485BPOS 1 e28750_485bpos.htm FORM N-1A

As filed with the Securities and Exchange Commission on October 29, 2007

Securities Act File No. 2-57354

Investment Company Act File No. 811-02688

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A

	REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933		\|X\|

	Pre-Effective Amendment No.		\| \|
	Post-Effective Amendment No. 39		\|X\|
	and/or
	REGISTRATION STATEMENT UNDER THE
	INVESTMENT COMPANY ACT OF 1940		\|X\|
	Amendment No. 37		\|X\|
	(Check appropriate box or boxes)

BLACKROCK MUNICIPAL BOND FUND, INC.

(Exact Name of Registrant as Specified in Charter)

800 Scudders Mill Road, Plainsboro, New Jersey 08536

(Address of Principal Executive Office) (Zip Code)

Registrant’s Telephone Number, including Area Code 1-800-441-7762

Robert C. Doll, Jr.

BlackRock Municipal Bond Fund, Inc.

800 Scudders Mill Road, Plainsboro, New Jersey

Mailing Address: P.O. Box 9011, Princeton, New Jersey 08543-9011

(Name and Address of Agent for Service)

Copies to:

Counsel for the Company:		Howard Surloff, Esq.
Frank Bruno, Esq.		BlackRock Advisors, LLC
SIDLEY AUSTIN LLP		100 Bellevue Parkway
787 Seventh Avenue		Wilmington, Delaware 19809
New York, New York 10019-6018

It is proposed that this filing will become effective (check appropriate box)

|X| immediately upon filing pursuant to paragraph (b)

| | on (date) pursuant to paragraph (b)

| | 60 days after filing pursuant to paragraph (a)(1)

| | on (date) pursuant to paragraph (a)(1)

| | 75 days after filing pursuant to paragraph (a)(2)

| | on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

| |

This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

Title of Securities Being Registered: Shares of Common Stock.

BLACKROCK MUNICIPAL BOND FUND, INC.

Supplement Dated October 29, 2007
to the Statement of Additional Information dated October 29, 2007

The following changes are made to the Statement of Additional Information of BlackRock Municipal Bond Fund, Inc.

Section III. Information on Directors and Officers on p. I- is revised to insert the following:

Effective until November 1, 2007, when the Directors of the Fund elected by the Fund’s shareholders at the Annual Shareholders Meeting held on September 7, 2007 assume office, the Board of Directors of the Fund consists of the six individuals listed below, five of whom are not “interested persons” of the Fund as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”), (the “non-interested Directors”).

Biographical Information

Certain biographical and other information relating to the non-interested Directors is set forth below, including their year of birth, their principal occupation for at least the last five years, the length of time served, the total number of investment companies overseen in the complex of funds advised by the Investment Adviser or its affiliates (“BlackRock-advised funds”) and any public directorships.

Name, Address(a) and Birth Year of Director	Position(s) Held with the Fund	Term of Office(b) and Length of Time Served	Principal Occupation(s) During Past Five Years	Number of BlackRock-Advised Funds and Portfolios Overseen	Public Directorships
Ronald W. Forbes (1940)(c)	Director	Director since 2000	Professor Emeritus of Finance, School of Business, State University of New York at Albany since 2000 and Professor thereof from 1989 to 2000; International Consultant, Urban Institute, Washington, D.C. from 1995 to 1999.	46 registered investment companies consisting of 48 portfolios	None

Cynthia A. Montgomery (1952)	Director	Director since 2000	Professor, Harvard Business School since 1989; Associate Professor, J.L. Kellogg Graduate School of Management, Northwestern University from 1985 to 1989; Associate Professor, Graduate School of Business Administration, University of Michigan from 1979 to 1985; Director, Harvard Business School Publishing since 2005; Director, McLean Hospital since 2005.	46 registered investment companies consisting of 48 portfolios	Newell Rubbermaid, Inc. (manufacturing)

Jean Margo Reid (1945)	Director	Director since 2004	Self-employed consultant since 2001; Counsel of Alliance Capital Management (investment adviser) in 2000; General Counsel, Director and Secretary of Sanford C. Bernstein & Co., Inc. (investment adviser/broker-dealer) from 1997 to 2000; Secretary, Sanford C. Bernstein Fund, Inc. from 1994 to 2000; Director and Secretary of SCB, Inc. since 1998; Director and Secretary of SCB Partners, Inc. since 2000; and Director of Covenant House from 2001 to 2004.	46 registered investment companies consisting of 48 portfolios	None

Name, Address(a) and Birth Year of Director	Position(s) Held with the Fund	Term of Office(b) and Length of Time Served	Principal Occupation(s) During Past Five Years	Number of BlackRock-Advised Funds and Portfolios Overseen	Public Directorships
Roscoe S. Suddarth (1935)	Director	Director since 2000	President, Middle East Institute, from 1995 to 2001; Foreign Service Officer, United States Foreign Service, from 1961 to 1995 and Career Minister from 1989 to 1995; Deputy Inspector General, U.S. Department of State, from 1991 to 1994; U.S. Ambassador to the Hashemite Kingdom of Jordon from 1987 to 1990.	46 registered investment companies consisting of 48 portfolios	None

Richard R. West (1938)	Director	Director since 1992	Professor of Finance from 1984 to 1985. Dean from 1984 to 1993 and since 1995 Dean Emeritus of New York University’s Leonard N. Stern School of Business Administration.	46 registered investment companies consisting of 48 portfolios	Director, Bowne & Co., Inc. (financial printer); Director, Vornado Realty Trust (real estate company); Director, Alexander’s, Inc. (real estate company)

(a)

The address of each non-interested Director is P.O. Box 9095, Princeton New Jersey 08543-9095.

(b)

Each Director serves until his or her successor is elected and qualified, or until his or her death, resignation, or removal as provided in the Fund’s by-laws or charter or by statute, or until December 31 of the year in which he or she turns 72.

(c)

Chairman of the Board of Directors and the Audit Committee.

Certain biographical and other information relating to the Director who is an officer and “interested person” of the Fund as defined in the Investment Company Act and to the other officers of the Fund is set forth below, including their year of birth, their principal occupation for at least the last five years, the length of time served, the total number of BlackRock-advised funds overseen and any public directorships.

Name, Address(a) and Birth Year of Director		Position(s) Held with the Fund		Term of Office(b) and Length of Time Served		Principal Occupation(s) During Past Five Years		Number of BlackRock-Advised Funds and Portfolios Overseen		Public Directorships
Robert C. Doll, Jr. (1954) (c)		President and Director		Director and President since 2005		Vice Chairman and Director of BlackRock, Inc., Global Chief Investment Officer for Equities, Chairman of the BlackRock Retail Operating Committee, and member of the BlackRock Executive Committee since 2006; President of the funds advised by Merrill Lynch Investment Managers, L.P. (“MLIM”) and its affiliates (“MLIM/FAM-advised funds”) from 2005 to 2006 and Chief Investment Officer thereof from 2001 to 2006; President of MLIM and Fund Asset Management, L.P. (“FAM”) from 2001 to 2006; Co-Head (Americas Region) thereof from 2000 to 2001 and Senior Vice President from 1999 to 2001; President and Director of Princeton Services, Inc. (“Princeton Services”) and President of Princeton Administrators, L.P. (“Princeton Administrators”) from 2001 to 2006; Chief Investment Officer of OppenheimerFunds, Inc. in 1999 and Executive Vice President thereof from 1991 to 1999.		120 registered investment companies consisting of 161 portfolios		None.

Name, Address(a) and Birth Year of Director	Position(s) Held with the Fund	Term of Office(b) and Length of Time Served	Principal Occupation(s) During Past Five Years	Number of BlackRock-Advised Funds and Portfolios Overseen	Public Directorships
Donald C. Burke (1960)	Vice President and Treasurer	Vice President since 1993 and Treasurer since 1989	Managing Director of BlackRock, Inc. since 2006; Managing Director of MLIM and FAM in 2006; First Vice President of MLIM and FAM from 1997 to 2005 and Treasurer thereof from 1999 to 2006; Vice President and Secretary of MLIM and FAM from 1990 to 1997.	196 registered investment companies consisting of 300 portfolios	None.

Karen Clark (1965)	Fund Compliance Officer	Chief Compliance Officer since 2007	Managing Director of BlackRock, Inc. and Chief Compliance Officer of certain BlackRock-advised funds since 2007; Director of BlackRock, Inc. from 2005 to 2007; Principal and Senior Compliance Officer, State Street Global Advisors, from 2001 to 2005; Principal Consultant, PricewaterhouseCoopers, LLP from 1998 to 2001; and Branch Chief, Division of Investment Management and Office of Compliance Inspections and Examinations, U.S. Securities and Exchange Commission, from 1993 to 1998.	120 registered investment companies consisting of 161 portfolios	None.

Howard B. Surloff (1965)	Secretary	Secretary since 2007	General Counsel of U.S. Funds at BlackRock, Inc. since January 2006; General Counsel (U.S.), Goldman Sachs Asset Management from 1993 to 2006.	252 registered investment companies consisting of 568 portfolios	None

(a)

The address of each Director and officer listed above is P.O. Box 9011, Princeton New Jersey 08543-9011.

(b)

Each officer is elected by and serves at the pleasure of the Board of Directors of the Fund.

(c)

Mr. Doll is an “interested person,” as defined in the Investment Company Act, of the Fund based on his positions with BlackRock, Inc. and its affiliates.

(d)

As a Director, Mr. Doll serves until his successor is elected and qualified or until December 31 of the year in which he turns 72, or until his death, resignation, or removal as provided in the Fund’s by-laws or charter or by statute.

Share Ownership

Information relating to each Director’s share ownership in the Fund and in all BlackRock-advised funds that are overseen by the respective Director (“Supervised Funds”) as of December 31, 2006 is set forth in the chart below:

Name	Aggregate Dollar Range of Equity Securities in the Insured Fund	Aggregate Dollar Range of Equity Securities in the National Fund	Aggregate Dollar Range of Equity Securities in the Short-Term Fund	Aggregate Dollar Range of Equity Securities in the High Yield Fund	Aggregate Dollar Range of Equity Securities in Supervised Funds
Interested Director:
Robert C. Doll, Jr.	None	$10,001-$50,000	None	None	Over $100,000
Non-Interested Directors:
Ronald W. Forbes	None	$1-$10,000	None	None	Over $100,000
Cynthia A. Montgomery	None	None	None	None	Over $100,000
Jean Margo Reid	None	$50,001-$100,000	None	None	Over $100,000
Roscoe S. Suddarth	None	None	None	None	Over $100,000
Richard R. West	None	None	None	None	Over $100,000

Directors of the Fund may purchase Institutional shares of the Fund.

As of October 5, 2007, the Directors and officers of the Fund as a group owned an aggregate of less than 1% of the outstanding shares of the Fund. As of December 31, 2006, none of the non-interested Directors of the Fund or their immediate family members owned beneficially or of record any securities of affiliates of the Investment Adviser.

ALTERNATIVES BLACKROCK SOLUTIONS EQUITIES FIXED INCOME LIQUIDITY REAL ESTATE

BlackRock
Municipal Bond Fund, Inc.

Prospectus

October 29, 2007

This Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference.

NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

Table of Contents

Key Facts
BlackRock Municipal Bond Fund at a Glance	3
Risk/Return Bar Charts	6
Fees and Expenses	12

Details About the Funds
How Each Fund Invests	22
Investment Risks	25
Statement of Additional Information	31

Your Account
Pricing of Shares	32
Distribution and Service Plans	44
How to Buy, Sell, Transfer and Exchange Shares	46
How Shares Are Priced	53
Participation in Fee-Based Programs	54
Dividends and Taxes	55
Electronic Delivery	56
Delivery of Shareholder Documents	56

Management of the Funds
BlackRock Advisors, LLC	57
Financial Highlights	62

For More Information
Shareholder Reports	Back Cover
Statement of Additional Information	Back Cover

Key Facts

BlackRock Municipal Bond Fund at a Glance

IMPORTANT DEFINITIONS

In an effort to help you better understand the many concepts involved in making an investment decision, we have defined the highlighted terms in this Prospectus in the sidebar.

Municipal Bonds — debt obligations issued by or on behalf of a governmental entity or other qualifying issuer that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax).

Investment Grade — any of the four highest debt obligation ratings by recognized rating agencies, including Standard & Poor’s, Moody’s Investors Service, Inc. and Fitch Ratings.

What are the Funds’ investment objectives?

BlackRock Municipal Bond Fund, Inc. (the “Corporation”) consists of four separate portfolios — the BlackRock Municipal Insured Fund (the “Insured Fund”), the BlackRock National Municipal Fund (the “National Fund”), the BlackRock Short-Term Municipal Fund (the “Short-Term Fund”) and the BlackRock High Yield Municipal Fund (the “High Yield Fund”). Each Fund is, in effect, a separate fund that issues its own shares. The investment objective of each Fund is to provide shareholders with as high a level of income exempt from Federal income taxes as is consistent with the investment policies of such Fund.

What are the Funds’ main investment strategies?

Under normal circumstances, each Fund seeks to achieve its objective by investing at least 80% of its assets in municipal bonds. In choosing investments, each Fund’s management analyzes the credit quality of issuers (and insurers, in the case of the Insured Fund) and considers the yields available on municipal bonds with different maturities. The investment strategies of the Funds differ primarily in the quality and maturity of the municipal bonds in which they invest.

The Insured Fund invests primarily in investment grade municipal bonds and, under normal circumstances, invests at least 80% of its assets in municipal bonds that are covered by insurance that guarantees the timely payment of principal at maturity and interest when due. The Fund will usually invest a majority of its assets in municipal bonds that have a maturity of five years or longer. While insurance reduces the credit risk of the Fund’s investments, it may also reduce the yield on insured bonds. Therefore, the Fund’s yield may be lower than it would be if the Fund invested in uninsured municipal bonds. Insurance does not guarantee the market value of municipal bonds in the Fund or the value of the Fund’s shares.

IMPORTANT DEFINITIONS

Municipal Notes — shorter-term municipal debt obligations that pay interest that is, in the opinion of bond counsel to the issuer, generally excludable from gross income for Federal income tax purposes (except that the interest may be includable in taxable income for purposes of the Federal alternative minimum tax) and that have a maturity that is generally one year or less.

comparable quality. These lower-rated obligations are commonly known as “junk bonds.” The 35% limitation on junk bond investments reflects only the present intention of Fund management, and may be changed at any time. Therefore, it is possible that the Fund could invest up to 100% of its assets in junk bonds. Fund management does not presently intend to invest in municipal bonds that are in default or that it believes will be in default.

The Short-Term Fund invests primarily in investment grade municipal bonds that have a maturity of less than four years or in municipal notes. Because of their shorter maturities, the Fund’s investments will not usually be as sensitive to changes in prevailing interest rates as are long-term municipal bonds. Fluctuations in interest rates on short-term municipal bonds may, however, vary more widely from time to time than those on long-term municipal bonds.

The High Yield Fund may invest in municipal bonds rated in any rating category or in unrated municipal bonds. The Fund will usually invest in municipal bonds that have a maturity of five years or longer. Fund management chooses municipal bonds that it believes offer a relatively high potential for total return relative to their total risk. Although the Fund may invest in municipal bonds in any rating category, Fund management presently intends to invest at least 65% of the Fund’s net assets in medium- to low-quality bonds as rated by at least one independent rating agency (BBB or lower by S&P or Fitch or Baa or lower by Moody’s), or if unrated, judged to be of comparable quality by the Fund’s investment adviser. Obligations rated below BBB or Baa are commonly known as “junk bonds.” It is possible that the Fund could invest up to 100% of its assets in junk bonds.

None of the Funds currently contemplates investing more than 25% of its total assets in municipal bonds or municipal notes whose issuers are located in the same state.

What are the main risks of investing in the Funds?

No Fund can guarantee that it will achieve its investment objective.

As with any fund, the value of each Fund’s investments — and therefore the value of the Fund’s shares --may fluctuate. These changes may occur in response to interest rate changes or other developments that may affect the municipal bond market generally, or a particular issuer or obligation. Generally, when interest rates go up, the value of municipal bonds goes down. Bonds with longer maturities are affected more by changes in interest rates than bonds with shorter maturities. In addition, there are specific factors that may affect the value of a particular security. Also, Fund management may select securities that underperform the bond market, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. If the value of a Fund’s investments goes down, you may lose money.

IMPORTANT DEFINITIONS

Credit Risk — the risk that the issuer of a bond or other fixed-income security will be unable to pay the interest or principal when due.

Call and Redemption Risk — the risk a bond’s issuer may call a bond held by a Fund for redemption before it matures.

Each Fund is also subject to credit risk and call and redemption risk.

The National Fund and the High Yield Fund may invest a substantial portion of their assets in junk bonds and the High Yield Fund may invest up to 10% of its assets in distressed securities. Investing in junk bonds is riskier than investing in higher quality municipal bonds — price fluctuations may be larger and more frequent, and there is greater risk of losing both income and principal. Investing in municipal bonds that are distressed securities is speculative and involves significant risk in addition to the risks of investing in junk bonds. The High Yield Fund will generally not receive interest payments on the distressed securities and may incur costs to protect its investment. In addition, the National Fund and the High Yield Fund may also invest to a greater extent in municipal bonds with longer maturities.

Who should invest?

One of the Funds may be an appropriate investment for you if you:

•

Are looking for an investment that provides current income exempt from Federal income tax

•

Want a professionally managed and diversified portfolio without the administrative burdens of direct investments in municipal bonds

•

Are looking for liquidity

•

Can tolerate the risk of loss caused by changes in interest rates or adverse changes in the price of municipal bonds in general

The National Fund or the High Yield Fund may be an appropriate investment for you if, in addition to the first four factors outlined above, you:

•

Are willing to accept the risk of greater loss of income and principal

The Short-Term Fund may be an appropriate investment for you if, in addition to the first four factors outlined above, you:

•

Are investing with shorter-term goals

Risk/Return Bar Chart for the Insured Fund

The bar chart and table shown below provide an indication of the risks of investing in the Insured Fund. The bar chart shows changes in the Insured Fund’s performance for Investor A shares for each of the past ten calendar years. Sales charges are not reflected in the bar chart. If these amounts were reflected, returns would be less than those shown. The table compares the average annual total returns for each class of the Insured Fund’s shares with those of the Lehman Brothers Municipal Bond Index, a broad measure of market performance. How the Insured Fund performed in the past (before and after taxes) is not necessarily an indication of how the Insured Fund will perform in the future.

During the period shown in the bar chart, the highest return for a quarter was 5.27% (quarter ended September 30, 2002) and the lowest return for a quarter was -2.67% (quarter ended June 30, 1999). The year-to-date return as of September 30, 2007 was 1.35%.

After-tax returns are shown only for Investor A shares and will vary for other classes. The after-tax returns are calculated using the historical highest applicable marginal Federal individual income tax rates in effect during the periods measured and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Insured Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts or through tax-advantaged education savings accounts.

Average Annual Total Returns (for the periods ended December 31, 2006)	One Year		Five Years		Ten Years

Insured Fund — Investor A
Return Before Taxes(a)	0.01	%	4.39	%	4.62	%
Return After Taxes on Distributions(a)	-0.07	%	4.36	%	4.51	%
Return After Taxes on Distributions and Sale of Fund Shares(a)	1.51	%	4.41	%	4.59	%

Insured Fund — Investor B(b)
Return Before Taxes(a)	-0.06	%	4.43	%	4.55	%

Insured Fund — Investor C(c) Return Before Taxes(a)	2.69	%	4.54	%	4.31	%

Insured Fund — Investor C1(d)
Return Before Taxes(a)	2.88	%	4.71	%	4.50	%

Insured Fund — Institutional(e) Return Before Taxes(a)	4.58	%	5.56	%	5.34	%

Lehman Brothers Municipal Bond Index(f)	4.84	%	5.53	%	5.76	%

(a)

Includes all applicable fees and sales charges.

(b)

As of October 2, 2006, Investor B shares generally are no longer available for purchase but continue to be available for exchanges and for dividend and capital gain reinvestment for existing shareholders. See “Your Account — How to Buy, Sell, Transfer and Exchange Shares.”

(c)

Prior to the Investor C inception date of October 2, 2006, the returns for Investor C shares are based on the performance of the Institutional shares adjusted to reflect the distribution and service (12b-1) fees applicable to Investor C shares.

(d)

As of October 2, 2006, Investor C1 shares generally are no longer available for purchase or exchange but continue to be available for dividend and capital gain reinvestment for existing shareholders. See “Your Account — How to Buy, Sell, Transfer and Exchange Shares.”

(e)

The returns for Institutional shares do not reflect the Institutional front end sales charge in effect prior to December 28, 2005. If the sales charge were included, the returns shown for Institutional shares would be lower.

(f)

This unmanaged Index consists of revenue bonds, prerefunded bonds, general obligation bonds and insured bonds, all of which mature within 30 years. Performance does not reflect the deduction of fees, expenses or taxes. Past performance is not predictive of future performance.

Risk/Return Bar Chart for the National Fund

The bar chart and table shown below provide an indication of the risks of investing in the National Fund. The bar chart shows changes in the National Fund’s performance for Investor A shares for each of the past ten calendar years. Sales charges are not reflected in the bar chart. If these amounts were reflected, returns would be less than those shown. The table compares the average annual total returns for each class of the National Fund’s shares with those of the Lehman Brothers Municipal Bond Index, a broad measure of market performance. How the National Fund performed in the past (before and after taxes) is not necessarily an indication of how the National Fund will perform in the future.

During the period shown in the bar chart, the highest return for a quarter was 4.53% (quarter ended December 31, 2000) and the lowest return for a quarter was -2.42% (quarter ended September 30, 1999). The year-to-date return as of September 30, 2007 was 1.10%.

After-tax returns are shown only for Investor A shares and will vary for other classes. The after-tax returns are calculated using the historical highest applicable marginal Federal individual income tax rates in effect during the periods measured and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their National Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts or through tax-advantaged education savings accounts.

Average Annual Total Returns (for the periods ended December 31, 2006)	One Year		Five Years		Ten Years

National Fund — Investor A
Return Before Taxes(a)	0.74	%	5.09	%	4.99	%
Return After Taxes on Distributions(a)	0.74	%	5.09	%	4.99	%
Return After Taxes on Distributions and Sale of Fund Shares(a)	2.03	%	5.07	%	5.00	%

National Fund — Investor B(b)
Return Before Taxes(a)	0.69	%	5.15	%	4.92	%

National Fund — Investor C(c) Return Before Taxes(a)	3.33	%	5.22	%	4.66	%

National Fund — Investor C1(d)
Return Before Taxes(a)	3.53	%	5.42	%	4.87	%

National Fund — Institutional(e) Return Before Taxes(a)	5.38	%	6.27	%	5.71	%

Lehman Brothers Municipal Bond Index(f)	4.84	%	5.53	%	5.76	%

(a)

Includes all applicable fees and sales charges.

(b)

(c)

(d)

(e)

(f)

Risk/Return Bar Chart for the Short-Term Fund

The bar chart and table shown below provide an indication of the risks of investing in the Short-Term Fund. The bar chart shows changes in the Short-Term Fund’s performance for Institutional shares for each of the past ten calendar years. Sales charges are not reflected in the bar chart. If these amounts were reflected, returns would be less than those shown. The table compares the average annual total returns for each class of the Short-Term Fund’s shares with those of the Lehman Brothers Municipal Bond Index and the Lehman Brothers 3-year General Obligation Bond Index, each a broad measure of market performance. How the Short-Term Fund performed in the past (before and after taxes) is not necessarily an indication of how the Short-Term Fund will perform in the future.

During the period shown in the bar chart, the highest return for a quarter was 1.87% (quarter ended March 31, 2001) and the lowest return for a quarter was -0.37% (quarter ended June 30, 2004). The year-to-date return as of September 30, 2007 was 2.67%.

After-tax returns are shown only for Institutional shares and will vary for other classes. The after-tax returns are calculated using the historical highest applicable marginal Federal individual income tax rates in effect during the periods measured and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their Short-Term Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts or through tax-advantaged education savings accounts.

Average Annual Total Returns (for the periods ended December 31, 2006)	One Year		Five Years		Ten Years

Short-Term Fund — Investor A(a)
Return Before Taxes(b)	-0.4	8%	1.18	%	2.56	%

Short-Term Fund — Investor A1(c)
Return Before Taxes(b)	1.82	%	1.74	%	2.93	%

Short-Term Fund — Investor B(d) Return Before Taxes(b)	1.49	%	1.69	%	2.76	%

Short-Term Fund — Investor C(h) Return Before Taxes(b)	0.83	%	1.04	%	2.10	%

Short-Term Fund — Institutional(e) Return Before Taxes(b)	2.85	%	2.05	%	3.13	%
Return After Taxes on Distributions(b)	2.85	%	2.05	%	3.12	%
Return After Taxes on Distributions an Sale of Fund Shares(b)	2.92	%	2.10	%	3.13	%

Lehman Brothers Municipal Bond Index(f)	4.84	%	5.53	%	5.76	%

Lehman Brothers 3-year General Obligation
Bond Index(g)	3.06	%	3.02	%	4.01	%

(a)

Prior to the Investor A inception date of October 2, 2006, the returns for Investor A shares are based upon performance of the Fund’s Institutional shares. The returns for Investor A shares, however, are adjusted to reflect the service (12b-1) fees applicable to Investor A shares.

(b)

Includes all applicable fees and sales charges.

(c)

Investor A1 shares will not generally be available for purchase or exchange but continue to be available for dividend and capital gain reinvestment for existing shareholders. See “Your Account — How to Buy, Sell, Transfer and Exchange Shares.”

(d)

(e)

(f)

(g)

This unmanaged Index consists of state and local government obligation bonds that mature in 3 to 4 years, rated Baa or better. Performance does not reflect the deduction of fees, expenses or taxes. Past performance is not predictive of future performance.

(h)

Prior to the Investor C inception date of October 2, 2006, the returns for Investor C shares are based upon performance of the Fund’s Institutional shares. The returns for Investor C shares, however, are adjusted to reflect the distribution and service (12b-1) fees applicable to Investor C shares.

Risk/Return Bar Chart for the High Yield Fund

Because the High Yield Fund only recently commenced operations, it does not have performance information an investor would find useful in evaluating the risks of investing in the Fund.

Fees and Expenses

UNDERSTANDING
EXPENSES

Fund investors pay various fees and expenses, either directly or indirectly. Listed below are some of the main types of expenses that each Fund may charge:

Expenses paid directly by the shareholder:

Shareholder Fees — these fees include sales charges that you may pay when you buy or sell shares of a Fund.

Expenses paid indirectly by the shareholder:

Annual Fund Operating Expenses — expenses that cover the costs of operating a Fund.

Management Fee — a fee paid to the Investment Adviser for managing a Fund.

Distribution Fees — fees used to support the Fund’s marketing and distribution efforts, such as compensating financial advisers and other financial intermediaries, advertising and promotion.

Service Fees — fees used to compensate securities dealers and other financial intermediaries for shareholder servicing activities.

Acquired Fund Fees and Expenses — fees and expenses charged by other investment companies in which a Fund invests a portion of its assets.

Fees and Expenses for the Insured Fund

The Insured Fund and the National Fund currently offer five different classes of shares, the Short-Term Fund offers six different classes of shares (five by this Prospectus) and the High Yield Fund offers three different classes of shares. Although your money will be invested the same way no matter which class of shares you buy, there are differences among the fees and expenses associated with each class. Not everyone is eligible to buy every class. After determining which classes you are eligible to buy, decide which class best suits your needs. Your financial adviser or other financial intermediary can help you with this decision.

These tables show the different fees and expenses that you may pay if you buy and hold the different classes of shares of each Fund. Future expenses may be greater or less than those indicated below.

	Insured Fund
Shareholder Fees (fees paid directly from your investment)(a):	Investor A		Investor B(b)		Investor C		Investor C1(c)		Institutional

Maximum Sales Charge (Load) imposed on
purchases (as a percentage of offering price)	4.25	%(d)	None		None		None		None

Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is lower)	None	(e)	4.00	%(d)	1.00	%(d)	1.00	%(d)	None

Maximum Sales Charge (Load) imposed on Dividend Reinvestments	None		None		None		None		None

Redemption Fee	None		None		None		None		None

Exchange Fee	None		None		None		None		None

Annual Fund Operating Expenses (expenses
that are deducted from Fund assets):

Management Fee(f)	0.36	%	0.36	%	0.36	%	0.36	%	0.36	%

Distribution and/or Service (12b-1) Fees(g)	0.25	%	0.75	%	1.00	%	0.80	%	None

Other Expenses (including transfer agency fees)(h)(j)	0.12	%	0.12	%	0.15	%	0.12	%	0.11	%

Acquired Fund Fees and Expenses(j)	0.02	%	0.02	%	0.02	%	0.02	%	0.02	%

Total Annual Fund Operating Expenses(f)(i)(j)	0.75	%	1.25	%	1.53	%	1.30	%	0.49	%

(a)

In addition, certain selected securities dealers or other financial intermediaries may charge clients a processing fee when a client buys or redeems shares. For example, Merrill Lynch generally charges a fee of $5.35 when a client buys or redeems shares. Also, PFPC Inc., the transfer agent, charges a fee of $7.50 for redemption payments made by wire transfer and $15 for redemption by check sent via overnight mail. See “Your Account — How to Buy, Sell, Transfer and Exchange Shares.”

(b)

Investor B shares automatically convert to Investor A shares approximately ten years after you buy them and will no longer be subject to distribution fees. As of October 2, 2006, Investor B shares generally are no longer available for purchase but continue to be available for exchange and for dividend and capital gain reinvestment. See “Your Account — How to Buy, Sell, Transfer and Exchange Shares.”

(c)

As of October 2, 2006, Investor C1 shares generally are no longer available for purchase or exchange but continue to be available for dividend and capital gain reinvestment.

(d)

Some investors may qualify for reductions in or waivers of the sales charge (load). See “Your Account — Pricing of Shares.”

(e)

You may pay a deferred sales charge if you purchase $1 million or more and you redeem within 18 months.

(f)

The Investment Adviser may waive a portion of the Fund’s management fee in connection with the Fund’s investment in an affiliated money market fund. Taking this waiver into account and including Acquired Fund Fees and Expenses, the Total Annual Fund Operating Expenses would be 0.74%, 1.25%, 1.53%, 1.30% and 0.49% for Investor A, Investor B, Investor C, Investor C1 and Institutional shares, respectively.

(g)

If you hold Investor B, Investor C or Investor C1 shares over time, it may cost you more in distribution and service (12b-1) fees than the maximum sales charge that you would have paid if you had bought Investor A shares.

(h)

PFPC Inc., an affiliate of the Investment Adviser, provides transfer agency services to the Fund. The Fund pays a fee for these services. The Investment Adviser or its affiliates also provide certain accounting services to the Fund and the Fund reimburses the Investment Adviser or its affiliates for such services.

(footnotes continued on next page)

(i)

The Fund is required to report interest expenses associated with certain Fund investments. Such interest expense for the Fund for the most recent fiscal year (as reported in the Fund’s audited financial statements) was approximately 0.40%. However, the Fund did not actually pay such interest expense, and, therefore, such interest expense is not included in the Total Annual Fund Operating Expenses.

(j)

The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s annual report, which does not include Acquired Fund Fees and Expenses.

Examples:

These examples are intended to help you compare the cost of investing in the Insured Fund with the cost of investing in other mutual funds.

These examples assume that you invest $10,000 in the Insured Fund for the time periods indicated, that your investment has a 5% return each year, that you pay the sales charges, if any, that apply to the particular class and that the Insured Fund’s operating expenses remain the same. These assumptions are not meant to indicate you will receive a 5% annual rate of return. Your annual return may be more or less than the 5% used in these examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

EXPENSES IF YOU DID REDEEM YOUR SHARES:

	1 Year	3 Years	5 Years	10 Years

Investor A	$498	$655	$824	$1,316

Investor B	$527	$697	$886	$1,511

Investor C	$256	$483	$834	$1,824

Investor C1	$232	$412	$713	$1,568

Institutional	$50	$157	$274	$616

EXPENSES IF YOU DID NOT REDEEM YOUR SHARES:

	1 Year	3 Years	5 Years	10 Years

Investor A	$498	$655	$824	$1,316

Investor B	$127	$397	$686	$1,511

Investor C	$156	$483	$834	$1,824

Investor C1	$132	$412	$713	$1,568

Institutional	$50	$157	$274	$616

The Insured Fund is required to report interest expense associated with certain Fund investments. Such interest expense for the Insured Fund for the most recent fiscal year (as reported in the Fund’s audited financial statements) was approximately 0.40%. However, the Fund did not actually pay such interest expense, and therefore, such interest expense is not included in the Total Annual Fund Operating Expenses shown above. If the Fund had paid such interest expense, your 1, 3, 5 and 10 year expenses if you did/did not redeem your shares would be:

EXPENSES IF YOU DID REDEEM YOUR SHARES:

	1 Year	3 Years	5 Years	10 Years

Investor A	$537	$775	$1,031	$1,763

Investor B	$568	$820	$1,097	$1,955

Investor C	$295	$603	$1,037	$2,243

Investor C1	$273	$536	$923	$2,009

Institutional	$91	$284	$493	$1,096

EXPENSES IF YOU DID NOT REDEEM YOUR SHARES:

	1 Year	3 Years	5 Years	10 Years

Investor A	$537	$775	$1,031	$1,763

Investor B	$168	$520	$897	$1,955

Investor C	$195	$603	$1,037	$2,243

Investor C1	$173	$536	$923	$2,009

Institution	$91	$284	$493	$1,096

Fees and Expenses for the National Fund

	National Fund
Shareholder Fees (fees paid directly from your investment)(a):	Investor A		Investor B(b)		Investor C		Investor C1(c)		Institutional

Maximum Sales Charge (Load) imposed on
purchases (as a percentage of offering price)	4.25	%(d)	None		None		None		None

Maximum Deferred Sales Charge (Load) (as a
percentage of original purchase price or
redemption proceeds, whichever is lower)	None	(e)	4.00	%(d)	1.00	%(d)	1.00	%(d)	None

Maximum Sales Charge (Load) imposed on Dividend Reinvestments	None		None		None		None		None

Redemption Fee	None		None		None		None		None

Exchange Fee	None		None		None		None		None

*Annual Fund Operating Expenses (expenses*
*that are deducted from Fund assets):*

Management Fee(f)	0.47	%	0.47	%	0.47	%	0.47	%	0.47	%

Distribution and/or Service (12b-1) Fees(g)	0.25	%	0.75	%	1.00	%	0.80	%	None

Other Expenses (including transfer agency fees)(h)(i)(j)	0.11	%	0.12	%	0.19	%	0.12	%	0.13	%

Acquired Fund Fees and Expenses(j)	0.01	%	0.01	%	0.01	%	0.01	%	0.01	%

Total Annual Fund Operating Expenses(f)(i)(j)	0.84	%	1.35	%	1.67	%	1.40	%	0.61	%

(a)

(b)

Investor B shares automatically convert to Investor A shares approximately ten years after you buy them and will no longer be subject to distribution fees. As of October 2, 2006, Investor B shares generally are no longer available for purchase but continue to be available for exchanges and for dividend and capital gain reinvestment. See “Your Account — How to Buy, Sell, Transfer and Exchange Shares.”

(c)

As of October 2, 2006, Investor C1 shares generally are no longer available for purchase or exchange but continue to be available for dividend and capital gain reinvestment.

(d)

Some investors may qualify for reductions in or waivers of the sales charge (load). See “Your Account — Pricing of Shares.”

(e)

You may pay a deferred sales charge if you purchase $1 million or more and you redeem within 18 months.

(f)

The Investment Adviser may waive a portion of the Fund’s management fee in connection with the Fund’s investment in an affiliated money market fund. Taking this waiver and note (j) below into account, the Total Annual Fund Operating Expense ratios would be 0.84%, 1.35%, 1.67%, 1.40% and 0.60% for Investor A, Investor B, Investor C, Investor C1 and Institutional shares, respectively.

(g)

(h)

(i)

The Fund is required to report interest expenses associated with Fund investments. Such interest expense for the Fund for the most recent fiscal year (as reported in the Fund’s audited financial statements) was approximately 0.41%. However, the Fund did not actually pay such interest expense, and, therefore, such interest expense is not included in the Total Annual Fund Operating Expenses.

(j)

The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s annual report, which does not include Acquired Fund Fees and Expenses. During the fiscal year ended June 30, 2007, the Fund changed its methodology for allocating transfer agency fees among the share classes from an allocation based on net assets per share class to an allocation based on number of shareholder accounts per share class. If applicable, the Total Annual Fund Operating Expenses have been restated to reflect expenses as if this change was in effect for the entire fiscal year.

Examples:

These examples are intended to help you compare the cost of investing in the National Fund with the cost of investing in other mutual funds.

These examples assume that you invest $10,000 in the National Fund for the time periods indicated, that your investment has a 5% return each year, that you pay the sales charges, if any, that apply to the particular class and that the National Fund’s operating expenses remain the same. These assumptions are not meant to indicate you will receive a 5% annual rate of return. Your annual return may be more or less than the 5% used in these examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

EXPENSES IF YOU DID REDEEM YOUR SHARES:

	1 Year	3 Years	5 Years	10 Years

Investor A	$507	$682	$871	$1,418

Investor B	$537	$728	$939	$1,624

Investor C	$270	$526	$907	$1,976

Investor C1	$243	$443	$766	$1,680

Institutional	$ 62	$195	$340	$ 762

EXPENSES IF YOU DID NOT REDEEM YOUR SHARES:

	1 Year	3 Years	5 Years	10 Years

Investor A	$507	$682	$871	$1,418

Investor B	$137	$428	$739	$1,624

Investor C	$170	$526	$907	$1,976

Investor C1	$143	$443	$766	$1,680

Institution	$ 62	$195	$340	$ 762

The National Fund is required to report interest expense associated with certain Fund investments. Such interest expense for the National Fund for the most recent fiscal year (as reported in the Fund’s audited financial statements) was approximately 0.41%. However, the Fund did not actually pay such interest expense, and therefore, such interest expense is not included in the Total Annual Fund Operating Expenses. If the Fund had paid such interest expense, your 1, 3, 5 and 10 year expenses if you did/did not redeem your shares would be:

EXPENSES IF YOU DID REDEEM YOUR SHARES:

	1 Year	3 Years	5 Years	10 Years

Investor A	$546	$802	$1,077	$1,861

Investor B	$579	$854	$1,154	$2,073

Investor C	$310	$649	$1,114	$2,400

Investor C1	$284	$569	$980	$2,127

Institutional	$103	$322	$558	$1,236

EXPENSES IF YOU DID NOT REDEEM YOUR SHARES:

	1 Year	3 Years	5 Years	10 Years

Investor A	$546	$802	$1,077	$1,861

Investor B	$179	$554	$954	$2,073

Investor C	$210	$649	$1,114	$2,400

Investor C1	$184	$569	$980	$2,127

Institution	$103	$322	$558	$1,236

Fees and Expenses for the Short-Term Fund

	Short-Term Fund
Shareholder Fees (fees paid directly from your investment)(a):	Investor A		Investor A1(b)		Investor B(c)		Investor C		Institutional

Maximum Sales Charge (Load) imposed on purchases (as a percentage of offering price)	3.00	%(d)	1.00	%(d)	None		None		None

Maximum Deferred Sales Charge
(Load) (as a percentage of original
purchase price or redemption,
proceeds whichever is lower)	None	(e)	None	(e)	1.00	%(d)	1.00	%(d)	None

Maximum Sales Charge (Load) imposed on Dividend Reinvestments	None		None		None		None		None

Redemption Fee	None		None		None		None		None

Exchange Fee	None		None		None		None		None

Annual Fund Operating Expenses (expense
that are deducted from Fund assets):

Management Fee(h)	0.34	%	0.34	%	0.34	%	0.34	%	0.34	%

Distribution and/or Service (12b-1) Fees(f)	0.25	%	0.10	%	0.35	%	1.00	%	None

Other Expenses (including transfer agency fees)(g)(i)	0.57	%	0.14	%	0.16	%	0.89	%	0.14	%

Acquired Fund Fees and Expenses(i)	0.01	%	0.01	%	0.01	%	0.01	%	0.01	%

Total Annual Fund Operating Expenses(h)(i)	1.17	%	0.59	%	0.86	%	2.24	%	0.49	%

(a)

(b)

Investor A1 shares will not generally be available for purchase or exchange but continue to be available for dividend and capital gain reinvestment. See “Your Account — How to Buy, Sell, Transfer and Exchange Shares.”

(c)

Investor B shares automatically convert to Investor A1 shares approximately ten years after you buy them and will no longer be subject to distribution fees and will be subject to lower service fees. As of October 2, 2006, Investor B shares generally are no longer available for purchase but continue to be available for exchanges and for dividend and capital gain reinvestment. See “Your Account — How to Buy, Sell, Transfer and Exchange Shares.”

(d)

Some investors may qualify for reductions in or waivers of the sales charge (load). See “Your Account — Pricing of Shares.”

(e)

You may pay a deferred sales charge if you purchase $1 million or more and you redeem within 18 months (Investor A shares) or one year (Investor A1 shares).

(f)

If you hold Investor B or Investor C shares over time, it may cost you more in distribution and service (12b-1) fees than the maximum sales charge that you would have paid if you had bought Investor A shares.

(g)

(h)

Effective October 16, 2006, the Investment Adviser has voluntarily agreed to waive or reimburse fees or expenses in order to limit expenses as follows: 0.60% (for Investor A shares), 0.45% (for Investor A1 shares), 0.70% (for Investor B shares) 1.35% (for Investor C shares) and 0.35% (for Institutional shares). The Investment Adviser may reduce or discontinue these voluntary waivers or reimbursements at any time without notice. In addition, the Investment Adviser may waive a portion of the Fund’s management fee in connection with the Fund’s investment in an affiliated money market fund. Taking these waivers into account and including Acquired Fund Fees and Expenses, the Total Annual Fund Operating Expenses for the fiscal year ended June 30, 2007 were 0.62%, 0.49%, 0.75%, 1.37% and 0.39%, for Investor A, Investor A1, Investor B, Investor C and Institutional shares, respectively.

(i)

The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s annual report, which does not include Acquired Fund Fees and Expenses. During the fiscal year ended June 30, 2007, the Fund changed its methodology for allocating transfer agency fees among the share classes from an allocation based on net assets per share class to an allocation based on number of shareholder accounts per share class. If applicable, the Total Annual Fund Operating Expenses have been restated to reflect as if this change was in effect for the entire fiscal year.

Examples:

These examples are intended to help you compare the cost of investing in the Short-Term Fund with the cost of investing in other mutual funds.

These examples assume that you invest $10,000 in the Short-Term Fund for the time periods indicated, that your investment has a 5% return each year, that you pay the sales charges, if any, that apply to the particular class and that the Short-Term Fund’s operating expenses remain the same. These assumptions are not meant to indicate you will receive a 5% annual rate of return. Your annual return may be more or less than the 5% used in these examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

EXPENSES IF YOU DID REDEEM YOUR SHARES:

	1 Year	3 Years	5 Years	10 Years

Investor A	$416	$660	$924	$1,678

Investor A1	$160	$287	$426	$831

Investor B	$188	$299	$477	$1,061

Investor C	$327	$700	$1,200	$2,575

Institutional	$50	$157	$274	$616

EXPENSES IF YOU DID NOT REDEEM YOUR SHARES:

	1 Year	3 Years	5 Years	10 Years

Investor A	$416	$660	$924	$1,678

Investor A1	$160	$287	$426	$831

Investor B	$88	$274	$477	$1,061

Investor C	$227	$700	$1,200	$2,575

Institution	$50	$157	$274	$616

Fees and Expenses for the High Yield Fund

	High Yield Fund
Shareholder Fees (fees paid directly from your investment)(a)	Investor A		Investor C		Institutional

Maximum Sales Charge (Load) imposed on
purchases (as a percentage of offering price)	4.25	%(b)	None		None

Maximum Deferred Sales Charge (Load) (as a
percentage of original purchase price or
redemption proceeds, whichever is lower)	None	(c)	1.00	%(b)	None

Maximum Sales Charge (Load) imposed on Dividend Reinvestments	None		None		None

Redemption Fee	None		None		None

Exchange Fee	None		None		None

Annual Fund Operating Expenses (expenses
that are deducted from Fund assets):

Management Fee(d)	0.55	%	0.55	%	0.55	%

Distribution and/or Service (12b-1) Fees(e)	0.25	%	1.00	%(h)	None

Other Expenses (including transfer agency fees)(f)(g)	0.39	%	0.41	%	0.41	%

Acquired Fund Fees and Expenses(g)	0.01	%	0.01	%	0.01	%

Total Annual Fund Operating Expenses(d)(g)	1.20	%	1.97	%(h)	0.97	%

(a)

(b)

Some investors may qualify for reductions in or waivers of the sales charge (load). See “Your Account — Pricing of Shares”

(c)

You may pay a deferred sales charge if you purchase $1 million or more and you redeem within 18 months.

(d)

The Investment Adviser has voluntarily agreed to waive a portion of the advisory fee. The amount of waiver is determined monthly and can be reduced or discontinued at any time without notice. In addition, the Investment Adviser may waive a portion of the Fund’s advisory fee in connection with the Fund’s investment in an affiliated money market fund. Taking these waivers and notes (g) and (h) below into account, the Total Annual Fund Operating Expenses would be 0.90%, 1.66% and 0.63% for Investor A, Investor C and Institutional shares, respectively.

(e)

If you hold Investor C shares over time, it may cost you more in distribution and service (12b-1) fees than the maximum sales charge that you would have paid if you had bought Investor A shares.

(f)

(g)

The Total Annual Fund Operating Expenses do not correlate to the ratio of expenses to average net assets given in the Fund’s annual report, which does not include Acquired Fund Fees and Expenses. During the fiscal year ended June 30, 2007, the Fund changed its methodology for allocating transfer agency fees among the share classes from an allocation based on net assets per share class to an allocation based on number of shareholder accounts per share class. If applicable, the Total Annual Fund Operating Expenses have been restated to reflect as if this change was in effect for the entire fiscal year.

(h)

Investor C shares did not pay a portion of its distribution fees during the fiscal year ended June 30, 2007. The Total Annual Fund Operating Expenses have been restated to reflect the entire distribution fee.

Examples:

These examples are intended to help you compare the cost of investing in the High Yield Fund with the cost of investing in other mutual funds.

These examples assume that you invest $10,000 in the High Yield Fund for the time periods indicated, that your investment has a 5% return each year, that you pay the sales charges, if any, that apply to the particular class and that the High Yield Fund’s operating expenses remain the same. These assumptions are not meant to indicate you will receive a 5% annual rate of return. Your annual return may be more or less than the 5% used in these examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

EXPENSES IF YOU DID REDEEM YOUR SHARES:

	1 Year	3 Years	5 Years	10 Years

Investor A	$542	$790	$1,057	$1,818

Investor C	$300	$618	$1,062	$2,296

Institutional	$99	$309	$536	$1,190

EXPENSES IF YOU DID NOT REDEEM YOUR SHARES:

	1 Year	3 Years	5 Years	10 Years

Investor A	$542	$790	$1,057	$1,818

Investor C	$200	$618	$1,062	$2,296

Institutional	$99	$309	$536	$1,190

Details About the Funds

How Each Fund Invests

ABOUT THE INVESTMENT
ADVISER AND
THE SUB-ADVISER

The Funds are managed by BlackRock Advisors, LLC and sub-advised by BlackRock Investment Management, LLC. As used in this Prospectus, the term “Investment Adviser” includes the sub-adviser.

The investment objective of each Fund is to provide shareholders with as high a level of income exempt from Federal income taxes as is consistent with the investment policies of each Fund.

Outlined below are the main strategies each Fund uses in seeking to achieve its investment objectives:

Each Fund invests primarily in a diversified portfolio of municipal bonds. Under normal circumstances, each Fund invests at least 80% of its assets in municipal bonds. Municipal bonds may be obligations of a variety of issuers, including governmental entities or other qualifying issuers. Issuers may be states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities. Municipal bonds also include short-term tax-exempt obligations like municipal notes and variable rate demand obligations.

Fund management considers a variety of factors when choosing investments, such as:

•

Credit Quality of Issuers — based on bond ratings and other factors including economic and financial conditions.

•

Yield Analysis — takes into account factors such as the different yields available on different types of obligations and the shape of the yield curve (longer term obligations typically have higher yields).

•

Maturity Analysis — the weighted average maturity of the portfolio will be maintained within a desirable range as determined from time to time. Factors considered include portfolio activity, maturity of the supply of available bonds and the shape of the yield curve.

In addition, Fund management considers the availability of features that protect against an early call of a bond by the issuer.

Each Fund’s investments may consist of private activity bonds that may subject certain shareholders to an alternative minimum tax.

Other Strategies. In addition to the main strategies discussed above, the Funds may use certain other investment strategies.

Each Fund may invest up to 20% of its assets on a temporary basis in taxable money market securities that have a maturity of one year or less. The Funds may make these investments for liquidity purposes or as a temporary investment pending an investment in municipal bonds.

As a temporary measure for defensive purposes, each Fund may invest without limitation in taxable money market securities. These investments may prevent a Fund from meeting its investment objective.

Investments in taxable money market securities as well as some of the derivatives discussed below may cause a Fund to have taxable investment income. Each Fund may also realize capital gains on the sale of its municipal bonds (and other securities it holds). These capital gains will be taxable regardless of whether they are derived from a sale of municipal bonds.

Each of the Funds is permitted to engage in transactions in certain derivatives, such as financial futures contracts and options thereon, for hedging purposes. Each of the Funds may also invest in other derivatives, such as indexed and inverse floating rate obligations and swap agreements, including credit default swap agreements, for hedging purposes or to enhance income. Derivatives are financial instruments whose value is derived from another security or an index such as the Lehman Brothers Municipal Bond Index.

The Funds may invest uninvested cash balances in affiliated money market funds.

Insured Fund

ABOUT THE PORTFOLIO
MANAGEMENT TEAM OF
THE INSURED FUND

The Insured Fund is managed by a team of investment professionals comprised of Michael A. Kalinoski, Theodore R. Jaeckel, Jr., CFA, and Walter O’Connor. Mr. Kalinoski is the Fund’s lead portfolio manager and is responsible for the day-to-day management of the Fund’s portfolio.

Outlined below are other main strategies the Insured Fund uses in seeking to achieve its investment objective:

The Insured Fund invests in investment grade municipal bonds covered by insurance guaranteeing the timely payment of principal at maturity and interest when due. Under normal circumstances, the Fund will invest at least 80% of its assets in municipal bonds covered by insurance. This policy is a non-fundamental policy of the Fund and may only be changed with 60 days’ prior notice to shareholders. Either the issuer of the bond or the Fund purchases the insurance. The Fund will usually invest a majority of its assets in municipal bonds that have a maturity of five years or longer.

National Fund

ABOUT THE PORTFOLIO
MANAGEMENT TEAM OF
THE NATIONAL FUND

The National Fund is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, and Walter O’Connor. Mr. O’Connor is the Fund’s lead portfolio manager and is responsible for the day-to-day management of the Fund’s portfolio.

Outlined below are other main strategies the National Fund uses in seeking to achieve its investment objective:

The National Fund may invest in municipal bonds rated in any rating category or in unrated municipal bonds. The Fund will usually invest in municipal bonds that have a maturity of five years or longer. Fund management will choose municipal bond investments that it believes offer a relatively high potential for total return relative to their total risk. Although the Fund’s investment policies are not governed by specific rating categories, Fund management does not presently intend to invest more than 35% of the Fund’s assets in municipal bonds rated below investment grade (below BBB by S&P or Fitch, or below Baa by Moody’s) or in unrated municipal bonds that Fund management believes are of comparable quality. These lower-rated obligations are commonly known as “junk bonds.” The 35% limitation on junk bond investments reflects only the present intention of Fund management, and may be changed at any time. Therefore, it is possible that the Fund could invest up to 100% of its assets in junk bonds. The Fund will not invest in municipal bonds rated in the lowest rating categories (CC or lower by S&P or Fitch, or Ca or lower by Moody’s) unless Fund management believes those ratings do not accurately reflect the financial condition of the issuer or other factors affecting the creditworthiness of the bonds. Fund management does not presently intend to invest in municipal bonds that are in default or that it believes will be in default.

Short-Term Fund

ABOUT THE PORTFOLIO
MANAGEMENT TEAM OF
THE SHORT-TERM FUND

The Short-Term Fund is managed by a team of investment professionals comprised of Peter J. Hayes and Helen Marie Sheehan. Mr. Hayes is the Fund’s lead portfolio manager and is responsible for the day-to-day management of the Fund’s portfolio.

Outlined below are other main strategies the Short-Term Fund uses in seeking to achieve its investment objective:

The Short-Term Fund invests primarily in investment grade municipal bonds or notes, including variable rate demand obligations, that have a maturity of less than four years. Under normal circumstances, the Fund expects to invest all of its assets in such bonds or notes. Certain municipal bonds that the Fund purchases may have a maturity of greater than four years, but allow the Fund to require the issuer to redeem the bonds within four years. The Fund treats these bonds as having a maturity of less than four years. Because of their shorter maturities, the Fund’s investments generally will not be as sensitive to changes in prevailing interest rates as are investments in long-term municipal bonds. Fluctuations in interest rates on short-term municipal bonds may, however, vary more widely than those on long-term municipal bonds from time to time.

High Yield Fund

ABOUT THE PORTFOLIO MANAGER OF THE HIGH YIELD FUND

The High Yield Fund is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, and Walter O’Connor. Mr. Jaeckel is the Fund’s lead portfolio manager and is responsible for the day-to-day management of the Fund’s portfolio.

IMPORTANT DEFINITIONS

Distressed Securities — securities that are the subject of bankruptcy proceedings or otherwise in default as to the repayment of principal and/or payment of interest at the time of acquisition by the High Yield Fund or are rated in the lowest rating categories by at least one independent rating agency (CC or lower by S&P or Fitch or Ca or lower by Moody’s), or if unrated, judged to be of comparable quality by the High Yield Fund’s Investment Adviser.

Outlined below are other main strategies the High Yield Fund uses in seeking to achieve its investment objective:

The High Yield Fund may invest in municipal bonds rated in any rating category or in unrated municipal bonds. The Fund will usually invest in municipal bonds that have a maturity of five years or longer. Fund management chooses municipal bonds that it believes offer a relatively high potential for total return relative to their total risk. Although the Fund may invest in municipal bonds in any rating category, Fund management presently intends to invest at least 65% of the Fund’s net assets in medium- to low-quality bonds as rated by at least one independent rating agency (BBB or lower by S&P or Fitch or Baa or lower by Moody’s), or if unrated, judged to be of comparable quality by the Fund’s Investment Adviser. Obligations rated below BBB or Baa are commonly known as “junk bonds.” It is possible that the Fund could invest up to 100% of its assets in junk bonds. Fund management reserves the right to invest less than 65% of the Fund’s net assets in municipal bonds rated BBB or Baa or lower if Fund management determines that there is an insufficient supply of such obligations available for investment.

Other Strategies. In addition to the main strategies discussed above, the High Yield Fund may use certain other investment strategies.

The Fund may also invest up to 10% of its total assets in municipal bonds that are considered distressed securities.

Investment Risks

This section contains a summary discussion of the general risks of investing in the Funds. As with any fund, there can be no guarantee that any Fund will meet its objective or that any Fund’s performance will be positive for any period of time.

Set forth below are the main risks of investing in a Fund:

Market Risk and Selection Risk — Market risk is the risk that one or more markets in which a Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities that Fund management selects will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies.

Credit Risk — Credit risk is the risk that the issuer will be unable to pay the interest or principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of a Fund’s investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation.

Interest Rate Risk — Interest rate risk is the risk that prices of municipal bonds generally increase when interest rates decline and decrease when interest rates increase. Prices of longer term securities generally change more in response to interest rate changes than prices of shorter term securities. A Fund may lose money if short term or long term interest rates rise sharply or otherwise change in a manner not anticipated by Fund management.

Call and Redemption Risk — A bond’s issuer may call a bond for redemption before it matures. If this happens to a bond a Fund holds, the Fund may lose income and may have to invest the proceeds in bonds with lower yields.

General Obligation Bonds — The faith, credit and taxing power of the municipality that issues a general obligation bond secures payment of interest and repayment of principal. Timely payments depend on the issuer’s credit quality, ability to raise tax revenues and ability to maintain an adequate tax base.

Revenue Bonds — Payments of interest and principal on revenue bonds are made only from the revenues generated by a particular facility, class of facilities or the proceeds of a special tax or other revenue source. These payments depend on the money earned by the particular facility or class of facilities, or the amount of revenues derived from another source.

Private Activity Bonds — Municipalities and other public authorities issue private activity bonds to finance development of industrial facilities for use by a private enterprise. The private enterprise pays the principal and interest on the bond, and the issuer does not pledge its faith, credit and taxing power for repayment. If the private enterprise defaults on its payments, a Fund may not receive any income or get its money back from the investment.

Insured Municipal Bonds (Insured Fund) — Insurance guarantees that interest payments on a bond will be made on time and that the principal will be repaid when the bond matures. Either the issuer of the bond or the Fund purchases the insurance. Insurance is expected to protect the Fund against losses caused by a bond issuer’s failure to make interest and principal payments. However, insurance does not protect the Fund or its shareholders against losses caused by declines in a bond’s value. Also, the Fund cannot be certain that any insurance company will make the payments it guarantees. The Fund may lose money on its investment if the insurance company does not make these payments. In addition, if the

Fund purchases the insurance, it must pay the premiums, which will reduce the Fund’s yield. The Fund intends to use only insurance companies that have an AAA credit rating from S&P or Fitch, or an Aaa credit rating from Moody’s. However, if insurance with these ratings is not available, the Fund may use insurance companies with lower ratings or stop purchasing insurance or insured bonds. If a bond’s insurer fails to fulfill its obligations or loses its credit rating, the value of the bond could drop.

Moral Obligation Bonds — Moral obligation bonds are generally issued by special purpose public authorities of a state or municipality. If the issuer is unable to meet its obligations, repayment of these bonds becomes a moral commitment, but not a legal obligation, of the state or municipality.

Municipal Notes — Municipal notes are shorter term municipal debt obligations. They may provide interim financing in anticipation of, and are secured by, tax collection, bond sales or revenue receipts. If there is a shortfall in the anticipated proceeds, the notes may not be fully repaid and a Fund may lose money.

Municipal Lease Obligations — In a municipal lease obligation, the issuer agrees to make payments when due on the lease obligation. The issuer will generally appropriate municipal funds for that purpose, but is not obligated to do so. Although the issuer does not pledge its unlimited taxing power for payment of the lease obligation, the lease obligation is secured by the leased property. However, if the issuer does not fulfill its payment obligation it may be difficult to sell the property and the proceeds of a sale may not cover the Fund’s loss.

Variable Rate Demand Obligations — Variable rate demand obligations (VRDOs) are floating rate securities that combine an interest in a long term municipal bond with a right to demand payment before maturity from a bank or other financial institution. If the bank or financial institution is unable to pay, a Fund may lose money.

Junk Bonds (National Fund and High Yield Fund) — Although junk bonds generally pay higher rates of interest than investment grade bonds, junk bonds are high risk investments that may cause income and principal losses for the Fund. The major risks in junk bond investments include:

•

Junk bonds may be issued by less creditworthy issuers. Issuers of junk bonds may have a larger amount of outstanding debt relative to their assets than issuers of investment grade bonds. In the event of an issuer’s bankruptcy, claims of other creditors may have priority over the claims of junk bond holders, leaving few or no assets available to repay junk bond holders.

•

Prices of junk bonds are subject to extreme price fluctuations. Adverse changes in an issuer’s industry and general economic conditions may have a greater impact on the prices of junk bonds than on other higher rated fixed income securities.

•

Issuers of junk bonds may be unable to meet their interest or principal payment obligations because of an economic downturn, specific issuer developments, or the unavailability of additional financing.

•

Junk bonds frequently have redemption features that permit an issuer to repurchase the security from the Fund before it matures. If the issuer redeems junk bonds, the Fund may have to invest the proceeds in bonds with lower yields and may lose income.

•

Junk bonds may be less liquid than higher rated fixed income securities, even under normal economic conditions. There are fewer dealers in the junk bond market, and there may be significant differences in the prices quoted for junk bonds by the dealers. Because they are less liquid, judgment may play a greater role in valuing certain of the Fund’s securities than is the case with securities trading in a more liquid market.

•

The Fund may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting issuer.

Each Fund may also be subject to certain other risks associated with its investments and investment strategies, including:

Borrowing Risk and Leverage Risk — Each Fund may borrow for temporary or emergency purposes, including to meet redemptions, for the payment of dividends, for share repurchases or for the clearance of transactions. Borrowing may exaggerate changes in the net asset value of a Fund’s shares and in the yield on a Fund’s holdings. Borrowing will cost a Fund interest expense and other fees. The costs of borrowing may reduce a Fund’s return. Certain derivative securities that a Fund may buy or other techniques that the Fund may use may create leverage, including, but not limited to, when issued securities, forward commitments, futures contracts and options.

Derivatives — Each Fund may use derivative instruments to hedge its investments or to seek to enhance returns. Derivatives allow the Fund to increase or decrease its risk exposure more quickly and efficiently than other types of instruments. Derivatives are volatile and involve significant risks, including:

Credit risk — the risk that the counterparty (the party on the other side of the transaction) in a derivative transaction will be unable to honor its financial obligation to the Fund.

Leverage risk — the risk associated with certain types of investments or trading strategies that relatively small market movements may result in large changes in the value of an investment. Certain investments or trading strategies that involve leverage can result in losses that greatly exceed the amount originally invested.

Liquidity Risk — the risk that certain securities may be difficult or impossible to sell at the time that the seller would like or at the price that the seller believes the security is currently worth.

Each Fund may use derivatives for hedging purposes, including anticipatory hedges. Hedging is a strategy in which the Fund uses a derivative to offset the risks associated with other Fund holdings. While hedging can reduce losses, it can also reduce or eliminate gains or cause losses if the market moves in a different manner than anticipated by the Fund or if the cost of the derivative outweighs the benefit of the hedge. Hedging also involves the risk that changes in the value of the derivative will not match those of the holdings being hedged as expected by the Fund, in which case any losses on the holdings being hedged may not be reduced and may be increased. There can be no assurance that the Fund’s hedging strategy will reduce risk or that hedging transactions will be either available or cost effective. None of the Funds is required to use hedging and each may choose not to do so.

Because each Fund may use derivatives to seek to enhance returns, its investments will expose the Fund to the risks outlined above to a greater extent than if the Fund used derivatives solely for hedging purposes. Use of derivatives to seek to enhance returns may be considered speculative.

Indexed and Inverse Floating Rate Securities — Each of the Funds may invest in securities whose potential returns are directly related to changes in an underlying index or interest rate, known as indexed securities. The return on indexed securities will rise when the underlying index or interest rate rises and fall when the index or interest rate falls. The Funds may also invest in securities whose return is inversely related to changes in an interest rate (inverse floaters). In general, income on inverse floaters will decrease when short term interest rates increase and increase when short term interest rates decrease. Investments in inverse floaters may subject the Funds to the risks of reduced or eliminated interest payments and losses of principal. In addition, certain indexed securities and inverse floaters may increase or decrease in value at a greater rate than the underlying interest rate, which effectively leverages the Fund’s investment. As a result, the market value of such securities will generally be more volatile than that of fixed rate, tax-exempt securities.

Swap Agreements — Swap agreements involve the risk that the party with whom a Fund has entered into the swap will default on its obligation to pay the Fund and the risk that the Fund will not be able to meet its obligations to pay the other party to the agreement.

Distressed Securities (High Yield Fund) — The High Yield Fund may invest in municipal bonds that are distressed securities. Distressed securities are speculative and involve substantial risks in addition to the risks of investing in junk bonds. Generally, the Fund will invest in distressed securities when Fund management believes they offer significant potential for higher returns or can be exchanged for other securities that offer this potential. However, there can be no assurance that the Fund will achieve these returns or that the issuer will make an exchange offer or adopt a plan of reorganization. The Fund will generally not receive interest payments on the distressed securities and may incur costs to protect its investment. In addition, distressed securities involve the substantial risk that principal will not be repaid. Distressed securities and any securities received in an exchange for such securities may be subject to restrictions on resale.

When Issued Securities, Delayed Delivery Securities and Forward Commitments —Each Fund may purchase or sell securities that it is entitled to receive on a when issued basis. The Fund may also purchase or sell securities on a delayed delivery basis or through a forward commitment. When issued and delayed delivery securities and forward commitments involve the risk that the security the Fund buys will lose value prior to its delivery. There also is the risk that the security will not be issued or that the other party to the transaction will not meet its obligation. If this occurs, the Fund loses both the investment opportunity for the assets it set aside to pay for the security and any gain in the security’s price.

Taxability Risk — Each Fund intends to minimize the payment of taxable income to shareholders by investing in municipal securities in reliance at the time of purchase on an opinion of bond counsel to the issuer that the interest paid on those securities will be excludable from gross income for Federal income tax purposes. Such securities, however, may be determined to pay, or have paid, taxable income subsequent to a Fund’s acquisition of the securities. In that event, the Internal Revenue Service may demand that a Fund pay Federal income taxes on the affected interest income, and, if the Fund agrees to do so, the Fund’s yield could be adversely affected. If the interest paid on any municipal security held by a Fund is subsequently determined to be taxable, the Fund will dispose of that security as soon as reasonably practicable.

Illiquid Securities — Each Fund may invest up to 15% of its net assets in illiquid securities that it cannot sell within seven days at approximately current value. If the Fund buys illiquid securities, it may be unable to quickly sell them or may be able to sell them only at a price below current value.

Restricted Securities — Restricted securities are securities that cannot be offered for public resale unless registered under the applicable securities laws or that have a contractual restriction that prohibits or limits their resale. They may include private placement securities that have not been registered under the applicable securities laws. Restricted securities may not be listed on an exchange and may have no active trading market.

Restricted securities may be illiquid. The Fund may be unable to sell them on short notice or may be able to sell them only at a price below current value. Also, the Fund may get only limited information about the issuer of a restricted security, so it may be less able to predict a loss. In addition, if Fund management receives material nonpublic information about the issuer, the Fund may as a result be unable to sell the securities.

Statement of Additional Information

If you would like further information about the Funds, including how each Fund invests, please see the Statement of Additional Information.

For a discussion of the Corporation’s policies and procedures regarding the selective disclosure of each Fund’s portfolio holdings, please see the Statement of Additional Information. The Corporation makes each Fund’s top ten holdings available on a monthly basis at www.blackrock.com generally within 5 business days after the end of the month to which the information applies.

Your Account

Pricing of Shares

The Insured Fund and the National Fund each currently offers five share classes, the Short-Term Fund currently offers six share classes (five by this Prospectus) and the High Yield Fund currently offers three share classes. Each share class has its own sales charge and expense structure, allowing you to invest in the way that best suits your needs. Each share class represents the same ownership interest in the portfolio investments of the particular Fund. When you choose your class of shares, you should consider the size of your investment and how long you plan to hold your shares. Your financial adviser or other financial intermediary can help you determine which share class is best suited to your personal financial goals.

For example, if you select Institutional shares of a Fund, you will not pay any sales charge. However, only certain investors may buy Institutional shares. If you select Investor A shares of a Fund, you generally pay a sales charge at the time of purchase and an ongoing service fee of 0.25% per year. You may be eligible for a sales charge reduction or waiver.

If you select Investor C shares, you will invest the full amount of your purchase price, but you will be subject to a distribution fee of 0.75% per year and a service fee of 0.25% per year on an ongoing basis under plans adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Because these fees are paid out of each Fund’s assets on an ongoing basis, over time these fees increase the cost of your investment and may cost you more than paying other types of sales charges. In addition, you may be subject to a deferred sales charge when you sell Investor C shares of a Fund.

Each Fund’s shares are distributed by FAM Distributors, Inc. and BlackRock Distributors, Inc., (collectively, the “Distributors”) each an affiliate of the Investment Adviser.

The table below summarizes key features of each of the share classes of the Insured Fund and the National Fund.

	Investor A	Investor B	Investor C	Investor C1	Institutional

Availability	Generally available through selected securities dealers and other financial intermediaries.	Available only for exchanges and for dividend and capital gain reinvestment.	Generally available through selected securities dealers and other financial intermediaries.	Available only for dividend and capital gain reinvestment.	Limited to certain eligible investors including: • Current Institutional shareholders that meet certain requirements • Participants in certain programs sponsored by the Investment Adviser or its affiliates, or selected securities dealers or other financial intermediaries • Certain employees and affiliates of the Investment Adviser or its affiliates.

Initial Sales Charge?	Yes. Payable at time of purchase. Lower sales charges available for larger investments.	No. Entire purchase price is invested in shares of the Fund.	No. Entire purchase price is invested in shares of the Fund.	No. Entire purchase price is invested in shares of the Fund.	No. Entire purchase price is invested in shares of the Fund.

Deferred Sales Charge?	No. (May be charged for purchases over $1 million that are redeemed within 18 months.)	Yes. Payable if you redeem within six years of purchase.	Yes. Payable if you redeem within one year of purchase.	Yes. Payable if you redeem within one year of purchase.	No.

Service and Distribution Fees?	0.25% Annual Service Fee; No Distribution Fee.	0.25% Annual Service Fee; 0.50% Annual Distribution Fee.	0.25% Annual Service Fee. 0.75% Annual Distribution Fee.	0.25% Annual Service Fee. 0.55% Annual Distribution Fee.	No.

Redemption Fee?	No.	No.	No.	No.	No.

Conversion to Investor A shares?	N/A	Yes, automatically after approximately ten years.	No.	No.	No.

The table below summarizes key features of each of the Short-Term Fund’s share classes.

	Investor A	Investor A1	Investor B	Investor C	Institutional

Availability	Generally available through selected securities dealers and other financial intermediaries.	Available only for dividend and capital gain reinvestment.	Available only for exchanges and for dividend and capital gain reinvestment.	Generally available through selected securities dealers and other financial intermediaries.	Limited to certain eligible investors including: • Current Institutional shareholders that meet certain requirements • Participants in certain programs sponsored by the Investment Adviser or its affiliates, or selected securities dealers or other financial intermediaries • Certain employees and affiliates of the Investment Adviser or its affiliates.

Initial Sales Charge?	Yes. Payable at time of purchase. Lower sales charges available for larger investments.	Yes. Payable at time of purchase. Lower sales charges available for larger investments.	No. Entire purchase price is invested in shares of the Fund.	No. Entire purchase price is invested in shares of the Fund.	No. Entire purchase price is invested in shares of the Fund.

Deferred Sales Charge?	No. (May be charged for purchases over $1 million that are redeemed within 18 months.)	No. (May be charged for purchases over $1 million that are redeemed within one year.)	Yes. Payable if you redeem within three years of purchase.	Yes. Payable if you redeem within one year of purchase.	No.

Services and Distribution Fees?	0.25% Annual Service Fee; No Distribution Fee.	0.10% Annual Service Fee; No Distribution Fee.	0.15% Annual Service Fee; 0.20% Annual Distribution Fee.	0.25% Annual Service Fee. 0.75% Annual Distribution Fee.	No.

Redemption Fee?	No.	No.	No.	No.	No.

Conversion to Investor A1 shares?	No.	N/A	Yes, automatically after approximately ten years.	No.	No.

The table below summarizes key features of each of the High Yield Fund’s share classes.

	Investor A	Investor C	Institutional

Availability	Generally available through selected securities dealers and other financial intermediaries.	Generally available through selected securities dealers and other financial intermediaries.	Limited to certain eligible investors including: • Current Institutional shareholders that meet certain requirements • Participants in certain programs sponsored by the Investment Adviser or its affiliates, or selected securities dealers or other financial intermediaries • Certain employees and affiliates of the Investment Adviser or its affiliates.

Initial Sales Charge?	Yes. Payable at time of purchase. Lower sales charges available for larger investments.	No. Entire purchase price is invested in shares of the Fund.	No. Entire purchase price is invested in shares of the Fund.

Deferred Sales Charge?	No. (May be charged for purchases over $1 million that are redeemed within 18 months.)	Yes. Payable if you redeem within one year of purchase.	No.

Service and Distribution Fees?	0.25% Annual Service Fee; No Distribution Fee.	0.25% Annual Service Fee; 0.75% Annual Distribution Fee.	No.

Redemption Fee?	No.	No.	No.

Conversion to Investor A shares?	N/A	No.	No.

Institutional Shares

Institutional shares are not subject to any sales charge. Only certain investors are eligible to buy Institutional shares. Your financial adviser or other financial intermediary can help you determine whether you are eligible to buy Institutional shares.

Eligible Institutional investors include the following:

•

Investors who currently own Institutional shares of a Fund may make additional purchases of Institutional shares of the Fund except for investors holding shares through certain omnibus accounts at financial intermediaries that are omnibus with the Fund and do not meet the applicable investment minimums

•

Institutional and individual retail investors with a minimum investment of $2 million who purchase through certain broker-dealers or directly from the Transfer Agent

•

Certain qualified retirement plans

•

Investors in selected fee based programs

•

Registered investment advisers with a minimum investment of $250,000

•

Trust department clients of PNC Bank and Merrill Lynch Trust Company and their affiliates for whom they (i) act in a fiduciary capacity (excluding participant directed employee benefit plans); (ii) otherwise have investment discretion; or (iii) act as custodian for at least $2 million in assets

•

Unaffiliated banks, thrifts or trust companies that have agreements with a Distributor

•

Holders of certain Merrill Lynch sponsored unit investment trusts (UITs) who reinvest dividends received from such UITs in shares of a Fund

•

Employees and directors/trustees of BlackRock Inc., BlackRock Funds, Merrill Lynch and Co, Inc. (“Merrill Lynch”), the PNC Financial Services Group, Inc. (“PNC”) or their affiliates

Investor A Shares — Initial Sales Charge Options

If you select Investor A shares, you will pay a sales charge at the time of purchase as shown in the following tables.

Insured Fund, National Fund and High Yield Fund
Your Investment	As a % of Offering Price		As a % of Your Investment(a)		Dealer Compensation as a % of Offering Price

Less than $100,000	4.25	%	4.44	%	4.00	%

$100,000 but less
than $250,000	3.25	%	3.36	%	3.00	%

$250,000 but less than $500,000	2.50	%	2.56	%	2.25	%

$500,000 but less than $1,000,000	2.25	%	2.30	%	2.00	%

$1,000,000 and over(b)	0.00	%	0.00	%	(b)

Short-Term Fund
Your Investment	As a % of Offering Price		As a % of Your Investment(a)		Dealer Compensation as a % of Offering Price

Less than $50,000	3.00	%	3.09	%	2.75	%

$50,000 but less
than $100,000	2.75	%	2.83	%	2.50	%

$100,000 but less than $250,000	2.50	%	2.56	%	2.25	%

$250,000 but less
than $500,000	1.75	%	1.78	%	1.50	%

$500,000 but less than $1,000,000	1.25	%	1.27	%	1.00	%

$1,000,000 and over(b)	0.00	%	0.00	%	(b)

(a)

Rounded to the nearest one-hundredth percent.

(b)

If you invest $1,000,000 or more in Investor A shares, you may not pay an initial sales charge. In that case, the Investment Adviser compensates the selling dealer or other financial intermediary from its own funds. However, if you redeem your shares within 18 months after purchase, you may be charged a deferred sales charge of 0.50% (for the Insured Fund, the National Fund and the High Yield Fund) and 0.15% (for the Short-Term Fund). Such deferred sales charge may be waived in connection with certain fee-based programs.

Investor A1 shares of the Short-Term Fund are available only for reinvestment of dividends and capital gains. You may exchange your Investor A1 shares for Investor A shares of another BlackRock Fund, but if you exchange for a class with a higher front end sales charge, that higher charge may apply.

No initial sales charge applies to Investor A or Investor A1 shares that you buy through reinvestment of Fund dividends.

The tables above show the reduced sales charges for which you may qualify when you purchase Investor A shares of a Fund. You may qualify for these reductions through a single purchase or under a

IMPORTANT DEFINITIONS

Right of Accumulation — permits you to pay the sales charge that would apply to the current value of all qualifying Investor class and Institutional shares taken together that you own in BlackRock Funds.

Letter of Intent — permits you to pay the sales charge that would apply if you add up all qualifying Investor class and Institutional shares of BlackRock Funds that you agree to buy within a 13-month period. Certain restrictions apply.

right of accumulation or letter of intent. These reductions will apply to the value of all qualifying holdings in shares of a Fund or other mutual funds advised by the Investment Adviser or its affiliates (“BlackRock Funds”) owned by you, your spouse and/or your children under the age of twenty-one and by a single trustee of a trust estate or a single fiduciary for the benefit of such persons. For this purpose, the value of your holdings means the offering price of the newly purchased shares (including any applicable sales charge) plus the current value (including any sales charges paid) of all other shares you already hold taken together. You may not combine with your other holdings shares held in pension, profit sharing or other employee benefit plans if those shares are held in the name of a nominee or custodian.

In order to receive a reduced sales charge, at the time you purchase shares of a Fund or any other BlackRock Fund, you should inform your financial adviser or other financial intermediary or the Transfer Agent of any other shares of a Fund or any other BlackRock Fund owned by you, your spouse and/or your children under the age of twenty one. These may include shares held in accounts held at a selected securities dealer or another broker-dealer or other financial intermediary, including personal accounts, certain retirement accounts, employee benefit plan accounts, UGMA/UTMA accounts, Joint Tenancy accounts, trust accounts and Transfer on Death accounts, as well as shares purchased by a trust of which you are a beneficiary. Your financial adviser or other financial intermediary may request documentation — including account statements and records of the original cost of the shares owned by you, your spouse and/or your children under the age of twenty one — from you to show that you qualify for a reduced sales charge. You should retain these records because — depending on where an account is held or the type of account — the Fund, its Transfer Agent, and/or your financial adviser or other financial intermediary may not be able to maintain this information. If you do not notify your financial adviser or other financial intermediary, or the BlackRock Funds, you may not receive the sales charge reduction to which you are otherwise entitled.

A sales charge waiver on a purchase of Investor A shares may also apply for:

•

Authorized qualified employee benefit plans or savings plans and rollovers of current investments in a Fund through such plans

•

Persons investing through an authorized payroll deduction plan

•

Person investing through an authorized investment plan for organizations that operate under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”)

•

Registered investment advisers, trust companies and bank trust departments exercising discretionary investment authority with respect to amounts to be invested in a Fund

•

Persons associated with a Fund, a Fund’s Distributors, a Fund’s investment adviser, sub-adviser or Transfer Agent, and their affiliates

•

Persons participating in a fee-based program under which they (i) pay advisory fees to a broker-dealer or other financial institution or (ii) pay fees to a broker-dealer or other financial institution for providing transaction processing and other administrative services, but not investment advisory services

•

Employees of MetLife

If you invest $1,000,000 or more in Investor A shares, you will not pay any initial sales charge. However, if you redeem your Investor A shares within 18 months after purchase, you may be charged a deferred sales charge of 0.50% (.15% for the Short-Term Fund) of the lesser of the original cost of the shares being redeemed or your redemption proceeds. The deferred sales charge on Investor A shares is not charged in connection with (a) redemptions of Investor A shares purchased through authorized qualified employee benefit plans or savings plans and rollovers of current investments in the Fund through such plans; (b) exchanges described in “Exchange Privilege” below; (c) redemptions made in connection with minimum required distributions due to the shareholder reaching age 70¹/2 from IRA and 403(b)(7) accounts; (d) redemptions made with respect to certain retirement plans sponsored by the Fund, BlackRock or its affiliates; (e) redemptions (i) within one year of a shareholder’s death or, if later, the receipt of a certified probate settlement (including in connection with the distribution of account assets to a beneficiary of the decedent) or (ii) in connection with a shareholder’s disability (as defined in the Internal Revenue Code) subsequent to the purchase of Investor A shares; (f) involuntary redemptions of Investor A shares in accounts with low balances; (g) certain redemptions made pursuant to the Systematic Withdrawal Plan (described below); (h) redemptions related to the payment of PFPC custodial IRA fees; and (i) redemptions when a shareholder can demonstrate hardship, in the absolute discretion of the Fund.

More information about existing sales charge reductions and waivers is available free of charge in a clear and prominent format via hyperlink at www.blackrock.com and in the Statement of Additional Information, which is available on the website or by request.

If you are eligible to buy both Investor A and Institutional shares, you should buy Institutional shares since Investor A shares are subject to a front end sales charge and an annual 0.25% service fee, while Institutional shares are not. The Distributors normally pay the annual Investor A or Investor A1 shares service fee to dealers as a shareholder servicing fee on a monthly basis.

If you redeem any class of shares (other than Investor C or Investor C1) and within 60 days buy new Investor A shares of the SAME Fund, you will not pay a sales charge on the new purchase amount. The amount eligible for this “Reinstatement Privilege” may not exceed the amount of your redemption proceeds and you may only exercise this privilege once in any twelve month period. To exercise the privilege, contact your financial adviser, selected securities dealer, other financial intermediary or notify the Fund’s Transfer Agent in writing at the address listed on the back cover of this Prospectus.

Investor B, and Investor C and Investor C1 Shares — Deferred Sales Charge Options

If you select Investor B, Investor C or Investor C1 shares, you do not pay an initial sales charge at the time of purchase. Investor B and Investor C1 shares of the Funds are available for purchase only through reinvestment of dividends and capital gains for current holders of such shares of the Funds.

If you redeem your Investor B shares within six years (or within three years for the Short-Term Fund) or your Investor C or Investor C1 shares within one year after purchase, you may be required to pay a deferred sales charge. No deferred sales charge applies to shares that you acquire through reinvestment of Fund dividends and capital gains. If you are a current shareholder of Investor B or Investor C1 shares, you may exchange your Investor B shares for Investor B shares and your Investor C1 shares for Investor C shares of another BlackRock Fund. The sales charge that would have applied to a redemption of your original shares will also apply to a redemption of the shares you acquire in the exchange. You will also pay ongoing combined distribution and service fees as follows:

Investor B Investor C Investor C1

          Insured Fund 0.75 % 1.00 % 0.80 %

          National Fund 0.75 % 1.00 % 0.80 %

          Short-Term Fund 0.35 % 1.00 % N/A

          High Yield Fund N/A 1.00 % N/A

40

Because these fees are paid out of each Fund’s assets on an ongoing basis, over time these fees increase the cost of your investment and may cost you more than paying other types of sales charges. Each Distributor uses the money that it receives from the deferred sales charges and the distribution fees to cover the costs of marketing, advertising and compensating the financial adviser, selected securities dealer or other financial intermediary who assists you in purchasing Fund shares.

Each Distributor currently pays dealers a sales concession of 4.00% (for Insured Fund and National Fund) and 1.00% (for Short-Term Fund) of the purchase price of Investor B shares to dealers from its own resources at the time of sale. Each Distributor also normally pays the annual Investor B shares service fee to dealers as a shareholder servicing fee on a monthly basis. Each Distributor normally retains the Investor B shares distribution fee.

Each Distributor currently pays dealers a sales concession of 1.00% of the purchase price of Investor C and Investor C1 shares from its own resources at the time of sale. Each Distributor pays the annual Investor C and Investor C1 shares service fee as a shareholder servicing fee and the annual Investor C and Investor C1 shares distribution fee as an ongoing concession to dealers on a monthly basis for Investor C and Investor C1 shares held for over a year and normally retains the Investor C and Investor C1 shares distribution fee and service fee during the first year after purchase. Under certain circumstances, a Distributor will pay the full Investor C and Investor C1 shares distribution fee and service fee to dealers beginning in the first year after purchase in lieu of paying the sales concession.

Investor B Shares

If you redeem Investor B shares of the Insured Fund or the National Fund within six years after purchase or the Short-Term Fund within three years after purchase, you may be charged a deferred sales charge. The amount of the charge gradually decreases as you hold your shares over time, according to the following schedules:

Insured Fund and National Fund
Years Since Purchase	Sales Charge(a)

0 – 1	4.00	%

1 – 2	4.00	%

2 – 3	3.00	%

3 – 4	3.00	%

4 – 5	2.00	%

5 – 6	1.00	%

6 and thereafter	0.00	%

Short-Term Fund
Years Since Purchase	Sales Charge(a)

0 – 1	1.00	%

1 – 2	0.50	%

2 – 3	0.25	%

3 and thereafter	0.00	%

(a)

The percentage charge will apply to the lesser of the original cost of the shares being redeemed or the proceeds of your redemption. Shares acquired through reinvestment of dividends are not subject to a deferred sales charge. Not all BlackRock Funds have identical deferred sales charge schedules. If you exchange your shares for shares of another fund, the original charge will apply.

Your Investor B shares convert automatically into Investor A shares (for the Insured Fund and the National Fund) and into Investor A1 shares (for the Short-Term Fund) approximately ten years after purchase. Any Investor B shares received through reinvestment of dividends paid on converting shares will also convert pro rata based on the amount of shares being converted. Investor A and Investor A1 shares are subject to lower annual expenses than Investor B shares. The conversion of Investor B shares to Investor A or Investor A1 shares is not a taxable event for federal income tax purposes.

Different conversion schedules apply to Investor B shares of different BlackRock Funds. For example, Investor B shares of a fixed-income fund typically convert approximately ten years after purchase compared to approximately eight years for equity funds. If you acquire your Investor B shares in an exchange from another fund with a different conversion schedule, the conversion schedule that applies to the shares you acquire in the exchange will apply. The length of time that you hold both the original and exchanged Investor B shares in both funds will count toward the conversion schedule. The conversion schedule may be modified in certain other cases as well.

Investor C and Investor C1 Shares

If you redeem Investor C or Investor C1 shares within one year after purchase, you may be charged a deferred sales charge of 1.00%. The charge will apply to the lesser of the original cost of the shares being redeemed or the proceeds of your redemption. You will not be charged a deferred sales charge when you redeem shares that you acquire through reinvestment of Fund dividends or capital gains.

Investor C and Investor C1 shares do not offer a conversion privilege.

Contingent Deferred Sales Charge Waivers

The deferred sales charge relating to Investor B, Investor C and Investor C1 shares may be reduced or waived in certain circumstances, such as:

•

Redemptions of shares purchased through authorized qualified employee benefit plans or savings plans and rollovers of current investments in a Fund through such plans

•

Exchanges pursuant to the exchange privilege

•

Redemptions made in connection with minimum required distributions from IRA or 403(b)(7) accounts due to the shareholder reaching the age of 701/2

•

Certain post-retirement withdrawals from an IRA or other retirement plan if you are over 591/2 years old and you purchased your shares prior to October 2, 2006

•

Redemptions made with respect to certain retirement plans sponsored by a Fund, BlackRock or an affiliate

•

Redemptions resulting from shareholder death as long as the waiver request is made within one year of death or, if later, reasonably promptly following completion of probate (including in connection with the distribution of account assets to a beneficiary of the decedent)

•

Withdrawals resulting from shareholder disability (as defined in the Internal Revenue Code) as long as the disability arose subsequent to the purchase of the shares

•

Involuntary redemptions made of shares in accounts with low balances

•

Certain redemptions made through the systematic withdrawal plan offered by a Fund, the Investment Adviser or an affiliate

•

Redemptions related to the payment of PFPC custodial IRA fees

•

Redemptions when a shareholder can demonstrate hardship, in the absolute discretion of the Fund

Distribution and Service Plans

The Funds have adopted plans (the “Plans”) that allow each Fund to pay distribution fees for the sale of its shares under Rule 12b-1 of the Investment Company Act of 1940, as amended, and shareholder servicing fees for certain services provided to its shareholders.

Under the Plans, Investor B, Investor C and Investor C1 shares pay a fee (“distribution fees”) to BlackRock Distributors, Inc. and FAM Distributors, Inc. (collectively, the “Distributor”), and/or affiliates of PNC Bank or Merrill Lynch & Co., Inc. (“Merrill Lynch”) (including BlackRock) for distribution and sales support services. The distribution fees may be used to pay the Distributor for distribution services and to pay the Distributor and affiliates of PNC Bank or Merrill Lynch (including BlackRock) for sales support services provided in connection with the sale of Investor B, Investor C and Investor C1 shares. The distribution fees may also be used to pay brokers, dealers, financial institutions and industry professionals (including BlackRock, PNC Bank, Merrill Lynch and their affiliates) (“Service Organizations”) for sales support services and related expenses. All Investor B, Investor C and Investor C1 shares pay a maximum distribution fee per year that is a percentage of the average daily net asset value of the applicable Fund attributable to Investor B, Investor C and Investor C1 shares. Institutional, Investor A and Investor A1 shares do not pay a distribution fee.

Under the Plans, a Fund also pays shareholder servicing fees to Service Organizations whereby the Service Organizations provide support services to their customers who own Investor class shares in return for these fees. A Fund may pay a shareholder servicing fee per year that is a percentage of the average daily net asset value of Investor class shares of the Fund. All Investor class shares pay this shareholder servicing fee. Institutional shares do not pay a shareholder servicing fee.

In return for the shareholder servicing fee, Service Organizations (including BlackRock) may provide one or more of the following services to their customers who own Investor class shares:

	(1)		Responding to customer questions on the services performed by the Service Organization and investments in Investor class shares;

	(2)		Assisting customers in choosing and changing dividend options, account designations and addresses; and

	(3)		Providing other similar shareholder liaison services.

The shareholder servicing fees payable pursuant to the Plans are fees payable for the administration and servicing of shareholder accounts and not costs which are primarily intended to result in the sale of a Fund’s shares.

Because the fees paid by the Funds under the Plans are paid out of Fund assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. In addition, the distribution fees paid by Investor B, Investor C and Investor C1 shares may over time cost investors more than the front-end sales charge on Investor A shares. For more information on the Plans, including a complete list of services provided thereunder, see the Statement of Additional Information.

In addition to, rather than in lieu of, distribution and shareholder servicing fees that a Fund may pay to a Service Organization pursuant to a Plan and fees that a Fund pays to its transfer agent, a Fund may enter into non-Plan agreements with Service Organizations pursuant to which the Fund will pay a Service Organization for administrative, networking, recordkeeping, subtransfer agency and shareholder services. These non-Plan payments are generally based on either (1) a percentage of the average daily net assets of Fund shareholders serviced by a Service Organization or (2) a fixed dollar amount for each account serviced by a Service Organization. The aggregate amount of these payments may be substantial.

The Plans permit BlackRock, the Distributor and their affiliates to make payments relating to distribution and sales support activities out of their past profits or other sources available to them (and not as an additional charge to the Funds). From time to time, BlackRock, the Distributor or their affiliates also may pay a portion of the fees for administrative, networking, recordkeeping, sub-transfer agency and shareholder services described above at its or their own expense and out of its or their profits. BlackRock, the Distributor and their affiliates may compensate affiliated and unaffiliated Service Organizations for the sale and distribution of shares of the Funds or for these other services to the Funds and shareholders. These payments would be in addition to the Fund payments described in this Prospectus and may be a fixed dollar amount, may be based on the number of customer accounts maintained by the Service Organization, or may be based on a percentage of the value of shares sold to, or held by, customers of the Service Organization. The aggregate amount of these payments by BlackRock, the Distributor and their affiliates may be substantial. Payments by BlackRock may include amounts that are sometimes referred to as “revenue sharing” payments. In some circumstances, these revenue sharing payments may create an incentive for a Service Organization, its employees or associated persons to recommend or sell shares of a Fund to you. Please contact your Service Organization for details about payments it may receive from a Fund or from BlackRock, the Distributor or their affiliates. For more information, see the Statement of Additional Information.

How to Buy, Sell, Transfer and Exchange Shares

The chart on the following pages summarizes how to buy, sell, transfer and exchange shares through your financial adviser, a selected securities dealer, broker, investment adviser, service provider or other financial intermediary. You may also buy, sell, transfer and exchange shares through the Transfer Agent. To learn more about buying, selling, transferring or exchanging shares through the Transfer Agent, call 1-800-441-7762. Because the selection of a mutual fund involves many considerations, your financial adviser or other financial intermediary may help you with this decision.

Because of the high costs of maintaining smaller shareholder accounts, each Fund may redeem the shares in your account (without charging any deferred sales charge) if the net asset value of your account falls below $500 due to redemptions you have made. You will be notified that the value of your account is less than $500 before a Fund makes an involuntary redemption. You will then have 60 days to make an additional investment to bring the value of your account to at least $500 before a Fund takes any action. This involuntary redemption does not apply to Uniform Gifts or Transfers to Minors Act accounts.

If You Want To	Your Choices	Information Important for You to Know

Buy Shares	First, select the share class appropriate for you	Refer to the share class table in this Prospectus. Be sure to read this Prospectus carefully.

	Next, determine the amount of your investment	The Fund will not accept a purchase order of $500,000 or more for Investor C shares. Your registered representative may set a lower maximum for Investor C share purchases. The minimum initial investment for Investor A and Investor C shares of a Fund is $1,000 for all accounts except that it is $250 for certain fee-based programs. The minimum initial investment for Institutional shares of a Fund is: $2 million for institutions and individuals $250,000 for registered investment advisers (The minimums for initial investments may be waived under certain circumstances.) Investor A1, Investor B and Investor C1 shares are not generally available for purchase.

	Have your financial adviser, selected securities dealer or other financial intermediary submit your purchase order	The price of your shares is based on the next calculation of net asset value after your order is placed. Any purchase orders placed by the close of business on the New York Stock Exchange (generally 4:00 pm Eastern time) will be priced at the net asset value determined that day. Certain financial intermediaries, however, may require submission of orders prior to that time. Purchase orders placed after that time will be priced at the net asset value determined on the next business day. Each Fund may reject any order to buy shares and may suspend the sale of shares at any time. Selected securities dealers or other financial intermediaries may charge a processing fee to confirm a purchase.

	Or contact the Transfer Agent	To purchase shares directly, call 1-800-441-7762 and request a purchase application. Mail the completed purchase application to the Transfer Agent at the address on the inside back cover of this Prospectus.

Add to Your Investment	Purchase additional shares	The minimum investment for additional purchases is generally $50 for all accounts except that certain programs, such as automatic investment plans, may have higher minimums. (The minimums for additional purchases may be waived under certain circumstances.)

	Acquire additional shares through the automatic dividend reinvestment plan	All dividends and capital gains distributions are automatically reinvested without a sales charge.

	Participate in the automatic investment plan	You may invest a specific amount on a periodic basis through your investment account.

Transfer Shares to Another Securities Dealer or Other Financial Intermediary	Transfer to a participating securities dealer or other financial intermediary	You may transfer your shares of a Fund only to another securities dealer that has entered into an agreement with a Distributor. Certain shareholder services may not be available for the transferred shares. All future trading of these assets must be coordinated by the receiving firm.

	Transfer to a non-participating securities dealer or other financial intermediary	You must either: Transfer your shares to an account with the Transfer Agent; or Sell your shares, paying any applicable deferred sales charges.

If You Want To	Your Choices	Information Important for You to Know

Sell Your Shares	Have your financial adviser, selected securities dealer or other financial intermediary submit your sales order	The price of your shares is based on the next calculation of net asset value after your order is placed. For your redemption request to be priced at the net asset value on the day of your request, you must submit your request to your dealer or other financial intermediary prior to that day’s close of business on the New York Stock Exchange (generally 4:00 p.m. Eastern time). Certain financial intermediaries, however, may require submission of orders prior to that time. Any redemption request placed after that time will be priced at the net asset value at the close of business on the next business day. Securities dealers or other financial intermediaries may charge a fee to process a redemption of shares. A Fund may reject an order to sell shares under certain circumstances.

	Sell through the Transfer Agent	You may sell shares held at the Transfer Agent by writing to the Transfer Agent. All shareholders on the account must sign the letter. A signature guarantee will generally be required, but may be waived in certain limited circumstances. You can obtain a signature guarantee from a bank, securities dealer, securities broker, credit union, savings association, national securities exchange or registered securities association. A notary public seal will not be acceptable. If you hold stock certificates, return the certificates with the letter. The Transfer Agent will normally mail redemption proceeds within seven days following receipt of a properly completed request. If you make a redemption request before a Fund has collected payment for the purchase of shares, the Fund or the Transfer Agent may delay mailing your proceeds. This delay will usually not exceed ten days. You may also sell shares held at the Transfer Agent by telephone request if certain conditions are met and if the amount being sold is less than (i) $100,000 for payments by check, (ii) $250,000 for payments through the Automated Clearing House Network (ACH) or wire transfer or (iii) $10,000,000 for sales of Institutional shares. Call 1-800-441-7762 for details. Redemption requests in excess of these amounts must be in writing with a medallion signature guarantee. Redemption proceeds may be paid by check or, if a Fund has verified banking information on file, through ACH or by wire transfer. Investor shares may also be redeemed by use of a Fund’s automated voice response unit service (VRU). Payment for Investor shares redeemed by VRU or Internet may be made for non-retirement accounts in amounts up to $25,000, either through check, ACH or wire. You will be charged a fee of $7.50 for each redemption payment made by wire transfer and $15 for redemptions by check sent via overnight mail. You are responsible for any additional charges imposed by your bank for this service.

If You Want To	Your Choices	Information Important for You to Know

Sell Shares Systematically	Participate in a Fund’s Systematic Withdrawal Plans	To start a Systematic Withdrawal Plan (“SWP”), you must have a current investment of $10,000 or more in a BlackRock Fund. Shareholders can elect to receive cash payments of $50 or more at any interval they choose. Shareholders may sign up by completing the SWP Application Form, which may be obtained from the Transfer Agent. To participate, you must have your Fund dividends automatically reinvested. You may change or cancel the SWP at any time, upon written notice to the Transfer Agent. If you purchase additional Investor A shares of a BlackRock Fund at the same time you redeem shares through the SWP, you may lose money because of the sales charge involved. No CDSC will be assessed on redemptions of Investor B, Investor C or Investor C1 shares made through the SWP that do not exceed 12% of the account’s net asset value on an annualized basis. For example, monthly, quarterly and semi-annual SWP redemptions of Investor B, Investor C or Investor C1 shares will not be subject to the CDSC if they do not exceed 1%, 3% and 6%, respectively, of an account’s net asset value on the redemption date. SWP redemptions of Investor B, Investor C or Investor C1 shares in excess of this limit will still pay any applicable CDSC. Ask your financial adviser or other financial intermediary for details.

Exchange Your Shares	Select the fund into which you want to exchange. Be sure to read that fund’s prospectus	Investor A, Investor B, Investor C and Institutional shares of each Fund are generally exchangeable for shares of the same class of another BlackRock Fund. If you own Investor A1 shares of the Short-Term Fund and wish to exchange into another fund, you will receive Investor A shares of the second fund. If you own Investor C1 shares and wish to exchange into another fund, you will receive Investor C shares of the second fund. You must have held the shares used in the exchange for at least 15 calendar days before you can exchange to another fund. Some of the BlackRock Funds impose a different initial or deferred sales charge schedule. If you exchange Investor A or Investor A1 shares for shares of a fund with a higher initial sales charge than you originally paid, you may be charged the difference at the time of exchange. If you exchange Investor B, Investor C or Investor C1 shares for shares of a fund with a different deferred sales charge schedule, the schedule that applies to your original shares will apply to the shares you receive in the exchange. The time you hold Investor B, Investor C or Investor C1 shares in both funds will count when determining your holding period for calculating a deferred sales charge at redemption. If you exchange Investor A, Investor A1 or Institutional shares for shares of BlackRock Summit Cash Reserves Fund, you will receive Investor A shares of BlackRock Summit Cash Reserves Fund. Investor B, Investor C or Investor C1 shares of a Fund will be exchanged for Investor B shares of BlackRock Summit Cash Reserves Fund. You may systematically exchange monies from one fund to up to four other funds. You must have a minimum of $10,000 invested in the initial fund, and investments in any additional funds must meet minimum initial investment requirements. To exercise the exchange privilege contact your financial adviser, selected securities dealer or other financial intermediary or call the Transfer Agent at 1-800-441-7762. Although there is currently no limit on the number of exchanges that you can make, the exchange privilege may be modified or terminated at any time in the future.

If You Want To	Your Choices	Information Important for You to Know

EZ Trader Account	Allows an investor to purchase or sell Fund shares by telephone or over the Internet through ACH.	Prior to establishing an EZ Trader account, please contact your bank to confirm that it is a member of the ACH system. Once confirmed, complete an application, making sure to include the appropriate bank information, and return the application to BlackRock Funds, c/o PFPC Inc., P.O. Box 9819, Providence, Rhode Island 02940-8019. Prior to placing a telephone or internet purchase or sale order, please contact the Fund at 1-800-441-7762 to confirm that your bank information has been updated on your account. Once this is established, you may place your request to sell shares with the Fund by telephone or Internet. Proceeds will be sent to your pre-designated bank account.

Dividend Allocation Plan	Automatically invests your distributions into another fund of your choice pursuant to your instructions, without any fees or sales charges.	Please call the Fund at 1-800-441-7762 for details.

Internet Transactions	Make on-line transactions and view account balances and activity	You may redeem or exchange your shares, and view activity in your account, by logging onto the BlackRock website at www.blackrock.com/funds. To use this service, you will need a browser that supports Microsoft Internet Explorer 5.5 or higher, Netscape 7.1 or higher, Firefox 1.0 or higher, and AOL 8.0 (for Windows operating systems from Windows 2000 and above). In addition, MacIntosh operating system 9 with Netscape 6.2 and MacIntosh operating system 10x with Safari 1.2.3, Netscape 6.2, and Firefox 1.0 are also supported. Purchases made on the Internet using ACH will have a trade date that is the day after the purchase is made. Proceeds from Internet redemptions may be sent via check, ACH or wire to the bank account of record. The Funds limit Internet purchases and redemptions in shares of any Fund to $25,000 per trade. Please read the On-Line Services Disclosure Statement and User Agreement, the Terms and Conditions page and the Consent to Electronic Delivery Agreement (if you consent to electronic delivery), before attempting to transact online. The Funds employ reasonable procedures to confirm that transactions entered over the Internet are genuine. The procedures include the use of a protected password, Secure Socket Layering (SSL), 128-bit encryption and other precautions designed to protect the integrity, confidentiality and security of shareholder information. By entering into the User Agreement with a Fund in order to open an account through the website, the shareholder waives any right to reclaim any losses from the Fund or any of its affiliates, incurred through fraudulent activity.

Short Term Trading

Each Fund reserves the right to reject any purchase order, including exchanges. Short-term or excessive trading (sometimes known as “market timing”) into and out of a Fund, particularly in larger amounts, may harm performance by disrupting portfolio management strategies and by increasing expenses, including brokerage and administrative costs, and may also dilute the value of the holdings of other shareholders of a Fund. Short-term or excessive trading may cause a Fund to retain more cash than the portfolio manager would normally retain in order to meet unanticipated redemptions or may force a Fund to sell portfolio securities at disadvantageous times to raise the cash needed to meet those redemption or exchange requests. Accordingly, the Corporation has adopted certain policies and procedures, which have been reviewed and approved by the Corporation’s Board of Directors, designed to deter such short-term or excessive trading. Shareholders may not exchange their shares of a Fund for shares of another mutual fund advised by the Investment Adviser or its affiliates unless they have held the shares to be used in the exchange for at least fifteen days. A Fund will reject purchase orders from investors who have previously purchased and sold shares of the Fund within a fifteen day period. In addition, a Fund will reject purchase orders, including exchanges that fall both within and outside the fifteen day holding period, from market timers or other investors if Fund management, in its discretion, has determined that such orders are short-term or excessive, and will be disruptive to a Fund. For these purposes, Fund management considers an investor’s trading history in the Fund or other funds advised by the Investment Adviser or its affiliates, and accounts under common ownership or control. Each Distributor has entered into agreements with respect to financial advisers and other financial intermediaries that maintain omnibus accounts with the Corporation’s Transfer Agent pursuant to which such financial advisers and other financial intermediaries undertake to cooperate with the Distributors in monitoring purchase, exchange and redemption orders by their customers in order to detect and prevent short-term or excessive trading in the Funds’ shares through such accounts.

The high yield securities in which the High Yield Fund invests often trade less often and in lower volumes than investment grade securities and are often subject to greater price volatility. For this reason, the High Yield Fund is subject to the risk that certain investors may seek to market time the Fund to take advantage of the changes in the value of the Fund’s portfolio holdings that may occur between the time when the Fund’s net asset value is calculated and the time the prices of the Fund’s holdings next change. For this reason, the High Yield Fund may, at times, fair value its portfolio securities in order to deter such market timing. See “Your Account — How Shares are Priced.”

Each Fund applies these policies to all shareholders. However, Fund management may not be able to determine that a specific order, particularly with respect to orders made through omnibus accounts or 401(k) plans, is short-term or excessive, and will be disruptive to the Fund and so makes no representation that all such orders can or will be rejected.

Anti-Money Laundering Requirements

The Corporation is subject to the USA Patriot Act (the “Patriot Act”). The Patriot Act is intended to prevent the use of the U.S. financial system in furtherance of money laundering, terrorism or other illicit activities. Pursuant to requirements under the Patriot Act, a Fund may request information from shareholders to enable it to form a reasonable belief that it knows the true identity of its shareholders. This information will be used to verify the identity of investors or, in some cases, the status of financial advisers; it will be used only for compliance with the requirements of the Patriot Act. The Funds reserve the right to reject purchase orders from persons who have not submitted information sufficient to allow a Fund to verify their identity. Each Fund also reserves the right to redeem any amounts in a Fund from persons whose identity it is unable to verify on a timely basis. It is the Funds’ policy to cooperate fully with appropriate regulators in any investigations conducted with respect to potential money laundering, terrorism or other illicit activities.

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their nonpublic personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties. If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock does not sell or disclose to nonaffiliated third parties any nonpublic personal information about its Clients, except as permitted by law, or as is necessary to respond to regulatory requests or to

service Client accounts. These nonaffiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to nonpublic personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the nonpublic personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

How Shares Are Priced

IMPORTANT DEFINITIONS

Net Asset Value — the market value of a Fund’s total assets after deducting liabilities, divided by the number of shares outstanding.

When you buy shares, you pay the net asset value, plus any applicable sales charge. This is the offering price. Shares are also redeemed at their net asset value, minus any applicable deferred sales charge. Each Fund calculates the net asset value of each class of its shares (generally by using market quotations) each day the New York Stock Exchange (the “Exchange”) is open, as of the close of business on the Exchange based on prices at the time of closing. The Exchange generally closes at 4:00 p.m. Eastern time. The net asset value used in determining your share price is the next one calculated after your purchase or redemption order is placed.

Generally, Institutional shares will have the highest net asset value because that class has the lowest expenses, and Investor A and Investor A1 shares will have a higher net asset value than Investor B, Investor C or Investor C1 shares. Also dividends paid on Investor A, Investor A1 and Institutional shares will generally be higher than dividends paid on Investor B, Investor C or Investor C1 shares because Investor A, Investor A1 and Institutional shares have lower expenses.

Each Fund generally values its portfolio securities using market prices provided by an independent pricing service pursuant to a policy approved by the Corporation’s Board of Directors. If market quotations are not readily available or, in the Investment Adviser’s judgment, they do not accurately reflect fair value for a security, that security will be valued by another method that the Board of Directors believes more accurately reflects the fair value. The Board has adopted valuation procedures for the Funds and has delegated the day-to-day responsibility for fair value determinations to the Investment Adviser’s Valuation Committee. Fair value determinations may be made by the Funds’ independent pricing service using a matrix pricing system or by the Valuation Committee after consideration of the material factors that may affect the value of a particular security. Fair value determinations by the Investment Adviser that affect a Fund’s net asset value are subject to review, approval or ratification, as appropriate, by

the Board of Directors. Each Fund’s use of fair value pricing is designed to ensure that the Fund’s net asset value reflects the value of its underlying portfolio securities as accurately as possible. There can be no assurance, however, that a fair value used by a Fund on any given day will more accurately reflect the market value of a security or securities than the market price of such security or securities on that day.

A Fund may accept orders from certain authorized financial intermediaries or their designees. A Fund will be deemed to receive an order when accepted by the intermediary or designee and the order will receive the net asset value next computed by the Fund after such acceptance. If the payment for a purchase order is not made by a designated later time, the order will be canceled and the financial intermediary could be held liable for any losses.

Participation in Fee-Based Programs

If you participate in certain fee-based programs offered by the Investment Adviser or an affiliate of the Investment Adviser, or selected securities dealers or other financial intermediaries that have agreements with the Distributors, you may be able to buy Institutional shares, including by exchanges from other share classes. Sales charges on the shares being exchanged may be reduced or waived under certain circumstances. You generally cannot transfer shares held through a fee-based program into another account. Instead, you will have to redeem your shares held through the program and purchase shares of another class, which may be subject to distribution and account maintenance fees. This may be a taxable event and you will pay any applicable sales charges.

Shareholders that participate in a fee-based program generally have two options at termination. The program can be terminated and the shares liquidated or the program can be terminated and the shares held in an account. In general, when a shareholder chooses to continue to hold the shares, whatever share class was held in the program can be held after termination. Shares that have been held for less than specified periods within the program may be subject to a fee upon redemption. Shareholders that held Investor A, Investor A1 or Institutional shares in the program are eligible to purchase additional shares of the respective share class of a Fund, but may be subject to upfront sales charges with respect to Investor A or Investor A1 shares. Additional purchases of Institutional shares are available only if you have an existing position at the time of purchase or are otherwise eligible to purchase Institutional shares.

Details about these features and the relevant charges are included in the client agreement for each fee-based program and are available from your financial adviser, selected securities dealer or other financial intermediary.

Dividends and Taxes

IMPORTANT DEFINITIONS

Dividends — exempt interest, ordinary income and capital gains paid to shareholders. Dividends may be reinvested in additional Fund shares as they are paid.

“BUYING A DIVIDEND”

You may want to avoid buying shares shortly before a Fund pays a dividend although the impact on you will be significantly less than if you were invested in a fund paying fully taxable dividends. The reason? If you buy shares when a Fund has realized but not yet distributed taxable ordinary income or capital gains, you will pay the full price for the shares and then receive a portion of the price back in the form of a taxable dividend. Before investing you may want to consult your tax adviser.

Each Fund will distribute net investment income, if any, monthly and net realized capital gains, if any, at least annually. Each Fund may also pay a special distribution at the end of the calendar year to comply with Federal tax requirements. Dividends may be reinvested automatically in shares of a Fund at net asset value without a sales charge or may be taken in cash. If you would like to receive dividends in cash, contact your financial adviser, selected securities dealer, other financial intermediary or the Transfer Agent.

Each Fund intends to make distributions most of which will be excludable from gross income for Federal income tax purposes.

A Fund will only purchase a municipal security if it is accompanied by an opinion of counsel to the issuer, which is delivered on the date of issuance of the security, that the interest paid on such security is excludable from gross income for Federal income tax purposes. To the extent that the dividends distributed by a Fund are from bond interest income that is excludable from gross income for Federal income tax purposes, they are exempt from Federal income tax.

There is a possibility that events occurring after the date of issuance of a security, or after a Fund’s acquisition of a security, may result in a determination that the interest on that security is, in fact, includable in gross income for Federal income tax purposes retroactively to its date of issue. Such a determination may cause a portion of prior distributions received by shareholders to be taxable to those shareholders in the year of receipt.

Distributions derived from taxable interest income or capital gains on portfolio securities, if any, will be subject to Federal income taxes. If you redeem or exchange Fund shares, you generally will be treated as having sold your shares and any gain on the transaction may be subject to tax. Certain investors may be subject to a Federal alternative minimum tax on dividends attributable to a Fund’s investment in private activity bonds.

Generally, within 60 days after the end of the Corporation’s taxable year, the Corporation will tell you the amount of exempt-interest dividends and capital gain dividends you received that year. Capital gain dividends are taxable as long term capital gains to you, regardless of how long you have held your shares. The tax treatment of dividends from a Fund is the same whether you choose to receive them in cash or to have them reinvested in shares of the Fund.

By law, your dividends and redemption proceeds will be subject to a withholding tax if you have not provided a taxpayer identification number or social security number or if the number you have provided is incorrect.

This section summarizes some of the consequences under current Federal tax law of an investment in a Fund. It is not a substitute for personal tax advice. Consult your personal tax adviser about the potential tax consequences of an investment in a Fund under all applicable tax laws.

Electronic Delivery

Electronic copies of most financial reports and prospectuses are available on the Corporation’s website. Shareholders can sign up for e-mail notifications of quarterly statements, annual and semiannual reports and prospectuses by enrolling in the Corporation’s electronic delivery program. To enroll:

Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages: Please contact your financial adviser. Please note that not all investment advisers, banks or brokerages may offer this service.

Shareholders Who Hold Accounts Directly With BlackRock:

Access the BlackRock website at http://www.blackrock.com/edelivery

Log into your account

Delivery of Shareholder Documents

The Funds deliver only one copy of shareholder documents, including prospectuses, shareholder reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is known as “householding” and is intended to eliminate duplicate mailings and reduce expenses. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact your Fund at 1-800-441-7762.

Management of the Funds

BlackRock Advisors, LLC

BlackRock Advisors, LLC, the Funds’ Investment Adviser, manages each Fund’s investments and its business operations subject to the oversight of the Corporation’s Board of Directors. While the Investment Adviser is ultimately responsible for the management of the Funds, it is able to draw upon the research and expertise of its asset management affiliates for portfolio decisions and management with respect to certain portfolio securities. The Investment Adviser is a wholly owned subsidiary of BlackRock, Inc. On September 29, 2006, BlackRock, Inc. consummated a transaction with Merrill Lynch & Co., Inc. whereby Merrill Lynch & Co., Inc.’s investment management business combined with that of BlackRock to create a new independent company that is one of the world’s largest asset management firms with over $1 trillion in assets under management.

The Corporation, on behalf of the Insured Fund, the National Fund, the Short-Term Fund and the High Yield Fund, has entered a separate investment advisory agreement, with respect to each Fund, with the Investment Advisor.

The Investment Adviser, with respect to the Insured Fund, the National Fund and the Short-Term Fund, receives fees at annual rates that decrease as the total assets of the three Funds increase above certain levels. The fee rates are applied to the average daily net assets of each Fund, with the reduced rates applicable to portions of the assets of each Fund to the extent that the aggregate average daily net assets of the three combined Funds exceeds $250 million, $400 million, $550 million and $1.5 billion (each such amount being a “breakpoint level”). These annual fee rates range from 0.40% to 0.35% for the Insured Fund, 0.50% to 0.475% for the National Fund and 0.40% to 0.325% for the Short-Term Fund.

As compensation for its services to the High Yield Fund, the Investment Adviser receives at the end of each month a fee from the High Yield Fund at the annual rate of 0.55% of that portion of the average daily net assets of the Fund not exceeding $250 million; 0.525% of that portion of the average daily net assets of the Fund in excess of $250 million but not exceeding $500 million; and 0.50% of that portion of the average daily net assets of the Fund in excess of $500 million.

The Investment Adviser has a separate sub-advisory agreement with BlackRock Investment Management, LLC (the “Sub-Adviser”), an affiliate, with respect to each Fund under which the Investment Adviser pays the Sub-Adviser a fee for services it provides equal to a percentage of the advisory fee received by the Investment Adviser under its investment advisory agreement with respect to the Insured Fund, the

National Fund, the Short-Term Fund or the High Yield Fund, as applicable. The Sub-Adviser is responsible for the day-to-day management of each Fund’s portfolio.

Prior to September 29, 2006, Fund Asset Management, L.P. (“FAM”), an indirect wholly owned subsidiary of Merrill Lynch & Co., Inc., acted as the Funds’ investment adviser and was compensated according to the same advisory fee rates described above. For the fiscal year ended June 30, 2007, the Investment Adviser and FAM received a fee from each Fund indicated below at the annual rates (as a percentage of the average daily net assets of the relevant Fund) shown below:

	Advisory Fee Rate Paid for the Fiscal Year Ended June 30, 2007 (net of waivers)
	Paid to FAM(a)	Paid to the Investment Adviser(b)

Insured Fund	0.36%	0.36%

National Fund	0.47%	0.46%

Short-Term Fund	0.33%	0.21%

High Yield Fund	0.09%	0.23%

(a)

For the period July 1, 2006 to September 29, 2006.

(b)

For the period September 29, 2006 to June 30, 2007.

A discussion of the basis for the Board of Directors’ approval of the investment advisory agreement with respect to the Insured Fund, the National Fund and the Short-Term Fund and a discussion of the basis for the Board of Directors’ approval of the sub-advisory agreement between the Investment Adviser and the Sub-Adviser with respect to the Insured Fund, the National Fund and the Short-Term Fund are included in the Corporation’s semi-annual shareholder report for the fiscal period ended December 31, 2006. The High Yield Fund commenced operations on August 1, 2006. A discussion of the basis for the Board of Directors’ approval of the investment advisory agreement with respect to the High Yield Fund and the sub-advisory agreement between the Investment Adviser and the Sub-Adviser with respect to the High Yield Fund is included in the Corporation’s semi-annual shareholder report for the fiscal period ended December 31, 2006.

The Insured Fund is managed by a team of investment professionals comprised of Michael A. Kalinoski, Director at BlackRock, Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock, and Walter O’Connor, Managing Director at BlackRock. Each is a member of BlackRock’s municipal tax-exempt management group. Messrs. Jaeckel and O’Connor are responsible for setting the Fund’s overall investment strategy and overseeing the management of the Fund. Mr. Kalinoski is the Fund’s lead portfolio manager and is responsible for the day-to-day management of the Fund’s portfolio

and the selection of its investments. Messrs. Jaeckel and O’Connor have been members of the Insured Fund’s management team since 2006. Mr. Kalinoski has been the Insured Fund’s portfolio manager since 2006.

The National Fund is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock, and Walter O’Connor, Managing Director at BlackRock. Each is a member of BlackRock’s municipal tax-exempt management group. Mr. Jaeckel is responsible for setting the Fund’s overall investment strategy and overseeing the management of the Fund. Mr. O’Connor is the Fund’s lead portfolio manager and is responsible for the day-to-day management of the Fund’s portfolio and the selection of its investments. Mr. Jaeckel has been a member of the National Fund’s management team since 2006 and Mr. O’Connor has been the National Fund’s portfolio manager since 1996.

The Short-Term Fund is managed by Peter J. Hayes, Managing Director at BlackRock, and Helen Marie Sheehan, Director at BlackRock. Ms. Sheehan is responsible for setting the Fund’s overall investment strategy and overseeing management of the Fund. Mr. Hayes is the Short-Term Fund’s lead portfolio manager and is primarily responsible for the day-to-day management of the Fund’s portfolio and the selection of its investments. Mr. Hayes has been the Short-Term Fund’s portfolio manager since 1996 and Ms. Sheehan has been the Short-Term Fund’s portfolio manager since 2007.

The High Yield Fund is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock, and Walter O’Connor, Managing Director at BlackRock. Each is a member of BlackRock’s municipal tax-exempt management group. Mr. O’Connor is responsible for setting the Fund’s overall investment strategy and overseeing the management of the Fund. Mr. Jaeckel is the Fund’s lead portfolio manager and is responsible for the day-to-day management of the Fund’s portfolio and the selection of its investments. Mr. O’Connor has been a member of the High Yield Fund’s management team since 2006 and Mr. Jaeckel has been the High Yield Fund’s portfolio manager since 2006.

Mr. Jaeckel joined BlackRock in 2006. Prior to joining BlackRock, he was a Managing Director (Municipal Tax-Exempt Fund Management) of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2005 to 2006 and a Director of MLIM from 1997 to 2005. He has been a portfolio manager with BlackRock or MLIM since 1991.

Mr. O’Connor joined BlackRock in 2006. Prior to joining BlackRock, he was a Managing Director (Municipal Tax-Exempt Fund Management) of MLIM from 2003 to 2006 and was a Director of MLIM from 1997 to 2002. He has been a portfolio manager with BlackRock or MLIM since 1991.

Mr. Kalinoski joined BlackRock in 2006. Prior to joining BlackRock, he was a Director (Municipal Tax-Exempt Fund Management) of MLIM since 2006 and was a Vice President of MLIM from 1999 to 2006. He has been a portfolio manager with BlackRock or MLIM since 1999.

Mr. Hayes joined BlackRock in 2006. Prior to joining BlackRock, he was a Managing Director of MLIM from 2000 to 2006 and was a First Vice President of MLIM from 1997 to 2000. He has been a portfolio manager with BlackRock or MLIM since 1987.

Ms. Sheehan joined BlackRock in 2006. Prior to joining BlackRock, she was a Director of MLIM from 2000 to 2006 and was a Vice President of MLIM from 1994 to 2000. She has been a portfolio manager with BlackRock or MLIM since 1985.

For more information about the portfolio managers’ compensation, other accounts they manage and their ownership of Fund shares, please see the Statement of Additional Information.

The Investment Adviser was organized in 1994 to perform advisory services for investment companies. The Sub-Adviser is a registered investment adviser and commodity pool operator organized in 1999. The Investment Adviser and its affiliates had approximately $1.3 trillion in investment company and other portfolio assets under management as of September 30, 2007.

From time to time, a manager, analyst, or other employee of the Investment Adviser or its affiliates may express views regarding a particular asset class, company, security, industry, or market sector. The views expressed by any such person are the views of only that individual as of the time expressed and do not necessarily represent the views of the Investment Adviser or any other person within the BlackRock organization. Any such views are subject to change at any time based upon market or other conditions and the Investment Adviser disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for the Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of the Funds.

Conflicts of Interest

maker, trader, prime broker, lender, agent and/or principal, and have other direct and indirect interests, in the global fixed income, currency, commodity, equity and other markets in which the Funds directly and indirectly invests. Thus, it is likely that the Funds will have multiple business relationships with and will invest in, engage in transactions with, make voting decisions with respect to, or obtain services from entities for which an Affiliate performs or seeks to perform investment banking or other services. One or more Affiliates may engage in proprietary trading and advise accounts and funds that have investment objectives similar to those of a Fund and/or that engage in and compete for transactions in the same types of securities, currencies and instruments as one or more of the Funds. The trading activities of these Affiliates are carried out without reference to positions held directly or indirectly by any Fund and may result in an Affiliate having positions that are adverse to those of one or more of the Funds. No Affiliate is under any obligation to share any investment opportunity, idea or strategy with the Funds. As a result, an Affiliate may compete with the Funds for appropriate investment opportunities. The results of the Funds’ investment activities, therefore, may differ from those of an Affiliate and of other accounts managed by an Affiliate, and it is possible that the Funds could sustain losses during periods in which one or more Affiliates and other accounts achieve significant profits on their trading for proprietary or other accounts. In addition, a Fund may, from time to time, enter into transactions in which an Affiliate or its other clients have an adverse interest. Furthermore, transactions undertaken by an Affiliate or an Affiliate-advised client may adversely impact the Funds. Transactions by one or more Affiliate-advised clients or the Investment Adviser may have the effect of diluting or otherwise disadvantaging the values, prices or investment strategies of one or more of the Funds. The Funds’ activities may be limited because of regulatory restrictions applicable to one or more Affiliates, and/or their internal policies designed to comply with such restrictions. In addition, the Funds may invest in securities of companies with which an Affiliate has or is trying to develop investment banking relationships or in which an Affiliate has significant debt or equity investments. The Funds also may invest in securities of companies for which an Affiliate provides or may some day provide research coverage. An Affiliate may have business relationships with and purchase or distribute or sell services or products from or to distributors, consultants or others who recommend the Funds or who engage in transactions with or for the Funds. The Funds may also make brokerage and other payments to an Affiliate in connection with the Funds’ portfolio investment transactions.

The activities of the Investment Adviser and its Affiliates may give rise to other conflicts of interest that could disadvantage the Funds and their shareholders. The Investment Adviser has adopted policies and procedures designed to address these potential conflicts of interest. See the Statement of Additional Information for further information.

FINANCIAL HIGHLIGHTS

The Financial Highlights table is intended to help you understand each Fund’s financial performance for the periods shown. Certain information reflects the financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the indicated Fund (assuming reinvestment of all dividends). The information has been audited by Deloitte & Touche LLP, whose report, along with each Fund’s financial statements, is included in the Corporation’s Annual Report, which is available upon request.

	Insured Fund
	Institutional										Investor A
	For the Year Ended June 30,										For the Year Ended June 30,
	2007		2006		2005		2004		2003		2007		2006		2005		2004		2003

Per Share Operating Performance:

Net asset value, beginning of year	$ 7.69		$ 8.00		$ 7.70		$ 8.07		$ 7.80		$ 7.68		$ 8.00		$ 7.70		$ 8.07		$ 7.79

Investment income — net(b)	.32		.35		.36		.40		.41		.33		.33		.34		.38		.39

Realized and unrealized gain (loss) — net	.03		(.28	)	.30		(.37	)	.27		.01		(.29	)	.30		(.37	)	.28

Total from investment operations	.35		.07		.66		.03		.68		.34		.04		.64		.01		.67

Less dividends and distributions Investment income — net	(.33	)	(.35	)	(.36	)	(.40	)	(.41	)	(.31	)	(.33	)	(.34	)	(.38	)	(.39	)
Realized gain — net	(.04	)	(.03	)	—		—		—		(.04	)	(.03	)	—		—		—

Total dividends and distribution	(.37	)	(.38	)	(.36	)	(.40	)	(.41	)	(.35	)	(.36	)	(.34	)	(.38	)	(.39	)

Net asset value, end of year	$ 7.67		$ 7.69		$ 8.00		$ 7.70		$ 8.07		$ 7.67		$ 7.68		$ 8.00		$ 7.70		$ 8.07

Total Investment Return:(a)

Based on net asset value per share	4.60	%	.82	%	8.74	%	.35	%	8.88	%	4.47	%	.44	%	8.47	%	.10	%	8.77	%

Ratios to Average Net Assets:

Expenses, net of waiver and excluding interest expense	.47	%	.45	%	.46	%	.46	%	.46	%	.72	%	.70	%	.71	%	.71	%	.71	%

Expenses, net of waiver	.87	%	.74	%	.63	%	.66	%	.71	%	1.12	%	.99	%	.88	%	.91	%	.96	%

Expenses	.87	%	.74	%	.64	%	.67	%	.71	%	1.13	%	.99	%	.89	%	.91	%	.96	%

Investment income — net	4.42	%	4.40	%	4.58	%	5.04	%	5.13	%	4.17	%	4.15	%	4.33	%	4.79	%	4.88	%

Supplemental Data:

Net assets, end of year (in thousands)	$ 604,691		$ 639,687		$ 707,134		$ 733,310		$ 855,757		$ 172,236		$ 172,083		$ 182,216		$ 183,007		$ 187,805

Portfolio turnover	36	%	41	%	47	%	44	%	33	%	36	%	41	%	47	%	44	%	33	%

(a)

Total investment returns exclude the effects of sales charges.

(b)

Based on average shares outstanding.

FINANCIAL HIGHLIGHTS (continued)

	Insured Fund
	Investor B
	For the Year Ended June 30,
	2007		2006		2005		2004		2003

Per Share Operating Performance:

Net asset value, beginning of year	$ 7.68		$ 7.99		$ 7.69		$ 8.07		$ 7.79

Investment income — net(b)	.29		.29		.30		.34		.35

Realized and unrealized gain (loss) — net	.01		(.28	)	.30		(.38	)	.28

Total from investment operations	.30		.01		.60		(.04	)	.63

Less dividends and distributions Investment income — net	(.27	)	(.29	)	(.30	)	(.34	)	(.35	)
Realized gain — net	(.04	)	(.03	)	—		—		—

Total dividends and distribution	(.31	)	(.32	)	(.30	)	(.34	)	(.35	)

Net asset value, end of year	$ 7.67		$ 7.68		$ 7.99		$ 7.69		$ 8.07

Total Investment Return:(a)

Based on net asset value per share	3.95	%	.05	%	7.93	%	(.53	%)	8.21	%

Ratios to Average Net Assets:

Expenses, net of waiver and excluding interest expense	1.23	%	1.21	%	1.21	%	1.21	%	1.22	%

Expenses, net of waiver	1.63	%	1.50	%	1.39	%	1.42	%	1.47	%

Expenses	1.63	%	1.50	%	1.40	%	1.42	%	1.47	%

Investment income — net	3.67	%	3.64	%	3.83	%	4.29	%	4.38	%

Supplemental Data:

Net assets, end of year (in thousands)	$ 45,533		$ 66,477		$ 91,355		$ 111,524		$ 160,177

Portfolio turnover	36	%	41	%	47	%	44	%	33	%

(a)

Total investment returns exclude the effects of sales charges.

(b)

Based on average shares outstanding.

FINANCIAL HIGHLIGHTS (continued)

	Insured Fund
	Investor C For the period October 2, 2006(c)		Investor C1
	to June 30,		For the Year Ended June 30,
	2007		2007		2006		2005		2004		2003

Per Share Operating Performance:

Net asset value, beginning of period	$ 7.88		$ 7.68		$ 8.00		$ 7.69		$ 8.07		$ 7.79

Investment income — net(b)	.17		.28		.28		.30		.33		.34

Realized and unrealized gain (loss) — net	(.14	)	.02		(.29	)	.31		(.38	)	.28

Total from investment operations	.03		.30		(.01	)	.61		(.05	)	.62

Less dividends and distributions Investment income — net	(.19	)	(.27	)	(.28	)	(.30	)	(.33	)	(.34	)
Realized gain — net	(.04	)	(.04	)	(.03	)	—		—		—

Total dividends and distribution	(.23	)	(.31	)	(.31	)	(.30	)	(.33	)	(.34	)

Net asset value, end of period	$ 7.68		$ 7.67		$ 7.68		$ 8.00		$ 7.69		$ 8.07

Total Investment Return:(a)

Based on net asset value per share	.34	%(e)	3.90	%	(.12	%)	8.01	%	(.58	%)	8.16	%

Ratios to Average Net Assets:

Expenses, net of waiver and excluding interest expense	1.51	%(d)	1.28	%	1.26	%	1.26	%	1.26	%	1.27	%

Expenses, net of waiver	1.90	%(d)	1.68	%	1.55	%	1.44	%	1.47	%	1.52	%

Expenses	1.90	%(d)	1.68	%	1.55	%	1.45	%	1.47	%	1.52	%

Investment income — net	3.37	%(d)	3.63	%	3.59	%	3.77	%	4.23	%	4.31	%

Supplemental Data:

Net assets, end of period (in thousands)	$ 4,542		$ 51,452		$ 61,046		$ 64,682		$ 61,794		$ 66,089

Portfolio turnover	36	%	36	%	41	%	47	%	44	%	33	%

(a)

Total investment returns exclude the effects of sales charges.

(b)

Based on average shares outstanding.

(c)

Commencement of operations.

(d)

Annualized.

(e)

Aggregate total investment return.

FINANCIAL HIGHLIGHTS (continued)

	National Fund
	Institutional										Investor A
	For the Year Ended June 30,										For the Year Ended June 30,
	2007		2006		2005		2004		2003		2007		2006		2005		2004		2003

Per Share Operating Performance:

Net asset value, beginning of year	$ 10.36		$ 10.66		$ 10.29		$ 10.54		$ 10.26		$ 10.37		$ 10.67		$ 10.29		$ 10.54		$ 10.27

Investment income — net(b)	.49		.51		.53		.55		.56		.46		.49		.50		.52		.53

Realized and unrealized gain (loss) — net	.05		(.30	)	.37		(.25	)	.28		.03		(.30	)	.38		(.25	)	.27

Total from investment operations	.54		.21		.90		.30		.84		.49		.19		.88		.27		.80

Less dividends from investment income — net	(.51	)	(.51	)	(.53	)	(.55	)	(.56	)	(.47	)	(.49	)	(.50	)	(.52	)	(.53	)

Net asset value, end of year	$ 10.39		$ 10.36		$ 10.66		$ 10.29		$ 10.54		$ 10.39		$ 10.37		$ 10.67		$ 10.29		$ 10.54

Total Investment Return:(a)

Based on net asset value per share	5.06	%	2.02	%	8.89	%	2.88	%	8.34	%	4.71	%	1.77	%	8.73	%	2.62	%	7.98	%

Ratios to Average Net Assets:

Expenses, net of waiver and excluding interest expenses	.59	%	.58	%	.59	%	.60	%	.59	%	.84	%	.83	%	.84	%	.85	%	.84	%

Expenses, net of waiver	.99	%	.84	%	.72	%	.70	%	.75	%	1.24	%	1.09	%	.97	%	.95	%	1.00	%

Expenses	1.00	%	.85	%	.72	%	.70	%	.75	%	1.24	%	1.10	%	.97	%	.95	%	1.00	%

Investment income — net	4.66	%	4.87	%	5.02	%	5.23	%	5.35	%	4.43	%	4.61	%	4.76	%	4.97	%	5.10	%

Supplemental Data:

Net assets, end of year (in thousands)	$ 976,153		$ 890,984		$ 909,125		$ 907,419		$ 624,192		$ 349,225		$ 283,814		$ 248,231		$ 207,376		$ 200,108

Portfolio turnover	46	%	56	%	33	%	20	%	34	%	46	%	56	%	33	%	20	%	34	%

(a)

Total investment returns exclude the effects of any charges.

(b)

Based on average shares outstanding.

FINANCIAL HIGHLIGHTS (continued)

	National Fund
	Investor B
	For the Year Ended June 30,
	2007		2006		2005		2004		2003

Per Share Operating Performance:

Net asset value, beginning of year	$ 10.36		$ 10.66		$ 10.28		$ 10.53		$ 10.26

Investment income — net(b)	.41		.43		.45		.47		.48

Realized and unrealized gain (loss) — net	.02		(.30	)	.38		(.26	)	.27

Total from investment operations	.43		.13		.83		.21		.75

Less dividends from investment income — net	(.41	)	(.43	)	(.45	)	(.46	)	(.48	)

Net asset value, end of year	$ 10.38		$ 10.36		$ 10.66		$ 10.28		$ 10.53

Total Investment Return:(a)

Based on net asset value per share	4.18	%	1.25	%	8.18	%	2.10	%	7.43	%

Ratios to Average Net Assets:

Expenses, net of waiver and excluding interest expense	1.34	%	1.34	%	1.35	%	1.35	%	1.34	%

Expenses, net of waiver	1.75	%	1.60	%	1.48	%	1.45	%	1.50	%

Expenses	1.75	%	1.61	%	1.48	%	1.46	%	1.51	%

Investment income — net	3.92	%	4.11	%	4.27	%	4.47	%	4.59	%

Supplemental Data:

Net assets, end of year (in thousands)	$ 101,260		$ 134,177		$ 177,553		$ 217,814		$ 321,477

Portfolio turnover	46	%	56	%	33	%	20	%	34	%

(a)

Total investment returns exclude the effects of sales charges.

(b)

Based on average shares outstanding.

FINANCIAL HIGHLIGHTS (continued)

	National Fund
	Investor C For the period October 2, 2006(c)		Investor C1
	to June 30,		For the Year Ended June 30,
	2007		2007		2006		2005		2004		2003

Per Share Operating Performance:

Net asset value, beginning of period	$ 10.57		$ 10.36		$ 10.66		$ 10.29		$ 10.54		$ 10.26

Investment income — net(b)	.25		.41		.43		.44		.46		.47

Realized and unrealized gain (loss) — net	(.16	)	.04		(.29	)	.37		(.25	)	.28

Total from investment operations	.09		.45		.14		.81		.21		.75

Less dividends from investment income — net	(.27	)	(.42	)	(.44	)	(.44	)	(.46	)	(.47	)

Net asset value, end of period	$ 10.39		$ 10.39		$ 10.36		$ 10.66		$ 10.29		$ 10.54

Total Investment Return:(a)

Based on net asset value per share	.96	%(e)	4.23	%	1.20	%	8.02	%	2.05	%	7.48	%

Ratios to Average Net Assets:

Expenses, net of waiver and excluding interest expense	1.65	%(d)	1.39	%	1.39	%	1.40	%	1.40	%	1.39	%

Expenses, net of waiver	2.05	%(d)	1.80	%	1.65	%	1.53	%	1.50	%	1.55	%

Expenses	2.05	%(d)	1.80	%	1.65	%	1.53	%	1.51	%	1.56	%

Investment income — net	3.59	%(d)	3.88	%	4.05	%	4.20	%	4.42	%	4.54	%

Supplemental Data:

Net assets, end of period (in thousands)	$ 41,676		$ 140,653		$ 139,447		$ 107,893		$ 74,849		$ 77,906

Portfolio turnover	46	%	46	%	56	%	33	%	20	%	34	%

(a)

Total investment returns exclude the effects of sales charges.

(b)

Based on average shares outstanding.

(c)

Commencement of operations.

(d)

Annualized.

(e)

Aggregate total investment return.

FINANCIAL HIGHLIGHTS (continued)

	Short-Term Fund
											Investor A For the period October 2, 2006(d) to June 30,
	Institutional For the Year Ended June 30,										Investor A For the period October 2, 2006(d) to June 30,		Investor A1 For the Year Ended June 30,
	2007		2006		2005		2004		2003		2007		2007		2006		2005		2004		2003

Per Share Operating Performance

Net asset value, beginning of period	$ 9.88		$ 9.99		$ 10.05		$ 10.17		$ 10.13		$ 9.93		$ 9.89		$ 10.00		$ 10.06		$ 10.18		$ 10.14

Investment income — net(b)	.32		.27		.19		.18		.27		.23		.32		.26		.18		.17		.24

Realized and unrealized gain (loss) — net	—(f)		(.11	)	(.06	)	(.12	)	.02		(.05	)	(.01	)	(.11	)	(.06	)	(.12	)	.04

Total from investment operations	.32		.16		.13		.06		.29		.18		.31		.15		.12		.05		.28

Less dividends from investment income — net	(.32	)	(.27	)	(.19	)	(.18	)	(.25	)	(.23	)	(.31	)	(.26	)	(.18	)	(.17	)	(.24	)

Net asset value, end of period	$ 9.88		$ 9.88		$ 9.99		$ 10.05		$ 10.17		$ 9.88		$ 9.89		$ 9.89		$ 10.00		$ 10.06		$ 10.18

Total Investment Return:(a)

Based on net asset value per share	3.32	%	1.57	%	1.30	%	.59	%	2.87	%	1.79	%(e)	3.21	%	1.47	%	1.20	%	.50	%	2.77	%

Ratios to Average Net Assets:

Expenses, net of waiver	.38	%	.44	%	.43	%	.42	%	.42	%	.61	%(c)	.48	%	.54	%	.53	%	.52	%	.52	%

Expenses	.48	%	.45	%	.44	%	.43	%	.43	%	1.06	%(c)	.58	%	.55	%	.54	%	.53	%	.53	%

Investment income — net	3.27	%	2.66	%	1.88	%	1.78	%	2.44	%		3.12%(c)	3.	18	2.55	%	1.76	%	1.68	%	2.31	%

Supplemental Data:

Net assets, end of period (in thousands)	$ 131,061		$ 149,333		$ 186,877		$ 243,443		$ 251,137		$ 1,456		$ 122,281		$ 99,293		$ 141,172		$ 244,741		$ 248,454

Portfolio turnover	110	%	83	%	87	%	69	%	45	%	110	%	110	%	83	%	87	%	69	%	45	%

(a)

Total investment returns exclude the effects of any sales charges.

(b)

Based on average shares outstanding.

(c)

Annualized.

(d)

Commencement of operations.

(e)

Aggregate total investment return.

(f)

Amount is less than $.01 per share.

FINANCIAL HIGHLIGHTS (continued)

	Short-Term Fund
	Investor B										Investor C
	For the Year Ended June 30,										For the Period
	2007		2006		2005		2004		2003		October 2, 2006(d) to June 30, 2007

Per Share Operating Performance:

Net asset value, beginning of period	$ 9.88		$ 10.00		$ 10.05		$ 10.17		$ 10.13		$ 9.93

Investment income — net(b)	.29		.23		.15		.14		.21		.17

Realized and unrealized gain (loss) — net	—	(c)	(.12	)	(.05	)	(.12	)	.04		(.05	)

Total from investment operations	.29		.11		.10		.02		.25		.12

Less dividends from investment income — net	(.29	)	(.23	)	(.15	)	(.14	)	(.21	)	(.17	)

Net asset value, end of year	$ 9.88		$ 9.88		$ 10.00		$ 10.05		$ 10.17		$ 9.88

Total Investment Return:(a)

Based on net asset value per share	2.95	%	1.11	%	1.04	%	.24	%	2.51	%	1.23	%(e)

Ratios to Average Net Assets:

Expenses, net of waiver	.74	%	.80	%	.79	%	.77	%	.78	%	1.36	%(f)

Expenses	.85	%	.81	%	.80	%	.78	%	.79	%	2.06	%(f)

Investment income — net	2.90	%	2.28	%	1.50	%	1.43	%	2.10	%	2.37	%(f)

Supplemental Data:

Net assets, end of year (in thousands)	$14,380		$ 23,769		$ 38,565		$ 63,135		$ 83,886		$ 2,084

Portfolio turnover	110	%	83	%	87	%	69	%	45	%	110	%

(a)

Total investment returns exclude the effects of sales charges.

(b)

Based on average shares outstanding.

(c)

Amount is less than ($.01) per share.

(d)

Commencement of operations.

(e)

Aggregate total investment return.

(f)

Annualized.

FINANCIAL HIGHLIGHTS (concluded)

	High Yield Fund For the Period August 1, 2006(d) to June 30, 2007
	Institutional		Investor A		Investor C

Per Share Operating Performance:

Net asset value, beginning of period	$ 10.00		$ 10.00		$ 10.00

Investment income — net(c)	.39		.32		.30

Realized and unrealized gain (loss) — net	(.03	)	.01		(.02	)

Total from investment operations	.36		.33		.28

Less dividends and distributions:
Investment Income — net	(.40	)	(.38	)	(.31	)
Realized gain — net	—	(f)	—	(f)	—	(f)

Total dividends and Distributions	(.40	)	(.38	)	(.31	)

Net asset value, end of period	$ 9.96		$ 9.95		$ 9.97

Total Investment Return:(b):

Based on net asset value per share	3.59	%(e)	3.26	%(e)	2.84	%(e)

Ratios to Average Net Assets:

Expenses, net of waiver	.62	%(a)	.89	%(a)	1.53	%(a)

Expenses	.96	%(a)	1.19	%(a)	1.84	%(a)

Investment income — net	4.35	%(a)	4.16	%(a)	3.50	%(a)

Supplemental Data:

Net assets, end of period (in thousands)	$ 62,464		$ 5,892		$ 4,378

Portfolio Turnover	16	%	16	%	16	%

(a)

Annualized.

(b)

Total investment returns exclude the effects of any sales charges.

(c)

Based on average shares outstanding.

(d)

Commencement of operations.

(e)

Aggregate total investment return.

(f)

Amount is less than ($.01) per share.

FUND
BlackRock Municipal Bond Fund, Inc.
P.O. Box 9011
Princeton, New Jersey 08543-9011
1-800-441-7762

INVESTMENT ADVISER
BlackRock Advisors, LLC
100 Bellevue Parkway
Wilmington, Delaware 19809

SUB-ADVISER
BlackRock Investment Management, LLC
P.O. Box 9011
Princeton, New Jersey 08543-9011

TRANSFER AGENT
PFPC Inc.
P.O. Box 9819
Providence, Rhode Island 02940-8019

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
750 College Road East
Princeton, New Jersey 08540

ACCOUNTING SERVICES PROVIDER
State Street Bank and Trust Company
500 College Road East
Princeton, New Jersey 08540

DISTRIBUTORS
BlackRock Distributors, Inc.
760 Moore Road
King of Prussia, Pennsylvania 19406

FAM Distributors, Inc.
P.O. Box 9081
Princeton, New Jersey 08543-9081

CUSTODIAN
The Bank of New York
100 Church Street
New York, New York 10007

COUNSEL
Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019-6018

For More Information

This Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference.

Shareholder Reports

Additional information about the Funds’ investments is available in the Corporation’s Annual and Semi-Annual Reports. In the Corporation’s Annual Report you will find a discussion of the market conditions and investment strategies that significantly affected the Funds’ performance during their last fiscal year. You may obtain these reports at no cost at www.blackrock.com or by calling 1-800-441-7762.

The Corporation will send you one copy of each shareholder report and certain other mailings, regardless of the number of Corporation accounts you have. To receive separate shareholder reports for each account, call your financial adviser or other financial intermediary or write to the Transfer Agent at its mailing address. Include your name, address, tax identification number and brokerage or mutual fund account number. If you have any questions, please call your financial adviser or other financial intermediary or call the Transfer Agent at 1-800-441-7762.

Statement of Additional Information

The Statement of Additional Information contains further information about the Corporation. The portions of the Statement of Additional Information relating to the Corporation are incorporated by reference into (legally considered part of) this Prospectus. The portions of the Statement of Additional Information that do not relate to the Corporation are not incorporated by reference, are not part of this Prospectus, and should not be relied on by investors in the Funds. You may obtain a free copy at www.blackrock.com or by writing to the Corporation at PFPC Inc., P.O. Box 9819, Providence, Rhode Island 02940-8019 or by calling 1-800-441-7762.

World Wide Web

Access general fund information and specific fund performance. Request mutual fund prospectuses and literature. Forward mutual fund inquiries to www.blackrock.com

Securities and Exchange Commission

Information about the Corporation (including the Statement of Additional Information) can be reviewed and copied at the Securities and Exchange Commission’s (the “Commission”) Public Reference Room in Washington, D.C. Call 1-202-551-8090 for information on the operation of the public reference room. This information is also available on the Commission’s Internet site at http://www.sec.gov and copies may be obtained upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the Public Reference Section of the Commission, Washington, D.C. 20549-0102.

You should rely only on the information contained in this Prospectus. No one is authorized to provide you with information that is different from the information contained in this Prospectus.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

INVESTMENT COMPANY ACT FILE #811-02688
©BlackRock Advisors, LLC

Code #10051-1007

ALTERNATIVES BLACKROCK SOLUTIONS EQUITIES FIXED INCOME LIQUIDITY REAL ESTATE

BlackRock Municipal Bond Fund, Inc.
BlackRock Short-Term Municipal Fund
BlackRock Shares

Prospectus
October 29, 2007

This Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference.

NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

Table of Contents

Key Facts
BlackRock Municipal Bond Fund — BlackRock Short-Term Municipal Fund at a Glance	3
Risk/Return Bar Chart	5
Fees and Expenses	7

Details About the Fund
How the Fund Invests	9
Investment Risks	11
Statement of Additional Information	15

Your Account
Pricing of Shares	16
How to Buy, Sell, Transfer and Exchange Shares	18
How Shares Are Priced	23
Dividends and Taxes	24
Electronic Delivery	25
Delivery of Shareholder Documents	25

Management of the Fund
BlackRock Advisors, LLC	26
Financial Highlights	30

For More Information
Shareholder Reports	Back Cover
Statement of Additional Information	Back Cover

Key Facts

BlackRock Municipal Bond Fund — BlackRock Short-Term Municipal Fund at a Glance

IMPORTANT DEFINITIONS

In an effort to help you better understand the many concepts involved in making an investment decision, we have defined the highlighted terms in this Prospectus in the sidebar.

Investment Grade — any of the four highest debt obligation ratings by recognized rating agencies, including Standard & Poor’s, Moody’s Investors Service, Inc. and Fitch Ratings.

What is the Fund’s investment objective?

The BlackRock Short-Term Municipal Fund (the “Fund”) is a series of BlackRock Municipal Bond Fund, Inc. (the “Corporation”). The Fund is, in effect, a separate fund that issues its own shares. The investment objective of the Fund is to provide shareholders with as high a level of income exempt from Federal income taxes as is consistent with the investment policies of the Fund.

What are the Fund’s main investment strategies?

Under normal circumstances, the Fund seeks to achieve its objective by investing at least 80% of its assets in municipal bonds. In choosing investments, the Fund’s management analyzes the credit quality of issuers and considers the yields available on municipal bonds with different maturities.

The Fund invests primarily in investment grade municipal bonds that have a maturity of less than four years or in municipal notes. Because of their shorter maturities, the Fund’s investments will not usually be as sensitive to changes in prevailing interest rates as are long-term municipal bonds. Fluctuations in interest rates on short-term municipal bonds may, however, vary more widely from time to time than those on long-term municipal bonds.

The Fund does not currently contemplate investing more than 25% of its total assets in municipal bonds or municipal notes whose issuers are located in the same state.

What are the main risks of investing in the Fund?

The Fund cannot guarantee that it will achieve its investment objective.

As with any fund, the value of the Fund’s investments — and therefore the value of the Fund’s shares —may fluctuate. These changes may occur in response to interest rate changes or other developments that may affect the municipal bond market generally, or a particular issuer or obligation. Generally, when interest rates go up, the value of municipal bonds goes down. Bonds with longer maturities are affected more by changes in interest rates than bonds with shorter maturities. In addition, there are specific factors that may affect the value of a particular security. Also, Fund management may select securities that underperform the bond market, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies. If the value of the Fund’s investments goes down, you may lose money.

IMPORTANT DEFINITIONS

Credit Risk — the risk that the issuer of a bond or other fixed-income security will be unable to pay the interest or principal when due.

Call and Redemption Risk — the risk a bond’s issuer may call a bond held by the Fund for redemption before it matures.

The Fund is also subject to credit risk and call and redemption risk.

Who should invest?

The Fund may be an appropriate investment for you if you:

•

Are looking for an investment that provides current income exempt from Federal income tax

•

Want a professionally managed and diversified portfolio without the administrative burdens of direct investments in municipal bonds

•

Are looking for liquidity

•

Can tolerate the risk of loss caused by changes in interest rates or adverse changes in the price of municipal bonds in general

•

Are investing with shorter-term goals

Risk/Return Bar Chart

The bar chart and table shown below provide an indication of the risks of investing in the Fund. The BlackRock shares commenced operations on October 2, 2006. Prior to the inception of the BlackRock share class, the Fund’s performance is based on the Institutional shares, which are offered by a separate prospectus, for each of the past ten calendar years. The table compares the average annual total returns for the BlackRock shares, based on the performance of the Fund’s Institutional shares with those of the Lehman Brothers Municipal Bond Index and the Lehman Brothers 3-year General Obligation Bond Index, each a broad measure of market performance. How the Fund performed in the past (before and after taxes) is not necessarily an indication of how the Fund will perform in the future.

The after-tax returns are calculated using the historical highest applicable marginal Federal individual income tax rates in effect during the periods measured and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their BlackRock shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts or through tax-advantaged education savings accounts.

Average Annual Total Returns (for the periods ended December 31, 2006)	One Year		Five Years		Ten Years

BlackRock Shares(a)
Return Before Taxes(b)	2.85	%	2.05	%	3.13	%
Return After Taxes on Distributions(b)	2.85	%	2.05	%	3.12	%
Return After Taxes on Distributions and
Sale of Fund Shares(b)	2.92	%	2.10	%	3.13	%

Lehman Brothers Municipal Bond Index(c)	4.84	%	5.53	%	5.76	%

Lehman Brothers 3-year General Obligation
Bond Index(d)	3.06	%	3.02	%	4.01	%

(a)

Prior to the BlackRock shares inception date of October 2, 2006, the returns for BlackRock shares are based on the performance of the Fund’s Institutional shares.

(b)

Includes all applicable fees.

(c)

(d)

Fees and Expenses

IMPORTANT DEFINITIONS

Fund investors pay various fees and expenses, either directly or indirectly. Listed below are some of the main types of expenses that the Fund may charge:

Expenses paid directly by the shareholder:

Shareholder Fees — these fees include sales charges that you may pay when you buy or sell shares of the Fund.

Expenses paid indirectly by the shareholder:

Annual Fund Operating Expenses — expenses that cover the costs of operating the Fund.

Management Fee — a fee paid to the Investment Adviser for managing the Fund.

Distribution Fees — fees used to support the Fund’s marketing and distribution efforts, such as compensating financial advisers and other financial intermediaries, advertising and promotion.

Service Fees — fees used to compensate securities dealers and other financial intermediaries for shareholder servicing activities.

Acquired Fund Fees and Expenses — fees and expenses charged by other investment companies in which a Fund invests a portion of its assets.

The table shows the fees and expenses that you may pay if you buy and hold BlackRock shares of the Fund. Future expenses may be greater or less than those indicated below.

Shareholder Fees (fees paid directly from your investment)(a):	BlackRock Shares

Maximum Sales Charge (Load) imposed on
purchases (as a percentage of offering price)	None

Maximum Deferred Sales Charge (Load) (as a
percentage of original purchase price or
redemption proceeds, whichever is lower)	None

Maximum Sales Charge (Load) imposed on
Dividend Reinvestments	None

Redemption Fee	None

Exchange Fee	None

*Annual Fund Operating Expenses (expenses*
that are deducted from Fund assets):

Management Fee	0.34	%

Distribution and/or Service (12b-1) Fees	None

Other Expenses (including transfer agency fees)(b	0.10	%

Acquired Fund Fees and Expenses	0.01	%

Total Annual Fund Operating Expenses(c)	0.45	%

(a)

(b)

(c)

The Investment Advisor may waive a portion of the Fund’s management fee in connection with the Fund’s investment in an affiliated money market fund. Taking this waiver into account and including Acquired Fund Fees and Expenses, the Total Annual Fund Operating Expenses would be 0.44%

Example:

This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.

This example assumes that you invest $10,000 in the Fund’s BlackRock shares for the time periods indicated, that your investment has a 5% return each year, that you redeem at the end of each time period and that the Fund’s operating expenses remain the same. These assumptions are not meant to indicate you will receive a 5% annual rate of return. Your annual return may be more or less than the 5% used in these examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

	1 Year	3 Years	5 Years	10 Years

BlackRock Shares	$46	$144	$252	$567

Details About the Fund

ABOUT THE INVESTMENT
ADVISER AND
THE SUB-ADVISER

The Fund is managed by BlackRock Advisors, LLC and sub-advised by BlackRock Investment Management, LLC. As used in this Prospectus, the term “Investment Adviser” includes the sub-adviser.

ABOUT THE PORTFOLIO MANAGEMENT TEAM OF THE FUND

How the Fund Invests

The investment objective of the Fund is to provide shareholders with as high a level of income exempt from Federal income taxes as is consistent with the investment policies of the Fund.

Outlined below are the main strategies the Fund uses in seeking to achieve its investment objectives:

The Fund invests primarily in a diversified portfolio of municipal bonds. Under normal circumstances, the Fund invests at least 80% of its assets in municipal bonds. Municipal bonds may be obligations of a variety of issuers, including governmental entities or other qualifying issuers. Issuers may be states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities. Municipal bonds also include short-term tax-exempt obligations like municipal notes and variable rate demand obligations.

Fund management considers a variety of factors when choosing investments, such as:

•

Credit Quality of Issuers — based on bond ratings and other factors including economic and financial conditions.

•

In addition, Fund management considers the availability of features that protect against an early call of a bond by the issuer.

The Fund’s investments may consist of private activity bonds that may subject certain shareholders to an alternative minimum tax.

Other Strategies. In addition to the main strategies discussed above, the Fund may use certain other investment strategies.

The Fund may invest up to 20% of its assets on a temporary basis in taxable money market securities that have a maturity of one year or less. The Fund may make these investments for liquidity purposes or as a temporary investment pending an investment in municipal bonds.

As a temporary measure for defensive purposes, the Fund may invest without limitation in taxable money market securities. These investments may prevent the Fund from meeting its investment objective.

Investments in taxable money market securities as well as some of the derivatives discussed below may cause the Fund to have taxable investment income. The Fund may also realize capital gains on the sale of its municipal bonds (and other securities it holds). These capital gains will be taxable regardless of whether they are derived from a sale of municipal bonds.

The Fund is permitted to engage in transactions in certain derivatives, such as financial futures contracts and options thereon, for hedging purposes. The Fund may also invest in other derivatives, such as indexed and inverse floating rate obligations and swap agreements, including credit default swap agreements, for hedging purposes or to enhance income. Derivatives are financial instruments whose value is derived from another security or an index such as the Lehman Brothers Municipal Bond Index.

The Fund may invest uninvested cash balances in affiliated money market funds.

Outlined below are other main strategies the Fund uses in seeking to achieve its investment objective:

The Fund invests primarily in investment grade municipal bonds or notes, including variable rate demand obligations, that have a maturity of less than four years. Under normal circumstances, the Fund expects to invest all of its assets in such bonds or notes. Certain municipal bonds that the Fund purchases may have a maturity of greater than four years, but allow the Fund to require the issuer to redeem the bonds within four years. The Fund treats these bonds as having a maturity of less than four years. Because of their shorter maturities, the Fund’s investments generally will not be as sensitive to changes in prevailing interest rates as are investments in long-term municipal bonds. Fluctuations in interest rates on short-term municipal bonds may, however, vary more widely than those on long-term municipal bonds from time to time.

Investment Risks

This section contains a summary discussion of the general risks of investing in the Fund. As with any fund, there can be no guarantee that the Fund will meet its objective or that the Fund’s performance will be positive for any period of time.

Set forth below are the main risks of investing in the Fund:

Market Risk and Selection Risk — Market risk is the risk that one or more markets in which the Fund invests will go down in value, including the possibility that the markets will go down sharply and unpredictably. Selection risk is the risk that the securities that Fund management selects will underperform the markets, the relevant indices or the securities selected by other funds with similar investment objectives and investment strategies.

Credit Risk — Credit risk is the risk that the issuer will be unable to pay the interest or principal when due. Changes in an issuer’s credit rating or the market’s perception of an issuer’s creditworthiness may also affect the value of the Fund’s investment in that issuer. The degree of credit risk depends on both the financial condition of the issuer and the terms of the obligation.

Interest Rate Risk — Interest rate risk is the risk that prices of municipal bonds generally increase when interest rates decline and decrease when interest rates increase. Prices of longer term securities generally change more in response to interest rate changes than prices of shorter term securities. The Fund may lose money if short term or long term interest rates rise sharply or otherwise change in a manner not anticipated by Fund management.

Call and Redemption Risk — A bond’s issuer may call a bond for redemption before it matures. If this happens to a bond the Fund holds, the Fund may lose income and may have to invest the proceeds in bonds with lower yields.

its faith, credit and taxing power for repayment. If the private enterprise defaults on its payments, the Fund may not receive any income or get its money back from the investment.

The Fund may also be subject to certain other risks associated with its investments and investment strategies, including:

Borrowing Risk and Leverage Risk — The Fund may borrow for temporary or emergency purposes, including to meet redemptions, for the payment of dividends, for share repurchases or for the clearance of transactions. Borrowing may exaggerate changes in the net asset value of the Fund’s shares and in the yield on the Fund’s holdings. Borrowing will cost the Fund interest expense and other fees. The costs of borrowing may reduce the Fund’s return. Certain derivative securities that the Fund may buy or other techniques that the Fund may use may create leverage, including, but not limited to, when issued securities, forward commitments, futures contracts and options.

Derivatives — The Fund may use derivative instruments to hedge its investments or to seek to enhance returns. Derivatives allow the Fund to increase or decrease its risk exposure more quickly and efficiently than other types of instruments. Derivatives are volatile and involve significant risks, including:

Credit risk — the risk that the counterparty (the party on the other side of the transaction) in a derivative transaction will be unable to honor its financial obligation to the Fund.

The Fund may use derivatives for hedging purposes, including anticipatory hedges. Hedging is a strategy in which the Fund uses a derivative to offset the risks associated with other Fund holdings. While hedging can reduce losses, it can also reduce or eliminate gains or cause losses if the market moves in a different manner than anticipated by the Fund or if the cost of the derivative outweighs the benefit of the hedge. Hedging also involves the risk that changes in the value of the derivative will not match those of the holdings being hedged as expected by the Fund, in which case any losses on the holdings being hedged may not be reduced and may be increased. There can be no assurance that the Fund’s hedging strategy will reduce risk or that hedging transactions will be either available or cost effective. The Fund is not required to use hedging and may choose not to do so.

Because the Fund may use derivatives to seek to enhance returns, its investments will expose the Fund to the risks outlined above to a greater extent than if the Fund used derivatives solely for hedging purposes. Use of derivatives to seek to enhance returns may be considered speculative.

Indexed and Inverse Floating Rate Securities — The Fund may invest in securities whose potential returns are directly related to changes in an underlying index or interest rate, known as indexed securities. The return on indexed securities will rise when the underlying index or interest rate rises and fall when the index or interest rate falls. The Fund may also invest in securities whose return is inversely related to changes in an interest rate (inverse floaters). In general, income on inverse floaters will decrease when short term interest rates increase and increase when short term interest rates decrease. Investments in inverse floaters may subject the Fund to the risks of reduced or eliminated interest payments and losses of principal. In addition, certain indexed securities and inverse floaters may increase or decrease in value at a greater rate than the underlying interest rate, which

effectively leverages the Fund’s investment. As a result, the market value of such securities will generally be more volatile than that of fixed rate, tax-exempt securities.

Swap Agreements — Swap agreements involve the risk that the party with whom the Fund has entered into the swap will default on its obligation to pay the Fund and the risk that the Fund will not be able to meet its obligations to pay the other party to the agreement.

When Issued Securities, Delayed Delivery Securities and Forward Commitments — The Fund may purchase or sell securities that it is entitled to receive on a when issued basis. The Fund may also purchase or sell securities on a delayed delivery basis or through a forward commitment. When issued and delayed delivery securities and forward commitments involve the risk that the security the Fund buys will lose value prior to its delivery. There also is the risk that the security will not be issued or that the other party to the transaction will not meet its obligation. If this occurs, the Fund loses both the investment opportunity for the assets it set aside to pay for the security and any gain in the security’s price.

Taxability Risk — The Fund intends to minimize the payment of taxable income to shareholders by investing in municipal securities in reliance at the time of purchase on an opinion of bond counsel to the issuer that the interest paid on those securities will be excludable from gross income for Federal income tax purposes. Such securities, however, may be determined to pay, or have paid, taxable income subsequent to the Fund’s acquisition of the securities. In that event, the Internal Revenue Service may demand that the Fund pay Federal income taxes on the affected interest income, and, if the Fund agrees to do so, the Fund’s yield could be adversely affected. If the interest paid on any municipal security held by a Fund is subsequently determined to be taxable, the Fund will dispose of that security as soon as reasonably practicable.

Illiquid Securities — The Fund may invest up to 15% of its net assets in illiquid securities that it cannot sell within seven days at approximately current value. If the Fund buys illiquid securities, it may be unable to quickly sell them or may be able to sell them only at a price below current value.

Statement of Additional Information

If you would like further information about the Fund, including how the Fund invests, please see the Statement of Additional Information.

For a discussion of the Corporation’s policies and procedures regarding the selective disclosure of the Fund’s portfolio holdings, please see the Statement of Additional Information. The Corporation makes the Fund’s top ten holdings available on a monthly basis at www.blackrock.com generally within 5 business days after the end of the month to which the information applies.

Your Account

Pricing of Shares

BlackRock shares are offered to institutional investors, registered investment advisers and certain fee-based programs. Your financial adviser or other financial intermediary can help you determine whether you are eligible to buy BlackRock shares or to participate in any of these programs.

Certain financial intermediaries that make Fund shares available to their customers may charge fees in addition to those described in this Prospectus for providing certain services, including: marketing, distribution or other services intended to assist in the offer and sale of Fund shares; shareholder servicing activities; and/or sub-transfer agency services provided to individual shareholders or beneficial owners where a financial intermediary maintains omnibus accounts with the Fund’s transfer agent. The Investment Adviser, the Distributors or their affiliates may pay all or a portion of those fees out of their own resources. The amount of fees paid to a financial intermediary in any given year will vary and may be based on one or more factors, including a fixed amount, a fixed percentage rate, the financial intermediary’s sales of Fund shares, assets in Fund shares held by the intermediary’s customers, or other factors. In addition, consistent with applicable regulations, the Distributors or their affiliates may from time to time pay for or make contributions to financial intermediaries or their employees in connection with various activities including: training and education seminars for financial intermediary employees, clients and potential clients; due diligence meetings regarding the Fund; recreational activities; gifts; and/or other non-cash items. See the Statement of Additional Information for more information.

The Fund’s shares are distributed by FAM Distributors, Inc. and BlackRock Distributors, Inc., each an affiliate of the Investment Adviser.

The table below summarizes key features of the BlackRock Short-Term Municipal Fund BlackRock shares.


Availability		Limited to certain eligible investors including: Institutional investors Registered investment advisers Certain fee-based programs

Initial Sales Charge?		No. Entire purchase price is invested in shares of the Fund.

Deferred Sales Charge?		No.

Service and Distribution Fees?		No.

Redemption Fee?		No.

Conversion to Investor A shares?		No.

How to Buy, Sell, Transfer and Exchange Shares

Because of the high costs of maintaining smaller shareholder accounts, the Fund may redeem the shares in your account (without charging any deferred sales charge) if the net asset value of your account falls below $500 due to redemptions you have made. You will be notified that the value of your account is less than $500 before the Fund makes an involuntary redemption. You will then have 60 days to make an additional investment to bring the value of your account to at least $500 before the Fund takes any action. This involuntary redemption does not apply to Uniform Gifts or Transfers to Minors Act accounts.

If You Want To	Your Choices	Information Important for You to Know

Buy Shares	Determine the amount of your investment	The minimum initial investment for BlackRock shares is: $5 million for institutions and individuals $250,000 for registered investment advisers (The minimums for initial investments may be waived under certain circumstances.)

	Have your financial adviser, selected securities dealer or other financial intermediary submit your purchase order	The price of your shares is based on the next calculation of net asset value after your order is placed. Any purchase orders placed by the close of business on the New York Stock Exchange (generally 4:00 pm Eastern time) will be priced at the net asset value determined that day. Certain financial intermediaries, however, may require submission of orders prior to that time. Purchase orders placed after that time will be priced at the net asset value determined on the next business day. The Fund may reject any order to buy shares and may suspend the sale of shares at any time. Selected securities dealers or other financial intermediaries may charge a processing fee to confirm a purchase.

	Or contact the Transfer Agent	To purchase shares directly, call 1-800-441-7762 and request a purchase application. Mail the completed purchase application to the Transfer Agent at the address on the inside back cover of this Prospectus.

Add to Your Investment	Purchase additional shares	The minimum investment for additional purchases is generally $50 for all accounts except that retirement plans have a minimum additional purchase of $1 and certain programs, such as automatic investment plans, may have higher minimums. (The minimums for additional purchases may be waived under certain circumstances.)

	Acquire additional shares through the automatic dividend reinvestment plan	All dividends and capital gains distributions are automatically reinvested without a sales charge.

	Participate in the automatic investment plan	You may invest a specific amount on a periodic basis through your investment account.

Transfer Shares to Another Securities Dealer or Other Financial Intermediary	Transfer to a participating securities dealer or other financial intermediary	You may transfer your shares of the Fund only to another securities dealer that has entered into an agreement with a Distributor. Certain shareholder services may not be available for the transferred shares. All future trading of these assets must be coordinated by the receiving firm.

	Transfer to a non-participating securities dealer or other financial intermediary	You must either: Transfer your shares to an account with the Transfer Agent; or Sell your shares, paying any applicable deferred sales charges.

Sell Your Shares	Have your financial adviser, selected securities dealer or other financial intermediary submit your sales order	The price of your shares is based on the next calculation of net asset value after your order is placed. For your redemption request to be priced at the net asset value on the day of your request, you must submit your request to your dealer or other financial intermediary prior to that day’s close of business on the New York Stock Exchange (generally 4:00 p.m. Eastern time). Certain financial intermediaries, however, may require submission of orders prior to that time. Any redemption request placed after that time will be priced at the net asset value at the close of business on the next business day. Securities dealers or other financial intermediaries may charge a fee to process a redemption of shares. The Fund may reject an order to sell shares under certain circumstances.

If You Want To	Your Choices	Information Important for You to Know

Sell Your Shares (continued)	Sell through the Transfer Agent	You may sell shares held at the Transfer Agent by writing to the Transfer Agent. All shareholders on the account must sign the letter. A signature guarantee will generally be required, but may be waived in certain limited circumstances. You can obtain a signature guarantee from a bank, securities dealer, securities broker, credit union, savings association, national securities exchange or registered securities association. A notary public seal will not be acceptable. If you hold stock certificates, return the certificates with the letter. The Transfer Agent will normally mail redemption proceeds within seven days following receipt of a properly completed request. If you make a redemption request before the Fund has collected payment for the purchase of shares, the Fund or the Transfer Agent may delay mailing your proceeds. This delay will usually not exceed ten days. You may also sell shares held at the Transfer Agent by telephone request if certain conditions are met and if the amount being sold is less than (i) $100,000 for payments by check, or (ii) $250,000 for payments through the Automated Clearing House Network (ACH) or wire transfer. Call 1-800-441-7762 for details. Redemption requests in excess of these amounts must be in writing with a medallion signature guarantee. Redemption proceeds may be paid by check or, if the Fund has verified banking information on file, through ACH or by wire transfer. You will be charged a fee of $7.50 for each redemption payment made by wire transfer and $15 for redemptions by check sent via overnight mail. You are responsible for any additional charges imposed by your bank for this service.

Sell Shares Systematically	Participate in the Fund’s Systematic Withdrawal Plans	To start a Systematic Withdrawal Plan (“SWP”), you must have a current investment of $10,000 or more in a BlackRock fund. Shareholders can elect to receive cash payments of $50 or more at any interval they choose. Shareholders may sign up by completing the SWP Application Form, which may be obtained from the Transfer Agent. To participate, you must have your Fund dividends automatically reinvested. You may change or cancel the SWP at any time, upon written notice to the Transfer Agent. Ask your financial adviser or other financial intermediary for details.

Short Term Trading

The Fund reserves the right to reject any purchase order, including exchanges. Short-term or excessive trading (sometimes known as “market timing”) into and out of the Fund, particularly in larger amounts, may harm performance by disrupting portfolio management strategies and by increasing expenses, including brokerage and administrative costs, and may also dilute the value of the holdings of other shareholders of the Fund. Short-term or excessive trading may cause the Fund to retain more cash than the portfolio manager would normally retain in order to meet unanticipated redemptions or may force the Fund to sell portfolio securities at disadvantageous times to raise the cash needed to meet those redemption or exchange requests. Accordingly, the Corporation has adopted certain policies and procedures, which have been reviewed and approved by the Corporation’s Board of Directors, designed to deter such short-term or excessive trading. Shareholders may not exchange their shares of the Fund for shares of another mutual fund advised by the Investment Adviser or its affiliates unless they have held the shares to be used in the exchange for at least fifteen days. The Fund will reject purchase orders from investors who have previously purchased and sold shares of the Fund within a fifteen day period. In addition, the Fund will reject purchase orders, including exchanges that fall both within and outside the fifteen day holding period, from market timers or other investors if Fund management, in its discretion, has determined that such orders are short-term or excessive, and will be disruptive to the Fund. For these purposes, Fund management considers an investor’s trading history in the Fund or other funds advised by the Investment Adviser or its affiliates, and accounts under common ownership or control. Each Distributor has entered into agreements with respect to financial advisers and other financial intermediaries that maintain omnibus accounts with the Fund’s Transfer Agent pursuant to which such financial advisers and other financial intermediaries undertake to cooperate with the Distributors in monitoring purchase, exchange and redemption orders by their customers in order to detect and prevent short-term or excessive trading in the Fund’s shares through such accounts.

The Fund applies these policies to all shareholders. However, Fund management may not be able to determine that a specific order, particularly with respect to orders made through omnibus accounts or 401(k) plans, is short-term or excessive, and will be disruptive to the Fund and so makes no representation that all such orders can or will be rejected.

Anti-Money Laundering Requirements

may request information from shareholders to enable it to form a reasonable belief that it knows the true identity of its shareholders. This information will be used to verify the identity of investors or, in some cases, the status of financial advisers; it will be used only for compliance with the requirements of the Patriot Act. The Fund reserves the right to reject purchase orders from persons who have not submitted information sufficient to allow the Fund to verify their identity. The Fund also reserves the right to redeem any amounts in the Fund from persons whose identity it is unable to verify on a timely basis. It is the Fund’s policy to cooperate fully with appropriate regulators in any investigations conducted with respect to potential money laundering, terrorism or other illicit activities.

BlackRock Privacy Principles

BlackRock obtains or verifies personal nonpublic information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our web sites. BlackRock does not sell or disclose to nonaffiliated third parties any nonpublic personal information about its Clients, except as permitted by law, or as is necessary to respond to regulatory requests or to service Client accounts. These nonaffiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

How Shares Are Priced

IMPORTANT DEFINITIONS

Net Asset Value — the market value of the Fund’s total assets after deducting liabilities, divided by the number of shares outstanding.

When you buy shares, you pay the net asset value, plus any applicable sales charge. This is the offering price. Shares are also redeemed at their net asset value, minus any applicable deferred sales charge. The Fund calculates the net asset value of each class of its shares (generally by using market quotations) each day the New York Stock Exchange (the “Exchange”) is open, as of the close of business on the Exchange based on prices at the time of closing. The Exchange generally closes at 4:00 p.m. Eastern time. The net asset value used in determining your share price is the next one calculated after your purchase or redemption order is placed.

The Fund generally values its portfolio securities using market prices provided by an independent pricing service pursuant to a policy approved by the Corporation’s Board of Directors. If market quotations are not readily available or, in the Investment Adviser’s judgment, they do not accurately reflect fair value for a security, that security will be valued by another method that the Board of Directors believes more accurately reflects the fair value. The Board has adopted valuation procedures for the Fund and has delegated the day-to-day responsibility for fair value determinations to the Investment Adviser’s Valuation Committee. Fair value determinations may be made by the Fund’s independent pricing service using a matrix pricing system or by the Valuation Committee after consideration of the material factors that may affect the value of a particular security. Fair value determinations by the Investment Adviser that affect the Fund’s net asset value are subject to review, approval or ratification, as appropriate, by the Board of Directors. The Fund’s use of fair value pricing is designed to ensure that the Fund’s net asset value reflects the value of its underlying portfolio securities as accurately as possible. There can be no assurance, however, that a fair value used by the Fund on any given day will more accurately reflect the market value of a security or securities than the market price of such security or securities on that day.

The Fund may accept orders from certain authorized financial intermediaries or their designees. The Fund will be deemed to receive an order when accepted by the intermediary or designee and the order will receive the net asset value next computed by the Fund after such acceptance. If the payment for a purchase order is not made by a designated later time, the order will be canceled and the financial intermediary could be held liable for any losses.

Dividends and Taxes

IMPORTANT DEFINITIONS

Dividends — exempt interest, ordinary income and capital gains paid to shareholders. Dividends may be reinvested in additional Fund shares as they are paid.

“BUYING A DIVIDEND”

You may want to avoid buying shares shortly before the Fund pays a dividend although the impact on you will be significantly less than if you were invested in a fund paying fully taxable dividends. The reason? If you buy shares when the Fund has realized but not yet distributed taxable ordinary income or capital gains, you will pay the full price for the shares and then receive a portion of the price back in the form of a taxable dividend. Before investing you may want to consult your tax adviser.

The Fund will distribute net investment income, if any, monthly and net realized capital gains, if any, at least annually. The Fund may also pay a special distribution at the end of the calendar year to comply with Federal tax requirements. Dividends may be reinvested automatically in shares of the Fund at net asset value without a sales charge or may be taken in cash. If you would like to receive dividends in cash, contact your financial adviser, selected securities dealer, other financial intermediary or the Transfer Agent.

The Fund intends to make distributions most of which will be excludable from gross income for Federal income tax purposes.

The Fund will only purchase a municipal security if it is accompanied by an opinion of counsel to the issuer, which is delivered on the date of issuance of the security, that the interest paid on such security is excludable from gross income for Federal income tax purposes. To the extent that the dividends distributed by the Fund are from bond interest income that is excludable from gross income for Federal income tax purposes, they are exempt from Federal income tax.

There is a possibility that events occurring after the date of issuance of a security, or after the Fund’s acquisition of a security, may result in a determination that the interest on that security is, in fact, includable in gross income for Federal income tax purposes retroactively to its date of issue. Such a determination may cause a portion of prior distributions received by shareholders to be taxable to those shareholders in the year of receipt.

Distributions derived from taxable interest income or capital gains on portfolio securities, if any, will be subject to Federal income taxes and will generally be subject to state and local income taxes. If you redeem or exchange Fund shares, you generally will be treated as having sold your shares and any gain on the transaction may be subject to tax. Certain investors may be subject to a Federal alternative minimum tax on dividends attributable to the Fund’s investment in private activity bonds.

Generally, within 60 days after the end of the Corporation’s taxable year, the Corporation will tell you the amount of exempt-interest dividends and capital gain dividends you received that year. Capital gain dividends are taxable as long term capital gains to you, regardless of how long you have held your shares. The tax treatment of dividends from the Fund is the same whether you choose to receive them in cash or to have them reinvested in shares of the Fund.

This section summarizes some of the consequences under current Federal tax law of an investment in the Fund. It is not a substitute for personal tax advice. Consult your personal tax adviser about the potential tax consequences of an investment in the Fund under all applicable tax laws.

Electronic Delivery

Electronic copies of most financial reports and prospectuses are available on the Fund’s website. Shareholders can sign up for e-mail notifications of quarterly statements, annual and semiannual reports and prospectuses by enrolling in the Corporation’s electronic delivery program. To enroll:

Shareholders Who Hold Accounts Directly With BlackRock:

Access the BlackRock website at http://www.blackrock.com/edelivery

Log into your account

Delivery of Shareholder Documents

The Fund delivers only one copy of shareholder documents, including prospectuses, shareholder reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is known as “householding” and is intended to eliminate duplicate mailings and reduce expenses. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Fund at 1-800-441-7762.

Management of the Fund

BlackRock Advisors, LLC

BlackRock Advisors, LLC, the Fund’s Investment Adviser, manages the Fund’s investments and its business operations subject to the oversight of the Corporation’s Board of Directors. While the Investment Adviser is ultimately responsible for the management of the Fund, it is able to draw upon the research and expertise of its asset management affiliates for portfolio decisions and management with respect to certain portfolio securities. The Investment Adviser is a wholly owned subsidiary of BlackRock, Inc. On September 29, 2006, BlackRock, Inc. consummated a transaction with Merrill Lynch & Co., Inc. whereby Merrill Lynch & Co., Inc.’s investment management business combined with that of BlackRock to create a new independent company that is one of the world’s largest asset management firms with over $1 trillion in assets under management.

The Corporation has an investment advisory agreement with the Investment Adviser (the “Investment Advisory Agreement”) under which, the Corporation pays the Investment Adviser fees at annual rates that decrease as the total assets of the Fund, the BlackRock Municipal Insured Fund and the BlackRock National Municipal Fund (collectively, the “Funds”) increase above certain levels. The fee rates are applied to the average daily net assets of each of the three Funds, with the reduced rates applicable to portions of the assets of each of the three Funds to the extent that the aggregate average daily net assets of the three combined Funds exceeds $250 million, $400 million, $550 million and $1.5 billion (each such amount being a “breakpoint level”). These annual fee rates range from 0.40% to 0.325% for the Fund.

The Investment Adviser has a sub-advisory agreement with BlackRock Investment Management, LLC (the “Sub-Adviser”), an affiliate, under which the Investment Adviser pays the Sub-Adviser a fee for services it provides equal to a percentage of the advisory fee paid to the Investment Adviser under the Investment Advisory Agreement. The Sub-Adviser is responsible for the day-to-day management of the Fund’s portfolio.

Prior to September 29, 2006, Fund Asset Management, L.P. (“FAM”), an indirect wholly owned subsidiary of Merrill Lynch & Co., Inc., acted as the Fund’s investment adviser and was compensated according to the same advisory fee rates described above. For the fiscal year ended June 30, 2007, FAM and the Investment Adviser received a fee from the Fund at the annual rate of (as a percentage of the average daily net assets of the Fund) of 0.33% (net of waivers) and 0.21% (net of waivers), respectively.

A discussion of the basis for the Board of Directors’ approval of the investment advisory agreement with the Investment Adviser with respect to the Short-Term Fund and a discussion of the basis for the Board of Directors’ approval of the sub-advisory agreement between the Investment Adviser and the Sub-Adviser with respect to the Short-Term Fund are included in the Corporation’s semi-annual shareholder report for the fiscal period ended December 31, 2006.

Peter J. Hayes and Helen Marie Sheehan are the portfolio managers of the Fund and are primarily responsible for the day-to-day management of the Fund’s portfolio and the selection of its investments. Mr. Hayes is a Vice President of the Corporation and has been the portfolio manager of the Fund since 1996. He is a Managing Director of BlackRock, Inc. Prior to joining BlackRock in 2006, Mr. Hayes was a Managing Director of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2000 to 2006 and was a First Vice President of MLIM from 1997 to 2000. He has been a portfolio manager with BlackRock or MLIM since 1987. Ms. Sheehan is a Director with BlackRock, Inc. Prior to joining BlackRock in 2006, she was a Director with MLIM from 2000 to 2006 and a Vice President thereof from 1994 to 2000. Ms. Sheehan has been a portfolio manager with BlackRock or MLIM since 1985.

For more information about the portfolio managers’ compensation, other accounts they manage and their ownership of Fund shares, please see the Statement of Additional Information.

From time to time, a manager, analyst, or other employee of the Investment Adviser or its affiliates may express views regarding a particular asset class, company, security, industry, or market sector. The views expressed by any such person are the views of only that individual as of the time expressed and do not necessarily represent the views of the Investment Adviser or any other person within the BlackRock organization. Any such views are subject to change at any time based upon market or other conditions and the Investment Adviser disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for the Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of the Fund.

Conflicts of Interest

The investment activities of the Investment Adviser and its affiliates (including, for these purposes, Merrill Lynch & Co., Inc., BlackRock, Inc., The PNC Financial Services Group, Inc. and their affiliates, directors, partners, trustees, managing members, officers and employees (collectively with the Investment Adviser, the “Affiliates”)) in the management of, or their interest in, their own accounts and other accounts they manage, may present conflicts of interest that could disadvantage the Fund and its shareholders. The Investment Adviser provides investment management services to other funds and discretionary managed accounts that follow an investment program similar to that of the Fund. The Investment Adviser and its Affiliates are involved worldwide with a broad spectrum of financial services and asset management activities and may engage in the ordinary course of business in activities in which their interests or the interests of their clients may conflict with those of the Fund. One or more Affiliates act or may act as an investor, investment manager, financer, advisor, market maker, trader, prime broker, lender, agent and/or principal, and have other direct and indirect interests, in the global fixed income, currency, commodity, equity and other markets in which the Fund directly and indirectly invests. Thus, it is likely that the Fund will have multiple business relationships with and will invest in, engage in transactions with, make voting decisions with respect to, or obtain services from entities for which an Affiliate performs or seeks to perform investment banking or other services. One or more Affiliates may engage in proprietary trading and advise accounts and funds that have investment objectives similar to those of the Fund and/or that engage in and compete for transactions in the same types of securities, currencies and instruments as the Fund. The trading activities of these Affiliates are carried out without reference to positions held directly or indirectly by the Fund and may result in an Affiliate having positions that are adverse to those of the Fund. No Affiliate is under any obligation to share any investment opportunity, idea or strategy with the Fund. As a result, an Affiliate may compete with the Fund for appropriate investment opportunities. The results of the Fund’s investment activities, therefore, may differ from those of an Affiliate and of other accounts managed by an Affiliate, and it is possible that the Fund could sustain losses during periods in which one or more Affiliates and other accounts achieve significant profits on their trading for proprietary or other accounts. In addition, the Fund may, from time to time, enter into transactions in which an Affiliate or its other clients have an adverse interest. Furthermore, transactions undertaken by an Affiliate or an Affiliate-advised client may adversely impact the Fund. Transactions by one or more Affiliate-advised clients or the Investment Adviser may have the effect of diluting or otherwise disadvantaging the values, prices or investment strategies of the Fund. The Fund’s activities may be limited because of regulatory restrictions applicable to one or more Affiliates, and/or

their internal policies designed to comply with such restrictions. In addition, the Fund may invest in securities of companies with which an Affiliate has or is trying to develop investment banking relationships or in which an Affiliate has significant debt or equity investments. The Fund also may invest in securities of companies for which an Affiliate provides or may some day provide research coverage. An Affiliate may have business relationships with and purchase or distribute or sell services or products from or to distributors, consultants or others who recommend the Fund or who engage in transactions with or for the Fund. The Fund may also make brokerage and other payments to an Affiliate in connection with the Fund’s portfolio investment transactions.

The activities of the Investment Adviser and its Affiliates may give rise to other conflicts of interest that could disadvantage the Fund and its shareholders. The Investment Adviser has adopted policies and procedures designed to address these potential conflicts of interest. See the Statement of Additional Information for further information.

FINANCIAL HIGHLIGHTS

The Financial Highlights table is intended to help you understand the Fund’s financial performance for the periods shown. Certain information reflects the financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the Fund (assuming reinvestment of all dividends). The information has been audited by Deliotte & Touche LLP, whose report, along with the Fund’s financial statements, is included in the Corporation’s Annual Report, which is available upon request.

	BlackRock Short-Term Municipal Fund
	Institutional										Investor A For the period October 2, 2006(d) to June 30, 2007		Investor A1
	For the Year Ended June 30,												For the Year Ended June 30,
	2007		2006		2005		2004		2003				2007		2006		2005		2004		2003

Per Share Operating Performance:

Net asset value, beginning of period	$ 9.88		$ 9.99		$ 10.05		$ 10.17		$ 10.13		$ 9.93		$ 9.89		$ 10.00		$ 10.06		$ 10.18		$ 10.14

Investment income — net(b)	.32		.27		.19		.18		.27		.23		.32		.26		.18		.17		.24

Realized and unrealized gain (loss) — net	—	(f)	(.11	)	(.06	)	(.12	)	.02		(.05	)	(.01	)	(.11	)	(.06	)	(.12	)	.04

Total from investment operations	.32		.16		.13		.06		.29		.18		.31		.15		.12		.05		.28

Less dividends from investment income — net	(.32	)	(.27	)	(.19	)	(.18	)	(.25	)	(.23	)	(.31	)	(.26	)	(.18	)	(.17	)	(.24	)

Net asset value, end of period	$ 9.88		$ 9.88		$ 9.99		$ 10.05		$ 10.17		$ 9.88		$ 9.89		$ 9.89		$ 10.00		$ 10.06		$ 10.18

Total Investment Return:(a)

Based on net asset value per share	3.32	%	1.57	%	1.30	%	.59	%	2.87	%	1.79	%(e)	3.21	%	1.47	%	1.20	%	.50	%	2.77	%

Ratios to Average Net Assets:

Expenses, net of waiver	.38	%	.44	%	.43	%	.42	%	.42	%	.61	%(c)	.48	%	.54	%	.53	%	.52	%	.52	%

Expenses	.48	%	.45	%	.44	%	.43	%	.43	%	1.06	%(c)	.58	%	.55	%	.54	%	.53	%	.53	%

Investment income — net	3.27	%	2.66	%	1.88	%	1.78	%	2.44	%	3.12	%(c)	3.18	%	2.55	%	1.76	%	1.68	%	2.31	%

Supplemental Data:

Net assets, end of period (in thousands)	$ 131,061		$ 149,333		$ 186,877		$ 243,443		$ 251,137		$ 1,456		$ 122,281		$ 99,293		$ 141,172		$ 244,741		$ 248,454

Portfolio turnover	110	%	83	%	87	%	69	%	45	%	110	%	110	%	83	%	87	%	69	%	45	%

(a)

Total investment returns exclude the effects of any sales charges.

(b)

Based on average shares outstanding.

(c)

Annualized

(d)

Commencement of operations.

(e)

Aggregate total investment return

(f)

Amount is less than $.01 per share.


30

FINANCIAL HIGHLIGHTS (continued)

	BlackRock Short-Term Municipal Fund
	Investor B										Investor C
	For the Year Ended June 30,										For the period October 2, 2006(d) to June 30,
	2007		2006		2005		2004		2003		2007

Per Share Operating
Performance:

Net asset value,
beginning of period	$ 9.88		$ 10.00		$ 10.05		$ 10.17		$ 10.13		$ 9.93

Investment income — net(b)	.29		.23		.15		.14		.21		.17

Realized and unrealized
gain (loss) — net	—	(c)	(.12	)	(.05	)	(.12	)	.04		(.05	)

Total from investment
operations	.29		.11		.10		.02		.25		.12

Less dividends from
investment income — net	(.29	)	(.23	)	(.15	)	(.14	)	(.21	)	(.17	)

Net asset value,
end of period	$ 9.88		$ 9.88		$ 10.00		$ 10.05		$ 10.17		$ 9.88

Total Investment
Return:(a)

Based on net asset
value per share	2.95	%	1.11	%	1.04	%	.24	%	2.51	%	1.23	%(e)

Ratios to Average
Net Assets:

Expenses, net of waiver	.74	%	.80	%	.79	%	.77	%	.78	%	1.36	%(f)

Expenses	.85	%	.81	%	.80	%	.78	%	.79	%	2.06	%(f)

Investment income — net	2.90	%	2.28	%	1.50	%	1.43	%	2.10	%	2.37	%(f)

Supplemental Data:

Net assets, end of period
(in thousands)	$ 14,380		$ 23,769		$ 38,565		$ 63,135		$ 83,886		$ 2,084

Portfolio turnover	110	%	83	%	87	%	69	%	45	%	110	%

(a)

Total investment returns exclude the effects of sales charges.

(b)

Based on average shares outstanding.

(c)

Amount is less than $(.01) per share

(d)

Commencement of operations.

(e)

Aggregate total investment return.

(f)

Annualized.

FINANCIAL HIGHLIGHTS (concluded)

	Short-Term Fund
	BlackRock Shares
	For the Period October 2, 2006(c) to June 30, 2007

Per Share Operating Performance:

Net asset value, beginning of period	$ 9.93

Investment income — net(b)	.25

Realized and unrealized loss — net	(.04	)

Total from investment operations	.21

Less dividends from investment income — net	(.25	)

Net asset value, end of period	$ 9.89

Total Investment Return:

Based on net asset value per share	2.09	%(d)

Ratios to Average Net Assets:

Expenses, net of waiver	.35	%(a)

Expenses	.45	%(a)

Investment income — net	3.34	%(a)

Supplemental Data:

Net assets, end of period (in thousands)	$ 2,457

Portfolio Turnover	110	%

(a)

Annualized.

(b)

Based on average shares outstanding.

(c)

Commencement of operations.

(d)

Aggregate total investment return.

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FUND
BlackRock Short-Term Municipal Fund of
BlackRock Municipal Bond Fund, Inc.
P.O. Box 9011
Princeton, New Jersey 08543-9011
1-800-441-7762