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 811-02688
Name of Fund: BlackRock Municipal Bond Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock Municipal Bond 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) 441-7762
Date of fiscal year end: 06/30/07
Date of reporting period: 07/01/06 - 06/30/07
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES
BLACKROCK SOLUTIONS
BlackRock Municipal Bond
Fund, Inc.
ANNUAL REPORT JUNE 30, 2007
BlackRock Short-Term Municipal Fund
BlackRock Municipal Insured Fund
BlackRock National Municipal Fund
BlackRock High Yield Municipal Fund
(BLACKROCK logo)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
This report is transmitted to shareholders only. It is not authorized for
use as an offer of sale or a solicitation of an offer to buy shares of
the Funds unless accompanied or preceded by the Fund's current prospectus.
Past performance results shown in this report should not be considered a
representation of future performance. Investment return and principal value
of shares will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. Statements and other information herein
are as dated and are subject to change.
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BlackRock Municipal Bond Fund, Inc.
Swap Agreements
BlackRock Municipal Insured Fund, BlackRock National Municipal Fund and
BlackRock High Yield Municipal Fund of BlackRock Municipal Bond Fund, Inc. 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. The swap agreements in which the Fund may invest
includes credit default swap agreements.
Important Tax Information
All of the net investment income distributions paid monthly by BlackRock
Short-Term Municipal Fund, BlackRock Municipal Insured Fund, BlackRock
National Municipal Fund and BlackRock High Yield Municipal Fund of BlackRock
Municipal Bond Fund, Inc. during the taxable year ended June 30, 2007 qualify
as tax-exempt interest dividends for federal income tax purposes.
Additionally, the following table summarizes the taxable per share
distribution paid by BlackRock Municipal Insured Fund during the year:
Long-Term
Record Payable Ordinary Capital
Date Date Income Gains
12/18/2006 12/20/2006 $.000392 $.041863
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
A Letter to Shareholders
Dear Shareholder
At the mid-point of 2007, investor sentiment appeared quite buoyant,
notwithstanding some undertones of caution. For equity markets, positive
momentum as the year began was interrupted by a notable but transitory
set-back at the end of February. Markets resumed their ascent through May,
but entered a trading range in June as investors began to question the
sustainability of the rally. For the most part, equities found support in
robust merger-and-acquisition activity, healthy global economies, tame
inflation, relatively low interest rates, still-positive earnings growth and
attractive valuations. These tailwinds prevailed over such headwinds as a
weakening U.S. economy, slowing housing market, credit-related lending
problems, escalating geopolitical concerns and high energy prices, leading
the Standard & Poor's (S&P) 500 Index to a new record high in May.
Meanwhile, turmoil in the subprime mortgage market and generally mixed
economic signals weighed on bonds. In June, bond prices dropped precipitously
as long-term yields rose to their highest levels in five years. The 10-year
Treasury yield, which began 2007 at 4.68%, reached nearly 5.30% in mid-June
before retracing to 5.03% by month's end. Notably, this year has brought some
re-steepening of the yield curve, which had been flat to inverted throughout
2006. Still, at the end of June, yields along the curve remained below the
federal funds rate of 5.25%, the level at which the Federal Reserve Board (the
Fed) has left it since first pausing in August 2006. While first-quarter gross
domestic product growth of 0.7% represented the slowest rate of expansion
since 2002, the Fed reiterated that inflation, not a slowing economy, remains
its primary concern. Many observers interpreted the Fed's reaction to mean
that the economy has hit its low and is bound for renewed strength, thereby
reducing the likelihood of an interest rate cut in the near future.
Against this backdrop, the major equity market indexes posted strong returns
for the annual and semi-annual periods ended June 30, 2007, while fixed income
assets were more mixed:
Total Returns as of June 30, 2007 6-month 12-month
U.S. equities (S&P 500 Index) + 6.96% +20.59%
Small cap U.S. equities (Russell 2000 Index) + 6.45 +16.43
International equities (MSCI Europe, Australasia, Far East Index) +10.74 +27.00
Fixed income (Lehman Brothers U.S. Aggregate Bond Index) + 0.98 + 6.12
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 0.14 + 4.69
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) + 2.96 +11.22
We expect market volatility to linger throughout the second half of 2007. As
you navigate the uncertainties, we encourage you to review your investment
goals with your financial professional and to make portfolio changes, as
needed. For more market insight, we invite you to view "What's Ahead in 2007:
The Second-Quarter Update" and "Are You Prepared for Volatility?" at
www.blackrock.com/funds. 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,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
Fund President and Director
THIS PAGE NOT PART OF YOUR FUND REPORT
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
A Discussion With Your Funds' Portfolio Managers
A rise in market rates toward the end of the period, combined with a record-
setting pace of new issuance in the municipal market, provided some new
investment opportunities for the portfolios.
Describe the recent market environment relative to municipal bonds.
Over the past 12 months, long-term bond yields generally moved lower as bond
prices, which move opposite of yields, increased. The long-term tax-exempt
bond market's solid technical position allowed it to outperform the taxable
U.S Treasury market during the period.
As the 12-month period began, bond prices were improving (and yields falling)
amid a backdrop of weakening economic growth. The bond price improvement
accelerated in response to the Federal Reserve Board's (the Fed's) decision in
August 2006 to keep its target interest rate on hold at 5.25% after 17
consecutive interest rate hikes since mid-2004. The rally continued in the
fall amid moderating oil prices and slower gross domestic product (GDP)
growth. By the end of November 2006, 30-year U.S. Treasury bond yields had
fallen to 4.56%, a decline of 47 basis points (.47%) from June 30.
In recent months, strong U.S. equity markets, continued moderate employment
growth, higher bond yields overseas and growing investor conviction that the
Fed would keep interest rates steady for the remainder of 2007 combined to
push bond prices lower, erasing much of the market's earlier gains. At the end
of June 2007, 30-year Treasury bond yields stood at 5.12%, a decline of 7
basis points year-over-year. Ten-year Treasury yields fell 12 basis points to
5.03% during the same period.
The long-term tax-exempt bond market outperformed U.S. Treasury issues over
the 12 months as investor demand outstripped a resurgent new-issue calendar.
As measured by Municipal Market Data, yields on 30-year, AAA-rated issues
declined 19 basis points to 4.44%. Meanwhile, yields on intermediate-maturity
bonds fell less than those with longer maturities, as the Fed's string of
interest rate hikes in 2005 and 2006, coupled with stronger investor demand
for longer-maturity issues, resulted in a flattening of the municipal yield
curve. Yields on 10-year, AAA-rated municipal bonds declined 7 basis points to
4.07%. In the municipal money market, yields rose modestly over the 12-month
period.
Investor demand for municipal product remained strong throughout the year.
Statistics from the Investment Company Institute indicate that tax-exempt
mutual funds received more than $13.7 billion in net new cash flows in the
first five months of 2007, an increase of over 119% compared to the same
period in 2006. This pace softened somewhat in June as the increasing bond
yields made individual municipal bond purchases attractive compared to the
relatively stable yields generated by tax-exempt mutual funds. Weekly fund
flows, as measured by AMG Data, averaged $434 million during the second
quarter of 2007, down from a weekly average of $474 million in the first
quarter of the year. Still, the second quarter flows were almost twice those
seen in second quarter 2006. Supporting the healthy demand for tax-exempt
products has been strong seasonal cash flows. In June, investors received
approximately $40 billion from bond maturities, coupon income and the proceeds
from various early redemptions, and are expected to receive an additional
$35 billion in July.
As investor demand has strengthened, so has municipal bond supply. In second
quarter 2007, municipalities issued over $112 billion in new tax-exempt
securities, an increase of 12% relative to second quarter 2006. Year-to-date
issuance has exceeded $226 billion, a 26% increase versus the same period a
year ago and more than 8% ahead of 2005's record volume. Over the past 12
months, more than $431 billion in new tax-exempt bonds was marketed, an
increase of 13% compared to a year ago. The new-issue calendar continues to be
dominated by large underwritings exceeding $1 billion in size. These larger
deals have continued to meet with strong demand, resulting in minimal, if any,
market disruption.
The market's technical position appears reasonably balanced, as the heavy new
issuance has been met with continued strong demand. We expect that both
traditional and non-traditional investors will continue to be drawn to the
municipal market given relatively stable tax-exempt yield ratios and the
steepness of the municipal curve compared to the taxable curve.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
BlackRock Short-Term Municipal Fund
How did the Fund perform during the fiscal year in light of the existing
market conditions?
For the 12-month period ended June 30, 2007, BlackRock Short-Term Municipal
Fund's BlackRock, Institutional, Investor A, Investor A1, Investor B and
Investor C Shares had total returns of +3.42%, +3.32%, +3.05%, +3.21%, +2.95%
and +2.29%, respectively. (Fund results shown do not reflect sales charges and
would be lower if sales charges were included. Complete performance information
can be found on pages 9 - 15 of this report to shareholders.) For the same
period, the Fund's unmanaged benchmarks, the Lehman Brothers Municipal Bond
3-Year General Obligation Index and the Lehman Brothers Municipal Bond Index,
had respective returns of +3.76% and +4.69%. The Fund's comparable Lipper
category of Short Municipal Debt Funds posted an average return of +3.20% for
the 12-month period. (Funds in the Short Municipal Debt Funds category invest
primarily in municipal debt issues with dollar-weighted average maturities of
less than three years.)
The historical flatness of the municipal yield curve has meant that the short
end of the curve, in which we invest, has underperformed the longer end on a
total return basis. This would account for the Fund's underperformance of the
Lehman indexes, which cover broader maturity ranges than those in which the
Fund can invest. Fund performance for the fiscal year compared more favorably
to that of its Lipper peers. (Notably, funds in the Lipper group with the
ability to purchase longer-dated securities outperformed.)
Although the Fund maintained a neutral to slightly short duration for much of
the year, a defensive move designed to protect the portfolio in case of rising
interest rates, the negative impact felt at the short end of the curve
detracted from performance versus the peer group average. However, yields rose
across the curve in June and the Fund's short duration aided performance in
the final month of the period.
What changes were made to the portfolio during the period?
We generally maintained a conservative approach throughout the fiscal year.
Our goal was to limit volatility in the Fund's underlying value, while also
seeking a yield advantage over traditional tax-free money market funds.
In the first six months of the fiscal year, most of our new investments were
made in the two-year portion of the municipal yield curve. It was in the first
half of the period that the Fed initially paused in its rate-hiking campaign
and vowed data dependence in determining future monetary policy. We believed
that the market would remain relatively stable given the Fed's stance. In
addition, the municipal yield curve was extremely flat, with investments in
the three-year and four-year range offering little or no yield advantage over
those with one-year and two-year maturities.
In the latter half of the fiscal year, we kept the Fund's average maturity
slightly below average, as the yield curve provided little incentive to extend
duration. In late May, after a sharp rise in bond yields resulted in some
re-steepening of the yield curve, we drew down the Fund's cash position and
invested in cash-equivalent variable rate demand notes.
In terms of credit quality, the Fund maintained an average rating of AA.
How would you characterize the Fund's position at the close of the period?
We continue to maintain a high-quality portfolio that we believe is well
positioned for the prevailing environment. Specifically, we anticipate that
the yield curve will remain flat for a prolonged period, and that the Fed will
continue its wait-and-see approach to monetary policy. Although the yield
curve steepened modestly toward the end of the period, we do not see enough
yield incentive to become more aggressive in our approach given the volatile
market backdrop.
Peter J. Hayes
Senior Portfolio Manager
Helen Marie Sheehan
Portfolio Manager
We are pleased to announce that Helen Marie Sheehan has joined the Fund's
portfolio management team, effective July 20, 2007. Ms. Sheehan is a Director
with BlackRock Inc. Prior to joining BlackRock in 2006, she was a Director
with Merrill Lynch Investment Managers (MLIM) from 2000 to 2006 and a Vice
President thereof from 1994 to 2000. Ms. Sheehan has been a portfolio manager
with BlackRock or MLIM since 1985.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
A Discussion With Your Funds' Portfolio Managers (continued)
BlackRock Municipal Insured Fund
How did the Fund perform during the fiscal year in light of the existing
market conditions?
For the 12-month period ended June 30, 2007, BlackRock Municipal Insured
Fund's Institutional, Investor A, Investor B, Investor C and Investor C1
Shares had total returns of +4.60%, +4.47%, +3.95%, +3.70% and +3.90%,
respectively. (Fund results shown do not reflect sales charges and would be
lower if sales charges were included. Complete performance information can be
found on pages 9 - 15 of this report to shareholders.) For the same period,
the broad-market Lehman Brothers Municipal Bond Index returned +4.69%. Notably,
the index measures the performance of insured and uninsured municipal bonds
throughout the nation, while the Fund focuses on higher-quality insured issues.
Fund returns generally outpaced the +3.79% average return of the Lipper
Insured Municipal Debt Funds category for the 12-month period. (Funds in this
Lipper category invest primarily in municipal debt issues insured as to timely
payment.) For the most part, we attribute the portfolio's strong relative
performance to our yield curve positioning, particularly in the first half of
the year, and our strategy of favoring refundable issues.
In the first six months, we were generally overweight in bonds with maturities
greater than 20 years, which helped the Fund's relative performance as the
municipal yield curve flattened and the prices on longer-maturity bonds
increased sharply. That dynamic had subsided somewhat in the second half of
the fiscal period, but the Fund continued to benefit from the advance
refunding of several holdings. When municipal bonds are advance refunded, or
refinanced ahead of their maturity date, their prices generally increase
sharply. In the first six months of 2007, we saw a significant pick-up in
refunding activity as interest rates remained historically low. We continue to
look for bonds with the potential to be advance refunded.
What changes were made to the portfolio during the period?
We adjusted the Fund's duration throughout period, moving from a defensive to
relatively neutral stance. As interest rates rose significantly toward the end
of the period, we took a more constructive view of the market. This entailed
moving our focus further out on the municipal yield curve, targeting
investments in the 20-year to 25-year maturity range.
Our efforts were aided by the notable increase in municipal bond supply
across the curve. With new issuance on a record-setting pace, we were able to
find bonds with coupons and maturities we desired. This facilitated our
strategy of selling some recently advance refunded positions, as their book
yields were not significantly above current market yields, and moving into
higher-yielding current issues. In doing so, we focused on bonds that could
be advance refunded in the future, primarily premium-coupon, high-quality
bonds in the aforementioned maturity range. This will allow us to replicate
the same types of trades again (that is, sell bonds with lower yields in
exchange for bonds with higher yields as the curve steepens).
Another way in which we achieved a more constructive view on the market was by
realizing tax losses as interest rates rose (and prices correspondingly fell).
For example, if we had a bond that declined in value because it was of a
shorter nature (that is, a short maturity or shorter call date), we were
willing to take a loss by selling it and investing in more market-sensitive
securities that could appreciate as rates fall (and prices rise). This also
served to enforce our tax-efficient investment strategy, in that we were able
to offset any capital gains in the portfolio, which are taxable to our
investors.
Finally, we continue to find good relative value in bonds issued by the state
of California and other high-tax and specialty states. Given the heavy supply
across the board, these bonds were selling at attractive prices relative to
the broader market while offering yield-enhancement potential.
How would you characterize the Fund's position at the close of the period?
Given the recent rise in market rates, we ended the period with a more
constructive portfolio, from an interest rate perspective, than we've had in
some time. Otherwise, the Fund remained fully invested and of the highest
quality, with 100% of its holdings rated AAA with bond insurance. We intend to
maintain our focus on bonds in the 20-year to 25-year maturity range, while
seeking to enhance yield and preserve net asset value for our shareholders. As
always, we intend to accomplish this using the most tax-efficient investment
strategies.
Michael A. Kalinoski, CFA
Portfolio Manager
Theodore R. Jaeckel, Jr., CFA
Portfolio Manager
Walter C. O'Connor, CFA
Portfolio Manager
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
BlackRock National Municipal Fund
How did the Fund perform during the fiscal year in light of the existing
market conditions?
For the 12-month period ended June 30, 2007, BlackRock National Municipal
Fund's Institutional, Investor A, Investor B, Investor C and Investor C1
Shares had total returns of +5.06%, +4.71%, +4.18%, +3.91% and +4.23%,
respectively. (Fund results shown do not reflect sales charges and would be
lower if sales charges were included. Complete performance information can be
found on pages 9 - 15 of this report to shareholders.) For the same period,
the Fund's broad market benchmark, the Lehman Brothers Municipal Bond Index,
returned +4.69% and the Lipper General Municipal Debt Funds category had an
average return of +4.12%. (Funds in this Lipper category invest primarily in
municipal debt issues in the top four credit-rating categories.)
Fund performance for the fiscal year benefited from our ongoing strategy of
maximizing the portfolio's current yield. The Fund's average coupon at period-
end was 5.85%, compared to an average of 4.50% for the broader market, as
measured by the 30-year Municipal Market Data scale. This has allowed the Fund
to remain one of the highest-yielding among its peers. Over time, these above-
average income distributions to shareholders serve to enhance total return.
In the latter half of the period, we pared back the Fund's exposure to housing-
related bonds given our concerns over the slowdown in the U.S. residential
real estate market. This benefited performance as the housing sector saw a
notable widening in credit spreads amid the turmoil in the subprime mortgage
market.
What changes were made to the portfolio during the period?
We maintained a slightly short to neutral duration posture (a measure of
sensitivity to interest rate movements) throughout the fiscal year, thereby
minimizing interest rate timing and the risk inherent in that. Instead, we
continued to focus our efforts on protecting the Fund's net asset value and
delivering as high a current yield as possible within the context of a low-
risk portfolio.
We found little need to make many structural changes to the portfolio, as we
are satisfied with the portfolio's com-position and the performance it has
been able to generate. For that reason, most trading activity during the
period could be characterized as reactive. That is, as bonds were called from
the portfolio (a fairly common occurrence over the past year as municipal
issuers capitalized on low interest rates to refinance their existing, higher-
couponed debt), we carefully evaluated the market for opportunities to
recommit those assets. We were content to allow call proceeds to build as cash
reserves during periods when interest rates were inopportune, and then
recommitted the funds when rates rose to more advantageous levels. For the
most part, we have been rewarded for our patient approach to reinvesting the
proceeds. This helped us to maintain the Fund's current income distribution,
while also protecting the underlying net asset value. In the final quarter of
the period, with short-term cash equivalent yields reaching an average of over
3.60%, it has been easier to exercise patience in our approach. Notably, the
Fund's low turnover ratio also translates into enhanced tax efficiency, in
that we have been able to avoid capital gains distributions, which have tax
consequences for shareholders.
The portfolio maintained an average credit quality of AA throughout the
period. At period-end, less than 5% of the portfolio was rated below BBB.
How would you characterize the Fund's position at the close of the period?
The Fund ended the period in a slightly defensive position in terms of
interest rate risk. We would look to return to a more neutral posture as
interest rates rise. Specifically, if long-term market rates for high-quality
securities were to approach the 5% range, we could envision becoming more
constructive.
We maintain our focus on high-quality bonds. Although credit spreads are
widening, they remain very tight on a historical basis. The tight spreads mean
there is little yield advantage to be realized from investment in lower-
quality issues and, therefore, we are not inclined to take on the additional
risk.
We will continue to exercise patience in recommitting the proceeds realized
from bond calls so as not to sacrifice the Fund's attractive structure -
including the low price volatility and the attractive income distribution that
we have been able to offer our shareholders.
Walter C. O'Connor, CFA
Senior Portfolio Manager
Theodore R. Jaeckel, Jr., CFA
Portfolio Manager
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
A Discussion With Your Funds' Portfolio Managers (concluded)
BlackRock High Yield Municipal Fund
How has the Fund performed since its inception?
From its inception on August 1, 2006, through June 30, 2007, BlackRock High
Yield Municipal Fund's Institutional, Investor A and Investor C Shares had
total returns of +3.59%, +3.26% and +2.84%, respectively. (Fund results shown
do not reflect sales charges and would be lower if sales charges were
included. Complete performance information can be found on pages 9 - 15 of
this report to shareholders.) For the same period, the Fund's broad market
benchmark, the Lehman Brothers Municipal Bond Index, returned +3.39%, and the
Lipper High Yield Municipal Debt Funds category posted an average return of
+4.34%. (Funds in this Lipper category invest at least 50% of their assets in
lower-rated municipal debt issues.)
Most of the Fund's underperformance relative to its Lipper category average
occurred in the most recent calendar quarter. Our above-average duration
stance, which partly reflects the less-seasoned nature of the portfolio's
current holdings, detracted from performance when rates rose significantly in
the last three months. (Yields have declined in recent years, generating a
more conservative interest rate risk profile for more-seasoned issues commonly
held by the Fund's peers.) In addition, given the Fund's relatively new
status, it is disadvantaged relative to its more-seasoned competitors, which
have had the benefit of investing in a higher interest rate environment as
well as an environment where credit spreads were wider than in the past year.
Relative to the broader municipal market, the Fund has performed quite well.
How have you managed the Fund since its inception?
The Fund has seen a fairly steady flow of new assets since its inception and,
as such, we have been focused on keeping the portfolio invested. We have
established new positions in a variety of sectors, reflecting our efforts to
diversify the portfolio. Our largest exposure at period-end remained in the
health care sector, at 37% of net assets, followed by corporate-related debt
at 15%, tax-backed debt at 12%, education at 9% and housing at 7%. The
relatively heavy exposure in healthcare largely reflects issuance trends.
In terms of its credit profile, the Fund is more conservative than its peers,
largely reflecting a perceived lack of value in the high yield market. Credit
spreads have remained quite tight, particularly compared to the widening we've
seen in the taxable market, thereby failing to offer attractive value. As a
result, a higher proportion of the portfolio is invested in AAA-rated and
AA-rated issues, with commensurately lower exposure in non-investment-grade
and non-rated paper. At period-end, approximately 24% of portfolio holdings
were rated AAA, AA and A. This compares to an average of less than 5% for our
high yield municipal benchmark. Roughly 22% of Fund holdings were rated BBB,
which represents an overweighting relative to the benchmark, and 30% were non-
rated, compared to the benchmark average of roughly 50%. We are looking to
approach more neutral weightings as opportunities present themselves. We
intend to exercise due diligence and patience to that end.
How would you characterize the Fund's position at the close of the period?
The Fund ended the period with an above-average duration, reflecting our
outlook for lower interest rates, and with a relatively conservative credit
profile. We will look to increase the yield in the portfolio through the
purchase of lower-rated credits, but anticipate that this will take some time
given issuance trends, the tightness of credit spreads and the perceived event
risk in the marketplace. Most issuance has been in the health care sector, an
area where we have already achieved ample exposure. We would ideally look for
opportunities in the tax-backed sector and corporate-related debt, areas in
which the portfolio is underweighted, but will proceed with caution and
patience in an effort to limit downside risk.
Given the underlying market backdrop, we are pleased with the Fund's progress
in its first 11 months and believe the portfolio is well positioned to take
advantage of any widening of spreads in the high yield municipal market.
Theodore R. Jaeckel, Jr., CFA
Portfolio Manager
Walter C. O'Connor, CFA
Portfolio Manager
July 20, 2007
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Performance Data
About Fund Performance
Effective October 2, 2006, BlackRock Short-Term Municipal Fund's Class A,
Class B and Class I Shares were redesignated Investor A1, Investor B and
Institutional Shares, respectively. All Class C Shares of the BlackRock
Short-Term Municipal Fund converted to Class A (now Investor A1) Shares
on August 25, 2006 and are no longer outstanding. BlackRock Municipal
Insured Fund's and BlackRock National Municipal Fund's Class A, Class B,
Class C and Class I Shares were redesignated Investor A, Investor B,
Investor C1 and Institutional Shares, respectively. BlackRock High Yield
Municipal Fund's Class A, Class C and Class I Shares were redesignated
Investor A, Investor C and Institutional Shares, respectively. Also,
effective October 2, 2006 BlackRock Short-Term Municipal Fund's BlackRock
Shares, Investor A Shares and Investor C Shares commenced operations and
BlackRock Municipal Insured Fund's and BlackRock National Municipal
Fund's Investor C Shares commenced operations. As previously communicated
to shareholders, new sales charge schedules came into effect at the same
time for certain of these shares.
BlackRock Short-Term Municipal Fund
* BlackRock Shares are not subject to any sales charge. BlackRock Shares bear
no ongoing distribution or service fees and are available only to eligible
investors. Prior to October 2, 2006, BlackRock Share performance results are
those of the Institutional Shares (which have no distribution or service
fees).
* Institutional Shares are not subject to any sales charge. Institutional
Shares bear no ongoing distribution or service fees and are available only to
eligible investors.
* Investor A Shares incur a maximum initial sales charge (front-end load) of
3% and a service fee of 0.25% per year (but no distribution fee). Prior to
October 2, 2006, Investor A Share performance results are those of the
Institutional Shares (which have no distribution or service fees) restated to
reflect Investor A Share fees.
* Investor A1 Shares incur a maximum initial sales charge (front-end load) of
1% and a service fee of 0.10% per year (but no distribution fee).
* Investor B Shares are subject to a maximum contingent deferred sales charge
of 1% declining to 0% after three years. In addition, Investor B Shares are
subject to a distribution fee of 0.20% per year and a service fee of 0.15% per
year. These shares automatically convert to Investor A1 Shares after
approximately 10 years. (There is no initial sales charge for automatic share
conversions.)
* Investor C Shares are subject to a distribution fee of 0.75% per year and a
service fee of 0.25% per year. In addition, Investor C shares are subject to a
1% contingent deferred sales charge if redeemed within one year of purchase.
Prior to October 2, 2006, Investor C Share performance results are those of
the Institutional Shares (which have no distribution or service fees) restated
to reflect Investor C Share fees.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Performance Data (continued)
BlackRock Municipal Insured Fund and BlackRock National Municipal Fund
* Institutional Shares are not subject to any sales charge. Institutional
Shares bear no ongoing distribution or service fees and are available only to
eligible investors.
* Investor A Shares incur a maximum initial sales charge (front-end load) of
4.25% and a service fee of 0.25% per year (but no distribution fee).
* Investor B Shares are subject to a maximum contingent deferred sales charge
of 4% declining to 0% after six years. In addition, Investor B Shares are
subject to a distribution fee of 0.50% per year and a service fee of 0.25% per
year. These shares automatically convert to Investor A Shares after
approximately 10 years. (There is no initial sales charge for automatic share
conversions.).
* Investor C Shares are subject to a distribution fee of 0.75% per year and a
service fee of 0.25% per year. In addition, Investor C shares are subject to a
1% contingent deferred sales charge if redeemed within one year of purchase.
Prior to October 2, 2006, Investor C Share performance results are those of
the Institutional Shares (which have no distribution or service fees) restated
to reflect Investor C Share fees.
* Investor C1 Shares are subject to a distribution fee of 0.55% per year and a
service fee of 0.25% per year. In addition, Investor C1 shares are subject to
a 1% contingent deferred sales charge if redeemed within one year of purchase.
BlackRock High Yield Municipal Fund
* Institutional Shares are not subject to any sales charge. Institutional
Shares bear no ongoing distribution or service fees and are available only to
eligible investors.
* Investor A Shares incur a maximum initial sales charge (front-end load) of
4.25% and a service fee of 0.25% per year (but no distribution fee).
* Investor C Shares are subject to a distribution fee of 0.75% per year and a
service fee of 0.25% per year. In addition, Investor C shares are subject to a
1% contingent deferred sales charge if redeemed within one year of purchase.
Performance information reflects past performance and does not guarantee
future results. Current performance may be lower or higher than the
performance data quoted. Refer to www.blackrock.com to obtain performance data
current to the most recent month-end. Performance results do not reflect the
deduction of taxes that a shareholder would pay on fund distributions or the
redemption of fund shares. Figures shown in each of the following tables
assume reinvestment of all dividends and capital gain distributions, if any,
at net asset value on the payable date.
Investment return and principal value of shares will fluctuate so that shares,
when redeemed, may be worth more or less than their original cost. Dividends
paid to each class of shares will vary because of the different levels of
service, distribution and transfer agency fees applicable to each class, which
are deducted from the income available to be paid to shareholders. The Funds'
Manager (BlackRock Advisors, LLC) and the Funds' previous manager (Fund Asset
Management, L.P.), reimbursed a portion of its management fee. Without such
reimbursement, performance would have been lower.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Performance Data (continued)
Recent Performance Results*
10-Year/
Since
6-Month 12-Month Inception Standardized
As of June 30, 2007 Total Return Total Return Total Return 30-day Yield
BlackRock Short-Term Municipal Fund BlackRock Shares +1.37% +3.42% +35.38% 3.53%
BlackRock Short-Term Municipal Fund Institutional Shares +1.27 +3.32 +35.25 3.53
BlackRock Short-Term Municipal Fund Investor A Shares +1.14 +3.05 +31.91 3.18
BlackRock Short-Term Municipal Fund Investor A1 Shares +1.22 +3.21 +33.91 3.40
BlackRock Short-Term Municipal Fund Investor B Shares +1.09 +2.95 +30.39 3.18
BlackRock Short-Term Municipal Fund Investor C Shares +0.77 +2.29 +22.40 2.53
BlackRock Municipal Insured Fund Institutional Shares 0.00 +4.60 +63.85 3.93
BlackRock Municipal Insured Fund Investor A Shares -0.13 +4.47 +59.85 3.52
BlackRock Municipal Insured Fund Investor B Shares -0.38 +3.95 +52.14 3.13
BlackRock Municipal Insured Fund Investor C Shares -0.50 +3.70 +48.52 2.88
BlackRock Municipal Insured Fund Investor C1 Shares -0.40 +3.90 +51.21 3.10
BlackRock National Municipal Fund Institutional Shares +0.56 +5.06 +69.45 4.03
BlackRock National Municipal Fund Investor A Shares +0.35 +4.71 +65.18 3.66
BlackRock National Municipal Fund Investor B Shares +0.10 +4.18 +57.16 3.28
BlackRock National Municipal Fund Investor C Shares -0.04 +3.91 +53.23 2.98
BlackRock National Municipal Fund Investor C1 Shares +0.17 +4.23 +56.39 3.25
BlackRock High Yield Municipal Fund Institutional Shares +0.01 -- + 3.59 4.53
BlackRock High Yield Municipal Fund Investor A Shares -0.03 -- + 3.26 4.10
BlackRock High Yield Municipal Fund Investor C Shares -0.31 -- + 2.84 3.49
Lehman Brothers 3-Year General Obligation
Bond Index++ +1.21 +3.76 +46.74 --
Lehman Brothers Municipal Bond Index++++ +0.14 +4.69 +69.80/+3.39 --
* Investment results shown do not reflect sales charges; results shown would be lower if a sales charge
was included. Cumulative total investment returns are based on changes in net asset values for the
periods shown, and assume reinvestment of all dividends and capital gains distributions at net asset
value on the payable date. All of the Funds' 10-year/since inception total returns are for the 10-year
period except for High Yield Municipal Fund's 10-year/since inception total returns, which are from 8/01/06.
++ This unmanaged Index consists of state and local government obligation bonds that mature in three - four
years, rated Baa or better. The 10-year/since inception total return is for the 10-year period.
++++ This unmanaged Index consists of revenue bonds, prerefunded bonds, general obligation bonds and insured
bonds, all of which mature within 30 years. 10-year/since inception total returns are for 10 years and
from 8/01/06, respectively.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Performance Data (continued) BlackRock Short-Term Municipal Fund
Total Return Based on a $10,000 Investment
A line graph illustrating the growth of a $10,000 investment in BlackRock
Shares*++, Institutional Shares*++, Investor A Shares*++, Investor A1
Shares*++, Investor B Shares*++, and Investor C Shares*++ compared to a
similar investment in Lehman Brothers Municipal Bond Index++++ and Lehman
Brothers 3-Year General Obligation Bond Index++++++. Values illustrated are as
follows:
BlackRock Shares*++
Date Value
June 1997 $10,000.00
June 1998 $10,426.00
June 1999 $10,778.00
June 2000 $11,132.00
June 2001 $11,809.00
June 2002 $12,294.00
June 2003 $12,647.00
June 2004 $12,722.00
June 2005 $12,888.00
June 2006 $13,091.00
June 2007 $13,538.00
Institutional Shares*++
Date Value
June 1997 $10,000.00
June 1998 $10,426.00
June 1999 $10,778.00
June 2000 $11,132.00
June 2001 $11,809.00
June 2002 $12,294.00
June 2003 $12,647.00
June 2004 $12,722.00
June 2005 $12,888.00
June 2006 $13,091.00
June 2007 $13,525.00
Investor A Shares*++
Date Value
June 1997 $ 9,700.00
June 1998 $10,088.00
June 1999 $10,403.00
June 2000 $10,717.00
June 2001 $11,341.00
June 2002 $11,778.00
June 2003 $12,086.00
June 2004 $12,127.00
June 2005 $12,254.00
June 2006 $12,416.00
June 2007 $12,795.00
Investor A1 Shares*++
Date Value
June 1997 $ 9,900.00
June 1998 $10,312.00
June 1999 $10,649.00
June 2000 $10,988.00
June 2001 $11,644.00
June 2002 $12,110.00
June 2003 $12,446.00
June 2004 $12,508.00
June 2005 $12,658.00
June 2006 $12,845.00
June 2007 $13,257.00
Investor B Shares*++
Date Value
June 1997 $10,000.00
June 1998 $10,389.00
June 1999 $10,701.00
June 2000 $11,013.00
June 2001 $11,642.00
June 2002 $12,065.00
June 2003 $12,368.00
June 2004 $12,397.00
June 2005 $12,526.00
June 2006 $12,665.00
June 2007 $13,039.00
Investor C Shares*++
Date Value
June 1997 $10,000.00
June 1998 $10,323.00
June 1999 $10,565.00
June 2000 $10,804.00
June 2001 $11,347.00
June 2002 $11,696.00
June 2003 $11,912.00
June 2004 $11,864.00
June 2005 $11,899.00
June 2006 $11,966.00
June 2007 $12,240.00
Lehman Brothers Municipal Bond Index++++
Date Value
June 1997 $10,000.00
June 1998 $10,866.00
June 1999 $11,166.00
June 2000 $11,529.00
June 2001 $12,680.00
June 2002 $13,556.00
June 2003 $14,741.00
June 2004 $14,853.00
June 2005 $16,077.00
June 2006 $16,219.00
June 2007 $16,980.00
Lehman Brothers 3-Year General Obligation Bond Index++++++
Date Value
June 1996 $10,000.00
June 1997 $10,537.00
June 1998 $10,924.00
June 1999 $11,324.00
June 2000 $12,191.00
June 2001 $12,933.00
June 2002 $13,574.00
June 2003 $13,658.00
June 2004 $14,010.00
June 2005 $14,143.00
June 2006 $14,674.00
* Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
++ The Fund invests primarily in investment grade municipal bonds (bonds
rated Baa or better) with a maximum maturity not to exceed four years.
++++ This unmanaged Index consists of revenue bonds, prerefunded bonds,
general obligation bonds and insured bonds, all of which mature within
30 years.
++++++ This unmanaged Index consists of state and local government obligation
bonds that mature in three - four years, rated Baa or better.
Past performance is not indicative of future results.
Average Annual Total Return
Return
BlackRock Shares
One Year Ended 6/30/07 +3.42%
Five Years Ended 6/30/07 +1.95
Ten Years Ended 6/30/07 +3.08
Return
Institutional Shares
One Year Ended 6/30/07 +3.32%
Five Years Ended 6/30/07 +1.93
Ten Years Ended 6/30/07 +3.07
Return Without Return With
Sales Charge Sales Charge*
Investor A Shares
One Year Ended 6/30/07 +3.05% -0.04%
Five Years Ended 6/30/07 +1.67 +1.05
Ten Years Ended 6/30/07 +2.81 +2.50
Return Without Return With
Sales Charge Sales Charge**
Investor A1 Shares
One Year Ended 6/30/07 +3.21% +2.18%
Five Years Ended 6/30/07 +1.83 +1.62
Ten Years Ended 6/30/07 +2.96 +2.86
Return Return
Without CDSC With CDSC++++++
Investor B Shares++
One Year Ended 6/30/07 +2.95% +1.95%
Five Years Ended 6/30/07 +1.57 +1.57
Ten Years Ended 6/30/07 +2.69 +2.69
Return Return
Without CDSC With CDSC++++++
Investor C Shares++++
One Year Ended 6/30/07 +2.29% +1.29%
Five Years Ended 6/30/07 +0.91 +0.91
Ten Years Ended 6/30/07 +2.04 +2.04
* Assuming maximum sales charge of 3%.
** Assuming maximum sales charge of 1%.
++ Maximum contingent deferred sales charge is 1% and is reduced
to 0% after three years.
++++ Maximum contingent deferred sales charge is 1% and is reduced
to 0% after one year.
++++++ Assuming payment of applicable contingent deferred sales
charge.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Performance Data (continued) BlackRock Municipal Insured Fund
Total Return Based on a $10,000 Investment
A line graph illustrating the growth of a $10,000 investment in Institutional
Shares*++, Investor A Shares*++, Investor B Shares*++, Investor C Shares*++
and Investor C1 Shares*++ compared to a similar investment in Lehman Brothers
Municipal Bond Index++++. Values illustrated are as follows:
Institutional Shares*++
Date Value
June 1997 $10,000.00
June 1998 $10,805.00
June 1999 $10,973.00
June 2000 $11,103.00
June 2001 $12,216.00
June 2002 $13,077.00
June 2003 $14,238.00
June 2004 $14,289.00
June 2005 $15,538.00
June 2006 $15,665.00
June 2007 $16,385.00
Investor A Shares*++
Date Value
June 1997 $ 9,575.00
June 1998 $10,307.00
June 1999 $10,455.00
June 2000 $10,552.00
June 2001 $11,581.00
June 2002 $12,351.00
June 2003 $13,433.00
June 2004 $13,448.00
June 2005 $14,587.00
June 2006 $14,650.00
June 2007 $15,305.00
Investor B Shares*++
Date Value
June 1997 $10,000.00
June 1998 $10,724.00
June 1999 $10,808.00
June 2000 $10,868.00
June 2001 $11,852.00
June 2002 $12,592.00
June 2003 $13,626.00
June 2004 $13,554.00
June 2005 $14,629.00
June 2006 $14,637.00
June 2007 $15,214.00
Investor C Shares*++
Date Value
June 1997 $10,000.00
June 1998 $10,698.00
June 1999 $10,757.00
June 2000 $10,776.00
June 2001 $11,739.00
June 2002 $12,442.00
June 2003 $13,413.00
June 2004 $13,327.00
June 2005 $14,348.00
June 2006 $14,322.00
June 2007 $14,852.00
Investor C1 Shares*++
Date Value
June 1997 $10,000.00
June 1998 $10,705.00
June 1999 $10,784.00
June 2000 $10,838.00
June 2001 $11,814.00
June 2002 $12,545.00
June 2003 $13,569.00
June 2004 $13,491.00
June 2005 $14,571.00
June 2006 $14,554.00
June 2007 $15,121.00
Lehman Brothers Municipal Bond Index++++
Date Value
June 1997 $10,000.00
June 1998 $10,866.00
June 1999 $11,166.00
June 2000 $11,529.00
June 2001 $12,680.00
June 2002 $13,556.00
June 2003 $14,741.00
June 2004 $14,853.00
June 2005 $16,077.00
June 2006 $16,219.00
June 2007 $16,980.00
* Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
++ The Fund invests primarily in long-term, investment grade municipal bonds
bonds rated Baa or better) covered by portfolio insurance guaranteeing the
timely payment of principal at maturity and interest.
++++ This unmanaged Index consists of revenue bonds, prerefunded bonds, general
obligation bonds and insured bonds, all of which mature within 30 years.
Past performance is not indicative of future results.
Average Annual Total Return
Return
Institutional Shares
One Year Ended 6/30/07 +4.60%
Five Years Ended 6/30/07 +4.61
Ten Years Ended 6/30/07 +5.06
Return Without Return With
Sales Charge Sales Charge*
Investor A Shares
One Year Ended 6/30/07 +4.47% +0.03%
Five Years Ended 6/30/07 +4.38 +3.48
Ten Years Ended 6/30/07 +4.80 +4.35
Return Return
Without CDSC With CDSC++++++
Investor B Shares++
One Year Ended 6/30/07 +3.95% -0.05%
Five Years Ended 6/30/07 +3.86 +3.52
Ten Years Ended 6/30/07 +4.29 +4.29
Return Return
Without CDSC With CDSC++++++
Investor C Shares++++
One Year Ended 6/30/07 +3.70% +2.70%
Five Years Ended 6/30/07 +3.60 +3.60
Ten Years Ended 6/30/07 +4.03 +4.03
Return Return
Without CDSC With CDSC++++++
Investor C1 Shares++++
One Year Ended 6/30/07 +3.90% +2.90%
Five Years Ended 6/30/07 +3.81 +3.81
Ten Years Ended 6/30/07 +4.22 +4.22
* Assuming maximum sales charge of 4.25%.
++ Maximum contingent deferred sales charge is 4% and is reduced
to 0% after six years.
++++ Maximum contingent deferred sales charge is 1% and is reduced
to 0% after one year.
++++++ Assuming payment of applicable contingent deferred sales
charge.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Performance Data (continued) BlackRock National Municipal Fund
Total Return Based on a $10,000 Investment
A line graph illustrating the growth of a $10,000 investment in Institutional
Shares*++, Investor A Shares*++, Investor B Shares*++, Investor C Shares*++
and Investor C1 Shares*++ compared to a similar investment in Lehman Brothers
Municipal Bond Index++++. Values illustrated are as follows:
Institutional Shares*++
Date Value
June 1997 $10,000.00
June 1998 $10,836.00
June 1999 $10,975.00
June 2000 $11,035.00
June 2001 $12,176.00
June 2002 $13,027.00
June 2003 $14,113.00
June 2004 $14,520.00
June 2005 $15,811.00
June 2006 $16,130.00
June 2007 $16,945.00
Investor A Shares*++
Date Value
June 1997 $ 9,575.00
June 1998 $10,340.00
June 1999 $10,446.00
June 2000 $10,488.00
June 2001 $11,543.00
June 2002 $12,320.00
June 2003 $13,303.00
June 2004 $13,652.00
June 2005 $14,843.00
June 2006 $15,105.00
June 2007 $15,816.00
Investor B Shares*++
Date Value
June 1997 $10,000.00
June 1998 $10,755.00
June 1999 $10,810.00
June 2000 $10,797.00
June 2001 $11,824.00
June 2002 $12,556.00
June 2003 $13,489.00
June 2004 $13,773.00
June 2005 $14,900.00
June 2006 $15,086.00
June 2007 $15,716.00
Investor C Shares*++
Date Value
June 1997 $10,000.00
June 1998 $10,729.00
June 1999 $10,759.00
June 2000 $10,710.00
June 2001 $11,700.00
June 2002 $12,395.00
June 2003 $13,295.00
June 2004 $13,542.00
June 2005 $14,600.00
June 2006 $14,747.00
June 2007 $15,323.00
Investor C1 Shares*++
Date Value
June 1997 $10,000.00
June 1998 $10,749.00
June 1999 $10,800.00
June 2000 $10,783.00
June 2001 $11,790.00
June 2002 $12,514.00
June 2003 $13,450.00
June 2004 $13,726.00
June 2005 $14,827.00
June 2006 $15,005.00
June 2007 $15,639.00
Lehman Brothers Municipal Bond Index++++
Date Value
June 1997 $10,000.00
June 1998 $10,866.00
June 1999 $11,166.00
June 2000 $11,529.00
June 2001 $12,680.00
June 2002 $13,556.00
June 2003 $14,741.00
June 2004 $14,853.00
June 2005 $16,077.00
June 2006 $16,219.00
June 2007 $16,980.00
* Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
++ The Fund invests primarily in long-term municipal bonds rated in any
rating category.
++++ This unmanaged Index consists of revenue bonds, prerefunded bonds,
general obligation bonds and insured bonds, all of which mature within
30 years.
Past performance is not indicative of future results.
Average Annual Total Return
Return
Institutional Shares
One Year Ended 6/30/07 +5.06%
Five Years Ended 6/30/07 +5.40
Ten Years Ended 6/30/07 +5.42
Return Without Return With
Sales Charge Sales Charge*
Investor A Shares
One Year Ended 6/30/07 +4.71% +0.26%
Five Years Ended 6/30/07 +5.12 +4.21
Ten Years Ended 6/30/07 +5.15 +4.69
Return Return
Without CDSC With CDSC++++++
Investor B Shares++
One Year Ended 6/30/07 +4.18% +0.18%
Five Years Ended 6/30/07 +4.59 +4.26
Ten Years Ended 6/30/07 +4.62 +4.62
Return Return
Without CDSC With CDSC++++++
Investor C Shares++++
One Year Ended 6/30/07 +3.91% +2.91%
Five Years Ended 6/30/07 +4.33 +4.33
Ten Years Ended 6/30/07 +4.36 +4.36
Return Return
Without CDSC With CDSC++++++
Investor C1 Shares++++
One Year Ended 6/30/07 +4.23% +3.23%
Five Years Ended 6/30/07 +4.56 +4.56
Ten Years Ended 6/30/07 +4.57 +4.57
* Assuming maximum sales charge of 4.25%.
++ Maximum contingent deferred sales charge is 4% and is reduced
to 0% after six years.
++++ Maximum contingent deferred sales charge is 1% and is reduced
to 0% after one year.
++++++ Assuming payment of applicable contingent deferred sales
charge.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Performance Data (concluded) BlackRock High Yield Municipal Fund
Total Return Based on a $10,000 Investment
A line graph illustrating the growth of a $10,000 investment in Institutional
Shares*++, Investor A Shares*++ and Investor C Shares*++ compared to a similar
investment in Lehman Brothers Municipal Bond Index++++. Values illustrated are
as follows:
Institutional Shares*++
Date Value
8/01/2006 $10,000.00
June 2007 $10,359.00
Investor A Shares*++
Date Value
8/01/2006 $ 9,575.00
June 2007 $ 9,887.00
Investor C Shares*++
Date Value
8/01/2006 $10,000.00
June 2007 $10,184.00
Lehman Brothers Municipal Bond Index++++
Date Value
8/01/2006 $10,000.00
June 2007 $10,339.00
* Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
** Commencement of operations.
++ The Fund invests primarily in municipal bonds rated in any rating
category or in unrated municipal bonds.
++++ This unmanaged Index consists of revenue bonds, prerefunded bonds,
general obligation bonds and insured bonds, all of which mature within
30 years.
Past performance is not indicative of future results.
Aggregate Total Return
Return
Institutional Shares
Inception (8/01/06)
to 6/30/07 +3.59%
Return Without Return With
Sales Charge Sales Charge*
Investor A Shares
Inception (8/01/06)
to 6/30/07 +3.26% -1.13%
Return Return
Without CDSC With CDSC++++
Investor C Shares++
Inception (8/01/06)
to 6/30/07 +2.84% +1.84%
* Assuming maximum sales charge of 4.25%.
++ Maximum contingent deferred sales charge is 1% and is reduced
to 0% after one year.
++++ Assuming payment of applicable contingent deferred sales
charge.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Disclosure of Expenses
Shareholders of these Funds may incur the following charges: (a) expenses
related to transactions, including sales charges, redemption fees and exchange
fees; and (b) operating expenses including advisory fees, distribution fees
including 12b-1 fees, and other Fund expenses. The following example (which is
based on a hypothetical investment of $1,000 invested on January 1, 2007 and
held through June 30, 2007) is intended to assist shareholders both in
calculating expenses based on an investment in the Fund and in comparing these
expenses with similar costs of investing in other mutual funds.
The first table of each Fund provides information about actual account values
and actual expenses. In order to estimate the expenses a shareholder paid
during the period covered by this report, shareholders can divide their
account value by $1,000 and then multiply the result by the number in the
first line under the heading entitled "Expenses Paid During the Period."
The second table of each Fund provides information about hypothetical account
values and hypothetical expenses based on the Fund's actual expense ratio and
an assumed rate of return of 5% per year before expenses. In order to assist
shareholders in comparing the ongoing expenses of investing in this Fund and
other funds, compare the 5% hypothetical example with the 5% hypothetical
examples that appear in other funds' shareholder reports.
The expenses shown in the table are intended to highlight shareholders'
ongoing costs only and do not reflect any transactional expenses, such as
sales charges, redemption fees or exchange fees. Therefore, the second table
is useful in comparing ongoing expenses only, and will not help shareholders
determine the relative total expenses of owning different funds. If these
transactional expenses were included, shareholder expenses would have been
higher.
BlackRock Short-Term Municipal Fund
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value January 1, 2007
January 1, 2007 June 30, 2007 to June 30, 2007
Actual
BlackRock $1,000 $1,013.70 $1.75
Institutional $1,000 $1,012.70 $1.75
Investor A $1,000 $1,011.40 $3.04
Investor A1 $1,000 $1,012.20 $2.25
Investor B $1,000 $1,010.90 $3.49
Investor C $1,000 $1,007.70 $6.77
Hypothetical (5% annual return before expenses)**
BlackRock $1,000 $1,023.06 $1.76
Institutional $1,000 $1,023.06 $1.76
Investor A $1,000 $1,021.78 $3.07
Investor A1 $1,000 $1,022.57 $2.26
Investor B $1,000 $1,021.33 $3.51
Investor C $1,000 $1,018.06 $6.81
* For each class of the Fund, expenses are equal to the annualized expense ratio for the class
(.35% for BlackRock, .35% for Institutional, .61% for Investor A, .45% for Investor A1, .70%
for Investor B and 1.36% for Investor C), multiplied by the average account value over the period,
multiplied by 181/365 to reflect the one-half year period shown.
** Hypothetical 5% annual return before expenses is calculated by pro-rating the number of days in
the most recent fiscal half year divided by 365.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Disclosure of Expenses (continued) BlackRock Municipal Insured Fund
Including Interest Expense and Fees
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value January 1, 2007
January 1, 2007 June 30, 2007 to June 30, 2007
Actual
Institutional $1,000 $1,000.00 $4.41
Investor A $1,000 $ 998.70 $5.65
Investor B $1,000 $ 996.20 $8.17
Investor C $1,000 $ 995.00 $9.45
Investor C1 $1,000 $ 996.00 $8.41
Hypothetical (5% annual return before expenses)**
Institutional $1,000 $1,020.39 $4.46
Investor A $1,000 $1,019.15 $5.71
Investor B $1,000 $1,016.62 $8.25
Investor C $1,000 $1,015.33 $9.54
Investor C1 $1,000 $1,016.37 $8.50
* For each class of the Fund, expenses are equal to the annualized expense ratio for the class
(.89% for Institutional, 1.14% for Investor A, 1.65% for Investor B, 1.91% for Investor C and
1.70% for Investor C1), multiplied by the average account value over the period, multiplied by
181/365 (to reflect the one-half year period shown).
** Hypothetical 5% annual return before expenses is calculated by pro-rating the number of days in
the most fiscal half-year divided by 365.
Excluding Interest Expense and Fees
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value January 1, 2007
January 1, 2007 June 30, 2007 to June 30, 2007
Actual
Institutional $1,000 $1,000.00 $2.38
Investor A $1,000 $ 998.70 $3.67
Investor B $1,000 $ 996.20 $6.19
Investor C $1,000 $ 995.00 $7.52
Investor C1 $1,000 $ 996.00 $6.38
Hypothetical (5% annual return before expenses)**
Institutional $1,000 $1,022.42 $2.41
Investor A $1,000 $1,021.13 $3.71
Investor B $1,000 $1,018.60 $6.26
Investor C $1,000 $1,017.26 $7.60
Investor C1 $1,000 $1,018.40 $6.46
* For each class of the Fund, expenses are equal to the annualized expense ratio for the class
(.48% for Institutional, .74% for Investor A, 1.25% for Investor B, 1.52% for Investor C and
1.29% for Investor C1), multiplied by the average account value over the period, multiplied by
181/365 (to reflect the one-half year period shown).
** Hypothetical 5% annual return before expenses is calculated by pro-rating the number of days in
the most recent fiscal half year divided by 365.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Disclosure of Expenses (continued) BlackRock National Municipal Fund
Including Interest Expense and Fees
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value January 1, 2007
January 1, 2007 June 30, 2007 to June 30, 2007
Actual
Institutional $1,000 $1,005.60 $ 5.02
Investor A $1,000 $1,003.50 $ 6.16
Investor B $1,000 $1,001.00 $ 8.68
Investor C $1,000 $ 999.60 $10.16
Investor C1 $1,000 $1,001.70 $ 8.93
Hypothetical (5% annual return before expenses)**
Institutional $1,000 $1,019.79 $ 5.06
Investor A $1,000 $1,018.65 $ 6.21
Investor B $1,000 $1,016.12 $ 8.75
Investor C $1,000 $1,014.63 $10.24
Investor C1 $1,000 $1,015.87 $ 9.00
* For each class of the Fund, expenses are equal to the annualized expense ratio for the class
(1.01% for Institutional, 1.24% for Investor A, 1.75% for Investor B, 2.05% for Investor C and
1.80% for Investor C1), multiplied by the average account value over the period, multiplied by
181/365 (to reflect the one-half year period shown).
** Hypothetical 5% annual return before expenses is calculated by pro-rating the number of days in
the most fiscal half-year divided by 365.
Excluding Interest Expense and Fees
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value January 1, 2007
January 1, 2007 June 30, 2007 to June 30, 2007
Actual
Institutional $1,000 $1,005.60 $3.08
Investor A $1,000 $1,003.50 $4.27
Investor B $1,000 $1,001.00 $6.80
Investor C $1,000 $ 999.60 $8.23
Investor C1 $1,000 $1,001.70 $7.00
Hypothetical (5% annual return before expenses)**
Institutional $1,000 $1,021.73 $3.11
Investor A $1,000 $1,020.54 $4.31
Investor B $1,000 $1,018.01 $6.85
Investor C $1,000 $1,016.57 $8.30
Investor C1 $1,000 $1,017.81 $7.05
* For each class of the Fund, expenses are equal to the annualized expense ratio for the class
(.62% for Institutional, .86% for Investor A, 1.37% for Investor B, 1.66% for Investor C and
1.41% for Investor C1), multiplied by the average account value over the period, multiplied by
181/365 (to reflect the one-half year period shown).
** Hypothetical 5% annual return before expenses is calculated by pro-rating the number of days in
the most recent fiscal half year divided by 365.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Disclosure of Expenses (concluded) BlackRock High Yield Municipal Fund
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value January 1, 2007
January 1, 2007 June 30, 2007 to June 30, 2007
Actual
Institutional $1,000 $1,000.00 $2.38
Investor A $1,000 $ 998.70 $3.67
Investor C $1,000 $ 995.00 $7.52
Hypothetical (5% annual return before expenses)**
Institutional $1,000 $1,022.42 $2.41
Investor A $1,000 $1,021.13 $3.71
Investor C $1,000 $1,017.26 $7.60
* For each class of the Fund, expenses are equal to the annualized expense ratio for the class
(.61% for Institutional, .89% for Investor A and 1.49% for Investor C), multiplied by the
average account value over the period, multiplied by 181/365 (to reflect the one-half year
period shown).
** Hypothetical 5% annual return before expenses is calculated by pro-rating the number of days in
the most recent fiscal half year divided by 365.
Portfolio Information as of June 30, 2007
Percent of
Long Term
BlackRock Short-Term Municipal Fund Investments
Other Revenue Bonds 52.1%
General Obligation & Tax Revenue Bonds 33.1
Prerefunded Bonds 14.8
Percent of
Long Term
BlackRock Municipal Insured Fund Investments
Other Revenue Bonds 69.1%
General Obligation & Tax Revenue Bonds 19.4
Prerefunded Bonds 11.5
Percent of
Long Term
BlackRock National Municipal Fund Investments
Other Revenue Bonds 74.0%
General Obligation & Tax Revenue Bonds 11.7
Prerefunded Bonds 14.3
Percent of
Long Term
BlackRock High Yield Municipal Fund Investments
Other Revenue Bonds 87.0%
General Obligation & Tax Revenue Bonds 13.0
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments as of June 30, 2007
BlackRock Short-Term Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Alabama--5.3%
$ 6,075 Birmingham, Alabama, Special Care Facilities
Financing Authority Revenue Bonds (Ascension
Health Subordinate Credit Group), Series A, 5%
due 10/01/2008 $ 6,158
8,095 Huntsville, Alabama, GO, Refunding, Series A,
5.25% due 2/01/2009 (j) 8,271
Arizona--3.0%
1,376 Tierra Antigua, Arizona, Revenue Bonds, VRDN, AMT,
Series A, 3.76% due 12/01/2034 (b) 1,376
7,000 Yavapai County, Arizona, IDA, Solid Waste Disposal
Revenue Bonds (Waste Management Inc. Project),
AMT, 4% due 6/01/2027 6,751
California--1.6%
750 California Pollution Control Financing Authority,
Solid Waste Disposal Revenue Bonds (Republic
Services, Inc. Project), VRDN, AMT, 4%
due 3/01/2028 (b) 750
3,650 Contra Costa County, California, M/F Housing
Revenue Bonds (Pleasant Hill Bart Transit Station
Project), VRDN, AMT Series A, 3.95%
due 4/15/2046 (b) 3,651
Florida--8.8%
7,000 Florida Hurricane Catastrophe Fund Financing
Corporation Revenue Bonds, Series A, 5%
due 7/01/2010 7,201
2,020 Miami-Dade County, Florida, Educational Facilities
Authority Revenue Bonds (University of Miami),
Series A, 5.75% due 4/01/2010 (a)(c) 2,132
14,195 Orange County, Florida, Tourist Development, Tax
Revenue Bonds, 5.50% due 10/01/2009 (a)(c) 14,695
Georgia--8.7%
5,600 Catoosa County, Georgia, School District, GO, 4.25%
due 8/01/2008 (h) 5,630
6,005 Georgia Municipal Electric Authority, Power Revenue
Refunding Bonds, Series DD, 7% due 1/01/2008 (h) 6,101
11,905 Georgia State, GO, Series B, 5% due 3/01/2008 12,007
Illinois--1.8%
5,000 Chicago, Illinois, S/F Mortgage Revenue Refunding
Bonds, AMT, Series F, 3.83% due 4/18/2008 (i)(k) 4,997
Indiana--2.2%
4,750 Indiana Bond Bank Revenue Bonds (State Revolving
Fund), Series B, 5.30% due 8/01/2010 (c) 4,978
1,000 Indiana State Development Finance Authority, IDR
(Republic Services, Inc. Project), VRDN, AMT, 4.09%
due 11/01/2035 (b) 1,000
Face
Amount Municipal Bonds Value
Kansas--0.7%
$ 2,000 Junction City, Kansas, Temporary Notes, GO, Series D,
5% due 8/01/2007 $ 2,002
Louisiana--1.8%
2,900 Louisiana HFA, S/F Mortgage Revenue Bonds, VRDN,
AMT, 4.53% due 11/28/2008 (b) 2,900
2,133 Louisiana HFA, S/F Mortgage Revenue Refunding
Bonds, VRDN, AMT, 4.604% due 12/01/2047 (b) 2,134
Massachusetts--6.2%
8,415 Massachusetts Municipal Wholesale Electric
Company, Power Supply System Revenue Refunding
Bonds (Nuclear Project Number 4 Issue), Series A, 5%
due 7/01/2008 (h) 8,516
8,505 Massachusetts State Consolidated Loan, GO,
Series C, 5% due 5/01/2008 (f) 8,593
Michigan--1.7%
280 Michigan State Strategic Fund, Limited Obligation
Revenue Bonds (Kay Screen Printing, Inc. Project),
VRDN, AMT, 4.15% due 5/01/2020 (b) 280
4,120 Michigan State Trunk Line Fund, Revenue Refunding
Bonds, Series B, 5% due 9/01/2010 (j) 4,254
Minnesota--3.7%
2,620 Minneapolis and Saint Paul, Minnesota, Metropolitan
Airports Commission, Airport Revenue Bonds, AMT,
Series B, 5.50% due 1/01/2010 (g) 2,702
7,385 Minnesota State, GO, Refunding, 5% due 8/01/2007 7,393
Nebraska--0.9%
2,500 Central Plains Energy Project, Nebraska, Revenue
Bonds (Gas Project Number 1), VRDN, 3.908%
due 12/01/2010 (b) 2,494
Nevada--5.2%
6,500 Clark County, Nevada, Airport System Subordinate
Lien Revenue Bonds, AMT, Series B-1, 5%
due 7/01/2008 6,570
7,500 Clark County, Nevada, EDR (Alexander Dawson
School of Nevada Project), 5.50% due 5/15/2009 (c) 7,780
New Jersey--2.6%
2,000 Bayonne, New Jersey, GO, BAN, 4.75%
due 10/26/2007 2,002
4,790 New Jersey Building Authority, State Building Revenue
Refunding Bonds, Series B, 5.25% due 12/15/2010 (a) 5,002
New Mexico--2.1%
5,685 New Mexico State, Severance Tax Bonds, Series A,
5% due 7/01/2008 (h) 5,756
Portfolio Abbreviations
To simplify the listings of BlackRock Municipal Bond Fund, Inc.'s portfolio
holdings in the Schedules of Investments, we have abbreviated the names of
many of the securities according to the list at right.
AMT Alternative Minimum Tax (subject to)
BAN Bond Anticipation Notes
CARS Complementary Auction Rate Securities
COP Certificates of Participation
CP Commercial Paper
DRIVERS Derivative Inverse Tax-Exempt Receipts
EDA Economic Development Authority
EDR Economic Development Revenue Bonds
GO General Obligation Bonds
HDA Housing Development Agency
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
S/F Single-Family
TRAN Tax Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (concluded)
BlackRock Short-Term Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Ohio--3.1%
$ 4,400 Ohio State Building Authority, State Facilities
Revenue Bonds (Administrative Building Fund
Projects), Series A, 5.375% due 10/01/2008 (c) $ 4,527
3,875 Ohio State, Common Schools, GO, Series A, 5%
due 3/15/2011 4,015
Oklahoma--0.2%
500 Oklahoma State Capitol Improvement Authority, State
Facilities Revenue Bonds (Higher Education Projects),
VRDN, Series D-4, 3.76% due 7/01/2034 (b)(f) 500
Pennsylvania--3.4%
4,000 Bethlehem, Pennsylvania, Area School District, GO,
Refunding, Series A, 5% due 9/01/2010 (h) 4,130
5,000 Pennsylvania State, GO, Refunding, Third Series, 5%
due 7/01/2009 5,114
South Carolina--3.3%
4,590 Aiken County, South Carolina, Consolidated School
District, GO, Refunding, 5% due 3/01/2009 4,679
Hilton Head Island, South Carolina, Public Facility
Corporation, COP (Beach Preservation Fee Pledge) (h):
2,161 5% due 8/01/2008 2,189
2,241 5% due 8/01/2009 2,292
Tennessee--5.7%
11,500 Metropolitan Government of Nashville and Davidson
County, Tennessee, Health and Education Facilities
Board, Revenue Refunding Bonds (Ascension Health
Credit), VRDN, Series B-1, 3.72% due 11/15/2031 (b) 11,498
4,000 Tennessee Energy Acquisition Corporation, Gas
Revenue Bonds, Series A, 5% due 9/01/2009 4,082
Texas--10.3%
3,980 Austin, Texas, Independent School District, GO,
Refunding, 5.25% due 8/01/2009 4,091
7,000 Brazos River, Texas, Harbor Navigation District,
Brazoria County Environmental Revenue Refunding
Bonds (Dow Chemical Company Project), AMT, VRDN,
Series A-4, 5.20% due 5/15/2033 (b) 7,047
5,000 Harris County, Texas, Toll Road Revenue Refunding
Bonds, VRDN, Series B-2, 5% due 8/15/2021 (b)(g) 5,108
2,200 Montgomery County, Texas, Unlimited Tax Adjustable
Rate Road, GO, VRDN, Series B, 5% due 3/01/2028 (b)(j) 2,229
Face
Amount Municipal Bonds Value
Texas (concluded)
$ 2,790 North Texas Thruway Authority, Dallas North Thruway
System, Revenue Refunding Bonds, VRDN, Series B,
5% due 1/01/2038 (a)(b) $ 2,821
2,500 San Antonio, Texas, Electric and Gas System, Junior
Lien Revenue Bonds, VRDN, 3.55% due 12/01/2027 (b) 2,494
4,275 Tarrant County, Texas, Cultural Education Facilities
Financing Corporation, Revenue Refunding Bonds
(Texas Health Resources), Series A, 5% due 2/15/2011 4,401
Virginia--1.8%
4,885 Virginia State Public School Authority, School
Financing Revenue Bonds, Series B, 5%
due 8/01/2008 (c) 4,996
Washington--4.9%
9,940 Energy Northwest, Washington, Electric Revenue
Refunding Bonds (Columbia Generating Station),
Series A, 5.25% due 7/01/2009 (a) 10,210
2,900 Tacoma, Washington, Electric System Revenue
Refunding Bonds, Series A, 5.625% due 1/01/2011 (j) 3,082
Wisconsin--5.0%
6,500 Madison, Wisconsin, Metropolitan School District,
TRAN, 4% due 9/07/2007 6,501
7,070 Wisconsin Public Power Inc., Power Supply System,
Revenue Refunding Bonds, Series A, 5.25%
due 7/01/2010 (h) 7,334
Puerto Rico--2.2%
6,000 Puerto Rico Commonwealth, CP, 4.10%
due 8/01/2007 6,000
Total Municipal Bonds
(Cost--$263,932)--96.2% 263,416
Shares
Held Short-Term Securities
6,603 Merrill Lynch Institutional Tax-Exempt Fund,
3.59% (d)(e) 6,603
Total Short-Term Securities
(Cost--$6,603)--2.4% 6,603
Total Investments (Cost--$270,535*)--98.6% 270,019
Other Assets Less Liabilities--1.4% 3,700
----------
Net Assets--100.0% $ 273,719
==========
* The cost and unrealized appreciation (depreciation) of investments
as of June 30, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 270,535
===============
Gross unrealized appreciation $ 92
Gross unrealized depreciation (608)
---------------
Net unrealized depreciation $ (516)
===============
(a) AMBAC Insured.
(b) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(c) Prerefunded.
(d) 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 (18,041) $314
(e) Represents the current yield as of June 30, 2007.
(f) CIFG Insured.
(g) FGIC Insured.
(h) MBIA Insured.
(i) FHLMC Collateralized.
(j) FSA Insured.
(k) FNMA/GNMA Collateralized.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments as of June 30, 2007
BlackRock Municipal Insured Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Alabama--2.0%
$10,000 Lauderdale County and Florence, Alabama, Health
Care Authority Revenue Refunding Bonds (Coffee
Health Group), Series A, 6% due 7/01/2029 (g) $ 10,692
7,000 University of Alabama, University Revenue Bonds
(Birmingham), 6% due 10/01/2009 (c)(h) 7,320
Arkansas--0.5%
4,000 University of Arkansas, University Revenue Bonds
(Various Facilities-Fayetteville Campus), 5%
due 12/01/2027 (c) 4,116
California--16.6%
2,800 Arcadia, California, Unified School District, Capital
Appreciation, GO (Election of 2006), Series A, 4.96%
due 8/01/2039 (e)(l) 540
2,075 California State Department of Veteran Affairs, Home
Purchase Revenue Refunding Bonds, Series A, 5.35%
due 12/01/2027 (a) 2,173
2,000 Corona-Norco, California, Unified School District, GO
(Election of 2006), Series A, 5% due 8/01/2031 (e) 2,082
Fresno, California, Unified School District, GO
(Election of 2001):
5,170 Series D, 5% due 8/01/2027 (g) 5,361
1,500 Series E, 5% due 8/01/2030 (e) 1,558
Los Angeles, California, Unified School District, GO:
13,690 (Election of 1997), Series F, 5%
due 7/01/2013 (c)(h) 14,474
10,000 (Election of 2002), Series B, 5%
due 7/01/2022 (a) 10,531
8,965 Modesto, California, Schools Infrastructure Financing
Agency, Special Tax Bonds, 5.50% due 9/01/2036 (a) 9,554
12,040 Mount Diablo, California, Unified School District, GO
(Election of 2002), 5% due 7/01/2027 (c) 12,410
6,440 Palm Springs, California, Financing Authority, Lease
Revenue Refunding Bonds (Convention Center
Project), Series A, 5.50% due 11/01/2035 (g) 6,965
10,000 Ramona, California, Unified School District,
Convertible Capital Appreciation Refunding Bonds,
COP, 5.367% due 5/01/2012 (c)(l) 7,926
3,900 Redlands, California, Unified School District, GO
(Election of 2002), 5% due 7/01/2025 (e) 4,035
11,685 Rialto, California, Unified School District, GO,
Series A, 6.24% due 6/01/2025 (c)(l) 5,020
5,000 Roseville, California, Joint Union High School
District, GO (Election of 2004), Series A, 5%
due 8/01/2029 (c) 5,159
5,075 Sacramento, California, Unified School District, GO
(Election of 1999), Series B, 5% due 7/01/2026 (c) 5,229
2,685 San Diego, California, Community College District,
GO (Election of 2002), 5% due 5/01/2030 (e) 2,776
3,495 San Diego County, California, COP (Edgemoor
Project and Regional System), Refunding, 5%
due 2/01/2027 (a) 3,597
3,700 San Jose, California, GO (Libraries, Parks and Public
Safety Projects), 5% due 9/01/2030 (g) 3,809
10,055 Sequoia, California, Unified High School District, GO,
Refunding, Series B, 5.50% due 7/01/2035 (e) 10,964
950 Simi Valley, California, School Financing Authority,
Revenue Refunding Bonds, 5% due 8/01/2027 (e) 996
2,755 Tahoe Truckee, California, Unified School District, GO
(School Facilities Improvement District Number 2),
Series A, 5.25% due 8/01/2029 (g) 2,885
Face
Amount Municipal Bonds Value
California (concluded)
Tustin, California, Unified School District, Senior Lien
Special Tax Bonds (Community Facilities District
Number 97-1), Series A (e):
$ 7,980 5% due 9/01/2032 $ 8,133
9,330 5% due 9/01/2038 9,499
10,000 Washington, California, Unified School District,
COP (New High School Project), 5.125%
due 8/01/2037 (a) 10,354
Colorado--2.8%
19,250 Aurora, Colorado, COP, 6% due 12/01/2010 (a)(h) 20,482
4,000 Logan County, Colorado, Justice Center Finance
Corporation, COP, 5.50% due 12/01/2020 (g) 4,221
District of Columbia--1.3%
8,735 District of Columbia, Ballpark Revenue Bonds,
Series B-1, 5% due 2/01/2031 (c) 8,999
2,800 District of Columbia, GO, Series A, 4.75%
due 6/01/2036 (c) 2,782
Florida--1.3%
5,500 Dade County, Florida, Water and Sewer System
Revenue Bonds, 5.25% due 10/01/2026 (c) 5,569
3,900 Miami-Dade County, Florida, Aviation Revenue
Refunding Bonds (Miami International Airport), AMT,
Series A, 5% due 10/01/2040 (k) 3,936
1,600 West Coast Regional Water Supply Authority, Florida,
Capital Improvement Revenue Bonds, 10.40%
due 10/01/2010 (a)(h) 1,700
Georgia--4.1%
Georgia Municipal Electric Authority, Power Revenue
Refunding Bonds (a):
20,000 Series EE, 7% due 1/01/2025 26,013
90 Series Y, 6.40% due 1/01/2011 (h) 97
490 Series Y, 6.40% due 1/01/2013 (b) 535
8,420 Series Y, 6.40% due 1/01/2013 9,187
Illinois--1.0%
8,505 Chicago, Illinois, O'Hare International Airport,
Revenue Refunding Bonds, Third Lien, AMT,
Series C-2, 5.25% due 1/01/2034 (k) 8,784
Kansas--0.6%
5,145 Manhattan, Kansas, Hospital Revenue Bonds (Mercy
Health Center), 5.50% due 8/15/2020 (e) 5,400
Louisiana--1.5%
2,500 Louisiana State Citizens Property Insurance
Corporation, Assessment Revenue Bonds, Series B,
5% due 6/01/2022 (a) 2,595
2,400 Louisiana State, Gas and Fuels Tax Revenue Bonds,
Series A, 4.75% due 5/01/2039 (e) 2,380
5,000 New Orleans, Louisiana, GO (Public Improvements),
5.25% due 12/01/2029 (a) 5,244
2,800 Rapides Financing Authority, Louisiana, Revenue
Bonds (Cleco Power LLC Project), AMT, 4.70%
due 11/01/2036 (a) 2,691
Maryland--0.6%
4,400 Maryland State Health and Higher Educational
Facilities Authority Revenue Bonds (University of
Maryland Medical System), Series B, 7%
due 7/01/2022 (c) 5,514
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (continued)
BlackRock Municipal Insured Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Massachusetts--7.2%
$ 4,000 Massachusetts State, HFA, Rental Housing
Mortgage Revenue Bonds, AMT, Series C, 5.60%
due 1/01/2045 (e) $ 4,176
Massachusetts State HFA, S/F Housing Revenue
Bonds, AMT, Series 128 (e):
2,845 4.80% due 12/01/2027 2,780
7,000 4.875% due 12/01/2038 6,786
Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A:
15,000 5% due 8/15/2030 (e) 15,536
9,950 4.75% due 8/15/2032 (a) 9,997
22,250 Massachusetts State Special Obligation Dedicated
Tax Revenue Bonds, 5.25% due 1/01/2014 (c)(h) 23,738
Minnesota--1.7%
5,860 Delano, Minnesota, Independent School
District Number 879, GO, Series A, 5.875%
due 2/01/2025 (e) 6,210
Sauk Rapids, Minnesota, Independent School
District Number 047, GO, Series A (g):
3,735 5.65% due 2/01/2020 3,930
4,440 5.70% due 2/01/2021 4,679
Mississippi--1.4%
1,320 Harrison County, Mississippi, Wastewater
Management District, Revenue Refunding Bonds
(Wastewater Treatment Facilities), Series A, 8.50%
due 2/01/2013 (b)(c) 1,607
10,000 Mississippi Hospital Equipment and Facilities
Authority Revenue Bonds (Forrest County General
Hospital Project), 6% due 1/01/2030 (e) 10,735
Missouri--4.5%
Kansas City, Missouri, Airport Revenue Refunding and
Improvement Bonds, Series A (g):
12,990 5.50% due 9/01/2013 13,219
9,000 5.50% due 9/01/2014 9,159
Missouri Joint Municipal Electric Utility Commission,
Power Project Revenue Bonds (Latan 2 Project),
Series A (a):
7,930 5% due 1/01/2027 8,213
8,325 5% due 1/01/2028 8,622
Nevada--1.2%
1,300 Clark County, Nevada, IDR (Southwest Gas Corp.
Project), AMT, Series A, 4.75% due 9/01/2036 (c) 1,250
9,250 Clark County, Nevada, Passenger Facility Charge
Revenue Bonds (Las Vegas McCarran International),
Series A-2, 5% due 7/01/2026 (a) 9,589
New Jersey--8.2%
6,810 Cape May County, New Jersey, Industrial Pollution
Control Financing Authority, Revenue Refunding
Bonds (Atlantic City Electric Company Project),
Series A, 6.80% due 3/01/2021 (g) 8,490
Garden State Preservation Trust of New Jersey, Open
Space and Farmland Preservation Revenue Bonds,
Series A (e):
3,125 5.80% due 11/01/2021 3,490
8,310 5.80% due 11/01/2022 9,280
4,340 5.80% due 11/01/2023 4,847
Face
Amount Municipal Bonds Value
New Jersey (concluded)
New Jersey EDA, Motor Vehicle Surcharge Revenue
Bonds, Series A (g):
$ 5,000 5% due 7/01/2027 $ 5,164
23,000 5.25% due 7/01/2033 24,224
New Jersey State Transportation Trust Fund Authority,
Transportation System Revenue Bonds, Series D:
4,240 5% due 6/15/2018 (a) 4,451
11,530 5% due 6/15/2019 (e) 12,065
New Mexico--1.2%
10,400 New Mexico Finance Authority, Senior Lien State
Transportation Revenue Bonds, Series A, 5.125%
due 6/15/2018 (g) 10,982
New York--12.6%
2,200 Metropolitan Transportation Authority, New York,
Transportation Revenue Bonds, Series A, 4.75%
due 11/15/2037 (c) 2,202
New York City, New York, GO:
11,495 Series C, 5.625% due 3/15/2012 (h)(k) 12,325
5 Series C, 5.625% due 3/15/2018 (k) 5
10,000 Series E, 5% due 11/01/2017 (e) 10,553
6,155 Series I, 6% due 4/15/2012 (e) 6,227
3 New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, DRIVERS, Series 1133Z,
6.45% due 10/15/2012 (a)(j) 3
New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A:
16,905 5% due 10/15/2020 (g) 17,692
15,650 5% due 10/15/2032 (a) 16,210
11,795 New York State Dormitory Authority Revenue Bonds
(School Districts Financing Program), Series D, 5.25%
due 10/01/2023 (g) 12,418
9,110 New York State Urban Development Corporation,
Personal Income Tax Revenue Bonds (State Facilities),
Series A-1, 5.25% due 3/15/2034 (c) 9,570
5 Niagara Falls, New York, GO, Public Improvement,
6.90% due 3/01/2024 (g) 5
22,500 Tobacco Settlement Financing Corporation of New
York Revenue Bonds, Series A-1, 5.25%
due 6/01/2022 (a) 23,618
North Carolina--0.3%
3,030 North Carolina HFA, Home Ownership Revenue
Bonds, AMT, Series 14-A, 5.35% due 1/01/2022 (a) 3,073
North Dakota--0.3%
2,630 North Dakota State HFA, Revenue Bonds (Housing
Finance Program), Series C, 5.30% due 7/01/2022 (a) 2,659
Oklahoma--0.8%
Oklahoma State Industries Authority, Health System
Revenue Refunding Bonds (Integris Obligated Group),
Series A (g):
2,680 6.25% due 8/15/2009 (h) 2,833
3,705 6.25% due 8/15/2016 3,904
Oregon--1.6%
8,700 Oregon State Department, Administrative Services,
COP, Series A, 6.25% due 5/01/2010 (a)(h) 9,315
3,865 Port of Portland, Oregon, Airport Revenue Refunding
Bonds (Portland International Airport), AMT,
Series 7-B, 7.10% due 1/01/2012 (g)(h) 4,310
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (continued)
BlackRock Municipal Insured Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Pennsylvania--2.7%
$ 5,510 Philadelphia, Pennsylvania, Gas Works Revenue
Bonds, 12th Series B, 7% due 5/15/2020 (b)(g) $ 6,444
4,420 Philadelphia, Pennsylvania, Redevelopment Authority
Revenue Bonds (Neighborhood Transformation),
Series A, 5.50% due 4/15/2020 (c) 4,675
12,010 Pittsburgh, Pennsylvania, GO, Series C, 5.25%
due 9/01/2018 (e) 12,898
Rhode Island--0.8%
6,815 Rhode Island State Economic Development
Corporation, Airport Revenue Bonds, Series B, 6%
due 7/01/2010 (c)(h) 7,270
South Carolina--0.6%
5,000 Scago Educational Facilities Corporation for Pickens
County School District, South Carolina, Revenue
Bonds, 5% due 12/01/2031 (e) 5,155
Texas--1.6%
3,500 Houston, Texas, Water Conveyance System Contract,
COP, Series J, 6.25% due 12/15/2013 (a) 3,907
8,110 Lewisville, Texas, Independent School District, Capital
Appreciation and School Building, GO, Refunding, 4.67%
due 8/15/2024 (c)(l) 3,471
1,500 North Texas Thruway Authority, Dallas North
Thruway System Revenue Bonds, Series A, 5%
due 1/01/2035 (e) 1,536
Texas State Department of Housing and Community
Affairs, S/F Mortgage Revenue Bonds, AMT,
Series A (d)(g):
2,085 5.45% due 9/01/2023 2,120
2,725 5.50% due 3/01/2026 2,775
Utah--1.9%
9,535 Utah Transit Authority, Sales Tax and Transportation
Revenue Bonds (Salt Lake County Light Rail Transit
Project), 5.375% due 12/15/2007 (e)(h) 9,698
Utah Water Finance Agency Revenue Bonds (Pooled
Loan Financing Program), Series A (a):
2,515 5.75% due 10/01/2015 2,650
3,770 6% due 10/01/2020 3,993
Washington--0.9%
7,225 Chelan County, Washington, Public Utility District
Number 001, Consolidated Revenue Bonds
(Chelan Hydro System), AMT, Series A, 5.45%
due 7/01/2037 (a) 7,484
West Virginia--1.4%
12,250 Pleasants County, West Virginia, PCR, Refunding
(Potomac-Pleasants), Series C, 6.15%
due 5/01/2015 (a) 12,594
Wisconsin--1.4%
9,000 Superior, Wisconsin, Limited Obligation Revenue
Refunding Bonds (Midwest Energy Resources),
Series E, 6.90% due 8/01/2021 (c) 11,283
670 Wisconsin State, GO, AMT, Series B, 6.50%
due 5/01/2025 (g) 671
Total Municipal Bonds
(Cost--$713,404)--84.6% 743,052
Face
Amount Municipal Bonds Held in Trust (m) Value
California--2.2%
$11,360 California Pollution Control Financing Authority,
PCR, Refunding (Pacific Gas and Electric), AMT,
Series A, 5.35% due 12/01/2016 (g) $ 11,962
7,500 San Jose, California, Financing Authority, Lease
Revenue Refunding Bonds (Civic Center Project),
Series B, 5% due 6/01/2032 (a) 7,633
Florida--3.4%
Miami-Dade County, Florida, Aviation Revenue
Refunding Bonds (Miami International Airport), AMT,
Series A:
15,000 5% due 10/01/2039 (g) 15,173
14,600 5% due 10/01/2040 (k) 14,734
Illinois--2.2%
17,690 Chicago, Illinois, O'Hare International Airport
Revenue Bonds, Third Lien, AMT, Series B-2, 6%
due 1/01/2027 (g)(k) 19,444
Maryland--2.6%
21,640 Baltimore, Maryland, Convention Center Hotel
Revenue Bonds, Senior Series A, 5.25%
due 9/01/2039 (k) 22,797
Michigan--1.6%
13,145 Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds (Detroit Edison Company
Pollution Control Project), AMT, Series A, 5.50%
due 6/01/2030 (k) 13,878
Nebraska--1.3%
11,300 Public Power Generation Agency, Nebraska Revenue
Bonds (Whelan Energy Center Unit 2-A), 5%
due 1/01/2025 (a) 11,751
New Jersey--1.6%
13,500 New Jersey State Turnpike Authority, Turnpike Revenue
Bonds, Series C, 5% due 1/01/2030 (e) 13,969
New York--1.7%
13,925 New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A, 5.25%
due 10/15/2027 (a) 14,799
Texas--8.4%
21,230 Dallas-Fort Worth, Texas, International Airport Joint
Revenue Refunding and Improvement Bonds, AMT,
Series A, 5% due 11/01/2025 (g) 21,373
35,950 Dallas-Fort Worth, Texas, International
Airport Revenue Bonds, AMT, Series A, 6%
due 11/01/2028 (c) 37,310
14,050 Harris County, Texas, Toll Road Revenue
Refunding Bonds, Senior Lien, Series A, 5.25%
due 8/15/2035 (e) 14,582
Total Municipal Bonds Held in Trust
(Cost--$220,949)--25.0% 219,405
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (concluded)
BlackRock Municipal Insured Fund
(In Thousands)
Shares
Held Mutual Funds (f) Value
300 BlackRock California Insured Municipal 2008
Term Trust, Inc. $ 4,524
810 BlackRock Insured Municipal 2008 Term Trust, Inc. 12,312
205 BlackRock Insured Municipal Term Trust, Inc. 1,995
Total Mutual Funds
(Cost--$21,126)--2.1% 18,831
Shares
Held Short-Term Securities Value
3,237 Merrill Lynch Institutional Tax-Exempt Fund,
3.59% (f)(i) $ 3,237
Total Short-Term Securities
(Cost--$3,237)--0.4% 3,237
Total Investments (Cost--$958,716*)--112.1% 984,525
Other Assets Less Liabilities--0.5% 4,443
Liability for Trust Certificates, Including Interest
Expense Payable--(12.6%) (110,515)
----------
Net Assets--100.0% $ 878,453
==========
* The cost and unrealized appreciation (depreciation) of investments
as of June 30, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 849,019
===============
Gross unrealized appreciation $ 30,800
Gross unrealized depreciation (5,070)
---------------
Net unrealized appreciation $ 25,730
===============
(a) AMBAC Insured.
(b) Escrowed to maturity.
(c) FGIC Insured.
(d) FNMA/GNMA Collateralized.
(e) FSA Insured.
(f) 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:
Purchase Sales Realized Dividend
Affiliate Cost Cost Gain Income
BlackRock California Insured
Municipal 2008
Term Trust, Inc. -- -- -- $222
BlackRock Insured Municipal
2008 Term Trust, Inc. -- -- -- $627
BlackRock Insured Municipal
Term Trust, Inc. -- -- -- $ 74
Merrill Lynch Institutional
Tax-Exempt Fund $1,507* -- -- $302
* Represents net purchase cost.
(g) MBIA Insured.
(h) Prerefunded.
(i) Represents the current yield as of June 30, 2007.
(j) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(k) XL Capital Insured.
(l) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(m) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund may have acquired the residual interest certificates.
These securities serve as collateral in a financing transaction. See
Note 1(c) to Financial Statements for details of municipal bonds held
in trust.
o Forward interest rate swaps outstanding as of June 30, 2007 were
as follows:
Notional Unrealized
Amount Appreciation
Pay a fixed rate of 3.834% and receive a
floating rate based on 1-week Bond Market
Association Rate
Broker, JPMorgan Chase
Expires August 2017 $25,000 $290
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments as of June 30, 2007
BlackRock National Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Alabama--0.9%
$ 3,820 Alabama Incentives Financing Authority, Special
Obligation Revenue Refunding Bonds, Series A, 6%
due 10/01/2029 (c) $ 4,050
3,525 Jefferson County, Alabama, Public Building Authority,
Lease Revenue Bonds, 5.125% due 4/01/2021 (c) 3,712
500 Mobile, Alabama, Industrial Development Board,
Environmental Improvement Revenue Refunding
Bonds (International Paper Company Project), AMT,
Series A, 6.35% due 5/15/2016 524
2,500 Selma, Alabama, IDB, Environmental Improvement
Revenue Refunding Bonds (International Paper
Company Project), AMT, Series A, 6.70%
due 2/01/2018 2,646
3,400 Tuscaloosa, Alabama, Special Care Facilities Financing
Authority, Residential Care Facility Revenue Bonds
(Capstone Village, Inc. Project), Series A, 5.875%
due 8/01/2036 3,430
Alaska--0.3%
3,860 Anchorage, Alaska, School, GO, Series B, 5.875%
due 12/01/2010 (e)(j) 4,097
Arizona--3.2%
4,000 Arizona Health Facilities Authority Revenue Bonds
(Catholic Healthcare West), Series A, 6.625%
due 7/01/2010 (j) 4,328
270 Maricopa County, Arizona, Hospital Revenue
Refunding Bonds (Sun Health Corporation),
6.125% due 4/01/2018 276
3,100 Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1), Series A,
6.75% due 7/01/2029 3,139
1,625 Maricopa County, Arizona, IDA, Health Facilities
Revenue Refunding Bonds (Catholic Healthcare West
Project), Series A, 5% due 7/01/2021 1,632
1,000 Maricopa County, Arizona, Pollution Control
Corporation, PCR, Refunding (Public Service
Company of New Mexico Project), Series A, 6.30%
due 12/01/2026 1,023
Peoria, Arizona, Improvement District Number 8801,
Special Assessment Bonds:
190 7.30% due 1/01/2009 195
395 7.30% due 1/01/2011 405
Peoria, Arizona, Improvement District Number 8802,
Special Assessment Bonds:
430 7.20% due 1/01/2010 440
510 7.20% due 1/01/2013 522
4,999 Phoenix and Pima County, Arizona, IDA,
S/F Mortgage Revenue Bonds, AMT, Series 3-A,
5.25% due 8/01/2038 (i)(l) 5,099
7,500 Phoenix and Pima County, Arizona, IDA,
S/F Mortgage Revenue Refunding Bonds, AMT,
Series 2007-1, 5.25% due 8/01/2038 (i)(l) 7,657
2,330 Phoenix, Arizona, Civic Improvement Corporation,
Municipal Facilities, Excise Tax Revenue Bonds,
5.75% due 7/01/2010 (e)(j) 2,467
3,685 Phoenix, Arizona, IDA, Airport Facility, Revenue
Refunding Bonds (America West Airlines Inc. Project),
AMT, 6.30% due 4/01/2023 3,734
500 Pinal County, Arizona, IDA, Wastewater Revenue
Bonds (San Manuel Facilities Project), AMT, 6.25%
due 6/01/2026 544
Face
Amount Municipal Bonds Value
Arizona (concluded)
$ 391 Prescott Valley, Arizona, Improvement District, Special
Assessment Bonds (Sewer Collection System Roadway
Repair), 7.90% due 1/01/2012 $ 405
6,000 Salt River Project, Arizona, Agriculture Improvement
and Power District, Electric System Revenue
Refunding Bonds, Series A, 5.125% due 1/01/2023 6,231
3,515 Tucson, Arizona, IDA, Senior Living Facilities Revenue
Bonds (Christian Care Tucson Inc. Project), Series A,
6.125% due 7/01/2010 (j)(m) 3,759
1,000 University of Arizona, COP (University of
Arizona Parking and Student Housing), 5.75%
due 6/01/2009 (c)(j) 1,035
University of Arizona, COP (University of
Arizona Projects), Refunding, Series A (c):
2,915 5.50% due 6/01/2012 (j) 3,108
265 5.50% due 6/01/2018 281
Vistancia Community Facilities District, Arizona, GO:
3,000 6.75% due 7/15/2022 3,285
2,125 5.75% due 7/15/2024 2,267
Arkansas--0.1%
20 Arkansas State Development Finance Authority,
S/F Mortgage Revenue Bonds (Mortgage-
Backed Securities Program), Series H, 6.15%
due 7/01/2016 (i) 20
250 Arkansas State Student Loan Authority Revenue
Bonds, AMT, Sub-Series B, 7.25% due 6/01/2009 256
200 Jonesboro, Arkansas, Residential Housing and Health
Care Facilities Board, Hospital Revenue Refunding
Bonds (Saint Bernards Regional Medical Center),
Series B, 5.90% due 7/01/2016 (c) 202
250 North Little Rock, Arkansas, Health Facilities Board,
Health Care Revenue Bonds (Baptist Health), 5.50%
due 7/01/2016 256
500 Pine Bluff, Arkansas, Environmental Improvement
Revenue Refunding Bonds (International Paper
Company Project), AMT, Series A, 6.70%
due 8/01/2020 528
250 University of Central Arkansas, Housing System
Revenue Bonds, 6.50% due 1/01/2010 (h)(j) 270
California--15.8%
2,500 Agua Caliente Band of Cahuilla Indians, California,
Casino Revenue Bonds, 6% due 7/01/2018 2,653
12,000 Antelope Valley, California, Health Care District
Revenue Bonds, Series A, 5.25% due 9/01/2017 12,243
Bay Area Toll Authority, California, Toll Bridge
Revenue Refunding Bonds (San Francisco Bay Area),
Series F:
14,500 5% due 4/01/2026 15,061
33,000 5% due 4/01/2031 34,164
5,000 California Pollution Control Financing Authority,
Solid Waste Disposal Revenue Refunding Bonds
(Waste Management Inc. Project), AMT, Series A, 5%
due 1/01/2022 5,004
15 California Rural Home Mortgage Finance Authority,
S/F Mortgage Revenue Bonds (Mortgage-Backed
Securities Program), AMT, Series D, Class 5, 6.70%
due 5/01/2029 (i)(l) 15
70 California Rural Home Mortgage Finance Authority,
S/F Mortgage Revenue Refunding Bonds (Mortgage-
Backed Securities Program), AMT, Series A-2, 7%
due 9/01/2029 (i)(l) 71
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (continued)
BlackRock National Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
California (continued)
$ 5 California State, GO, 5.25% due 4/01/2029 $ 5
California State, GO, Refunding:
15 5.75% due 5/01/2010 (j) 16
115 5.75% due 5/01/2030 122
18,330 5% due 6/01/2032 18,770
3,600 5% due 6/01/2037 3,676
California State, Various Purpose, GO:
10,000 5.25% due 11/01/2027 10,471
14,100 5.50% due 11/01/2033 15,037
9,880 California Statewide Communities Development
Authority, Health Facility Revenue Bonds (Memorial
Health Services), Series A, 6% due 10/01/2023 10,587
Chula Vista, California, Community Facilities District
Number 06-1, Special Tax Bonds (Eastlake Woods
Area), Series A:
1,080 6.05% due 9/01/2020 1,143
2,965 6.15% due 9/01/2026 3,136
10,000 Chula Vista, California, IDR, Refunding (San
Diego Gas & Electric Co.), AMT, Series C, 5.25%
due 12/01/2027 10,372
Contra Costa County, California, Special Tax Bonds
(Community Facilities District Number 2001-01):
1,585 6% due 9/01/2026 1,668
1,200 6.10% due 9/01/2031 1,265
8,340 East Bay, California, Municipal Utility District, Water
System Revenue Refunding Bonds, Series A, 5%
due 6/01/2037 (e) 8,657
3,100 Elk Grove, California, Poppy Ridge Community
Facilities Number 3 Special Tax, Series 1, 6%
due 9/01/2008 (j) 3,199
10,000 Fremont, California, Unified School District, Alameda
County, GO (Election of 2002), Series B, 5%
due 8/01/2028 (h) 10,363
12,730 Los Angeles County, California, Metropolitan
Transportation Authority, Sales Tax Revenue Refunding
Bonds, Proposition A, First Tier Senior-Series A, 5%
due 7/01/2035 (c) 13,163
22,255 Metropolitan Water District of Southern California,
Waterworks Revenue Bonds, Series A, 5%
due 7/01/2037 23,107
1,100 Poway, California, Unified School District, Special Tax
Bonds (Community District No. 6), Series A, 6.05%
due 9/01/2025 1,139
2,695 Riverside, California, Improvement Bond Act of 1915,
Special Assessment (Riverwalk Assessment District),
6.375% due 9/02/2026 2,868
Roseville, California, Special Tax Bonds:
3,915 (Fiddyment Ranch Community Facilities
Number 1), 5.125% due 9/01/2026 3,916
1,125 (Stoneridge Community Facilities Number 1),
6% due 9/01/2011 (j) 1,225
1,250 (Stoneridge Community Facilities Number 1),
6.20% due 9/01/2011 (j) 1,370
2,500 (Stoneridge Community Facilities Number 1),
6.30% due 9/01/2011 (j) 2,750
Sacramento, California, Special Tax (North Natomas
Community Facilities):
2,200 Series 01-03, 6% due 9/01/2028 2,297
2,270 Series 4-C, 6% due 9/01/2028 2,395
Face
Amount Municipal Bonds Value
California (concluded)
$10,000 San Diego, California, Public Facilities Financing
Authority, Subordinated Water Revenue Refunding
Bonds, 5% due 8/01/2032 (f) $ 10,190
5,865 San Francisco, California, Bay Area Rapid Transit
District, Sales Tax Revenue Refunding Bonds,
Series A, 4.25% due 7/01/2036 (h) 5,351
San Francisco, California, City and County
Redevelopment Agency Revenue Bonds (Community
Facilities District Number 6--Mission):
5,000 6% due 8/01/2021 5,230
2,500 Series A, 6% due 8/01/2025 2,610
1,075 San Francisco, California, Uptown Parking
Corporation, Parking Revenue Bonds (Union Square),
6% due 7/01/2020 (f) 1,167
Santa Margarita, California, Water District, Special
Tax Refunding Bonds (Community Facilities District
No. 99), Series 1:
2,970 6.25% due 9/01/2009 (j) 3,176
3,680 6.20% due 9/01/2020 3,932
Colorado--2.2%
500 Boulder County, Colorado, Hospital Development
Revenue Bonds (Longmont United Hospital Project),
6% due 12/01/2010 (j)(m) 532
325 Colorado HFA, Revenue Bonds (S/F Program),
Series B-3, 6.55% due 10/01/2016 332
4,000 Colorado HFA, Revenue Refunding Bonds (Adventist
Health System/Sunbelt Obligor Group), Series D,
5.25% due 11/15/2035 4,095
Colorado HFA, Revenue Refunding Bonds
(S/F Program), AMT:
265 Senior Series A-2, 7.50% due 4/01/2031 266
95 Senior Series A-3, 7.35% due 10/01/2030 96
115 Senior Series B-2, 7.10% due 4/01/2017 118
825 Senior Series B-2, 7.25% due 10/01/2031 874
35 Senior Series B-3, 6.80% due 11/01/2028 36
310 Senior Series C-2, 7.25% due 10/01/2031 (b) 317
495 Senior Series C-3, 6.75% due 10/01/2021 (b) 529
125 Senior Series C-3, 7.15% due 10/01/2030 (b) 127
Colorado Health Facilities Authority Revenue
Refunding Bonds:
2,500 (Catholic Health Initiatives), 5.50%
due 9/01/2011 (j) 2,639
1,000 (Christian Living Communities Project), Series A,
5.75% due 1/01/2037 1,037
Colorado Water Resource and Power Development
Authority, Small Water Resources Revenue Bonds,
Series A (e):
350 5.80% due 11/01/2010 (j) 370
200 5.80% due 11/01/2020 211
Elk Valley, Colorado, Public Improvement Revenue
Bonds (Public Improvement Fee):
7,560 Series A, 7.35% due 9/01/2031 7,952
1,100 Series B, 7.45% due 9/01/2031 1,160
3,685 Larimer County, Colorado, Poudre School District
Number R-1, GO, 6% due 12/15/2010 (e)(j) 3,928
Plaza Metropolitan District Number 1, Colorado, Tax
Allocation Revenue Bonds (Public Improvement Fees):
7,700 8% due 12/01/2025 8,461
1,910 8.125% due 12/01/2025 1,919
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (continued)
BlackRock National Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Connecticut--1.1%
$ 1,000 Connecticut State Development Authority,
Governmental Lease Revenue Bonds, 6.60%
due 6/15/2014 (f) $ 1,002
1,250 Connecticut State Development Authority, Water
Facility Revenue Bonds (Bridgeport Hydraulic
Company), AMT, 6.15% due 4/01/2035 (c) 1,277
960 Connecticut State HFA, Revenue Refunding Bonds
(Housing Mortgage Finance Program), Series C-1,
6.30% due 11/15/2017 981
Connecticut State Health and Educational Facilities
Authority, Revenue Bonds:
1,000 (Bridgeport Hospital), Series A, 6.625%
due 7/01/2018 (f) 1,004
1,500 (Waterbury Hospital Issue), Series C, 5.75%
due 7/01/2020 (m) 1,555
1,000 (Westover School), Series A, 5.70%
due 7/01/2030 (m) 1,046
Connecticut State Health and Educational Facilities
Authority, Revenue Refunding Bonds (m):
3 DRIVERS, Series 215, 8.94% due 6/01/2030 (n) 3
2,000 (Eastern Connecticut Health Network), Series A,
6.50% due 7/01/2010 (j) 2,161
640 (Sacred Heart University), 6.625% due 7/01/2026 648
5,710 (University of Hartford), Series E, 5.50%
due 7/01/2022 6,056
545 Connecticut State Higher Education Supplemental
Loan Authority, Revenue Bonds (Family
Education Loan Program), AMT, Series A, 5.50%
due 11/15/2020 (f) 547
860 Waterbury, Connecticut, GO, 6% due 2/01/2009 (j)(m) 897
Delaware--0.1%
1,685 New Castle County, Delaware, PCR (General Motors
Corporation Project), VRDN, 7% due 10/01/2008 (g) 1,685
Florida--8.6%
1,975 Anthem Park Community Development District,
Florida, Capital Improvement Revenue Bonds, 5.80%
due 5/01/2036 2,006
2,000 Ave Maria Stewardship Community District, Florida,
Capital Improvement Revenue Bonds, Series A,
5.125% due 5/01/2038 1,869
1,500 Ave Maria Stewardship Community District, Florida,
Revenue Bonds, 4.80% due 11/01/2012 1,496
1,645 Ballantrae, Florida, Community Development District,
Capital Improvement Revenue Bonds, 6%
due 5/01/2035 1,722
4,900 Bartram Springs Community Development District,
Florida, Special Assessment Refunding Bonds, 4.75%
due 5/01/2034 4,490
1,755 Beacon Tradeport Community, Florida, Development
District, Special Assessment Revenue Refunding
Bonds (Commercial Project), Series A, 5.25%
due 5/01/2016 (m) 1,845
4,000 Broward County, Florida, Airport System Revenue
Refunding Bonds, AMT, Series E, 5.25%
due 10/01/2012 (f) 4,093
2,500 CFM Community Development District, Florida,
Capital Improvement Revenue Bonds, Series B,
5.875% due 5/01/2014 2,577
2,725 Duval County, Florida, School Board, COP, 5.75%
due 7/01/2017 (h) 2,818
Face
Amount Municipal Bonds Value
Florida (continued)
Fiddlers Creek, Florida, Community Development
District Number 2, Special Assessment Revenue Bonds:
$ 5,350 Series A, 6.375% due 5/01/2035 $ 5,635
1,020 Series B, 5.75% due 5/01/2013 1,044
7,000 Halifax Hospital Medical Center, Florida, Hospital
Revenue Refunding and Improvement Bonds,
Series A, 5.25% due 6/01/2026 7,135
1,135 Highland Meadows Community Development District,
Florida, Special Assessment Bonds, Series A, 5.50%
due 5/01/2036 1,133
21,000 Highlands County, Florida, Health Facilities Authority,
Hospital Revenue Refunding Bonds (Adventist Health
System), Series G, 5.125% due 11/15/2032 21,256
5,000 Hillsborough County, Florida, IDA, Exempt Facilities
Revenue Bonds (National Gypsum Company), AMT,
Series A, 7.125% due 4/01/2030 5,380
10,000 Hillsborough County, Florida, IDA, Hospital Revenue
Bonds (Tampa General Hospital Project), 5.25%
due 10/01/2041 10,190
2,000 Lee County, Florida, IDA, Health Care Facilities,
Revenue Refunding Bonds (Shell Point/Alliance
Obligor Group), 5% due 11/15/2029 1,960
1,140 Lexington Oaks, Florida, Community Development
District, Special Assessment Revenue Bonds, Series A,
6.70% due 5/01/2033 1,226
950 Mediterra, Florida, South Community Development
District, Capital Improvement Revenue Bonds, 6.85%
due 5/01/2031 1,017
2,500 Middle Village Community Development District,
Florida, Special Assessment Bonds, Series A, 6%
due 5/01/2035 2,585
6,625 Midtown Miami, Florida, Community Development
District, Special Assessment Revenue Bonds, Series A,
6.25% due 5/01/2037 7,048
1,000 New River Community Development District, Florida,
Capital Improvement Revenue Bonds, Series B, 5%
due 5/01/2013 986
1,625 Old Palm Community Development District, Florida,
Special Assessment Bonds (Palm Beach Gardens),
Series B, 5.375% due 5/01/2014 1,627
3,500 Orange County, Florida, HFA, M/F Housing Revenue
Bonds (Loma Vista Project), Series G, 5.50%
due 3/01/2032 3,544
Orange County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Orlando Regional
Healthcare):
1,000 5.70% due 7/01/2026 1,013
2,200 Series B, 5.125% due 11/15/2039 2,212
10,000 Orlando, Florida, Greater Orlando Aviation Authority,
Airport Facilities Revenue Bonds, AMT, Series A,
5.25% due 10/01/2018 (e) 10,267
Panther Trace Community Development District II,
Florida, Special Assessment Revenue Bonds:
5,000 5.125% due 11/01/2013 4,929
5,000 Series A, 5.60% due 5/01/2035 5,014
Park Place Community Development District, Florida,
Special Assessment Revenue Bonds:
2,300 6.75% due 5/01/2032 2,441
960 6.375% due 5/01/2034 1,018
2,000 Saint Lucie, Florida, West Services District, Utility
Revenue Refunding Bonds, Senior Lien, 6%
due 10/01/2022 (f) 2,153
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (continued)
BlackRock National Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Florida (concluded)
Sarosota County, Florida, Health Facilities Authority,
Retirement Facility Revenue Refunding Bonds
(Village on the Isle Project):
$ 780 5.50% due 1/01/2027 $ 795
1,645 5.50% due 1/01/2032 1,669
2,875 Somerset Community Development District,
Florida, Capital Improvement Revenue Bonds, 5%
due 5/01/2015 2,809
305 Sterling Hill, Florida, Community Development District,
Capital Improvement Revenue Refunding Bonds,
Series B, 5.50% due 11/01/2010 305
180 Stoneybrook West, Florida, Community Development
District, Special Assessment Revenue Bonds, Series B,
6.45% due 5/01/2010 181
1,190 Tern Bay Community Development District, Florida,
Capital Improvement Revenue Refunding Bonds,
Series B, 5% due 5/01/2015 1,165
2,185 Tuscany Reserve Community Development District,
Florida, Capital Improvement Revenue Bonds,
Series B, 5.25% due 5/01/2016 2,164
3,520 University of South Florida Financing Corporation,
COP (Master Lease Program), Refunding, Series A,
5.375% due 7/01/2022 (c) 3,749
1,650 Watergrass Community Development District, Florida,
Special Assessment Revenue Bonds, Series B, 4.875%
due 11/01/2010 1,631
Georgia--1.8%
5,000 Atlanta, Georgia, Tax Allocation Bonds (Atlantic
Station Project), 7.90% due 12/01/2024 5,481
Brunswick and Glynn County, Georgia, Development
Authority, First Mortgage Revenue Bonds (Coastal
Community Retirement Corporation Project),
Series A (p):
2,285 7.125% due 1/01/2025 1,820
4,555 7.25% due 1/01/2035 3,620
5,210 College Park, Georgia, Business and IDA
Revenue Bonds (Civic Center Project), 5.75%
due 9/01/2010 (c)(j) 5,576
1,940 Fulton County, Georgia, Development Authority, PCR
(General Motors Corporation), Refunding, VRDN,
7.50% due 4/01/2010 (g) 1,940
3,450 Fulton County, Georgia, Development Authority
Revenue Bonds (Morehouse College Project), 5.875%
due 12/01/2010 (c)(j) 3,678
2,250 Fulton County, Georgia, Residential Care Facilities,
Revenue Refunding Bonds (Canterbury Court Project),
Series A, 6% due 2/15/2022 2,275
Gainesville, Georgia, Redevelopment Authority,
Educational Facilities Revenue Refunding Bonds
(RiversideMilitary Academy):
1,350 5.125% due 3/01/2027 1,365
1,800 5.125% due 3/01/2037 1,811
1,500 Milledgeville-Baldwin County, Georgia, Development
Authority Revenue Bonds (Georgia College and State
University Foundation), 6% due 9/01/2014 (j) 1,683
Illinois--7.0%
1,000 Bolingbrook, Illinois, Special Services Area Number 1,
Special Tax Bonds (Forest City Project), 5.90%
due 9/01/2007 (p) 1,019
2 Chicago, Illinois, Board of Education, GO, DRIVERS,
Series 199, 7.412% due 12/01/2020 (c)(n) 2
Face
Amount Municipal Bonds Value
Illinois (concluded)
$26,800 Chicago, Illinois, O'Hare International Airport
Revenue Bonds, Third Lien, AMT, Series B-2, 6%
due 1/01/2029 (k) $ 29,457
6,915 Chicago, Illinois, O'Hare International Airport, Special
Facility Revenue Refunding Bonds (American Airlines
Inc. Project), 8.20% due 12/01/2024 6,937
350 Chicago, Illinois, Park District, GO, Refunding,
Series B, 5.75% due 1/01/2015 (e) 370
230 Chicago, Illinois, Park District, Limited Tax, GO,
Series A, 5.75% due 1/01/2016 (e) 243
325 Chicago, Illinois, S/F Mortgage Revenue Bonds, AMT,
Series A, 7.15% due 9/01/2031 (i)(l) 333
2,000 Chicago, Illinois, Special Assessment Bonds (Lake
Shore East), 6.75% due 12/01/2032 2,147
3,210 Cicero, Illinois, GO, Refunding (Corporate Purpose),
6% due 12/01/2028 (f) 3,407
7,000 Decatur, Illinois, GO, Refunding, 6%
due 3/01/2008 (e)(j) 7,104
10,000 Hodgkins, Illinois, Environmental Improvement
Revenue Bonds (Metro Biosolids Management LLC
Project), AMT, 6% due 11/01/2023 10,285
3,140 Illinois Development Finance Authority Revenue
Bonds (Community Rehabilitation Providers Facilities),
Series A, 6.50% due 7/01/2022 3,348
Illinois State Finance Authority Revenue Bonds,
Series A:
1,750 (Friendship Village of Schaumburg), 5.625%
due 2/15/2037 1,791
2,155 (Landing At Plymouth Place Project), 6%
due 5/15/2037 2,269
Illinois State, GO, 1st Series (f):
8,890 5.75% due 12/01/2015 9,389
3,745 5.75% due 12/01/2016 3,956
4,000 5.75% due 12/01/2017 4,227
3,000 Illinois State, Sales Tax Revenue Bonds, 6%
due 6/15/2020 3,159
2,000 Illinois State, Sales Tax Revenue Refunding Bonds,
Series Q, 6% due 6/15/2009 2,049
2,000 Lake County, Illinois, Forest Preservation District,
GO (Land Acquisition and Development), 5.75%
due 12/15/2010 (j) 2,116
16,160 Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Bonds (McCormick
Place Expansion), Series A, 5.25% due 6/15/2042 (f) 16,864
625 Naperville, Illinois, IDR (General Motors Corporation),
Refunding, VRDN, 7.50% due 12/01/2012 (g) 625
1,585 Village of Wheeling, Illinois, Revenue Bonds (North
Milwaukee/Lake-Cook Tax Increment Financing (TIF)
Redevelopment Project), 6% due 1/01/2025 1,599
Indiana--0.5%
7,350 Indiana Bond Bank, Special Program Revenue
Bonds (Town of Westfield and West Central
Conservancy District Projects), Series A, 5.125%
due 10/01/2022 (f) 7,632
Iowa--0.4%
1,000 Iowa City, Iowa, Sewer Revenue Bonds, 5.75%
due 7/01/2021 (f) 1,001
3,905 Iowa Finance Authority, Health Care Facilities,
Revenue Refunding Bonds (Care Initiatives Project),
9.25% due 7/01/2011 (j) 4,677
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (continued)
BlackRock National Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Kansas--0.7%
$ 6,870 Sedgwick and Shawnee Counties, Kansas, S/F
Mortgage Revenue Bonds (Mortgage-Backed
Securities Program), AMT, Series B-2, 5.25%
due 12/01/2038 (i)(l) $ 7,062
1,425 Sedgwick and Shawnee Counties, Kansas, S/F
Revenue Bonds, AMT, Series A-1, 6.95%
due 6/01/2029 (d) 1,481
2,500 Wichita, Kansas, Hospital Facilities Revenue
Refunding and Improvement Bonds, Series III, 6.25%
due 11/15/2019 2,694
Louisiana--1.1%
2,000 Houma-Terrebonne Public Trust Financing Authority,
Louisiana, S/F Mortgage Revenue Bonds
(Mortgage-Backed Securities Program), 5.15%
due 12/01/2040 (i)(l) 2,048
370 Louisiana HFA, S/F Mortgage Revenue Bonds, AMT,
Series D-2, 5.80% due 6/01/2020 (i) 372
7,000 Louisiana Local Government Environmental Facilities
and Community Development Authority, Revenue
Bonds (Capital Projects and Equipment Acquisition),
Series A, 6.30% due 7/01/2030 (c) 8,101
5,000 Louisiana Public Facilities Authority Revenue Bonds
(University of New Orleans Research and Technology
Foundation, Inc.--Student Housing Project), 5.25%
due 3/01/2037 (f) 5,267
200 Louisiana State, HFA, S/F Revenue Refunding Bonds
(Home Ownership Program), Series B-2, AMT, 6.20%
due 12/01/2029 (b)(i) 202
2,000 Rapides Finance Authority, Louisiana, Environmental
Improvement Revenue Bonds (International
Paper Company Project), AMT, Series A, 6.55%
due 11/15/2023 2,094
Maine--0.5%
8,635 Maine Finance Authority, Solid Waste Recycling
Facilities Revenue Bonds (Great Northern Paper
Project--Bowater), AMT, 7.75% due 10/01/2022 8,696
Maryland--0.4%
500 Anne Arundel County, Maryland, Special Obligation
Revenue Bonds (Arundel Mills Project), 7.10%
due 7/01/2009 (j) 539
1,000 Maryland State Community Development
Administration, Department of Housing and
Community Development, Housing Revenue Bonds,
AMT, Series B, 6.15% due 1/01/2021 1,024
1,000 Maryland State Community Development
Administration, Department of Housing and
Community Development Revenue Bonds (Waters
Landing II Apartments), AMT, Series A, 5.875%
due 8/01/2033 1,030
1,000 Maryland State Energy Financing Administration,
Solid Waste Disposal Revenue Bonds, Limited
Obligation (Wheelabrator Water Projects), AMT,
6.45% due 12/01/2016 1,021
3,200 Maryland State Health and Higher Educational
Facilities Authority Revenue Bonds (King Farm
Presbyterian Community), Series B, 5% due 1/01/2017 3,203
Massachusetts--1.6%
255 Massachusetts Educational Financing Authority,
Education Loan Revenue Refunding Bonds, AMT,
Issue E, 5.85% due 7/01/2014 (c) 257
Face
Amount Municipal Bonds Value
Massachusetts (concluded)
$ 3,850 Massachusetts State Health and Educational Facilities
Authority Revenue Bonds (Medical Center of
Central Massachusetts), CARS, Series B, 9.02%
due 6/23/2022 (c)(n) $ 4,018
1,000 Massachusetts State Industrial Finance Agency,
Higher Education Revenue Refunding
Bonds (Hampshire College Project), 5.625%
due 10/01/2007 (j) 1,024
130 Massachusetts State Water Pollution Abatement
Trust, Water Abatement Revenue Bonds, Series A,
6.375% due 2/01/2015 130
1,600 Montachusett, Massachusetts, Regional
Vocational Technical School District, GO, 5.95%
due 1/15/2020 (f) 1,690
19,000 Route 3 North Transit Improvement Association,
Massachusetts, Lease Revenue Refunding Bonds,
VRDN, Series B, 3.73% due 6/15/2033 (c)(g) 19,000
Michigan--1.1%
7,500 Delta County, Michigan, Economic Development
Corporation, Environmental Improvement Revenue
Refunding Bonds (Mead Westvaco-Escanaba),
Series A, 6.25% due 4/15/2012 (j) 8,215
500 Dickinson County, Michigan, Economic Development
Corporation, Environmental Improvement Revenue
Refunding Bonds (International Paper Company
Project), Series A, 5.75% due 6/01/2016 521
Eastern Michigan University, General Revenue
Refunding Bonds (c):
585 6% due 6/01/2010 (j) 623
415 6% due 6/01/2024 441
3,000 Flint, Michigan, Hospital Building Authority, Revenue
Refunding Bonds (Hurley Medical Center), 6%
due 7/01/2020 3,127
3,325 Macomb County, Michigan, Hospital Finance
Authority, Hospital Revenue Bonds (Mount Clemens
General Hospital), Series B, 5.875% due 11/15/2034 3,497
1,500 Michigan State Hospital Finance Authority, Revenue
Refunding Bonds (Mercy-Mount Clemens), Series A,
6% due 5/15/2014 (f) 1,565
Minnesota--1.4%
520 Anoka County, Minnesota, Solid Waste Disposal
Revenue Bonds (Natural Rural Utilities), AMT,
Series A, 6.95% due 12/01/2008 534
1,000 Eden Prairie, Minnesota, M/F Housing Revenue
Bonds (Rolling Hills Project), Series A, 6.15%
due 8/20/2031 (d) 1,081
8,875 Minneapolis and Saint Paul, Minnesota, Housing
Finance Board, S/F Mortgage Revenue Bonds
(Mortgaged-Backed Securities Program--City
Living), AMT, Series A-1, 5.25% due 12/01/2040 (i)(l) 8,962
Minneapolis and Saint Paul, Minnesota, Metropolitan
Airports Commission, Airport Revenue Bonds, AMT,
Sub-Series D (e):
470 5.75% due 1/01/2012 492
470 5.75% due 1/01/2014 491
2,060 5.75% due 1/01/2015 2,158
Minneapolis, Minnesota, Health Care System
Revenue Bonds (Allina Health System), Series A:
1,500 5.70% due 11/15/2022 1,567
2,665 5.75% due 11/15/2032 2,811
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (continued)
BlackRock National Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Minnesota (concluded)
$ 1,110 Ramsey County, Minnesota, Housing and
Redevelopment Authority, M/F Housing Revenue
Bonds (Hanover Townhouses Project), AMT, 6%
due 7/01/2031 $ 1,130
1,000 Saint Cloud, Minnesota, Health Care Revenue
Refunding Bonds (Saint Cloud Hospital Obligation
Group), Series A, 6.25% due 5/01/2020 (h) 1,066
1,500 Waconia, Minnesota, Health Care Facilities Revenue
Bonds (Ridgeview Medical Center Project), Series A,
6.125% due 1/01/2010 (j)(m) 1,577
Mississippi--0.4%
4,000 Mississippi Home Corporation, S/F Mortgage Revenue
Bonds, Series A-1, 5.50% due 6/01/2038 (i)(l) 4,227
1,700 Warren County, Mississippi, Environmental
Improvement Revenue Refunding Bonds
(International Paper Company Project), AMT, Series B,
6.75% due 8/01/2021 1,799
Missouri--0.6%
1,000 Fenton, Missouri, Tax Increment Revenue
Refunding and Improvement Bonds (Gravois Bluffs
Redevelopment Project), 5% due 4/01/2014 1,032
1,500 Kansas City, Missouri, IDA, First Mortgage Health
Facilities Revenue Bonds (Bishop Spencer Place),
Series A, 6.50% due 1/01/2035 1,577
6,500 Missouri State Housing Development Commission,
S/F Mortgage Revenue Bonds (Homeownership Loan
Program), AMT, Series E-1, 5.60% due 3/01/2037 (i) 6,855
Montana--0.6%
3,000 Montana State Board of Housing, S/F Mortgage
Revenue Refunding Bonds, AMT, Series A-2, 5.50%
due 6/01/2037 3,139
6,000 Montana State Higher Education, Student Assistance
Corporation, Student Loan Revenue Refunding
Bonds, AMT, Sub-Series B, 6.40% due 12/01/2032 6,234
Nevada--1.7%
3,500 Clark County, Nevada, Airport Revenue Bonds
(Jet Aviation Fuel Tax), AMT, Series C, 5.375%
due 7/01/2020 (c) 3,656
1,545 Clark County, Nevada, Improvement District
Number 142, Special Assessment Bonds, 6.375%
due 8/01/2023 1,593
Elko, Nevada, GO (Airport Improvement), AMT,
Series B (f):
165 6.10% due 10/01/2014 167
245 6.30% due 10/01/2019 249
320 6.75% due 10/01/2024 325
225 7% due 10/01/2029 229
2,535 Henderson, Nevada, Local Improvement Districts,
Special Assessment, Series NO T-14, 5.80%
due 3/01/2023 2,613
Las Vegas, Nevada, Local Improvement Bonds,
Special Assessment, Special Improvement District
Number 808, Summerlin:
1,730 5.875% due 6/01/2009 1,769
1,990 6.125% due 6/01/2012 2,060
2,220 6.25% due 6/01/2013 2,299
1,880 Reno, Nevada, Special Assessment District Number 4
(Somerset Parkway), 6.625% due 12/01/2022 1,939
Face
Amount Municipal Bonds Value
Nevada (concluded)
Sparks, Nevada, Redevelopment Agency, Tax
Allocation Revenue Refunding Bonds, Series A (m):
$ 3,110 6% due 1/15/2015 $ 3,258
6,315 6% due 1/15/2023 6,607
New Hampshire--0.2%
New Hampshire Health and Education Facilities
Authority, Revenue Refunding Bonds:
1,750 (Elliot Hospital), Series B, 5.60% due 10/01/2022 1,824
590 (Havenwood-Heritage Heights Retirement
Community), Series A, 5% due 1/01/2016 587
1,035 (Havenwood-Heritage Heights Retirement
Community), Series A, 5.35% due 1/01/2026 1,036
New Jersey--2.0%
310 Camden County, New Jersey, Pollution Control
Financing Authority, Solid Waste Resource Recovery,
Revenue Refunding Bonds, AMT, Series B, 7.50%
due 12/01/2009 314
3,300 New Jersey EDA, Retirement Community Revenue
Bonds (Cedar Crest Village Inc. Facility), Series A,
7.25% due 11/15/2011 (j) 3,732
3,680 New Jersey EDA, State Lease Revenue Bonds (State
Office Buildings Projects), 6% due 6/15/2010 (c)(j) 3,892
3,130 New Jersey Health Care Facilities Financing Authority
Revenue Bonds (South Jersey Hospital), 6%
due 7/01/2012 (j) 3,389
2,250 New Jersey Health Care Facilities Financing Authority,
Revenue Refunding Bonds (Capital Health System
Inc.), Series A, 5.75% due 7/01/2023 2,364
640 New Jersey State Housing and Mortgage Finance
Agency, M/F Housing Revenue Refunding Bonds,
Series B, 6.25% due 11/01/2026 (h) 663
New Jersey State Turnpike Authority, Turnpike
Revenue Refunding Bonds, Series A (f):
7,025 5.75% due 1/01/2010 (j) 7,332
2,975 5.75% due 1/01/2018 (s) 3,099
7,000 Tobacco Settlement Financing Corporation of
New Jersey, Asset-Backed Revenue Bonds, 7%
due 6/01/2013 (j) 8,089
New Mexico--0.7%
8,000 Farmington, New Mexico, PCR, Refunding (Public
Service Company of New Mexico--San Juan
Project), Series B, 6.30% due 12/01/2016 8,172
50 New Mexico Mortgage Finance Authority, Revenue
Refunding Bonds, Mortgage-Backed Securities,
Series F, 7% due 1/01/2026 (i) 50
3,165 New Mexico Mortgage Financing Authority,
S/F Mortgage Program Revenue Bonds, AMT,
Series D, 6.15% due 7/01/2035 (i)(l) 3,322
250 Santa Fe County, New Mexico, Correctional System
Revenue Bonds, 6% due 2/01/2027 (h) 291
New York--4.2%
10,000 Metropolitan Transportation Authority, New York,
Transit Facilities Revenue Bonds, Series A, 5.625%
due 7/01/2007 (f)(j) 10,151
3,230 New York City, New York, City IDA, Civic Facility
Revenue Bonds (Special Needs Facilities Pooled
Program), Series C-1, 6% due 7/01/2012 3,333
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (continued)
BlackRock National Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
New York (concluded)
$ 4,050 New York City, New York, City IDA, Special Facility
Revenue Bonds (British Airways Plc Project), AMT,
7.625% due 12/01/2032 $ 4,452
New York City, New York, GO, Refunding:
6,540 Series A, 6% due 5/15/2010 (j) 6,976
2,205 Series A, 6.25% due 5/15/2010 (j)(k) 2,367
60 Series A, 6% due 5/15/2021 (k) 64
675 Series H, 6% due 8/01/2007 (j)(k) 683
325 Series H, 6% due 8/01/2017 (k) 329
New York City, New York, GO, Series B (f):
6,640 5.875% due 8/01/2010 (j) 7,085
1,300 5.875% due 8/01/2015 1,384
New York State Dormitory Authority, Non-State
Supported Debt, Revenue Refunding Bonds (Mount
Sinai-NYU Medical Center Health System), Series A:
590 6.50% due 7/01/2010 (j) 638
2,410 6.50% due 7/01/2016 2,555
1,680 New York State Dormitory Authority, Revenue
Refunding Bonds, Series A:
(Mount Sinai Health), 6.50% due 7/01/2025 1,777
3,000 (State University Educational Facilities), 7.50%
due 5/15/2013 3,512
1,360 New York State Environmental Facilities Corporation,
State Clean Water and Drinking Revenue Bonds
(Revolving Funds), Series B, 5.875% due 1/15/2019 1,427
2,285 Oneida County, New York, IDA Revenue Bonds
(Civic Facility-Faxton Hospital), Series C, 6.625%
due 1/01/2015 (m) 2,436
3,000 Port Authority of New York and New Jersey,
Consolidated Revenue Bonds, AMT, Thirty-Seventh
Series, 5.50% due 7/15/2018 (h) 3,218
95 Suffolk County, New York, IDA, Civic Facility Revenue
Bonds (Special Needs Facilities Pooled Program),
Series D-1, 6% due 7/01/2012 98
5,000 Triborough Bridge and Tunnel Authority, New
York, Subordinate Revenue Bonds, 5.125%
due 11/15/2026 (c) 5,211
705 Westchester County, New York, IDA, Civic Facilities
Revenue Bonds (Special Needs Facilities Pooled
Program), Series E-1, 6% due 7/01/2012 726
8,095 Westchester County, New York, IDA, Continuing Care
Retirement, Mortgage Revenue Bonds (Kendal on
Hudson Project), Series A, 6.50% due 1/01/2034 8,606
North Carolina--2.8%
920 Brunswick County, North Carolina, COP, 6%
due 6/01/2010 (h)(j) 981
4,000 North Carolina Eastern Municipal Power Agency,
Power System Revenue Bonds, Series D, 6.75%
due 1/01/2026 4,250
4,440 North Carolina Eastern Municipal Power Agency,
Power System Revenue Refunding Bonds, Series D,
6.70% due 1/01/2019 (o) 4,723
4,390 North Carolina HFA, Home Ownership Revenue
Bonds, AMT, Series 9-A, 5.80% due 1/01/2020 4,508
North Carolina Medical Care Commission, Health
Care Facilities, First Mortgage Revenue Bonds
(Presbyterian Homes Project):
2,500 6.875% due 10/01/2010 (j) 2,718
3,000 5.50% due 10/01/2031 3,094
Face
Amount Municipal Bonds Value
North Carolina (concluded)
North Carolina Medical Care Commission,
Health Care Facilities, First Mortgage Revenue
Refunding Bonds:
$ 2,500 (Presbyterian Homes Project), Series B, 5.20%
due 10/01/2021 $ 2,525
1,100 (Salemtowne Project), 5.10% due 10/01/2030 1,076
North Carolina Medical Care Commission, Retirement
Facilities, First Mortgage Revenue Bonds (j):
1,625 (Forest at Duke Project), 6.375% due 9/01/2012 1,715
2,500 (Givens Estates Project), Series A, 6.50%
due 7/01/2013 2,830
5,000 North Carolina Medical Care Commission, Retirement
Facilities, First Mortgage Revenue Refunding Bonds
(Forest at Duke Project), 5.125% due 9/01/2032 5,025
North Carolina Municipal Power Agency Number 1,
Catawba Electric Revenue Refunding Bonds, Series B:
500 6.375% due 1/01/2013 528
1,080 6.375% due 1/01/2013 (o) 1,141
5,000 6.50% due 1/01/2020 5,315
2,500 6.50% due 1/01/2020 (o) 2,657
Piedmont Triad Airport Authority, North Carolina,
Airport Revenue Refunding Bonds, Series A (h)(j):
1,000 6% due 7/01/2009 1,051
1,000 6.375% due 7/01/2009 1,058
Ohio--1.3%
285 Ohio HFA, Mortgage Revenue Bonds, AMT, Series A-1,
6.15% due 3/01/2029 (d) 292
6,900 Ohio HFA, Mortgage Revenue Refunding Bonds, AMT,
Series C, 5.90% due 9/01/2035 (i) 7,154
8,000 Ohio State Air Quality Development Authority
Revenue Refunding Bonds (Ohio Power Company),
Series C, 5.15% due 5/01/2026 (c) 8,201
1,470 Port of Greater Cincinnati Development Authority,
Ohio, Special Assessment Revenue Bonds
(Cooperative Public Parking Infrastructure Project),
6.40% due 2/15/2034 1,567
3,005 Toledo-Lucas County, Ohio, Lodging Tax Revenue
Refunding Bonds (Convention Center Project), 5.70%
due 10/01/2015 (f) 3,069
Oklahoma--0.6%
10,000 Tulsa County, Oklahoma, Industrial Authority, Health
Care Revenue Refunding Bonds (Saint Francis Health
System), 5% due 12/15/2036 10,105
Oregon--0.3%
Forest Grove, Oregon, Campus Improvement Revenue
Refunding Bonds (Pacific University) (j)(m):
250 6% due 5/01/2010 264
250 6.20% due 5/01/2010 265
Oregon State Housing and Community Services
Department, Mortgage Revenue Refunding Bonds
(S/F Mortgage Program) Series A:
55 6.40% due 7/01/2018 56
35 AMT, 6.20% due 7/01/2027 36
500 Portland, Oregon, M/F Housing Authority Revenue
Bonds (Lovejoy Station Apartments Project), AMT,
5.90% due 7/01/2023 (f) 511
Portland, Oregon, Urban Renewal and Redevelopment
Revenue Refunding Bonds, Series A (c):
1,000 (Downtown Waterfront), 5.75% due 6/15/2018 1,058
3,190 (South Park Blocks), 5.75% due 6/15/2018 3,374
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (continued)
BlackRock National Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Pennsylvania--1.7%
$ 3,640 Allegheny County, Pennsylvania, IDA, Environmental
Improvement Revenue Refunding Bonds, 5.50%
due 11/01/2016 $ 3,832
2,220 Allegheny County, Pennsylvania, Sanitation Authority,
Sewer Revenue Bonds, 5.75% due 12/01/2010 (f)(j) 2,362
1,760 Bucks County, Pennsylvania, IDA, Retirement
Community Revenue Bonds (Ann's Choice Inc.),
Series A, 6.125% due 1/01/2025 1,854
7,750 Delaware County, Pennsylvania, IDA, Revenue
Refunding Bonds (Resource Recovery Facility),
Series A, 6.10% due 7/01/2013 7,960
1,000 Harrisburg, Pennsylvania, Authority, University
Revenue Bonds (Harrisburg University of Science),
Series A, 5.40% due 9/01/2016 1,003
4,000 Pennsylvania State Higher Educational Facilities
Authority Revenue Bonds (University of Pennsylvania
Medical Center Health System), Series A, 6%
due 1/15/2031 4,268
1,265 Philadelphia, Pennsylvania, Authority for IDR,
Commercial Development, 7.75% due 12/01/2017 1,268
Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Refunding Bonds (Guthrie Healthcare
System), Series A:
3,915 5.875% due 12/01/2011 (j) 4,236
1,085 5.875% due 12/01/2031 1,150
Rhode Island--0.5%
6,815 Rhode Island State Economic Development
Corporation, Airport Revenue Bonds, Series B, 6%
due 7/01/2010 (e)(j) 7,270
1,000 Rhode Island State Economic Development
Corporation Revenue Bonds (Providence Place Mall),
6.125% due 7/01/2020 (m) 1,082
South Carolina--0.9%
Medical University Hospital Authority, South Carolina,
Hospital Facilities Revenue Refunding Bonds (j):
2,450 6.50% due 8/15/2012 2,731
5,400 Series A, 6.375% due 8/15/2012 5,989
5,000 South Carolina Jobs EDA, Residential Care Facilities
Revenue Bonds (South Carolina Episcopal--
Still Hopes Residence Project), Series A, 6.375%
due 5/15/2032 5,210
South Dakota--0.4%
3,750 Pierre, South Dakota, School District Number 32-2,
GO, 5.75% due 8/01/2010 (h)(j) 3,945
1,680 South Dakota, HDA, Homeownership Revenue Bonds,
AMT, Series C, 5.375% due 5/01/2018 1,704
Tennessee--1.4%
Chattanooga, Tennessee, IDB, Lease Rent Revenue
Bonds (Southside Redevelopment Corporation) (c):
4,485 5.75% due 10/01/2017 4,728
3,740 5.75% due 10/01/2018 3,928
1,000 Johnson City, Tennessee, Health and Educational
Facilities Board, Retirement Facility Revenue Bonds
(Appalachian Christian Village Project), Series A,
6.25% due 2/15/2032 1,039
4,950 McMinn County, Tennessee, IDB, Solid Waste Revenue
Bonds (Recycling Facility-Calhoun Newsprint), AMT,
7.40% due 12/01/2022 5,014
7,300 Shelby County, Tennessee, Health, Educational and
Housing Facility Board, Hospital Revenue Refunding
Bonds (Methodist Healthcare), 6.50% due 9/01/2012 (j) 8,145
Face
Amount Municipal Bonds Value
Texas--12.8%
$ 5,000 Alliance Airport Authority, Inc., Texas, Special Facilities
Revenue Refunding Bonds (American Airlines Inc.
Project), AMT, 5.75% due 12/01/2029 $ 4,984
Austin, Texas, Convention Center Revenue Bonds
(Convention Enterprises Inc.), First Tier, Series A (j):
5,300 6.60% due 1/01/2011 5,745
2,300 6.70% due 1/01/2011 2,500
10,630 Austin, Texas, Revenue Bonds (Town Lake Community
Events Center Venue), 6.20% due 11/15/2009 (e)(j) 11,189
Bexar County, Texas, Health Facilities Development
Corporation, Revenue Refunding Bonds (Army
Retirement Residence Project) (j):
600 6.125% due 7/01/2012 660
1,750 6.30% due 7/01/2012 1,939
2,280 Brazos River Authority, Texas, PCR, Refunding (TXU
Energy Company LLC Project), AMT, Series A, 7.70%
due 4/01/2033 2,592
4,250 Brazos River Authority, Texas, Revenue Refunding
Bonds (Reliant Energy Inc. Project), Series B, 7.75%
due 12/01/2018 4,431
3,700 Brazos River, Texas, Harbor Navigation District,
Brazoria County Environmental Revenue Refunding
Bonds (Dow Chemical Company Project), AMT,
Series A-7, 6.625% due 5/15/2033 4,021
525 Central Texas Housing Finance Corporation, S/F
Mortgage Revenue Bonds (GNMA Mortgage
Program), AMT, 8.20% due 6/28/2017 (b)(d) 542
3,620 Dallas-Fort Worth, Texas, International Airport Facility
Improvement Corporation, Revenue Bonds (Learjet
Inc.), AMT, Series A-1, 6.15% due 1/01/2016 3,639
600 Dallas, Texas, Industrial Development Corporation,
IDR (CR/PL Inc. Project), AMT, 7.50% due 8/01/2017 603
4,825 Dawson County, Texas, Hospital District, GO, 5.125%
due 2/15/2031 (c) 4,977
1,260 Fort Bend County, Texas, Municipal Utility District
Number 23, GO, 6.625% due 9/01/2007 (j)(m) 1,266
Gregg County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Good Shepherd
Medical Center Project) (j)(m):
3,500 6.375% due 10/01/2010 3,783
1,000 6.875% due 10/01/2010 1,096
5,465 Gulf Coast Waste Disposal Authority, Texas, Revenue
Refunding Bonds (International Paper Company),
AMT, Series A, 6.10% due 8/01/2024 5,759
HFDC of Central Texas, Inc., Retirement Facilities
Revenue Bonds, Series A:
2,255 5.75% due 11/01/2036 2,317
1,850 (Village at Gleannloch Farms), 5.50%
due 2/15/2037 1,880
15,000 Houston, Texas, Airport System Revenue
Refunding Bonds, Sub-Lien, AMT, Series A, 5.50%
due 7/01/2023 (h) 15,460
6,000 Houston, Texas, Airport System, Special Facilities
Revenue Bonds (Continental Airlines), AMT, Series E,
7% due 7/01/2029 6,451
Houston, Texas, Combined Utility System, First Lien
Revenue Refunding Bonds, Series A:
2,000 5.125% due 5/15/2028 (f) 2,071
13,600 5% due 11/15/2036 (h) 14,010
4,000 Kerrville, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Sid Peterson
Memorial Hospital Project), 5.25% due 8/15/2021 4,086
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (continued)
BlackRock National Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Texas (concluded)
$ 8,080 Matagorda County, Texas, Navigation District
Number 1, Revenue Refunding Bonds (Reliant Energy
Inc.), Series C, 8% due 5/01/2029 $ 8,427
7,350 Matagorda County, Texas, Port of Bay City Authority
Revenue Bonds (Hoechst Celanese Corp. Project),
AMT, 6.50% due 5/01/2026 7,433
4,825 Port Corpus Christi, Texas, Individual Development
Corporation, Environmental Facilities Revenue Bonds
(Citgo Petroleum Corporation Project), AMT, 8.25%
due 11/01/2031 4,933
1,000 Red River, Texas, Education Finance Revenue
Bonds (Saint Mark's School--Texas Project), 6%
due 8/15/2019 1,044
830 South Plains, Texas, Housing Finance Corporation,
S/F Mortgage Revenue Bonds, AMT, Series A, 7.30%
due 9/01/2031 (i) 841
Southeast Texas Housing Finance Corporation,
Revenue Bonds, AMT (d)(l):
10 Series A, 8% due 11/01/2025 10
120 Series B, 8.50% due 11/01/2025 122
Tarrant County, Texas, Cultural Education Facilities
Financing Corporation, Retirement Facilities Revenue
Refunding Bonds (Northwest Senior Housing--
Edgemere Project), Series A:
2,200 6% due 11/15/2026 2,338
3,000 6% due 11/15/2036 3,173
Texas State Affordable Housing Corporation, S/F
Mortgage Revenue Bonds, AMT (i)(l):
5,000 (Fire Fighter and Law Enforcement or Security
Officer Home Loan Program), Series C, 5.45%
due 12/01/2039 5,196
6,250 (Professional Educators Home Loan Program),
Series A-1, 5.50% due 12/01/2039 6,520
Texas State Public Finance Authority, Building
Revenue Bonds (h)(j):
2,100 (General Services Commission Project), Series A,
6% due 2/01/2010 2,206
1,000 (State Preservation Project), Series B, 6%
due 8/01/2009 1,043
45,000 Texas State Turnpike Authority, Central Texas Turnpike
System Revenue Bonds, First Tier, Series A, 5.75%
due 8/15/2038 (c) 48,057
4,930 Upper Trinity Regional Water District, Texas, Water
Revenue Bonds (Regional Treated Water Supply
System), Series A, 6% due 8/01/2010 (e)(j) 5,221
Webster, Texas, GO, COP, Series A (h):
1,500 6% due 3/01/2010 (j) 1,577
805 6% due 3/01/2021 845
1,250 West Central Texas Regional Housing Finance
Corporation, S/F Mortgage Revenue Bonds (Mortgage-
Backed Securities Program), AMT, Series A, 5.35%
due 12/01/2039 (i)(l) 1,282
Utah--0.0%
755 Utah State HFA, S/F Mortgage Revenue Refunding
Bonds, AMT, Series C, Class III, 5.50% due 1/01/2018 764
Virginia--0.6%
Albermarle County, Virginia, IDA, Residential Care
Facilities, Mortgage Revenue Refunding Bonds
(Westminster-Canterbury):
1,750 5% due 1/01/2024 1,754
1,100 5% due 1/01/2031 1,095
Face
Amount Municipal Bonds Value
Virginia (concluded)
$ 2,425 Chesterfield County, Virginia, IDA, PCR, Refunding
(Virginia Electric and Power Company), Series B,
5.875% due 6/01/2017 $ 2,581
3,250 Fairfax County, Virginia, EDA, Residential Care
Facilities, Mortgage Revenue Refunding Bonds
(Goodwin House, Inc.), 5.125% due 10/01/2037 3,261
Norfolk, Virginia, Redevelopment and Housing
Authority, First Mortgage Revenue Bonds (Retirement
Community), Series A:
500 6% due 1/01/2025 521
1,100 6.125% due 1/01/2035 1,149
Washington--1.7%
5,000 Energy Northwest, Washington, Electric Revenue
Refunding Bonds (Project Number 3), Series A, 5.50%
due 7/01/2017 (h) 5,308
3,000 Port of Seattle, Washington, Special Facilities Revenue
Bonds, Series A, 6% due 3/01/2010 (f)(j) 3,183
3,010 Seattle, Washington, Drain and Wastewater Utility
Revenue Bonds, 5.75% due 11/01/2009 (f)(j) 3,163
Seattle, Washington, Housing Authority Revenue Bonds:
2,750 (Newholly Project), AMT, 6.25% due 12/01/2035 2,839
4,710 (Replacement Housing Project), 6.125%
due 12/01/2032 4,820
7,750 Tacoma, Washington, Electric System Revenue
Refunding Bonds, Series A, 5.75% due 1/01/2011 (h)(j) 8,266
Wisconsin--0.6%
990 Wisconsin Housing and Economic Development
Authority, Home Ownership Revenue Bonds, AMT,
Series C, 6% due 9/01/2036 1,043
1,960 Wisconsin State, GO, AMT, Series B, 6.20%
due 11/01/2026 (f) 1,979
Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (SynergyHealth Inc.):
3,155 6% due 11/15/2023 3,360
3,700 6% due 11/15/2032 3,954
Guam--0.0%
115 Guam Housing Corporation, S/F Mortgage Revenue
Bonds, AMT, Series A, 5.75% due 9/01/2031 (l) 120
Puerto Rico--2.3%
8,045 Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue
Bonds, 5.75% due 7/01/2022 8,660
Puerto Rico Commonwealth Infrastructure Financing
Authority, Special Tax and Capital Appreciation
Revenue Bonds, Series A (p):
10,000 4.83% due 7/01/2030 (e) 3,358
10,000 4.64% due 7/01/2032 (e) 3,030
12,605 4.96% due 7/01/2035 (c) 3,278
Puerto Rico Commonwealth, Public Improvement,
GO, Refunding:
785 5.70% due 7/01/2020 (f) 823
5,500 Series B, 5.25% due 7/01/2032 5,732
11,665 Puerto Rico Electric Power Authority, Power Revenue
Bonds, Series NN, 5.125% due 7/01/2013 (j) 12,398
U.S. Virgin Islands--0.6%
8,000 Virgin Islands Government Refinery Facilities,
Revenue Refunding Bonds (Hovensa Coker Project),
AMT, 6.50% due 7/01/2021 8,915
Total Municipal Bonds
(Cost--$1,371,784)--87.7% 1,411,830
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (concluded)
BlackRock National Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Held in Trust (a) Value
California--1.9%
$28,500 Los Angeles, California, Unified School District, GO,
Series A, 5% due 1/01/2028 (f) $ 30,133
Connecticut--0.7%
10,045 Connecticut State Health and Educational Facilities
Authority Revenue Refunding Bonds (Eastern
Connecticut Health Network), Series A, 6.50%
due 7/01/2030 (m) 10,854
Florida--2.2%
14,000 Lee County, Florida, Airport Revenue Bonds, AMT,
Series A, 6% due 10/01/2029 (h) 14,845
20,115 Port St. Lucie, Florida, Utility Revenue Bonds, 5.125%
due 9/01/2036 (f) 20,989
Illinois--1.4%
21,235 Chicago, Illinois, Board of Education, GO (Chicago
School Reform), 5.75% due 12/01/2007 (c) 21,827
Michigan--0.9%
13,500 Hartland, Michigan, Consolidated School District,
GO, Refunding, 5.125% due 5/01/2029 13,800
New Jersey--2.7%
22,000 New Jersey EDA, School Facilities Construction
Revenue Bonds, Series O, 5.25% due 3/01/2024 23,279
20,000 New Jersey State Turnpike Authority, Turnpike
Revenue Refunding Bonds, Series A, 5.75%
due 1/01/2018 (f) 20,832
Pennsylvania--2.4%
36,210 Philadelphia, Pennsylvania, Redevelopment Authority
Revenue Bonds (Neighborhood Transformation),
Series A, 5.3% due 4/15/2026 (e) 37,758
South Carolina--1.3%
21,215 South Carolina State Ports Authority, Ports Revenue
Bonds, AMT, 5.30% due 7/01/2026 (h) 21,587
Face
Amount Municipal Bonds Held in Trust (a) Value
Texas--4.8%
$36,500 Dallas-Fort Worth, Texas, International Airport Revenue
Bonds, AMT, Series A, 6% due 11/01/2024 (e) $ 37,881
18,860 Houston, Texas, Airport System Revenue Refunding
Bonds, Sub Lien, Series B, 5.20% due 7/01/2018 (e) 19,129
20,000 Houston, Texas, Combined Utility System, First Lien
Revenue Refunding Bonds, Series A, 5.125%
due 5/15/2028 (f) 20,712
Puerto Rico--0.8%
4,000 Puerto Rico Commonwealth, Public Improvement,
GO, Refunding, 5.7% due 7/01/2020 (f) 4,191
Puerto Rico Industrial Tourist Educational, Medical
and Environmental Control Facilities Revenue Bonds
(Hospital de la Concepcion), Series A:
4,000 6.125% due 11/15/2025 4,265
4,220 6.125% due 11/15/2030 4,515
Total Municipal Bonds Held in Trust
(Cost--$305,809)--19.1% 306,597
Shares
Held Short-Term Securities
28,606 Merrill Lynch Institutional Tax-Exempt Fund,
3.59% (q)(r) 28,606
Total Short-Term Securities
(Cost--$28,606)--1.8% 28,606
Total Investments (Cost--$1,706,199*)--108.6% 1,747,033
Other Assets Less Liabilities--0.9% 15,368
Liability for Trust Certificates, Including Interest
Expense Payable--(9.5%) (153,434)
------------
Net Assets--100.0% $ 1,608,967
============
* The cost and unrealized appreciation (depreciation) of investments
as of June 30, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 1,557,397
===============
Gross unrealized appreciation $ 47,287
Gross unrealized depreciation (9,447)
---------------
Net unrealized appreciation $ 37,840
===============
(a) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund may have acquired the residual interest certificates.
These securities serve as collateral in a financing transaction.
See Note 1(c) to Financial Statements for details of municipal bonds
held in trust.
(b) FHA Insured.
(c) AMBAC Insured.
(d) GNMA Collateralized.
(e) FGIC Insured.
(f) MBIA Insured.
(g) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(h) FSA Insured.
(i) FNMA/GNMA Collateralized.
(j) Prerefunded.
(k) XL Capital Insured.
(l) FHLMC Collateralized.
(m) Radian Insured.
(n) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(o) ACA Insured.
(p) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(q) Represents the current yield as of June 30, 2007.
(r) 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 (24,918) $1,477
(s) Escrowed to maturity.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments as of June 30, 2007
BlackRock High Yield Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Alabama--0.7%
$ 500 Tuscaloosa, Alabama, Special Care Facilities Financing
Authority, Residential Care Facility Revenue Bonds
(Capstone Village, Inc. Project), Series A, 5.875%
due 8/01/2036 $ 504
Arizona--3.9%
300 Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1), Series A,
6.75% due 7/01/2029 304
1,000 Phoenix, Arizona, IDA, Airport Facility, Revenue
Refunding Bonds (America West Airlines Inc. Project),
AMT, 6.30% due 4/01/2023 1,013
285 Pima County, Arizona, IDA, Education Revenue
Refunding Bonds (Arizona Charter Schools Project),
Series O, 5.25% due 7/01/2031 289
700 Pima County, Arizona, IDA, S/F Mortgage
Revenue Refunding Bonds, VRDN, AMT, 5.23%
due 4/25/2008 (j) 700
500 Queen Creek Improvement District Number 001,
Arizona, Special Assessment Bonds, 5%
due 1/01/2032 496
California--4.8%
1,500 Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Refunding
Bonds, Senior Series A-1, 5.125% due 6/01/2047 1,464
500 Lammersville, California, School District, Special Tax
Bonds (Community Facilities District Number 2002--
Mountain House), 5.125% due 9/01/2035 496
500 Roseville, California, Special Tax Bonds (Fiddyment
Ranch Community Facilities Number 1), 5.25%
due 9/01/2036 504
500 Temecula, California, Public Financing Authority,
Community Facilities District Number 01-2, Special
Tax Refunding Bonds, Sub-Series B, 5.10%
due 9/01/2036 497
565 Temecula Valley, California, Unified School District,
Community Facilities District Number 2005-1, Special
Tax Bonds, 5% due 9/01/2036 553
Colorado--3.8%
750 Aspen Valley Hospital District, Colorado, Revenue
Refunding Bonds, 5% due 10/15/2026 745
1,000 Colorado HFA, Revenue Refunding Bonds (Adventist
Health System/Sunbelt Obligor Group), Series D,
5.25% due 11/15/2035 1,024
450 Colorado Health Facilities Authority, Revenue
Refunding Bonds (Christian Living Communities
Project), Series A, 5.75% due 1/01/2037 467
500 Sorrel Ranch Metropolitan District, Colorado, Limited
Tax, GO, 5.75% due 12/01/2036 508
Connecticut--1.4%
1,000 Connecticut State Health and Educational Facilities
Authority Revenue Bonds (University of Hartford),
Series G, 5.25% due 7/01/2036 (h) 1,044
Florida--9.7%
605 Easton Park Community Development District,
Florida, Capital Improvement Revenue Bonds, 5.20%
due 5/01/2037 573
490 Highland Meadows Community Development District,
Florida, Special Assessment Bonds, Series A, 5.50%
due 5/01/2036 489
Face
Amount Municipal Bonds Value
Florida (concluded)
$ 1,000 Hillsborough County, Florida, IDA, Hospital Revenue
Bonds (Tampa General Hospital Project), 5.25%
due 10/01/2041 $ 1,019
300 Jacksonville, Florida, Economic Development
Commission, IDR (Gerdau Ameristeel US, Inc.), AMT,
5.30% due 5/01/2037 297
Lee County, Florida, IDA, Health Care Facilities,
Revenue Refunding Bonds (Shell Point/Alliance
Obligor Group):
500 5% due 11/15/2029 490
600 5% due 11/15/2032 586
570 Lee County, Florida, IDA, IDR (Lee Charter
Foundation), Series A, 5.375% due 6/15/2037 560
500 New River Community Development District, Florida,
Capital Improvement Revenue Bonds, Series B, 5%
due 5/01/2013 493
1,000 Pine Ridge Plantation Community Development
District, Florida, Capital Improvement and Special
Assessment Bonds, Series B, 5% due 5/01/2011 992
500 Santa Rosa Bay Bridge Authority, Florida, Revenue
Bonds, 6.25% due 7/01/2028 502
Sarosota County, Florida, Health Care Facilities
Authority, Retirement Facility Revenue Refunding
Bonds (Village on the Isle Project):
210 5.50% due 1/01/2027 214
190 5.50% due 1/01/2032 193
650 Watergrass Community Development District, Florida,
Special Assessment Revenue Bonds, Series A, 5.375%
due 5/01/2039 631
Georgia--2.9%
500 Brunswick and Glynn County, Georgia, Development
Authority, First Mortgage Revenue Bonds (Coastal
Community Retirement Corporation Project), Series A,
7.25% due 1/01/2035 397
180 Gainesville, Georgia, Redevelopment Authority,
Educational Facilities Revenue Refunding Bonds
(Riverside Military Academy), 5.125% due 3/01/2027 182
1,000 Richmond County, Georgia, Development Authority,
Environmental Improvement Revenue Bonds
(International Paper Co. Projects), AMT, Series A, 5%
due 8/01/2030 1,000
555 Savannah, Georgia, EDA, First Mortgage Revenue
Bonds (Marshes of Skidaway), Series B, 6%
due 1/01/2034 549
Illinois--3.5%
1,000 Chicago, Illinois, O'Hare International Airport, Special
Facility Revenue Refunding Bonds (American Airlines
Inc. Project), 5.50% due 12/01/2030 995
1,000 Illinois Development Finance Authority, Solid Waste
Disposal Revenue Bonds (Waste Management Inc.
Project), VRDN, AMT, 5.05% due 1/01/2010 (j) 1,011
500 Illinois State Finance Authority Revenue Bonds (Three
Crowns Park Plaza), Series A, 5.875% due 2/15/2038 521
Indiana--2.4%
700 Indiana Health and Educational Facilities Financing
Authority, Hospital Revenue Bonds (Community
Foundation of Northwest Indiana), 5.50%
due 3/01/2037 709
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (continued)
BlackRock High Yield Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Indiana (concluded)
Indiana Health Facilities Financing Authority, Hospital
Revenue Refunding Bonds (Methodist Hospital, Inc.):
$ 185 5.375% due 9/15/2022 $ 186
525 5.50% due 9/15/2031 529
Vigo County, Indiana, Hospital Authority Revenue
Bonds (Union Hospital, Inc.):
155 5.70% due 9/01/2037 156
190 5.75% due 9/01/2042 191
Iowa--0.7%
500 Iowa Financing Authority, Health Facilities Revenue
Refunding Bonds (Care Initiatives Project), Series A,
5% due 7/01/2019 496
Kansas--5.2%
1,350 Lenexa, Kansas, Health Care Facility, Revenue
Refunding Bonds, 5.50% due 5/15/2039 1,374
1,000 Manhattan, Kansas, Health Care Facilities Revenue
Bonds (Meadowlark Hills Retirement), Series B,
5.125% due 5/15/2042 967
990 Sedgwick and Shawnee Counties, Kansas, S/F
Mortgage Revenue Bonds (Mortgage-Backed
Securities Program), AMT, Series B-2, 5.25%
due 12/01/2038 (b)(c) 1,018
450 Wyandotte County, Kansas, Kansas City Unified
Government Revenue Refunding Bonds (General
Motors Corporation Project), 6% due 6/01/2025 453
Kentucky--2.3%
1,725 Trimble County, Kentucky, Environmental Facilities
Revenue Refunding Bonds, 4.60% due 6/01/2033 (a) 1,666
Maryland--3.9%
540 Baltimore, Maryland, Convention Center
Hotel Revenue Bonds, Sub-Series B, 5.875%
due 9/01/2039 569
500 Howard County, Maryland, Retirement Community
Revenue Refunding Bonds (Columbia Vantage
House Corporation), Series A, 5.25% due 4/01/2033 490
1,000 Maryland State Energy Financing Administration,
Limited Obligation Revenue Bonds (Cogeneration-
AES Warrior Run), AMT, 7.40% due 9/01/2019 1,006
Maryland State Health and Higher Educational
Facilities Authority Revenue Bonds:
500 (King Farm Presbyterian Community), Series A,
5.30% due 1/01/2037 493
250 (Washington Christian Academy), 5.25%
due 7/01/2018 251
Massachusetts--1.4%
390 Massachusetts State Development Finance Agency
Revenue Bonds (Curry College), Series A, 5.25%
due 3/01/2026 (e) 401
645 Massachusetts State Health and Educational
Facilities Authority, Revenue Refunding Bonds
(Bay Cove Human Services Issue), Series A, 5.90%
due 4/01/2028 653
Michigan--0.4%
310 Garden City, Michigan, Hospital Finance Authority,
Hospital Revenue Refunding Bonds (Garden City
Hospital Obligation), Series A, 5% due 8/15/2038 287
Face
Amount Municipal Bonds Value
Missouri--0.5%
Branson, Missouri, Regional Airport Transportation
Development District, Airport Revenue Bonds:
$ 250 AMT, Series B, 6% due 7/01/2037 $ 247
95 Series A, 6% due 7/01/2037 96
Nevada--1.3%
1,000 Clark County, Nevada, IDR (Southwest Gas Corp.
Project), AMT, Series A, 4.75% due 9/01/2036 (f) 962
New Hampshire--3.6%
New Hampshire Health and Education Facilities
Authority, Revenue Refunding Bonds:
950 (Havenwood-Heritage Heights Retirement
Community), Series A, 5.40% due 1/01/2030 950
1,015 (Southern New Hampshire University), 5%
due 1/01/2027 (e) 1,028
650 New Hampshire State Business Financing
Authority, Solid Waste Disposal Revenue Bonds
(Waste Management Inc. Project), AMT, 5.20%
due 5/01/2027 660
New Jersey--4.7%
1,000 New Jersey EDA, Retirement Community Revenue
Refunding Bonds (Seabrook Village, Inc.), 5.25%
due 11/15/2036 1,000
490 New Jersey EDA, Special Facility Revenue Bonds
(Continental Airlines Inc. Project), AMT, 6.625%
due 9/15/2012 517
650 New Jersey Health Care Facilities Financing Authority
Revenue Bonds (Pascack Valley Hospital Association),
6.625% due 7/01/2036 576
1,000 New Jersey Health Care Facilities Financing Authority,
Revenue Refunding Bonds (South Jersey Hospital
System), 5% due 7/01/2046 996
385 Tobacco Settlement Financing Corporation of New
Jersey, Revenue Refunding Bonds, Series 1A, 5%
due 6/01/2041 363
New York--8.4%
500 Erie County, New York, IDA, Revenue Bonds
(Orchard Park CCRC, Inc. Project), Series A, 6%
due 11/15/2036 526
500 Genesee County, New York, IDA, Civic Facility
Revenue Refunding Bonds (United Memorial Medical
Center Project), 5% due 12/01/2032 480
1,000 Nassau County, New York, Tobacco Settlement
Corporation, Senior Asset-Backed Revenue Refunding
Bonds, Series A-3, 5% due 6/01/2035 1,005
750 New York City, New York, City IDA, Special Facility
Revenue Bonds (JetBlue Airways Corporation Project),
AMT, 5.125% due 5/15/2030 714
805 New York City, New York, GO, Sub-Series I-1, 5%
due 4/01/2025 832
1,000 New York Liberty Development Corporation Revenue
Bonds (National Sports Museum Project), Series A,
6.125% due 2/15/2019 1,038
1,000 New York State Dormitory Authority, Non-State
Supported Debt, Revenue Refunding Bonds (New
York University Hospital Center), Series A, 5%
due 7/01/2026 1,002
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (continued)
BlackRock High Yield Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
New York (concluded)
$ 500 Onondaga County, New York, IDA, PCR (Anheuser-
Busch Companies, Inc. Project), Refunding, Series A,
4.875% due 7/01/2041 $ 501
North Carolina--0.7%
500 North Carolina Medical Care Commission, Health
Care Facilities, First Mortgage Revenue Refunding
Bonds (Salemtowne Project), 5.10% due 10/01/2030 489
North Dakota--1.4%
1,000 Ward County, North Dakota, Health Care Facility
Revenue Refunding Bonds (Trinity Health Obligated
Group), 5.125% due 7/01/2029 1,002
Ohio--1.2%
875 Richland County, Ohio, Hospital Facilities Revenue
Refunding Bonds (MedCentral Health System), 5.25%
due 11/15/2036 896
Oklahoma--0.5%
355 Oklahoma State Development Finance Authority,
Revenue Refunding Bonds (Saint John Health
System), 5% due 2/15/2042 357
Pennsylvania--1.7%
735 Allegheny County, Pennsylvania, Hospital
Development Authority, Health System Revenue
Refunding Bonds (West Penn Allegheny Health
System), Series A, 5.375% due 11/15/2040 730
500 Harrisburg, Pennsylvania, Authority, University
Revenue Bonds (Harrisburg University of Science),
Series B, 6% due 9/01/2036 515
Rhode Island--1.3%
1,000 Rhode Island Housing and Mortgage Finance
Corporation, Homeownership Opportunity Revenue
Bonds, AMT, Series 53-B, 5% due 10/01/2046 970
South Carolina--2.3%
1,000 Connector 2000 Association, Inc., South Carolina,
Toll Road and Capital Appreciation Revenue Bonds,
Senior Series B, 7.97% due 1/01/2015 (k) 554
500 Myrtle Beach, South Carolina, Tax Increment
Revenue Bonds (Myrtle Beach Air Force Base),
Series A, 5.25% due 11/01/2026 505
600 South Carolina Jobs, EDA, Health Care Facilities,
First Mortgage Revenue Refunding Bonds (Luthern
Homes), 5.50% due 5/01/2028 595
Tennessee--1.0%
700 Sullivan County, Tennessee, Health, Educational &
Housing Facilities Board, Hospital Revenue Bonds
(Wellmont Health System Project), Series C, 5.25%
due 9/01/2036 711
Texas--9.1%
Alliance Airport Authority, Inc., Texas, Special
Facilities Revenue Refunding Bonds, AMT:
1,000 (American Airlines Inc. Project), 5.75%
due 12/01/2029 997
500 (FedEx Corp. Project), 4.85% due 4/01/2021 493
Face
Amount Municipal Bonds Value
Texas (concluded)
$ 500 Brazos River Authority, Texas, PCR (TXU Energy
Company LLC Project), AMT, 5% due 3/01/2041 $ 463
500 Dallas, Texas, Industrial Development Corporation,
IDR (CR/PL Inc. Project), VRDN, AMT, 7.50%
due 8/01/2017 (j) 503
655 HFDC of Central Texas, Inc., Retirement Facilities
Revenue Bonds, Series A, 5.75% due 11/01/2036 673
1,000 Harlandale, Texas, Independent School District,
School Building, GO, 4.75% due 8/15/2040 982
500 Houston, Texas, Airport System, Special Facilities
Revenue Bonds (Continental Airlines), AMT, Series E,
7.375% due 7/01/2022 545
1,000 Mission, Texas, Economic Development Corporation,
Solid Waste Disposal Revenue Bonds (Allied Waste
N.A. Inc Project), Series A, 5.20% due 4/01/2018 992
1,000 Texas State Public Financing Authority, Charter
School Financing Corporation, Revenue Refunding
Bonds (KIPP, Inc.), Series A, 5% due 2/15/2036 (e) 994
Utah--2.2%
1,640 Utah Housing Corporation, S/F Mortgage Revenue
Bonds, AMT, Series A-1, Class I, 5% due 7/01/2037 1,620
Virginia--7.3%
1,150 Albermarle County, Virginia, IDA, Residential Care
Facilities, Mortgage Revenue Refunding Bonds
(Westminster-Canterbury), 5% due 1/01/2031 1,145
300 Fairfax County, Virginia, EDA, Residential Care
Facilities, Mortgage Revenue Refunding Bonds
(Goodwin House, Inc.), 5.125% due 10/01/2042 298
500 Fairfax County, Virginia, EDA, Retirement Revenue
Refunding Bonds (Greenspring Village Inc.), Series A,
4.875% due 10/01/2036 485
500 Farms of New Kent, Virginia, Community
Development Authority, Special Assessment Bonds,
Series C, 5.80% due 3/01/2036 496
450 Henrico County, Virginia, EDA, Residential Care
Facility, Mortgage Revenue Refunding Bonds
(Westminster-Canterbury Of Winchester, Inc.), 5%
due 10/01/2027 448
210 Lexington, Virginia, IDA, Residential Care Facility,
Mortgage Revenue Refunding Bonds (Kendal at
Lexington), Series A, 5.375% due 1/01/2028 209
750 Lynchburg, Virginia, IDA, Residential Care Facility,
Mortgage Revenue Refunding Bonds (Westminster-
Canterbury), 5% due 7/01/2031 733
500 Tobacco Settlement Financing Corporation of Virginia,
Revenue Refunding Bonds, Senior Series B-1, 5%
due 6/01/2047 478
1,000 Virginia State, HDA, Commonwealth Mortgage
Revenue Bonds, Series H, Sub-Series H-1, 5.35%
due 7/01/2031 (g) 1,023
Washington--0.8%
550 Washington State Housing Financing Commission,
Nonprofit Revenue Bonds (Skyline at First Hill
Project), Series A, 5.625% due 1/01/2038 556
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Schedule of Investments (concluded)
BlackRock High Yield Municipal Fund
(In Thousands)
Face
Amount Municipal Bonds Value
Wisconsin--0.7%
$ 500 Wisconsin State Health and Educational Facilities
Authority, Revenue Refunding Bonds (Franciscan
Sisters Healthcare), 5% due 9/01/2026 $ 494
Total Municipal Bonds
(Cost--$70,574)--95.7% 69,641
Shares
Held Mutual Funds Value
3,409 Merrill Lynch Institutional Tax-Exempt Fund,
3.59% (d)(i) $ 3,409
Total Mutual Funds
(Cost--$3,409)--4.7% 3,409
Total Investments (Cost--$73,983*)--100.4% 73,050
Liabilities in Excess of Other Assets--(0.4%) (316)
------------
Net Assets--100.0% $ 72,734
============
* The cost and unrealized appreciation (depreciation) of investments
as of June 30, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 73,983
===============
Gross unrealized appreciation $ 219
Gross unrealized depreciation (1,152)
---------------
Net unrealized depreciation $ (933)
===============
(a) AMBAC Insured.
(b) FHLMC Collateralized.
(c) FNMA/GNMA Collateralized.
(d) 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 3,409 $69
(e) ACA Insured.
(f) FGIC Insured.
(g) MBIA Insured.
(h) Radian Insured.
(i) Represents the current yield as of June 30, 2007.
(j) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(k) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
o Forward interest rate swaps outstanding as of June 30, 2007 were
as follows:
Notional Unrealized
Amount Depreciation
Pay a fixed rate of 4.034% and receive
a floating rate based on a 1-week
Bond Market Association Rate
Broker, JPMorganChase
Expires September 2017 $4,000 ($12)
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Statements of Assets and Liabilities
BlackRock BlackRock BlackRock BlackRock
Short-Term Municipal National High Yield
Municipal Insured Municipal Municipal
As of June 30, 2007 Fund Fund Fund Fund
Assets
Investments in unaffiliated securities, at value* $ 263,415,980 $ 962,457,182 $1,718,427,098 $ 69,641,240
Investments in affiliated securities, at value** 6,603,202 22,067,601 28,605,978 3,408,907
Unrealized appreciation on forward interest rate swaps -- 290,400 -- --
Cash 86,769 5,567 90,061 16,092
Receivables:
Interest 4,283,317 13,735,627 26,171,544 1,014,921
Securities sold -- 8,497,250 19,570,038 1,003,633
Capital shares sold 408,464 1,093,615 7,255,342 167,848
Dividends from affiliates -- 72,439 -- --
Prepaid expenses and other assets 32,374 811,730 135,838 28,291
-------------- -------------- -------------- --------------
Total assets 274,830,106 1,009,031,411 1,800,255,899 75,280,932
-------------- -------------- -------------- --------------
Liabilities
Trust certificates -- 109,775,745 151,796,404 --
Unrealized depreciation on forward interest rate swaps -- -- -- 12,232
Payables:
Securities purchased -- 16,108,068 29,799,694 2,183,928
Dividends and distributions to shareholders 737,338 2,717,164 4,904,320 259,994
Capital shares redeemed 176,185 618,254 1,649,161 1,793
Interest expense -- 739,743 1,637,993 --
Investment adviser 37,248 272,508 644,232 20,349
Distributor 16,857 105,658 267,825 4,494
Other affiliates 28,754 68,771 205,986 2,896
Accrued expenses and other liabilities 114,874 172,421 383,682 61,079
-------------- -------------- -------------- --------------
Total liabilities 1,111,256 130,578,332 191,289,297 2,546,765
-------------- -------------- -------------- --------------
Net Assets
Net assets $ 273,718,850 $ 878,453,079 $1,608,966,602 $ 72,734,167
============== ============== ============== ==============
Net Assets Consist of
Undistributed investment income--net $ 484,004 $ 2,864,565 $ 984,199 $ 103,720
Undistributed (accumulated) realized capital
gains (losses)--net (9,518,515) (3,215,488) (30,719,959) 152,050
Unrealized appreciation (depreciation)--net (516,004) 26,099,658 40,833,644 (945,506)
-------------- -------------- -------------- --------------
Total accumulated earnings (losses)--net (9,550,515) 25,748,735 11,097,884 (689,736)
-------------- -------------- -------------- --------------
BlackRock Common Stock, $.10 par value++ 24,845 -- -- --
Institutional Common Stock, $.10 par value++++ 1,326,491 7,880,571 9,397,924 626,857
Investor A Common Stock, $.10 par value++++++ 14,732 2,245,411 3,360,632 59,221
Investor A1 Common Stock, $.10 par value++++++++ 1,236,535 -- -- --
Investor B Common Stock, $.10 par value++++++++++ 145,525 593,822 975,269 --
Investor C Common Stock, $.10 par value++++++++++++ 21,091 59,147 401,009 43,932
Investor C1 Common Stock, $.10 par value++++++++++++++ -- 670,840 1,353,959 --
Paid-in capital in excess of par 280,500,146 841,254,553 1,582,379,925 72,693,893
-------------- -------------- -------------- --------------
Net Assets $ 273,718,850 $ 878,453,079 $1,608,966,602 $ 72,734,167
============== ============== ============== ==============
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Statements of Assets and Liabilities (concluded)
BlackRock BlackRock BlackRock BlackRock
Short-Term Municipal National High Yield
Municipal Insured Municipal Municipal
As of June 30, 2007 Fund Fund Fund Fund
Net Asset Value
BlackRock:
Net assets $ 2,456,503 -- -- --
============== ============== ============== ==============
Shares outstanding 248,454 -- -- --
============== ============== ============== ==============
Net asset value and redemption price per share $ 9.89 -- -- --
============== ============== ============== ==============
Institutional:
Net assets $ 131,061,183 $ 604,691,001 $ 976,152,745 $ 62,463,874
============== ============== ============== ==============
Shares outstanding 13,264,906 78,805,707 93,979,240 6,268,568
============== ============== ============== ==============
Net asset value and redemption price per share $ 9.88 $ 7.67 $ 10.39 $ 9.96
============== ============== ============== ==============
Investor A:
Net assets $ 1,456,122 $ 172,236,278 $ 349,224,922 $ 5,892,095
============== ============== ============== ==============
Shares outstanding 147,323 22,454,105 33,606,317 592,210
============== ============== ============== ==============
Net asset value and redemption price per share $ 9.88 $ 7.67 $ 10.39 $ 9.95
============== ============== ============== ==============
Investor A1:
Net assets $ 122,280,627 -- -- --
============== ============== ============== ==============
Shares outstanding 12,365,352 -- -- --
============== ============== ============== ==============
Net asset value and redemption price per share $ 9.89 -- -- --
============== ============== ============== ==============
Investor B:
Net assets $ 14,379,967 $ 45,532,659 $ 101,260,157 --
============== ============== ============== ==============
Shares outstanding 1,455,248 5,938,216 9,752,685 --
============== ============== ============== ==============
Net asset value and redemption price per share $ 9.88 $ 7.67 $ 10.38 --
============== ============== ============== ==============
Investor C:
Net assets $ 2,084,448 $ 4,541,553 $ 41,675,770 $ 4,378,198
============== ============== ============== ==============
Shares outstanding 210,907 591,473 4,010,092 439,321
============== ============== ============== ==============
Net asset value and redemption price per share $ 9.88 $ 7.68 $ 10.39 $ 9.97
============== ============== ============== ==============
Investor C1:
Net assets -- $ 51,451,588 $ 140,653,008 --
============== ============== ============== ==============
Shares outstanding -- 6,708,401 13,539,590 --
============== ============== ============== ==============
Net asset value and redemption price per share -- $ 7.67 $ 10.39 --
============== ============== ============== ==============
* Identified cost for unaffiliated securities $ 263,931,984 $ 934,352,012 $1,677,593,454 $ 70,574,514
============== ============== ============== ==============
** Identified cost for affiliated securities $ 6,603,202 $ 24,363,513 $ 28,605,978 $ 3,408,907
============== ============== ============== ==============
++ Authorized shares--BlackRock 150,000,000 -- -- --
============== ============== ============== ==============
++++ Authorized shares--Institutional 150,000,000 500,000,000 375,000,000 100,000,000
============== ============== ============== ==============
++++++ Authorized shares--Investor A 150,000,000 500,000,000 375,000,000 100,000,000
============== ============== ============== ==============
++++++++ Authorized shares--Investor A1 150,000,000 -- -- --
============== ============== ============== ==============
++++++++++ Authorized shares--Investor B 150,000,000 375,000,000 375,000,000 --
============== ============== ============== ==============
++++++++++++ Authorized shares--Investor C 150,000,000 375,000,000 375,000,000 100,000,000
============== ============== ============== ==============
++++++++++++++ Authorized shares--Investor C1 -- 375,000,000 375,000,000 --
============== ============== ============== ==============
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Statements of Operations
BlackRock BlackRock BlackRock BlackRock
Short-Term Municipal National High Yield
Municipal Insured Municipal Municipal
For the Year Ended June 30, 2007 Fund Fund Fund Fund*
Investment Income
Interest $ 10,854,112 $ 47,525,276 $ 85,527,312 $ 2,349,629
Dividends from affiliates 313,945 1,225,484 1,477,049 68,615
-------------- -------------- -------------- --------------
Total income 11,168,057 48,750,760 87,004,361 2,418,244
-------------- -------------- -------------- --------------
Expenses
Investment advisory fees 1,026,166 3,347,299 7,204,982 267,042
Interest expense and fees -- 3,703,919 6,157,425 --
Service and distribution fees--Investor C1 -- 458,943 1,199,779 --
Service and distribution fees--Investor B 62,980 419,919 891,062 --
Service fees--Investor A 1,547 435,341 796,475 4,434
Transfer agent fees--Institutional 65,041 226,781 613,731 2,727
Accounting services 113,979 279,890 444,852 17,606
Registration fees 46,404 60,719 146,546 7,189
Transfer agent fees--Investor A 2,360 73,540 175,277 526
Printing and shareholder reports 24,230 76,378 121,929 4,467
Professional fees 37,245 78,786 78,879 34,649
Service and distribution fees--Investor C 7,732 16,925 161,017 20,998
Custodian fees 28,138 52,960 78,500 5,857
Service fees--Investor A1 131,044 -- -- --
Transfer agent fees--Investor C1 -- 25,751 85,487 --
Transfer agent fees--Investor B 9,884 28,959 70,953 --
Pricing services 10,202 21,014 58,530 2,053
Directors' fees and expenses 7,149 18,826 28,628 1,067
Transfer agent fees--Investor A1 52,307 -- -- --
Service and distribution fees--Class C 33,491 -- -- --
Transfer agent fees--Investor C 4,804 1,235 17,552 808
Transfer agent fees--Class C 4,094 -- -- --
Transfer agent fees--BlackRock 658 -- -- --
Offering costs -- -- -- 101,990
Other 38,960 60,539 78,267 19,608
-------------- -------------- -------------- --------------
Total expenses before waiver 1,708,415 9,387,724 18,409,871 491,021
Waiver of expenses (299,590) (17,578) (85,262) (162,702)
-------------- -------------- -------------- --------------
Total expenses after waiver 1,408,825 9,370,146 18,324,609 328,319
-------------- -------------- -------------- --------------
Investment income--net 9,759,232 39,380,614 68,679,752 2,089,925
-------------- -------------- -------------- --------------
Realized & Unrealized Gain (Loss)--Net
Realized gain (loss) on:
Investments--net (1,713,793) 1,576,951 9,192,129 15,609
Financial futures contracts and forward interest rate
swaps--net -- (360,072) (475,176) 146,746
-------------- -------------- -------------- --------------
Total realized gain (loss)--net (1,713,793) 1,216,879 8,716,953 162,355
-------------- -------------- -------------- --------------
Change in unrealized appreciation/depreciation on:
Investments--net 1,804,264 1,426,556 (7,313,633) (933,274)
Forward interest rate swaps--net -- 290,400 -- (12,232)
-------------- -------------- -------------- --------------
Total change in unrealized appreciation/depreciation--net 1,804,264 1,716,956 (7,313,633) (945,506)
-------------- -------------- -------------- --------------
Total realized and unrealized gain (loss)--net 90,471 2,933,835 1,403,320 (783,151)
-------------- -------------- -------------- --------------
Net Increase in Net Assets Resulting from Operations $ 9,849,703 $ 42,314,449 $ 70,083,072 $ 1,306,774
============== ============== ============== ==============
* Fund commenced operations on August 1, 2006.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Statements of Changes in Net Assets BlackRock Short-Term Municipal Fund
For the Year Ended
June 30,
Increase (Decrease) in Net Assets: 2007 2006
Operations
Investment income--net $ 9,759,232 $ 9,982,288
Realized loss--net (1,713,793) (2,592,944)
Change in unrealized appreciation/depreciation--net 1,804,264 (1,927,943)
-------------- --------------
Net increase in net assets resulting from operations 9,849,703 5,461,401
-------------- --------------
Dividends to Shareholders
Investment income--net:
BlackRock (140,524) --
Institutional (4,626,244) (4,454,151)
Investor A (19,319) --
Investor A1 (4,174,606) (3,080,084)
Investor B (522,656) (696,530)
Investor C (18,188) --
Class C (257,695) (1,751,261)
-------------- --------------
Net decrease in net assets resulting from dividends to shareholders (9,759,232) (9,982,026)
-------------- --------------
Capital Share Transactions
Net decrease in net assets derived from capital share transactions (62,634,810) (118,737,525)
-------------- --------------
Net Assets
Total decrease in net assets (62,544,339) (123,258,150)
Beginning of year 336,263,189 459,521,339
-------------- --------------
End of year* $ 273,718,850 $ 336,263,189
============== ==============
* Undistributed investment income--net $ 484,004 $ 484,004
============== ==============
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Statements of Changes in Net Assets BlackRock Municipal Insured Fund
For the Year Ended
June 30,
Increase (Decrease) in Net Assets: 2007 2006
Operations
Investment income--net $ 39,380,614 $ 42,545,175
Realized gain--net 1,216,879 6,736,805
Change in unrealized appreciation/depreciation--net 1,716,956 (43,062,066)
-------------- --------------
Net increase in net assets resulting from operations 42,314,449 6,219,914
-------------- --------------
Dividends & Distributions to Shareholders
Investment income--net:
Institutional (26,786,243) (29,830,404)
Investor A (6,958,170) (7,533,857)
Investor B (1,954,906) (2,879,619)
Investor C (53,001) --
Investor C1 (1,973,504) (2,276,067)
Realized gain--net:
Institutional (3,420,292) (2,535,229)
Investor A (945,702) (682,505)
Investor B (299,416) (295,880)
Investor C (6,273) --
Investor C1 (312,142) (235,289)
-------------- --------------
Net decrease in net assets resulting from dividends and distributions to shareholders (42,709,649) (46,268,850)
-------------- --------------
Capital Share Transactions
Net decrease in net assets derived from capital share transactions (60,444,977) (66,044,701)
-------------- --------------
Net Assets
Total decrease in net assets (60,840,177) (106,093,637)
Beginning of year 939,293,256 1,045,386,893
-------------- --------------
End of year* $ 878,453,079 $ 939,293,256
============== ==============
* Undistributed investment income--net $ 2,864,565 $ 1,209,976
============== ==============
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Statements of Changes in Net Assets BlackRock National Municipal Fund
For the Year Ended
June 30,
Increase (Decrease) in Net Assets: 2007 2006
Operations
Investment income--net $ 68,679,752 $ 67,217,185
Realized gain--net 8,716,953 12,238,185
Change in unrealized appreciation--net (7,313,633) (53,182,340)
-------------- --------------
Net increase in net assets resulting from operations 70,083,072 26,273,030
-------------- --------------
Dividends to Shareholders
Investment income--net:
Institutional (43,499,106) (43,778,940)
Investor A (14,096,416) (11,906,520)
Investor B (4,665,176) (6,469,017)
Investor C (572,654) --
Investor C1 (5,809,148) (4,988,554)
-------------- --------------
Net decrease in net assets resulting from dividends to shareholders (68,642,500) (67,143,031)
-------------- --------------
Capital Share Transactions
Net increase in net assets derived from capital share transactions 159,104,907 46,489,740
-------------- --------------
Net Assets
Total increase in net assets 160,545,479 5,619,739
Beginning of year 1,448,421,123 1,442,801,384
-------------- --------------
End of year* $1,608,966,602 $1,448,421,123
============== ==============
* Undistributed investment income--net $ 984,199 $ 946,947
============== ==============
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Statement of Changes in Net Assets BlackRock High Yield Municipal Fund
For the Period
August 1, 2006++
Increase (Decrease) in Net Assets: to June 30, 2007
Operations
Investment income--net $ 2,089,925
Realized gain--net 162,355
Change in unrealized depreciation--net (945,506)
--------------
Net increase in net assets resulting from operations 1,306,774
--------------
Dividends & Distributions to Shareholders
Investment income--net:
Institutional (1,933,439)
Investor A (73,543)
Investor C (82,943)
Realized gain--net:
Institutional (9,444)
Investor A (407)
Investor C (454)
--------------
Net decrease in net assets resulting from dividends and distributions to shareholders (2,100,230)
--------------
Capital Share Transactions
Net increase in net assets derived from capital share transactions 73,526,873
--------------
Net Assets
Total increase in net assets 72,733,417
Beginning of period 750
--------------
End of period* $ 72,734,167
==============
* Undistributed investment income--net $ 103,720
==============
++ Commencement of operations.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Financial Highlights BlackRock Short-Term Municipal Fund
BlackRock
For the Period
October 2, 2006++
The following per share data and ratios have been derived to June 30,
from information provided in the financial statements. 2007
Per Share Operating Performance
Net asset value, beginning of period $ 9.93
--------------
Investment income--net** .25
Realized and unrealized loss--net (.04)
--------------
Total from investment operations .21
--------------
Less dividends from investment income--net (.25)
--------------
Net asset value, end of period $ 9.89
==============
Total Investment Return
Based on net asset value per share 2.09%+++
==============
Ratios to Average Net Assets
Expenses, net of waiver .35%*
==============
Expenses .45%*
==============
Investment income--net 3.34%*
==============
Supplemental Data
Net assets, end of period (in thousands) $ 2,457
==============
Portfolio turnover 110%
==============
* Annualized.
** Based on average shares outstanding.
++ Commencement of operations.
+++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Financial Highlights (continued) BlackRock Short-Term Municipal Fund
Investor A
For the Period
The following per share data Institutional October 2,
and ratios have been derived 2006++ to
from information provided in For the Year Ended June 30, June 30,
the financial statements. 2007 2006 2005 2004 2003 2007
Per Share Operating Performance
Net asset value, beginning of period $ 9.88 $ 9.99 $ 10.05 $ 10.17 $ 10.13 $ 9.93
---------- ---------- ---------- ---------- ---------- ----------
Investment income--net*** .32 .27 .19 .18 .27 .23
Realized and unrealized gain (loss)--net --+++++ (.11) (.06) (.12) .02 (.05)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment operations .32 .16 .13 .06 .29 .18
---------- ---------- ---------- ---------- ---------- ----------
Less dividends from investment income--net (.32) (.27) (.19) (.18) (.25) (.23)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 9.88 $ 9.88 $ 9.99 $ 10.05 $ 10.17 $ 9.88
========== ========== ========== ========== ========== ==========
Total Investment Return**
Based on net asset value per share 3.32% 1.57% 1.30% .59% 2.87% 1.79%+++
========== ========== ========== ========== ========== ==========
Ratios to Average Net Assets
Expenses, net of waiver .38% .44% .43% .42% .42% .61%*
========== ========== ========== ========== ========== ==========
Expenses .48% .45% .44% .43% .43% 1.06%*
========== ========== ========== ========== ========== ==========
Investment income--net 3.27% 2.66% 1.88% 1.78% 2.44% 3.12%*
========== ========== ========== ========== ========== ==========
Supplemental Data
Net assets, end of period (in thousands) $ 131,061 $ 149,333 $ 186,877 $ 243,443 $ 251,137 $ 1,456
========== ========== ========== ========== ========== ==========
Portfolio turnover 110% 83% 87% 69% 45% 110%
========== ========== ========== ========== ========== ==========
* Annualized.
** Total investment returns exclude the effects of any sales charges.
*** Based on average shares outstanding.
++ Commencement of operations.
+++ Aggregate total investment return.
+++++ Amount is less than $.01 per share.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Financial Highlights (continued) BlackRock Short-Term Municipal Fund
The following per
share data and
ratios have been Investor A1 Investor B
derived from
information provided in For the Year Ended June 30, For the Year Ended June 30,
the financial statements. 2007 2006 2005 2004 2003 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value,
beginning of year $ 9.89 $ 10.00 $ 10.06 $ 10.18 $ 10.14 $ 9.88 $ 10.00 $ 10.05 $ 10.17 $ 10.13
------------------------------------------------- -------------------------------------------------
Investment income--net** .32 .26 .18 .17 .24 .29 .23 .15 .14 .21
Realized and unrealized
gain (loss)--net (.01) (.11) (.06) (.12) .04 --+++ (.12) (.05) (.12) .04
------------------------------------------------- -------------------------------------------------
Total from investment
operations .31 .15 .12 .05 .28 .29 .11 .10 .02 .25
------------------------------------------------- -------------------------------------------------
Less dividends from
investment income--net (.31) (.26) (.18) (.17) (.24) (.29) (.23) (.15) (.14) (.21)
------------------------------------------------- -------------------------------------------------
Net asset value,
end of year $ 9.89 $ 9.89 $ 10.00 $ 10.06 $ 10.18 $ 9.88 $ 9.88 $ 10.00 $ 10.05 $ 10.17
================================================= =================================================
Total Investment Return*
Based on net asset
value per share 3.21% 1.47% 1.20% .50% 2.77% 2.95% 1.11% 1.04% .24% 2.51%
================================================= =================================================
Ratios to Average Net Assets
Expenses, net of waiver .48% .54% .53% .52% .52% .74% .80% .79% .77% .78%
================================================= =================================================
Expenses .58% .55% .54% .53% .53% .85% .81% .80% .78% .79%
================================================= =================================================
Investment income--net 3.18% 2.55% 1.76% 1.68% 2.31% 2.90% 2.28% 1.50% 1.43% 2.10%
================================================= =================================================
Supplemental Data
Net assets, end of year
(in thousands) $122,281 $ 99,293 $141,172 $244,741 $248,454 $ 14,380 $ 23,769 $ 38,565 $ 63,135 $ 83,886
================================================= =================================================
Portfolio turnover 110% 83% 87% 69% 45% 110% 83% 87% 69% 45%
================================================= =================================================
* Total investment returns exclude the effects of sales charges.
** Based on average shares outstanding.
+++ Amount is less than $(.01) per share.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Financial Highlights (continued) BlackRock Short-Term Municipal Fund
Investor C
For the Period
October 2, 2006++
The following per share data and ratios have been derived to June 30,
from information provided in the financial statements. 2007
Per Share Operating Performance
Net asset value, beginning of period $ 9.93
--------------
Investment income--net*** .17
Realized and unrealized loss--net (.05)
--------------
Total from investment operations .12
--------------
Less dividends from investment income--net (.17)
--------------
Net asset value, end of period $ 9.88
==============
Total Investment Return**
Based on net asset value per share 1.23%+++
==============
Ratios to Average Net Assets
Expenses, net of waiver 1.36%*
==============
Expenses 2.06%*
==============
Investment income--net 2.37%*
==============
Supplemental Data
Net assets, end of period (in thousands) $ 2,084
==============
Portfolio turnover 110%
==============
* Annualized.
** Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
++ Commencement of operations.
+++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Financial Highlights (continued) BlackRock Municipal Insured Fund
The following per
share data and
ratios have been Institutional Investor A
derived from
information provided in For the Year Ended June 30, For the Year Ended June 30,
the financial statements. 2007 2006 2005 2004 2003 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value,
beginning of year $ 7.69 $ 8.00 $ 7.70 $ 8.07 $ 7.80 $ 7.68 $ 8.00 $ 7.70 $ 8.07 $ 7.79
------------------------------------------------- -------------------------------------------------
Investment income--net** .32 .35 .36 .40 .41 .33 .33 .34 .38 .39
Realized and unrealized
gain (loss)--net .03 (.28) .30 (.37) .27 .01 (.29) .30 (.37) .28
------------------------------------------------- -------------------------------------------------
Total from investment
operations .35 .07 .66 .03 .68 .34 .04 .64 .01 .67
------------------------------------------------- -------------------------------------------------
Less dividends and
distributions:
Investment income--net (.33) (.35) (.36) (.40) (.41) (.31) (.33) (.34) (.38) (.39)
Realized gain--net (.04) (.03) -- -- -- (.04) (.03) -- -- --
------------------------------------------------- -------------------------------------------------
Total dividends and
distributions (.37) (.38) (.36) (.40) (.41) (.35) (.36) (.34) (.38) (.39)
------------------------------------------------- -------------------------------------------------
Net asset value,
end of year $ 7.67 $ 7.69 $ 8.00 $ 7.70 $ 8.07 $ 7.67 $ 7.68 $ 8.00 $ 7.70 $ 8.07
================================================= =================================================
Total Investment Return*
Based on net asset value
per share 4.60% .82% 8.74% .35% 8.88% 4.47% .44% 8.47% .10% 8.77%
================================================= =================================================
Ratios to Average Net Assets
Expenses, net of waiver
and excluding interest
expense .47% .45% .46% .46% .46% .72% .70% .71% .71% .71%
================================================= =================================================
Expenses, net of waiver .87% .74% .63% .66% .71% 1.12% .99% .88% .91% .96%
================================================= =================================================
Expenses .87% .74% .64% .67% .71% 1.13% .99% .89% .91% .96%
================================================= =================================================
Investment income--net 4.42% 4.40% 4.58% 5.04% 5.13% 4.17% 4.15% 4.33% 4.79% 4.88%
================================================= =================================================
Supplemental Data
Net assets, end of year
(in thousands) $604,691 $639,687 $707,134 $733,310 $855,757 $172,236 $172,083 $182,216 $183,007 $187,805
================================================= =================================================
Portfolio turnover 36% 41% 47% 44% 33% 36% 41% 47% 44% 33%
================================================= =================================================
* Total investment returns exclude the effects of any sales charges.
** Based on average shares outstanding.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Financial Highlights (continued) BlackRock Municipal Insured Fund
Investor B
The following per share data and ratios have been derived For the Year Ended June 30,
from information provided in the financial statements. 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of year $ 7.68 $ 7.99 $ 7.69 $ 8.07 $ 7.79
----------- ----------- ----------- ----------- -----------
Investment income--net** .29 .29 .30 .34 .35
Realized and unrealized gain (loss)--net .01 (.28) .30 (.38) .28
----------- ----------- ----------- ----------- -----------
Total from investment operations .30 .01 .60 (.04) .63
----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.27) (.29) (.30) (.34) (.35)
Realized gain--net (.04) (.03) -- -- --
----------- ----------- ----------- ----------- -----------
Total dividends and distributions (.31) (.32) (.30) (.34) (.35)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 7.67 $ 7.68 $ 7.99 $ 7.69 $ 8.07
=========== =========== =========== =========== ===========
Total Investment Return*
Based on net asset value per share 3.95% .05% 7.93% (.53%) 8.21%
=========== =========== =========== =========== ===========
Ratios to Average Net Assets
Expenses, net of waiver and excluding interest expense 1.23% 1.21% 1.21% 1.21% 1.22%
=========== =========== =========== =========== ===========
Expenses, net of waiver 1.63% 1.50% 1.39% 1.42% 1.47%
=========== =========== =========== =========== ===========
Expenses 1.63% 1.50% 1.40% 1.42% 1.47%
=========== =========== =========== =========== ===========
Investment income--net 3.67% 3.64% 3.83% 4.29% 4.38%
=========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of year (in thousands) $ 45,533 $ 66,477 $ 91,355 $ 111,524 $ 160,177
=========== =========== =========== =========== ===========
Portfolio turnover 36% 41% 47% 44% 33%
=========== =========== =========== =========== ===========
* Total investment returns exclude the effects of sales charges.
** Based on average shares outstanding.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Financial Highlights (continued) BlackRock Municipal Insured Fund
Investor C
For the Period
October 2, Investor C1
The following per share data and ratios 2006++ to
have been derived from information June 30, For the Year Ended June 30,
provided in the financial statements. 2007 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of period $ 7.88 $ 7.68 $ 8.00 $ 7.69 $ 8.07 $ 7.79
----------- ----------- ----------- ----------- ----------- -----------
Investment income--net*** .17 .28 .28 .30 .33 .34
Realized and unrealized gain (loss)--net (.14) .02 (.29) .31 (.38) .28
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations .03 .30 (.01) .61 (.05) .62
----------- ----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.19) (.27) (.28) (.30) (.33) (.34)
Realized gain--net (.04) (.04) (.03) -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total dividends and distributions (.23) (.31) (.31) (.30) (.33) (.34)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 7.68 $ 7.67 $ 7.68 $ 8.00 $ 7.69 $ 8.07
=========== =========== =========== =========== =========== ===========
Total Investment Return**
Based on net asset value per share .34%+++ 3.90% (.12%) 8.01% (.58%) 8.16%
=========== =========== =========== =========== =========== ===========
Ratios to Average Net Assets
Expenses, net of waiver and excluding
interest expense 1.51%* 1.28% 1.26% 1.26% 1.26% 1.27%
=========== =========== =========== =========== =========== ===========
Expenses, net of waiver 1.90%* 1.68% 1.55% 1.44% 1.47% 1.52%
=========== =========== =========== =========== =========== ===========
Expenses 1.90%* 1.68% 1.55% 1.45% 1.47% 1.52%
=========== =========== =========== =========== =========== ===========
Investment income--net 3.37%* 3.63% 3.59% 3.77% 4.23% 4.31%
=========== =========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of period (in thousands) $ 4,542 $ 51,452 $ 61,046 $ 64,682 $ 61,794 $ 66,089
=========== =========== =========== =========== =========== ===========
Portfolio turnover 36% 36% 41% 47% 44% 33%
=========== =========== =========== =========== =========== ===========
* Annualized.
** Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
++ Commencement of operations.
+++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Financial Highlights (continued) BlackRock National Municipal Fund
The following per
share data and
ratios have been Institutional Investor A
derived from
information provided in For the Year Ended June 30, For the Year Ended June 30,
the financial statements. 2007 2006 2005 2004 2003 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value,
beginning of year $ 10.36 $ 10.66 $ 10.29 $ 10.54 $ 10.26 $ 10.37 $ 10.67 $ 10.29 $ 10.54 $ 10.27
------------------------------------------------- -------------------------------------------------
Investment income--net** .49 .51 .53 .55 .56 .46 .49 .50 .52 .53
Realized and unrealized
gain (loss)--net .05 (.30) .37 (.25) .28 .03 (.30) .38 (.25) .27
------------------------------------------------- -------------------------------------------------
Total from investment
operations .54 .21 .90 .30 .84 .49 .19 .88 .27 .80
------------------------------------------------- -------------------------------------------------
Less dividends from
investment income--net (.51) (.51) (.53) (.55) (.56) (.47) (.49) (.50) (.52) (.53)
------------------------------------------------- -------------------------------------------------
Net asset value,
end of year $ 10.39 $ 10.36 $ 10.66 $ 10.29 $ 10.54 $ 10.39 $ 10.37 $ 10.67 $ 10.29 $ 10.54
================================================= =================================================
Total Investment Return*
Based on net asset
value per share 5.06% 2.02% 8.89% 2.88% 8.34% 4.71% 1.77% 8.73% 2.62% 7.98%
================================================= =================================================
Ratios to Average Net Assets
Expenses, net of waiver
and excluding interest
expense .59% .58% .59% .60% .59% .84% .83% .84% .85% .84%
================================================= =================================================
Expenses, net of waiver .99% .84% .72% .70% .75% 1.24% 1.09% .97% .95% 1.00%
================================================= =================================================
Expenses 1.00% .85% .72% .70% .75% 1.24% 1.10% .97% .95% 1.00%
================================================= =================================================
Investment income--net 4.66% 4.87% 5.02% 5.23% 5.35% 4.43% 4.61% 4.76% 4.97% 5.10%
================================================= =================================================
Supplemental Data
Net assets, end of year
(in thousands) $976,153 $890,984 $909,125 $907,419 $624,192 $349,225 $283,814 $248,231 $207,376 $200,108
================================================= =================================================
Portfolio turnover 46% 56% 33% 20% 34% 46% 56% 33% 20% 34%
================================================= =================================================
* Total investment returns exclude the effects of any sales charges.
** Based on average shares outstanding.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Financial Highlights (continued) BlackRock National Municipal Fund
Investor B
The following per share data and ratios have been derived For the Year Ended June 30,
from information provided in the financial statements. 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of year $ 10.36 $ 10.66 $ 10.28 $ 10.53 $ 10.26
----------- ----------- ----------- ----------- -----------
Investment income--net** .41 .43 .45 .47 .48
Realized and unrealized gain (loss)--net .02 (.30) .38 (.26) .27
----------- ----------- ----------- ----------- -----------
Total from investment operations .43 .13 .83 .21 .75
----------- ----------- ----------- ----------- -----------
Less dividends from investment income--net (.41) (.43) (.45) (.46) (.48)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 10.38 $ 10.36 $ 10.66 $ 10.28 $ 10.53
=========== =========== =========== =========== ===========
Total Investment Return*
Based on net asset value per share 4.18% 1.25% 8.18% 2.10% 7.43%
=========== =========== =========== =========== ===========
Ratios to Average Net Assets
Expenses, net of waiver and excluding interest expense 1.34% 1.34% 1.35% 1.35% 1.34%
=========== =========== =========== =========== ===========
Expenses, net of waiver 1.75% 1.60% 1.48% 1.45% 1.50%
=========== =========== =========== =========== ===========
Expenses 1.75% 1.61% 1.48% 1.46% 1.51%
=========== =========== =========== =========== ===========
Investment income--net 3.92% 4.11% 4.27% 4.47% 4.59%
=========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of year (in thousands) $ 101,260 $ 134,177 $ 177,553 $ 217,814 $ 321,477
=========== =========== =========== =========== ===========
Portfolio turnover 46% 56% 33% 20% 34%
=========== =========== =========== =========== ===========
* Total investment returns exclude the effects of sales charges.
** Based on average shares outstanding.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Financial Highlights (continued) BlackRock National Municipal Fund
Investor C
For the Period
October 2, Investor C1
The following per share data and ratios 2006++ to
have been derived from information June 30, For the Year Ended June 30,
provided in the financial statements. 2007 2007 2006 2005 2004 2003
Per Share Operating Performance
Net asset value, beginning of period $ 10.57 $ 10.36 $ 10.66 $ 10.29 $ 10.54 $ 10.26
----------- ----------- ----------- ----------- ----------- -----------
Investment income--net*** .25 .41 .43 .44 .46 .47
Realized and unrealized gain (loss)--net (.16) .04 (.29) .37 (.25) .28
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations .09 .45 .14 .81 .21 .75
----------- ----------- ----------- ----------- ----------- -----------
Less dividends from investment income--net (.27) (.42) (.44) (.44) (.46) (.47)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 10.39 $ 10.39 $ 10.36 $ 10.66 $ 10.29 $ 10.54
=========== =========== =========== =========== =========== ===========
Total Investment Return**
Based on net asset value per share .96%++++ 4.23% 1.20% 8.02% 2.05% 7.48%
=========== =========== =========== =========== =========== ===========
Ratios to Average Net Assets
Expenses, net of waiver and excluding
interest expense 1.65%* 1.39% 1.39% 1.40% 1.40% 1.39%
=========== =========== =========== =========== =========== ===========
Expenses, net of waiver 2.05%* 1.80% 1.65% 1.53% 1.50% 1.55%
=========== =========== =========== =========== =========== ===========
Expenses 2.05%* 1.80% 1.65% 1.53% 1.51% 1.56%
=========== =========== =========== =========== =========== ===========
Investment income--net 3.59%* 3.88% 4.05% 4.20% 4.42% 4.54%
=========== =========== =========== =========== =========== ===========
Supplemental Data
Net assets, end of period (in thousands) $ 41,676 $ 140,653 $ 139,447 $ 107,893 $ 74,849 $ 77,906
=========== =========== =========== =========== =========== ===========
Portfolio turnover 46% 46% 56% 33% 20% 34%
=========== =========== =========== =========== =========== ===========
* Annualized.
** Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
++ Commencement of operations.
++++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Financial Highlights (concluded) BlackRock High Yield Municipal Fund
For the Period
August 1, 2006++
The following per share data and ratios have been derived to June 30, 2007
from information provided in the financial statements. Institutional Investor A Investor C
Per Share Operating Performance
Net asset value, beginning of period $ 10.00 $ 10.00 $ 10.00
----------- ----------- -----------
Investment income--net*** .39 .32 .30
Realized and unrealized gain (loss)--net (.03) .01 (.02)
----------- ----------- -----------
Total from investment operations .36 .33 .28
----------- ----------- -----------
Less dividends and distributions:
Investment income--net (.40) (.38) (.31)
Realized gain--net --+++++ --+++++ --+++++
----------- ----------- -----------
Total dividends and distributions (.40) (.38) (.31)
----------- ----------- -----------
Net asset value, end of period $ 9.96 $ 9.95 $ 9.97
=========== =========== ===========
Total Investment Return**
Based on net asset value per share 3.59%+++ 3.26%+++ 2.84%+++
=========== =========== ===========
Ratios to Average Net Assets
Expenses, net of waiver .62%* .89%* 1.53%*
=========== =========== ===========
Expenses .96%* 1.19%* 1.84%*
=========== =========== ===========
Investment income--net 4.35%* 4.16%* 3.50%*
=========== =========== ===========
Supplemental Data
Net assets, end of period (in thousands) $ 62,464 $ 5,892 $ 4,378
=========== =========== ===========
Portfolio turnover 16% 16% 16%
=========== =========== ===========
* Annualized.
** Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
++ Commencement of operations.
+++ Aggregate total investment return.
+++++ Amount is less than $(.01) per share.
See Notes to Financial Statements.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Notes to Financial Statements
1. Significant Accounting Policies:
On September 29, 2006, Merrill Lynch Municipal Bond Fund, Inc. (consisting of
Merrill Lynch Short-Term Portfolio, Merrill Lynch Insured Portfolio, Merrill
Lynch National Portfolio and Merrill Lynch High Yield Portfolio) was renamed
BlackRock Municipal Bond Fund, Inc. (the "Bond Fund"), consisting of BlackRock
Short-Term Municipal Fund, BlackRock Municipal Insured Fund, BlackRock
National Municipal Fund and BlackRock High Yield Municipal Fund (the "Funds"
or individually as the "Fund"), respectively. The Bond Fund is registered
under the Investment Company Act of 1940, as amended, as a diversified, open-
end management investment company. For the BlackRock High Yield Municipal
Fund, prior to the commencement of operations on August 1, 2006, the Fund had
no operations other than those relating to organizational matters and the
issuance of 75 shares of Common Stock of the Fund on July 10, 2006 to Fund
Asset Management, L.P. ("FAM") for $750. The Bond Fund's financial statements
are prepared in conformity with U.S. generally accepted accounting principles,
which may require the use of management accruals and estimates. Actual results
may differ from these estimates. The Funds offer multiple classes of shares.
Effective October 2, 2006, BlackRock Short-Term Municipal Fund's Class A,
Class B and Class I Shares were redesignated Investor A1, Investor B and
Institutional Shares, respectively. All Class C Shares of the BlackRock Short-
Term Municipal Fund converted to Class A (now Investor A1) Shares on August
25, 2006 and are no longer outstanding. BlackRock Municipal Insured Fund's and
BlackRock National Municipal Fund's Class A, Class B, Class C and Class I
Shares were redesignated Investor A, Investor B, Investor C1 and Institutional
Shares, respectively. BlackRock High Yield Municipal Fund's Class A, Class C
and Class I Shares were redesignated Investor A, Investor C and Institutional
Shares, respectively. Also, effective October 2, 2006 BlackRock Short-Term
Municipal Fund's BlackRock Shares, Investor A Shares and Investor C Shares
commenced operations and BlackRock Municipal Insured Fund's and BlackRock
National Municipal Fund's Investor C Shares commenced operations. BlackRock
and Institutional Shares are sold only to certain eligible investors. Investor
A and Investor A1 Shares are sold with a front-end sales charge. Shares of
Investor B, Investor C and Investor C1 may be subject to a contingent deferred
sales charge. All classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that
Investor A, Investor A1, Investor B, Investor C and Investor C1 Shares bear
certain expenses related to the shareholder servicing of such shares, and
Investor B, Investor C and Investor C1 Shares also bear certain expenses
related to the distribution of such shares. Each class has exclusive voting
rights with respect to matters relating to its shareholder servicing and
distribution expenditures (except that Investor B share-holders may vote
on certain changes to the Investor A and Investor A1 distribution plan, as
applicable). Income, expenses (other than expenses attributable to a specific
class) and realized and unrealized gains and losses are allocated daily to
each class based on its relative net assets. The following is a summary of
significant accounting policies followed by the Bond Fund.
(a) Valuation of investments--Municipal bonds are traded primarily in the over-
the-counter ("OTC") markets and are valued at the last available bid price in
the OTC market or on the basis of values as obtained by a pricing service.
Pricing services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations are reviewed by the officers of the Bond Fund under the general
direction of the Board of Directors. Such valuations and procedures are
reviewed periodically by the Board of Directors of the Bond Fund. Financial
futures contracts and options thereon, which are traded on exchanges, are
valued at their closing prices as of the close of such exchanges. Options
written or purchased are valued at the last sale price in the case of exchange-
traded options. Options traded in the OTC market are valued at the last asked
price (options written) or the last bid price (options purchased). Swap
agreements are valued based upon quoted fair valuations received daily by the
Bond Fund from a pricing service. Effective April 2, 2007, short-term
investments are valued at amortized cost, which approximates market value.
Prior to April 2, 2007, portfolio securities with remaining maturities of
greater than sixty days, for which market quotations were readily available,
were valued at market value. As securities transitioned from sixty-one to
sixty days to maturity, the difference between the valuation existing on the
sixty-first day before maturity and maturity value was amortized on a straight-
line basis to maturity. Investments in open-end investment companies are
valued at their net asset value each business day. Securities and other assets
for which market quotations are not readily available are valued at fair value
as determined in good faith by or under the direction of the Board of
Directors of the Bond Fund.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued)
(b) Derivative financial instruments--The Funds may engage in various
portfolio investment strategies both to increase their returns and to hedge,
or protect, their exposure to interest rate movements and movements in the
securities markets. Losses may arise due to changes in the value of the
contract due to an unfavorable change in the price of the underlying security,
or index, or if the counterparty does not perform under the contract. The
counterparty for certain instruments may pledge cash or securities as
collateral.
* Financial futures contracts--The Funds 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 yields. Upon entering into a
contract, the Funds deposit and maintains as collateral such initial margin as
required by the exchange on which the transaction is effected. Pursuant to the
contract, the Funds agree to receive from or pay to the broker an amount of
cash equal to the daily fluctuation in value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Funds as
unrealized gains or losses. When the contract is closed, the Funds record a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
* Forward interest rate swaps--The Funds may enter into forward interest rate
swaps. In a forward interest rate swap, the Funds and the counterparty agree
to pay or receive interest on a specified notional contract amount, commencing
on a specified future effective date, unless terminated earlier. The value of
the agreement is determined by quoted fair values received daily by the Funds
from the counterparty. When the agreement is closed, the Funds record a
realized gain or loss in an amount equal to the value of the agreement.
* Swaps--Each Fund may enter into swap agreements, which are OTC contracts in
which each Fund and a counterparty agree to make periodic net payments on a
specified notional amount. The net payments can be made for a set period of
time or may be triggered by a pre-determined credit event. The net periodic
payments may be based on a fixed or variable interest rate; the change in
market value of a specified security, basket of securities or index; or the
return generated by a security. These periodic payments received or made by
each 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). Risks
include changes in the returns of the underlying instruments, failure of the
counterparties to perform under the contracts' terms and the possible lack of
liquidity with respect to the swap agreements.
(c) Municipal bonds held in trust--The BlackRock Municipal Insured Fund and
BlackRock National Municipal Fund invest in leveraged residual certificates
("TOB Residuals") issued by tender option bond trusts ("TOBs"). A TOB is
established by a third party sponsor forming a special purpose entity, into
which a fund, or an agent on behalf of the fund, transfers municipal
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, which are generally issued to the fund which made the
transfer or to affiliates of the fund. Each of these Funds' transfers of the
municipal securities to a TOB do not qualify for sale treatment under
Statement of Financial Accounting Standards No. 140 "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities,"
therefore the municipal securities deposited into a TOB are presented in each
of these Funds' schedules of investments and the proceeds from the
transactions are reported as a liability for trust certificates of each of
these Funds. Interest income from the underlying security is recorded by these
Funds 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 a 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. The residual interests held by these Funds include the right of the
Funds (1) to cause the holders of a proportional share of floating rate
certificates to tender their certificates at par, and (2) to transfer a
corresponding share of the municipal securities from the TOB to the Funds. At
June 30, 2007, the aggregate value of the underlying municipal securities
transferred to TOBs and the related liability for trust certificates were:
Range of
Interest Underlying
Rates on Municipal
Liability for the Liability Bonds
Trust for Trust Transferred
Certificates Certificates to TOBs
BlackRock Municipal 3.77% -
Insured Fund $109,775,745 3.83% $219,405,078
BlackRock National 3.74% -
Municipal Fund $151,796,404 3.85% $306,597,108
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued)
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 Funds' investments in TOB Residuals likely will adversely affect the
Funds' investment income-net and distributions to shareholders. Fluctuations
in the market value of municipal securities deposited into the TOB may
adversely affect these Funds' net asset value per share.
While the Funds' investment policies and restrictions expressly permit
investments in inverse floating rate securities such as TOB Residuals, they
generally do not allow the Funds to borrow money for purposes of making
investments. The Funds' management believes that the Funds' restrictions on
borrowings do not apply to the secured borrowings deemed to have occurred for
accounting purposes.
(d) Income taxes--It is the Bond 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.
(e) Security transactions and investment income--Security transactions are
recorded on the dates the trans-actions 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 dates.
Interest income is recognized on the accrual basis. The Funds amortize all
premiums and discounts on debt securities.
(f) Prepaid registration fees--Prepaid registration fees are charged to
expense as the related shares are issued.
(g) Dividends and distributions--Dividends from net investment income are
declared daily and paid monthly. Distributions of capital gains are recorded
on the ex-dividend dates.
(h) Expenses--Certain expenses have been allocated to the individual Funds in
the Bond Fund on a pro rata basis based upon the respective aggregate net
asset value of each Fund included in the Bond Fund.
(i) Insurance--BlackRock Municipal Insured Fund: Where bonds in the Fund have
not been insured pursuant to policies obtained by the issuer, the Fund has
obtained insurance with respect to the payment of interest and
principal of each bond. Such insurance is valid as long as the bonds are held
by the Fund.
(j) Offering costs--BlackRock Municipal High Yield Fund: Offering costs are
amortized over a 12-month period beginning with the commencement of operations
of the Fund.
(k) Recent accounting pronouncements--In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No.
109." 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 mutual funds, before
being measured and recognized in the financial statements. Adoption of FIN 48
is required for the last net asset value calculation in the first required
financial statement reporting period for fiscal years beginning after December
15, 2006. The impact on the Funds' financial statements, if any, is currently
being assessed.
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. Management is currently evaluating the implication of FAS 157.
At this time, its impact on the Funds' financial statements has not been
determined.
In addition, in February 2007, Statement of Financial Accounting Standard
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. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also
elects to apply the provisions of FAS 157. 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. At this time, management is
evaluating the implications of FAS 159 and its impact on the Funds' financial
statements, if any, has not been determined.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued)
(l) Reclassifications--U.S. generally accepted accounting principles require
that certain components of net assets be adjusted to reflect permanent
differences between financial and tax reporting. Accordingly, the current
year's permanent book/tax differences have been reclassified as follows:
BlackRock Municipal Insured Fund
$157 has been reclassified between paid-in capital in excess of par and
accumulated net realized capital losses and $201 was reclassified between
undistributed net investment income and accumulated net realized capital
losses as a result of permanent differences attributable to distributions paid
in excess of taxable income and amortization methods on fixed income
securities. These reclassifications have no effect on net assets or net asset
values per share.
BlackRock National Municipal Fund
$11,890,944 has been reclassified between paid-in capital in excess of par and
accumulated realized net capital losses as a result of a permanent difference
attributable to expired capital loss carryforwards. This reclassification has
no effect on net assets or net asset values per share.
BlackRock High Yield Municipal Fund
$103,720 has been reclassified between paid-in capital in excess of par and
undistributed net investment income as a result of permanent differences
attributable to non-deductible expenses. This reclassification has no effect
on net assets or net asset values per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
On September 29, 2006, BlackRock, Inc. and Merrill Lynch & Co., Inc. ("Merrill
Lynch") combined Merrill Lynch's investment management business, Merrill Lynch
Investment Managers, L.P. ("MLIM"), and its affiliates, including FAM, with
BlackRock, Inc. to create a new independent company. Merrill Lynch has a 49.8%
economic interest and a 45% voting interest in the combined company and The
PNC Financial Services Group, Inc. ("PNC") has approximately a 34% economic
and voting interest. The new company operates under the BlackRock name and is
governed by a board of directors with a majority of independent members.
On August 15, 2006, shareholders of each of the Funds (other than BlackRock
High Yield Municipal Fund, which was approved by FAM as the sole shareholder
on July 7, 2007), approved a new Investment Advisory Agreement with BlackRock
Advisors, Inc., an indirect, wholly owned subsidiary of BlackRock, Inc.
BlackRock Advisors, Inc. was reorganized into a limited liability company and
renamed BlackRock Advisors, LLC (the "Manager"). The new Investment Advisory
Agreement between each Fund and the Manager became effective on September 29,
2006 and was revised on October 27, 2006 (except for BlackRock High Yield
Municipal Fund). Prior to September 29, 2006, FAM was the Funds' manager. The
general partner of FAM is an indirect, wholly owned subsidiary of Merrill
Lynch, which is the limited partner. The Funds have also entered into separate
Distribution Agreements and Distribution Plans with FAM Distributors, Inc.
("FAMD") and BlackRock Distributors, Inc. and its affiliates ("BDI")
(collectively, the "Distributor"). FAMD is a wholly owned subsidiary of
Merrill Lynch Group, Inc. and BDI is an affiliate of BlackRock, Inc.
The Manager is responsible for the management of each Fund's portfolios and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operation of the Bond Fund. For such services, the
Manager receives at the end of each month a fee with respect to each Fund at
the annual rates set forth below which are based upon the average daily value
of the Fund's net assets.
Rate of Advisory Fee
BlackRock BlackRock BlackRock
Aggregate of Average Short-Term Municipal National
Daily Net Assets of the Municipal Insured Municipal
Three Combined Funds Fund Fund Fund
Not exceeding $250 million .40 % .40 % .50 %
In excess of $250 million but
not exceeding $400 million .375% .375% .475%
In excess of $400 million but
not exceeding $550 million .35 % .375% .475%
In excess of $550 million but
not exceeding $1.5 billion .325% .375% .475%
In excess of $1.5 billion .325% .35 % .475%
For the period September 29, 2006 to October 27, 2006, a different and lower
fee schedule was in effect for BlackRock Municipal Insured Fund and BlackRock
National Municipal Fund.
The BlackRock High Yield Municipal Fund's rates are as follows: .55% of the
Fund's average daily net assets not exceeding $250 million; .525% of average
daily net assets in excess of $250 million but not exceeding $500 million; and
..50% of average daily net assets in excess of $500 million. In addition, for
the BlackRock High Yield Municipal Fund, the Manager has voluntarily agreed to
waive a portion of the management fee. The amount of waiver is determined
monthly and can be discontinued at any time. For the period August 1, 2006 to
June 30, 2007, the amount of the management fee the Fund paid ranged from .20%
to .35% of average daily net assets. For the period August 1, 2006 to
September 29, 2006, FAM earned fees of $31,960, of which $26,149 was waived.
For the period September 30, 2006 to June 30, 2007, the Manager earned fees of
$235,082, of which $132,929 was waived.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued)
For the BlackRock Short-Term Municipal Fund effective October 16, 2006, the
Manager has contractually agreed to waive expenses in order to limit expenses
as a percentage of average daily net assets allocated to each class as
follows: .35% for BlackRock Shares, .45% for Institutional Shares and .80% for
Investor A Shares, until February 1, 2007. In addition to this contractual
waiver, the Manager has voluntarily agreed to waive fees or expenses in order
to limit expenses as follows: .35% for Institutional Shares, .60% for Investor
A Shares, .45% for Investor A1 Shares, .70% for Investor B Shares and 1.35%
for Investor C Shares. For the year ended June 30, 2007, the Manager earned
fees of $1,026,166, of which $281,131 was waived.
In addition, the Manager has entered into sub-advisory agreements with
BlackRock Investment Management, LLC ("BIM"), an affiliate of the Manager,
under which the Manager pays the Sub-Adviser for services it provides to each
Fund, a monthly fee that is a percentage of the management fee paid by each
Fund to the Manager.
The Manager (and previously FAM) has agreed to waive its advisory fee for each
Fund by the amount of advisory fee each Fund pays to the Manager (and
previously FAM) indirectly through each Fund's investment in the Merrill Lynch
Institutional Tax-Exempt Fund. For the year ended June 30, 2007, the waivers
were as follows:
For the Period For the Period
July 1, 2006 to September 30, 2006
September 29, 2006 to June 30, 2007
Waived Waived by
by FAM* the Manager
BlackRock Short-Term
Municipal Fund $ 8,247 $ 10,212
BlackRock Municipal
Insured Fund $ 3,580 $ 13,998
BlackRock National
Municipal Fund $ 20,279 $ 64,983
BlackRock High Yield
Municipal Fund $ 758 $ 2,866
* BlackRock High Yield Municipal Fund commenced operations on
August 1, 2006.
Pursuant to the Distribution Plans adopted by the Bond Fund on behalf of the
Funds in accordance with Rule 12b-1 under the Investment Company Act of 1940,
each Fund pays the Distributor ongoing service and distribution fees. The fees
are accrued daily and paid monthly at annual rates based upon the average
daily net assets of the shares as follows:
Service Fees
BlackRock BlackRock BlackRock BlackRock
Short-Term Municipal National High Yield
Municipal Insured Municipal Municipal
Fund Fund Fund Fund
Investor A .25% .25% .25% .25%
Investor A1 .10% -- -- --
Investor B .15% .25% .25% --
Investor C .25% .25% .25% .25%
Investor C1 -- .25% .25% --
Distribution Fees
BlackRock BlackRock BlackRock BlackRock
Short-Term Municipal National High Yield
Municipal Insured Municipal Municipal
Fund Fund Fund Fund
Investor B .20% .50% .50% --
Investor C .75% .75% .75% .75%
Investor C1 -- .55% .55% --
Pursuant to sub-agreements with each Distributor, broker-dealers, including
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a wholly owned
subsidiary of Merrill Lynch, provide shareholder servicing and distribution
services to the Bond Fund. The ongoing service fee compensates the Distributor
and each broker-dealer (including MLPF&S) for providing shareholder servicing
to Investor A, Investor A1, Investor B, Investor C and Investor C1
shareholders. The ongoing distribution fee compensates each Distributor and
the broker-dealers for providing shareholder and distribution-related services
to Investor B, Investor C and Investor C1 shareholders.
For the year ended June 30, 2007, FAMD, the Fund's sole Distributor until
September 29, 2006, and BDI earned underwriting discounts and direct
commissions and MLPF&S earned dealer concessions on sales of the Fund's
Institutional, Investor A and Investor A1 Shares as follows:
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued)
BlackRock BlackRock BlackRock BlackRock
Short-Term Municipal National High Yield
Municipal Insured Municipal Municipal
Fund Fund Fund Fund
Institutional Shares:
FAMD -- $ 750 $ 337 --
MLPF&S -- $ 750 $ 337 --
Investor A Shares:
FAMD $1,073 $ 6,909 $ 40,470 $ 2,424
MLPF&S $8,240 $75,664 $437,598 $25,546
BDI -- $ 2,154 $ 740 --
Investor A1 Shares:
FAMD $ 217 -- -- --
MLPF&S $3,200 -- -- --
For the year ended June 30, 2007, MLPF&S received contingent deferred sales
charges relating to Investor B, Investor C and Investor C1 Shares as follows:
Investor B Investor C Investor C1
BlackRock Short-Term
Municipal Fund $10,823 $ 305 --
BlackRock Municipal
Insured Fund $35,903 $ 111 $ 955
BlackRock National
Municipal Fund $50,965 $9,259 $17,026
BlackRock High Yield
Municipal Fund -- $ 641 --
In addition, BDI received contingent deferred sales charges relating
to Investor B and Investor C1 Shares as follows:
Investor B Investor C1
BlackRock Municipal
Insured Fund -- $ 661
BlackRock National
Municipal Fund $5 --
Furthermore, MLPF&S received contingent deferred sales charges
relating to transactions subject to front-end sales charge waivers as
follows:
Investor A Investor A1
BlackRock Short-Term
Municipal Fund -- $3,722
BlackRock Municipal
Insured Fund $ 740 --
BlackRock National
Municipal Fund $17,107 --
BlackRock High Yield
Municipal Fund $ 875 --
The Manager maintains a call center, which is responsible for providing
certain shareholder services to the Bond Fund, such as responding to
shareholder inquiries and processing transactions based upon instructions from
shareholders with respect to the subscription and redemption of fund shares.
During the period September 30, 2006 to June 30, 2007, the following amounts
have been accrued by each Fund to reimburse the Manager for costs incurred
running the call center, which are a component of the transfer agent fees in
the accompanying Statements of Operations.
Call Center Fees
BlackRock BlackRock BlackRock BlackRock
Short-Term Municipal National High Yield
Municipal Insured Municipal Municipal
Fund Fund Fund Fund
Institutional $ 1,895 $12,542 $36,268 $12,959
Investor A -- $ 2,514 $ 3,852 $ 773
Investor A1 $ 1,021 -- -- --
Investor B $ 322 $ 1,160 $ 2,266 --
Investor C -- -- -- $ 819
Investor C1 -- $ 789 $ 1,840 --
For the year ended June 30, 2007, each Fund reimbursed FAM and the Manager for
certain accounting services. The reimbursements were as follows:
For the Period For the Period
July 1, 2006 September 30, 2006
to September 29, to June 30,
2006 Reimbursed 2007 Reimbursed
to FAM* to the Manager
BlackRock Short-Term
Municipal Fund $1,722 $ 4,304
BlackRock Municipal
Insured Fund $5,362 $13,108
BlackRock National
Municipal Fund $8,749 $22,558
BlackRock High Yield
Municipal Fund $ 169 $ 811
* BlackRock High Yield Municipal Fund commenced operations on
August 1, 2006.
Effective September 29, 2006, PFPC Inc., an indirect, wholly owned subsidiary
of PNC and an affiliate of the Manager, became each Fund's transfer agent.
Prior to September 29, 2006, each Fund's transfer agent was Financial Data
Services, Inc. ("FDS"), a wholly owned subsidiary of Merrill Lynch.
Prior to September 29, 2006, certain officers and/or directors of the Bond
Fund were officers and/or directors of MLIM, FAM, FAMD, FDS, Merrill Lynch,
and/or MLIM, LLC.
Commencing September 29, 2006, certain officers and/or directors of the Bond
Fund are officers and/or directors of BlackRock, Inc. or its affiliates.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued)
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended June 30, 2007 were as follows:
Purchases Sales
BlackRock Short-Term
Municipal Fund $285,719,979 $327,640,415
BlackRock Municipal
Insured Fund $364,487,540 $409,119,250
BlackRock National
Municipal Fund $882,412,150 $757,408,261
BlackRock High Yield
Municipal Fund $ 77,254,912 $ 8,375,064
4. Capital Share Transactions:
Net increase (decrease) in net assets derived from capital share transactions
for the years ended June 30, 2007 and June 30, 2006 were as follows:
For the Year For the Year
Ended June 30, Ended June 30,
2007* 2006
BlackRock Short-Term
Municipal Fund $ (62,634,810) $(118,737,525)
BlackRock Municipal
Insured Fund $ (60,444,977) $ (66,044,701)
BlackRock National
Municipal Fund $ 159,104,907 $ 46,489,740
BlackRock High Yield
Municipal Fund $ 73,526,873 --
* BlackRock High Yield Municipal Fund commenced operations on
August 1, 2006.
Transactions in capital shares for each class were as follows:
BlackRock Short-Term Municipal Fund
BlackRock Shares for the
Period October 2, 2006* Dollar
to June 30, 2007 Shares Amount
Shares sold 2,874 $ 28,519
Shares issued resulting from
reorganization 1,094,165 10,856,031
Shares issued to shareholders in
reinvestment of dividends 13,277 131,697
-------------- ---------------
Total issued 1,110,316 11,016,247
Shares redeemed (861,862) (8,542,264)
-------------- ---------------
Net increase 248,454 $ 2,473,983
============== ===============
* Commencement of operations.
Institutional Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 2,062,719 $ 20,427,498
Shares issued resulting from
reorganization 721,266 7,153,239
Shares issued to shareholders in
reinvestment of dividends 247,581 2,449,491
-------------- ---------------
Total issued 3,031,566 30,030,228
Shares redeemed (4,877,444) (48,321,661)
-------------- ---------------
Net decrease (1,845,878) $ (18,291,433)
============== ===============
Institutional Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 1,502,926 $ 14,921,923
Shares issued to shareholders in
reinvestment of dividends 260,966 2,590,922
-------------- ---------------
Total issued 1,763,892 17,512,845
Shares redeemed (5,351,695) (53,153,601)
-------------- ---------------
Net decrease (3,587,803) $ (35,640,756)
============== ===============
Investor A Shares for the
Period October 2, 2006* Dollar
to June 30, 2007 Shares Amount
Shares sold 185,469 $ 1,838,827
Shares issued resulting from
reorganization 2,042 20,254
Shares issued to shareholders in
reinvestment of dividends 1,586 15,703
-------------- ---------------
Total issued 189,097 1,874,784
Shares redeemed (41,774) (414,043)
-------------- ---------------
Net increase 147,323 $ 1,460,741
============== ===============
* Commencement of operations.
Investor A1 Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 637,356 $ 6,322,744
Shares issued resulting from conversion
of Class C 6,091,469 60,465,669
Automatic conversion of shares 41,150 407,926
Shares issued to shareholders in
reinvestment of dividends 226,609 2,247,647
-------------- ---------------
Total issued 6,996,584 69,443,986
Shares redeemed (4,669,705) (46,309,628)
-------------- ---------------
Net increase 2,326,879 $ 23,134,358
============== ===============
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued)
Investor A1 Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 821,123 $ 8,169,499
Automatic conversion of shares 145,897 1,206,454
Shares issued to shareholders in
reinvestment of dividends 121,345 1,449,949
-------------- ---------------
Total issued 1,088,365 10,825,902
Shares redeemed (5,163,012) (51,318,356)
-------------- ---------------
Net decrease (4,074,647) $ (40,492,454)
============== ===============
Investor B Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 37,626 $ 372,718
Shares issued to shareholders in
reinvestment of dividends 33,215 329,149
-------------- ---------------
Total issued 70,841 701,867
-------------- ---------------
Automatic conversion of shares (41,162) (407,926)
Shares redeemed (979,358) (9,708,676)
-------------- ---------------
Total redeemed (1,020,520) (10,116,602)
-------------- ---------------
Net decrease (949,679) $ (9,414,735)
============== ===============
Investor B Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 38,884 $ 386,427
Shares issued to shareholders in
reinvestment of dividends 44,426 441,220
-------------- ---------------
Total issued 83,310 827,647
-------------- ---------------
Automatic conversion of shares (121,450) (1,206,454)
Shares redeemed (1,415,324) (14,064,507)
-------------- ---------------
Total redeemed (1,536,774) (15,270,961)
-------------- ---------------
Net decrease (1,453,464) $ (14,443,314)
============== ===============
Investor C Shares for the
Period October 2, 2006* Dollar
to June 30, 2007 Shares Amount
Shares sold 231,602 $ 2,295,349
Shares issued to shareholders in
reinvestment of dividends 1,443 14,283
-------------- ---------------
Total issued 233,045 2,309,632
Shares redeemed (22,138) (219,427)
-------------- ---------------
Net increase 210,907 $ 2,090,205
============== ===============
* Commencement of operations.
Class C Shares for the
Period July 1, 2006 Dollar
to August 25, 2006* Shares Amount
Shares sold 62,189 $ 613,069
Shares issued to shareholders in
reinvestment of dividends 18,853 185,978
-------------- ---------------
Total issued 81,042 799,047
-------------- ---------------
Shares redeemed (448,474) (4,421,307)
Shares redeemed resulting from conversion
to Investor A1 (6,122,405) (60,465,669)
-------------- ---------------
Total redeemed (6,570,879) (64,886,976)
-------------- ---------------
Net decrease (6,489,837) $ (64,087,929)
============== ===============
* On August 25, 2006, Class C was converted to Class A
(Investor A1).
Class C Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 611,352 $ 6,048,208
Shares issued to shareholders in
reinvestment of dividends 115,698 1,143,935
-------------- ---------------
Total issued 727,050 7,192,143
Shares redeemed (3,572,643) (35,353,144)
-------------- ---------------
Net decrease (2,845,593) $ (28,161,001)
============== ===============
BlackRock Municipal Insured Fund
Institutional Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 1,615,547 $ 12,595,757
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,793,351 14,025,199
-------------- ---------------
Total issued 3,408,898 26,620,956
Shares redeemed (7,836,614) (61,267,411)
-------------- ---------------
Net decrease (4,427,716) $ (34,646,455)
============== ===============
Institutional Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 1,459,336 $ 11,434,123
Shares issued to shareholders in
reinvestment of dividends and
distributions 1,775,119 13,924,940
-------------- ---------------
Total issued 3,234,455 25,359,063
Shares redeemed (8,382,862) (65,699,941)
-------------- ---------------
Net decrease (5,148,407) $ (40,340,878)
============== ===============
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued)
Investor A Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 2,509,751 $ 19,609,272
Automatic conversion of shares 200,919 1,560,842
Shares issued to shareholders in
reinvestment of dividends and
distributions 511,923 4,001,861
-------------- ---------------
Total issued 3,222,593 25,171,975
Shares redeemed (3,167,212) (24,734,287)
-------------- ---------------
Net increase 55,381 $ 437,688
============== ===============
Investor A Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 1,348,298 $ 10,584,431
Automatic conversion of shares 981,047 7,688,689
Shares issued to shareholders in
reinvestment of dividends and
distributions 509,243 3,992,856
-------------- ---------------
Total issued 2,838,588 22,265,976
Shares redeemed (3,222,764) (25,174,807)
-------------- ---------------
Net decrease (384,176) $ (2,908,831)
============== ===============
Investor B Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 70,027 $ 547,519
Shares issued to shareholders in
reinvestment of dividends and
distributions 127,963 1,000,612
-------------- ---------------
Total issued 197,990 1,548,131
-------------- ---------------
Automatic conversion of shares (200,919) (1,560,842)
Shares redeemed (2,714,992) (21,186,228)
-------------- ---------------
Total redeemed (2,915,911) (22,747,070)
-------------- ---------------
Net decrease (2,717,921) $ (21,198,939)
============== ===============
Investor B Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 236,379 $ 1,852,684
Shares issued to shareholders in
reinvestment of dividends and
distributions 174,687 1,370,101
-------------- ---------------
Total issued 411,066 3,222,785
-------------- ---------------
Automatic conversion of shares (981,283) (7,688,689)
Shares redeemed (2,200,222) (17,243,259)
-------------- ---------------
Total redeemed (3,181,505) (24,931,948)
-------------- ---------------
Net decrease (2,770,439) $ (21,709,163)
============== ===============
Investor C Shares for the
Period October 2, 2006* to Dollar
June 30, 2007 Shares Amount
Shares sold 595,100 $ 4,659,402
Shares issued to shareholders in
reinvestment of dividends and
distributions 4,158 32,362
-------------- ---------------
Total issued 599,258 4,691,764
Shares redeemed (7,785) (61,282)
-------------- ---------------
Net increase 591,473 $ 4,630,482
============== ===============
* Commencement of operations.
Investor C1 Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 252,508 $ 1,971,349
Shares issued to shareholders in
reinvestment of dividends and
distributions 150,681 1,178,188
-------------- ---------------
Total issued 403,189 3,149,537
Shares redeemed (1,641,491) (12,817,290)
-------------- ---------------
Net decrease (1,238,302) $ (9,667,753)
============== ===============
Investor C1 Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 1,343,228 $ 10,538,215
Shares issued to shareholders in
reinvestment of dividends and
distributions 162,002 1,270,193
-------------- ---------------
Total issued 1,505,230 11,808,408
Shares redeemed (1,646,563) (12,894,237)
-------------- ---------------
Net decrease (141,333) $ (1,085,829)
============== ===============
BlackRock National Municipal Fund
Institutional Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 13,585,783 $ 142,980,852
Shares issued to shareholders in
reinvestment of dividends 2,842,429 29,937,810
-------------- ---------------
Total issued 16,428,212 172,918,662
Shares redeemed (8,439,693) (88,795,553)
-------------- ---------------
Net increase 7,988,519 $ 84,123,109
============== ===============
Institutional Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 5,928,015 $ 62,151,396
Shares issued to shareholders in
reinvestment of dividends 2,713,665 28,501,117
-------------- ---------------
Total issued 8,641,680 90,652,513
Shares redeemed (7,929,485) (83,222,555)
-------------- ---------------
Net increase 712,195 $ 7,429,958
============== ===============
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued)
Investor A Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 10,184,912 $ 107,187,461
Automatic conversion of shares 262,676 2,748,322
Shares issued to shareholders in
reinvestment of dividends 716,831 7,552,056
-------------- ---------------
Total issued 11,164,419 117,487,839
Shares redeemed (4,936,616) (51,956,483)
-------------- ---------------
Net increase 6,227,803 $ 65,531,356
============== ===============
Investor A Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 5,809,040 $ 60,821,050
Automatic conversion of shares 1,794,525 18,842,536
Shares issued to shareholders in
reinvestment of dividends 547,471 5,750,522
-------------- ---------------
Total issued 8,151,036 85,414,108
Shares redeemed (4,046,647) (42,487,976)
-------------- ---------------
Net increase 4,104,389 $ 42,926,132
============== ===============
Investor B Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 638,307 $ 6,734,106
Shares issued to shareholders in
reinvestment of dividends 200,896 2,114,751
-------------- ---------------
Total issued 839,203 8,848,857
-------------- ---------------
Automatic conversion of shares (262,928) (2,748,322)
Shares redeemed (3,778,461) (39,770,275)
-------------- ---------------
Total redeemed (4,041,389) (42,518,597)
-------------- ---------------
Net decrease (3,202,186) $ (33,669,740)
============== ===============
Investor B Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 738,406 $ 7,749,159
Shares issued to shareholders in
reinvestment of dividends 254,982 2,677,936
-------------- ---------------
Total issued 993,388 10,427,095
-------------- ---------------
Automatic conversion of shares (1,796,012) (18,842,536)
Shares redeemed (2,903,855) (30,484,753)
-------------- ---------------
Total redeemed (4,699,867) (49,327,289)
-------------- ---------------
Net decrease (3,706,479) $ (38,900,194)
============== ===============
Investor C Shares for the
Period October 2, 2006* to Dollar
June 30, 2007 Shares Amount
Shares sold 4,176,661 $ 44,069,366
Shares issued to shareholders in
reinvestment of dividends 35,768 375,990
-------------- ---------------
Total issued 4,212,429 44,445,356
Shares redeemed (202,337) (2,132,581)
-------------- ---------------
Net increase 4,010,092 $ 42,312,775
============== ===============
* Commencement of operations.
Investor C1 Shares for the Year Dollar
Ended June 30, 2007 Shares Amount
Shares sold 2,120,136 $ 22,245,747
Shares issued to shareholders in
reinvestment of dividends 371,250 3,911,253
-------------- ---------------
Total issued 2,491,386 26,157,000
Shares redeemed (2,408,164) (25,349,593)
-------------- ---------------
Net increase 83,222 $ 807,407
============== ===============
Investor C1 Shares for the Year Dollar
Ended June 30, 2006 Shares Amount
Shares sold 4,865,773 $ 51,061,570
Shares issued to shareholders in
reinvestment of dividends 296,743 3,115,813
-------------- ---------------
Total issued 5,162,516 54,177,383
Shares redeemed (1,825,533) (19,143,539)
-------------- ---------------
Net increase 3,336,983 $ 35,033,844
============== ===============
BlackRock High Yield Municipal Fund
Institutional Shares for the
Period August 1, 2006* Dollar
to June 30, 2007 Shares Amount
Shares sold 6,785,278 $ 68,322,908
Shares issued to shareholders in
reinvestment of dividends and
distributions 2,198 22,293
-------------- ---------------
Total issued 6,787,476 68,345,201
Shares redeemed (518,933) (5,228,829)
-------------- ---------------
Net increase 6,268,543 $ 63,116,372
============== ===============
* Prior to August 1, 2006 (commencement of operations), the Fund
issued 25 shares to FAM for $250.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Notes to Financial Statements (continued)
Investor A Shares for the
Period August 1, 2006* Dollar
to June 30, 2007 Shares Amount
Shares sold 691,133 $ 6,961,080
Shares issued to shareholders in
reinvestment of dividends and
distributions 3,655 36,897
-------------- ---------------
Total issued 694,788 6,997,977
Shares redeemed (102,603) (1,035,823)
-------------- ---------------
Net increase 592,185 $ 5,962,154
============== ===============
* Prior to August 1, 2006 (commencement of operations), the Fund
issued 25 shares to FAM for $250.
Investor C Shares for the
Period August 1, 2006* to Dollar
June 30, 2007 Shares Amount
Shares sold 456,486 $ 4,621,438
Shares issued to shareholders in
reinvestment of dividends and
distributions 5,243 53,125
-------------- ---------------
Total issued 461,729 4,674,563
Shares redeemed (22,433) (226,216)
-------------- ---------------
Net increase 439,296 $ 4,448,347
============== ===============
* Prior to August 1, 2006 (commencement of operations), the Fund
issued 25 shares to FAM for $250.
5. Short-Term Borrowings:
The Bond Fund, on behalf of the Funds, along with certain other funds managed
by the Manager and its affiliates is a party to a $500,000,000 credit
agreement with a group of lenders, which expires November 2007. The Bond Fund
may borrow under the credit agreement to fund shareholder redemptions and for
other lawful purposes other than for leverage. The Bond Fund may borrow up to
the maximum amount allowable under the Bond Fund's current prospectus and
statement of additional information, subject to various other legal,
regulatory or contractual limits. The Bond Fund pays a commitment fee of .06%
per annum based on the Bond Fund's pro rata share of the unused portion of the
credit agreement. Amounts borrowed under the credit agreement bear interest at
a rate equal to, at each fund's election, the federal funds rate plus .35% or
a base rate as defined in the credit agreement. The Bond Fund did not borrow
under the credit agreement during the year ended June 30, 2007.
6. Distributions to Shareholders:
BlackRock Short-Term Municipal Fund
The tax character of distributions paid during the fiscal years
ended June 30, 2007 and June 30, 2006 was as follows:
6/30/2007 6/30/2006
Distributions paid from:
Tax-exempt income $ 9,759,232 $ 9,982,026
-------------- ---------------
Total distributions $ 9,759,232 $ 9,982,026
============== ===============
As of June 30, 2007, the components of accumulated losses on a tax
basis were as follows:
Undistributed tax-exempt income--net $ 484,004
Undistributed long-term capital gains--net --
---------------
Total undistributed earnings--net 484,004
Capital loss carryforward (9,187,219)*
Unrealized losses--net (847,300)**
---------------
Total accumulated losses--net $ (9,550,515)
===============
* On June 30, 2007, the Fund had a net capital loss carryforward of
$9,187,219, of which $119,413 expires in 2008, $426,094 expires
in 2009, $32,641 expires in 2011, $331,374 expires in 2012,
$1,178,808 expires in 2013, $4,110,940 expires in 2014 and
$2,987,949 expires in 2015. This amount will be available to offset
like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the deferral of post-October capital
losses for tax purposes.
BlackRock Municipal Insured Fund
The tax character of distributions paid during the fiscal years ended
June 30, 2007 and June 30, 2006 was as follows:
6/30/2007 6/30/2006
Distributions paid from:
Tax-exempt income $ 37,725,824 $ 42,519,947
Ordinary income 46,235 --
Net long-term capital gain 4,937,590 3,748,903
-------------- ---------------
Total distributions $ 42,709,649 $ 46,268,850
============== ===============
As of June 30, 2007, the components of accumulated earnings on a tax
basis were as follows:
Undistributed tax-exempt income--net $ 1,071,111
Undistributed long-term capital gains--net --
---------------
Total undistributed earnings--net 1,071,111
Capital loss carryforward --
Unrealized gains--net 24,677,624
---------------
Total accumulated earnings--net $ 25,748,735
===============
* The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, the deferral of post-October capital losses for tax purposes,
the tax deferral of losses on the difference between book and tax
amortization methods for premiums and discounts on fixed income
securities, the tax deferral of losses on straddles, and the difference
between book and tax treatment of residual interests in tender
option bond trusts.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Notes to Financial Statements (concluded)
BlackRock National Municipal Fund
The tax character of distributions paid during the fiscal years ended
June 30, 2007 and June 30, 2006 was as follows:
6/30/2007 6/30/2006
Distributions paid from:
Tax-exempt income $ 68,642,500 $ 67,143,031
-------------- ---------------
Total distributions $ 68,642,500 $ 67,143,031
============== ===============
As of June 30, 2007, the components of accumulated earnings on a tax
basis were as follows:
Undistributed tax-exempt income--net $ 914,699
Undistributed long-term capital gains--net --
---------------
Total undistributed earnings--net 914,699
Capital loss carryforward (26,847,836)*
Unrealized gains--net 37,031,021**
---------------
Total accumulated earnings--net $ 11,097,884
===============
* On June 30, 2007, the Fund had a net capital loss carryforward of
$26,847,836, of which $23,869,173 expires in 2009, $444,566
expires in 2010, $942,957 expires in 2011 and $1,591,140 expires
in 2012. This amount will be available to offset like amounts of any
future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the difference between book and
tax amortization methods for premiums and discounts on fixed
income securities, the tax deferral of losses on straddles and the
difference between the book and tax treatment of residual interests
in tender option bond trusts.
BlackRock High Yield Municipal Fund
The tax character of distributions paid during the period August 1, 2006
to June 30, 2007 was as follows:
For the Period
August 1, 2006++
to June 30, 2007
Distributions paid from:
Tax-exempt income $ 2,089,925
Ordinary income 10,305
---------------
Total distributions $ 2,100,230
===============
++ Commencement of operations.
As of June 30, 2007, the components of accumulated losses on a tax
basis were as follows:
Undistributed tax-exempt income--net $ 103,720
Undistributed ordinary income--net 130,480
Undistributed long-term capital gains--net 21,570
---------------
Total undistributed earnings--net 255,770
Capital loss carryforward --
Unrealized losses--net (945,506)
---------------
Total accumulated losses--net $ (689,736)
===============
As of June 30, 2007, there were no significant differences between the
book and tax components of net assets.
7. Acquisition of BlackRock UltraShort Municipal Portfolio, a portfolio
of BlackRock Funds:
On October 16, 2006, BlackRock Short-Term Municipal Fund of the Bond Fund
(the "Fund") acquired all of the net assets of BlackRock Ultra Short
Municipal Portfolio ("Ultra Short"), pursuant to a plan of reorganization.
The acquisition was accomplished by a tax-free exchange of 722,400 shares
of common stock of Ultra Short for 1,817,473 shares of the Fund. Ultra
Short's net assets on that date of $18,029,524, including $130,270 of
accumulated net realized losses and $28,132 of net unrealized depreciation
were combined with those of the Fund.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
of BlackRock Municipal Bond Fund, Inc.:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of BlackRock Short-Term Municipal Bond
Fund, BlackRock Municipal Insured Fund and BlackRock National Municipal Fund
(formerly Short-Term Portfolio, Insured Portfolio and National Portfolio,
respectively), three of the portfolios constituting BlackRock Municipal Bond
Fund, Inc. (the "Bond Fund") (formerly Merrill Lynch Municipal Bond Fund,
Inc.), as of June 30, 2007, and the related statements 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. We have also audited the accompanying
statement of assets and liabilities, including the schedule of investments, of
BlackRock High Yield Municipal Fund, one of the portfolios constituting the
Bond Fund, as of June 30, 2007, and the related statement of operations,
statement of changes in net assets and financial highlights for the period
August 1, 2006 (commencement of operations) through June 30, 2007. These
financial statements and financial highlights are the responsibility of the
Bond 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 Bond Fund is not required to have, nor were we
engaged to perform, an audit of their internal control over financial
reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Bond 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 June 30, 2007, by correspondence with
the custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. 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 respective financial
positions of BlackRock Short-Term Municipal Bond Fund, BlackRock Municipal
Insured Fund, and BlackRock National Municipal Fund, each a portfolio of
BlackRock Municipal Bond Fund, Inc., as of June 30, 2007, the results of their
operations for the year then ended, the changes in their net assets for each
of the two years in the period then ended, and their financial highlights for
each of the five years in the period then ended, and the financial position of
BlackRock High Yield Municipal Fund, one of the portfolios constituting
BlackRock Municipal Bond Fund, Inc., as of June 30, 2007, the results of its
operations, the changes in its net assets and its financial highlights for the
period August 1, 2006 through June 30, 2007, in conformity with accounting
principles generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
August 27, 2007
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Officers and Directors
Number of
Funds and
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name, Address & Age Fund Served Principal Occupation(s) During Past 5 Years Director Director
Interested Director
Robert C. Doll, Jr.* Fund 2005 to Vice Chairman and Director of BlackRock, Inc., 121 Funds None
P.O. Box 9011 President present Global Chief Investment Officer for Equities, 161 Portfolios
Princeton, and Chairman of the BlackRock Retail Operating
NJ 08543-9011 Director Committee, and member of the BlackRock
Age: 52 Executive Committee since 2006; President
of the funds advised by Merrill Lynch Investment
Managers, L.P. ("MLIM") and its affiliates
("MLIM/FAM-advised funds") from 2005 to
2006 and Chief Investment Officer thereof
from 2001 to 2006; President of MLIM and
Fund Asset Management, L.P. ("FAM") from
2001 to 2006; Co-Head (Americas Region)
thereof from 2000 to 2001 and Senior Vice
President from 1999 to 2001; President and
Director of Princeton Services, Inc. ("Princeton
Services") and President of Princeton
Administrators, L.P. ("Princeton Administrators")
from 2001 to 2006; Chief Investment Officer
of OppenheimerFunds, Inc. in 1999 and Executive
Vice President thereof from 1991 to 1999.
* Mr. Doll is a director, trustee or member of an advisory board of certain other
investment companies for which BlackRock Advisors, LLC and its affiliates act
as investment adviser. Mr. Doll is an "interested person," as defined in the
Investment Company Act, of the Fund based on his positions with BlackRock, Inc.
and its affiliates. Directors serve until their resignation, removal or death, or
until December 31 of the year in which they turn 72. As Fund President, Mr. Doll
serves at the pleasure of the Board of Directors.
Independent Directors*
Ronald W. Forbes** Director 1997 to Professor Emeritus of Finance, School of 46 Funds None
P.O. Box 9095 present Business, State University of New York at 48 Portfolios
Princeton, Albany since 2000 and Professor thereof
NJ 08543-9095 from 1989 to 2000; International Consultant,
Age: 66 Urban Institute, Washington D.C. from 1995
to 1999.
Cynthia A. Montgomery Director 1994 to Professor, Harvard Business School since 46 Funds Newell
P.O. Box 9095 present 1989; Associate Professor, J.L. Kellogg 48 Portfolios Rubbermaid, Inc.
Princeton, Graduate School of Management, Northwestern (manufacturing)
NJ 08543-9095 University from 1985 to 1989; Associate
Age: 54 Professor, Graduate School of Business
Administration, University of Michigan
from 1979 to 1985; Director, Harvard
Business School Publishing since 2005;
Director, McLean Hospital since 2005.
Jean Margo Reid Director 2004 to Self-employed consultant since 2001; 46 Funds None
P.O. Box 9095 present Counsel of Alliance Capital Management 48 Portfolios
Princeton, (investment adviser) in 2000; General
NJ 08543-9095 Counsel, Director and Secretary of Sanford
Age: 61 C. Bernstein & Co., Inc. (investment
adviser/broker-dealer) from 1997 to
2000; Secretary, Sanford C. Bernstein Fund,
Inc. from 1994 to 2000; Director and Secretary
of SCB, Inc. since 1998; Director and Secretary
of SCB Partners, Inc. since 2000; and Director
of Covenant House from 2001 to 2004.
* Directors serve until their resignation, removal or death, or until December 31
of the year in which they turn 72.
** Chairman of the Board of Directors and the Audit Committee.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Officers and Directors (concluded)
Number of
Funds and
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name, Address & Age Fund Served Principal Occupation(s) During Past 5 Years Director Director
Independent Directors* (concluded)
Roscoe S. Suddarth Director 2000 to President, Middle East Institute, from 46 Funds None
P.O. Box 9095 present 1995 to 2001; Foreign Service Officer, 48 Portfolios
Princeton, United States Foreign Service, from 1961
NJ 08543-9095 to 1995 and Career Minister from 1989 to
Age: 71 1995; Deputy Inspector General, U.S.
Department of State, from 1991 to 1994;
U.S. Ambassador to the Hashemite Kingdom
of Jordan from 1987 to 1990.
Richard R. West Director 1981 to Professor of Finance from 1984 to 1995, 46 Funds Bowne & Co.,
P.O. Box 9095 present Dean from 1984 to 1993 and since 1995 48 Portfolios Inc. (financial
Princeton, Dean Emeritus of New York University's printers);
NJ 08543-9095 Leonard N. Stern School of Business Vornado Realty
Age: 69 Administration. Trust (real
estate
company);
Alexander's, Inc.
(real estate
company)
* Directors serve until their resignation, removal or death, or until
December 31 of the year in which they turn 72.
Position(s) Length of
Held with Time
Name, Address & Age Fund Served Principal Occupation(s) During Past 5 Years
Fund Officers*
Donald C. Burke Vice 1993 to Managing Director of BlackRock, Inc. since 2006; Managing Director of Merrill
P.O. Box 9011 President present Lynch Investment Managers, L.P. ("MLIM") and Fund Asset Management, L.P. ("FAM")
Princeton, and and in 2006; First Vice President of MLIM and FAM from 1997 to 2005 and Treasurer
NJ 08543-9011 Treasurer 1999 to thereof from 1999 to 2006; Vice President of MLIM and FAM from 1990 to 1997.
Age: 47 present
Karen Clark Fund Chief 2007 to Managing Director of BlackRock, Inc. and Chief Compliance Officer of certain
P.O. Box 9011 Compliance present BlackRock-advised funds since 2007; Director of BlackRock, Inc. from 2005 to 2007;
Princeton, Officer Principal and Senior Compliance Officer, State Street Global Advisors, from 2001
NJ 08543-9011 to 2005; Principal Consultant, PricewaterhouseCoopers, LLP from 1998 to 2001;
Age: 42 and Branch Chief, Division of Investment Management and Office of Compliance
Inspections and Examinations, U.S. Securities and Exchange Commission, from 1993
to 1998.
Alice A. Pellegrino Secretary 2004 to Director of BlackRock, Inc. since 2006; Director (Legal Advisory) of MLIM from
P.O. Box 9011 present 2002 to 2006; Vice President of MLIM from 1999 to 2002; Attorney associated with
Princeton, MLIM from 1997 to 1999; Secretary of MLIM, FAM, FAM Distributors, Inc. and
NJ 08543-9011 Princeton Services from 2004 to 2006.
Age: 47
* Officers of the Fund serve at the pleasure of the Board of Directors.
Further information about the Fund's Officers and Directors is available in
the Fund's Statement of Additional Information, which can be obtained without
charge by calling 1-800-441-7762.
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent
PFPC Inc.
Wilmington, DE 19809
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
BlackRock Funds
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 Web sites.
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.
Availability of Additional Information
Electronic copies of most financial reports and prospectuses are available on
the Bond Fund's Web site or shareholders can sign up for e-mail notifications
of quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Bond Fund's electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment
advisers, banks or brokerages may offer this service.
Shareholders Who Hold Accounts Directly with BlackRock:
1) Access the BlackRock Web site at
http://www.blackrock.com/edelivery
2) Select eDelivery under the More Information section
3) Log into your account
The Bond Fund will mail only one copy of shareholder documents, including
prospectuses, 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 Bond Fund
at (800) 441-7762.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
BlackRock Funds (concluded)
Availability of Additional Information (concluded)
Availability of Proxy Voting Policies and Procedures
The Bond Fund has delegated proxy voting responsibilities to BlackRock and
its affiliates, subject to the general oversight of the Bond Fund's Board of
Directors. A description of the policies and procedures that BlackRock and
its affiliates use to determine how to vote proxies relating to portfolio
securities is available without charge, upon request, on our Web site at
www.blackrock.com, by calling (800) 441-7762, or on the Web site of the
Securities and Exchange Commission (the "Commission") at http://www.sec.gov.
Availability of Proxy Voting Record
Information on how proxies relating to the Bond Fund's voting securities were
voted (if any) by BlackRock during the most recent 12-month period ended
June 30 is available, upon request and without charge, on our Web site at
www.blackrock.com, by calling (800) 441-7762 or on the Web site of the
Commission at http://www.sec.gov.
Availability of Quarterly Portfolio Schedule
The Bond Fund files its complete schedule of portfolio holdings for the
first and third quarters of its fiscal year with the Commission on Form
N-Q. The Fund's Forms N-Q are avail-able on the Commission's Web site at
http://www.sec.gov and may be reviewed and copied at the Commission's
Public Reference Room in Washington, D.C. Information regarding the
operation of the Public Reference Room may be obtained by calling
(800) SEC-0330. The Bond Fund's Forms N-Q may also be obtained upon
request, without charge, by calling (800) 441-7762.
Shareholder Privileges
Account Information
Call us at (800) 441-7762 8:00 AM - 6:00 PM EST to get information about your
account balances, recent transactions and share prices. You can also reach us
on the Web at www.blackrock.com.
Automatic Investment Plans
Investor Class shareholders who want to invest regularly can arrange to have
$50 or more automatically deducted from their checking or savings account and
invested in any of the BlackRock funds.
Systematic Withdrawal Plans
Investor Class shareholders can establish a systematic withdrawal plan and
receive periodic payments of $50 or more from their BlackRock funds, as long
as their account is at least $10,000.
Retirement Plans
Shareholders may make investments in conjunction with Traditional, Rollover,
Roth, Coverdell, Simple IRAs, SEP IRAs and 403(b) Plans.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
A World-Class Mutual Fund Family
BlackRock offers a diverse lineup of open-end mutual funds crossing all
investment styles and managed by experts in equity, fixed income and
tax-exempt investing.
Equity Funds
BlackRock All-Cap Global Resources Portfolio
BlackRock Aurora Portfolio
BlackRock Asset Allocation Portfolio++
BlackRock Balanced Capital Fund++
BlackRock Basic Value Fund
BlackRock Capital Appreciation Portfolio
BlackRock Developing Capital Markets Fund
BlackRock Equity Dividend Fund
BlackRock EuroFund
BlackRock Focus Twenty Fund
BlackRock Focus Value Fund
BlackRock Fundamental Growth Fund
BlackRock Global Allocation Fund++
BlackRock Global Dynamic Equity Fund
BlackRock Global Financial Services Fund
BlackRock Global Growth Fund
BlackRock Global Opportunities Portfolio
BlackRock Global Resources Portfolio*
BlackRock Global Science & Technology
Opportunities Portfolio
BlackRock Global SmallCap Fund
BlackRock Healthcare Fund
BlackRock Health Sciences Opportunities Portfolio
BlackRock Index Equity Portfolio*
BlackRock International Fund
BlackRock International Index Fund
BlackRock International Opportunities Portfolio*
BlackRock International Value Fund
BlackRock Investment Trust
BlackRock Large Cap Core Fund
BlackRock Large Cap Growth Fund
BlackRock Large Cap Value Fund
BlackRock Latin America Fund
BlackRock Mid-Cap Growth Equity Portfolio
BlackRock Mid-Cap Value Equity Portfolio
BlackRock Mid Cap Value Opportunities Fund
BlackRock Natural Resources Trust
BlackRock Pacific Fund
BlackRock Small Cap Core Equity Portfolio
BlackRock Small Cap Growth Equity Portfolio
BlackRock Small Cap Growth Fund II
BlackRock Small Cap Index Fund
BlackRock Small Cap Value Equity Portfolio*
BlackRock Small/Mid-Cap Growth Portfolio
BlackRock S&P 500 Index Fund
BlackRock Technology Fund
BlackRock U.S. Opportunities Portfolio
BlackRock Utilities and Telecommunications Fund
BlackRock Value Opportunities Fund
Fixed Income Funds
BlackRock Bond Fund
BlackRock Commodity Strategies Fund
BlackRock Enhanced Income Portfolio
BlackRock GNMA Portfolio
BlackRock Government Income Portfolio
BlackRock High Income Fund
BlackRock High Yield Bond Portfolio
BlackRock Inflation Protected Bond Portfolio
BlackRock Intermediate Bond Portfolio II
BlackRock Intermediate Government
Bond Portfolio
BlackRock International Bond Portfolio
BlackRock Low Duration Bond Portfolio
BlackRock Managed Income Portfolio
BlackRock Short-Term Bond Fund
BlackRock Total Return Portfolio
BlackRock Total Return Portfolio II
BlackRock World Income Fund
Municipal Bond Funds
BlackRock AMT-Free Municipal Bond Portfolio
BlackRock California Insured Municipal Bond Fund
BlackRock Delaware Municipal Bond Portfolio
BlackRock Florida Municipal Bond Fund
BlackRock High Yield Municipal Fund
BlackRock Intermediate Municipal Fund
BlackRock Kentucky Municipal Bond Portfolio
BlackRock Municipal Insured Fund
BlackRock National Municipal Fund
BlackRock New Jersey Municipal Bond Fund
BlackRock New York Municipal Bond Fund
BlackRock Ohio Municipal Bond Portfolio
BlackRock Pennsylvania Municipal Bond Fund
BlackRock Short-Term Municipal Fund
Target Risk & Target Date Funds
BlackRock Prepared Portfolios
Conservative Prepared Portfolio
Moderate Prepared Portfolio
Growth Prepared Portfolio
Aggressive Growth Prepared Portfolio
BlackRock Lifecycle Prepared Portfolios
Prepared Portfolio 2010
Prepared Portfolio 2015
Prepared Portfolio 2020
Prepared Portfolio 2025
Prepared Portfolio 2030
Prepared Portfolio 2035
Prepared Portfolio 2040
Prepared Portfolio 2045
Prepared Portfolio 2050
* See the prospectus for information on specific limitations on investments
in the fund.
++ Mixed asset fund.
BlackRock mutual funds are distributed by BlackRock Distributors, Inc. and
certain funds are also distributed by FAM Distributors, Inc. You should
consider the investment objectives, risks, charges and expenses of the funds
under consideration carefully before investing. Each fund's prospectus
contains this and other information and is available at www.blackrock.com or
by calling 800-882-0052 or from your financial advisor. The prospectus should
be read carefully before investing.
BLACKROCK MUNICIPAL BOND FUND, INC. JUNE 30, 2007
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of
the end of the period covered by this report, that applies to the
registrant's principal executive officer, principal financial
officer and principal accounting officer, or persons performing
similar functions. 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 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: (1)
Ronald W. Forbes, (2) Richard R. West, and (3) Edward D. Zinbarg
(retired as of December 31, 2006).
Item 4 - Principal Accountant Fees and Services
BlackRock Municipal Insured Fund
(a) Audit Fees - Fiscal Year Ended June 30, 2007 - $56,450
Fiscal Year Ended June 30, 2006 - $31,600
(b) Audit-Related Fees - Fiscal Year Ended June 30, 2007 - $0
Fiscal Year Ended June 30, 2006 - $0
(c) Tax Fees - Fiscal Year Ended June 30, 2007 - $6,100
Fiscal Year Ended June 30, 2006 - $6,000
The nature of the services include tax compliance, tax advice and
tax planning.
(d) All Other Fees - Fiscal Year Ended June 30, 2007 - $0
Fiscal Year Ended June 30, 2006 - $0
BlackRock National Municipal Fund
(a) Audit Fees - Fiscal Year Ended June 30, 2007 - $56,450
Fiscal Year Ended June 30, 2006 - $31,600
(b) Audit-Related Fees - Fiscal Year Ended June 30, 2007 - $0
Fiscal Year Ended June 30, 2006 - $0
(c) Tax Fees - Fiscal Year Ended June 30, 2007 - $6,100
Fiscal Year Ended June 30, 2006 - $6,000
The nature of the services include tax compliance, tax advice and
tax planning.
(d) All Other Fees - Fiscal Year Ended June 30, 2007 - $0
Fiscal Year Ended June 30, 2006 - $0
BlackRock Short-Term Municipal Fund
(a) Audit Fees - Fiscal Year Ended June 30, 2007 - $27,500
Fiscal Year Ended June 30, 2006 - $27,500
(b) Audit-Related Fees - Fiscal Year Ended June 30, 2007 - $0
Fiscal Year Ended June 30, 2006 - $15,400
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.
(c) Tax Fees - Fiscal Year Ended June 30, 2007 - $6,100
Fiscal Year Ended June 30, 2006 - $6,000
The nature of the services include tax compliance, tax advice and
tax planning.
(d) All Other Fees - Fiscal Year Ended June 30, 2007 - $0
Fiscal Year Ended June 30, 2006 - $0
BlackRock High Yield Municipal Fund
(a) Audit Fees - Fiscal Year Ended June 30, 2007 - $37,600
Fiscal Year Ended June 30, 2006 - N/A
(b) Audit-Related Fees - Fiscal Year Ended June 30, 2007 - $0
Fiscal Year Ended June 30, 2006 - N/A
(c) Tax Fees - Fiscal Year Ended June 30, 2007 - $6,100
Fiscal Year Ended June 30, 2006 - N/A
The nature of the services include tax compliance, tax advice and
tax planning.
(d) All Other Fees - Fiscal Year Ended June 30, 2007 - $0
Fiscal Year Ended June 30, 2006 - N/A
(e)(1) 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"). However, such services will only be
deemed pre-approved provided that any individual project does not
exceed $5,000 attributable to the registrant or $50,000 for all of
the registrants the Committee oversees. 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.
(e)(2) 0%
(f) Not Applicable
(g) BlackRock Municipal Insured Fund
Fiscal Year Ended June 30, 2007 - $2,967,000
Fiscal Year Ended June 30, 2006 - $2,815,800
BlackRock National Municipal Fund
Fiscal Year Ended June 30, 2007 - $2,967,000
Fiscal Year Ended June 30, 2006 - $2,815,800
BlackRock Short-Term Municipal Fund
Fiscal Year Ended June 30, 2007 - $2,967,000
Fiscal Year Ended June 30, 2006 - $2,831,200
BlackRock High Yield Municipal Fund
Fiscal Year Ended June 30, 2007 - $2,967,000
Fiscal Year Ended June 30, 2006 - $2,809,800
(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 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) - $1,735,000, 0%
Item 5 - Audit Committee of Listed Registrants - Not Applicable
Item 6 - Schedule of Investments - The registrant's Schedule of Investments
is included as part of the Report to Stockholders filed under Item 1
of this form.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
Not Applicable
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - The
registrant's Nominating Committee will consider nominees to the
Board 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
15d-15(b) under the Securities and 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
(17 CFR 270.30a-3(d)) 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 Municipal Bond Fund, Inc.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock Municipal Bond Fund, Inc.
Date: August 20, 2007
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/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock Municipal Bond Fund, Inc.
Date: August 20, 2007
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Financial Officer of
BlackRock Municipal Bond Fund, Inc.
Date: August 20, 2007