BLACKROCK MUNIVEST FUND, INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-05611

 

Name of Fund: BlackRock MuniVest Fund, Inc. (MVF)
Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniVest 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: 08/31/2015

Date of reporting period: 02/28/2015


Item 1 – Report to Stockholders


FEBRUARY 28, 2015

 

 

 

 

 

SEMI-ANNUAL REPORT (UNAUDITED)

 

    LOGO

BlackRock Municipal Bond Investment Trust (BIE)

BlackRock Municipal Bond Trust (BBK)

BlackRock Municipal Income Investment Quality Trust (BAF)

BlackRock Municipal Income Quality Trust (BYM)

BlackRock Municipal Income Trust II (BLE)

BlackRock MuniHoldings Investment Quality Fund (MFL)

BlackRock MuniVest Fund, Inc. (MVF)

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents     

 

      Page  

The Markets in Review

     3   

Semi-Annual Report:

  

Municipal Market Overview

     4   

The Benefits and Risks of Leveraging

     5   

Derivative Financial Instruments

     5   

Trust Summaries

     6   
Financial Statements:   

Schedules of Investments

     20   

Statements of Assets and Liabilities

     57   

Statements of Operations

     59   

Statements of Changes in Net Assets

     61   

Statements of Cash Flows

     63   

Financial Highlights

     65   

Notes to Financial Statements

     72   

Officers and Trustees

     82   

Additional Information

     83   

 

 

 

                
2    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


The Markets in Review

Dear Shareholder,

Market volatility, while remaining below the long-term average level, increased over the course of 2014 and into 2015, driven largely by higher valuations in risk assets (such as equities and high yield bonds), geopolitical risks, uneven global economic growth and uncertainty around policy moves from the world’s largest central banks. As the U.S. Federal Reserve (the “Fed”) gradually reduced its bond buying program (which ultimately ended in October 2014), U.S. interest rates surprisingly trended lower during the period.

The first half of 2014 was generally a strong period for most asset classes; however, volatility ticked up in the summer as geopolitical tensions intensified in Ukraine and the Middle East and investors feared that better U.S. economic indicators may compel the Fed to increase short-term interest rates sooner than previously anticipated. Global credit markets tightened as the U.S. dollar strengthened versus other currencies, ultimately putting a strain on investor flows, and financial markets broadly weakened in the third quarter.

Several themes dominated the markets in the fourth quarter that resulted in the strong performance of U.S. markets versus other areas of the world. Economic growth strengthened considerably in the United States while the broader global economy showed signs of slowing. The European Central Bank and the Bank of Japan took aggressive measures to stimulate growth while the Fed moved toward tighter policy, causing further strengthening in the U.S. dollar. Fixed income investors piled into U.S. Treasuries where yields remained persistently low, but were comparatively higher than yields on international sovereign debt, while equity investors favored the relative stability of U.S.-based companies amid rising global risks.

Oil prices, which had been gradually declining since mid-summer, plummeted in the fourth quarter due to a global supply-and-demand imbalance. Energy-related assets sold off sharply and emerging markets struggled as many of those economies rely heavily on oil exports. Conversely, the consumer sectors benefited from lower oil prices as savings at the gas pumps freed up discretionary income for other goods and services.

These trends shifted in early 2015. U.S. equities underperformed international markets given high valuations and the anticipation of a rate hike from the Fed. Oil prices showed signs of stabilizing as suppliers became more disciplined in their exploration and production efforts. Markets in Europe and Japan rebounded, driven largely by central bank policy accommodation and improving economic data.

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

Sincerely,

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of February 28, 2015  
    6-month     12-month  

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

    6.12     15.51

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

    5.70        5.63   

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

    (1.26     (0.03

Emerging market equities
(MSCI Emerging Markets
Index)

    (8.30     5.01   

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

Bill Index)

    0.01        0.03   

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

    4.14        8.66   

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

    2.25        5.05   

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

   
2.17
  
    6.47   

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

    (0.08     2.81   
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.    

 

                
   THIS PAGE NOT PART OF YOUR FUND REPORT       3


Municipal Market Overview     

 

For the Reporting Period Ended February 28, 2015      

Municipal Market Conditions

Municipal bonds generated strong performance throughout most of the period, thanks to a favorable supply-and-demand environment and declining interest rates. (Bond prices rise as rates fall.) Interest rates moved lower in 2014 even as the U.S. Federal Reserve (the “Fed”) scaled back its open-market bond purchases. This surprising development, coupled with reassurance from the Fed that short-term rates would remain low for a considerable amount of time, resulted in strong demand for fixed income investments in 2014, with municipal bonds being one of the stronger performing sectors for the year. This trend continued into the beginning of 2015 until rate volatility ultimately increased in February as a result of uneven U.S. economic data and widening central bank divergence, i.e., rate cuts outside the United States while the Fed poised for normalizing U.S. rates. During the 12 months ended February 28, 2015, municipal bonds garnered net inflows of approximately $34 billion (based on data from the Investment Company Institute).

For the same 12-month period, total new issuance remained relatively strong from a historical perspective at $356 billion (slightly higher than the $318 billion issued in the prior 12-month period). A noteworthy portion of new supply during this period was attributable to refinancing activity (roughly 50%) as issuers took advantage of low interest rates and a flatter yield curve to reduce their borrowing costs.

S&P Municipal Bond Index

Total Returns as of February 28, 2015

  6 months:   2.17%

12 months:   6.47%

A Closer Look at Yields

 

LOGO

From February 28, 2014 to February 28, 2015, yields on AAA-rated 30-year municipal bonds decreased by 85 basis points (“bps”) from 3.72% to 2.87%, while 10-year rates decreased 38 bps from 2.40% to 2.02% and 5-year rates increased 19 bps from 1.00% to 1.19% (as measured by Thomson Municipal Market Data). Overall, the municipal yield curve remained relatively steep over the 12-month period even as the spread between 2- and 30-year maturities flattened by 103 bps and the spread between 2- and 10-year maturities flattened by 56 bps.

During the same time period, U.S. Treasury rates fell by 100 bps on 30-year bonds, 66 bps on 10-year bonds and 1 bp in 5-year issues. Accordingly, tax-exempt municipal bonds underperformed U.S. Treasuries across the yield curve, most notably in the intermediate portion of the curve as a result of increased supply. Municipals modestly outperformed U.S. Treasuries in the very short end of the curve as expectations around future Fed policy changes pressured short-term U.S. Treasury prices. In absolute terms, positive performance on the long end of the curve was driven largely by a supply/demand imbalance within the municipal market as investors sought income and incremental yield in an environment where opportunities had become scarce. More broadly, municipal bonds benefited from the greater appeal of tax-exempt investing in light of the higher tax rates implemented in 2014. The asset class is known for its lower relative volatility and preservation of principal with an emphasis on income as tax rates rise. The municipal market continues to be an attractive avenue for investors seeking yield in the low-rate environment. However, opportunities have not been as broad-based as in 2011 and 2012, warranting a more flexible approach to security selection and yield curve positioning going forward.

Financial Conditions of Municipal Issuers Continue to Improve

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

Investing involves risk including loss of principal. Bond values fluctuate in price so the value of your investment can go down depending on market conditions. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to Alternative Minimum Tax (AMT). Capital gains distributions, if any, are taxable.

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    FEBRUARY 28, 2015   


The Benefits and Risks of Leveraging     

 

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

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

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

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

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

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

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

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

 

Derivative Financial Instruments     

 

The Trusts may invest in various derivative financial instruments. Derivative financial instruments are used to obtain exposure to a security, index and/or market without owning or taking physical custody of securities or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage. Derivative financial instruments also 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 Trusts’ 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 limit the amount of appreciation a Trust can realize on an investment and/or may result in lower distributions paid to shareholders. The Trusts’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    5


Trust Summary as of February 28, 2015    BlackRock Municipal Bond Investment Trust

 

 

Trust Overview

BlackRock Municipal Bond Investment Trust’s (BIE) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax and Florida intangible personal property tax. The Trust seeks to achieve its investment objective by investing primarily 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 Trust invests at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives. Effective January 1, 2007, the Florida intangible personal property tax was repealed.

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

 

Performance
Ÿ  

For the six months ended February 28, 2015, the Trust returned 7.24% based on market price and 4.27% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 6.44% based on market price and 4.58% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

Municipal bond yields declined during the six-month period, while the yield curve flattened (i.e., rates on longer-dated bonds fell more than rates on shorter-dated securities). In this environment, the Trust’s duration (interest rate sensitivity) had a positive impact on performance. (Bond prices rise when rates fall.) The Trust’s longer-dated holdings in the transportation, health care, utilities and tax backed sectors were particularly strong contributors to performance. At a time of modest price gains for the municipal bond market, the income generated from coupon payments on the Trust’s portfolio of tax-exempt bonds made a meaningful contribution to absolute performance. In addition, the use of leverage allowed the Trust to enhance its level of income.

 

Ÿ  

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

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

 

Trust Information

Symbol on New York Stock Exchange (“NYSE”)

   BIE

Initial Offering Date

   April 30, 2002

Yield on Closing Market Price as of February 28, 2015 ($15.17)1

   6.01%

Tax Equivalent Yield2

   10.62%

Current Monthly Distribution per Common Share3

   $0.076

Current Annualized Distribution per Common Share3

   $0.912

Economic Leverage as of February 28, 20154

   38%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
6    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


     BlackRock Municipal Bond Investment Trust
Market Price and Net Asset Value Per Share Summary      
      2/28/15      8/31/14      Change      High      Low  

Market Price

   $ 15.17       $ 14.58         4.05    $ 15.69       $ 14.29   

Net Asset Value

   $ 16.46       $ 16.27         1.17    $ 16.76       $ 16.12   

 

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

 

LOGO

 

Overview of the Trust’s Total Investments*
Sector Allocation              
     2/28/15     8/31/14  

Transportation

    26     25

County/City/Special District/School District

    24        23   

Utilities

    15        16   

Health

    15        14   

State

      8        9   

Education

      8        7   

Tobacco

      2        1   

Corporate

      1        1   

Housing

      1        4   
Credit Quality Allocation1              
     2/28/15     8/31/14  

AAA/Aaa

      7     10

AA/Aa

    60        59   

A

    27        25   

BBB/Baa

      5        5   

B

      1        1   

 

  1   

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

Call/Maturity Schedule2       

Calendar Year Ended December 31,

 

2015

      

2016

      2

2017

      1   

2018

    17   

2019

    29   

 

 

  2   

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

 

 

 

  *   Excludes short-term securities.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    7


Trust Summary as of February 28, 2015    BlackRock Municipal Bond Trust

 

Trust Overview

BlackRock Municipal Bond Trust’s (BBK) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt from regular federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Trust invests, under normal market conditions, at least 80% of its assets in municipal bonds that are investment grade quality. The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

 

Performance
Ÿ  

For the six months ended February 28, 2015, the Trust returned 9.28% based on market price and 5.68% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 6.44% based on market price and 4.58% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

Tax-exempt rates declined during the period, supporting generally positive performance for municipal bonds. (Bond prices rise when rates fall.) Municipal bonds with longer durations (and greater sensitivity to interest rate movements) tended to provide the strongest returns. In this environment, the Trust’s longer duration and positions in longer-dated bonds generally outperformed. The Trust’s positions in the health care, transportation and tax-backed (local school districts) sectors were positive contributors to performance. Exposure to lower-coupon and zero-coupon bonds, which generated strong price performance, also drove returns. The Trust’s exposure to the middle investment-grade quality categories (bonds rated A and AA) aided performance, as these credit quality tiers outperformed. The Trust’s exposure to higher-yielding bonds was an additional positive contributor. At a time of modest price gains for the municipal bond market, the income generated from coupon payments on the Trust’s portfolio of tax-exempt bonds made a meaningful contribution to absolute performance. In addition, the use of leverage allowed the Trust to enhance its level of income.

Ÿ  

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

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

 

Trust Information

Symbol on NYSE

   BBK

Initial Offering Date

   April 30, 2002

Yield on Closing Market Price as of February 28, 2015 ($16.52)1

   5.96%

Tax Equivalent Yield2

   10.53%

Current Monthly Distribution per Common Share3

   $0.082

Current Annualized Distribution per Common Share3

   $0.984

Economic Leverage as of February 28, 20154

   36%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
8    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


     BlackRock Municipal Bond Trust

 

 

Market Price and Net Asset Value Per Share Summary  
      2/28/15    8/31/14      Change      High      Low  

Market Price

   $16.52      $15.59         5.97%         $16.93         $15.18   

Net Asset Value

   $16.95      $16.54         2.48%         $17.35         $16.36   

 

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

 

LOGO

 

Overview of the Trust’s Total Investments*

 

Sector Allocation              
     2/28/15     8/31/14  

County/City/Special District/School District

    22     20

Health

    20        21   

Transportation

    18        17   

Education

    12        12   

Utilities

    11        11   

Corporate

    8        7   

State

    7        6   

Housing

    1        5   

Tobacco

    1        1   
Credit Quality Allocation1              
     2/28/15     8/31/14  

AAA/Aaa

    4     11

AA/Aa

    43        43   

A

    32        22   

BBB/Baa

    9        14   

BB/Ba

    5        5   

B

    1          

N/R2

    6        5   

 

  1   

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

 

  2   

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of February 28, 2015 and August 31, 2014, the market value of unrated securities deemed by the investment advisor to be investment grade each representing 2%, respectively, of the Trust’s total investments.

Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2015

    6

2016

    1   

2017

    3   

2018

    10   

2019

    9   

 

  3   

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

 

 

  *   Excludes short-term securities.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    9


Trust Summary as of February 28, 2015    BlackRock Municipal Income Investment Quality Trust

 

Trust Overview

BlackRock Municipal Income Investment Quality Trust’s (BAF) (the “Trust”) investment objective is to provide current income exempt from federal income tax, including the alternative minimum tax and Florida intangible property tax. The Trust seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets in municipal bonds exempt from federal income taxes, including the alternative minimum tax. The Trust also invests at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives. Effective January 1, 2007, the Florida intangible property tax was repealed.

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

 

Performance
Ÿ  

For the six months ended February 28, 2015, the Trust returned 6.71% based on market price and 4.86% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 6.44% based on market price and 4.58% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

Municipal bond yields declined during the six-month period, while the yield curve flattened (i.e., rates on longer-dated bonds fell more than rates on shorter-dated securities). In this environment, the Trust’s duration (interest rate sensitivity) had a positive impact on performance. (Bond prices rise when rates fall.) The Trust’s longer-dated holdings in the transportation, utilities and tax backed sectors were particularly strong contributors to performance. At a time of modest price gains for the municipal bond market, the income generated from coupon payments on the Trust’s portfolio of tax-exempt bonds made a meaningful contribution to absolute performance. In addition, the use of leverage allowed the Trust to enhance its level of income.

 

Ÿ  

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

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

 

Trust Information

Symbol on NYSE

   BAF

Initial Offering Date

   October 31, 2002

Yield on Closing Market Price as of February 28, 2015 ($14.71)1

   5.59%

Tax Equivalent Yield2

   9.88%

Current Monthly Distribution per Common Share3

   $0.0685

Current Annualized Distribution per Common Share3

   $0.8220

Economic Leverage as of February 28, 20154

   34%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
10    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


     BlackRock Municipal Income Investment Quality Trust

 

Market Price and Net Asset Value Per Share Summary                                      
      2/28/15    8/31/14      Change      High      Low  

Market Price

   $14.71      $14.18         3.74%         $15.29         $13.86   

Net Asset Value

   $16.28      $15.97         1.94%         $16.57         $15.80   

 

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

 

LOGO

 

Overview of the Trust’s Total Investments*
Sector Allocation              
     2/28/15     8/31/14  

County/City/Special District/School District

    31     32

Transportation

    27        28   

Utilities

    16        19   

Health

    12        12   

State

    10        5   

Education

      2        2   

Tobacco

      1        1   

Housing

      1        1   

 

Credit Quality Allocation1            
     2/28/15   8/31/14  

AAA/Aaa

    3%     3

AA/Aa

  73     75   

A

  21     20   

BBB/Baa

    3     2   

 

  1   

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

Call/Maturity Schedule2       

Calendar Year Ended December 31,

 

2015

      

2016

      

2017

      1

2018

      

2019

      1   

 

  2   

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

 

 

 

  *   Excludes short-term securities.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    11


Trust Summary as of February 28, 2015    BlackRock Municipal Income Quality Trust

 

 

Trust Overview

BlackRock Municipal Income Quality Trust’s (BYM) (the “Trust”) investment objective is to provide current income exempt from federal income taxes, including the alternative minimum tax. The Trust seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets in municipal bonds exempt from federal income taxes, including the alternative minimum tax. The Trust also invests at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

 

Performance
Ÿ  

For the six months ended February 28, 2015, the Trust returned 7.60% based on market price and 4.62% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 6.44% based on market price and 4.58% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

At a time of modest price gains for the municipal bond market, the income generated from coupon payments on the Trust’s portfolio of tax-exempt bonds made a meaningful contribution to absolute performance. Exposure to longer-dated bonds had a positive impact as the municipal yield curve flattened during the period (i.e., longer-term rates fell more than shorter-term rates). The Trust’s duration exposure (sensitivity to interest rate movements) also contributed to performance given that municipal interest rates fell slightly during the period. (Bond prices rise as rates fall.) The Trust also benefited from its credit exposure as yield spreads generally tightened, especially in the tax-backed local and transportation sectors. In addition, the use of leverage allowed the Trust to enhance its level of income.

 

Ÿ  

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

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

 

Trust Information

Symbol on NYSE

  BYM

Initial Offering Date

  October 31, 2002

Yield on Closing Market Price as of February 28, 2015 ($14.58)1

  5.88%

Tax Equivalent Yield2

  10.39%

Current Monthly Distribution per Common Share3

  $0.0715

Current Annualized Distribution per Common Share3

  $0.8580

Economic Leverage as of February 28, 20154

  37%

 

  1  

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
12    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


     BlackRock Municipal Income Quality Trust

 

Market Price and Net Asset Value Per Share Summary                                 
     2/28/15   8/31/14     Change     High     Low  

Market Price

  $14.58   $ 13.96        4.44   $ 15.17      $ 13.69   

Net Asset Value

  $15.80   $ 15.56        1.54   $ 16.14      $ 15.39   

 

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

 

LOGO

 

Overview of the Trust’s Total Investments*
Sector Allocation              
     2/28/15     8/31/14  

County/City/Special District/School District

    29     32

Transportation

    25        25   

Utilities

    13        13   

State

    11        12   

Health

    9        8   

Education

    9        6   

Corporate

    2        2   

Tobacco

    2        2   
Credit Quality Allocation1              
     2/28/15     8/31/14  

AAA/Aaa

    19     17

AA/Aa

    57        52   

A

    21        26   

BBB/Baa

    3        5   

 

  1   

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

Call/Maturity Schedule2       

Calendar Year Ended December 31,

 

2015

    1

2016

    4   

2017

    8   

2018

    16   

2019

    8   

 

  2   

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

 

 

 

  *   Excludes short-term securities.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    13


Trust Summary as of February 28, 2015    BlackRock Municipal Income Trust II

 

 

Trust Overview

BlackRock Municipal Income Trust II’s (BLE) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Trust invests, under normal market conditions, at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

 

Performance
Ÿ  

For the six months ended February 28, 2015, the Trust returned 9.01% based on market price and 5.18% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 6.44% based on market price and 4.58% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

At a time of modest price gains for the municipal bond market, the income generated from coupon payments on the Trust’s portfolio of tax-exempt bonds made a meaningful contribution to absolute performance. In addition, the use of leverage allowed the Trust to enhance its level of income. At a time in which higher-quality bonds generally outperformed, the Trust’s investment-grade holdings in the AA and A rated categories aided performance, followed by those ranked BBB and lower. Concentrations in transportation, state and local tax-backed, health care, corporate and utilities sectors also proved helpful to performance, while the Trust’s positioning with respect to duration (sensitivity to interest rate movements) and the yield curve made more modest contributions. In addition, the use of leverage allowed the Trust to enhance its level of income.

 

Ÿ  

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

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

 

Trust Information

Symbol on NYSE MKT

   BLE

Initial Offering Date

   July 30, 2002

Yield on Closing Market Price as of February 28, 2015 ($15.53)1

   6.10%

Tax Equivalent Yield2

   10.78%

Current Monthly Distribution per Common Share3

   $0.079

Current Annualized Distribution per Common Share3

   $0.948

Economic Leverage as of February 28, 20154

   37%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
14    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


     BlackRock Municipal Income Trust II

 

 

Market Price and Net Asset Value Per Share Summary                                        
      2/28/15      8/31/14      Change      High      Low  

Market Price

     $15.53         $14.70         5.65%         $16.66         $14.28   

Net Asset Value

     $15.78         $15.48         1.94%         $16.09         $15.33   

 

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

 

LOGO

 

Overview of the Trust’s Total Investments*

 

Sector Allocation              
     2/28/15     8/31/14  

Transportation

    21     20

Health

    16        14   

Utilities

    15        16   

County/City/Special District/School District

    13        13   

Corporate

    10        11   

State

    10        11   

Education

    8        8   

Tobacco

    5        4   

Housing

    2        3   
Credit Quality Allocation1              
     2/28/15     8/31/14  

AAA/Aaa

    10     7

AA/Aa

    39        32   

A

    23        28   

BBB/Baa

    14        17   

BB/Ba

      4        5   

B

      2        2   

N/R2

      8        9   

 

  1   

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

 

  2   

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of February 28, 2015 and August 31, 2014, the market value of unrated securities deemed by the investment advisor to be investment grade each representing 1%, respectively, of the Trust’s total investments.

Call/Maturity Schedule3       

Calendar Year Ended December 31,

 

2015

      9

2016

      4   

2017

      3   

2018

      5   

2019

    17   

 

  3  

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

 

 

  *   Excludes short-term securities.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    15


Trust Summary as of February 28, 2015    BlackRock MuniHoldings Investment Quality Fund

 

Trust Overview

BlackRock MuniHoldings Investment Quality Fund’s (MFL) (the “Trust”) investment objective is to provide shareholders with current income exempt from federal income tax and to provide shareholders with the opportunity to own shares the value of which is exempt from Florida intangible personal property tax. The Trust 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 Trust invests at least 80% of its assets in municipal obligations with remaining maturities of one year or more at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives. Effective January 1, 2007, the Florida intangible personal property tax was repealed.

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

 

Performance
Ÿ  

For the six months ended February 28, 2015, the Trust returned 7.55% based on market price and 4.70% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 6.44% based on market price and 4.58% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

Municipal bond yields declined during the six-month period, while the yield curve flattened (i.e., rates on longer-dated bonds fell more than rates on shorter-dated securities). In this environment, the Trust’s duration (interest rate sensitivity) had a positive impact on performance. (Bond prices rise when rates fall.) The Trust’s longer-dated holdings in the transportation, utilities and tax-backed sectors were particularly strong contributors to performance. At a time of modest price gains for the municipal bond market, the income generated from coupon payments on the Trust’s portfolio of tax-exempt bonds made a meaningful contribution to absolute performance. In addition, the use of leverage allowed the Trust to enhance its level of income.

 

Ÿ  

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

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

 

Trust Information

Symbol on NYSE

   MFL

Initial Offering Date

   September 26, 1997

Yield on Closing Market Price as of February 28, 2015 ($14.53)1

   5.91%

Tax Equivalent Yield2

   10.44%

Current Monthly Distribution per Common Share3

   $0.0715

Current Annualized Distribution per Common Share3

   $0.8580

Economic Leverage as of February 28, 20154

   38%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

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

 

                
16    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


     BlackRock MuniHoldings Investment Quality Fund

 

Market Price and Net Asset Value Per Share Summary      
      2/28/15      8/31/14      Change      High      Low  

Market Price

     $14.53         $13.92         4.38%         $15.15         $13.64   

Net Asset Value

     $15.71         $15.46         1.62%         $16.01         $15.30   

 

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

 

LOGO

 

Overview of the Trust’s Total Investments*

 

Sector Allocation    
     2/28/15     8/31/14  

Transportation

    35     35

County/City/Special District/School District

    21        18   

Utilities

    16        19   

State

    11        9   

Health

    10        11   

Education

    5        6   

Housing

    1        1   

Tobacco

    1        1   
Credit Quality Allocation1              
     2/28/15     8/31/14  

AAA/Aaa

    6     5

AA/Aa

    62        65   

A

    29        28   

BBB/Baa

    2        2   

N/R

    1          

 

  1   

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

 

Call/Maturity Schedule2       

Calendar Year Ended December 31,

 

2015

      

2016

    1

2017

    3   

2018

    14   

2019

    25   
  2   

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

 

  *   Excludes short-term securities.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    17


Trust Summary as of February 28, 2015    BlackRock MuniVest Fund, Inc.

 

Trust Overview

BlackRock MuniVest Fund, Inc.’s (MVF) (the “Trust”) 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 Trust seeks to achieve its investment objective by investing at least 80% of its assets in 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 Trust primarily invests in long term municipal obligations rated investment grade at the time of investment and in long term municipal obligations with maturities of more than ten years at the time of investment. The Trust may invest up to 20% of its total assets in securities rated below investment grade or deemed equivalent at the time of purchase. The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

 

Performance
Ÿ  

For the six months ended February 28, 2015, the Trust returned 7.66% based on market price and 4.16% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 6.44% based on market price and 4.58% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

Ÿ  

The Trust’s duration exposure (sensitivity to interest rate movements) contributed positively to performance as interest rates declined during the period. (Bond prices rise when rates fall.) The Trust’s exposure to long-maturity bonds benefited performance given that the yield curve flattened, with yields falling more significantly for bonds in the 20- to 30-year maturity range than for intermediate- and short-term bonds. The Trust’s exposure to zero-coupon bonds, which experienced stronger price performance than current coupon bonds also benefitted returns. At a time of modest price gains for the municipal bond market, the income generated from coupon payments on the Trust’s portfolio of tax-exempt bonds made a meaningful contribution to absolute performance. In addition, the use of leverage allowed the Trust to enhance its level of income.

 

Ÿ  

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

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

 

Trust Information      

Symbol on NYSE MKT

   MVF

Initial Offering Date

   September 29, 1988

Yield on Closing Market Price as of February 28, 2015 ($10.25)1

   6.26%

Tax Equivalent Yield2

   11.06%

Current Monthly Distribution per Common Share3

   $0.0535

Current Annualized Distribution per Common Share3

   $0.6420

Economic Leverage as of February 28, 20154

   37%

 

  1  

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

 

  2  

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

 

  3  

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

 

  4  

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

 

                
18    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


     BlackRock MuniVest Fund, Inc.

 

Market Price and Net Asset Value Per Share Summary                                        
      2/28/15      8/31/14      Change      High      Low  

Market Price

   $ 10.25       $ 9.83         4.27%       $ 10.59       $ 9.46   

Net Asset Value

   $ 10.36       $ 10.27         0.88%       $ 10.56       $ 10.19   

 

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

 

LOGO

 

Overview of the Trust’s Total Investments*

 

Sector Allocation              
     2/28/15     8/31/14  

Health

    24     23

Transportation

    22        22   

County/City/Special District/School District

    14        12   

Utilities

    10        10   

Corporate

    9        10   

Education

    9        10   

State

    5        5   

Housing

    4        5   

Tobacco

    3        3   

 

Credit Quality Allocation1              
     2/28/15     8/31/14  

AAA/Aaa

    10     10

AA/Aa

    48        49   

A

    24        23   

BBB/Baa

    12        12   

BB/Ba

    1        1   

B

    2        2   

CCC

    2        

N/R3

    3        3   

 

  1   

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

 

  2   

Representing less than 1% of the Trust’s total investments.

 

  3   

The investment advisor evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment advisor has deemed certain of these unrated securities as investment grade quality. As of February 28, 2015 and August 31, 2014, the market value of unrated securities deemed by the investment advisor to be investment grade each representing 1%, respectively, of the Trust’s total investments.

 

Call/Maturity Schedule4       

Calendar Year Ended December 31,

 

2015

    5

2016

    4   

2017

    8   

2018

    18   

2019

    19   

 

  4   

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

 

 

  *   Excludes short-term securities.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    19


Schedule of Investments February 28, 2015 (Unaudited)

  

BlackRock Municipal Bond Investment Trust (BIE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 0.3%

    

City of Selma Alabama IDB, RB, Gulf Opportunity Zone, International Paper Co. Project, Series A, 5.38%, 12/01/35

   $ 145      $ 162,161   

Alaska — 0.3%

    

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

     180        144,916   

California — 13.3%

    

California Educational Facilities Authority, RB, University of Southern California, Series A, 5.25%, 10/01/38

     700        792,890   

California Health Facilities Financing Authority, Refunding RB, Catholic Healthcare West, Series A, 6.00%, 7/01/39

     120        139,657   

Kern Community College District, GO, Safety, Repair & Improvement, Election of 2002, Series C, 5.50%, 11/01/33

     410        492,644   

Los Angeles Department of Water & Power, RB, Power System, Sub-Series A-1, 5.25%, 7/01/38

     1,660        1,862,587   

San Diego Regional Building Authority, RB, County Operations Center & Annex, Series A, 5.38%, 2/01/36

     850        972,511   

State of California, GO, Various Purposes, 6.00%, 3/01/33

     685        832,898   

State of California Public Works Board, LRB, Various Capital Projects, Series I, 5.50%, 11/01/31

     500        605,490   

State of California Public Works Board, RB, Department of Corrections & Rehabilitation, Series F, 5.25%, 9/01/33

     210        246,292   

Township of Washington California Health Care District, GO, Election of 2004, Series B, 5.50%, 8/01/40

     160        192,486   

University of California, Refunding RB, The Regents of Medical Center, Series J, 5.25%, 5/15/38

     1,000        1,186,740   
    

 

 

 
               7,324,195   

Colorado — 2.8%

    

City & County of Denver Colorado Airport System, ARB, Sub-System, Series B, 5.25%, 11/15/32

     750        864,878   

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

     580        666,269   
    

 

 

 
               1,531,147   

Florida — 6.4%

    

City of Jacksonville Florida, Refunding RB, Series A, 5.25%, 10/01/33

     105        122,605   

County of Miami-Dade Florida, RB, Seaport Department, Series A, 6.00%, 10/01/38

     1,875        2,290,350   

Osceola County Florida, RB, Sales Tax Revenue, Series A (a):

    

5.00%, 10/01/40

     200        225,502   

5.00%, 10/01/44

     465        522,609   

Reedy Creek Improvement District, GO, Series A, 5.25%, 6/01/32

     305        355,112   
    

 

 

 
               3,516,178   
Municipal Bonds   

Par  

(000)

    Value  

Georgia — 1.9%

    

City of Atlanta Georgia Water & Wastewater, Refunding RB, 5.00%, 11/01/40 (a)

   $ 340      $ 388,344   

Municipal Electric Authority of Georgia, Refunding RB, Project One, Sub-Series D, 6.00%, 1/01/23

     555        646,259   
    

 

 

 
               1,034,603   

Illinois — 17.9%

    

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien, Series C, 6.50%, 1/01/41

     1,590        1,939,561   

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

     250        271,028   

City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts:

    

5.25%, 12/01/36

     500        570,000   

5.25%, 12/01/40

     750        850,575   

5.00%, 12/01/44

     565        642,043   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago:

    

5.50%, 12/01/38

     250        289,270   

5.25%, 12/01/43

     1,000        1,130,200   

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

     750        894,967   

Illinois Finance Authority, Refunding RB, Northwestern Memorial Hospital, Series A, 6.00%, 8/15/39

     1,000        1,167,300   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     365        429,342   

6.00%, 6/01/28

     105        123,203   

State of Illinois, GO:

    

5.25%, 2/01/31

     255        279,730   

5.25%, 2/01/32

     500        546,520   

5.50%, 7/01/33

     500        557,995   

5.50%, 7/01/38

     110        122,262   
    

 

 

 
               9,813,996   

Indiana — 2.5%

    

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

     1,190        1,378,175   

Kansas — 1.9%

    

Kansas Development Finance Authority, Refunding RB, Adventist Health System/Sunbelt Obligated Group, Series C, 5.50%, 11/15/29

     900        1,047,690   

Kentucky — 1.7%

    

County of Louisville & Jefferson Kentucky Metropolitan Government Parking Authority, RB, Series A, 5.75%, 12/01/34

     800        953,040   

Louisiana — 2.4%

    

Louisiana Local Government Environmental Facilities & Community Development Authority, RB:

    

LCTCS Act 360 Project, 5.00%, 10/01/37

     475        541,771   

Westlake Chemical Corp. Project, Series A-1, 6.50%, 11/01/35

     380        456,186   

 

Portfolio Abbreviations
AGC    Assured Guarantee Corp.      EDA    Economic Development Authority    IDB    Industrial Development Board
AGM    Assured Guaranty Municipal Corp.      EDC    Economic Development Corp.    ISD    Independent School District
AMBAC    American Municipal Bond Assurance Corp.      ERB    Education Revenue Bonds    LRB    Lease Revenue Bonds
AMT    Alternative Minimum Tax (subject to)      GARB    General Airport Revenue Bonds    M/F    Multi-Family
ARB    Airport Revenue Bonds      GO    General Obligation Bonds    NPFGC    National Public Finance Guarantee Corp.
BARB    Building Aid Revenue Bonds      HDA    Housing Development Authority    PSF-GTD    Public School Fund Guaranteed
BHAC    Berkshire Hathaway Assurance Corp.      HFA    Housing Finance Agency    PILOT    Payment in Lieu of Taxes
CAB    Capital Appreciation Bonds      HRB    Housing Revenue Bonds    RB    Revenue Bonds
COP    Certificates of Participation      IDA    Industrial Development Authority    S/F    Single-Family

 

See Notes to Financial Statements.

 

                
20    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (continued)

  

BlackRock Municipal Bond Investment Trust (BIE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Louisiana (concluded)

    

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A, 5.50%, 5/15/29

   $ 315      $ 346,078   
    

 

 

 
               1,344,035   

Maine — 1.5%

    

Maine Health & Higher Educational Facilities Authority, RB, Maine General Medical Center, 7.50%, 7/01/32

     675        819,241   

Massachusetts — 1.4%

    

Massachusetts Development Finance Agency, Refunding RB, Trustees of Deerfield Academy, 5.00%, 10/01/40

     375        434,471   

Metropolitan Boston Transit Parking Corp., Refunding RB, 5.25%, 7/01/36

     300        347,808   
    

 

 

 
               782,279   

Michigan — 3.3%

    

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

     485        576,195   

Michigan State Building Authority, Refunding RB, Facilities Program, Series I, 6.00%, 10/15/38

     500        577,870   

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

     530        663,496   
    

 

 

 
               1,817,561   

Mississippi — 2.9%

    

Mississippi Development Bank, RB, Jackson Water & Sewer System Project (AGM), 6.88%, 12/01/40

     1,000        1,307,110   

Mississippi State University Educational Building Corp., Refunding RB, Mississippi State University Improvement Project, 5.25%, 8/01/38

     250        288,587   
    

 

 

 
               1,595,697   

Nevada — 4.3%

    

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

     1,000        1,163,010   

County of Clark Nevada Airport System, ARB, Series B, 5.75%, 7/01/42

     1,000        1,177,860   
    

 

 

 
               2,340,870   

New Jersey — 9.8%

    

New Jersey EDA, RB, School Facilities Construction, Series UU, 5.00%, 6/15/40

     250        270,857   

New Jersey EDA, Refunding RB, School Facilities Construction, Series AA, 5.50%, 12/15/29

     750        829,545   

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series CC, 5.25%, 10/01/29

     610        650,852   

New Jersey Transportation Trust Fund Authority, RB:

    

Transportation Program, Series AA, 5.00%, 6/15/38

     1,835        1,973,286   

Transportation System, Series A, 5.88%, 12/15/38

     695        803,142   

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

     760        861,604   
    

 

 

 
               5,389,286   

New York — 4.0%

    

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

     620        721,035   

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

     500        577,500   

New York Counties Tobacco Trust IV, Refunding RB, Settlement Pass Thru, Turbo Term, Series A, 6.25%, 6/01/41 (c)

     300        305,346   

New York Liberty Development Corp., Refunding RB, 2nd Priority, Bank of America Tower at One Bryant Park Project, Class 3, 6.38%, 7/15/49

     500        573,655   
    

 

 

 
               2,177,536   
Municipal Bonds   

Par  

(000)

    Value  

Ohio — 2.8%

    

County of Allen Ohio Hospital Facilities, Refunding RB, Catholic Healthcare Partners, Series A, 5.25%, 6/01/38

   $ 840      $ 953,627   

State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1, 5.25%, 2/15/31

     500        583,815   
    

 

 

 
               1,537,442   

Pennsylvania — 7.3%

    

Pennsylvania Economic Development Financing Authority, RB, American Water Co. Project, 6.20%, 4/01/39

     300        349,326   

Pennsylvania Turnpike Commission, RB:

    

Sub-Series A, 5.63%, 12/01/31

     750        880,373   

Sub-Series A, 6.00%, 12/01/41

     1,500        1,617,360   

Sub-Series C (AGC), 6.25%, 6/01/38

     500        571,620   

Township of Bristol Pennsylvania School District, GO, 5.25%, 6/01/37

     530        611,625   
    

 

 

 
               4,030,304   

South Carolina — 3.4%

    

City of Columbia South Carolina, RB, Special Obligation, 5.00%, 2/01/44

     1,000        1,137,970   

County of Charleston South Carolina, RB, Special Source, 5.25%, 12/01/38

     635        745,890   
    

 

 

 
               1,883,860   

Texas — 9.3%

    

Central Texas Regional Mobility Authority, Refunding RB, Senior Lien, 6.00%, 1/01/41

     890        1,034,705   

Central Texas Turnpike System, Refunding RB, Series C, 5.00%, 8/15/42

     130        142,956   

City of Beaumont Texas, GO, Certificates of Obligation, 5.25%, 3/01/37

     395        456,656   

Conroe Texas ISD, GO, School Building, Series A, 5.75%, 2/15/18 (b)

     470        537,736   

County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Scott & White Healthcare, 6.00%, 8/15/45

     1,020        1,229,100   

North Texas Tollway Authority, RB, Special Projects, Series A, 5.50%, 9/01/41

     500        601,035   

North Texas Tollway Authority, Refunding RB, 1st Tier, Series K-1 (AGC), 5.75%, 1/01/38

     250        285,615   

Red River Education Financing Corp., RB, Texas Christian University Project, 5.25%, 3/15/38

     180        208,631   

Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien, NTE Mobility Partners LLC, North Tarrant Express Managed Lanes Project, 6.88%, 12/31/39

     500        594,375   
    

 

 

 
               5,090,809   

Virginia — 0.7%

    

City of Lexington Virginia IDA, RB, Washington & Lee University, 5.00%, 1/01/43

     145        162,532   

Virginia Public School Authority, RB, Fluvanna County School Financing, 6.50%, 12/01/18 (b)

     200        240,994   
    

 

 

 
               403,526   

Wisconsin — 1.8%

    

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health, Inc., Series C, 5.25%, 4/01/39

     890        981,385   
Total Municipal Bonds — 103.9%              57,099,932   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    21


Schedule of Investments (continued)

  

BlackRock Municipal Bond Investment Trust (BIE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (d)
  

Par  

(000)

    Value  

California — 19.3%

    

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

   $ 1,005      $ 1,134,595   

Grossmont Union High School District, GO, Election of 2008, Series B, 5.00%, 8/01/40

     1,300        1,485,887   

Los Angeles Community College District California, GO, Go, Election of 2008, Series C, 5.25%, 8/01/39 (e)

     1,410        1,647,761   

Los Angeles Community College District California, GO, Refunding, Election of 2008, Series A, 6.00%, 8/01/19 (b)

     2,079        2,529,719   

Los Angeles Unified School District California, GO, Series I, 5.00%, 1/01/34

     200        226,940   

San Diego Public Facilities Financing Authority Water, RB, Series B, 5.50%, 8/01/39

     2,234        2,610,414   

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

     810        949,228   
    

 

 

 
               10,584,544   

District of Columbia — 3.4%

    

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

     735        866,134   

District of Columbia Water & Sewer Authority, Refunding RB, Senior Lien, Series A, 5.50%, 10/01/39

     899        1,016,756   
    

 

 

 
               1,882,890   

Illinois — 7.2%

    

State of Illinois Finance Authority, RB, University of Chicago, Series B, 6.25%, 7/01/18 (b)

     1,500        1,759,440   

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

     2,000        2,210,353   
    

 

 

 
               3,969,793   

Nevada — 3.2%

    

County of Clark Nevada Water Reclamation District, GO, Limited Tax, 6.00%, 7/01/38

     1,500        1,732,395   

New Hampshire — 1.2%

    

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

     585        669,189   

New Jersey — 3.7%

    

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

    

Series A (AMBAC), 5.00%, 12/15/32

     1,000        1,097,770   

Series B, 5.25%, 6/15/36 (e)

     840        917,154   
    

 

 

 
               2,014,924   

New York — 13.7%

    

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

     750        862,282   
Municipal Bonds Transferred to
Tender Option Bond Trusts (d)
  

Par  

(000)

    Value  

New York (concluded)

    

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

    

Series FF, 5.00%, 6/15/45

   1,000      1,119,409   

Series FF-2, 5.50%, 6/15/40

     990        1,144,651   

City of New York New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.25%, 1/15/39

     1,000        1,127,275   

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

     1,170        1,350,238   

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

     680        795,750   

New York State Dormitory Authority, ERB, Personal Income Tax, Series B, 5.25%, 3/15/38

     1,000        1,139,870   
    

 

 

 
               7,539,475   

Texas — 5.2%

    

City of San Antonio Texas Public Service Board, Refunding RB, Series A, 5.25%, 2/01/31 (e)

     1,050        1,195,655   

County of Harris Texas Cultural Education Facilities Finance Corp., RB, Texas Children’s Hospital Project, 5.50%, 10/01/39

     1,450        1,679,811   
    

 

 

 
               2,875,466   

Virginia — 1.0%

    

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

     460        524,826   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 57.9%
        31,793,502   
Total Long-Term Investments
(Cost — $78,854,805) — 161.8%
        88,893,434   
    
   
Short-Term Securities    Shares         

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

     349,386        349,386   

Total Short-Term Securities

(Cost — $349,386) — 0.6%

             349,386   
Total Investments (Cost — $79,204,191) — 162.4%        89,242,820   
Liabilities in Excess of Other Assets — (0.5)%        (245,298

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (29.5%)

   

    (16,237,645
VRDP Shares, at Liquidation Value — (32.4%)        (17,800,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 54,959,877   
    

 

 

 

 

Notes to Schedule of Investments

 

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

 

Counterparty      Value        Unrealized
Appreciation
 

Pershing LLC

     $ 388,344         $ 1,421   

Raymond James Financial

     $ 748,111         $ 4,113   

 

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

 

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

 

(d)   Represent bonds transferred to a TOB Trust. In exchange for which the Trust received cash and residual certificates. These bonds serve as collateral in a secured borrowing. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts.

 

See Notes to Financial Statements.

 

                
22    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (concluded)

  

BlackRock Municipal Bond Investment Trust (BIE)

 

 

(e)   All or a portion of security is subject to a recourse agreement, which may require the Trust 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 Trust could ultimately be required to pay under the agreements, which expire from October 1, 2016 to November 15, 2019, is $4,102,786.

 

(f)   During the six months ended February 28, 2015, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at August 31,
2014
       Net
Activity
       Shares Held
at February 28,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       698,423           (349,037        349,386         $ 133   

 

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

 

Ÿ  

As of February 28, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (53   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 6,773,234      $ (29,259

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to Note 2 of the Notes to Financial Statements. As of February 28, 2015, the following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 88,893,434              $ 88,893,434   

Short-Term Securities

  $ 349,386                          349,386   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 349,386         $ 88,893,434              $ 89,242,820   
 

 

 

      

 

 

      

 

    

 

 

 

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

       

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments2             

Liabilities:

                

Interest rate contracts

  $ (29,259                     $ (29,259

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

       

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of February 28, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 105,000                        $ 105,000   

Liabilities:

                

TOB Trust Certificates

            $ (16,235,837             (16,235,837

VRDP Shares

              (17,800,000             (17,800,000
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 105,000         $ (34,035,837           $ (33,930,837
 

 

 

      

 

 

      

 

    

 

 

 
During the six months ended February 28, 2015, there were no transfers between levels.   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    23


Schedule of Investments February 28, 2015 (Unaudited)

  

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 1.8%

    

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC):

    

6.00%, 6/01/34

   $ 1,150      $ 1,349,295   

6.00%, 6/01/39

     450        526,572   

City of Hoover Alabama Board of Education, Refunding, Special Tax, Capital Outlay Warrants, 4.25%, 2/15/40

     1,275        1,321,181   
    

 

 

 
               3,197,048   

Arizona — 7.5%

    

Arizona Board of Regents, RB, Arizona State University, Series C, 5.50%, 7/01/26

     200        234,480   

Arizona Health Facilities Authority, Refunding RB, Phoenix Children’s Hospital, Series A, 5.00%, 2/01/42

     2,200        2,377,496   

County of Pinal Arizona Electric District No. 3, Refunding RB, Electric System, 4.75%, 7/01/31

     3,750        4,085,700   

Salt Verde Financial Corp., RB, Senior:

    

5.00%, 12/01/32

     1,500        1,722,450   

5.00%, 12/01/37

     2,065        2,381,668   

State of Arizona, COP, Department of Administration, Series A (AGM), 5.00%, 10/01/29

     750        840,232   

University Medical Center Corp., RB,
6.50%, 7/01/19 (a)

     500        582,280   

University Medical Center Corp., Refunding RB, 6.00%, 7/01/21 (a)

     900        1,064,016   
    

 

 

 
               13,288,322   

Arkansas — 4.1%

    

Arkansas State University, RB, Jonesboro Campus, Series B:

    

4.00%, 12/01/28

     400        426,892   

4.88%, 12/01/43

     690        761,022   

City of Benton Arkansas, RB, 4.00%, 6/01/39

     905        960,359   

City of Hot Springs Arkansas, RB, Wastewater, 5.00%, 12/01/38

     1,200        1,366,788   

City of Little Rock Arkansas, RB, 4.00%, 7/01/41

     2,250        2,322,247   

Pulaski County Public Facilities Board, RB, 5.00%, 12/01/42

     465        525,478   

University of Arkansas, RB, Fort Smith Campus, Series B, 4.00%, 6/01/39

     920        953,423   
    

 

 

 
               7,316,209   

California — 18.6%

    

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 5.88%, 8/15/31

     1,900        2,277,017   

California HFA, RB, Home Mortgage, Series G, AMT, 5.05%, 2/01/29

     2,285        2,342,651   

Carlsbad California Unified School District, GO, Election of 2006, Series B, 0.00%, 5/01/34 (b)

     1,000        933,810   

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

     2,000        2,319,940   

County of Stanislaus California Tobacco Securitization Agency, RB, CAB, Sub-Series C, 0.00%, 6/01/55 (c)

     4,500        59,130   

Dinuba California Unified School District, GO, Election of 2006 (AGM), 5.75%, 8/01/33

     500        589,055   

Hartnell Community College District California, GO, CAB, Election of 2002, Series D, 0.00%, 8/01/34 (b)

     1,650        1,368,032   

Norwalk-La Mirada Unified School District, GO, Refunding, CAB, Election of 2002, Series E (AGC), 0.00%, 8/01/38 (c)

     8,000        2,939,200   

Palomar Community College District, GO, CAB, Election of 2006, Series B:

    

0.00%, 8/01/30 (c)

     1,500        861,105   

0.00%, 8/01/33 (c)

     4,000        1,458,320   

0.00%, 8/01/39 (b)

     2,000        1,555,780   

San Diego Community College District, GO, CAB, Election of 2002, 0.00%, 8/01/33 (b)

     2,800        2,786,616   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

    

State of California, GO, Refunding, Various Purposes:

    

5.75%, 4/01/31

   $ 2,000      $ 2,351,980   

5.00%, 2/01/38

     3,000        3,404,610   

4.00%, 10/01/44

     1,500        1,554,435   

State of California, GO, Various Purposes:

    

6.00%, 3/01/33

     1,000        1,215,910   

6.50%, 4/01/33

     1,950        2,380,072   

5.50%, 3/01/40

     2,350        2,757,466   
    

 

 

 
               33,155,129   

Colorado — 1.3%

    

Colorado Health Facilities Authority, RB, Catholic Health Initiatives, Series D, 6.25%, 10/01/33

     1,070        1,239,445   

Park Creek Metropolitan District, Refunding RB, Senior Limited Property Tax (AGM), 6.00%, 12/01/38

     750        889,957   

University of Northern Colorado Greely, Refunding RB, Institutional Enterprise, Series A, 4.00%, 6/01/35

     250        265,293   
    

 

 

 
               2,394,695   

Connecticut — 0.3%

    

Connecticut State Health & Educational Facility Authority, Refunding RB, Lawrence & Memorial Hospital, Series F, 5.00%, 7/01/36

     550        607,415   

Delaware — 0.8%

    

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

     1,200        1,390,200   

Florida — 4.6%

    

County of Lee Florida, Refunding ARB, Series A, AMT (AGM), 5.00%, 10/01/28

     2,000        2,226,680   

County of Miami-Dade Florida, RB, AMT, Seaport Department, Series B, 6.00%, 10/01/31

     4,135        5,089,647   

County of Orange Florida Health Facilities Authority, Refunding RB, Mayflower Retirement Center, 5.00%, 6/01/36

     125        134,218   

Stevens Plantation Community Development District, Special Assessment, Series A, 7.10%, 5/01/35 (d)(e)

     910        678,915   
    

 

 

 
               8,129,460   

Georgia — 3.0%

    

City of Atlanta Georgia Water & Wastewater Revenue, 5.00%, 11/01/43 (f)

     4,000        4,553,920   

Savanah Colleges of Art, RB, 4.00%, 4/01/32

     830        825,701   
    

 

 

 
               5,379,621   

Hawaii — 0.3%

    

Hawaii State Department of Budget & Finance, Refunding RB, Special Purpose, Senior Living, Kahala Nui, 5.25%, 11/15/37

     400        438,452   

Idaho — 2.0%

    

Idaho Health Facilities Authority, RB, St. Lukes Health System Project, Series A, 5.00%, 3/01/39

     1,230        1,377,588   

Idaho Health Facilities Authority, Refunding RB, Trinity Health Group, Series B, 6.25%, 12/01/18 (a)

     1,750        2,091,127   
    

 

 

 
               3,468,715   

Illinois — 5.1%

    

City of Chicago Illinois, Refunding ARB, O’Hare International Airport Passenger Facility Charge, Series B, AMT, 4.00%, 1/01/29

     2,000        2,058,120   

City of Chicago Illinois Midway International Airport, Refunding GARB, 2nd Lien, Series A, 5.00%, 1/01/41

     870        949,126   

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

     665        754,177   

Illinois Finance Authority, RB, Rush University Medical Center, Series C, 6.63%, 5/01/19 (a)

     650        792,071   

 

See Notes to Financial Statements.

 

                
24    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (continued)

  

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

Illinois Finance Authority, Refunding RB:

    

Friendship Village Schaumburg, Series A, 5.63%, 2/15/37

   $ 210      $ 210,029   

OSF Healthcare System, Series A, 6.00%, 5/15/39

     1,010        1,191,042   

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

     1,000        1,128,070   

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

     1,150        1,349,364   

State of Illinois, GO, 5.00%, 2/01/39

     665        703,231   
    

 

 

 
               9,135,230   

Indiana — 0.6%

    

Indiana Finance Authority, Refunding RB, U.S. Steel Corp. Project, 6.00%, 12/01/26

     1,000        1,102,950   

Iowa — 1.5%

    

Iowa Higher Education Loan Authority, Refunding RB, Private College Facility:

    

Grinnell College Project 4.00%, 12/01/44

     1,100        1,160,940   

Upper Iowa University Project, 5.75%, 9/01/30

     500        520,550   

Upper Iowa University Project, 6.00%, 9/01/39

     1,000        1,043,250   
    

 

 

 
               2,724,740   

Kansas — 2.5%

    

County of Seward Kansas Unified School District No. 480, GO, Refunding, 5.00%, 9/01/39

     4,000        4,497,200   

Kentucky — 1.8%

    

Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.38%, 1/01/40

     1,830        2,090,482   

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C (b):

    

0.00%, 7/01/34

     500        358,310   

0.00%, 7/01/39

     830        589,848   

0.00%, 7/01/43

     270        190,553   
    

 

 

 
               3,229,193   

Louisiana — 2.7%

    

City of Alexandria Louisiana Utilities, RB, 5.00%, 5/01/39

     860        969,108   

City of New Orleans Louisiana Aviation Board, RB, Series B, AMT, 5.00%, 1/01/45 (f)

     1,955        2,142,719   

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, Series A-1, 6.50%, 11/01/35

     1,050        1,260,515   

Louisiana Public Facilities Authority, RB, Belle Chasse Educational Foundation Project, 6.50%, 5/01/31

     400        447,268   
    

 

 

 
               4,819,610   

Maryland — 1.1%

    

County of Anne Arundel Maryland Consolidated, Special Tax, The Villages at Two Rivers Project:

    

5.13%, 7/01/36

     170        173,981   

5.25%, 7/01/44

     170        173,640   

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

    

5.00%, 7/01/39

     900        1,013,643   

5.00%, 7/01/45

     560        628,331   
    

 

 

 
               1,989,595   

Michigan — 3.6%

    

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

     240        249,552   

Michigan State Hospital Finance Authority, Refunding RB, Trinity Health Credit Group, Series C, 4.00%, 12/01/32

     2,100        2,181,753   
Municipal Bonds   

Par  

(000)

    Value  

Michigan (concluded)

    

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

   1,950      2,441,166   

State of Michigan Building Authority, Refunding RB, Facilities Program, Series I, 6.25%, 10/15/38

     1,250        1,455,663   
    

 

 

 
               6,328,134   

Minnesota — 3.0%

    

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

     4,600        5,396,628   

Mississippi — 3.2%

    

County of Warren Mississippi, RB, Gulf Opportunity Zone Bonds, International Paper Co. Project, Series A, 5.38%, 12/01/35

     400        449,884   

Mississippi Development Bank, RB, Special Obligation:

    

CAB, Hinds Community College District (AGM), 5.00%, 4/01/36

     845        928,097   

County of Jackson Limited Tax Note (AGC), 5.50%, 7/01/32

     1,750        2,000,863   

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

     2,100        2,374,554   
    

 

 

 
               5,753,398   

Missouri — 3.0%

    

Missouri Development Finance Board, RB, Annual Appropriation Sewer System, Series B, 5.00%, 11/01/41

     900        970,830   

Missouri State Health & Educational Facilities Authority, RB:

    

A.T. Still University of Health Sciences, 5.25%, 10/01/31

     500        556,090   

A.T. Still University of Health Sciences, 4.25%, 10/01/32

     320        339,379   

A.T. Still University of Health Sciences, 5.00%, 10/01/39

     500        565,940   

Heartland Regional Medical Center, 4.13%, 2/15/43

     400        409,364   

University of Central Missouri, Series C-2, 4.00%, 10/01/28

     400        425,104   

University of Central Missouri, Series C-2, 5.00%, 10/01/34

     1,000        1,138,320   

Missouri State Health & Educational Facilities Authority, Refunding RB, CoxHealth, Series A, 5.00%, 11/15/38

     800        891,352   
    

 

 

 
               5,296,379   

Montana — 1.1%

    

State of Montana Board of Regents, RB, 5.00%, 11/15/43

     1,750        2,002,193   

Nebraska — 3.2%

    

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

     600        658,158   

Douglas County Hospital Authority No. 2, RB, Madonna Rehabilitation Hospital Project, Series 2014:

    

4.00%, 5/15/33

     1,220        1,232,139   

5.00%, 5/15/44

     250        274,763   

Minden Public Schools, GO, 4.00%, 12/15/39

     500        510,805   

Nebraska Public Power District, Refunding RB:

    

Series A, 5.00%, 1/01/32

     250        282,702   

Series A, 4.00%, 1/01/44

     400        414,384   

Series A-2, 5.00%, 1/01/40

     2,000        2,231,340   
    

 

 

 
               5,604,291   

Nevada — 1.6%

    

City of Las Vegas Nevada, Special Assessment, No. 809 Summerlin Area, 5.65%, 6/01/23

     1,200        1,212,168   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    25


Schedule of Investments (continued)

  

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Nevada (concluded)

    

County of Clark Nevada, Refunding ARB, Department of Aviation, Subordinate Lien, Series A-2, 4.25%, 7/01/36

   $ 1,000      $ 1,055,570   

County of Clark Nevada, Refunding RB, Alexander Dawson School Nevada Project, 5.00%, 5/15/29

     575        601,473   
    

 

 

 
               2,869,211   

New Jersey — 10.8%

    

County of Middlesex New Jersey Improvement Authority, RB, Heldrich Center Hotel, Sub-Series B, 6.25%, 1/01/37 (d)(e)

     915        45,604   

New Jersey EDA, RB:

    

Continental Airlines, Inc. Project, Series B, AMT, 5.63%, 11/15/30

     660        745,708   

The Goethals Bridge Replacement Project, AMT (AGM), 5.13%, 7/01/42

     200        220,054   

Rutgers — The State University of New Jersey, College Avenue Redevelopment Project, 5.00%, 6/15/38

     450        513,544   

New Jersey EDA, Refunding RB, Special Assessment, Kapkowski Road Landfill Project, 6.50%, 4/01/28

     7,500        9,396,450   

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

    

7.13%, 6/01/19

     630        787,223   

7.50%, 6/01/19

     800        1,012,096   

New Jersey Health Care Facilities Financing Authority, Refunding RB, St. Barnabas Health Care System, Series A:

    

4.63%, 7/01/23

     510        569,879   

5.63%, 7/01/37

     1,700        1,955,986   

5.00%, 7/01/25

     500        570,240   

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series AA, 6.50%, 10/01/38

     235        244,174   

New Jersey Transportation Trust Fund Authority, RB, Transportation Program, Series AA, 5.00%, 6/15/44

     3,030        3,248,614   
    

 

 

 
               19,309,572   

New York — 8.7%

    

City of New York New York, GO, Fiscal 2014, Sub-Series A-1:

    

5.00%, 8/01/29

     400        465,648   

5.00%, 8/01/35

     1,580        1,811,217   

City of New York New York Industrial Development Agency, ARB, American Airlines, Inc., JFK International Airport, AMT, 7.75%, 8/01/31 (g)

     3,165        3,439,469   

City of New York New York Industrial Development Agency, RB, PILOT, Queens Baseball Stadium (AMBAC), 5.00%, 1/01/39

     1,500        1,546,830   

County of Westchester New York Healthcare Corp., Refunding RB, Senior Lien, Remarketing, Series A, 5.00%, 11/01/30

     1,500        1,652,745   

Metropolitan Transportation Authority, RB, Series B, 5.25%, 11/15/39

     3,335        3,873,903   

New York Counties Tobacco Trust IV, Refunding RB, Settlement Pass-Through, Turbo Term, Series A, 6.25%, 6/01/41 (h)

     900        916,038   

New York Liberty Development Corp., Refunding RB:

    

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

     800        917,848   

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

     405        452,559   

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

     400        416,032   
    

 

 

 
               15,492,289   
Municipal Bonds   

Par  

(000)

    Value  

North Carolina — 2.0%

    

County of Gaston North Carolina Industrial Facilities & Pollution Control Financing Authority, RB, Exempt Facilities, National Gypsum Co. Project, AMT, 5.75%, 8/01/35

   2,695      2,700,228   

North Carolina Medical Care Commission, Refunding RB, University Health System, Series D, 6.25%, 12/01/33

     800        923,216   
    

 

 

 
               3,623,444   

North Dakota — 0.5%

    

City of Fargo North Dakota, Refunding RB, University Facilities Development Foundation Project, 3.00%, 12/01/30

     400        394,068   

County of Burleigh North Dakota, Refunding RB, St. Alexius Medical Center Project, Series A, 5.00%, 7/01/35

     480        520,622   
    

 

 

 
               914,690   

Ohio — 2.3%

    

City of Dayton Ohio Airport Revenue, Refunding ARB, James M. Cox Dayton International Airport, AMT, 4.00%, 12/01/32

     2,000        2,049,300   

Northeast Ohio Regional Sewer District, Refunding RB, 4.00%, 11/15/49

     2,000        2,060,040   
    

 

 

 
               4,109,340   

Oklahoma — 0.8%

    

Oklahoma Municipal Power Authority, RB, Power Supply System, Series A, 4.00%, 1/01/38

     1,140        1,182,727   

Stillwater Utilities Authority, RB, Series A, 4.00%, 10/01/42

     250        263,653   
    

 

 

 
               1,446,380   

Oregon — 2.1%

    

Central Oregon Community College District, GO, 4.00%, 6/01/40

     450        471,411   

County of Jefferson Oregon, GO:

    

5.00%, 6/01/40

     615        707,662   

5.00%, 6/01/45

     875        1,000,265   

County of Umatilla Pendleton Oregon School District No. 16R, GO, Series A, 4.00%, 6/15/38

     265        279,525   

Lane County School District No. 19 Springfield, GO, CAB, Series B, 0.00%, 6/15/40 (c)

     1,000        350,630   

Oregon Health & Science University, RB, Series A, 5.75%, 7/01/39

     750        874,447   
    

 

 

 
               3,683,940   

Pennsylvania — 3.9%

    

County of Allegheny Pennsylvania IDA, Refunding RB, U.S. Steel Corp. Project, 6.55%, 12/01/27

     1,695        1,966,115   

Delaware River Port Authority, RB:

    

4.50%, 1/01/32

     1,500        1,657,635   

Series D (AGM), 5.00%, 1/01/40

     2,600        2,914,444   

Pennsylvania Economic Development Financing Authority, RB, AMT, 5.00%, 12/31/38 (f)

     330        363,637   
    

 

 

 
               6,901,831   

Rhode Island — 1.3%

    

Rhode Island Health & Educational Building Corp., RB, Hospital Financing, LifeSpan Obligation, Series A (AGC), 7.00%, 5/15/39

     1,000        1,198,040   

State of Rhode Island, COP, School for the Deaf Project, Series C (AGC), 5.38%, 4/01/28

     900        1,018,638   
    

 

 

 
               2,216,678   

 

See Notes to Financial Statements.

 

                
26    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (continued)

  

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Tennessee — 2.5%

    

Chattanooga Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/40

   $ 1,950      $ 2,207,946   

County of Chattanooga-Hamilton Hospital Authority, Refunding RB, 5.00%, 10/01/44

     875        956,524   

County of Memphis-Shelby Tennessee Sports Authority, Inc., Refunding RB, Memphis Arena Project, Series A, 5.38%, 11/01/28

     275        321,049   

Johnson City Health & Educational Facilities Board, RB, Mountain States Health, Series A, 5.00%, 8/15/42

     800        873,296   
    

 

 

 
               4,358,815   

Texas — 16.6%

    

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B (a):

    

7.13%, 12/01/18

     500        612,960   

7.25%, 12/01/18

     1,750        2,153,427   

County of Harris Texas Houston Sports Authority, Refunding RB, CAB, Senior Lien, Series G (NPFGC), 0.00%, 11/15/41 (c)

     11,690        3,066,988   

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

     1,500        1,727,835   

County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A, 0.00%, 9/15/38 (c)

     10,760        3,812,591   

Leander Texas ISD, GO, Refunding CAB Series D, 0.00%, 8/15/35 (c)

     4,000        1,716,080   

Red River Education Financing Corp., RB, Texas Christian University Project, 5.25%, 3/15/38

     760        880,886   

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        2,416,960   

Texas State Turnpike Authority, RB, CAB (AMBAC), 0.00%, 8/15/35 (c)

     45,000        13,200,750   
    

 

 

 
               29,588,477   

U.S. Virgin Islands — 1.4%

    

Virgin Islands Public Finance Authority, Refunding RB, Series C, 4.50%, 10/01/44

     2,500        2,517,350   

Vermont — 2.9%

    

University of Vermont & State Agricultural College, Refunding RB, 4.00%, 10/01/37

     2,360        2,465,185   

Vermont Educational & Health Buildings Financing Agency, Refunding RB, Fletcher Allen Health Hospital, Series B (AGM), 5.00%, 12/01/34

     1,590        1,710,061   

Vermont Student Assistance Corp., RB, Series A, 4.13%, 6/15/30

     1,000        1,016,580   
    

 

 

 
               5,191,826   

Virginia — 0.6%

    

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

     880        1,022,586   

Washington — 0.9%

    

Washington Health Care Facilities Authority, RB, MultiCare Health System, Series B (AGC), 6.00%, 8/15/39

     1,400        1,640,100   

West Virginia — 1.2%

    

City of Wheeling West Virginia Waterworks & Sewerage System, RB, 5.00%, 6/01/38

     1,000        1,128,940   
Municipal Bonds   

Par  

(000)

    Value  

West Virginia (concluded)

    

West Virginia Hospital Finance Authority, Refunding RB, Valley Health System Obligation Group Series 2014, 5.00%, 1/01/44

   900      1,000,440   
    

 

 

 
               2,129,380   

Wisconsin — 0.6%

    

WPPI Energy Power Supply Systems, Refunding RB, Series A:

    

5.00%, 7/01/36

     330        376,777   

5.00%, 7/01/37

     665        757,535   
    

 

 

 
               1,134,312   
Total Municipal Bonds — 137.4%              244,795,028   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (i)
 

Colorado — 2.2%

    

Colorado Health Facilities Authority, RB, Catholic Health, Series C-7 (AGM), 5.00%, 9/01/36

     3,750        4,021,500   

New Jersey — 0.9%

    

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

     1,400        1,528,591   

New York — 14.2%

    

City of New York New York, GO, Fiscal 2015, Series B, 4.00%, 8/01/32

     3,990        4,244,602   

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

     450        517,369   

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System:

    

2nd General Resolution, Fiscal 2013, Series CC, 5.00%, 6/15/47

     6,000        6,791,295   

2nd General Resolution, Series FF-2, 5.50%, 6/15/40

     405        468,266   

Series A, 4.75%, 6/15/30

     3,000        3,253,830   

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

     2,500        2,907,168   

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

     2,505        2,890,895   

State of New York Dormitory Authority, RB, New York University, Series A, 5.00%, 7/01/38

     2,199        2,449,227   

State of New York Thruway Authority, Refunding RB, Transportation, Personal Income Tax, Series A, 5.00%, 3/15/31

     1,560        1,807,884   
    

 

 

 
               25,330,536   

Ohio — 2.0%

    

County of Montgomery Ohio, RB, Catholic Health, Series C-1 (AGM), 5.00%, 10/01/41

     1,260        1,348,212   

Ohio Higher Educational Facility Commission, RB, Cleveland Clinic Health, Series A, 5.25%, 1/01/33

     2,000        2,192,200   
    

 

 

 
               3,540,412   

Texas — 1.0%

    

City of San Antonio Texas Public Service Board, RB, Electric & Gas Systems, Junior Lien, 5.00%, 2/01/43

     1,580        1,775,367   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts
20.3%
        36,196,406   

Total Long-Term Investments

(Cost — $254,137,806) — 157.7%

  

  

    280,991,434   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    27


Schedule of Investments (continued)

  

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

 

Short-Term Securities   

Shares

    Value  

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

     1,337,487      $ 1,337,487   

Total Short-Term Securities

(Cost — $1,337,487) — 0.7%

             1,337,487   
Total Investments (Cost — $255,475,293) — 158.4%        282,328,921   
Liabilities in Excess of Other Assets — (2.7)%        (4,742,427

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (10.9%)

   

    (19,499,039
VMTP Shares, at Liquidation Value — (44.8%)        (79,900,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 178,187,455   
    

 

 

 

 

Notes to Schedule of Investments

 

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

 

(b)   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.

 

(c)   Zero-coupon bond.

 

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

 

(e)   Non-income producing security.

 

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

 

Counterparty      Value        Unrealized
Appreciation
(Depreciation)
 

Citigroup Global Markets, Inc.

     $ 2,142,719         $ (2,033

J.P. Morgan Securities LLC

     $ 363,637         $ 3,614   

Pershing LLC

     $ 4,553,920         $ 12,920   

 

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

 

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

 

(i)   Represent bonds transferred to a TOB Trust. In exchange for which the Trust received cash and residual certificates. These bonds serve as collateral in a secured borrowing. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts.

 

(j)   All or a portion of security is subject to a recourse agreement, which may require the Trust 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 Trust could ultimately be required to pay under the agreements, which expire from February 15, 2019 to June 15, 2019, is $2,411,645.

 

(k)   During the six months ended February 28, 2015, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at August 31,
2014
       Net
Activity
       Shares Held
at February 28,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       3,426,637           (2,089,150        1,337,487         $ 464   

 

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

 

Ÿ  

As of February 28, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (305   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 38,978,047      $ (168,378

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

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

 

  Ÿ  

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

 

See Notes to Financial Statements.

 

                
28    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (concluded)

  

BlackRock Municipal Bond Trust (BBK)

 

 

  Ÿ  

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to Note 2 of the Notes to Financial Statements.

As of February 28, 2015, the following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 280,991,434              $ 280,991,434   

Short-Term Securities

  $ 1,337,487                          1,337,487   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 1,337,487         $ 280,991,434              $ 282,328,921   
 

 

 

      

 

 

      

 

    

 

 

 

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

       

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments 2             

Liabilities:

                

Interest rate contracts

  $ (168,378                     $ (168,378

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

       

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of February 28, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 414,000                        $ 414,000   

Liabilities:

                

TOB Trust Certificates

            $ (19,494,759             (19,494,759

VMTP Shares

              (79,900,000             (79,900,000
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 414,000         $ (99,394,759           $ (98,980,759
 

 

 

      

 

 

      

 

    

 

 

 
During the six months ended February 28, 2015, there were no transfers between levels.   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    29


Schedule of Investments February 28, 2015 (Unaudited)

  

Municipal Income Investment Quality Trust (BAF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 1.9%

    

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC):

    

6.13%, 6/01/34

   $ 1,000      $ 1,179,310   

6.00%, 6/01/39

     1,000        1,170,160   

City of Selma Alabama IDB, RB, Gulf Opportunity Zone, International Paper Co. Project, Series A, 5.38%, 12/01/35

     335        374,647   
    

 

 

 
               2,724,117   

California — 16.3%

    

California Educational Facilities Authority, RB, University of Southern California, Series A, 5.25%, 10/01/38

     2,155        2,440,968   

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 6.00%, 8/15/42

     1,120        1,347,517   

County of Sacramento California, ARB, Senior Series A (AGC), 5.50%, 7/01/41

     1,400        1,583,218   

Kern Community College District, GO, Safety, Repair & Improvement, Election of 2002, Series C, 5.50%, 11/01/33

     1,025        1,231,609   

Los Angeles Community College District California, GO, Election of 2001, Series A (NPFGC), 5.00%, 8/01/17 (a)

     1,000        1,105,750   

Los Angeles Department of Water & Power, RB, Power System, Sub-Series A-1, 5.25%, 7/01/38

     1,175        1,318,397   

Los Angeles Municipal Improvement Corp., Refunding LRB, Real Property, Series B (AGC), 5.50%, 4/01/39

     3,210        3,679,816   

Redondo Beach Unified School District, GO, Election of 2008, Series E, 5.50%, 8/01/34

     1,000        1,181,770   

San Diego Public Facilities Financing Authority Water, Refunding RB, Series B (AGC), 5.38%, 8/01/34

     1,125        1,302,131   

State of California, GO, Various Purpose, 5.00%, 4/01/43

     1,000        1,136,600   

State of California Public Works Board, LRB:

    

Department of Corrections & Rehabilitation, Series F, 5.25%, 9/01/33

     505        592,274   

Various Capital Projects, Series I, 5.50%, 11/01/30

     1,000        1,216,150   

Various Capital Projects, Series I, 5.50%, 11/01/31

     1,500        1,816,470   

Township of Washington California Health Care District, GO, Election of 2004, Series B, 5.50%, 8/01/40

     380        457,155   

University of California, Refunding RB, Regents Medical Center, Series J, 5.25%, 5/15/38

     2,355        2,794,773   
    

 

 

 
               23,204,598   

Colorado — 3.8%

    

City & County of Denver Colorado Airport System, ARB, Sub-System, Series B, 5.25%, 11/15/32

     3,250        3,747,802   

Colorado Health Facilities Authority, RB, Hospital, NCMC, Inc. Project, Series B (AGM), 6.00%, 5/15/26

     1,425        1,625,683   
    

 

 

 
               5,373,485   

Florida — 10.2%

    

City of Jacksonville Florida, RB, Series A, 5.25%, 10/01/31

     4,525        5,320,812   

City of Jacksonville Florida, Refunding RB, Series A, 5.25%, 10/01/33

     205        239,372   

County of Miami-Dade Florida, RB, Seaport Department, Series A, 6.00%, 10/01/38

     4,215        5,148,707   

County of Osceola Florida, RB, Sales Tax Revenue, Series A (b):

    

5.00%, 10/01/40

     490        552,480   

5.00%, 10/01/44

     2,125        2,388,266   

Reedy Creek Improvement District, GO, Series A, 5.25%, 6/01/32

     745        867,404   
    

 

 

 
               14,517,041   
Municipal Bonds   

Par  

(000)

    Value  

Georgia — 2.8%

    

City of Atlanta Georgia Department of Aviation, Refunding GARB, Series C, 6.00%, 1/01/30

   2,500      3,045,825   

City of Atlanta Georgia Water & Wastewater, Refunding RB, 5.00%, 11/01/40 (b)

     845        965,151   
    

 

 

 
               4,010,976   

Illinois — 25.3%

    

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

    

Series A, 5.75%, 1/01/39

     825        954,880   

Series C, 6.50%, 1/01/41

     3,740        4,562,239   

City of Chicago Illinois, Refunding GARB, O’Hare International Airport, 3rd Lien, Series C (AGC), 5.25%, 1/01/30

     1,000        1,134,040   

City of Chicago Illinois Transit Authority, RB:

    

Federal Transit Administration, Section 5309, Series A (AGC), 6.00%, 6/01/26

     1,300        1,507,948   

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

     3,185        3,630,900   

Sales Tax Receipts, 5.25%, 12/01/40

     3,000        3,402,300   

Sales Tax Receipts, 5.00%, 12/01/44

     1,385        1,573,858   

Sales Tax Receipts, 5.00%, 12/01/44

     2,500        2,840,900   

City of Chicago Illinois Transit Authority, Refunding RB, Federal Transit Administration, Section 5309 (AGM), 5.00%, 6/01/28

     3,000        3,279,930   

City of Chicago Illinois Wastewater Transmission, RB, 2nd Lien, 5.00%, 1/01/42

     1,480        1,587,004   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago:

    

5.50%, 12/01/38

     1,250        1,446,350   

5.25%, 12/01/43

     3,000        3,390,600   

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

     1,885        2,249,352   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     915        1,076,296   

6.00%, 6/01/28

     260        305,074   

State of Illinois, GO:

    

5.25%, 2/01/31

     610        669,158   

5.25%, 2/01/32

     1,000        1,093,040   

5.50%, 7/01/33

     1,000        1,115,990   

5.50%, 7/01/38

     270        300,097   
    

 

 

 
               36,119,956   

Indiana — 1.9%

    

Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project, Series A (AGC), 5.50%, 1/01/38

     2,415        2,753,124   

Louisiana — 2.0%

    

City of New Orleans Louisiana Aviation Board, Refunding GARB, Restructuring (AGC):

    

Series A-1, 6.00%, 1/01/23

     375        436,579   

Series A-2, 6.00%, 1/01/23

     150        173,901   

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Louisiana Community and Technical Colleges Act 360 Project, 5.00%, 10/01/37

     1,155        1,317,358   

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A, 5.50%, 5/15/29

     790        867,942   
    

 

 

 
               2,795,780   

Michigan — 2.4%

    

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

     1,700        1,875,984   

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

     1,205        1,508,515   
    

 

 

 
               3,384,499   

 

See Notes to Financial Statements.

 

                
30    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (continued)

  

Municipal Income Investment Quality Trust (BAF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Minnesota — 3.0%

    

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

   $ 3,680      $ 4,317,302   

Mississippi — 2.2%

    

Mississippi Development Bank, RB, Special Obligation, Jackson Water & Sewer System Project (AGM), 6.88%, 12/01/40

     1,500        1,960,665   

Mississippi State University Educational Building Corp., Refunding RB, Mississippi State University Improvement Project, 5.25%, 8/01/38

     1,000        1,154,350   
    

 

 

 
               3,115,015   

Nevada — 5.8%

    

County of Clark Nevada, GO, Limited Tax, 5.00%, 6/01/38

     5,410        5,964,092   

County of Clark Nevada Water Reclamation District, GO, Series A, 5.25%, 7/01/34

     2,000        2,289,320   
    

 

 

 
               8,253,412   

New Jersey — 5.5%

    

New Jersey EDA, RB, School Facilities Construction, Series UU, 5.00%, 6/15/40

     610        660,892   

New Jersey Health Care Facilities Financing Authority, RB, Virtua Health, Series A (AGC), 5.50%, 7/01/38

     1,300        1,464,710   

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series CC, 5.25%, 10/01/29

     1,540        1,643,134   

New Jersey Transportation Trust Fund Authority, RB:

    

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

     1,620        1,836,578   

Transportation System, Series A (AGC), 5.50%, 12/15/38

     2,000        2,294,040   
    

 

 

 
               7,899,354   

New York — 4.9%

    

City of New York New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-4 (AGC), 5.50%, 1/15/29

     2,465        2,849,318   

Metropolitan Transportation Authority, RB:

    

Series A, 5.25%, 11/15/38

     1,565        1,807,575   

Series A-1, 5.25%, 11/15/39

     1,000        1,159,760   

New York State Dormitory Authority, Refunding RB, Series C, 5.00%, 3/15/42

     1,000        1,141,290   
    

 

 

 
               6,957,943   

Ohio — 0.4%

    

State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1, 5.25%, 2/15/31

     470        548,786   

Pennsylvania — 2.6%

    

Pennsylvania Turnpike Commission, RB, Series C, 5.00%, 12/01/43

     1,720        1,946,404   

Township of Bristol Pennsylvania School District, GO, 5.25%, 6/01/37

     1,500        1,731,015   
    

 

 

 
               3,677,419   

South Carolina — 1.3%

    

County of Charleston South Carolina, RB, Special Source, 5.25%, 12/01/38

     1,525        1,791,311   

Texas — 14.3%

    

Austin Community College District Public Facility Corp., RB, Educational Facilities Project, Round Rock Campus, 5.25%, 8/01/33

     2,000        2,241,400   

Central Texas Transportation Commission Turnpike System, Refunding RB, Series C, 5.00%, 8/15/42

     315        346,393   

City of Beaumont Texas, GO, Certificates of Obligation, 5.25%, 3/01/37

     980        1,132,968   

City of Frisco Texas ISD, GO, School Building (AGC), 5.50%, 8/15/41

     3,365        3,983,823   
Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

    

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

    

6.00%, 11/15/35

   2,600      3,109,730   

6.00%, 11/15/36

     2,215        2,649,251   

5.38%, 11/15/38

     1,000        1,149,530   

County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Christus Health, Series A (AGC):

    

6.50%, 1/01/19 (a)

     205        245,783   

6.50%, 7/01/37

     795        922,876   

Lower Colorado River Authority, Refunding RB, 5.50%, 5/15/33

     1,000        1,183,210   

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

    

(AGM), 6.00%, 1/01/43

     1,000        1,180,830   

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

     1,500        1,713,690   

Red River Education Financing Corp., RB, Texas Christian University Project, 5.25%, 3/15/38

     440        509,986   
    

 

 

 
               20,369,470   

Virginia — 1.1%

    

City of Lexington Virginia IDA, RB, Washington & Lee University, 5.00%, 1/01/43

     370        414,737   

Virginia Public School Authority, RB, Fluvanna County School Financing, 6.50%, 12/01/18 (a)

     1,000        1,204,970   
    

 

 

 
               1,619,707   

Washington — 1.5%

    

City of Seattle Washington Municipal Light & Power, Refunding RB, Series A, 5.25%, 2/01/36

     1,025        1,175,132   

State of Washington, GO, Various Purposes, Series B, 5.25%, 2/01/36

     795        932,463   
    

 

 

 
               2,107,595   
Total Municipal Bonds — 109.2%              155,540,890   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
 

California — 8.9%

    

San Marcos Unified School District, GO, Election of 2010, Series A, 5.25%, 8/01/31

     10,680        12,727,676   

District of Columbia — 0.6%

    

District of Columbia Water & Sewer Authority, Refunding RB, Senior Lien, Series A, 6.00%, 10/01/18 (a)(d)

     760        896,581   

Illinois — 2.3%

    

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

     2,999        3,315,530   

Kentucky — 0.7%

    

Kentucky State Property & Building Commission, Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/27

     898        1,030,010   

Nevada — 5.0%

    

County of Clark Nevada Water Reclamation District, GO, Limited Tax, 6.00%, 7/01/38

     2,000        2,309,860   

Las Vegas Valley Water District, GO, Refunding, Series C, 5.00%, 6/01/28

     4,100        4,746,119   
    

 

 

 
               7,055,979   

New Jersey — 6.3%

    

New Jersey EDA, RB, School Facilities Construction (AGC):

    

6.00%, 12/15/18 (a)

     329        391,432   

6.00%, 12/15/34

     671        777,838   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    31


Schedule of Investments (continued)

  

Municipal Income Investment Quality Trust (BAF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

New Jersey (concluded)

    

New Jersey State Turnpike Authority, RB, Series A, 5.00%, 1/01/38 (d)

   $ 6,020      $ 6,723,979   

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

     1,000        1,091,851   
    

 

 

 
               8,985,100   

New York — 11.7%

    

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

    

Series BB, 5.25%, 6/15/44

     4,993        5,722,105   

Series FF, 5.00%, 6/15/45

     3,019        3,380,617   

City of New York New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.25%, 1/15/39

     900        1,014,547   

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

     1,000        1,162,867   

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

     2,955        3,410,218   

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

     1,740        2,036,183   
    

 

 

 
        16,726,537   

Texas — 5.5%

    

County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Baylor Health Care System Project, Series A, 5.00%, 11/15/38

     4,456        4,984,262   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

Texas (concluded)

    

North Texas Tollway Authority, RB, Special Projects System, Series A, 5.50%, 9/01/41

   2,310      2,776,782   
    

 

 

 
        7,761,044   

Utah — 0.8%

    

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

     1,004        1,113,475   

Total Municipal Bonds Transferred to

Tender Option Bond Trusts — 41.8%

  

  

    59,611,932   

Total Long-Term Investments

(Cost — $192,700,517) — 151.0%

  

  

    215,152,822   
    
                  
Short-Term Securities    Shares         

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

     2,533,005        2,533,005   

Total Short-Term Securities

(Cost — $2,533,005) — 1.8%

  

  

    2,533,005   
Total Investments (Cost — $195,233,522) — 152.8%        217,685,827   
Liabilities in Excess of Other Assets — (1.0)%        (1,409,946

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (22.2)%

   

    (31,600,484
VMTP Shares, at Liquidation Value — (29.6)%        (42,200,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 142,475,397   
    

 

 

 

 

Notes to Schedule of Investments

 

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

 

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

 

Counterparty   Value        Unrealized
Appreciation
 

Pershing LLC

  $ 965,151         $ 3,532   

Raymond James Financial

  $ 2,940,746         $ 12,589   

 

(c)   Represent bonds transferred to a TOB Trust. In exchange for which the Trust received cash and residual certificates. These bonds serve as collateral in a secured borrowing. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts.

 

(d)   All or a portion of security is subject to a recourse agreement, which may require the Trust 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 Trust could ultimately be required to pay under the agreements, which expire from October 1, 2016 to July 1, 2020, is $7,486,055.

 

(e)   During the six months ended February 28, 2015, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at August 31,
2014
       Net
Activity
       Shares Held
at February 28,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       1,321,380           1,211,625           2,533,005         $ 181   

 

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

 

Ÿ  

As of February 28, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (142   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 18,147,156      $ (78,393

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

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

 

See Notes to Financial Statements.

 

                
32    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (concluded)

  

Municipal Income Investment Quality Trust (BAF)

 

 

  Ÿ  

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

 

  Ÿ  

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to Note 2 of the Notes to Financial Statements.

As of February 28, 2015, the following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments 1

            $ 215,152,822              $ 215,152,822   

Short-Term Securities

  $ 2,533,005                          2,533,005   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 2,533,005         $ 215,152,822              $ 217,685,827   
 

 

 

      

 

 

      

 

    

 

 

 

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

       

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments 2             

Liabilities:

                

Interest rate contracts

  $ (78,393                     $ (78,393

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

       

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of February 28, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 202,000                        $ 202,000   

Liabilities:

                

TOB Trust Certificates

            $ (31,594,766             (31,594,766

VMTP Shares

              (42,200,000             (42,200,000
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 202,000         $ (73,794,766           $ (73,592,766
 

 

 

      

 

 

      

 

    

 

 

 
During the six months ended February 28, 2015, there were no transfers between levels.   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    33


Schedule of Investments February 28, 2015 (Unaudited)

  

BlackRock Municipal Income Quality Trust (BYM)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 3.8%

    

City of Birmingham Alabama Airport Authority, ARB (AGM), 5.50%, 7/01/40

   $ 5,800      $ 6,721,910   

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/39

     1,495        1,749,389   

County of Jefferson Alabama, RB, Limited Obligation School, Series A, 4.75%, 1/01/25

     2,800        2,810,500   

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

     3,800        4,464,734   
    

 

 

 
               15,746,533   

Alaska — 0.3%

    

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

     1,070        1,238,643   

Arizona — 1.5%

    

City of Phoenix Civic Improvement Corp., RB, Civil Plaza Expansion Project, Sub-Series A, 5.00%, 7/01/37

     4,490        4,555,958   

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

    

5.00%, 10/01/27

     1,250        1,409,337   

5.25%, 10/01/28

     250        284,593   
    

 

 

 
               6,249,888   

Arkansas — 0.1%

    

Pulaski County Public Facilities Board, RB, 5.00%, 12/01/42

     435        491,576   

California — 14.4%

    

California Health Facilities Financing Authority, RB, St. Joseph Health System, Series A, 5.75%, 7/01/39

     625        726,150   

California Infrastructure & Economic Development Bank, RB, Bay Area Toll Bridges, 1st Lien, Series A (AMBAC), 5.00%, 1/01/28 (a)

     10,100        13,065,360   

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

     1,620        1,809,167   

Coast Community College District, GO, CAB, Election of 2002, Series C (AGM):

    

5.00%, 8/01/31

     7,450        8,279,483   

0.00%, 8/01/36 (b)

     4,200        1,361,262   

County of Orange California Sanitation District, COP, Series B (AGM), 5.00%, 2/01/17 (a)

     2,500        2,717,225   

Monterey Peninsula Community College District, GO, CAB, Series C (AGM) (b):

    

0.00%, 8/01/31

     13,575        6,219,386   

0.00%, 8/01/32

     14,150        6,126,101   

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

     1,580        1,101,687   

San Diego California Unified School District, GO, CAB, Election of 2008 (b):

    

Series C, 0.00%, 7/01/38

     2,000        777,240   

Series G, 0.00%, 7/01/34

     725        302,731   

Series G, 0.00%, 7/01/35

     775        305,831   

Series G, 0.00%, 7/01/36

     1,155        426,287   

Series G, 0.00%, 7/01/37

     770        267,744   

San Diego California Unified School District, GO, Refunding, CAB, Election of 2008, Series R-1, 0.00%, 7/01/31 (b)

     1,400        760,354   

San Jose California Unified School District, GO, Election of 2002, Series B (NPFGC), 5.00%, 8/01/15 (a)

     2,350        2,398,574   

State of California, GO, Refunding, Various Purpose, 5.00%, 10/01/41

     1,100        1,241,240   
Municipal Bonds   

Par  

(000)

    Value  

California (concluded)

    

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

   5,000      5,689,400   

State of California Public Works Board, LRB:

    

Various Capital Projects, Series I, 5.50%, 11/01/33

     1,415        1,716,084   

Various Judicial Council Projects, Series A, 5.00%, 3/01/38

     780        879,700   

Yosemite Community College District, GO, CAB, Election of 2004, Series D, 0.00%, 8/01/37 (b)

     10,000        4,042,000   
    

 

 

 
               60,213,006   

Colorado — 0.9%

    

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

     960        1,109,059   

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

     2,545        2,871,193   
    

 

 

 
               3,980,252   

District of Columbia — 2.3%

    

District of Columbia Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, 6.75%, 5/15/40

     9,500        9,500,855   

Florida — 13.1%

    

City of Lakeland Florida, RB, Regional Health, 5.00%, 11/15/40

     1,770        1,951,708   

County of Broward Florida School Board, COP, Series A (AGM), 5.25%, 7/01/33

     1,400        1,554,868   

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

     6,750        7,592,670   

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

     3,475        3,757,483   

County of Miami-Dade Florida, RB:

    

CAB, Special Obligation, Sub-Series A (NPFGC), 0.00%, 10/01/38 (b)

     15,000        4,437,300   

Transit System Sales Surtax (AGM), 5.00%, 7/01/35

     1,300        1,435,096   

Seaport Department, Series A, 6.00%, 10/01/38

     2,770        3,383,611   

County of Miami-Dade Florida, Refunding ARB, Aviation, Miami International Airport, Series A-1, 5.50%, 10/01/41

     5,000        5,792,600   

County of Miami-Dade Florida Aviation, Refunding ARB, Series A, 5.50%, 10/01/36

     5,000        5,763,850   

County of Orange Florida School Board, COP, Series A, 5.00%, 8/01/16 (a)

     6,000        6,397,680   

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

     300        334,299   

Florida Housing Finance Corp., RB, Homeowner Mortgage, Series 3 (Ginnie Mae, Fannie Mae & Freddie Mac), 5.45%, 7/01/33

     620        649,772   

Florida State Department of Environmental Protection, RB, Florida Forever Project, Series B (NPFGC), 5.00%, 7/01/27

     6,150        6,744,213   

Reedy Creek Improvement District, GO, Series A, 5.25%, 6/01/33

     1,340        1,556,973   

South Florida Water Management District, COP, (AMBAC), 5.00%, 10/01/36

     1,000        1,060,600   

Tohopekaliga Water Authority, Refunding RB, Series A, 5.25%, 10/01/36

     2,000        2,324,500   
    

 

 

 
               54,737,223   

Georgia — 2.9%

    

City of Atlanta Georgia Department of Aviation, Refunding GARB, Series C, 6.00%, 1/01/30

     7,500        9,137,475   

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

     1,250        1,368,288   

 

See Notes to Financial Statements.

 

                
34    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (continued)

  

BlackRock Municipal Income Quality Trust (BYM)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Georgia (concluded)

    

County of Gainesville Georgia & Hall Hospital Authority, Refunding RB, Northeast Georgia Health System, Inc. Project, Series A, 5.50%, 8/15/54

   $ 545      $ 635,045   

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

    

5.00%, 4/01/31

     210        233,484   

5.00%, 4/01/33

     155        171,444   

5.00%, 4/01/44

     695        761,963   
    

 

 

 
               12,307,699   

Hawaii — 1.4%

    

State of Hawaii Harbor System, RB, Series A, 5.50%, 7/01/35

     5,000        5,767,550   

Illinois — 14.5%

    

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

    

Project, 5.25%, 1/01/33

     3,000        3,120,300   

5.00%, 1/01/34

     6,600        6,741,504   

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

     4,875        5,188,121   

City of Chicago Illinois O’Hare International Airport, GARB, 3rd Lien, Series A, 5.63%, 1/01/35

     1,525        1,757,242   

City of Chicago Illinois O’Hare International Airport, Refunding GARB, Senior Lien, Series D, 5.25%, 1/01/34

     9,800        11,227,468   

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

     600        652,392   

City of Chicago Illinois Transit Authority, RB:

    

5.25%, 12/01/49

     3,500        3,993,500   

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

     650        741,000   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago:

    

5.13%, 12/01/38

     7,700        8,655,262   

5.50%, 12/01/38

     1,000        1,157,080   

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

     310        345,200   

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project, Series B, 4.25%, 6/15/42

     755        774,351   

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

     710        833,086   

State of Illinois, GO:

    

5.25%, 2/01/33

     2,435        2,652,007   

5.50%, 7/01/33

     880        982,071   

5.25%, 2/01/34

     5,910        6,422,870   

5.50%, 7/01/38

     1,475        1,639,418   

5.00%, 2/01/39

     2,200        2,326,478   

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

     1,020        1,144,175   
    

 

 

 
               60,353,525   

Indiana — 1.9%

    

Indiana Finance Authority, RB, CWA Authority Project, 1st Lien, Series A, 5.25%, 10/01/38

     1,100        1,266,408   

Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project, Series A (AGC), 5.50%, 1/01/38

     5,750        6,555,058   
    

 

 

 
               7,821,466   

Iowa — 2.2%

    

Iowa Finance Authority, RB, Iowa Health Care Facilities:

    

Genesis Health System, 5.50%, 7/01/33

     3,000        3,542,610   

Series A (AGC), 5.63%, 8/15/37

     5,000        5,739,100   
    

 

 

 
               9,281,710   
Municipal Bonds   

Par  

(000)

    Value  

Kentucky — 0.4%

    

State of Kentucky Property & Building Commission, Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/29

   1,500      1,700,340   

Louisiana — 1.6%

    

Louisiana Local Government Environmental Facilities & Community Development Authority, RB:

    

East Baton Rouge Sewerage Commission Projects, Sub-Lien, Series A, 5.00%, 2/01/43

     285        318,126   

LCTCS Act 360 Project, 5.00%, 10/01/39

     880        1,002,144   

State of Louisiana Gasoline & Fuels Tax, RB, Series A (AGM), 5.00%, 5/01/16 (a)

     5,000        5,270,600   
    

 

 

 
               6,590,870   

Massachusetts — 0.4%

    

Massachusetts School Building Authority, RB, Dedicated Sales Tax, Senior, Series A, 5.00%, 5/15/43

     1,395        1,588,068   

Michigan — 4.8%

    

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

     3,000        3,336,360   

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

     1,100        1,306,833   

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

     9,050        10,155,639   

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

    

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

     2,000        2,261,240   

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

     800        907,568   

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

     1,500        1,698,810   

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

     430        482,193   
    

 

 

 
               20,148,643   

Nebraska — 1.7%

    

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

     6,345        7,090,601   

Nevada — 1.9%

    

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

    

5.25%, 7/01/42

     3,000        3,397,530   

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

     4,100        4,645,300   
    

 

 

 
               8,042,830   

New Jersey — 6.7%

    

New Jersey EDA, RB, School Facilities Construction, Series UU:

    

5.00%, 6/15/34

     635        693,153   

5.00%, 6/15/40

     1,570        1,700,985   

New Jersey Educational Facilities Authority, RB, Higher Educational Capital Improvement Fund, Series A, 5.00%, 9/01/26

     900        1,014,102   

New Jersey Transportation Trust Fund Authority, RB:

    

5.00%, 6/15/36

     5,070        5,458,210   

CAB, Transportation System, Series A, 0.00%, 12/15/38 (b)

     5,845        1,829,719   

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

     1,660        1,862,520   

Transportation Program, Series AA, 5.00%, 6/15/38

     1,945        2,091,575   

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

     3,000        3,385,230   

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

     3,785        4,291,017   

Transportation System, Series B,
5.25%, 6/15/36

     5,000        5,458,100   
    

 

 

 
               27,784,611   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    35


Schedule of Investments (continued)

  

BlackRock Municipal Income Quality Trust (BYM)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

New York — 2.2%

    

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

   $ 1,950      $ 2,253,303   

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

     1,650        1,915,221   

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

     770        895,479   

Metropolitan Transportation Authority, RB, Dedicated Tax Fund, Series A (NPFGC), 5.00%, 11/15/31

     2,500        2,676,975   

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

     1,300        1,515,527   
    

 

 

 
               9,256,505   

Ohio — 0.7%

    

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

     610        765,123   

State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1:

    

5.25%, 2/15/32

     780        907,132   

5.25%, 2/15/33

     1,095        1,270,102   
    

 

 

 
               2,942,357   

Pennsylvania — 1.5%

    

Pennsylvania Higher Educational Facilities Authority, Refunding RB, 5.25%, 9/01/50

     3,750        4,195,950   

Pennsylvania Turnpike Commission, RB:

    

Series A, 5.00%, 12/01/38

     695        789,770   

Series C, 5.50%, 12/01/33

     630        752,132   

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

     625        744,988   
    

 

 

 
               6,482,840   

South Carolina — 4.2%

    

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

     260        318,971   

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

     5,000        5,612,150   

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

    

Series A, 5.50%, 12/01/54

     6,960        8,082,439   

Series E, 5.50%, 12/01/53

     610        703,909   

State of South Carolina Public Service Authority, Refunding RB, Santee Cooper, Series B, 5.00%, 12/01/38

     2,360        2,649,454   
    

 

 

 
               17,366,923   

Tennessee — 0.3%

    

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

     940        1,091,349   

Texas — 21.2%

    

Central Texas Turnpike System, Refunding RB, 2nd Tier, Series C, 5.00%, 8/15/34

     1,625        1,804,741   

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

     615        693,333   

Comal Texas ISD, GO, School Building (PSF-GTD), 5.00%, 2/01/16 (a)

     2,500        2,610,925   

Coppell Texas ISD, GO, CAB, Refunding (PSF-GTD), 0.00%, 8/15/30 (b)

     10,030        6,299,442   

County of Harris Texas, GO, Refunding (NPFGC) (b):

    

0.00%, 8/15/25

     7,485        5,843,914   

0.00%, 8/15/28

     10,915        7,646,831   

County of Harris Texas Houston Sports Authority, Refunding RB (b):

    

3rd Lien, Series A-3 (NPFGC), 0.00%, 11/15/38

     16,890        4,731,227   
Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

    

County of Harris Texas Houston Sports Authority, Refunding RB (b) (concluded):

    

CAB, Junior Lien, Series H (NPFGC), 0.00%, 11/15/38

   5,785      1,738,508   

CAB, Junior Lien, Series H (NPFGC), 0.00%, 11/15/39

     6,160        1,739,030   

County of Midland Texas Fresh Water Supply District No. 1, RB, Series A (b):

    

CAB, City of Midland Project, 0.00%, 9/15/36

     2,340        924,300   

0.00%, 9/15/34

     5,000        2,230,200   

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

     1,090        1,271,572   

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

     3,775        1,380,857   

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

     2,980        3,236,280   

North Texas Tollway Authority, RB:

    

CAB, Special Project System, Series B, 0.00%, 9/01/37 (b)

     1,975        671,855   

Convertible CAB, Series C, 0.00%, 9/01/45 (c)

     2,500        2,533,875   

Special Projects System, Series A, 6.00%, 9/01/41

     1,000        1,209,990   

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

    

6.00%, 1/01/28

     625        731,712   

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

     23,050        25,739,935   

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

    

5.00%, 12/15/31

     2,105        2,329,393   

5.00%, 12/15/32

     3,600        3,957,912   

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

     3,160        3,499,700   

Wylie Independent School District, GO, 0.00%, 8/15/40 (b)(d)

     15,300        5,489,946   
    

 

 

 
               88,315,478   

Washington — 2.3%

    

County of King Washington Sewer, Refunding RB (AGM), 5.00%, 1/01/16 (a)

     2,200        2,289,232   

Washington Health Care Facilities Authority, RB:

    

MultiCare Health System, Remarketing, Series B, 5.00%, 8/15/44

     2,000        2,169,600   

MultiCare Health System, Series C (AGC), 5.50%, 8/15/43

     4,000        4,436,800   

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

     675        759,476   
    

 

 

 
               9,655,108   

Wisconsin — 0.4%

    

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

     1,500        1,686,420   
Total Municipal Bonds — 109.6%              457,432,869   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
              

Arizona — 0.7%

    

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

     1,300        1,469,299   

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

     1,500        1,642,995   
    

 

 

 
               3,112,294   

 

See Notes to Financial Statements.

 

                
36    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (continued)

  

BlackRock Municipal Income Quality Trust (BYM)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  

California — 7.6%

    

California State University, RB, Systemwide, Series A (AGM), 5.00%, 11/01/33 (f)

   $ 3,379      $ 3,751,531   

California State University, Refunding RB, Systemwide, Series A (AGM), 5.00%, 11/01/32

     8,000        8,689,440   

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

     4,870        5,393,233   

Foothill-De Anza Community College District, GO, Election of 1999, Series C (NPFGC), 5.00%, 8/01/15 (a)

     7,500        7,656,000   

Los Angeles Community College District California, GO, Election of 2001, Series A (AGM), 5.00%, 8/01/17 (a)

     5,000        5,528,750   

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

     449        518,618   
    

 

 

 
               31,537,572   

District of Columbia — 0.3%

    

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

     1,080        1,272,686   

Florida — 8.3%

    

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

    

5.00%, 10/01/32 (f)

     3,000        3,266,970   

5.00%, 10/01/37

     5,000        5,444,950   

County of Highlands Florida Health Facilities Authority, RB, Adventist, Series C, 5.25%, 11/15/36

     1,800        1,944,342   

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

     1,950        2,184,819   

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

     10,101        11,552,266   

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

     6,096        6,888,564   

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

     2,999        3,284,925   
    

 

 

 
               34,566,836   

Illinois — 9.5%

    

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

     8,310        8,971,809   

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

     2,400        2,863,896   

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

     11,748        12,771,402   

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

     1,400        1,576,105   

State of Illinois Toll Highway Authority, RB:

    

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

     4,499        4,973,294   

Series A, 5.00%, 1/01/38

     7,714        8,566,666   
    

 

 

 
               39,723,172   

Nevada — 1.7%

    

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

     4,197        4,871,269   

County of Clark Nevada Water Reclamation District, GO, Limited Tax, Series B, 5.75%, 7/01/34

     2,024        2,388,202   
    

 

 

 
               7,259,471   

New Jersey — 0.5%

    

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

     2,000        2,183,702   

New York — 10.8%

    

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

     6,240        7,062,947   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  

New York (concluded)

    

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

   1,845      2,131,104   

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

     4,494        4,945,461   

Metropolitan Transportation Authority, RB, 5.25%, 11/15/44

     3,850        4,476,510   

New York City Transitional Finance Authority, Refunding RB, Future Tax Secured, Series B, 5.00%, 11/01/30

     12,500        14,679,875   

New York State Urban Development Corp., RB, Personal Income Tax, General Purpose, Series A-1, 5.00%, 3/15/43

     5,720        6,497,634   

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

     4,500        5,129,865   
    

 

 

 
               44,923,396   

Ohio — 0.2%

    

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

     620        700,879   

South Carolina — 0.2%

    

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

     600        682,806   

Texas — 1.7%

    

City of Houston Texas, Refunding RB, Airport System, Senior Lien, Series A, 5.50%, 7/01/34

     4,167        4,725,070   

County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Baylor Health Care System Project, Series A, 5.00%, 11/15/38

     719        804,634   

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

     1,500        1,632,960   
    

 

 

 
               7,162,664   

Utah — 1.4%

    

Utah Transit Authority, RB, Series A (AGM), 5.00%, 6/15/18 (a)

     5,000        5,669,900   

Virginia — 0.1%

    

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

     400        456,370   

Washington — 1.8%

    

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

     3,494        3,831,494   

Washington Health Care Facilities Authority, Refunding RB, Seattle Children’s Hospital, 5.00%, 10/01/38

     3,210        3,804,010   
    

 

 

 
               7,635,504   

Wisconsin — 1.6%

    

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

    

Froedtert & Community Health Inc., Series A, 5.00%, 4/01/42

     3,520        3,903,997   

Series C, 5.25%, 4/01/39

     2,500        2,756,700   
    

 

 

 
               6,660,697   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 46.4%
        193,547,949   

Total Long-Term Investments

(Cost — $589,406,835) — 156.0%

  

  

    650,980,818   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    37


Schedule of Investments (continued)

  

BlackRock Municipal Income Quality Trust (BYM)

(Percentages shown are based on Net Assets)

 

Short-Term Securities    Shares     Value  

FFI Institutional Tax-Exempt Fund, 0.03% (g)(h)

     5,809,865      $ 5,809,865   

Total Short-Term Securities

(Cost — $5,809,865) — 1.4%

  

  

    5,809,865   
Total Investments (Cost — $595,216,700) — 157.4%        656,790,683   
Other Assets Less Liabilities — 0.9%        3,675,035   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (25.4%)

   

    (106,070,537
VMTP Shares, at Liquidation Value — (32.9%)        (137,200,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 417,195,181   
    

 

 

 
Notes to Schedule of Investments

 

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

 

(b)   Zero-coupon bond.

 

(c)   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 reflects the current yield as of report date.

 

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

 

Counterparty      Value        Unrealized
Appreciation
 

Hutchinson, Shockey, Erley & Co.

     $ 5,489,946         $ 15,147   

 

(e)   Represent bonds transferred to a TOB Trust. In exchange for which the Trust received cash and residual certificates. These bonds serve as collateral in a secured borrowing. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts.

 

(f)   All or a portion of security is subject to a recourse agreement, which may require the Trust 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 Trust could ultimately be required to pay under the agreements, which expire from February 1, 2016 to December 1, 2029, is $14,459,523.

 

(g)   During the six months ended February 28, 2015, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at August 31,
2014
       Net
Activity
       Shares Held
at February 28,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       4,098,719           1,711,146           5,809,865         $ 729   

 

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

 

Ÿ  

As of February 28, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (165   5-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 19,681,406      $ (38,911
  (363   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015     46,390,266        (200,398
  Total              $ (239,309
         

 

 

 

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

 

See Notes to Financial Statements.

 

                
38    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (concluded)

  

BlackRock Municipal Income Quality Trust (BYM)

 

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to Note 2 of the Notes to Financial Statements.

As of February 28, 2015, the following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3        Total  

Assets:

                
Investments:                 

Long-Term Investments 1

            $ 650,980,818                   $ 650,980,818   

Short-Term Securities

  $ 5,809,865                               5,809,865   
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 5,809,865         $ 650,980,818                   $ 656,790,683   
 

 

 

      

 

 

      

 

 

      

 

 

 

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

       

     Level 1        Level 2        Level 3        Total  
Derivative Financial Instruments 2             

Liabilities:

                

Interest rate contracts

  $ (239,309                          $ (239,309

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

       

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of February 28, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 641,000                             $ 641,000   

Liabilities:

                

TOB Trust Certificates

            $ (106,051,858                  (106,051,858

VMTP Shares

              (137,200,000                  (137,200,000
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 641,000         $ (243,251,858                $ (242,610,858
 

 

 

      

 

 

      

 

 

      

 

 

 
During the six months ended February 28, 2015, there were no transfers between levels.   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    39


Schedule of Investments February 28, 2015 (Unaudited)

  

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 2.0%

    

County of Jefferson Alabama, RB, Limited Obligation School, Series A, 5.25%, 1/01/19

   $ 1,620      $ 1,626,075   

County of Jefferson Alabama Sewer, Refunding RB:

    

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

     540        591,586   

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

     1,320        1,462,837   

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

     3,220        3,849,092   
    

 

 

 
               7,529,590   

Arizona — 2.1%

    

Salt Verde Financial Corp., RB, Senior:

    

5.00%, 12/01/32

     5,635        6,470,670   

5.00%, 12/01/37

     1,000        1,153,350   
    

 

 

 
               7,624,020   

California — 10.9%

    

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

     2,480        2,944,504   

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 6.00%, 8/15/42

     3,500        4,210,990   

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

     1,365        1,567,320   

California HFA, RB, S/F Housing, Home Mortgage, Series K, AMT, 5.50%, 2/01/42

     395        403,090   

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

    

5.25%, 8/15/39

     160        176,293   

5.25%, 8/15/49

     395        432,766   

California Pollution Control Financing Authority, RB, Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 11/21/45 (b)

     1,655        1,787,764   

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A:

    

5.25%, 5/15/39

     860        981,226   

Senior, 5.00%, 5/15/40

     6,500        7,418,190   

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

     380        449,232   

County of Stanislaus California Tobacco Securitization Agency, RB, CAB, Sub-Series C,
0.00%, 6/01/55 (c)

     9,710        127,589   

San Marcos Unified School District, GO, CAB, Election of 2010, Series B (c):

    

0.00%, 8/01/33

     3,000        1,435,560   

0.00%, 8/01/43

     2,500        737,650   

State of California, GO, Various Purposes:

    

6.00%, 3/01/33

     1,760        2,140,001   

6.50%, 4/01/33

     10,645        12,992,755   

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

    

Series I, 5.00%, 11/01/38

     825        938,050   

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

     1,280        1,572,646   
    

 

 

 
               40,315,626   

Colorado — 1.4%

    

Colorado Health Facilities Authority, Refunding RB:

    

Catholic Health Initiative, Series A, 5.50%, 7/01/34

     2,330        2,676,564   

Evangelical Lutheran Good Samaritan Society Project, 5.00%, 12/01/42

     925        986,337   

Park Creek Metropolitan District, Refunding RB, Senior Limited Property Tax, 5.50%, 12/01/37

     1,375        1,395,776   
    

 

 

 
               5,058,677   
Municipal Bonds   

Par  

(000)

    Value  

Connecticut — 0.3%

    

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

   1,005      1,123,691   

Delaware — 1.7%

    

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

     1,240        1,436,540   

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

     4,275        4,683,476   
    

 

 

 
               6,120,016   

District of Columbia — 5.2%

    

District of Columbia, Refunding RB, Kipp Charter School, Series A, 6.00%, 7/01/43

     820        958,785   

District of Columbia Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed:

    

6.50%, 5/15/33

     3,250        4,113,070   

6.75%, 5/15/40

     11,500        11,501,035   

Metropolitan Washington Airports Authority, Refunding RB, Dulles Toll Road, 1st Senior Lien, Series A:

    

5.00%, 10/01/39

     550        606,292   

5.25%, 10/01/44

     2,000        2,259,060   
    

 

 

 
               19,438,242   

Florida — 5.2%

    

City of Atlantic Beach Florida, RB, Health Care Facilities, Fleet Landing Project, Series B, 5.63%, 11/15/43

     1,445        1,602,808   

City of Jacksonville Florida Port Authority, Refunding RB, AMT, 5.00%, 11/01/38

     1,665        1,787,710   

County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport:

    

Series A, AMT (AGC), 5.25%, 10/01/38

     2,855        3,169,193   

Series A-1, 5.38%, 10/01/41

     1,255        1,441,330   

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

     5,000        5,718,200   

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

     3,300        4,016,463   

Stevens Plantation Community Development District, Special Assessment, Series A,
7.10%, 5/01/35 (d)(e)

     1,895        1,413,784   
    

 

 

 
               19,149,488   

Georgia — 1.5%

    

City of Atlanta Georgia Water & Wastewater, Refunding RB, 5.00%, 11/01/40 (f)

     3,370        3,849,180   

County of Gainesville Georgia & Hall Hospital Authority, Refunding RB, Northeast Georgia Health System, Inc. Project, Series A, 5.50%, 8/15/54

     555        646,697   

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

     915        1,045,525   
    

 

 

 
               5,541,402   

Hawaii — 0.5%

    

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

     1,480        1,692,380   

Illinois — 22.1%

    

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

    

Series A, 5.75%, 1/01/39

     5,000        5,787,150   

Series C, 6.50%, 1/01/41

     6,430        7,843,635   

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

    

5.00%, 1/01/33

     1,510        1,537,044   

5.00%, 1/01/34

     3,050        3,102,826   

City of Chicago Illinois, GO, Refunding, Project, Series A, 5.25%, 1/01/32

     4,940        5,156,273   

 

See Notes to Financial Statements.

 

                
40    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

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

   $ 895      $ 970,278   

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

     3,485        3,602,828   

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

     1,150        1,304,215   

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

     3,130        3,425,910   

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

     845        977,733   

Illinois Finance Authority, Refunding RB:

    

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

     1,060        1,190,104   

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

     1,750        2,004,485   

Friendship Village Schaumburg, Series A, 5.63%, 2/15/37

     455        455,064   

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

    

5.50%, 6/15/15 (a)

     3,055        3,133,513   

5.50%, 6/15/30

     7,445        7,624,350   

Illinois State Toll Highway Authority, RB, Senior:

    

Series A, 5.00%, 1/01/38

     2,520        2,828,650   

Series C, 5.00%, 1/01/36

     3,515        3,997,785   

Series C, 5.00%, 1/01/37

     3,005        3,412,358   

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

    

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

     6,725        7,130,114   

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

     2,725        2,888,554   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     520        611,666   

6.00%, 6/01/28

     1,255        1,472,567   

State of Illinois, GO:

    

5.00%, 2/01/39

     1,640        1,734,284   

Series A, 5.00%, 4/01/35

     2,500        2,650,025   

Series A, 5.00%, 4/01/38

     3,885        4,093,547   

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

     685        771,399   

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

    

5.00%, 4/01/39

     860        964,696   

5.00%, 4/01/44

     1,050        1,175,213   
    

 

 

 
               81,846,266   

Indiana — 4.4%

    

Carmel Redevelopment Authority, Refunding RB, Multipurpose, Series A, 4.00%, 2/01/38

     675        704,531   

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

    

6.75%, 1/01/34

     845        1,033,697   

7.00%, 1/01/44

     3,535        4,350,843   

Indiana Finance Authority, RB, Series A:

    

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

     3,510        4,040,993   

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

     485        519,095   

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

     1,610        1,720,832   

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

     915        1,020,692   

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

     1,200        1,389,756   

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

     1,380        1,543,654   
    

 

 

 
               16,324,093   
Municipal Bonds   

Par  

(000)

    Value  

Iowa — 2.4%

    

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

    

5.00%, 12/01/19

   1,040      1,105,468   

5.50%, 12/01/22

     2,550        2,694,942   

5.25%, 12/01/25

     500        545,780   

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

     1,585        1,694,777   

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

     3,095        2,749,412   
    

 

 

 
               8,790,379   

Kentucky — 0.6%

    

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

     1,060        1,194,758   

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

     1,280        903,360   
    

 

 

 
               2,098,118   

Louisiana — 2.7%

    

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, Series A-1, 6.50%, 11/01/35

     3,650        4,381,788   

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

    

5.50%, 5/15/30

     1,100        1,227,941   

5.25%, 5/15/31

     935        1,038,617   

5.25%, 5/15/32

     1,195        1,342,272   

5.25%, 5/15/33

     1,300        1,454,024   

5.25%, 5/15/35

     545        607,005   
    

 

 

 
               10,051,647   

Maryland — 1.2%

    

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

     475        514,055   

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

     1,240        1,382,488   

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

     2,400        2,716,176   
    

 

 

 
               4,612,719   

Massachusetts — 0.7%

    

Massachusetts Development Finance Agency, Refunding RB, Covanta Energy Project, Series C, AMT, 5.25%, 11/01/42 (b)

     1,530        1,585,493   

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

     955        1,079,370   
    

 

 

 
               2,664,863   

Michigan — 2.8%

    

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

     4,825        5,189,384   

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

     1,500        1,698,345   

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

     940        993,138   

Michigan State Hospital Finance Authority, Refunding RB, Henry Ford Health System, Series A, 5.25%, 11/15/46

     2,305        2,417,277   
    

 

 

 
               10,298,144   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    41


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Missouri — 2.1%

    

370/Missouri Bottom Road/Taussig Road Transportation Development District, RB, 7.20%, 5/01/33

   $ 6,000      $ 6,011,820   

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

     275        308,723   

State of Missouri Health & Educational Facilities Authority, RB, Senior Living Facilities, Lutheran Senior Services, 5.50%, 2/01/42

     1,135        1,237,967   

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

     265        293,257   
    

 

 

 
               7,851,767   

Multi-State — 3.7%

    

Centerline Equity Issuer Trust (b)(h):

    

Series A-4-1, 5.75%, 5/15/15

     1,000        1,008,390   

Series A-4-2, 6.00%, 5/15/19

     3,500        4,012,715   

Series B-3-1, 6.00%, 5/15/15

     5,000        5,042,150   

Series B-3-2, 6.30%, 5/15/19

     3,000        3,471,330   
    

 

 

 
               13,534,585   

Nebraska — 2.3%

    

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

    

5.25%, 9/01/37

     895        1,000,171   

5.00%, 9/01/42

     1,570        1,722,180   

County of Hall Nebraska School District No. 2, GO, Grand Island Public Schools, 5.00%, 12/15/39

     2,275        2,610,858   

County of Lancaster Nebraska Hospital Authority No. 1, Refunding RB, Immanuel Obligation Group, Health Facilities, 5.63%, 1/01/40

     1,245        1,383,569   

County of Sarpy Nebraska Hospital Authority No. 1, Refunding RB, Immanuel Obligation Group, 5.63%, 1/01/40

     1,635        1,816,976   
    

 

 

 
               8,533,754   

Nevada — 0.7%

    

County of Clark Nevada, Refunding RB, Alexander Dawson School Nevada Project, 5.00%, 5/15/29

     2,465        2,578,489   

New Jersey — 6.5%

    

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

    

5.13%, 9/15/23

     2,130        2,322,509   

5.25%, 9/15/29

     2,130        2,326,599   

New Jersey EDA, Refunding RB, Special Assessment, Kapkowski Road Landfill Project, 6.50%, 4/01/28

     7,475        9,365,129   

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

     2,160        2,396,174   

New Jersey Transportation Trust Fund Authority, RB:

    

Transportation Program, Series AA, 5.00%, 6/15/44

     3,760        4,031,284   

Transportation System, Series B, 5.25%, 6/15/36

     2,690        2,936,458   

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

     570        644,602   
    

 

 

 
               24,022,755   

New York — 10.5%

    

City of New York New York Industrial Development Agency, ARB, American Airlines, Inc., JFK International Airport, AMT, 7.75%, 8/01/31 (i)

     6,700        7,281,024   

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

     2,680        3,029,070   

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

     901        1,009,021   
Municipal Bonds   

Par  

(000)

    Value  

New York (concluded)

    

Metropolitan Transportation Authority, RB, Series B:

    

5.25%, 11/15/38

   2,555      2,972,308   

5.25%, 11/15/39

     910        1,057,047   

New York Counties Tobacco Trust IV, Refunding RB, Settlement Pass Through Turbo, Series A, 6.25%, 6/01/41 (b)

     2,000        2,035,640   

New York Liberty Development Corp., Refunding RB:

    

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

     1,335        1,531,659   

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

     5,300        5,570,300   

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

     365        401,274   

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

     910        1,016,861   

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

     3,625        3,633,845   

New York State Dormitory Authority, Refunding RB, General Purpose, Series A, 5.00%, 6/15/31

     1,930        2,252,078   

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

     1,145        1,190,892   

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

    

6.00%, 12/01/42

     1,635        1,924,820   

Special Project, 6.00%, 12/01/36

     1,410        1,664,068   

Westchester Tobacco Asset Securitization, Refunding RB, 5.13%, 6/01/45

     2,500        2,324,150   
    

 

 

 
               38,894,057   

North Carolina — 4.1%

    

County of Gaston North Carolina Industrial Facilities & Pollution Control Financing Authority, RB, Exempt Facilities, National Gypsum Co. Project, AMT, 5.75%, 8/01/35

     6,500        6,512,610   

North Carolina Capital Facilities Finance Agency, Refunding RB, Solid Waste Disposal Facility, Duke Energy Carolinas Project, Series B, 4.63%, 11/01/40

     4,465        4,762,101   

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

     1,525        1,722,320   

North Carolina Medical Care Commission, Refunding RB:

    

1st Mortgage, Aldersgate, 6.25%, 7/01/35

     1,530        1,669,964   

1st Mortgage, Retirement Facilities Whitestone Project, Series A, 7.75%, 3/01/41

     625        710,163   
    

 

 

 
               15,377,158   

Ohio — 2.1%

    

County of Allen Ohio Hospital Facilities, Refunding RB, Catholic Healthcare Partners, Series A, 5.25%, 6/01/38

     3,405        3,865,595   

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

     710        785,636   

County of Montgomery Ohio, Refunding RB, Catholic Health, Series A, 5.00%, 5/01/39

     3,025        3,293,015   
    

 

 

 
               7,944,246   

Pennsylvania — 2.3%

    

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

     2,500        2,704,750   

 

See Notes to Financial Statements.

 

                
42    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Pennsylvania (concluded)

    

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

   $ 1,320      $ 1,411,912   

Pennsylvania Economic Development Financing Authority, RB:

    

Aqua Pennsylvania, Inc. Project, Series B, 5.00%, 11/15/40

     2,065        2,344,332   

Rapid Bridge Pennsylvania, AMT, 5.00%, 6/30/42 (f)

     630        689,970   

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

     1,190        1,345,914   
    

 

 

 
               8,496,878   

South Carolina — 2.4%

    

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

     3,595        4,035,136   

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

     4,170        4,842,496   
    

 

 

 
               8,877,632   

Tennessee — 0.4%

    

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

     1,470        1,656,881   

Texas — 14.4%

    

Brazos River Authority, RB, TXU Electric, Series A, AMT, 8.25%, 10/01/30 (d)(e)

     2,400        114,000   

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/46

     2,350        2,741,439   

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

     390        425,892   

City of Austin Texas Airport System, RB, AMT, 5.00%, 11/15/39

     665        745,944   

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

     1,650        1,908,836   

City of Houston Texas Airport System, Refunding ARB:

    

Senior Lien, Series A, 5.50%, 7/01/39

     1,675        1,891,862   

United Airlines, Inc. Terminal E Project, AMT, 5.00%, 7/01/29

     460        494,804   

City of Houston Texas Utility System, Refunding RB, Combined 1st Lien, Series A (AGC), 6.00%, 11/15/35

     9,145        10,937,877   

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

     485        561,926   

County of Harris Texas-Houston Sports Authority, Refunding RB, 3rd Lien, Series A-3 (NPFGC), 0.00%, 11/15/36 (c)

     25,375        8,054,025   

County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Projects, Series A, 0.00%, 9/15/37 (c)

     6,055        2,261,724   

County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Scott & White Healthcare, 6.00%, 8/15/45

     4,410        5,314,050   

North Texas Tollway Authority, Refunding RB, 2nd Tier System, Series F, 6.13%, 1/01/16 (a)

     6,790        7,119,722   

San Antonio Energy Acquisition Public Facility Corp., RB, Gas Supply, 5.50%, 8/01/24

     3,600        4,327,992   

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        3,625,440   

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

     2,250        2,674,687   
    

 

 

 
               53,200,220   
Municipal Bonds   

Par  

(000)

    Value  

Utah — 0.6%

    

Utah State Charter School Finance Authority, RB, Ogden Preparatory Academy, Series A:

    

3.25%, 10/15/36

   1,035      929,182   

3.25%, 10/15/42

     1,660        1,445,030   
    

 

 

 
               2,374,212   

Virginia — 1.5%

    

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

    

5.25%, 1/01/32

     1,755        1,935,572   

6.00%, 1/01/37

     3,180        3,695,255   
    

 

 

 
               5,630,827   

Washington — 2.3%

    

City of Bellingham Washington Water & Sewer, RB, 5.00%, 8/01/36

     5,050        5,693,774   

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

     2,445        2,911,775   
    

 

 

 
               8,605,549   

Wisconsin — 0.3%

    

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

     910        1,023,095   

Wyoming — 1.5%

    

County of Sweetwater Wyoming, Refunding RB, Idaho Power Co. Project, Remarketing, 5.25%, 7/15/26

     3,355        3,869,154   

Wyoming Municipal Power Agency, Inc., RB, Series A:

    

5.50%, 1/01/33

     800        885,456   

5.50%, 1/01/38

     750        830,115   
    

 

 

 
               5,584,725   
Total Municipal Bonds — 125.4%              464,466,191   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (j)
 

Alabama — 0.7%

    

City of Birmingham Alabama Special Care Facilities Financing Authority, Refunding RB, Ascension Health, Senior Credit, Series C-2, 5.00%, 11/15/36

     2,519        2,703,092   

California — 5.4%

    

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

     2,850        3,217,507   

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

     10,335        11,802,880   

Los Angeles Community College District California, GO, Election of 2001, Series A (AGM), 5.00%, 8/01/17 (a)

     2,530        2,797,548   

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

     1,840        2,126,334   
    

 

 

 
               19,944,269   

Colorado — 2.0%

    

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

    

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

     4,230        4,531,176   

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

     2,710        2,906,204   
    

 

 

 
               7,437,380   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    43


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (j)
  

Par  

(000)

    Value  

Connecticut — 3.0%

    

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

    

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

   $ 5,179      $ 5,605,306   

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

     5,143        5,563,070   
    

 

 

 
               11,168,376   

Georgia — 1.4%

    

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

     4,638        5,170,470   

Massachusetts — 0.7%

    

Massachusetts School Building Authority, RB, Senior, Series B, 5.00%, 10/15/41

     2,461        2,800,221   

New Hampshire — 0.7%

    

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

     2,219        2,539,488   

New York — 9.8%

    

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

    

Series FF-2, 5.50%, 6/15/40

     1,710        1,977,124   

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

     9,149        10,461,241   

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

     1,750        2,035,017   

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

     11,670        13,467,763   

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

     7,040        8,238,349   
    

 

 

 
               36,179,494   

Texas — 3.0%

    

City of San Antonio Texas Public Service Board, RB, Electric & Gas Systems, Junior Lien, 5.00%, 2/01/43

     2,660        2,988,909   

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

     3,720        4,201,033   
Municipal Bonds Transferred to
Tender Option Bond Trusts (j)
  

Par  

(000)

    Value  

Texas (concluded)

    

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

   3,346      3,838,504   
    

 

 

 
               11,028,446   

Utah — 1.2%

    

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

     3,957        4,387,425   

Virginia — 1.8%

    

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

     5,909        6,587,511   

Washington — 3.4%

    

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

     3,029        3,321,724   

State of Washington, GO, Various Purposes, Series E, 5.00%, 2/01/34

     8,113        9,167,516   
    

 

 

 
               12,489,240   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 33.1%
        122,435,412   

Total Long-Term Investments

(Cost — $535,404,623) — 158.5%

  

  

    586,901,603   
    
   
Short-Term Securities    Shares         

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

     872,717        872,717   

Total Short-Term Securities

(Cost — $872,717) — 0.2%

             872,717   
Total Investments (Cost — $536,277,340) — 158.7%        587,774,320   
Other Assets Less Liabilities — 0.8%        2,551,956   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (18.6%)

   

    (68,702,137
VMTP Shares, at Liquidation Value — (40.9%)        (151,300,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 370,324,139   
    

 

 

 

 

Notes to Schedule of Investments

 

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

 

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

 

(c)   Zero-coupon bond.

 

(d)   Non-income producing security.

 

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

 

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

 

Counterparty      Value        Unrealized
Appreciation
 

J.P. Morgan Securities LLC

     $ 689,970         $ 5,040   

Pershing LLC

     $ 3,849,180         $ 14,087   

 

(g)   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.

 

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

 

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

 

(j)   Represent bonds transferred to a TOB Trust. In exchange for which the Trust received cash and residual certificates. These bonds serve as collateral in a secured borrowing. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts.

 

See Notes to Financial Statements.

 

                
44    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (concluded)

  

BlackRock Municipal Income Trust II (BLE)

 

 

(k)   All or a portion of security is subject to a recourse agreement, which may require the Trust 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 Trust could ultimately be required to pay under the agreements, which expire from October 1, 2016 to November 15, 2019, is $14,496,557.

 

(l)   During the six months ended February 28, 2015, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at August 31,
2014
       Net
Activity
       Shares Held
at February 28,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       7,457,326           (6,584,609        872,717         $ 907   

 

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

 

Ÿ  

As of February 28, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Appreciation
 
  (188   10-Year U.S. Treasury Note   Chicago Board of Trade   March 2015   $ 24,143,313      $ 23,195   

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to Note 2 of the Notes to Financial Statements.

As of February 28, 2015, the following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 586,901,603              $ 586,901,603   

Short-Term Securities

  $ 872,717                          872,717   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 872,717         $ 586,901,603              $ 587,774,320   
 

 

 

      

 

 

      

 

    

 

 

 

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

       

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments2             

Assets:

                

Interest rate contracts

  $ 23,195                        $ 23,195   

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

       

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of February 28, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 267,000                        $ 267,000   

Liabilities:

                

TOB Trust Certificates

            $ (68,691,599             (68,691,599

VMTP Shares

              (151,300,000             (151,300,000
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 267,000         $ (219,991,599           $ (219,724,599
 

 

 

      

 

 

      

 

    

 

 

 
During the six months ended February 28, 2015, there were no transfers between levels.   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    45


Schedule of Investments February 28, 2015 (Unaudited)

  

BlackRock MuniHoldings Investment Quality Fund (MFL)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 4.4%

    

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC):

    

6.13%, 6/01/34

   $ 4,980      $ 5,872,964   

6.00%, 6/01/39

     10,995        12,865,909   

City of Selma Alabama IDB, RB, Gulf Opportunity Zone, International Paper Co. Project, Series A, 5.38%, 12/01/35

     1,745        1,951,521   

Mobile Board of Water & Sewer Commissioners, RB (NPFGC), 5.00%, 1/01/16 (a)

     5,500        5,723,080   
    

 

 

 
               26,413,474   

California — 23.0%

    

California Educational Facilities Authority, RB, University of Southern California, Series A, 5.25%, 10/01/38

     8,920        10,103,684   

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 6.00%, 8/15/42

     5,370        6,460,862   

City & County of San Francisco California Airports Commission, Refunding ARB, 2nd Series A, AMT:

    

5.50%, 5/01/28

     3,330        3,968,661   

5.25%, 5/01/33

     2,600        2,984,748   

City of Manteca California Financing Authority, RB, Manteca Sewer (AGC):

    

5.63%, 12/01/33

     2,450        2,876,398   

5.75%, 12/01/36

     3,285        3,849,133   

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

     4,450        5,161,866   

County of Sacramento California, ARB, Senior Series A (AGC), 5.50%, 7/01/41

     5,600        6,332,872   

Kern Community College District, GO, Safety, Repair & Improvement, Election of 2002, Series C, 5.50%, 11/01/33

     4,365        5,244,853   

Los Angeles California Unified School District, GO, Election of 2002, Series D, 5.25%, 7/01/25

     3,485        4,073,686   

Los Angeles Community College District California, GO:

    

Election of 2001, Series A (NPFGC), 5.00%, 8/01/17 (a)

     10,000        11,057,500   

Election of 2008, Series C, 5.25%, 8/01/39

     3,375        3,944,025   

Los Angeles Department of Water & Power, RB, Power System, Sub-Series A-1, 5.25%, 7/01/38

     5,000        5,610,200   

Los Angeles Municipal Improvement Corp., Refunding LRB, Real Property, Series B (AGC), 5.50%, 4/01/39

     2,980        3,416,153   

Redondo Beach Unified School District, GO, Election of 2008, Series E, 5.50%, 8/01/34

     4,110        4,857,075   

San Diego Public Facilities Financing Authority Water, Refunding RB, Series B (AGC), 5.38%, 8/01/34

     4,690        5,428,440   

State of California, GO, Refunding, Various Purposes, 5.00%, 11/01/43

     2,985        3,418,392   

State of California, GO, Various Purposes (AGC), 5.50%, 11/01/39

     15,000        17,692,950   

State of California Public Works Board, LRB, Various Capital Projects, Series I:

    

5.50%, 11/01/30

     4,500        5,472,675   

5.50%, 11/01/31

     2,615        3,166,713   

5.50%, 11/01/33

     2,000        2,425,560   

State of California Public Works Board, RB, Department of Corrections & Rehabilitation, Series F, 5.25%, 9/01/33

     2,240        2,627,117   

Township of Washington California Health Care District, GO, Election of 2004, Series B, 5.50%, 8/01/40

     1,685        2,027,122   

University of California, Refunding RB, The Regents of Medical Center, Series J, 5.25%, 5/15/38

     12,250        14,537,565   
    

 

 

 
               136,738,250   
Municipal Bonds    Par  
(000)
    Value  

Colorado — 2.1%

    

City & County of Denver Colorado Airport System, ARB, Series A, AMT:

    

5.50%, 11/15/28

   $ 2,700      $ 3,179,115   

5.50%, 11/15/30

     1,040        1,215,469   

5.50%, 11/15/31

     1,250        1,457,800   

Colorado Health Facilities Authority, RB, Hospital, NCMC, Inc. Project, Series B (AGM), 6.00%, 5/15/26

     5,925        6,759,418   
    

 

 

 
               12,611,802   

Florida — 9.4%

    

City of Jacksonville Florida, Refunding RB, Series A, 5.25%, 10/01/33

     1,250        1,459,588   

County of Hillsborough Florida Aviation Authority, Refunding ARB, Tampa International Airport, Series A, AMT:

    

5.50%, 10/01/29

     5,360        6,235,985   

5.25%, 10/01/30

     3,255        3,705,622   

County of Lee Florida, Refunding ARB, Series A, AMT, 5.38%, 10/01/32

     7,100        7,870,847   

County of Manatee Florida Housing Finance Authority, RB, S/F Housing, Series A, AMT (Ginnie Mae, Fannie Mae & Freddie Mac), 5.90%, 9/01/40

     350        356,762   

County of Miami-Dade Florida, Refunding RB, Water & Sewer System, Series B, 5.25%, 10/01/29

     2,870        3,394,091   

County of Miami-Dade Florida, RB, Seaport Department:

    

Series A, 5.38%, 10/01/33

     3,145        3,591,842   

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

     1,405        1,747,427   

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

     1,885        2,300,963   

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

    

Miami International Airport (AGM), 5.50%, 10/01/41

     3,500        3,942,540   

5.00%, 10/01/31

     5,465        6,107,793   

Florida Housing Finance Corp., Refunding RB, S/F Housing, Homeowner Mortgage, Series 2, AMT (NPFGC), 5.90%, 7/01/29

     3,255        3,276,125   

Osceola County, RB, Series A (b):

    

5.00%, 10/01/40

     2,165        2,441,059   

5.00%, 10/01/44

     4,970        5,585,733   

Reedy Creek Improvement District, GO, Series A, 5.25%, 6/01/32

     3,225        3,754,867   
    

 

 

 
               55,771,244   

Georgia — 0.7%

    

City of Atlanta GA Water & Wastewater Revenue, 5.00%, 11/01/40 (b)

     3,710        4,237,525   

Hawaii — 0.8%

  

State of Hawaii, Department of Transportation, COP, AMT:

    

5.25%, 8/01/25

     1,350        1,596,010   

5.25%, 8/01/26

     2,500        2,934,225   
    

 

 

 
               4,530,235   

Illinois — 28.1%

    

Chicago Midway International Airport, Refunding ARB, 2nd Lien, Series A, AMT, 5.00%, 1/01/33

     4,355        4,813,146   

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

    

Series A, 5.75%, 1/01/39

     7,395        8,559,195   

Series C, 6.50%, 1/01/41

     16,800        20,493,480   

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

    

Project, 5.25%, 1/01/33

     2,640        2,745,864   

5.25%, 1/01/29

     3,135        3,316,548   

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

     2,445        2,650,649   

 

See Notes to Financial Statements.

 

                
46    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Investment Quality Fund (MFL)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Illinois (concluded)

    

City of Chicago Illinois Midway International Airport, Refunding ARB, 2nd Lien, Series A, AMT:

    

5.50%, 1/01/30

   $ 6,500      $ 7,539,350   

5.50%, 1/01/32

     6,275        7,226,666   

City of Chicago Illinois Midway International Airport, Refunding GARB, 2nd Lien, Series A, 5.00%, 1/01/41

     8,020        8,749,419   

City of Chicago Illinois Transit Authority, RB:

    

Federal Transit Administration, Section 5309, Series A (AGC), 6.00%, 6/01/26

     6,315        7,325,147   

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

     1,960        2,234,400   

Sales Tax Receipts, 5.25%, 12/01/40

     10,960        12,429,736   

Sales Tax Receipts, 5.00%, 12/01/44

     2,500        2,840,900   

Sales Tax Receipts, 5.00%, 12/01/44

     8,420        9,568,151   

City of Chicago Illinois Transit Authority, Refunding RB, Federal Transit Administration, Section 5309 (AGM), 5.00%, 6/01/28

     7,735        8,456,753   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago:

    

5.50%, 12/01/38

     2,895        3,349,747   

5.25%, 12/01/43

     6,305        7,125,911   

Illinois Finance Authority, RB:

    

Carle Foundation, Series A, 6.00%, 8/15/41

     4,000        4,773,160   

University of Chicago, Series B, 5.50%, 7/01/18 (a)

     10,000        11,483,500   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     4,365        5,134,462   

6.00%, 6/01/28

     1,245        1,460,833   

State of Illinois, GO:

    

5.25%, 2/01/31

     2,700        2,961,846   

5.25%, 2/01/32

     5,525        6,039,046   

5.50%, 7/01/33

     7,820        8,727,042   

5.50%, 7/01/38

     1,295        1,439,354   

5.00%, 2/01/39

     5,000        5,287,450   
    

 

 

 
               166,731,755   

Indiana — 3.5%

    

Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges, Series A, AMT, 5.00%, 7/01/40

     1,240        1,332,640   

Indiana Municipal Power Agency, Refunding RB, Series A:

    

5.25%, 1/01/32

     1,500        1,748,655   

5.25%, 1/01/33

     1,500        1,745,040   

Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project, Series A (AGC), 5.50%, 1/01/38

     14,105        16,079,841   
    

 

 

 
               20,906,176   

Louisiana — 2.8%

    

City of New Orleans Louisiana Aviation Board, RB, Series B, AMT, 5.00%, 1/01/45 (b)

     4,995        5,474,620   

City of New Orleans Louisiana Aviation Board, Refunding GARB, Restructuring (AGC):

    

Series A-1, 6.00%, 1/01/23

     500        582,105   

Series A-2, 6.00%, 1/01/23

     720        834,725   

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, 5.00%, 10/01/37

     5,100        5,816,907   

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A, 5.50%, 5/15/29

     3,735        4,103,495   
    

 

 

 
               16,811,852   
Municipal Bonds    Par  
(000)
    Value  

Massachusetts — 0.5%

    

Massachusetts Educational Financing Authority, RB, Education Loan, Issue I, AMT:

    

5.00%, 1/01/26

   820      920,917   

5.00%, 1/01/27

     2,000        2,235,560   
    

 

 

 
               3,156,477   

Michigan — 3.5%

    

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

     6,320        6,974,246   

Hudsonville Public Schools, GO, School Building & Site (Q-SBLF), 5.25%, 5/01/41

     6,015        6,697,402   

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

     5,780        7,235,867   
    

 

 

 
               20,907,515   

Minnesota — 2.0%

    

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

     9,900        11,614,482   

Mississippi — 2.8%

    

Mississippi Development Bank, RB, Jackson Water & Sewer System Project (AGM):

    

6.88%, 12/01/40

     6,405        8,372,040   

Special Obligation, 6.75%, 12/01/31

     3,775        4,974,355   

Special Obligation, 6.75%, 12/01/33

     2,350        3,082,659   
    

 

 

 
               16,429,054   

Nevada — 5.3%

    

County of Clark Nevada, ARB, Las Vegas-McCarran International Airport, Series A (AGM), 5.25%, 7/01/39

     11,175        12,661,275   

County of Clark Nevada, GO, Limited Tax, 5.00%, 6/01/38

     11,245        12,396,713   

County of Clark Nevada Water Reclamation District, GO, Series A, 5.25%, 7/01/34

     5,850        6,696,261   
    

 

 

 
               31,754,249   

New Jersey — 7.8%

    

New Jersey EDA, RB:

    

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

     4,280        5,069,788   

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

     70        81,325   

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

     2,700        2,925,261   

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

     7,000        7,771,260   

The Goethals Bridge Replacement Project, AMT (AGM), 5.00%, 1/01/31

     2,425        2,713,236   

New Jersey Health Care Facilities Financing Authority, RB, Virtua Health, Series A (AGC), 5.50%, 7/01/38

     6,500        7,323,550   

New Jersey Higher Education Student Assistance Authority, Refunding RB, Series 1, AMT, 5.75%, 12/01/28

     4,475        4,994,906   

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

    

Series A, 5.50%, 6/15/41

     5,410        6,104,698   

Series AA, 5.50%, 6/15/39

     8,175        9,267,916   
    

 

 

 
               46,251,940   

New York — 8.3%

    

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

    

Fiscal 2009, Series EE, 5.25%, 6/15/40

     7,500        8,558,550   

Water & Sewer System, Series EE, 5.38%, 6/15/43

     3,475        4,100,639   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    47


Schedule of Investments (continued)

  

BlackRock MuniHoldings Investment Quality Fund (MFL)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

New York (concluded)

    

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

    

Water & Sewer System, Series FF-2, 5.50%, 6/15/40

   $ 4,000      $ 4,625,480   

City of New York New York Transitional Finance Authority Building Aid, BARB, Fiscal 2009, Series S-4 (AGC), 5.50%, 1/15/29

     4,000        4,623,640   

Metropolitan Transportation Authority, RB:

    

Series A, 5.25%, 11/15/38

     4,000        4,620,000   

Series A-1, 5.25%, 11/15/39

     4,490        5,207,322   

New York State Dormitory Authority, Refunding RB, Series C, 5.00%, 3/15/42

     5,420        6,185,792   

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 166th Series, 5.25%, 7/15/36

     10,000        11,413,300   
    

 

 

 
               49,334,723   

Ohio — 1.4%

    

State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1:

    

5.25%, 2/15/31

     5,145        6,007,456   

5.25%, 2/15/32

     2,250        2,616,728   
    

 

 

 
               8,624,184   

Pennsylvania — 2.3%

    

Pennsylvania Economic Development Financing Authority, RB, AMT (b):

    

5.00%, 12/31/34

     3,700        4,105,853   

5.00%, 12/31/38

     865        953,169   

Pennsylvania Turnpike Commission, RB, Sub-Series A, 6.00%, 12/01/41

     4,945        5,331,897   

Township of Bristol Pennsylvania School District, GO, 5.25%, 6/01/37

     3,000        3,462,030   
    

 

 

 
               13,852,949   

South Carolina — 4.7%

    

County of Charleston South Carolina, RB, Special Source, 5.25%, 12/01/38

     6,735        7,911,133   

County of Charleston South Carolina Airport District, ARB, Series A, AMT:

    

5.25%, 7/01/25

     4,490        5,290,657   

5.50%, 7/01/38

     3,000        3,430,800   

6.00%, 7/01/38

     5,270        6,224,344   

5.50%, 7/01/41

     4,170        4,775,276   
    

 

 

 
               27,632,210   

Texas — 16.4%

    

Central Texas Turnpike System, Refunding RB, Series C:

    

5.00%, 8/15/37

     1,820        2,012,083   

5.00%, 8/15/42

     1,400        1,539,524   

City of Beaumont Texas, GO, Certificates of Obligation, 5.25%, 3/01/37

     4,190        4,844,017   

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

    

6.00%, 11/15/35

     12,700        15,189,835   

6.00%, 11/15/36

     9,435        11,284,732   

5.38%, 11/15/38

     5,000        5,747,650   

County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Christus Health, Series A (AGC):

    

6.50%, 1/01/19 (a)

     320        383,661   

6.50%, 7/01/37

     1,450        1,683,233   

Dallas Area Rapid Transit, Refunding RB, Senior Lien, 5.25%, 12/01/38

     9,110        10,269,247   

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

    

Series A, 5.00%, 11/01/38

     5,580        6,043,196   

Series H, 5.00%, 11/01/37

     4,575        5,008,801   
Municipal Bonds    Par  
(000)
    Value  

Texas (concluded)

    

Lower Colorado River Authority, Refunding RB, 5.50%, 5/15/33

   3,735      4,419,289   

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

    

(AGM), 6.00%, 1/01/43

     5,555        6,559,511   

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

     12,150        13,880,889   

Red River Education Financing Corp., RB, Texas Christian University Project, 5.25%, 3/15/38

     7,170        8,310,460   
    

 

 

 
               97,176,128   

Virginia — 1.2%

    

City of Lexington Virginia IDA, RB, Washington & Lee University, 5.00%, 1/01/43

     1,750        1,961,592   

Virginia Public School Authority, RB, Fluvanna County School Financing, 6.50%, 12/01/18 (a)

     4,300        5,181,371   
    

 

 

 
               7,142,963   

Washington — 1.5%

    

City of Seattle Washington Municipal Light & Power, Refunding RB, Series A, 5.25%, 2/01/36

     4,200        4,815,174   

State of Washington, GO, Various Purposes, Series B, 5.25%, 2/01/36

     3,290        3,858,874   
    

 

 

 
               8,674,048   
Total Municipal Bonds — 132.5%              787,303,235   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
              

California — 1.9%

    

California State University, Refunding RB, Systemwide, Series A (AGM), 5.00%, 11/01/32

     7,960        8,645,993   

Los Angeles Unified School District California, GO, Series I, 5.00%, 1/01/34

     2,400        2,723,280   
    

 

 

 
               11,369,273   

District of Columbia — 0.7%

    

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

     3,379        3,987,425   

Florida — 2.2%

  

County of Hillsborough Florida Aviation Authority, ARB, Tampa International Airport, Series A, AMT (AGC), 5.50%, 10/01/38

     10,657        11,933,667   

County of Lee Florida Housing Finance Authority, RB, S/F Housing, Multi-County Program, Series A-2, AMT (Ginnie Mae), 6.00%, 9/01/40

     1,116        1,141,725   
    

 

 

 
               13,075,392   

Indiana — 1.8%

  

Indiana Health & Educational Facilities Financing Authority, Refunding RB, St. Francis, Series E (AGM), 5.25%, 5/15/41

     9,850        10,622,043   

Kentucky — 0.1%

  

Kentucky State Property & Building Commission, Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/27

     404        463,505   

Nevada — 2.5%

  

County of Clark Nevada Water Reclamation District, GO:

    

Limited Tax, 6.00%, 7/01/38

     8,000        9,239,440   

Series B, 5.50%, 7/01/29

     5,008        5,850,499   
    

 

 

 
               15,089,939   

 

See Notes to Financial Statements.

 

                
48    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Investment Quality Fund (MFL)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

New Jersey — 3.3%

  

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series CC, 5.25%, 10/01/29

   $ 7,402      $ 7,897,658   

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

    

Series A (AMBAC), 5.00%, 12/15/32

     8,000        8,782,160   

Series B, 5.25%, 6/15/36 (d)

     2,961        3,231,878   
    

 

 

 
               19,911,696   

New York — 10.8%

  

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

     4,994        5,775,284   

City of New York New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.25%, 1/15/39

     5,619        6,335,284   

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

     9,249        10,756,520   

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

     13,950        16,098,997   

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

     8,200        9,595,804   

New York State Dormitory Authority, ERB, Personal Income Tax, Series B, 5.25%, 3/15/38

     13,500        15,388,245   
    

 

 

 
               63,950,134   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

Texas — 4.3%

  

City of San Antonio Texas Public Service Board, Refunding RB, Series A, 5.25%, 2/01/31 (d)

   12,027      13,698,793   

North Texas Tollway Authority, RB, Special Projects System, Series A, 5.50%, 9/01/41

     9,640        11,587,955   
    

 

 

 
               25,286,748   

Utah — 1.2%

  

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

     6,371        7,063,090   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 28.8%
        170,819,245   
Total Long-Term Investments
(Cost — $857,210,973) — 161.3%
        958,122,480   
    
                  
Short-Term Securities    Shares         

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

     7,762,304        7,762,304   
Total Short-Term Securities
(Cost — $7,762,304) — 1.3%
             7,762,304   
Total Investments (Cost — $864,973,277) — 162.6%        965,884,784   
Liabilities in Excess of Other Assets — (2.0)%        (11,728,376

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (14.4)%

   

    (85,646,441
VRDP Shares, at Liquidation Value — (46.2)%        (274,600,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 593,909,967   
    

 

 

 

 

Notes to Schedule of Investments

 

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

 

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

 

Counterparty      Value        Unrealized
Appreciation
(Depreciation)
 

Citigroup Global Markets, Inc.

     $ 5,474,620         $ (5,195

J.P. Morgan Securities LLC

     $ 5,059,022         $ 53,983   

Pershing LLC

     $ 4,237,525         $ 15,508   

Raymond James Financial

     $ 8,026,792         $ 44,131   

 

(c)   Represent bonds transferred to a TOB Trust. In exchange for which the Trust received cash and residual certificates. These bonds serve as collateral in a secured borrowing. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts.

 

(d)   All or a portion of security is subject to a recourse agreement, which may require the Trust 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 Trust could ultimately be required to pay under the agreements, which expire from October 1, 2016 to November 15, 2019, is $22,519,158.

 

(e)   During the six months ended February 28, 2015, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at August 31,
2014
       Net
Activity
       Shares Held
at February 28,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       6,198,367           1,563,937           7,762,304         $ 788   

 

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

 

Ÿ  

As of February 28, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (600   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 76,678,125      $ (331,236

 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    49


Schedule of Investments (concluded)

  

BlackRock MuniHoldings Investment Quality Fund (MFL)

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to Note 2 of the Notes to Financial Statements.

As of February 28, 2015, the following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 958,122,480              $ 958,122,480   

Short-Term Securities

  $ 7,762,304                          7,762,304   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 7,762,304         $ 958,122,480              $ 965,884,784   
 

 

 

      

 

 

      

 

    

 

 

 

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

       

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments2                 

Liabilities:

                

Interest rate contracts

  $ (331,236                     $ (331,236

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

       

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of February 28, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:    
     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 851,001                        $ 851,001   

Liabilities:

                

TOB Trust Certificates

            $ (85,627,593             (85,627,593

VRDP Shares

              (274,600,000             (274,600,000
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 851,001         $ (360,227,593           $ (359,376,592
 

 

 

      

 

 

      

 

    

 

 

 
During the six months ended February 28, 2015, there were no transfers between levels.     

 

See Notes to Financial Statements.

 

                
50    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments February 28, 2015 (Unaudited)

  

BlackRock MuniVest Fund, Inc. (MVF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 1.8%

    

City of Selma Alabama IDB, RB, Gulf Opportunity Zone, International Paper Co. Project, Series A:

    

5.80%, 5/01/34

   $ 1,850      $ 2,090,926   

5.38%, 12/01/35

     1,000        1,118,350   

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

     7,610        8,941,217   
    

 

 

 
               12,150,493   

Alaska — 1.0%

    

City of Anchorage Alaska Electric Revenue, Refunding RB, Series A, 5.00%, 12/01/41

     5,000        5,664,000   

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

     1,250        1,006,362   
    

 

 

 
               6,670,362   

Arizona — 2.4%

    

City of Phoenix Arizona Civic Improvement Corp., Refunding RB, Junior Lien, Series A, 5.00%, 7/01/40

     2,000        2,201,580   

City of Phoenix Arizona IDA, RB, Candeo School, Inc. Project:

    

6.63%, 7/01/33

     2,245        2,530,811   

6.88%, 7/01/44

     3,440        3,925,143   

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

     3,430        3,248,965   

County of Maricopa Arizona Pollution Control Corp., Refunding RB, Southern California Edison Co., Series A, 5.00%, 6/01/35

     3,300        3,739,032   
    

 

 

 
               15,645,531   

California — 7.1%

    

California Health Facilities Financing Authority, RB:

    

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

     5,000        5,809,200   

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

     5,600        6,737,584   

California Health Facilities Financing Authority, Refunding RB, Catholic Healthcare West, Series A, 6.00%, 7/01/34

     1,055        1,234,044   

California HFA, RB, S/F Housing, Home Mortgage, Series K, AMT, 5.50%, 2/01/42

     495        505,138   

California Statewide Communities Development Authority, Refunding RB, Loma Linda University Medical Center, 5.50%, 12/01/54

     5,000        5,524,200   

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

     1,200        1,369,152   

Los Angeles Community College District California, GO, Refunding, Election of 2008, Series A, 6.00%, 8/01/19 (a)

     9,585        11,662,453   

Poway Unified School District, GO, Refunding, CAB, School Facilities Improvement District No. 2007-1, Election of 2008, Series B, 0.00%, 8/01/46 (b)

     10,000        2,689,600   

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

     9,675        11,808,821   
    

 

 

 
               47,340,192   

Colorado — 1.0%

    

Colorado Health Facilities Authority, RB, Catholic Health Initiatives, Series D, 6.25%, 10/01/33

     2,500        2,895,900   

Colorado Health Facilities Authority, Refunding RB, Evangelical Lutheran, Series A, 5.25%, 6/01/34

     3,000        3,011,400   

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

     385        444,779   
    

 

 

 
               6,352,079   
Municipal Bonds   

Par  

(000)

    Value  

Delaware — 0.4%

    

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

   2,500      2,896,250   

District of Columbia — 0.2%

    

Metropolitan Washington Airports Authority, Refunding RB, Dulles Toll Road, 1st Senior Lien, Series A:

    

5.00%, 10/01/39

     415        457,475   

5.25%, 10/01/44

     650        734,195   
    

 

 

 
               1,191,670   

Florida — 7.2%

    

County of Miami-Dade Florida, GO, Building Better Communities Program:

    

Series B, 6.38%, 7/01/28

     4,630        5,385,801   

Series B-1, 5.63%, 7/01/38

     5,000        5,679,950   

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

     3,750        4,201,575   

County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport:

    

Series A, AMT (AGC), 5.00%, 10/01/40

     10,000        10,613,200   

Series A-1, 5.38%, 10/01/41

     10,290        11,817,756   

County of Miami-Dade Florida Expressway Authority, RB, Toll System, Series A (AGM), 5.00%, 7/01/35

     8,900        10,010,809   
    

 

 

 
               47,709,091   

Georgia — 1.6%

    

City of Atlanta Georgia Department of Aviation, Refunding GARB, Series B, AMT, 5.00%, 1/01/29

     1,070        1,182,692   

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

     3,570        3,940,638   

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

     3,335        3,810,738   

Municipal Electric Authority of Georgia, Refunding RB, Series W, 6.60%, 1/01/18

     1,790        1,926,183   
    

 

 

 
               10,860,251   

Hawaii — 0.9%

    

State of Hawaii Harbor System, RB, Series A, 5.50%, 7/01/35

     5,000        5,767,550   

Illinois — 12.7%

    

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien, Series B-2, AMT (NPFGC), 6.00%, 1/01/27

     605        607,874   

City of Chicago Illinois, GO, Refunding, Series A, 5.00%, 1/01/36

     15,000        15,278,100   

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

     4,640        4,938,027   

City of Chicago Illinois Midway International Airport, Refunding GARB, 2nd Lien, Series A, 5.00%, 1/01/41

     1,740        1,898,253   

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

     2,110        2,405,400   

City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien (AGM), 5.25%, 11/01/33

     1,330        1,466,644   

County of Cook Illinois Community College District No. 508, GO, University & College Improvements, 5.25%, 12/01/31

     5,000        5,756,850   

Illinois Finance Authority, RB:

    

Advocate Health Care Network, Series D, 6.50%, 11/01/18 (a)

     9,700        11,613,616   

Community Rehabilitation Providers Facilities, Series A, 6.50%, 7/01/22

     575        576,817   

Disposal Waste Management, Inc., Series A, AMT, 5.05%, 8/01/29

     1,000        1,024,960   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    51


Schedule of Investments (continued)

  

BlackRock MuniVest Fund, Inc. (MVF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

  

Illinois Finance Authority, RB (concluded)

    

Memorial Health System, Series A, 5.25%, 7/01/44

   $ 1,785      $ 1,959,145   

Illinois Finance Authority, Refunding RB, Series A:

    

Northwestern Memorial Hospital, 6.00%, 8/15/39

     9,000        10,505,700   

OSF Healthcare System, 6.00%, 5/15/39

     4,990        5,884,458   

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

     2,645        3,103,537   

Regional Transportation Authority, RB:

    

Series A (AMBAC), 7.20%, 11/01/20

     2,240        2,631,238   

Series C (NPFGC), 7.75%, 6/01/20

     4,000        4,710,800   

Village of Hodgkins Illinois, RB, Metropolitan Biosolids Management LLC Project, AMT, 6.00%, 11/01/23

     10,000        10,017,500   
    

 

 

 
               84,378,919   

Indiana — 2.3%

    

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT, 6.75%, 1/01/34

     2,250        2,752,448   

Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges, Series A, AMT, 5.00%, 7/01/40

     2,640        2,837,234   

Indiana Health & Educational Facilities Financing Authority, RB, Clarian Health Obligation, Series A, 5.25%, 2/15/40

     8,980        9,372,965   
    

 

 

 
               14,962,647   

Iowa — 1.6%

    

Iowa Finance Authority, Refunding RB, Midwestern Disaster Area, Iowa Fertilizer Co. Project, 5.25%, 12/01/25

     4,500        4,912,020   

Iowa Tobacco Settlement Authority, Refunding RB, Asset-Backed:

    

CAB, Series B, 5.60%, 6/01/34

     1,500        1,426,950   

Series C, 5.63%, 6/01/46

     4,500        3,997,530   
    

 

 

 
               10,336,500   

Kentucky — 2.7%

    

County of Owen Kentucky, RB, Kentucky American Water Co. Project, Series B, 5.63%, 9/01/39

     1,000        1,105,530   

Kentucky Economic Development Finance Authority, Refunding RB, Hospital Facilities, St. Elizabeth Medical Center, Inc., Series A, 5.50%, 5/01/39

     8,000        9,108,720   

Lexington-Fayette Urban County Airport Board, Refunding GARB, Series A, 5.00%, 7/01/27

     7,000        7,996,730   
    

 

 

 
               18,210,980   

Louisiana — 3.2%

    

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, Series A-1, 6.50%, 11/01/35

     2,615        3,139,281   

Parish of St. Charles Louisiana, RB, Valero Energy Corp., 4.00%, 12/01/40 (c)

     2,210        2,405,519   

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

    

5.25%, 5/15/31

     3,420        3,799,004   

5.25%, 5/15/32

     4,375        4,914,175   

5.25%, 5/15/33

     4,750        5,312,780   

5.25%, 5/15/35

     1,500        1,670,655   
    

 

 

 
               21,241,414   

Maine — 1.0%

    

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

     5,000        5,508,700   

Portland Housing Development Corp., Refunding RB, Senior Living, Retirement Facilities, Series A, 6.00%, 2/01/34

     1,190        1,203,376   
    

 

 

 
               6,712,076   
Municipal Bonds   

Par  

(000)

    Value  

Maryland — 1.8%

    

Maryland Community Development Administration, HRB, Series H, AMT, 5.10%, 9/01/37

   1,835      1,872,911   

Maryland Community Development Administration, Refunding, HRB, Residential, Series D, AMT, 4.90%, 9/01/42

     3,250        3,296,540   

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

    

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

     2,000        2,263,480   

University of Maryland Medical System, 5.00%, 7/01/34

     2,100        2,299,374   

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

     2,100        2,296,539   
    

 

 

 
               12,028,844   

Massachusetts — 4.0%

    

Massachusetts Bay Transportation Authority, Refunding RB, General Transportation System, Series A, 7.00%, 3/01/19

     1,460        1,567,149   

Massachusetts HFA, RB, AMT:

    

M/F Housing, Series A, 5.20%, 12/01/37

     2,865        2,921,039   

S/F Housing, Series 130, 5.00%, 12/01/32

     2,500        2,559,075   

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

     6,550        6,844,161   

Massachusetts Water Resources Authority, RB, Series A, 6.50%, 7/15/19 (d)

     11,640        12,982,907   
    

 

 

 
               26,874,331   

Michigan — 3.7%

    

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

     2,500        2,758,800   

Michigan State Hospital Finance Authority, Refunding RB, Series A:

    

Henry Ford Health System, 5.25%, 11/15/46

     7,950        8,337,244   

McLaren Health Care, 5.75%, 5/15/38

     7,285        8,175,883   

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

     4,100        5,132,708   
    

 

 

 
               24,404,635   

Mississippi — 4.9%

    

County of Lowndes Mississippi, Refunding RB, Solid Waste Disposal & Pollution Control, Weyerhaeuser Co. Project:

    

Series A, 6.80%, 4/01/22

     9,160        11,651,153   

Series B, 6.70%, 4/01/22

     4,500        5,694,795   

Mississippi Business Finance Corp., Refunding RB, System Energy Resource, Inc. Project, 5.88%, 4/01/22

     15,000        15,015,300   
    

 

 

 
               32,361,248   

Nebraska — 1.0%

    

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

     6,200        6,800,966   

New Hampshire — 0.8%

    

New Hampshire Housing Finance Authority, Refunding RB, S/F Housing, Acquisition, Series H, AMT, 5.15%, 1/01/40

     5,185        5,304,048   

New Jersey — 9.0%

    

New Jersey EDA, RB:

    

Continental Airlines, Inc. Project, Series A, AMT, 5.63%, 11/15/30

     1,530        1,737,407   

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

     1,050        1,162,770   

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

     3,890        4,214,543   

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

     10,000        11,101,800   

 

See Notes to Financial Statements.

 

                
52    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (continued)

  

BlackRock MuniVest Fund, Inc. (MVF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

New Jersey (concluded)

    

New Jersey EDA, Refunding RB, School Facilities Construction, Series AA, 5.25%, 12/15/33

   $ 10,000      $ 10,888,300   

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series AA, 6.38%, 10/01/28

     580        602,974   

New Jersey Transportation Trust Fund Authority, RB:

    

CAB, Transportation System, Series A, 0.00%, 12/15/38 (b)

     7,260        2,272,670   

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

     8,750        9,817,500   

Transportation Program, Series AA, 5.00%, 6/15/44

     8,075        8,657,611   

Transportation System, Series B, 5.50%, 6/15/31

     8,000        9,214,320   
    

 

 

 
               59,669,895   

New York — 5.8%

    

Build NYC Resource Corp., Refunding RB, Pratt Paper, Inc. Project, AMT, 5.00%, 1/01/35 (e)

     545        581,640   

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

     4,150        4,798,936   

Metropolitan Transportation Authority, RB, Series C:

    

6.25%, 11/15/23

     3,245        3,861,063   

6.50%, 11/15/28

     14,925        17,870,300   

New York Counties Tobacco Trust IV, Refunding RB, Settlement Pass-Through Turbo, Series A, 6.25%, 6/01/41 (e)

     3,500        3,562,370   

New York Liberty Development Corp., RB, Goldman Sachs Headquarters, 5.50%, 10/01/37

     2,000        2,460,440   

New York Liberty Development Corp., Refunding RB, 3 World Trade Center Project, Class 2 (e):

    

5.15%, 11/15/34

     460        505,715   

5.38%, 11/15/40

     1,145        1,279,457   

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

     3,165        3,735,301   
    

 

 

 
               38,655,222   

North Carolina — 0.6%

    

County of Gaston North Carolina Industrial Facilities & Pollution Control Financing Authority, RB, Exempt Facilities, National Gypsum Co. Project, AMT, 5.75%, 8/01/35

     4,105        4,112,964   

Ohio — 3.9%

    

Buckeye Tobacco Settlement Financing Authority, RB, Asset-Backed, Senior Turbo Term, Series A-2, 6.50%, 6/01/47

     1,125        1,003,635   

County of Allen Ohio Hospital Facilities, Refunding RB, Catholic Healthcare Partners, Series A, 5.25%, 6/01/38

     2,875        3,263,901   

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

     1,690        1,870,036   

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

     1,915        2,401,984   

County of Montgomery Ohio, RB, Catholic Health Initiatives, Series D-2, 5.45%, 10/01/38

     9,230        10,844,604   

County of Montgomery Ohio, Refunding RB, Catholic Health, Series A, 5.50%, 5/01/34

     5,470        6,263,533   
    

 

 

 
               25,647,693   

Pennsylvania — 1.9%

    

City of Philadelphia Pennsylvania IDA, RB, Retirement Facilities, Rieder House Project, Series A, 6.10%, 7/01/33

     1,295        1,301,436   

Commonwealth of Pennsylvania, GO, 1st Series, 5.00%, 6/15/29

     5,000        5,872,600   
Municipal Bonds   

Par  

(000)

    Value  

Pennsylvania (concluded)

    

Delaware River Port Authority, RB, Series D, 5.00%, 1/01/40

   195      217,618   

Montgomery County Industrial Development Authority, Refunding RB, Whitemarsh Continuing Care, 5.25%, 1/01/40 (f)

     2,625        2,658,049   

Pennsylvania Economic Development Financing Authority, RB, AMT, 5.00%, 12/31/38 (f)

     2,565        2,826,450   
    

 

 

 
               12,876,153   

Rhode Island — 0.4%

    

Tobacco Settlement Financing Corp, RB, Asset-Backed, Series A, 6.25%, 6/01/42

     2,500        2,511,025   

South Carolina — 0.2%

    

County of Georgetown South Carolina, Refunding RB, International Paper Co. Project, Series A, AMT, 5.55%, 12/01/29

     1,000        1,016,570   

Texas — 13.3%

    

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

     3,055        145,113   

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

    

5.75%, 1/01/31

     1,000        1,157,400   

6.00%, 1/01/41

     4,300        4,999,137   

Series A, 5.00%, 1/01/43

     6,925        7,552,474   

City of Austin Texas Airport System, RB, AMT, 5.00%, 11/15/39

     5,000        5,608,600   

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

     2,665        2,866,634   

City of San Antonio TX Water System Revenue, Refunding RB, System Junior Lien, Series B:

    

5.00%, 5/15/24

     500        616,915   

5.00%, 5/15/26

     1,000        1,228,350   

County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B, 7.00%, 1/01/43

     850        995,205   

County of Harris Texas Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B (a):

    

7.13%, 12/01/18

     3,500        4,290,720   

7.25%, 12/01/18

     5,400        6,644,862   

County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Scott & White Healthcare, 6.00%, 8/15/45

     5,000        6,025,000   

County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Trinity Terrace Project, 5.00%, 10/01/44

     875        931,201   

La Vernia Higher Education Finance Corp., RB, KIPP, Inc., Series A, 6.25%, 8/15/39

     925        1,053,103   

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

     3,600        3,943,800   

New Hope Cultural Education Facilities Corp., Refunding RB, 1st Mortgage, Morningside Ministries Project, 6.25%, 1/01/33

     1,600        1,797,840   

North Texas Education Finance Corp., ERB, Uplift Education, Series A, 5.13%, 12/01/42

     1,000        1,093,280   

North Texas Tollway Authority, Refunding RB, 1st Tier, Series A, 6.25%, 1/01/39

     3,500        4,050,480   

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

    

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

     10,000        12,084,800   

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

     4,710        5,599,012   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    53


Schedule of Investments (continued)

  

BlackRock MuniVest Fund, Inc. (MVF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

    

Texas State University System, Refunding (AGM), 5.00%, 3/15/30

   $ 5,660      $ 5,927,775   

Texas Transportation Commission, Refunding RB, Central Texas Turnpike System, 1st Tier, Series A, 4.00%, 8/15/38

     9,375        9,520,219   
    

 

 

 
               88,131,920   

Vermont — 0.0%

    

Vermont Educational & Health Buildings Financing Agency, RB, Developmental & Mental Health, Series A, 6.38%, 6/15/22

     30        30,480   

Virginia — 4.7%

    

City of Portsmouth Virginia, GO, Refunding, Series D, 5.00%, 7/15/34

     3,105        3,557,243   

County of Fairfax Virginia EDA, Refunding RB, Goodwin House, Inc.:

    

5.13%, 10/01/37

     2,000        2,074,840   

5.13%, 10/01/42

     6,015        6,217,465   

Virginia Commonwealth Transportation Board, RB, Capital Projects, 5.00%, 5/15/32

     8,000        9,259,600   

Virginia HDA, Refunding RB, S/F Housing, Sub-Series A-3, AMT, 5.05%, 7/01/26

     1,325        1,375,323   

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

    

6.00%, 1/01/37

     2,620        3,044,519   

5.50%, 1/01/42

     5,140        5,633,029   
    

 

 

 
               31,162,019   

Washington — 4.9%

    

Energy Northwest, Refunding RB, Series B, 7.13%, 7/01/16

     14,320        15,607,798   

State of Washington, GO, Series B, 5.00%, 2/01/25

     3,000        3,724,980   

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

     4,010        4,775,549   

Washington Health Care Facilities Authority, Refunding RB, Catholic Health Initiatives, Series D, 6.38%, 10/01/36

     7,000        8,141,560   
    

 

 

 
               32,249,887   

West Virginia — 0.4%

    

West Virginia Hospital Finance Authority, Refunding RB, Improvement, Charleston Area Medical Center, Inc., Series A, 5.63%, 9/01/32

     2,500        2,816,525   

Wisconsin — 1.0%

    

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health, Inc., Series C, 5.25%, 4/01/39

     6,100        6,726,348   

Wyoming — 1.3%

    

County of Sweetwater Wyoming, Refunding RB, Idaho Power Co. Project, Remarketing, 5.25%, 7/15/26

     4,500        5,189,625   

Wyoming Community Development Authority, Refunding RB, Series 2 & 3, 4.05%, 12/01/38

     3,100        3,149,445   
    

 

 

 
               8,339,070   
Total Municipal Bonds — 110.7%              734,145,848   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (i)
              

Arizona — 0.6%

    

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

     3,500        3,955,805   
Municipal Bonds Transferred to
Tender Option Bond Trusts (i)
  

Par  

(000)

    Value  

California — 3.5%

    

University of California, RB, General, Series O, 5.25%, 5/15/39

   $ 20,000      $ 22,880,400   

Connecticut — 2.0%

    

Connecticut State Health & Educational Facility Authority, RB, Yale University, Series Z-3, 5.05%, 7/01/42

     12,000        13,108,680   

District of Columbia — 1.3%

    

District of Columbia Water & Sewer Authority, Refunding RB, Senior Lien, Series A, 5.50%, 10/01/39

     7,495        8,472,970   

Florida — 2.5%

    

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

     14,747        16,865,032   

Illinois — 2.9%

    

State of Illinois Finance Authority, RB, University of Chicago, Series B, 6.25%, 7/01/18 (a)

     10,000        11,729,600   

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

     6,999        7,736,235   
    

 

 

 
               19,465,835   

Kentucky — 1.6%

    

County of Louisville & Jefferson Kentucky Metropolitan Government Parking Authority, RB, River City, Inc., 1st Mortgage, Series A, 5.38%, 12/01/39

     9,195        10,668,039   

Maryland — 0.8%

    

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

     4,710        5,231,868   

Nevada — 2.8%

    

County of Clark Nevada Water Reclamation District, GO, Limited Tax, Series B, 5.75%, 7/01/34

     15,789        18,627,970   

New York — 5.8%

    

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Series DD, 5.00%, 6/15/37

     24,199        26,808,899   

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

     10,000        11,702,200   
    

 

 

 
               38,511,099   

North Carolina — 2.9%

    

North Carolina Capital Facilities Finance Agency, Refunding RB:

    

Duke University Project, Series A, 5.00%, 10/01/41

     12,678        13,477,414   

Wake Forest University, 5.00%, 1/01/38

     5,000        5,603,500   
    

 

 

 
               19,080,914   

Ohio — 2.2%

    

Ohio Higher Educational Facility Commission, RB, Cleveland Clinic Health, Series A, 5.25%, 1/01/33

     4,400        4,822,840   

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

     8,500        9,608,825   
    

 

 

 
               14,431,665   

Oregon — 2.0%

    

State of Oregon Housing & Community Services Department, HRB, M/F Housing, Series A, AMT, 4.95%, 7/01/30

     12,295        12,903,602   

South Carolina — 0.3%

    

State of South Carolina Housing Finance & Development Authority, Refunding RB, S/F Housing, Series B-1, 5.55%, 7/01/39

     1,872        1,908,993   

 

See Notes to Financial Statements.

 

                
54    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Schedule of Investments (continued)

  

BlackRock MuniVest Fund, Inc. (MVF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (i)
  

Par  

(000)

    Value  

Texas — 7.6%

    

City of Houston Texas, Refunding RB, Airport System, Senior Lien, Series A, 5.50%, 7/01/34

   $ 8,333      $ 9,450,140   

City of Houston Texas Higher Education Finance Corp., RB, Rice University Project, Series A, 5.00%, 5/15/40

     10,000        11,449,789   

County of Harris Texas Health Facilities Development Corp., Refunding RB, School Health Care System, Series B, 5.75%, 7/01/27 (d)

     20,970        26,997,827   

Texas Department of Housing & Community Affairs, RB, S/F Mortgage, Series B, AMT, 5.25%, 9/01/32

     2,531        2,595,466   
    

 

 

 
               50,493,222   

Virginia — 1.2%

    

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

     2,099        2,395,945   

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

     5,002        5,647,015   
    

 

 

 
               8,042,960   

Washington — 5.9%

    

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

    

5.00%, 11/01/34

     5,000        5,482,186   

5.00%, 11/01/36

     6,000        6,565,399   

(AGM), 5.00%, 11/01/32

     14,007        15,358,864   
Municipal Bonds Transferred to
Tender Option Bond Trusts (i)
  

Par  

(000)

    Value  

Washington (concluded)

    

Washington Health Care Facilities Authority, Refunding RB, Seattle Children’s Hospital, 5.00%, 10/01/38

   10,000      11,850,500   
    

 

 

 
               39,256,949   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 45.9%
        303,906,003   

Total Long-Term Investments

(Cost — $933,477,681) — 156.6%

  

  

    1,038,051,851   
    
   
Short-Term Securities    Shares         

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

     772,258        772,258   

Total Short-Term Securities

(Cost — $772,258) — 0.1%

             772,258   
Total Investments (Cost — $934,249,939) — 156.7%        1,038,824,109   
Other Assets Less Liabilities — 2.6%        17,200,298   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (22.5%)

   

    (149,082,043
VMTP Shares, at Liquidation Value — (36.8%)        (243,800,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 663,142,364   
    

 

 

 

 

Notes to Schedule of Investments

 

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

 

(b)   Zero-coupon bond.

 

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

 

(d)   Security is collateralized by Municipal or U.S. Treasury obligations.

 

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

 

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

 

Counterparty   Value        Unrealized
Appreciation
 

J.P. Morgan Securities LLC

  $ 2,826,450         $ 28,087   

Piper Jaffray

  $ 2,658,049         $ 19,294   

 

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

 

(h)   Non-income producing security.

 

(i)   Represent bonds transferred to a TOB Trust. In exchange for which the Trust received cash and residual certificates. These bonds serve as collateral in a secured borrowing. See Note 3 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts.

 

(j)   All or a portion of security is subject to a recourse agreement, which may require the Trust 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 Trust could ultimately be required to pay under the agreement, which expires on November 15, 2019, is $5,295,486.

 

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

 

(l)   During the six months ended February 28, 2015, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the 1940 Act were as follows:

 

Affiliate      Shares Held
at August 31,
2014
       Net
Activity
       Shares Held
at February 28,
2015
       Income  

FFI Institutional Tax-Exempt Fund

       13,105,794           (12,333,536        772,258         $ 4,013   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    55


Schedule of Investments (concluded)

  

BlackRock MuniVest Fund, Inc. (MVF)

 

 

Ÿ  

As of February 28, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Appreciation
 
  (582   10-Year U.S. Treasury Note   Chicago Board of Trade   June 2015   $ 74,377,781      $ 53,719   

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

 

  Ÿ  

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

 

  Ÿ  

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

 

  Ÿ  

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

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to Note 2 of the Notes to Financial Statements.

As of February 28, 2015, the following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 1,038,051,851              $ 1,038,051,851   

Short-Term Securities

  $ 772,258                          772,258   
 

 

 

      

 

 

      

 

    

 

 

 

Total

  $ 772,258         $ 1,038,051,851              $ 1,038,824,109   
 

 

 

      

 

 

      

 

    

 

 

 

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

       

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments2             

Assets:

                

Interest rate contracts

  $ 53,719                        $ 53,719   

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

       

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of February 28, 2015, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3        Total  

Assets:

                

Cash pledged for financial futures contracts

  $ 790,000                             $ 790,000   

Liabilities:

                

TOB Trust Certificates

            $ (149,065,588                  (149,065,588

VMTP Shares

              (243,800,000                  (243,800,000
 

 

 

      

 

 

      

 

 

      

 

 

 

Total

  $ 790,000         $ (392,865,588                $ (392,075,588
 

 

 

      

 

 

      

 

 

      

 

 

 
During the six months ended February 28, 2015, there were no transfers between levels.   

 

See Notes to Financial Statements.

 

                
56    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Statements of Assets and Liabilities     

 

February 28, 2015 (Unaudited)   BlackRock
Municipal Bond
Investment Trust
(BIE)
    BlackRock
Municipal
Bond Trust
(BBK)
    BlackRock
Municipal Income
Investment
Quality Trust
(BAF)
    BlackRock
Municipal Income
Quality Trust
(BYM)
 
       
Assets   

Investments at value — unaffiliated1

  $ 88,893,434      $ 280,991,434      $ 215,152,822      $ 650,980,818   

Investments at value — affiliated2

    349,386        1,337,487        2,533,005        5,809,865   

Cash pledged for financial futures contracts

    105,000        414,000        202,000        641,000   

Interest receivable

    944,404        3,005,566        2,269,987        5,973,012   

Investments sold receivable

    435,570        329,871        1,824,756        7,717,834   

Deferred offering costs

    117,366                        

Prepaid expenses

    59,563        27,416        26,299        34,373   
 

 

 

 

Total assets

    90,904,723        286,105,774        222,008,869        671,156,902   
 

 

 

 
       
Accrued Liabilities   

Investments purchased payable

    1,564,584        7,371,933        4,941,740        8,297,064   

Income dividends payable — Common Shares

    253,740        861,890        599,335        1,888,049   

Investment advisory fees payable

    38,995        138,805        91,349        279,045   

Officer’s and Trustees’ fees payable

    8,624        30,308        22,673        70,218   

Variation margin payable on financial futures contracts

    8,281        47,656        22,188        77,344   

Interest expense and fees payable

    1,808        4,280        5,718        18,679   

Other accrued expenses payable

    32,977        68,688        55,703        79,464   
 

 

 

 

Total accrued liabilities

    1,909,009        8,523,560        5,738,706        10,709,863   
 

 

 

 
       
Other Liabilities   

TOB Trust Certificates

    16,235,837        19,494,759        31,594,766        106,051,858   

VRDP Shares, at liquidation value of $100,000 per share3,4

    17,800,000                        

VMTP Shares, at liquidation value of $100,000 per share3,4

           79,900,000        42,200,000        137,200,000   
 

 

 

 

Total other liabilities

    34,035,837        99,394,759        73,794,766        243,251,858   
 

 

 

 

Total liabilities

    35,944,846        107,918,319        79,533,472        253,961,721   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 54,959,877      $ 178,187,455      $ 142,475,397      $ 417,195,181   
 

 

 

 
       
Net Assets Applicable to Common Shareholders Consist of   

Paid-in capital5,6,7

  $ 47,249,675      $ 149,361,541      $ 124,034,133      $ 374,675,197   

Undistributed net investment income

    761,307        2,931,172        1,630,881        4,031,978   

Accumulated net realized loss

    (3,060,475     (790,508     (5,563,529     (22,846,668

Net unrealized appreciation/depreciation

    10,009,370        26,685,250        22,373,912        61,334,674   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 54,959,877      $ 178,187,455      $ 142,475,397      $ 417,195,181   
 

 

 

 

Net asset value per Common Share

  $ 16.46      $ 16.95      $ 16.28      $ 15.80   
 

 

 

 

1    Investments at cost — unaffiliated

  $ 78,854,805      $ 254,137,806      $ 192,700,517      $ 589,406,835   

2    Investments at cost — affiliated

  $ 349,386      $ 1,337,487      $ 2,533,005      $ 5,809,865   

3    Preferred Shares outstanding:

       

Par value $0.001 per share

    178        799        422        1,372   

4    Preferred Shares authorized, including Auction Market Rate Preferred Shares (“AMPS”)

    unlimited        unlimited        unlimited        unlimited   

5    Par Value per Common Share

  $ 0.001      $ 0.001      $ 0.001      $ 0.001   

6    Common Shares outstanding

    3,338,684        10,510,852        8,749,418        26,406,273   

7    Common Shares authorized

    unlimited        unlimited        unlimited        unlimited   

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    57


Statements of Assets and Liabilities (concluded)     

 

February 28, 2015 (Unaudited)   BlackRock
Municipal
Income Trust II
(BLE)
    BlackRock
MuniHoldings
Investment
Quality Fund
(MFL)
    BlackRock
MuniVest
Fund, Inc.
(MVF)
 
     
Assets   

Investments at value — unaffiliated1

  $ 586,901,603      $ 958,122,480      $ 1,038,051,851   

Investments at value — affiliated2

    872,717        7,762,304        772,258   

Cash pledged for financial futures contracts

    267,000        851,001        790,000   

Interest receivable

    6,871,123        10,751,505        12,569,267   

Investments sold receivable

    2,171,776        7,877,507        14,093,521   

Deferred offering costs

           446,244          

Prepaid expenses

    33,073        55,348        38,854   
 

 

 

 

Total assets

    597,117,292        985,866,389        1,066,315,751   
 

 

 

 
     
Accrued Liabilities   

Investments purchased payable

    4,520,023        28,169,706        6,089,433   

Income dividends payable — Common Shares

    1,854,163        2,703,256        3,424,636   

Investment advisory fees payable

    249,726        403,250        405,588   

Officer’s and Trustees’ fees payable

    63,798        240,033        164,972   

Variation margin payable on financial futures contracts

    26,420        93,750        90,938   

Interest expense and fees payable

    10,538        18,848        16,455   

Other accrued expenses payable

    76,886        99,986        115,777   
 

 

 

 

Total accrued liabilities

    6,801,554        31,728,829        10,307,799   
 

 

 

 
     
Other Liabilities   

TOB Trust Certificates

    68,691,599        85,627,593        149,065,588   

VRDP Shares, at liquidation value of $100,000 per share3,4

           274,600,000          

VMTP Shares, at liquidation value of $100,000 per share3,4

    151,300,000               243,800,000   
 

 

 

 

Total other liabilities

    219,991,599        360,227,593        392,865,588   
 

 

 

 

Total liabilities

    226,793,153        391,956,422        403,173,387   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 370,324,139      $ 593,909,967      $ 663,142,364   
 

 

 

 
     
Net Assets Applicable to Common Shareholders Consist of   

Paid-in capital5,6,7

  $ 332,937,772      $ 525,924,068      $ 581,945,717   

Undistributed net investment income

    4,196,631        8,064,899        7,845,190   

Accumulated net realized loss

    (18,330,439     (40,659,271     (31,276,432

Net unrealized appreciation/depreciation

    51,520,175        100,580,271        104,627,889   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 370,324,139      $ 593,909,967      $ 663,142,364   
 

 

 

 

Net asset value per Common Share

  $ 15.78      $ 15.71      $ 10.36   
 

 

 

 

1    Investments at cost — unaffiliated

  $ 535,404,623      $ 857,210,973      $ 933,477,681   

2    Investments at cost — affiliated

  $ 872,717      $ 7,762,304      $ 772,258   

3    Preferred Shares outstanding:

     

Par value $0.001 per share

    1,513                 

Par value $0.10 per share

           2,746        2,438   

4    Preferred Shares authorized, including Auction Market Rate Preferred Shares (“AMPS”)

    unlimited        1,000,000        10,000,000   

5    Par Value per Common Share

  $ 0.001      $ 0.10      $ 0.10   

6    Common Shares outstanding

    23,470,421        37,807,776        64,011,887   

7    Common Shares authorized

    unlimited        unlimited        150,000,000   

 

 

See Notes to Financial Statements.      
                
58    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Statements of Operations     

 

Six Months Ended February 28, 2015 (Unaudited)   BlackRock
Municipal Bond
Investment Trust
(BIE)
    BlackRock
Municipal
Bond Trust
(BBK)
    BlackRock
Municipal Income
Investment
Quality Trust
(BAF)
    BlackRock
Municipal Income
Quality Trust
(BYM)
 
       
Investment Income   

Interest

  $ 2,004,262      $ 6,357,930      $ 4,664,588      $ 14,078,821   

Interest — affiliated

    133        464        181        729   
 

 

 

 

Total income

    2,004,395        6,358,394        4,664,769        14,079,550   
 

 

 

 
       
Expenses   

Investment advisory

    286,263        890,250        587,553        1,767,969   

Liquidity fees

    80,020                        

Professional

    22,278        30,936        28,961        43,963   

Rating agency

    18,929        16,449        16,449        16,449   

Transfer agent

    9,265        13,169        12,673        20,300   

Remarketing fees on Preferred Shares

    8,949                        

Accounting services

    8,002        22,096        18,298        29,722   

Registration

    4,807        4,823        4,809        4,817   

Custodian

    3,612        9,047        6,176        14,987   

Printing

    2,861        3,827        3,435        5,466   

Officer and Trustees

    2,525        8,086        6,467        19,050   

Miscellaneous

    10,394        17,622        12,485        23,405   
 

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    457,905        1,016,305        697,306        1,946,128   

Interest expense, fees and amortization of offering costs1

    69,531        491,502        337,257        1,018,180   
 

 

 

 

Total expenses

    527,436        1,507,807        1,034,563        2,964,308   

Less fees waived by Manager

    (35,271     (119     (23     (133
 

 

 

 

Total expenses after fees waived

    492,165        1,507,688        1,034,540        2,964,175   
 

 

 

 

Net investment income

    1,512,230        4,850,706        3,630,229        11,115,375   
 

 

 

 
       
Realized and Unrealized Gain (Loss)   
Net realized gain (loss) from:        

Investments

    53,017        968,157        623,598        880,654   

Financial futures contracts

    (95,430     (350,246     (235,826     (1,181,037
 

 

 

 
    (42,413     617,911        387,772        (300,383
 

 

 

 
Net change in unrealized appreciation/depreciation on:        

Investments

    706,718        4,285,589        2,390,573        7,094,897   

Financial futures contracts

    (21,615     (139,075     (59,920     (162,230
 

 

 

 
    685,103        4,146,514        2,330,653        6,932,667   
 

 

 

 

Net realized and unrealized gain

    642,690        4,764,425        2,718,425        6,632,284   
 

 

 

 

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ 2,154,920      $ 9,615,131      $ 6,348,654      $ 17,747,659   
 

 

 

 

1    Related to TOB Trusts, VRDP Shares and/or VMTP Shares.

       

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    59


Statements of Operations (concluded)     

 

Six Months Ended February 28, 2015 (Unaudited)   BlackRock
Municipal
Income Trust II
(BLE)
    BlackRock
MuniHoldings
Investment
Quality Fund
(MFL)
    BlackRock
MuniVest
Fund, Inc.
(MVF)
 
     
Investment Income   

Interest

  $ 13,697,467      $ 21,145,769      $ 24,310,079   

Interest — affiliated

    907        788        4,013   
 

 

 

 

Total income

    13,698,374        21,146,557        24,314,092   
 

 

 

 
     
Expenses   

Investment advisory

    1,602,326        2,598,404        2,603,833   

Liquidity fees

           13,868          

Professional

    42,299        61,411        62,592   

Rating agency

    16,449        16,449        16,449   

Transfer agent

    19,553        24,473        29,480   

Remarketing fees on Preferred Shares

           13,617          

Accounting services

    29,722        59,711        64,078   

Registration

    5,313        6,760        14,494   

Custodian

    13,930        19,529        20,280   

Printing

    4,932        7,409        7,809   

Officer and Trustees

    16,919        26,908        30,681   

Miscellaneous

    23,647        27,823        29,104   
 

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    1,775,090        2,876,362        2,878,800   

Interest expense, fees and amortization of offering costs1

    1,005,999        1,539,660        1,717,531   
 

 

 

 

Total expenses

    2,781,089        4,416,022        4,596,331   

Less fees waived by Manager

    (243     (119,061     (990
 

 

 

 

Total expenses after fees waived

    2,780,846        4,296,961        4,595,341   
 

 

 

 

Net investment income

    10,917,528        16,849,596        19,718,751   
 

 

 

 
     
Realized and Unrealized Gain (Loss)   
Net realized gain (loss) from:      

Investments

    262,387        2,686,573        2,803,534   

Financial futures contracts

    (724,036     (948,676     (1,232,611
 

 

 

 
    (461,649     1,737,897        1,570,923   
 

 

 

 
Net change in unrealized appreciation/depreciation on:      

Investments

    7,956,576        7,109,756        5,099,784   

Financial futures contracts

    65,761        (257,555     128,037   
 

 

 

 
    8,022,337        6,852,201        5,227,821   
 

 

 

 

Net realized and unrealized gain

    7,560,688        8,590,098        6,798,744   
 

 

 

 

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ 18,478,216      $ 25,439,694      $ 26,517,495   
 

 

 

 

1    Related to TOB Trusts, VRDP Shares and/or VMTP Shares.

       

 

 

See Notes to Financial Statements.      
                
60    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Statements of Changes in Net Assets     

 

    BlackRock Municipal Bond
Investment Trust (BIE)
        BlackRock Municipal
Bond Trust (BBK)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
February 28,
2015
(Unaudited)
    Year Ended
August 31,
2014
        Six Months Ended
February 28,
2015
(Unaudited)
   

Year Ended
August 31,

2014

 
         
Operations   

Net investment income

  $ 1,512,230      $ 3,095,298        $ 4,850,706      $ 10,163,248   

Net realized gain (loss)

    (42,413     (683,440       617,911        (1,390,541

Net change in unrealized appreciation/depreciation

    685,103        7,313,640          4,146,514        27,030,711   
 

 

 

     

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    2,154,920        9,725,498          9,615,131        35,803,418   
 

 

 

     

 

 

 
         
Distributions to Common Shareholders From1    

Net investment income

    (1,522,439     (3,044,880       (5,225,996     (10,140,509

Net realized gain

                           (867,349
 

 

 

     

 

 

 

Decrease in net assets resulting from distributions to Common Shareholders

    (1,522,439     (3,044,880       (5,225,996     (11,007,858
 

 

 

     

 

 

 
         
Net Assets Applicable to Common Shareholders   

Total increase in net assets applicable to Common Shareholders

    632,481        6,680,618          4,389,135        24,795,560   

Beginning of period

    54,327,396        47,646,778          173,798,320        149,002,760   
 

 

 

     

 

 

 

End of period

  $ 54,959,877      $ 54,327,396        $ 178,187,455      $ 173,798,320   
 

 

 

     

 

 

 

Undistributed net investment income, end of period

  $ 761,307      $ 771,516        $ 2,931,172      $ 3,306,462   
 

 

 

     

 

 

 
    BlackRock Municipal Income
Investment Quality Trust (BAF)
        BlackRock Municipal Income
Quality Trust (BYM)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
February 28,
2015
(Unaudited)
    Year Ended
August 31,
2014
        Six Months Ended
February 28,
2015
(Unaudited)
    Year Ended
August 31,
2014
 
         
Operations   

Net investment income

  $ 3,630,229      $ 7,255,468        $ 11,115,375      $ 22,636,343   

Net realized gain (loss)

    387,772        (3,438,451       (300,383     (6,919,380

Net change in unrealized appreciation/depreciation

    2,330,653        22,136,095          6,932,667        63,874,690   
 

 

 

     

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    6,348,654        25,953,112          17,747,659        79,591,653   
 

 

 

     

 

 

 
         
Distributions to Common Shareholders From1    

Net investment income

    (3,596,011     (7,192,022       (11,328,291     (24,188,146
 

 

 

     

 

 

 
         
Net Assets Applicable to Common Shareholders   

Total increase in net assets applicable to Common Shareholders

    2,752,643        18,761,090          6,419,368        55,403,507   

Beginning of period

    139,722,754        120,961,664          410,775,813        355,372,306   
 

 

 

     

 

 

 

End of period

  $ 142,475,397      $ 139,722,754        $ 417,195,181      $ 410,775,813   
 

 

 

     

 

 

 

Undistributed net investment income, end of period

  $ 1,630,881      $ 1,596,663        $ 4,031,978      $ 4,244,894   
 

 

 

     

 

 

 

1   Distributions for annual periods determined in accordance with federal income tax regulations.

      

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    61


Statements of Changes in Net Assets     

 

    BlackRock Municipal
Income Trust II (BLE)
        BlackRock MuniHoldings
Investment Quality Fund (MFL)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
February 28,
2015
(Unaudited)
    Year Ended
August 31,
2014
        Six Months Ended
February 28,
2015
(Unaudited)
    Year Ended
August 31,
2014
 
         
Operations   

Net investment income

  $ 10,917,528      $ 21,890,479        $ 16,849,596      $ 33,618,131   

Net realized gain (loss)

    (461,649     (6,923,260       1,737,897        (10,629,175

Net change in unrealized appreciation/depreciation

    8,022,337        58,889,836          6,852,201        92,330,069   
 

 

 

     

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    18,478,216        73,857,055          25,439,694        115,319,025   
 

 

 

     

 

 

 
         
Distributions to Common Shareholders From1    

Net investment income

    (11,467,248     (23,298,295       (16,219,536     (32,439,071
 

 

 

     

 

 

 
         
Capital Share Transactions   

Reinvestment of common distributions

    274,680        150,439                   
 

 

 

     

 

 

 
         
Net Assets Applicable to Common Shareholders   

Total increase in net assets applicable to Common Shareholders

    7,285,648        50,709,199          9,220,158        82,879,954   

Beginning of period

    363,038,491        312,329,292          584,689,809        501,809,855   
 

 

 

     

 

 

 

End of period

  $ 370,324,139      $ 363,038,491        $ 593,909,967      $ 584,689,809   
 

 

 

     

 

 

 

Undistributed net investment income, end of period

  $ 4,196,631      $ 4,746,351        $ 8,064,899      $ 7,434,839   
 

 

 

     

 

 

 

 

    BlackRock
MuniVest Fund, Inc. (MVF)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
February 28,
2015
(Unaudited)
    Year Ended
August 31,
2014
 
   
Operations   

Net investment income

  $ 19,718,751      $ 40,614,327   

Net realized gain (loss)

    1,570,923        (2,382,781

Net change in unrealized appreciation/depreciation

    5,227,821        77,481,188   
 

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    26,517,495        115,712,734   
 

 

 

 
   
Distributions to Common Shareholders From1    

Net investment income

    (20,610,265     (43,508,693
 

 

 

 
   
Capital Share Transactions   

Reinvestment of common distributions

    313,097          
 

 

 

 
   
Net Assets Applicable to Common Shareholders   

Total increase in net assets applicable to Common Shareholders

    6,220,327        72,204,041   

Beginning of period

    656,922,037        584,717,996   
 

 

 

 

End of period

  $ 663,142,364      $ 656,922,037   
 

 

 

 

Undistributed net investment income, end of period

  $ 7,845,190      $ 8,736,704   
 

 

 

 

1    Distributions for annual periods determined in accordance with federal income tax regulations.

       

 

 

See Notes to Financial Statements.      
                
62    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Statements of Cash Flows     

 

Six Months Ended February 28, 2015 (Unaudited)   BlackRock
Municipal Bond
Investment Trust
(BIE)
    BlackRock
Municipal
Bond Trust
(BBK)
    BlackRock
Municipal Income
Investment
Quality Trust
(BAF)
    BlackRock
Municipal Income
Quality Trust
(BYM)
 
       
Cash Provided by (Used for) Operating Activities                                

Net increase in net assets resulting from operations

  $ 2,154,920      $ 9,615,131      $ 6,348,654      $ 17,747,659   

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

    (11,673     (145,614     (6,871     115,506   

Decrease in variation margin receivable on financial futures contracts

    2,250        8,625        5,438        22,688   

Increase in prepaid expenses

    (5,884     (5,742     (4,964     (10,320

(Increase) decrease in cash pledged for financial futures contracts

    (22,000     (225,000     (83,000     (145,000

Decrease in investment advisory fees payable

    (3,521     (9,900     (7,863     (18,666

Decrease in interest expense and fees payable

    (1,001     (880     (1,436     (6,133

Decrease in other accrued expenses payable

    (7,371     (7,844     (11,334     (18,206

Increase in variation margin payable on financial futures contracts

    8,281        47,656        22,188        77,344   

Increase in Officer’s and Trustees’ fees payable

    23        34        31        139   

Net realized gain on investments

    (53,017     (901,993     (623,598     (880,654

Net unrealized gain on investments

    (706,718     (4,285,589     (2,390,573     (7,094,897

Amortization of premium and accretion of discount on investments

    113,959        (714,012     357,704        (569,949

Proceeds from sales of long-term investments

    4,752,440        47,927,711        10,781,029        29,317,820   

Purchases of long-term investments

    (5,055,261     (50,178,613     (8,842,271     (37,758,386

Net proceeds from sales (purchases) of short-term securities

    349,037        2,089,150        (1,211,625     (1,711,146
 

 

 

 

Net cash provided by (used for) operating activities

    1,514,464        3,213,120        4,331,509        (932,201
 

 

 

 
       
Cash Provided by (Used for) Financing Activities                                

Proceeds from TOB Trust Certificates

           1,995,000               27,535,073   

Repayments of TOB Trust Certificates

                  (750,000     (15,298,994

Cash dividends paid to Common Shareholders

    (1,522,439     (5,225,996     (3,596,011     (11,328,291

Amortization of deferred offering costs

    7,975        17,876        14,502        24,413   
 

 

 

 

Net cash provided by (used for) financing activities

    (1,514,464     (3,213,120     (4,331,509     932,201   
 

 

 

 
       
Cash                                

Net increase in cash

                           

Cash at beginning of period

                           
 

 

 

 

Cash at end of period

                           
 

 

 

 
       
Supplemental Disclosure of Cash Flow Information                                

Cash paid during the period for interest and fees

  $ 62,557      $ 474,506      $ 324,191      $ 999,900   
 

 

 

 
       
Non-Cash Financing Activities                                

Capital shares issued in reinvestment of distributions

                           
 

 

 

 

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    63


Statements of Cash Flows (concluded)     

 

Six Months Ended February 28, 2015 (Unaudited)   BlackRock
Municipal
Income Trust II
(BLE)
    BlackRock
MuniHoldings
Investment
Quality Fund
(MFL)
    BlackRock
MuniVest
Fund, Inc.
(MVF)
 
     
Cash Provided by Operating Activities                        

Net increase in net assets resulting from operations

  $ 18,478,216      $ 25,439,694      $ 26,517,495   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

     

(Increase) decrease in interest receivable

    (61,186     49,759        (80,786

Decrease in variation margin receivable on financial futures contracts

    16,893        21,688        21,875   

Increase in prepaid expenses

    (9,194     (5,099     (6,615

(Increase) decrease in cash pledged for financial futures contracts

    102,000        (377,001     (312,000

Decrease in investment advisory fees payable

    (20,303     (36,156     (35,835

Decrease in interest expense and fees payable

    (4,001     (5,394     (11,660

Decrease in other accrued expenses payable

    (20,370     (44,903     (28,495

Increase in variation margin payable on financial futures contracts

    26,420        93,750        90,938   

Increase in Officer’s and Trustees’ fees payable

    168        12,258        515   

Net realized gain on investments

    (119,154     (2,686,573     (2,803,534

Net unrealized gain on investments

    (7,956,576     (7,109,756     (5,099,784

Amortization of premium and accretion of discount on investments

    186,738        1,367,066        707,327   

Proceeds from sales of long-term investments

    27,588,129        45,561,771        104,530,445   

Purchases of long-term investments

    (33,556,898     (40,976,745     (119,522,208

Net proceeds from sales (purchases) of short-term securities

    6,584,609        (1,563,937     12,333,536   
 

 

 

 

Net cash provided by operating activities

    11,235,491        19,740,422        16,301,214   
 

 

 

 
     
Cash Used for Financing Activities                        

Proceeds from TOB Trust Certificates

                  4,999,999   

Repayments of TOB Trust Certificates

           (3,529,285     (1,045,022

Cash dividends paid to Common Shareholders

    (11,261,552     (16,219,536     (20,295,582

Amortization of deferred offering costs

    26,061        8,399        39,391   
 

 

 

 

Net cash used for financing activities

    (11,235,491     (19,740,422     (16,301,214
 

 

 

 
     
Cash                        

Net increase in cash

                    

Cash at beginning of period

                    
 

 

 

 

Cash at end of period

                    
 

 

 

 
     
Supplemental Disclosure of Cash Flow Information                        

Cash paid during the period for interest and fees

  $ 983,939      $ 1,536,655      $ 1,689,800   
 

 

 

 
     
Non-Cash Financing Activities                        

Capital shares issued in reinvestment of distributions

  $ 274,680             $ 313,097   
 

 

 

 

 

 

See Notes to Financial Statements.      
                
64    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Financial Highlights    BlackRock Municipal Bond Investment Trust (BIE)

 

   

Six Months Ended
February 28,
2015

(Unaudited)

    Year Ended August 31,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 16.27      $ 14.27      $ 16.88      $ 14.67      $ 15.51      $ 14.16   
 

 

 

 

Net investment income1

    0.45        0.93        0.90        0.92        1.03        1.02   

Net realized and unrealized gain (loss)

    0.20        1.98        (2.58     2.26        (0.89     1.27   

Distributions to AMPS Shareholders from net investment income

                         (0.00 )2      (0.02     (0.02
 

 

 

 

Net increase (decrease) from investment operations

    0.65        2.91        (1.68     3.18        0.12        2.27   
 

 

 

 

Distributions to Common Shareholders from net investment income3

    (0.46     (0.91     (0.93     (0.97     (0.96     (0.92
 

 

 

 

Net asset value, end of period

  $ 16.46      $ 16.27      $ 14.27      $ 16.88      $ 14.67      $ 15.51   
 

 

 

 

Market price, end of period

  $ 15.17      $ 14.58      $ 13.14      $ 16.61      $ 14.22      $ 15.60   
 

 

 

 
           
Total Return Applicable to Common Shareholders4        

Based on net asset value

    4.27% 5      21.64%        (10.35)%        22.36%        1.29%        16.80%   
 

 

 

 

Based on market price

    7.24% 5      18.37%        (16.10)%        24.21%        (2.38)%        26.02%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders        

Total expenses

    1.94% 6      2.07%        2.09%        2.21% 7      1.81% 7      1.57% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.81% 6      1.94%        1.96%        2.12% 7      1.66% 7      1.35% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs8

    1.56% 6,9      1.63% 9      1.60% 9      1.72% 7,9      1.39% 7      1.15% 7 
 

 

 

 

Net investment income

    5.57% 6      6.05%        5.45%        5.78% 7      7.25% 7      6.92% 7 
 

 

 

 

Distributions to AMPS Shareholders

                         0.01%        0.13%        0.15%   
 

 

 

 

Net investment income to Common Shareholders

    5.57% 6      6.05%        5.45%        5.77%        7.12%        6.77%   
 

 

 

 
           
Supplemental Data        

Net assets applicable to Common Shareholders, end of period (000)

  $ 54,960      $ 54,327      $ 47,647      $ 56,331      $ 48,941      $ 51,708   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                              $ 17,850      $ 17,850   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                              $ 93,546      $ 97,421   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 17,800      $ 17,800      $ 17,800      $ 17,800                 
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of period

  $ 408,763      $ 405,210      $ 367,678      $ 416,465                 
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 16,236      $ 16,236      $ 16,756      $ 18,585      $ 16,276      $ 16,276   
 

 

 

 

Asset coverage, end of period per $1,000 of borrowings

  $ 4,385      $ 4,346      $ 3,844      $ 4,031      $ 4,007      $ 4,177   
 

 

 

 

Portfolio turnover rate

    6%        18%        32%        36%        25%        47%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Amount is greater than $(0.005) per share.

 

  3   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  4   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  5   

Aggregate total return.

 

  6   

Annualized.

 

  7   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  8   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts and VRDP Shares, respectively.

 

  9   

For the six months ended February 28, 2015 and years ended August 31, 2014, August 31, 2013 and August 31, 2012, the total expense ratio after fees waived and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.23%, 1.27%, 1.27% and 1.42%, respectively.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    65


Financial Highlights    BlackRock Municipal Bond Trust (BBK)

 

    Six Months Ended
February 28,
2015
(Unaudited)
    Year Ended August 31,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 16.54      $ 14.18      $ 16.79      $ 14.48      $ 15.29      $ 13.23   
 

 

 

 

Net investment income1

    0.46        0.97        0.96        1.01        1.14        1.14   

Net realized and unrealized gain (loss)

    0.45        2.43        (2.46     2.37        (0.87     1.97   

Distributions to AMPS Shareholders from net investment income

                         (0.01     (0.03     (0.03
 

 

 

 

Net increase (decrease) from investment operations

    0.91        3.40        (1.50     3.37        0.24        3.08   
 

 

 

 
Distributions to Common Shareholders from:2            

Net investment income

    (0.50     (0.96     (0.97     (1.06     (1.05     (1.02

Net realized gain

           (0.08     (0.14                     
 

 

 

 

Total distributions to Common Shareholders

    (0.50     (1.04     (1.11     (1.06     (1.05     (1.02
 

 

 

 

Net asset value, end of period

  $ 16.95      $ 16.54      $ 14.18      $ 16.79      $ 14.48      $ 15.29   
 

 

 

 

Market price, end of period

  $ 16.52      $ 15.59      $ 13.49      $ 17.16      $ 14.86      $ 15.79   
 

 

 

 
           
Total Return Applicable to Common Shareholders3                                                

Based on net asset value

    5.68% 4      25.27%        (9.52)%        23.96%        2.02%        24.13%   
 

 

 

 

Based on market price

    9.28% 4      24.11%        (15.78)%        23.45%        1.38%        22.90%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                                

Total expenses

    1.72% 5      1.84%        1.82%        1.69% 6      1.33% 6      1.29% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.72% 5      1.84%        1.82%        1.64% 6      1.19% 6      1.08% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    1.16% 5      1.19%        1.17%        1.18% 6,8      1.16% 6      1.05% 6 
 

 

 

 

Net investment income

    5.53% 5      6.29%        5.85%        6.39% 6      8.15% 6      8.08% 6 
 

 

 

 

Distributions to AMPS Shareholders

                         0.04%        0.19%        0.22%   
 

 

 

 

Net investment income to Common Shareholders

    5.53% 5      6.29%        5.85%        6.35%        7.96%        7.86%   
 

 

 

 
           
Supplemental Data                                                

Net assets applicable to Common Shareholders, end of period (000)

  $  178,187      $  173,798      $  149,003      $  176,216      $  151,471      $  159,216   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                              $ 79,900      $ 79,900   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                              $ 72,394      $ 74,819   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 79,900      $ 79,900      $ 79,900      $ 79,900                 
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 323,013      $ 317,520      $ 286,487      $ 320,545                 
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 19,495      $ 19,495      $ 17,039      $ 14,489      $ 7,399      $ 7,399   
 

 

 

 

Asset coverage, end of period per $1,000 of borrowings

  $ 10,140      $ 9,915      $ 9,745      $ 13,162      $ 21,471      $ 22,518   
 

 

 

 

Portfolio turnover rate

    17%        32%        32%        46%        27%        51%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  3   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  4   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  7   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts and VMTP Shares, respectively.

 

  8   

For the year ended August 31, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.16%.

 

 

See Notes to Financial Statements.      
                
66    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Financial Highlights    Municipal Income Investment Quality Trust (BAF)

 

    Six Months Ended
February 28,
2015
(Unaudited)
    Year Ended August 31,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 15.97      $ 13.83      $ 16.53      $ 14.50      $ 15.08      $ 14.06   
 

 

 

 

Net investment income1

    0.41        0.83        0.81        0.83        0.91        0.94   

Net realized and unrealized gain (loss)

    0.31        2.13        (2.68     2.09        (0.58     0.95   

Distributions to AMPS Shareholders from net investment income

                         (0.00 )2      (0.02     (0.02
 

 

 

 

Net increase (decrease) from investment operations

    0.72        2.96        (1.87     2.92        0.31        1.87   
 

 

 

 

Distributions to Common Shareholders from net investment income3

    (0.41     (0.82     (0.83     (0.89     (0.89     (0.85
 

 

 

 

Net asset value, end of period

  $ 16.28      $ 15.97      $ 13.83      $ 16.53      $ 14.50      $ 15.08   
 

 

 

 

Market price, end of period

  $ 14.71      $ 14.18      $ 12.82      $ 16.24      $ 13.92      $ 15.64   
 

 

 

 
           
Total Return Applicable to Common Shareholders4                                                

Based on net asset value

    4.86% 5      22.67%        (11.69)%        20.76%        2.62%        13.93%   
 

 

 

 

Based on market price

    6.71% 5      17.50%        (16.68)%        23.59%        (5.01)%        27.70%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                                

Total expenses

    1.48% 6      1.58%        1.63%        1.49% 7      1.25% 7      1.23% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.48% 6      1.58%        1.63%        1.49% 7      1.23% 7      1.14% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs8

    1.00% 6      1.03%        1.03%        1.06% 7,9      1.09% 7      0.97% 7 
 

 

 

 

Net investment income

    5.18% 6      5.56%        5.02%        5.31% 7      6.51% 7      6.54% 7 
 

 

 

 

Distributions to AMPS Shareholders

                         0.02%        0.12%        0.14%   
 

 

 

 

Net investment income to Common Shareholders

    5.18% 6      5.56%        5.02%        5.29%        6.39%        6.40%   
 

 

 

 
           
Supplemental Data                                                

Net assets applicable to Common Shareholders, end of period (000)

  $  142,475      $  139,723      $  120,962      $  144,587      $  126,783      $  131,772   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                              $ 42,275      $ 42,275   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                              $ 99,975      $ 102,926   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 42,200      $ 42,200      $ 42,200      $ 42,200                 
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 437,619      $ 431,097      $ 386,639      $ 442,624                 
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 31,595      $ 32,345      $ 33,845      $ 36,497      $ 22,266      $ 32,196   
 

 

 

 

Asset coverage, end of period per $1,000 of borrowings

  $ 5,509      $ 5,320      $ 4,574      $ 4,962      $ 6,694      $ 5,093   
 

 

 

 

Portfolio turnover rate

    6%        26%        43%        51%        33%        26%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Amount is greater than $(0.005) per share.

 

  3   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  4   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  5   

Aggregate total return.

 

  6   

Annualized.

 

  7   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  8   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts and VMTP Shares, respectively.

 

  9   

For the year ended August 31, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.05%.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    67


Financial Highlights    BlackRock Municipal Income Quality Trust (BYM)

 

   

Six Months Ended
February 28,
2015

(Unaudited)

    Year Ended August 31,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 15.56      $ 13.46      $ 16.11      $ 14.09      $ 14.64      $ 13.55   
 

 

 

 

Net investment income1

    0.42        0.86        0.91        0.93        0.97        0.96   

Net realized and unrealized gain (loss)

    0.25        2.16        (2.62     2.02        (0.58     1.00   

Distributions to AMPS Shareholders from net investment income

                         (0.00 )2      (0.02     (0.02
 

 

 

 

Net increase (decrease) from investment operations

    0.67        3.02        (1.71     2.95        0.37        1.94   
 

 

 

 

Distributions to Common Shareholders from net investment income3

    (0.43     (0.92     (0.94     (0.93     (0.92     (0.85
 

 

 

 

Net asset value, end of period

  $ 15.80      $ 15.56      $ 13.46      $ 16.11      $ 14.09      $ 14.64   
 

 

 

 

Market price, end of period

  $ 14.58      $ 13.96      $ 12.59      $ 16.73      $ 13.85      $ 15.26   
 

 

 

 
           
Total Return Applicable to Common Shareholders4                                                

Based on net asset value

    4.62% 5      23.69%        (11.13)%        21.54%        3.09%        14.74%   
 

 

 

 

Based on market price

    7.60% 5      18.65%        (19.96)%        28.40%        (2.79)%        18.42%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                                

Total expenses

    1.44% 6      1.55%        1.55%        1.46% 7      1.25% 7      1.15% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.44% 6      1.55%        1.55%        1.46% 7      1.24% 7      1.06% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs8

    0.95% 6      0.98%        0.96%        1.00% 7,9      1.07% 7      0.92% 7 
 

 

 

 

Net investment income

    5.40% 6      5.89%        5.77%        6.12% 7      7.15% 7      6.85% 7 
 

 

 

 

Distributions to AMPS Shareholders

                         0.03%        0.14%        0.15%   
 

 

 

 

Net investment income to Common Shareholders

    5.40% 6      5.89%        5.77%        6.09%        7.01%        6.70%   
 

 

 

 
           
Supplemental Data                                                

Net assets applicable to Common Shareholders, end of period (000)

  $ 417,195      $ 410,776      $ 355,372      $ 424,785      $ 371,014      $ 384,563   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                              $ 137,250      $ 137,250   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                              $ 92,580      $ 95,049   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 137,200      $ 137,200      $ 137,200      $ 137,200                 
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 404,078      $ 399,399      $ 359,018      $ 409,610                 
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 106,052      $ 93,816      $ 114,948      $ 105,454      $ 85,964      $ 80,915   
 

 

 

 

Asset coverage, end of period $1,000 of borrowings

  $ 4,934      $ 5,379      $ 4,092      $ 5,028      $ 5,316      $ 5,753   
 

 

 

 

Portfolio turnover rate

    6%        20%        24%        17%        19%        13%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Amount is greater than $(0.005) per share.

 

  3   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  4   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  5   

Aggregate total return.

 

  6   

Annualized.

 

  7   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  8   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts and VMTP Shares, respectively.

 

  9   

For the year ended August 31, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.99%.

 

 

See Notes to Financial Statements.      
                
68    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Financial Highlights    BlackRock Municipal Income Trust II (BLE)

 

    Six Months Ended
February 28,
2015
(Unaudited)
    Year Ended August 31,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 15.48      $ 13.32      $ 16.10      $ 13.96      $ 14.63      $ 12.78   
 

 

 

 

Net investment income1

    0.47        0.93        0.97        1.02        1.08        1.08   

Net realized and unrealized gain (loss)

    0.32        2.22        (2.72     2.14        (0.73     1.77   

Distributions to AMPS Shareholders from net investment income

                         (0.01     (0.02     (0.03
 

 

 

 

Net increase (decrease) from investment operations

    0.79        3.15        (1.75     3.15        0.33        2.82   
 

 

 

 

Distributions to Common Shareholders from net investment income2

    (0.49     (0.99     (1.03     (1.01     (1.00     (0.97
 

 

 

 

Net asset value, end of period

  $ 15.78      $ 15.48      $ 13.32      $ 16.10      $ 13.96      $ 14.63   
 

 

 

 

Market price, end of period

  $ 15.53      $ 14.70      $ 13.20      $ 16.74      $ 14.13      $ 15.22   
 

 

 

 
           
Total Return Applicable to Common Shareholders3                                                

Based on net asset value

    5.18% 4      24.73%        (11.60)%        23.25%        2.70%        22.83%   
 

 

 

 

Based on market price

    9.01% 4      19.52%        (15.75)%        26.61%        (0.07)%        21.42%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                                

Total expenses

    1.53% 5      1.64%        1.67%        1.55% 6      1.18% 6      1.16% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.53% 5      1.64%        1.67%        1.48% 6      1.10% 6      1.08% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    0.97% 5      1.01%        1.00%        0.96% 6,8      1.01% 6      0.99% 6 
 

 

 

 

Net investment income

    5.99% 5      6.49%        6.17%        6.74% 6      7.94% 6      7.89% 6 
 

 

 

 

Distributions to AMPS Shareholders

                         0.03%        0.17%        0.20%   
 

 

 

 

Net investment income to Common Shareholders

    5.99% 5      6.49%        6.17%        6.71%        7.77%        7.69%   
 

 

 

 
           
Supplemental Data                                                

Net assets applicable to Common Shareholders, end of period (000)

  $  370,324      $  363,038      $  312,329      $  376,774      $  325,713      $  340,269   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                              $ 151,300      $ 151,300   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                              $ 78,819      $ 81,226   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 151,300      $ 151,300      $ 151,300      $ 151,300                 
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 344,761      $ 339,946      $ 306,430      $ 349,025                 
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 68,692      $ 69,692      $ 73,531      $ 88,876      $ 43,451      $ 39,252   
 

 

 

 

Asset coverage, end of period per $1,000 of borrowings

  $ 6,391      $ 6,285      $ 5,248      $ 5,239      $ 8,496      $ 9,669   
 

 

 

 

Portfolio turnover rate

    5%        16%        17%        24%        16%        29%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  3   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  4   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  7   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts and VMTP Shares, respectively.

 

  8   

For the year ended August 28, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.94%.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    69


Financial Highlights    BlackRock MuniHoldings Investment Quality Fund (MFL)

 

    Six Months Ended
February 28,
2015
(Unaudited)
    Year Ended August 31,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 15.46      $ 13.27      $ 15.96      $ 14.00      $ 14.69      $ 13.57   
 

 

 

 

Net investment income1

    0.45        0.89        0.87        0.86        0.95        0.96   

Net realized and unrealized gain (loss)

    0.23        2.16        (2.66     2.02        (0.71     1.04   

Distributions to AMPS Shareholders from net investment income

                                (0.02     (0.03
 

 

 

 

Net increase (decrease) from investment operations

    0.68        3.05        (1.79     2.88        0.22        1.97   
 

 

 

 

Distributions to Common Shareholders from net investment income2

    (0.43     (0.86     (0.90     (0.92     (0.91     (0.85
 

 

 

 

Net asset value, end of period

  $ 15.71      $ 15.46      $ 13.27      $ 15.96      $ 14.00      $ 14.69   
 

 

 

 

Market price, end of period

  $ 14.53      $ 13.92      $ 12.59      $ 16.13      $ 13.84      $ 14.65   
 

 

 

 
           
Total Return Applicable to Common Shareholders3                                                

Based on net asset value

    4.70% 4      24.24%        (11.70)%        21.22%        2.01%        15.22%   
 

 

 

 

Based on market price

    7.55% 4      17.91%        (17.11)%        23.93%        1.12%        23.46%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                                

Total expenses

    1.51% 5      1.64%        1.71%        1.87%        1.37% 6      1.17% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.47% 5      1.57%        1.62%        1.80%        1.30% 6      1.09% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    0.94% 5,8      1.19% 8      1.29% 8      1.39% 8      1.14% 6      1.01% 6 
 

 

 

 

Net investment income

    5.75% 5      6.18%        5.55%        5.76%        7.03% 6      6.85% 6 
 

 

 

 

Distributions to AMPS Shareholders

                                0.18%        0.21%   
 

 

 

 

Net investment income to Common Shareholders

    5.75% 5      6.18%        5.55%        5.76%        6.85%        6.64%   
 

 

 

 
           
Supplemental Data                                                

Net assets applicable to Common Shareholders, end of period (000)

  $  593,910      $  584,690      $  501,810      $  602,780      $  528,173      $  553,367   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                                     $ 274,650   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                                     $ 75,371   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 274,600      $ 274,600      $ 274,600      $ 274,600      $ 274,600          
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of period

  $ 316,282      $ 312,924      $ 282,742      $ 319,152      $ 292,343          
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 85,628      $ 89,157      $ 95,959      $ 131,323      $ 74,965      $ 71,068   
 

 

 

 

Asset coverage, end of period per $1,000 of borrowings

  $ 7,936      $ 7,558      $ 6,229      $ 5,590      $ 8,046      $ 8,786   
 

 

 

 

Portfolio turnover rate

    6%        25%        59%        44%        32%        38%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  3   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  4   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  7   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VRDP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts and VRDP Shares, respectively.

 

  8   

For the six months ended February 28, 2015 and years ended August 31, 2014, August 31, 2013, and August 31, 2012 the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.97% 0.95%, 0.92% and 0.99%, respectively.

 

 

See Notes to Financial Statements.      
                
70    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Financial Highlights    BlackRock MuniVest Fund, Inc. (MVF)

 

    Six Months Ended
February 28,
2015
(Unaudited)
    Year Ended August 31,  
      2014     2013     2012     2011     2010  
           
Per Share Operating Performance                                                

Net asset value, beginning of period

  $ 10.27      $ 9.14      $ 10.68      $ 9.55      $ 10.01      $ 8.98   
 

 

 

 

Net investment income1

    0.31        0.63        0.67        0.69        0.73        0.73   

Net realized and unrealized gain (loss)

    0.10        1.18        (1.50     1.16        (0.47     0.97   

Distributions to AMPS Shareholders from net investment income

                         (0.01     (0.02     (0.02
 

 

 

 

Net increase (decrease) from investment operations

    0.41        1.81        (0.83     1.84        0.24        1.68   
 

 

 

 

Distributions to Common Shareholders from net investment income2

    (0.32     (0.68     (0.71     (0.71     (0.70     (0.65
 

 

 

 

Net asset value, end of period

  $ 10.36      $ 10.27      $ 9.14      $ 10.68      $ 9.55      $ 10.01   
 

 

 

 

Market price, end of period

  $ 10.25      $ 9.83      $ 8.91      $ 11.28      $ 9.73      $ 10.38   
 

 

 

 
           
Total Return Applicable to Common Shareholders3                                                

Based on net asset value

    4.16% 4      20.70%        (8.39)%        19.85%        2.90%        19.31%   
 

 

 

 

Based on market price

    7.66% 4      18.50%        (15.45)%        24.24%        1.11%        24.69%   
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                                

Total expenses

    1.40% 5      1.49%        1.54%        1.51% 6      1.28% 6      1.22% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.40% 5      1.49%        1.54%        1.51% 6      1.28% 6      1.22% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    0.88% 5      0.91%        0.91%        0.98% 6,8      1.05% 6      1.03% 6 
 

 

 

 

Net investment income

    6.01% 5      6.53%        6.43%        6.79% 6      7.93% 6      7.71% 6 
 

 

 

 

Distributions to AMPS Shareholders

                         0.05%        0.18%        0.19%   
 

 

 

 

Net investment income to Common Shareholders

    6.01% 5      6.53%        6.43%        6.74%        7.75%        7.52%   
 

 

 

 
           
Supplemental Data                                                

Net assets applicable to Common Shareholders, end of period (000)

  $ 663,142      $ 656,922      $ 584,718      $ 679,207      $ 602,234      $ 625,195   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                              $ 243,825      $ 243,825   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                              $ 86,749      $ 89,106   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 243,800      $ 243,800      $ 243,800      $ 243,800                 
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 372,003      $ 369,451      $ 339,835      $ 378,592                 
 

 

 

 

Borrowings outstanding, end of period (000)

  $ 149,066      $ 145,111      $ 149,085      $ 199,256      $ 173,251      $ 179,120   
 

 

 

 

Asset coverage, end of period per $1,000 of borrowings

  $ 5,449      $ 5,527      $ 4,922      $ 4,409      $ 4,476      $ 4,490   
 

 

 

 

Portfolio turnover rate

    10%        14%        11%        11%        10%        25%   
 

 

 

 

 

  1   

Based on average Common Shares outstanding.

 

  2   

Distributions for annual periods determined in accordance with federal income tax regulations.

 

  3   

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions.

 

  4   

Aggregate total return.

 

  5   

Annualized.

 

  6   

Does not reflect the effect of distributions to AMPS Shareholders.

 

  7   

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 3 and Note 9 of the Notes to Financial Statements for details of municipal bonds transferred to TOB Trusts and VMTP Shares, respectively.

 

  8   

For the year ended August 31, 2012, the total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 0.96%.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    71


Notes to Financial Statements (Unaudited)     

 

1. Organization:

The following are registered under the 1940 Act, as closed-end management investment companies and referred to herein collectively as the “Trusts:”

 

Trust Name   Herein Referred
To As
   Organized    Diversification
Classification

BlackRock Municipal Bond Investment Trust

  BIE    Delaware    Non-diversified

BlackRock Municipal Bond Trust

  BBK    Delaware    Diversified

BlackRock Municipal Income Investment Quality Trust

  BAF    Delaware    Non-diversified

BlackRock Municipal Income Quality Trust

  BYM    Delaware    Diversified

BlackRock Municipal Income Trust II

  BLE    Delaware    Diversified

BlackRock MuniHoldings Investment Quality Fund

  MFL    Massachusetts    Non-diversified

BlackRock MuniVest Fund, Inc.

  MVF    Maryland    Non-diversified

The Boards of Trustees/Directors of the Trusts are collectively referred to throughout this report as the “Board of Trustees” or the “Board,” and the trustees/directors thereof are collectively referred to throughout this report as “Trustees.” The Trusts determine and make available for publication the NAVs of their Common Shares on a daily basis.

2. Significant Accounting Policies:

The Trusts’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Trust is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Trusts:

Valuation: The Trust’s investments are valued at fair value as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time) (or if the reporting date falls on a day the NYSE is closed, investments are valued at fair value as of the report date). U.S. GAAP defines fair value as the price the Trusts would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Trusts determine the fair values of 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 Trusts 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.

In the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Investments”). When determining the price for Fair Value Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Trust might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant consistent with the principles of fair value measurement. The pricing of all Fair Value Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

Segregation and Collateralization: In cases where a Trust enters into certain investments (e.g., financial futures contracts), or certain borrowings (e.g., TOB transactions) that would be “senior securities” for 1940 Act purposes, the Trust may segregate or designate on its books and records cash or liquid securities having a market value at least equal to the amount of the Trust’s future obligations under such investments or borrowings. Doing so allows the investment or borrowing to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Trust may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis.

Distributions: Distributions from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend date. The character and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Distributions to Preferred Shareholders are accrued and determined as described in Note 9.

 

                
72    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Notes to Financial Statements (continued)     

 

Deferred Compensation Plan: Under the Deferred Compensation Plan (‘the Plan”) approved by each Trust’s Board, the independent Trustees (“Independent Trustees”) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of certain other BlackRock Closed-End Funds selected by the Independent Trustees. This has the same economic effect for the Independent Trustees as if the Independent Trustees had invested the deferred amounts directly in certain other BlackRock Closed-End Funds.

The Plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Trust. Deferred compensation liabilities are included in officer’s and trustees’ fees payable in the Statements of Assets and Liabilities and will remain as a liability of the Trusts until such amounts are distributed in accordance with the Plan.

Other: Expenses directly related to a Trust are charged to that Trust. Other operating expenses shared by several funds are prorated among those funds on the basis of relative net assets or other appropriate methods.

The Trusts have an arrangement with the custodian whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodian imposes fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

3. Securities and Other Investments:

Zero-Coupon Bonds: The Trusts 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 Trusts 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 Trusts 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 Trusts may be required to pay more at settlement than the security is worth. In addition, the Trusts are not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Trusts 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 Trusts’ 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 TOB Trusts: The Trusts leverage their assets through the use of TOB transactions. The Trusts transfer municipal bonds into a special purpose entity (“TOB Trust”). Other funds managed by the investment advisor may also contribute municipal bonds to a TOB Trust into which a Trust has contributed bonds. A TOB Trust 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 Trust, the rights and obligations under the TOB Residual will be shared among the funds ratably in proportion to their participation in the TOB Trust.

The municipal bonds transferred to a TOB Trust typically are high grade municipal bonds. In certain cases, when municipal bonds transferred are lower grade municipal bonds, the TOB transaction includes a credit enhancement feature that provides for the timely payment of principal and interest on the bonds to the TOB Trust by a credit enhancement provider. The Trusts, as TOB Residual holders, would be responsible for the payment of the credit enhancement fee and for reimbursement of any payments of principal and interest made by the credit enhancement provider.

The TOB Residuals held by a Trust include the right of a Trust (subject to the non-occurrence of certain termination events enumerated below, and a specified number of days’ prior notice), to cause the holders of a proportional share of the TOB Trust Certificates to tender their certificates at par plus accrued interest. Thereafter, that Trust may withdraw a corresponding share of the municipal bonds from the TOB Trust.

The TOB Trust may also be collapsed without the consent of a Trust, upon the occurrence of tender option termination events (“TOTEs”) and mandatory termination events (“MTEs”), as defined in the TOB Trust agreements. TOTEs may include the bankruptcy or default of the issuer of the municipal bond, a substantial downgrade in credit quality of the issuer of the municipal bond, failure of any scheduled payment of principal or interest on the underlying bonds, and a judgment or ruling that interest on the municipal bond is subject to federal income taxation. MTEs may include, among other things, a failed remarketing of the TOB Trust Certificates, the inability of the TOB Trust to obtain renewal of the liquidity support agreement and a substantial decline in the market value of the municipal bond. Upon the occurrence of a TOTE or an MTE, the TOB Trust would be liquidated with the proceeds applied first to any accrued fees owed to the trustee of the TOB Trust, the remarketing agent and the Liquidity Provider (defined below). In the case of an MTE, after the payment of fees, the TOB Trust Certificate holders would be paid senior to the TOB Residual holders (i.e., the Trusts). In contrast, in the case of a TOTE, after payment of fees, the TOB Trust Certificate holders and TOB Residual holders would be paid equally in proportion to the respective face values of their certificates. During the six months ended February 28, 2015, no TOB Trusts in which the Trusts participated were terminated without the consent of the Trusts.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    73


Notes to Financial Statements (continued)     

 

The cash received by the TOB Trust from the sale of the TOB Trust Certificates, less transaction expenses, is paid to a Trust. The Trusts typically invest the cash received in additional municipal bonds. Each Trust’s transfer of the municipal bonds to a TOB Trust is considered a secured borrowing for financial reporting purposes; therefore, the municipal bonds deposited into a TOB Trust are presented in the Trusts’ 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 Trusts’ payable to the holder of the TOB Trust Certificates, as reported in the Statements of Assets and Liabilities as TOB Trust Certificates, approximates its fair value.

The Trusts may invest in TOB Trusts 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 Trust invests in TOB Trusts on a non-recourse basis, and the Liquidity Provider is required to make a payment under the liquidity facility, 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 Trust invests in a TOB Trust on a recourse basis, the Trust will typically enter into a reimbursement agreement with the Liquidity Provider where the Trust is required to repay the Liquidity Provider the amount of any Liquidation Shortfall. As a result, a Trust investing in a recourse TOB Trust will bear the risk of loss with respect to any Liquidation Shortfall. If multiple funds participate in any such TOB Trust, these losses will be shared ratably, including the maximum potential amounts owed by the Trusts at February 28, 2015, in proportion to their participation in the TOB Trust. The recourse TOB Trusts are identified in the Schedules of Investments including the maximum potential amounts owed by the Trusts at February 28, 2015.

Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by the Trusts on an accrual basis. Interest expense incurred on the secured borrowing and other expenses related to remarketing, administration and trustee services to a TOB Trust 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 Trust for redemption at par and any accrued interest at each reset date. At February 28, 2015, the aggregate value of the underlying municipal bonds transferred to the TOB Trusts, 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
TOB Trust
     Liability for
TOB Trust
Certificates
    

Range of

Interest Rates

 

BIE

  $ 31,793,502       $ 16,235,837         0.02% - 0.27%   

BBK

  $ 36,196,406       $ 19,494,759         0.02% - 0.22%   

BAF

  $ 59,611,932       $ 31,594,766         0.02% - 0.24%   

BYM

  $ 193,547,949       $ 106,051,858         0.02% - 0.30%   

BLE

  $ 122,435,412       $ 68,691,599         0.02% - 0.22%   

MFL

  $ 170,819,245       $ 85,627,593         0.02% - 0.27%   

MVF

  $ 303,906,003       $ 149,065,588         0.02% - 0.20%   

For the six months ended February 28, 2015, the Trusts’ 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

 

BIE

  $ 16,235,837         0.63%   

BBK

  $ 19,494,759         0.62%   

BAF

  $ 31,901,395         0.67%   

BYM

  $ 96,734,473         0.60%   

BLE

  $ 68,691,599         0.59%   

MFL

  $ 87,091,891         0.66%   

MVF

  $ 145,474,298         0.59%   

Should short-term interest rates rise, the Trusts’ investments in TOB transactions may adversely affect the Trusts’ 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 Trusts’ NAVs per share.

While the Trusts’ investment policies and restrictions expressly permit investments in inverse floating rate securities such as TOB Residuals, they generally do not allow the Trusts to borrow money for purposes of making investments. The Trusts’ management believes that the Trusts’ restrictions on borrowings do not apply to the secured borrowings. For accounting purposes, the Trusts’ transfer of municipal bonds to a TOB Trust are deemed secured borrowings.

 

                
74    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Notes to Financial Statements (continued)     

 

4. Derivative Financial Instruments:

The Trusts engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Trusts and/or to economically hedge their exposure to certain risks, such as interest rate risk. These contracts may be transacted on an exchange.

Financial Futures Contracts: The Trusts invest in long and/or short positions in 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 Trusts and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, financial futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on the settlement date.

Upon entering into a financial futures contract, the Trusts are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Securities deposited as initial margin are designated on the Schedules of Investments and cash deposited, if any, is recorded on the Statements of Assets and Liabilities as cash pledged for financial futures contracts. Pursuant to the contract, the Trusts agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin. Variation margin is recorded by the Trusts as unrealized appreciation or depreciation and, if applicable, as a receivable or payable for variation margin in the Statements of Assets and Liabilities.

When the contract is closed, the Trusts record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures contracts involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.

The following is a summary of the Trusts’ derivative financial instruments categorized by risk exposure:

 

Fair Values of Derivative Financial Instruments as of February 28, 2015  
     Statements of Assets and Liabilities Location    Value  
        Derivative Liabilities  
         BIE      BBK      BAF      BYM  

Interest rate contracts

   Net unrealized appreciation/ depreciation1    $ (29,259    $ (168,378    $ (78,393    $ (239,309

 

         Value  
         BLE         MFL         MVF  
      Statements of Assets and Liabilities Location   Derivative
Assets
    Derivative
Liabilities
         Derivative
Assets
    Derivative
Liabilities
         Derivative
Assets
    Derivative
Liabilities
 

Interest rate contracts

   Net unrealized appreciation/ depreciation1   $ 23,195                        $ (331,236       $ 53,719          

 

  1   

Includes cumulative appreciation/depreciation on financial futures contracts as reported in the Schedules of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

 

The Effect of Derivative Financial Instruments in the Statements of Operations
Six Months Ended February 28, 2015
 
    Net Realized Loss From         Net Change in Unrealized Appreciation/Depreciation on  
    BIE     BBK     BAF     BYM         BIE     BBK     BAF     BYM  
Interest rate contracts:                  

Financial futures contracts

  $ (95,430   $ (350,246   $ (235,826   $ (1,181,037       $ (21,615   $ (139,075   $ (59,920   $ (162,230
    BLE     MFL     MVF               BLE     MFL     MVF        
Interest rate contracts:                  

Financial futures contracts

  $ (724,036   $ (948,676   $ (1,232,611               $ 65,761      $ (257,555   $ 128,037           

For the six months ended February 28, 2015, the average quarterly balances of outstanding derivative financial instruments were as follows:

 

     BIE     BBK     BAF     BYM     BLE     MFL     MVF  
Financial futures contracts:              

Average notional value of contracts - short

  $ 6,689,836      $ 33,083,039      $ 18,220,953      $ 65,952,949      $ 29,222,984      $ 77,660,070      $ 59,422,094   

Counterparty Credit Risk: A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

With exchange-traded futures, there is less counterparty credit risk to the Trusts since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Trust does not have a contractual right of offset against a clearing broker or

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    75


Notes to Financial Statements (continued)     

 

clearinghouse in the event of a default (including the bankruptcy or insolvency) of the clearing broker or clearinghouse. Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Trusts.

5. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate, for 1940 Act purposes of BlackRock, Inc. (“BlackRock”).

Each Trust entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Trusts’ 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 Trust’s portfolio and provides the necessary personnel, facilities, equipment and certain other services to the operations of each Trust. For such services, each Trust pays the Manager a monthly fee based on a percentage of each Trust’s average weekly net assets, except MFL and MVF, which are based on average daily net assets, at the following annual rates:

 

     BIE      BBK      BAF      BYM      BLE      MFL      MVF  

Investment advisory fee

    0.65%         0.65%         0.55%         0.55%         0.55%         0.55%         0.50%   

Average weekly net assets and average daily net assets are the average weekly or the average daily value of each Trust’s total assets minus its total accrued liabilities.

The Manager voluntarily agreed to waive a portion of the investment advisory fees or other expenses, with respect to BIE as a percentage of its average weekly net assets of 0.08%. With respect to MFL, the Manager voluntarily agreed to waive its investment advisory fees on the proceeds of Preferred Shares and TOB Trusts that exceed 35% of its total assets minus the sum of its accrued liabilities. The amounts waived are included in fees waived by Manager in the Statements of Operations. For the six months ended February 28, 2015, the amounts included in fees waived by Manager were as follows:

 

BIE

  $ 35,232   

MFL

  $ 118,984   

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Trust pays to the Manager indirectly through its investments 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 Trust’s investments 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 February 28, 2015, the amounts waived were as follows:

 

     BIE      BBK      BAF      BYM      BLE      MFL      MVF  

Amounts waived

  $ 39       $ 119       $ 23       $ 133       $ 243       $ 77       $ 990   

These voluntary waivers may be reduced or discontinued at any time without notice.

Certain officers and/or Trustees of the Trusts are officers and/or directors of BlackRock or its affiliates. The Trusts reimburse the Manager for a portion of the compensation paid to the Trusts’ Chief Compliance Officer, which is included in officer and trustees in the Statements of Operations.

6. Purchases and Sales:

For the six months ended February 28, 2015, purchases and sales of investments, excluding short-term securities, were as follows:

 

     BIE      BBK      BAF      BYM      BLE      MFL      MVF  

Purchases

  $ 6,619,845       $ 48,585,025       $ 13,784,011       $ 45,889,597       $ 37,127,897       $ 69,146,451       $ 124,006,611   

Sales

  $ 5,188,010       $ 47,459,331       $ 12,605,785       $ 36,868,194       $ 29,429,905       $ 53,439,278       $ 100,636,800   

7. Income Tax Information:

It is the Trusts’ 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 Trust files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Trusts’ U.S. federal tax returns remains open for each of the four years ended August 31, 2014. The statutes of limitations on each Trust’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application to the Trusts’ as of February 28, 2015, inclusive of the open tax return years and does not believe there are any uncertain tax positions that require recognition of a tax liability in the Trusts’ financial statements.

 

                
76    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Notes to Financial Statements (continued)     

 

As of August 31, 2014, the Trusts had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:

 

Expires August 31,   BIE      BBK      BAF      BYM      BLE      MFL      MVF  

2016

                          $ 3,216,104                           

2017

                            6,430,212       $ 2,066,643       $ 1,863,647       $ 7,618,622   

2018

  $ 150,549                         2,209,430         4,366,226         11,734,707           

2019

    718,157                                 2,448,693                 5,276,524   

No expiration date1

    1,415,064       $ 985,165       $ 3,781,281         5,270,835         1,908,534         22,597,148         10,709,257   
 

 

 

 

Total

  $ 2,283,770       $ 985,165       $ 3,781,281       $ 17,126,581       $ 10,790,096       $ 36,195,502       $ 23,604,403   
 

 

 

 

 

  1  

Must be utilized prior to losses subject to expiration.

As of February 28, 2015, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

 

     BIE      BBK      BAF      BYM      BLE      MFL      MVF  

Tax cost

  $ 63,115,668       $ 235,390,213       $ 163,935,841       $ 490,983,347       $ 468,347,358       $ 780,610,456       $ 787,599,677   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Gross unrealized appreciation

  $ 10,051,560       $ 28,416,965       $ 22,458,415       $ 62,240,893       $ 55,455,148       $ 101,000,262       $ 108,341,804   

Gross unrealized depreciation

    (160,245      (973,016      (303,195      (2,485,415      (4,719,785      (1,353,527      (6,182,960
 

 

 

 

Net unrealized appreciation

  $ 9,891,315       $ 27,443,949       $ 22,155,220       $ 59,755,478       $ 50,735,363       $ 99,646,735       $ 102,158,844   
 

 

 

 

8. Principal Risks:

Each Trust invests a substantial amount of their assets in issuers located in a single state or limited number of states. Investment percentages in specific states or U.S. territories are presented in the Schedules of investments.

Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.

In the normal course of business, the Trusts 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 Trusts may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Trusts; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency interest rate and price fluctuations. Similar to issuer credit risk, the Trusts may be exposed to counterparty credit risk, or the risk that an entity with which the Trusts have unsettled or open transactions may fail to or be unable to perform on its commitments. The Trusts 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 Trusts to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Trusts’ 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 Trusts.

The Trusts invest a significant portion of their assets in fixed-income securities and/or use derivatives tied to the fixed-income markets. See the Schedules of Investments for these securities and/or derivatives. Changes in market interest rates or economic conditions, may affect the value and/or liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise. The Trusts may be subject to a greater risk of rising interest rates due to the current period of historically low rates.

As of February 28, 2015, BIE, BBK, BAF and BYM, MFL invested a significant portion of their assets in securities in the county/city/special district/school district sector. BIE, BAF, BYM, BLE, MFL and MVF invested a significant portion of their assets in securities in the transportation sector. BBK and MVF invested a significant portion of their assets in securities in the health sector. Changes in economic conditions affecting such sectors would have a greater impact on the Trusts and could affect the value, income and/or liquidity of positions in such securities.

The Trusts 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 Trusts 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 Trust.

On December 10, 2013, regulators published final rules implementing section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”), which prohibit banking entities from engaging in proprietary trading of certain instruments and limit such entities’ investments in, and relationships with, “covered funds” as defined in the Volcker Rule. The Volcker Rule precludes banking entities and their affiliates from sponsoring existing TOB Trusts as such Trusts have been structured to date. In response to these restrictions, market participants have developed a new structure for TOB Trusts designed to ensure that no banking entity is sponsoring the TOB Trust for purposes of the Volcker Rule. In such a structure, certain responsibilities that previously belonged to the sponsor bank will be performed by the Trusts. The Trusts may utilize the service providers in meeting these responsibilities. This structure remains untested. It is possible that regulators could take positions that could limit the market for such newly structured TOB Trust trans-

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    77


Notes to Financial Statements (continued)     

 

actions or the Trusts’ ability to hold TOB Residuals. Under the new TOB Trust structure, the Trusts will have certain additional duties and responsibilities, which may give rise to certain additional risks including compliance, securities law and operational risks.

There can be no assurance that the Trusts can successfully enter into restructured TOB Trust transactions in order to refinance their existing TOB Residual holdings prior to the compliance date for the Volcker Rule, which may require that the Trusts unwind existing TOB Trusts. There can be no assurance that alternative forms of leverage will be available to the Trusts and any alternative forms of leverage may be more or less advantageous to the Trusts than existing TOB leverage.

TOB transactions constitute an important component of the municipal bond market. Accordingly, implementation of the Volcker Rule may adversely impact the municipal market, including through reduced demand for and liquidity of municipal bonds and increased financing costs for municipal issuers. Any such developments could adversely affect the Trusts. The ultimate impact of these rules on the TOB market and the overall municipal market is not yet certain.

9. Capital Share Transactions:

Each of BIE, BBK, BAF, BYM and BLE is authorized to issue an unlimited number of shares, including Preferred Shares, par value $0.001 per share, all of which were initially classified as Common Shares. The Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares, including AMPS, without approval of Common Shareholders.

MFL is authorized to issue an unlimited number of shares, including 1 million Preferred Shares, including AMPS, par value $0.10 per share.

MVF is authorized to issue 160 million shares, 150 million of which were initially classified as Common Shares, par value $0.10 per share and 10 million of which were classified as Preferred Shares, including AMPS, par value $0.10 per share.

Common Shares

For the periods shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:

 

     BIE      BBK      BAF      BYM      BLE      MFL      MVF  

Six months ended February 28, 2015

                                    17,405                 29,649   

Year ended August 31, 2014

                                    10,827                   

Preferred Shares

Each Trust’s Preferred Shares rank prior to the Trust’s Common Shares as to the payment of dividends by the Trust and distribution of assets upon dissolution or liquidation of the Trust. The 1940 Act prohibits the declaration of any dividend on the Trust’s Common Shares or the repurchase of the Trust’s Common Shares if the Trust fails 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 Trust is 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 Trust fails 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 agencies 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 Trustees for each Trust. 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 Trust’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

BIE and MFL (collectively, the “VRDP Trusts”), 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. VRDP Trusts 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 Trusts are required to segregate liquid assets to fund the redemption. The VRDP Shares are subject to certain restrictions on transfer.

For the six months ended February 28, 2015, the VRDP Shares outstanding of each Trust were as follows:

 

     Issue Date      Shares Issued      Aggregate Principal      Maturity Date  

BIE

    9/15/11         178       $ 17,800,000         10/01/41   

MFL

    6/30/11         2,746       $ 274,600,000         7/01/41   

 

                
78    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Notes to Financial Statements (continued)     

 

The VRDP Trusts entered into a fee agreement with the liquidity provider that may require an initial commitment and 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 agreements between BIE and MFL and the liquidity provider are scheduled to expire, unless renewed or terminated in advance, as follows:

 

     BIE      MFL  

Expiration date

    6/04/2015         4/19/2017   

In the event the fee agreement is not renewed or is terminated in advance, and the VRDP Trusts 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 Trusts 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 Trusts are required to begin to segregate liquid assets with the VRDP Trusts’ custodians to fund the redemption. There is no assurance the VRDP Trusts will replace such redeemed VRDP Shares with any other preferred shares or other form of leverage.

Each VRDP Trust is required to redeem its VRDP Shares on the maturity date, unless earlier redeemed or repurchased. Six months prior to the maturity date, the VRDP Trusts are required to begin to segregate liquid assets with the Trust’s custodian to fund the redemption. In addition, VRDP Trusts are required to redeem certain of its outstanding VRDP Shares if they fail 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 VRDP Trusts. The redemption price per VRDP Share is equal to the liquidation value per share plus any outstanding unpaid dividends.

Dividends on the VRDP Shares are payable monthly at a variable rate set weekly by the remarketing agent. Such dividend rates are generally based upon a spread over a base rate and cannot exceed a maximum rate. In the event of a failed remarketing, the dividend rate of the VRDP Shares will be reset to a maximum rate. The maximum rate is determined based on, among other things, the long-term preferred share rating assigned to the VRDP Shares and the length of time that the VRDP Shares fail to be remarketed. At the date of issuance, the VRDP Shares were assigned a long-term rating of Aaa from Moody’s and AAA from Fitch. Subsequent to the issuance of the VRDP Shares, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of February 28, 2015, 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 on such shares, although the dividend rate paid on the VRDP Shares is not directly related based upon either short-term rating. As of February 28, 2015, the short-term ratings of the liquidity provider and the VRDP Shares for BIE were P1, F1 and A1/watch negative as rated by Moody’s, Fitch and/or S&P, 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 short term ratings on the VRDP Shares of MFL were withdrawn by Moody’s, Fitch and/or S&P at the commencement of the special rate period, as described below. The S&P short-term ratings of the liquidity provider (Barclays) and the VRDP Shares of Barclay VRDP Funds are under review for possible downgrade.

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.

The VRDP Trusts 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 BIE’s VRDP Shares that were tendered for remarketing during the six months ended February 28, 2015 were successfully remarketed.

For the six months ended February 28, 2015, the annualized dividend rates for the VRDP Shares were as follows

 

     BIE      MFL  

Rate

    0.12%         0.90%   

On April 17, 2014, MFL commenced a three-year term ending April 19, 2017 (“special rate period”) with respect to its VRDP Shares. The implementation of the special rate period resulted in a mandatory tender of the VRDP Shares prior to the commencement of the special rate period. The mandatory tender event was not the result of a failed remarketing.

The liquidity and fee agreements remain in effect for the duration of the special rate period and the VRDP Shares are still subject to mandatory redemption by the MFL on maturity date. MFL’s VRDP Shares will not be remarketed or subject to optional or mandatory tender events during such time. During the special rate period, MFL is required to maintain the same asset coverage, basic maintenance amount and leverage requirements for the VRDP Shares.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    79


Notes to Financial Statements (continued)     

 

During the special rate period, MFL will pay dividends monthly based on the sum of Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Index and a percentage per annum based on the long-term ratings assigned to the VRDP Shares. The short-term ratings of MFL’s VRDP Shares 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 MFL’s VRDP Shares revert back to remarketable securities.

If MFL redeems the VRDP Shares on a date that is one year or more before the end of the special rate period and MFL’s 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 April 19, 2017, the holder of MFL’s VRDP Shares and MFL may mutually agree to extend the special rate period. If the special rate period is not extended, MFL’s VRDP Shares will revert back to remarketable securities and will be remarketed and available for purchase by qualified institutional investors.

For the six months ended February 28, 2015, VRDP Shares issued and outstanding of each Trust remained constant.

VMTP Shares

BBK, BAF, BYM, BLE and MVF (collectively, the “VMTP Trusts”), 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.

For the six months ended February 28, 2015, the VMTP Shares outstanding of each Trust were as follows:

 

     Issue Date      Shares Issued      Aggregate Principal      Term Date  

BBK

    12/16/11         799       $ 79,900,000         12/31/15   

BAF

    12/16/11         422       $ 42,200,000         12/31/15   

BYM

    12/16/11         1,372       $ 137,200,000         12/31/15   

BLE

    12/16/11         1,513       $ 151,300,000         12/31/15   

MVF

    12/16/11         2,438       $ 243,800,000         12/31/15   

Each VMTP Trust 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 Trust’s VMTP Shares will be extended or that a Trust’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 Trust is required to begin to segregate liquid assets with the Trust’s custodian to fund the redemption. In addition, each VMTP Trust 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 Trust’s VMTP Shares may be redeemed, in whole or in part, at any time at the option of the Trust. 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 Trusts redeem the VMTP Shares on a date that is one year or more prior to the term date and the VMTP Shares are rated above A1/A+ by Moody’s and Fitch, respectively, then such redemption is subject to a prescribed redemption premium (up to 3% of the liquidation preference) payable to the holder of the VMTP Shares based on the time remaining to the term date, subject to certain exceptions for redemptions that are required to maintain minimum asset coverage requirements. The VMTP Shares are subject to certain restrictions on transfer, and a Trust may also be required to register the VMTP Shares for sale under the Securities Act under certain circumstances. In addition, amendments to the VMTP governing document generally require the consent of the holders of VMTP Shares.

Dividends on the VMTP Shares are declared daily and payable monthly at a variable rate set weekly at a fixed rate spread to the SIFMA Municipal Swap Index. 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. Subsequent to the issuance of the VMTP Shares, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of February 28, 2015, the VMTP Shares were assigned a long-term rating of Aa1 from Moody’s under its new rating methodology. The VMTP Shares continue to be assigned a long-term rating of AAA from Fitch. The dividend rate on the VMTP Shares is subject to a step-up spread if the Trusts 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.

For the six months ended February 28, 2015, the average annualized dividend rates for the VMTP Shares were as follows:

 

     BBK      BAF      BYM      BLE      MVF  

Rate

    1.03%         1.02%         1.02%         1.02%         1.02%   

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.

 

                
80    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Notes to Financial Statements (concluded)     

 

For the six months ended February 28, 2015, VMTP Shares issued and outstanding of each Trust remained constant.

Offering Costs: The Trusts incurred costs in connection with the issuance of VRDP Shares and/or VMTP Shares. For VRDP Shares, these costs were recorded as a deferred charge and will be amortized over the 30-year life of the VRDP Shares with the exception of upfront fees paid to the liquidity provider which were amortized over the life of the liquidity agreement. For VMTP Shares, these costs were recorded as a deferred charge and will be amortized over the 3-year life of the VMTP Shares. Amortization of these costs is included in interest expense, fees and amortization of offering costs in the Statements of Operations.

10. Subsequent Events:

Management’s evaluation of the impact of all subsequent events on the Trusts’ financial statements was completed through the date the financial statements were issued and the following items were noted:

The Trusts paid a net investment income dividend in the following amounts per share on April 1, 2015 to Common Shareholders of record on March 13, 2015:

 

     Common
Dividend
Per Share
 

BIE

  $ 0.0760   

BBK

  $ 0.0820   

BAF

  $ 0.0685   

BYM

  $ 0.0715   

BLE

  $ 0.0790   

MFL

  $ 0.0715   

MVF

  $ 0.0535   

Additionally, the Trusts declared a net investment income dividend on April 1, 2015 payable to Common Shareholders of record on April 15, 2015 for the same amounts noted above.

The dividends declared on Preferred Shares for the period March 1, 2015 to March 31, 2015 were as follows:

 

     Preferred
Shares
     Series      Dividend
Declared
 

BIE

    VRDP Shares         W-7       $ 1,663   

BBK

    VMTP Shares         W-7       $ 69,217   

BAF

    VMTP Shares         W-7       $ 36,558   

BYM

    VMTP Shares         W-7       $ 118,856   

BLE

    VMTP Shares         W-7       $ 131,071   

MFL

    VRDP Shares         W-7       $ 209,900   

MVF

    VMTP Shares         W-7       $ 211,204   

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    81


Officers and Trustees     

 

Richard E. Cavanagh, Chairman of the Board and Trustee

Karen P. Robards, Vice Chairperson of the Board, Chairperson of the Audit Committee and Trustee

Michael J. Castellano, Trustee and Member of the Audit Committee

Frank J. Fabozzi, Trustee and Member of the Audit Committee

Kathleen F. Feldstein, Trustee

James T. Flynn, Trustee and Member of the Audit Committee

Jerrold B. Harris, Trustee

R. Glenn Hubbard, Trustee

W. Carl Kester, Trustee and Member of the Audit Committee

Barbara G. Novick, Trustee

John M. Perlowski, Trustee, President and Chief Executive Officer

Robert W. Crothers, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Charles Park, Chief Compliance Officer

Janey Ahn, Secretary

 

Effective September 5, 2014, Brendan Kyne resigned as a Vice President of the Trusts.

Effective December 31, 2014, Paul L. Audet and Henry Gabbay resigned as Trustees of the Trusts. Effective December 31, 2014, Barbara G. Novick and John M. Perlowski were appointed to serve as Trustees of the Trusts.

 

         

Investment Advisor

BlackRock Advisors, LLC

Wilmington, DE 19809

 

Transfer Agent

Common Shares:

Computershare Trust

Company, N.A.

Canton, MA 02021

 

VRDP Liquidity Providers

Bank of America, N.A.1

New York, NY 10036

 

Barclays Bank PLC2

New York, NY 10019

 

Accounting Agent

State Street Bank and

Trust Company

Boston, MA 02116

 

Legal Counsel

Skadden, Arps, Slate,

Meagher & Flom LLP

New York, NY 10036

Custodian

State Street Bank and
Trust Company

Boston, MA 02110

 

VRDP Tender and Paying

Agent and VMTP Redemption

and Paying Agent

The Bank of New York Mellon

New York, NY 10289

 

VRDP Remarketing

Agents

Merrill Lynch, Pierce,

Fenner & Smith

Incorporated1

New York, NY 10036

 

Barclays Capital Inc.2

New York, NY 10019

 

Independent Registered

Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02116

 

Address of the Trusts

100 Bellevue Parkway

Wilmington, DE 19809

 

 

  1  

For MFL.

 

  2  

For BIE.

 

                
82    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


Additional Information     

 

 

Dividend Policy

Each Trust’s dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of distributions, the Trusts may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the distributions paid by the Trusts for any particular month may be more or less than the amount of net investment income earned by the Trusts during such month. The Trusts’ 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.

 

General Information

The Trusts do not make available copies of their Statements of Additional Information because the Trusts’ shares are not continuously offered, which means that the Statement of Additional Information of each Trust has not been updated after completion of the respective Trust’s offerings and the information contained in each Trust’s Statement of Additional Information may have become outdated.

During the period, there were no material changes in the Trusts’ investment objectives or policies or to the Trusts’ charters or by-laws that would delay or prevent a change of control of the Trusts that were not approved by the shareholders or in the principal risk factors associated with investment in the Trusts. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Trusts’ portfolios.

Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Trusts 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 Trusts and does not, and is not intended to, incorporate BlackRock’s website in this report.

Electronic Delivery

Shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual shareholder reports by enrolling in the electronic delivery program. Electronic copies of shareholder reports are available on BlackRock’s website.

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor. Please note that not all investment advisors, banks or brokerages may offer this service.

Householding

The Trusts 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 (800) 882-0052.

Availability of Quarterly Schedule of Investments

The Trusts 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 Trusts’ 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, D.C. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Trusts’ Forms N-Q may also be obtained upon request and without charge by calling (800) 882-0052.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Trusts use to determine how to vote proxies relating to portfolio securities is available upon request and without charge (1) by calling (800) 882-0052; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Trusts voted proxies relating to securities held in the Trusts’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 882-0052 and (2) on the SEC’s website at http://www.sec.gov.

Availability of Trust Updates

BlackRock will update performance and certain other data for the Trusts on a monthly basis on its website in the “Closed-end Funds” section of http://www.blackrock.com as well as certain other material information as necessary from time to time. Investors and others are advised to check the website for updated performance information and the release of other material information about the Trusts. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Trusts and does not, and is not intended to, incorporate BlackRock’s website into this report.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2015    83


Additional Information (concluded)     

 

 

Shelf Offering Program

From time-to-time, each Trust may seek to raise additional equity capital through an equity shelf program (a “Shelf Offering”). In a Shelf Offering, the Trust may, subject to market conditions, raise additional equity capital by issuing new Common Shares from time to time in varying amounts at a net price at or above the Trust’s net asset value (“NAV”) per Common Share (calculated within 48 hours of pricing). While any such Shelf Offering may allow a Trust to pursue additional investment opportunities without the need to sell existing portfolio investments, it could also entail risks — including that the issuance of additional Common Shares may limit the extent to which the Common Shares are able to trade at a premium to NAV in the secondary market. The Trusts have not filed a registration statement with respect to any Shelf Offerings. This report is not an offer to sell Trust Common Shares and is not a solicitation of an offer to buy Trust Common Shares. If the Trust files a registration statement with respect to any Shelf Offering, the prospectus contained therein will contain more complete information about the Trust and should be read carefully before investing.

 

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.

 

                
84    SEMI-ANNUAL REPORT    FEBRUARY 28, 2015   


This report is intended for current holders. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Trusts 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 short-term interest rates may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.

 

 

LOGO

CEF-NTL-7-2/15-SAR    LOGO


Item 2 – Code of Ethics – Not Applicable to this semi-annual report
Item 3 – Audit Committee Financial Expert – Not Applicable to this semi-annual report
Item 4 – Principal Accountant Fees and Services – Not Applicable to this semi-annual report
Item 5 – Audit Committee of Listed Registrants – Not Applicable to this semi-annual report
Item 6 – Investments
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.
Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable to this semi-annual report
Item 8 – Portfolio Managers of Closed-End Management Investment Companies

(a) Not Applicable to this semi-annual report

(b) As of the date of this filing, there have been no changes in any of the portfolio managers identified in the most recent annual report on Form N-CSR.

Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable
Item 10 – Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.
Item 11 – Controls and Procedures
(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by
Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in
Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12 – Exhibits attached hereto
(a)(1) – Code of Ethics – Not Applicable to this semi-annual report
(a)(2) – Certifications – Attached hereto
(a)(3) – Not Applicable
(b) – Certifications – Attached hereto

 

2


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

  BlackRock MuniVest Fund, Inc.

 

  By:    

/s/ John M. Perlowski

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

  Date: May 1, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

  By:

/s/ John M. Perlowski

John M. Perlowski
Chief Executive Officer (principal executive officer) of
BlackRock MuniVest Fund, Inc.
  Date: May 1, 2015
  By:    

/s/ Neal J. Andrews

Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock MuniVest Fund, Inc.

  Date: May 1, 2015

 

3