BLACKROCK MARYLAND MUNICIPAL BOND TRUST

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-21051

Name of Fund: BlackRock Maryland Municipal Bond Trust (BZM)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Maryland

            Municipal Bond Trust, 55 East 52nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 08/31/2014

Date of reporting period: 05/31/2014

Item 1 – Schedule of Investments

Schedule of Investments May 31, 2014 (Unaudited)

   

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)		     Value  

Maryland — 129.1%

  

Corporate — 2.7%

  

Maryland EDC, Refunding RB:

     

CNX Marine Terminals, Inc., 5.75%, 9/01/25

    $ 500      $ 540,765   

Potomac Electric Power Co., 6.20%, 9/01/22

      250        296,145   
    

 

 

  
               836,910   

County/City/Special District/School District — 24.5%

  

City of Annapolis Maryland, Tax Allocation, Park Place Project, Series A, 5.35%, 1/01/15 (a)

      466        484,621   

City of Baltimore Maryland, RB, Special Tax, Harborview Lot No. 2, 6.50%, 7/01/31

      923        925,234   

County of Anne Arundel Maryland Consolidated Special Taxing District, Refunding, Special Tax, The Villages of Dorchester and Farmington Project, 5.00%, 7/01/32

      500        552,600   

County of Frederick Maryland, RB, Jefferson Technology Park Project, Series B, 7.13%, 7/01/43

      250        273,345   

County of Montgomery Maryland, GO, Refunding, Consolidated Public Improvement, Series A, 5.00%, 7/01/26

      400        465,816   

County of Prince George’s Maryland, SO, Remarketing, National Harbor Project, 5.20%, 7/01/34

      1,500        1,510,650   

State of Maryland, GO, Refunding, State & Local Facilities Loan, 3rd Series C, 5.00%, 11/01/20

      500        605,615   

State of Maryland, GO, State & Local Facilities Loan:

     

1st Series B, 5.00%, 3/15/22

      250        293,023   

2nd Series B, 3.00%, 8/01/27

      2,425        2,467,534   
    

 

 

  
               7,578,438   

Education — 31.2%

     

County of Anne Arundel Maryland, Refunding RB, Maryland Economic Development, Anne Arundel Community College Project:

     

4.00%, 9/01/27

      510        543,175   
Municipal Bonds   

Par  

(000)

     Value  

Maryland (continued)

                 

Education (concluded)

  

County of Anne Arundel Maryland, Refunding RB, Maryland Economic Development, Anne Arundel Community College Project (concluded):

     

3.25%, 9/01/28

    $ 360      $ 356,321   

Maryland EDC, Refunding RB, University Village at Sheppard Pratt, 5.00%, 7/01/33

      1,000        1,049,440   

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

     

Goucher College, Series A, 5.00%, 7/01/34

      1,000        1,086,460   

Johns Hopkins University Project, Series A, 5.00%, 7/01/27

      1,000        1,169,630   

Johns Hopkins University Project, Series A, 4.00%, 7/01/37

      500        515,330   

Loyola University Maryland, Series A, 5.00%, 10/01/39

      900        971,163   

Maryland Institute College of Art, 5.00%, 6/01/29

      500        543,945   

Notre Dame Maryland University, 5.00%, 10/01/42

      500        523,205   

Maryland Industrial Development Financing Authority, RB, Our Lady of Good Counsel School, Series A, 6.00%, 5/01/15 (a)

      1,000        1,051,280   

University System of Maryland, RB, Auxiliary Facility and Tuition, Series A, 5.00%, 4/01/24

      1,000        1,243,910   

University System of Maryland, Refunding RB, Series D, 5.00%, 10/01/21

      500        608,145   
    

 

 

  
               9,662,004   

Health — 29.7%

     

City of Gaithersburg Maryland, Refunding RB, Asbury Maryland Obligation, Series B, 6.00%, 1/01/23

      250        281,320   

County of Howard Maryland, Refunding RB, Vantage House Facility, Series A, 5.25%, 4/01/33

      550        511,104   

County of Howard Maryland, Tax Allocation Bonds, Annapolis Junction Town Center Project, 6.10%, 2/15/44

      250        264,420   

 

                
   BLACKROCK MARYLAND MUNICIPAL BOND TRUST    MAY 31, 2014    1

Schedule of Investments (continued)

   

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)		     Value  

Maryland (continued)

                 

Health (concluded)

     

County of Montgomery Maryland, Refunding RB, Trinity Health Credit Group, 5.00%, 12/01/40

    $ 1,000      $ 1,083,810   

Maryland Health & Higher Educational Facilities Authority, RB, Ascension Health Alliance, Series B, 5.00%, 11/15/51

      1,000        1,083,360   

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

     

Anne Arundel Health System, 5.00%, 7/01/27

      500        560,260   

Anne Arundel Health System, 5.00%, 7/01/40

      1,000        1,052,630   

Charlestown Community Project, 6.25%, 1/01/41

      1,000        1,101,740   

Frederick Memorial Hospital, Series A, 4.00%, 7/01/38

      1,250        1,170,863   

University of Maryland Medical System, 5.13%, 7/01/39

      1,000        1,051,750   

University of Maryland Medical System, Series A, 5.00%, 7/01/43

      1,000        1,059,960   
    

 

 

  
               9,221,217   

Housing — 15.0%

     

Maryland Community Development Administration, HRB, Series A:

     

4.05%, 7/01/42

      1,220        1,227,100   

Series H, AMT, 5.10%, 9/01/37

      1,000        1,017,630   

Maryland Community Development Administration, RB, Residential:

     

5.05%, 9/01/39

      500        521,110   

4.75%, 9/01/39

      150        154,587   

Maryland Community Development Administration, Refunding RB, Residential, 5.25%, 9/01/35

      1,645        1,740,098   
    

 

 

  
               4,660,525   

Transportation — 15.1%

     

Maryland EDC, RB:

     

Term Project, Series B, 5.75%, 6/01/35

      500        531,210   

Transportation Facilities Project, Series A, 5.75%, 6/01/35

      500        531,210   

Maryland State Department of Transportation, RB, Consolidated, 4.00%, 5/15/22

      1,000        1,114,250   
Municipal Bonds    Par  
(000)		     Value  

Maryland (concluded)

                 

Transportation (concluded)

     

Maryland State Transportation Authority, RB, Baltimore/Washington International Thurgood Marshall Airport Project, Series A, AMT, 4.00%, 6/01/29

    $ 1,925      $ 1,995,205   

Maryland State Transportation Authority, Refunding RB, Baltimore/Washington International Thurgood Marshall Airport Project, Series B, AMT, 5.00%, 3/01/23

      445        515,096   
    

 

 

  
               4,686,971   

Utilities — 10.9%

     

City of Baltimore Maryland, RB:

     

Wastewater Project, Series C, 5.00%, 7/01/38

      1,000        1,126,440   

Water Project, Series A, 5.00%, 7/01/43

      1,000        1,118,640   

County of Montgomery Maryland, RB, Water Quality Protection Charge, Series A:

     

5.00%, 4/01/31

      500        573,420   

5.00%, 4/01/32

      500        570,880   
    

 

 

  
               3,389,380   
Total Municipal Bonds in Maryland        40,035,445   
    

District of Columbia — 3.5%

                 

Transportation — 3.5%

     

Washington Metropolitan Area Transit Authority, Refunding RB, Series A, 5.13%, 7/01/32

      1,000        1,091,140   

Guam — 2.3%

  

State — 2.3%

     

Territory of Guam, RB, Series A:

     

Business Privilege Tax Bonds, 5.13%, 1/01/42

      250        260,917   

Limited Obligation Bonds, Section 30, 5.63%, 12/01/29

      410        449,184   
Total Municipal Bonds in Guam        710,101   

 

                
2    BLACKROCK MARYLAND MUNICIPAL BOND TRUST    MAY 31, 2014   

Schedule of Investments (continued)

   

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

 

Municipal Bonds  

Par  

(000)

     Value  

Multi-State — 6.6%

  

Housing — 6.6%

    

Centerline Equity Issuer Trust, Series B-2, 7.20%, 11/15/14 (b)(c)

   $ 2,000      $ 2,049,720   

Total Municipal Bonds — 141.5%

  

     43,886,406   
   
   
Municipal Bonds Transferred to
Tender Option Bond (TOB) Trusts (d)		  

Maryland — 10.7%

  

Transportation — 10.7%

  

State of Maryland Transportation Authority, RB, Transportation Facilities Project (AGM), 5.00%, 7/01/41

     3,000        3,328,860   

Total Long-Term Investments

(Cost — $45,586,734) — 152.2%

  

  

     47,215,266   
Short-Term Securities    Shares     Value  

FFI Institutional Tax-Exempt Fund, 0.03% (e)(f)

      592,795      $ 592,795   

Total Short-Term Securities

(Cost — $592,795) — 1.9%

  

  

     592,795   
Total Investments (Cost — $46,179,529*) — 154.1%        47,808,061   
Other Assets Less Liabilities — 2.3%        709,172   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (4.8%)

   

     (1,500,707 ) 
VRDP Shares, at Liquidation Value — (51.6%)        (16,000,000 ) 
    

 

 

  
Net Assets Applicable to Common Shares — 100.0%      $ 31,016,526   
    

 

 

  

 

*   As of May 31, 2014, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost

   $ 44,600,045   
 

 

 

  

Gross unrealized appreciation

   $ 1,877,269   

Gross unrealized depreciation

     (169,253 ) 
 

 

 

  

Net unrealized appreciation

   $ 1,708,016   
 

 

 

  

 

Notes to Schedule of investments

 

 

(a)   U.S. government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

(b)   Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

(c)   Represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity.

 

(d)   Represent bonds transferred to a TOB. In exchange for which the Trust acquired residual interest certificates. These bonds serve as collateral in a financing transaction.

 

(e)   Investments in issuers considered to be an affiliate of the Trust during the period ended May 31, 2014, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate      Shares Held
at August 31,
2013		        Net
Activity		        Shares Held
at May 31,
2014		        Income  

FFI Institutional Tax-Exempt Fund

        421,659           171,136           592,795         $ 271   

 

(f)   Represents the current yield as of report date.

 

Portfolio Abbreviations

 

AGM      Assured Guaranty Municipal Corp.
AMT      Alternative Minimum Tax (subject to)
EDC      Economic Development Corp.
GO      General Obligation Bonds
HRB      Housing Revenue Bonds
RB      Revenue Bonds
SO      Special Obligation Bonds

 

                
   BLACKROCK MARYLAND MUNICIPAL BOND TRUST    MAY 31, 2014    3

Schedule of Investments (continued)

    BlackRock Maryland Municipal Bond Trust (BZM)

 

Ÿ  

Financial futures contracts outstanding as of May 31, 2014 were as follows:

 

Contracts
Sold		     Issue   Exchange   Expiration  

Notional

Value

     Unrealized
Appreciation		  
  (30 )    10-Year U.S. Treasury Note   Chicago Board of Trade   September 2014   $ 3,765,469      $ 1,876   

 

Ÿ  

For Trust compliance purposes, the Trust’s sector classifications refer to any one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment advisor. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes as follows:

 

  Ÿ  

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Trust has the ability to access

 

  Ÿ  

Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

  Ÿ  

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, please refer to the Trust’s most recent financial statements as contained in its semi-annual report.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of May 31, 2014:

 

     Level 1        Level 2        Level 3        Total  

Assets:

                 
Investments:                 

Long-Term Investments 1

     —         $ 47,215,266           —         $ 47,215,266   

Short-Term Securities

   $ 592,795           —           —           592,795   
 

 

 

       

 

 

       

 

 

       

 

 

  

Total

   $ 592,795         $ 47,215,266           —         $ 47,808,061   
 

 

 

       

 

 

       

 

 

       

 

 

  

 

1   

See above Schedule of Investments for values in each sector.

 

                
4    BLACKROCK MARYLAND MUNICIPAL BOND TRUST    MAY 31, 2014   

Schedule of Investments (concluded)

    BlackRock Maryland Municipal Bond Trust (BZM)

 

     Level 1        Level 2        Level 3        Total  
Derivative Financial Instruments 2             

Assets:

                 

Interest rate contracts

   $ 1,876           —           —         $ 1,876   

 

2   Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

      

The Fund may hold liabilities in which the fair value approximates the carrying amount for financial reporting purposes. As of May 31, 2014, such liabilites are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3        Total  

Liabilities:

                 

TOB trust certificates

     —         $ (1,500,000 )         —         $ (1,500,000 ) 

VRDP Shares

     —           (16,000,000 )         —           (16,000,000 ) 
 

 

 

       

 

 

       

 

 

       

 

 

  

Total

     —         $ (17,500,000 )         —         $ (17,500,000 ) 
 

 

 

       

 

 

       

 

 

       

 

 

  

There were no transfers between levels during the period ended May 31, 2014.

 

                
   BLACKROCK MARYLAND MUNICIPAL BOND TRUST    MAY 31, 2014    5

Item 2 –    Controls and Procedures
2(a) –    The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
2(b) –    There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 3 –    Exhibits
   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 Maryland Municipal Bond Trust

 

By:   

/s/ John M. Perlowski

   
   John M. Perlowski   
   Chief Executive Officer (principal executive officer) of
   BlackRock Maryland Municipal Bond Trust
Date: July 23, 2014   

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/ John M. Perlowski

   
   John M. Perlowski   
   Chief Executive Officer (principal executive officer) of
   BlackRock Maryland Municipal Bond Trust
Date: July 23, 2014   
By:   

/s/ Neal J. Andrews

   
   Neal J. Andrews   
   Chief Financial Officer (principal financial officer) of
   BlackRock Maryland Municipal Bond Trust
Date: July 23, 2014