MERRILL LYNCH
MULTI-STATE
LIMITED MATURITY
MUNICIPAL
SERIES TRUST
FUND LOGO
Semi-Annual Report
January 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 Series Trust
Officers and
Trustees
Arthur Zeikel, President and Trustee
James H. Bodurtha, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Edward J. Andrews, Vice President
Donald C. Burke, Vice President and Treasurer
Alice A. Pellegrino, Secretary
Gerald M. Richard, Treasurer of Merrill Lynch
Multi-State Limited Maturity Municipal Series Trust
has recently retired. His colleagues at Merrill Lynch
Asset Management, L.P. join the Fund's Board of
Trustees in wishing Mr. Richard well in his retirement.
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,
January 31, 1999
TO OUR SHAREHOLDERS
The Municipal Market Environment
During the three months ended January 31, 1999, long-term bond
yields moved significantly lower. US domestic economic growth
remained moderate, with losses in the manufacturing sector offset by
strong growth in service-oriented industries. Industrial commodity
prices recently fell to their lowest level in over a decade. This
suggests that the current positive inflationary environment is
unlikely to be challenged in the near term. Additionally, the
Federal Reserve Board again lowered short-term interest rates in
November, in part to ensure that US domestic economic growth would
not be negatively impacted by ongoing weak economic growth overseas.
However, various external factors continued to outweigh the positive
fundamental economic framework in the United States as they have for
much of the past year. More significant declines in US fixed-income
yields have been impeded by strong equity markets, both in the
United States and abroad, and by the continued distraction of
President Clinton's impeachment trial. These and other factors
reduced investor demand for US securities. During the three-month
period ended January 31, 1999, the yield on the 30-year bond fell
approximately 15 basis points (0.15%) to 5.09%, and long-term
municipal revenue bond yields declined almost 10 basis points to
5.17%, as measured by the Bond Buyer Revenue Bond Index.
Throughout most of 1998, the municipal bond market's performance was
impeded by a significant increase in new-issue supply. However, in
recent months, the technical position of the tax-exempt market
improved. Over the last 12 months, almost $285 billion in new long-
term tax-exempt bonds was underwritten, an increase of almost 30%
compared to the same period a year ago. As municipal bond yields
declined in recent years, it has taken increasingly lower bond
yields to generate the cost savings necessary to refinance remaining
higher-couponed debt. Consequently, the rate of increases in
municipal bond issuance slowed in recent quarters. During the last
six months, more than $125 billion in new tax-exempt bonds was
issued, an increase of approximately 5% compared to the same period
a year ago. During the January 31, 1999 quarter, $63 billion in new
long-term municipal bonds was underwritten, representing an increase
of 5% compared to the January 31, 1998 quarter.
The pace of tax-exempt issuance continued to slow in 1999. January's
monthly issuance was less than $15 billion, representing a decline
of almost 25% compared to January 1998's volume. Additionally,
investors received more than $22 billion in coupon payments,
maturities and proceeds from early redemptions in January. Investors
can also expect to receive an additional $15 billion--$18 billion in
February for reinvestment. Consequently, investor demand has been
strong in recent months, easily matching, if not at times exceeding,
available supply. We will monitor this trend closely in the coming
months to determine if the supply pressures exerted in 1998 are
abating and fostering a more balanced supply/demand environment for
1999. Such an environment should allow the tax-exempt market's
performance to more closely mirror that of its taxable counterpart.
Foreign investors have rarely been active investors in the tax-
exempt bond market since they are unable to benefit from the
inherent tax advantage of municipal securities. Consequently, the
municipal bond market has not been able to benefit from the strong
"flight to quality" demand enjoyed by US Treasury securities since
late 1997. This inability has in large part resulted in
significantly smaller declines in municipal bond yields compared to
US Treasury securities. However, this has resulted in the
opportunity to purchase tax-exempt securities with yields very close
to or, in some instances, exceeding those of comparable US Treasury
bonds. By January 31, 1999, long-term tax-exempt bond yields were at
102% of US Treasury securities of comparable maturities, nearly
matching the least expensive level of the past year. Municipal bond
yield ratios have averaged approximately 95% for the last six months
and 92% for all of 1998. During 1997, tax-exempt bond yield ratios
averaged 84%. It is likely that the combination of the increase in
new-issue volume and the "safe-haven" status of US Treasury
securities drove municipal bond yield ratios to their present
attractive levels. Should new volume decline and/or foreign
financial markets regain stability in 1999, tax-exempt bond yield
ratios could quickly return to their more historic levels (85%--
88%).
Looking ahead, the expected combination of moderate economic growth
in the United States and continued negligible inflation suggests a
relatively stable interest rate environment into early 1999.
However, it is likely that foreign financial markets will again be a
critical factor in determining US bond yields. Economic problems in
Russia and Brazil remain unresolved, suggesting that additional
shocks to the world's financial system are possible. On the other
hand, the continued robustness of the US economy has led to some
back up in interest rates. However, at present these factors
indicate that there is little immediate risk of sustained
significant increases in long-term bond yields.
Portfolio Strategy
Merrill Lynch California Limited
Maturity Municipal Bond Fund
During the quarter ended January 31, 1999, Standard & Poor's
affirmed its A+ rating on the state of California's outstanding
general obligation debt, while Moody's Investors Service, Inc. rated
the state's general obligation debt as Aa3. California took a step
toward improving its credit rating in January when Governor Gray
Davis' proposed $76.2 billion fiscal 1999 spending bill included a
budget adjustment mechanism that would be triggered if revenues were
to fall below forecasts. This mechanism would allow the state's
Director of Finance to revise the budget after it is enacted so that
state spending could be adjusted without action by lawmakers, thus
avoiding revenue shortfalls. California continues to exhibit solid
economic growth. The state's seasonally adjusted unemployment rate
stood at 5.9% in December 1998, well above the national average and
10% above its pre-recession peak. Financial operations have been
solid. Revenues spurred by personal income taxes came in 4% above
1997--1998 estimates. As a result, the state's general fund balance
at June 30, 1998 was $2.2 billion. The 1998--1999 budget is designed
to use some of the surplus, but a reserve of about $1.2 billion, or
2% of revenues, will be retained. Underlying fiscal assumptions
appear to be reasonable, although revenues for the first four months
of the fiscal year are slightly below estimates. There is some risk
of lower tax revenues because of heightened global economic
weakness. California is a major exporter to Asia, and exports for
the first half of calendar 1998 were down considerably. However,
this slack has been mostly absorbed because of increased activity
with Europe and North American Free Trade Agreement countries. The
state's debt position continues to be favorable with net tax
supported debt of $23.0 billion, equal to $728 per capita and 2.7%
of personal income.
At January 31, 1999, net assets of Merrill Lynch California Limited
Maturity Municipal Bond Fund stood at approximately $10.9 million,
an increase of about 2% from the October quarter-end. As we
discussed in our October letter to shareholders, we decided to
maintain an aggressive investment posture because we expected the
Federal Reserve Board to maintain its easing bias as the US economy
moderated somewhat and world financial markets remained tumultuous.
This strategy enhanced performance considerably because even though
US gross domestic product (GDP) growth surged in the fourth quarter
of 1998 to approximately 6.1%, inflation remained benign and
Brazil's financial problems caused a flight to quality into US
dollar-denominated assets. The world financial markets' liquidity
problems caused the Federal Reserve Board to cut the Federal Funds
rate from 5.00% to 4.75%. These factors, combined with low municipal
issuance, caused interest rates on five-year tax-exempt securities
to drop 10 basis points--15 basis points, largely in January.
During the upcoming April quarter, we expect to adopt a more neutral
investment posture. We believe continued strong US economic growth
led by a strong stock market and calmer world financial markets may
cause the Federal Reserve Board to rethink current monetary policy
and adopt a bias to tighten in the months ahead to maintain the
current low-inflation environment.
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 1999
Merrill Lynch Florida Limited
Maturity Municipal Bond Fund
During the quarter ended January 31, 1999, the state of Florida
continued to exhibit strong economic growth. Collections of gross
tax receipts grew at a 3.7% rate in 1997--1998 and are projected to
grow at a rate of 4.6% for 1998--1999, while annual increases of
approximately 4% are projected for the next couple of years.
Estimated tax revenue collections were revised downward somewhat by
the state's November Revenue Estimating Conference, but for the
first six months of the current fiscal year tax revenue collections
were up 9.5%. Continued nationwide personal income gains, high
consumer confidence levels and a strong stock market have caused
Florida's tourism and retail sectors to surge. The state's December
seasonally adjusted unemployment rate stood at 4.2%, below the
national rate of 4.3%. Florida continues to exhibit fiscal
restraint, with the state's budget stabilization fund at $756
million, which is nearly 9% of estimated 1998--1999 revenues.
General revenues were raised upward in November 1998 and collections
for the first five months of 1998--1999 were moderately above
target. State supported debt has remained relatively moderate over a
long period and is equal to $855 per capita and 3.3% of personal
income. The state must continue to maintain strong budget control
since it will be faced with increased debt issuance in upcoming
years in order to maintain and expand a very rapidly growing
educational system.
At January 31, 1999, net assets of Merrill Lynch Florida Limited
Maturity Municipal Bond Fund stood at approximately $20.0 million,
an increase of approximately 3.1% from October quarter-end. As we
discussed in our October letter to shareholders, we decided to
maintain an aggressive investment strategy because we expected the
Federal Reserve Board to maintain its easing bias as the US economy
moderated somewhat and world financial markets remained tumultuous.
This strategy enhanced performance considerably because even though
US GDP growth surged in the fourth quarter of 1998 to approximately
6.1%, inflation remained benign and Brazil's financial problems
caused a flight to quality into US dollar-denominated assets. The
world financial markets' liquidity problems caused the Federal
Reserve Board to cut the Federal Funds rate from 5.00% to 4.75%.
These factors, combined with low municipal issuance, caused interest
rates on five-year tax-exempt securities to dip 10 basis points--15
basis points, largely in January.
During the upcoming April quarter, we expect to adopt a more neutral
investment posture. We believe continued strong US economic growth
led by a strong stock market and calmer world financial markets may
cause the Federal Reserve Board to rethink current monetary policy
and adopt a bias to tighten in the months ahead in order to maintain
the current low-inflation environment.
In Conclusion
We thank you for your support of 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
Executive Vice President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Edward J. Andrews)
Edward J. Andrews
Vice President and Portfolio Manager
March 3, 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.
<TABLE>
Recent
Performance
Results*
<CAPTION>
Since Standardized
12 Month 3 Month Inception 30-Day Yield
Total Return Total Return Total Return As of 1/31/99
<S> <C> <C> <C> <C>
California Limited Maturity Fund Class A Shares +4.14% +1.01% +25.31% 2.22%
California Limited Maturity Fund Class B Shares +3.77 +0.92 +23.03 1.88
California Limited Maturity Fund Class C Shares +3.96 +0.96 +23.02 2.07
California Limited Maturity Fund Class D Shares +4.03 +0.88 +23.65 2.12
Florida Limited Maturity Fund Class A Shares +4.50 +1.31 +24.41 2.28
Florida Limited Maturity Fund Class B Shares +4.13 +1.22 +22.15 1.95
Florida Limited Maturity Fund Class C Shares +3.98 +1.23 +20.23 2.15
Florida Limited Maturity Fund Class D Shares +4.30 +1.19 +22.63 2.19
<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 1/31/99 and Class C & Class D Shares, from
10/21/94 to 1/31/99.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 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 12/31/98 +3.92% +2.88%
Five Years Ended 12/31/98 +4.26 +4.05
Inception (11/26/93) through 12/31/98 +4.36 +4.15
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 12/31/98 +3.54% +2.54%
Five Years Ended 12/31/98 +3.89 +3.89
Inception (11/26/93) through 12/31/98 +3.99 +3.99
[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 12/31/98 +3.74% +2.74%
Inception (10/21/94) through 12/31/98 +4.86 +4.86
[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 12/31/98 +3.81% +2.77%
Inception (10/21/94) through 12/31/98 +4.99 +4.73
[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 12/31/98 +4.07% +3.03%
Five Years Ended 12/31/98 +4.15 +3.94
Inception (11/26/93) through 12/31/98 +4.19 +3.98
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 12/31/98 +3.70% +2.70%
Five Years Ended 12/31/98 +3.78 +3.78
Inception (11/26/93) through 12/31/98 +3.82 +3.82
[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 12/31/98 +3.52% +2.52%
Inception (10/21/94) through 12/31/98 +4.26 +4.26
[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 12/31/98 +3.97% +2.93%
Inception (10/21/94) through 12/31/98 +4.78 +4.52
[FN]
*Maximum sales charge is 1%.
**Assuming maximum sales charge.
Portfolio
Abbreviations
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
TAN Tax 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--94.3% NR* A1 $ 400 California Educational Facilities Authority, Revenue Refunding
Bonds (Loyola Marymount University), 5.70% due 10/01/2002 $ 430
AAA Aaa 500 California Health Facilities Financing Authority, Revenue
Refunding Bonds (Catholic Healthcare West), Series A, 5.30%
due 7/01/2003 (c) 534
California State, GO:
A+ Aa3 750 6.75% due 10/01/2003 851
AAA Aaa 750 6.35% due 11/01/2004 (a) 855
AAA Aaa 600 California State Public Works Board, Lease Revenue Bonds
(Department of Corrections--State Prison), Series A, 7%
due 9/01/2000 (d) 649
AAA Aaa 500 California Statewide Communities Development Authority, Lease
Revenue Refunding Bonds (Oakland Convention Center Project),
5.70% due 10/01/2002 (c) 537
NR* A 400 Coachella Valley, California, Water District Improvement No.
71, COP (Storm Water District--Flood Control Project),
6.60% due 10/01/2002 (d) 450
AA- NR* 400 East Bay, California, Municipal Utility District, Water System
Revenue Bonds, 7.40% due 6/01/2000 (d) 431
AAA Aaa 200 Los Angeles, California, Department of Airports, Airport Revenue
Refunding Bonds, Series A, 6% due 5/15/2005 (a) 225
A+ Aa3 650 Los Angeles, California, Department of Water and Power, Electric
Plant Revenue Bonds, 6% due 4/01/2002 698
Los Angeles, California, Harbor Department Revenue Bonds, AMT,
Series B:
AA Aa3 295 6% due 8/01/2001 313
AA Aa3 500 6% due 8/01/2004 544
AA- Aa1 1,000 Los Angeles County, California, Public Works Financing Authority,
Revenue Refunding Bonds (Capital Construction), 4.80% due 3/01/2004 1,050
AAA NR* 330 Northern California Power Agency, Public Power Revenue Refunding
Bonds (Geothermal Project No. 3), Series A, 5% due 7/01/2004 (c) 352
AAA Aaa 355 Sacramento County, California, Airport System Revenue Bonds,
Series D, 6% due 7/01/2006 (b)(d) 411
</TABLE>
Merrill Lynch Multi-State limited Maturity Municipal Series Trust,
January 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
California Limited Maturity Municipal Bond Fund (concluded)
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
California SP1+ MIG1++ $ 100 San Diego, California, GO, TAN, Series A, 4.50% due 9/30/1999 $ 101
(concluded) AAA Aaa 400 San Diego, California, Regional Transportation Commission,
Sales Tax Revenue Bonds, Second Series A, 5.25% due 4/01/2002 (c) 422
AAA Aaa 350 San Francisco, California, City and County Airport Commission,
International Airport Revenue Bonds, AMT, Second Series--
Issue 18A, 6% due 5/01/2004 (b) 387
AAA Aaa 400 Southern California Public Power Authority, Transmission
Project, Revenue Refunding Bonds (Southern Transmission),
Series A, 4.40% due 7/01/2007 (b) 416
AAA Aaa 500 University of California, Revenue Refunding Bonds (Multi-Purpose
Projects), Series C, 10% due 9/01/2001 (c) 583
Puerto Rico--4.1% A Aaa 400 Puerto Rico Commonwealth, Highway and Transportation Authority,
Highway Revenue Bonds, Series T, 6.625% due 7/01/2002 (d) 447
Total Investments (Cost--$10,018)--98.4% 10,686
Other Assets Less Liabilities--1.6% 173
-------
Net Assets--100.0% $10,859
=======
<FN>
(a)FGIC Insured.
(b)MBIA Insured.
(c)AMBAC Insured.
(d)Prerefunded.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<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--94.6% NR* Aaa $1,000 Bay County, Florida, Hospital System Revenue Refunding Bonds
(Bay Medical Center Project), 8% due 10/01/2004 (f) $ 1,234
AAA Aaa 750 Boca Raton, Florida, Community Redevelopment Agency, Tax
Increment Revenue Refunding Bonds (Mizner Park Project),
4.10% due 3/01/2008 (e) 760
AAA Aaa 300 Dade County, Florida, Aviation Revenue Refunding Bonds,
Series A, 5.60% due 10/01/2004 (b) 330
AAA Aaa 1,000 Dade County, Florida, GO, Series I, 6.90% due 7/01/2003 (b) 1,133
AAA Aaa 835 Dunedin, Florida, Hospital Revenue Bonds (Mease Health Care),
6.75% due 11/15/2001 (d)(f) 927
Florida State Board of Education, Capital Outlay, GO (Public
Education):
AA+ Aa2 850 Refunding, 5.50% due 6/01/2001 892
AAA Aaa 150 Refunding, Series A, 7.25% due 6/01/2000 (f) 161
AA+ Aa2 1,000 Series B, 5.625% due 6/01/2005 1,108
AAA Aaa 1,900 Florida State Division, Bond Finance Department, General Services
Revenue Bonds (Department of Natural Resources Preservation),
Series 2000-A, 6.40% due 7/01/2002 (b) 2,062
AAA Aaa 1,730 Florida State Division, Bond Finance Department, General Services
Revenue Refunding Bonds (Department of Natural Resources Preservation
--Save Our Coast), Series A, 6.30% due 7/01/2001 (d)(f) 1,867
A A 100 Hillsborough County, Florida, Capital Improvement Revenue Refunding
Bonds (County Center Project), Second Series, 6.75% due 7/01/2002 (f) 112
AAA Aaa 200 Hollywood, Florida, Water and Sewer Revenue Refunding Bonds,
6.875% due 10/01/2001 (c)(f) 222
Jacksonville, Florida, Electric Authority, Revenue Refunding Bonds
(Saint John's River):
AA NR* 1,000 3rd Series, 6.65% due 10/01/2000 (f) 1,071
AA Aa2 1,000 Issue 2, Series 6-C, 6.50% due 10/01/2001 1,066
AAA Aaa 1,000 Jacksonville, Florida, Health Facilities Authority, Hospital
Revenue Refunding Bonds (Charity Obligation Group), Series A,
5.50% due 8/15/2006 (d) 1,106
A1+ VMIG1++ 300 Jacksonville, Florida, PCR, Refunding (Florida Power and Light
Company Project), VRDN, 3.20% due 5/01/2029 (a) 300
AAA Aaa 250 Kissimmee, Florida, Water and Sewer Revenue Refunding Bonds,
5.40% due 10/01/2002 (b) 267
A1+ VMIG1++ 100 Martin County, Florida, PCR, Refunding (Florida Power and
Light Company Project), VRDN, 3.125% due 9/01/2024 (a) 100
AAA Aaa 850 North Miami, Florida, Health Facilities Authority, Health
Facility Revenue Refunding Bonds (Bon Secours Health System
Project), 6% due 8/15/2002 (e)(f) 936
AA- Aaa 850 Orlando, Florida, Utilities Commission, Water and Electric
Revenue Bonds, Sub-Series A, 6.50% due 10/01/2001 (f) 935
AAA Aaa 1,000 Palm Bay, Florida, Utility Revenue Bonds (Palm Bay Utility Corp.
Project), Series B, 6.20% due 10/01/2002 (d)(f) 1,112
Saint Lucie County, Florida, PCR, Refunding (Florida Power and
Light Company Project), VRDN (a):
A1+ VMIG1++ 100 3.125% due 1/01/2026 100
A1+ VMIG1++ 100 3.20% due 3/01/2027 100
AAA Aaa 500 Tampa, Florida, Health System Revenue Refunding Bonds (Catholic
Health), Series A-3, 5.50% due 11/15/2006 (d) 553
AAA Aaa 400 Tampa, Florida, Water and Sewer Revenue Refunding Bonds,
Series A, 6% due 10/01/2002 (c)(f) 439
Puerto Rico--4.8% A Baa1 900 Puerto Rico Commonwealth, Revenue Refunding Bonds, 5.30% due
7/01/2004 966
Total Investments (Cost--$18,960)--99.4% 19,859
Other Assets Less Liabilities--0.6% 120
-------
Net Assets--100.0% $19,979
=======
<FN>
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at January 31, 1999.
(b)AMBAC Insured.
(c)FGIC Insured.
(d)MBIA Insured.
(e)FSA Insured.
(f)Prerefunded.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 1999
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
<CAPTION>
California Florida
Limited Limited
Maturity Maturity
As of January 31, 1999 Fund Fund
<S> <S> <C> <C>
Assets: Investments, at value* (Note 1a) $10,685,734 $19,858,710
Cash 17,296 25,561
Receivables:
Interest 183,648 262,665
Beneficial interest sold 6,199 --
Deferred organization expenses (Note 1e) 1,168 3,855
Prepaid registration fees and other assets (Note 1e) 523 7,996
----------- -----------
Total assets 10,894,568 20,158,787
----------- -----------
Liabilities: Payables:
Beneficial interest redeemed 8,717 112,081
Dividends to shareholders (Note 1f) 5,390 9,898
Investment adviser (Note 2) 1,253 5,497
Distributor (Note 2) 1,634 2,937
Accrued expenses and other liabilities 18,307 49,426
----------- -----------
Total liabilities 35,301 179,839
----------- -----------
Net Assets: Net assets $10,859,267 $19,978,948
=========== ===========
Net Assets Class A Shares of beneficial interest, $.10 par value, unlimited
Consist of: shares authorized $ 14,847 $ 49,338
Class B Shares of beneficial interest, $.10 par value, unlimited
shares authorized 45,628 88,778
Class C Shares of beneficial interest, $.10 par value, unlimited
shares authorized 1,136 1,497
Class D Shares of beneficial interest, $.10 par value, unlimited
shares authorized 43,998 57,061
Paid-in capital in excess of par 10,421,742 19,638,948
Accumulated realized capital losses on investments--net (Note 5). (336,312) (755,024)
Unrealized appreciation on investments--net 668,228 898,350
----------- -----------
Net assets $10,859,267 $19,978,948
=========== ===========
Net Asset Value: Class A: Net assets. $ 1,526,931 $ 5,013,338
=========== ===========
Shares outstanding 148,470 493,377
=========== ===========
Net asset value $ 10.28 $ 10.16
=========== ===========
Class B: Net assets $ 4,690,358 $ 9,020,323
=========== ===========
Shares outstanding 456,280 887,779
=========== ===========
Net asset value $ 10.28 $ 10.16
=========== ===========
Class C: Net assets $ 116,791 $ 151,017
=========== ===========
Shares outstanding 11,360 14,972
=========== ===========
Net asset value $ 10.28 $ 10.09
=========== ===========
Class D: Net assets $ 4,525,187 $ 5,794,270
=========== ===========
Shares outstanding 439,983 570,609
=========== ===========
Net asset value $ 10.28 $ 10.15
=========== ===========
<FN>
*Identified cost $10,017,506 $18,960,360
=========== ===========
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENTS OF OPERATIONS
<CAPTION>
California Florida
Limited Limited
Maturity Maturity
For the Six Months Ended January 31, 1999 Fund Fund
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 244,226 $ 464,309
Income ----------- -----------
(Note 1d):
Expenses: Investment advisory fees (Note 2) 17,932 33,736
Accounting services (Note 2) 18,025 27,868
Professional fees 20,131 19,489
Printing and shareholder reports 12,712 25,029
Account maintenance and distribution fees--Class B (Note 2) 8,280 15,011
Trustees' fees and expenses 7,390 14,714
Registration fees (Note 1e) 5,875 9,839
Account maintenance fees--Class D (Note 2) 1,963 2,826
Custodian fees 1,510 1,951
Pricing fees 1,195 1,943
Amortization of organization expenses (Note 1e) 566 1,859
Transfer agent fees--Class B (Note 2) 821 1,204
Transfer agent fees--Class D (Note 2) 525 611
Transfer agent fees--Class A (Note 2) 198 543
Account maintenance and distribution fees--Class C (Note 2) 86 19
Transfer agent fees--Class C (Note 2) 27 5
Other 990 1,085
----------- -----------
Total expenses before reimbursement 98,226 157,732
Reimbursement of expenses (Note 2) (10,247) --
----------- -----------
Total expenses after reimbursement 87,979 157,732
----------- -----------
Investment income--net 156,247 306,577
----------- -----------
Realized & Realized gain (loss) on investments--net 590 (46,468)
Unrealized Change in unrealized appreciation on investments--net 148,533 350,598
Gain (Loss) on ----------- -----------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 305,370 $ 610,707
(Notes 1b, =========== ===========
1d & 3):
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 1999
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
California Limited Florida Limited
Maturity Fund Maturity Fund
For the Six For the For the Six For the
Months Ended Year Ended Months Ended Year Ended
January 31, July 31, January 31, July 31,
Increase (Decrease) in Net Assets: 1999 1998 1999 1998
<S> <S> <C> <C> <C> <C>
Operations: Investment income--net $ 156,247 $ 438,283 $ 306,577 $ 827,683
Realized gain (loss) on investments--net 590 135,816 (46,468) 69,426
Change in unrealized appreciation on
investments--net 148,533 (244,868) 350,598 (229,527)
----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations 305,370 329,231 610,707 667,582
----------- ----------- ----------- -----------
Dividends to Investment income--net:
Shareholders Class A (24,011) (100,638) (84,724) (228,224)
(Note 1f): Class B (68,550) (210,256) (129,176) (349,950)
Class C (1,765) (2,663) (376) (615)
Class D (61,921) (124,726) (92,301) (248,894)
----------- ----------- ----------- -----------
Net decrease in net assets resulting from
dividends to shareholders (156,247) (438,283) (306,577) (827,683)
----------- ----------- ----------- -----------
Beneficial Net increase (decrease) in net assets
Interest derived from beneficial interest
Transactions transactions 1,629,684 (4,939,204) 967,265 (6,762,222)
(Note 4): ----------- ----------- ----------- -----------
Net Assets: Total interest (decrease) in net assets 1,778,807 (5,048,256) 1,271,395 (6,922,323)
Beginning of period 9,080,460 14,128,716 18,707,553 25,629,876
----------- ----------- ----------- -----------
End of period $10,859,267 $ 9,080,460 $19,978,948 $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 For the
been derived from information provided in the Six Months
financial statements. Ended
January 31, 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 of
Operating period $ 10.13 $ 10.22 $ 10.05 $ 9.99 $ 9.88
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .17 .39 .38 .39 .42
Realized and unrealized gain
(loss) on investments--net .15 (.09) .17 .06 .11
---------- ---------- ---------- ---------- ----------
Total from investment
operations .32 .30 .55 .45 .53
---------- ---------- ---------- ---------- ----------
Less dividends from investment
income--net (.17) (.39) (.38) (.39) (.42)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 10.28 $ 10.13 $ 10.22 $ 10.05 $ 9.99
========== ========== ========== ========== ==========
Total Investment Based on net asset value
Return:** per share 3.14%++ 2.96% 5.57% 4.56% 5.60%
========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 1.51%* 1.12% 1.08% .94% .40%
Net Assets: ========== ========== ========== ========== ==========
Expenses 1.71%* 1.32% 1.28% 1.30% 1.44%
========== ========== ========== ========== ==========
Investment income--net 3.26%* 3.82% 3.75% 3.89% 4.36%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in
Data: thousands) $ 1,527 $ 1,460 $ 3,152 $ 3,162 $ 3,527
========== ========== ========== ========== ==========
Portfolio turnover 0.00% 24.65% 26.86% 11.09% 124.72%
========== ========== ========== ========== ==========
<CAPTION>
California Limited Maturity Fund
Class B
The following per share data and ratios have For the
been derived from information provided in the Six Months
financial statements. Ended
January 31, 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 of
Operating period $ 10.12 $ 10.21 $ 10.04 $ 9.99 $ 9.88
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .15 .35 .34 .36 .39
Realized and unrealized gain
(loss) on investments--net .16 (.09) .17 .05 .11
---------- ---------- ---------- ---------- ----------
Total from investment operations .31 .26 .51 .41 .50
---------- ---------- ---------- ---------- ----------
Less dividends from investment
income--net (.15) (.35) (.34) (.36) (.39)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 10.28 $ 10.12 $ 10.21 $ 10.04 $ 9.99
========== ========== ========== ========== ==========
Total Investment Based on net asset value
Return:** per share 3.06%++ 2.59% 5.20% 4.08% 5.23%
========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 1.87%* 1.51% 1.44% 1.30% .76%
Net Assets: ========== ========== ========== ========== ==========
Expenses 2.07%* 1.71% 1.64% 1.66% 1.80%
========== ========== ========== ========== ==========
Investment income--net 2.90%* 3.45% 3.39% 3.53% 4.00%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in
Data: thousands) $ 4,690 $ 4,812 $ 6,877 $ 9,919 $ 10,363
========== ========== ========== ========== ==========
Portfolio turnover 0.00% 24.65% 26.86% 11.09% 124.72%
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
<CAPTION>
California Limited Maturity Fund
Class C
The following per share data and ratios have For the
been derived from information provided in the For the Six Period
financial statements. Months Ended Oct. 21, 1994++
January 31, 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 .16 .37 .36 .37 .31
Realized and unrealized gain
i(loss) on nvestments--net .16 (.10) .17 .06 .23
---------- ---------- ---------- ---------- ----------
Total from investment operations .32 .27 .53 .43 .54
---------- ---------- ---------- ---------- ----------
Less dividends from investment
income--net (.16) (.37) (.36) (.37) (.31)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 10.28 $ 10.12 $ 10.22 $ 10.05 $ 9.99
========== ========== ========== ========== ==========
Total Investment Based on net asset value
Return:** per share 3.15%+++ 2.68% 5.39% 4.35% 5.60%+++
========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 1.68%* 1.36% 1.25% 1.14% .82%*
Net Assets: ========== ========== ========== ========== ==========
Expenses 1.88%* 1.56% 1.45% 1.50% 1.98%*
========== ========== ========== ========== ==========
Investment income--net 3.09%* 3.61% 3.58% 3.69% 4.04%*
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in
Data: thousands) $ 117 $ 95 $ 57 $ 55 $ 64
========== ========== ========== ========== ==========
Portfolio turnover 0.00% 24.65% 26.86% 11.09% 124.72%
========== ========== ========== ========== ==========
<CAPTION>
California Limited Maturity Fund
Class D
The following per share data and ratios have For the
been derived from information provided in the For the Six Period
financial statements. Months Ended Oct. 21, 1994++
January 31, 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 $ 10.13 $ 10.22 $ 10.05 $ 9.99 $ 9.76
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .16 .38 .37 .38 .33
Realized and unrealized gain
(loss) on investments--net .15 (.09) .17 .06 .23
---------- ---------- ---------- ---------- ----------
Total from investment
operations .31 .29 .54 .44 .56
---------- ---------- ---------- ---------- ----------
Less dividends from investment
income--net (.16) (.38) (.37) (.38) (.33)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 10.28 $ 10.13 $ 10.22 $ 10.05 $ 9.99
========== ========== ========== ========== ==========
Total Investment Based on net asset value
Return:** per share 3.09%+++ 2.86% 5.47% 4.46% 5.85%+++
========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 1.61%* 1.25% 1.15% 1.06% .66%*
Net Assets: ========== ========== ========== ========== ==========
Expenses 1.81%* 1.45% 1.35% 1.40% 1.81%*
========== ========== ========== ========== ==========
Investment income--net 3.15%* 3.70% 3.69% 3.77% 4.28%*
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in
Data: thousands) $ 4,525 $ 2,713 $ 4,043 $ 2,185 $ 1,771
========== ========== ========== ========== ==========
Portfolio turnover 0.00% 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 For the Six
financial statements. Months Ended
January 31, 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 of
Operating period $ 10.00 $ 10.07 $ 9.96 $ 10.02 $ 9.87
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .17 .38 .40 .40 .43
Realized and unrealized gain
(loss) on investments--net .16 (.07) .11 (.06) .15
---------- ---------- ---------- ---------- ----------
Total from investment operations .33 .31 .51 .34 .58
---------- ---------- ---------- ---------- ----------
Less dividends from investment
income--net (.17) (.38) (.40) (.40) (.43)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 10.16 $ 10.00 $ 10.07 $ 9.96 $ 10.02
========== ========== ========== ========== ==========
Total Investment Based on net asset value
Return:** per share 3.32%+++ 3.17% 5.20% 3.45% 6.05%
========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 1.45%* 1.19% 1.09% .89% .39%
Net Assets: ========== ========== ========== ========== ==========
Expenses 1.45%* 1.19% 1.09% .97% 1.03%
========== ========== ========== ========== ==========
Investment income--net 3.37%* 3.81% 3.98% 4.01% 4.39%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in
Data: thousands) $ 5,014 $ 5,331 $ 6,376 $ 7,874 $ 9,849
========== ========== ========== ========== ==========
Portfolio turnover 4.85% 39.52% 35.67% 39.90% 138.97%
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 1999
<TABLE>
FINANCIAL HIGHLIGHTS (concluded)
<CAPTION>
Florida Limited Maturity Fund
Class B
The following per share data and ratios have For the Six
been derived from information provided in the Months
financial statements. Ended
January 31, 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 of
Operating period $ 10.00 $ 10.07 $ 9.96 $ 10.02 $ 9.88
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .15 .35 .36 .37 .40
Realized and unrealized gain
(loss) on investments--net .16 (.07) .11 (.06) .14
---------- ---------- ---------- ---------- ----------
Total from investment operations .31 .28 .47 .31 .54
---------- ---------- ---------- ---------- ----------
Less dividends from investment
income--net (.15) (.35) (.36) (.37) (.40)
---------- ---------- ---------- ---------- ----------
Net asset value, end of
period $ 10.16 $ 10.00 $ 10.07 $ 9.96 $ 10.02
========== ========== ========== ========== ==========
Total Investment Based on net asset value
Return:** per share 3.14%+++ 2.80% 4.83% 3.08% 5.57%
========== ========== ========== ========== ==========
Ratios to Expenses, net of reimbursement 1.80%* 1.54% 1.45% 1.24% .75%
Average ========== ========== ========== ========== ==========
Net Assets: Expenses 1.80%* 1.54% 1.45% 1.32% 1.38%
========== ========== ========== ========== ==========
Investment income--net 3.01%* 3.46% 3.63% 3.66% 4.05%
========== ========== ========== ========== ==========
Supplemental Net assets, end of period (in
Data: thousands) $ 9,020 $ 8,014 $ 11,461 $ 13,690 $ 16,213
========== ========== ========== ========== ==========
Portfolio turnover 4.85% 39.52% 35.67% 39.90% 138.97%
========== ========== ========== ========== ==========
<CAPTION>
Florida Limited Maturity Fund
Class C
The following per share data and ratios have been For the
derived from information provided in the For the Six Period
financial statements. Months Ended Oct. 21, 1994++
January 31, 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 $ 9.93 $ 10.00 $ 9.90 $ 10.01 $ 9.76
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .15 .33 .38 .36 .29
Realized and unrealized gain
(loss) on investments--net .16 (.07) .10 (.11) .25
---------- ---------- ---------- ---------- ----------
Total from investment operations .31 .26 .48 .25 .54
---------- ---------- ---------- ---------- ----------
Less dividends from investment
income--net (.15) (.33) (.38) (.36) (.29)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 10.09 $ 9.93 $ 10.00 $ 9.90 $ 10.01
========== ========== ========== ========== ==========
Total Investment Based on net asset value
Return:** per share 3.10%+++ 2.65% 4.93% 2.48% 5.65%+++
========== ========== ========== ========== ==========
Ratios to Expenses, net of reimbursement 1.62%* 1.29% 1.26% 1.21% 1.09%*
Average ========== ========== ========== ========== ==========
Net Assets: Expenses 1.62%* 1.29% 1.26% 1.23% 1.67%*
========== ========== ========== ========== ==========
Investment income--net 3.05%* 3.78% 3.83% 3.75% 3.83%*
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $ 151 $ 1 $ 60 $ 52 $ 1
========== ========== ========== ========== ==========
Portfolio turnover 4.85% 39.52% 35.67% 39.90% 138.97%
========== ========== ========== ========== ==========
<CAPTION>
Florida Limited Maturity Fund
Class D
The following per share data and ratios have For the
been derived from information provided in the For the Six Period
financial statements. Months Ended Oct. 21, 1994++
January 31, 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 $ 10.00 $ 10.06 $ 9.95 $ 10.01 $ 9.76
Performance: ---------- ---------- ---------- ---------- ----------
Investment income--net .16 .37 .39 .39 .33
Realized and unrealized gain
(loss) on investments--net .15 (.06) .11 (.06) .25
---------- ---------- ---------- ---------- ----------
Total from investment
operations .31 .31 .50 .33 .58
---------- ---------- ---------- ---------- ----------
Less dividends from investment
income--net (.16) (.37) (.39) (.39) (.33)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 10.15 $ 10.00 $ 10.06 $ 9.95 $ 10.01
========== ========== ========== ========== ==========
Total Investment Based on net asset value
Return:** per share 3.17%+++ 3.17% 5.10% 3.35% 6.07%+++
========== ========== ========== ========== ==========
Ratios to Average Expenses, net of reimbursement 1.55%* 1.29% 1.19% .99% .67%*
Net Assets: ========== ========== ========== ========== ==========
Expenses 1.55%* 1.29% 1.19% 1.07% 1.19%*
========== ========== ========== ========== ==========
Investment income--net 3.27%* 3.71% 3.88% 3.91% 4.23%*
========== ========== ========== ========== ==========
Supplemental Net assets, end of period
Data: (in thousands) $ 5,794 $ 5,362 $ 7,733 $ 6,406 $ 7,210
========== ========== ========== ========== ==========
Portfolio turnover 4.85% 39.52% 35.67% 39.90% 138.97%
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 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. These unaudited financial statements reflect all
adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim period presented. All
such adjustments are of a normal recurring nature. 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 "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 0.35%
of that Fund's average daily net assets.
For the six months ended January 31, 1999, FAM earned fees of
$17,932 from California Limited Maturity Fund, of which $10,247 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 six months ended January 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 0.15% 0.20%
Class C 0.15% 0.20%
Class D 0.10% --
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 six months ended January 31, 1999, MLFD earned underwriting
discounts and MLPF&S earned dealer concessions on sales of the
Florida Limited Maturity Fund's Class D Shares as follows:
MLFD MLPF&S
Florida Limited Maturity Fund Class D $ 40 $574
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 $1,792 $106
Florida Limited Maturity Fund 279 --
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.
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 1999
NOTES TO FINANCIAL STATEMENTS (continued)
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended January 31, 1999 were as follows:
Purchases Sales
California Limited Maturity Fund $2,448,702 --
Florida Limited Maturity Fund 1,508,023 $913,973
Net realized gains (losses) for the six months ended January 31,
1999 and net unrealized gains as of January 31, 1999 were as
follows:
Realized Unrealized
California Limited Maturity Fund Gains Gains
Long-term investments -- $ 667,809
Short-term investments $ 590 419
--------- ---------
Total $ 590 $ 668,228
========= =========
Realized Unrealized
Florida Limited Maturity Fund Losses Gains
Long-term investments $ (46,468) $ 898,350
--------- ---------
Total $ (46,468) $ 898,350
========= =========
As of January 31, 1999, net unrealized appreciation and the
aggregate cost of investments for Federal income tax purposes were
as follows:
Limited Gross Net Aggregate
Maturity Unrealized Unrealized Cost of
Portfolio Appreciation Appreciation Investments
California $668,228 $668,228 $10,017,506
Florida 898,350 898,350 18,960,360
4. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from beneficial
interest transactions for the six months ended January 31, 1999
and for the year ended July 31, 1998, respectively, were as follows:
For the Six For the
Months Ended Year Ended
January 31, 1999 July 31, 1998
California Limited Maturity Fund $1,629,684 $(4,939,204)
Florida Limited Maturity Fund 967,265 (6,762,222)
Transactions in shares of beneficial interest for each class were as
follows:
California Limited Maturity Fund
Class A Shares for the Six Months Dollar
Ended January 31, 1999 Shares Amount
Shares sold 5,647 $ 57,664
Shares issued to shareholders in
reinvestment of dividends 1,228 12,564
----------- -----------
Total issued 6,875 70,228
Shares redeemed (2,524) (25,812)
----------- -----------
Net increase 4,351 $ 44,416
=========== ===========
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 Six Months Dollar
Ended January 31, 1999 Shares Amount
Shares sold 100,325 $ 1,024,622
Shares issued to shareholders in
reinvestment of dividends 4,606 47,120
----------- -----------
Total issued 104,931 1,071,742
Shares redeemed (124,000) (1,268,387)
----------- -----------
Net decrease (19,069) $ (196,645)
=========== ===========
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 Six Months Dollar
Ended January 31, 1999 Shares Amount
Shares sold 3,433 $ 35,335
Shares issued to shareholders in
reinvestment of dividends 68 697
----------- -----------
Total issued 3,501 36,032
Shares redeemed (1,581) (16,176)
----------- -----------
Net increase 1,920 $ 19,856
=========== ===========
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 Six Months Dollar
Ended January 31, 1999 Shares Amount
Shares sold 171,939 $ 1,759,596
Shares issued to shareholders in
reinvestment of dividends 5,472 56,016
----------- -----------
Total issued 177,411 1,815,612
Shares redeemed (5,246) (53,555)
----------- -----------
Net increase 172,165 $ 1,762,057
=========== ===========
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 Six Months Dollar
Ended January 31, 1999 Shares Amount
Shares sold 15,005 $ 151,608
Shares issued to shareholders in
reinvestment of dividends 2,012 20,303
----------- -----------
Total issued 17,017 171,911
Shares redeemed (56,489) (568,666)
----------- -----------
Net decrease (39,472) $ (396,755)
=========== ===========
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 Six Months Dollar
Ended January 31, 1999 Shares Amount
Shares sold 355,912 $ 3,592,019
Shares issued to shareholders in
reinvestment of dividends 6,050 61,045
----------- -----------
Total issued 361,962 3,653,064
Shares redeemed (275,294) (2,781,114)
----------- -----------
Net increase 86,668 $ 871,950
=========== ===========
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)
=========== ===========
Merrill Lynch Multi-State Limited Maturity Municipal Series Trust,
January 31, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
Florida Limited Maturity Fund
Class C Shares for the Six Months Dollar
Ended January 31, 1999 Shares Amount
Shares sold 14,831 $ 148,588
Shares issued to shareholders in
reinvestment of dividends 15 152
----------- -----------
Net increase 14,846 $ 148,740
=========== ===========
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 Six Months Dollar
Ended January 31, 1999 Shares Amount
Shares sold 82,781 $ 834,423
Shares issued to shareholders in
reinvestment of dividends 1,684 16,991
----------- -----------
Total issued 84,465 851,414
Shares redeemed (50,061) (508,084)
----------- -----------
Net increase 34,404 $ 343,330
=========== ===========
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, 1998, each Fund of the Trust had an approximate net
capital loss carryforward as follows: $287,000 in the California
Limited Maturity Fund, of which $8,000 expires in 2003 and $279,000
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.
