MERRILL LYNCH
MULTI-STATE
LIMITED MATURITY
MUNICIPAL
SERIES TRUST
FUND LOGO
Annual Report
July 31, 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,
July 31, 1999
TO OUR SHAREHOLDERS
The Municipal Market Environment
During the three months ended July 31, 1999, long-term bond yields
continued to rise. Steady US economic growth combined with
improvement in foreign economies, most notably Japan and Brazil, as
well as an inflation scare in early May put upward pressure on bond
yields throughout the period. Continued strong US employment growth,
particularly the decline in the US unemployment rate to 4.2% in
early June, was among the reasons the Federal Reserve Board cited
for raising short-term interest rates in late June. US Treasury bond
yields reacted by climbing above 6.15% by late June before improving
somewhat to 6.10% by July 31, 1999. During the last three months,
yields on long-term US Treasury securities increased approximately
45 basis points (0.45%).
Long-term tax-exempt bond yields also rose during the last three
months. Until early May, the municipal bond market had been able to
withstand much of the upward pressure on bond yields. However,
investor concerns regarding ongoing US economic strength and the
fear of additional moves by the Federal Reserve Board eventually
pushed municipal bond yields higher throughout June and July. During
the period, the yields on long-term tax-exempt revenue bonds rose
over 35 basis points to 5.65%, as measured by the Bond Buyer Revenue
Bond Index.
The ability of the tax-exempt bond market to withstand much of the
recent upward pressure on long-term bond yields has been a
reflection of the continued strong technical position the municipal
bond market has enjoyed in recent quarters. During the last six
months, more than $120 billion in long-term municipal bonds was
underwritten, a decrease of more than 20% compared to the same
period a year ago. During the past three months, more than $60
billion in municipal bonds was issued by US municipalities. This
quarterly issuance represents a decline of nearly 25% compared to
the same three-month period in 1998.
Recently, the municipal supply position deteriorated even further.
Total issuance in July 1999 of $16.5 billion was more than 30% lower
than July 1998 levels. Additionally, in June and July, investors
received more than $40 billion in coupon income and proceeds from
bond maturities and early bond redemptions. These proceeds have
generated significant retail investor interest, easily absorbing the
recent diminished supply. This very favorable supply/demand position
allowed the tax-exempt bond market to outperform its taxable
counterpart in recent months.
However, the recent relative outperformance of the municipal bond
market has somewhat reduced the very attractive tax-exempt bond
yield ratios that were available at the end of 1998. In December
1998, long-term, uninsured municipal bond yields were higher than
those of their taxable counterparts. Historically, long-term tax-
exempt bond yields have been approximately 82%--85% of long-term US
Treasury bond yields. Municipal bond yields rose at a lower rate in
recent months than US Treasury bond yields, causing the yield ratio
to decline. At July 31, 1999, long-term municipal bond yields were
approximately 92% of their taxable counterparts. Current ratios,
while lower than those available at the end of 1998, still represent
historically attractive levels. We expect the municipal bond market
to maintain its strong technical position for the remainder of 1999.
Consequently, there appears to be little reason for the tax-exempt
bond market to underperform the taxable US Treasury bond market.
This suggests that the present bond yield ratio is likely to remain
stable in the coming months and that a return to a ratio in excess
of 100% of taxable Treasury securities is improbable.
Looking ahead, it appears to us that long-term municipal bond yields
will trade in a relatively tight range near current levels. Strong
US economic performance is being balanced by nearly negligible
inflation data, as well as improvements in productivity in both
manufacturing and service industries. We believe that future moves
by the Federal Reserve Board have largely been discounted by bond
markets and are to a great extent reflected in present bond yields.
Any improvement in bond prices is likely to be contingent upon
weakening in both US employment growth and consumer spending. The
100 basis point rise in US Treasury bond yields seen thus far this
year is likely to negatively affect US economic growth. The US
housing market will be among the first sectors likely to be
affected, as some declines have already been evidenced because of
higher mortgage rates. We believe it is also unrealistic to expect
double-digit returns in US equity markets to continue indefinitely.
Much of the US consumer's wealth is tied to recent stock market
appreciation. Any slowing in these incredible growth rates is likely
to reduce consumer spending. These factors suggest that the worst of
the recent increase in bond yields has passed and stable, if not
slightly improving, bond prices may be expected.
Merrill Lynch California Limited
Maturity Municipal Bond Fund
Fiscal Year in Review
We began the Fund's fiscal year with a bullish strategy as concerns
about liquidity in the banking system brought about by the global
financial crisis caused investors to seek safety in US dollar-
denominated assets. Subsequently, interest rates dropped
dramatically, and the Federal Reserve Board lowered the Federal
Funds rate 25 basis points three times in order to provide liquidity
during the global financial crisis. However, the US stock market
resumed its climb after an initial fall and US economic growth
remained solid.
This environment caused us to adopt a neutral posture in the second
half of the fiscal year. This strategy enhanced the Fund's
performance considerably as tax-exempt interest rates rose
dramatically in May and June 1999 and the Federal Reserve Board
tightened monetary policy by raising the Federal Funds rate 25 basis
points in late June 1999. This move by the Federal Reserve Board was
done in order to slow an economy whose tightening labor markets,
surging oil prices and strong consumer demand threatened to upset
the long quiet inflationary picture. We look to maintain our neutral
investment strategy into the October quarter since we expect US
growth to moderate from its current strong rate.
Portfolio Matters
At July 31, 1999, net assets of Merrill Lynch California Limited
Maturity Municipal Bond Fund stood at approximately $8.3 million, a
decrease of approximately 4% from April 30, 1999.
During the quarter ended July 31, 1999, the state of California
continued to exhibit strong economic growth led by a resurgence in
trade growth with Asia as economic conditions there appear to have
bottomed out. Additionally, continued strong gains in retail sales,
computer technology and entertainment have added to economic growth.
Rather than slowing as fiscal watchdogs had expected, the state's
economic expansion has regained momentum. Both employment and
personal income are showing better-than-expected growth with
increases of 3.5% and 6.1%, respectively. The state's June 1999
seasonally adjusted unemployment rate stood at 5.4%, well above the
national average, although almost 12% higher than the state's pre-
recession level. Similar gains for employment and personal income
are expected in the October quarter with some slowing forecast for
2000. State personal income growth was faster than the national rate
in both 1997 and 1998, reversing the state's lagging trend of 1991--
1996. The economic resurgence has caused upward revisions for the
proposed 1999--2000 budget. Revenues are expected to be raised up
2.9% this year and 4.5% for next year, mostly in response to the
increased rate of personal income tax collections. The new estimates
add about $4.3 billion in revenue, which could provide almost $2.7
billion to be used for the reserve fund, set asides and capital
allocation of more than 4% of estimated revenues. The state's debt
position continues to be favorable with net tax supported debt of
about $23.1 billion, or $731 per capita and 2.6% of personal income,
both very moderate ratios.
Merrill Lynch Florida Limited
Maturity Municipal Bond Fund
Fiscal Year in Review
At the beginning of the fiscal year, concerns about liquidity in the
banking system brought about by the global financial crisis caused
investors to seek safety in US dollar-denominated assets. These
conditions led us to position the Fund in anticipation of lower
interest rates. Subsequently, interest rates dropped dramatically,
and the Federal Reserve Board lowered the Federal Funds rate 25
basis points three times in order to provide liquidity during the
global financial crisis. However, the US stock market resumed its
climb after an initial fall and US economic growth remained solid.
This environment caused us to adopt a neutral position until US
growth moderated or the Federal Reserve Board's intentions on
interest rates could be more readily ascertained. This posture
benefited Fund performance considerably as tax-exempt interest rates
rose dramatically in May and June 1999 and the Federal Reserve Board
tightened monetary policy by raising the Federal Funds rate 25 basis
points in late June 1999. This move by the Federal Reserve Board was
done in order to slow an economy whose tightening labor markets,
surging oil prices and strong consumer demand threatened to upset
the long quiet inflationary picture. We plan to maintain our neutral
investment strategy into the October quarter since we believe US
growth will moderate from its current strong rate.
Portfolio Matters
At July 31, 1999, net assets of Merrill Lynch Florida Limited
Maturity Municipal Bond Fund stood at approximately $14.4 million.
This represents a decrease of approximately 22% from April 30, 1999.
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
July 31, 1999
During the quarter ended July 31, 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 a 6.0% rate for 1998--1999, actually rose 7.7%. The
state's revenue growth continues to be fueled by nationwide personal
income gains, low inflation and surging consumer confidence, which
has increased the state's tourism boom, revitalized housing gains
and bolstered the state's diversifying services industry. Financial
operations have continued to exceed expectations with the budget
stabilization fund at $787 million, or 4.4% of 1998--1999 revenues.
Additionally, the state closed 1998--1999 with $573.8 million in
combined general and working capital fund balances, affording the
equivalent of a further 3.2% of revenues although this number may
close lower. The adopted 1999--2000 budget included considerable
tax relief, over half of which is ongoing and principally relating
to reductions in the intangible tax, mirroring the Governor's
recommendations. State-supported debt has remained moderate over a
long period, and at $12.3 billion is equal to $872 per capita and
3.2% of personal income. The state has initiated a debt
affordability study to deal with its rapidly growing educational
system and the structure of debt issuance in the years ahead. In
June, the state's seasonally adjusted unemployment rate stood at
3.9%, below the national average of 4.3%.
In Conclusion
We thank you for your support of Merrill Lynch Multi-State Limited
aturity 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
September 9, 1999
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.
California Limited Maturity Fund's Class A and Class B Shares--
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the
Portfolio's Class A Shares and Class B Shares compared to growth of
an investment in the Merrill Lynch U1AO Index. Beginning and ending
values are:
11/26/93** 7/99
California
Limited Maturity Fund++--
Class A Shares $ 9,900 $12,292
California
Limited Maturity Fund++--
Class B Shares* $10,000 $12,169
Merrill Lynch
U1AO Index++++ $10,000 $12,724
California Limited Maturity Fund's Class C and Class D Shares--
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the
Portfolio's Class C Shares and Class D Shares compared to growth of
an investment in the Merrill Lynch U1AO Index. Beginning and ending
values are:
10/21/94** 7/99
California
Limited Maturity Fund++--
Class C Shares $10,000 $12,179
California
Limited Maturity Fund++--
Class D Shares* $ 9,900 $12,137
Merrill Lynch
U1AO Index++++ $10,000 $12,460
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of Operations.
++California Limited Maturity Fund invests in a portfolio of
securities consisting primarily of intermediate-term investment-
grade obligations issued by or on behalf of the state of California
or its political subdivisions, agencies, or instrumentalities, and
obligations of other qualifying issuers.
++++This unmanaged Index is comprised of AAA-rated municipal bonds
maturing within three years.
California Limited
Maturity Fund
Average Annual
Total Return
California Limited Maturity Fund
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 6/30/99 +2.15% +1.13%
Five Years Ended 6/30/99 +4.28 +4.07
Inception (11/26/93) through 6/30/99 +3.88 +3.69
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
% Return % Return
Class C Shares* Without CDSC With CDSC**
Year Ended 6/30/99 +2.08% +1.09%
Inception (10/21/94) through 6/30/99 +4.21 +4.21
[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 B Shares* Without CDSC With CDSC**
Year Ended 6/30/99 +1.89% +0.90%
Five Years Ended 6/30/99 +3.91 +3.91
Inception (11/26/93) through 6/30/99 +3.51 +3.51
[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 6/30/99 +2.15% +1.13%
Inception (10/21/94) through 6/30/99 +4.36 +4.13
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
July 31, 1999
PERFORMANCE DATA (concluded)
Florida Limited Maturity Fund's Class A and Class B Shares--
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the
Portfolio's Class A Shares and Class B Shares compared to growth of
an investment in the Merrill Lynch U1AO Index. Beginning and ending
values are:
11/26/93** 7/99
Florida
Limited Maturity Fund++--
Class A Shares $ 9,900 $12,160
Florida
Limited Maturity Fund++--
Class B Shares* $10,000 $12,026
Merrill Lynch
U1AO Index++++ $10,000 $12,724
Florida Limited Maturity Fund's Class C and Class D Shares--
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the
Portfolio's Class C Shares and Class D Shares compared to growth of
an investment in the Merrill Lynch U1AO Index. Beginning and ending
values are:
10/21/94** 7/99
Florida
Limited Maturity Fund++--
Class C Shares $10,000 $11,858
Florida
Limited Maturity Fund++--
Class D Shares* $ 9,900 $11,980
Merrill Lynch
U1AO Index++++ $10,000 $12,460
[FN]
*Assuming maximum sales charge, transaction costs and other
operating expenses, including advisory fees.
**Commencement of operations.
++Florida Limited Maturity Fund invests in a portfolio of securities
consisting primarily of intermediate-term investment-grade
obligations issued by or on behalf of the state of Florida or its
political subdivisions, agencies, or instrumentalities, and
obligations of other qualifying issuers.
++++This unmanaged Index is comprised of AAA-rated municipal bonds
maturing within three years.
Past performance is not predictive of future performance.
Florida Limited
Maturity Fund
Average Annual
Total Return
Florida Limited Maturity Fund
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 6/30/99 +1.63% +0.61%
Five Years Ended 6/30/99 +4.03 +3.82
Inception (11/26/93) through 6/30/99 +3.66 +3.47
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
% Return % Return
Class C Shares* Without CDSC With CDSC**
Year Ended 6/30/99 +1.37% +0.39%
Inception (10/21/94) through 6/30/99 +3.59 +3.59
[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 B Shares* Without CDSC With CDSC**
Year Ended 6/30/99 +1.37% +0.39%
Five Years Ended 6/30/99 +3.65 +3.65
Inception (11/26/93) through 6/30/99 +3.29 +3.29
[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 6/30/99 +1.53% +0.51%
Inception (10/21/94) through 6/30/99 +4.04 +3.82
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
<TABLE>
Recent
Performance
Results*
<CAPTION>
Since Standardized
12 Month 3 Month Inception 30-day Yield
Total Total Total As of
Return Return Return 7/31/99
<S> <C> <C> <C> <C>
California Limited Maturity Fund Class A Shares +2.20% -0.73% +24.17% 2.41%
California Limited Maturity Fund Class B Shares +1.93 -0.81 +21.69 2.08
California Limited Maturity Fund Class C Shares +2.12 -0.77 +21.79 2.27
California Limited Maturity Fund Class D Shares +2.20 -0.65 +22.58 2.31
Florida Limited Maturity Fund Class A Shares +2.01 -0.89 +22.83 2.68
Florida Limited Maturity Fund Class B Shares +1.54 -1.07 +20.26 2.36
Florida Limited Maturity Fund Class C Shares +1.68 -0.94 +18.58 2.55
Florida Limited Maturity Fund Class D Shares +1.80 -0.91 +21.00 2.59
<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 dates for each of the Funds within Merrill Lynch Multi-
State Limited Maturity Municipal Series Trust are from 11/26/93 for
Class A &Class B Shares and from 10/21/94 for Class C & Class D
Shares.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
July 31, 1999
Portfolio
Abbrevations
To simplify the listings of Merrill Lynch Multi-State Limited
Maturity Municipal Series Trust'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)
COP Certificates of Participation
GO General Obligation Bonds
PCR Pollution Control Revenue Bonds
TRAN Tax Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
California Limited Maturity Municipal Bond Fund
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
California NR* A1 $400 California Educational Facilities Authority, Revenue Refunding
- --99.0% Bonds (Loyola Marymount University), 5.70% due 10/01/2002 $ 420
California Health Facilities Financing Authority, Revenue
Refunding Bonds (a):
AAA Aaa 500 (Catholic Insured Health Facility), Series A, 5.30% due 7/01/2003 521
A1+ VMIG1++ 100 (Sutter/Chs), VRDN, Series B, 3% due 7/01/2012 (c) 100
A1 P1 200 California Pollution Control Financing Authority, PCR, Refunding
(Southern California Edison), VRDN, Series C, 3.35% due
2/28/2008 (c) 200
California State, GO:
A+ Aa3 750 6.75% due 10/01/2003 824
AAA Aaa 750 6.35% due 11/01/2004 (b) 825
AAA Aaa 500 California Statewide Communities Development Authority, Lease
Revenue Refunding Bonds (Oakland Convention Center Projects),
5.70% due 10/01/2002 (a) 524
NR* A 400 Coachella Valley, California, Water District Improvement,
District Number 71, Storm Water District, COP (Flood Control
Project), 6.60% due 10/01/2002 (d) 438
AAA Aaa 200 Los Angeles, California, Department of Airports, Airport
Revenue Refunding Bonds, Series A, 6% due 5/15/2005 (b) 217
A+ Aa3 650 Los Angeles, California, Department of Water and Power,
Electric Plant Revenue Bonds, 6% due 4/01/2002 682
Los Angeles, California, Harbor Department Revenue Bonds,
AMT, Series B:
AA Aa3 295 6% due 8/01/2001 306
AA Aa3 500 6% due 8/01/2004 531
AA- Aa1 1,000 Los Angeles County, California, Public Works Financing
Authority, Revenue Refunding Bonds (Capital Construction),
4.80% due 3/01/2004 1,023
AAA Aaa 400 Napa County, California, Flood Protection and Watershed
Improvement Authority Revenue Bonds, Series A, 4.60% due
6/15/2009 (b) 398
SP1+ MIG1++ 400 San Bernardino County, California, GO, TRAN, 3.75% due 9/29/2000 401
AAA Aaa 200 San Diego County, California, Regional Transportation
Commission, Sales Tax Revenue Bonds, Second Senior Series A,
5.25% due 4/01/2002 (a) 206
AAA Aaa 500 University of California, Revenue Refunding Bonds (Multi-Purpose
Projects), Series C, 10% due 9/01/2001 (a) 560
Total Investments (Cost--$7,773)--99.0% 8,176
Other Assets Less Liabilities--1.0% 86
-------
Net Assets--100.0% $ 8,262
=======
<FN>
(a)AMBAC Insured.
(b)FGIC Insured.
(c)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at July 31, 1999.
See Notes to Financial Statements.
<CAPTION>
Florida Limited Maturity Municipal Bond Fund
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Florida-- AAA Aaa $1,000 Dade County, Florida, GO, Series I, 6.90% due 7/01/2003 (a) $ 1,093
92.3% AAA Aaa 835 Dunedin, Florida, Hospital Revenue Bonds (Mease Health Care),
6.75% due 11/15/2001 (d)(e) 899
AA+ Aa2 1,000 Florida State Board of Education, Capital Outlay, GO (Public
Education), Series B, 5.625% due 6/01/2005 1,060
AA+ Aa2 850 Florida State Board of Education, Capital Outlay, GO, Refunding
(Public Education), 5.50% due 6/01/2001 873
AAA Aaa 1,730 Florida State Bond Finance Division, Department of General
Services, Revenue Refunding Bonds (Save Our Coast--Department of
Natural Resources Preservation), 6.30% due 7/01/2001 (d)(e) 1,819
A A 100 Hillsborough County, Florida, Capital Improvement Revenue
Refunding Bonds (County Center Project), Second Series, 6.75%
due 7/01/2002 (e) 109
AA Aa2 1,000 Jacksonville, Florida, Electric Authority, Revenue Refunding
Bonds (Saint John's River), Issue 2, Series 6-C, 6.50% due
10/01/2001 1,042
AA NR* 1,000 Jacksonville, Florida, Electric Authority, Special Obligation
Revenue Refunding Bonds (Saint John's River), Third Series,
6.65% due 10/01/2000 (e) 1,048
AAA Aaa 250 Kissimmee, Florida, Water and Sewer Revenue Refunding Bonds,
5.40% due 10/01/2002 (a) 260
AA- A1 650 Lakeland, Florida, Electric and Water Revenue Refunding and
Improvement Bonds, Series B, 5.625% due 10/01/2006 (e) 695
AAA Aaa 250 Lee County, Florida, Water and Sewer Revenue Bonds, Series A,
4.10% due 10/01/2008 (a) 236
AAA Aaa 850 North Miami, Florida, Health Facilities Authority, Health
Facility Revenue Refunding Bonds (Bon Secours Health System
Project), 6% due 8/15/2002 (c)(e) 909
AA- Aaa 850 Orlando, Florida, Utilities Commission, Water and Electric
Revenue Bonds, Sub-Series A, 6.50% due 10/01/2001 (e) 909
AAA Aaa 1,000 Palm Bay, Florida, Utility Revenue Bonds (Palm Bay Utility
Corporation Project), Series B, 6.20% due 10/01/2002 (d)(e) 1,078
AAA Aaa 800 Sunrise, Florida, Utility System Revenue Bonds, Series A, 5.75%
due 10/01/2006 (a)(e) 862
AAA Aaa 400 Tampa, Florida, Water and Sewer Revenue Refunding Bonds, Series
A, 6% due 10/01/2002 (b)(e) 425
Puerto A Baa1 900 Puerto Rico Commonwealth, GO, Refunding, 5.30% due 7/01/2004 933
Rico--6.5%
Total Investments (Cost--$13,985)--98.8% 14,250
Other Assets Less Liabilities--1.2% 178
-------
Net Assets--100.0% $14,428
=======
<FN>
(a)AMBAC Insured.
(b)FGIC Insured.
(c)FSA Insured.
(d)Prerefunded.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Deloitte & Touche
LLP.
(d)MBIA Insured.
(e)Prerefunded.
*Not Rated.
Ratings of issues shown have not been audited by Deloitte & Touche
LLP.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
July 31, 1999
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
<CAPTION>
California Florida
Limited Limited
Maturity Maturity
As of July 31, 1999 Fund Fund
<S> <S> <C> <C>
Assets: Investments, at value* (Note 1a) $ 8,176,111 $ 14,250,028
Cash 27,070 --
Receivables:
Interest 145,255 200,864
Securities sold -- 100,226
Prepaid registration fees and other assets (Note 1e) 661 1,332
------------ ------------
Total assets 8,349,097 14,552,450
------------ ------------
Liabilities: Payables:
Beneficial interest redeemed 36,067 --
Dividends to shareholders (Note 1f) 4,006 7,577
Investment adviser (Note 2) 1,098 4,427
Distributor (Note 2) 1,443 2,617
Accrued expenses and other liabilities 44,739 109,613
------------ ------------
Total liabilities 87,353 124,234
------------ ------------
Net Assets: Net assets $ 8,261,744 $14,428,216
============ ===========
Net Assets Class A Shares of beneficial interest, $.10 par value,
Consist of: unlimited shares authorized $ 12,890 $ 41,107
Class B Shares of beneficial interest, $.10 par value,
unlimited shares authorized 37,075 78,933
Class C Shares of beneficial interest, $.10 par value,
unlimited shares authorized 1,137 651
Class D Shares of beneficial interest, $.10 par value,
unlimited shares authorized 31,239 25,586
Paid-in capital in excess of par 8,074,324 14,675,781
Accumulated realized capital losses on investments--net (Note 5) (298,036) (659,332)
Unrealized appreciation on investments--net 403,115 265,490
------------ ------------
Net assets $ 8,261,744 $ 14,428,216
============ ============
Net Asset Value: Class A: Net assets $ 1,293,476 $ 4,055,471
============ ============
Shares outstanding 128,904 411,071
============ ============
Net asset value $ 10.03 $ 9.87
============ ============
Class B: Net assets $ 3,718,473 $ 7,786,646
============ ============
Shares outstanding 370,754 789,328
============ ============
Net asset value $ 10.03 $ 9.86
============ ============
Class C: Net assets $ 114,007 $ 63,739
============ ============
Shares outstanding 11,366 6,506
============ ============
Net asset value $ 10.03 $ 9.80
============ ============
Class D: Net assets $ 3,135,788 $ 2,522,360
============ ============
Shares outstanding 312,389 255,863
============ ============
Net asset value $ 10.04 $ 9.86
============ ============
<FN>
*Identified cost $ 7,772,996 $ 13,984,538
============ ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF OPERATIONS
<CAPTION>
California Florida
Limited Limited
Maturity Maturity
For the Year Ended July 31, 1999 Fund Fund
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 465,508 $ 883,233
Income ------------ ------------
(Note 1d):
Expenses: Investment advisory fees (Note 2) 34,190 64,562
Professional fees 44,971 51,834
Accounting services (Note 2) 36,246 42,391
Printing and shareholder reports 13,632 49,542
Trustees' fees and expenses 15,162 30,396
Account maintenance and distribution fees--Class B (Note 2) 15,589 29,430
Registration fees (Note 1e) 17,470 17,275
Account maintenance fees--Class D (Note 2) 3,741 5,250
Custodian fees 2,958 3,576
Pricing fees 2,926 3,412
Amortization of organization expenses (Note 1e) 1,168 3,855
Transfer agent fees--Class B (Note 2) 1,685 2,136
Transfer agent fees--Class D (Note 2) 1,108 983
Transfer agent fees--Class A (Note 2) 438 892
Account maintenance and distribution fees--Class C (Note 2) 172 85
Transfer agent fees--Class C (Note 2) 59 20
Other 2,283 2,841
------------ ------------
Total expenses before reimbursement 193,798 308,480
Reimbursement of expenses (Note 2) (19,537) --
------------ ------------
Total expenses after reimbursement 174,261 308,480
------------ ------------
Investment income--net 291,247 574,753
------------ ------------
Realized & Realized gain on investments--net 38,866 49,224
Unrealized Change in unrealized appreciation on investments--net (116,580) (282,262)
Gain (Loss) on ------------ ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 213,533 $ 341,715
(Notes 1b, ============ ============
1d & 3):
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
July 31, 1999
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
California Limited Florida Limited
Maturity Fund Maturity Fund
For the Year For the Year
Ended July 31, Ended July 31,
Increase (Decrease) in Net Assets: 1999 1998 1999 1998
<S> <S> <C> <C> <C> <C>
Operations: Investment income--net $ 291,247 $ 438,283 $ 574,753 $ 827,683
Realized gain on investments--net 38,866 135,816 49,224 69,426
Change in unrealized appreciation
on investments--net (116,580) (244,868) (282,262) (229,527)
------------ ----------- ----------- -----------
Net increase in net assets resulting
from operations 213,533 329,231 341,715 667,582
------------ ----------- ----------- -----------
Dividends to Investment income--net:
Shareholders Class A (46,359) (100,638) (156,605) (228,224)
(Note 1f): Class B (125,870) (210,256) (247,981) (349,950)
Class C (3,446) (2,663) (1,739) (615)
Class D (115,572) (124,726) (168,428) (248,894)
------------ ----------- ----------- -----------
Net decrease in net assets resulting
from dividends to shareholders (291,247) (438,283) (574,753) (827,683)
------------ ----------- ----------- -----------
Beneficial Net decrease in net assets derived
Interest from beneficial interest transactions (741,002) (4,939,204) (4,046,299) (6,762,222)
Transactions ------------ ----------- ----------- -----------
(Note 4):
Net Assets: Total decrease in net assets (818,716) (5,048,256) (4,279,337) (6,922,323)
Beginning of year 9,080,460 14,128,716 18,707,553 25,629,876
------------ ----------- ----------- -----------
End of year $ 8,261,744 $ 9,080,460 $14,428,216 $18,707,553
============ =========== =========== ===========
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
California Limited Maturity Fund
Class A
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.13 $ 10.22 $ 10.05 $ 9.99 $ 9.88
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .32 .39 .38 .39 .42
Realized and unrealized gain
(loss) on investments--net (.10) (.09) .17 .06 .11
----------- ----------- ----------- ----------- -----------
Total from investment
operations .22 .30 .55 .45 .53
----------- ----------- ----------- ----------- -----------
Less dividends from investment
income--net (.32) (.39) (.38) (.39) (.42)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 10.03 $ 10.13 $ 10.22 $ 10.05 $ 9.99
=========== =========== =========== =========== ===========
Total Investment Based on net asset value
Return:* per share 2.20% 2.96% 5.57% 4.56% 5.60%
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.59% 1.12% 1.08% .94% .40%
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.79% 1.32% 1.28% 1.30% 1.44%
=========== =========== =========== =========== ===========
Investment income--net 3.18% 3.82% 3.75% 3.89% 4.36%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of year
Data: (in thousands) $ 1,294 $ 1,460 $ 3,152 $ 3,162 $ 3,527
=========== =========== =========== =========== ===========
Portfolio turnover 44.37% 24.65% 26.86% 11.09% 124.72%
=========== =========== =========== =========== ===========
<CAPTION>
California Limited Maturity Fund
Class B
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.12 $ 10.21 $ 10.04 $ 9.99 $ 9.88
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .29 .35 .34 .36 .39
Realized and unrealized gain
(loss) on investments--net (.09) (.09) .17 .05 .11
----------- ----------- ----------- ----------- -----------
Total from investment
operations .20 .26 .51 .41 .50
----------- ----------- ----------- ----------- -----------
Less dividends from investment
income--net (.29) (.35) (.34) (.36) (.39)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 10.03 $ 10.12 $ 10.21 $ 10.04 $ 9.99
=========== =========== =========== =========== ===========
Total Investment Based on net asset value
Return:* per share 1.93% 2.59% 5.20% 4.08% 5.23%
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.94% 1.51% 1.44% 1.30% .76%
Net Assets: =========== =========== =========== =========== ===========
Expenses 2.14% 1.71% 1.64% 1.66% 1.80%
=========== =========== =========== =========== ===========
Investment income--net 2.83% 3.45% 3.39% 3.53% 4.00%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of year (in
Data: thousands) $ 3,718 $ 4,812 $ 6,877 $ 9,919 $ 10,363
=========== =========== =========== =========== ===========
Portfolio turnover 44.37% 24.65% 26.86% 11.09% 124.72%
=========== =========== =========== =========== ===========
<FN>
*Total investment returns exclude the effects of sales charges.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
July 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
California Limited Maturity Fund
Class C
For the
The following per share data and ratios have been derived Period
from information provided in the financial statements. Oct. 21, 1994++
For the Year Ended July 31, to July 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of
Operating period $ 10.12 $ 10.22 $ 10.05 $ 9.99 $ 9.76
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .31 .37 .36 .37 .31
Realized and unrealized gain
(loss) on investments--net (.09) (.10) .17 .06 .23
----------- ----------- ----------- ----------- -----------
Total from investment operations .22 .27 .53 .43 .54
----------- ----------- ----------- ----------- -----------
Less dividends from investment
income--net (.31) (.37) (.36) (.37) (.31)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 10.03 $ 10.12 $ 10.22 $ 10.05 $ 9.99
=========== =========== =========== =========== ===========
Total Investment Based on net asset value
Return:** per share 2.12% 2.68% 5.39% 4.35% 5.60%+++
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.76% 1.36% 1.25% 1.14% .82%*
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.96% 1.56% 1.45% 1.50% 1.98%*
=========== =========== =========== =========== ===========
Investment income--net 3.00% 3.61% 3.58% 3.69% 4.04%*
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period
Data: (in thousands) $ 114 $ 95 $ 57 $ 55 $ 64
=========== =========== =========== =========== ===========
Portfolio turnover 44.37% 24.65% 26.86% 11.09% 124.72%
=========== =========== =========== =========== ===========
<CAPTION>
California Limited Maturity Fund
Class D
For the
The following per share data and ratios have been derived Period
from information provided in the financial statements. Oct. 21, 1994++
For the Year Ended July 31, to July 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of period $ 10.13 $ 10.22 $ 10.05 $ 9.99 $ 9.76
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .31 .38 .37 .38 .33
Realized and unrealized gain
(loss) on investments--net (.09) (.09) .17 .06 .23
----------- ----------- ----------- ----------- -----------
Total from investment operations .22 .29 .54 .44 .56
----------- ----------- ----------- ----------- -----------
Less dividends from investment
income--net (.31) (.38) (.37) (.38) (.33)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 10.04 $ 10.13 $ 10.22 $ 10.05 $ 9.99
=========== =========== =========== =========== ===========
Total Investment Based on net asset value
Return:** per share 2.20% 2.86% 5.47% 4.46% 5.85%+++
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.67% 1.25% 1.15% 1.06% .66%*
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.87% 1.45% 1.35% 1.40% 1.81%*
=========== =========== =========== =========== ===========
Investment income--net 3.09% 3.70% 3.69% 3.77% 4.28%*
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period
Data: (in thousands) $ 3,136 $ 2,713 $ 4,043 $ 2,185 $ 1,771
=========== =========== =========== =========== ===========
Portfolio turnover 44.37% 24.65% 26.86% 11.09% 124.72%
=========== =========== =========== =========== ===========
<CAPTION>
Florida Limited Maturity Fund
Class A
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.00 $ 10.07 $ 9.96 $ 10.02 $ 9.87
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .33 .38 .40 .40 .43
Realized and unrealized gain
(loss) on investments--net (.13) (.07) .11 (.06) .15
----------- ----------- ----------- ----------- -----------
Total from investment operations .20 .31 .51 .34 .58
----------- ----------- ----------- ----------- -----------
Less dividends from investment
income--net (.33) (.38) (.40) (.40) (.43)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 9.87 $ 10.00 $ 10.07 $ 9.96 $ 10.02
=========== =========== =========== =========== ===========
Total Investment Based on net asset value
Return:** per share 2.01% 3.17% 5.20% 3.45% 6.05%
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.48% 1.19% 1.09% .89% .39%
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.48% 1.19% 1.09% .97% 1.03%
=========== =========== =========== =========== ===========
Investment income--net 3.31% 3.81% 3.98% 4.01% 4.39%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of year
Data: (in thousands) $ 4,055 $ 5,331 $ 6,376 $ 7,874 $ 9,849
=========== =========== =========== =========== ===========
Portfolio turnover 18.60% 39.52% 35.67% 39.90% 138.97%
=========== =========== =========== =========== ===========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++Commencement of operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust, July 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Florida Limited Maturity Fund
Class B
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of year $ 10.00 $ 10.07 $ 9.96 $ 10.02 $ 9.88
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .30 .35 .36 .37 .40
Realized and unrealized gain
(loss) on investments--net (.14) (.07) .11 (.06) .14
----------- ----------- ----------- ----------- -----------
Total from investment operations .16 .28 .47 .31 .54
----------- ----------- ----------- ----------- -----------
Less dividends from investment
income--net (.30) (.35) (.36) (.37) (.40)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 9.86 $ 10.00 $ 10.07 $ 9.96 $ 10.02
=========== =========== =========== =========== ===========
Total Investment Based on net asset value
Return:** per share 1.54% 2.80% 4.83% 3.08% 5.57%
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.84% 1.54% 1.45% 1.24% .75%
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.84% 1.54% 1.45% 1.32% 1.38%
=========== =========== =========== =========== ===========
Investment income--net 2.95% 3.46% 3.63% 3.66% 4.05%
=========== =========== =========== =========== ===========
Supplemental Net assets, end of year
Data: (in thousands) $ 7,787 $ 8,014 $ 11,461 $ 13,690 $ 16,213
=========== =========== =========== =========== ===========
Portfolio turnover 18.60% 39.52% 35.67% 39.90% 138.97%
=========== =========== =========== =========== ===========
<CAPTION>
Florida Limited Maturity Fund
Class C
For the
The following per share data and ratios have been derived Period
from information provided in the financial statements. Oct. 21, 1994++
For the Year Ended July 31, to July 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of period $ 9.93 $ 10.00 $ 9.90 $ 10.01 $ 9.76
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .30 .33 .38 .36 .29
Realized and unrealized gain
(loss) on investments--net (.13) (.07) .10 (.11) .25
----------- ----------- ----------- ----------- -----------
Total from investment operations .17 .26 .48 .25 .54
----------- ----------- ----------- ----------- -----------
Less dividends from investment
income--net (.30) (.33) (.38) (.36) (.29)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 9.80 $ 9.93 $ 10.00 $ 9.90 $ 10.01
=========== =========== =========== =========== ===========
Total Investment Based on net asset value
Return:** per share 1.68% 2.65% 4.93% 2.48% 5.65%+++
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.66% 1.29% 1.26% 1.21% 1.09%*
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.66% 1.29% 1.26% 1.23% 1.67%*
=========== =========== =========== =========== ===========
Investment income--net 3.06% 3.78% 3.83% 3.75% 3.83%*
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period
Data: (in thousands) $ 64 $ 1 $ 60 $ 52 $ 1
=========== =========== =========== =========== ===========
Portfolio turnover 18.60% 39.52% 35.67% 39.90% 138.97%
=========== =========== =========== =========== ===========
<CAPTION>
Florida Limited Maturity Fund
Class D
For the
The following per share data and ratios have been derived Period
from information provided in the financial statements. Oct. 21, 1994++
For the Year Ended July 31, to July 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning
Operating of period $ 10.00 $ 10.06 $ 9.95 $ 10.01 $ 9.76
Performance: ----------- ----------- ----------- ----------- -----------
Investment income--net .32 .37 .39 .39 .33
Realized and unrealized gain
(loss) on investments--net (.14) (.06) .11 (.06) .25
----------- ----------- ----------- ----------- -----------
Total from investment operations .18 .31 .50 .33 .58
----------- ----------- ----------- ----------- -----------
Less dividends from investment
income--net (.32) (.37) (.39) (.39) (.33)
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 9.86 $ 10.00 $ 10.06 $ 9.95 $ 10.01
=========== =========== =========== =========== ===========
Total Investment Based on net asset value per
Return:** share 1.80% 3.17% 5.10% 3.35% 6.07%+++
=========== =========== =========== =========== ===========
Ratios to Average Expenses, net of reimbursement 1.57% 1.29% 1.19% .99% .67%*
Net Assets: =========== =========== =========== =========== ===========
Expenses 1.57% 1.29% 1.19% 1.07% 1.19%*
=========== =========== =========== =========== ===========
Investment income--net 3.21% 3.71% 3.88% 3.91% 4.23%*
=========== =========== =========== =========== ===========
Supplemental Net assets, end of period
Data: (in thousands) $ 2,522 $ 5,362 $ 7,733 $ 6,406 $ 7,210
=========== =========== =========== =========== ===========
Portfolio turnover 18.60% 39.52% 35.67% 39.90% 138.97%
=========== =========== =========== =========== ===========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales charges.
++Commencement of operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
July 31, 1999
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust
(the "Trust") is registered under the Investment Company Act of 1940
as a non-diversified, open-end management investment company
consisting of two separate series: Merrill Lynch California Limited
Maturity Municipal Bond Fund ("California Limited Maturity Fund")
and Merrill Lynch Florida Limited Maturity Municipal Bond Fund
("Florida Limited Maturity Fund"). The Fund's financial statements
are prepared in accordance with generally accepted accounting
principles, which may require the use of management accruals and
estimates. Each series of the Trust is referred to herein as a
"Fund." The Trust 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 Trust.
(a) Valuation of investments--Municipal bonds and other portfolio
securities in which the Funds invest 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.
(b) Derivative financial instruments--Each 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 Funds may purchase or sell
financial 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 Funds
deposit and maintain as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Funds agree 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 Funds as unrealized gains or losses. When
the contract is closed, the Funds record 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 each 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.
(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 period not exceeding five years. 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.
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Trust 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 Trust has also entered into Distribution
Agreements and Distribution Plans with Merrill Lynch Funds
Distributor ("MLFD" or the "Distributor"), a division of Princeton
Funds Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary
of Merrill Lynch Group, Inc.
FAM is responsible for the management of each Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of each Fund. For such
services, each Fund pays a monthly fee at the annual rate of .35% of
that Fund's average daily net assets.
For the year ended July 31, 1999, FAM earned fees of $34,190 from
California Limited Maturity Fund, of which $19,537 was voluntarily
waived.
Pursuant to the Distribution Plans adopted by the Trust in
accordance with Rule 12b-1 under the Investment Company Act of 1940,
the Funds pay the Distributor ongoing account maintenance and
distribution fees. The Distributor voluntarily did not collect any
Class C distribution fees for the year ended July 31, 1999. The fees
are accrued daily and paid monthly at annual rates based upon the
average daily net assets of the shares as follows:
Account
Maintenance Distribution
Fee Fee
Class B .15% .20%
Class C .15% .20%
Class D .10% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MLPF&S"), a subsidiary of ML &
Co., also provides account maintenance and distribution services to
the Trust. 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.
For the year ended July 31, 1999, MLFD earned underwriting discounts
and MLPF&S earned dealer concessions on sales of Florida Limited
Maturity Fund's Class D Shares as follows:
MLFD MLPF&S
Florida Limited Maturity Fund $41 $597
MLPF&S received contingent deferred sales charges relating to
transactions in Class B and Class C Shares as follows:
Class B Class C
Shares Shares
California Limited Maturity Fund $4,119 $106
Florida Limited Maturity Fund $2,089 --
Furthermore, MLPF&S received contingent deferred sales charges of
$2,000 relating to transactions subject to front end sales charge
waivers in Class D Shares in California Limited Maturity Fund.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of
ML & Co., is the Trust's transfer agent.
Accounting services are provided to the Trust by FAM at cost.
Certain officers and/or trustees of the Trust are officers and/or
directors of FAM, PSI, PFD, FDS, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended July 31, 1999 were as follows:
Purchases Sales
California Limited Maturity Fund $4,021,336 $4,022,228
Florida Limited Maturity Fund 3,341,223 7,140,395
Net realized gains for the year ended July 31, 1999 and net
unrealized gains as of July 31, 1999 were as follows:
Realized Unrealized
California Limited Maturity Fund Gains Gains
Long-term investments $ 38,309 $ 403,115
Short-term investments 557 --
--------- ---------
Total $ 38,866 $ 403,115
========= =========
Realized Unrealized
Florida Limited Maturity Fund Gains Gains
Long-term investments $ 49,224 $ 265,490
--------- ---------
Total $ 49,224 $ 265,490
========= =========
As of July 31, 1999, net unrealized appreciation and the aggregate
cost of investments for Federal income tax purposes were as follows:
Limited Gross Gross Net Aggregate
Maturity Unrealized Unrealized Unrealized Cost of
Fund Appreciation Depreciation Appreciation Investments
California $389,432 $ (8,960) $380,472 $ 7,795,639
Florida 306,197 (40,707) 265,490 13,984,538
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
July 31, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
4. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from beneficial
interest transactions for the years ended July 31, 1999 and July 31,
1998, respectively, were as follows:
For the For the
Year Ended Year Ended
July 31, 1999 July 31, 1998
California Limited Maturity Fund $ (741,002) $(4,939,204)
Florida Limited Maturity Fund (4,046,299) (6,762,222)
Transactions in shares of beneficial interest for each class were as
follows:
California Limited Maturity Fund
Class A Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 7,460 $ 76,225
Shares issued to shareholders in
reinvestment of dividends 2,442 24,887
----------- -----------
Total issued 9,902 101,112
Shares redeemed (25,118) (253,933)
----------- -----------
Net decrease (15,216) $ (152,821)
=========== ===========
California Limited Maturity Fund
Class A Shares for the Year Dollar
Ended July 31, 1998 Shares Amount
Shares sold 12,475 $ 126,814
Shares issued to shareholders in
reinvestment of dividends 2,996 30,433
----------- -----------
Total issued 15,471 157,247
Shares redeemed (179,897) (1,826,328)
----------- -----------
Net decrease (164,426) $(1,669,081)
=========== ===========
California Limited Maturity Fund
Class B Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 101,369 $ 1,035,278
Shares issued to shareholders in
reinvestment of dividends 8,529 86,934
----------- -----------
Total issued 109,898 1,122,212
Shares redeemed (214,493) (2,187,382)
----------- -----------
Net decrease (104,595) $(1,065,170)
=========== ===========
California Limited Maturity Fund
Class B Shares for the Year Dollar
Ended July 31, 1998 Shares Amount
Shares sold 124,239 $ 1,261,328
Shares issued to shareholders in
reinvestment of dividends 12,571 127,693
----------- -----------
Total issued 136,810 1,389,021
Shares redeemed (334,719) (3,399,548)
----------- -----------
Net decrease (197,909) $(2,010,527)
=========== ===========
California Limited Maturity Fund
Class C Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 3,433 $ 35,335
Shares issued to shareholders in
reinvestment of dividends 136 1,384
----------- -----------
Total issued 3,569 36,719
Shares redeemed (1,643) (16,810)
----------- -----------
Net increase 1,926 $ 19,909
=========== ===========
California Limited Maturity Fund
Class C Shares for the Year Dollar
Ended July 31, 1998 Shares Amount
Shares sold 4,442 $ 45,039
Shares issued to shareholders in
reinvestment of dividends 20 197
----------- -----------
Total issued 4,462 45,236
Shares redeemed (629) (6,347)
----------- -----------
Net increase 3,833 $ 38,889
=========== ===========
California Limited Maturity Fund
Class D Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 417,306 $ 4,272,631
Shares issued to shareholders in
reinvestment of dividends 10,109 103,130
----------- -----------
Total issued 427,415 4,375,761
Shares redeemed (382,844) (3,918,681)
----------- -----------
Net increase 44,571 $ 457,080
=========== ===========
California Limited Maturity Fund
Class D Shares for the Year Dollar
Ended July 31, 1998 Shares Amount
Shares sold 7,329 $ 74,243
Shares issued to shareholders in
reinvestment of dividends 8,631 87,687
----------- -----------
Total issued 15,960 161,930
Shares redeemed (143,748) (1,460,415)
----------- -----------
Net decrease (127,788) $(1,298,485)
=========== ===========
Florida Limited Maturity Fund
Class A Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 28,676 $ 289,114
Shares issued to shareholders in
reinvestment of dividends 3,544 35,627
----------- -----------
Total issued 32,220 324,741
Shares redeemed (153,998) (1,547,761)
----------- -----------
Net decrease (121,778) $(1,223,020)
=========== ===========
Florida Limited Maturity Fund
Class A Shares for the Year Dollar
Ended July 31, 1998 Shares Amount
Shares sold 41,661 $ 418,928
Shares issued to shareholders in
reinvestment of dividends 5,340 53,529
----------- -----------
Total issued 47,001 472,457
Shares redeemed (147,389) (1,479,291)
----------- -----------
Net decrease (100,388) $(1,006,834)
=========== ===========
Florida Limited Maturity Fund
Class B Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 359,650 $ 3,629,639
Shares issued to shareholders in
reinvestment of dividends 11,689 117,363
----------- -----------
Total issued 371,339 3,747,002
Shares redeemed (383,122) (3,862,896)
----------- -----------
Net decrease (11,783) $ (115,894)
=========== ===========
Florida Limited Maturity Fund
Class B Shares for the Year Dollar
Ended July 31, 1998 Shares Amount
Shares sold 72,227 $ 724,926
Shares issued to shareholders in
reinvestment of dividends 18,097 181,362
----------- -----------
Total issued 90,324 906,288
Automatic conversion of shares (2,048) (20,567)
Shares redeemed (425,682) (4,270,272)
----------- -----------
Net decrease (337,406) $(3,384,551)
=========== ===========
Florida Limited Maturity Fund
Class C Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 14,831 $ 148,588
Shares issued to shareholders in
reinvestment of dividends 114 1,132
----------- -----------
Total issued 14,945 149,720
Shares redeemed (8,565) (85,527)
----------- -----------
Net increase 6,380 $ 64,193
=========== ===========
Florida Limited Maturity Fund
Class C Shares for the Year Dollar
Ended July 31, 1998 Shares Amount
Shares issued to shareholders in
reinvestment of dividends 64 $ 640
Shares redeemed (5,907) (58,841)
----------- -----------
Net decrease (5,843) $ (58,201)
=========== ===========
Florida Limited Maturity Fund
Class D Shares for the Year Dollar
Ended July 31, 1999 Shares Amount
Shares sold 84,836 $ 854,705
Shares issued to shareholders in
reinvestment of dividends 3,256 32,702
----------- -----------
Total issued 88,092 887,407
Shares redeemed (368,434) (3,658,985)
----------- -----------
Net decrease (280,342) $(2,771,578)
=========== ===========
Florida Limited Maturity Fund
Class D Shares for the Year Dollar
Ended July 31, 1998 Shares Amount
Shares sold 221,619 $ 2,218,964
Automatic conversion of shares 2,050 20,567
Shares issued to shareholders in
reinvestment of dividends 4,288 42,965
----------- -----------
Total issued 227,957 2,282,496
Shares redeemed (460,166) (4,595,132)
----------- -----------
Net decrease (232,209) $(2,312,636)
=========== ===========
5. Capital Loss Carryforward:
At July 31, 1999, each Fund of the Trust had an approximate net
capital loss carryforward as follows: $260,000 in the California
Limited Maturity Fund, all of which expires in 2004; and $631,000 in
the Florida Limited Maturity Fund, of which $431,000 expires in 2003
and $200,000 expires in 2004. These amounts will be available to
offset like amounts of any future taxable gains.
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
July 31, 1999
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
Merrill Lynch Multi-State Limited Maturity
Municipal Series Trust:
We have audited the accompanying statements of assets and
liabilities, including the schedules of investments, of Merrill
Lynch Limited Maturity Municipal Bond Funds for California and
Florida of the Merrill Lynch Multi-State Limited Maturity Municipal
Series Trust (the "Trust") as of July 31, 1999, 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 Trust'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 July 31,
1999 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
Merrill Lynch Limited Maturity Municipal Bond Funds for California
and Florida of the Merrill Lynch Multi-State Limited Maturity
Municipal Series Trust as of July 31, 1999, the results of their
operations, the changes in their net assets, and the financial
highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
September 10, 1999
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid monthly by
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust
during its taxable year ended July 31, 1999 qualify as tax-exempt
interest dividends for Federal income tax purposes.
Additionally, there were no capital gains distributions made by the
California Limited Maturity Fund and the Florida Limited Maturity
Fund during the year.
Please retain this information for your records.
