BLACKROCK MUNIASSETS FUND, INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-07642

Name of Fund: BlackRock MuniAssets Fund, Inc. (MUA)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniAssets Fund, Inc., 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: 04/30/2015

Date of reporting period: 10/31/2014


Item 1 – Report to Stockholders

 


OCTOBER 31, 2014

 

 

SEMI-ANNUAL REPORT (UNAUDITED)

 

    LOGO

 

BlackRock MuniAssets Fund, Inc. (MUA)

BlackRock MuniEnhanced Fund, Inc. (MEN)

BlackRock MuniHoldings Fund, Inc. (MHD)

BlackRock MuniHoldings Fund II, Inc. (MUH)

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

BlackRock MuniVest Fund II, Inc. (MVT)

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents     

 

     Page  

Shareholder Letter

    3   

Semi-Annual Report:

 

Municipal Market Overview

    4   

The Benefits and Risks of Leveraging

    5   

Derivative Financial Instruments

    5   

Fund Summaries

    6   
Financial Statements:  

Schedules of Investments

    20   

Statements of Assets and Liabilities

    65   

Statements of Operations

    67   

Statements of Changes in Net Assets

    69   

Statements of Cash Flows

    73   

Financial Highlights

    75   

Notes to Financial Statements

    82   

Disclosure of Investment Advisory Agreements

    92   

Officers and Directors

    96   

Additional Information

    97   

 

                
2    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Shareholder Letter

 

Dear Shareholder,

The final months of 2013 were generally positive for most risk assets such as equities and high yield bonds even as investors were grappling with uncertainty as to when and by how much the U.S. Federal Reserve would begin to gradually reduce (or “taper”) its asset purchase programs. Higher quality bonds and emerging market investments, however, struggled as Fed tapering became increasingly imminent. When the central bank ultimately announced its tapering plans in mid-December, equity investors reacted positively, as this action signaled the Fed’s perception of real improvement in the economy.

Most asset classes moved higher in the first half of 2014 despite the pull back in Fed stimulus. The year got off to a rocky start, however, as a number of developing economies showed signs of stress and U.S. economic data weakened. Equities declined in January while bond markets found renewed strength from investors seeking relatively safer assets. Although these headwinds persisted, equities were back on the rise in February as investors were assuaged by increasing evidence that the soft patch in U.S. data was temporary and weather-related, and forecasts pointed to growth picking up later in the year.

In the months that followed, interest rates trended lower and bond prices climbed higher in the modest growth environment. Financial markets exhibited a remarkably low level of volatility despite rising tensions in Russia and Ukraine and signs of decelerating growth in China. Equity markets were resilient as investors focused on signs of improvement in the U.S. recovery, stronger corporate earnings, increased merger-and-acquisition activity and, perhaps most importantly, reassurance from the Fed that no changes to short-term interest rates were on the horizon.

In the ongoing low-yield environment, income-seeking investors moved into equities, pushing major indices to record levels. However, as stock prices continued to rise, investors became wary of high valuations and began shedding the stocks that had experienced significant price appreciation in 2013, particularly growth and momentum names. The broad rotation into cheaper valuations resulted in the strongest performers of 2013 struggling most in 2014, and vice versa. Especially hard hit were U.S. small cap and European stocks, where earnings growth had not kept pace with market gains. In contrast, emerging markets benefited from the trend after having suffered heavy selling pressure in early 2014.

Volatility ticked up in the middle of the summer. Markets came under pressure in July as geopolitical turmoil intensified in Gaza, Iraq and Ukraine and financial troubles boiled over in Argentina and Portugal. Investors regained some confidence in August, allowing markets to rebound briefly amid renewed comfort that the Fed would continue to keep rates low and hopes that the European Central Bank would increase stimulus. However, markets swiftly reversed in September as improving U.S. economic indicators raised concerns that the Fed would increase short-term interest rates sooner than previously anticipated. Global credit markets tightened as the U.S. dollar strengthened, ultimately putting a strain on investor flows. High valuations combined with impending rate hikes stoked increasing volatility in financial markets. Escalating geopolitical risks further fueled the fire. The U.S. renewed its involvement in Iraq and the European Union imposed additional sanctions against Russia, while Scottish voters contemplated separating from the United Kingdom.

U.S. risk assets made a comeback in October while other developed markets continued their descent. This divergence in market performance moved in tandem with economic momentum and central bank policy. As the U.S. economy continued to strengthen, the need for monetary policy accommodation diminished. Meanwhile, economies in other parts of the developed world decelerated and central banks in Europe and Japan implemented aggressive measures to stimulate growth.

U.S. large cap stocks were the strongest performers for the six- and 12-month periods ended October 31, 2014. U.S. small caps experienced significantly higher volatility than large caps, but nonetheless generated positive returns. International developed market equities broadly declined while emerging markets posted modest gains. Most fixed income assets produced positive results as rates generally fell. Tax-exempt municipal bonds benefited from a favorable supply-and-demand environment. Short-term interest rates remained near zero, keeping yields on money market securities close to historic lows.

At BlackRock, we believe investors need to think globally, extend their scope across a broad array of asset classes and be prepared to move freely as market conditions change over time. We encourage you to talk with your financial advisor and visit blackrock.com for further insight about investing in today’s markets.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

U.S. financial markets generally outperformed other parts of the world given stronger economic growth and corporate earnings, the continuation of low interest rates and the appeal of relative stability amid rising geopolitical uncertainty.

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of October 31, 2014  
    6-month     12-month  

U.S. large cap equities (S&P 500® Index)

    8.22     17.27

U.S. small cap equities
(Russell 2000® Index)

    4.83        8.06   

International equities
(MSCI Europe, Australasia,
Far East Index)

    (4.83     (0.60

Emerging market equities (MSCI Emerging
Markets Index)

    3.74        0.64   

3-month Treasury bills
(BofA Merrill Lynch 3-Month U.S. Treasury Bill Index)

    0.02        0.05   

U.S. Treasury securities
(BofA Merrill Lynch 10-Year U.S. Treasury Index)

    4.29        5.21   

U.S. investment-grade
bonds (Barclays
U.S. Aggregate Bond Index)

    2.35        4.14   

Tax-exempt municipal
bonds (S&P Municipal
Bond Index)

    3.54        7.94   

U.S. high yield bonds

(Barclays U.S.
Corporate High Yield 2%
Issuer Capped Index)

    1.05        5.82   
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.    

 

                
   THIS PAGE NOT PART OF YOUR FUND REPORT       3


Municipal Market Overview     

 

For the Reporting Period Ended October 31, 2014      

Municipal Market Conditions

The latter months of 2013 were challenging for municipal bond performance. Heightened uncertainty as to when the U.S. Federal Reserve (the “Fed”) would begin to reduce its bond-buying stimulus program (and by how much) caused interest rates to be volatile and generally move higher. (Bond prices fall as rates rise.) Municipal bond mutual funds saw strong outflows through year end when the Fed finally announced its plan to begin the gradual reduction of stimulus in January 2014. Relieved of anxiety around policy changes, investors again sought the relative safety of municipal bonds in the new year. Surprisingly, interest rates trended lower in the first half of 2014 even as the Fed pulled back on its open-market bond purchases. Softer U.S. economic data amid one of the harshest winters on record, coupled with reassurance from the Fed that short-term rates would remain low for a considerable amount of time, resulted in stronger demand for fixed income investments, with municipal bonds being one of the stronger performing sectors. Despite starting the period with negative flows, municipal bond funds finished the 12-month period ended October 31, 2014 with net inflows of approximately $6.5 (based on data from the Investment Company Institute).

High levels of interest rate volatility in the latter half of 2013, particularly on the long end of the curve, resulted in a curtailment of tax-exempt issuance during the period. However, from a historical perspective, total new issuance for the 12 months ended October 31 remained relatively strong at $317 billion (albeit meaningfully lower than the $342 billion issued in the prior 12-month period). A noteworthy portion of new supply during this period was attributable to refinancing activity (roughly 45%) as issuers took advantage of lower interest rates to reduce their borrowing costs.

S&P Municipal Bond Index

Total Returns as of October 31, 2014

  6 months:   3.54%

12 months:   7.94%

A Closer Look at Yields

 

LOGO

From October 31, 2013 to October 31, 2014, muni yields on AAA-rated 30-year municipal bonds decreased by 103 basis points (“bps”) from 4.04% to 3.01%, while 10-year rates decreased 37 bps from 2.44% to 2.07% and 5-year rates increased 6 bps from 1.06% to 1.12% (as measured by Thomson Municipal Market Data). Overall, the municipal yield curve remained relatively steep over the 12-month period even as the spread between 2- and 30-year maturities flattened by 105 bps and the spread between 2- and 10-year maturities flattened by 39 bps.

During the same time period, U.S. Treasury rates fell by 57 bps on 30-year and 22 bps on 10-year bonds, while moving up 28 bp in 5-years. Accordingly, tax-exempt municipal bonds outperformed Treasuries across the yield curve as investors sought to reduce interest rate risk later in the period. On the short and intermediate parts of the curve, the outperformance of municipal bonds versus Treasuries was driven largely by a supply/demand imbalance within the municipal market and a rotation from long-duration assets into short- and intermediate-duration investments given their lower sensitivity to interest rate movements. More broadly, municipal bonds benefited from the increased appeal of tax-exempt investing in the new higher tax rate environment. The asset class is known for its lower relative volatility and preservation of principal with an emphasis on income as tax rates rise. The municipal market continues to be an attractive avenue for investors seeking yield in the low-rate environment. However, opportunities have not been as broad-based as in 2011 and 2012, warranting a more tactical approach going forward.

Financial Conditions of Municipal Issuers Continue to Improve

Following an extended period of nation-wide austerity and de-leveraging as states sought to balance their budgets, solid revenue growth exceeding pre-recession levels coupled with the elimination of more than 625,000 jobs in recent years have put state and local governments in a better financial position. Many local municipalities, however, continue to face increased health care and pension costs passed down from the state level. BlackRock maintains the view that municipal bond defaults will be minimal and remain in the periphery, and that the overall market is fundamentally sound. We continue to recognize that careful credit research, appropriate structure and security selection remain imperative amid uncertainty in a modestly improving economic environment.

Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

 

                
4    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


The Benefits and Risks of Leveraging     

 

The Funds may utilize leverage to seek to enhance the yield and net asset value (“NAV”) of their common shares (“Common Shares”). However, these objectives cannot be achieved in all interest rate environments.

In general, the concept of leveraging is based on the premise that the financing cost of leverage, which will be based on short-term interest rates, will normally be lower than the income earned by a Fund on its longer-term portfolio investments purchased with the proceeds from leverage. To the extent that the total assets of the Fund (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, the Fund’s shareholders will benefit from the incremental net income. The interest earned on securities purchased with the proceeds from leverage is paid to shareholders in the form of dividends, and the value of these portfolio holdings is reflected in the per share NAV.

To illustrate these concepts, assume a Fund’s Common Shares capitalization is $100 million and it utilizes leverage for an additional $30 million, creating a total value of $130 million available for investment in longer-term income securities. If prevailing short-term interest rates are 3% and longer-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the Fund’s financing costs on the $30 million of proceeds obtained from leverage are based on the lower short-term interest rates. At the same time, the securities purchased by the Fund with the proceeds from leverage earn income based on longer-term interest rates. In this case, the Fund’s financing cost of leverage is significantly lower than the income earned on the Fund’s longer-term investments acquired from such leverage proceeds, and therefore the holders of Common Shares (“Common Shareholders”) are the beneficiaries of the incremental net income.

However, in order to benefit Common Shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other costs of leverage exceed the Fund’s return on assets purchased with leverage proceeds, income to shareholders will be lower than if the Fund had not used leverage. Furthermore, the value of the Fund’s portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the value of the Fund’s obligations under its leverage arrangement generally does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Fund’s NAVs positively or negatively. Changes in the future direction of interest rates are very difficult to predict accurately, and there is no assurance that a Fund’s intended leveraging strategy will be successful.

Leverage also will generally cause greater changes in the Funds’ NAVs, market prices and dividend rates than comparable portfolios without leverage. In a declining market, leverage is likely to cause a greater decline in the net asset value and market price of a Fund’s Common Shares than if the Fund were not leveraged. In addition, the Fund may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause the Fund to incur losses. The use of leverage may limit the Fund’s ability to invest in certain types of securities or use certain types of hedging strategies. The Fund will incur expenses in connection with the use of leverage, all of which are borne by Common Shareholders and may reduce income to the Common Shares.

To obtain leverage, each Fund has issued Variable Rate Demand Preferred Shares (“VRDP Shares”) or Variable Rate Muni Term Preferred Shares (“VMTP Shares”) (collectively, “Preferred Shares”) and/or leveraged its assets through the use of tender option bond trusts (“TOBs”) as described in the Notes to Financial Statements.

Under the Investment Company Act of 1940 (the “1940 Act”), each Fund is permitted to issue debt up to 33 1/3% of its total managed assets or equity securities (e.g., Preferred Shares) up to 50% of its total managed assets. A Fund may voluntarily elect to limit its leverage to less than the maximum amount permitted under the 1940 Act. In addition, a Fund may also be subject to certain asset coverage, leverage or portfolio composition requirements imposed by the Preferred Shares’ governing instruments or by agencies rating the Preferred Shares, which may be more stringent than those imposed by the 1940 Act.

If a Fund segregates or designates on its books and records cash or liquid assets having a value not less than the value of the Fund’s obligations under the TOB (including accrued interest), a TOB will not be considered a senior security and will not be subject to the foregoing limitations and requirements under the 1940 Act.

 

Derivative Financial Instruments     

 

The Funds may invest in various derivative financial instruments, including financial futures contracts, as specified in Note 4 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such derivative financial instruments are used to obtain exposure to a security, index and/or market without owning or taking physical custody of securities or to hedge market and/or interest rate risks. Derivative financial instruments involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative financial instrument. The Funds’ ability to use a derivative financial instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial instruments may result in losses greater than if they had not been used, may require a Fund to sell or purchase portfolio investments at inopportune times or for distressed values, may limit the amount of appreciation a Fund can realize on an investment, may result in lower dividends paid to shareholders and/or may cause a Fund to hold an investment that it might otherwise sell. The Funds’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    5


Fund Summary as of October 31, 2014    BlackRock MuniAssets Fund, Inc.

 

Fund Overview      

BlackRock MuniAssets Fund, Inc.’s (MUA) (the “Fund”) investment objective is to provide high current income exempt from federal income taxes by investing primarily in a portfolio of medium- to lower-grade or unrated municipal obligations, the interest on which, in the opinion of bond counsel to the issuer, is exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests at least 65% of its assets in municipal bonds that are rated in the medium to lower categories by nationally recognized rating services (for example, Baa or lower by Moody’s Investors Service, Inc. (“Moody’s”) or BBB or lower by Standard & Poor’s Corporation (“S&P”)) or non-rated securities which are of comparable quality. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance      
Ÿ  

For the six-month period ended October 31, 2014, the Fund returned 6.89% based on market price and 6.60% based on NAV. For the same period, the closed-end Lipper High Yield Municipal Debt Funds category posted an average return of 4.96% based on market price and 6.71% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

The Fund benefited from income generated in the form of coupon payments from its portfolio of municipal bond holdings. The Fund also benefited from holding unrated, non-investment grade and low-rated investment grade bonds, which exhibited superior performance compared to higher quality investment grade bonds during the period. Concentrations in the health care, transportation, utilities, project finance and education sectors also were among the leading contributors to performance. The Fund’s positioning with respect to duration (sensitivity to interest rate movements) also helped performance. The Fund’s positioning along the yield curve, which favored longer-dated bonds, was an additional contributor as longer-dated bonds generally outperformed those with shorter maturities. The Fund’s use of leverage provided both incremental return and income in an environment of declining interest rates. (Bond prices rise as yields fall).

 

Ÿ  

The Fund maintained a short position in U.S. Treasury futures contracts in order to manage interest rate risk. With interest rates falling during the period, as prices rose, this position had a small negative impact on performance. The Fund’s holding in New Jersey Economic Development Authority, which financed an energy facility for a casino in Atlantic City, New Jersey, experienced a substantial decline in value in the wake of the casino operator’s bankruptcy filing last June. In addition, the Fund’s investment in Central Falls Rhode Island Detention Facility Corporation suffered a material decline after the issuer filed for receivership and defaulted on its principal and interest payments.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

Fund Information      

Symbol on New York Stock Exchange (“NYSE”)

   MUA

Initial Offering Date

   June 25, 1993

Yield on Closing Market Price as of October 31, 2014 ($13.35)1

   5.62%

Tax Equivalent Yield2

   9.93%

Current Monthly Distribution per Common Share3

   $0.0625

Current Annualized Distribution per Common Share3

   $0.7500

Economic Leverage as of October 31, 20144

   12%

 

  1   

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

  2   

Tax equivalent yield assumes the maximum marginal federal tax rate of 43.4%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 

  3   

The distribution rate is not constant and is subject to change.

 

  4   

Represents TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

                
6    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


     BlackRock MuniAssets Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                              

 

      10/31/14      4/30/14      Change      High      Low  

Market Price

   $ 13.35       $ 12.85         3.89    $ 13.46       $ 12.61   

Net Asset Value

   $ 14.05       $ 13.56         3.61    $ 14.10       $ 13.56   

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    10/31/14     4/30/14  

Health

     24     23

Transportation

     20        20   

County/City/Special District/School District

     14        16   

Utilities

     13        14   

Corporate

     10        12   

Education

     10        6   

Tobacco

     7        5   

State

     2        4   
Credit Quality Allocation1    10/31/14     4/30/14  

AA/Aa

     16     21

A

     12        9   

BBB/Baa

     24        27   

BB/Ba

     10        7   

B

     6        9   

Not Rated2

     32        27   

 

  1   

The investment advisor evaluates the credit quality of unrated investments based highest rating assigned by either S&P or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 

  2   

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of October 31, 2014 and April 30 2014, the market value of these securities was $36,173,199, representing 6% and $31,231,049, representing 4%, respectively, of the Fund’s long-term investments.

 
Call/Maturity Schedule3  

Calendar Year Ended December 31,

  

2014

     8

2015

     4   

2016

     2   

2017

     7   

2018

     10   

 

  3   

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    7


Fund Summary as of October 31, 2014    BlackRock MuniEnhanced Fund, Inc.

 

Fund Overview      

BlackRock MuniEnhanced Fund, Inc.’s (MEN) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Fund invests primarily in long-term municipal bonds rated investment grade quality at the time of investment and invests primarily in long-term municipal bonds with maturities of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance      
Ÿ  

For the six-month period ended October 31, 2014, the Fund returned 3.37% based on market price and 6.99% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 5.65% based on market price and 7.38% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

The Fund benefited from income generated in the form of coupon payments from its portfolio of municipal bond holdings. In addition, the Fund’s use of leverage provided both incremental return and income in an environment of declining interest rates. (Bond prices rise as yields fall). The Fund’s duration exposure (sensitivity to interest rate movements) contributed positively to performance as municipal interest rates declined during the period. The Fund’s exposure to long-maturity bonds also benefited performance given that the yield curve flattened, with yields falling more significantly for longer-term bonds (those with maturities of 20 years and longer) than for intermediate- and short-term issues. Performance was also helped by the Fund’s exposure to the utilities and transportation sectors.

 

Ÿ  

In the strong market environment, there were no material detractors from the Fund’s performance during the period.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

Fund Information      

Symbol on NYSE

   MEN

Initial Offering Date

   March 2, 1989

Yield on Closing Market Price as of October 31, 2014 ($11.28)1

   6.44%

Tax Equivalent Yield2

   11.38%

Current Monthly Distribution per Common Share3

   $0.0605

Current Annualized Distribution per Common Share3

   $0.7260

Economic Leverage as of October 31, 20144

   37%

 

  1   

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

  2   

Tax equivalent yield assumes the maximum marginal federal tax rate of 43.4%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 

  3   

The distribution rate is not constant and is subject to change.

 

  4   

Represents VRDP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VRDP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

                
8    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


     BlackRock MuniEnhanced Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                              

 

      10/31/14      4/30/14      Change      High      Low  

Market Price

   $ 11.28       $ 11.27         0.09    $ 11.52       $ 10.86   

Net Asset Value

   $ 12.37       $ 11.94         3.60    $ 12.57       $ 11.94   

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    10/31/14     4/30/14  

County/City/Special District/School District

     26     24

Transportation

     20        19   

State

     17        22   

Utilities

     16        15   

Education

     9        8   

Health

     8        8   

Corporate

     2        2   

Housing

     2        2   
Credit Quality Allocation1    10/31/14     4/30/14  

AAA/Aaa

     11     13

AA/Aa

     58        58   

A

     24        25   

BBB/Baa

     5        4   

N/R2

     2          

 

  1   

The investment advisor evaluates the credit quality of unrated investments based highest rating assigned by either S&P or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 

  2   

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed none of these unrated securities as investment grade quality.

   
Call/Maturity Schedule3        

Calendar Year Ended December 31,

  

2014

     3

2015

     6   

2016

     4   

2017

     11   

2018

     11   

 

  3   

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    9


Fund Summary as of October 31, 2014    BlackRock MuniHoldings Fund, Inc.

 

Fund Overview

BlackRock MuniHoldings Fund, Inc.’s (MHD) (the “Fund”) investment objective is to provide shareholders with current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds rated investment grade and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance
Ÿ  

For the six-month period ended October 31, 2014, the Fund returned 5.65% based on market price and 8.36% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 5.65% based on market price and 7.38% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

The Fund benefited from income generated in the form of coupon payments from its portfolio of municipal bond holdings. Leverage, which represents a significant element of the Fund’s investment strategy, provided both incremental return and income in an environment of declining interest rates. (Bond prices rise as yields fall). The Fund’s positioning with respect to duration (sensitivity to interest rate movements) helped performance. The Fund’s positioning along the yield curve, which favored longer-dated bonds, also aided performance as longer-dated bonds generally outperformed those with shorter maturities. Investment grade bonds represent the bulk of the Fund’s holdings, which contributed significantly to overall results. Concentrations in the transportation, health care, utilities, corporate and education sectors also were among the leading contributors to performance.

 

Ÿ  

The Fund maintained a short position in U.S. Treasury futures contracts in order to manage interest rate risk. With interest rates falling during the period, as prices rose, this position had a small negative impact on performance.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

Fund Information

Symbol on NYSE

   MHD

Initial Offering Date

   May 2, 1997

Yield on Closing Market Price as of October 31, 2014 ($16.37)1

   6.49%

Tax Equivalent Yield2

   11.47%

Current Monthly Distribution per Common Share3

   $0.0885

Current Annualized Distribution per Common Share3

   $1.0620

Economic Leverage as of October 31, 20144

   36%

 

  1   

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

  2   

Tax equivalent yield assumes the maximum marginal federal tax rate of 43.4%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 

  3   

The distribution rate is not constant and is subject to change.

 

  4   

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

                
10    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


     BlackRock MuniHoldings Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                         

 

      10/31/14      4/30/14      Change      High      Low  

Market Price

   $ 16.37       $ 16.01         2.25    $ 16.56       $ 15.67   

Net Asset Value

   $ 17.67       $ 16.85         4.87    $ 17.88       $ 16.85   

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    10/31/14     4/30/14  

Transportation

     23     22

Health

     18        19   

State

     14        13   

County/City/Special District/School District

     12        13   

Utilities

     11        10   

Education

     9        10   

Corporate

     9        9   

Tobacco

     3        3   

Housing

     1        1   
Credit Quality Allocation1    10/31/14     4/30/14  

AAA/Aaa

     7     9

AA/Aa

     44        39   

A

     26        29   

BBB/Baa

     12        11   

BB/Ba

     4        3   

B

     2        3   

Not Rated2

     5        6   

 

  1   

The Investment advisor evaluates the credit quality of unrated investments based highest rating assigned by either S&P or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 

  2   

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of October 31, 2014 and April 30, 2014, the market value of these securities was $2,725,713 and $4,061,128, each representing 1%, respectively, of the Fund’s long-term investments.

   
Call/Maturity Schedule3        

Calendar Year Ended December 31,

  

2014

       5

2015

       2   

2016

       3   

2017

       6   

2018

       6   

 

  3   

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    11


Fund Summary as of October 31, 2014    BlackRock MuniHoldings Fund II, Inc.

 

Fund Overview      

BlackRock MuniHoldings Fund II, Inc.’s (MUH) (the “Fund”) investment objective is to provide shareholders with current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds rated investment grade and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance      
Ÿ  

For the six-month period ended October 31, 2014, the Fund returned 5.71% based on market price and 7.85% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 5.65% based on market price and 7.38% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

The Fund benefited from income generated in the form of coupon payments from its portfolio of municipal bond holdings. Leverage, which represents a significant element of the Fund’s investment strategy, provided both incremental return and income in an environment of declining interest rates. (Bond prices rise as yields fall). The Fund’s positioning with respect to duration (sensitivity to interest rate movements) helped performance. The Fund’s positioning along the yield curve, which favored longer-dated bonds, also aided performance as longer-dated bonds generally outperformed those with shorter maturities. Investment grade bonds represent the bulk of the Fund’s holdings, which contributed significantly to overall results. Concentrations in the transportation, health care, utilities, corporate-related and education sectors also were among the leading contributors to performance.

 

Ÿ  

The Fund maintained a short position in U.S. Treasury futures contracts in order to manage interest rate risk. With interest rates falling during the period, as prices rose, this position had a small negative impact on performance.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

Fund Information      

Symbol on NYSE

   MUH

Initial Offering Date

   February 27, 1998

Yield on Closing Market Price as of October 31, 2014 ($15.18)1

   6.56%

Tax Equivalent Yield2

   11.59%

Current Monthly Distribution per Common Share3

   $0.083

Current Annualized Distribution per Common Share3

   $0.996

Economic Leverage as of October 31, 20144

   36%

 

  1   

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

  2   

Tax equivalent yield assumes the maximum marginal federal tax rate of 43.4%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 

  3   

The distribution rate is not constant and is subject to change.

 

  4   

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

                
12    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


     BlackRock MuniHoldings Fund II, Inc.

 

 

Market Price and Net Asset Value Per Share Summary                         

 

      10/31/14      4/30/14      Change      High      Low  

Market Price

   $ 15.18       $ 14.84         2.29    $ 15.44       $ 14.78   

Net Asset Value

   $ 16.29       $ 15.61         4.36    $ 16.47       $ 15.61   

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    10/31/14     4/30/14  

Transportation

     21     19

Health

     17        21   

State

     17        14   

County/City/Special District/School District

     15        15   

Utilities

     11        10   

Education

     8        10   

Corporate

     7        7   

Tobacco

     3        3   

Housing

     1        1   
Credit Quality Allocation1    10/31/14     4/30/14  

AAA/Aaa

     7     9

AA/Aa

     49        43   

A

     22        26   

BBB/Baa

     11        11   

BB/Ba

     3        2   

B

     2        3   

Not Rated2

     6        6   

 

  1   

The investment advisor evaluates the credit quality of unrated investments based highest rating assigned by either S&P or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 

  2   

The investment advisor evaluates the credit quality of unrated Investments based upon certain factors including but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of October 31, 2014 and April 30, 2014, the market value of these securities was $5,238,548 and $15,305,545, each representing 6%, respectively, of the Fund’s long-term investments.

 

   
Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2014

      5

2015

      1   

2016

      4   

2017

      7   

2018

      7   

 

  3   

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    13


Fund Summary as of October 31, 2014    BlackRock MuniHoldings Quality Fund, Inc.

 

Fund Overview

BlackRock MuniHoldings Quality Fund, Inc.’s (MUS) (the “Fund”) investment objective is to provide shareholders with current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing primarily in long-term, investment grade municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Fund invests at least 80% of its assets in investment grade municipal obligations with remaining maturities of one year or more at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance      
Ÿ  

For the six-month period ended October 31, 2014, the Fund returned 6.18% based on market price and 7.36% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 5.65% based on market price and 7.38% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

The Fund’s use of leverage provided both incremental return and income in an environment of declining interest rates. (Bond prices rise when rates fall.) With the yield curve flattening (long rates falling more than short and intermediate rates), the Fund’s duration positioning (sensitivity to interest rate movements) also aided performance. In particular, longer-maturity holdings in the transportation, utilities, tax-backed, and health care sectors experienced the best price performance on an absolute basis.

 

Ÿ  

The Fund maintained a small short position in U.S. Treasury futures contracts in order to manage interest rate risk. With interest rates falling during the past six months, as prices rose, this position had a small negative impact on performance.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

Fund Information

Symbol on NYSE

   MUS

Initial Offering Date

   May 1, 1998

Yield on Closing Market Price as of October 31, 2014 ($13.26)1

   6.11%

Tax Equivalent Yield2

   10.80%

Current Monthly Distribution per Common Share3

   $0.0675

Current Annualized Distribution per Common Share3

   $0.8100

Economic Leverage as of October 31, 20144

   36%

 

  1   

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

  2   

Tax equivalent yield assumes the maximum marginal federal tax rate of 43.4%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 

  3   

The distribution rate is not constant and is subject to change.

 

  4   

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

                
14    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


     BlackRock MuniHoldings Quality Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      

 

      10/31/14      4/30/14      Change      High      Low  

Market Price

   $ 13.26       $ 12.88         2.95    $ 13.39       $ 12.66   

Net Asset Value

   $ 14.76       $ 14.18         4.09    $ 14.98       $ 14.18   

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    10/31/14     4/30/14  

Transportation

     33     33

County/City/Special District/School District

     28        27   

Utilities

     15        19   

State

     10        9   

Health

     9        7   

Education

     3        2   

Housing

     1        2   

Tobacco

     1        1   
Credit Quality Allocation1    10/31/14     4/30/14  

AAA/Aaa

     6     6

AA/Aa

     67        67   

A

     24        25   

BBB/Baa

     3        2   

 

  1   

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P’s or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

   
Call/Maturity Schedule2        

Calendar Year Ended December 31,

  

2014

       

2015

     3

2016

     3   

2017

       

2018

     27   

 

  2   

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    15


Fund Summary as of October 31, 2014    BlackRock Muni Intermediate Duration Fund, Inc.

 

Fund Overview      

BlackRock Muni Intermediate Duration Fund, Inc.’s (MUI) (the “Fund”) investment objective is to provide common shareholders with high current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Fund invests at least 75% of its assets in municipal bonds rated investment grade and invests at least 80% of its assets in municipal bonds with a duration of three to ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance      
Ÿ  

For the six-month period ended October 31, 2014, the Fund returned 2.67% based on market price and 5.97% based on NAV. For the same period, the closed-end Lipper Intermediate Municipal Debt Funds category posted an average return of 2.06% based on market price and 5.24% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

The Fund benefited from income generated in the form of coupon payments from its portfolio of municipal bond holdings. In addition, the Fund’s use of leverage provided both incremental return and income in an environment of declining interest rates. (Bond prices rise as yields fall). The Fund’s positioning with respect to duration (sensitivity to interest rate movements) helped performance. The Fund’s positioning along the yield curve, which favored longer-dated bonds, also aided performance as longer-dated bonds generally outperformed those with shorter maturities. Bonds rated in the mid-investment grade category contributed significantly to returns, followed by more highly-rated bonds. Concentrations in the tax-backed, health care and transportation sectors also were among the leading contributors to performance.

 

Ÿ  

In the strong market environment, there were no material detractors from the Fund’s performance during the period.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

Fund Information      

Symbol on NYSE

   MUI

Initial Offering Date

   August 1, 2003

Yield on Closing Market Price as of October 31, 2014 ($14.52)1

   5.66%

Tax Equivalent Yield2

   10.00%

Current Monthly Distribution per Common Share3

   $0.0685

Current Annualized Distribution per Common Share3

   $0.8220

Economic Leverage as of October 31, 20144

   36%

 

  1   

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

  2   

Tax equivalent yield assumes the maximum marginal federal tax rate of 43.4%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 

  3   

The distribution rate is not constant and is subject to change.

 

  4   

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

                
16    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


     BlackRock Muni Intermediate Duration Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary      

 

        10/31/14        4/30/14        Change      High        Low  

Market Price

     $ 14.52         $ 14.55           (0.21 )%     $ 14.77         $ 13.93   

Net Asset Value

     $ 16.11         $ 15.64           3.01    $ 16.38         $ 15.62   

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    10/31/14     4/30/14  

County/City/Special District/School District

     24     24

Transportation

     21        20   

State

     16        16   

Health

     11        12   

Education

     8        9   

Utilities

     8        8   

Corporate

     8        7   

Housing

     2        2   

Tobacco

     2        2   
Credit Quality Allocation1    10/31/14     4/30/14  

AAA/Aaa

     4     3

AA/Aa

     52        48   

A

     33        35   

BBB/Baa

     6        8   

BB/Ba

     1        1   

B

     1        1   

Not Rated2

     3        4   

 

  1   

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P’s or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 

  2   

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of October 31, 2014 and April 30, 2014, the market value of these securities was $4,537,441, representing less than 1% and $4,453,656, representing less than 1%, respectively, of the Fund’s long-term investments.

   
Call/Maturity Schedule3        

Calendar Year Ended December 31,

  

2014

       4

2015

     3   

2016

     4   

2017

     6   

2018

     7   

 

  3   

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    17


Fund Summary as of October 31, 2014    BlackRock MuniVest Fund II, Inc.

 

Fund Overview

BlackRock MuniVest Fund II, Inc.’s (MVT) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Fund invests, under normal market conditions, at least 75% of its assets in municipal bonds rated investment grade and invests primarily in long-term municipal bonds with a maturity of more than ten years at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

 

Performance
Ÿ  

For the six-month period ended October 31, 2014, the Fund returned 5.60% based on market price and 7.84% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 5.65% based on market price and 7.38% based on NAV. All returns reflect reinvestment of dividends and/or distributions. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

The Fund benefited from income generated in the form of coupon payments from its portfolio of municipal bond holdings. Leverage, which represents a significant element of the Fund’s investment strategy, provided both incremental return and income in an environment of declining interest rates. (Bond prices rise as yields fall). The Fund’s positioning with respect to duration (sensitivity to interest rate movements) helped performance. The Fund’s positioning along the yield curve, which favored longer-dated bonds, also aided performance as longer-dated bonds generally outperformed those with shorter maturities. Investment grade bonds represent the bulk of the Fund’s holdings, which contributed significantly to overall results. Concentrations in the transportation, health care, utilities, tax-backed and corporate-related sectors also were among the leading contributors to performance.

 

Ÿ  

The Fund maintained a short position in U.S. Treasury futures contracts in order to manage interest rate risk. With interest rates falling during the period, as prices rose, this position had a small negative impact on performance.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

Fund Information

Symbol on NYSE

   MVT

Initial Offering Date

   March 29, 1993

Yield on Closing Market Price as of October 31, 2014 ($15.48)1

   6.43%

Tax Equivalent Yield2

   11.36%

Current Monthly Distribution per Common Share3

   $0.083

Current Annualized Distribution per Common Share3

   $0.996

Economic Leverage as of October 31, 20144

   38%

 

  1   

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

  2   

Tax equivalent yield assumes the maximum marginal federal tax rate of 43.4%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 

  3   

The distribution rate is not constant and is subject to change.

 

  4   

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Fund, including any assets attributable to VMTP Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques used by the Fund, please see The Benefits and Risks of Leveraging on page 5.

 

                
18    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


     BlackRock MuniVest Fund II, Inc.

 

Market Price and Net Asset Value Per Share Summary                         

 

      10/31/14      4/30/14      Change      High      Low  

Market Price

   $ 15.48       $ 15.16         2.11    $ 15.93       $ 15.14   

Net Asset Value

   $ 16.11       $ 15.45         4.27    $ 16.26       $ 15.45   

 

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Fund’s Long-Term Investments
Sector Allocation    10/31/14     4/30/14  

Transportation

     24     21

Health

     18        20   

State

     14        15   

Utilities

     13        12   

County/City/Special District/School District

     11        11   

Corporate

     8        8   

Education

     7        8   

Tobacco

     3        3   

Housing

     2        2   
Credit Quality Allocation1    10/31/14     4/30/14  

AAA/Aaa

     8     8

AA/Aa

     50        42   

A

     21        28   

BBB/Baa

     11        10   

BB/Ba

     3        3   

B

     2        3   

Not Rated2

     5        6   

 

  1   

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 

  2   

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of October 31, 2014 and April 30, 2014 the market value of unrated securities deemed by the investment advisor to be investment grade was $4,074,912 and $4,021,023, representing less than 1% and 1%, respectively, of the Fund’s long-term investments.

   
Call/Maturity Schedule3        

Calendar Year Ended December 31,

  

2014

     3

2015

     1   

2016

     3   

2017

     8   

2018

     13   

 

  3   

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    19


Schedule of Investments October 31, 2014 (Unaudited)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 2.8%

    

County of Jefferson Alabama, RB, Limited Obligation School, Series A:

    

5.25%, 1/01/17

   $ 895      $ 901,175   

5.25%, 1/01/19

     2,000        2,017,600   

5.50%, 1/01/21

     1,215        1,225,692   

4.75%, 1/01/25

     3,145        3,114,808   

County of Jefferson Alabama Sewer, Refunding RB, Sub-Lien, Series D, 6.00%, 10/01/42

     3,745        4,077,781   

State of Alabama Docks Department, Refunding RB, 6.00%, 10/01/40

     2,165        2,532,877   
    

 

 

 
               13,869,933   

Alaska — 1.1%

    

Northern Tobacco Securitization Corp., Refunding RB, Tobacco Settlement, Asset-Backed, Series A:

    

4.63%, 6/01/23

     1,435        1,432,833   

5.00%, 6/01/32

     1,500        1,193,880   

5.00%, 6/01/46

     4,000        2,991,400   
    

 

 

 
               5,618,113   

Arizona — 1.0%

    

City of Phoenix Arizona IDA, RB:

    

Great Hearts Academies — Veritas Project, 6.30%, 7/01/42

     500        534,845   

Great Hearts Academies — Veritas Project, 6.40%, 7/01/47

     425        456,522   

Legacy Traditional Schools, Series A, 6.50%, 7/01/34 (a)

     570        637,642   

Legacy Traditional Schools, Series A, 6.75%, 7/01/44 (a)

     1,000        1,129,900   

City of Show Low Arizona, Special Assessment Bonds, Improvement District No. 5, 6.38%, 1/01/15

     50        50,351   

County of Maricopa Arizona IDA, RB, Arizona Charter School Project 1, Series A, 6.63%, 7/01/20

     755        733,626   

University Medical Center Corp., RB:

    

6.25%, 7/01/29

     820        953,045   

6.50%, 7/01/39

     500        584,435   
    

 

 

 
               5,080,366   

California — 4.3%

    

California Municipal Finance Authority, Urban Discovery Academy Project (a):

    

5.50%, 8/01/34

     315        317,574   

6.00%, 8/01/44

     665        670,785   

6.13%, 8/01/49

     580        584,512   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

    

California School Finance Authority, RB:

    

Alliance for College Ready Public School — 2023 Union LLC Project, Series A, 6.40%, 7/01/48

   1,570      1,785,624   

Value Schools, 6.65%, 7/01/33

     435        472,828   

Value Schools, 6.90%, 7/01/43

     975        1,067,303   

California Statewide Communities Development Authority, Refunding RB, American Baptist Homes of the West, 6.25%, 10/01/39

     2,175        2,476,629   

California Statewide Financing Authority, RB, Tobacco Settlement, Series B, 6.00%, 5/01/43

     1,650        1,649,818   

City of San Jose California Hotel Tax, RB, Convention Center Expansion & Renovation Project:

    

6.50%, 5/01/36

     900        1,111,698   

6.50%, 5/01/42

     2,220        2,718,346   

City of Stockton California Public Financing Authority, RB, Delta Water Supply Project, Series A, 6.25%, 10/01/40

     375        441,439   

County of Riverside California Transportation Commission, RB, Senior Lien, Series A, 5.75%, 6/01/48

     2,885        3,276,437   

Golden State Tobacco Securitization Corp., Refunding RB, 5.75%, 6/01/47

     4,020        3,265,486   

Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement, Asset-Backed, Senior Series A-1, 4.75%, 6/01/25

     2,000        1,974,400   
    

 

 

 
               21,812,879   

Colorado — 1.5%

    

Foothills Metropolitan District, Special Assessment Bonds, 6.00%, 12/01/38

     5,985        6,011,274   

Regional Transportation District, RB, Denver Transit Partners Eagle P3 Project, 6.00%, 1/15/34

     1,500        1,688,205   
    

 

 

 
               7,699,479   

Connecticut — 0.5%

    

Mohegan Tribe of Indians of Connecticut, Refunding RB, Public Improvement, Priority Distribution, 6.25%, 1/01/31

     2,755        2,751,088   

Delaware — 0.8%

    

County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Power LLC Project, 6.00%, 10/01/40

     1,000        1,137,610   

Delaware State EDA, RB, Exempt Facilities, Indian River Power LLC Project, 5.38%, 10/01/45

     2,620        2,802,352   
    

 

 

 
               3,939,962   

 

Portfolio Abbreviations

 

To simplify the listings of portfolio holdings in the Schedules of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:      AGC    Assured Guaranty Corp.    HFA    Housing Finance Agency
     AGM    Assured Guaranty Municipal Corp.    HRB    Housing Revenue Bonds
     AMBAC    American Municipal Bond Assurance Corp.    HUD    Department of Housing and Urban Development
     AMT    Alternative Minimum Tax (subject to)    IDA    Industrial Development Authority
     ARB    Airport Revenue Bonds    IDB    Industrial Development Board
     BARB    Building Aid Revenue Bonds    ISD    Independent School District
     BHAC    Berkshire Hathaway Assurance Corp.    LRB    Lease Revenue Bonds
     CAB    Capital Appreciation Bonds    M/F    Multi-Family
     COP    Certificates of Participation    MRB    Mortgage Revenue Bonds
     EDA    Economic Development Authority    NPFGC    National Public Finance Guarantee Corp.
     EDC    Economic Development Corp.    PSF-GTD    Permanent School Fund Guaranteed
     ERB    Education Revenue Bonds    RB    Revenue Bonds
     GARB    General Airport Revenue Bonds    S/F    Single-Family
     GO    General Obligation Bonds    Syncora    Syncora Guarantee
     HDA    Housing Development Authority      

 

 

See Notes to Financial Statements.

 

                
20    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

District of Columbia — 0.9%

    

District of Columbia, RB, Methodist Home District of Columbia, Series A:

    

7.38%, 1/01/30

   $ 1,665      $ 1,667,764   

7.50%, 1/01/39

     1,615        1,617,003   

District of Columbia Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, 6.50%, 5/15/33

     1,055        1,213,049   
    

 

 

 
               4,497,816   

Florida — 9.8%

    

Boggy Creek Improvement District, Refunding RB, Special Assessment Bonds, 5.13%, 5/01/43

     1,600        1,656,272   

Capital Trust Agency, Inc., RB, 1st Mortgage, Silver Creek St. Augustine Project:

    

8.25%, 1/01/44

     515        552,178   

8.25%, 1/01/49

     1,105        1,183,234   

County of Collier Florida IDA, Refunding RB, Arlington of Naples Project, Series A, 8.13%, 5/15/44 (a)

     2,510        2,785,171   

County of Hillsborough Florida IDA, RB, National Gypsum Co., AMT:

    

Series A, 7.13%, 4/01/30

     3,000        3,020,520   

Series B, 7.13%, 4/01/30

     1,560        1,562,012   

County of Palm Beach Florida Health Facilities Authority, RB, Acts Retirement Life Community, 5.50%, 11/15/33

     3,500        3,882,025   

Florida Development Finance Corp., RB, Renaissance Charter School, Series A:

    

5.75%, 6/15/29

     690        681,230   

6.00%, 6/15/34

     835        824,512   

6.13%, 6/15/44

     3,220        3,119,343   

Greeneway Improvement District, RB, Special Assessment Bonds, 5.13%, 5/01/43

     2,000        2,070,340   

Harbor Bay Community Development District Florida, Special Assessment Bonds, Series A, 7.00%, 5/01/33

     410        411,353   

Jacksonville Economic Development Commission, RB, Gerdau Ameristeel U.S. Inc., AMT, 5.30%, 5/01/37

     4,500        4,508,235   

Jacksonville Economic Development Commission, Refunding RB, Florida Proton Therapy Institute, Series A, 6.00%, 9/01/17

     720        804,629   

Lakewood Ranch Stewardship District, Refunding, Special Assessment Bonds, Lakewood Center & New Sector Projects, 8.00%, 5/01/40

     1,485        1,896,315   

Mid-Bay Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/40

     4,550        5,539,989   

Midtown Miami Community Development District, Refunding, Special Assessment Bonds:

    

Series A, 5.00%, 5/01/37

     850        888,913   

Series B, 5.00%, 5/01/37

     500        522,890   

Palm Beach County Health Facilities Authority, Refunding RB, Series A, 7.25%, 6/01/34

     500        566,665   

Santa Rosa Bay Bridge Authority, RB, 6.25%, 7/01/28 (b)(c)

     4,650        1,953,467   

Tampa Palms Open Space and Transportation Community Development District, RB, Capital Improvement, Richmond Place Project, 7.50%, 5/01/18

     1,075        1,076,355   

Tolomato Community Development District, Refunding, Special Assessment Bonds:

    

Series A2, 0.00%, 5/01/39 (d)

     250        183,100   

Series A3, 0.00%, 5/01/40 (d)

     585        349,105   

Series A4, 0.00%, 5/01/40 (d)

     305        134,734   

Series A1, 6.65%, 5/01/40

     910        928,528   
Municipal Bonds   

Par  

(000)

    Value  

Florida (concluded)

    

Tolomato Community Development District, Convertible CAB (b)(c):

    

Series 1, 6.65%, 5/01/40

   50      51,316   

Series 2, 6.65%, 5/01/40

     2,110        1,252,897   

Series 3, 6.65%, 5/01/40

     710        7   

Village Community Development District No. 9, Special Assessment Bonds:

    

6.75%, 5/01/31

     1,660        2,031,724   

7.00%, 5/01/41

     2,830        3,482,739   

5.50%, 5/01/42

     1,295        1,411,045   
    

 

 

 
               49,330,843   

Georgia — 2.2%

    

City of Atlanta Georgia, Tax Allocation Bonds, Princeton Lakes Project, 5.50%, 1/01/31

     1,035        1,047,275   

County of Clayton Georgia, Tax Allocation Bonds, Ellenwood Project, 7.50%, 7/01/33

     2,745        2,902,673   

County of Clayton Georgia Development Authority, Refunding RB, Delta Air Lines, Inc. Project, Series A, 8.75%, 6/01/29

     3,365        4,203,390   

County of Gainesville & Hall Georgia Development Authority, Refunding RB, Acts Retirement Life Community, Series A-2:

    

6.38%, 11/15/29

     700        812,553   

6.63%, 11/15/39

     880        1,016,338   

Private Colleges & Universities Authority, RB, Savannah College of Art & Design, 5.00%, 4/01/44

     1,175        1,264,488   
    

 

 

 
               11,246,717   

Guam — 1.5%

    

Guam Government Waterworks Authority, RB, Water & Wastewater System:

    

5.25%, 7/01/33

     1,450        1,631,294   

5.50%, 7/01/43

     2,415        2,725,110   

Guam Government Waterworks Authority, Refunding RB, Water & Wastewater System, 6.00%, 7/01/15 (e)

     1,265        1,311,843   

Territory of Guam, GO, Series A:

    

6.00%, 11/15/19

     615        679,470   

7.00%, 11/15/39

     1,115        1,287,145   
    

 

 

 
               7,634,862   

Illinois — 4.6%

    

City of Chicago Illinois Board of Education, GO, Series A, 5.25%, 12/01/41

     3,450        3,558,882   

Illinois Finance Authority, Refunding RB:

    

CAB, Clare Water Tower, Series B, 0.00%, 5/15/50 (b)(c)(f)

     1,214        12   

Clare Water Tower, Series A-7, 6.13%, 5/15/41 (b)(c)

     3,129        31   

Friendship Village of Schaumburg, 7.25%, 2/15/45

     4,000        4,286,720   

Lutheran Home & Services Obligated Group, 5.63%, 5/15/42

     2,395        2,512,140   

Primary Health Care Centers Program, 6.60%, 7/01/24

     1,175        1,191,544   

Rogers Park Montessori School Project, Series 2014, 6.00%, 2/01/34

     365        375,392   

Rogers Park Montessori School Project, Series 2014, 6.13%, 2/01/45

     860        872,934   

Roosevelt University Project, 6.50%, 4/01/44

     4,170        4,568,610   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     1,400        1,637,580   

6.00%, 6/01/28

     710        833,128   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    21


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

Village of Lincolnshire Illinois, Special Tax Bonds, Sedgebrook Project, 6.25%, 3/01/34

   $ 1,800      $ 1,837,764   

Village of Wheeling Illinois, Tax Allocation Bonds, North Milwaukee/Lake-Cook TIF Project, 6.00%, 1/01/25

     1,420        1,421,065   
    

 

 

 
               23,095,802   

Indiana — 1.1%

    

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT:

    

6.75%, 1/01/34

     825        940,805   

7.00%, 1/01/44

     2,000        2,284,760   

Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges East End Crossing Project, Series A, AMT:

    

5.00%, 7/01/44

     470        494,957   

5.00%, 7/01/48

     1,555        1,634,119   
    

 

 

 
               5,354,641   

Iowa — 3.3%

    

Iowa Finance Authority, Refunding RB:

    

Midwestern Disaster Area, Iowa Fertilizer Co. Project, 5.50%, 12/01/22

     4,090        4,333,559   

Midwestern Disaster Area, Iowa Fertilizer Co. Project, 5.25%, 12/01/25

     2,190        2,356,944   

Sunrise Retirement Community Project, 5.50%, 9/01/37

     1,355        1,359,160   

Sunrise Retirement Community Project, 5.75%, 9/01/43

     2,115        2,147,423   

Iowa Tobacco Settlement Authority, Refunding RB:

    

Asset-Backed, CAB, Series B, 5.60%, 6/01/34

     1,200        1,068,360   

Asset-Backed, Series C, 5.63%, 6/01/46

     1,565        1,316,447   

Series C, 5.38%, 6/01/38

     4,900        4,063,080   
    

 

 

 
               16,644,973   

Kentucky — 0.9%

    

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing, First Tier, Series A, 5.75%, 7/01/49

     4,000        4,552,560   

Louisiana — 2.7%

    

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, 6.75%, 11/01/32

     5,000        5,598,200   

Louisiana Public Facilities Authority, RB, Belle Chasse Educational Foundation Project, 6.75%, 5/01/41

     1,855        2,082,423   

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A, 5.25%, 5/15/35

     5,570        6,106,057   
    

 

 

 
               13,786,680   

Maine — 0.7%

    

Maine Health & Higher Educational Facilities Authority, RB, Maine General Medical Center, 6.75%, 7/01/41

     2,955        3,306,970   

Maryland — 2.5%

    

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

     2,840        3,138,399   

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

     3,615        3,896,753   

Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 9/01/25

     4,785        5,291,205   
    

 

 

 
               12,326,357   
Municipal Bonds   

Par  

(000)

    Value  

Massachusetts — 1.0%

    

Massachusetts Development Finance Agency, RB, Series A:

    

Foxborough Regional Charter School, 7.00%, 7/01/42

   1,025      1,162,791   

North Hill Communities Issue, 6.50%, 11/15/43

     2,020        2,131,403   

Massachusetts Development Finance Agency, Refunding RB, Tufts Medical Center, Series I, 6.75%, 1/01/36

     1,490        1,772,787   
    

 

 

 
               5,066,981   

Michigan — 2.7%

    

City of Detroit Michigan, GO, Taxable Capital Improvement, Limited Tax:

    

Series A-1, 5.00%, 4/01/16 (b)(c)

     650        182,065   

Series A-2, 8.00%, 4/01/15

     3,185        892,119   

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 7/01/39

     2,785        2,989,920   

Michigan Finance Authority, RB, Detroit Water and Sewerage Disposal System, Senior Lien, Series 2014 C-2, AMT, 5.00%, 7/01/44

     415        426,678   

Michigan Finance Authority, Refunding RB, Detroit Water and Sewage Department, Project, Senior Lien C-1, 5.00%, 7/01/44

     920        966,534   

Royal Oak Hospital Finance Authority, Refunding RB, William Beaumont Hospital, Series V, 8.25%, 9/01/18 (e)

     6,310        8,068,029   
    

 

 

 
               13,525,345   

Minnesota — 0.6%

    

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series A, 6.75%, 11/15/32

     1,785        2,109,370   

Woodbury Housing & Redevelopment Authority, RB, 5.13%, 12/01/44

     945        928,245   
    

 

 

 
               3,037,615   

Missouri — 1.0%

    

Kirkwood IDA Missouri, RB, Aberdeen Heights, Series A, 8.25%, 5/15/39

     2,315        2,668,986   

Lees Summit Industrial Development Authority, RB, John Knox Obligated Group, 5.25%, 8/15/39

     2,235        2,267,296   
    

 

 

 
               4,936,282   

New Jersey — 4.2%

    

New Jersey EDA, RB:

    

AMT, ACR Energy Partners, Series A, 10.50%, 6/01/32 (a)

     1,940        967,090   

Kapkowski Road Landfill Project, Series B, AMT, 6.50%, 4/01/31

     2,250        2,741,692   

Private Activity Bond, The Goethals Bridge Replacement Project, AMT, 5.38%, 1/01/43

     2,155        2,383,883   

Team Academy Charter School Project, 6.00%, 10/01/43

     1,530        1,722,092   

New Jersey EDA, Refunding RB, Series A, 6.00%, 8/01/49 (a)

     500        507,430   

New Jersey Health Care Facilities Financing Authority, Refunding RB:

    

St. Barnabas Health Care System, Series A, 5.63%, 7/01/37

     2,650        3,007,405   

St. Joseph’s Healthcare System, 6.63%, 7/01/38

     4,090        4,525,258   

Tobacco Settlement Financing Corp. New Jersey, Refunding RB, Series 1A:

    

4.63%, 6/01/26

     2,000        1,830,560   

 

See Notes to Financial Statements.

 

                
22    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

New Jersey (concluded)

    

Tobacco Settlement Financing Corp. New Jersey, Refunding RB, Series 1A (concluded):

    

5.00%, 6/01/29

   $ 3,735      $ 3,194,359   
    

 

 

 
               20,879,769   

New Mexico — 0.6%

    

New Mexico Hospital Equipment Loan Council, Refunding RB, Gerald Champion Regional Medical Center Project, 5.50%, 7/01/42

     2,970        2,793,285   

New York — 7.2%

    

City of New York New York Industrial Development Agency, ARB, AMT:

    

American Airlines, Inc., JFK International Airport, 8.00%, 8/01/28 (g)

     1,765        1,938,976   

British Airways PLC Project, 7.63%, 12/01/32

     4,130        4,152,508   

City of New York New York Industrial Development Agency, RB, Special Needs Facilities Pooled Program, Series C-1:

    

6.50%, 7/01/24

     610        611,067   

6.63%, 7/01/29

     1,100        1,100,077   

County of Chautauqua New York Industrial Development Agency, RB, NRG Dunkirk Power Project, 5.88%, 4/01/42

     3,695        4,104,443   

County of Dutchess New York Industrial Development Agency, Refunding RB, 5.00%, 8/01/46

     5,000        5,035,350   

County of Westchester New York Healthcare Corp., RB, Senior Lien, Series A, 5.00%, 11/01/44

     1,452        1,609,868   

Metropolitan Transportation Authority, RB, Series C, 6.50%, 11/15/28

     2,000        2,424,740   

New York Liberty Development Corp., Refunding RB:

    

7.25%, 11/15/44 (a)(h)

     3,130        3,356,831   

2nd Priority, Bank of America Tower at One Bryant Park Project, Class 3, 6.38%, 7/15/49

     1,270        1,437,780   

3 World Trade Center Project, Class 1, 5.00%, 11/15/44 (a)(h)

     5,900        5,927,612   

3 World Trade Center Project, Class 2, 5.15%, 11/15/34 (a)(h)

     455        462,084   

3 World Trade Center Project, Class 2, 5.38%, 11/15/40 (a)(h)

     1,080        1,105,132   

Niagara Area Development Corp., Refunding RB, Solid Waste Disposal Facility, Covanta Energy Project, Series A, AMT, 5.25%, 11/01/42 (a)

     1,335        1,374,810   

Port Authority of New York & New Jersey, ARB, Special Project, JFK International Air Terminal LLC Project, Series 8, 6.00%, 12/01/36

     1,340        1,561,167   
    

 

 

 
               36,202,445   

North Carolina — 1.5%

    

North Carolina Medical Care Commission, Refunding RB, 1st Mortgage, Series A:

    

Deerfield Project, 6.13%, 11/01/38

     4,565        5,023,006   

Retirement Facilities Whitestone Project, 7.75%, 3/01/31

     1,000        1,146,740   

Retirement Facilities Whitestone Project, 7.75%, 3/01/41

     1,420        1,604,146   
    

 

 

 
               7,773,892   

North Dakota — 0.5%

    

City of Williston North Dakota, RB, Eagle Crest Apartments LLC Project, 7.75%, 9/01/38

     2,155        2,277,275   

Ohio — 2.5%

    

Buckeye Tobacco Settlement Financing Authority, RB, Asset-Backed Bonds, Series A-2:

    

5.75%, 6/01/34

     6,745        5,311,350   

6.00%, 6/01/42

     3,040        2,394,882   
Municipal Bonds   

Par  

(000)

    Value  

Ohio (concluded)

    

State of Ohio, RB, Ford Motor Co. Project, AMT, 5.75%, 4/01/35

   $ 4,880      $ 4,952,224   
    

 

 

 
               12,658,456   

Oklahoma — 0.3%

    

Oklahoma Development Finance Authority, Refunding RB, Inverness Village Community, 6.00%, 1/01/32

     1,305        1,369,872   

Oregon — 0.6%

    

Hospital Facilities Authority of Multnomah County Oregon, Refunding RB, Mirabella at South Waterfront:

    

5.40%, 10/01/44

     1,245        1,302,743   

5.50%, 10/01/49

     1,765        1,843,172   
    

 

 

 
               3,145,915   

Pennsylvania — 4.2%

    

Allentown Neighborhood Improvement Zone Development Authority, Refunding RB, Series A, 5.00%, 5/01/42

     4,170        4,449,056   

City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 7/01/36

     2,000        2,113,840   

County of Cumberland Pennsylvania Municipal Authority, Refunding RB, Diakon Lutheran, 6.38%, 1/01/39

     6,165        6,841,239   

County of Lancaster Pennsylvania Hospital Authority, Refunding RB, Brethren Village Project, Series A, 6.25%, 7/01/26

     1,160        1,223,962   

County of Lehigh Pennsylvania General Purpose Authority, Refunding RB, Bible Fellowship Church Homes, 5.13%, 7/01/32

     2,705        2,767,188   

County of Northampton Pennsylvania IDA, Route 33 Project, Tax Allocation Bonds, 7.00%, 7/01/32

     2,110        2,286,333   

Pennsylvania Economic Development Financing Authority, RB, National Gypsum Co., Series A, AMT, 6.25%, 11/01/27

     1,250        1,250,800   
    

 

 

 
               20,932,418   

Puerto Rico — 1.0%

    

Commonwealth of Puerto Rico, GO, Refunding, Series A, 8.00%, 7/01/35

     6,000        5,249,760   

Rhode Island — 0.8%

    

Central Falls Detention Facility Corp., Refunding RB, 7.25%, 7/15/35 (b)(c)

     4,190        2,294,779   

Tobacco Settlement Financing Corp, RB, Series 2002-A, Class C, 6.25%, 6/01/42

     1,590        1,589,809   
    

 

 

 
               3,884,588   

South Carolina — 1.3%

    

State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54

     5,850        6,662,565   

Texas — 12.1%

    

Brazos River Authority, Refunding RB, Texas Utility Co., Series A, AMT, 7.70%, 4/01/33 (b)(c)

     5,080        406,400   

Central Texas Regional Mobility Authority, Refunding RB:

    

CAB, 0.00%, 1/01/28 (f)

     1,000        563,800   

CAB, 0.00%, 1/01/29 (f)

     2,000        1,073,620   

CAB, 0.00%, 1/01/30 (f)

     1,170        598,408   

CAB, 0.00%, 1/01/33 (f)

     3,690        1,598,028   

CAB, 0.00%, 1/01/34 (f)

     4,000        1,620,560   

Senior Lien, 5.75%, 1/01/25

     675        755,143   

Senior Lien, 6.25%, 1/01/46

     2,210        2,573,633   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    23


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

    

City of Houston Texas Airport System, RB, Special Facilities, Continental Airlines, Inc., AMT, Series A, 6.63%, 7/15/38 (c)

   $ 2,890      $ 3,256,076   

City of Houston Texas Airport System, Refunding ARB, United Airlines, Inc. Terminal E Project, AMT, 5.00%, 7/01/29

     910        960,632   

Clifton Higher Education Finance Corp., ERB, Idea Public Schools:

    

5.50%, 8/15/31

     955        1,063,975   

5.75%, 8/15/41

     720        810,151   

County of Bexar Texas Health Facilities Development Corp., RB, Army Retirement Residence Project, 6.20%, 7/01/45

     5,040        5,781,082   

County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B, 7.00%, 1/01/48

     475        546,606   

County of Harris Texas-Houston Sports Authority, Refunding RB, CAB, Senior Lien, Series A (NPFGC), 0.00%, 11/15/38 (f)

     10,000        2,792,000   

County of Matagorda Texas Navigation District No. 1, Refunding RB, Central Power & Light Co. Project, Series A, 6.30%, 11/01/29

     2,090        2,403,751   

County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Series A:

    

CC Young Memorial Home, 8.00%, 2/15/38

     1,745        1,957,070   

Senior Living Center Project, 8.25%, 11/15/44

     4,200        4,016,460   

County of Travis Texas Health Facilities Development Corp., Refunding RB, 7.13%, 1/01/46

     3,080        3,361,112   

Decatur Hospital Authority, Refunding RB, 5.25%, 9/01/44

     735        762,974   

La Vernia Higher Education Finance Corp., RB, Kipp, Inc., Series A, 6.38%, 8/15/44

     860        971,327   

Mesquite Health Facility Development Corp., Refunding RB, 5.13%, 2/15/42

     810        822,199   

New Hope Cultural Education Facilities Corp., RB, Stephenville LLC Tarleton State University Project:

    

5.88%, 4/01/36

     1,210        1,386,551   

6.00%, 4/01/45

     1,845        2,116,363   

North Texas Education Finance Corp., ERB, Uplift Education, Series A, 5.25%, 12/01/47

     1,600        1,723,152   

North Texas Tollway Authority, RB, CAB, Special Project System, Series B, 0.00%, 9/01/37 (f)

     2,110        690,497   

North Texas Tollway Authority, Refunding RB, 2nd Tier System, Series F, 6.13%, 1/01/31

     4,425        4,655,410   

Red River Health Facilities Development Corp., First MRB, Project:

    

Eden Home, Inc., 7.25%, 12/15/42

     2,895        2,726,743   

Wichita Falls Retirement Foundation, 5.13%, 1/01/41

     900        905,427   

Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien:

    

LBJ Infrastructure Group LLC, LBJ Freeway Managed Lanes Project, 7.00%, 6/30/40

     3,775        4,553,027   

NTE Mobility Partners LLC, North Tarrant Express Managed Lanes Project, 6.88%, 12/31/39

     3,000        3,551,940   
    

 

 

 
               61,004,117   

Utah — 0.6%

    

State of Utah Charter School Finance Authority, Refunding RB, 6.75%, 10/15/43

     2,950        3,151,101   

Vermont — 0.2%

    

Vermont EDA, Refunding, MRB, Wake Robin Corp. Project, 5.40%, 5/01/33

     770        802,456   
Municipal Bonds   

Par  

(000)

    Value  

Virginia — 2.7%

    

County of Fairfax Virginia EDA, Refunding RB, Goodwin House, Inc., 5.13%, 10/01/42

   2,500      2,584,275   

Mosaic District Community Development Authority, Special Assessment, Series A:

    

6.63%, 3/01/26

     1,485        1,719,972   

6.88%, 3/01/36

     1,300        1,503,645   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT, 6.00%, 1/01/37

     6,805        7,726,805   
    

 

 

 
               13,534,697   

Washington — 0.6%

    

County of King Washington Public Hospital District No. 4, GO, Refunding, Snoqualmie Valley Hospital, 7.00%, 12/01/40

     1,455        1,577,089   

Greater Wenatchee Regional Events Center Public Facilities District, Refunding RB, Series A, 5.50%, 9/01/42

     1,495        1,561,557   
    

 

 

 
               3,138,646   

Wisconsin — 0.5%

    

Public Finance Authority, RB, Rose Villa Project, Series A:

    

5.75%, 11/15/44

     430        446,430   

6.00%, 11/15/49

     270        284,567   

Wisconsin Health & Educational Facilities Authority, Refunding RB, St. Johns Communities, Inc., Series A:

    

7.25%, 9/15/29

     425        501,593   

7.63%, 9/15/39

     855        1,018,852   
    

 

 

 
               2,251,442   
Total Municipal Bonds — 88.9%              446,828,963   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (i)
 

Colorado — 2.5%

    

Colorado Health Facilities Authority, Refunding RB, Sisters of Leavenworth Health System, Series A, 5.00%, 1/01/40

     11,475        12,485,144   

District of Columbia — 1.6%

    

District of Columbia Water & Sewer Authority, Refunding RB, Senior Lien, Series A, 6.00%, 10/01/35 (j)

     6,679        7,987,720   

Florida — 3.3%

    

County of Miami-Dade Florida, Refunding RB, Miami International Airport, Series A, AMT (AGC), 5.25%, 10/01/33

     15,000        16,737,450   

Illinois — 3.0%

    

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien, Series A (NPFGC), 5.00%, 1/01/33 (j)

     6,510        6,819,746   

Illinois Finance Authority, RB, The Carle Foundation, Series A (AGM), 6.00%, 8/15/41

     7,180        8,326,431   
    

 

 

 
               15,146,177   

New York — 13.6%

    

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution:

    

Fiscal 2013, Series CC, 5.00%, 6/15/47

     14,181        15,796,414   

 

See Notes to Financial Statements.

 

                
24    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (i)
  

Par  

(000)

    Value  

New York (concluded)

    

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution (concluded):

    

Series EE, 5.50%, 6/15/43

   $ 7,605      $ 8,953,291   

Series HH, 5.00%, 6/15/31 (j)

     8,609        9,850,055   

Hudson Yards Infrastructure Corp., RB, Fiscal 2012, Series A, 5.75%, 2/15/47 (j)

     4,520        5,203,862   

New York Liberty Development Corp., RB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43

     18,105        20,686,773   

New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51 (j)

     6,600        7,680,222   
    

 

 

 
               68,170,617   

Washington — 1.7%

    

City of Bellingham Washington, RB, Water & Sewer, 5.00%, 8/01/40

     7,966        8,830,313   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 25.7%
        129,357,421   

Total Long-Term Investments

(Cost — $542,531,821) — 114.6%

  

  

    576,186,384   
Short-Term Securities   

Shares

    Value  

FFI Institutional Tax-Exempt Fund, 0.03% (k)(l)

     826,419      826,419   
Total Short-Term Securities
(Cost — $826,419) — 0.2%
             826,419   
Total Investments (Cost — $543,358,240) — 114.8%        577,012,803   
Liabilities in Excess of Other Assets — (0.6)%        (3,059,089

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (14.2)%

   

    (71,163,224
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 502,790,490   
    

 

 

 

 

Notes to Schedule of Investments
(a)   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.

 

(b)   Non-income producing security.

 

(c)   Issuer filed for bankruptcy and/or is in default of principal and/or interest payments.

 

(d)   Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown is as of report date.

 

(e)   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.

 

(f)   Zero-coupon bond.

 

(g)   Variable rate security. Rate shown is as of report date.

 

(h)   When-issued security. Unsettled when-issued transactions were as follows:

 

Counterparty      Value        Unrealized
Appreciation
 

Goldman Sachs & Co.

     $ 10,851,659         $ 286,659   

 

(i)   Represent bonds transferred to a TOB. In exchange for which the Fund received cash and residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(j)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreement, which expires on January 1, 2015 to November 15, 2019 is $21,577,964

 

(k)   Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2014, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at October 31,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       259,703           566,716           826,419         $ 1,338   

 

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

 

Ÿ  

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

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Appreciation
 
  (375   10-Year U.S. Treasury Note   Chicago Board of Trade   December 2014   $ 47,384,766      $ 119,078   

 

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 statement purposes. 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

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    25


Schedule of Investments (concluded)

  

BlackRock MuniAssets Fund, Inc. (MUA)

 

 

entirety. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Fund 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 Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’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. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer Note 2 of Note to Financial Statements.

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

 

     Level 1        Level 2        Level 3        Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 576,186,384                   $ 576,186,384   

Short-Term Securities

  $ 826,419                               826,419   
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 826,419         $ 576,186,384                   $ 577,012,803   
 

 

 

      

 

 

      

 

 

      

 

 

 

1    See above Schedule of Investments for values in each state or political subdivision.

       

     Level 1        Level 2        Level 3        Total  
Derivative Financial Instruments2                 

Assets:

                

Interest rate contracts

  $ 119,078                             $ 119,078   

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

       

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of October 31, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 473,000                             $ 473,000   

Liabilities:

                

TOB trust certificates

            $ (71,144,505                  (71,144,505
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 473,000         $ (71,144,505                $ (70,671,505
 

 

 

      

 

 

      

 

 

      

 

 

 

There were no transfers between levels during the six months ended October 31, 2014.

 

See Notes to Financial Statements.

 

                
26    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments October 31, 2014 (Unaudited)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 1.4%

    

County of Jefferson Alabama, RB, Limited Obligation School, Series A:

    

5.50%, 1/01/22

   $ 2,750      $ 2,774,200   

4.75%, 1/01/25

     2,200        2,178,880   
    

 

 

 
               4,953,080   

Alaska — 0.8%

    

Alaska Housing Finance Corp., RB, General Housing, Series B (NPFGC), 5.25%, 12/01/30

     400        415,100   

Alaska Industrial Development & Export Authority, RB, Providence Health Services, Series A, 5.50%, 10/01/41

     990        1,121,066   

Borough of Matanuska-Susitna Alaska, RB, Goose Creek Correctional Center (AGC), 6.00%, 9/01/28

     1,200        1,445,640   
    

 

 

 
               2,981,806   

Arizona — 1.3%

    

Greater Arizona Development Authority, RB, Series B (NPFGC), 5.00%, 8/01/35

     1,300        1,333,813   

State of Arizona, COP, Department of Administration, Series A (AGM):

    

5.00%, 10/01/27

     2,700        2,993,274   

5.00%, 10/01/29

     400        440,728   
    

 

 

 
               4,767,815   

California — 19.2%

    

Alameda Corridor Transportation Authority, Refunding RB, CAB, Subordinate Lien, Series A (AMBAC):

    

5.40%, 10/01/24

     10,185        11,001,633   

5.45%, 10/01/25

     3,700        3,989,377   

Anaheim Public Financing Authority California, RB, Senior, Public Improvements Project, Series A (AGM), 6.00%, 9/01/24

     5,000        5,983,450   

Cabrillo Community College District, GO, CAB, Election of 2004, Series B (NPFGC), 0.00%, 8/01/37 (a)

     2,400        812,232   

California Health Facilities Financing Authority, RB:

    

St. Joseph Health System, Series A, 5.75%, 7/01/39

     550        640,381   

Sutter Health, Series B, 5.88%, 8/15/31

     1,200        1,444,944   

California Health Facilities Financing Authority, Refunding RB, St. Joseph’s Health System, Series A, 5.00%, 7/01/37

     1,090        1,235,668   

California Statewide Communities Development Authority, RB, Kaiser Permanente, Series A, 5.00%, 4/01/42

     1,480        1,632,248   

City of Redding California, COP, Refunding, Series A (AGM), 5.00%, 6/01/30

     1,420        1,574,042   

City of San Jose California, Refunding ARB, Series A-1, AMT, 5.75%, 3/01/34

     850        967,580   

County of Orange California Sanitation District, COP, Series B (AGM):

    

5.00%, 2/01/30

     1,500        1,632,720   

5.00%, 2/01/31

     900        973,980   

County of San Joaquin California Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A, 6.00%, 3/01/36

     2,175        2,671,161   

Los Angeles Community College District California, GO, Election of 2001, Series A (AGM), 5.00%, 8/01/32

     1,300        1,432,262   

Mount San Antonio Community College District, GO, Refunding, CAB, Election of 2008, Series A, 0.00%, 8/01/43 (b)

     2,500        1,619,475   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

    

Poway Unified School District, GO, Refunding, CAB, School Facilities Improvement, Election of 2008, Series B, 0.00%, 8/01/36 (a)

   $ 3,750      $ 1,524,975   

Rio Hondo Community College District California, GO, CAB, Election of 2004, Series C, 0.00%, 8/01/38 (a)

     5,000        1,828,450   

San Diego California Unified School District, GO (a):

    

Election of 2008, Series C, 0.00%, 7/01/38

     1,600        585,920   

Election of 2008, Series G, 0.00%, 7/01/34

     650        254,696   

Election of 2008, Series G, 0.00%, 7/01/35

     690        253,713   

Election of 2008, Series G, 0.00%, 7/01/36

     1,035        357,458   

Election of 2008, Series G, 0.00%, 7/01/37

     690        224,719   

San Diego California Unified School District, GO, Refunding, CAB, Series R-1 (a):

    

Election of 2008, 0.00%, 7/01/31

     1,280        672,410   

0.00%, 7/01/30

     5,000        2,755,350   

San Diego Community College District California, GO, CAB, Election of 2006 (a):

    

0.00%, 8/01/31

     2,145        978,635   

0.00%, 8/01/32

     2,680        1,136,508   

San Marcos Unified School District, GO, Election of 2010, Series A:

    

5.00%, 8/01/34

     700        786,303   

5.00%, 8/01/38

     600        665,838   

San Mateo County Community College District, GO, CAB, Election of 2001, Series C (NPFGC), 0.00%, 9/01/30 (a)

     12,740        7,241,416   

State of California, GO, Refunding, Various Purpose:

    

5.00%, 2/01/38

     2,500        2,783,875   

5.00%, 10/01/41

     1,000        1,122,070   

State of California, GO, Various Purpose, 5.00%, 4/01/42

     1,000        1,110,310   

State of California Public Works Board, LRB, Various Judicial Council Projects, Series A, 5.00%, 3/01/38

     710        791,259   

Walnut Valley Unified School District, GO, CAB, Election of 2007, Series B, 0.00%, 8/01/36 (a)

     5,500        2,076,470   

West Basin Municipal Water District California, COP, Refunding, Series B (AGC), 5.00%, 8/01/30

     5,035        5,581,197   
    

 

 

 
        70,342,725   

Colorado — 1.7%

    

Regional Transportation District, COP, Refunding, Series A, 5.38%, 6/01/31

     2,000        2,225,620   

Regional Transportation District, COP, Series A, 5.00%, 6/01/39

     3,465        3,831,147   
    

 

 

 
        6,056,767   

District of Columbia — 1.6%

    

District of Columbia, RB, Series B-1 (NPFGC), 5.00%, 2/01/31

     5,480        5,677,499   

Florida — 9.9%

    

County of Alachua Florida Health Facilities Authority, RB, 5.00%, 12/01/44

     735        801,209   

County of Broward Florida Water & Sewer Utility, Refunding RB, Series A, 5.25%, 10/01/34

     850        958,349   

County of Collier Florida School Board, COP, (AGM), 5.00%, 2/15/16 (b)

     3,000        3,182,340   

County of Duval Florida School Board, COP, Master Lease Program (AGM), 5.00%, 7/01/33

     2,625        2,847,364   

County of Highlands Florida Health Facilities Authority, RB, Adventist Health System/Sunbelt, Series B, 6.00%, 11/15/37

     1,450        1,711,638   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    27


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Florida (concluded)

    

County of Hillsborough Florida Aviation Authority, RB, Series A, AMT (AGC), 5.38%, 10/01/33

   $ 4,050      $ 4,523,485   

County of Lee Florida, Refunding ARB, Series A, AMT:

    

5.63%, 10/01/26

     960        1,123,498   

5.38%, 10/01/32

     3,160        3,506,020   

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1, 5.75%, 7/01/33

     1,400        1,599,640   

County of Miami-Dade Florida, RB, Seaport:

    

Series A, 6.00%, 10/01/38

     2,025        2,446,038   

Series B, AMT, 6.00%, 10/01/30

     640        777,485   

Series B, AMT, 6.25%, 10/01/38

     415        506,736   

Series B, AMT, 6.00%, 10/01/42

     660        775,474   

County of Miami-Dade Florida Aviation, Refunding ARB, AMT:

    

5.00%, 10/01/34

     190        211,175   

Miami International Airport, Series A (AGC), 5.00%, 10/01/40

     3,900        4,037,748   

County of Palm Beach Florida Solid Waste Authority, Refunding RB, 5.00%, 10/01/31

     2,000        2,316,480   

County of Sarasota Florida Public Hospital District, RB, Sarasota Memorial Hospital Project, Series A, 5.63%, 7/01/39

     275        306,966   

Florida Ports Financing Commission, Refunding RB, State Transportation Trust Fund, Series B, AMT:

    

5.13%, 6/01/27

     2,000        2,271,440   

5.38%, 10/01/29

     1,050        1,211,752   

South Florida Water Management District, COP (AGC), 5.00%, 10/01/22

     1,000        1,083,700   
    

 

 

 
               36,198,537   

Georgia — 3.5%

    

County of Burke Georgia Development Authority, Refunding RB, Oglethorpe Power-Vogtle Project, Series C, 5.70%, 1/01/43

     1,150        1,242,000   

Municipal Electric Authority of Georgia, Refunding RB, Series EE (AMBAC), 7.00%, 1/01/25

     7,475        10,331,721   

Private Colleges & Universities Authority, RB, Savannah College of Art & Design:

    

5.00%, 4/01/30

     280        311,536   

5.00%, 4/01/31

     190        210,279   

5.00%, 4/01/33

     140        153,423   

5.00%, 4/01/44

     625        672,600   
    

 

 

 
               12,921,559   

Illinois — 21.8%

    

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien:

    

Series A, 5.75%, 1/01/39

     5,110        5,830,663   

Series B-2, AMT (Syncora), 6.00%, 1/01/29

     1,460        1,466,147   

City of Chicago Illinois, GO, Refunding, Series A:

    

5.25%, 1/01/33

     2,700        2,817,558   

5.00%, 1/01/34

     5,750        5,876,902   

City of Chicago Illinois, GO, Series A, 5.25%, 1/01/35

     400        414,664   

City of Chicago Illinois, Refunding RB, Sales Tax Receipts, Series A, 5.00%, 1/01/41

     3,425        3,623,273   

City of Chicago Illinois Park District, GO, Harbor Facilities Revenue, Series C, 5.25%, 1/01/40

     550        595,331   

City of Chicago Illinois Transit Authority, RB:

    

5.25%, 12/01/49

     900        1,016,541   

Sales Tax Receipts, 5.25%, 12/01/36

     595        673,760   

County of Cook Illinois Forest Preserve District, GO, Refunding, Limited Tax Project, Series B, 5.00%, 12/15/37

     285        313,973   
Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

County of Cook Illinois Forest Preserve District, GO, Series C, 5.00%, 12/15/37

   $ 330      $ 362,390   

Illinois Finance Authority, RB, Carle Foundation, Series A:

    

5.75%, 8/15/34

     650        740,604   

6.00%, 8/15/41

     1,000        1,155,720   

Illinois HDA, RB, Liberty Arms Senior Apartments, M/F Housing, Series D, AMT (AMBAC), 4.88%, 7/01/47

     2,140        2,145,928   

Illinois Municipal Electric Agency, RB, Series A (NPFGC), 5.25%, 2/01/35

     1,000        1,071,790   

Illinois Sports Facilities Authority, RB, State Tax Supported (AMBAC):

    

5.50%, 6/15/15 (b)

     5,130        5,350,641   

5.50%, 6/15/30

     12,490        12,930,148   

Kane McHenry Cook & De Kalb Counties Unit School District No. 300, GO, Refunding, 5.25%, 1/01/33

     9,145        10,321,321   

Metropolitan Pier & Exposition Authority, RB, CAB, McCormick Place Explosion Project, Series A (NPFGC) (a):

    

0.00%, 12/15/26

     5,000        3,131,900   

0.00%, 12/15/33

     9,950        4,264,570   

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project, Series B:

    

CAB (AGM), 0.00%, 6/15/44 (a)

     3,450        839,143   

4.25%, 6/15/42

     2,140        2,146,377   

Railsplitter Tobacco Settlement Authority, RB, 6.00%, 6/01/28

     675        792,059   

Regional Transportation Authority, RB, Series A (AMBAC), 7.20%, 11/01/20

     6,455        7,459,979   

State of Illinois, GO:

    

5.25%, 2/01/33

     830        904,816   

5.50%, 7/01/33

     820        907,387   

5.25%, 2/01/34

     830        902,808   

5.50%, 7/01/38

     445        487,311   

University of Illinois, RB, Auxiliary Facilities System, Series A, 5.00%, 4/01/39

     905        1,010,767   
    

 

 

 
               79,554,471   

Indiana — 1.5%

    

Indiana Finance Authority, RB, Series A:

    

CWA Authority Project, 1st Lien, 5.25%, 10/01/38

     1,100        1,262,316   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/40

     890        937,259   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44

     515        542,347   

Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project, Series A (AGC):

    

5.25%, 1/01/29

     600        672,714   

5.50%, 1/01/38

     1,825        2,056,483   
    

 

 

 
               5,471,119   

Iowa — 3.6%

    

Iowa Finance Authority, RB, Iowa Health Care Facilities, Series A (AGC), 5.63%, 8/15/37

     5,725        6,564,857   

Iowa Student Loan Liquidity Corp., RB, Senior Series A-2, AMT:

    

5.60%, 12/01/26

     2,865        3,120,730   

5.70%, 12/01/27

     1,300        1,416,051   

5.80%, 12/01/29

     880        957,211   

5.85%, 12/01/30

     915        994,285   
    

 

 

 
               13,053,134   

 

See Notes to Financial Statements.

 

                
28    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Louisiana — 0.6%

    

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, East Baton Rouge Sewerage Commission Projects, Sub-Lien, Series A, 5.00%, 2/01/43

   $ 660      $ 735,379   

Louisiana Public Facilities Authority, Refunding RB, Christus Health, Series B (AGC), 6.50%, 7/01/30

     1,250        1,442,875   
    

 

 

 
               2,178,254   

Massachusetts — 3.7%

    

Massachusetts HFA, Refunding RB, Series C, AMT, 5.35%, 12/01/42

     1,150        1,198,323   

Massachusetts School Building Authority, RB, Dedicated Sales Tax, Series A:

    

Senior, 5.00%, 5/15/43

     1,280        1,444,825   

(AGM), 5.00%, 8/15/15 (b)

     7,500        7,786,200   

(AGM), 5.00%, 8/15/30

     85        87,841   

Massachusetts Water Resources Authority, Refunding RB, General, Series A (NPFGC), 5.00%, 8/01/34

     2,700        2,954,691   
    

 

 

 
               13,471,880   

Michigan — 2.3%

    

City of Detroit Michigan Sewage Disposal System, Refunding RB, 2nd Lien, Series E (BHAC), 5.75%, 7/01/31

     2,500        2,798,725   

City of Detroit Michigan Water Supply System, RB, 2nd Lien, Series B (AGM), 6.25%, 7/01/36

     400        439,908   

City of Lansing Michigan, RB, Board of Water & Light Utilities System, Series A, 5.50%, 7/01/41

     1,700        1,994,712   

State of Michigan Building Authority, Refunding RB, Facilities Program:

    

Series I-A, 5.38%, 10/15/36

     145        163,753   

Series I-A, 5.38%, 10/15/41

     700        791,924   

Series II-A (AGM), 5.25%, 10/15/36

     900        1,014,219   

State of Michigan HDA, RB, S/F Housing, Series C, AMT, 5.50%, 12/01/28

     880        939,990   

Western Michigan University, Refunding RB, (AGM), 5.00%, 11/15/39

     380        421,659   
    

 

 

 
               8,564,890   

Minnesota — 0.8%

    

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC), 6.50%, 11/15/38

     2,500        2,939,725   

Nebraska — 1.7%

    

Central Plains Energy Project, RB, Gas Project No. 3:

    

5.00%, 9/01/32

     5,000        5,459,600   

5.25%, 9/01/37

     750        823,575   
    

 

 

 
               6,283,175   

Nevada — 1.6%

    

City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 4/01/34

     850        992,843   

County of Clark Nevada, ARB, Las Vegas-McCarran International Airport, Series A:

    

5.25%, 7/01/42

     500        561,535   

(AGM), 5.25%, 7/01/39

     3,800        4,295,330   

County of Clark Nevada, RB, Southwest Gas Corp. Project, Series A, AMT (NPFGC), 4.75%, 9/01/36

     75        75,848   
    

 

 

 
               5,925,556   

New Jersey — 9.3%

    

New Jersey EDA, RB:

    

Motor Vehicle Surcharge, Series A (NPFGC), 5.25%, 7/01/31

     3,125        3,184,844   
Municipal Bonds   

Par  

(000)

    Value  

New Jersey (concluded)

    

New Jersey EDA, RB (concluded):

    

Motor Vehicle Surcharge, Series A (NPFGC), 5.25%, 7/01/33

   7,800      7,949,370   

Private Activity Bond, The Goethals Bridge Replacement Project, AMT, 5.13%, 1/01/34

     685        748,561   

Private Activity Bond, The Goethals Bridge Replacement Project, AMT, 5.38%, 1/01/43

     895        990,058   

School Facilities Construction (AGC), 6.00%, 12/15/18 (b)

     1,975        2,374,542   

School Facilities Construction (AGC), 6.00%, 12/15/34

     25        28,977   

School Facilities Construction, Series UU, 5.00%, 6/15/34

     570        618,923   

School Facilities Construction, Series UU, 5.00%, 6/15/40

     1,420        1,533,600   

New Jersey Higher Education Student Assistance Authority, Refunding RB, Series 1, AMT:

    

5.50%, 12/01/26

     600        678,534   

5.75%, 12/01/27

     3,870        4,418,263   

New Jersey Housing & Mortgage Finance Agency, Refunding RB, M/F Housing, Series 2, AMT, 4.35%, 11/01/33

     1,230        1,264,317   

New Jersey Transportation Trust Fund Authority, RB:

    

Transportation Program, Series AA, 5.25%, 6/15/33

     1,460        1,637,142   

Transportation Program, Series AA, 5.50%, 6/15/39

     1,150        1,306,113   

Transportation System, CAB, Series A, 0.00%, 12/15/29 (a)

     4,360        2,237,639   

Transportation System, Series A, 5.50%, 6/15/41

     2,000        2,233,280   

Transportation System, Series B, 5.00%, 6/15/42

     2,500        2,650,050   
    

 

 

 
               33,854,213   

New York — 5.4%

    

City of New York New York Municipal Water Finance Authority, Refunding RB, Second General Resolution, Fiscal 2012, Series BB, 5.25%, 6/15/44

     1,425        1,601,002   

City of New York New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-4, 5.50%, 1/15/33

     1,600        1,837,728   

City of New York New York Transitional Finance Authority, RB, Fiscal 2009, Series S-4, 5.50%, 1/15/34

     2,750        3,162,197   

City of New York New York Transitional Finance Authority, Refunding RB, Future Tax Secured, Series B, 5.00%, 11/01/32

     1,480        1,737,402   

County of Erie New York Industrial Development Agency, RB, City School District of Buffalo, Series A (AGM), 5.75%, 5/01/28

     1,500        1,663,815   

Hudson Yards Infrastructure Corp., RB, Senior, Fiscal 2012, Series A, 5.75%, 2/15/47

     700        805,973   

Metropolitan Transportation Authority, RB, Series C, 6.50%, 11/15/28

     4,000        4,849,480   

State of New York Dormitory Authority, ERB, Series B, 5.75%, 3/15/36

     1,200        1,398,408   

State of New York HFA, RB, Affordable M/F Housing, Series B, AMT, 5.30%, 11/01/37

     2,500        2,586,025   
    

 

 

 
               19,642,030   

Ohio — 1.2%

    

County of Lucas Ohio, Refunding RB, Promedica Healthcare, Series A, 6.50%, 11/15/37

     530        654,486   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    29


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Ohio (concluded)

    

State of Ohio Turnpike Commission, RB, CAB, Junior Lien, Infrastructure Projects, Series A-2, 0.00%, 2/15/37 (a)

   $ 10,000      $ 3,749,400   
    

 

 

 
               4,403,886   

Pennsylvania — 1.2%

    

Commonwealth Financing Authority, RB, Series B, 5.00%, 6/01/42

     1,600        1,758,592   

Pennsylvania Turnpike Commission, RB:

    

Series A, 5.00%, 12/01/38

     620        698,988   

Series C, 5.50%, 12/01/33

     555        664,590   

Subordinate, Special Motor License Fund, 6.00%, 12/01/36

     575        682,071   

Philadelphia School District, GO, Series E, 6.00%, 9/01/18 (b)

     100        453,547   
    

 

 

 
               4,257,788   

South Carolina — 6.8%

    

Charleston Educational Excellence Finance Corp., RB (AGC) (b):

    

5.25%, 12/01/15

     2,765        2,915,305   

5.25%, 12/01/15

     1,010        1,064,904   

5.25%, 12/01/15

     3,120        3,289,603   

South Carolina Jobs EDA, Refunding RB, Palmetto Health, Series A (AGM), 6.50%, 8/01/39

     115        134,594   

South Carolina Transportation Infrastructure Bank, RB, Series A, 5.25%, 10/01/40

     3,000        3,400,920   

State of South Carolina Public Service Authority, RB, Santee Cooper:

    

Series A, 5.50%, 12/01/54

     8,725        9,936,902   

Series E, 5.50%, 12/01/53

     745        845,255   

State of South Carolina Public Service Authority, Refunding RB, Santee Cooper:

    

Series A, 5.50%, 1/01/38

     1,000        1,138,800   

Series B, 5.00%, 12/01/38

     2,080        2,322,486   
    

 

 

 
               25,048,769   

Tennessee — 2.1%

    

Memphis Center City Revenue Finance Corp., RB, Pyramid & Pinch District, Series B (AGM), 5.25%, 11/01/30

     1,730        1,990,625   

Metropolitan Government of Nashville & Davidson County Health & Educational Facilities Board, Refunding RB, Vanderbilt University, Series B, 5.50%, 10/01/29

     5,000        5,860,250   
    

 

 

 
               7,850,875   

Texas — 13.6%

    

City of Houston Texas Utility System, Refunding RB, Combined 1st Lien, Series A (AGC):

    

6.00%, 11/15/35

     2,100        2,506,329   

5.38%, 11/15/38

     1,350        1,540,012   

City of San Antonio Texas Public Service Board, RB, Junior Lien, 5.00%, 2/01/38

     575        646,392   

County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A, 0.00%, 9/15/36 (a)

     2,130        804,608   

County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Cook Children’s Medical Center, 5.25%, 12/01/39

     750        866,505   

Dallas-Fort Worth International Airport, ARB, Joint Improvement, AMT:

    

Series D, 5.00%, 11/01/38

     1,975        2,133,336   

Series D, 5.00%, 11/01/42

     1,500        1,609,725   

Series H, 5.00%, 11/01/32

     3,000        3,283,080   

Dallas-Fort Worth International Airport, Refunding ARB, Series F, 5.25%, 11/01/33

     975        1,118,735   
Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

    

Leander Independent School District, GO, CAB, Refunding, Series D, 0.00%, 8/15/38 (a)

   3,420      1,176,446   

Mansfield Texas ISD, GO, School Building (PSF-GTD), 5.00%, 2/15/33

     1,725        1,889,548   

North Texas Tollway Authority, RB, Series B, 0.00%, 9/01/43 (a)

     14,000        2,856,280   

North Texas Tollway Authority, Refunding RB, 1st Tier System:

    

Series A, 6.00%, 1/01/28

     2,795        3,285,019   

Series A (NPFGC), 5.75%, 1/01/40

     1,600        1,785,776   

Series K-1 (AGC), 5.75%, 1/01/38

     3,800        4,353,736   

Series K-2 (AGC), 6.00%, 1/01/38

     4,015        4,648,607   

San Antonio Public Facilities Corp., Refunding RB, Convention Center Refinancing and Expansion Project, CAB (a):

    

0.00%, 9/15/35

     4,990        1,922,447   

0.00%, 9/15/36

     11,525        4,176,660   

0.00%, 9/15/37

     8,245        2,809,896   

Texas Municipal Gas Acquisition & Supply Corp. III, RB:

    

5.00%, 12/15/31

     1,190        1,302,871   

5.00%, 12/15/32

     1,000        1,085,330   

Texas Transportation Commission, Refunding RB, Central Texas Turnpike System, 1st Tier, Series A, 5.00%, 8/15/41

     3,750        4,042,875   
    

 

 

 
               49,844,213   

Washington — 0.8%

    

Central Puget Sound Regional Transit Authority, RB, Series A, 5.00%, 11/01/36

     1,600        1,755,840   

Washington Health Care Facilities Authority, RB, Providence Health & Services, Series A:

    

5.00%, 10/01/39

     525        573,279   

5.25%, 10/01/39

     625        693,819   
    

 

 

 
               3,022,938   

Wisconsin — 0.4%

    

State of Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Credit Group, Series E, 5.00%, 11/15/33

     1,375        1,531,956   
Total Municipal Bonds — 117.8%              430,798,660   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
              

Arizona — 0.8%

    

City of Phoenix Arizona Civic Improvement Corp., Refunding RB, Water System, Junior Lien, Series A, 5.00%, 7/01/34

     1,200        1,351,632   

Salt River Project Agricultural Improvement & Power District, RB, Electric System, Series A, 5.00%, 1/01/38

     1,500        1,640,280   
    

 

 

 
               2,991,912   

California — 2.6%

    

California State University, Refunding RB, Systemwide, Series A (AGM), 5.00%, 11/01/37

     1,999        2,179,946   

County of San Diego California Water Authority, COP, Refunding, Series A (AGM), 5.00%, 5/01/33

     2,810        3,112,412   

Los Angeles Community College District California, GO, Election of 2001, Series A (AGM), 5.00%, 8/01/32

     2,500        2,754,350   

San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/33

     404        467,600   

 

See Notes to Financial Statements.

 

                
30    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

California (concluded)

    

University of California, RB, Series O, 5.75%, 5/15/34

   $ 840      $ 987,753   
    

 

 

 
               9,502,061   

Colorado — 2.3%

    

Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiatives, Series A:

    

5.50%, 7/01/34 (d)

     900        1,032,440   

5.00%, 2/01/41

     7,001        7,561,617   
    

 

 

 
               8,594,057   

District of Columbia — 1.7%

    

District of Columbia, RB, Series A, 5.50%, 12/01/30 (d)

     1,005        1,188,061   

District of Columbia Water & Sewer Authority, Refunding RB, Senior Lien, Series A, 6.00%, 10/01/35 (d)

     1,780        2,128,464   

Metropolitan Washington Airports Authority, Refunding ARB, Series A, AMT, 5.00%, 10/01/30

     2,530        2,870,791   
    

 

 

 
               6,187,316   

Florida — 11.3%

    

City of Tallahassee Florida, RB, Energy System (NPFGC):

    

5.00%, 10/01/32 (d)

     4,000        4,365,920   

5.00%, 10/01/37

     7,500        8,186,100   

County of Miami-Dade Florida, Refunding RB, Transit System Sales Surtax, 5.00%, 7/01/42

     4,480        4,918,771   

County of Miami-Dade Florida School Board, COP, Refunding, Series B (AGC), 5.00%, 5/01/33

     10,000        10,965,600   

County of Miami-Dade Florida Water & Sewer System, RB, (AGM), 5.00%, 10/01/39

     4,621        5,234,500   

County of Orange Florida School Board, COP, Series A:

    

(NPFGC), 5.00%, 8/01/31

     2,000        2,117,400   

(AGC), 5.50%, 8/01/34

     3,544        3,992,071   

State of Florida Board of Education, GO, Series D, 5.00%, 6/01/37 (d)

     1,349        1,484,427   
    

 

 

 
               41,264,789   

Illinois — 3.2%

    

City of Chicago Illinois, RB, Motor Fuel Tax Project, Series A (AGC), 5.00%, 1/01/38

     2,000        2,157,900   

Metropolitan Pier & Exposition Authority, RB, McCormick Place Expansion Project, Series A, 5.00%, 6/15/42

     270        291,168   

State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/34 (d)

     4,399        4,953,075   

State of Illinois Toll Highway Authority, RB:

    

Senior Priority, Series B, 5.50%, 1/01/33

     1,880        2,085,440   

Series A, 5.00%, 1/01/38

     2,138        2,388,788   
    

 

 

 
               11,876,371   

Louisiana — 1.6%

    

State of Louisiana Gas & Fuels, RB, Series A (AGM), 5.00%, 5/01/36 (b)

     5,400        5,778,756   

Michigan — 2.3%

    

Michigan Finance Authority, RB, Hospital, Trinity Health Credit Group, 5.00%, 12/01/39

     7,550        8,264,759   

Nevada — 3.2%

    

City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 4/01/39 (d)

     3,778        4,400,699   

County of Clark Nevada Water Reclamation District, GO, Series B:

    

Limited Tax, 5.75%, 7/01/34

     1,829        2,163,204   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

Nevada (concluded)

    

County of Clark Nevada Water Reclamation District, GO, Series B (concluded):

    

5.50%, 7/01/29

   4,499      5,280,274   
    

 

 

 
               11,844,177   

New Jersey — 0.6%

    

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series B, 5.25%, 6/15/36 (d)

     1,840        2,037,231   

New York — 4.9%

    

City of New York New York Municipal Water Finance Authority, RB, Water & Sewer System, Fiscal 2009, Series A, 5.75%, 6/15/40

     1,260        1,450,535   

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Fiscal 2013, Series CC, 5.00%, 6/15/47

     5,680        6,327,477   

City of New York New York Water & Sewer System, Refunding RB, 2nd General Resolution, Fiscal 2014, Series DD, 5.00%, 6/15/35

     1,665        1,932,416   

Metropolitan Transportation Authority of New York, RB, Sub-Series D1, 5.25%, 11/15/44

     3,470        3,958,160   

Port Authority of New York & New Jersey, Refunding RB, Construction, 143rd Series, AMT, 5.00%, 10/01/30

     2,500        2,582,175   

Triborough Bridge & Tunnel Authority, RB, General, Series A-2, 5.25%, 11/15/34 (d)

     1,300        1,485,965   
    

 

 

 
               17,736,728   

Ohio — 0.2%

    

State of Ohio, RB, Cleveland Clinic Health Obligated Group, Series B, 5.50%, 1/01/34

     580        660,255   

South Carolina — 0.4%

    

State of South Carolina Public Service Authority, Refunding RB, Santee Cooper, Series A, 5.50%, 1/01/38 (d)

     1,275        1,451,970   

Texas — 1.1%

    

Clear Creek ISD Texas, GO, Refunding, School Building (PSF-GTD), 5.00%, 2/15/33

     2,200        2,380,026   

North East Texas ISD, GO, School Building, Series A (PSF-GTD), 5.00%, 8/01/37 (d)

     1,600        1,747,744   
    

 

 

 
               4,127,770   

Utah — 1.5%

    

Utah Transit Authority, RB, Series A (AGM), 5.00%, 16/15/36

     5,000        5,574,850   

Virginia — 0.1%

    

County of Fairfax Virginia IDA, Refunding RB, Health Care, Inova Health System, Series A, 5.50%, 5/15/35

     350        397,257   

Washington — 1.2%

    

Central Puget Sound Regional Transit Authority, RB, Series A (AGM), 5.00%, 11/01/32

     4,004        4,401,690   

Wisconsin — 1.0%

    

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health, Inc., Obligated Group:

    

Series A, 5.00%, 4/01/42

     1,980        2,178,000   

Series C, 5.25%, 4/01/39 (d)

     1,430        1,572,196   
    

 

 

 
               3,750,196   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 40.0%
        146,442,145   
Total Long-Term Investments
(Cost — $521,702,588) — 157.8%
        577,240,805   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    31


Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Short-Term Securities    Shares     Value  

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

     1,054,647      $ 1,054,647   
Total Short-Term Securities
(Cost — $1,054,647) — 0.3%
             1,054,647   
Total Investments (Cost — $522,757,235) — 158.1%        578,295,452   
Other Assets Less Liabilities — 1.4%        5,034,386   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (20.5)%

   

    (75,136,052
VRDP Shares, at Liquidation Value — (39.0)%        (142,500,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 365,693,786   
    

 

 

 

 

Notes to Schedule of Investments

 

(a)   Zero-coupon bond.

 

(b)   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.

 

(c)   Represent bonds transferred to a TOB. In exchange for which the Fund received cash and residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(d)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreement, which expires from February 1, 2016 to December 1, 2029 is $14,901,749

 

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

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at October 31,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       3,108,476           (2,053,829        1,054,647         $ 645   

 

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

 

Ÿ  

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

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Appreciation
 
  (219   10-Year U.S. Treasury Note   Chicago Board of Trade   December 2014   $ 27,672,703      $ 229,685   

 

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 statement purposes. 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. 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. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Fund 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 Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’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. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.

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

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 577,240,805              $ 577,240,805   

Short-Term Securities

  $ 1,054,647                          1,054,647   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 1,054,647         $ 577,240,805              $ 578,295,452   
 

 

 

      

 

 

      

 

    

 

 

 

1    See above Schedule of Investments for values in each state or political subdivision.

       

 

See Notes to Financial Statements.

 

                
32    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (concluded)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments2                 

Assets:

                

Interest rate contracts

  $ 229,685                        $ 229,685   

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

       

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of October 31, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 276,000                        $ 276,000   

Liabilities:

                

TOB trust certificates

            $ (75,113,873             (75,113,873

VRDP Shares

              (142,500,000             (142,500,000
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 276,000         $ (217,613,873           $ (217,337,873
 

 

 

      

 

 

      

 

    

 

 

 

There were no transfers between levels during the six months ended October 31, 2014.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    33


Schedule of Investments October 31, 2014 (Unaudited)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Alabama — 3.7%

    

County of Jefferson Alabama, RB, Limited Obligation School, Series A, 5.00%, 1/01/24

   $ 4,550      $ 4,571,385   

County of Jefferson Alabama Sewer, Refunding RB:

    

Senior Lien, Series A (AGM), 5.00%, 10/01/44

     570        614,762   

Senior Lien, Series A (AGM), 5.25%, 10/01/48

     1,090        1,189,354   

Sub-Lien, Series D, 6.00%, 10/01/42

     1,000        1,088,860   

Sub-Lien, Series D, 7.00%, 10/01/51

     1,545        1,812,300   
    

 

 

 
               9,276,661   

Alaska — 0.5%

    

Northern Tobacco Securitization Corp., Refunding RB, Tobacco Settlement, Asset-Backed, Series A, 5.00%, 6/01/46

     1,660        1,241,431   

Arizona — 2.7%

    

City of Show Low Arizona, Special Assessment Bonds, Improvement District No. 5, 6.38%, 1/01/15

     40        40,280   

County of Maricopa Arizona IDA, RB, Arizona Charter Schools Project, Series A, 6.75%, 7/01/29

     1,800        1,708,434   

Salt Verde Financial Corp., RB, Senior:

    

5.00%, 12/01/32

     2,000        2,283,480   

5.00%, 12/01/37

     2,360        2,667,367   
    

 

 

 
               6,699,561   

California — 13.2%

    

California Health Facilities Financing Authority, RB:

    

St. Joseph Health System, Series A, 5.75%, 7/01/39

     1,530        1,781,425   

Sutter Health, Series B, 6.00%, 8/15/42

     2,200        2,659,976   

California Health Facilities Financing Authority, Refunding RB, St. Joseph Health System, Series A, 5.00%, 7/01/33

     875        1,005,489   

California Municipal Finance Authority, RB, Senior, Caritas Affordable Housing, Inc. Projects, S/F, Series A:

    

5.25%, 8/15/39

     105        115,539   

5.25%, 8/15/49

     265        289,682   

California Pollution Control Financing Authority, RB (a):

    

County of San Diego California Water Authority Desalination Project Pipeline, 5.00%, 11/21/45

     865        892,239   

Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 7/01/37

     710        758,138   

Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 11/21/45

     1,025        1,089,965   

California Statewide Communities Development Authority, RB, John Muir Health, Series A, 5.13%, 7/01/39

     1,510        1,692,000   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A, 5.25%, 5/15/39

     555        634,526   

City of Stockton California Public Financing Authority, RB, Delta Water Supply Project, Series A, 6.25%, 10/01/38

     255        300,599   

Montebello Unified School District, GO, CAB (NPFGC), 0.00%, 8/01/22 (b)

     2,405        1,949,685   

San Diego Unified School District California, GO, CAB, Election of 2008, Series A, 0.00%, 7/01/29 (b)

     3,475        2,059,146   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

    

Sequoia Union High School District, GO, Refunding, Election of 2004, Series B (AGM), 5.50%, 7/01/16 (c)

   $ 3,490      $ 3,791,466   

State of California, GO, Various Purposes, 6.50%, 4/01/33

     8,370        10,240,276   

State of California Public Works Board, LRB, Various Capital Project:

    

Series I, 5.00%, 11/01/38

     550        617,287   

Sub-Series I-1, 6.38%, 11/01/34

     820        1,012,610   

Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement, Asset-Backed, Senior Series A-1, 4.75%, 6/01/25

     2,040        2,013,888   
    

 

 

 
               32,903,936   

Colorado — 2.7%

    

Colorado Educational & Cultural Facilities Authority, RB, Charter School, Colorado Springs, 5.50%, 7/01/40

     1,455        1,566,133   

Colorado Health Facilities Authority, Refunding RB, Evangelical Lutheran Good Samaritan Society Project, 5.00%, 12/01/42

     1,230        1,308,080   

Regional Transportation District, COP, Refunding, Series A, 5.38%, 6/01/31

     710        790,095   

Regional Transportation District, RB, Denver Transit Partners Eagle P3 Project, 6.00%, 1/15/34

     1,425        1,603,795   

University of Colorado, RB, Series A, 5.38%, 6/01/38

     1,250        1,446,238   
    

 

 

 
               6,714,341   

Connecticut — 1.1%

    

Connecticut State Health & Educational Facility Authority, Refunding RB, Wesleyan University, Series G, 5.00%, 7/01/35

     2,515        2,865,189   

Delaware — 1.4%

    

County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Power LLC Project, 6.00%, 10/01/40

     790        898,712   

Delaware State EDA, RB, Exempt Facilities, Indian River Power LLC Project, 5.38%, 10/01/45

     2,430        2,599,128   
    

 

 

 
               3,497,840   

District of Columbia — 3.6%

    

District of Columbia, Tax Allocation Bonds, City Market at O Street Project, 5.13%, 6/01/41

     1,520        1,623,056   

Metropolitan Washington Airports Authority, Refunding RB:

    

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/35 (b)

     13,485        5,167,182   

Dulles Toll Road, 1st Senior Lien, Series A, 5.00%, 10/01/39

     505        544,132   

Dulles Toll Road, 1st Senior Lien, Series A, 5.25%, 10/01/44

     1,470        1,608,151   
    

 

 

 
               8,942,521   

Florida — 5.5%

    

City of Clearwater Florida Water & Sewer Revenue, RB, Series A, 5.25%, 12/01/39

     2,375        2,702,940   

County of Broward Florida Water & Sewer Utility, Refunding RB, Series A, 5.25%, 10/01/34

     750        845,602   

County of Hillsborough Florida IDA, RB, National Gypsum Co., Series B, AMT, 7.13%, 4/01/30

     1,900        1,902,451   

County of Miami-Dade Florida, RB, CAB, Series A (NPFGC), 0.00%, 10/01/37 (b)

     910        279,443   

 

See Notes to Financial Statements.

 

                
34    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Florida (concluded)

    

County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport, Series A-1, 5.38%, 10/01/41

   $ 2,620      $ 2,988,948   

County of Tampa-Hillsborough Florida Expressway Authority, Refunding RB, Series A, 5.00%, 7/01/37

     450        495,662   

Mid-Bay Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/40

     2,095        2,550,830   

Palm Coast Park Community Development District, Special Assessment Bonds, 5.70%, 5/01/37

     620        434,893   

Village Community Development District No. 10, Special Assessment Bonds, 5.13%, 5/01/43

     1,525        1,548,226   
    

 

 

 
               13,748,995   

Georgia — 1.4%

    

DeKalb Private Hospital Authority, Refunding RB, Children’s Healthcare, 5.25%, 11/15/39

     585        668,234   

Metropolitan Atlanta Rapid Transit Authority, RB, Sales Tax, 3rd Indenture, Series A, 5.00%, 7/01/39

     2,410        2,722,529   
    

 

 

 
               3,390,763   

Hawaii — 0.4%

    

State of Hawaii Harbor System, RB, Series A, 5.25%, 7/01/30

     945        1,061,811   

Illinois — 17.7%

    

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien:

    

Series A, 5.75%, 1/01/39

     2,000        2,282,060   

Series C, 6.50%, 1/01/41

     4,055        4,932,461   

City of Chicago Illinois, GO, Project, 5.00%, 1/01/34

     2,230        2,270,162   

City of Chicago Illinois, GO, Refunding, Series A:

    

Project, 5.25%, 1/01/32

     2,195        2,300,601   

5.00%, 1/01/35

     2,000        2,036,680   

City of Chicago Illinois, Refunding RB, Sales Tax, Series A, 5.25%, 1/01/38

     570        621,026   

City of Chicago Illinois, Special Assessment Bonds, Lake Shore East, 6.75%, 12/01/32

     900        903,816   

City of Chicago Illinois Board of Education, GO, Series A, 5.25%, 12/01/41

     3,210        3,311,308   

City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/40

     730        819,242   

City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien Project, 5.00%, 11/01/42

     1,000        1,082,120   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38

     560        645,075   

Illinois Finance Authority, Refunding RB, Central Dupage Health, Series B, 5.50%, 11/01/39

     1,115        1,262,336   

Illinois State Toll Highway Authority, RB:

    

Senior, Series C, 5.00%, 1/01/36 (d)

     2,340        2,644,411   

Senior, Series C, 5.00%, 1/01/37 (d)

     2,000        2,251,040   

Series A, 5.00%, 1/01/38

     1,610        1,798,354   

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project:

    

CAB, Series B (AGM), 0.00%, 6/15/47 (b)

     13,220        2,742,489   

Series B (AGM), 5.00%, 6/15/50

     3,070        3,236,425   

Series B-2, 5.00%, 6/15/50

     1,740        1,828,549   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     315        368,456   

6.00%, 6/01/28

     800        938,736   

State of Illinois, GO:

    

5.00%, 2/01/39

     1,100        1,160,764   

Series A, 5.00%, 4/01/38

     2,625        2,766,802   
Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/34

   440      495,458   

University of Illinois, RB, Auxiliary Facilities System, Series A:

    

5.00%, 4/01/39

     580        647,785   

5.00%, 4/01/44

     705        780,844   
    

 

 

 
               44,127,000   

Indiana — 4.1%

    

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT:

    

6.75%, 1/01/34

     560        638,607   

7.00%, 1/01/44

     1,355        1,547,925   

Indiana Finance Authority, RB, Series A:

    

CWA Authority Project, 1st Lien, 5.25%, 10/01/38

     2,275        2,610,699   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44

     310        326,461   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/48

     1,030        1,082,407   

Sisters of St. Francis Health Services, 5.25%, 11/01/39

     585        648,560   

Indiana Finance Authority, Refunding RB, Parkview Health System, Series A, 5.75%, 5/01/31

     1,300        1,470,482   

Indiana Municipal Power Agency, RB, Series B, 6.00%, 1/01/39

     775        888,282   

Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 1/15/40

     880        981,367   
    

 

 

 
               10,194,790   

Iowa — 2.1%

    

Iowa Finance Authority, Refunding RB, Midwestern Disaster Area, Iowa Fertilizer Co. Project:

    

5.00%, 12/01/19

     665        710,393   

5.50%, 12/01/22

     1,630        1,727,066   

5.25%, 12/01/25

     320        344,394   

Iowa Student Loan Liquidity Corp., Refunding RB, Student Loan, Senior Series A-1, AMT, 5.15%, 12/01/22

     1,020        1,107,343   

Iowa Tobacco Settlement Authority, Refunding RB, Asset-Backed, Series C, 5.63%, 6/01/46

     1,730        1,455,241   
    

 

 

 
               5,344,437   

Kansas — 0.7%

    

Kansas Development Finance Authority, Refunding RB, Adventist Health, Series C, 5.75%, 11/15/38

     1,520        1,745,522   

Kentucky — 0.6%

    

Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     705        795,684   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 0.00%, 7/01/43 (e)

     865        588,053   
    

 

 

 
               1,383,737   

Louisiana — 3.4%

    

East Baton Rouge Sewerage Commission, RB, Series A, 5.25%, 2/01/39

     570        639,939   

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, 6.75%, 11/01/32

     3,500        3,918,740   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    35


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Louisiana (concluded)

    

New Orleans Aviation Board, RB, Passenger Facility Charge, Series A, 5.25%, 1/01/41

   $ 430      $ 458,561   

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A:

    

5.50%, 5/15/30

     700        767,011   

5.25%, 5/15/31

     600        651,750   

5.25%, 5/15/32

     765        836,688   

5.25%, 5/15/33

     830        904,260   

5.25%, 5/15/35

     350        383,684   
    

 

 

 
               8,560,633   

Maine — 0.1%

    

Maine Health & Higher Educational Facilities Authority, RB, Series A, 5.00%, 7/01/39

     210        224,190   

Maryland — 1.2%

    

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

     300        323,382   

Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 9/01/25

     820        906,748   

Maryland Health & Higher Educational Facilities Authority, Refunding RB, Charlestown Community Project, 6.25%, 1/01/41

     1,520        1,692,003   
    

 

 

 
               2,922,133   

Massachusetts — 2.5%

    

Massachusetts Development Finance Agency, Refunding RB:

    

Boston University, Series P, 5.45%, 5/15/59

     1,165        1,372,510   

Covanta Energy Project, Series C, AMT, 5.25%, 11/01/42 (a)

     1,575        1,618,029   

Massachusetts Health & Educational Facilities Authority, Refunding RB, Partners Healthcare System, Series J1, 5.00%, 7/01/39

     255        287,222   

Massachusetts HFA, RB, M/F Housing, Series A, AMT, 5.25%, 12/01/48

     2,900        2,911,455   
    

 

 

 
               6,189,216   

Michigan — 2.9%

    

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 7/01/39

     3,085        3,311,994   

Kalamazoo Hospital Finance Authority, Refunding RB, Bronson Methodist Hospital, 5.50%, 5/15/36

     955        1,056,478   

Michigan Finance Authority, Refunding RB, Detroit Water and Sewage Department, Project, Senior Lien C-1, 5.00%, 7/01/44

     630        661,866   

State of Michigan Hospital Finance Authority, Refunding RB, Henry Ford Health, 5.75%, 11/15/39

     2,105        2,337,413   
    

 

 

 
               7,367,751   

Minnesota — 1.0%

    

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series A, 6.75%, 11/15/32

     2,135        2,522,972   

Mississippi — 0.3%

    

University of Southern Mississippi, RB, Campus Facilities Improvements Project, 5.38%, 9/01/36

     675        761,602   

Missouri — 0.2%

    

Bi-State Development Agency of the Missouri-Illinois Metropolitan District, Refunding RB, Combined Lien, Series A, 5.00%, 10/01/44

     175        195,056   
Municipal Bonds   

Par  

(000)

    Value  

Missouri (concluded)

    

State of Missouri Health & Educational Facilities Authority, Refunding RB, St. Louis College of Pharmacy Project, 5.50%, 5/01/43

   175      192,040   
    

 

 

 
               387,096   

Nebraska — 0.2%

    

Central Plains Energy Project Nebraska, RB, Gas Project No. 3, 5.25%, 9/01/37

     575        631,407   

New Hampshire — 1.4%

    

New Hampshire Health & Education Facilities Authority, Refunding RB, Dartmouth-Hitchcock, 6.00%, 8/01/38

     3,035        3,518,172   

New Jersey — 4.9%

    

New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT:

    

5.13%, 9/15/23

     1,410        1,511,957   

5.25%, 9/15/29

     1,365        1,446,846   

New Jersey EDA, Refunding, Special Assessment Bonds, Kapkowski Road Landfill Project, 5.75%, 4/01/31

     1,550        1,784,856   

New Jersey State Turnpike Authority, RB, Series A, 5.00%, 1/01/43

     1,925        2,123,044   

New Jersey Transportation Trust Fund Authority, RB, Transportation System:

    

Series A, 5.50%, 6/15/41

     1,575        1,758,708   

Series B, 5.25%, 6/15/36

     1,705        1,887,367   

Rutgers — The State University of New Jersey, Refunding RB, Series L, 5.00%, 5/01/43

     365        411,530   

Tobacco Settlement Financing Corp. New Jersey, Refunding RB, Series 1A, 4.50%, 6/01/23

     1,215        1,201,246   
    

 

 

 
               12,125,554   

New York — 8.0%

    

City of New York New York Industrial Development Agency, ARB, British Airways PLC Project, AMT, 7.63%, 12/01/32

     1,500        1,508,175   

City of New York New York Transitional Finance Authority, RB, Future Tax Secured Bonds, Fiscal 2012, Sub-Series E-1, 5.00%, 2/01/42

     1,560        1,736,062   

County of Dutchess New York Industrial Development Agency, Refunding RB, 5.00%, 8/01/46

     3,800        3,826,866   

County of Westchester New York Healthcare Corp., RB, Senior Lien, Series A, 5.00%, 11/01/44

     264        292,422   

Long Island Power Authority, Refunding RB, Electric System, Series A, 5.75%, 4/01/39

     1,450        1,652,072   

Metropolitan Transportation Authority, RB, Series B, 5.25%, 11/15/38

     1,715        1,970,089   

Metropolitan Transportation Authority, Refunding RB, Dedicated Tax Fund, Series B, 5.00%, 11/15/34

     1,740        1,966,966   

New York Liberty Development Corp., Refunding RB:

    

2nd Priority, Bank of America Tower at One Bryant Park Project, Class 3, 6.38%, 7/15/49

     850        962,293   

3 World Trade Center Project, Class 1, 5.00%, 11/15/44 (a)(d)

     3,000        3,014,040   

3 World Trade Center Project, Class 2, 5.15%, 11/15/34 (a)(d)

     245        248,815   

3 World Trade Center Project, Class 2, 5.38%, 11/15/40 (a)(d)

     605        619,078   

Port Authority of New York & New Jersey, ARB, Special Project, JFK International Air Terminal LLC Project, Series 8:

    

6.00%, 12/01/36

     900        1,048,545   

6.00%, 12/01/42

     875        1,014,151   
    

 

 

 
               19,859,574   

 

See Notes to Financial Statements.

 

                
36    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

North Carolina — 0.6%

    

North Carolina Medical Care Commission, RB, Health Care Facilities, Duke University Health System, Series A, 5.00%, 6/01/42

   $ 970      $ 1,092,220   

North Carolina Medical Care Commission, Refunding RB, 1st Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 3/01/41

     415        468,817   
    

 

 

 
               1,561,037   

Ohio — 0.2%

    

County of Franklin Ohio, RB, Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 7/01/40

     470        519,026   

Oklahoma — 0.3%

    

County of Epworth Oklahoma Finance Authority, Refunding RB, Epworth Villa Project, Series A, 5.13%, 4/01/42

     975        799,061   

Pennsylvania — 3.8%

    

City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 7/01/42

     885        932,471   

City of Philadelphia Pennsylvania IDA, RB:

    

Arbor House, Inc. Project, Series E, 6.10%, 7/01/33

     1,065        1,073,967   

Retirement Facilities, Saligman House Project, Section 8, Series C (HUD), 6.10%, 7/01/33

     1,210        1,220,188   

Pennsylvania Economic Development Financing Authority, RB:

    

American Water Co. Project, 6.20%, 4/01/39

     2,520        2,946,082   

National Gypsum Co., Series B, AMT, 6.13%, 11/01/27

     2,500        2,501,325   

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

     795        886,258   
    

 

 

 
               9,560,291   

South Carolina — 2.3%

    

South Carolina State Ports Authority, RB, 5.25%, 7/01/40

     2,285        2,507,285   

State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54

     2,790        3,177,531   
    

 

 

 
               5,684,816   

Tennessee — 2.0%

    

City of Chattanooga Tennessee Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     980        1,106,057   

County of Hardeman Tennessee Correctional Facilities Corp., RB, 7.75%, 8/01/17

     1,460        1,459,723   

County of Shelby Health Educational & Housing Facilities Board, Refunding RB, St. Jude’s Childrens Research Hospital, 5.00%, 7/01/31

     2,250        2,374,132   
    

 

 

 
               4,939,912   

Texas — 8.5%

    

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/46

     1,480        1,723,519   

Sub-Lien, 5.00%, 1/01/33

     250        268,158   

City of Austin Texas Electric Utility Revenue, Refunding RB, Series A, 5.00%, 11/15/37

     1,500        1,691,160   

City of Dallas Texas Waterworks & Sewer System, Refunding RB, 5.00%, 10/01/35

     1,050        1,205,337   
Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

    

City of Houston Texas Airport System, Refunding ARB, Senior Lien, Series A, 5.50%, 7/01/39

   1,070      1,211,486   

County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B, 7.00%, 1/01/48

     325        373,994   

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/18 (c)

     1,910        2,389,754   

La Vernia Higher Education Finance Corp., RB, Kipp, Inc., Series A, 6.38%, 8/15/44

     450        508,252   

North Texas Tollway Authority, RB, CAB, Special Project System, Series B, 0.00%, 9/01/37 (b)

     1,400        458,150   

North Texas Tollway Authority, Refunding RB, 2nd Tier System, Series F, 6.13%, 1/01/31

     4,190        4,408,173   

San Antonio Energy Acquisition Public Facility Corp., RB, Gas Supply:

    

5.50%, 8/01/24

     1,100        1,317,547   

5.50%, 8/01/25

     1,120        1,349,298   

Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien:

    

LBJ Infrastructure Group LLC, LBJ Freeway Managed Lanes Project, 7.00%, 6/30/40

     2,000        2,412,200   

NTE Mobility Partners LLC, North Tarrant Express Managed Lanes Project, 6.88%, 12/31/39

     1,700        2,012,766   
    

 

 

 
               21,329,794   

Vermont — 0.1%

    

Vermont Educational & Health Buildings Financing Agency, RB, Developmental & Mental Health, Series A, 6.00%, 6/15/17

     375        379,890   

Virginia — 2.7%

    

County of Fairfax Virginia EDA, Refunding RB, Goodwin House, Inc., 5.13%, 10/01/42

     1,000        1,033,710   

County of Hanover Virginia EDA, Refunding RB, Covenant Woods, Series A:

    

5.00%, 7/01/42

     625        635,706   

Residential Care Facility, 5.00%, 7/01/47

     970        985,763   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT:

    

5.25%, 1/01/32

     550        599,753   

6.00%, 1/01/37

     3,180        3,610,763   
    

 

 

 
               6,865,695   

Washington — 0.8%

    

Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 1/01/45

     1,625        1,899,024   

Wisconsin — 3.1%

    

State of Wisconsin, Refunding RB, Series A, 6.00%, 5/01/36

     4,980        5,907,973   

State of Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Credit Group, Series E, 5.00%, 11/15/33

     1,710        1,905,197   
    

 

 

 
               7,813,170   

Wyoming — 0.1%

    

Wyoming Municipal Power Agency, Inc., RB, Series A, 5.00%, 1/01/42

     210        219,616   
Total Municipal Bonds — 112.0%              279,780,167   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    37


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
  

Par  

(000)

    Value  

California — 7.9%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/19 (c)

   $ 2,270      $ 2,720,204   

California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/39 (g)

     1,845        2,086,898   

City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/39

     6,600        7,550,004   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Senior Series A, 5.00%, 5/15/40

     4,122        4,690,161   

Los Angeles Community College District California, GO, Election of 2001, Series A (AGM), 5.00%, 8/01/32

     1,620        1,784,819   

San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/33

     748        865,926   
    

 

 

 
               19,698,012   

Colorado — 2.5%

    

Colorado Health Facilities Authority, RB, Catholic Health (AGM):

    

Series C-3, 5.10%, 10/01/41

     2,580        2,739,960   

Series C-7, 5.00%, 9/01/36

     1,650        1,754,923   

Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiatives, Series A, 5.50%, 7/01/34 (g)

     1,490        1,709,261   
    

 

 

 
               6,204,144   

Connecticut — 2.8%

    

Connecticut State Health & Educational Facility Authority, RB, Yale University:

    

Series T-1, 4.70%, 7/01/29

     3,179        3,457,727   

Series X-3, 4.85%, 7/01/37

     3,262        3,538,727   
    

 

 

 
               6,996,454   

Florida — 1.8%

    

County of Miami-Dade Florida, RB, Water & Sewer System, 5.00%, 10/01/34

     3,939        4,470,899   

Georgia — 1.0%

    

Private Colleges & Universities Authority, Refunding RB, Emory University, Series C, 5.00%, 9/01/38

     2,259        2,516,409   

Massachusetts — 2.1%

    

Massachusetts School Building Authority, RB, Senior, Series B, 5.00%, 10/15/41

     4,502        5,126,631   

New Hampshire — 0.6%

    

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/39 (g)

     1,409        1,614,845   

New York — 6.5%

    

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Series FF-2, 5.50%, 6/15/40

     1,110        1,282,353   

Hudson Yards Infrastructure Corp., RB, Fiscal 2012, Series A, 5.75%, 2/15/47 (g)

     1,110        1,277,940   

New York Liberty Development Corp., RB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43

     7,440        8,500,944   

New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51 (g)

     4,460        5,189,968   
    

 

 

 
               16,251,205   
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
  

Par  

(000)

    Value  

North Carolina — 0.5%

    

North Carolina Capital Facilities Finance Agency, Refunding RB, Wake Forest University, 5.00%, 1/01/38

   1,080      1,208,876   

Ohio — 4.4%

    

State of Ohio, Refunding RB, Cleveland Clinic Health System Obligated Group, Series A, 5.50%, 1/01/39

     9,644        10,874,892   

Texas — 4.8%

    

City of San Antonio Texas Public Service Board, RB, Electric & Gas Systems, Junior Lien, 5.00%, 2/01/43

     1,720        1,917,748   

County of Harris Texas, RB, Senior Lien, Toll Road, Series A, 5.00%, 8/15/38 (g)

     4,624        5,188,418   

County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/41

     2,350        2,656,017   

University of Texas, Refunding RB, Financing System, Series B, 5.00%, 8/15/43

     2,040        2,318,871   
    

 

 

 
               12,081,054   

Utah — 1.1%

    

City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 8/15/41

     2,518        2,763,900   

Virginia — 2.6%

    

University of Virginia, Refunding RB, General, 5.00%, 6/01/40

     3,749        4,176,555   

Virginia Small Business Financing Authority, Refunding RB, Sentara Healthcare, 5.00%, 11/01/40

     2,095        2,301,041   
    

 

 

 
               6,477,596   

Washington — 0.8%

    

Central Puget Sound Regional Transit Authority, RB, Series A (AGM), 5.00%, 11/01/32

     1,860        2,044,231   

Wisconsin — 1.7%

    

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health Inc., Obligated Group, Series C, 5.25%, 4/01/39 (g)

     3,959        4,353,775   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 41.1%
        102,682,923   
Total Long-Term Investments
(Cost — $342,960,086) — 153.1%
        382,463,090   
    
   
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.03% (h)(i)

     12,102,187        12,102,187   
Total Short-Term Securities
(Cost — $12,102,187) — 4.9%
             12,102,187   
Total Investments (Cost — $355,062,273) — 158.0%        394,565,277   
Liabilities in Excess of Other Assets — (1.8)%        (4,358,760

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (22.7)%

   

    (56,796,341
VMTP Shares, at Liquidation Value — (33.5)%        (83,700,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 249,710,176   
    

 

 

 

 

See Notes to Financial Statements.

 

                
38    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)    BlackRock MuniHoldings Fund, Inc. (MHD)

 

 

Notes to Schedule of Investments

 

(a)   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.

 

(b)   Zero-coupon bond.

 

(c)   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.

 

(d)   When-issued security. Unsettled when-issued transactions were as follows:

 

Counterparty   Value        Unrealized
Appreciation/
(Depreciation)
 

Citigroup Global Markets, Inc.

  $ 356,661         $ 2,992   

Goldman Sachs & Co.

  $ 3,525,272         $ 30,272   

Morgan Stanley & Co. LLC

  $ 4,895,451         $ (11,628

 

(e)   Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown is as of report date.

 

(f)   Represent bonds transferred to a TOB. In exchange for which the Fund received cash and residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(g)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreement, which expire from October 1, 2016 to February 15, 2031 is $11,665,091.

 

(h)   Investments in issuers considered to be an affiliate of the Fund during the six months period ended October 31, 2014, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at October 31,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       804,766           11,297,421           12,102,187         $ 737   

 

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

 

Ÿ  

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

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Appreciation
 
  (184   10-Year U.S. Treasury Note   Chicago Board of Trade   December 2014   $ 23,250,125      $ 60,534   

 

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 statement purposes. 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. 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. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Fund 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 Fund’s own assumptions used in determining the fair value of investments)

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’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. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.

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

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 382,463,090              $ 382,463,090   

Short-Term Securities

  $ 12,102,187                          12,102,187   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 12,102,187         $ 382,463,090              $ 394,565,277   
 

 

 

      

 

 

      

 

    

 

 

 

1   See above Schedule of Investments for values in each state or political subdivision.

      

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    39


Schedule of Investments (concluded)    BlackRock MuniHoldings Fund, Inc. (MHD)

 

     Level 1        Level 2        Level 3        Total  
Derivative Financial Instruments2                 

Assets:

                

Interest rate contracts

  $ 60,534                             $ 60,534   

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

      

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of October 31, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 232,000                             $ 232,000   

Liabilities:

                

TOB trust certificates

            $ (56,783,700                  (56,783,700

VMTP Shares

              (83,700,000                  (83,700,000
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 232,000         $ (140,483,700                $ (140,251,700
 

 

 

      

 

 

      

 

 

      

 

 

 

There were no transfers between levels during the six months ended October 31, 2014.

 

See Notes to Financial Statements.

 

                
40    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments October 31, 2014 (Unaudited)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 3.0%

    

County of Jefferson Alabama, RB, Limited Obligation School, Series A, 5.00%, 1/01/24

   $ 3,450      $ 3,466,215   

County of Jefferson Alabama Sewer, Refunding RB, Sub-Lien, Series D, 6.00%, 10/01/42

     1,875        2,041,612   
    

 

 

 
               5,507,827   

Alaska — 0.7%

    

Northern Tobacco Securitization Corp., Refunding RB, Tobacco Settlement, Asset-Backed, Series A, 5.00%, 6/01/46

     1,660        1,241,431   

Arizona — 0.0%

    

City of Show Low Arizona, Special Assessment Bonds, Improvement District No. 5, 6.38%, 1/01/15

     10        10,070   

California — 19.6%

    

Benicia Unified School District, GO, CAB, Series A (NPFGC), 0.00%, 8/01/20 (a)

     2,000        1,790,540   

California Health Facilities Financing Authority, RB:

    

St. Joseph Health System, Series A, 5.75%, 7/01/39

     1,110        1,292,406   

Sutter Health, Series B, 6.00%, 8/15/42

     1,585        1,916,392   

California Health Facilities Financing Authority, Refunding RB, St. Joseph Health System, Series A, 5.00%, 7/01/33

     635        729,697   

California Municipal Finance Authority, RB, Senior, Caritas Affordable Housing, Inc. Projects, S/F, Series A:

    

5.25%, 8/15/39

     80        88,030   

5.25%, 8/15/49

     195        213,162   

California Pollution Control Financing Authority, RB (b):

    

County of San Diego California Water Authority Desalination Project Pipeline, 5.00%, 11/21/45

     620        639,524   

Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 7/01/37

     515        549,917   

Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 11/21/45

     730        776,267   

California Statewide Communities Development Authority, RB, John Muir Health, Series A, 5.13%, 7/01/39

     1,090        1,221,378   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A, 5.25%, 5/15/39

     400        457,316   

City of Stockton California Public Financing Authority, RB, Delta Water Supply Project, Series A, 6.25%, 10/01/38

     185        218,082   

San Diego Unified School District California, GO, CAB, Election of 2008, Series A, 0.00%, 7/01/29 (a)

     2,525        1,496,214   

San Marino Unified School District, GO, Series A (NPFGC) (a):

    

0.00%, 7/01/17

     1,820        1,774,573   

0.00%, 7/01/18

     1,945        1,862,201   

0.00%, 7/01/19

     2,070        1,937,727   

Sequoia Union High School District, GO, Refunding, Election of 2004, Series B (AGM), 5.50%, 7/01/16 (c)

     5,520        5,996,818   

State of California, GO, Various Purposes:

    

6.00%, 3/01/33

     1,265        1,551,333   

6.50%, 4/01/33

     7,325        8,961,771   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

    

State of California Public Works Board, LRB, Various Capital Projects:

    

Series I, 5.00%, 11/01/38

   $ 405      $ 454,548   

Sub-Series I-1, 6.38%, 11/01/34

     600        740,934   

Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement, Asset-Backed, Senior Series A-1, 4.75%, 6/01/25

     1,520        1,500,544   
    

 

 

 
               36,169,374   

Colorado — 1.5%

    

Colorado Educational & Cultural Facilities Authority, RB, Charter School, Colorado Springs, 5.50%, 7/01/40

     1,055        1,135,581   

Regional Transportation District, COP, Refunding, Series A, 5.38%, 6/01/31

     510        567,533   

University of Colorado, RB, Series A, 5.38%, 6/01/38

     920        1,064,431   
    

 

 

 
               2,767,545   

Delaware — 1.5%

    

County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Power LLC Project, 6.00%, 10/01/40

     570        648,438   

Delaware State EDA, RB, Exempt Facilities, Indian River Power LLC Project, 5.38%, 10/01/45

     2,050        2,192,680   
    

 

 

 
               2,841,118   

District of Columbia — 3.0%

    

Metropolitan Washington Airports Authority, Refunding RB:

    

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/34 (a)

     10,170        4,151,191   

Dulles Toll Road, 1st Senior Lien, Series A, 5.00%, 10/01/39

     255        274,760   

Dulles Toll Road, 1st Senior Lien, Series A, 5.25%, 10/01/44

     1,000        1,093,980   
    

 

 

 
               5,519,931   

Florida — 5.1%

    

Ballantrae Community Development District, Special Assessment Bonds, 6.00%, 5/01/35

     1,430        1,435,363   

City of Clearwater Florida Water & Sewer Revenue, RB, Series A, 5.25%, 12/01/39

     1,725        1,963,188   

County of Broward Florida Water & Sewer Utility, Refunding RB, Series A, 5.25%, 10/01/34

     545        614,471   

County of Hillsborough Florida IDA, RB, National Gypsum Co., Series B, AMT, 7.13%, 4/01/30

     1,380        1,381,780   

County of Miami-Dade Florida, RB, CAB, Series A (NPFGC), 0.00%, 10/01/37 (a)

     695        213,421   

County of Tampa-Hillsborough Florida Expressway Authority, Refunding RB, Series A, 5.00%, 7/01/37

     330        363,485   

Mid-Bay Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/40

     1,525        1,856,809   

Palm Coast Park Community Development District, Special Assessment Bonds, 5.70%, 5/01/37

     470        329,677   

Village Community Development District No. 10, Special Assessment Bonds, 5.13%, 5/01/43

     1,240        1,258,885   
    

 

 

 
               9,417,079   

Georgia — 0.7%

    

DeKalb Private Hospital Authority, Refunding RB, Children’s Healthcare, 5.25%, 11/15/39

     420        479,758   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    41


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Georgia (concluded)

    

Metropolitan Atlanta Rapid Transit Authority, RB, Sales Tax, 3rd Indenture, Series A, 5.00%, 7/01/39

   $ 740      $ 835,963   
    

 

 

 
               1,315,721   

Hawaii — 0.4%

    

State of Hawaii Harbor System, RB, Series A, 5.25%, 7/01/30

     680        764,055   

Idaho — 1.1%

    

County of Power Idaho Industrial Development Corp., RB, FMC Corp. Project, AMT, 6.45%, 8/01/32

     2,000        2,003,740   

Illinois — 18.7%

    

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien:

    

Series A, 5.75%, 1/01/39

     2,500        2,852,575   

Series C, 6.50%, 1/01/41

     2,935        3,570,105   

City of Chicago Illinois, GO, Project, Series A, 5.00%, 1/01/34

     1,615        1,644,086   

City of Chicago Illinois, GO, Refunding, Project, Series A, 5.25%, 1/01/32

     2,290        2,400,172   

City of Chicago Illinois, Refunding RB, Sales Tax, Series A, 5.25%, 1/01/38

     410        446,703   

City of Chicago Illinois, Special Assessment Bonds, Lake Shore East, 6.75%, 12/01/32

     600        602,544   

City of Chicago Illinois Board of Education, GO, Series A, 5.25%, 12/01/41

     1,350        1,392,606   

City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/40

     530        594,793   

City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien Project, 5.00%, 11/01/42

     3,645        3,944,327   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38

     410        472,287   

Illinois Finance Authority, Refunding RB, Central Dupage Health, Series B, 5.50%, 11/01/39

     800        905,712   

Illinois State Toll Highway Authority, RB:

    

Senior, Series C, 5.00%, 1/01/36 (d)

     1,695        1,915,503   

Senior, Series C, 5.00%, 1/01/37 (d)

     1,450        1,632,004   

Series A, 5.00%, 1/01/38

     1,165        1,301,293   

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project:

    

CAB, Series B (AGM), 0.00%, 6/15/47 (a)

     9,555        1,982,185   

Series B (AGM), 5.00%, 6/15/50

     2,230        2,350,888   

Series B-2, 5.00%, 6/15/50

     1,260        1,324,121   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     230        269,031   

6.00%, 6/01/28

     500        586,710   

State of Illinois, GO:

    

5.00%, 2/01/39

     810        854,744   

Series A, 5.00%, 4/01/38

     1,920        2,023,718   

State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/34

     315        354,703   

University of Illinois, RB, Auxiliary Facilities System, Series A:

    

5.00%, 4/01/39

     425        474,670   

5.00%, 4/01/44

     520        575,942   
    

 

 

 
               34,471,422   

Indiana — 4.5%

    

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT:

    

6.75%, 1/01/34

     415        473,254   

7.00%, 1/01/44

     1,000        1,142,380   
Municipal Bonds   

Par  

(000)

    Value  

Indiana (concluded)

    

Indiana Finance Authority, RB, Series A:

    

CWA Authority Project, 1st Lien, 5.25%, 10/01/38

   1,660      1,904,950   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44

     225        236,947   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/48

     740        777,651   

Sisters of St. Francis Health Services, 5.25%, 11/01/39

     420        465,633   

Indiana Finance Authority, Refunding RB, Parkview Health System, Series A, 5.75%, 5/01/31

     1,660        1,877,692   

Indiana Municipal Power Agency, RB, Series B, 6.00%, 1/01/39

     565        647,586   

Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 1/15/40

     640        713,722   
    

 

 

 
               8,239,815   

Iowa — 2.2%

    

Iowa Finance Authority, Refunding RB, Midwestern Disaster Area, Iowa Fertilizer Co. Project:

    

5.00%, 12/01/19

     485        518,106   

5.50%, 12/01/22

     1,175        1,244,971   

5.25%, 12/01/25

     230        247,533   

Iowa Student Loan Liquidity Corp., Refunding RB, Student Loan, Senior Series A-1, AMT, 5.15%, 12/01/22

     885        960,782   

Iowa Tobacco Settlement Authority, Refunding RB, Asset-Backed, Series C, 5.63%, 6/01/46

     1,270        1,068,299   
    

 

 

 
               4,039,691   

Kansas — 0.7%

    

Kansas Development Finance Authority, Refunding RB, Adventist Health, Series C, 5.75%, 11/15/38

     1,105        1,268,949   

Kentucky — 0.6%

    

Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     520        586,888   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 6.75%, 7/01/43 (e)

     635        431,692   
    

 

 

 
               1,018,580   

Louisiana — 3.4%

    

East Baton Rouge Sewerage Commission, RB, Series A, 5.25%, 2/01/39

     420        471,534   

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, 6.75%, 11/01/32

     2,500        2,799,100   

New Orleans Aviation Board, RB, Passenger Facility Charge, Series A, 5.25%, 1/01/41

     310        330,590   

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A:

    

5.50%, 5/15/30

     510        558,822   

5.25%, 5/15/31

     435        472,519   

5.25%, 5/15/32

     555        607,009   

5.25%, 5/15/33

     600        653,682   

5.25%, 5/15/35

     255        279,541   
    

 

 

 
               6,172,797   

Maine — 0.1%

    

Maine Health & Higher Educational Facilities Authority, RB, Series A, 5.00%, 7/01/39

     150        160,135   

 

See Notes to Financial Statements.

 

                
42    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Maryland — 1.2%

    

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

   $ 220      $ 237,147   

Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 9/01/25

     605        669,003   

Maryland Health & Higher Educational Facilities Authority, Refunding RB, Charlestown Community Project, 6.25%, 1/01/41

     1,095        1,218,910   
    

 

 

 
               2,125,060   

Massachusetts — 3.1%

    

Massachusetts Development Finance Agency, Refunding RB:

    

Boston University, Series P, 5.45%, 5/15/59

     845        995,511   

Covanta Energy Project, Series C, AMT, 5.25%, 11/01/42 (b)

     1,155        1,186,555   

Massachusetts Health & Educational Facilities Authority, Refunding RB, Partners Healthcare System, Series J1, 5.00%, 7/01/39

     360        405,490   

Massachusetts HFA, RB, M/F Housing, Series A, AMT, 5.25%, 12/01/48

     2,100        2,108,295   

Massachusetts HFA, Refunding RB, Series F, AMT, 5.70%, 6/01/40

     985        1,033,846   
    

 

 

 
               5,729,697   

Michigan — 2.9%

    

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 7/01/39

     2,235        2,399,451   

Kalamazoo Hospital Finance Authority, Refunding RB, Bronson Methodist Hospital, 5.50%, 5/15/36

     690        763,320   

Michigan Finance Authority, Refunding RB, Detroit Water and Sewage Department, Project, Senior Lien C-1, 5.00%, 7/01/44

     455        478,014   

State of Michigan Hospital Finance Authority, Refunding RB, Henry Ford Health, 5.75%, 11/15/39

     1,520        1,687,823   
    

 

 

 
               5,328,608   

Minnesota — 1.0%

    

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series A, 6.75%, 11/15/32

     1,540        1,819,849   

Missouri — 0.2%

    

Bi-State Development Agency of the Missouri-Illinois Metropolitan District, Refunding RB, Combined Lien, Series A, 5.00%, 10/01/44

     125        139,326   

State of Missouri Health & Educational Facilities Authority, Refunding RB, St. Louis College of Pharmacy Project, 5.50%, 5/01/43

     130        142,658   
    

 

 

 
               281,984   

New Hampshire — 1.0%

    

New Hampshire Health & Education Facilities Authority, Refunding RB, Dartmouth-Hitchcock, 6.00%, 8/01/38

     1,530        1,773,576   

New Jersey — 3.4%

    

New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT:

    

5.13%, 9/15/23

     1,040        1,115,203   

5.25%, 9/15/29

     990        1,049,360   

New Jersey EDA, Refunding, Special Assessment Bonds, Kapkowski Road Landfill Project, 5.75%, 4/01/31

     1,125        1,295,460   
Municipal Bonds   

Par  

(000)

    Value  

New Jersey (concluded)

  

New Jersey Transportation Trust Fund Authority, RB, Transportation System:

    

Series A, 5.50%, 6/15/41

   1,025      1,144,556   

Series B, 5.25%, 6/15/36

     1,235        1,367,096   

Rutgers — The State University of New Jersey, Refunding RB, Series L, 5.00%, 5/01/43

     265        298,782   
    

 

 

 
               6,270,457   

New York — 7.1%

    

City of New York New York Transitional Finance Authority, RB, Future Tax Secured Bonds, Fiscal 2012, Sub-Series E-1, 5.00%, 2/01/42

     740        823,516   

County of Westchester New York Healthcare Corp., RB, Senior Lien, Series A, 5.00%, 11/01/44

     292        324,122   

Dutchess County Industrial Development Agency, Refunding RB, 5.00%, 8/01/46

     2,800        2,819,796   

Long Island Power Authority, Refunding RB, Electric System, Series A, 5.75%, 4/01/39

     1,050        1,196,328   

Metropolitan Transportation Authority, RB, Series B, 5.25%, 11/15/38

     1,255        1,441,669   

Metropolitan Transportation Authority, Refunding RB, Dedicated Tax Fund, Series B, 5.00%, 11/15/34

     1,270        1,435,659   

New York Liberty Development Corp., Refunding RB:

    

2nd Priority, Bank of America Tower at One Bryant Park Project, Class 3, 6.38%, 7/15/49

     615        696,248   

3 World Trade Center Project, Class 1, 5.00%, 11/15/44 (b)(d)

     2,170        2,180,155   

3 World Trade Center Project, Class 2, 5.15%, 11/15/34 (b)(d)

     175        177,725   

3 World Trade Center Project, Class 2, 5.38%, 11/15/40 (b)(d)

     440        450,239   

Port Authority of New York & New Jersey, ARB, Special Project, JFK International Air Terminal LLC Project, Series 8:

    

6.00%, 12/01/36

     650        757,282   

6.00%, 12/01/42

     630        730,189   
    

 

 

 
               13,032,928   

North Carolina — 0.6%

    

North Carolina Medical Care Commission, RB, Health Care Facilities, Duke University Health System, Series A, 5.00%, 6/01/42

     705        793,830   

North Carolina Medical Care Commission, Refunding RB, 1st Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 3/01/41

     305        344,552   
    

 

 

 
               1,138,382   

Ohio — 0.2%

    

County of Franklin Ohio, RB, Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 7/01/40

     350        386,508   

Pennsylvania — 2.7%

    

City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 7/01/42

     645        679,598   

Pennsylvania Economic Development Financing Authority, RB:

    

American Water Co. Project, 6.20%, 4/01/39

     1,830        2,139,416   

National Gypsum Co., Series A, AMT, 6.25%, 11/01/27

     1,500        1,500,960   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    43


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Pennsylvania (concluded)

    

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

   $ 585      $ 652,152   
    

 

 

 
               4,972,126   

South Carolina — 2.2%

    

South Carolina State Ports Authority, RB, 5.25%, 7/01/40

     1,650        1,810,512   

State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54

     2,040        2,323,356   
    

 

 

 
               4,133,868   

Tennessee — 2.5%

    

City of Chattanooga Tennessee Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     720        812,614   

County of Hardeman Tennessee Correctional Facilities Corp., RB, Series B, 7.38%, 8/01/17

     1,225        1,227,842   

County of Shelby Health Educational & Housing Facilities Board, Refunding RB, St. Jude’s Childrens Research Hospital, 5.00%, 7/01/31

     2,500        2,637,925   
    

 

 

 
               4,678,381   

Texas — 6.5%

    

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/46

     1,070        1,246,058   

Sub-Lien, 5.00%, 1/01/33

     180        193,073   

City of Houston Texas Airport System, Refunding ARB, Senior Lien, Series A, 5.50%, 7/01/39

     535        605,743   

County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B, 7.00%, 1/01/48

     240        276,180   

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/18 (c)

     1,380        1,726,628   

County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A (a):

    

0.00%, 9/15/40

     2,525        763,888   

0.00%, 9/15/41

     1,395        399,709   

La Vernia Higher Education Finance Corp., RB, Kipp, Inc., Series A, 6.38%, 8/15/44

     320        361,424   

North Texas Tollway Authority, RB, CAB, Special Project System, Series B, 0.00%, 9/01/37 (a)

     1,015        332,159   

North Texas Tollway Authority, Refunding RB, 2nd Tier System, Series F, 6.13%, 1/01/31

     3,020        3,177,252   

Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien:

    

LBJ Infrastructure Group LLC, LBJ Freeway Managed Lanes Project, 7.00%, 6/30/40

     1,165        1,405,107   

NTE Mobility Partners LLC, North Tarrant Express Managed Lanes Project, 6.88%, 12/31/39

     1,300        1,539,174   
    

 

 

 
               12,026,395   

Vermont — 0.0%

    

Vermont Educational & Health Buildings Financing Agency, RB, 6.50%, 6/15/32

     80        80,916   

Virginia — 3.1%

    

County of Fairfax Virginia EDA, Refunding RB, Goodwin House, Inc., 5.13%, 10/01/42

     2,500        2,584,275   
Municipal Bonds   

Par  

(000)

    Value  

Virginia (concluded)

  

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT:

    

5.25%, 1/01/32

   400      436,184   

6.00%, 1/01/37

     2,325        2,639,944   
    

 

 

 
               5,660,403   

Washington — 0.8%

    

Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 1/01/45

     1,195        1,396,513   

Wisconsin — 3.1%

    

State of Wisconsin, Refunding RB, Series A, 6.00%, 5/01/36

     3,620        4,294,551   

State of Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Credit Group, Series E, 5.00%, 11/15/33

     1,235        1,375,975   
    

 

 

 
               5,670,526   
Total Municipal Bonds — 108.4%              199,435,457   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
              

California — 7.7%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/19 (c)

     1,640        1,965,258   

California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/39 (g)

     1,335        1,510,032   

City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/39

     4,770        5,456,594   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Senior Series A, 5.00%, 5/15/40

     2,968        3,376,915   

Los Angeles Community College District California, GO, Election of 2001, Series A (AGM), 5.00%, 8/01/32

     1,170        1,289,036   

San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/33

     553        640,785   
    

 

 

 
               14,238,620   

Colorado — 2.4%

    

Colorado Health Facilities Authority, RB, Catholic Health (AGM):

    

Series C-3, 5.10%, 10/01/41

     1,870        1,985,940   

Series C-7, 5.00%, 9/01/36

     1,200        1,276,308   

Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiatives, Series A, 5.50%, 7/01/34 (g)

     1,080        1,238,927   
    

 

 

 
               4,501,175   

Connecticut — 2.8%

    

Connecticut State Health & Educational Facility Authority, RB, Yale University:

    

Series T-1, 4.70%, 7/01/29

     2,299        2,500,872   

Series X-3, 4.85%, 7/01/37

     2,362        2,561,778   
    

 

 

 
               5,062,650   

Florida — 1.8%

    

County of Miami-Dade Florida, RB, Water & Sewer System, 5.00%, 10/01/34

     2,840        3,222,679   

 

See Notes to Financial Statements.

 

                
44    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to

Tender Option Bond Trusts (f)

  

Par  

(000)

    Value  

Georgia — 1.0%

    

Private Colleges & Universities Authority, Refunding RB, Emory University, Series C, 5.00%, 9/01/38

   $ 1,649      $ 1,837,201   

Massachusetts — 2.0%

    

Massachusetts School Building Authority, RB, Senior, Series B, 5.00%, 10/15/41

     3,211        3,656,997   

New Hampshire — 0.6%

    

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/39 (g)

     1,019        1,168,186   

New York — 8.4%

    

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Series FF-2, 5.50%, 6/15/40

     810        935,771   

City of New York New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.25%, 1/15/39

     3,299        3,716,311   

Hudson Yards Infrastructure Corp., RB, Fiscal 2012, Series A, 5.75%, 2/15/47 (g)

     810        932,551   

New York Liberty Development Corp., RB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43

     5,400        6,170,040   

New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51 (g)

     3,250        3,781,927   
    

 

 

 
               15,536,600   

North Carolina — 0.5%

    

North Carolina Capital Facilities Finance Agency, Refunding RB, Wake Forest University, 5.00%, 1/01/38

     800        895,464   

Ohio — 4.3%

    

State of Ohio, Refunding RB, Cleveland Clinic Health System Obligated Group, Series A, 5.50%, 1/01/39

     6,974        7,864,424   

Texas — 5.0%

    

City of San Antonio Texas Public Service Board, RB, Electric & Gas Systems, Junior Lien, 5.00%, 2/01/43

     1,260        1,404,862   

County of Harris Texas, RB, Senior Lien, Toll Road, Series A, 5.00%, 8/15/38 (g)

     3,363        3,773,395   

County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/41

     1,710        1,932,676   

Municipal Bonds Transferred to

Tender Option Bond Trusts (f)

  

Par  

(000)

    Value  

Texas (concluded)

    

University of Texas, Refunding RB, Financing System, Series B, 5.00%, 8/15/43

   $ 1,800      $ 2,046,063   
    

 

 

 
               9,156,996   

Utah — 0.8%

    

City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 8/15/41

     1,394        1,530,016   

Virginia — 2.6%

    

University of Virginia, Refunding RB, General, 5.00%, 6/01/40

     2,729        3,040,532   

Virginia Small Business Financing Authority, Refunding RB, Sentara Healthcare, 5.00%, 11/01/40

     1,553        1,705,747   
    

 

 

 
               4,746,279   

Washington — 0.8%

    

Central Puget Sound Regional Transit Authority, RB, Series A (AGM), 5.00%, 11/01/32

     1,365        1,500,201   

Wisconsin — 1.7%

    

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health Inc., Obligated Group, Series C, 5.25%, 4/01/39 (g)

     2,859        3,144,393   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 42.4%
        78,061,881   
Total Long-Term Investments
(Cost — $248,456,813) — 150.8%
        277,497,338   
    
   
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.03% (h)(i)

     8,464,289        8,464,289   
Total Short-Term Securities
(Cost — $8,464,289) — 4.6%
             8,464,289   
Total Investments (Cost — $256,921,102) — 155.4%        285,961,627   
Liabilities in Excess of Other Assets — (1.8)%        (3,337,469

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (23.7)%

   

    (43,577,759
VMTP Shares, at Liquidation Value — (29.9)%        (55,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 184,046,399   
    

 

 

 

 

Notes to Schedule of Investments

 

(a)   Zero-coupon bond.

 

(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)   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.

 

(d)   When-issued security. Unsettled when-issued transactions were as follows:

 

Counterparty      Value        Unrealized
Appreciation/
(Depreciation)
 

Citigroup Global Markets, Inc.

     $ 256,193         $ 2,150   

Goldman Sachs & Co.

     $ 2,551,926         $ 21,926   

Morgan Stanley & Co. LLC

     $ 3,547,507         $ (8,426

 

(e)   Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown is as of report date.

 

(f)   Represent bonds transferred to a TOB. In exchange for which the Fund received cash and residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    45


Schedule of Investments (concluded)    BlackRock MuniHoldings Fund II, Inc. (MUH)

 

 

(g)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreement, which expire from October 1, 2016 to February 15, 2031 is $8,457,544.

 

(h)   Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2014, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at October 31,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       944,029           7,520,260           8,464,289         $ 361   

 

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

 

Ÿ  

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

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Appreciation
 
  (136   10-Year U.S. Treasury Note   Chicago Board of Trade   December 2014   $ 17,184,875      $ 45,292   

 

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 statement purposes. 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. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Fund 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 Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’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. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer Note 2 of Note to Financial Statements.

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

 

     Level 1        Level 2        Level 3        Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 277,497,338                   $ 277,497,338   

Short-Term Securities

  $ 8,464,289                               8,464,289   
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 8,464,289         $ 277,497,338                   $ 285,961,627   
 

 

 

      

 

 

      

 

 

      

 

 

 

1    See above Schedule of Investments for values in each state or political subdivision.

       

     Level 1        Level 2        Level 3        Total  
Derivative Financial Instruments2             

Assets:

                

Interest rate contracts

  $ 45,292                             $ 45,292   

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

       

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of October 31, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for financial futures contracts

  $     221,000                             $ 221,000   

Liabilities:

                

TOB trust certificates

            $ (43,568,059                  (43,568,059

VMTP Shares

              (55,000,000                  (55,000,000
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 221,000         $ (98,568,059                $ (98,347,059
 

 

 

      

 

 

      

 

 

      

 

 

 

There were no transfers between levels during the six months ended October 31, 2014.

 

See Notes to Financial Statements.

 

                
46    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments October 31, 2014 (Unaudited)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 1.7%

    

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/39

   $ 2,330      $ 2,712,866   

City of Selma Alabama IDB, RB, Gulf Opportunity Zone, International Paper Co. Project, Series A, 5.38%, 12/01/35

     565        628,314   
    

 

 

 
               3,341,180   

California — 27.3%

    

California Educational Facilities Authority, RB, University of Southern California, Series A, 5.25%, 10/01/38

     2,895        3,286,317   

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 6.00%, 8/15/42

     1,730        2,091,708   

Central Unified School District, GO, Election of 2008, Series A (AGC), 5.63%, 8/01/33

     1,325        1,523,896   

City & County of San Francisco California Airports Commission, Refunding ARB, 2nd Series A, AMT:

    

5.50%, 5/01/28

     1,085        1,288,980   

5.25%, 5/01/33

     850        974,015   

City of San Jose California, Refunding ARB,
Series A-1, AMT:

    

5.50%, 3/01/30

     2,400        2,703,816   

5.75%, 3/01/34

     2,180        2,481,560   

City of Sunnyvale California, Refunding RB, 5.25%, 4/01/40

     1,605        1,829,893   

County of Sacramento California, ARB, Senior
Series A (AGC), 5.50%, 7/01/41

     2,100        2,379,279   

County of Ventura California Community College District, GO, Election of 2002, Series C, 5.50%, 8/01/33

     1,850        2,129,535   

Kern Community College District, GO, Safety, Repair & Improvement, Election of 2002, Series C, 5.50%, 11/01/33

     1,420        1,710,617   

Los Angeles Community College District California, GO, Election of 2008, Series C, 5.25%, 8/01/39

     1,000        1,158,780   

Los Angeles Department of Water & Power, RB, Power System, Sub-Series A-1, 5.25%, 7/01/38

     1,575        1,772,332   

Oceanside Unified School District, GO, Series A (AGC), 5.25%, 8/01/33

     1,825        2,035,879   

Redondo Beach Unified School District, GO, Election of 2008, Series E, 5.50%, 8/01/34

     1,335        1,539,268   

San Pablo Joint Powers Financing Authority, Refunding, Tax Allocation Bonds, CAB (NPFGC) (a):

    

0.00%, 12/01/24

     2,635        1,541,053   

0.00%, 12/01/25

     2,355        1,295,839   

0.00%, 12/01/26

     2,355        1,218,736   

Sequoia Union High School District, GO, Refunding, Election of 2004, Series B (AGM), 5.50%, 7/01/16 (b)

     3,150        3,422,097   

State of California, GO, Various Purpose, 5.00%, 4/01/43

     4,500        5,037,030   

State of California Public Works Board, LRB:

    

Department of Corrections & Rehabilitation, Series F, 5.25%, 9/01/33

     725        845,829   

Various Capital Projects, Series I, 5.50%, 11/01/30

     1,500        1,828,230   

Various Capital Projects, Series I, 5.50%, 11/01/31

     2,465        2,986,890   

Township of Washington California Health Care District, GO, Election of 2004, Series B, 5.50%, 8/01/40

     540        644,792   

University of California, Refunding RB, The Regents of Medical Center, Series J, 5.25%, 5/15/38

     4,070        4,741,916   
    

 

 

 
               52,468,287   
Municipal Bonds   

Par  

(000)

    Value  

Colorado — 2.2%

    

City & County of Denver Colorado Airport System, ARB, Series A, AMT:

    

5.50%, 11/15/28

   1,000      1,179,280   

5.50%, 11/15/30

     340        396,885   

5.50%, 11/15/31

     405        468,994   

Colorado Health Facilities Authority, RB, Hospital, NCMC, Inc. Project, Series B (AGM), 6.00%, 5/15/26

     1,900        2,175,367   
    

 

 

 
               4,220,526   

District of Columbia — 1.2%

    

District of Columbia Water & Sewer Authority, Refunding RB, Series A, 5.50%, 10/01/39

     2,000        2,263,220   

Florida — 14.7%

    

City of Jacksonville Florida, Refunding RB, Series A, 5.25%, 10/01/33

     400        463,836   

City of St. Petersburg Florida Public Utility Revenue, Refunding RB, (NPFGC), 5.00%, 10/01/15 (b)

     4,295        4,484,109   

County of Hillsborough Florida Aviation Authority, Refunding ARB, Tampa International Airport,
Series A, AMT, 5.50%, 10/01/29

     1,735        2,005,955   

County of Lee Florida, Refunding ARB, Series A, AMT, 5.38%, 10/01/32

     1,500        1,664,250   

County of Miami-Dade Florida Aviation, Refunding ARB, Series A, AMT, 5.00%, 10/01/31

     2,900        3,219,609   

County of Miami-Dade Florida Seaport Department, RB:

    

Series A, 5.38%, 10/01/33

     1,015        1,158,409   

Series A, 6.00%, 10/01/38

     1,000        1,207,920   

Series B, AMT, 6.25%, 10/01/38

     460        561,683   

Series B, AMT, 6.00%, 10/01/42

     615        722,600   

County of Orange Florida School Board, COP, Series A (AGC), 5.50%, 8/01/34

     4,645        5,232,407   

Pasco County FL Water & Sewer Revenue, RB,
Series B, 5.00%, 10/01/44

     1,500        1,710,045   

Reedy Creek Improvement District, GO, Series A, 5.25%, 6/01/32

     1,040        1,198,039   

Tohopekaliga Water Authority, Refunding RB, Series A, 5.25%, 10/01/36

     3,995        4,504,722   
    

 

 

 
               28,133,584   

Hawaii — 0.5%

    

State of Hawaii, Department of Transportation, COP, AMT:

    

5.25%, 8/01/25

     425        502,010   

5.25%, 8/01/26

     460        539,470   
    

 

 

 
               1,041,480   

Illinois — 18.3%

    

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien:

    

Series A, 5.75%, 1/01/39

     1,145        1,306,479   

Series C, 6.50%, 1/01/41

     5,225        6,355,638   

City of Chicago Illinois, GO, Refunding, Project, Series A:

    

5.25%, 1/01/29

     1,000        1,063,490   

5.25%, 1/01/33

     850        887,009   

City of Chicago Illinois, Refunding RB, Sales Tax, Series A, 5.25%, 1/01/38

     1,000        1,089,520   

City of Chicago Illinois Midway International Airport, Refunding ARB, 2nd Lien, Series A, AMT, 5.00%, 1/01/41

     565        607,974   

City of Chicago Illinois Transit Authority, RB:

    

Federal Transit Administration, Section 5309, Series A (AGC), 6.00%, 6/01/26

     2,000        2,329,240   

Sales Tax Receipts, 5.25%, 12/01/36

     1,000        1,132,370   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    47


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

City of Chicago Illinois Transit Authority, RB (concluded):

    

Sales Tax Receipts, 5.25%, 12/01/40

   $ 1,790      $ 2,008,827   

Sales Tax Receipts, 5.00%, 12/01/44

     2,455        2,758,880   

City of Chicago Illinois Wastewater Transmission, RB, 2nd Lien, 5.00%, 1/01/42

     2,050        2,228,432   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago:

    

5.50%, 12/01/38

     1,250        1,439,900   

5.25%, 12/01/43

     4,165        4,655,637   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     1,405        1,643,429   

6.00%, 6/01/28

     400        469,368   

State of Illinois, GO:

    

5.25%, 2/01/31

     875        959,525   

5.25%, 2/01/32

     1,355        1,483,698   

5.50%, 7/01/33

     2,000        2,213,140   

5.50%, 7/01/38

     425        465,409   
    

 

 

 
               35,097,965   

Indiana — 3.7%

    

Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges East End Crossing Project, Series A, AMT, 5.00%, 7/01/40

     565        595,002   

Indianapolis Local Public Improvement Bond Bank, RB, Series F, 5.25%, 2/01/36

     3,055        3,438,372   

Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project, Series A (AGC), 5.50%, 1/01/38

     2,780        3,132,615   
    

 

 

 
               7,165,989   

Louisiana — 1.6%

    

Lake Charles Harbor & Terminal District, RB, Series B, AMT, 5.50%, 1/01/29

     1,500        1,727,085   

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A, 5.50%, 5/15/29

     1,215        1,328,092   
    

 

 

 
               3,055,177   

Massachusetts — 4.1%

    

Massachusetts Educational Financing Authority, RB, Education Loan, Issue I, AMT, 5.00%, 1/01/26

     1,300        1,446,718   

Massachusetts HFA, Refunding RB, Series C, AMT, 5.35%, 12/01/42

     1,500        1,563,030   

Massachusetts School Building Authority, RB, Dedicated Sales Tax, Series A (AGM),
5.00%, 8/15/15 (b)

     4,600        4,775,536   
    

 

 

 
               7,785,284   

Michigan — 1.3%

    

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital,
Series V, 8.25%, 9/01/18 (b)

     1,910        2,442,145   

Minnesota — 0.8%

    

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC),
6.50%, 11/15/38

     1,325        1,558,054   

Mississippi — 2.4%

    

Mississippi Development Bank, RB, Special Obligation, Jackson Water & Sewer System Project (AGM), 6.88%, 12/01/40

     2,595        3,430,512   

Mississippi State University Educational Building Corp., Refunding RB, Mississippi State University Improvement Project, 5.25%, 8/01/38

     1,000        1,154,500   
    

 

 

 
               4,585,012   
Municipal Bonds   

Par  

(000)

    Value  

Nevada — 3.7%

    

County of Clark Nevada, ARB, Las Vegas-McCarran International Airport, Series A (AGM), 5.25%, 7/01/39

   1,410      1,593,793   

County of Clark Nevada, GO, Limited Tax, 5.00%, 6/01/38

     3,500        3,857,910   

County of Clark Nevada Water Reclamation District, GO, Series A, 5.25%, 7/01/34

     1,500        1,718,310   
    

 

 

 
               7,170,013   

New Jersey — 8.5%

    

New Jersey Economic Development Authority, RB, 5.00%, 6/15/40

     850        918,000   

New Jersey EDA, RB, Private Activity Bond, The Goethals Bridge Replacement Project, AMT:

    

5.38%, 1/01/43

     3,000        3,318,630   

(AGM), 5.00%, 1/01/31

     790        875,668   

New Jersey Health Care Facilities Financing Authority, RB, Virtua Health, Series A (AGC), 5.50%, 7/01/38

     2,100        2,338,560   

New Jersey Transportation Trust Fund Authority, RB:

    

Transportation Program, Series AA, 5.50%, 6/15/39

     1,890        2,146,567   

Transportation System, Series A, 5.50%, 6/15/41

     1,780        1,987,619   

Transportation System, Series A (AGC), 5.63%, 12/15/28

     3,170        3,708,773   

Transportation System, Series B, 5.25%, 6/15/36

     1,000        1,106,960   
    

 

 

 
               16,400,777   

New York — 6.9%

    

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Series EE:

    

Fiscal 2009, 5.25%, 6/15/40

     3,410        3,860,563   

Fiscal 2011, 5.38%, 6/15/43

     1,305        1,528,742   

Hudson Yards Infrastructure Corp., RB, Senior, Fiscal 2012, Series A, 5.75%, 2/15/47

     2,510        2,889,989   

New York State Dormitory Authority, Refunding RB, 5.00%, 3/15/42

     2,330        2,644,993   

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 166th Series, 5.25%, 7/15/36

     2,000        2,290,740   
    

 

 

 
               13,215,027   

Ohio — 1.8%

    

State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1:

    

5.25%, 2/15/30

     1,000        1,167,190   

5.25%, 2/15/31

     2,000        2,326,380   
    

 

 

 
               3,493,570   

Pennsylvania — 1.0%

    

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

     650        724,614   

Township of Bristol Pennsylvania School District, GO, 5.25%, 6/01/37

     1,000        1,137,490   
    

 

 

 
               1,862,104   

South Carolina — 3.5%

    

County of Charleston South Carolina, RB, Special Source, 5.25%, 12/01/38

     2,180        2,559,669   

County of Charleston South Carolina Airport District, ARB, Series A, AMT:

    

5.50%, 7/01/38

     1,000        1,130,780   

6.00%, 7/01/38

     1,695        1,980,336   

5.50%, 7/01/41

     1,000        1,129,200   
    

 

 

 
               6,799,985   

 

See Notes to Financial Statements.

 

                
48    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Texas — 23.2%

    

Austin Community College District Public Facility Corp., RB, Educational Facilities Project, Round Rock Campus, 5.25%, 8/01/33

   $ 2,500      $ 2,810,050   

City of Beaumont Texas, GO, Certificates of Obligation, 5.25%, 3/01/37

     1,360        1,574,309   

City of Houston Texas Utility System, Refunding RB, Combined 1st Lien, Series A (AGC),
6.00%, 11/15/35

     4,000        4,773,960   

Dallas Area Rapid Transit, Refunding RB, Senior Lien, 5.25%, 12/01/38

     2,600        2,935,504   

Dallas-Fort Worth International Airport, ARB, Joint Improvement, AMT:

    

Series A, 5.00%, 11/01/38

     2,965        3,172,343   

Series H, 5.00%, 11/01/37

     2,200        2,380,598   

Lower Colorado River Authority, Refunding RB, 5.50%, 5/15/33

     1,240        1,471,979   

North Texas Tollway Authority, RB, Special Projects, Series A, 5.50%, 9/01/41

     4,250        5,011,685   

North Texas Tollway Authority, Refunding RB, 1st Tier System (NPFGC):

    

Series A, 5.63%, 1/01/33

     6,585        7,315,869   

Series A, 5.75%, 1/01/40

     4,885        5,452,197   

Series B, 5.75%, 1/01/40

     6,275        7,003,590   

Red River Education Financing Corp., RB, Texas Christian University Project, 5.25%, 3/15/38

     620        718,599   
    

 

 

 
               44,620,683   

Virginia — 1.2%

    

City of Lexington Virginia IDA, RB, Washington & Lee University, 5.00%, 1/01/43

     570        636,764   

Virginia Public School Authority, RB, Fluvanna County School Financing, 6.50%, 12/01/18 (b)

     1,300        1,592,370   
    

 

 

 
               2,229,134   

Washington — 1.5%

    

City of Seattle Washington Municipal Light & Power, Refunding RB, Series A, 5.25%, 2/01/36

     1,375        1,552,567   

State of Washington, GO, Various Purposes, Series B, 5.25%, 2/01/36

     1,075        1,262,674   
    

 

 

 
               2,815,241   
Total Municipal Bonds — 131.1%              251,764,437   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
 

Alabama — 1.2%

    

City of Mobile Alabama Board of Water & Sewer Commissioners, RB, (NPFGC), 5.00%, 1/01/31

     2,120        2,203,952   

Colorado — 3.1%

    

Colorado Health Facilities Authority, RB, Catholic Health, Series C-3 (AGM), 5.10%, 10/01/41

     5,610        5,957,820   

District of Columbia — 0.7%

    

District of Columbia Water & Sewer Authority, Refunding RB, Senior Lien, Series A, 6.00%, 10/01/35 (d)

     1,040        1,243,597   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

Florida — 4.7%

    

County of Lee Florida Housing Finance Authority, RB, S/F Housing, Multi-County Program, Series A-2, AMT (Ginnie Mae), 6.00%, 9/01/40

   365      376,203   

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1, 6.00%, 7/01/38

     7,500        8,641,650   
    

 

 

 
               9,017,853   

Illinois — 1.4%

    

City of Chicago Illinois, Refunding RB, Waterworks, 2nd Lien (AGM), 5.25%, 11/01/33

     2,508        2,766,868   

Kentucky — 0.8%

    

Kentucky State Property & Building Commission, Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/27

     1,406        1,619,295   

Nevada — 5.3%

    

County of Clark Nevada Water Reclamation District, GO:

    

Limited Tax, 6.00%, 7/01/38

     5,000        5,795,900   

Series B, 5.50%, 7/01/29

     3,749        4,400,229   
    

 

 

 
               10,196,129   

New Jersey — 1.3%

    

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series CC, 5.25%, 10/01/29

     2,291        2,463,928   

New York — 5.1%

    

City of New York New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.25%, 1/15/39

     1,400        1,576,617   

New York Liberty Development Corp., RB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43

     4,530        5,175,978   

New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51 (d)

     2,660        3,095,362   
    

 

 

 
               9,847,957   

Utah — 0.6%

    

City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 8/15/41

     1,004        1,102,268   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 24.2%
        46,419,667   
Total Long-Term Investments
(Cost — $268,888,650) — 155.3%
        298,184,104   
    
   
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund (e)(f)

     487,002        487,002   
Total Short-Term Securities
(Cost — $487,002) — 0.2%
             487,002   
Total Investments (Cost — $269,375,652) — 155.5%        298,671,106   
Other Assets Less Liabilities — 1.8%        3,450,400   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (12.0)%

   

    (23,045,400
VMTP Shares, at Liquidation Value — (45.3)%        (87,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 192,076,106   
    

 

 

 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    49


Schedule of Investments (concluded)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

 

Notes to Schedule of Investments

 

(a)   Zero-coupon bond.

 

(b)   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.

 

(c)   Represent bonds transferred to a TOB. In exchange for which the Fund received cash and residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(d)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreement, which expire from October 1, 2016 to November 15, 2019 is $2,225,659.

 

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

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at October 31,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       4,947,879           (4,460,877        487,002         $ 536   

 

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

 

Ÿ  

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

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Appreciation
 
  (186   10-Year U.S. Treasury Note   Chicago Board of Trade   December 2014   $ 23,502,844      $ 11,427   

 

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 statement purposes. 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. 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. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Fund 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 Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’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. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.

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

 

     Level 1        Level 2        Level 3        Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 298,184,104                   $ 298,184,104   

Short-Term Securities

  $     487,002                               487,002   
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 487,002         $ 298,184,104                   $ 298,671,106   
 

 

 

      

 

 

      

 

 

      

 

 

 

1   See above Schedule of Investments for values in each state or political subdivision.

      

     Level 1        Level 2        Level 3        Total  
Derivative Financial Instruments2                 

Assets:

                

Interest rate contracts

  $ 11,427                             $ 11,427   

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

      

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of October 31, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for financial futures contracts

  $   226,000                             $ 226,000   

Liabilities:

                

TOB trust certificates

            $ (23,038,231                  (23,038,231

VMTP Shares

              (87,000,000                  (87,000,000
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 226,000         $ (110,038,231                $ (109,812,231
 

 

 

      

 

 

      

 

 

      

 

 

 

There were no transfers between levels during the six months ended October 31, 2014.

 

See Notes to Financial Statements.

 

                
50    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments October 31, 2014 (Unaudited)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 2.8%

    

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/34

   $ 4,615      $ 5,393,089   

County of Jefferson Alabama, RB, Limited Obligation School, Series A:

    

5.50%, 1/01/21

     5,500        5,548,400   

5.25%, 1/01/23

     6,500        6,530,550   
    

 

 

 
               17,472,039   

Arizona — 5.2%

    

Arizona Board of Regents, University of Arizona, RB, 5.00%, 8/01/28

     2,000        2,281,820   

Arizona Health Facilities Authority, Refunding RB, Phoenix Children’s Hospital, Series A, 5.00%, 2/01/30

     2,685        2,967,945   

City of Phoenix Arizona IDA, RB, Facility, Legacy Traditional Schools Project, Series A, 5.75%, 7/01/24 (a)

     750        813,593   

City of Tucson Arizona, COP, (AGC):

    

4.25%, 7/01/21

     1,870        2,051,764   

4.25%, 7/01/22

     1,895        2,052,380   

City of Tucson Arizona, COP, Refunding, (AGC), 4.00%, 7/01/20

     2,325        2,595,397   

County of Maricopa Arizona IDA, RB, Arizona Charter School Project 1, Series A, 6.63%, 7/01/20

     595        578,156   

County of Pima Arizona IDA, RB, Arizona Charter Schools Project:

    

Series C, 6.70%, 7/01/21

     20        20,047   

Series K, 6.38%, 7/01/31

     895        897,381   

County of Pima Arizona IDA, Refunding RB, Tucson Electric Power Co. Project, San Juan Project, Series A, 4.95%, 10/01/20

     2,325        2,620,089   

County of Pinal Arizona Electric District No. 3, Refunding RB, 5.00%, 7/01/25

     1,600        1,813,712   

Glendale Union School District No 205, GO, Series C:

    

5.00%, 7/01/24

     1,945        2,312,566   

5.00%, 7/01/27

     500        577,870   

Phoenix-Mesa Gateway Airport Authority, RB, Mesa Project, AMT:

    

5.00%, 7/01/27

     700        797,286   

5.00%, 7/01/32

     1,925        2,133,978   

Salt River Project Agricultural Improvement & Power District, RB, Series A, 5.00%, 1/01/25

     4,000        4,506,800   

Scottsdale IDA, Refunding RB, Scottsdale Healthcare, Series C (AGM), 5.00%, 9/01/35

     2,050        2,234,602   

State of Arizona, COP, Department of Administration, Series A (AGM), 4.25%, 10/01/23

     1,000        1,086,390   
    

 

 

 
               32,341,776   

Arkansas — 0.7%

    

Arkansas State University, RB, 5.00%, 12/01/33

     480        542,774   

City of Benton, RB:

    

5.00%, 6/01/28

     600        699,288   

5.00%, 6/01/29

     1,055        1,226,722   

City of Fort Smith, Refunding RB, 4.50%, 5/01/24

     875        1,016,558   

University of Arkansas, Refunding RB, 5.00%, 12/01/29

     700        837,858   
    

 

 

 
               4,323,200   

California — 3.4%

    

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 5.00%, 8/15/22

     2,135        2,487,275   

California Pollution Control Financing Authority, RB, Mandatory Put Bonds, Republic Services, Inc. Project, Series B, AMT, 5.25%, 6/01/23 (b)

     605        660,654   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

    

California Pollution Control Financing Authority, Refunding RB, Pacific Gas, Series C, AMT (NPFGC), 4.75%, 12/01/23

   $ 5,000      $ 5,354,250   

City of San Jose California, Refunding ARB, Series A-1, AMT, 5.00%, 3/01/25

     2,000        2,244,860   

State of California, GO:

    

5.50%, 4/01/28

     15        15,061   

5.00%, 11/01/32

     2,000        2,196,560   

Various Purposes, 5.75%, 4/01/31

     7,000        8,273,230   
    

 

 

 
               21,231,890   

Colorado — 0.9%

    

Denver Urban Renewal Authority, Refunding, Tax Allocation Bond, Stapleton, Senior-Series A-1, 5.00%, 12/01/23

     2,500        2,918,450   

University of Northern Colorado, Refunding RB, Series A, 5.00%, 6/01/31

     2,000        2,343,680   
    

 

 

 
               5,262,130   

Connecticut — 2.3%

    

Connecticut State Development Authority, RB, Learjet, Inc. Project, AMT, 7.95%, 4/01/26

     1,160        1,202,050   

Connecticut State Health & Educational Facility Authority, Refunding RB, Lawrence & Memorial Hospital, Series F, 5.00%, 7/01/31

     4,530        5,001,528   

State of Connecticut, GO, Series B, 5.00%, 4/15/31

     6,990        8,008,093   
    

 

 

 
               14,211,671   

Florida — 6.7%

    

County of Broward Florida School Board, COP, Refunding, Series A (AGM), 5.00%, 7/01/24

     10,000        11,496,400   

County of Highlands Health Facilities Authority, Refunding RB, Adventis Health, Series G,
5.13%, 11/15/16 (c)

     35        38,360   

County of Lee Florida, Refunding ARB, Series A, AMT:

    

5.50%, 10/01/23

     1,000        1,190,170   

(AGM), 5.00%, 10/01/27

     1,635        1,832,557   

County of Miami-Dade Florida, RB, AMT, Series B:

    

6.00%, 10/01/28

     3,470        4,236,523   

6.00%, 10/01/29

     3,480        4,221,553   

County of Miami-Dade Florida Transit System Sales Surtax Revenue, Refunding RB, 5.00%, 7/01/32

     1,500        1,694,175   

County of Miami-Dade Florida Water & Sewer System Revenue, Refunding RB, Series C (BHAC), 5.00%, 10/01/23

     8,000        9,102,160   

Greater Orlando Aviation Authority Airport Facilities, Refunding RB, AMT, Series B:

    

5.00%, 10/01/25

     1,000        1,135,430   

5.00%, 10/01/26

     2,935        3,316,726   

Midtown Miami Community Development District, Refunding, Special Assessment Bonds, Series A, 4.25%, 5/01/24

     3,000        3,175,050   

Sterling Hill Community Development District, Refunding RB, Special Assessment Bonds, Series B, 5.50%, 11/01/10 (d)(e)

     155        99,301   
    

 

 

 
               41,538,405   

Georgia — 1.2%

    

Fulton County Development Authority, Refunding RB, Robert Woodruff, Series B, 5.25%, 3/15/24

     3,000        3,392,070   

Medical Center Hospital Authority, Refunding RB, Columbus Regional Healthcare (AGM):

    

4.00%, 8/01/23

     1,500        1,586,895   

4.13%, 8/01/24

     2,000        2,117,860   
    

 

 

 
               7,096,825   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    51


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Guam — 0.4%

    

Territory of Guam, RB, Section 30, Series A, 5.38%, 12/01/24

   $ 2,100      $ 2,321,991   

Hawaii — 0.9%

    

State of Hawaii Airports System, Refunding ARB, Series A, 5.25%, 7/01/29

     5,000        5,832,850   

Idaho — 0.6%

    

Idaho Health Facilities Authority, Refunding RB, St. Luke’s Regional Medical Center (AGM), 4.63%, 7/01/30

     3,700        3,945,421   

Illinois — 14.0%

    

City of Chicago Illinois, Refunding RB, GO, Series A, 5.25%, 1/01/30

     1,000        1,059,620   

City of Chicago Illinois Midway International Airport, Refunding ARB, 2nd Lien, Series A, AMT, 5.50%, 1/01/32

     1,500        1,704,570   

City of Chicago Illinois Midway International Airport, Refunding RB, AMT, Series A, 5.00%, 1/01/32

     5,000        5,517,550   

City of Chicago Illinois O’Hare International Airport, Refunding GARB, AMT:

    

Series C, 5.25%, 1/01/28

     1,350        1,527,755   

Series C, 5.25%, 1/01/29

     3,020        3,401,577   

Senior Lien, Series A, 5.00%, 1/01/23

     13,000        15,177,760   

City of Chicago Illinois Transit Authority, RB, 5.25%, 12/01/31

     3,700        4,240,311   

Madison-Macoupin Etc. Counties Community College District No. 536, GO, Refunding, Lewis & Clark Community College:

    

5.00%, 5/01/30

     475        525,374   

5.00%, 5/01/31

     500        552,490   

5.00%, 5/01/32

     500        551,690   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     3,500        4,093,950   

6.25%, 6/01/24

     12,750        13,857,337   

State of Illinois, GO:

    

5.25%, 2/01/30

     5,000        5,503,300   

5.00%, 5/01/30

     10,000        10,833,300   

State of Illinois Toll Highway Authority, RB, Series A, 5.00%, 1/01/34

     9,140        10,362,932   

Village of Hodgkins Illinois, RB, MBM Project, AMT, 5.90%, 11/01/17

     6,000        6,009,780   

Village of Wheeling Illinois, Tax Allocation Bonds, North Milwaukee/Lake-Cook TIF Project, 6.00%, 1/01/25

     1,360        1,361,020   
    

 

 

 
               86,280,316   

Indiana — 4.1%

    

City of Whiting Indiana, RB, BP Products North America, Inc. Project, 5.25%, 1/01/21

     4,800        5,737,584   

County of Jasper Indiana, Refunding RB, Northern Indiana Public Service Co., Series C (NPFGC), 5.85%, 4/01/19

     2,000        2,284,520   

Indiana Finance Authority, RB, Wastewater, 1st Lien, Series A, 5.25%, 10/01/31

     10,000        11,660,200   

Indiana Finance Authority, Refunding RB, US Steel Corp. Project, 6.00%, 12/01/19

     5,000        5,520,950   
    

 

 

 
               25,203,254   

Iowa — 1.0%

    

Iowa Higher Education Loan Authority, RB, Private College Facility:

    

5.25%, 4/01/23

     695        800,869   

5.25%, 4/01/24

     730        834,594   

5.25%, 4/01/25

     520        589,852   

5.25%, 4/01/26

     360        406,116   
Municipal Bonds   

Par  

(000)

    Value  

Iowa (concluded)

    

Iowa Higher Education Loan Authority, Refunding RB, Private College Facility:

    

5.00%, 9/01/22

   2,315      2,372,482   

Upper Iowa University Project, 5.00%, 9/01/20

     1,000        1,045,160   
    

 

 

 
               6,049,073   

Kansas — 2.6%

    

Kansas Development Finance Authority, RB, KU Health System, Series H, 5.00%, 3/01/26

     3,220        3,558,261   

Kansas Development Finance Authority, Refunding RB:

    

Adventist Health System/Sunbelt Obligated Group, Series C, 5.00%, 11/15/23

     1,500        1,719,915   

Sisters of Charity of Leavenworth Health System, Series A, 4.00%, 1/01/22

     3,425        3,670,744   

Seward County Unified School District No 480 Liberal, GO, Refunding, 5.00%, 9/01/33

     6,000        6,769,440   
    

 

 

 
               15,718,360   

Kentucky — 1.5%

    

State of Kentucky Property & Building Commission, Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/24

     8,000        9,261,040   

Louisiana — 4.4%

    

City of Bossier City Louisiana Utilities, Refunding RB, 5.00%, 10/01/32

     2,000        2,324,100   

City of New Orleans Louisiana Aviation Board, Refunding GARB, Restructuring, Series A-2 (AGC), 6.00%, 1/01/23

     850        991,925   

Jefferson Parish Hospital Service District No. 1, Refunding RB, West Jefferson Medical Center, Series A (AGM), 5.50%, 1/01/26

     3,000        3,361,830   

Louisiana Local Government Environmental Facilities & Community Development Authority, Refunding RB, BRCC Facilities Corp. Project:

    

5.00%, 12/01/27

     3,445        3,875,418   

5.00%, 12/01/28

     3,715        4,153,184   

Louisiana Public Facilities Authority, Refunding RB, Entergy Gulf States Louisiana LLC Project, Series A, 5.00%, 9/01/28

     2,000        2,058,160   

State of Louisiana Gasoline & Fuels Tax Revenue, Refunding RB, 4.00%, 5/01/34

     5,750        6,038,880   

Terrebonne Levee & Conservation District, RB, Sales Tax, 5.00%, 7/01/28

     3,660        4,131,408   
    

 

 

 
               26,934,905   

Maine — 0.3%

    

Portland Housing Development Corp., Refunding RB, Senior Living, Retirement Facilities, Series A, 6.00%, 2/01/34

     1,965        1,996,519   

Maryland — 0.5%

    

Maryland EDC, RB, Transportation Facilities Project, Series A, 5.13%, 6/01/20

     1,750        1,933,190   

Maryland Health & Higher Educational Facilities Authority, RB, Johns Hopkins Health System, Series B, 5.00%, 7/01/33

     1,140        1,293,410   
    

 

 

 
               3,226,600   

Massachusetts — 2.3%

    

Massachusetts Health & Educational Facilities Authority, Refunding RB, Winchester Hospital, 5.00%, 7/01/25

     1,060        1,176,399   

Massachusetts School Building Authority, RB, Dedicated Sales Tax, Series A (AGM), 5.00%, 8/15/15 (c)

     6,870        7,132,159   

 

See Notes to Financial Statements.

 

                
52    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Massachusetts (concluded)

    

Massachusetts School Building Authority, Refunding RB, Senior Series A, 5.00%, 8/15/25

   $ 5,000      $ 6,043,300   
    

 

 

 
               14,351,858   

Michigan — 2.7%

    

Manistee Area Public Schools, GO, Refunding, (Q-SBLF), 5.00%, 5/01/25

     1,000        1,132,260   

Michigan Finance Authority, Refunding RB, Senior Lien, Detroit Water and Sewer, Series C-3, 5.00%, 7/01/31

     4,000        4,422,600   

Michigan State Building Authority, Refunding RB, Facilities Program, Series II-A, 5.00%, 10/15/24

     2,500        2,875,900   

Michigan State Hospital Finance Authority, Refunding RB, Henry Ford Health System, 5.25%, 11/15/24

     4,900        5,611,039   

State of Michigan Trunk Line Revenue, RB, 5.00%, 11/15/31

     2,000        2,309,900   
    

 

 

 
               16,351,699   

Minnesota — 1.7%

    

City of Shakopee Minnesota Health Care Facilities, Refunding RB, St. Francis Regional Medical Center, 5.00%, 9/01/29

     400        463,976   

City of St. Cloud Minnesota, Refunding RB, Centracare Health System, Series A, 4.25%, 5/01/21

     2,300        2,566,225   

University of Minnesota, RB, Biomedical Science Research Facilities Funding Program:

    

Series B, 5.00%, 8/01/36

     1,000        1,124,590   

Series C, 5.00%, 8/01/27

     1,390        1,647,233   

Series C, 5.00%, 8/01/28

     740        871,720   

Series C, 5.00%, 8/01/29

     1,555        1,824,062   

Series C, 5.00%, 8/01/30

     1,635        1,908,225   
    

 

 

 
               10,406,031   

Mississippi — 0.8%

    

Mississippi Business Finance Corp., Refunding RB, System Energy Resource, Inc. Project, 5.88%, 4/01/22

     5,000        5,004,350   

Missouri — 1.9%

    

Health & Educational Facilities Authority of the State of Missouri, Refunding RB, Series A, 5.00%, 6/01/30

     2,000        2,314,720   

Missouri Joint Municipal Electric Utility Commission Power, RB, Prairie State Project, Series A (BHAC), 5.00%, 1/01/32

     5,000        5,374,950   

Missouri State Environmental Improvement & Energy Resource Authority, Refunding RB, Revolving Funds Program, Series A, 5.00%, 1/01/25

     3,150        3,759,399   
    

 

 

 
               11,449,069   

Montana — 0.7%

    

Montana State Board of Regents, RB, 5.00%, 11/15/30

     1,000        1,181,610   

Yellowstone County School District No 2 Billings, GO:

    

5.00%, 6/15/30

     715        859,559   

4.50%, 6/15/31

     1,780        2,040,111   
    

 

 

 
               4,081,280   

Nebraska — 1.3%

    

Douglas County School District No. 17 Nebraska, GO, Refunding, 2.00%, 6/15/25

     3,380        3,268,798   

Lancaster County Hospital Authority No. 1, Refunding RB, Immanuel Obligation Group, 5.50%, 1/01/30

     1,000        1,119,800   
Municipal Bonds   

Par  

(000)

    Value  

Nebraska (concluded)

    

Nebraska Public Power District, Refunding RB, Series A:

    

5.00%, 1/01/30

   $ 1,000      $ 1,154,560   

5.00%, 1/01/32

     2,000        2,295,040   
    

 

 

 
               7,838,198   

Nevada — 1.6%

    

Clark County Department of Aviation, Refunding RB, 5.00%, 7/01/33

     5,000        5,720,650   

County of Humboldt Nevada, Refunding RB, Idaho Power Co. Project, 5.15%, 12/01/24

     3,800        4,309,884   
    

 

 

 
               10,030,534   

New Jersey — 17.0%

    

County of Essex New Jersey Improvement Authority, LRB, Newark Project, Series A (AGM), 5.00%, 11/01/20

     2,000        2,233,020   

Garden State Preservation Trust, RB, Election of 2005, Series A (AGM), 5.80%, 11/01/15 (c)

     5,050        5,332,547   

New Jersey EDA, RB, AMT:

    

5.50%, 1/01/26

     1,500        1,781,325   

5.50%, 1/01/27

     1,000        1,170,170   

Continental Airlines, Inc. Project, 5.13%, 9/15/23

     6,040        6,476,752   

New Jersey EDA, Refunding RB:

    

New Jersey American Water Co., Series E, AMT, 4.70%, 12/01/25

     3,000        3,251,340   

School Facilities Construction, Series AA, 4.25%, 12/15/24

     3,850        4,080,653   

School Facilities Construction, Series EE, 5.00%, 9/01/23

     3,465        3,880,246   

New Jersey Educational Facilities Authority, RB, Higher Education Facilities Trust Fund, 5.00%, 6/15/28

     10,000        11,172,800   

New Jersey Health Care Facilities Financing Authority, Refunding RB, Hackensack University Medical, Series B (AGM), 4.00%, 1/01/24

     635        680,879   

New Jersey Higher Education Student Assistance Authority, Refunding RB:

    

Series 1, AMT, 5.50%, 12/01/26

     1,665        1,882,932   

Series 1, AMT, 5.00%, 12/01/27

     5,090        5,090,102   

Student Loan, Series 1A, 4.75%, 12/01/21

     1,990        2,134,295   

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series X, AMT, 5.10%, 10/01/23

     870        906,905   

New Jersey State Turnpike Authority, Refunding RB, Series B, 5.00%, 1/01/29

     10,000        11,469,900   

New Jersey Transportation Trust Fund Authority, RB:

    

Series B, 5.25%, 6/15/26

     3,500        3,976,245   

Transportation Program, Series AA, 5.25%, 6/15/31

     12,000        13,541,400   

Transportation System, Series A, 5.25%, 6/15/24

     3,185        3,660,361   

Transportation System, Series B, 5.50%, 6/15/31

     13,970        16,161,893   

Newark Housing Authority, RB, Series A:

    

5.00%, 12/01/23

     1,230        1,441,179   

5.00%, 12/01/25

     1,345        1,554,659   

South Jersey Port Corp., RB, Marine Terminal, Series O-1 (AGC), 4.63%, 1/01/23

     1,375        1,492,164   

State of New Jersey, GO, Refunding, Series O, 5.25%, 8/01/21

     1,355        1,613,209   
    

 

 

 
               104,984,976   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    53


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

New York — 21.1%

    

City of New York New York, GO:

    

Series D1, 5.13%, 12/01/26

   $ 4,615      $ 5,161,647   

Sub-Series B-1, 5.25%, 9/01/22

     8,250        9,530,977   

Sub-Series I-1, 5.50%, 4/01/21

     5,000        5,876,600   

City of New York New York, GO, Refunding:

    

Series B, 5.00%, 8/01/30

     1,140        1,311,023   

Series E, 5.00%, 8/01/24

     4,000        4,617,280   

Series E, 5.00%, 8/01/30

     6,230        7,203,313   

County of Essex New York Industrial Development Agency, Refunding RB, International Paper Co. Project, Series A, AMT, 5.20%, 12/01/23

     5,000        5,159,900   

County of Westchester New York Healthcare Corp., Refunding RB, Senior Lien, Remarketing, Series A:

    

5.00%, 11/01/24

     5,470        6,152,984   

5.00%, 11/01/30

     1,000        1,100,890   

Long Island Power Authority, Refunding RB, Electric System, Series A, 5.50%, 4/01/24

     1,000        1,132,600   

Metropolitan Transportation Authority, RB:

    

Series A, 5.00%, 11/15/25

     1,980        2,156,576   

Series B, 5.25%, 11/15/33

     4,405        5,150,150   

Sub-Series B-1, 5.00%, 11/15/24

     2,300        2,760,782   

Sub-Series B-4, 5.00%, 11/15/24

     1,500        1,800,510   

Monroe County Industrial Development Corp., Refunding RB, Series A, 5.00%, 7/01/29

     5,695        6,530,286   

New York City Industrial Development Agency, Refunding RB, New York Stock Exchange Project, Series A, 4.25%, 5/01/24

     1,740        1,858,894   

New York City Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.00%, 1/15/23

     3,560        4,055,481   

New York City Trust for Cultural Resources, Refunding RB, Carnegie Hall, Series A, 5.00%, 12/01/29

     2,750        3,147,045   

New York State Dormitory Authority, RB:

    

Education, Series D, 5.00%, 9/15/16 (c)

     5        5,435   

Fordham University, Series A, 5.25%, 7/01/25

     900        1,062,288   

Mount Sinai School of Medicine, Series A (NPFGC), 5.15%, 7/01/24

     1,000        1,159,210   

Municipal Health Facilities Lease,
Sub-Series 2-4, 5.00%, 1/15/27

     6,900        7,637,817   

New York University Hospitals Center, Series A, 5.00%, 7/01/22

     1,725        1,975,556   

New York University Hospitals Center, Series A, 5.13%, 7/01/23

     1,670        1,925,510   

North Shore-Long Island Jewish Health System, Series A, 5.50%, 5/01/30

     1,495        1,682,727   

New York State Dormitory Authority, Refunding RB:

    

Mount Sinai Hospital Series A, 4.25%, 7/01/23

     2,225        2,401,420   

North Shore-Long Island Jewish Health System, Series E, 5.00%, 5/01/23

     2,160        2,417,472   

North Shore-Long Island Jewish Obligated Group, Series E, 5.00%, 5/01/22

     650        730,945   

Yeshiva University, 4.00%, 9/01/23

     2,860        2,872,355   

Yeshiva University, 4.25%, 9/01/24

     2,750        2,766,582   

New York State Urban Development Corp., RB, Service Contract, Series B, 5.00%, 1/01/21

     8,000        9,063,840   

Port Authority of New York & New Jersey, ARB, JFK International Air Terminal LLC Project, 5.00%, 12/01/20

     2,475        2,845,309   

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 152nd Series, AMT, 5.00%, 11/01/23

     1,000        1,104,420   

Port Authority of New York & New Jersey, Refunding RB, Consolidated, 153rd Series, 5.00%, 7/15/24

     2,010        2,282,717   

Sales Tax Asset Receivable Corp., Refunding RB, Series A, 5.00%, 10/15/31

     5,000        6,031,950   
Municipal Bonds   

Par  

(000)

    Value  

New York (concluded)

    

State of New York Dormitory Authority, RB, Mental Health Services (AGM):

    

5.00%, 8/15/18 (c)

   $ 10      $ 11,566   

5.00%, 8/15/18 (c)

     30        34,636   

5.00%, 2/15/22

     3,960        4,513,370   

United Nations Development Corp., Refunding RB, Series A, 4.25%, 7/01/24

     2,985        3,185,831   
    

 

 

 
               130,417,894   

North Carolina — 1.7%

    

Buncombe County Metropolitan Sewerage District, RB, 4.00%, 7/01/31

     1,180        1,275,249   

City of Charlotte North Carolina, RB, Charlotte Douglas Airport, Series A, 5.00%, 7/01/33

     4,000        4,490,240   

County of Gaston North Carolina Industrial Facilities & Pollution Control Financing Authority, RB, Exempt Facilities, National Gypsum Co. Project, AMT, 5.75%, 8/01/35

     1,105        1,107,431   

County of Johnston, Refunding RB, 4.00%, 6/01/32

     1,985        2,094,969   

North Carolina Medical Care Commission, Refunding RB, WakeMed, Series A, 5.00%, 10/01/31

     1,500        1,681,890   
    

 

 

 
               10,649,779   

Ohio — 1.1%

    

State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1, 5.25%, 2/15/31

     6,000        6,979,140   

Oklahoma — 0.3%

    

Stillwater Utilities Authority, RB, Series A, 4.00%, 10/01/31

     1,895        2,048,021   

Oregon — 1.8%

    

Home Forward, Refunding RB, Hamilton West Apartments, M/F, 5.00%, 1/01/29

     485        553,448   

Klamath County School District, GO:

    

5.00%, 6/15/30

     1,000        1,164,130   

5.00%, 6/15/31

     1,000        1,158,330   

Oregon State Facilities Authority, Refunding RB, Series A:

    

Reed College Project, 5.00%, 7/01/29

     1,835        2,105,717   

5.00%, 11/15/29

     1,000        1,161,230   

State of Oregon, GO, Series H, 5.00%, 5/01/36

     2,000        2,298,720   

Umatilla County School District No 16R Pendleton, GO, Series A, 5.00%, 6/15/32

     2,000        2,370,680   
    

 

 

 
               10,812,255   

Pennsylvania — 7.5%

    

City of Philadelphia Pennsylvania, ARB, Series A, AMT, 5.00%, 6/15/20

     2,895        3,163,656   

City of Pittsburgh Pennsylvania, GO, Refunding, Series B (AGM), 5.25%, 9/01/17

     9,630        10,465,499   

County of Allegheny Pennsylvania, GO, Refunding, Series C-68, 5.00%, 11/01/25

     2,515        2,943,707   

County of Allegheny Pennsylvania, GO, Series C-67:

    

5.00%, 11/01/25

     2,700        3,171,663   

5.00%, 11/01/26

     2,375        2,759,869   

Montgomery County IDA Pennsylvania, MRB, Whitemarsh Continuing Care, 6.00%, 2/01/21

     3,500        3,531,535   

Pennsylvania Economic Development Financing Authority, RB, National Gypsum Co., Series A, AMT, 6.25%, 11/01/27

     7,710        7,714,934   

Pennsylvania Turnpike Commission, RB, Sub-Series B, 5.25%, 12/01/31

     4,000        4,491,680   

South Fork Municipal Authority, Refunding RB, Conemaugh Valley Memorial Hospital, Series A (AGC), 6.00%, 7/01/20 (c)

     6,225        7,770,045   
    

 

 

 
               46,012,588   

 

See Notes to Financial Statements.

 

                
54    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Puerto Rico — 1.6%

  

Puerto Rico Housing Finance Authority, Refunding RB, M/F Housing, Subordinate, Capital Fund Modernization, 5.13%, 12/01/27

   $ 9,450      $ 10,114,713   

Rhode Island — 1.1%

    

Rhode Island Clean Water Finance Agency, RB, 5.00%, 10/01/32

     1,435        1,686,269   

Rhode Island Health & Educational Building Corp., RB, City of Newport Issue Financing Program, Series C, 5.00%, 5/15/30

     2,305        2,630,650   

Rhode Island Health & Educational Building Corp., Refunding RB, 5.00%, 9/01/32

     2,000        2,340,440   
    

 

 

 
               6,657,359   

South Carolina — 0.2%

    

County of Florence South Carolina, Refunding RB, McLeod Regional Medical Center, Series A, 4.50%, 11/01/25

     1,000        1,080,760   

South Dakota — 0.2%

    

South Dakota Health & Educational Facilities Authority, Refunding RB, Regional Health, 5.00%, 9/01/25

     1,000        1,121,220   

Tennessee — 1.3%

    

County of Memphis-Shelby Tennessee Sports Authority, Inc., Refunding RB, Memphis Arena Project:

    

Series A, 5.00%, 11/01/23

     2,695        3,014,950   

Series B, 5.00%, 11/01/22

     1,000        1,132,470   

Knox County Health Educational & Housing Facility Board Tennessee, Refunding RB, Eastowne Village Project, 4.00%, 6/01/31 (b)

     3,560        3,825,256   
    

 

 

 
               7,972,676   

Texas — 8.6%

    

City of Grapevine Texas, GO, 5.00%, 2/15/33

     5,685        6,576,920   

City of Houston Texas, Refunding ARB, Series A:

    

Senior Lien, 5.25%, 7/01/29

     4,055        4,551,494   

Subordinate Lien, AMT, 5.00%, 7/01/25

     1,500        1,717,530   

Subordinate Lien, AMT, 5.00%, 7/01/32

     1,010        1,113,192   

Dallas-Fort Worth International Airport Facilities Improvement Corp., ARB, Series 2001-A-1, AMT, 6.15%, 1/01/16

     4,000        4,070,800   

Dallas/Fort Worth International Airport, Refunding RB, AMT:

    

Series E, 5.00%, 11/01/26

     2,185        2,441,322   

Series E, 5.00%, 11/01/27

     4,960        5,508,675   

Series F, 5.00%, 11/01/31

     6,345        6,891,812   

Frisco ISD, GO, Refunding, (PSF-GTD), 4.25%, 8/15/28

     3,700        4,056,754   

Love Field Airport Modernization Corp., RB, Southwest Airlines Co. Project, AMT, 5.00%, 11/01/28

     1,000        1,070,720   

Red River Education Financing Corp., RB, 5.00%, 3/15/33

     1,340        1,541,348   

San Jacinto River Authority, RB, Special Project (AGM), 5.25%, 10/01/25

     2,910        3,253,729   

Socorro ISD, GO, Refunding, School Building (PSF-GTD), 5.00%, 8/15/32

     2,500        2,870,475   

Via Metropolitan Transit Authority, Refunding RB:

    

5.25%, 8/01/28

     1,585        1,822,053   

5.25%, 8/01/29

     1,720        1,965,995   

5.25%, 8/01/33

     3,000        3,378,150   
    

 

 

 
               52,830,969   

U.S. Virgin Islands — 1.0%

    

Virgin Islands Public Finance Authority, Refunding RB, Series A, 5.25%, 10/01/24

     5,000        6,097,800   
Municipal Bonds   

Par  

(000)

    Value  

Vermont — 1.3%

    

University of Vermont & State Agricultural College, Refunding RB:

    

5.00%, 10/01/29

   1,500      1,778,280   

4.00%, 10/01/30

     5,565        6,019,327   
    

 

 

 
               7,797,607   

Virginia — 0.9%

    

Virginia Commonwealth Transportation Board, RB, 5.00%, 5/15/28

     5,000        5,847,450   

West Virginia — 1.0%

    

West Virginia Hospital Finance Authority, Refunding RB, Charleston Area Medical Center, Inc., Series A, 5.13%, 9/01/23

     4,000        4,446,840   

West Virginia University, RB, West Virginia University Project, Series B, 5.00%, 10/01/30

     1,500        1,724,475   
    

 

 

 
               6,171,315   

Wisconsin — 2.0%

    

Public Finance Authority, Refunding RB, Wisconsin Airport Facilities, Senior Obligated Group, Series B, AMT, 5.25%, 7/01/28

     4,765        5,125,329   

WPPI Energy, Refunding RB, Supply System, Series A:

    

5.00%, 7/01/31

     1,600        1,852,176   

5.00%, 7/01/32

     1,275        1,472,498   

5.00%, 7/01/33

     3,500        3,981,915   
    

 

 

 
               12,431,918   
Total Municipal Bonds — 136.2%              839,789,724   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
 

Illinois — 3.8%

    

Du Page & Will Counties Community School District No. 204, GO, School Building, Series A (NPFGC), 5.25%, 12/30/22

     8,650        9,606,836   

McHenry County Conservation District Illinois, GO, (AGM), 5.13%, 2/01/27

     12,695        13,804,525   
    

 

 

 
               23,411,361   

Louisiana — 2.3%

    

State of Louisiana, GO, Series A, 5.00%, 8/01/24

     12,000        14,432,160   

Massachusetts — 1.9%

    

Massachusetts Development Finance Agency, Refunding RB, Partners Healthcare, Series L, 5.00%, 7/01/31

     10,175        11,673,953   

Minnesota — 1.9%

    

State of Minnesota, GO, State Various Purposes, Series A, 4.00%, 8/01/29

     10,525        11,878,998   

New York — 7.0%

    

City of New York New York, GO, Refunding, Series E, 5.00%, 8/01/27

     3,507        4,021,794   

City of New York New York, GO, Series I, 5.00%, 3/01/32

     7,009        8,173,985   

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, Series A, 4.75%, 6/15/30

     8,000        8,723,600   

Metropolitan Transportation Authority, RB, Series B, 5.25%, 11/15/25

     4,001        4,719,365   

New York State Urban Development Corp., RB, Personal Income Tax, Series A-1, 5.00%, 3/15/32

     5,501        6,345,316   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    55


Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
  

Par  

(000)

    Value  

New York (concluded)

    

Port Authority of New York & New Jersey, ARB, Consolidated, 169th Series, AMT, 5.00%, 10/15/26

   $ 5,530      $ 6,292,864   

Port Authority of New York & New Jersey, RB, 178th Series, AMT, 5.00%, 12/01/32

     4,009        4,536,668   
    

 

 

 
               42,813,592   

Washington — 1.7%

    

Snohomish County School District No. 15-Edmonds Washington, GO, (NPFGC), 5.00%, 6/01/16 (c)

     10,000        10,732,701   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 18.6%
        114,942,765   
Total Long-Term Investments
(Cost — $883,305,305) — 154.8%
        954,732,489   
Short-Term Securities        
Shares
    Value  

FFI Institutional Tax-Exempt Fund, 0.03% (g)(h)

     1,832,287      1,832,287   
Total Short-Term Securities
(Cost — $1,832,287) — 0.3%
             1,832,287   
Total Investments (Cost — $885,137,592) — 155.1%        956,564,776   
Other Assets Less Liabilities — 1.6%        10,471,951   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (10.2)%

   

    (63,065,712
VMTP Shares, at Liquidation Value — (46.5)%        (287,100,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 616,871,015   
    

 

 

 

 

Notes to Schedule of Investments

 

(a)   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.

 

(b)   Variable rate security. Rate shown is as of report date.

 

(c)   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.

 

(d)   Issuer filed for bankruptcy and/or is in default of principal and/or interest payments.

 

(e)   Non-income producing security.

 

(f)   Represent bonds transferred to a TOB. In exchange for which the Fund received cash and residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

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

 

(h)   Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2014, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at October 31,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       25,184,531           (23,352,244        1,832,287         $ 1,502   

 

Ÿ  

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

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Appreciation
 
  (555   10-Year U.S. Treasury Note   Chicago Board of Trade   December 2014   $ 70,129,453      $ 29,965   

 

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 statement purposes. 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. 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. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Fund 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 Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’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. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.

 

See Notes to Financial Statements.

 

                
56    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (concluded)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

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

 

     Level 1        Level 2        Level 3        Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 954,732,489                   $ 954,732,489   

Short-Term Securities

  $ 1,832,287                               1,832,287   
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 1,832,287         $ 954,732,489                   $ 956,564,776   
 

 

 

      

 

 

      

 

 

      

 

 

 

1   See above Schedule of Investments for values in each state or political subdivision.

      

     Level 1        Level 2        Level 3        Total  
Derivative Financial Instruments2             

Assets:

                

Interest rate contracts

  $ 29,965                             $ 29,965   

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

       

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of October 31, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash received for financial futures contracts

  $ 672,000                             $ 672,000   

Liabilities:

                

TOB trust certificates

            $ (63,051,845                  (63,051,845

VMTP Shares

              (287,100,000                  (287,100,000
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 672,000         $ (350,151,845                $ (349,479,845
 

 

 

      

 

 

      

 

 

      

 

 

 

There were no transfers between levels during the six months ended October 31, 2014.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    57


Schedule of Investments October 31, 2014 (Unaudited)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 1.8%

    

County of Jefferson Alabama, RB, Limited Obligation School, Series A, 5.25%, 1/01/19

   $ 1,490      $ 1,503,112   

County of Jefferson Alabama Sewer, Refunding RB:

    

Senior Lien, Series A (AGM), 5.00%, 10/01/44

     805        868,217   

Sub-Lien, Series D, 6.00%, 10/01/42

     3,575        3,892,674   
    

 

 

 
               6,264,003   

Alaska — 0.9%

    

Northern Tobacco Securitization Corp., Refunding RB, Tobacco Settlement, Asset-Backed, Series A:

    

4.63%, 6/01/23

     1,390        1,387,901   

5.00%, 6/01/46

     2,250        1,682,663   
    

 

 

 
               3,070,564   

Arizona — 0.3%

    

County of Maricopa Arizona IDA, RB, Arizona Charter Schools Project, Series A, 6.75%, 7/01/29

     900        854,217   

County of Pima Arizona IDA, RB, Arizona Charter Schools Project, Series C, 6.75%, 7/01/31

     45        45,072   
    

 

 

 
               899,289   

California — 13.5%

    

California Health Facilities Financing Authority, RB:

    

St. Joseph Health System, Series A, 5.75%, 7/01/39

     2,200        2,561,526   

Sutter Health, Series B, 6.00%, 8/15/42

     3,170        3,832,783   

California Health Facilities Financing Authority, Refunding RB, St. Joseph Health System, Series A, 5.00%, 7/01/33

     1,265        1,453,649   

California Municipal Finance Authority, RB, Senior, Caritas Affordable Housing, Inc. Projects, S/F, Series A:

    

5.25%, 8/15/39

     145        159,554   

5.25%, 8/15/49

     370        404,462   

California Pollution Control Financing Authority, RB (a):

    

County of San Diego California Water Authority Desalination Project Pipeline, 5.00%, 11/21/45

     1,230        1,268,733   

Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 7/01/37

     1,025        1,094,495   

Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 11/21/45

     1,495        1,589,753   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A:

    

5.25%, 5/15/39

     800        914,632   

Senior, 5.00%, 5/15/40

     5,930        6,746,917   

City of Stockton California Public Financing Authority, RB, Delta Water Supply Project, Series A, 6.25%, 10/01/40

     360        423,781   

San Marcos Unified School District, GO, CAB, Election of 2010, Series B, 0.00%, 8/01/42 (b)

     2,000        604,260   

State of California, GO, Various Purposes:

    

6.00%, 3/01/33

     2,525        3,096,534   

6.50%, 4/01/33

     14,925        18,259,991   

State of California Public Works Board, LRB, Various Capital Project:

    

Series I, 5.00%, 11/01/38

     775        869,813   

Sub-Series I-1, 6.38%, 11/01/34

     1,185        1,463,345   
Municipal Bonds    Par  
(000)
    Value  

California (concluded)

    

Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement, Asset-Backed, Senior Series A-1, 4.75%, 6/01/25

   965      952,648   
    

 

 

 
               45,696,876   

Colorado — 0.9%

    

Colorado Health Facilities Authority, RB, Catholic Health Initiatives, Series D, 6.25%, 10/01/33

     1,060        1,234,974   

Colorado Health Facilities Authority, Refunding RB, Evangelical Lutheran Good Samaritan Society Project, 5.00%, 12/01/42

     1,000        1,063,480   

University of Colorado, RB, Series A, 5.75%, 6/01/19 (c)

     750        904,770   
    

 

 

 
               3,203,224   

Connecticut — 1.9%

    

Connecticut State Health & Educational Facility Authority, RB, Ascension Health Senior Credit, Series A, 5.00%, 11/15/40

     1,375        1,525,783   

Connecticut State Health & Educational Facility Authority, Refunding RB, Wesleyan University, Series G, 5.00%, 7/01/35

     3,385        3,856,327   

Mohegan Tribe of Indians of Connecticut, Refunding RB, Public Improvement, Priority Distribution, 6.25%, 1/01/31

     950        948,651   
    

 

 

 
               6,330,761   

Delaware — 1.7%

    

County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Power LLC Project, 6.00%, 10/01/40

     1,125        1,279,811   

Delaware State EDA, RB, Exempt Facilities, Indian River Power LLC Project, 5.38%, 10/01/45

     4,065        4,347,924   
    

 

 

 
               5,627,735   

District of Columbia — 2.7%

    

District of Columbia, Refunding RB, Kipp Charter School, Series A, 6.00%, 7/01/43

     240        278,088   

Metropolitan Washington Airports Authority, Refunding RB:

    

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/33 (b)

     6,590        2,855,645   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/34 (b)

     4,830        1,971,509   

CAB, 2nd Senior Lien, Series B (AGC), 0.00%, 10/01/35 (b)

     6,515        2,496,418   

Dulles Toll Road, 1st Senior Lien, Series A, 5.25%, 10/01/44

     1,500        1,640,970   
    

 

 

 
               9,242,630   

Florida — 3.5%

    

County of Hillsborough Florida IDA, RB, National Gypsum Co., Series B, AMT, 7.13%, 4/01/30

     2,720        2,723,509   

County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport, Series A-1, 5.38%, 10/01/41

     1,165        1,329,055   

County of Tampa-Hillsborough Florida Expressway Authority, Refunding RB, Series A, 5.00%, 7/01/37

     645        710,448   

Mid-Bay Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/40

     3,015        3,671,004   

Palm Coast Park Community Development District, Special Assessment Bonds, 5.70%, 5/01/37

     1,135        796,134   

Village Community Development District No. 10, Special Assessment Bonds, 5.13%, 5/01/43

     2,430        2,467,009   
    

 

 

 
               11,697,159   

 

See Notes to Financial Statements.

 

                
58    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Georgia — 2.4%

    

DeKalb Private Hospital Authority, Refunding RB, Children’s Healthcare, 5.25%, 11/15/39

   $ 130      $ 148,496   

Metropolitan Atlanta Rapid Transit Authority, RB, Sales Tax, 3rd Indenture, Series A, 5.00%, 7/01/39

     3,465        3,914,341   

Municipal Electric Authority of Georgia, Refunding RB:

    

Series W, 6.60%, 1/01/18

     3,120        3,343,611   

Series X, 6.50%, 1/01/20

     730        821,469   
    

 

 

 
               8,227,917   

Hawaii — 0.4%

    

State of Hawaii Harbor System, RB, Series A, 5.25%, 7/01/30

     1,355        1,522,491   

Illinois — 24.0%

    

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien, Series C, 6.50%, 1/01/41

     5,865        7,134,127   

City of Chicago Illinois, GO, Project, Series A, 5.00%, 1/01/34

     3,200        3,257,632   

City of Chicago Illinois, GO, Refunding, Project, Series A, 5.25%, 1/01/32

     4,555        4,774,141   

City of Chicago Illinois, Refunding RB, Sales Tax, Series A, 5.25%, 1/01/38

     820        893,406   

City of Chicago Illinois, Special Assessment Bonds, Lake Shore East, 6.75%, 12/01/32

     800        803,392   

City of Chicago Illinois Board of Education, GO, Series A, 5.25%, 12/01/41

     4,455        4,595,600   

City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/40

     1,050        1,178,362   

City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien:

    

Project, 5.00%, 11/01/42

     3,780        4,090,413   

(AGM), 5.25%, 11/01/33

     1,325        1,461,621   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38

     805        927,296   

Illinois Finance Authority, RB:

    

Advocate Health Care Network, Series D, 6.50%, 11/01/38

     5,000        5,825,200   

Community Rehabilitation Providers Facilities, Series A, 6.50%, 7/01/22

     275        275,311   

Illinois Finance Authority, Refunding RB, Central Dupage Health, Series B, 5.50%, 11/01/39

     1,610        1,822,745   

Illinois State Toll Highway Authority, RB:

    

Senior, Series C, 5.00%, 1/01/36 (e)

     3,265        3,689,744   

Senior, Series C, 5.00%, 1/01/37 (e)

     2,800        3,151,456   

Series A, 5.00%, 1/01/38

     2,315        2,585,832   

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project:

    

Series B (AGM), 5.00%, 6/15/50

     4,315        4,548,916   

Series B-2, 5.00%, 6/15/50

     2,500        2,627,225   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     440        514,668   

6.00%, 6/01/28

     1,140        1,337,699   

Regional Transportation Authority, RB:

    

Series A (AMBAC), 7.20%, 11/01/20

     930        1,074,792   

Series A (NPFGC), 6.70%, 11/01/21

     5,310        6,150,520   

Series C (NPFGC), 7.75%, 6/01/20

     2,500        2,987,900   

State of Illinois, GO:

    

5.00%, 2/01/39

     1,540        1,625,070   

Series A, 5.00%, 4/01/35

     3,000        3,179,490   

Series A, 5.00%, 4/01/38

     3,640        3,836,633   

State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/34

     630        709,405   
Municipal Bonds    Par  
(000)
    Value  

Illinois (concluded)

    

University of Illinois, RB, Auxiliary Facilities System, Series A:

    

5.00%, 4/01/39

   810      904,665   

5.00%, 4/01/44

     985        1,090,966   

Village of Hodgkins Illinois, RB, Metropolitan Biosolids Management LLC Project, AMT, 6.00%, 11/01/23

     2,800        2,804,480   

Village of Wheeling Illinois, Tax Allocation Bonds, North Milwaukee/Lake-Cook TIF Project, 6.00%, 1/01/25

     1,320        1,320,990   
    

 

 

 
               81,179,697   

Indiana — 4.2%

    

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT:

    

6.75%, 1/01/34

     790        900,892   

7.00%, 1/01/44

     1,905        2,176,234   

Indiana Finance Authority, RB, Series A:

    

CWA Authority Project, 1st Lien, 5.25%, 10/01/38

     3,280        3,763,997   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44

     450        473,895   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/48

     1,430        1,502,759   

Sisters of St. Francis Health Services, 5.25%, 11/01/39

     840        931,266   

Indiana Finance Authority, Refunding RB, Parkview Health System, Series A, 5.75%, 5/01/31

     2,795        3,161,536   

Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 1/15/40

     1,270        1,416,291   
    

 

 

 
               14,326,870   

Iowa — 2.6%

    

Iowa Finance Authority, Refunding RB, Midwestern Disaster Area, Iowa Fertilizer Co. Project:

    

5.00%, 12/01/19

     960        1,025,530   

5.50%, 12/01/22

     2,340        2,479,347   

5.25%, 12/01/25

     460        495,066   

Iowa Student Loan Liquidity Corp., Refunding RB, Student Loan, Senior Series A-1, AMT, 5.15%, 12/01/22

     1,520        1,650,157   

Iowa Tobacco Settlement Authority, Refunding RB, Asset-Backed, Series C, 5.63%, 6/01/46

     3,785        3,183,866   
    

 

 

 
               8,833,966   

Kentucky — 0.6%

    

Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     995        1,122,987   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 0.00%, 7/01/43 (d)

     1,200        815,796   
    

 

 

 
               1,938,783   

Louisiana — 2.7%

    

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, Series A-1, 6.50%, 11/01/35

     3,320        3,929,718   

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A:

    

5.50%, 5/15/30

     1,020        1,117,645   

5.25%, 5/15/31

     870        945,038   

5.25%, 5/15/32

     1,110        1,214,018   

5.25%, 5/15/33

     1,205        1,312,811   

5.25%, 5/15/35

     505        553,601   
    

 

 

 
               9,072,831   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    59


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Maryland — 1.3%

    

Maryland Community Development Administration, Refunding, HRB, Residential, Series D, AMT, 4.90%, 9/01/42

   $ 1,500      $ 1,521,360   

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

     435        468,904   

Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 9/01/25

     1,160        1,282,716   

Maryland Health & Higher Educational Facilities Authority, RB, University of Maryland Medical System, Series B (NPFGC), 7.00%, 7/01/22

     840        1,022,364   
    

 

 

 
               4,295,344   

Massachusetts — 3.3%

    

Massachusetts Development Finance Agency, Refunding RB, Covanta Energy Project, Series C, AMT, 5.25%, 11/01/42 (a)

     2,205        2,265,241   

Massachusetts Health & Educational Facilities Authority, Refunding RB, Partners Healthcare System, Series J1, 5.00%, 7/01/39

     990        1,115,096   

Massachusetts HFA, RB, AMT:

    

M/F Housing, Series A, 5.20%, 12/01/37

     2,830        2,887,392   

S/F Housing, Series 130, 5.00%, 12/01/32

     2,720        2,794,582   

Massachusetts HFA, Refunding RB, Series F, AMT, 5.70%, 6/01/40

     2,030        2,130,668   
    

 

 

 
               11,192,979   

Michigan — 7.1%

    

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 7/01/39

     4,425        4,750,592   

Kalamazoo Hospital Finance Authority, Refunding RB, Bronson Methodist Hospital, 5.50%, 5/15/36

     1,380        1,526,639   

Michigan Finance Authority, Refunding RB, Detroit Water and Sewage Department, Project, Senior Lien C-1, 5.00%, 7/01/44

     880        924,510   

Michigan State Hospital Finance Authority, Refunding RB, Series A:

    

Henry Ford Health System, 5.25%, 11/15/46

     5,080        5,250,942   

McLaren Health Care, 5.75%, 5/15/38

     8,560        9,623,580   

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital, Series V, 8.25%, 9/01/18 (c)

     1,400        1,790,054   
    

 

 

 
               23,866,317   

Mississippi — 1.5%

    

County of Lowndes Mississippi, Refunding RB, Solid Waste Disposal & Pollution Control, Weyerhaeuser Co. Project, Series A, 6.80%, 4/01/22

     3,000        3,789,360   

University of Southern Mississippi, RB, Campus Facilities Improvements Project, 5.38%, 9/01/36

     1,065        1,201,639   
    

 

 

 
               4,990,999   

Missouri — 0.2%

    

Bi-State Development Agency of the Missouri-Illinois Metropolitan District, Refunding RB, Combined Lien, Series A, 5.00%, 10/01/44

     255        284,225   

State of Missouri Health & Educational Facilities Authority, Refunding RB, St. Louis College of Pharmacy Project, 5.50%, 5/01/43

     245        268,856   
    

 

 

 
               553,081   
Municipal Bonds    Par  
(000)
    Value  

Nebraska — 0.7%

    

Central Plains Energy Project Nebraska, RB, Gas Project No. 3:

    

5.25%, 9/01/37

   825      905,933   

5.00%, 9/01/42

     1,445        1,557,392   
    

 

 

 
               2,463,325   

New Jersey — 4.1%

    

New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT, 5.25%, 9/15/29

     1,955        2,072,222   

New Jersey EDA, Refunding, Special Assessment Bonds, Kapkowski Road Landfill Project, 5.75%, 4/01/31

     2,240        2,579,405   

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series AA, 6.38%, 10/01/28

     520        541,018   

New Jersey State Turnpike Authority, RB, Series A, 5.00%, 1/01/43

     1,985        2,189,217   

New Jersey Transportation Trust Fund Authority, RB, Transportation System:

    

Series A, 5.50%, 6/15/41

     1,635        1,825,706   

Series B, 5.25%, 6/15/36

     2,460        2,723,122   

Rutgers — The State University of New Jersey, Refunding RB, Series L, 5.00%, 5/01/43

     525        591,927   

Tobacco Settlement Financing Corp. New Jersey, Refunding RB, Series 1A, 4.50%, 6/01/23

     1,335        1,319,888   
    

 

 

 
               13,842,505   

New York — 14.4%

    

City of New York New York Industrial Development Agency, ARB, British Airways PLC Project, AMT, 7.63%, 12/01/32

     1,920        1,930,464   

City of New York New York Industrial Development Agency, RB, Special Needs Facilities Pooled Program, Series C-1, 6.50%, 7/01/17

     500        500,190   

City of New York New York Transitional Finance Authority, RB:

    

Future Tax Secured Bonds, Fiscal 2012, Sub-Series E-1, 5.00%, 2/01/42

     2,460        2,737,636   

Fiscal 2009, Series S-3, 5.25%, 1/15/39

     6,700        7,546,813   

Metropolitan Transportation Authority, RB, Series C, 6.50%, 11/15/28

     9,405        11,402,340   

New York Liberty Development Corp., RB, 1 World Trade Center Port Authority Consolidated, 5.25%, 12/15/43

     10,735        12,265,811   

New York Liberty Development Corp., Refunding RB:

    

2nd Priority, Bank of America Tower at One Bryant Park Project, Class 3, 6.38%, 7/15/49

     1,220        1,381,174   

3 World Trade Center Project, Class 1, 5.00%, 11/15/44 (a)(e)

     4,185        4,204,586   

3 World Trade Center Project, Class 2, 5.15%, 11/15/34 (a)(e)

     340        345,294   

3 World Trade Center Project, Class 2, 5.38%, 11/15/40 (a)(e)

     850        869,780   

New York State Dormitory Authority, Refunding RB, General Purpose, Series A, 5.00%, 6/15/31

     1,790        2,078,494   

Port Authority of New York & New Jersey, ARB, Special Project, JFK International Air Terminal LLC Project, Series 8:

    

6.00%, 12/01/36

     1,165        1,357,283   

6.00%, 12/01/42

     1,250        1,448,787   

Westchester County Industrial Development Agency, RB, Special Needs Facilities Pooled Program, Series E-1, 6.50%, 7/01/17

     700        700,574   
    

 

 

 
               48,769,226   

 

See Notes to Financial Statements.

 

                
60    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

North Carolina — 1.8%

  

County of Gaston North Carolina Industrial Facilities & Pollution Control Financing Authority, RB, Exempt Facilities, National Gypsum Co. Project, AMT, 5.75%, 8/01/35

   $ 1,675      $ 1,678,685   

North Carolina Medical Care Commission, RB, Health Care Facilities, Duke University Health System, Series A, 5.00%, 6/01/42

     1,400        1,576,400   

North Carolina Medical Care Commission, Refunding RB:

    

1st Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 3/01/41

     595        672,160   

Carolina Village Project, 6.00%, 4/01/38

     2,000        2,114,040   
    

 

 

 
               6,041,285   

Ohio — 0.2%

  

County of Franklin Ohio, RB, Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 7/01/40

     660        728,845   

Pennsylvania — 1.4%

    

City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 7/01/42

     1,230        1,295,977   

Pennsylvania Economic Development Financing Authority, RB, Aqua Pennsylvania, Inc. Project, Series B, 5.00%, 11/15/40

     1,890        2,134,604   

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

     1,105        1,231,843   
    

 

 

 
               4,662,424   

South Carolina — 2.4%

  

South Carolina State Ports Authority, RB,
5.25%, 7/01/40

     3,280        3,599,078   

State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54

     3,880        4,418,932   
    

 

 

 
               8,018,010   

Tennessee — 0.3%

  

City of Chattanooga Tennessee Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     995        1,122,987   

Texas — 7.8%

    

Brazos River Authority, Refunding RB, Texas Utility Co., Series A, AMT, 7.70%, 4/01/33 (f)(g)

     1,500        120,000   

Central Texas Regional Mobility Authority, Refunding RB, Senior Lien, 6.25%, 1/01/46

     2,140        2,492,116   

City of Dallas Texas Waterworks & Sewer System, Refunding RB, 5.00%, 10/01/35

     510        585,449   

City of Houston Texas Airport System, Refunding ARB, United Airlines, Inc. Terminal E Project, AMT, 5.00%, 7/01/29

     965        1,018,693   

Clifton Higher Education Finance Corp., RB, Idea Public Schools, 6.00%, 8/15/43

     745        882,959   

County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B, 7.00%, 1/01/48

     455        523,591   

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/18 (c)

     2,000        2,502,360   

Fort Bend County Industrial Development Corp., RB, NRG Energy Project, Series B, 4.75%, 11/01/42

     1,475        1,520,740   
Municipal Bonds    Par  
(000)
    Value  

Texas (concluded)

    

North Texas Tollway Authority, Refunding RB, 1st Tier, Series A, 6.25%, 1/01/39

   7,000      8,140,790   

Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien:

    

LBJ Infrastructure Group LLC, LBJ Freeway Managed Lanes Project, 7.00%, 6/30/40

     2,000        2,412,200   

NTE Mobility Partners LLC, North Tarrant Express Managed Lanes Project, 6.88%, 12/31/39

     2,775        3,285,544   

Texas State University System, Refunding RB, (AGM), 5.00%, 3/15/30

     2,750        2,896,548   
    

 

 

 
               26,380,990   

Utah — 0.9%

  

City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 8/15/41

     2,780        3,050,911   

Virginia — 2.7%

    

County of Fairfax Virginia EDA, Refunding RB, Goodwin House, Inc.:

    

5.13%, 10/01/37

     500        518,950   

5.13%, 10/01/42

     3,440        3,555,962   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT:

    

5.25%, 1/01/32

     1,615        1,761,093   

6.00%, 1/01/37

     2,915        3,309,866   
    

 

 

 
               9,145,871   

Washington — 2.1%

  

Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 1/01/45

     2,290        2,676,163   

Washington Health Care Facilities Authority, Refunding RB, Catholic Health Initiatives, Series D, 6.38%, 10/01/36

     3,700        4,331,220   
    

 

 

 
               7,007,383   

Wisconsin — 3.3%

  

State of Wisconsin, Refunding RB, Series A, 6.00%, 5/01/36

     7,100        8,423,014   

State of Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Credit Group, Series E, 5.00%, 11/15/33

     2,465        2,746,380   
    

 

 

 
               11,169,394   
Total Municipal Bonds — 119.6%              404,436,672   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (h)
 

California — 6.3%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/19 (c)

     3,271        3,918,533   

California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/39 (i)

     2,610        2,952,197   

City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/39

     9,480        10,844,551   

Los Angeles Community College District California, GO, Election of 2001, Series A (AGM), 5.00%, 8/01/32

     2,290        2,522,985   

San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/33

     1,077        1,246,933   
    

 

 

 
               21,485,199   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    61


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (h)
   Par  
(000)
    Value  

Colorado — 0.7%

  

Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiatives, Series A, 5.50%, 7/01/34 (i)

   $ 2,129      $ 2,443,440   

Connecticut — 1.9%

  

Connecticut State Health & Educational Facility Authority, RB, Yale University, Series Z-3, 5.05%, 7/01/42

     6,000        6,552,240   

Florida — 1.9%

  

County of Miami-Dade Florida, RB, Water & Sewer System, 5.00%, 10/01/34

     5,679        6,445,357   

Illinois — 1.0%

  

State of Illinois Toll Highway Authority, RB, Senior Priority, Series B, 5.50%, 1/01/33

     2,999        3,327,829   

Maryland — 0.7%

  

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

     2,290        2,543,709   

Massachusetts — 0.8%

  

Massachusetts School Building Authority, RB, Senior, Series B, 5.00%, 10/15/41

     2,266        2,580,404   

New Hampshire — 0.7%

  

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/39 (i)

     2,009        2,302,013   

New York — 5.4%

  

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution:

    

Series DD, 5.00%, 6/15/37

     6,299        6,995,177   

Series FF-2, 5.50%, 6/15/40

     1,575        1,819,555   

Hudson Yards Infrastructure Corp., RB, Fiscal 2012, Series A, 5.75%, 2/15/47 (i)

     1,610        1,853,588   

New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51 (i)

     6,440        7,494,035   
    

 

 

 
               18,162,355   

North Carolina — 2.0%

  

North Carolina Capital Facilities Finance Agency, Refunding RB, Duke University Project, Series A, 5.00%, 10/01/41

     6,239        6,660,935   

Ohio — 5.4%

  

Ohio Higher Educational Facility Commission, RB, Cleveland Clinic Health, Series A, 5.25%, 1/01/33

     2,400        2,651,352   

State of Ohio, Refunding RB, Cleveland Clinic Health System Obligated Group, Series A,
5.50%, 1/01/39

     13,843        15,610,459   
    

 

 

 
               18,261,811   
Municipal Bonds Transferred to
Tender Option Bond Trusts (h)
   Par  
(000)
    Value  

South Carolina — 1.7%

  

State of South Carolina Public Service Authority, Refunding RB, Santee Cooper, Series A, 5.50%, 1/01/38 (i)

   $ 4,995      $ 5,688,306   

Texas — 3.1%

  

City of San Antonio Texas Public Service Board, RB, Electric & Gas Systems, Junior Lien, 5.00%, 2/01/43

     2,520        2,809,724   

County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/41

     3,400        3,842,748   

Texas Department of Housing & Community Affairs, RB, S/F Mortgage, Series B, AMT (Ginnie Mae), 5.25%, 9/01/32

     1,651        1,714,131   

University of Texas, Refunding RB, Financing System, Series B, 5.00%, 8/15/43

     1,830        2,080,164   
    

 

 

 
               10,446,767   

Washington — 5.4%

  

Central Puget Sound Regional Transit Authority, RB, Series A:

    

5.00%, 11/01/34

     5,000        5,494,076   

5.00%, 11/01/36

     4,000        4,386,664   

(AGM), 5.00%, 11/01/32

     7,693        8,457,179   
    

 

 

 
               18,337,919   

Wisconsin — 0.8%

  

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health Inc., Obligated Group, Series C, 5.25%, 4/01/39 (i)

     2,499        2,748,595   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 37.8%
        127,986,879   
Total Long-Term Investments
(Cost — $477,191,303) — 157.4%
        532,423,551   
    
                  
Short-Term Securities — 5.1%    Shares         

FFI Institutional Tax-Exempt Fund, 0.03% (j)(k)

     17,209,020        17,209,020   
Total Short-Term Securities
(Cost — $17,209,020) — 5.1%
             17,209,020   
Total Investments (Cost — $494,400,323) — 162.5%        549,632,571   
Liabilities in Excess of Other Assets — (1.4)%        (4,877,854

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (19.7)%

   

    (66,585,804
VMTP Shares, at Liquidation Value — (41.4)%        (140,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 338,168,913   
    

 

 

 

 

Notes to Schedule of investments

 

(a)   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.

 

(b)   Zero-coupon bond.

 

(c)   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.

 

(d)   Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown is as of report date.

 

See Notes to Financial Statements.

 

                
62    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

 

(e)   When-issued security. Unsettled when-issued transactions were as follows:

 

Counterparty      Value        Unrealized
Appreciation/
(Depreciation)
 

Citigroup.

     $ 492,293         $ 4,130   

Goldman Sachs & Co.

     $ 4,927,367         $ 42,367   

Morgan Stanley

     $ 6,841,200         $ (16,250

 

(f)   Issuer filed for bankruptcy and/or is in default of principal and/or interest payments.

 

(g)   Non-income producing security.

 

(h)   Represent bonds transferred to a TOB. In exchange for which the Fund received cash and residual interest certificates. These bonds serve as collateral in a financing transaction. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(i)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreement, which expires from October 1, 2016 to November 15, 2019 is 13,391,269.

 

(j)   Investments in issuers considered to be an affiliate of the Fund during the six months ended October 31, 2014, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate      Shares Held
at April 30,
2014
       Net
Activity
       Shares Held
at October 31,
2014
       Income  

FFI Institutional Tax-Exempt Fund

       1,726,061           15,482,959           17,209,020         $ 1,467   

 

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

 

Ÿ  

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

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Appreciation
 
  (250   10-Year U.S. Treasury Note   Chicago Board of Trade   December 2014   $ 31,589,844      $ 81,492   

 

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 statement purposes. 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. 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. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Fund 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 Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’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 Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to Note 2 of the Notes to Financial Statements.

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

 

     Level 1        Level 2        Level 3        Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 532,423,551                   $ 532,423,551   

Short-Term Securities

  $ 17,209,020                               17,209,020   
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 17,209,020         $ 532,423,551                   $ 549,632,571   
 

 

 

      

 

 

      

 

 

      

 

 

 

1    See above Schedule of Investments for values in each state or political subdivision.

       

     Level 1        Level 2        Level 3        Total  
Derivative Financial Instruments2             

Assets:

                

Interest rate contracts

  $ 81,492                             $ 81,492   

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

       

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    63


Schedule of Investments (concluded)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of October 31, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 315,000                             $ 315,000   

Liabilities:

                

TOB trust certificates

            $ (66,569,588                  (66,569,588

VMTP Shares

              (140,000,000                  (140,000,000
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 315,000         $ (206,569,588                $ (206,254,588
 

 

 

      

 

 

      

 

 

      

 

 

 

There were no transfers between levels during the six months ended October 31, 2014.

 

See Notes to Financial Statements.

 

                
64    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Statements of Assets and Liabilities     

 

October 31, 2014 (Unaudited)   BlackRock
MuniAssets
Fund, Inc.
(MUA)
    BlackRock
MuniEnhanced
Fund, Inc.
(MEN)
    BlackRock
MuniHoldings
Fund, Inc.
(MHD)
    BlackRock
MuniHoldings
Fund II, Inc.
(MUH)
 
       
Assets                                

Investments at value — unaffiliated1

  $ 576,186,384      $ 577,240,805      $ 382,463,090      $ 277,497,338   

Investments at value — affiliated2

    826,419        1,054,647        12,102,187        8,464,289   

Cash pledged for financial futures contracts

    473,000        276,000        232,000        221,000   

Interest receivable

    9,355,526        7,460,877        5,499,433        3,847,651   

Investments sold receivable

    1,914,016        1,308,482        676,341        429,024   

Variation margin receivable on financial futures contracts

    99,607        58,170        48,874        36,124   

Deferred offering costs

           265,293        7,724        6,501   

TOB trust receivable

           1,735,000                 

Prepaid expenses

    2,294        13,111        12,917        12,917   
 

 

 

 

Total assets

    588,857,246        589,412,385        401,042,566        290,514,844   
 

 

 

 
       
Accrued Liabilities                                

Investments purchased payable

    12,304,259        3,945,286        9,319,831        6,747,370   

Income dividends payable — Common Shares

    2,236,480        1,788,707        1,250,790        937,918   

Investment advisory fees payable

    267,877        247,617        182,424        132,127   

Officer’s and Directors’ fees payable

    5,090        3,724        2,342        1,765   

Interest expense and fees payable

    18,719        22,179        12,641        9,700   

TOB trust payable

                           

Other accrued expenses payable

    89,826        97,213        80,662        71,506   
 

 

 

 

Total accrued liabilities

    14,922,251        6,104,726        10,848,690        7,900,386   
 

 

 

 
 
Other Liabilities                                

TOB trust certificates

    71,144,505        75,113,873        56,783,700        43,568,059   

VRDP Shares, at liquidation value of $100,000 per share3,4

           142,500,000                 

VMTP Shares, at liquidation value of $100,000 per share3,4

                  83,700,000        55,000,000   
 

 

 

 

Total other liabilities

    71,144,505        217,613,873        140,483,700        98,568,059   
 

 

 

 

Total liabilities

    86,066,756        223,718,599        151,332,390        106,468,445   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 502,790,490      $ 365,693,786      $ 249,710,176      $ 184,046,399   
 

 

 

 
       
Net Assets Applicable to Common Shareholders Consist of                                

Paid-in capital5

  $ 479,994,397      $ 316,096,121      $ 210,679,970      $ 155,428,474   

Undistributed net investment income

    1,972,329        6,636,174        3,049,137        2,734,923   

Accumulated net realized loss

    (12,949,877     (12,806,411     (3,582,469     (3,202,815

Net unrealized appreciation/depreciation

    33,773,641        55,767,902        39,563,538        29,085,817   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 502,790,490      $ 365,693,786      $ 249,710,176      $ 184,046,399   
 

 

 

 

Net asset value, per Common Share

  $ 14.05      $ 12.37      $ 17.67      $ 16.29   
 

 

 

 

1    Investments at cost — unaffiliated

  $ 542,531,821      $ 521,702,588      $ 342,960,086      $ 248,456,813   

2    Investments at cost — affiliated

  $ 826,419      $ 1,054,647      $ 12,102,187      $ 8,464,289   

3    VRDP/VMTP Shares outstanding, par value $0.10

           1,425        837        550   

4    Preferred Shares authorized, including Auction Market Preferred Shares (“AMPS”)

           8,905        5,837        4,030   

5    Common Shares outstanding, 200 million shares authorized, $0.10 par value

    35,783,679        29,565,404        14,133,224        11,300,218   

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    65


Statements of Assets and Liabilities     

 

October 31, 2014 (Unaudited)   BlackRock
MuniHoldings
Quality
Fund, Inc.
(MUS)
    BlackRock
Muni Intermediate
Duration
Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
Assets                        

Investments at value — unaffiliated1

  $ 298,184,104      $ 954,732,489      $ 532,423,551   

Investments at value — affiliated2

    487,002        1,832,287        17,209,020   

Cash pledged for financial futures contracts

    226,000        672,000        315,000   

Interest receivable

    4,246,517        13,006,798        8,225,347   

Investments sold receivable

                  1,601,840   

Variation margin receivable on financial futures contracts

    49,405        147,419        66,405   

Deferred offering costs

    7,889        92,297        10,623   

TOB trust receivable

                    

Prepaid expenses

    12,908        13,673        12,958   
 

 

 

 

Total assets

    303,213,825        970,496,963        559,864,744   
 

 

 

 
     
Accrued Liabilities                        

Investments purchased payable

                  13,019,285   

Income dividends payable — Common Shares

    878,156        2,623,294        1,742,637   

Investment advisory fees payable

    138,422        452,940        231,488   

Officer’s and Directors’ fees payable

    1,886        226,939        3,267   

Interest expense and fees payable

    7,169        13,867        16,216   

TOB trust payable

                  15,011   

Other accrued expenses payable

    73,855        157,063        98,339   
 

 

 

 

Total accrued liabilities

    1,099,488        3,474,103        15,126,243   
 

 

 

 
 
Other Liabilities                        

TOB trust certificates

    23,038,231        63,051,845        66,569,588   

VRDP Shares, at liquidation value of $100,000 per share3,4

                    

VMTP Shares, at liquidation value of $100,000 per share3,4

    87,000,000        287,100,000        140,000,000   
 

 

 

 

Total other liabilities

    110,038,231        350,151,845        206,569,588   
 

 

 

 

Total liabilities

    111,137,719        353,625,948        221,695,831   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 192,076,106      $ 616,871,015      $ 338,168,913   
 

 

 

 
     
Net Assets Applicable to Common Shareholders Consist of                        

Paid-in capital5

  $ 175,157,293      $ 543,562,871      $ 287,372,611   

Undistributed net investment income

    2,740,836        5,711,945        3,597,375   

Accumulated net realized loss

    (15,128,904     (3,860,950     (8,114,813

Net unrealized appreciation/depreciation

    29,306,881        71,457,149        55,313,740   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 192,076,106      $ 616,871,015      $ 338,168,913   
 

 

 

 

Net asset value, per Common Share

  $ 14.76      $ 16.11      $ 16.11   
 

 

 

 

1    Investments at cost — unaffiliated

  $ 268,888,650      $ 883,305,305      $ 477,191,303   

2    Investments at cost — affiliated

  $ 487,002      $ 1,832,287      $ 17,209,020   

3    VRDP/VMTP Shares outstanding, $0.10 per share

    870        2,871        1,400   

4    Preferred Shares authorized, including Auction Market Preferred Shares (“AMPS”)

    6,230        15,671        8,400   

5    Common Shares outstanding, 200 million shares authorized, $0.10 par value

    13,009,717        38,296,266        20,995,624   

 

 

See Notes to Financial Statements.      
                
66    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Statements of Operations     

 

Six Months Ended October 31, 2014 (Unaudited)  

BlackRock
MuniAssets
Fund, Inc.

(MUA)

    BlackRock
MuniEnhanced
Fund, Inc.
(MEN)
    BlackRock
MuniHoldings
Fund, Inc.
(MHD)
    BlackRock
MuniHoldings
Fund II, Inc.
(MUH)
 
       
Investment Income                                

Interest

  $ 15,098,428      $ 13,087,226      $ 9,188,531      $ 6,662,027   

Income — affiliated

    1,338        645        737        361   
 

 

 

 

Total income

    15,099,766        13,087,871        9,189,268        6,662,388   
 

 

 

 
       
Expenses                                

Investment advisory

    1,569,077        1,452,083        1,069,593        777,648   

Professional

    54,848        45,694        38,619        32,740   

Accounting services

    41,022        41,606        29,064        22,957   

Transfer agent

    29,425        22,056        13,254        11,788   

Officer and Directors

    22,668        16,719        11,244        8,315   

Custodian

    13,415        14,746        9,559        7,197   

Printing

    6,274        6,243        5,123        4,580   

Registration

    6,918        5,820        5,238        5,238   

Miscellaneous

    27,227        43,626        38,748        38,483   
 

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    1,770,874        1,648,593        1,220,442        908,946   

Interest expense, fees and amortization of offering costs1

    254,736        961,406        652,154        454,669   
 

 

 

 

Total expenses

    2,025,610        2,609,999        1,872,596        1,363,615   

Less fees waived by Manager

    (1,249     (1,313     (1,133     (525
 

 

 

 

Total expenses after fees waived

    2,024,361        2,608,686        1,871,463        1,363,090   
 

 

 

 

Net investment income

    13,075,405        10,479,185        7,317,805        5,299,298   
 

 

 

 
       
Realized and Unrealized Gain (Loss)                                
Net realized gain (loss) from:        

Investments

    1,483,837        256,761        413,265        557,505   

Financial futures contracts

    (1,481,213     (996,446     (794,602     (535,069
 

 

 

 
    2,624        (739,685     (381,337     22,436   
 

 

 

 
Net change in unrealized appreciation/depreciation on:        

Investments

    17,581,413        13,484,039        12,021,368        7,871,696   

Financial futures contracts

    230,553        324,409        143,775        85,344   
 

 

 

 
    17,811,966        13,808,448        12,165,143        7,957,040   
 

 

 

 

Net realized and unrealized gain

    17,814,590        13,068,763        11,783,806        7,979,476   
 

 

 

 

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ 30,889,995      $ 23,547,948      $ 19,101,611      $ 13,278,774   
 

 

 

 

1    Related to TOBs, VRDP Shares and/or VMTP Shares.

       

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    67


Statements of Operations     

 

Six Months Ended October 31, 2014 (Unaudited)   BlackRock
MuniHoldings
Quality
Fund, Inc.
(MUS)
    BlackRock
Muni Intermediate
Duration
Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
     
Investment Income                        

Interest

  $ 6,753,555      $ 19,584,151      $ 12,893,963   

Income — affiliated

    536        1,502        1,467   
 

 

 

 

Total income

    6,754,091        19,585,653        12,895,430   
 

 

 

 
     
Expenses                        

Investment advisory

    829,029        2,660,775        1,356,722   

Professional

    35,762        65,142        43,986   

Accounting services

    23,936        60,545        39,763   

Transfer agent

    11,583        26,096        17,152   

Officer and Directors

    8,693        19,856        15,309   

Custodian

    7,691        23,010        12,916   

Printing

    4,744        8,830        6,030   

Registration

    5,205        7,522        5,362   

Miscellaneous

    35,116        52,221        41,315   
 

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    961,759        2,923,997        1,538,555   

Interest expense, fees and amortization of offering costs

    570,842        1,768,607        985,272   
 

 

 

 

Total expenses

    1,532,601        4,692,604        2,523,827   

Less fees waived by Manager

    (26,748     (3,393     (1,396
 

 

 

 

Total expenses after fees waived

    1,505,853        4,689,211        2,522,431   
 

 

 

 

Net investment income

    5,248,238        14,896,442        10,372,999   
 

 

 

 
     
Realized and Unrealized Gain (Loss)                        
Net realized gain (loss) from:      

Investments

    664,841        1,540,411        1,498,980   

Financial futures contracts

    (389,073     (1,301,418     (983,696
 

 

 

 
    275,768        238,993        515,284   
 

 

 

 
Net change in unrealized appreciation/depreciation on:      

Investments

    7,312,150        18,296,517        13,849,375   

Financial futures contracts

    30,096        112,429        155,609   
 

 

 

 
    7,342,246        18,408,946        14,004,984   
 

 

 

 

Net realized and unrealized gain

    7,618,014        18,647,939        14,520,268   
 

 

 

 

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ 12,866,252      $ 33,544,381      $ 24,893,267   
 

 

 

 

1   Related to TOBs, VRDP Shares and/or VMTP Shares.

      

 

 

See Notes to Financial Statements.      
                
68    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Statements of Changes in Net Assets     

 

    BlackRock MuniAssets
Fund, Inc. (MUA)
 
Increase (Decrease) in Net Assets:   Six Months Ended
October 31,
2014
(Unaudited)
    Year Ended
April 30,
2014
 
   
Operations                

Net investment income

  $ 13,075,405      $ 27,535,462   

Net realized gain

    2,624        1,410,873   

Net change in unrealized appreciation/depreciation

    17,811,966        (30,547,191
 

 

 

 

Net increase (decrease) in net assets resulting from operations

    30,889,995        (1,600,856
 

 

 

 
   
Distributions to Shareholders From1                

Net investment income

    (13,418,880     (27,002,723
 

 

 

 
 
Net Assets                

Total increase (decrease) in net assets

    17,471,115        (28,603,579

Beginning of period

    485,319,375        513,922,954   
 

 

 

 

End of period

  $ 502,790,490      $ 485,319,375   
 

 

 

 

Undistributed net investment income, end of period

  $ 1,972,329      $ 2,315,804   
 

 

 

 

 

    BlackRock MuniEnhanced
Fund, Inc. (MEN)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
October 31,
2014
(Unaudited)
    Year Ended
April 30,
2014
 
   
Operations                

Net investment income

  $ 10,479,185      $ 21,555,402   

Net realized loss

    (739,685     (2,384,954

Net change in unrealized appreciation/depreciation

    13,808,448        (18,410,123
 

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    23,547,948        760,325   
 

 

 

 
   
Distributions to Common Shareholders From1                

Net investment income

    (10,732,242     (21,389,300
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common distributions

           248,371   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    12,815,706        (20,380,604

Beginning of period

    352,878,080        373,258,684   
 

 

 

 

End of period

  $ 365,693,786      $ 352,878,080   
 

 

 

 

Undistributed net investment income, end of period

  $ 6,636,174      $ 6,889,231   
 

 

 

 

1    Distributions for annual periods determined in accordance with federal income tax regulations.

       

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    69


Statements of Changes in Net Assets     

 

    BlackRock MuniHoldings
Fund, Inc. (MHD)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
October 31,
2014
(Unaudited)
    Year Ended
April 30,
2014
 
   
Operations                

Net investment income

  $ 7,317,805      $ 14,709,802   

Net realized loss

    (381,337     (2,609,949

Net change in unrealized appreciation/depreciation

    12,165,143        (14,535,796
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    19,101,611        (2,435,943
 

 

 

 
   
Distributions to Common Shareholders From1                

Net investment income

    (7,504,742     (15,321,048

Net realized gain

           (209,037
 

 

 

 

Decrease in net assets resulting from distributions to Common Shareholders

    (7,504,742     (15,530,085
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common distributions

           168,146   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    11,596,869        (17,797,882

Beginning of period

    238,113,307        255,911,189   
 

 

 

 

End of period

  $ 249,710,176      $ 238,113,307   
 

 

 

 

Undistributed net investment income, end of period

  $ 3,049,137      $ 3,236,074   
 

 

 

 

 

    BlackRock MuniHoldings II
Fund, Inc. (MUH)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
October 31,
2014
(Unaudited)
   

Year Ended

April 30,
2014

 
   
Operations                

Net investment income

  $ 5,299,298      $ 10,782,371   

Net realized gain (loss)

    22,436        (2,361,531

Net change in unrealized appreciation/depreciation

    7,957,040        (11,035,014
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    13,278,774        (2,614,174
 

 

 

 
   
Distributions to Common Shareholders From1                

Net investment income

    (5,627,509     (11,262,749

Net realized gain

           (1,093,587
 

 

 

 

Decrease in net assets resulting from distributions to Common Shareholders

    (5,627,509     (12,356,336
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    7,651,265        (14,970,510

Beginning of period

    176,395,134        191,365,644   
 

 

 

 

End of period

  $ 184,046,399      $ 176,395,134   
 

 

 

 

Undistributed net investment income, end of period

  $ 2,734,923      $ 3,063,134   
 

 

 

 

1   Distributions for annual periods determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.      
                
70    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Statements of Changes in Net Assets     

 

    BlackRock MuniHoldings Quality
Fund, Inc. (MUS)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
October 31,
2014
(Unaudited)
    Year Ended
April 30,
2014
 
   
Operations                

Net investment income

  $ 5,248,238      $ 10,619,445   

Net realized gain (loss)

    275,768        (8,031,093

Net change in unrealized appreciation/depreciation

    7,342,246        (6,713,391
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    12,866,252        (4,125,039
 

 

 

 
   
Distributions to Common Shareholders From1                

Net investment income

    (5,268,935     (10,631,996
 

 

 

 
 
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    7,597,317        (14,757,035

Beginning of period

    184,478,789        199,235,824   
 

 

 

 

End of period

  $ 192,076,106      $ 184,478,789   
 

 

 

 

Undistributed net investment income, end of period

  $ 2,740,836      $ 2,761,533   
 

 

 

 

 

    BlackRock Muni Intermediate
Duration Fund, Inc. (MUI)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:  

Six Months Ended
October 31,
2014

(Unaudited)

    Year Ended
April 30,
2014
 
   
Operations                

Net investment income

  $ 14,896,442      $ 30,731,598   

Net realized gain (loss)

    238,993        (1,509,254

Net change in unrealized appreciation/depreciation

    18,408,946        (30,874,720
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    33,544,381        (1,652,376
 

 

 

 
   
Distributions to Common Shareholders From1                

Net investment income

    (15,739,765     (32,953,864

Net realized gain

           (1,979,760
 

 

 

 

Decrease in net assets resulting from distributions to Common Shareholders

    (15,739,765     (34,933,624
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    17,804,616        (36,586,000

Beginning of period

    599,066,399        635,652,399   
 

 

 

 

End of period

  $ 616,871,015      $ 599,066,399   
 

 

 

 

Undistributed net investment income, end of period

  $ 5,711,945      $ 6,555,268   
 

 

 

 

1   Distributions for annual periods determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    71


Statements of Changes in Net Assets     

 

    BlackRock MuniVest
Fund II, Inc. (MVT)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
October 31,
2014
(Unaudited)
   

Year Ended

April 30,
2014

 
   
Operations                

Net investment income

  $ 10,372,999      $ 21,507,539   

Net realized gain (loss)

    515,284        (4,430,969

Net change in unrealized appreciation/depreciation

    14,004,984        (20,404,052
 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    24,893,267        (3,327,482
 

 

 

 
   
Distributions to Common Shareholders From1                

Net investment income

    (11,032,290     (22,639,477
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common distributions

    161,853        1,115,168   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase (decrease) in net assets applicable to Common Shareholders

    14,022,830        (24,851,791

Beginning of period

    324,146,083        348,997,874   
 

 

 

 

End of period

  $ 338,168,913      $ 324,146,083   
 

 

 

 

Undistributed net investment income, end of period

  $ 3,597,375      $ 4,256,666   
 

 

 

 

1   Distributions for annual periods determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.      
                
72    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Statements of Cash Flows     

 

Six Months Ended October 31, 2014 (Unaudited)   BlackRock
MuniAssets
Fund, Inc.
(MUA)
    BlackRock
MuniEnhanced
Fund, Inc.
(MEN)
    BlackRock
MuniHoldings
Fund, Inc.
(MHD)
    BlackRock
MuniHoldings
Fund II, Inc.
(MUH)
 
       
Cash Provided by Operating Activities                                

Net increase in net assets resulting from operations

  $ 30,889,995      $ 23,547,948      $ 19,101,611      $ 13,278,774   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

       

(Increase) decrease in interest receivable

    361,311        85,264        70,756        60,907   

Increase in variation margin receivable on financial futures contracts

    (99,607     (58,170     (48,874     (36,124

Decrease in prepaid expenses

    15,654        68,194        16,798        15,171   

Decrease in cash pledged for financial futures contracts

    210,000        18,000        185,000        24,000   

Increase in investment advisory fees payable

    18,116        15,249        10,858        6,349   

Increase (decrease) in interest expense and fees payable

    4,275        (3,496     (495     (1,377

Decrease in other accrued expenses payable

    (12,283     (9,724     (13,523     (9,874

Decrease in variation margin payable on financial futures contracts

    (210,940     (94,923     (113,486     (75,517

Increase (decrease) in Officer’s and Directors’ fees payable

    (40     41        (76     (43

Net realized gain on investments

    (1,483,837     (256,761     (413,265     (557,505

Net unrealized gain on investments

    (17,581,413     (13,484,039     (12,021,368     (7,871,696

Amortization of premium and accretion of discount on investments

    (67,118     (414,753     (24,408     (163,364

Proceeds from sales of long-term investments

    68,958,564        28,864,296        23,830,893        19,714,703   

Purchases of long-term investments

    (67,017,081     (29,555,896     (8,353,654     (6,332,862

Net proceeds from sales (purchases) of short-term securities

    (566,716     2,053,659        (11,297,421     (7,520,260
 

 

 

 

Net cash provided by operating activities

    13,418,880        10,774,889        10,929,346        10,531,282   
 

 

 

 
       
Cash Used for Financing Activities                                

Proceeds from TOB trust certificates

           (1,735,000     (3,454,337     (4,928,953

Repayments of TOB trust certificates

           1,734,886                 

Cash dividends paid to Common Shareholders

    (13,418,880     (10,732,242     (7,504,742     (5,627,509

Increase (decrease) in bank overdraft

                  (1,197     (854

Amortization of deferred offering costs

           (42,533     30,930        26,034   
 

 

 

 

Net cash used for financing activities

    (13,418,880     (10,774,889     (10,929,346     (10,531,282
 

 

 

 
       
Cash                                

Net increase in cash

                           

Cash at beginning of period

                           
 

 

 

 

Cash at end of period

                           
 

 

 

 
       
Supplemental Disclosure of Cash Flow Information                                

Cash paid during the period for interest

  $ 250,461      $ 1,007,435      $ 621,719      $ 430,012   
 

 

 

 
       
Non-cash Financing Activities                                

Capital shares issued in reinvestment of dividends paid to Common Shareholders

                           
 

 

 

 

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    73


Statements of Cash Flows     

 

Six Months Ended October 31, 2014 (Unaudited)   BlackRock
MuniHoldings
Quality
Fund, Inc.
(MUS)
    BlackRock
Muni Intermediate
Duration
Fund, Inc.
(MUI)
    BlackRock
MuniVest
Fund II, Inc.
(MVT)
 
     
Cash Provided by Operating Activities                        

Net increase in net assets resulting from operations

  $ 12,866,252      $ 33,544,381      $ 24,893,267   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

     

(Increase) decrease in interest receivable

    42,061        (339,583     290,911   

Increase in variation margin receivable on financial futures contracts

    (49,405     (147,419     (66,405

Decrease in prepaid expenses

    15,594        29,055        19,529   

Decrease in cash pledged for financial futures contracts

    24,998        311,000        135,000   

Increase in investment advisory fees payable

    11,255        25,049        14,680   

Increase (decrease) in interest expense and fees payable

    (1,787     (8,789     (588

Decrease in other accrued expenses payable

    (12,896     (6,469     (9,927

Decrease in variation margin payable on financial futures contracts

    (68,766     (303,754     (138,799

Increase (decrease) in Officer’s and Directors’ fees payable

    (34     4,323        (78

Net realized gain on investments

    (664,841     (1,540,411     (1,498,980

Net unrealized gain on investments

    (7,312,150     (18,296,517     (13,849,375

Amortization of premium and accretion of discount on investments

    325,659        1,978,281        180,329   

Proceeds from sales of long-term investments

    16,464,442        60,853,492        25,128,195   

Purchases of long-term investments

    (18,724,444     (77,739,085     (8,841,593

Net proceeds from sales (purchases) of short-term securities

    4,460,808        23,352,244        (15,182,959
 

 

 

 

Net cash provided by operating activities

    7,376,746        21,715,798        11,073,207   
 

 

 

 
     
Cash Used for Financing Activities                        

Proceeds from TOB trust certificates

    (2,139,403     (6,018,297     (145,160

Repayments of TOB trust certificates

                  15,011   

Cash dividends paid to Common Shareholders

    (5,268,935     (15,739,765     (10,985,002

Increase (decrease) in bank overdraft

                  (603

Amortization of deferred offering costs

    31,592        42,264        42,547   
 

 

 

 

Net cash used for financing activities

    (7,376,746     (21,715,798     (11,073,207
 

 

 

 
     
Cash                        

Net increase in cash

                    

Cash at beginning of period

                    
 

 

 

 

Cash at end of period

                    
 

 

 

 
     
Supplemental Disclosure of Cash Flow Information                        

Cash paid during the period for interest

  $ 541,037      $ 1,735,132      $ 943,313   
 

 

 

 
 
Non-cash Financing Activities                        

Capital shares issued in reinvestment of dividends paid to Common Shareholders

                $ 161,853   
 

 

 

 

 

 

See Notes to Financial Statements.      
                
74    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Financial Highlights    BlackRock MuniAssets Fund, Inc. (MUA)

 

    Six Months Ended
October 31,
2014
(Unaudited)
    Year Ended April 30,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 13.56      $ 14.36      $ 13.47      $ 12.14      $ 12.63      $ 10.59   
 

 

 

 

Net investment income1

    0.37        0.77        0.77        0.76        0.73        0.80   

Net realized and unrealized gain (loss)

    0.50        (0.82     0.90        1.32        (0.46     2.06   
 

 

 

 

Net increase (decrease) from investment operations

    0.87        (0.05     1.67        2.08        0.27        2.86   
 

 

 

 

Distributions from net investment income2

    (0.38     (0.75     (0.78     (0.75     (0.76     (0.82
 

 

 

 

Net asset value, end of period

  $ 14.05      $ 13.56      $ 14.36      $ 13.47      $ 12.14      $ 12.63   
 

 

 

 

Market price, end of period

  $ 13.35      $ 12.85      $ 13.96      $ 13.15      $ 11.27      $ 12.65   
 

 

 

 
           
Total Return3                                                

Based on net asset value

    6.60% 4      0.47%        12.70%        17.90%        2.31%        27.72%   
 

 

 

 

Based on market price

    6.89% 4      (2.06)%        12.22%        23.99%        (5.17)%        24.17%   
 

 

 

 
           
Ratios to Average Net Assets                                                

Total expenses

    0.81% 5      0.82%        0.83%        0.77%        0.78%        0.72%   
 

 

 

 

Total expenses after fees waived and paid indirectly

    0.81% 5      0.82%        0.83%        0.77%        0.78%        0.72%   
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense and fees6

    0.71% 5      0.70%        0.71%        0.70%        0.74%        0.67%   
 

 

 

 

Net investment income

    5.24% 5      5.84%        5.52%        6.00%        6.07%        6.72%   
 

 

 

 
           
Supplemental Data                                                

Net assets, end of period (000)

  $  502,790      $  485,319      $  513,923      $  481,598      $  433,891      $  266,831   
 

 

 

 

Portfolio turnover rate

    11%        19%        19%        28%        24%        44%   
 

 

 

 

 

  1   

Based on average shares outstanding.

 

  2   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  3   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  4   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Interest expense and fees relate to TOBs. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    75


Financial Highlights    BlackRock MuniEnhanced Fund, Inc. (MEN)

 

    Six Months Ended
October 31,
2014
(Unaudited)
    Year Ended April 30,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 11.94      $ 12.63      $ 12.12      $ 10.30      $ 10.90      $ 9.77   
 

 

 

 

Net investment income1

    0.35        0.73        0.71        0.69        0.73        0.75   

Net realized and unrealized gain (loss)

    0.44        (0.70     0.50        1.82        (0.62     1.04   

Distributions to AMPS Shareholders from net investment income

                         (0.00 )2      (0.03     (0.03
 

 

 

 

Net increase (decrease) from investment operations

    0.79        0.03        1.21        2.51        0.08        1.76   
 

 

 

 

Distributions to Common Shareholders from net investment income3

    (0.36     (0.72     (0.70     (0.69     (0.68     (0.63
 

 

 

 

Net asset value, end of period

  $ 12.37      $ 11.94      $ 12.63      $ 12.12      $ 10.30      $ 10.90   
 

 

 

 

Market price, end of period

  $ 11.28      $ 11.27      $ 12.65      $ 11.66      $ 9.99      $ 10.81   
 

 

 

 
           
Total Return Applicable to Common Shareholders4                                                

Based on net asset value

    6.99% 5      1.06%        10.16%        25.12%        0.78%        18.76%   
 

 

 

 

Based on market price

    3.37% 5      (4.76)%        14.69%        24.11%        (1.44)%        29.59%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                                

Total expenses

    1.44% 6      1.50%        1.49%        1.70% 7      1.24% 7      1.20% 7 
 

 

 

 

Total expenses after fees waived

    1.44% 6      1.50%        1.49%        1.70% 7      1.24% 7      1.20% 7 
 

 

 

 

Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs8

    0.91% 6      0.92%        0.96% 9      1.35% 7,9      1.09% 7      1.04% 7 
 

 

 

 

Net investment income

    5.77% 6      6.37%        5.65%        6.12% 7      6.89% 7      7.17% 7 
 

 

 

 

Distributions to AMPS Shareholders

                         0.03%        0.29%        0.32%   
 

 

 

 

Net investment income to Common Shareholders

    5.77% 6      6.37%        5.65%        6.09%        6.60%        6.85%   
 

 

 

 
           
Supplemental Data                                                

Net assets applicable to Common Shareholders, end of period (000)

  $ 365,694      $ 352,878      $ 373,259      $ 357,017      $  303,264      $  320,083   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                              $ 142,575      $ 142,575   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 142,500      $ 142,500      $ 142,500      $ 142,500                 
 

 

 

 

Portfolio turnover rate

    5%        16%        12%        22%        9%        23%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                              $ 78,179      $ 81,128   
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of period

  $  356,627      $  347,633      $  361,936      $  350,538                 
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Amount is greater than $(0.005) per share.

 

  3   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  4   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  5   

Aggregate total return.

 

  6   

Annualized.

 

  7   

Does not reflect the effect of dividends to AMPS Shareholders.

 

  8   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.

 

  9   

For the years ended April 30, 2013 and April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees were 0.91% and 0.98%, respectively.

 

 

See Notes to Financial Statements.      
                
76    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Financial Highlights    BlackRock MuniHoldings Fund, Inc. (MHD)

 

    Six Months Ended
October 31,
2014
(Unaudited)
    Year Ended April 30,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 16.85      $ 18.12      $ 17.36      $ 14.67      $ 15.75      $ 13.27   
 

 

 

 

Net investment income1

    0.52        1.04        1.07        1.12        1.14        1.13   

Net realized and unrealized gain (loss)

    0.83        (1.22     1.01        2.67        (1.01     2.39   

Distributions to VMTP Shareholders from net realized gain

                  (0.01                     
Distributions to AMPS Shareholders from:            

Net investment income

                         (0.01     (0.03     (0.03

Net realized gain

                                (0.00 )2      (0.00 )2 
 

 

 

 

Net increase (decrease) from investment operations

    1.35        (0.18     2.07        3.78        0.10        3.49   
 

 

 

 
Distributions to Common Shareholders from:3            

Net investment income

    (0.53     (1.08     (1.12     (1.09     (1.07     (0.99

Net realized gain

           (0.01     (0.19            (0.11     (0.02
 

 

 

 

Total distributions to Common Shareholders

    (0.53     (1.09     (1.31     (1.09     (1.18     (1.01
 

 

 

 

Net asset value, end of period

  $ 17.67      $ 16.85      $ 18.12      $ 17.36      $ 14.67      $ 15.75   
 

 

 

 

Market price, end of period

  $ 16.37      $ 16.01      $ 18.20      $ 18.08      $ 14.51      $ 15.70   
 

 

 

 
           
Total Return Applicable to Common Shareholders4                                                

Based on net asset value

    8.36% 5      (0.15)%        12.20%        26.57%        0.57%        27.31%   
 

 

 

 

Based on market price

    5.65% 5      (5.55)%        8.21%        33.28%        (0.21)%        40.68%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                                

Total expenses

    1.52% 6      1.64%        1.60%        1.41% 7      1.28% 7      1.25% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.52% 6      1.64%        1.60%        1.41% 7      1.28% 7      1.25% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs8

    0.99% 6      1.04%        1.02%        1.09% 7,9      1.13% 7      1.11% 7 
 

 

 

 

Net investment income

    5.94% 6      6.48%        5.92%        6.95% 7      7.41% 7      7.67% 7 
 

 

 

 

Distributions to AMPS Shareholders

                         0.09%        0.20%        0.24%   
 

 

 

 

Net investment income to Common Shareholders

    5.94% 6      6.48%        5.92%        6.86%        7.21%        7.43%   
 

 

 

 
           
Supplemental Data                                                

Net assets applicable to Common Shareholders, end of period (000)

  $  249,710      $  238,113      $  255,911      $  243,989      $  205,368      $  219,133   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                              $ 83,700      $ 83,700   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 83,700      $ 83,700      $ 83,700      $ 83,700                 
 

 

 

 

Portfolio turnover

    5%        20%        16%        19%        15%        41%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                              $ 86,342      $ 90,454   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 398,340      $ 384,484      $ 405,748      $ 391,505                 
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Amount is greater than $(0.005) per shares.

 

  3   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  4   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  5   

Aggregate total return.

 

  6   

Annualized.

 

  7   

Does not reflect the effect of dividends to AMPS Shareholders.

 

  8   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

  9   

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.05%.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    77


Financial Highlights    BlackRock MuniHoldings Fund II, Inc. (MUH)

 

    Six Months Ended
October 31,
2014
(Unaudited)
    Year Ended April 30,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 15.61      $ 16.93      $ 16.23      $ 13.74      $ 14.65      $ 12.47   
 

 

 

 

Net investment income1

    0.47        0.95        0.98        1.03        1.03        1.02   

Net realized and unrealized gain (loss)

    0.71        (1.17     0.93        2.45        (0.88     2.08   

Distributions to VMTP Shareholders from net realized gain

                  (0.01                     
Distributions to Preferred Shareholders from:            

Net investment income

                         (0.01     (0.02     (0.02

Net realized gain

                                (0.00 )2        
 

 

 

 

Net increase (decrease) from investment operations

    1.18        (0.22     1.90        3.47        0.13        3.08   
 

 

 

 
Distributions to Common Shareholders from:3            

Net investment income

    (0.50     (1.00     (1.04     (0.98     (0.97     (0.90

Net realized gain

           (0.10     (0.16            (0.07       
 

 

 

 

Total distributions to Common Shareholders

    (0.50     (1.10     (1.20     (0.98     (1.04     (0.90
 

 

 

 

Net asset value, end of period

  $ 16.29      $ 15.61      $ 16.93      $ 16.23      $ 13.74      $ 14.65   
 

 

 

 

Market price, end of period

  $ 15.18      $ 14.84      $ 16.75      $ 16.46      $ 13.35      $ 14.68   
 

 

 

 
           
Total Return Applicable to Common Shareholders4                                                

Based on net asset value

    7.85% 5      (0.40)%        11.99%        26.08%        0.92%        25.71%   
 

 

 

 

Based on market price

    5.71% 5      (4.30)%        9.25%        31.60%        (2.14)%        38.64%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                                

Total expenses

    1.50% 6      1.61%        1.59%        1.37% 7      1.23% 7      1.25% 7 
 

 

 

 

Total expenses after fees waived

    1.50% 6      1.61%        1.59%        1.37% 7      1.23% 7      1.25% 7 
 

 

 

 

Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs8

    1.00% 6      1.04%        1.03%        1.07% 7,9      1.07% 7      1.10% 7 
 

 

 

 

Net investment income

    5.83% 6      6.36%        5.81%        6.81% 7      7.18% 7      7.41% 7 
 

 

 

 

Distributions to AMPS Shareholders

                         0.05%        0.14%        0.16%   
 

 

 

 

Net investment income to Common Shareholders

    5.83% 6      6.36%        5.81%        6.76%        7.04%        7.25%   
 

 

 

 
           
Supplemental Data                                                

Net assets applicable to Common Shareholders, end of period (000)

  $  184,046      $  176,395      $  191,366      $  182,624      $  154,259      $  163,722   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                              $ 55,050      $ 55,050   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 55,000      $ 55,000      $ 55,000      $ 55,000                 
 

 

 

 

Portfolio turnover rate

    5%        18%        16%        18%        15%        41%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                              $ 95,056      $ 99,353   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 434,630      $ 420,718      $ 447,938      $ 432,044                 
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Amount is greater than $(0.005) per share.

 

  3   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  4   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  5   

Aggregate total return.

 

  6   

Annualized.

 

  7   

Does not reflect the effect of dividends to AMPS Shareholders.

 

  8   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

  9   

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.03%.

 

 

See Notes to Financial Statements.      
                
78    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Financial Highlights    BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

    Six Months Ended
October 31,
2014
(Unaudited)
    Year Ended April 30,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 14.18      $ 15.31      $ 14.61      $ 12.48      $ 13.34      $ 12.27   
 

 

 

 

Net investment income1

    0.40        0.82        0.83        0.89        0.91        0.94   

Net realized and unrealized gain (loss)

    0.59        (1.13     0.76        2.14        (0.85     0.97   

Distributions to AMPS shareholders from net investment income

                         (0.01     (0.03     (0.03
 

 

 

 

Net increase (decrease) from investment operations

    0.99        (0.31     1.59        3.02        0.03        1.88   
 

 

 

 

Distributions to Common Shareholders from net investment income2

    (0.41     (0.82     (0.89     (0.89     (0.89     (0.81
 

 

 

 

Net asset value, end of period

  $ 14.76      $ 14.18      $ 15.31      $ 14.61      $ 12.48      $ 13.34   
 

 

 

 

Market price, end of period

  $ 13.26      $ 12.88      $ 14.92      $ 14.52      $ 12.31      $ 13.40   
 

 

 

 
           
Total Return Applicable to Common Shareholders3                                                

Based on net asset value

    7.36% 4      (1.07)%        11.06%        24.96%        0.21%        16.05%   
 

 

 

 

Based on market price

    6.18% 4      (7.78)%        8.90%        25.90%        (1.60)%        31.59%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                                

Total expenses

    1.61% 5      1.75%        1.80%        1.49% 6      1.34% 6      1.36% 6 
 

 

 

 

Total expenses after fees waived

    1.59% 5      1.67%        1.72%        1.41% 6      1.25% 6      1.20% 6 
 

 

 

 

Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs7

    0.98% 5      0.99%        1.00%        1.06% 6,8      1.10% 6      1.04% 6 
 

 

 

 

Net investment income

    5.53% 5      6.00%        5.48%        6.50% 6      7.04% 6      7.23% 6 
 

 

 

 

Distributions to AMPS Shareholders

                         0.08%        0.21%        0.24%   
 

 

 

 

Net investment income to Common Shareholders

    5.53% 5      6.00%        5.48%        6.42%        6.83%        6.99%   
 

 

 

 
           
Supplemental Data                                                

Net assets applicable to Common Shareholders, end of period (000)

  $ 192,076      $ 184,479      $ 199,236      $ 189,567      $  161,720      $  171,977   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                              $ 87,000      $ 87,000   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 87,000      $ 87,000      $ 87,000      $ 87,000                 
 

 

 

 

Portfolio turnover rate

    7%        46%        34%        30%        28%        22%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                              $ 71,472      $ 74,420   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $  320,777      $  312,045      $  329,007      $  317,893                 
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  3   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  4   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Does not reflect the effect of dividends to AMPS Shareholders.

 

  7   

Interest expense and fees relate to TOBs and VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.

 

  8   

For the year ended August 31, 2012, the total expense ratio after fees waived and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.01%.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    79


Financial Highlights    BlackRock Muni Intermediate Duration Fund, Inc.  (MUI)

 

    Six Months Ended
October 31,
2014
(Unaudited)
    Year Ended April 30,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 15.64      $ 16.60      $ 16.21      $ 14.45      $ 14.75      $ 13.05   
 

 

 

 

Net investment income1

    0.39        0.80        0.82        0.86        0.95        1.02   

Net realized and unrealized gain (loss)

    0.49        (0.85     0.58        1.76        (0.31     1.57   

Distributions to VRDP Shareholders from net realized gain

                  (0.01                     

Distributions to AMPS Shareholders from net investment income

                                (0.10     (0.11
 

 

 

 

Net increase (decrease) from investment operations

    0.88        (0.05     1.39        2.62        0.54        2.48   
 

 

 

 
Distributions to Common Shareholders from:2            

Net investment income

    (0.41     (0.86     (0.87     (0.86     (0.84     (0.78

Net realized gain

           (0.05     (0.13                     
 

 

 

 

Total distributions to Common Shareholders

    (0.41     (0.91     (1.00     (0.86     (0.84     (0.78
 

 

 

 

Net asset value, end of period

  $ 16.11      $ 15.64      $ 16.60      $ 16.21      $ 14.45      $ 14.75   
 

 

 

 

Market price, end of period

  $ 14.52      $ 14.55      $ 16.12      $ 16.45      $ 13.65      $ 14.13   
 

 

 

 
 
Total Return Applicable to Common Shareholders3                                                

Based on net asset value

    5.97% 4      0.50%        8.78%        18.74%        3.86%        19.85%   
 

 

 

 

Based on market price

    2.67% 4      (3.73)%        4.09%        27.56%        2.41%        27.29%   
 

 

 

 
 
Ratios to Average Net Assets Applicable to Common Shareholders                                                

Total expenses

    1.53% 5      1.65%        1.91%        1.88%        1.45% 6      1.20% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.53% 5      1.65%        1.91%        1.88%        1.43% 6      1.10% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    0.95% 5      1.00%        1.35% 8      1.65% 8      1.30% 6      1.01% 6 
 

 

 

 

Net investment income

    4.86% 5      5.28%        4.93%        5.58%        6.48% 6      7.22% 6 
 

 

 

 

Distributions to AMPS Shareholders

                                0.70%        0.81%   
 

 

 

 

Net investment income to Common Shareholders

    4.86% 5      5.28%        4.93%        5.58%        5.78%        6.41%   
 

 

 

 
 
Supplemental Data                                                

Net assets applicable to Common Shareholders, end of period (000)

  $ 616,871      $ 599,066      $ 635,652      $ 617,437      $ 549,516      $ 561,140   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                                     $  287,175   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of period (000)

                       $  287,100      $  287,100          
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $  287,100      $  287,100      $  287,100                        
 

 

 

 

Portfolio turnover rate

    6%        22%        16%        27%        21%        29%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                                     $ 73,857   
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of period

                       $ 315,060      $ 291,402          
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 314,863      $ 308,661      $ 321,405                        
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  3   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  4   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Does not reflect the effect of dividends to AMPS Shareholders.

 

  7   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs, VRDP Shares and VMTP Shares, respectively.

 

  8   

For the years ended August 31, 2013 and August 31, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.98% and 0.99%, respectively.

 

 

See Notes to Financial Statements.      
                
80    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Financial Highlights    BlackRock MuniVest Fund II, Inc. (MVT)

 

    Six Months Ended
October 31,
2014
(Unaudited)
    Year Ended April 30,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 15.45      $ 16.69      $ 15.91      $ 13.47      $ 14.41      $ 11.95   
 

 

 

 

Net investment income1

    0.49        1.03        1.06        1.12        1.14        1.18   

Net realized and unrealized gain (loss)

    0.70        (1.19)        0.82        2.41        (0.99)        2.32   

Distributions to AMPS Shareholders from net investment income

                         (0.02)        (0.04)        (0.05)   
 

 

 

 

Net increase (decrease) from investment operations

    1.19        (0.16)        1.88        3.51        0.11        3.45   
 

 

 

 

Distributions to Common Shareholders from net investment income2

    (0.53)        (1.08)        (1.10)        (1.07)        (1.05)        (0.99)   
 

 

 

 

Net asset value, end of period

  $ 16.11      $ 15.45      $ 16.69      $ 15.91      $ 13.47      $ 14.41   
 

 

 

 

Market price, end of period

  $ 15.48      $ 15.16      $ 17.31      $ 16.75      $ 13.72      $ 14.94   
 

 

 

 
 
Total Return Applicable to Common Shareholders3                                                

Based on net asset value

    7.84% 4      (0.37)%        11.95%        26.86%        0.73%        29.75%   
 

 

 

 

Based on market price

    5.60% 4      (5.74)%        10.28%        31.13%        (1.04)%        37.99%   
 

 

 

 
 
Ratios to Average Net Assets Applicable to Common Shareholders                                                

Total expenses

    1.51% 5      1.63%        1.66%        1.41% 6      1.23% 6      1.25% 6 
 

 

 

 

Total expenses after fees waived

    1.51% 5      1.63%        1.66%        1.41% 6      1.23% 6      1.25% 6 
 

 

 

 

Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs7

    0.92% 5      0.96%        0.96%        1.04% 6,8      1.07% 6      1.10% 6 
 

 

 

 

Net investment income

    6.21% 5      6.93%        6.43%        7.57% 6      8.14% 6      8.72% 6 
 

 

 

 

Distributions to AMPS Shareholders

                         0.15%        0.32%        0.36%   
 

 

 

 

Net investment income to Common Shareholders

    6.21% 5      6.93%        6.43%        7.42%        7.82%        8.36%   
 

 

 

 
 
Supplemental Data                                                

Net assets applicable to Common Shareholders, end of period (000)

  $  338,169      $  324,146      $  348,998      $  330,941      $  278,284      $  295,465   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                              $ 140,000      $ 140,000   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 140,000      $ 140,000      $ 140,000      $ 140,000                 
 

 

 

 

Portfolio turnover rate

    4%        17%        15%        13%        16%        30%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                              $ 74,698      $ 77,767   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 341,549      $ 331,533      $ 349,284      $ 336,386                 
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  3   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  4   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Does not reflect the effect of dividends to AMPS Shareholders.

 

  7   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

  8   

For the year ended April 30, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.99%.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    81


Notes to Financial Statements (Unaudited)     

 

1. Organization:

BlackRock MuniAssets Fund, Inc. (“MUA”), BlackRock MuniEnhanced Fund, Inc. (“MEN”), BlackRock MuniHoldings Fund, Inc. (“MHD”), BlackRock Muni-Holdings Fund II, Inc. (“MUH”), BlackRock MuniHoldings Quality Fund, Inc. (“MUS”), BlackRock Muni Intermediate Duration Fund, Inc. (“MUI”) and BlackRock MuniVest Fund II, Inc. (“MVT”) (collectively, the “Funds”) are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as non-diversified, closed-end management investment companies. The Funds are organized as Maryland corporations. The Boards of Directors of the Funds are collectively referred to throughout this report as the “Board of Directors” or the “Board,” and the directors thereof are collectively referred to throughout this report as “Directors”. The Funds determine and make available for publication the NAVs of their Common Shares on a daily basis.

2. Significant Accounting Policies:

The Funds’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Funds:

Valuation: The Funds’ investments are valued at fair value as of the close of trading on the New York Stock Exchange (“NYSE”)(generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Funds determine the fair value of their financial instruments at market value using independent dealers or pricing services under policies approved by the Board of Directors of the Funds. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to provide oversight of the pricing function for the Funds for all financial instruments.

Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments. Financial futures contracts traded on exchanges are valued at their last sale price. Investments in open-end registered investment companies are valued at NAV each business day. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value.

In the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the BlackRock Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Investments”). When determining the price for Fair Value Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant consistent with the principles of fair value measurement. The pricing of all Fair Value Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

Segregation and Collateralization: In cases where a Fund enters into certain investments (e.g., financial futures contracts), or certain borrowings (e.g., TOBs) that would be “senior securities” for 1940 Act purposes, the Fund may segregate or designate on its books and records cash or liquid securities having a market value at least equal to the amount of the Fund’s future obligations under such investments or borrowings. Doing so allows the investment or borrowing to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Fund may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis.

Distributions: Distributions from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. The character and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Distributions to Preferred Shareholders are accrued and determined as described in Note 9.

Deferred Compensation Plan: Under the Deferred Compensation Plan (the “Plan”) approved by each Fund’s Board, the independent Directors (“Independent Directors”) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of certain other BlackRock Closed-End Funds selected by the Independent Directors. This has the same economic effect for the Independent Directors as if the Independent Directors had invested the deferred amounts directly in certain other BlackRock Closed-End Funds.

 

                
82    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Notes to Financial Statements (continued)     

 

The Plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Fund. Deferred compensation liabilities are included in officer’s and director’s fees payable in the Statements of Assets and Liabilities and will remain as a liability of the Funds until such amounts are distributed in accordance with the Plan.

Recent Accounting Standard: In June 2014, the Financial Accounting Standards Board issued guidance to improve the financial reporting of reverse repurchase agreements and other similar transactions. The guidance will require expanded disclosure for entities that enter into reverse repurchase agreements and similar transactions accounted for as secured borrowings. It is effective for financial statements with fiscal years beginning on or after December 15, 2014 and interim periods within those fiscal years. Management is evaluating the impact, if any, of this guidance on the Fund’s financial statement disclosures.

Other: Expenses directly related to a Fund are charged to that Fund. Other operating expenses shared by several funds are pro-rated among those funds on the basis of relative net assets or other appropriate methods.

The Funds have an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodians impose fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

3. Securities and Other Investments:

Zero-Coupon Bonds: The Funds may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations which provide for regular interest payments.

Forward Commitments and When-Issued Delayed Delivery Securities: The Funds may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Funds may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Funds may be required to pay more at settlement than the security is worth. In addition, the Funds are not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Funds assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, the Funds’ maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown in the Schedules of Investments.

Municipal Bonds Transferred to TOBs: The Funds leverage their assets through the use of TOBs. A TOB is a special purpose entity established by a third party sponsor, into which a fund, or an agent on behalf of the funds, transfers municipal bonds into a trust (“TOB Trust”). Other funds managed by the investment advisor may also contribute municipal bonds to a TOB into which a Fund has contributed bonds. A TOB typically issues two classes of beneficial interests: short-term floating rate certificates (“TOB Trust Certificates”), which are sold to third party investors, and residual certificates (“TOB Residuals”), which are generally issued to the participating funds that contributed the municipal bonds to the TOB Trust. If multiple funds participate in the same TOB, the rights and obligations under the TOB Residual will be shared among the funds ratably in proportion to their participation.

The TOB Residuals held by a Fund include the right of a Fund (1) to cause the holders of a proportional share of the TOB Trust Certificates to tender their certificates at par plus accrued interest upon the occurrence of certain mandatory tender events defined in the TOB agreements, and (2) to transfer, subject to a specified number of days’ prior notice, a corresponding share of the municipal bonds from the TOB to a Fund. The TOB may also be collapsed without the consent of a Fund, as the TOB Residual holder, upon the occurrence of certain termination events as defined in the TOB agreements. Such termination events may include the bankruptcy or default of the municipal bond, a substantial downgrade in credit quality of the municipal bond, the inability of the TOB to obtain renewal of the liquidity support agreement, a substantial decline in market value of the municipal bond and a judgment or ruling that interest on the municipal bond is subject to federal income taxation. Upon the occurrence of a termination event, the TOB would generally be liquidated in full with the proceeds typically applied first to any accrued fees owed to the trustee, remarketing agent and liquidity provider, and then to the holders of the TOB Trust Certificates up to par plus accrued interest owed on the TOB Trust Certificates, with the balance paid out to the TOB Residual holder. During the six months ended October 31, 2014, no TOBs in which the Funds participated were terminated without the consent of the Funds.

The cash received by the TOB from the sale of the TOB Trust Certificates, less transaction expenses, is paid to a Fund. The Fund typically invests the cash received in additional municipal bonds. Each Fund’s transfer of the municipal bonds to a TOB Trust is accounted for as a secured borrowing; therefore, the municipal bonds deposited into a TOB are presented in the Funds’ Schedules of Investments and the TOB Trust Certificates are shown in other liabilities in the Statements of Assets and Liabilities. The carrying amount of each Fund’s payable to the holder of the TOB Trust Certificates, as reported in Statement of Assets and Liabilities as TOB Trust Certificates, approximate its fair value.

The Funds may invest in TOBs on either a non-recourse or recourse basis. TOB Trusts are typically supported by a liquidity facility provided by a bank or other financial institution (the “Liquidity Provider”) that allows the holders of the TOB Trust Certificates to tender their certificates in exchange for payment

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    83


Notes to Financial Statements (continued)     

 

from the Liquidity Provider of par plus accrued interest on any business day prior to the occurrence of the termination events described above. When a Fund invests in TOBs on a non-recourse basis, and the Liquidity Provider is required to make a payment under the liquidity facility due to a termination event, the Liquidity Provider will typically liquidate all or a portion of the municipal securities held in the TOB Trust and then fund, on a net basis, the balance, if any, of the amount owed under the liquidity facility over the liquidation proceeds (the “Liquidation Shortfall”). If a Fund invests in a TOB on a recourse basis, the Funds will typically enter into a reimbursement agreement with the Liquidity Provider where the Fund is required to repay the Liquidity Provider the amount of any Liquidation Shortfall. As a result, a Fund investing in a recourse TOB will bear the risk of loss with respect to any Liquidation Shortfall. If multiple Funds participate in any such TOB, these losses will be shared ratably, including the maximum potential amounts owed by Funds at October 31, 2014 in proportion to their participation. The recourse TOB Trusts are identified in the Schedule of Investments including the maximum potential amounts owed by the Funds at October 31, 2014.

Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by the Funds 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 shown as interest expense, fees and amortization of offering costs in the Statements of Operations. The TOB Trust Certificates have interest rates that generally reset weekly and their holders have the option to tender such certificates to the TOB for redemption at par at each reset date. At October 31, 2014, the aggregate value of the underlying municipal bonds transferred to TOBs, the related liability for TOB Trust Certificates and the range of interest rates on the liability for TOB Trust Certificates were as follows:

 

     Underlying
Municipal
Bonds
Transferred to
TOBs
     Liability for
TOB Trust
Certificates
     Range of
Interest Rates
 

MUA

  $ 129,357,421       $ 71,144,505         0.05% - 0.40%   

MEN

  $ 146,442,145       $ 75,113,873         0.05% - 0.33%   

MHD

  $ 102,682,923       $ 56,783,700         0.05% - 0.25%   

MUH

  $ 78,061,881       $ 43,568,059         0.05% - 0.25%   

MUS

  $ 46,419,667       $ 23,038,231         0.05% - 0.30%   

MUI

  $ 114,942,765       $ 63,051,845         0.05% - 0.12%   

MVT

  $ 127,986,879       $ 66,569,588         0.05% - 0.24%   

For the six months ended October 31, 2014, the Funds’ average TOB Trust Certificates outstanding and the daily weighted average interest rate, including fees, were as follows:

 

     Average TOB
Trust
Certificates
Outstanding
     Daily
Weighted
Average
Interest Rate
 

MUA

  $ 71,144,505         0.70%   

MEN

  $ 73,416,408         0.63%   

MHD

  $ 57,810,375         0.60%   

MUH

  $ 45,019,615         0.60%   

MUS

  $ 23,672,945         0.64%   

MUI

  $ 64,766,742         0.61%   

MVT

  $ 66,651,447         0.59%   

Should short-term interest rates rise, the Funds’ investments in TOBs may adversely affect the Funds’ net investment income and dividends to Common Shareholders. Also, fluctuations in the market value of municipal bonds deposited into the TOB Trust may adversely affect the Funds’ NAVs per share.

4. Derivative Financial Instruments:

The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and/or to economically hedge their exposure to certain risks such as interest rate risk. These contracts may be transacted on an exchange.

Financial Futures Contracts: The Funds purchase and/or sell financial futures contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk). Financial futures contracts are agreements between the Funds and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date.

Upon entering into a financial futures contract, the Funds are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Securities deposited as initial margin are designated on the Schedules of Investments and cash deposited, if any, is recorded on the Statements of Assets and Liabilities as cash pledged for financial futures contracts. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin. Variation margin is recorded by the Funds as unrealized appreciation or depreciation, and if, applicable as a receivable or payable for variation margin in the Statements of Assets and Liabilities.

 

                
84    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Notes to Financial Statements (continued)     

 

When the contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures contracts involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.

The following is a summary of the Funds’ derivative financial instruments categorized by risk exposure:

 

Fair Value of Derivative Financial Instruments as of October 31, 2014  
         Value  
         Derivatives Assets  
      Statements of Assets and Liabilities Location   MUA     MEN     MHD     MUH     MUS     MUI     MVT  
Interest rate contracts:                 

Financial futures contracts

   Net unrealized appreciation1   $ 119,078      $ 229,685      $ 60,534      $ 45,292      $ 11,427      $ 29,965      $ 81,492   

 

  1   

Includes cumulative appreciation/depreciation on financial futures contracts, if any, as reported in the Schedules of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

 

The Effect of Derivative Financial Instruments in the Statements of Operations
Six Months Ended October 31, 2014
 
     Net Realized Loss From  
     MUA      MEN      MHD      MUH           MUS      MUI      MVT  
Interest rate contracts:                       

Financial futures contracts

   $ (1,481,213    $ (996,446    $ (794,602    $ (535,069        $ (389,073    $ (1,301,418    $ (983,696
     Net Change in Unrealized Appreciation/Depreciation on  
     MUA      MEN      MHD      MUH           MUS      MUI      MVT  
Interest rate contracts:                       

Financial futures contracts

   $ 230,553       $ 324,409       $ 143,775       $ 85,344           $ 30,096       $ 112,429       $ 155,609   

For the six months ended October 31, 2014, the average quarterly balances of outstanding derivative financial instruments were as follows:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  
Financial futures contracts:                    

Average number of contracts sold

    375         219         184         136         155         478         250   

Average notional value of contracts sold

  $ 47,056,641       $ 27,481,078       $ 23,089,125       $ 17,065,875       $ 19,477,203       $ 59,986,602       $ 31,371,094   

Counterparty Credit Risk: A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

With exchange-traded futures there is less counterparty credit risk to the Funds since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally, credit risk exists in exchange traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Funds.

5. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate, for 1940 Act purposes, of BlackRock, Inc. (“BlackRock”).

Each Fund entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Funds’ investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of each Fund’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each Fund. For such services, each Fund pays the Manager a monthly fee at an annual rate of each Fund’s average daily net assets at the following annual rates:

 

MUA

    0.55%   

MEN

    0.50%   

MHD

    0.55%   

MUH

    0.55%   

MUS

    0.55%   

MUI

    0.55%   

MVT

    0.50%   

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    85


Notes to Financial Statements (continued)     

 

Average daily net assets are the average daily value of each Fund’s total assets minus its total accrued liabilities.

The Manager, for the MUS, voluntarily agreed to waive its investment advisory fee on the proceeds of Preferred Shares and TOBs that exceed 35% of total assets minus the sum of its accrued liabilities. This amount is included in fees waived by Manager in the Statements of Operations. For the six months ended October 31, 2014 the waiver was $25,759.

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through its investment in affiliated money market funds. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with each Fund’s investment in other affiliated investment companies, if any. These amounts are included in fees waived by Manager in the Statements of Operations.

Prior to July 1, 2014, BlackRock Investment Management, LLC (“BIM”), an affiliate of the Manager, served as a sub-advisor to each of the Funds pursuant to sub-advisory agreements with the Manager, and received for its services a monthly fee from the Manager at an annual rate equal to a percentage of the investment advisory fees paid by each Fund to the Manager under the Investment Advisory Agreements. Effective July 1, 2014, the sub-advisory agreements between the Manager and BIM, with respect to each Fund, expired.

Certain officers and/or directors of the Funds are officers and/or directors of BlackRock or its affiliates. The Funds reimburse the Manager for a portion of the compensation paid to the Funds’ Chief Compliance Officer, which is included in officer and directors in the Statements of Operations.

The Funds may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common trustees. For the six months ended October 31, 2014, the purchase and sale transactions with an affiliated fund in compliance with Rule 17a-7 under the 1940 Act for MUA were $1,667,050.

6. Purchases and Sales:

Purchases and sales of investments, excluding short-term securities, for the six months ended October 31, 2014, were as follows:

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Purchases

  $ 68,763,416       $ 33,501,182       $ 17,673,485       $ 13,080,232       $ 18,724,444       $ 57,667,886       $ 21,860,878   

Sales

  $ 63,715,985       $ 30,172,778       $ 21,256,964       $ 19,138,117       $ 16,464,442       $ 60,638,492       $ 26,710,035   

7. Income Tax Information:

It is the Funds’ policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to their shareholders. Therefore, no federal income tax provision is required.

Each Fund files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Funds’ U.S. federal tax returns remains open for each of the four years ended April 30, 2014. The statutes of limitations on each Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application to the Funds’ facts and circumstances and does not believe that there are any uncertain tax positions that require recognition of a tax liability.

As of April 30, 2014, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:

 

Expires April 30,   MUA      MEN      MHD      MUH      MUS      MUI      MVT  

2015

  $ 4,897,756                                                   

2016

    901,327       $ 2,450,150                                       $ 2,741,816   

2017

    3,645,754         3,540,378                       $ 494,294                   

2018

    396,366         1,225,298                         6,614,798                   

2019

    2,194,154         732,655                                           

No expiration date1

            2,009,930       $ 662,351       $ 900,214         7,659,776       $ 447,981         1,713,184   
 

 

 

 

Total

  $ 12,035,357       $ 9,958,411       $ 662,351       $ 900,214       $ 14,768,868       $ 447,981       $ 4,455,000   
 

 

 

 

 

  1   

Must be utilized prior to losses subject to expiration.

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

 

     MUA      MEN      MHD      MUH      MUS      MUI      MVT  

Tax cost

  $ 472,058,193       $ 448,895,065       $ 298,921,329       $ 214,161,517       $ 246,694,755       $ 824,721,113       $ 427,912,818   
 

 

 

 

Gross unrealized appreciation

  $ 53,840,841       $ 56,021,036       $ 40,277,872       $ 29,370,045       $ 29,299,525       $ 71,603,984       $ 57,256,787   

Gross unrealized depreciation

    (20,030,736      (1,734,522      (1,417,624      (1,137,994      (361,405      (2,812,166      (2,106,622
 

 

 

 

Net unrealized appreciation

  $ 33,810,105       $ 54,286,514       $ 38,860,248       $ 28,232,051       $ 28,938,120       $ 68,791,818       $ 55,150,165   
 

 

 

 

 

                
86    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Notes to Financial Statements (continued)     

 

8. Principal Risks:

MEN, MHD, MUH, MUS, MUI, and MVT invest a substantial amount of their assets in issuers located in a single state or limited number of states. Please see the Schedules of Investments for concentrations in specific states or U.S. territories.

Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.

In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may fail to or be unable to perform on its commitments. The Funds manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Funds.

As of October 31, 2014, MUA invested a significant portion of their assets in securities in the Health sector; MEN, MUS and MUI invested a significant portion of their assets in securities in the County/City/Special District/School District sector; MUA, MEN, MHD, MUS, MUI and MVT invested a significant portion of their assets in securities in the Transportation sector. Changes in economic conditions affecting the Health, County/City/Special District/School District or Transportation sectors would have a greater impact on the Funds and could affect the value, income and/or liquidity of positions in such securities.

The Funds may hold a significant amount of bonds subject to calls by the issuers at defined dates and prices. When bonds are called by issuers and the Funds reinvest the proceeds received, such investments may be in securities with lower yields than the bonds originally held, and correspondingly, could adversely impact the yield and total return performance of a fund.

On December 10, 2013, regulators published final rules implementing section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”), which prohibit banking entities from engaging in proprietary trading of certain instruments and limit such entities’ investments in, and relationships with, “covered funds”, as defined in the rules. Banking entities subject to the Volcker Rule are required to fully comply by July 21, 2015 and recently has been extended for certain covered funds. The Volcker rule may preclude banking entities and their affiliates from (i) sponsoring TOB trust programs (as such programs are presently structured) and (ii) continuing relationships with or services for existing TOB trust programs. As a result, TOB trusts may need to be restructured or unwound. There can be no assurances that TOB trusts can be restructured, that new sponsors of TOB trusts will develop, or that alternative forms of leverage will be available to the Funds. Any alternative forms of leverage may be more or less advantageous to the Funds than existing TOB leverage.

TOB transactions constitute an important component of the municipal bond market. Accordingly, implementation of the Volcker Rule may adversely impact the municipal market, including through reduced demand for and liquidity of municipal bonds and increased financing costs for municipal issuers. Any such developments could adversely affect the Funds. The ultimate impact of these rules on the TOB market and the overall municipal market is not yet certain.

9. Capital Share Transactions:

Each Fund is authorized to issue 200 million shares, all of which were initially classified as Common Shares. The par value for each Fund’s Common Shares is $0.10. The par value for each Funds’ Preferred Shares outstanding is $0.10. The Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without approval of Common Shareholders.

Common Shares

For the years shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:

 

    

Six Months Ended

October 31, 2014

     Year Ended
April 30, 2014
 

MEN

            20,577   

MHD

            9,784   

MVT

    10,289         75,746   

Shares issued and outstanding remained constant for MUA, MUH, MUS and MUI for the six months ended October 31, 2014 and for the year ended April 30, 2014.

Preferred Shares

Each Fund’s Preferred Shares rank prior to the Fund’s Common Shares as to the payment of dividends by the Fund and distribution of assets upon dissolution or liquidation of the Fund. The 1940 Act prohibits the declaration of any dividend on the Funds’ Common Shares or the repurchase of the

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    87


Notes to Financial Statements (continued)     

 

Funds’ Common Shares if the Funds fail to maintain the asset coverage of at least 200% of the liquidation preference of the outstanding Preferred Shares. In addition, pursuant to the Preferred Shares’ governing instrument, the Funds are restricted from declaring and paying dividends on classes of shares ranking junior to or on parity with the Preferred Shares or repurchasing such shares if the Funds fail to declare and pay dividends on the Preferred Shares, redeem any Preferred Shares required to be redeemed under the Preferred Shares, governing instrument or comply with the basic maintenance amount requirement of the rating agencies then rating the Preferred Shares.

The holders of Preferred Shares have voting rights equal to the holders of Common Shares (one vote per share) and will vote together with holders of Common Shares (one vote per share) as a single class. However, the holders of Preferred Shares, voting as a separate class, are also entitled to elect two Directors for each Fund. In addition, the 1940 Act requires that along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding Preferred Shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Fund’s sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.

VRDP Shares

MEN has issued Series W-7 VRDP Shares, $100,000 liquidation value per share, in a privately negotiated offering. The VRDP Shares were offered to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act of 1933, as amended, (the “Securities Act”) and include a liquidity feature, pursuant to a liquidity agreement, that allows the holders of VRDP Shares to have their shares purchased by the liquidity provider in the event of a failed remarketing. MEN is required to redeem the VRDP Shares owned by the liquidity provider after six months of continuous, unsuccessful remarketing. Upon the occurrence of the first unsuccessful remarketing, the Fund is required to segregate liquid assets to fund the redemption. The VRDP Shares are subject to certain restrictions on transfer. MUI redeemed all its VRDP Shares on December 21, 2012.

The VRDP Shares outstanding as of six months ended October 31, 2014 were as follows:

 

     Issue Date      Shares Issued      Aggregate Principal      Maturity Date  

MEN

    5/19/11         1,425       $ 142,500,000         6/01/41   

MEN entered into a fee agreement with the liquidity provider that may require a per annum liquidity fee payable to the liquidity provider. These fees, if applicable, are shown as liquidity fees in the Statements of Operations.

The fee agreement between the MEN and the liquidity provider is for a three year term and is scheduled to expire on July 9, 2015 unless renewed or terminated in advance.

In the event the fee agreement is not renewed or is terminated in advance, and the Fund does not enter into a fee agreement with an alternate liquidity provider, the VRDP Shares will be subject to mandatory purchase by the liquidity provider prior to the termination of the fee agreement. the Fund is required to redeem any VRDP Shares purchased by the liquidity provider six months after the purchase date. Immediately after the purchase of any VRDP Shares by the liquidity provider, the Fund is required to begin to segregate liquid assets with the Fund’s custodian to fund the redemption. There is no assurance the Fund will replace such redeemed VRDP Shares with any other preferred shares or other form of leverage.

MEN is required to redeem its VRDP Shares on the maturity date, unless earlier redeemed or repurchased. Six months prior to the maturity date, MEN is required to begin to segregate liquid assets with the Fund’s custodian to fund the redemption. In addition, MEN is required to redeem certain of its outstanding VRDP Shares if it fails to maintain certain asset coverage, basic maintenance amount or leverage requirements.

Subject to certain conditions, the VRDP Shares may be redeemed, in whole or in part, at any time at the option of MEN. The redemption price per VRDP Share is equal to the liquidation value per share plus any outstanding unpaid dividends. In the event of an optional redemption of the VRDP Shares prior to the initial termination date of the fee agreement, MEN must pay the respective liquidity provider fees on such redeemed VRDP Shares for the remaining term of the fee agreement up to the initial termination date.

Dividends on the VRDP Shares are payable monthly at a variable rate set weekly by the remarketing agent. Such dividend rates are generally based upon a spread over a base rate and cannot exceed a maximum rate. In the event of a failed remarketing, the dividend rate of the VRDP Shares will be reset to a maximum rate. The maximum rate is determined based on, among other things, the long-term preferred share rating assigned to the VRDP Shares and the length of time that the VRDP Shares fail to be remarketed. At the date of issuance, the VRDP Shares were assigned a long-term rating of Aaa from Moody’s and AAA from Fitch. Subsequent to the issuance of the VRDP Shares, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of October 31, 2014, the VRDP Shares were assigned a long-term rating of Aa1 from Moody’s under its new ratings methodology. The VRDP Shares continue to be assigned a long-term rating of AAA from Fitch.

For financial reporting purposes, the VRDP Shares are considered debt of the issuer; therefore, the liquidation value, which approximates fair value, of the VRDP Shares is recorded as a liability in the Statements of Assets and Liabilities. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends accrued and paid on the VRDP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VRDP Shares are treated as equity for tax purposes. Dividends paid to holders of the VRDP Shares are generally classified as tax-exempt income for tax-reporting purposes.

 

                
88    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Notes to Financial Statements (continued)     

 

MEN may incur remarketing fees of 0.10% on the aggregate principal amount of all the VRDP Shares, which, if any, are included in remarketing fees on Preferred Shares in the Statements of Operations. None of the VRDP Shares were tendered for remarketing during the six months ended October 31, 2014.

The annualized dividend rates for the VRDP Shares for the six months ended October 31, 2014 were as follows:

 

     Rate  

MEN

    1.00%   

On June 20, 2012, MEN announced a special rate period for a three-year term ending June 24, 2015 with respect to its VRDP Shares. The liquidity and fee agreements remain in effect for the duration of the special rate period and the VRDP shares are still subject to mandatory redemption by the VRDP Funds on maturity date. The VRDP Shares will not be remarketed or subject to optional or mandatory tender events during such time. During the special rate period, MEN is required to maintain the same asset coverage, basic maintenance amount and leverage requirements for the VRDP Shares. MEN will not pay any liquidity and remarketing fees during the special rate period and instead will pay dividends monthly based on the sum of Securities Industry and Financial Markets Association Municipal Swap Index (“SIFMA”) and a percentage per annum based on the long-term ratings assigned to the VRDP Shares. The short-term ratings were withdrawn by Moody’s, Fitch and/or S&P upon the commencement of the special rate period. Short-term ratings may be re-assigned upon the termination of the special rate period when the VRDP Shares revert back to remarketable securities.

If MEN redeems the VRDP Shares on a date that is one year or more before the end of the special rate period and the VRDP Shares are rated above A1/A by Moody’s and Fitch respectively, then such redemption is subject to a redemption premium payable to the holder of the VRDP Shares based on the time remaining in the special rate period, subject to certain exceptions for redemptions that are required to maintain minimum asset coverage requirements. After June 24, 2015, the holder of the VRDP Shares and MEN may mutually agree to extend the special rate period. If the special rate period is not extended, the VRDP Shares will revert back to remarketable securities and will be remarketed and available for purchase by qualified institutional investors.

VRDP Shares issued and outstanding remained constant for the six months ended October 31, 2014.

VMTP Shares

MHD, MUH, MUS, MUI and MVT (collectively, the “VMTP Funds”), have issued Series W-7 VMTP Shares, $100,000 liquidation value per share, in a privately negotiated offering and sale of VMTP Shares exempt from registration under the Securities Act.

On December 7, 2012, MUI issued Series W-7 VMTP Shares, $100,000 liquidation value per share with a maturity date of January 4, 2016. Total proceeds received of $287,100,000 in a private offering of VMTP Shares were used to redeem all of MUI’s existing VRDP Shares on December 21, 2012. The fee agreement for MUI’s VRDP Shares with the liquidity provider which was for a two year term and was scheduled to expire on December 28, 2012 was terminated upon issuance of the VMTP Shares.

The VMTP Shares outstanding as of six months ended October 31, 2014 were as follows:

 

     Issue Date      Shares Issued      Aggregate Principal      Term Date  

MHD

    12/16/11         837       $ 83,700,000         12/31/15   

MUH

    12/16/11         550       $ 55,000,000         12/31/15   

MUS

    12/16/11         870       $ 87,000,000         12/31/15   

MUI

    12/07/12         2,871       $ 287,100,000         1/04/16   

MVT

    12/16/11         1,400       $ 140,000,000         12/31/15   

Each VMTP Fund is required to redeem its VMTP Shares on the term date, unless earlier redeemed or repurchased or unless extended. During the period, the term dates for MHD, MUH, MUS and MVT were extended until December 31, 2015. There is no assurance that the term of a Fund’s VMTP Shares will be extended further or that a Fund’s VMTP Shares will be replaced with any other preferred shares or other form of leverage upon the redemption or repurchase of the VMTP Shares. Six months prior to term date, each VMTP Fund is required to begin to segregate liquid assets with the Fund’s custodian to fund the redemption. In addition, each VMTP Fund is required to redeem certain of its outstanding VMTP Shares if it fails to maintain certain asset coverage, basic maintenance amount or leverage requirements.

Subject to certain conditions, a Fund’s VMTP Shares may be redeemed, in whole or in part, at any time at the option of the Fund. The redemption price per VMTP Share is equal to the liquidation value per share plus any outstanding unpaid dividends and applicable redemption premium. If the Funds redeem the VMTP Shares on a date that is one year or more prior to the term date and the VMTP Shares are rated above A1/A+ by Moody’s and Fitch, respectively, then such redemption is subject to a prescribed redemption premium (up to 3% of the liquidation preference) payable to the holder of the VMTP Shares based on the time remaining to the term date, subject to certain exceptions for redemptions that are required to maintain minimum asset coverage requirements. The VMTP Shares are subject to certain restrictions on transfer, and a Fund may also be required to register the VMTP Shares for sale under the Securities Act under certain circumstances. In addition, amendments to the VMTP governing document generally require the consent of the holders of VMTP Shares.

Dividends on the VMTP Shares are declared daily and payable monthly at a variable rate set weekly at a fixed rate spread to the SIFMA. The fixed spread is determined based on the long-term preferred share rating assigned to the VMTP Shares by Moody’s and Fitch. At the date of issuance, the VMTP Shares

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    89


Notes to Financial Statements (continued)     

 

were assigned long-term ratings of Aaa from Moody’s and AAA from Fitch. Subsequent to the issuance of the VMTP Shares, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of October 31, 2014, the VMTP Shares were assigned a long-term rating of Aa1 from Moody’s under its new rating methodology. The VMTP Shares continue to be assigned a long-term rating of AAA from Fitch. The dividend rate on the VMTP Shares is subject to a step-up spread if the Funds fail to comply with certain provisions, including, among other things, the timely payment of dividends, redemptions or gross-up payments, and maintaining certain asset coverage and leverage requirements.

The average annualized dividend rates for the VMTP Shares for the six months ended October 31, 2014 were as follows:

 

     Rate  

MHD

    1.05%   

MUH

    1.05%   

MUS

    1.05%   

MUI

    1.05%   

MVT

    1.05%   

For financial reporting purposes, the VMTP Shares are considered debt of the issuer; therefore the liquidation value, which approximates fair value, of the VMTP Shares is recorded as a liability in the Statements of Assets and Liabilities. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends accrued and paid on the VMTP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VMTP Shares are treated as equity for tax purposes. Dividends paid to holders of the VMTP Shares are generally classified as tax-exempt income for tax-reporting purposes.

VMTP Shares issued and outstanding remained constant for the six months ended October 31, 2014.

Offering Costs: The Funds, with the exception of MUA, incurred costs in connection with the issuance of VRDP Shares and/or VMTP Shares. For VRDP Shares, these costs were recorded as a deferred charge and will be amortized over the 30-year life of the VRDP Shares with the exception of upfront fees paid to the liquidity provider which were amortized over the life of the liquidity agreement. For VMTP Shares, these costs were recorded as a deferred charge and will be amortized over the 3-year life of the VMTP Shares. Amortization of these costs is included in interest expense, fees and amortization of offering costs in the Statements of Operations.

MUI’s offering costs that were recorded as a deferred charge and amortized over the 30-year life of the VRDP Shares were accelerated and charged to expense immediately upon redemption of MUI’s VRDP Shares. Costs incurred in connection with the issuance of MUI’s VMTP Shares will be recorded as a deferred charge and amortized over the three-year life of the VMTP Shares.

10. Subsequent Events

Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following items were noted:

The Funds paid a net investment income dividend in the following amounts per share on December 1, 2014 to Shareholders of record on November 14, 2014:

 

     Common
Dividend
Per Share
 

MUA

  $ 0.0625   

MEN

  $ 0.0605   

MHD

  $ 0.0885   

MUH

  $ 0.0830   

MUS

  $ 0.0675   

MUI

  $ 0.0685   

MVT

  $ 0.0830   

Additionally, the Funds declared dividends on December 1, 2014 payable to Common Shareholders of record on December 12, 2014:

 

     Per Common Share  
     Tax-Exempt
Dividends Declared
     Ordinary
Dividends Declared
 

MUA

  $ 0.0625       $ 0.0082   

MEN

  $ 0.0605       $ 0.0005   

MHD

  $ 0.0885           

MUH

  $ 0.0830           

MUS

  $ 0.0675           

MUI

  $ 0.0685       $ 0.0016   

MVT

  $ 0.0830       $ 0.0140   

 

                
90    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Notes to Financial Statements (concluded)     

 

The dividends declared on Preferred Shares for the period November 1, 2014 to November 30, 2014 for the Funds were as follows:

 

     Series      VRDP/VMTP
Dividends
Declared
 

MEN

    W-7       $ 116,693   

MHD

    W-7       $ 71,981   

MUH

    W-7       $ 47,301   

MUS

    W-7       $ 74,819   

MUI

    W-7       $ 246,906   

MVT

    W-7       $ 120,400   

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    91


Disclosure of Investment Advisory Agreements     

 

The Board of Directors (each, a “Board,” collectively, the “Boards,” and the members of which are referred to as “Board Members”) of BlackRock MuniAssets Fund, Inc. (“MUA”), BlackRock MuniEnhanced Fund, Inc. (“MEN”), BlackRock MuniHoldings Fund, Inc. (“MHD”), BlackRock MuniHoldings Fund II, Inc. (“MUH”), BlackRock MuniHoldings Quality Fund, Inc. (“MUS”), BlackRock Muni Intermediate Duration Fund, Inc. (“MUI”) and BlackRock MuniVest Fund II, Inc. (“MVT,” and together with MUA, MEN, MHD, MUH, MUS and MUI, each a “Fund,” and, collectively, the “Funds”) met in person on May 9, 2014 (the “May Meeting”) and June 5-6, 2014 (the “June Meeting”) to consider the approval of each Fund’s investment advisory agreement (each, an “Advisory Agreement,” and, collectively, the “Advisory Agreements”) with BlackRock Advisors, LLC (the “Manager”), each Fund’s investment advisor. At the June Meeting, it was noted that the sub-advisory agreement among the Manager, BlackRock Investment Management, LLC and each Fund would expire effective July 1, 2014. It was also noted that the non-renewal of each Fund’s sub-advisory agreement would not result in any change in the nature or quality of services provided to such Fund, or in the portfolio management team that serves such Fund. The Manager is referred to herein as “BlackRock.”

Activities and Composition of the Board

Each Board consists of eleven individuals, nine of whom are not “interested persons” of such Fund as defined in the Investment Company Act of 1940 (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of the Funds and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chairman of each Board is an Independent Board Member. Each Board has established six standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight Committee, an Executive Committee, and a Leverage Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Executive Committee and the Leverage Committee, each of which also has one interested Board Member).

The Advisory Agreements

Pursuant to the 1940 Act, each Board is required to consider the continuation of its Advisory Agreement on an annual basis. The Boards have four quarterly meetings per year, each extending over two days, and a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Advisory Agreements. In connection with this process, the Boards assessed, among other things, the nature, scope and quality of the services provided to the Funds by BlackRock, its personnel and its affiliates, including, as applicable, investment management, administrative, and shareholder services; oversight of fund service providers; marketing services; risk oversight; compliance and assistance in meeting applicable legal and regulatory requirements.

The Boards, acting directly and through their respective committees, consider at each of their meetings, and from time to time as appropriate, factors that are relevant to their annual consideration of the renewal of the Advisory Agreements, including the services and support provided by BlackRock to the Funds and their shareholders. Among the matters the Boards considered were: (a) investment performance for one-year, three-year, five-year and/or since inception periods, as applicable, against peer funds, and applicable benchmarks, if any, as well as senior management’s and portfolio managers’ analysis of the reasons for any over-performance or underperformance against their peers and/or benchmark, as applicable; (b) fees, including advisory, administration, if applicable, and other amounts paid to BlackRock and its affiliates by the Funds for services such as call center; (c) Fund operating expenses and how BlackRock allocates expenses to the Funds; (d) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Funds’ investment objective, policies and restrictions, and meeting new regulatory requirements; (e) the Funds’ compliance with their Code of Ethics and other compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (h) BlackRock’s implementation of the proxy voting policies approved by the Boards; (i) execution quality of portfolio transactions; (j) BlackRock’s implementation of the Funds’ valuation and liquidity procedures; (k) an analysis of management fees for products with similar investment objectives across the open-end fund, closed-end fund and institutional account product channels, as applicable; (l) BlackRock’s compensation methodology for its investment professionals and the incentives it creates; and (m) periodic updates on BlackRock’s business.

The Boards have engaged in an ongoing strategic review with BlackRock of opportunities to consolidate funds and of BlackRock’s commitment to investment performance. BlackRock also furnished information to the Boards in response to specific questions. These questions covered issues such as: BlackRock’s profitability; investment performance; subadvisory and advisory relationships with other clients (including mutual funds sponsored by third parties); investment professional investment in funds they manage; and management fee levels and breakpoints. The Boards further discussed with BlackRock: BlackRock’s management structure; portfolio turnover; BlackRock’s portfolio manager compensation and performance accountability; marketing support for the Funds; services provided to the Funds by BlackRock affiliates; and BlackRock’s oversight of relationships with third party service providers.

The Board of each of MEN, MHD, MUH, MUS, MUI and MVT considered BlackRock’s efforts during the past year with regard to refinancing outstanding AMPS, as well as ongoing time and resources devoted to other forms of preferred shares and alternative leverage. As of the date of this report, each of MEN, MHD, MUH, MUS, MUI and MVT has redeemed 100% of its outstanding AMPS.

Board Considerations in Approving the Advisory Agreements

The Approval Process: Prior to the May Meeting, the Boards requested and received materials specifically relating to the Advisory Agreements. The Boards are continuously engaged in a process with their independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist their deliberations. The materials provided in connection with the May Meeting included (a) information independently compiled and prepared

 

                
92    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Disclosure of Investment Advisory Agreements (continued)

 

by Lipper, Inc. (“Lipper”) on Fund fees and expenses as compared with a peer group of funds as determined by Lipper (“Expense Peers”) and the investment performance of the Funds as compared with a peer group of funds as determined by Lipper1 and a customized peer group selected by BlackRock; (b) information on the profits realized by BlackRock and its affiliates pursuant to the Advisory Agreements and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees charged to other clients, such as institutional clients and open-end funds, under similar investment mandates, as applicable; (d) review of non-management fees; (e) the existence, impact and sharing of potential economies of scale; (f) a summary of aggregate amounts paid by each Fund to BlackRock and (g) if applicable, a comparison of management fees to similar BlackRock closed-end funds, as classified by Lipper.

At the May Meeting, the Boards reviewed materials relating to their consideration of the Advisory Agreements. As a result of the discussions that occurred during the May Meeting, and as a culmination of the Boards’ year-long deliberative process, the Boards presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written information in advance of the June Meeting.

At the June Meeting, each Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and its Fund for a one-year term ending June 30, 2015. In approving the continuation of the Advisory Agreements, the Boards considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of the Funds and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with the Funds; (d) the Funds’ costs to investors compared to the costs of Expense Peers and performance compared to the relevant performance comparison as previously discussed; (e) economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of its relationship with the Funds; and (g) other factors deemed relevant by the Board Members.

The Boards also considered other matters they deemed important to the approval process, such as payments made to BlackRock or its affiliates relating to securities lending, services related to the valuation and pricing of Fund portfolio holdings, direct and indirect benefits to BlackRock and its affiliates from their relationship with the Funds and advice from independent legal counsel with respect to the review process and materials submitted for the Boards’ review. The Boards noted the willingness of BlackRock personnel to engage in open, candid discussions with the Boards. The Boards did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: The Boards, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of the Funds. Throughout the year, each Board compared its Fund’s performance to the performance of a comparable group of closed-end funds and/or the performance of a relevant benchmark, as applicable. The Boards met with BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers. Each Board also reviewed the materials provided by its Fund’s portfolio management team discussing the Fund’s performance and the Fund’s investment objective, strategies and outlook.

Each Board considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and its Fund’s portfolio management team; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. Each Board engaged in a review of BlackRock’s compensation structure with respect to its Fund’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives.

In addition to advisory services, the Boards considered the quality of the administrative and other non-investment advisory services provided to the Funds. BlackRock and its affiliates provide the Funds with certain services (in addition to any such services provided to the Funds by third parties) and officers and other personnel as are necessary for the operations of the Funds. In particular, BlackRock and its affiliates provide the Funds with the following administrative services including, among others: (i) preparing disclosure documents, such as the prospectus and the statement of additional information in connection with the initial public offering, and periodic shareholder reports; (ii) preparing communications with analysts to support secondary market trading of the Funds; (iii) oversight of daily accounting and pricing; (iv) preparing periodic filings with regulators and stock exchanges; (v) overseeing and coordinating the activities of other service providers; (vi) organizing Board meetings and preparing the materials for such Board meetings; (vii) providing legal and compliance support; (viii) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger or consolidation of certain closed-end funds; and (ix) performing other administrative functions necessary for the operation of the Funds, such as tax reporting, fulfilling regulatory filing requirements and call center services. The Boards reviewed the structure and duties of BlackRock’s fund administration, shareholder services, legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of the Funds and BlackRock: Each Board, including the Independent Board Members, also reviewed and considered the performance history of its Fund. In preparation for the May Meeting, the Boards worked with their independent legal counsel, BlackRock and Lipper to develop a template for, and were provided with reports independently prepared by Lipper, which included a comprehensive analysis of each Fund’s performance. The Boards also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock, which analyzed various factors that affect Lipper’s rankings. In connection with its review, each Board received and reviewed information regarding the investment performance, based on

 

1   

Funds are ranked by Lipper in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    93


Disclosure of Investment Advisory Agreements (continued)

 

net asset value (NAV), of its Fund as compared to other funds in that Fund’s applicable Lipper category, and the customized peer group selected by BlackRock. The Boards were provided with a description of the methodology used by Lipper to select peer funds and periodically meets with Lipper representatives to review its methodology. Each Board and its Performance Oversight Committee regularly review, and meet with Fund management to discuss, the performance of its Fund throughout the year.

The Board of MUA noted that for the one-, three- and five-year periods reported, MUA ranked second out of three funds, second out of three funds and first out of three funds, respectively, against its Customized Lipper Peer Group Composite.

The Board of MEN noted that for the one-, three- and five-year periods reported, MEN ranked in the first, second and second quartiles, respectively, against its Customized Lipper Peer Group Composite.

The Board of MHD noted that for the one-, three- and five-year periods reported, MHD ranked in the second, first and second quartiles, respectively, against its Customized Lipper Peer Group Composite.

The Board of MUH noted that for each of the one-, three- and five-year periods reported, MUH ranked in the second quartile against its Customized Lipper Peer Group Composite.

The Board of MUS noted that for the one-, three- and five-year periods reported, MUS ranked in the third, first and first quartiles, respectively, against its Customized Lipper Peer Group Composite. The Board of MUS and BlackRock reviewed and discussed the reasons for MUS’s underperformance during the one-year period and noted that they will monitor the Fund’s performance.

The Board of each of MUI and MVT noted that for each of the one-, three- and five-year periods reported, its respective Fund ranked in the first quartile against its Customized Lipper Peer Group Composite.

BlackRock believes that the Customized Lipper Peer Group Composite is an appropriate performance metric for each Fund in that it measures a blend of total return and yield.

C. Consideration of the Advisory/Management Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Funds: Each Board, including the Independent Board Members, reviewed its Fund’s contractual management fee rate compared with the other funds in its Lipper category. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. Each Board also compared its Fund’s total expense ratio, as well as its actual management fee rate, to those of other funds in its Lipper category. The total expense ratio represents a fund’s total net operating expenses, excluding any investment related expenses. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual management fee rate gives effect to any management fee reimbursements or waivers that benefit a fund. The Boards considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts.

The Boards received and reviewed statements relating to BlackRock’s financial condition. Each Board was also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to its Fund. Each Board reviewed BlackRock’s profitability with respect to its Fund and other funds the Board currently oversees for the year ended December 31, 2013 compared to available aggregate profitability data provided for the prior two years. The Boards reviewed BlackRock’s profitability with respect to certain other fund complexes managed by the Manager and/or its affiliates. The Boards reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Boards recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.

The Boards noted that, in general, individual fund or product line profitability of other advisors is not publicly available. The Boards reviewed BlackRock’s overall operating margin, in general, compared to that of certain other publicly-traded asset management firms. The Boards considered the differences between BlackRock and these other firms, including the contribution of technology at BlackRock, BlackRock’s expense management, and the relative product mix.

In addition, each Board considered the cost of the services provided to its Fund by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management of its Fund and the other funds advised by BlackRock and its affiliates. As part of its analysis, each Board reviewed BlackRock’s methodology in allocating its costs to the management of its Fund. Each Board also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Advisory Agreement for its Fund and to continue to provide the high quality of services that is expected by the Board. The Boards further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk and liability profile in servicing the Funds in contrast to what is required of BlackRock with respect to other products with similar investment objectives across the open-end fund, ETF, closed-end fund and institutional account product channels, as applicable.

The Board of MUA noted that MUA’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio each ranked in the first quartiles, respectively, relative to MUA’s Expense Peers.

 

                
94    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Disclosure of Investment Advisory Agreements (concluded)

 

The Board of each of MEN and MUS noted that its respective Fund’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio each ranked in the second quartile, relative to the Fund’s Expense Peers.

The Board of each of MHD and MUH noted that its respective Fund’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio ranked in the third and second quartiles, respectively, relative to the Fund’s Expense Peers. The Board of each of MHD and MUH determined that its respective Fund’s actual management fee rate was appropriate in light of the median actual management fee rate paid by the Fund’s Expense Peers.

The Board of MUI noted that MUI’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio each ranked in the third quartile, relative to the Expense Peers. The Board of MUI determined that MUI’s actual management fee rate and total expense ratio were appropriate in light of the median actual management fee rate and total expense ratio paid by MUI’s Expense Peers.

The Board of MVT noted that MVT’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio ranked in the second and first quartiles, respectively, relative to MVT’s Expense Peers.

D. Economies of Scale: Each Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of its Fund increase. Each Board also considered the extent to which its Fund benefits from such economies and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Fund to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the asset level of the Fund.

Based on the Boards’ review and consideration of the issue, the Boards concluded that most closed-end funds do not have fund level breakpoints because closed-end funds generally do not experience substantial growth after the initial public offering. They are typically priced at scale at a fund’s inception.

E. Other Factors Deemed Relevant by the Board Members: Each Board, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from their respective relationships with its Fund, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Fund, including securities lending and cash management services. The Boards also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Boards also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts. The Boards further noted that it had considered the investment by BlackRock’s funds in exchange traded funds (i.e., ETFs) without any offset against the management fees payable by the funds to BlackRock.

In connection with its consideration of the Advisory Agreements, the Boards also received information regarding BlackRock’s brokerage and soft dollar practices. The Boards received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.

Each Board noted the competitive nature of the closed-end fund marketplace, and that shareholders are able to sell their Fund shares in the secondary market if they believe that their Fund’s fees and expenses are too high or if they are dissatisfied with the performance of their Fund.

The Boards also considered the various notable initiatives and projects BlackRock performed in connection with its closed-end fund product line. These initiatives included completion of the refinancing of auction rate preferred securities; developing equity shelf programs; efforts to eliminate product overlap with fund mergers; ongoing services to manage leverage that has become increasingly complex; share repurchases and other support initiatives for certain BlackRock funds; and continued communications efforts with shareholders, fund analysts and financial advisers. With respect to the latter, the Independent Board Members noted BlackRock’s continued commitment to supporting the secondary market for the common shares of its closed-end funds through a comprehensive secondary market communication program designed to raise investor and analyst awareness and understanding of closed-end funds. BlackRock’s support services included, among other things: continuing communications concerning the refinancing efforts related to auction rate preferred securities; sponsoring and participating in conferences; communicating with closed-end fund analysts covering the BlackRock funds throughout the year; providing marketing and product updates for the closed-end funds; and maintaining and enhancing its closed-end fund website.

Conclusion

Each Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and its Fund for a one-year term ending June 30, 2015. Based upon its evaluation of all of the aforementioned factors in their totality, each Board, including the Independent Board Members, were satisfied that the terms of the Advisory Agreement were fair and reasonable and in the best interest of its Fund and its shareholders. In arriving at its decision to approve the Advisory Agreement for its Fund, the Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for the Funds reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. As a result, the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    95


Officers and Directors     

 

Richard E. Cavanagh, Chairman of the Board and Director

Karen P. Robards, Vice Chairperson of the Board, Chairperson of the Audit Committee and Director

Paul L. Audet, Director

Michael J. Castellano, Director and Member of the Audit Committee

Frank J. Fabozzi, Director and Member of the Audit Committee

Kathleen F. Feldstein, Director

James T. Flynn, Director and Member of the Audit Committee

Henry Gabbay, Director

Jerrold B. Harris, Director

R. Glenn Hubbard, Director

W. Carl Kester, Director and Member of the Audit Committee

John M. Perlowski, President and Chief Executive Officer

Robert W. Crothers, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer and Anti-Money Laundering Officer

Janey Ahn, Secretary

 

Effective September 5, 2014, Brendan Kyne resigned as a Vice President of the Funds.

 

         

Investment Advisor

BlackRock Advisors, LLC Wilmington, DE 19809

 

Custodians

The Bank of New York Mellon1
New York, NY 10286

 

State Street Bank and
Trust Company
2
Boston, MA 02110

 

VRDP Tender and Paying Agent and VMTP Redemption and Paying Agent

The Bank of New York Mellon New York, NY 10289

  

Accounting Agent

State Street Bank and
Trust Company
Boston, MA 02110

 

Legal Counsel

Skadden, Arps, Slate, Meagher & Flom LLP New York, NY 10036

 

Transfer Agent

Computershare Trust Company, N.A.

Canton, MA 02021

 

VRDP Remarketing Agents

Citigroup Global Markets Inc.3 New York, NY 10179

  

Independent Registered Public Accounting Firm

Deloitte & Touche LLP Boston, MA 02116

 

Address of the Funds

100 Bellevue Parkway Wilmington, DE 19809

   

VRDP Liquidity Providers

Citibank, N.A.3
New York, NY 10179

    

 

  1   

For MUA, MHD, MUH, MUS and MVT.

 

  2   

For MEN and MUI.

 

  3   

For MEN.

 

                
96    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Additional Information     

 

Proxy Results      

The Annual Meeting of Shareholders was held on July 30, 2014 for shareholders of record on June 3, 2014, to elect director nominees for each Fund. There were no broker non-votes with regard to any of the Funds.

MUA approved the Class I Directors as follows:

 

     

Paul L. Audet

  

Michael J. Castellano

  

R. Glenn Hubbard

      Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain

MUA

   32,804,607    1,174,547    0    32,728,726    1,250,428    0    32,718,941    1,260,213    0
    

W. Carl Kester

                        
      Votes For    Votes
Withheld
   Abstain                              

MUA

   32,759,022    1,220,132    0                              

For MUA, listed above, Directors whose term of office continued after the Annual Meeting of Shareholders because they were not up for election are Richard E. Cavanagh, Frank J. Fabozzi, Kathleen F. Feldstein, James T. Flynn, Henry Gabbay, Jerrold B. Harris and Karen P. Robards.

Each Fund other than MUA approved the Directors as follows:

 

     

Paul L. Audet

  

Michael J. Castellano

  

Richard E. Cavanagh

      Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain

MEN

   26,518,535    617,483    0    26,511,756    624,262    0    26,509,430    626,588    0

MHD

   12,528,783    269,058    0    12,572,484    225,357    0    12,491,815    306,026    0

MUH

     9,638,676    234,805    0      9,616,773    256,708    0      9,616,779    256,702    0

MUS

   11,088,817    629,017    0    11,014,437    703,397    0    11,015,535    702,299    0

MUI

   36,235,607    679,777    0    36,234,690    680,694    0    36,200,377    715,007    0

MVT

   19,255,192    542,350    0    19,234,190    563,352    0    19,200,622    596,920    0
    

Frank J. Fabozzi1

  

Kathleen F. Feldstein

  

James T. Flynn

      Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain

MEN

            1,425               0    0    26,444,240    691,778    0    26,487,787    648,231    0

MHD

               837               0    0    12,464,879    332,961    0    12,505,198    292,642    0

MUH

               550               0    0      9,587,694    285,787    0      9,613,712    259,769    0

MUS

               870               0    0    10,997,224    720,610    0    10,998,322    719,512    0

MUI

            2,871               0    0    36,039,805    875,579    0    36,110,349    805,035    0

MVT

            1,400               0    0    19,088,860    708,682    0    19,175,536    622,006    0
    

Henry Gabbay

  

Jerrold B. Harris

  

R. Glenn Hubbard

      Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain

MEN

   26,514,370    621,648    0    26,501,875    634,143    0    26,487,532    648,486    0

MHD

   12,509,719    288,122    0    12,497,402    300,439    0    12,441,346    356,495    0

MUH

     9,614,456    259,025    0      9,588,865    284,616    0      9,665,196    208,285    0

MUS

   11,015,535    702,299    0    11,004,945    712,889    0    11,089,146    628,688    0

MUI

   36,195,806    719,578    0    36,116,732    798,652    0    36,116,506    798,878    0

MVT

   19,183,629    613,913    0    19,178,167    619,375    0    19,135,649    661,893    0
    

W. Carl Kester1

  

Karen P. Robards

         
      Votes For    Votes
Withheld
   Abstain    Votes For    Votes
Withheld
   Abstain               

MEN

            1,425               0    0    26,490,277    645,741    0         

MHD

               837               0    0    12,508,707    289,134    0         

MUH

               550               0    0      9,642,066    231,415    0         

MUS

               870               0    0    11,089,146    628,688    0         

MUI

            2,871               0    0    36,214,363    701,021    0         

MVT

            1,400               0    0    19,148,605    648,937    0               

 

  ¹   Voted on by holders of preferred shares only.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    97


Additional Information (continued)     

 

Fund Certification      

 

The Funds are listed for trading on the NYSE and have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’s listing standards. Each Fund filed with the SEC the certification of its chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.

 

Dividend Policy

 

Each Fund’s dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of distributions, the Funds may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the distributions paid by the Funds for any particular month may be more or less than the amount of net investment income earned by the Funds during such month. The Funds’ current accumulated but undistributed net investment income, if any, is disclosed in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.

 

                
98    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Additional Information (continued)     

 

General Information

 

The Funds do not make available copies of their Statements of Additional Information because the Funds’ shares are not continuously offered, which means that the Statement of Additional Information of each Fund has not been updated after completion of the respective Fund’s offerings and the information contained in each Fund’s Statement of Additional Information may have become outdated.

During the period, there were no material changes in the Funds’ investment objectives or policies or to the Funds’ charters or by-laws that would delay or prevent a change of control of the Funds that were not approved by the shareholders or in the principal risk factors associated with investment in the Funds. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Funds’ portfolios.

Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Funds may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.

Electronic Delivery

Electronic copies of most financial reports are available on the Funds’ website or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the Funds’ electronic delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service.

Householding

The Funds will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Funds at (800) 882-0052.

Availability of Quarterly Schedule of Investments

The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Funds’ Forms N-Q may also be obtained upon request and without charge by calling (800) 882-0052.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    99


Additional Information (continued)     

 

General Information (concluded)

 

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 882-0052; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 882-0052 and (2) on the SEC’s website at http://www.sec.gov.

Availability of Fund Updates

BlackRock will update performance and certain other data for the Funds on a monthly basis on its website in the “Closed-end Funds” section of http://www.blackrock.com as well as certain other material information as necessary from time to time. Investors and others are advised to periodically check the website for updated performance information and the release of other material information about the Funds. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this report.

 

                
100    SEMI-ANNUAL REPORT    OCTOBER 31, 2014   


Additional Information (concluded)     

 

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 non-public 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 non-public 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 websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated 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 non-public 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 non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2014    101


This report is intended for existing shareholders. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. Certain of the Funds have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in the short-term dividend rates of the Preferred Shares may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.

 

 

LOGO

 

CEMUNI7-10/14-SAR    LOGO


Item 2 – Code of Ethics – Not Applicable to this semi-annual report

 

Item 3 – Audit Committee Financial Expert – Not Applicable to this semi-annual report

 

Item 4 – Principal Accountant Fees and Services – Not Applicable to this semi-annual report

 

Item 5 – Audit Committee of Listed Registrants – Not Applicable to this semi-annual report

 

Item 6 – Investments
   (a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.
   (b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

 

Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable to this semi-annual report

 

Item 8 – Portfolio Managers of Closed-End Management Investment Companies
  (a) Not Applicable to this semi-annual report
  (b) As of the date of this filing, there have been no changes in any of the portfolio managers identified in the most recent annual report on Form N-CSR.

 

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 – There have been no material changes to these procedures.

 

Item 11 – Controls and Procedures

 

   (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.

 

   (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 second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12 – Exhibits attached hereto

 

   (a)(1) – Code of Ethics – Not Applicable to this semi-annual report

 

   (a)(2) – Certifications – Attached hereto

 

   (a)(3) – Not Applicable

 

   (b) – Certifications – Attached hereto

 

2


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 MuniAssets Fund, Inc.

 

By:       /s/ John M. Perlowski                        
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock MuniAssets Fund, Inc.

Date: January 2, 2015

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 MuniAssets Fund, Inc.

Date: January 2, 2015

 

By:       /s/ Neal J. Andrews                            
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock MuniAssets Fund, Inc.

Date: January 2, 2015

 

3