UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-04375
Name of Fund: Merrill Lynch New Jersey 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: Robert C. Doll, Jr., Chief Executive
Officer, Merrill Lynch New Jersey 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: 07/31/05
Date of reporting period: 08/01/04 - 01/31/05
Item 1 - Report to Stockholders
[LOGO] Merrill Lynch Investment Managers www.mlim.ml.com
Merrill Lynch
New Jersey Municipal Bond Fund
Semi-Annual Report
January 31, 2005
[LOGO] Merrill Lynch Investment Managers
Merrill Lynch New Jersey Municipal Bond Fund
Portfolio Information as of January 31, 2005
Percent of Total
Distribution by Market Sector Investments
- --------------------------------------------------------------------------------
General Obligation Bonds ................................... 15.3%
Other Revenue Bonds ........................................ 84.3
Mutual Funds ............................................... 0.4
- --------------------------------------------------------------------------------
Quality Ratings by Percent of Total
S&P/Moody's Investments
- --------------------------------------------------------------------------------
AAA/Aaa ................................................. 64.7%
AA/Aa ................................................... 4.9
A/A ..................................................... 7.2
BBB/Baa ................................................. 12.3
BB/Ba ................................................... 1.6
B/B ..................................................... 4.4
CCC/Caa ................................................. 0.7
NR (Not Rated) .......................................... 3.8
Other* .................................................. 0.4
- --------------------------------------------------------------------------------
* Includes portfolio holdings in short-term securities.
Officers and Trustees
Robert C. Doll, Jr., President and Trustee
James H. Bodurtha, Trustee
Joe Grills, Trustee
Herbert I. London, 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
Theodore R. Jaeckel Jr., Vice President
Donald C. Burke, Vice President and Treasurer
Jeffrey Hiller, Chief Compliance Officer
Alice A. Pellegrino, Secretary
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
- --------------------------------------------------------------------------------
Andre F. Perold resigned as a Trustee of Merrill Lynch New Jersey Municipal Bond
Fund of Merrill Lynch Multi-State Municipal Series Trust effective October 22,
2004.
Effective January 1, 2005, Terry K. Glenn retired as President and Trustee of
the Fund. The Fund's Board of Trustees wishes Mr. Glenn well in his retirement.
Effective January 1, 2005, Robert C. Doll, Jr. became President and Trustee of
the Fund.
- --------------------------------------------------------------------------------
2 MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005
A Letter From the President
Dear Shareholder
The U.S. equity market ended the current reporting period in positive territory,
although not without some suspense along the way. Fixed income markets also
performed well, with high yield bond investors enjoying some of the best
returns.
Total Returns as of January 31, 2005 6-month 12-month
====================================================================================
Equities (Standard & Poor's 500 Index) +8.16% +6.23%
- ------------------------------------------------------------------------------------
Fixed income (Lehman Brothers Aggregate Bond Index) +3.81 +4.16
- ------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +4.80 +4.86
- ------------------------------------------------------------------------------------
High yield bonds (Credit Suisse First Boston High Yield Index) +7.85 +9.81
- ------------------------------------------------------------------------------------
Over the past year, the U.S. economy transitioned from dependence on record
monetary and fiscal stimulus to a broad-based, high-productivity,
high-profit-margin growth engine. The year also marked the end of one of the
most aggressive Federal Reserve Board (Fed) policy periods in history as
deflation concerns, prevalent at the beginning of 2004, gave way to modest
inflation scares -- notably, food prices in the spring and energy prices in the
fall.
The Fed more than doubled the federal funds rate, increasing it from 1% to 2.25%
in five separate moves between June and December 2004. Yet, even as the Fed
raised its target short-term interest rate, long-term bond yields were little
changed year over year as buying interest on the part of foreign central banks
remained strong. The yield on the 10-year Treasury note stood at 4.14% on
January 31, 2005. Despite very strong earnings growth, stocks remained in a
narrow trading range for most of 2004, but rebounded nicely in the fourth
quarter as election uncertainties and energy price concerns dissipated. January,
the first month of the new year and the final month of the current reporting
period, was a challenging one for equities as reflected in the -2.44% return of
the S&P 500 Index for the month.
As we ended the current reporting period, the economy and earnings growth were
beginning to slow and the Fed appeared poised to continue moving interest rates
higher (and, in fact, raised the federal funds rate another 25 basis points on
February 2, 2005). Progress was being monitored on many fronts in Washington,
although concerns remained about the structural problems of debt and deficits,
as reflected by a significant decline in the U.S. dollar.
Looking ahead, the environment is likely to be a challenging one for investors.
At the start of the new year, we encourage you to meet with your financial
advisor to review your goals and asset allocation and to rebalance your
portfolio, as necessary, to ensure it remains aligned with your objectives and
risk tolerance. As always, we thank you for trusting Merrill Lynch Investment
Managers with your investment assets, and we look forward to serving you in the
months and years ahead.
Sincerely,
/s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
President and Trustee
MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005 3
[LOGO] Merrill Lynch Investment Managers
A Discussion With Your Fund's Portfolio Manager
The Fund significantly outperformed its broad market benchmark and its
Lipper category average as we focused on extending the portfolio's average
maturity by investing in longer-dated, higher-yielding bonds.
Discuss the recent market environment relative to municipal bonds.
Long-term bond yields exhibited significant declines over the past six months,
even as the Federal Reserve Board (the Fed) continued to raise short-term
interest rates. The associated rise in long-term bond prices, which move
opposite to yields, came as somewhat of a surprise given the generally positive
economic environment. Gross domestic product (GDP) in the United States grew at
a rate of 4% in the third quarter of 2004 and was recently estimated at a 3.1%
rate for the fourth quarter. During all of 2004, real GDP expanded at a rate of
4%, well above the 3% growth rate registered in 2003. Nevertheless, recent
improvements in domestic business activity have been offset by inflationary
measures remaining in the 1.5% - 2% range. The Fed's measured program of
interest rate increases, which brought the federal funds rate to 2.25% by
period-end, had limited market impact as monthly U.S. employment gains remained
modest. In addition, strong currency-related demand for U.S. Treasury issues
from many foreign governments has helped bolster fixed income bond prices. By
the end of January, long-term U.S. Treasury bond yields stood at 4.59%, a
decline of 70 basis points (.70%) over the past six months. The 10-year U.S.
Treasury note yield was 4.14% at period-end, representing a decline of 45 basis
points during the period.
While tax-exempt bond yields followed the same pattern as their taxable
counterparts, yield volatility in the municipal market was generally more
subdued. Long-term revenue bond yields, as measured by the Bond Buyer Revenue
Bond Index, fell 44 basis points during the past six months. According to
Municipal Market Data, AAA-rated issues maturing in 30 years saw their yields
decline 59 basis points to 4.43% while yields on AAA-rated issues maturing in 10
years declined 47 basis points to 3.48%.
Long-term tax-exempt bond yield ratios (relative to their taxable counterparts)
have remained in the 89% - 96% range, at or above their recent historic average
of 85% - 88%. These attractive yield ratios should continue to draw both
traditional and non-traditional investors to the municipal market. The positive
technical position should allow the municipal market to continue to outperform
the taxable market in the coming months.
Describe conditions in the State of New Jersey.
New Jersey has remained active in the debt market, as evidenced by a dramatic
increase in new-issue volume during the six-month period. In October, the state
issued approximately $1.5 billion in cigarette tax revenue bonds through the New
Jersey Economic Development Authority, the same agency that earlier issued
$807.5 million in motor vehicle surcharge revenue bonds. Proceeds from these two
securitizations were used to close the gap in the fiscal year 2005 budget.
The state continues to refinance and restructure its debt in an effort to
achieve short-term savings. However, with a projected budget deficit of more
than $4 billion for fiscal year 2006, it is uncertain how the bulk of the gap
will be closed. It has been widely reported that personal income taxes will not
be raised. In all, New Jersey's projected budget deficit, measured as a
percentage of general fund revenues, is among the highest in the nation for the
second consecutive year.
On a positive note, New Jersey's economy began to show signs of recovery last
year and revenue collections in fiscal year 2004 were very favorable to budget.
In response, the state increased spending in 2005. For the first five months of
fiscal year 2005, however, revenue collections were slightly unfavorable to
budget by 1.9%.
How did the Fund perform during the period in light of the existing market
conditions?
For the six-month period ended January 31, 2005, the Fund's Class A, Class B,
Class C and Class I Shares had total returns of +6.53%, +6.21%, +6.16% and
+6.48%, respectively, outperforming the +4.80% return of the benchmark Lehman
Brothers Municipal Bond Index. (Fund results shown do not reflect sales charges
and would be lower if sales charges were included. Complete performance
information can be found on pages 6 and 7 of this report to shareholders.) Fund
returns also significantly exceeded the +4.72% average return of the Lipper New
Jersey Municipal Debt Funds category. Unlike the Lehman Brothers Municipal Bond
Index, which measures the performance of municipal bonds nationally, the Lipper
category consists of funds that limit their investment to those securities
exempt from taxation in the State of New Jersey.
4 MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005
Fund performance benefited from our strategy of extending the portfolio's
average maturity in an effort to capitalize on what we perceived to be value in
the longer-dated part of the municipal yield curve. To this end, we sold
prerefunded bonds with effective maturities of less than 10 years and
reallocated the proceeds in longer-dated bonds. As the yield curve flattened
during the past six months, yields inside 10 years increased while yields beyond
that range declined. Under these conditions, our strategy of unloading shorter
maturities and putting the assets to work further out on the curve benefited
performance.
Also contributing positively to the Fund's relative results was favorable
security and credit selection. We held a fairly high percentage of assets in
low-investment and non-investment grade issues, as well as non-rated bonds. A
continued contraction in credit spreads over the past six months allowed
lower-rated issues to outperform higher-quality municipal bonds. In addition,
the increased yields offered by these lower-quality credits helped to maintain
the portfolio's competitive yield, an incremental advantage that was additive to
the Fund's total return over the past six months.
What changes were made to the portfolio during the period?
We continued with our strategy of extending the Fund's average maturity as bonds
were called from the portfolio and compelling investment opportunities arose. In
one instance, a corporate-related holding with a fairly large coupon was called
by the issuer. This presented us with an opportunity to reallocate the proceeds
into longer-dated, higher-quality issues that came to market as New Jersey
municipal issuance increased dramatically. In fact, we saw $12 billion in new
long-term debt issued in the state over the past six months -- 130% more than
the same six-month period a year ago. Much of the new-issue volume was made up
of deficit financing as the state sought to close its fiscal year 2005 budget
gap. This presented us with sufficient opportunity to accomplish our
restructuring goals and made for some attractive opportunities given the
relative cheapness of the New Jersey municipal market.
In terms of sector exposure, we increased the Fund's position in housing bonds,
an area where we had been underweighted. The active issuance during the period
gave us an opportunity to establish more of a market weighting in this sector.
How would you characterize the Fund's position at the close of the period?
We maintained a relatively neutral posture with respect to interest rates, as we
expect rates to increase, but at a measured pace. (In fact, the Fed increased
its target interest rate another 25 basis points shortly after the close of the
period, on February 2.) The portfolio's duration is on par with that of its
peers, which we believe positions the Fund to provide competitive returns
whether presented with either a rising or a falling interest rate environment.
We continue to focus on the Fund's credit profile as a means to generate
above-average performance. While credit spreads have already narrowed
substantially, we do not believe they are likely to widen in the very near term.
Fundamentals remain positive for corporate earnings growth, and we continue to
see demand for high yield municipal product, as evidenced by sustained flows
into high yield municipal bond funds. Taken together, we believe this should
further sustain investors' appetite for spread product, supporting our
investment emphasis in this area.
Theodore R. Jaeckel Jr., CFA
Vice President and Portfolio Manager
February 9, 2005
MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005 5
[LOGO] Merrill Lynch Investment Managers
Performance Data
About Fund Performance
Investors are able to purchase shares of the Fund through multiple pricing
alternatives:
o Class A Shares incur a maximum initial sales charge (front-end load) of 4%
and an account maintenance fee of 0.10% per year (but no distribution
fee).
o 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% per year and an
account maintenance fee of 0.25% per year. 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% per year and an
account maintenance fee of 0.25% per year. 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. Current performance may be lower or higher than the performance
data quoted. Refer to www.mlim.ml.com to obtain performance data current to the
most recent month-end. Performance results do not reflect the deduction of taxes
that a shareholder would pay on fund distributions or the redemption of fund
shares. Figures shown in each of the following tables assume reinvestment of all
dividends and capital gain distributions, if any, at net asset value on the
payable date. Investment return and principal value of shares will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
Dividends paid to each class of shares will vary because of the different levels
of account maintenance, distribution and transfer agency fees applicable to each
class, which are deducted from the income available to be paid to shareholders.
The Fund's Investment Adviser agreed to reimburse a portion of its fee. Without
such reimbursement, the Fund's performance would have been lower.
Recent Performance Results
6-Month 12-Month 10-Year Standardized
As of January 31, 2005 Total Return Total Return Total Return 30-Day Yield
==============================================================================================================
ML New Jersey Municipal Bond Fund Class A Shares* +6.53% +5.80% +74.05% 3.89%
- --------------------------------------------------------------------------------------------------------------
ML New Jersey Municipal Bond Fund Class B Shares* +6.21 +5.27 +66.94 3.65
- --------------------------------------------------------------------------------------------------------------
ML New Jersey Municipal Bond Fund Class C Shares* +6.16 +5.17 +65.28 3.55
- --------------------------------------------------------------------------------------------------------------
ML New Jersey Municipal Bond Fund Class I Shares* +6.48 +5.81 +75.62 3.99
- --------------------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index** +4.80 +4.86 +94.07 --
- --------------------------------------------------------------------------------------------------------------
* Investment results shown do not reflect sales charges; results would be
lower if a sales charge was included. Cumulative total investment returns
are based on changes in net asset values for the periods shown, and assume
reinvestment of all dividends and capital gains distributions at net asset
value on the payable date.
** This unmanaged Index consists of long-term revenue bonds, prerefunded
bonds, general obligation bonds and insured bonds.
6 MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005
Performance Data (concluded)
Average Annual Total Return
Return Without Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
One Year Ended 1/31/05 +5.80% +1.57%
- --------------------------------------------------------------------------------
Five Years Ended 1/31/05 +7.20 +6.33
- --------------------------------------------------------------------------------
Ten Years Ended 1/31/05 +5.70 +5.27
- --------------------------------------------------------------------------------
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
Return Return
Without CDSC With CDSC**
================================================================================
Class B Shares*
================================================================================
One Year Ended 1/31/05 +5.27% +1.27%
- --------------------------------------------------------------------------------
Five Years Ended 1/31/05 +6.75 +6.44
- --------------------------------------------------------------------------------
Ten Years Ended 1/31/05 +5.26 +5.26
- --------------------------------------------------------------------------------
* 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 1/31/05 +5.17% +4.17%
- --------------------------------------------------------------------------------
Five Years Ended 1/31/05 +6.66 +6.66
- --------------------------------------------------------------------------------
Ten Years Ended 1/31/05 +5.15 +5.15
- --------------------------------------------------------------------------------
* 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 1/31/05 +5.81% +1.57%
- --------------------------------------------------------------------------------
Five Years Ended 1/31/05 +7.29 +6.41
- --------------------------------------------------------------------------------
Ten Years Ended 1/31/05 +5.79 +5.36
- --------------------------------------------------------------------------------
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005 7
[LOGO] Merrill Lynch Investment Managers
Disclosure of Expenses
Shareholders of this Fund may incur the following charges: (a) expenses related
to transactions, including sales charges, redemption fees and exchange fees; and
(b) operating expenses including advisory fees, distribution fees including
12(b)-1 fees, and other Fund expenses. The following example (which is based on
a hypothetical investment of $1,000 invested on August 1, 2004 and held through
January 31, 2005) is intended to assist shareholders both in calculating
expenses based on an investment in the Fund and in comparing these expenses with
similar costs of investing in other mutual funds.
The first table below provides information about actual account values and
actual expenses. In order to estimate the expenses a shareholder paid during the
period covered by this report, shareholders can divide their account value by
$1,000 and then multiply the result by the number in the first line under the
heading entitled "Expenses Paid During the Period."
The second table below provides information about hypothetical account values
and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses. In order to assist
shareholders in comparing the ongoing expenses of investing in this Fund and
other funds, compare the 5% hypothetical example with the 5% hypothetical
examples that appear in other funds' shareholder reports.
The expenses shown in the table are intended to highlight shareholders ongoing
costs only and do not reflect any transactional expenses, such as sales charges,
redemption fees or exchange fees. Therefore, the second table is useful in
comparing ongoing expenses only, and will not help shareholders determine the
relative total expenses of owning different funds. If these transactional
expenses were included, shareholder expenses would have been higher.
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value August 1, 2004 to
August 1, 2004 January 31, 2005 January 31, 2005
=======================================================================================================
Actual
=======================================================================================================
Class A $1,000 $1,065.30 $4.81
- -------------------------------------------------------------------------------------------------------
Class B $1,000 $1,062.10 $6.93
- -------------------------------------------------------------------------------------------------------
Class C $1,000 $1,061.60 $7.44
- -------------------------------------------------------------------------------------------------------
Class I $1,000 $1,064.80 $4.35
=======================================================================================================
Hypothetical (5% annual return before expenses)**
=======================================================================================================
Class A $1,000 $1,020.41 $4.71
- -------------------------------------------------------------------------------------------------------
Class B $1,000 $1,018.35 $6.78
- -------------------------------------------------------------------------------------------------------
Class C $1,000 $1,017.85 $7.28
- -------------------------------------------------------------------------------------------------------
Class I $1,000 $1,020.86 $4.26
- -------------------------------------------------------------------------------------------------------
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (.93% for Class A, 1.34% for Class B, 1.44% for Class
C and .84% for Class I), multiplied by the average account value over the
period, multiplied by 183/365 (to reflect the one-half year period shown).
** Hypothetical 5% annual return before expenses is calculated by pro-rating
the number of days in the most recent fiscal half-year divided by 365.
8 MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005
Schedule of Investments (in Thousands)
Face
Amount Municipal Bonds Value
===================================================================================================================================
New Jersey--119.2%
- -----------------------------------------------------------------------------------------------------------------------------------
$ 3,500 Bergen County, New Jersey, Improvement Authority, School District, GO (Wyckoff
Township Board of Education Project), 5% due 4/01/2032 $ 3,702
---------------------------------------------------------------------------------------------------------
Camden County, New Jersey, Pollution Control Financing Authority, Solid Waste
Resource Recovery Revenue Refunding Bonds, AMT:
340 Series A, 7.50% due 12/01/2010 340
240 Series B, 7.50% due 12/01/2009 240
---------------------------------------------------------------------------------------------------------
1,200 Cape May Point, New Jersey, GO, 5.70% due 3/15/2013 1,289
---------------------------------------------------------------------------------------------------------
2,450 Delaware River Joint Toll Bridge Commission, Pennsylvania, Bridge Revenue
Refunding Bonds, 5% due 7/01/2024 2,586
---------------------------------------------------------------------------------------------------------
1,155 Evesham, New Jersey, Municipal Utilities Authority, Revenue Refunding Bonds,
Series A, 6.125% due 7/01/2010 (e) 1,335
---------------------------------------------------------------------------------------------------------
4,135 Garden State Preservation Trust of New Jersey, Capital Appreciation Revenue Bonds,
Series B, 5.24%* due 11/01/2027 (d) 1,409
---------------------------------------------------------------------------------------------------------
Garden State Preservation Trust of New Jersey, Open Space and Farmland
Preservation Revenue Bonds, Series A (d):
1,640 5.80% due 11/01/2022 1,860
2,080 5.75% due 11/01/2028 2,490
---------------------------------------------------------------------------------------------------------
1,705 Middlesex County, New Jersey, Improvement Authority, County--Guaranteed Revenue
Bonds (Golf Course Projects), 5.25% due 6/01/2026 1,854
---------------------------------------------------------------------------------------------------------
1,000 Middlesex County, New Jersey, Pollution Control Financing Authority, Revenue
Refunding Bonds (Amerada Hess Corporation), 6.05% due 9/15/2034 1,047
---------------------------------------------------------------------------------------------------------
New Jersey EDA, Cigarette Tax Revenue Bonds:
520 5.625% due 6/15/2019 554
400 5.75% due 6/15/2029 425
125 5.50% due 6/15/2031 130
230 5.75% due 6/15/2034 243
---------------------------------------------------------------------------------------------------------
New Jersey EDA, EDR (Masonic Charity Foundation of New Jersey):
600 5.25% due 6/01/2024 648
500 5.25% due 6/01/2032 533
---------------------------------------------------------------------------------------------------------
New Jersey EDA, First Mortgage Revenue Bonds (The Presbyterian Home):
1,330 Series A, 6.375% due 11/01/2031 1,359
1,630 Series B, 5.75% due 11/01/2031 1,625
---------------------------------------------------------------------------------------------------------
1,500 New Jersey EDA, First Mortgage Revenue Refunding Bonds (The Winchester Gardens at
Ward Homestead Project), Series A, 5.80% due 11/01/2031 1,555
---------------------------------------------------------------------------------------------------------
1,250 New Jersey EDA, IDR, Refunding (Newark Airport Marriott Hotel), 7% due 10/01/2014 1,312
---------------------------------------------------------------------------------------------------------
New Jersey EDA, Motor Vehicle Surcharge Revenue Bonds, Series A (e):
1,675 4.95%* due 7/01/2021 804
2,100 5% due 7/01/2029 2,208
880 5% due 7/01/2034 923
---------------------------------------------------------------------------------------------------------
425 New Jersey EDA, Retirement Community Revenue Bonds (Cedar Crest Village Inc.
Facility), Series A, 7.25% due 11/15/2031 448
---------------------------------------------------------------------------------------------------------
2,500 New Jersey EDA, Revenue Refunding Bonds (RWJ Health Care Corporation), 6.50%
due 7/01/2024 (d) 2,557
---------------------------------------------------------------------------------------------------------
400 New Jersey EDA, School Facilities Construction Revenue Bonds, Series I, 5%
due 9/01/2027 417
---------------------------------------------------------------------------------------------------------
875 New Jersey EDA, School Facilities Construction Revenue Refunding Bonds, Series K,
5.25% due 12/15/2015 (b) 996
---------------------------------------------------------------------------------------------------------
Portfolio Abbreviations
To simplify the listings of Merrill Lynch New Jersey 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 at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
EDA Economic Development Authority
EDR Economic Development Revenue Bonds
GO General Obligation Bonds
IDR Industrial Development Revenue Bonds
M/F Multi-Family
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005 9
[LOGO] Merrill Lynch Investment Managers
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
===================================================================================================================================
New Jersey (continued)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 1,000 New Jersey EDA, Solid Waste Disposal Facilities Revenue Bonds (Waste Management
Inc.), AMT, Series A, 5.30% due 6/01/2015 $ 1,066
---------------------------------------------------------------------------------------------------------
5,000 New Jersey EDA, Special Facility Revenue Bonds (Continental Airlines Inc.
Project), AMT, 6.25% due 9/15/2019 4,178
---------------------------------------------------------------------------------------------------------
2,000 New Jersey EDA, State Contract Revenue Refunding Bonds (Economic Fund), Series A,
5.25%* due 3/15/2021 (e) 973
---------------------------------------------------------------------------------------------------------
5,000 New Jersey EDA, State Lease Revenue Bonds (State Office Buildings Projects), 6.25%
due 6/15/2010 (a)(f) 5,798
---------------------------------------------------------------------------------------------------------
New Jersey Health Care Facilities Financing Authority Revenue Bonds:
1,150 (Pascack Valley Hospital Association), 6.625% due 7/01/2036 1,131
2,500 (Robert Wood Johnson University Hospital), 5.75% due 7/01/2025 2,733
1,500 (South Jersey Hospital), 6% due 7/01/2026 1,613
1,500 (Southern Ocean County Hospital), 5.125% due 7/01/2031 (i) 1,551
---------------------------------------------------------------------------------------------------------
New Jersey Health Care Facilities Financing Authority, Revenue Refunding Bonds:
910 (Atlantic City Medical Center), 6.25% due 7/01/2017 1,047
1,500 (Bayshore Community Hospital), 5.125% due 7/01/2032 (i) 1,554
600 (Capital Health System Inc.), Series A, 5.75% due 7/01/2023 646
1,250 (Saint Clare's Hospital Inc.), Series A, 4.75% due 7/01/2025 (i) 1,263
400 (Trinitas Hospital Obligation Group), 7.40% due 7/01/2020 459
---------------------------------------------------------------------------------------------------------
800 New Jersey State Educational Facilities Authority, Higher Education, Capital
Improvement Revenue Bonds, Series A, 5.125% due 9/01/2022 (a) 870
---------------------------------------------------------------------------------------------------------
New Jersey State Educational Facilities Authority Revenue Bonds:
1,685 (Bloomfield College), Series A, 6.85% due 7/01/2030 1,725
750 (Georgian Court College Project), Series C, 6.50% due 7/01/2033 845
1,000 (New Jersey Institute of Technology), Series G, 5.25% due 7/01/2019 (e) 1,106
1,120 (Public Library Project Grant Issue), Series A, 5.50% due 9/01/2019 (a) 1,265
1,000 (Rider University), Series A, 5.125% due 7/01/2028 (i) 1,054
715 (Rowan University), Series C, 5.125% due 7/01/2028 (e) 763
650 (Rowan University), Series C, 5% due 7/01/2034 (e) 682
---------------------------------------------------------------------------------------------------------
1,000 New Jersey State Educational Facilities Authority, Revenue Refunding Bonds
(Princeton Theological Seminary), 5% due 7/01/2026 1,060
---------------------------------------------------------------------------------------------------------
1,420 New Jersey State, GO, Refunding, Series L, 5.25% due 7/15/2017 (a) 1,626
---------------------------------------------------------------------------------------------------------
2,175 New Jersey State Housing and Mortgage Financing Agency, Capital Fund Program
Revenue Bonds, Series A, 4.70% due 11/01/2025 (d) 2,217
---------------------------------------------------------------------------------------------------------
New Jersey State Housing and Mortgage Financing Agency, M/F Revenue Bonds, AMT,
Series A (b):
4,910 4.70% due 11/01/2025 4,890
5,540 4.85% due 11/01/2030 5,564
7,315 4.90% due 11/01/2035 7,347
---------------------------------------------------------------------------------------------------------
9,185 New Jersey State Transportation Trust Fund Authority, Revenue Refunding Bonds,
RITR, Series RI, 9.275% due 6/15/2014 (c)(e) 9,789
---------------------------------------------------------------------------------------------------------
New Jersey State Transportation Trust Fund Authority, Transportation System
Revenue Refunding Bonds, Series B (e):
1,560 6.50% due 6/15/2010 1,821
940 6.50% due 6/15/2010 (g) 1,102
1,435 5.50% due 12/15/2015 1,659
1,800 5.50% due 12/15/2021 2,112
---------------------------------------------------------------------------------------------------------
1,510 New Jersey State Turnpike Authority, Turnpike Revenue Bonds, Series B, 5.15%*
due 1/01/2035 (a) 941
---------------------------------------------------------------------------------------------------------
1,000 New Jersey State Turnpike Authority, Turnpike Revenue Refunding Bonds, Series A,
5% due 1/01/2027 (b) 1,052
---------------------------------------------------------------------------------------------------------
970 Newark, New Jersey, Health Care Facility, Revenue Refunding Bonds (New Community
Urban Renewal), Series A, 5.20% due 6/01/2030 (h)(j) 1,033
---------------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
1,000 85th Series, 5.20% due 9/01/2018 1,127
1,000 93rd Series, 6.125% due 6/01/2094 1,198
---------------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey, Special Obligation Revenue Bonds (JFK
International Air Terminal LLC), AMT:
1,000 RIB, Series 157, 9.35% due 12/01/2022 (c) 1,173
1,750 Series 6, 6.25% due 12/01/2011 2,004
---------------------------------------------------------------------------------------------------------
1,500 South Jersey Port Corporation of New Jersey, Revenue Refunding Bonds, AMT, 5.20%
due 1/01/2023 1,569
---------------------------------------------------------------------------------------------------------
10 MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
===================================================================================================================================
New Jersey (concluded)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 1,715 Tobacco Settlement Financing Corporation of New Jersey, Asset-Backed Revenue
Refunding Bonds, 5.75% due 6/01/2032 $ 1,664
---------------------------------------------------------------------------------------------------------
1,095 Tobacco Settlement Financing Corporation of New Jersey Revenue Bonds, 7%
due 6/01/2041 1,132
---------------------------------------------------------------------------------------------------------
2,000 Union County, New Jersey, Utilities Authority, Senior Lease Revenue Refunding
Bonds (Ogden Martin System of Union, Inc.), AMT, Series A, 5.50% due 6/01/2010 (a) 2,209
---------------------------------------------------------------------------------------------------------
1,305 University of Medicine and Dentistry of New Jersey, COP, 5% due 6/15/2036 (e) 1,363
---------------------------------------------------------------------------------------------------------
University of Medicine and Dentistry, New Jersey, Revenue Bonds, Series A (a):
1,030 5.50% due 12/01/2027 1,160
1,500 5% due 12/01/2031 1,565
===================================================================================================================================
Guam--0.7%
- -----------------------------------------------------------------------------------------------------------------------------------
750 Commonwealth of the Northern Mariana Islands, Guam, GO, Series A, 6.75%
due 10/01/2033 776
===================================================================================================================================
Puerto Rico--2.1%
- -----------------------------------------------------------------------------------------------------------------------------------
1,170 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series HH, 5.25%
due 7/01/2029 (d) 1,270
---------------------------------------------------------------------------------------------------------
1,345 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 948
===================================================================================================================================
U.S. Virgin Islands--3.2%
- -----------------------------------------------------------------------------------------------------------------------------------
1,400 Virgin Islands Government Refinery Facilities Revenue Refunding Bonds (Hovensa
Coker Project), AMT, 6.50% due 7/01/2021 1,535
---------------------------------------------------------------------------------------------------------
750 Virgin Islands Public Finance Authority, Refinery Facilities Revenue Bonds
(Hovensa Refinery), AMT, 5.875% due 7/01/2022 798
---------------------------------------------------------------------------------------------------------
1,000 Virgin Islands Public Finance Authority, Senior Lien Revenue Bonds (Matching Fund
Loan Note), Series A, 5.25% due 10/01/2023 1,065
---------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Cost--$124,946)--125.2% 131,980
=========================================================================================================
MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005 11
[LOGO] Merrill Lynch Investment Managers
Schedule of Investments (concluded) (in Thousands)
Shares
Held Short-Term Securities Value
===================================================================================================================================
518 CMA New Jersey Municipal Money Fund (k) $ 518
---------------------------------------------------------------------------------------------------------
Total Short-Term Securities (Cost--$518)--0.5% 518
=========================================================================================================
Total Investments (Cost-- $125,464**) --125.7% 132,498
Liabilities in Excess of Other Assets--(25.7%) (27,090)
--------
Net Assets--100.0% $105,408
========
* Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase by the Fund.
** The cost and unrealized appreciation (depreciation) of investments as of
January 31, 2005, as computed for federal income tax purposes, were as
follows:
(in Thousands)
-------------------------------------------------------------------------
Aggregate cost ....................................... $ 125,351
=========
Gross unrealized appreciation ........................ $ 7,148
Gross unrealized depreciation ........................ (1)
---------
Net unrealized appreciation .......................... $ 7,147
=========
(a) AMBAC Insured.
(b) FGIC Insured.
(c) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(d) FSA Insured.
(e) MBIA Insured.
(f) Prerefunded.
(g) Escrowed to maturity.
(h) GNMA Collateralized.
(i) Radian Insured.
(j) FHA Insured.
(k) 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) were as follows:
(in Thousands)
--------------------------------------------------------------------------
Net Dividend
Affiliate Activity Income
--------------------------------------------------------------------------
CMA New Jersey Municipal Money Fund 505 $ 6
--------------------------------------------------------------------------
Financial futures contracts purchased as of January 31, 2005 were as
follows:
(in Thousands)
--------------------------------------------------------------------------
Number of Expiration Face Unrealized
Contracts Issue Date Value Depreciation
--------------------------------------------------------------------------
160 Ten-Year U.S. March
Treasury Note 2005 $17,935 $ (28)
--------------------------------------------------------------------------
Forward interest rate swaps outstanding as of January 31, 2005 were as
follows:
(in Thousands)
--------------------------------------------------------------------------
Notional Unrealized
Amount Depreciation
--------------------------------------------------------------------------
Receive a variable rate equal to 7-Day
Bond Market Association Municipal
Swap Index Rate and pay a fixed
rate of 3.837%
Broker, JPMorgan Chase Bank
Expires November 2018 $ 960 $ (15)
Receive a variable rate equal to 7-Day
Bond Market Association Municipal
Swap Index Rate and pay a fixed
rate of 4.128%
Broker, JPMorgan Chase Bank
Expires August 2026 $2,020 (61)
--------------------------------------------------------------------------
Total $ (76)
======
See Notes to Financial Statements.
12 MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005
Statement of Assets and Liabilities
As of January 31, 2005
=============================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value (identified
cost--$124,945,813) .............................................. $ 131,980,159
Investments in affiliated securities, at value (identified
cost--$517,924) .................................................. 517,924
Cash .............................................................. 78,032
Receivables:
Securities sold ................................................ $ 1,678,131
Interest ....................................................... 987,204
Dividends (including $17 from affiliates) ...................... 55 2,665,390
-------------
Prepaid expenses .................................................. 16,027
-------------
Total assets ...................................................... 135,257,532
-------------
=============================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized depreciation on forward interest rate swaps ............ 75,931
Payables:
Securities purchased ........................................... 29,508,432
Dividends to shareholders ...................................... 99,632
Beneficial interest redeemed ................................... 63,464
Investment adviser ............................................. 45,465
Other affiliates ............................................... 30,875
Distributor .................................................... 22,469
Variation margin ............................................... 2,501 29,772,838
-------------
Accrued expenses .................................................. 750
-------------
Total liabilities ................................................. 29,849,519
-------------
=============================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------
Net assets ........................................................ $ 105,408,013
=============
=============================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------
Class A Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized ...................................... $ 320,890
Class B Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized ...................................... 292,089
Class C Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized ...................................... 148,071
Class I Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized ...................................... 228,304
Paid-in capital in excess of par .................................. 106,283,917
Undistributed investment income--net .............................. $ 199,875
Accumulated realized capital losses--net .......................... (8,995,682)
Unrealized appreciation--net ...................................... 6,930,549
-------------
Total accumulated losses--net ..................................... (1,865,258)
-------------
Net Assets ........................................................ $ 105,408,013
=============
=============================================================================================================================
Net Asset Value
- -----------------------------------------------------------------------------------------------------------------------------
Class A--Based on net assets of $34,202,806 and 3,208,903 shares
of beneficial interest outstanding ............................... $ 10.66
=============
Class B--Based on net assets of $31,116,590 and 2,920,893 shares
of beneficial interest outstanding ............................... $ 10.65
=============
Class C--Based on net assets of $15,770,043 and 1,480,713 shares
of beneficial interest outstanding ............................... $ 10.65
=============
Class I--Based on net assets of $24,318,574 and 2,283,044 shares
of beneficial interest outstanding ............................... $ 10.65
=============
See Notes to Financial Statements.
MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005 13
[LOGO] Merrill Lynch Investment Managers
Statement of Operations
For the Six Months Ended January 31, 2005
=============================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------
Interest .......................................................... $ 2,863,258
Dividends from affiliates ......................................... 5,731
-------------
Total income ...................................................... 2,868,989
-------------
=============================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------
Investment advisory fees .......................................... $ 281,389
Account maintenance and distribution fees--Class B ................ 79,313
Account maintenance and distribution fees--Class C ................ 45,492
Accounting services ............................................... 43,010
Professional fees ................................................. 26,349
Printing and shareholder reports .................................. 20,485
Account maintenance fees--Class A ................................. 16,827
Registration fees ................................................. 9,672
Transfer agent fees--Class B ...................................... 8,349
Transfer agent fees--Class A ...................................... 7,383
Trustees' fees and expenses ....................................... 7,024
Pricing fees ...................................................... 5,693
Transfer agent fees--Class I ...................................... 4,770
Custodian fees .................................................... 4,116
Transfer agent fees--Class C ...................................... 3,869
Other ............................................................. 10,164
-------------
Total expenses before reimbursement ............................... 573,905
Reimbursement of expenses ......................................... (3,072)
-------------
Total expenses after reimbursement ................................ 570,833
-------------
Investment income--net ............................................ 2,298,156
-------------
=============================================================================================================================
Realized & Unrealized Gain (Loss)--Net
- -----------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments--net ............................................... 1,065,903
Futures contracts and forward interest rate swaps--net ......... (102,912) 962,991
-------------
Change in unrealized appreciation (depreciation) on:
Investments--net ............................................... 2,980,407
Futures contracts and forward interest rate swaps--net ......... 21,223 3,001,630
-------------------------------
Total realized and unrealized gain ................................ 3,964,621
-------------
Net Increase in Net Assets Resulting from Operations .............. $ 6,262,777
=============
See Notes to Financial Statements.
14 MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005
Statements of Changes in Net Assets
For the Six For the
Months Ended Year Ended
January 31, July 31,
Increase (Decrease) in Net Assets: 2005 2004
=============================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------
Investment income--net ............................................ $ 2,298,156 $ 5,305,424
Realized gain--net ................................................ 962,991 1,141,510
Change in unrealized appreciation (depreciation)--net ............. 3,001,630 (1,247,215)
-------------------------------
Net increase in net assets resulting from operations .............. 6,262,777 5,199,719
-------------------------------
=============================================================================================================================
Dividends to Shareholders
- -----------------------------------------------------------------------------------------------------------------------------
Investment income--net:
Class A ........................................................ (776,836) (1,559,760)
Class B ........................................................ (667,625) (1,710,570)
Class C ........................................................ (311,533) (679,451)
Class I ........................................................ (512,763) (1,303,645)
-------------------------------
Net decrease in net assets resulting from dividends to shareholders (2,268,757) (5,253,426)
-------------------------------
=============================================================================================================================
Beneficial Interest Transactions
- -----------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets derived from beneficial
interest transactions ............................................ 6,700,964 (17,156,270)
-------------------------------
=============================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets ........................... 10,694,984 (17,209,977)
Beginning of period ............................................... 94,713,029 111,923,006
-------------------------------
End of period* .................................................... $ 105,408,013 $ 94,713,029
===============================
* Undistributed investment income--net ......................... $ 199,875 $ 170,476
===============================
See Notes to Financial Statements.
MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005 15
[LOGO] Merrill Lynch Investment Managers
Financial Highlights
Class A
-------------------------------------------------------------
For the Six
Months Ended For the Year Ended July 31,
The following per share data and ratios have been derived January 31, -----------------------------------------------
from information provided in the financial statements. 2005 2004 2003 2002 2001
==================================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..... $ 10.24 $ 10.22 $ 10.43 $ 10.48 $ 9.94
-------------------------------------------------------------
Investment income--net ................... .25+ .51+ .50+ .48 .46
Realized and unrealized gain (loss)--net . .41 .01 (.21) (.05) .54
-------------------------------------------------------------
Total from investment operations ......... .66 .52 .29 .43 1.00
-------------------------------------------------------------
Less dividends from investment income--net (.24) (.50) (.50) (.48) (.46)
-------------------------------------------------------------
Net asset value, end of period ........... $ 10.66 $ 10.24 $ 10.22 $ 10.43 $ 10.48
=============================================================
==================================================================================================================================
Total Investment Return**
- ----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ....... 6.53%@ 5.14% 2.76% 4.22% 10.29%
=============================================================
==================================================================================================================================
Ratios to Average Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement ........... .93%* .91% .93% .94% .90%
=============================================================
Expenses ................................. .94%* .92% .93% .94% .90%
=============================================================
Investment income--net ................... 4.66%* 4.85% 4.79% 4.63% 4.50%
=============================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $ 34,203 $ 32,863 $ 27,868 $ 22,745 $ 17,424
=============================================================
Portfolio turnover ....................... 13.08% 30.76% 39.93% 41.39% 37.90%
=============================================================
* Annualized.
** Total investment returns exclude the effects of sales charges. The Fund's
Investment Adviser agreed to reimburse a portion of its fee. Without such
reimbursement, the Fund's performance would have been lower.
+ Based on average shares outstanding.
@ Aggregate total investment return.
See Notes to Financial Statements.
16 MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005
Financial Highlights (continued)
Class B
-------------------------------------------------------------
For the Six
Months Ended For the Year Ended July 31,
The following per share data and ratios have been derived January 31, -----------------------------------------------
from information provided in the financial statements. 2005 2004 2003 2002 2001
==================================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..... $ 10.24 $ 10.22 $ 10.43 $ 10.48 $ 9.93
-------------------------------------------------------------
Investment income--net ................... .22+ .46+ .46+ .44 .42
Realized and unrealized gain (loss)--net . .41 .02 (.22) (.05) .55
-------------------------------------------------------------
Total from investment operations ......... .63 .48 .24 .39 .97
-------------------------------------------------------------
Less dividends from investment income--net (.22) (.46) (.45) (.44) (.42)
-------------------------------------------------------------
Net asset value, end of period ........... $ 10.65 $ 10.24 $ 10.22 $ 10.43 $ 10.48
=============================================================
==================================================================================================================================
Total Investment Return**
- ----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ....... 6.21%@ 4.71% 2.34% 3.80% 9.95%
=============================================================
==================================================================================================================================
Ratios to Average Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement ........... 1.34%* 1.32% 1.34% 1.35% 1.30%
=============================================================
Expenses ................................. 1.35%* 1.33% 1.34% 1.35% 1.30%
=============================================================
Investment income--net ................... 4.27%* 4.44% 4.37% 4.21% 4.12%
=============================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $ 31,117 $ 31,781 $ 44,968 $ 62,716 $ 72,173
=============================================================
Portfolio turnover ....................... 13.08% 30.76% 39.93% 41.39% 37.90%
=============================================================
* Annualized.
** Total investment returns exclude the effects of sales charges. The Fund's
Investment Adviser agreed to reimburse a portion of its fee. Without such
reimbursement, the Fund's performance would have been lower.
+ Based on average shares outstanding.
@ Aggregate total investment return.
See Notes to Financial Statements.
MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005 17
[LOGO] Merrill Lynch Investment Managers
Financial Highlights (continued)
Class C
-------------------------------------------------------------
For the Six
Months Ended For the Year Ended July 31,
The following per share data and ratios have been derived January 31, -----------------------------------------------
from information provided in the financial statements. 2005 2004 2003 2002 2001
==================================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..... $ 10.24 $ 10.21 $ 10.42 $ 10.47 $ 9.93
-------------------------------------------------------------
Investment income--net ................... .22+ .45+ .45+ .43 .41
Realized and unrealized gain (loss)--net . .41 .02 (.22) (.05) .54
-------------------------------------------------------------
Total from investment operations ......... .63 .47 .23 .38 .95
-------------------------------------------------------------
Less dividends from investment income--net (.22) (.44) (.44) (.43) (.41)
-------------------------------------------------------------
Net asset value, end of period ........... $ 10.65 $ 10.24 $ 10.21 $ 10.42 $ 10.47
=============================================================
==================================================================================================================================
Total Investment Return**
- ----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ....... 6.16%@ 4.71% 2.24% 3.70% 9.74%
=============================================================
==================================================================================================================================
Ratios to Average Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement ........... 1.44%* 1.42% 1.44% 1.45% 1.40%
=============================================================
Expenses ................................. 1.45%* 1.43% 1.44% 1.45% 1.40%
=============================================================
Investment income--net ................... 4.17%* 4.34% 4.28% 4.12% 4.01%
=============================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $ 15,770 $ 14,903 $ 15,505 $ 13,375 $ 10,388
=============================================================
Portfolio turnover ....................... 13.08% 30.76% 39.93% 41.39% 37.90%
=============================================================
* Annualized.
** Total investment returns exclude the effects of sales charges. The Fund's
Investment Adviser agreed to reimburse a portion of its fee. Without such
reimbursement, the Fund's performance would have been lower.
+ Based on average shares outstanding.
@ Aggregate total investment return.
See Notes to Financial Statements.
18 MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005
Financial Highlights (concluded)
Class I
-------------------------------------------------------------
For the Six
Months Ended For the Year Ended July 31,
The following per share data and ratios have been derived January 31, -----------------------------------------------
from information provided in the financial statements. 2005 2004 2003 2002 2001
==================================================================================================================================
Per Share Operating Performance
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..... $ 10.24 $ 10.21 $ 10.43 $ 10.48 $ 9.93
-------------------------------------------------------------
Investment income--net ................... .25+ .52+ .50+ .49 .47
Realized and unrealized gain (loss)--net . .41 .02 (.21) (.05) .55
-------------------------------------------------------------
Total from investment operations ......... .66 .54 .29 .44 1.02
-------------------------------------------------------------
Less dividends from investment income--net (.25) (.51) (.51) (.49) (.47)
-------------------------------------------------------------
Net asset value, end of period ........... $ 10.65 $ 10.24 $ 10.21 $ 10.43 $ 10.48
=============================================================
==================================================================================================================================
Total Investment Return**
- ----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ....... 6.48%@ 5.35% 2.75% 4.33% 10.51%
=============================================================
==================================================================================================================================
Ratios to Average Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement ........... .84%* .81% .83% .84% .79%
=============================================================
Expenses ................................. .84%* .82% .83% .84% .79%
=============================================================
Investment income--net ................... 4.79%* 4.93% 4.88% 4.72% 4.62%
=============================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) . $ 24,319 $ 15,166 $ 23,582 $ 20,723 $ 23,969
=============================================================
Portfolio turnover ....................... 13.08% 30.76% 39.93% 41.39% 37.90%
=============================================================
* Annualized.
** Total investment returns exclude the effects of sales charges. The Fund's
Investment Adviser agreed to reimburse a portion of its fee. Without such
reimbursement, the Fund's performance would have been lower.
+ Based on average shares outstanding.
@ Aggregate total investment return.
See Notes to Financial Statements.
MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005 19
[LOGO] Merrill Lynch Investment Managers
Notes to Financial Statements
1. Significant Accounting Policies:
Merrill Lynch New Jersey Municipal Bond Fund (the "Fund") is part of Merrill
Lynch Multi-State Municipal Series Trust (the "Trust"). The Fund is registered
under the Investment Company Act of 1940, as amended, as a non-diversified,
open-end management investment company. The Fund's financial statements are
prepared in conformity with U.S. generally accepted accounting principles, which
may require the use of management accruals and estimates. Actual results may
differ from these estimates. These unaudited financial statements reflect all
adjustments, which are, in the opinion of management, necessary to present a
fair statement of the results of the interim period. All such adjustments are of
a normal, recurring nature. The Fund offers multiple classes of shares. Shares
of Class A and Class I are sold with a front-end sales charge. Shares of Class B
and Class C may be subject to a contingent deferred sales charge. All classes of
shares have identical voting, dividend, liquidation and other rights and the
same terms and conditions, except that Class 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 (except that
Class B shareholders may vote on certain changes to the Class A distribution
plan). 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 are traded primarily in the
over-the-counter markets and are valued at the last available bid price in the
over-the-counter market or on the basis of values as obtained by a pricing
service. Pricing services use valuation matrixes that incorporate both
dealer-supplied valuations and valuation models. The procedures of the pricing
service and its valuations are reviewed by the officers of the Trust under the
general direction of the Board of Trustees. Such valuations and procedures are
reviewed periodically by the Board of Trustees of the Fund. Financial futures
contracts and options thereon, which are traded on exchanges, are valued at
their closing prices as of the close of such exchanges. Options written or
purchased are valued at the last sale price in the case of exchange-traded
options. In the case of options traded in the over-the-counter market, valuation
is the last asked price (options written) or the last bid price (options
purchased). Swap agreements are valued by quoted fair values received daily by
the Fund's pricing service. Short-term investments with a remaining maturity of
60 days or less are valued at amortized cost, which approximates market value,
under which method the investment is valued at cost and any premium or discount
is amortized on a straight line basis to maturity. Investments in open-end
investment companies are valued at their net asset value each business day.
Securities and other assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Board of Trustees of the Trust.
(b) Derivative financial instruments -- The Fund may engage in various portfolio
investment strategies both to increase the return of the Fund and to hedge, or
protect, its exposure to interest rate movements and movements in the securities
markets. Losses may arise 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. 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 may enter into forward interest
rate swaps. In a forward interest rate swap, the Fund and the counterparty
agree to make periodic net payments on a specified notional contract
amount, commencing on a specified future effective date, unless terminated
earlier. 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
20 MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005
Notes to Financial Statements (continued)
all of its taxable income to its shareholders. Therefore, no federal income tax
provision is required.
(d) Security transactions and investment income -- Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. 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 also entered into a
Distribution Agreement and Distribution Plan 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. The Investment Adviser agreed to reimburse its management fee by the
amount of management fees the Fund pays to FAM indirectly through its investment
in CMA New Jersey Municipal Money Fund. For the six months ended January 31,
2005, FAM reimbursed the Fund in the amount of $3,072.
Pursuant to the Distribution Plan adopted by the Fund in accordance with Rule
12b-1 under the Investment Company Act of 1940, the Fund pays the Distributor
ongoing account maintenance and distribution fees. The fees are accrued daily
and paid monthly at annual rates based upon the average daily net assets of the
shares as follows:
- --------------------------------------------------------------------------------
Account 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"), an affiliate of FAM, 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 January 31, 2005, FAMD earned underwriting discounts
and MLPF&S earned dealer concessions on sales of the Fund's Class A and Class I
Shares as follows:
- --------------------------------------------------------------------------------
FAMD MLPF&S
- --------------------------------------------------------------------------------
Class A .............................. $ 919 $6,511
Class I .............................. $ 512 $2,625
- --------------------------------------------------------------------------------
For the six months ended January 31, 2005, MLPF&S received contingent deferred
sales charges of $5,632 and $2,024 relating to transactions in Class B and Class
C Shares, respectively.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is
the Fund's transfer agent.
For the six months ended January 31, 2005, the Fund reimbursed FAM $1,068 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.
MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005 21
[LOGO] Merrill Lynch Investment Managers
Notes to Financial Statements (continued)
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the six
months ended January 31, 2005 were $44,280,906 and $13,945,454, respectively.
4. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from beneficial interest
transactions was $6,700,964 and $(17,156,270) for the six months ended January
31, 2005 and the year ended July 31, 2004, respectively.
Transactions in shares of beneficial interest for each class were as follows:
- --------------------------------------------------------------------------------
Class A Shares for the Six Months Dollar
Ended January 31, 2005 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 65,128 $ 685,751
Automatic conversion of shares ........... 90,104 939,219
Shares issued to shareholders in
reinvestment of dividends ............. 38,642 405,217
-------------------------------
Total issued ............................. 193,874 2,030,187
Shares redeemed .......................... (192,717) (2,016,726)
-------------------------------
Net increase ............................. 1,157 $ 13,461
===============================
- --------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended July 31, 2004 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 150,532 $ 1,575,581
Automatic conversion of shares ........... 722,686 7,507,846
Shares issued to shareholders in
reinvestment of dividends ............. 79,266 823,918
-------------------------------
Total issued ............................. 952,484 9,907,345
Shares redeemed .......................... (471,149) (4,872,400)
-------------------------------
Net increase ............................. 481,335 $ 5,034,945
===============================
- --------------------------------------------------------------------------------
Class B Shares for the Six Months Dollar
Ended January 31, 2005 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 92,934 $ 971,731
Shares issued to shareholders in
reinvestment of dividends ............. 28,793 301,676
-------------------------------
Total issued ............................. 121,727 1,273,407
-------------------------------
Automatic conversion of shares ........... (90,119) (939,219)
Shares redeemed .......................... (214,591) (2,246,893)
-------------------------------
Total redeemed ........................... (304,710) (3,186,112)
-------------------------------
Net decrease ............................. (182,983) $ (1,912,705)
===============================
- --------------------------------------------------------------------------------
Class B Shares for the Year Dollar
Ended July 31, 2004 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 162,288 $ 1,694,579
Shares issued to shareholders in
reinvestment of dividends ............. 77,087 801,559
-------------------------------
Total issued ............................. 239,375 2,496,138
-------------------------------
Automatic conversion of shares ........... (722,854) (7,507,846)
Shares redeemed .......................... (814,445) (8,455,258)
-------------------------------
Total redeemed ........................... (1,537,299) (15,963,104)
-------------------------------
Net decrease ............................. (1,297,924) $(13,466,966)
===============================
- --------------------------------------------------------------------------------
Class C Shares for the Six Months Dollar
Ended January 31, 2005 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 109,412 $ 1,145,781
Shares issued to shareholders in
reinvestment of dividends ............. 14,989 157,035
-------------------------------
Total issued ............................. 124,401 1,302,816
Shares redeemed .......................... (99,567) (1,036,316)
-------------------------------
Net increase ............................. 24,834 $ 266,500
===============================
- --------------------------------------------------------------------------------
Class C Shares for the Year Dollar
Ended July 31, 2004 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 203,420 $ 2,120,617
Shares issued to shareholders in
reinvestment of dividends ............. 40,197 417,712
-------------------------------
Total issued ............................. 243,617 2,538,329
Shares redeemed .......................... (306,031) (3,159,529)
-------------------------------
Net decrease ............................. (62,414) $ (621,200)
===============================
- --------------------------------------------------------------------------------
Class I Shares for the Six Months Dollar
Ended January 31, 2005 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 969,184 $ 10,089,136
Shares issued to shareholders
in reinvestment of dividends .......... 19,358 202,784
-------------------------------
Total issued ............................. 988,542 10,291,920
Shares redeemed .......................... (186,765) (1,958,212)
-------------------------------
Net increase ............................. 801,777 $ 8,333,708
===============================
- --------------------------------------------------------------------------------
Class I Shares for the Year Dollar
Ended July 31, 2004 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .............................. 1,120,326 $ 11,851,253
Shares issued to shareholders
in reinvestment of dividends .......... 41,017 426,097
-------------------------------
Total issued ............................. 1,161,343 12,277,350
Shares redeemed .......................... (1,988,722) (20,380,399)
-------------------------------
Net decrease ............................. (827,379) $ (8,103,049)
===============================
22 MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005
Notes to Financial Statements (concluded)
5. Short-Term Borrowings:
The Trust, on behalf of the Fund, along with certain other funds managed by FAM
and its affiliates, is a party to a $500,000,000 credit agreement with a group
of 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 .07% 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 defined in the credit agreement. The Fund did not borrow under the
credit agreement during the six months ended January 31, 2005. On November 26,
2004, the credit agreement was renewed for one year under substantially the same
terms.
6. Capital Loss Carryforward:
On July 31, 2004, the Fund had a net capital loss carryforward of $9,470,810, of
which $1,460,424 expires in 2008, $6,200,024 expires in 2009 and $1,810,362
expires in 2011. This amount will be available to offset like amounts of any
future taxable gains.
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the
SEC's Public Reference Room in Washington, DC. Information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Electronic Delivery
The Fund offers electronic delivery of communications to its shareholders. In
order to receive this service, you must register your account and provide us
with e-mail information. To sign up for this service, simply access this Web
site at http://www.icsdelivery.com/live and follow the instructions. When you
visit this site, you will obtain a personal identification number (PIN). You
will need this PIN should you wish to update your e-mail address, choose to
discontinue this service and/or make any other changes to the service. This
service is not available for certain retirement accounts at this time.
MERRILL LYNCH NEW JERSEY MUNICIPAL BOND FUND JANUARY 31, 2005 23
[LOGO] Merrill Lynch Investment Managers www.mlim.ml.com
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.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free 1-800-MER-FUND (1-800-637-3863); (2)
at www.mutualfunds.ml.com; and (3) on the Securities and Exchange Commission's
Web site at http://www.sec.gov. Information about how the Fund voted proxies
relating to securities held in the Fund's portfolio during the most recent
12-month period ended June 30 is available (1) at www.mutualfunds.ml.com and (2)
on the Securities and Exchange Commission's Web site at http://www.sec.gov.
Merrill Lynch New Jersey Municipal Bond Fund of
Merrill Lynch Multi-State Municipal Series Trust
Box 9011
Princeton, NJ
08543-9011
#11298 -- 1/05
Item 2 - Code of Ethics - Not Applicable to this semi-annual report
Item 3 - Audit Committee Financial Expert - Not Applicable to this semi-annual
report
Item 4 - Principal Accountant Fees and Services - Not Applicable to this
semi-annual report
Item 5 - Audit Committee of Listed Registrants - Not Applicable
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable
Item 8 - Portfolio Managers of Closed-End Management Investment Companies - Not
Applicable
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - Not Applicable
Item 11 - Controls and Procedures
11(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others particularly
during the period in which this report is being prepared. The
registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation
of these controls and procedures as of a date within 90 days prior to
the filing date of this report.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the last fiscal half-year of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - Not Applicable to this semi-annual report
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Merrill Lynch New Jersey Municipal Bond Fund of Merrill Lynch Multi-State
Municipal Series Trust
By: /s/ Robert C. Doll, Jr.
------------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
Merrill Lynch New Jersey Municipal Bond Fund of Merrill Lynch Multi-State
Municipal Series Trust
Date: March 21, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Robert C. Doll, Jr.
------------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
Merrill Lynch New Jersey Municipal Bond Fund of Merrill Lynch Multi-State
Municipal Series Trust
Date: March 21, 2005
By: /s/ Donald C. Burke
------------------------------------
Donald C. Burke,
Chief Financial Officer of
Merrill Lynch New Jersey Municipal Bond Fund of Merrill Lynch Multi-State
Municipal Series Trust
Date: March 21, 2005