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CMA MICHIGAN
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 Michigan
Municipal Money Fund
Box 9011
Princeton, NJ 08543-9011 #16056 -- 3/97
[RECYCLE LOGO] Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS:
For the year ended March 31, 1997, CMA Michigan Municipal Money Fund
paid shareholders a net annualized yield of 2.89%*. As of March 31,
1997, the Fund's 7-day yield was 2.85%.
Economic Environment & Investment Strategy
The six-month period ended March 31, 1997 was stable for the state of
Michigan's economy. This was reflected by an unchanged reading in the
Michigan Business Activity Index of 167 for the month of December 1996.
The index, which is seasonally adjusted, represents 10 different
measures of economic activity compiled monthly and reported by the
Economics Department of Comerica Bank. More specifically, the data
showed that good gains in motor vehicle output and electric power
consumption were offset by reductions in steel production and the volume
of financial transactions. Furthermore, enhanced by relatively broad-
based job growth and additional efforts to build a pro-business climate,
Michigan's economy is currently registering one of the nation's best
performances in terms of growth. At year-end, total non-farm employment
was up at nearly a 2.0% annual rate with limited losses in manufacturing
and government employment. Moreover, the state ended fiscal year 1996
with an $88.1 million surplus. Governor John Engler credits this surplus
to Michigan's dramatically improved economic climate and disciplined
fiscal management. Budget officials report that $58.1 million of the
$88.1 million surplus will be deposited into the state's $1.1 billion
"rainy-day" fund. During February 1997, Michigan issued $900 million in
full faith and credit general obligation notes. This issuance of tax
anticipation notes was unchanged from last year and was used
predominantly to address timing differences between collections and
disbursement.
* 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 policy makers 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 55-day range, but by the end of
March, the average portfolio maturity was reduced to the 25-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 Michigan's short-term issuance
totaled $947 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 Michigan 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 2, 1997
<TABLE>
<CAPTION>
CMA MICHIGAN MUNICIPAL MONEY FUND
SCHEDULE OF INVESTMENTS AS OF MARCH 31, 1997 (IN THOUSANDS)
Face Value
State Amount Issue (Note 1a)
<S> <C> <C> <C>
Michigan -- $ 1,375 Battle Creek, Michigan, Housing Corporation Revenue Bonds, VRDN, Series
90.0% 1997-A, 3.50% due 2/01/2027 (a) $ 1,375
945 Bedford Township, Michigan, Economic Development Corporation Revenue
Bonds (Form-Tech Steel Inc. Project), VRDN, 3.70% due 3/01/2010 (a) 945
4,500 Berrien County, Michigan, Economic Development Corporation, Economic
Development Revenue Bonds (Arlington Corp. Project), VRDN, AMT, 3.69%
due 9/01/2016 (a) 4,500
4,000 Chelsea, Michigan, Economic Development Corporation, Limited Obligation
Revenue Bonds (Silver Maples of Chelsea), VRDN, 3.50% due 5/15/2028 (a) 4,000
105 Delta Township, Michigan, Economic Development Corporation, IDR, Refunding
(Schottenstein Stores), VRDN, 3.50% due 12/01/1997 (a) 105
15,000 Detroit, Michigan, City School District, State School Aid Notes, 4.50% due
5/01/1997 15,007
Detroit, Michigan, Water Supply System Revenue Bonds, Municipal Trust Receipts,
VRDN (a)(c):
2,000 Series SGB-6, 3.50% due 7/01/2025 2,000
3,500 Series SG-64, 3.50% due 7/01/2025 3,500
4,700 Eagle Tax-Exempt Trust Custodial Receipts, VRDN, 3.60% due 6/01/1997 (a) 4,700
1,000 Eaton, Michigan, Inter-School District, TAN, 4.20% due 4/01/1997 1,000
1,255 Farmington Hills, Michigan, Economic Development Corporation, Limited
Obligation Revenue Refunding Bonds (Brookfield Building Association), VRDN,
3.30% due 11/01/2010 (a) 1,255
2,800 Flint, Michigan, Economic Development Corporation, Economic Development
Revenue Bonds (Plastics Research Corp.), VRDN, AMT, 3.70% due 9/01/2004 (a) 2,800
9,000 Garden City, Michigan, Hospital Finance Authority, Hospital Revenue Bonds
(Garden City Hospital Obligation), VRDN, Series A, 3.50% due 9/01/2026 (a) 9,000
3,000 Garden City, Michigan, School District, State Aid Notes, 4.30% due 4/15/1997 3,000
3,400 Genesee County, Michigan, Economic Development Corporation, Limited
Obligation, Economic Development Revenue Bonds (MM & E Inc. Project), VRDN,
3.70% due 7/01/2005 (a) 3,400
2,300 Georgetown Charter Township, Michigan, IDR, Limited Obligation (J & F Steel
Corp.), VRDN, AMT, 3.55% due 2/01/2009 (a) 2,300
575 Grand Rapids, Michigan, Economic Development Corporation, Limited Obligation
Revenue Refunding Bonds (Calder), VRDN, Series A, 3.45% due 10/01/2011 (a) 575
1,000 Grand Rapids, Michigan, Economic Development Corporation Revenue Bonds
(Amway/Grand Plaza Hotel, Facility #1), VRDN, 3.45% due 12/01/2006 (a) 1,000
2,690 Grand Rapids, Michigan, IDR, Refunding (Etheridge Company Project), VRDN,
AMT, 3.55% due 7/01/2009 (a) 2,690
8,000 Grand Rapids, Michigan, Water Supply System, Revenue Refunding Bonds, VRDN,
3.30% due 1/01/2020 (a)(b) 8,000
440 Kalamazoo, Michigan, City School District, Refunding, UT, 3.70% due 5/01/1997 (b) 440
980 Kalamazoo, Michigan, Public Library, 4% due 4/01/1997 980
3,700 Kent Hospital Finance Authority, Michigan, Hospital Facilities Revenue Bonds
(Butterworth Hospital), ACES, VRDN, Series A, 3.35% due 1/15/2020 (a) 3,700
1,015 Lenawee County, Michigan, Economic Development Corporation, Limited
Obligation Revenue Bonds (The Wyatt Project), VRDN, 3.70% due 5/01/2002 (a) 1,015
1,000 Livingston, Michigan, Educational Service Agency, TAN, 4.10% due 4/01/1997 1,000
900 Melvindale, Michigan, Economic Development Corporation, Limited Obligation
Revenue Refunding Bonds (North American Steel Project), VRDN, 3.45% due
6/01/1998 (a) 900
1,000 Michigan Higher Education Facilities Authority, Limited Obligation Revenue
Bonds (Davenport Collateral Business Project), VRDN, 3.50% due 3/01/2027 (a) 1,000
Michigan Municipal Bond Authority Revenue Notes:
13,500 Series A, 4.50% due 7/03/1997 13,525
2,000 Series B, 4.50% due 7/25/1997 2,004
3,500 Series D, 4.50% due 9/19/1997 3,508
1,000 Michigan State Building Authority Revenue Bonds, Series II, 5.60% due
10/01/1997 1,010
Michigan State Building Authority Revenue Notes, CP, Series 1:
15,000 3.50% due 5/01/1997 15,000
11,920 3.65% due 5/01/1997 11,920
Michigan State, HDA, Limited Obligation Revenue Bonds:
4,000 (Bloomfield), TEAMS, 3.50% due 6/27/1997 4,000
1,200 (Laurel Valley), VRDN, TEAMS, 3.50% due 12/01/2007 (a) 1,200
4,000 (Sand Creek Apartments Phase 1 Project), VRDN, AMT, 3.60% due
1/01/2029 (a) 4,000
2,000 (Woodland Meadows Apartments Project), VRDN, AMT, 3.55% due
3/01/2013 (a) 2,000
Michigan State, HDA, M/F Housing Revenue Bonds, CP, AMT, Series A:
2,500 3.55% due 6/09/1997 2,500
4,000 3.50% due 6/10/1997 4,000
Michigan State Strategic Fund, Limited Obligation Revenue Bonds, VRDN (a):
1,000 (Adaptive Manufacturing L.L.C. Project), AMT, 3.70% due 8/01/2016 1,000
945 (Akemi Inc. Project), AMT, 3.70% due 3/01/2021 945
475 (BBPV Project), AMT, Series A-2, 4% due 1/01/2014 475
1,500 (BCM & N Project), AMT, 3.55% due 6/01/2020 1,500
2,900 (Baron Drawn Steel), IDR, AMT, 3.70% due 12/01/2006 2,900
2,500 (Cincinnati Milacron Inc. Project), AMT, 3.75% due 4/15/2005 2,500
4,200 (Dott Industries Inc. Project), AMT, 3.70% due 6/01/2001 4,200
1,500 (Hercules Drawn Steel Project), AMT, 3.70% due 8/01/2006 1,500
1,500 (Inalfa-Hollandia Inc. Project), AMT, 3.70% due 5/01/2016 1,500
2,000 (Ingersoll CM System Inc. Project), AMT, 3.70% due 12/01/2011 2,000
230 (Kay Screen Printing Inc.), AMT, Series A, 3.50% due 1/01/1999 230
3,305 (Monarch Hydraulics Inc. Project), AMT, 3.60% due 7/01/2016 3,305
2,000 (Norbert Industries Inc. Project), AMT, UT, 3.80% due 4/01/2006 2,000
1,000 (Nuvar Properties L.L.C. Project), AMT, 3.60% due 7/01/2026 1,000
2,300 (Park Realty L.L.C.), AMT, Series A, 3.60% due 9/01/2026 2,300
1,355 (Perfection Steel Inc. Project), AMT, 3.60% due 3/01/2002 1,355
6,600 Refunding (Detroit Edison Co.), Series CC, 3.65% due 9/01/2030 6,600
4,850 Refunding (Lake Shore Inc.), AMT, 3.65% due 11/01/2019 4,850
500 Refunding (Park Village Pines Project), 3.45% due 5/01/2006 500
6,500 (Riverwalk Properties L.L.C. Project), AMT, 3.70% due 8/01/2021 6,500
450 Series C-4, 4% due 1/01/2014 450
1,250 (TEI Investments L.L.C.), AMT, 3.70% due 2/01/2022 1,250
4,500 (Temperance Enterprises Co.), AMT, 3.70% due 8/01/2011 4,500
1,605 (Tom Miller Inc. Project), AMT, 3.55% due 12/01/2009 1,605
3,000 (Universal Tube, Inc. Project), AMT, 3.70% due 8/01/2011 3,000
450 (Whitehall Industries), AMT, Series A-6, 4% due 1/01/2009 450
Michigan State Strategic Fund, PCR, Refunding, VRDN, Series A (a):
4,100 (Consumer's Power Project), 3.65% due 4/15/2018 4,100
6,700 (General Motors Corp. Project), 3.55% due 4/01/2008 6,700
7,500 Michigan State Trunk Line, FLOATS, VRDN, Series SG-44, 3.50% due
11/15/2024 (a)(b) 7,500
1,500 Monroe County, Michigan, Economic Development Corporation, Limited
Obligation Revenue Refunding Bonds (Detroit Edison Co.), VRDN, Series CC, 4%
due 10/01/2024 (a) 1,500
700 Royal Oak, Michigan, Hospital Finance Authority, Hospital Revenue Bonds
(William Beaumont Hospital), VRDN, Series J, 3.60% due 1/01/2003 (a) 700
185 Sterling Heights, Michigan, Economic Development Corporation, Limited
Obligation Revenue Refunding Bonds (Sterling Shopping Center), VRDN, 3.25%
due 12/01/2010 (a) 185
University of Michigan, University Revenue Bonds, VRDN, Series A (a):
9,800 3.75% due 12/01/2019 9,800
3,500 (Medical Service Plan), 3.75% due 12/01/2027 3,500
500 Walled Lake, Michigan, Consolidated School District Refunding Bonds, UT,
3.65% due 5/01/1997 (c) 500
7,100 Wayne Charter County, Michigan, Airport Revenue Refunding Bonds (Detroit
Metropolitan County), VRDN, AMT, Series A, 3.50% due 12/01/2016 (a) 7,100
900 Wyoming, Michigan, Economic Development Corporation, Revenue Refunding
Bonds (Family One Inc. Project), VRDN, AMT, 3.60% due 11/01/2019 (a) 900
Puerto Rico -- Puerto Rico Commonwealth, Government Development Bank, CP:
9.2% 5,000 3.15% due 4/03/1997 5,000
7,500 3.50% due 4/09/1997 7,500
5,000 3.35% due 4/17/1997 5,000
7,500 3.40% due 5/07/1997 7,500
Total Investments (Cost -- $270,754*) -- 99.2% 270,754
Other Assets Less Liabilities -- 0.8% 2,215
---------
Net Assets -- 100.0% $272,969
=========
(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) FGIC Insured.
(c) MBIA Insured
* Cost for Federal income tax purposes.
</TABLE>
Portfolio Abbreviations for CMA Michigan Municipal Money Fund
ACESSM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
CP Commercial Paper
FLOATS Floating Rate Securities
HDA Housing Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
TAN Tax Anticipation Notes
TEAMS Tax-Exempt Adjustable Municipal Securities
UT Unlimited Tax
VRDN Variable Rate Demand Notes
See Notes to Financial Statements.
<TABLE>
<CAPTION>
CMA MICHIGAN MUNICIPAL MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES AS OF MARCH 31, 1997
<S> <C> <C>
Assets:
Investments, at value (identified cost -- $270,754,458) (Note 1a) $270,754,458
Cash 13,412
Receivables:
Interest $2,343,672
Securities sold 115,000 2,458,672
------------
Prepaid registration fees and other assets (Note 1d) 9,049
---------------
Total assets 273,235,591
---------------
Liabilities:
Payables:
Investment adviser (Note 2) 114,906
Distributor (Note 2) 80,205
Dividends to shareholders (Note 1e) 90
Beneficial interest redeemed 13 195,214
------------
Accrued expenses and other liabilities 71,042
---------------
Total liabilities 266,256
---------------
Net Assets $272,969,335
===============
Net Assets Consist of:
Shares of beneficial interest, $0.10 par value, unlimited
number of shares authorized $27,311,968
Paid-in capital in excess of par 245,807,707
Accumulated realized capital losses -- net (Note 4) (150,340)
---------------
Net Assets -- Equivalent to $1.00 per share based on
273,119,675 shares of beneficial interest outstanding $272,969,335
===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA MICHIGAN 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 $8,964,633
Expenses:
Investment advisory fees (Note 2) $1,255,849
Distribution fees (Note 2) 308,843
Accounting services (Note 2) 53,569
Transfer agent fees (Note 2) 52,563
Professional fees 47,651
Registration fees (Note 1d) 26,666
Custodian fees 25,099
Printing and shareholder reports 20,028
Pricing fees 6,372
Trustees' fees and expenses 2,429
Amortization of organization expenses (Note 1d) 527
Other 5,658
------------
Total expenses 1,805,254
-------------
Investment income -- net 7,159,379
Realized Loss on Investments -- Net (Note 1c) (18,304)
-------------
Net Increase in Net Assets Resulting from Operations $7,141,075
=============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA MICHIGAN 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 $7,159,379 $7,385,953
Realized loss on investments -- net (18,304) (13,976)
-------------- --------------
Net increase in net assets resulting from operations 7,141,075 7,371,977
-------------- --------------
Dividends to Shareholders (Note 1e):
Investment income -- net (7,159,379) (7,385,953)
-------------- --------------
Net decrease in net assets resulting from dividends to shareholders (7,159,379) (7,385,953)
-------------- --------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 1,149,598,981 1,072,495,850
Net asset value of shares issued to shareholders in reinvestment
of dividends (Note 1e) 7,159,224 7,386,278
-------------- --------------
1,156,758,205 1,079,882,128
Cost of shares redeemed (1,131,314,536) (1,052,494,852)
-------------- --------------
Net increase in net assets derived from beneficial interest transactions 25,443,669 27,387,276
-------------- --------------
Net Assets:
Total increase in net assets 25,425,365 27,373,300
Beginning of year 247,543,970 220,170,670
-------------- --------------
End of year $272,969,335 $247,543,970
============== ==============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CMA MICHIGAN 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 2.89% 3.13% 2.57% 1.81% 2.24%
======== ======== ======== ======== ========
Ratios to Average Net Assets:
Expenses, net of reimbursement .72% .73% .73% .72% .65%
======== ======== ======== ======== ========
Expenses .72% .73% .73% .72% 74%
======== ======== ======== ======== ========
Investment income -- net 2.84% 3.05% 2.54% 1.79% 2.22%
======== ======== ======== ======== ========
Supplemental Data:
Net assets, end of year (in thousands) $272,969 $247,544 $220,171 $236,435 $200,200
======== ======== ======== ======== ========
See Notes to Financial Statements.
</TABLE>
CMA MICHIGAN MUNICIPAL MONEY FUND
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
CMA Michigan 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 secur-
ity 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 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.
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 $149,000, of which $62,000 expires in 2001, $4,000 expires
in 2002, $50,000 expires in 2003 and $33,000 expires in 2005. This
amount will be available to offset like amounts of any future taxable
gains.
CMA MICHIGAN MUNICIPAL MONEY FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders, CMA Michigan 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 Michigan 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. 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
Michigan 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
Michigan 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.
