BLACKROCK MUNIENHANCED FUND, INC.
Table of Contents

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 811-05739

Name of Fund: BlackRock MuniEnhanced Fund, Inc. (MEN)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniEnhanced 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: 04/30/2013

Date of reporting period: 10/31/2012


Table of Contents

Item 1 – Report to Stockholders


Table of Contents
LOGO    October 31, 2012

Semi-Annual Report (Unaudited)

 

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 • No Bank Guarantee • May Lose Value


Table of Contents
Table of Contents     

 

      Page  

Dear Shareholder

     3   

Semi-Annual Report:

  

Municipal Market Overview

     4   

Fund Summaries

     5   

Call/Maturity Structure

     12   

Derivative Financial Instruments

     12   

The Benefits and Risks of Leveraging

     13   
Financial Statements:   

Schedules of Investments

     14   

Statements of Assets and Liabilities

     53   

Statements of Operations

     54   

Statements of Changes in Net Assets

     55   

Statements of Cash Flows

     57   

Financial Highlights

     58   

Notes to Financial Statements

     65   

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

     74   

Officers and Directors

     78   

Additional Information

     79   

 

                
2    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Dear Shareholder

 

In the final months of 2011, financial markets were highly volatile but were in a mode of gradual improvement. Global central bank actions and better-than-expected economic data tempered investors’ anxiety after markets had been upended in the previous quarter by sovereign debt turmoil in the United States and Europe. Improving sentiment carried over into early 2012 as investors felt some relief from the world’s financial woes. Volatility was low and risk assets (including stocks, commodities and high yield bonds) moved boldly higher through the first two months of 2012, while climbing Treasury yields pressured higher-quality fixed income assets.

Markets reversed course in the spring when Europe’s debt problems boiled over once again. High levels of volatility returned as political instability threatened Greece’s membership in the eurozone and debt problems in Spain grew increasingly severe. Sovereign debt yields in peripheral European countries continued to rise while finance leaders deliberated over the fiscal integration of the currency bloc. Alongside the drama in Europe, investors were discouraged by gloomy economic reports from various parts of the world. A slowdown in China, a key powerhouse for global growth, emerged as a particular concern. In the United States, disappointing jobs reports dealt a crushing blow to investor sentiment. Risk assets sold off in the second quarter as investors retreated to safe haven assets.

Despite ongoing concerns about the health of the global economy and the debt crisis in Europe, most asset classes enjoyed a robust summer rally powered mainly by expectations for policy stimulus from central banks in Europe and the United States. Global economic data continued to be mixed, but the spate of downside surprises seen in the second quarter had receded and, outside of some areas of Europe, the risk of recession largely subsided. Additionally, in response to mounting debt pressures, the European Central Bank allayed fears by affirming its conviction to preserve the euro bloc. Early in September, the European Central Bank announced its plan to purchase sovereign debt in the eurozone’s most troubled nations. Later that month, the US Federal Reserve announced its long- awaited — and surprisingly aggressive — stimulus program, committing to purchase $40 billion of agency mortgage-backed securities per month until the US economy exhibits enough strength to sustain real growth and the labor market shows solid improvement. These central bank actions boosted investor confidence and risk assets rallied globally.

European stocks continued their advance in the final month of the reporting period as progress toward fiscal integration created a more positive atmosphere for investors. However, as corporate earnings season got underway in the United States, lackluster results pointed to the fragility of global growth and pushed US equity markets down for the month of October. The period ended with increasing concern about how and when US politicians would resolve the nation’s looming fiscal crisis, known as the “fiscal cliff.”

All asset classes performed well for the 12-month period ended October 31, 2012, with the strongest returns coming from US stocks and high yield bonds. For the six-month period ended October 31, 2012, equities underperformed fixed income investments, where high yield was the leading sector. US and international stocks finished the six-month period with modest gains, while emerging market stocks lagged other asset classes amid ongoing uncertainty. Near-zero short term interest rates continued to keep yields on money market securities near their all-time lows.

Although the financial world remains highly uncertain, we believe there are new avenues of opportunity — new ways to invest and new markets to consider. We believe it’s our responsibility to help investors adapt to today’s new world of investing and build the portfolios these times require. We encourage you to visit www.blackrock.com/newworld for more information.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

“Although the financial world remains highly uncertain, we believe there are new avenues of opportunity.”

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of October 31, 2012  
    6-month     12-month  

US large cap equities
(S&P 500® Index)

    2.16     15.21

US small cap equities
(Russell 2000® Index)

    0.95        12.08   

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

    2.12        4.61   

Emerging market
equities (MSCI Emerging Markets Index)

    (1.25     2.63   

3-month Treasury
bill (BofA Merrill Lynch 3-Month US Treasury
Bill Index)

    0.06        0.08   

US Treasury securities
(BofA Merrill Lynch 10-Year
US Treasury Index)

    3.49        7.46   

US investment grade
bonds (Barclays
US Aggregate
Bond Index)

    2.75        5.25   

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

    3.65        9.57   

US high yield bonds

(Barclays US Corporate
High Yield 2%
Issuer Capped Index)

    6.24        13.58   
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


Table of Contents
Municipal Market Overview     

 

For the 12-Month Period Ended October 31, 2012      

Municipal bonds delivered exceptional performance, with the S&P Municipal Bond Index gaining 9.57% for the 12 months ended October 31, 2012. In the later part of 2011, heightened volatility in equity markets led to increased demand for municipal bonds as investors flocked to more stable asset classes. The municipal market benefited from an exuberant Treasury market amid global uncertainty in addition to muted new issuance. Supply was constrained while demand from both traditional and non-traditional buyers was strong, pushing long-term municipal bond yields lower and sparking a curve-flattening trend that continued through year end. Ultimately, 2011 was one of the strongest performance years in municipal market history and municipal bonds outperformed most fixed income asset classes for the year.

 

LOGO

Market conditions remained favorable in 2012 even though supply picked up considerably. As the fiscal situation for municipalities continued to improve, the rate of new issuance came back in line with historical averages. Total new issuance for the first ten months of 2012 was $313 billion as compared to $288 billion for the entire year of 2011. It is important to note that refunding activity has accounted for a large portion of supply in 2012 as issuers refinanced their debt at lower interest rates. Refunding issues are easily absorbed by the market because when seasoned bonds are refinanced, issuers re-enter the market via cheaper and predominantly shorter-maturity financing. Investors, in turn, support these new issues with the proceeds from bond maturities or coupon payments.

Increased supply was met with the continuation of strong demand in 2012 as investors remained starved for yield in a low-rate environment. Investors poured into municipal bond mutual funds, particularly those with long-duration and high-yield investment mandates as they tend to provide higher levels of income. Year-to-date through October 2012, flows into municipal funds have totaled $48.034 billion (according to the Investment Company Institute). Following an extensive period of significant outflows from late 2010 through mid-2011, these robust 2012 inflows are telling of the complete turnaround in confidence. Municipal market supply-and-demand technicals typically strengthen considerably upon the conclusion of tax season as net negative supply takes hold (i.e., more bonds are being called and maturing than being issued) and this theme remained intact for 2012.

In the spring, a resurgence of concerns about Europe’s financial crisis and weakening US economic data drove municipal bond yields lower and prices higher. In addition to income and capital preservation, investors were drawn to the asset class for its relatively low volatility. As global sentiment improved over the summer, municipal bonds outperformed the more volatile US Treasury market. In September, unexpectedly muted new issuance drove prices higher. October, traditionally a weaker month for the municipal bond market, saw slight gains as demand continued to outpace supply. Given these positive market factors, the S&P Municipal Bond Index has gained 7.03% year-to-date through October 31, 2012.

Overall, the municipal yield curve moved lower during the period from October 31, 2011 to October 31, 2012. As measured by Thomson Municipal Market Data, yields declined by 93 basis points (“bps”) to 2.82% on AAA-rated 30-year municipal bonds and by 67 bps to 1.72% on 10-year bonds, while yields on 5-year issues fell 59 bps to 0.67%. While the entire municipal curve flattened over the 12-month time period, the spread between 2- and 30-year maturities tightened by 79 bps, and in the 2- to 10-year range, the spread tightened by 53 bps.

The fundamental picture for municipalities continues to improve. Austerity has been the general theme across the country as states set their budgets, although a small number of states continue to rely on a “kick-the-can” approach to close their budget gaps, using aggressive revenue projections and accounting gimmicks. It has been nearly two years since the fiscal problems plaguing state and local governments first became highly publicized and the prophecy of widespread defaults across the municipal market has not materialized. Year-to-date through October 2012, total outstanding municipal bonds entering into debt service cash-payment default for the first time had an aggregate par value of $1.99 billion. This amount represents only 0.65% of total issuance year-to-date and 0.053% of total municipal bonds outstanding. This compares favorably to data for the full year 2011 when first-time defaults totaled 0.84% of issuance and 0.065% of outstanding. (Data provided by Bank of America Merrill Lynch.) BlackRock maintains the view that municipal bond defaults will remain in the periphery and the overall market is fundamentally sound. We continue to recognize that careful credit research and security selection remain imperative amid uncertainty in this 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, 2012   


Table of Contents
Fund Summary as of October 31, 2012    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. or BBB or lower by Standard & Poor’s Corporation) 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      

For the six-month period ended October 31, 2012, the Fund returned 10.02% based on market price and 7.49% based on net asset value (“NAV”). For the same period, the closed-end Lipper High Yield Municipal Debt Funds category posted an average return of 8.75% based on market price and 8.15% based on NAV. All returns reflect reinvestment of dividends. 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. Contributing positively to performance during the period were the Fund’s sector concentrations in transportation, utilities, health and corporate-related debt. The Fund’s yield curve-flattening bias also proved beneficial. The Fund has consistently emphasized longer-dated securities in order to benefit when long-term rates decline faster than short-term rates, a scenario that occurred during the period. Security selection detracted from performance in the state tax-backed, school districts, health and transportation sectors; however, the cumulative effect of security selection in the Fund was positive for the period. US Treasury financial futures contracts used to hedge interest rate risk in the Fund also had a modestly negative impact on performance. The distribution yield generated by the Fund’s holdings fell below the average of its Lipper category peers, causing a drag on the Fund’s total return for 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 New York Stock Exchange (“NYSE”)

   MUA

Initial Offering Date

   June 25, 1993

Yield on Closing Market Price as of October 31, 2012 ($14.08)1

   5.33%

Tax Equivalent Yield2

   8.20%

Current Monthly Distribution per Common Share3

   $0.0625

Current Annualized Distribution per Common Share3

   $0.7500

Economic Leverage as of October 31, 20124

   11%

 

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 federal tax rate of 35%.

3   

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

4   

Represents tender option bond trusts (“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 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

        10/31/12        4/30/12        Change      High        Low  

Market Price

     $ 14.08         $ 13.15           7.07    $ 14.25         $ 13.08   

Net Asset Value

     $ 14.09         $ 13.47           4.60    $ 14.09         $ 13.47   

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

Sector Allocation         
      10/31/12     4/30/12  

Health

     27     27

Transportation

     21        21   

Corporate

     15        16   

County/City/Special District/School District

     14        13   

Utilities

     10        10   

Education

     5        6   

Tobacco

     5        4   

State

     3        3   
Credit Quality Allocation5  
      10/31/12     4/30/12  

 

  

 

 

   

 

 

 

AAA/Aaa

     1     1

AA/Aa

     17        18   

A

     11        11   

BBB/Baa

     29        27   

BB/Ba

     5        6   

B

     9        7   

CCC/Caa

     1        2   

CC/Ca

            1   

Not Rated6

     27        27   

 

5   

Using the higher of S&P’s or Moody’s Investors Service (“Moody’s”) ratings.

6   

The investment advisor has deemed certain of these securities to be of investment grade quality. As of October 31, 2012 and April 30, 2012, the market value of these securities was $22,359,511, representing 4%, and 25,540,846, representing 5%, respectively, of the Fund’s long-term investments.

 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    5


Table of Contents
Fund Summary as of October 31, 2012    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      

For the six-month period ended October 31, 2012, the Fund returned 11.23% based on market price and 6.76% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 9.55% based on market price and 7.15% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a discount to NAV to a premium by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. During the period, the Fund benefited from declining interest rates (bond prices rise when interest rates fall), the flattening of the yield curve (long-term rates fell more than short and intermediate rates), coupon income and the tightening of credit spreads. The Fund’s allocation to zero-coupon bonds delivered particularly strong performance amid declining interest rates. Exposure to the health sector also proved beneficial as spreads tightened significantly in that space. The Fund’s short position in US Treasury futures as a strategy for hedging interest rate risk was a modest detractor from 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, 2012 ($12.61)1

   5.52%

Tax Equivalent Yield2

   8.49%

Current Monthly Distribution per Common Share3

   $0.058

Current Annualized Distribution per Common Share3

   $0.696

Economic Leverage as of October 31, 20124

   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 federal tax rate of 35%.

3   

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

4   

Represents Variable Rate Demand Preferred Shares (“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 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

        10/31/12        4/30/12        Change      High        Low  

Market Price

     $ 12.61         $ 11.66           8.15    $ 13.25         $ 11.62   

Net Asset Value

     $ 12.58         $ 12.12           3.80    $ 12.60         $ 12.12   

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

Sector Allocation         
      10/31/12     4/30/12  

County/City/Special District/School District

     25     25

Transportation

     24        24   

State

     20        19   

Utilities

     13        13   

Health

     7        7   

Education

     7        7   

Corporate

     2        3   

Housing

     2        2   

 

Credit Quality Allocation5  
      10/31/12     4/30/12  

AAA/Aaa

     13     15

AA/Aa

     57        58   

A

     25        20   

BBB/Baa

     4        6   

B

     1        1   

 

5   

Using the higher of S&P’s or Moody’s ratings.

 

 

 

                
6    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Fund Summary as of October 31, 2012    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      

For the six-month period ended October 31, 2012, the Fund returned 10.15% based on market price and 8.25% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 9.55% based on market price and 7.15% based on NAV. All returns reflect reinvestment of dividends. The Fund’s premium 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. Contributing positively to performance during the period were the Fund’s duration positioning (preference for securities with a higher sensitivity to interest rate movements) and yield curve-flattening bias. The Fund has consistently emphasized longer-dated securities in order to benefit when long-term rates decline faster than short-term rates, a scenario that occurred during the period. In addition, sector concentrations in health and transportation had a notable positive impact on returns. The Fund’s holdings generated a high distribution yield, which in the aggregate, had a meaningful impact on returns. Security selection detracted from performance in the state tax-backed, health and tobacco sectors; however, the cumulative effect of security selection in the Fund was positive for the period. US Treasury financial futures contracts used to hedge interest rate risk in the Fund also had a modestly 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, 2012 ($19.32)1

   5.68%

Tax Equivalent Yield2

   8.74%

Current Monthly Distribution per Common Share3

   $0.0915

Current Annualized Distribution per Common Share3

   $1.0980

Economic Leverage as of October 31, 20124

   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 federal tax rate of 35%.

3   

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

4   

Represents Variable Rate Muni Term Preferred Shares (“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 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

        10/31/12        4/30/12        Change      High        Low  

Market Price

     $ 19.32         $ 18.08           6.86    $ 19.76         $ 17.39   

Net Asset Value

     $ 18.23         $ 17.36           5.01    $ 18.23         $ 17.36   

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

Sector Allocation         
      10/31/12     4/30/12  

Health

     21     21

Transportation

     19        18   

State

     14        13   

Utilities

     13        13   

County/City/Special District/School District

     12        12   

Education

     9        10   

Corporate

     7        8   

Tobacco

     3        3   

Housing

     2        2   
Credit Quality Allocation5  
      10/31/12     4/30/12  

AAA/Aaa

     10     8

AA/Aa

     42        37   

A

     29        23   

BBB/Baa

     8        15   

BB/Ba

     1        1   

B

     3        5   

CCC/Caa

     1        1   

Not Rated6

     6        10   

 

5   

Using the higher of S&P’s or Moody’s ratings.

6   

The investment advisor has deemed certain of these securities to be of investment grade quality. As of October 31, 2012 and April 30, 2012, the market value of these securities was $4,222,820, representing 1%, and $24,953,999, representing 7%, respectively, of the Fund’s long-term investments.

 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    7


Table of Contents
Fund Summary as of October 31, 2012    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      

For the six-month period ended October 31, 2012, the Fund returned 10.76% based on market price and 7.95% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 9.55% based on market price and 7.15% based on NAV. All returns reflect reinvestment of dividends. The Fund’s premium 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. Contributing positively to performance during the period were the Fund’s duration positioning (preference for securities with a higher sensitivity to interest rate movements) and yield curve-flattening bias. The Fund has consistently emphasized longer-dated securities in order to benefit when long-term rates decline faster than short-term rates, a scenario that occurred during the period. In addition, sector concentrations in health and transportation had a notable positive impact on returns. The Fund’s holdings generated a high distribution yield, which in the aggregate, had a meaningful impact on returns. Security selection detracted from performance in the state tax-backed, health and tobacco sectors; however, the cumulative effect of security selection in the Fund was positive for the period. US Treasury financial futures contracts used to hedge interest rate risk in the Fund also had a modestly 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, 2012 ($17.70)1

   5.63%

Tax Equivalent Yield2

   8.66%

Current Monthly Distribution per Common Share3

   $0.083

Current Annualized Distribution per Common Share3

   $0.996

Economic Leverage as of October 31, 20124

   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 federal tax rate of 35%.

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 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

        10/31/12        4/30/12        Change      High        Low  

Market Price

     $ 17.70         $ 16.46           7.53    $ 18.01         $ 16.14   

Net Asset Value

     $ 17.01         $ 16.23           4.81    $ 17.03         $ 16.23   

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

Sector Allocation         
      10/31/12     4/30/12  

Health

     21     21

Transportation

     18        18   

County/City/Special District/School District

     16        16   

State

     14        14   

Utilities

     12        11   

Education

     9        10   

Corporate

     7        7   

Tobacco

     2        2   

Housing

     1        1   
Credit Quality Allocation5  
      10/31/12     4/30/12  

AAA/Aaa

     10     12

AA/Aa

     48        45   

A

     25        24   

BBB/Baa

     8        9   

B

     2        2   

CCC/Caa

     1        1   

Not Rated6

     6        7   

 

5   

Using the higher of S&P’s or Moody’s ratings.

6   

The investment advisor has deemed certain of these securities to be of investment grade quality. As of October 31, 2012 and April 30, 2012, the market value of these securities was $7,448,747, representing 2%, and $7,289,016, representing 3%, respectively, of the Fund’s long-term investments.

 

 

                
8    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Fund Summary as of October 31, 2012    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      

For the six-month period ended October 31, 2012, the Fund returned 18.91% based on market price and 7.89% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 9.55% based on market price and 7.15% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a discount to NAV to a premium by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Fund’s long duration posture (greater sensitivity to interest rates) contributed positively to performance as the municipal yield curve flattened (i.e., longer-term interest rates fell more than shorter rates) and bond prices moved higher on the long end of the curve. The Fund’s longer-dated holdings in the health, transportation and utilities sectors experienced the strongest price appreciation. The Fund’s small position in US Treasury futures as a strategy for hedging interest rate risk was a slight detractor from performance as rates generally declined. The Fund’s potential return was limited by its low exposure to tobacco, which was the strongest performing sector for 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

   MUS

Initial Offering Date

   May 1, 1998

Yield on Closing Market Price as of October 31, 2012 ($16.77)1

   5.30%

Tax Equivalent Yield2

   8.15%

Current Monthly Distribution per Common Share3

   $0.074

Current Annualized Distribution per Common Share3

   $0.888

Economic Leverage as of October 31, 20124

   41%

 

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 federal tax rate of 35%.

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 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

        10/31/12        4/30/12        Change      High        Low  

Market Price

     $ 16.77         $ 14.52           15.50    $ 16.94         $ 14.52   

Net Asset Value

     $ 15.31         $ 14.61           4.79    $ 15.33         $ 14.61   

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

Sector Allocation         
      10/31/12     4/30/12  

County/City/Special District/School District

     31     28

Transportation

     23        22   

Utilities

     15        18   

State

     12        13   

Health

     10        9   

Education

     6        7   

Housing

     2        2   

Tobacco

     1        1   
Credit Quality Allocation5  
      10/31/12     4/30/12  

AAA/Aaa

     15     12

AA/Aa

     59        65   

A

     25        21   

BBB/Baa

     1        1   

B

            1   

 

5   

Using the higher of S&P’s or Moody’s ratings.

 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    9


Table of Contents
Fund Summary as of October 31, 2012    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      

For the six-month period ended October 31, 2012, the Fund returned 9.16% based on market price and 6.09% based on NAV. For the same period, the closed-end Lipper Intermediate Municipal Debt Funds category posted an average return of 7.36% based on market price and 4.83% based on NAV. All returns reflect reinvestment of dividends. The Fund’s premium 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. The Fund benefited from its neutral-to-long average duration bias (greater sensitivity to interest rates) and its preference for longer-dated maturities, within its intermediate duration mandate, as interest rates generally declined and the yield curve flattened (long-term interest rates fell more than short and intermediate rates) during the period. The Fund also benefited from a tightening of credit spreads during the period, with additional positive performance contributions from its allocations to the health and corporate sectors, which were among the better performing segments of the market for the period. US Treasury financial futures contracts used to hedge interest rate risk in the Fund also had a modestly 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

   MUI

Initial Offering Date

   August 1, 2003

Yield on Closing Market Price as of October 31, 2012 ($17.50)1

   4.90%

Tax Equivalent Yield2

   7.54%

Current Monthly Distribution per Common Share3

   $0.0715

Current Annualized Distribution per Common Share3

   $0.8580

Economic Leverage as of October 31, 20124

   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 federal tax rate of 35%.

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 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

        10/31/12        4/30/12        Change      High        Low  

Market Price

     $ 17.50         $ 16.45           6.38    $ 17.65         $ 16.04   

Net Asset Value

     $ 16.76         $ 16.21           3.39    $ 16.83         $ 16.18   

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

Sector Allocation               
      10/31/12     4/30/12  

County/City/Special District/School District

     24     23

State

     16        20   

Transportation

     14        9   

Health

     13        15   

Education

     10        10   

Utilities

     9        9   

Corporate

     8        8   

Tobacco

     3        3   

Housing

     3        3   
Credit Quality Allocation5               
      10/31/12     4/30/12  

AAA/Aaa

     8     11

AA/Aa

     50        49   

A

     27        25   

BBB/Baa

     7        6   

BB/Ba

     1        1   

B

     2        2   

Not Rated6

     5        6   

 

5   

Using the higher of S&P’s or Moody’s ratings.

6   

The investment advisor has deemed certain of these securities to be of investment grade quality. As of October 31, 2012 and April 30,2012, the market value of these securities was $13,008,114 and $12,831,333, each representing 1%, respectively, of the Fund’s long-term investment.

 

 

                
10    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Fund Summary as of October 31, 2012    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      

For the six-month period ended October 31, 2012, the Fund returned 12.00% based on market price and 7.98% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 9.55% based on market price and 7.15% based on NAV. All returns reflect reinvestment of dividends. The Fund’s premium 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. Contributing positively to performance during the period were the Fund’s duration positioning (preference for securities with a higher sensitivity to interest rate movements) and yield curve-flattening bias. The Fund has consistently emphasized longer-dated securities in order to benefit when long-term rates decline faster than short-term rates, a scenario that occurred during the period. In addition, sector concentrations in health and transportation had a notable positive impact on returns. The Fund’s holdings generated a high distribution yield, which in the aggregate, had a meaningful impact on returns. Security selection detracted from performance in the health and tobacco sectors; however, the cumulative effect of security selection in the Fund was positive for the period. US Treasury financial futures contracts used to hedge interest rate risk in the Fund also had a modestly 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, 2012 ($18.16)1

   6.01%

Tax Equivalent Yield2

   9.25%

Current Monthly Distribution per Common Share3

   $0.091

Current Annualized Distribution per Common Share3

   $1.092

Economic Leverage as of October 31, 20124

   41%

 

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 federal tax rate of 35%.

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 13.

The table below summarizes the changes in the Fund’s market price and NAV per share:

 

        10/31/12        4/30/12        Change      High        Low  

Market Price

     $ 18.16         $ 16.75           8.42    $ 18.46         $ 16.48   

Net Asset Value

     $ 16.63         $ 15.91           4.53    $ 16.67         $ 15.91   

The following charts show the sector and credit quality allocations of the Fund’s long-term investments:

 

Sector Allocation               
      10/31/12     4/30/12  

Health

     22     21

Transportation

     19        19   

State

     13        15   

Utilities

     12        11   

County/City/Special District/School District

     10        10   

Corporate

     10        11   

Education

     9        7   

Tobacco

     3        3   

Housing

     2        3   
Credit Quality Allocation5               
      10/31/12     4/30/12  

AAA/Aaa

     8     9

AA/Aa

     48        47   

A

     26        24   

BBB/Baa

     8        9   

BB/Ba

     1        1   

B

     3        3   

Not Rated6

     6        7   

 

5   

Using the higher of S&P’s or Moody’s ratings.

6   

The investment advisor has deemed certain of these securities to be of investment grade quality. As of October 31, 2012 and April 30, 2012 the market value of these securities was $4,062,956 and $4,822,745, each representing 1%, respectively, of the Fund’s long-term investments.

 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    11


Table of Contents
Call/Maturity Structure     

 

The following table summarizes the percentage of each Fund’s long-term investments with scheduled maturity dates and/or that are subject to potential calls by issuers over the next five years:

 

Calendar Year Ended December 31,      MUA        MEN        MHD        MUH        MUS        MUI        MVT  

   2012

       9        1        5        5        1        4        6

   2013

       5           3           3           2                     1           2   

   2014

       7           10           5           6           3           7           2   

   2015

       4           8           4           4           4           6           3   

   2016

       3           3           3           4           3           7           4   

 

Derivative Financial Instruments     

 

The Funds may invest in various derivative financial instruments, including financial futures contracts as specified in Note 2 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such derivative financial instruments are used to obtain exposure to a market without owning or taking physical custody of securities or to hedge market, interest rate and/or other 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 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.

 

 

                
12    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
The Benefits and Risks of Leveraging     

 

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

To obtain leverage, the Funds, except MUA, issue Variable Rate Demand Preferred Shares (“VRDP Shares”) or Variable Rate Muni Term Preferred Shares (“VMTP Shares”) and previously issued and had outstanding Auction Market Preferred Shares (“AMPS”) (VRDP Shares, VMTP Shares, and AMPS, are collectively referred to as “Preferred Shares”). Preferred Shares pay dividends at prevailing short-term interest rates, and the Funds invest the proceeds in long-term municipal bonds. In general, the concept of leveraging is based on the premise that the financing cost of assets to be obtained from leverage, which will be based on short-term interest rates, will normally be lower than the income earned by each Fund on its longer-term portfolio investments. To the extent that the total assets of each Fund (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each 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. However, in order to benefit shareholders, the yield curve must be positively sloped; that is, short-term interest rates must be lower than long-term interest rates. If the yield curve becomes negatively sloped, meaning short-term interest rates exceed long-term interest rates, income to shareholders will be lower than if the Funds had not used leverage.

To illustrate these concepts, assume a Fund’s Common Shares capitalization is $100 million and it issues Preferred Shares for an additional $50 million, creating a total value of $150 million available for investment in long-term municipal bonds. If prevailing short-term interest rates are 3% and long-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the Fund pays dividends on the $50 million of Preferred Shares based on the lower short-term interest rates. At the same time, the securities purchased by the Fund with assets received from Preferred Shares issuance earn income based on long-term interest rates. In this case, the dividends paid to holders of Preferred Shares (“Preferred Shareholders”) are significantly lower than the income earned on the Fund’s long-term investments, and therefore the holders of Common Shares (“Common Shareholders”) are the beneficiaries of the incremental net income.

If short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental net income pickup will be reduced or eliminated completely. Furthermore, if prevailing short-term interest rates rise above long-term interest rates, the yield curve has a negative slope. In this case, the Fund pays higher short-term interest rates whereas the Fund’s total portfolio earns income based on lower long-term interest rates.

Furthermore, the value of the Funds’ 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 redemption value of the Funds’ Preferred Shares does not fluctuate in

relation to interest rates. As a result, changes in interest rates can influence the Funds’ NAVs positively or negatively in addition to the impact on Fund performance from leverage from Preferred Shares discussed above.

The Funds may also leverage their assets through the use of tender option bond trusts (“TOBs”), as described in Note 1 of the Notes to Financial Statements. TOB investments generally will provide the Funds with economic benefits in periods of declining short-term interest rates, but expose the Funds to risks during periods of rising short-term interest rates similar to those associated with Preferred Shares issued by the Funds, as described above. Additionally, fluctuations in the market value of municipal bonds deposited into the TOB trust may adversely affect each Fund’s NAV per share.

The use of leverage may enhance opportunities for increased income to the Funds and Common Shareholders, but as described above, it also creates risks as short- or long-term interest rates fluctuate. Leverage also will generally cause greater changes in the Funds’ NAVs, market prices and dividend rates than comparable portfolios without leverage. If the income derived from securities purchased with assets received from leverage exceeds the cost of leverage, the Funds’ net income will be greater than if leverage had not been used. Conversely, if the income from the securities purchased is not sufficient to cover the cost of leverage, each Fund’s net income will be less than if leverage had not been used, and therefore the amount available for distribution to Common Shareholders will be reduced. Each 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 a Fund to incur losses. The use of leverage may limit each Fund’s ability to invest in certain types of securities or use certain types of hedging strategies, such as in the case of certain restrictions imposed by rating agencies that rate the Preferred Shares issued by the Funds. Each 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.

Under the Investment Company Act of 1940, as amended (the “1940 Act”), the Funds are permitted to issue senior securities in the form of equity securities (e.g., Preferred Shares) up to 50% of their total managed assets (each Fund’s total assets less the sum of its accrued liabilities). In addition, each Fund voluntarily limits its economic leverage to 50% of its total managed assets, while each Fund with VRDP Shares or VMTP Shares outstanding limits its economic leverage to 45% of its total managed assets. As of October 31, 2012, the Funds had economic leverage from Preferred Shares and/or TOBs as a percentage of their total managed assets as follows:

 

      Percent of
Economic
Leverage
 

MUA

     11

MEN

     36

MHD

     37

MUH

     37

MUS

     41

MUI

     38

MVT

     41
 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    13


Table of Contents

Schedule of Investments October 31, 2012 (Unaudited)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  
    

Alabama — 1.3%

    

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

   $ 2,165      $ 2,542,901   

County of Jefferson Alabama, RB, Series A:

    

5.25%, 1/01/17

     895        895,125   

5.25%, 1/01/19

     2,000        1,998,800   

5.50%, 1/01/21

     1,215        1,214,186   
    

 

 

 
               6,651,012   

Alaska — 1.4%

    

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

    

4.63%, 6/01/23

     1,725        1,729,106   

5.00%, 6/01/32

     1,500        1,328,475   

5.00%, 6/01/46

     4,885        4,139,207   
    

 

 

 
               7,196,788   

Arizona — 2.9%

    

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

     1,420        1,159,402   

Phoenix IDA Arizona, ERB, Great Hearts Academies — Veritas Project:

    

6.30%, 7/01/42

     500        540,330   

6.40%, 7/01/47

     425        461,044   

Phoenix IDA Arizona, Refunding RB, America West Airlines, Inc. Project, AMT, 6.30%, 4/01/23

     7,750        6,867,430   

Pima County IDA Arizona, ERB, Arizona Charter School Project:

    

Series A, 6.75%, 7/01/31

     490        490,593   

Series E, 7.25%, 7/01/31

     2,255        2,259,442   

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

     450        451,751   

Tempe IDA, Refunding RB, Friendship Village of Tempe, Series A, 6.25%, 12/01/42

     720        780,379   

University Medical Center Corp. Arizona, RB:

    

6.25%, 7/01/29

     820        954,857   

6.50%, 7/01/39

     500        581,690   
    

 

 

 
               14,546,918   

California — 4.1%

    

California Statewide Communities Development Authority, Refunding RB:

    

American Baptist Homes of the West,
6.25%, 10/01/39

     2,175        2,376,036   

Eskaton Properties, Inc., 5.25%, 11/15/34

     1,595        1,698,707   

City of Fontana California, Special Tax Bonds, Refunding RB, Community Facilities District No. 22-Sierra, Series H, 6.00%, 9/01/34

     2,320        2,362,015   
Municipal Bonds    Par  
(000)
    Value  
    

California (concluded)

    

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

    

6.50%, 5/01/36

   $ 900      $ 1,082,358   

6.50%, 5/01/42

     2,220        2,666,220   

Foothill Eastern Transportation Corridor Agency California, Refunding RB, CAB, 6.07%, 1/15/33 (a)

     12,450        3,719,313   

San Marcos County Unified School District, GO, CAB, Series B (a):

    

5.13%, 8/01/40

     5,000        1,226,050   

5.24%, 8/01/51

     12,050        1,624,099   

Tobacco Securitization Authority of Southern California, Refunding RB, Series A1-SNR,
5.00%, 6/01/37

     4,860        4,139,602   
    

 

 

 
               20,894,400   

Colorado — 1.2%

    

Plaza Metropolitan District No. 1 Colorado, Tax Allocation Bonds, Public Improvement Fee, Tax Increment:

    

8.00%, 12/01/25

     4,850        5,020,429   

Subordinate, 8.13%, 12/01/25

     1,025        1,024,969   
    

 

 

 
               6,045,398   

Connecticut — 0.7%

    

Connecticut State Development Authority, RB, AFCO Cargo BDL LLC Project, AMT, 8.00%, 4/01/30 (b)(c)

     3,450        2,135,723   

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

     1,370        1,371,219   
    

 

 

 
               3,506,942   

Delaware — 1.0%

    

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

     1,000        1,126,960   

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

     3,625        3,899,122   
    

 

 

 
               5,026,082   

District of Columbia — 0.9%

    

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

    

7.38%, 1/01/30

     1,665        1,733,714   

7.50%, 1/01/39

     1,615        1,680,359   

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

     1,055        1,246,124   
    

 

 

 
               4,660,197   
 
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:

ACA   American Capital Access Corp.
AGC   Assured Guaranty Corp.
AGM   Assured Guaranty Municipal Corp.
AMBAC   American Municipal Bond Assurance Corp.
AMT   Alternative Minimum Tax (subject to)
ARB   Airport Revenue Bonds
BHAC   Berkshire Hathaway Assurance Corp.
CAB   Capital Appreciation Bonds
COP   Certificates of Participation
EDA   Economic Development Authority
EDC   Economic Development Corp.
ERB   Education Revenue Bonds
FSA   Financial Security Assurance, Inc.
GARB   General Airport Revenue Bonds
GO   General Obligation Bonds
HDA   Housing Development Authority
HFA   Housing Finance Agency
HRB   Housing Revenue Bonds
IDA   Industrial Development Authority
IDB   Industrial Development Board
ISD   Independent School District
LOC   Letter of Credit
LRB   Lease Revenue Bonds
M/F   Multi-Family
MRB   Mortgage Revenue Bonds
NPFGC   National Public Finance Guarantee Corp.
PSF-GTD   Permanent School Fund Guaranteed
Radian   Radian Financial Guaranty
Q-SBLF   Qualified School Bond Loan Fund
RB   Revenue Bonds
SBPA   Stand-by Bond Purchase Agreements
S/F   Single-Family
Syncora   Syncora Guarantee
VRDN   Variable Rate Demand Notes
 

 

See Notes to Financial Statements.

 

                
14    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Florida — 10.0%

    

Greater Orlando Aviation Authority Florida, RB, Special Purpose, JetBlue Airways Corp., AMT, 6.38%, 11/15/26

   $ 4,500      $ 4,544,955   

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

     455        455,255   

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

    

Series A, 7.13%, 4/01/30

     3,000        3,007,500   

Series B, 7.13%, 4/01/30

     1,560        1,560,593   

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

     4,500        4,506,030   

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

     1,095        1,247,008   

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

     1,485        1,634,836   

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

     4,550        5,763,121   

Midtown Miami Community Development District, Special Assessment Bonds, Series A:

    

6.00%, 5/01/24

     1,240        1,261,464   

6.25%, 5/01/37

     4,605        4,701,198   

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

     3,500        3,850,245   

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

     5,180        2,006,577   

Sarasota County Health Facilities Authority, Refunding RB, Village On The Isle Project, 5.50%, 1/01/27

     955        1,017,543   

Sumter Landing Community Development District Florida, RB, Sub-Series B, 5.70%, 10/01/38

     3,825        3,538,048   

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

     1,510        1,511,797   

Tolomato Community Development District, Special Assessment Bonds, 6.65%, 5/01/40 (b)(c)

     2,890        993,214   

Tolomato Community Development District, Special Assessment Bonds, Refunding:

    

6.61%, 5/01/17

     250        179,392   

6.61%, 5/01/19

     585        337,001   

6.61%, 5/01/22

     305        129,250   

6.65%, 5/01/40

     910        890,180   

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

    

6.75%, 5/01/31

     1,920        2,217,946   

7.00%, 5/01/41

     3,135        3,642,651   

5.50%, 5/01/42

     1,380        1,463,269   
    

 

 

 
               50,459,073   

Georgia — 2.4%

    

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

     1,035        1,052,026   

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

     3,365        4,196,491   

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

     2,765        2,873,305   

DeKalb County Hospital Authority Georgia, Refunding RB, Dekalb Medical Center Inc. Project,
6.13%, 9/01/40

     1,000        1,177,680   

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

    

6.38%, 11/15/29

     700        807,191   
Municipal Bonds   

Par  

(000)

    Value  
    

Georgia (concluded)

    

Gainesville & Hall County Development Authority, Refunding RB, Acts Retirement Life Community, Series A-2: (concluded)

    

6.63%, 11/15/39

   $ 880      $ 1,006,553   

Private Colleges & Universities Authority, Refunding RB, Mercer University Project, Series A,
5.00%, 10/01/32

     855        921,895   
    

 

 

 
               12,035,141   

Guam — 0.6%

    

Guam Government Waterworks Authority, Refunding RB, Water & Wastewater Systems,
6.00%, 7/01/25

     1,265        1,319,521   

Territory of Guam, GO, Series A:

    

6.00%, 11/15/19

     615        677,712   

7.00%, 11/15/39

     1,115        1,259,671   
    

 

 

 
               3,256,904   

Illinois — 5.0%

    

City of Chicago Illinois, Refunding RB, American Airlines Inc. Project, 5.50%, 12/01/30 (b)(c)

     7,000        4,550,910   

Illinois Finance Authority, Refunding RB:

    

CAB, Clare Water Tower, Series B,
10.68%, 5/15/50 (a)(b)(c)

     1,500        30,150   

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

     3,500        70,350   

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

     4,000        4,421,560   

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

     2,395        2,435,595   

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

     1,175        1,187,925   

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

     4,170        4,716,312   

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project, Series B (AGM), 5.14%, 6/15/46 (a)

     9,860        1,789,886   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     1,400        1,635,032   

6.00%, 6/01/28

     710        842,912   

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

     1,800        1,829,160   

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

     1,465        1,472,515   
    

 

 

 
               24,982,307   

Iowa — 0.7%

    

Iowa Finance Authority, Refunding RB, Sunrise Retirement Community Project:

    

5.50%, 9/01/37

     1,355        1,322,629   

5.75%, 9/01/43

     2,115        2,102,712   
    

 

 

 
               3,425,341   

Kentucky — 1.1%

    

Kentucky Economic Development Finance Authority, RB, Owensboro Medical Health System, Series A:

    

6.38%, 6/01/40

     1,580        1,880,200   

6.50%, 3/01/45

     2,000        2,392,100   

Kentucky Economic Development Finance Authority, Refunding RB, Owensboro Medical Health System, Series B, 6.38%, 3/01/40

     1,135        1,348,153   
    

 

 

 
               5,620,453   

Louisiana — 1.6%

    

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

     5,000        5,627,200   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    15


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Louisiana (concluded)

    

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

   $ 1,855      $ 2,185,858   
    

 

 

 
               7,813,058   

Maine — 0.7%

    

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

     2,955        3,554,629   

Maryland — 2.6%

    

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

     3,615        4,080,612   

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

     4,785        5,212,109   

Maryland Health & Higher Educational Facilities Authority, RB, Washington Christian Academy, 5.50%, 7/01/38 (b)(c)

     1,000        399,950   

Maryland Health & Higher Educational Facilities Authority, Refunding RB, Doctor’s Community Hospital, 5.75%, 7/01/38

     3,110        3,374,195   
    

 

 

 
               13,066,866   

Massachusetts — 0.6%

    

Massachusetts Development Finance Agency, RB, Foxborough Regional Charter School, Series A, 7.00%, 7/01/42

     1,025        1,212,124   

Massachusetts Development Finance Agency, Refunding RB:

    

Eastern Nazarene College, 5.63%, 4/01/19

     35        35,024   

Eastern Nazarene College, 5.63%, 4/01/29

     80        80,019   

Tufts Medical Center, Series I, 6.75%, 1/01/36

     1,490        1,823,000   
    

 

 

 
               3,150,167   

Michigan — 2.6%

    

City of Detroit Michigan, GO, Limited Tax:

    

Series A-1, 5.00%, 4/01/16

     650        597,552   

Series A-2, 8.00%, 4/01/14

     3,185        3,047,790   

Monroe County Hospital Finance Authority, Refunding RB, Mercy Memorial Hospital Corp. Obligation, 5.50%, 6/01/35

     1,000        1,060,540   

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital,
8.25%, 9/01/39

     6,310        8,136,745   
    

 

 

 
               12,842,627   

Minnesota — 0.4%

    

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

     1,785        2,151,086   

Missouri — 0.6%

    

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

     2,315        2,771,425   

New Jersey — 5.7%

    

New Jersey EDA, RB:

    

Continental Airlines Inc. Project, AMT,
6.25%, 9/15/29

     2,025        2,073,013   

Continental Airlines Inc. Project, AMT,
9.00%, 6/01/33 (d)

     1,250        1,299,437   

Kapkowski Road Landfill Project, Series 1998B-MB, AMT, 6.50%, 4/01/31

     2,250        2,668,117   

Patterson Charter School for Science and Technology, Inc. Project, Series A,
6.10%, 7/01/44

     1,085        1,178,115   

New Jersey EDA, Refunding RB, Newark Airport Marriott Hotel, 7.00%, 10/01/14

     4,000        4,019,680   
Municipal Bonds   

Par  

(000)

    Value  
    

New Jersey (concluded)

    

New Jersey Educational Facilities Authority, Refunding RB, University of Medicine & Dentistry, Series B:

    

7.13%, 12/01/23

   $ 670      $ 860,876   

7.50%, 12/01/32

     3,575        4,502,677   

New Jersey Health Care Facilities Financing Authority, RB, Pascack Valley Hospital Association,
6.63%, 7/01/36 (b)(c)

     3,870        39   

New Jersey Health Care Facilities Financing Authority, Refunding RB:

    

Barnabas Health, Series A, 5.63%, 7/01/37

     2,650        2,977,063   

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

     4,090        4,741,578   

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series C (AMBAC),
4.69%, 12/15/35 (a)

     6,210        2,127,919   

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

     2,390        2,330,967   
    

 

 

 
               28,779,481   

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        3,052,714   

New York — 4.6%

    

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

     3,695        4,161,457   

Dutchess County Industrial Development Agency New York, RB, St. Francis Hospital, Series B,
7.50%, 3/01/29

     1,000        1,028,590   

Dutchess County Industrial Development Agency New York, Refunding RB, St. Francis Hospital, Series A, 7.50%, 3/01/29

     1,400        1,440,026   

Metropolitan Transportation Authority, RB, Series 2008C, 6.50%, 11/15/28

     2,000        2,556,660   

New York City Industrial Development Agency, RB:

    

American Airlines Inc., JFK International Airport, AMT, 8.00%, 8/01/28 (b)(c)(d)

     1,765        1,861,687   

British Airways Plc Project, AMT,
7.63%, 12/01/32

     4,130        4,233,250   

Series C, 6.80%, 6/01/28

     860        871,120   

Special Needs Facilities Pooled Program, Series C-1, 6.50%, 7/01/24

     610        615,618   

Special Needs Facilities Pooled Program, Series C-1, 6.63%, 7/01/29

     1,100        1,103,696   

New York Liberty Development Corp., Refunding RB, Second Priority, Bank of America Tower at One Bryant Park Project, Class 3, 6.38%, 7/15/49

     1,270        1,475,232   

Port Authority of New York & New Jersey, RB, JFK International Air Terminal, 6.00%, 12/01/36

     1,340        1,574,044   

Yonkers Industrial Development Agency New York, RB, Sarah Lawrence College Project, Series A,
6.00%, 6/01/41

     2,090        2,363,309   
    

 

 

 
               23,284,689   

North Carolina — 1.6%

    

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

    

Deerfield, 6.13%, 11/01/38

     4,565        5,039,532   

Whitestone, 7.75%, 3/01/31

     1,000        1,150,490   

Whitestone, 7.75%, 3/01/41

     1,420        1,617,891   
    

 

 

 
               7,807,913   

Ohio — 3.6%

    

Buckeye Tobacco Settlement Financing Authority, RB, Asset-Backed, Senior Series A-2, 5.13%, 6/01/24

     3,350        2,917,113   
 

 

See Notes to Financial Statements.

 

                
16    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Ohio (concluded)

    

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

    

5.75%, 6/01/34

   $ 6,745      $ 5,681,246   

6.00%, 6/01/42

     3,040        2,621,939   

County of Hamilton Ohio, RB, Christ Hospital Project, 5.00%, 6/01/42

     1,880        2,019,082   

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

     4,880        5,075,835   
    

 

 

 
               18,315,215   

Oklahoma — 0.3%

    

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

     1,305        1,413,889   

Pennsylvania — 6.9%

    

Allegheny County Hospital Development Authority, Refunding RB, Health System, West Penn, Series A, 5.38%, 11/15/40

     3,330        2,356,108   

Allentown Neighborhood Improvement Zone Development Authority, RB:

    

5.00%, 5/01/35

     1,815        1,938,039   

5.00%, 5/01/42

     4,170        4,419,074   

Bucks County IDA, RB, Ann’s Choice, Inc. Facility, Series A:

    

6.13%, 1/01/25

     1,360        1,376,306   

6.25%, 1/01/35

     1,550        1,567,097   

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

     6,165        6,872,249   

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

     1,160        1,255,665   

Montgomery County IDA Pennsylvania, MRB, Whitemarsh Continuing Care, 6.13%, 2/01/28

     2,330        2,375,482   

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

     1,250        1,241,600   

Philadelphia Authority for Industrial Development, RB, Commercial Development, AMT,
7.75%, 12/01/17

     8,000        8,012,160   

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

     3,135        3,325,451   
    

 

 

 
               34,739,231   

Puerto Rico — 1.6%

    

Puerto Rico Public Buildings Authority, Refunding RB, Government Facilities, Series U, 5.25%, 7/01/42

     3,790        3,821,154   

Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A, 6.50%, 8/01/44

     2,650        3,108,450   

Puerto Rico Sales Tax Financing Corp., Refunding RB, First Sub-Series C, 5.97%, 8/01/38 (a)

     4,445        977,277   
    

 

 

 
               7,906,881   

Rhode Island — 0.7%

    

Central Falls Detention Facility Corp., Refunding RB, 7.25%, 7/15/35

     4,245        3,678,208   

Tennessee — 0.1%

    

Shelby County Health Educational & Housing Facilities Board Tennessee, RB, Village at Germantown, 6.25%, 12/01/34

     575        580,204   

Texas — 13.2%

    

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

     5,040        5,666,422   
Municipal Bonds   

Par  

(000)

    Value  
    

Texas (concluded)

    

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

   $ 5,080      $ 708,355   

Central Texas Regional Mobility Authority, Refunding RB, Senior Lien:

    

5.75%, 1/01/25

     675        781,144   

6.25%, 1/01/46

     2,210        2,581,899   

Central Texas Regional Mobility Authority, Refunding RB, CAB (a):

    

4.97%, 1/01/28

     1,000        474,940   

5.00%, 1/01/29

     2,000        900,280   

5.12%, 1/01/30

     1,170        491,470   

5.25%, 1/01/31

     2,000        779,720   

5.34%, 1/01/32

     3,500        1,274,140   

5.37%, 1/01/33

     3,690        1,267,404   

5.42%, 1/01/34

     4,000        1,289,600   

City of Houston Texas, RB, Special Facilities, AMT:

    

Continental Airlines Inc. Terminal Improvement Projects, 6.63%, 7/15/38

     2,890        3,239,603   

Continental Airlines, Series E, 6.75%, 7/01/21

     4,550        4,566,881   

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

    

5.50%, 8/15/31

     955        1,048,332   

5.75%, 8/15/41

     720        794,023   

Fort Bend County Industrial Development Corp., RB, NRG Energy Inc. Project, 4.75%, 11/01/42

     1,520        1,538,118   

Harris County Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B:

    

7.13%, 12/01/31

     1,500        1,864,305   

7.25%, 12/01/35

     1,110        1,392,972   

Harris County-Houston Sports Authority, Refunding RB, CAB, Senior Lien, Series A (NPFGC),
5.67%, 11/15/38 (a)

     10,000        2,335,100   

Houston Higher Education Finance Corp., RB, Cosmos Foundation, Inc. Series A, 6.88%, 5/15/41

     595        758,774   

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

     860        1,006,501   

Love Field Airport Modernization Corp., RB, Southwest Airlines Co. Project, 5.25%, 11/01/40

     1,500        1,616,220   

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

     2,090        2,445,133   

North Texas Education Finance Corporation, ERB, Uplift Education, Series A:

    

5.13%, 12/01/42

     745        793,432   

5.25%, 12/01/47

     1,600        1,706,640   

North Texas Tollway Authority, RB, CAB, Special Projects System, Series B, 5.33%, 9/01/37 (a)

     2,110        571,304   

North Texas Tollway Authority, Refunding RB, Toll Second Tier, Series F, 6.13%, 1/01/31

     4,425        4,907,414   

Red River Health Facilities Development Corp., First MRB, Eden Home Inc. Project, 7.25%, 12/15/42

     2,895        3,098,316   

Red River Health Facilities Development Corp., RB, Wichita Falls Retirement Foundation Project, 5.13%, 1/01/41

     900        903,366   

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

    

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

     1,745        1,931,034   

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

     4,200        4,725,714   

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

    

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

     4,455        5,498,628   

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

     3,000        3,638,820   
    

 

 

 
               66,596,004   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    17


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniAssets Fund, Inc. (MUA)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Vermont — 0.2%

    

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

   $ 770      $ 808,154   

Virginia — 3.6%

    

Dulles Town Center Community Development Authority, Special Assessment Bonds, Dulles Town Center Project, 6.25%, 3/01/26

     3,515        3,518,866   

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

     2,500        2,577,025   

Lexington IDA, Refunding MRB, Kendal at Lexington, Series A, 5.38%, 1/01/28

     40        40,826   

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

    

6.63%, 3/01/26

     1,485        1,680,114   

6.88%, 3/01/36

     1,300        1,469,078   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossing Project, AMT:

    

5.25%, 1/01/32

     810        884,358   

6.00%, 1/01/37

     5,705        6,562,576   

5.50%, 1/01/42

     1,175        1,288,411   
    

 

 

 
               18,021,254   

Washington — 0.6%

    

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

     1,495        1,497,123   

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

     1,455        1,609,303   
    

 

 

 
               3,106,426   

Wisconsin — 0.9%

    

Wisconsin Health & Educational Facilities Authority, RB, New Castle Place Project, Series A,
7.00%, 12/01/31

     3,175        2,954,623   

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

    

7.25%, 9/15/29

     425        489,876   

7.63%, 9/15/39

     855        994,092   
    

 

 

 
               4,438,591   
Total Municipal Bonds — 86.6%              436,185,668   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
              

Colorado — 2.5%

    

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

     11,475        12,488,817   

District of Columbia — 1.6%

    

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

     6,681        8,150,358   

Florida — 3.2%

    

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

     15,000        16,241,400   

Illinois — 3.1%

    

City of Chicago Illinois, RB, General Airport, Third Lien, Series A (NPFGC), 5.00%, 1/01/33

     6,510        6,953,136   

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

     7,180        8,385,450   
    

 

 

 
               15,338,586   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  
    

Michigan — 1.0%

    

Detroit Water and Sewerage Department, Refunding RB, Senior Lien, Series A:

    

5.00%, 7/01/32

   $ 1,613      $ 1,717,990   

5.25%, 7/01/39

     2,786        3,018,949   
    

 

 

 
               4,736,939   

New York — 11.4%

    

Hudson New York Yards Infrastructure Corp., RB, Series A, 5.75%, 2/15/47

     4,520        5,336,201   

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

    

Series EE, 5.50%, 6/15/43

     7,605        9,093,375   

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

     8,609        10,173,504   

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

     18,105        20,819,199   

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

     6,600        7,781,334   

New York State Dormitory Authority, ERB, Series F, 5.00%, 3/15/35

     4,004        4,354,291   
    

 

 

 
               57,557,904   

Washington — 1.8%

    

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

     7,966        9,065,867   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 24.6%
        123,579,871   

Total Long-Term Investments

(Cost — $522,814,661) — 111.2%

  

  

    559,765,539   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.04% (g)(h)

     1,686,161        1,686,161   

Total Short-Term Securities

(Cost — $1,686,161) — 0.3%

             1,686,161   
Total Investments (Cost — $524,500,822) — 111.5%        561,451,700   
Other Assets Less Liabilities — 1.3%        6,492,380   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (12.8)%

   

    (64,193,414
    

 

 

 
Net Assets — 100.0%      $ 503,750,666   
    

 

 

 
                  

 

(a)   Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

(b)   Non-income producing security.

 

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

 

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

 

(e)   Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(f)   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 agreements is $9,080,116.
 

 

See Notes to Financial Statements.

 

                
18    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Schedule of Investments (concluded)    BlackRock MuniAssets Fund, Inc. (MUA)

 

 

(g)   Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2012, for purposes of Section 2(a)(3) of the 1940 Act, as amended, were as follows:

 

Affiliate    Shares
Held at
April 30,
2012
     Net
Activity
    Shares
Held at
October 31,
2012
     Income  

FFI Institutional Tax-Exempt Fund

     3,404,970         (1,718,809     1,686,161       $ 271   

 

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

 

Ÿ  

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

 

Ÿ  

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and 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)

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 level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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 is based on the pricing transparency of the investment 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 other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy as of October 31, 2012:

 

     Level 1     Level 2     Level 3     Total  

Assets:

       
Investments:        

Long Term Invest-
ments
1

         $ 559,765,539             $ 559,765,539   

Short-Term Securities

  $ 1,686,161                      1,686,161   
 

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 1,686,161      $ 559,765,539             $ 561,451,700   
 

 

 

   

 

 

   

 

 

   

 

 

 

 

1   

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

Certain of the Fund’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, TOB trust certificates of $64,148,789 are categorized as level 2 within the disclosure hierarchy.

There were no transfers between levels during the six months ended October 31, 2012.

 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    19


Table of Contents

Schedule of Investments October 31, 2012 (Unaudited)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

   

Value

 
    

Alabama — 1.3%

    

County of Jefferson Alabama, RB, Series A:

    

5.50%, 1/01/22

   $ 2,750      $ 2,748,983   

4.75%, 1/01/25

     2,200        2,105,664   
    

 

 

 
               4,854,647   

Alaska — 1.2%

    

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

     400        418,544   

Alaska Housing Finance Corp., Refunding RB, General Mortgage Revenue Bonds, Series A, 4.13%, 12/01/37

     1,265        1,293,437   

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

     990        1,146,252   

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

     1,200        1,454,712   
    

 

 

 
               4,312,945   

Arizona — 1.5%

    

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

     1,300        1,399,606   

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

    

5.00%, 10/01/27

     3,250        3,665,090   

5.00%, 10/01/29

     400        445,924   
    

 

 

 
               5,510,620   

California — 22.3%

    

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

    

5.40%, 10/01/24

     10,185        11,442,949   

5.45%, 10/01/25

     3,700        4,150,512   

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

     5,000        6,231,650   

Cabrillo Community College District, GO, CAB, Election of 2004, Series B (NPFGC), 5.45%, 8/01/37 (a)

     2,400        635,016   

California Health Facilities Financing Authority, RB:

    

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

     550        635,360   

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

     1,200        1,448,172   

California State University, RB, Systemwide, Series A (NPFGC), 5.00%, 5/01/13 (b)

     1,405        1,438,537   

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

     2,000        2,277,660   

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

     1,480        1,639,218   

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

     1,420        1,574,979   

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

     850        983,170   

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

     1,300        1,478,594   

Los Angeles Department of Water & Power, RB, Series C (NPFGC), 5.00%, 7/01/29

     5,160        5,501,128   

Metropolitan Water District of Southern California, RB, Series B-1 (NPFGC) (b):

    

5.00%, 10/01/13

     2,570        2,682,180   

5.00%, 10/01/13

     1,480        1,544,602   

Orange County Sanitation District, COP:

    

(NPFGC), 5.00%, 8/01/13 (b)

     7,455        7,718,758   

Series B (AGM), 5.00%, 2/01/30

     1,500        1,687,860   

Series B (AGM), 5.00%, 2/01/31

     900        1,013,886   

Poway Unified School District, GO, Refunding, CAB, School Facilities Improvement Election of 2007, 4.82%, 8/01/36 (a)

     3,750        1,209,937   
Municipal Bonds   

Par  

(000)

   

Value

 
    

California (concluded)

    

Rio Hondo Community College District California, GO, CAB, Election of 2004, Series C, 4.91%, 8/01/38 (a)

   $ 5,000      $ 1,433,300   

San Diego Unified School District California, GO, CAB, Election of 2008, Series C, 5.05%, 7/01/38 (a)

     1,600        444,656   

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

    

4.61%, 7/01/30

     5,000        2,235,000   

4.68%, 7/01/31

     1,280        539,738   

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

     2,175        2,667,246   

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

    

5.00%, 8/01/34

     700        794,325   

5.00%, 8/01/38

     600        674,034   

San Mateo County Community College District, GO, CAB, Election of 2001, Series C (NPFGC), 4.09%, 9/01/30 (a)

     12,740        6,188,710   

State of California, GO:

    

5.13%, 6/01/31

     60        60,033   

Various Purpose Improvement, 5.00%, 4/01/42

     1,000        1,109,260   

State of California, GO, Refunding:

    

5.13%, 6/01/27

     20        20,011   

5.00%, 2/01/38

     2,500        2,779,400   

5.00%, 10/01/41

     1,000        1,105,140   

Walnut Valley Unified School District, GO, CAB, Election of 2007, Series B, 4.96%, 8/01/36 (a)

     5,500        1,718,750   

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

     5,035        5,535,076   
    

 

 

 
               82,598,847   

Colorado — 0.6%

    

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

     2,000        2,285,720   

District of Columbia — 1.5%

    

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

     5,480        5,689,172   

Florida — 12.2%

    

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

     850        1,020,213   

City of Jacksonville, Refunding RB, Series A, 5.00%, 10/01/30

     280        326,152   

Collier County School Board, COP (AGM), 5.00%, 2/15/23

     3,000        3,373,800   

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

     2,625        2,850,750   

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

    

5.63%, 10/01/26

     960        1,093,661   

5.38%, 10/01/32

     3,160        3,492,685   

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

     1,400        1,642,998   

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

     4,625        5,178,982   

County of Miami-Dade Florida, Refunding RB:

    

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

     9,900        10,436,976   

Series B, 5.00%, 10/01/37 (c)

     710        787,880   

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

    

5.13%, 6/01/27

     2,000        2,322,740   

5.38%, 10/01/29

     1,050        1,235,682   

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

     1,450        1,702,054   
 

 

See Notes to Financial Statements.

 

                
20    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

   

Value

 
    

Florida (concluded)

    

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

   $ 4,050      $ 4,383,922   

Orange County School Board, COP, Series A (AGC), 5.50%, 8/01/34

     3,550        4,107,279   

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

     275        305,665   

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

     1,000        1,145,900   
    

 

 

 
               45,407,339   

Georgia — 3.3%

    

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

     1,150        1,252,798   

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

     7,475        10,779,324   
    

 

 

 
               12,032,122   

Illinois — 18.6%

    

Chicago Illinois Board of Education, GO, Refunding, Chicago School Reform Board (NPFGC), 5.50%, 12/01/26

     725        910,332   

Chicago Illinois Board of Education, GO, Unlimited Tax, 5.50%, 12/01/39

     2,375        2,780,104   

Chicago Illinois Transit Authority, RB, Sales Tax Receipts Revenue, 5.25%, 12/01/36

     595        682,887   

Chicago Park District, GO, Unlimited Tax, Harbor Facilities Revenues, Series C, 5.25%, 1/01/40

     550        628,320   

City of Chicago Illinois, GARB:

    

O’Hare International Airport, General Third Lien, Series A, 5.75%, 1/01/39

     5,110        6,031,691   

O’Hare International Airport, Third Lien, Series B-2 AMT (AGM), 5.75%, 1/01/23

     5,670        5,990,412   

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

     2,500        2,628,375   

City of Chicago Illinois, Refunding RB, AMT, 5.00%, 1/01/31

     2,500        2,758,775   

City of Chicago Illinois, Board of Education, GO, Refunding, Series A (AGM), 5.50%, 12/01/31

     2,875        3,770,074   

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

     330        373,299   

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

     285        322,395   

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

    

5.75%, 8/15/34

     650        772,239   

6.00%, 8/15/41

     1,000        1,200,250   

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

     2,190        2,219,083   

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

     1,000        1,080,390   

Illinois Sports Facilities Authority, RB, State Tax Supported (AMBAC), 5.50%, 6/15/30

     17,620        19,153,116   

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

    

4.25%, 12/15/26

     5,000        2,760,850   

4.70%, 12/15/33

     9,950        3,729,658   

Metropolitan Pier & Exposition Authority, Refunding RB, CAB, McCormick Place Expansion Project, Series B (AGM), 5.11%, 6/15/44 (a)

     3,450        699,625   

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

     675        801,360   

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

     8,070        9,669,474   
    

 

 

 
               68,962,709   
Municipal Bonds   

Par  

(000)

   

Value

 
    

Indiana — 1.2%

    

Indiana Finance Authority, RB, First Lien, CWA Authority Project, Series A, 5.25%, 10/01/38

   $ 1,100      $ 1,260,831   

Indiana Municipal Power Agency, RB, Series B, 5.75%, 1/01/34

     400        420,872   

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

    

5.25%, 1/01/29

     600        680,520   

5.50%, 1/01/38

     1,825        2,073,437   
    

 

 

 
               4,435,660   

Iowa — 4.1%

    

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

     5,725        6,517,168   

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

    

5.60%, 12/01/26

     3,670        4,157,486   

5.70%, 12/01/27

     1,670        1,894,315   

5.80%, 12/01/29

     1,125        1,272,510   

5.85%, 12/01/30

     1,170        1,320,778   
    

 

 

 
               15,162,257   

Louisiana — 1.3%

    

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

     1,250        1,487,600   

Parish of Saint John the Baptist Louisiana, RB, Marathon Oil Corp., Series A, 5.13%, 6/01/37

     3,150        3,388,423   
    

 

 

 
               4,876,023   

Maine — 0.1%

    

Maine State Housing Authority, Refunding RB, Series B-1, AMT, 4.00%, 11/15/27

     335        348,048   

Massachusetts — 1.4%

    

Massachusetts HFA, RB, S/F Housing, Series 128, AMT (AGM), 4.88%, 12/01/38 (d)

     480        494,386   

Massachusetts HFA, Refunding RB, AMT:

    

Rental Housing, Series A (AGM), 5.15%, 7/01/26

     485        490,607   

Series C, 5.35%, 12/01/42

     1,150        1,237,917   

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

     2,700        3,086,748   
    

 

 

 
               5,309,658   

Michigan — 4.0%

    

City of Detroit Michigan, RB (AGM):

    

Sewage Disposal System, Senior Lien, 7.50%, 7/01/33

     500        627,100   

Water Supply System, Second Lien, 6.25%, 7/01/36

     400        467,208   

Water Supply System, Second Lien, 7.00%, 7/01/36

     200        242,880   

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

     2,500        2,862,725   

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

     1,700        2,019,294   

Michigan State Building Authority, Refunding RB, Facilities Program:

    

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

     145        168,162   

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

     700        808,297   

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

     900        1,037,367   

Michigan State HDA, RB, Series C, AMT, 5.50%, 12/01/28

     1,040        1,131,915   

Michigan Strategic Fund, Refunding RB, Detroit Edison Co. Project, AMT (Syncora):

    

Series A, 5.50%, 6/01/30

     1,300        1,318,772   

Series C, 5.45%, 12/15/32

     4,300        4,306,192   
    

 

 

 
               14,989,912   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    21


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

   

Value

 
    

Minnesota — 0.8%

    

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

   $ 2,500      $ 3,087,650   

Mississippi — 0.2%

    

Medical Center Educational Building Corp., RB, University of Mississippi Medical Center Facilities, Expansion & Renovation Project, Series A, 5.00%, 6/01/41

     740        841,965   

Nebraska — 0.2%

    

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

     750        822,503   

Nevada — 3.0%

    

City of Carson City Nevada, RB, Carson-Tahoe Hospital Project, Series A (Radian), 5.50%, 9/01/13 (b)

     1,250        1,303,225   

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

     850        1,001,070   

County of Clark Nevada, ARB:

    

Las Vegas-McCarran International Airport, Series A (AGC), 5.25%, 7/01/39

     3,800        4,282,220   

Subordinate Lien, Series A-2 (NPFGC), 5.00%, 7/01/30

     1,000        1,048,740   

Subordinate Lien, Series A-2 (NPFGC), 5.00%, 7/01/36

     3,200        3,367,872   

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

     75        77,381   
    

 

 

 
               11,080,508   

New Jersey — 6.6%

    

New Jersey EDA, RB:

    

Cigarette Tax (Radian), 5.50%, 6/15/14 (b)

     600        649,974   

Cigarette Tax (Radian), 5.75%, 6/15/14 (b)

     305        331,636   

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

     3,125        3,327,812   

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

     7,800        8,306,220   

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

     2,000        2,354,020   

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

    

5.50%, 12/01/26

     600        691,824   

5.75%, 12/01/27

     3,870        4,516,716   

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

    

Series A, 5.50%, 6/15/41

     2,000        2,339,220   

Series B, 5.25%, 6/15/36

     1,825        2,109,353   
    

 

 

 
               24,626,775   

New York — 5.2%

    

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

     1,500        1,757,400   

Hudson New York Yards Infrastructure Corp., RB, Series A, 5.75%, 2/15/47

     700        826,476   

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

     4,000        5,113,320   

New York City Transitional Finance Authority, RB, Fiscal 2009, Series S-4:

    

5.50%, 1/15/33

     1,600        1,877,280   

5.50%, 1/15/34

     2,750        3,197,342   

New York HFA, RB, Affordable Housing, Series B, 5.30%, 11/01/37

     2,500        2,640,750   

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

     1,200        1,488,216   

New York State Thruway Authority, Refunding RB, Series I, 5.00%, 1/01/37

     2,095        2,387,106   
    

 

 

 
               19,287,890   
Municipal Bonds   

Par  

(000)

   

Value

 
    

North Carolina — 0.2%

    

North Carolina Medical Care Commission, RB, Novant Health Obligation, Series A, 4.75%, 11/01/43

   $ 750      $ 801,960   

Ohio — 0.5%

    

County of Allen Ohio, Refunding RB, Hospital Facilities, Catholic Health Partners, Series A, 5.00%, 5/01/42

     750        822,465   

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

     530        663,025   

Kent State University, RB, General Receipts, Series A, 5.00%, 5/01/37

     430        486,575   
    

 

 

 
               1,972,065   

Pennsylvania — 0.3%

    

Pennsylvania Turnpike Commission, RB, Subordinate, Special Motor License Fund, 6.00%, 12/01/36

     575        707,733   

Philadelphia School District, GO, Series E, 6.00%, 9/01/38

     400        455,268   
    

 

 

 
               1,163,001   

Puerto Rico — 3.1%

    

Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A:

    

6.38%, 8/01/39

     3,200        3,698,688   

6.00%, 8/01/42

     2,275        2,516,173   

Puerto Rico Sales Tax Financing Corp., Refunding RB:

    

CAB, Series A (NPFGC), 5.58%, 8/01/41 (a)

     8,500        1,745,475   

CAB, Series C, 5.44%, 8/01/38 (a)

     8,000        2,008,400   

First Sub-Series C, 6.00%, 8/01/39

     1,180        1,320,833   
    

 

 

 
               11,289,569   

Rhode Island — 0.7%

    

Rhode Island Health & Educational Building Corp., Refunding RB, Public Schools Financing Program, Series E (AGC), 6.00%, 5/15/29

     2,275        2,630,696   

South Carolina — 1.3%

    

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

     115        141,485   

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

     1,000        1,186,790   

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

     3,000        3,388,740   
    

 

 

 
               4,717,015   

Tennessee — 2.6%

    

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

     2,955        3,473,455   

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

     5,000        6,067,500   
    

 

 

 
               9,540,955   

Texas — 12.3%

    

City of Houston Texas, Refunding RB, Combined, First Lien, Series A (AGC):

    

6.00%, 11/15/35

     2,100        2,586,381   

5.38%, 11/15/38

     1,350        1,562,490   

Dallas-Fort Worth International Airport Facilities Improvement Corp., RB, Series A (NPFGC), 5.50%, 11/01/33

     13,000        13,252,070   

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

     1,725        1,967,138   

Midland County Fresh Water Supply District No 1, Refunding RB, CAB, City of Midland Project, Series A, 4.63%, 9/15/36 (a)

     2,130        713,571   
 

 

See Notes to Financial Statements.

 

                
22    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

   

Value

 
    

Texas (concluded)

    

North Texas Tollway Authority, Refunding RB, First Tier:

    

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

   $ 1,600      $ 1,796,032   

Series A, 6.00%, 1/01/28

     2,795        3,270,597   

Series K-1 System, 5.75%, 1/01/38

     3,800        4,345,072   

Series K-2 System, 6.00%, 1/01/38

     4,015        4,651,578   

San Antonio Public Facilities Corp., Refunding RB, CAB (a):

    

4.92%, 9/15/35

     6,765        2,227,444   

4.97%, 9/15/36

     11,525        3,572,520   

5.02%, 9/15/37

     8,245        2,401,439   

Texas State Turnpike Authority, RB, First Tier, Series A (AMBAC), 5.50%, 8/15/39

     3,150        3,173,468   
    

 

 

 
               45,519,800   

Washington — 1.9%

    

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

     1,600        1,826,592   

Washington Health Care Facilities Authority, RB:

    

MultiCare Health System, Series A, 5.00%, 8/15/44

     270        295,339   

Providence Health & Services, Series A, 5.00%, 10/01/39

     900        980,127   

Providence Health & Services, Series A, 5.25%, 10/01/39

     625        695,019   

Washington Health Care Facilities Authority, Refunding RB:

    

Providence Health & Services, Series A, 5.00%, 10/01/42

     200        224,058   

Providence Health & Services, Series D (AGM), 5.25%, 10/01/33

     2,800        3,090,696   
    

 

 

 
               7,111,831   

Wisconsin — 0.6%

    

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

     1,375        1,528,037   

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health, 5.00%, 4/01/42

     480        535,613   
    

 

 

 
               2,063,650   
Total Municipal Bonds — 114.1%              423,333,512   
    
                  

Municipal Bonds Transferred to

Tender Option Bond Trusts (e)

 

Arizona — 0.8%

    

Phoenix Arizona Civic Improvement Corp., RB, Junior Lien, Series A, 5.00%, 7/01/34

     1,200        1,407,336   

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

     1,500        1,706,370   
    

 

 

 
               3,113,706   

California — 2.0%

    

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

     2,500        2,843,450   

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

     404        487,989   

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

     2,810        3,120,083   

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

     840        1,008,818   
    

 

 

 
               7,460,340   

Colorado — 0.3%

    

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

     900        1,028,911   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

   

Value

 
    

District of Columbia — 1.7%

    

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

   $ 1,005      $ 1,260,240   

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

     1,770        2,159,601   

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

     2,530        2,902,694   
    

 

 

 
               6,322,535   

Florida — 7.9%

    

City of Tallahassee Florida, RB (NPFGC):

    

5.00%, 10/01/32 (f)

     4,000        4,475,000   

5.00%, 10/01/37

     7,500        8,164,725   

County of Miami-Dade Florida, RB, 5.00%, 7/01/42

     1,780        2,008,196   

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

     1,349        1,556,003   

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

     10,000        10,991,100   

Orange County School Board, COP, Series A (NPFGC), 5.00%, 8/01/31

     2,000        2,217,400   
    

 

 

 
               29,412,424   

Georgia — 5.0%

    

City of Atlanta Georgia, Refunding GARB, Series B (AGM), 5.25%, 1/01/33

     17,356        18,390,767   

Illinois — 3.6%

    

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

     2,000        2,129,880   

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

     3,430        3,858,956   

Illinois State Toll Highway Authority, RB, Series B, 5.50%, 1/01/33

     1,880        2,113,640   

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

     270        302,114   

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

     4,399        5,048,665   
    

 

 

 
               13,453,255   

Louisiana — 1.6%

    

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

     5,400        6,048,000   

Massachusetts — 3.2%

    

Massachusetts School Building Authority, RB, Series A (AGM):

    

5.00%, 8/15/15 (b)

     1,366        1,509,937   

5.00%, 8/15/30

     9,234        10,207,128   
    

 

 

 
               11,717,065   

Michigan — 1.3%

    

Michigan Finance Authority, Refunding RB, Trinity Health, 5.00%, 12/01/39

     4,300        4,780,353   

Nevada — 3.3%

    

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

     3,778        4,420,581   

Clark County Water Reclamation District, GO, Series B:

    

5.50%, 7/01/29

     4,499        5,549,600   

5.75%, 7/01/34

     1,829        2,293,262   
    

 

 

 
               12,263,443   

New York — 1.6%

    

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

     1,260        1,514,997   

Port Authority of New York & New Jersey, Refunding RB, Construction One Hundred Forty-Third, AMT, 5.00%, 10/01/30

     2,500        2,744,950   

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

     1,300        1,552,473   
    

 

 

 
               5,812,420   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    23


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

   

Value

 
    

Ohio — 0.2%

    

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

   $ 580      $ 663,514   

Puerto Rico — 0.7%

    

Puerto Rico Sales Tax Financing Corp., Refunding RB, Series C, 5.25%, 8/01/40

     2,380        2,612,455   

South Carolina — 2.5%

    

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

    

5.25%, 12/01/28

     3,120        3,475,212   

5.25%, 12/01/29

     2,765        3,050,708   

5.25%, 12/01/30

     1,010        1,112,757   

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

     1,275        1,513,157   
    

 

 

 
               9,151,834   

South Dakota — 0.3%

    

South Dakota HDA, Refunding RB, Homeownership Mortgage Series K, 5.05%, 5/01/36

     1,144        1,170,233   

Texas — 1.2%

    

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

     2,200        2,508,814   

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

     1,600        1,833,104   
    

 

 

 
               4,341,918   

Utah — 1.6%

    

Utah Transit Authority, RB, Series A (AGM), 5.00%, 6/15/36

     5,000        5,808,500   

Virginia — 0.1%

    

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

     350        402,002   

Washington — 1.2%

    

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

     4,004        4,573,825   

Wisconsin — 0.4%

    

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health Inc., 5.25%, 4/01/39 (f)

     1,430        1,589,679   

Total Municipal Bonds Transferred to

Tender Option Bond Trusts — 40.5%

             150,117,179   
Total Long-Term Investments
(Cost — $514,302,709) — 154.6%
             573,450,691   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.04% (g)(h)

     4,871,693        4,871,693   
Total Short-Term Securities
(Cost — $4,871,693) — 1.3%
             4,871,693   
Total Investments (Cost — $519,174,402) — 155.9%        578,322,384   
Other Assets Less Liabilities — 1.5%        5,614,252   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (19.0)%

   

    (70,365,246
VRDP Shares, at Liquidation Value — (38.4)%        (142,500,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 371,071,390   
    

 

 

 
(a)   Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

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

 

Counterparty    Value      Unrealized
Appreciation
 
Citigroup Inc.    $ 787,880       $ 10,629   

 

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

 

(e)   Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(f)   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 agreements is $12,410,495.

 

(g)   Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2012, for purposes of Section 2(a)(3) of the 1940 Act, as amended, were as follows:

 

Affiliate    Shares
Held at
April 30,
2012
     Net
Activity
    Shares
Held at
October 31,
2012
     Income  

FFI Institutional Tax-Exempt Fund

     9,127,957         (4,256,264     4,871,693       $ 950   

 

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

 

Ÿ  

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

 

Ÿ  

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and 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)

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 level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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 is based on the pricing transparency of the investment 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 other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

See Notes to Financial Statements.

 

                
24    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments (concluded)

  

BlackRock MuniEnhanced Fund, Inc. (MEN)

 

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy as of October 31, 2012:

 

      Level 1      Level 2      Level 3      Total  

Assets:

           
Investments:            

Long-Term Investments1

           $ 573,450,691               $ 573,450,691   

Short-Term Securities

   $ 4,871,693                         4,871,693   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 4,871,693       $ 573,450,691               $ 578,322,384   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

1   

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

Certain of the Fund’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1      Level 2     Level 3      Total  

Liabilities:

          

Bank overdraft

           $ (238,216           $ (238,216

TOB trust certificates

             (70,315,120             (70,315,120

VRDP Shares

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

 

 

    

 

 

   

 

 

    

 

 

 

Total

           $ (213,053,336           $ (213,053,336
  

 

 

    

 

 

   

 

 

    

 

 

 

There were no transfers between levels during the six months ended October 31, 2012.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    25


Table of Contents

Schedule of Investments October 31, 2012 (Unaudited)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Alabama — 1.7%

    

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

   $ 4,550      $ 4,462,003   

Alaska — 0.5%

    

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

     1,660        1,406,568   

Arizona — 5.0%

    

Arizona Water Infrastructure Finance Authority, Refunding RB, Water Quality Revenue, Series A, 5.00%, 10/01/23

     3,190        4,049,386   

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

     2,200        1,549,966   

Phoenix IDA Arizona, Refunding RB, America West Airlines, Inc. Project, AMT, 6.30%, 4/01/23

     2,215        1,962,756   

Salt Verde Financial Corp., RB, Senior:

    

5.00%, 12/01/32

     2,000        2,310,560   

5.00%, 12/01/37

     2,360        2,731,558   

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

     155        155,603   
    

 

 

 
               12,759,829   

California — 9.4%

    

Agua Caliente Band of Cahuilla Indians, RB, 5.60%, 7/01/13

     125        124,566   

California Health Facilities Financing Authority, RB:

    

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

     1,530        1,767,456   

Stanford Hospital and Clinics, Series A, 5.00%, 8/15/51

     825        921,698   

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

     2,200        2,643,432   

California State Public Works Board, RB, Various Capital Projects, Sub-Series I-1, 6.38%, 11/01/34

     820        992,413   

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

     1,510        1,628,626   

City of Los Angeles Department of Airports, Refunding RB, Series A, 5.25%, 5/15/39

     555        626,179   

Montebello Unified School District California, GO, CAB (NPFGC) (a):

    

4.02%, 8/01/22

     2,405        1,631,095   

4.24%, 8/01/23

     2,455        1,563,639   

San Diego Unified School District California, GO, CAB, Election of 2008, Series A, 4.54%, 7/01/29 (a)

     3,475        1,644,405   

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

     8,370        10,524,103   
    

 

 

 
               24,067,612   

Colorado — 2.4%

    

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

     1,455        1,516,736   

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

     1,230        1,313,935   

Plaza Metropolitan District No. 1 Colorado, Tax Allocation Bonds, Public Improvement Fee, Tax Increment, Subordinate, 8.13%, 12/01/25

     1,000        999,970   

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

     710        811,431   

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

     1,250        1,481,037   
    

 

 

 
               6,123,109   

Connecticut — 2.2%

    

Connecticut State Development Authority, RB, AFCO, Cargo BDL LLC Project, AMT, 8.00%, 4/01/30 (b)(c)

     2,700        1,671,435   

Connecticut State Health & Educational Facility Authority, RB, Ascension Health Senior Credit, 5.00%, 11/15/40

     955        1,053,699   
Municipal Bonds   

Par  

(000)

    Value  
    

Connecticut (concluded)

    

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

   $ 2,515      $ 2,866,346   
    

 

 

 
               5,591,480   

Delaware — 1.4%

    

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

     790        890,298   

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

     2,430        2,613,757   
    

 

 

 
               3,504,055   

District of Columbia — 3.2%

    

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

     1,520        1,644,974   

Metropolitan Washington Airports Authority, Refunding RB:

    

CAB, Second Senior Lien, Series B (AGC), 5.05%, 10/01/35 (a)

     13,485        4,302,120   

First Senior Lien, Series A, 5.00%, 10/01/39

     505        556,379   

First Senior Lien, Series A, 5.25%, 10/01/44

     1,470        1,633,449   
    

 

 

 
               8,136,922   

Florida — 6.8%

    

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

     750        900,188   

City of Clearwater Florida, RB, Series A, 5.25%, 12/01/39

     2,375        2,715,290   

County of Miami-Dade Florida, RB, CAB, Sub-Series A (NPFGC), 5.50%, 10/01/37 (a)

     2,340        605,218   

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

     2,620        2,991,071   

Greater Orlando Aviation Authority Florida, RB, Special Purpose, JetBlue Airways Corp., AMT, 6.50%, 11/15/36

     2,095        2,115,803   

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

     1,900        1,900,722   

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

     1,570        1,988,593   

Midtown Miami Community Development District, Special Assessment Bonds, Series B, 6.50%, 5/01/37

     2,345        2,402,382   

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

     660        453,235   

Preserve at Wilderness Lake Community Development District, Special Assessment Bonds, Series A, 5.90%, 5/01/34

     1,440        1,444,968   
    

 

 

 
               17,517,470   

Georgia — 1.3%

    

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

     585        648,373   

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

     2,410        2,714,696   
    

 

 

 
               3,363,069   

Hawaii — 0.4%

    

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

     945        1,109,411   

Illinois — 10.7%

    

Chicago Illinois Board of Education, GO Series A, 5.50%, 12/01/39

     1,460        1,709,032   

Chicago Transit Authority, RB, Sales Tax Receipts Revenue, 5.25%, 12/01/40

     730        836,602   

City of Chicago Illinois, GARB, O’Hare International Airport, General Third Lien:

    

Series A, 5.75%, 1/01/39

     2,000        2,360,740   

Series C, 6.50%, 1/01/41

     4,055        5,032,863   
 

 

See Notes to Financial Statements.

 

                
26    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Illinois (concluded)

    

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

   $ 3,160      $ 3,552,535   

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

     570        659,718   

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

     900        921,933   

Illinois Finance Authority, Refunding RB:

    

Central DuPage Health, Series B, 5.50%, 11/01/39

     1,115        1,256,817   

Series A, 5.00%, 11/15/37

     675        754,528   

Series A, 5.00%, 11/15/42

     1,230        1,366,850   

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

    

CAB, Series B-1, AGM, 5.16%, 6/15/47 (a)

     13,220        2,265,644   

Series B-1, AGM, 5.00%, 6/15/50

     2,190        2,384,253   

Series B-2, 5.00%, 6/15/50

     1,740        1,893,799   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     930        1,086,128   

6.00%, 6/01/28

     800        949,760   

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

     440        505,019   
    

 

 

 
               27,536,221   

Indiana — 2.2%

    

Indiana Finance Authority, RB:

    

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

     585        644,641   

Wastewater Utility, CWA Authority Project, First Lien, Series A, 5.25%, 10/01/38

     1,090        1,249,369   

Indiana Finance Authority, Refunding RB:

    

5.00%, 5/01/42 (d)

     1,315        1,436,282   

Parkview Health System, Series A, 5.75%, 5/01/31

     1,300        1,508,871   

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

     775        937,711   
    

 

 

 
               5,776,874   

Iowa — 0.6%

    

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

     1,435        1,633,977   

Kansas — 1.2%

    

Kansas Development Finance Authority, Refunding RB:

    

Adventist Health, 5.75%, 11/15/38

     1,520        1,779,236   

Sisters of Leavenworth, Series A, 5.00%, 1/01/40

     1,155        1,260,867   
    

 

 

 
               3,040,103   

Kentucky — 0.3%

    

Kentucky Economic Development Finance Authority, RB, Owensboro Medical Health System, Series A, 6.38%, 6/01/40

     700        833,000   

Louisiana — 3.0%

    

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

     570        650,239   

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

     3,500        3,939,040   

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

     430        474,161   

State of Louisiana Gasoline & Fuels Tax Revenue, RB, Second Lien, Series B, 5.00%, 5/01/45

     2,270        2,551,798   
    

 

 

 
               7,615,238   

Maine — 0.4%

    

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

     210        228,837   

Maine State Turnpike Authority, RB, Series A, 5.00%, 7/01/42

     615        710,823   
    

 

 

 
               939,660   
Municipal Bonds   

Par  

(000)

    Value  
    

Maryland — 1.1%

    

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

   $ 300      $ 338,640   

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

     580        631,771   

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

     1,520        1,747,042   
    

 

 

 
               2,717,453   

Massachusetts — 2.8%

    

Massachusetts Development Finance Agency, RB, Wellesley College, Series J, 5.00%, 7/01/42

     1,260        1,473,507   

Massachusetts Development Finance Agency, Refunding RB, Boston University, Series P, 5.45%, 5/15/59

     1,165        1,389,286   

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

     1,255        1,372,255   

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

     2,900        2,947,473   
    

 

 

 
               7,182,521   

Michigan — 2.6%

    

City of Detroit Michigan, RB:

    

Sewage Disposal System, Series B, Senior Lien (AGM), 7.50%, 7/01/33

     635        796,417   

Water Supply System, Series A, Senior Lien, 5.25%, 7/01/41

     2,145        2,284,618   

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

     955        1,070,507   

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

     2,105        2,423,697   
    

 

 

 
               6,575,239   

Minnesota — 2.9%

    

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

     2,135        2,572,867   

Tobacco Securitization Authority Minnesota, Refunding RB:

    

5.25%, 3/01/25

     3,110        3,544,032   

5.25%, 3/01/31

     1,310        1,459,104   
    

 

 

 
               7,576,003   

Mississippi — 0.3%

    

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

     675        767,549   

Nebraska — 0.7%

    

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

    

5.25%, 9/01/37

     575        630,585   

5.00%, 9/01/42

     1,005        1,073,471   
    

 

 

 
               1,704,056   

New Hampshire — 1.4%

    

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

     3,035        3,571,224   

New Jersey — 3.0%

    

New Jersey EDA, ARB, Continental Airlines Inc. Project, AMT, 6.25%, 9/15/29

     1,365        1,397,364   

New Jersey EDA, Refunding RB, Cigarette Tax, 5.00%, 6/15/25

     680        769,604   

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

    

Series A, 5.50%, 6/15/41

     1,575        1,842,136   

Series B, 5.25%, 6/15/36

     1,705        1,970,656   

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

     1,725        1,682,392   
    

 

 

 
               7,662,152   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    27


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

New York — 7.0%

    

Dutchess County Industrial Development Agency New York, Refunding RB, St. Francis Hospital, Series A, 7.50%, 3/01/29

   $ 890      $ 915,445   

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

     1,450        1,730,865   

Metropolitan Transportation Authority, RB, Series E, 5.00%, 11/15/42

     375        424,301   

Metropolitan Transportation Authority, Refunding RB:

    

Series B, 5.00%, 11/15/34

     1,740        1,966,391   

Series D, 5.25%, 11/15/40

     840        953,551   

New York City Industrial Development Agency, RB:

    

British Airways Plc Project, AMT, 7.63%, 12/01/32

     1,500        1,537,500   

Continental Airlines Inc. Project, Mandatory Put Bonds, AMT, 8.38%, 11/01/16

     725        728,618   

Series C, 6.80%, 6/01/28

     535        541,918   

New York Liberty Development Corp., Refunding RB, Second Priority, Bank of America Tower at One Bryant Park Project, 6.38%, 7/15/49

     850        987,360   

New York State Thruway Authority, RB, Series I, 5.00%, 1/01/42

     1,235        1,401,947   

Port Authority of New York & New Jersey, RB, JFK International Air Terminal:

    

6.00%, 12/01/36

     900        1,057,194   

6.00%, 12/01/42

     875        1,021,116   

Sales Tax Asset Receivable Corp, Refunding RB, Series A, 5.25%, 10/15/27

     4,240        4,604,598   
    

 

 

 
               17,870,804   

North Carolina — 0.4%

    

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

     970        1,065,031   

Oregon — 0.1%

    

City of Tigard Washington County Oregon, Refunding RB, Water System, 5.00%, 8/01/37

     175        203,586   

Pennsylvania — 4.3%

    

Allegheny County Hospital Development Authority, Refunding RB, Health System, West Penn, Series A, 5.38%, 11/15/40

     1,125        795,982   

Bucks County IDA, RB, Ann’s Choice Inc. Facility, Series A, 6.25%, 1/01/35

     1,700        1,718,751   

Pennsylvania Economic Development Financing Authority, RB:

    

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

     2,520        2,952,130   

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

     2,500        2,453,200   

Philadelphia Authority for Industrial Development, RB:

    

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

     1,105        1,132,968   

Commercial Development, AMT, 7.75%, 12/01/17

     725        726,102   

Saligman House Project, Series C, 6.10%, 7/01/33

     1,245        1,276,511   
    

 

 

 
               11,055,644   

Puerto Rico — 3.3%

    

Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A, 6.50%, 8/01/44

     3,860        4,527,780   

Puerto Rico Sales Tax Financing Corp., RB, CAB, Series A, 5.82%, 8/01/35 (a)

     4,000        1,084,720   

Puerto Rico Sales Tax Financing Corp., Refunding RB, CAB (a):

    

First Sub-Series C, 5.97%, 8/01/38

     2,975        654,083   

Senior Series C, 5.45%, 8/01/39

     9,665        2,293,698   
    

 

 

 
               8,560,281   

South Carolina — 1.0%

    

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

     2,285        2,579,582   
Municipal Bonds   

Par  

(000)

    Value  
    

South Dakota — 0.3%

    

South Dakota Health and Educational Facilities Authority, RB, Series E, 5.00%, 11/01/42 (d)

   $ 745      $ 816,200   

Tennessee — 1.0%

    

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

     2,320        2,320,673   

Rutherford County Health & Educational Facilities Board, RB, 5.00%, 11/15/47

     150        169,537   
    

 

 

 
               2,490,210   

Texas — 11.4%

    

Brazos River Harbor Navigation District, Refunding RB, Dow Chemical Co. Project, Series A7, AMT, 6.63%, 5/15/33

     3,655        3,700,943   

Central Texas Regional Mobility Authority, Refunding RB, Senior Lien, 6.25%, 1/01/46

     1,480        1,729,054   

City of Austin Texas, Refunding RB, Water & Wastewater System Revenue, 5.00%, 11/15/37

     440        514,540   

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

     1,050        1,211,375   

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

     1,070        1,241,649   

Dallas Fort Worth International Airport, Refunding ARB, Series E, AMT, 5.00%, 11/01/35

     1,255        1,372,543   

Fort Bend County Industrial Development Corp., RB, Series B, 4.75%, 11/01/42

     1,030        1,042,278   

Harris County Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/35

     1,910        2,396,916   

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

     450        526,658   

North Texas Tollway Authority, RB, CAB, Special Projects System, Series B, 5.33%, 9/01/37 (a)

     1,400        379,064   

North Texas Tollway Authority, Refunding RB, Toll, Second Tier, Series F, 6.13%, 1/01/31

     4,190        4,646,794   

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

    

5.50%, 8/01/24

     1,100        1,304,787   

5.50%, 8/01/25

     1,120        1,329,877   

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        2,468,520   

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

     1,700        2,061,998   

Texas State Public Finance Authority, Refunding ERB, KIPP Inc., Series A (ACA), 5.00%, 2/15/36

     875        895,694   

University of Texas System, Refunding RB, Revenue Financing System, Series B, 5.00%, 8/15/43

     2,145        2,534,425   
    

 

 

 
               29,357,115   

Utah — 0.6%

    

Utah County,Utah, RB, IHC Health Services, Inc., 5.00%, 5/15/43

     1,405        1,584,798   

Vermont — 0.4%

    

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

     890        900,315   

Virginia — 1.5%

    

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

     1,000        1,030,810   

Virginia Small Business Financing Authority, RB, AMT:

    

5.25%, 1/01/32

     550        600,490   

6.00%, 1/01/37

     1,275        1,466,658   

5.50%, 1/01/42

     805        882,699   
    

 

 

 
               3,980,657   
 

 

See Notes to Financial Statements.

 

                
28    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund, Inc. (MHD)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Washington — 1.5%

    

Seattle Housing Authority Washington, RB, Replacement Housing Projects, 6.13%, 12/01/32

   $ 1,225      $ 1,225,711   

Washington Health Care Facilities Authority, RB, Swedish Health Services, Series A, 6.75%, 5/15/21 (e)

     1,375        1,937,994   

Washington Health Care Facilities Authority, Refunding RB, Providence Health & Services, Series A, 5.00%, 10/01/42

     705        789,804   
    

 

 

 
               3,953,509   

Wisconsin — 4.1%

    

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

     4,980        6,106,326   

Wisconsin Health & Educational Facilities Authority, RB:

    

Ascension Health Senior Credit Group, 5.00%, 11/15/33

     1,710        1,900,323   

New Castle Place Project, Series A, 7.00%, 12/01/31

     825        767,737   

SynergyHealth Inc., 6.00%, 8/01/13 (e)

     1,755        1,830,237   
    

 

 

 
               10,604,623   

Wyoming — 0.1%

    

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

     210        228,176   

Total Municipal Bonds — 104.5%

             268,423,329   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
 

Arizona — 0.7%

    

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

     1,690        1,922,361   

California — 9.9%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/44

     2,270        2,643,138   

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

     1,845        2,160,587   

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

     4,120        4,656,910   

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

     1,620        1,842,556   

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

     748        903,683   

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

     6,600        7,529,280   

Sequoia Union High School District California, GO, Refunding, Election of 2004, Series B (AGM), 5.50%, 7/01/35

     3,494        3,947,778   

University of California, RB, Limited Project, Series B, 4.75%, 5/15/38

     1,670        1,736,640   
    

 

 

 
               25,420,572   

Colorado — 2.4%

    

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

    

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

     2,580        2,763,386   

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

     1,650        1,768,586   

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

     1,490        1,703,419   
    

 

 

 
               6,235,391   
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
  

Par  

(000)

    Value  
    

Connecticut — 2.9%

    

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

    

Series T-1, 4.70%, 7/01/29

   $ 3,180      $ 3,593,400   

Series X-3, 4.85%, 7/01/37

     3,270        3,725,380   
    

 

 

 
               7,318,780   

Florida — 1.7%

    

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

     3,939        4,446,491   

Georgia — 1.0%

    

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

     2,259        2,554,061   

Illinois — 0.9%

    

City of Chicago Illinois Waterworks, Refunding RB, 5.00%, 11/01/42

     2,079        2,362,909   

Maryland — 1.3%

    

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

     2,920        3,256,346   

Massachusetts — 3.6%

    

Massachusetts School Building Authority, RB:

    

5.00%, 8/15/15 (e)

     644        711,407   

5.00%, 8/15/30

     4,350        4,809,092   

Senior Series B, 5.00%, 10/15/41

     3,150        3,660,300   
    

 

 

 
               9,180,799   

Michigan — 0.8%

    

Detroit Water and Sewerage Department, Refunding RB, Senior Lien, Series A:

    

5.00%, 7/01/32

     1,088        1,158,644   

5.25%, 7/01/39

     937        1,015,342   
    

 

 

 
               2,173,986   

New Hampshire — 0.7%

    

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/39 (g)

     1,409        1,685,641   

New York — 8.9%

    

Hudson New York Yards Infrastructure Corp., RB, 5.75%, 2/15/47

     1,110        1,310,439   

New York City Municipal Water Finance Authority, Refunding RB, Water & Sewer, Series FF-2, 5.50%, 6/15/40

     1,110        1,329,850   

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

     1,720        1,982,073   

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

     7,440        8,555,363   

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

     4,460        5,258,295   

New York State Dormitory Authority, ERB, Series F, 5.00%, 3/15/35

     4,034        4,386,907   
    

 

 

 
               22,822,927   

North Carolina — 0.5%

    

North Carolina Capital Facilities Finance Agency, Refunding RB, Wake Forest University, 5.00%, 1/01/38

     1,080        1,208,477   

Ohio — 4.2%

    

State of Ohio, Refunding RB, Cleveland Clinic Health, Series A, 5.50%, 1/01/39

     9,644        10,898,394   

Tennessee — 1.0%

    

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

     2,250        2,479,478   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    29


Table of Contents

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  
    

Texas — 3.1%

    

County of Harris Texas, RB, Senior Lien, Toll Road, Series A, 5.00%, 8/15/38 (g)

   $ 4,620      $ 5,198,609   

Harris County Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/41

     2,350        2,700,314   
    

 

 

 
               7,898,923   

Utah — 1.1%

    

City of Riverton Utah Hospital, RB, IHC Health Services Inc., 5.00%, 8/15/41

     2,519        2,761,794   

Virginia — 2.6%

    

University of Virginia, Refunding RB, General, 5.00%, 6/01/40

     3,749        4,332,280   

Virginia Small Business Financing Authority, Refunding RB, Sentara Healthcare, 5.00%, 11/01/40

     2,094        2,319,007   
    

 

 

 
               6,651,287   

Washington — 0.8%

    

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

     1,860        2,124,173   

Wisconsin — 1.7%

    

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health Inc., 5.25%, 4/01/39 (g)

     3,959        4,402,187   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 49.8%
        127,804,977   

Total Long-Term Investments

(Cost — $355,973,790) — 154.3%

             396,228,306   
    
   
Short-Term Securities    Shares         

Money Market Fund — 0.0%

    

FFI Institutional Tax-Exempt Fund, 0.04% (h)(i)

     39,693        39,693   
     

Par  

(000)

        

Colorado — 0.1%

    

City & County of Denver Colorado, COP, Refunding, VRDN, Series A3 (JPMorgan Chase Bank NA SBPA), 0.23%, 11/01/12 (j)

   $ 200        200,000   

Massachusetts — 2.1%

    

Commonwealth of Massachusetts, GO, VRDN, Consolidated Loan, Series B (JPMorgan Chase Bank NA SBPA), 0.23%, 11/01/12 (j)

     5,480        5,480,000   

Connecticut — 1.7%

    

Connecticut Housing Finance Authority, Refunding RB, VRDN, Housing Mortgage Finance Program, Sub-Series A-2 (JPMorgan Chase Bank NA SBPA), 0.23%, 11/01/12 (j)

     4,350        4,350,000   
Total Short-Term Securities
(Cost — $10,069,693) — 3.9%
             10,069,693   
Total Investments (Cost — $366,043,483) — 158.2%        406,297,999   
Other Assets Less Liabilities — 0.8%        1,931,788   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (26.4)%

   

    (67,732,503
VMTP Shares, at Liquidation Value — (32.6)%        (83,700,000
    

 

 

 
Net Assets — 100.0%      $ 256,797,284   
    

 

 

 
(a)   Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

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

 

(c)   Non-income producing security.

 

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

 

Counterparty    Value      Unrealized
Appreciation
 
Wells Fargo & Co.    $ 1,436,282       $ 7,759   
Cain Brothers & Co.    $ 816,200       $ 5,170   

 

(e)   US 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)   Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 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 agreements is $7,203,042.

 

(h)   Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2012, for purposes of Section 2(a)(3) of the 1940 Act, as amended, were as follows:

 

Affiliate    Shares
Held at
April 30,
2012
     Net
Activity
     Shares
Held at
October 31,
2012
     Income  

FFI Institutional Tax-Exempt Fund

     22,614         17,079         39,693       $ 11   

 

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

 

(j)   Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

 

Ÿ  

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

 

Ÿ  

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and 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)

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 level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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 is based on the pricing transparency of the investment 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 other significant accounting policies, please refer to the Note 1 of the Notes to Financial Statements.

 

 

See Notes to Financial Statements.

 

                
30    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Schedule of Investments (concluded)    BlackRock MuniHoldings Fund, Inc. (MHD)

 

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy as of October 31, 2012:

 

      Level 1      Level 2      Level 3      Total  

Assets:

           
Investments:            

Long-Term Invest-
ments
1

           $ 396,228,306               $ 396,228,306   

Short-Term
Securities

   $ 39,693         10,030,000                 10,069,693   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 39,693       $ 406,258,306               $ 406,297,999   
  

 

 

 

 

1  

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

Certain of the Fund’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1      Level 2     Level 3      Total  
Liabilities:           

TOB trust
certificates

           $ (67,690,138           $ (67,690,138

VMTP Shares

             (83,700,000             (83,700,000
  

 

 

 

Total

           $ (151,390,138           $ (151,390,138
  

 

 

 

There were no transfers between levels during the six months ended October 31, 2012.

 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    31


Table of Contents

Schedule of Investments October 31, 2012 (Unaudited)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Alabama — 1.8%

    

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

   $ 3,450      $ 3,383,277   

Alaska — 0.7%

    

Northern Tobacco Securitization Corp., Refunding RB, 5.00%, 6/01/46

     1,660        1,406,568   

Arizona — 3.1%

    

Arizona Water Infrastructure Finance Authority, Refunding RB, Series A, 5.00%, 10/01/23

     2,310        2,932,314   

Phoenix IDA Arizona, Refunding RB, America West Airlines, Inc. Project, AMT, 6.30%, 4/01/23

     2,060        1,825,407   

Pima County IDA, RB, Arizona Charter Schools Project, Series C, 6.75%, 7/01/31

     910        911,101   

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

     325        326,265   
    

 

 

 
               5,995,087   

California — 13.0%

    

Benicia Unified School District, GO, CAB, Refunding, Series A (NPFGC), 3.19%, 8/01/20 (a)

     2,000        1,565,480   

California Health Facilities Financing Authority, RB:

    

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

     1,110        1,282,272   

Stanford Hospital and Clinics, Series A, 5.00%, 8/15/51

     595        664,740   

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

     1,585        1,904,473   

California State Public Works Board, RB, Various Capital Projects, Sub-Series l-1, 6.38%, 11/01/34

     600        726,156   

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

     1,090        1,175,630   

City of Los Angeles Department of Airports, Refunding RB, Series A, 5.25%, 5/15/39

     400        451,300   

San Diego Unified School District California, GO, CAB, Election of 2008, Series A, 4.54%, 7/01/29 (a)

     2,525        1,194,855   

San Marino Unified School District California, GO, Series A (NPFGC) (a):

    

1.97%, 7/01/17

     1,820        1,660,914   

2.14%, 7/01/18

     1,945        1,724,029   

2.40%, 7/01/19

     2,070        1,765,669   

State of California, GO, Various Purpose:

    

6.00%, 3/01/33

     1,265        1,568,549   

6.50%, 4/01/33

     7,325        9,210,162   
    

 

 

 
               24,894,229   

Colorado — 1.9%

    

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

     1,055        1,099,764   

Plaza Metropolitan District No. 1 Colorado, Tax Allocation Bonds, Public Improvement Fee, Tax Increment, 8.13%, 12/01/25

     860        859,974   

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

     510        582,859   

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

     920        1,090,043   
    

 

 

 
               3,632,640   

Connecticut — 1.5%

    

Connecticut State Health & Educational Facility Authority, RB, Ascension Health Senior Credit, 5.00%, 11/15/40

     685        755,795   

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

     1,875        2,136,937   
    

 

 

 
               2,892,732   

Delaware — 1.5%

    

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

     570        642,367   

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

     2,050        2,205,021   
    

 

 

 
               2,847,388   
Municipal Bonds   

Par  

(000)

    Value  
    

District of Columbia — 2.5%

    

Metropolitan Washington Airports Authority, Refunding RB:

    

CAB, Second Senior Lien, Series B (AGC), 5.00%, 10/01/34 (a)

   $ 10,170      $ 3,446,714   

First Senior Lien, Series A, 5.00%, 10/01/39

     255        280,944   

First Senior Lien, Series A, 5.25%, 10/01/44

     1,000        1,111,190   
    

 

 

 
               4,838,848   

Florida — 5.5%

    

Ballantrae Community Development District, Special Assessment Bonds, 6.00%, 5/01/35

     1,500        1,523,580   

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

     545        654,136   

City of Clearwater FL, RB, Series A, 5.25%, 12/01/39

     1,725        1,972,158   

County of Miami-Dade Florida, RB, CAB, Sub-Series A (NPFGC), 5.50%, 10/01/37 (a)

     1,765        456,499   

Greater Orlando Aviation Authority Florida, RB, Special Purpose, JetBlue Airways Corp., AMT, 6.50%, 11/15/36

     1,515        1,530,044   

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

     1,380        1,380,524   

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

     1,135        1,437,614   

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

     480        329,626   

Preserve at Wilderness Lake Community Development District, Special Assessment Bonds, Series A, 5.90%, 5/01/34

     1,175        1,179,054   
    

 

 

 
               10,463,235   

Georgia — 1.3%

    

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

     420        465,499   

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

     1,740        1,959,988   
    

 

 

 
               2,425,487   

Hawaii — 0.4%

    

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

     680        798,306   

Idaho — 1.0%

    

Power County Industrial Development Corp., RB, FMC Corp. Project, AMT, 6.45%, 8/01/32

     2,000        2,003,260   

Illinois — 11.1%

    

Chicago Board of Education Illinois, GO, Series A, 5.50%, 12/01/39

     1,060        1,240,804   

Chicago Transit Authority, RB, Sales Tax Receipts Revenue, 5.25%, 12/01/40

     530        607,396   

City of Chicago Illinois, GARB, O’Hare International Airport, General, Third Lien:

    

Series A, 5.75%, 1/01/39

     2,500        2,950,925   

Series C, 6.50%, 1/01/41

     2,935        3,642,775   

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

     2,290        2,574,464   

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

     410        474,534   

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

     900        921,933   

Illinois Finance Authority, Refunding RB:

    

Ascension Health Alliance, Series A, 5.00%, 11/15/37

     490        547,732   

Ascension Health Alliance, Series A, 5.00%, 11/15/42

     890        989,021   

Central DuPage Health, Series B, 5.50%, 11/01/39

     800        901,752   

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

    

CAB, Series B-1 (AGM), 5.16%, 6/15/47 (a)

     9,555        1,637,536   

Series B-1 (AGM), 5.00%, 6/15/50

     1,585        1,725,590   

Series B-2, 5.00%, 6/15/50

     1,260        1,371,371   
 

 

See Notes to Financial Statements.

 

                
32    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Illinois (concluded)

    

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

   $ 675      $ 788,319   

6.00%, 6/01/28

     500        593,600   

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

     315        361,548   
    

 

 

 
               21,329,300   

Indiana — 2.6%

    

Indiana Finance Authority, RB:

    

CWA Authority Project, First Lien, Series A, 5.25%, 10/01/38

     790        905,506   

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

     420        462,819   

Indiana Finance Authority, Refunding RB:

    

Community Health Network Project, Series A, 5.00%, 5/01/42 (b)

     955        1,043,080   

Parkview Health System, Series A, 5.75%, 5/01/31

     1,660        1,926,712   

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

     565        683,622   
    

 

 

 
               5,021,739   

Iowa — 0.6%

    

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

     1,080        1,229,753   

Kansas — 1.1%

    

Kansas Development Finance Authority, Refunding RB:

    

Adventist Health, 5.75%, 11/15/38

     1,105        1,293,458   

Sisters of Leavenworth, Series A, 5.00%, 1/01/40

     785        856,953   
    

 

 

 
               2,150,411   

Kentucky — 0.3%

    

Kentucky Economic Development Finance Authority, RB, Owensboro Medical Health System, Series A, 6.38%, 6/01/40

     510        606,900   

Louisiana — 2.9%

    

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

     420        479,123   

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

     2,500        2,813,600   

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

     310        341,837   

State of Louisiana Gasoline & Fuels Tax Revenue, RB, Second Lien, Series B, 5.00%, 5/01/45

     1,640        1,843,590   
    

 

 

 
               5,478,150   

Maine — 0.4%

    

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

     150        163,455   

Maine State Turnpike Authority, RB, Series A, 5.00%, 7/01/42

     450        520,115   
    

 

 

 
               683,570   

Maryland — 1.0%

    

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

     220        248,336   

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

     415        452,043   

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

     1,095        1,258,560   
    

 

 

 
               1,958,939   

Massachusetts — 4.5%

    

Massachusetts Development Finance Agency, RB:

    

Neville Communities, Series A (Ginnie Mae), 5.75%, 6/20/22

     600        634,284   
Municipal Bonds   

Par  

(000)

    Value  
    

Massachusetts (concluded)

    

Massachusetts Development Finance Agency, RB: (concluded)

    

Neville Communities, Series A (Ginnie Mae), 6.00%, 6/20/44

   $ 1,500      $ 1,584,900   

Wellesley College, Series J, 5.00%, 7/01/42

     915        1,070,047   

Massachusetts Development Finance Agency, Refunding RB, Boston University, Series P, 5.45%, 5/15/59

     845        1,007,679   

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

     910        995,021   

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

     2,100        2,134,377   

Massachusetts HFA, Refunding HRB, Series F, AMT, 5.70%, 6/01/40

     1,045        1,125,434   
    

 

 

 
               8,551,742   

Michigan — 2.5%

    

City of Detroit Michigan, RB, Senior Lien:

    

Sewage Disposal System, Series B (AGM), 7.50%, 7/01/33

     460        576,932   

Water Supply System, Series A, 5.25%, 7/01/41

     1,555        1,656,215   

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

     690        773,455   

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

     1,520        1,750,128   
    

 

 

 
               4,756,730   

Minnesota — 2.9%

    

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

     1,540        1,855,839   

Tobacco Securitization Authority Minnesota, Refunding RB:

    

5.25%, 3/01/25

     2,260        2,575,405   

5.25%, 3/01/31

     950        1,058,129   
    

 

 

 
               5,489,373   

Nebraska — 0.4%

    

Central Plains Energy Project Nebraska, RB, Gas Project No. 3, 5.00%, 9/01/42

     730        779,735   

New Hampshire — 0.9%

    

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

     1,530        1,800,320   

New Jersey — 2.2%

    

New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT, 5.25%, 9/15/29

     990        1,013,473   

New Jersey EDA, Refunding RB, Cigarette Tax, 5.00%, 6/15/25

     490        554,567   

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

    

Series A, 5.50%, 6/15/41

     1,025        1,198,850   

Series B, 5.25%, 6/15/36

     1,235        1,427,426   
    

 

 

 
               4,194,316   

New York — 6.5%

    

Dutchess County Industrial Development Agency New York, Refunding RB, St. Francis Hospital, Series A, 7.50%, 3/01/29

     800        822,872   

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

     1,050        1,253,385   

Metropolitan Transportation Authority, RB, Series E, 5.00%, 11/15/42

     275        311,154   

Metropolitan Transportation Authority, Refunding RB:

    

Series B, 5.00%, 11/15/34

     1,270        1,435,239   

Series D, 5.25%, 11/15/40

     610        692,460   

New York City Industrial Development Agency, RB:

    

Continental Airlines Inc. Project, AMT, 8.00%, 11/01/12

     340        340,000   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    33


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

New York (concluded)

    

New York City Industrial Development Agency, RB: (concluded)

    

Continental Airlines Inc. Project, Mandatory Put Bonds, AMT, 8.38%, 11/01/16 (c)

   $ 525      $ 527,620   

Series C, 6.80%, 6/01/28

     415        420,366   

New York Liberty Development Corp., Refunding RB, Second Priority, Bank of America Tower at One Bryant Park Project, 6.38%, 7/15/49

     615        714,384   

New York State Thruway Authority, RB, Series I, 5.00%, 1/01/42

     890        1,010,310   

Port Authority of New York & New Jersey, RB, JFK International Air Terminal:

    

6.00%, 12/01/36

     650        763,529   

6.00%, 12/01/42

     630        735,204   

Sales Tax Asset Receivable Corp, Refunding RB, (AMBAC), 5.25%, 10/15/27

     3,200        3,475,168   
    

 

 

 
               12,501,691   

North Carolina — 0.4%

    

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

     705        774,069   

Oregon — 0.1%

    

City of Tigard Washington County Oregon, Refunding RB, Water System, 5.00%, 8/01/37

     125        145,419   

Pennsylvania — 2.5%

    

Allegheny County Hospital Development Authority, Refunding RB, Health System, West Penn, Series A, 5.38%, 11/15/40

     810        573,107   

Pennsylvania Economic Development Financing Authority, RB:

    

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

     1,830        2,143,809   

National Gypsum Co., Series A, AMT, 6.25%, 11/01/27

     1,500        1,489,920   

Philadelphia Authority for Industrial Development, RB, Commercial Development, AMT, 7.75%, 12/01/17

     540        540,821   
    

 

 

 
               4,747,657   

Puerto Rico — 3.7%

    

Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A, 6.50%, 8/01/44

     2,790        3,272,670   

Puerto Rico Sales Tax Financing Corp., RB, CAB, Series A, 5.82%, 8/01/35 (a)

     10,000        2,711,800   

Puerto Rico Sales Tax Financing Corp., Refunding RB, CAB (a):

    

First Sub-Series C, 5.97%, 8/01/38

     2,145        471,600   

Series C, 5.45%, 8/01/39

     2,800        664,496   
    

 

 

 
               7,120,566   

South Carolina — 1.0%

    

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

     1,650        1,862,718   

South Dakota — 0.3%

    

South Dakota Health and Educational Facilities Authority, RB, Series E, 5.00%, 11/01/42 (b)

     540        591,608   

Tennessee — 1.0%

    

Hardeman County Correctional Facilities Corp. Tennessee, RB, Series B, 7.38%, 8/01/17

     1,900        1,905,339   

Rutherford County Health & Educational Facilities Board, RB, Ascension Health, Series C, 5.00%, 11/15/47

     105        118,676   
    

 

 

 
               2,024,015   

Texas — 9.9%

    

Brazos River Harbor Navigation District, Refunding RB, Dow Chemical Co. Project, Series A7, AMT, 6.63%, 5/15/33

     2,500        2,531,425   

Central Texas Regional Mobility Authority, Refunding RB, Senior Lien, 6.25%, 1/01/46

     1,070        1,250,060   
Municipal Bonds   

Par  

(000)

    Value  
    

Texas (concluded)

    

City of Austin Texas, Refunding RB, Water & Wastewater System Revenue, 5.00%, 11/15/37

   $ 315      $ 368,364   

City of Dallas Texas, Refunding RB, 5.00%, 10/01/35

     760        876,804   

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

     535        620,825   

Dallas Fort Worth International Airport, Refunding RB, Series E, AMT, 5.00%, 11/01/35

     910        995,231   

Fort Bend County Industrial Development Corp., RB, Series B, 4.75%, 11/01/42

     745        753,880   

Harris County Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/35

     1,380        1,731,803   

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

     320        374,512   

Midland County Fresh Water Supply District No 1, RB, CAB, City of Midland Project, Series A (a):

    

4.88%, 9/15/40

     2,525        658,949   

4.95%, 9/15/41

     1,395        340,464   

North Texas Tollway Authority, RB, CAB, Special Projects System, Series B, 5.33%, 9/01/37 (a)

     1,015        274,821   

North Texas Tollway Authority, Refunding RB, Toll, Second Tier, Series F, 6.13%, 1/01/31

     3,020        3,349,241   

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        1,437,913   

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

     1,300        1,576,822   

University of Texas System, Refunding RB, Series B, 5.00%, 8/15/43

     1,555        1,837,310   
    

 

 

 
               18,978,424   

Utah — 0.6%

    

County of Utah, RB, IHC Health Services, Inc., 5.00%, 5/15/43

     1,020        1,150,529   

Vermont — 0.0%

    

Vermont Educational & Health Buildings Financing Agency, RB, Developmental & Mental Health, Series A, 6.50%, 6/15/32

     80        80,850   

Virginia — 2.5%

    

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

     2,500        2,577,025   

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

    

5.25%, 1/01/32

     400        436,720   

6.00%, 1/01/37

     925        1,064,046   

5.50%, 1/01/42

     585        641,464   
    

 

 

 
               4,719,255   

Washington — 0.5%

    

Seattle Housing Authority Washington, RB, Replacement Housing Projects, 6.13%, 12/01/32

     910        910,528   

Wisconsin — 3.8%

    

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

     3,620        4,438,735   

Wisconsin Health & Educational Facilities Authority, RB:

    

Ascension Health Senior Credit Group, 5.00%, 11/15/33

     1,235        1,372,456   

SynergyHealth, Inc., 6.00%, 8/1/13 (d)

     1,360        1,418,303   
    

 

 

 
               7,229,494   
Total Municipal Bonds – 100.4%              192,448,858   
 

 

See Notes to Financial Statements.

 

                
34    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

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 (e)
  

Par  

(000)

    Value  
    

Arizona — 0.7%

    

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

   $ 1,220      $ 1,387,740   

California — 13.2%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/44

     1,640        1,909,580   

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

     1,335        1,563,352   

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

     2,980        3,368,348   

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

     1,170        1,330,734   

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

     553        668,726   

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

     4,770        5,441,616   

Sequoia Union High School District California, GO, Refunding, Election of 2004, Series B (AGM), 5.50%, 7/01/35

     5,519        6,235,118   

University of California, RB, Limited Project, Series B, 4.75%, 5/15/38

     4,599        4,783,558   
    

 

 

 
               25,301,032   

Colorado — 2.4%

    

Colorado Health Facilities Authority, RB, Catholic Health:

    

Series C-3 (FSA), 5.10%, 10/01/41

     1,870        2,002,920   

Series C-7 (AGM), 5.00%, 9/01/36

     1,200        1,286,244   

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

     1,080        1,234,693   
    

 

 

 
               4,523,857   

Connecticut — 2.8%

    

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

    

Series T-1, 4.70%, 7/01/29

     2,300        2,599,000   

Series X-3, 4.85%, 7/01/37

     2,370        2,700,046   
    

 

 

 
               5,299,046   

Florida — 1.7%

    

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

     2,840        3,205,085   

Georgia — 1.0%

    

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

     1,649        1,864,690   

Illinois — 2.2%

    

City of Chicago Illinois Waterworks, Refunding RB, 5.00%, 11/01/42

     3,638        4,135,090   

Maryland — 1.2%

    

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

     2,100        2,341,893   

Massachusetts — 3.1%

    

Massachusetts School Building Authority, RB:

    

Senior Series B, 5.00%, 10/15/41

     2,280        2,649,360   

Series A (AGM), 5.00%, 8/15/15 (d)

     387        427,272   

Series A (AGM), 5.00%, 8/15/30

     2,613        2,888,343   
    

 

 

 
               5,964,975   

Michigan — 0.8%

    

Detroit Water and Sewerage Department, Refunding RB, Series A:

    

5.00%, 7/01/32

     788        839,018   

5.25%, 7/01/39

     675        731,046   
    

 

 

 
               1,570,064   

New Hampshire — 0.6%

    

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/39 (f)

     1,019        1,219,400   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  
    

New York — 10.6%

    

Hudson New York Yards Infrastructure Corp., RB, 5.75%, 2/15/47

   $ 810      $ 956,266   

New York City Municipal Water Finance Authority, Refunding RB, Series FF-2, 5.50%, 6/15/40

     810        970,431   

New York City Transitional Finance Authority, RB:

    

Fiscal 2009, Series S-3, 5.25%, 1/15/39

     3,299        3,724,627   

Future Tax Secured Revenue, Sub-Series E-1, 5.00%, 2/01/42

     1,240        1,428,937   

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

     5,400        6,209,537   

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

     3,250        3,831,717   

New York State Dormitory Authority, ERB, Series F, 5.00%, 3/15/35

     2,910        3,163,792   
    

 

 

 
               20,285,307   

North Carolina — 0.5%

    

North Carolina Capital Facilities Finance Agency, Refunding RB, Wake Forest University, 5.00%, 1/01/38

     800        895,168   

Ohio — 4.1%

    

State of Ohio, Refunding RB, Cleveland Clinic Health, Series A, 5.50%, 1/01/39

     6,974        7,881,420   

Tennessee — 1.4%

    

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

     2,500        2,754,975   

Texas — 3.0%

    

County of Harris Texas, RB, Senior Lien, Toll Road, Series A, 5.00%, 8/15/38 (f)

     3,360        3,780,806   

Harris County Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/41

     1,710        1,964,910   
    

 

 

 
               5,745,716   

Utah — 0.8%

    

City of Riverton Utah Hospital, RB, IHC Health Services Inc., 5.00%, 8/15/41

     1,395        1,528,850   

Virginia — 2.5%

    

University of Virginia, Refunding RB, General, 5.00%, 6/01/40

     2,729        3,153,900   

Virginia Small Business Financing Authority, Refunding RB, Sentara Healthcare, 5.00%, 11/01/40

     1,553        1,719,065   
    

 

 

 
               4,872,965   

Washington — 0.8%

    

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

     1,365        1,558,869   

Wisconsin — 1.7%

    

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health Inc., 5.25%, 4/01/39 (f)

     2,859        3,179,357   

Total Municipal Bonds Transferred to

Tender Option Bond Trusts — 55.1%

  

  

    105,515,499   
Total Long-Term Investments
(Cost — $266,458,985) — 155.5%
        297,964,357   
    
   
Short-Term Securities    Shares         

Money Market Fund — 0.0%

    

FFI Institutional Tax-Exempt Fund, 0.04% (g)(h)

     34,963        34,963   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    35


Table of Contents

Schedule of Investments (concluded)

  

BlackRock MuniHoldings Fund II, Inc. (MUH)

(Percentages shown are based on Net Assets)

 

Short-Term Securities   

Par  

(000)

    Value  
    

Colorado — 0.3%

    

City & County of Denver Colorado, COP, Refunding, VRDN, Series A3 (JPMorgan Chase Bank NA SBPA), 0.23%, 11/01/12 (i)

   $ 600      $ 600,000   

Massachusetts — 1.0%

    

Commonwealth of Massachusetts, GO, VRDN, Consolidated Loan, Series B (JPMorgan Chase Bank NA SBPA), 0.25%, 11/01/12 (i)

     2,000        2,000,000   

Virginia — 0.7%

    

Roanoke Economic Development Authority, RB, VRDN, Carilion Health System, Series A-2 (AGM, Wells Fargo Bank NA SBPA), 0.21%, 11/01/12 (i)

     1,300        1,300,000   
Total Short-Term Securities
(Cost — $3,934,963) — 2.0%
             3,934,963   
Total Investments (Cost — $270,393,948) — 157.5%        301,899,320   
Other Assets Less Liabilities — 0.7%        1,411,248   

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (29.5)%

       (56,597,818
VMTP Shares, at Liquidation Value — (28.7)%        (55,000,000
    

 

 

 
Net Assets Applicable to Common Shares— 100.0%      $ 191,712,750   
    

 

 

 
                  

 

(a)   Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

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

 

Counterparty    Value      Unrealized
Appreciation
 
Wells Fargo & Co.    $ 1,043,080       $ 5,635   
Cain Brothers & Co.    $ 591,608       $ 3,748   

 

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

 

(d)   US 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.

 

(e)   Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(f)   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 agreements is $5,218,584.

 

(g)   Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2012, for purposes of Section 2(a)(3) of the 1940 Act, as amended, were as follows:

 

Affiliate    Shares
Held at
April 30,
2012
     Net
Activity
     Shares
Held at
October 31,
2012
     Income  

FFI Institutional Tax-Exempt Fund

     27,550         7,413         34,963       $ 4   

 

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

 

(i)   Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

 

Ÿ  

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

 

Ÿ  

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and 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)

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 level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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 is based on the pricing transparency of the investment 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 other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy as of October 31, 2012:

 

      Level 1      Level 2      Level 3      Total  

Assets:

           
Investments:            

Long-Term Invest-
ments
1

           $ 297,964,357               $ 297,964,357   

Short-Term Securities

   $ 34,963         3,900,000                 3,934,963   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 34,963       $ 301,864,357               $ 301,899,320   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

  1 See  

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

Certain of the Fund’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1      Level 2     Level 3      Total  

Liabilities:

         

TOB trust certificates

          $ (56,562,094           $ (56,562,094

VMTP Shares

            (55,000,000             (55,000,000
 

 

 

 

Total

          $ (111,562,094           $ (111,562,094
 

 

 

 

There were no transfers between levels during the six months ended October 31, 2012.

 

 

See Notes to Financial Statements.

 

                
36    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments October 31, 2012 (Unaudited)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Alabama — 1.7%

    

Birmingham Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/39

   $ 2,330      $ 2,770,976   

Selma IDB, RB, International Paper Company Project, Series A, 5.38%, 12/01/35

     565        618,929   
    

 

 

 
               3,389,905   

Arizona — 0.6%

    

University of Arizona, Refunding RB, Arizona Board of Regents, Series A, 5.00%, 6/01/42

     1,000        1,147,520   

California — 18.6%

    

California Educational Facilities Authority, RB, University of Southern California, Series A, 5.25%, 10/01/38

     2,895        3,428,433   

California Health Facilities Financing Authority, RB:

    

Stanford Hospital and Clinics, Series A, 5.00%, 8/15/42

     1,670        1,877,497   

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

     1,730        2,078,699   

Central Unified School District, GO, Election of 2008, Series A (AGC), 5.63%, 8/01/33

     1,325        1,530,786   

City of San Jose California, Refunding ARB,
Series A-1, AMT:

    

5.50%, 3/01/30

     2,400        2,751,696   

5.75%, 3/01/34

     2,180        2,521,541   

City of Sunnyvale California, Refunding RB,
5.25%, 4/01/40

     1,605        1,856,199   

County of Sacramento California, ARB, Senior Series A (AGC), 5.50%, 7/01/41

     2,100        2,362,311   

Los Angeles Community College District California, GO, Election of 2008, Series C, 5.25%, 8/01/39

     1,000        1,207,830   

Los Angeles Department of Water & Power, RB, Power System, Sub-Series A-1, 5.25%, 7/01/38

     1,575        1,836,875   

Oceanside Unified School District California, GO, Series A (AGC), 5.25%, 8/01/33

     1,825        2,048,489   

Redondo Beach Unified School District, GO, Election of 2008, Series E, 5.50%, 8/01/34

     1,335        1,592,375   

San Bernardino Community College District, GO, Election of 2002, Series A, 6.25%, 8/01/33

     1,250        1,497,325   

San Pablo Joint Powers Financing Authority California, Tax Allocation Bonds, Refunding, CAB (NPFGC) (a):

    

6.02%, 12/01/24

     2,635        1,287,092   

6.13%, 12/01/25

     2,355        1,069,076   

6.21%, 12/01/26

     2,355        995,270   

State of California, GO, Refunding, Tax Exempt, Refunding Various Purpose, 5.00%, 9/01/41

     3,365        3,715,902   

University of California, Refunding RB, Limited Project, Series G, 5.00%, 5/15/37

     1,000        1,165,730   

Ventura County Community College District, GO, Election of 2002, Series C, 5.50%, 8/01/33

     1,850        2,195,376   
    

 

 

 
               37,018,502   

Colorado — 1.7%

    

City & County of Denver Colorado, Refunding RB, Aviation Airport System Revenue, Series B, 5.00%, 11/15/37

     910        1,033,778   

Colorado Health Facilities Authority, RB, Hospital, NCMC, Inc. Project, Series B (AGM), 6.00%, 5/15/26

     1,900        2,265,978   
    

 

 

 
               3,299,756   

District of Columbia — 1.2%

    

District of Columbia Water & Sewer Authority, Refunding RB, Series A, 5.50%, 10/01/39

     2,000        2,333,440   

Florida — 7.7%

    

City of Jacksonville Florida, Refunding RB, Better Jacksonville, Series A, 5.00%, 10/01/30

     1,135        1,312,616   

County of Lee Florida, Refunding ARB, Series A, AMT, 5.38%, 10/01/32

     1,500        1,657,920   

County of Miami-Dade Florida, Refunding RB, Special Obligation, Series B, 5.00%, 10/01/31 (b)

     795        895,591   
Municipal Bonds   

Par  

(000)

    Value  
    

Florida (concluded)

    

Jacksonville Florida Port Authority, Refunding RB, AMT, 5.00%, 11/01/38

   $ 1,265      $ 1,367,339   

Orange County School Board, COP, Series A (AGC),
5.50%, 8/01/34

     4,645        5,374,172   

Tohopekaliga Water Authority, Refunding RB, Series A, 5.25%, 10/01/36

     3,995        4,639,314   
    

 

 

 
               15,246,952   

Illinois — 19.4%

    

Chicago Board of Education Illinois, GO, Series A:

    

5.00%, 12/01/42

     2,835        3,080,511   

5.50%, 12/01/39

     2,000        2,341,140   

Chicago Transit Authority, RB:

    

Federal Transit Administration Section 5309, Series A (AGC), 6.00%, 6/01/26

     2,000        2,352,400   

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

     635        728,796   

Sales Tax Receipt, 5.25%, 12/01/40

     1,810        2,074,314   

City of Chicago IL Waterworks Revenue, Refunding RB, Second Lien, 5.00%, 11/01/42

     1,425        1,619,512   

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

    

Series A, 5.75%, 1/01/39

     1,145        1,351,524   

Series A (AGM), 5.00%, 1/01/33

     8,000        8,640,800   

Series C, 6.50%, 1/01/41

     5,225        6,485,009   

City of Chicago Illinois, Refunding GARB, O’Hare International Airport, Third Lien, Series C (AGC), 5.25%, 1/01/35

     1,000        1,123,500   

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

     795        920,133   

Cook County Forest Preserve District, GO:

    

Refunding, Limited Tax Project, Series B,
5.00%, 12/15/32

     270        310,692   

Series C, 5.00%, 12/15/32

     580        667,412   

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Project, Series B, 5.00%, 12/15/28

     2,045        2,401,382   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     1,405        1,640,871   

6.00%, 6/01/28

     400        474,880   

State of Illinois, RB, Build Illinois,
Series B, 5.25%, 6/15/28

     2,000        2,323,100   
    

 

 

 
               38,535,976   

Indiana — 2.6%

    

Indianapolis Local Public Improvement Bond Bank, RB, Series F, 5.25%, 2/01/36

     3,055        3,541,814   

Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project, Series A (AGC), 5.50%, 1/01/38

     1,430        1,624,666   
    

 

 

 
               5,166,480   

Kansas — 1.7%

    

Kansas Development Finance Authority, Refunding RB, Adventist Health, 5.00%, 11/15/32

     3,000        3,472,920   

Massachusetts — 1.6%

    

Massachusetts Development Finance Agency, RB, Wellesley College, Series J, 5.00%, 7/01/42

     675        789,379   

Massachusetts HFA, RB, Rental Mortgage, Series C, AMT (AGM), 5.50%, 7/01/32

     2,440        2,440,000   
    

 

 

 
               3,229,379   

Michigan — 4.7%

    

City of Detroit Michigan, Refunding RB, Senior Lien, Series C-1 (AGM), 7.00%, 7/01/27

     4,810        5,889,556   

City of Detroit Michigan Sewage Disposal System, RB, Senior Lien, Series B (AGM), 7.50%, 7/01/33

     750        940,650   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    37


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Michigan (concluded)

    

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital,
8.25%, 9/01/39

   $ 1,910      $ 2,462,945   
    

 

 

 
               9,293,151   

Minnesota — 0.8%

    

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

     1,325        1,636,454   

Mississippi — 1.7%

    

Mississippi Development Bank, Refunding RB, Series A (AGM), 5.00%, 9/01/30

     2,940        3,429,216   

Nevada — 3.6%

    

Clark County Water Reclamation District, GO, Series A, 5.25%, 7/01/34

     1,500        1,834,185   

County of Clark Nevada, ARB:

    

Las Vegas-McCarran International Airport, Series A (AGC), 5.25%, 7/01/39

     3,410        3,842,729   

Subordinate Lien, Series A-2 (NPFGC),
5.00%, 7/01/36

     1,410        1,483,969   
    

 

 

 
               7,160,883   

New Jersey — 8.4%

    

New Jersey EDA, RB, Motor Vehicle Surcharge, Series A (NPFGC), 5.25%, 7/01/33

     3,575        3,807,017   

New Jersey Health Care Facilities Financing Authority, RB, Virtua Health (AGC), 5.50%, 7/01/38

     2,100        2,343,726   

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

    

Series A, 5.50%, 6/15/41

     1,780        2,081,906   

Series A (AGC), 5.63%, 12/15/28

     3,170        3,816,807   

Series B, 5.25%, 6/15/36

     1,000        1,155,810   

South Jersey Transportation Authority, Refunding RB, Transportation System, Series A:

    

5.00%, 11/01/27

     2,000        2,323,360   

5.00%, 11/01/28

     1,000        1,155,780   
    

 

 

 
               16,684,406   

New York — 8.0%

    

Hudson New York Yards Infrastructure Corp., RB, Series A, 5.75%, 2/15/47

     2,510        2,963,507   

New York City Municipal Water Finance Authority, Refunding RB:

    

Fiscal 2009, Series EE, 5.25%, 6/15/40

     3,410        3,967,194   

Water & Sewer System, Second General Resolution Series EE, 5.38%, 6/15/43

     1,305        1,542,366   

New York State Dormitory Authority, RB, Series B:

    

5.00%, 3/15/37

     3,350        3,867,106   

5.00%, 3/15/42

     2,000        2,296,440   

New York State Thruway Authority, Refunding RB, Series I, 5.00%, 1/01/37

     1,050        1,196,402   
    

 

 

 
               15,833,015   

North Carolina — 1.2%

    

North Carolina Medical Care Commission, RB, Duke University Health System, Series A, 5.00%, 6/01/32

     2,045        2,385,268   

Pennsylvania — 0.7%

    

Philadelphia Hospitals & Higher Education Facilities Authority, Refunding RB, The Children’s Hospital of Philadelphia Project, Series D, 5.00%, 7/01/32

     1,215        1,415,317   

Puerto Rico — 1.2%

    

Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A, 6.38%, 8/01/39

     2,115        2,444,602   

South Carolina — 0.8%

    

City of North Charleston South Carolina, RB, Public Facilities Corp., 5.00%, 6/01/35

     1,365        1,548,279   
Municipal Bonds   

Par  

(000)

    Value  
    

Texas — 23.3%

    

Austin Community College District, RB, Educational Facilities Project, Round Rock Campus,
5.25%, 8/01/33

   $ 2,500      $ 2,864,300   

City of Houston Texas, Refunding RB, Combined First Lien, Series A (AGC), 6.00%, 11/15/35

     4,000        4,926,440   

Dallas Area Rapid Transit, Refunding RB, Senior Lien, 5.25%, 12/01/38

     2,600        3,020,498   

Harris County Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/35

     600        752,958   

Katy ISD Texas, GO, Refunding, Unlimited Tax School Building, Series A (PSF-GTD), 5.00%, 2/15/42

     1,135        1,328,835   

Lamar Texas Consolidated ISD, GO, Refunding, Series A, 5.00%, 2/15/45

     1,520        1,767,471   

North Texas Tollway Authority, RB, Special Projects System, Series A, 5.50%, 9/01/41

     4,250        5,061,665   

North Texas Tollway Authority, Refunding RB, First Tier System (NPFGC):

    

5.75%, 1/01/40

     4,885        5,483,510   

Series A, 5.63%, 1/01/33

     6,585        7,346,226   

Series B, 5.75%, 1/01/40

     6,275        7,043,813   

Texas State Turnpike Authority, RB, First Tier, Series A (AMBAC), 5.00%, 8/15/42

     1,500        1,509,795   

Texas Tech University, Refunding RB, Improvement Bonds Fourteenth, Series A, 5.00%, 8/15/31

     1,765        2,083,689   

University of Texas System, Refunding RB, Series B, 5.00%, 8/15/43

     2,755        3,255,170   
    

 

 

 
               46,444,370   

Virginia — 2.5%

    

Fairfax County IDA, RB, Series A, 5.00%, 5/15/40

     1,045        1,174,789   

Virginia Public School Authority, RB, School Financing, 6.50%, 12/01/35

     1,300        1,614,249   

Virginia Resources Authority, RB, 5.00%, 11/01/42

     1,870        2,184,010   
    

 

 

 
               4,973,048   

Washington — 1.4%

    

City of Seattle Washington, Refunding RB, Series A, 5.25%, 2/01/36

     1,375        1,608,310   

State of Washington, GO, Various Purpose, Series B, 5.25%, 2/01/36

     1,075        1,266,038   
    

 

 

 
               2,874,348   

Wisconsin — 1.3%

    

Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Alliance, Series D,
5.00%, 11/15/41

     1,880        2,098,418   

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health, Series A, 5.00%, 4/01/42

     475        530,034   
    

 

 

 
               2,628,452   
Total Municipal Bonds — 116.4%              231,591,639   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
 

Alabama — 1.1%

    

Mobile Board of Water & Sewer Commissioners, RB (NPFGC), 5.00%, 1/01/31

     2,120        2,248,408   

California — 1.8%

    

Sequoia Union High School District California, GO, Refunding, Election of 2004, Series B (AGM),
5.50%, 7/01/35

     3,149        3,558,084   

Colorado — 3.0%

    

Colorado Health Facilities Authority, RB, Catholic Health, Series C-3 (AGM), 5.10%, 10/01/41

     5,610        6,008,759   
 

 

See Notes to Financial Statements.

 

                
38    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  
    

District of Columbia — 0.6%

    

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

   $ 1,040      $ 1,268,918   

Florida — 7.8%

    

City of St. Petersburg Florida, Refunding RB (NPFGC), 5.00%, 10/01/35

     4,302        4,684,777   

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1, 6.00%, 7/01/38

     7,500        8,900,475   

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

     1,000        1,128,200   

Lee County Housing Finance Authority, RB, Multi-County Program, Series A-2, AMT (Ginnie Mae),
6.00%, 9/01/40

     720        765,367   
    

 

 

 
               15,478,819   

Georgia — 2.2%

    

Augusta-Richmond County Georgia, RB, Water & Sewer (AGM), 5.25%, 10/01/34

     4,000        4,291,360   

Illinois — 1.5%

    

City of Chicago Illinois, Refunding RB, Second Lien (AGM), 5.25%, 11/01/33

     2,509        2,910,269   

Kentucky — 0.8%

    

Kentucky State Property & Building Commission, Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/27

     1,406        1,632,084   

Massachusetts — 6.2%

    

Massachusetts School Building Authority, RB:

    

Senior, Series B, 5.00%, 10/15/41

     3,060        3,555,720   

Series A (AGM), 5.00%, 8/15/15 (e)

     1,032        1,140,815   

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

     6,976        7,711,877   
    

 

 

 
               12,408,412   

Nevada — 5.4%

    

Clark County Water Reclamation District, GO:

    

Limited Tax, 6.00%, 7/01/38

     5,000        6,138,450   

Series B, 5.50%, 7/01/29

     3,749        4,624,666   
    

 

 

 
               10,763,116   

New Jersey — 1.3%

    

New Jersey State Housing & Mortgage Finance Agency, RB, S/F Housing, Series CC, 5.25%, 10/01/29

     2,291        2,537,139   

New York — 10.4%

    

New York City Municipal Water Finance Authority, Refunding RB, Series FF, 5.00%, 6/15/45

     2,379        2,720,845   

New York City Transitional Finance Authority, RB:

    

5.00%, 2/01/42

     1,760        2,028,168   

Building Aid Revenue, Fiscal 2009, Series S-3, 5.25%, 1/15/39

     1,400        1,580,145   

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

     4,530        5,209,112   

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

     2,660        3,136,113   

New York State Dormitory Authority, RB, General Purpose, Series C, 5.00%, 3/15/41

     5,325        6,091,161   
    

 

 

 
               20,765,544   

Puerto Rico — 1.0%

    

Puerto Rico Sales Tax Financing Corp., Refunding RB, Series C, 5.25%, 8/01/40

     1,820        1,997,759   

Texas — 1.9%

    

Waco Educational Finance Corp., Refunding RB, Baylor University, 5.00%, 3/01/43

     3,255        3,735,698   

Utah — 0.6%

    

City of Riverton Utah Hospital, RB, IHC Health Services Inc., 5.00%, 8/15/41

     1,005        1,101,430   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  
    

Washington — 3.9%

    

City of Bellevue Washington, GO, Refunding (NPFGC), 5.50%, 12/01/14 (e)

   $ 4,002      $ 4,428,757   

University of Washington, Refunding RB, Series A,
5.00%, 7/01/41

     2,819        3,294,615   
    

 

 

 
               7,723,372   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 49.5%
        98,429,171   

Total Long-Term Investments

(Cost — $299,996,593) — 165.9%

  

  

    330,020,810   
    
   
Short-Term Securities    Shares         

Money Market Fund — 0.0%

    

FFI Institutional Tax-Exempt Fund, 0.04% (f)(g)

     67,427        67,427   
     

Par  

(000)

        

Connecticut — 2.0%

    

Connecticut Housing Finance Authority, Refunding RB, VRDN, Housing Mortgage Finance Program, Sub-Series A-2 (JPMorgan Chase Bank NA SBPA),
0.23%, 11/01/12 (h)

   $ 4,020        4,020,000   

Total Short-Term Securities

(Cost — $4,087,427) — 2.0%

             4,087,427   
Total Investments (Cost — $304,084,020) — 167.9%        334,108,237   
Other Assets Less Liabilities — 1.1%        2,126,996   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (25.3)%

   

    (50,280,678
VMTP Shares, at Liquidation Value — (43.7)%        (87,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 198,954,555   
    

 

 

 
                  

 

(a)   Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

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

 

Counterparty    Value      Unrealized
Appreciation
 
Citigroup Inc.    $ 895,591       $ 3,013   

 

(c)   Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 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 agreements is $520,170.

 

(e)   US 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)   Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2012, for purposes of Section 2(a)(3) of the 1940 Act, as amended, were as follows:

 

Affiliate    Shares
Held at
April 30,
2012
     Net
Activity
     Shares
Held at
October 31,
2012
     Income  

FFI Institutional Tax-Exempt Fund

     22,670         44,757         67,427       $ 9   

 

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

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    39


Table of Contents

Schedule of Investments (concluded)

  

BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

 

(h)   Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

 

Ÿ  

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

 

Ÿ  

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and 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)

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 level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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 is based on the pricing transparency of the investment 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 and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy as of October 31, 2012:

 

     Level 1      Level 2      Level 3      Total  

Assets:

          
Investments:           

Long-Term Investments1

          $ 330,020,810               $ 330,020,810   

Short-Term Securities

  $ 67,427         4,020,000                 4,087,427   
 

 

 

    

 

 

    

 

 

    

 

 

 

Total

  $ 67,427       $ 334,040,810               $ 334,108,237   
 

 

 

    

 

 

    

 

 

    

 

 

 

 

1   

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

Certain of the Fund’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1      Level 2     Level 3      Total  

Liabilities:

         

TOB trust certificates

          $ (50,254,556           $ (50,254,556

VMTP Shares

            (87,000,000             (87,000,000
 

 

 

   

 

 

    

 

 

 

Total

          $ (137,254,556           $ (137,254,556
 

 

 

   

 

 

    

 

 

 

There were no transfers between levels during the six month ended October 31, 2012.

 

See Notes to Financial Statements.

 

                
40    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments October 31, 2012 (Unaudited)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Alabama — 2.7%

    

Birmingham Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/34

   $ 4,615      $ 5,507,079   

County of Jefferson Alabama, RB, Series A:

    

5.50%, 1/01/21

     5,500        5,496,315   

5.25%, 1/01/23

     6,500        6,492,915   
    

 

 

 
               17,496,309   

Arizona — 5.0%

    

Arizona Health Facilities Authority, Refunding RB, Phoenix Children’s Hospital, Series A, 5.00%, 2/01/30

     2,685        2,916,689   

City of Tucson Arizona, COP (AGC):

    

4.25%, 7/01/21

     1,870        2,069,809   

4.25%, 7/01/22

     1,895        2,090,109   

City of Tucson Arizona, COP, Refunding, (AGC), 4.00%, 7/01/20

     2,325        2,623,995   

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

     1,700        1,388,016   

Northern Arizona University, RB, 5.00%, 6/01/41

     1,250        1,382,088   

Phoenix Mesa Gateway Airport Authority, RB, Mesa Project, AMT:

    

5.00%, 7/01/27

     700        771,561   

5.00%, 7/01/32

     1,200        1,295,364   

Pima County IDA, RB:

    

Charter Schools Project, Series C, 6.70%, 7/01/21

     955        956,652   

Charter Schools Project, Series K, 6.38%, 7/01/31

     930        932,725   

Pima County IDA, Refunding RB, Tucson Electric Power Co., San Juan, Series A, 4.95%, 10/01/20

     2,325        2,652,871   

Pinal County Electric District No. 3, Refunding RB, 5.00%, 7/01/25

     1,600        1,831,408   

Salt River Project Agricultural Improvement & Power District, RB, Series A, 5.00%, 1/01/25

     4,000        4,693,440   

Scottsdale IDA, Refunding RB, Scottsdale Healthcare, Series C (AGM), 5.00%, 9/01/35

     2,550        2,828,409   

State of Arizona, COP, Department of Administration, Series A (AGM), 4.25%, 10/01/23

     1,000        1,093,550   

University of Arizona, RB, Speed, 5.00%, 8/01/28

     2,000        2,380,300   
    

 

 

 
               31,906,986   

Arkansas — 0.2%

    

University of Arkansas, GO, Refunding RB, Various Facility, Series A, 5.00%, 11/01/31

     1,000        1,206,290   

California — 5.9%

    

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 5.00%, 8/15/22

     2,135        2,523,228   

California HFA, RB, Home Mortgage, Series K, AMT, 4.55%, 8/01/21

     780        788,362   

California HFA, Refunding RB, Home Mortgage, Series M, AMT, 4.55%, 8/01/21

     3,685        3,724,503   

California Pollution Control Financing Authority, RB, AMT:

    

Republic Services Inc. Project, Series B, Mandatory Put Bonds, 5.25%, 6/01/23

     605        689,367   

Waste Management Inc. Project, Series A-2, 5.40%, 4/01/25

     1,240        1,337,303   

California Pollution Control Financing Authority, Refunding RB, Pacific Gas, Series C, AMT (NPFGC), 4.75%, 12/01/23

     5,000        5,460,400   

City of Sacramento California, Special Tax Bonds, North Natomas Community Facilities, Series 4-C, 6.00%, 9/01/28

     2,990        3,066,454   

City of San Jose California, Refunding ARB, Series A-1, AMT, 5.00%, 3/01/25

     2,000        2,245,120   
Municipal Bonds   

Par  

(000)

    Value  
    

California (concluded)

    

State of California, GO:

    

5.50%, 4/01/28

   $ 15      $ 15,871   

Various Purpose, 5.75%, 4/01/31

     7,000        8,295,280   

Various Purpose, 5.00%, 11/01/32

     2,000        2,238,220   

University of California, Refunding RB, Limited Project, Series G, 5.00%, 5/15/37

     6,440        7,507,301   
    

 

 

 
               37,891,409   

Colorado — 1.0%

    

Plaza Metropolitan District No. 1 Colorado, Tax Allocation Bonds, Public Improvement Fee, Tax Increment, 7.50%, 12/01/15

     6,000        6,214,860   

Connecticut — 2.2%

    

Connecticut State Development Authority, RB, Learjet Inc. Project, AMT, 7.95%, 4/01/26

     1,160        1,246,954   

Connecticut State Health & Educational Facility Authority, Refunding RB:

    

Connecticut College, Series I, 5.00%, 7/01/29

     1,075        1,262,093   

Connecticut College, Series I, 5.00%, 7/01/31

     620        724,495   

Connecticut College, Series I, 5.00%, 7/01/32

     500        580,620   

Lawrence & Memorial Hospital, Series F, 5.00%, 7/01/31

     1,780        1,968,217   

State of Connecticut, GO, Series B, 5.00%, 4/15/31

     6,990        8,342,984   
    

 

 

 
               14,125,363   

Delaware — 0.9%

    

Delaware State Municipal Electric Corp., Refunding RB, 5.00%, 7/01/37

     5,000        5,576,050   

Florida — 8.2%

    

Broward County Florida Airport System, RB, AMT, 5.00%, 10/01/32

     1,250        1,382,738   

Broward County School Board Florida, Refunding COP, Series A (AGM), (AGM), 5.00%, 7/01/24

     10,000        11,573,900   

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

    

5.50%, 10/01/23

     1,000        1,157,100   

(AGM), 5.00%, 10/01/27

     1,635        1,809,307   

County of Miami-Dade Florida, Refunding RB, Series C (BHAC), 5.00%, 10/01/23

     8,000        9,174,000   

County of Miami-Dade Florida Transit System, RB, Sales Tax:

    

5.00%, 7/01/32

     1,500        1,726,950   

5.00%, 7/01/33

     3,000        3,432,390   

Greater Orlando Aviation Authority Airport Facilities, Refunding RB, Series B, AMT:

    

5.00%, 10/01/25

     1,000        1,131,810   

5.00%, 10/01/26

     2,935        3,303,137   

Highlands County Health Facilities Authority, Refunding RB, Adventist Health, Series G, 5.13%, 11/15/32 (e)

     35        41,291   

JEA Electric System, Refunding RB, Sub-Series B, 5.00%, 10/01/34

     4,615        5,281,821   

Midtown Miami Community Development District, Special Assessment Bonds:

    

Series A, 6.00%, 5/01/24

     2,880        2,929,853   

Series B, 6.50%, 5/01/37

     1,870        1,915,759   

Portofino Shores Community Development District, Special Assessment Bonds, Series A, 6.40%, 5/01/34

     1,080        1,094,591   

South Lake County Hospital District, RB, South Lake Hospital Inc., 6.63%, 10/01/23

     2,390        2,488,348   

Sterling Hill Community Development District, Refunding RB, Special Assessment Bonds Series B, 5.50%, 11/01/10 (f)(g)

     155        108,519   

University of Florida Research Foundation Inc., RB (AMBAC), 5.13%, 9/01/33

     4,000        4,001,560   
    

 

 

 
               52,553,074   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    41


Table of Contents

Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Georgia — 1.1%

    

Fulton County Development Authority, Refunding RB, Robert Woodruff, Series B, 5.25%, 3/15/24

   $ 3,000      $ 3,408,090   

Medical Center Hospital Authority, Refunding RB, Columbus Regional Healthcare (AGM):

    

4.00%, 8/01/23

     1,500        1,609,335   

4.13%, 8/01/24

     2,000        2,141,740   
    

 

 

 
               7,159,165   

Guam — 0.4%

    

Territory of Guam, RB, Section 30, Series A, 5.38%, 12/01/24

     2,100        2,305,002   

Hawaii — 0.9%

    

State of Hawaii, Refunding ARB, Series A, 5.25%, 7/01/29

     5,000        5,813,500   

Idaho — 0.6%

    

Idaho Health Facilities Authority, Refunding RB, St. Luke’s Regional Medical Center (AGM), 4.63%, 7/01/30

     3,700        4,029,559   

Illinois — 6.1%

    

Chicago Transit Authority, RB, 5.25%, 12/01/31

     2,000        2,343,280   

City of Chicago Illinois, GARB, O’Hare International Airport, Third Lien, Series B-2, AMT (AGM), 5.75%, 1/01/23

     8,130        8,589,426   

Madison, Macoupin, Etc. Counties Community College District No. 536, GO, Refunding, Lewis & Clark Community College:

    

5.00%, 5/01/29

     350        394,279   

5.00%, 5/01/30

     475        532,732   

5.00%, 5/01/31

     500        559,590   

5.00%, 5/01/32

     500        556,420   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     3,500        4,087,580   

6.25%, 6/01/24

     12,750        14,287,267   

Village of Hodgkins Illinois, RB, MBM Project, AMT, 5.90%, 11/01/17

     6,000        6,008,820   

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

     1,480        1,487,592   
    

 

 

 
               38,846,986   

Indiana — 4.0%

    

City of Whiting Indiana, RB, BP Products North America, 5.25%, 1/01/21

     4,800        5,904,864   

County of Jasper Indiana, Refunding RB, Northern Indiana Public Service Co., Series C (NPFGC), 5.85%, 4/01/19

     2,000        2,368,280   

Indiana Finance Authority, Refunding RB, Environmental Improvement, United Steel Corp. Project, 6.00%, 12/01/19

     5,000        5,575,450   

Indiana Finance Authority Wastewater Utility, RB, 5.25%, 10/01/31

     10,000        11,740,100   
    

 

 

 
               25,588,694   

Iowa — 1.0%

    

Iowa Higher Education Loan Authority, RB, Private College Facility:

    

5.25%, 4/01/23

     695        828,781   

5.25%, 4/01/24

     730        860,269   

5.25%, 4/01/25

     520        609,081   

5.25%, 4/01/26

     360        419,411   

Iowa Higher Education Loan Authority, Refunding RB, Private College Facility:

    

5.00%, 9/01/20

     1,000        1,140,160   

5.00%, 9/01/22

     2,315        2,569,418   
    

 

 

 
               6,427,120   
Municipal Bonds   

Par  

(000)

    Value  
    

Kansas — 2.1%

    

Kansas Development Finance Authority, RB, KU Health System, Series H:

    

5.00%, 3/01/26

   $ 3,220      $ 3,556,168   

5.00%, 3/01/27

     3,905        4,301,592   

Kansas Development Finance Authority, Refunding RB:

    

Adventist Health, 5.00%, 11/15/23

     1,500        1,728,900   

Sisters of Leavenworth, Series A, 4.00%, 1/01/22

     3,425        3,762,431   
    

 

 

 
               13,349,091   

Kentucky — 3.0%

    

Kentucky Economic Development Finance Authority, RB, Owensboro Medical Health System, Series A, 5.25%, 6/01/23

     8,650        9,723,378   

Kentucky State Property & Buildings Commission, Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/24

     8,000        9,404,880   
    

 

 

 
               19,128,258   

Louisiana — 3.5%

    

Jefferson Parish Hospital Service District No. 1, Refunding RB, West Jefferson Medical Center, Series A, (AGM), 5.50%, 1/01/26

     3,000        3,411,420   

Louisiana Local Government Environmental Facilities & Community Development Authority, Refunding RB, BRCC Facilities Corp. Project:

    

5.00%, 12/01/27

     3,445        4,046,049   

5.00%, 12/01/28

     3,715        4,346,922   

Louisiana Public Facilities Authority, RB, Nineteenth Judicial District Court (NPFGC), 5.50%, 6/01/41

     2,000        2,180,340   

Louisiana Public Facilities Authority, Refunding RB, Entergy Gulf States Louisiana, LLC Project, Series A, 5.00%, 9/01/28

     2,000        2,138,720   

New Orleans Aviation Board Louisiana, Refunding GARB, Restructuring, Series A-2, 6.00%, 1/01/23

     850        1,015,249   

Parish of Saint Charles Louisiana Gulf Opportunity Zone, RB, Valero Energy Corp. Project, 4.00%, 12/01/40 (a)

     1,760        1,931,758   

Port of New Orleans Louisiana, Refunding RB, Continental Grain Co. Project, 6.50%, 1/01/17

     3,500        3,507,665   
    

 

 

 
               22,578,123   

Maine — 0.3%

    

Portland New Public Housing Authority Maine, Refunding RB, Senior Living, Series A, 6.00%, 2/01/34

     1,965        2,028,686   

Maryland — 0.7%

    

Maryland EDC, RB, Transportation Facilities Project, Series A, 5.13%, 6/01/20

     1,750        2,015,895   

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

     790        860,515   

Maryland Health & Higher Educational Facilities Authority, RB, Johns Hopkins Health System, Series B, 5.00%, 7/01/33

     1,140        1,341,564   

Maryland Industrial Development Financing Authority, RB, Our Lady of Good Counsel School, Series A, 6.00%, 5/01/35

     500        523,810   
    

 

 

 
               4,741,784   

Massachusetts — 0.2%

    

Massachusetts Health & Educational Facilities Authority, Refunding RB, Winchester Hospital, 5.00%, 7/01/25

     1,060        1,163,074   

Michigan — 4.0%

    

City of Detroit Michigan, Refunding RB, Second Lien, Series C (BHAC), 5.75%, 7/01/26

     4,235        4,876,899   
 

 

See Notes to Financial Statements.

 

                
42    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Michigan (concluded)

    

Manistee Area Public Schools, GO, Refunding (Q-SBLF), 5.00%, 5/01/25

   $ 1,000      $ 1,140,230   

Michigan State Building Authority, Refunding RB, Facilities Program, Series A, 5.00%, 10/15/24

     2,500        2,978,450   

Michigan State Hospital Finance Authority, Refunding RB, Henry Ford Health, 5.25%, 11/15/24

     4,900        5,633,383   

State of Michigan Trunk Line, RB, Fund, 5.00%, 11/15/31

     2,000        2,357,960   

Wayne County Airport Authority, RB, Detroit Metropolitan Wayne County Airport, AMT (AGC), 4.75%, 12/01/18

     7,665        8,270,382   
    

 

 

 
               25,257,304   

Minnesota — 0.9%

    

City of St. Cloud Minnesota, Refunding RB, Centracare Health System, Series A, 4.25%, 5/01/21

     2,300        2,587,684   

Minneapolis-St Paul Metropolitan Airports Commission, Refunding RB, Series B (b):

    

5.00%, 1/01/30

     1,000        1,156,610   

5.00%, 1/01/31

     750        864,855   

University of Minnesota, RB, Biomedical Science Research Facilities Funding Program, Series B, 5.00%, 8/01/36

     1,000        1,169,640   
    

 

 

 
               5,778,789   

Mississippi — 0.8%

    

Mississippi Business Finance Corp., Refunding RB, System Energy Resource Inc. Project, 5.88%, 4/01/22

     5,000        5,014,850   

Missouri — 2.6%

    

Missouri Development Finance Board, RB, St. Joseph Sewage System Improvements, Series E, 4.75%, 5/01/26

     750        791,445   

Missouri Joint Municipal Electric Utility Commission Power, RB, Prairie State Project, Series A (BHAC), 5.00%, 1/01/32

     5,000        5,650,150   

Missouri State Environmental Improvement & Energy Resources Authority, Refunding RB, Revolving Funds Program, Series A, 5.00%, 1/01/25

     3,150        3,922,884   

Missouri State Health & Educational Facilities Authority, Refunding RB, SSM Health Care, Series B, 4.25%, 6/01/25

     5,975        6,511,973   
    

 

 

 
               16,876,452   

Montana — 0.5%

    

Montana Facility Finance Authority, Refunding RB, Series B, 5.00%, 1/01/24

     2,625        3,001,215   

Nebraska — 0.8%

    

Douglas County School District No. 17 Nebraska, GO, Refunding, 2.00%, 6/15/25

     4,380        4,253,812   

Lancaster County Hospital Authority No. 1, Refunding RB, Immanuel Obligation Group, 5.50%, 1/01/30

     1,000        1,135,930   
    

 

 

 
               5,389,742   

Nevada — 0.7%

    

County of Humboldt Nevada, Refunding RB, Idaho Power Co. Project, 5.15%, 12/01/24

     3,800        4,270,858   

New Hampshire — 0.6%

    

New Hampshire State Turnpike System, RB, Series C, 4.00%, 8/01/30

     3,765        4,044,815   

New Jersey — 15.5%

    

Essex County Improvement Authority, RB, Newark Project, Series A (AGM), 5.00%, 11/01/20

     2,000        2,326,340   

Garden State Preservation Trust, RB, Election of 2005, Series A (AGM) (e):

    

5.80%, 11/01/21

     3,635        4,213,837   

5.80%, 11/01/23

     5,050        5,854,162   
Municipal Bonds   

Par  

(000)

    Value  
    

New Jersey (concluded)

    

New Jersey EDA, RB:

    

Continental Airlines Inc. Project, AMT, 6.40%, 9/15/23

   $ 6,040      $ 6,150,592   

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

     10,000        10,649,000   

New Jersey EDA, Refunding RB:

    

New Jersey American Water Co., Series E, AMT, 4.70%, 12/01/25

     3,000        3,295,350   

School Facilities Construction, Series AA, 4.25%, 12/15/24

     3,850        4,217,329   

School Facilities Construction, Series EE, 5.00%, 9/01/23

     3,465        4,134,923   

New Jersey Health Care Facilities Financing Authority, Refunding RB, Hackensack University Medical, Series B (AGM), 4.00%, 1/01/24

     635        685,864   

New Jersey Higher Education Assistance Authority, Refunding RB:

    

Series 1, AMT, 5.50%, 12/01/26

     1,665        1,919,812   

Series 1, AMT, 5.00%, 12/01/27

     12,000        12,976,800   

Series 1A, 4.75%, 12/01/21

     2,400        2,695,992   

New Jersey State Housing & Mortgage Finance Agency, RB, S/F Housing, Series X, AMT, 5.10%, 10/01/23

     3,150        3,361,806   

New Jersey State Turnpike Authority, Refunding RB, Series B, 5.00%, 1/01/29

     10,000        11,817,900   

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

    

CAB, Series C (AMBAC), 4.10%, 12/15/25 (c)

     9,450        5,548,945   

Series A, 5.25%, 6/15/24

     3,185        3,847,257   

Series B, 5.50%, 6/15/31

     10,000        12,012,800   

South Jersey Port Corp., RB, Marine Terminal, Series O-1 (AGC), 4.63%, 1/01/23

     1,375        1,559,044   

State of New Jersey, GO, Refunding, 5.25%, 8/01/21

     1,355        1,741,785   
    

 

 

 
               99,009,538   

New York — 19.7%

    

City of New York New York, GO, Series D1, 5.13%, 12/01/26

     4,615        5,448,146   

City of New York New York, GO, Refunding:

    

Series B, 5.00%, 8/01/30

     2,210        2,640,994   

Series E, 5.00%, 8/01/27

     3,500        4,198,950   

Essex County Industrial Development Agency, Refunding RB, International Paper, Series A, AMT, 5.20%, 12/01/23

     6,300        6,508,341   

Hudson New York Yards Infrastructure Corp., RB, 5.75%, 2/15/47

     4,250        5,017,890   

Long Island Power Authority, Refunding RB, Series A, 5.50%, 4/01/24

     1,475        1,773,584   

Metropolitan Transportation Authority, RB:

    

Sub-Series B-1, 5.00%, 11/15/24

     2,300        2,822,077   

Sub-Series B-4, 5.00%, 11/15/24

     1,500        1,840,485   

Transportation, Series A, 5.00%, 11/15/25

     1,980        2,251,696   

Metropolitan Transportation Authority, Refunding RB:

    

Series B, 5.25%, 11/15/25

     4,000        4,889,480   

Series F, 5.00%, 11/15/30

     1,460        1,701,834   

New York City Industrial Development Agency, RB:

    

Continental Airlines Inc. Project, Mandatory Put Bonds, AMT, 8.38%, 11/01/16

     3,500        3,517,465   

Special Needs Facilities Pooled Program, Series C-1, 6.80%, 7/01/19

     1,770        1,798,833   

New York City Industrial Development Agency, Refunding RB, New York Stock Exchange Project, Series A, 4.25%, 5/01/24

     1,740        1,909,232   

New York City Transitional Finance Authority, RB, Fiscal 2009, Series S-3, 5.00%, 1/15/23

     3,560        4,172,854   

New York City Trust for Cultural Resources, Refunding RB, Carnegie Hall, Series A, 5.00%, 12/01/29

     2,750        3,151,418   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    43


Table of Contents

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 (concluded)

    

New York Liberty Development Corp., Refunding RB, Second Priority, Bank of America Tower at One Bryant Park Project, 5.63%, 7/15/47

   $ 3,000      $ 3,386,430   

New York State Dormitory Authority, LRB, Municipal Health Facilities, Sub-Series 2-4, 5.00%, 1/15/27

     6,900        7,665,624   

New York State Dormitory Authority, RB:

    

Education, Series D, 5.00%, 3/15/31

     4,500        5,091,885   

Fordham University, Series A, 5.25%, 7/01/25

     900        1,081,269   

Mental Health Services Facilities Improvement, Series A (AGM), 5.00%, 2/15/22

     4,000        4,647,440   

Mount Sinai School of Medicine, Series A (NPFGC), 5.15%, 7/01/24

     1,000        1,164,490   

North Shore-Long Island Jewish Health System, Series A, 5.50%, 5/01/30

     1,495        1,711,386   

North Shore-Long Island Jewish Health System, Series D, 5.00%, 5/01/39

     1,600        1,784,336   

NYU Hospital Center, Series A, 5.00%, 7/01/22

     1,725        1,974,297   

NYU Hospital Center, Series A, 5.13%, 7/01/23

     1,670        1,908,309   

School Districts Financing Program, Series C, 5.00%, 10/01/24

     3,165        3,822,086   

New York State Dormitory Authority, Refunding RB:

    

Mount Sinai Hospital, Series A, 4.25%, 7/01/23

     2,225        2,426,919   

North Shore-Long Island Jewish Health System, Series E, 5.00%, 5/01/22

     650        744,153   

North Shore-Long Island Jewish Health System, Series E, 5.00%, 5/01/23

     2,160        2,452,097   

Yeshiva University, 4.00%, 9/01/23

     2,860        3,140,423   

Yeshiva University, 4.25%, 9/01/24

     2,750        3,041,995   

Port Authority of New York & New Jersey, RB, JFK International Air Terminal, 5.00%, 12/01/20

     2,475        2,856,719   

Port Authority of New York & New Jersey, Refunding RB:

    

Consolidated, 152nd Series, AMT, 5.00%, 11/01/23

     1,000        1,127,810   

Consolidated, 153rd Series, 5.00%, 7/15/24

     2,010        2,307,038   

Sales Tax Asset Receivable Corp, Refunding RB, Series A (AMBAC), 5.25%, 10/15/27

     9,850        10,697,001   

United Nations Development Corp. New York, Refunding RB, Series A, 4.25%, 7/01/24

     2,985        3,282,694   

Westchester County New York Health Care Corp., Refunding RB, Senior Lien, Series A, 5.00%, 11/01/24

     5,470        6,187,445   
    

 

 

 
               126,145,125   

North Carolina — 1.9%

    

City of Charlotte North Carolina, RB, Charlotte Douglas Airport, Series A, 5.00%, 7/01/33

     4,000        4,580,120   

Gaston County Industrial Facilities & Pollution Control Financing Authority North Carolina, RB, Exempt Facilities, National Gypsum Co. Project, AMT, 5.75%, 8/01/35

     2,105        1,925,528   

North Carolina Capital Facilities Finance Agency, RB, Solid Waste Disposal, Duke Energy Carolinas Project, Series B, 4.38%, 10/01/31

     2,000        2,174,820   

North Carolina Medical Care Commission, Refunding RB:

    

Vidant Health, Series A, 5.00%, 6/01/36

     1,500        1,657,365   

WakeMed, Series A, 5.00%, 10/01/31

     1,500        1,734,735   
    

 

 

 
               12,072,568   

Ohio — 0.5%

    

City of Cincinnati Ohio, Refunding GO, Various Purpose, Series A, 4.38%, 12/01/30

     900        976,032   

Kent State University, RB, General Receipts, Series A, 5.00%, 5/01/37

     1,000        1,131,570   

Miami University, RB, General Receipts, 4.00%, 9/01/33 (b)

     1,000        1,061,790   
    

 

 

 
               3,169,392   
Municipal Bonds   

Par  

(000)

    Value  
    

Oregon — 1.5%

    

City of Tigard Washington County Oregon, Refunding RB, Water System, 5.00%, 8/01/37

   $ 2,000      $ 2,326,700   

Oregon Health & Science University, Refunding RB, Series A, 5.00%, 7/01/26

     1,500        1,785,435   

Oregon State Facilities Authority, Refunding RB, Reed College Project, Series A, 5.00%, 7/01/29

     1,835        2,165,814   

State of Oregon, GO:

    

Odot Project, Tax-Exempt, Series I, 5.00%, 5/01/37

     1,000        1,179,660   

Series H, 5.00%, 5/01/36

     2,000        2,359,320   
    

 

 

 
               9,816,929   

Pennsylvania — 8.3%

    

City of Philadelphia Pennsylvania, RB, Series A, AMT (AGM), 5.00%, 6/15/20

     2,895        3,217,734   

City of Pittsburgh Pennsylvania, GO, Series C (AGM), 5.25%, 9/01/18

     6,430        7,214,910   

City of Pittsburgh Pennsylvania, GO, Refunding, Series B (AGM), 5.25%, 9/01/17

     9,630        10,868,996   

County of Allegheny Pennsylvania, GO, Series C-67:

    

5.00%, 11/01/25

     2,700        3,128,922   

5.00%, 11/01/26

     2,375        2,702,346   

County of Allegheny Pennsylvania, Refunding GO, Series C-68, 5.00%, 11/01/25

     2,515        2,914,533   

Montgomery County IDA Pennsylvania, MRB, Whitemarsh Continuing Care, 6.00%, 2/01/21

     3,500        3,581,515   

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

     7,710        7,658,189   

Pennsylvania Turnpike Commission, RB, Sub-Series B, 5.25%, 12/01/31

     4,000        4,662,400   

South Fork Municipal Authority, Refunding RB, Conemaugh Valley Memorial, Series A (AGC), 6.00%, 7/01/26

     6,225        7,392,063   
    

 

 

 
               53,341,608   

Puerto Rico — 4.4%

    

Puerto Rico Aqueduct & Sewer Authority, Refunding RB, Senior Lien, Series A (AGC), 5.00%, 7/01/25

     3,215        3,520,489   

Puerto Rico Electric Power Authority, RB, Series TT, 5.00%, 7/01/27

     6,500        6,709,560   

Puerto Rico Highway & Transportation Authority, RB, Series Y (AGM), 6.25%, 7/01/21

     3,000        3,597,300   

Puerto Rico Highway & Transportation Authority, Refunding RB, Series AA-1 (AGM), 4.95%, 7/01/26

     885        956,676   

Puerto Rico Housing Finance Authority, Refunding RB, Subordinate, Capital Fund Modernization, 5.13%, 12/01/27

     9,450        10,290,861   

Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A, 6.00%, 8/01/42

     650        718,907   

Puerto Rico Sales Tax Financing Corp., Refunding RB, Series C, 5.25%, 8/01/40

     2,000        2,195,300   
    

 

 

 
               27,989,093   

Rhode Island — 0.3%

    

Rhode Island Health & Educational Building Corp., RB, Providence College, 5.00%, 11/01/34

     1,750        1,982,943   

South Carolina — 0.2%

    

County of Florence South Carolina, Refunding RB, McLeod Regional Medical Center, Series A, 4.50%, 11/01/25

     1,000        1,097,040   

South Dakota — 0.2%

    

South Dakota Health & Educational Facilities Authority, Refunding RB, Regional Health, 5.00%, 9/01/25

     1,000        1,120,610   
 

 

See Notes to Financial Statements.

 

                
44    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Tennessee — 1.8%

    

Chattanooga-Hamilton County Hospital Authority Tennessee, Refunding RB, Erlanger Health (AGM), 5.00%, 10/01/22

   $ 1,620      $ 1,869,350   

Johnson City Health & Educational Facilities Board, RB, Appalachian Christian Village Project, Series A, 6.00%, 2/15/19

     1,360        1,361,510   

Knox County Health Educational & Housing Facilities Board Tennessee, Refunding RB, Eastowne Village Project, 4.00%, 6/01/31

     3,810        4,174,465   

Memphis-Shelby County Sports Authority Inc., Refunding RB:

    

Memphis Arena Project, Series A, 5.00%, 11/01/23

     2,695        3,102,780   

Memphis Arena Project, Series B, 5.00%, 11/01/22

     1,000        1,162,060   
    

 

 

 
               11,670,165   

Texas — 5.6%

    

City of Houston Texas, Refunding ARB, Subordinate Lien, Series A, AMT:

    

5.00%, 7/01/25

     1,500        1,702,890   

5.00%, 7/01/32

     1,010        1,129,776   

Dallas-Fort Worth International Airport Facilities Improvement Corp., RB, Series 2001-A-1, AMT, 6.15%, 1/01/16

     4,000        4,006,960   

Dallas/Fort Worth International Airport, Refunding RB, AMT:

    

Series E, 5.00%, 11/01/26

     2,185        2,471,366   

Series E, 5.00%, 11/01/27

     4,960        5,593,243   

Series F, 5.00%, 11/01/31

     6,345        7,013,446   

Frisco ISD, GO, Refunding (PSF-GTD), 4.25%, 8/15/28

     4,000        4,539,000   

Love Field Airport Modernization Corp., RB, Southwest Airlines Co. Project, AMT, 5.00%, 11/01/28

     2,000        2,154,960   

San Jacinto River Authority, RB, Special Project, 5.25%, 10/01/25

     2,910        3,360,846   

Socorro ISD, GO, Refunding:

    

5.00%, 8/15/30

     1,000        1,178,230   

5.00%, 8/15/32

     2,500        2,918,575   
    

 

 

 
               36,069,292   

Vermont — 0.3%

    

Vermont Educational & Health Buildings Financing Agency, Refunding RB, Middlebury College Project, 5.00%, 11/01/32

     1,680        2,023,190   

Virginia — 2.9%

    

James City County EDA, Refunding RB, First Mortgage, Williamsburg Lodge, Series A:

    

5.75%, 3/01/17

     3,285        3,304,316   

6.00%, 3/01/23

     1,150        1,155,037   

Roanoke EDA, Refunding RB, Carilion Health System, Series B (AGM), 5.00%, 7/01/38

     3,155        3,470,658   

Tobacco Settlement Financing Corp. Virginia, RB, Asset-Backed, 5.63%, 6/01/37 (e)

     7,800        8,831,940   

Virginia Small Business Financing Authority, RB, Senior Lien, Express Lanes LLC, AMT, 5.00%, 7/01/34

     1,560        1,635,894   
    

 

 

 
               18,397,845   

West Virginia — 2.7%

    

West Virginia Hospital Finance Authority, Refunding RB, Charleston, Series A, 5.13%, 9/01/23

     4,000        4,383,320   

West Virginia University, RB, Board of Governors University Improvement, Series B:

    

5.00%, 10/01/29

     7,520        8,836,752   

5.00%, 10/01/30

     3,500        4,097,765   
    

 

 

 
               17,317,837   

Wisconsin — 2.2%

    

Public Finance Authority, Wisconsin Airport Facilities, Refunding RB, Series B, AMT, 5.25%, 7/01/28

     4,765        5,084,684   
Municipal Bonds   

Par  

(000)

    Value  
    

Wisconsin (concluded)

    

State of Wisconsin, GO, Series C, 4.50%, 5/01/30

   $ 6,120      $ 6,966,641   

Wisconsin Housing & EDA, RB, Series C, AMT, 4.85%, 9/01/26

     2,000        2,083,960   
    

 

 

 
               14,135,285   
Total Municipal Bonds — 128.9%              825,121,868   
    
   

Municipal Bonds Transferred to

Tender Option Bond Trusts (d)

              

California — 3.3%

    

Peralta Community College District, GO, Election of 2000, Series D (AGM), 5.00%, 8/01/30

     10,140        10,640,916   

Sequoia Union High School District California, GO, Refunding, Election of 2004, Series B (AGM), 5.50%, 7/01/35

     9,028        10,199,839   
    

 

 

 
               20,840,755   

Illinois — 3.8%

    

Du Page & Will Counties Community School District No. 204 Indian, GO, School Building, Series A (NPFGC), 5.25%, 12/30/22

     8,650        10,135,022   

McHenry County Conservation District Illinois, GO (AGM), 5.13%, 2/01/27

     12,695        14,315,647   
    

 

 

 
               24,450,669   

Louisiana — 4.0%

    

State of Louisiana, GO, Series A, 5.00%, 8/01/24

     12,000        15,001,320   

State of Louisiana Gas & Fuels, Refunding RB, Series A-1, 4.00%, 5/01/34

     10,000        10,735,700   
    

 

 

 
               25,737,020   

Massachusetts — 3.3%

    

Massachusetts Development Finance Agency, Refunding RB, Partners Healthcare, Series L, 5.00%, 7/01/31

     10,175        11,734,295   

Massachusetts School Building Authority, RB, Series A (AGM):

    

5.00%, 8/15/15

     1,075        1,187,815   

5.00%, 8/15/30

     7,264        8,029,595   
    

 

 

 
               20,951,705   

Minnesota — 1.9%

    

State of Minnesota, GO, State Various Purpose, Series A, 4.00%, 8/01/29

     10,525        12,135,088   

New Jersey — 1.9%

    

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series D (AGM), 5.00%, 6/15/19

     11,120        12,261,357   

New York — 9.8%

    

City of New York New York, GO:

    

Sub-Series B-1, 5.25%, 9/01/22

     8,250        10,098,412   

Sub-Series I-1, 5.50%, 4/01/21

     4,992        6,246,557   

City of New York New York, Refunding GO, Series E, 5.00%, 8/01/24

     3,990        4,867,122   

New York City Municipal Water Finance Authority, Refunding RB, Series A, 4.75%, 6/15/30

     8,000        9,005,600   

New York State Dormitory Authority, Refunding RB, Series A, 5.00%, 7/01/42

     2,240        2,582,944   

New York State Urban Development Corp., RB, State Personal Income Tax, State Facilities, Series A-1 (NPFGC), 5.25%, 3/15/34

     10,000        10,682,200   

New York State Urban Development Corp., Refunding RB, Service Contract, Series B, 5.00%, 1/01/21

     8,003        9,490,000   

Port Authority of New York & New Jersey, RB, Consolidated, 169th Series, AMT, 5.00%, 10/15/26

     5,530        6,416,404   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    45


Table of Contents

Schedule of Investments (concluded)

  

BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to

Tender Option Bond Trusts (d)

  

Par  

(000)

    Value  
    

New York (concluded)

    

Suffolk County Water Authority, Refunding RB, 3.00%, 6/01/25

   $ 3,242      $ 3,362,139   
    

 

 

 
               62,751,378   

Washington — 1.8%

    

Snohomish County School District No. 15—Edmonds Washington, GO, (NPFGC), 5.00%, 12/01/19

     10,000        11,581,900   

Total Municipal Bonds Transferred to

Tender Option Bond Trusts — 29.8%

  

  

    190,709,872   
Total Long-Term Investments
(Cost — $930,382,724) — 158.7%
        1,015,831,740   
    
                  
Short-Term Securities    Shares         

Money Market Funds — 0.0%

    

FFI Institutional Tax-Exempt Fund, 0.04% (i)(j)

     93,623        93,623   
     

Par  

(000)

        

Connecticut — 0.3%

    

Connecticut Housing Finance Authority, Refunding RB, VRDN, Housing Mortgage Finance Program, Sub-Series A-2, 0.23%, 11/01/12 (h)

   $ 1,940        1,940,000   

Massachusetts — 0.7%

    

Massachusetts Health & Educational Facilities Authority, RB, VRDN, Stonehill College, Series K (Bank of America NA LOC), 0.21%, 11/01/12 (h)

     4,320        4,320,000   
Total Short-Term Securities
(Cost — $6,353,623) — 1.0%
             6,353,623   
Total Investments
(Cost — $936,736,347) — 159.7%
        1,022,185,363   
Other Assets Less Liabilities — 1.2%        7,676,807   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (16.0)%

   

    (102,780,212
VRDP Shares, at Liquidation Value — (44.9)%        (287,100,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 639,981,958   
    

 

 

 
                  

 

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

 

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

 

Counterparty    Value      Unrealized
Appreciation
(Depreciation)
 
National Financial Services Corp.    $ 1,061,790       $ 2,110   
Piper Jaffray    $ 1,156,610       $ 780   
Piper Jaffray    $ 864,855       $ (75

 

(c)   Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

(d)   Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(e)   US 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)   Non-income producing security.

 

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

 

(h)   Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.
(i)   Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2012, for purposes of Section 2(a)(3) of the 1940 Act, as amended, were as follows:

 

Affiliate   Shares
Held at
April 30,
2012
    Net
Activity
    Shares
Held at
October 31,
2012
    Income  

FFI Institutional Tax-Exempt Fund

    3,601,217        (3,507,594     93,623      $ 6   

 

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

 

Ÿ  

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

 

Ÿ  

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and 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)

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 level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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 is based on the pricing transparency of the investment 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 other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy as of October 31, 2012:

 

      Level 1      Level 2      Level 3      Total  

Assets:

           
Investments:            

Long-Term Invest-
ments
1

           $ 1,015,831,740               $ 1,015,831,740   

Short-Term Securities

   $ 93,623         6,260,000                 6,353,623   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 93,623       $ 1,022,091,740               $ 1,022,185,363   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

1   

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

Certain of the Fund’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1    Level 2     Level 3      Total  

Liabilities:

          

TOB trust certificates

      $ (102,718,447           $ (102,718,447

VRDP Shares

        (287,100,000             (287,100,000
  

 

  

 

 

   

 

 

    

 

 

 

Total

      $ (389,818,447           $ (389,818,447
  

 

  

 

 

   

 

 

    

 

 

 

There were no transfers between levels during the six months ended October 31, 2012.

 

 

See Notes to Financial Statements.

 

                
46    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments October 31, 2012 (Unaudited)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Alabama — 0.4%

    

County of Jefferson Alabama, RB, Series A, 5.25%, 1/01/19

   $ 1,490      $ 1,489,106   

Alaska — 1.0%

    

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

    

4.63%, 6/01/23

     1,720        1,724,094   

5.00%, 6/01/46

     2,250        1,906,492   
    

 

 

 
               3,630,586   

Arizona — 0.8%

    

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

     1,000        704,530   

Pima County IDA, RB:

    

6.75%, 7/01/21

     305        305,579   

Arizona Charter Schools Project, Series C, 6.75%, 7/01/31

     1,890        1,892,287   
    

 

 

 
               2,902,396   

California — 9.7%

    

California Health Facilities Financing Authority, RB:

    

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

     2,200        2,541,440   

Stanford Hospital and Clinics, Series A, 5.00%, 8/15/51

     1,180        1,318,308   

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

     3,170        3,808,945   

California State Public Works Board, RB, Various Capital Projects, Sub-Series I-1, 6.38%, 11/01/34

     1,185        1,434,158   

City of Los Angeles Department of Airports, Refunding RB, Series A, 5.25%, 5/15/39

     800        902,600   

San Marcos Unified School District, CAB, GO, Election of 2010, Series B (a):

    

5.14%, 8/01/41

     5,000        1,162,250   

5.08%, 8/01/42

     2,000        449,660   

State of California, GO, Various Purpose:

    

6.00%, 3/01/33

     2,525        3,130,899   

6.50%, 4/01/33

     14,925        18,766,098   
    

 

 

 
               33,514,358   

Colorado — 2.2%

    

Colorado Health Facilities Authority, RB, Catholic Health Initiatives, Series D, 6.25%, 10/01/33

     1,060        1,254,923   

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

     1,000        1,068,240   

Plaza Metropolitan District No. 1 Colorado, Tax Allocation Bonds, Public Improvement Fee, Tax Increment:

    

8.00%, 12/01/25

     3,300        3,415,962   

Subordinate, 8.13%, 12/01/25

     820        819,975   

University of Colorado, RB, Series A, 5.75%, 6/01/28

     750        944,273   
    

 

 

 
               7,503,373   

Connecticut — 1.8%

    

Connecticut State Health & Educational Facility Authority, RB, Ascension Health Senior Credit, 5.00%, 11/15/40

     1,375        1,517,106   

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

     3,385        3,857,884   

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

     950        950,846   
    

 

 

 
               6,325,836   

Delaware — 1.6%

    

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

     1,125        1,267,830   

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

     4,065        4,372,395   
    

 

 

 
               5,640,225   
Municipal Bonds   

Par  

(000)

    Value  
    

District of Columbia — 2.2%

    

Metropolitan Washington Airports Authority, Refunding RB:

    

CAB, Second Senior Lien, Series B (AGC), 4.94%, 10/01/33 (a)

   $ 6,590      $ 2,374,838   

CAB, Second Senior Lien, Series B (AGC), 5.00%, 10/01/34 (a)

     4,830        1,636,935   

CAB, Second Senior Lien, Series B (AGC), 5.05%, 10/01/35 (a)

     6,515        2,078,481   

First Senior Lien, Series A, 5.25%, 10/01/44

     1,500        1,666,785   
    

 

 

 
               7,757,039   

Florida — 2.9%

    

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

     1,165        1,329,999   

Fiddlers Creek Community Development District No. 2, Special Assessment Bonds, Series A, 6.38%, 5/01/35 (b)(c)

     2,350        1,235,301   

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

     2,720        2,721,034   

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

     2,265        2,868,894   

Midtown Miami Community Development District, Special Assessment Bonds, Series A, 6.25%, 5/01/37

     915        934,114   

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

     1,175        806,896   
    

 

 

 
               9,896,238   

Georgia — 4.0%

    

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

     130        144,083   

Fulton County Residential Care Facilities for the Elderly Authority, Refunding RB, Canterbury Court Project,
Series A, 6.13%, 2/15/26

     2,000        2,051,500   

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

     3,465        3,903,080   

Municipal Electric Authority of Georgia, RB, Series W:

    

6.60%, 1/01/18 (d)(e)

     380        395,356   

6.60%, 1/01/18

     5,520        6,106,555   

Municipal Electric Authority of Georgia, Refunding RB, Series X, 6.50%, 1/01/20

     1,205        1,415,851   
    

 

 

 
               14,016,425   

Hawaii — 0.5%

    

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

     1,355        1,590,743   

Illinois — 17.2%

    

Chicago Illinois Board of Education, GO, Refunding, Series A, 5.50%, 12/01/39

     2,110        2,469,903   

Chicago Transit Authority, RB, Sales Tax Receipts Revenue, 5.25%, 12/01/40

     1,050        1,203,331   

City of Chicago Illinois, GARB, O’Hare International Airport, Third Lien, Series C (AGM), 6.50%, 1/01/41

     5,865        7,279,345   

City of Chicago Illinois, GO, Public Improvement Project, Series A, 5.00%, 1/01/34

     4,535        5,098,338   

City of Chicago Illinois, Refunding RB:

    

Sales Tax, Series A, 5.25%, 1/01/38

     820        949,068   

Waterworks Revenue, 5.00%, 11/01/42

     2,865        3,256,072   

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

     800        819,496   

City of Chicago Illinois, Tax Allocation Bonds, Kingsbury Redevelopment Project, Series A, 6.57%, 2/15/13

     300        300,288   

Illinois Finance Authority, RB:

    

Advocate Health Care Network, Series D, 6.50%, 11/01/38

     5,000        5,885,350   

Community Rehabilitation Providers Facilities, Series A, 6.50%, 7/01/22

     470        437,415   

Navistar International, Recovery Zone, 6.50%, 10/15/40

     910        944,644   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    47


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Illinois (concluded)

    

Illinois Finance Authority, Refunding RB:

    

Ascension Health, Series A, 5.00%, 11/15/37

   $ 970      $ 1,084,285   

Ascension Health, Series A, 5.00%, 11/15/42

     1,765        1,961,374   

Central DuPage Health, Series B, 5.50%, 11/01/39

     1,610        1,814,776   

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

    

Series B, 5.00%, 6/15/50

     3,150        3,429,405   

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

     2,500        2,720,975   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     1,335        1,559,120   

6.00%, 6/01/28

     1,140        1,353,408   

Regional Transportation Authority, RB:

    

Series A (AMBAC), 7.20%, 11/01/20

     1,175        1,407,885   

Series A (NPFGC), 6.70%, 11/01/21

     6,450        7,710,717   

Series C (NPFGC), 7.75%, 6/01/20

     2,500        3,103,350   

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

     630        723,095   

Village of Hodgkins Illinois, RB, MBM Project, AMT, 6.00%, 11/01/23

     2,800        2,804,004   

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

     1,450        1,457,438   
    

 

 

 
               59,773,082   

Indiana — 2.8%

    

Indiana Finance Authority, RB:

    

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

     840        925,638   

Wastewater Utility, First Lien, CWA Authority Project, Series A, 5.25%, 10/01/38

     1,580        1,811,012   

Indiana Finance Authority, Refunding RB:

    

Ascension Health Senior Credit, Series B-5, 5.00%, 11/15/36

     1,500        1,618,680   

Community Health Network, Series A, 5.00%, 5/01/42 (f)

     1,885        2,058,853   

Parkview Health System, Series A, 5.75%, 5/01/31

     2,795        3,244,073   
    

 

 

 
               9,658,256   

Iowa — 0.6%

    

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

     1,950        2,220,387   

Kansas — 0.5%

    

Kansas Development Finance Authority, Refunding RB, Sisters of Leavenworth, Series A, 5.00%, 1/01/40

     1,660        1,812,156   

Kentucky — 0.3%

    

Kentucky Economic Development Finance Authority, RB, Owensboro Medical Health System, Series A, 6.38%, 6/01/40

     1,010        1,201,900   

Louisiana — 4.3%

    

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp., Series A-1, 6.50%, 11/01/35

     3,320        3,873,577   

Port of New Orleans Louisiana, Refunding RB, Continental Grain Co. Project, 6.50%, 1/01/17

     7,500        7,516,425   

Sabine River Authority Louisiana, Refunding RB, International Paper Co. Project, 6.20%, 2/01/25

     3,600        3,630,960   
    

 

 

 
               15,020,962   

Maine — 0.3%

    

Maine State Turnpike Authority, RB, Series A, 5.00%, 7/01/42

     885        1,022,892   

Maryland — 1.5%

    

County of Montgomery Maryland, GO, West Germantown Development District, Senior Series A (Radian), 6.70%, 7/01/27

     1,130        1,155,764   
Municipal Bonds   

Par  

(000)

    Value  
    

Maryland (concluded)

    

Maryland Community Development Administration, Refunding RB, Residential, Series D, AMT, 4.90%, 9/01/42

   $ 1,500      $ 1,547,115   

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

     435        491,028   

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

     830        904,086   

Maryland Health & Higher Educational Facilities Authority, RB, University Of Maryland Medical System, Series B (NPFGC), 7.00%, 7/01/22

     955        1,172,788   
    

 

 

 
               5,270,781   

Massachusetts — 2.9%

    

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

     1,805        1,973,641   

Massachusetts HFA, RB, AMT:

    

S/F, Series 130, 5.00%, 12/01/32

     2,720        2,828,719   

Series A, 5.20%, 12/01/37

     2,830        2,938,700   

Massachusetts HFA, Refunding HRB, Series F, AMT, 5.70%, 6/01/40

     2,105        2,267,022   
    

 

 

 
               10,008,082   

Michigan — 6.6%

    

City of Detroit Michigan, RB, Senior Lien:

    

Sewage Disposal System, Series B (AGM), 7.50%, 7/01/33

     910        1,141,322   

Water Supply System, Series A, 5.25%, 7/01/41

     3,075        3,275,152   

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

     1,380        1,546,911   

Michigan State Hospital Finance Authority, Refunding RB, Series A:

    

Henry Ford Health System, 5.25%, 11/15/46

     5,080        5,382,158   

McLaren Health Care, 5.75%, 5/15/38

     8,560        9,572,220   

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital, 8.25%, 9/01/39

     1,400        1,805,300   
    

 

 

 
               22,723,063   

Minnesota — 2.4%

    

Tobacco Securitization Authority Minnesota, Refunding RB, Tobacco Settlement, Series B:

    

5.25%, 3/01/25

     4,495        5,122,322   

5.25%, 3/01/31

     3,015        3,358,167   
    

 

 

 
               8,480,489   

Mississippi — 1.4%

    

County of Lowndes Mississippi, Refunding RB, Weyerhaeuser Co. Project, Series A, 6.80%, 4/01/22

     3,000        3,534,840   

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

     1,065        1,211,022   
    

 

 

 
               4,745,862   

Nebraska — 0.7%

    

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

    

5.25%, 9/01/37

     825        904,753   

5.00%, 9/01/42

     1,445        1,543,448   
    

 

 

 
               2,448,201   

New Jersey — 2.8%

    

New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT, 6.25%, 9/15/29

     1,955        2,001,353   

New Jersey Health Care Facilities Financing Authority, RB, Pascack Valley Hospital Association, 6.63%, 7/01/36 (b)(c)

     1,680        17   

New Jersey State Housing & Mortgage Finance Agency, RB, Series AA, 6.38%, 10/01/28

     1,010        1,094,244   
 

 

See Notes to Financial Statements.

 

                
48    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

New Jersey (concluded)

    

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

    

Series A, 5.50%, 6/15/41

   $ 1,635      $ 1,912,312   

Series B, 5.25%, 6/15/36

     2,460        2,843,293   

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

     1,845        1,799,428   
    

 

 

 
               9,650,647   

New York — 9.3%

    

Metropolitan Transportation Authority, RB:

    

Series 2008C, 6.50%, 11/15/28

     9,405        12,022,694   

Series E, 5.00%, 11/15/42

     540        610,994   

Metropolitan Transportation Authority, Refunding RB, Transportation , Series D, 5.25%, 11/15/40

     1,205        1,367,892   

New York City Industrial Development Agency, RB:

    

British Airways Plc Project, AMT, 7.63%, 12/01/32

     1,920        1,968,000   

Series C, 6.80%, 6/01/28

     690        698,922   

Special Needs Facilities Pooled Program, Series C-1, 6.50%, 7/01/17

     685        692,131   

New York City Transitional Finance Authority, RB, Fiscal 2009, Series S-3, 5.25%, 1/15/39

     6,700        7,563,697   

New York Liberty Development Corp., Refunding RB, Second Priority, Bank of America Tower at One Bryant Park Project, 6.38%, 7/15/49

     1,220        1,417,152   

New York State Thruway Authority, RB, Series I, 5.00%, 1/01/42

     1,775        2,014,944   

Port Authority of New York & New Jersey, RB, JFK International Air Terminal:

    

6.00%, 12/01/36

     1,165        1,368,479   

6.00%, 12/01/42

     1,250        1,458,737   

Westchester County Industrial Development Agency New York, RB, Special Needs Facilities Pooled Program, Series E-1, 6.50%, 7/01/17

     1,000        1,010,890   
    

 

 

 
               32,194,532   

North Carolina — 1.5%

    

Gaston County Industrial Facilities & Pollution Control Financing Authority North Carolina, RB, Exempt Facilities National Gypsum Co. Project, AMT, 5.75%, 8/01/35

     1,675        1,532,189   

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

     1,400        1,537,158   

North Carolina Medical Care Commission, Refunding RB, Carolina Village Project, 6.00%, 4/01/38

     2,000        2,102,480   
    

 

 

 
               5,171,827   

Oregon — 0.1%

    

City of Tigard Washington County Oregon, Refunding RB, Water System, 5.00%, 8/01/37

     250        290,838   

Pennsylvania — 1.8%

    

Allegheny County Hospital Development Authority, Refunding RB, Health System, West Penn, Series A, 5.38%, 11/15/40

     2,205        1,560,126   

Bucks County IDA, RB, Ann’s Choice Inc. Facility, Series A, 6.13%, 1/01/25

     880        890,551   

Montgomery County IDA Pennsylvania, MRB, Whitemarsh Continuing Care, 6.13%, 2/01/28

     420        428,198   

Pennsylvania Economic Development Financing Authority, RB, Aqua Pennsylvania, Inc. Project, 5.00%, 11/15/40

     1,890        2,114,230   

Philadelphia Authority for Industrial Development, RB, Commercial Development, AMT, 7.75%, 12/01/17

     1,265        1,266,923   
    

 

 

 
               6,260,028   
Municipal Bonds   

Par  

(000)

    Value  
    

Puerto Rico — 2.7%

    

Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A, 6.50%, 8/01/44

   $ 4,255      $ 4,991,115   

Puerto Rico Sales Tax Financing Corp., Refunding RB, Series C, CAB, 5.45%, 8/01/39 (a)

     18,670        4,430,764   
    

 

 

 
               9,421,879   

South Carolina — 1.1%

    

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

     3,280        3,702,858   

South Dakota — 0.3%

    

South Dakota Health and Educational Facilities Authority, RB, Series E, 5.00%, 11/01/42 (f)

     1,070        1,172,260   

Tennessee — 0.4%

    

Johnson City Health & Educational Facilities Board, RB, Appalachian Christian Village Project, Series A, 6.00%, 2/15/24

     1,000        1,000,710   

Rutherford County Health & Educational Facilities Board, RB, Ascension Health, Series C, 5.00%, 11/15/47

     210        237,352   
    

 

 

 
               1,238,062   

Texas — 11.0%

    

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

     1,500        209,160   

Brazos River Harbor Navigation District, Refunding RB, Dow Chemical Co. Project, Series A-7, AMT, 6.63%, 5/15/33

     3,000        3,037,710   

Central Texas Regional Mobility Authority, Refunding RB, Senior Lien, 6.25%, 1/01/46

     2,140        2,500,119   

City of Austin Texas, Refunding RB, Water & Wastewater System Revenue, 5.00%, 11/15/37

     630        736,729   

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

     1,510        1,742,072   

City of Houston Texas, RB, Special Facilities, Continental Airlines, Series E, AMT, 6.75%, 7/01/21

     4,820        4,837,882   

Dallas Fort Worth International Airport, Refunding RB, AMT, 5.00%, 11/01/35

     1,800        1,968,588   

Fort Bend County Industrial Development Corp., RB, 4.75%, 11/01/42

     1,475        1,492,582   

Harris County Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/35

     2,000        2,509,860   

North Texas Tollway Authority, Refunding RB, First Tier, Series A, 6.25%, 1/01/39

     7,000        8,038,100   

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

    

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

     3,000        3,702,780   

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

     3,000        3,638,820   

University of Texas System, Refunding RB, Financing System, Series B, 5.00%, 8/15/43

     3,080        3,639,174   
    

 

 

 
               38,053,576   

Utah — 0.7%

    

County of Utah, RB, IHC Health Services, Inc., 5.00%, 5/15/43

     2,010        2,267,220   

Virginia — 2.7%

    

Fairfax County EDA, Refunding RB, Goodwin House Inc.:

    

5.13%, 10/01/37

     500        516,970   

5.13%, 10/01/42

     3,440        3,545,986   

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River, AMT:

    

5.25%, 1/01/32

     1,615        1,763,257   

6.00%, 1/01/37

     1,830        2,105,086   

5.50%, 1/01/42

     1,155        1,266,481   
    

 

 

 
               9,197,780   
 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    49


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniVest Fund II, Inc. (MVT)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  
    

Washington — 2.4%

    

Washington Health Care Facilities Authority, RB, Swedish Health Services, Series A, 6.75%, 5/15/21 (e)

   $ 1,980      $ 2,790,711   

Washington Health Care Facilities Authority, Refunding RB:

    

Catholic Health Initiatives, Series D, 6.38%, 10/01/36

     3,700        4,528,356   

Providence Health & Services, Series A, 5.00%, 10/01/42

     1,015        1,137,094   
    

 

 

 
               8,456,161   

Wisconsin — 4.0%

    

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

     7,100        8,705,807   

Wisconsin Health & Educational Facilities Authority, RB:

    

Ascension Health Senior Credit Group, 5.00%, 11/15/33

     2,465        2,739,355   

SynergyHealth Inc., 6.00%, 8/1/13 (e)

     2,215        2,309,957   
    

 

 

 
               13,755,119   
Total Municipal Bonds — 109.4%              379,485,225   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
 

Arizona — 0.8%

    

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

     2,450        2,786,854   

California — 8.2%

    

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/44

     3,271        3,807,516   

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

     2,610        3,056,440   

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

     5,939        6,714,089   

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

     2,290        2,604,600   

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

     1,077        1,301,304   

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

     9,480        10,814,784   
    

 

 

 
               28,298,733   

Colorado — 0.7%

    

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

     2,129        2,435,089   

Connecticut — 2.0%

    

Connecticut State Health & Educational Facility Authority, RB, Yale University, Series Z-3, 5.05%, 7/01/42

     6,000        6,871,920   

Florida — 1.8%

    

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

     5,679        6,410,170   

Illinois — 1.4%

    

City of Chicago Illinois, Refunding RB, Second Lien (AGM), 5.25%, 11/01/33

     1,320        1,530,500   

Illinois State Toll Highway Authority, RB, Series B, 5.50%, 1/01/33

     2,999        3,372,829   
    

 

 

 
               4,903,329   

Maryland — 2.1%

    

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

     4,159        4,639,178   
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
  

Par  

(000)

    Value  
    

Maryland (concluded)

    

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

   $ 2,290      $ 2,572,952   
    

 

 

 
               7,212,130   

Massachusetts — 4.7%

    

Massachusetts School Building Authority, RB, Series A:

    

5.00%, 8/15/15 (e)

     1,275        1,409,372   

5.00%, 8/15/30

     8,725        9,644,528   

Sales Tax Revenue, Senior, Series B, 5.00%, 10/15/41

     4,530        5,263,860   
    

 

 

 
               16,317,760   

Michigan — 0.9%

    

Detroit Water and Sewerage Department, Refunding RB, Sewage Disposal System, Senior Lien, Series A:

    

5.00%, 7/01/32

     1,563        1,664,719   

5.25%, 7/01/39

     1,349        1,462,092   
    

 

 

 
               3,126,811   

New Hampshire — 0.7%

    

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/39 (h)

     2,009        2,402,935   

New York — 11.5%

    

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

     1,610        1,900,726   

New York City Municipal Water Finance Authority, Refunding RB, Water & Sewer System:

    

Series DD, 5.00%, 6/15/37

     6,299        7,161,938   

Series FF-2, 5.50%, 6/15/40

     1,575        1,886,949   

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

     2,459        2,834,826   

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

     10,740        12,350,080   

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

     6,440        7,592,695   

New York State Dormitory Authority, ERB, Series F, 5.00%, 3/15/35

     5,789        6,294,967   
    

 

 

 
               40,022,181   

North Carolina — 2.0%

    

North Carolina Capital Facilities Finance Agency, Refunding RB, Duke University Project, Series A, 5.00%, 10/01/41

     6,239        6,997,895   

Ohio — 5.3%

    

Ohio Higher Educational Facility Commission, Refunding RB, Hospital, Cleveland Clinic Health, Series A, 5.25%, 1/01/33

     2,400        2,650,536   

State of Ohio, Refunding RB, Cleveland Clinic Health, Series A, 5.50%, 1/01/39

     13,843        15,644,195   
    

 

 

 
               18,294,731   

South Carolina — 1.7%

    

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

     4,995        5,928,016   

Texas — 3.0%

    

Harris County Texas Metropolitan Transit Authority, Refunding RB, Sales and Use Tax Bonds, Series A, 5.00%, 11/01/41

     3,400        3,906,838   

Texas Department of Housing & Community Affairs, MRB, Series B, AMT (Ginnie Mae), 5.25%, 9/01/32

     3,361        3,540,301   

Texas State University Systems, Refunding RB (AGM), 5.00%, 3/15/30

     2,743        3,079,686   
    

 

 

 
               10,526,825   
 

 

See Notes to Financial Statements.

 

                
50    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents

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 (g)
  

Par  

(000)

    Value  
    

Utah — 0.9%

    

City of Riverton Utah Hospital, RB, IHC Health Services, Inc., 5.00%, 8/15/41

   $ 2,774      $ 3,041,261   

Washington — 5.5%

    

Central Puget Sound Regional Transit Authority, RB, Series A:

    

5.00%, 11/01/34

     5,000        5,713,475   

5.00%, 11/01/36

     4,000        4,570,780   

(AGM), 5.00%, 11/01/32

     7,693        8,787,911   
    

 

 

 
               19,072,166   

Wisconsin — 0.8%

    

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health Inc., 5.25%, 4/01/39 (h)

     2,499        2,779,159   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 54.0%
        187,427,965   

Total Long-Term Investments

(Cost — $505,789,259) — 163.4%

  

  

    566,913,190   
    
   
Short-Term Securities    Shares         

Money Market Fund — 0.0%

    

FFI Institutional Tax-Exempt Fund, 0.04% (i)(j)

     67,332        67,332   
     

Par  

(000)

        

Connecticut — 2.8%

    

Connecticut Housing Finance Authority, Refunding RB, VRDN, Housing Mortgage Finance Program (JPMorgan Chase Bank NA SBPA), 0.23%, 11/01/12 (k):

    

Series A

   $ 6,900        6,900,000   

Sub-Series A-2

     2,800        2,800,000   
    

 

 

 
               9,700,000   

Virginia — 1.2%

    

Roanoke Economic Development Authority, RB, VRDN, Carilion Health System (AGM Insurance, Wells Fargo Bank NA SBPA), 0.21%, 11/01/12 (k):

  

Series A-1

     2,200        2,200,000   

Series A-2

     2,000        2,000,000   
    

 

 

 
               4,200,000   

Total Short-Term Securities

(Cost — $13,967,332) — 4.0%

             13,967,332   
Total Investments (Cost — $519,756,591) — 167.4%        580,880,522   
Other Assets Less Liabilities — 1.1%        3,954,490   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (28.2)%

   

    (97,879,326
VMTP Shares, at Liquidation Value — (40.3)%        (140,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 346,955,686   
    

 

 

 

 

 

 

(a)   Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

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

 

(c)   Non-income producing security.

 

(d)   Security is collateralized by Municipal or US Treasury obligations.

 

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

 

Counterparty    Value      Unrealized
Appreciation
 
Wells Fargo & Co.    $ 2,058,853       $ 11,122   
Cain Brothers Co.    $ 1,172,260       $ 7,426   

 

(g)   Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

(h)   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 agreements is $8,722,888.

 

(i)   Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2012, for purposes of Section 2(a)(3) of the 1940 Act, as amended, were as follows:

 

Affiliate   

Shares
Held at
April 30,

2012

     Net
Activity
     Shares
Held at
October 31,
2012
     Income  

FFI Institutional Tax-Exempt Fund

     40,158         27,174         67,332       $ 9   

 

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

 

(k)   Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

 

Ÿ  

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

 

Ÿ  

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets and 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)

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 level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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 is based on the pricing transparency of the investment 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 other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    51


Table of Contents

Schedule of Investments (concluded)

  

BlackRock MuniVest Fund II, Inc. (MVT)

 

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy as of October 31, 2012:

 

     Level 1      Level 2      Level 3      Total  

Assets:

          
Investments:           

Long-Term Invest-
ments
1

          $ 566,913,190               $ 566,913,190   

Short-Term Securities

  $ 67,332         13,900,000                 13,967,332   
 

 

 

    

 

 

    

 

 

    

 

 

 

Total

  $ 67,332       $ 580,813,190               $ 580,880,522   
 

 

 

    

 

 

    

 

 

    

 

 

 

 

1  

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

Certain of the Fund’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of October 31, 2012, such liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1      Level 2     Level 3      Total  

Liabilities:

         

TOB Trust certificates

          $ (97,815,267           $ (97,815,267

VMTP Shares

            (140,000,000             (140,000,000
 

 

 

 

Total

          $ (237,815,267           $ (237,815,267
 

 

 

 

There were no transfers between levels during the six months ended October 31, 2012.

 

 

See Notes to Financial Statements.

 

                
52    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Statements of Assets and Liabilities     

 

October 31, 2012 (Unaudited)  

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)

 
                 
Assets                                                            

Investments at value — unaffiliated1

  $ 559,765,539       $ 573,450,691      $ 406,258,306       $ 301,864,357       $ 334,040,810      $ 1,022,091,740       $ 580,813,190   

Investments at value — affiliated2

    1,686,161         4,871,693        39,693         34,963         67,427        93,623         67,332   

Interest receivable

    9,202,057         7,707,684        5,796,977         4,200,114         4,204,309        13,406,969         8,855,416   

Investments sold receivable

    170,000         1,768,128        5,000                        5,000         635,000   

Deferred offering costs

            238,022        134,039         115,318         136,663        1,043,864         179,749   

Prepaid expenses

    1,675         3,044        4,332         3,197         16,026        297,657         2,770   
 

 

 

 

Total assets

    570,825,432         588,039,262        412,238,347         306,217,949         338,465,235        1,036,938,853         590,553,457   
 

 

 

 
                 
Accrued Liabilities                                                            

Bank overdraft

            238,216                               464,222           

Investments purchased payable

            1,798,692        2,239,553         1,625,305         892,578        3,080,440         3,212,566   

Income dividends payable — Common Shares

    2,233,870         1,710,469        1,288,676         935,488         961,608        2,730,555         1,898,166   

Investment advisory fees payable

    264,472         247,306        374,828         278,855         293,565        482,349         487,151   

Interest expense and fees payable

    44,625         50,126        42,365         35,724         26,122        61,765         64,059   

Officer’s and Directors’ fees payable

    4,627         2        597         357                152,763           

Other accrued expenses payable

    378,383         107,941        104,906         67,376         82,251        166,354         120,562   
 

 

 

 

Total accrued liabilities

    2,925,977         4,152,752        4,050,925         2,943,105         2,256,124        7,138,448         5,782,504   
 

 

 

 
                 
Other Liabilities                                                            

TOB trust certificates

    64,148,789         70,315,120        67,690,138         56,562,094         50,254,556        102,718,447         97,815,267   

VRDP Shares, at liquidation value of $100,000 per share3,4

            142,500,000                               287,100,000           

VMTP Shares, at liquidation value of $100,000 per share3,4

                   83,700,000         55,000,000         87,000,000                140,000,000   
 

 

 

 

Total other liabilities

    64,148,789         212,815,120        151,390,138         111,562,094         137,254,556        389,818,447         237,815,267   
 

 

 

 

Total liabilities

    67,074,766         216,967,872        155,441,063         114,505,199         139,510,686        396,956,895         243,597,771   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 503,750,666       $ 371,071,390      $ 256,797,284       $ 191,712,750       $ 198,954,555      $ 639,981,958       $ 346,955,686   
 

 

 

 
                 
Net Assets Applicable to Common Shareholders Consist of                                              

Paid-in capital5

  $ 479,397,343       $ 315,546,417      $ 209,927,784       $ 155,042,794       $ 175,057,135      $ 542,998,466       $ 285,417,841   

Undistributed net investment income

    2,599,027         6,341,857        4,322,388         4,154,088         2,981,455        9,349,589         5,800,163   

Undistributed net realized gain (accumulated net realized loss)

    (15,196,582      (9,964,866     2,292,596         1,010,496         (9,108,252     2,184,887         (5,386,249

Net unrealized appreciation/depreciation

    36,950,878         59,147,982        40,254,516         31,505,372         30,024,217        85,449,016         61,123,931   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 503,750,666       $ 371,071,390      $ 256,797,284       $ 191,712,750       $ 198,954,555      $ 639,981,958       $ 346,955,686   
 

 

 

 

Net asset value, per Common Share

  $ 14.09       $ 12.58      $ 18.23       $ 17.01       $ 15.31      $ 16.76       $ 16.63   
 

 

 

 

 

Investments at cost — unaffiliated

 

  $ 522,814,661       $ 514,302,709      $ 366,003,790       $ 270,358,985       $ 304,016,593      $ 936,642,724       $ 519,689,259   

Investments at cost — affiliated

 

  $ 1,686,161       $ 4,871,693      $ 39,693       $ 34,963       $ 67,427      $ 93,623       $ 67,332   

VRDP/VMTP Shares outstanding, par value $0.10 per share

 

            1,425        837         550         870        2,871         1,400   

Preferred Shares authorized

 

            7,480        5,000         3,480         5,380        15,671         7,000   

Common Shares outstanding, 200 million shares authorized, $0.10 par value

    35,741,923         29,490,852        14,083,889         11,270,936         12,994,705        38,189,582         20,858,966   

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    53


Table of Contents
Statements of Operations     

 

Six Months Ended October 31, 2012 (Unaudited)  

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)

 
             
Investment Income                           

Interest

  $ 16,062,433      $ 13,380,661      $ 9,733,053      $ 7,216,700      $ 7,258,853      $ 22,407,503      $ 14,118,930   

Income — affiliated

    271        950        11        4        9        6        9   
 

 

 

 

Total income

    16,062,704        13,381,611        9,733,064        7,216,704        7,258,862        22,407,509        14,118,939   
 

 

 

 
             
Expenses                                                        

Investment advisory

    1,545,538        1,458,195        1,117,463        828,159        916,525        2,816,183        1,454,590   

Liquidity fees

           153,163                             1,793,457          

Professional

    68,987        92,340        93,563        67,815        72,463        108,273        80,588   

Accounting services

    49,463        52,230        38,785        32,195        30,819        74,997        49,712   

Remarketing fees on Preferred Shares

           19,792                             146,740          

Transfer agent

    28,513        25,416        17,675        14,178        13,938        29,591        17,109   

Officer and Directors

    28,354        17,374        12,432        9,333        9,333        33,024        15,921   

Custodian

    12,283        14,823        8,582        6,568        7,655        23,380        11,090   

Printing

    5,848        10,440        7,305        5,268        4,492        15,462        8,987   

Registration

    6,125        5,124        4,758        4,673        4,661        6,588        4,941   

Miscellaneous

    21,828        33,534        30,454        27,004        24,141        42,021        28,739   
 

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    1,766,939        1,882,431        1,331,017        995,193        1,084,027        5,089,716        1,671,677   

Interest expense, fees and amortization of offering costs1

    299,360        915,354        782,679        559,384        724,056        777,787        1,232,194   
 

 

 

 

Total expenses

    2,066,299        2,797,785        2,113,696        1,554,577        1,808,083        5,867,503        2,903,871   

Less fees waived by Manager

    (637     (1,916     (24     (10     (85,563     (41     (11
 

 

 

 

Total expenses after fees waived

    2,065,662        2,795,869        2,113,672        1,554,567        1,722,520        5,867,462        2,903,860   
 

 

 

 

Net investment income

    13,997,042        10,585,742        7,619,392        5,662,137        5,536,342        16,540,047        11,215,079   
 

 

 

 
             
Realized and Unrealized Gain (Loss)                                                        
Net realized gain (loss) from:              

Investments

    4,310,762        1,121,940        1,585,914        1,358,688        4,103,365        6,426,260        2,285,512   

Financial futures contracts

    (839,470     (986,834     (850,912     (640,706     (736,216     (2,816,605     (1,154,575
 

 

 

 
    3,471,292        135,106        735,002        717,982        3,367,149        3,609,655        1,130,937   
 

 

 

 
Net change in unrealized appreciation/depreciation on:              

Investments

    17,607,767        12,962,577        11,313,551        7,709,065        5,636,865        15,568,577        13,670,008   

Financial futures contracts

    480,188        316,943        346,118        261,175        285,365        1,393,556        470,479   
 

 

 

 
    18,087,955        13,279,520        11,659,669        7,970,240        5,922,230        16,962,133        14,140,487   
 

 

 

 

Total realized and unrealized gain

    21,559,247        13,414,626        12,394,671        8,688,222        9,289,379        20,571,788        15,271,424   
 

 

 

 

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ 35,556,289      $ 24,000,368      $ 20,014,063      $ 14,350,359      $ 14,825,721      $ 37,111,835      $ 26,486,503   
 

 

 

 

 

1 Related to TOBs, VRDP and/or VMTP Shares.

             

 

 

See Notes to Financial Statements.      
                
54    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Statements of Changes in Net Assets     

 

    BlackRock MuniAssets
Fund, Inc. (MUA)
        BlackRock MuniEnhanced
Fund, Inc. (MEN)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
October 31,
2012
(Unaudited)
    Year Ended
April 30,
2012
        Six Months Ended
October 31,
2012
(Unaudited)
    Year Ended
April 30,
2012
 
         
Operations                                    

Net investment income

  $ 13,997,042      $ 27,317,491        $ 10,585,742      $ 20,340,510   

Net realized gain

    3,471,292        7,126,365          135,106        (675,114

Net change in unrealized appreciation/depreciation

    18,087,955        40,188,787          13,279,520        54,234,700   

Dividends to AMPS Shareholders from net investment income

                           (86,943
 

 

 

     

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    35,556,289        74,632,643          24,000,368        73,813,153   
 

 

 

     

 

 

 
         
Dividends to Common Shareholders From1                                    

Net investment income

    (13,403,221     (26,925,856       (10,257,400     (20,207,814
 

 

 

     

 

 

 
         
Capital Share Transactions                                    

Reinvestment of common dividends

                    311,391        147,962   
 

 

 

     

 

 

 
         
Net Assets Applicable to Common Shareholders                                    

Total increase in net assets applicable to Common Shareholders

    22,153,068        47,706,787          14,054,359        53,753,301   

Beginning of period

    481,597,598        433,890,811          357,017,031        303,263,730   
 

 

 

     

 

 

 

End of period

  $ 503,750,666      $ 481,597,598        $ 371,071,390      $ 357,017,031   
 

 

 

     

 

 

 

Undistributed net investment income

  $ 2,599,027      $ 2,005,206        $ 6,341,857      $ 6,013,515   
 

 

 

     

 

 

 
    BlackRock MuniHoldings
Fund, Inc. (MHD)
        BlackRock MuniHoldings
Fund II, Inc. (MUH)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:  

Six Months Ended

October 31,
2012
(Unaudited)

    Year Ended
April 30,
2012
        Six Months Ended
October 31,
2012
(Unaudited)
    Year Ended
April 30,
2012
 
         
Operations                                    

Net investment income

  $ 7,619,392      $ 15,666,101        $ 5,662,137      $ 11,523,683   

Net realized gain

    735,002        1,157,061          717,982        482,184   

Net change in unrealized appreciation/depreciation

    11,659,669        36,408,737          7,970,240        27,132,279   

Dividends to AMPS Shareholders from net investment income

           (208,121              (87,811
 

 

 

     

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    20,014,063        53,023,778          14,350,359        39,050,335   
 

 

 

     

 

 

 
         
Dividends to Common Shareholders From1                                    

Net investment income

    (7,725,522     (15,317,116       (5,608,691     (11,059,908
 

 

 

     

 

 

 
         
Capital Share Transactions                                    

Reinvestment of common dividends

    519,246        914,394          346,746        375,140   
 

 

 

     

 

 

 
         
Net Assets Applicable to Common Shareholders                                    

Total increase in net assets applicable to Common Shareholders

    12,807,787        38,621,056          9,088,414        28,365,567   

Beginning of period

    243,989,497        205,368,441          182,624,336        154,258,769   
 

 

 

     

 

 

 

End of period

  $     256,797,284      $     243,989,497        $     191,712,750      $     182,624,336   
 

 

 

     

 

 

 

Undistributed net investment income

  $ 4,322,388      $ 4,428,518        $ 4,154,088      $ 4,100,642   
 

 

 

     

 

 

 

 

  1   

Dividends are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    55


Table of Contents
Statements of Changes in Net Assets     

 

    BlackRock MuniHoldings
Quality Fund, Inc. (MUS)
    BlackRock Muni Intermediate
Duration Fund, Inc. (MUI)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
October 31,
2012
(Unaudited)
    Year Ended
April 30,
2012
    Six Months Ended
October 31,
2012
(Unaudited)
    Year Ended
April 30,
2012
 
       
Operations                                

Net investment income

  $ 5,536,342      $ 11,513,767      $ 16,540,047      $ 32,774,021   

Net realized gain

    3,367,149        1,695,833        3,609,655        3,176,086   

Net change in unrealized appreciation/depreciation

    5,922,230        26,035,352        16,962,133        63,908,723   

Dividends to AMPS Shareholders from net investment income

           (137,099              
 

 

 

   

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    14,825,721        39,107,853        37,111,835        99,858,830   
 

 

 

   

 

 

 
       
Dividends to Common Shareholders From1                                

Net investment income

    (5,765,327     (11,509,551     (16,364,152     (32,680,904
 

 

 

   

 

 

 
       
Capital Share Transactions                                

Reinvestment of common dividends

    327,172        249,057        1,797,161        742,887   
 

 

 

   

 

 

 
       
Net Assets Applicable to Common Shareholders                                

Total increase in net assets applicable to Common Shareholders

    9,387,566        27,847,359        22,544,844        67,920,813   

Beginning of period

    189,566,989        161,719,630        617,437,114        549,516,301   
 

 

 

   

 

 

 

End of period

  $     198,954,555      $     189,566,989      $     639,981,958      $     617,437,114   
 

 

 

   

 

 

 

Undistributed net investment income

  $ 2,981,455      $ 3,210,440      $ 9,349,589      $ 9,173,694   
 

 

 

   

 

 

 
                BlackRock MuniVest
Fund II, Inc. (MVT)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:     Six Months Ended
October 31,
2012
(Unaudited)
    Year Ended
April 30,
2012
 
       
Operations                                

Net investment income

  

  $ 11,215,079      $ 23,162,488   

Net realized gain

  

    1,130,937        2,351,347   

Net change in unrealized appreciation/depreciation

  

    14,140,487        47,733,695   

Dividends to AMPS Shareholders from net investment income

  

           (473,170
     

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

  

    26,486,503        72,774,360   
     

 

 

 
       
Dividends to Common Shareholders From1           

Net investment income

  

    (11,376,739     (22,158,463
     

 

 

 
       
Capital Share Transactions           

Reinvestment of common dividends

  

    904,937        2,041,162   
     

 

 

 
       
Net Assets Applicable to Common Shareholders           

Total increase in net assets applicable to Common Shareholders

  

    16,014,701        52,657,059   

Beginning of period

  

    330,940,985        278,283,926   
     

 

 

 

End of period

  

  $ 346,955,686      $ 330,940,985   
     

 

 

 

Undistributed net investment income

  

  $ 5,800,163      $ 5,961,823   
     

 

 

 

 

  1   

Dividends are determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.      
                
56    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Statements of Cash Flows     

 

Six Months Ended October 31, 2012 (Unaudited)  

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)
 
                
Cash Provided by (Used for) Operating Activities                              

Net increase in net assets resulting from operations

  $ 24,000,368       $ 20,014,063       $ 14,350,359       $ 14,825,721       $ 37,111,835       $ 26,486,503   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used for) operating activities:

                

(Increase) decrease in interest receivable

    91,061         (156,864      (210,944      1,468         (166,830      (220,347

Decrease in cash pledged as collateral for financial futures contracts

    264,000         278,000         209,000         254,000         951,000         377,000   

(Increase) decrease in prepaid expenses

    106,216         11,053         8,021         (8,406      27,967         9,962   

Increase in investment advisory fees payable

    15,957         201,080         151,113         163,284         40,474         260,650   

Decrease in variation margin payable

    (25,000      (26,250      (19,750      (24,000      (90,000      (35,625

Increase in interest expense and fees payable

    10,158         14,998         14,149         9,211         24,324         20,312   

Increase (decrease) in Officer’s and Directors’ fees payable

    (5,045      (3,009      (2,225      (2,701      8,242         (4,753

Decrease in other accrued expenses payable

    (51,928      (6,801      (15,220      (22,232      (10,676      (47,726

Net realized and unrealized gain on investments

    (14,084,517      (12,899,465      (9,067,753      (9,740,230      (21,994,837      (15,955,520

Amortization of premium and accretion of discount on investments

    (618,607      (231,775      (285,077      376,208         682,081         (20,219

Amortization of deferred offering costs.

    19,823         30,871         26,932         31,329         18,541         40,767   

Proceeds from sales of long-term investments

    38,788,494         45,252,598         29,963,810         58,069,406         100,422,948         53,495,485   

Purchases of long-term investments

    (44,082,054      (43,110,045      (34,543,641      (66,205,045      (121,442,510      (54,487,882

Net proceeds from sales (purchases) of short-term securities

    4,256,264         (8,097,079      (3,607,413      (914,757      (2,752,406      (8,727,174
 

 

 

 

Cash provided by (used for) operating activities

    8,685,190         1,271,375         (3,028,639      (3,186,744      (7,169,847      1,191,433   
 

 

 

 
                
Cash Provided by (Used for) Financing Activities                                                     

Cash receipts from TOB trust certificates

    5,440,078         8,052,790         9,889,266         8,763,400         26,839,766         9,320,660   

Cash payments for TOB trust certificates

    (4,407,042      (2,120,547      (1,600,409      (140,116      (5,551,011      (45,266

Cash dividends paid to Common Shareholders

    (9,944,567      (7,203,618      (5,260,218      (5,436,540      (14,559,206      (10,466,827

Increase in bank overdraft

    226,341                                 440,298           
 

 

 

 

Cash provided by (used for) financing activities

    (8,685,190      (1,271,375      3,028,639         3,186,744         7,169,847         (1,191,433
 

 

 

 
                
Cash                                                     

Net increase (decrease) in cash

                                              

Cash at beginning of period

                                              
 

 

 

 

Cash at end of period

                                              
 

 

 

 
                
Cash Flow Information                                                     

Cash paid during the period for interest

  $ 885,372       $ 736,810       $ 518,303       $ 683,516       $ 734,922       $ 1,171,115   
 

 

 

 
                
Non-cash Financing Activities                                                     

Capital shares issued in reinvestment of dividends paid to Common Shareholders

  $ 311,391       $ 519,246       $ 346,746       $ 327,172       $ 1,797,161       $ 904,937   
 

 

 

 

A Statement of Cash Flows is presented when a Fund had a significant amount of borrowing during the period, based on the average borrowing outstanding in relation to average total assets.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    57


Table of Contents
Financial Highlights    BlackRock MuniAssets Fund, Inc. (MUA)

 

   

Six Months Ended

October 31,
2012

(Unaudited)

    Year Ended April 30,    

Period

June 1, 2008
to April 30,
2009

    Year Ended May 31,  
      2012     2011     2010       2008     2007  
             
Per Share Operating Performance                                           

Net asset value, beginning of period

  $ 13.47      $ 12.14      $ 12.63      $ 10.59      $ 12.79      $ 13.87      $ 13.65   
 

 

 

 

Net investment income1

    0.39        0.76        0.73        0.80        0.72        0.78        0.82   

Net realized and unrealized gain (loss)

    0.61        1.32        (0.46     2.06        (2.18     (1.04     0.24   
 

 

 

 

Net increase (decrease) from investment operations

    1.00        2.08        0.27        2.86        (1.46     (0.26     1.06   
 

 

 

 
Dividends and distributions from:7              

Net investment income

    (0.38     (0.75     (0.76     (0.82     (0.74     (0.82     (0.84

Net realized gain

                                       (0.00 )2        
 

 

 

 

Total dividends and distributions

    (0.38     (0.75     (0.76     (0.82     (0.74     (0.82     (0.84
 

 

 

 

Net asset value, end of period

  $ 14.09      $ 13.47      $ 12.14      $ 12.63      $ 10.59      $ 12.79      $ 13.87   
 

 

 

 

Market price, end of period

  $ 14.08      $ 13.15      $ 11.27      $ 12.65      $ 10.91      $ 13.35      $ 15.29   
 

 

 

 
             
Total Investment Return3                                           

Based on net asset value

    7.49% 4      17.90%        2.31%        27.72%        (11.29)% 4      (1.90)%        7.72%   
 

 

 

 

Based on market price

    10.02% 4      23.99%        (5.17)%        24.17%        (12.45)% 4      (7.12)%        14.71%   
 

 

 

 
             
Ratios to Average Net Assets                                           

Total expenses

    0.83% 5      0.77%        0.78%        0.72%        0.77% 5      0.70%        0.68%   
 

 

 

 

Total expenses after fees waived and paid indirectly

    0.83% 5      0.77%        0.78%        0.72%        0.76% 5      0.69%        0.68%   
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense and fees6

    0.71% 5      0.70%        0.74%        0.67%        0.70% 5      0.66%        0.68%   
 

 

 

 

Net investment income

    5.62% 5      6.00%        6.07%        6.72%        7.13% 5      5.81%        5.91%   
 

 

 

 
             
Supplemental Data                                           

Net assets, end of period (000)

  $ 503,751      $ 481,598      $ 433,891      $ 266,831        $221,899      $ 266,913      $ 287,367   
 

 

 

 

Portfolio turnover

    11%        28%        24%        44%        23%        23%        25%   
 

 

 

 

 

1   

Based on average shares outstanding.

 

2   

Amount is less than $(0.01) per share.

 

3   

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

4   

Aggregate total investment return.

 

5   

Annualized.

 

6   

Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

7   

Dividends and distributions are determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.      
                
58    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Financial Highlights    BlackRock MuniEnhanced Fund, Inc. (MEN)

 

   

Six Months Ended

October 31,
2012

(Unaudited)

    Year Ended April 30,    

Period
February 1, 2009
to April 30,

2009

    Year Ended January 31,  
    2012     2011     2010       2009      2008  
              
Per Share Operating Performance                                    

Net asset value, beginning of period

  $ 12.12      $ 10.30      $ 10.90      $ 9.77      $ 9.15      $ 11.16       $ 11.55   
 

 

 

 

Net investment income1

    0.36        0.69        0.73        0.75        0.18        0.72         0.78   

Net realized and unrealized gain (loss)

    0.45        1.82        (0.62     1.04        0.58        (2.02      (0.41

Dividends to AMPS shareholders from net investment income

           (0.00 )2      (0.03     (0.03     (0.01     (0.19      (0.24
 

 

 

 

Net increase (decrease) from investment operations

    0.81        2.51        0.08        1.76        0.75        (1.49      0.13   
 

 

 

 

Dividends to Common Shareholders from net investment income9

    (0.35     (0.69     (0.68     (0.63     (0.13     (0.52      (0.52
 

 

 

 

Net asset value, end of period

  $ 12.58      $ 12.12      $ 10.30      $ 10.90      $ 9.77      $ 9.15       $ 11.16   
 

 

 

 

Market price, end of period

  $ 12.61      $ 11.66      $ 9.99      $ 10.81      $ 8.88      $ 8.31       $ 10.66   
 

 

 

 
              
Total Investment Return Applicable to Common Shareholders3                                            

Based on net asset value

    6.76% 4      25.12%        0.78%        18.76%        8.40% 4      (13.19)%         1.44%   
 

 

 

 

Based on market price

    11.23% 4      24.11%        (1.44)%        29.59%        8.48% 4      (17.46)%         3.92%   
 

 

 

 
              
Ratios to Average Net Assets Applicable to Common Shareholders                                            

Total expenses5

    1.52% 6      1.70%        1.24%        1.20%        1.46% 6      1.77%         1.72%   
 

 

 

 

Total expenses after fees waived and paid indirectly5

    1.52% 6      1.70%        1.24%        1.20%        1.45% 6      1.76%         1.72%   
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs5,7

    1.02% 6,8      1.35% 8      1.09%        1.04%        1.22% 6      1.18%         1.08%   
 

 

 

 

Net investment income5

    5.76% 6      6.12%        6.89%        7.17%        7.72% 6      7.43%         6.85%   
 

 

 

 

Dividends to AMPS Shareholders

           0.03%        0.29%        0.32%        0.56% 6      1.92%         2.08%   
 

 

 

 

Net investment income to Common Shareholders

    5.76% 6      6.09%        6.60%        6.85%        7.16% 6      5.51%         4.77%   
 

 

 

 
              
Supplemental Data                                            

Net assets applicable to Common Shareholders, end of period (000)

  $ 371,071      $ 357,017      $ 303,264      $ 320,083      $ 287,078        $368,689       $ 327,711   
 

 

 

 

AMPS Shares outstanding at $25,000 liquidation preference, end of period (000)

                $ 142,575      $ 142,575      $ 158,850        $158,850       $ 187,000   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 142,500      $ 142,500                                       
 

 

 

 

Portfolio turnover

    7%        22%        9%        23%        6%        24%         18%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                $ 78,179      $ 81,128      $ 70,185        $  67,294       $ 68,834   
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of period

  $ 360,401      $ 350,538                                       
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Amount is less than $(0.01) per share.

 

3   

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

4   

Aggregate total investment return.

 

5   

Do not reflect the effect of dividends to AMPS Shareholders.

 

6   

Annualized.

 

7   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.

 

8   

For the six months ended October 31, 2012 and the year ended April 30, 2012, the total expense ratios after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees were 0.93% and 0.98%, respectively.

 

9   

Dividends are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    59


Table of Contents
Financial Highlights    BlackRock MuniHoldings Fund, Inc. (MHD)

 

    Six Months Ended
October 31,
2012
(Unaudited)
    Year Ended April 30,  
      2012     2011     2010     2009      2008  
            
Per Share Operating Performance                                                 

Net asset value, beginning of period

  $ 17.36      $ 14.67      $ 15.75      $ 13.27      $ 15.20       $ 16.51   
 

 

 

 

Net investment income1

    0.54        1.12        1.14        1.13        1.07         1.16   

Net realized and unrealized gain (loss)

    0.88        2.67        (1.01     2.39        (1.94      (1.20
Dividends and distributions to AMPS shareholders from:             

Net investment income

           (0.01     (0.03     (0.03     (0.18      (0.31

Net realized gain

                  (0.00 )2      (0.00 )2      (0.01      (0.03
 

 

 

 

Net increase (decrease) from investment operations

    1.42        3.78        0.10        3.49        (1.06      (0.38
 

 

 

 
Dividends and distributions to Common Shareholders from:9             

Net investment income

    (0.55     (1.09     (1.07     (0.99     (0.85      (0.85

Net realized gain

                  (0.11     (0.02     (0.02      (0.08
 

 

 

 

Total dividends and distributions to Common Shareholders

    (0.55     (1.09     (1.18     (1.01     (0.87      (0.93
 

 

 

 

Net asset value, end of period

  $ 18.23      $ 17.36      $ 14.67      $ 15.75      $ 13.27       $ 15.20   
 

 

 

 

Market price, end of period

  $ 19.32      $ 18.08      $ 14.51      $ 15.70      $ 11.97       $ 14.77   
 

 

 

 
            
Total Investment Return Applicable to Common Shareholders3                                                 

Based on net asset value

    8.25% 4      26.57%        0.57%        27.31%        (6.24)%         (2.08)%   
 

 

 

 

Based on market price

    10.15% 4      33.28%        (0.21)%        40.68%        (12.97)%         (4.74)%   
 

 

 

 
            
Ratios to Average Net Assets Applicable to Common Shareholders                                                 

Total expenses5

    1.67% 6      1.41%        1.28%        1.25%        1.65%         1.56%   
 

 

 

 

Total expenses after fees waived and paid indirectly5

    1.67% 6      1.41%        1.28%        1.25%        1.64%         1.56%   
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs5,7

    1.05% 6      1.09% 8      1.13%        1.11%        1.25%         1.20%   
 

 

 

 

Net investment income5

    6.02% 6      6.95%        7.41%        7.67%        7.98%         7.27%   
 

 

 

 

Dividends to AMPS Shareholders

           0.09%        0.20%        0.24%        1.32%         1.96%   
 

 

 

 

Net investment income to Common Shareholders

    6.02% 6      6.86%        7.21%        7.43%        6.66%         5.31%   
 

 

 

 
            
Supplemental Data                                                 

Net assets applicable to Common Shareholders, end of period (000)

  $ 256,797      $ 243,989      $ 205,368      $ 219,133        $184,685       $ 211,429   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                $ 83,700      $ 83,700        $  91,925       $ 125,000   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 83,700      $ 83,700                                
 

 

 

 

Portfolio turnover

    10%        19%        15%        41%        19%         30%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                $ 86,342      $ 90,454        $  75,230       $ 67,294   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 406,807      $ 391,505                                
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Amount is less than $(0.01) per share.

 

3   

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

4   

Aggregate total investment return.

 

5   

Do not reflect the effect of dividends to AMPS Shareholders.

 

6   

Annualized.

 

7   

Interest expense, fees and amortization of offering costs relate to TOBs and/or WMTP Shares. See Note 1 and Note 7 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 1.05%.

 

9   

Dividends and distributions are determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.      
                
60    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Financial Highlights    BlackRock MuniHoldings Fund II, Inc. (MUH)

 

   

Six Months Ended

October 31,
2012
(Unaudited)

    Year Ended April 30,    

Period

August 1, 2008
to April 30,
2009

    Year Ended July 31,  
      2012     2011     2010       2008      2007  
              
Per Share Operating Performance                                                         

Net asset value, beginning of period

  $ 16.23      $ 13.74      $ 14.65      $ 12.47      $ 13.66      $ 14.78       $ 14.82   
 

 

 

 

Net investment income1

    0.50        1.03        1.03        1.02        0.72        1.04         1.05   

Net realized and unrealized gain (loss)

    0.78        2.45        (0.88     2.08        (1.22     (1.14      (0.05
Dividends and distributions to AMPS Shareholders from:               

Net investment income

           (0.01     (0.02     (0.02     (0.10     (0.26      (0.27

Net realized gain

                  (0.00 )2                              
 

 

 

 

Net increase (decrease) from investment operations

    1.28        3.47        0.13        3.08        (0.60     (0.36      0.73   
 

 

 

 
Dividends and distributions to Common Shareholders from:9               

Net investment income

    (0.50     (0.98     (0.97     (0.90     (0.59     (0.76      (0.77

Net realized gain

                  (0.07                             
 

 

 

 

Total dividends and distributions

    (0.50     (0.98     (1.04     (0.90     (0.59     (0.76      (0.77
 

 

 

 

Net asset value, end of period

  $ 17.01      $ 16.23      $ 13.74      $ 14.65      $ 12.47      $ 13.66       $ 14.78   
 

 

 

 

Market price, end of period

  $ 17.70      $ 16.46      $ 13.35      $ 14.68      $ 11.33      $ 13.01       $ 13.99   
 

 

 

 
              
Total Investment Return Applicable to Common Shareholders3                                                         

Based on net asset value

    7.95% 4      26.08%        0.92%        25.71%        (3.55)% 4      (2.30)%         5.08%   
 

 

 

 

Based on market price

    10.76% 4      31.60%        (2.14)%        38.64%        (7.99)% 4      (1.69)%         4.39%   
 

 

 

 
              
Ratios to Average Net Assets Applicable to Common Shareholders                                                         

Total expenses5

    1.64% 6      1.37%        1.23%        1.25%        1.60% 6      1.55%         1.63%   
 

 

 

 

Total expenses after fees waived and paid indirectly5

    1.64% 6      1.37%        1.23%        1.25%        1.60% 6      1.55%         1.63%   
 

 

 

 

Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs5,7

    1.05% 6      1.07% 8      1.07%        1.10%        1.22% 6      1.18%         1.19%   
 

 

 

 

Net investment income5

    5.97% 6      6.81%        7.18%        7.41%        7.84% 6      7.07%         6.97%   
 

 

 

 

Dividends to AMPS Shareholders

           0.05%        0.14%        0.16%        1.07% 6      1.79%         1.82%   
 

 

 

 

Net investment income to Common Shareholders

    5.97% 6      6.76%        7.04%        7.25%        6.77% 6      5.28%         5.15%   
 

 

 

 
              
Supplemental Data                                                         

Net assets applicable to Common Shareholders, end of period (000)

  $ 191,713      $ 182,624      $ 154,259      $ 163,722      $ 139,377      $ 152,633       $ 165,185   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                $ 55,050      $ 55,050      $ 61,000      $ 61,000       $ 87,000   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 55,000      $ 55,000                                       
 

 

 

 

Portfolio turnover

    9%        18%        15%        41%        19%        28%         15%   
 

 

 

 

Asset coverage per AMPS Share at $25,000 liquidation preference, end of period

                $ 95,056      $ 99,353      $ 81,123      $ 87,562       $ 72,478   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 448,569      $ 432,044                                       
 

 

 

 

 

1  

Based on average Common Shares outstanding.

 

2  

Amount is less than $(0.01) per share.

 

3  

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

4  

Aggregate total investment return.

 

5  

Do not reflect the effect of dividends to AMPS Shareholders.

 

6  

Annualized.

 

7  

Interest expense and fees relate to TOBs and/or VMTP Shares. See Note 1 and Note 7 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 1.03%.

 

9   

Dividends and distributions are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    61


Table of Contents
Financial Highlights    BlackRock MuniHoldings Quality Fund, Inc. (MUS)

 

    Six Months Ended
October 31,
2012
(Unaudited)
    Year Ended April 30,  
      2012     2011     2010     2009     2008  
           
Per Share Operating Performance                                   

Net asset value, beginning of period

  $ 14.61      $ 12.48      $ 13.34      $ 12.27      $ 13.31      $ 14.10   
 

 

 

 

Net investment income1

    0.43        0.89        0.91        0.94        0.93        1.05   

Net realized and unrealized gain (loss)

    0.71        2.14        (0.85     0.97        (1.20     (0.87

Dividend to AMPS Shareholders from net investment income

           (0.01     (0.03     (0.03     (0.19     (0.38
 

 

 

 

Net increase (decrease) from investment operations

    1.14        3.02        0.03        1.88        (0.46     (0.20
 

 

 

 

Dividends to Common Shareholders from net investment income8

    (0.44     (0.89     (0.89     (0.81     (0.58     (0.59
 

 

 

 

Net asset value, end of period

  $ 15.31      $ 14.61      $ 12.48      $ 13.34      $ 12.27      $ 13.31   
 

 

 

 

Market price, end of period

  $ 16.77      $ 14.52      $ 12.31      $ 13.40      $ 10.87      $ 11.97   
 

 

 

 
           
Total Investment Return Applicable to Common Shareholders2                                   

Based on net asset value

    7.89% 3      24.96%        0.21%        16.05%        (2.52)%        (0.95)%   
 

 

 

 

Based on market price

    18.91% 3      25.90%        (1.60)%        31.59%        (3.97)%        (4.34)%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                   

Total expenses4

    1.84% 5      1.49%        1.34%        1.36%        1.88%        1.64%   
 

 

 

 

Total expenses after fees waived4

    1.75% 5      1.41%        1.25%        1.20%        1.65%        1.51%   
 

 

 

 

Total expenses after fees waived and excluding interest expense and fees4,6

    1.02% 5      1.06% 7      1.10%         1.04%        1.17%        1.27%   
 

 

 

 

Net investment income4

    5.63% 5      6.50%        7.04%        7.23%        7.69%        7.72%   
 

 

 

 

Dividends to AMPS Shareholders

           0.08%        0.21%        0.24%        1.61%        2.80%   
 

 

 

 

Net investment income to Common Shareholders

    5.63% 5      6.43%        6.83%        6.99%        6.08%        4.92%   
 

 

 

 
           
Supplemental Data                                   

Net assets applicable to Common Shareholders, end of period (000)

  $ 198,955      $ 189,567      $ 161,720      $ 171,977      $ 158,061      $ 171,510   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                $ 87,000      $ 87,000      $ 94,200      $ 134,000   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 87,000      $ 87,000                               
 

 

 

 

Portfolio turnover

    18%        30%        28%        22%        35%        57%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                $ 71,472      $ 74,420      $ 66,951      $ 57,008   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 328,683      $ 317,893                               
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

3   

Aggregate total investment return.

 

4   

Do not reflect the effect of dividends to AMPS Shareholders.

 

5   

Annualized.

 

6   

Interest expense and fees relate to TOBs and/or VMTP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

7   

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 1.01%.

 

8   

Dividends are determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.      
                
62    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Financial Highlights    BlackRock Muni Intermediate Duration Fund, Inc. (MUI)

 

   

Six Months Ended
October 31,
2012

(Unaudited)

    Year Ended April 30,     Period
June 1, 2008
to April 30,
2009
    Year Ended May 31,  
      2012     2011     2010       2008      2007  
              
Per Share Operating Performance                                                    

Net asset value, beginning of period

  $ 16.21      $ 14.45      $ 14.75      $ 13.05      $ 14.45      $ 15.10       $ 15.07   
 

 

 

 

Net investment income1

    0.43        0.86        0.95        1.02        0.89        1.04         1.03   

Net realized and unrealized gain (loss)

    0.55        1.76        (0.31     1.57        (1.42     (0.63      0.18   
Dividends and distributions to AMPS Shareholders from:               

Net investment income

                  (0.10     (0.11     (0.23     (0.33      (0.28

Net realized gain

                                               (0.04
 

 

 

 

Net increase (decrease) from investment operations

    0.98        2.62        0.54        2.48        (0.76     0.08         0.89   
 

 

 

 
Dividends and distributions to Common Shareholders from:8               

Net investment income

    (0.43     (0.86     (0.84     (0.78     (0.64     (0.73      (0.74

Net realized gain

                                               (0.12
 

 

 

 

Total dividends and distributions to Common Shareholders

    (0.43     (0.86     (0.84     (0.78     (0.64     (0.73      (0.86
 

 

 

 

Net asset value, end of period

  $ 16.76      $ 16.21      $ 14.45      $ 14.75      $ 13.05      $ 14.45       $ 15.10   
 

 

 

 

Market price, end of period

  $ 17.50      $ 16.45      $ 13.65      $ 14.13      $ 11.77      $ 13.70       $ 14.85   
 

 

 

 
              
Total Investment Return Applicable to Common Shareholders2                                                    

Based on net asset value

    6.09% 3      18.74%        3.86%        19.85%        (4.56)% 3      0.86%         6.14%   
 

 

 

 

Based on market price

    9.16% 3      27.56%        2.41%        27.29%        (9.21)% 3      (2.76)%         8.34%   
 

 

 

 
              
Ratios to Average Net Assets Applicable to Common Shareholders                                                    

Total expenses4

    1.85% 5      1.88%        1.45%        1.20%        1.44% 5      1.30%         1.31%   
 

 

 

 

Total expenses after fees waived and paid indirectly4

    1.85% 5      1.88%        1.43%        1.10%        1.25% 5      1.07%         1.07%   
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs4,6

    1.60% 5,7      1.65% 7      1.30%        1.01%        1.02% 5      0.90%         0.87%   
 

 

 

 

Net investment income4

    5.21% 5      5.58%        6.48%        7.22%        7.46% 5      6.97%         6.71%   
 

 

 

 

Dividend to AMPS Shareholders

                  0.70%        0.81%        1.94% 5      2.23%         1.80%   
 

 

 

 

Net investment income to Common Shareholders

    5.21% 5      5.58%        5.78%        6.41%        5.52% 5      4.74%         4.91%   
 

 

 

 
              
Supplemental Data                                                    

Net assets applicable to Common Shareholders, end of period (000)

  $ 639,982      $ 617,437      $ 549,516      $ 561,140      $ 496,247      $ 549,415       $ 574,225   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                       $ 287,175      $ 287,175      $ 320,000       $ 320,000   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 287,100      $ 287,100      $ 287,100                                
 

 

 

 

Portfolio turnover

    10%        27%        21%        29%        13%        14%         12%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                       $ 73,857      $ 68,207      $ 67,941       $ 69,875   
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of period

  $ 322,913      $ 315,060      $ 291,402                                
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

3   

Aggregate total investment return.

 

4   

Do not reflect the effect of dividends to AMPS Shareholders.

 

5   

Annualized.

 

6   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.

 

7   

For the six months ended October 31, 2012 and year ended April 30, 2012, the total expense ratios after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees were 0.99% and 0.99%, respectively.

 

8   

Dividends and distributions are determined in accordance with federal income tax regulations.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    63


Table of Contents
Financial Highlights    BlackRock MuniVest Fund II, Inc. (MVT)

 

   

Six Months Ended

October 31,

2012

(Unaudited)

    Year Ended April 30,    

Period
November 1,
2008 to
April 30,

2009

    Year Ended October 31,  
      2012     2011     2010       2008      2007  
              
Per Share Operating Performance                                                         

Net asset value, beginning of period

  $ 15.91      $ 13.47      $ 14.41      $ 11.95      $ 10.95      $ 14.49       $ 15.35   
 

 

 

 

Net investment income1

    0.54        1.12        1.14        1.18        0.53        1.12         1.16   

Net realized and unrealized gain (loss)

    0.73        2.41        (0.99     2.32        0.95        (3.49      (0.84

Dividends to AMPS Shareholders from net investment income

           (0.02     (0.04     (0.05     (0.05     (0.32      (0.32
 

 

 

 

Net increase (decrease) from investment operations

    1.27        3.51        0.11        3.45        1.43        (2.69        
 

 

 

 

Dividends to Common Shareholders from net investment income8

    (0.55     (1.07     (1.05     (0.99     (0.43     (0.85      (0.86
 

 

 

 

Net asset value, end of period

  $ 16.63      $ 15.91      $ 13.47      $ 14.41      $ 11.95      $ 10.95       $ 14.49   
 

 

 

 

Market price, end of period

  $ 18.16      $ 16.75      $ 13.72      $ 14.94      $ 11.65      $ 9.75       $ 13.91   
 

 

 

 
              
Total Investment Return Applicable to Common Shareholders2                                                         

Based on net asset value

    7.98% 3      26.86%        0.73%        29.75%        13.71% 3      (19.33)%         (0.02)%   
 

 

 

 

Based on market price

    12.00% 3      31.13%        (1.04)%        37.99%        24.49% 3      (25.18)%         (9.56)%   
 

 

 

 
              
Ratios to Average Net Assets Applicable to Common Shareholders                                                         

Total expenses4

    1.69% 5      1.41%        1.23%        1.25%        1.51% 5      1.67%         1.67%   
 

 

 

 

Total expenses after fees waived and excluding interest expense, fees and amortization of offering costs4,6

    0.97% 5      1.04% 7      1.07%        1.10%        1.26% 5      1.16%         1.12%   
 

 

 

 

Net investment income4

    6.53% 5      7.57%        8.14%        8.72%        9.77% 5      8.03%         7.74%   
 

 

 

 

Dividends to AMPS Shareholders

           0.15%        0.32%        0.36%        0.95% 5      2.31%         2.11%   
 

 

 

 

Net investment income to Common Shareholders

    6.53% 5      7.42%        7.82%        8.36%        8.82% 5      5.72%         5.63%   
 

 

 

 
              
Supplemental Data                                                         

Net assets applicable to Common Shareholders, end of period (000)

  $ 346,956      $ 330,941      $ 278,284      $ 295,465      $ 243,583        $223,210       $ 293,836   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                $ 140,000      $ 140,000      $ 150,800        $150,800       $ 175,000   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 140,000      $ 140,000                                       
 

 

 

 

Portfolio turnover

    8%        13%        16%        30%        9%        49%         43%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                $ 74,698      $ 77,767      $ 65,388        $  62,019       $ 67,004   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 347,825      $ 336,386                                       
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

3   

Aggregate total investment return.

 

4   

Do not reflect the effect of dividends to AMPS Shareholders.

 

5   

Annualized.

 

6   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

7   

For the year ended April 30, 2012, the total expense ratios after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.99%.

 

8   

Dividends are determined in accordance with federal income tax regulations.

 

 

See Notes to Financial Statements.      
                
64    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Notes to Financial Statements (Unaudited)     

 

1. Organization and Significant Accounting Policies:

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”) (each, a “Fund”, and, collectively, the “Funds”) are registered under the 1940 Act, as non-diversified, closed-end management investment companies. The Funds are organized as Maryland corporations. The Funds’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. 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.

The following is a summary of significant accounting policies followed by the Funds:

Valuation: US 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 fair value their financial instruments at market value using independent dealers or pricing services under policies approved by the Board. 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 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 Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the Global Valuation Committee, or its delegate, seeks to determine the price that each Fund might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall

be based upon all available factors that the investment advisor and/or sub-advisor deems relevant consistent with the principles of fair value measurement which include the market approach, income approach and/or cost approach, as appropriate. A market approach generally consists of using comparable market transactions. The income approach generally is used to discount future cash flows to present value and adjusted for liquidity as appropriate. These factors include but are not limited to (i) attributes specific to the investment or asset; (ii) the principal market for the investment or asset; (iii) the customary participants in the principal market for the investment or asset; (iv) data assumptions by market participants for the investment or asset, if reasonably available; (v) quoted prices for similar investments or assets in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates. Due to the inherent uncertainty of valuations of such investments, the fair values may differ from the values that would have been used had an active market existed. The Global Valuation Committee, or its delegate, employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Funds’ pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof on a quarterly basis.

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 a fund, transfers municipal bonds into a trust (“TOB Trust”). Other funds managed by the investment advisor may also contribute municipal bonds to a TOB

 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    65


Table of Contents
Notes to Financial Statements (continued)     

 

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: (i) 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 (ii) 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, 2012, 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 the Fund’s payable to the holder of the TOB Trust Certificates, as reported in Statements of Assets and Liabilities as TOB Trust Certificates, approximates 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 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 Fund 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 in proportion to their participation. The recourse TOB Trusts, if any, are identified in the Schedules of Investments.

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, 2012, 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

   $ 123,579,871       $ 64,148,789         0.21% - 0.54%   

MEN

   $ 150,117,179       $ 70,315,120         0.21% - 0.35%  

MHD

   $ 127,804,977       $ 67,690,138         0.20% - 0.51%   

MUH

   $ 105,515,499       $ 56,562,094         0.20% - 0.51%   

MUS

   $ 98,429,171       $ 50,254,556         0.21% - 0.46%   

MUI

   $ 190,709,872       $ 102,718,447         0.21% - 0.37%   

MVT

   $ 187,427,965       $ 97,815,267         0.20% - 0.51%   

For the six months ended October 31, 2012, 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

   $ 63,260,059         0.94

MEN

   $ 71,025,039         0.70

MHD

   $ 68,307,254         0.75

MUH

   $ 55,791,093         0.74

MUS

   $ 48,804,915         0.73

MUI

   $ 99,113,991         0.73

MVT

   $ 96,720,634         0.75

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.

Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that each Fund either deliver collateral or segregate assets in connection with certain investments (e.g., TOBs and financial futures contracts), each Fund will, consistent with SEC rules and/or certain interpretive letters issued by the SEC, segregate collateral or designate on their books and records cash or liquid securities having a market

 

 

                
66    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Notes to Financial Statements (continued)     

 

value at least equal to the amount that would otherwise be required to be physically segregated. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, a Fund engaging in such transactions may have requirements to deliver/deposit securities to/with an exchange or broker-dealer as collateral for certain investments.

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. Dividend income is recorded on the ex-dividend dates. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis.

Dividends and Distributions: Dividends 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 dividends and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Dividends and distributions to Preferred Shareholders are accrued and determined as described in Note 7.

Income Taxes: 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 their taxable income to their shareholders. Therefore, no federal income tax provision is required.

Each Fund files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Funds’ US federal tax returns remains open for each of the following periods:

 

      Year Ended      Period Ended

MUA

     April 30, 2012       June 1, 2008 to
     April 30, 2011       April 30,2009
       April 30, 2010        

MEN

     April 30, 2012       February 1, 2009 to
     April 30, 2011       April 30,2009
     April 30, 2010      
       January 31, 2009        

MHD

     April 30, 2012       N/A
     April 30, 2011      
     April 30, 2010      
       April 30, 2009        

MUH

     April 30, 2012       August 1, 2008 to
     April 30, 2011       April 30,2009
       April 30, 2010        

MUS

     April 30, 2012       N/A
     April 30, 2011      
     April 30, 2010      
       April 30, 2009        

MUI

     April 30, 2012       June 1, 2008 to
     April 30, 2011       April 30, 2009
       April 30, 2010        

MVT

     April 30, 2012       November 1, 2008
     April 30, 2011       to April 30, 2009
       April 30, 2010        

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 does not believe there are any uncertain tax positions that require recognition of a tax liability.

Recent Accounting Standard: In December 2011, the Financial Accounting Standards Board issued guidance that will expand current disclosure requirements on the offsetting of certain assets and liabilities. The new disclosures will be required for investments and derivative financial instruments subject to master netting or similar agreements which are eligible for offset in the Statements of Assets and Liabilities and will require an entity to disclose both gross and net information about such investments and transactions in the financial statements. The guidance is effective for financial statements with fiscal years beginning on or after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Funds’ financial statement disclosures.

Offering Costs: Each Fund incurred costs in connection with the issuance of VRDP Shares and/or VMTP Shares, except MUA, which has not issued VRDP 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.

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 custodians 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.

2. 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, or protect, their exposure to certain risks such as interest rate risk. These contracts may be transacted on an exchange.

Losses may arise if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument or if the counterparty does not perform under the contract. Counterparty risk related to exchange-traded financial futures contracts is deemed to be minimal due to the protection against defaults provided by the exchange on which these contracts trade.

Financial Futures Contracts: The Funds purchase or sell financial futures contracts and options on 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 the 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

 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    67


Table of Contents
Notes to Financial Statements (continued)     

 

through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date. 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 and are recorded by the Funds as unrealized appreciation or depreciation.

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.

 

 

Derivative Financial Instruments Categorized by Risk Exposure:         

The Effect of Derivative Financial Instruments in the Statements of Operations

Six Months Ended October 31, 2012

 
     Net Realized Gain (Loss) From  
      MUA     MEN     MHD     MUH     MUS     MUI     MVT  
Interest rate contracts:               

Financial future contracts

   $ (839,470   $ (986,834   $ (850,912   $ (640,706   $ (736,216   $ (2,816,605   $ (1,154,575
     Net Change in Unrealized Appreciation/Depreciation on  
      MUA     MEN     MHD     MUH     MUS     MUI     MVT  
Interest rate contracts:               

Financial future contracts

   $ 480,188      $ 316,943      $ 346,118      $ 261,175      $ 285,365      $ 1,393,556      $ 470,479   
              
For the six months ended October 31, 2012, the average quarterly balances of outstanding derivative financial instruments were as follows:   
              
      MUA     MEN     MHD     MUH     MUS     MUI     MVT  
Financial future contracts:               

Average number of contracts sold

            200        141        106        128        360        191   

Average notional value of contracts sold

          $ 26,552,745      $ 18,719,685      $ 14,072,955      $ 16,993,757      $ 47,794,941      $ 25,357,871   

 

3. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. (“PNC”) 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 based on a percentage 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%   

Average daily net assets are the average daily value of each Fund’s total assets minus the sum of its accrued liabilities.

The Manager, for MUS, voluntarily agreed to waive its investment advisory fee on the proceeds of the 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, 2012, the waiver was $85,554.

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. For the six months ended October 31, 2012, the amounts waived were as follows:

 

MUA

   $ 637   

MEN

   $ 1,916   

MHD

   $ 24   

MUH

   $ 10   

MUS

   $ 9   

MUI

   $ 41   

MVT

   $ 11   

The Manager entered into a sub-advisory agreement with BlackRock Investment Management, LLC (“BIM”), an affiliate of the Manager. The Manager pays BIM, for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by each Fund to the Manager.

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.

4. Investments:

Purchases and sales of investments, excluding short-term securities for the six months ended October 31, 2012, were as follows:

 

      Purchases      Sales  

MUA

   $ 67,162,440       $ 60,392,449   

MEN

   $ 42,382,993       $ 38,565,805   

MHD

   $ 38,672,684       $ 39,043,680   

MUH

   $ 31,337,187       $ 26,477,152   

MUS

   $ 64.372.786       $ 57,356,216   

MUI

   $ 111,271,005       $ 100,232,948   

MVT

   $ 46,751,503       $ 51,604,957   
 

 

                
68    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Notes to Financial Statements (continued)     

 

5. Income Tax Information:

As of April 30, 2012, 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      MUS      MUI      MVT  

2013

   $ 3,378,868                                   

2014

     3,072,949                                   

2015

     5,065,527                                   

2016

     901,327       $ 2,508,309       $ 166,265               $     4,202,338   

2017

     3,645,754             3,540,378         5,373,343                   

2018

     396,366         1,225,298             6,614,798       $      560,259           

2019

         2,194,154         732,655                           

No expiration date1

             1,798,076         654,703                 795,838   
  

 

 

 

Total

   $ 18,654,945       $ 9,804,716       $ 12,809,109       $ 560,259       $ 4,998,176   
  

 

 

 

 

1   

Must be utilized prior to losses subject to expiration.

As of October 31, 2012, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

 

      MUA     MEN     MHD     MUH     MUS     MUI     MVT  

Tax cost

   $ 459,882,249      $ 449,304,078      $ 298,126,842      $ 214,100,064      $ 253,829,463      $ 834,116,726      $ 421,706,842   
  

 

 

 

Gross unrealized appreciation

   $ 57,669,846      $ 59,593,987      $ 42,996,725      $ 32,280,596      $ 30,381,878      $ 86,164,711      $ 65,426,144   

Gross unrealized depreciation

     (20,249,184     (890,801     (2,515,706     (1,043,434     (357,660     (814,521     (4,067,731
  

 

 

 

Net unrealized appreciation

   $ 37,420,662      $ 58,703,186      $ 40,481,019      $ 31,237,162      $ 30,024,218      $ 85,350,190      $ 61,358,413   
  

 

 

 

 

6. Concentration, Market and Credit Risk:

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.

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.

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.

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, 2012, MHD, MUH and MVT invested a significant port-ion of its assets in securities in the health sector. MUA invested a significant portion of its assets in securities in the health and transportation sectors. MEN invested a significant portion of its assets in securities in the county/city/special district/school district, transportation and state sectors. MUS invested a significant portion of its assets in securities in the county/city/special district/school district and transportation sectors. MUI invested a significant portion of its assets in securities in the county/city/special district/school district sector. Changes in economic conditions affecting the county/city/special district/school district, health, transportation and state sectors would have a greater impact on the Funds and could affect the value, income and/or liquidity of positions in such securities.

7. 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 outstanding is $0.10. The par value for each Fund’s 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, 2012
    

Year Ended

April 30, 2012

 

MEN

     24,868         12,832   

MHD

     29,043         56,498   

MUH

     20,802         24,312   

MUS

     21,826         17,824   

MUI

     108,889         45,759   

MVT.

     54,665         139,364   
 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    69


Table of Contents
Notes to Financial Statements (continued)     

 

Shares issued and outstanding remained constant for MUA for the six months ended October 31, 2012 and the year ended April 30, 2012.

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 Funds. The 1940 Act prohibits the declaration of any dividend on the Funds’ Common Shares or the repurchase of the 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 and MUI (collectively, the “VRDP Funds”), have 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. The VRDP Funds are 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 VRDP Funds are required to segregate liquid assets to fund the redemption. The VRDP Shares are subject to certain restrictions on transfer.

The VRDP Shares outstanding for the six months ended October 31, 2012 were as follows:

 

      Issue
Date
     Shares
Issued
     Aggregate
Principal
     Maturity
Date
 

MEN

     5/19/11         1,425       $ 142,500,000         6/01/41   

MUI

     3/17/11         2,871       $ 287,100,000         4/01/41   

The VRDP Funds 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 MEN and its liquidity provider is for a three-year term and is scheduled to expire on July 9, 2015 unless renewed or terminated in advance. The fee agreement between MUI and its liquidity provider is for a two year term and is scheduled to expire on December 28, 2012 unless renewed or terminated in advance.

In the event the fee agreement is not renewed or is terminated in advance, and the VRDP Funds do 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 VRDP Funds are 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 VRDP Funds are required to begin to segregate liquid assets with the VRDP Funds’ custodians to fund the redemption. There is no assurance the VRDP Funds will replace such redeemed VRDP Shares with any other preferred shares or other form of leverage.

Each VRDP Fund is required to redeem its VRDP Shares on the maturity date, unless earlier redeemed or repurchased. Six months prior to the maturity date, each VRDP Fund is required to begin to segregate liquid assets with the Fund’s custodian to fund the redemption. In addition, the VRDP Funds are 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 the VRDP Funds. 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, the VRDP Funds 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. In May 2012, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of October 31, 2012, 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.

The short-term ratings on the VRDP Shares are directly related to the short-term ratings of the liquidity provider for such VRDP Shares. Changes in the credit quality of the liquidity provider could cause a change in the short-term credit ratings of the VRDP Shares as rated by Moody’s, Fitch and/or S&P. A change in the short-term credit rating of the liquidity provider or the VRDP Shares may adversely affect the dividend rate paid

 

 

                
70    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Notes to Financial Statements (continued)     

 

on such shares, although the dividend rate paid on the VRDP Shares is not directly related based upon either short-term rating. As of October 31, 2012, the short-term ratings of the liquidity provider and the VRDP Shares for MUI are P-1 and F-1 as rated by Moody’s and Fitch, respectively, which is within the two highest rating categories. The liquidity provider may be terminated prior to the scheduled termination date if the liquidity provider fails to maintain short-term debt ratings in one of the two highest rating categories. The VRDP Shares issued by MEN do not have a short-term credit rating.

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.

On June 20, 2012, MEN announced a special rate period for an approximate three-year term beginning on June 21, 2012 and 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; however, 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 the 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 VRDP Shares are subject to certain transfer restrictions during the special rate period. The short-term ratings were withdrawn by Moody’s, Fitch and/or S&P. 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 VRDP Funds redeem 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 the VRDP Funds 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.

The VRDP Funds 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. All of MEN and MUI’s VRDP Shares that were tendered for remarketing during the six months ended October 31, 2012 were successfully remarketed.

The annualized dividend rates for the VRDP Shares for the six months ended October 31, 2012 were as follows:

 

MEN

     0.82%   

MUI

     0.34%   

VRDP Shares issued and outstanding for MEN and MUI remained constant for the six months ended October 31, 2012. During the year ended April 30, 2012, MEN issued 1,425 VRDP Shares.

VMTP Shares

MHD, MUH, MUS 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.

The VMTP Shares outstanding for the six months ended October 31, 2012 were as follows:

 

      Issue
Date
     Shares
Issued
     Aggregate
Principal
     Term
Date
 

MHD

     12/16/11         837       $ 83,700,000         1/02/15   

MUH

     12/16/11         550       $ 55,000,000         1/02/15   

MUS

     12/16/11         870       $ 87,000,000         1/02/15   

MVT

     12/16/11         1,400       $ 140,000,000         1/02/15   

Each VMTP Fund is required to redeem its VMTP Shares on the term date, unless earlier redeemed or repurchased or unless extended. There is no assurance that the term of a Fund’s VMTP Shares will be extended 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 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 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 were assigned long-term ratings of Aaa from Moody’s and AAA from Fitch. In May 2012, Moody’s completed a review

 

 

                
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of its methodology for rating securities issued by registered closed-end funds. As of October 31, 2012, the VMTP Shares were assigned a long-term rating of Aa1 from Moody’s under its new rating methodology and 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, 2012 were as follows:

 

MHD

     1.18%   

MUH

     1.18%   

MUS

     1.18%   

MVT

     1.18%   

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 for MHD, MUH, MUS and MVT remained constant for the six months ended October 31. 2012. During the year ended April 30, 2012, the VMTP Shares issued were as follows:

 

MHD

     837   

MUH

     550   

MUS

     870   

MVT

     1,400   

AMPS

The AMPS were redeemable at the option of each Fund, in whole or in part, on any dividend payment date at their liquidation preference per share plus any accumulated and unpaid dividends whether or not declared. The AMPS were also subject to mandatory redemption at their liquidation preference plus any accumulated and unpaid dividends, whether or not declared, if certain requirements relating to the composition of the assets and liabilities of a Fund, as set forth in each Fund’s Articles Supplementary (the “Governing Instrument”) were not satisfied. For financial reporting purposes, the liquidation preference of AMPS approximates a Fund’s fair valuation of the AMPS.

From February 13, 2008 to the redemption dates listed below, the AMPS of the Funds failed to clear any of their auctions. As a result, the AMPS dividend rates were reset to the maximum applicable rate, which ranged from 0.35% to 1.94% for the year ended April 30, 2012. A failed auction was not an event of default for the Funds, but it had a negative impact on the liquidity of AMPS. A failed auction occurs when there are more sellers of a fund’s AMPS than buyers.

The Funds paid commissions of 0.15% on the aggregate principal amount of all shares that fail to clear their auctions and 0.25% on the aggregate

principal amount of all shares that successfully clear their auctions. Certain broker dealers have individually agreed to reduce commissions for failed auctions. The commissions paid to these broker dealers are included in remarketing fees on Preferred Shares in the Statements of Operations.

As of October 31, 2012, there were no AMPS outstanding.

During the year ended April 30, 2012, MEN, MHD, MUH, MUS and MVT announced the following redemptions of AMPS at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date:

 

      Series     

Redemption

Date

    

Shares

Redeemed

    

Aggregate

Principal

 

MEN

     A28         6/04/11         1,525       $ 38,125,000   
     B28         6/21/11         1,525       $ 38,125,000   
     C7         5/31/11         1,525       $ 38,125,000   
       D7         6/10/11         1,128       $ 28,200,000   

MHD

     A         1/11/12         1,473       $ 36,825,000   
     B         1/06/12         1,473       $ 36,825,000   
       C         1/10/12         402       $ 10,050,000   

MUH

     A         1/11/12         1,101       $ 27,525,000   
       B         1/09/12         1,101       $ 27,525,000   

MUS

     A         1/06/12         1,740       $ 43,500,000   
       B         1/10/12         1,740       $ 43,500,000   

MVT

     A         1/12/12         1,440       $ 36,000,000   
     B         1/19/12         1,440       $ 36,000,000   
     C         1/12/12         1,440       $ 36,000,000   
       D         1/10/12         1,280       $ 32,000,000   

The Funds financed the AMPS redemptions with the proceeds received from the issuance of VRDP Shares or VMTP Shares as follows:

 

MEN

   $ 142,500,000   

MHD

   $ 83,700,000   

MUH

   $ 55,000,000   

MUS

   $ 87,000,000   

MVT

   $ 140,000,000   

8. 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:

Each Fund paid a net investment income dividend in the following amounts per share on December 3, 2012 to Common Shareholders of record on November 15, 2012:

 

      Common Dividend
Per Share
 

MUA

   $ 0.0625   

MEN

   $ 0.0580   

MHD

   $ 0.0915   

MUH

   $ 0.0830   

MUS

   $ 0.0740   

MUI

   $ 0.0715   

MVT

   $ 0.0910   

Additionally, the Funds declared a net investment income dividend on December 4, 2012 payable to Common Shareholders of record on December 14, 2012 for the same amounts noted above.

 

 

                
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The dividends declared on VRDP or VMTP Shares for the period November 1, 2012 to November 30, 2012 were as follows:

 

      Series     

VRDP/VMTP

Dividends

Declared

 

MEN VRDP Shares

     W7       $ 142,383   

MHD VMTP Shares

     W7       $ 81,985   

MUH VMTP Shares

     W7       $ 53,873   

MUS VMTP Shares

     W7       $ 85,217   

MUI VRDP Shares

     W7       $ 68,480   

MVT VMTP Shares

     W7       $ 137,131   

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. MUI’s VMTP Shares were assigned long-term rating of Aa1 from Moody’s and AAA from Fitch.

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 the VMTP Shares will be recorded as a deferred charge and amortized over the three-year life of the VMTP Shares.

 

 

                
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Disclosure of Investment Advisory Agreements and Sub-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 on April 26, 2012 and May 22-23, 2012 to consider the approval of each Fund’s investment advisory agreement (each, an “Advisory Agreement”) with BlackRock Advisors, LLC (the “Manager”), each Fund’s investment advisor. The Board of each Fund also considered the approval of the sub-advisory agreement (each, a “Sub-Advisory Agreement”) among the Manager, BlackRock Investment Management, LLC (the “Sub-Advisor”), and such Fund. The Manager and the Sub-Advisor are referred to herein as “BlackRock.” The Advisory Agreements and the Sub-Advisory Agreements are referred to herein as the “Agreements.”

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 the 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 Agreements

Pursuant to the 1940 Act, the Boards are required to consider the continuation of the Agreements on an annual basis. The Boards have four quarterly meetings per year, each extending over two days, and a fifth meeting to consider specific information surrounding the consideration of renewing the 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 investment management, administrative and shareholder services, oversight of fund accounting and custody, marketing services, risk oversight, compliance and assistance in meeting applicable legal and regulatory requirements.

The Boards, acting directly and through their respective committees, considered 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 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-, three- and

five-year periods, as applicable, against peer funds, and applicable benchmarks, if any, as well as senior management’s and portfolio managers’ analyses 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 and fund accounting; (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 objectives, policies and restrictions; (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 ratios 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. In addition, the Board requested, to the extent reasonably possible, an analysis of the risk and return relative to selected funds in peer groups. BlackRock provides information to the Board in response to specific questions. These questions covered issues such as profitability, including the impact of BlackRock’s upfront costs in sponsoring closed-end funds and the relative profitability of closed-end and open end funds, investment performance and management fee levels. The Board considered the importance of: (i) managing fixed income assets with a view toward preservation of capital; (ii) portfolio managers’ investments in the funds they manage; (iii) BlackRock’s controls surrounding the coding of quantitative investment models; and (iv) BlackRock’s oversight of relationships with third party service providers.

The Board of each of MUI, MEN, MHD, MUH, MUS 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 MUI, MEN, MHD, MUH, MUS and MVT has redeemed 100% of its outstanding AMPS.

Board Considerations in Approving the Agreements

The Approval Process: Prior to the April 26, 2012 meeting, the Boards requested and received materials specifically relating to the Agreements. Each Board is engaged in a process with its independent legal counsel and BlackRock to review periodically the nature and scope of the information provided to better assist its deliberations. The materials provided in connection with the April meeting included (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on Fund

 

 

                
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fees and expenses and the investment performance of each Fund as compared with a peer group of funds as determined by Lipper and a customized peer group selected by BlackRock (collectively, “Peers”); (b) information on the profitability of the Agreements to BlackRock and a discussion of fall-out benefits to BlackRock and its affiliates; (c) a general analysis provided by BlackRock concerning investment management fees (a combination of the advisory fee and the administration fee, if any) charged to other clients, such as institutional clients and open-end funds, under similar investment mandates, as applicable; (d) the existence, impact and sharing of potential economies of scale; (e) a summary of aggregate amounts paid by each Fund to BlackRock and (f) if applicable, a comparison of management fees to similar BlackRock closed-end funds, as classified by Lipper.

At an in-person meeting held on April 26, 2012, the Boards reviewed materials relating to their consideration of the Agreements. As a result of the discussions that occurred during the April 26, 2012 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 May 22-23, 2012 Board meeting.

At an in-person meeting held on May 22-23, 2012, each Board, including all the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and its Fund, and the Sub-Advisory Agreement among the Manager, the Sub-Advisor, and its Fund, each for a one-year term ending June 30, 2013. In approving the continuation of the 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) economies of scale; (e) fall-out benefits to BlackRock as a result of its relationship with the Funds; and (f) 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 controlling, 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, the Boards compared Fund performance to the performance of a comparable group of closed-end funds and/or the performance of a relevant benchmark, if any. The Boards met with BlackRock’s senior management personnel responsible for investment operations,

including the senior investment officers. Each Board also reviewed the materials provided by its Fund’s portfolio management team discussing Fund performance and the Fund’s investment objective, strategies and outlook.

The Boards considered, among other factors, the number, education and experience of BlackRock’s investment personnel generally and their Funds’ portfolio management teams, investments by portfolio managers in the funds they manage, BlackRock’s portfolio trading capabilities, BlackRock’s use of technology, BlackRock’s commitment to compliance, BlackRock’s credit analysis capabilities, BlackRock’s risk analysis and oversight capabilities and BlackRock’s approach to training and retaining portfolio managers and other research, advisory and management personnel. The Boards engaged in a review of BlackRock’s compensation structure with respect to their Funds’ portfolio management teams 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 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) assisting with 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; and (viii) 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, accounting, 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: The Boards, including the Independent Board Members, also reviewed and considered the performance history of their Funds. In preparation for the April 26, 2012 meeting, the Boards worked with its independent legal counsel, BlackRock and Lipper to develop a template for, and was 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 net asset value (NAV), of its Fund as compared to funds in that Fund’s applicable Lipper category and a 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 their methodology. Each Board and such

 

 

                
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Board’s Performance Oversight Committee regularly review, and meet with Fund management to discuss, the performance of the Fund throughout the year.

The Board of each of MUI, MEN, MHD, MUS and MVT noted that, in general, its respective Fund performed better than its Peers in that the Fund’s performance was at or above the median of its Customized Lipper Peer Group Composite in each of the one-, three- and five-year periods reported. Based on its discussions with BlackRock and the Board’s review of its respective Fund’s investment performance compared to its Lipper Peer Group, the methodology used by Lipper to select peer funds, and other relevant information provided by BlackRock, the Board of each of MUI, MEN, MHD, MUS and MVT noted that its respective Fund’s investment performance as compared to its Customized Lipper Peer Group Composite provided a more meaningful comparison of the Fund’s relative performance. The composite performance metric is a measurement blend of total return and yield.

The Board of MUA noted that, in general, MUA performed better than its Peers in that MUA’s performance was at or above the median of its Customized Lipper Peer Group Composite in the three- and five-year periods reported, although performance for the one-year period reported was below the median. The Board and BlackRock reviewed and discussed the reasons for MUA’s underperformance during the one-year period and will monitor closely MUA’s performance in the coming year. Based on its discussions with BlackRock and the Board’s review of MUA’s investment performance compared to its Lipper Peer Group, the methodology used by Lipper to select peer funds, and other relevant information provided by BlackRock, the Board noted that MUA’s investment performance as compared to its Customized Lipper Peer Group Composite provided a more meaningful comparison of MUA’s relative performance. The composite performance metric is a measurement blend of total return and yield.

The Board of MUH noted that, in general, MUH performed better than its Peers in that MUH’s performance was at or above the median of its Customized Lipper Peer Group Composite in two of the one-, three- and five-year periods reported. Based on its discussions with BlackRock and the Board’s review of MUH’s investment performance compared to its Lipper Peer Group, the methodology used by Lipper to select peer funds, and other relevant information provided by BlackRock, the Board noted that MUH’s investment performance as compared to its Customized Lipper Peer Group Composite provided a more meaningful comparison of MUH’s relative performance. The composite performance metric is a measurement 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. It also compared the Fund’s total expense ratio, as well as actual management fee rate, to those of other funds in its Lipper category. Each Board considered the services provided and the fees charged by BlackRock to other types of clients with similar investment mandates, including separately managed institutional accounts.

The Boards received and reviewed statements relating to BlackRock’s financial condition and profitability with respect to the services it provided the Funds. The Boards were also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to the Funds. The Boards reviewed BlackRock’s profitability with respect to the Funds and other funds the Boards currently oversee for the year ended December 31, 2011 compared to available aggregate profitability data provided for the years ended December 31, 2010, and December 31, 2009. The Boards reviewed BlackRock’s profitability with respect to 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, expense allocations and business mix, and the difficulty of comparing profitability as a result of those factors.

The Boards noted that, in general, individual fund or product line profitability of other advisors is not publicly available. The Boards considered BlackRock’s overall operating margin, in general, compared to the operating margin for leading investment management firms whose operations include advising closed-end funds, among other product types. In addition, the Boards considered, among other things, certain third party data comparing BlackRock’s operating margin with that of 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, the Boards considered the cost of the services provided to the Funds by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management of the Funds and the other funds advised by BlackRock and its affiliates. As part of its analysis, the Boards reviewed BlackRock’s methodology in allocating its costs to the management of the Funds. The Boards also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the Boards.

The Board of each Fund noted that its Fund’s contractual management fee ratio (a combination of the advisory fee and the administration fee, if any) was lower than or equal to the median contractual management fee ratio paid by the Fund’s Peers, in each case before taking into account any expense reimbursements or fee waivers.

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 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.

 

 

                
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Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded)     

 

Based on the Board’s review and consideration of the issue, the Board 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. The Board noted that only one closed-end fund in the Fund Complex has breakpoints in its advisory fee structure.

E. Other Factors Deemed Relevant by the Board Members: The Boards, 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 the Funds, 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 Funds, 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. Each Board 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 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.

The Boards 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 the Fund’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.

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, 2013, and the Sub-Advisory Agreement among the Manager, the Sub-Advisor, and its Fund for a one-year term ending June 30, 2013. Based upon its evaluation of all of the aforementioned factors in their totality, each Board, including the Independent Board Members, was satisfied that the terms of the Agreements were fair and reasonable and in the best interest of the Fund and its shareholders. In arriving at its decision to approve the Agreements, 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 these determinations. 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, 2012    77


Table of Contents
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

Anne Ackerley, Vice President

Brendan Kyne, Vice President

Robert W. Crothers, Vice President1

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Brian Kindelan, Chief Compliance Officer and Anti-Money Laundering Officer

Janey Ahn, Secretary2

 

1   

Effective May 22, 2012, Robert W. Crothers became Vice President of the Funds.

 

2   

Effective May 22, 2012, Ira P. Shapiro resigned as Secretary of the Funds and Janey Ahn became Secretary of the Funds.

Investment Advisor

BlackRock Advisors, LLC

Wilmington, DE 19809

Sub-Advisor

BlackRock Investment Management, LLC

Princeton, NJ 08540

Custodians

The Bank of New York Mellon3

New York, NY 10286

State Street Bank and Trust Company4

Boston, MA 02110

Transfer Agent

Computershare Trust Company, N.A.

Canton, MA 02021

VRDP Tender and Paying Agent and VMTP Redemption and Paying Agent

The Bank of New York Mellon

New York, NY 10289

VRDP Remarketing Agents

Citigroup Global Markets Inc.5

New York, NY 10179

J.P. Morgan Securities LLC6

New York, NY 10179

VRDP Liquidity Providers

Citibank, N.A.5

New York, NY 10179

J.P. Morgan Chase Bank, N.A.6

New York, NY 10179

Accounting Agent

State Street Bank and Trust Company

Boston, MA 02110

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02116

Legal Counsel

Skadden, Arps, Slate, Meagher & Flom LLP

New York, NY 10036

Address of the Funds

100 Bellevue Parkway

Wilmington, DE 19809

 

3   

For MUA, MHD, MUH, MUS and MVT.

 

4   

For MEN and MUI.

 

5   

For MEN.

 

6   

For MUI.

 

 

                
78    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Additional Information     

 

Proxy Results

The Annual Meeting of Shareholders was held on July 27, 2012 for shareholders of record on May 31, 2012 to elect director nominees for each Fund. There were no broker non-votes with regard to any of the Funds.

Approved the Class II Directors as follows:

 

      Frank J. Fabozzi    James T. Flynn    Karen P. Robards
      Votes For   Votes
Withheld
   Abstain    Votes For   Votes
Withheld
   Abstain    Votes For   Votes
Withheld
  Abstain

MUA

   33,089,103   1,025,211    0    32,964,575   1,149,739    0    33,090,301   1,024,013   0

For the Fund listed above, Directors whose term of office continued after the Annual Meeting of Shareholders because they were not up for election are Paul L. Audet, Michael J. Castellano, Richard E. Cavanagh, Frank J. Fabozzi, Kathleen F. Feldstein, James T. Flynn, Henry Gabbay, Jerrold B. Harris, R. Glenn Hubbard and W. Carl Kester.

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

   26,872,913   709,506    0    26,835,561   746,858    0    26,847,201   735,218   0

MHD

   13,295,145   316,753    0    13,261,326   350,572    0    13,289,398   322,500   0

MUH

   10,546,729   207,580    0    10,560,944   193,365    0    10,561,137   193,172   0

MUS

   11,821,709   796,315    0    11,755,699   862,325    0    11,756,332   861,692   0

MUI

   36,367,742   692,848    0    36,303,050   757,540    0    36,388,257   672,333   0

MVT

   19,520,869   510,132    0    19,524,745   506,256    0    19,500,033   530,968   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

            1,025              0    0    26,814,906   767,513    0    26,808,450   773,969   0

MHD

               837              0    0    13,264,657   347,241    0    13,247,692   364,206   0

MUH

               550              0    0    10,542,326   211,983    0    10,552,432   201,877   0

MUS

               870              0    0    11,751,703   866,321    0    11,745,952   872,072   0

MUI

            2,215          656    0    36,230,570   830,020    0    36,298,234   762,356   0

MVT

            1,400              0    0    19,456,640   574,361    0    19,466,942   564,059   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

   26,871,358   711,061    0    26,827,662   754,757    0    26,829,296   753,123   0

MHD

   13,290,485   321,413    0    13,247,560   364,338    0    13,227,791   384,107   0

MUH

   10,572,512   181,797    0    10,535,375   218,934    0    10,570,947   183,362   0

MUS

   11,795,155   822,869    0    11,748,068   869,956    0    11,819,565   798,459   0

MUI

   36,304,882   755,708    0    36,345,474   715,116    0    36,317,473   743,117   0

MVT

   19,525,004   505,997    0    19,469,088   561,913    0    19,470,583   560,418   0
     W. Carl Kester1    Karen P. Robards     

 

   Votes For   Votes
Withheld
   Abstain    Votes For   Votes
Withheld
  Abstain             

MEN

            1,025              0    0    26,885,165   697,254   0       

MHD

               837              0    0    13,225,526   386,372   0       

MUH

               550              0    0    10,552,216   202,093   0       

MUS

               870              0    0    11,822,718   795,306   0       

MUI

            2,215          656    0    36,331,494   729,096   0       

MVT

            1,400              0    0    19,493,323   537,678   0             

 

  1   

Voted on by holders of Preferred Shares only.

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    79


Table of Contents
Additional Information (continued)     

 

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 dividend 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 dividends 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.

 

 

                
80    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
Additional Information (continued)     

 

 

General Information

 

On June 10, 2010, the Manager announced that the directors of MUI had received a demand letter sent on behalf of certain of MUI Common Shareholders. The demand letter alleged that the Manager and MUI’s officers and Board of Directors (the “Board”) breached their fiduciary duties owed to MUI and its Common Shareholders by redeeming at par certain of MUI’s AMPS, and demanded that the Board take action to remedy those alleged breaches. In response to the demand letter, the Board established a Demand Review Committee (the “Committee”) of the Independent Directors to investigate the claims made in the demand letter with the assistance of independent counsel. Based upon its investigation, the Committee recommended that the Board reject the demand specified in the letter. After reviewing the findings of the Committee, the Board unanimously adopted the Committee’s recommendation and unanimously voted to reject the demand.

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 in 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 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’ websites 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) 441-7762.

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) 441-7762.

 

 

                
   SEMI-ANNUAL REPORT    OCTOBER 31, 2012    81


Table of Contents
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) 441-7762; (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) 441-7762 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. 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.

 

 

                
82    SEMI-ANNUAL REPORT    OCTOBER 31, 2012   


Table of Contents
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, 2012    83


Table of Contents

This report is transmitted to shareholders only. 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

 

#CEMUNI7-10/12-SAR    LOGO


Table of Contents
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


Table of Contents

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 MuniEnhanced Fund, Inc.
By:     

/s/ John M. Perlowski

     John M. Perlowski
     Chief Executive Officer (principal executive officer) of
     BlackRock MuniEnhanced Fund, Inc.

Date: January 3, 2013

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 MuniEnhanced Fund, Inc.

Date: January 3, 2013

 

By:     

/s/ Neal J. Andrews

     Neal J. Andrews
     Chief Financial Officer (principal financial officer) of
     BlackRock MuniEnhanced Fund, Inc.

Date: January 3, 2013

 

3