BLACKROCK MUNIVEST FUND, INC.
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT

COMPANIES

Investment Company Act file number 811-05611

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: 08/31/2013

Date of reporting period: 02/28/2013


Table of Contents

Item 1 – Report to Stockholders


Table of Contents

FEBRUARY 28, 2013

 

 

 

 

 

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
Table of Contents     

 

      Page  

Dear Shareholder

     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

     56   

Statements of Operations

     57   

Statements of Changes in Net Assets

     58   

Statements of Cash Flows

     60   

Financial Highlights

     61   

Notes to Financial Statements

     68   

Officers and Trustees

     78   

Additional Information

     79   

 

                
2    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
Dear Shareholder

 

Despite a number of headwinds, risk assets generated strong returns during the 6- and 12-month periods as investors sought meaningful yields in the ongoing low-interest-rate environment. About this time one year ago, the European debt crisis returned to the headlines as unresolved policy decisions left it unclear as to how troubled peripheral countries would finance their sovereign debt, causing yields to soar. In the second quarter of 2012, political instability in Greece and severe deficit and liquidity problems in Spain raised the specter of a full-blown euro collapse. Alongside the drama in Europe, investors were discouraged by gloomy economic reports from various parts of the world. A slowdown in China, a key powerhouse for global growth, emerged as a particular concern. As the outlook for the global economy worsened, however, investors grew increasingly optimistic that the world’s largest central banks would soon intervene to stimulate growth. This theme, along with the announcement of the European Central Bank’s (“ECB’s”) firm commitment to preserve the euro currency bloc, drove most asset classes higher through the summer. Policy relief came in early September, when the ECB announced its decision to support the eurozone’s debt-laden countries with unlimited purchases of short term sovereign debt. Days later, the US Federal Reserve announced its own much-anticipated stimulus package.

Although financial markets world-wide were buoyed by accommodative monetary policies, risk assets weakened in the fall. Global trade began to slow as many European countries fell into recession and growth continued to decelerate in China, where a once-a-decade leadership change compounded uncertainty. In the United States, stocks slid on lackluster corporate earnings reports and market volatility rose in advance of the US Presidential election. In the post-election environment, investors grew increasingly concerned over the “fiscal cliff,” the automatic tax increases and spending cuts that had been scheduled to take effect at the beginning of 2013. There was widespread fear that the fiscal cliff would push the United States into recession unless politicians could agree upon alternate measures to reduce the deficit before the end of 2012. Worries that bipartisan gridlock would preclude a timely budget deal triggered higher levels of volatility in financial markets around the world in the months leading up to the last day of the year. Ultimately, the worst of the fiscal cliff was averted with a last-minute tax deal; however, decisions relating to spending cuts and the debt ceiling continued to weigh on investors’ minds.

Investors shook off the nerve-wracking finale to 2012 and began the New Year with a powerful equity rally. Money that had been pulled to the sidelines amid year-end tax-rate uncertainty poured back into the markets in January. Key indicators signaled modest but broad-based improvements in the world’s major economies, particularly in China. Global equities soared through January while rising US Treasury yields pressured high-quality fixed income assets. However, bond markets strengthened in February when economic momentum slowed and investors toned down their risk appetite. US stocks continued to rise, but at a more moderate pace. Uncertainty about how long the Federal Reserve would maintain its easing bias drove high levels of volatility later in the month, but these fears abated as the budget sequester (automatic spending cuts scheduled to take effect March 1) began to appear imminent and was deemed likely to deter any near-term curtailment of monetary easing policies. Outside the United States, equities largely declined as political uncertainty escalated after the Italian presidential election ended in a stalemate.

On the whole, riskier asset classes outperformed lower-risk investments for the 6- and 12-month periods ended February 28, 2013. International, US small cap and emerging market equities were the leading asset classes for the 6-month period, while US stocks and high yield bonds generated the strongest returns for the 12-month period. US Treasury yields remained relatively low overall, but have inched higher in recent months, pressuring Treasuries and investment-grade bonds. Tax-exempt municipal bonds, however, continued to benefit from favorable supply-and-demand dynamics. Near-zero short term interest rates continued to keep yields on money market securities near their all-time lows.

Investors continue to face many of the same risks as in years past. But we see a world of possibilities. BlackRock was built to provide the global market insight, breadth of capabilities, unbiased investment advice and deep risk management expertise these times require. Investors everywhere are asking, “So what do I do with my money?” Visit www.blackrock.com for answers.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

LOGO

“Despite a number of headwinds, risk assets generated strong returns during the 6- and 12-month periods as investors sought meaningful yields in the ongoing low-interest-rate environment.”

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of February 28, 2013  
    6-month     12-month  

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

    8.95     13.46

US small cap equities
(Russell 2000® Index)

    13.02        14.02   

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

    14.41        9.84   

Emerging market equities
(MSCI Emerging Markets Index)

    12.06        0.28   

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

    0.05        0.11   

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

    (1.51     3.66   

US investment grade
bonds (Barclays US Aggregate Bond Index)

    0.15        3.12   

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

    2.40        5.71   

US high yield bonds

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

    6.67        11.79   
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.    

 

                
   THIS PAGE NOT PART OF YOUR FUND REPORT       3


Table of Contents
Municipal Market Overview     

 

For the Reporting Period Ended February 28, 2013      

Municipal Bonds Performed Well

Market conditions remained favorable even though supply picked up considerably in the past year. Total new issuance for the 12 months ended February 28, 2013 was $383 billion as compared to $303 billion in the prior 12-month period. However, it is important to note that a significant portion (roughly 60%) of the new supply during the most recent 12-month period was attributable to refinancing activity as issuers took advantage of lower interest rates to reduce their borrowing costs.

Increased supply was met with strong demand during the period as investors were starved for yield in the low- rate environment. Investors poured into municipal bond mutual funds, particularly long-duration and high-yield funds as they tend to provide higher levels of income. For the 12 months ended February 28, 2013, municipal bond fund inflows exceeded $46 billion (according to the Investment Company Institute).

 

S&P Municipal Bond Index

Total Returns as of February 28, 2013

  6 months:   2.40%

12 months:   5.71%

A Closer Look at Yields

 

LOGO

From February 29, 2012 to February 28, 2013, muni yields declined by 32 basis points (“bps”) from 3.23% to 2.91% on AAA-rated 30-year municipal bonds, while falling a modest 4 bps from 1.85% to 1.81% on 10-year bonds and rising 9 bps from 0.68% to 0.77% on 5-year bonds (as measured by Thomson Municipal Market Data). (Bond prices rise as yields fall.) Overall, the municipal yield curve remained relatively steep, but flattened over the 12-month period as the spread between 2- and 30-year maturities tightened by 37 bps and the spread between 2- and 10-year maturities tightened by 9 bps.

During the same time period, US Treasury rates fell by 10 bps in both the 5- and 10-year space while rising 1 bp on 30-year bonds. Accordingly, tax-exempt municipal bonds moderately underperformed Treasuries in the 5- and 10-year space, but significantly outperformed Treasury bonds on the long end of the curve. This outperformance was driven largely by a supply/demand imbalance within the municipal market while evidence of a recovering domestic economy pushed interest rates higher. Additionally, as higher US tax rates began to appear imminent late in 2012, municipal bonds benefited from the increased appeal of tax-exempt investing. Municipals have become an appropriate avenue for investors seeking yield in the low-rate environment as the asset class is known for its lower volatility and preservation of earnings as tax rates rise.

Financial Conditions of Municipal Issuers Continue to Improve

Austerity and de-leveraging have been the general themes across the country as states seek to balance their budgets, although a small number of states continue to rely on a “kick-the-can” approach to close their budget gaps. Broadly speaking, state governments have demonstrated better fiscal health as their revenues have steadily improved in recent years. Many local municipalities, however, continue to face higher costs passed down from the state level. BlackRock maintains the view that municipal bond defaults will be minimal and remain in the periphery, and that the overall market is fundamentally sound. We continue to recognize that careful credit research and security selection remain imperative amid uncertainty in this economic environment.

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

 

                
4    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
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.

To obtain leverage, the Trusts issue Variable Rate Demand Preferred Shares (“VRDP Shares”) or Variable Rate Muni Term Preferred Shares (“VMTP Shares”) (VRDP Shares and VMTP Shares are collectively referred to as “Preferred Shares”). Preferred Shares pay dividends at prevailing short-term interest rates, and the Trusts invest the proceeds in long-term municipal bonds. In general, the concept of leveraging is based on the premise that the financing cost of assets to be obtained from leverage, which will be based on short-term interest rates, will normally be lower than the income earned by each Trust on its longer-term portfolio investments. To the extent that the total assets of each Trust (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Trust’s shareholders will benefit from the incremental net income.

The interest earned on securities purchased with the proceeds from leverage is paid to shareholders in the form of dividends, and the value of these portfolio holdings is reflected in the per share NAV. However, in order to benefit shareholders, the yield curve must be positively sloped; that is, short-term interest rates must be lower than long-term interest rates. If the yield curve becomes negatively sloped, meaning short-term interest rates exceed long-term interest rates, income to shareholders will be lower than if the Trusts had not used leverage.

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

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

Furthermore, the value of the Trusts’ portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the redemption value of the Trusts’ Preferred Shares and/or debt securities does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Trusts’ NAVs positively or negatively in addition to the impact on Trust performance from leverage from Preferred Shares and borrowings discussed above.

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

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

Under the Investment Company Act of 1940, as amended (the “1940 Act”), the Trusts are permitted to issue senior securities in the form of equity securities (e.g., Preferred Shares) up to 50% of their total managed assets (each Trust’s total assets less the sum of its accrued liabilities). In addition, each Trust with VRDP or VMTP Shares limits its economic leverage to 45% of its total managed assets. As of February 28, 2013, the Trusts had economic leverage from Preferred Shares and/or TOBs as a percentage of their total managed assets as follows:

 

      Percent of
Economic
Leverage
 

BIE

     39

BBK

     36

BAF

     36

BYM

     37

BLE

     39

MFL

     40

MVF

     39

 

Derivative Financial Instruments     

 

The Trusts may invest in various derivative financial instruments, including financial futures contracts and options, as specified in Note 2 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such derivative financial instruments are used to obtain exposure to a security, index and/or market without owning or taking physical custody of securities or to hedge market and/or interest rate risks. Derivative financial instruments involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative financial instrument. The 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 require a Trust to sell or purchase portfolio investments at inopportune times or for distressed values, may limit the amount of appreciation a Trust can realize on an investment, may result in lower dividends paid to shareholders or may cause a Trust to hold an investment that it might otherwise sell. The Trusts’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    5


Table of Contents
Trust Summary as of February 28, 2013    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.

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

 

Performance      

 

  Ÿ  

For the six months ended February 28, 2013, the Trust returned 4.15% based on market price and 3.94% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% 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.

 

  Ÿ  

The Trust’s holdings in the State of California contributed positively to performance. While federal tax rate increases were supportive of municipal bonds overall, the addition of a state tax rate increase in California made these issues even more compelling on an after-tax basis. Also enhancing results were holdings in the health, education and transportation sectors. Particularly strong returns came from the Trust’s lower-quality holdings in those sectors, which benefited from strong demand as investors sought higher-yielding investments in the low interest rate environment.

 

  Ÿ  

Conversely, exposure to Puerto Rico sales tax bonds had a negative impact on performance as the continued decline of the local economy and concerns about credit rating downgrades resulted in falling prices across Puerto Rico-issued securities broadly.

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, 2013 ($16.83)1

   5.56%

Tax Equivalent Yield2

   9.82%

Current Monthly Distribution per Common Share3

   $0.0780

Current Annualized Distribution per Common Share3

   $0.9360

Economic Leverage as of February 28, 20134

   39%

 

  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 Monthly Distribution per Common Share, declared on March 1, 2013, was decreased to $0.076 per share. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

  4   

Represents VRDP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VRDP Shares and TOBs, 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, 2013   


Table of Contents
     BlackRock Municipal Bond Investment Trust

 

Market Price and Net Asset Value      

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

 

        2/28/13        8/31/12        Change      High        Low  

Market Price

     $ 16.83         $ 16.61           1.32    $ 17.99         $ 16.20   

Net Asset Value

     $ 17.07         $ 16.88           1.13    $ 17.70         $ 16.61   

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:

 

Sector Allocation            
      2/28/13     8/31/12  

County/City/Special District/School District

     21     19

Transportation

     21        18   

Health

     16        17   

Utilities

     16        16   

Education

     11        12   

State

     9        12   

Housing

     4        4   

Corporate

     1        1   

Tobacco

     1        1   
Credit Quality Allocation1            
      2/28/13     8/31/12  

AAA/Aaa

     13     15

AA/Aa

     57        60   

A

     26        20   

BBB/Baa

     4        5   

 

  1   

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

Call/Maturity Schedule2      

Calendar Year Ended December 31,

  

2013

       

2014

     4

2015

       

2016

     2   

2017

     1   

 

  2   

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

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    7


Table of Contents
Trust Summary as of February 28, 2013    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, 2013, the Trust returned 4.98% based on market price and 5.01% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust’s premium 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 lower-quality investment grade holdings contributed positively to performance as the tightening of credit spreads drove their outperformance over higher-quality bonds during the period. Additional positive performance came from the Trust’s allocations to the higher-yielding health, corporate and school district sectors. Heavy exposure to California credits, the best performing state for the period, boosted returns. The Trust also benefited from the roll-down effect, whereby effective maturities become shorter with the passing of the year and therefore bonds are evaluated at lower yield levels, which, in a steep yield curve environment, results in higher prices.

 

  Ÿ  

Detracting from performance was the Trust’s neutral-to-long average duration (greater sensitivity to interest rates) as most of the municipal yield curve experienced slightly higher yields and lower bond prices. The Trust’s yield curve positioning favoring longer-dated maturities also had a negative effect. Exposure to Puerto Rico credits detracted from results as the commonwealth’s deteriorating credit metrics and ratings downgrades led to the underperformance of those issues.

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, 2013 ($17.35)1

   5.78%

Tax Equivalent Yield2

   10.21%

Current Monthly Distribution per Common Share3

   $0.0835

Current Annualized Distribution per Common Share3

   $1.0020

Economic Leverage as of February 28, 20134

   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 Monthly Distribution per Common Share, declared on March 1, 2013, was decreased to $0.0785 per share. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

  4   

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VMTP Shares and TOBs, 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, 2013   


Table of Contents
     BlackRock Municipal Bond Trust

 

 

Market Price and Net Asset Value

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

 

      2/28/13        8/31/12        Change      High        Low  

Market Price

   $ 17.35         $ 17.16           1.11    $ 18.74         $ 16.85   

Net Asset Value.

   $ 16.98         $ 16.79           1.13    $ 17.62         $ 16.56   

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:

 

Sector Allocation          
     2/28/13     8/31/12  

Health

    23     25

County/City/Special District/School District

    14        13   

Utilities

    14        8   

Transportation

    13        13   

State

    12        14   

Education

    11        11   

Housing

    6        8   

Corporate

    6        5   

Tobacco

    1        3   
Credit Quality Allocation1            
      2/28/13     8/31/12  

AAA/Aaa

     6     9

AA/Aa

     40        35   

A

     30        26   

BBB/Baa

     12        18   

BB/Ba

     5        4   

B

     1        2   

Not Rated2

     6        6   

 

  1   

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

 

  2   

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of February 28, 2013 and August 31, 2012, the market value of these securities was $4,854,688, representing 2%, and $3,199,110, representing 1%, respectively, of the Trust’s long-term investments.

Call/Maturity Schedule3      

Calendar Year Ended December 31,

  

2013

     9

2014

     5   

2015

     2   

2016

     3   

2017

     3   

 

  3   

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

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    9


Table of Contents
Trust Summary as of February 28, 2013    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.

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

 

Performance

 

  Ÿ  

For the six months ended February 28, 2013, the Trust returned 2.83% based on market price and 3.50% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

  Ÿ  

The Trust’s holdings in the State of California contributed positively to performance. While federal tax rate increases were supportive of municipal bonds overall, the addition of a state tax rate increase in California made these issues even more compelling on an after-tax basis. Also enhancing results were holdings in the health, education and transportation sectors. Particularly strong returns came from the Trust’s lower-quality holdings in those sectors, which benefited from strong demand as investors sought higher-yielding investments in the low interest rate environment.

 

  Ÿ  

Conversely, exposure to Puerto Rico sales tax bonds had a negative impact on performance as the continued decline of the local economy and concerns about credit rating downgrades resulted in falling prices across Puerto Rico-issued securities broadly.

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, 2013 ($16.29)1

  5.05%

Tax Equivalent Yield2

  8.92%

Current Monthly Distribution per Common Share3

  $0.0685

Current Annualized Distribution per Common Share3

  $0.8220

Economic Leverage as of February 28, 20134

  36%

 

  1   

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

 

  2   

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

 

  3   

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

 

  4   

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VMTP Shares and TOBs, 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, 2013   


Table of Contents
     BlackRock Municipal Income Investment Quality Trust

 

 

Market Price and Net Asset Value

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

 

      2/28/13        8/31/12        Change      High        Low  

Market Price

   $ 16.29         $ 16.24           0.31    $ 17.49         $ 15.80   

Net Asset Value

   $ 16.69         $ 16.53           0.97    $ 17.35         $ 16.26   

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:

 

Sector Allocation            
      2/28/13     8/31/12  

County/City/Special District/School District

     31     29

Transportation

     20        19   

Utilities

     17        20   

Health

     11        12   

State

     10        8   

Education

     9        10   

Housing

     1        1   

Tobacco

     1        1   
Credit Quality Allocation1            
      2/28/13     8/31/12  

AAA/Aaa

     10     11

AA/Aa

     69        74   

A

     19        14   

BBB/Baa

            1   

Not Rated

     2          

 

  1   

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

Call/Maturity Schedule2      

Calendar Year Ended December 31,

  

2013

       

2014

       

2015

       

2016

     1

2017

     1   

 

  2   

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

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    11


Table of Contents
Trust Summary as of February 28, 2013    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, 2013, the Trust returned (1.32)% based on market price and 3.62% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

  Ÿ  

The Trust’s positive performance was derived largely from income accrual as well as spread compression (price appreciation) in certain sectors, most notably health and transportation. Exposure to capital appreciation bonds (zero coupons) also had a positive impact on results as spreads generally tightened in this segment.

 

  Ÿ  

Trust performance was negatively impacted by a slight rise in interest rates during the period (bond prices fall as rates rise). Exposure to certain Puerto Rico credits detracted from performance as concerns about credit rating agency downgrades resulted in wider credit spreads (falling prices) for Puerto Rico municipal securities broadly.

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, 2013 ($16.04)1

   5.84%

Tax Equivalent Yield2

   10.32%

Current Monthly Distribution per Common Share3

   $0.0780

Current Annualized Distribution per Common Share3

   $0.9360

Economic Leverage as of February 28, 20134

   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 TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VMTP Shares and TOBs, 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, 2013   


Table of Contents
     BlackRock Municipal Income Quality Trust

 

 

Market Price and Net Asset Value      

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

 

        2/28/13        8/31/12        Change      High        Low  

Market Price

     $ 16.04         $ 16.73           (4.12 )%     $ 17.79         $ 15.71   

Net Asset Value

     $ 16.22         $ 16.11           0.68    $ 16.64         $ 15.88   

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:

 

 

Sector Allocation            
      2/28/13     8/31/12  

County/City/Special District/School District

     25     19

Transportation

     19        21   

Utilities

     19        19   

State

     16        17   

Health

     7        9   

Tobacco

     5        5   

Education

     4        6   

Corporate

     4        3   

Housing

     1        1   
Credit Quality Allocation1            
      2/28/13     8/31/12  

AAA/Aaa

     22     17

AA/Aa

     52        55   

A

     21        19   

BBB/Baa

     4        7   

B

     1        1   

Not Rated

            1 2  

 

  1   

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

 

  2   

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of August 31, 2012, the market value of these securities was $8,360,761, representing 1% of the Trust’s long-term investments.

Call/Maturity Schedule3      

Calendar Year Ended December 31,

  

2013

     9

2014

     7   

2015

     5   

2016

     5   

2017

     8   

 

  3   

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

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    13


Table of Contents
Trust Summary as of February 28, 2013    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, 2013, the Trust returned 2.29% based on market price and 4.17% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust’s premium 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 holdings generated a high distribution yield, which in the aggregate, had a meaningful impact on returns. Credit spread compression drove price appreciation, particularly within the Trust’s concentration of holdings in lower-quality investment grade and non-investment grade municipal bonds. Also boosting returns were the Trust’s allocations to corporate, health and transportation-related debt. Exposure to capital appreciation bonds (zero coupons) had a positive impact on results as this segment tends to outperform in a spread tightening environment.

 

  Ÿ  

Conversely, security selection within the corporate and tax-backed sectors hindered performance. The Trust’s long duration (greater sensitivity to interest rate movements) detracted as yields slightly rose during the period. Modest exposure to certain Puerto Rico credits had a negative impact on results as concerns about the commonwealth’s deteriorating credit metrics and ratings downgrades led to the underperformance of those issues.

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, 2013 ($16.59)1

  6.15%

Tax Equivalent Yield2

  10.87%

Current Monthly Distribution per Common Share3

  $0.0850

Current Annualized Distribution per Common Share3

  $1.0200

Economic Leverage as of February 28, 20134

  39%

 

  1  

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

 

  2  

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

 

  3  

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

 

  4  

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VMTP Shares and TOBs, 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, 2013   


Table of Contents
     BlackRock Municipal Income Trust II

 

 

Market Price and Net Asset Value      

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

 

       

2/28/13

       8/31/12        Change      High        Low  

Market Price

     $ 16.59         $ 16.74           (0.90 )%     $ 17.61         $ 15.85   

Net Asset Value

     $ 16.25         $ 16.10           0.93    $ 16.78         $ 15.88   

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:

 

Sector Allocation            
      2/28/13     8/31/12  

Transportation

     20     17

Health

     17        18   

Utilities

     17        15   

State

     13        16   

County/City/Special District/School District

     12        11   

Corporate

     8        7   

Education

     8        9   

Tobacco

     3        4   

Housing

     2        3   
Credit Quality Allocation1            
      2/28/13     8/31/12  

AAA/Aaa

     10     13

AA/Aa

     35        36   

A

     30        25   

BBB/Baa

     18        17   

BB/Ba

            2   

B

     1        1   

Not Rated2

     6        6   

 

  1  

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

 

  2  

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of February 28, 2013 and August 31, 2012, the market value of these securities was $12,353,604 and $12,361,560, each representing 2%, respectively, of the Trust’s long-term investments.

Call/Maturity Schedule3      

Calendar Year Ended December 31,

  

2013

     6

2014

     1   

2015

     6   

2016

     5   

2017

     5   

 

  3  

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

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    15


Table of Contents
Trust Summary as of February 28, 2013    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.

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

 

Performance

 

  Ÿ  

For the six months ended February 28, 2013, the Trust returned 0.13% based on market price and 3.97% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.

 

  Ÿ  

The Trust’s holdings in the State of California contributed positively to performance. While federal tax rate increases were supportive of municipal bonds overall, the addition of a state tax rate increase in California made these issues even more compelling on an after-tax basis. Also enhancing results were holdings in the health, education and transportation sectors. Particularly strong returns came from the Trust’s lower-quality holdings in those sectors, which benefited from strong demand as investors sought higher-yielding investments in the low interest rate environment.

 

  Ÿ  

Conversely, exposure to Puerto Rico sales tax bonds had a negative impact on performance as the continued decline of the local economy and concerns about credit rating downgrades resulted in falling prices across Puerto Rico-issued securities broadly.

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, 2013 ($15.70)1

  5.85%

Tax Equivalent Yield2

  10.34%

Current Monthly Distribution per Common Share3

  $0.0765

Current Annualized Distribution per Common Share3

  $0.9180

Economic Leverage as of February 28, 20134

  40%

 

  1  

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

 

  2  

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

 

  3  

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

 

  4  

Represents VRDP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VRDP Shares and TOBs, 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, 2013   


Table of Contents
     BlackRock MuniHoldings Investment Quality Fund

 

Market Price and Net Asset Value      

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

 

        2/28/13        8/31/12        Change      High        Low  

Market Price

     $ 15.70         $ 16.13           (2.67 )%     $ 17.20         $ 15.52   

Net Asset Value

     $ 16.13         $ 15.96           1.07    $ 16.77         $ 15.70   

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:

 

Sector Allocation            
      2/28/13     8/31/12  

Transportation

     28     21

Utilities

     18        18   

County/City/Special District/School District

     15        16   

State

     14        16   

Health

     12        14   

Education

     10        11   

Housing

     2        3   

Tobacco

     1        1   
Credit Quality Allocation1            
      2/28/13     8/31/12  

AAA/Aaa

     13     14

AA/Aa

     59        66   

A

     26        18   

BBB/Baa

            1   

Not Rated2

     2        1   

 

  1   

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

 

  2   

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of February 28, 2013 and August 31, 2012, the market value of these securities was $8,585,448 and $4,206,588, each representing less than 1%, respectively, of the Trust’s long-term investments.

Call/Maturity Schedule3      

Calendar Year Ended December 31,

  

2013

     1

2014

     1   

2015

       

2016

     1   

2017

     3   

 

  3   

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

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    17


Table of Contents
Trust Summary as of February 28, 2013    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). The Trust invests, under normal market conditions, primarily in long term municipal obligations rated investment grade at the time of investment and invests primarily in long term municipal obligations with maturities of more than ten years 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, 2013, the Trust returned 3.39% based on market price and 3.97% based on NAV. For the same period, the closed-end Lipper General & Insured Municipal Debt Funds (Leveraged) category posted an average return of 2.51% based on market price and 4.16% based on NAV. All returns reflect reinvestment of dividends. The Trust’s premium 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 positive performance was derived mainly from its coupon income component as municipal market performance during the six-month period, although positive, was less robust than it had been in the prior eighteen months. The Trust benefited from its zero-coupon bond holdings due to positive price movement in that segment. Exposure to lower-quality investment grade credits boosted results given strong demand from investors seeking higher-yielding investments in the low interest rate environment.

 

  Ÿ  

Interest rates inched higher during the period, which negatively impacted performance (bond prices fall as rates rise). Exposure to Puerto Rico debt detracted from performance as concerns about credit rating agency downgrades resulted in wider credit spreads (falling prices) for Puerto Rico municipal securities broadly.

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, 2013 ($11.29)1

  6.27%

Tax Equivalent Yield2

  11.08%

Current Monthly Distribution per Common Share3

  $0.0590

Current Annualized Distribution per Common Share3

  $0.7080

Economic Leverage as of February 28, 20134

  39%

 

  1  

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

 

  2  

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

 

  3  

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

 

  4  

Represents VMTP Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VMTP Shares and TOBs, 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, 2013   


Table of Contents
     BlackRock MuniVest Fund, Inc.

 

Market Price and Net Asset Value      

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

 

        2/28/13        8/31/12        Change      High        Low  

Market Price

     $ 11.29         $ 11.28           0.09    $ 12.29         $ 10.87   

Net Asset Value

     $ 10.75         $ 10.68           0.66    $ 11.06         $ 10.53   

The following charts show the sector allocation, credit quality allocation and call/maturity schedule of the Trust’s long-term investments:

 

Sector Allocation            
      2/28/13     8/31/12  

Health

     23     28

Transportation

     21        17   

Utilities

     13        6   

Corporate

     11        10   

County/City/Special District/School District

     11        8   

Education

     8        10   

State

     6        6   

Housing

     5        9   

Tobacco

     2        6   
Credit Quality Allocation1            
      2/28/13     8/31/12  

AAA/Aaa

     12     12

AA/Aa

     47        46   

A

     26        25   

BBB/Baa

     12        12   

BB/Ba

            2   

B

     1          

Not Rated2

     2        3   

 

  1   

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

 

  2   

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of February 28, 2013 and August 31, 2012, the market value of these securities was $20,449,481, representing 2%, and $30,422,382, representing 3%, respectively, of the Trust’s long-term investments.

Call/Maturity Schedule3      

Calendar Year Ended December 31,

  

2013

     9

2014

     5   

2015

     1   

2016

     6   

2017

     7   

 

  3   

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

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    19


Table of Contents

Schedule of Investments February 28, 2013 (Unaudited)

  

BlackRock Municipal Bond Investment Trust (BIE)

(Percentages shown are based on Net  Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 3.3%

    

Alabama Incentives Financing Authority, RB, Series A, 5.00%, 9/01/42

   $ 1,500      $    1,700,115   

Selma IDB, RB, International Paper Co. Project, Series A, 5.38%, 12/01/35

     145        159,938   
    

 

 

 
               1,860,053   

Alaska — 0.3%

    

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

     180        157,910   

Arizona — 0.5%

    

Arizona Board of Regents, Refunding RB, University of Arizona, Series A, 5.00%, 6/01/42

     250        284,510   

California — 8.3%

    

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

     700        826,273   

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

     120        142,472   

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

            1,660        1,928,339   

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

     850        969,714   

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

     685        849,688   
    

 

 

 
               4,716,486   

Colorado — 1.6%

    

City & County of Denver Colorado, Refunding ARB, Airport System, Series B, 5.00%, 11/15/37

     235        269,221   

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

     580        662,064   
    

 

 

 
               931,285   

Florida — 1.1%

    

City of Jacksonville Florida, Refunding RB, Better Jacksonville Sale Tax, Series A, 5.00%, 10/01/30

     295        344,120   

Orlando-Orange County Expressway Authority, Refunding RB, Series A, 5.00%, 7/01/29

     250        293,083   
    

 

 

 
               637,203   

Georgia — 1.2%

    

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

     555        678,676   

Illinois — 13.8%

    

Chicago Illinois Board of Education, GO, Series A:

    

5.50%, 12/01/39

     500        579,340   

5.00%, 12/01/42

     715        778,285   
Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

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

   $ 165      $ 189,697   

City of Chicago Illinois, ARB, O’Hare International Airport, General, Third Lien, Series C, 6.50%, 1/01/41

     1,590           2,056,013   

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

     205        235,430   

City of Chicago Illinois Wastewater Transmission, RB, Second Lien, 5.00%, 1/01/42 (a)

     310        345,585   

Cook County Forest Preserve District, GO, Series C, 5.00%, 12/15/32

     150        172,207   

Cook County Forest Preserve District, GO, Refunding, Limited Tax Project, Series B, 5.00%, 12/15/32

     70        80,364   

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

     750        897,855   

Illinois Finance Authority, Refunding RB:

    

Northwestern Memorial Healthcare, 5.00%, 8/15/37

     115        130,879   

Northwestern Memorial Hospital, 6.00%, 8/15/39

            1,000        1,186,630   

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Project, Series B, 5.00%, 12/15/28

     530        621,054   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     365        440,394   

6.00%, 6/01/28

     105        125,677   
    

 

 

 
               7,839,410   

Indiana — 2.5%

    

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

     1,190        1,424,311   

Kansas — 3.4%

    

Kansas Development Finance Authority, Refunding RB, Adventist Health System/Sunbelt Obligated Group:

    

Series A, 5.00%, 11/15/32

     750        871,252   

Series C, 5.50%, 11/15/29

     900        1,054,359   
    

 

 

 
               1,925,611   

Kentucky — 2.5%

    

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

     350        420,693   

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

     800        984,808   
    

 

 

 
               1,405,501   

Louisiana — 0.8%

    

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

     380        448,833   

 

Portfolio Abbreviations

 

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

 

See Notes to Financial Statements.

 

                
20    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Municipal Bond Investment Trust (BIE)

(Percentages shown are based on Net  Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Maine — 1.5%

    

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

   $ 675      $ 869,387   

Massachusetts — 0.7%

    

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

     375        430,234   

Michigan — 3.2%

    

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

     485        573,478   

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

     500        603,235   

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

     530        675,252   
    

 

 

 
               1,851,965   

Mississippi — 2.4%

    

Mississippi Development Bank, Refunding RB:

    

Jackson Mississippi Water & Sewer (AGM), 5.00%, 9/01/30

     535        623,425   

Jackson Public School District Project, Series A, 5.00%, 4/01/28

     645        735,474   
    

 

 

 
                  1,358,899   

Multi-State — 5.7%

    

Centerline Equity Issuer Trust, 7.20%, 11/15/52 (b)(c)

            3,000        3,269,220   

Nevada — 4.1%

    

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

     1,000        1,173,150   

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

     1,000        1,175,670   
    

 

 

 
               2,348,820   

New Jersey — 5.2%

    

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

     750        871,305   

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

     610        676,917   

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

    

5.50%, 6/15/41

     500        582,405   

5.88%, 12/15/38

     695        822,637   
    

 

 

 
               2,953,264   

New York — 2.0%

    

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

     145        172,573   

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

     325        386,493   

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

     500        570,630   
    

 

 

 
               1,129,696   

North Carolina — 1.1%

    

North Carolina Medical Care Commission, RB, Duke University Health System, Series A, 5.00%, 6/01/32

     530        618,378   

Ohio — 1.1%

    

Ohio State University, RB, Special Purpose General Receipts, Series A, 5.00%, 6/01/38

     545        632,772   
Municipal Bonds   

Par  

(000)

    Value  

Pennsylvania — 6.2%

    

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

   $ 300      $ 349,263   

Pennsylvania Turnpike Commission, RB:

    

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

     750        880,230   

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

     1,500        1,708,665   

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

     500        605,185   
    

 

 

 
               3,543,343   

Texas — 12.6%

    

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

     890           1,035,417   

City of Houston Texas, Refunding RB, Utility System, Series D, 5.00%, 11/15/42

     500        574,610   

Conroe ISD Texas, GO, School Building, Series A, 5.75%, 2/15/35

     470        560,489   

Harris County Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.13%, 12/01/31

     250        319,305   

Houston Community College System, GO, 5.00%, 2/15/36 (a)

     205        232,798   

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

     500        594,080   

North Texas Tollway Authority, Refunding RB, First Tier:

    

Series B, 5.00%, 1/01/42

     750        833,677   

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

     250        281,723   

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

     1,020        1,232,354   

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        596,450   

Texas Transportation Commission, Refunding RB, First Tier, Series A, 5.00%, 8/15/41

     175        191,998   

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

     615        718,996   
    

 

 

 
               7,171,897   

Utah — 2.0%

    

Utah Transit Authority, Refunding RB, Subordinated Sales Tax, 5.00%, 6/15/42

            1,000        1,128,270   

Virginia — 3.7%

    

Fairfax County IDA, RB, Health Care, Inova Health System, Series A, 5.00%, 5/15/40

     275        312,571   

Norfolk EDA, Refunding RB, Sentara Healthcare, Series B, 5.00%, 11/01/36

     500        571,670   

Virginia Public School Authority, RB, School Financing, 6.50%, 12/01/18 (d)

     500        657,335   

Virginia Resources Authority, RB, Series A-1, 5.00%, 11/01/42

     485        561,499   
    

 

 

 
               2,103,075   

Washington — 2.0%

    

Port of Seattle, Refunding RB, Intermediate Lien, Series A, 5.00%, 8/01/32

     1,000        1,165,790   

Wisconsin — 3.2%

    

University of Wisconsin Hospitals & Clinics Authority, Refunding RB, Series A, 5.00%, 4/01/38 (a)

     145        162,175   

Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Alliiance, Series D, 5.00%, 11/15/41

     485        545,019   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    21


Table of Contents

Schedule of Investments (continued)

  

BlackRock Municipal Bond Investment Trust (BIE)

(Percentages shown are based on Net  Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Wisconsin (concluded)

    

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

    

Series A, 5.00%, 4/01/42

   $ 125      $ 140,486   

Series C, 5.25%, 4/01/39

     890        985,560   
    

 

 

 
               1,833,240   
Total Municipal Bonds – 96.0%              54,718,039   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
              

California — 19.4%

    

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

     1,005        1,178,121   

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

     1,300           1,451,710   

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

     1,410        1,705,381   

Los Angeles Community College District California, GO, Refunding, Series A, 6.00%, 8/01/33

     2,079        2,597,309   

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

     200        224,448   

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

     2,234        2,615,912   

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

     810        976,158   

University of California, Refunding RB, Limited Project, Series G, 5.00%, 5/15/37

     250        288,684   
    

 

 

 
               11,037,723   

District of Columbia — 3.4%

    

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

     735        893,662   

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

     899        1,061,426   
    

 

 

 
               1,955,088   

Florida — 0.5%

    

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

     260        292,159   

Illinois — 8.1%

    

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

     400        451,474   

Illinois Finance Authority, RB, University of Chicago, Series B, 6.25%, 7/01/38

     1,500        1,860,045   

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

     2,000        2,283,353   
    

 

 

 
               4,594,872   

Massachusetts — 1.6%

    

Massachusetts School Building Authority, Sales Tax RB, Senior Lien, Series B, 5.00%, 10/15/41

     790        906,091   

Nevada — 3.2%

    

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

            1,500        1,813,485   

New Hampshire — 1.2%

    

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

     585        684,893   

New Jersey — 3.7%

    

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

    

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

     1,000        1,138,810   

Series B, 5.25%, 6/15/36

     840        959,314   
    

 

 

 
               2,098,124   
Municipal Bonds Transferred to
Tender Option Bond Trusts (e)
  

Par  

(000)

    Value  

New York — 14.3%

    

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

   $ 750      $ 894,809   

New York City Municipal Water Finance Authority, Refunding RB:

    

Series FF, 5.00%, 6/15/45

     1,000        1,130,475   

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

     990        1,172,004   

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

     1,000        1,117,917   

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

     460        524,110   

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

     1,170        1,342,884   

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

     680        805,800   

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

     1,000        1,171,800   
    

 

 

 
               8,159,799   

Ohio — 1.6%

    

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

     840        939,170   

Puerto Rico — 0.9%

    

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

     460        502,154   

Texas — 7.2%

    

City of San Antonio Texas, Refunding RB, Electric and Gas Systems Revenue, Series A, 5.25%, 2/01/31 (f)

     1,050        1,250,462   

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

     1,450        1,715,713   

Waco Educational Finance Corp., Refunding RB, Baylor University, 5.00%, 3/01/43

     1,005        1,144,765   
    

 

 

 
               4,110,940   

Virginia — 0.9%

    

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

     460        528,879   

Washington — 1.5%

    

University of Washington, Refunding RB, Series A, 5.00%, 7/01/41

     735        850,540   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 67.5%
        38,473,917   
Total Long-Term Investments
(Cost — $82,732,308) — 163.5%
             93,191,956   
    
                  
Short-Term Securities    Shares         

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

     1,154,435        1,154,435   
Total Short-Term Securities
(Cost — $1,154,435) — 2.0%
             1,154,435   
Total Investments (Cost — $83,886,743) — 165.5%        94,346,391   
Liabilities in Excess of Other Assets — (0.4)%        (206,749

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (33.9)%

   

    (19,347,621
VRDP Shares, at Liquidation Value — (31.2)%        (17,800,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 56,992,021   
    

 

 

 

 

See Notes to Financial Statements.

 

                
22    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (concluded)

  

BlackRock Municipal Bond Investment Trust (BIE)

 

 

Notes to Schedule of investments
(a)   When-issued security. Unsettled when-issued transactions were as follows:

 

Counterparty      Value       

Unrealized

Appreciation
(Depreciation)

 
Stifel Nicolaus & Co.      $ 345,585         $ (180

JPMorgan Securities, Inc.

     $ 394,973         $ 16   

 

(b)   Security 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.

 

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

 

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

 

(f)   All or a portion of security is subject to a recourse agreement, which may require the 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 is $2,954,469.

 

(g)   Investments in issuers considered to be an affiliate of the Trust during the six months ended February 28, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate   Shares Held
at August 31,
2012
       Net
Activity
       Shares Held
at February 28,
2013
       Income  

FFI Institutional Tax-Exempt Fund

    159,677           994,758           1,154,435         $ 94   

 

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

 

Ÿ  

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

 

Ÿ  

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the Trust’s investments categorized in the disclosure hierarchy as of February 28, 2013:

 

     Level 1      Level 2      Level 3      Total

Assets:

                        
Investments:                         

Long-Term Investments1

               $ 93,191,956                     $ 93,191,956  

Short-Term Securities

    $ 1,154,435                                  1,154,435  
   

 

 

        

 

 

        

 

 

        

 

 

 

Total

    $ 1,154,435          $ 93,191,956                     $ 94,346,391  
   

 

 

        

 

 

        

 

 

        

 

 

 

 

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

      

 

Certain of the Trust’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of February 28, 2013, such liabilities are categorized within the disclosure hierarchy as follows:

   

     Level 1      Level 2      Level 3      Total

Liabilities:

                        

TOB trust certificates

               $ (19,340,052 )                   $ (19,340,052 )

VRDP Shares

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

 

 

        

 

 

        

 

 

        

 

 

 

Total

               $ (37,140,052 )                   $ (37,140,052 )
   

 

 

        

 

 

        

 

 

        

 

 

 

There were no transfers between levels during the six months ended February 28, 2013.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    23


Table of Contents

Schedule of Investments February 28, 2013 (Unaudited)

  

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 4.0%

    

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

    

6.00%, 6/01/34

   $ 1,150      $ 1,352,940   

6.00%, 6/01/39

     450        529,547   

Birmingham Water Works Board, RB, 4.75%, 1/01/36

     2,100        2,295,132   

Hoover City Board of Education, Special Tax, Refunding, 4.25%, 2/15/40

     2,750        2,930,702   
    

 

 

 
               7,108,321   

Arizona — 9.4%

    

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

     2,200        2,372,260   

Arizona Sports & Tourism Authority, RB, Multipurpose Stadium Facilities, Series A (NPFGC), 5.00%, 7/01/13 (a)

     1,500        1,524,570   

Arizona State University, RB, Series D, 5.50%, 7/01/26

     200        241,648   

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

     3,750        4,106,287   

Pima County IDA, Refunding IDRB, Tucson Electric Power, 5.75%, 9/01/29

     900        952,470   

Salt Verde Financial Corp., RB, Senior:

    

5.00%, 12/01/32

     1,500        1,737,090   

5.00%, 12/01/37

            2,065        2,387,512   

San Luis Facility Development Corp., RB, Senior Lien, Regional Detention Center Project:

    

6.25%, 5/01/15

     185        184,273   

7.00%, 5/01/20

     300        305,130   

7.25%, 5/01/27

     600        576,858   

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

     750        851,085   

University Medical Center Corp. Arizona, RB, 6.50%, 7/01/39

     500        580,915   

University Medical Center Corp. Arizona, Refunding RB, 6.00%, 7/01/39

     900        1,040,364   
    

 

 

 
                 16,860,462   

Arkansas — 1.2%

    

City of Conway Arkansas, RB, Wastewater Revenue Improvement, Series A, 4.20%, 10/01/37

     500        534,840   

City of Springdale Arkansas, RB, Sales and Tax Use:

    

3.00%, 11/01/30

     650        628,778   

3.00%, 11/01/31

     1,010        969,347   
    

 

 

 
               2,132,965   

California — 19.6%

    

California County Tobacco Securitization Agency, RB, CAB, Stanislaus, Sub-Series C, 11.06%, 6/01/55 (b)

     4,500        47,655   

California Educational Facilities Authority, Refunding RB, Santa Clara University, 5.00%, 2/01/40

     1,000        1,114,270   

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

     1,900        2,322,560   

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

     2,285        2,269,850   

Carlsbad Unified School District, GO, Election of 2006, Series B, 4.99%, 5/01/34 (c)

     1,000        823,790   

City of Manteca California Sewer, Refunding RB, 4.00%, 12/01/33

     3,395        3,557,077   

City of San Jose California, Refunding ARB, San Jose Airport, Series A1, AMT, 5.75%, 3/01/34

     2,000        2,314,940   

Dinuba Unified School District, GO, Election of 2006 (AGM):

    

5.63%, 8/01/31

     250        288,243   

5.75%, 8/01/33

     500        578,845   

Hartnell Community College District California, GO, CAB, Election of 2002, Series D, 4.94%, 8/01/34 (c)

     1,650        1,247,945   
Municipal Bonds    Par  
(000)
    Value  

California (concluded)

    

Norwalk-La Mirada Unified School District California, GO, CAB, Refunding, Election of 2002, Series E (AGC), 4.81%, 8/01/38 (b)

   $ 8,000      $ 2,392,240   

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

    

4.36%, 8/01/30 (b)

     1,500        707,445   

5.53%, 8/01/33 (b)

     4,000        1,312,560   

4.76%, 8/01/39 (c)

     2,000        1,293,800   

San Diego Community College District California, GO, CAB, Election of 2002, 4.73%, 8/01/33 (c)

     2,800        2,361,240   

San Jose Evergreen Community College District, GO, Election of 2010, Series B, 3.50%, 8/01/32

     1,200        1,224,948   

State of California, GO, Various Purpose:

    

5.75%, 4/01/31

     2,000        2,390,080   

6.00%, 3/01/33

     1,000        1,240,420   

6.50%, 4/01/33

     1,950        2,444,500   

5.50%, 3/01/40

            2,350        2,779,110   

State of California, GO, Refunding, Veterans, AMT, 5.05%, 12/01/36

     555        567,549   

Val Verde Unified School District California, Special Tax Bonds, Refunding, Junior Lien, 6.25%, 10/01/28

     1,585        1,627,953   
    

 

 

 
               34,907,020   

Colorado — 1.2%

    

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

     1,070        1,293,673   

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

     750        875,272   
    

 

 

 
               2,168,945   

Connecticut — 1.4%

    

Connecticut State Health & Educational Facilities Authority, Refunding RB:

    

Hartford Healthcare, Series A, 5.00%, 7/01/32

     1,250        1,392,225   

Lawrence & Memorial Hospital, Series F, 5.00%, 7/01/36

     550        606,700   

Sacred Heart University, Series G, 5.38%, 7/01/31

     400        444,356   
    

 

 

 
                   2,443,281   

Delaware — 0.9%

    

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

     1,200        1,353,948   

Florida — 1.7%

    

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

     2,000        2,233,620   

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

     125        132,177   

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

     910        682,846   
    

 

 

 
               3,048,643   

Hawaii — 0.2%

    

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

     400        432,528   

Idaho — 1.2%

    

Idaho Health Facilities Authority, Refunding RB, Trinity Health Group, Series B, 6.25%, 12/01/33

     1,750        2,097,445   

Illinois — 8.5%

    

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

     665        760,181   

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

     4,000        4,080,560   

 

See Notes to Financial Statements.

 

                
24    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

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, RB:

    

Navistar International, Recovery Zone, 6.50%, 10/15/40

   $ 560      $ 605,438   

Rush University Medical Center, Series C, 6.63%, 11/01/39

     650        795,594   

Illinois Finance Authority, Refunding RB:

    

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

     210        211,117   

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

     1,025        1,189,185   

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

     1,000        1,136,730   

Railsplitter Tobacco Settlement Authority, RB:

    

6.25%, 6/01/24

     1,000        1,117,890   

6.00%, 6/01/28

     1,150        1,376,458   

Village of Bolingbrook Illinois, GO, Refunding, Series B (NPFGC), 6.25%, 1/01/36 (b)

          16,065        3,936,728   
    

 

 

 
                 15,209,881   

Indiana — 0.6%

    

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

     1,000        1,060,780   

Iowa — 0.9%

    

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

    

5.75%, 9/01/30

     500        566,310   

6.00%, 9/01/39

     1,000        1,124,680   
    

 

 

 
               1,690,990   

Kansas — 0.6%

    

Pratt County Public Building Commission, RB, 3.25%, 12/01/32

     1,000        989,880   

Louisiana — 2.5%

    

Lafayette Public Trust Financing Authority, Refunding RB, Ragin Cajun Facilities Project (AGM), 3.75%, 10/01/32

     520        534,264   

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

    

Parish of Plaquemines Project (AGM), 4.00%, 9/01/42

     480        487,214   

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

     1,050        1,240,197   

Louisiana Public Facilities Authority, RB:

    

Belle Chasse Educational Foundation Project, 6.50%, 5/01/31

     400        466,688   

Franciscan Missionaries of Our Lady Health System Project, Series B, 5.00%, 7/01/42

     1,600        1,764,272   
    

 

 

 
               4,492,635   

Maryland — 2.0%

    

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

     250        278,648   

Maryland Health & Higher Educational Facilities Authority, Refunding RB, Doctor’s Community Hospital,
5.63%, 7/01/30

     2,900        3,273,781   
    

 

 

 
               3,552,429   

Michigan — 3.0%

    

Board of Control of Michigan Technological University, Refunding RB, General, Series A, 4.00%, 10/01/30

     1,290        1,357,635   

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

     1,250        1,524,600   

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

     1,950        2,484,417   
    

 

 

 
               5,366,652   
Municipal Bonds    Par  
(000)
    Value  

Minnesota — 3.2%

    

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

   $ 4,600      $ 5,667,522   

Mississippi — 3.2%

    

Mississippi Development Bank, RB, Special Obligation:

    

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

     845        943,713   

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

     1,750        1,990,047   

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

     2,100        2,384,907   

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

     400        441,208   
    

 

 

 
                   5,759,875   

Missouri — 3.1%

    

Missouri State Development Finance Board, RB:

    

St. Joseph Sewage System Improvements, Series E, 5.25%, 5/01/31

     580        623,674   

Annual Appropriation Sewer System, Series B, 5.00%, 11/01/41

     900        978,435   

Missouri State Development Finance Board, Refunding RB, Electric System Projects, Series F, 4.00%, 6/01/32

     2,490        2,553,894   

Missouri State Health & Educational Facilities Authority, RB:

    

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

     500        568,005   

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

     770        769,330   
    

 

 

 
               5,493,338   

Montana — 0.8%

    

Montana Facility Finance Authority, Refunding RB, Sisters of Leavenworth, Series A, 4.75%, 1/01/40

     1,350        1,468,949   

Multi-State — 6.4%

    

Centerline Equity Issuer Trust, 7.20%, 11/15/14 (f)(g)

          10,500        11,442,270   

Nebraska — 3.8%

    

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

     600        655,014   

Omaha Nebraska Sanitation Sewer, RB, System:

    

3.25%, 11/15/37

     2,400        2,294,688   

4.25%, 11/15/38

     1,440        1,541,678   

4.00%, 11/15/42

     2,200        2,310,198   
    

 

 

 
               6,801,578   

Nevada — 1.1%

    

City of Las Vegas Nevada, Special Assessment Bonds, Summerlin Area, 5.65%, 6/01/23

     1,265        1,252,274   

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

     575        631,287   
    

 

 

 
               1,883,561   

New Jersey — 10.3%

    

Middlesex County Improvement Authority, RB, Subordinate, Heldrich Center Hotel, Series B, 6.25%, 1/01/37 (d)(e)

     915        68,094   

New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT, 7.25%, 11/15/30 (h)

     3,000        3,011,910   

New Jersey EDA, Refunding RB:

    

First Mortgage, Winchester, Series A, 5.80%, 11/01/31

     1,500        1,535,745   

Kapkowski Road Landfill Project, 6.50%, 4/01/28

     7,500        8,983,275   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    25


Table of Contents

Schedule of Investments (continued)

  

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

New Jersey (concluded)

    

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

    

7.13%, 12/01/23

   $ 630      $ 805,487   

7.50%, 12/01/32

     800        1,000,344   

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

    

4.63%, 7/01/23

     510        577,779   

5.63%, 7/01/37

     1,700        1,916,036   

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

     485        507,349   
    

 

 

 
               18,406,019   

New York — 5.8%

    

Albany Industrial Development Agency, RB, New Covenant Charter School Project, Series A, 7.00%, 5/01/35 (d)(e)

     455        68,218   

Hudson New York Yards Infrastructure Corp., RB, Series A (NPFGC), 4.50%, 2/15/47

     750        782,242   

New York City Industrial Development Agency, RB, American Airlines Inc., JFK International Airport, AMT, 7.75%, 8/01/31 (d)(e)(h)

     3,165        3,599,270   

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

     800        951,368   

New York State Dormitory Authority, RB, Rochester Institute of Technology, Series A, 6.00%, 7/01/18 (a)

     1,000        1,258,540   

Niagara Area Development Corp., Refunding RB, Covanta Energy Project, Series A, AMT, 5.25%, 11/01/42

     400        419,020   

Onondaga Civic Development Corp., Refunding RB, Saint Joseph’s Hospital Health Center Project:

    

4.50%, 7/01/32

     1,110        1,093,028   

5.00%, 7/01/42

     540        553,743   

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

     1,500        1,676,535   
    

 

 

 
                 10,401,964   

North Carolina — 3.3%

    

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

            2,945        2,725,126   

North Carolina Capital Facilities Finance Agency, Refunding RB, Duke Energy Carolinas, Series B,
4.38%, 10/01/31

     1,000        1,074,430   

North Carolina Medical Care Commission, Refunding RB:

    

South Eastern Regional Medical Center, 3.25%, 6/01/27

     300        301,425   

South Eastern Regional Medical Center, 5.00%, 6/01/32

     660        760,221   

University Health System, Series D, 6.25%, 12/01/33

     800        962,160   
    

 

 

 
               5,823,362   

North Dakota — 1.1%

    

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

     400        388,208   

City of Grand Forks North Dakota, Refunding RB, Healthcare Systems, 5.00%, 12/01/32

     1,415        1,541,515   
    

 

 

 
               1,929,723   

Ohio — 0.9%

    

Kent State University, RB, General Receipts, Series A, 5.00%, 5/01/42

     800        901,472   
Municipal Bonds    Par  
(000)
    Value  

Ohio (concluded)

    

Miami University/Oxford Ohio, RB, General Receipts, 3.25%, 9/01/34

   $ 800      $ 770,184   
    

 

 

 
               1,671,656   

Oklahoma — 1.3%

    

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

     2,250        2,312,663   

Oregon — 3.5%

    

City of Madras Oregon, GO, Refunding, 4.00%, 2/15/33

     500        492,550   

Clackamas County Housing Authority, RB, M/F Housing, Easton Ridge Apartments Project, Series A (i):

    

3.50%, 9/01/33

     755        745,193   

4.00%, 9/01/43

     660        653,103   

4.00%, 9/01/49

     1,000        981,150   

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

     750        886,552   

Oregon Health & Science University, Refunding RB:

    

Series A, 3.00%, 7/01/24

            1,000        1,016,150   

Series E, 5.00%, 7/01/32

     750        868,073   

Oregon State Facilities Authority, Refunding RB, Limited College Project, Series A, 5.25%, 10/01/40

     500        553,310   
    

 

 

 
                   6,196,081   

Pennsylvania — 3.3%

    

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

     1,695        1,880,602   

Delaware River Port Authority, RB, Series D (AGM), 5.00%, 1/01/40

     2,600        2,897,258   

Pennsylvania Higher Educational Facilities Authority, RB, University of the Sciences Philadelphia, 5.00%, 11/01/42

     1,000        1,102,300   
    

 

 

 
               5,880,160   

Puerto Rico — 1.3%

    

Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A, 5.75%, 8/01/37

     1,000        1,080,610   

Puerto Rico Sales Tax Financing Corp., RB, CAB, Series A, 5.79%, 8/01/35 (b)

     1,000        278,110   

Puerto Rico Sales Tax Financing Corp., Refunding RB, CAB, Series A (NPFGC), 5.60%, 8/01/41 (b)

     5,000        1,040,900   
    

 

 

 
               2,399,620   

Rhode Island — 1.2%

    

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

     1,000        1,204,150   

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

     900        1,021,392   
    

 

 

 
               2,225,542   

Tennessee — 1.4%

    

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

     800        874,368   

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

     275        310,415   

Shelby County Health Educational & Housing Facilities Board, RB, Methodist Le Bonheur Healthcare, 5.00%, 5/01/42

     1,200        1,338,168   
    

 

 

 
               2,522,951   

Texas — 16.6%

    

Harris County Cultural Education Facilities Finance Corp., Refunding RB, Young Men’s Christian Association of the Greater Houston Area, Series A, 5.00%, 6/01/38

     345        370,468   

 

See Notes to Financial Statements.

 

                
26    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Municipal Bond Trust (BBK)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Texas (concluded)

    

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

    

7.13%, 12/01/31

   $ 500      $ 638,610   

7.25%, 12/01/35

     1,750        2,174,025   

Harris County-Houston Sports Authority, Refunding RB, CAB, Senior Lien, Series G (NPFGC), 5.58%, 11/15/41 (b)

     11,690        2,409,894   

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

     1,500        1,765,695   

Midland County Fresh Water Supply District No. 1, Refunding RB:

    

CAB, City of Midland Project, Series A, 4.49%, 9/15/36 (b)

     4,900        1,724,261   

CAB, City of Midland Project, Series A, 4.67%, 9/15/38 (b)

     10,760        3,306,440   

City of Midland Project, 3.38%, 9/15/32

     1,575        1,582,796   

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        2,426,380   

Texas State Turnpike Authority, RB, CAB (AMBAC), 6.02%, 8/15/35 (b)

          50,000        13,201,500   
    

 

 

 
               29,600,069   

Vermont — 1.7%

    

University of Vermont & State Agricultural College, Refunding RB, Series A, 4.00%, 10/01/38

     1,200        1,245,924   

Vermont Educational & Health Buildings Financing Agency, RB, Hospital, Fletcher Allen Health, Series A,
4.75%, 12/01/36

     800        838,536   

Vermont Educational & Health Buildings Financing Agency, Refunding RB, St. Michaels College, 5.00%, 10/01/42

     900        988,380   
    

 

 

 
               3,072,840   

Virginia — 0.6%

    

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT, 5.50%, 1/01/42

     940        1,038,155   

Washington — 0.9%

    

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

     1,400        1,632,932   

West Virginia — 0.7%

    

West Virginia State University, RB, West Virginia University Projects, Series B, 5.00%, 10/01/36

     1,100        1,279,080   

Wyoming — 0.8%

    

County of Sweetwater Wyoming, Refunding RB, Idaho Power Co. Project, 5.25%, 7/15/26

     1,200        1,363,236   
Total Municipal Bonds – 135.2%              241,189,951   
    
   

Municipal Bonds Transferred to

Tender Option Bond Trusts (j)

 

Colorado — 2.3%

    

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

     3,750        4,031,625   

Massachusetts — 0.9%

    

Massachusetts Water Resources Authority, Refunding RB, General, Series A, 5.00%, 8/01/41

     1,450        1,636,847   

Municipal Bonds Transferred to

Tender Option Bond Trusts (j)

   Par  
(000)
    Value  

Michigan — 2.3%

    

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

   $ 4,000      $ 4,131,240   

New Jersey — 0.9%

    

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

     1,400        1,598,856   

New York — 12.5%

    

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

     2,500        2,975,139   

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

     450        536,885   

New York City Municipal Water Finance Authority, Refunding RB:

    

5.50%, 6/15/40

     405        479,456   

Second General Resolution, Series CC, 5.00%, 6/15/47

     6,000        6,804,420   

Water & Sewer System, Series A, 4.75%, 6/15/30

     3,000        3,365,250   

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

     2,505        2,875,150   

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

     2,199        2,498,221   

New York State Dormitory Authority, Refunding LRB, State University Dormitory Facilities, Series A, 5.00%, 7/01/42

     760        874,311   

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

     1,560        1,833,515   
    

 

 

 
               22,242,347   

Ohio — 2.0%

    

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

     1,260        1,344,269   

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

     2,000        2,227,060   
    

 

 

 
               3,571,329   

Total Municipal Bonds Transferred to

Tender Option Bond Trusts — 20.9%

             37,212,244   
Total Long-Term Investments
(Cost — $253,103,120) — 156.1%
        278,402,195   
    
   
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.01% (k)(l)

     3,101,522        3,101,522   
Total Short-Term Securities
(Cost — $3,101,522) — 1.7%
             3,101,522   
Total Investments (Cost—$256,204,642) — 157.8%        281,503,717   
Liabilities in Excess of Other Assets — (1.4)%        (2,513,458

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (11.6)%

   

    (20,615,148
VMTP Shares, at Liquidation Value — (44.8)%        (79,900,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 178,475,111   
    

 

 

 

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    27


Table of Contents

Schedule of Investments (continued)

  

BlackRock Municipal Bond Trust (BBK)

 

 

Notes to Schedule of Investments

 

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

 

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

 

(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 is as of report date.

 

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

 

(e)   Non-income producing security.

 

(f)   Security 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.

 

(g)   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.

 

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

 

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

 

Counterparty      Value        Unrealized
Appreciation
 

Wedbush Morgan Securities

     $ 2,379,446         $ 2,207   

 

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

 

(k)   Investments in issuers considered to be an affiliate of the Trust during the six months ended February 28, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate   Shares Held
at August 31,
2012
       Net
Activity
       Shares Held
at February 28,
2013
       Income  

FFI Institutional Tax-Exempt Fund

    583,607           2,517,915           3,101,522         $ 340   

 

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

 

Ÿ  

Financial futures contracts as of February 28, 2013 were as follows:

 

Contracts
Sold
    Issue   Exchange   Expiration   Notional
Value
    Unrealized
Depreciation
 
  (22   30-Year US Treasury Bond   Chicago Board of Trade   June 2013   $ 3,163,188      $ (1,409

 

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 as follows:

 

Ÿ  

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer Note 1 of the Notes to Financial Statements.

 

See Notes to Financial Statements.

 

                
28    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (concluded)

  

BlackRock Municipal Bond Trust (BBK)

 

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy as of February 28, 2013:

 

     Level 1      Level 2    Level 3    Total

Assets:

                    
Investments:                     

Long-Term Investments1

               $ 278,402,195                 $ 278,402,195  

Short-Term Securities

    $ 3,101,522                              3,101,522  
   

 

 

        

 

 

      

 

 

      

 

 

 

Total

    $ 3,101,522          $ 278,402,195                 $ 281,503,717  
   

 

 

        

 

 

      

 

 

      

 

 

 

 

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

    $ (1,409 )                          $ (1,409 )

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

      

 

Certain of the Trust’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of February 28, 2013, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

   

     Level 1      Level 2    Level 3    Total

Assets:

  

         
Investments:                     

Cash

    $ 122,644                            $ 122,644  

Cash pledged as collateral for financial futures contracts

               $ 66,000                   66,000  

Liabilities:

                    

TOB trust certificates

                 (20,608,872 )                 (20,608,872 )

VMTP Shares

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

 

 

        

 

 

      

 

 

      

 

 

 

Total

    $ 122,644          $ (100,442,872 )               $ (100,320,228 )
   

 

 

        

 

 

      

 

 

      

 

 

 

There were no transfers between levels during the six months ended February 28, 2013.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    29


Table of Contents

Schedule of Investments February 28, 2013 (Unaudited)

  

BlackRock Municipal Income Investment Quality Trust (BAF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 3.0%

    

Alabama Incentives Financing Authority, RB, Series A, 5.00%, 9/01/42

   $ 1,500      $ 1,700,115   

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

    

6.13%, 6/01/34

     1,000        1,191,450   

6.00%, 6/01/39

     1,000        1,176,770   

Selma IDB, RB, International Paper Co. Project, Series A, 5.38%, 12/01/35

     335        369,512   
    

 

 

 
               4,437,847   

Arizona — 0.6%

    

Arizona Board of Regents, Refunding COP, University of Arizona, Series C, 5.00%, 6/01/28

     250        289,707   

Arizona Board of Regents, Refunding RB, University of Arizona, Series A, 5.00%, 6/01/42

     500        569,020   
    

 

 

 
               858,727   

California — 11.5%

    

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

     2,155        2,543,740   

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

     1,120        1,371,586   

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

     1,400        1,636,978   

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

     1,000        1,134,510   

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

     1,175        1,364,939   

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

     3,210        3,653,654   

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

     1,000        1,190,610   

San Bernardino Community College District, GO, Election of 2002, Series A, 6.25%, 8/01/33

     925        1,124,171   

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

     1,125        1,327,635   

State of California, GO, Refunding, Various Purpose, 5.00%, 9/01/41

     1,270        1,423,022   
    

 

 

 
               16,770,845   

Colorado — 1.6%

    

City & County of Denver Colorado, Refunding ARB, Series B, 5.00%, 11/15/37

     600        687,372   

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

     1,425        1,693,726   
    

 

 

 
               2,381,098   

Florida — 4.9%

    

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

     4,525        5,381,492   

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

     745        869,050   

Orlando-Orange County Expressway Authority, Refunding RB, 5.00%, 7/01/29 (a)

     750        879,247   
    

 

 

 
               7,129,789   

Georgia — 2.1%

    

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

     2,500        3,111,425   

Illinois — 13.3%

    

Chicago Illinois Board of Education, GO, Series A:

    

5.50%, 12/01/39

     1,500        1,738,020   

5.00%, 12/01/42

     1,865        2,030,071   
Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

Chicago Transit Authority, RB:

    

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

   $ 1,300      $ 1,510,886   

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

     415        477,117   

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

     1,325        1,514,647   

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

    

Series A, 5.75%, 1/01/39

     825        968,591   

Series C, 6.50%, 1/01/41

     3,740        4,836,157   

City of Chicago Illinois, Refunding RB:

    

O’Hare International Airport, General, Third Lien, Series C (AGC), 5.25%, 1/01/30

     1,000        1,151,540   

Sales Tax Revenue, Series A, 5.25%, 1/01/38

     515        591,447   

Cook County Forest Preserve District, GO, Series C, 5.00%, 12/15/32

     380        436,259   

Cook County Forest Preserve District, GO, Refunding, Limited Tax Project, Series B, 5.00%, 12/15/32

     180        206,649   

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

     1,885        2,256,609   

Illinois Finance Authority, Refunding RB, Northwestern Memorial Healthcare, 5.00%, 8/15/37

     300        341,424   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     915        1,104,003   

6.00%, 6/01/28

     260        311,199   
    

 

 

 
               19,474,619   

Indiana — 3.0%

    

Indiana Finance Authority Waste Water Utility, RB, First Lien CWA Authority Project, Series A, 5.00%, 10/01/41

     1,500        1,711,050   

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

     2,415        2,733,442   
    

 

 

 
               4,444,492   

Kansas — 1.9%

    

Kansas Development Finance Authority, Refunding RB, Adventist Health System/Sunbelt Obligated Group, Series A, 5.00%, 11/15/32

     2,380        2,764,775   

Louisiana — 0.4%

    

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

    

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

     375        447,034   

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

     150        178,813   
    

 

 

 
               625,847   

Michigan — 4.4%

    

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

     1,700        1,977,372   

City of Detroit Michigan, Refunding RB, Sewage Disposal System, Senior Lien, (AGM):

    

Series B, 7.50%, 7/01/33

     580        722,466   

Series C-1, 7.00%, 7/01/27

     1,800        2,215,224   

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

     1,205        1,535,242   
    

 

 

 
               6,450,304   

Minnesota — 3.1%

    

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

     3,680        4,534,018   

Mississippi — 2.4%

    

Mississippi Development Bank, Refunding RB:

    

Jackson Mississippi Water & Sewer (AGM), 5.00%, 9/01/30

     2,000        2,330,560   

Jackson Public School District Project, 5.00%, 4/01/28

     1,000        1,140,270   
    

 

 

 
               3,470,830   

 

See Notes to Financial Statements.

 

                
30    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Municipal Income Investment Quality Trust (BAF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Nevada — 1.6%

    

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

   $ 2,000      $ 2,403,100   

New Jersey — 4.9%

    

New Jersey EDA, RB, School Facilities Construction, Series KK, 5.00%, 3/01/31

     1,430        1,657,370   

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

     1,300        1,446,653   

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

     1,540        1,708,938   

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series A (AGC), 5.50%, 12/15/38

     2,000        2,326,940   
    

 

 

 
               7,139,901   

New York — 6.6%

    

Metropolitan Transportation Authority, Refunding RB, Transportation, Series C, 5.00%, 11/15/28

     1,300        1,524,809   

New York City Transitional Finance Authority, RB:

    

Fiscal 2009, Series S-4 (AGC), 5.50%, 1/15/29

     2,465        2,915,824   

Future Tax Secured, Sub-Series E-1, 5.00%, 2/01/42

     2,000        2,279,200   

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

     2,500        2,853,150   
    

 

 

 
               9,572,983   

North Carolina — 1.1%

    

North Carolina Medical Care Commission, RB, Duke University Health System, Series A, 5.00%, 6/01/32

     1,340        1,563,445   

Ohio — 1.1%

    

Ohio State University, RB, Special Purpose General Receipts, Series A, 5.00%, 6/01/38

     1,375        1,596,444   

Pennsylvania — 1.6%

    

Pennsylvania Higher Educational Facilities Authority, RB, Temple University, 5.00%, 4/01/42

     2,000        2,263,440   

Puerto Rico — 1.0%

    

Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A, 6.38%, 8/01/39

     1,350        1,522,692   

South Carolina — 4.7%

    

City of North Charleston South Carolina, RB, Public Facilities Corp. Installment Purchase, 5.00%, 6/01/35

     6,000        6,859,200   

Texas — 17.9%

    

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

     2,000        2,296,300   

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

    

6.00%, 11/15/35

     2,600        3,165,734   

6.00%, 11/15/36

     2,215        2,711,359   

5.38%, 11/15/38

     1,000        1,164,480   

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

     3,365        4,149,213   

Harris County Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.13%, 12/01/31

     500        638,610   

Houston Community College System, GO, 5.00%, 2/15/36 (a)

     520        590,512   

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

     1,000        1,188,160   
Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

    

North Texas Tollway Authority, Refunding RB, System, First Tier:

    

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

   $ 1,000      $ 1,181,370   

Series B, 5.00%, 1/01/42

     2,250        2,501,032   

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

     1,500        1,690,335   

Tarrant County Cultural Education Facilities Finance Corp., Refunding RB, Christus Health, Series A (AGC),
6.50%, 7/01/37

     1,000        1,185,040   

Texas Tech University, Refunding RB, Refunding & Improvement, 14th Series A, 5.00%, 8/15/31

     1,000        1,172,150   

Texas Transportation Commission, Refunding RB, First Tier, Series A, 5.00%, 8/15/41

     335        367,539   

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

     1,805        2,110,226   
    

 

 

 
               26,112,060   

Utah — 1.0%

    

Utah Transit Authority, Refunding RB, Sales Tax Revenue, 5.00%, 6/15/42

     1,250        1,410,337   

Virginia — 2.4%

    

Fairfax County IDA, RB, Inova Health System, 5.00%, 5/15/40

     685        778,585   

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

     1,000        1,314,670   

Virginia Resources Authority, RB, Series A-1, 5.00%, 11/01/42

     1,225        1,418,219   
    

 

 

 
               3,511,474   

Washington — 3.9%

    

City of Seattle Washington, Refunding RB, Series A, 5.25%, 2/01/36

     1,025        1,193,643   

Port of Seattle, Refunding RB, Intermediate, Series A, 5.00%, 8/01/32

     3,000        3,497,370   

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

     795        935,024   
    

 

 

 
               5,626,037   

Wisconsin — 1.5%

    

University of Wisconsin Hospitals & Clinics Authority, Refunding RB, Series A, 5.00%, 4/01/38 (a)

     370        413,827   

Wisconsin Health & Educational Facilities Authority, RB, Ascension Health, Series D, 5.00%, 11/15/41

     1,230        1,382,212   

Wisconsin Health & Educational Facilities Authority, Refunding RB, Series A, 5.00%, 4/01/42

     315        354,025   
    

 

 

 
               2,150,064   
Total Municipal Bonds – 101.5%        148,185,793   
    
                  
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
        

Alabama — 1.1%

    

Mobile Board of Water & Sewer Commissioners, RB (NPFGC), 5.00%, 1/01/31

     1,500        1,635,840   

California — 9.4%

    

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

     10,680        12,526,465   

University of California, Refunding RB, Limited Project, Series G, 5.00%, 5/15/37

     1,000        1,154,736   
    

 

 

 
               13,681,201   

District of Columbia — 0.6%

    

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

     760        923,319   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    31


Table of Contents

Schedule of Investments (continued)

  

BlackRock 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  

Florida — 4.0%

    

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

   $ 5,150      $ 5,787,004   

Illinois — 5.4%

    

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

     2,999        3,327,693   

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

     1,020        1,151,260   

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

     2,999        3,425,030   
    

 

 

 
               7,903,983   

Kentucky — 0.7%

    

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

     898        1,056,281   

Massachusetts — 1.6%

    

Massachusetts School Building Authority, Sales Tax RB, Senior Dedicated Sales Tax Bonds, Series B, 5.00%, 10/15/41

     2,000        2,293,900   

Nevada — 4.9%

    

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

     2,000        2,417,980   

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

     4,100        4,800,321   
    

 

 

 
               7,218,301   

New Jersey — 1.6%

    

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

    

6.00%, 12/15/18 (b)

     500        598,470   

6.00%, 12/15/34

     500        598,470   

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

     1,000        1,142,040   
    

 

 

 
               2,338,980   

New York — 16.3%

    

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

     1,000        1,190,055   

New York City Municipal Water Finance Authority, Refunding RB:

    

Second General Resolution, Fiscal 2, Series BB, 5.25%, 6/15/44

     4,993        5,747,364   

Series FF, 5.00%, 6/15/45

     3,019        3,414,033   

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

     900        1,006,125   

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

     1,160        1,321,667   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

New York (concluded)

    

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

   $ 2,955      $ 3,391,644   

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

     1,740        2,061,900   

New York State Dormitory Authority, RB, General Purpose Series C, 5.00%, 3/15/41

     4,995        5,647,247   
    

 

 

 
               23,780,035   

Puerto Rico — 0.9%

    

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

     1,180        1,288,135   

Texas — 5.8%

    

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

     2,310        2,744,649   

Waco Educational Finance Corp., Refunding RB, Baylor University, 5.00%, 3/01/43

     4,995        5,689,655   
    

 

 

 
               8,434,304   

Utah — 0.7%

    

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

     1,005        1,104,053   

Washington — 1.5%

    

University of Washington, Refunding RB, Series A, 5.00%, 7/01/41

     1,860        2,152,386   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 54.5%
        79,597,722   
Total Long-Term Investments
(Cost — $207,378,812) — 156.0%
        227,783,515   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.01% (e)(f)

     637,888        637,888   
Total Short-Term Securities
(Cost — $637,888) — 0.4%
        637,888   
Total Investments (Cost — $208,016,700) — 156.4%        228,421,403   
Liabilities in Excess of Other Assets — (0.1)%        (134,455

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (27.4)%

   

    (40,016,213
VMTP Shares, at Liquidation Value — (28.9)%        (42,200,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 146,070,735   
    

 

 

 
Notes to Schedule of Investments

 

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

 

Counterparty      Value       

Unrealized

Appreciation
(Depreciation)

 

JPMorgan Securities, Inc.

     $ 590,512         $ 546   

Pershing LLC

     $ 879,247         $ 4,808   

JPMorgan Securities, Inc.

     $ 413,827         $ (507

 

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

 

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

 

See Notes to Financial Statements.

 

                
32    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (concluded)

  

BlackRock Municipal Income Investment Quality Trust (BAF)

 

 

(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 is $380,124.

 

(e)   Investments in issuers considered to be an affiliate of the Trust during the six months ended February 28, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate      Shares Held
at August 31,
2012
       Net
Activity
      

Shares Held

at February 28,

2013

       Income  

FFI Institutional Tax-Exempt Fund

       908,400           (270,512        637,888         $ 176   

 

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

 

Ÿ  

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

 

Ÿ  

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the Trust’s investments categorized in the disclosure hierarchy as of February 28, 2013:

 

     Level 1      Level 2      Level 3      Total

Assets:

                        
Investments:                         

Long-Term Investments1

               $ 227,783,515                     $ 227,783,515  

Short-Term Securities

    $ 637,888                                  637,888  
   

 

 

        

 

 

        

 

 

        

 

 

 

Total

    $ 637,888          $ 227,783,515                     $ 228,421,403  
   

 

 

        

 

 

        

 

 

        

 

 

 

 

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

      

 

Certain of the Trust’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of February 28, 2013, such liabilities are categorized within the disclosure hierarchy as follows:

 

   

     Level 1      Level 2      Level 3      Total

Liabilities:

                        

TOB trust certificates

               $ (39,996,660 )                   $ (39,996,660 )

VMTP Shares

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

 

 

        

 

 

        

 

 

        

 

 

 

Total

               $ (82,196,660 )                   $ (82,196,660 )
   

 

 

        

 

 

        

 

 

        

 

 

 

There were no transfers between levels during the six months ended February 28, 2013.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    33


Table of Contents

Schedule of Investments February 28, 2013 (Unaudited)

  

BlackRock Municipal Income Quality Trust (BYM)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Alabama — 3.6%

    

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

   $ 3,800      $ 4,528,917   

Birmingham Airport Authority, RB (AGM), 5.50%, 7/01/40

     5,800        6,529,002   

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

     1,495        1,759,271   

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

     2,800        2,670,388   
    

 

 

 
               15,487,578   

Alaska — 0.6%

    

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

     1,390        1,433,646   

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

     1,070        1,249,182   
    

 

 

 
               2,682,828   

Arizona — 0.5%

    

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

    

5.00%, 10/01/27

     1,500        1,713,330   

5.25%, 10/01/28

     250        288,415   
    

 

 

 
               2,001,745   

California — 22.0%

    

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

     625        740,600   

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

     10,100        13,512,083   

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

     1,620        1,825,254   

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

    

5.00%, 8/01/13 (b)

     7,450        7,680,429   

5.35%, 8/01/36 (c)

     4,200        1,220,814   

Golden State Tobacco Securitization Corp. California, RB, Series 2003-A-1 (a):

    

6.63%, 6/01/13

     6,500        6,607,965   

6.75%, 6/01/13

     14,500        14,745,485   

Metropolitan Water District of Southern California, RB, Series B-1 (NPFGC), 5.00%, 10/01/13 (a)

     16,745        17,224,074   

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

    

4.97%, 8/01/31

     13,575        5,496,246   

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

    

5.01%, 8/01/32

     14,150        5,416,337   

Orange County Sanitation District, COP, Series B (AGM), 5.00%, 2/01/31

     2,500        2,809,700   

San Diego Unified School District California, GO, CAB, Election of 2008, Series C, 4.67%, 7/01/38 (c)

     2,000        620,520   

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

    

4.22%, 7/01/30

     5,995        2,905,836   

4.27%, 7/01/31

     1,400        645,022   

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

     2,350        2,613,153   

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

     5,000        5,633,500   
Municipal Bonds    Par  
(000)
    Value  

California (concluded)

    

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

   $ 1,100      $ 1,233,628   

Yosemite Community College District, GO, CAB, Election of 2004, Series D, 4.78%, 8/01/37 (c)

     10,000        3,154,400   
    

 

 

 
               94,085,046   

Colorado — 0.6%

    

Colorado State Board of Governors, Refunding RB, Series A, 5.00%, 3/01/43 (d)

     1,125        1,410,131   

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

     960        1,095,235   
    

 

 

 
               2,505,366   

District of Columbia — 2.3%

    

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

     9,500        9,879,810   

Florida — 12.9%

    

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

     1,400        1,589,294   

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

     6,750        7,842,892   

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

     320        374,448   

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

     3,475        3,872,818   

County of Miami-Dade Florida, RB:

    

(AGM), 5.00%, 7/01/35

     1,300        1,431,729   

CAB, Sub-Series A (NPFGC), 5.21%, 10/01/38 (c)

     22,270        5,970,587   

County of Miami-Dade Florida, Refunding ARB, Series A,:

    

5.50%, 10/01/36

     5,000        5,826,950   

Miami International Airport, 5.50%, 10/01/41

     5,000        5,729,600   

County of Miami-Dade Florida, Refunding RB, Special Obligation, Series B:

    

4.00%, 10/01/37

     5,000        5,074,800   

5.00%, 10/01/37

     780        871,237   

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

     3,800        4,133,374   

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

     6,150        7,018,196   

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

     300        332,541   

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

     1,000        1,098,370   

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

     1,325        1,493,394   

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

     2,000        2,325,380   
    

 

 

 
               54,985,610   

Georgia — 2.5%

    

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

     1,250        1,355,900   

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

     7,500        9,334,275   
    

 

 

 
               10,690,175   

Hawaii — 1.4%

    

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

     5,000        5,879,200   

 

See Notes to Financial Statements.

 

                
34    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Municipal Income Quality Trust (BYM)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Illinois — 1.4%

    

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

   $ 2,590      $ 3,000,981   

Chicago Transit Authority, RB, 5.25%, 12/01/36

     650        747,292   

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

     600        683,340   

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

     360        412,049   

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

     310        353,481   

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

     710        849,813   
    

 

 

 
               6,046,956   

Indiana — 1.9%

    

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

     1,100        1,281,665   

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

     450        467,555   

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

     5,750        6,508,195   
    

 

 

 
               8,257,415   

Iowa — 1.3%

    

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

     5,000        5,687,250   

Kentucky — 0.4%

    

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

     1,500        1,719,225   

Louisiana — 2.8%

    

Parish of St. Charles Louisiana Gulf Opportunity Zone, RB, Valero Energy Corp. Project, 4.00%, 12/01/40 (e)

     1,720        1,893,152   

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

     1,750        1,868,650   

State of Louisiana Gas & Fuels Tax, RB, Series A (AGM), 5.00%, 5/01/31

     7,500        8,401,050   
    

 

 

 
               12,162,852   

Michigan — 2.3%

    

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

     3,000        3,469,980   

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

     1,100        1,300,673   

Michigan State Building Authority, Refunding RB, Facilities Program:

    

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

     2,000        2,315,900   

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

     800        919,872   

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

     1,500        1,741,830   
    

 

 

 
               9,748,255   

Mississippi — 0.2%

    

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

     800        908,384   

Nebraska — 2.5%

    

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

     9,345        10,577,512   

Nevada — 1.1%

    

County of Clark Nevada, ARB, Las Vegas-McCarran International Airport, Series A (AGM), 5.25%, 7/01/39

     4,100        4,623,324   
Municipal Bonds    Par  
(000)
    Value  

New Jersey — 4.1%

    

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

    

CAB, Series C (BHAC), 3.47%, 12/15/27 (c)

   $ 17,500      $ 10,518,550   

Series A, 5.50%, 6/15/41

     3,000        3,494,430   

Series A, 5.00%, 6/15/42

     3,000        3,326,700   
    

 

 

 
               17,339,680   

New York — 1.7%

    

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

     770        916,423   

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

     1,950        2,269,176   

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

     1,300        1,577,186   

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

     2,300        2,601,392   
    

 

 

 
               7,364,177   

North Carolina — 0.7%

    

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

     2,875        3,080,908   

Ohio — 1.1%

    

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

     2,875        3,189,353   

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

     610        764,098   

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

     470        533,182   
    

 

 

 
               4,486,633   

Pennsylvania — 0.2%

    

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

     625        768,469   

Puerto Rico — 3.2%

    

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

    

6.38%, 8/01/39

     5,300        5,977,976   

5.50%, 8/01/42

     3,450        3,672,180   

Puerto Rico Sales Tax Financing Corp., Refunding RB, CAB, Senior Series C, 5.55%, 8/01/39 (c)

     17,625        4,148,396   
    

 

 

 
               13,798,552   

South Carolina — 1.4%

    

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

     260        317,754   

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

     5,000        5,627,400   
    

 

 

 
               5,945,154   

Tennessee — 0.3%

    

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

     1,240        1,452,697   

Texas — 25.4%

    

City of San Antonio Texas, Refunding RB (NPFGC):

    

5.13%, 5/15/29

     9,250        9,730,167   

5.13%, 5/15/34

     10,000        10,519,100   

Comal ISD Texas, GO, School Building (PSF-GTD), 5.00%, 2/01/36

     2,500        2,771,325   

Coppell ISD Texas, GO, Refunding, CAB (PSF-GTD), 3.04%, 8/15/30 (c)

     10,030        5,922,013   

County of Bexar Texas, Refunding RB, Tax-Exempt Venue Project, Combined Venue, 5.00%, 8/15/39

     1,670        1,856,088   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    35


Table of Contents

Schedule of Investments (continued)

  

BlackRock Municipal Income Quality Trust (BYM)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Texas (concluded)

    

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

    

2.49%, 8/15/25

   $ 7,485      $ 5,499,155   

2.88%, 8/15/28

     10,915        7,014,306   

Harris County-Houston Sports Authority, Refunding RB (NPFGC) (c):

    

CAB, Junior Lien, Series H, 5.97%, 11/15/38

     5,785        1,274,088   

CAB, Junior Lien, Series H, 5.99%, 11/15/39

     6,160        1,274,442   

Third Lien, Series A-3, 5.93%, 11/15/38

     16,890        3,762,923   

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

     2,980        3,388,916   

Midland County Fresh Water Supply District No. 1, Refunding RB, CAB, City of Midland Project, Series A, 4.49%, 9/15/36 (c)

     2,340        823,423   

North Texas Tollway Authority, Refunding RB, First Tier, Series A:

    

6.00%, 1/01/28

     625        739,456   

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

     23,050        26,581,721   

Northside ISD, GO, School Building (PSF-GTD), 5.13%, 6/15/29

     9,500        10,026,110   

San Antonio Public Facilities Corp., Refunding RB, Convention Center Refinancing and Expansion Project,
4.00%, 9/15/42

     2,575        2,619,187   

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

    

5.00%, 12/15/28

     3,600        3,950,604   

5.00%, 12/15/29

     2,105        2,300,997   

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

    

4.00%, 8/15/38

     2,750        2,754,263   

5.00%, 8/15/41

     5,500        6,034,215   
    

 

 

 
               108,842,499   

Washington — 2.5%

    

County of King Washington, Refunding RB (AGM), 5.00%, 1/01/36

     2,200        2,421,782   

Washington Health Care Facilities Authority, RB:

    

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

     4,000        4,380,080   

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

     1,560        1,721,975   

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

     500        543,125   

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

     675        749,486   

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

     940        1,052,387   
    

 

 

 
               10,868,835   

Wisconsin — 0.5%

    

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

     1,500        1,705,245   

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert Health, Inc., Series A, 5.00%, 4/01/42

     525        590,042   
    

 

 

 
               2,295,287   
Total Municipal Bonds – 101.4%               434,171,422   
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
   Par  
(000)
    Value  

Arizona — 1.9%

    

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

   $ 1,300      $ 1,512,004   

Phoenix Civic Improvement Corp., RB, Sub-Civic Plaza Expansion Project, Series A (NPFGC), 5.00%, 7/01/37

     4,490        4,824,864   

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

     1,500        1,708,125   
    

 

 

 
               8,044,993   

California — 10.0%

    

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

     3,379        3,769,293   

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

     8,000        8,981,760   

Foothill-De Anza Community College District, GO, Election of 1999, Series C (NPFGC), 5.00%, 8/01/36

     7,500        8,176,800   

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

     5,000        5,672,550   

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

     449        545,558   

San Diego County Water Authority, COP, Refunding, Series 2008-A (AGM), 5.00%, 5/01/33

     4,870        5,525,064   

University of California, RB, Series C (NPFGC), 4.75%, 5/15/37

     10,000        10,169,900   
    

 

 

 
               42,840,925   

District of Columbia — 0.3%

    

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

     1,080        1,313,136   

Florida — 9.7%

    

City of Tallahassee Florida, RB (NPFGC):

    

5.00%, 10/01/32 (g)

     3,000        3,369,750   

5.00%, 10/01/37

     5,000        5,495,650   

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

     10,101        11,288,876   

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

     1,950        2,191,195   

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

     2,999        3,429,105   

Highlands County Health Facilities Authority, RB, Adventist, Series C, 5.25%, 11/15/36 (e)

     1,800        1,992,654   

Orange County School Board, COP, Series A:

    

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

     6,096        7,031,354   

(NPFGC), 5.00%, 8/01/30

     6,000        6,683,160   
    

 

 

 
               41,481,744   

Hawaii — 2.5%

    

Honolulu City & County Board of Water Supply, RB, Series A (NPFGC), 5.00%, 7/01/14 (a)

     10,000        10,633,000   

Illinois — 11.2%

    

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

     3,870        4,317,333   

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

     8,310        8,822,312   

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

     2,400        2,832,360   

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

     4,499        5,137,544   

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

     14,294        16,030,729   

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

     9,000        9,369,450   

 

See Notes to Financial Statements.

 

                
36    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

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 (f)
   Par  
(000)
    Value  

Illinois (concluded)

    

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

   $ 1,400      $ 1,598,820   
    

 

 

 
               48,108,548   

Massachusetts — 3.3%

    

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

    

5.00%, 8/15/15 (a)

     1,674        1,841,644   

5.00%, 8/15/30

     11,314        12,449,456   
    

 

 

 
               14,291,100   

Michigan — 1.9%

    

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

     7,300        8,096,211   

Nevada — 1.7%

    

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

     4,197        4,886,389   

Clark County Water Reclamation District, GO,
Series B, 5.75%, 7/01/34

     2,024        2,494,068   
    

 

 

 
               7,380,457   

New Jersey — 0.5%

    

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

     2,000        2,284,080   

New York — 6.0%

    

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

     4,494        5,233,101   

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

     7,002        7,902,013   

New York City Municipal Water Finance Authority, Refunding RB, Second General Resolution, Series CC, 5.00%, 6/15/47

     6,240        7,076,597   

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

     4,500        5,331,240   
    

 

 

 
               25,542,951   

Ohio — 0.2%

    

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

     620        708,530   

Puerto Rico — 1.3%

    

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

     5,080        5,545,481   

South Carolina — 0.2%

    

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

     600        696,540   
Municipal Bonds Transferred to
Tender Option Bond Trusts (f)
   Par  
(000)
    Value  

Texas — 1.5%

    

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

   $ 4,167      $ 4,849,072   

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

     1,500        1,724,490   
    

 

 

 
               6,573,562   

Utah — 1.3%

    

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

     5,000        5,744,600   

Virginia — 0.1%

    

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

     400        459,894   

Washington — 0.9%

    

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

     3,494        3,975,523   

Wisconsin — 0.7%

    

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

     2,500        2,768,425   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 55.2%
        236,489,700   
Total Long-Term Investments
(Cost — $607,390,910) — 156.6%
        670,661,122   
    
   
Short-Term Securities    Shares         

Money Market Funds — 2.0%

    

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

     8,659,864        8,659,864   
      Par  
(000)
        

New York — 0.4%

    

City of New York, New York, GO, VRDN,
Sub-Series A-6 (AGM, Dexia Credit Local SBPA), 0.23%, 3/01/13 (j)

     1,700        1,700,000   

Total Short-Term Securities

(Cost — $10,359,864) — 2.4%

  

  

    10,359,864   
Total Investments (Cost — $617,750,774) — 159.0%        681,020,986   

Other Assets Less Liabilities — 0.4%

  

    1,822,543   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (27.4)%

   

    (117,419,839
VMTP Shares, at Liquidation Value — (32.0)%        (137,200,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 428,223,690   
    

 

 

 
Notes to Schedule of investments

 

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

 

(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)   Represents a zero-coupon bond. 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

 
Morgan Stanley      $ 1,410,131         $ 18,983   

 

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

 

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

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    37


Table of Contents

Schedule of Investments (concluded)

  

BlackRock Municipal Income Quality Trust (BYM)

 

 

(g)   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 is $16,804,179.

 

(h)   Investments in issuers considered to be an affiliate of the Trust during the six months ended February 28, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate      Shares Held
at August 31,
2012
       Net
Activity
       Share Held
at February 28,
2013
       Income  

FFI Institutional Tax-Exempt Fund

       4,404,456           4,255,408           8,659,864         $ 412   

 

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

 

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

 

Ÿ  

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

 

Ÿ  

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the Trust’s investments categorized in the disclosure hierarchy as of February 28, 2013:

 

     Level 1      Level 2      Level 3      Total

Assets:

                        
Investments:                         

Long-Term Investments1

               $ 670,661,122                     $ 670,661,122  

Short-Term Securities

    $ 8,659,864            1,700,000                       10,359,864  
   

 

 

        

 

 

        

 

 

        

 

 

 

Total

    $ 8,659,864          $ 672,361,122                     $ 681,020,986  
   

 

 

        

 

 

        

 

 

        

 

 

 

 

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

      

 

Certain of the Trust’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of February 28, 2013, such liabilities are categorized within the disclosure hierarchy as follows:

 

   

     Level 1      Level 2      Level 3      Total

Liabilities:

                        

TOB trust certificates

               $ (117,377,482 )                   $ (117,377,482 )

VMTP Shares

                 (137,200,000 )                     (137,200,000 )
   

 

 

        

 

 

        

 

 

        

 

 

 

Total

               $ (254,577,482 )                   $ (254,577,482 )
   

 

 

        

 

 

        

 

 

        

 

 

 

There were no transfers between levels during the six months ended February 28, 2013.

 

See Notes to Financial Statements.

 

                
38    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments February 28, 2013 (Unaudited)

  

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 0.4%

    

County of Jefferson Alabama, RB,
Series A, 5.25%, 1/01/19

   $ 1,620      $ 1,619,077   

Arizona — 1.7%

    

Salt Verde Financial Corp., RB, Senior,
5.00%, 12/01/32

     5,635        6,525,668   

California — 9.6%

    

ABAG Finance Authority for Nonprofit Corps., Refunding RB, Odd Fellows Home of California, Series A,
5.00%, 4/01/42

     1,000        1,096,260   

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

     2,480        2,866,805   

California County Tobacco Securitization Agency, RB, CAB, Stanislaus, Sub-Series C,
11.06%, 6/01/55 (a)

     9,710        102,829   

California Health Facilities Financing Authority, RB:

    

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

     1,290        1,438,131   

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

     3,500        4,286,205   

California HFA, RB, Series K, AMT Home Mortgage, 5.50%, 2/01/42

     1,365        1,413,840   

California Pollution Control Financing Authority, RB:

    

5.00%, 11/21/45

     1,340        1,382,063   

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

     1,120        1,166,603   

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

     2,795        2,889,695   

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

     1,280        1,575,168   

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

     860        973,081   

San Marcos Unified School District, GO, CAB, SAN, Election of 2010, Series B (a):

    

4.53%, 8/01/33

     3,000        1,201,620   

4.87%, 8/01/43

     2,500        578,300   

State of California, GO, Various Purpose:

    

6.00%, 3/01/33

     1,760        2,183,139   

6.50%, 4/01/33

          10,670        13,375,805   
    

 

 

 
                  36,529,544   

Colorado — 2.0%

    

Colorado Health Facilities Authority, Refunding RB:

    

Catholic Healthcare, Series A, 5.50%, 7/01/34

     2,330        2,659,672   

Evangelical Lutheran Good Samaritan Society Project, 5.00%, 12/01/42

     1,920        2,059,545   

Colorado State Board of Governors, Refunding RB, Series A, 5.00%, 3/01/43 (b)

     1,280        1,604,416   

Park Creek Metropolitan District Colorado, Refunding RB, Senior, Limited Tax, Property Tax, 5.50%, 12/01/37

     1,375        1,449,456   
    

 

 

 
               7,773,089   

Connecticut — 0.4%

    

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

     1,505        1,679,791   

Delaware — 1.6%

    

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

     1,240        1,399,079   

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

     4,430        4,732,525   
    

 

 

 
               6,131,604   
Municipal Bonds   

Par  

(000)

    Value  

District of Columbia — 4.9%

    

District of Columbia Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed:

    

6.50%, 5/15/33

   $ 3,250      $ 3,819,465   

6.75%, 5/15/40

     11,500        11,959,770   

Metropolitan Washington Airports Authority, Refunding RB, First Senior Lien, Series A:

    

5.00%, 10/01/39

     550        604,626   

5.25%, 10/01/44

     2,000        2,214,300   
    

 

 

 
               18,598,161   

Florida — 6.2%

    

City of Leesburg Florida, RB, Leesburg Regional Medical Center Project, 5.50%, 7/01/32

     1,000        1,000,980   

County of Miami-Dade Florida, RB, Miami International Airport, Series A, AMT (AGC), 5.25%, 10/01/38

     2,855        3,220,611   

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

     1,255        1,426,320   

Jacksonville Florida Port Authority, Refunding RB, AMT, 5.00%, 11/01/38

     1,665        1,805,742   

Live Oak Community Development District No. 1, Special Assessment Bonds, Series A, 6.30%, 5/01/34

     3,030        3,072,632   

Miami Beach Health Facilities Authority, RB, Mount Sinai Medical Center of Florida, 6.75%, 11/15/21

     3,365        3,658,462   

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

     2,500        3,186,100   

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

     1,895        1,421,970   

Tampa-Hillsborough County Expressway Authority, Refunding RB:

    

Series A, 5.00%, 7/01/37

     1,495        1,685,000   

Series B, 5.00%, 7/01/42

     2,735        3,047,829   
    

 

 

 
                  23,525,646   

Georgia — 0.3%

    

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

     915        1,019,283   

Hawaii — 0.5%

    

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

     1,480        1,726,553   

Illinois — 13.9%

    

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

     2,300        2,664,964   

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

     1,150        1,314,599   

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

    

5.75%, 1/01/39

     5,000        5,870,250   

6.50%, 1/01/41

            6,430        8,314,569   

City of Chicago Illinois, GO, Project, Series A, 5.00%, 1/01/33

     4,940        5,507,063   

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

     895        1,027,854   

Illinois Finance Authority, Refunding RB:

    

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

     1,060        1,201,457   

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

     1,925        2,163,219   

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

     1,750        1,978,882   

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

     455        457,421   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    39


Table of Contents

Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

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

   $ 10,500      $ 11,513,145   

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

    

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

     3,430        3,713,832   

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

     2,725        2,949,594   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     1,470        1,773,643   

6.00%, 6/01/28

     1,255        1,502,135   

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

     685        782,517   
    

 

 

 
                  52,735,144   

Indiana — 3.6%

    

Carmel Redevelopment Authority, Refunding RB, Multipurpose, Series A COP:

    

4.00%, 8/01/35

     1,230        1,293,124   

4.00%, 8/01/38

            1,975        2,060,103   

Indiana Finance Authority, RB:

    

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

     1,720        2,004,058   

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

     915        1,006,674   

Indiana Finance Authority, Refunding RB, Community Health Network, Series A, 5.00%, 5/01/42

     2,050        2,268,653   

Indiana Health Facility Financing Authority, Refunding RB, Methodist Hospital, Inc., 5.38%, 9/15/22

     3,675        3,680,953   

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

     1,200        1,436,280   
    

 

 

 
               13,749,845   

Iowa — 1.0%

    

Iowa Finance Authority, RB, Alcoa, Inc. Project, 4.75%, 8/01/42

     1,255        1,273,059   

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

     2,140        2,457,298   
    

 

 

 
               3,730,357   

Kansas — 0.5%

    

Kansas Development Finance Authority, Refunding RB, Sisters of Leavenworth, Series A, 5.00%, 1/01/40

     1,755        1,910,510   

Kentucky — 0.4%

    

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

     1,105        1,328,188   

Louisiana — 3.3%

    

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

     3,650        4,311,161   

Louisiana Stadium & Exposition District, Refunding RB, Senior, Series A, 5.00%, 7/01/36

     380        432,622   

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

     7,290        7,784,262   
    

 

 

 
               12,528,045   

Maine — 0.5%

    

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

     1,615        1,850,871   

Maryland — 1.2%

    

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

     475        540,996   

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

     1,000        1,114,590   
Municipal Bonds   

Par  

(000)

    Value  

Maryland (concluded)

    

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

   $ 2,400      $ 2,742,888   
    

 

 

 
               4,398,474   

Massachusetts — 0.3%

    

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

     955        1,041,466   

Michigan — 2.0%

    

City of Detroit Michigan, RB, Water Supply System, Series A, Senior Lien, 5.25%, 7/01/41

            3,355        3,622,595   

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

     1,500        1,669,485   

Michigan State Hospital Finance Authority, Refunding RB, Henry Ford Health System, Series A,
5.25%, 11/15/46

     2,305        2,441,410   
    

 

 

 
               7,733,490   

Missouri — 1.9%

    

370/Missouri Bottom Road/Taussig Road Transportation Development District, RB,
7.20%, 5/01/33

     6,000        6,011,400   

Missouri State Health & Educational Facilities Authority, RB, Senior Living Facilities, Lutheran Senior Home, 5.50%, 2/01/42

     1,135        1,215,086   
    

 

 

 
               7,226,486   

Multi-State — 3.8%

    

Centerline Equity Issuer Trust (e)(f):

    

5.75%, 5/15/15

     1,000        1,086,450   

6.00%, 5/15/15

     5,000        5,456,050   

6.00%, 5/15/19

     3,500        4,156,985   

6.30%, 5/15/19

     3,000        3,608,490   
    

 

 

 
                  14,307,975   

Nebraska — 1.6%

    

Central Plains Energy Project Nebraska, RB:

    

5.25%, 9/01/37

     895        1,013,042   

Gas Project No. 3, 5.00%, 9/01/42

     1,570        1,713,953   

Lancaster County Hospital Authority No. 1, Refunding RB, Immanuel Obligation Group, 5.63%, 1/01/40

     1,245        1,397,425   

Sarpy County Hospital Authority No. 1, Refunding RB, Immanuel Obligation Group, 5.63%, 1/01/40

     1,635        1,805,939   
    

 

 

 
               5,930,359   

Nevada — 0.7%

    

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

     2,465        2,706,299   

New Jersey — 4.4%

    

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

     2,130        2,164,889   

New Jersey EDA, Refunding RB:

    

Cigarette Tax, 5.00%, 6/15/24

     455        528,296   

Cigarette Tax, 5.00%, 6/15/25

     610        701,482   

Special Assessment Bonds, Kapkowski Road Landfill Project, 6.50%, 4/01/28

     7,475        8,953,331   

New Jersey Transportation Trust Fund Authority, RB, Series A, 5.00%, 6/15/42

     4,000        4,435,600   
    

 

 

 
               16,783,598   

 

See Notes to Financial Statements.

 

                
40    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

New York — 4.3%

    

Albany Industrial Development Agency, RB, New Covenant Charter School Project, Series A,
7.00%, 5/01/35 (c)(d)

   $ 985      $ 147,681   

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

     585        655,680   

Metropolitan Transportation Authority, Refunding RB, Transportation, Series D, 5.25%, 11/15/40

     1,325        1,495,779   

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

     6,700        7,619,307   

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

     1,335        1,587,595   

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

     1,500        1,681,890   

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

    

6.00%, 12/01/36

            1,410        1,670,751   

6.00%, 12/01/42

     1,375        1,629,279   
    

 

 

 
                  16,487,962   

North Carolina — 4.5%

    

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

     6,500        6,014,710   

North Carolina Capital Facilities Finance Agency, Refunding RB, Duke Energy Carolinas Project, Series B,
4.63%, 11/01/40

     8,930        9,594,392   

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

     1,525        1,696,212   
    

 

 

 
               17,305,314   

Ohio — 2.3%

    

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

     3,405        3,806,995   

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

     1,640        1,764,443   

County of Montgomery Ohio, Refunding RB, Catholic Healthcare, Series A, 5.00%, 5/01/39

     3,025        3,257,471   
    

 

 

 
               8,828,909   

Oregon — 0.1%

    

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

     275        317,900   

Pennsylvania — 1.6%

    

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

     1,495        1,270,705   

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

     2,500        2,674,425   

Pennsylvania Economic Development Financing Authority, RB, Aqua Pennsylvania, Inc. Project, 5.00%, 11/15/40

     2,065        2,301,071   
    

 

 

 
               6,246,201   

Puerto Rico — 5.2%

    

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

     6,100        6,941,495   

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

    

5.69%, 8/01/33

     13,600        4,323,712   

5.74%, 8/01/34

     5,500        1,636,030   

5.79%, 8/01/35

     14,055        3,908,836   

5.82%, 8/01/36

     11,875        3,097,356   
    

 

 

 
               19,907,429   
Municipal Bonds   

Par  

(000)

    Value  

South Carolina — 1.8%

    

South Carolina Jobs EDA, Refunding RB, Palmetto Health Alliance, Series A, 6.25%, 8/01/31

   $ 2,640      $ 2,704,574   

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

     3,595        4,046,101   
    

 

 

 
               6,750,675   

South Dakota — 0.3%

    

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

     1,165        1,275,256   

Tennessee — 0.9%

    

Metropolitan Government Nashville & Davidson County Health & Education Facilities Board, Refunding RB, Vanderbilt University, Series D, 3.25%, 10/01/37

     3,480        3,335,023   

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

     230        259,390   
    

 

 

 
               3,594,413   

Texas — 20.4%

    

Brazos River Authority, RB, TXU Electric, Series A, AMT, 8.25%, 10/01/30

            2,400        252,360   

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

     2,350        2,765,010   

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

     685        800,299   

City of Dallas Texas, Refunding RB, 5.00%, 10/01/35

     1,650        1,895,454   

City of Houston Texas, Refunding RB:

    

Combined, First Lien, Series A (AGC),
6.00%, 11/15/35

     9,145           11,134,861   

Series A, Senior Lien, 5.50%, 7/01/39

     1,675        1,949,332   

Clifton Higher Education Finance Corp., RB, Idea Public Schools, 5.00%, 8/15/32

     640        706,451   

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

     3,750        4,107,037   

Fort Bend County Industrial Development Corp., RB, NRG Energy Inc. Project:

    

Series A, 4.75%, 5/01/38

     1,900        1,957,874   

Series B, 4.75%, 11/01/42

     1,605        1,647,500   

Gulf Coast Waste Disposal Authority, Refunding RB, Series A, AMT, 6.10%, 8/01/24

     5,000        5,019,100   

Harris County-Houston Sports Authority, Refunding RB, Third Lien, Series A-3 (NPFGC),
5.91%, 11/15/36 (a)

     25,375        6,375,469   

Lower Colorado River Authority, Refunding RB, Series A (NPFGC), 5.00%, 5/15/13 (h)

     5        5,052   

Midland County Fresh Water Supply District Number 1, RB, Midland Projects, Series A:

    

CAB, 4.57%, 9/15/37 (a)

     17,105        5,637,637   

5.00%, 9/15/40

     890        1,019,308   

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

     6,790        7,531,875   

San Antonio Energy Acquisition Public Facility Corp., RB, Gas Supply, 5.50%, 8/01/24

     3,600        4,295,016   

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

     4,410        5,328,118   

Tarrant County Cultural Education Facilities Finance Corp., Refunding RB, Scott & White Healthcare,
5.00%, 8/15/43 (b)

     390        434,012   

Texas Municipal Gas Acquisition & Supply Corp. III, Gas Supply RB, 5.00%, 12/15/29

     2,055        2,246,341   

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        3,639,570   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    41


Table of Contents

Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Texas (concluded)

    

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

   $ 3,000      $ 3,578,700   

Texas Transportation Commission, Refunding RB, First Tier, Series A, 5.00%, 8/15/41

     1,310        1,437,240   

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

     3,350        3,916,485   
    

 

 

 
               77,680,101   

Utah — 1.3%

    

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

     2,190        2,470,977   

Utah State Charter School Finance Authority, RB, Ogden Preparatory Academy:

    

3.25%, 10/15/36

     1,085        1,007,042   

3.25%, 10/15/42

     1,660        1,489,983   
    

 

 

 
               4,968,002   

Virginia — 2.2%

    

City of Norfolk Virginia, Refunding RB, Series B (AMBAC), 5.50%, 2/01/31

     1,240        1,241,612   

Route 460 Funding Corp. of Virginia Toll Road, RB, Senior Lien, Series A, 5.13%, 7/01/49

     1,340        1,461,243   

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

    

5.25%, 1/01/32

     1,755        1,947,611   

6.00%, 1/01/37

     2,000        2,319,280   

5.50%, 1/01/42

            1,255        1,386,047   
    

 

 

 
                    8,355,793   

Washington — 1.8%

    

Bellingham Washington, Water & Sewer Revenue,
5.00%, 8/01/36

     5,050        5,804,975   

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

     1,100        1,231,516   
    

 

 

 
               7,036,491   

Wisconsin — 2.0%

    

University of Wisconsin Hospitals & Clinics Authority, Refunding RB, Series A,
5.00%, 4/01/38 (b)

     575        643,109   

Wisconsin Health & Educational Facilities Authority, RB:

    

Ascension Health Senior Credit Group, 5.00%, 11/15/30

     1,790        2,070,028   

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

     910        1,034,515   

Aurora Health Care, 6.40%, 4/15/33

     3,930        3,945,602   
    

 

 

 
               7,693,254   

Wyoming — 1.5%

    

County of Sweetwater Wyoming, Refunding RB, Idaho Power Co. Project, 5.25%, 7/15/26

     3,355        3,811,381   

Wyoming Municipal Power Agency, RB, Series A:

    

5.50%, 1/01/33

     800        913,480   

5.50%, 1/01/38

     750        856,387   
    

 

 

 
               5,581,248   
Total Municipal Bonds – 116.9%              445,118,471   
    

Municipal Bonds Transferred to

Tender Option Bond Trusts (i)

  

Par  

(000)

    Value  

Alabama — 0.7%

    

Alabama Special Care Facilities Financing Authority-Birmingham, Refunding RB, Ascension Health Senior Credit Group, Series C-2, 5.00%, 11/15/36

   $ 2,519      $ 2,709,014   

Arizona — 0.8%

    

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

     2,630        2,994,680   

California — 7.2%

    

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

     2,850        3,340,941   

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

     6,500        7,337,233   

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

     2,530        2,870,310   

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

     1,840        2,236,788   

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

     10,335        11,689,298   
    

 

 

 
                  27,474,570   

Colorado — 2.0%

    

Colorado Health Facilities Authority, RB, Catholic Health:

    

Series C-3 (AGC), 5.10%, 10/01/41

            4,230        4,605,582   

Series C-7 (AGM), 5.00%, 9/01/36

     2,710        2,913,521   
    

 

 

 
               7,519,103   

Connecticut — 3.1%

    

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

    

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

     5,170        5,824,470   

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

     5,143        5,815,290   
    

 

 

 
               11,639,760   

Florida — 1.5%

    

County of Miami-Dade Florida, RB, 5.00%, 10/01/39

     5,001        5,588,553   

Georgia — 1.4%

    

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

     4,638        5,271,344   

Illinois — 0.9%

    

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

     3,119        3,521,501   

Maryland — 1.3%

    

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

     4,560        5,080,444   

Massachusetts — 2.4%

    

Massachusetts School Building Authority, Sales Tax RB, Senior, Series B, 5.00%, 10/15/41

     4,950        5,677,402   

Massachusetts Water Resources Authority, Refunding RB, General, Series A, 5.00%, 8/01/41

     3,150        3,555,909   
    

 

 

 
               9,233,311   

Michigan — 0.9%

    

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

    

5.00%, 7/01/32

     1,700        1,854,883   

5.25%, 7/01/39

     1,462        1,599,506   
    

 

 

 
               3,454,389   

 

See Notes to Financial Statements.

 

                
42    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

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 (i)

  

Par  

(000)

    Value  

New Hampshire — 0.7%

    

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

   $ 2,219      $ 2,599,080   

New Jersey — 0.8%

    

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

     2,680        3,060,667   

New York — 13.1%

    

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

     1,750        2,082,597   

New York City Municipal Water Finance Authority, Refunding RB:

    

Second General Resolution, Series HH, 5.00%, 6/15/31 j

            9,149           10,837,733   

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

     1,710        2,024,371   

New York City Transitional Finance Authority, RB, 5.00%, 2/01/42

     2,679        3,053,507   

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

     11,670        13,394,410   

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

     7,040        8,342,400   

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

     9,284        10,016,877   
    

 

 

 
               49,751,895   

Texas — 1.1%

    

Harris County Texas Metropolitan Transit Authority, Refunding RB, Sales & Use Tax Bonds, Series A,
5.00%, 11/01/41

     3,720        4,253,857   

Utah — 1.1%

    

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

     3,959        4,350,298   

Municipal Bonds Transferred to

Tender Option Bond Trusts (i)

  

Par  

(000)

    Value  

Virginia — 1.8%

    

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

   $ 5,909      $ 6,820,049   

Washington — 3.4%

    

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

     3,029        3,446,591   

State of Washington, GO, Various Purpose, Series E, 5.00%, 2/01/34

     8,113        9,445,454   
    

 

 

 
               12,892,045   

Total Municipal Bonds Transferred to

Tender Option Bond Trusts — 44.2%

  

  

    168,214,560   
Total Long-Term Investments
(Cost — $560,233,680) — 161.1%
        613,333,031   
    
   
Short-Term Securities             

Mississippi — 1.4%

                

Mississippi Business Finance Corp., RB, VRDN, Series A, 0.09%, 3/01/13(k)

     5,100        5,100,000   
      Shares         

Money Market Funds — 1.2%

    

FFI Institutional Tax-Exempt Fund, 0.01% (l)(m)

     4,716,948        4,716,948   
Total Short-Term Securities
(Cost — $9,816,948) — 2.6%
             9,816,948   
Total Investments (Cost — $570,050,628) — 163.7%        623,149,979   
Other Assets Less Liabilities — 0.5%        2,219,855   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (24.5)%

   

    (93,420,814
VMTP Shares, at Liquidation Value — (39.7)%        (151,300,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 380,649,020   
    

 

 

 

 

 

Notes to Schedule of investments

 

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

 

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

 

Counterparty      Value        Unrealized
Appreciation
(Depreciation)
 
Morgan Stanley      $ 1,604,416         $ 22,195   
Goldman Sachs Group, Inc.      $ 434,012         $ 3,350   
JP Morgan Chase & Co.      $ 643,109         $ (788

 

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

 

(d)   Non-income producing security.

 

(e)   Security 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.

 

(f)   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.

 

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

 

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

 

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

 

(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 is $9,477,746.

 

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

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    43


Table of Contents

Schedule of Investments (concluded)

  

BlackRock Municipal Income Trust II (BLE)

 

 

(l)   Investments in issuers considered to be an affiliate of the Trust during the six months ended February 28, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate      Shares Held
at August 31,
2012
       Net
Activity
       Shares Held
at February 28,
2013
       Income  

FFI Institutional Tax-Exempt Fund

       15,208,474           (10,491,526        4,716,948         $ 467   

 

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

 

Ÿ  

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

 

Ÿ  

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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. The categorization of a value determined for investments based on the pricing transparency of the investment is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Notes 1 of the Notes to Financial Statements.

The following table summarizes the Trust’s investments categorized in the disclosure hierarchy as of February 28, 2013:

 

     Level 1      Level 2      Level 3      Total

Assets:

                        
Investments:                         

Long-Term Investments1

               $ 613,333,031                     $  613,333,031  

Short-Term Securities

    $ 4,716,948            5,100,000                       9,816,948  
   

 

 

        

 

 

        

 

 

        

 

 

 

Total

    $ 4,716,948          $  618,433,031                     $ 623,149,979  
   

 

 

        

 

 

        

 

 

        

 

 

 

 

1  

See above Schedule of Investments for values in each state or political sub-division.

Certain of the Trust’s assets and liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of February 28, 2013, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1      Level 2      Level 3      Total

Assets:

                        

Cash

    $    259,625                                $ 259,625  

Liabilities:

                        

TOB trust certificates

               $ (93,381,521 )                     (93,381,521 )

VMTP Shares

                 (151,300,000 )                     (151,300,000 )
   

 

 

        

 

 

        

 

 

        

 

 

 

Total

    $ 259,625          $ (244,681,521 )                   $ (244,421,896 )
   

 

 

        

 

 

        

 

 

        

 

 

 

There were no transfers between levels during the six months ended February 28, 2013.

 

See Notes to Financial Statements.

 

                
44    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments February 28, 2013 (Unaudited)

  

BlackRock MuniHoldings Investment Quality Fund (MFL)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 3.4%

    

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

    

6.13%, 6/01/34

   $ 4,980      $ 5,933,421   

6.00%, 6/01/39

     10,995        12,938,586   

Selma IDB, RB, International Paper Co., Project, Series A, 5.38%, 12/01/35

     1,745        1,924,770   
    

 

 

 
               20,796,777   

Arizona — 1.5%

    

Arizona Board of Regents, Refunding RB, Series A:

    

Arizona State University System, 5.00%, 7/01/42

     5,000        5,717,250   

University of Arizona, 5.00%, 6/01/42

     3,000        3,414,120   
    

 

 

 
               9,131,370   

California — 16.9%

    

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

     8,920        10,529,079   

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

     5,370        6,576,263   

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

     4,450        5,150,741   

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

     5,600        6,547,912   

Los Angeles Community College District California, GO:

    

Election of 2001, Series A (NPFGC), 5.00%, 8/01/32

     10,000        11,345,100   

Election of 2008, Series C, 5.25%, 8/01/39

     3,375        4,081,928   

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

     5,000        5,808,250   

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

     2,980        3,391,866   

Los Angeles Unified School District California, GO, Series D, 5.25%, 7/01/25

     3,485        4,201,516   

Manteca Financing Authority California, RB, Manteca Sewer (AGC):

    

5.63%, 12/01/33

     2,450        2,818,015   

5.75%, 12/01/36

     3,285        3,785,995   

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

     4,110        4,893,407   

San Bernardino Community College District, GO, Election of 2002, Series A, 6.25%, 8/01/33

     3,820        4,642,522   

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

     4,690        5,534,763   

State of California, GO, Various Purpose (AGC), 5.50%, 11/01/39

     15,000        17,639,250   

State of California, GO, Refunding, Various Purpose, 5.00%, 9/01/41

     5,345        5,989,019   
    

 

 

 
               102,935,626   

Colorado — 1.7%

    

City & County of Denver Colorado, Refunding ARB, Airport System, Series B, 5.00%, 11/15/37

     2,800        3,207,736   

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

     5,925        7,042,336   
    

 

 

 
               10,250,072   
Municipal Bonds   

Par  

(000)

    Value  

District of Columbia — 0.2%

    

District of Columbia Water & Sewer Authority, Refunding RB, Series A (NPFGC), 5.00%, 10/01/38

   $ 1,000      $ 1,138,270   

Florida — 8.8%

    

City of Jacksonville Florida, Refunding RB, Sales Tax Revenue, Better Jacksonville, Series A,
5.00%, 10/01/30

     3,500        4,082,785   

City of St. Augustine Florida, Refunding RB, Capital Improvement, 5.00%, 10/01/34

     1,740        1,982,504   

County of Lee Florida, Refunding ARB, Series A, AMT, 5.38%, 10/01/32

     4,600        5,167,916   

County of Miami-Dade Florida, Refunding RB, Series A, AMT:

    

5.00%, 10/01/31

     10,000        11,247,600   

Miami International Airport, (AGM), 5.50%, 10/01/41

     3,500        4,016,390   

County of St. John’s Florida, Refunding RB, Series A (AGM), 5.00%, 10/01/34

     2,940        3,350,571   

Florida Housing Finance Corp., RB, Waverly Apartments, Series C-1, AMT (AGM), 6.30%, 7/01/30

     2,055        2,059,336   

Florida Housing Finance Corp., Refunding RB, Homeowner Mortgage, Series 2, AMT (NPFGC):

    

5.75%, 7/01/14

     190        190,644   

5.90%, 7/01/29

     5,160        5,217,431   

Jacksonville Florida Port Authority, Refunding RB, AMT, 5.00%, 11/01/38

     3,880        4,207,976   

Manatee County Housing Finance Authority, RB, Series A, AMT (Ginnie Mae), 5.90%, 9/01/40

     615        668,843   

Miami-Dade County Housing Finance Authority Florida, RB, Marbrisa Apartments Project, Series 2A, AMT (AGM), 6.00%, 8/01/26

     2,185        2,189,676   

Orlando-Orange County Expressway Authority, Refunding RB (a):

    

5.00%, 7/01/29

     3,000        3,516,990   

5.00%, 7/01/35

     5,000        5,703,700   
    

 

 

 
               53,602,362   

Illinois — 16.8%

    

Chicago Illinois Board of Education, GO, Series A:

    

5.50%, 12/01/39

     6,370        7,380,792   

5.00%, 12/01/42

     8,750        9,524,462   

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

     1,620        2,015,977   

Chicago Illinois Transit Authority, RB:

    

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

     6,315        7,339,419   

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

     1,960        2,253,373   

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

     5,515        6,304,362   

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

    

Series A, 5.75%, 1/01/39

     7,395        8,682,100   

Series C, 6.50%, 1/01/41

     16,800        21,723,912   

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

     2,445        2,807,936   

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

     3,000        3,344,370   

Cook County Forest Preserve District, GO, Series C, 5.00%, 12/15/32

     1,790        2,055,009   

Cook County Forest Preserve District, GO, Refunding, Limited Tax Project, Series B, 5.00%, 12/15/32

     840        964,362   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    45


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Investment Quality Fund (MFL)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois (concluded)

    

Illinois Finance Authority, RB:

    

Carle Foundation, Series A, 6.00%, 8/15/41

   $ 4,000      $ 4,788,560   

University of Chicago, Series B, 5.50%, 7/01/37

     10,000        12,017,300   

Illinois Finance Authority, Refunding RB, North Western Memorial Healthcare, 5.00%, 8/15/37

     1,395        1,587,622   

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project, Series B, 5.00%, 12/15/28

     2,645        3,099,411   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     4,365        5,266,634   

6.00%, 6/01/28

     1,245        1,490,165   
    

 

 

 
               102,645,766   

Indiana — 3.4%

    

Indiana Finance Authority Waste Water Utility, RB, First Lien, CWA Authority, Series A, 5.00%, 10/01/41

     4,080        4,654,056   

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

     14,105        15,964,885   
    

 

 

 
               20,618,941   

Kansas — 0.9%

    

Kansas Development Finance Authority, Refunding RB, Adventist Health System/Sunbelt Obligated Group, Series A, 5.00%, 11/15/32

     4,620        5,366,915   

Louisiana — 0.2%

    

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

    

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

     500        596,045   

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

     720        858,305   
    

 

 

 
               1,454,350   

Massachusetts — 0.4%

    

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

     2,090        2,426,406   

Michigan — 5.9%

    

City of Detroit Michigan, RB, Second Lien, Series B (AGM), 6.25%, 7/01/36

     6,320        7,351,171   

City of Detroit Michigan, Refunding RB, Sewage Disposal System, Senior Lien (AGM):

    

Series B, 7.50%, 7/01/33

     2,780        3,462,851   

Series C-1, 7.00%, 7/01/27

     9,055        11,143,808   

Hudsonville Public Schools, GO, School Building & Site (Q-SBLF), 5.25%, 5/01/41

     6,015        6,807,717   

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

     5,780        7,364,067   
    

 

 

 
               36,129,614   

Minnesota — 2.0%

    

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

     9,900        12,197,493   

Mississippi — 2.8%

    

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

     2,830        3,213,408   
Municipal Bonds   

Par  

(000)

    Value  

Mississippi (concluded)

    

Mississippi Development Bank, Refunding RB, Special Obligation,:

    

City of Jacksonville Mississippi Water & Sewer System Project, Series A (AGM), 5.00%, 9/01/30

   $ 9,030      $ 10,522,479   

Jackson Public School District, Series A, 5.00%, 4/01/28

     3,005        3,426,511   
    

 

 

 
               17,162,398   

Nevada — 3.9%

    

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

     5,850        7,029,068   

County of Clark Nevada, ARB:

    

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

     11,175        12,601,377   

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

     3,965        4,147,231   
    

 

 

 
               23,777,676   

New Jersey — 4.0%

    

New Jersey EDA, RB, School Facility Construction, Series KK, 5.00%, 3/01/31

     5,000        5,795,000   

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

     6,500        7,233,265   

New Jersey Higher Education Student Assistance Authority, Refunding RB, Series 1, AMT, 5.75%, 12/01/28

     4,475        5,073,308   

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series A, 5.50%, 6/15/41

     5,410        6,301,622   
    

 

 

 
               24,403,195   

New York — 11.7%

    

Metropolitan Transportation Authority, Refunding RB, Transportation, Series C, 5.00%, 11/15/28

     5,500        6,451,115   

New York City Municipal Water Finance Authority, Refunding RB:

    

Fiscal 2009, Series EE, 5.25%, 6/15/40

     7,500        8,731,125   

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

     4,000        4,736,480   

Second General Resolution, Water & Sewer System, Fiscal 2011, Series EE, 5.38%, 6/15/43

     3,475        4,058,244   

New York City Transitional Finance Authority, RB:

    

Fiscal 2009, Series S-4 (AGC), 5.50%, 1/15/29

     4,000        4,731,560   

Future Tax Secured, Sub-Series E-1, 5.00%, 2/01/42

     7,210        8,216,516   

Sub-Series S-2A, 5.00%, 7/15/30

     7,110        8,340,599   

New York State Dormitory Authority, RB, General Purpose, Series B:

    

5.00%, 3/15/37

     9,900        11,424,600   

5.00%, 3/15/42

     9,655        11,018,865   

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

     2,890        3,268,706   
    

 

 

 
               70,977,810   

North Carolina — 1.2%

    

North Carolina Medical Care Commission, RB, Health Care Facilities, Duke University Health System, Series A, 5.00%, 6/01/32

     6,305        7,356,359   

Ohio — 1.2%

    

The Ohio State University, RB, General Receipts, Special Purpose, Series A, 5.00%, 6/01/38

     6,475        7,517,799   

 

See Notes to Financial Statements.

 

                
46    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniHoldings Investment Quality Fund (MFL)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Pennsylvania — 4.7%

    

Berks County Municipal Authority, Refunding RB, Reading Hospital & Medical Center, Series A,
5.00%, 11/01/40

   $ 4,425      $ 4,901,528   

Pennsylvania Higher Educational Facilities Authority, RB, 5.00%, 4/01/42

     9,325        10,553,289   

Pennsylvania Turnpike Commission, RB:

    

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

     4,945        5,632,899   

Sub-Series B, Motor License Fund- Enhanced Subordinate Special, 5.00%, 12/01/42

     6,480        7,271,597   
    

 

 

 
               28,359,313   

Puerto Rico — 1.2%

    

Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A, 6.38%, 8/01/39

     6,610        7,455,551   

Texas — 20.9%

    

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

    

6.00%, 11/15/35

     12,700        15,463,393   

6.00%, 11/15/36

     9,435        11,549,289   

5.38%, 11/15/38

     5,000        5,822,400   

Dallas Area Rapid Transit, Refunding RB, Senior Lien, 5.25%, 12/01/38

     9,110        10,587,095   

Dallas/Fort Worth International Airport, Joint Refunding ARB, AMT:

    

Series E, 5.00%, 11/01/35

     11,800        12,923,478   

Series F, 5.00%, 11/01/35

     10,000        10,896,100   

Series H, 5.00%, 11/01/42

     10,425        11,293,507   

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

     1,500        1,863,450   

Houston Community College System, Harris and Fort Bend Counties, Texas, Limited Tax, GO,
5.00%, 2/15/36 (a)

     2,450        2,782,220   

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

     3,500        4,158,560   

North Texas Tollway Authority, Refunding RB, System, First Tier:

    

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

     5,555        6,562,510   

Series B, 5.00%, 1/01/42

     3,500        3,890,495   

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

     12,150        13,691,714   

Tarrant County Cultural Education Facilities Finance Corp., Refunding RB, Christus Health, Series A (AGC), 6.50%, 7/01/37

     1,770        2,097,521   

Texas Tech University, Refunding RB, Improvement Bonds, 14th Series A, 5.00%, 8/15/32

     1,500        1,752,060   

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

     2,070        2,271,059   

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

     8,495        9,931,505   
    

 

 

 
               127,536,356   

Utah — 2.2%

    

Utah Transit Authority, Refunding RB, Subordinated Sales Tax, 5.00%, 6/15/42

     11,910        13,437,696   

Virginia — 2.6%

    

Fairfax County IDA, RB, Health Care, Inova Health System Project, Series A, 5.00%, 5/15/40

     3,230        3,671,283   

Virginia Public School Authority, RB, School Financing, 6.50%, 12/01/35 (b)

     4,300        5,653,081   

Virginia Resources Authority, RB,

Series A-1, 5.00%, 11/01/42

     5,770        6,680,102   
    

 

 

 
               16,004,466   
Municipal Bonds   

Par  

(000)

    Value  

Washington — 1.8%

    

City of Seattle Washington, Refunding RB, Series A, 5.25%, 2/01/36

   $ 4,200      $ 4,891,026   

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

     3,290        3,869,468   

Washington Higher Education Facilities Authority, Refunding RB, The University of Puget Sound Project, Series A, 5.00%, 10/01/42

     2,000        2,240,860   
    

 

 

 
               11,001,354   

Wisconsin — 1.0%

    

University of Wisconsin Hospitals & Clinics Authority, Refunding RB,

Series A, 5.00%, 4/01/38 (a)

     1,750        1,957,288   

Wisconsin Health & Educational Facilities Authority, RB, Ascension Health, Series D, 5.00%, 11/15/41

     2,050        2,303,687   

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

     1,470        1,652,118   
    

 

 

 
               5,913,093   
Total Municipal Bonds – 121.3%              739,597,028   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
 

Alabama — 1.2%

    

Mobile Board of Water & Sewer Commissioners, RB (NPFGC), 5.00%, 1/01/31

     6,500        7,088,640   

California — 2.5%

    

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

     7,960        8,936,851   

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

     2,400        2,693,376   

University of California, Refunding RB, Limited Project, Series G, 5.00%, 5/15/37

     3,020        3,487,301   
    

 

 

 
               15,117,528   

District of Columbia — 0.7%

    

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

     3,381        4,106,340   

Florida — 2.9%

    

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

     3,060        3,438,492   

Hillsborough County Aviation Authority, RB, Series A, AMT (AGC), 5.50%, 10/01/38

     10,657        11,969,698   

Lee County Housing Finance Authority, RB, Multi-County Program, Series A-2, AMT (Ginnie Mae), 6.00%, 9/01/40

     2,370        2,506,180   
    

 

 

 
               17,914,370   

Illinois — 2.2%

    

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

     7,737        8,585,448   

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

     4,358        4,921,072   
    

 

 

 
               13,506,520   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    47


Table of Contents

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  

Indiana — 1.7%

    

Indiana Health & Educational Facilities Financing Authority, Refunding RB, St. Francis, Series E (AGM), 5.25%, 5/15/41

   $ 9,850      $ 10,615,443   

Kentucky — 0.1%

    

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

     404        475,327   

Massachusetts — 1.8%

    

Massachusetts School Building Authority, RB, Senior-Series B, 5.00%, 10/15/41

     9,440        10,827,208   

Nevada — 2.6%

    

Clark County Water Reclamation District, GO:

    

Limited Tax, 6.00%, 7/01/38

     8,000        9,671,920   

Series B, 5.50%, 7/01/29

     5,008        6,134,717   
    

 

 

 
               15,806,637   

New Jersey — 4.3%

    

New Jersey EDA, RB, School Facilities Construction:

  

 

(AGC), 6.00%, 12/15/34 (b)

     2,175        2,603,345   

6.00%, 12/15/34

     2,175        2,603,345   

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

     7,402        8,213,859   

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

    

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

     8,000        9,110,480   

Series B, 5.25%, 6/15/36

     2,960        3,380,438   
    

 

 

 
               25,911,467   

New York — 13.7%

    

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

     9,249        11,008,013   

New York City Municipal Water Finance Authority, Refunding RB:

    

Series FF, 5.00%, 6/15/45

     11,236        12,706,533   

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

     4,994        5,913,294   

New York City Transitional Finance Authority, RB:

    

Fiscal 2009, Series S-3, 5.25%, 1/15/39

     5,619        6,282,695   

Future Tax Secured, Sub-Series E1, 5.00%, 2/01/42

     5,439        6,198,163   

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

     13,950        16,011,313   

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

     8,200        9,717,000   

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

     13,500        15,819,300   
    

 

 

 
               83,656,311   
Municipal Bonds Transferred to
Tender Option Bond Trusts (c)
  

Par  

(000)

    Value  

Puerto Rico — 1.0%

    

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

   $ 5,590      $ 6,102,268   

Texas — 6.3%

    

City of San Antonio Texas, Refunding RB, Series A, 5.25%, 2/01/31 (d)

     12,027        14,326,719   

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

     9,640        11,453,862   

Waco Educational Finance Corp., Refunding RB, Baylor University, 5.00%, 3/01/43

     11,250        12,814,538   
    

 

 

 
               38,595,119   

Utah — 1.1%

    

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

     6,373        7,003,320   

Washington — 1.7%

    

University of Washington, Refunding RB, Series A, 5.00%, 7/01/41

     8,698        10,067,611   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 43.8%
        266,794,109   
Total Long-Term Investments
(Cost — $915,879,143) — 165.1%
        1,006,391,137   
    
   
Short-Term Securities               

Alabama — 0.00%

    

Eutaw Industrial Development Board, Refunding RB, VRDN, Alabama Power Co. Project,
0.09%, 3/04/13 (e)

     200        200,000   
      Shares         

Money Market Funds — 2.0%

    

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

     12,331,647        12,331,647   

Total Short-Term Securities

(Cost — $12,531,647) — 2.0%

             12,531,647   
Total Investments (Cost — $928,410,790) — 167.1%        1,018,922,784   

Liabilities in Excess of Other Assets — 0.0%

  

    (15,527

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (22.1)%

   

    (134,624,233
VRDP Shares, at Liquidation Value — (45.0)%        (274,600,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 609,683,024   
    

 

 

 
Notes to Schedule of investments

 

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

 

Counterparty      Value        Unrealized
Appreciation
(Depreciation)
 
Apex Pryor Securities      $ 5,703,700         $ (6,450
Jefferies and Company      $ 3,516,990         $ 19,230   
JPMorgan Chase & Co.      $ 2,782,220         $ 2,573   
JPMorgan Chase & Co.      $ 1,957,288         $ (2,398

 

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

 

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

 

(d)   All or a portion of security is subject to a recourse agreement, which may require the 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 is $9,707,818.

 

See Notes to Financial Statements.

 

                
48    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (concluded)

  

BlackRock MuniHoldings Investment Quality Fund (MFL)

 

 

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

 

(f)   Investments in issuers considered to be an affiliate of the Trust during the six months ended February 28, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate   Shares Held
at August 31,
2012
     Net
Activity
     Shares Held
at February 28,
2013
    Income  

FFI Institutional Tax-Exempt Fund

    687,432         11,644,149         12,331,581      $ 1,163   

 

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

 

Ÿ  

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

 

Ÿ  

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the Trust’s investments categorized in the disclosure hierarchy as of February 28, 2013:

 

     Level 1      Level 2      Level 3      Total

Assets:

                        

Long-Term Investments1

               $ 1,006,391,137                     $ 1,006,391,137  

Short-Term Securities

    $ 12,331,647            200,000                       12,531,647  
   

 

 

        

 

 

        

 

 

        

 

 

 

Total

    $ 12,331,647          $ 1,006,591,137                     $ 1,018,922,784  
   

 

 

        

 

 

        

 

 

        

 

 

 

 

1   See above Schedule of Investments for values in each state or political sub-division.

      

Certain of the Trust’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of February 28, 2013, such liabilities are categorized within the disclosure hierarchy as follows:

 

   

     Level 1      Level 2      Level 3      Total

Liabilities:

                        

Bank overdraft

               $ (443,146 )                   $ (443,146 )

TOB trust certificates

                 (134,552,822 )                     (134,552,822 )

VRDP Shares

                 (274,600,000 )                     (274,600,000 )
   

 

 

        

 

 

        

 

 

        

 

 

 

Total

               $ (409,595,968 )                   $ (409,595,968 )
   

 

 

        

 

 

        

 

 

        

 

 

 

There were no transfers between levels during the six months ended February 28, 2013.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    49


Table of Contents

Schedule of Investments February 28, 2013 (Unaudited)

  

BlackRock MuniVest Fund, Inc. (MVF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 2.9%

    

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

   $ 7,610      $ 9,069,750   

Camden IDB Alabama, RB, Weyerhaeuser Co. Project, Series A, 6.13%, 12/01/13 (a)

     2,550        2,664,674   

Selma IDB, RB, Gulf Opportunity Zone, International Paper Co.:

    

5.80%, 5/01/34

     1,850        2,096,494   

Series A, 5.38%, 12/01/35

     1,000        1,103,020   

Selma IDB, Refunding RB, International Paper Co., Series B, 5.50%, 5/01/20

     5,000        5,084,000   
    

 

 

 
               20,017,938   

Alaska — 0.2%

    

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

     1,250        1,096,600   

Arizona — 3.9%

    

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

     4,100        2,892,755   

Maricopa County Pollution Control Corp., Refunding RB, Southern California Edison Co., Series A, 5.00%, 6/01/35

     3,300        3,668,313   

Phoenix Civic Improvement Corp., Refunding RB, Junior Lien, Series A, 5.00%, 7/01/40

     2,000        2,218,620   

Pima County IDA, RB, Arizona Charter Schools Project, Series I, 6.75%, 7/01/21

     630        632,766   

Pima County IDA, Refunding RB, Arizona Charter Schools Project, Series I (a)(b):

    

6.10%, 7/01/13

     370        384,315   

6.10%, 7/01/13

     110        112,068   

6.30%, 7/01/13

     740        765,848   

6.30%, 7/01/13

     230        234,480   

Pima County IDA Arizona, ERB, Arizona Charter Schools Project, Series E, 7.25%, 7/01/31

     1,995        2,003,938   

Salt River Project Agricultural Improvement & Power Distribution, Refunding RB, Electrical System, Series A, 5.00%, 12/01/31

     7,000        8,355,130   

Salt Verde Financial Corp., RB, Senior, 5.00%, 12/01/37

     5,000        5,780,900   
    

 

 

 
               27,049,133   

California — 10.5%

    

California Health Facilities Financing Authority, RB:

    

Scripps Health, Series A, 5.00%, 11/15/40

     2,800        3,192,140   

California Health Facilities Financing Authority, RB:

    

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

     3,750        4,180,613   

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

     5,000        5,924,800   

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

     5,600        6,857,928   

California Health Facilities Financing Authority, Refunding RB, Catholic Healthcare West, Series A, 6.00%, 7/01/34

     1,055        1,258,657   

California HFA, RB, Home Mortgage, Series K, AMT, 5.50%, 2/01/42

     1,830        1,895,477   

California State Public Works Board, RB, Department of Mental Health, Coalinga, Series A:

    

5.50%, 12/01/13 (a)

     6,000        6,235,320   

5.13%, 6/01/29

     10,435        10,885,688   
Municipal Bonds    Par  
(000)
    Value  

California (concluded)

    

California Statewide Communities Development Authority, RB, Series A:

    

Health Facility, Memorial Health Services, 6.00%, 4/01/13 (a)

   $ 4,240      $ 4,262,430   

Kaiser Permanente, 5.00%, 4/01/42

     4,170        4,698,339   

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

     1,200        1,357,788   

Golden State Tobacco Securitization Corp. California, RB, Asset-Backed, Series A-3,
7.88%, 6/01/13 (a)

     5,725        5,838,011   

Poway Unified School District, GO, CAB, School Facilities Improvement District No. 2007-1, Election of 2008, Series B, 4.80%, 8/01/46 (c)

     15,000        3,077,850   

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

     9,700        12,159,823   
    

 

 

 
               71,824,864   

Colorado — 1.0%

    

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

     2,500        3,022,600   

Colorado Health Facilities Authority, Refunding RB, Evangelical Lutheran, Series A, 5.25%, 6/01/34

     3,000        3,134,610   

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

     385        439,235   
    

 

 

 
               6,596,445   

Delaware — 0.2%

    

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

     1,500        1,692,435   

District of Columbia — 0.2%

    

Metropolitan Washington Airports Authority, Refunding RB, First Senior Lien, Series A:

    

5.00%, 10/01/39

     415        456,218   

5.25%, 10/01/44

     650        719,647   
    

 

 

 
               1,175,865   

Florida — 4.9%

    

County of Miami-Dade Florida, GO, Building Better Communities Program:

    

Series B, 6.38%, 7/01/28

     4,630        5,634,201   

Series B-1, 5.63%, 7/01/38

     5,000        5,836,500   

County of Miami-Dade Florida, Refunding RB, Miami International Airport:

    

AMT (AGC), 5.00%, 10/01/40

     10,000        10,735,600   

Series A-1, 5.38%, 10/01/41

     10,290        11,694,688   
    

 

 

 
               33,900,989   

Georgia — 1.9%

    

City of Atlanta Georgia, Refunding RB, General, Series B, AMT, 5.00%, 1/01/29

     1,070        1,207,345   

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

     3,570        4,184,075   

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

     3,335        3,715,090   

Municipal Electric Authority of Georgia, RB, Series W:

    

6.60%, 1/01/18 (d)

     110        115,541   

6.60%, 1/01/18

     3,645        4,075,657   
    

 

 

 
               13,297,708   

 

See Notes to Financial Statements.

 

                
50    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniVest Fund, Inc. (MVF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Hawaii — 0.9%

    

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

   $ 5,000      $ 5,879,200   

Illinois — 11.4%

    

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

     6,670        7,728,395   

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

     2,110        2,425,825   

City of Chicago Illinois, ARB, O’Hare International Airport, Third Lien, Series B-2, AMT (NPFGC), 6.00%, 1/01/27

     17,080        17,731,773   

Illinois Finance Authority, RB:

    

Advocate Health Care Network, Series D, 6.50%, 11/01/38

     9,700        11,730,792   

Community, 6.50%, 7/01/22

     655        658,177   

Illinois Finance Authority, Refunding RB, Series A:

    

Northwestern Memorial Hospital, 6.00%, 8/15/39

     9,000        10,679,670   

OSF Healthcare System, 6.00%, 5/15/39

     5,060        5,870,511   

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

     2,645        3,165,853   

Regional Transportation Authority, RB:

    

Series A (AMBAC), 7.20%, 11/01/20

     2,765        3,324,968   

Series C (NPFGC), 7.75%, 6/01/20

     4,000        4,996,680   

Village of Hodgkins Illinois, RB, MBM Project, AMT, 6.00%, 11/01/23

     10,000        10,016,000   
    

 

 

 
               78,328,644   

Indiana — 2.0%

    

Indiana Health & Educational Facilities Financing Authority, RB, Clarian Health Obligation, Series A, 5.25%, 2/15/40

     8,980        9,808,405   

Indianapolis Local Public Improvement Bond Bank, Refunding RB, Series D, 6.75%, 2/01/14

     3,670        3,882,126   
    

 

 

 
               13,690,531   

Iowa — 0.1%

    

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

     1,000        951,660   

Kentucky — 1.2%

    

County of Owen Kentucky, RB, Kentucky American Water Co., Series B, 5.63%, 9/01/39

     1,000        1,079,820   

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

    

6.38%, 6/01/40

     2,000        2,403,960   

6.50%, 3/01/45

     4,000        4,808,480   
    

 

 

 
               8,292,260   

Louisiana — 1.0%

    

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

     2,615        3,088,681   

Louisiana Stadium & Exposition District, Refunding RB, Senior, Series A, 5.00%, 7/01/36

     1,110        1,263,713   

Parish of St. Charles Louisiana Gulf Opportunity Zone, RB, Valero Energy Corp. Project,
4.00%, 12/01/40 (e)

     2,210        2,432,481   
    

 

 

 
               6,784,875   

Maine — 1.0%

    

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

     5,000        5,437,850   
Municipal Bonds    Par  
(000)
    Value  

Maine (concluded)

    

Portland New Public Housing Authority Maine, Refunding RB, Senior Living, Series A, 6.00%, 2/01/34

   $ 1,190      $ 1,225,819   
    

 

 

 
               6,663,669   

Maryland — 1.8%

    

Maryland Community Development Administration, RB, AMT, 5.10%, 9/01/37

     1,835        1,915,483   

Maryland Community Development Administration, Refunding RB, Residential, Series D, AMT,
4.90%, 9/01/42

     3,250        3,352,473   

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

    

Charlestown Community, 6.25%, 1/01/41

     2,000        2,285,740   

University of Maryland Medical System, 5.00%, 7/01/34

     2,100        2,317,854   

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

     2,100        2,312,541   
    

 

 

 
               12,184,091   

Massachusetts — 5.6%

    

Massachusetts Bay Transportation Authority, Refunding RB, General Transportation System, Series A, 7.00%, 3/01/19

     3,010        3,539,610   

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

     2,800        3,250,688   

Massachusetts HFA, RB, AMT:

    

S/F Housing, Series 130, 5.00%, 12/01/32

     2,500        2,600,450   

Series A, 5.20%, 12/01/37

     2,865        2,976,706   

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

     6,550        7,057,821   

Massachusetts Water Resources Authority, RB, Series A, 6.50%, 7/15/19 (d)

     16,000        18,962,720   
    

 

 

 
               38,387,995   

Michigan — 3.9%

    

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

    

6.25%, 7/01/36

     2,500        2,907,900   

7.00%, 7/01/36

     1,250        1,509,450   

Michigan State Hospital Finance Authority, Refunding RB:

    

Henry Ford Health System, Series A, 5.25%, 11/15/46

     7,950        8,420,481   

Michigan State Hospital Finance Authority, Refunding RB:

    

McLaren Health Care, 5.75%, 5/15/38

     7,285        8,443,461   

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

     4,100        5,223,646   
    

 

 

 
               26,504,938   

Mississippi — 4.6%

    

County of Lowndes Mississippi, Refunding RB, Solid Waste Disposal & Pollution Control, Weyerhaeuser Co. Project:

    

Series A, 6.80%, 4/01/22

     9,160        11,036,334   

Series B, 6.70%, 4/01/22

     4,500        5,368,995   

Mississippi Business Finance Corp., Refunding RB, System Energy Resource, Inc. Project,
5.88%, 4/01/22

     15,000        15,048,600   
    

 

 

 
               31,453,929   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    51


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniVest Fund, Inc. (MVF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Nebraska — 1.7%

    

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

   $ 6,200      $ 6,768,478   

Omaha Nebraska Public Power District, Series B, 5.00%, 2/01/36

     4,000        4,600,000   
    

 

 

 
               11,368,478   

Nevada — 0.9%

    

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

     5,000        5,878,350   

New Hampshire — 0.3%

    

New Hampshire Health & Education Facilities Authority, Refunding RB, Elliot Hospital, Series B,
5.60%, 10/01/22

     2,145        2,297,123   

New Jersey — 4.8%

    

New Jersey EDA, RB, Cigarette Tax, 5.75%, 6/15/14 (a)

     3,695        3,959,636   

New Jersey EDA, Refunding RB:

    

Cigarette Tax, 5.00%, 6/15/25

     990        1,138,470   

School Facilities Construction, Series AA, 5.25%, 12/15/33

     10,000        11,361,800   

New Jersey State Housing & Mortgage Finance Agency, RB, Series AA, 6.38%, 10/01/28

     1,045        1,133,741   

New Jersey Transportation Trust Fund Authority, RB, Transportation System, 5.50%, 6/15/31

     8,000        9,491,360   

Tobacco Settlement Financing Corp. New Jersey, RB, 7.00%, 6/01/13 (a)

     5,980        6,085,667   
    

 

 

 
               33,170,674   

New York — 4.7%

    

Metropolitan Transportation Authority, RB, Series C:

    

6.25%, 11/15/23

     3,245        4,088,376   

6.50%, 11/15/28

     14,925        18,992,510   

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

     4,215        4,726,111   

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

     3,165        3,750,303   

Rochester Housing Authority, RB, College Andrews Terrace Apartments, AMT (Ginnie Mae),
4.70%, 12/20/38

     1,000        1,031,960   
    

 

 

 
               32,589,260   

North Carolina — 1.0%

    

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

     4,105        3,798,521   

North Carolina Medical Care Commission, Refunding RB, Wakemed, Series A, 4.13%, 10/01/38

     2,730        2,839,691   
    

 

 

 
               6,638,212   

Ohio — 0.5%

    

Buckeye Tobacco Settlement Financing Authority, RB, Senior, Series A-2, 6.50%, 6/01/47

     1,125        1,070,246   

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

     1,915        2,398,768   
    

 

 

 
               3,469,014   

Oregon — 0.7%

    

City of Tigard Washington County Oregon, Refunding RB, Water System:

    

5.00%, 8/01/37

     2,000        2,312,000   

5.00%, 8/01/42

     2,335        2,676,634   
    

 

 

 
               4,988,634   
Municipal Bonds    Par  
(000)
    Value  

Pennsylvania — 0.9%

    

Chester County IDA, RB, Aqua Pennsylvania Inc. Project, Series A, AMT (NPFGC), 5.00%, 2/01/40

   $ 540      $ 569,246   

Delaware River Port Authority of Pennsylvania & New Jersey, RB, Series D, 5.00%, 1/01/40

     195        217,294   

Pennsylvania Economic Development Financing Authority, Refunding RB, Aqua Pennsylvania, Inc. Project, Series A, AMT, 5.00%, 12/01/34

     2,780        3,101,035   

Philadelphia Authority for Industrial Development, RB:

    

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

     1,000        1,023,230   

Rieder House Project, Series A, 6.10%, 7/01/33

     1,355        1,386,477   
    

 

 

 
               6,297,282   

Puerto Rico — 2.4%

    

Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A, 6.38%, 8/01/39

     13,000        14,662,960   

Puerto Rico Sales Tax Financing Corp., Refunding RB, CAB, Series A (NPFGC), 5.60%, 8/01/41 (c)

     10,000        2,081,800   
    

 

 

 
               16,744,760   

South Carolina — 0.9%

    

County of Georgetown South Carolina, Refunding RB, International Paper Co. Project, Series A, AMT, 5.55%, 12/01/29

     1,000        1,057,450   

County of Richland South Carolina, Refunding RB, International Paper Co. Project, AMT,
6.10%, 4/01/23

     5,000        5,069,850   
    

 

 

 
               6,127,300   

Texas — 13.8%

    

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

     3,055        290,653   

Brazos River Harbor Navigation District, Refunding RB, Dow Chemical Co. Project, Series A-7, AMT, 6.63%, 5/15/33

     11,460        11,532,198   

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

    

5.75%, 1/01/31

     1,000        1,168,770   

6.00%, 1/01/41

     4,300        5,002,577   

Gulf Coast Waste Disposal Authority, Refunding RB, Series A, AMT, 6.10%, 8/01/24

     4,000        4,015,280   

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

    

7.13%, 12/01/31

     3,500        4,470,270   

7.25%, 12/01/35

     5,400        6,708,420   

La Vernia Higher Education Finance Corp., RB, KIPP, Inc., 6.25%, 8/15/39

     925        1,076,811   

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

     3,600        3,944,484   

Matagorda County Navigation District No. 1 Texas, Refunding RB, CenterPoint Energy Project,
5.60%, 3/01/27 (e)

     9,355        9,754,459   

North Texas Education Finance Corporation, ERB, Uplift Education, Series A, 5.13%, 12/01/42

     1,000        1,077,040   

North Texas Tollway Authority, Refunding RB, First Tier, Series A, 6.25%, 1/01/39

     3,500        4,020,275   

 

See Notes to Financial Statements.

 

                
52    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniVest Fund, Inc. (MVF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)
    Value  

Texas (concluded)

    

San Antonio Public Facilities Corp., Refunding RB, 4.00%, 9/15/42

   $ 7,200      $ 7,323,552   

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

     5,000        6,040,950   

Tarrant County Cultural Education Facilities Finance Corp., Refunding RB, Scott & White Healthcare, 5.00%, 8/15/43 (f)

     1,145        1,274,213   

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

    

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

     10,000        12,131,900   

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

     4,710        5,618,559   

Texas Transportation Commission, Refunding RB, Central Texas Turnpike System, First Tier, Series A, 4.00%, 8/15/38

     9,375        9,389,531   
    

 

 

 
               94,839,942   

Utah — 0.8%

    

Utah Transit Authority, Refunding RB, Subordinated Sales Tax, 4.00%, 6/15/39

     5,000        5,156,650   

Vermont — 0.1%

    

Vermont Educational & Health Buildings Financing Agency, RB, Developmental & Mental Health,
Series A, 6.38%, 6/15/22

     420        426,350   

Virginia — 2.9%

    

City of Norfolk Virginia, Refunding RB, Series B (AMBAC), 5.50%, 2/01/31

     3,550        3,554,615   

City of Portsmouth Virginia, GO, Refunding, Series D, 5.00%, 7/15/34

     3,105        3,582,393   

Fairfax County EDA, Refunding RB Goodwin House, Inc.:

    

5.13%, 10/01/42

     6,015        6,227,149   

5.13%, 10/01/37

     2,000        2,076,460   

Virginia HDA, Refunding RB, Sub-Series A3, AMT, 5.05%, 7/01/26

     1,325        1,414,981   

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

     2,620        3,038,257   
    

 

 

 
               19,893,855   

Washington — 4.1%

    

Energy Northwest, Refunding RB, Series B, 7.13%, 7/01/16

     14,320        17,364,002   

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

     2,120        2,121,442   

Washington Health Care Facilities Authority, Refunding RB, Catholic Health Initiatives, Series D,
6.38%, 10/01/36

     7,000        8,508,990   
    

 

 

 
               27,994,434   

West Virginia — 0.4%

    

West Virginia Hospital Finance Authority, Refunding RB, Charleston, Series A, 5.63%, 9/01/32

     2,500        2,813,000   

Wisconsin — 0.5%

    

Wisconsin Health & Educational Facilities Authority, RB, SynergyHealth, Inc., 6.00%, 8/01/13 (a)

     3,040        3,114,814   
Municipal Bonds    Par  
(000)
    Value  

Wyoming — 0.7%

    

County of Sweetwater Wyoming, Refunding RB, Idaho Power Co. Project, 5.25%, 7/15/26

   $ 4,500      $ 5,112,135   
Total Municipal Bonds – 101.3%              694,694,036   
    
   
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
              

Arizona — 0.6%

    

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

     3,500        4,070,780   

California — 5.1%

    

Los Angeles Community College District California, GO, Refunding, Election of 2008, Series A,
6.00%, 8/01/33

     9,586        11,975,095   

University of California, RB, Series O, 5.25%, 5/15/39

     20,000        23,071,800   
    

 

 

 
               35,046,895   

Connecticut — 2.0%

    

Connecticut State Health & Educational Facility Authority, RB, Yale University, Series Z-3,
5.05%, 7/01/42

     12,000        13,792,680   

District of Columbia — 1.3%

    

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

     7,495        8,845,220   

Florida — 4.5%

    

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

     14,747        16,480,721   

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

     3,750        4,213,837   

Miami-Dade County Expressway Authority, Refunding RB, Series A (AGC), 5.00%, 7/01/35

     8,900        9,959,011   
    

 

 

 
               30,653,569   

Illinois — 4.0%

    

City of Chicago Illinois, Refunding RB:

    

Sales Tax, Series A, 5.00%, 1/01/41

     4,640        5,176,338   

Second Lien (AGM), 5.25%, 11/01/33

     1,330        1,542,759   

Illinois Finance Authority, RB, University of Chicago, Series B, 6.25%, 7/01/38

     10,000        12,400,300   

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

     6,999        7,991,736   
    

 

 

 
               27,111,133   

Kentucky — 4.8%

    

Kentucky Economic Development Finance Authority, Refunding RB, St. Elizabeth, Series A,
5.50%, 5/01/39

     8,003        8,983,090   

Kentucky Housing Corp., Refunding RB, Series L, AMT, 5.25%, 1/01/38

     4,650        4,876,781   

Lexington-Fayette Urban County Airport Board, Refunding RB, Series A, 5.00%, 7/01/27

     7,001        8,012,856   

Louisville & Jefferson County Metropolitan Government Parking Authority, RB, Series A,
5.38%, 12/01/39

     9,195        10,920,901   
    

 

 

 
               32,793,628   

Maryland — 0.8%

    

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

     4,710        5,313,728   

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    53


Table of Contents

Schedule of Investments (continued)

  

BlackRock MuniVest Fund, Inc. (MVF)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
   Par  
(000)
    Value  

Nevada — 2.8%

    

Clark County Water Reclamation District, GO, Series B, 5.75%, 7/01/34

   $ 15,789      $ 19,453,733   

New York — 7.9%

    

New York City Municipal Water Finance Authority, Refunding RB:

    

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

     4,154        4,918,866   

Water & Sewer System, Series DD, 5.00%, 6/15/37

     24,199        27,447,053   

New York City Transitional Finance Authority, RB, 5.00%, 2/01/42

     8,898        10,140,377   

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

     10,000        11,850,000   
    

 

 

 
               54,356,296   

North Carolina — 2.9%

    

North Carolina Capital Facilities Finance Agency, Refunding RB:

    

Duke University Project, Series A, 5.00%, 10/01/41

     12,678        14,165,304   

Wake Forest University, 5.00%, 1/01/38

     5,000        5,631,850   
    

 

 

 
               19,797,154   

Ohio — 3.5%

    

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

     2,870        3,208,832   

County of Montgomery Ohio, Refunding RB, Catholic Healthcare, Series A, 5.50%, 5/01/34

     5,470        6,222,125   

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

     4,400        4,899,532   

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

     8,500        9,713,715   
    

 

 

 
               24,044,204   

Oregon — 2.0%

    

Oregon State Housing & Community Services Department, HRB, Series A, AMT, 4.95%, 7/01/30

     13,000        13,892,574   

South Carolina — 0.4%

    

South Carolina State Housing Finance & Development Authority, Refunding RB, Series B-1,
5.55%, 7/01/39

     2,719        2,930,019   

Texas — 8.8%

    

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

     8,333        9,698,144   

Harris County Health Facilities Development Corp., Refunding RB, School Health Care System, Series B, 5.75%, 7/01/27 (d)

     20,970        28,128,319   
Municipal Bonds Transferred to
Tender Option Bond Trusts (g)
   Par  
(000)
    Value  

Texas (concluded)

    

Houston Higher Education Finance Corp., RB, Rice University Project, Series A, 5.00%, 5/15/40

   $ 10,000      $ 11,406,567   

Texas Department of Housing & Community Affairs, MRB, Series B, AMT (Ginnie Mae), 5.25%, 9/01/32

     4,746        4,995,674   

Texas State University Systems, Refunding RB (AGM), 5.00%, 3/15/30

     5,667        6,331,438   
    

 

 

 
               60,560,142   

Virginia — 2.5%

    

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

     2,099        2,414,446   

Virginia Commonwealth Transportation Board, RB, Capital Projects, 5.00%, 5/15/32

     8,001        9,400,143   

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

     5,002        5,520,480   
    

 

 

 
               17,335,069   

Washington — 4.2%

    

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

    

5.00%, 11/01/34

     5,000        5,695,650   

5.00%, 11/01/36

     6,000        6,834,780   

(AGM), 5.00%, 11/01/32

     14,007        15,936,216   
    

 

 

 
               28,466,646   

Wisconsin — 1.0%

    

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

     6,099        6,753,453   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 59.1%
        405,216,923   

Total Long-Term Investments

(Cost — $979,320,391) — 160.4%

  

  

    1,099,910,959   
    
                  
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.01% (i)(j)

     20,213,428        20,213,428   

Total Short-Term Securities

(Cost — $20,213,428) — 2.9%

  

  

    20,213,428   
Total Investments (Cost — $999,533,819) — 163.3%        1,120,124,387   
Other Assets Less Liabilities — 1.1%        7,651,810   

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (28.8)%

   

    (197,877,336
VMTP Shares, at Liquidation Value — (35.6)%        (243,800,000
    

 

 

 
Net Assets Applicable to Common Shareholders — 100.0%      $ 686,098,861   
 

 

 

 

 

Notes to Schedule of investments

 

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

 

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

 

(d)   Security is collateralized by Municipal or US Treasury obligations.
(e)   Variable rate security. Rate shown is as of report date.

 

See Notes to Financial Statements.

 

                
54    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents

Schedule of Investments (concluded)

  

BlackRock MuniVest Fund, Inc. (MVF)

 

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

 

Counterparty      Value        Unrealized
Appreciation
 

Goldman Sachs Group, Inc.

     $ 1,274,213         $ 9,836   

 

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

 

(h)   All or a portion of security is subject to a recourse agreement, which may require the 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 is $3,048,680.

 

(i)   Investments in issuers considered to be an affiliate of the Trust during the six months ended February 28, 2013, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:

 

Affiliate   Shares Held
at August 31,
2012
       Net
Activity
       Share Held
at February 28,
2013
       Income  

FFI Institutional Tax-Exempt Fund .

    6,562,755           13,650,673           20,213,428         $ 875   

 

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

 

Ÿ  

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

 

Ÿ  

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the 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. The categorization of a value determined for investments is based on the pricing transparency of the investment and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the Trust’s investments categorized in the disclosure hierarchy as of February 28, 2013:

 

     Level 1    Level 2    Level 3    Total

Assets:

                
Investments:                 

Long-Term Investments1

             $ 1,099,910,959           $ 1,099,910,959  

Short-Term Securities

    $ 20,213,428                      20,213,428  
   

 

 

      

 

 

      

 

 

      

 

 

 

Total

    $ 20,213,428        $ 1,099,910,959           $ 1,120,124,387  
   

 

 

      

 

 

      

 

 

      

 

 

 

 

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

    

 

Certain of the Trust’s liabilities are held at carrying amount, which approximates fair value for financial statement purposes. As of February 28, 2013, such liabilities are categorized within the disclosure hierarchy as follows:

 

   

     Level 1    Level 2    Level 3    Total

Liabilities:

                

Bank overdraft

             $ (482,195 )         $ (482,195 )

TOB trust certificates

               (197,793,067 )           (197,793,067 )

VRDP Shares

               (243,800,000 )           (243,800,000 )
   

 

 

      

 

 

      

 

 

      

 

 

 

Total

             $ (442,075,262 )         $ (442,075,262 )
   

 

 

      

 

 

      

 

 

      

 

 

 

There were no transfers between levels during the six months ended February 28, 2013.

 

See Notes to Financial Statements.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    55


Table of Contents
Statements of Assets and Liabilities     

 

February 28, 2013 (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)
    BlackRock
Municipal
Income Trust II
(BLE)
    BlackRock
MuniHoldings
Investment
Quality Fund
(MFL)
    BlackRock
MuniVest
Fund, Inc.
(MVF)
 
             
Assets                                                        

Investments at value - unaffiliated1

  $ 93,191,956      $ 278,402,195      $ 227,783,515      $ 672,361,122      $ 618,433,031      $ 1,006,591,137      $ 1,099,910,959   

Investments at value - affiliated2

    1,154,435        3,101,522        637,888        8,659,864        4,716,948        12,331,647        20,213,428   

Cash

           122,644                      259,625                 

Cash pledged as collateral for financial futures contracts

           66,000                                      

Interest receivable

    952,725        2,843,060        2,422,703        6,411,472        6,845,736        11,591,049        13,544,646   

Investments sold receivable

    101,696        95,719        254,239        1,523,345               10,647,470        108,000   

Deferred offering costs

    160,954        107,863        88,117        146,519        156,275        475,075        235,781   

TOB trust receivable

           4,500,000               4,665,000                        

Prepaid expenses

    36,579        7,381        6,273        18,357        20,702        55,043        21,657   
 

 

 

 

Total assets

    95,598,345        289,246,384        231,192,735        693,785,679        630,432,317        1,041,691,421        1,134,034,471   
 

 

 

 
             
Accrued Liabilities                                                        

Bank overdraft

                                       443,146        482,195   

Investments purchased payable

    1,135,906        9,148,898        2,131,113        8,416,746        2,656,779        18,497,544        1,264,378   

Income dividends payable — Common Shares

    260,417        877,515        599,335        2,059,689        1,991,167        2,892,295        3,766,501   

Investment advisory fees payable

    41,076        136,453        96,187        285,621        263,154        429,204        431,291   

Officer’s and Trustees’ fees payable

    7,985        27,494        19,001        58,909        53,548        169,699        143,740   

Interest expense and fees payable

    7,569        6,276        19,553        42,357        39,293        71,411        84,269   

Variation margin payable

           3,163                                      

Other accrued expenses payable

    13,319        62,602        60,151        121,185        97,835        352,276        170,169   
 

 

 

 

Total accrued liabilities

    1,466,272        10,262,401        2,925,340        10,984,507        5,101,776        22,855,575        6,342,543   
 

 

 

 
             
Other Liabilities                                                        

TOB trust certificates

    19,340,052        20,608,872        39,996,660        117,377,482        93,381,521        134,552,822        197,793,067   

VRDP Shares, at liquidation value of $100,000 per share3,4

    17,800,000                                    274,600,000          

VMTP Shares, at liquidation value of $100, 000 per share3,4

           79,900,000        42,200,000        137,200,000        151,300,000               243,800,000   
 

 

 

 

Total other liabilities

    37,140,052        100,508,872        82,196,660        254,577,482        244,681,521        409,152,822        441,593,067   
 

 

 

 

Total liabilities

    38,606,324        110,771,273        85,122,000        265,561,989        249,783,297        432,008,397        447,935,610   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 56,992,021      $ 178,475,111      $ 146,070,735      $ 428,223,690      $ 380,649,020      $ 609,683,024      $ 686,098,861   
 

 

 

 
             
Net Assets Applicable to Common Shareholders Consist of   

Paid-in capital5,6,7

  $ 47,292,251      $ 149,453,805      $ 124,132,737      $ 374,839,871      $ 332,425,167      $ 525,957,690      $ 580,398,778   

Undistributed net investment income

    682,165        2,802,295        1,415,473        6,197,240        6,411,182        6,586,094        12,558,048   

Undistributed net realized gain (accumulated net realized loss)

    (1,442,043     921,345        117,822        (16,083,633     (11,286,680     (13,372,754     (27,448,533

Net unrealized appreciation/ depreciation

    10,459,648        25,297,666        20,404,703        63,270,212        53,099,351        90,511,994        120,590,568   
 

 

 

 

Net Assets Applicable to Common Shareholders

  $ 56,992,021      $ 178,475,111      $ 146,070,735      $ 428,223,690      $ 380,649,020      $ 609,683,024      $ 686 098,861   
 

 

 

 

Net asset value per Common Share

  $ 17.07      $ 16.98      $ 16.69      $ 16.22      $ 16.25      $ 16.13      $ 10.75   
 

 

 

 

1 Investments at cost — unaffiliated

  $ 82,732,308      $ 253,103,120      $ 207,378,812      $ 609,090,910      $ 565,333,680      $ 916,079,143      $ 979,320,391   

2 Investments at cost — affiliated

  $ 1,154,435      $ 3,101,522      $ 637,888      $ 8,659,864      $ 4,716,948      $ 12,331,647      $ 20,213,428   

3 VRDP/VMTP Shares outstanding:

             

Par value $0.001 per share

    178        799        422        1,372        1,513                 

Par value $0.10 per share

                                       2,746        2,438   

4 Preferred Shares authorized, including Auction Market Preferred Shares (“AMPS”)

    unlimited        unlimited        unlimited        unlimited        unlimited        1 million        10 million   

5 Common Shares outstanding

    3,338,684        10,509,162        8,749,418        26,406,273        23,425,489        37,807,776        63,838,996   

6 Par value per Common Share

  $ 0.001      $ 0.001      $ 0.001      $ 0.001      $ 0.001      $ 0.10      $ 0.10   

7 Common Shares authorized

    unlimited        unlimited        unlimited        unlimited        unlimited        unlimited        150 million   

 

 

 

See Notes to Financial Statements.      
                
56    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
Statements of Operations     

 

Six Months Ended February 28, 2013 (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)
    BlackRock
Municipal
Income Trust II
(BLE)
    BlackRock
MuniHoldings
Investment
Quality Fund
(MFL)
    BlackRock
MuniVest
Fund, Inc.
(MVF)
 
             
Investment Income                                                        

Interest

  $   2,037,411      $   6,576,022      $   4,621,882      $ 15,107,567      $ 14,268,064      $ 21,231,019      $ 26,671,121   

Income — affiliated

    94        340        176        412        467        1,163        875   
 

 

 

 

Total income

    2,037,505        6,576,362        4,622,058        15,107,979        14,268,531        21,232,182        26,671,996   
 

 

 

 
             
Expenses                                                        

Investment advisory

    302,211        882,320        619,203        1,837,237        1,699,745        2,778,011        2,798,181   

Liquidity fees

    77,553                                    970,835          

Professional

    37,132        37,641        38,982        47,372        43,993        57,661        58,504   

Accounting services

    13,257        29,756        24,706        36,989        37,963        73,602        80,370   

Officer and Trustees

    4,068        12,797        10,397        25,038        21,094        41,329        50,446   

Remarketing fees on Preferred Shares

    8,948                                    136,172          

Transfer agent

    9,619        11,013        12,497        14,795        13,993        21,130        28,752   

Custodian

    5,148        9,649        7,120        16,076        15,666        21,446        21,128   

Printing

    5,340        7,400        5,676        7,435        7,728        7,281        7,715   

Registration

    4,521        4,702        4,513        4,694        5,064        6,291        13,847   

Miscellaneous

    17,154        16,289        15,171        23,700        21,586        28,536        33,599   
 

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    484,951        1,011,567        738,265        2,013,336        1,866,832        4,142,294        3,092,542   

Interest expense, fees and amortization of offering costs1

    100,545        579,546        406,947        1,202,505        1,240,684        1,001,940        2,156,809   
 

 

 

 

Total expenses

    585,496        1,591,113        1,145,212        3,215,841        3,107,516        5,144,234        5,249,351   

Less fees waived by Manager

    (37,525     (958     (601     (1,376     (1,807     (216,352     (3,131
 

 

 

 

Total expenses after fees waived

    547,971        1,590,155        1,144,611        3,214,465        3,105,709        4,927,882        5,246,220   
 

 

 

 

Net investment income

    1,489,534        4,986,207        3,477,447        11,893,514        11,162,822        16,304,300        21,425,776   
 

 

 

 
             
Realized and Unrealized Gain (Loss)                                                        
Net realized gain (loss) from:              

Investments

    379,657        1,937,176        1,133,141        1,991,507        1,465,382        8,549,746        1,382,536   

Financial futures contracts

           (44,756            (162,937                     
 

 

 

 
    379,657        1,892,420        1,133,141        1,828,570        1,465,382        8,549,746        1,382,536   
 

 

 

 
Net change in unrealized appreciation/depreciation on:              

Investments

    348,347        1,896,111        462,452        1,570,696        3,004,254        (1,349,260     4,281,790   

Financial futures contracts

           (1,409                                   
 

 

 

 
    348,347        1,894,702        462,452        1,570,696        3,004,254        (1,349,260     4,281,790   
 

 

 

 

Total realized and unrealized gain

    728,004        3,787,122        1,595,593        3,399,266        4,469,636        7,200,486        5,664,326   
 

 

 

 

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

  $ 2,217,538      $ 8,773,329      $ 5,073,040      $ 15,292,780      $ 15,632,458      $ 23,504,786      $ 27,090,102   
 

 

 

 

1 Related to TOBs, VRDP Shares and/or VMTP Shares.

  

           

 

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    57


Table of Contents
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,
2013
(Unaudited)
    Year Ended
August 31,
2012
        Six Months Ended
February 28,
2013
(Unaudited)
    Year Ended
August 31,
2012
 
         
Operations                                    

Net investment income

  $ 1,489,534      $ 3,054,451        $ 4,986,207      $ 10,548,583   

Net realized gain

    379,657        1,321,542          1,892,420        3,355,408   

Net change in unrealized appreciation/depreciation

    348,347        6,218,132          1,894,702        21,519,646   

Dividends to AMPS shareholders from net investment income

           (4,325              (62,496
 

 

 

     

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    2,217,538        10,589,800          8,773,329        35,361,141   
 

 

 

     

 

 

 
         
Dividends and Distributions to Common Shareholders From                                    

Net investment income

    (1,572,333     (3,243,174 )1        (5,285,104     (11,124,545 )1 

Net realized gain

                    (1,455,701       
 

 

 

     

 

 

 

Decrease in net assets resulting from dividend and distributions to shareholders

    (1,572,333     (3,243,174       (6,740,805     (11,124,545
 

 

 

     

 

 

 
         
Capital Share Transactions                                    

Reinvestment of common dividends

    16,132        42,858          227,002        507,794   
 

 

 

     

 

 

 
         
Net Assets Applicable to Common Shareholders                                    

Total increase in net assets applicable to Common Shareholders

    661,337        7,389,484          2,259,526        24,744,390   

Beginning of period

    56,330,684        48,941,200          176,215,585        151,471,195   
 

 

 

     

 

 

 

End of period

  $ 56,992,021      $ 56,330,684        $ 178,475,111      $ 176,215,585   
 

 

 

     

 

 

 

Undistributed net investment income

  $ 682,165      $ 764,964        $ 2,802,295      $ 3,101,192   
 

 

 

     

 

 

 

 

    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,
2013
(Unaudited)
   

Year Ended

August 31,
2012

        Six Months Ended
February 28,
2013
(Unaudited)
   

Year Ended

August 31,
2012

 
         
Operations                                    

Net investment income

  $ 3,477,447      $ 7,237,075        $ 11,893,514      $ 24,473,199   

Net realized gain

    1,133,141        5,422,236          1,828,570        (64,308

Net change in unrealized appreciation/depreciation

    462,452        12,870,664          1,570,696        53,327,603   

Dividends to AMPS shareholders from net investment income

           (33,384              (107,278
 

 

 

     

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    5,073,040        25,496,591          15,292,780        77,629,216   
 

 

 

     

 

 

 
         
Dividends to Common Shareholders From                                    

Net investment income

    (3,630,591     (7,765,376 )2        (12,352,227     (24,509,724 )2 
 

 

 

     

 

 

 
         
Capital Share Transactions                                    

Reinvestment of common dividends

    41,052        73,423          498,569        650,769   
 

 

 

     

 

 

 
         
Net Assets Applicable to Common Shareholders                                    

Total increase in net assets applicable to Common Shareholders

    1,483,501        17,804,638          3,439,122        53,770,261   

Beginning of period

    144,587,234        126,782,596          424,784,568        371,014,307   
 

 

 

     

 

 

 

End of period

  $ 146,070,735      $ 144,587,234        $ 428,223,690      $ 424,784,568   
 

 

 

     

 

 

 

Undistributed net investment income

  $ 1,415,473      $ 1,568,617        $ 6,197,240      $ 6,655,953   
 

 

 

     

 

 

 

1 Dividends and distributions are determined in accordance with federal income tax regulations.

  

       

2 Dividends are determined in accordance with federal income tax regulations.

         

 

 

See Notes to Financial Statements.      
                
58    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
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,
2013
(Unaudited)

   

Year Ended

August 31,
2012

        Six Months Ended
February 28,
2013
(Unaudited)
   

Year Ended

August 31,
2012

 
         
Operations                                    

Net investment income

  $ 11,162,822      $ 23,750,159        $ 16,304,300      $ 32,635,541   

Net realized gain

    1,465,382        5,292,283          8,549,746        20,616,300   

Net change in unrealized appreciation/depreciation

    3,004,254        44,778,410          (1,349,260     55,301,830   

Dividends to AMPS shareholders from net investment income

           (117,936                
 

 

 

     

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations

    15,632,458        73,702,916          23,504,786        108,553,671   
 

 

 

     

 

 

 
         
Dividends to Shareholders From                                    

Net investment income

    (12,143,390     (23,633,307 )1        (17,345,280     (34,641,859 )1 
 

 

 

     

 

 

 
         
Capital Share Transactions                                    

Reinvestment of common dividends

    385,589        991,824          743,537        695,306   
 

 

 

     

 

 

 
         
Net Assets Applicable to Common Shareholders                                    

Total increase in net assets applicable to Common Shareholders

    3,874,657        51,061,433          6,903,043        74,607,118   

Beginning of period

    376,774,363        325,712,930          602,779,981        528,172,863   
 

 

 

     

 

 

 

End of period

  $ 380,649,020      $ 376,774,363        $ 609,683,024      $ 602,779,981   
 

 

 

     

 

 

 

Undistributed net investment income

  $ 6,411,182      $ 7,391,750        $ 6,586,094      $ 7,627,074   
 

 

 

     

 

 

 

 

    BlackRock MuniVest
Fund, Inc. (MVF)
 
Increase (Decrease) in Net Assets Applicable to Common Shareholders:   Six Months Ended
February 28,
2013
(Unaudited)
   

Year Ended

August 31,
2012

 
   
Operations                

Net investment income

  $ 21,425,776      $ 43,656,881   

Net realized gain (loss)

    1,382,536        (673,453

Net change in unrealized appreciation/depreciation

    4,281,790        73,804,188   

Dividends to AMPS shareholders from net investment income

           (329,136
 

 

 

 

Net increase in net assets applicable to Common Shareholders resulting from operations:

    27,090,102        116,458,480   
 

 

 

 
   
Dividends to Common Shareholders From                

Net investment income

    (22,567,336     (44,898,307 )1 
 

 

 

 
   
Capital Share Transactions                

Reinvestment of common dividends

    2,368,807        5,413,084   
 

 

 

 
   
Net Assets Applicable to Common Shareholders                

Total increase in net assets applicable to Common Shareholders

    6,891,573        76,973,257   

Beginning of period

    679,207,288        602,234,031   
 

 

 

 

End of period

  $ 686,098,861      $ 679,207,288   
 

 

 

 

Undistributed net investment income

  $ 12,558,048      $ 13,699,608   
 

 

 

 

1 Dividends are determined in accordance with federal income tax regulations.

   

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    59


Table of Contents
Statements of Cash Flows     

 

 

Six Months Ended February 28, 2013 (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)
    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

  $ 2,217,538      $ 8,773,329      $ 5,073,040      $ 15,292,780      $ 15,632,458      $ 23,504,786      $ 27,090,102   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:

             

(Increase) decrease in interest receivable

    (98,647     101,129        (305,880     (265,662     (213,337     (924,435     241,059   

Increase in cash pledged as collateral for financial futures contracts

           (66,000                                   

Increase in prepaid expenses

    (34,662     (1,559     (1,561     (3,999     (5,653     (44,192     (9,752

Increase (decrease) in investment advisory fees payable

    (3,489     (11,627     (7,311     (24,263     (21,614     38        (43,005

Increase (decrease) in interest expense and fees payable

    996        1,015        5,353        (2,486     (2,621     16,449        (6,702

Increase (decrease) in other accrued expenses payable

    (26,485     (6,821     (2,563     (15,774     (15,434     (26,606     34,081   

Increase (decrease) in Officer’s and Trustees’ fees payable

    1,404        2,944        3,660        (1,199     (2,581     25,262        3,521   

Increase in variation margin payable

           3,163                                      

Net realized and unrealized gain on investments

    (728,004     (3,833,287     (1,595,593     (3,562,203     (4,469,636     (7,200,486     (5,664,326

Amortization of premium and accretion of discount on investments

    150,925        (883,001     503,022        (1,385,404     (445,918     2,005,883        767,624   

Amortization of deferred offering costs

    6,647        28,093        23,445        37,545        45,042        2,223        59,921   

Proceeds from sales of long-term investments

    8,201,539        60,802,930        26,444,650        66,826,533        57,830,151        161,970,000        63,798,285   

Purchases of long-term investments

    (8,451,664     (58,561,998     (30,486,382     (68,047,433     (66,212,921     (155,157,360     (51,450,068

Net proceeds from sales (purchases) of short-term securities

    (994,758     (2,517,915     470,516        (4,255,408     5,391,526        (11,244,215     (13,650,673
 

 

 

 

Cash provided by operating activities

    241,340        3,830,395        124,396        4,593,027        7,509,462        12,927,347        21,170,067   
 

 

 

 
             
Cash Used for Financing Activities                                                        

Cash receipts from TOB trust certificates

    754,980        2,804,936        3,499,965        13,591,192        7,040,590        3,730,122          

Cash payments for TOB trust certificates

                         (6,332,957     (2,534,633     (500,000     (1,463,379

Cash dividends paid to Common Shareholders

    (1,566,142     (6,512,687     (3,624,361     (11,851,262     (11,755,794     (16,598,229     (20,185,678

Increase in bank overdraft

                                       440,760        478,990   
 

 

 

 

Cash used for financing activities

    (811,162     (3,707,751     (124,396     (4,593,027     (7,249,837     (12,927,347     (21,170,067
 

 

 

 
             
Cash                                                        

Net increase (decrease) in cash

    (569,822     122,644                      259,625                 

Cash at beginning of period

    569,822                                             
 

 

 

 

Cash at end of period

         $ 122,644                    $ 259,625                 
 

 

 

 
             
Cash Flow Information                                                        

Cash paid during the period for interest and fees

  $ 92,902      $ 493,239      $ 377,362      $ 1,164,886      $ 1,202,100      $ 977,231      $ 2,099,040   
 

 

 

 
             
Non-cash Financing Activities                                                        

Capital shares issued in reinvestment of dividends paid to Common Shareholders

  $ 16,132      $ 227,002      $ 41,052      $ 498,569      $ 385,589      $ 743,537      $ 2,368,807   
 

 

 

 

 

 

See Notes to Financial Statements.      
                
60    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
Financial Highlights    BlackRock Municipal Bond Investment Trust (BIE)

 

   

Six Months Ended
February 28,
2013

(Unaudited)

    Year Ended August 31,  
      2012     2011     2010     2009     2008  
           
Per Share Operating Performance                                   

Net asset value, beginning of period

  $ 16.88      $ 14.67      $ 15.51      $ 14.16      $ 14.86      $ 15.45   
 

 

 

 

Net investment income1

    0.45        0.92        1.03        1.02        1.03        1.16   

Net realized and unrealized gain (loss)

    0.21        2.26        (0.89     1.27        (0.76     (0.51

Dividends to AMPS shareholders from net investment income

           (0.00 )2      (0.02     (0.02     (0.13     (0.30
 

 

 

 

Net increase from investment operations

    0.66        3.18        0.12        2.27        0.14        0.35   
 

 

 

 

Dividends to Common Shareholders from net investment income

    (0.47     (0.97 )3      (0.96 )3      (0.92 )3      (0.84 )3      (0.94 )3 
 

 

 

 

Net asset value, end of period

  $ 17.07      $ 16.88      $ 14.67      $ 15.51      $ 14.16      $ 14.86   
 

 

 

 

Market price, end of period

  $ 16.83      $ 16.61      $ 14.22      $ 15.60      $ 13.20      $ 14.28   
 

 

 

 
           
Total Investment Return Applicable to Common Shareholders4                                   

Based on net asset value

    3.94% 5      22.36%        1.29%        16.80%        2.43%        2.34%   
 

 

 

 

Based on market price

    4.15% 5      24.21%        (2.38 )%      26.02%        (0.64 )%      (3.95 )% 
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                   

Total expenses

    2.07% 6      2.21% 7      1.81% 7      1.57% 7      1.71% 7      1.54% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.93% 6      2.12% 7      1.66% 7      1.35% 7      1.36% 7      1.13% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs8

    1.58% 6,9      1.72% 7,9      1.39% 7      1.15% 7      1.25% 7      1.09% 7 
 

 

 

 

Net investment income

    5.26% 6      5.78% 7      7.25% 7      6.92% 7      7.98% 7      7.52% 7 
 

 

 

 

Dividends to AMPS shareholders

           0.01%        0.13%        0.15%        1.01%        1.99%   
 

 

 

 

Net investment income to Common Shareholders

    5.26% 6      5.77%        7.12%        6.77%        6.97%        5.53%   
 

 

 

 
           
Supplemental Data                                   

Net assets applicable to Common Shareholders, end of period (000)

  $ 56,992      $ 56,331      $ 48,941      $ 51,708      $ 47,203      $ 49,532   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                $ 17,850      $ 17,850      $ 17,850      $ 26,175   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 17,800      $ 17,800                               
 

 

 

 

Portfolio turnover

    9%        36%        25%        47%        71%        30%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                $ 93,546      $ 97,421      $ 91,112      $ 72,318   
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of period

  $ 420,180      $ 416,465                               
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Amount is greater than $(0.005) per share.

 

3   

Dividends are determined in accordance with federal income tax regulations.

 

4   

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

5   

Aggregate total investment return.

 

6   

Annualized.

 

7   

Do not reflect the effect of dividends to AMPS shareholders.

 

8   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.

 

9   

For the six months ended February 28, 2013 and 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 1.27% and 1.42%, respectively.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    61


Table of Contents
Financial Highlights    BlackRock Municipal Bond Trust (BBK)

 

    Six Months Ended
February 28,
2013
(Unaudited)
    Year Ended August 31,  
      2012     2011     2010     2009     2008  
           
Per Share Operating Performance                                   

Net asset value, beginning of period

  $ 16.79      $ 14.48      $ 15.29      $ 13.23      $ 13.96      $ 15.57   
 

 

 

 

Net investment income1

    0.48        1.01        1.14        1.14        1.14        1.23   

Net realized and unrealized gain (loss)

    0.36        2.37        (0.87     1.97        (0.83     (1.48
Dividends and distributions to AMPS shareholders from:            

Net investment income

    (0.01     (0.01     (0.03     (0.03     (0.13     (0.28

Net realized gain

                                       (0.03
 

 

 

 

Net increase (decrease) from investment operations

    0.83        3.37        0.24        3.08        0.18        (0.56
 

 

 

 
Dividends and distributions to Common Shareholders from:            

Net investment income

    (0.50     (1.06 )2      (1.05 )2      (1.02 )2      (0.91 )2      (0.95 )2 

Net realized gain

    (0.14                                 (0.10 )2 
 

 

 

 

Total dividends and distributions to Common Shareholders

    (0.64     (1.06     (1.05     (1.02     (0.91     (1.05
 

 

 

 

Net asset value, end of period

  $ 16.98      $ 16.79      $ 14.48      $ 15.29      $ 13.23      $ 13.96   
 

 

 

 

Market price, end of period

  $ 17.35      $ 17.16      $ 14.86      $ 15.79      $ 13.80      $ 13.89   
 

 

 

 
           
Total Investment Return Applicable to Common Shareholders3                                   

Based on net asset value

    5.01% 4      23.96%        2.02%        24.13%        2.52%        (3.77)%   
 

 

 

 

Based on market price

    4.98% 4      23.45%        1.38%        22.90%        7.48%        (9.65)%   
 

 

 

 
           
Ratio to Average Net Assets Applicable to Common Shareholders                                   

Total expenses

    1.80% 5      1.69% 6      1.33% 6      1.29% 6      1.51% 6      1.39% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.80% 5      1.64% 6      1.19% 6      1.08% 6      1.19% 6      1.01% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    1.14% 5      1.18% 6,8      1.16% 6      1.05% 6      1.10% 6      0.98% 6 
 

 

 

 

Net investment income

    5.69% 5      6.39% 6      8.15% 6      8.08% 6      9.67% 6      8.25% 6 
 

 

 

 

Dividends to AMPS shareholders

           0.04%        0.19%        0.22%        1.11%        1.87%   
 

 

 

 

Net investment income to Common Shareholders

    5.69% 5      6.35%        7.96%        7.86%        8.56%        6.38%   
 

 

 

 
           
Supplemental Data                                   

Net assets applicable to Common Shareholders, end of period (000)

  $ 178,475      $ 176,216      $ 151,471      $ 159,216      $ 137,030      $ 144,116   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of year (000)

                $ 79,900      $ 79,900      $ 79,900      $ 80,500   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 79,900      $ 79,900                               
 

 

 

 

Portfolio turnover

    20%        46%        27%        51%        46%        27%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                $ 72,394      $ 74,819      $ 67,877      $ 69,766   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 323,373      $ 320,545                               
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Dividends and distributions are determined in accordance with federal income tax regulations.

 

3   

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

4   

Aggregate total investment return.

 

5   

Annualized.

 

6   

Do not reflect the effect of dividends to AMPS shareholders.

 

7   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

8   

For the year ended 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.      
                
62    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
Financial Highlights    BlackRock Municipal Income Investment Quality Trust (BAF)

 

    Six Months Ended
February 28,
2013
(Unaudited)
    Year Ended August 31,  
      2012     2011     2010     2009     2008  
           
Per Share Operating Performance                                   

Net asset value, beginning of period

  $ 16.53      $ 14.50      $ 15.08      $ 14.06      $ 14.23      $ 14.68   
 

 

 

 

Net investment income1

    0.40        0.83        0.91        0.94        0.91        0.99   

Net realized and unrealized gain (loss)

    0.18        2.09        (0.58     0.95        (0.27     (0.46

Dividends to AMPS shareholders from net investment income

           (0.00 )2      (0.02     (0.02     (0.09     (0.28
 

 

 

 

Net increase from investment operations

    0.58        2.92        0.31        1.87        0.55        0.25   
 

 

 

 

Dividends to Common Shareholders from net investment income

    (0.42     (0.89 )3      (0.89 )3      (0.85 )3      (0.72 )3      (0.70 )3 
 

 

 

 

Net asset value, end of period

  $ 16.69      $ 16.53      $ 14.50      $ 15.08      $ 14.06      $ 14.23   
 

 

 

 

Market price, end of period

  $ 16.29      $ 16.24      $ 13.92      $ 15.64      $ 13.01      $ 12.42   
 

 

 

 
           
Total Investment Return Applicable to Common Shareholders4                                   

Based on net asset value

    3.50% 5      20.76%        2.62%        13.93%        5.36%        2.22%   
 

 

 

 

Based on market price

    2.83% 5      23.59%        (5.01 )%      27.70%        11.70%        (3.35 )% 
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                   

Total expenses

    1.58% 6      1.49% 7      1.25% 7      1.23% 7      1.60% 7      1.33% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.57% 6      1.49% 7      1.23% 7      1.14% 7      1.40% 7      1.05% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering cost8

    1.01% 6      1.06% 7,9      1.09% 7      0.97% 7      0.98% 7      0.91% 7 
 

 

 

 

Net investment income

    4.78% 6      5.31% 7      6.51% 7      6.54% 7      7.04% 7      6.71% 7 
 

 

 

 

Dividends to AMPS shareholders

           0.02%        0.12%        0.14%        0.66%        1.92%   
 

 

 

 

Net investment income to Common Shareholders

    4.78% 6      5.29%        6.39%        6.40%        6.38%        4.79%   
 

 

 

 
           
Supplemental Data                                   

Net assets applicable to Common Shareholders, end of period (000)

  $ 146,071      $ 144,587      $ 126,783      $ 131,772      $ 122,825      $ 124,305   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                $ 42,275      $ 42,275      $ 42,275      $ 44,375   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 42,200      $ 42,200                               
 

 

 

 

Portfolio turnover

    12%        51%        33%        26%        45%        29%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                $ 99,975      $ 102,926      $ 97,637      $ 95,044   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 446,139      $ 442,624                               
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Amount is greater than $(0.005) per share.

 

3   

Dividends are determined in accordance with federal income tax regulations.

 

4   

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

5   

Aggregate total investment return.

 

6   

Annualized.

 

7   

Do not reflect the effect of dividends to AMPS shareholders.

 

8   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

9   

For the year ended August 31, 2012, the total expense ratios after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees was 1.05%.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    63


Table of Contents
Financial Highlights    BlackRock Municipal Income Quality Trust (BYM)

 

    Six Months Ended
February 28,
2013
(Unaudited)
    Year Ended August 31,  
      2012     2011     2010     2009     2008  
           
Per Share Operating Performance                                   

Net asset value, beginning of period

  $ 16.11      $ 14.09      $ 14.64      $ 13.55      $ 14.04      $ 14.82   
 

 

 

 

Net investment income1

    0.45        0.93        0.97        0.96        0.91        1.04   

Net realized and unrealized gain (loss)

    0.13        2.02        (0.58     1.00        (0.55     (0.83

Dividends to AMPS shareholders from net investment income

           (0.00 )2      (0.02     (0.02     (0.10     (0.26
 

 

 

 

Net increase (decrease) from investment operations

    0.58        2.95        0.37        1.94        0.26        (0.05
 

 

 

 

Dividends to Common Shareholders from net investment income

    (0.47     (0.93 )3      (0.92 )3      (0.85 )3      (0.75 )3      (0.73 )3 
 

 

 

 

Net asset value, end of period

  $ 16.22      $ 16.11      $ 14.09      $ 14.64      $ 13.55      $ 14.04   
 

 

 

 

Market price, end of period

  $ 16.04      $ 16.73      $ 13.85      $ 15.26      $ 13.69      $ 13.19   
 

 

 

 
           
Total Investment Return Applicable to Common Shareholders4                                   

Based on net asset value

    3.62% 5      21.54%        3.09%        14.74%        2.83%        (0.16 )% 
 

 

 

 

Based on market price

    (1.32)% 5      28.40%        (2.79 )%      18.42%        10.58%        (3.13 )% 
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                   

Total expenses

    1.52% 6      1.46% 7      1.25% 7      1.15% 7      1.38% 7      1.24% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.51% 6      1.46% 7      1.24% 7      1.06% 7      1.20% 7      0.98% 7 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs8

    0.95% 6      1.00% 7,9      1.07% 7      0.92% 7      0.93% 7      0.86% 7 
 

 

 

 

Net investment income

    5.60% 6      6.12% 7      7.15% 7      6.85% 7      7.23% 7      7.08% 7 
 

 

 

 

Dividends to AMPS shareholders

           0.03%        0.14%        0.15%        0.76%        1.80%   
 

 

 

 

Net investment income to Common Shareholders

    5.60% 6      6.09%        7.01%        6.70%        6.47%        5.28%   
 

 

 

 
           
Supplemental Data                                   

Net assets applicable to Common Shareholders, end of period (000)

  $ 428,224      $ 424,785      $ 371,014      $ 384,563      $ 355,334      $ 368,133   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                $ 137,250      $ 137,250      $ 137,250      $ 149,925   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 137,200      $ 137,200                               
 

 

 

 

Portfolio turnover

    11%        17%        19%        13%        18%        39%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                $ 92,580      $ 95,049      $ 89,725      $ 86,398   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 412,116      $ 409,610                               
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Amount is greater than $(0.005) per share.

 

3   

Dividends are determined in accordance with federal income tax regulations.

 

4   

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

5   

Aggregate total investment return.

 

6   

Annualized.

 

7   

Do not reflect the effect of dividends to AMPS shareholders.

 

8   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs 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 cost, liquidity and remarketing fees was 0.99%.

 

 

See Notes to Financial Statements.      
                
64    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
Financial Highlights    BlackRock Municipal Income Trust II (BLE)

 

    Six Months Ended
February 28,
2013
(Unaudited)
    Year Ended August 31,  
      2012     2011     2010     2009     2008  
           
Per Share Operating Performance                                   

Net asset value, beginning of period

  $ 16.10      $ 13.96      $ 14.63      $ 12.78      $ 13.60      $ 15.08   
 

 

 

 

Net investment income1

    0.48        1.02        1.08        1.08        1.09        1.17   

Net realized and unrealized gain (loss)

    0.19        2.14        (0.73     1.77        (0.95     (1.50

Dividends to AMPS shareholders from net investment income

           (0.01     (0.02     (0.03     (0.12     (0.30
 

 

 

 

Net increase (decrease) from investment operations

    0.67        3.15        0.33        2.82        0.02        (0.63
 

 

 

 

Dividends to Common Shareholders from net investment income

    (0.52     (1.01 )2      (1.00 )2      (0.97 )2      (0.84 )2      (0.85 )2 
 

 

 

 

Net asset value, end of period

  $ 16.25      $ 16.10      $ 13.96      $ 14.63      $ 12.78      $ 13.60   
 

 

 

 

Market price, end of period

  $ 16.59      $ 16.74      $ 14.13      $ 15.22      $ 13.45      $ 13.27   
 

 

 

 
           
Total Investment Return Applicable to Common Shareholders3                                   

Based on net asset value

    4.17% 4      23.25%        2.70%        22.83%        1.54%        (4.15 )% 
 

 

 

 

Based on market price

    2.29% 4      26.61%        (0.07 )%      21.42%        9.52%        (6.29 )% 
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                   

Total expenses

    1.65% 5      1.55% 6      1.18% 6      1.16% 6      1.36% 6      1.24% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.64% 5      1.48% 6      1.10% 6      1.08% 6      1.19% 6      1.07% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    0.99% 5      0.96% 6,8      1.01% 6      0.99% 6      1.05% 6      1.00% 6 
 

 

 

 

Net investment income

    5.91% 5      6.74% 6      7.94% 6      7.89% 6      9.69% 6      8.09% 6 
 

 

 

 

Dividends to AMPS shareholders

           0.03%        0.17%        0.20%        1.07%        2.04%   
 

 

 

 

Net investment income to Common Shareholders

    5.91% 5      6.71%        7.77%        7.69%        8.62%        6.05%   
 

 

 

 
           
Supplemental Data                                   

Net assets applicable to Common Shareholders, end of period (000)

  $ 380,649      $ 376,774      $ 325,713      $ 340,269      $ 296,070      $ 314,889   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                $ 151,300      $ 151,300      $ 151,300      $ 166,050   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 151,300      $ 151,300                               
 

 

 

 

Portfolio turnover

    6%        24%        16%        29%        19%        21%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                $ 78,819      $ 81,226      $ 73,923      $ 72,419   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 351,586      $ 349,025                               
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Dividends are determined in accordance with federal income tax regulations.

 

3   

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

4   

Aggregate total investment return.

 

5   

Annualized.

 

6   

Do not reflect the effect of dividends to AMPS shareholders.

 

7   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VMTP Shares, respectively.

 

8   

For the year ended 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 0.94%.

 

See Notes to Financial Statements.      
                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    65


Table of Contents
Financial Highlights    BlackRock MuniHoldings Investment Quality Fund (MFL)

 

    Six Months Ended
February 28,
2013
(Unaudited)
    Year Ended August 31,  
      2012     2011     2010     2009     2008  
           
Per Share Operating Performance                                   

Net asset value, beginning of period

  $ 15.96      $ 14.00      $ 14.69      $ 13.57      $ 13.50      $ 14.09   
 

 

 

 

Net investment income1

    0.43        0.86        0.95        0.96        0.94        1.01   

Net realized and unrealized gain (loss)

    0.20        2.02        (0.71     1.04        (0.03     (0.61

Dividends to AMPS shareholders from net investment income

                  (0.02     (0.03     (0.13     (0.32
 

 

 

 

Net increase from investment operations

    0.63        2.88        0.22        1.97        0.78        0.08   
 

 

 

 

Dividends to Common Shareholders from net investment income

    (0.46     (0.92 )2      (0.91 )2      (0.85 )2      (0.71 )2      (0.67 )2 
 

 

 

 

Net asset value, end of period

  $ 16.13      $ 15.96      $ 14.00      $ 14.69      $ 13.57      $ 13.50   
 

 

 

 

Market price, end of period

  $ 15.70      $ 16.13      $ 13.84      $ 14.65      $ 12.63      $ 11.61   
 

 

 

 
           
Total Investment Return Applicable to Common Shareholders3                                   

Based on net asset value

    3.97% 4      21.22%        2.01%        15.22%        7.36%        1.16%   
 

 

 

 

Based on market price

    0.13% 4      23.93%        1.12%        23.46%        16.19%        (4.68 )% 
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                   

Total expenses

    1.70% 5      1.87% 6      1.37% 6      1.17% 6      1.32% 6      1.54% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.63% 5      1.80% 6      1.30% 6      1.09% 6      1.20% 6      1.42% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    1.29% 5,8      1.39% 6,8      1.14% 6      1.01% 6      1.07% 6      1.13% 6 
 

 

 

 

Net investment income

    5.38% 5      5.76% 6      7.03% 6      6.85% 6      7.48% 6      7.23% 6 
 

 

 

 

Dividends to AMPS shareholders

                  0.18%        0.21%        1.05%        2.31%   
 

 

 

 

Net investment income to Common Shareholders

    5.38% 5      5.76%        6.85%        6.64%        6.43%        4.92%   
 

 

 

 
           
Supplemental Data                                   

Net assets applicable to Common Shareholders, end of period (000)

  $ 609,683      $ 602,780      $ 528,173      $ 553,367      $ 511,013      $ 508,698   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                       $ 274,650      $ 274,650      $ 296,125   
 

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 274,600      $ 274,600      $ 274,600                        
 

 

 

 

Portfolio turnover

    17%        44%        32%        38%        40%        25%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                       $ 75,371      $ 71,516      $ 67,958   
 

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of period

  $ 322,026      $ 319,152      $ 292,343                        
 

 

 

 

 

1   

Based on average Common Shares outstanding.

 

2   

Dividends are determined in accordance with federal income tax regulations.

 

3   

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

4   

Aggregate total investment return.

 

5   

Annualized.

 

6   

Do not reflect the effect of dividends to AMPS shareholders.

 

7   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VRDP Shares. See Note 1 and Note 7 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs and VRDP Shares, respectively.

 

8   

For the six months ended February 28, 2013 and 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 0.93% and 0.99%, respectively.

 

 

See Notes to Financial Statements.      
                
66    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
Financial Highlights    BlackRock MuniVest Fund, Inc. (MVF)

 

    Six Months Ended
February 28,
2013
(Unaudited)
    Year Ended August 31,  
      2012     2011     2010     2009     2008  
           
Per Share Operating Performance                                   

Net asset value, beginning of period

  $ 10.68      $ 9.55      $ 10.01      $ 8.98      $ 8.91      $ 9.39   
 

 

 

 

Net investment income1

    0.34        0.69        0.73        0.73        0.70        0.67   

Net realized and unrealized gain (loss)

    0.08        1.16        (0.47     0.97        (0.03     (0.45

Dividends to AMPS shareholders from net investment income

           (0.01     (0.02     (0.02     (0.06     (0.18
 

 

 

 

Net increase from investment operations

    0.42        1.84        0.24        1.68        0.61        0.04   
 

 

 

 

Dividends to Common Shareholders from net investment income

    (0.35     (0.71 )2      (0.70 )2      (0.65 )2      (0.54 )2      (0.52 )2 
 

 

 

 

Net asset value, end of period

  $ 10.75      $ 10.68      $ 9.55      $ 10.01      $ 8.98      $ 8.91   
 

 

 

 

Market price, end of period

  $ 11.29      $ 11.28      $ 9.73      $ 10.38      $ 8.91      $ 8.33   
 

 

 

 
           
Total Investment Return Applicable to Common Shareholders3                                   

Based on net asset value

    3.97% 4      19.85%        2.90%        19.31%        8.18%        0.51%   
 

 

 

 

Based on market price

    3.39% 4      24.24%        1.11%        24.69%        14.81%        (5.63 )% 
 

 

 

 
           
Ratios to Average Net Assets Applicable to Common Shareholders                                   

Total expenses

    1.54% 5      1.51% 6      1.28% 6      1.22% 6      1.53% 6      1.58% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly

    1.54% 5      1.51% 6      1.28% 6      1.22% 6      1.50% 6      1.58% 6 
 

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs7

    0.91% 5      0.98% 6,8      1.05% 6      1.03% 6      1.14% 6      1.10% 6 
 

 

 

 

Net investment income

    6.30% 5      6.79% 6      7.93% 6      7.71% 6      8.74% 6      7.34% 6 
 

 

 

 

Dividends to AMPS shareholders

           0.05%        0.18%        0.19%        0.78%        1.94%   
 

 

 

 

Net investment income to Common Shareholders

    6.30% 5      6.74%        7.75%        7.52%        7.96%        5.40%   
 

 

 

 
           
Supplemental Data                                   

Net assets applicable to Common Shareholders, end of period (000)

  $ 686,099      $ 679,207      $ 602,234      $ 625,195      $ 555,889      $ 551,027   
 

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of period (000)

                $ 243,825      $ 243,825      $ 243,825      $ 275,700   
 

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of period (000)

  $ 243,800      $ 243,800                               
 

 

 

 

Portfolio turnover

    5%        11%        10%        25%        31%        41%   
 

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of period

                $ 86,749      $ 89,106      $ 81,999      $ 74,993   
 

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of period

  $ 381,419      $ 378,592                               
 

 

 

 

 

1   

Based on average shares outstanding.

 

2   

Dividends are determined in accordance with federal income tax regulations.

 

3   

Total investment returns based on market price, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

4   

Aggregate total investment return.

 

5   

Annualized.

 

6   

Do not reflect the effect of dividends to AMPS shareholders.

 

7   

Interest expense, fees and amortization of offering costs relate to TOBs and/or VMTP Shares. See Note 1 and Note 8 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs 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, 2013    67


Table of Contents
Notes to Financial Statements (Unaudited)     

 

1. Organization and Significant Accounting Policies:

BlackRock Municipal Bond Investment Trust (“BIE”) and BlackRock Municipal Bond Trust (“BBK”) (collectively the “Bond Trusts”), BlackRock Municipal Income Investment Quality Trust (“BAF”), BlackRock Municipal Income Quality Trust (“BYM”) and BlackRock Municipal Income Trust II (“BLE”) are organized as Delaware statutory trusts. BlackRock MuniHoldings Investment Quality Fund (“MFL”) and BlackRock MuniVest Fund, Inc. (“MVF”) are organized as a Massachusetts business trust and as a Maryland corporation, respectively. BIE, BBK, BAF, BYM, BLE, MFL and MVF are referred to herein collectively as the “Trusts”. BBK, BYM and BLE are registered under the 1940 Act, as diversified, closed-end management investment companies. BAF, BIE, MFL and MVF are registered under the 1940 Act as non-diversified, closed-end management investment companies. The Trusts’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which may require management to make estimates and assumptions that affect the reported amounts 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. The Boards of Directors and the Boards of Trustees are collectively referred to throughout this report as the “Board of Trustees” or the “Board”, and the directors/trustees thereof are collectively referred to throughout this report as “Trustees.” The Trusts determine and make available for publication the NAV of their Common Shares on a daily basis.

The following is a summary of significant accounting policies followed by the Trusts:

Valuation: US 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 value 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. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value.

Exchange-traded options are valued at the mean between the last bid and ask prices at the close of the options market in which the options trade. An exchange-traded option for which there is no mean price is valued at the last bid (long positions) or ask (short positions) price. If no bid or ask price is available, the prior day’s price will be used, unless it is determined that the prior day’s price no longer reflects the fair value of the option. Over-the-counter (“OTC”) [options and swaptions] are valued by an independent pricing service using a mathematical model, which incorporates a number of market data factors, such as the trades and prices of the underlying instruments.

In the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the Global Valuation Committee, or its delegate, seeks to determine the price that each Trust might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deem relevant consistent with the principles of fair value measurement, which include the market approach, income approach and/or in the case of recent investments, the cost approach, as appropriate. A market approach generally consists of using comparable market transactions. The income approach generally is used to discount future cash flows to present value and adjusted for liquidity as appropriate. These factors include but are not limited to: (i) attributes specific to the investment or asset; (ii) the principal market for the investment or asset; (iii) the customary participants in the principal market for the investment or asset; (iv) data assumptions by market participants for the investment or asset, if reasonably available; (v) quoted prices for similar investments or assets in active markets; and (vi) other factors, such as future cash flows, interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, recovery rates, liquidation amounts and/or default rates. Due to the inherent uncertainty of valuations of such investments, the fair values may differ from the values that would have been used had an active market existed. The Global Valuation Committee, or its delegate, employs various methods for calibrating valuation approaches for investments where an active market does not exist, including regular due diligence of the Trusts’ pricing vendors, a regular review of key inputs and assumptions, transactional back-testing or disposition analysis to compare unrealized gains and losses to realized gains and losses, reviews of missing or stale prices and large movements in market values and reviews of any market related activity. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof on a quarterly basis.

Zero-Coupon Bonds: The 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

 

                
68    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
Notes to Financial Statements (continued)     

 

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 TOBs: The Trusts leverage their assets through the use of TOBs. A TOB is a special purpose entity established by a third party sponsor, into which a fund, or an agent on behalf of a fund, transfers municipal bonds into a trust (“TOB Trust”). Other funds managed by the investment advisor may also contribute municipal bonds to a TOB into which a Trust has contributed bonds. A TOB typically issues two classes of beneficial interests: short-term floating rate certificates (“TOB Trust Certificates”), which are sold to third party investors, and residual certificates (“TOB Residuals”), which are generally issued to the participating funds that contributed the municipal bonds to the TOB Trust. If multiple funds participate in the same TOB, the rights and obligations under the TOB Residual will be shared among the funds ratably in proportion to their participation. The TOB Residuals held by a Trust include the right of a Trust (1) to cause the holders of a proportional share of the TOB Trust Certificates to tender their certificates at par plus accrued interest upon the occurrence of certain mandatory tender events defined in the TOB agreements, and (2) to transfer, subject to a specified number of days’ prior notice, a corresponding share of the municipal bonds from the TOB to a Trust. The TOB may also be collapsed without the consent of a Trust, as the TOB Residual holder, upon the occurrence of certain termination events as defined in the TOB agreements. Such termination events may include the bankruptcy or default of the municipal bond, a substantial downgrade in credit quality of the municipal bond, the inability of the TOB to obtain renewal of the liquidity support agreement, a substantial decline in market value of the municipal bond and a judgment or ruling that interest on the municipal bond is subject to federal income taxation. Upon the occurrence of a Termination Event, the TOB would generally be liquidated in full with the proceeds typically applied first to any accrued fees owed to the trustee, remarketing agent and liquidity provider, and then to the holders of the TOB Trust Certificates up to par plus accrued interest owed on the TOB Trust Certificates, with the balance paid out to the TOB Residual holder. During the six months ended February 28, 2013, no TOBs in which the Trusts participated were terminated without the consent of the Trusts.

The cash received by the TOB from the sale of the TOB Trust Certificates, less transaction expenses, is paid to a Trust. The Trust typically invests the cash received in additional municipal bonds. Each Trust’s transfer of the municipal bonds to a TOB Trust is accounted for as a secured borrowing; therefore, the municipal bonds deposited into a TOB are presented in the 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 Statements of Assets and Liabilities as TOB Trust Certificates, approximates its fair value.

The Trusts may invest in TOBs on either a non-recourse or recourse basis. TOB Trusts are typically supported by a liquidity facility provided by a bank or other financial institution (the “Liquidity Provider”) that allows the holders of the TOB Trust Certificates to tender their certificates in exchange for payment from the Liquidity Provider of par plus accrued interest on any business day prior to the occurrence of the termination events described above. When a Trust invests in TOBS on a non-recourse basis, and the Liquidity Provider is required to make a payment under the liquidity facility due to a termination event, the Liquidity Provider will typically liquidate all or a portion of the municipal securities held in the TOB Trust and then fund, on a net basis, the balance, if any,) of the amount owed under the liquidity facility over the liquidation proceeds (the “Liquidation Shortfall”). If a Trust invests in a TOB 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 will bear the risk of loss with respect to any Liquidation Shortfall. If multiple funds participate in any such TOB, these losses will be shared ratably in proportion to their participation. The recourse TOB Trusts, if any, are identified in the Schedule of Investments.

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 are shown as interest expense, fees and amortization of offering costs in the Statements of Operations. The TOB Trust Certificates have interest rates that generally reset weekly and their holders have the option to tender such certificates to the TOB for redemption at par at each reset date. At February 28, 2013, the aggregate value of the underlying municipal bonds transferred to TOBs, the related liability for TOB Trust Certificates and the range of interest rates on the liability for TOB Trust Certificates were as follows:

 

    

Underlying

Municipal Bonds

Transferred to TOBs

   

Liability

for TOB Trust

Certificates

   

Range of

Interest Rates

 

BIE

  $ 38,473,917      $ 19,340,052        0.10% - 0.37%   

BBK

  $ 37,212,244      $ 20,608,872        0.10% - 0.16%   

BAF

  $ 79,597,722      $ 39,996,660        0.10% - 0.37%   

BYM

  $ 236,489,700      $ 117,377,482        0.10% - 0.36%   

BLE

  $ 168,214,560      $ 93,381,521        0.10% - 0.36%   

MFL

  $ 266,794,109      $ 134,552,822        0.11% - 0.37%   

MVF

  $ 405,216,923      $ 197,793,067        0.11% - 0.31%   

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    69


Table of Contents
Notes to Financial Statements (continued)     

 

For the six months ended February 28, 2013, 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

  $ 18,840,165        0.74

BBK

  $ 15,359,387        0.75

BAF

  $ 38,272,899        0.75

BYM

  $ 108,548,074        0.71

BLE

  $ 91,214,879        0.74

MFL

  $ 132,606,658        0.79

MVF

  $ 198,559,287        0.72

Should short-term interest rates rise, the Trusts’ investments in TOBs 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.

Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that the Trusts either deliver collateral or segregate assets in connection with certain investments (e.g., TOBs and financial futures contracts), the Trusts will, consistent with SEC rules and/or certain interpretive letters issued by the SEC, segregate collateral or designate on their books and records cash or liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, each Trust engaging in such transactions may have requirements to deliver/deposit securities to/with an exchange or broker-dealer as collateral for certain investments.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis.

Dividends and Distributions: Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. The character and timing of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Dividends and distributions to Preferred Shareholders are accrued and determined as described in Note 7.

Income Taxes: It is each Trust’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.

Each Trust files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Trusts’ US federal tax returns remains open for each of the four years ended August 31, 2012. 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 does not believe there are any uncertain tax positions that require recognition of a tax liability.

Recent Accounting Standards: In December 2011, the Financial Accounting Standards Board (the “FASB”) issued guidance that will expand current disclosure requirements on the offsetting of certain assets and liabilities. The new disclosures will be required for investments and derivative financial instruments subject to master netting or similar agreements, which are eligible for offset in the Statements of Assets and Liabilities and will require an entity to disclose both gross and net information about such investments and transactions in the financial statements. In January 2013, the FASB issued guidance that clarifies which investments and transactions are subject to the offsetting disclosure requirements. The scope of the disclosure requirements for offsetting will be limited to derivative instruments, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions. The guidance is effective for financial statements with fiscal years beginning on or after January 1, 2013, and interim periods within those fiscal years. Management is evaluating the impact of this guidance on the Trusts’ financial statement disclosures.

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. The 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 pro rated among those funds on the basis of relative net assets or other appropriate methods.

The Trusts have an arrangement with the custodians whereby fees may be reduced by credits earned on uninvested cash balances, which, if applicable, are shown as fees paid indirectly in the Statements of Operations. The custodians impose fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

2. Derivative Financial Instruments:

The Trusts engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Trusts and/or to economically hedge, or protect, their exposure to certain risks such as interest rate risk. These contracts may be transacted on an exchange or OTC.

 

                
70    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
Notes to Financial Statements (continued)     

 

 

Losses may arise if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument or if the counterparty does not perform under the contract. The Trusts’ maximum risk of loss from counterparty credit risk on OTC derivatives is generally the aggregate unrealized gain netted against any collateral pledged by/posted to the counterparty. For OTC options purchased, the Trusts bear the risk of loss in the amount of the premiums paid plus the positive change in market values net of any collateral received on the options should the counterparty fail to perform under the contracts. Options written by the Trusts do not give rise to counterparty credit risk, as options written obligate the Trusts and not the counterparty to perform. Counterparty risk related to exchange-traded financial futures contracts and options is deemed to be minimal due to the protection against defaults provided by the exchange on which these contracts trade.

The Trusts may mitigate counterparty risk by procuring collateral and through netting provisions included within an International Swaps and Derivatives Association, Inc. master agreement (“ISDA Master Agreement”) implemented between a Trust and each of its respective counterparties. An ISDA Master Agreement allows each Trust to offset with each separate counterparty certain derivative financial instrument’s payables and/or receivables with collateral held. The amount of collateral moved to/from applicable counterparties is generally based upon minimum transfer amounts of up to $500,000. To the extent amounts due to the Trusts from their counterparties are not fully collateralized, contractually or otherwise, the Trusts bear the risk of loss from counterparty non-performance. See Note 1 “Segregation and Collateralization” for information with respect to collateral practices. In addition, the Trusts manage counterparty risk by entering into agreements only with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

Certain ISDA Master Agreements allow counterparties to OTC derivatives to terminate derivative contracts prior to maturity in the event the Trusts’ net assets decline by a stated percentage or the Trusts fail to meet the terms of its ISDA Master Agreements, which would cause the Trusts to accelerate payment of any net liability owed to the counterparty.

Financial Futures Contracts: The Trusts purchase or sell financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk). Financial futures contracts are agreements between the 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. 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 and are recorded by the Trusts as unrealized appreciation or depreciation. 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.

Options: The Trusts purchase and write call and put options to increase or decrease their exposure to underlying instruments (including equity risk, interest rate risk and/or commodity price risk) and/or, in the case of options written, to generate gains from options premiums. A call option gives the purchaser (holder) of the option the right (but not the obligation) to buy, and obligates the seller (writer) to sell (when the option is exercised), the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying instrument at the exercise or strike price at any time or at a specified time during the option period. When the Trusts purchase (write) an option, an amount equal to the premium paid (received) by the Trusts is reflected as an asset (liability). The amount of the asset (liability) is subsequently marked-to-market to reflect the current market value of the option purchased (written). When an instrument is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the instrument acquired or deducted from (or added to) the proceeds of the instrument sold. When an option expires (or the Trusts enter into a closing transaction), the Trusts realize a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premiums received or paid). When the Trusts write a call option, such option is “covered,” meaning that the Trusts hold the underlying instrument subject to being called by the option counterparty. When the Trusts write a put option, such option is covered by cash in an amount sufficient to cover the obligation.

In purchasing and writing options, the Trusts bear the risk of an unfavorable change in the value of the underlying instrument or the risk that the Trusts may not be able to enter into a closing transaction due to an illiquid market. Exercise of a written option could result in the Trusts purchasing or selling a security at a price different from the current market value.

 

Derivative Financial Instruments Categorized by Risk Exposure:  
Fair Values of Derivative Financial Instruments as of February 28, 2013  
    

Liability Derivatives

 
    

BBK

 
     

Statements of Assets

and Liabilities Location

   Value  
Interest rate contracts:      

Financial futures contracts

   Net unrealized depreciation1    $ (1,409
  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.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    71


Table of Contents
Notes to Financial Statements (continued)     

 

 

The Effect of Derivative Financial Instruments in the Statements of Operations
Six Months Ended February 28, 2013
 
     `
Net Realized Loss  From
 
     BBK      BYM  
Interest rate contracts:      

Financial futures contracts

   $ (44,756    $ (162,937

Options1

     (57,863        
  

 

 

 

Total

   $ (102,619    $ (162,937
  

 

 

 

1   Options purchased are included in the net realized gain (loss) from investments and net change in unrealized appreciation/depreciation on investments.

      

     
      Net Change in Unrealized
Appreciation/Depreciation on
 
     BBK  
Interest rate contracts:      

Financial futures contracts

     $(1,409)   
     
For the six months ended February 28, 2013, the average quarterly balances of outstanding derivative financial instruments were as follows:   
     
      BBK      BYM  
Financial futures contracts:      

Average number of contracts sold.

     11         65   

Average notional value of contracts sold

   $ 1,581,594       $ 8,718,125   
Options:      

Average number of contracts purchased

     1 2         

Average notional value of contracts purchased

   $ 25,594 2         
  2   

The actual contract amount is shown due to limited activity.

 

3. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. (“PNC”) is the largest stockholder and an affiliate, for 1940 Act purposes, of BlackRock, Inc. (“BlackRock”).

Each 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 necessary 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

    0.65

BBK

    0.65

BAF

    0.55

BYM

    0.55

BLE

    0.55

MFL

    0.55

MVF

    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 the sum of its accrued liabilities.

The Manager entered into a sub-advisory agreement with BlackRock Financial Management, Inc. (“BFM”), an affiliate of the Manager, with respect to BAF, BYM, the Bond Trusts and BLE, and Blackrock investment Management, LLC (“BIM”), an affiliate of the Manager, with respect to MFL and MVF. The Manager pays BFM and BIM, for services they provide, a monthly fee that is a percentage of the investment advisory fees paid by each Trust to the Manager.

Effective June 1, 2012, the Manager voluntarily agreed to waive a portion of investment advisory fee with respect to BIE at an annual rate of 0.08%, as a percentage of average weekly net assets. With respect to MFL, the Manager voluntarily agreed to waive its investment advisory fees on the proceeds of Preferred Shares and TOBs that exceed 35% of its total assets minus the sum of its accrued liabilities. For the six months ended February 28, 2013, the Manager waived the following amounts, which are included in fees waived by Manager in the Statements of Operations:

 

BIE

  $ 37,195   

MFL

  $ 212,624   

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 investment in affiliated money market funds. However, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid in connection with each Trust’s investment in other affiliated investment companies, if any. This amount is included in, or shown as, fees waived by Manager in the Statements of

 

                
72    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
Notes to Financial Statements (continued)     

 

Operations. For the six months ended February 28, 2013, the amounts waived were as follows:

 

BIE

  $ 330   

BBK

  $ 958   

BAF

  $ 601   

BYM

  $ 1,376   

BLE

  $ 1,807   

MFL

  $ 3,728   

MVF

  $ 3,131   

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

 

4. Investments:

Purchases and sales of investments excluding short-term securities for the six months ended February 28, 2013 were as follows:

 

     Purchases     Sales  

BIE

  $ 9,017,748      $ 8,186,132   

BBK

  $ 52,936,385      $ 57,048,552   

BAF

  $ 32,617,495      $ 26,698,889   

BYM

  $ 76,464,179      $ 68,114,879   

BLE

  $ 68,192,727      $ 38,903,073   

MFL

  $ 173,654,903      $ 171,952,470   

MVF

  $ 52,714,446      $ 63,794,202   

 

 

5. Income Tax Information:

As of August 31, 2012, the Trusts had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates:

 

Expires August 31,   BIE     BAF     BYM     BLE     MFL     MVF  

2013

                              $ 2,325,913          

2015

                $ 1,522,202                        

2016

                  3,217,765      $ 1,648,836                 

2017

                  6,430,212        3,397,830        6,481,433      $ 7,618,622   

2018

  $ 661,404               2,209,430        4,366,226        11,734,707          

2019

    718,157      $ 709,003               2,448,693               5,276,524   

No expiration date1

                  2,664,269                      5,946,440   
 

 

 

 

Total

  $     1,379,561      $        709,003      $   16,043,878      $   11,861,585      $ 20,542,053      $   18,841,586   
 

 

 

 

 

  1   

Must be utilized prior to losses subject to expiration.

As of February 28, 2013, the gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

 

     BIE     BBK     BAF     BYM     BLE     MFL     MVF  

Tax cost

  $ 64,730,912      $ 234,840,934      $ 168,285,166      $ 501,570,325      $ 476,848,945      $ 795,016,593      $ 804,755,030   
 

 

 

 

Gross unrealized appreciation

  $ 10,492,052      $ 27,608,667      $ 20,557,905      $ 63,647,130      $ 151,565,094      $ 91,190,736      $ 124,889,982   

Gross unrealized depreciation

    (216,625     (1,554,756     (418,328     (1,573,951     (5,264,060     (1,837,367     (7,313,692
 

 

 

 

Net unrealized appreciation

  $ 10,275,427      $ 26,053,911      $ 20,139,577      $ 62,073,179      $ 146,301,034      $ 89,353,369      $ 117,576,290   
 

 

 

 

 

6. Concentration, Market and Credit Risk:

Each Trust invests a substantial amount of their assets in issuers located in a single state or limited number of states. Please see the Schedules of Investments for concentrations in specific states.

Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.

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 and 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 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.

As of February 28, 2013, BIE, BAF and BYM invest a significant portion of their assets in securities in the county/city/special district/school district sector. BIE, BAF, BLE, MFL and MVF invest a significant portion of their

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    73


Table of Contents
Notes to Financial Statements (continued)     

 

assets in securities in the transportation sector. BBK and MVF, invest a significant portion of their assets in securities in the health sector. Changes in economic conditions affecting the county/city/special district/school district, transportation and health sectors would have a greater impact on the Trusts and could affect the value, income and/or liquidity of positions in such securities.

7. Capital Share Transactions:

Each Trust, except MFL and MVF, is authorized to issue an unlimited number of shares, including Preferred Shares, par value $0.001 per share, all of which are initially classified as Common Shares. Each Trust’s Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without approval of Common Shareholders.

MFL is authorized to issue an unlimited number of shares, including 1 million Preferred Shares, 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, par value $0.10 per share.

Common Shares

For the years shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:

 

     Six Months Ended
February 28, 2013
    Year Ended
August 31, 2012
 

BIE

    937        2,729   

BBK

    13,365        32,815   

BAF

    2,424        4,717   

BYM

    30,719        42,891   

BLE

    23,604        66,755   

MFL

    45,928        46,224   

MVF

    217,812        537,279   

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 Trusts’ Common Shares or the repurchase of the Trusts’ Common Shares if the Trusts fail to maintain the asset coverage of at least 200% of the liquidation preference of the outstanding Preferred Shares. In addition, pursuant to the Preferred Shares’ governing instrument, the Trusts are restricted from declaring and paying dividends on classes of shares ranking junior to or on parity with the Preferred Shares or repurchasing such shares if the Trusts fail to declare and pay dividends on the Preferred Shares, redeem any Preferred Shares required to be redeemed under the Preferred Shares governing instrument or comply with the basic maintenance amount requirement of the rating agencies then rating the Preferred Shares.

The holders of Preferred Shares have voting rights equal to the holders of Common Shares (one vote per share) and will vote together with holders of Common Shares (one vote per share) as a single class. However, the holders of Preferred Shares, voting as a separate class, are also entitled to elect two Directors for each 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 providers in the event of a failed remarketing. The VRDP Trusts are required to redeem the VRDP Shares owned by the liquidity providers 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.

The VRDP Shares outstanding as of February 28, 2013 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   

The VRDP Trusts entered into a fee agreement with the liquidity providers that may require a per annum liquidity fee payable to the liquidity providers. These fees are shown as liquidity fees in the Statements of Operations.

The initial fee agreement between BIE and the liquidity provider was for a 364-day term and was scheduled to expire on September 15, 2012 and subsequently extended until March 15, 2013, unless renewed or terminated in advance. On November 29, 2012, BIE entered into a new fee agreement with an alternate liquidity provider. The new fee agreement is for a 2-year term and is scheduled to expire on December 4, 2014, unless renewed or terminated in advance. The change in liquidity provider resulted in a mandatory tender of BIE’s VRDP Shares on November 28, 2012, which were successfully remarketed by the remarketing agent. The fee agreement between MFL and its liquidity provider is for a 364-day term and is scheduled to expire on June 26, 2013, unless renewed or terminated in advance.

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 ended after the purchase date. Immediately after the purchase of any VRDP Shares by the liquidity providers, the VRDP Trusts are required to begin to segregate liquid assets with the VRDP Trusts’ custodian 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.

 

                
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Table of Contents
Notes to Financial Statements (continued)     

 

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, each VRDP Trust is 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 it fails to maintain certain asset coverage, basic maintenance amount or leverage requirements.

Subject to certain conditions, the VRDP Shares may be redeemed, in whole or in part, at any time at the option of VRDP Trusts. The redemption price per VRDP Share is equal to the liquidation value per share plus any outstanding unpaid dividends. In the event of an optional redemption of the VRDP Shares prior to the initial termination date of the fee agreement, VRDP Trusts must pay the respective liquidity provider fees on such redeemed VRDP Shares for the remaining term of the fee agreement up to the initial termination date.

Dividends on the VRDP Shares are payable monthly at a variable rate set weekly by the remarketing agent. Such dividend rates are generally based upon a spread over a base rate and cannot exceed a maximum rate. In the event of a failed remarketing, the dividend rate of the VRDP Shares will be reset to a maximum rate. The maximum rate is determined based on, among other things, the long-term preferred share rating assigned to the VRDP Shares and the length of time that the VRDP Shares fail to be remarketed. At the date of issuance, the VRDP Shares were assigned a long-term rating of Aaa from Moody’s and AAA from Fitch. In May 2012, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of February 28, 2013, 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, 2013, the short-term ratings of the liquidity provider and the VRDP Shares were P2 and F1 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 providers fail to maintain short-term debt ratings in one of the two highest rating categories.

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 and MFL’s VRDP Shares have successfully remarketed since issuance, with an annualized dividend rate of 0.33% for BIE and 0.35% for MFL for the six months ended February 28, 2013.

VRDP Shares issued and outstanding remained constant for the six months ended February 28, 2013 for BIE and MFL. VRDP shares issued and outstanding remained constant for the year ended August 31, 2012 for MFL.

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.

The VMTP Shares outstanding as of February 28, 2013 were as follows:

 

     Issue
Date
    Shares
Issued
    Aggregate
Principal
    Term
Date
 

BBK

    12/16/11        799      $ 79,900,000        1/02/15   

BAF

    12/16/11        422      $ 42,200,000        1/02/15   

BYM

    12/16/11        1,372      $ 137,200,000        1/02/15   

BLE

    12/16/11        1,513      $ 151,300,000        1/02/15   

MVF

    12/16/11        2,438      $ 243,800,000        1/02/15   

Each VMTP Trust is required to redeem its VMTP Shares on the term date, unless earlier redeemed, repurchased or 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 ended prior to term date, each VMTP Trust is required to begin to segregate liquid assets with the Trusts’ 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 Trusts’ VMTP Shares may be redeemed, in whole or in part, at any time at the option of each 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 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 each Trust may also be required to register the VMTP Shares for sale under the Securities Act of 1933 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 Securities Industry and Financial Markets Association Municipal Swap Index (SIFMA). The fixed spread is determined based on the long-term preferred share rating assigned to the VMTP Shares by Moody’s and Fitch. At the date of issu-

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    75


Table of Contents
Notes to Financial Statements (continued)     

 

ance, the VMTP Shares were assigned long-term ratings of Aaa from Moody’s and AAA from Fitch. In May 2012, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of February 28, 2013, 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 VMTP Trust fails to comply with certain provisions, including, among other things, the timely payment of dividends, redemptions or gross-up payments, and maintaining certain asset coverage and leverage requirements.

The average annualized dividend rates for the VMTP Shares for the six months ended February 28, 2013 were as follows:

 

BAF

    1.16%   

BBK

    1.16%   

BYM

    1.16%   

BLE

    1.16%   

MVF

    1.16%   

For financial reporting purposes, the VMTP Shares are considered debt of the issuer; therefore the liquidation value, which approximates fair value of the VMTP Shares is recorded as a liability in the Statements of Assets and Liabilities. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends accrued and paid on the VMTP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VMTP Shares are treated as equity for tax purposes. Dividends paid to holders of the VMTP Shares are generally classified as tax-exempt income for tax-reporting purposes.

VMTP Shares issued and outstanding remained constant for the six months ended February 28, 2013.

Offering Costs: The Trusts incurred costs in connection with their issuance of VRDP Shares 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 providers, 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.

AMPS

The AMPS were redeemable at the option of each Trust, in whole or in part, on any dividend payment date at their liquidation preference per share plus any accumulated and unpaid dividends whether or not declared. The AMPS were also subject to mandatory redemption at their liquidation preference plus any accumulated and unpaid dividends, whether or not declared, if certain requirements relating to the composition of the assets and liabilities of a Trust, as set forth in each Trust’s Articles of Supplementary/Statement of Preferences and or/Certificate of Designation (the “Governing Instrument”) were not satisfied.

From February 13, 2008 to the redemption dates listed below, the AMPS of the Trusts failed to clear any of their auctions. A failed auction was not an event of default for the Trusts but it has a negative impact on the liquidity of AMPS. A failed auction occurs when there are more sellers of a Trust’s AMPS than buyers.

As of February 28, 2013, the Trusts did not have any AMPS outstanding.

During the year ended August 31, 2012, BIE, BBK, BAF, BYM, BLE and MVF announced the following redemptions of AMPS at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date:

 

     Series  

Redemption

Date

   

Shares

Redeemed

   

Aggregate

Principal

 
BIE   W-7     10/06/11        714      $ 17,850,000   

BBK

  T-7     1/11/12        1,598      $ 39,950,000   
    R-7     1/13/12        1,598      $ 39,950,000   
BAF   M-7     1/10/12        1,691      $ 42,275,000   

BYM

  M-7     1/10/12        1,830      $ 45,750,000   
  F-7     1/13/12        1,830      $ 45,750,000   
    R-7     1/09/12        1,830      $ 45,750,000   

BLE

  M-7     1/10/12        1,513      $ 37,825,000   
  T-7     1/11/12        1,513      $ 37,825,000   
  R-7     1/12/12        1,513      $ 37,825,000   
    F-7     1/13/12        1,513      $ 37,825,000   

MVF

  A     1/09/12        1,460      $ 36,500,000   
  B     1/17/12        1,460      $ 36,500,000   
  C     1/23/12        1,460      $ 36,500,000   
  D     1/03/12        1,460      $ 36,500,000   
  E     1/03/12        2,190      $ 54,750,000   
    F     1/11/12        1,723      $ 43,075,000   

BIE financed the AMPS redemptions with proceeds received from the issuance of VRDP Shares of $17,800,000.

BBK, BAF, BYM, BLE and MVF financed the AMPS redemptions with proceeds received from the issuance of VMTP Shares as follows:

 

BBK

  $ 79,900,000   

BAF

  $ 42,200,000   

BYM

  $ 137,200,000   

BLE

  $ 151,300,000   

MVF

  $ 243,800,000   

8. 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:

Each Trust paid a net investment income dividend on April 1, 2013 to Common Shareholders of record on March 15, 2013 as follows:

 

     Common
Dividend
Per Share
 

BIE

  $ 0.0760   

BBK

  $ 0.0785   

BAF

  $ 0.0685   

BYM

  $ 0.0780   

BLE

  $ 0.0850   

MFL

  $ 0.0765   

MVF

  $ 0.0590   

 

                
76    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
Notes to Financial Statements (concluded)     

 

Additionally, the Trusts declared a net investment income dividend on April 1, 2013 payable to Common Shareholders of record on April 15, 2013 for the same amounts noted above.

The dividends declared on VRDP or VMTP Shares for the period March 1, 2013 to March 31, 2013 were as follows:

 

     Series     VRDP/VMTP
Dividend
Per Share
 

BIE

    W-7      $ 3,228   

BBK

    W-7      $ 75,565   

BAF

    W-7      $ 39,911   

BYM

    W-7      $ 129,757   

BLE

    W-7      $ 143,092   

MFL

    W-7      $ 74,405   

MVF

    W-7      $ 230,575   

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    77


Table of Contents
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

Paul L. Audet, President1 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

Henry Gabbay, Trustee

Jerrold B. Harris, Trustee

R. Glenn Hubbard, Trustee

W. Carl Kester, Trustee and Member of the Audit Committee

John M. Perlowski, President2 and Chief Executive Officer

Anne Ackerley, Vice President

Brendan Kyne, Vice President

Robert W. Crothers, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Brian Kindelan, Chief Compliance Officer and Anti-Money Laundering Officer

Janey Ahn, Secretary

 

1   

For MFL.

 

2   

For all Trusts except MFL.

Investment Advisor

BlackRock Advisors, LLC

Wilmington, DE 19809

Sub-Advisors

BlackRock Investment Management, LLC3

Princeton, NJ 08540

BlackRock Financial Management, Inc.4

New York, NY 10055

Custodians

The Bank of New York Mellon3

New York, NY 10286

State Street Bank and Trust Company4

Boston, MA 02110

Transfer Agent

Common Shares

Computershare Trust Company, N.A.

Canton, MA 02021

VRDP Tender and Paying Agent and

VMTP Redemption and Paying Agent

The Bank of New York Mellon

New York, NY 10289

VRDP Liquidity Providers

Bank of America, N.A.5

New York, NY 10036

Barclays Bank PLC6

New York, NY 10019

VRDP Remarketing Agents

Merrill Lynch, Pierce, Fenner & Smith Incorporated5

New York, NY 10036

Barclays Capital Inc.6

New York, NY 10019

Accounting Agent

State Street Bank and Trust Company

Boston, MA 02116

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02116

Legal Counsel

Skadden, Arps, Slate, Meagher & Flom LLP

New York, NY 10036

Address of the Trusts

100 Bellevue Parkway

Wilmington, DE 19809

 

3   

For MFL and MVF.

 

4   

For BIE, BBK, BAF, BYM and BLE.

 

5   

For MFL.

 

6   

For BIE.

 

                
78    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
Additional Information     

 

Regulation Regarding Derivatives

 

Effective December 31, 2012, the Commodity Futures Trading Commission (“CFTC”) adopted certain regulatory changes that subject registered investment companies and advisers to registered investment companies to regulation by the CFTC if a fund invests more than a prescribed level of its net assets in CFTC-regulated futures, options and swaps (“CFTC Derivatives”), or if the fund markets itself as providing investment exposure to such instruments. To the extent a Trust uses CFTC-regulated futures, options and swaps, it intends to do so below such prescribed levels and will not market itself as a “commodity pool” or a vehicle for trading such instruments. Accordingly, BlackRock Advisors, LLC has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act (“CEA”) pursuant to Rule 4.5 under the CEA. BlackRock Advisors, LLC is not, therefore, subject to registration or regulation as a “commodity pool operator” under the CEA in respect of each Trust.

 

Dividend Policy

 

Each Trusts’ dividend policy is to distribute all or a portion of their net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend 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 dividends 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

 

On July 29, 2010, the Manager announced that a derivative complaint had been filed by shareholders of BYM, BAF and BIE on July 27, 2010 in the Supreme Court of the State of New York, New York County. The complaint named the Manager, BlackRock, Inc. and certain of the trustees, officers and portfolio managers of BYM, BAF and BIE as defendants. The complaint alleged, among other things, that the parties named in the complaint breached fiduciary duties owed to BYM, BAF and BIE and their Common Shareholders by redeeming auction-market preferred shares, auction rate preferred securities, auction preferred shares and auction rate securities (collectively, “AMPS”) at their liquidation preference. The complaint sought unspecified damages for losses purportedly suffered by BYM, BAF and BIE as a result of the prior redemptions and injunctive relief preventing BYM, BAF and BIE from redeeming AMPS at their liquidation preference in the future. On March 15, 2012, the Supreme Court of the State of New York, New York County entered an order consolidating the above-referenced derivative complaint with another derivative complaint, containing almost identical allegations, already pending in that court. The court on March 15, 2012, also granted plaintiffs permission to file an amended complaint. On April 16, 2012, the plaintiffs filed a Consolidated Shareholder Derivative Complaint containing allegations substantially similar to those in the original complaint as to, among others, BAF. However, the Consolidated Shareholder Derivative Complaint did not include either BIE or BYM as a nominal defendant. Thus, BIE and BYM are no longer nominal defendants in the derivative complaint. Defendants, including BAF, moved to dismiss the Consolidated Shareholder Derivative Complaint on July 20, 2012. Plaintiffs on September 14, 2012 moved to hold the defendants’ motion to dismiss in abeyance and allow plaintiffs limited discovery of the Demand Review Committee of the Board of Directors, including depositions of its members and documents upon which they relied. The parties have agreed to proceed with limited discovery pending resolution of the defendants’ motion to dismiss. The Manager, BlackRock, Inc. and the other parties named in the complaint believe that the claims asserted in the complaint are without merit and intend to vigorously defend themselves in the litigation.

On August 11, 2010, the Manager announced that a derivative complaint had been filed by shareholders of MFL on August 3, 2010 in the Supreme Court of the State of New York, New York County. The complaint named the Manager, BlackRock, Inc. and certain of the directors, officers and portfolio managers of MFL as defendants. The complaint alleged, among other things, that the parties named in the complaint breached fiduciary duties owed to MFL and its Common Shareholders by redeeming AMPS at their liquidation preference. The complaint sought unspecified damages for losses purportedly suffered by MFL as a result of the prior redemptions and injunctive relief preventing MFL from redeeming AMPS at their liquidation preference in the future. On March 15, 2012, the Supreme Court of the State of New York, New York County entered an order consolidating the above-referenced derivative complaint with another derivative complaint, containing almost identical allegations, already pending in that court. The court on March 15, 2012, also granted plaintiffs permission to file an amended complaint. On April 16, 2012, the plaintiffs filed a Consolidated Shareholder Derivative Complaint containing allegations substantially similar to those in the original complaint as to, among others, MFL. Defendants, including MFL, moved to dismiss the Consolidated Shareholder Derivative Complaint on July 20, 2012. Plaintiffs on September 14, 2012 moved to hold the defendants’ motion to dismiss in abeyance and allow plaintiffs limited discovery of the Demand Review Committee of the Board of Directors, including depositions of its members and documents upon which they relied. The parties have agreed to proceed with limited discovery pending resolution of the defendants’ motion to dismiss. The Manager, BlackRock, Inc. and the other parties named in the complaint believe that the claims asserted in the complaint are without merit and intend to vigorously defend themselves in the litigation.

 

                
   SEMI-ANNUAL REPORT    FEBRUARY 28, 2013    79


Table of Contents
Additional Information (continued)     

 

General Information (continued)

 

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 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 into this report.

Electronic Delivery

Electronic copies of most financial reports are available on the Trusts’ websites or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the Trusts’ electronic delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service.

Householding

The 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

Each Trust files its 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, DC. Information on how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330.Each Trust’s Forms N-Q may also be obtained upon request and without charge by calling (800) 882-0052.

 

                
80    SEMI-ANNUAL REPORT    FEBRUARY 28, 2013   


Table of Contents
Additional Information (continued)     

 

General Information (concluded)

 

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Trusts use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 882-0052; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the 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 periodically 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, 2013    81


Table of Contents
Additional Information (concluded)     

 

BlackRock Privacy Principles

 

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

 

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

 

                
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Table of Contents

This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. 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 the short-term dividend rates of the Preferred Shares, may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.

 

 

LOGO

 

CEF-NTL-7-2/13-SAR    LOGO


Table of Contents
Item 2 –   Code of Ethics – Not Applicable to this semi-annual report
Item 3 –   Audit Committee Financial Expert – Not Applicable to this semi-annual report
Item 4 –   Principal Accountant Fees and Services – Not Applicable to this semi-annual report
Item 5 –   Audit Committee of Listed Registrants – Not Applicable to this semi-annual report
Item 6 –   Investments
  (a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.
  (b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.
Item 7 –   Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable to this semi-annual report
Item 8 –   Portfolio Managers of Closed-End Management Investment Companies
 

(a)   Not Applicable to this semi-annual report

 

(b)   As of the date of this filing, there have been no changes in any of the portfolio managers identified in the most recent annual report on Form N-CSR.

Item 9 –   Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable
Item 10 –   Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.
Item 11 –   Controls and Procedures
  (a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
  (b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12 –   Exhibits attached hereto
  (a)(1) – Code of Ethics – Not Applicable to this semi-annual report
  (a)(2) – Certifications – Attached hereto
  (a)(3) – Not Applicable
  (b) – Certifications – Attached hereto

 

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Table of Contents

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

 

BlackRock 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, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:  

/s/ John M. Perlowski

  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock MuniVest Fund, Inc.
Date: May 1, 2013
By:      

/s/ Neal J. Andrews

  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock MuniVest Fund, Inc.
Date: May 1, 2013

 

3