MERRILL LYNCH
MULTI-STATE
LIMITED MATURITY
MUNICIPAL
SERIES TRUST
FUND LOGO
Quarterly Report
April 30, 1999
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Trust unless
accompanied or preceded by the Trust'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.
Statements and other information herein are as dated and are subject
to change.
Merrill Lynch Multi-State
Limited Maturity
Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust
Officers and
Trustees
Terry K. Glenn, President and Trustee
James H. Bodurtha, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Arthur Zeikel, Trustee
Vincent R. Giordano, Senior Vice President
Edward J. Andrews, Vice President
Donald C. Burke, Vice President and Treasurer
Alice A. Pellegrino, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, NY 10005
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
April 30, 1999
TO OUR SHAREHOLDERS
The Municipal Market Environment
During the three months ended April 30, 1999, long-term bond yields
generally moved higher. Most of this increase in yields occurred in
February and early March. However, during February, a number of data
releases suggested that US economic growth would likely remain
strong throughout most of 1999. Consequently, long-term US Treasury
bond yields rose more than 60 basis points (0.60%) to 5.70% by early
March. During the remainder of the three-month period, US Treasury
bond yields traded between 5.50% and 5.70% as the lack of
inflationary pressures offset much of the concerns generated by
continued strong economic growth. Long-term uninsured municipal bond
yields rose over 15 basis points to 5.34% by early March, then
declined slightly to close the April quarter at 5.29%, as measured
by the Bond Buyer Revenue Bond Index.
In recent months, the tax-exempt market was better able to withstand
much of the upward pressure on bond yields because of its stronger
technical position. While the continued positive inflationary
environment limited some of the recent increases in taxable bond
yields, a deteriorating supply/demand position helped push taxable
bond yields significantly higher than municipal bond yields. Much of
the US Treasury bond market's underperformance in recent months can
be attributed to the large amounts of taxable corporate issuance.
Large taxable corporate underwritings reduced the demand for US
Government securities in recent months, pushing US Treasury bond
yields higher.
On the other hand, the tax-exempt bond market enjoyed only limited
new-issue supply. During the six months ended April 30, 1999, more
than $123 billion in new long-term tax-exempt securities was
underwritten, a decline of 10% compared to the same period a year
ago. Municipalities issued less than $60 billion in long-term tax-
exempt securities during the three months ended April 30, 1999, a
decline of 25% compared to the April 30, 1998 quarter. More
recently, the rate of new tax-exempt issuance has declined even
further. During April 1999, just over $15 billion in long-term tax-
exempt securities was marketed, a decline of over 33% compared to
April 1998 levels. As municipal bond yields fell and stabilized in
recent quarters, the ability of municipalities to refinance existing
higher-couponed debt declined. This led to a significant decrease in
refunding issuance and an overall drop in new municipal bond supply.
When coupled with ongoing, moderate retail and institutional demand,
the tax-exempt bond market was able to avoid much of the yield
volatility exhibited by US Treasury securities.
Looking ahead, the expected combination of moderate economic growth
in the United States and continued negligible inflation suggests a
relatively stable interest rate environment. However, in recent
years, bond yields reached their annual peaks in early May and
declined for the remainder of the year. A meaningful decline in
fixed-income bond yields would require either evidence of a
significant slowdown in the US economy or the resumption of concerns
regarding renewed shocks to the world's economic system. Currently,
neither condition exists or seems likely in the immediate future. In
our opinion, this suggests a continuation of the narrow trading
ranges seen in recent months.
Portfolio Strategy
Merrill Lynch California Limited
Maturity Municipal Bond Fund
During the quarter ended April 30, 1999, the state of California
exhibited moderating economic growth led by the computer technology,
entertainment and retail sectors. State employment, which had been
growing at an approximate rate of 3% annually for the past four
years, is expected to show an increase of 2.1% for 1999, consistent
with the national average. This moderation in growth developed
during late 1998--1999 because of the economic conditions affecting
Asia, a major export destination for California products. The Asian
effect has been offset somewhat by increased trade with Europe and
the various North American Free Trade Agreement countries, whose
demand for computer technology and high tech products increased.
Imports to Long Beach, the largest US port by volume, increased 31%
over year-ago volumes as manufactured products delivered rose
dramatically.
California's seasonally adjusted unemployment rate for March stood
at 5.8%, well above the national average but over 10% lower than the
state's pre-recession level. Financial operations have improved
considerably as the state ended 1998 with a $2.2 billion general
fund balance. California's moderating economic conditions have led
to a downward revision in revenue expectations for the current
fiscal year and for 1999--2000. The state's general fund is
projected to close this fiscal year with about $1 billion, of which
about $600 million or 1% of revenues represents a reserve. The
recommended budget for 1999--2000 is based on conservative economic
assumptions. Should additional revenue be collected, the general
reserve fund would be the direct recipient. The state's debt
position continues to be favorable, with net tax supported debt of
approximately $23.0 billion, or $727 per capita and 2.7% of personal
income.
At April 30, 1999, the net assets of Merrill Lynch California
Limited Maturity Municipal Bond Fund stood at approximately $8.6
million, a decrease of approximately 21% from the January quarter.
In our last report to shareholders, we explained our decision to
maintain a more neutral investment posture. This decision was based
on the possibility that continued strong US economic growth led by a
strong stock market and calmer world financial markets may lead the
Federal Reserve Board to rethink current monetary policy andadopt a
bias to tighten in the months ahead. This strategy enhanced
performance as yields rose considerably because of the strong US
economy and fears that a vigilant Federal Reserve Board would
eventually adopt a tighter monetary policy. Also, a recovery in
world financial and equity markets caused an outflow of "flight to
quality" buyers of Treasury securities.
During the April quarter, the yield on five-year general obligation
tax-exempt bonds rose from 3.70% to 3.90%. We expect to maintain a
relatively neutral posture in the coming months, at least until the
Federal Reserve Board's intentions are clearer and the path of
growth in the US economy moderates from its current strong pace.
Merrill Lynch Florida Limited
Maturity Municipal Bond Fund
During the quarter ended April 30, 1999, the state of Florida
continued to exhibit strong economic growth. Collections of gross
tax receipts which grew at a 3.7% rate in 1997--1998 and were
projected at 4.6% for 1998--1999 were revised up to approximately 6%
by the February Revenue Estimating Conference. Collections through
seven months of 1998--1999 are 8.2% above the comparable year-ago
period. Annual increases are now projected to moderate to
approximately 3% through 2001--2002. The state's revenue growth is
being fueled by a broadening economy, led by strong tourism and the
state's diversifying services industry. Continued nationwide
personal income gains, low inflation and surging consumer
confidence, as well as the quest for increased productivity gains,
are likely to lead to moderate growth in the months ahead. Financial
operations have continued the better-than-expected trend of the past
few years, with the budget stabilization fund at $786.9 million, or
4.4% of revenues, including this year's scheduled transfer from
fiscal 1998's surplus of $100 million. The state also began the year
with $756.8 million in combined general and working capital fund
balances. These are expected to be reduced to some $60 million by
June 2000, since these assets will be drawn into the budget
stabilization fund to manage proposed tax cuts and rebates in the
Governor's proposed fiscal 2000 budget. The state's March seasonally
adjusted unemployment rate stood at 3.9%, which is below the
national rate of 4.2%. State supported debt remains moderate. The
state must continue to maintain strong budget control as it is faced
with increased debt issuance in the upcoming years in order to
maintain and expand a very rapidly growing educational system.
At April 30, 1999, the net assets of Merrill Lynch Florida Limited
Maturity Municipal Bond Fund stood at approximately $18.4 million, a
decrease of approximately 8% from the January quarter. In our last
report to shareholders, we explained our decision to maintain a more
neutral investment strategy. This decision was based on the
possibility that continued strong US economic growth led by a strong
stock market and calmer world financial markets may lead the Federal
Reserve Board to rethink current monetary policy and adopt a bias to
tighten in the months ahead. This strategy enhanced performance as
yields rose considerably because of the strong US economy and fears
that a vigilant Federal Reserve Board would eventually adopt a
tighter monetary policy.
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
April 30, 1999
During the April quarter, the yield on five-year general obligation
tax-exempt bonds rose from 3.70% to 3.90%. We expect to maintain a
relatively neutral posture in the coming months, at least until the
Federal Reserve Board's intentions are clearer and the path of
growth in the US economy moderates from its currently strong pace.
In Conclusion
We appreciate your ongoing interest in Merrill Lynch Multi-State
Limited Maturity Municipal Series Trust, and we look forward to
serving your investment needs in the months and years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Edward J. Andrews)
Edward J. Andrews
Vice President and
Portfolio Manager
June 9, 1999
After more than 20 years of service, Arthur Zeikel recently retired
as Chairman of Merrill Lynch Asset Management, L.P. (MLAM). Mr.
Zeikel served as President of MLAM from 1977 to 1997 and as Chairman
since December 1997. Mr. Zeikel is one of the country's most
respected leaders in asset management and presided over the growth
of Merrill Lynch's asset management business. During his tenure,
client assets under management grew from $300 million to over $500
billion. Mr. Zeikel will remain on Merrill Lynch Multi-State Limited
Maturity Municipal Series Trust's Board of Trustees. We are pleased
to announce that Terry K. Glenn has been elected President and
Trustee of the Fund. Mr. Glenn has held the position of Executive
Vice President of MLAM since 1983.
Mr. Zeikel's colleagues at MLAM join the Fund's Board of Trustees in
wishing him well in his retirement from Merrill Lynch and are
pleased that he will continue as a member of the Fund's Board of
Trustees.
PERFORMANCE DATA
About Fund
Performance
Investors are able to purchase shares of the Trust 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 1% 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 1% if redeemed during the first year, decreasing 1% the
next year to 0%. In addition, Class B Shares are subject to a
distribution fee of 0.20% and an account maintenance fee of 0.15%.
These shares automatically convert to Class D Shares after
approximately 10 years. (There is no initial sales charge for
automatic share conversions.)
* Class C Shares are subject to a distribution fee of 0.20% and an
account maintenance fee of 0.15%. 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 1% and an
account maintenance fee of 0.10% (but no distribution fee).
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Recent Performance
Results" and "Average Annual Total Return" tables assume
reinvestment of all dividends and capital gains distributions at net
asset value on the payable date. 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>
Since Standardized
12 Month 3 Month Inception 30-day Yield
Total Return Total Return Total Return As of 4/30/99
<S> <C> <C> <C> <C>
California Limited Maturity Fund Class A Shares +4.51% -0.19% +25.08% 2.05%
California Limited Maturity Fund Class B Shares +4.14 -0.28 +22.69 1.71
California Limited Maturity Fund Class C Shares +4.33 -0.23 +22.73 1.89
California Limited Maturity Fund Class D Shares +4.30 -0.21 +23.39 1.92
Florida Limited Maturity Fund Class A Shares +4.39 -0.39 +23.93 2.28
Florida Limited Maturity Fund Class B Shares +4.02 -0.48 +21.57 1.95
Florida Limited Maturity Fund Class C Shares +3.97 -0.44 +19.70 2.13
Florida Limited Maturity Fund Class D Shares +4.29 -0.41 +22.12 2.18
<FN>
*Investment results shown do not reflect sales charges; results
would be lower if a sales charge was included. Total investment
returns are based on changes in net asset values for the periods
shown, and assume reinvestment of all dividends and capital gains
distributions at net asset value on the payable date. The since
inception periods for each of the Funds within Merrill Lynch Multi-
State Limited Maturity Municipal Series Trust are Class A & Class B
Shares, from 11/26/93 to 4/30/99 and Class C & Class D Shares, from
10/21/94 to 4/30/99.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
April 30, 1999
PERFORMANCE DATA (concluded)
Average Annual
Total Returns
California Limited Maturity Fund
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 3/31/99 +3.94% +2.90%
Five Years Ended 3/31/99 +4.77 +4.56
Inception (11/26/93) through 3/31/99 +4.30 +4.11
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 3/31/99 +3.57% +2.57%
Five Years Ended 3/31/99 +4.40 +4.40
Inception (11/26/93) through 3/31/99 +3.93 +3.93
[FN]
*Maximum contingent deferred sales charge is 1% and reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Class C Shares* Without CDSC With CDSC**
Year Ended 3/31/99 +3.76% +2.76%
Inception (10/21/94) through 3/31/99 +4.75 +4.75
[FN]
*Maximum contingent deferred sales charge is 1% and reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Year Ended 3/31/99 +3.73% +2.70%
Inception (10/21/94) through 3/31/99 +4.88 +4.64
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
Florida Limited Maturity Fund
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 3/31/99 +3.80% +2.76%
Five Years Ended 3/31/99 +4.51 +4.31
Inception (11/26/93) through 3/31/99 +4.06 +3.87
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 3/31/99 +3.43% +2.43%
Five Years Ended 3/31/99 +4.14 +4.14
Inception (11/26/93) through 3/31/99 +3.69 +3.69
[FN]
*Maximum contingent deferred sales charge is 1% and reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Class C Shares* Without CDSC With CDSC**
Year Ended 3/31/99 +3.35% +2.35%
Inception (10/21/94) through 3/31/99 +4.09 +4.09
[FN]
*Maximum contingent deferred sales charge is 1% and reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Class D Shares* Sales Charge Sales Charge**
Year Ended 3/31/99 +3.59% +2.56%
Inception (10/21/94) through 3/31/99 +4.56 +4.32
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
PORTFOLIO COMPOSITION
For the Quarter Ended April 30, 1999
California
Limited Maturity
Municipal
Bond Fund
Distribution by Market Sector*
General Obligations & Tax Revenue Bonds 20.1%
Prerefunded Bonds** 5.0
Other Revenue Bonds 74.9
-------
Total 100.0%
=======
Net assets as of April 30, 1999 were $8,613,262.
Quality Ratings*
(Based on Nationally Recognized Rating Services)
AAA/Aaa 50%
AA/Aa 40%
A/A 10%
[FN]
*Based on total market value of the portfolio as of April 30, 1999.
**Backed by a fund holding US Treasury or other high-quality
securities.
Florida
Limited Maturity
Municipal
Bond Fund
Distribution by Market Sector*
Prerefunded Bonds** 51.1%
General Obligations & Tax Revenue Bonds 22.3
Utility Revenue Bonds 3.0
Other Revenue Bonds 23.6
-------
Total 100.0%
=======
Net assets as of April 30, 1999 were $18,419,516.
Quality Ratings*
(Based on Nationally Recognized Rating Services)
AAA/Aaa 72%
AA/Aa 22%
A/A 6%
[FN]
*Based on total market value of the portfolio as of April 30, 1999.
**Backed by a fund holding US Treasury or other high-quality
securities.
