UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR/A
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-04375
Name of Fund: BlackRock New York Municipal Bond Fund of BlackRock 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, BlackRock New York Municipal Bond Fund of BlackRock 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: 09/30/06
Date of reporting period: 10/01/05 - 09/30/06
Item 1 - Report to Stockholders
ALTERNATIVES BLACKROCK SOLUTIONS EQUITIES
FIXED INCOME LIQUIDITY REAL ESTATE
BlackRock New York BLACKROCK
Municipal Bond Fund
OF BLACKROCK MULTI-STATE
MUNICIPAL SERIES TRUST
ANNUAL REPORT | SEPTEMBER 30, 2006
(As Restated)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
BlackRock New York Municipal Bond Fund
- --------------------------------------------------------------------------------
The financial statements and financial highlights in this report have been
restated as described in Note 8 to the financial statements. Other information
in this report affected by the restatement has been revised.
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Portfolio Information as of September 30, 2006
Quality Ratings by Percent of
S&P/Moody's Total Investments
- --------------------------------------------------------------------------------
AAA/Aaa ........................................................... 43.9%
AA/Aa ............................................................. 14.9
A/A ............................................................... 10.0
BBB/Baa ........................................................... 15.1
BB/Ba ............................................................. 2.3
B/B ............................................................... 0.8
CCC/Caa ........................................................... 2.3
NR (Not Rated) .................................................... 10.7
Other* ............................................................ --+
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* Includes portfolio holdings in short-term investments.
+ Amount is less than 0.1%.
Percent of
Distribution by Market Sector Total Investments
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Other Revenue Bonds ................................................... 82.8%
General Obligation Bonds .............................................. 11.7
Prerefunded Bonds+ .................................................... 5.5
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+ Backed by an escrow fund.
Proxy Results
During the six-month period ended September 30, 2006, BlackRock New York
Municipal Bond Fund of BlackRock Multi-State Municipal Series Trust's
shareholders voted on the following proposals, which were approved at a
shareholders' meeting on July 31, 2006. A description of the proposals and
number of shares voted were as follows:
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Shares Voted Shares Voted Shares Voted
For Against Abstain
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To approve a new investment advisory agreement
with BlackRock Advisors, Inc. 13,465,113 614,774 550,469
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To approve a contingent subadvisory agreement
with BlackRock Advisors, Inc. 13,516,130 640,637 473,588
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2 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
A Letter to Shareholders
Dear Shareholder
It is my pleasure to welcome you to BlackRock.
On September 29, 2006, BlackRock, Inc. ("BlackRock") and Merrill Lynch
Investment Managers, L.P. ("MLIM") united to form one of the largest asset
management firms in the world. Now with more than $1 trillion in assets under
management, over 4,000 employees in 18 countries and representation in key
markets worldwide, BlackRock's global presence means greater depth and scale to
serve you.
The new BlackRock unites some of the finest money managers in the industry. Our
ranks include more than 500 investment professionals globally -- portfolio
managers, research analysts, risk management professionals and traders. With
offices strategically located around the world, our investment professionals
have in-depth local knowledge and the ability to leverage our global presence
and robust infrastructure to deliver focused investment solutions. BlackRock's
professional investors are supported by disciplined investment processes and
best-in-class technology, ensuring that our portfolio managers are well equipped
to research, uncover and capitalize on the opportunities the world's markets
have to offer.
The BlackRock culture emphasizes excellence, teamwork and integrity in the
management of a variety of equity, fixed income, cash management, alternative
investment and real estate products. Our firm's core philosophy is grounded in
the belief that experienced investment and risk professionals using disciplined
investment processes and sophisticated analytical tools can consistently add
value to client portfolios.
As you probably are aware, most former MLIM investment products now carry the
"BlackRock" name. This is reflected in newspapers and online fund reporting
resources. Your account statements, as of the October month-end reporting
period, also reflect the BlackRock name. Unless otherwise communicated to you,
your funds maintain the same investment objectives that they did prior to the
combination of MLIM and BlackRock. Importantly, this union does not affect your
brokerage account or your relationship with your financial advisor. Clients of
Merrill Lynch remain clients of Merrill Lynch.
We view this combination of asset management leaders as a complementary union
that reinforces our commitment to shareholders. Individually, each firm made
investment performance its single most important mission. Together, we are even
better prepared to capitalize on market opportunities on behalf of our
shareholders. Our focus on investment excellence is accompanied by an unwavering
commitment to service, enabling us to assist clients, in cooperation with their
financial professionals, in working toward their investment goals. We thank you
for allowing us the opportunity, and we look forward to serving your investment
needs in the months and years ahead as the new BlackRock.
Sincerely,
/s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
Vice Chairman
BlackRock, Inc.
Data, including assets under management, are as of June 30, 2006.
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 3
A Discussion With Your Fund's Portfolio Manager
The Fund outperformed its broad market benchmark and its Lipper category
average for the fiscal year as we continued our efforts to balance yield and
total return in the portfolio.
Discuss the recent market environment relative to municipal bonds.
Long-term bond yields rose throughout most of the past year before moving lower
in August and September 2006 as bond prices, which move opposite of yields,
rose. The recent improvement in bond prices came in response to the Federal
Reserve Board's (the Fed) decision to refrain from raising the federal funds
rate at its August 8 meeting. This left the short-term interest rate target at
5.25%. After 17 consecutive interest rate hikes since June 2004, moderating U.S.
economic growth and declining inflationary expectations were cited as reasons
for the Fed pause. Earlier in the period, bond yields rose steadily (and prices
declined) as investors focused on solid economic growth and rising commodity
prices, which reignited fears of inflation. More recently, declines in oil
prices, and particularly in gasoline prices, served to ease these earlier
concerns and help boost bond prices.
Overall, 30-year U.S. Treasury bond yields rose 20 basis points (.20%) during
the 12-month period to 4.77%, while 10-year U.S. Treasury note yields increased
30 basis points to 4.64%. On balance, the yield curve continued to flatten
during the year, leading to significant underperformance in the intermediate
maturity range. Meanwhile, the tax-exempt market's strong technical position
provided significant price support, allowing municipal yields to decline during
the past year. As measured by Municipal Market Data, yields on AAA-rated issues
maturing in 30 years fell to 4.17%, while yields on AAA-rated issues maturing in
10 years declined five basis points to 3.68%.
Despite the modest decline in yields, investor demand for municipal product
remained strong, evidenced by significant inflows to tax-exempt mutual funds. As
reported by the Investment Company Institute, for the first eight months of
2006, municipal bond funds experienced new cash flows of over $8.25 billion,
nearly a 45% increase from 2005 levels. The tax-exempt market's positive
technical position has been bolstered by a decline in new bond issuance. Over
the past six months, approximately $192 billion in new long-term municipal bonds
was underwritten, a decline of 9.8% versus the same period a year ago. Third
quarter 2006 new-issue volume of $82.3 billion represented a 20% decline from
third quarter 2005. Monthly issuance of $24 billion this September represented
the slowest September volume in the past five years -- and a 24% decline from
September 2005. Reduced refunding activity has continued to drive the declining
supply trend. For the first nine months of 2006, refundings fell more than 54%
relative to the same period in 2005. Despite historically low yields, few
analysts project a dramatic rebound in refunding activity for the remainder of
2006.
Describe conditions in the State of New York.
In December, credit-rating agency Moody's upgraded New York's rating to Aa3, the
state's highest rating from Moody's since 1975. Standard & Poor's and Fitch
maintained ratings of AA and AA-, respectively, and all three agencies assign a
stable outlook to the state's ratings. The New York economy continues to improve
and revenue collections are increasing. State tax collections remain largely
dependent on the performance of the financial sector, but tax receipts over the
past few years have been strong.
New York's 2006 fiscal year closed on March 31, and preliminary operating
results indicate a $2 billion surplus and a $945 million rainy day fund. The
2006 budget had closed an estimated $4 billion deficit. The state's 2006-2007
enacted budget was finalized on April 26, 2006. The $112.5 billion budget, which
kept most of Governor George Pataki's proposals intact, includes about $850
million in tax cuts and allocates much of the prior year's surplus toward
out-year gaps. The budget also includes $700 million in school operating aid as
part of compliance with a court order on school funding. It is unclear whether
this amount, as well as additional capital grants and bonding authority to New
York City, will be sufficient in meeting the court mandate.
In terms of job growth in the state, July 2006 employment estimates reflect a 1%
increase from July 2005 levels. New York ranks fifth-highest among all states in
per capita income. Economic growth is disproportionately stronger downstate,
while the upstate economy remains lackluster.
How did the Fund perform during the fiscal year?
For the 12-month period ended September 30, 2006, BlackRock New York Municipal
Bond Fund's (formerly Merrill Lynch New York Municipal Bond Fund) Class A, Class
B, Class C and Class I Shares had total returns of +5.08%, +4.56%, +4.46% and
+5.19%, respectively. (Fund results shown do not reflect sales charges and would
be lower if sales charges were included. Complete performance information can be
4 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
found on pages 6 and 7 of this report to shareholders.) The unmanaged Lehman
Brothers Municipal Bond Index, which measures the performance of municipal bonds
nationwide, returned +4.45% for the same period while the Lipper New York
Municipal Debt Funds category had an average return of +4.16%. (Funds in this
Lipper category invest in securities that are exempt from New York state or city
taxes.)
The Fund was able to provide an above-average yield and a total return exceeding
that of the broader municipal market and the average of its New York municipal
bond fund peers. For the most part, performance was driven by our focus on
yield, which included ample exposure to lower-quality, higher-yielding credits
and an emphasis on strategies geared toward maintaining a high level of income.
As credit spreads tightened and lower-quality issues outperformed, we were able
to pick up incremental yield while also benefiting from the price appreciation
of these credits. Particular areas of outperformance included the tobacco,
airline and lower-rated hospital sectors. The Fund also benefited from its
exposure to bonds issued by Puerto Rico. After lagging at the end of 2005,
Puerto Rico bonds performed quite well in the spring and early summer as the
commonwealth began to resolve some of its fiscal woes.
Detracting from performance, although not enough to derail the Fund's strong
results for the year, was a decline in the high yield sector during the final
three months of the period. At this time, the bond market rallied (that is,
yields declined as prices rose) and the high yield sector underperformed.
What changes were made to the portfolio during the period?
Throughout the year, we aimed to balance our desire to maintain an attractive
yield with our goal of enhancing the portfolio's total return potential. While
seeking to add exposure to higher-yielding, longer-dated credits, we also sold
some short-duration bonds of the high-coupon, short-call structure. This
included bonds that were either prerefunded or have a call date within three
years or less. These bonds are priced with a premium and, as the call date
approaches, the bonds lose value at an accelerating rate. We were willing to
give up some yield in order to protect the Fund's total return potential.
At times when interest rates rose, we sought to engage in yield pickup swaps --
that is, booking bonds at higher yields than those we swapped out of in order to
improve the distribution rate of the portfolio. Because the new bonds come at
lower prices than the book prices on the bonds being sold, this strategy also
allows the portfolio to book losses, which helps to protect shareholders from
potential taxable gains in the future. We also looked to buy some out-of-favor
coupons, primarily discount bonds and slightly longer-maturity issues, in an
effort to pick up yield.
In the final quarter of the fiscal year, once the Fed paused, higher-quality and
liquid credits enjoyed a strong rally, outpacing the higher yield sector for a
time. Municipal bond yields hit their lows for the year and outperformed
Treasury issues significantly. At this time, we saw no reason to turn over the
portfolio and opted to hold onto our more attractive book yield bonds.
The Fund is barbelled in terms of its credit profile, consistent with our
efforts to maintain a diversified portfolio. We were able to make a number of
additions on both the insured and uninsured sides of the barbell, despite a 32%
decline in New York new issuance over the past year.
How would you characterize the Fund's position at the close of the period?
Recently, amid the decline in yields and optimism about a future Fed easing, it
appears the market has gotten ahead of itself. With the 30-year Treasury yield
at 4.75%, 50 basis points below the federal funds rate, it seems unlikely that
the strong rally can continue. This prompted us to move to a slightly more
defensive posture at period-end.
We do not anticipate any significant restructuring of the portfolio in the
immediate future. Since spring of this year, we have focused our attention on
the 25-year sector of the curve and continue to believe that the most compelling
opportunities reside there, where we are able to find attractive relative yields
and good call protection for the portfolio.
Timothy T. Browse, CFA
Vice President and Portfolio Manager
October 10, 2006
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Effective October 2, 2006, the Fund's Class A, Class B, Class C and Class I
Shares were redesignated Investor A1, Investor B, Investor C1 and Institutional
Shares, respectively. As previously communicated to shareholders, new sales
charge schedules came into effect at the same time for certain of these classes.
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BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 5
Performance Data
About Fund Performance
The Fund has multiple classes of shares:
o Class A Shares incur a maximum initial sales charge (front-end load) of 4%
and a service 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 a
service 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 are not subject to any front-end sales charge. Class I
Shares bear no ongoing distribution or service fees and 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.blackrock.com to obtain performance
data current to the most recent month-end. Performance results do not
reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. Figures shown in each of
the following tables assume reinvestment of all dividends and capital gain
distributions, if any, at net asset value on the payable date. Investment
return and principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Dividends
paid to each class of shares will vary because of the different levels of
service, distribution and transfer agency fees applicable to each class,
which are deducted from the income available to be paid to shareholders.
The Fund's Investment Adviser reimbursed a portion of its fee. Without
such reimbursement, the Fund's performance would have been lower.
Recent Performance Results
6-Month 12-Month Ten-Year Standardized
As of September 30, 2006 Total Return Total Return Total Return 30-Day Yield
======================================================================================================
Class A Shares* +3.55% +5.08% +65.41% 3.57%
- ------------------------------------------------------------------------------------------------------
Class B Shares* +3.34 +4.56 +58.67 3.31
- ------------------------------------------------------------------------------------------------------
Class C Shares* +3.19 +4.46 +57.10 3.22
- ------------------------------------------------------------------------------------------------------
Class I Shares* +3.60 +5.19 +66.89 3.82
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Lehman Brothers Municipal Bond Index** +3.44 +4.45 +77.49 --
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* Investment results shown do not reflect sales charges; results shown would
be lower if a sales charge was included. Cumulative total investment
returns are based on changes in net asset values for the periods shown,
and assume reinvestment of all dividends and capital gains distributions
at net asset value on the payable date.
** This unmanaged Index consists of long-term revenue bonds, prerefunded
bonds, general obligation bonds and insured bonds.
6 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Performance Data (concluded)
Total Return Based on a $10,000 Investment
A line graph depicting the growth of an investment in the Fund's Class A, Class
B, Class C and Class I Shares compared to growth of an investment in the Lehman
Brothers Municipal Bond Index. Values are from September 1996 to September 2006:
Lehman Brothers
Municipal Bond
Class A Shares*+ Class B Shares*+ Class C Shares*+ Class I Shares*+ Index++
9/96 $9,600 $10,000 $10,000 $10,000 $10,000
9/97 $10,434 $10,814 $10,813 $10,869 $10,902
9/98 $11,459 $11,829 $11,815 $11,950 $11,852
9/99 $10,796 $11,099 $11,076 $11,269 $11,769
9/00 $11,344 $11,626 $11,579 $11,852 $12,496
9/01 $12,594 $12,854 $12,790 $13,172 $13,795
9/02 $13,568 $13,791 $13,709 $14,217 $15,028
9/03 $13,961 $14,121 $14,035 $14,628 $15,613
9/04 $14,386 $14,505 $14,390 $15,089 $16,331
9/05 $15,112 $15,175 $15,040 $15,866 $16,992
9/06 $15,880 $15,867 $15,710 $16,689 $17,749
* Assuming maximum sales charge, if any, transaction costs and other
operating expenses, including advisory fees.
+ The Fund invests primarily in long-term investment grade obligations
issued by or on behalf of the State of New York, its political
subdivisions, agencies and instrumentalities and obligations of other
qualifying issuers.
++ This unmanaged Index consists of long-term revenue bonds, prerefunded
bonds, general obligation bonds and insured bonds.
Past performance is not indicative of future results.
Average Annual Total Return
Return Without Return With
Sales Charge Sales Charge**
================================================================================
Class A Shares*
================================================================================
One Year Ended 9/30/06 +5.08% +0.88%
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Five Years Ended 9/30/06 +4.75 +3.89
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Ten Years Ended 9/30/06 +5.16 +4.73
- --------------------------------------------------------------------------------
Return Return
Without CDSC With CDSC+++
================================================================================
Class B Shares+
================================================================================
One Year Ended 9/30/06 +4.56% +0.56%
- --------------------------------------------------------------------------------
Five Years Ended 9/30/06 +4.30 +3.96
- --------------------------------------------------------------------------------
Ten Years Ended 9/30/06 +4.72 +4.72
- --------------------------------------------------------------------------------
Return Return
Without CDSC With CDSC+++
================================================================================
Class C Shares++
================================================================================
One Year Ended 9/30/06 +4.46% +3.46%
- --------------------------------------------------------------------------------
Five Years Ended 9/30/06 +4.20 +4.20
- --------------------------------------------------------------------------------
Ten Years Ended 9/30/06 +4.62 +4.62
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class I Shares Return
================================================================================
One Year Ended 9/30/06 +5.19%
- --------------------------------------------------------------------------------
Five Years Ended 9/30/06 +4.85
- --------------------------------------------------------------------------------
Ten Years Ended 9/30/06 +5.26
- --------------------------------------------------------------------------------
* Maximum sales charge is 4%.
** Assuming maximum sales charge.
+ Maximum contingent deferred sales charge is 4% and is reduced to 0% after
six years.
++ Maximum contingent deferred sales charge is 1% and is reduced to 0% after
one year.
+++ Assuming payment of applicable contingent deferred sales charge.
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 7
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
12b-1 fees, and other Fund expenses. The following example (which is based on a
hypothetical investment of $1,000 invested on April 1, 2006 and held through
September 30, 2006) 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.
Each of the Actual tables 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."
Each of the Hypothetical tables 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 tables 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.
Including Interest Expense and Fees
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value April 1, 2006 to
April 1, 2006 September 30, 2006 September 30, 2006
==================================================================================================================
Actual
==================================================================================================================
Class A $1,000 $1,035.50 $4.97
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Class B $1,000 $1,033.40 $7.10
- ------------------------------------------------------------------------------------------------------------------
Class C $1,000 $1,031.90 $7.50
- ------------------------------------------------------------------------------------------------------------------
Class I $1,000 $1,036.00 $4.52
==================================================================================================================
Hypothetical (5% annual return before expenses)**
==================================================================================================================
Class A $1,000 $1,020.01 $4.94
- ------------------------------------------------------------------------------------------------------------------
Class B $1,000 $1,017.92 $7.04
- ------------------------------------------------------------------------------------------------------------------
Class C $1,000 $1,017.52 $7.44
- ------------------------------------------------------------------------------------------------------------------
Class I $1,000 $1,020.46 $4.48
- ------------------------------------------------------------------------------------------------------------------
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (.98% for Class A, 1.40% for Class B, 1.48% for Class
C and .89% for Class I), multiplied by the average account value over the
period, multiplied by 182/365 (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.
Excluding Interest Expense and Fees
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value April 1, 2006 to
April 1, 2006 September 30, 2006 September 30, 2006
=================================================================================================================
Actual
=================================================================================================================
Class A $1,000 $1,035.50 $4.21
- -----------------------------------------------------------------------------------------------------------------
Class B $1,000 $1,033.40 $6.29
- -----------------------------------------------------------------------------------------------------------------
Class C $1,000 $1,031.90 $6.74
- -----------------------------------------------------------------------------------------------------------------
Class I $1,000 $1,036.00 $3.71
=================================================================================================================
Hypothetical (5% annual return before expenses)**
=================================================================================================================
Class A $1,000 $1,020.76 $4.18
- -----------------------------------------------------------------------------------------------------------------
Class B $1,000 $1,018.72 $6.24
- -----------------------------------------------------------------------------------------------------------------
Class C $1,000 $1,018.27 $6.69
- -----------------------------------------------------------------------------------------------------------------
Class I $1,000 $1,021.26 $3.68
- -----------------------------------------------------------------------------------------------------------------
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (.83% for Class A, 1.24% for Class B, 1.33% for Class
C and .73% for Class I), multiplied by the average account value over the
period, multiplied by 182/365 (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 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Schedule of Investments as of September 30, 2006 (As Restated. See Note 8)
(in Thousands)
Face
Amount Municipal Bonds Value
==============================================================================================
New York--85.7%
- ----------------------------------------------------------------------------------------------
Albany County, New York, IDA, IDR:
$ 700 (Albany College of Pharmacy), Refunding, Series A,
5.625% due 12/01/2034 $ 735
130 (Special Needs Facilities Pooled Program), Series K-1,
4.90% due 7/01/2021 (i) 135
- ----------------------------------------------------------------------------------------------
1,175 Albany, New York, IDA, Civic Facility Revenue Bonds
(University Heights--Albany Law School), Series A,
6.75% due 12/01/2019 (j) 1,283
- ----------------------------------------------------------------------------------------------
3,000 Battery Park City Authority, New York, Revenue
Refunding Bonds, Series A, 5% due 11/01/2024 3,185
- ----------------------------------------------------------------------------------------------
600 Cattaraugus County, New York, IDA, Civic Facility
Revenue Bonds (Saint Bonaventure University Project),
Series A, 5.10% due 5/01/2031 619
- ----------------------------------------------------------------------------------------------
1,000 Chautauqua, New York, Tobacco Asset Securitization
Corporation, Revenue Bonds, 6.75% due 7/01/2040 1,074
- ----------------------------------------------------------------------------------------------
1,150 Dutchess County, New York, IDA, Civic Facility Revenue
Bonds (Saint Francis Hospital), Series B, 7.25%
due 3/01/2019 1,263
- ----------------------------------------------------------------------------------------------
Erie County, New York, IDA, Life Care Community
Revenue Bonds (Episcopal Church Home), Series A:
1,500 5.875% due 2/01/2018 1,548
3,000 6% due 2/01/2028 3,097
- ----------------------------------------------------------------------------------------------
2,000 Erie County, New York, IDA, Revenue Bonds (Orchard
Park Ccrc, Inc. Project), Series A, 6% due 11/15/2036 2,112
- ----------------------------------------------------------------------------------------------
4,000 Erie County, New York, Tobacco Asset Securitization
Corporation, Asset-Backed Revenue Bonds, Class A,
6.25% due 7/15/2010 (e) 4,407
- ----------------------------------------------------------------------------------------------
3,250 Essex County, New York, IDA, Civic Facility Revenue
Bonds (Moses-Ludington Nursing Home), Series A,
6.375% due 2/01/2050 (l) 3,535
- ----------------------------------------------------------------------------------------------
2,000 Essex County, New York, IDA, Solid Waste Disposal,
Revenue Refunding Bonds (International Paper
Company), AMT, Series A, 5.20% due 12/01/2023 2,051
- ----------------------------------------------------------------------------------------------
Hempstead Town, New York, IDA, Civic Facility Revenue
Bonds (Adelphi University Civic Facility):
1,700 5.75% due 6/01/2022 1,860
2,500 5.50% due 6/01/2032 2,678
- ----------------------------------------------------------------------------------------------
2,500 Long Island Power Authority, New York, Electric System
Revenue Bonds, Series C, 5% due 9/01/2035 2,609
- ----------------------------------------------------------------------------------------------
2,750 Long Island Power Authority, New York, Electric System
Revenue Refunding Bonds, Series B, 5% due 12/01/2035 (k) 2,896
- ----------------------------------------------------------------------------------------------
100 Metropolitan Transportation Authority, New York,
Commuter Facilities Revenue Refunding Bonds, Series B,
5.125% due 7/01/2024 (a)(h) 103
- ----------------------------------------------------------------------------------------------
1,000 Metropolitan Transportation Authority, New York,
Dedicated Tax Fund Revenue Bonds, Series A, 6.125%
due 4/01/2010 (b)(e) 1,086
- ----------------------------------------------------------------------------------------------
Metropolitan Transportation Authority, New York,
Revenue Refunding Bonds:
2,100 RIB, Series 724X, 7.51% due 11/15/2032 (c)(g) 2,537
4,000 Series A, 5% due 11/15/2025 (b) 4,233
- ----------------------------------------------------------------------------------------------
1,000 Monroe County, New York, IDA Revenue Bonds
(Southview Towers Project), AMT, 6.25% due 2/01/2031 1,078
- ----------------------------------------------------------------------------------------------
445 Monroe County, New York, IDA, Student Housing
Revenue Bonds (Collegiate), Series A, 5.375%
due 4/01/2029 452
- ----------------------------------------------------------------------------------------------
5,000 Monroe Tobacco Asset Securitization Corporation,
New York, Tobacco Settlement Asset-Backed Bonds,
6.375% due 6/01/2010 (e) 5,527
- ----------------------------------------------------------------------------------------------
525 Nassau County, New York, IDA, Civic Facility Revenue
Refunding Bonds (Special Needs Facilities Pooled
Program), Series F-1, 4.90% due 7/01/2021 (i) 545
- ----------------------------------------------------------------------------------------------
2,000 Nassau County, New York, Tobacco Settlement
Corporation, Senior Asset-Backed Revenue Refunding
Bonds, Series A-3, 5% due 6/01/2035 2,029
- ----------------------------------------------------------------------------------------------
New York City, New York, City Housing Development
Corporation, M/F Housing Revenue Bonds:
2,500 AMT, Series A, 5.50% due 11/01/2034 2,590
1,220 AMT, Series C, 5.05% due 11/01/2036 1,266
1,000 Series E, 6.25% due 5/01/2036 1,071
- ----------------------------------------------------------------------------------------------
2,485 New York City, New York, City Housing Development
Corporation, Presidential Revenue Bonds (The Animal
Medical Center), Series A, 5.50% due 12/01/2033 2,602
- ----------------------------------------------------------------------------------------------
New York City, New York, City IDA, Civic Facility
Revenue Bonds:
(A Very Special Place Inc. Project), Series A, 6.125%
due 1/01/2013 593
1,600 (A Very Special Place Inc. Project), Series A, 7%
due 1/01/2033 1,694
1,215 (American National Red Cross Project), 5%
due 2/01/2036 (a) 1,280
6,000 (PSCH Inc. Project), 6.375% due 7/01/2033 6,420
2,500 Series C, 6.80% due 6/01/2028 2,710
1,000 (Special Needs Facility Pooled Program), Series A-1,
6.50% due 7/01/2017 1,047
2,540 (Special Needs Facility Pooled Program), Series C-1,
6.50% due 7/01/2017 2,670
- ----------------------------------------------------------------------------------------------
Portfolio Abbreviations
To simplify the listings of BlackRock New York Municipal Bond Fund's portfolio
holdings in the Schedule of Investments, we have abbreviated the names of many
of the securities according to the list at right.
AMT Alternative Minimum Tax (subject to)
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 9
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================================
New York (continued)
- -----------------------------------------------------------------------------------------------
New York City, New York, City IDA, Civic Facility Revenue
Refunding Bonds (Special Needs Facilities
Pooled Program) (i):
$1,780 Series A-1, 4.375% due 7/01/2020 $ 1,746
210 Series A-1, 4.50% due 7/01/2030 206
885 Series C-1, 4.90% due 7/01/2021 912
525 Series C-1, 5.10% due 7/01/2031 543
- -----------------------------------------------------------------------------------------------
New York City, New York, City IDA, Revenue Bonds:
2,000 (Queens Baseball Stadium--Pilot Project), 5%
due 1/01/2036 (a) 2,120
1,500 (Yankee Stadium--Pilot Project), 5%
due 3/01/2036 (d) 1,588
3,150 (Yankee Stadium--Pilot Project), 4.50%
due 3/01/2039 (b) 3,137
- -----------------------------------------------------------------------------------------------
New York City, New York, City IDA, Special Facility
Revenue Bonds, AMT:
3,500 (1990 American Airlines Inc. Project), 5.40%
due 7/01/2020 3,248
1,000 (British Airways Plc Project), 5.25%
due 12/01/2032 963
655 (Continental Airlines Inc. Project), 7.25%
due 11/01/2008 671
1,250 (Continental Airlines Inc. Project), 8%
due 11/01/2012 1,365
250 (Continental Airlines Inc. Project), 8.375%
due 11/01/2016 277
2,000 (Continental Airlines Inc. Project), 7.75%
due 8/01/2031 2,356
- -----------------------------------------------------------------------------------------------
2,500 New York City, New York, City IDA, Special Facility
Revenue Refunding Bonds (Terminal One Group
Association Project), AMT, 5.50% due 1/01/2024 2,701
- -----------------------------------------------------------------------------------------------
1,000 New York City, New York, City Municipal Financing
Authority, Water and Sewer Systems Revenue Bonds,
5% due 6/15/2036 (d) 1,057
- -----------------------------------------------------------------------------------------------
New York City, New York, City Transitional Finance
Authority, Future Tax-Secured Revenue Bonds:
420 Series B, 5.50% due 2/01/2017 453
425 Series C, 5.375% due 2/01/2018 456
- -----------------------------------------------------------------------------------------------
New York City, New York, GO:
1,965 Refunding, Series D, 5.125% due 8/01/2018 (c) 2,080
2,000 Series J, 5% due 5/15/2023 2,102
3,000 Series M, 5% due 4/01/2035 3,131
- -----------------------------------------------------------------------------------------------
1,500 New York City, New York, Industrial Development Agency,
Civic Facility Revenue Bonds (YMCA of Greater New York
Project), 5% due 8/01/2036 1,560
- -----------------------------------------------------------------------------------------------
New York Counties Tobacco Trust I, Tobacco Pass-Through
Bonds, Series B:
1,550 6.50% due 6/01/2010 (e) 1,722
1,010 6.625% due 6/01/2010 (e) 1,127
750 6.50% due 6/01/2035 800
490 6.625% due 6/01/2042 527
- -----------------------------------------------------------------------------------------------
1,000 New York Liberty Development Corporation Revenue
Bonds (National Sports Museum Project), Series A,
6.125% due 2/15/2019 1,034
- -----------------------------------------------------------------------------------------------
2,000 New York State Dormitory Authority, Lease Revenue
Refunding Bonds (Court Facilities), Series A, 5.375%
due 5/15/2013 (e) 2,202
- -----------------------------------------------------------------------------------------------
1,000 New York State Dormitory Authority, Non-State
Supported Debt, Insured Revenue Bonds (United
Cerebral Palsy Affiliates--Pooled Loan Program),
Series A, 5% due 7/01/2034 (n) 1,049
- -----------------------------------------------------------------------------------------------
1,000 New York State Dormitory Authority, Nursing Home
Revenue Refunding Bonds (Menorah Campus Inc.),
6.10% due 2/01/2037 (l) 1,027
- -----------------------------------------------------------------------------------------------
New York State Dormitory Authority, Revenue Bonds:
1,935 (Memorial Sloan-Kettering), Series 1, 4.75%
due 7/01/2035 1,979
1,130 (New York University Hospitals Center), Series A, 5%
due 7/01/2016 1,177
1,000 (New York University), Series 1, 5.50%
due 7/01/2022 (a) 1,171
250 (Rochester University), Series A, 5.25%
due 7/01/2023 269
200 (Rochester University), Series A, 5.25%
due 7/01/2024 215
1,500 (Rochester University), Series A, 5.125%
due 7/01/2039 1,568
1,180 (School Districts Financing Program), Series E,
5.75% due 10/01/2030 (d) 1,301
3,000 (White Plains Hospital), 5.375% due 2/15/2043 (l) 3,178
2,500 (Willow Towers Inc. Project), 5.40%
due 2/01/2034 (f) 2,668
- -----------------------------------------------------------------------------------------------
New York State Dormitory Authority, Revenue
Refunding Bonds:
4,850 (Mount Sinai Health), Series A, 6.625%
due 7/01/2018 5,262
1,565 (Upstate Community Colleges), Series B, 5.25%
due 7/01/2021 1,691
- -----------------------------------------------------------------------------------------------
5,000 New York State Dormitory Authority, State Personal
Income Tax Revenue Bonds, Series F, 5%
due 3/15/2035 (c) 5,257
- -----------------------------------------------------------------------------------------------
2,000 New York State Energy Research and Development
Authority, PCR, Refunding (Central Hudson Gas and
Electric), Series A, 5.45% due 8/01/2027 (a) 2,111
- -----------------------------------------------------------------------------------------------
3,000 New York State Environmental Facilities Corporation,
Special Obligation Revenue Refunding Bonds
(Riverbank State Park), 6.25% due 4/01/2012 (a)(q) 3,393
- -----------------------------------------------------------------------------------------------
New York State, HFA, M/F Housing Revenue Bonds,
AMT, Series A:
875 (Division Street), 5.10% due 2/15/2038 904
580 (Watergate II), 4.75% due 2/15/2034 580
- -----------------------------------------------------------------------------------------------
495 New York State Mortgage Agency, Homeowner
Mortgage Revenue Bonds, AMT, Series 130, 4.80%
due 10/01/2037 498
- -----------------------------------------------------------------------------------------------
1,000 New York State Mortgage Agency, Homeowner
Mortgage Revenue Refunding Bonds, AMT, Series 133,
4.95% due 10/01/2021 1,033
- -----------------------------------------------------------------------------------------------
2,980 New York State Mortgage Agency Revenue Bonds, AMT,
Series 101, 5.40% due 4/01/2032 3,074
- -----------------------------------------------------------------------------------------------
1,000 New York State Municipal Bond Bank Agency, Special
School Purpose Revenue Bonds, Series C, 5.25%
due 12/01/2022 1,073
- -----------------------------------------------------------------------------------------------
2,500 New York State Thruway Authority, General Revenue
Refunding Bonds, Series G, 4.75% due 1/01/2030 (c) 2,572
- -----------------------------------------------------------------------------------------------
10 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================================
New York (continued)
- -----------------------------------------------------------------------------------------------
$2,190 New York State Thruway Authority, Highway and Bridge
Trust Fund, Revenue Refunding Bonds, Series C, 5%
due 4/01/2020 (a) $ 2,322
- -----------------------------------------------------------------------------------------------
2,980 New York State Thruway Authority, Revenue Refunding
Bonds, Series E, 5% due 1/01/2025 3,052
- -----------------------------------------------------------------------------------------------
3,800 New York State Urban Development Corporation,
Correctional Facilities Service Contract Revenue Bonds,
Series D, 5.25% due 1/01/2011 (c)(e) 4,053
- -----------------------------------------------------------------------------------------------
New York State Urban Development Corporation
Revenue Bonds:
1,520 Subordinate Lien, Corporation Purpose, Series A,
5.125% due 7/01/2021 1,623
3,500 (University Facility Grants), 5.50% due 1/01/2019 3,934
1,675 (Youth Facilities Services Contract), Series B, 6%
due 4/01/2010 (e) 1,824
750 (Youth Facilities Services Contract), Series B,
6.125% due 4/01/2010 (e) 820
615 (Youth Facilities Services Contract), Series B, 6.25%
due 4/01/2010 (e) 675
- -----------------------------------------------------------------------------------------------
1,685 New York State Urban Development Corporation,
Revenue Refunding Bonds (Clarkson Center Advance
Materials), 5.50% due 1/01/2020 1,896
- -----------------------------------------------------------------------------------------------
3,975 Niagara County, New York, IDA, Solid Waste Disposal
Revenue Refunding Bonds, AMT, Series A, 5.45%
due 11/15/2026 4,157
- -----------------------------------------------------------------------------------------------
1,000 Niagara County, New York, Tobacco Asset Securitization
Corporation, Asset-Backed Revenue Bonds, 6.25%
due 5/15/2040 1,058
- -----------------------------------------------------------------------------------------------
1,000 North Country, New York, Development Authority, Solid
Waste Management System, Revenue Refunding Bonds,
6% due 5/15/2015 (c) 1,118
- -----------------------------------------------------------------------------------------------
Onondaga County, New York, IDA, Revenue Bonds
(Air Cargo), AMT:
3,970 6.125% due 1/01/2032 4,204
1,365 7.25% due 1/01/2032 1,483
- -----------------------------------------------------------------------------------------------
845 Orange County, New York, IDA, Civic Facility Revenue
Bonds (Special Needs Facilities Pooled Program,
Series G-1, 4.90% due 7/01/2021 (i) 877
- -----------------------------------------------------------------------------------------------
1,000 Port Authority of New York and New Jersey,
Consolidated Revenue Refunding Bonds, 132nd Series,
5% due 9/01/2025 1,054
- -----------------------------------------------------------------------------------------------
Sachem Central School District (Holbrook), New York,
GO, Series B (d):
1,000 5% due 10/15/2025 1,058
1,300 5% due 10/15/2029 1,368
- -----------------------------------------------------------------------------------------------
Suffolk County, New York, IDA, Civic Facility
Revenue Bonds:
2,000 (Huntington Hospital Project), Series B, 5.875%
due 11/01/2032 2,126
135 (Special Needs Facilities Pooled Program),
Series D-1, 6.50% due 7/01/2017 142
330 (Special Needs Facilities Pooled Program),
Series D-1, 4.90% due 7/01/2021 (i) 343
- -----------------------------------------------------------------------------------------------
1,000 Suffolk County, New York, IDA, Civic Facility Revenue
Refunding Bonds (Dowling College), Series A, 5%
due 6/01/2036 (i) 1,028
- -----------------------------------------------------------------------------------------------
1,360 Suffolk County, New York, IDA, IDR (Keyspan--Port
Jefferson), AMT, 5.25% due 6/01/2027 1,417
- -----------------------------------------------------------------------------------------------
5,000 Suffolk County, New York, IDA, IDR, Refunding
(Nissequogue Cogeneration Partners Facility), AMT,
5.50% due 1/01/2023 4,954
- -----------------------------------------------------------------------------------------------
7,155 Suffolk County, New York, IDA, Solid Waste Disposal
Facility, Revenue Refunding Bonds (Ogden Martin
System Huntington Project), AMT, 6.25%
due 10/01/2012 (a) 8,080
- -----------------------------------------------------------------------------------------------
330 Sullivan County, New York, IDA, Civic Facility Revenue
Bonds (Special Needs Facilities Pooled Program),
Series H-1, 4.90% due 7/01/2021 (i) 343
- -----------------------------------------------------------------------------------------------
Tobacco Settlement Financing Corporation of New York
Revenue Bonds:
1,455 Series A-1, 5.25% due 6/01/2020 (a) 1,568
1,100 Series C-1, 5.50% due 6/01/2022 1,190
- -----------------------------------------------------------------------------------------------
Tompkins County, New York, IDA, Care Community
Revenue Refunding Bonds (Kendal at Ithaca), Series A-2:
900 5.75% due 7/01/2018 921
1,000 6% due 7/01/2024 1,029
- -----------------------------------------------------------------------------------------------
Triborough Bridge and Tunnel Authority, New York,
Revenue Refunding Bonds:
3,900 5.25% due 11/15/2023 (d) 4,211
2,000 Series B, 5% due 11/15/2027 2,089
1,000 Series B, 5.125% due 11/15/2029 1,060
2,290 Series B, 5% due 11/15/2032 (d) 2,382
- -----------------------------------------------------------------------------------------------
Troy, New York, City School District, GO, Refunding (c):
765 5.75% due 7/15/2017 828
805 5.75% due 7/15/2018 871
850 5.75% due 7/15/2019 919
- -----------------------------------------------------------------------------------------------
Utica, New York, IDA, Civic Facility Revenue Bonds:
1,000 (Munson, Williams, Proctor Institute), 5.375%
due 7/15/2020 1,075
1,210 (Munson, Williams, Proctor Institute), 5.40%
due 7/15/2030 1,295
1,505 (Utica College Project), Series A, 5.75%
due 8/01/2028 1,576
- -----------------------------------------------------------------------------------------------
1,000 Webster, New York, Central School District, GO,
Refunding, 5% due 6/15/2023 (c) 1,062
- -----------------------------------------------------------------------------------------------
350 Westchester County, New York, IDA, Civic Facility
Revenue Bonds (Special Needs Facilities Pooled
Program), Series E-1, 4.90% due 7/01/2021 (i) 363
- -----------------------------------------------------------------------------------------------
5,200 Westchester County, New York, IDA, Continuing Care
Retirement, Mortgage Revenue Bonds (Kendal on
Hudson Project), Series A, 6.50% due 1/01/2034 5,563
- -----------------------------------------------------------------------------------------------
Willsboro, New York, Central School District, GO,
Refunding (b):
655 5.75% due 6/15/2026 716
690 5.75% due 6/15/2027 754
730 5.75% due 6/15/2028 798
770 5.75% due 6/15/2029 842
- -----------------------------------------------------------------------------------------------
1,000 Yonkers, New York, Industrial Development Agency
Revenue, Sacred Heart Associations Project,
Series A, 5% due 10/01/2037 1,028
===============================================================================================
Guam--0.7%
- -----------------------------------------------------------------------------------------------
2,000 Guam Government Waterworks Authority, Water and
Wastewater System, Revenue Refunding Bonds,
5.875% due 7/01/2035 2,145
- -----------------------------------------------------------------------------------------------
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 11
Schedule of Investments (concluded) (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================================
Puerto Rico--6.5%
- -----------------------------------------------------------------------------------------------
$1,000 Children's Trust Fund Project of Puerto Rico, Tobacco
Settlement Revenue Refunding Bonds, 5.625%
due 5/15/2043 $ 1,039
- -----------------------------------------------------------------------------------------------
4,750 Puerto Rico Commonwealth, GO, Refunding, RITR,
Class R, Series 3, 7.372% due 7/01/2016 (d)(g) 5,466
- -----------------------------------------------------------------------------------------------
1,000 Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue
Refunding Bonds, Series K, 5% due 7/01/2035 (n) 1,054
- -----------------------------------------------------------------------------------------------
7,470 Puerto Rico Commonwealth Infrastructure Financing
Authority, Special Tax and Capital Appreciation Revenue
Bonds, Series A, 4.771% due 7/01/2042 (b)(p) 1,464
- -----------------------------------------------------------------------------------------------
1,000 Puerto Rico Commonwealth, Public Improvement, GO,
Refunding, Series B, 5.25% due 7/01/2032 1,068
- -----------------------------------------------------------------------------------------------
1,000 Puerto Rico Electric Power Authority, Power Revenue
Bonds, Trust Receipts, Class R, Series 16 HH, 7.372%
due 7/01/2013 (c)(g) 1,170
- -----------------------------------------------------------------------------------------------
1,000 Puerto Rico Industrial, Medical and Environmental
Pollution Control Facilities Financing Authority, Special
Facilities Revenue Bonds (American Airlines Inc.),
Series A, 6.45% due 12/01/2025 1,004
- -----------------------------------------------------------------------------------------------
1,420 Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Revenue Bonds
(Cogeneration Facility--AES Puerto Rico Project), AMT,
6.625% due 6/01/2026 1,546
- -----------------------------------------------------------------------------------------------
3,700 Puerto Rico Public Buildings Authority, Government
Facilities Revenue Refunding Bonds, Series I, 5.25%
due 7/01/2033 3,919
- -----------------------------------------------------------------------------------------------
1,000 Puerto Rico Public Finance Corporation,
Commonwealth Appropriation Revenue Bonds,
Series E, 5.70% due 2/01/2010 (e) 1,067
===============================================================================================
U.S. Virgin Islands--1.8%
- -----------------------------------------------------------------------------------------------
4,500 Virgin Islands Government Refinery Facilities, Revenue
Refunding Bonds (Hovensa Coker Project), AMT, 6.50%
due 7/01/2021 5,072
- -----------------------------------------------------------------------------------------------
Total Municipal Bonds
(Cost--$254,609)--94.7% 272,917
===============================================================================================
Municipal Bonds Held in Trust (as restated) (r)
===============================================================================================
New York--6.5%
- -----------------------------------------------------------------------------------------------
4,950 New York Convention Center Development
Corporation, New York, Revenue Bonds
(Hotel Unit Fee Secured), 5% due 11/15/2035 (a) 5,209
- -----------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey,
Special Obligation Revenue Bonds, AMT, Series 6 (d):
5,250 (JFK International Air Terminal), 6.25%
due 12/01/2010 5,875
2,555 (JFK International Air Terminal), 6.25%
due 12/01/2011 2,859
1,575 (Special Project--JFK International Air Terminal),
6.25% due 12/01/2013 1,763
2,620 (Special Project--JFK International Air Terminal),
6.25% due 12/01/2014 2,931
- -----------------------------------------------------------------------------------------------
Total Municipal Bonds Held in Trust
(Cost--$17,929)--6.5% 18,637
===============================================================================================
Shares
Held Short-Term Securities
===============================================================================================
25 CMA New York Municipal Money Fund, 3.10% (m)(o) 25
- -----------------------------------------------------------------------------------------------
Total Short-Term Securities (Cost--$25)--0.0% 25
===============================================================================================
Total Investments (Cost--$272,563*)--101.2% 291,579
Other Assets Less Liabilities--1.8% 5,225
Liability for Trust Certificates, Including
Interest Expense Payable--(3.0%) (8,582)
--------
Net Assets--100.0% $288,222
========
* The cost and unrealized appreciation (depreciation) of investments as of
September 30, 2006, as computed for federal income tax purposes, were as
follows:
Aggregate cost .............................................. $264,024
========
Gross unrealized appreciation ............................... $ 19,080
Gross unrealized depreciation ............................... --
--------
Net unrealized appreciation ................................. $ 19,080
========
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FSA Insured.
(d) MBIA Insured.
(e) Prerefunded.
(f) GNMA Collateralized.
(g) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(h) Escrowed to maturity.
(i) ACA Insured.
(j) Radian Insured.
(k) CIFG Insured.
(l) FHA Insured.
(m) Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
--------------------------------------------------------------------------
Net Dividend
Affiliate Activity Income
--------------------------------------------------------------------------
CMA New York Municipal Money Fund (827) $50
--------------------------------------------------------------------------
(n) Assured Guaranty Insured.
(o) Represents the current yield as of September 30, 2006.
(p) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(q) All or a portion of security held as collateral in connection with open
financial futures contracts.
(r) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction in
which the Fund may have acquired the residual interest certificates. These
securities serve as collateral in a financing transaction. See Note 1 (c)
to Financial Statements for details of Municipal Bonds Held in Trust. See
Note 8 regarding the restatement.
o Financial futures contracts sold as of September 30, 2006 were as follows:
------------------------------------------------------------------------------------------
Number of Expiration Face Unrealized
Contracts Issue Date Value Depreciation
------------------------------------------------------------------------------------------
50 30-Year U.S. December
Treasury Bond 2006 $5,528 $(92)
------------------------------------------------------------------------------------------
See Notes to Financial Statements.
12 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Statement of Assets and Liabilities (As Restated. See Note 8)
As of September 30, 2006
===============================================================================================================================
Assets
- -------------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value (identified cost--$272,538,624) $ 291,553,972
Investments in affiliated securities, at value (identified cost--$24,643) ...... 24,643
Cash ........................................................................... 33,557
Receivables:
Interest .................................................................... $ 4,554,504
Securities sold ............................................................. 2,454,584
Beneficial interest sold .................................................... 11,632 7,020,720
-------------
Prepaid expenses ............................................................... 36,608
-------------
Total assets ................................................................... 298,669,500
-------------
===============================================================================================================================
Liabilities
- -------------------------------------------------------------------------------------------------------------------------------
Trust certificates ............................................................. 8,475,000
Payables:
Securities purchased ........................................................ 1,175,889
Dividends to shareholders ................................................... 338,280
Investment adviser .......................................................... 116,373
Interest expense ............................................................ 107,215
Beneficial interest redeemed ................................................ 69,038
Distributor ................................................................. 43,497
Other affiliates ............................................................ 21,233 1,871,525
-------------
Accrued expenses ............................................................... 101,398
-------------
Total liabilities .............................................................. 10,447,923
-------------
===============================================================================================================================
Net Assets
- -------------------------------------------------------------------------------------------------------------------------------
Net assets ..................................................................... $ 288,221,577
=============
===============================================================================================================================
Net Assets Consist of*
- -------------------------------------------------------------------------------------------------------------------------------
Class A Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ............................................................. $ 2,011,161
Class B Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ............................................................. 314,604
Class C Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ............................................................. 170,978
Class I Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized ............................................................. 99,084
Paid-in capital in excess of par ............................................... 283,899,099
Undistributed investment income--net ........................................... $ 500,416
Accumulated realized capital losses--net ....................................... (17,696,799)
Unrealized appreciation--net ................................................... 18,923,034
-------------
Total accumulated earnings--net ................................................ 1,726,651
-------------
Net Assets ..................................................................... $ 288,221,577
=============
===============================================================================================================================
Net Asset Value*
- -------------------------------------------------------------------------------------------------------------------------------
Class A--Based on net assets of $223,321,631 and 20,111,605 shares of beneficial
interest outstanding .......................................................... $ 11.10
=============
Class B--Based on net assets of $34,921,473 and 3,146,042 shares of beneficial
interest outstanding .......................................................... $ 11.10
=============
Class C--Based on net assets of $18,983,926 and 1,709,782 shares of beneficial
interest outstanding .......................................................... $ 11.10
=============
Class I--Based on net assets of $10,994,547 and 990,835 shares of beneficial
interest outstanding .......................................................... $ 11.10
=============
* Effective October 2, 2006, Class A, Class B, Class C and Class I Shares
were redesignated Investor A1, Investor B, Investor C1 and Institutional
Shares, respectively.
See Notes to Financial Statements.
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 13
Statement of Operations (As Restated. See Note 8)
For the Year Ended September 30, 2006
===============================================================================================================================
Investment Income
- -------------------------------------------------------------------------------------------------------------------------------
Interest ....................................................................... $ 13,351,412
Dividends from affiliates ...................................................... 50,485
-------------
Total income ................................................................... 13,401,897
-------------
===============================================================================================================================
Expenses
- -------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ....................................................... $ 1,333,978
Interest expense and fees ...................................................... 383,834
Account maintenance and distribution fees--Class B* ............................ 198,343
Account maintenance fees--Class A* ............................................. 174,653
Accounting services ............................................................ 116,970
Account maintenance and distribution fees--Class C* ............................ 103,522
Transfer agent fees--Class A* .................................................. 77,228
Professional fees .............................................................. 57,615
Printing and shareholder reports ............................................... 50,499
Registration fees .............................................................. 49,542
Transfer agent fees--Class B* .................................................. 21,198
Trustees' fees and expenses .................................................... 17,453
Pricing fees ................................................................... 17,371
Custodian fees ................................................................. 15,887
Transfer agent fees--Class C* .................................................. 8,872
Transfer agent fees--Class I* .................................................. 4,920
Other .......................................................................... 27,829
-------------
Total expenses before reimbursement ............................................ 2,659,714
Reimbursement of expenses ...................................................... (8,055)
-------------
Total expenses after reimbursement ............................................. 2,651,659
-------------
Investment income--net ......................................................... 10,750,238
-------------
===============================================================================================================================
Realized & Unrealized Gain (Loss)--Net
- -------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments--net ............................................................ 1,229,168
Financial futures contracts--net ............................................ (57,046)
-------------
Change in unrealized appreciation/depreciation on:
Investments--net ............................................................ 1,239,719
Financial futures contracts--net ............................................ (92,314) 1,147,405
-------------------------------
Total realized and unrealized gain--net ........................................ 2,319,527
-------------
Net Increase in Net Assets Resulting from Operations ........................... $ 13,069,765
=============
* Effective October 2, 2006, Class A, Class B, Class C and Class I Shares
were redesignated Investor A1, Investor B, Investor C1 and Institutional
Shares, respectively.
See Notes to Financial Statements.
14 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Statements of Changes in Net Assets (As Restated. See Note 8)
For the Year Ended
September 30,
-------------------------------
Increase (Decrease) in Net Assets: 2006 2005
===============================================================================================================================
Operations
- -------------------------------------------------------------------------------------------------------------------------------
Investment income--net ......................................................... $ 10,750,238 $ 10,376,154
Realized gain--net ............................................................. 1,172,122 692,592
Change in unrealized appreciation/depreciation--net ............................ 1,147,405 (296,591)
-------------------------------
Net increase in net assets resulting from operations ........................... 13,069,765 10,772,155
-------------------------------
===============================================================================================================================
Dividends to Shareholders**
- -------------------------------------------------------------------------------------------------------------------------------
Investment income--net:
Class A ..................................................................... (7,854,809) (6,853,720)
Class B ..................................................................... (1,632,651) (2,240,911)
Class C ..................................................................... (691,341) (720,939)
Class I ..................................................................... (505,899) (487,887)
-------------------------------
Net decrease in net assets resulting from dividends to shareholders ............ (10,684,700) (10,303,457)
-------------------------------
===============================================================================================================================
Beneficial Interest Transactions
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets derived from beneficial interest
transactions .................................................................. 71,338,738 (16,553,534)
-------------------------------
===============================================================================================================================
Net Assets
- -------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets ........................................ 73,723,803 (16,084,836)
Beginning of year .............................................................. 214,497,774 230,582,610
-------------------------------
End of year* ................................................................... $ 288,221,577 $ 214,497,774
===============================
* Undistributed investment income--net ...................................... $ 500,416 $ 434,878
===============================
** Effective October 2, 2006, Class A, Class B, Class C and Class I Shares
were redesignated Investor A1, Investor B, Investor C1 and Institutional
Shares, respectively.
See Notes to Financial Statements.
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 15
Financial Highlights (As Restated. See Note 8)
Class A@
The following per share data -----------------------------------------------------------------------------------
and ratios have been derived For the Year Ended September 30,
from information provided in -----------------------------------------------------------------------------------
the financial statements. 2006 2005 2004 2003 2002
===============================================================================================================================
Per Share Operating Performance
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ..... $ 11.05 $ 11.03 $ 11.23 $ 11.45 $ 11.14
-----------------------------------------------------------------------------------
Investment income--net ................. .50++ .53++ .53++ .54++ .51
Realized and unrealized gain (loss)--net .04 .02 (.20) (.22) .32
-----------------------------------------------------------------------------------
Total from investment operations ....... .54 .55 .33 .32 .83
-----------------------------------------------------------------------------------
Less dividends and distributions:
Investment income--net ............... (.49) (.53) (.53) (.54) (.52)
Realized gain--net ................... -- -- --+ -- --+
-----------------------------------------------------------------------------------
Total dividends and distributions ...... (.49) (.53) (.53) (.54) (.52)
-----------------------------------------------------------------------------------
Net asset value, end of year ........... $ 11.10 $ 11.05 $ 11.03 $ 11.23 $ 11.45
===================================================================================
===============================================================================================================================
Total Investment Return*
- -------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ..... 5.08% 5.05% 3.05% 2.89% 7.73%
===================================================================================
===============================================================================================================================
Ratios to Average Net Assets
- -------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement and
excluding interest expense ........... .84% .84% .84% .84% .80%
===================================================================================
Expenses, net of reimbursement ......... .99% .99% .92% .93% .90%
===================================================================================
Expenses** ............................. 1.00% .99% .93% .93% .90%
===================================================================================
Investment income--net ................. 4.52% 4.79% 4.79% 4.83% 4.60%
===================================================================================
===============================================================================================================================
Supplemental Data
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) . $ 223,322 $ 141,319 $ 145,532 $ 150,395 $ 145,267
===================================================================================
Portfolio turnover ..................... 46% 24% 20% 49% 49%
===================================================================================
Class B@
The following per share data -------------------------------------------------------------------------------
and ratios have been derived For the Year Ended September 30,
from information provided in -------------------------------------------------------------------------------
the financial statements. 2006 2005 2004 2003 2002
===========================================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ..... $ 11.06 $ 11.04 $ 11.23 $ 11.46 $ 11.15
-------------------------------------------------------------------------------
Investment income--net ................. .45++ .49++ .49++ .50++ .47
Realized and unrealized gain (loss)--net .04 .01 (.20) (.24) .32
-------------------------------------------------------------------------------
Total from investment operations ....... .49 .50 .29 .26 .79
-------------------------------------------------------------------------------
Less dividends and distributions:
Investment income--net ............... (.45) (.48) (.48) (.49) (.48)
Realized gain--net ................... -- -- --+ -- --+
-------------------------------------------------------------------------------
Total dividends and distributions ...... (.45) (.48) (.48) (.49) (.48)
-------------------------------------------------------------------------------
Net asset value, end of year ........... $ 11.10 $ 11.06 $ 11.04 $ 11.23 $ 11.46
===============================================================================
===========================================================================================================================
Total Investment Return*
- ---------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ..... 4.56% 4.62% 2.72% 2.38% 7.29%
===============================================================================
===========================================================================================================================
Ratios to Average Net Assets
- ---------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement and
excluding interest expense ........... 1.25% 1.25% 1.25% 1.25% 1.21%
===============================================================================
Expenses, net of reimbursement ......... 1.41% 1.40% 1.33% 1.33% 1.30%
===============================================================================
Expenses** ............................. 1.41% 1.40% 1.33% 1.34% 1.30%
===============================================================================
Investment income--net ................. 4.14% 4.38% 4.39% 4.41% 4.19%
===============================================================================
===========================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) . $ 34,921 $ 45,506 $ 57,409 $ 78,510 $ 102,847
===============================================================================
Portfolio turnover ..................... 46% 24% 20% 49% 49%
===============================================================================
* Total investment returns exclude the effects of sales charges.
** Represents total expenses before reimbursement.
+ Amount is less than $(.01) per share.
++ Based on average shares outstanding.
@ Effective October 2, 2006, Class A and Class B Shares were redesignated
Investor A1 and Investor B Shares, respectively.
See Notes to Financial Statements.
16 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Financial Highlights (concluded) (As Restated. See Note 8)
Class C@
The following per share data -----------------------------------------------------------------------------------
and ratios have been derived For the Year Ended September 30,
from information provided in -----------------------------------------------------------------------------------
the financial statements. 2006 2005 2004 2003 2002
===============================================================================================================================
Per Share Operating Performance
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ..... $ 11.06 $ 11.04 $ 11.24 $ 11.46 $ 11.15
-----------------------------------------------------------------------------------
Investment income--net ................. .44++ .48++ .48++ .48++ .45
Realized and unrealized gain (loss)--net .04 .01 (.21) (.22) .32
-----------------------------------------------------------------------------------
Total from investment operations ....... .48 .49 .27 .26 .77
-----------------------------------------------------------------------------------
Less dividends and distributions:
Investment income--net ............... (.44) (.47) (.47) (.48) (.46)
Realized gain--net ................... -- -- --+ -- --+
-----------------------------------------------------------------------------------
Total dividends and distributions ...... (.44) (.47) (.47) (.48) (.46)
-----------------------------------------------------------------------------------
Net asset value, end of year ........... $ 11.10 $ 11.06 $ 11.04 $ 11.24 $ 11.46
===================================================================================
===============================================================================================================================
Total Investment Return*
- -------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ..... 4.46% 4.52% 2.53% 2.38% 7.19%
===================================================================================
===============================================================================================================================
Ratios to Average Net Assets
- -------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement and
excluding interest expense ........... 1.35% 1.35% 1.35% 1.34% 1.31%
===================================================================================
Expenses, net of reimbursement ......... 1.50% 1.50% 1.43% 1.43% 1.41%
===================================================================================
Expenses** ............................. 1.51% 1.50% 1.43% 1.44% 1.41%
===================================================================================
Investment income--net ................. 4.03% 4.28% 4.29% 4.32% 4.10%
===================================================================================
===============================================================================================================================
Supplemental Data
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) . $ 18,984 $ 17,080 $ 17,309 $ 16,729 $ 14,773
===================================================================================
Portfolio turnover ..................... 46% 24% 20% 49% 49%
===================================================================================
Class I@
The following per share data -------------------------------------------------------------------------------
and ratios have been derived For the Year Ended September 30,
from information provided in -------------------------------------------------------------------------------
the financial statements. 2006 2005 2004 2003 2002
===========================================================================================================================
Per Share Operating Performance
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ..... $ 11.05 $ 11.03 $ 11.23 $ 11.46 $ 11.14
-------------------------------------------------------------------------------
Investment income--net ................. .51++ .54++ .54++ .55++ .52
Realized and unrealized gain (loss)--net .04 .02 (.20) (.23) .33
-------------------------------------------------------------------------------
Total from investment operations ....... .55 .56 .34 .32 .85
-------------------------------------------------------------------------------
Less dividends and distributions:
Investment income--net ............... (.50) (.54) (.54) (.55) (.53)
Realized gain--net ................... -- -- --+ -- --+
-------------------------------------------------------------------------------
Total dividends and distributions ...... (.50) (.54) (.54) (.55) (.53)
-------------------------------------------------------------------------------
Net asset value, end of year ........... $ 11.10 $ 11.05 $ 11.03 $ 11.23 $ 11.46
===============================================================================
===========================================================================================================================
Total Investment Return*
- ---------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ..... 5.19% 5.15% 3.15% 2.89% 7.93%
===============================================================================
===========================================================================================================================
Ratios to Average Net Assets
- ---------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement and
excluding interest expense ........... .74% .74% .74% .74% .71%
===============================================================================
Expenses, net of reimbursement ......... .90% .89% .82% .83% .80%
===============================================================================
Expenses** ............................. .90% .89% .83% .83% .80%
===============================================================================
Investment income--net ................. 4.64% 4.89% 4.90% 4.92% 4.69%
===============================================================================
===========================================================================================================================
Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) . $ 10,995 $ 10,593 $ 10,332 $ 10,275 $ 11,928
===============================================================================
Portfolio turnover ..................... 46% 24% 20% 49% 49%
===============================================================================
* Total investment returns exclude the effects of sales charges. Effective
December 28, 2005, Class I Shares are no longer subject to any front-end
sales charges.
** Represents total expenses before reimbursement.
+ Amount is less than $(.01) per share.
++ Based on average shares outstanding.
@ Effective October 2, 2006, Class C and Class I Shares were redesignated
Investor C1 and Institutional Shares, respectively.
See Notes to Financial Statements.
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 17
Notes to Financial Statements
1. Significant Accounting Policies:
On September 29, 2006, Merrill Lynch New York Municipal Bond Fund and Merrill
Lynch Multi-State Municipal Series Trust, of which the Fund is a part of, were
renamed BlackRock New York Municipal Bond Fund (the "Fund") and BlackRock
Multi-State Municipal Series Trust (the "Trust"), respectively. The Fund is
registered under the Investment Company Act of 1940, as amended, as a
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. The Fund offers multiple classes
of shares. Class A Shares are sold with a front-end sales charge. Shares of
Class B and Class C may be subject to a contingent deferred sales charge. Class
I Shares are sold only to certain eligible investors. 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).
Effective October 2, 2006, Class A, Class B, Class C and Class I Shares were
redesignated Investor A1, Investor B, Investor C1 and Institutional Shares,
respectively. Investor A1, Investor B and Investor C1 will no longer be
available for purchase except through dividend reinvestment in connection with
existing holdings or through certain authorized qualified employee benefit
plans. Income, expenses (other than expenses attributable to a specific class)
and realized and unrealized gains and losses are allocated daily to each class
based on its relative net assets. The following is a summary of significant
accounting policies followed by the Fund.
(a) Valuation of investments -- Municipal bonds are traded primarily in the
over-the-counter ("OTC") markets and are valued at the last available bid price
in the OTC market or on the basis of values as obtained by a pricing service.
Pricing services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations are reviewed by the officers of the Fund under the general direction
of the Board of Trustees. Such valuations and procedures are reviewed
periodically by the Board of Trustees of the Trust. 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 OTC 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 financial futures contracts.
Financial futures contracts are contracts for delayed delivery of
securities at a specific future date and at a specific price or yield.
Upon entering into a contract, the Fund deposits and maintains as
collateral such initial margin as required by the exchange on which the
transaction is effected. Pursuant to the contract, the Fund agrees to
receive from or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are known
as 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.
18 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Notes to Financial Statements (continued)
(c) Municipal bonds held in trust -- The Fund invests in leveraged residual
certificates ("TOB Residuals") issued by tender option bond trusts ("TOBs"). A
TOB is established by a third party sponsor forming a special purpose entity,
into which the Fund, or an agent on behalf of the Fund, transfers municipal
securities. A TOB typically issues two classes of beneficial interests:
short-term floating rate certificates, which are sold to third party investors,
and residual certificates, which are generally issued to the Fund which made the
transfer or to affiliates of the Fund. The Fund's transfer of the municipal
securities to a TOB does not qualify for sale treatment under Statement of
Financial Accounting Standards No. 140 "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities," therefore the municipal
securities deposited into a TOB are presented in the Fund's schedule of
investments and the proceeds from the transaction are reported as a liability
for trust certificates of the Fund. Similarly, proceeds from residual
certificates issued to affiliates, if any, from the transaction are included in
the liability for trust certificates. Interest income from the underlying
security is recorded by the Fund on an accrual basis. Interest expense incurred
on the secured borrowing and other expenses related to remarketing,
administration and trustee services to a TOB are reported as expenses of the
Fund. The floating rate certificates have interest rates that generally reset
weekly and their holders have the option to tender certificates to the TOB for
redemption at par at each reset date. The residual interests held by the Fund
include the right of the Fund (1) to cause the holders of a proportional share
of the floating rate certificates to tender their certificates at par, and (2)
to transfer a corresponding share of the municipal securities from the TOB to
the Fund. At September 30, 2006, the aggregate value of the underlying municipal
securities transferred to TOBs was $18,637,323, the related liability for trust
certificates was $8,475,000 and the range of interest rates was 3.50% to 3.54%.
Financial transactions executed through TOBs generally will underperform the
market for fixed rate municipal bonds in a rising interest rate environment, but
tend to outperform the market for fixed rate bonds when interest rates decline
or remain relatively stable. Should short-term interest rates rise, the Fund's
investment in TOB Residuals likely will adversely affect the Fund's investment
income-net and distributions to shareholders. Fluctuations in the market value
of municipal securities deposited into the TOB may adversely affect the Fund's
net asset value per share.
While the Fund's investment policies and restrictions expressly permit
investments in inverse floating rate securities such as TOB Residuals, they
generally do not allow the Fund to borrow money for purposes of making
investments. The Fund's management believes that the Fund's restrictions on
borrowings do not apply to the secured borrowings deemed to have occurred for
accounting purposes.
(d) Income taxes -- It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
(e) Recent accounting pronouncement -- In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48") entitled
"Accounting for Uncertainty in Income Taxes -- an interpretation of FASB
Statement No. 109." FIN 48 prescribes the minimum recognition threshold a tax
position must meet in connection with accounting for uncertainties in income tax
positions taken or expected to be taken by an entity including mutual funds
before being measured and recognized in the financial statements. Adoption of
FIN 48 is required for fiscal years beginning after December 15, 2006. The
impact on the Fund's financial statements, if any, is currently being assessed.
(f) Security transactions and investment income -- Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis. The Fund amortizes all
premiums and discounts on debt securities.
(g) Prepaid registration fees -- Prepaid registration fees are charged to
expense as the related shares are issued.
(h) 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.
(i) 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 &
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 19
Notes to Financial Statements (continued)
Co., Inc. ("ML & Co."), which is the limited partner. The Fund has entered into
a Distribution Agreement and Distribution Plans with FAM Distributors, Inc.
("FAMD" or the "Distributor"), which is a wholly owned subsidiary of Merrill
Lynch Group, Inc.
FAM is responsible for the management of the Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Fund. For such services, the Fund pays a monthly fee
based upon the average daily value of the Fund's net assets at the following
annual rates: .55% of the Fund's average daily net assets not exceeding $500
million; .525% of average daily net assets in excess of $500 million but not
exceeding $1 billion; and .50% of average daily net assets in excess of $1
billion. The Investment Adviser has agreed to waive its management fee by the
amount of management fees the Fund pays to FAM indirectly through its investment
in CMA New York Municipal Money Fund. For the year ended September 30, 2006, FAM
reimbursed the Fund in the amount of $8,055.
Pursuant to the Distribution Plans adopted by the Fund in accordance with Rule
12b-1 under the Investment Company Act of 1940, the Fund pays the Distributor an
ongoing account maintenance fee ("service fee") and a distribution fee. These
fees are accrued daily and paid monthly, at the annual rates based upon the
average daily net assets of the shares as follows:
- --------------------------------------------------------------------------------
Service Distribution
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 service 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 year ended September 30, 2006, FAMD earned underwriting discounts and
MLPF&S earned dealer concessions on the sales of the Fund's Class A and Class I
Shares as follows:
- --------------------------------------------------------------------------------
FAMD MLPF&S
- --------------------------------------------------------------------------------
Class A ............................ $ 7,931 $52,975
Class I ............................ $ 1,621 $18,309
- --------------------------------------------------------------------------------
For the year ended September 30, 2006, MLPF&S received contingent deferred sales
charges of $24,440 and $5,944 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 year ended September 30, 2006, the Fund reimbursed FAM $5,528 for
certain accounting services.
In February 2006, ML & Co. and BlackRock, Inc. entered into an agreement to
contribute ML & Co.'s investment management business, including FAM, to the
investment management business of BlackRock, Inc. The transaction closed on
September 29, 2006.
On July 31, 2006, shareholders of the Fund approved a new Investment Advisory
Agreement with BlackRock Advisors, Inc. (the "Manager"), a wholly owned
subsidiary of BlackRock, Inc. BlackRock Advisors, Inc. was reorganized into
BlackRock Advisors, LLC. The new advisory agreement became effective on
September 29, 2006 and the investment advisory fee is unchanged. In addition,
the Manager has entered into a sub-advisory agreement with BlackRock Investment
Management, LLC, an affiliate, under which the Manager pays the Sub-Adviser for
services it provides a fee equal to 59% of the management fee paid to the
Manager.
In connection with the closing, the Fund's Transfer Agent became PFPC Inc., an
affiliate of the Manager. In addition, BlackRock Distributors, Inc., an
affiliate of BlackRock, Inc., became an additional distributor.
Prior to the closing, certain officers and/or trustees of the Fund were officers
and/or directors of FAM, PSI, FDS, FAMD, and/or ML & Co.
Commencing September 29, 2006, certain officers and/or trustees of the Fund are
officers and/or directors of BlackRock, Inc. or its affiliates.
20 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Notes to Financial Statements (continued)
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended September 30, 2006 were $180,631,181 and $118,867,046, respectively.
4. Beneficial Interest Transactions:
Net increase (decrease) in net assets derived from beneficial interest
transactions was $71,338,738 and ($16,553,534) for the years ended September 30,
2006 and September 30, 2005, respectively.
Effective October 2, 2006, Class A, Class B, Class C and Class I Shares were
redesignated Investor A1, Investor B, Investor C1 and Institutional Shares,
respectively.
Transactions in shares of beneficial interest for each class were as follows:
- -------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 652,209 $ 7,185,635
Automatic conversion of shares ......... 523,681 5,733,661
Shares issued resulting
from reorganization .................. 7,992,857 87,042,207
Shares issued to shareholders in
reinvestment of dividends ............ 374,438 4,106,121
---------------------------------
Total issued ........................... 9,543,185 104,067,624
Shares redeemed ........................ (2,218,785) (24,289,237)
---------------------------------
Net increase ........................... 7,324,400 $ 79,778,387
=================================
- -------------------------------------------------------------------------------
Class A Shares for the Year Dollar
Ended September 30, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 188,086 $ 2,084,645
Automatic conversion of shares ......... 455,036 5,049,879
Shares issued to shareholders in
reinvestment of dividends ............ 286,498 3,178,323
---------------------------------
Total issued ........................... 929,620 10,312,847
Shares redeemed ........................ (1,338,117) (14,817,397)
---------------------------------
Net decrease ........................... (408,497) $ (4,504,550)
=================================
- -------------------------------------------------------------------------------
Class B Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 81,049 $ 888,958
Shares issued to shareholders in
reinvestment of dividends ............ 75,528 828,579
---------------------------------
Total issued ........................... 156,577 1,717,537
---------------------------------
Automatic conversion of shares ......... (523,422) (5,733,661)
Shares redeemed ........................ (602,227) (6,602,676)
---------------------------------
Total redeemed ......................... (1,125,649) (12,336,337)
---------------------------------
Net decrease ........................... (969,072) $ (10,618,800)
=================================
- -------------------------------------------------------------------------------
Class B Shares for the Year Dollar
Ended September 30, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 98,278 $ 1,090,046
Shares issued to shareholders in
reinvestment of dividends ............ 104,679 1,161,525
---------------------------------
Total issued ........................... 202,957 2,251,571
---------------------------------
Automatic conversion of shares ......... (454,789) (5,049,879)
Shares redeemed ........................ (835,234) (9,250,298)
---------------------------------
Total redeemed ......................... (1,290,023) (14,300,177)
---------------------------------
Net decrease ........................... (1,087,066) $ (12,048,606)
=================================
- -------------------------------------------------------------------------------
Class C Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 494,616 $ 5,430,483
Shares issued to shareholders in
reinvestment of dividends ............ 39,076 428,802
---------------------------------
Total issued ........................... 533,692 5,859,285
Shares redeemed ........................ (368,012) (4,036,763)
---------------------------------
Net increase ........................... 165,680 $ 1,822,522
=================================
- -------------------------------------------------------------------------------
Class C Shares for the Year Dollar
Ended September 30, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 291,412 $ 3,241,983
Shares issued to shareholders in
reinvestment of dividends ............ 40,795 452,944
---------------------------------
Total issued ........................... 332,207 3,694,927
Shares redeemed ........................ (356,174) (3,950,583)
---------------------------------
Net decrease ........................... (23,967) $ (255,656)
=================================
- -------------------------------------------------------------------------------
Class I Shares for the Year Dollar
Ended September 30, 2006 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 283,451 $ 3,105,770
Shares issued to shareholders in
reinvestment of dividends ............ 19,589 214,809
---------------------------------
Total issued ........................... 303,040 3,320,579
Shares redeemed ........................ (270,457) (2,963,950)
---------------------------------
Net increase ........................... 32,583 $ 356,629
=================================
- -------------------------------------------------------------------------------
Class I Shares for the Year Dollar
Ended September 30, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ............................ 287,347 $ 3,192,215
Shares issued to shareholders in
reinvestment of dividends ............ 22,638 251,116
---------------------------------
Total issued ........................... 309,985 3,443,331
Shares redeemed ........................ (288,316) (3,188,053)
---------------------------------
Net increase ........................... 21,669 $ 255,278
=================================
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 21
Notes to Financial Statements (continued)
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, which expires November 2006. 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 year ended September 30,
2006.
6. Distributions to Shareholders:
The tax character of distributions paid during the fiscal years ended September
30, 2006 and September 30, 2005 was as follows:
- --------------------------------------------------------------------------------
9/30/2006 9/30/2005
- --------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income .................... $10,684,700 $10,303,457
-------------------------------
Total distributions .................... $10,684,700 $10,303,457
===============================
As of September 30, 2006, the components of accumulated earnings on a tax basis
were as follows:
=============================================================================
Undistributed tax-exempt income -- net .................. $ 271,841
Undistributed long-term capital gains -- net ............ --
------------
Total undistributed earnings -- net ..................... 271,841
Capital loss carryforward ............................... (17,135,319)*
Unrealized gains -- net ................................. 18,590,129**
------------
Total accumulated earnings -- net ....................... $ 1,726,651
============
* On September 30, 2006, the Fund had a net capital loss carryforward of
$17,135,319, of which $8,200,112 expires in 2009 and $8,935,207 expires in
2013. This amount will be available to offset like amounts of any future
taxable gains.
** The difference between book-basis and tax-basis net unrealized gains is
attributable primarily to the tax deferral of losses on wash sales, the
tax deferral of losses on straddles, the difference between book and tax
amortization methods for premiums and discounts on fixed income
securities, the realization for tax purposes of unrealized gains (losses)
on certain futures contracts and the difference between the book and tax
treatment of residual interests in tender option bond trusts.
7. Acquisition of Lebenthal New York Municipal Bond Fund:
On May 1, 2006, the Fund acquired substantially all of the assets and assumed
substantially all of the liabilities of Lebenthal New York Municipal Bond Fund
pursuant to a plan of reorganization. The acquisition was accomplished by a
tax-free exchange of 10,938,694 shares of Common Stock of Lebenthal New York
Municipal Bond Fund for 7,992,857 Class A Shares of beneficial interest of the
Fund. Lebenthal New York Municipal Bond Fund's net assets on that date of
$87,042,207, including $6,175 of accumulated net realized losses and $3,460,794
of net unrealized appreciation were combined with those of the Fund. The
aggregate net assets immediately after the acquisition amounted to $293,674,393.
8. Restatement Information:
Subsequent to issuance of its September 30, 2006 financial statements, the Fund
determined that the criteria for sale accounting in Statement of Financial
Accounting Standards No. 140 had not been met for certain transfers of municipal
bonds and that these transfers should have been accounted for as secured
borrowings rather than as sales. Accordingly, the Fund has restated the
statement of assets and liabilities as of September 30, 2006, the statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. The effects of the restatement
were to record the transfers of the municipal bonds as secured borrowings, to
give effect to offsetting changes in realized gain -- net and in the change in
unrealized appreciation/depreciation -- net on the transferred municipal
securities and to give effect to recording interest on the bonds as interest
income and interest on the secured borrowings as interest expense.
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities as of
September 30, 2006
- -------------------------------------------------------------------------------
Previously
Reported Restated
- -------------------------------------------------------------------------------
Investments in unaffiliated
securities, at value ................. $ 283,078,972 $ 291,553,972
Investments in unaffiliated
securities, identified cost .......... $ 264,090,177 $ 272,538,624
Interest receivable .................... $ 4,447,289 $ 4,554,504
Total assets ........................... $ 290,087,285 $ 298,669,500
Trust certificates ..................... -- $ 8,475,000
Interest expense payable ............... -- $ 107,215
Total liabilities ...................... $ 1,865,708 $ 10,447,923
Accumulated realized capital
losses -- net ........................ $ (17,670,246) $ (17,696,799)
Unrealized appreciation -- net ......... $ 18,896,481 $ 18,923,034
- -------------------------------------------------------------------------------
22 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Notes to Financial Statements (concluded)
- --------------------------------------------------------------------------------
Statement of Operations for the Year Ended
September 30, 2006
- --------------------------------------------------------------------------------
Previously
Reported Restated
- --------------------------------------------------------------------------------
Interest ................................. $12,967,578 $13,351,412
Total Income ............................. $13,018,063 $13,401,897
Interest expense and fees ................ -- $ 383,834
Total expenses before
reimbursement .......................... $ 2,275,880 $ 2,659,714
Total expenses after
reimbursement .......................... $ 2,267,825 $ 2,651,659
Realized gain (loss) on
investments -- net ..................... $ 976,466 $ 1,229,168
Change in unrealized
appreciation/depreciation
on investments -- net .................... $ 1,492,421 $ 1,239,719
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets for the Year Ended
September 30, 2006
- --------------------------------------------------------------------------------
Previously
Reported Restated
- --------------------------------------------------------------------------------
Realized gain -- net ....................... $ 919,420 $1,172,122
Change in unrealized appreciation/
depreciation -- net ...................... $1,400,107 $1,147,405
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets for the Year Ended
September 30, 2005
- --------------------------------------------------------------------------------
Previously
Reported Restated
- --------------------------------------------------------------------------------
Realized gain -- net ....................... $ 616,980 $ 692,592
Change in unrealized appreciation/
depreciation -- net ...................... $(220,979) $(296,591)
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Financial Highlights
For the Years Ended September 30, 2006, 2005, 2004, 2003 and 2002
- ----------------------------------------------------------------------------------------------------------------------------------
2006 2005 2004 2003 2002
------------------- ------------------- ------------------- ------------------- -------------------
Previously Previously Previously Previously Previously
Class A Reported Restated Reported Restated Reported Restated Reported Restated Reported Restated
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement .84% .99% .84% .99% .84% .92% .84% .93% .80% .90%
Expenses ..................... .84% 1.00% .84% .99% .85% .93% .84% .93% .80% .90%
Portfolio turnover ........... 55.32% 46% 27.34% 24% 21.68% 20% 55.91% 49% 53.86% 49%
- ----------------------------------------------------------------------------------------------------------------------------------
2006 2005 2004 2003 2002
------------------- ------------------- ------------------- ------------------- -------------------
Previously Previously Previously Previously Previously
Class B Reported Restated Reported Restated Reported Restated Reported Restated Reported Restated
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement 1.25% 1.41% 1.25% 1.40% 1.25% 1.33% 1.25% 1.33% 1.21% 1.30%
Expenses ..................... 1.25% 1.41% 1.25% 1.40% 1.25% 1.33% 1.25% 1.34% 1.21% 1.30%
Portfolio turnover ........... 55.32% 46% 27.34% 24% 21.68% 20% 55.91% 49% 53.86% 49%
2006 2005 2004 2003 2002
------------------- ------------------- ------------------- ------------------- -------------------
Previously Previously Previously Previously Previously
Class C Reported Restated Reported Restated Reported Restated Reported Restated Reported Restated
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement 1.35% 1.50% 1.35% 1.50% 1.35% 1.43% 1.34% 1.43% 1.31% 1.41%
Expenses ..................... 1.35% 1.51% 1.35% 1.50% 1.35% 1.43% 1.35% 1.44% 1.31% 1.41%
Portfolio turnover ........... 55.32% 46% 27.34% 24% 21.68% 20% 55.91% 49% 53.86% 49%
2006 2005 2004 2003 2002
------------------- ------------------- ------------------- ------------------- -------------------
Previously Previously Previously Previously Previously
Class I Reported Restated Reported Restated Reported Restated Reported Restated Reported Restated
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement .74% .90% .74% .89% .74% .82% .74% .83% .71% .80%
Expenses ..................... .74% .90% .74% .89% .75% .83% .74% .83% .71% .80%
Portfolio turnover ........... 55.32% 46% 27.34% 24% 21.68% 20% 55.91% 49% 53.86% 49%
While the Statements of Assets and Liabilities as of September 30, 2005, 2004,
2003 and 2002, not presented herein, have not been reissued to give effect to
the restatement, the principal effects of the restatement would be to increase
investments and liability for trust certificates by corresponding amounts at
each year end, with no effect on previously reported net assets.
The Statements of Operations for the years ended September 30, 2005, 2004, 2003
and 2002, not presented herein, have not been reissued to give effect to the
restatement. However, the principal effects of the restatement would be to
increase interest income and interest expense and fees by corresponding amounts
each year, and, where applicable, to revise realized gain (loss) on investments
- -- net, and the change in unrealized appreciation/depreciation on investments --
net, by corresponding and offsetting amounts.
The Statements of Changes in Net Assets for the years ended September 30, 2004,
2003 and 2002, not presented herein, have not been reissued to give effect to
the restatement, but the principal effects of a restatement, where applicable,
would be to revise previously reported realized gain (loss) -- net, and change
in unrealized appreciation/depreciation -- net, by corresponding and offsetting
amounts.
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 23
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees of BlackRock Multi-State Municipal
Series Trust:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of BlackRock New York Municipal Bond Fund, one of
the portfolios constituting BlackRock Multi-State Municipal Series Trust
(formerly Merrill Lynch New York Municipal Bond Fund of Merrill Lynch
Multi-State Municipal Series Trust) (the "Trust"), as of September 30, 2006, and
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Trust
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Trust's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of September 30, 2006, by correspondence with the
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
BlackRock New York Municipal Bond Fund of BlackRock Multi-State Municipal Series
Trust as of September 30, 2006, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and its financial highlights for each of the five years in the
period then ended, in conformity with U.S. generally accepted accounting
principles.
As discussed in Note 8, the statement of assets and liabilities, including the
schedule of investments, as of September 30, 2006, the statement of operations
for the year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
five years in the period then ended have been restated.
Deloitte & Touche LLP
Princeton, New Jersey
November 21, 2006
(January 26, 2007 as to Note 8)
Important Tax Information (unaudited)
All of the net investment income distributions paid monthly by BlackRock New
York Municipal Bond Fund of BlackRock Multi-State Municipal Series Trust during
the taxable year ended September 30, 2006 qualify as tax-exempt interest
dividends for federal income tax purposes.
24 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Disclosure of New Investment Advisory Agreement
New BlackRock Investment Advisory Agreement -- Matters Considered by the Board
In connection with the combination of Merrill Lynch's investment advisory
business, including Fund Asset Management, L.P. (the "Previous Investment
Adviser"), with that of BlackRock, Inc. ("BlackRock") to create a new
independent company ("New BlackRock") (the "Transaction"), the Fund's Board of
Trustees considered and approved a new investment advisory agreement (the
"BlackRock Investment Advisory Agreement") between the Fund and BlackRock
Advisors, LLC ("BlackRock Advisors"). The Fund's shareholders subsequently
approved the BlackRock Investment Advisory Agreement and it became effective on
September 29, 2006, replacing the investment advisory agreement with the
Previous Investment Adviser (the "Previous Investment Advisory Agreement").
The Board discussed the BlackRock Investment Advisory Agreement at telephonic
and in-person meetings held during April and May 2006. The Board, including the
independent trustees, approved the BlackRock Investment Advisory Agreement at an
in-person meeting held on May 9, 2006. The Board also approved the issuance of
new classes of shares and new distribution arrangements with respect to these
new share classes, including higher distribution fees for certain new share
classes, which took effect after September 29, 2006. The Board also approved
revised front-end sales charge schedules with respect to certain classes of
shares of the Fund.
To assist the Board in its consideration of the BlackRock Investment Advisory
Agreement, BlackRock provided materials and information about BlackRock,
including its financial condition and asset management capabilities and
organization, and Merrill Lynch provided materials and information about the
Transaction. The independent trustees, through their independent legal counsel,
also requested and received additional information from Merrill Lynch and
BlackRock in connection with their consideration of the BlackRock Investment
Advisory Agreement. The additional information was provided in advance of the
May 9, 2006 meeting. In addition, the independent trustees consulted with their
counsel and Fund counsel on numerous occasions, discussing, among other things,
the legal standards and certain other considerations relevant to the trustees'
deliberations.
At the Board meetings, the trustees discussed with Merrill Lynch management and
certain BlackRock representatives the Transaction, its strategic rationale and
BlackRock's general plans and intentions regarding the Fund. At these Board
meetings, representatives of Merrill Lynch and BlackRock made presentations to
and responded to questions from the Board. The trustees also inquired about the
plans for and anticipated roles and responsibilities of certain employees and
officers of the Previous Investment Adviser, and of its affiliates, to be
transferred to BlackRock in connection with the Transaction. The independent
trustees of the Board also conferred separately and with their counsel about the
Transaction and other matters related to the Transaction on a number of
occasions, including in connection with the April and May 2006 meetings. After
the presentations and after reviewing the written materials provided, the
independent trustees met in executive sessions with their counsel to consider
the BlackRock Investment Advisory Agreement.
In connection with the Board's review of the BlackRock Investment Advisory
Agreement, Merrill Lynch and/or BlackRock advised the trustees about a variety
of matters. The advice included the following, among other matters:
o that there was not expected to be any diminution in the nature, quality
and extent of services provided to the Fund and its shareholders by
BlackRock Advisors, including compliance services;
o that operation of New BlackRock as an independent investment management
firm would enhance its ability to attract and retain talented
professionals;
o that the Fund was expected to benefit from having access to BlackRock's
state of the art technology and risk management analytic tools, including
investment tools, provided under the BlackRock Solutions(R) brand name;
o that BlackRock had no present intention to alter any applicable expense
waivers or reimbursements that were currently in effect and, while it
reserved the right to do so in the future, it would seek the approval of
the Board before making any changes;
o that BlackRock and Merrill Lynch would enter into an agreement, for an
initial three-year period and automatically renewable from year to year
thereafter, in connection with the Transaction under which Merrill
Lynch-affiliated broker-dealers would continue to offer the Fund as an
investment product;
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 25
Disclosure of New Investment Advisory Agreement (continued)
o that BlackRock Advisors would have substantially the same access to the
Merrill Lynch sales force when distributing shares of the Fund as was
currently being provided to the Previous Investment Adviser and that other
arrangements between the Previous Investment Adviser and Merrill Lynch
sales channels would be preserved;
o that the Fund would have access to BlackRock's network of third party
brokers, retirement plan platforms and registered investment advisers;
o that in connection with the Transaction, Merrill Lynch and BlackRock had
agreed to conduct, and use reasonable best efforts to cause their
respective affiliates to conduct, their respective businesses in
compliance with the conditions of Section 15(f) of the Investment Company
Act of 1940 (the "1940 Act") in relation to any public funds advised by
BlackRock or the Previous Investment Adviser (or affiliates),
respectively; and
o that Merrill Lynch and BlackRock would derive benefits from the
Transaction and that, as a result, they had a financial interest in the
matters being considered that was different from that of Fund
shareholders.
The trustees considered the information provided by Merrill Lynch and BlackRock
above, and, among other factors, the following:
o the potential benefits to Fund shareholders from being part of a combined
fund family with BlackRock-sponsored funds, including possible economies
of scale and access to investment opportunities;
o the potential for expanding distribution of Fund shares through improved
access to third party distribution;
o the reputation, financial strength and resources of BlackRock and its
investment advisory subsidiaries and the anticipated financial strength
and resources of New BlackRock;
o the compliance policies and procedures of BlackRock Advisors;
o the terms and conditions of the BlackRock Investment Advisory Agreement,
including the fact that the Fund's advisory fee schedule would not
increase under the BlackRock Investment Advisory Agreement, but would
remain the same;
o that in February 2006, the Board had performed a full annual review of the
Previous Investment Advisory Agreement, as required by the 1940 Act, and
had determined that the Previous Investment Adviser had the capabilities,
resources and personnel necessary to provide the advisory and
administrative services that were then being provided to the Fund; and
that the advisory and/or management fees paid by the Fund, taking into
account any applicable agreed-upon fee waivers and breakpoints, had
represented reasonable compensation to the Previous Investment Adviser in
light of the services provided, the costs to the Previous Investment
Adviser of providing those services, economies of scale, the fees and
other expenses paid by similar funds (including information provided by
Lipper Inc. ["Lipper"]), and such other matters as the trustees had
considered relevant in the exercise of their reasonable judgment; and
o that Merrill Lynch had agreed to pay all expenses of the Fund in
connection with the Board's consideration of the BlackRock Investment
Advisory Agreement and related agreements and all costs of shareholder
approval of the BlackRock Investment Advisory Agreement and as a result
the Fund would bear no costs in obtaining shareholder approval of the
BlackRock Investment Advisory Agreement.
Certain of these considerations are discussed in more detail below.
In its review of the BlackRock Investment Advisory Agreement, the Board assessed
the nature, quality and scope of the services to be provided to the Fund by the
personnel of BlackRock Advisors and its affiliates, including administrative
services, shareholder services, oversight of fund accounting, marketing services
and assistance in meeting legal and regulatory requirements. In its review of
the BlackRock Investment Advisory Agreement, the Board also considered a range
of information in connection with its oversight of the services to be provided
by BlackRock Advisors and its affiliates. Among the matters considered were: (a)
fees (in addition to management fees) to be paid to BlackRock Advisors and its
affiliates by the Fund; (b) Fund operating expenses paid to third parties; (c)
the resources devoted to and compliance reports relating to the Fund's
investment objective, policies and restrictions, and its compliance with its
Code of Ethics and BlackRock Advisors' compliance policies and procedures; and
(d) the nature, cost and character of non-investment management services to be
provided by BlackRock Advisors and its affiliates.
26 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
In the period prior to the Board meeting to consider renewal of the Previous
Investment Advisory Agreement, the Board had requested and received materials
specifically relating to the Previous Investment Advisory Agreement. These
materials included (a) information compiled by Lipper on the fees and expenses
and the investment performance of the Fund as compared to a comparable group of
funds as classified by Lipper; (b) a discussion by the Fund's portfolio
management team on investment strategies used by the Fund during its most recent
fiscal year; (c) information on the profitability to the Previous Investment
Adviser of the Previous Investment Advisory Agreement and other payments
received by the Previous Investment Adviser and its affiliates from the Fund;
and (d) information provided by the Previous Investment Adviser concerning
services related to the valuation and pricing of Fund portfolio holdings, the
Fund's portfolio turnover statistics, and direct and indirect benefits to the
Previous Investment Adviser and its affiliates from their relationship with the
Fund.
In their deliberations, the trustees considered information received in
connection with their most recent approval of the continuance of the Previous
Investment Advisory Agreement, in addition to information provided by BlackRock
and BlackRock Advisors in connection with their evaluation of the terms and
conditions of the BlackRock Investment Advisory Agreement. The trustees did not
identify any particular information that was all-important or controlling. The
trustees, including a majority of the independent trustees, concluded that the
terms of the BlackRock Investment Advisory Agreement are appropriate, that the
fees to be paid are reasonable in light of the services to be provided to the
Fund, and that the BlackRock Investment Advisory Agreement should be approved
and recommended to Fund shareholders.
Nature, Quality and Extent of Services Provided -- The Board reviewed the
nature, quality and extent of services provided by the Previous Investment
Adviser, including the investment advisory services and the resulting
performance of the Fund, as well as the nature, quality and extent of services
expected to be provided by BlackRock Advisors. The Board focused primarily on
the Previous Investment Adviser's investment advisory services and the Fund's
investment performance, but also considered certain areas in which both the
Previous Investment Adviser and the Fund received services as part of the
Merrill Lynch complex. The Board compared the Fund's performance -- both
including and excluding the effects of fees and expenses -- to the performance
of a comparable group of mutual funds, and the performance of a relevant index
or combination of indexes. While the Board reviews performance data at least
quarterly, consistent with the Previous Investment Adviser's investment goals,
the Board attaches more importance to performance over relatively long periods
of time, typically three to five years.
In evaluating the nature, quality and extent of the services to be provided by
BlackRock Advisors under the BlackRock Investment Advisory Agreement, the
trustees considered, among other things, the expected impact of the Transaction
on the operations, facilities, organization and personnel of New BlackRock and
how it would affect the Fund; the ability of BlackRock Advisors to perform its
duties after the Transaction; and any anticipated changes to the investment and
other practices of the Fund.
The trustees were given information with respect to the potential benefits to
the Fund and its shareholders from having access to BlackRock's state of the art
technology and risk management analytic tools, including the investment tools
provided under the BlackRock Solutions brand name.
The trustees were advised that, as a result of Merrill Lynch's equity interest
in BlackRock after the Transaction, the Fund would continue to be subject to
restrictions concerning certain transactions involving Merrill Lynch affiliates
(for example, transactions with a Merrill Lynch broker-dealer acting as
principal) absent revised or new regulatory relief. The trustees were advised
that a revision of existing regulatory relief with respect to these restrictions
was being sought from the Securities and Exchange Commission and were advised of
the possibility of receipt of such revised regulatory relief.
Based on their review of the materials provided and the assurances they had
received from the management of Merrill Lynch and of BlackRock, the trustees
determined that the nature and quality of services to be provided to the Fund
under the BlackRock Investment Advisory Agreement were expected to be as good as
or better than that provided under the Previous Investment Advisory Agreement.
The trustees were advised that BlackRock Advisors did not plan to change the
Fund's portfolio management team upon the closing of the transaction. It was
noted, however, that other changes in personnel were expected to follow the
Transaction and the combination of the operations of the Previous Investment
Adviser and its affiliates with those of BlackRock. The trustees noted that if
portfolio managers or other personnel were to cease to be available prior to the
closing of the Transaction, the Board would consider all available options,
including seeking the investment advisory or other services of
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 27
Disclosure of New Investment Advisory Agreement (concluded)
BlackRock affiliates. Accordingly, the trustees concluded that, overall, they
were satisfied with assurances from BlackRock and BlackRock Advisors as to the
expected nature, quality and extent of the services to be provided to the Fund
under the BlackRock Investment Advisory Agreement.
Costs of Services Provided and Profitability -- It was noted that, in
conjunction with the recent review of the Previous Investment Advisory
Agreement, the trustees had received, among other things, a report from Lipper
comparing the Fund's fees and expenses to those of a peer group selected by
Lipper, and information as to the fees charged by the Previous Investment
Adviser or its affiliates to other registered investment company clients for
investment management services. The Board reviewed the Fund's contractual
management fee rate and actual management fee rate as a percentage of total
assets at common asset levels -- the actual rate includes advisory fees and the
effects of any fee waivers -- compared to the other funds in its Lipper
category. They also compared the Fund's total expenses to those of other
comparable funds. The information showed that the Fund had fees and expenses
within the range of fees and expenses of comparable funds. The Board considered
the services to be provided by and the fees to be charged by BlackRock Advisors
to other funds with similar investment mandates and noted that the fees charged
by BlackRock Advisors in those cases, including fee waivers and expense
reimbursements, were generally comparable to those being charged to the Fund.
The Board concluded that the Fund's management fee and fee rate and overall
expense ratio are reasonable compared to those of other comparable funds.
In evaluating the costs of the services to be provided by BlackRock Advisors
under the BlackRock Investment Advisory Agreement, the trustees considered,
among other things, whether advisory fees or other expenses would change as a
result of the Transaction. Based on their review of the materials provided and
the fact that the BlackRock Investment Advisory Agreement is substantially
similar to the Previous Investment Advisory Agreement in all material respects,
including the rate of compensation, the trustees determined that the Transaction
should not increase the total fees payable, including any fee waivers or after
any expense caps or expense reimbursements, for advisory and administrative
services. The trustees noted that it was not possible to predict how the
Transaction would affect BlackRock Advisors' profitability from its relationship
with the Fund.
The trustees discussed with BlackRock Advisors its general methodology to be
used in determining its profitability with respect to its relationship with the
Fund and noted that they expect to receive profitability information from
BlackRock Advisors on at least an annual basis.
Fees and Economies of Scale -- The Board considered the extent to which
economies of scale might be realized as the assets of the Fund increase and
whether there should be changes in the management fee rate or structure in order
to enable the Fund to participate in these economies of scale. The Board
determined that changes were not currently necessary and that the Fund
appropriately participated in these economies of scale.
In reviewing the Transaction, the trustees considered, among other things,
whether advisory fees or other expenses would change as a result of the
Transaction. Based on the fact that the BlackRock Investment Advisory Agreement
is substantially similar to the Previous Investment Advisory Agreement in all
material respects, including the rate of compensation, the trustees determined
that as a result of the Transaction, the Fund's total advisory fees would be no
higher than the fees under the Previous Investment Advisory Agreement. The
trustees concluded that because the rates for advisory fees for the Fund would
be no higher than the fee rates in effect at the time, the proposed management
fee structure, including any fee waivers, was reasonable and that no additional
changes were currently necessary.
Fall-Out Benefits -- The trustees considered whether the Fund would generate any
fall-out benefits to BlackRock Advisors. Fall-out benefits are indirect profits
from other activities that accrue to the adviser or its affiliates solely
because of the existence of the Fund. In evaluating the fall-out benefits to be
received by BlackRock Advisors under the BlackRock Investment Advisory
Agreement, the trustees considered whether BlackRock Advisors would experience
such benefits to the same extent that the Previous Investment Adviser was
experiencing such benefits under the Previous Investment Advisory Agreement.
Based on their review of the materials provided, including materials received in
connection with their most recent approval of the continuance of the Previous
Investment Advisory Agreement, and their discussions with management of the
Previous Investment Adviser and BlackRock, the trustees determined that those
benefits could include increased ability for BlackRock to distribute shares of
its funds and other investment products. The trustees noted that any such
benefits were difficult to quantify with certainty at this time.
28 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Investment Performance -- The trustees considered investment performance for the
Fund. The trustees compared the Fund's performance -- both including and
excluding the effects of fees and expenses -- to the performance of a comparable
group of mutual funds, and the performance of a relevant index or combination of
indexes. The comparative information received from Lipper showed Fund
performance at various levels within the range of performance of comparable
funds over different time periods. The trustees believed the Fund's performance
was satisfactory. Also, the trustees took into account the investment
performance of funds advised by BlackRock Advisors. The Board considered
comparative information from Lipper which showed that the performance of the
funds advised by BlackRock Advisors was within the range of performance of
comparable funds over different time periods. The Board noted BlackRock's
considerable investment management experience and capabilities, but was unable
to predict what effect, if any, consummation of the Transaction would have on
the future performance of the Fund.
Conclusion -- After the independent trustees of the Fund deliberated in
executive session, the entire Board, including the independent trustees,
approved the BlackRock Investment Advisory Agreement, concluding that the
advisory fee rate was reasonable in relation to the services provided and that
the BlackRock Investment Advisory Agreement was in the best interests of the
shareholders. In approving the BlackRock Investment Advisory Agreement, the
Board noted that it anticipated reviewing the continuance of the agreement in
advance of the expiration of the initial two-year period.
New BlackRock Sub-Advisory Agreement -- Matters Considered by the Board
At an in-person meeting held on August 22-23, 2006, the Board of Trustees,
including the independent trustees, discussed and approved the sub-advisory
agreement (the "BlackRock Sub-Advisory Agreement") between BlackRock Advisors
and its affiliate, BlackRock Investment Management, LLC (the "Sub-Adviser"). The
BlackRock Sub-Advisory Agreement became effective on September 29, 2006, at the
same time the BlackRock Investment Advisory Agreement became effective.
Pursuant to the BlackRock Sub-Advisory Agreement, the Sub-Adviser receives a
monthly fee from BlackRock Advisors equal to 59% of the advisory fee received by
BlackRock Advisors from the Fund. BlackRock Advisors pays the Sub-Adviser out of
its own resources, and there is no increase in Fund expenses as a result of the
BlackRock Sub-Advisory Agreement.
In approving the BlackRock Sub-Advisory Agreement at the August in-person
meeting, the Board reviewed its considerations in connection with its approval
of BlackRock Investment Advisory Agreement in May 2006. The Board relied on the
same information and considered the same factors as those discussed above in
connection with the approval of the BlackRock Investment Advisory Agreement, and
came to the same conclusions. In reviewing the sub-advisory fee rate provided in
the BlackRock Sub-Advisory Agreement, the Board noted the fact that both
BlackRock Advisors and the Sub-Adviser have significant responsibilities under
their respective advisory agreements. BlackRock Advisors remains responsible for
oversight of the Fund's operations and administration, and the Sub-Adviser
provides advisory services to the Fund and is responsible for the day-to-day
management of the Fund's portfolio under the BlackRock Sub-Advisory Agreement.
The Board also took into account the fact that there is no increase in total
advisory fees paid by the Fund as a result of the BlackRock Sub-Advisory
Agreement. Under all of the circumstances, the Board concluded that it was a
reasonable allocation of fees for the Sub-Adviser to receive 59% of the advisory
fee paid by the Fund to BlackRock Advisors.
After the independent trustees deliberated in executive session, the entire
Board, including the independent trustees, approved the BlackRock Sub-Advisory
Agreement, concluding that the sub-advisory fee was reasonable in relation to
the services provided and that the BlackRock Sub-Advisory Agreement was in the
best interests of shareholders.
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 29
Officers and Trustees
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Trustee Trustee
====================================================================================================================================
Interested Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Robert C. P.O. Box 9011 President 2005 to Vice Chairman and Director of BlackRock, and Global 129 Funds None
Doll, Jr.* Princeton, NJ and present Chief Investment Officer for Equities, Chairman of 174 Portfolios
08543-9011 Trustee the BlackRock Private Client Operating Committee,
Age: 52 and member of the BlackRock Executive Committee
since 2006; President of the Funds advised by
Merrill Lynch Investment Managers ("MLIM") and its
affiliates ("MLIM/FAM-advised funds") from 2005 to
2006 and Chief Investment Officer thereof from 2001
to 2006; President of MLIM and Fund Asset
Management, L.P. ("FAM") from 2001 to 2006; Co-Head
(Americas Region) thereof from 2000 to 2001 and
Senior Vice President from 1999 to 2001; President
and Director of Princeton Services, Inc.
("Princeton Services") since 2001; President of
Princeton Administrators, L.P. ("Princeton Admin-
istrators") from 2001 to 2006; Chief Investment
Officer of Oppenheimer Funds, Inc. in 1999 and
Executive Vice President thereof from 1991 to 1999.
------------------------------------------------------------------------------------------------------------------------
* Mr. Doll is a director, trustee or member of an advisory board of certain other investment companies for which
BlackRock acts as investment adviser. Mr. Doll is an "interested person" as defined in the Investment Company Act,
of the Fund based on his current and former positions with BlackRock, Inc. and its affiliates. Trustees serve
until their resignation, removal or death, or until December 31 of the year in which they turn 72. As Fund
President, Mr. Doll serves at the pleasure of the Board of Trustees.
====================================================================================================================================
Independent Trustees*
- ------------------------------------------------------------------------------------------------------------------------------------
James H. P.O. Box 9095 Trustee 1995 to Director, The China Business Group, Inc. since 1996 39 Funds None
Bodurtha** Princeton, NJ present and Executive Vice President thereof from 1996 to 59 Portfolios
08543-9095 2003; Chairman of the Board, Berkshire Holding
Age: 62 Corporation since 1980; Partner, Squire, Sanders &
Dempsey from 1980 to 1993.
- ------------------------------------------------------------------------------------------------------------------------------------
Kenneth A. P.O. Box 9095 Trustee 2005 to Professor, Harvard University since 1992; 39 Funds None
Froot Princeton, NJ present Professor, Massachusetts Institute of Technology 59 Portfolios
08543-9095 from 1986 to 1992.
Age: 49
- ------------------------------------------------------------------------------------------------------------------------------------
30 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Officers and Trustees (continued)
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Trustee Trustee
====================================================================================================================================
Independent Trustees* (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Joe P.O. Box 9095 Trustee 2002 to Member of the Committee of Investment of Employee 39 Funds Kimco Realty
Grills** Princeton, NJ present Benefit Assets of the Association of Financial 59 Portfolios Corporation
08543-9095 Professionals ("CIEBA") since 1986; Member of
Age: 71 CIEBA's Executive Committee since 1988 and its
Chairman from 1991 to 1992; Assistant Treasurer of
International Business Machines Corporation ("IBM")
and Chief Investment Officer of IBM Retirement
Funds from 1986 to 1993; Member of the Investment
Advisory Committee of the State of New York Common
Retirement Fund since 1989; Member of the
Investment Advisory Committee of the Howard Hughes
Medical Institute from 1997 to 2000; Director, Duke
University Management Company from 1992 to 2004,
Vice Chairman thereof from 1998 to 2004, and
Director Emeritus thereof since 2004; Director,
LaSalle Street Fund from 1995 to 2001; Director,
Kimco Realty Corporation since 1997; Member of the
Investment Advisory Committee of the Virginia
Retirement System since 1998, Vice Chairman thereof
from 2002 to 2005, and Chairman thereof since 2005;
Director, Montpelier Foundation since 1998 and its
Vice Chairman since 2000; Member of the Investment
Committee of the Woodberry Forest School since
2000; Member of the Investment Committee of the
National Trust for Historic Preservation since
2000.
- ------------------------------------------------------------------------------------------------------------------------------------
Herbert I. P.O. Box 9095 Trustee 1987 to Chairman of the Board of Directors of Vigilant 39 Funds None
London Princeton, NJ present Research, Inc. since 2006; Member of the Board of 59 Portfolios
08543-9095 Directors for Grantham University since 2006;
Age: 67 Director of AIMS since 2006; Director of Reflex
Security since 2006; Director of InnoCentive, Inc.
since 2006; Director of Cerego, LLC since 2005;
Professor Emeritus, New York University since 2005;
John M. Olin Professor of Humanities, New York
University from 1993 to 2005; and Professor thereof
from 1980 to 2005; President, Hudson Institute
since 1997 and Trustee thereof since 1980; Dean,
Gallatin Division of New York University from 1976
to 1993; Distinguished Fellow, Herman Kahn Chair,
Hudson Institute from 1984 to 1985; Director, Damon
Corp. from 1991 to 1995; Overseer, Center for Naval
Analyses from 1983 to 1993.
- ------------------------------------------------------------------------------------------------------------------------------------
Roberta P.O. Box 9095 Trustee 2000 to Shareholder, Modrall, Sperling, Roehl, Harris & 39 Funds None
Cooper Princeton, NJ present Sisk, P.A. since 1993; President, American Bar 59 Portfolios
Ramo 08543-9095 Association from 1995 to 1996 and Member of the
Age: 64 Board of Governors thereof from 1994 to 1997;
Shareholder, Poole, Kelly & Ramo, Attorneys at Law,
P.C. from 1977 to 1993; Director of ECMC Group
(service provider to students, schools and lenders)
since 2001; Director, United New Mexico Bank (now
Wells Fargo) from 1983 to 1988; Director, First
National Bank of New Mexico (now Wells Fargo) from
1975 to 1976; Vice President, American Law
Institute since 2004.
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 31
Officers and Trustees (continued)
Number of
Portfolios in Other Public
Position(s) Length of Fund Complex Directorships
Held with Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Trustee Trustee
====================================================================================================================================
Independent Trustees* (concluded)
- ------------------------------------------------------------------------------------------------------------------------------------
Robert S. P.O. Box 9095 Trustee 2002 to Principal of STI Management (investment adviser) 39 Funds None
Salomon, Princeton, NJ present from 1994 to 2005; Chairman and CEO of Salomon 59 Portfolios
Jr. 08543-9095 Brothers Asset Management Inc. from 1992 to 1995;
Age: 69 Chairman of Salomon Brothers Equity Mutual Funds
from 1992 to 1995; regular columnist with Forbes
Magazine from 1992 to 2002; Director of Stock
Research and U.S. Equity Strategist at Salomon
Brothers Inc. from 1975 to 1991; Trustee,
Commonfund from 1980 to 2001.
------------------------------------------------------------------------------------------------------------------------
* Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.
** Co-Chairman of the Board of Trustees and the Audit Committee.
Position(s) Length of
Held with Time
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers*
- ------------------------------------------------------------------------------------------------------------------------------------
Donald C. P.O. Box 9011 Vice 1993 to Director of BlackRock since 2006; Managing Director of MLIM and FAM in 2006; First
Burke Princeton, NJ President present Vice President of MLIM and FAM from 1997 to 2005 and Treasurer thereof from 1999 to
08543-9011 and and 2006; Vice President of MLIM and FAM from 1990 to 1997.
Age: 46 Treasurer 1999 to
present
- ------------------------------------------------------------------------------------------------------------------------------------
Kenneth A. P.O. Box 9011 Senior 2002 to Managing Director of BlackRock since 2006; Managing Director of MLIM from 2000 to
Jacob Princeton, NJ Vice present 2006; Director (Municipal Tax-Exempt Fund Management) of MLIM from 1997 to 2000.
08543-9011 President
Age: 55
- ------------------------------------------------------------------------------------------------------------------------------------
John M. P.O. Box 9011 Senior 2002 to Managing Director of BlackRock since 2006; Managing Director of MLIM from 2000 to
Loffredo Princeton, NJ Vice present 2006; Director (Municipal Tax-Exempt Fund Management) of MLIM from 1997 to 2000.
08543-9011 President
Age: 42
- ------------------------------------------------------------------------------------------------------------------------------------
Timothy T. P.O. Box 9011 Vice 2004 to Vice President of BlackRock since 2006; Vice President (Municipal Tax-Exempt Fund
Browse Princeton, NJ President present Management) of MLIM from 2004 to 2006: Vice President, portfolio manager and team
08543-9011 leader of the Municipal Investments Team with Lord Abbett & Co. from 2000 to 2003;
Age: 47 Vice President and portfolio manager in the municipal fund management group of
Eaton Vance Management, Inc. from 1992 to 2000.
- ------------------------------------------------------------------------------------------------------------------------------------
Jeffrey P.O. Box 9011 Fund Chief 2004 to Managing Director of BlackRock and Fund Chief Compliance Officer since 2006; Chief
Hiller Princeton, NJ Compliance present Compliance Officer of the MLIM/FAM-advised funds and First Vice President and Chief
08543-9011 Officer Compliance Officer of MLIM (Americas Region) from 2004 to 2006; Chief Compliance
Age: 55 Officer of the IQ Funds since 2004; Global Director of Compliance at Morgan Stanley
Investment Management from 2002 to 2004; Managing Director and Global Director of
Compliance at Citigroup Asset Management from 2000 to 2002; Chief Compliance
Officer at Soros Fund Management in 2000; Chief Compliance Officer at Prudential
Financial from 1995 to 2000; Senior Counsel in the Securities and Exchange
Commission's Division of Enforcement in Washington, D.C. from 1990 to 1995.
- ------------------------------------------------------------------------------------------------------------------------------------
32 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
Officers and Trustees (concluded)
Position(s) Length of
Held with Time
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers (concluded)*
- ------------------------------------------------------------------------------------------------------------------------------------
Alice A. P.O. Box 9011 Secretary 2004 to Director of BlackRock since 2006; Director (Legal Advisory) of MLIM from 2002 to
Pellegrino Princeton, NJ present 2006; Vice President of MLIM from 1999 to 2002; Attorney associated with MLIM from
08543-9011 1997 to 2006; Secretary of MLIM, FAM, FAMD and Princeton Services from 2004 to
Age: 46 2006.
------------------------------------------------------------------------------------------------------------------------
* Officers of the Fund serve at the pleasure of the Board of Trustees.
- ------------------------------------------------------------------------------------------------------------------------------------
Further information about the Fund's Officers and Trustees is available in the Fund's Statement of Additional
Information, which can be obtained without charge by calling 1-800-441-7762.
- ------------------------------------------------------------------------------------------------------------------------------------
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Pre Transaction
(Until September 29, 2006)
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
Post Transaction
(After September 29, 2006)
PFPC Inc.
Wilmington, DE 19809
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
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site. Shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial adviser. Please note that not all investment
advisers, banks or brokerages may offer this service.
Shareholders Who Hold Accounts Directly with BlackRock:
1) Access the BlackRock Web site at http://www.blackrock.com/edelivery
2) Log into your account
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 33
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund
investors and individual clients (collectively, "Clients") and to safeguarding
their nonpublic personal information. The following information is provided to
help you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with select
parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal nonpublic information from and about you
from different sources, including the following: (i) information we receive from
you or, if applicable, your financial intermediary, on applications, forms or
other documents; (ii) information about your transactions with us, our
affiliates, or others; (iii) information we receive from a consumer reporting
agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to nonaffiliated third parties any nonpublic
personal information about its Clients, except as permitted by law or as is
necessary to service Client accounts. These nonaffiliated third parties are
required to protect the confidentiality and security of this information and to
use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that may
be of interest to you. In addition, BlackRock restricts access to nonpublic
personal information about its Clients to those BlackRock employees with a
legitimate business need for the information. BlackRock maintains physical,
electronic and procedural safeguards that are designed to protect the nonpublic
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
34 BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006
A World-Class Mutual Fund Family
BlackRock now offers an expanded lineup of open-end mutual funds. Our range
includes more than 85 funds crossing all investment styles and managed by
experts in equity, fixed income and tax-exempt investing.
Equity Portfolios
BlackRock All-Cap Global Resources Portfolio
BlackRock Aurora Portfolio
BlackRock Asset Allocation Portfolio+
BlackRock Balanced Capital Fund+
BlackRock Basic Value Fund
BlackRock Developing Capital Markets Fund
BlackRock Equity Dividend Fund
BlackRock EuroFund
BlackRock Focus Twenty Fund
BlackRock Focus Value Fund
BlackRock Fundamental Growth Fund
BlackRock Global Allocation Fund+
BlackRock Global Dynamic Equity Fund
BlackRock Global Financial Services Fund
BlackRock Global Growth Fund
BlackRock Global Opportunities Portfolio
BlackRock Global Resources Portfolio*
BlackRock Global Science & Technology Opportunities Portfolio
BlackRock Global SmallCap Fund
BlackRock Global Technology Fund
BlackRock Global Value Fund
BlackRock Healthcare Fund
BlackRock Health Sciences Opportunities Portfolio
BlackRock Index Equity Portfolio*
BlackRock International Fund
BlackRock International Index Fund
BlackRock International Opportunities Portfolio*
BlackRock International Value Fund
BlackRock Investment Trust
BlackRock Large Cap Core Fund
BlackRock Large Cap Growth Fund
BlackRock Large Cap Value Fund
BlackRock Latin America Fund
BlackRock Legacy Portfolio
BlackRock Mid-Cap Growth Equity Portfolio
BlackRock Mid-Cap Value Equity Portfolio
BlackRock Mid Cap Value Opportunities Fund
BlackRock Natural Resources Trust
BlackRock Pacific Fund
BlackRock Small Cap Core Equity Portfolio
BlackRock Small Cap Growth Equity Portfolio
BlackRock Small Cap Growth Fund II
BlackRock Small Cap Index Fund
BlackRock Small Cap Value Equity Portfolio*
BlackRock Small/Mid-Cap Growth Portfolio
BlackRock S&P 500 Index Fund
BlackRock U.S. Opportunities Portfolio
BlackRock Utilities and Telecommunications Fund
BlackRock Value Opportunities Fund
Fixed Income Portfolios
BlackRock Bond Fund
BlackRock Enhanced Income Portfolio
BlackRock GNMA Portfolio
BlackRock Government Income Portfolio
BlackRock High Income Fund
BlackRock High Yield Bond Portfolio
BlackRock Inflation Protected Bond Portfolio
BlackRock Intermediate Bond Portfolio
BlackRock Intermediate Bond Portfolio II
BlackRock Intermediate Government Bond Portfolio
BlackRock International Bond Portfolio
BlackRock Low Duration Bond Portfolio
BlackRock Managed Income Portfolio
BlackRock Real Investment Fund
BlackRock Short-Term Bond Fund
BlackRock Total Return Portfolio
BlackRock Total Return Portfolio II
BlackRock World Income Fund
Municipal Bond Portfolios
BlackRock AMT-Free Municipal Bond Portfolio
BlackRock California Insured Municipal Bond Fund
BlackRock Delaware Municipal Bond Portfolio
BlackRock Florida Municipal Bond Fund
BlackRock High Yield Municipal Fund
BlackRock Intermediate Municipal Fund
BlackRock Kentucky Municipal Bond Portfolio
BlackRock Municipal Insured Fund
BlackRock National Municipal Fund
BlackRock New Jersey Municipal Bond Fund
BlackRock New York Municipal Bond Fund
BlackRock Ohio Municipal Bond Portfolio
BlackRock Pennsylvania Municipal Bond Fund
BlackRock Short-Term Municipal Fund
Money Market Portfolios
BlackRock Money Market Portfolio
BlackRock Municipal Money Market Portfolio@
BlackRock NC Municipal MM Portfolio@
BlackRock NJ Municipal MM Portfolio@
BlackRock OH Municipal MM Portfolio@
BlackRock PA Municipal MM Portfolio@
BlackRock Summit Cash Reserves Fund*
BlackRock U.S. Treasury MM Portfolio
BlackRock VA Municipal MM Portfolio@
* See the prospectus for information on specific limitations on investments
in the fund.
+ Mixed asset fund.
@ Tax-exempt fund.
BlackRock mutual funds are distributed by BlackRock Distributors, Inc. and
certain funds are also distributed by FAM Distributors, Inc. You should consider
the investment objectives, risks, charges and expenses of the funds under
consideration carefully before investing. Each fund's prospectus contains this
and other information and is available at www.blackrock.com or by calling
800-882-0052 or from your financial advisor. The prospectus should be read
carefully before investing.
BLACKROCK NEW YORK MUNICIPAL BOND FUND SEPTEMBER 30, 2006 35
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 1-800-441-7762; (2) at
www.blackrock.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.blackrock.com and (2) on the Securities
and Exchange Commission's Web site at http://www.sec.gov.
BlackRock New York Municipal Bond Fund of
BlackRock Multi-State Municipal Series Trust
Box 9011
Princeton, NJ 08543-9011
BLACKROCK
#10344-9/06
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of the
end of the period covered by this report, that applies to the
registrant's principal executive officer, principal financial officer
and principal accounting officer, or persons performing similar
functions. A copy of the code of ethics is available without charge at
www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of directors
has determined that (i) the registrant has the following audit
committee financial experts serving on its audit committee and (ii)
each audit committee financial expert is independent: (1) Joe Grills,
(2) Robert S. Salomon, Jr., and (3) Stephen B. Swensrud (retired as of
December 31, 2005).
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ending September 30, 2006 - $28,000
Fiscal Year Ending September 30, 2005 - $27,500
(b) Audit-Related Fees - Fiscal Year Ending September 30, 2006 - $0
Fiscal Year Ending September 30, 2005 - $0
(c) Tax Fees - Fiscal Year Ending September 30, 2006 - $6,000
Fiscal Year Ending September 30, 2005 - $7,000
The nature of the services include tax compliance, tax advice and tax
planning.
(d) All Other Fees - Fiscal Year Ending September 30, 2006 - $0
Fiscal Year Ending September 30, 2005 - $0
(e)(1) The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to the
registrant's affiliated service providers that relate directly to the
operations and the financial reporting of the registrant. Certain of
these non-audit services that the Committee believes are a) consistent
with the SEC's auditor independence rules and b) routine and recurring
services that will not impair the independence of the independent
accountants may be approved by the Committee without consideration on a
specific case-by-case basis ("general pre-approval"). However, such
services will only be deemed pre-approved provided that any individual
project does not exceed $5,000 attributable to the registrant or
$50,000 for all of the registrants the Committee oversees. Any proposed
services exceeding the pre-approved cost levels will require specific
pre-approval by the Committee, as will any other services not subject
to general pre-approval (e.g., unanticipated but permissible services).
The Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ending September 30, 2006 - $3,050,250
Fiscal Year Ending September 30, 2005 - $6,827,388
(h) The registrant's audit committee has considered and determined that
the provision of non-audit services that were rendered to the
registrant's investment adviser and any entity controlling, controlled
by, or under common control with the investment adviser that provides
ongoing services to the registrant that were not pre-approved pursuant
to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible
with maintaining the principal accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $1,739,500 , 0%
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 - The registrant's
Nominating Committee will consider nominees to the Board recommended
by shareholders when a vacancy becomes available. Shareholders who
wish to recommend a nominee should send nominations which include
biographical information and sets forth the qualifications of the
proposed nominee to the registrant's Secretary. There have been no
material changes to these procedures.
Item 11 - Controls and Procedures
11(a) - The Registrant's principal executive and principal financial officers
have evaluated the Registrant's disclosure controls and procedures,
including internal control over financial reporting, within 90 days of
this filing. Such principal officers have concluded that the
Registrant's disclosure controls and procedures were effective in design
and operation to reasonably ensure that information required to be
disclosed by the Registrant in this Form N-CSR was recorded, processed,
summarized, and reported within the required time periods, and were
sufficient to form the basis of the certifications required by Rule
30a-(2) of the Investment Company Act of 1940, as amended. Prior to
reaching that conclusion, such principal officers had become aware of
matters relating to the Registrant's participation in certain inverse
floater structures that necessitated adjustments to financial
information included in Item 1 of this filing. As a result, management
of the Registrant has reevaluated certain disclosure controls and
procedures determined not to be effective, as discussed more fully
below.
Management of the Registrant is responsible for establishing and
maintaining effective internal control over financial reporting. In
fulfilling this responsibility, estimates and judgments by management
are required to assess the expected benefits and related costs of
controls. The Registrant's internal control over financial reporting is
a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with U.S. generally
accepted accounting principles. Such internal control includes policies
and procedures that provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of a
registrant's assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
A control deficiency exists when the design or operation of a control
does not allow management or employees, in the normal course of
performing their assigned functions, to prevent or detect misstatements
on a timely basis. A significant deficiency is a control deficiency, or
combination of control deficiencies, that adversely affects the
Registrant's ability to initiate, authorize, record, process or report
financial data reliably in accordance with generally accepted accounting
principles such that there is more than a remote likelihood that a
misstatement of the Registrant's annual or interim financial statements
that is more than inconsequential will not be prevented or detected. A
material weakness is a significant deficiency, or combination of
significant deficiencies, that results in more than a remote likelihood
that a material misstatement of the annual or interim financial
statements will not be prevented or detected.
Prior to the filing of this Form N-CSR, the Registrant identified the
following control deficiency, that was determined to be a material
weakness, as defined above, in the Registrant's internal control over
financial reporting. The Registrant's controls related to the review and
analysis of relevant terms and conditions of transfers of certain assets
pertaining to inverse floater structures were not operating effectively
to appropriately determine whether the transfers of assets qualified for
sale accounting under the provisions of Statement of Financial
Accounting Standards No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" ("SFAS 140").
Accordingly, the Registrant's financial statements as of and for the
period ended October 31, 2006, including prior periods where applicable,
were adjusted prior to being issued to appropriately reflect transfers
of such securities as secured borrowings and to report the related
income and expense. These adjustments had no impact on net assets, net
asset value per share or total return.
Management of the Registrant believes that subsequent to the
adjustments, the Registrant's accounting treatment of such transfers is
appropriate under SFAS 140. Additionally, management of the Registrant
is taking such further actions as are necessary to enhance its internal
control over financial reporting, and in doing so, increase the
effectiveness of such controls, so that such transfers of assets are
reviewed and evaluated appropriately under the provisions of SFAS 140.
11(b) - There have been no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940, as amended) that occurred during the second half of
the Registrant's fiscal year that have materially affected, or are
reasonably likely to materially affect, the Registrant's internal
control over financial reporting. However, as discussed above,
subsequent to October 31, 2006, the Registrant is further enhancing
controls related to the application of SFAS 140.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock New York Municipal Bond Fund of BlackRock Multi-State Municipal Series
Trust
By: /s/ Robert C. Doll, Jr.
-------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock New York Municipal Bond Fund of BlackRock Multi-State Municipal
Series Trust
Date: January 23, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Robert C. Doll, Jr.
-------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock New York Municipal Bond Fund of BlackRock Multi-State Municipal
Series Trust
Date: January 23, 2007
By: /s/ Donald C. Burke
-------------------------------
Donald C. Burke,
Chief Financial Officer of
BlackRock New York Municipal Bond Fund of BlackRock Multi-State Municipal
Series Trust
Date: January 23, 2007