MERRILL LYNCH
FLORIDA MUNICIPAL
BOND FUND
[GRAPHIC OMITTED]
STRATEGIC
Performance
Semi-Annual Report
January 31, 1999
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
TO OUR SHAREHOLDERS
The Municipal Market Environment
During the six months ended January 31, 1999, long-term bond yields moved
significantly lower. US domestic economic growth remained moderate, with losses
in the manufacturing sector offset by strong growth in service-oriented
industries. Industrial commodity prices recently fell to their lowest level in
over a decade. This suggests that the current positive inflationary environment
is unlikely to be challenged in the near term. Additionally, the Federal Reserve
Board lowered short-term interest rates in September, October and November, in
part to ensure that US domestic economic growth would not be negatively impacted
by ongoing weak economic growth overseas. However, various external factors, as
well as increased volatility, contributed to the decline in bond yields as they
have for much of the past year. Episodes of foreign economic instability
generated a significant "flight to quality" rally in US Treasury securities, as
well as fostering lower tax-exempt bond yields as a result. Periods of strong
foreign equity market appreciation, particularly in Asia, have at times resulted
in higher US bond yields as foreign investors have sold US fixed-income
instruments to reinvest the proceeds in their own domestic equity markets.
Additionally, the continued distraction of President Clinton's impeachment trial
added to recent interest rate volatility. However, on balance, the favorable
fundamental economic scenario supported lower bond yields. During the six-month
period ended January 31, 1999, the yield on the US Treasury 30-year bond fell
over 60 basis points (0.60%) to 5.09%, and long-term municipal revenue bond
yields declined almost 20 basis points to 5.17%, as measured by the Bond Buyer
Revenue Bond Index.
Throughout most of 1998, the municipal bond market's performance was impeded by
a significant increase in new-issue supply. However, in recent months, the
technical position of the tax-exempt market improved. Over the last 12 months,
almost $285 billion in new long-term tax-exempt bonds was underwritten, an
increase of almost 30% compared to the same period a year ago. As municipal bond
yields declined in recent years, it has taken increasingly lower bond yields to
generate the cost savings necessary to refinance remaining higher-couponed debt.
Consequently, the rate of increases in municipal bond issuance slowed in recent
quarters. During the last six months, more than $125 billion in new tax-exempt
bonds was issued, an increase of approximately 5% compared to the same period a
year ago. During the January 31, 1999 quarter, $63 billion in new long-term
municipal bonds was underwritten, representing an increase of 5% compared to the
January 31, 1998 quarter.
The pace of tax-exempt issuance continued to slow in 1999. January's monthly
issuance was less than $15 billion, representing a decline of almost 25%
compared to January 1998's volume. Additionally, investors received more than
$22 billion in coupon payments, maturities and proceeds from early redemptions
in January. Investors can also expect to receive an additional $15 billion-$18
billion in February for reinvestment. Consequently, investor demand has been
strong in recent months, easily matching, if not at times exceeding, available
supply. We will monitor this trend closely in the coming months to determine if
the supply pressures exerted in 1998 are abating and fostering a more balanced
supply/demand environment for 1999. Such an environment should allow the
tax-exempt market's performance to more closely mirror that of its taxable
counterpart.
Foreign investors have rarely been active investors in the tax-exempt bond
market since they are unable to benefit from the inherent tax advantage of
municipal securities. Consequently, the municipal bond market has not been able
to benefit from the strong flight to quality demand enjoyed by US Treasury
securities since late 1997. This inability has in large part resulted in
significantly smaller declines in municipal bond yields compared to US Treasury
securities. However, this has resulted in the opportunity to purchase tax-exempt
securities with yields very close to or, in some instances, exceeding those of
comparable US Treasury bonds. By January 31, 1999, long-term tax-exempt bond
yields were at 102% of US Treasury securities of comparable maturities, nearly
matching the least expensive level of the past year. Municipal bond yield ratios
have averaged approximately 95% for the last six months and 92% for all of 1998.
During 1997, tax-exempt bond yield ratios averaged 84%. It is likely that the
combination of the increase in new-issue volume and the "safe-haven" status of
US Treasury securities drove municipal bond yield ratios to their
1
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
present attractive levels. Should new volume decline and/or foreign financial
markets regain stability in 1999, tax-exempt bond yield ratios could quickly
return to their more historic levels (85%-88%).
Looking ahead, the expected combination of moderate economic growth in the
United States and continued negligible inflation suggests a relatively stable
interest rate environment into early 1999. However, it is likely that foreign
financial markets will again be a critical factor in determining US bond yields.
Economic problems in Russia and Brazil remain unresolved, suggesting that
additional shocks to the world's financial system are possible. On the other
hand, the continued robustness of the US economy has led to some back up in
interest rates. However, at present these factors indicate that there is little
immediate risk of sustained significant increases in long-term bond yields.
Portfolio Strategy
During the six months ended January 31, 1999, we maintained a constructive
investment strategy for Merrill Lynch Florida Municipal Bond Fund. We believed
that a continuation of current equity market volatility would have a negative
impact on economic growth, thereby constricting global inflation and forcing
interest rates lower. This proved to be the case as turmoil increased in various
parts of the world, including Russia and Brazil. While the US economy had
performed much better than anticipated, inflation was quite benign. Our
constructive strategy helped the Fund realize attractive total returns by
enabling it to participate in the bond market rally.
Looking ahead, we expect to remain fully invested in order to seek to maintain a
high level of tax-exempt income. We expect new-issue supply in Florida to remain
moderate and demand for municipal bonds to remain quite strong.
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,
/s/ Terry K. Glenn
Terry K. Glenn
Executive Vice President
/s/ Vincent R. Giordano
Vincent R. Giordano
Senior Vice President
/s/ Robert A. DiMella
Robert A. DiMella
Vice President and Co-Portfolio Manager
/s/ Robert D. Sneeden
Robert D. Sneeden
Vice President and Co-Portfolio Manager
March 9, 1999
2
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
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:
o 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.
o Class B Shares are subject to a maximum contingent deferred sales charge
of 4% if redeemed during the first year, decreasing to 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.)
o 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.
o 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. Figures shown in the "Recent Performance Results" and
"Average Annual Total Return" 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.
Recent Performance Results*
<TABLE>
<CAPTION>
Standardized
12 Month 3 Month Since Inception 30-Day Yield
Total Return Total Return Total Return As of 1/31/99
=================================================================================================================
<S> <C> <C> <C> <C>
ML Florida Municipal Bond Fund Class A Shares +6.10% +1.66% +69.32% 4.01%
- -----------------------------------------------------------------------------------------------------------------
ML Florida Municipal Bond Fund Class B Shares +5.57 +1.53 +62.89 3.68
- -----------------------------------------------------------------------------------------------------------------
ML Florida Municipal Bond Fund Class C Shares +5.47 +1.51 +35.79 3.58
- -----------------------------------------------------------------------------------------------------------------
ML Florida Municipal Bond Fund Class D Shares +6.00 +1.64 +38.77 3.92
=================================================================================================================
</TABLE>
* Investment results shown do not reflect sales charges; results would be
lower if a sales charge was included. Total investment returns are based
on changes in net asset values for the periods shown, and assume
reinvestment of all dividends and capital gains distributions at net asset
value on the payable date. The Fund's since inception periods are Class A
& Class B Shares, from 5/31/91 to 1/31/99 and Class C & Class D Shares,
from 10/21/94 to 1/31/99.
3
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
PERFORMANCE DATA (concluded)
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
Year Ended 12/31/98 +5.88% +1.64%
- --------------------------------------------------------------------------------
Five Years Ended 12/31/98 +5.09 +4.23
- --------------------------------------------------------------------------------
Inception (5/31/91)
through 12/31/98 +7.03 +6.46
- --------------------------------------------------------------------------------
* Maximum sales charge is 4%
** Assuming maximum sales charge
% Return % Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
Year Ended 12/31/98 +5.34% +1.34%
- --------------------------------------------------------------------------------
Five Years Ended 12/31/98 +4.56 +4.56
- --------------------------------------------------------------------------------
Inception (5/31/91)
through 12/31/98 +6.49 +6.49
- --------------------------------------------------------------------------------
* 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 12/31/98 +5.24% +4.24%
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 12/31/98 +7.29 +7.29
- --------------------------------------------------------------------------------
* 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 12/31/98 +5.77% +1.54%
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 12/31/98 +7.84 +6.79
- --------------------------------------------------------------------------------
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
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
Robert A. DiMella, Vice President
Kenneth A. Jacob, Vice President
Robert D. Sneeden, Vice President
Donald C. Burke, Vice President and
Treasurer
Robert E. Putney, III, Secretary
- --------------------------------------------------------------------------------
Gerald M. Richard, Treasurer of Merrill Lynch Florida Municipal Bond Fund has
recently retired. His colleagues at Merrill Lynch Asset Management, L.P. join
the Fund's Board of Trustees in wishing Mr. Richard well in his retirement.
- --------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
4
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
SCHEDULE OF INVESTMENTS (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
- ------------------------------------------------------------------------------------------------------------------------------------
Florida--87.7%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AAA Aaa $ 1,095 Altamonte Springs, Florida, Health Facilities Authority, Hospital Revenue Bonds
(Adventist Health Systems--Sunbelt), 7% due 10/01/2014 (e) $ 1,385
- ------------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 1,000 Bay County, Florida, Sales Tax Revenue Refunding Bonds, 4.75% due 9/01/2023 (g) 969
- ------------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 4,140 Brevard County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT, 6.70% due 9/01/2027 (f) 4,445
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,375 Brevard County, Florida, Health Facilities Authority, Revenue Refunding Bonds
(Wuesthoff Memorial Hospital), Series B, 6.90% due 4/01/2002 (c)(e) 1,513
- ------------------------------------------------------------------------------------------------------------------------------------
Broward County, Florida, HFA, M/F Housing Revenue Refunding Bonds (Lakeside
Apartments Project) (d):
AAA NR* 1,100 6.90% due 8/01/2015 1,221
AAA NR* 1,100 7% due 2/01/2025 1,229
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,000 Celebration Community Development District, Florida (Special Assessment),
6% due 5/01/2010 (c) 4,416
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 7,650 Charlotte County, Florida, Health Care Facilities Revenue Bonds (Bon Secours Health
System), RIB, 8.42% due 8/26/2027 (g)(h) 8,797
- ------------------------------------------------------------------------------------------------------------------------------------
A+ A1 11,215 Citrus County, Florida, PCR, Refunding (Florida Power Corporation--Crystal River),
Series A, 6.625% due 1/01/2027 12,134
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,820 Collier County, Florida, School Board, COP, 5% due 2/15/2016 (g) 3,891
- ------------------------------------------------------------------------------------------------------------------------------------
Dade County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT (f):
NR* Aaa 160 Series B, 7.25% due 9/01/2023 (d) 168
NR* Aaa 2,930 Series C, 7.75% due 9/01/2022 (k) 3,063
- ------------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1+ 100 Dade County, Florida, IDA, Exempt Facilities, Revenue Refunding Bonds (Florida Power &
Light Co.), VRDN, 2.85% due 6/01/2021 (a) 100
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,560 Dade County, Florida, Water and Sewer System Revenue Bonds, 5.25% due 10/01/2026 (j) 3,662
- ------------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 12,000 Escambia County, Florida, HFA, S/F Mortgage Revenue Refunding Bonds, AMT (Multi-County
Program), 7% due 4/01/2028 (d)(f) 13,248
- ------------------------------------------------------------------------------------------------------------------------------------
Escambia County, Florida, PCR (Champion International Corporation Project):
BBB Baa1 11,620 AMT, 6.90% due 8/01/2022 12,813
BBB Baa1 2,500 Refunding, 6.95% due 11/01/2007 2,704
- ------------------------------------------------------------------------------------------------------------------------------------
A1 VMIG1+ 1,100 Escambia County, Florida, PCR, Refunding (Gulf Power Company Project), VRDN,
2.80% due 7/01/2022 (a) 1,100
- ------------------------------------------------------------------------------------------------------------------------------------
</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
DATES Daily Adjustable Tax-Exempt Securities
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITES Residual Interest Tax-Exempt Securities
S/F Single-Family
VRDN Variable Rate Demand Notes
5
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
- ------------------------------------------------------------------------------------------------------------------------------------
Florida (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NR* Aaa $ 1,285 Florida HFA, Home Ownership Revenue Refunding Bonds, AMT, Series G-1,
7.90% due 3/01/2022 (f) $ 1,359
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 10,420 Florida HFA (Maitland Club Apartments), AMT, Series B-1, 7% due 2/01/2035 (b) 11,524
- ------------------------------------------------------------------------------------------------------------------------------------
Florida State Board of Education, Capital Outlay Public Education, GO (c):
AAA Aaa 11,515 Series B, 4.50% due 6/01/2028 10,784
AAA Aaa 1,000 Series C, 5.60% due 6/01/2020 1,054
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,690 Florida State Board Regents, University System Improvement Revenue Bonds,
4.50% due 7/01/2023 (b) 3,476
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,885 Florida State Mid-Bay Bridge Authority Revenue Bonds, Series A, 5.50%** due 10/01/2026 (b) 691
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 7,395 Florida State Turnpike Authority, Turnpike Revenue Bonds, Department of Transportation,
Series A, 4.50% due 7/01/2027 (j) 6,932
- ------------------------------------------------------------------------------------------------------------------------------------
AA Aa3 2,250 Hillsborough County, Florida, IDA, PCR, Refunding (Tampa
Electric Company Project), Series 91, 7.875% due 8/01/2021 2,523
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,500 Hillsborough County, Florida, School Board, COP, Revenue Refunding Bonds (Master
Lease Program), Series A, 5% due 7/01/2023 (c) 2,506
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,750 Hillsborough County, Florida, Utility Revenue Refunding Bonds, Series B,
6.50% due 8/01/2016 (c) 2,981
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 8,570 Jacksonville, Florida, Capital Improvement Revenue Refunding Bonds (Stadium Project),
4.75% due 10/01/2025 (b) 8,305
- ------------------------------------------------------------------------------------------------------------------------------------
Leesburg, Florida, Hospital Revenue Refunding Bonds (Leesburg Regional Medical
Center Project):
A- A3 6,110 Series A, 6.125% due 7/01/2018 6,550
A- A3 1,515 Series B, 5.625% due 7/01/2013 1,591
- ------------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1+ 200 Martin County, Florida, PCR, Refunding (Florida Power & Light Co. Project), VRDN,
2.80% due 9/01/2024 (a) 200
- ------------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 4,075 Miami--Dade County, Florida, Public Service Revenue Bonds, 5% due 10/01/2023 (g) 4,086
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 6,875 Miami--Dade County, Florida, School Board, COP, Series B, 4.875% due 8/01/2027 (b) 6,745
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 5,000 Miami--Dade County, Florida, Special Obligation Revenue Bonds, Sub-Series B,
5% due 10/01/2037 (c) 5,008
- ------------------------------------------------------------------------------------------------------------------------------------
Miami--Dade County, Florida, Special Obligation, Revenue Refunding Bonds,
Sub-Series A (c):
AAA Aaa 10,000 5.46%** due 10/01/2018 3,667
AAA Aaa 24,385 5.59%** due 10/01/2023 6,690
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,000 Ocoee, Florida, Capital Improvement, Revenue Refunding Bonds, 4.75% due 10/01/2028 (g) 962
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
- ------------------------------------------------------------------------------------------------------------------------------------
Florida (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Orlando and Orange County Expressway Authority, Florida, Expressway Revenue Refunding
Bonds (Junior Lien) (j):
AAA Aaa $10,000 5% due 7/01/2021 $ 10,026
AAA Aaa 5,000 5% due 7/01/2028 5,013
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,080 Pasco County, Florida, Health Facilities Authority, Revenue Refunding Bonds
(Gross Adventist Health System--Sunbelt), 7% due 10/01/2014 (e) 2,640
- ------------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1+ 4,900 Pinellas County, Florida, Health Facilities Authority, Revenue Refunding Bonds,
Pooled Hospital Loan Program, DATES, 3.25% due 12/01/2015 (a) 4,900
- ------------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1+ 4,000 Saint Lucie County, Florida, PCR, Refunding (Florida Power & Light Co. Project), VRDN,
3.20% due 3/01/2027 (a) 4,000
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,250 Saint Petersburg, Florida, Health Facilities Authority Revenue Bonds (Allegheny
Health System), Series A, 7% due 12/01/2001 (c)(i) 3,629
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 Sarasota County, Florida, Public Hospital Board, Revenue Refunding Bonds (Sarasota
Memorial Hospital), Series B, 5.25% due 7/01/2024 (c) 2,110
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 5,600 South Broward, Florida, Hospital District Revenue Bonds, 6.611% due 5/01/2001 (b)(i) 6,082
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 10,000 Tampa Bay, Florida, Water Utility System, Revenue Refunding Bonds, Series A,
4.75% due 10/01/2027 (j) 9,680
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,475 Tampa, Florida, Allegheny Health System, Revenue Bonds (Saint Joseph),
6.75% due 12/01/2001 (c)(i) 1,637
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,640 Village Center Community Development District, Florida, Recreational Revenue
Refunding Bonds, Series A, 4.75% due 11/01/2022 (c) 3,534
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico--8.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico Commonwealth Highway and Transportation Authority, Highway
Revenue Refunding Bonds, RITES, Series X (h):
A1+ Baa1 7,600 6.658% due 7/01/2004 8,588
A1+ Baa1 10,000 6.758% due 7/01/2005 11,287
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost--$222,181)--95.7% 237,618
Other Assets Less Liabilities--4.3% 10,734
--------
Net Assets--100.0% $248,352
========
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(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,
1999.
(b) AMBAC Insured.
(c) MBIA Insured.
(d) FNMA Collateralized.
(e) Escrowed to maturity.
(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, 1999.
(i) Prerefunded.
(j) FGIC Insured.
(k) FHA Insured.
* Not Rated.
** Represents a zero coupon bond; the interest rate shown is the effective
yield at the time of purchase by the Fund.
+ Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
7
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
FINANCIAL INFORMATION
Statement of Assets and Liabilities as of January 31, 1999
<TABLE>
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$222,180,886) (Note 1a) ............. $237,618,154
Cash ........................................................................ 28,254
Receivables:
Securities sold ........................................................... $ 11,781,841
Interest .................................................................. 3,261,316
Beneficial interest sold .................................................. 544,075 15,587,232
------------
Prepaid registration fees and other assets (Note 1e) ........................ 5,507
------------
Total assets ................................................................ 253,239,147
------------
- -------------------------------------------------------------------------------------------------------------------------------
Liabilities: Payables:
Securities purchased ...................................................... 3,979,146
Beneficial interest redeemed .............................................. 486,851
Dividends to shareholders (Note 1f) ....................................... 175,834
Investment adviser (Note 2) ............................................... 104,084
Distributor (Note 2) ...................................................... 66,630 4,812,545
------------
Accrued expenses and other liabilities ...................................... 74,494
------------
Total liabilities ........................................................... 4,887,039
------------
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets: Net assets .................................................................. $248,352,108
============
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets Class A Shares of beneficial interest, $.10 par value, unlimited number of
Consist of: shares authorized ........................................................... $ 412,789
Class B Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ........................................................... 1,443,058
Class C Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ........................................................... 110,443
Class D Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ........................................................... 379,260
Paid-in capital in excess of par ............................................ 243,131,137
Accumulated realized capital losses on investments--net (Note 5) ............ (11,779,033)
Accumulated distributions in excess of realized capital gains on
investments--net (Note 1f) .................................................. (782,814)
Unrealized appreciation on investments--net ................................. 15,437,268
------------
Net assets .................................................................. $248,352,108
============
- -------------------------------------------------------------------------------------------------------------------------------
Net Asset Value: Class A--Based on net assets of $43,723,033 and 4,127,891 shares
of beneficial interest outstanding .......................................... $ 10.59
============
Class B--Based on net assets of $152,848,305 and 14,430,578 shares
of beneficial interest outstanding .......................................... $ 10.59
============
Class C--Based on net assets of $11,678,077 and 1,104,433 shares
of beneficial interest outstanding .......................................... $ 10.57
============
Class D--Based on net assets of $40,102,693 and 3,792,601 shares
of beneficial interest outstanding .......................................... $ 10.57
============
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
FINANCIAL INFORMATION (continued)
Statement of Operations
<TABLE>
<CAPTION>
For the Six Months Ended
January 31, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income Interest and amortization of premium and discount earned .............. $ 6,385,922
(Note 1d):
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses: Investment advisory fees (Note 2) ..................................... $ 636,302
Account maintenance and distribution fees--Class B (Note 2) ........... 371,511
Accounting services (Note 2) .......................................... 71,271
Printing and shareholder reports ...................................... 43,818
Professional fees ..................................................... 43,187
Account maintenance and distribution fees--Class C (Note 2) ........... 29,614
Transfer agent fees--Class B (Note 2) ................................. 24,539
Account maintenance fees--Class D (Note 2) ............................ 14,637
Custodian fees ........................................................ 6,461
Trustees' fees and expenses ........................................... 5,719
Transfer agent fees--Class A (Note 2) ................................. 5,667
Transfer agent fees--Class D (Note 2) ................................. 3,896
Pricing fees .......................................................... 3,426
Transfer agent fees--Class C (Note 2) ................................. 1,607
Registration fees (Note 1e) ........................................... 934
Other ................................................................. 1,862
------------
Total expenses ........................................................ 1,264,451
------------
Investment income--net ................................................ 5,121,471
------------
- -----------------------------------------------------------------------------------------------------------------------------------
Realized & Realized gain on investments--net ..................................... 2,211,591
Unrealized Gain on Change in unrealized appreciation on investments--net ................. 1,769,250
Investments--Net ------------
(Notes 1b, 1d & 3): Net Increase in Net Assets Resulting from Operations .................. $ 9,102,312
============
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
January 31, July 31,
Increase (Decrease) in Net Assets: 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations: Investment income--net ................................................ $ 5,121,471 $ 10,551,320
Realized gain on investments--net ..................................... 2,211,591 3,911,295
Change in unrealized appreciation on investments--net ................. 1,769,250 (3,082,526)
------------ ------------
Net increase in net assets resulting from operations .................. 9,102,312 11,380,089
------------ ------------
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends to Investment income--net:
Shareholders Class A ............................................................. (1,046,974) (2,285,733)
(Note 1f): Class B ............................................................. (3,182,198) (6,855,902)
Class C ............................................................. (206,587) (325,426)
Class D ............................................................. (685,712) (1,084,259)
------------ ------------
Net decrease in net assets resulting from dividends to shareholders ... (5,121,471) (10,551,320)
------------ ------------
- -----------------------------------------------------------------------------------------------------------------------------------
Beneficial Interest Net increase (decrease) in net assets derived from beneficial
Transactions interest transactions ................................................. 23,534,233 (13,639,151)
(Note 4): ------------ ------------
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets: Total increase (decrease) in net assets ............................... 27,515,074 (12,810,382)
Beginning of period ................................................... 220,837,034 233,647,416
------------ ------------
End of period ......................................................... $248,352,108 $220,837,034
============ ============
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
FINANCIAL INFORMATION (continued)
Financial Highlights
<TABLE>
<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 For the Year Ended July 31,
Jan. 31, ---------------------------------------------
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period ....... $ 10.41 $ 10.37 $ 9.94 $ 9.86 $ 9.88
Operating ------- ------- ------- ------- -------
Performance: Investment income--net ..................... .25 .53 .53 .53 .53
Realized and unrealized gain (loss) on
investments--net ........................... .18 .04 .43 .08 (.02)
------- ------- ------- ------- -------
Total from investment operations ........... .43 .57 .96 .61 .51
------- ------- ------- ------- -------
Less dividends from investment income--net . (.25) (.53) (.53) (.53) (.53)
------- ------- ------- ------- -------
Net asset value, end of period ............. $ 10.59 $ 10.41 $ 10.37 $ 9.94 $ 9.86
======= ======= ======= ======= =======
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investment Based on net asset value per share ......... 4.19%+ 5.61% 9.99% 6.30% 5.47%
Return:** ======= ======= ======= ======= =======
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Expenses ................................... .73%* .69% .69% .68% .70%
Net Assets: ======= ======= ======= ======= =======
Investment income--net ..................... 4.80%* 5.06% 5.31% 5.30% 5.54%
======= ======= ======= ======= =======
- ----------------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) ... $43,723 $44,173 $47,598 $46,765 $51,805
Data: ======= ======= ======= ======= =======
Portfolio turnover ......................... 48.98% 101.75% 84.69% 162.83% 178.62%
======= ======= ======= ======= =======
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
** Total investment returns exclude the effects of
sales loads.
+ Aggregate total investment return.
See Notes to Financial Statements.
10
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
FINANCIAL INFORMATION (continued)
Financial Highlights (continued)
<TABLE>
<CAPTION>
Class B
------------------------------------------------------------
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended For the Year Ended July 31,
Jan. 31, ---------------------------------------------
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period ...... $ 10.41 $ 10.37 $ 9.94 $ 9.86 $ 9.88
Operating ------- ------- ------- ------- -------
Performance: Investment income--net .................... .23 .47 .48 .48 .49
Realized and unrealized gain (loss) on
investments--net .......................... .18 .04 .43 .08 (.02)
------- ------- ------- ------- -------
Total from investment operations .......... .41 .51 .91 .56 .47
------- ------- ------- ------- -------
Less dividends from investment income--net (.23) (.47) (.48) (.48) (.49)
------- ------- ------- ------- -------
Net asset value, end of period ............ $ 10.59 $ 10.41 $ 10.37 $ 9.94 $ 9.86
======= ======= ======= ======= =======
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investment Based on net asset value per share ........ 3.92%+ 5.07% 9.43% 5.76% 4.93%
Return:** ======== ======== ======== ======== ========
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Expenses .................................. 1.24%* 1.20% 1.20% 1.18% 1.21%
Net Assets: ======== ======== ======== ======== ========
Investment income--net .................... 4.28%* 4.55% 4.80% 4.79% 5.03%
======== ======== ======== ======== ========
- ----------------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) .. $152,848 $143,496 $160,562 $195,097 $205,362
Data: ======== ======== ======== ======== ========
Portfolio turnover ........................ 48.98% 101.75% 84.69% 162.83% 178.62%
======== ======== ======== ======== ========
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
** Total investment returns exclude the effects of
sales loads.
+ Aggregate total investment return.
See Notes to Financial Statements.
11
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
FINANCIAL INFORMATION (concluded)
Financial Highlights (concluded)
<TABLE>
<CAPTION>
Class C
-----------------------------------------------------------
For the For the Period
The following per share data and ratios have been derived Six Months Oct. 21,
from information provided in the financial statements. Ended For the Year Ended July 31, 1994+ to
Jan. 31, -------------------------------- July 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period ....... $ 10.39 $ 10.35 $ 9.92 $ 9.85 $ 9.48
Operating ------- ------- ------- ------- -------
Performance: Investment income--net ..................... .22 .46 .47 .47 .37
Realized and unrealized gain on
investments--net ........................... .18 .04 .43 .07 .37
------- ------- ------- ------- -------
Total from investment operations ........... .40 .50 .90 .54 .74
------- ------- ------- ------- -------
Less dividends from investment
income--net ................................ (.22) (.46) (.47) (.47) (.37)
------- ------- ------- ------- -------
Net asset value, end of period ............. $ 10.57 $ 10.39 $ 10.35 $ 9.92 $ 9.85
======= ======= ======= ======= =======
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investment Based on net asset value per share ......... 3.88%++ 4.97% 9.33% 5.54% 7.92%++
Return:** ======= ======= ======= ======= =======
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Expenses ................................... 1.34%* 1.30% 1.30% 1.28% 1.33%*
Net Assets: ======= ======= ======= ======= =======
Investment income--net ..................... 4.19%* 4.44% 4.70% 4.70% 4.84%*
======= ======= ======= ======= =======
- ---------------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) ... $11,678 $ 8,900 $ 5,976 $ 5,738 $ 1,954
Data: ======= ======= ======= ======= =======
Portfolio turnover ......................... 48.98% 101.75% 84.69% 162.83% 178.62%
======= ======= ======= ======= =======
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Class D
-----------------------------------------------------------
For the For the Period
The following per share data and ratios have been derived Six Months Oct. 21,
from information provided in the financial statements. Ended For the Year Ended July 31, 1994+ to
Jan. 31, -------------------------------- July 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period ....... $ 10.39 $ 10.35 $ 9.92 $ 9.85 $ 9.48
Operating ------- ------- ------- ------- -------
Performance: Investment income--net ..................... .25 .52 .52 .52 .40
Realized and unrealized gain on
investments--net ........................... .18 .04 .43 .07 .37
------- ------- ------- ------- -------
Total from investment operations ........... .43 .56 .95 .59 .77
------- ------- ------- ------- -------
Less dividends from investment
income--net ................................ (.25) (.52) (.52) (.52) (.40)
------- ------- ------- ------- -------
Net asset value, end of period ............. $ 10.57 $ 10.39 $ 10.35 $ 9.92 $ 9.85
======= ======= ======= ======= =======
- ---------------------------------------------------------------------------------------------------------------------------------
Total Investment Based on net asset value per share ......... 4.14%++ 5.51% 9.89% 6.09% 8.34%++
Return:** ======= ======= ======= ======= =======
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Expenses ................................... .83%* .79% .79% .78% .81%*
Net Assets: ======= ======= ======= ======= =======
Investment income--net ..................... 4.68%* 4.95% 5.21% 5.20% 5.39%*
======= ======= ======= ======= =======
- ---------------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) ... $40,103 $24,268 $19,511 $15,231 $ 9,179
Data: ======= ======= ======= ======= =======
Portfolio turnover ......................... 48.98% 101.75% 84.69% 162.83% 178.62%
======= ======= ======= ======= =======
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
** Total investment returns exclude the effects of
sales loads.
+ Commencement of operations.
++ Aggregate total investment return.
See Notes to Financial Statements.
12
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Florida Municipal Bond Fund (the "Fund") is part of Merrill Lynch
Multi-State Municipal Series Trust (the "Trust"). The Fund is registered under
the Investment Company Act of 1940 as a non-diversified, open-end management
investment company. The Fund's financial statements are prepared in accordance
with generally accepted accounting principles which may require the use of
management accruals and estimates. 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 Pricingsm 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.
o Financial futures contracts--The Fund may purchase or sell financial 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.
13
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
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. Distributions in excess of realized capital gains are due
primarily to differing tax treatments for post-October losses.
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 ("MLFD" or "Distributor"), a division of Princeton Funds
Distributor, Inc. ("PFD"), which is a wholly-owned subsidiary of Merrill Lynch
Group, Inc.
FAM is responsible for the management of the Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Fund. For such services, the Fund pays a monthly fee
based upon the average daily value of the Fund's net assets at the following
annual rates: 0.55% of the Fund's average daily net assets not exceeding $500
million; 0.525% of average daily net assets in excess of $500 million but not
exceeding $1 billion; and 0.50% of average daily net assets in excess of $1
billion.
Pursuant to the Distribution Plans 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 Incorporated ("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, 1999, 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 ............................................ $283 $ 3,446
Class D ............................................ $240 $65,131
- --------------------------------------------------------------------------------
For the six months ended January 31, 1999, MLPF&S received contingent deferred
sales charges of $53,608 and $302 relating to transactions in Class B and Class
C Shares, respectively.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is
the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or directors of
FAM, PSI, FDS, PFD, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the six
months ended January 31, 1999 were $119,383,095 and $111,272,047, respectively.
Net realized gains for the six months ended January 31, 1999 and net unrealized
gains as of January 31, 1999 were as follows:
- --------------------------------------------------------------------------------
Realized Unrealized
Gains Gains
- --------------------------------------------------------------------------------
Long-term investments ...................... $2,211,591 $15,437,268
---------- -----------
Total ...................................... $2,211,591 $15,437,268
========== ===========
- --------------------------------------------------------------------------------
As of January 31, 1999, net unrealized appreciation for Federal income tax
purposes aggregated $15,437,268, all of which related to appreciated securities.
The aggregate cost of investments at January 31, 1999 for Federal income tax
purposes was $222,180,886.
14
<PAGE>
Merrill Lynch Florida Municipal Bond Fund January 31, 1999
4. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from beneficial interest
transactions was $23,534,233 and $(13,639,151) for the six months ended January
31, 1999 and for the year ended July 31, 1998, respectively.
Transactions in shares of beneficial interest for each class were as follows:
- -------------------------------------------------------------------------------
Class A Shares for the Six Months Dollar
Ended January 31, 1999 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ..................... 340,411 $ 3,590,890
Shares issued to shareholders
in reinvestment of dividends .... 47,438 499,175
---------- ------------
Total issued .................... 387,849 4,090,065
Shares redeemed ................. (503,898) (5,300,486)
---------- ------------
Net decrease .................... (116,049) $ (1,210,421)
========== ============
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended July 31, 1998 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................... 648,986 $ 6,738,638
Shares issued to shareholders
in reinvestment of dividends ... 102,167 1,060,119
---------- ------------
Total issued ................... 751,153 7,798,757
Shares redeemed ................ (1,098,382) (11,394,663)
---------- ------------
Net decrease ................... (347,229) $ (3,595,906)
========== ============
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class B Shares for the Six Months Dollar
Ended January 31, 1999 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................... 1,825,919 $ 19,238,422
Shares issued to shareholders
in reinvestment of dividends ... 112,595 1,184,827
---------- ------------
Total issued ................... 1,938,514 20,423,249
Automatic conversion
of shares ...................... (7,137) (74,623)
Shares redeemed ................ (1,287,676) (13,545,291)
---------- ------------
Net increase ................... 643,701 $ 6,803,335
========== ============
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class B Shares for the Year Dollar
Ended July 31, 1998 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................... 1,857,210 $ 19,281,640
Shares issued to shareholders
in reinvestment of dividends ... 241,773 2,508,474
---------- ------------
Total issued ................... 2,098,983 21,790,114
Automatic conversion
of shares ...................... (44,185) (459,536)
Shares redeemed ................ (3,756,113) (38,946,230)
---------- ------------
Net decrease ................... (1,701,315) $(17,615,652)
========== ============
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class C Shares for the Six Months Dollar
Ended January 31, 1999 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ..................... 301,333 $ 3,171,915
Shares issued to shareholders
in reinvestment of dividends .... 10,230 107,457
---------- ------------
Total issued .................... 311,563 3,279,372
Shares redeemed ................. (63,665) (669,196)
---------- ------------
Net increase .................... 247,898 $ 2,610,176
========== ============
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class C Shares for the Year Dollar
Ended July 31, 1998 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ..................... 367,401 $ 3,807,777
Shares issued to shareholders
in reinvestment of dividends .... 17,062 176,743
---------- ------------
Total issued .................... 384,463 3,984,520
Shares redeemed ................. (105,334) (1,094,008)
---------- ------------
Net increase .................... 279,129 $ 2,890,512
========== ============
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class D Shares for the Six Months Dollar
Ended January 31, 1999 Shares Amount
- -------------------------------------------------------------------------------
Shares sold .................... 2,114,278 $ 22,211,213
Automatic conversion
of shares ...................... 7,146 74,623
Shares issued to shareholders
in reinvestment of dividends ... 26,372 277,033
---------- ------------
Total issued ................... 2,147,796 22,562,869
Shares redeemed ................ (690,623) (7,231,726)
---------- ------------
Net increase ................... 1,457,173 $ 15,331,143
========== ============
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Class D Shares for the Year Dollar
Ended July 31, 1998 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ..................... 762,178 $ 7,918,934
Automatic conversion
of shares ....................... 44,259 459,536
Shares issued to shareholders
in reinvestment of dividends .... 43,073 446,045
---------- ------------
Total issued .................... 849,510 8,824,515
Shares redeemed ................. (399,214) (4,142,620)
---------- ------------
Net increase .................... 450,296 $ 4,681,895
========== ============
- -------------------------------------------------------------------------------
5. Capital Loss Carryforward:
At July 31, 1998, the Fund had a capital loss carryforward of approximately
$12,540,000, of which $10,264,000 expires in 2003 and $2,276,000 expires in
2004. This amount will be available to offset like amounts of any future taxable
gains.
15
<PAGE>
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 #16031--1/99
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