Securities and Exchange Commission
Washington, DC 20549
Rule 23c-2 Notice of Intention to
Redeem Securities
of
Merrill Lynch Municipal Strategy Fund, Inc.
800 Scudders Mill Road
Plainsboro, NJ 08536
under the
Investment Company Act of 1940
Securities Act File No. 33-64311
Investment Company Act File No. 811-7203
(1) Title of the class of securities to be redeemed:
Auction Market Preferred Stock, Series A, par value of $.10 per
share, liquidation preference of $25,000 per share (the "Series A
AMPS").
(2) Date on which the securities may be called or redeemed: March 14, 2000.
On January 18, 2000, Merrill Lynch Municipal Strategy Fund, Inc.
(the "Fund") will commence a tender offer for 2,000,000 shares of
its common stock (the "Tender Offer"). The Tender Offer will
terminate on February 14, 2000, unless extended. As required by the
Fund's Articles Supplementary (the "Articles Supplementary"), at the
conclusion of such tender offer, the Fund may be required to redeem
shares of its Series A AMPS in order to comply with asset coverage
tests required under the Investment Company Act of 1940, as amended,
and by rating agencies, each as detailed in the Articles
Supplementary (collectively, the "Asset Coverage Tests"). If Series
A AMPS must be redeemed, the Series A AMPS will be called for
redemption pursuant to a notice mailed to each holder of Series A
AMPS to be redeemed and published in The Wall Street Journal on or
about February 20, 2000. On such date the Fund will deposit with The
Bank of New York, the auction agent for the Series A AMPS (the
"Auction Agent"), cash or securities at least equal to the
redemption payment for the Series A AMPS to be redeemed along with
irrevocable instructions and authority to pay the redemption price
to the holders of such Series A AMPS in accordance with the Articles
Supplementary. Alternatively, the Fund may establish a segregated
account for the benefit of the Auction Agent with its custodian bank
consisting of cash or securities at least equal to the redemption
payment in accordance with the Articles Supplementary. Payment to
the holders of redeemed Series A AMPS will occur on or about March
14, 2000. Pursuant to Section 4(c) of the Articles Supplementary, on
the date of the irrevocable deposit of the redemption payment with
the Auction Agent, or the establishment of the segregated account
with the Fund's custodian, the Series A AMPS relating to such
deposit will no longer be deemed outstanding.
(3) Applicable provisions of the governing instrument pursuant to which the
securities are to be redeemed:
The Series A AMPS are to be redeemed in accordance with Section 4 of
the Articles Supplementary, which document is filed as Exhibit A to
this notice and is incorporated herein by reference.
(4) The principal amount or number of shares and the basis upon which the
securities to be redeemed are to be selected:
As described above, the Fund will redeem, in whole or in part, such
number of Series A AMPS outstanding so as to comply with the Asset
Coverage Tests. The actual number of Series A AMPS cannot currently
be determined as such number is a function of the net asset value of
the common stock at the time of redemption and the number of shares
of common stock tendered in the Tender Offer.
Any Series A AMPS redeemed will be redeemed in accordance with
Section 4 of the Articles Supplementary, which provides that in the
event that less than all the outstanding Series A AMPS are to be
redeemed and there is more than one holder of such shares, the
shares to be redeemed shall be selected by lot or such other method
as the Fund may deem fair and equitable.
<PAGE>
Signature
Pursuant to the requirements of Rule 23c-2, Merrill Lynch Municipal
Strategy Fund, Inc. has duly caused this Notice of Intention to Redeem
Securities pursuant to Rule 23c-2 under the Investment Company Act of 1940 to
be signed on its behalf by the undersigned thereunto duly authorized in the
City of Plainsboro and the State of New Jersey on this 12 day of January 2000.
MERRILL LYNCH MUNICIPAL
STRATEGY FUND, INC.
By: /s/
-----------------------------------
Name: Terry K. Glenn
Title: President
