-----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, NMS+q1+nNcYS8ZqBdzg/fvHfJB0ErGBeevhEIYuGhpKeqEEgR7dAG4IfCfoJunsv msGLodWEWPf4DZiMVKVRrQ== 0000900092-97-000108.txt : 19970612 0000900092-97-000108.hdr.sgml : 19970612 ACCESSION NUMBER: 0000900092-97-000108 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970430 FILED AS OF DATE: 19970611 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MUNIVEST FLORIDA FUND CENTRAL INDEX KEY: 0000899177 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07580 FILM NUMBER: 97622096 BUSINESS ADDRESS: STREET 1: 800 SCUDDERS MILL RD CITY: PLAINSBORO STATE: NJ ZIP: 08536 BUSINESS PHONE: 6092822800 MAIL ADDRESS: STREET 1: PO BOX 9011 CITY: PRINCETON STATE: NJ ZIP: 08543-9011 N-30D 1 SEMI-ANNUAL REPORT MUNIVEST FLORIDA FUND FUND LOGO Semi-Annual Report April 30, 1997 Officers and Trustees Arthur Zeikel, President and Trustee Donald Cecil, Trustee M. Colyer Crum, Trustee Edward H. Meyer, Trustee Jack B. Sunderland, Trustee J. Thomas Touchton, Trustee Terry K. Glenn, Executive Vice President Vincent R. Giordano, Senior Vice President Donald C. Burke, Vice President Robert A. DiMella, Vice President Kenneth A. Jacob, Vice President Gerald M. Richard, Treasurer Patrick D. Sweeney, Secretary Custodian The Bank of New York 90 Washington Street New York, NY 10286 Transfer Agents Common Shares: The Bank of New York 101 Barclay Street New York, NY 10286 Preferred Shares: IBJ Schroder Bank &Trust Company One State Street New York, NY 10004 NYSE Symbol MVS This report, including the financial information herein, is transmitted to the shareholders of MuniVest Florida Fund for their information. It is not a prospectus, circular or representation intended for use in the purchase of shares of the Fund or any securities mentioned in the report. Past performance results shown in this report should not be considered a representation of future performance. The Fund has leveraged its Common Shares by issuing Preferred Shares to provide the Common Shareholders with a potentially higher rate of return. Leverage creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of shares of the Common Shares, and the risk that fluctuations in the short-term dividend rates of the Preferred Shares may affect the yield to Common Shareholders. Statements and other information herein are as dated and are subject to change. MuniVest Florida Fund Box 9011 Princeton, NJ 08543-9011 Printed on post-consumer recycled paper MUNIVEST FLORIDA FUND The Benefits and Risks of Leveraging MuniVest Florida Fund utilizes leveraging to seek to enhance the yield and net asset value of its Common Shares. However, these objectives cannot be achieved in all interest rate environments. To leverage, the Fund issues Preferred Shares, which pay dividends at prevailing short-term interest rates, and invests the proceeds in long-term municipal bonds. The interest earned on these investments is paid to Common Shareholders in the form of dividends, and the value of these portfolio holdings is reflected in the per share net asset value of the Fund's Common Shares. However, in order to benefit Common Shareholders, the yield curve must be positively sloped; that is, short-term interest rates must be lower than long- term interest rates. At the same time, a period of generally declining interest rates will benefit Common Shareholders. If either of these conditions change, then the risks of leveraging will begin to outweigh the benefits. To illustrate these concepts, assume a fund's Common Share capitalization of $100 million and the issuance of Preferred Shares for an additional $50 million, creating a total value of $150 million available for investment in long-term municipal bonds. If prevailing short-term interest rates are approximately 3% and long- term interest rates are approximately 6%, the yield curve has a strongly positive slope. The fund pays dividends on the $50 million of Preferred Shares based on the lower short-term interest rates. At the same time, the fund's total portfolio of $150 million earns the income based on long-term interest rates. Of course, increases in short-term interest rates would reduce (and even eliminate) the dividends on the Common Shares. In this case, the dividends paid to Preferred Shareholders are significantly lower than the income earned on the fund's long-term investments, and therefore the Common Shareholders are the beneficiaries of the incremental yield. However, if short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental yield pickup on the Common Shares will be reduced or eliminated completely. At the same time, the market value of the fund's Common Shares (that is, its price as listed on the New York Stock Exchange) may, as a result, decline. Furthermore, if long-term interest rates rise, the Common Shares' net asset value will reflect the full decline in the price of the portfolio's investments, since the value of the fund's Preferred Shares does not fluctuate. In addition to the decline in net asset value, the market value of the fund's Common Shares may also decline. DEAR SHAREHOLDER For the six-month period ended April 30, 1997, the Common Shares of MuniVest Florida Fund earned $0.393 per share income dividends, which included earned and unpaid dividends of $0.063. This represents a net annualized yield of 6.04%, based on a month-end per share net asset value of $13.12. Over the same period, the total investment return on the Fund's Common Shares was +1.04%, based on a change in per share net asset value from $13.39 to $13.12, and assuming reinvestment of $0.397 per share income dividends. The average yield of the Fund's Auction Market Preferred Shares for the six-month period ended April 30, 1997 was 3.17%. The Municipal Market Environment Long-term tax-exempt revenue bonds traded in a relatively narrow range throughout much of the six months ended April 30, 1997. By mid- January 1997, municipal bond yields had risen to over 6% as investors reacted negatively to reports of progressively stronger domestic economic growth. However, a continued lack of any material inflationary pressures allowed bond yields to decline to their prior levels by late February. Bond yields rose again as investors became increasingly concerned that the US domestic economic strength seen thus far in 1997 would continue and that the increase in short-term interest rates administered by the Federal Reserve Board (FRB) in late March would be the first in a series of such moves designed to slow the US economy before any dormant inflationary pressures were awakened. Long-term tax-exempt bond yields rose approximately 15 basis points (0.15%) to almost 6.15% by mid-April. Similarly, long- term US Treasury bond yields rose over 35 basis points over the same period to 7.16%. However, in late April economic indicators were released showing that despite considerable economic growth, any inflationary pressures, particularly those associated with wage increases, were well-contained and of no immediate concern. Fixed- income bond prices staged a significant rally during the last week of April with long-term US Treasury bond yields falling nearly 20 basis points to end the month at 6.95%. Municipal bond yields, as measured by the Bond Buyer Revenue Bond Index, declined nearly 15 basis points to stand at 6.01% by April 30, 1997. As in recent quarters, the relative stability of long-term tax- exempt bond yields was supported by low levels of new municipal bond issuance. Over the past six months, approximately $90 billion in long-term tax-exempt bonds was underwritten, a decline of more than 6% versus the corresponding period a year earlier. During the three- month period ended April 30, 1997, $41 billion in new long-term municipal bonds was issued, also a 6% decline in issuance as compared to the three months ended April 30, 1996. Overall investor demand has remained strong, particularly from property and casualty insurance companies and individual retail investors. In recent years, investor demand has increased whenever tax-exempt bond yields have approached or exceeded the 6% level as they have in the past few months. Additionally, in recent months much of the new bond issuance was dominated by a number of larger issues. These included $710 million in New York City water bonds, $600 million in state of California bonds, $1 billion in New York City general obligation bonds, $435 million in Dade County, Florida water and sewer revenue bonds, $450 million in Puerto Rico Electric Authority issues, and $930 million in Port Authority of New York and New Jersey issues. These bonds have typically been issued in states with relatively high state income taxes and consequently generally were underwritten at yields that were relatively unattractive to residents in other states. This has exacerbated the general decline in overall issuance in recent years, making the decrease in supply even more dramatic for general market investors. The present economic situation remains nearly ideal. The domestic economy continues to grow steadily with little, if any, sign of a resurgence in inflation. Recent economic growth generated considerable unexpected tax revenues for the Federal government. Forecasts for the 1997 Federal fiscal deficit were reduced to under $100 billion, a level not seen since the early 1980s. Such a reduced Federal deficit enhances the prospect for a balanced Federal budget. All of these factors support a scenario of steady, or even falling, interest rates in the coming years. Present annual estimates of future municipal bond issuance remain centered around $175 billion, indicating that the current relative scarcity of tax-exempt bonds should continue for at least the remainder of the year. Should interest rates begin to decline later this year, either as the result of a balanced Federal budget or continued benign inflation, investors are unlikely to be able to purchase long-term municipal bonds at their currently attractive levels. Portfolio Strategy During the past six months we maintained a neutral-to-slightly constructive investment strategy that concentrated on providing an attractive level of tax-exempt income while seeking to preserve the Fund's net asset value. The everchanging perception on the state of the economy, and the need for possible further monetary policy tightening by the FRB, caused large swings in interest rates over this time period. We have strived to take advantage of market fluctuations to seek to enhance the Fund's total return. We purchased interest rate- sensitive bonds in the middle of January when tax-exempt interest rates increased to attractive levels. However, we subsequently sold these issues after the bond market rally in early February. Looking forward, we expect the FRB to continue raising short-term interest rates, which is expected to place negative pressure on long-term tax- exempt interest rates. We anticipate maintaining a neutral portfolio strategy until there are signs that the economy is slowing to below trend growth, thereby reducing the threat of rising inflation. The yield on the Fund's Auction Market Preferred Shares has been trading within a narrow range between 3.25%--3.65%. Over the past few weeks, the interest rate on the Preferred Shares has been greater than 4% in response to pressures from seasonal corporate and individual tax payments. This interest rate has started to decline, but is expected to return to normal levels shortly. Leverage continues to benefit the Common Shareholders by significantly augmenting their yield. However, should the spread between short- term and long-term tax-exempt interest rates narrow, the benefits of leverage will decline and the yield on the Fund's Common Shares will be reduced. (For a complete explanation of the benefits and risks of leveraging, see page 1 of this report to shareholders.) In Conclusion We appreciate your ongoing interest in MuniVest Florida Fund, and we look forward to serving your investment needs in the months and years to come. Sincerely, (Arthur Zeikel) Arthur Zeikel President (Vincent R. Giordano) Vincent R. Giordano Senior Vice President (Robert A. DiMella) Robert A. DiMella Vice President and Portfolio Manager May 27, 1997 Portfolio Abbreviations To simplify the listings of MuniVest Florida Fund's portfolio holdings in the Schedule of Investments, we have abbreviated the names of many of the securities according to the list below and at right. AMT Alternative Minimum Tax (subject to) COP Certificates of Participation HFA Housing Finance Agency IDA Industrial Development Authority IDR Industrial Development Revenue Bonds PCR Pollution Control Revenue Bonds S/F Single-Family UT Unlimited Tax VRDN Variable Rate Demand Notes SCHEDULE OF INVESTMENTS (in Thousands)
S&P Moody's Face Value STATE Ratings Ratings Amount Issue (Note 1a) Florida--96.5% AAA Aaa $ 5,000 Brevard County, Florida, IDR (NUI Corporation Project), AMT, 6.40% due 10/01/2024 (b) $ 5,200 AAA NR* 1,400 Broward County, Florida, HFA, Revenue Bonds, AMT, Series A, 7.35% due 3/01/2023 (e)(f) 1,467 AAA Aaa 8,200 Citrus County, Florida, PCR, Refunding (Florida Power Corp.-- Crystal River), Series B, 6.35% due 2/01/2022 (c) 8,562 AAA Aaa 1,125 Dade County, Florida, Educational Facilities Authority, Exchangeable Revenue Bonds (University of Miami), 7.65% due 4/01/2010 (c) 1,228 AA- Aa3 2,250 Dade County, Florida, IDA, Solid Waste Disposal Revenue Bonds (Florida Power & Light Co. Project), AMT, 7.15% due 2/01/2023 2,432 Dade County, Florida, Professional Sports Franchise Facilities, Tax Revenue Bonds (c): AAA Aaa 1,055 5.87%** due 10/01/2021 251 AAA Aaa 2,000 5.90%** due 10/01/2028 311 AAA Aaa 4,710 Dade County, Florida, Seaport Revenue Bonds, UT, 6.50% due 10/01/2001 (b)(h) 5,077 AAA Aaa 8,225 Dade County, Florida, Water and Sewer System Revenue Bonds, 5.25% due 10/01/2021 (d) 7,719 Escambia County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT (f): AAA Aaa 3,000 Refunding (Multi-County Program), 7% due 4/01/2028 (e) 3,162 NR* Aaa 2,230 Series A, 7.40% due 10/01/2023 2,338 BBB Baa1 1,920 Escambia County, Florida, PCR (Champion International Corporation Project), AMT, 6.90% due 8/01/2022 2,035 NR* Aaa 1,770 Florida HFA, Home Ownership Revenue Bonds, AMT, Series G1, 7.90% due 3/01/2022 (f) 1,859 Florida State Board of Education, Public Education Revenue Bonds (Capital Outlay) (h): AAA Aaa 6,430 Series A, 6.75% due 6/01/2001 6,960 AAA Aaa 3,500 Series B, 6.70% due 6/01/2001 3,782 AAA Aaa 2,340 Florida State Department of General Services Revenue Bonds (Division Facilities Management), Series B, 5.25% due 9/01/2026 (b) 2,178 AAA Aaa 2,000 Florida State Division Board of Finance, Department of General Services Revenue Bonds (Department of Natural Resource Preservation), Series 2000-A, 6.75% due 7/01/2013 (b) 2,155 NR* NR* 4,700 Florida State Mid-Bay Bridge Authority, Crossover Revenue Refunding Bonds, Series A, 6.10% due 10/01/2022 4,706 AAA Aaa 5,900 Florida State Turnpike Authority, Turnpike Revenue Refunding Bonds, Series A, 5% due 7/01/2019 (d) 5,342 AA Aa 6,925 Gainesville, Florida, Utilities System Revenue Bonds, Series A, 6.50% due 10/01/2002 (h) 7,567 A A 5,400 Hillsborough County, Florida, Capital Improvement Revenue Bonds (County Center Project), Second Series, 6.75% due 7/01/2002 (h) 5,935 AAA Aaa 3,000 Hillsborough County, Florida, School Board, COP (Master Lease Program), 5.25% due 7/01/2017 (c) 2,839 AAA Aaa 2,000 Hillsborough County, Florida, Utility Revenue Refunding Bonds, Series B, 6.50% due 8/01/2016 (c) 2,144 AAA Aaa 5,000 Jacksonville, Florida, District Water and Sewer Revenue Bonds, 5% due 10/01/2020 (c) 4,539 AA+ NR* 2,000 Jacksonville, Florida, Health Facilities Authority, Hospital Revenue Refunding Bonds (Saint Luke's Hospital Association Project), 7.125% due 11/15/2020 2,178 NR* Baa1 345 Jacksonville, Florida, Health Facilities Authority, IDR (National Benevolent Cypress Village), Series A, 6.125% due 12/01/2016 345 AAA Aaa 1,320 Lakeland, Florida, Hospital System Revenue Bonds (Lakeland Regional Medical Center), Series A, 5.25% due 11/15/2016 (c) 1,246 NR* Aaa 3,250 Manatee County, Florida, HFA, S/F Mortgage Revenue Bonds, AMT, Sub-Series 2, 7.75% due 5/01/2026 (f) 3,591 BBB+ Baa 2,890 Nassau County, Florida, PCR, Refunding (ITT Rayonier, Inc. Project), 6.20% due 7/01/2015 2,914 AAA Aaa 1,890 Palm Beach County, Florida, Criminal Justice Facilities Revenue Bonds, 7.20% due 6/01/2015 (d) 2,233 NR* VMIG1++ 600 Palm Beach County, Florida, Water and Sewer Revenue Bonds, VRDN, 4.60% due 10/01/2011 (a) 600 AAA Aaa 1,200 Port Everglades Authority, Florida, Port Improvement Revenue Bonds, 7.125% due 11/01/2016 (g) 1,372 A1+ VMIG1++ 100 Saint Lucie County, Florida, PCR, Refunding (Florida Power & Light Co. Project), VRDN, 4.45% due 1/01/2026 (a) 100 AA- Aa3 1,000 Saint Lucie County, Florida, Solid Waste Disposal Revenue Bonds (Florida Power & Light Co. Project), AMT, 6.70% due 5/01/2027 1,065 AAA Aaa 900 Sarasota County, Florida, Utility System Revenue Bonds, 5.60% due 10/01/2017 (d) 892 AAA Aaa 5,000 South Broward Hospital District, Florida, Hospital Revenue Refunding Bonds, 5.25% due 5/01/2021 (c) 4,665 Tampa, Florida, Utility Tax, Capital Appreciation, Sales Tax Revenue Bonds (b): AAA Aaa 2,000 6.19%** due 4/01/2021 491 AAA Aaa 2,800 6.22%** due 10/01/2021 667 NR* Aaa 2,000 Tampa, Florida, Water and Sewer Revenue Refunding Bonds (SBMRS), 6.60% due 10/01/2002 (d)(h) 2,182 Total Investments (Cost--$110,674)--96.5% 114,329 Other Assets Less Liabilities--3.5% 4,120 -------- Net Assets--100.0% $118,449 ======== (a)The interest rate is subject to change periodically based upon prevailing market rates. The interest rate shown is the rate in effect at April 30, 1997. (b)AMBAC Insured. (c)MBIA Insured. (d)FGIC Insured. (e)FNMA Collateralized. (f)GNMA Collateralized. (g)Escrowed to Maturity. (h)Prerefunded. *Not Rated. **Represents a zero coupon bond; the interest rate shown is the effective yield at the time of purchase by the Fund. ++Highest short-term rating by Moody's Investors Service, Inc. See Notes to Financial Statements.
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
As of April 30, 1997 Assets: Investments, at value (identified cost--$110,674,146) (Note 1a) $114,328,638 Cash 62,019 Receivables: Securities sold $ 2,547,936 Interest 1,702,691 4,250,627 ------------ Deferred organization expenses (Note 1e) 7,999 Prepaid expenses and other assets 6,840 ------------ Total assets 118,656,123 ------------ Liabilities: Payables: Dividends to shareholders (Note 1f) 89,300 Investment adviser (Note 2) 48,294 137,594 ------------ Accrued expenses and other liabilities 69,199 ------------ Total liabilities 206,793 ------------ Net Assets: Net assets $118,449,330 ============ Capital: Capital Shares (unlimited number of shares of beneficial interest authorized) (Note 4): Preferred Shares, par value $.05 per share (1,600 shares of AMPS* issued and outstanding at $25,000 per share liquidation preference) $ 40,000,000 Common Shares, par value $.10 per share (5,978,662 shares issued and outstanding) $ 597,866 Paid-in capital in excess of par 83,198,076 Undistributed investment income--net 436,169 Accumulated realized capital losses on investments--net (Note 5) (9,437,273) Unrealized appreciation on investments--net 3,654,492 ------------ Total--Equivalent to $13.12 net asset value per Common Share (market price--$12.50) 78,449,330 ------------ Total capital $118,449,330 ============ *Auction Market Preferred Shares. See Notes to Financial Statements.
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1997 Investment Interest and amortization of premium and discount earned $ 3,445,881 Income (Note 1d): Expenses: Investment advisory fees (Note 2) $ 296,542 Commission fees (Note 4) 49,136 Professional fees 33,562 Accounting services (Note 2) 22,247 Printing and shareholder reports 15,789 Transfer agent fees 15,591 Trustees' fees and expenses 10,953 Listing fees 8,158 Custodian fees 5,213 Amortization of organization expenses (Note 1e) 2,594 Pricing fees 2,384 Other 7,980 ------------ Total expenses 470,149 ------------ Investment income--net 2,975,732 ------------ Realized & Realized gain on investments--net 151,923 Unrealized Gain Change in unrealized appreciation on investments--net (1,735,377) (Loss) on ------------ Investments--Net Net Increase in Net Assets Resulting from Operations $ 1,392,278 (Notes 1b, 1d & 3): ============ See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
For the Six For the Months Ended Year Ended April 30, October 31, Increase (Decrease) in Net Assets: 1997 1996 Operations: Investment income--net $ 2,975,732 $ 5,912,407 Realized gain on investments--net 151,923 2,150,848 Change in unrealized appreciation/depreciation on investments--net (1,735,377) (779,005) ------------ ------------ Net increase in net assets resulting from operations 1,392,278 7,284,250 ------------ ------------ Dividends to Investment income--net: Shareholders Common Shares (2,370,827) (4,543,484) (Note 1f): Preferred Shares (629,728) (1,378,160) Net decrease in net assets resulting from dividends to shareholders (3,000,555) (5,921,644) ------------ ------------ Net Assets: Total increase (decrease) in net assets (1,608,277) 1,362,606 Beginning of period 120,057,607 118,695,001 ------------ ------------ End of period* $118,449,330 $120,057,607 ============ ============ *Undistributed investment income--net $ 436,169 $ 460,992 ============ ============ See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
For the The following per share data and ratios have Period been derived from information provided in the For the Six Apr. 30, financial statements. Months Ended 1993++ to April 30, For the Year Ended October 31, Oct. 31, Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993 Per Share Net asset value, beginning of period $ 13.39 $ 13.16 $ 11.82 $ 14.99 $ 14.18 Operating -------- -------- -------- -------- -------- Performance: Investment income--net .50 .99 1.01 1.00 .49 Realized and unrealized gain (loss) on investments--net (.26) .23 1.34 (3.05) .90 -------- -------- -------- -------- -------- Total from investment operations .24 1.22 2.35 (2.05) 1.39 -------- -------- -------- -------- -------- Less dividends and distributions to Common Shareholders: Investment income--net (.40) (.76) (.76) (.84) (.35) Realized gain on investments--net -- -- -- (.11) -- -------- -------- -------- -------- -------- Total dividends and distributions to Common Shareholders (.40) (.76) (.76) (.95) (.35) -------- -------- -------- -------- -------- Capital charge resulting from issuance of Common Shares -- -- -- -- (.04) -------- -------- -------- -------- -------- Effect of Preferred Share activity:++++ Dividends to Preferred Shareholders: Investment income--net (.11) (.23) (.25) (.15) (.07) Realized gain on investments--net -- -- -- (.02) -- Capital charge resulting from issuance of Preferred Shares -- -- -- -- (.12) -------- -------- -------- -------- -------- Total effect of Preferred Share activity (.11) (.23) (.25) (.17) (.19) -------- -------- -------- -------- -------- Net asset value, end of period $ 13.12 $ 13.39 $ 13.16 $ 11.82 $ 14.99 ======== ======== ======== ======== ======== Market price per share, end of period $ 12.50 $ 12.75 $ 11.50 $ 10.00 $ 15.00 ======== ======== ======== ======== ======== Total Investment Based on market price per share 1.10%+++ 17.87% 22.93% (28.20%) 2.37%+++ Return:** ======== ======== ======== ======== ======== Based on net asset value per share 1.04%+++ 8.17% 19.02% (15.07%) 8.22%+++ ======== ======== ======== ======== ======== Ratios to Average Expenses, net of reimbursement .79%* .82% .85% .75% .48%* Net Assets:*** ======== ======== ======== ======== ======== Expenses .79%* .82% .85% .78% .83%* ======== ======== ======== ======== ======== Investment income--net 5.01%* 4.96% 5.38% 4.94% 4.85%* ======== ======== ======== ======== ======== Supplemental Net assets, net of Preferred Shares, end Data: of period (in thousands) $ 78,449 $ 80,058 $ 78,695 $ 70,674 $ 89,438 ======== ======== ======== ======== ======== Preferred Shares outstanding, end of period (in thousands) $ 40,000 $ 40,000 $ 40,000 $ 40,000 $ 40,000 ======== ======== ======== ======== ======== Portfolio turnover 42.47% 116.82% 92.54% 100.98% 23.23% ======== ======== ======== ======== ======== Leverage: Asset coverage per $1,000 $ 2,961 $ 3,001 $ 2,967 $ 2,767 $ 3,236 ======== ======== ======== ======== ======== Dividends Investment income--net $ 394 $ 861 $ 940 $ 569 $ 245 Per Share on ======== ======== ======== ======== ======== Preferred Shares Outstanding:++++++ *Annualized. **Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales loads. ***Do not reflect the effect of dividends to Preferred Shareholders. ++Commencement of Operations. ++++The Fund's Preferred Shares were issued on June 1, 1993. ++++++Dividends per share have been adjusted to reflect a two- for-one stock split that occurred on December 1, 1994. +++Aggregate total investment return. See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS 1. Significant Accounting Policies: MuniVest Florida Fund (the "Fund") is registered under the Investment Company Act of 1940 as a non-diversified, closed-end management investment company. 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 determines and makes available for publication the net asset value of its Common Shares on a weekly basis. The Fund's Common Shares are listed on the New York Stock Exchange under the symbol MVS. The following is a summary of significant accounting policies followed by the Fund. (a) Valuation of investments--Municipal bonds are traded primarily in the over-the-counter markets and are valued at the most recent bid price or yield equivalent as obtained by the Fund's pricing service from dealers that make markets in such securities. Financial futures contracts and options thereon, which are traded on exchanges, are valued at their closing prices as of the close of such exchanges. Options, which are traded on exchanges, are valued at their last sale price as of the close of such exchanges or, lacking any sales, at the last available bid price. Securities with remaining maturities of sixty days or less are valued at amortized cost, which approximates market value. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of the Board of Trustees of the Fund, 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 Trustees. (b) Derivative financial instruments--The Fund may engage in various portfolio strategies to seek to increase its return by hedging its portfolio against adverse movements in the debt markets. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract. * Financial futures contracts--The Fund may purchase or sell interest rate futures contracts and options on such futures contracts for the purpose of hedging the market risk on existing securities or the intended purchase of securities. Futures contracts are contracts for delayed delivery of securities at a specific future date and at a specific price or yield. Upon entering into a contract, the Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recorded by the Fund as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. * Options--The Fund is authorized to write covered call options and purchase put options. When the Fund writes an option, an amount equal to the premium received by the Fund is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked to market to reflect the current market value of the option written. When a security is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the security acquired, or deducted from (or added to) the proceeds of the security sold. When an option expires (or the Fund enters into a closing transaction), the Fund realizes a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premium paid or received). Written and purchased options are non-income producing investments. (c) Income taxes--It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no Federal income tax provision is required. (d) Security transactions and investment income--Security transactions are recorded on the dates the transactions are entered into (the trade dates). Interest income is recognized on the accrual basis. Discounts and market premiums are amortized into interest income. Realized gains and losses on security transactions are determined on the identified cost basis. (e) Deferred organization expenses--Deferred organization expenses are amortized on a straight-line basis over a five-year period. (f) Dividends and distributions--Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. 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. FAM is responsible for the management of the Fund's portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Fund. For such services, the Fund pays a monthly fee at an annual rate of 0.50% of the Fund's average weekly net assets. Accounting services are provided to the Fund by FAM at cost. Certain officers and/or trustees of the Fund are officers and/or directors of FAM, PSI, and/or ML & Co. 3. Investments: Purchases and sales of investments, excluding short-term securities, for the six months ended April 30, 1997 were $49,929,902 and $48,722,633, respectively. Net realized and unrealized gains as of April 30, 1997 were as follows: Realized Unrealized Gains Gains Long-term investments $ 151,923 $3,654,492 --------- ---------- Total $ 151,923 $3,654,492 ========= ========== As of April 30, 1997, net unrealized appreciation for Federal income tax purposes aggregated $3,654,492, of which $3,969,299 related to appreciated securities and $314,807 related to depreciated securities. The aggregate cost of investments at April 30, 1997 for Federal income tax purposes was $110,674,146. 4. Capital Shares Transactions: The Fund is authorized to issue an unlimited number of shares of beneficial interest, including Preferred Shares, par value $.10 per share, all of which were initially classified as Common Shares. The Board of Trustees is authorized, however, to reclassify any unissued shares of capital without approval of holders of Common Shares. Common Shares For the six months ended April 30, 1997, shares issued and outstanding remained constant at 5,978,662. At April 30, 1997, total paid-in capital amounted to $83,795,942. Preferred Shares Auction Market Preferred Shares ("AMPS") are Preferred Shares of the Fund that entitle their holders to receive cash dividends at an annual rate that may vary for the successive dividend periods. The yield in effect at April 30, 1997 was 4.00%. For the six months ended April 30, 1997, there were 1,600 AMPS authorized, issued and outstanding with a liquidation preference of $25,000 per share. The Fund pays commissions to certain broker-dealers at the end of each auction at an annual rate ranging from 0.25% to 0.375%, calculated on the proceeds of each auction. For the six months ended April 30, 1997, Merrill Lynch, Pierce, Fenner & Smith Inc., an affiliate of FAM, earned $27,110 as commissions. 5. Capital Loss Carryforward: At October 31, 1996, the Fund had a capital loss carryforward of approximately $7,746,000, of which $5,492,000 expires in 2002 and $2,254,000 expires in 2003. This amount will be available to offset like amounts of any future taxable gains. 6. Subsequent Event: On May 9, 1997, the Fund's Board of Trustees declared an ordinary income dividend to Common Shareholders in the amount of $.062823 per share, payable on May 29, 1997 to shareholders of record as of May 19, 1997. -----END PRIVACY-ENHANCED MESSAGE-----