BlackRock MuniEnhanced Fund, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-05739

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: 01/31/2013

Item 1    –    Schedule of Investments

Schedule of Investments January 31, 2013 (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       $ 2,755,693   

4.75%, 1/01/25

      2,200         2,101,484   
     

 

 

  
        4,857,177   
     

 

 

  

Alaska – 1.2%

      

Alaska Housing Finance Corp., RB, General Housing, Series B (NPFGC),

      

5.25%, 12/01/30

      400         417,084   

Alaska Housing Finance Corp., Refunding RB, Series A,

      

4.13%, 12/01/37

      1,265         1,302,279   

Alaska Industrial Development & Export Authority, RB, Providence Health Services, Series A,

      

5.50%, 10/01/41

      990         1,161,102   

Borough of Matanuska-Susitna Alaska, RB, Goose Creek Correctional Center (AGC),

      

6.00%, 9/01/28

      1,200         1,487,412   
     

 

 

  
        4,367,877   
     

 

 

  

Arizona – 1.5%

      

Greater Arizona Development Authority, RB, Series B (NPFGC),

      

5.00%, 8/01/35

      1,300         1,399,203   

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

      

5.00%, 10/01/27

      3,250         3,716,992   

5.00%, 10/01/29

      400         454,728   
     

 

 

  
        5,570,923   
     

 

 

  

California – 22.4%

      

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

      

5.40%, 10/01/24

      10,185         11,401,700   

5.45%, 10/01/25(a)

      3,700         4,134,047   

Anaheim Public Financing Authority California, RB, Senior, Public Improvements Project, Series A (AGM),

      

6.00%, 9/01/24

      5,000         6,210,900   

Cabrillo Community College District, GO, CAB, Election of 2004, Series B (NPFGC),

      

4.86%, 8/01/37(b)

      2,400         740,256   

California Health Facilities Financing Authority, RB:

      

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

      550         633,859   

Sutter Health, Series B,

      

5.88%, 8/15/31

      1,200         1,453,740   

California State University, RB, Systemwide, Series A (NPFGC),

      

5.00%, 5/01/13(c)

      1,405         1,421,846   

California State University, Refunding RB, Systemwide, Series A (AGM),

      

5.00%, 11/01/37

      2,000         2,231,460   

California Statewide Communities Development Authority, RB, Series A,

      

5.00%, 4/01/42

      1,480         1,661,374   

City of Redding California, COP, Refunding, Series A (AGM),

      

5.00%, 6/01/30

      1,420         1,609,613   

City of San Jose California, Refunding ARB, Series A-1, AMT,

      

5.75%, 3/01/34

      850         986,204   

Los Angeles Community College District California, GO, Election of 2001, Series A (AGM),

      

5.00%, 8/01/32

      1,300         1,486,667   

Los Angeles Department of Water & Power, RB, Series C (NPFGC),

      

5.00%, 7/01/29

      5,160         5,458,970   

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

      

5.00%, 10/01/13

      2,570         2,651,957   

5.00%, 10/01/13

      1,480         1,527,197   

Orange County Sanitation District, COP:

      

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

      7,455         7,632,876   

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

      1,500         1,680,810   

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

      900         1,009,602   

Poway Unified School District, GO, Refunding, CAB, School Facilities Improvement Election of 2007,

      

4.63%, 8/01/36(b)

      3,750         1,279,050   

Rio Hondo Community College District California, GO, CAB, Election of 2004, Series C,

      

4.68%, 8/01/38(b)

      5,000         1,536,150   

San Diego Unified School District California, GO, CAB, Election of 2008, Series C,

      

4.73%, 7/01/38(b)

      1,600         487,376   

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

      

4.13%, 7/01/30

      5,000         2,453,350   

4.20%, 7/01/31

      1,280         595,341   

San Joaquin County Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A,

      

6.00%, 3/01/36

      2,175         2,714,531   

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

      

5.00%, 8/01/34

      700         796,474   

5.00%, 8/01/38

      600         675,540   

San Mateo County Community College District, GO, CAB, Election of 2001, Series C (NPFGC),

      

3.83%, 9/01/30(b)

      12,740         6,538,295   

State of California, GO, Various Purpose Improvement,

      

5.00%, 4/01/42

      1,000         1,133,480   

State of California, GO, Refunding:

      

5.00%, 2/01/38

      2,500         2,839,025   

Various Purpose,

      

5.00%, 10/01/41

      1,000         1,127,990   

 

    BLACKROCK MUNIENHANCED FUND, INC.    JANUARY 31, 2013   1

Schedule of Investments (continued)    BlackRock MuniEnhanced Fund, Inc. (MEN)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

California (concluded)

      

Walnut Valley Unified School District, GO, CAB, Election of 2007, Series B,

      

4.73%, 8/01/36(b)

    $ 5,500       $ 1,834,580   

West Basin Municipal Water District California, COP, Refunding, Series B (AGC),

      

5.00%, 8/01/30

      5,035         5,712,107   
     

 

 

  
        83,656,367   
     

 

 

  

Colorado – 0.6%

      

Regional Transportation District, COP, Refunding, Series A,

      

5.38%, 6/01/31

      2,000         2,284,340   
     

 

 

  

District of Columbia – 1.5%

      

District of Columbia, RB, Series B-1 (NPFGC),

      

5.00%, 2/01/31

      5,480         5,683,692   
     

 

 

  

Florida – 9.7%

      

Broward County Water & Sewer Utility Revenue, Refunding RB, Series A,

      

5.25%, 10/01/34

      850         983,951   

City of Jacksonville Transit Revenue, Refunding RB, Series A,

      

5.00%, 10/01/30

      280         327,704   

Collier County School Board, COP (AGM),

      

5.00%, 2/15/23

      3,000         3,342,690   

County of Duval Florida, COP, Master Lease Program (AGM),

      

5.00%, 7/01/33

      2,625         2,930,944   

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

      

5.63%, 10/01/26

      960         1,125,130   

5.38%, 10/01/32

      3,160         3,550,608   

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1,

      

5.75%, 7/01/33

      1,400         1,637,636   

County of Miami-Dade Florida, Refunding RB:

      

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

      9,900         10,446,480   

Series B, 5.00%, 10/01/37

      710         795,434   

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

      

5.13%, 6/01/27

      2,000         2,314,420   

5.38%, 10/01/29

      1,050         1,233,771   

Highlands County Health Facilities Authority, RB, Adventist Health System/Sunbelt, Series B,

      

6.00%, 11/15/37

      1,450         1,705,577   

Hillsborough County Aviation Authority Florida, RB, Series A, AMT (AGC),

      

5.38%, 10/01/33

      4,050         4,409,923   

Sarasota County Public Hospital District, RB, Sarasota Memorial Hospital Project, Series A,

      

5.63%, 7/01/39

      275         304,815   

South Florida Water Management District, COP (AGC),

      

5.00%, 10/01/22

      1,000         1,134,660   
     

 

 

  
        36,243,743   
     

 

 

  

Georgia – 8.1%

      

Burke County Development Authority, Refunding RB, Oglethorpe Power-Vogtle Project, Series C,

      

5.70%, 1/01/43

      1,150         1,251,522   

City of Atlanta Georgia Department of Aviation, Refunding ARB, General, Series B (AGM),

      

5.25%, 1/01/33

      17,355         18,320,285   

Municipal Electric Authority of Georgia, Refunding RB, Series EE (AMBAC),

      

7.00%, 1/01/25

      7,475         10,759,814   
        30,331,621   

Illinois – 17.9%

      

Chicago Illinois Board of Education, GO, Unlimited Tax,

      

5.50%, 12/01/39

      2,375         2,776,399   

Chicago Illinois Board of Education, GO, Refunding, Chicago School Reform Board (NPFGC),

      

5.50%, 12/01/26

      725         899,225   

Chicago Illinois Transit Authority, RB, Sales Tax Receipts Revenue,

      

5.25%, 12/01/36

      595         686,701   

City of Chicago Illinois, GARB:

      

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

      5,110         6,018,711   

O’Hare International Airport, Third Lien, Series B-2 AMT (AGM),

      

5.75%, 1/01/23

      5,670         5,928,439   

Third Lien, Series B-2 AMT (Syncora),

      

6.00%, 1/01/29

      2,500         2,601,775   

City of Chicago Illinois, GO, Unlimited Tax, Harbor Facilities Revenues, Series C,

      

5.25%, 1/01/40

      550         627,462   

City of Chicago Illinois, Board of Education, GO, Refunding, Series A (AGM),

      

5.50%, 12/01/31

      2,875         3,785,512   

Cook County Forest Preserve District, GO, Series C,

      

5.00%, 12/15/37

      330         378,913   

Cook County Forest Preserve District, GO, Refunding, Limited Tax Project, Series B,

      

5.00%, 12/15/37

      285         325,997   

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

      

5.75%, 8/15/34

      650         772,980   

6.00%, 8/15/41

      1,000         1,200,300   

Illinois HDA, RB, Liberty Arms Senior Apartments, Series D, AMT (AMBAC),

      

4.88%, 7/01/47

      2,180         2,209,910   

Illinois Municipal Electric Agency, RB, Series A (NPFGC),

      

5.25%, 2/01/35

      1,000         1,111,760   

 

2   BLACKROCK MUNIENHANCED FUND, INC.    JANUARY 31, 2013    

Schedule of Investments (continued)    BlackRock MuniEnhanced Fund, Inc. (MEN)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

Illinois (concluded)

      

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

      

5.50%, 6/15/30

    $ 17,620       $ 19,321,387   

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

      

3.73%, 12/15/26

      5,000         2,994,500   

4.46%, 12/15/33

      9,950         3,962,587   

Metropolitan Pier & Exposition Authority, Refunding RB, CAB, McCormick Place Expansion Project, Series B (AGM),

      

4.85%, 6/15/44(b)

      3,450         767,177   

Railsplitter Tobacco Settlement Authority, RB,

      

6.00%, 6/01/28

      675         810,614   

Regional Transportation Authority, RB, Series A (AMBAC),

      

7.20%, 11/01/20

      8,070         9,729,676   
     

 

 

  
        66,910,025   
     

 

 

  

Indiana – 1.2%

      

Indiana Finance Authority, RB, First Lien, CWA Authority Project, Series A,

      

5.25%, 10/01/38

      1,100         1,274,867   

Indiana Municipal Power Agency, RB, Series B,

      

5.75%, 1/01/34

      400         416,764   

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

      

5.25%, 1/01/29

      600         678,576   

5.50%, 1/01/38

      1,825         2,071,667   
     

 

 

  
        4,441,874   
     

 

 

  

Iowa – 4.1%

      

Iowa Finance Authority, RB, Series A (AGC),

      

5.63%, 8/15/37

      5,725         6,527,301   

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

      

5.60%, 12/01/26

      3,670         4,202,187   

5.70%, 12/01/27

      1,670         1,915,640   

5.80%, 12/01/29

      1,125         1,285,414   

5.85%, 12/01/30

      1,170         1,334,982   
     

 

 

  
        15,265,524   
     

 

 

  

Louisiana – 1.3%

      

Louisiana Public Facilities Authority, Refunding RB, Christus Health, Series B (AGC),

      

6.50%, 7/01/30

      1,250         1,483,300   

Parish of St. John the Baptist Louisiana, RB, Marathon Oil Corp., Series A,

      

5.13%, 6/01/37

      3,150         3,365,775   
     

 

 

  
        4,849,075   
     

 

 

  

Maine – 0.1%

      

Maine State Housing Authority, Refunding RB, Series B-1, AMT,

      

4.00%, 11/15/27

      335         349,720   

Massachusetts – 1.4%

      

Massachusetts HFA, RB, S/F Housing, Series 128, AMT (AGM),

      

4.88%, 12/01/38(d)

      475         489,611   

Massachusetts HFA, Refunding RB, AMT:

      

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

      485         488,662   

Series C, 5.35%, 12/01/42

      1,150         1,240,712   

Massachusetts Water Resources Authority, Refunding RB, General, Series A (NPFGC),

      

5.00%, 8/01/34

      2,700         3,100,329   
     

 

 

  
        5,319,314   
     

 

 

  

Michigan – 2.9%

      

City of Detroit Michigan, RB, Water Supply System, Second Lien (AGM):

      

6.25%, 7/01/36

      400         466,716   

7.00%, 7/01/36

      200         242,342   

City of Detroit Michigan Sewage Disposal System Revenue, Refunding RB:

      

Second Lien, Series E (BHAC), 5.75%, 7/01/31

      2,500         2,885,875   

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

      500         624,795   

Lansing Board of Water & Light Utilities System, RB, Series A,

      

5.50%, 7/01/41

      1,700         2,014,007   

Michigan State Building Authority, Refunding RB, Facilities Program:

      

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

      145         168,551   

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

      700         806,232   

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

      900         1,042,884   

Michigan State HDA, RB, Series C, AMT,

      

5.50%, 12/01/28

      1,040         1,126,559   

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

      

5.50%, 6/01/30

      1,300         1,315,106   
     

 

 

  
        10,693,067   
     

 

 

  

Minnesota – 0.8%

      

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC),

      

6.50%, 11/15/38

      2,500         3,070,525   
     

 

 

  

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         841,587   
     

 

 

  

 

    BLACKROCK MUNIENHANCED FUND, INC.    JANUARY 31, 2013   3

Schedule of Investments (continued)    BlackRock MuniEnhanced Fund, Inc. (MEN)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

Nebraska – 0.2%

      

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

      

5.25%, 9/01/37

    $ 750       $ 847,688   

Nevada – 3.0%

      

City of Carson City Nevada, RB, Carson-Tahoe Hospital Project, Series A (Radian),

      

5.50%, 9/01/13(c)

      1,250         1,287,425   

City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center,

      

6.00%, 4/01/34

      850         1,000,399   

County of Clark Nevada, ARB:

      

Las Vegas-McCarran International Airport, Series A (AGC),

      

5.25%, 7/01/39

      3,800         4,277,318   

Subordinate Lien, Series A-2 (NPFGC),

      

5.00%, 7/01/30

      1,000         1,046,060   

Subordinate Lien, Series A-2 (NPFGC),

      

5.00%, 7/01/36

      3,200         3,351,520   

County of Clark Nevada, RB, Southwest Gas Corp. Project, Series A, AMT (NPFGC),

      

4.75%, 9/01/36

      75         77,567   
     

 

 

  
        11,040,289   
     

 

 

  

New Jersey – 6.0%

      

New Jersey EDA, RB:

      

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

      600         642,966   

Cigarette Tax (Radian),

      

5.75%, 6/15/14(c)

      305         327,884   

Motor Vehicle Surcharge, Series A (NPFGC),

      

5.25%, 7/01/31

      3,125         3,301,531   

Motor Vehicle Surcharge, Series A (NPFGC),

      

5.25%, 7/01/33

      7,800         8,240,622   

School Facilities Construction, Series Z (AGC),

      

6.00%, 12/15/34

      2,000         2,385,340   

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

      

5.50%, 12/01/26

      600         678,348   

5.75%, 12/01/27

      3,870         4,422,830   

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series A,

      

5.50%, 6/15/41

      2,000         2,324,260   
     

 

 

  
        22,323,781   
     

 

 

  

New York – 5.1%

      

Erie County Industrial Development Agency, RB, City School District of Buffalo Project, Series A (AGM),

      

5.75%, 5/01/28

      1,500         1,745,340   

Hudson New York Yards Infrastructure Corp., RB, Series A,

      

5.75%, 2/15/47

      700         835,317   

Metropolitan Transportation Authority, RB, Series C,

      

6.50%, 11/15/28

      4,000         5,089,840   

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

      

5.50%, 1/15/33

      1,600         1,869,840   

5.50%, 1/15/34

      2,750         3,185,710   

New York HFA, RB, Affordable Housing, Series B,

      

5.30%, 11/01/37

      2,500         2,643,825   

New York State Dormitory Authority, ERB, Series B,

      

5.75%, 3/15/36

      1,200         1,455,744   

New York State Thruway Authority, Refunding RB, Series I,

      

5.00%, 1/01/37

      2,095         2,376,777   
     

 

 

  
        19,202,393   
     

 

 

  

North Carolina – 0.2%

      

North Carolina Medical Care Commission, RB, Novant Health Obligation, Series A,

      

4.75%, 11/01/43

      750         802,598   
     

 

 

  

Ohio – 0.5%

      

County of Allen Ohio, Refunding RB, Hospital Facilities, Catholic Health Partners, Series A,

      

5.00%, 5/01/42

      750         839,460   

County of Lucas Ohio, Refunding RB, Promedica Healthcare, Series A,

      

6.50%, 11/15/37

      530         666,279   

Kent State University, RB, General Receipts, Series A,

      

5.00%, 5/01/37

      430         489,314   
     

 

 

  
        1,995,053   
     

 

 

  

Pennsylvania – 0.3%

      

Pennsylvania Turnpike Commission, RB, Subordinate, Special Motor License Fund,

      

6.00%, 12/01/36

      575         709,056   

Philadelphia School District, GO, Series E,

      

6.00%, 9/01/38

      400         466,108   
     

 

 

  
        1,175,164   
     

 

 

  

Puerto Rico – 3.1%

      

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

      

6.38%, 8/01/39

      3,200         3,600,064   

6.00%, 8/01/42

      2,275         2,503,114   

Puerto Rico Sales Tax Financing Corp., Refunding RB:

      

CAB, Series A (NPFGC), 5.60%, 8/01/41(b)

      11,000         2,280,520   

CAB, Series C,

      

5.56%, 8/01/38(b)

      8,000         1,975,840   

First Sub-Series C,

      

6.00%, 8/01/39

      1,180         1,313,836   
     

 

 

  
        11,673,374   
     

 

 

  

 

 

4   BLACKROCK MUNIENHANCED FUND, INC.    JANUARY 31, 2013    

Schedule of Investments (continued)    BlackRock MuniEnhanced Fund, Inc. (MEN)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

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       $ 2,625,327   
     

 

 

  

South Carolina – 1.3%

      

South Carolina Jobs-EDA, Refunding RB, Palmetto Health, Series A (AGM),

      

6.50%, 8/01/39

      115         140,935   

South Carolina State Public Service Authority, Refunding RB, Santee Cooper, Series A,

      

5.50%, 1/01/38

      1,000         1,157,470   

South Carolina Transportation Infrastructure Bank, RB, Series A,

      

5.25%, 10/01/40

      3,000         3,393,360   
     

 

 

  
        4,691,765   
     

 

 

  

Tennessee – 2.6%

      

Memphis Center City Revenue Finance Corp., RB, Subordinate, Pyramid & Pinch District, Series B (AGM),

      

5.25%, 11/01/30

      2,955         3,463,201   

Metropolitan Government of Nashville & Davidson County Health & Educational Facilities Board, Refunding RB, Vanderbilt University, Series B,

      

5.50%, 10/01/29

      5,000         6,048,800   
     

 

 

  
        9,512,001   
     

 

 

  

Texas – 12.9%

      

Bexar County, Refunding RB, Venue Project, Series 2013,

      

5.00%, 8/15/39

      1,420         1,573,232   

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

      

6.00%, 11/15/35

      2,100         2,559,312   

5.38%, 11/15/38

      1,350         1,578,798   

Dallas-Fort Worth International Airport Facilities Improvement Corp., RB, Series A (NPFGC),

      

5.50%, 11/01/33

      13,000         13,225,940   

Mansfield ISD Texas, GO, School Building (PSF-GTD),

      

5.00%, 2/15/33

      1,725         1,955,374   

Midland County Fresh Water Supply District No 1, RB, City of Midland Project, Series A,

      

4.48%, 9/15/36(b)

      2,130         747,204   

North Texas Tollway Authority, Refunding RB, First Tier:

      

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

      1,600         1,839,936   

Series A, 6.00%, 1/01/28

      2,795         3,314,646   

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

      3,800         4,294,380   

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

      4,015         4,595,529   

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

      

4.58%, 9/15/35

      6,765         2,426,809   

4.66%, 9/15/36

      11,525         3,882,657   

4.72%, 9/15/37

      8,245         2,616,303   

Texas Municipal Gas Acquisition & Supply Corp. III, RB, Series 2012:

      

5.00%, 12/15/28

      1,070         1,170,313   

5.00%, 12/15/29

      1,190         1,298,492   

Texas Transportation Commission, Refunding RB, Central Texas Turnpike System, First Tier, Series A,

      

4.00%, 8/15/38

      1,060         1,060,816   
     

 

 

  
        48,139,741   
     

 

 

  

Washington – 1.9%

      

Central Puget Sound Regional Transit Authority, RB, Series A,

      

5.00%, 11/01/36

      1,600         1,821,712   

Washington Health Care Facilities Authority, RB:

      

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

      270         298,906   

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

      900         981,297   

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

      625         696,700   

Washington Health Care Facilities Authority, Providence Health & Services, Refunding RB:

      

Series A, 5.00%, 10/01/42

      200         224,938   

Series D (AGM), 5.25%, 10/01/33

      2,800         3,090,584   
     

 

 

  
        7,114,137   
     

 

 

  

Wisconsin – 0.6%

      

Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Credit Group,

      

5.00%, 11/15/33

      1,375         1,559,387   

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health,

      

5.00%, 4/01/42

      480         539,434   
     

 

 

  
        2,098,821   
     

 

 

  

Total Municipal Bonds – 114.6%

         427,978,583   
     

 

 

  

 

    BLACKROCK MUNIENHANCED FUND, INC.    JANUARY 31, 2013   5

Schedule of Investments (continued)    BlackRock MuniEnhanced Fund, Inc. (MEN)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts(e)

    Par
(000)		      Value  

Arizona – 0.8%

      

Phoenix Arizona Civic Improvement Corp., RB, Junior Lien, Series A,

      

5.00%, 7/01/34

    $ 1,200       $ 1,400,016   

Salt River Project Agricultural Improvement & Power District, RB, Series A,

      

5.00%, 1/01/38

      1,500         1,706,685   
     

 

 

  
        3,106,701   
     

 

 

  

California – 2.0%

      

Los Angeles Community College District California, GO, Election of 2001, Series A (AGM),

      

5.00%, 8/01/32

      2,500         2,858,975   

San Diego Community College District California, GO, Election of 2002,

      

5.25%, 8/01/33

      404         490,866   

San Diego County Water Authority, COP, Refunding, Series A (AGM),

      

5.00%, 5/01/33

      2,810         3,176,312   

University of California, RB, Series O,

      

5.75%, 5/15/34

      840         1,017,545   
     

 

 

  
        7,543,698   
     

 

 

  

Colorado – 0.3%

      

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

      

5.50%, 7/01/34(f)

      900         1,030,180   
     

 

 

  

District of Columbia – 1.7%

      

District of Columbia, RB, Series A,

      

5.50%, 12/01/30(f)

      1,005         1,227,058   

District of Columbia Water & Sewer Authority, Refunding RB, Series A,

      

6.00%, 10/01/35(f)

      1,770         2,148,804   

Metropolitan Washington Airports Authority, Refunding ARB, Series A, AMT,

      

5.00%, 10/01/30

      2,530         2,903,706   
     

 

 

  
        6,279,568   
     

 

 

  

Florida – 11.2%

      

City of Tallahassee Florida, RB (NPFGC):

      

5.00%, 10/01/32(f)

      4,000         4,486,120   

5.00%, 10/01/37

      7,500         8,256,675   

County of Miami-Dade Florida, RB:

      

5.00%, 10/01/39

      4,621         5,171,815   

Transit System, Sales Surtax,

      

5.00%, 7/01/22

      2,240         2,801,792   

County of Miami-Dade Florida, Refunding RB,

      

5.00%, 7/01/42

      2,240         2,240,000   

Florida State Board of Education, GO, Series D,

      

5.00%, 6/01/37(f)

      1,349         1,544,461   

Miami-Dade County School Board, COP, Refunding, Series B (AGC),

      

5.00%, 5/01/33

      10,000         11,170,700   

Orange County School Board, COP, Series A:

      

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

      3,544         4,099,887   

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

      2,000         2,220,320   
     

 

 

  
        41,991,770   
     

 

 

  

Illinois – 4.7%

      

City of Chicago Illinois, RB, Motor Fuel Tax Revenue (AGC),

      

5.00%, 1/01/38

      2,000         2,128,800   

City of Chicago Illinois, Refunding RB, Sales Tax Revenue, Series A,

      

5.00%, 1/01/41

      3,430         3,846,196   

Illinois State Toll Highway Authority, RB, Series B,

      

5.50%, 1/01/33

      1,880         2,139,979   

Metropolitan Pier & Exposition Authority, RB, McCormick Place Expansion Project, Series A,

      

5.00%, 6/15/42

      270         304,499   

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

      

4.25%, 6/15/42(f)

      4,000         4,168,560   

State of Illinois, RB, Build Illinois Bonds, Series B,

      

5.25%, 6/15/34(f)

      4,399         5,040,042   
     

 

 

  
        17,628,076   
     

 

 

  

Louisiana – 1.6%

      

State of Louisiana Gas & Fuels, RB, Series A (AGM),

      

5.00%, 5/01/36

      5,400         6,010,686   
     

 

 

  

Massachusetts – 3.1%

      

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

      

5.00%, 8/15/15(c)

      1,366         1,502,861   

5.00%, 8/15/30

      9,234         10,159,290   
     

 

 

  
        11,662,151   
     

 

 

  

Michigan – 1.3%

      

Michigan Finance Authority, Refunding RB, Trinity Health,

      

5.00%, 12/01/39

      4,300         4,789,727   
     

 

 

  

Nevada – 3.3%

      

City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center,

      

6.00%, 4/01/39(f)

      3,778         4,406,973   

Clark County Water Reclamation District, GO, Series B:

      

5.50%, 7/01/29

      4,499         5,495,600   

5.75%, 7/01/34

      1,829         2,253,661   
     

 

 

  
        12,156,234   
     

 

 

  

New Jersey – 0.6%

      

New Jersey Transportation Trust Fund Authority, RB, Series B,

      

5.25%, 6/15/36

      1,840         2,109,229   
     

 

 

  

 

 

6   BLACKROCK MUNIENHANCED FUND, INC.    JANUARY 31, 2013    

Schedule of Investments (continued)    BlackRock MuniEnhanced Fund, Inc. (MEN)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (e)

    Par
(000)		      Value  

New York – 1.6%

      

New York City Municipal Water Finance Authority, RB, Fiscal 2009, Series A,

      

5.75%, 6/15/40

    $ 1,260       $ 1,502,309   

Port Authority of New York & New Jersey, Refunding RB, Construction One Hundred Forty-Third, AMT,

      

5.00%, 10/01/30

      2,500         2,732,575   

Triborough Bridge & Tunnel Authority, RB, General, Series A-2,

      

5.25%, 11/15/34(f)

      1,300         1,550,211   
     

 

 

  
        5,785,095   
     

 

 

  

Ohio – 0.2%

      

State of Ohio, RB, Cleveland Clinic Health, Series B,

      

5.50%, 1/01/34

      580         664,825   
     

 

 

  

Puerto Rico – 0.7%

      

Puerto Rico Sales Tax Financing Corp., Refunding RB, Series C,

      

5.25%, 8/01/40

      2,380         2,589,059   
     

 

 

  

South Carolina – 2.4%

      

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

      

5.25%, 12/01/28

      3,120         3,451,375   

5.25%, 12/01/29

      2,765         3,052,975   

5.25%, 12/01/30

      1,010         1,108,657   

South Carolina State Public Service Authority, Refunding RB, Santee Cooper, Series A,

      

5.50%, 1/01/38(f)

      1,275         1,475,774   
     

 

 

  
        9,088,781   
     

 

 

  

South Dakota – 0.2%

      

South Dakota HDA, Refunding RB, Homeownership Mortgage Series K,

      

5.05%, 5/01/36

      623         637,916   
     

 

 

  

Texas – 1.2%

      

Clear Creek ISD Texas, GO, Refunding, School Building (PSF-GTD),

      

5.00%, 2/15/33

      2,200         2,489,190   

North East ISD Texas, GO, School Building, Series A (PSF-GTD),

      

5.00%, 8/01/37(f)

      1,600         1,833,488   
     

 

 

  
        4,322,678   
     

 

 

  

Utah – 1.5%

      

Utah Transit Authority, RB, Series A (AGM),

      

5.00%, 6/15/36

      5,000         5,739,450   
     

 

 

  

Virginia – 0.1%

      

Fairfax County IDA Virginia, Refunding RB, Health Care, Inova Health System, Series A,

      

5.50%, 5/15/35

      350         402,989   
     

 

 

  

Washington – 1.2%

      

Central Puget Sound Regional Transit Authority, RB, Series A (AGM),

      

5.00%, 11/01/32

      4,004         4,539,702   
     

 

 

  

Wisconsin – 0.4%

      

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

      

5.25%, 4/01/39(f)

      1,430         1,589,078   
     

 

 

  

Total Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts – 40.1%

         149,667,593   
     

 

 

  

Total Long-Term Investments (Cost – $516,302,512) – 154.7%

         577,646,176   
     

 

 

  

Short-Term Securities

    Shares         

Money Market Funds – 2.1%

      

FFI Institutional Tax-Exempt Fund, 0.01%(g)(h)

      7,664,721         7,664,721   
     

 

 

  

Total Short-Term Securities
(Cost – $7,664,721) – 2.1%

         7,664,721   
     

 

 

  

Total Investments (Cost – $523,967,233*) – 156.8%

        585,310,897   

Other Assets Less Liabilities – 0.7%

         2,493,906   

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable – (19.3)%

         (71,971,238 ) 

VRDP Shares, at Liquidation Value – (38.2)%

         (142,500,000 ) 
     

 

 

  

Net Assets Applicable to Common Shares – 100.0%

       $ 373,333,565   
     

 

 

  

 

* As of January 31, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost

    $ 452,474,009   
  

 

 

  

Gross unrealized appreciation

    $ 61,560,266   

Gross unrealized depreciation

      (661,398 ) 
  

 

 

  

Net unrealized appreciation

    $ 60,898,868   
  

 

 

  

 

    BLACKROCK MUNIENHANCED FUND, INC.    JANUARY 31, 2013   7

Schedule of Investments (continued)    BlackRock MuniEnhanced Fund, Inc. (MEN)
  

 

Notes to Schedule of Investments

 

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

 

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

 

(c) 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.

 

(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.

 

(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 $14,410,495.

 

(g) Investments in issuers considered to be an affiliate of the Fund during the period ended January 31, 2013, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate

    Shares Held at
April  30,
2012		      Net Activity     Shares Held at
January  31,
2013		      Income  

FFI Institutional Tax-Exempt Fund

      9,127,957         (1,463,236 )      7,664,721       $ 1,194   

 

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

Portfolio Abbreviations

 

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

 

8   BLACKROCK MUNIENHANCED FUND, INC.    JANUARY 31, 2013    

Schedule of Investments (concluded)    BlackRock MuniEnhanced Fund, Inc. (MEN)
  

 

•  

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 reporting purposes as follows:

 

  •  

Level 1 – unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Fund has the ability to access

 

  •  

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)

 

  •  

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 Fund’s most recent financial statements as contained in its semi-annual report.

The following table summarizes the Fund’s investments categorized in the disclosure hierarchy as of January 31, 2013:

 

      Level 1      Level 2      Level 3      Total  

Assets:

            

Investments:

            

Long-Term Investments1

     –       $ 577,646,176         –       $ 577,646,176   

Short-Term Securities

    $ 7,664,721         –         –         7,664,721   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 7,664,721       $ 577,646,176         –       $ 585,310,897   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

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 reporting purposes. As of January 31, 2013, such liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1      Level 2     Level 3      Total  

Liabilities:

           

Bank overdraft

      –       $ (122,276 )      –       $ (122,276 ) 

TOB trust certificates

      –         (71,938,020 )      –         (71,938,020 ) 

VRDP shares

      –         (142,500,000 )      –         (142,500,000 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  

Total

      –       $ (214,560,296 )      –       $ (214,560,296 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  

There were no transfers between levels during the period ended January 31, 2013.

 

    BLACKROCK MUNIENHANCED FUND, INC.    JANUARY 31, 2013   9

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

Certifications – Attached hereto

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

BlackRock MuniEnhanced Fund, Inc.

    
By:  

/s/ John M. Perlowski

    
  John M. Perlowski    
  Chief Executive Officer (principal executive officer) of BlackRock MuniEnhanced Fund, Inc.

Date: March 26, 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: March 26, 2013    
By:  

/s/ Neal J. Andrews

    
  Neal J. Andrews    
  Chief Financial Officer (principal financial officer) of BlackRock MuniEnhanced Fund, Inc.
Date: March 26, 2013