MERRILL LYNCH
FLORIDA MUNICIPAL
BOND FUND
FUND LOGO
Semi-Annual Report
January 31, 1996
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, MA 02101
<PAGE>
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
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.
Statements and other information herein are as dated and are subject
to change.
Merrill Lynch Florida
Municipal Bond Fund
Merrill Lynch Multi-State
Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
TO OUR SHAREHOLDERS
Although the partial shutdown of the US Government curtailed the
release of most economic data in the latter part of the six-month
period ended January 31, 1996, it was nonetheless apparent that
gross domestic product (GDP) growth was losing momentum. Consumer
spending is barely growing, the industrial sector is at a virtual
standstill and, despite lower mortgage rates, there is little or no
pick-up in housing activity. With inflationary pressures subdued,
the Federal Reserve Board responded to the slowing economy by
continuing to modestly lower short-term interest rates.
Historically, it has taken some time for shifts in monetary policy
to have an impact on economic growth. Therefore, the Federal Reserve
Board's gradual shift to lowering interest rates, which began early
last year, may not be reflected in a pick-up in real economic growth
until later this year.
<PAGE>
The impasse between the Clinton Administration and Congress over the
Federal budget continues, although both sides have made concessions
since the debate began. It appears that investors are currently
focusing on the progress that has been made rather than on the
differences that remain. Initially, President Clinton proposed
deficits of about $190 billion annually through fiscal year 2002,
but now proposes balanced budgets, as do the Republicans. Current
indications are that a piecemeal budget accord is the most likely
outcome. Even without the proposed policy changes, it appears that
the US Federal budget deficit would remain stable at about 2% of GDP
for the rest of the decade. This would be far better than is the
case for most Group of Seven industrial nations, and for the United
States would represent a great improvement over the last 15 years.
Although this may fall short of investors' best expectations, it
appears that the Federal budget debate over the past year has
resulted in a trend toward a more conservative fiscal policy.
The Municipal Market
The municipal bond market rallied strongly during the six months
ended January 31, 1996. Long-term, tax-exempt revenue bond yields,
as measured by the Bond Buyer Revenue Bond Index, declined over 65
basis points (0.65%) to end the January period at 5.69%. Continued
weak economic conditions coupled with low inflation fostered a very
positive environment for almost all fixed-income investments during
the last three months of 1995. Long-term US Treasury bond yields
also declined approximately 65 basis points to 6.00% by January 31,
1996. Both US Treasury and long-term tax-exempt bond yields are near
their lowest levels in the past two years.
The municipal bond market had to contend with a number of
difficulties for much of 1995. Various tax reform proposals have
made the future tax advantage of municipal bonds uncertain. This
has, at a minimum, reduced the overall demand for tax-exempt
securities. At the same time, as municipal bond yields declined, tax-
exempt authorities have rushed to issue debt at near historic low
yield levels. During the six-month period ended January 31, 1996,
approximately $90 billion in municipal securities were underwritten,
an increase of over 30% compared to the same period last year.
However, as early 1995 issuance was significantly reduced, the last
12 months issuance of approximately $160 billion remained the same
as that issued a year earlier. Tax-exempt bond yields declined
throughout the six months ended January 31, 1996, despite investor
uncertainty and increased supply pressures.
<PAGE>
It is likely that the municipal market will regain much of the
technical support it enjoyed earlier in 1995. 1995 issuance remained
significantly below levels underwritten in 1993, when over $290
billion in long-term tax-exempt securities were issued. Also,
municipal investors received over $25 billion in bond maturities,
coupon income and early redemptions on January 1, 1996. This $25
billion is almost twice the average monthly issuance for 1995. The
amount of outstanding municipal securities will continue to decline
throughout 1996 and into early 1997. As the uncertainties
surrounding proposed tax reforms are resolved in 1996, the tax-
exempt bond market's renewed technical position should provide
support to municipal bond prices.
Many of the features that made tax-exempt products attractive to
investors last year are still in place. Long-term, A-rated municipal
revenue bonds continue to yield well over 90% of comparable US
Treasury bond yields. Historically, analysts have considered yields
in excess of 82% attractive for long-term investors. For example,
currently available tax-exempt bond yields generate taxable
equivalent yields in excess of 8.50% for an investor in the 36%
Federal income tax bracket. While the uncertainties regarding
potential changes in current tax law remain, it appears that, at
current price levels, bond investors have discounted at least some
of the uncertainty.
Looking ahead, it may be unreasonable to expect to duplicate the
double-digit returns produced by most tax-exempt issues in 1995,
given current municipal bond yields. Municipal bond yields would
have to decline to levels not seen since the 1960s in order to
generate such significant returns in the coming years. While the
current economic environment may still justify additional declines
in interest rates, it may be prudent to expect some period of
consolidation before the interest rate decline resumes. Tax-exempt
bond market performance in 1996 is likely to be generated more by
enhancing current income and limiting credit risk than by
significant interest rate declines.
Portfolio Strategy
For the three-month period ended January 31, 1996, the Fund
continued to participate in the bond market rally. We still maintain
the very constructive outlook for bonds we adopted in 1995.
During the past several months, investors were very bullish toward
the bond market even after an impressive rally caused some investors
to become somewhat cautious. The ongoing debate in Washington over
the Federal budget, the recent sharp rise in the price of various
commodities such as gas, grains and gold, and the discussions
regarding a flat tax have overshadowed the fundamental weakness in
the economy. We believe the slowing economy will prompt the Federal
Reserve Board to ease monetary policy further, which would lead to
higher bond prices.
<PAGE>
We used some of the extreme market weakness in late 1995 to purchase
attractive issues, and subsequently sold issues which we expected to
underperform. In addition, we maintained our overweighting to
interest rate-sensitive issues, which should continue to offer
attractive total returns when investors refocus on the fundamentals
of the economy and inflation.
In Conclusion
We appreciate your ongoing interest in Merrill Lynch Florida
Municipal Bond Fund, and we look forward to serving your investment
needs and objectives in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President
(Robert A DiMella)
Robert A. DiMella
Portfolio Manager
March 5, 1996
<PAGE>
We are pleased to announce that Robert A. DiMella, CFA is
responsible for the day-to-day management of Merrill Lynch Florida
Municipal Bond Fund. Mr. DiMella has been employed by Merrill Lynch
Asset Management, L.P. (an affiliate of the Fund's investment
adviser) since 1995 as Assistant Vice President, and as Assistant
Portfolio Manager thereof from 1993 to 1995. Prior thereto, he was
Assistant Portfolio Manager with Prudential Investment Advisors from
1992 to 1993, and was a Research Assistant with Prudential
Investment Corporation from 1989 to 1992.
PERFORMANCE DATA
About Fund Performance
Investors are 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).
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
1/31/96 10/31/95 1/31/95 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $10.32 $10.06 $9.57 + 7.84% +2.58%
Class B Shares* 10.32 10.05 9.57 + 7.84 +2.69
Class C Shares* 10.31 10.04 9.56 + 7.85 +2.69
Class D Shares* 10.31 10.04 9.56 + 7.85 +2.69
Class A Shares--Total Return* +13.74(1) +3.91(2)
Class B Shares--Total Return* +13.17(3) +3.88(4)
Class C Shares--Total Return* +13.06(5) +3.86(6)
Class D Shares--Total Return* +13.63(7) +3.99(8)
Class A Shares--Standardized 30-day Yield 4.71%
Class B Shares--Standardized 30-day Yield 4.40%
Class C Shares--Standardized 30-day Yield 4.30%
Class D Shares--Standardized 30-day Yield 4.61%
<FN>
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
(1)Percent change includes reinvestment of $0.533 per share ordinary
income dividends.
(2)Percent change includes reinvestment of $0.132 per share ordinary
income dividends.
(3)Percent change includes reinvestment of $0.483 per share ordinary
income dividends.
(4)Percent change includes reinvestment of $0.119 per share ordinary
income dividends.
(5)Percent change includes reinvestment of $0.471 per share ordinary
income dividends.
(6)Percent change includes reinvestment of $0.116 per share ordinary
income dividends.
(7)Percent change includes reinvestment of $0.522 per share ordinary
income dividends.
(8)Percent change includes reinvestment of $0.129 per share ordinary
income dividends.
</TABLE>
<PAGE>
PERFORMANCE DATA (continued)
<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 + 8.20
1993 10.37 10.67 $0.157 0.831 +12.69
1994 10.67 9.31 -- 0.538 - 7.81
1995 9.31 10.28 -- 0.533 +16.50
1/1/96-1/31/96 10.28 10.32 -- 0.030 + 0.78
------ ------
Total $0.157 Total $3.074
Cumulative total return as of 1/31/96: +41.41%**
<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
1995 9.31 10.28 -- 0.483 +15.92
1/1/96-1/31/96 10.28 10.32 -- 0.027 + 0.76
------ ------
Total $0.157 Total $2.835
Cumulative total return as of 1/31/96: +38.13%**
<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>
<TABLE>
Performance Summary--Class C Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94-12/31/94 $ 9.48 $ 9.30 -- $0.091 - 0.92%
1995 9.30 10.27 -- 0.472 +15.80
1/1/96-1/31/96 10.27 10.31 -- 0.027 + 0.75
------
Total $0.590
Cumulative total return as of 1/31/96: +15.60%**
<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>
PERFORMANCE DATA (concluded)
<TABLE>
Performance Summary--Class D Shares
<CAPTION>
Net Asset Value Capital Gains
Period Covered Beginning Ending Distributed Dividends Paid* % Change**
<S> <C> <C> <C> <C> <C>
10/21/94-12/31/94 $ 9.48 $ 9.29 -- $0.101 - 0.92%
1995 9.29 10.27 -- 0.522 +16.52
1/1/96-1/31/96 10.27 10.31 -- 0.030 + 0.78
------
Total $0.653
Cumulative total return as of 1/31/96: +16.35%**
<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>
<PAGE>
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 12/31/95 +16.50% +11.84%
Inception (5/31/91)
through 12/31/95 + 7.66 + 6.71
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 12/31/95 +15.92% +11.92%
Inception (5/31/91)
through 12/31/95 + 7.12 + 7.12
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 12/31/95 +15.80% +14.80%
Inception (10/21/94)
through 12/31/95 +12.20 +12.20
[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*
Year Ended 12/31/95 +16.52% +11.86%
Inception (10/21/94)
through 12/31/95 +12.78 + 8.99
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
<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
INFLOS Inverse Floating Rate Municipal Bonds
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--98.4%
<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 $ 1,340
Brevard County, Florida, Health Facilities Authority Revenue Bonds
(Wuesthoff Memorial Hospital), Series B (c):
AAA Aaa 10,750 7.20% due 4/01/2002 (j) 12,613
AAA Aaa 1,375 Refunding, 6.90% due 4/01/2002 (k) 1,562
NR* Aaa 5,000 Brevard County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT,
6.70% due 9/01/2027(f) 5,183
<PAGE>
Broward County, Florida, HFA, M/F Housing Revenue Refunding Bonds
(Lakeside Apartments Project) (i):
AAA NR* 1,100 6.90% due 8/01/2015 1,188
AAA NR* 1,100 7% due 2/01/2025 1,185
AAA Aaa 12,650 Charlotte County, Florida, Health Care Facilities Revenue Bonds
(Bon Secours Health System), RIB, 7.933% due 8/26/2027 (g)(h) 13,472
A+ A1 6,215 Citrus County, Florida, PCR, Refunding (Florida Power
Corporation-Crystal River), Series A, 6.62% due 1/01/2027 6,667
AAA Aaa 900 Dade County, Florida, Aviation Revenue Bonds, AMT, Series B, 6.55%
due 10/01/2013 (c) 986
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 4,100 Series C, 7.75% due 9/01/2022 (f) 4,355
Dade County, Florida, Professional Sports Franchise Facilities, Tax Revenue
Bonds (c)(l):
AAA Aaa 2,560 5.95% due 10/01/2023 581
AAA Aaa 2,660 5.95% due 10/01/2024 571
AAA Aaa 7,660 5.95% due 10/01/2025 1,557
AAA Aaa 7,600 5.98% due 10/01/2027 1,384
Dade County, Florida, Seaport, GO, UT:
AAA Aaa 10,000 6.50% due 10/01/2001 (b)(j) 11,281
AAA Aaa 5,120 Refunding, 5.125% due 10/01/2026 (c) 4,954
AAA Aaa 12,000 Escambia County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds
(Multi-County Program), AMT, 7% due 4/01/2028 (d) 12,924
Escambia County, Florida, PCR (Champion International Corporation Project):
BBB Baa1 11,620 AMT, 6.90% due 8/01/2022 12,539
BBB Baa1 2,500 Refunding, 6.95% due 11/01/2007 2,717
</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>
NR* Aaa $ 2,035 Florida HFA, Home Ownership Revenue Bonds, AMT, Series G-1,
7.90% due 3/01/2022 (f) $ 2,148
AAA Aaa 10,420 Florida HFA (Maitland Club Apartments), AMT, Series B-1, 7% due
2/01/2035 (b) 11,259
<PAGE>
Florida State Board of Education, Capital Outlay, Public Education:
AA Aa 9,595 Refunding, Series A, 7.25% due 6/01/2023 10,761
AAA Aaa 4,200 Refunding, Series D, 4.75% due 6/01/2018 (e) 3,915
AA Aa 17,360 Refunding, Series D, 4.75% due 6/01/2022 15,965
AA Aa 2,000 Refunding, Series E, 5% due 6/01/2020 1,908
AAA Aa 5,000 Series B, 6.70% due 6/01/2001 (j) 5,642
AA Aa 1,300 Series B, 5.75% due 6/01/2015 1,349
AA Aa 4,465 Series 91-C, UT, 6.625% due 6/01/2002 (j) 5,080
AAA Aaa 4,750 Florida State Division, Bond Finance Department, General Services
Revenue Bonds (Department of Natural Resource Preservation),
Series 2000-A, 6.75% due 7/01/2013 (b) 5,309
AAA Aaa 10,000 Florida State Municipal Power Agency Revenue Bonds
(All Requirements Power Supply Project), 5.10% due 10/01/2025 (b) 9,601
AA Aa 10,500 Florida State Refunding (Dade County Road), UT, 5.30% due 7/01/2019 10,430
AAA Aaa 3,000 Florida State Turnpike Authority, Turnpike Revenue Refunding Bonds,
Series A, 5% due 7/01/2019 (e) 2,853
A A 10,505 Hillsborough County, Florida, Capital Improvement Revenue Bonds
(County Center Project), Second Series, 6.75% due 7/01/2002 (j) 12,158
AA Aa3 2,250 Hillsborough County, Florida, IDA, PCR, Refunding
(Tampa Electric Company Project), Series 91, 7.875% due 8/01/2021 2,644
AAA Aaa 2,750 Hillsborough County, Florida, Utility Revenue Refunding Bonds,
Series B, 6.50% due 8/01/2016 (c) 3,012
AA Aa1 1,375 Jacksonville Florida, Electric Authority, Revenue Refunding Bonds
(Saint John's River Power Park Systems), Issue 2, Series 5, 7% due 10/01/2009 1,521
AAA Aaa 1,100 Lakeland, Florida, Electric and Water Revenue Bonds, 7% due 10/01/2010 (c)(l) 517
AAA Aaa 2,000 Lee County, Florida, Hospital Board of Directors, Hospital Revenue INFLOS,
9.368% due 4/01/2020 (c)(h) 2,310
AAA Aaa 6,250 Lee County, Florida, Transportation Facilities Revenue Bonds, 5.75%
due 10/01/2027 (c) 6,442
Leesburg, Florida, Hospital Revenue Refunding Bonds
(Leesburg Regional Medical Center Project):
A- Baa1 6,110 Series A, 6.125% due 7/01/2018 6,217
A- Baa1 1,515 Series B, 5.625% due 7/01/2013 1,488
A- Baa1 1,000 Series B, 5.70% due 7/01/2018 978
<PAGE>
AAA Aaa 5,000 Manatee County, Florida, Public Utilities Revenue Refunding Bonds,
Series A-1, 5% due 10/01/2013 (c) 4,891
AAA Aaa 6,750 Miami, Florida, Special Obligation Revenue Bonds
(Administration Building Acquisition Project), 6% due 2/01/2025 (e) 7,201
Orlando, Florida, Utilities Commission Water and Electric Revenue Bonds:
AA- Aa 16,600 Refunding, Sub-Series A, 5% due 10/01/2020 15,808
AA- Aa 5,000 RIB, 7.013% due 10/06/2017 (h) 5,112
</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 $ 3,230 Palm Bay, Florida, Utility Revenue Refunding Bonds (Palm Bay
Utility Corp. Project), 5% due 10/01/2019 (c) $ 3,071
AAA Aaa 2,080 Pasco County, Florida, Health Facilities Authority, Revenue Refunding
Bonds (Gross Adventist Health System-Sunbelt), 7% due 10/01/2014 (k) 2,521
NR Baa1 370 Pembroke Pines, Florida, Special Assessment Bonds, No. 94-1, 5.10% due
11/01/2000 374
A-1 VMIG1++ 2,400 Pinellas County, Florida, Health Facilities Authority, Revenue
Refunding Bonds(Pooled Hospital Loan Program), DATES, 3.80% due 12/01/2015 (a) 2,400
NR* Aaa 350 Polk County, Florida, HFA, Refunding, Series A, 7.15% due 9/01/2023 (f) 371
AAA Aaa 5,500 Saint John's River, Florida, Water Management District, Revenue
Refunding Bonds(Land Acquisition), 5.125% due 7/01/2016 (g) 5,380
Saint Lucie County, Florida, PCR, Refunding
(Florida Power and Light Co. Project), VRDN (a):
A1+ VMIG1++ 1,000 3.75% due 1/01/2026 1,000
A1+ VMIG1++ 1,295 3.70% due 3/01/2027 1,295
AA NR* 1,000 Saint Lucie County, Florida, Special Assessment Revenue Bonds
(South Hutchinson Island), Asset Guaranty, 6.10% due 11/01/2020 1,041
AAA Aaa 2,500 Saint Petersburg, Florida, Health Facilities Authority Revenue Bonds
(Allegheny Health System), Series A, 7% due 12/01/2015 (c) 2,835
<PAGE>
AAA Aaa 2,800 South Broward, Florida, Hospital District, Hospital Revenue Bonds,
RIB, Series C, 8.883% due 5/13/2021 (b)(h) 3,241
AAA Aaa 1,475 Tampa, Florida, Allegheny Health System Revenue Bonds (Saint Joseph),
6.75% due 12/01/2017 (c) 1,627
AAA Aaa 1,500 Tampa, Florida, Water and Sewer Revenue Bonds (Sub-Lien), Series A,
7.75% due 10/01/2014 (b) 1,662
Puerto Rico--0.4%
A1+ VMIG1++ 1,000 Puerto Rico Commonwealth, Government Development Bank,
Refunding, VRDN, 2.85% due 12/01/2015 (a) 1,000
Total Investments (Cost--$262,295)--98.8% 281,575
Other Assets Less Liabilities--1.2% 3,519
--------
Net Assets--100.0 $285,094
========
<FN>
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at January 31, 1996.
(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 January 31, 1996.
(i)FNMA Collateralized.
(j)Prerefunded.
(k)Escrowed to Maturity.
(l)Represents a zero coupon bond; the interest rate shown is the
effective yield at the time of purchase by the Fund.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL INFORMATION
<CAPTION>
Statement of Assets and Liabilities as of January 31, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$262,295,127) (Note 1a) $ 281,574,759
Cash 2,888,138
Receivables:
Securities sold $ 4,996,597
Interest 4,165,879
Beneficial interest sold 382,346 9,544,822
-------------
Deferred organization expenses (Note 1e) 11,292
Prepaid registration fees and other assets (Note 1e) 19,602
-------------
Total assets 294,038,613
-------------
Liabilities: Payables:
Securities purchased 6,801,125
Beneficial interest redeemed 1,498,451
Dividends to shareholders (Note 1f) 330,837
Investment adviser (Note 2) 129,359
Distributor (Note 2) 91,919 8,851,691
-------------
Accrued expenses and other liabilities 92,904
-------------
Total liabilities 8,944,595
-------------
Net Assets: Net assets $ 285,094,018
=============
Net Assets Class A Shares of beneficial interest, $.10 par value, unlimited
Consist of: number of shares authorized $ 502,843
Class B Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 2,088,219
Class C Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 36,899
Class D Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized 134,342
Paid-in capital in excess of par 283,683,278
Accumulated realized capital losses on investments--net (Note 5) (20,631,195)
Unrealized appreciation on investments--net 19,279,632
-------------
Net assets $ 285,094,018
=============
<PAGE>
Net Asset Value: Class A--Based on net assets of $51,904,526 and 5,028,430 shares
of beneficial interest outstanding $ 10.32
=============
Class B--Based on net assets of $215,540,829 and 20,882,187 shares
of beneficial interest outstanding $ 10.32
=============
Class C--Based on net assets of $3,802,653 and 368,990 shares
of beneficial interest outstanding $ 10.31
=============
Class D--Based on net assets of $13,846,010 and 1,343,419 shares
of beneficial interest outstanding $ 10.31
=============
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL INFORMATION (continued)
<CAPTION>
Statement of Operations
For the Six Months Ended
January 31, 1996
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 8,273,360
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 762,601
Account maintenance and distribution fees--Class B (Note 2) 526,657
Transfer agent fees--Class B (Note 2) 50,596
Professional fees 37,022
Printing and shareholder reports 33,232
Accounting services (Note 2) 33,232
Transfer agent fees--Class A (Note 2) 10,346
Custodian fees 8,757
Account maintenance and distribution fees--Class C (Note 2) 8,405
Trustees' fees and expenses 6,523
Account maintenance fees--Class D (Note 2) 5,952
Amortization of organization expenses (Note 1e) 5,625
Pricing fees 3,870
Registration fees (Note 1e) 3,571
Transfer agent fees--Class D (Note 2) 2,359
Transfer agent fees--Class C (Note 2) 750
Other 3,590
-------------
Total expenses 1,503,088
-------------
Investment income--net 6,770,272
-------------
<PAGE>
Realized & Realized gain on investments--net 897,678
Unrealized Gain on Change in unrealized appreciation on investments--net 11,678,814
Investments--Net -------------
(Notes 1b, 1d & 3): Net Increase in Net Assets Resulting from Operations $ 19,346,764
=============
</TABLE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION> For the Six For the
Months Ended Year Ended
Increase(Decrease) in Net Assets: January 31, 1996 July 31, 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 6,770,272 $ 14,215,189
Realized gain (loss) on investments--net 897,678 (11,911,145)
Change in unrealized appreciation on investments--net 11,678,814 10,368,332
------------- -------------
Net increase in net assets resulting from operations 19,346,764 12,672,376
------------- -------------
Dividends to Investment income--net:
Shareholders Class A (1,371,618) (3,309,230)
(Note 1f): Class B (5,026,016) (10,622,460)
Class C (65,045) (32,884)
Class D (307,593) (250,615)
------------- -------------
Net decrease in net assets resulting from dividends to shareholders (6,770,272) (14,215,189)
------------- -------------
Beneficial Interest Net increase (decrease) in net assets derived from beneficial
Transactions interest transactions 4,217,726 (24,480,728)
(Note 4): ------------- -------------
Net Assets: Total increase (decrease) in net assets 16,794,218 (26,023,541)
Beginning of period 268,299,800 294,323,341
------------- -------------
End of period $ 285,094,018 $ 268,299,800
============= =============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Financial Highlights
<CAPTION>
Class A
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.86 $ 9.88 $ 10.78 $ 10.66 $ 9.99
Operating ======== ======== ======== ======== ========
Performance: Investment income--net .27 .53 .55 .59 .66
Realized and unrealized gain (loss) on
investments--net .46 (.02) (.48) .22 .68
======== ======== ======== ======== ========
Total from investment operations .73 .51 .07 .81 1.34
======== ======== ======== ======== ========
Less dividends and distributions:
Investment income--net (.27) (.53) (.55) (.59) (.66)
Realized gain on investments--net -- -- -- (.10) (.01)
In excess of realized gain on
investments--net -- -- (.42) -- --
======== ======== ======== ======== ========
Total dividends and distributions (.27) (.53) (.97) (.69) (.67)
======== ======== ======== ======== ========
Net asset value, end of period $ 10.32 $ 9.86 $ 9.88 $ 10.78 $ 10.66
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 7.44%+++ 5.47% .39% 7.98% 13.91%
Return:** ======== ======== ======== ======== ========
Ratios to Expenses, net of reimbursement .69%* .70% .68% .66% .43%
Average ======== ======== ======== ======== ========
Net Asset Expenses .69%* .70% .68% .69% .76%
======== ======== ======== ======== ========
Investment income--net 5.27%* 5.54% 5.23% 5.58% 6.39%
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 51,904 $ 51,805 $ 69,409 $ 70,610 $ 49,806
Data: ======== ======== ======== ======== ========
Portfolio turnover 104.49% 178.62% 205.94% 142.59% 102.36%
======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class B
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
January 31, For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.86 $ 9.88 $ 10.78 $ 10.66 $ 9.99
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .24 .49 .49 .54 .61
Realized and unrealized gain (loss) on
investments--net .46 (.02) (.48) .22 .68
-------- -------- -------- -------- --------
Total from investment operations .70 .47 .01 .76 1.29
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.24) (.49) (.49) (.54) (.61)
Realized gain on investments--net -- -- -- (.10) (.01)
In excess of realized gain on
investments--net -- -- (.42) -- --
-------- -------- -------- -------- --------
Total dividends and distributions (.24) (.49) (.91) (.64) (.62)
======== ======== ======== ======== ========
Net asset value, end of period $ 10.32 $ 9.86 $ 9.88 $ 10.78 $ 10.66
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 7.17%+++ 4.93% (.11%) 7.44% 13.33%
Return:** ======== ======== ======== ======== ========
Ratios to Expenses, net of reimbursement 1.19%* 1.21% 1.18% 1.16% .94%
Average ======== ======== ======== ======== ========
Net Assets: Expenses 1.19%* 1.21% 1.18% 1.20% 1.26%
======== ======== ======== ======== ========
Investment income--net 4.76%* 5.03% 4.73% 5.07% 5.87%
======== ======== ======== ======== ========
Supplemental Net assets, end of period (in thousands). $215,541 $205,362 $224,915 $213,840 $147,743
Data: ======== ======== ======== ======== ========
Portfolio turnover 104.49% 178.62% 205.94% 142.59% 102.36%
======== ======== ======== ======== ========
<PAGE>
<CAPTION>
Class C Class D
For the For the
For the Period For the Period
The following per share data and ratios have been derived Six Months Oct. 21, Six Months Oct. 21,
from information provided in the financial statements. Ended 1994++ to Ended 1994++ to
January 31, July 31, January 31, July 31,
Increase (Decrease) in Net Asset Value: 1996 1995 1996 1995
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.85 $ 9.48 $ 9.85 $ 9.48
Operating -------- -------- -------- --------
Performance: Investment income--net .24 .37 .26 .40
Realized and unrealized gain on investments--net .46 .37 .46 .37
-------- -------- -------- --------
Total from investment operations .70 .74 .72 .77
-------- -------- -------- --------
Less dividends from investment income--net (.24) (.37) (.26) (.40)
-------- -------- -------- --------
Net asset value, end of period $ 10.31 $ 9.85 $ 10.31 $ 9.85
======== ======== ======== ========
Total Investment Based on net asset value per share 7.12%+++ 7.92%+++ 7.39%+++ 8.34%+++
Return:** ======== ======== ======== ========
Ratios to Expenses, net of reimbursement 1.30%* 1.33%* .78%* .81%*
Average Net ======== ======== ======== ========
Assets: Expenses 1.30%* 1.33%* .78%* .81%*
======== ======== ======== ========
Investment income--net 4.63%* 4.84%* 5.15%* 5.39%*
======== ======== ======== ========
Supplemental Net assets, end of period (in thousands) $ 3,803 $ 1,954 $ 13,846 $ 9,179
Data: ======== ======== ======== ========
Portfolio turnover 104.49% 178.62% 104.49% 178.62%
======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effect of sales loads.
++Commencement of Operations.
+++Aggregate total investment return
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Florida Municipal Bond Fund (the "Fund") is part of
Merrill Lynch Multi-State Municipal Series Trust (the "Trust"). The
Fund is registered under the Investment Company Act of 1940 as a non-
diversified, open-end management investment company. 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 a remaining maturity 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 contractor if the
counterparty does not perform under the contract.
<PAGE>
* 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.
(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.
NOTES TO FINANCIAL STATEMENTS (concluded)
(f) Dividends and distributions--Dividends from net investment
income are declared daily and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The 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.
<PAGE>
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 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.
For the six months ended January 31, 1996, 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 $ 826 $8,767
Class D $1,136 $6,983
For the six months ended January 31, 1996, MLPF&S received
contingent deferred sales charges of $149,851 and $200 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.
<PAGE>
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 six months ended January 31, 1996 were $270,490,082 and
$278,236,275, respectively.
Net realized and unrealized gains (losses) as of January 31, 1996
were as follows:
Realized
Gains Unrealized
(Losses) Gains
Long-term investments $1,354,503 $19,279,632
Short-term investments (8,509) --
Financial futures contracts (448,316) --
---------- -----------
Total $ 897,678 $19,279,632
=========== ===========
As of January 31, 1996, net unrealized appreciation for Federal
income tax purposes aggregated $19,279,632, of which $19,408,926
related to appreciated securities and $129,294 related to
depreciated securities. The aggregate cost of investments at January
31, 1996 for Federal income tax purposes was $262,295,127.
4. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from beneficial
interest transactions was $4,217,726 and ($24,480,728) for the six
months ended January 31, 1996 and the year ended July 31, 1995,
respectively.
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the Six Dollar
Months Ended Jan. 31, 1996 Shares Amount
Shares sold 271,319 $ 2,731,781
Shares issued to shareholders
in reinvestment of dividends 53,627 39,436
----------- -----------
Total issued 324,946 3,271,217
Shares redeemed (548,973) (5,527,439)
----------- -----------
Net decrease (224,027) $(2,256,222)
=========== ===========
<PAGE>
Class A Shares for the Year Dollar
Ended July 31, 1995 Shares Amount
Shares sold 540,960 $ 5,182,662
Shares issued to shareholders
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 B Shares for the Six Dollar
Months Ended Jan. 31, 1996 Shares Amount
Shares sold 2,419,684 $ 24,456,344
Shares issued to shareholders
in reinvestment of dividends 177,581 1,785,891
------------ ------------
Total issued 2,597,265 26,242,235
Automatic conversion
of shares (39,618) (400,982)
Shares redeemed (2,497,720) (25,193,439)
------------ ------------
Net increase 59,927 $ 647,814
============ ============
Class B Shares for the Year Dollar
Ended July 31, 1995 Shares Amount
Shares sold 5,042,475 $ 48,506,180
Shares issued to shareholders
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)
============ ============
<PAGE>
Class C Shares for the Six Dollar
Months Ended Jan. 31, 1996 Shares Amount
Shares sold 218,708 $ 2,205,025
Shares issued to shareholders
in reinvestment of dividends 4,134 41,679
------------ ------------
Total issued 222,842 2,246,704
Shares redeemed (52,279) (525,609)
------------ ------------
Net increase 170,563 $ 1,721,095
============ ============
Class C Shares for the Period Dollar
Oct. 21, 1994++ to July 31, 1995 Shares Amount
Shares sold 289,304 $ 2,806,834
Shares issued to shareholders
in reinvestmentof 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.
Class D Shares for the Six Dollar
Months Ended Jan. 31, 1996 Shares Amount
Shares sold 596,386 $ 6,008,639
Automatic conversion
of shares 39,697 400,982
Shares issued to shareholders
in reinvestment of dividends 14,537 145,909
------------ ------------
Total issued 650,620 6,555,530
Shares redeemed (239,331) (2,450,491)
------------ ------------
Net increase 411,289 $ 4,105,039
============ ============
<PAGE>
Class D Shares for the Period Dollar
Oct. 21, 1994++ to July 31, 1995 Shares Amount
Shares sold 1,094,228 $ 10,298,028
Automatic conversion
of shares 1,552 15,028
Shares issued to shareholders
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.
