-----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, NYSkOJhVRBUWB5rk+REBl1M3EFqL5qEpDtLZl1fUYoXTgkykf3+wZOm2Q4xnyppC fYPcGioumKxWhSfE9KoEUQ== 0001193805-08-001866.txt : 20080807 0001193805-08-001866.hdr.sgml : 20080807 20080807113720 ACCESSION NUMBER: 0001193805-08-001866 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20080531 FILED AS OF DATE: 20080807 DATE AS OF CHANGE: 20080807 EFFECTIVENESS DATE: 20080807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLACKROCK MUNIASSETS FUND, INC. CENTRAL INDEX KEY: 0000901243 IRS NUMBER: 223239638 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-07642 FILM NUMBER: 08997240 BUSINESS ADDRESS: STREET 1: 100 BELLEVUE PARKWAY CITY: WILMINGTON STATE: DE ZIP: 19809 BUSINESS PHONE: 800-441-7762 MAIL ADDRESS: STREET 1: 100 BELLEVUE PARKWAY CITY: WILMINGTON STATE: DE ZIP: 19809 FORMER COMPANY: FORMER CONFORMED NAME: MUNIASSETS FUND INC DATE OF NAME CHANGE: 19930714 FORMER COMPANY: FORMER CONFORMED NAME: MUNIINCOME FUND INC DATE OF NAME CHANGE: 19930517 N-CSR 1 e604068_ncsr-muniassets.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-07642 Name of Fund: BlackRock MuniAssets Fund, Inc. (MUA) Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809 Name and address of agent for service: Donald C. Burke, Chief Executive Officer, BlackRock MuniAssets Fund, Inc., 800 Scudders Mill Road, Plainsboro, NJ 08536. Mailing address: P.O. Box 9011, Princeton, NJ 08543-9011 Registrant's telephone number, including area code: (800) 882-0052, Option 4 Date of fiscal year end: 05/31/2008 Date of reporting period: 06/01/2007 - 05/31/2008 Item 1 - Report to Stockholders EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS BlackRock MuniAssets BLACKROCK Fund, Inc. (MUA) ANNUAL REPORT | MAY 31, 2008 NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Table of Contents ================================================================================ Page - -------------------------------------------------------------------------------- A Letter to Shareholders ............................................ 3 Annual Report: Fund Summary ........................................................ 4 The Benefits and Risks of Leveraging ................................ 5 Swap Agreements ..................................................... 5 Financial Statements: Schedule of Investments ........................................... 6 Statement of Assets and Liabilities ............................... 11 Statement of Operations ........................................... 11 Statements of Changes in Net Assets ............................... 12 Financial Highlights ................................................ 13 Notes to Financial Statements ....................................... 14 Report of Independent Registered Public Accounting Firm ............. 18 Important Tax Information (Unaudited) ............................... 18 Disclosure of Investment Advisory Agreement and Subadvisory Agreement 19 Automatic Dividend Reinvestment Plan ................................ 23 Officers and Directors .............................................. 24 Additional Information .............................................. 28 2 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 A Letter to Shareholders Dear Shareholder For much of the reporting period, investors grappled with the repercussions of the credit crisis that surfaced last summer, and with the effects of a weakening economy and surging energy and food prices. These factors were offset by the positive impact from robust export activity, strength in the non-financial corporate sector and monetary and fiscal stimuli. Amid the market turbulence, the Federal Reserve Board (the "Fed") initiated a series of moves to restore liquidity and bolster financial market stability. Since September 2007, the central bank slashed the target federal funds rate 325 basis points (3.25%), bringing the rate to 2.0% as of period-end. Also of significance were its other policy decisions, which included extending use of the discount window to broker-dealers and investment banks and backstopping the rescue of ill-fated Bear Stearns. Notably, on April 30, the Fed dropped previous references to downside growth risks and added more emphasis on inflationary pressures, indicating the central bankers have likely concluded the current cycle of monetary easing. Nevertheless, the Fed's response to the financial crisis helped to ease credit turmoil and investor anxiety. Since hitting a low point on March 17, following the collapse of Bear Stearns, stocks appreciated 10% (through May 30). Most international markets, which had outperformed U.S. stocks for some time, saw a reversal in that trend, as the troubled credit situation and downward pressures on growth fanned recession fears. In fixed income markets, Treasury securities rallied (yields fell as prices correspondingly rose), as a broad "flight-to-quality" theme persisted. The yield on 10-year Treasury issues, which touched 5.30% in June 2007 (its highest level in five years), fell to a low of 3.34% in March 2008 before rising to 4.06% by May 31 as investors grew more risk tolerant and shifted out of Treasury issues in favor of stocks and other high-quality fixed income sectors. Tax-exempt issues underperformed throughout most of the reporting period, pressured by problems among municipal bond insurers and the freeze in the market for auction rate securities. However, the final two months saw a firmer tone in the municipal market, as investors took advantage of unusually high yields. On the whole, results for the major benchmark indexes generally reflected heightened investor risk aversion:
Total Returns as of May 31, 2008 6-month 12-month =============================================================================================================== U.S. equities (S&P 500 Index) (4.47%) (6.70%) - --------------------------------------------------------------------------------------------------------------- Small cap U.S. equities (Russell 2000 Index) (1.87) (10.53) - --------------------------------------------------------------------------------------------------------------- International equities (MSCI Europe, Australasia, Far East Index) (5.21) (2.53) - --------------------------------------------------------------------------------------------------------------- Fixed income (Lehman Brothers U.S. Aggregate Index) 1.49 6.89 - --------------------------------------------------------------------------------------------------------------- Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) 1.44 3.87 - --------------------------------------------------------------------------------------------------------------- High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Capped Index) 1.81 (1.08) - ---------------------------------------------------------------------------------------------------------------
Past performance is no guarantee of future results. Index performance shown for illustrative purposes only. You cannot invest directly in an index. As you navigate today's volatile markets, we encourage you to review your investment goals with your financial professional and to make portfolio changes, as needed. For more up-to-date commentary on the economy and financial markets, we invite you to visit www.blackrock.com/funds. As always, we thank you for entrusting BlackRock with your investment assets, and we look forward to continuing to serve you in the months and years ahead. Sincerely, /s/ Rob Kapito Rob Kapito President, BlackRock Advisors, LLC 3 THIS PAGE NOT PART OF YOUR FUND REPORT Fund Summary as of May 31, 2008 Investment Objective BlackRock MuniAssets Fund, Inc. (MUA) (the "Fund") seeks to provide shareholders with current income exempt from federal income taxes by investing primarily in a portfolio of medium-to-lower grade or unrated municipal obligations the interest on which, in the opinion of bond counsel to the issuer, is exempt from federal income taxes. Performance For the 12 months ended May 31, 2008, the Fund returned (7.12%) based on market price and (1.90%) based on net asset value ("NAV"). For the same period, the closed-end Lipper High Yield Municipal Debt Funds category posted an average return of (4.75%) on a NAV basis. All returns reflect reinvestment of dividends. The Fund's outperformance during the period was attributed largely to a bias towards higher-quality issues, which helped shield it from the stress experienced in the high yield municipal sector as a result of substantial widening in credit spreads. In addition, a strong emphasis on high-quality, short-dated prerefunded bonds proved beneficial, as the municipal yield curve steepened sharply over the last 12 months. The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. Fund Information Symbol on New York Stock Exchange .......................... MUA Initial Offering Date ...................................... June 25, 1993 Yield on Closing Market Price as of May 31, 2008 ($13.35)1 . 6.07% Tax Equivalent Yield2 ...................................... 9.34% Current Monthly Distribution per share of Common Stock3 .... $0.0675 Current Annualized Distribution per share of Common Stock3 . $ 0.810 Leverage as of May 31, 20084 ............................... 2% - -------------------------------------------------------------------------------- 1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. 2 Tax equivalent yield assumes the maximum federal tax rate of 35%. 3 The distribution is not constant and is subject to change. 4 As a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to tender option bond trusts ("TOBs")) minus the sum of accrued liabilities. The table below summarizes the changes in the Fund's market price and net asset value per share: - -------------------------------------------------------------------------------- 5/31/08 5/31/07 Change High Low - -------------------------------------------------------------------------------- Market Price ................ $13.35 $15.29 (12.69%) $15.31 $12.28 Net Asset Value ............. $12.79 $13.87 (7.79%) $13.87 $12.63 - -------------------------------------------------------------------------------- The following charts show the portfolio composition and credit quality allocations of the Fund's long-term investments: Portfolio Composition Sector 5/31/08 5/31/07 - -------------------------------------------------------------------------------- Hospital ................................................... 27% 27% Industrial & Pollution Control ............................. 25 31 City, County, State ........................................ 13 13 Transportation ............................................. 8 7 Tax Revenue ................................................ 7 8 Power ...................................................... 7 3 Housing .................................................... 5 1 Education .................................................. 4 6 Tobacco .................................................... 3 3 Water & Sewer .............................................. 1 1 - -------------------------------------------------------------------------------- Credit Quality Allocations5 Credit Rating 5/31/08 5/31/07 - -------------------------------------------------------------------------------- AAA/Aaa .................................................... 12% 10% AA/Aa ...................................................... 4 1 A/A ........................................................ 7 3 BBB/Baa .................................................... 15 22 BB/Ba ...................................................... 10 8 B/B ........................................................ 5 6 CCC/Caa .................................................... 4 5 Not Rated6 ................................................. 43 45 - -------------------------------------------------------------------------------- 5 Using the higher of Standard & Poor's or Moody's Investors Service ratings. 6 The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of May 31, 2008 and May 31, 2007, the market value of these securities was $12,388,252 representing 5% and $13,264,602 representing 5%, respectively, of the Fund's long-term investments. 4 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 The Benefits and Risks of Leveraging The Fund utilizes leverage to seek to enhance the yield and NAV. However, these objectives cannot be achieved in all interest rate environments. The Fund may from time to time leverage its assets through the use of tender option bond ("TOB") programs. In a typical TOB program, the Fund transfers one or more municipal bonds to a TOB trust, which issues short-term variable rate securities to third-party investors and a residual interest to the Fund. The cash received by the TOB trust from the issuance of the short-term securities (less transaction expenses) is paid to the Fund, which invests the cash in additional portfolio securities. The distribution rate of the short-term securities is reset periodically (typically every seven days) through a remarketing of the short-term securities. Any income earned on the bonds in the TOB trust, net of expenses incurred by the TOB trust, that is not paid to the holders of the short-term securities is paid to the Fund. In connection with managing the Fund's assets, the Fund's investment advisor may at any time retrieve the bonds out of the TOB trust typically within seven days. TOB investments generally will provide the Fund with economic benefits in periods of declining short-term interest rates, but expose the Fund to risks during periods of rising short-term interest rates. Additionally, fluctuations in the market value of municipal securities deposited into the TOB trust may adversely affect the Fund's NAVs per share. (See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOB trusts.) The Fund anticipates that its total economic leverage, which includes TOBs, will not exceed 5% of its total managed assets. As of May 31, 2008, the Fund had economic leverage of 2% of its total managed assets. Swap Agreements The Fund may invest in swap agreements, which are over-the-counter contracts in which one party agrees to make periodic payments based on the change in market value of a specified bond, basket of bonds, or index in return for periodic payments based on a fixed or variable interest rate or the change in market value of a different bond, basket of bonds or index. Swap agreements may be used to obtain exposure to a bond or market without owning or taking physical custody of securities. Swap agreements involve the risk that the party with whom the Fund has entered into a swap will default on its obligation to pay the Fund and the risk that the Fund will not be able to meet its obligations to pay the other party to the agreement. BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 5 Schedule of Investments May 31, 2008 (Percentages shown are based on Net Assets) Par Municipal Bonds (000) Value =============================================================================== Alabama -- 0.6% Tuscaloosa, Alabama, Special Care Facilities Financing Authority, Residential Care Facility Revenue Bonds (Capstone Village, Inc. Project), Series A, 5.875%, 8/01/36 $ 1,820 $ 1,564,072 =============================================================================== Alaska -- 0.3% Alaska Industrial Development and Export Authority Revenue Bonds (Williams Lynxs Alaska Cargoport), AMT, 7.80%, 5/01/14 770 799,183 =============================================================================== Arizona -- 8.5% Coconino County, Arizona, Pollution Control Corporation Revenue Refunding Bonds (Tucson Electric Power -- Navajo): AMT, Series A, 7.125%, 10/01/32 3,000 3,035,850 Series B, 7%, 10/01/32 2,500 2,525,925 Maricopa County, Arizona, IDA, Education Revenue Bonds (Arizona Charter Schools Project 1), Series A, 6.625%, 7/01/20 1,625 1,478,929 Maricopa County, Arizona, IDA, M/F Housing Revenue Bonds (Sun King Apartments Project), Series A, 6.75%, 5/01/31 1,615 1,581,731 Phoenix, Arizona, IDA, Airport Facility, Revenue Refunding Bonds (America West Airlines Inc. Project), AMT, 6.30%, 4/01/23 4,800 4,039,200 Pima County, Arizona, IDA, Education Revenue Bonds (Arizona Charter Schools Project), Series E, 7.25%, 7/01/31 1,390 1,437,316 Pima County, Arizona, IDA, Education Revenue Refunding Bonds: (Arizona Charter Schools Project), Series O, 5.25%, 7/01/31 500 429,500 (Arizona Charter Schools Project II), Series A, 6.75%, 7/01/11 (a) 415 462,476 (Arizona Charter Schools Project II), Series A, 6.75%, 7/01/31 675 682,783 Salt Verde Financial Corporation, Arizona, Senior Gas Revenue Bonds: 5%, 12/01/32 2,840 2,555,034 5%, 12/01/37 3,975 3,518,034 Show Low, Arizona, Improvement District Number 5, Special Assessment Bonds, 6.375%, 1/01/15 1,000 1,009,140 ------------ 22,755,918 =============================================================================== California -- 2.5% California State, Various Purpose, GO: 5.25%, 11/01/25 1,900 1,967,792 5.50%, 11/01/33 1,300 1,341,041 Fontana, California, Special Tax, Refunding (Community Facilities District Number 22 -- Sierra), 6%, 9/01/34 1,320 1,243,559 Southern California Public Power Authority, Natural Gas Project Number 1 Revenue Bonds, Series A, 5%, 11/01/29 2,085 2,047,262 ------------ 6,599,654 =============================================================================== Colorado -- 5.0% Colorado Health Facilities Authority, Revenue Refunding Bonds (Christian Living Communities Project), Series A, 5.75%, 1/01/26 650 601,230 Denver, Colorado, City and County Airport Revenue Bonds, AMT, Series D, 7.75%, 11/15/13 (b) 1,805 2,015,697 Elk Valley, Colorado, Public Improvement Revenue Bonds (Public Improvement Fee): Series A, 7.10%, 9/01/14 1,430 1,492,977 Series A, 7.30%, 9/01/22 2,095 2,141,781 Series B, 7.45%, 9/01/31 275 277,464 North Range Metropolitan District Number 1, Colorado, GO, 7.25%, 12/15/11 (a) 1,760 1,990,437 Plaza Metropolitan District Number 1, Colorado, Tax Allocation Revenue Bonds (Public Improvement Fees): 8%, 12/01/25 2,850 3,006,779 8.125%, 12/01/25 525 527,446 Southlands Metropolitan District Number 1, Colorado, GO, 7.125%, 12/01/14 (a) 1,170 1,418,321 ------------ 13,472,132 =============================================================================== Connecticut -- 2.4% Connecticut State Development Authority, Airport Facility Revenue Bonds (Learjet Inc. Project), AMT, 7.95%, 4/01/26 680 734,250 Connecticut State Development Authority, IDR (AFCO Cargo BDL-LLC Project), AMT, 8%, 4/01/30 3,490 3,606,566 Connecticut State, HFA, Housing Mortgage Finance Program Revenue Bonds, AMT, Sub-Series A-2, 5.15%, 5/15/38 2,250 2,170,125 ------------ 6,510,941 =============================================================================== Portfolio Abbreviations To simplify the listings of BlackRock MuniAssets Fund, Inc.'s portfolio holdings in the Schedule of Investments, the names of many of the securities have been abbreviated according to the list on the right. AMT Alternative Minimum Tax (subject to) EDA Economic Development Authority EDR Economic Development Reserve Bonds GO General Obligation Bonds HDA Housing Development Authority HFA Housing Finance Agency IDA Industrial Development Authority IDR Industrial Development Revenue Bonds M/F Multi-Family PCR Pollution Control Revenue Bonds VRDN Variable Rate Demand Notes See Notes to Financial Statements. 6 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 Schedule of Investments (continued) (Percentages shown are based on Net Assets) Par Municipal Bonds (000) Value =============================================================================== Florida -- 10.7% Capital Projects Finance Authority, Florida, Continuing Care Retirement Revenue Bonds (Glenridge on Palmer Ranch), Series A, 8%, 6/01/12 (a) $ 1,130 $ 1,352,971 Greater Orlando Aviation Authority, Florida, Airport Facilities Revenue Bonds (JetBlue Airways Corp.), AMT, 6.375%, 11/15/26 1,180 966,314 Halifax Hospital Medical Center, Florida, Hospital Revenue Refunding Bonds, Series A, 5%, 6/01/38 1,160 1,024,303 Harbor Bay, Florida, Community Development District, Capital Improvement Special Assessment Revenue Bonds, Series A, 7%, 5/01/33 490 510,502 Highlands County, Florida, Health Facilities Authority, Hospital Revenue Bonds (Adventist Health System), Series C, 5.25%, 11/15/36 1,195 1,174,171 Hillsborough County, Florida, IDA, Exempt Facilities Revenue Bonds (National Gypsum Company), AMT, Series A, 7.125%, 4/01/30 2,000 1,940,600 Hillsborough County, Florida, IDA, Hospital Revenue Bonds (Tampa General Hospital Project), 5%, 10/01/36 4,300 4,022,005 Jacksonville, Florida, Economic Development Commission, Health Care Facilities, Revenue Refunding Bonds (Florida Proton Therapy Institute), Series A, 6%, 9/01/17 1,000 1,009,780 Jacksonville, Florida, Economic Development Commission, IDR (Gerdau Ameristeel US, Inc.), AMT, 5.30%, 5/01/37 1,300 1,063,023 Lee County, Florida, IDA, IDR (Lee Charter Foundation), Series A, 5.375%, 6/15/37 2,620 2,129,929 Midtown Miami, Florida, Community Development District, Special Assessment Revenue Bonds, Series A, 6.25%, 5/01/37 3,255 3,014,163 Orlando, Florida, Urban Community Development District, Capital Improvement Special Assessment Bonds, Series A, 6.95%, 5/01/11 (a) 2,245 2,486,989 Santa Rosa Bay Bridge Authority, Florida, Revenue Bonds, 6.25%, 7/01/28 3,040 2,753,115 Sarasota County, Florida, Health Facilities Authority, Retirement Facility Revenue Refunding Bonds (Village on the Isle Project): 5.50%, 1/01/27 860 788,740 5.50%, 1/01/32 795 706,691 Tolomato Community Development District, Florida, Special Assessment Bonds, 6.65%, 5/01/40 2,680 2,607,292 Waterchase, Florida, Community Development District, Capital Improvement Revenue Bonds, Series A, 6.70%, 5/01/11 (a) 895 985,270 ------------ 28,535,858 =============================================================================== Georgia -- 4.4% Atlanta, Georgia, Tax Allocation Bonds: (Atlantic Station Project), 7.90%, 12/01/11 (a)(m) 3,000 3,530,130 (Princeton Lakes Project), 5.50%, 1/01/31 740 666,673 Brunswick and Glynn County, Georgia, Development Authority, First Mortgage Revenue Bonds (Coastal Community Retirement Corporation Project), Series A (c)(d)(e): 7.125%, 1/01/25 1,165 781,715 7.25%, 1/01/35 1,690 1,133,990 Clayton County, Georgia, Tax Allocation Bonds (Ellenwood Project), 7.50%, 7/01/33 2,375 2,276,699 Main Street Natural Gas, Inc., Georgia, Gas Project Revenue Bonds, Series A, 6.375%, 7/15/38 940 960,934 Rockdale County, Georgia, Development Authority Revenue Bonds (Visy Paper Project), AMT, Series A, 6.125%, 1/01/34 2,435 2,402,347 ------------ 11,752,488 =============================================================================== Idaho -- 0.4% Idaho Health Facilities Authority, Revenue Refunding Bonds (Valley Vista Care Corporation), Series A, 7.75%, 11/15/16 1,000 1,092,700 =============================================================================== Illinois -- 4.3% Chicago, Illinois, O'Hare International Airport, Special Facility Revenue Refunding Bonds (American Airlines Inc. Project), 5.50%, 12/01/30 4,140 2,243,383 Illinois State Finance Authority Revenue Bonds: (Clare At Water Tower Project), Series A, 6.125%, 5/15/38 2,950 2,708,838 (Landing At Plymouth Place Project), Series A, 6%, 5/15/37 600 542,358 (Monarch Landing, Inc. Project), Series A, 7%, 12/01/37 820 812,923 (Primary Health Care Centers Program), 6.60%, 7/01/24 685 658,360 Lincolnshire, Illinois, Special Service Area Number 1, Special Tax Bonds (Sedgebrook Project), 6.25%, 3/01/34 1,070 1,032,753 Lombard, Illinois, Public Facilities Corporation, First Tier Revenue Bonds (Conference Center and Hotel), Series A-1, 7.125%, 1/01/36 2,600 2,656,940 Village of Wheeling, Illinois, Revenue Bonds (North Milwaukee/Lake-Cook Tax Increment Financing (Redevelopment Project), 6%, 1/01/25 825 756,063 ------------ 11,411,618 =============================================================================== Indiana -- 2.8% Daviess County, Indiana, EDR (Daviess Community Hospital Project), Refunding, VRDN, 8%, 1/01/29 (f)(g) 5,000 5,000,000 Vanderburgh County, Indiana, Redevelopment Commission, Redevelopment District Tax Allocation Bonds, 5.25%, 2/01/31 1,200 1,159,800 Vigo County, Indiana, Hospital Authority Revenue Bonds (Union Hospital, Inc.): 5.70%, 9/01/37 615 543,469 5.75%, 9/01/42 765 673,223 ------------ 7,376,492 =============================================================================== Iowa -- 1.0% Iowa Finance Authority, Health Care Facilities, Revenue Refunding Bonds (Care Initiatives Project), 9.25%, 7/01/11 (a) 2,180 2,622,038 =============================================================================== Kansas -- 0.5% Wyandotte County, Kansas, Kansas City Unified Government Revenue Refunding Bonds (General Motors Corporation Project), 6%, 6/01/25 1,770 1,434,249 =============================================================================== See Notes to Financial Statements. BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 7 Schedule of Investments (continued) (Percentages shown are based on Net Assets) Par Municipal Bonds (000) Value =============================================================================== Kentucky -- 1.0% Kenton County, Kentucky, Airport Board, Special Facilities Revenue Bonds (Mesaba Aviation Inc. Project), AMT, Series A, 6.70%, 7/01/29 $ 2,850 $ 2,759,285 =============================================================================== Louisiana -- 1.8% Louisiana Local Government Environmental Facilities and Community Development Authority Revenue Bonds (Westlake Chemical Corporation), 6.75%, 11/01/32 3,000 3,006,180 Louisiana Public Facilities Authority, Hospital Revenue Bonds (Franciscan Missionaries of Our Lady Health System, Inc.), Series A, 5.25%, 8/15/36 1,870 1,867,120 ------------ 4,873,300 =============================================================================== Maryland -- 1.8% Maryland State Economic Development Corporation Revenue Refunding Bonds (Baltimore Association for Retarded Citizens -- Health and Mental Hygiene Program), Series A, 7.75%, 3/01/25 1,815 1,913,627 Maryland State Energy Financing Administration, Limited Obligation Revenue Bonds (Cogeneration -- AES Warrior Run), AMT, 7.40%, 9/01/19 1,500 1,491,405 Maryland State Health and Higher Educational Facilities Authority Revenue Bonds: (King Farm Presbyterian Community), Series A, 5.30%, 1/01/37 1,250 1,029,525 (Washington Christian Academy), 5.50%, 7/01/38 590 487,080 ------------ 4,921,637 =============================================================================== Massachusetts -- 1.1% Massachusetts State Health and Educational Facilities Authority Revenue Bonds (Jordan Hospital), Series E, 6.75%, 10/01/33 1,150 1,178,762 Massachusetts State Health and Educational Facilities Authority, Revenue Refunding Bonds (Bay Cove Human Services Issue), Series A, 5.90%, 4/01/28 1,945 1,865,877 ------------ 3,044,639 =============================================================================== Michigan -- 1.1% Macomb County, Michigan, Hospital Finance Authority, Hospital Revenue Bonds (Mount Clemens General Hospital), Series B, 5.875%, 11/15/34 1,635 1,534,644 Monroe County, Michigan, Hospital Financing Authority, Hospital Revenue Refunding Bonds (Mercy Memorial Hospital Corporation), 5.50%, 6/01/35 1,740 1,395,202 ------------ 2,929,846 =============================================================================== Missouri -- 0.4% Kansas City, Missouri, IDA, First Mortgage Health Facilities Revenue Bonds (Bishop Spencer Place), Series A, 6.50%, 1/01/35 1,000 977,670 =============================================================================== Nevada -- 0.7% Clark County, Nevada, IDR (Nevada Power Company Project), AMT, Series A, 5.60%, 10/01/30 1,380 1,186,358 Clark County, Nevada, Improvement District Number 142, Special Assessment Bonds, 6.375%, 8/01/23 640 610,073 ------------ 1,796,431 =============================================================================== New Hampshire -- 0.4% New Hampshire Health and Education Facilities Authority, Hospital Revenue Bonds (Catholic Medical Center), 5%, 7/01/36 1,165 1,040,939 =============================================================================== New Jersey -- 12.1% Camden County, New Jersey, Pollution Control Financing Authority, Solid Waste Resource Recovery, Revenue Refunding Bonds, AMT: Series A, 7.50%, 12/01/10 9,000 9,023,670 Series B, 7.50%, 12/01/09 345 345,980 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.50%, 6/15/24 3,065 2,982,184 New Jersey EDA, IDR, Refunding (Newark Airport Marriott Hotel), 7%, 10/01/14 2,500 2,515,750 New Jersey EDA, Retirement Community Revenue Bonds: (Cedar Crest Village Inc. Facility), Series A, 7.25%, 11/15/11 (a) 1,665 1,912,869 (Seabrook Village Inc.), Series A, 8.125%, 11/15/10 (a) 5,800 6,623,890 New Jersey EDA, Special Facility Revenue Bonds (Continental Airlines Inc. Project), AMT: 6.25%, 9/15/19 2,000 1,719,320 6.25%, 9/15/29 3,330 2,686,344 9%, 6/01/33 1,250 1,300,800 New Jersey Health Care Facilities Financing Authority Revenue Bonds (Pascack Valley Hospital Association), 6.625%, 7/01/36 (e) 2,000 1,293,000 New Jersey State Transportation Trust Fund Authority, Transportation System Revenue Bonds, Series C, 5.05%, 12/15/35 (b)(h) 3,450 813,338 Tobacco Settlement Financing Corporation of New Jersey, Asset-Backed Revenue Refunding Bonds, Series 1A, 5%, 6/01/41 1,545 1,194,192 ------------ 32,411,337 =============================================================================== New Mexico -- 0.9% Farmington, New Mexico, PCR, Refunding (Tucson Electric Power Company -- San Juan Project), Series A, 6.95%, 10/01/20 2,500 2,522,600 =============================================================================== New York -- 4.7% Dutchess County, New York, IDA, Civic Facility Revenue Refunding Bonds (Saint Francis Hospital), Series A, 7.50%, 3/01/29 1,400 1,491,224 New York City, New York, City IDA, Civic Facility Revenue Bonds: Series C, 6.80%, 6/01/28 510 534,929 (Special Needs Facilities Pooled Program), Series C-1, 6.625%, 7/01/29 1,515 1,456,763 New York City, New York, City IDA, Special Facility Revenue Bonds (British Airways Plc Project), AMT, 7.625%, 12/01/32 2,400 2,240,880 New York Liberty Development Corporation Revenue Bonds (National Sports Museum Project), Series A, 6.125%, 2/15/19 870 872,758 See Notes to Financial Statements. 8 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 Schedule of Investments (continued) (Percentages shown are based on Net Assets) Par Municipal Bonds (000) Value =============================================================================== New York (concluded) New York State Dormitory Authority, Non-State Supported Debt, Revenue Refunding Bonds: (Mount Sinai-NYU Medical Center Health System), Series C, 5.50%, 7/01/26 $ 1,470 $ 1,470,044 (New York University Hospital Center), Series A, 5%, 7/01/20 2,960 2,850,658 Westchester County, New York, IDA, Continuing Care Retirement, Mortgage Revenue Bonds (Kendal on Hudson Project), Series A, 6.50%, 1/01/13 (a) 1,575 1,784,948 ------------ 12,702,204 =============================================================================== North Carolina -- 0.7% North Carolina Medical Care Commission, Retirement Facilities, First Mortgage Revenue Bonds (Givens Estates Project), Series A, 6.50%, 7/01/13 (a) 1,500 1,743,360 =============================================================================== Ohio -- 1.4% Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco Settlement Asset-Backed Bonds, Series A-2, 6.50%, 6/01/47 3,935 3,673,126 =============================================================================== Pennsylvania -- 7.6% Allegheny County, Pennsylvania, Hospital Development Authority, Revenue Refunding Bonds (West Penn Allegheny Health System), Series A, 5.375%, 11/15/40 3,015 2,554,941 Bucks County, Pennsylvania, IDA, Retirement Community Revenue Bonds (Ann's Choice Inc.), Series A: 6.125%, 1/01/25 200 200,080 6.25%, 1/01/35 1,550 1,522,317 Harrisburg, Pennsylvania, Authority, University Revenue Bonds (Harrisburg University of Science), Series B, 6%, 9/01/36 900 854,253 Lancaster County, Pennsylvania, Hospital Authority Revenue Bonds (Brethren Village Project), Series A: 6.25%, 7/01/26 685 677,650 6.50%, 7/01/40 590 585,239 Montgomery County, Pennsylvania, IDA, Revenue Bonds (Whitemarsh Continuing Care Project), 6.125%, 2/01/28 2,330 2,166,481 Pennsylvania Economic Development Financing Authority, Exempt Facilities Revenue Bonds (National Gypsum Company), AMT, Series A, 6.25%, 11/01/27 3,250 2,837,738 Philadelphia, Pennsylvania, Authority for IDR (Air Cargo), AMT, Series A, 7.50%, 1/01/25 2,270 2,331,971 Philadelphia, Pennsylvania, Authority for IDR, Commercial Development, 7.75%, 12/01/17 6,440 6,446,569 ------------ 20,177,239 =============================================================================== Rhode Island -- 1.0% Central Falls, Rhode Island, Detention Facility Corporation, Detention Facility, Revenue Refunding Bonds, 7.25%, 7/15/35 2,495 2,573,168 =============================================================================== South Carolina -- 1.5% Connector 2000 Association, Inc., South Carolina, Toll Road and Capital Appreciation Revenue Bonds, Senior-Series B (h): 6.5%, 1/01/09 1,500 1,435,260 7.969%, 1/01/14 1,485 850,519 South Carolina Jobs, EDA, EDR (Westminster Presbyterian Center), 7.75%, 11/15/10 (a) 1,500 1,714,830 ------------ 4,000,609 =============================================================================== Tennessee -- 1.4% Knox County, Tennessee, Health, Educational and Housing Facilities Board, Hospital Facilities Revenue Refunding Bonds (Covenant Health), Series A, 5.06%, 1/01/40 (h) 6,785 936,194 Shelby County, Tennessee, Health, Educational and Housing Facilities Board Revenue Bonds (Germantown Village): 6.25%, 12/01/34 355 294,078 Series A, 7.25%, 12/01/34 2,500 2,453,575 ------------ 3,683,847 =============================================================================== Texas -- 2.0% Austin, Texas, Convention Center Revenue Bonds (Convention Enterprises Inc.), First Tier, Series A, 6.70%, 1/01/11 (a) 1,000 1,095,820 Brazos River Authority, Texas, PCR, Refunding (TXU Energy Company LLC Project), AMT, Series A, 7.70%, 4/01/33 2,550 2,531,742 Houston, Texas, Health Facilities Development Corporation, Retirement Facility Revenue Bonds (Buckingham Senior Living Community), Series A, 7.125%, 2/15/14 (a) 1,400 1,689,282 ------------ 5,316,844 =============================================================================== Utah -- 0.6% Carbon County, Utah, Solid Waste Disposal, Revenue Refunding Bonds (Laidlaw Environmental), AMT, Series A, 7.45%, 7/01/17 1,660 1,674,409 =============================================================================== Virginia -- 5.6% Dulles Town Center, Virginia, Community Development Authority, Special Assessment Tax (Dulles Town Center Project), 6.25%, 3/01/26 1,455 1,457,692 Fairfax County, Virginia, EDA, Residential Care Facilities, Mortgage Revenue Refunding Bonds (Goodwin House, Inc.): 5.125%, 10/01/37 750 677,992 5.125%, 10/01/42 450 400,684 Lexington, Virginia, IDA, Residential Care Facility, Mortgage Revenue Refunding Bonds (Kendal at Lexington), Series A, 5.375%, 1/01/28 540 486,734 Pocahontas Parkway Association, Virginia, Toll Road Revenue Bonds, Capital Appreciation, Senior Series B, 5.95%, 8/15/08 (a)(h) 38,400 10,126,464 Tobacco Settlement Financing Corporation of Virginia, Revenue Refunding Bonds, Senior Series B-1, 5%, 6/01/47 2,180 1,664,386 ------------ 14,813,952 =============================================================================== See Notes to Financial Statements. BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 9 Schedule of Investments (concluded) (Percentages shown are based on Net Assets) Par Municipal Bonds (000) Value =============================================================================== Washington -- 0.6% Washington State Housing Financing Commission, Nonprofit Revenue Bonds (Skyline at First Hill Project), Series A, 5.625%, 1/01/38 $ 1,750 $ 1,494,605 =============================================================================== Wisconsin -- 0.7% Wisconsin State Health and Educational Facilities Authority Revenue Bonds (New Castle Place Project), Series A, 7%, 12/01/31 1,855 1,874,886 =============================================================================== Wyoming -- 1.1% Wyoming Municipal Power Agency, Power Supply Revenue Bonds, Series A, 5.375%, 1/01/42 3,030 3,013,517 =============================================================================== U.S. Virgin Islands -- 1.2% Virgin Islands Government Refinery Facilities, Revenue Refunding Bonds (Hovensa Coker Project), AMT, 6.50%, 7/01/21 3,000 3,078,450 - ------------------------------------------------------------------------------- Total Municipal Bonds (Cost -- $256,793,913) -- 94.8% 253,025,243 =============================================================================== Municipal Bonds Transferred to Tender Par Option Bond Trusts (i) (000) Value =============================================================================== California -- 1.6% San Jose, California, Airport Revenue Refunding Bonds, AMT, Series A, 5.50%, 3/01/32 (b) 4,290 4,349,073 =============================================================================== Virginia -- 3.3% Virginia State, HDA, Commonwealth Mortgage Revenue Bonds, Series H, Sub-Series H-1, 5.375%, 7/01/36 (j) 8,690 8,733,624 - ------------------------------------------------------------------------------- Total Municipal Bonds Transferred to Tender Option Bond Trusts (Cost -- $13,281,165) -- 4.9% 13,082,697 =============================================================================== =============================================================================== Short-Term Securities Shares =============================================================================== Merrill Lynch Institutional Tax-Exempt Fund, 1.71% (k)(l) 3,200,441 3,200,441 - ------------------------------------------------------------------------------- Total Short-Term Securities (Cost -- $3,200,441) -- 1.2% 3,200,441 =============================================================================== Total Investments (Cost -- $273,275,519*) -- 100.9% 269,308,381 Other Assets Less Liabilities -- 1.6% 4,158,276 Liability for Trust Certificates, Including Interest Expense and Fees Payable -- (2.5%) (6,553,384) ------------ Net Assets Applicable to Common Shares -- 100.0% $266,913,273 ============ * The cost and unrealized appreciation (depreciation) of investments as of May 31, 2008, as computed for federal income tax purposes, were as follows: Aggregate cost ....................................... $ 266,413,321 ============= Gross unrealized appreciation ........................ $ 8,505,642 Gross unrealized depreciation ........................ (12,100,582) ------------- Net unrealized depreciation .......................... $ (3,594,940) ============= (a) U.S. government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par. (b) AMBAC Insured. (c) Non-income producing security. (d) Issuer filed for bankruptcy or is in default of interest payments. (e) Illiquid security. (f) Variable rate security. Rate shown is as of report date. Maturity shown is the final maturity date. (g) Radian Insured. (h) Represents a zero-coupon bond. Rate shown reflects the effective yield at the time of purchase. (i) Securities represent bonds transferred to a tender option bond trust in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts. (j) MBIA Insured. (k) Investments in companies considered to be an affiliate of the Fund, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows: -------------------------------------------------------------------------- Net Dividend Affiliate Activity Income -------------------------------------------------------------------------- Merrill Lynch Institutional Tax-Exempt Fund $(6,209,130) $107,637 -------------------------------------------------------------------------- (l) Represents the current yield as of report date. (m) All or a portion of security has been pledged as collateral in connection with open financial futures contracts. o Financial futures contracts purchased as of May 31, 2008 were as follows: -------------------------------------------------------------------------- Number of Expiration Face Unrealized Contracts Issue Exchange Date Value Appreciation -------------------------------------------------------------------------- 185 10-Year U.S. Treasury Bond Chicago September 2008 $20,679,938 $115,218 -------------------------------------------------------------------------- See Notes to Financial Statements. 10 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 Statement of Assets and Liabilities May 31, 2008 ================================================================================ Assets - -------------------------------------------------------------------------------- Investments at value -- unaffiliated (cost -- $270,075,078) $ 266,107,940 Investments at value -- affiliated (cost -- $3,200,441) .... 3,200,441 Cash ....................................................... 47,159 Interest receivable ........................................ 5,103,308 Investments sold receivable ................................ 493,542 Margin variation receivable ................................ 115,218 Prepaid expenses ........................................... 11,858 ------------- Total assets ............................................... 275,079,466 ------------- ================================================================================ Accrued Liabilities - -------------------------------------------------------------------------------- Income dividends payable ................................... 1,408,369 Investment advisory fees payable ........................... 127,554 Interest expense and fees payable .......................... 63,384 Other affiliates payable ................................... 1,957 Officer fees payable ....................................... 360 Other accrued expenses payable ............................. 74,569 ------------- Total accrued liabilities .................................. 1,676,193 ------------- ================================================================================ Other Liabilities - -------------------------------------------------------------------------------- Trust certificates 1 ....................................... 6,490,000 ------------- Total Liabilities .......................................... 8,166,193 ------------- ================================================================================ Net Assets - -------------------------------------------------------------------------------- Net assets ................................................. $ 266,913,273 ============= ================================================================================ Net Assets Consist of - -------------------------------------------------------------------------------- Par value $0.10 per share (20,864,724 shares issued and outstanding) ......................................... $ 2,086,472 Paid-in capital in excess of par ........................... 296,039,979 Undistributed net investment income ........................ 1,666,151 Accumulated net realized loss .............................. (29,027,409) Net unrealized appreciation/depreciation ................... (3,851,920) ------------- Net Assets, $12.79 net asset value per share ............... $ 266,913,273 ============= 1 Represents short-term floating rate certificates issued by tender option bond trusts. 2 Related to tender option bond trusts. Statement of Operations Year Ended May 31, 2008 ================================================================================ Investment Income - -------------------------------------------------------------------------------- Interest ................................................... $ 17,963,762 Dividends from affiliates .................................. 107,637 ------------- Total income ............................................... 18,071,399 ------------- ================================================================================ Expenses - -------------------------------------------------------------------------------- Investment advisory ........................................ 1,523,956 Accounting services ........................................ 99,443 Professional ............................................... 51,074 Printing ................................................... 43,250 Officer and Directors ...................................... 21,971 Custodian .................................................. 16,758 Registration ............................................... 8,868 Transfer agent ............................................. 5,881 Miscellaneous .............................................. 53,838 ------------- Total expenses excluding interest expense and fees ......... 1,825,039 Interest expense and fees 2 ................................ 107,312 ------------- Total expenses ............................................. 1,932,351 Less fees waived by advisor ................................ (7,246) ------------- Total expenses after waiver ................................ 1,925,105 ------------- Net investment income ...................................... 16,146,294 ------------- ================================================================================ Realized and Unrealized Gain (Loss) - -------------------------------------------------------------------------------- Net realized gain (loss) from: Investments .............................................. (1,634,734) Swaps .................................................... 127,102 ------------- (1,507,632) ------------- Net change in unrealized appreciation/depreciation on: Investments .............................................. (20,157,187) Futures and swaps ........................................ 171,992 ------------- (19,985,195) ------------- Total realized and unrealized loss ......................... (21,492,827) ------------- Net Decrease in Net Assets Resulting from Operations ....... $ (5,346,533) ============= See Notes to Financial Statements. BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 11 Statements of Changes in Net Assets
Year Ended May 31, --------------------------------- Increase (Decrease) in Net Assets: 2008 2007 =================================================================================================================================== Operations - ----------------------------------------------------------------------------------------------------------------------------------- Net investment income ...................................................................... $ 16,146,294 $ 16,973,304 Net realized loss .......................................................................... (1,507,632) (5,079,543) Net change in unrealized appreciation/depreciation ......................................... (19,985,195) 9,799,343 --------------------------------- Net increase (decrease) in net assets resulting from operations ............................ (5,346,533) 21,693,104 --------------------------------- =================================================================================================================================== Dividends and Distributions to Shareholders From - ----------------------------------------------------------------------------------------------------------------------------------- Net investment income ...................................................................... (17,002,831) (17,339,322) Net realized gain .......................................................................... (65,858) -- --------------------------------- Decrease in net assets resulting from dividends and distributions to shareholders .......... (17,068,689) (17,339,322) --------------------------------- =================================================================================================================================== Capital Share Transactions - ----------------------------------------------------------------------------------------------------------------------------------- Reinvestment of dividends and distributions ................................................ 1,961,372 2,220,383 --------------------------------- =================================================================================================================================== Net Assets - ----------------------------------------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets. ................................................... (20,453,850) 6,574,165 Beginning of year .......................................................................... 287,367,123 280,792,958 --------------------------------- End of year ................................................................................ $ 266,913,273 $ 287,367,123 ================================= End of year undistributed net investment income ............................................ $ 1,666,151 $ 2,522,745 =================================
See Notes to Financial Statements. 12 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 Financial Highlights
Ended May 31, ------------------------------------------------------------- 2008 2007 2006 2005 2004 =================================================================================================================================== Per Share Operating Performance - ----------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of year ................................. $ 13.87 $ 13.65 $ 13.40 $ 12.36 $ 11.94 ------------------------------------------------------------- Net investment income 1 ............................................ 0.78 0.82 0.81 0.81 0.83 Net realized and unrealized gain (loss) ............................ (1.04) 0.24 0.27 1.04 0.38 ------------------------------------------------------------- Net increase (decrease) from investment operations ................. (0.26) 1.06 1.08 1.85 1.21 ------------------------------------------------------------- Dividends and distributions from: Net investment income ......................................... (0.82) (0.84) (0.83) (0.81) (0.78) Net realized gain ............................................. -- 2 -- -- -- (0.01) ------------------------------------------------------------- Total dividends and distributions .................................. (0.82) (0.84) (0.83) (0.81) (0.79) ------------------------------------------------------------- Net asset value, end of year ....................................... $ 12.79 $ 13.87 $ 13.65 $ 13.40 $ 12.36 ------------------------------------------------------------- Market price, end of year .......................................... $ 13.35 $ 15.29 $ 14.13 $ 13.27 $ 11.38 ------------------------------------------------------------- =================================================================================================================================== Total Investment Return 3 - ----------------------------------------------------------------------------------------------------------------------------------- Based on net asset value ........................................... (1.90%) 7.72% 8.31% 15.65% 10.74% ============================================================= Based on market price .............................................. (7.12%) 14.71% 13.22% 24.39% 2.22% ============================================================= =================================================================================================================================== Ratios to Average Net Assets - ----------------------------------------------------------------------------------------------------------------------------------- Total expenses after waiver and excluding interest expense and fees 4 0.66% 0.68% 0.68% 0.67% 0.67% ============================================================= Total expenses after waiver ........................................ 0.69% 0.68% 0.68% 0.67% 0.67% ============================================================= Total expenses ..................................................... 0.70% 0.68% 0.68% 0.67% 0.67% ============================================================= Net investment income .............................................. 5.81% 5.91% 5.97% 6.30% 6.71% ============================================================= =================================================================================================================================== Supplemental Data - ----------------------------------------------------------------------------------------------------------------------------------- Net assets, end of year (000) ...................................... $ 266,913 $ 287,367 $ 280,793 $ 273,382 $ 252,203 ============================================================= Portfolio turnover ................................................. 23% 25% 17% 20% 19% =============================================================
1 Based on average shares outstanding. 2 Amount is less than $(0.01). 3 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 charges. 4 Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts. See Notes to Financial Statements. BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 13 Notes to Financial Statements 1. Significant Accounting Policies: BlackRock MuniAssets Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a non-diversified, closed-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. Actual results may differ from these estimates. The Fund determines, and makes available for publication, the net asset value of its Common Stock on a daily basis. The following is a summary of significant accounting policies followed by the Fund: Valuation of Investments: Municipal investments (including commitments to purchase such investments on a "when-issued" basis) are valued on the basis of prices provided by dealers or pricing services selected under the supervision of the Fund's Board of Directors (the "Board"). In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and various relationships between investments. Short-term securities are valued at amortized cost. Swap agreements are valued by quoted fair values received by the Fund's pricing service. In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the market value of such investment, the investment will be valued by a method approved by the Board as reflecting fair value ("Fair Value Assets"). When determining the price for Fair Value Assets, the investment advisor and/or sub-advisor seeks to determine the price that the Fund might reasonably expect to receive from the current sale of that asset in an arm's-length transaction. Fair value determinations shall be based upon all available factors that the investment advisor and/or sub-advisor deems relevant. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof. Derivative Financial Instruments: The Fund may engage in various portfolio investment strategies to increase the return of the Fund and to hedge, or protect, its exposure to interest rate movements and movements in the securities markets. Losses may arise if the value of the contract decreases due to an unfavorable change in the price of the underlying security or if the counterparty does not perform under the contract. o Financial futures contracts -- The Fund may purchase or sell financial futures contracts and options on such financial futures contracts. Financial 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 margin variation and are recognized 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. o Forward interest rate swaps -- The Fund may enter into forward interest rate swaps. In a forward interest rate swap, the Fund and the counterparty agree to make periodic net payments on a specified notional contract amount, commencing on a specified future effective date, unless terminated earlier. These periodic payments received or made by the Fund are recorded in the accompanying Statement of Operations as realized gains or losses, respectively. Gains or losses are also realized upon termination of the swap agreements. Swaps are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). The Fund generally intends to close each forward interest rate swap before the effective date specified in the agreement and therefore avoid entering into the interest rate swap underlying each forward interest rate swap. Forward Commitments and When-Issued Delayed Delivery Securities: The Fund may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Fund may purchase securities under such conditions only with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Fund may be required to pay more at settlement than the security is worth. In addition, the purchaser is not entitled to any of the interest earned prior to settlement. Upon making a commitment to purchase a security on a when-issued basis, the Fund will hold liquid assets worth at least the equivalent of the amount due. Municipal Bonds Transferred to Tender Option Bond Trusts: The Fund leverages its assets through the use of tender option bond trusts ("TOBs"). A TOB is established by a third party sponsor forming a special purpose entity, into which one or more funds, or an agent on behalf of the funds, transfers municipal securities. Other funds managed by the investment advisor may also contribute municipal securities to a TOB into which the Fund has contributed securities. A TOB typically issues two classes of beneficial interests: short-term floating rate certificates, which are sold to third party investors, and residual certificates ("TOB Residuals"), which are generally issued to the participating funds that made the transfer. The TOB Residuals held by the Fund include the right of the Fund (1) to cause the holders of a proportional share of the floating rate certificates to tender their certificates at par, and (2) to transfer, within seven days, a corresponding share of the municipal securities from the TOB to the Fund. The cash received by the TOB from the sale of the short-term floating rate certificates, less transaction expenses, is paid to the Fund, which typically invests the cash in additional municipal securities. The Fund's transfer of 14 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 Notes to Financial Statements (continued) the municipal securities to a TOB is accounted for as a secured borrowing, therefore the municipal securities deposited into a TOB are presented in the Fund's Schedule of Investments and the proceeds from the transaction are reported as a liability of the Fund. Interest income from the underlying securities is recorded by the Fund on an accrual basis. Interest expense incurred on the secured borrowing and other expenses related to remarketing, administration and trustee services to a TOB are reported as expenses of the Fund. The floating rate certificates have interest rates that generally reset weekly and their holders have the option to tender certificates to the TOB for redemption at par at each reset date. At May 31, 2008, the aggregate value of the underlying municipal securities transferred to TOBs was $13,082,697, the related liablility for trust certificates was $6,490,000 and the range of interest rates on the liability for trust certificates was 2.555% to 3.102%. Financial transactions executed through TOBs generally will underperform the market for fixed rate municipal bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline or remain relatively stable. Should short-term interest rates rise, the Fund's investment in TOBs likely will adversely affect the Fund's net investment income and dividends to shareholders. Fluctuations in the market value of municipal securities deposited into the TOB may adversely affect the Fund's net asset value per share. Zero-Coupon Bonds: The Fund may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations which provide for regular interest payments. Segregation: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission ("SEC") require that the Fund segregate assets in connection with certain investments (e.g., swaps and when-issued securities), the Fund will, consistent with certain interpretive letters issued by the SEC, designate on its books and records cash or other liquid debt securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Investment Transactions and Investment Income: Investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on security transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income is recognized on the accrual method. The Fund amortizes all premiums and discounts on debt securities. Dividends and Distributions: Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. 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. Effective November 30, 2007, the Fund implemented Financial Accounting Standards Board ("FASB") Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 prescribes the minimum recognition threshold a tax position must meet in connection with accounting for uncertainties in income tax positions taken or expected to be taken by an entity, including investment companies, before being measured and recognized in the financial statements. The investment advisor has evaluated the application of FIN 48 to the Fund, and has determined that the adoption of FIN 48 does not have a material impact on the Fund's financial statements. The Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Fund's U.S. federal tax returns remain open for the years ended May 31, 2005 through May 31, 2007. The statutes of limitations on the Fund's state and local tax returns may remain open for an additional year depending upon the jurisdiction. Recent Accounting Pronouncements: In September 2006, Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"), was issued and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The impact on the Fund's financial statements disclosures, if any, is currently being assessed. In addition, in February 2007, Statement of Financial Accounting Standards No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("FAS 159"), was issued and is effective for fiscal years beginning after November 15, 2007. FAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. FAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. The impact on the Fund's financial statement disclosures, if any, is currently being assessed. In March 2008, Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities -- an amendment of FASB Statement No. 133" ("FAS 161"), was issued and is effective for fiscal years beginning after November 15, 2008. FAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity's results of operations and financial position. The impact on the Fund's financial statement disclosures, if any, is currently being assessed. BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 15 Notes to Financial Statements (continued) Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by the Fund's Board, non-interested Directors ("Independent Directors") may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts have been invested in common shares of other certain BlackRock Closed-End Funds selected by the Independent Directors. This has approximately the same economic effect for the Independent Directors as if the Independent Directors had invested the deferred amounts directly in other certain BlackRock Closed-End Funds. The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of the Fund. The Fund may, however, elect to invest in common stock of other certain BlackRock Closed-End Funds selected by the Independent Directors in order to match its deferred compensation obligations. Other: Expenses directly related to the Fund are charged to the Fund. Other operating expenses shared by several funds are pro-rated among those funds on the basis of relative net assets or other appropriate methods. 2. Investment Advisory Agreement and Other Transactions with Affiliates: The Fund has entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the "Advisor"), an indirect, wholly owned subsidiary of BlackRock, Inc., to provide investment advisory and administration services. Merrill Lynch & Co., Inc. ("Merrill Lynch") and The PNC Financial Services Group, Inc. are principal owners of BlackRock, Inc. The Advisor 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 the Advisor a monthly fee at an annual rate of 0.55% of the Fund's average daily net assets, plus the proceeds from the issuance of TOBs. Average daily net assets is the average daily value of the Fund's total assets minus the sum of its accrued liabilities. The Advisor has agreed to waive its advisory fees by the amount of investment advisory fees the Fund pays to the Advisor indirectly through its investment in affiliated money market funds. This amount is included in fees waived by the advisor on the Statement of Operations. For the year ended May 31, 2008, the amount was $7,246. The Advisor has entered into a separate sub-advisory agreement with BlackRock Investment Management, LLC ("BIM"), an affiliate of the Advisor, under which the Advisor pays BIM for services it provides, a monthly fee that is a percentage of the investment advisory fee paid by the Fund to the Advisor. For the year ended May 31, 2008, the Fund reimbursed the Advisor $4,953 for certain accounting services expenses, which is included in accounting services in the Statement of Operations. Certain officers and/or directors of the Fund are officers and/or directors of BlackRock, Inc. or its affiliates. 3. Investments: Purchases and sales of investments, excluding short-term securities, for the year ended May 31, 2008, were $71,794,140 and $63,004,720, respectively. 4. Capital Share Transactions: The Fund is authorized to issue 200,000,000 shares, par value $0.10 per share. Shares issued and outstanding for the years ended May 31, 2008 and May 31, 2007, increased by 146,172 and 154,369, respectively, as a result of dividend and distribution reinvestment. 5. Income Tax Information: Reclassifications: Accounting principles generally accepted in the United States of America require that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. Accordingly, during the current year, $6,860,553 has been reclassified between paid-in capital in excess of par and accumulated net realized loss as a result of permanent differences attributable to the expiration of capital loss carryforwards and $57 has been reclassified between undistributed net investment income and accumulated net realized loss as a result of reclassification of distributions. These reclassifications have no effect on net assets or net asset value per share. The tax character of distributions paid during the fiscal years ended May 31, 2008 and May 31, 2007 was as follows: - -------------------------------------------------------------------------------- 5/31/2008 5/31/2007 - -------------------------------------------------------------------------------- Distributions paid from: Net tax-exempt income ...................... $17,002,831 $17,339,322 Ordinary income ............................ 65,858 -- ---------------------------- Total distributions .......................... $17,068,689 $17,339,322 ---------------------------- 16 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 Notes to Financial Statements (concluded) As of May 31, 2008, the components of accumulated losses on a tax basis were as follows: - ----------------------------------------------------------------------------- Net undistributed tax-exempt income ....................... $ 1,313,590 Net undistributed long-term capital gains ................. -- ------------ Total net undistributed earnings .......................... 1,313,590 Capital loss carryforward ................................. (28,042,434)* Net unrealized losses ..................................... (4,484,334)** ------------ Total accumulated net losses .............................. $(31,213,178) ============ * As of May 31, 2008, the Fund had a capital loss carryforward of $28,042,434, of which $3,487,083 expires in 2009, $2,260,830 expires in 2010, $7,452,325 expires in 2011, $5,486,273 expires in 2012, $3,762,613 expires in 2013, $5,065,527 expires in 2015 and $527,783 expires in 2016. This amount will be available to offset future realized capital gains. ** The difference between book-basis and tax-basis net unrealized losses is attributable primarily to the difference between book and tax amortization methods for premiums and discounts on fixed income securities, book/tax differences in the accrual of income on securities in default, the realization for tax purposes of unrealized gains on certain futures contracts, the deferral of post-October capital losses for tax purposes and the difference between the book and tax treatment of residual interests in tender option bond trusts. 6. Concentration Risk: The Fund's investments are concentrated in certain states, which may be affected by adverse financial, social, environmental, economic, regulatory and political factors. Many municipalities insure repayment of their bonds, which reduces the risk of loss due to issuer default. The market value of these bonds may fluctuate for other reasons and there is no assurance that the issuer will meet its obligation. 7. Subsequent Event: The Fund paid a net investment income dividend to holders in the amount of $0.067500 per share on July 1, 2008 to shareholders of record on June 16, 2008. BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 17 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of BlackRock MuniAssets Fund, Inc.: We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of BlackRock MuniAssets Fund, Inc. (the "Fund") as of May 31, 2008, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of May 31, 2008, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of BlackRock MuniAssets Fund, Inc. as of May 31, 2008, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Princeton, New Jersey July 25, 2008 Important Tax Information (Unaudited) All of the net investment income distributions paid by BlackRock MuniAssets Fund, Inc. during the taxable year ended May 31, 2008 qualify as tax-exempt interest dividends for federal income tax purposes. Additionally, the Fund paid an ordinary income distribution of $0.003166 per share to shareholders of record on December 14, 2007. 18 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 Disclosure of Investment Advisory Agreement and Subadvisory Agreement The Board of Directors (the "Board," the members of which are referred to as "Directors") of the BlackRock MuniAssets Fund, Inc. (the "Fund") met in April and May 2008 to consider approving the continuation of the Fund's investment advisory agreement (the "Advisory Agreement") with BlackRock Advisors, LLC (the "Advisor"), the Fund's investment adviser. The Board also considered the approval of the Fund's subadvisory agreement (the "Subadvisory Agreement" and, together with the "Advisory Agreement," the "Agreements") between the Advisor and BlackRock Investment Management, LLC (the "Subadvisor"). The Advisor and the Subadvisor are collectively referred to herein as the "Advisors" and, together with BlackRock, Inc., "BlackRock." Activities and Composition of the Board The Board of Directors of the Fund consists of thirteen individuals, eleven of whom are not "interested persons" of the Fund as defined in the Investment Company Act of 1940 (the "1940 Act") (the "Independent Directors"). The Directors are responsible for the oversight of the operations of he Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Directors have retained independent legal counsel to assist them in connection with their duties. The Chairman of the Board is an Independent Director. The Board has established four standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee and a Performance Oversight Committee. Advisory Agreement and Subadvisory Agreement Upon the consummation of the combination of BlackRock, Inc.'s investment management business with Merrill Lynch & Co., Inc.'s investment management business, including Merrill Lynch Investment Managers, L.P., and certain affiliates, the Fund entered into the Advisory Agreement and the Subadvisory Agreement, each with an initial two-year term. Consistent with the 1940 Act, after the Advisory and Subadvisory Agreement's respective initial two-year term, the Board is required to consider the continuation of the Fund's Advisory Agreement and Subadvisory Agreement on an annual basis. In connection with this process, the Board assessed, among other things, the nature, scope and quality of the services provided to the Fund by the personnel of BlackRock and its affiliates, including investment management, administrative services, secondary market support services, oversight of fund accounting, and assistance in meeting legal and regulatory requirements. The Board also received and assessed information regarding the services provided to the Fund by certain unaffiliated service providers. Throughout the year, the Board also considered a range of information in connection with its oversight of the services provided by BlackRock and its affiliates. Among the matters the Board considered were: (a) investment performance for one, three and five years, as applicable, against peer funds, as well as senior management and portfolio managers' analysis of the reasons for underperformance, if applicable; (b) fees, including advisory and other fees paid to BlackRock and its affiliates by the Fund, such as transfer agency fees and fees for marketing and distribution; (c) Fund operating expenses paid to third parties; (d) the resources devoted to and compliance reports relating to the Fund's investment objective, policies and restrictions; (e) the Fund's compliance with its Code of Ethics and compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock's and other service providers' internal controls; (h) BlackRock's implementation of the proxy voting guidelines approved by the Board; (i) the use of equity brokerage commissions and execution quality; (j) valuation and liquidity procedures; and (k) reviews of BlackRock's business, including BlackRock's response to the increasing scale of its business. Board Considerations in Approving the Advisory Agreement and Subadvisory Agreement To assist the Board in its evaluation of the Agreements, the Directors received information from BlackRock in advance of the April 22, 2008 meeting which detailed, among other things, the organization, business lines and capabilities of the Advisors, including: (a) the responsibilities of various departments and key personnel and biographical information relating to key personnel; (b) financial statements for BlackRock; (c) the advisory and/or administrative fees paid by the Fund to the Advisors, including comparisons, compiled by Lipper, an independent third party, with the management fees of funds with similar investment objectives ("Peers"); (d) the profitability of BlackRock and certain industry profitability analyses for advisers to registered investment companies; (e) the expenses of BlackRock in providing various services; (f) non-investment advisory reimbursements, if applicable, and "fallout" benefits to BlackRock; (g) economies of scale, if any, generated through the Advisors' management of all of the BlackRock closed-end funds (the "Fund Complex"); (h) the expenses of the Fund, including comparisons of the Fund's expense ratios (both before and after any fee waivers) with the expense ratios of its Peers; and (i) the Fund's performance for the past one-, three- and five-year periods, when applicable, as well as the Fund's performance compared to its Peers. The Board also considered other matters it deemed important to the approval process, where applicable, such as payments made to BlackRock or its affiliates relating to the distribution of Fund shares, services related to the valuation and pricing of Fund portfolio holdings, allocation of Fund brokerage fees (including the related benefits to BlackRock of "soft dollars") and direct and indirect benefits to BlackRock and its affiliates from their relationship with the Fund. In addition to the foregoing materials, independent legal counsel to the Independent Directors provided a legal memorandum outlining, among other things, the duties of the Board under the 1940 Act, as well as the general principles of relevant law in reviewing and approving advisory contracts, the requirements of the 1940 Act in such matters, an adviser's fiduciary duty with respect to advisory agreements and compensation, BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 19 Disclosure of Investment Advisory Agreement and Subadvisory Agreement (continued) and the standards used by courts in determining whether investment company boards of directors have fulfilled their duties and the factors to be considered by boards in voting on advisory agreements. The Independent Directors reviewed this information and discussed it with independent legal counsel prior to the meeting on April 22, 2008. At the Board meeting on April 22, 2008, BlackRock made a presentation to and responded to questions from the Board. Following the meeting on April 22, 2008, the Board presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written materials provided to the Directors prior to the meetings on May 29 and 30, 2008. At the Board meeting on May 29 and 30, 2008, BlackRock responded to further questions from the Board. In connection with BlackRock's presentations, the Board considered each Agreement and, in consultation with independent legal counsel, reviewed the factors set out in judicial decisions and Securities and Exchange Commission ("SEC") statements relating to the renewal of the Agreements. I. Matters Considered by the Board In connection with its deliberations with respect to the Agreements, the Board considered all factors it believed relevant with respect to the Fund, including the following: the nature, extent and quality of the services provided by the Advisors; the investment performance of the Fund; the costs of the services to be provided and profits to be realized by the Advisors and their affiliates from their relationship with the Fund; the extent to which economies of scale would be realized as the Fund Complex grows; and whether BlackRock realizes other benefits from its relationship with the Fund. A. Nature, Extent and Quality of the Services: In evaluating the nature, extent and quality of the Advisors' services, the Board reviewed information concerning the types of services that the Advisors provide and are expected to provide to the Fund, narrative and statistical information concerning the Fund's performance record and how such performance compares to the Fund's Peers, information describing BlackRock's organization and its various departments, the experience and responsibilities of key personnel and available resources. The Board noted the willingness of the personnel of BlackRock to engage in open, candid discussions with the Board. The Board further considered the quality of the Advisors' investment process in making portfolio management decisions. In addition to advisory services, the Directors considered the quality of the administrative or non-investment advisory services provided to the Fund. In this regard, the Advisors and their affiliates provided the Fund with such administrative, transfer agency, shareholder and other services, as applicable (exclusive of, and in addition to, any such services provided by others for the Fund), and officers and other personnel as are necessary for the operations of the Fund. In addition to investment management services, the Advisors and their affiliates provided the Fund with services such as: preparing shareholder reports and communications, including annual and semi-annual financial statements and Fund websites; communications with analysts to support secondary market trading; assisting with daily accounting and pricing; preparing periodic filings with regulators and stock exchanges; overseeing and coordinating the activities of other service providers; administering and organizing Board meetings and preparing the Board materials for such meetings; providing legal and compliance support (such as helping to prepare proxy statements and responding to regulatory inquiries); and performing other Fund administrative tasks necessary for the operation of the Fund (such as tax reporting and fulfilling regulatory filing requirements). The Board considered the Advisors' policies and procedures for assuring compliance with applicable laws and regulations. B. The Investment Performance of the Fund and BlackRock: As previously noted, the Board received performance information regarding the Fund and its Peers. Among other things, the Board received materials reflecting the Fund's historic performance and the Fund's performance compared to its Peers. More specifically, the Fund's one-, three- and five-year total returns (when applicable) were evaluated relative to its respective Peers (including the Peers' median performance). The Board reviewed a narrative analysis of the Peer rankings prepared by Lipper and reviewed by BlackRock at the Board's request. The summary placed the Peer rankings into context by analyzing various factors that affect these comparisons. The Board noted that in general the Fund performed better than its Peers in that its performance was at or above the median in at least two for the one-, three- and five-year periods reported. After considering this information, the Boards concluded that the performance of the Fund, in light of and after considering the other facts and circumstances applicable to the Fund, supports a conclusion that the Fund's Agreements should be renewed. C. Consideration of the Advisory Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from the Relationship with the Fund: In evaluating the management fees and expenses that a Fund is expected to bear, the Board considered the Fund's current management fee structure and the Fund's expense ratios in absolute terms as well as relative to the fees and expense ratios of its applicable Peers. The Board, among other things, reviewed comparisons of the Fund's gross management fees before and after any applicable reimbursements and fee waivers and total expense ratios before and after any applicable waivers with those of its applicable Peers. The Board also reviewed a narrative analysis of the Peer rankings prepared by Lipper and summarized by BlackRock at the request of the Board. This summary placed the Peer rankings into context by analyzing various factors that affect these comparisons. 20 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 Disclosure of Investment Advisory Agreement and Subadvisory Agreement (continued) The Board noted that the Fund paid contractual management fees lower than or equal to the median contractual fees paid by its Peers. This comparison was made without giving effect to any expense reimbursements or fee waivers. The Board also compared the management fees charged and services provided to the closed-end investment companies managed by the Advisors to the management fees charged by the Advisors to other types of clients (such as open-end investment companies and separately managed institutional accounts) in similar investment categories. The Board noted certain differences in services provided and costs incurred by the Advisors with respect to closed-end funds compared to separately managed accounts and open-end funds in general and the reasons for such differences. In connection with the Board's consideration of the fees and expense information, the Board reviewed the considerable investment management experience of the Advisors and considered the high level of investment management, administrative and other services provided by the Advisors. In light of these factors and the other facts and circumstances applicable to the Fund, the Board concluded that the fees paid and level of expenses incurred by the Fund under its Agreements support a conclusion that the Fund's Agreements should be renewed. D. Profitability of BlackRock: The Board also considered BlackRock's profitability in conjunction with its review of fees. The Board reviewed BlackRock's profitability with respect to the Fund Complex and other fund complexes managed by the Advisors. In reviewing profitability, the Board recognized that one of the most difficult issues in determining profitability is establishing a method of allocating expenses. The Board also reviewed BlackRock's assumptions and methodology of allocating expenses, noting the inherent limitations in allocating costs among various advisory products. The Board also recognized that individual fund or product line profitability of other advisors is generally not publicly available. The Board recognized that profitability may be affected by numerous factors including, among other things, the types of funds managed, expense allocations and business mix, and therefore comparability of profitability is somewhat limited. Nevertheless, to the extent available, the Board considered BlackRock's operating margin compared to the operating margin estimated by BlackRock for a leading investment management firm whose operations consist primarily of advising closed-end funds. The comparison indicated that BlackRock's operating margin was approximately the same as the operating margin of such firm. In evaluating the reasonableness of the Advisors' compensation, the Board also considered any other revenues paid to the Advisors, including partial reimbursements paid to the Advisors for certain non-investment advisory services, if applicable. The Board noted that these payments were less than the Advisors' costs for providing these services. The Board also considered indirect benefits (such as soft dollar arrangements) that the Advisors and their affiliates are expected to receive, which are attributable to their management of the Fund. The Board concluded that BlackRock's profitability, in light of all the other facts and circumstances applicable to the Fund, supports a conclusion that the Fund's Agreements should be renewed. E. Economies of Scale: In reviewing the Fund's fees and expenses, the Board examined the potential benefits of economies of scale, and whether any economies of scale should be reflected in the Fund's fee structure, for example through the use of breakpoints for the Fund or the Fund Complex. In this regard, the Board reviewed information provided by BlackRock, noting that most closed-end fund complexes do not have fund-level breakpoints because closed-end funds generally do not experience substantial growth after their initial public offering and each fund is managed independently consistent with its own investment objectives. The Board noted that only three closed-end funds in the Fund Complex have breakpoints in their respective fee structures. Information provided by Lipper also revealed that only one closed-end fund complex used a complex-level breakpoint structure. F. Other Factors: In evaluating fees, the Board also considered indirect benefits or profits the Advisors or their affiliates may receive as a result of their relationships with the Fund ("fall-out benefits"). The Directors, including the Independent Directors, considered the intangible benefits that accrue to the Advisors and their affiliates by virtue of their relationships with the Fund, including potential benefits accruing to the Advisors and BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 21 Disclosure of Investment Advisory Agreement and Subadvisory Agreement (concluded) their affiliates as a result of participating in offerings of the Fund's shares, potentially stronger relationships with members of the broker-dealer community, increased name recognition of the Advisors and their affiliates, enhanced sales of other investment funds and products sponsored by the Advisors and their affiliates and increased assets under management which may increase the benefits realized by the Advisors from soft dollar arrangements with broker-dealers. The Board also considered the unquantifiable nature of these potential benefits. II. Conclusion with Respect to the Agreements In reviewing the Agreements, the Directors did not identify any single factor discussed above as all-important or controlling and different Directors may have attributed different weights to the various factors considered. The Directors, including the Independent Directors, unanimously determined that each of the factors described above, in light of all the other factors and all of the facts and circumstances applicable to the Fund, was acceptable for the Fund and supported the Directors' conclusion that the terms of each Agreement were fair and reasonable, that the Fund's fees are reasonable in light of the services provided to the Fund and that each Agreement should be approved. 22 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 Automatic Dividend Reinvestment Plan How the Plan Works -- The Fund offers a Dividend Reinvestment Plan (the "Plan") under which income and capital gains dividends paid by the Fund are automatically reinvested in additional shares of Common Stock of the Fund. The Plan is administered on behalf of the shareholders by The BNY Mellon Shareowner Services (the "Plan Agent"). Under the Plan, whenever the Fund declares a dividend, participants in the Plan will receive the equivalent in shares of Common Stock of the Fund. The Plan Agent will acquire the shares for the participant's account either (i) through receipt of additional unissued but authorized shares of the Fund ("newly issued shares") or (ii) by purchase of outstanding shares of Common Stock on the open market on the New York Stock Exchange or elsewhere. If, on the dividend payment date, the Fund's net asset value per share is equal to or less than the market price per share plus estimated brokerage commissions (a condition often referred to as a "market premium"), the Plan Agent will invest the dividend amount in newly issued shares. If the Fund's net asset value per share is greater than the market price per share (a condition often referred to as a "market discount"), the Plan Agent will invest the dividend amount by purchasing on the open market additional shares. If the Plan Agent is unable to invest the full dividend amount in open market purchases, or if the market discount shifts to a market premium during the purchase period, the Plan Agent will invest any uninvested portion in newly issued shares. The shares acquired are credited to each shareholder's account. The amount credited is determined by dividing the dollar amount of the dividend by either (i) when the shares are newly issued, the net asset value per share on the date the shares are issued or (ii) when shares are purchased in the open market, the average purchase price per share. Participation in the Plan -- Participation in the Plan is automatic, that is, a shareholder is automatically enrolled in the Plan when he or she purchases shares of Common Stock of the Fund unless the shareholder specifically elects not to participate in the Plan. Shareholders who elect not to participate will receive all dividend distributions in cash. Shareholders who do not wish to participate in the Plan must advise the Plan Agent in writing (at the address set forth below) that they elect not to participate in the Plan. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by writing to the Plan Agent. Benefits of the Plan -- The Plan provides an easy, convenient way for shareholders to make additional, regular investments in the Fund. The Plan promotes a long-term strategy of investing at a lower cost. All shares acquired pursuant to the Plan receive voting rights. In addition, if the market price plus commissions of the Fund's shares is above the net asset value, participants in the Plan will receive shares of the Fund for less than they could otherwise purchase them and with a cash value greater than the value of any cash distribution they would have received. However, there may not be enough shares available in the market to make distributions in shares at prices below the net asset value. Also, since the Fund does not redeem shares, the price on resale may be more or less than the net asset value. Plan Fees -- There are no enrollment fees or brokerage fees for participating in the Plan. The Plan Agent's service fees for handling the reinvestment of distributions are paid for by the Fund. However, brokerage commissions may be incurred when the Fund purchases shares on the open market and shareholders will pay a pro rata share of any such commissions. Tax Implications -- The automatic reinvestment of dividends and distributions will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends. Therefore, income and capital gains may still be realized even though shareholders do not receive cash. Participation in the Plan generally will not affect the tax-exempt status of exempt interest dividends paid by the Fund. If, when the Fund's shares are trading at a market premium, the Fund issues shares pursuant to the Plan that have a greater fair market value than the amount of cash reinvested, it is possible that all or a portion of the discount from the market value (which may not exceed 5% of the fair market value of the Fund's shares) could be viewed as a taxable distribution. If the discount is viewed as a taxable distribution, it is also possible that the taxable character of this discount would be allocable to all the shareholders, including shareholders who do not participate in the Plan. Thus, shareholders who do not participate in the Plan might be required to report as ordinary income a portion of their distributions equal to their allocable share of the discount. Contact Information -- All correspondence concerning the Plan, including any questions about the Plan, should be directed to the Plan Agent at The BNY Mellon Shareowner Services, P.O. Box 358035, Pittsburgh, PA 15252-8035, Telephone: (866) 216-0242. BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 23 Officers and Directors
Number of Length of BlackRock- Position(s) Time Advised Funds Name, Address Held with Served as a Principal Occupation(s) and Portfolios Public and Year of Birth Fund Director 2 During Past Five Years Overseen Directorships ==================================================================================================================================== Non-Interested Directors 1 - ------------------------------------------------------------------------------------------------------------------------------------ Richard E. Cavanagh Chairman Since 2007 Trustee, Aircraft Finance Trust since 113 Funds Arch Chemical 40 East 52nd Street of the Board 1999; Director, The Guardian Life 110 Portfolios (chemical and allied New York, NY 10022 and Director Insurance Company of America since products) 1946 1998; Chairman and Trustee, Educational Testing Service since 1997; Director, The Fremont Group since 1996; Formerly President and Chief Executive Officer of The Conference Board, Inc. (global business research organization) from 1995 to 2007. - ------------------------------------------------------------------------------------------------------------------------------------ Karen P. Robards Vice Chair Since 2007 Partner of Robards & Company, LLC 112 Funds AtriCure, Inc. 40 East 52nd Street of the Board, (financial advisory firm) since 1987; 109 Portfolios (medical devices); New York, NY 10022 Chair of the Co-founder and Director of the Cooke Care Investment Trust, 1950 Audit Center for Learning and Development Inc. (health care Committee (a not-for-profit organization) since REIT) and Director 1987; Formerly Director of Enable Medical Corp. from 1996 to 2005; Formerly an investment banker at Morgan Stanley from 1976 to 1987. - ------------------------------------------------------------------------------------------------------------------------------------ G. Nicholas Beckwith, III Director Since 2007 Chairman and Chief Executive Officer, 112 Funds None 40 East 52nd Street Arch Street Management, LLC (Beckwith 109 Portfolios New York, NY 10022 Family Foundation) and various 1945 Beckwith property companies since 2005; Chairman of the Board of Directors, University of Pittsburgh Medical Center since 2002; Board of Directors, Shady Side Hospital Foundation since 1977; Board of Directors, Beckwith Institute for Innovation In Patient Care since 1991; Member, Advisory Council on Biology and Medicine, Brown University since 2002; Trustee, Claude Worthington Benedum Foundation (charitable foundation) since 1989; Board of Trustees, Chatham College since 1981; Board of Trustees, University of Pittsburgh since 2002; Emeritus Trustee, Shady Side Academy since 1977; Formerly Chairman and Manager, Penn West Industrial Trucks LLC (sales, rental and servicing of material handling equipment) from 2005 to 2007; Formerly Chairman, President and Chief Executive Officer, Beckwith Machinery Company (sales, rental and servicing of construction and equipment) from 1985 to 2005; Formerly Board of Directors, National Retail Properties (REIT) from 2006 to 2007. - ------------------------------------------------------------------------------------------------------------------------------------ Kent Dixon Director and Since 2007 Consultant/Investor since 1988. 113 Funds None 40 East 52nd Street Member of 110 Portfolios New York, NY 10022 the Audit 1937 Committee - ------------------------------------------------------------------------------------------------------------------------------------ Frank J. Fabozzi Director and Since 2007 Consultant/Editor of The Journal of 113 Funds None 40 East 52nd Street Member of Portfolio Management since 2006; 110 Portfolios New York, NY 10022 the Audit Professor in the Practice of Finance 1948 Committee and Becton Fellow, Yale University, School of Management, since 2006; Formerly Adjunct Professor of Finance and Becton Fellow, Yale University from 1994 to 2006. - ------------------------------------------------------------------------------------------------------------------------------------ Kathleen F. Feldstein Director Since 2007 President of Economics Studies, Inc. 113 Funds The McClatchy 40 East 52nd Street (private economic consulting firm) 110 Portfolios Company New York, NY 10022 since 1987; Chair, Board of Trustees, (publishing) 1941 McLean Hospital since 2000; Member of the Board of Partners Community Healthcare, Inc. since 2005; Member of the Board of Partners HealthCare since 1995; Member of the Board of Sherrill House (health care) since 1990; Trustee, Museum of Fine Arts, Boston since 1992; Member of the Visiting Committee to the Harvard University Art Museum since 2003; Trustee, The Committee for Economic Development (research organization) since 1990; Member of the Advisory Board to the International School of Business, Brandeis University since 2002; Formerly Director of Bell South (communications) from 1998 to 2006; Formerly Director of Ionics (water purification) from 1992 to 2005; Formerly Director of John Hancock Financial Services from 1994 to 2003; Formerly Director of Knight Ridder (media) from 1998 to 2006. - ------------------------------------------------------------------------------------------------------------------------------------
24 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 Officers and Directors (continued)
Number of Length of BlackRock- Position(s) Time Advised Funds Name, Address Held with Served as a Principal Occupation(s) and Portfolios Public and Year of Birth Fund Director 2 During Past Five Years Overseen Directorships ==================================================================================================================================== Non-Interested Directors 1 (concluded) - ------------------------------------------------------------------------------------------------------------------------------------ James T. Flynn Director and Since 2007 Formerly Chief Financial Officer of 112 Funds None 40 East 52nd Street Member of JP Morgan & Co., Inc. from 1990 109 Portfolios New York, NY 10022 the Audit to 1995. 1939 Committee - ------------------------------------------------------------------------------------------------------------------------------------ Jerrold B. Harris Director Since 2007 Trustee, Ursinus College since 2000; 112 Funds BlackRock-Kelso 40 East 52nd Street Director, Troemner LLC (scientific 109 Portfolios Capital Corp. New York, NY 10022 equipment) since 2000. 1942 - ------------------------------------------------------------------------------------------------------------------------------------ R. Glenn Hubbard Director Since 2007 Dean of Columbia Business School 113 Funds ADP (data and 40 East 52nd Street since 2004; Columbia faculty 110 Portfolios information services); New York, NY 10022 member since 1988; Formerly KKR Financial 1958 Co-Director of Columbia Business Corporation (finance); School's Entrepreneurship Duke Realty (real Program from 1997 to 2004; estate); Metropolitan Visiting Professor at the John Life Insurance F. Kennedy School of Government Company (insurance); at Harvard University and the Information Services Harvard Business School since Group (media/ 1985 and at the University of technology) Chicago since 1994; Formerly Chairman of the U.S. Council of Economic Advisers under the President of the United States from 2001 to 2003. - ------------------------------------------------------------------------------------------------------------------------------------ W. Carl Kester Director and Since 2007 Mizuho Financial Group Professor 112 Funds None 40 East 52nd Street Member of of Finance, Harvard Business 109 Portfolios New York, NY 10022 the Audit School; Deputy Dean for Academic 1951 Committee Affairs since 2006; Unit Head, Finance, Harvard Business School from 2005 to 2006; Senior Associate Dean and Chairman of the MBA Program of Harvard Business School from 1999 to 2005; Member of the faculty of Harvard Business School since 1981; Independent Consultant since 1978. - ------------------------------------------------------------------------------------------------------------------------------------ Robert S. Salomon, Jr. Director and Since 2007 Formerly Principal of STI Management 112 Funds None 40 East 52nd Street Member of LLC (investment adviser) from 1994 to 109 Portfolios New York, NY 10022 the Audit 2005. 1936 Committee --------------------------------------------------------------------------------------------------------- 1 Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. 2 Following the combination of Merrill Lynch Investment Managers, L.P. ("MLIM") and BlackRock, Inc. ("BlackRock") in September 2006, the various legacy MLIM and legacy BlackRock Fund boards were realigned and consolidated into three new Fund boards in 2007. As a result, although the chart shows certain directors as joining the Fund's board in 2007, each director first became a member of the board of directors of other legacy MLIM or legacy BlackRock Funds as follows: G. Nicholas Beckwith, III since 1999; Richard E. Cavanagh since 1994; Kent Dixon since 1988; Frank J. Fabozzi since 1988; Kathleen F. Feldstein since 2005; James T. Flynn since 1996; Jerrold B. Harris since 1999; R. Glenn Hubbard since 2004; W. Carl Kester since 1998; Karen P. Robards since 1998 and Robert S. Salomon, Jr. since 1996.
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 25 Officers and Directors (continued)
Number of Length of BlackRock- Position(s) Time Advised Funds Name, Address Held with Served as a Principal Occupation(s) and Portfolios Public and Year of Birth Fund Director During Past Five Years Overseen Directorships ==================================================================================================================================== Interested Directors 1 - ------------------------------------------------------------------------------------------------------------------------------------ Richard S. Davis Director Since 2007 Managing Director, BlackRock, 185 Funds None 40 East 52nd Street Inc. since 2005; Formerly Chief 295 Portfolios New York, NY 10022 Executive Officer, State Street 1945 Research & Management Company from 2000 to 2005; Formerly Chairman of the Board of Trustees, State Street Research Mutual Funds from 2000 to 2005; Formerly Chairman, SSR Realty from 2000 to 2004. - ------------------------------------------------------------------------------------------------------------------------------------ Henry Gabbay Director Since 2007 Consultant, BlackRock, Inc. 184 Funds None 40 East 52nd Street since 2007; Formerly Managing 294 Portfolios New York, NY 10022 Director, BlackRock, Inc. from 1947 1989 to 2007; Formerly Chief Administrative Officer, BlackRock Advisors, LLC from 1998 to 2007; Formerly President of BlackRock Funds and BlackRock Bond Allocation Target Shares from 2005 to 2007; Formerly Treasurer of certain closed-end funds in the BlackRock fund complex from 1989 to 2006. --------------------------------------------------------------------------------------------------------- 1 Messrs. Davis and Gabbay are both "interested persons," as defined in the Investment Company Act of 1940, of the Fund based on their positions with BlackRock, Inc. and its affiliates. Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.
26 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008
Position(s) Length of Name, Address Held with Time and Year of Birth Fund Served Principal Occupation(s) During Past Five Years ==================================================================================================================================== Fund Officers 1 - ------------------------------------------------------------------------------------------------------------------------------------ Donald C. Burke Fund Since 2007 Managing Director of BlackRock, Inc. since 2006; Formerly Managing Director of 40 East 52nd Street President Merrill Lynch Investment Managers, L.P. ("MLIM") and Fund Asset Management, New York, NY 10022 and L.P. ("FAM") in 2006; First Vice President thereof from 1997 to 2005; 1960 Chief Treasurer thereof from 1999 to 2006 and Vice President thereof from 1990 to Executive 1997. Officer - ------------------------------------------------------------------------------------------------------------------------------------ Anne F. Ackerley Vice Since 2007 Managing Director of BlackRock, Inc. since 2000; Chief Operating Officer of 40 East 52nd Street President BlackRock's U.S. Retail Group since 2006; Head of BlackRock's Mutual Fund New York, NY 10022 Group from 2000 to 2006; Merrill Lynch & Co., Inc. from 1984 to 1986 and from 1962 1988 to 2000, most recently as First Vice President and Operating Officer of the Mergers and Acquisitions Group. - ------------------------------------------------------------------------------------------------------------------------------------ Neal J. Andrews Chief Since 2007 Managing Director of BlackRock, Inc. since 2006; Formerly Senior Vice 40 East 52nd Street Financial President and Line of Business Head of Fund Accounting and Administration at New York, NY 10022 Officer PFPC Inc. from 1992 to 2006. 1966 - ------------------------------------------------------------------------------------------------------------------------------------ Jay M. Fife Treasurer Since 2007 Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Formerly 40 East 52nd Street Assistant Treasurer of the MLIM/FAM advised funds from 2005 to 2006; Director New York, NY 10022 of MLIM Fund Services Group from 2001 to 2006. 1970 - ------------------------------------------------------------------------------------------------------------------------------------ Brian P. Kindelan Chief Since 2007 Chief Compliance Officer of the BlackRock-advised Funds since 2007; Anti-Money 40 East 52nd Street Compliance Laundering Officer of the BlackRock-advised Funds since 2007; Managing New York, NY 10022 Officer of Director and Senior Counsel of BlackRock, Inc. since 2005; Director and Senior 1959 the Fund Counsel of BlackRock Advisors, Inc. from 2001 to 2004 and Vice President and Senior Counsel thereof from 1998 to 2000; Formerly Senior Counsel of The PNC Bank Corp. from 1995 to 1998. - ------------------------------------------------------------------------------------------------------------------------------------ Howard Surloff Secretary Since 2007 Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds at 40 East 52nd Street BlackRock, Inc. since 2006; Formerly General Counsel (U.S.) of Goldman Sachs New York, NY 10022 Asset Management, L.P. from 1993 to 2006. 1965 --------------------------------------------------------------------------------------------------------- 1 Officers of the Fund serve at the pleasure of the Board of Directors. - ------------------------------------------------------------------------------------------------------------------------------------
Custodian The Bank of New York Mellon New York, NY 10286 Transfer Agent BNY Mellon Shareowner Services Jersey City, NJ 07310 Accounting Agent State Street Bank and Trust Company Princeton, NJ 08540 Independent Registered Public Accounting Firm Deloitte & Touche LLP Princeton, NJ 08540 Legal Counsel Skadden, Arps, Slate, Meagher & Flom LLP New York, NY 10036 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 27 Additional Information Dividend Policy The Fund's dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the Fund may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by the Fund for any particular month may be more or less than the amount of net investment income earned by the Fund during such month. The Fund's current accumulated but undistributed net investment income, if any, is disclosed in the Statement of Assets and Liabilities, which comprises part of the financial information included in this report. Fund Certification The Fund listed for trading on the New York Stock Exchange ("NYSE") has filed with the NYSE its annual chief executive officer certification regarding compliance with the NYSE's listing standards. The Fund filed with the Securities and Exchange Commission ("SEC") the certification of its chief executive officer and chief financial officer required by section 302 of the Sabanes-Oxley Act. Availability of Quarterly Schedule of Investments The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission ("SEC") for the first and third quarters of each fiscal year on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at http://www.sec.gov and may also be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762. Electronic Delivery Electronic copies of most financial reports are available on the Fund's website or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the Fund's electronic delivery program. Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages: Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service. 28 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 Additional Information (continued) General Information The Fund does not make available copies of its Statements of Additional Information because the Fund's shares are not continuously offered, which means that the Statement of Additional Information of the Fund has not been updated after completion of the Fund's offering and the information contained in the Fund's Statement of Additional Information may have become outdated. During the period, there were no material changes in the Fund's investment objective or policies or to the Fund's charter or by-laws that were not approved by the shareholders or in the principal risk factors associated with investment in the Fund. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Fund's portfolio. The Fund will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called "householding" and it is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Fund at (800) 441-7762. Quarterly performance, semi-annual and annual reports and other information regarding the Fund may be found on BlackRock's website, which can be accessed at http://www.blackrock.com. This reference to BlackRock's website is intended to allow investors public access to information regarding the Fund and does not, and is not intended to, incorporate BlackRock's website into this report. Section 19 Notice The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon the Fund's investment experience during the remainder of its fiscal year and may be subject to changes based on the tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
- ------------------------------------------------------------------------------------------------------------------------------------ Total Fiscal Year to Date Percentage of Fiscal Year to Date Cumulative Distributions by Character Cumulative Distributions by Character --------------------------------------------- ------------------------------------------- Net Net Net Realized Return Total Per Net Realized Return Total Per Investment Capital of Common Investment Capital of Common Income Gains Capital Share Income Gains Capital Share - ------------------------------------------------------------------------------------------------------------------------------------ BlackRock MuniAssets Fund, Inc. $0.817500 $0.003166 -- $0.820666 99.6% 0.4% -- 100.0% - ------------------------------------------------------------------------------------------------------------------------------------
BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 29 Additional Information (concluded) BlackRock Privacy Principles BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, "Clients") and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties. If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations. BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites. BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose. We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information. Proxy Voting Policy The Board of Directors of the Fund has delegated the voting of proxies for Fund securities to the Investment Adviser pursuant to the Investment Adviser's proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Fund's stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Adviser's Equity Investment Policy Oversight Committee, or a sub-committee thereof (the "Committee") is aware of the real or potential conflict or material non-routine matter and if the Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Committee may retain an independent fiduciary to advise the Committee on how to vote or to cast votes on behalf of the Investment Adviser's clients. If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Committee shall determine how to vote the proxy after consulting with the Investment Adviser's Portfolio Management Group and/or the Investment Adviser's Legal and Compliance Department and concluding that the vote cast is in its client's best interest notwithstanding the conflict. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC's website at http://www.sec.gov. 30 BLACKROCK MUNIASSETS FUND, INC. MAY 31, 2008 This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. Statements and other information herein are as dated and are subject to change. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling toll-free (800) 441-7762; (2) at www.blackrock.com; and (3) on the Securities and Exchange Commission's website at http://www.sec.gov. Information about how the Fund voted proxies relating to securities held in the Fund's portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at www.blackrock.com or by calling (800) 441-7762 and (2) on the Securities and Exchange Commission's website at http://www.sec.gov. BlackRock MuniAssets Fund, Inc. 100 Bellevue Parkway Wilmington, DE 19809 BLACKROCK #16716-5/08 Item 2 - Code of Ethics - The registrant (or the "Fund") has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant's principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions. During the period covered by this report, there have been no amendments to or waivers granted under the code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com. Item 3 - Audit Committee Financial Expert - The registrant's board of directors or trustees, as applicable (the "board of directors") has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent: Kent Dixon (term began effective November 1, 2007) Frank J. Fabozzi (term began effective November 1, 2007) James T. Flynn (term began effective November 1, 2007) Joe Grills (term ended effective November 1, 2007) W. Carl Kester (term began effective November 1, 2007) Karen P. Robards (term began effective November 1, 2007) Robert S. Salomon, Jr. The registrant's board of directors has determined that W. Carl Kester and Karen P. Robards qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR. Prof. Kester has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Prof. Kester has been involved in providing valuation and other financial consulting services to corporate clients since 1978. Prof. Kester's financial consulting services present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant's financial statements. Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization. Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. Item 4 - Principal Accountant Fees and Services
- ----------------------------------------------------------------------------------------------------------------------------------- (a) Audit Fees (b) Audit-Related Fees(1) (c) Tax Fees(2) (d) All Other Fees(3) - ----------------------------------------------------------------------------------------------------------------------------------- Current Previous Current Previous Current Previous Current Previous Fiscal Year Fiscal Fiscal Year Fiscal Fiscal Year Fiscal Fiscal Year Fiscal Entity Name End Year End End Year End End Year End End Year End - ----------------------------------------------------------------------------------------------------------------------------------- BlackRock $26,400 $28,000 $0 $0 $6,100 $6,100 $1,049 $0 MuniAssets Fund, Inc. - -----------------------------------------------------------------------------------------------------------------------------------
1 The nature of the services include assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees. 2 The nature of the services include tax compliance, tax advice and tax planning. 3 The nature of the services include a review of compliance procedures and attestation thereto. (e)(1) Audit Committee Pre-Approval Policies and Procedures: The registrant's audit committee (the "Committee") has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the registrant's affiliated service providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are a) consistent with the SEC's auditor independence rules and b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis ("general pre-approval"). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operation or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 for all of the registrants the Committee oversees. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels. Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to one or more of its members the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels. (e)(2) None of the services described in each of Items 4(b) through (d) were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. (f) Not Applicable (g) Affiliates' Aggregate Non-Audit Fees: -------------------------------------------------------------------- Current Fiscal Previous Fiscal Entity Name Year End Year End -------------------------------------------------------------------- BlackRock MuniAssets Fund, $294,649 $2,985,417 Inc. -------------------------------------------------------------------- (h) The registrant's audit committee has considered and determined that the provision of non-audit services that were rendered to the registrant's investment adviser (not including any non-affiliated sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by the registrant's investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. Regulation S-X Rule 2-01(c)(7)(ii) - $287,500, 0% Item 5 - Audit Committee of Listed Registrants - The following individuals are members of the registrant's separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)): James H. Bodurtha (term ended effective November 1, 2007) Kent Dixon (term began effective November 1, 2007) Frank J. Fabozzi (term began effective November 1, 2007) James T. Flynn (term began effective November 1, 2007) Kenneth A. Froot (term ended effective November 1, 2007) Joe Grills (term ended effective November 1, 2007) W. Carl Kester (term began effective November 1, 2007) Herbert I. London (term ended effective November 1, 2007) Roberta Cooper Ramo (term ended effective November 1, 2007) Karen P. Robards (term began effective November 1, 2007) Robert S. Salomon, Jr. Item 6 - Investments (a) The registrant's Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form. (b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing. Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies - The registrant has delegated the voting of proxies relating to Fund portfolio securities to its investment adviser, BlackRock Advisors, LLC and its sub-adviser, as applicable. The Proxy Voting Policies of the Fund are attached hereto as Exhibit 99.PROXYPOL. Information about how the Fund voted proxies relating to securities held in the Fund's portfolio during the most recent 12 month period ended June 30 is available without charge (1) at www.blackrock.com and (2) on the Commission's web site at http://www.sec.gov. Item 8 - Portfolio Managers of Closed-End Management Investment Companies - as of May 31, 2008. (a)(1) BlackRock MuniAssets Fund, Inc. is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock, and Walter O'Connor, Managing Director at BlackRock. Each is a member of BlackRock's municipal tax-exempt management group. Mr. Jaeckel and Mr. O'Connor are responsible for the day-to-day management of the Fund's portfolio, including setting the Fund's overall investment strategy, overseeing the management of the Fund and/or selecting the Fund's investments. Mr. O'Connor has been the Fund's portfolio manager since 2006. Mr. Jaeckel has been the Fund's portfolio manager since 1997. Mr. Jaeckel joined BlackRock in 2006. Prior to joining BlackRock, he was a Managing Director (Municipal Tax-Exempt Fund Management) of Merrill Lynch Investment Managers, L.P. ("MLIM") from 2005 to 2006 and a Director of MLIM from 1997 to 2005. He has been a portfolio manager with BlackRock or MLIM since 1991. Mr. O'Connor joined BlackRock in 2006. Prior to joining BlackRock, he was a Managing Director (Municipal Tax-Exempt Fund Management) of MLIM from 2003 to 2006 and was a Director of MLIM from 1997 to 2002. He has been a portfolio manager with BlackRock or MLIM since 1991. (a)(2) As of May 31, 2008:
----------------------------------------------------------------------------------------------------------------------- (iii) Number of Other Accounts and (ii) Number of Other Accounts Managed Assets for Which Advisory Fee is and Assets by Account Type Performance-Based ----------------------------------------------------------------------------------------------------------------------- Other Other Other Other (i) Name of Registered Pooled Registered Pooled Portfolio Investment Investment Other Investment Investment Other Manager Companies Vehicles Accounts Companies Vehicles Accounts ----------------------------------------------------------------------------------------------------------------------- Theodore R. 81 2 0 0 1 0 Jaeckel, Jr. ----------------------------------------------------------------------------------------------------------------------- $28.03 Billion $13.55 $0 $0 $13.54 $0 Million Million ----------------------------------------------------------------------------------------------------------------------- Walter O'Connor 81 1 0 0 0 0 ----------------------------------------------------------------------------------------------------------------------- $28.03 Billion $3,209 $0 $0 $0 $0 -----------------------------------------------------------------------------------------------------------------------
(iv) Potential Material Conflicts of Interest BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made for the Funds. In addition, BlackRock, its affiliates and any officer, director, stockholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, or any of its affiliates, or any officer, director, stockholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock's (or its affiliates') officers, directors or employees are directors or officers, or companies as to which BlackRock or any of its affiliates or the officers, directors or employees of any of them has any substantial economic interest or possesses material non-public information. Each portfolio manager also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a Fund. In this regard, it should be noted that Mr. Jaeckel currently manages certain accounts that are subject to performance fees. In addition, Mr. Jaeckel assists in managing certain hedge funds and may be entitled to receive a portion of any incentive fees earned on such funds and a portion of such incentive fees may be voluntarily or involuntarily deferred. Additional portfolio managers may in the future manage other such accounts or funds and may be entitled to receive incentive fees. As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock has adopted a policy that is intended to ensure that investment opportunities are allocated fairly and equitably among client accounts over time. This policy also seeks to achieve reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base. (a)(3) As of May 31, 2008: Portfolio Manager Compensation Overview BlackRock's financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock such as its Long-Term Retention and Incentive Plan. Base compensation. Generally, portfolio managers receive base compensation based on their seniority and/or their position with the firm. Senior portfolio managers who perform additional management functions within the portfolio management group or within BlackRock may receive additional compensation for serving in these other capacities. Discretionary Incentive Compensation Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager's group within BlackRock, the investment performance, including risk-adjusted returns, of the firm's assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual's seniority, role within the portfolio management team, teamwork and contribution to the overall performance of these portfolios and BlackRock. In most cases, including for the portfolio managers of the Fund, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Fund or other accounts managed by the portfolio managers are measured. BlackRock's Chief Investment Officers determine the benchmarks against which the performance of funds and other accounts managed by each portfolio manager is compared and the period of time over which performance is evaluated. With respect to the portfolio managers, such benchmarks for the Fund include a combination of market-based indices (e.g., Lehman Brothers Municipal Bond Index), certain customized indices and certain fund industry peer groups. BlackRock's Chief Investment Officers make a subjective determination with respect to the portfolio managers' compensation based on the performance of the funds and other accounts managed by each portfolio manager relative to the various benchmarks noted above. Performance is measured on both a pre-tax and after-tax basis over various time periods including 1, 3, 5 and 10-year periods, as applicable. Distribution of Discretionary Incentive Compensation Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of years. The BlackRock, Inc. restricted stock units, if properly vested, will be settled in BlackRock, Inc. common stock. Typically, the cash bonus, when combined with base salary, represents more than 60% of total compensation for the portfolio managers. Paying a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a given year "at risk" based on the BlackRock's ability to sustain and improve its performance over future periods. Long-Term Retention and Incentive Plan ("LTIP") --The LTIP is a long-term incentive plan that seeks to reward certain key employees. Beginning in 2006, awards are granted under the LTIP in the form of BlackRock, Inc. restricted stock units that, if properly vested and subject to the attainment of certain performance goals, will be settled in BlackRock, Inc. common stock. Each portfolio manager has received awards under the LTIP. Deferred Compensation Program --A portion of the compensation paid to eligible BlackRock employees may be voluntarily deferred into an account that tracks the performance of certain of the firm's investment products. Each participant in the deferred compensation program is permitted to allocate his deferred amounts among the various investment options. Each portfolio manager has participated in the deferred compensation program. Other compensation benefits. In addition to base compensation and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following: Incentive Savings Plans -- BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 6% of eligible pay contributed to the plan capped at $4,000 per year, and a company retirement contribution equal to 3% of eligible compensation, plus an additional contribution of 2% for any year in which BlackRock has positive net operating income. The RSP offers a range of investment options, including registered investment companies managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent employee investment direction, are invested into a balanced portfolio. The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares or a dollar value of $25,000. Each portfolio manager is eligible to participate in these plans. (a)(4) Beneficial Ownership of Securities. As of May 31, 2008, neither Mr. Jaeckel or Mr. O'Connor beneficially owned any stock issued by the Fund. Item 9 - Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers - Not Applicable due to no such purchases during the period covered by this report. Item 10 - Submission of Matters to a Vote of Security Holders - The registrant's Nominating and Governance Committee will consider nominees to the board of directors recommended by shareholders when a vacancy becomes available. Shareholders who wish to recommend a nominee should send nominations which include biographical information and set forth the qualifications of the proposed nominee to the registrant's Secretary. There have been no material changes to these procedures. Item 11 - Controls and Procedures 11(a) - The registrant's principal executive and principal financial officers or persons performing similar functions have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act")) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended. 11(b) - There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12 - Exhibits attached hereto 12(a)(1) - Code of Ethics - See Item 2 12(a)(2) - Certifications - Attached hereto 12(a)(3) - Not Applicable 12(b) - Certifications - Attached hereto Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BlackRock MuniAssets Fund, Inc. By: /s/ Donald C. Burke ----------------------------------- Donald C. Burke Chief Executive Officer of BlackRock MuniAssets Fund, Inc. Date: July 18, 2008 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Donald C. Burke ----------------------------------- Donald C. Burke Chief Executive Officer (principal executive officer) of BlackRock MuniAssets Fund, Inc. Date: July 18, 2008 By: /s/ Neal J. Andrews ----------------------------------- Neal J. Andrews Chief Financial Officer (principal financial officer) of BlackRock MuniAssets Fund, Inc. Date: July 18, 2008 EX-99.PROXYPOL 2 e604068_ex99-proxypol.txt Proxy Voting Policies and Procedures For BlackRock Advisors, LLC And Its Affiliated SEC Registered Investment Advisers Amended and Restated March 5, 2008 Table of Contents Page Introduction............................................................... Scope of Committee Responsibilities........................................ Special Circumstances...................................................... Voting Guidelines.......................................................... Boards of Directors.................................................... Auditors............................................................... Compensation and Benefits.............................................. Capital Structure...................................................... Corporate Charter and By-Laws.......................................... Corporate Meetings..................................................... Investment Companies................................................... Environmental and Social Issues........................................ Notice to Clients.......................................................... Proxy Voting Policies and Procedures These Proxy Voting Policies and Procedures ("Policy") for BlackRock Advisors, LLC and its affiliated U.S. registered investment advisers(1) ("BlackRock"), which were effective October 1, 2006 and Amended and Restated March 5, 2008, reflect our duty as a fiduciary under the Investment Advisers Act of 1940 (the "Advisers Act") to vote proxies in the best interests of our clients. BlackRock serves as the investment manager for investment companies, other commingled investment vehicles and/or separate accounts of institutional and other clients. The right to vote proxies for securities held in such accounts belongs to BlackRock's clients. Certain clients of BlackRock have retained the right to vote such proxies in general or in specific circumstances.(2) Other clients, however, have delegated to BlackRock the right to vote proxies for securities held in their accounts as part of BlackRock's authority to manage, acquire and dispose of account assets. When BlackRock votes proxies for a client that has delegated to BlackRock proxy voting authority, BlackRock acts as the client's agent. Under the Advisers Act, an investment adviser is a fiduciary that owes each of its clients a duty of care and loyalty with respect to all services the adviser undertakes on the client's behalf, including proxy voting. BlackRock is therefore subject to a fiduciary duty to vote proxies in a manner BlackRock believes is consistent with the client's best interests,(3) whether or not the client's proxy voting is subject to the fiduciary standards of the Employee Retirement Income Security Act of 1974 ("ERISA").(4) When voting proxies for client accounts (including investment companies), BlackRock's primary objective is to make voting decisions solely in the best interests of clients and ERISA clients' plan beneficiaries and participants. In fulfilling its obligations to clients, BlackRock will seek to act in a manner that it believes is most likely to enhance the economic value of the underlying securities held in client accounts.(5) It is imperative that BlackRock considers the interests of its clients, and not the interests of BlackRock, when voting proxies and that real (or perceived) material conflicts that may arise between BlackRock's interest and those of BlackRock's clients are properly addressed and resolved. - ---------- (1) The Policy does not apply to BlackRock Asset Management U.K. Limited and BlackRock Investment Managers International Limited, which are U.S. registered investment advisers based in the United Kingdom. (2) In certain situations, a client may direct BlackRock to vote in accordance with the client's proxy voting policies. In these situations, BlackRock will seek to comply with such policies to the extent it would not be inconsistent with other BlackRock legal responsibilities. (3) Letter from Harvey L. Pitt, Chairman, SEC, to John P.M. Higgins, President, Ram Trust Services (February 12, 2002) (Section 206 of the Investment Advisers Act imposes a fiduciary responsibility to vote proxies fairly and in the best interests of clients); SEC Release No. IA-2106 (February 3, 2003). (4) DOL Interpretative Bulletin of Sections 402, 403 and 404 of ERISA at 29 C.F.R. 2509.94-2 (5) Other considerations, such as social, labor, environmental or other policies, may be of interest to particular clients. While BlackRock is cognizant of the importance of such considerations, when voting proxies it will generally take such matters into account only to the extent that they have a direct bearing on the economic value of the underlying securities. To the extent that a BlackRock client desires to pursue a particular social, labor, environmental or other agenda through the proxy votes made for its securities held through BlackRock as investment adviser, BlackRock encourages the client to consider retaining direct proxy voting authority or to appoint independently a special proxy voting fiduciary other than BlackRock. Advisers Act Rule 206(4)-6 was adopted by the SEC in 2003 and requires, among other things, that an investment adviser that exercises voting authority over clients' proxy voting adopt policies and procedures reasonably designed to ensure that the adviser votes proxies in the best interests of clients, discloses to its clients information about those policies and procedures and also discloses to clients how they may obtain information on how the adviser has voted their proxies. In light of such fiduciary duties, the requirements of Rule 206(4)-6, and given the complexity of the issues that may be raised in connection with proxy votes, BlackRock has adopted these policies and procedures. BlackRock's Equity Investment Policy Oversight Committee, or a sub-committee thereof (the "Committee"), addresses proxy voting issues on behalf of BlackRock and its clients.(6) The Committee is comprised of senior members of BlackRock's Portfolio Management Group and advised by BlackRock's Legal and Compliance Department. - ---------- (6) Subject to the Proxy Voting Policies of Merrill Lynch Bank & Trust Company FSB, the Committee may also function jointly as the Proxy Voting Committee for Merrill Lynch Bank & Trust Company FSB trust accounts managed by personnel dually-employed by BlackRock. I. Scope of Committee Responsibilities The Committee shall have the responsibility for determining how to address proxy votes made on behalf of all BlackRock clients, except for clients who have retained the right to vote their own proxies, either generally or on any specific matter. In so doing, the Committee shall seek to ensure that proxy votes are made in the best interests of clients, and that proxy votes are determined in a manner free from unwarranted or inappropriate influences. The Committee shall also oversee the overall administration of proxy voting for BlackRock accounts.(7) The Committee shall establish BlackRock's proxy voting guidelines, with such advice, participation and research as the Committee deems appropriate from portfolio managers, proxy voting services or other knowledgeable interested parties. As it is anticipated that there will not necessarily be a "right" way to vote proxies on any given issue applicable to all facts and circumstances, the Committee shall also be responsible for determining how the proxy voting guidelines will be applied to specific proxy votes, in light of each issuer's unique structure, management, strategic options and, in certain circumstances, probable economic and other anticipated consequences of alternative actions. In so doing, the Committee may determine to vote a particular proxy in a manner contrary to its generally stated guidelines. The Committee may determine that the subject matter of certain proxy issues are not suitable for general voting guidelines and requires a case-by-case determination, in which case the Committee may elect not to adopt a specific voting guideline applicable to such issues. BlackRock believes that certain proxy voting issues - such as approval of mergers and other significant corporate transactions - require investment analysis akin to investment decisions, and are therefore not suitable for general guidelines. The Committee may elect to adopt a common BlackRock position on certain proxy votes that are akin to investment decisions, or determine to permit portfolio managers to make individual decisions on how best to maximize economic value for the accounts for which they are responsible (similar to normal buy/sell investment decisions made by such portfolio managers).(8) While it is expected that BlackRock, as a fiduciary, will generally seek to vote proxies over which BlackRock exercises voting authority in a uniform manner for all BlackRock clients, the Committee, in conjunction with the portfolio manager of an account, may determine that the specific circumstances of such account require that such account's proxies be voted differently due to such account's investment objective or other factors that differentiate it from other accounts. In addition, on proxy votes that are akin to investment - ---------- (7) The Committee may delegate day-to-day administrative responsibilities to other BlackRock personnel and/or outside service providers, as appropriate. (8) The Committee will normally defer to portfolio managers on proxy votes that are akin to investment decisions except for proxy votes that involve a material conflict of interest, in which case it will determine, in its discretion, the appropriate voting process so as to address such conflict. decisions, BlackRock believes portfolio managers may from time to time legitimately reach differing but equally valid views, as fiduciaries for BlackRock's clients, on how best to maximize economic value in respect of a particular investment. The Committee will also be responsible for ensuring the maintenance of records of each proxy vote, as required by Advisers Act Rule 204-2.(9) All records will be maintained in accordance with applicable law. Except as may be required by applicable legal requirements, or as otherwise set forth herein, the Committee's determinations and records shall be treated as proprietary, nonpublic and confidential. The Committee shall be assisted by other BlackRock personnel, as may be appropriate. In particular, the Committee has delegated to the BlackRock Operations Department responsibility for monitoring corporate actions and ensuring that proxy votes are submitted in a timely fashion. The Operations Department shall ensure that proxy voting issues are promptly brought to the Committee's attention and that the Committee's proxy voting decisions are appropriately disseminated and implemented. To assist BlackRock in voting proxies, the Committee may retain the services of a firm providing such services. BlackRock has currently retained Institutional Shareholder Services ("ISS") in that role. ISS is an independent adviser that specializes in providing a variety of fiduciary-level proxy-related services to institutional investment managers, plan sponsors, custodians, consultants, and other institutional investors. The services provided to BlackRock may include, but are not limited to, in-depth research, voting recommendations (which the Committee is not obligated to follow), vote execution, and recordkeeping. - ---------- (9) The Committee may delegate the actual maintenance of such records to an outside service provider. Currently, the Committee has delegated the maintenance of such records to Institutional Shareholder Services. II. Special Circumstances Routine Consents. BlackRock may be asked from time to time to consent to an amendment to, or grant a waiver under, a loan agreement, partnership agreement, indenture or other governing document of a specific financial instrument held by BlackRock clients. BlackRock will generally treat such requests for consents not as "proxies" subject to these Proxy Voting Policies and Procedures but as investment matters to be dealt with by the responsible BlackRock investment professionals would, provided that such consents (i) do not relate to the election of a board of directors or appointment of auditors of a public company, and (ii) either (A) would not otherwise materially affect the structure, management or control of a public company, or (B) relate to a company in which BlackRock clients hold only interests in bank loans or debt securities and are consistent with customary standards and practices for such instruments. Securities on Loan. Registered investment companies that are advised by BlackRock as well as certain of our advisory clients may participate in securities lending programs. Under most securities lending arrangements, securities on loan may not be voted by the lender (unless the loan is recalled). BlackRock believes that each client has the right to determine whether participating in a securities lending program enhances returns, to contract with the securities lending agent of its choice and to structure a securities lending program, through its lending agent, that balances any tension between loaning and voting securities in a matter that satisfies such client. If client has decided to participate in a securities lending program, BlackRock will therefore defer to the client's determination and not attempt to seek recalls solely for the purpose of voting routine proxies as this could impact the returns received from securities lending and make the client a less desirable lender in a marketplace. Where a client retains a lending agent that is unaffiliated with BlackRock, BlackRock will generally not seek to vote proxies relating to securities on loan because BlackRock does not have a contractual right to recall such loaned securities for the purpose of voting proxies. Where BlackRock or an affiliate acts as the lending agent, BlackRock will also generally not seek to recall loaned securities for proxy voting purposes, unless the portfolio manager responsible for the account or the Committee determines that voting the proxy is in the client's best interest and requests that the security be recalled. Voting Proxies for Non-US Companies. While the proxy voting process is well established in the United States, voting proxies of non-US companies frequently involves logistical issues which can affect BlackRock's ability to vote such proxies, as well as the desirability of voting such proxies. These issues include (but are not limited to): (i) untimely notice of shareholder meetings, (ii) restrictions on a foreigner's ability to exercise votes, (iii) requirements to vote proxies in person, (iv) "shareblocking" (requirements that investors who exercise their voting rights surrender the right to dispose of their holdings for some specified period in proximity to the shareholder meeting), (v) potential difficulties in translating the proxy, and (vi) requirements to provide local agents with unrestricted powers of attorney to facilitate voting instructions. As a consequence, BlackRock votes proxies of non-US companies only on a "best-efforts" basis. In addition, the Committee may determine that it is generally in the best interests of BlackRock clients not to vote proxies of companies in certain countries if the Committee determines that the costs (including but not limited to opportunity costs associated with shareblocking constraints) associated with exercising a vote generally are expected to outweigh the benefit the client will derive by voting on the issuer's proposal. If the Committee so determines in the case of a particular country, the Committee (upon advice from BlackRock portfolio managers) may override such determination with respect to a particular issuer's shareholder meeting if the Committee believes the benefits of seeking to exercise a vote at such meeting outweighs the costs, in which case BlackRock will seek to vote on a best-efforts basis. Securities Sold After Record Date. With respect to votes in connection with securities held on a particular record date but sold from a client account prior to the holding of the related meeting, BlackRock may take no action on proposals to be voted on in such meeting. Conflicts of Interest. From time to time, BlackRock may be required to vote proxies in respect of an issuer that is an affiliate of BlackRock (a "BlackRock Affiliate"), or a money management or other client of BlackRock (a "BlackRock Client").(10) In such event, provided that the Committee is aware of the real or potential conflict, the following procedures shall apply: o The Committee intends to adhere to the voting guidelines set forth herein for all proxy issues including matters involving BlackRock Affiliates and BlackRock Clients. If, however, the matter to be voted on represents a non-routine matter that is material to a BlackRock Affiliate or a BlackRock Client and the Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Committee may, in its discretion for the purposes of ensuring that an independent determination is reached, retain an independent fiduciary to advise the Committee on how to vote or to cast votes on behalf of BlackRock's clients; and o if the Committee determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Committee shall determine how to vote the proxy after consulting with the BlackRock Legal and Compliance Department and concluding that the vote cast is in the client's best interest notwithstanding the conflict. - ---------- (10) Such issuers may include investment companies for which BlackRock provides investment advisory, administrative and/or other services. III. Voting Guidelines The Committee has determined that it is appropriate and in the best interests of BlackRock's clients to adopt the following voting guidelines, which represent the Committee's usual voting position on certain recurring proxy issues that are not expected to involve unusual circumstances. With respect to any particular proxy issue, however, the Committee may elect to vote differently than a voting guideline if the Committee determines that doing so is, in the Committee's judgment, in the best interest of its clients. The guidelines may be reviewed at any time upon the request of any Committee member and may be amended or deleted upon the vote of a majority of voting Committee members present at a Committee meeting for which there is a quorum. A. Boards of Directors These proposals concern those issues submitted to shareholders relating to the composition of the Board of Directors of companies other than investment companies. As a general matter, the Committee believes that a company's Board of Directors (rather than shareholders) is most likely to have access to important, nonpublic information regarding a company's business and prospects, and is therefore best-positioned to set corporate policy and oversee management. The Committee therefore believes that the foundation of good corporate governance is the election of qualified, independent corporate directors who are likely to diligently represent the interests of shareholders and oversee management of the corporation in a manner that will seek to maximize shareholder value over time. In individual cases, the Committee may look at a Director nominee's history of representing shareholder interests as a director of other companies, or other factors to the extent the Committee deems relevant. The Committee's general policy is to vote: - -------------------------------------------------------------------------------- # VOTE and DESCRIPTION - -------------------------------------------------------------------------------- A.1 FOR nominees for director of United States companies in uncontested elections, except for nominees who o have missed at least two meetings and, as a result, attended less than 75% of meetings of the Board of Directors and its committees the previous year, unless the nominee missed the meeting(s) due to illness or company business o voted to implement or renew a "dead-hand" poison pill o ignored a shareholder proposal that was approved by either a majority of the shares outstanding in any year or by the majority of votes cast for two consecutive years o failed to act on takeover offers where the majority of the shareholders have tendered their shares o are corporate insiders who serve on the audit, compensation or nominating committees or on a full Board that does not have such committees composed exclusively of independent directors o on a case-by-case basis, have served as directors of other companies with allegedly poor corporate governance o sit on more than six boards of public companies - -------------------------------------------------------------------------------- A.2 FOR nominees for directors of non-U.S. companies in uncontested elections, except for nominees from whom the Committee determines to withhold votes due to the nominees' poor records of representing shareholder interests, on a case-by-case basis - -------------------------------------------------------------------------------- A.3 FOR proposals to declassify Boards of Directors, except where there exists a legitimate purpose for classifying boards - -------------------------------------------------------------------------------- A.4 AGAINST proposals to classify Boards of Directors, except where there exists a legitimate purpose for classifying boards - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- A.5 AGAINST proposals supporting cumulative voting - -------------------------------------------------------------------------------- A.6 FOR proposals eliminating cumulative voting - -------------------------------------------------------------------------------- A.7 FOR proposals supporting confidential voting - -------------------------------------------------------------------------------- A.8 FOR proposals seeking election of supervisory board members - -------------------------------------------------------------------------------- A.9 AGAINST shareholder proposals seeking additional representation of women and/or minorities generally (i.e., not specific individuals) to a Board of Directors - -------------------------------------------------------------------------------- A.10 AGAINST shareholder proposals for term limits for directors - -------------------------------------------------------------------------------- A.11 FOR shareholder proposals to establish a mandatory retirement age for directors who attain the age of 72 or older - -------------------------------------------------------------------------------- A.12 AGAINST shareholder proposals requiring directors to own a minimum amount of company stock - -------------------------------------------------------------------------------- A.13 FOR proposals requiring a majority of independent directors on a Board of Directors - -------------------------------------------------------------------------------- A.14 FOR proposals to allow a Board of Directors to delegate powers to a committee or committees - -------------------------------------------------------------------------------- A.15 FOR proposals to require audit, compensation and/or nominating committees of a Board of Directors to consist exclusively of independent directors - -------------------------------------------------------------------------------- A.16 AGAINST shareholder proposals seeking to prohibit a single person from occupying the roles of chairman and chief executive officer - -------------------------------------------------------------------------------- A.17 FOR proposals to elect account inspectors - -------------------------------------------------------------------------------- A.18 FOR proposals to fix the membership of a Board of Directors at a specified size - -------------------------------------------------------------------------------- A.19 FOR proposals permitting shareholder ability to nominate directors directly - -------------------------------------------------------------------------------- A.20 AGAINST proposals to eliminate shareholder ability to nominate directors directly - -------------------------------------------------------------------------------- A.21 FOR proposals permitting shareholder ability to remove directors directly - -------------------------------------------------------------------------------- A.22 AGAINST proposals to eliminate shareholder ability to remove directors directly - -------------------------------------------------------------------------------- A.23 FOR shareholder proposals requiring the position of chair be filled by an independent director unless there are compelling reasons to recommend against the proposal, such as a counterbalancing governance structure - -------------------------------------------------------------------------------- A.24 FOR precatory and binding resolutions requesting that the board change the company's by-laws to stipulate that directors need to be elected with an affirmative majority of votes cast, provided it does not conflict with the state law where the company is incorporated. Binding resolutions need to allow for a carve-out for a plurality vote standard when there are more nominees than board seats - -------------------------------------------------------------------------------- A.25 AGAINST shareholder proposals requiring two candidates per board seat - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- A.26 AGAINST proposals to eliminate entirely directors' and officers' liability for monetary damages for violating the duty of care - -------------------------------------------------------------------------------- A.27 AGAINST indemnification proposals that would expand coverage beyond just legal expenses to liability for acts, such as negligence, that are more serious violations of fiduciary obligation than mere carelessness - -------------------------------------------------------------------------------- A.28 AGAINST proposals that would expand the scope of indemnification to provide for mandatory indemnification of company officials in connection with acts that previously the company was permitted to provide indemnification for at the discretion of the company's board (i.e. "permissive indemnification"), but that previously the company was not required to indemnify - -------------------------------------------------------------------------------- A.29 FOR only those proposals providing such expanded coverage in cases when a director's or officer's legal defense was unsuccessful if both of the following apply: o If the director was found to have acted in good faith and in a manner that he or she reasonably believed was in the best interests of the company; and o If only the director's legal expenses would be covered - -------------------------------------------------------------------------------- A.30 AGAINST proposals that provide that directors may be removed only for cause - -------------------------------------------------------------------------------- A.31 FOR proposals to restore shareholders' ability to remove directors with or without cause - -------------------------------------------------------------------------------- A.32 AGAINST proposals that provide that only continuing directors may elect replacements to fill board vacancies - -------------------------------------------------------------------------------- A.33 FOR proposals that permit shareholders to elect directors to fill board vacancies, provided that it is understood that investment company directors may fill Board vacancies as permitted by the Investment Company Act of 1940, as amended - -------------------------------------------------------------------------------- B. Auditors These proposals concern those issues submitted to shareholders related to the selection of auditors. As a general matter, the Committee believes that corporate auditors have a responsibility to represent the interests of shareholders and provide an independent view on the propriety of financial reporting decisions of corporate management. While the Committee will generally defer to a corporation's choice of auditor, in individual cases, the Committee may look at an auditors' history of representing shareholder interests as auditor of other companies, to the extent the Committee deems relevant. The Committee's general policy is to vote: - -------------------------------------------------------------------------------- B.1 FOR approval of independent auditors, except for o auditors that have a financial interest in, or material association with, the company they are auditing, and are therefore believed by the Committee not to be independent o auditors who have rendered an opinion to any company which in the Committee's opinion is either not consistent with best accounting practices or not indicative of the company's financial situation o on a case-by-case basis, auditors who in the Committee's opinion provide a significant amount of non-audit services to the company - -------------------------------------------------------------------------------- B.2 FOR proposals seeking authorization to fix the remuneration of auditors - -------------------------------------------------------------------------------- B.3 FOR approving internal statutory auditors - -------------------------------------------------------------------------------- B.4 FOR proposals for audit firm rotation, except for proposals that would require rotation after a period of less than 5 years - -------------------------------------------------------------------------------- C. Compensation and Benefits These proposals concern those issues submitted to shareholders related to management compensation and employee benefits. As a general matter, the Committee favors disclosure of a company's compensation and benefit policies and opposes excessive compensation, but believes that compensation matters are normally best determined by a corporation's board of directors, rather than shareholders. Proposals to "micro-manage" a company's compensation practices or to set arbitrary restrictions on compensation or benefits will therefore generally not be supported. The Committee's general policy is to vote: - -------------------------------------------------------------------------------- C.1 IN ACCORDANCE WITH THE RECOMMENDATION OF ISS on compensation plans if the ISS recommendation is based solely on whether or not the company's plan satisfies the allowable cap as calculated by ISS. If the recommendation of ISS is based on factors other than whether the plan satisfies the allowable cap the Committee will analyze the particular proposed plan. This policy applies to amendments of plans as well as to initial approvals. - -------------------------------------------------------------------------------- C.2 FOR proposals to eliminate retirement benefits for outside directors - -------------------------------------------------------------------------------- C.3 AGAINST proposals to establish retirement benefits for outside directors - -------------------------------------------------------------------------------- C.4 FOR proposals approving the remuneration of directors or of supervisory board members - -------------------------------------------------------------------------------- C.5 AGAINST proposals to reprice stock options - -------------------------------------------------------------------------------- C.6 FOR proposals to approve employee stock purchase plans that apply to all employees. This policy applies to proposals to amend ESPPs if the plan as amended applies to all employees. - -------------------------------------------------------------------------------- C.7 FOR proposals to pay retirement bonuses to directors of Japanese companies unless the directors have served less than three years - -------------------------------------------------------------------------------- C.8 AGAINST proposals seeking to pay outside directors only in stock - -------------------------------------------------------------------------------- C.9 FOR proposals seeking further disclosure of executive pay or requiring companies to report on their supplemental executive retirement benefits - -------------------------------------------------------------------------------- C.10 AGAINST proposals to ban all future stock or stock option grants to executives - -------------------------------------------------------------------------------- C.11 AGAINST option plans or grants that apply to directors or employees of "related companies" without adequate disclosure of the corporate relationship and justification of the option policy - -------------------------------------------------------------------------------- C.12 FOR proposals to exclude pension plan income in the calculation of earnings used in determining executive bonuses/compensation - -------------------------------------------------------------------------------- C.13 FOR shareholder proposals - based on a case-by-case analysis - that request the Board to establish a pay-for-superior performance standard in the company's executive compensation plan for senior executives - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- C.14 AGAINST executive compensation plans in which there is a no connection between the CEO's pay and company performance (e.g., the plan calls for an increase in pay and when there has been a decrease in company performance - -------------------------------------------------------------------------------- C.15 WITHHOLD votes from the Compensation Committee members when company compensation plan has no connection between executive pay and company performance - -------------------------------------------------------------------------------- C.16 FOR shareholder proposals that call for non-binding shareholder ratification of the compensation of the named Executive Officers and the accompanying narrative disclosure of material factors provided to understand the Summary Compensation Table - -------------------------------------------------------------------------------- C.17 FOR shareholder proposals seeking disclosure regarding the company, Board, or Board committee's use of compensation consultants, such as company name, business relationship(s) and fees paid - -------------------------------------------------------------------------------- C.18 AGAINST shareholder proposals seeking to set absolute levels on compensation or otherwise dictate the amount or form of compensation - -------------------------------------------------------------------------------- C.19 FOR shareholder proposals to require golden parachutes or executive severance agreements to be submitted for shareholder ratification, unless the proposal requires shareholder approval prior to entering into employment contracts - -------------------------------------------------------------------------------- C.20 FOR shareholder proposals requesting to put extraordinary benefits contained in Supplemental Executive Retirement Plans ("SERP") agreements to a shareholder vote unless the company's executive pension plans do not contain excessive benefits beyond what is offered under employee-wide plans - -------------------------------------------------------------------------------- C.21 FOR shareholder proposals requesting to limit the executive benefits provided under the company's supplemental executive retirement plan (SERP) by limiting covered compensation to a senior executive's annual salary and excluding all incentive or bonus pay from the SERP's definition of covered compensation used to establish such benefits - -------------------------------------------------------------------------------- C.22 AGAINST the equity plan if any of the following factors apply: o The total cost of the company's equity plans is unreasonable; o The plan expressly permits the repricing of stock options without prior shareholder approval; o There is a disconnect between CEO pay and the company's performance; and/or o The plan is a vehicle for poor compensation practices - -------------------------------------------------------------------------------- C.23 FOR equity plans for non-employee director on a case-by-case basis based on the structure of the plan - -------------------------------------------------------------------------------- C.24 AGAINST plans if the company has a history of repricing options without shareholder approval, and the applicable listing standards would not preclude them from doing so - -------------------------------------------------------------------------------- C.25 FOR shareholder proposals to put option repricings to a shareholder vote - -------------------------------------------------------------------------------- D. Capital Structure These proposals relate to various requests, principally from management, for approval of amendments that would alter the capital structure of a company, such as an increase in authorized shares. As a general matter, the Committee will support requests that it believes enhance the rights of common shareholders and oppose requests that appear to be unreasonably dilutive. The Committee's general policy is to vote: - -------------------------------------------------------------------------------- D.1 AGAINST proposals seeking authorization to issue shares without preemptive rights except for issuances up to 10% of a non-US company's total outstanding capital - -------------------------------------------------------------------------------- D.2 FOR management proposals seeking preemptive rights or seeking authorization to issue shares with preemptive rights - -------------------------------------------------------------------------------- D.3 FOR management proposals approving share repurchase programs - -------------------------------------------------------------------------------- D.4 FOR management proposals to split a company's stock - -------------------------------------------------------------------------------- D.5 FOR management proposals to denominate or authorize denomination of securities or other obligations or assets in Euros - -------------------------------------------------------------------------------- D.6 FOR proposals requiring a company to expense stock options (unless the company has already publicly committed to do so by a certain date) - -------------------------------------------------------------------------------- D.7 AGAINST proposals to create a new class of common stock with superior voting rights - -------------------------------------------------------------------------------- D.8 AGAINST proposals at companies with dual-class capital structures to increase the number of authorized shares of the class of stock that has superior voting rights - -------------------------------------------------------------------------------- D.9 FOR proposals to create a new class of nonvoting or sub-voting common stock if: o It is intended for financing purposes with minimal or no dilution to current shareholders; and o It is not designed to preserve the voting power of an insider or significant shareholder - -------------------------------------------------------------------------------- D.10 AGAINST proposals authorizing the creation of new classes of preferred stock with unspecified voting, conversion, dividend distribution, and other rights ("blank check" preferred stock) - -------------------------------------------------------------------------------- D.11 FOR proposals to authorize preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock and the terms of the preferred stock appear reasonable - -------------------------------------------------------------------------------- D.12 FOR management proposals to implement a reverse stock split when the number of authorized shares will be proportionately reduced - -------------------------------------------------------------------------------- D.13 FOR management proposals to implement a reverse stock split to avoid delisting - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- D.14 FOR management proposals to increase the common share authorization for a stock split or share dividend - -------------------------------------------------------------------------------- D.15 FOR management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms - -------------------------------------------------------------------------------- E. Corporate Charter and By-Laws These proposals relate to various requests for approval of amendments to a corporation's charter or by-laws, principally for the purpose of adopting or redeeming "poison pills". As a general matter, the Committee opposes poison pill provisions. The Committee's general policy is to vote: - -------------------------------------------------------------------------------- E.1 AGAINST proposals seeking to adopt a poison pill - -------------------------------------------------------------------------------- E.2 FOR proposals seeking to redeem a poison pill - -------------------------------------------------------------------------------- E.3 FOR proposals seeking to have poison pills submitted to shareholders for ratification - -------------------------------------------------------------------------------- E.4 FOR management proposals to change the company's name - -------------------------------------------------------------------------------- E.5 AGAINST proposals to require a supermajority shareholder vote - -------------------------------------------------------------------------------- E.6 FOR proposals to lower supermajority vote requirements - -------------------------------------------------------------------------------- E.7 AGAINST proposals giving the board exclusive authority to amend the bylaws - -------------------------------------------------------------------------------- E.8 FOR proposals giving the board the ability to amend the bylaws in addition to shareholders - -------------------------------------------------------------------------------- E.9 CASE-BY-CASE on proposals to change a company's state of incorporation, taking into consideration both financial and corporate governance concerns, including: - The reasons for reincorporating - A comparison of the governance provisions - Comparative economic benefits, and - A comparison of the jurisdiction laws - -------------------------------------------------------------------------------- E.10 FOR re-incorporation when the economic factors outweigh any neutral or negative governance changes - -------------------------------------------------------------------------------- E.11 FOR proposals to restore, or provide shareholders with rights of appraisal - -------------------------------------------------------------------------------- F. Corporate Meetings These are routine proposals relating to various requests regarding the formalities of corporate meetings. The Committee's general policy is to vote: - -------------------------------------------------------------------------------- F.1 AGAINST proposals that seek authority to act on "any other business that may arise" - -------------------------------------------------------------------------------- F.2 FOR proposals designating two shareholders to keep minutes of the meeting - -------------------------------------------------------------------------------- F.3 FOR proposals concerning accepting or approving financial statements and statutory reports - -------------------------------------------------------------------------------- F.4 FOR proposals approving the discharge of management and the supervisory board - -------------------------------------------------------------------------------- F.5 FOR proposals approving the allocation of income and the dividend - -------------------------------------------------------------------------------- F.6 FOR proposals seeking authorization to file required documents/other formalities - -------------------------------------------------------------------------------- F.7 FOR proposals to authorize the corporate board to ratify and execute approved resolutions - -------------------------------------------------------------------------------- F.8 FOR proposals appointing inspectors of elections - -------------------------------------------------------------------------------- F.9 FOR proposals electing a chair of the meeting - -------------------------------------------------------------------------------- F.10 FOR proposals to permit "virtual" shareholder meetings over the Internet - -------------------------------------------------------------------------------- F.11 AGAINST proposals to require rotating sites for shareholder meetings - -------------------------------------------------------------------------------- F.12 AGAINST proposals that are substantially duplicative (i.e., shareholder proposals that are unnecessary because a management proposal serves the same purpose) - -------------------------------------------------------------------------------- G. Investment Companies These proposals relate to proxy issues that are associated solely with holdings of shares of investment companies, including, but not limited to, investment companies for which BlackRock provides investment advisory, administrative and/or other services. As with other types of companies, the Committee believes that a fund's Board of Directors (rather than its shareholders) is best-positioned to set fund policy and oversee management. However, the Committee opposes granting Boards of Directors authority over certain matters, such as changes to a fund's investment objective, that the Investment Company Act of 1940 envisions will be approved directly by shareholders. The Committee's general policy is to vote: - -------------------------------------------------------------------------------- G.1 FOR nominees for director of mutual funds in uncontested elections, except for nominees who o have missed at least two meetings and, as a result, attended less than 75% of meetings of the Board of Directors and its committees the previous year, unless the nominee missed the meeting due to illness or fund business o ignore a shareholder proposal that was approved by either a majority of the shares outstanding in any year or by the majority of votes cast for two consecutive years o are interested directors who serve on the audit or nominating committees or on a full Board that does not have such committees composed exclusively of independent directors o on a case-by-case basis, have served as directors of companies with allegedly poor corporate governance - -------------------------------------------------------------------------------- G.2 FOR the establishment of new series or classes of shares - -------------------------------------------------------------------------------- G.3 AGAINST proposals to change a fund's investment objective to nonfundamental - -------------------------------------------------------------------------------- G.4 FOR proposals to establish a master-feeder structure or authorizing the Board to approve a master-feeder structure without a further shareholder vote - -------------------------------------------------------------------------------- G.5 AGAINST a shareholder proposal for the establishment of a director ownership requirement - -------------------------------------------------------------------------------- G.6 FOR classified boards of closed-end investment companies - -------------------------------------------------------------------------------- G.7 AGAINST removal of shareholder approval requirement to reorganize or terminate the trust or any of its series - -------------------------------------------------------------------------------- H. Environmental and Social Issues These are shareholder proposals to limit corporate conduct in some manner that relates to the shareholder's environmental or social concerns. The Committee generally believes that annual shareholder meetings are inappropriate forums for the discussion of larger social issues, and opposes shareholder resolutions "micromanaging" corporate conduct or requesting release of information that would not help a shareholder evaluate an investment in the corporation as an economic matter. While the Committee is generally supportive of proposals to require corporate disclosure of matters that seem relevant and material to the economic interests of shareholders, the Committee is generally not supportive of proposals to require disclosure of corporate matters for other purposes. The Committee's general policy is to vote: - -------------------------------------------------------------------------------- H.1 AGAINST proposals seeking to have companies adopt international codes of conduct - -------------------------------------------------------------------------------- H.2 AGAINST proposals seeking to have companies provide non-required reports on: o environmental liabilities; o bank lending policies; o corporate political contributions or activities; o alcohol advertising and efforts to discourage drinking by minors; o costs and risk of doing business in any individual country; o involvement in nuclear defense systems - -------------------------------------------------------------------------------- H.3 AGAINST proposals requesting reports on Maquiladora operations or on CERES principles - -------------------------------------------------------------------------------- H.4 AGAINST proposals seeking implementation of the CERES principles - -------------------------------------------------------------------------------- H.5 FOR resolutions requesting that a company disclose information on the impact of climate change on the company's operations unless: - The company already provides current, publicly available information on the perceived impact that climate change may have on the company as well as associated policies and procedures to address such risks and/or opportunities; - The company's level of disclosure is comparable to or better than information provided by industry peers; and - There are no significant fines, penalties, or litigation associated with the company's environmental performance - -------------------------------------------------------------------------------- H.6 AGAINST proposals that call for reduction in greenhouse gas emissions by specified amounts or within a restrictive time frame unless the company lags industry standards and has been the subject of recent, significant fines or litigation resulting from greenhouse gas emissions - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- H.7 FOR resolutions requesting that companies outline their preparations to comply with standards established by Kyoto Protocol signatory markets unless: - The company does not maintain operations in Kyoto signatory markets; - The company already evaluates and substantially discloses such information; - Greenhouse gas emissions do not significantly impact the company's core businesses; or - The company is not required to comply with the Kyoto Protocol standards - -------------------------------------------------------------------------------- H.8 AGAINST resolutions that request the disclosure of detailed information on a company's policies related to land use or development unless the company has been the subject of recent, significant fines or litigation stemming from its land use - -------------------------------------------------------------------------------- H.9 AGAINST proposals to publish in newspapers and public media the company's political contributions as such publications could present significant cost to the company without providing commensurate value to shareholders - -------------------------------------------------------------------------------- H.10 AGAINST proposals barring the company from making political contributions. Businesses are affected by legislation at the federal, state, and local level and barring contributions can put the company at a competitive disadvantage - -------------------------------------------------------------------------------- H.11 AGAINST proposals restricting the company from making charitable contributions. Charitable contributions are generally useful for assisting worthwhile causes and for creating goodwill in the community. In the absence of bad faith, self-dealing, or gross negligence, management should determine which contributions are in the best interests of the company - -------------------------------------------------------------------------------- H.12 AGAINST proposals asking for a list of company executives, directors, consultants, legal counsels, lobbyists, or investment bankers that have prior government service and whether such service had a bearing on the business of the company. Such a list would be burdensome to prepare without providing any meaningful information to shareholders - -------------------------------------------------------------------------------- H.13 AGAINST proposals that would call for the adoption of specific committee charter language regarding diversity initiatives unless the company fails to publicly disclose existing equal opportunity or non-discrimination policies - -------------------------------------------------------------------------------- H.14 AGAINST proposals seeking information on the diversity efforts of suppliers and service providers, which can pose a significant cost and administrative burden on the company - -------------------------------------------------------------------------------- H.15 FOR proposals seeking to amend a company's EEO statement in order to prohibit discrimination based on sexual orientation, unless the change would result in excessive costs for the company - -------------------------------------------------------------------------------- H.16 AGAINST proposals to exclude references to sexual orientation, interests, or activities from a company's EEO statement - -------------------------------------------------------------------------------- H.17 AGAINST proposals to extend company benefits to or eliminate benefits from domestic partners. Benefits decisions should be left to the discretion of the company - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- H.18 AGAINST proposals to take specific actions or adopt policies that require the company to support legislation to: - label or identify products in a certain manner; - study or evaluate the use of certain company products; - increase animal welfare standards to above those required by law; or - engage in political, environmental or social activities that do not directly relate to the economic operations of the company - -------------------------------------------------------------------------------- H.19 AGAINST proposals seeking to have companies provide non-required analyses, information statements or reports in the following areas unless there are compelling investment reasons to request such reports: - environmental liabilities; - bank lending policies; - corporate political contributions or activities; - alcohol and tobacco advertising and efforts to discourage use of such products by minors or other groups; - costs and risk of doing business in any individual country or the standards of operations in such country; - involvement in nuclear defense systems or other military products; - animal welfare standards; - pricing policies; - the use of certain commodities, genetically modified materials or chemicals; - sustainability and other perceived political, environmental or social issues that do not directly relate to the economic operations of the company; - charitable contributions made by the company - -------------------------------------------------------------------------------- H.20 CASE-BY-CASE on proposals requesting an economic risk assessment of environmental performance, considering: - The feasibility of financially quantifying environmental risk factors; - The company's compliance with applicable legislation and/or regulations regarding environmental performance; - The costs associated with implementing improved standards; - The potential costs associated with remediation resulting from poor environmental performance; and - The current level of disclosure on environmental policies and initiatives - -------------------------------------------------------------------------------- H.21 FOR requests for reports disclosing the company's environmental policies unless it already has well-documented environmental management systems that are available to the public - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- H.22 CASE-BY-CASE on proposals calling for companies to report on the risks associated with outsourcing, considering: - Risks associated with certain international markets; - The utility of such a report to shareholders; and - The existence of a publicly available code of corporate conduct that applies to international operations - -------------------------------------------------------------------------------- H.23 CASE-BY-CASE on requests for reports detailing the company's operations in a particular country and steps to protect human rights, based on: - The nature and amount of company business in that country; - The company's workplace code of conduct; - Proprietary and confidential information involved; - Company compliance with U.S. regulations on investing in the country; and/or - Level of peer company involvement in the country - -------------------------------------------------------------------------------- H.24 CASE-BY-CASE on proposals to implement certain human rights standards at company facilities or those of its suppliers and to commit to outside, independent monitoring. In evaluating these proposals, the following should be considered: - The company's current workplace code of conduct or adherence to other global standards and the degree they meet the standards promulgated by the proponent; - Agreements with foreign suppliers to meet certain workplace standards; - Whether company and vendor facilities are monitored and how; - Company participation in fair labor organizations; - Type of business; - Proportion of business conducted overseas; - Countries of operation with known human rights abuses; - Whether the company has been recently involved in significant labor and human rights controversies or violations; - Peer company standards and practices; and - Union presence in company's international factories - -------------------------------------------------------------------------------- Notice to Clients BlackRock will make records of any proxy vote it has made on behalf of a client available to such client upon request.(11) BlackRock will use its best efforts to treat proxy votes of clients as confidential, except as it may decide to best serve its clients' interests or as may be necessary to effect such votes or as may be required by law. BlackRock encourage clients with an interest in particular proxy voting issues to make their views known to BlackRock, provided that, in the absence of specific written direction from a client on how to vote that client's proxies, BlackRock reserves the right to vote any proxy in a manner it deems in the best interests of its clients, as it determines in its sole discretion. These policies are as of the date indicated on the cover hereof. The Committee may subsequently amend these policies at any time, without notice. - ---------- (11) Such request may be made to the client's portfolio or relationship manager or addressed in writing to Secretary, BlackRock Equity Investment Policy Oversight Committee, Legal and Compliance Department, BlackRock Inc., 40 East 52nd Street, New York, New York 10022. EX-99.CERT 3 e604068_ex99-cert.txt EX-99. CERT CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - -------------------------------------------------------------------------------- I, Donald C. Burke, Chief Executive Officer (principal executive officer) of BlackRock MuniAssets Fund, Inc., certify that: 1. I have reviewed this report on Form N-CSR of BlackRock MuniAssets Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committees of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 18, 2008 /s/ Donald C. Burke - ---------------------- Donald C. Burke Chief Executive Officer (principal executive officer) of BlackRock MuniAssets Fund, Inc. EX-99. CERT CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 - -------------------------------------------------------------------------------- I, Neal J. Andrews, Chief Financial Officer (principal financial officer) of BlackRock MuniAssets Fund, Inc., certify that: 1. I have reviewed this report on Form N-CSR of BlackRock MuniAssets Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committees of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 18, 2008 /s/ Neal J. Andrews - ---------------------- Neal J. Andrews Chief Financial Officer (principal financial officer) of BlackRock MuniAssets Fund, Inc. EX-99.906CERT 4 e604068_ex99-1350cert.txt Exhibit 99.1350CERT Certification Pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes Oxley Act Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of BlackRock MuniAssets Fund, Inc. (the "Registrant"), hereby certifies, to the best of his knowledge, that the Registrant's Report on Form N-CSR for the period ended May 31, 2008, (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: July 18, 2008 /s/ Donald C. Burke - ---------------------- Donald C. Burke Chief Executive Officer (principal executive officer) of BlackRock MuniAssets Fund, Inc. Pursuant to 18 U.S.C. ss. 1350, the undersigned officer of BlackRock MuniAssets Fund, Inc. (the "Registrant"), hereby certifies, to the best of his knowledge, that the Registrant's Report on Form N-CSR for the period ended May 31, 2008, (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: July 18, 2008 /s/ Neal J. Andrews - ---------------------- Neal J. Andrews Chief Financial Officer (principal financial officer) of BlackRock MuniAssets Fund, Inc. This certification is being furnished pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Securities and Exchange Commission. -----END PRIVACY-ENHANCED MESSAGE-----