MERRILL
LYNCH
FLORIDA
MUNICIPAL
BOND FUND
Semi-Annual Report January 31, 1994
This report is not authorized for use as an offer of sale
or a solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered
a representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Merrill Lynch Florida
Municipal Bond Fund
Merrill Lynch Multi-State
Municipal Series Trust
Box 9011
Princeton, New Jersey
08543-9011
TO OUR SHAREHOLDERS
As 1993 drew to a close, the US economy showed signs of strong
improvement. The initial estimate for gross domestic product
(GDP) growth in the final quarter of 1993 was +5.9% in real
terms, the strongest quarterly performance since the fourth
quarter of 1987. GDP growth was led by interest rate-sensitive
sectors, such as housing, durable goods orders and business
investment in capital equipment. Consumer confidence also
improved after remaining lackluster throughout most of 1993.
While the exceptionally robust rate of growth may not be
sustainable in the first quarter of 1994 (especially considering
the harsh winter weather experienced by virtually half of the
country in January), this strong showing suggests that the US
economy may at last be gaining momentum. This was supported by
the December increase in the Index of Leading Economic Indica-
tors, the fifth monthly rise in this indicator of future economic
activity.
<PAGE>
At the same time, the rate of inflation remains in check.
Nevertheless, concerns arose late in 1993 that the rate of
business activity might increase inflationary pressures, which
were reflected in an upturn of longer-term interest rates. In
January, Federal Reserve Board Chairman Alan Greenspan indicated
in Congressional testimony that continued strong expansion of
economic activity would lead the central bank to tighten monetary
policy in an effort to contain inflation. On February 4, 1994,
the central bank broke with tradition and publicly announced an
increase in short-term interest rates. In the weeks ahead,
investors will continue to gauge the pace of the economic
expansion and watch for signs of an overheating economy that
could prompt successive Federal Reserve Board actions to raise
short-term interest rates.
The Municipal Market
Yields on tax-exempt securities generally declined over the three
months ended January 31, 1994. Long-term revenue bond yields, as
measured by the Bond Buyer Revenue Bond Index, declined an
additional six basis points (0.06%) to end the quarter at 5.50%.
US Treasury bond yields, however, rose approximately 25 basis
points to end the period at approximately 6.20%. This
outperformance by municipal securities is likely to be the
dominant theme for much of 1994.
During the January quarter, taxable yields remained volatile in
reaction to the inherent conflicts between the extremely strong
economic recovery seen during the last quarter of 1993 and
continued low inflationary pressures. Tax-exempt bond yields,
however, reflected very positive technical factors. During the 12
months ended January 31, 1994, municipalities issued more than
$288 billion in securities, an increase of more than 21% versus
one year ago. As we have discussed in earlier reports to
shareholders, much of this increase has been the result of
municipalities refinancing existing higher-couponed debt. At
current yield levels, few of these issues remain to be refunded.
This has led to estimates of municipal bond issuance declining to
approximately $175 billion for all of 1994. More than $290
billion in long-term tax-exempt securities was issued in 1993.
In addition to this dramatic decline in issuance, investor demand
is expected to increase in the coming year. Greater demand should
be generated by a number of factors, with the recent increases in
marginal Federal income tax rates the most important. Also, bond
calls and early redemptions are expected to increase
significantly in the coming quarters and last into early 1995, at
least. The combination of declining new-issue volume and
increasing numbers of bonds redeemed prior to their stated
maturities will eventually lead to a net decline in the number of
bonds outstanding. In such a scenario, investor demand rises as
bondholders are forced to continually purchase new municipal
bonds to replace their previous holdings.
<PAGE>
The outlook for the municipal bond market is very favorable.
While the historic declines in yields seen over the last year are
unlikely to be repeated, the strong technical framework within
the tax-exempt market would support further modest declines in
tax-exempt yields. At the very least, should interest rates rise
in response to continued strong economic growth and a resurgence
in inflationary pressures, we believe that municipal bond price
deterioration will be limited in comparison to taxable investment
alternatives.
Portfolio Strategy
During the January quarter, we had a constructive view of the
municipal bond market and interest rates in general. Since
Florida municipal issuance grew by only 1% during the quarter
ended January 31, 1994 (as compared to the same period last
year), Florida municipal bond prices have increased approximately
the same amount as have other general market municipal bonds.
In the past, investors commonly have purchased municipal bonds in
the 14-year--25-year maturity range. With this in mind, the
Fund's strategy has been to purchase bonds with maturities in
this range and to sell bonds with longer maturities. We believe
that this strategy will take advantage of potential price
appreciation as higher Federal tax rates increase investor
demand. In addition, new issuance is likely to continue to
decline from 1993 levels. The Fund has kept a cash position below
6% in order to seek to enhance its total return in this
environment.
We appreciate your ongoing interest in Merrill Lynch Florida
Municipal Bond Fund, and we look forward to serving your
investment needs and objectives in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
March 11, 1994
<PAGE>
PERFORMANCE DATA
None of the past results shown should be considered a representation
of future performance. Investment return and principal value of Class
A and Class B Shares will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost.
<TABLE>
Recent Performance Results*
<CAPTION>
12 Month 3 Month
1/31/94 10/31/93 1/31/93 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares $10.78 $11.15 $10.43 + 4.88%(1) -1.90%(1)
Class B Shares 10.78 11.15 10.43 + 4.88(1) -1.90(1)
Class A Shares--Total Return +13.15(2) +1.77(3)
Class B Shares--Total Return +12.58(4) +1.65(5)
Class A Shares--Standardized 30-day Yield 4.41%
Class B Shares--Standardized 30-day Yield 4.09%
<FN>
*Investment results shown for the 3-month and 12-month
periods are before the deduction of any sales charges.
(1)Percent change includes reinvestment of $0.157 per share
capital gains distributions.
(2)Percent change includes reinvestment of $0.828 per share
ordinary income dividends and $0.157 per share capital gains
distributions.
(3)Percent change includes reinvestment of $0.402 per share
ordinary income dividends and $0.157 per share capital gains
distributions.
(4)Percent change includes reinvestment of $0.774 per share
ordinary income dividends and $0.157 per share capital gains
distributions.
(5)Percent change includes reinvestment of $0.388 per share
ordinary income dividends and $0.157 per share capital gains
distributions.
</TABLE>
PERFORMANCE DATA (concluded)
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
5/31/91--12/31/91 $10.00 $10.29 -- $0.408 + 7.14%
1992 10.29 10.37 -- 0.734 + 8.21
1993 10.37 10.67 $0.157 0.831 +12.69
1/1/94--1/31/94 10.67 10.78 -- 0.032 + 1.43
------ ------
Total $0.157 Total $2.005
Cumulative total return as of 1/31/94: +32.51%**
<PAGE>
<FN>
*Figures may include short-term capital gains
distributions.
**Figures assume reinvestment of all dividends and capital
gains distributions at net asset value on the payable date, and
do not include sales charge; results would be lower if sales
charge was included.
</TABLE>
<TABLE>
Performance Summary--Class B Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<C> <C> <C> <C> <C> <C>
5/31/91--12/31/91 $10.00 $10.29 -- $0.378 + 6.82%
1992 10.29 10.37 -- 0.682 + 7.66
1993 10.37 10.67 $0.157 0.777 +12.12
1/1/94--1/31/94 10.67 10.78 -- 0.029 + 1.40
------ ------
Total $0.157 Total $1.866
Cumulative total return as of 1/31/94: +30.75%**
<FN>
*Figures may include short-term capital gains
distributions.
**Figures assume reinvestment of all dividends and capital
gains distributions at net asset value on the payable date, and
do not reflect deduction of any sales charge; results would be
lower if sales charge was deducted.
</TABLE>
Average Annual Total Return
% Return Without % Return With
Class A Shares* Sales Charge Sales Charge**
Year Ended 12/31/93 +12.69% +8.18%
Inception (5/31/91)
through 12/31/93 +10.88 +9.14
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Class B Shares* Without CDSC With CDSC**
Year Ended 12/31/93 +12.12% +8.12%
Inception (5/31/91)
through 12/31/93 +10.32 +9.65
[FN]
*Maximum contingent deferred sales charge is 4% and is
reduced to 0% after 4 years.
**Assuming payment of applicable contingent deferred sales
charge.
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Florida--102.06%
BBB+ Baa $ 1,600 Alachua County, Florida, Health Facilities Authority, Health Facilities Revenue
Refunding Bonds (Santa Fe Healthcare Facilities Project), 6.05% due 11/15/2016 $ 1,611
AAA Aaa 1,690 Boca Raton, Florida, Community Redevelopment Agency, Tax Increment Revenue Bonds
(Mizner Park Project), 5.875% due 3/01/2013 (e) 1,779
BBB+ Baa 2,000 Bradford County, Florida, Health Facilities Authority, Revenue Refunding Bonds
(Santa Fe Healthcare Facilities Project), 6% due 11/15/2009 2,024
NR A1 4,750 Brevard County, Florida, Health Facilities Authority, Revenue Refunding Bonds
(Holmes--Regional Medical Center Hospital Project), 5.75% due 10/01/2013 4,843
Brevard County, Florida, Health Facilities Authority, Revenue Refunding Bonds
(Wuesthoff Memorial Hospital), Series B:
NR Baa1 1,375 6.90% due 4/01/2002 1,550
NR Baa1 3,500 7.20% due 4/01/2013 3,876
AAA Aaa 2,500 Broward County, Florida, School District Refunding Bonds, UT, 6.55%* due 2/15/2008 (b) 1,236
A+ A1 9,250 Citrus County, Florida, Power Corporation PCR, Refunding (Crystal River), Series A,
6.625% due 1/01/2027 10,284
AAA Aaa 2,450 Collier County, Florida, Water and Sewer District Refunding Bonds, Series B, 5% due
7/01/2016 (e) 2,401
Dade County, Florida, Aviation Revenue Bonds, Series B, AMT (c):
AAA Aaa 1,000 6.55% due 10/01/2013 1,128
AAA Aaa 5,925 6.60% due 10/01/2022 6,685
NR Aaa 170 Dade County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT, Series B, 7.25% due
9/01/2023 (d) 185
AAA Aaa 3,000 Dade County, Florida, Seaport, GO, UT, 6.50% due 10/01/2026 (b) 3,350
A+ A3 3,250 Dunes, Florida, Community Development District, Revenue Refunding Bonds
(Intracoastal Waterway Bridge), 5.50% due 10/01/2007 3,404
NR Aaa 3,000 Escambia County, Florida, HFA, S/F Mortgage Revenue Bonds (Multi-County Program),
Series A, AMT, 6.90% due 4/01/2020 (f) 3,205
Escambia County, Florida, PCR (Champion International Corporation Project):
BBB Baa1 3,850 AMT, 5.875% due 6/01/2022 3,890
BBB Baa1 2,500 Refunding, 6.95% due 11/01/2007 2,752
AAA Aaa 5,380 Escambia County, Florida, PCR, Refunding (Gulf Power Company Project), 5.80% due
6/01/2023 (c) 5,537
</TABLE>
<PAGE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of Merrill Lynch Florida Muni-
cipal Bond Fund's portfolio holdings in the Schedule
of Investments, we have abbreviated the names of
many of the securities according to the list below and
at right.
AMT Alternative Minimum Tax (subject to)
GO General Obligation Bonds
HFA Housing Finance Authority
IDA Industrial Development Authority
INFLOS Inverse Floating Rate Municipal Bonds
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single-Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Florida (continued)
AA Aa $ 7,000 Florida State Board of Education, Capital Outlay, GO, UT, RIB, 8.247%
due 6/01/2023 (i) $ 7,219
Florida State Board of Education, Capital Outlay, Public Education Revenue Bonds:
AA Aa 5,800 Series A, 6.75% due 6/01/2021 6,580
AA Aa 5,000 Series A, 5% due 6/01/2024 4,789
AA Aa 2,225 Series D, 5.125% due 6/01/2022 2,171
AAA Aaa 1,250 Florida State Division, Board Finance Department, General Services Revenue Bonds
(Department of Natural Resources Preservation), Series 2000-A, 6.75%
due 7/01/2013 (b) 1,418
NR NR 3,495 Florida State Mid-Bay Bridge Authority Revenue Bonds, Series A, 7.50% due 10/01/2017 4,066
BBB NR 5,700 Florida State Mid-Bay Bridge Authority, Revenue Refunding Bonds, Series A, 6.10% due
10/01/2022 5,991
AAA Aaa 17,285 Florida State Municipal Power Agency Revenue Bonds (Power Supply Project), 5.10% due
10/01/2025 (b) 16,730
Florida State Municipal Power Agency, Revenue Refunding Bonds:
AAA Aaa 1,250 (Stanton Project), 6% due 10/01/2015 (c) 1,321
AAA Aaa 5,550 (Stanton II Project), 4.50% due 10/01/2027 (b) 4,927
AAA Aaa 2,690 (Tri-City Project), 5.75% due 10/01/2014 (b) 2,820
AA Aa 2,000 Gainesville, Florida, Utilities System Revenue Bonds, Series A, 6.50% due 10/01/2022 2,273
<PAGE>
Greater Orlando Aviation Authority Revenue Bonds (Orlando Florida Airport Facilities),
AMT:
AAA Aaa 190 8.125% due 10/01/1998 (e)(g) 228
A- A1 495 8.375% due 10/01/1998 (g) 600
AAA Aaa 1,810 8.125% due 10/01/2013 (e) 2,117
A- A1 4,505 8.375% due 10/01/2016 5,338
AAA Aaa 2,000 Hernando County, Florida, Water and Sewer Revenue Refunding and Improvement Bonds,
6% due 6/01/2019 (e) 2,155
A A 9,310 Hillsborough County, Florida, Capital Improvement Revenue Bonds (County Center
Project), Second Series, 6.75% due 7/01/2022 10,548
Hillsborough County, Florida, IDA, PCR, Refunding (Tampa Electric Company Project):
AA- Aa2 2,250 Series 91, 7.875% due 8/01/2021 2,728
A1+ VMIG1 6,300 VRDN, 2.10% due 5/15/2018 (a) 6,300
AA- Aa2 1,200 VRDN, 2.15% due 9/01/2025 (a) 1,200
Hillsborough County, Florida, Utilities Refunding Revenue Bonds (c):
AAA Aaa 5,000 5.40% due 8/01/2009 5,166
AAA Aaa 8,940 5.50% due 8/01/2012 9,206
AAA Aaa 12,895 Hollywood, Florida, Water and Sewer Revenue Refunding Bonds, 5.60% due 10/01/2023 (e) 13,353
Jacksonville, Florida, Electric Authority Revenue Refunding Bonds:
AA Aa1 2,250 RIB, 8.151% due 10/01/2009 (i) 2,416
AA Aa1 1,375 (Saint John's River Power Park Systems), 7% due 10/01/2009 1,519
AA Aa1 1,000 (Saint John's River Power--2), Series 7, 5.75% due 10/01/2012 1,059
AAA Aaa 3,000 Jacksonville, Florida, Excise Taxes Revenue Bonds, AMT, 5.75% due 10/01/2020 (e) 3,124
NR Aa 2,500 Jacksonville, Florida, Health Facilities Authority, Hospital Revenue Refunding Bonds
(Daughters of Charity), Series A, 5% due 11/15/2015 2,432
BBB- NR 5,000 Largo, Florida, Sun Coast Health Systems, Hospital Revenue Bonds, GO, 6.30% due
3/01/2020 4,974
AAA Aaa 2,000 Lee County, Florida, Hospital Board of Directors, Hospital Revenue, INFLOS, 10.635%
due 4/01/2020 (c)(i) 2,460
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <S> <C> <S> <C>
Florida (continued)
AAA UR** $ 2,250 Leesburg, Florida, Hospital Revenue Capital Improvement Bonds (Leesburg Regional
Medical Center Project), Series 91--A, 7.375% due 7/01/2002 (g) $ 2,744
<PAGE>
Leesburg, Florida, Hospital Revenue Refunding Bonds (Leesburg Regional Medical
Center Project):
BBB+ Baa1 2,475 Series A, 6.125% due 7/01/2018 2,535
BBB+ Baa1 1,950 Series B, 5.70% due 7/01/2018 1,930
AAA Aaa 1,200 Marion County, Florida, Utilities System Revenue Bonds, 5.25% due 12/01/2023 (h) 1,201
Miami Beach, Florida, Redevelopment Agency, Tax Increment Revenue Bonds (City
Center Historic Convention Village), AMT, GO:
BBB Baa 1,000 5.80% due 12/01/2013 1,004
BBB Baa 1,000 5.875% due 12/01/2022 1,005
AAA Aaa 4,950 Orange County, Florida, Health Facilities Authority, Revenue Refunding Bonds (Pooled
Hospital Loan), Series A, 7.875% due 12/01/2025 (e) 5,321
AAA Aaa 1,000 Orange County, Florida, Tourist Development, Tax Revenue Refunding, Series A, 6.50%
due 10/01/2010 (b) 1,129
Orlando, Florida, Utilities Commission, Water and Electric Revenue Refunding Bonds:
AA Aa1 1,000 6% due 10/01/2010 1,115
AA- Aa 3,005 Sub-Series A, 5% due 10/01/2011 3,010
AA- Aa 3,500 Sub-Series A, 5% due 10/01/2012 3,491
AA- Aa 1,000 Sub-Series D, 5% due 10/01/2023 942
AAA Aaa 4,250 Orlando and Orange County, Florida, Expressway Authority, Revenue Refunding Bonds,
Junior--Lien, Series A, 5% due 7/01/2017 (e) 4,124
Palm Bay, Florida, Utilities Revenue Refunding Bonds (Palm Bay Utilities Corporation
Project) (c):
AAA Aaa 1,940 5.10% due 10/01/2010 1,957
AAA Aaa 2,040 5.10% due 10/01/2011 2,051
AAA Aaa 2,500 5% due 10/01/2015 2,464
NR Aa 2,500 Palm Beach County, Florida, GO, 6.60% due 10/01/2011 2,857
A- NR 1,000 Palm Beach County, Florida, Health Facilities Authority, Hospital Revenue Bonds (Good
Samaritan Health Systems), 6.10% due 10/01/2005 1,086
NR VMIG1 800 Palm Beach County, Florida, Water and Sewer Revenue Bonds, VRDN, 2.20% due
10/01/2011 (a) 800
AAA Aaa 2,750 Pinellas County, Florida, Health Facilities Authority, Hospital Revenue Bonds
(Bay Front Obligation Group), Series A, 5.60% due 7/01/2023 (c) 2,834
AAA Aaa 5,000 Polk County, Florida, Capital Improvement Revenue Refunding Bonds, 5% due
12/01/2011 (e) 4,913
NR Aaa 350 Polk County, Florida, HFA, Revenue Refunding Bonds, Series A, 7.15% due 9/01/2023 (f) 372
BBB NR 23,000 Port Everglades Authority, Florida, Port Improvement Revenue Refunding Bonds,
Series A, 5% due 9/01/2016 21,606
<PAGE>
Reedy Creek, Florida, Improvement District, Utilities Revenue Bonds, Series 1 (c):
AAA Aaa 1,300 AMT, 8.90% due 10/01/2003 1,537
AAA Aaa 3,000 AMT, 8.50% due 10/01/2009 3,503
AAA Aaa 2,000 Refunding, 5% due 10/01/2010 2,000
AAA Aaa 6,000 Refunding, Series 1, 5% due 10/01/2011 5,979
AAA Aaa 5,130 Refunding, Series 1, 5% due 10/01/2014 5,020
AAA Aaa 2,850 Refunding, Series 1, 5% due 10/01/2019 2,754
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<C> <C> <C> <S> <C>
Florida (concluded)
BBB+ A $ 3,500 Saint John's County, Florida, IDA, Hospital Revenue Bonds (Flagler
Hospital Project), 6% due 8/01/2022 $ 3,534
AAA Aaa 1,000 Saint John's County, Florida, Water and Sewer Revenue Bonds, Series A, 7%* due
6/01/2015 (c) 321
Saint Lucie County, Florida, Sales Tax Revenue Refunding Bonds (e):
AAA Aaa 1,150 5% due 10/01/2008 1,161
AAA Aaa 1,390 5% due 10/01/2009 1,397
AAA Aaa 1,180 5% due 10/01/2010 1,180
Saint Petersburg, Florida, Health Facilities Authority, Hospital Revenue Bonds
(Allegheny Health System) (c):
AAA Aaa 3,500 (Saint Anthony's), 6.75% due 12/01/2021 3,980
AAA Aaa 2,500 Series A, 7% due 12/01/2015 2,908
AAA Aaa 3,865 Sanford, Florida, Water and Sewer Revenue Refunding Bonds, 4.75% due 10/01/2018 (b) 3,660
A A 1,000 Sarasota County, Florida, Solid Waste System Revenue Refunding Bonds, 5.625% due
10/01/2013 1,024
AAA Aaa 1,500 Sarasota, Florida, Water and Sewer Utilities Revenue Refunding Bonds, Series C,
4.50% due 10/01/2016 (e) 1,378
AAA Aaa 2,500 South Broward Hospital District, Florida, Revenue Bonds, RIB, Series C, 10.658% due
5/13/2021 (b)(i) 3,103
A+ A- 3,500 South Broward Hospital District, Florida, Revenue Refunding Hospital Bonds, 5.50% due
5/01/2028 3,526
AAA Aaa 750 Tallahassee, Florida, Health Facilities Revenue Refunding Bonds (Tallahassee Memorial
Regional Medical Center), Series B, 6% due 12/01/2015 (c) 808
AA- Aa 5,500 Tallahassee, Florida, Municipal Electric Revenue Bonds, Series B, 6.20% due 10/01/2012 6,035
AAA Aaa 1,250 Tampa, Florida, Allegheny Health System Revenue Bonds (Saint Joseph), 6.75% due
12/01/2017 (c) 1,425
AAA Aaa 1,500 Tampa, Florida, Water and Sewer System Revenue Bonds (Sub-Lien), Series A, 7.75% due
10/01/1998 (b)(g) 1,759
A+ A1 1,300 Turtle Run, Florida, Community Development District, Revenue Refunding Bonds,
6.40% due 5/01/2011 1,415
Total Investments (Cost--$312,817)--102.1% 326,866
Liabilities in Excess of Other Assets--(2.1%) (6,592)
--------
Net Assets--100.0% $320,274
========
<PAGE>
<FN>
(a) The interest rate is subject to change periodically based upon the prevailing market rate.
The interest rates shown are those in effect at January 31, 1994.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FNMA and GNMA Collateralized.
(e)FGIC Insured.
(f)GNMA Collateralized.
(g)Prerefunded.
(h)FSA Insured.
(i)The interest rate is subject to change periodically and inversely based upon the prevailing market rate.
The interest rates shown are those in effect at January 31, 1994.
*Represents the yield to maturity.
**Under Review.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Statement of Assets and Liabilities as of January 31, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$312,817,143) (Note 1a) $326,866,245
Cash 14,108,141
Receivables:
Securities sold $ 56,164,386
Beneficial interest sold 5,468,170
Interest 4,602,461 66,235,017
------------
Deferred organization expenses (Note 1e) 38,562
Prepaid expenses and other assets (Note 1e) 27,175
------------
Total assets 407,275,140
------------
Liabilities: Payables:
Securities purchased 81,945,098
Beneficial interest redeemed 4,469,582
Dividends to shareholders (Note 1f) 267,230
Investment adviser (Note 2) 137,334
Distributor (Note 2) 94,948 86,914,192
------------
Accrued expenses and other liabilities 87,264
------------
Total liabilities 87,001,456
------------
Net Assets: Net assets $320,273,684
<PAGE> ============
Net Assets Class A Shares of beneficial interest, $.10 par value, unlimited number of
Consist of: shares authorized $ 712,902
Class B Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized 2,258,089
Paid-in capital in excess of par 302,827,803
Undistributed realized capital gains--net 425,788
Unrealized appreciation on investments--net 14,049,102
------------
Net assets $320,273,684
============
Net Asset Value: Class A--Based on net assets of $76,852,515 and 7,129,024 shares of
beneficial interest outstanding $ 10.78
============
Class B--Based on net assets of $243,421,169 and 22,580,886 shares of
beneficial interest outstanding $ 10.78
============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six
Months Ended
January 31, 1994
<S> <S> <C>
Investment Income Interest and amortization of premium and discount earned $ 8,668,555
(Note 1d):
Expenses: Investment advisory fees (Note 2) 840,774
Distribution fees--Class B (Note 2) 578,145
Transfer agent fees--Class B (Note 2) 43,967
Professional fees 29,595
Accounting services (Note 2) 25,047
Printing and shareholder reports 19,923
Custodian fees 17,210
Transfer agent fees--Class A (Note 2) 12,237
Registration fees (Note 1e) 8,674
Pricing fees 7,687
Trustees' fees and expenses 6,704
Amortization of organization expenses (Note 1e) 6,499
Other 3,190
-----------
Total expenses 1,599,652
-----------
Investment income--net 7,068,903
-----------
Realized & Realized gain on investments--net 6,067,609
Unrealized Gain on Change in unrealized appreciation on investments--net 5,411,064
Investments--Net -----------
(Notes 1d & 3): Net Increase in Net Assets Resulting from Operations $18,547,576
===========
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the
Six Months For the
Ended Year Ended
Jan. 31, July 31,
Increase (Decrease) in Net Assets: 1994 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 7,068,903 $ 12,450,382
Realized gain on investments--net 6,067,609 6,702,070
Change in unrealized appreciation/depreciation on investments--net 5,411,064 (417,064)
------------ ------------
Net increase in net assets resulting from operations 18,547,576 18,735,388
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (1,864,534) (3,367,062)
Shareholders Class B (5,204,369) (9,083,320)
(Note 1f): Realized gain on investments--net:
Class A (3,051,271) (539,575)
Class B (9,237,630) (1,587,560)
------------ ------------
Net decrease in net assets resulting from dividends and distributions
to shareholders (19,357,804) (14,577,517)
------------ ------------
Beneficial Interest Net increase in net assets derived from beneficial interest transactions 36,633,491 82,743,558
Transactions ------------ ------------
(Note 4):
Net Assets: Total increase in net assets 35,823,263 86,901,429
Beginning of period 284,450,421 197,548,992
------------ ------------
End of period $320,273,684 $284,450,421
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A
For the For the
Six Period
The following per share data and ratios have been derived Months May 31,
from information provided in the financial statements. Ended For the Year Ended 1991++ to
Jan. 31, July 31, July 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.78 $ 10.66 $ 9.99 $ 10.00
Operating ------- ------- ------ -------
Performance: Investment income--net .28 .59 .66 .10
Realized and unrealized gain (loss) on
investments--net .42 .22 .68 (.01)
------- ------- ------ -------
Total from investment operations .70 .81 1.34 .09
------- ------- ------ -------
Less dividends and distributions:
Investment income--net (.28) (.59) (.66) (.10)
Realized gain on investments--net (.42) (.10) (.01) --
------- ------- ------ -------
Total dividends and distributions (.70) (.69) (.67) (.10)
------- ------- ------ -------
Net asset value, end of period $ 10.78 $ 10.78 $ 10.66 $ 9.99
======= ======= ======= =======
Total Investment Based on net asset value per share 6.59%+++ 7.99% 13.91% 1.07%+++
Return:** ======= ======= ======= =======
Ratios to Expenses, net of reimbursement .66%* .66% .43% .28%*
Average ======= ======= ======= =======
Net Assets: Expenses .66%* .69% .76% .83%*
======= ======= ======= =======
Investment income--net 5.01%* 5.58% 6.39% 6.69%*
======= ======= ======= =======
Supplemental Net assets, end of period (in thousands) $76,853 $70,610 $49,806 $27,961
Data: ======= ======= ======= =======
Portfolio turnover 123.14% 142.59% 102.36% 16.96%
======= ======= ======= =======
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION> Class B
For the For the
Six Period
The following per share data and ratios have been derived Months May 31,
from information provided in the financial statements. Ended For the Year Ended 1991++ to
Jan. 31, July 31, July 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.78 $ 10.66 $ 9.99 $ 10.00
Operating -------- -------- -------- -------
Performance: Investment income--net .25 .54 .61 .09
Realized and unrealized gain (loss) on
investments--net .42 .22 .68 (.01)
-------- -------- -------- -------
Total from investment operations .67 .76 1.29 .08
-------- -------- --------- -------
Less dividends and distributions:
Investment income--net (.25) (.54) (.61) (.09)
Realized gain on investments--net (.42) (.10) (.01) --
-------- -------- -------- -------
Total dividends and distributions (.67) (.64) (.62) (.09)
-------- -------- -------- -------
Net asset value, end of period $ 10.78 $ 10.78 $ 10.66 $ 9.99
======== ======== ======== =======
Total Investment Based on net asset value per share 6.32%+++ 7.45% 13.33% 0.99%+++
Return:** ======== ======== ======== =======
Ratios to Expenses, excluding distribution fees and net of
Average reimbursement .67%* .66% .44% .29%*
Net Assets: ======== ======== ======== =======
Expenses, net of reimbursement 1.17%* 1.16% .94% .79%*
======== ======== ======== =======
Expenses 1.17%* 1.20% 1.26% 1.34%*
======== ======== ======== =======
Investment income--net 4.50%* 5.07% 5.87% 6.19%*
======== ======== ======== =======
Supplemental Net assets, end of period (in thousands) $243,421 $213,840 $147,743 $71,831
Data: ======== ======== ======== =======
Portfolio turnover 123.14% 142.59% 102.36% 16.96%
======== ======== ======== =======
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Florida Municipal Bond Fund (the "Fund") is part of Merrill
Lynch Multi-State Municipal Series Trust (the "Trust"). The Fund is
registered under the Investment Company Act of 1940 as a non-diversified,
open-end management investment company. The Trust offers both Class A
and Class B Shares. Class A Shares are sold with a front-end sales charge.
Class B Shares may be subject to a contingent deferred sales charge. Both
classes of shares have identical voting, dividend, liquidation and other
rights and the same terms and conditions, except that Class B Shares bear
certain expenses related to the distribution of such shares and have ex-
clusive voting rights with respect to matters relating to such distribu-
tion expenditures. The following is a summary of significant accounting
policies followed by the Fund.
(a) Valuation of investments--Municipal bonds and other portfolio securities
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 by the Fund's pricing service
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. Options,
which are traded on exchanges, are valued at their last sale price as of the
close of such exchanges or, lacking any sales, at the last available bid price.
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) Financial futures contracts--The Fund may purchase or sell interest
rate 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 Fund deposits and maintains
as collateral such initial margin as required by the exchange on which
the transaction is effected. Pursuant to the contract, the Fund agrees
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 Fund as unrealized gains or
losses. When the contract is closed, the Fund records 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 the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies
and to distribute substantially all of its taxable income to its share-
holders. Therefore, no Federal income tax provision is required.
<PAGE>
(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. Original
issue 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 five-year period. 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 re-
corded on the ex-dividend dates.
2. Investment Advisory Agreement and Transactions with
Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). Effective January 1, 1994, the investment
advisory business of FAM was reorganized from a corporation to a limited
partnership. Both prior to and after the reorganization, ultimate control
of FAM was vested with Merrill Lynch & Co., Inc. ("ML & Co."). The general
partner of FAM is Princeton Services, Inc., an indirect wholly-owned sub-
sidiary of ML & Co. The limited partners are ML & Co. and Merrill Lynch
Investment Management, Inc. ("MLIM"), which is also an indirect wholly-
owned subsidiary of ML & Co. The Fund has also entered into Distribution
Agreements and a Distribution Plan with Merrill Lynch Funds Distributor,
Inc. ("MLFD" or "Distributor"), a wholly-owned subsidiary of MLIM.
NOTES TO FINANCIAL STATEMENTS (concluded)
FAM is responsible for the management of the Fund's portfolio and provides
the necessary personnel, facilities, equipment and certain other services
necessary to the operations of the Fund. For such services, the Fund pays
a monthly fee based upon the average daily value of the Fund's net assets
at the following annual rates: 0.55% of the Fund's average daily net assets
not exceeding $500 million; 0.525% of average daily net assets in excess of
$500 million but not exceeding $1 billion; and 0.50% of average daily net
assets in excess of $1 billion.
Pursuant to a distribution plan (the "Distribution Plan") adopted by the
Fund in accordance with Rule 12b-1 under the Investment Company Act of 1940,
the Fund pays the Distributor ongoing account maintenance and distribution
fees which are accrued daily and paid monthly at the annual rates of 0.25%
and 0.25%, respectively, of the average daily net assets of the Class B
Shares of the Fund. Pursuant to a sub-agreement with the Distributor,
Merrill Lynch also provides account maintenance and distribution services
to the Fund. As authorized by the Plan, the Distributor has entered into
an agreement with Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S"),
an affiliate of FAM, which provides for the compensation of MLPF&S for
providing distribution-related services to the Fund.
<PAGE>
For the six months ended January 31, 1994, MLFD earned underwriting
discounts of $13,683, and MLPF&S earned dealer concessions of $126,022
on sales of the Fund's Class A Shares.
MLPF&S also received contingent deferred sales charges of $239,724 re-
lating to Class B Share transactions during the period.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML
& Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or directors
of FAM, MLIM, MLFD, FDS, MLPF&S, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for
the six months ended January 31, 1994 were $397,982,466 and $371,964,726,
respectively.
Net realized and unrealized gains (losses) as of January 31, 1994
were as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $6,144,440 $14,049,102
Futures transactions (76,831) 0
---------- -----------
Total $6,067,609 $14,049,102
========== ===========
As of January 31, 1994, net unrealized appreciation for Federal income
tax purposes aggregated $14,049,102, of which $14,115,520 related to
appreciated securities and $66,418 related to depreciated securities.
The aggregate cost of investments at January 31, 1994 for Federal income
tax purposes was $312,817,143.
4. Beneficial Interest Transactions:
Net increase in net assets derived from beneficial interest
transactions was $36,633,491 and $82,743,558 for the six months
ended January 31, 1994 and the year ended July 31, 1993,
respectively.
<PAGE>
Class A Shares for the Six Dollar
Months Ended January 31, 1994 Shares Amount
Shares sold 2,322,911 $25,256,002
Shares issued to shareholders in
reinvestment of dividends and
distributions 181,757 1,956,431
----------- -----------
Total issued 2,504,668 27,212,433
Shares redeemed (1,924,300) (20,702,822)
----------- -----------
Net increase 580,368 $ 6,509,611
=========== ===========
Class A Shares for the Dollar
Year Ended July 31, 1993 Shares Amount
Shares sold 2,894,021 $30,466,332
Shares issued to shareholders
in reinvestment of dividends
and distributions 159,155 1,673,278
---------- -----------
Total issued 3,053,176 32,139,610
Shares redeemed (1,175,062) (12,411,646)
---------- -----------
Net increase 1,878,114 $19,727,964
========== ===========
Class B Shares for the Six Dollar
Months Ended January 31, 1994 Shares Amount
Shares sold 3,786,230 $41,605,149
Shares issued to shareholders in
reinvestment of dividends
and distributions 556,885 5,985,692
---------- -----------
Total issued 4,343,115 47,590,841
Shares redeemed (1,594,772) (17,466,961)
---------- -----------
Net increase 2,748,343 $30,123,880
========== ===========
Class B Shares for the Dollar
Year Ended July 31, 1993 Shares Amount
Shares sold 7,844,895 $82,892,920
Shares issued to shareholders
in reinvestment of dividends
and distributions 376,281 3,954,896
---------- -----------
Total issued 8,221,176 86,847,816
Shares redeemed (2,243,468) (23,832,222)
---------- -----------
Net increase 5,977,708 $63,015,594
========== ===========
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Kenneth S. Axelson, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary
Custodian
National Westminster Bank NJ
10 Exchange Place
Jersey City, New Jersey 07302
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
