-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lct4J2ZopLH7bJOoSnZkwyRVdGSmX48WCq+AyIgXgoZiP45GQWiGrhzlw0JAkj0I ZBtwFNUF8x67v3QAPYW8eg== 0000900092-01-000027.txt : 20010228 0000900092-01-000027.hdr.sgml : 20010228 ACCESSION NUMBER: 0000900092-01-000027 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERRILL LYNCH MUNICIPAL BOND FUND INC CENTRAL INDEX KEY: 0000225635 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 132896246 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-02688 FILM NUMBER: 1554987 BUSINESS ADDRESS: STREET 1: 800 SCUDDERS MILL RD CITY: PLAINSBORO STATE: NJ ZIP: 08536 BUSINESS PHONE: 6092822026 FORMER COMPANY: FORMER CONFORMED NAME: ONE LIBERTY MUNICIPAL BOND FUND INC DATE OF NAME CHANGE: 19780622 N-30D 1 0001.txt SEMI-ANNUAL REPORT MERRILL LYNCH MUNICIPAL BOND FUND, INC. FUND LOGO Semi-Annual Report December 31, 2000 This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Fund unless accompanied or preceded by the Fund's current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change. Merrill Lynch Municipal Bond Fund, Inc. Box 9011 Princeton, NJ 08543-9011 Printed on post-consumer recycled paper MERRILL LYNCH MUNICIPAL BOND FUND, INC. Proxy Results During the six-month period ended December 31, 2000, Merrill Lynch Municipal Bond, Inc.'s shareholders voted on the following proposals. The proposals were approved at a shareholders' meeting on July 25, 2000. The description of each proposal and number of shares voted are as follows:
Shares Voted For 1. To elect the Fund's Board of Directors: Terry K. Glenn 296,504,369 Ronald W. Forbes 296,191,977 Cynthia A. Montgomery 296,359,364 Charles C. Reilly 295,999,686 Kevin A. Ryan 296,254,943 Roscoe S. Suddarth 296,321,708 Richard R. West 296,473,479 Arthur Zeikel 296,155,116 Edward D. Zinbarg 296,288,118 Shares Voted Shares Voted Shares Voted For Against Abstain 2. To ratify the selection of Deloitte & Touche LLP as the Fund's independent auditors for the current fiscal year. 288,384,624 3,056,841 12,786,529 3. To approve to convert the Fund to "master/feeder" structure. 260,295,142 18,206,183 25,726,674
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 DEAR SHAREHOLDER The Municipal Market Environment During the six months ended December 31, 2000, long-term fixed- income securities performed very strongly. Throughout the period, a number of economic indicators, particularly employment, consumer spending and confidence, and business purchasing managers surveys, suggested that US economic growth had significantly moderated from 1999's and early 2000's robust levels. Third-quarter 2000 US gross domestic product growth was revised to 2.2%, well below the first- quarter 2000 rate of 4.8% and the second-quarter 2000 rate of 5.6%. In recent months, the material decline in US equity indexes, particularly the NASDAQ, is likely to negatively impact future US economic growth. Investors are expected to curtail future expenditures in response to the significant declines in the value of their equity holdings. Despite higher commodity prices, especially for oil and natural gas related to unseasonably cold weather throughout the United States, inflationary pressures remained muted. Recent consumer inflationary indicators were well below 3% annually. Given a slowing domestic economy and a continued benign inflationary environment, the Federal Reserve Board indicated at its December 2000 meeting that no additional short-term interest rate increases were anticipated. However, just after the close of the period, the Federal Reserve Board lowered interest rates by 0.50%. A series of such moves may likely be needed, both to stabilize and return US economic growth to its earlier levels. Given the potential for, at least, stable short-term interest rates in the coming months, investor emphasis focused on the continuing US Treasury debt reduction program and forecasts of sizeable Federal budgetary surpluses going forward. Many investors concluded that there will be a significant future shortage of longer-dated maturity US Treasury securities. These factors helped push US Treasury bond yields lower during December 2000, as US Treasury bond yields declined 45 basis points (0.45%) to 5.45%, their lowest level in almost two years. The six months ended December 31, 2000, was one of the few periods in recent years in which the tax-exempt bond market outperformed its taxable counterpart, the US Treasury bond market. While municipal bond yields followed the similar pattern of US Treasury bond yields, tax-exempt bond price volatility was significantly reduced. Municipal bond yields traded in a relatively narrow range during much of December 2000. Overall investor demand for municipal bonds remained strong, allowing tax-exempt bond yields, as measured by the Bond Buyer Revenue Bond Index, to decline 50 basis points to end the period at 5.48%. New long-term tax-exempt issuance has continued to decline, although in recent months the rate of this decline has slowed. During the past three months, almost $60 billion in new long-term municipal bonds was issued, a decline of 5.5% compared to the same three- month period in 1999. During the last 12 months, municipalities have underwritten approximately $200 billion in securities, an annual decline of 12%. This reduction in tax-exempt bond issuance helped to provide a solid technical support for the municipal bond market. The demand for municipal bonds came from a number of non-traditional and conventional sources. Derivative/ arbitrage programs and issuance companies remained the dominant institutional buyers, while individual retail purchases also remained strong. Traditional, open- end tax-exempt mutual funds have continued to see significant disintermediation. It was recently reported that during the 2000 calendar year, long-term municipal bond mutual funds experienced net cash outflows of approximately $15 billion. Fortunately, the combination of reduced new bond issuance and ongoing demand from non- traditional sources has been able to more than offset the decline in demand from tax-exempt mutual funds. This favorable balance has fostered a significant decline in municipal bond yields in recent months. The outlook for the tax-exempt bond market in 2001 appears quite favorable. The steeply positive yield curve and relatively high credit quality that the municipal bond market offers should continue to attract retail and institutional investors seeking both tax- exempt income and a ready substitute for relatively scarce US Government securities. Strong state and local governmental financial conditions also suggest that issuance should remain manageable. Recently, research analysts suggested that annual issuance in 2001 is likely to remain in the $200 billion range. Additionally, both Federal tax policy and tax reform are likely to be unchanged in 2001 as the recent results of the Presidential and Congressional elections do not favor quick legislation on either of these issues. These factors suggest that the strong technical position the tax- exempt market has enjoyed is likely to continue. Given recent market performance, the strong returns generated by tax-exempt products in 2000 again illustrate the investment diversification municipal bonds provide to all investors. Portfolio Strategy Insured Portfolio We seek to provide the Insured Portfolio with a balanced performance, focusing on high current yields with competitive total returns. While maintaining very low cash reserves for most of the past six months, we concentrated on purchasing premium coupons in the 10-year-20-year range. The 15-year sector of the municipal yield curve provided above-average risk-adjusted returns, while capturing greater than 90% of the yield further out the curve. Our strategy enabled the Portfolio to maintain very competitive yields with a more neutral interest rate position. In addition, we started to increase the Portfolio's exposure to insured inverse floater securities. With the Federal Reserve Board lowering short-term interest rates, both inverse floater securities and intermediate maturity bonds should allow us to continue to provide for our shareholders attractive current yields and competitive total returns. National Portfolio During the six month period ended December 31, 2000, National Portfolio benefited from the general decline in long-term interest rates. We maintained very low levels of cash equivalent reserves, preferring to invest in the longer maturity portion of the yield curve. We continued to emphasize credit quality. This attention to higher-grade credits was a major benefit in a period of widening credit quality spreads. Supply/demand technicals were quite supportive for investors as relatively low new issuance (less than $200 billion in 2000) was insufficient for what has become a strong retail demand side. Recently, we adopted a more moderate strategy for the Portfolio's long-term interest rate exposure. We took steps to shorten the average portfolio maturity and raise its overall coupon structure. Currently, yields offered on long-term municipal securities are significantly lower than at the beginning of 1999, and we are concerned that retail demand could stall at these prices. Consequently, we sought to protect the Portfolio's net asset valuations. With the Federal Reserve Board cutting short-term interest rates, we intend to seek to enhance our exposure to insured inverse floater securities. We believe this structure should allow the Fund to maintain an above-average industry current yield without compromising credit quality. Reducing price volatility has been slow as we recognize that the environment for fixed-income securities is currently very positive. Our concern going forward is that the Federal Reserve Board may take aggressive and stimulative fiscal action through tax relief, which would detract from this "ideal" bond environment. Limited Maturity Portfolio We continued to maintain a fully invested position for Limited Maturity Portfolio with minimal cash reserves. Our belief was that a slowing economy would lead to an easing of Federal Reserve Board monetary policy and that any easing would directly and immediately effect the short-term sector of the yield curve. Additionally, we kept an average portfolio maturity between 1.5 years-1.8 years to capture as much capital appreciation as possible. We continued to purchase high-quality, current coupons and maintained an average credit quality of "AA1" for the Portfolio to help limit the effects of market fluctuations. This investment strategy enhanced the performance of the Portfolio during the past six months as interest rates fell. Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 In Conclusion We appreciate your ongoing interest in Merrill Lynch Municipal Bond Fund, Inc., and we look forward to serving your investment needs in the months and years to come. Sincerely, (Terry K. Glenn) Terry K. Glenn President and Director (Vincent R. Giordano) Vincent R. Giordano Senior Vice President (Robert DiMella) Robert DiMella Vice President and Portfolio Manager (Peter Hayes) Peter Hayes Vice President and Portfolio Manager (Walter O'Connor) Walter O'Connor Vice President and Portfolio Manager February 9, 2001 PERFORMANCE DATA About Fund Performance Investors are able to purchase shares of the Fund through the Merrill Lynch Select Pricing SM System, which offers four pricing alternatives: * Class A Shares incur a maximum initial sales charge (front-end load) of 4% and bear no ongoing distribution or account maintenance fees for Insured and National Portfolios. Limited Maturity Portfolio incurs a maximum initial sales charge (front-end load) of 1% and bears no ongoing distribution or account maintenance fees. * Class B Shares are subject to a maximum contingent deferred sales charge of 4% if redeemed during the first year, decreasing 1% each year thereafter to 0% after the fourth year for Insured and National Portfolios. Limited Maturity Portfolio is subject to a maximum contingent deferred sales charge of 1% if redeemed within one year of purchase. In addition, Insured and National Portfolios are subject to a distribution fee of 0.50% and an account maintenance fee of 0.25%. Limited Maturity Portfolio is subject to a distribution fee of 0.20% and an account maintenance fee of 0.15%. All three classes of shares automatically convert to Class D Shares after approximately 10 years. (There is no initial sales charge for automatic share conversions.) * Class C Shares are subject to a distribution fee of 0.55% and an account maintenance fee of 0.25% for Insured and National Portfolios. Limited Maturity Portfolio is subject to a distribution fee of 0.20% and an account maintenance fee of 0.15%. In addition, Class C Shares for all three portfolios are subject to a 1% contingent deferred sales charge if redeemed within one year of purchase. * Class D Shares incur a maximum initial sales charge of 4% and an account maintenance fee of 0.25% (but no distribution fee) for Insured and National Portfolios. Limited Maturity Portfolio incurs a maximum initial sales charge of 1% and an account maintenance fee of 0.10% (but no distribution fee). None of the past results shown should be considered a representation of future performance. Figures shown in the "Recent Performance Results" and "Average Annual Total Return" tables assume reinvestment of all dividends and capital gains distributions at net asset value on the payable date. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Dividends paid to each class of shares will vary because of the different levels of account maintenance, distribution and transfer agency fees applicable to each class, which are deducted from the income available to be paid to shareholders. Insured Portfolio Average Annual Total Return % Return Without % Return With Class A Shares* Sales Charge Sales Charge** One Year Ended 12/31/00 +12.28% +7.79% Five Years Ended 12/31/00 +4.83 +3.98 Ten Years Ended 12/31/00 +6.69 +6.26 *Maximum sales charge is 4%. **Assuming maximum sales charge. % Return % Return Class B Shares* Without CDSC With CDSC** One Year Ended 12/31/00 +11.59% +7.59% Five Years Ended 12/31/00 +4.06 +4.06 Ten Years Ended 12/31/00 +5.89 +5.89 *Maximum contingent deferred sales charge is 4% and is reduced to 0% after 4 years. **Assuming payment of applicable contingent deferred sales charge. % Return % Return Class C Shares* Without CDSC With CDSC** One Year Ended 12/31/00 +11.53% +10.53% Five Years Ended 12/31/00 +3.99 +3.99 Inception (10/21/94) through 12/31/00 +5.71 +5.71 *Maximum contingent deferred sales charge is 1% and is reduced to 0% after 1 year. **Assuming payment of applicable contingent deferred sales charge. % Return Without % Return With Class D Shares* Sales Charge Sales Charge** One Year Ended 12/31/00 +12.15% +7.67% Five Years Ended 12/31/00 +4.57 +3.72 Inception (10/21/94) through 12/31/00 +6.30 +5.60 *Maximum sales charge is 4%. **Assuming maximum sales charge. National Portfolio Average Annual Total Return % Return Without % Return With Class A Shares* Sales Charge Sales Charge** One Year Ended 12/31/00 +12.38% +7.88% Five Years Ended 12/31/00 +5.14 +4.28 Ten Years Ended 12/31/00 +6.96 +6.53 *Maximum sales charge is 4%. **Assuming maximum sales charge. % Return % Return Class B Shares* Without CDSC With CDSC** One Year Ended 12/31/00 +11.42% +7.42% Five Years Ended 12/31/00 +4.32 +4.32 Ten Years Ended 12/31/00 +6.15 +6.15 *Maximum contingent deferred sales charge is 4% and is reduced to 0% after 4 years. **Assuming payments of applicable contingent deferred sales charge. % Return % Return Class C Shares* Without CDSC With CDSC** One Year Ended 12/31/00 +11.48% +10.48% Five Years Ended 12/31/00 +4.29 +4.29 Inception (10/21/94) through 12/31/00 +5.85 +5.85 *Maximum contingent deferred sales charge is 1% and is reduced to 0% after 1 year. **Assuming payment of applicable contingent deferred sales charge. % Return Without % Return With Class D Shares* Sales Charge Sales Charge** One Year Ended 12/31/00 +11.98% +7.50% Five Years Ended 12/31/00 +4.85 +4.00 Inception (10/21/94) through 12/31/00 +6.44 +5.74 *Maximum sales charge is 4%. **Assuming maximum sales charge. Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 PERFORMANCE DATA (concluded) Limited Maturity Portfolio Average Annual Total Return % Return Without % Return With Class A Shares* Sales Charge Sales Charge** One Year Ended 12/31/00 +5.04% +3.99% Five Years Ended 12/31/00 +3.92 +3.71 Ten Years Ended 12/31/00 +4.43 +4.32 *Maximum sales charge is 1%. **Assuming maximum sales charge. % Return % Return Class B Shares* Without CDSC With CDSC** One Year Ended 12/31/00 +4.66% +3.66% Five Years Ended 12/31/00 +3.55 +3.55 Inception (11/2/92) through 12/31/00 +3.61 +3.61 *Maximum contingent deferred sales charge is 1% and is reduced to 0% after 1 year. **Assuming payment of applicable contingent deferred sales charge. % Return % Return Class C Shares* Without CDSC With CDSC** One Year Ended 12/31/00 +4.66% +3.66% Five Years Ended 12/31/00 +3.41 +3.41 Inception (10/21/94) through 12/31/00 +3.72 +3.72 *Maximum contingent deferred sales charge is 1% and is reduced to 0% after 1 year. **Assuming payment of applicable contingent deferred sales charge. % Return Without % Return With Class D Shares* Sales Charge Sales Charge** One Year Ended 12/31/00 +5.04% +3.99% Five Years Ended 12/31/00 +3.84 +3.63 Inception (10/21/94) through 12/31/00 +4.09 +3.92 *Maximum sales charge is 1%. **Assuming maximum sales charge. Recent Performance Results*
Ten-Year/ Since 6-Month 12-Month Inception Standardized As of December 31, 2000 Total Return Total Return Total Return 30-Day Yield ML Municipal Bond Fund, Inc. Insured Portfolio Class A Shares** +7.35% +12.28% +91.13% 4.65% ML Municipal Bond Fund, Inc. Insured Portfolio Class B Shares** +6.95 +11.59 +77.26 4.09 ML Municipal Bond Fund, Inc. Insured Portfolio Class C Shares** +6.92 +11.53 +41.06 4.04 ML Municipal Bond Fund, Inc. Insured Portfolio Class D Shares** +7.22 +12.15 +46.02 4.41 ML Municipal Bond Fund, Inc. National Portfolio Class A Shares** +7.24 +12.38 +96.04 4.84 ML Municipal Bond Fund, Inc. National Portfolio Class B Shares** +6.73 +11.42 +81.62 4.29 ML Municipal Bond Fund, Inc. National Portfolio Class C Shares** +6.70 +11.48 +42.22 4.24 ML Municipal Bond Fund, Inc. National Portfolio Class D Shares** +7.00 +11.98 +47.19 4.60 ML Municipal Bond Fund, Inc. Limited Maturity Portfolio Class A Shares*** +3.02 +5.04 +54.24 4.00 ML Municipal Bond Fund, Inc. Limited Maturity Portfolio Class B Shares*** +2.73 +4.66 +33.59 3.69 ML Municipal Bond Fund, Inc. Limited Maturity Portfolio Class C Shares*** +2.73 +4.66 +25.41 3.68 ML Municipal Bond Fund, Inc. Limited Maturity Portfolio Class D Shares*** +2.96 +5.04 +28.16 3.90 *Investment results shown do not reflect sales charges; results shown would be lower if a sales charge were included. Total investment returns are based on changes in net asset values for the periods shown, and assume reinvestment of all dividends and capital gains distributions at net asset value on the payable date. **The Fund's ten-year/since inception periods are ten years for Class A & Class B Shares and from 10/21/94 for Class C & Class D Shares. ***The Fund's ten-year/since inception periods are ten years for Class A Shares; from 11/2/92 for Class B Shares; and from 10/21/94 for Class C & Class D Shares.
OFFICERS AND DIRECTORS Terry K. Glenn, President and Director Ronald W. Forbes, Director Cynthia A. Montgomery, Director Charles C. Reilly, Director Kevin A. Ryan, Director Roscoe S. Suddarth, Director Richard R. West, Director Edward D. Zinbarg, Director Vincent R. Giordano, Senior Vice President Robert A. DiMella, Vice President Peter J. Hayes, Vice President Kenneth A. Jacob, Vice President Walter C. O'Connor, Vice President Donald C. Burke, Vice President and Treasurer Alice A. Pellegrino, Secretary Arthur Zeikel, Director of Merrill Lynch Municipal Bond Fund, Inc., has recently retired. The Fund's Board of Directors wishes Mr. Zeikel well in his retirement. Custodian The Bank of New York 90 Washington Street, 12th Floor New York, NY 10286 Transfer Agent Financial Data Services, Inc. 4800 Deer Lake Drive East Jacksonville, FL 32246-6484 (800) 637-3863 Portfolio Abbreviations To simplify the listings of MerrillLynch Municipal Bond Fund, Inc.'s portfolio holdings in the Schedule of Investments, we have abbreviated the names of many of the securities according to the list at right. ACES SM Adjustable Convertible Extendable Securities AMT Alternative Minimum Tax (subject to) BAN Bond Anticipation Notes COP Certificates of Participation EDA Economic Development Authority GO General Obligation Bonds HDA Housing Development Authority HFA Housing Finance Agency IDA Industrial Development Authority IDR Industrial Development Revenue Bonds INFLOS Inverse Floating Rate Municipal Bonds IRS Inverse Rate Securities LEVRRS Leveraged Reverse Rate Securities PCR Pollution Control Revenue Bonds RIB Residual Interest Bonds RITR Residual Interest Trust Receipts S/F Single-Family TAN Tax Anticipation Notes TRAN Tax Revenue Anticipation Notes VRDN Variable Rate Demand Notes Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 SCHEDULE OF INVESTMENTS (in Thousands)
Municipal Bonds Insured Portfolio S&P Moody's Face STATE Ratings Ratings Amount Issue Value Alabama--1.5% AAA Aaa $ 1,585 Alabama Water Pollution Control Authority Revenue Bonds, Revolving Fund Loan, Series A, 6.75% due 8/15/2017 (b) $ 1,722 AAA Aaa 10,000 Lauderdale County and Florence, Alabama, Health Care Authority Revenue Refunding Bonds (Coffee Health Group), Series A, 6% due 7/01/2029 (e) 10,668 AAA Aaa 7,000 University of Alabama, University Revenue Bonds (Birmingham), 6% due 10/01/2020 (h) 7,573 Alaska--0.5% Anchorage, Alaska, School, GO, Series B (h): AAA Aaa 2,500 5.125% due 12/01/2019 2,498 AAA Aaa 3,500 5% due 12/01/2020 3,435 Arizona--0.6% AAA Aaa 6,750 Arizona State Municipal Financing Program, COP, Series 34, 7.25% due 8/01/2009 (g) 8,060 California--2.3% ABC, California, Unified School District, GO (h): AAA Aaa 540 5.55%** due 8/01/2026 139 AAA Aaa 380 5.56%** due 8/01/2027 93 AAA Aaa 435 5.56%** due 8/01/2028 100 AAA Aaa 380 5.57%** due 8/01/2030 79 AAA Aaa 665 5.59%** due 8/01/2032 123 AAA Aaa 2,785 5.513%** due 8/01/2033 489 AAA Aaa 2,925 5.523%** due 8/01/2034 487 AAA Aaa 4,550 Alameda Corridor Transportation Authority, California, Revenue Bonds, Senior Lien, Series A, 4.75% due 10/01/2025 (e) 4,338 AAA Aaa 4,275 Cabrillo, California, Unified School District, GO, Series A, 5.621%** due 8/01/2020 (b) 1,534 AAA Aaa 3,000 Encinitas, California, Unified School District, GO, 5.571%** due 8/01/2019 (e) 1,141 AAA Aaa 8,500 Los Angeles, California, Department of Water and Power, Waterworks Revenue Refunding Bonds, 4.25% due 10/15/2030 (h) 7,301 AAA Aaa 5,800 Oakland, California, Redevelopment Agency Tax Allocation Refunding Bonds, INFLOS, 7.256% due 9/01/2019 (d)(e) 6,250 Rialto, California, Unified School District, GO, Series A (h): AAA Aaa 13,985 6.12%** due 6/01/2019 5,364 AAA Aaa 11,685 6.24%** due 6/01/2025 3,195 Colorado--4.0% AAA Aaa 19,250 Aurora, Colorado, COP, 6% due 12/01/2025 (b) 20,866 NR* Aaa 31,160 Denver, Colorado, City and County Airport Revenue Refunding Bonds, RIB, Series 153, 6.18% due 11/15/2025 (d)(e) 33,376 Connecticut AAA Aaa 10,090 Connecticut State Special Tax Obligation Revenue - --0.8% Bonds (Transportation Infrastructure), Series B, 5.375% due 10/01/2016 (e) 10,408 District of AAA Aaa 7,500 District of Columbia, GO, Refunding, Series B, Columbia-- 5.50% due 6/01/2014 (i) 7,870 0.6% Florida--6.3% Dade County, Florida, Water and Sewer System Revenue Bonds (h): AAA Aaa 10,000 5.25% due 10/01/2026 10,062 A1+ VMIG1++ 2,500 VRDN, 4.45% due 10/05/2022 (f) 2,500 NR* Aaa 15,000 Escambia County, Florida, Health Facilities Authority, Health Facility Revenue Bonds (Florida Health Care Facility Loan), 5.95% due 7/01/2020 (b) 16,365 Florida State Board of Education, Lottery Revenue Bonds, Series B (h): AAA Aaa 4,400 5.75% due 7/01/2009 4,847 AAA Aaa 8,900 6% due 7/01/2013 9,938 AAA Aaa 9,435 6% due 7/01/2014 10,481 AAA Aaa 9,645 6% due 7/01/2015 10,667 AAA Aaa 14,800 Florida State Department of Environmental Protection, Preservation Revenue Bonds, Series A, 5.75% due 7/01/2008 (h) 16,204 AAA Aaa 2,240 West Coast Regional Water Supply Authority, Florida, Capital Improvement Revenue Bonds, 10.40% due 10/01/2010 (a)(b) 3,126 Georgia--3.7% Georgia Municipal Electric Authority, Power Revenue Refunding Bonds: AAA Aaa 20,000 Series EE, 7% due 1/01/2025 (b) 25,292 AAA Aaa 9,000 Series Y, 6.40% due 1/01/2013 (b) 10,440 AAA Aaa 10,000 Series Z, 5.50% due 1/01/2020 (e) 10,651 AAA Aaa 2,490 Georgia State Municipal Electric Authority Revenue Refunding Bonds, Series C, 5.25% due 1/01/2025 (e) 2,555 Hawaii--0.8% AAA Aaa 10,000 Hawaii State Airport System Revenue Refunding Bonds, 6.45% due 7/01/2013 (e) 10,643 Illinois--15.3% AAA Aaa 12,650 Chicago, Illinois, Board of Education, GO (Chicago School Reform Project), Series A, 5.25% due 12/01/2022 (b) 12,667 Chicago, Illinois, O'Hare International Airport Revenue Bonds (Passenger Facility Charge), Series A: AAA Aaa 2,000 5% due 1/01/2013 (e) 2,011 AAA Aaa 2,000 5.625% due 1/01/2015 (b) 2,084 AAA Aaa 10,800 Illinois Development Finance Authority, PCR, Refunding (Illinois Power Company Project), Series A, 5.40% due 3/01/2028 (e) 10,845 AAA Aaa 3,250 Illinois Health Facilities Authority Revenue Bonds (Elmhurst Memorial Hospital), 6.625% due 1/01/2022 (h) 3,371 Illinois Health Facilities Authority, Revenue Refunding Bonds: AAA Aaa 3,740 (Methodist Medical Center), 5.50% due 11/15/2011 (e) 3,955 AAA NR* 14,450 RIB, Series 166, 6.78% due 2/15/2024 (b)(d)(j) 15,793 A1 VMIG1++26,150 (Resurrection Health), VRDN, Series A, 4.90% due 5/01/2029 (f)(i) 26,150 Illinois Regional Transportation Authority Revenue Bonds (e): AAA Aaa 20,615 6.50% due 7/01/2026 24,875 AAA Aaa 26,000 Series A, 6.25% due 6/01/2004 (a)(b) 28,176 AAA Aaa 3,000 Illinois State, GO, 5.75% due 5/01/2021 (e) 3,142 Kane, McHenry, Cook and DeKalb Counties, Illinois, United School District Number 300, GO (e): AAA Aaa 5,000 5.50% due 12/01/2013 5,317 AAA Aaa 5,500 5.50% due 12/01/2014 5,815 AAA Aaa 6,000 5.50% due 12/01/2015 6,307 AAA Aaa 7,000 5.50% due 12/01/2016 7,328 AAA Aaa 4,000 5.50% due 12/01/2017 4,170 AAA Aaa 14,735 Metropolitan Pier and Exposition Authority, Illinois, Dedicated State Tax Revenue Refunding Bonds (McCormick Plant Expansion Project), 5.50% due 12/15/2024 (h) 15,088 NR* Aaa 9,000 Northern Illinois University, Auxiliary Facilities System Revenue Refunding Bonds, 5.75% due 4/01/2022 (h) 9,334 AAA Aaa 10,700 Regional Transportation Authority, Illinois, GO, Refunding, 5.75% due 6/01/2018 (i) 11,770 AAA Aaa 6,905 Will and Kendall Counties, Illinois, Community Consolidated School District Number 202, GO, 5.75% due 12/30/2011 (i) 7,538
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 SCHEDULE OF INVESTMENTS (continued) (in Thousands)
Municipal Bonds Insured Portfolio S&P Moody's Face STATE Ratings Ratings Amount Issue Value Indiana--0.9% AAA Aaa $ 5,555 Indiana State Office Building Commission, Facilities Revenue Bonds (Miami Correctional Facility-Phase 1), Series A, 5.50% due 7/01/2015 (b) $ 5,821 AAA Aaa 4,040 Indianapolis, Indiana, Local Public Improvement Revenue Bonds, 7.90% due 2/01/2002 (a)(g) 4,053 AAA Aaa 2,500 Penn, Indiana, High School Building Corporation Revenue Bonds, First Mortgage, 6.125% due 7/15/2005 (a)(e) 2,720 Kansas--0.9% AAA Aaa 11,000 Kansas City, Kansas, Utility System Revenue Refunding and Improvement Bonds, 6.25% due 9/01/2014 (h) 11,866 Maryland--0.4% AAA Aaa 4,400 Maryland State Health and Higher Educational Facilities Authority Revenue Bonds (University of Maryland Medical System), Series B, 7% due 7/01/2022 (h) 5,491 Massachusetts-- Massachusetts Bay, Massachusetts, Transportation Authority, 2.7% Revenue Refunding Bonds (General Transportation System): AAA Aaa 5,865 Series A, 5.50% due 3/01/2015 (h) 6,171 AAA Aaa 3,000 Series B, 5% due 3/01/2028 (e) 2,889 AAA Aaa 2,920 Massachusetts Educational Loan Authority, Education Loan Revenue Bonds, AMT, Issue D, Series A, 7.25% due 1/01/2009 (e) 3,013 AAA Aaa 10,000 Massachusetts State Health and Educational Facilities Authority Revenue Bonds (Beth Israel Deaconess Medical Center), INFLOS, Series G-4, 6.646% due 7/01/2025 (b)(d) 10,438 AAA Aaa 3,100 Massachusetts State Health and Educational Facilities Authority, Revenue Refunding Bonds (Saint Elizabeth's Hospital), LEVRRS, Series E, 8.72% due 8/12/2021 (d)(i) 3,302 AAA Aaa 10,000 Route 3 North Transit Improvement Association, Massachusetts, Lease Revenue Bonds, 5.75% due 6/15/2025 (e) 10,537 Michigan--1.3% AAA Aaa 6,915 Michigan State HDA, Rental Housing Revenue Refunding Bonds, Series B, 6.15% due 10/01/2015 (e) 7,227 AAA Aaa 10,000 Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds (Detroit Edison Company), Series AA, 6.40% due 9/01/2025 (e) 10,765 Minnesota--1.6% NR* Aaa 5,860 Delano, Minnesota, Independent School District Number 879, GO, Series A, 5.875% due 2/01/2025 (i) 6,315 AAA Aaa 5,910 Minneapolis and Saint Paul, Minnesota, Metropolitan Airports Commission, Airport Revenue Bonds, AMT, Series B, 6.20% due 1/01/2017 (h) 6,431 Sauk Rapids, Minnesota, Independent School District Number 047, GO, Series A (e): NR* Aaa 3,735 5.65% due 2/01/2020 3,914 NR* Aaa 4,440 5.70% due 2/01/2021 4,679 Mississippi--0.9% AAA Aaa 1,320 Harrison County, Mississippi, Wastewater Management District Revenue Refunding Bonds (Wastewater Treatment Facilities), Series A, 8.50% due 2/01/2013 (h) 1,775 NR* Aaa 10,000 Mississippi Hospital Equipment and Facilities Authority Revenue Bonds (Forrest County General Hospital Project), 6% due 1/01/2030 (i) 10,655 Missouri--1.7% Kansas City, Missouri, Airport Revenue Refunding and Improvement Bonds, Series A (e): AAA Aaa 12,990 5.50% due 9/01/2013 13,767 AAA Aaa 9,000 5.50% due 9/01/2014 9,501 Nevada--4.1% Director for the State of Nevada, Department of Business and Industry Revenue Bonds (Las Vegas Monorail Company) (b): AAA Aaa 7,595 5.94%** due 1/01/2024 2,185 AAA Aaa 5,425 5.95%** due 1/01/2025 1,478 AAA Aaa 5,445 5.96%** due 1/01/2026 1,402 AAA Aaa 3,000 5.97%** due 1/01/2027 732 AAA Aaa 5,000 5.97%** due 1/01/2028 1,152 AAA Aaa 45,000 Washoe County, Nevada, Water Facility Revenue Bonds (Sierra Pacific Power Company), AMT, 6.65% due 6/01/2017 (e) 47,305 New Jersey--5.8% AAA Aaa 6,810 Cape May County, New Jersey, Industrial Pollution Control Financing Authority Revenue Refunding Bonds (Atlantic City Electric Company Project), Series A, 6.80% due 3/01/2021 (e) 8,399 NR* Aaa 12,500 New Jersey EDA, Natural Gas Facilities Revenue Refunding Bonds (NUI Corporation), RIB, Series 371, 7.63% due 10/01/2022 (b)(d) 14,303 AAA Aaa 12,420 New Jersey State Housing and Mortgage Finance Agency, Home Buyer Revenue Bonds, AMT, Series M, 7% due 10/01/2026 (e) 13,163 New Jersey State Turnpike Authority, Turnpike Revenue Refunding Bonds: AAA Aaa 14,000 Series A, 5.25% due 1/01/2005 (e) 14,563 AAA Aaa 4,215 Series C, 6.50% due 1/01/2008 (b) 4,765 Salem County, New Jersey, Industrial Pollution Control Financing Authority Revenue Refunding Bonds (Public Service Electric & Gas), RIB (d)(e): AAA Aaa 10,000 Series 380, 7.43% due 6/01/2031 11,231 AAA Aaa 10,000 Series 381, 7.33% due 8/01/2030 11,192 New York--13.4% AAA Aaa 15,560 Long Island Power Authority, New York, Electric System Revenue Bonds, 5.47%** due 6/01/2010 (i) 10,063 AAA Aaa 16,500 Long Island Power Authority, New York, Electric System Revenue Refunding Bonds, Series A, 5.50% due 12/01/2029 (e) 16,749 AAA Baa1 4,920 Metropolitan Transportation Authority, New York, Transit Facilities Revenue Refunding Bonds (Service Contract), Series R, 5.50% due 7/01/2007 (e) 5,266 AAA Aaa 5,000 Nassau Health Care Corporation, New York, Health System Revenue Bonds (Nassau County), 6% due 8/01/2011 (i) 5,590 AAA Aaa 24,150 New York City, New York, City Municipal Water Finance Authority, Water and Sewer System Revenue Bonds, Series B, 5.75% due 6/15/2026 (e) 25,085 New York City, New York, GO: AAA Aaa 15,000 Series B, 6.25% due 8/15/2008 (b) 16,617 AAA Aaa 4,225 Series E, 6% due 8/01/2007 (h) 4,639 AAA Aaa 31,000 Series I, 6% due 4/15/2012 (i) 33,721 New York City, New York, GO, Refunding: AAA Aaa 5,000 Series A, 5.25% due 8/01/2011 (h) 5,264 AAA Aaa 7,655 Series G, 5.75% due 2/01/2014 (e) 8,105 AAA NR* 7,655 Series G, 5.75% due 2/01/2017 (i) 8,048 New York State Dormitory Authority, Revenue Refunding Bonds (e): AAA Aaa 10,000 (Mental Health Services), Series A, 5.75% due 8/15/2022 10,441 AAA Aaa 3,400 (Saint Charles Hospital and Rehabilitation Center), Series A, 5.625% due 7/01/2012 3,656 AAA Aaa 1,650 New York State Enviromental Facilities Corporation, Special Obligation Revenue Refunding Bonds (Riverbank State Park), 5.50% due 4/01/2016 (b) 1,718 NR* Aaa 20,000 New York State Local Government Assistance Corporation, Revenue Refunding Bonds, RIB, Series 468X, 5.50% due 4/01/2021 (d)(h) 20,755 AAA Aaa 160 New York State Medical Care Facilities Finance Agency Revenue Bonds, Series E, 6.25% due 8/15/2004 (h) 170 Niagara Falls, New York, GO, Public Improvement (e): AAA Aaa 2,975 6.90% due 3/01/2023 3,239 AAA Aaa 3,190 6.90% due 3/01/2024 3,473 Ohio--1.6% Ohio State Water Development Authority, Pollution Control Facilities Revenue Bonds (Water Control Loan Fund-Water Quality Series) (e): AAA Aaa 3,575 5.50% due 12/01/2010 3,827 AAA Aaa 3,175 5.50% due 6/01/2012 3,374 AAA Aaa 3,420 5.50% due 6/01/2013 3,613 AAA Aaa 6,000 5.50% due 6/01/2014 6,313 AAA Aaa 4,260 Ohio State Water Development Authority Revenue Bonds (Water Development-Community Assistance), 5.375% due 12/01/2024 (b) 4,322 Oklahoma--0.5% AAA Aaa 6,385 Oklahoma State IDR, Refunding (Health System), Series A, 6.25% due 8/15/2016 (e) 6,994
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
Municipal Bonds Insured Portfolio S&P Moody's Face STATE Ratings Ratings Amount Issue Value Oregon--1.1% AAA Aaa $ 8,700 Oregon State Department, Administrative Services, COP, Series A, 6.25% due 5/01/2021 (b) $ 9,696 AAA Aaa 3,865 Port of Portland, Oregon, Airport Revenue Refunding Bonds (Portland International Airport), AMT, Series 7-B, 7.10% due 1/01/2012 (a)(e) 4,633 Pennsylvania AAA Aaa 7,000 Lancaster, Pennsylvania, GO, Refunding, Series A, - --2.6% 4.50% due 5/01/2028 (h) 6,228 AAA Aaa 17,000 Pennsylvania State Turnpike Commission, Oil Franchise Tax Revenue Refunding Bonds, Senior Series A, 4.75% due 12/01/2027 (b) 15,830 AAA Aaa 6,000 Philadelphia, Pennsylvania, Gas Works Revenue Bonds, 12th Series B, 7% due 5/15/2020 (c)(e) 7,288 AAA Aaa 5,000 Southeastern Pennsylvania Transportation Authority, Special Revenue Bonds, 5.375% due 3/01/2022 (h) 5,074 Puerto Rico NR* Aaa 5,985 Puerto Rico Electric Power Authority, Power Revenue - --0.5% Bonds, Trust Receipts, Class R, Series 16 HH, 6.775% due 7/01/2013 (d)(i) 7,193 Rhode Island AAA Aaa 6,815 Rhode Island State Economic Development Corporation, - --0.5% Airport Revenue Bonds, Series B, 6% due 7/01/2028 (h) 7,358 South Carolina South Carolina State Public Service Authority, - --1.7% Revenue Refunding Bonds, Series A (b): AAA Aaa 17,090 6.375% due 7/01/2021 17,777 AAA Aaa 4,200 6.25% due 1/01/2022 4,517 Tennessee--0.9% Putnam County, Tennessee, School GO (h): NR* Aaa 4,450 5.375% due 4/01/2018 4,575 NR* Aaa 3,750 5.50% due 4/01/2019 3,887 NR* Aaa 4,000 5.50% due 4/01/2020 4,149 Texas--5.2% AAA Aaa 11,190 Austin, Texas, Utility System Revenue Bonds, Combined, 9.25% due 11/15/2008 (a)(e) 12,967 AAA Aaa 6,000 Brazos River Authority, Texas, PCR, Refunding (Texas Utilities Electric Company Project), AMT, 6.50% due 12/01/2027 (b) 6,252 AAA Aaa 12,000 Brazos River Authority, Texas, PCR (Texas Utilities Electric Company Project), AMT, Series B, 6.625% due 6/01/2022 (h) 12,525 AAA Aaa 2,750 Harris County, Texas, Toll Road Revenue Refunding Bonds, Series A, 6.50% due 8/15/2017 (b) 2,887 AAA Aaa 3,500 Houston, Texas, Water Conveyance System Contract, COP, Series J, 6.25% due 12/15/2013 (b) 3,982 AAA Aaa 11,800 Matagorda County, Texas, Navigation District Number 1, Revenue Refunding Bonds (Houston Light and Power Company), Series A, 6.70% due 3/01/2027 (b) 12,298 AAA Aaa 5,300 North Central Texas, Health Facility Development Corporation, Revenue Refunding Bonds (Texas Health Resources System), Series B, 5% due 2/15/2017 (e) 5,134 AAA Aaa 6,000 San Antonio, Texas, Electric and Gas Revenue Bonds, 5.375% due 2/01/2018 (e) 6,100 AAA Aaa 7,430 Southwest Higher Education Authority Incorporated, Revenue Refunding Bonds, Series B, 6.25% due 10/01/2022 (h) 7,731 Utah--1.7% Utah State Building Ownership Authority, Lease Revenue Refunding Bonds (State Facilities Master Lease Program), Series C (i): AAA Aaa 2,995 5.50% due 5/15/2012 3,234 AAA Aaa 3,000 5.50% due 5/15/2013 3,232 AAA NR* 9,535 Utah Transit Authority, Sales Tax and Transportation Revenue Bonds (Salt Lake County Light Rail Transit Project), 5.375% due 12/15/2022 (i) 9,626 Utah Water Finance Agency Revenue Bonds (Pooled Loan Financing Program), Series A (b): NR* Aaa 2,515 5.75% due 10/01/2015 2,699 NR* Aaa 3,770 6% due 10/01/2020 4,094 Virginia--2.4% AAA Aaa 19,755 Fairfax County, Virginia, EDA, Resource Recovery Revenue Refunding Bonds, AMT, Series A, 6.10% due 2/01/2011 (b) 22,182 Virginia State, HDA, Commonwealth Mortgage Revenue Bonds, AMT, Series A, Sub-Series A-4 (e): AAA Aa1 2,285 5.40% due 1/01/2011 2,357 AAA Aaa 2,270 5.50% due 1/01/2012 2,350 AAA Aaa 5,000 6.30% due 7/01/2014 5,168 Washington--5.6% Radford Court Properties, Washington, Student Housing Revenue Bonds (e): AAA Aaa 8,630 5.25% due 6/01/2023 8,636 AAA Aaa 10,540 5% due 6/01/2027 10,130 AAA Aaa 33,535 Seattle, Washington, Municipal Light and Power Revenue Bonds, 6.625% due 7/01/2004 (a)(h) 36,809 AAA Aaa 22,000 Washington State, GO, Series A, 4.50% due 7/01/2023 (i) 19,705 West Virginia AAA Aaa 11,465 Mason County, West Virginia, PCR, Refunding - --1.9% (Appalachian Power Company), 6.85% due 6/01/2022 (e) 12,024 AAA Aaa 12,250 Pleasants County, West Virginia, PCR, Refunding (Potomac-Pleasants), Series C, 6.15% due 5/01/2015 (b) 13,101 Wisconsin--4.3% Milwaukee County, Wisconsin, Airport Revenue Bonds, AMT, Series A (h): NR* Aaa 2,625 6% due 12/01/2012 2,860 NR* Aaa 3,675 6% due 12/01/2013 3,987 NR* Aaa 3,675 6% due 12/01/2014 3,966 NR* Aaa 3,675 6% due 12/01/2015 3,945 AAA Aaa 9,000 Superior, Wisconsin, Limited Obligation Revenue Refunding Bonds (Midwest Energy Resources), Series E, 6.90% due 8/01/2021 (h) 11,065 AAA Aaa 4,650 Wisconsin Public Power Inc., Power Supply System Revenue Bonds, Series A, 5.75% due 7/01/2023 (e) 4,845 Wisconsin State, GO, AMT, Series B (e): AAA Aaa 7,920 6.50% due 5/01/2020 8,441 AAA Aaa 17,130 6.50% due 5/01/2025 18,257 Total Investments (Cost--$1,265,993)--100.6% 1,351,652 Liabilities in Excess of Other Assets--(0.6%) (8,168) ---------- Net Assets--100.0% $1,343,484 ========== (a)Prerefunded. (b)AMBAC Insured. (c)Escrowed to maturity. (d)The interest rate is subject to change periodically and inversely based upon prevailing market rates. The interest rate shown is the rate in effect at December 31, 2000. (e)MBIA Insured. (f)The interest rate is subject to change periodically based upon prevailing market rates. The interest rate shown is the rate in effect at December 31, 2000. (g)BIG Insured. (h)FGIC Insured. (i)FSA Insured. (j)FHA Insured. *Not Rated. ++Highest short-term rating by Moody's Investors Service, Inc. **Represents a zero coupon or step bond; the interest rate shown reflects the effective yield at the time of purchase by the Fund. See Notes to Financial Statements.
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 SCHEDULE OF INVESTMENTS (in Thousands)
Municipal Bonds National Portfolio S&P Moody's Face STATE Ratings Ratings Amount Issue Value Alabama--0.4% AAA Aaa $ 3,820 Alabama Incentives Financing Authority, Special Obligation Revenue Refunding Bonds, Series A, 6% due 10/01/2029 (c) $ 4,134 Alaska--3.4% AAA Aaa 3,000 Alaska State Housing Financial Corporation, General Mortgage Revenue Refunding, Series A, 6% due 6/01/2027 (f) 3,076 Anchorage, Alaska, School, GO, Series B (e): AAA Aaa 1,760 5.875% due 12/01/2016 1,901 AAA Aaa 2,100 5.875% due 12/01/2017 2,263 Valdez, Alaska, Marine Terminal Revenue Refunding Bonds: A1+ VMIG1++ 800 (Exxon Pipeline Company Project), VRDN, Series A, 4.80% due 12/01/2033 (a) 800 AA+ NR* 27,150 (Sohio Pipeline-British Petroleum Oil), 7.125% due 12/01/2025 28,499 Arizona--1.1% AAA Aaa 1,620 Gilbert, Arizona, Water and Sewer Revenue Refunding Bonds, 6.50% due 7/01/2022 (e) 1,743 AAA Aaa 2,330 Phoenix, Arizona, Civic Improvement Corporation, Municipal Facilities, Excise Tax Revenue Bonds, 5.75% due 7/01/2016 (e) 2,515 NR* B1 5,000 Phoenix, Arizona, IDA, Airport Facility Revenue Refunding Bonds (America West Airlines Inc. Project), AMT, 6.30% due 4/01/2023 4,208 NR* Aaa 500 Phoenix, Arizona, IDA, Revenue Bonds (Camelback Crossing), 6.20% due 9/20/2020 (d) 531 AA NR* 1,200 Tucson, Arizona, IDA, Senior Living Facilities Revenue Bonds (Christian Care Tucson Inc. Project), Series A, 6.125% due 7/01/2024 1,276 AAA Aaa 1,000 University of Arizona, COP (University of Arizona Parking and Student Housing), 5.75% due 6/01/2019 (c) 1,060 California--7.1% AAA Aaa 11,740 Alameda County, California, COP (Financing Project), 6% due 9/01/2021 (f) 12,708 AAA Aaa 30,000 California State, GO, Refunding, 4.25% due 10/01/2026 (f) 26,116 NR* NR* 4,000 Long Beach, California, Special Tax Bonds (Community Facilities District No. 3-Pine Ave.), 6.375% due 9/01/2023 4,157 NR* Aa3 20,000 Los Angeles, California, Department of Water and Power, Electric Plant Revenue Refunding Bonds, RIB, Series 370, 7.28% due 2/15/2024 (g) 22,174 AA Aa2 10,000 Metropolitan Water District of Southern California, Waterworks Revenue Bonds, Series A, 5% due 7/01/2026 9,915 Colorado--5.1% Colorado Department of Transit, TRAN (c): AAA Aaa 25,000 6% due 6/15/2014 27,620 AAA Aaa 8,750 6% due 6/15/2015 9,618 Denver, Colorado, City and County Airport Revenue Bonds, AMT: A A2 2,575 Series A, 7.50% due 11/15/2023 2,834 A A2 9,710 Series B, 7.25% due 11/15/2023 10,268 AAA Aaa 3,685 Larimer County, Colorado, Poudre School District Number R-1, GO, 6% due 12/15/2016 (e) 4,044 Connecticut BB+ Ba1 5,000 Connecticut State Development Authority, PCR, - --0.6% Refunding (Connecticut Light and Power Company), Series A, 5.85% due 9/01/2028 4,597 Connecticut State Health and Educational Facilities Authority Revenue Bonds (Yale University), VRDN (a): A1+ VMIG1++ 1,300 Series T-1, 4.50% due 7/01/2029 1,300 A1+ VMIG1++ 500 Series U2, 4.75% due 7/01/2033 500 Florida--4.3% NR* NR* 3,400 Brooks of Bonita Springs II, Florida, Community Development District, Capital Improvement Revenue Bonds, Series B, 6.60% due 5/01/2007 3,426 NR* Aaa 2,725 Duval County, Florida, School Board, COP, 5.75% due 7/01/2017 (h) 2,896 AAA Aaa 6,330 Florida HFA, Revenue Bonds (Antigua Club Apartments), AMT, Series A-1, 7% due 2/01/2035 (c) 6,743 AA+ Aa2 3,500 Florida State Board of Education, Capital Outlay, GO (Public Education), Series B, 5.875% due 6/01/2020 3,659 NR* NR* 2,305 Heritage Isles Community Development District, Florida, BAN, 6.30% due 5/01/2001 2,305 AA- Aa3 7,000 Jacksonville, Florida, Electric Authority, Water and Sewer Revenue Bonds, Series A, 6% due 10/01/2024 7,352 AAA Aaa 4,500 Lee County, Florida, Transportation Facilities Revenue Bonds, 5.75% due 10/01/2022 (f) 4,712 NR* NR* 1,205 Mediterra, Florida, South Community Development District, Capital Improvement Revenue Bonds, Series B, 6.25% due 5/01/2004 1,210 AAA NR* 1,900 Orange County, Florida, HFA, Mortgage Revenue Bonds, AMT, Series A, 8.375% due 3/01/2021 (b)(d) 1,922 AAA Aaa 5,000 Orange County, Florida, Tourist Development, Tax Revenue Bonds, 5.50% due 10/01/2020 (c) 5,175 AAA Aaa 2,000 Saint Lucie, Florida, West Services District, Utility Revenue Refunding Bonds, Senior Lien, 6% due 10/01/2022 (f) 2,205 NR* NR* 4,175 Stoneybrook West, Florida, Community Development District, Special Assessment Revenue Bonds, Series B, 6.45% due 5/01/2010 4,195 Georgia--2.3% AAA Aaa 5,210 College Park, Georgia, Business and IDA, Revenue Bonds (Civic Center Project), 5.75% due 9/01/2026 (c) 5,557 AAA Aaa 3,450 Fulton County, Georgia, Development Authority Revenue Bonds (Morehouse College Project), 5.875% due 12/01/2030 (c) 3,696 AAA Aaa 5,000 Fulton County, Georgia, Water and Sewer Revenue Bonds, 4.75% due 1/01/2028 (e) 4,665 AAA Aaa 10,670 Georgia State, GO, Series D, 5.25% due 10/01/2016 10,998 Illinois--8.8% AAA Aaa 21,235 Chicago, Illinois, Board of Education, GO (Chicago School Reform), 5.75% due 12/01/2020 (c) 22,400 AAA Aaa 1,400 Chicago, Illinois, GO (Neighborhoods Alive 21 Program), 5.875% due 1/01/2019 (e) 1,500 AAA Aaa 2,000 Chicago, Illinois, GO, Series A, 6.125% due 1/01/2015 (e) 2,213 Chicago, Illinois, O'Hare International Airport, Special Facilities Revenue Bonds (United Airlines, Inc.): BB+ Baa2 3,630 AMT, Series B, 8.95% due 5/01/2018 3,782 BB+ Baa2 12,615 Series 84-B, 8.85% due 5/01/2018 13,154 AAA Aaa 3,210 Cicero, Illinois, GO, Refunding (Corporate Purpose), 6% due 12/01/2028 (f) 3,478 NR* Aaa 7,000 Decatur, Illinois, GO, Refunding, 6% due 3/01/2025 (e) 7,434 AA Aa1 50 Illinois HDA, Residential Mortgage Revenue Bonds, RIB, AMT, 8.68% due 2/01/2018 (g) 53 Illinois State, GO, 1st Series (f): AAA Aaa 8,890 5.75% due 12/01/2015 9,550 AAA Aaa 3,745 5.75% due 12/01/2016 4,011 AAA Aaa 4,000 5.75% due 12/01/2017 4,271 AAA Aa2 3,000 Illinois State, Sales Tax Revenue Bonds, 6% due 6/15/2020 3,247 AA+ Aa1 2,000 Lake County, Illinois, Forest Preservation District, GO (Land Acquisition and Development), 5.75% due 12/15/2016 2,142 AAA Aaa 10,700 Regional Transportation Authority, Illinois, GO, Refunding, 5.75% due 6/01/2018 (h) 11,770 NR* A2 4,400 Southwestern Illinois Development Authority, Sewer Facilities Revenue Bonds (Monsanto Company Project), AMT, 7.30% due 7/15/2015 4,759 Indiana--1.2% NR* NR* 2,595 Indiana State Educational Facilities Authority, Revenue Refunding Bonds (Saint Joseph's College Project), 7% due 10/01/2029 2,700 AA NR* 9,100 Indianapolis, Indiana, Local Public Improvement Bond Bank Revenue Refunding Bonds, Series D, 6.75% due 2/01/2020 9,641
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 SCHEDULE OF INVESTMENTS (continued) (in Thousands)
Municipal Bonds National Portfolio S&P Moody's Face STATE Ratings Ratings Amount Issue Value Iowa--1.0% NR* NR* $ 9,000 Iowa Finance Authority, Health Care Facilities Revenue Refunding Bonds (Care Initiatives Project), 9.25% due 7/01/2025 $ 10,774 Kansas--2.3% Wichita, Kansas, Hospital Revenue Refunding Bonds, RIB (f)(g): AAA Aaa 12,000 Series III-A, 7.728% due 10/01/2017 13,125 AAA Aaa 10,000 Series III-B, 7.88% due 10/21/2022 10,925 Kentucky--0.4% NR* A3 4,500 Perry County, Kentucky, Solid Waste Disposal Revenue Bonds (TJ International Project), AMT, 7% due 6/01/2024 4,689 Louisiana--4.6% NR* Baa3 34,000 Lake Charles, Louisiana, Harbor and Terminal District, Port Facilities Revenue Refunding Bonds (Trunkline Long Company Project), 7.75% due 8/15/2022 36,156 BB- NR* 13,000 Port New Orleans, Louisiana, IDR, Refunding (Continental Grain Company Project), 7.50% due 7/01/2013 13,156 Massachusetts-- AA- Aa2 9,000 Massachusetts State, GO, Consolidated Loan, Series A, 1.7% 6% due 2/01/2016 9,867 NR* Ca 11,302 Massachusetts State Health and Educational Facilities Authority Revenue Refunding Bonds (New England Memorial Hospital), Series B, 6.25% due 7/01/2023 (j) 2,261 AAA Aaa 5,430 Route 3 North Transit Improvement Association, Massachusetts, Lease Revenue Bonds, 5.75% due 6/15/2018 (f) 5,784 Michigan--0.8% AAA Aaa 2,675 Michigan Municipal Bond Authority Revenue Bonds (Drinking Water Revolving Fund), 5.875% due 10/01/2016 2,911 AA+ Aa1 5,325 Michigan State Building Authority Revenue Bonds (Facilities Program), Series II, 5% due 10/15/2014 5,393 Minnesota--1.0% AAA Aaa 6,720 Minneapolis, Minnesota, GO, Refunding, Series D, 5% due 12/01/2017 6,763 AA+ Aa1 740 Minnesota State, HFA, S/F Mortgage Revenue Bonds, AMT, Series A, 7.45% due 7/01/2022 (b) 755 AA+ NR* 3,000 Rochester, Minnesota, Health Care Facilities Revenue Bonds, IRS, Series H, 6.85% due 11/15/2015 (g) 3,225 Mississippi NR* Aaa 3,375 Mississippi Home Corporation, S/F Mortgage Revenue - --0.3% Bonds (Access Program), AMT, Series A, 6.90% due 6/01/2024 (d) 3,693 Nebraska--1.1% NR* Aaa 1,600 Nebraska Investment Finance Authority, S/F Mortgage Revenue Bonds, RIB, AMT, Series 2, 10.364% due 9/10/2030 (d)(g) 1,648 AAA Aaa 10,000 Nebraska Public Power District Revenue Refunding Bonds, Series A, 5% due 1/01/2015 (f) 10,065 Nevada--2.4% AAA Aaa 7,500 Clark County, Nevada, Airport Revenue Bonds, Sub-Lien, Series A, 6% due 7/01/2029 (f) 8,120 BBB Baa2 10,000 Henderson, Nevada, Health Care Facility Revenue Bonds (Catholic Healthcare West-Saint Rose Dominican Hospital), 5.375% due 7/01/2026 7,980 Sparks, Nevada, Redevelopment Agency, Tax Allocation Revenue Refunding Bonds, Series A: AA NR* 3,110 6% due 1/15/2015 3,295 AA NR* 6,315 6% due 1/15/2023 6,585 New Jersey% AAA VMIG1++ 300 New Jersey EDA, Natural Gas Facilities Revenue Bonds - --5.6 (New Jersey Natural Gas Co. Project), VRDN, AMT, Series C, 4.60% due 4/01/2033 (a)(c) 300 BB Ba2 5,750 New Jersey EDA, Special Facility Revenue Bonds (Continental Airlines Inc. Project), AMT, 6.25% due 9/15/2019 5,314 NR* Aaa 5,000 New Jersey State Transit Corporation, COP, RIB, Series 245, 7.23% due 9/15/2014(c)(g) 6,080 NR* Aa2 14,690 New Jersey State Transportation Trust Fund Authority, Revenue Refunding Bonds, RIB, Series 204, 7.23% due 6/15/2015 (g) 17,929 AA Aa2 3,000 New Jersey State Transportation Trust Fund Authority, Transportation System Revenue Bonds, Series A, 6% due 6/15/2019 3,278 New Jersey State Turnpike Authority, Turnpike Revenue Refunding Bonds (f): NR* Aaa 5,000 RIB, Series 315, 6.48% due 1/01/2018 (g) 5,673 AAA Aaa 20,000 Series A, 5.75% due 1/01/2018 21,346 New York--19.4% AAA Aaa 15,000 Metropolitan Transportation Authority, New York, Commuter Facilities Revenue Refunding Bonds, Series B, 5% due 7/01/2020 (c) 14,798 AAA NR* 11,000 Metropolitan Transportation Authority, New York, Commuter Facilities, Service Contract Revenue Refunding Bonds, Series 8, 5.50% due 7/01/2021 (h) 11,301 AAA Aaa 5,000 Metropolitan Transportation Authority, New York, Dedicated Tax Fund Revenue Bonds, Series A, 5.25% due 4/01/2023 (h) 5,031 AAA Aaa 10,000 Metropolitan Transportation Authority, New York, Transit Facilities Revenue Bonds, Series A, 5.625% due 7/01/2025 (f) 10,345 NR* Aaa 10,000 New York City, New York, City Municipal Water Finance Authority, Water and Sewer System Revenue Bonds, RIB, Series 158, 6.51% due 6/15/2026 (g) 10,854 AAA Aaa 3,000 New York City, New York, City Transit Authority, Triborough Metropolitan Transportation Authority, COP, 5.75% due 1/01/2020 (c) 3,188 New York City, New York, City Transitional Finance Authority Revenue Bonds, Future Tax Secured: AA Aa2 10,915 Series A, 6% due 8/15/2029 11,807 AA Aa2 12,000 Series B, 6% due 11/15/2024 13,068 AA Aa2 5,000 Series B, 6% due 11/15/2029 5,433 AA Aa2 8,000 New York City, New York, City Transitional Finance Authority, Revenue Refunding Bonds, Future Tax Secured, Series C, 5.875% due 11/01/2017 8,679 New York City, New York, GO: A A2 4,000 Series B, 8.25% due 6/01/2006 4,741 AAA Aaa 10,000 Series B, 5.875% due 8/01/2015 (f) 10,946 A Aaa 5,495 Series F, 8.25% due 11/15/2001 (i) 5,776 New York City, New York, GO, Refunding,: A A2 6,600 Series A, 6% due 5/15/2021 7,125 A A2 10,000 Series A, 6.25% due 5/15/2026 10,965 A A2 10,000 Series B, 7.75% due 2/01/2002 (i) 10,539 A Aaa 4,500 Series B, 7.75% due 2/01/2002 (i) 4,742 AAA Aaa 4,000 Series C, 5.875% due 2/01/2016 (e) 4,261 AAA Aaa 15,000 Series G, 5.75% due 2/01/2014 (f) 15,882 A A2 1,000 Series H, 6% due 8/01/2017 1,067 AA Aa2 12,130 New York City, New York, Transitional Finance Authority, Revenue Refunding Bonds, Future Tax Secured, Series C, 5.875% due 11/01/2015 13,246 AA- A3 5,000 New York State Dormitory Authority Revenue Refunding Bonds (State University Educational Facilities), Series A, 7.50% due 5/15/2013 6,265 AAA Aaa 3,400 New York State Environmental Facilities Corporation, State Clean Water and Drinking, Revolving Funds Revenue Bonds (Pooled Loan Program), Series B, 5.875% due 1/15/2019 3,666 NR* Aa1 5,000 New York State Mortgage Agency, Homeowner Mortgage Revenue Refunding Bonds, Series 95, 5.50% due 10/01/2017 5,087 AA- Aa3 5,025 New York State Thruway Authority, General Revenue Bonds, Series D, 5.50% due 1/01/2017 5,209 AAA Aaa 2,700 New York State Thruway Authority, Highway and Bridge Trust Fund Revenue Bonds, Series A, 5.875% due 4/01/2019 (h) 2,913 North Carolina BBB Baa3 4,000 North Carolina Eastern Municipal Power Agency, - --0.4% Power System Revenue Bonds, Series D, 6.75% due 1/01/2026 4,257 A1 VMIG1++ 100 North Carolina Medical Care Commission, Hospital Revenue Bonds (Pooled Equipment Financing Project), ACES, 4.65% due 12/01/2025 (a)(f) 100
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
Municipal Bonds National Portfolio S&P Moody's Face STATE Ratings Ratings Amount Issue Value Ohio--1.6% AAA Aaa $ 4,800 Ohio HFA, S/F Mortgage Revenue Bonds, AMT, RIB, Series B, 8.604% due 3/31/2031 (d)(g) $ 5,052 AAA Aaa 8,000 Ohio State Air Quality Development Authority, Revenue Refunding Bonds (Dayton Power & Light Company), Series B, 6.40% due 8/15/2027 (f) 8,332 AAA Aaa 3,005 Toledo-Lucas County, Ohio, Lodging Tax Revenue Refunding Bonds (Convention Center Project), 5.70% due 10/01/2015 (f) 3,180 Oregon--0.7% AAA Aaa 2,485 Jackson County, Oregon, Central Point School District Number 006, GO, 5.75% due 6/15/2017 (e) 2,655 NR* Aaa 3,190 Portland, Oregon, Urban Renewal and Redevelopment Revenue Bonds (South Park Blocks), Series A, 5.75% due 6/15/2018 (c) 3,423 NR* Aaa 1,000 Portland, Oregon, Urban Renewal and Redevelopment Revenue Refunding Bonds (Downtown Waterfront), Series A, 5.75% due 6/15/2018 (c) 1,071 Pennsylvania AAA Aaa 7,000 Allegheny County, Pennsylvania, Port Authority, Special - --3.0% Transportation Revenue Bonds, 6.125% due 3/01/2029 (f) 7,604 Allegheny County, Pennsylvania, Sanitation Authority, Sewer Revenue Bonds (f): AAA Aaa 2,220 5.75% due 12/01/2017 2,391 AAA Aaa 10,000 5.375% due 12/01/2024 10,138 AA+ Aa2 8,800 Pennsylvania HFA Revenue Refunding Bonds, RIB, AMT, 8.798% due 10/01/2023 (g) 9,328 AAA NR* 2,000 Pennsylvania State Higher Educational Facilities Authority, College and University Revenue Bonds (Eastern College), Series B, 8% due 10/15/2006 (i) 2,416 Puerto Rico AAA Aaa 4,300 Puerto Rico Commonwealth, GO, Refunding, RITR, - --0.5% Class R, Series 3, 6.759% due 7/01/2016 (f)(g) 5,005 Rhode Island AA+ Aa2 16,150 Rhode Island Housing and Mortgage Finance Corporation, - --2.3% Homeownership Revenue Bonds, AMT, Series 23, 5.95% due 4/01/2029 16,605 AAA Aaa 6,815 Rhode Island State Economic Development Corporation, Airport Revenue Bonds, Series B, 6% due 7/01/2028 (e) 7,358 South Dakota Pierre, South Dakota, School District Number 32-2, GO (h): - --0.5% NR* Aaa 1,000 5.70% due 8/01/2017 1,063 NR* Aaa 3,750 5.75% due 8/01/2020 3,985 Tennessee--1.6% Chattanooga, Tennessee, Industrial Development Board, Lease Rent Revenue Bonds (Southside Redevelopment Corporation) (c): AAA Aaa 4,485 5.75% due 10/01/2017 4,792 AAA Aaa 3,740 5.75% due 10/01/2018 3,990 AA Aa2 5,000 Metropolitan Government of Nashville and Davidson County, Tennessee, GO, 5.875% due 5/15/2026 5,240 NR* Aaa 2,500 Robertson and Sumner Counties, Tennessee, White House Utility District, Water Revenue Bonds, 6% due 1/01/2026 (h) 2,695 Texas--5.6% AAA Aaa 5,300 Austin, Texas, Revenue Bonds (Town Lake Community Events Center Venue), 6.20% due 11/15/2029 (e) 5,767 A1+ VMIG1++ 1,300 Brazos River Authority, Texas, PCR, Refunding (Texas Utilities Electric Company), VRDN, AMT, Series A, 5.05% due 3/01/2026 (a)(c) 1,300 BBB+ A3 18,150 Brazos River Authority, Texas, PCR (Texas Utilities Electric Company Project), AMT, Series A, 7.875% due 3/01/2021 18,575 BBB+ Baa1 7,250 Gulf Coast Waste Disposal Authority, Texas, Revenue Bonds (Champion International Corporation), AMT, 7.45% due 5/01/2026 7,489 A1+ NR* 200 Harris County, Texas, Health Facilities Development Corporation, Hospital Revenue Refunding Bonds (Methodist Hospital), VRDN, 4.80% due 12/01/2026 (a) 200 AAA Aaa 5,000 Harris County, Texas, Houston Sports Authority, Special Revenue Bonds, Senior Lien, Series A, 5% due 11/15/2028 (f) 4,811 AAA Aaa 2,860 Jefferson County, Texas, GO, Certificates of Obligation, 6% due 8/01/2019 (h) 3,110 Texas State Public Finance Authority, Building Revenue Bonds (h): AAA Aaa 2,100 (General Services Commission Project), Series A, 6% due 2/01/2020 2,271 AAA Aaa 1,000 (State Preservation Project), Series B, 6% due 8/01/2015 1,085 AAA Aaa 10,000 Texas Water Development Board Revenue Bonds (State Revolving Fund), Senior Lien, Series B, 5.25% due 7/15/2017 10,118 AAA Aaa 4,930 Upper Trinity Regional Water District, Texas, Water Revenue Bonds (Regional Treated Water Supply System), Series A, 6% due 8/01/2020 (e) 5,349 Utah--1.9% NR* NR* 2,000 Tooele County, Utah, PCR, Refunding (Laidlaw Environmental), AMT, Series A, 7.55% due 7/01/2027 (j) 58 AAA NR* 5,390 Utah Transit Authority, Sales Tax and Transportation Revenue Bonds (Salt Lake County Light Rail Transit Project), 5.40% due 12/15/2016 (h) 5,546 AAA Aaa 13,250 Weber County, Utah, Municipal Building Authority, Lease Revenue Bonds, 7.50% due 12/15/2004 (i) 15,076 Virginia--0.1% NR* NR* 5,000 Peninsula Ports Authority, Virginia, Revenue Refunding Bonds (Port Facility-Zeigler Coal), 6.90% due 5/02/2022 (j) 738 Washington--0.9% AAA Aaa 2,065 Kitsap County, Washington, GO, 5.875% due 7/01/2020 (c) 2,207 AAA Aaa 2,500 Port Seattle, Washington, Special Facilities Revenue Bonds, Series A, 6% due 9/01/2029 (f) 2,697 AAA Aaa 3,010 Seattle, Washington, Drain and Wastewater Utility Revenue Bonds, 5.75% due 11/01/2022 (f) 3,184 AAA Aaa 1,625 University of Washington, University Revenue Bonds (Student Facilities Fee), 5.875% due 6/01/2017 (h) 1,748 West Virginia NR* A3 4,000 Upshur County, West Virginia, Solid Waste - --0.4% Disposal Revenue Bonds (TJ International Project), AMT, 7% due 7/15/2025 4,196 Wisconsin--3.5% NR* Aaa 2,050 Waterford, Wisconsin, Graded Joint School District Number 1, GO, Refunding, 5.75% due 4/01/2018 (e) 2,178 Wisconsin Housing and EDA, Home Ownership Revenue Refunding Bonds: NR* Aa2 21,150 RITR, AMT, Series 18, 6.512% due 9/01/2028 (g) 22,254 AA Aaa 1,825 Series A, 7.10% due 3/01/2023 1,885 AAA Aaa 10,000 Wisconsin State, GO, AMT, Series B, 6.20% due 11/01/2026 (f) 10,493 Wyoming--0.8% AAA Aaa 8,400 Sweetwater County, Wyoming, PCR, Refunding (Idaho Power Company Project), Series A, 6.05% due 7/15/2026 (f) 8,938 Total Investments (Cost--$1,009,450)--98.7% 1,050,655 Other Assets Less Liabilities--1.3% 14,303 ---------- Net Assets--100.0% $1,064,958 ========== (a)The interest rate is subject to change periodically based upon prevailing market rates. The interest rate shown is the rate in effect at December 31, 2000. (b)FHA Insured. (c)AMBAC Insured. (d)GNMA Collateralized. (e)FGIC Insured. (f)MBIA Insured. (g)The interest rate is subject to change periodically and inversely based upon prevailing market rates. The interest rate shown is the rate in effect at December 31, 2000. (h)FSA Insured. (i)Prerefunded. (j)Non-income producing security. *Not Rated. ++Highest short-term rating by Moody's Investors Service, Inc. See Notes to Financial Statements.
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 SCHEDULE OF INVESTMENTS (in Thousands)
Municipal Bonds Limited Maturity Portfolio S&P Moody's Face STATE Ratings Ratings Amount Issue Value Alabama--2.9% AA Aa3 $ 7,675 Alabama State Public School and College Authority, Capital Improvement Revenue Bonds, Series D, 5% due 8/01/2003 $ 7,833 Alaska--0.3% A1+ VMIG1++ 900 Valdez, Alaska, Marine Terminal Revenue Refunding Bonds (Exxon Pipeline Company Project), VRDN, Series B, 4.80% due 12/01/2033 (b) 900 Arizona--3.6% AA- A1 200 Central Arizona Water Conservation District, Contract Revenue Bonds, Series B, 6.50% due 5/01/2001 (a) 206 AAA NR* 4,720 Phoenix, Arizona, Civic Improvement Corporation, Wastewater System, Lease Revenue Bonds, 6.125% due 7/01/2003 (a) 5,031 AAA Aaa 4,285 Pima County, Arizona, Unified School District Number 6, Marana, GO, Series A, 5.75% due 7/01/2003 (a)(f) 4,490 California--3.4% SP1+ MIG1++ 5,000 Sacramento County, California, TRAN, 5% due 10/04/2001 5,049 SP1+ MIG1++ 4,000 San Diego, California, Unified School District, TRAN, Series A, 5.25% due 10/04/2001 4,046 Connecticut Connecticut State Resource Recovery Authority, - --2.4% Resource Recovery Revenue Refunding Bonds (Bridgeport Resco Company LP Project): A+ A2 2,500 5.25% due 1/01/2002 2,523 A+ A2 4,000 5% due 1/01/2003 4,039 Delaware--2.1% AAA Aaa 5,500 Delaware State, GO, Series A, 5% due 4/01/2002 5,566 Georgia--1.3% AA- Aa2 3,500 Cherokee County, Georgia, GO, 4.25% due 8/01/2003 3,511 Hawaii--2.6% AAA Aaa 3,200 Hawaii State, GO, Refunding, Series CO, 6% due 3/01/2001 (f) 3,211 AAA Aaa 3,585 Hawaii State, GO, Series CT, 5.25% due 9/01/2003 (e) 3,682 Illinois--18.0% Chicago, Illinois, Public Building Commission, Building Revenue Bonds, Series C (f): AAA Aaa 5,000 5.125% due 2/01/2003 5,092 AAA Aaa 5,000 5.125% due 2/01/2004 5,128 AAA NR* 5,000 Chicago, Illinois, Skyway Toll Bridge Revenue Refunding Bonds, 6.75% due 1/01/2004 (a) 5,452 AAA Aaa 12,000 Cook County, Illinois, GO, Series A, 6.60% due 11/15/2002 (a)(d) 12,754 BBB Ba1 4,625 Illinois Development Finance Authority, Solid Waste Disposal Revenue Bonds (Waste Management Inc. Project), AMT, 7.125% due 1/01/2001 4,626 Illinois State, GO: AA Aa2 3,500 4% due 3/01/2002 3,495 AA Aa2 7,100 4% due 3/01/2003 7,055 AAA Aaa 5,000 Illinois Student Assistance Commission, Student Loan Revenue Refunding Bonds, Senior Series WW, 4.50% due 9/01/2002 5,025 Indiana--1.1% AAA Aaa 3,000 Indianapolis, Indiana, Airport Authority Revenue Refunding Bonds, AMT, Series A, 4.50% due 7/01/2001 (f) 3,004 Kansas--4.0% A2 BBB+ 3,500 Burlington, Kansas, Environmental Improvement Revenue Refunding Bonds (Kansas City Power and Light Company Project), Series D, 4.35% due 9/01/2001 3,488 Kansas State Development Finance Authority Revenue Bonds, Board of Regents (Rehabilitation Center), Series G-2 (c): AAA Aaa 4,000 5% due 10/01/2001 4,030 AAA Aaa 3,250 5.50% due 10/01/2002 3,329 Kentucky--4.0% AAA Aaa 5,000 Carrollton and Henderson, Kentucky, Public Energy Authority, Gas Revenue Bonds (Kentucky Trust), Series A, 4.50% due 1/01/2002 (e) 4,951 Kentucky Asset/Liability Commission, General Fund Revenue Bonds, Project Notes, First Series: AA- Aa3 2,900 4% due 3/01/2001 2,899 AA- Aa3 3,000 4% due 3/01/2002 2,992 Louisiana--0.1% NR* VMIG1++ 300 Louisiana State Offshore Terminal Authority, Deepwater Port Revenue Refunding Bonds (First Stage A- Loop Inc.), ACES, 4.75% due 9/01/2006 (b) 300 Maryland--0.7% NR* Aa2 2,000 Maryland State Community Development Administration, Department of Housing and Community Development Revenue Refunding Bonds, S/F Program, First Series, 4.45% due 4/01/2001 (g) 2,001 Massachusetts AAA Aaa 160 Massachusetts Education Loan Authority, Education Loan - --4.5% Revenue Refunding Bonds, AMT, Issue E, Series B, 5.50% due 7/01/2001 (c) 161 AAA Aaa 3,500 Massachusetts State Health and Educational Facilities Authority Revenue Bonds (Newton-Wellesley Hospital), Series D, 6.90% due 7/01/2001 (a)(d) 3,619 BBB NR* 2,925 Massachusetts State Industrial Finance Agency, Resource Recovery Revenue Refunding Bonds (Ogden Haverhill Associates), Series A, 4.50% due 12/01/2001 2,916 AA Aa2 300 Massachusetts State Special Obligation Revenue Bonds, Series A, 5.90% due 6/01/2001 (c) 302 AA- Aa2 750 Massachusetts State, GO, Refunding, Series B, 6.25% due 8/01/2001 760 NR* Aaa 4,385 New England Education Loan Marketing Corporation, Massachusetts, Student Loan Revenue Refunding Bonds, Issue A, 5.80% due 3/01/2002 4,466 Michigan--2.9% AAA Aaa 105 Chelsea, Michigan, School District, GO, 6.75% due 5/01/2002 (f) 109 AAA Aaa 250 Dearborn, Michigan, Economic Development Corporation, Hospital Revenue Bonds (Oakwood Obligated Group), Series A, 6.95% due 8/15/2001 (a)(d) 259 AAA Aaa 200 Detroit, Michigan, GO, Refunding, Distributable State Aid, 5.70% due 5/01/2001 (c) 201 A- Baa1 6,585 Detroit, Michigan, GO, Refunding, Series B, 6.25% due 4/01/2001 6,616 AAA Aa1 450 Michigan Municipal Bond Authority, Revenue Refunding Bonds (Local Government-Qualified School), Series A, 6% due 5/01/2001 453 NR* Aaa 100 Michigan State Hospital Finance Authority Revenue Bonds (McLaren Obligated Group), Series A, 7.50% due 9/15/2001 (a) 104 Minnesota--0.8% AAA Aaa 2,025 Metropolitan Council, Minnesota, Minneapolis-Saint Paul Metropolitan Area Transit, GO, Series A, 5% due 2/01/2003 2,062
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
Municipal Bonds Limited Maturity Portfolio S&P Moody's Face STATE Ratings Ratings Amount Issue Value Nebraska--4.3% AAA Aaa $ 2,575 American Public Energy Agency, Nebraska, Gas Supply Revenue Bonds (Nebraska Public Gas Agency Project), Series A, 4.50% due 6/01/2002 (c) $ 2,538 AAA Aaa 8,750 Nebraska Public Power District Revenue Refunding Bonds, Series A, 5.25% due 1/01/2004 (d) 9,009 New Hampshire NR* NR* 7,500 New Hampshire State Business Finance Authority, - --2.8% PCR, Refunding (UTD Illuminating), AMT, Series A, 4.35% due 2/01/2002 7,434 New Jersey--1.9% AA+ Aa1 4,900 New Jersey State, GO, Refunding, Series D, 5.40% due 2/15/2003 5,030 AAA Aaa 125 Somerset County, New Jersey, GO, 5.875% due 12/01/2001 127 New Mexico--1.2% AA Aa3 2,000 Albuquerque, New Mexico, Joint Water and Sewer System Revenue Refunding Bonds, Series A, 4.40% due 7/01/2003 2,012 A1+ P1 1,100 Farmington, New Mexico, PCR, Refunding (Arizona Public Service Company), VRDN, Series A, 4.75% due 5/01/2024 (b) 1,100 New York--8.9% A- Baa1 4,000 Long Island Power Authority, New York, Electric System Revenue Refunding Bonds, Series A, 5.25% due 12/01/2002 4,077 A A2 3,200 New York City, New York, GO, Refunding, Series G, 4.30% due 8/01/2002 3,210 A Aaa 4,615 New York City, New York, GO, Series C, Sub-Series C-1, 7.50% due 8/01/2002 (a) 4,925 New York State Local Government Assistance Corporation Revenue Bonds (a): AA- Aaa 625 Series A, 7% due 4/01/2001 642 AAA Aaa 600 Series D, 7% due 4/01/2002 633 NR* Aaa 725 New York State Medical Care Facilities Finance Agency Revenue Bonds, 7.75% due 2/15/2001 (a) 743 New York State Urban Development Corporation Revenue Bonds: AA- Aaa 5,000 7.50% due 4/01/2001 (a) 5,143 AA- Baa1 4,525 (Correctional Capital Facilities), Series 4, 4.90% due 1/01/2001 4,525 Ohio--6.5% AAA Aaa 2,500 Cincinnati, Ohio, City School District, GO, TAN, 5.50% due 12/01/2003 (c) 2,578 SP1+ NR* 4,650 Cleveland, Ohio, State University, General Reciept Revenue Notes, BAN, Series B, 3.85% due 1/16/2001 4,649 AAA Aaa 6,990 Columbus, Ohio, GO, Series 2, 5% due 6/15/2002 7,084 AAA Aaa 3,135 Kent State University, Ohio, University Revenue Bonds, Series B, 4.15% due 5/01/2001 (c) 3,132 Oregon--1.8% AA+ Aa2 4,815 Tri-County, Oregon, Metropolitan Transportation District, GO, Refunding (Light Rail Extension), Series A, 4% due 7/01/2003 4,790 Pennsylvania NR* MIG1++ 4,000 North Wales, Pennsylvania, Water Authority Revenue - --1.5% Bonds (Rural Water Projects), 5.125% due 9/01/2001 4,021 South Carolina AA+ Aa1 5,855 Charleston County, South Carolina, School District, - --3.5% GO, Refunding, 4% due 2/01/2003 5,836 AAA Aaa 3,435 South Carolina State Public Service Authority Revenue Refunding Bonds, Series B, 7% due 7/01/2001 (a) 3,554 Tennessee--2.0% AA+ Aa1 5,605 Tennessee State, GO, Refunding, Series B, 5.50% due 5/01/2004 5,845 Texas--4.7% AA Aa2 6,075 Fort Worth, Texas, Water and Sewer Revenue Refunding and Improvement Bonds, 5.50% due 2/15/2004 6,303 AAA Aaa 2,445 Garland, Texas, Independent School District, GO, Series A, 6% due 2/15/2002 (a) 2,497 AA Aa1 3,600 Texas State University System Revenue Bonds (Constitutional Appropriation), 4.75% due 8/15/2001 3,617 A1+ VMIG1++ 300 Texas State Water Development Board, VRDN, Series A, 4.85% due 3/01/2015 (b) 300 Virginia--1.2% AA A1 3,330 Richmond, Virginia, GO, Equipment Notes, 4.25% due 5/15/2002 3,339 Washington--1.6% AA+ Aa1 1,900 Seattle, Washington, GO, Refunding, 4.50% due 7/01/2001 1,905 AA- Aa1 2,275 Washington State Public Power Supply System, Revenue Refunding Bonds (Nuclear Project Number 3), Series A, 5% due 7/01/2003 2,312 Total Investments (Cost--$259,456)--96.6% 260,646 Other Assets Less Liabilities--3.4% 9,255 ---------- Net Assets--100.0% $ 269,901 ========== (a)Prerefunded. (b)The interest rate is subject to change periodically based upon prevailing market rates. The interest rate shown is the rate in effect at December 31, 2000. (c)AMBAC Insured. (d)MBIA Insured. (e)FSA Insured. (f)FGIC Insured. (g)FHA Insured. *Not Rated. ++Highest short-term rating by Moody's Investors Service, Inc. See Notes to Financial Statements.
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 STATEMENTS OF ASSETS AND LIABILITIES
Limited Insured National Maturity As of December 31, 2000 Portfolio Portfolio Portfolio Assets: Investments, at value* $1,351,651,533 $1,050,654,828 $ 260,646,208 Cash 264,866 47,323 85,050 Receivables: Securities sold 225,000 8,458,337 5,110,000 Interest 20,932,011 16,844,270 4,761,747 Capital shares sold 1,008,444 1,041,662 196,393 Prepaid registration fees and other assets 787,842 107,261 61,249 -------------- -------------- -------------- Total assets 1,374,869,696 1,077,153,681 270,860,647 -------------- -------------- -------------- Liabilities: Payables: Dividends to shareholders 4,340,693 3,314,032 515,692 Securities purchased 22,246,232 5,553,748 -- Distributor 199,629 200,804 12,790 Capital shares redeemed 3,846,176 2,466,877 296,290 Investment adviser 389,890 401,887 72,446 Accrued expenses and other liabilities 362,880 258,596 62,715 -------------- -------------- -------------- Total liabilities 31,385,500 12,195,944 959,933 -------------- -------------- -------------- Net Assets: Net assets $1,343,484,196 $1,064,957,737 $ 269,900,714 ============== ============== ==============] Net Assets Class A Common Stock, $.10 par value++ $ 12,406,036 $ 6,798,150 $ 2,014,987 Consist of: Class B Common Stock, $.10 par value++++ 3,244,241 2,378,131 301,838 Class C Common Stock, $.10 par value++++++ 161,667 284,379 4,578 Class D Common Stock, $.10 par value++++++++ 1,627,813 1,067,821 390,667 Paid-in capital in excess of par 1,305,739,337 1,070,398,829 268,386,111 Accumulated realized capital losses on investments--net (43,331,973) (56,577,954) (2,083,488) Accumulated distributions in excess of realized capital gains on investments--net (22,021,059) (596,027) (304,677) Unrealized appreciation on investments--net 85,658,134 41,204,408 1,190,698 -------------- -------------- -------------- Net assets $1,343,484,196 $1,064,957,737 $ 269,900,714 ============== ============== ============== Net Asset Class A: Value: Net assets $ 955,853,355 $ 687,663,889 $ 200,508,210 ============== ============== ============== Shares outstanding 124,060,355 67,981,499 20,149,873 ============== ============== ============== Net asset value and redemption price per share $ 7.70 $ 10.12 $ 9.95 ============== ============== ============== Class B: Net assets $ 249,789,354 $ 240,474,809 $ 30,040,946 ============== ============== ============== Net asset value and redemption price per share $ 7.70 $ 10.11 $ 9.95 ============== ============== ============== Class C: Net assets $ 12,450,276 $ 28,771,466 $ 453,885 ============== ============== ============== Shares outstanding 1,616,672 2,843,790 45,782 ============== ============== ============== Net asset value and redemption price per share $ 7.70 $ 10.12 $ 9.91 ============== ============== ============== Class D: Net assets $ 125,391,211 $ 108,047,573 $ 38,897,673 ============== ============== ============== Shares outstanding 16,278,133 10,678,206 3,906,666 ============== ============== ============== Net asset value and redemption price per share $ 7.70 $ 10.12 $ 9.96 ============== ============== ============== *Identified cost $1,265,993,399 $1,009,450,420 $ 259,455,510 ============== ============== ============== ++Authorized shares--Class A 500,000,000 375,000,000 150,000,000 ============== ============== ============== ++++Authorized shares--Class B 375,000,000 375,000,000 150,000,000 ============== ============== ============== ++++++Authorized shares--Class C 375,000,000 375,000,000 150,000,000 ============== ============== ============== ++++++++Authorized shares--Class D 500,000,000 375,000,000 150,000,000 ============== ============== ============== See Notes to Financial Statements.
STATEMENTS OF OPERATIONS
Limited Insured National Maturity For the Six Months Ended December 31, 2000 Portfolio Portfolio Portfolio Investment Interest and amortization of premium and Income: discount earned $ 37,766,615 $ 32,253,409 $ 6,120,043 -------------- -------------- -------------- Expenses: Investment advisory fees 2,467,507 2,528,021 473,347 Account maintenance and distribution fees--Class B 978,269 924,153 55,213 Transfer agent fees--Class A 143,648 131,425 24,783 Account maintenance fees--Class D 139,769 121,368 19,864 Accounting services 92,764 76,889 25,995 Account maintenance and distribution fees--Class C 50,272 117,480 580 Transfer agent fees--Class B 50,016 58,496 4,985 Custodian fees 52,620 46,101 14,339 Printing and shareholder reports 39,657 34,545 19,127 Professional fees 25,412 30,323 7,078 Registration fees 16,001 24,078 15,264 Transfer agent fees--Class D 16,865 18,675 4,688 Pricing services 14,018 12,565 6,192 Directors' fees and expenses 5,078 4,043 1,420 Transfer agent fees--Class C 2,404 6,814 65 Other 17,788 27,921 3,365 -------------- -------------- -------------- Total expenses 4,112,088 4,162,897 676,305 -------------- -------------- -------------- Investment income--net 33,654,527 28,090,512 5,443,738 -------------- -------------- -------------- Realized & Realized gain (loss) on investments--net 13,456,373 15,649,685 (135,066) Unrealized Gain Change in unrealized appreciation/depreciation (Loss) on on investments--net 47,409,677 28,170,533 2,825,164 Investments--Net: -------------- -------------- -------------- Net Increase in Net Assets Resulting from Operations $ 94,520,577 $ 71,910,730 $ 8,133,836 ============== ============== ============== See Notes to Financial Statements.
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 STATEMENTS OF CHANGES IN NET ASSETS
Insured Portfolio National Portfolio For the Six For the For the Six For the Months Ended Year Ended Months Ended Year Ended Increase (Decrease) in Net Assets: Dec. 31, 2000 June 30, 2000 Dec. 31, 2000 June 30, 2000 Operations: Investment income--net $ 33,654,527 $ 77,843,650 $ 28,090,512 $ 65,780,760 Realized gain (loss) on investments--net 13,456,373 (78,541,901) 15,649,685 (62,192,724) Change in unrealized appreciation/depreciation on investments--net 47,409,677 7,805,843 28,170,533 (8,162,695) -------------- -------------- -------------- -------------- Net increase (decrease) in net assets resulting from operations 94,520,577 7,107,592 71,910,730 (4,574,659) -------------- -------------- -------------- -------------- Dividends & Investment income--net: Distributions to Class A (24,873,273) (57,133,564) (18,963,070) (43,599,153) Shareholders: Class B (5,757,182) (15,325,442) (5,875,506) (15,259,347) Class C (274,165) (646,631) (693,172) (1,906,874) Class D (2,749,907) (4,738,013) (2,558,764) (5,015,386) In excess of realized gain on investments--net: Class A -- (15,607,942) -- -- Class B -- (4,878,687) -- -- Class C -- (207,962) -- -- Class D -- (1,326,468) -- -- -------------- -------------- -------------- -------------- Net decrease in net assets resulting from dividends and distributions to shareholders. (33,654,527) (99,864,709) (28,090,512) (65,780,760) -------------- -------------- -------------- -------------- Capital Share Net decrease in net assets Transactions: derived from capital share transactions (78,138,250) (275,055,198) (33,279,910) (268,812,275) -------------- -------------- -------------- -------------- Net Assets: Total increase (decrease) in net assets (17,272,200) (367,812,315) 10,540,308 (339,167,694) Beginning of period 1,360,756,396 1,728,568,711 1,054,417,429 1,393,585,123 -------------- -------------- -------------- -------------- End of period $1,343,484,196 $1,360,756,396 $1,064,957,737 $1,054,417,429 ============== ============== ============== ============== See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
Limited Maturity Portfolio For the Six For the Months Ended Year Ended Increase (Decrease) in Net Assets: Dec. 31, 2000 June 30, 2000 Operations: Investment income--net $ 5,443,738 $ 12,919,927 Realized gain (loss) on investments--net (135,066) (385,160) Change in unrealized appreciation/depreciation on investments--net 2,825,164 (1,879,787) -------------- -------------- Net increase (decrease) in net assets resulting from operations 8,133,836 10,654,980 -------------- -------------- Dividends & Investment income--net: Distributions to Class A (4,116,814) (9,083,280) Shareholders: Class B (562,032) (1,394,083) Class C (5,883) (17,620) Class D (759,009) (2,424,944) In excess of realized gain on investments--net: Class A -- -- Class B -- -- Class C -- -- Class D -- -- -------------- -------------- Net decrease in net assets resulting from dividends and distributions to shareholders. (5,443,738) (12,919,927) -------------- -------------- Capital Share Net decrease in net assets Transactions: derived from capital share transactions (20,350,567) (98,688,194) -------------- ------------- Net Assets: Total increase (decrease) in net assets (17,660,469) (100,953,141) Beginning of period 287,561,183 388,514,324 -------------- -------------- End of period $ 269,900,714 $ 287,561,183 ============== ============== See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
Insured Portfolio The following per share data and ratios Class A have been derived from information For the Six provided in the financial statements. Months Ended For the Year Ended June 30, Increase (Decrease) in Net Asset Value: Dec. 31, 2000 2000 1999 1998 1997 Per Share Net asset value, Operating beginning of period $ 7.36 $ 7.79 $ 8.25 $ 8.06 $ 7.91 Performance: ------------- ------------- ------------- ------------- ------------- Investment income--net .19 .40 .41 .43 .45 Realized and unrealized gain (loss) on investments--net .34 (.32) (.27) .20 .15 ------------- ------------- ------------- ------------- ------------- Total from investment operations .53 .08 .14 .63 .60 ------------- ------------- ------------- ------------- ------------- Less dividends and distributions: Investment income--net (.19) (.40) (.41) (.43) (.45) Realized gain on investments--net -- -- (.19) (.01) -- In excess of realized gain on investments--net-- (.11) -- -- -- ------------- ------------- ------------- ------------- ------------- Total dividends and distributions (.19) (.51) (.60) (.44) (.45) ------------- ------------- ------------- ------------- ------------- Net asset value, end of period $ 7.70 $ 7.36 $ 7.79 $ 8.25 $ 8.06 ============= ============= ============= ============= ============= Total Investment Based on net asset Return:** value per share 7.35%+++ 1.21% 1.56% 8.05% 7.72% ============= ============= ============= ============= ============= Ratios to Average Expenses .44%* .43% .42% .42% .44% Net Assets: ============= ============= ============= ============= ============= Investment income--net 5.17%* 5.33% 5.02% 5.29% 5.58% ============= ============= ============= ============= ============= Supplemental Net assets, Data: end of period (in thousands) $ 955,854 $ 972,420 $ 1,216,346 $ 1,377,025 $ 1,441,785 ============= ============= ============= ============= ============= Portfolio turnover 36.51% 94.08% 86.35% 102.89% 74.40% ============= ============= ============= ============= ============= Insured Portfolio The following per share data and ratios Class B have been derived from information For the Six provided in the financial statements. Months Ended For the Year Ended June 30, Increase (Decrease) in Net Asset Value: Dec. 31, 2000 2000 1999 1998 1997 Per Share Net asset value, Operating beginning of period $ 7.36 $ 7.78 $ 8.24 $ 8.05 $ 7.91 Performance: ------------- ------------- ------------- ------------- ------------- Investment income--net .17 .34 .35 .37 .39 Realized and unrealized gain(loss) on investments--net .34 (.31) (.27) .20 .14 ------------- ------------- ------------- ------------- ------------- Total from investment operations .51 .03 .08 .57 .53 ------------- ------------- ------------- ------------- ------------- Less dividends and distributions: Investment income--net (.17) (.34) (.35) (.37) (.39) Realized gain on investments--net -- -- (.19) (.01) -- In excess of realized gain on investments--net -- (.11) -- -- -- ------------- ------------- ------------- ------------- ------------- Total dividends and distributions (.17) (.45) (.54) (.38) (.39) ------------- ------------- ------------- ------------- ------------- Net asset value, end of period $ 7.70 $ 7.36 $ 7.78 $ 8.24 $ 8.05 ============= ============= ============= ============= ============= Total Investment Based on net asset Return:** value per share 6.95%+++ .57% .79% 7.24% 6.78% ============= ============= ============= ============= ============= Ratios to Average Expenses 1.19%* 1.19% 1.18% 1.18% 1.19% Net Assets: ============= ============= ============= ============= ============= Investment income--net 4.41%* 4.56% 4.26% 4.53% 4.82% ============= ============= ============= ============= ============= Supplemental Net assets, Data: end of period (in thousands) $ 249,789 $ 276,154 $ 414,135 $ 498,624 $ 560,105 ============= ============= ============= ============= ============= Portfolio turnover 36.51% 94.08% 86.35% 102.89% 74.40% ============= ============= ============= ============= ============= *Annualized. **Total investment returns exclude the effects of sales charges. +++Aggregate total investment return. See Notes to Financial Statements.
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 FINANCIAL HIGHLIGHTS (continued)
Insured Portfolio The following per share data and ratios Class C have been derived from information For the Six provided in the financial statements. Months Ended For the Year Ended June 30, Increase (Decrease) in Net Asset Value: Dec. 31, 2000 2000 1999 1998 1997 Per Share Net asset value, Operating beginning of period $ 7.36 $ 7.78 $ 8.24 $ 8.06 $ 7.91 Performance: ------------- ------------- ------------- ------------- ------------- Investment income--net .16 .34 .34 .37 .38 Realized and unrealized gain (loss) on investments--net .34 (.31) (.27) .19 .15 ------------- ------------- ------------- ------------- ------------- Total from investment operations .50 .03 .07 .56 .53 ------------- ------------- ------------- ------------- ------------- Less dividends and distributions: Investment income--net (.16) (.34) (.34) (.37) (.38) Realized gain on investments--net -- -- (.19) (.01) -- In excess of realized gain on investments--net -- (.11) -- -- -- ------------- ------------- ------------- ------------- ------------- Total dividends and distributions (.16) (.45) (.53) (.38) (.38) ------------- ------------- ------------- ------------- ------------- Net asset value, end of period $ 7.70 $ 7.36 $ 7.78 $ 8.24 $ 8.06 ============= ============= ============= ============= ============= Total Investment Based on net asset Return:** value per share 6.92%+++ .52% .74% 7.05% 6.86% ============= ============= ============= ============= ============= Ratios to Average Expenses 1.24%* 1.24% 1.23% 1.23% 1.25% Net Assets: ============= ============= ============= ============= ============= Investment income--net 4.36%* 4.52% 4.21% 4.48% 4.77% ============= ============= ============= ============= ============= Supplemental Net assets, end of Data: period (in thousands) $ 12,450 $ 12,856 $ 16,850 $ 14,623 $ 11,922 ============= ============= ============= ============= ============= Portfolio turnover 36.51% 94.08% 86.35% 102.89% 74.40% ============= ============= ============= ============= ============= Insured Portfolio The following per share data and ratios Class D have been derived from information For the Six provided in the financial statements. Months Ended For the Year Ended June 30, Increase (Decrease) in Net Asset Value: Dec. 31, 2000 2000 1999 1998 1997 Per Share Net asset value, Operating beginning of period $ 7.36 $ 7.79 $ 8.24 $ 8.06 $ 7.91 Performance: ------------- ------------- ------------- ------------- ------------- Investment income--net .18 .38 .39 .41 .43 Realized and unrealized gain (loss) on investments--net .34 (.32) (.26) .19 .15 ------------- ------------- ------------- ------------- ------------- Total from investment operations .52 .06 .13 .60 .58 ------------- ------------- ------------- ------------- ------------- Less dividends and distributions: Investment income--net (.18) (.38) (.39) (.41) (.43) Realized gain on investments--net -- -- (.19) (.01) -- In excess of realized gain on investments--net -- (.11) -- -- -- ------------- ------------- ------------- ------------- ------------- Total dividends and distributions (.18) (.49) (.58) (.42) (.43) ------------- ------------- ------------- ------------- ------------- Net asset value, end of period $ 7.70 $ 7.36 $ 7.79 $ 8.24 $ 8.06 ============= ============= ============= ============= ============= Total Investment Based on net asset Return:** value per share 7.22%+++ .96% 1.43% 7.65% 7.46% ============= ============= ============= ============= ============= Ratios to Average Expenses .69%* .68% .67% .67% .69% Net Assets: ============= ============= ============= ============= ============= Investment income--net 4.92%* 5.10% 4.77% 5.03% 5.33% ============= ============= ============= ============= ============= Supplemental Net assets, end of Data: period (in thousands) $ 125,391 $ 99,326 $ 81,238 $ 48,706 $ 38,422 ============= ============= ============= ============= ============= Portfolio turnover 36.51% 94.08% 86.35% 102.89% 74.40% ============= ============= ============= ============= ============= National Portfolio The following per share data and ratios Class A have been derived from information For the Six provided in the financial statements. Months Ended For the Year Ended June 30, Increase (Decrease) in Net Asset Value: Dec. 31, 2000 2000 1999 1998 1997 Per Share Net asset value, Operating beginning of period $ 9.70 $ 10.22 $ 10.64 $ 10.38 $ 10.11 Performance: ------------- ------------- ------------- ------------- ------------- Investment income--net .27 .56 .56 .59 .60 Realized and unrealized gain (loss)on investments--net .42 (.52) (.42) .26 .27 ------------- ------------- ------------- ------------- ------------- Total from investment operations .69 .04 .14 .85 .87 ------------- ------------- ------------- ------------- ------------- Less dividends and distributions: Investment income--net (.27) (.56) (.56) (.59) (.60) In excess of realized gain on investments--net -- -- --++ -- -- ------------- ------------- ------------- ------------- ------------- Total dividends and distributions (.27) (.56) (.56) (.59) (.60) ------------- ------------- ------------- ------------- ------------- Net asset value, end of period $ 10.12 $ 9.70 $ 10.22 $ 10.64 $ 10.38 ============= ============= ============= ============= ============= Total Investment Based on net asset Return:** value per share 7.24%+++ .58% 1.28% 8.36% 8.84% ============= ============= ============= ============= ============= Ratios to Average Expenses .56%* .56% .55% .55% .55% Net Assets: ============= ============= ============= ============= ============= Investment income--net 5.53%* 5.74% 5.26% 5.58% 5.86% ============= ============= ============= ============= ============= Supplemental Net assets, end Data: of period (in thousands) $ 687,664 $ 682,553 $ 877,841 $ 964,940 $ 983,650 ============= ============= ============= ============= ============= Portfolio turnover 38.95% 108.43% 125.75% 142.02% 99.52% ============= ============= ============= ============= ============= National Portfolio The following per share data and ratios Class B have been derived from information For the Six provided in the financial statements. Months Ended For the Year Ended June 30, Increase (Decrease) in Net Asset Value: Dec. 31, 2000 2000 1999 1998 1997 Per Share Net asset value, Operating beginning of period $ 9.70 $ 10.21 $ 10.63 $ 10.37 $ 10.11 Performance: ------------- ------------- ------------- ------------- ------------- Investment income--net .24 .49 .48 .51 .52 Realized and unrealized gain (loss) on investments--net .41 (.51) (.42) .26 .26 ------------- ------------- ------------- ------------- ------------- Total from investment operations .65 (.02) .06 .77 .78 ------------- ------------- ------------- ------------- ------------- Less dividends and distributions: Investment income--net (.24) (.49) (.48) (.51) (.52) In excess of realized gain on investments--net -- -- --++ -- -- ------------- ------------- ------------- ------------- ------------- Total dividends and distributions (.24) (.49) (.48) (.51) (.52) ------------- ------------- ------------- ------------- ------------- Net asset value, end of period $ 10.11 $ 9.70 $ 10.21 $ 10.63 $ 10.37 ============= ============= ============= ============= ============= Total Investment Based on net asset Return:** value per share 6.73%+++ (.09%) .51% 7.55% 7.92% ============= ============= ============= ============= ============= Ratios to Average Expenses 1.32%* 1.32% 1.31% 1.31% 1.31% Net Assets: ============= ============= ============= ============= ============= Investment income--net 4.77%* 4.98% 4.50% 4.82% 5.10% ============= ============= ============= ============= ============= Supplemental Net assets, end of Data: period (in thousands) $ 240,475 $ 254,860 $ 374,642 $ 406,798 $ 415,103 ============= ============= ============= ============= ============= Portfolio turnover 38.95% 108.43% 125.75% 142.02% 99.52% ============= ============= ============= ============= ============= *Annualized. **Total investment returns exclude the effects of sales charges. ++Amount is less than $.01 per share. +++Aggregate total investment return. See Notes to Financial Statements.
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 FINANCIAL HIGHLIGHTS (continued)
National Portfolio The following per share data and ratios Class C have been derived from information For the Six provided in the financial statements. Months Ended For the Year Ended June 30, Increase (Decrease) in Net Asset Value: Dec. 31, 2000 2000 1999 1998 1997 Per Share Net asset value, Operating beginning of period $ 9.71 $ 10.22 $ 10.64 $ 10.38 $ 10.11 Performance: ------------- ------------- ------------- ------------- ------------- Investment income--net .23 .48 .47 .50 .52 Realized and unrealized gain (loss)on investments--net .41 (.51) (.42) .26 .27 ------------- ------------- ------------- ------------- ------------- Total from investment operations .64 (.03) .05 .76 .79 ------------- ------------- ------------- ------------- ------------- Less dividends and distributions: Investment income--net (.23) (.48) (.47) (.50) (.52) In excess of realized gain on investments--net -- -- --++ -- -- ------------- ------------- ------------- ------------- ------------- Total dividends and distributions (.23) (.48) (.47) (.50) (.52) ------------- ------------- ------------- ------------- ------------- Net asset value, end of period $ 10.12 $ 9.71 $ 10.22 $ 10.64 $ 10.38 ============= ============= ============= ============= ============= Total Investment Based on net asset value Return:** per share 6.70%+++ (.13%) .47% 7.49% 7.97% ============= ============= ============= ============= ============= Ratios to Average Expenses 1.37%* 1.37% 1.36% 1.36% 1.36% Net Assets: ============= ============= ============= ============= ============= Investment income--net 4.72%* 4.92% 4.45% 4.76% 5.04% ============= ============= ============= ============= ============= Supplemental Net assets, end of period Data: (in thousands) $ 28,771 $ 30,303 $ 47,901 $ 41,087 $ 28,096 ============= ============= ============= ============= ============= Portfolio turnover 38.95% 108.43% 125.75% 142.02% 99.52% ============= ============= ============= ============= ============= National Portfolio The following per share data and ratios Class D have been derived from information For the Six provided in the financial statements. Months Ended For the Year Ended June 30, Increase (Decrease) in Net Asset Value: Dec. 31, 2000 2000 1999 1998 1997 Per Share Net asset value, Operating beginning of period $ 9.71 $ 10.22 $ 10.64 $ 10.39 $ 10.12 Performance: ------------- ------------- ------------- ------------- ------------- Investment income--net .26 .54 .53 .56 .58 Realized and unrealized gain (loss) on investments--net .41 (.51) (.42) .25 .27 ------------- ------------- ------------- ------------- ------------- Total from investment operations .67 .03 .11 .81 .85 ------------- ------------- ------------- ------------- ------------- Less dividends and distributions: Investment income--net (.26) (.54) (.53) (.56) (.58) In excess of realized gain on investments--net -- -- --++ -- -- ------------- ------------- ------------- ------------- ------------- Total dividends and distributions (.26) (.54) (.53) (.56) (.58) ------------- ------------- ------------- ------------- ------------- Net asset value, end of period $ 10.12 $ 9.71 $ 10.22 $ 10.64 $ 10.39 ============= ============= ============= ============= ============= Total Investment Based on net asset Return:** value per share 7.00%+++ .43% 1.03% 7.99% 8.57% ============= ============= ============= ============= ============= Ratios to Average Expenses .81%* .81% .81% .80% .80% Net Assets: ============= ============= ============= ============= ============= Investment income--net 5.27%* 5.50% 5.01% 5.32% 5.60% ============= ============= ============= ============= ============= Supplemental Net assets, end of period Data: (in thousands) $ 108,048 $ 86,701 $ 93,201 $ 68,162 $ 51,038 ============= ============= ============= ============= ============= Portfolio turnover 38.95% 108.43% 125.75% 142.02% 99.52% ============= ============= ============= ============= ============= Limited Maturity Portfolio The following per share data and ratios Class A have been derived from information For the Six provided in the financial statements. Months Ended For the Year Ended June 30, Increase (Decrease) in Net Asset Value: Dec. 31, 2000 2000 1999 1998 1997 Per Share Net asset value, Operating beginning of period $ 9.85 $ 9.91 $ 9.96 $ 9.93 $ 9.91 Performance: ------------- ------------- ------------- ------------- ------------- Investment income--net .19 .38 .37 .39 .39 Realized and unrealized gain( loss) on investments--net .10 (.06) (.04) .03 .04 ------------- ------------- ------------- ------------- ------------- Total from investment operations .29 .32 .33 .42 .43 ------------- ------------- ------------- ------------- ------------- Less dividends and distributions: Investment income--net (.19) (.38) (.37) (.39) (.39) Realized gain on investments--net -- -- -- -- (.02) In excess of realized gain on investments--net -- -- (.01) -- -- ------------- ------------- ------------- ------------- ------------- Total dividends and distributions (.19) (.38) (.38) (.39) (.41) ------------- ------------- ------------- ------------- ------------- Net asset value, end of period $ 9.95 $ 9.85 $ 9.91 $ 9.96 $ 9.93 ============= ============= ============= ============= ============= Total Investment Based on net asset Return:** value per share 3.02%+++ 3.31% 3.37% 4.26% 4.40% ============= ============= ============= ============= ============= Ratios to Average Expenses .43%* .40% .43% .43% .39% Net Assets: ============= ============= ============= ============= ============= Investment income--net 3.92%* 3.83% 3.75% 3.88% 3.93% ============= ============= ============= ============= ============= Supplemental Net assets, end of period Data: (in thousands) $ 200,508 $ 215,421 $ 261,970 $ 295,641 $ 343,641 ============= ============= ============= ============= ============= Portfolio turnover 21.61% 51.42% 40.28% 72.69% 61.90% ============= ============= ============= ============= ============= *Annualized. **Total investment returns exclude the effects of sales charges. ++Amount is less than $.01 per share. +++Aggregate total investment return. See Notes to Financial Statements.
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 FINANCIAL HIGHLIGHTS (concluded)
Limited Maturity Portfolio The following per share data and ratios Class B have been derived from information For the Six provided in the financial statements. Months Ended For the Year Ended June 30, Increase (Decrease) in Net Asset Value: Dec. 31, 2000 2000 1999 1998 1997 Per Share Net asset value, Operating beginning of period $ 9.86 $ 9.92 $ 9.97 $ 9.94 $ 9.91 Performance: ------------- ------------- ------------- ------------- ------------- Investment income--net .18 .35 .34 .35 .36 Realized and unrealized gain (loss) on investments--net .09 (.06) (.04) .03 .05 ------------- ------------- ------------- ------------- ------------- Total from investment operations .27 .29 .30 .38 .41 ------------- ------------- ------------- ------------- ------------- Less dividends and distributions: Investment income--net (.18) (.35) (.34) (.35) (.36) Realized gain on investments--net -- -- -- -- (.02) In excess of realized gain on investments--net -- -- (.01) -- -- ------------- ------------- ------------- ------------- ------------- Total dividends and distributions (.18) (.35) (.35) (.35) (.38) ------------- ------------- ------------- ------------- ------------- Net asset value, end of period $ 9.95 $ 9.86 $ 9.92 $ 9.97 $ 9.94 ============= ============= ============= ============= ============= Total Investment Based on net asset value Return:** per share 2.73%+++ 2.94% 3.01% 3.89% 4.13% ============= ============= ============= ============= ============= Ratios to Average Expenses .78%* .76% .78% .78% .75% Net Assets: ============= ============= ============= ============= ============= Investment income--net 3.56%* 3.47% 3.39% 3.43% 3.58% ============= ============= ============= ============= ============= Supplemental Net assets, end of period Data: (in thousands) $ 30,041 $ 32,742 $ 42,930 $ 44,714 $ 54,275 ============= ============= ============= ============= ============= Portfolio turnover 21.61% 51.42% 40.28% 72.69% 61.90% ============= ============= ============= ============= ============= Limited Maturity Portfolio The following per share data and ratios Class C have been derived from information For the Six provided in the financial statements. Months Ended For the Year Ended June 30, Increase (Decrease) in Net Asset Value: Dec. 31, 2000 2000 1999 1998 1997 Per Share Net asset value, Operating beginning of period $ 9.82 $ 9.88 $ 9.94 $ 9.91 $ 9.88 Performance: ------------- ------------- ------------- ------------- ------------- Investment income--net .18 .34 .34 .35 .35 Realized and unrealized gain (loss) on investments--net .09 (.06) (.05) .03 .05 ------------- ------------- ------------- ------------- ------------- Total from investment operations .27 .28 .29 .38 .40 ------------- ------------- ------------- ------------- ------------- Less dividends and distributions: Investment income--net (.18) (.34) (.34) (.35) (.35) Realized gain on investments--net -- -- -- -- (.02) In excess of realized gain on investments--net -- -- (.01) -- -- ------------- ------------- ------------- ------------- ------------- Total dividends and distributions (.18) (.34) (.35) (.35) (.37) ------------- ------------- ------------- ------------- ------------- Net asset value, end of period $ 9.91 $ 9.82 $ 9.88 $ 9.94 $ 9.91 ============= ============= ============= ============= ============= Total Investment Based on net asset Return:** value per share 2.73%+++ 2.93% 2.89% 3.88% 4.11% ============= ============= ============= ============= ============= Ratios to Average Expenses .79%* .76% .79% .79% .75% Net Assets: ============= ============= ============= ============= ============= Investment income--net 3.55%* 3.46% 3.37% 4.27% 3.57% ============= ============= ============= ============= ============= Supplemental Net assets, end of period Data: (in thousands) $ 454 $ 308 $ 437 $ 86 $ 108 ============= ============= ============= ============= ============= Portfolio turnover 21.61% 51.42% 40.28% 72.69% 61.90% ============= ============= ============= ============= ============= Limited Maturity Portfolio The following per share data and ratios Class D have been derived from information For the Six provided in the financial statements. Months Ended For the Year Ended June 30, Increase (Decrease) in Net Asset Value: Dec. 31, 2000 2000 1999 1998 1997 Per Share Net asset value, Operating beginning of period $ 9.86 $ 9.92 $ 9.97 $ 9.94 $ 9.91 Performance: ------------- ------------- ------------- ------------- ------------- Investment income--net .19 .37 .37 .38 .38 Realized and unrealized gain (loss) on investments--net .10 (.06) (.04) .03 .05 ------------- ------------- ------------- ------------- ------------- Total from investment operations .29 .31 .33 .41 .43 ------------- ------------- ------------- ------------- ------------- Less dividends and distributions: Investment income--net (.19) (.37) (.37) (.38) (.38) Realized gain on investments--net -- -- -- -- (.02) In excess of realized gain on investments--net -- -- (.01) -- -- ------------- ------------- ------------- ------------- ------------- Total dividends and distributions (.19) (.37) (.38) (.38) (.40) ------------- ------------- ------------- ------------- ------------- Net asset value, end of period $ 9.96 $ 9.86 $ 9.92 $ 9.97 $ 9.94 ============= ============= ============= ============= ============= Total Investment Based on net asset Return:** value per share 2.96%+++ 3.20% 3.27% 4.16% 4.40% ============= ============= ============= ============= ============= Ratios to Average Expenses .53%* .50% .53% .54% .48% Net Assets: ============= ============= ============= ============= ============= Investment income--net 3.82%* 3.72% 3.65% 3.89% 3.84% ============= ============= ============= ============= ============= Supplemental Net assets, end of period Data: (in thousands) $ 38,898 $ 39,090 $ 83,177 $ 68,562 $ 20,383 ============= ============= ============= ============= ============= Portfolio turnover 21.61% 51.42% 40.28% 72.69% 61.90% ============= ============= ============= ============= ============= *Annualized. **Total investment returns exclude the effects of sales charges. +++Aggregate total investment return. See Notes to Financial Statements.
Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 NOTES TO FINANCIAL STATEMENTS 1. Significant Accounting Policies: Merrill Lynch Municipal Bond Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Fund's financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which may require the use of management accruals and estimates. These unaudited financial statements reflect all adjustments, which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. All such adjustments are of a normal, recurring nature. The Fund's Portfolios offer four classes of shares under the Merrill Lynch Select PricingSM System. Shares of Class A and Class D are sold with a front-end sales charge. Shares of Class B and Class C may be subject to a contingent deferred sales charge. All classes of shares have identical voting, dividend, liquidation and other rights and the same terms and conditions, except that Class B, Class C and Class D Shares bear certain expenses related to the account maintenance of such shares, and Class B and Class C Shares also bear certain expenses related to the distribution of such shares. Each class has exclusive voting rights with respect to matters relating to its account maintenance and distribution expenditures. The following is a summary of significant accounting policies followed by the Fund. (a) Valuation of investments--Insured Portfolio: Where bonds in the Portfolio have not been insured pursuant to policies obtained by the issuer, the Fund has obtained insurance with respect to the payment of interest and principal of each bond. Such insurance is valid as long as the bonds are held by the Fund. All Portfolios: Municipal bonds and money market securities are traded primarily in the over-the-counter markets and are valued at the most recent bid price or yield equivalent as obtained from dealers that make markets in such securities. Positions in futures contracts and options thereon, which are traded on exchanges, are valued at closing prices as of the close of such exchanges. Assets for which market quotations are not readily available are valued at fair value on a consistent basis using methods determined in good faith by the Fund's Board of Directors, including valuations furnished by a pricing service retained by the Fund, which may utilize a matrix system for valuations. The procedures of the pricing service and its valuations are reviewed by the officers of the Fund under the general supervision of the Board of Directors. (b) Derivative financial instruments--The Fund may engage in various portfolio investment strategies to increase or decrease the level of risk to which the Fund is exposed more quickly and efficiently than transactions in other types of instruments. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract. * Financial futures contracts--The Fund's Portfolios may purchase or sell financial futures contracts and options on such futures contracts for the purpose of hedging the market risk on existing securities or the intended purchase of securities. Futures contracts are contracts for delayed delivery of securities at a specific future date and at a specific price or yield. Upon entering into a contract, the Portfolios deposit and maintain as collateral such initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Portfolios agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Portfolios as unrealized gains or losses. When the contract is closed, the Portfolios record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. (c) Income taxes--It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no Federal income tax provision is required. (d) Security transactions and investment income--Security transactions are recorded on the dates the transactions are entered into (the trade dates). Interest income is recognized on the accrual basis. Realized gains and losses on security transactions are determined on the identified cost basis. The Fund will adopt the provisions of the AICPA Audit and Accounting Guide for Investment Companies, as revised, effective for fiscal years beginning after December 15, 2000. As required, the Fund will amortize premiums and discounts on debt securities effective July 1, 2001. The cumulative effect of this accounting change will have no impact on the total net assets of the Fund. The impact of this accounting change has not been determined, but will result in an adjustment to cost of securities and a corresponding adjustment in net unrealized appreciation/depreciation, based on securities held as of June 30, 2001. (e) Prepaid registration fees--Prepaid registration fees are charged to expenses as the related shares are issued. (f) Dividends and distributions--Dividends from net investment income are declared daily and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. Distributions in excess of realized capital gains are due primarily to differing tax treatments for futures transactions and post-October losses. 2. Investment Advisory Agreement and Transactions with Affiliates: The Fund has entered into an Investment Advisory Agreement with Fund Asset Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc. ("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the limited partner. The Fund has also entered into a Distribution Agreement and Distribution Plans with FAM Distributors, Inc. ("FAMD" or the "Distributor"), which is a wholly-owned subsidiary of Merrill Lynch Group, Inc. FAM is responsible for the management of the Fund's portfolios and provides the necessary personnel, facilities, equipment and certain other services necessary to the operation of the Fund. For such services, FAM receives at the end of each month a fee with respect to each Portfolio at the annual rates set forth below which are based upon the average daily value of the Fund's net assets. Rate of Advisory Fee Aggregate of Average Daily Limited Net Assets of the Three Insured National Maturity Combined Portfolios Portfolio Portfolio Portfolio Not exceeding $250 million .40 % .50 % .40 % In excess of $250 million but not exceeding $400 million .375 .475 .375 In excess of $400 million but not exceeding $550 million .375 .475 .35 In excess of $550 million but not exceeding $1.5 billion .375 .475 .325 In excess of $1.5 billion .35 .475 .325 Pursuant to the Distribution Plans adopted by the Fund in accordance with Rule 12b-1 under the Investment Company Act of 1940, the Fund pays the Distributor ongoing account maintenance and distribution fees. The fees are accrued daily and paid monthly at annual rates based upon the average daily net assets of the shares as follows: Account Maintenance Distribution Fees Fees Limited Limited Insured National Maturity Insured National Maturity Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Class B .25% .25% .15% .50% .50% .20% Class C .25 .25 .15 .55 .55 .20 Class D .25 .25 .10 -- -- -- Pursuant to a subagreement with the Distributor, Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a subsidiary of ML & Co., also provides account maintenance and distribution services to the Fund. The ongoing account maintenance fee compensates the Distributor and MLPF&S for providing account maintenance services to Class B, Class C and Class D shareholders. The ongoing distribution fee compensates the Distributor and MLPF&S for providing shareholder and distribution-related services to Class B and Class C shareholders. For the six months ended December 31, 2000, FAMD earned underwriting discounts and direct commissions and MLPF&S earned dealer concessions on sales of the Fund's Class A and Class D Shares follows: Limited Insured National Maturity Portfolio Portfolio Portfolio Class A Shares: FAMD $ 3,042 $ 3,538 $ 122 MLPF&S 27,139 24,509 1,106 Class D Shares: FAMD 1,515 2,404 343 MLPF&S 12,999 27,261 2,947 For the six months ended December 31, 2000, MLPF&S received contingent deferred sales charges of $273,391 relating to transactions in Class B Shares, amounting to $119,650, $139,092 and $14,649 in the Insured, National and Limited Maturity Portfolios, respectively, and $5,891 relating to transactions in Class C Shares, amounting to $476 and $5,415 in the Insured and National Portfolios, respectively. Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is the Fund's transfer agent. Accounting services were provided to the Fund by FAM. Certain officers and/or directors of the Fund are officers and/or directors of FAM, PSI, FAMD, FDS, and/or ML & Co. Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 NOTES TO FINANCIAL STATEMENTS (continued) 3. Investments: Purchases and sales of investments, excluding short-term securities, for the six months ended December 31, 2000 were as follows: Purchases Sales Insured Portfolio $ 466,506,372 $ 501,146,742 National Portfolio 398,263,459 415,228,268 Limited Maturity Portfolio 52,952,965 54,984,205 Net realized gains (losses) for the six months ended December 31, 2000 and net unrealized gains (losses) as of December 31, 2000 were as follows: Realized Unrealized Insured Portfolio Gains Gains Long-term investments $ 13,456,373 $ 85,658,134 -------------- -------------- Total $ 13,456,373 $ 85,658,134 ============== ============== Realized Unrealized National Portfolio Gains Gains Long-term investments $ 15,649,685 $ 41,204,408 -------------- -------------- Total $ 15,649,685 $ 41,204,408 ============== ============== Realized Unrealized Limited Maturity Portfolio Losses Gains (Losses) Long-term investments $ (135,066) $ 1,255,912 Short-term investments -- (65,214) -------------- -------------- Total $ (135,066) $ 1,190,698 ============== ============== As of December 31, 2000 net unrealized appreciation for Federal income tax purposes were as follows: Gross Gross Net Unrealized Unrealized Unrealized Appreciation Depreciation Appreciation Insured Portfolio $85,829,976 $ (171,842) $85,658,134 National Portfolio 59,477,379 (18,272,971) 41,204,408 Limited Maturity Portfolio 1,557,536 (366,838) 1,190,698 The aggregate cost of investments at December 31, 2000 for Federal income tax purposes was $1,265,993,399 for the Insured Portfolio, $1,009,450,420 for the National Portfolio, and $259,455,510 for the Limited Maturity Portfolio. 4. Capital Share Transactions: Net decrease in net assets derived from capital share transactions for the six months ended December 31, 2000 and for the year ended June 30, 2000 were $(78,138,250) and $(275,055,198), respectively, for the Insured Portfolio; $(33,279,910) and $(268,812,275), respectively, for the National Portfolio, and $(20,350,567) and $(98,688,194), respectively, for the Limited Maturity Portfolio. Transactions in capital shares for each class were as follows: Insured Portfolio Class A Shares for the Six Months Dollar Ended December 31, 2000 Shares Amount Shares sold 722,458 $ 5,427,758 Shares issued to shareholders in reinvestment of dividends 1,382,819 10,377,862 -------------- -------------- Total issued 2,105,277 15,805,620 Shares redeemed (10,108,165) (75,770,088) -------------- -------------- Net decrease (8,002,888) $ (59,964,468) ============== ============== Insured Portfolio Class A Shares for the Year Dollar Ended June 30, 2000 Shares Amount Shares sold 2,189,238 $ 16,064,750 Shares issued to shareholders in reinvestment of dividends and distributions 4,168,354 30,616,793 -------------- -------------- Total issued 6,357,592 46,681,543 Shares redeemed (30,464,525) (225,027,241) -------------- -------------- Net decrease (24,106,933) $ (178,345,698) ============== ============== Insured Portfolio Class B Shares for the Six Months Dollar Ended December 31, 2000 Shares Amount Shares sold 1,252,119 $ 9,420,403 Shares issued to shareholders in reinvestment of dividends 365,574 2,741,649 -------------- -------------- Total issued 1,617,693 12,162,052 Automatic conversion of shares (1,928,361) (14,405,492) Shares redeemed (4,776,591) (35,757,545) -------------- -------------- Net decrease (5,087,259) $ (38,000,985) ============== ============== Insured Portfolio Class B Shares for the Year Dollar Ended June 30, 2000 Shares Amount Shares sold 3,270,666 $ 24,137,115 Shares issued to shareholders in reinvestment of dividends and distributions 1,345,927 9,877,799 -------------- -------------- Total issued 4,616,593 34,014,914 Automatic conversion of shares (5,976,596) (44,419,700) Shares redeemed (14,317,769) (105,647,752) -------------- -------------- Net decrease (15,677,772) $ (116,052,538) ============== ============== Insured Portfolio Class C Shares for the Six Months Dollar Ended December 31, 2000 Shares Amount Shares sold 107,743 $ 804,544 Shares issued to shareholders in reinvestment of dividends 18,710 140,377 -------------- -------------- Total issued 126,453 944,921 Shares redeemed (256,499) (1,921,450) -------------- -------------- Net decrease (130,046) $ (976,529) ============== ============== Insured Portfolio Class C Shares for the Year Dollar Ended June 30, 2000 Shares Amount Shares sold 460,085 $ 3,400,275 Shares issued to shareholders in reinvestment of dividends and distributions 58,936 432,490 -------------- -------------- Total issued 519,021 3,832,765 Shares redeemed (936,770) (6,943,556) -------------- -------------- Net decrease (417,749) $ (3,110,791) ============== ============== Insured Portfolio Class D Shares for the Six Months Dollar Ended December 31, 2000 Shares Amount Shares sold 4,637,668 $ 34,567,590 Automatic conversion of shares 1,928,033 14,405,492 Shares issued to shareholders in reinvestment of dividends 192,082 1,442,876 -------------- -------------- Total issued 6,757,783 50,415,958 Shares redeemed (3,971,921) (29,612,226) -------------- -------------- Net increase 2,785,862 $ 20,803,732 ============== ============== Insured Portfolio Class D Shares for the Year Dollar Ended June 30, 2000 Shares Amount Shares sold 5,635,273 $ 41,646,584 Automatic conversion of shares 5,974,043 44,419,700 Shares issued to shareholders in reinvestment of dividends and distributions 401,383 2,941,244 -------------- -------------- Total issued 12,010,699 89,007,528 Shares redeemed (8,952,192) (66,553,699) -------------- -------------- Net increase 3,058,507 $ 22,453,829 ============== ============== National Portfolio Class A Shares for the Six Months Dollar Ended December 31, 2000 Shares Amount Shares sold 1,895,942 $ 18,678,060 Shares issued to shareholders in reinvestment of dividends 964,094 9,534,934 -------------- -------------- Total issued 2,860,036 28,212,994 Shares redeemed (5,214,274) (51,439,068) -------------- -------------- Net decrease (2,354,238) $ (23,226,074) ============== ============== National Portfolio Class A Shares for the Year Dollar Ended June 30, 2000 Shares Amount Shares sold 2,501,422 $ 24,056,825 Shares issued to shareholders in reinvestment of dividends 2,217,109 21,483,144 -------------- -------------- Total issued 4,718,531 45,539,969 Shares redeemed (20,297,630) (196,458,002) -------------- -------------- Net decrease (15,579,099) $ (150,918,033) ============== ============== National Portfolio Class B Shares for the Six Months Dollar Ended December 31, 2000 Shares Amount Shares sold 1,793,389 $ 17,726,433 Shares issued to shareholders in reinvestment of dividends 261,815 2,587,473 -------------- -------------- Total issued 2,055,204 20,313,906 Automatic conversion of shares (731,325) (7,204,077) Shares redeemed (3,814,615) (37,632,339) -------------- -------------- Net decrease (2,490,736) $ (24,522,510) ============== ============== National Portfolio Class B Shares for the Year Dollar Ended June 30, 2000 Shares Amount Shares sold 3,230,018 $ 31,342,736 Shares issued to shareholders in reinvestment of dividends 723,846 7,016,462 -------------- -------------- Total issued 3,953,864 38,359,198 Automatic conversion of shares (1,771,855) (17,264,191) Shares redeemed (12,589,149) (121,755,396) -------------- -------------- Net decrease (10,407,140) $ (100,660,389) ============== ============== Merrill Lynch Municipal Bond Fund, Inc., December 31, 2000 NOTES TO FINANCIAL STATEMENTS (concluded) National Portfolio Class C Shares for the Six Months Dollar Ended December 31, 2000 Shares Amount Shares sold 167,649 $ 1,659,856 Shares issued to shareholders in reinvestment of dividends 39,322 388,862 -------------- -------------- Total issued 206,971 2,048,718 Shares redeemed (485,250) (4,775,949) -------------- -------------- Net decrease (278,279) $ (2,727,231) ============== ============== National Portfolio Class C Shares for the Year Dollar Ended June 30, 2000 Shares Amount Shares sold 592,010 $ 5,777,103 Shares issued to shareholders in reinvestment of dividends 110,217 1,068,763 -------------- -------------- Total issued 702,227 6,845,866 Shares redeemed (2,267,391) (21,908,932) -------------- -------------- Net decrease (1,565,164) $ (15,063,066) ============== ============= National Portfolio Class D Shares for the Six Months Dollar Ended December 31, 2000 Shares Amount Shares sold 3,890,989 $ 38,283,588 Automatic conversion of shares 730,583 7,204,077 Shares issued to shareholders in reinvestment of dividends 116,206 1,150,624 -------------- -------------- Total issued 4,737,778 46,638,289 Shares redeemed (2,990,386) (29,442,384) -------------- -------------- Net increase 1,747,392 $ 17,195,905 ============== ============== National Portfolio Class D Shares for the Year Dollar Ended June 30, 2000 Shares Amount Shares sold 4,890,948 $ 47,366,022 Automatic conversion of shares 1,770,615 17,264,191 Shares issued to shareholders in reinvestment of dividends 236,352 2,290,783 -------------- -------------- Total issued 6,897,915 66,920,996 Shares redeemed (7,085,726) (69,091,783) -------------- -------------- Net decrease (187,811) $ (2,170,787) ============== ============== Limited Maturity Portfolio Class A Shares for the Six Months Dollar Ended December 31, 2000 Shares Amount Shares sold 260,712 $ 2,579,897 Shares issued to shareholders in reinvestment of dividends 244,065 2,416,917 -------------- -------------- Total issued 504,777 4,996,814 Shares redeemed (2,214,216) (21,917,761) -------------- -------------- Net decrease (1,709,439) $ (16,920,947) ============== ============== Limited Maturity Portfolio Class A Shares for the Year Dollar Ended June 30, 2000 Shares Amount Shares sold 1,536,138 $ 15,117,350 Shares issued to shareholders in reinvestment of dividends 512,562 5,053,751 -------------- -------------- Total issued 2,048,700 20,171,101 Shares redeemed (6,612,955) (65,210,325) -------------- -------------- Net decrease (4,564,255) $ (45,039,224) ============== ============== Limited Maturity Portfolio Class B Shares for the Six Months Dollar Ended December 31, 2000 Shares Amount Shares sold 225,624 $ 2,235,120 Shares issued to shareholders in resinvestment of dividends 36,581 362,297 -------------- -------------- Total issued 262,205 2,597,417 Automatic conversion of shares (31,937) (315,915) Shares redeemed (533,695) (5,284,445) -------------- -------------- Net decrease (303,427) $ (3,002,943) ============== ============== Limited Maturity Portfolio Class B Shares for the Year Dollar Ended June 30, 2000 Shares Amount Shares sold 890,806 $ 8,796,176 Shares issued to shareholders in reinvestment of dividends 90,275 890,200 -------------- -------------- Total issued 981,081 9,686,376 Automatic conversion of shares (20,095) (198,201) Shares redeemed (1,968,527) (19,397,167) -------------- -------------- Net decrease (1,007,541) $ (9,908,992) ============== ============== Limited Maturity Portfolio Class C Shares for the Six Months Dollar Ended December 31, 2000 Shares Amount Shares sold 18,369 $ 181,382 Shares issued to shareholders in reinvestment of dividends 514 5,076 -------------- -------------- Total issued 18,883 186,458 Shares redeemed (4,500) (44,400) -------------- -------------- Net increase 14,383 $ 142,058 ============== ============== Limited Maturity Portfolio Class C Shares for the Year Dollar Ended June 30, 2000 Shares Amount Shares sold 71,755 $ 707,095 Shares issued to shareholders in reinvestment of dividends 1,301 12,780 -------------- -------------- Total issued 73,056 719,875 Shares redeemed (85,885) (844,221) -------------- -------------- Net decrease (12,829) $ (124,346) ============== ============== Limited Maturity Portfolio Class D Shares for the Six Months Dollar Ended December 31, 2000 Shares Amount Shares sold 940,213 $ 9,320,883 Automatic conversion of shares 31,914 315,915 Shares issued to shareholders in reinvestment of dividends 41,705 413,316 -------------- -------------- Total issued 1,013,832 10,050,114 Shares redeemed (1,071,704) (10,618,849) -------------- -------------- Net decrease (57,872) $ (568,735) ============== ============== Limited Maturity Portfolio Class D Shares for the Year Dollar Ended June 30, 2000 Shares Amount Shares sold 1,521,072 $ 15,017,187 Automatic conversion of shares 20,088 198,201 Shares issued to shareholders in reinvestment of dividends 131,400 1,296,203 -------------- -------------- Total issued 1,672,560 16,511,591 Shares redeemed (6,094,726) (60,127,223) -------------- -------------- Net decrease (4,422,166) $ (43,615,632) ============== ============== 5. Short-Term Borrowings: On December 1, 2000, the Insured and National Portfolios, along with certain other funds managed by FAM and its affiliates, renewed and amended a $1,000,000,000 credit agreement with Bank One, N.A. and certain other lenders. The Portfolios may borrow under the credit agreement to fund shareholder redemptions and for other lawful purposes other than for leverage. The Portfolios may borrow up to the maximum amount allowable under the Portfolio's current prospectus and statement of additional information, subject to various other legal, regulatory or contractual limits. The Portfolios pay a commitment fee of .09% per annum based on the Portfolio's pro rata share of the unused portion of the facility. Amounts borrowed under the facility bear interest at a rate equal to, at each fund's election, the Federal Funds rate plus .50% or a base rate as determined by Bank One, N.A. The Portfolios did not borrow under the facility during the six months ended December 31, 2000. 6. Capital Loss Carryforward: At June 30, 2000, the Insured Portfolio had a net capital loss carryforward of approximately $17,630,000, all of which expires in 2008; the National Portfolio had a net capital loss carryforward of approximately $25,616,000, all of which expires in 2008; and the Limited Maturity Portfolio had a net capital loss carryforward of approximately $2,048,000, of which $1,928,000 expires in 2003 and $120,000 expires in 2008. These amounts will be available to offset like amounts of any future taxable gains. -----END PRIVACY-ENHANCED MESSAGE-----