MERRILL LYNCH CONN MUNI BD FD OF M L MULTI ST MUNI SER TR
N-30B-2, 1994-12-12
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MERRILL LYNCH CONNECTICUT
MUNICIPAL BOND FUND






Quarterly Report   October 31, 1994




TO OUR SHAREHOLDERS


Concerns of increasing inflationary pressures continued to prompt
volatility in the US stock and bond markets during the October
quarter. In addition, the weakness of the US dollar in foreign
exchange markets prolonged stock and bond market declines. Early in
the period, the possibility of continued monetary policy tightening
by the Federal Reserve Board was predominant in the minds of
investors. However, a lower-than-expected rate of growth reported
for the US economy during the second calendar quarter allayed
inflationary concerns to some degree, despite the fifth increase
this year in short-term interest rates made by the central bank in
mid-August.

Inflationary expectations surfaced again with the announcement of
significant upward revisions in industrial production and capacity
utilization for the May--July period. When the central bank did not
raise short-term interest rates at the late September Federal Open
Market Committee meeting, financial markets rallied on the
expectation that the US economy was not overheating and therefore
significant further monetary policy tightening would not be
necessary. Also encouraging were reports that consumer spending is
increasing at a lower rate than has been the case in recent economic
recoveries. Nevertheless, shortly after the conclusion of the
October quarter, investor sentiment had again deteriorated. The
report of better-than-expected growth in the gross domestic product
for the three months ended September 30, combined with evidence of a
still-robust manufacturing sector and renewed US dollar weakness,
all rekindled concerns that short-term interest rates would soon
resume their upward trend.
<PAGE>
In the weeks ahead, investors will continue to assess economic data
and inflationary trends in order to gauge whether further increases
in short-term interest rates are imminent. Continued indications of
moderate and sustainable levels of economic growth would be positive
for the US capital markets.

The Municipal Market
The long-term tax-exempt market continued to erode throughout the
three months ended October 31, 1994. As measured by the Bond Buyer
Revenue Bond Index, yields on A-rated municipal revenue bonds
maturing in 30 years rose by almost 50 basis points (0.50%) to 6.95%
during the October 31, 1994 quarter. This represents the highest
level in tax-exempt bond yields in over two years. US Treasury bonds
suffered even greater declines during the quarter as Treasury bond
yields rose approximately 60 basis points to end the quarter at
8.00%.

The tax-exempt bond market reacted negatively throughout the October
quarter to indications that, despite a series of interest rate
increases by the Federal Reserve Board, the strength of the domestic
economy seen in recent quarters has not yet been significantly
reduced. While inflationary pressures have remained well contained,
additional Federal Reserve Board actions have been expected both to
ensure that domestic economic growth is eventually confined to
current levels and to assure nervous financial markets of its
anti-inflationary intentions.

Fortunately, while the demand for tax-exempt bonds has declined
somewhat in recent months, new bond issuance has remained greatly
reduced. During the quarter ended October 31, 1994, only $32 billion
in long-term tax-exempt securities were issued, a decline of over
50% versus the October 31, 1993 quarter. Similarly, for the six
months ended October 31, 1994, only $75 billion in municipal
securities were underwritten, a decline of over 50% versus the
comparable period a year earlier. This reduction in issuance in
recent quarters has allowed the municipal bond market to react to
both the decline in investor demand and the rise in fixed-income
yields in a more orderly fashion than in similar situations in the
past, particularly during 1987.

Long-term tax-exempt revenue bonds currently yield approximately 7%,
or almost 11.5% on an after-tax equivalent basis, to an investor in
the 39.6% Federal income tax bracket. As inflation has only
marginally increased in the past year, real tax-exempt interest
rates have risen dramatically. The Federal Reserve Board appears
committed to maintaining inflation at or below its current levels.
Indeed, most forecasts expect inflation to remain in its present
range of 3%--4% throughout 1995 and, potentially, for the remainder
of the 1990s. Real after-tax equivalent interest rates exceeding 7%
represent historically attractive municipal investments for
long-term investors.
<PAGE>
Federal Reserve Board actions taken thus far have yet to fully
impact US domestic growth and expected additional actions should
promote only a modest economic expansion within a benign
inflationary context beginning sometime early in 1995. Within such
an environment, it is unlikely that tax-exempt interest rates will
remain at their current attractive levels. Tax-exempt bond issuance
is unlikely to return to the historic high levels seen in 1992 and
1993, while investor demand should return as markets stabilize. As
we have discussed in earlier reports, the total number of tax-exempt
bonds outstanding is scheduled to decline dramatically in 1994 and
1995 as a result of both regular bond maturities and early
redemptions. Investors seeking tax-advantaged issues are likely to
find it very difficult to obtain currently available tax-exempt
yields as the current supply/demand balance is unlikely to be
maintained in the coming quarters.

Portfolio Strategy
In our last shareholder report, we spoke about our cautious market
outlook, a view which we still hold. Economic growth and fears of
rising inflation continue to push bond yields higher. The broad
trading band that we experienced last quarter has collapsed, causing
the bellwether 30-year US Treasury bond to yield in excess of 8%.
The municipal bond market has followed this course to higher yields.
Our portfolio strategy is to remain defensive until such a time that
the municipal bond market stabilizes. We have allowed the Fund's
cash reserves to rise to 20% of net assets at times during the
quarter. Connecticut's new-issue supply volume has decreased by a
dramatic 60% this October quarter versus the same quarter last year.
Because of our large cash reserves, we are in a good position to
take advantage of larger coupon, higher-yielding new-issue
securities should such opportunities present themselves. Because of
this strategy, we have chosen to emphasize quality securities with
85% of the portfolio rated A or better by one of the major rating
agencies. Looking forward, while we will remain cautious, we will
continue to invest cash inflows in high-quality, attractively priced
securities that we expect to yield attractive amounts of tax-exempt
income.

We appreciate your ongoing interest in Merrill Lynch Connecticut
Municipal Bond Fund, and we look forward to assisting you with your
financial needs in the months and years ahead.

Sincerely,


(Arthur Zeikel)
Arthur Zeikel
President


(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager


November 21, 1994
<PAGE>


PORTFOLIO COMPOSITION


For the Quarter Ended October 31, 1994

Distribution by Market Sector*

Other Revenue Bonds                           67.4%
General Obligation & Tax Revenue Bonds        29.9
Utility Revenue Bonds                          2.7
                                             ------
Total                                        100.0%
                                             ======

Net assets as of October 31, 1994 were $31,066,259.


[FN]
 *Based on total market value of the portfolio as of October 31, 1994.
++Temporary investments in short-term municipal securities.


Quality Ratings*

GRAPHIC MATERIAL APPEARS HERE.
SEE APPENDIX GRAPHIC AND IMAGE MATERIAL ITEM 1.


PERFORMANCE DATA


About Fund Performance

Since October 21, 1994, investors have been able to purchase shares
of the Fund through the Merrill Lynch Select Pricing SM System, which
offers four pricing alternatives:

* Class A Shares incur a maximum initial sales charge (front-end
  load) of 4.00% and bear no ongoing distribution or account
  maintenance fees. Class A Shares are available only to eligible
  investors.
<PAGE>
* Class B Shares are subject to a maximum contingent deferred sales
  charge of 4.00% if redeemed during the first year, decreasing 1.00%
  each year thereafter to 0.00% 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 10 years.

* Class C Shares are subject to a distribution fee of 0.35% and an
  account maintenance fee of 0.25%. In addition, Class C Shares are
  subject to a 1.00% contingent deferred sales charge if redeemed
  within one year of purchase.

* Class D Shares incur a maximum initial sales charge of 4.00% and
  an account maintenance fee of 0.10% (but no distribution fee).

The performance data for the Fund's Class A and Class B Shares are
presented in the "Aggregate Total Return" tables below. Data for all
of the Fund's shares, including Class C and Class D Shares, are
presented in the "Recent Performance Results" table. The "Recent
Performance Results" table below shows investment results before the
deduction of any sales charges for Class A and Class B Shares for
the since inception (July 1, 1994) and 3-month periods ended October
31, 1994 and for Class C and Class D Shares for the period since
inception (October 21, 1994) through October 31, 1994. All data in
this table assume imposition of the actual total expenses incurred
by each class of shares during the relevant period.

None of the past results shown should be considered a representation
of future performance. Investment return and principal value of
shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.

<TABLE>
Recent Performance Results
<CAPTION>
                                                                                      Since Inception  3 Month
                                                      10/31/94    7/31/94++  7/1/94++    % Change++   % Change
<S>                                                     <C>        <C>        <C>          <C>          <C>
Class A Shares*                                         $9.67      $10.22     $10.00       -3.30%       -5.38%
Class B Shares*                                          9.67       10.22      10.00       -3.30        -5.38
Class C Shares*                                          9.68        9.82       --         -1.43         --
Class D Shares*                                          9.67        9.82       --         -1.53         --
Class A Shares--Total Return*                                                              -1.44(1)     -4.01(2)
Class B Shares--Total Return*                                                              -1.60(3)     -4.13(4)
Class C Shares--Total Return*                                                              -1.31(5)      --
Class D Shares--Total Return*                                                              -1.41(5)      --
Class A Shares--Standardized 30-day Yield                5.81%
Class B Shares--Standardized 30-day Yield                5.55%
<PAGE>
<FN>
  *Investment results shown do not reflect sales charges; results shown would be lower 
   if a sales charge was included.
 ++Class A and Class B Shares commenced operations on 7/1/94. Class C and Class D Shares 
   commenced operations on 10/21/94.
(1)Percent change includes reinvestment of $0.180 per share ordinary income dividends.
(2)Percent change includes reinvestment of $0.143 per share ordinary income dividends.
(3)Percent change includes reinvestment of $0.164 per share ordinary income dividends.
(4)Percent change includes reinvestment of $0.130 per share ordinary income dividends.
(5)Percent change includes reinvestment of $0.002 per share ordinary income dividends.
</TABLE>



Aggregate Total Return


                           % Return Without     % Return With
                             Sales Charge       Sales Charge**

Class A Shares*

Inception (7/1/94)
through 9/30/94                  +0.86%             -3.17%

[FN]
 *Maximum sales charge is 4%.
**Assuming maximum sales charge.


                               % Return           % Return
                             Without CDSC        With CDSC**
Class B Shares*

Inception (7/1/94)
through 9/30/94                  +0.74%             -3.24%

[FN]
 *Maximum contingent deferred sales charge is 4% and is reduced to 0%
  after 4 years.
**Assuming payment of applicable contingent deferred sales charge.




This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
<PAGE>





Officers and Trustees

Arthur Zeikel, President and Trustee
Kenneth S. Axelson, Trustee
Herbert I. London, Trustee
Robert R. Martin, Trustee
Joseph L. May, Trustee
Andre F. Perold, Trustee
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Jerry Weiss, Secretary


Custodian

State Street Bank and Trust Company
P.O. Box 351
Boston, Massachusetts 02101



Transfer Agent

Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 637-3863





Merrill Lynch Connecticut Municipal Bond Fund
Merrill Lynch Multi-State Municipal Series Trust
Box 9011
Princeton, New Jersey 08543-9011.
<PAGE>

APPENDIX GRAPHIC AND IMAGE MATERIAL.

ITEM 1:


Quality Ratings*

(Based on Nationally Recognized Rating Services)


A pie chart illustrating the following percentages:

AAA/Aaa       41%


AA/Aa         17%


A/A           27%


BBB/Baa        1%


Other++       14%


[FN]
 *Based on total market value of the portfolio as of October 31, 1994.
++Temporary investments in short-term municipal securities.



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