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