MERRILL LYNCH
FLORIDA MUNICIPAL
BOND FUND
FUND LOGO
Annual Report
July 31, 1997
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.
<PAGE>
Merrill Lynch Florida
Municipal Bond Fund
Merrill Lynch Multi-State
Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
TO OUR SHAREHOLDERS
The Municipal Market Environment
During the six months ended July 31, 1997, a number of very
favorable factors combined to push both tax-exempt and taxable bond
yields to recent historic lows. A slowing domestic economy, a
continued benign, if not improving, inflationary environment, a
declining Federal budget deficit with resultant reduced Treasury
borrowing needs, and a successful Congressional budget accord all
resulted in significant declines in fixed-income yields. By the end
of July, 30-year US Treasury bond yields had declined approximately
50 basis points (0.50%) to 6.30%, their lowest level in over a year.
Similarly, as measured by the Bond Buyer Revenue Bond Index, long-
term municipal revenue bond yields fell over 50 basis points to end
the July 31, 1997 quarter at 5.49%, their lowest level since early
1994.
<PAGE>
The decline in tax-exempt yields in recent months was even more
impressive given that the municipal market lost much of the
technical support it enjoyed for over a year. In previous quarters,
new tax-exempt bond issuance declined, or remained stable. During
the six months ended July 31, 1997, approximately $100 billion in
new long-term municipal securities was underwritten, an increase of
over 7.5% versus the comparable period in 1996. As tax-exempt bond
yields declined, many municipal bond issuers took this opportunity
to both issue new debt as well as refinance older, higher-couponed
debt with new, lower-yielding issues. This refinancing led to a
surge in tax-exempt issuance in recent months. Over the three months
ended July 31, 1997, new long-term tax-exempt bond issuance totaled
approximately $55 billion, an increase of over 15% versus the July
31, 1996 quarter.
The decline in municipal bond yields also resulted in some reduction
in retail investor demand. In earlier episodes of rapidly declining
interest rates, individual investor demand initially fell until
investors became more acclimated to the current levels. Should
interest rates stabilize, we expect investor demand to return to
earlier levels. Also, this past June and July, municipal bond
investors received over $50 billion in assets from coupon income
payments, bond maturities, and the proceeds from early bond
redemptions. Despite the continued allure of the US equity market,
it is likely that much of these assets will be reallocated to the
municipal bond market as investors adjust to the new investment
environment.
Looking forward, given the extent of the recent bond market rally,
some retrenchment or at least a period of consolidation is likely.
However, the positive backdrop of modest economic growth and low
inflation suggests that any such adjustment is not likely to be
excessive. Despite recent increases in new bond issuance, supply for
all of 1997 is not expected to be materially different than earlier
estimates of approximately $175 billion. It is likely that the
recent increase in issuance has largely borrowed from that
originally scheduled for later this year. Additionally, any
significant increase in tax-exempt bond yields will prevent any
further bond refinancings, reducing future supply. Unless the
current positive economic fundamentals undergo immediate and
significant deterioration, any increase in municipal bond yields is
likely to be viewed as an opportunity to purchase more attractively
priced tax-exempt securities.
Fiscal Year in Review
During the fiscal year ended July 31, 1997, the increased volatility
in the bond market caused us to maintain a flexible investment
strategy. The everchanging perception of the economy and the need
for monetary tightening by the Federal Reserve Board created large
swings in interest rates. Flexibility enabled us to take advantage
of market fluctuations and enhance the Fund's total return.
<PAGE>
The Fund's defensive posture at the beginning of the fiscal year
protected it from the increase in bond yields through early
September 1996. At that time, we started purchasing interest rate-
sensitive bonds which helped the Fund perform well in the bond
market rally through the end of November. Our investment strategy
remained constructive based on the forecast of a continued moderate
economy for the first half of 1997. Unfortunately, this forecast did
not come to be as the economy actually surged during the first three
months of 1997. Interest rates increased bringing Florida tax-exempt
yields back to 5.90%. Although the economy accelerated at a rapid
pace during the first quarter of 1997, inflation remained benign. We
remained constructive on the market enabling the Fund to fully
participate in the rally that lasted through the end of July.
During the fiscal year, long-term Florida issuance actually
increased by over 21% versus the comparable period a year earlier.
Fortunately, investor interest in Florida tax-exempt bonds helped
absorb this increase in supply. Heavy Florida supply caused yields
to become inexpensive relative to the rest of the municipal market,
but we anticipate that this relationship will reverse in the future.
Looking forward, we plan to maintain a neutral posture until the
economy shows signs of accelerating. We believe the economy will
reaccelerate in the second half of 1997, causing the Federal Reserve
Board to raise short-term interest rates again to control inflation.
In Conclusion
We appreciate your ongoing interest in Merrill Lynch Florida
Municipal Bond Fund, and we look forward to serving your investment
needs in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
<PAGE>
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Robert A. DiMella)
Robert A. DiMella
Vice President and Portfolio Manager
September 3, 1997
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. (There is no initial
sales charge for automatic share conversions.)
* 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).
<PAGE>
None of the past results shown should be considered a representation
of future performance. Figures shown in the "Average Total Return"
tables as well as the total returns and cumulative total returns in
the "Performance Summary" tables assume reinvestment of all
dividends and capital gains distributions at net asset value on the
payable date. Investment return and principal value of shares will
fluctuate so that shares, when redeemed, may be worth more or less
than their original cost. Dividends paid to each class of shares
will vary because of the different levels of account maintenance,
distribution and transfer agency fees applicable to each class,
which are deducted from the income available to be paid to
shareholders.
<TABLE>
Recent Performance Results
<CAPTION>
12 Month 3 Month
7/31/97 4/30/97 7/31/96 % Change % Change
<S> <C> <C> <C> <C> <C>
Class A Shares* $10.37 $9.95 $9.94 +4.33% +4.22%
Class B Shares* 10.37 9.95 9.94 +4.33 +4.22
Class C Shares* 10.35 9.94 9.92 +4.33 +4.12
Class D Shares* 10.35 9.94 9.92 +4.33 +4.12
Class A Shares--Total Return* +9.99(1) +5.59(2)
Class B Shares--Total Return* +9.43(3) +5.46(4)
Class C Shares--Total Return* +9.33(5) +5.33(6)
Class D Shares--Total Return* +9.89(7) +5.47(8)
Class A Shares--Standardized 30-day Yield 4.57%
Class B Shares--Standardized 30-day Yield 4.25%
Class C Shares--Standardized 30-day Yield 4.15%
Class D Shares--Standardized 30-day Yield 4.47%
<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 $0.482 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 $0.117 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)
Average Annual Total Return
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 Shares and Class B Shares compared to growth of an
investment in the Lehman Brothers Municipal Bond Index. Beginning
and ending values are:
5/31/91** 7/97
ML Florida Municipal Bond Fund++--
Class A Shares* $ 9,600 $14,774
ML Florida Municipal Bond Fund++--
Class B Shares* $10,000 $14,917
Lehman Brothers Municipal Bond Index++++ $10,000 $16,167
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 Shares and Class D Shares compared to growth of an
investment in the Lehman Brothers Municipal Bond Index. Beginning
and ending values are:
10/21/94** 7/97
ML Florida Municipal Bond Fund++--
Class C Shares* $10,000 $12,453
ML Florida Municipal Bond Fund++--
Class D Shares* $ 9,600 $12,125
Lehman Brothers Municipal Bond Index++++ $10,000 $13,054
<PAGE>
[FN]
*Assuming maximum sales charge, 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 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.
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 6/30/97 +8.03% +3.71%
Five Years Ended 6/30/97 +6.14 +5.27
Inception (5/31/91)
through 6/30/97 +6.86 +6.14
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 6/30/97 +7.48% +3.48%
Five Years Ended 6/30/97 +5.60 +5.60
Inception (5/31/91)
through 6/30/97 +6.32 +6.32
[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**
<PAGE>
Class C Shares*
Year Ended 6/30/97 +7.27% +6.27%
Inception (10/21/94)
through 6/30/97 +7.40 +7.40
[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 6/30/97 +7.82% +3.50%
Inception (10/21/94)
through 6/30/97 +7.95 +6.33
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
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
1996 10.28 10.11 -- 0.531 + 3.69
1/1/97-7/31/97 10.11 10.37 -- 0.296 + 5.78
------ ------
Total $0.157 Total $3.871
Cumulative total return as of 7/31/97: +53.89%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not include sales charge; results would be lower if
sales charge was included.
</TABLE>
<PAGE>
<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
1996 10.28 10.11 -- 0.480 + 3.17
1/1/97-7/31/97 10.11 10.37 -- 0.268 + 5.47
------ ------
Total $0.157 Total $3.556
Cumulative total return as of 7/31/97: +49.17%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not reflect deduction of any sales charge; results
would be lower if sales charge was deducted.
</TABLE>
<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
1996 10.27 10.09 -- 0.469 + 2.96
1/1/97-7/31/97 10.09 10.35 -- 0.262 + 5.41
------
Total $1.294
Cumulative total return as of 7/31/97: +24.53%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not reflect deduction of any sales charge; results
would be lower if sales charge was deducted.
</TABLE>
<PAGE>
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
1996 10.27 10.10 -- 0.520 + 3.58
1/1/97-7/31/97 10.10 10.35 -- 0.290 + 5.62
------
Total $1.433
Cumulative total return as of 7/31/97: +26.30%**
<FN>
*Figures may include short-term capital gains distributions.
**Figures do not include sales charge; results would be lower if
sales charge was included.
</TABLE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of Merrill Lynch Florida Municipal Bond
Fund's portfolio holdings in the Schedule of Investments, we have
abbreviated the names of many of the securities according to the
list below and at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITES Residual Interest Tax-Exempt Securities
S/F Single-Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida--91.2%
<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 (k) $ 1,308
NR* Aaa 5,000 Brevard County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT, 6.70% due
9/01/2027 (f) 5,318
Brevard County, Florida, Health Facilities Authority Revenue Bonds
(Wuesthoff Memorial Hospital), Series B (c):
AAA Aaa 8,000 7.20% due 4/01/2002 (j) 9,142
AAA Aaa 1,375 Refunding, 6.90% due 4/01/2002 (k) 1,530
Broward County, Florida, HFA, M/F Housing Revenue Refunding Bonds
(Lakeside Apartments Project) (i):
AAA NR* 1,100 6.90% due 8/01/2015 1,195
AAA NR* 1,100 7% due 2/01/2025 1,195
A1+ NR* 3,925 Broward County, Florida, HFA, M/F Housing Revenue Refunding Bonds
(Southern Pointe Project), VRDN, 4% due 5/15/2027 (a) 3,925
AAA Aaa 4,000 Celebration Community Development District, Florida (Special Assessment),
6% due 5/01/2010 (c) 4,298
AAA Aaa 7,650 Charlotte County, Florida, Health Care Facilities Revenue Bonds
(Bon Secours Health System), RIB, 7.822% due 8/26/2027 (g)(h) 8,482
A+ A1 11,215 Citrus County, Florida, PCR, Refunding (Florida Power Corporation--Crystal
River), Series A, 6.625% due 1/01/2027 12,132
AAA Aaa 2,500 Cocoa, Florida, Water and Sewer Revenue Improvement Bonds, 5.75% due
10/01/2017 (e) 2,643
NR* NR* 4,440 Collier County, Florida, IDA, IDR, Refunding (Southern States Utilities),
AMT, 6.50% due 10/01/2025 4,629
Dade County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT:
NR* Aaa 170 Series B, 7.25% due 9/01/2023 (d) 180
NR* Aaa 3,495 Series C, 7.75% due 9/01/2022 (f) 3,703
AA- VMIG1++ 4,200 Dade County, Florida, IDA, Exempt Facilities Revenue Refunding Bonds
(Florida Power and Light Co.), VRDN, 3.60% due 6/01/2021 (a) 4,200
AAA Aaa 10,000 Dade County, Florida, Seaport, GO, UT, 6.50% due 10/01/2001 (b)(j) 11,002
<PAGE>
AAA Aaa 5,000 Dade County, Florida, Water and Sewer Systems Revenue Bonds, 5.25% due
10/01/2021 (e) 4,952
AAA Aaa 12,000 Escambia County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds
(Multi-County Program), AMT, 7% due 4/01/2028 (d) 13,004
Escambia County, Florida, PCR (Champion International Corporation Project):
BBB Baa1 11,620 AMT, 6.90% due 8/01/2022 12,889
BBB Baa1 2,500 Refunding, 6.95% due 11/01/2007 2,740
NR* Aaa 1,660 Florida HFA, Home Ownership Revenue Bonds, AMT, Series G-1, 7.90% due
3/01/2022 (f) 1,769
AAA Aaa 10,420 Florida HFA (Maitland Club Apartments), AMT, Series B-1, 7% due 2/01/2035 (b) 11,307
AA+ Aa2 5,595 Florida State Board of Education, Capital Outlay, Public Education,
Refunding, Series A, 7.25% due 6/01/2023 6,128
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Florida (continued)
<S> <S> <C> <S> <C>
AAA Aaa $ 1,205 Florida State Department of Transportation Revenue Bonds (Alligator Alley),
6.25% due 7/01/2006 (e) $ 1,362
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) 5,227
A A3 10,505 Hillsborough County, Florida, Capital Improvement Revenue Bonds (County
Center Project), Second Series, 6.75% due 7/01/2002 (j) 11,845
AA Aa3 2,250 Hillsborough County, Florida, IDA, PCR, Refunding (Tampa Electric Company
Project), Series 91, 7.875% due 8/01/2021 2,586
AAA Aaa 1,000 Hillsborough County, Florida, Port District Special Revenue Refunding Bonds
(Tampa Port Authority), AMT, 6% due 6/01/2020 (g) 1,048
AAA Aaa 2,750 Hillsborough County, Florida, Utility Revenue Refunding Bonds, Series B,
6.50% due 8/01/2016 (c) 3,022
<PAGE>
NR* Aaa 12,000 Indian Trace Community, Development District, Florida, Water Management
(Special Benefit Assessment), 5% due 5/01/2027 (c) 11,602
Jacksonville, Florida, Health Facilities Authority, Hospital Revenue Bonds,
VRDN (a):
A1+ VMIG1++ 800 (Baptist Medical Center Project), 3.50% due 6/01/2008 (c) 800
NR* VMIG1++ 3,000 Refunding (Genesis Rehabilitation Hospital), 3.65% due 5/01/2021 3,000
Leesburg, Florida, Hospital Revenue Refunding Bonds
(Leesburg Regional Medical Center Project):
A- A3 6,110 Series A, 6.125% due 7/01/2018 6,396
A- A3 1,515 Series B, 5.625% due 7/01/2013 1,535
AAA Aaa 1,000 Manatee County, Florida, School Board, COP, 6.125% due 7/01/2021 (c) 1,085
AAA Aaa 2,080 Pasco County, Florida, Health Facilities Authority, Revenue Refunding Bonds
(Gross Adventist Health System--Sunbelt), 7% due 10/01/2014 (k) 2,462
Pinellas County, Florida, HFA, S/F Mortgage Revenue Bonds
(Multi-County Program), AMT, Series C (d):
NR* Aaa 1,750 5.70% due 9/01/2018 1,775
NR* Aaa 2,000 5.80% due 3/01/2029 2,029
NR* Aaa 350 Polk County, Florida, HFA, Refunding, Series A, 7.15% due 9/01/2023 (f) 370
AAA Aaa 7,095 Saint John's County, Florida, IDA, IDR (Professional Golf Hall of Fame
Project), 5.875% due 9/01/2023 (c) 7,478
AAA Aaa 3,250 Saint Petersburg, Florida, Health Facilities Authority Revenue Bonds
(Allegany Health System), Series A, 7% due 12/01/2015 (c) 3,630
AAA Aaa 11,085 Sarasota County, Florida, Utility System Revenue Refunding Bonds, Series A,
5.25% due 10/01/2025 (e) 11,020
AAA Aaa 2,800 South Broward, Florida, Hospital District, Hospital Revenue Bonds, RIB,
Series C, 8.933% due 5/01/2001 (b)(h)(j) 3,388
AAA Aaa 2,000 Sunrise, Florida, Utility System Revenue Bonds, Series A, 5.75% due
10/01/2026 (b) 2,089
AAA Aaa 1,475 Tampa, Florida, Allegany Health System, Revenue Bonds (Saint Joseph),
6.75% due 12/01/2017 (c) 1,633
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<PAGE>
Puerto Rico--9.1%
<S> <S> <C> <S> <C>
Puerto Rico Commonwealth, Highway and Transportation Authority, Highway
Revenue Bonds, RITES, Series X (h):
A1+ Baa1 $ 7,600 6.243% due 7/01/2004 $ 8,227
A1+ Baa1 10,000 6.343% due 7/01/2005 10,862
AAA Aaa 2,250 Puerto Rico Commonwealth, Refunding Bonds, UT, 5.375% due 7/01/2022 (c) 2,268
Total Investments (Cost--$217,660)--100.3% 234,410
Liabilities in Excess of Other Assets--(0.3%) (763)
--------
Net Assets--100.0% $233,647
========
<FN>
(a)The interest rate is subject to change periodically based upon
the prevailing market rates. The interest rate shown is the rate in
effect at July 31, 1997.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FNMA/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
the rate in effect at July 31, 1997.
(i)FNMA Collateralized.
(j)Prerefunded.
(k)Escrowed to maturity.
*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.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets and Liabilities as of July 31, 1997
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$217,659,784) (Note 1a) $234,410,328
Cash 93,623
Receivables:
Interest $ 3,454,899
Beneficial interest sold 102,631 3,557,530
------------
Prepaid registration fees and other assets (Note 1e) 4,273
------------
Total assets 238,065,754
------------
<PAGE>
Liabilities: Payables:
Securities purchased 2,273,843
Beneficial interest redeemed 1,567,443
Dividends to shareholders (Note 1f) 305,240
Investment adviser (Note 2) 109,177
Distributor (Note 2) 72,713 4,328,416
------------
Accrued expenses and other liabilities 89,922
------------
Total liabilities 4,418,338
------------
Net Assets: Net assets $233,647,416
============
Net Assets Class A Shares of beneficial interest, $.10 par value,
Consist of: unlimited number of shares authorized $ 459,117
Class B Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 1,548,820
Class C Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 57,741
Class D Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized 188,513
Paid-in capital in excess of par 233,327,414
Accumulated realized capital losses on investments--net (Note 5) (13,990,624)
Accumulated distributions in excess of realized capital gains--
net (Note 1f) (4,694,109)
Unrealized appreciation on investments--net 16,750,544
------------
Net assets $233,647,416
============
Net Asset Value: Class A--Based on net assets of $47,598,051 and 4,591,169
shares of beneficial interest outstanding $ 10.37
============
Class B--Based on net assets of $160,562,153 and 15,488,192
shares of beneficial interest outstanding $ 10.37
============
Class C--Based on net assets of $5,975,971 and 577,406
shares of beneficial interest outstanding $ 10.35
============
Class D--Based on net assets of $19,511,241 and 1,885,132
shares of beneficial interest outstanding $ 10.35
============
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
July 31, 1997
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 14,958,819
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 1,371,623
Account maintenance and distribution fees--Class B (Note 2) 887,452
Accounting services (Note 2) 102,692
Transfer agent fees--Class B (Note 2) 77,215
Professional fees 71,159
Printing and shareholder reports 45,835
Account maintenance and distribution fees--Class C (Note 2) 36,299
Account maintenance fees--Class D (Note 2) 18,755
Transfer agent fees--Class A (Note 2) 16,756
Custodian fees 15,214
Trustees' fees and expenses 13,126
Registration fees (Note 1e) 7,216
Transfer agent fees--Class D (Note 2) 6,695
Pricing fees 5,923
Transfer agent fees--Class C (Note 2) 2,736
Other 7,427
------------
Total expenses 2,686,123
------------
Investment income--net 12,272,696
------------
Realized & Realized gain on investments--net 4,923,619
Unrealized Gain on Change in unrealized appreciation/depreciation on investments
Investments--Net --net 5,108,135
(Notes 1b, 1d & 3): ------------
Net Increase in Net Assets Resulting from Operations $ 22,304,450
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended July 31,
Increase (Decrease) in Net Assets: 1997 1996
<S> <S> <C> <C>
Operations: Investment income--net $ 12,272,696 $ 13,441,614
Realized gain (loss) on investments--net 4,923,619 (2,079,595)
Change in unrealized appreciation/depreciation on investments--net 5,108,135 4,041,591
------------ ------------
Net increase in net assets resulting from operations 22,304,450 15,403,610
------------ ------------
Dividends to Investment income--net:
Shareholders Class A (2,498,485) (2,676,299)
(Note 1f): Class B (8,512,919) (9,896,005)
Class C (284,124) (181,287)
Class D (977,168) (688,023)
------------ ------------
Net decrease in net assets resulting from dividends to
shareholders (12,272,696) (13,441,614)
------------ ------------
Beneficial Interest Net decrease in net assets derived from beneficial interest
Transactions transactions (39,215,251) (7,430,883)
(Note 4): ------------ ------------
Net Assets: Total decrease in net assets (29,183,497) (5,468,887)
Beginning of year 262,830,913 268,299,800
------------ ------------
End of year $233,647,416 $262,830,913
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<PAGE>
<TABLE>
Financial Highlights
<CAPTION>
The following per share data and ratios have been derived Class A
from information provided in the financial statements.
For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 9.94 $ 9.86 $ 9.88 $ 10.78 $ 10.66
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .53 .53 .53 .55 .59
Realized and unrealized gain (loss) on
investments--net .43 .08 (.02) (.48) .22
-------- -------- -------- -------- --------
Total from investment operations .96 .61 .51 .07 .81
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.53) (.53) (.53) (.55) (.59)
Realized gain on investments--net -- -- -- -- (.10)
In excess of realized gain on
investments--net -- -- -- (.42) --
-------- -------- -------- -------- --------
Total dividends and distributions (.53) (.53) (.53) (.97) (.69)
-------- -------- -------- -------- --------
Net asset value, end of year $ 10.37 $ 9.94 $ 9.86 $ 9.88 $ 10.78
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 9.99% 6.30% 5.47% .39% 7.98%
Return:* ======== ======== ======== ======== ========
Ratios to Expenses, net of reimbursement .69% .68% .70% .68% .66%
Average ======== ======== ======== ======== ========
Net Assets: Expenses .69% .68% .70% .68% .69%
======== ======== ======== ======== ========
Investment income--net 5.31% 5.30% 5.54% 5.23% 5.58%
======== ======== ======== ======== ========
Supplemental Net assets, end of year (in thousands) $ 47,598 $ 46,765 $ 51,805 $ 69,409 $ 70,610
Data: ======== ======== ======== ======== ========
Portfolio turnover 84.69% 162.83% 178.62% 205.94% 142.59%
======== ======== ======== ======== ========
<PAGE>
<FN>
*Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<PAGE>
<TABLE>
Financial Highlights (continued)
<CAPTION>
The following per share data and ratios have been derived Class B
from information provided in the financial statements.
For the Year Ended July 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 9.94 $ 9.86 $ 9.88 $ 10.78 $ 10.66
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .48 .48 .49 .49 .54
Realized and unrealized gain (loss) on
investments--net .43 .08 (.02) (.48) .22
-------- -------- -------- -------- --------
Total from investment operations .91 .56 .47 .01 .76
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net (.48) (.48) (.49) (.49) (.54)
Realized gain on investments--net -- -- -- -- (.10)
In excess of realized gain on
investments--net -- -- -- (.42) --
-------- -------- -------- -------- --------
Total dividends and distributions (.48) (.48) (.49) (.91) (.64)
-------- -------- -------- -------- --------
Net asset value, end of year $ 10.37 $ 9.94 $ 9.86 $ 9.88 $ 10.78
======== ======== ======== ======== ========
Total Investment Based on net asset value per share 9.43% 5.76% 4.93% (.11%) 7.44%
Return:* ======== ======== ======== ======== ========
Ratios to Expenses, net of reimbursement 1.20% 1.18% 1.21% 1.18% 1.16%
Average ======== ======== ======== ======== ========
Net Assets: Expenses 1.20% 1.18% 1.21% 1.18% 1.20%
======== ======== ======== ======== ========
Investment income--net 4.80% 4.79% 5.03% 4.73% 5.07%
======== ======== ======== ======== ========
Supplemental Net assets, end of year (in thousands) $160,562 $195,097 $205,362 $224,915 $213,840
Data: ======== ======== ======== ======== ========
Portfolio turnover 84.69% 162.83% 178.62% 205.94% 142.59%
======== ======== ======== ======== ========
<FN>
*Total investment returns exclude the effects of sales loads.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<PAGE>
<TABLE>
Financial Highlights (concluded)
<CAPTION>
Class C Class D
For the For the
Period Period
The following per share data and ratios have been derived Oct. 21, Oct. 21,
from information provided in the financial statements. For the Year 1994++ to For the Year 1994++ to
Ended July 31, July 31, Ended July 31, July 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 9.92 $ 9.85 $ 9.48 $ 9.92 $ 9.85 $ 9.48
Operating -------- -------- -------- -------- -------- --------
Performance: Investment income--net .47 .47 .37 .52 .52 .40
Realized and unrealized gain on
investments--net .43 .07 .37 .43 .07 .37
-------- -------- -------- -------- -------- --------
Total from investment operations .90 .54 .74 .95 .59 .77
-------- -------- -------- -------- -------- --------
Less dividends from investment
income--net (.47) (.47) (.37) (.52) (.52) (.40)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 10.35 $ 9.92 $ 9.85 $ 10.35 $ 9.92 $ 9.85
======== ======== ======== ======== ======== ========
Total Investment Based on net asset value per share 9.33% 5.54% 7.92%+++ 9.89% 6.09% 8.34%+++
Return:** ======== ======== ======== ======== ======== ========
Ratios to Average Expenses 1.30% 1.28% 1.33%* .79% .78% .81%*
Net Assets: ======== ======== ======== ======== ======== ========
Investment income--net 4.70% 4.70% 4.84%* 5.21% 5.20% 5.39%*
======== ======== ======== ======== ======== ========
Supplemental Net assets, end of period
Data: (in thousands) $ 5,976 $ 5,738 $ 1,954 $ 19,511 $ 15,231 $ 9,179
======== ======== ======== ======== ======== ========
Portfolio turnover 84.69% 162.83% 178.62% 84.69% 162.83% 178.62%
======== ======== ======== ======== ======== ========
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads.
++Commencement of Operations.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
<PAGE>
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.
(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.
<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) Prepaid registration fees--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 different tax
treatments for future 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 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 year ended July 31, 1997, 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 $ 729 $ 6,772
Class D $2,785 $24,275
For the year ended July 31, 1997, MLPF&S received contingent
deferred sales charges of $36,988 and $4,549 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, MLFDS, MLFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended July 31, 1997 were $203,811,842 and $219,439,110,
respectively.
Net realized and unrealized gains as of July 31, 1997 were as
follows:
Realized Unrealized
Gains Gains
Long-term investments $ 4,488,613 $16,750,544
Financial futures contracts 435,006 --
----------- -----------
Total $ 4,923,619 $16,750,544
=========== ===========
As of July 31, 1997, net unrealized appreciation for Federal income
tax purposes aggregated $16,707,327 of which all is related to
appreciated securities. The aggregate cost of investments at July
31, 1997 for Federal income tax purposes was $217,703,001.
4. Beneficial Interest Transactions:
Net decrease in net assets derived from beneficial interest
transactions was $39,215,251 and 7,430,883 for the years ended July
31, 1997 and July 31, 1996, respectively.
Transactions in shares of beneficial interest for each class were as
follows:
Class A Shares for the Year Dollar
Ended July 31, 1997 Shares Amount
Shares sold 1,198,024 $ 12,044,059
Shares issued to share-
holders in reinvestment of
dividends 102,957 1,034,308
------------ ------------
Total issued 1,300,981 13,078,367
Shares redeemed (1,415,548) (14,209,728)
------------ ------------
Net decrease (114,567) $ (1,131,361)
============ ============
<PAGE>
Class A Shares for the Year Dollar
Ended July 31, 1996 Shares Amount
Shares sold 430,815 $ 4,316,851
Shares issued to share-
holders in reinvestment of
dividends 104,910 1,050,031
------------ ------------
Total issued 535,725 5,366,882
Shares redeemed (1,082,446) (10,807,359)
------------ ------------
Net decrease (546,721) $ (5,440,477)
============ ============
Class B Shares for the Year Dollar
Ended July 31, 1997 Shares Amount
Shares sold 1,862,462 $ 18,706,803
Shares issued to share-
holders in reinvestment of
dividends 314,901 3,162,398
------------ ------------
Total issued 2,177,363 21,869,201
Automatic conversion
of shares (88,402) (887,789)
Shares redeemed (6,233,558) (62,569,290)
------------ ------------
Net decrease (4,144,597) $(41,587,878)
============ ============
Class B Shares for the Year Dollar
Ended July 31, 1996 Shares Amount
Shares sold 3,570,813 $ 35,905,936
Shares issued to share-
holders in reinvestment of
dividends 353,333 3,535,438
------------ ------------
Total issued 3,924,146 39,441,374
Automatic conversion
of shares (94,686) (1,282,755)
Shares redeemed (5,018,931) (49,984,983)
------------ ------------
Net decrease (1,189,471) $(11,826,364)
============ ============
Class C Shares for the Year Dollar
Ended July 31, 1997 Shares Amount
Shares sold 325,779 $ 3,269,654
Shares issued to shareholders
in reinvestment of dividends 17,881 179,309
------------ ------------
Total issued 343,660 3,448,963
Shares redeemed (344,557) (3,461,143)
------------ ------------
Net decrease (897) $ (12,180)
============ ============
<PAGE>
Class C Shares for the Year Dollar
Ended July 31, 1996 Shares Amount
Shares sold 484,696 $ 4,860,354
Shares issued to shareholders
in reinvestment of dividends 11,753 117,319
------------ ------------
Total issued 496,449 4,977,673
Shares redeemed (116,573) (1,161,018)
------------ ------------
Net increase 379,876 $ 3,816,655
============ ============
Class D Shares for the Year Dollar
Ended July 31, 1997 Shares Amount
Shares sold 873,825 $ 8,795,859
Automatic conversion
of shares 88,522 887,789
Shares issued to shareholders
in reinvestment of dividends 36,575 366,988
------------ ------------
Total issued 998,922 10,050,636
Shares redeemed (648,762) (6,534,468)
------------ ------------
Net increase 350,160 $ 3,516,168
============ ============
Class D Shares for the Year Dollar
Ended July 31, 1996 Shares Amount
Shares sold 808,887 $ 7,797,601
Automatic conversion
of shares 94,852 1,282,755
Shares issued to shareholders
in reinvestment of dividends 32,096 320,506
------------ ------------
Total issued 935,835 9,400,862
Shares redeemed (332,993) (3,381,559)
------------ ------------
Net increase 602,842 $ 6,019,303
============ ============
<PAGE>
5. Capital Loss Carryforward:
At July 31, 1997, the Fund had a capital loss carry-forward of
approximately $16,579,000, of which $14,303,000 expires in 2003 and
$2,276,000 expires in 2004. This amount will be available to offset
like amounts of any 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, 1997, 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 five-year period
then ended. 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.
We conducted our audits in accordance with generally 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 procedures included confirmation of securities owned at July
31, 1997 by correspondence with the custodian and broker. 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, 1997, 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.
<PAGE>
Deloitte & Touche LLP
Princeton, New Jersey
September 4, 1997
</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, 1997 qualify as tax-exempt interest dividends for
Federal income tax purposes.
Additionally, there were no capital gains distributions made by the
Fund during the year.
Please retain this information for your records.
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
James H. Bodurtha, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Robert A. DiMella, Vice President
Gerald M. Richard, Treasurer
Robert E. Putney III, Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
<PAGE>
