MERRILL LYNCH
FLORIDA MUNICIPAL
BOND FUND
FUND LOGO
Annual Report
July 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.
<PAGE>
Merrill Lynch Florida
Municipal Bond Fund
Merrill Lynch Multi-State
Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
TO OUR SHAREHOLDERS
In the July quarter, economic data generally showed evidence of
slowing activity. Gross domestic product growth for the first three
months of 1995 was reported at 2.7%, the weakest showing in the past
18 months. Other signs of a sluggish economy included lackluster
durable goods orders, slowing growth in the manufacturing sector,
and three consecutive months of declines in the Index of Leading
Economic Indicators, an occurrence which has often (but not always)
forecast recessions. As a result, concerns arose that the economic
"soft landing" could turn into an actual recession. However, at the
same time there were also expectations that a few months of very
slow or zero growth would be followed by a pickup in economic
activity later in the year. This view was supported by the stronger-
than-expected employment data for June and an upward revision in
May's employment figures, as well as improving housing activity
measures and consumer confidence surveys.
Thus far in 1995, economic developments have been very positive for
the US stock and bond markets, and most US stock market averages
recently have attained record levels. In contrast, the US dollar has
been persistently weak, especially relative to the yen. Following
the Federal Reserve Board's cut in short-term interest rates in
early July, continued signs of a moderating expansion and well-
contained inflationary pressures could provide further assurance
that the peak in US interest rates is behind us, creating a stronger
foundation for higher stock and bond prices. On the other hand,
indications of reaccelerating growth and increasing inflationary
pressures would likely suggest that higher interest rates are on the
horizon, a negative development for the US financial markets. The
outcome of the current deliberations on reducing the Federal budget
deficit will also play a role in the investment outlook for the US
capital markets.
<PAGE>
The Municipal Market
Tax-exempt bond yields exhibited considerable volatility during the
three months ended July 31, 1995. Municipal bond yields initially
fell throughout May into early June as evidence of a slowing
domestic economy and moderate inflationary pressures accumulated. As
measured by the Bond Buyer Revenue Bond Index, yields of A-rated,
uninsured tax-exempt revenue bonds declined 35 basis points (0.35%)
to 5.94%. By late June, however, amid signs of a potentially
resurgent economy, particularly in the rebounding housing sector,
bond yields returned to their April quarter's levels of
approximately 6.30%. The lowering of short-term interest rates by
the Federal Reserve Board in early July temporarily restored
investor confidence and tax-exempt bond yields fell to 6.05%. As
additional economic indicators were released during July, investors
again saw signs that the economy was regaining momentum and that the
Federal Reserve Board action had been premature. Fears that an
expanding economy would have negative inflationary consequences
pushed municipal bond yields higher, ending the July 31, 1995
quarter essentially unchanged at 6.27%. US Treasury bond yields
exhibited a similar pattern of volatility during the July quarter.
However, US Treasury bond yields continued to decline, falling
approximately 50 basis points to 6.85%.
Municipal bonds have underperformed US Treasury securities for a
number of reasons. The record highs of the US equity market have
continued to attract retail investors seeking further capital gains.
Investor demand has also been diminished in recent months by the
"sticker shock" effect that periodically affects the municipal bond
market. Investors who had become accustomed to purchasing tax-exempt
securities in the 6.50%--7.00% range six to seven months ago have
demonstrated understandable reluctance to purchase similar
securities at current levels. The strong fundamental structure of
the municipal bond market, however, suggests that such hesitancy may
prove costly.
However, the major reason by far for the tax-exempt market's recent
underperformance has been concerns regarding the implication for
municipal bonds' tax advantage resulting from various proposed tax
law changes (for example, flat tax, value-added tax or national
sales tax) that have reduced investor demand for tax-exempt
products. Such concerns are likely to quickly recede as investors
realize that such, if any, changes are unlikely to be enacted before
late 1996 at the earliest. Long-term investors will also recall 1986
when similar tax proposals were made, municipal bond yields
initially rose, in some instances, to over 100% of taxable yields.
Tax-exempt bond yields quickly declined as investors' fears proved
to be unfounded.
<PAGE>
The municipal bond market's strong technical position has diminished
somewhat in recent months. New-issue supply over the last six months
has totaled approximately $71 billion, or a decline of over 20%
compared to the corresponding period in 1994. In recent months,
however, municipalities issued approximately $41 billion in new
securities, which represents only a 6% decline versus the same
period a year earlier. Investor demand has remained muted in recent
months despite significant funds available to investors. By the end
of July investors, both individual and institutional, are expected
to have received as much as $80 billion from tax-exempt bond
maturities, coupon payments and the proceeds of early bond
redemptions. Little new money has entered the municipal market in
recent months, largely in response to the factors mentioned above.
Consequently, much of the technical support the municipal market
enjoyed earlier this year has evaporated, causing municipal bond
yields to decline at a slower rate than their taxable counterparts.
However, the recent relative underperformance of municipal bonds has
made them particularly attractive to long-term investors. Tax-exempt
bonds currently yield well over 90% of US Treasury securities. In
some instances, A-rated, long-term revenue bonds have yielded almost
95% of US Treasury bonds. Analysts usually consider municipal bonds
yielding over 82% of US Treasury securities to be historically
attractive. With inflation-adjusted, "real" after-tax equivalent tax-
exempt yields of over 6.50%, municipal securities appear to
represent considerable value.
Current tax-exempt yield levels appear to be overcompensating for
any proposed changes in tax law that can reasonably be expected to
be enacted. As Congressional hearings on this matter would continue
into 1996, and the tax revenue losses resultant from such changes
become more apparent, the likelihood of any significant changes to
tax codes and the resultant decline of municipal bonds' inherent tax
advantage should decline. Under such a scenario, tax-exempt bond
yields would quickly decline and currently available municipal bond
yields would return to their normal historic relationship.
Fiscal Year in Review
At the beginning of the Fund's fiscal year, conditions in the bond
market caused us to become defensive and look to reduce the
volatility of the Fund's net asset value. As the backup in interest
rates became extreme, we anticipated an improving situation for
bonds and extended maturities through spring of 1995. As the bond
market improved, we continued to believe that the Federal Reserve
Board would need to relax monetary conditions to encourage growth,
and the Fund participated in the resulting municipal bond market
rally. After the Federal Reserve Board signaled a change in monetary
policy by lowering interest rates, investors initially showed their
approval. However, investor sentiment turned sharply negative and
the market abruptly reversed course, causing a severe backup in
interest rates. Nevertheless, our strategy of being fully invested
in a generally declining interest rate environment produced a
positive total return for our shareholders.
<PAGE>
Municipal bond market yields, as measured by the Bond Buyer Revenue
Bond Index, began and ended the year almost unchanged at 6.47% and
6.27%, respectively. This belies the tremendous fluctuations in
yields during the year from a high of 7.37% to a low of 5.94%.
During the year ended July 31, 1995, we attempted to take advantage
of opportunities to purchase and hold securities which would benefit
the Fund as long-term holdings. Many of the higher-yielding
healthcare holdings, for example, represent value which investors in
general have yet to recognize. We believe that this strategy will
benefit shareholders over time.
Looking ahead, we are cautious regarding the prospects for a
continuation of a bond market rally and may look for opportunities
to seek to protect the Fund's net asset value.
In Conclusion
We appreciate your ongoing interest in Merrill Lynch Florida
Municipal Bond Fund, and we look forward to assisting you with your
financial needs in the months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
August 30, 1995
<PAGE>
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 all of the Fund's shares are presented in the
"Total Return Based on a $10,000 Investment" graphs on page 4 and
the "Recent Performance Results" table below. Data for the Fund's
Class A and Class B Shares are presented in the "Performance
Summary" and "Average Annual Total Return" tables on page 5. Data
for Class C and Class D Shares are also presented in the "Aggregate
Total Return" tables on page 5.
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 July 31, 1995 and
for Class C and Class D Shares for the since inception and 3-month
periods ended July 31, 1995. All data in this table assume
imposition of the actual total expenses incurred by each class of
shares during the relevant period.
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.
<PAGE>
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
7/31/95 4/30/95 7/31/94++ % Change++ % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $9.86 $9.76 $9.88 -0.20% +1.02%
Class B Shares* 9.86 9.76 9.88 -0.20 +1.02
Class C Shares* 9.85 9.74 9.48 +3.90 +1.13
Class D Shares* 9.85 9.74 9.48 +3.90 +1.13
Class A Shares--Total Return* +5.47(1) +2.40(2)
Class B Shares--Total Return* +4.93(3) +2.27(4)
Class C Shares--Total Return* +7.92(5) +2.34(6)
Class D Shares--Total Return* +8.34(7) +2.48(8)
Class A Shares--Standardized 30-day Yield 5.08%
Class B Shares--Standardized 30-day Yield 4.78%
Class C Shares--Standardized 30-day Yield 4.67%
Class D Shares--Standardized 30-day Yield 4.98%
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
++Investment results shown for Class C and Class D Shares are since
inception (10/21/94).
(1)Percent change includes reinvestment of $0.534 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.135 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.485 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.122 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.357 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.119 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.394 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.132 per share ordinary
income dividends.
</TABLE>
<PAGE>
PERFORMANCE DATA (continued)
Total Return Based on a $10,000 Investment--Class A Shares* and
Class B Shares*
A line graph depicting the growth of an investment in the Fund's
Class A and Class B Shares compared to the growth of an investment
in the Lehman Brothers Municipal Bond Index. Beginning and ending
values are:
5/31/91** 7/95
ML Florida Municipal Bond Fund--
Class A Shares++ $ 9,600 $12,636
ML Florida Municipal Bond Fund--
Class B Shares++ $10,000 $12,890
Lehman Brothers Municipal
Bond Index++ $10,000 $13,756
[FN]
*Assuming transaction costs and other operating expenses, including
advisory fees.
**Commencement of Operations.
++ML Florida Municipal Bond Fund invests primarily in long-term
investment-grade obligations issued by or on the behalf of the State
of Florida, its political subdivisions, agencies and
instrumentalities and obligations of other qualifying issuers.
++++This unmanaged Index consists of long-term revenue bonds,
prerefunded bonds, general obligation bonds and insured bonds.
Past performance is not predictive of future performance.
<PAGE>
Total Return Based on a $10,000 Investment--Class C Shares* and
Class D Shares*
A line graph depicting the growth of an investment in the Fund's
Class C and Class D Shares compared to the growth of an investment
in the Lehman Brothers Municipal Bond Index. Beginning and ending
values are:
10/21/94** 7/95
ML Florida Municipal Bond Fund--
Class C Shares++ $10,000 $10,692
ML Florida Municipal Bond Fund--
Class D Shares++ $ 9,600 $10,401
Lehman Brothers Municipal
Bond Index++++ $10,000 $11,107
[FN]
*Assuming transaction costs and other operating expenses, including
advisory fees.
**Commencement of Operations.
++ML Florida Municipal Bond Fund invests primarily in long-term
investment-grade obligations issued by or on the behalf of the State
of Florida, its political subdivisions, agencies and
instrumentalities and obligations of other qualifying issuers.
++++This unmanaged Index consists of long-term revenue bonds,
prerefunded bonds, general obligation bonds and insured bonds.
Past performance is not predictive of future performance.
PERFORMANCE DATA (concluded)
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/95 +7.21% +2.92%
Inception (5/31/91)
through 6/30/95 +6.88 +5.81
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/95 +6.77% +2.77%
Inception (5/31/91)
through 6/30/95 +6.34 +6.34
[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 6/30/95 +7.63% +6.63%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced
to 0% after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Inception (10/21/94)
through 6/30/95 +8.01% +3.69%
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<PAGE>
<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
1/1/95-7/31/95 9.31 9.86 -- 0.299 + 9.28
------ ------
Total $0.157 Total $2.810
Cumulative total return as of 7/31/95: +31.62%**
<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
1/1/95-7/31/95 9.31 9.86 -- 0.272 + 8.98
Total $0.157 Total $2.597
Cumulative total return as of 7/31/95: +28.90%**
<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>
<PAGE>
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 Agency
IDA Industrial Development Authority
LEVRRS Leveraged Reverse Rate Securities
M/F Multi-Family
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 (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida--103.6%
<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 $ 1,274
Brevard County, Florida, Health Facilities Authority, Revenue Refunding
Bonds (Wuesthoff Memorial Hospital), Series B (c):
AAA Aaa 1,375 6.90% due 4/01/2002 1,537
AAA Aaa 10,750 7.20% due 4/01/2013 11,920
NR* Aaa 5,000 Brevard County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT, 6.70%
due 9/01/2027 (f) 5,127
Broward County, Florida, HFA, M/F Housing Revenue Refunding Bonds
(Lakeside Apartments Project) (i):
AAA NR* 1,100 6.90% due 8/01/2015 1,159
AAA NR* 1,100 7% due 2/01/2025 1,159
<PAGE>
Charlotte County, Florida, Health Care Facilities Revenue Bonds
(Bon Secours Health System) (g):
AAA Aaa 2,000 6% due 8/26/2027 1,958
AAA Aaa 11,000 RIB, 7.773% due 8/26/2027 (h) 10,532
A+ A1 3,715 Citrus County, Florida, Power Corporation, PCR, Refunding (Crystal River),
Series A, 6.62% due 1/01/2027 3,842
AAA Aaa 900 Dade County, Florida, Aviation Revenue Bonds, AMT, Series B, 6.55%
due 10/01/2013 (c) 936
Dade County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT:
NR* Aaa 170 Series B, 7.25% due 9/01/2023 (d) 179
NR* Aaa 4,250 Series C, 7.75% due 9/01/2022 (f) 4,544
AAA Aaa 10,000 Dade County, Florida, Seaport, GO, UT, 6.50% due 10/01/2026 (b) 10,386
AAA Aaa 12,000 Escambia County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds
(Multi-County Program), AMT, 7% due 4/01/2028 (d) 12,544
Escambia County, Florida, PCR (Champion International Corporation Project):
BBB Baa1 11,620 AMT, 6.90% due 8/01/2022 11,981
BBB Baa1 2,500 Refunding, 6.95% due 11/01/2007 2,674
Florida HFA:
AAA NR* 6,000 (Hammocks Place Project), Series C, 6.25% due 12/01/2006 6,210
AAA Aaa 10,420 (Maitland Club Apartments), AMT, Series B-1, 7% due 2/01/2035 (b) 10,829
NR* Aaa 2,085 Florida HFA, Home Ownership Revenue Bonds, AMT, Series G -1, 7.90% due
3/01/2022 (f) 2,240
</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>
Florida State Board of Education, Capital Outlay, Public Education
Revenue Bonds:
AA Aa $ 9,270 Refunding, Series A, 7.25% due 6/01/2023 $ 10,254
AA Aa 5,000 Series B, 6.70% due 6/01/2022 5,324
AA Aa 4,465 Series C, UT, 6.625% due 6/01/2022 4,714
AA Aa 800 Series F, UT, 6% due 6/01/2016 806
<PAGE>
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) 5,110
AA Aa 2,000 Florida State, Jacksonville Transportation Revenue Bonds, 6.40% due
7/01/2022 2,078
Florida State Mid-Bay Bridge Authority Revenue Bonds, Series A:
NR* NR* 5,495 7.50% due 10/01/2017 5,881
BBB NR* 5,700 Refunding, 6.10% due 10/01/2022 5,383
Florida State Turnpike Authority, Turnpike Revenue Bonds, Series A (e):
AAA Aaa 17,950 (Department of Transportation), 5.50% due 7/01/2017 16,904
AAA Aaa 5,000 (Department of Transportation), 5.50% due 7/01/2021 4,667
AAA Aaa 1,000 Refunding, 5% due 7/01/2013 914
AAA Aaa 2,000 Fort Pierce, Florida, Utilities Authority, Revenue Refunding Bonds,
5.25% due 10/01/2016 (b) 1,835
AA Aa 10,000 Gainesville, Florida, Utilities System Revenue Refunding Bonds, Series B,
5.50% due 10/01/2013 9,584
Hillsborough County, Florida, Capital Improvement Revenue Bonds:
A A 9,405 (County Center Project), Second Series, 6.75% due 7/01/2022 10,006
AAA Aaa 5,000 Refunding (Criminal Justice Facilities), 5.25% due 8/01/2016 (e) 4,589
Hillsborough County, Florida, IDA, PCR, Refunding (Tampa Electric
Company Project):
AA Aa3 2,250 Series 91, 7.875% due 8/01/2021 2,606
AA VMIG1++ 2,900 VRDN, 3.90% due 9/01/2025 (a) 2,900
AAA Aaa 2,750 Hillsborough County, Florida, Utility Revenue Refunding Bonds, Series B,
6.50% due 8/01/2016 (c) 2,899
AA Aa1 1,375 Jacksonville, Florida, Electric Authority, Revenue Refunding Bonds
(Saint John's River Power Park Systems), 7% due 10/01/2009 1,477
AAA Aaa 5,000 Jacksonville, Florida, Excise Taxes Revenue Refunding Bonds, 6.50% due
10/01/2013 (b) 5,267
AAA Aaa 4,000 Lee County, Florida, Hospital Board of Directors, Hospital Revenue Bonds,
6.60% due 4/01/2020 (c) 4,140
AAA Aaa 6,750 Lee County, Florida, Transportation Facilities Revenue Bonds, 5.75%
due 10/01/2027 (c) 6,473
Leesburg, Florida, Hospital Revenue Refunding Bonds (Leesburg Regional
Medical Center Project):
BBB+ Baa1 5,570 Series A, 6.125% due 7/01/2018 5,297
BBB+ Baa1 1,800 Series B, 5.625% due 7/01/2013 1,640
BBB+ Baa1 1,210 Series B, 5.70% due 7/01/2018 1,091
<PAGE>
Miami Beach, Florida, Water and Sewer Revenue Bonds (g):
AAA Aaa 1,000 5.10% due 9/01/2005 1,008
AAA Aaa 6,000 5.375% due 9/01/2015 5,605
AAA NR* 5,000 Orange County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT, 6.85%
due 10/01/2027 (d) 5,187
AA- Aa 500 Orlando, Florida, Utilities Commission, Water and Electric Revenue
Refunding Bonds, Sub-Series D, 5% due 10/01/2023 430
NR* VMIG1++ 4,300 Palm Beach County, Florida, Water and Sewer Revenue Bonds, VRDN,
3.85% due 10/01/2011 (a) 4,300
</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>
AAA Aaa $ 2,080 Pasco County, Florida, Health Facilities Authority Revenue Bonds (Gross
Adventist Health System-Sunbelt), 7% due 10/01/2014 $ 2,419
Pembroke Pines, Florida, Special Assessment Bonds, No. 94-1:
NR* Baa1 770 4.50% due 11/01/1997 767
NR* Baa1 335 5% due 11/01/1999 334
NR* Baa1 720 5.10% due 11/01/2000 715
NR* Baa1 5,000 5.75% due 11/01/2005 4,988
A1 VMIG1++ 10,050 Pinellas County, Florida, Health Facilities Authority, Revenue Refunding
Bonds (Pooled Hospital Loan Program), DATES, 3.85% due 12/01/2015 (a) 10,050
NR* Aaa 350 Polk County, Florida, HFA, Revenue Refunding Bonds, Series A, 7.15%
due 9/01/2023 (f) 366
Saint Lucie County, Florida, PCR (Florida Power & Light Co. Project),
VRDN (a):
A1+ NR* 2,500 3.75% due 3/01/2027 2,500
A1+ VMIG1++ 7,400 Refunding, 3.85% due 1/01/2026 7,400
AAA Aaa 2,500 Saint Petersburg, Florida, Health Facilities Authority, Hospital
Revenue Bonds (Allegheny Health System), Series A, 7% due 12/01/2015 (c) 2,722
AAA Aaa 2,800 South Broward Hospital District, Florida, Hospital Revenue Bonds,
RIB, Series C, 8.842% due 5/13/2021 (b) (h) 3,024
<PAGE>
AAA Aaa 1,475 Tampa, Florida, Allegheny Health System Revenue Bonds (Saint Joseph),
6.75% due 12/01/2017 (c) 1,576
AAA Aaa 1,500 Tampa, Florida, Water and Sewer Revenue Bonds (Sub-Lien), Series A,
7.75% due 10/01/2014 (b) 1,672
Puerto Rico--3.0%
A1+ VMIG1++ 700 Puerto Rico Commonwealth, Government Development Bank Revenue
Refunding Bonds, VRDN, 3.45% due 12/01/2015 (a) 700
AAA Aaa 7,600 Puerto Rico Electric Power Authority, Power Revenue Bonds, LEVRRS,
8.018% due 7/01/2023 (g) (h) 7,429
Total Investments (Cost--$278,461)--106.6% 286,062
Liabilities in Excess of Other Assets--(6.6%) (17,762)
--------
Net Assets--100.0% $268,300
========
<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 July 31, 1995.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FNMA and GNMA Collateralized.
(e)FGIC Insured.
(f)GNMA Collateralized.
(g)FSA Insured.
(h)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at July 31, 1995.
(i)FNMA Collateralized.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Deloitte & Touche
LLP.
See Notes to Financial Statements.
<PAGE>
FINANCIAL INFORMATION
</TABLE>
<TABLE>
Statement of Assets and Liabilities as of July 31, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$278,461,114) (Note 1a) $286,061,932
Cash 332,547
Receivables:
Interest $ 4,483,640
Beneficial interest sold 466,948 4,950,588
------------
Deferred organization expenses (Note 1e) 11,292
Prepaid registration fees and other assets (Note 1e) 18,530
------------
Total assets 291,374,889
------------
Liabilities: Payables:
Securities purchased 22,195,190
Beneficial interest redeemed 319,776
Dividends to shareholders (Note 1f) 252,229
Investment adviser (Note 2) 119,390
Distributor (Note 2) 84,667 22,971,252
------------
Accrued expenses and other liabilities 103,837
------------
Total liabilities 23,075,089
------------
Net Assets: Net assets $268,299,800
============
Net Assets Class A Shares of beneficial interest, $.10 par value, unlimited
Consist of: number of shares authorized $ 525,246
Class B Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 2,082,226
Class C Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 19,843
Class D Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 93,213
Paid-in capital in excess of par 279,507,327
Accumulated realized capital losses on investments--net (Note 5) (11,911,145)
Accumulated distributions in excess of realized capital gains--net (9,617,728)
Unrealized appreciation on investments--net 7,600,818
------------
Net assets $268,299,800
============
<PAGE>
Net Asset Value: Class A--Based on net assets of $51,804,904 and 5,252,457
shares of beneficial interest outstanding $ 9.86
============
Class B--Based on net assets of $205,361,698 and 20,822,260
shares of beneficial interest outstanding $ 9.86
============
Class C--Based on net assets of $1,953,739 and 198,427 shares
of beneficial interest outstanding $ 9.85
============
Class D--Based on net assets of $9,179,459 and 932,130 shares
of beneficial interest outstanding $ 9.85
============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
July 31, 1995
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 17,239,183
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 1,519,014
Account maintenance and distribution fees--Class B (Note 2) 1,055,764
Transfer agent fees--Class B (Note 2) 118,209
Professional fees 86,451
Printing and shareholder reports 65,999
Accounting services (Note 2) 65,634
Transfer agent fees--Class A (Note 2) 28,233
Custodian fees 19,490
Trustees' fees and expenses 14,438
Amortization of organization expenses (Note 1e) 13,635
Registration fees (Note 1e) 9,391
Pricing fees 8,955
Account maintenance fees--Class D (Note 2) 4,650
Account maintenance and distribution fees--Class C (Note 2) 4,078
Transfer agent fees--Class D (Note 2) 2,383
Transfer agent fees--Class C (Note 2) 458
Other 7,212
------------
Total expenses 3,023,994
------------
Investment income--net 14,215,189
------------
<PAGE>
Realized & Realized loss on investments--net (11,911,145)
Unrealized Gain Change in unrealized appreciation/depreciation on investments--net 10,368,332
(Loss) on ------------
Investments Net Increase in Net Assets Resulting from Operations $ 12,672,376
--Net (Notes ============
1b, 1d & 3):
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended July 31,
Increase (Decrease) in Net Assets: 1995 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 14,215,189 $ 14,559,475
Realized loss on investments--net (11,911,145) (3,975,907)
Change in unrealized appreciation/depreciation on
investments--net 10,368,332 (11,405,552)
------------ ------------
Net increase (decrease) in net assets resulting from
operations 12,672,376 (821,984)
------------ ------------
Dividends & Investment income--net:
Distributions to Class A (3,309,230) (3,774,328)
Shareholders Class B (10,622,460) (10,785,147)
(Note 1f): Class C (32,884) --
Class D (250,615) --
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 (14,215,189) (26,848,376)
------------ ------------
Beneficial Net increase (decrease) in net assets derived from beneficial
Interest interest transactions (24,480,728) 37,543,280
Transactions ------------ ------------
(Note 4):
<PAGE>
Net Assets: Total increase (decrease) in net assets (26,023,541) 9,872,920
Beginning of year 294,323,341 284,450,421
------------ ------------
End of year $268,299,800 $294,323,341
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A
For the
Period
The following per share data and ratios have been derived May 31,
from information provided in the financial statements. 1991++ to
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 .53 .55 .59 .66 .10
Realized and unrealized gain (loss) on
investments--net (.02) (.48) .22 .68 (.01)
-------- -------- -------- -------- --------
Total from investment operations .51 .07 .81 1.34 .09
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.53) (.55) (.59) (.66) (.10)
Realized gain on investments--net -- -- (.10) (.01) --
In excess of realized gain on
investments--net -- (.42) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.53) (.97) (.69) (.67) (.10)
-------- -------- -------- -------- --------
Net asset value, end of period $ 9.86 $ 9.88 $ 10.78 $ 10.66 $ 9.99
======== ======== ======== ======== ========
Total Based on net asset value per share 5.47% .39% 7.99% 13.91% 1.07%+++
Investment ======== ======== ======== ======== ========
Return:**
<PAGE>
Ratios to Expenses, net of reimbursement .70% .68% .66% .43% .28%*
Average ======== ======== ======== ======== ========
Net Assets: Expenses .70% .68% .69% .76% .83%*
======== ======== ======== ======== ========
Investment income--net 5.54% 5.23% 5.58% 6.39% 6.69%*
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 51,805 $ 69,409 $ 70,610 $ 49,806 $ 27,961
Data: ======== ======== ======== ======== ========
Portfolio turnover 178.62% 205.94% 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>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights (continued)
<CAPTION>
Class B
For the
Period
The following per share data and ratios have been derived May 31,
from information provided in the financial statements. 1991++ to
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 .49 .49 .54 .61 .09
Realized and unrealized gain (loss) on
investments--net (.02) (.48) .22 .68 (.01)
--------- --------- --------- --------- ---------
Total from investment operations .47 .01 .76 1.29 .08
--------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net (.49) (.49) (.54) (.61) (.09)
Realized gain on investments--net -- -- (.10) (.01) --
In excess of realized gain on
investments--net -- (.42) -- -- --
--------- --------- --------- --------- ---------
Total dividends and distributions (.49) (.91) (.64) (.62) (.09)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 9.86 $ 9.88 $ 10.78 $ 10.66 $ 9.99
========= ========= ========= ========= =========
<PAGE>
Total Based on net asset value per share 4.93% (.11%) 7.45% 13.33% .99%+++
Investment ========= ========= ========= ========= =========
Return:**
Ratios to Expenses, excluding account maintenance
Average and distribution fees and net of
Net Assets: reimbursement .71% .68% .66% .44% .29%*
========= ========= ========= ========= =========
Expenses, net of reimbursement 1.21% 1.18% 1.16% .94% .79%*
========= ========= ========= ========= =========
Expenses 1.21% 1.18% 1.20% 1.26% 1.34%*
========= ========= ========= ========= =========
Investment income--net 5.03% 4.73% 5.07% 5.87% 6.19%*
========= ========= ========= ========= =========
Supplemental Net assets, end of period (in thousands). $ 205,362 $ 224,915 $ 213,840 $ 147,743 $ 71,831
Data: ========= ========= ========= ========= =========
Portfolio turnover 178.62% 205.94% 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>
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
July 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 .37 .40
Realized and unrealized gain on investments--net .37 .37
-------- --------
Total from investment operations .74 .77
-------- --------
Less dividends from investment income--net (.37) (.40)
-------- --------
Net asset value, end of period $ 9.85 $ 9.85
======== ========
<PAGE>
Total Based on net asset value per share 7.92%+++ 8.34%+++
Investment ======== ========
Return:**
Ratios to Expenses, excluding account maintenance and distribution fees
Average and net of reimbursement .73%* .71%*
Net Assets: ======== ========
Expenses, net of reimbursement 1.33%* .81%*
======== ========
Expenses 1.33%* .81%*
======== ========
Investment income--net 4.84%* 5.39%*
======== ========
Supplemental Net assets, end of period (in thousands) $ 1,954 $ 9,179
Data: ======== ========
Portfolio turnover 178.62% 178.62%
======== ========
*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. 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.
<PAGE>
(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.
(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
counterparty 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.
<PAGE>
(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.
NOTES TO FINANCIAL STATEMENTS (concluded)
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 Merill 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 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 the 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% --
<PAGE>
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.
For the year ended July 31, 1995, MLFD earned underwriting discounts
and MLPF&S earned dealer concessions on sales of the Fund's Class A
and Class D Shares as follows:
MLFD MLPF&S
Class A $14,518 $131,505
Class D $ 2,412 $ 25,038
For the year ended July 31, 1995, MLPF&S received contingent
deferred sales charges of $632,146 and $42 relating to transactions
in Class B and Class C Shares, respectively.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), 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, MLFDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended July 31, 1995 were $461,923,580 and $489,196,833,
respectively.
Net realized and unrealized gains (losses) as of July 31, 1995 were
as follows:
Realized Unrealized
Losses Gains
Long-term investments $ (8,300,601) $ 7,600,818
Short-term investments (1,719,996) --
Financial futures contracts (1,890,548) --
------------ -----------
Total $(11,911,145) $ 7,600,818
============ ===========
<PAGE>
As of July 31, 1995, net unrealized appreciation for Federal income
tax purposes aggregated $7,557,601, of which $9,003,468 related to
appreciated securities and $1,445,867 related to depreciated
securities. The aggregate cost of investments at July 31, 1995 for
Federal income tax purposes was $278,504,331.
4. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from beneficial
interest transactions was ($24,480,728) and $37,543,280 for the
years ended July 31, 1995 and July 31, 1994, respectively.
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the Year Dollar
Ended July 31, 1995 Shares Amount
Shares sold 540,960 $ 5,182,662
Shares issued to share-
holders in reinvestment of
dividends 123,647 1,190,042
----------- ------------
Total issued 664,607 6,372,704
Shares redeemed (2,436,216) (23,406,816)
----------- ------------
Net decrease (1,771,609) $(17,034,112)
=========== ============
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
=========== ============
<PAGE>
Class B Shares for the Year Dollar
Ended July 31, 1995 Shares Amount
Shares sold 5,042,475 $ 48,506,180
Shares issued to share-
holders in reinvestment of
dividends 400,758 3,861,073
----------- ------------
Total issued 5,443,233 52,367,253
Automatic conversion
of shares (1,549) (15,028)
Shares redeemed (7,380,937) (70,478,198)
----------- ------------
Net decrease (1,939,253) $(18,125,973)
=========== ============
Class B Shares For the Dollar
Year Ended 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++ to Dollar
July 31, 1995 Shares Amount
Shares sold 289,304 $ 2,806,834
Shares issued to share-
holders in reinvestment
of dividends 2,202 21,704
----------- ------------
Total issued 291,506 2,828,538
Shares redeemed (93,079) (901,207)
----------- ------------
Net increase 198,427 $ 1,927,331
=========== ============
[FN]
++Commencement of Operations.
<PAGE>
Class D Shares for the
Period October 21, 1994++ to Dollar
July 31, 1995 Shares Amount
Shares sold 1,094,228 $ 10,298,028
Automatic conversion
of shares 1,552 15,028
Shares issued to share-
holders in reinvestment
of dividends 12,922 127,107
----------- ------------
Total issued 1,108,702 10,440,163
Shares redeemed (176,572) (1,688,137)
----------- ------------
Net increase 932,130 $ 8,752,026
=========== ============
[FN]
++Commencement of Operations.
5. Capital Loss Carryforward:
At July 31, 1995, the Fund had a net capital loss carryforward of
approximately $18,834,000, all of which expires in 2003. This amount
will be available to offset like amounts of any future taxable
gains.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders,
Merrill Lynch Florida Municipal Bond Fund of
Merrill Lynch Multi-State Municipal Series Trust:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of Merrill Lynch
Florida Municipal Bond Fund of Merrill Lynch Multi-State Municipal
Series Trust as of July 31, 1995, the related statements of
operations for the year then ended and changes in net assets for
each of the years in the two-year period then ended, and the
financial highlights for each of the years in the four-year period
then ended and for the period May 31, 1991 (commencement of opera-
tions) to July 31, 1991. These financial statements and the
financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our
audits.
<PAGE>
We conducted our audits in accordance with gener-ally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our proce-dures included confirmation of securities owned at July
31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
Merrill Lynch Florida Municipal Bond Fund of Merrill Lynch Multi-
State Municipal Series Trust as of July 31, 1995, the results of its
operations, the changes in its net assets, and the financial
highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
August 30, 1995
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid monthly by
Merrill Lynch Florida Municipal Bond Fund during its taxable year
ended July 31, 1995 qualify as tax-exempt interest dividends for
Federal income tax purposes.
Additionally, there were no capital gains distributions by the Fund
during the year.
Please retain this information for your records.
<PAGE>
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
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
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863
