UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-4375
Name of Fund: Merrill Lynch New York Municipal Bond Fund of Merrill Lynch
Multi-State Municipal Series Trust
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President, Merrill
Lynch New York Municipal Bond Fund of Merrill Lynch Multi-State Municipal
Series Trust, 800 Scudders Mill Road, Plainsboro, NJ 08536. Mailing
address: P.O. Box 9011, Princeton, NJ 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 03/31/03
Date of reporting period: 10/01/02 - 3/31/03
Item 1 - Attach shareholder report
[LOGO] Merrill Lynch Investment Managers
Semi-Annual Report
March 31, 2003
Merrill Lynch
New York
Municipal
Bond Fund
www.mlim.ml.com
Merrill Lynch New York Municipal Bond Fund March 31, 2003
TO OUR SHAREHOLDERS
Effective April 14, 2003, the share class names for the Merrill Lynch family of
mutual funds were changed to be consistent with the standard share classes of
most other mutual fund families. As of that date, all Class A Shares were
redesignated Class I Shares. At the same time, Class D Shares were redesignated
Class A Shares. There are no changes to the Class B or Class C share class
labels. Trading symbols have not changed nor have current eligibility rules or
pricing structures. This redesignation of share classes does not impact your
investment in any way. Although the redesignation took effect just after the
close of the Fund's period, we have provided Fund performance as of March 31,
2003 to reflect the new share class designations.
The Municipal Market Environment
During the six-month period ended March 31, 2003, amid considerable monthly
volatility, long-term fixed income interest rates rose slightly. Bolstered by an
unexpected decline in the national unemployment rate to 5.6% in early October,
U.S. equity markets staged a strong rally throughout much of the month. The
Standard & Poor's 500 (S&P 500) Index rose over 8% for October triggered by
stronger-than-expected earnings reports from a large number of companies, such
as General Electric Company, International Business Machines Corporation and
Microsoft Corporation. As they have throughout most of the period, bond prices
traded in an inverse relationship to equity prices. Consequently, as stocks
rallied, bond yields rose sharply in October, despite generally weak economic
releases. During October, the U.S. housing sector remained quite robust, but
retail sales and industrial production slowed. Fixed income bond yields remained
under pressure in November as U.S. equity markets continued to strengthen.
During November, the S&P 500 Index rose an additional 5.5%. Equity prices were
supported by further signs of U.S. economic recovery, especially improving labor
market activity. In late November, third quarter 2002 gross domestic product
growth was 4%, well above the second quarter 2002 rate of 1.3%. Financial
conditions were also strengthened by a larger-than-expected reduction in
short-term interest rates by the Federal Reserve Board in early November. The
Federal Funds target rate was lowered 50 basis points (.50%) to 1.25%, its
lowest level since the 1960s. This action by the Federal Reserve Board was
largely viewed as being taken to bolster the sputtering U.S. economic recovery.
Rebounding U.S. equity markets and the prospects for a more substantial U.S.
economic recovery pushed long-term U.S. Treasury yield levels to 5.10% by late
November.
However, into early 2003, softer equity prices and renewed investor concerns
about U.S. military action against Iraq and nuclear tensions in North Korea
again pushed bond prices higher. Reacting to disappointing holiday sales and
corporate managements' attempts to scale back analysts' expectation of future
earnings, the S&P 500 Index declined more than 10% from December 2002 to
February 2003. Fearing an eventual U.S./Iraq military confrontation in 2003,
investors again sought the safety of U.S. Treasury obligations and the prices of
fixed income issues rose. By the end of February 2003, U.S. Treasury bond yields
declined approximately 40 basis points to 4.67%.
Bond yields continued to fall into early March. However, once direct U.S.
military action against Iraq began, bond yields quickly rose. Prior uncertainty
surrounding the Iraqi situation was obviously removed and early U.S. military
successes fostered the hope that the conflict would be quickly and positively
concluded. Concurrently, the S&P 400 Index rose over 6% as investors, in part,
sold fixed income issues to purchase equities in anticipation of a strong U.S.
economic recovery once the Iraqi conflict was resolved. By mid-March, U.S.
Treasury bond yields rose above 5%. However, as there was growing sentiment that
hostilities may not be resolved in a matter of weeks, U.S. Treasury bond yields
again declined to end the period at 4.81%. Over the past six months, U.S.
Treasury bond yields have risen approximately 15 basis points.
For the six months ended March 31, 2003, long-term tax-exempt bond yields also
rose modestly. Yield volatility was reduced relative to that seen in U.S.
Treasury issues as municipal bond prices were much less sensitive to worldwide
geopolitical pressures on a daily and weekly basis. Tax-exempt bond yields
generally followed their taxable counterparts higher,
1
Merrill Lynch New York Municipal Bond Fund March 31, 2003
responding to a more positive, or at least less negative, U.S. equity
environment and the expectation of stronger economic growth later this year.
After rising approximately 25 basis points this past October and November 2002
to 5.30%, municipal bond yields generally declined through February 2003. At
February 28, 2003, long-term tax-exempt revenue bond yields, as measured by the
Bond Buyer Revenue Bond Index, fell to approximately 5.05%. However, similar to
U.S. Treasury bond yields, once military action began in Iraq, municipal bond
yields rose sharply to nearly 5.20%. Over the past six months, long-term
tax-exempt bond yields rose approximately 12 basis points, slightly less than
U.S. Treasury obligations.
A number of factors have combined to generate consistently strong demand for
municipal bonds throughout the six-month period ended March 31, 2003. Declining
U.S. equity markets have supported continued positive demand for tax-exempt
products as investors sought the relative security of fixed income issues. Also,
with tax-exempt money market rates near 1%, the demand for longer maturity
municipal issues has increased as investors have opted to buy longer maturity
issues rather than remain in cash reserves. Additionally, investors renewed
approximately $30 billion in January 2003 from bond maturities, coupon income
and proceeds from early redemptions. However, these positive demand factors were
not totally able to offset the increase in tax-exempt new-issue supply. Recent
yield advancements have served to make municipal bonds a particularly attractive
purchase relative to their taxable counterparts. Throughout most of the yield
curve, municipal bonds have been able to be purchased at yields near or
exceeding those of comparable U.S. Treasury issues. Compared to their recent
historical averages of 82% - 88% of U.S. Treasury yields, municipal bond yields
ratios in their current 95% - 105% range are likely to prove attractive to
long-term investors.
Declining U.S. equity markets and escalating geopolitical pressures have
resulted in reduced economic activity and consumer confidence. It is important
to note that, despite all the negative factors impeding the growth of U.S.
businesses, the U.S. economy still grew at an approximate 2.5% rate for all of
2002, twice that of 2001. Similar expansion is expected for early 2003. However,
until both Iraqi and North Korean conflicts are resolved, any meaningful
increase in interest rates is unlikely.
Some analysts expect that, upon successful resolution of these conflicts, U.S.
business conditions will quickly improve. Bond yields, especially U.S. Treasury
securities, which have enjoyed a significant safe-haven benefit, are also
expected to quickly rise. Certainly, the brief spike in bond yields upon initial
military action against Iraq earlier this month demonstrated how rapidly
interest rates may respond to reduced uncertainty and a more positive financial
environment. However, it is questionable to expect that even a quick, positive
closure to these hostilities would restore business and investor confidence to
the extent that U.S. economic growth would dramatically explode and engender
associated, large-scale interest rate increases. The resumption of solid
economic growth is likely to be a gradual process accompanied by equally
graduated increases in bond yields. Moderate economic growth, within a content
of negligible inflationary pressures, should not greatly endanger the positive
fixed income environment tax-exempt products currently enjoy.
Specific to New York, the state currently faces a significant structural budget
imbalance and difficult budget balancing decisions. There is an estimated budget
gap of $2.2 billion for the current fiscal year and $9.3 billion for next year.
In fiscal year 2003, additional budget cuts were implemented, resulting in an
estimated ending General Fund balance of $716 million. Strategies to reduce the
fiscal-year 2003 budget disparity were centered primarily on the use of reserves
and a hold on spending. The state's Budget Stabilization Fund, which is included
in the General Fund, is projected to end fiscal-year 2003 at $710 million. The
governor's office has publicly disclosed that the securitization of tobacco
settlement revenues will play an important part in helping to reduce the state's
deficit. The state is seeking to issue a total of up to $4.2 billion in tobacco
settlement revenue bonds that also would include
2
Merrill Lynch New York Municipal Bond Fund March 31, 2003
an additional pledge of mortgage-recording tax revenue. However, any
tobacco-backed bonds would require state legislature approval.
Portfolio Strategy
For the six-month period ended March 31, 2003, the Fund's Class A, Class B,
Class C and Class I Shares had total returns of +0.01%, -0.28%, -0.24% and
- -0.02%, respectively. The Fund's unmanaged benchmark, the Lehman Brothers
Municipal Bond Index, had a total return of +1.20% for the same 12-month period.
(Investment results shown do not reflect sales charges and would be lower if
sales charges were included. Complete performance information can be found on
pages 4 and 5 of this report to shareholders.)
During the six-month period ended March 31, 2003, we focused on seeking to
enhance the Fund's dividend stream and reducing the Fund's net asset value
volatility. Market volatility was expected as a result of conflicting economic
signals and the likelihood for a war with Iraq. Reducing asset value volatility
generally involves lowering the Fund's interest rate sensitivity. This strategy
worked well in January 2003 as interest rates rose from near historic lows.
Since then, interest rates have generally moved lower because of economic
weakness, an unstable stock market and the outbreak of war. As interest rates
fell further, we shifted the Fund to a more defensive position. While this
strategy may have been implemented a bit early, it is our belief that interest
rates do not have much further to fall.
In Conclusion
We appreciate your ongoing interest in Merrill Lynch New York Municipal Bond
Fund, and we look forward to assisting you with your financial needs in the
months and years ahead.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Trustee
/s/ Kenneth A. Jacob
Kenneth A. Jacob
Senior Vice President
/s/ John M. Loffredo
John M. Loffredo
Senior Vice President
/s/ Roberto Roffo
Roberto Roffo
Vice President and Portfolio Manager
April 17, 2003
3
Merrill Lynch New York Municipal Bond Fund March 31, 2003
PERFORMANCE DATA
About Fund Performance
Effective April 14, 2003, Class A Shares were redesignated Class I Shares and
Class D Shares were redesignated Class A Shares. Investors are able to purchase
shares of the Fund through multiple pricing alternatives:
o Class A Shares incur a maximum initial sales charge of 4% and an account
maintenance fee of 0.10% (but no distribution fee).
o Effective December 1, 2002, Class B Shares are subject to a maximum
contingent deferred sales charge of 4%, declining to 0% after six years.
All Class B Shares purchased prior to December 1, 2002 will maintain the
four-year schedule. In addition, Class B Shares are subject to a
distribution fee of 0.25% and an account maintenance fee of 0.25%. These
shares automatically convert to Class A Shares after approximately ten
years. (There is no initial sales charge for automatic share conversions.)
o Class C Shares are subject to a distribution fee of 0.35% and an account
maintenance fee of 0.25%. In addition, Class C Shares are subject to a 1%
contingent deferred sales charge if redeemed within one year of purchase.
o Class I Shares incur a maximum initial sales charge (front-end load) of 4%
and bear no ongoing distribution or account maintenance fees. Class I
Shares are available only to eligible investors.
None of the past results shown should be considered a representation of future
performance. Performance results do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Figures shown in each of the following tables assume reinvestment of all
dividends and capital 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.
Recent Performance Results
Ten Years/
6-Month 12-Month Since Inception Standardized
As of March 31, 2003 Total Return Total Return Total Return 30-Day Yield
===========================================================================================================
ML New York Municipal Bond Fund Class A Shares* +0.01% +7.50% +61.95% 3.87%
- -----------------------------------------------------------------------------------------------------------
ML New York Municipal Bond Fund Class B Shares* -0.28 +6.97 +56.30 3.63
- -----------------------------------------------------------------------------------------------------------
ML New York Municipal Bond Fund Class C Shares* -0.24 +6.96 +55.30 3.53
- -----------------------------------------------------------------------------------------------------------
ML New York Municipal Bond Fund Class I Shares* -0.02 +7.51 +64.45 3.97
- -----------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index** +1.20 +9.89 +86.76/+82.54 --
===========================================================================================================
* Investment results shown do not reflect sales charges; results shown would
be lower if a sales charge was 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 B & Class I Shares and from 10/21/94 for Class A &
Class C Shares.
** This unmanaged Index consists of long-term revenue bonds, prerefunded
bonds, general obligation bonds and insured bonds. The ten-year/since
inception total returns are for ten years and from 10/31/94, respectively.
4
Merrill Lynch New York Municipal Bond Fund March 31, 2003
PERFORMANCE DATA (concluded)
Average Annual Total Return
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
One Year Ended 3/31/03 +7.50% +3.20%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/03 +4.51 +3.66
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 3/31/03 +5.88 +5.37
- --------------------------------------------------------------------------------
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
One Year Ended 3/31/03 +6.97% +2.97%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/03 +4.07 +3.74
- --------------------------------------------------------------------------------
Ten Years Ended 3/31/03 +4.57 +4.57
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 4% and is reduced to 0% after
six years.
** Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
================================================================================
Class C Shares*
================================================================================
One Year Ended 3/31/03 +6.96% +5.96%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/03 +3.98 +3.98
- --------------------------------------------------------------------------------
Inception (10/21/94)
through 3/31/03 +5.35 +5.35
- --------------------------------------------------------------------------------
* Maximum contingent deferred sales charge is 1% and is reduced to 0% after
one year.
** Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
================================================================================
Class I Shares*
================================================================================
One Year Ended 3/31/03 +7.51% +3.21%
- --------------------------------------------------------------------------------
Five Years Ended 3/31/03 +4.60 +3.75
- --------------------------------------------------------------------------------
Ten Years Ended 3/31/03 +5.10 +4.67
- --------------------------------------------------------------------------------
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
5
Merrill Lynch New York Municipal Bond Fund March 31, 2003
SCHEDULE OF INVESTMENTS (in Thousands)
S&P Moody's Face
Ratings Ratings Amount Issue Value
===================================================================================================================================
New York--86.7%
===================================================================================================================================
AA NR* $1,175 Albany, New York, IDA, Civic Facility Revenue Bonds (University Heights--Albany Law
School), Series A, 6.75% due 12/01/2019 $ 1,412
- -----------------------------------------------------------------------------------------------------------------------------------
Cicero, New York, Local Development Corporation Revenue Bonds (Cicero Community
Recreation Project), Series A:
NR* Baa2 500 6.625% due 5/01/2021 519
NR* Baa2 5,060 6.75% due 5/01/2042 5,533
- -----------------------------------------------------------------------------------------------------------------------------------
Erie County, New York, IDA, Life Care Community Revenue Bonds (Episcopal Church
Home), Series A:
NR* NR* 1,500 5.875% due 2/01/2018 1,476
NR* NR* 3,000 6% due 2/01/2028 2,891
- -----------------------------------------------------------------------------------------------------------------------------------
Hempstead Town, New York, IDA, Civic Facility Revenue Bonds (Adelphi University
Civic Facility):
A- NR* 1,700 5.75% due 6/01/2022 1,826
A- NR* 2,500 5.50% due 6/01/2032 2,598
- -----------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Commuter Facilities Revenue
Refunding Bonds:
AAA Aaa 100 Series B, 5.125% due 7/01/2024 (a)(h) 105
AAA Aaa 2,250 Series D, 5% due 1/01/2012 (d)(e) 2,501
AAA Aaa 2,750 Series D, 5% due 7/01/2016 (d)(h) 2,972
- -----------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Dedicated Tax Fund Revenue Bonds,
Series A (e):
AAA Aaa 4,000 6.125% due 4/01/2010 (b) 4,759
AAA Aaa 5,540 5.25% due 10/01/2014 (c) 6,338
- -----------------------------------------------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York, Revenue Refunding Bonds:
NR* Aaa 2,100 RIB, Series 724X, 10.09% due 11/15/2032 (g) 2,577
A A2 5,855 Series A, 5.75% due 11/15/2032 6,367
- -----------------------------------------------------------------------------------------------------------------------------------
AA- A3 2,500 Metropolitan Transportation Authority, New York, Service Contract Revenue Refunding
Bonds, Series A, 5.125% due 1/01/2024 2,554
- -----------------------------------------------------------------------------------------------------------------------------------
NR* Baa3 445 Monroe County, New York, IDA, Student Housing Revenue Bonds (Collegiate), Series A,
5.375% due 4/01/2029 422
- -----------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO ABBREVIATIONS
To simplify the listings of Merrill Lynch New York Municipal Bond Fund's
portfolio holdings in the Schedule of Investments, we have abbreviated the names
of many of the securities according to the list below and at right.
AMT Alternative Minimum Tax (subject to)
DRIVERS Derivative Inverse Tax-Exempt Receipts
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
6
Merrill Lynch New York Municipal Bond Fund March 31, 2003
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
S&P Moody's Face
Ratings Ratings Amount Issue Value
===================================================================================================================================
New York(continued)
===================================================================================================================================
AA Aa2 $2,500 New York City, New York, City Housing Development Corporation, M/F Housing Revenue
Bonds, AMT, Series A, 5.50% due 11/01/2034 $ 2,583
- -----------------------------------------------------------------------------------------------------------------------------------
New York City, New York, City IDA, Civic Facilities Revenue Bonds:
NR* NR* 6,895 (New York Blood Center Inc. Project), 7.25% due 5/01/2004 (e) 7,328
NR* NR* 2,500 Series C, 6.80% due 6/01/2028 2,546
NR* NR* 1,000 (Special Needs Facility Pooled Program), Series A-1, 6.50% due 7/01/2017 1,020
NR* NR* 2,540 (Special Needs Facility Pooled Program), Series C-1, 6.50% due 7/01/2017 2,588
AAA Aaa 4,690 (USTA National Tennis Center Project), 6.60% due 11/15/2011 (c) 5,141
- -----------------------------------------------------------------------------------------------------------------------------------
AAA NR* 1,000 New York City, New York, City IDA, Mortgage Revenue Bonds (Eger Harbor House Inc.
Project), Series A, 5.875% due 5/20/2044 (i) 1,096
- -----------------------------------------------------------------------------------------------------------------------------------
New York City, New York, City IDA, Special Facilities Revenue Bonds, AMT:
CCC Caa2 4,500 (1990 American Airlines Inc. Project), 5.40% due 7/01/2020 1,181
BBB- Ba2 935 (British Airways PLC Project), 5.25% due 12/01/2032 514
BBB- Ba2 2,715 (British Airways PLC Project), 7.625% due 12/01/2032 2,036
B+ B2 2,965 (Northwest Airlines Inc.), 6% due 6/01/2027 1,735
BBB+ A3 3,250 (Terminal One Group Association Project), 6.125% due 1/01/2024 3,345
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,000 New York City, New York, City Municipal Water Finance Authority, Water and Sewer System
Revenue Bonds, Series B, 5.50% due 6/15/2027 (d) 1,071
- -----------------------------------------------------------------------------------------------------------------------------------
New York City, New York, GO, Refunding:
A A2 2,165 Series B, 6.375% due 8/15/2009 2,392
A A2 2,700 Series G, 5.75% due 2/01/2020 2,831
A A2 3,500 Series J, 6% due 8/01/2017 3,821
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,365 New York State Dormitory Authority, Hospital Revenue Refunding Bonds (North General
Hospital), 5% due 2/15/2025 1,384
- -----------------------------------------------------------------------------------------------------------------------------------
New York State Dormitory Authority Revenue Bonds:
AA- Baa1 1,690 (4201 Schools Program), 6.25% due 7/01/2020 1,951
AAA Aaa 2,380 (School Districts Financing Program), Series E, 5.75% due 10/01/2030 (d) 2,623
AAA NR* 2,500 (Willow Towers Inc. Project), 5.40% due 2/01/2034 (i) 2,610
- -----------------------------------------------------------------------------------------------------------------------------------
New York State Dormitory Authority, Revenue Refunding Bonds:
AA- NR* 750 (City University System), Consolidated Fifth Generation, Series A, 5.25% due 1/01/2013 816
AAA Aaa 7,250 (City University System), Consolidated Second Generation, Series A,
6.125% due 7/01/2011 (a) 8,520
NR* A3 1,785 (Lenox Hill Hospital Obligation Group), 5.75% due 7/01/2012 2,017
NR* A3 2,505 (Lenox Hill Hospital Obligation Group), 5.75% due 7/01/2013 2,793
BBB- Baa3 3,000 (Mount Sinai Health), Series A, 6.50% due 7/01/2016 3,287
BBB- Baa3 4,850 (Mount Sinai Health), Series A, 6.625% due 7/01/2018 5,291
BBB- Baa3 2,500 (Mount Sinai Health), Series A, 6.625% due 7/01/2019 2,714
BBB- Baa3 1,675 (Mount Sinai Health), Series A, 6.50% due 7/01/2025 1,769
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 6,400 New York State Energy Research and Development Authority, Facilities Revenue Refunding
Bonds (Consolidated Edison Co. of New York), Series A, 6.10% due 8/15/2020 (a) 7,116
- -----------------------------------------------------------------------------------------------------------------------------------
7
Merrill Lynch New York Municipal Bond Fund March 31, 2003
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
S&P Moody's Face
Ratings Ratings Amount Issue Value
===================================================================================================================================
New York(continued)
===================================================================================================================================
AAA Aaa $2,000 New York State Energy Research and Development Authority, PCR, Refunding (Central
Hudson Gas and Electric), Series A, 5.45% due 8/01/2027 (a) $ 2,098
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,000 New York State Environmental Facilities Corporation, Special Obligation Revenue
Refunding Bonds (Riverbank State Park), 6.25% due 4/01/2012 (a) 3,603
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,000 New York State, HFA, Revenue Refunding Bonds (Housing Mortgage Project), Series A,
6.10% due 11/01/2015 (c) 4,420
- -----------------------------------------------------------------------------------------------------------------------------------
New York State Mortgage Agency Revenue Bonds, AMT:
NR* Aaa 2,800 DRIVERS, Series 191, 10.28% due 4/01/2030 (g) 3,149
NR* Aa1 2,500 DRIVERS, Series 195, 11.23% due 10/01/2030 (g) 3,053
NR* Aa1 3,000 Series 101, 5.40% due 4/01/2032 3,122
- -----------------------------------------------------------------------------------------------------------------------------------
AA- Aa3 2,320 New York State Thruway Authority, General Revenue Bonds, Series D, 5.50% due 1/01/2017 2,516
- -----------------------------------------------------------------------------------------------------------------------------------
AAA NR* 1,300 New York State Thruway Authority, Second General Highway and Bridge Trust Fund
Revenue Bonds, Series A, 5.25% due 4/01/2022 (d) 1,376
- -----------------------------------------------------------------------------------------------------------------------------------
AA A1 2,000 New York State Urban Development Corporation, Personal Income Tax Revenue Bonds
(State Facilities), Series A, 5.50% due 3/15/2032 2,120
- -----------------------------------------------------------------------------------------------------------------------------------
New York State Urban Development Corporation Revenue Bonds (Youth Facilities Services
Contract), Series B (e):
AA- A3 1,675 6% due 4/01/2010 1,993
AA- A3 750 6.125% due 4/01/2010 898
AA- A3 615 6.25% due 4/01/2010 741
- -----------------------------------------------------------------------------------------------------------------------------------
New York State, Urban Development Corporation, Revenue Refunding Bonds:
AA- A3 1,685 (Clarkson Center Advance Materials), 5.50% due 1/01/2020 1,882
AA- A3 3,500 (University Facility Grants), 5.50% due 1/01/2019 3,934
- -----------------------------------------------------------------------------------------------------------------------------------
BBB Baa1 7,975 Niagara County, New York, IDA, Solid Waste Disposal Revenue Refunding Bonds, AMT,
Series A, 5.45% due 11/15/2026 8,389
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,000 Niagara, New York, Frontier Authority, Airport Revenue Bonds (Greater Buffalo
International Airport), AMT, Series A, 6.125% due 4/01/2014 (a) 3,173
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,000 North Country, New York, Development Authority, Solid Waste Management System
Revenue Refunding Bonds, 6% due 5/15/2015 (c) 1,201
- -----------------------------------------------------------------------------------------------------------------------------------
Onondaga County, New York, IDA, Revenue Bonds (Air Cargo), AMT:
NR* Baa3 3,975 6.125% due 1/01/2032 4,025
NR* Ba1 1,365 7.25% due 1/01/2032 1,360
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,075 Port Authority of New York and New Jersey, Revenue Bonds, Trust Receipts, AMT, Class R,
Series 10, 10.287% due 1/15/2017 (c)(g) 4,987
- -----------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 6,000 Port Authority of New York and New Jersey, Special Obligation Revenue Bonds, RIB, AMT,
Series 243, 11.04% due 12/01/2010 (d)(g) 7,720
- -----------------------------------------------------------------------------------------------------------------------------------
Suffolk County, New York, IDA, Civic Facility Revenue Bonds:
BBB Baa1 2,000 (Huntington Hospital Project), Series B, 5.875% due 11/01/2032 2,056
NR* NR* 135 (Special Needs Facilities Pooled Program), Series D-1, 6.50% due 7/01/2017 135
- -----------------------------------------------------------------------------------------------------------------------------------
NR* NR* 5,000 Suffolk County, New York, IDA, IDR, Refunding (Nissequogue Cogeneration Partners
Facility), AMT, 5.50% due 1/01/2023 4,556
- -----------------------------------------------------------------------------------------------------------------------------------
8
Merrill Lynch New York Municipal Bond Fund March 31, 2003
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
S&P Moody's Face
Ratings Ratings Amount Issue Value
===================================================================================================================================
New York(concluded)
===================================================================================================================================
AAA Aaa $7,155 Suffolk County, New York, IDA, Solid Waste Disposal Facility Revenue Refunding Bonds
(Ogden Martin System Huntington Project), AMT, 6.25% due 10/01/2012 (a) $ 8,531
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,000 Triborough Bridge and Tunnel Authority, New York, Revenue Refunding Bonds,
5.25% due 11/15/2023 (d) 4,210
- -----------------------------------------------------------------------------------------------------------------------------------
A+ A1 2,210 Triborough Bridge and Tunnel Authority, New York, Subordinate Revenue Bonds,
5.25% due 11/15/2030 2,294
- -----------------------------------------------------------------------------------------------------------------------------------
Troy, New York, City School District, GO, Refunding (c):
AAA Aaa 765 5.75% due 7/15/2017 874
AAA Aaa 805 5.75% due 7/15/2018 915
AAA Aaa 850 5.75% due 7/15/2019 961
- -----------------------------------------------------------------------------------------------------------------------------------
Utica, New York, IDA, Civic Facility Revenue Bonds:
NR* Aa3 1,000 (Munson, Williams, Proctor Institute), 5.375% due 7/15/2020 1,074
NR* Aa3 1,210 (Munson, Williams, Proctor Institute), 5.40% due 7/15/2030 1,266
NR* NR* 2,505 (Utica College Project), Series A, 5.75% due 8/01/2028 2,350
- -----------------------------------------------------------------------------------------------------------------------------------
Willsboro, New York, Central School District, GO, Refunding (b):
NR* Aaa 655 5.75% due 6/15/2026 720
NR* Aaa 690 5.75% due 6/15/2027 758
NR* Aaa 730 5.75% due 6/15/2028 802
NR* Aaa 770 5.75% due 6/15/2029 847
===================================================================================================================================
Puerto Rico--9.2%
===================================================================================================================================
A A3 4,000 Children's Trust Fund, Puerto Rico, Tobacco Settlement Revenue Bonds,
5.625% due 5/15/2043 3,634
- -----------------------------------------------------------------------------------------------------------------------------------
AAAr Aaa 4,750 Puerto Rico Commonwealth, GO, Refunding, RITR, Class R, Series 3,
10.021% due 7/01/2016 (d)(g) 6,271
- -----------------------------------------------------------------------------------------------------------------------------------
A Baa1 8,000 Puerto Rico Commonwealth, Highway and Transportation Authority, Transportation
Revenue Bonds, Series D, 5.75% due 7/01/2041 8,812
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Trust Receipts, Class R,
Series 16 HH, 10.018% due 7/01/2013 (c)(g) 1,350
- -----------------------------------------------------------------------------------------------------------------------------------
CCC Caa2 1,000 Puerto Rico Industrial, Medical and Environmental Pollution Control Facilities Financing
Authority, Special Facilities Revenue Bonds (American Airlines Inc.),
Series A, 6.45% due 12/01/2025 185
- -----------------------------------------------------------------------------------------------------------------------------------
NR* Baa2 800 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities
Revenue Bonds (Cogeneration Facility--AES Puerto Rico Project), AMT, 6.625% due 6/01/2026 828
- -----------------------------------------------------------------------------------------------------------------------------------
BBB+ Baa3 1,000 Puerto Rico Public Finance Corporation Revenue Bonds, Commonwealth Appropriation,
Series E, 5.70% due 8/01/2025 1,055
- -----------------------------------------------------------------------------------------------------------------------------------
NR* Aa2 1,800 Puerto Rico Public Finance Corporation Revenue Bonds, DRIVERS, Series 272,
9.34% due 8/01/2030 (g) 2,087
- -----------------------------------------------------------------------------------------------------------------------------------
9
Merrill Lynch New York Municipal Bond Fund March 31, 2003
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
S&P Moody's Face
Ratings Ratings Amount Issue Value
===================================================================================================================================
Virgin Islands--1.7%
===================================================================================================================================
BBB- Baa3 $4,500 Virgin Islands Government Refinery Facilities Revenue Bonds (Hovensa Coker Project),
AMT, 6.50% due 7/01/2021 $ 4,535
- -----------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Cost--$240,178)--97.6% 255,835
===================================================================================================================================
===================================================================================================================================
Shares
Held Short-Term Securities
- -----------------------------------------------------------------------------------------------------------------------------------
5,105 CMA New York Municipal Money Fund (f) 5,105
- -----------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Securities (Cost--$5,105)--1.9% 5,105
- -----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost--$245,283)--99.5% 260,940
Unrealized Depreciation on Forward Interest Rate Swaps--(0.1%) (328)
Other Assets Less Liabilities--0.6% 1,633
--------
Net Assets--100.0% $262,245
========
- -----------------------------------------------------------------------------------------------------------------------------------
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FSA Insured.
(d) MBIA Insured.
(e) Prerefunded.
(f) Investments in companies considered to be an affiliate of the Fund (such
companies are defined as "Affiliated Companies" in Section 2(a)(3) of the
Investment Company Act of 1940) are as follows:
(in Thousands)
--------------------------------------------------------------------------
Net Dividend
Affiliate Activity Income
--------------------------------------------------------------------------
CMA New York Municipal Money Fund 5,105 $8
--------------------------------------------------------------------------
(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 March 31, 2003.
(h) Escrowed to maturity.
(i) GNMA Collateralized.
* Not Rated.
See Notes to Financial Statements.
10
Merrill Lynch New York Municipal Bond Fund March 31, 2003
FINANCIAL INFORMATION
=========================================================================================================================
Statement of Assets and Liabilities as of March 31, 2003
=========================================================================================================================
Assets: Investments, at value (identified cost--$245,282,591) .................... $ 260,940,480
Cash ..................................................................... 25,766
Receivables:
Interest ............................................................... $ 4,816,770
Beneficial interest sold ............................................... 487,616
Securities sold ........................................................ 273,900
Dividends .............................................................. 7,774 5,586,060
-----------
Prepaid registration fees and other assets ............................... 48,170
-------------
Total assets ............................................................. 266,600,476
-------------
- -------------------------------------------------------------------------------------------------------------------------
Liabilities: Unrealized depreciation on forward interest rate swaps ................... 327,673
Payables:
Securities purchased ................................................... 2,989,865
Beneficial interest redeemed ........................................... 578,382
Dividends to shareholders .............................................. 235,274
Investment adviser ..................................................... 113,981
Distributor ............................................................ 55,265 3,972,767
-----------
Accrued expenses ......................................................... 54,857
-------------
Total liabilities ........................................................ 4,355,297
-------------
- -------------------------------------------------------------------------------------------------------------------------
Net Assets: Net assets ............................................................... $ 262,245,179
=============
- -------------------------------------------------------------------------------------------------------------------------
Net Assets Class A Shares of beneficial interest, $.10 par value, unlimited number of
Consist of: shares authorized ........................................................ $ 1,307,249
Class B Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ........................................................ 804,292
Class C Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ........................................................ 140,866
Class I Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ........................................................ 93,363
Paid-in capital in excess of par ......................................... 261,090,354
Undistributed investment income--net ..................................... $ 317,861
Accumulated realized capital losses on investments--net .................. (16,839,022)
Unrealized appreciation on investments--net .............................. 15,330,216
-----------
Total accumulated losses--net ............................................ (1,190,945)
-------------
Net assets ............................................................... $ 262,245,179
=============
- -------------------------------------------------------------------------------------------------------------------------
Net Asset Class A--Based on net assets of $146,103,080 and 13,072,490 shares
Value: of beneficial interest outstanding ....................................... $ 11.18
=============
Class B--Based on net assets of $89,946,106 and 8,042,917 shares
of beneficial interest outstanding ....................................... $ 11.18
=============
Class C--Based on net assets of $15,758,211 and 1,408,663 shares
of beneficial interest outstanding ....................................... $ 11.19
=============
Class I--Based on net assets of $10,437,782 and 933,633 shares
of beneficial interest outstanding ....................................... $ 11.18
=============
- -------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
11
Merrill Lynch New York Municipal Bond Fund March 31, 2003
FINANCIAL INFORMATION (continued)
============================================================================================================================
Statement of Operations
============================================================================================================================
For the Six Months Ended
March 31, 2003
- ----------------------------------------------------------------------------------------------------------------------------
Investment Income: Interest ......................................................... $ 7,482,978
Dividends ........................................................ 7,774
--------------
Total income ..................................................... 7,490,752
--------------
- ----------------------------------------------------------------------------------------------------------------------------
Expenses: Investment advisory fees ......................................... $ 727,030
Account maintenance and distribution fees--Class B ............... 237,394
Account maintenance fees--Class A ................................ 71,774
Accounting services .............................................. 65,177
Account maintenance and distribution fees--Class C ............... 44,824
Transfer agent fees--Class A ..................................... 38,195
Transfer agent fees--Class B ..................................... 29,397
Professional fees ................................................ 28,445
Printing and shareholder reports ................................. 26,728
Registration fees ................................................ 21,982
Trustees' fees and expenses ...................................... 10,808
Custodian fees ................................................... 9,046
Pricing fees ..................................................... 7,606
Transfer agent fees--Class C ..................................... 4,528
Transfer agent fees--Class I ..................................... 2,912
Other ............................................................ 13,340
-----------
Total expenses before reimbursement .............................. 1,339,186
Reimbursement of expenses ........................................ (4,501)
-----------
Total expenses after reimbursement ............................... 1,334,685
--------------
Investment income--net ........................................... 6,156,067
--------------
- ----------------------------------------------------------------------------------------------------------------------------
Realized & Unreal- Realized gain on investments--net ................................ 1,049,756
ized Gain (Loss) on Change in unrealized appreciation/depreciation on investments--net (7,686,962)
Investments--Net: --------------
Total realized and unrealized loss on investments--net ........... (6,637,206)
--------------
Net Decrease in Net Assets Resulting from Operations ............. $ (481,139)
==============
- ----------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
12
Merrill Lynch New York Municipal Bond Fund March 31, 2003
FINANCIAL INFORMATION (continued)
==================================================================================================================================
Statements of Changes in Net Assets
==================================================================================================================================
For the Six For the
Months Ended Year Ended
March 31, September 30,
Increase (Decrease) in Net Assets: 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
Operations: Investment income--net ................................................. $ 6,156,067 $ 12,060,734
Realized gain on investments--net ...................................... 1,049,756 2,402,004
Change in unrealized appreciation/depreciation on investments--net ..... (7,686,962) 5,312,370
------------- -------------
Net increase (decrease) in net assets resulting from operations ........ (481,139) 19,775,108
------------- -------------
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends & Investment income--net:
Distributions to Class A .............................................................. (3,451,691) (6,452,943)
Shareholders: Class B .............................................................. (2,087,146) (4,726,367)
Class C .............................................................. (321,463) (444,316)
Class I .............................................................. (267,899) (668,372)
Realized gain on investments--net:
Class A .............................................................. -- (32,843)
Class B .............................................................. -- (28,101)
Class C .............................................................. -- (2,277)
Class I .............................................................. -- (3,313)
------------- -------------
Net decrease in net assets resulting from dividends and distributions
to shareholders ........................................................ (6,128,199) (12,358,532)
------------- -------------
- ----------------------------------------------------------------------------------------------------------------------------------
Beneficial Interest Net decrease in net assets derived from beneficial interest transactions (5,960,322) (16,620,449)
Transactions: ------------- -------------
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets: Total decrease in net assets ........................................... (12,569,660) (9,203,873)
Beginning of period .................................................... 274,814,839 284,018,712
------------- -------------
End of period* ......................................................... $ 262,245,179 $ 274,814,839
============= =============
- ----------------------------------------------------------------------------------------------------------------------------------
* Undistributed investment income--net ................................... $ 317,861 $ 289,993
============= =============
- ----------------------------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
13
Merrill Lynch New York Municipal Bond Fund March 31, 2003
FINANCIAL INFORMATION (continued)
==================================================================================================================================
Financial Highlights
==================================================================================================================================
Class A@@
--------------------------------------------------------------
For the
Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended For the Year Ended September 30,
March 31, ------------------------------------------------
Increase (Decrease) in Net Asset Value: 2003 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
Per Share Net asset value, beginning of period ... $ 11.45 $ 11.14 $ 10.49 $ 10.49 $ 12.00
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net ................. .27++ .51 .50 .50 .50
Realized and unrealized gain (loss) on
investments--net ....................... (.27) .32 .64 .01 (1.16)
--------- --------- --------- --------- ---------
Total from investment operations ....... -- .83 1.14 .51 (.66)
--------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net ............... (.27) (.52) (.49) (.50) (.50)
Realized gain on investments--net .... -- --+ -- -- (.32)
In excess of realized gain on
investments--net ..................... -- -- -- (.01) (.03)
--------- --------- --------- --------- ---------
Total dividends and distributions ...... (.27) (.52) (.49) (.51) (.85)
--------- --------- --------- --------- ---------
Net asset value, end of period ......... $ 11.18 $ 11.45 $ 11.14 $ 10.49 $ 10.49
========= ========= ========= ========= =========
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investment Based on net asset value per share ..... .01%@ 7.73% 11.01% 5.08% (5.79%)
Return:** ========= ========= ========= ========= =========
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to Expenses, net of reimbursement ......... .84%* .80% .69% .79% .80%
Average ========= ========= ========= ========= =========
Net Assets: Expenses ............................... .84%* .80% .69% .79% .80%
========= ========= ========= ========= =========
Investment income--net ................. 4.83%* 4.60% 4.56% 4.85% 4.49%
========= ========= ========= ========= =========
- ----------------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) $ 146,103 $ 145,267 $ 134,563 $ 126,138 $ 133,596
Data: ========= ========= ========= ========= =========
Portfolio turnover ..................... 27.76% 53.86% 76.22% 149.47% 135.17%
========= ========= ========= ========= =========
- ----------------------------------------------------------------------------------------------------------------------------------
* Annualized.
** Total investment returns exclude the effects of sales charges.
+ Amount is less than $.01 per share.
++ Based on average shares outstanding.
@ Aggregate total investment return.
@@ Effective April 14, 2003, Class D Shares were redesignated Class A Shares.
See Notes to Financial Statements.
14
Merrill Lynch New York Municipal Bond Fund March 31, 2003
FINANCIAL INFORMATION (continued)
=================================================================================================================================
Financial Highlights (continued)
=================================================================================================================================
Class B
-------------------------------------------------------------
For the
Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended For the Year Ended September 30,
March 31, ------------------------------------------------
Increase (Decrease) in Net Asset Value: 2003 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
Per Share Net asset value, beginning of period ... $ 11.46 $ 11.15 $ 10.50 $ 10.49 $ 12.00
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net ................. .25++ .47 .45 .46 .46
Realized and unrealized gain (loss) on
investments--net ....................... (.28) .32 .64 .02 (1.16)
--------- --------- --------- --------- ---------
Total from investment operations ....... (.03) .79 1.09 .48 (.70)
--------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net ............... (.25) (.48) (.44) (.46) (.46)
Realized gain on investments--net .... -- --+ -- -- (.32)
In excess of realized gain on
investments--net ..................... -- -- -- (.01) (.03)
--------- --------- --------- --------- ---------
Total dividends and distributions ...... (.25) (.48) (.44) (.47) (.81)
--------- --------- --------- --------- ---------
Net asset value, end of period ......... $ 11.18 $ 11.46 $ 11.15 $ 10.50 $ 10.49
========= ========= ========= ========= =========
- ----------------------------------------------------------------------------------------------------------------------------------
Total Investment Based on net asset value per share ..... (.28%)@ 7.29% 10.56% 4.75% (6.18%)
Return:** ========= ========= ========= ========= =========
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios to Expenses, net of reimbursement ......... 1.25%* 1.21% 1.10% 1.20% 1.21%
Average ========= ========= ========= ========= =========
Net Assets: Expenses ............................... 1.25%* 1.21% 1.10% 1.20% 1.21%
========= ========= ========= ========= =========
Investment income--net ................. 4.42%* 4.19% 4.16% 4.44% 4.07%
========= ========= ========= ========= =========
- ----------------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) $ 89,946 $ 102,847 $ 123,173 $ 133,180 $ 179,583
Data: ========= ========= ========= ========= =========
Portfolio turnover ..................... 27.76% 53.86% 76.22% 149.47% 135.17%
========= ========= ========= ========= =========
- ----------------------------------------------------------------------------------------------------------------------------------
* Annualized.
** Total investment returns exclude the effects of sales charges.
+ Amount is less than $.01 per share.
++ Based on average shares outstanding.
@ Aggregate total investment return.
See Notes to Financial Statements.
15
Merrill Lynch New York Municipal Bond Fund March 31, 2003
FINANCIAL INFORMATION (continued)
================================================================================================================================
Financial Highlights (continued)
================================================================================================================================
Class C
------------------------------------------------------------
For the
Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended For the Year Ended September 30,
March 31, ----------------------------------------------
Increase (Decrease) in Net Asset Value: 2003 2002 2001 2000 1999
- --------------------------------------------------------------------------------------------------------------------------------
Per Share Net asset value, beginning of period ... $ 11.46 $ 11.15 $ 10.50 $ 10.50 $ 12.01
Operating --------- --------- --------- --------- ---------
Performance: Investment income--net ................. .24++ .45 .44 .45 .45
Realized and unrealized gain (loss) on
investments--net ....................... (.27) .32 .64 .01 (1.16)
--------- --------- --------- --------- ---------
Total from investment operations ....... (.03) .77 1.08 .46 (.71)
--------- --------- --------- --------- ---------
Less dividends and distributions:
Investment income--net ............... (.24) (.46) (.43) (.45) (.45)
Realized gain on investments--net .... -- --+ -- -- (.32)
In excess of realized gain on
investments--net ..................... -- -- -- (.01) (.03)
--------- --------- --------- --------- ---------
Total dividends and distributions ...... (.24) (.46) (.43) (.46) (.80)
--------- --------- --------- --------- ---------
Net asset value, end of period ......... $ 11.19 $ 11.46 $ 11.15 $ 10.50 $ 10.50
========= ========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------------------------------
Total Investment Based on net asset value per share ..... (.24%)@ 7.19% 10.45% 4.55% (6.26%)
Return:** ========= ========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------------------------------
Ratios to Expenses, net of reimbursement ......... 1.35%* 1.31% 1.19% 1.30% 1.31%
Average ========= ========= ========= ========= =========
Net Assets: Expenses ............................... 1.35%* 1.31% 1.19% 1.30% 1.31%
========= ========= ========= ========= =========
Investment income--net ................. 4.32%* 4.10% 4.05% 4.34% 3.98%
========= ========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) $ 15,758 $ 14,773 $ 8,730 $ 6,777 $ 8,051
Data: ========= ========= ========= ========= =========
Portfolio turnover ..................... 27.76% 53.86% 76.22% 149.47% 135.17%
========= ========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------------------------------
* Annualized.
** Total investment returns exclude the effects of sales charges.
+ Amount is less than $.01 per share.
++ Based on average shares outstanding.
@ Aggregate total investment return.
See Notes to Financial Statements.
16
Merrill Lynch New York Municipal Bond Fund March 31, 2003
FINANCIAL INFORMATION (concluded)
=============================================================================================================================
Financial Highlights (concluded)
=============================================================================================================================
Class I@@
---------------------------------------------------------
For the
Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended For the Year Ended September 30,
March 31, --------------------------------------------
Increase (Decrease) in Net Asset Value: 2003 2002 2001 2000 1999
- -----------------------------------------------------------------------------------------------------------------------------
Per Share Net asset value, beginning of period ... $ 11.46 $ 11.14 $ 10.49 $ 10.49 $ 12.00
Operating -------- -------- -------- -------- --------
Performance: Investment income--net ................. .27++ .52 .51 .51 .51
Realized and unrealized gain (loss) on
investments--net ....................... (.27) .33 .64 .01 (1.16)
-------- -------- -------- -------- --------
Total from investment operations ....... -- .85 1.15 .52 (.65)
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net ............... (.28) (.53) (.50) (.51) (.51)
Realized gain on investments--net .... -- --+ -- -- (.32)
In excess of realized gain on
investments--net ..................... -- -- -- (.01) (.03)
-------- -------- -------- -------- --------
Total dividends and distributions ...... (.28) (.53) (.50) (.52) (.86)
-------- -------- -------- -------- --------
Net asset value, end of period ......... $ 11.18 $ 11.46 $ 11.14 $ 10.49 $ 10.49
======== ======== ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------------
Total Investment Based on net asset value per share ..... (.02%)@ 7.93% 11.12% 5.19% (5.70%)
Return:** ======== ======== ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------------
Ratios to Expenses, net of reimbursement ......... .74%* .71% .59% .70% .70%
Average ======== ======== ======== ======== ========
Net Assets: Expenses ............................... .74%* .71% .59% .70% .70%
======== ======== ======== ======== ========
Investment income--net ................. 4.92%* 4.69% 4.66% 4.95% 4.59%
======== ======== ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) $ 10,438 $ 11,928 $ 17,553 $ 12,579 $ 15,522
Data: ======== ======== ======== ======== ========
Portfolio turnover ..................... 27.76% 53.86% 76.22% 149.47% 135.17%
======== ======== ======== ======== ========
- -----------------------------------------------------------------------------------------------------------------------------
* Annualized.
** Total investment returns exclude the effects of sales charges.
+ Amount is less than $.01 per share.
++ Based on average shares outstanding.
@ Aggregate total investment return.
@@ Effective April 14, 2003, Class A Shares were redesignated Class I Shares.
See Notes to Financial Statements.
17
Merrill Lynch New York Municipal Bond Fund March 31, 2003
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch New York Municipal Bond Fund (the "Fund") is part of the Merrill
Lynch Multi-State Municipal Series Trust (the "Trust"). 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
offers multiple classes of shares. Effective April 14, 2003, Class A Shares were
redesignated Class I Shares and Class D Shares were redesignated Class A Shares.
Class A and Class I Shares are sold with a front-end sales charge. Class B and
Class C Shares 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 A, Class B and Class C 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. Income,
expenses (other than expenses attributable to a specific class) and realized and
unrealized gains and losses on investments are allocated daily to each class
based on its relative net assets. The following is a summary of significant
accounting policies followed by the Fund.
(a) Valuation of investments -- Municipal bonds and other portfolio securities
are traded primarily in the over-the-counter municipal bond and money markets
and are valued at the last available bid price or yield equivalents as obtained
from one or more dealers that make markets in the securities. Financial futures
contracts and options thereon, which are traded on exchanges, are valued at
their settlement prices as of the close of such exchanges. Short-term
investments with a remaining maturity of sixty days or less are valued at
amortized cost, which approximates market value. Securities and assets for which
market quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Board of Trustees of
the Trust, including valuations furnished by a pricing service retained by the
Trust, which may utilize a matrix system for valuations. The procedures of the
pricing service and its valuations are reviewed by the officers of the Trust
under the general supervision of the Trustees.
(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.
o Financial futures contracts -- The Fund 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 for the intended purchase of securities.
Futures contracts are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a contract, the
Fund deposits and maintains as collateral such initial margin as required by the
exchange on which the transaction is effected. Pursuant to the contract, the
Fund agrees to receive from or pay to the broker an amount of cash equal to the
daily fluctuation in value of the contract. Such receipts or payments are known
as variation margin and are recorded by the Fund as unrealized gains or losses.
When the contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the value at the time it was closed.
o Forward interest rate swaps -- The Fund is authorized to enter into forward
interest rate swaps for the purpose of hedging the interest rate risk on
portfolio securities. In a forward interest rate swap, the Fund and the
counterparty agree to pay or receive interest on a specified notional contract
amount, commencing on a specified future effective date, unless terminated
earlier. The value of the agreement is determined by quoted fair values received
daily by the Fund from the counterparty. When the agreement is closed, the Fund
records a realized gain or loss in an amount equal to the value of the
agreement.
(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
18
Merrill Lynch New York Municipal Bond Fund March 31, 2003
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).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis. The Fund amortizes all
premiums and discounts on debt securities.
(e) Prepaid registration fees -- Prepaid registration fees are charged to
expense 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.
(g) Expenses -- Certain expenses have been allocated to the individual funds in
the Trust on a pro rata basis based upon the respective aggregate net asset
value of each fund included in the Trust.
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 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 portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Fund. For such services, the Fund pays a monthly fee
based upon the average daily value of the Fund's net assets at the following
annual rates: .55% of the Fund's average daily net assets not exceeding $500
million; .525% of average daily net assets in excess of $500 million but not
exceeding $1 billion; and .50% of average daily net assets in excess of $1
billion. For the six months ended March 31, 2003, FAM reimbursed the Fund in the
amount of $4,501.
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 an
ongoing account maintenance fee and a distribution fee. These fees are accrued
daily and paid monthly, at the annual rates based upon the average daily net
assets of the shares as follows:
- --------------------------------------------------------------------------------
Account Distribution
Maintenance Fee Fee
- --------------------------------------------------------------------------------
Class A ................................ .10% --
Class B ................................ .25% .25%
Class C ................................ .25% .35%
- --------------------------------------------------------------------------------
Pursuant to a sub-agreement 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 A, Class B and Class C 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 March 31, 2003, FAMD earned underwriting discounts and
direct commissions and MLPF&S earned dealer concessions on the sales of the
Fund's Class A and Class I Shares as follows:
- --------------------------------------------------------------------------------
FAMD MLPF&S
- --------------------------------------------------------------------------------
Class A ............................ $ 1,996 $15,756
Class I ............................ -- $ 4
- --------------------------------------------------------------------------------
For the six months ended March 31, 2003, MLPF&S received contingent deferred
sales charges of $40,257 and $1,934 relating to transactions in Class B and
Class C Shares, respectively. Furthermore, MLPF&S received contingent deferred
sales charges of $9,262 relating to transactions subject to front-end sales
charge waivers in Class I Shares.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is
the Fund's transfer agent.
For the six months ended March 31, 2003, the Fund reimbursed FAM $3,004 for
certain accounting services.
Certain officers and/or trustees of the Fund are officers and/or directors of
FAM, PSI, FDS, FAMD, and/or ML & Co.
19
Merrill Lynch New York Municipal Bond Fund March 31, 2003
NOTES TO FINANCIAL STATEMENTS (concluded)
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the six
months ended March 31, 2003 were $72,107,605 and $74,566,578, respectively.
Net realized gains (losses) for the six months ended March 31, 2003 and net
unrealized gains (losses) as of March 31, 2003 were as follows:
- --------------------------------------------------------------------------------
Realized Unrealized
Gains (Losses) Gains (Losses)
- --------------------------------------------------------------------------------
Long-term investments .............. $ 2,660,382 $ 15,657,889
Financial futures
contracts .......................... (675,005) --
Forward interest
rate swaps ......................... (935,621) (327,673)
------------ ------------
Total .............................. $ 1,049,756 $ 15,330,216
============ ============
- --------------------------------------------------------------------------------
As of March 31, 2003, net unrealized appreciation for Federal income tax
purposes aggregated $15,773,859, of which $19,231,357 related to appreciated
securities and $3,457,498 related to depreciated securities. The aggregate cost
of investments at March 31, 2003 for Federal income tax purposes was
$245,166,621.
The Fund has entered into the following forward interest rate swaps as of March
31, 2003:
- --------------------------------------------------------------------------------
Interest Received
--------------------------
Notional Current Expiration
Amount Rate Type Date
- --------------------------------------------------------------------------------
$ 6,000,000 N/A* Variable+ 6/06/2023
- --------------------------------------------------------------------------------
$ 8,500,000 N/A* Variable++ 6/06/2013
- --------------------------------------------------------------------------------
$11,200,000 N/A** Variable+ 4/15/2023
- --------------------------------------------------------------------------------
* Initial interest rate will be determined on effective date June 6, 2003.
** Initial interest rate will be determined on effective date April 15, 2003.
+ 7-Day Bond Market Association rate at quarterly reset date.
++ USD LIBOR rate at quarterly reset date.
- --------------------------------------------------------------------------------
Interest Paid
---------------------
Notional Current Expiration
Amount Rate Type Date
- --------------------------------------------------------------------------------
$ 6,000,000 3.963% Fixed 6/06/2023
- --------------------------------------------------------------------------------
$ 8,500,000 4.17% Fixed 6/06/2013
- --------------------------------------------------------------------------------
$11,200,000 4.3663% Fixed 4/15/2023
- --------------------------------------------------------------------------------
4. Beneficial Interest Transactions:
Net decrease in net assets derived from beneficial interest transactions was
$5,960,322 and $16,620,449 for the six months ended March 31, 2003 and for the
year ended September 30, 2002, respectively.
Transactions in shares of beneficial interest for each class were as follows:
- --------------------------------------------------------------------------------
Class A Shares for the Six Months Dollar
Ended March 31, 2003+ Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 205,743 $ 2,304,579
Automatic conversion
of shares ............................ 626,834 7,053,707
Shares issued to
shareholders in reinvestment
of dividends ......................... 149,775 1,672,630
------------ ------------
Total issued ......................... 982,352 11,030,916
Shares redeemed ...................... (594,814) (6,660,940)
------------ ------------
Net increase ......................... 387,538 $ 4,369,976
============ ============
- --------------------------------------------------------------------------------
+ Effective April 14, 2003, Class D Shares were redesignated Class A shares.
- --------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended September 30, 2002+ Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 276,777 $ 3,079,551
Automatic conversion
of shares ............................ 1,436,697 15,988,829
Shares issued to share-
holders in reinvestment
of dividends & distributions ......... 306,438 3,401,606
------------ ------------
Total issued ......................... 2,019,912 22,469,986
Shares redeemed ...................... (1,413,425) (15,704,800)
------------ ------------
Net increase ......................... 606,487 $ 6,765,186
============ ============
- --------------------------------------------------------------------------------
+ Effective April 14, 2003, Class D Shares were redesignated Class A shares.
- --------------------------------------------------------------------------------
Class B Shares for the Six Months Dollar
Ended March 31, 2003 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 355,851 $ 3,996,287
Shares issued to
shareholders in reinvestment
of dividends ......................... 96,741 1,080,936
------------ ------------
Total issued ......................... 452,592 5,077,223
Automatic conversion
of shares ............................ (626,394) (7,053,707)
Shares redeemed ...................... (758,579) (8,505,793)
------------ ------------
Net decrease ......................... (932,381) $(10,482,277)
============ ============
- --------------------------------------------------------------------------------
20
Merrill Lynch New York Municipal Bond Fund March 31, 2003
- --------------------------------------------------------------------------------
Class B Shares for the Year Dollar
Ended September 30, 2002 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 1,079,355 $ 12,006,378
Shares issued to share-
holders in reinvestment
of dividends & distributions ......... 216,586 2,403,788
------------ ------------
Total issued ......................... 1,295,941 14,410,166
Automatic conversion
of shares ............................ (1,435,785) (15,988,829)
Shares redeemed ...................... (1,934,016) (21,517,343)
------------ ------------
Net decrease ......................... (2,073,860) $(23,096,006)
============ ============
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C Shares for the Six Months Dollar
Ended March 31, 2003 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 210,587 $ 2,364,904
Shares issued to
shareholders in reinvestment
of dividends ........................... 18,183 203,289
----------- -----------
Total issued ........................... 228,770 2,568,193
Shares redeemed ........................ (108,905) (1,215,189)
----------- -----------
Net increase ........................... 119,865 $ 1,353,004
=========== ===========
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C Shares for the Year Dollar
Ended September 30, 2002 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 725,709 $ 8,087,057
Shares issued to share-
holders in reinvestment
of dividends & distributions ........... 25,464 283,327
----------- -----------
Total issued ........................... 751,173 8,370,384
Shares redeemed ........................ (245,235) (2,705,457)
----------- -----------
Net increase ........................... 505,938 $ 5,664,927
=========== ===========
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class I Shares for the Six Months Dollar
Ended March 31, 2003+ Shares Amount
- --------------------------------------------------------------------------------
Shares sold ............................ 43,463 $ 485,993
Shares issued to
shareholders in reinvestment
of dividends ........................... 11,935 133,346
----------- -----------
Total issued ........................... 55,398 619,339
Shares redeemed ........................ (162,960) (1,820,364)
----------- -----------
Net decrease ........................... (107,562) $(1,201,025)
=========== ===========
- --------------------------------------------------------------------------------
+ Effective April 14, 2003, Class A Shares were redesignated Class I shares.
- --------------------------------------------------------------------------------
Class I Shares for the Year Dollar
Ended September 30, 2002+ Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 439,027 $ 4,875,103
Shares issued to share-
holders in reinvestment
of dividends & distributions ......... 31,100 345,123
------------ ------------
Total issued ......................... 470,127 5,220,226
Shares redeemed ...................... (1,003,898) (11,174,782)
------------ ------------
Net decrease ......................... (533,771) $ (5,954,556)
============ ============
- --------------------------------------------------------------------------------
+ Effective April 14, 2003, Class A Shares were redesignated Class I shares.
5. Short-Term Borrowings:
The Fund, along with certain other funds managed by FAM and its affiliates, is a
party to a $500,000,000 credit agreement with Bank One, N.A. and certain other
lenders. The Fund may borrow under the credit agreement to fund shareholder
redemptions and for other lawful purposes other than for leverage. The Fund may
borrow up to the maximum amount allowable under the Fund's current prospectus
and statement of additional information, subject to various other legal,
regulatory or contractual limits. The Fund pays a commitment fee of .09% per
annum based on the Fund's pro rata share of the unused portion of the credit
agreement. Amounts borrowed under the credit agreement bear interest at a rate
equal to, at each fund's election, the Federal Funds rate plus .50% or a base
rate as determined by Bank One, N.A. On November 29, 2002, the credit agreement
was renewed for one year under the same terms, except that the total commitment
was reduced from $1,000,000,000 to $500,000,000. The Fund did not borrow under
the credit agreement during the six months ended March 31, 2003.
6. Capital Loss Carryforward:
On September 30, 2002, the Fund had a net capital loss carryforward of
$15,773,496, of which $3,350,470 expires in 2008 and $12,423,026 expires in
2009. This amount will be available to offset like amounts of any future taxable
gains.
21
Merrill Lynch New York Municipal Bond Fund March 31, 2003
OFFICERS AND TRUSTEES
Terry K. Glenn, President and Trustee
James H. Bodurtha, Trustee
Joe Grills, Trustee
Herbert I. London, Trustee
Andre F. Perold, Trustee
Roberta Cooper Ramo, Trustee
Robert S. Salomon, Jr., Trustee
Stephen B. Swensrud, Trustee
Kenneth A. Jacob, Senior Vice President
John M. Loffredo, Senior Vice President
Roberto Roffo, Vice President
Donald C. Burke, Vice President and Treasurer
Brian D. Stewart, Secretary
- --------------------------------------------------------------------------------
Melvin R. Seiden, Trustee of Merrill Lynch New York Municipal Bond Fund, has
recently retired. The Fund's Board of Trustees wishes Mr. Seiden well in his
retirement.
- --------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
800-637-3863
22
[LOGO] Merrill Lynch Investment Managers
[GRAPHICS OMITTED]
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 New York Municipal Bond Fund of
Merrill Lynch Multi-State Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
[RECYCLED LOGO] Printed on post-consumer recycled paper #10344--3/03
Item 2 - Did registrant adopt a code of ethics, as of the end of the period
covered by this report, that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party? If not, why not? Briefly describe any amendments or
waivers that occurred during the period. State here if code of
ethics/amendments/waivers are on website and give website address-.
State here if fund will send code of ethics to shareholders without
charge upon request-- N/A (not answered until July 15, 2003 and only
annually for funds)
Item 3 - Did the registrant's board of directors determine that the
registrant either: (i) has at least one audit committee financial
expert serving on its audit committee; or (ii) does not have an audit
committee financial expert serving on its audit committee? If yes,
disclose name of financial expert and whether he/she is "independent,"
(fund may, but is not required, to disclose name/independence of more
than one financial expert) If no, explain why not. -N/A (not answered
until July 15, 2003 and only annually for funds)
Item 4 - Disclose annually only (not answered until December 15, 2003)
(a) Audit Fees - Disclose aggregate fees billed for each of the last two
fiscal years for professional services rendered by the
principal accountant for the audit of the registrant's
annual financial statements or services that are
normally provided by the accountant in connection with
statutory and regulatory filings or engagements for
those fiscal years. N/A.
(b) Audit-Related Fees - Disclose aggregate fees billed in each of the
last two fiscal years for assurance and related
services by the principal accountant that are
reasonably related to the performance of the
audit of the registrant's financial statements
and are not reported under paragraph (a) of this
Item. Registrants shall describe the nature of
the services comprising the fees disclosed under
this category. N/A.
(c) Tax Fees - Disclose aggregate fees billed in each of the last two
fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and
tax planning. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
N/A.
(d) All Other Fees - Disclose aggregate fees billed in each of the last
two fiscal years for products and services provided
by the principal accountant, other than the services
reported in paragraphs (a) through (c) of this Item.
Registrants shall describe the nature of the
services comprising the fees disclosed under this
category. N/A.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. N/A.
(e)(2) Disclose the percentage of services described in each of paragraphs
(b) through (d) of this Item that were approved by the audit
committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X. N/A.
(f) If greater than 50%, disclose the percentage of hours expended on
the principal accountant's engagement to audit the registrant's
financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal
accountant's full-time, permanent employees. N/A.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to
the registrant's investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the adviser
that provides ongoing services to the registrant for each of the
last two fiscal years of the registrant. N/A.
(h) Disclose whether the registrant's audit committee has considered
whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence. N/A.
Item 5 - If the registrant is a listed issuer as defined in Rule 10A-3 under
the Exchange Act, state whether or not the registrant has a
separately-designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act. If the
registrant has such a committee, however designated, identify each
committee member. If the entire board of directors is acting as the
registrant's audit committee in Section 3(a)(58)(B) of the Exchange
Act, so state.
If applicable, provide the disclosure required by Rule 10A-3(d) under
the Exchange Act regarding an exemption from the listing standards for
audit committees.
(Listed issuers must be in compliance with the new listing rules by the
earlier of their first annual shareholders meeting after January 2004,
or October 31, 2004 (annual requirement))
Item 6 - Reserved
Item 7 - For closed-end funds that contain voting securities in their
portfolio, describe the policies and procedures that it uses to
determine how to vote proxies relating to those portfolio securities.
N/A (not answered until July 1, 2003)
Item 8 -- Reserved
Item 9(a) - Disclose the conclusions of the registrant's principal executive
officer or officers and principal financial officer or officers, or
persons performing similar functions, about the effectiveness of the
registrant's disclosure controls and procedures (as defined in Rule
30a-2(c) under the Act (17 CFR 270.30a-2(c))) based on their
evaluation of these controls and procedures as of a date within 90
days of the filing date of the report that includes the disclosure
required by this paragraph. N/A (not answered until July 15, 2003
and only annually for funds)
Item 9(b) -- There were no significant changes in the registrant's internal
controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
Item 10 - Exhibits
10(a)- Attach code of ethics or amendments/waivers, unless code of ethics or
amendments/waivers is on website or offered to shareholders upon
request without charge. N/A.
10(b) - Attach certifications pursuant to Section 302 of the Sarbanes-Oxley
Act. Attached hereto.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Merrill Lynch New York Municipal Bond Fund of Merrill Lynch Multi-State
Municipal Series Trust
By: /s/ Terry K. Glenn
----------------------------
Terry K. Glenn,
President of
Merrill Lynch New York Municipal Bond Fund of Merrill Lynch
Multi-State Municipal Series Trust
Date: May 21, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Terry K. Glenn
----------------------------
Terry K. Glenn,
President of
Merrill Lynch New York Municipal Bond Fund of Merrill Lynch
Multi-State Municipal Series Trust
Date: May 21, 2003
By: /s/ Donald C. Burke
----------------------------
Donald C. Burke,
Chief Financial Officer of
Merrill Lynch New York Municipal Bond Fund of Merrill Lynch
Multi-State Municipal Series Trust
Date: May 21, 2003
Attached hereto as an exhibit are the certifications pursuant to Section 906 of
the Sarbanes-Oxley Act.