MERRILL LYNCH
FLORIDA MUNICIPAL
BOND FUND
FUND LOGO
Semi-Annual Report
January 31, 1995
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, NJ
08543-9011
<PAGE>
TO OUR SHAREHOLDERS
The combination of heightened inflationary concerns, anticipation of
further tightening of monetary policy by the Federal Reserve Board
and the turmoil of the Mexican currency crisis all exerted negative
influences on the US financial markets during the January quarter.
On the positive side, increasing signs that the US economy may be
losing momentum suggested that most of the interest rate increases
for this economic cycle may be behind us. As a result of these
economic crosscurrents, the US stock and bond markets continued to
be volatile during the period.
The manufacturing sector proved to be the driving force behind the
US economy through the final quarter of 1994, making an important
contribution to the substantial increase in corporate earnings. US
companies have been successful at containing labor costs, which are
an important component of the inflation outlook. Growth in the
economy has not been translated into higher wages and benefits for
US workers. Consumer spending is growing at a slower pace than in
previous economic recoveries, but households are nonetheless
spending more than saving, as the personal savings rate fell to an
all-time annual low in 1994.
In the weeks ahead, investors will continue to assess economic data
and inflationary trends in order to gauge whether further increases
in short-term interest rates are likely as 1995 unfolds. Despite the
widespread concerns about rising prices for raw materials and
incipient inflationary pressures, 1994's inflation results were as
positive as those in 1993, creating the best sustained inflation
performance in 30 years. However, it is not likely that such
positive inflation results will be duplicated in 1995. Investors
will also focus on the progress that the new Congress makes on both
reducing spending and the Federal budget deficit and passing tax
cuts that promote savings and investment. Legislative progress,
combined with continued indications of moderate and sustainable
levels of economic growth, would be positive for the US capital
markets. However, the lagged effects of higher interest rates could
slow the economy sharply and with it, the growth of corporate
profits.
The Municipal Market
The municipal bond market continued to exhibit considerable interest
rate volatility during the three months ended January 31, 1995.
Yields on A-rated municipal revenue bonds continued to rise
throughout November to a high of 7.37% as measured by the Bond Buyer
Revenue Bond Index. The tax-exempt bond market improved dramatically
for the remainder of the quarter, and yields fell by approximately
60 basis points (0.60%) to a four-month low of 6.78%. However, the
Index failed to capture much of the rally that occurred at the end
of January as market yields declined a further ten basis points into
the 6.65% range. Municipal bond prices have now recaptured most of
their declines of the last six months.
<PAGE>
This improvement in municipal bond prices during the January quarter
was largely the result of significant positive change in investor
sentiment. The series of interest rate increases engineered during
1994 have gone a long way in confirming the Federal Reserve Board's
anti-inflationary resolve. Additionally, the recent signs of a
weakening domestic economy, as well as the negative near-term impact
of the Kobe earthquake and Mexican currency situation, have allowed
investors to become more comfortable with the concept that the vast
majority of the recent rise in fixed-income rates has already
occurred and that yields during 1995 are more likely to remain
stable or decline than they are to significantly rise again.
Consequently, current yield levels are being viewed as attractive to
long-term investors.
In addition to this more positive outlook, the ongoing strong
technical position of the municipal bond market has only fostered
the increase in tax-exempt bond prices seen in recent months. Over
$25 billion in bond proceeds became available to investors at year-
end 1994 from bond maturities, coupon payments and early
redemptions. However, during the recent January quarter, new bond
issuance was less than $25 billion, down 50% from the January 1994
quarter. In January 1995, less than $7 billion in long-term
municipal securities were issued, making this past January's
issuance the lowest monthly total since the mid-1980s. Investor
demand has easily surpassed supply, causing bond prices to rise
rapidly. Also, as 1995 annual issuance is expected to be below the
recent historically low 1994 levels, this positive technical
environment should continue to support the recent improvements in
municipal bond prices into the coming quarters.
Portfolio Strategy
Structural changes to the Fund included lengthening the maturities
in the one-year--ten-year range, increasing the percentage of
revenue bonds over general obligation bonds, decreasing the amount
of bonds subject to the alternative minimum tax (AMT), and reducing
the Fund's cash position to a minimum amount. By lengthening
maturities, we added incremental yield to the Fund and improved the
performance characteristics of our holdings. We anticipate that the
value of high-grade revenue bonds will increase relative to general
obligation bonds. Furthermore, with the decline in issuance over the
past year, the historical spreads between non-AMT and AMT bonds
narrowed dramatically, favoring non-AMT bonds. Finally, the overall
tone in the fixed-income markets improved over the January quarter
as investors realized that the Federal Reserve Board was clearly
committed to and thus far successful at fighting inflation.
Therefore, we reduced the Fund's cash position to seek to further
enhance the yield to shareholders.
<PAGE>
In general, after the peak in yields reached in November, Florida
municipal bonds appeared to lead the entire municipal market rally
as retail investors and dealers returned to the market looking to
purchase bonds in the 20-year--25-year range. Having repositioned
the Fund to participate in this type of movement, we look forward to
seeking to improve the Fund's performance in 1995.
In Conclusion
We appreciate your ongoing interest in Merrill Lynch Florida
Municipal Bond Fund, and we look forward to serving your investment
needs 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 6, 1995
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
State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101
<PAGE>
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
PERFORMANCE DATA
About Fund Performance
Since October 21, 1994, investors have been able to purchase shares
of the Fund 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 4% 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 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year. In addition, Class B
Shares are subject to a distribution fee of 0.25% and an account
maintenance fee of 0.25%. These shares automatically convert to
Class D Shares after approximately 10 years.
* Class C Shares are subject to a distribution fee of 0.35% and an
account maintenance fee of 0.25%. 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 4% and an
account maintenance fee of 0.10% (but no distribution fee).
Performance data for the Fund's Class A and Class B Shares are
presented in the "Recent Performance Results," "Performance Summary"
and "Average Annual Total Return" tables below and on page 4. Data
for Class C and Class D Shares are also presented in the "Recent
Performance Results" and "Aggregate Total Return" tables below and
on page 4.
The "Recent Performance Results" table shows investment results
before the deduction of any sales charges for Class A and Class B
Shares for the 12-month and 3-month periods ended January 31, 1995
and for Class C and Class D Shares for the since inception and 3-
month periods ended January 31, 1995. All data in this table assume
imposition of the actual total expenses incurred by each class of
shares during the relevant period.
<PAGE>
None of the past results shown should 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. 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>
12 Month 3 Month
1/31/95 10/31/94 1/31/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $9.57 $9.32 $10.78 -11.22% +2.68%
Class B Shares* 9.57 9.32 10.78 -11.22 +2.68
Class C Shares* 9.56 9.32 9.48 + 0.84 +2.58
Class D Shares* 9.56 9.32 9.48 + 0.84 +2.58
Class A Shares--Total Return* - 6.17(1) +4.16(2)
Class B Shares--Total Return* - 6.64(3) +4.02(4)
Class C Shares--Total Return* + 2.25(5) +3.88(6)
Class D Shares--Total Return* + 2.39(7) +4.02(8)
Class A Shares--Standardized 30-day Yield 5.35%
Class B Shares--Standardized 30-day Yield 5.07%
Class C Shares--Standardized 30-day Yield 4.90%
Class D Shares--Standardized 30-day Yield 5.18%
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
++Investment results for Class C and Class D Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.536 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.132 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.487 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.120 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.118 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.117 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.130 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.129 per share ordinary
income dividends.
<PAGE>
PERFORMANCE DATA (concluded)
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/94 -7.81% -11.50%
Inception (5/31/91)
through 12/31/94 +5.32 + 4.13
<FN>
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/94 -8.27% -11.76%
Inception (5/31/91)
through 12/31/94 +4.79 + 4.56
<FN>
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
Aggregate Total Return
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (10/21/94)
through 12/31/94 -0.92% -1.90%
<FN>
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Inception (10/21/94)
through 12/31/94 -0.92% -4.88%
<FN>
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
</TABLE>
<TABLE>
Performance Summary--Class A Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <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
1994 10.67 9.31 -- 0.538 - 7.81
1/1/95--1/31/95 9.31 9.57 -- 0.031 + 3.23
------ ------
Total $0.157 Total $2.542
Cumulative total return as of 1/31/95: +24.34%**
<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**
<S> <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
1994 10.67 9.31 -- 0.488 - 8.27
1/1/95--1/31/95 9.31 9.57 -- 0.028 + 3.20
------ ------
Total $0.157 Total $2.353
Cumulative total return as of 1/31/95: +22.07%**
<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
reflect deduction of any sales charge; results would be lower if
sales charge was deducted.
</TABLE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of Merrill Lynch Florida
Municipal 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)
DATES Daily Adjustable Tax-Exempt Securities
GO General Obligation Bonds
HFA Housing Finance Authority
IDA Industrial Development Authority
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
SAVRS Select Auction Variable Rate Securities
S/F Single-Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida--101.5%
<S> <S> <C> <S> <C>
AAA Aaa $ 1,095 Altamonte Springs, Florida, Health Facilities Authority, Hospital
Revenue Bonds (Adventist Health Systems-Sunbelt), 7% due 10/01/2014 $ 1,196
NR* VMIG1+++ 1,200 Atlantic Beach, Florida, Revenue Refunding and Improvement Bonds
(Fleet Landing), VRDN, Series B, 4.25% due 10/01/2024 (a) 1,200
AAA Aaa 3,750 Brevard County, Florida, Health Facilities Authority Revenue Bonds
(Holmes-Regional Medical Center Hospital Project), 5.75% due 10/01/2013 (c) 3,553
<PAGE>
Brevard County, Florida, Health Facilities Authority Revenue Bonds
(Wuesthoff Memorial Hospital), Series B:
AAA Aaa 1,375 6.90% due 4/01/2002 (c) 1,445
AAA Aaa 10,750 Refunding, 7.20% due 4/01/2013 11,240
NR* Aaa 5,000 Brevard County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT,
6.70% due 9/01/2027 (f) 5,008
Broward County, Florida, HFA, M/F Housing Revenue Refunding Bonds
(Lakeside Apartments Project) (d):
AAA NR* 1,100 6.90% due 8/01/2015 1,129
AAA NR* 1,100 7% due 2/01/2025 1,124
A+ A1 3,550 Citrus County, Florida, Power Corporation PCR, Refunding (Crystal
River), Series A, 6.62% due 1/01/2027 3,579
Dade County, Florida, Aviation Revenue Bonds:
AAA Aaa 1,000 AMT, Series B, 6.55% due 10/01/2013 (c) 1,026
A1 VMIG1+++ 100 Refunding, VRDN, Series V, 3.45% due 10/01/2007 (a) 100
Dade County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT (f):
NR* Aaa 170 Series B, 7.25% due 9/01/2023 (d) 176
NR* Aaa 4,420 Series C, 7.75% due 9/01/2022 4,697
AAA Aaa 10,000 Dade County, Florida, Seaport, GO, UT, 6.50% due 10/01/2026 (b) 10,198
NR* Aaa 12,000 Escambia County, Florida, HFA, S/F Mortgage Revenue Bonds (Multi-
County Program), AMT, 7% due 4/01/2028 (d)(f) 12,145
Escambia County, Florida, PCR (Champion International Corporation
Project):
BBB Baa1 11,470 AMT, 6.90% due 8/01/2022 11,358
BBB Baa1 2,500 Refunding, 6.95% due 11/01/2007 2,530
AAA NR* 6,000 Florida HFA (Hammocks Place Project), Series C, 6.25% due 12/01/2006 6,000
NR* Aaa 2,170 Florida HFA Home Ownership Revenue Bonds, AMT, Series G1, 7.90%
due 3/01/2022 (f) 2,317
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida (continued)
<S> <S> <C> <S> <C>
AAA Aaa $10,420 Florida HFA (Maitland Club Apartments), AMT, Series B-1, 7%
due 2/01/2035 (b) $ 10,420
<PAGE>
Florida State Board of Education, Capital Outlay, Public Education
Revenue Bonds:
AA Aa 9,270 Refunding, Series A, 7.25% due 6/01/2023 9,992
AA Aa 2,500 Refunding, Series D, 5.125% due 6/01/2022 2,080
AA Aa 10,000 Series A, 6.75% due 6/01/2021 10,307
AA Aa 5,000 Series B, 6.70% due 6/01/2022 5,130
AAA Aaa 4,750 Florida State Division, Board of Finance Department, General Services
Revenue Bonds (Department of Natural Resources Preservation),
Series 2000-A, 6.75% due 7/01/2013 (b) 4,943
AA Aa 5,600 Florida State, Jacksonville Transportation Revenue Bonds, 6.40%
due 7/01/2022 5,654
Florida State, Mid-Bay Bridge Authority Revenue Bonds, Series A:
NR* NR* 3,495 7.50% due 10/01/2017 3,686
BBB NR* 5,700 Crossover Refunding, 6.10% due 10/01/2022 5,057
AAA Aaa 4,340 Florida State Turnpike Authority, Turnpike Revenue Refunding Bonds,
Series A, 5% due 7/01/2019 (e) 3,590
Gainesville, Florida, Guaranteed Entitlement Revenue Refunding Bonds (b):
AAA Aaa 1,095 6.10%++ due 8/01/2022 188
AAA Aaa 1,095 6.10%++ due 8/01/2023 177
AAA Aaa 1,095 6.10%++ due 8/01/2024 166
A A 9,000 Hillsborough County, Florida, Capital Improvement Revenue Bonds
(County Center Project), Second Series, 6.75% due 7/01/2022 9,207
Hillsborough County, Florida, IDA, PCR, Refunding (Tampa Electric
Company Project):
AA- Aa2 11,980 6.25% due 12/01/2034 11,521
AA- Aa2 2,250 Series 91, 7.87% due 8/01/2021 2,515
A1+ VMIG1+++ 1,000 VRDN, 3.65% due 5/15/2018 (a) 1,000
AAA Aaa 2,750 Hillsborough County, Florida, Utility Revenue Refunding Bonds,
Series B, 6.50% due 8/01/2016 (c) 2,813
Jacksonville, Florida, Electric Authority, Revenue Refunding Bonds:
AA Aal 1,375 (Saint John's River Power Park Systems), 7% due 10/01/2009 1,437
AA Aal 10,750 (Saint John's River Power-2), Series 9, 5.25% due 10/01/2021 9,153
AAA Aaa 5,000 Jacksonville, Florida, Excise Taxes Revenue Refunding Bonds, 6.50%
due 10/01/2013 (b) 5,135
AAA Aaa 2,500 Jacksonville, Florida, Health Facilities Authority, Hospital Revenue
Refunding Bonds (Daughters of Charity), Series A, 5% due 11/15/2015 (c) 2,046
AAA Aaa 4,000 Lee County, Florida, Hospital Board of Directors, Hospital Revenue
Bonds, 6.60% due 4/01/2020 (c) 4,055
<PAGE>
BBB+ Baa1 5,570 Leesburg, Florida, Hospital Revenue Refunding Bonds (Leesburg Regional
Medical Center Project), Series A, 6.125% due 7/01/2018 4,785
A1 VMIG1+++ 2,200 Manatee County, Florida, PCR, Refunding (Florida Power and Light Company
Project), VRDN, 3.90% due 9/01/2024 (a) 2,200
A1 VMIG1+++ 200 Martin County, Florida, PCR, Refunding (Florida Power and Light
Company Project), VRDN, 3.90% due 9/01/2024 (a) 200
Miami Beach, Florida, Redevelopment Agency, Tax Increment Revenue
Bonds (City Center Historic Convention Village), AMT:
BBB Baa 2,700 5.80% due 12/01/2013 2,482
BBB Baa 1,000 5.87% due 12/01/2022 879
AAA NR* 5,000 Orange County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT, 6.85% due
10/01/2027 (d)(f) 5,067
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida (concluded)
<S> <S> <C> <S> <C>
A- NR* $10,000 Orlando and Orange County, Florida, Expressway Authority, Revenue
Refunding Bonds, Junior Lien, Series A, 5.95% due 7/01/2023 $ 9,170
Orlando, Florida, Utilities Commission, Water and Electric
Revenue Bonds:
AA- Aa 500 Refunding, Subseries D, 5% due 10/01/2023 411
AA- Aa 13,800 Series A, 5.50% due 10/01/2026 12,190
NR* VMIG1+++ 2,300 Palm Beach County, Florida, Water and Sewer Revenue Bonds, VRDN,
3.95% due 10/01/2011 (a) 2,300
AAA Aaa 2,080 Pasco County, Florida, Health Facilities Authority Revenue Bonds
(Gross Adventist Health System-Sunbelt), 7% due 10/01/2014 2,272
AAA Aaa 10,000 Pasco County, Florida, PCR, Refunding (Florida Power-Anclote),
Series A, 6.35% due 2/01/2022 (c) 10,106
A1 VMIG1+++ 2,600 Pinellas County, Florida, Health Facilities Authority, Revenue
Refunding Bonds (Pooled Hospital Loan Project), DATES, 3.95%
due 12/01/2015 (a) 2,600
NR* Aaa 350 Polk County, Florida, HFA, Revenue Refunding Bonds, Series A,
7.15% due 9/01/2023 (f) 362
<PAGE>
BBB+ A 3,250 Saint John's County, Florida, IDA, Hospital Revenue Bonds
(Flagler Hospital Project), 6% due 8/01/2022 2,874
A1 VMIG1+++ 5,800 Saint Lucie County, Florida, PCR, Refunding (Florida Power and
Light Company Project), VRDN, 3.90% due 1/01/2026 (a) 5,800
AAA Aaa 2,500 Saint Petersburg, Florida, Health Facilities Authority, Hospital
Revenue Bonds (Allegheny Health System), Series A, 7% due
12/01/2015 (c) 2,629
AAA Aaa 5,600 South Broward Hospital District, Florida, Hospital Revenue Bonds,
SAVRS, RIB, 6.611% due 5/13/2021 (b) 5,681
AAA Aaa 1,250 Tampa, Florida, Allegany Health System Revenue Bonds (Saint
Joseph), 6.75% due 12/01/2017 (c) 1,295
Tampa, Florida, Water and Sewer Revenue Bonds:
AAA Aaa 10,000 Series A-3, 6.25% due 10/01/2012 (e) 10,136
AAA Aaa 1,500 (Sub-Lien), Series A, 7.75% due 10/01/2014 (b) 1,650
Puerto Rico--2.4%
A1+ VMIG1+++ 700 Puerto Rico Commonwealth, Government Development Bank, Revenue
Refunding Bonds, VRDN, 2.95% due 12/01/2015 (a) 700
A+ A 6,000 Puerto Rico Telephone Authority, Revenue Refunding Bonds,
Series L, 6.125% due 1/01/2022 5,808
Total Investments (Cost--$279,099)--103.9% 281,890
Liabilities in Excess of Other Assets--(3.9%) (10,532)
---------
Net Assets--100.0% $271,358
========
<FN>
(a)The interest rate is subject to change periodically based upon
the prevailing market rate. The interest rate shown is the rate in
effect at January 31, 1995.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FNMA Collateralized.
(e)FGIC Insured.
(f)GNMA Collateralized..
*Not Rated.
++Represents the yield to maturity on this zero coupon issue.
+++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of January 31, 1995
<CAPTION>
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$279,098,966) (Note 1a) $281,890,185
Cash 5,570,902
Receivables:
Securities sold $ 33,333,916
Interest 4,473,231
Beneficial interest sold 877,539 38,684,686
------------
Deferred organization expenses (Note 1e) 24,927
Prepaid registration fees and other assets (Note 1e) 15,469
------------
Total assets 326,186,169
------------
Liabilities: Payables:
Securities purchased 53,303,680
Beneficial interest redeemed 948,713
Dividends to shareholders (Note 1f) 308,997
Investment adviser (Note 2) 116,506
Distributor (Note 2) 81,086 54,758,982
------------
Accrued expenses and other liabilities 68,979
------------
Total liabilities 54,827,961
------------
Net Assets: Net assets $271,358,208
============
Net Assets Class A Shares of beneficial interest, $.10 par value,
Consist of: unlimited number of shares authorized $ 604,433
Class B Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 2,155,392
Class C Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 4,890
Class D Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 70,370
Paid-in capital in excess of par 290,765,409
Accumulated realized capital losses on investments--net (25,033,505)
Unrealized appreciation on investments--net 2,791,219
------------
Net assets $271,358,208
============
<PAGE>
Net Asset Value: Class A--Based on net assets of $57,857,008 and 6,044,326 shares
of beneficial interest outstanding $ 9.57
============
Class B--Based on net assets of $206,308,559 and 21,553,924 shares
of beneficial interest outstanding $ 9.57
============
Class C--Based on net assets of $467,256 and 48,898 shares
of beneficial interest outstanding $ 9.56
============
Class D--Based on net assets of $6,725,385 and 703,697 shares
of beneficial interest outstanding $ 9.56
============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended January 31, 1995
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 8,742,856
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 761,546
Distribution fees--Class B (Note 2) 531,247
Transfer agent fees--Class B (Note 2) 54,621
Accounting services (Note 2) 34,244
Professional fees 30,367
Printing and shareholder reports 29,346
Custodian fees 14,285
Transfer agent fees--Class A (Note 2) 13,510
Trustees' fees and expenses 6,979
Amortization of organization expenses (Note 1e) 6,490
Pricing fees 5,673
Registration fees (Note 1e) 3,490
Account maintenance fees--Class D (Note 2) 756
Transfer agent fees--Class D (Note 2) 366
Distribution fees--Class C (Note 2) 284
Transfer agent fees--Class C (Note 2) 30
Other 4,674
------------
Total expenses 1,497,908
------------
Investment income--net 7,244,948
------------
<PAGE>
Realized & Unreal- Realized loss on investments--net (15,415,777)
ized Gain (Loss) Change in unrealized appreciation/depreciation on investments--net 5,558,733
on Investments ------------
- --Net (Notes 1b, Net Decrease in Net Assets Resulting from Operations $ (2,612,096)
1d & 3): ============
</TABLE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the Year
Months Ended Ended
Increase (Decrease) in Net Assets: Jan. 31, 1995 July 31, 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 7,244,948 $ 14,559,475
Realized loss on investments--net (15,415,777) (3,975,907)
Change in unrealized appreciation/depreciation on
investments--net 5,558,733 (11,405,552)
------------ ------------
Net decrease in net assets resulting from operations (2,612,096) (821,984)
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (1,765,692) (3,774,328)
Shareholders Class B (5,434,517) (10,785,147)
(Note 1f): Class C (2,417) --
Class D (42,322) --
In excess of realized gain on investments--net:
Class A -- (3,051,271)
Class B -- (9,237,630)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (7,244,948) (26,848,376)
------------ ------------
Beneficial Net increase (decrease) in net assets derived from beneficial
Interest interest transactions (13,108,089) 37,543,280
Transactions
(Note 4):
Net Assets: Total increase (decrease) in net assets (22,965,133) 9,872,920
Beginning of period 294,323,341 284,450,421
------------ ------------
End of period $271,358,208 $294,323,341
============ ============
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 1991++ to
January 31, For the Year Ended July 31, July 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.88 $ 10.78 $ 10.66 $ 9.99 $ 10.00
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .27 .55 .59 .66 .10
Realized and unrealized gain (loss) on
investments--net (.31) (.48) .22 .68 (.01)
-------- -------- -------- -------- --------
Total from investment operations (.04) .07 .81 1.34 .09
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.27) (.55) (.59) (.66) (.10)
Realized gain on investments--net -- -- (.10) (.01) --
In excess of realized gain on
investments--net -- (.42) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.27) (.97) (.69) (.67) (.10)
-------- -------- -------- -------- --------
Net asset value, end of period $ 9.57 $ 9.88 $ 10.78 $ 10.66 $ 9.99
======== ======== ======== ======== ========
Total Investment Based on net asset value per share (.37%)+++ .39% 7.99% 13.91% 1.07%+++
Return:** ======== ======== ======== ======== ========
Ratios to Expenses, net of reimbursement .69%* .68% .66% .43% .28%*
Average ======== ======== ======== ======== ========
Net Assets: Expenses .69%* .68% .69% .76% .83%*
======== ======== ======== ======== ========
Investment income--net 5.62%* 5.23% 5.58% 6.39% 6.69%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 57,857 $ 69,409 $ 70,610 $ 49,806 $ 27,961
Data: ======== ======== ======== ======== ========
Portfolio turnover 113.44% 205.94% 142.59% 102.36% 16.96%
======== ======== ======== ======== ========
<PAGE>
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<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 1991++ to
January 31, For the Year Ended July 31, July 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.88 $ 10.78 $ 10.66 $ 9.99 $ 10.00
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .24 .49 .54 .61 .09
Realized and unrealized gain (loss)
on investments--net (.31) (.48) .22 .68 (.01)
-------- -------- -------- -------- --------
Total from investment operations (.07) .01 .76 1.29 .08
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.24) (.49) (.54) (.61) (.09)
Realized gain on investments--net -- -- (.10) (.01) --
In excess of realized gain on
investments--net -- (.42) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.24) (.91) (.64) (.62) (.09)
-------- -------- -------- -------- --------
Net asset value, end of period $ 9.57 $ 9.88 $ 10.78 $ 10.66 $ 9.99
======== ======== ======== ======== ========
Total Investment Based on net asset value per share (.63%)+++ (.11%) 7.45% 13.33% .99%+++
Return:** ======== ======== ======== ======== ========
Ratios to Expenses, excluding distribution fees
Average and net of reimbursement .70%* .68% .66% .44% .29%*
Net Assets: ======== ======== ======== ======== ========
Expenses, net of reimbursement 1.20%* 1.18% 1.16% .94% .79%*
======== ======== ======== ======== ========
Expenses 1.20%* 1.18% 1.20% 1.26% 1.34%*
======== ======== ======== ======== ========
Investment income--net 5.11%* 4.73% 5.07% 5.87% 6.19%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands). $206,309 $224,915 $213,840 $147,743 $ 71,831
Data: ======== ======== ======== ======== ========
Portfolio turnover 113.44% 205.94% 142.59% 102.36% 16.96%
======== ======== ======== ======== ========
<PAGE>
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. October 21, 1994++ to
January 31, 1995
Increase (Decrease) in Net Asset Value: Class C Class D
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 9.48 $ 9.48
Operating ------------ ------------
Performance: Investment income--net .13 .14
Realized and unrealized gain on investments--net .08 .08
------------ ------------
Total from investment operations .21 .22
------------ ------------
Less dividends:
Investment income--net (.13) (.14)
------------ ------------
Total dividends (.13) (.14)
------------ ------------
Net asset value, end of period $ 9.56 $ 9.56
============ ============
Total Investment Based on net asset value per share 2.25%+++ 2.39%+++
Return:** ============ ============
Ratios to Expenses, excluding account maintenance and distribution
Average fees and net of reimbursement .72%* .71%*
Net Assets: ============ ============
Expenses, net of reimbursement 1.32%* .81%*
============ ============
Expenses 1.32%* .81%*
============ ============
Investment income--net 5.10%* 5.60%*
============ ============
<PAGE>
Supplemental Net assets, end of period (in thousands) $ 467 $ 6,725
Data: ============ ============
Portfolio turnover 113.44% 113.44%
============ ============
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
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. 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. The Fund 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 Fund.
(a) Valuation of investments--Municipal bonds and other portfolio
securities in which the Fund invests 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.
<PAGE>
(b) Derivative financial instruments--The 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
counterpart does not perform under the contract.
* 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 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.
NOTES TO FINANCIAL STATEMENTS (concluded)
(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 recorded on the ex-dividend dates. Distributions in excess
of realized capital gains are due primarily to differing tax
treatments for futures transactions and post-October losses.
<PAGE>
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner. The Fund has also entered into a Distribution
Agreement and Distribution Plans with Merrill Lynch Funds
Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned
subsidiary of Merrill Lynch Group, Inc.
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 the 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 distribution plans (the "Distribution Plans") 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. The fees are accrued daily and
paid monthly at annual rates based upon the average daily net assets
of the shares as follows:
Account Distribution
Maintenance Fee Fee
Class B 0.25% 0.25%
Class C 0.25% 0.35%
Class D 0.10% --
Pursuant to a sub-agreement with the Distributor, Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S"), a subsidiary of ML & Co.,
also provides account maintenance and distribution services to the
Fund. 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.
<PAGE>
For the six-months ended January 31, 1995, MLFD earned underwriting
discounts and MLPF&S earned dealers concessions on sales of the
Fund's Class A and Class D Shares as follows:
MLFD MLPF&S
Class A $1,782 $15,487
Class D $ 526 $ 5,917
MLPF&S received contingent deferred sales charges of $405,063
relating to transactions in Class B Shares of beneficial interest
for the six months ended January 31, 1995.
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, PSI, MLPF&S, FDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended January 31, 1995 were $288,522,248 and
$294,768,968, respectively.
Net realized and unrealized gains (losses) as of January 31, 1995
were as follows:
Realized Unrealized
Losses Gains
Long-term investments $(13,716,098) $ 2,791,219
Short-term investments (1,084,700) --
Financial futures contracts (614,979) --
------------ -----------
Total $(15,415,777) $ 2,791,219
============ ===========
As of January 31, 1995, net unrealized appreciation for Federal
income tax purposes aggregated $2,791,219, of which $5,643,084
related to appreciated securities and $2,851,865 related to
depreciated securities. The aggregate cost of investments at January
31, 1995 for Federal income tax purposes was $279,098,966.
<PAGE>
4. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from beneficial
interest transactions was $(13,108,089) and $37,543,280 for the six
months ended January 31, 1995 and the year ended July 31, 1994,
respectively.
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the Six Months Dollar
Ended January 31, 1995 Shares Amount
Shares sold 363,094 $ 3,428,917
Shares issued to share-
holders in reinvestment
of dividends 66,001 620,771
------------ ------------
Total issued 429,095 4,049,688
Shares redeemed (1,408,835) (13,245,015)
------------ ------------
Net decrease (979,740) $ (9,195,327)
============ ============
Class A Shares for the Year Dollar
Ended July 31, 1994 Shares Amount
Shares sold 3,108,779 $ 33,087,792
Shares issued to share-
holders in reinvestment
of dividends and
distributions 250,285 2,640,347
------------ ------------
Total issued 3,359,064 35,728,139
Shares redeemed (2,883,654) (30,309,691)
------------ ------------
Net increase 475,410 $ 5,418,448
============ ============
Class B Shares for the
Six Months Ended Dollar
January 31, 1995 Shares Amount
Shares sold 3,241,042 $ 30,719,281
Shares issued to share-
holders in reinvestment
of dividends 207,352 1,950,657
------------ ------------
Total issued 3,448,394 32,669,938
Shares redeemed (4,655,983) (43,521,353)
------------ ------------
Net decrease (1,207,589) $(10,851,415)
============ ============
<PAGE>
Class B Shares
For the Year Ended Dollar
July 31, 1994 Shares Amount
Shares sold 6,365,675 $ 67,466,612
Shares issued to share-
holders in reinvestment
of dividends and
distributions. 768,754 8,098,720
------------ ------------
Total issued 7,134,429 75,565,332
Shares redeemed (4,205,459) (43,440,500)
------------ ------------
Net increase 2,928,970 $ 32,124,832
============ ============
Class C Shares for the
Period October 21, 1994++ Dollar
to January 31, 1995 Shares Amount
Shares sold 103,483 $ 972,893
Shares issued to share-
holders in reinvestment
of dividends 141 1,312
------------ ------------
Total issued 103,624 974,205
Shares redeemed (54,726) (523,181)
------------ ------------
Net increase 48,898 $ 451,024
============ ============
[FN]
++Commencement of Operations.
Class D Shares for the
Period October 21, 1994++ Dollar
to January 31, 1995 Shares Amount
Shares sold 802,516 $ 7,412,045
Shares issued to share-
holders in reinvestment
of dividends 786 7,351
------------ ------------
Total issued 803,302 7,419,396
Shares redeemed (99,605) (931,767)
------------ ------------
Net increase 703,697 $ 6,487,629
============ ============
<PAGE>
[FN]
++Commencement of Operations.
