BLACKROCK MARYLAND MUNICIPAL BOND TRUST

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-21051

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

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

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

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

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

Date of fiscal year end: 08/31/2015

Date of reporting period: 05/31/2015

Item 1 – Schedule of Investments

Schedule of Investments May 31, 2015 (Unaudited)

  

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

     Value  

Maryland — 134.3%

                 

Corporate — 2.7%

     

Maryland EDC, Refunding RB:

     

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

    $ 500      $ 553,295   

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

      250        292,215   
    

 

 

  
               845,510   

County/City/Special District/School District — 27.5%

     

City of Baltimore Maryland, RB:

     

Series C, Wastewater Project, 5.00%, 7/01/39

      1,000        1,123,000   

Special Tax, Harborview Lot No. 2, 6.50%, 7/01/31

      923        924,911   

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

      500        562,545   

County of Anne Arundel Maryland Consolidated, Special Taxing District, Villages at Two Rivers Project, 5.25%, 7/01/44

      250        253,050   

County of Frederick Maryland, GO, Series A, 5.00%, 8/01/24

      275        338,569   

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

      250        281,415   

County of Montgomery Maryland, GO, Refunding, Consolidated Public Improvement, Series A, 5.00%, 7/01/19 (a)

      175        201,078   

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

      1,500        1,501,050   

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

      500        590,645   

State of Maryland, GO:

     

State & Local Facilities Loan, 1st Series B, 5.00%, 3/15/19 (a)

      250        285,070   
Municipal Bonds   

Par  

(000)

     Value  

Maryland (continued)

                 

County/City/Special District/School District (concluded)

     

State of Maryland, GO (concluded):

     

State & Local Facilities Loan, 2nd Series B, 3.00%, 8/01/27

    $ 2,425      $ 2,430,626   
    

 

 

  
               8,491,959   

Education — 34.4%

     

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

     

4.00%, 9/01/27

      510        541,758   

3.25%, 9/01/28

      360        359,964   

Maryland EDC, Refunding RB:

     

University of Maryland Project, 5.00%, 7/01/39

      500        526,880   

University Village at Sheppard Pratt, 5.00%, 7/01/33

      1,000        1,063,700   

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

     

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

      1,000        1,107,980   

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

      1,000        1,165,710   

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

      500        517,150   

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

      900        993,411   

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

      500        548,845   

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

      1,000        1,051,960   

Peninsula Regional Medical Center, 5.00%, 7/01/25

      500        590,145   

Peninsula Regional Medical Center, 5.00%, 7/01/39

      1,000        1,088,260   

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

      400        489,148   

 

                
   BLACKROCK MARYLAND MUNICIPAL BOND TRUST    MAY 31, 2015    1

Schedule of Investments (continued)

   

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

 

 

Municipal Bonds   

Par  

(000)

     Value  

Maryland (continued)

                 

Education (concluded)

     

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

    $ 500      $ 595,185   
    

 

 

  
               10,640,096   

Health — 32.8%

     

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

      250        278,630   

County of Howard Maryland, RB, Series A, 5.00%, 6/01/44

      550        591,679   

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

      550        540,276   

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

      250        266,840   

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

      1,000        1,105,580   

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

      1,000        1,098,180   

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

     

University of Maryland, 5.00%, 7/01/35

      200        219,422   

University of Maryland, 4.00%, 7/01/41

      500        486,545   

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

      1,000        1,071,220   

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

      1,000        1,111,120   

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

      1,250        1,198,950   

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

      1,000        1,077,180   
Municipal Bonds   

Par  

(000)

     Value  

Maryland (continued)

                 

Health (concluded)

     

Maryland Health & Higher Educational Facilities Authority, Refunding RB (concluded):

     

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

    $ 1,000      $ 1,085,570   
    

 

 

  
               10,131,192   

Housing — 11.0%

     

Maryland Community Development Administration, HRB, Residential:

     

Series A, 4.05%, 7/01/42

      1,220        1,229,101   

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

      1,000        1,014,510   

Maryland Community Development Administration, RB:

     

3.70%, 7/01/35

      500        485,470   

5.05%, 9/01/39

      500        518,785   

Series B, 4.75%, 9/01/39

      150        153,809   
    

 

 

  
               3,401,675   

Transportation — 15.0%

     

Maryland EDC, RB:

     

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

      500        536,875   

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

      500        536,875   

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

      1,000        1,092,260   

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

      1,925        1,975,416   

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

      445        509,342   
    

 

 

  
               4,650,768   

Utilities — 10.9%

     

City of Baltimore Maryland, RB:

     

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

      1,000        1,121,450   

 

                
2    BLACKROCK MARYLAND MUNICIPAL BOND TRUST    MAY 31, 2015   

Schedule of Investments (continued)

   

BlackRock Maryland Municipal Bond Trust (BZM)

(Percentages shown are based on Net Assets)

 

 

Municipal Bonds   

Par  

(000)

     Value  

Maryland (concluded)

                 

Utilities (concluded)

     

City of Baltimore Maryland, RB (concluded):

     

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

    $ 1,000      $ 1,113,550   

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

     

5.00%, 4/01/31

      500        572,385   

5.00%, 4/01/32

      500        570,070   
    

 

 

  
               3,377,455   
Total Municipal Bonds in Maryland              41,538,655   
    

District of Columbia — 3.7%

                 

Transportation — 3.7%

     

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

      1,000        1,134,520   
    

Guam — 2.3%

                 

State — 2.3%

     

Territory of Guam, RB, Series A:

     

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

      250        271,110   

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

      410        454,493   
Total Municipal Bonds in Guam              725,603   
Total Municipal Bonds — 140.3%              43,398,778   

Municipal Bonds Transferred to

Tender Option Bond Trusts (b)

   

Par  

(000)

     Value  

Maryland — 10.7%

                 

Transportation — 10.7%

     

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

    $ 3,000      $ 3,293,340   

Total Long-Term Investments

(Cost — $45,061,291) — 151.0%

              46,692,118   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.02% (c)(d)

      1,091,043      $ 1,091,043   

Total Short-Term Securities

(Cost — $1,091,043) — 3.5%

              1,091,043   
Total Investments (Cost — $46,152,334*) — 154.5%        47,783,161   
Other Assets Less Liabilities — 2.0%        645,697   

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

   

     (1,500,577 ) 
VRDP Shares, at Liquidation Value — (51.7%)        (16,000,000 ) 
    

 

 

  
Net Assets Applicable to Common Shares — 100.0%      $ 30,928,281   
    

 

 

  

 

*   As of May 31, 2015, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost

   $ 44,567,678   
 

 

 

  

Gross unrealized appreciation

   $ 1,864,718   

Gross unrealized depreciation

     (149,235 ) 
 

 

 

  

Net unrealized appreciation

   $ 1,715,483   
 

 

 

  

 

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)   Represent bonds transferred to a TOB Trust. In exchange for which the Trust received cash and residual interest certificates. These bonds serve as collateral in a secured borrowing.

 

(c)   During the period ended May 31, 2015, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

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

FFI Institutional Tax-Exempt Fund

        23,789           1,067,254           1,091,043         $ 669   

 

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

 

                
   BLACKROCK MARYLAND MUNICIPAL BOND TRUST    MAY 31, 2015    3

Schedule of Investments (continued)

   

BlackRock Maryland Municipal Bond Trust (BZM)

 

Portfolio Abbreviations

 

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

 

•  

As of May 31, 2015, financial futures contracts outstanding were as follows:

 

Contracts
Short		     Issue   Exchange   Expiration   Notional
Value		     Unrealized
Depreciation		  
  (17 )    10-Year U.S. Treasury Note   Chicago Board of Trade   September 2015   $ 2,170,688      $ (9,720 ) 

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

 

•  

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

 

  •  

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

 

  •  

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

 

  •  

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the 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, please refer to the Trust’s most recent financial statements as contained in its semi-annual report.

As of May 31, 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

     —         $ 46,692,118         —      $ 46,692,118   

Short-Term Securities

   $ 1,091,043           —         —        1,091,043   
 

 

 

       

 

 

       

 

     

 

 

  

Total

   $ 1,091,043         $ 46,692,118         —      $ 47,783,161   
 

 

 

       

 

 

       

 

     

 

 

  

 

1   See above Schedule of Investments for values in each sector.

     

 

                
4    BLACKROCK MARYLAND MUNICIPAL BOND TRUST    MAY 31, 2015   

Schedule of Investments (concluded)

   

BlackRock Maryland Municipal Bond Trust (BZM)

 

     Level 1        Level 2        Level 3      Total  
Derivative Financial Instruments 2                 

Liabilities:

                 

Interest rate contracts

   $ (9,720 )         —         —      $ (9,720 ) 

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 reporting purposes. As of May 31, 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

   $ 22,950           —         —      $ 22,950   

Liabilities:

                 

TOB trust certificates

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

VRDP Shares

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

 

 

       

 

 

       

 

     

 

 

  

Total

   $ 22,950         $ (17,500,000 )       —      $ (17,477,050 ) 
 

 

 

       

 

 

       

 

     

 

 

  

During the ended May 31, 2015, there were no transfers between levels.

 

                
   BLACKROCK MARYLAND MUNICIPAL BOND TRUST    MAY 31, 2015    5

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

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

 

BlackRock Maryland Municipal Bond Trust   
By:   

/s/ John M. Perlowski

   
   John M. Perlowski   
  

Chief Executive Officer (principal executive officer) of

BlackRock Maryland Municipal Bond Trust

Date: July 23, 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 Maryland Municipal Bond Trust

Date: July 23, 2015   
By:   

/s/ Neal J. Andrews

   
   Neal J. Andrews   
  

Chief Financial Officer (principal financial officer) of

BlackRock Maryland Municipal Bond Trust

Date: July 23, 2015