1,100 Winston-Salem, North Carolina, Urban Redevelopment, Mortgage Revenue
Refunding Bonds (Summit Square Garden Apartments), CP, 3.40% due 4/17/1997 1,100
3,500 Winston-Salem, North Carolina, Water and Sewer System Revenue Bonds, CP,
3.40% due 4/17/1997 3,500
Puerto Rico -- Puerto Rico Commonwealth, Government Development Bank, CP:
10.8% 5,500 3.15% due 4/01/1997 5,500
8,900 3.05% due 4/03/1997 8,900
7,500 3.25% due 4/03/1997 7,500
3,000 3.50% due 4/11/1997 3,000
Puerto Rico Industrial, Medical and Environmental Pollution Control Facilities
Financing Authority Revenue Bonds:
1,750 (Abbott Labs Project), 3.75% due 3/01/1998 1,750
2,940 (Dickinson & Co.), 3.76% due 3/01/1998 2,940
Total Investments (Cost -- $270,388*) -- 98.6% 270,388
Other Assets Less Liabilities -- 1.4% 3,792
--------
Net Assets -- 100.0% $274,180
========
(a) The interest rate is subject to change periodically based on certain indexes.
The interest rate shown is the rate in effect at March 31, 1997.
(b) MBIA Insured.
(c) Prerefunded.
* Cost for Federal income tax purposes.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA North Carolina Municipal Money Fund
Statement of Assets and Liabilities as of March 31, 1997
<S> <C> <C>
Assets:
Investments, at value (identified cost -- $270,387,549) (Note 1a) $270,387,549
Cash 300,760
Receivables:
Securities sold $3,001,870
Interest 1,061,411 4,063,281
------------
Prepaid registration fees and other assets (Note 1d) 10,761
------------
Total assets 274,762,351
------------
Liabilities:
Payables:
Securities purchased 300,665
Investment adviser (Note 2) 116,227
Distributor (Note 2) 84,050
Dividends to shareholders (Note 1e) 66 501,008
-----------
Accrued expenses and other liabilities 81,277
------------
Total liabilities 582,285
------------
Net Assets $274,180,066
============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited number of shares
authorized $27,421,988
Paid-in capital in excess of par 246,797,889
Accumulated realized capital losses -- net (Note 4) (39,811)
------------
Net Assets -- Equivalent to $1.00 per share based on 274,219,877 shares of
beneficial interest outstanding $274,180,066
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA North Carolina 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 $9,351,932
Expenses:
Investment advisory fees (Note 2) $1,331,895
Distribution fees (Note 2) 326,935
Transfer agent fees (Note 2) 60,651
Accounting services (Note 2) 50,439
Professional fees 48,098
Registration fees (Note 1d) 30,259
Custodian fees 26,304
Printing and shareholder reports 22,476
Pricing fees 6,495
Trustees' fees and expenses 2,436
Amortization of organization expenses (Note 1d) 1,242
Other 4,035
----------
Total expenses 1,911,265
----------
Investment income -- net 7,440,667
Realized Loss on Investments -- Net (Note 1c) (3,442)
----------
Net Increase in Net Assets Resulting from Operations $7,437,225
==========
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA North Carolina Municipal Money Fund
Statements of Changes in Net Assets
For the Year Ended
March 31,
Increase (Decrease) in Net Assets: 1997 1996
<S> <C> <C>
Operations:
Investment income -- net $7,440,667 $8,169,520
Realized loss on investments -- net (3,442) (7,855)
----------- -----------
Net increase in net assets resulting from operations 7,437,225 8,161,665
----------- -----------
Dividends to Shareholders (Note 1e):
Investment income -- net (7,440,667) (8,169,520)
----------- -----------
Net decrease in net assets resulting from dividends to shareholders (7,440,667) (8,169,520)
----------- -----------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 757,440,492 854,050,473
Net asset value of shares issued to shareholders in reinvestment
of dividends (Note 1e) 7,440,785 8,167,035
----------- -----------
764,881,277 862,217,508
Cost of shares redeemed (764,608,188) (867,003,212)
----------- -----------
Net increase (decrease) in net assets derived from beneficial interest transactions 273,089 (4,785,704)
----------- -----------
Net Assets:
Total increase (decrease) in net assets 269,647 (4,793,559)
Beginning of year 273,910,419 278,703,978
----------- -----------
End of year $274,180,066 $273,910,419
=========== ===========
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA North Carolina 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 2.82% 3.13% 2.61% 1.85% 2.25%
======== ======== ======== ======== ========
Ratios to Average Net Assets:
Expenses, net of reimbursement .72% .69% .62% .61% .57%
======== ======== ======== ======== ========
Expenses .72% .74% .72% .71% .73%
======== ======== ======== ======== ========
Investment income -- net 2.79% 3.08% 2.58% 1.84% 2.20%
======== ======== ======== ======== ========
Supplemental Data:
Net assets, end of year (in thousands) $274,180 $273,910 $278,704 $293,452 $235,384
======== ======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
CMA North Carolina Municipal Money Fund
Notes to Financial Statements
1. Significant Accounting Policies:
CMA North Carolina 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.
(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) 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.
(e) Dividends and distributions to share-holders -- 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.
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.
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.
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 $39,000, of which $5,000 expires in 2001, $10,000 expires
in 2002, $13,000 expires in 2003 and $11,000 expires in 2005. This
amount will be available to offset like amounts of any future taxable
gains.
CMA North Carolina Municipal Money Fund
Independent Auditors' Report
The Board of Trustees and Shareholders, CMA North Carolina 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 North Carolina 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
North Carolina 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
Important Tax Information (unaudited)
All of the net investment income distributions paid daily by CMA North
Carolina 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
its taxable year ended March 31, 1997.
Please retain this information for your records.
